intl contract manual v1-3 12/14 rel

Chapter 42

Guide to European Union Trade Laws

By: Marian Niestedt*

§ 42:1 Overview of EU trade laws§ 42:2 Anti-dumping measures§ 42:3 —Relevant issues§ 42:4 —Applicable procedures§ 42:5 —Practical comments§ 42:6 Countervailing measures (anti-subsidy

proceedings)§ 42:7 —Relevant issues§ 42:8 —Applicable procedures§ 42:9 —Practical comments§ 42:10 Safeguard measures§ 42:11 —Relevant issues§ 42:12 —Applicable procedures§ 42:13 —Practical comments§ 42:14 The Trade Barriers Regulation§ 42:15 —Relevant issues§ 42:16 —Applicable procedures§ 42:17 Conclusion

*Partner at Graf von Westphalen. http://www.gvw.com.Marian Niestedt is partner of the German law �rm GvW Graf von

Westphalen with o�ces in Germany (Berlin, Hamburg, Munich, Frankfurtand Düsseldorf), Alicante, Brussels, Istanbul and Shanghai. He completedhis legal education at the Universities of Kiel, Liège and Guildfordand andholds a Master of European Studies (M.E.S.) from the European Centre forComparative Government and Public Policy in Berlin. Mr. Niestedt hasrepresented companies and their senior executives before the nationalauthorities and the European Commission as well as before �scal, civil, crim-inal and administrative courts all the way up to the Court of Justice of theEU. Marian Niestedt is the author of several publications on foreign tradeand customs law and is referred to as a leading expert in customs andinternational trade law by Who's Who Legal Trade & Customs and Who'sWho Legal Germany.

Jean-François Bellis, founding partner of Van Bael & Bellis, Brussels,authored the previous version of this chapter.

42-1K 2014 Thomson Reuters, 12/2014

KeyCiteL: Cases and other legal materials listed in KeyCite Scope can beresearched through the KeyCite service on WestlawL. Use KeyCite to checkcitations for form, parallel references, prior and later history, andcomprehensive citator information, including citations to other decisionsand secondary materials.

§ 42:1 Overview of EU trade lawsOne of the fundamental tasks attributed to the European

Union (hereinafter also referred to as “the Union” or the “EU”)1

by the Treaty on the Functioning of the European Union(“TFEU”) is the establishment of a “common commercial policy”(Article 207 TFEU). The Union enjoys exclusive competence inthe �eld of trade policy.

The European Union has adopted a number of trade policyinstruments which are designed to protect Union producersagainst various forms of perceived “unfair” trade practices.2

These instruments allow the Union Institutions essentially totake the following trade protection measures:

(1) Anti-dumping measures: Union authorities may takeprotective measures with respect to dumped imports underRegulation No 1225/2009.3

(2) Countervailing measures: In the past, the legislativeinstruments empowering Union authorities to take measuresagainst dumped imports also authorized them to take protec-tive measures with respect to subsidized imports. This situa-tion changed, however, with the entry into force of Regula-

[Section 42:1]1According to Article 2 (a) Regulation No. 37/2014, (2014) O.J. L 18/1,

any reference to the words ‘European Community’, ‘Community’, ‘EuropeanCommunities’ or ‘Communities’ in the relevant Regulations shall beunderstood as a reference to the ‘European Union’ or ‘Union’.

2For a detailed analysis of all the EU trade policy instruments, see VanBael and Bellis, “EU Anti-Dumping and Other Trade Defence instruments”Fifth Edition, Kluwer Law International (2011); Giannkopoulos, A ConciseGuide to the EU Anti-Dumping/Anti Subsidies Procedures (2006); McGovern,EU Anti-Dumping and Trade Defence Law and Practice (2008).

3(2009) O.J. L 343/51. The Regulation has been amended on threeoccasions: Regulation No. 765/2012, (2012) O.J. L 237/1; Regulation No.1168/2012, (2012) O.J. L 344/1; Regulation No. 37/2014, (2014) O.J. L 18/1.Regulation No. 1225/2009 is the codi�ed version of Regulation No. 384/96,(1996) O.J. L 56/1, which has been amended on six occasions.

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tion No. 3284/944 which provides for a separate legalinstrument to deal with subsidized imports. This Regulationwas replaced by Regulation No. 2026/975 which in turn wasfollowed by its codi�ed version Regulation No. 597/20096

which currently governs all EU anti-subsidy proceedings.(3) Safeguard measures: Apart from anti-dumping and

countervailing measures, imports from third countries intothe Union may also be subject to safeguard measures underthe relevant provisions of Regulations Nos. 260/20097 and625/2009.8 Whereas anti-dumping and countervailingmeasures allow Union authorities to take action with respectto the prices at which products are imported, safeguardmeasures allow them to restrict the volume of imports.

(4) Measures under the “Trade Barriers Regulation”: SinceSeptember 1984, Union authorities have been empowered totake measures with respect to “illicit commercial practices”of third countries under Regulation No. 2641/84.9 ThisRegulation, which was modeled on section 301 of the U.S.Trade Agreements Act, was the �rst Union legislationdesigned to protect Union trade interests in third markets.It has been replaced and substantially amended by CouncilRegulation No. 3286/94 laying down procedures in the �eldof the common commercial policy in order to ensure thatUnion rights are exercised under international trade rules,in particular those established under the auspices of theWorld Trade Organization,10 referred to by the Commissionas the “Trade Barriers Regulation.” The “Trade BarriersRegulation” was further amended by Regulation No. 125/

4(1994) O.J. L 349/22.5(1997) O.J. L 288/1. The Regulation has been amended once by Regula-

tion No 461/2004, (2004) O.J. L 77/12.6(2009) O.J. L 185/1; as amended by Regulation No. 37/2014, (2014)

O.J. L 18/1.7(2009) O.J. L 84/1; as amended by Regulation No. 37/2014, (2014) O.J.

L 18/1; Regulation No. 260/2009 is the codi�ed version of Regulation No.3285/94, (1994) O.J. L 349/53.

8(2009) O.J. L 185/1; as amended by Regulation No. 37/2014, (2014)O.J. L 18/1; Regulation No. 625/2009 is the codi�ed version of Regulation No.519/94, (1994) O.J. L 67/89.

9(1984) O.J. L 252/1.10(1994) O.J. L 349/71.

§ 42:1Guide to European Union Trade Laws


200811 to include the right of enterprises to bring complaintson (alleged) obstacles to trade which are solely the subject ofa right of action established under international trade ruleslaid down in a bilateral trade agreement. Regulation No.3286/94 will most likely be newly codi�ed in 2014; however,without changing the substance of the Regulation.12 Regula-tion No. 3286/94 has also been amended by Regulation No.654/2014 concerning the exercise of the Union's rights forthe application and enforcement of international trade rules,i.e. the suspension or withdrawal of concessions or otherobligations under international trade agreements.13 Regula-tions No. 37/201414 and 38/201415 introduced amendments toseveral regulations of the trade policy area in order to adjustthem to the Lisbon Treaty. A comprehensive modernizationof European trade defense law, which was intended by a2013 Commission's proposal,16 has not yet been adopted bythe European Parliament.

