COMMISSION IMPLEMENTING REGULATION (EU) 2020/199

14.2.2020 | EN | Official Journal of the European Union | L 42/10 ---|---|---|--- * * * COMMISSION IMPLEMENTING REGULATION (EU) 2020/199 of 13 February 2020 making imports of continuous filament glass fibre products originating in Egypt subject to registration THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, 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 (1) ( the ‘basic Regulation’) and in particular Article 24(5a) thereof, After informing the Member States, Whereas: (1) | On 7 June 2019, the European Commission (‘the Commission’) announced, by a notice published in the Official Journal of the European Union (2) (‘the notice of initiation’), the initiation of an anti-subsidy proceeding with regard to imports into the Union of continuous filament glass fibre products originating in Egypt. ---|--- (2) | This was following a complaint lodged on 24 April 2019 by the European Glass fibre Producers Association ‘APFE’ (‘the complainant’) on behalf of producers representing more than 25 % of the total Union production of continuous filament glass fibre products. ---|--- (3) | This anti-subsidy investigation follows the initiation of a separate investigation by the Commission to examine the existence of injurious dumping with respect to the same product but originating in Egypt and Bahrain, which was initiated on 3 May 2019 (3). ---|--- (4) | The investigation of subsidisation and injury covers the period from 1 April 2018 to 31 March 2019 (‘the investigation period’). The examination of trends relevant for the assessment of injury covers the period from 1 January 2016 to the end of the investigation period (‘the period considered’). ---|--- 1\. Product subject to registration (5) | The product subject to registration (‘the product concerned’) is chopped glass fibre strands, of a length of not more than 50 mm (‘chopped strands’); glass fibre rovings, excluding glass fibre rovings which are impregnated and coated and have a loss on ignition of more than 3 % (as determined by the ISO Standard 1887) (‘rovings’); and mats made of glass fibre filaments excluding mats of glass wool (‘mats’) originating in Egypt, currently falling under CN codes 7019 11 00, ex 7019 12 00, 7019 31 00 (TARIC codes 7019120022, 7019120025, 7019120026 and 7019120039).The product concerned is known as ‘glass fibre reinforcements’ or ‘GFR’. ---|--- 2\. Grounds for registration (6) | According to Article 24(5a) of the basic Regulation, the Commission shall direct the customs authorities to take the appropriate steps to register imports during the period of pre-disclosure under Article 29a, so that measures may subsequently be applied against those imports from the date of such registration, unless it has sufficient evidence that the requirements either under Article 16(4)(c) or Article 16(4)(d) of the basic Regulation are not met. ---|--- (7) | The Commission therefore analysed the requirements of Article 16(4)(c) and (d) of the basic Regulation as to whether imports should be registered during the period of pre-disclosure. ---|--- (8) | These Articles require the Commission to examine: | — | whether there are critical circumstances where, for the subsidised product in question, injury which is difficult to repair is caused by massive imports in a relatively short period of a product benefitting from countervailable subsidies, and ---|--- — | whether it is deemed necessary to assess countervailing duties retroactively on those imports in order to preclude the recurrence of such injury. ---|--- 2.1. Product benefiting from countervailable subsidies (9) | As regards subsidisation, the Commission has at its disposal sufficient evidence at this stage that exports of the product concerned from Egypt are being subsidised, and that the exporting producer Jushi in Egypt benefited from these subsidies during the investigation period. ---|--- (10) | The subsidy practices alleged in the complaint include: | — | Direct transfer of funds, ---|--- — | Government revenue foregone or not collected, and ---|--- — | Government provision of goods or services for less than adequate remuneration. ---|--- (11) | As set out in the Notice of Initiation, the complainant alleged that those measures are subsidies since they involve a financial contribution from the Government of Egypt (including public bodies) and confer a benefit to the exporting producer of the product concerned. They are alleged to be limited to certain enterprises or industries or group of enterprises and/or contingent upon export performance and are therefore specific and countervailable. ---|--- (12) | The evidence of