Last month was notable for a number of legislative initiatives, like the signing of the Protocol amending the DTT between Ukraine and the UK; new anti-dumping rules adopted by the EU Parliament; the Law On Audit of Financial Statements and Auditing Activity. We also ask for hands on comments on the new Draft On Privatization of State Property; mechanism for automatic data exchange between the Register of Property Rights and the State Land Cadastre; creation of the National Bank of Ukraine's Credit Registry.
The European Parliament has approved new anti-dumping rules. How will such changes in the EU anti-dumping legislation affect the foreign economic activity of domestic companies?
Anzhela Makhinova, Counsel, Sayenko Kharenko
Amendments to the EU Basic Anti-dumping Regulation (the Amendments) are the expected result of China obtaining market economy status in December 2016 and the results of the Argentina — Biodiesel case.
To respond to new challenges, the EU has developed a completely new concept of adjustments. The Amendments allow the EU to construct normal value exclusively on the basis of production and sale costs reflecting undistorted prices or benchmarks in all cases when certain significant distortions are revealed. For example, distortions occurring when reported prices or costs, including the costs of raw materials and energy, are not the result of free market forces because they are affected by substantial Government intervention. Notably, the list of potential distortions as set out by the Amendments is not exhaustive and among others, cover situations involving any state authority's impact on the market, interference by the state in prices or costs, discrimination in favor of domestic suppliers, etc.Moreover, the Amendments directly allow the EU to focus on the adequate level of social and environmental protection in the relevant countries.
The Amendments extend the possibility of applying new methodologies of normal value construction not only to non-market economy countries (like China earlier), but to all countries where certain distortions may be revealed. Ukraine is no exception, especially in view of the fact that we have a long-lasting anti-dumping history in the EU (pipes, hot-rolled products, fertilizers, ferroalloys) and there are spheres where some distortions still exist, and that is saying nothing of the social and environmental protection level. Moreover, if the EU reveals certain distortions, it will prepare a special report for the whole country or even for certain specific sectors, which will be publicly available and will be used by European producers in the course of any further anti-dumping investigations (even for products which were not initially covered by the report).
Notably, China and Russia have already strongly criticized the Amendments in the WTO and have questioned their compliance with WTO rules...
Originally published by Ukrainian Journal of Business Law.
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