In the following sections, the essential features of thesemeasures will be discussed. Particular emphasis will be placedon the Union's anti-dumping legislation as it is the EuropeanUnion's most frequently used trade instrument.

§ 42:2 Anti-dumping measuresAnti-dumping measures are administered by the European

Commission Directorate-General for Trade and its assistingCommittee.

§ 42:3 Anti-dumping measures—Relevant issuesThe Union's �rst Anti-Dumping Regulation was enacted in

1968. It has been amended many times over the years to re�ectnew rules introduced in the WTO Anti-Dumping Agreement aswell as changes in the European Commission's anti-dumpingpractice. Anti-Dumping Regulation No. 384/96 implemented

11(2008) O. J. L 40/1.12Commission Proposal COM (2014) 341 �nal.13(2014) O.J.L 189/50.14(2014) O.J.L 18/1.15(2014) O.J.L 18/52.16COM(2013) 192 �nal. The proposal intended, inter alia, to increase

transparency, to establish exceptions to the lower duty rule and to protectthe Union industry against retaliation of third countries which are a�ectedby EU trade defense measures.

§ 42:1 International Contract Manual

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the provisions of the 1994 WTO Anti-Dumping Agreement. Itsreplacement by Regulation No. 1225/2009 was a true codi�ca-tion and did not introduce any change of substance.

As already stated, the Union's anti-dumping rules are mod-eled on the provisions of the GATT provisions as interpreted inthe WTO Anti-Dumping Agreement. Thus, prior to applyingprotective measures, the EU authorities must, in accordancewith WTO principles, establish (1) that the imports concernedhave been dumped and (2) that such imports have caused ma-terial injury to the Union industry. In addition, however, theauthorities must also establish (3) that the imposition ofmeasures is in the “Union's interest”- a requirement notprovided for in the WTO system.

Dumping Determination. Under Regulation No 1225/2009, aproduct is considered dumped if its export price to the EU isless than the normal value of said product. The normal valueis the “prices paid or payable, in the ordinary course of trade,by independent customers in the exporting country.”1 In thefollowing exceptional situations, however, this price is disre-garded and either the export price to a third country or aconstructed value is used: (1) where there are no sales of thelike product on the domestic market of the exporting country;(2) where the sales on the domestic market are not in theordinary course of trade—such is the case when sales are madebelow cost, are between “associated” parties, or between par-ties having a compensatory arrangement; and (3) where thesales do not permit a proper comparison.

Special rules apply for so-called “non-market economycountries” within the meaning of Regulation No. 1225/2009.For such countries, the normal value is determined on thebasis of prices or costs in an “analogue” market economycountry, a practice which normally leads to the establishmentof substantial dumping margins for such countries. However,Regulation No. 1225/2009 furthermore distinguishes betweentwo di�erent categories of non-market economy countries, i.e.,on the one hand, China, Kazakhstan, Vietnam, and any non-market economy country which is a member of the WTO at theinitiation of the proceeding and, on the other hand, the remain-

[Section 42:3]1Article 2.1.



ing non-market economy countries.2 While the EU grantsexporters from the �rst group of countries the right to claimmarket economy status (“MET”), exporters from the secondgroup of countries may not claim MET but retain the possibil-ity of obtaining individual treatment.

The export price is the “price actually paid or payable for theproduct when sold for export from the exporting country to theUnion.”3 However, where (1) there is no export price or (2) itappears that the export price is unreliable because of an as-sociation or a compensatory arrangement between the exporterand the importer or a third party, this price may also bedisregarded and instead a constructed export price may beused. Where a constructed export price is used, allowance ismade for all costs incurred between importation and resale,including all duties and taxes, and for a reasonable pro�t.

For purposes of ensuring a “fair comparison,” Regulation No.1225/2009 provides that due allowances shall be made for “dif-ferences in factors which are claimed, and demonstrated, to af-fect prices and price comparability.”4 In accordance with therules set forth in Article 2(10), adjustments may be made foressentially three types of di�erences between normal valueand export price: (1) di�erences in physical characteristics; (2)di�erences in import charges and indirect taxes; and (3) di�er-ences in selling expenses.

Dumping margins are established on the basis of a compari-son between the normal value and the export price, normallyboth calculated on a weighted average basis (“symmetricalmethod”) but, in some cases, a weighted average normal valuemay be compared to the export price determined on atransaction-by-transaction basis (“asymmetrical method”). Afurther possible “symmetrical” method of comparing both,normal value and export price, on a transaction-by-transactionbasis has rarely been considered.

Injury. Dumped imports may only be subject to protectivemeasures if they cause material injury to the Union producersof the like product. Article 3 of Regulation No. 1225/2009provides that the determination of material injury must bebased on an examination of the following: (a) the volume of

2E.g. Azerbaijan, Belarus, North Korea, Uzbekistan.3In practice, the Commission always nets back the export price to the

ex-factory level in the exporting country.4Article 2.10.


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dumped imports, in particular whether there has been a signif-icant increase in absolute terms or relative to EU productionor consumption; (b) the prices of dumped imports, especiallywhether there has been a signi�cant price undercutting incomparison to the price of a like product in the Union; and (c)the consequent impact on the Union industry.

A material injury determination does not necessarily requirea high penetration of the EU market by dumped imports: amarket share of a few percent may su�ce. The de minimisthreshold, i.e., a threshold below which it is presumed thatimports do not cause injury due to their small volume, namelya market share below 1% unless such countries collectively ac-count for 3% or more of Union consumption.5 Similarly, dump-ing margins are regarded as being de minimis when they arebelow 2% for individual exporters.6

Union Interest.7 Regulation No. 1225/2009 provides that anti-dumping duties may only be imposed where the “Union inter-est calls for intervention.”8 However, the Commission hasrarely invoked the Union interest test as a ground for notimposing anti-dumping measures. With only very few excep-tions, the Union authorities have tended to equate the interestsof the Union with those of the complainants. Starting with theintroduction of a speci�c provision dealing with “Union inter-est” in Regulation No. 1225/2009,9 however, there has been anew tendency on the part of the Commission to pay more at-tention to the concept of Union interest in anti-dumpingproceedings. The Union interest test quali�es as a test of eco-nomic nature. However, political considerations are not withinthe scope of the examination. Though, it cannot be seen as atrue cost-bene�t analysis as the various interests cannot beequated mathematically.

§ 42:4 Anti-dumping measures—Applicable proceduresAnti-dumping proceedings can be initiated either on the basis

5Article 5.7.6Article 9.3. Please also note that it is Commission practice that where

the weighted average dumping margin of all co-operating foreign exportersfrom a given country is de minimis and the level of co-operation is su�cientlyhigh, then the proceeding will be terminated against that country as a whole.

7With the adoption of Regulation No. 37/2014, (2014) O.J. L 18/1 theterm “Union interest” is used instead of “Community interest”.

8Article 21.9Article 21.



of a complaint submitted by a Union industry or on the Com-mission's own initiative. However, the Commission has onlyself-initiated anti-dumping proceedings under very speci�ccircumstances. A written complaint may be submitted by “anynatural or legal person, or any association not having legalpersonality, acting on behalf of the Union industry.”1 In orderto be considered, a complaint must have been made by or onbehalf of the Union industry. An investigation will not be initi-ated where the Union producers supporting the complaint ac-count for less than 25% of the total Union production.

