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EU Commission adopting trade measures to limit importation of optical fibre cables from China

The European Commission received in August 2020 a complaint of asserted dumped imports from China, was lodged by Europacable on behalf of producers representing more than 25% of the total European production of optical fibre cable, which cables are mainly used for the construction of the new generation of telecom infrastructures in various EU member-States.

According to such complaint, there was evidence of market distortions in the Chinese optical fibre cable industry, and it was alleged in particular that optical fibre cables from China are being heavily dumped in the EU, with an average dumping margin of 123%, thus seriously affecting the EU industry in that sector.

Europacable in fact argued that, in an industry that is highly investment-driven, the current level of profitability cannot enable EU producers to sufficiently invest in 5G technologies and maintain a competitive position on the EU market, because of the substantially increasing cheap imports from China.

The complaint also argued that the imposition of anti-dumping measures on imports of optical fibre cables from China would be in the overall EU interest, supporting restoration of fair competition on the EU market, as it would enable the EU industry to recover from the material injury caused by the dumped imports originating in China and it would also eliminate the immediate threat of further material injury, without affecting the interest of the industrial users.

After having examined such complaint from Europacable, the Commission published in September 2020 the Notice of Initiation 2020/C 316/09 of anti-dumping proceedings.

While the Commission was gathering facts and comments from both Chinese producers and importers into the EU of optical fibre cables as well as from other EU interested parties, in December 2020 Europacable submitted to the Commission a registration request, i.e., that imports of such products be made subject to registration so that measures may subsequently be applied from the date of registration, subject to final findings of actual dumping in such case.

The Commission, at the end of March 2021, consequently decided that there was sufficient evidence that imports of said products from China are being dumped, notwithstanding various objections and remarks raised by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), remarking in particular that the legal requirements for registration were not met lacking any European importers’ awareness of dumping, and missing evidence of any recent substantial rise in imports of optical fibre cables from China. A major remark was in fact that any increase in imports which would not be caused by the awareness of potential measures challenging dumping, should not be held as fulfilling the legal requirements for the imposition of registration.

Contrary to CCCME’s remarks, though, the Commission held that since the Notice of Initiation of the dumping proceedings had been published in the Official Journal of the European Union, the importers were aware, or should have been aware, of the alleged dumping practices, the extent thereof and the alleged injury at that moment.

The Commission further held that the imports had indeed significantly (by 27,5%) increased after the initiation of its investigation, and that it had been very likely caused by conscious decisions of importers in view of the possibility of duties going to be imposed on those products from China.

According to applicable EU rules on registration, obligation to such regard should be imposed for the purpose of ensuring that, should the investigation eventually result in findings leading to the imposition of anti-dumping duties, those duties could, if the necessary conditions are fulfilled, be levied retroactively on the registered imports, provided that any such future liability would emanate exclusively from the findings of the anti-dumping investigation.

The amount of possible future liability, as pointed out by the Commission in its March decision imposing registration, can be estimated at the level of the injury elimination as evidenced in Europacable’s complaint, that is, up to 43 % ad valorem on the CIF import value of the imported Chinese products.

After having consequently decided to impose registration of imports from China of optical fibre cables, the Commission further decided on 23 April 2021, on the basis of the EU Regulation 2016/1036 on protection against dumped imports from countries which are not members of the European Union, and with regard to the anti-dumping investigation concerning imports of such products, that the Commission for the time being does not intend to also impose any provisional measures to counter dumping, while the investigation goes on and is continued.

The final decision on whether anti-dumping measures are imposed or not, is scheduled to be issued by the Commission at the end of November 2021.

Prof. Avv. Salvatore Vitale

* This article is not a legal advice, but it has an informative function only. For personalized legal advice, contact us by e-mail or by phone +39 06 916505710.© Dong & Partners International Law Firm, All rights reserved

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