subsidisation was made available in the open version of the complaint and was further analysed in the memorandum on sufficiency of evidence. ---|--- (13) | The Commission at this stage therefore has sufficient evidence which tends to indicate that exports of GFR from Egypt are benefiting from countervailable subsidies. ---|--- 2.2. Massive imports of GFR from Egypt in a relatively short period (14) | The extraction from the Surveillance 2 database, together with the 2015 data from the complaint, shows massive imports of Egyptian GFR from 2015 to 2018. Imports have increased in volume in this period by 200 % and their market share has increased from 4,6 % in 2015 to 12,8 % in 2018. ---|--- (15) | Having regard to more recent data, the graph below shows the quantity of GFR imported from Egypt per quarter from January 2016 to September 2019. This covers the period considered (Q1 2016 to Q1 2019) and two quarters after the investigation period (‘IP’) (Q2 and Q3 2019). ---|--- (16) | For the period considered there is a significant increase of 130 %, from just over 14 000 tonnes in Q1 2016 to 32 000 tonnes in Q1 2019, being an increase in market share from 5 % to 14 %: ---|--- (17) | Since the separate anti-dumping investigation mentioned in recital 3 concerns import of the same product from, among others, Egypt, such initiation may have already affected trade flows for the assessment at issue. Thus, the date of initiation of that case, namely 3 May 2019, will be considered as the beginning of the post-initiation period to assess the evolution of imports also in this investigation. ---|--- (18) | An analysis of imports from Egypt during the post-initiation period does not suggest that massive imports have ceased, but rather that they remain at the same or a higher level: | Import quantities from Egypt (tonnes) --- | Monthly average (IP) | Post-initiation total (*1) | Same period in the IP total (*2) | Monthly average (post-initiation) | Difference Same period IP – post-initiation (total) | Difference Total IP – post-initiation (monthly average) Egypt | 12 014 | 91 319 | 92 286 | 13 045 | -1 % | +9 % Source: Surveillance 2 database (19) | Indeed, having regard to the investigation period and afterwards, the average volume of monthly imports between May and November 2019 is 9 % greater than that during the investigation period. ---|--- (20) | The total quantity of GFR originating in Egypt imported into the Union between May and November 2019 is almost at the same level than the total quantity imported during the same period in 2018. ---|--- (21) | Based on the analysis above, the Commission concluded that massive imports from Egypt have taken place. These quantities, together with the increase in market share throughout the period considered, amount to massive imports in a relatively short period within the meaning of Article 16(4) of the basic Regulation. ---|--- (22) | The increase in imports in fact coincided with the initiation of the anti-dumping investigation on the same product concerned, following a declining and a more stable import trend in the previous two quarters. This may be due to the possibility of the product concerned being subject to trade defence measures. ---|--- 2.3. Critical circumstances and injury difficult to repair (23) | The complaint contains sufficient evidence that the Union industry is suffering material injury caused by the imports from Egypt which is difficult to repair, and that these constitute critical circumstances. ---|--- (24) | Imports from Jushi Egypt to the EU have increased substantially since 2015, when the Commission considered that the Union industry was not injured (4). ---|--- (25) | The Commission has sufficient evidence that the exporting producers’ subsidisation is causing material injury to the Union industry, which is difficult to repair. This evidence consists of detailed data, contained in the complaint, concerning the key injury factors set out in Article 8(4) of the basic Regulation. ---|--- (26) | Evidence of such circumstances includes the rapid deterioration of the situation of the Union industry characterised by a decline in profit from a peak of 13 % in 2016 down to 4,6 % in 2018 as well as a loss of market share of 11 percentage points during the same period (2016-2018). ---|--- (27) | This deterioration coincided with the increased volume of imports from Egypt shown in the graph above and a decrease of their average import price as described below. ---|--- (28) | The Commission found that the average unit price of GFR from Egypt has dropped from 1 007 EUR/tonne in Q1 2016 to 904 EUR/tonne in the IP. After the initiation of the anti-dumping