An anti-dumping complaint must include evidence on thefollowing:

- The identity of the complainant and a description of thevolume and value of the Union production of the productconcerned;

- A complete description of the allegedly dumped productas well as the names of the country or countries of origin, allknown exporting producers in those countries, and any im-porters;

- The existence of dumping; and- Information on injury caused by the dumped imports to

the Union industry.After a complaint has been submitted, the Commission has

45 days to take a formal decision about whether to initiate aproceeding.2

The Anti-Dumping Proceeding. After having decided to initi-ate an anti-dumping proceeding, the Commission will �rst pub-lish a notice of initiation in the O�cial Journal of the EuropeanUnion.3 Normally, as soon as the notice of initiation ispublished, the Commission sends out questionnaires to allinterested parties (including the complainants, importers andexporters, their representative organizations and consumerorganizations) in order to gather such information which itdeems necessary for its dumping determination. At the sametime, the exporters receive a non-con�dential version of thecomplaint. The deadline for submitting questionnaire respon-ses is at least 30 days from the moment of receipt (seven ad-

[Section 42:4]1Article 5.1.2Article 5.9.3Article 5.9.


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ditional days being allowed for receipt) of the questionnaire bythe exporters, though extensions are often granted.4

The Commission must also determine whether the dumpedimports are causing injury to the Union industry and whetherit would be in the interest of the Union to impose measures.These issues are addressed in a separate document that gener-ally has to be submitted to the Commission at the same timeas the questionnaire response (commonly known as an “injurysubmission”).

As a next step in an investigation, the Commission o�cialscarry out veri�cation visits at the premises of importers andexporters of the product concerned.5 Such visits involve anumber of Commission o�cials (normally two) visiting thepremises of importers and exporters in order to reconcile theirquestionnaire responses with the company's data and account-ing records. Veri�cation visits typically take two or three days.

It should be noted that, during an investigation, interestedparties and the exporting country concerned may inspect allnon-con�dential information made available to the Commis-sion by any party to the extent that it is relevant to the defenseof their interests and used by the Commission in theinvestigation. On all aspects of the investigation, exportershave the right to present their views orally to Commissiono�cials. They may therefore request hearings with the Com-mission at any time.

Market Economy Status and Individual Treatment. It shouldbe noted that such claims are becoming increasingly importantgiven the amount of proceedings initiated against countriessuch as China and Vietnam. These claims are subject to thecompletion of separate claim forms and veri�cation visits(normally two days), though he Commission has sought tocombine MES claim form/Anti-Dumping response veri�cations.Such claims are subject to strict time-limits as the MES deter-mination ought to be made at an early stage of an investiga-tion (in principle within three months following the initiationof the investigation).

Institutional Decision-Making. The Commission is the Unioninstitution primarily responsible for administering EU anti-dumping law. With Regulation No. 37/2014, the Council ofMinisters lost its in�uence regarding anti-dumping law. Ac-

4Article 6.2.5Article 16.



cording to the Regulation No. 1225/2009, as amended, inconjunction with Article 5 of Regulation No. 182/2011, the Com-mission adopts the proposal directly if the Committee6 deliversa positive opinion. If the opinion delivered by the Committee isnegative, the proposal will not be adopted, but the Commissionmay submit an amended version of the draft implementing actif such is deemed to be necessary. In cases where no opinion isdelivered, the proposal shall also be adopted by theCommission. Under certain conditions, the Commission mayimpose provisional duties with a maximum period of validity ofnine months and accept undertakings o�ered by foreignexporters. Between 20 March 2004 and 20 February 2014, theCouncil of Ministers had sole competence, upon a Commissionproposal, to impose de�nitive anti-dumping duties as well as tode�nitively collect provisional duties. It was presumed that theCouncil adopted de�nitive anti-dumping measures unless asimple majority of Ministers rejected the proposal within onemonth after it was submitted by the Commission. Since 20February 2014, the Committee delivers opinions on the Com-mission's drafts, while the Commission adopts these proposals.However, both the European Parliament and the Council havea right of scrutiny of draft implementing acts. These modi�ca-tions of the voting procedures are signi�cant as they strengthenthe Commission proposal for the imposition of de�nitivemeasures insofar as a�rmative action (i.e., a vote against) isrequired from a quali�ed majority of the Member States in theCommittee to overturn a Commission proposal. And even insuch cases the Commission may submit an amended version ofthe draft to the Committee within two months or submit theoriginal draft to the appeal committee within one month. Onlyif the appeal committee delivers a negative opinion, the draftshall not be adopted; if it delivers a positive opinion or none,the draft shall be adopted.

Imposition of duties. There are basically four forms in whichanti-dumping duties are imposed: (1) an ad valorem duty; (2) avariable duty based on a minimum price; (3) a combination ofan ad valorem and a variable duty; and (4) a speci�c duty, i.e.a �xed amount per unit, weight or measure. The Union'spractice is to impose anti-dumping duties on an individual

6According to Article 15 the Commission shall be assisted by a Commit-tee. The Committee is composed of representatives of the Member States andchaired by a representative of the Commission. The chair does not take partin the committee vote (Article 3.2 of Regulation No. 182/2011).


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basis on named producers/exporters whenever the dumpingmargins vary. A residual anti-dumping duty (set at the level ofthe highest duty imposed in the case) applies to all exportersnot speci�cally named in the regulation imposing the anti-dumping duties. In the case of non-market economy countries,the Union's practice is to apply a single duty for all exports forthe country and to grant “individual treatment” only inexceptional cases.

Review Proceedings. Union law provides for basically threetypes of administrative reviews:

- Interim review7—may be initiated on the Commission'sinitiative or at the request of a Member State or interestedparty. Where an interested party submits such a request, itmust provide “su�cient evidence that the continued imposi-tion of the measure is no longer necessary to o�set dumpingand/or that the injury would be unlikely to continue or recurif the measure were removed or varied, or that the existingmeasure is not, or is no longer, su�cient to counteract thedumping which is causing injury.” De�nitive measures maybe repealed, amended, or con�rmed by virtue of an interimreview. Where such duties are amended or con�rmed, a new�ve-year period of validity will commence from the date ofconclusion of the interim review, provided that the reviewcovered aspects of both dumping and injury.

- Newcomer review8—may be initiated at the request of anexporter who did not export during the original investigationperiod, i.e., a newcomer. This was a much later addition toEU practice, introduced in 1989. It permits newcomers, whoare not related to a company which is subject to the originalinvestigation and who have started to export or have enteredinto an irrevocable contractual obligation to export a signi�-cant quantity to the Union, to request the establishment ofan individual dumping margin.9 Unlike other exporters, theydo not need to wait for one year following the conclusion ofthe original investigation in order to submit their request.The initiation of newcomer reviews has removed what hadbeen one of the most unfair features of EU anti-dumpinglaw. Previously, newcomers were automatically subject tothe highest duty applicable to the exporting country con-cerned, and they had no opportunity to o�er undertakingswhen they wished to start exporting to the Union.

7Article 11.3.8Article 11.4.9Article 11.4.



