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Europe To Improve Trade Defence Instruments

by Ulrika Lomas, Tax-News.com, Brussels

15 April 2013


The European Commission has tabled proposals to improve the working of the European Union's (EU's) trade defense operations by offering greater duty rate predictability to importers and tightening anti-dumping rules.

According to the Commission, anti-dumping and anti-subsidy duties are often the only way for the EU to shield its producing industries from the impact of unfair trade practices by overseas companies. The trade defense system has however remained largely unchanged since 1995. At the end of 2012, the EU had 102 anti-dumping and 10 anti-subsidy measures in force. The Commission's proposals come after an eighteen-month "reflection" period, which included a public consultation on the issues EU companies deal with when facing unfair practices.

The legislative portion of the Commission's reform package contains four main provisions. The Commission will in future inform businesses of any provisional anti-dumping or anti-subsidy measures two weeks before the duties are imposed. This is designed to improve predictability. Importers will also be offered a reimbursement of duties collected during an expiry review, to shield against the possibility of the review concluding that there is no need to maintain the trade defense measures in place after five years.

Higher duties will be imposed on imports from countries that use unfair subsidies and create structural distortions in their raw material markets. In doing this, the EU would deviate from its general "lesser duty" rule, which keeps the additional tariff within the limit of what is considered strictly necessary to prevent an injury for an EU industry. Finally, the Commission will be able to initiate investigations ex-officio, without an official request from industry, when a threat of retaliation is deemed to exist.

Additional non-legislative proposals will facilitate cooperation with firms and trade associations involved in investigations, by extending certain deadlines during this process. They will also allow ex-officio anti-circumvention investigations, with the aim of ensuring faster action against the illegal evasion of measures, and improve the Commission's monitoring of trade flows.

EU Trade Commissioner Karel De Gucht said of the proposals: "This is a balanced package with real improvements for all stakeholders affected by trade defense duties - producers, importers and users. We want to equip EU businesses better to tackle unfair trade practices abroad, while not negatively affecting EU consumers or companies that rely on imports."

A three month consultation will now be held, after which the Commission will analyze submissions and adopt a final version of the plans. The legislative changes must be approved by the Council and the European Parliament. The Commission does not expect them to become law before next year.

TAGS: compliance | tax | business | European Commission | law | anti-dumping | import duty | tax reform | trade association | trade | European Union (EU) | Europe

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