investigation on the same product from Egypt, between May 2019 and November 2019, the unit price continued to fall, to an average of 884 EUR/tonne. ---|--- (29) | By 2018 imports from Egypt were significantly undercutting Union industry’s prices by 16 % according to the complaint. ---|--- (30) | In addition, the Commission assessed whether the injury suffered was difficult to repair. Considering that some users of GFR use lengthy processes to certify their suppliers, once they switch to a Chinese or Egyptian supplier it is unlikely for them to switch back to a Union producer in the short or even medium term. Such threat of permanent loss of market share or reduced income constitutes an injury which is difficult to repair. ---|--- (31) | The Commission therefore concluded that the evidence at hand shows that the Union industry is suffering injury that is difficult to repair and that circumstances are critical. ---|--- 2.4. Preclusion of recurrence of injury (32) | Finally, given the considerations laid down in Section 2.3 above, the Commission deemed it necessary to prepare for the potential retroactive imposition of measures by imposing registration, in order to preclude the recurrence of such injury. Indeed, the post-IP market conditions tend to confirm that the situation of the domestic industry is deteriorating due to the significant increase of subsidised imports at low prices. ---|--- 2.5. Conclusion (33) | In light of the above, the Commission found that there is no conclusive evidence showing that the registration of imports of the product concerned during the period of the pre-disclosure is not merited in this case. ---|--- (34) | Thus in accordance with Article 24(5a) of the basic Regulation, the Commission will register imports of the product concerned during the period of pre-disclosure. ---|--- 3\. Future liability for the registered imports (35) | Under Article 24(5a) of the basic Regulation, imports of the product concerned must be made subject to registration during the period of pre-disclosure pursuant Article 29a of the basic Regulation. ---|--- (36) | Any future liability would emanate from the definitive findings of this anti-subsidy investigation. At this stage of the investigation it is not yet possible to estimate the amount of subsidisation in Egypt. The complaint does not provide for an accurate estimation of the amount of subsidisation, which should normally be used as the basis to establish the countervailing duties. The complaint only contains an estimation of the injury elimination level for 2018 of 22 %. ---|--- (37) | In accordance with Article 15(1), fourth paragraph of the basic Regulation this estimated amount of liability would only be relevant if a duty based on the amount of countervailable subsidies would be higher and the Commission clearly concludes that it is not in the Union’s interest to impose this higher duty. ---|--- 4\. Processing of personal data (38) | Any personal data collected in the context of this registration will be treated in accordance with Regulation (EU) 2018/1725 of the European Parliament and of the Council (5), ---|--- HAS ADOPTED THIS REGULATION: Article 1 1\. The customs authorities are hereby directed, under Article 24(5a) of Regulation (EU) 2016/1037, to take the appropriate steps to register imports into the Union of chopped glass fibre strands, of a length of not more than 50 mm; glass fibre rovings, excluding glass fibre rovings which are impregnated and coated and have a loss on ignition of more than 3 % (as determined by the ISO Standard 1887); and mats made of glass fibre filaments excluding mats of glass wool, currently falling under CN codes 7019 11 00, ex 7019 12 00, 7019 31 00 (TARIC codes 7019120022, 7019120025, 7019120026 and 7019120039) and originating in Egypt. 2\. Registration shall expire three weeks following the date of entry into force of this Regulation. Article 2 This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 13 February 2020. For the Commission The President Ursula VON DER LEYEN * * * (1) OJ L 176, 30.6.2016, p. 55. (2) OJ C 192, 7.6.2019, p. 30. (3) Notice of initiation of an anti-dumping proceeding concerning imports of continuous filament glass fibre products originating in Bahrain and Egypt (OJ C 151, 3.5.2019, p. 4). (*1) May to November 2019. (*2) May to November 2018. (4) Commission Implementing Regulation (EU) 2017/724 of 24 April 2017 imposing a definitive anti-dumping duty on imports of certain continuous filament glass fibre products originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (OJ L 107, 25.4.2017, p. 4). (5) Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39). * * *