- “Sunset;” review—may be initiated where an interestedparty shows that the expiry of anti-dumping measures“would be likely to result in a continuation or recurrence ofdumping and injury.”10 Under EU law, anti-dumping mea-sures lapse after �ve years from the date on which theyentered into force or were last reviewed, unless the Commis-sion conducts a sunset review (also commonly known as an“expiry review”). As opposed to an interim review, a sunsetreview may only lead to the measures being repealed orcon�rmed.Refunds. In contrast to customs duties, anti-dumping duties

are refundable. Refund applications may be �led by importersand will be granted if it is shown that the dumping margin, onthe basis of which the anti-dumping duties were paid, has ei-ther been eliminated or reduced to a level which is below thelevel of the duty in force. The refund procedure and the above-described review procedures are separate procedures re�ectingdi�erent objectives. In fact, the refund procedure does notpermit a challenge of the validity of the regulation imposingthe duties and does not trigger the reassessment of the general�ndings made during the original investigation. In practice,refunds of anti-dumping duties have remained rare.

Determinations of the Commission are generally subject toreview by the Court of First Instance and the Court of Justiceof the EU.

By far the most common method of challenging such determi-nations is by a direct action for an act of the Union Institutionsto be annulled (for example, a Council Regulation imposing de-�nitive measures). These are brought at �rst instance beforethe Court of First Instance and can be appealed on a point oflaw before the Court of Justice. The admissibility of direct ac-tions challenging these determinations has been a central is-sue in a number of cases. Several general rules can be gleanedfrom this case law:

- complainants have standing to challenge the Commis-sion's refusal to initiate an anti-dumping proceeding11 aswell as the �nal outcome of the proceeding;12

- foreign exporters have standing to challenge the imposi-tion of provisional or de�nitive anti-dumping duties provided

10Article 11.2.11Case 191/82, Fediol v. Commission, (1983) ECR 2913.12Case 264/82, Timex v. Council and Commission, (1985) ECR 849.


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that they were “concerned by the preparatory investiga-tions”;13

- initially, “independent” importers (i.e., importers not re-lated to an exporter/producer in the exporting country subjectto the proceeding) could not directly challenge the impositionof anti-dumping duties. However, in a 1991 case, the Courtof Justice recognized that an independent importer hasstanding to bring a direct action against the imposition ofmeasures.14 As a consequence, so-called “related” importers,which provided data to the Commission in connection withconstructed export price determinations, also have stand-ing;15

- OEM (original equipment manufacturers) buyers maychallenge the imposition of duties on imports manufacturedby a particular producer when sales to the OEM buyer bythat producer were used in calculating the producer's dump-ing margin;16

- anti-dumping determinations may be challenged byMember States and Union institutions.17

In addition to the Commission and the Court, the individualMember States play a signi�cant role in anti-dumpingproceedings. Member States are closely associated with anti-dumping proceedings in the context of the Committee. In addi-tion to their participation in the Committee, the Member Statesensure the collection of anti-dumping duties through theircustoms authorities.

13Joined cases 239 & 275/82, Allied Corporation v. Commission, (1984)ECR 1005.

14Extramet Industrie SA v. Council of the European Communities (C358/89), 1991 WL 839206, [1993] 2 C.M.L.R. 619, 6-16-1992 Financial Times839206, [1991] E.C.R. I-2501, EU: Case C-358/89, Celex No. 689J358 (ECJ1991).

15Case 113/77, NTN Tokyo Bearing v. Council, (1979) ECR 1185, andJoined Cases 239 & 275/82, Allied Corporation v. Commission, (1984) ECR1005.

16Joined Cases 133 & 150/87, Nashua Corp v. Commission of theEuropean Communities (C133/87), 1990 WL 755572, [1990] 2 C.M.L.R. 6,[1990] E.C.R. I-719, EU: Case C-133/87, EU: Case C-150/87, Celex No.687J133 (ECJ 1990); Case 156/87, Gestetner v. Council and Commission,(1990) ECR 781.

17See, e.g., Case 129/86, Hellenic Republic v. Council and Commission,(1986) ECR 2071.



§ 42:5 Anti-dumping measures—Practical commentsA number of important features, described below, character-

ize Union anti-dumping law:

Procedural AspectsE Broad discretion—The EU Anti-dumping Regulation

leaves a wide margin of discretion to enforcement o�cials.The rules spelled out in the Regulation tend to be expressedin general terms which are susceptible to di�erentinterpretations.

E Limited review—The standard of review exercised bythe Court of First Instance and the Court of Justice tendsto be rather low: the Courts have essentially limitedthemselves to striking down manifest procedural ir-regularities committed by the Union authorities in theanti-dumping proceeding. They have largely refrained fromexercising any substantive review. This has translatedinto a review system where there are far less appeals thanunder the U.S. system.

E Centralized control—In contrast to the U.S. system,where the dumping and injury determinations are en-trusted to di�erent administrative bodies, these determina-tions are made by the same institutions in the EU system,i.e., the Commission and its assisting Committee.

E Undertakings—If the Commission is satis�ed that theinjurious e�ect of the dumping will be eliminated by theundertaking, it may accept an undertaking o�ered by theforeign exporter concerned. A signi�cant proportion ofUnion anti-dumping cases have been concluded by the ac-ceptance of price undertakings rather than by the imposi-tion of anti-dumping duties. With regard to foreign export-ers' candidate countries for accession, a clear preference isgiven towards granting undertakings by virtue of the Es-sen Declaration of the European Council.

E Time-limits—Until the adoption of Regulation No. 384/96, EC anti-dumping proceedings, unlike their U.S.counterparts, were not subject to binding time limits. Thishas changed: provisional anti-dumping measures mustnow be imposed within nine months of initiation, and thereis an overall time limit of 15 months for the completion ofthe entire investigation. EU anti-dumping law was furthermodi�ed to allow for de�nitive time limits in respect ofreview investigations. The adoption of time limits hascoincided with a substantial increase in the Commissionsta� in charge of trade policy measures.


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Substantive AspectsE Preference for constructed value—Whenever normal

value cannot be stablished on the basis of domestic marketprices, the Union will tend to resort to constructed valueas the alternative basis for normal value. The use of third-country export prices is practically non-existent in Unionpractice.

E Calculations based on high pro�t margins—In itsconstructed value determination, the Union frequentlyuses high percentages in determining the addition for“administrative, selling and any other costs and forpro�ts.” In one case, the pro�t margins used in theconstructed value determination were as high as 47 to75%.

E Lesser duty rule—One area in which the Union anti-dumping system tends to be more liberal than the U.S.anti-dumping system concerns the determination of theduty level. The Union complies with the (non-binding) rec-ommendation in the WTO Anti-Dumping Agreement withrespect to the so-called “lesser duty” rule and, accordingly,limits the duty to the amount adequate to remove theinjury to the Union industry whenever this is less than thedumping margin.

E Treatment of non-market economy countries—The EUhas a closed list of non-market economy countries to whichnon-market economy treatment is systematically appliedin anti-dumping cases. The EU's practice of determiningnormal value for non-market economy countries on thebasis of prices or costs in an “analogue” market economycountry usually leads to very high dumping margins.

