On 9 April 2010, The Dow Chemical Company (‘Dow Chemical’) filed an application for partial annulment of Implementing Regulation (EU) No 54/2010.

In that notice, parties were informed that, in view of the Judgment, imports into the European Union of ethanolamines manufactured by Dow Chemical are no longer subject to the anti-dumping duties imposed by the third expiry review Regulation and that definitive anti-dumping duties paid pursuant to that Regulation on imports of ethanolamines should be repaid or remitted in accordance with the applicable customs regulation.

The Commission officially advised the exporting producers, the importers and users known to be concerned and the Union industry of the partial reopening of the investigation. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set out in the notice.

All parties who so requested within that time limit, and who demonstrated that there were particular reasons why they should be heard, were granted the opportunity to be heard.

Representations were received from two exporting producers, three Union producers and a user of the product concerned.

It is recalled that the reason for the annulment of the contested Regulation was the General Court’s finding that the third expiry review Regulation contained two errors of assessment: (i) a finding of continued dumping during RIP and, therefore, on that basis, a finding of a likelihood of continuation of dumping; and (ii) the determination that the spare production capacity of ethanolamines in the United States amounted to 60 000 tonnes.

The Union industry acknowledged that the Judgment questioned the methodologies employed by the Institutions to quantify the spare capacity production in the USA. However, the Union industry maintained its position that basing the actual production capacity on 90 % of the nameplate capacity, as the institutions had done, is overly conservative as it is common and accepted for companies to exceed the nameplate capacity. Basing themselves on published market data allegedly sourced from PCI Xylenes & Polyesters (‘PCI’), they concluded that there was indeed spare capacity in 2008 and onwards.

Moreover, the Union industry considered that market conditions had not changed materially since the publication of the third expiry review Regulation and found several reasons to conclude that there is a likelihood of a recurrence of dumping. In this respect, it invoked the continuation of the US production capacity over domestic demand since the RIP; the material capacity expansions in third countries after 2009 which would have made US export markets increasingly self-sufficient; the existence of anti-dumping measures imposed or likely to be imposed soon in third countries; the increase of MEG (monoethylene glycol) capacity production from 2009 onwards; and the proposal in the USA to include some of the ethanolamines in the list of products with potential harmful effects to health which could ultimately have an impact in domestic consumption.

Dow Chemical expressed its doubts about the legality of the re-opening of the investigation, arguing that there is no specific provision in the basic Regulation allowing for that. This exporting producer also alleged that the re-opening would be in conflict with the 15-month statutory deadline set out in Article 11(5) of the basic Regulation for the completion of review investigations.

Dow Chemical further claimed that the Judgment would not require any implementing measure and that the Commission could not legally remedy the aspects of the contested Regulation since each of the substantive grounds that led to the adoption of the Regulation was either annulled by the General Court or contested. Dow Chemical therefore considered that the only legal way to remedy those aspects of the third expiry review Regulation would be to repeal the existing measures.

A user in the Union, Stepan Europe (‘Stepan’), submitted that the legal consequence of the judgment could only be that the measures imposed by the third expiry review Regulation should be withdrawn as they had been imposed on the basis of an erroneous analysis. Similar views were expressed by the exporting producer Huntsman Petrochemical Corporation LLC (‘Huntsman’). Indeed, Stepan and Huntsman argued that the Court held that, during the RIP, the country-wide dumping margin was negative and therefore no continuation of dumping could be established. Stepan considered that the institutions should hence have examined if there was a likelihood of recurrence of dumping; yet the third expiry review Regulation had been silent on this.

Moreover, Stepan stressed that, would the notion of continuation of dumping be interpreted on an individual company basis, the institutions should have concluded that there was no continuation of dumping for Dow Chemical as, according to the Court, the company represented more than 85 % of all imports from the USA, and therefore they should have considered whether dumping by Dow Chemical was likely to recur. For the other exporting companies, it was established that there had been dumping and therefore the institutions should have established whether dumping was likely to continue. The likelihood of continuation of dumping analysis was mainly based, according to Stepan, on a country–wide spare capacity in the USA of 60 000 tonnes. Given the Court’s finding that the institutions erred in assessing the spare capacity in the USA and given that, according to Stepan, the spare capacity was closer to at the most 8 000 tonnes, it was no longer possible to sustain that the other exporting companies were likely to continue dumping. The institutions would have needed to also analyse and establish the likelihood of recurrence of dumping.

