European Fastener Distributor
Association
How the EU Investigates
Circumvention of Anti-dumping Measures
What is circumvention?
Circumvention is the practice of evading anti-dumping or anti-subsidy measures on imports
from a particular country or countries.
Circumvention may take a number of forms but for fasteners the most prevalent is transshipment via a third country so that the products imported to the EU appear as though
originating from that third country.
In terms of carbon steel fasteners from P. R. China two practices are common:

Fasteners are shipped to a third country, sometimes consigned and coded as other
product. On arrival in that country they are transferred to an export container with
fraudulent documentation indicating that they originated from that country, and reexported to the EU.

A factory legitimately manufacturing the product in the third country imports fasteners.
These fasteners are then re-exported as having been manufactured by that factory.
Both of these practices contravene EU anti-dumping and anti-subsidy regulations.
How is a circumvention investigation initiated?
There are a number of ways:

EU manufacturers can lodge a complaint with the European Commission.

Any EU member state can request that the European Commission carries out an
investigation.

The European Commission can initiate an investigation on its own initiative, based on
changes in the pattern of trade for the product or as a result of OLAF investigations of
specific exporters in a third country.
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What happens in a circumvention investigation?
The European Commission publishes a regulation in the EU Official Journal announcing the
investigation and explaining the basis for its decision to initiate it.
The investigation applies to ALL exports of the product (as defined in the original antidumping regulation) from the country or countries under investigation.
EU national customs authorities are required to register (record) details of the imports of the
products from the country under investigation from the date the investigation is initiated.
If the investigation determines that circumvention has occurred this information is used to
apply retrospective anti-dumping duties on all imports from that country from the date the
investigation started, except for those from exporters that succeed in obtaining an EU
exemption from the measures.
Exporters from the country are invited to apply for an exemption. They normally only have 37
days to make this application. In doing so, they agree to open their businesses to a very
detailed and thorough investigation by EU officials.
The investigation has nine months to decide whether circumvention has occurred and to
determine whether individual exporters are entitled to be exempted from the measures.
If circumvention is confirmed by the investigation, a new regulation is issued applying the
maximum anti-dumping duty defined by the original anti-dumping measure (for carbon steel
fasteners from PRC this is 74.1%) to ALL imports from the country investigated except from
exporters that are granted an exemption.
Retrospective anti-dumping duties are collected on all imports from the date the investigation
was initiated except those from exporters that successfully obtained an exemption.
Important things to recognise
Each exporter has to prove its innocence to obtain an exemption.
Exemption investigations are individual to each company. There is no sampling or grouping.
The exporter has to submit to a detailed, rigorous and intrusive investigation by EU officials.
Failure to provide all information required by EU investigators, which includes detailed
accounting and transaction information, will be deemed as non-cooperation and an exemption
will NOT be issued.
It is not enough to be innocent of circumvention but the exporter has to prove beyond all
doubt it is innocent.
In previous fastener-related circumvention investigations (e.g. on Malaysia) only a small
number of exporters succeed in obtaining an exemption.
The authorities in the country under investigation have no influence over the EU decision.
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What it means to importers
The launch of a circumvention investigation creates massive uncertainty for EU importers.
The Malaysian experience demonstrated that once a circumvention investigation is initiated
there is a significant probability that anti-dumping duties will be applied to the country under
investigation.
It also became clear the EU would use its powers to apply and require collection of
retrospective duties at the maximum rate applied to P. R. China (e.g. 74.1%). Payment of
these duties is required on demand by the national customs authorities.
Even if an exporter applies for exemption, there is no guarantee it will be granted. If there is
any doubt or slightest indication of non-cooperation, the European Commission will not grant
an exemption.
Importers, therefore, have no choice but to weigh up very carefully whether they can take the
risk of continuing to import from a country subject to a circumvention investigation or whether
to ‘play safe’ and move their purchases to other countries.
Background Notes
This briefing has been prepared to clarify the issues related to EU circumvention
investigations. The information is to the best of EFDA’s knowledge accurate and reflects the
current situation in relation to EU circumvention investigatory practises in general and the
specific situation for fasteners. However, those requiring definitive information must refer to
European Commission, Directorate-General Trade. Full contact information can be found at:
http://ec.europa.eu/trade/trade-policy-and-you/contacts/#_trade-defence
The briefing is primarily based on the experience of the EU circumvention investigation
initiated by EU Regulation 966/2010, which in 2011 resulted in anti-dumping duties being
applied to carbon steel fasteners imported from Malaysia with the exception of those
originating from eight exporters which obtained a EU exemption (see EU Council
Implementing Regulation 723/2011 for the detailed findings and determination.)
Definitions of circumvention and the legal grounds and processes for EU circumvention
investigations are based on the EU Basic Anti-dumping Regulation 1225/2009 variously
amended.
Anti-dumping duties are currently applied to imports of certain carbon steel fasteners
originating from P. R. China to a maximum level of 74.1%. These duties were originally
imposed by EU Regulation 91/2009 and are currently subject to EU Expiry Review R591. The
Review is expected to publish its findings in April 2015 and will determine whether the antidumping measures are extended for a further five years from that date.
Contact:
European Fastener Distributor Association
Am Weidendamm 1 A, D-10117 Berlin
Phone: + 49 30 590099581
Fax: + 49 30 590099481
E-Mail: [email protected]
Internet: www.efda-fastenerdistributors.org
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