E Circumvention—The EU has introduced anti-circumvention rules in its Anti-Dumping Regulation whichare most broad in scope.1 In terms of assembly operations,the rules provide for clear numerical tests (60% of thevalue of parts unless there is 25% added value in manufac-turing) to determine whether an anti-dumping duty shouldbe extended to imports of parts of the �nished productconcerned (importing-country circumvention) or imports ofthe like product from a third country (third-countrycircumvention).2

Between 1970 and 1976, only 26 anti-dumping proceedings

[Section 42:5]1See the non-exhaustive de�nition provided in Article 13.1.2Article 13.2.



were initiated. However, since 1976, there has been a markedincrease in the initiation of anti-dumping proceedings. From2008 to the end of 2011, 65 anti-dumping proceedings were ini-tiated by the European Commission. In recent years, Chinahas proven to be the most prominent target.3 The number ofcases in which de�nitive duties have been imposed has alsogrown signi�cantly since they were �rst imposed in 1977. Themajority of cases are now concluded by means of de�nitiveduties.

§ 42:6 Countervailing measures (anti-subsidyproceedings)

Countervailing measures are administered by the EuropeanCommission Directorate-General for Trade and its assistingCommittee.

§ 42:7 Countervailing measures (anti-subsidyproceedings)—Relevant issues

Union authorities may impose a countervailing duty on anysubsidized product whose release into free circulation withinthe Union causes material injury. Anti-subsidy proceedings arecurrently governed by Regulation No. 597/2009.1 Except for thespeci�c provisions governing the identi�cation and quanti�ca-tion of the subsidy element, the rules governing anti-dumpingand anti-subsidy proceedings are essentially identical. Regula-tion No. 597/2009 implements into EU law the rules oncountervailing action laid down in the WTO Agreement onSubsidies and Countervailing Measures.

In accordance with Regulation No. 597/2009,2 a countervail-ing duty may be imposed in order to o�set “any subsidygranted, directly or indirectly, for the manufacture, production,export or transport of any product whose release for freecirculation in the Union causes injury.” The notion of “counter-vailable” subsidy covers both export and domestic subsidies.

Countervailable Subsidy. Before applying countervailing

3At the end of 2011 53 of the 117 anti-dumping measures in force af-fected China.

[Section 42:7]1(2009) O.J. L 188/93; as amended by Regulation No. 37/2014, (2014)

O.J. L 18/1.2Article 1.1.


42-16

measures, the Union authorities must establish severalelements.3 First, the Union must determine that a subsidyactually exists which implies that: (i) there is a �nancial con-tribution by a government in the country of origin or export or(ii) there is a form of income or price support and there is abene�t conferred thereby. Furthermore, the subsidy must befound to be countervailable, which will be the case where thesubsidy is: (i) an export subsidy or (ii) directed at speci�cindustries or sectors and not generally available.

Calculation of the Amount of the Subsidy. With respect tothe calculation of the amount of subsidy in countervailing dutyinvestigations, the Commission practice can be characterizedas follows:

E Grants: the subsidy's value is the amount of the grantcorrected for any di�erences between the point in time whenthe grant was received and the investigation period. Directtransfers of funds, tax bene�ts, refund of import duties uponexportation of �nished product, accelerated depreciation, andthe forgiveness of government-held debt are examples ofwhat has been treated as grants by the Commission in thepast.

E Loans: the amount of subsidy will be the di�erence be-tween the amount of interest that is actually paid and theamount of interest that would have been paid at marketinterest rates.

E Loan guarantees: these will only be regarded as asubsidy if the fee to obtain the guarantee program is not suf-�cient to enable the program to cover all its costs and toearn a reasonable pro�t margin. In cases where the recipientdoes not have to pay any fees, the amount of subsidy will bethe di�erence between the amount that the �rm pays on theguaranteed loan and the amount that it would have to payfor a comparable commercial loan in the absence of thegovernment guarantee.

E Provision of goods and services by the government: theamount of subsidy is the di�erence between the price actu-ally paid for the goods or services and the normal marketprice for these goods and services.

E Purchase of goods by the government: the assessment ofthe bene�t will depend on whether the goods are purchasedby private operators. If this is the case, the amount of thesubsidy is the extent to which the price paid by the govern-

3Articles 3 and 4.



ment exceeds the highest price o�ered for a comparablepurchase of the same goods by the private sector. If, however,the government has a monopoly of the goods in question,then the amount of the subsidy is the di�erence between theprice paid by the government for the goods and the adequateremuneration for the goods in question.

E Government provision of equity capital: this will only beregarded as conferring a bene�t if the investment decision isinconsistent with the usual investment practice of privateinvestors in the exporting country. Therefore, the criterion iswhether a private investor would have put money into theinvested company in the same situation in which the govern-ment provided equity.Injury and Union Interest. If the authorities establish the ex-

istence of a countervailable subsidy, they must consider twoother factors. First, they must determine whether the subsi-dized imports have caused material injury to the Unionindustry. Second, they must ascertain whether the “Unioninterest” requires protection against these imports.

§ 42:8 Countervailing measures (anti-subsidyproceedings)—Applicable procedures

As described below, the applicable procedural rules are verysimilar to the rules that apply for anti-dumping proceedings.

Initiation. An anti-subsidy proceeding may be initiated ei-ther on the basis of a complaint submitted by a Union industryor on the Commission's own initiative. A written complaintmay be submitted by “any natural or legal person, or any as-sociation not having legal personality, acting on behalf of theUnion industry.”1 In order to be considered, a complaint musthave been made by or on behalf of the Union industry. Aninvestigation will not be initiated where the Union producerssupporting the complaint account for less than 25% of the totalUnion production.

An anti-subsidy complaint must contain evidence on severalelements in order to be deemed su�cient for the initiation of aproceeding:

E The identity of the complainant and a description of thevolume and value of the Union production of the productconcerned;

[Section 42:8]1Article 10.1.


42-18

E A description of the allegedly subsidized product as wellas the name of the country or countries of origin, all knownexporting producers in those countries, and any importers;

E The existence of subsidization, amount and nature ofsubsidies; and

E Information on injury caused by the subsidized importsto the Union industry.Since anti-subsidy proceedings involve the policy of foreign

governments, Regulation No. 597/2009 also provides for aconsultation mechanism with the respective countries prior tothe initiation of a proceeding.2 Within the scope of this mecha-nism, the Commission will have to approach the relevantauthorities in order to arrive at a mutually agreed solution,which, however, is only rarely found.

After a complaint has been submitted, the Commission hasto decide within 45 days whether to initiate a proceeding.Furthermore, the Commission has to inform the Member Statesconcerning its analysis, generally within 21 days.

The Anti-Subsidy Proceeding. Anti-subsidy investigations es-sentially follow the same rules as investigations in anti-dumping proceedings, but must be concluded within a time-frame of 13 months (instead of 15 months as for anti-dumpinginvestigations).3 After having decided to initiate an anti-subsidy proceeding, the Commission will publish a notice ofinitiation in the O�cial Journal of the European Union. Whenthe notice of initiation is published, the Commission providesto all interested parties (including the complainants, thegovernment of the country concerned, importers and exporters,their representative organizations and consumer organiza-tions, and, where applicable, banks or other �nancial institu-tions) questionnaires in order to determine whether counter-vailable subsidization has taken place. At the same time, theexporters are entitled to receive a non-con�dential version ofthe complaint.

