Commission Implementing Regulation (EU) 2018/756
of 23 May 2018
making imports of biodiesel originating in Argentina subject to registration
THE EUROPEAN COMMISSION,
Having regard to the Treaty on the Functioning of the European Union,
After informing the Member States,
Whereas:
The product subject to registration (‘the product concerned’) is fatty-acid mono-alkyl esters and/or paraffinic gasoils obtained from synthesis and/or hydro-treatment, of non-fossil origin, in pure form or as included in a blend, currently falling within CN codes ex 1516 20 98 (TARIC codes 1516 20 98 21, 1516 20 98 29 and 1516 20 98 30), ex 1518 00 91 (TARIC codes 1518 00 91 21, 1518 00 91 29 and 1518 00 91 30), ex 1518 00 95 (TARIC code 1518 00 95 10), ex 1518 00 99 (TARIC codes 1518 00 99 21, 1518 00 99 29 and 1518 00 99 30), ex 2710 19 43 (TARIC codes 2710 19 43 21, 2710 19 43 29 and 2710 19 43 30), ex 2710 19 46 (TARIC codes 2710 19 46 21, 2710 19 46 29 and 2710 19 46 30), ex 2710 19 47 (TARIC codes 2710 19 47 21, 2710 19 47 29 and 2710 19 47 30), 2710 20 11, 2710 20 15, 2710 20 17, ex 3824 99 92 (TARIC codes 3824 99 92 10, 3824 99 92 12 and 3824 99 92 20), 3826 00 10 and ex 3826 00 90 (TARIC codes 3826 00 90 11, 3826 00 90 19 and 3826 00 90 30) and originating in Argentina. These CN and TARIC codes are given for information only.
The complainant first requested the Commission to register imports of the product concerned in the complaint. Then on 21 February 2018, the complainant submitted a registration request pursuant to Article 24(5) of Regulation (EU) 2016/1037 of the European Parliament and of the Council (‘the basic Regulation’). The complainant subsequently provided additional comments and updated information, inter alia, in submissions dated 16 March 2018 and 27 March 2018, respectively. The complainant requested that imports of the product concerned be made subject to registration so that measures may subsequently be applied against those imports from the date of such registration, provided all conditions set out in the basic Regulation are met.
According to Article 24(5) of the basic Regulation, the Commission may direct the customs authorities to take the appropriate steps to register imports, so that measures may subsequently be applied against those imports from the date of such registration, provided all conditions set out in the basic Regulation are met. Imports may be made subject to registration following a request from the Union industry, which contains sufficient evidence to justify such action.
According to the complainant, registration is justified as there is sufficient evidence of an actual and significant risk of severe injury being caused to the Union biodiesel industry by massive imports of subsidised biodiesel in a short period of time, in particular as of 2018 (namely after the period of investigation, ‘post-IP’). The complainant further claims that there exists sufficient evidence of subsidised imports of biodiesel from Argentina, of critical circumstances resulting from such subsidised imports and of the beginning of the materialisation of injury due to the subsidised imports.
The Commission examined the request also in the light of Article 16(4) of the basic Regulation, which sets out the conditions for collecting duties on registered imports. The Commission's examination also took into account comments submitted by Camara Argentina de Biocombustibiles (‘CARBIO’) on 21 March 2018 and the Government of Argentina on 3 April 2018, which argued, inter alia, that the complainant's request for registration does not meet the conditions established in Articles 16(4) and 24(5) of the basic Regulation.
As explained in recitals (8) to (16), the Commission took all submissions into account and considered whether there is sufficient evidence that there will be critical circumstances where, for the product concerned, injury which is difficult to repair will be caused by massive imports in a relatively short period of a product benefitting from countervailable subsidies and whether it may be deemed necessary to assess countervailing duties retroactively on those imports in order to preclude the recurrence of such injury.
- (i)
government provision of goods or services for less than adequate remuneration, such as the provision of soybeans;
- (ii)
government purchase of goods for more than adequate remuneration and/or income or price support, such as the government mandated purchase of biodiesel (Biodiesel Supply Agreement);
- (iii)
direct transfer of funds, such as provision of loans and export financing on preferential terms, including the preferential lending by the National Bank of Argentina (Banco de la Nación Argentina); and
- (iv)
government revenue forgone or not collected, such as accelerated depreciation for biodiesel producers under the Biofuels Law of 2006, exemption and deferral of the minimum presumed income tax for biodiesel producers under the Biofuels Law of 2006, and several provincial tax exemptions.
The evidence of subsidisation was made available in the open version of the complaint and was further analysed in the memorandum on sufficiency of evidence.
It is alleged that the measures described in recital (8) amount to subsidies because they involve a financial contribution from the government of Argentina or other regional governments (including public bodies) and confer a benefit to the exporting producers of the product concerned. The measures are alleged to be limited to certain enterprises or industry or group of enterprises and are therefore specific and countervailable.
Therefore, the available evidence at this stage tends to show that the exports of the product concerned are benefiting from countervailable subsidies.
The request for registration, together with the information submitted subsequently, provides sufficient evidence of critical circumstances, whereby towards the end of the investigation period (‘IP’) (1 January 2017 to 31 December 2017) and in the first quarter (January 2018 – March 2018) of the post-IP period, injury, which will be difficult to repair, started to materialise.
In addition, the evidence submitted by the complainant in its request for registration shows that the deteriorating market situation is resulting in planned reduction of production and/or recourse to partial activity in at least three companies in the Union. This will lead to a significant reduction in Union production and sales and will have a negative impact on employment in the Union industry.
Given the data set out in recitals (14) and (15) and the considerations laid down in recital (17), the Commission deemed it necessary to prepare the potential retroactive imposition of measures by imposing registration in order to preclude the recurrence of such injury. Indeed, the post-IP market conditions tend to confirm that the situation of the domestic industry is deteriorating due to the significant increase of subsidised imports already in the first quarter of 2018. Thus, should the Commission conclude that the domestic industry suffers material injury at the end of the current investigation, the collection of countervailing duties on registered imports may be deemed appropriate to preclude the recurrence of such injury.
All interested parties are invited to make their views known in writing and to provide supporting evidence. Furthermore, the Commission may hear interested parties, provided that they make a request in writing and show that there are particular reasons why they should be heard.
Pursuant to Article 24(5) of the basic Regulation imports of the product concerned should be made subject to registration for the purpose of ensuring that, should the investigation result in findings leading to the imposition of countervailing duties, those duties can, if the necessary conditions are fulfilled, be levied retroactively on the registered imports in accordance with the applicable legal provisions.
Any future liability would emanate from the findings of the investigation.
At this stage of the investigation it is not yet possible to accurately estimate the amount of subsidisation. The allegation in the complaint requesting the initiation of an anti-subsidy investigation referred to the United States of America imposing definitive duties against subsidised imports of biodiesel from Argentina ranging from 71,45 % to 72,28 % on 9 November 2017. Based on information received from Union producers in the context of the investigation, the preliminary injury elimination level is 29,5 %. With the information available at this stage, the amount of possible future liability is set at the injury elimination level, namely 29,5 % ad valorem on the CIF import value of the product concerned.
HAS ADOPTED THIS REGULATION: