EC, January 20, 1997, No 88-97

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 384-96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (1), as amended by Regulation (EC) No 2331-96 (2),

Having regard to Council Regulation (EC) No 71-97 of 14 January 1997 extending the definitive anti-dumping duty imposed by Regulation (EEC) No 2474-93 on bicycles originating in the People's Republic of China to imports of certain bicycle parts from the People's Republic of China, and levying the extended duty on such imports registered under Regulation (EC) No 703-96 (3), and in particular Article 3 thereof,

After consulting the Advisory Committee,

Whereas:

(1) By Regulation (EC) No 71-97 (hereinafter 'the Reference Regulation`), the Council extended the anti-dumping duty imposed by Regulation (EEC) No 2474-93 (4) on imports of bicycles originating in the People's Republic of China to imports of certain bicycle parts from that country.

(2) The Reference Regulation sets out certain principles and guidelines governing the exemption of certain imports of bicycle parts from the extended duty.

(3) This Regulation should provide clear guidance to interested parties as to how the exemption system will be operated. It should, in particular, make clear provision as to how certain imports of essential bicycle parts may be exempted from the extended duty, and how authorization for such exemptions may be obtained.

(4) In this regard, the exemption system should envisage three cases in which imports of essential bicycle parts may conditionally or definitively be exempted from the payment of the extended duty.

First, direct imports of essential bicycle parts should be exempted from the extended duty where they are declared for free circulation by, or on behalf of, an assembler which has been exempted by the Commission.

Secondly, imports of essential bicycle parts should also be exempted from the extended duty where they are admitted under end-use control and where they are finally delivered to an exempted assembler, or are declared for free circulation or delivered to a party in limited quantities. It is appropriate in this respect to apply the existing mechanism of end-use control provided for in Council Regulation (EEC) No 2913-92 (5) and in Commission Regulation (EEC) No 2454-93 (6), as last amended by Regulation (EC) No 12-97 (7) mutatis mutandis. Where less than 300 units per month of any type of essential bicycle parts are declared for free circulation by, or delivered to, a party, such imports of essential bicycles parts will be of limited economic significance, and will be unlikely to undermine the effect of the duty imposed by Regulation (EEC) No 2474-93. They should, therefore, be presumed not to constitute circumvention.

Thirdly, imports of essential bicycle parts should conditionally be exempted from the extended duty by suspension of the payment of the extended duty, where they are declared for free circulation by, or on behalf of, an assembler which is under examination by the Commission.

(5) The Commission is charged with examining whether a party's assembly operations fall within the scope of Article 13 (2) of Regulation (EC) No 384-96 (hereinafter the 'basic Regulation`), and will exempt the party if justified. Only parties carrying out assembly operations may submit a request for exemption by the Commission.

Any Commission decision to exempt a party carrying out assembly operations constitutes an authorization within the meaning of Article 13 (4) of the basic Regulation.

In this respect it is appropriate that, where imports of essential bicycle parts have been exempted from the extended duty by reference to an exempted assembler or to the de minimis clause, the exemption conditions should provide for the Commission to ensure that the parts are actually used in the exempted party's assembly operations and that the de minimis threshold is not abused.

(6) The competent authorities of the Member States must check that those parts are either declared for free circulation by an exempted assembler or, through the operation of the end-use system, that they are finally delivered to an exempted assembler or fall under the de minimis clause.

(7) As regards assemblers' requests for exemption by the Commission, clear provisions should be laid down regarding the admissibility of requests, the conduct of examinations, the taking of decisions, review and revocation of exemptions.

In the interest of sound administration, requests should provide prima facie evidence of the absence of circumvention, and should be duly substantiated if they are to be considered admissible by the Commission. In order to ensure an expeditious decision on the admissibility of duly substantiated requests, a period should be prescribed within which such decisions should normally be taken.

A period should be prescribed within which the Commission should normally decide on the merits of a request.

As regards review, the Commission may re-examine exempted assemblers to verify that the conditions of exemption are still fulfilled, in particular by random checks.

(8) Other parties which cannot be exempted by the Commission because they do not carry out assembly operations may nonetheless also benefit from the exemption system where they declare the goods under end-use control and deliver essential bicycle parts to exempted parties or to other holders of an end-use authorization, or under the de minimis clause.

