Anti-dumping investigations are an important tool of the European Commission (“Commission”) to ensure fair competition in the European single market. If certain products are dumped, the Commission may impose anti-dumping duties on imports of these products. Dumping occurs when products are exported to Europe at artificially low prices. This harms European industries, as it prevents them from competing fairly with non-European industries.
Anti-dumping investigations are hot. (Economic) tensions between the EU and other trading blocs are increasing: by the end of 2023, as many as 120 definitive anti-dumping duties were in force in the EU. The number of new investigations launched by the Commission in 2023 doubled compared to 2022. The vast majority of those investigations focus on imports from China, followed at a great distance by Russia, Korea, Indonesia and Thailand, among other countries, as well as Turkey and the US, for example.
In principle, an investigation may relate to any product, from relatively simple agricultural raw materials to complex high-tech products. For example, the Commission recently announced high import duties on electrical vehicles exported from China to Europe. Definitive individual additional duties (on top of the existing tariff) were set for imports of electric vehicles from three Chinese producers (BYD 17.0%, Geely 18.8% and SAIC 35.3%). Other Chinese producers that cooperated with the investigation are subject to a 20.7% duty. Chinese producers that did not cooperate are subject to a 35.3% duty. In response to these European import levies, the Chinese government announced it was launching an investigation into possible pork dumping from the EU.
In this blog, we address five frequently asked questions about anti-dumping investigations by the Commission.
- What is an anti-dumping investigation?
The main purpose of an anti-dumping investigation is to determine whether dumping is taking place. The rules on these investigations are set out in Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union. The Commission usually refers to this as the Basic Regulation. This may result in duties being imposed if dumping is found to be taking place that is causing loss, and if that is in the interest of the Union.
Dumping is deemed to be taking place if the price of a product when exported to the Union (the ‘export price’) is below a comparable price established in the ordinary course of trade in the domestic market of the exporting producer (the ‘normal value’). In many cases, however, the Commission assumes distortion in the home market in China, meaning that using domestic prices and costs in that country does not provide an accurate picture. In that case, the normal value is calculated using production and sales costs in an appropriate, representative country.
In the event of dumping that harms the European industry, the Commission may impose remedies. In doing so, the Commission must demonstrate that EU companies that produce the same product have suffered material harm and that the anti-dumping measure is not against the interest of the Union. The harm that an anti-dumping measure causes to the EU economy as a whole may not exceed the relief that it provides to the European industry that is harmed by the imports.
- What is the timeframe of an anti-dumping investigation?
Anti-dumping procedures are usually initiated by the Commission following a complaint from the European industry, but may also be initiated on the Commission’s own initiative. A complaint must contain sufficient evidence of the dumping, the harm and the alleged causal link between them. An investigation also requires the complaint to be actively supported by EU producers whose collective output exceeds 50% of the total of the similar product in the EU. The Commission must launch an anti-dumping investigation if it receives a valid complaint with sufficient evidence that a product is being dumped on the European market and that this dumping is harming the European industry.
If the evidence is sufficient, the Commission launches an anti-dumping investigation within 45 days after the complaint is filed. Interested parties that wish to comment on the complaint should generally do so within 30 days after the start of the investigation. The Commission provides questionnaires in which exporters from the countries concerned, EU producers and EU importers and EU end users may submit information. These are strict deadlines and it is crucial that an interested party act as soon as possible if it wishes to be involved in the investigation, especially since gathering the relevant facts from the business and drafting a response can be time-consuming.
Within seven months after the start of the investigation, the Commission publishes its preliminary findings. At that point, it may decide to impose provisional anti-dumping measures (in the form of anti-dumping duties) or to terminate the investigation (if there is insufficient evidence of dumping). Interested parties are then given the opportunity to comment on the provisional findings. The Commission subsequently draws up its final conclusions, on which the interested parties may comment. The exporters investigated may also offer remedies at this final stage of the investigation. The anti-dumping investigation ends with the publication of the definitive anti-dumping measures.
Regardless of whether or not definitive measures are adopted, an anti-dumping investigation must normally be completed within one year and in no event later than 14 months after the start of the investigation. Anti-dumping investigations are therefore characterised by a relatively short but intensive process. The Commission has broad discretionary powers when conducting anti-dumping investigations. These powers arise from the complexity of the economic and political situations that the Commission must investigate.
- What measures can the Commission take in an anti-dumping investigation?
An anti-dumping investigation by the Commission may have four possible final outcomes:
- the complaint is withdrawn, allowing the procedure to be terminated (unless that is not in the interest of the Union);
- the Commission decides that anti-dumping duties are unnecessary, in which case the investigation or the procedure is terminated;
- the Commission finds that the harm is negligible, in which case the Commission must conclude that no anti-dumping duties are required; or
- the Commission imposes a definitive anti-dumping duty.
Past investigations have shown that in 74% of cases an investigation results in measures being taken. An anti-dumping duty imposed may not exceed the dumping margin established. The definitive duty may either be an absolute amount per unit (e.g. per tonne) or a percentage on top of the export price. These are duties, not punitive sanctions (such as an administrative fine in competition law).
