On 5 June 2013, anti-dumping duties imposed on imports of bicycles from China were extended to imports from Sri Lanka, Indonesia, Malaysia, and Tunisia via Regulation 501/2018. This decision was taken following an investigation to determine whether the anti-dumping measures imposed on China were being circumvented. On 19 September 2019, the Court of Justice ruled that the reasoning used by the Commission in that investigation with respect to Sri Lanka was flawed. It, therefore, annulled Regulation 501/2018 insofar as it applied to imports from Sri Lanka.
The Commission has now decided to re-open the anti-circumvention investigation to correct the illegality found by the Court. The investigation will conclude by 3 September 2020 at the latest. During the course of the investigation imports of bicycles from Sri Lanka will be subject to registration by national customs authorities. Should circumvention be proven, anti-dumping duties of 48.5% will be imposed retroactively as of 3 December 2019.
Special note: The Court of Justice judgment, and therefore the new investigation, does not affect the anti-dumping duties in place against imports from City Cycles Industries (Sri Lanka); these remain in force.
In the investigation that extended the measures to Sri Lanka, the Commission established there was a change in the pattern of trade and re-consignment practices, but received poor cooperation by Sri Lankan producers. It decided that exports to the EU of exporting producers could be accounted for in the post-shipment practices and concluded that the lack of cooperation by producer inferred circumvention was taking place.
The Court noted that the circumvention of anti-dumping measures is established when four conditions are met:
• there must be a change in the pattern of trade between the third country (or companies in that country) and the EU;
• this change must result from practices, transactions or operations for which there is no sufficient reasoning or economic justification other than the imposition of the duty;
• there must be evidence that the EU industry is being harmed or that the remedial effects of the anti-dumping duty are being undermined;
• there must be evidence of dumping.
Importantly, the burden of proof lies with the Commission and it is established jurisprudence that although the Commission may use “facts available” to reach a conclusion when cooperation from producers is insufficient (or non-existent), that lack of cooperation cannot be used as proof of circumvention. It, therefore, ruled that the Commission’s findings did not support a conclusion of Sri Lankan-wide transshipment practices.
Contact: Stuart Newman, Senior Legal Advisor – Trade & Customs