It is, however, necessary for the customers of those parties, if they are assemblers but are not yet exempted and if they use parts in quantities above the de minimis threshold, to obtain an exemption from the Commission.

(9) In the case of parties which have submitted duly substantiated requests which are pending, the examination should be initiated immediately.

It is necessary to ensure that retroactive exemption is possible for parties with pending requests. Therefore, the payment of the extended duty should be suspended not only in respect of imports declared for free circulation after entry into force of the Reference Regulation but also in respect of imports subject to the duty arising under Article 2 (3) of the Reference Regulation.

(10) Parties carrying out assembly operations which have already been found not to circumvent the anti-dumping duty imposed by Regulation (EEC) No 2474-93 should be exempted by this Regulation.

It is necessary to ensure that these parties are exempted retroactively.

(11) Annexed to this Regulation is a list of parties in respect of which an examination is initiated and a list of parties which are exempted from the extended duty. Changes to the lists and consolidated updated lists will be published, from time to time and as necessary, in the C Series of the Official Journal of the European Communities.

(12) Finally, the general rules applying to anti-dumping investigations, regarding in particular the conduct of investigations, verification visits, non-cooperation, confidentiality, and the procedural rights of the parties concerned, should apply to the procedures laid down in this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Definitions

For the purpose of this Regulation:

- 'bicycle parts` means bicycle parts and accessories falling within CN codes 8714 91 10 to 8714 99 90,

- 'extended duty` means the anti-dumping duty imposed by Regulation (EEC) No 2474-93, as extended by Article 2 of Regulation (EC) No 71-97 (hereinafter 'the Reference Regulation`),

- 'essential bicycle parts` means the bicycle parts defined in Article 1 of the Reference Regulation,

- 'assembly operation` means an operation in which essential bicycle parts are brought in for the assembly or completion of bicycles,

- 'request` means any step taken by a party carrying out assembly operations with a view to obtaining authorization for exemption from the Commission pursuant to Article 3,

- 'party under examination` means a party carrying out assembly operations in respect of which an examination has been initiated pursuant to Article 4 (5) or Article 11 (1), and

- 'exempted party` means any party whose assembly operations have been found to fall outside the scope of Article 13 (2) of Regulation (EC) No 384-96 and which has been exempted pursuant to Article 7 or 12 of this Regulation.

Article 2

Exemption of imports from the extended duty

1. Imports of essential bicycle parts shall be exempt from the extended duty where:

- they are declared for free circulation by, or on behalf of, an exempted party, or

- they are declared for free circulation under the provisions on end-use control in Article 14.

2. Imports of essential bicycle parts shall be provisionally exempted from the payment of the extended duty where they are declared for free circulation by, or on behalf of, a party under examination.

Article 3

Request for exemption

1. Requests shall be made in writing in one of the official languages of the Community and must be signed by a person authorized to represent the applicant. The request must be sent to the following address:

European Commission,

Directorate-General for External Economic Relations,

Unit I/C-3,

CORT 100 4-59,

Rue de la Loi/Weststraat 200,

B-1049 Brussels;

Fax No: (32-2) 295 65 05.

2. Upon receipt of a request, the Commission shall immediately inform the applicant and the Member States.

Article 4

Admissibility of requests

1. A request shall be admissible where:

(a) it contains evidence that the applicant is using essential bicycle parts for the production or assembly of bicycles in quantities above the threshold set out in Article 14 (c) or that he has entered into a irrevocable contractual obligation to do so;

(b) it provides prima facie evidence that the applicant's assembly operations fall outside the scope of Article 13 (2) of Regulation (EC) No 384-96; and

(c) the applicant has not, within the 12 months preceding the request, been refused authorization of exemption pursuant to Article 7 (3) or (4), or had an exemption revoked pursuant to Article 10.

2. A reasonable period may be prescribed for the submission of any additional information required for the determination of the admissibility of a request. Where such evidence is not forthcoming within the period specified, the request shall be considered inadmissible.

3. The admissibility of a request which is duly substantiated pursuant to paragraphs 1 and 2 shall normally be determined within 45 days of its receipt. The applicant shall first be given an opportunity to comment on the Commission's conclusions as to the admissibility of the request.