Hunstman also based its analysis on the assumption that the Judgment confirmed that there was no spare capacity in the USA during the RIP and that it was therefore unlikely that an increased amount of ethanolamines would be exported into the Union on that basis. They claimed that it was therefore also not necessary to analyse other factors such as the impact of trade defence measures in third countries, the possible development of demand in the USA and in other markets or the downward pressure of prices. Moreover, Huntsman argued that, in the light of the Court’s finding of the lack of spare capacity in the USA during the RIP, it was no longer possible for the Commission to re-analyse the likelihood of recurrence of dumping and of injury and to conclude in the framework of this partial re-opening that there was a likelihood of recurrence of injurious dumping. Yet, were the Commission able to revisit the likelihood of recurrence of dumping and of injury, Huntsman considered that there would be no evidence to demonstrate that the requirements of Article 11(2) of the basic Regulation would be met. As regards the likelihood of recurrence of dumping, Huntsman opined that, on the basis of the finding that during the RIP there was no dumping for Dow Chemical, the biggest exporter by far, there was no likelihood of recurrence of dumping on a country-wide basis after the RIP if the anti-dumping duties would be withdrawn.

Huntsman raised that if the Union industry would have suffered from any injury, this would have been attributed to the effects of the economic crisis and not to imports from the USA. The mere exacerbation of the negative impact of the crisis through imports could not permit a finding of a likely recurrence of injury caused by the mentioned imports.

The claim that the introduction of deadlines to conclude anti-dumping investigations prevents the Commission from extending the investigation beyond the 15-months statutory limit (recital 17 above) was also found to be unwarranted. It is considered that this deadline is not relevant for the implementation of a Court judgment. Indeed, such deadline only governs the completion of the initial review investigation from the date of initiation to the date of definitive action, and does not concern any subsequent action that might have to be taken for instance as a result of judicial review. The consequence of accepting such claim would make it impossible for the institutions to take account of the General Court’s findings (as Article 266 TFEU requires). Indeed, the General Court’s judgment will always be handed down at a time when the deadline for the investigation has expired. Furthermore, it is noted that any other interpretation would mean that, for example, a successful legal action brought by one party would be without any practical effect for that party if the expiry of the time limit to conclude the original investigation would not permit the implementation of a judgment of the General Court. This would be at odds with the principle that all parties should have the right to effective judicial review.

As mentioned in recital 15, the Union industry has submitted that, based on PCI data, there would be a country-wide spare capacity in 2008 exceeding 60 000 tonnes. It is however noted that, in the calculation submitted by the Union industry, the total US production capacity had been used, i.e. no downwards adjustment to 90 % thereof had been done.

As regards the allegations regarding the calculation of the spare capacity during the RIP, it is noted that two exporting producers cooperated with the third expiry review investigation. During that investigation, it was established that INEOS Oxide LLC (‘INEOS’) did not have any spare capacity during the RIP, whereas Dow Chemical had some. The verified information shows that Dow Chemical did not use its spare capacity to engage in low-price exports during the RIP although it could have done so given the low level of the measures when expressed at an ad valorem equivalent.

Moreover, the cooperating companies, Dow Chemical and INEOS, represented during the RIP together 91,6 % of exports from the US into the Union. The total exports of Dow Chemical and INEOS amounted to 30 000-35 000 tonnes; exports from non-cooperating companies were not more than 3 000-4 000 tonnes. The country-wide dumping margin during the RIP was de minimis and imports from non-cooperating companies represented less than 1 % of the Union market. For confidentiality reasons the above figures have either been given in the form of ranges or are not exact.

As mentioned in recital 16, the Union industry referred to various factors which would indicate that, according to them, there was still a likelihood of a recurrence of dumping after 2008. However, market conditions have not changed materially since the publication of the third expiry review Regulation. Those circumstances are also acknowledged by the Union industry. However, it should be noted that as mentioned in recitals 30 and 31, given the low level of the measures and the lack of spare capacity from INEOS as well as the absence of dumping from Dow Chemical, there is no indication that the repeal of the measure would be likely to change the situation.

An exporting producer commented that the third expiry review should not have concluded with Implementing Regulation (EU) No 54/2010 imposing measures. The exporting producer requested that measures be repealed with retroactive effect so that all duties paid since the date of entry into force of Implementing Regulation (EU) No 54/2010 be reimbursed to all importers who duly paid them.

Taking account of the comments made by parties and the analysis thereof, it was concluded that the implementation of the Judgment implies that during the investigation that resulted in the adoption of Implementing Regulation (EU) No 54/2010, the institutions could not have come to the conclusion that dumping had continued during the RIP, nor that there was a likelihood of continuation of dumping. Moreover, the institutions should also have concluded that there was no likelihood of recurrence of dumping.

On the basis of the above, the anti-dumping duty on ethanolamines should not have been reintroduced. With respect to Dow Chemical, it should be recalled that Implementing Regulation (EU) No 54/2010 has already been annulled in so far as Dow Chemical is concerned by the judgment of the General Court in case T-158/10. Therefore, for the sake of clarity, it should be pointed out that, with regard to imports of ethanolamines from Dow Chemical, the anti-dumping duties are no longer in force as of the date of entry into force of Implementing Regulation (EU) No 54/2010 (23 January 2010).