The Commission will furthermore determine whether thesubsidized imports are causing injury to the Union industryand whether it would be in the Union's interest n to imposemeasures. These issues may be addressed in a separate docu-ment that generally has to be submitted to the Union at thesame time as the questionnaire response (commonly known asan “injury submission”).

2Article 10.9.3Article 11.9.



The next step in an investigation consists of veri�cation visitsby the Commission o�cials. Such visits are normally carriedout after receipt of the questionnaire responses.

In addition, the Commission regularly sends requests for in-formation to the relevant authorities of foreign countries thatare involved in the proceeding. The Commission also usuallyvisits them in order to obtain further clari�cation.

It should further be noted that, during an investigation,interested parties and the exporting country concerned mayinspect all non-con�dential information made available to theCommission by any party to the extent that it is relevant tothe defense of their interests and used by the Commission inthe investigation. On all aspects of the investigation, exportershave the right to present their views orally to Commission of-�cials and may, therefore, request hearings with the Commis-sion at any time.

Institutional Decision-Making. Similar to their far-reachingresponsibilities under EU anti-dumping laws, the Commissionand its assisting Committee are also responsible for administer-ing EU anti-subsidy law. Under certain conditions, the Com-mission is empowered to impose provisional duties with amaximum period of validity of nine months, and to acceptundertakings o�ered by foreign exporters. In order to imposede�nitive duties, the Commission has to provide the Commit-tee with the proposal. Depending on the opinion of the Com-mittee, the Commission imposes the de�nitive duties (positiveopinion or none), modi�es the proposal or submits the proposalto the appeal committee (negative opinion).

Imposition of Duties. Relief from the injury sustained as aresult of subsidized imports entering the Union market cantake two forms. The Union authorities can impose countervail-ing duties or, alternatively, they can also accept undertakings.In accordance with Article 13(1) of Regulation No. 597/2009,two types of undertakings can be o�ered: (1) undertakingswhereby the country of origin and/or export agrees to eliminateor limit the subsidy or take other measures concerning its ef-fects; or (2) undertakings by which exporters revise their pricesor cease exports to the extent that the Commission is satis�edthat the amount of the subsidy, or the injurious e�ects thereof,are eliminated.

Review Proceedings. Union law provides for three main typesof administrative reviews in anti-subsidy cases:

E Interim review—may be launched on the initiative of the


42-20

Commission or at the request of a Member State or anyinterested party which submits “su�cient evidence substan-tiating the need for an interim review.” Reviews may focuson “whether the continued imposition of duties is necessaryto o�set subsidization, whether the injury would be likely tocontinue or recur if the duty were removed or varied, or both.”

E Newcomer review4—may be initiated at the request of anexporter who was not individually investigated “for reasonsother than a refusal to cooperate with the Commission.” Thiswill regularly be the case where a company did not exportduring the original investigation period and may, therefore,be regarded as a newcomer (although the provisions in theAnti-Subsidy Regulation are not as detailed as those in theAnti-Dumping Regulation, the conditions for newcomerreview ought to be the same in both cases).

E “Sunset” review—may be initiated where an interestedparty shows that the expiry of anti-subsidy measures “wouldbe likely to lead to a continuation or recurrence of subsidiza-tion and injury.”5 Under EU law, anti-dumping measureslapse after �ve years from the date on which they enteredinto force or were last reviewed, unless the Commissionconducts a sunset review.Refunds. Countervailing duties are refundable. Refund ap-

plications may be �led by importers and will be granted if it isshown that the amount of subsidization on the basis of whichduties were paid has been eliminated or reduced to a levelwhich is below the level of the duty in force. The refund proce-dure does not permit a challenge of the validity of the regula-tion imposing the duties and does not trigger the reassessmentof the general �ndings made during the original investigation.

Determinations of the Commission are generally subject toreview by the Court of First Instance and the Court of Justice.

§ 42:9 Countervailing measures (anti-subsidyproceedings)—Practical comments

It should be noted that only a relatively small number ofanti-subsidy proceedings have been initiated by the Union. Be-tween 1979 and 1998, less than 20 countervailing proceedingswere initiated. The targets were Brazil, Spain, Thailand,Argentina, and Turkey. De�nitive duties were imposed in the

4Article 20.5Article 18.1.



majority of cases. Although there has been a marked increaseof anti-subsidy proceedings in 1998 and 1999 (in total, 27 initia-tions), the Commission has rarely resorted to their use in thenew millennium. In fact, between 2000 and 2005, only 12 anti-subsidy proceedings were initiated. This reluctance regardinganti-subsidy proceedings persisted in recent years. Between2008 and 2011 only 15 proceedings were initiated. The mostfrequent target of EU anti-subsidy proceedings was India.

§ 42:10 Safeguard measures

Safeguard measures are administered by the European Com-mission Directorate-General for Trade and its assistingCommittee.

§ 42:11 Safeguard measures—Relevant issues

Union Institutions and Member State authorities have beenempowered to impose safeguard measures, also referred to as“protective measures,” under the applicable provisions of suc-cessive regulations which have been in e�ect since 1969.

Safeguard measures are governed by four Regulations.Regulation No. 625/20091 is applicable to trade with certain

third countries (essentially those classi�ed as non-marketeconomy countries) in respect of safeguard measures onproducts other than textile products.

Regulation No. 260/20092 is applicable to trade with all otherthird countries in respect of safeguard measures on productsother than textile products (commonly known as the “SafeguardRegulation”).

Regulation No. 517/943 applies to safeguard measures ontextile products for imports originating in third countries notcovered by bilateral agreements, protocols or other arrange-ments or by speci�c Union import rules.

[Section 42:11]1(2009) O.J. L 185/1; as amended by Regulation No. 37/2014, (2014)

O.J. L 18/1; Regulation No. 625/2009 is the codi�ed version of Regulation No.519/94, (1994) O.J. L 67/89.

2(2009) O.J. L 84/1; as amended by Regulation No. 37/2014, (2014) O.J.L 18/1; Regulation No. 260/2009 is the codi�ed version of Regulation No.3285/94, (1994) O.J. L 349/53.

3(1994) O.J. L 67/1, as last amended by Regulation No. 38/2014, (2014)O.J. L 18/52.


42-22

Regulation No. 3030/934 applies to safeguard measures ontextile products for imports originating in other third countriesnot governed by Regulation 517/94 above.

As Title I of Regulation 427/20035 expired on 11 December2013,6 the Regulation lost much of its relevance. Before, itprovided for a transitional product-speci�c mechanism forimports originating in the People's Republic of China whichhave been progressively remounted.

The adoption of safeguard measures is authorized underChapter V of Regulations Nos. 260/2009 and 625/2009, where aproduct is imported into the Union in such greatly increasedquantities and/or on such terms or conditions as to cause, orthreaten to cause, serious injury to Union producers of like ordirectly competing products. The respective provisions ofRegulations Nos. 260/2009 and 625/2009 constitute thetransposition in Union law of GATT Article XIX whichauthorizes any Contracting Party to adopt safeguard measureswith respect to any product that:

is being imported into the territory of that Contracting party insuch increased quantities and under such conditions as to causeor threaten serious injury to domestic producers in that territoryof like or directly competitive products.