4. Where a request is held inadmissible, it shall, after consultation of the Advisory Committee, be rejected by a Decision.

5. Where a request is held admissible, an examination shall be initiated immediately and the applicant and the Member States shall be notified.

Article 5

Suspension of payment of the duties

1. As from the date of receipt of a request complying with the conditions set out in Article 3 (1) and pending a decision on its merits pursuant to Articles 6 and 7, payment of the customs debt in respect of the extended duty pursuant to Article 2 (1) of the Reference Regulation shall be suspended in respect of any imports of essential bicycle parts declared for free circulation by the party under examination.

2. The competent authorities of the Member States may make the suspension of payment of the extended duty subject to the provision of a security to guarantee payment of the extended duty in the event that the request is subsequently held inadmissible pursuant to Article 4 (4) or rejected pursuant to Article 7 (3) or (4).

Article 6

Examination of the request

1. In conducting its examination, the Commission may, where appropriate, request additional information from the applicant and/or carry out on-the-spot verifications. The examination will normally cover a period of not less than six months prior to the receipt of the request.

2. Any party under examination shall ensure that, at any time, essential bicycle parts which it declares for free circulation are either used in its assembly operations, destroyed, or re-exported. It shall keep records of the essential bicycle parts delivered to it - and of the use made of them. These records shall be retained for at least three years. The records and any necessary additional evidence and information shall be communicated to the Commission upon request.

3. The examination of the merits of a request shall normally be concluded within twelve months after notification pursuant to Article 4 (5).

4. Before a decision is adopted pursuant to Article 7, the applicant shall be informed of the Commission's conclusions on the merits of the request and shall be given an opportunity to comment thereon.

Article 7

Decision

1. Where the facts as finally ascertained show that the applicant's assembly operations do not fall within the scope of Article 13 (2) of Regulation (EC) No 384-96, the applicant's exemption from the extended duty shall be authorized, after consultation of the Advisory Committee.

2. The decision shall have retroactive effect as from the date of receipt of the request. The applicant's customs debt pursuant to Article 2 (1) of the Reference Regulation shall be considered void from that date.

3. Where the criteria for exemption are not fulfilled, the request shall, after consultation of the Advisory Committee, be rejected and the suspension of the payment of the extended duty referred to in Article 5 shall be lifted.

4. Any breach of obligations under Article 6 (2) or any false declaration relating to a decision may constitute a reason for rejecting the request.

Article 8

Obligations of exempted parties

1. An exempted party shall ensure that, at all times:

(a) its assembly operations remain outside the scope of Article 13 (2) of Regulation (EC) No 384-96;

(b) where it receives deliveries of essential bicycle parts which have been exempted from the extended duty pursuant to Article 2, those parts are either used in its assembly operations, destroyed, re-exported, or resold to another exempted party.

2. An exempted party shall keep records of the essential bicycle parts of which it receives deliveries and of the use made of them. It shall retain those records and appropriate supporting evidence for at least three years. Those records shall be made available to the Commission on request.

Article 9

Review

1. The Commission may on its own initiative review the situation of an exempted party to verify that its assembly operations remain outside the scope of Article 13 (2) of Regulation (EEC) No 384-96.

2. A review shall consist of an examination covering a period which may be shorter than six months.

Article 10

Revocation of an exemption

An exemption shall be revoked, after the exempted party has been given an opportunity to comment, and after consultation of the Advisory Committee:

- where a review has shown that the exempted party's assembly operations fall within the scope of Article 13 (2) of Regulation (EC) No 384-96,

- in the event of breach of the party's obligations pursuant to Article 8 (2), or

- in the event of lack of cooperation after the adoption of the exemption decision.

Article 11

Pending requests

1. The requests of the parties listed in Annex I are admissible and examinations pursuant to Article 6 are hereby initiated.

2. The date of receipt within the meaning of Article 5 (1) of the requests referred to in paragraph 1 of this Article shall be deemed to be the date of entry into force of this Regulation.

3. Pending a decision on the merits of the requests of the parties listed in Annex I, the payment of the customs debt incurred for the extended duty pursuant to Article 2 of the Reference Regulation shall be suspended with effect from the date of the entry into force of that Regulation.

