10 Sept 2019
New EU Regulation Prevents Imposition of Multiple Trade Remedy Tariffs on Certain Steel Products
On 3 September 2019, a new Regulation was published whereby the European Commission has suspended EU anti-dumping and anti-subsidy measures on imports of certain steel products from several countries, including mainland China. This has been done so as to prevent steel traders from having to pay double tariffs combined with the safeguard measures. The new Regulation follows the European Commission’s proposal of 26 April 2019.
As is well known by now, on 1 February 2019 the European Commission imposed safeguard measures on imports of certain steel products by means of Commission Implementing Regulation 2019/159 (Regulation 2019/159, “the Definitive Regulation”). The measures under the Definitive Regulation are intended to last for three years. They take the form of tariff-rate quotas applicable for specified periods, by which an above-quota tariff duty of 25% is payable when imports exceed a specified threshold corresponding to the average level of imports in the years 2015 to 2017.
In addition, certain anti-dumping and anti-subsidy measures are also presently in place for some of the 26 product categories to which the safeguard measures apply. Following the imposition of the safeguard measures, both the safeguard duties and the anti-dumping and/or countervailing duties have become payable in respect of the same goods, upon exhaustion of the quotas established under the safeguard measures.
Considering the potential onerous effects of the combination of these measures on certain producers exporting to the EU, the Commission had published a notice on 26 April 2019 (2019/C 146/06). In this notice, it proposed to amend certain existing anti-dumping and anti-subsidy measures as a way of preventing companies paying double remedies in case of an overlap between anti-dumping and/or anti-subsidy measures and steel safeguard duties.
On 2 September 2019, the Commission’s proposal was adopted by means of an implementing Regulation which is applicable EU-wide, and based on sufficient grounds which consider that the concurrent application of anti-dumping and/or anti-subsidy measures and safeguard measures would indeed have an effect greater than that intended or desirable in terms of the EU’s trade defence policy and objectives.
According to the implementing Regulation published on 3 September 2019 (Regulation 2019/1382, “the new Regulation”), in the event that the relevant tariff-rate quota is exhausted and the tariff amount payable exceeds the equivalent ad valorem level of the relevant anti-dumping/anti-subsidy duties, only the above-quota tariff duty shall be collected. Thus, if the above-quota tariff duty represents a higher percentage than the equivalent rate of the anti-dumping and/or countervailing duty applicable to the same product categories, only the above-quota safeguard duty shall be collected. In such a situation, the collection of the applicable anti-dumping and/or anti-subsidy measure shall be suspended for the period of application of the above-quota tariff duty.
In a scenario where the opposite occurs, i.e., where the rate of the above-quota tariff duty is lower than the equivalent rate of the antidumping and/or countervailing duty applicable to the same product categories, the full above-quota tariff duty shall be due, topped-up by the difference between the above-quota tariff duty and the level of the higher of the anti-dumping/anti-subsidy duty in place. In other words, where the above-quota tariff duty represents a lower percentage compared to the equivalent rate of the anti-dumping and/or countervailing duty rate applicable to the same product categories, the above-quota tariff duty should be paid alongside the topped-up difference between the above-quota tariff duty and the equivalent rate of the applicable anti-dumping and/or countervailing duty rate.
Hong Kong Traders should be informed that the Regulation also indicates that the applicable anti-dumping/countervailing duties shall immediately begin to be collected as usual once the above-quota safeguard tariff duty ceases to apply.
Annex 1.A of the new Regulation sets out a list of the product categories subject to definitive safeguard measures. Annex 1.B then lists the Regulations imposing anti-dumping and anti-subsidy measures on the products that are subject to the safeguard measure. Annex II thereafter lists the rates of anti-dumping and/or countervailing duties that are applicable as long as a safeguard duty is due on the same product.