Regulations Nos. 260/2009 and 625/2009 establish twoprerequisites for the imposition of safeguard measures. First,the imported product must cause “serious injury” or threatthereof to Union producers of like or directly competingproducts. This injury threshold is signi�cantly higher than the“material injury” required in anti-dumping and countervailingduty cases. Second, the adoption of safeguard measures mustbe called for by the “interests of the Union.”

The following constitutes a summary list of the major rulesthat apply to EU safeguard proceedings and re�ect the corre-sponding provisions under the WTO Agreement on Safeguards:

(1) Provisional safeguard measures may be imposed incritical circumstances where delay would cause damagewhich would be di�cult to repair and where there is clearevidence that increased imports have caused or are threaten-



6Article 24 Regulation No. 427/2003, (2003) O. J. L 65/1.



ing to cause serious injury. Their duration must not exceed200 days and they should take the form of tari� increases tobe promptly refunded if the subsequent investigation doesnot establish serious injury or threat of serious injury.

(2) Serious injury is de�ned as “a signi�cant overallimpairment in the position of a domestic industry” and“threat of serious injury” as “serious injury that is clearlyimminent.”

(3) If a quantitative restriction is imposed, such a mea-sure may not reduce the quantity of imports below the levelof a recent period which is the average of imports in the lastthree representative years for which statistics are available,unless clear justi�cation is given that a di�erent level is nec-essary to prevent or to remedy serious injury.

(4) As regards the duration of safeguard measures,safeguard measures may, in principle, not remain in forcefor a period exceeding four years, unless the measures wereextended after a further investigation. Safeguard measuresso extended may not be more restrictive than they were atthe end of the initial period. The period of application of asafeguard measure including any provisional measure, theperiod of initial application and any extension thereof, mustnot exceed eight years.

(5) When imposing safeguard measures, Members have torespect the principle of non-selectivity which stipulates thatsafeguard measures must be applied to a product beingimported irrespective of its source. However, this principledoes not prevent an importing country from allocating sharesin a quota agreement, if possible, with all other membershaving a substantial interest in supplying the productconcerned. An important exception to this principle, the so-called “quota modulation” exception, is allowed in caseswhere imports from certain members have increased indisproportionate percentage in relation to the total increaseof imports of the product concerned in the representativeperiod. This exception may not be invoked in the case ofthreat of serious injury, and the duration of such selectivemeasure is strictly limited to four years.

(6) Products originating in a developing country areexempt from safeguard measures as long as this country'sshare of imports of the product concerned in the importingMember State does not exceed 3% (unless several developingcountries with less than 3% import share collectively accountfor more than 9% of total imports of the product concerned).


42-24

Developing countries also bene�t from less stringent rules asregards the duration of safeguard measures which they mayapply to imports.It may be noted that special rules apply with respect to

imports of textiles and clothing. These product groups havelargely remained subject to import quotas that are contrary tothe basic principle that products imported into the EU shouldnot be subject to quantitative restrictions (unless safeguardmeasures are adopted). For imports of textiles and clothing, adistinction is made between the so-called conventional regimeestablishing rules that apply to countries with which the EUhas concluded an agreement or arrangement (such as the WTOAgreement) and the autonomous regime establishing rulesthat apply to countries with which the EU has not concludedany such agreement or arrangement.

Finally, reference should be made to the by now expiredtransitional product-speci�c safeguard mechanism in respect ofimports originating in the People's Republic of China, Regula-tion No. 427/2003. It provided that safeguard measures couldbe adopted where any speci�c imported Chinese product (a)caused or threatened to cause “market disruption,” or (b)caused or threatened to cause “signi�cant trade diversions”into the Union. Regarding Article 24 of the Regulation, Title Iof the Regulation expired on 11 December 2013.

§ 42:12 Safeguard measures—Applicable procedures

Initiation. In contrast to anti-dumping and anti-subsidyproceedings, the domestic industry is not authorized to lodge acomplaint with the Commission in order to initiate a safeguardproceeding. Rather, a domestic industry will have to channelits complaint through a Member State in which it is located.The opening of an investigation is announced by a notice of ini-tiation in the O�cial Journal of the European Union.

Investigation. The Commission has wide powers of investiga-tion and may seek all information it deems necessary on whichto base its determinations. It may also check information withimporters, traders, agents, producers, trade associations, andorganizations. The Commission is assisted in this task by sta�of the Member State on whose territory these checks are being



carried out, if this Member State so wishes.1 Interested partiesand the exporting country concerned may inspect all non-con�dential information made available to the Commission byany party to the extent that it is relevant to the defense oftheir interests.2 An application by an interested party to beheard by the Commission must be submitted within thetimeframe established in the notice of initiation and demon-strate that the interested party is likely to be a�ected by theoutcome of the investigation and that there are special reasonsto be heard orally.3

Imposition of Measures. Safeguard measures may be imposedby the Commission. Safeguard measures may basically takeany form, including tari� quotas, because the language of theregulations is su�ciently broad to cover any type of protectivemeasure.

Duration. This is limited to the timeframe necessary toprevent or remedy serious injury and to facilitate adjustmenton the part of Union producers. No safeguard measure mayremain in force longer than four years, including the durationof any provisional measures that have been adopted. Measurescan only be extended following an additional investigation un-dertaken by the Commission.4

Review. When the duration of a safeguard measure exceedsone year, the measure must be progressively liberalized at reg-ular intervals throughout the period of its application. If theduration exceeds three years, the Commission will have to as-sess the measures in force and consider whether their applica-tion is still necessary. It may be noted that individuals are notempowered to request a review under the applicable Unionlegislation. Only Member States may request reviews of exist-ing safeguard measures.

§ 42:13 Safeguard measures—Practical comments

Safeguard measures have been infrequently imposed by theUnion. Unlike anti-dumping measures, which have increasedsubstantially since the conclusion of the Uruguay Round,

[Section 42:12]1Article 6.2.2Article 6.4.3Article 6.5.4Article 20.1.


42-26

safeguards are rarely used by Union institutions. In recentyears there were no such proceedings imposed. The latestsafeguard proceedings such as, in 2002, the EU's adoption ofprovisional safeguard measures on steel products from theU.S. or even the threat of their use against textile productsfrom China, were extensively covered by the press. On initia-tion of Ireland and the United Kingdom, in 2005, de�nitivemeasures were imposed on farmed salmon,1 which mainly af-fected Norway, Chile, and the Faeroes.

§ 42:14 The Trade Barriers Regulation

The Trade Barriers Regulation is administered by theEuropean Commission Directorate-General for Trade and itsassisting Committee.

§ 42:15 The Trade Barriers Regulation—Relevantissues

The arsenal of EU trade protection laws was reinforced in1984 with the enactment of Regulation No. 2641/841 on thestrengthening of the common commercial policy in particularwith regard to protection against illicit commercial practices,commonly referred to as the “New Commercial PolicyInstrument.” Regulation No. 2641/84 was replaced with e�ectfrom 1 January 1995 by Regulation No. 3286/942 laying downUnion procedures in the �eld of the common commercial policyin order to ensure the exercise of the Union's rights underinternational trade rules, in particular those established underthe auspices of the World Trade Organization.