The amount of the duty imposed depends on the severity of the dumping, the degree of harm caused to the European industry, and the importance of the imported products to the EU as such. The definitive duty imposed therefore varies greatly from one investigation to another. Also, the amount of the definitive duty imposed may vary from one exporter to another. This is because the dumping margin may also vary from one exporter to another. The degree of cooperation by the exporter in question furthermore plays a role in this regard (see question 4 below).
Provisional duties may be imposed for a period of six months and extended for a further three months, or they may be imposed immediately for a period of nine months. A definitive measure remains in force for as long as necessary to counteract injurious dumping. In principle, however, a definitive measure expires after five years unless a review indicates that expiry of the measure is likely to lead to continuation or recurrence of dumping and harm. Commission decisions to impose anti-dumping measures may be challenged before the Court of Justice of the European Union.
- What role do companies play in an anti-dumping investigation?
An anti-dumping investigation generally distinguishes the following groups of companies: European producers, non-European companies exporting to the EU, European importers, and European end-users of both imported and EU-produced goods. An anti-dumping investigation may have potentially far-reaching consequences for companies in each of these groups, but to a greatly varying extent.
European producers may file a complaint if they believe that non-European producers exporting to the EU are dumping products. It is important in this regard that there is sufficient support in the European industry for such a complaint. The European industry must then provide sufficient evidence to demonstrate that there is evidence of dumping.
Non-European companies exporting goods to the EU may be affected by their products being subject to import measures (duties). It is crucial that they cooperate in the investigation and provide accurate information in a timely manner, because duties may vary from one exporter to another. If an exporter cooperates during the Commission’s investigation, that may result in lower duties being imposed, or even no duties at all. In an investigation into iron fasteners, for instance, a much lower duty was imposed on exporters that cooperated in the investigation than on those that did not. In an investigation into candles, no duties at all were imposed on some cooperating exporters, but they were imposed on exporters that failed to cooperate.
Independent importers based in the EU are also usually regarded as interested parties in an antidumping investigation. They may comment on, for instance, the product scope of the investigation, the availability or unavailability of alternative sources of supply, and the impact of import duties on customers. In several cases, the Commission regarded the lack of response from importers as a sign that anti-dumping measures were not against the interest of importers. In an investigation into certain fibreglass fabrics, for instance, the Commission concluded that there were no reasons not to impose measures, because only one small independent importer cooperated with the investigation. In an investigation into fatty acid imports, the Commission assumed that importers did not believe that anti-dumping duties impacted their business, because they did not cooperate in the investigation.
Finally, end users of imported products – such as consumer organisations – may also be interested parties in the anti-dumping investigation. In practice, they may in particular contribute to answering the question whether the imposition of duties is in the Union’s interest. An example is the Farmed Atlantic salmon case, in which the BEUC (the European Consumer Organisation), among others, successfully opposed duties.
Companies may perceive anti-dumping investigations as very intensive. The timelines to respond, for instance, to the Commission’s questionnaire or documents from other stakeholders in the investigation are relatively short. The investigation of possible dumping has a large quantitative element, and collecting and interpreting the necessary information can be quite time-consuming. The information provided must be correct and must be supported by both internal and external sources to have the maximum result.
- What are examples of anti-dumping investigations?
At the end of 2023, 120 definitive anti-dumping measures were in force in the EU. Some 65 anti-dumping (and anti-subsidy) investigations are currently pending in various sectors. In a large number of cases, an anti-dumping investigation may relate to raw materials or semi-finished products. For instance, there are currently 16 ongoing investigations into various chemical products and 12 investigations into various products from the steel and metal industries. China is by far the country most targeted by anti-dumping investigations: out of 65 ongoing investigations, currently only 13 investigations do not involve China as an exporting country.
An example of an anti-dumping investigation in which China was not the country under investigation was that into exports of flat steel products from Brazil, Iran, Russia and Ukraine. That investigation was launched in 2016. Definitive duties on these steel products were eventually imposed in 2017. The Commission ultimately imposed definitive duties ranging from EUR 17.5 per tonne to EUR 96.5 per tonne (depending on the exporter in question). In 2023, an investigation into the extension of the Ukrainian measure was terminated, as were the duties imposed. The reason was that the impact of these steel imports allegedly longer harmed the European industry, given the state of Ukraine’s steel industry. However, the Commission did decide that the duties would remain in force for the other countries (Brazil, Iran and Russia) to which the original measure applied.
An investigation relevant to the Dutch industry is that into Chinese electric bicycle exports to the EU. The Commission launched an investigation in 2017. That investigation established dumping of Chinese electric bicycles in the European market, resulting in definitive duties being imposed in 2019, ranging from 10.3% to 70.1% (depending on the exporter in question). The Commission is currently investigating whether the measure should be extended.
Maverick Advocaten specialises in economic regulation and is experienced in assisting companies during anti-dumping investigations. If you would like to know how an anti-dumping investigation proceeds in practice or have questions about what role your company can play in such an investigation, please feel free to contact Cyriel Ruers or Bas van Os.
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