4. Decisions pursuant to Article 7 (2) in respect of the parties listed in Annex I shall have retroactive effect as from 20 April 1996. The applicant's customs debts in respect of the extended duty shall therefore be considered void from that date.

Article 12

Parties exempted by this Regulation

The parties listed in Annex II are hereby exempted from the extended duty with effect form 20 April 1996.

Article 13

Procedural provisions

The relevant provisions of Regulation (EC) No 384-96 concerning:

- the conduct of investigations (Article 6 (2), (3), (4) and (5)),

- verification visits (Article 16),

- non-cooperation (Article 18), and

- confidentiality (Article 19),

shall apply to examinations pursuant to this Regulation.

Article 14

Exemption subject to end-use control

Where imports of essential bicycle parts are declared for free circulation by a person other than an exempted party, as from the date of entry into force of the Reference Regulation, they shall be exempted from the application of the extended duty if declared in accordance with the Taric structure in Annex III and subject to the conditions laid down in Article 82 of Regulation (EEC) No 2913-92 and Articles 291 to 304 of Regulation (EEC) No 2454-93, which shall be applicable mutatis mutandis, where:

(a) the essential bicycle parts are delivered to a party exempted pursuant to Articles 7 or 12; or

(b) the essential bicycle parts are delivered to another holder of an authorization within the meaning of Article 291 of Regulation (EEC) No 2454-93; or

(c) on a monthly basis, less than 300 units per type of essential bicycle parts are either declared for free circulation by a party or are delivered to it. The number of parts declared by or delivered to any party shall be calculated by reference to the number of parts declared by or delivered to all parties which are associated with or have compensatory arrangements with that party.

Article 15

Special provision for parties receiving de minimis deliveries

1. The Commission or the competent authorities of the Member States may decide, on their own initiative, to examine parties which declare essential bicycle parts for free circulation or receive deliveries pursuant to Article 14 (c).

2. Where the parties referred to in paragraph 1 are found to have declared for free circulation or received deliveries of quantities of essential bicycle parts above the threshold set out in Article 14 (c), or where they fail to co-operate with the examination, they shall no longer be presumed to fall outside the scope of Article 13 (2) of Regulation (EC) No 384-96. After the party concerned has been given an opportunity to comment, those findings shall be notified to the competent authorities of the Member States.

3. Where the parties referred to in paragraph 1 abused Article 14 (c) in order to circumvent the extended duty, the extended duty not levied on any essential bicycle parts declared for free circulation by those parties or delivered to them after the entry into force of this Regulation may be reclaimed.

Article 16

Exchange of information

1. The particulars of parties in respect of which an examination has been initiated pursuant to Article 4 or in respect of which a decision has been taken pursuant to Articles 7 or 10 shall be communicated to the competent authorities of the Member States.

2. A notice will be published, from time to time as appropriate, containing updated lists of parties under examination and exempted parties, which will also be communicated forthwith to any interested party upon demand.

3. The competent authorities of the Member States shall communicate to the Commission within one month after the end of each quarter summary information with regard to exempted parties in accordance with the format set out in Annex IV.

Article 17

Provisions on customs duties

Unless otherwise specified, the provisions concerning customs duties shall apply.

Article 18

Entry into force

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Communities.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

(1) OJ No L 56, 6. 3. 1996, p. 1.

(2) OJ No L 317, 6. 12. 1996, p. 1.

(3) OJ No L 16, 18. 1. 1997, p. 55.

(4) OJ No L 228, 9. 9. 1993, p. 1.

(5) OJ No L 302, 19. 10. 1992, p. 1.

(6) OJ No L 253, 11. 10. 1993, p. 1.

(7) OJ No L 9, 13. 1. 1997, p. 1.

ANNEX I

PARTIES UNDER EXAMINATION

(Taric additional code: 8962)

>TABLE>

ANNEX II

EXEMPTED PARTIES

(Taric additional code: 8963)

>TABLE>

ANNEX III

TARIC STRUCTURE

>TABLE>

ANNEX IV

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Information format

END-USE CONTROL CONCERNING BICYCLE PARTS FROM CHINA

IMPLEMENTATION OF REGULATION (EC) No 88-97 (1)

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