This Regulation, generally referred to as the “Trade BarriersRegulation”, establishes two procedures aimed at:

(1) responding to obstacles to trade that have an e�ect onthe market of the Union with a view to removing the injurytherefrom;

[Section 42:13]1Regulation No 206/2005, (2005) O.J. L 33/8.

[Section 42:15]1(1984) O.J. L 252/1.2(1994) O.J. L 349/1; as last amended by Regulation No 654/2014, (2014)

O.J. L 189/50.



(2) responding to obstacles to trade that have an e�ect onthe market of a third country with a view to removing theadverse trade e�ects resulting therefrom.3

The essential purpose of Regulation No. 3286/94 is to providea procedural mechanism for Union industry, Union enterprises,and Member States to air their grievances against obstacles totrade that result in either injury on the Union market or haveadverse trade e�ects on third country markets.4

It is important to note that Regulation No. 3286/94 does notapply in cases covered by other existing rules in the commoncommercial policy �eld,5 such as, for instance, the rules laiddown by Regulation No. 1225/2009 concerning dumping. Fromthe outset, the intention of the Union authorities in adoptingthis instrument has been to provide Union industry with aweapon against obstacles faced by Union �rms in non-membercountries: the scope of previously existing trade policy instru-ments was restricted to trade practices causing injury withinthe domestic Union market.

In view of the fact that the General Agreement on Trade inServices (GATS) and the Agreement on Trade-Related Intel-lectual Property Rights (TRIPS) also fall within the scope ofthe dispute settlement procedure, the Union found it necessaryto also include providers of services in the scope of RegulationNo. 3286/94.

§ 42:16 The Trade Barriers Regulation—Applicableprocedures

The Commission has the power to open and terminateproceedings as well as to initiate, conduct, and terminateformal international consultation, or dispute settlementprocedures. With the entry into force of amending RegulationNo. 37/2014, the Commission gained further competence whilethe Council lost such completely.

Initiation. Procedures may be initiated by the Commission atthe request of the Union industry, Union enterprises, orMember States. Where the Commission decides that an exami-nation procedure should be initiated, it will announce its initi-

3Article 1.4An example of illicit commercial practices of third countries challenged

under Regulation No 3286/94 is the Brazilian Government's imposition of animport ban on retreaded tires and the related �nancial penalties.

5Article 15.


42-28

ation in the O�cial Journal of the European Union and of-�cially notify the representatives of the country or countriesthat are subjected to the investigation.

Investigation. The Commission may seek all information itdeems necessary; it is authorized to carry out investigations inthe territory of third countries, and Member States are directedto supply to the Commission, upon request, all informationnecessary for the examination. As in other proceedings,interested parties have the right to be heard and may thereforerequest hearings. The complainants, the exporters and import-ers concerned and the representatives of the country orcountries concerned are entitled to inspect all informationmade available to the Commission if it is relevant to the protec-tion of their interests, non-con�dential and actually used bythe Commission in its examination procedure.

Relief. Regulation No. 3286/94 provides for the followingtypes of action:

(1) The initiation of international consultation or disputesettlement procedures (at the WTO);

(2) The acceptance of unilateral undertakings o�ered bythird countries;

(3) The conclusion of an agreement with third countries;and

(4) The adoption of commercial policy measures.Between 1996 and 2013, 24 investigations were initiated by

the Commission under Regulation 3286/94 with the most recur-ring target being the United States. Approximately half of thecases initiated under Regulation 3286/94 have been broughtbefore the WTO. However, many of them have not gone beyondthe stage of negotiations.

Further, it should be noted that in July 2014 Regulation No.654/20141 has come into e�ect. It establishes a procedure toexercise EU rights for the application and enforcement ofinternational trade rules. Particularly, the regulation allows totake measures following adjudication of trade disputes.

§ 42:17 Conclusion

Anti-dumping measures are the most frequently used instru-ment of trade protection. As a practical matter, anti-dumping

[Section 42:16]1(2014) O.J. L 189/50.



action is likely to constitute one of the most common obstaclesfaced by exporters of non-agricultural products to the Union.

The increased recourse to anti-dumping action made byEuropean industry in the last 30 years no doubt re�ects anincrease in the degree of international competition to whichthe European industry is exposed as a result of the increasedglobalization of business activities. Indeed, anti-dumping ac-tion tends to follow the leading bene�ciaries of globalization ata particular time. For example, Japan in the 80s was a pri-mary target of EU anti-dumping action, whereas currentlyChina undeniably has this status because in recent years ithas been and arguably still is the world's fastest growingeconomy.

There are a number of speci�c factors, however, that mayexplain why the demands for trade protection have tended to�nd their expression in an increasing number of anti-dumpingcomplaints. One of these factors is certainly the greater op-portunity for selectivity o�ered by anti-dumping measures.Unlike safeguard measures, which must—at least in theo-ry—be applied on a non-discriminatory basis, anti-dumping ac-tion can be taken against individual exporting countries. An-other factor explaining the success of anti-dumping proceedingsis the relative ease with which an anti-dumping complaint canbe drawn up and the relatively �exible standards applied bythe Commission to determine whether a complaint contains“su�cient evidence” of dumping and injury.

In striking contrast to anti-dumping proceedings, which arefrequently resorted to, anti-subsidy proceedings have beenrarely used until recently. While it is relatively easy to presentto the Commission allegations of dumping, which are oftenbased on largely unveri�ed information, it is much more dif-�cult to submit valid anti-subsidy complaints which aretargeted at practices of foreign governments: the Commissionwill accept to initiate a countervailing investigation only if it isfully satis�ed that the evidence produced in the complaints isbeyond doubt. Also, the quanti�cation of subsidies often leadsto disappointing results as far as margins are concerned.

Union industry has tended to make hardly any use ofsafeguard proceedings. One reason for this is that the require-ments for taking safeguard measures are rather burdensome:the measures must be taken on a non-discriminatory basis andthe injury threshold is signi�cantly higher than that applicablein anti-dumping or countervailing cases. Also, requests for


42-30

safeguard action must be presented by Member States: certainMember States, such as Germany, have systematically refusedto even consider this possibility. Another factor that mayexplain the relative lack of popularity of safeguard proceedingsis that in a number of cases, the Union industry has been ableto obtain restrictions on the volume of imports through othermeans, such as national or Union-wide quotas. In the past,some Member States have also shown willingness to take steps,in apparent violation of their obligations under the EU Treaty,to restrict imports from third countries. For instance, Francefor a long time used standards in order to limit the Japanesecar manufacturers' share in the French market to 3%. Simi-larly, the agreement under which Japanese car manufacturersundertook for some time to limit their share in the UK marketto 11% was not challenged by the Commission. To date, allnational direct and indirect import restrictions have beenremoved. The national VRAs (Voluntary Restraint Agreements)concerning car imports from Japan were replaced by a Union-wide VRA which was authorized on an exceptional basis until1999 pursuant to Article 11(2) of the WTO Agreement onSafeguards.

Despite the high expectations of some Member States aboutthe “Trade Barriers Regulation,” the cases brought underRegulation No. 3286/94, so far have been of relatively limitedsigni�cance.



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