In light of experience gained in past proceedings, it is appropriate to clarify the circumstances in which significant distortions affecting to a considerable extent free market forces may be deemed to exist. In particular, it is appropriate to clarify that this is the case 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. It is further appropriate to clarify that when assessing the existence of significant distortions regard should be had, inter alia, to the potential impact of one or more of the following elements: the market in question being to a significant extent served by enterprises which operate under the ownership, control or policy supervision or guidance of the authorities of the exporting country; state presence in firms allowing the state to interfere with respect to prices or costs; public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces; the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws; wage costs being distorted; access to finance granted by institutions which implement public policy objectives or otherwise not acting independently of the state.

The Commission should produce, make public and regularly update reports on significant distortions, which could potentially result in an anti-dumping investigation, describing the market circumstances concerning those instances in a certain country or a certain sector. Such reports and the evidence on which they are based should be placed on the file of any investigation relating to that country or sector. In such investigations, interested parties should have ample opportunity to comment on the reports and the evidence on which they are based. When assessing the existence of significant distortions, relevant international standards, including core conventions of the International Labour Organisation (ILO) and relevant multilateral environmental conventions, should be taken into account, where appropriate.

Costs are normally calculated on the basis of records kept by the exporter and producer under investigation. However, where there are direct or indirect significant distortions in the exporting country with the consequence that costs reflected in the records of the party concerned are artificially low, such costs may be adjusted or established on any reasonable basis, including information from other representative markets or from international prices or benchmarks. Domestic costs may also be used, but only to the extent that they are positively established not to be distorted, on the basis of accurate and appropriate evidence.

When data are sourced in representative countries and the Commission has to establish whether the level of social and environmental protection in such countries is adequate, it is necessary for the Commission to examine whether those countries comply with core ILO and relevant multilateral environmental conventions.

Where part of the costs for an exporter and producer is distorted, including where a given input is sourced from different sources, that part of the costs should be replaced by undistorted costs. In light of experience gained in past proceedings, it is appropriate to further clarify that, for the purposes of determining the existence of significant distortions in a third country, due account should be taken of all relevant evidence regarding the circumstances prevailing on the domestic market of the exporters and producers from that country, which has been placed on the file, and upon which interested parties have had an opportunity to comment, including an opportunity for those exporters and producers to conclusively show that their domestic costs are undistorted. Where available, such evidence includes relevant reports. Indications as to the existence of significant distortions may also be presented by all relevant stakeholders, including Union industry and trade unions. Such indications and the need to avoid any additional burdens for Union industry in using the anti-dumping instrument, in particular in view of the economic and trade specificities of small and medium-sized enterprises, should be considered when deciding on preparing or updating the relevant reports.

With respect to the methodology used in the original investigation and to be used in the review investigation, Article 11(9) of Regulation (EU) 2016/1036 applies. In that context, it is appropriate to clarify that, when examining whether there is an indication that circumstances have changed, due account should be taken of all relevant evidence, including relevant reports regarding the circumstances prevailing on the domestic market of the exporters and producers and the evidence on which they are based, which has been placed on the file, and upon which interested parties have had an opportunity to comment.

In the absence of any other specific transitional rules regulating the matter, it is appropriate to provide for the application of this Regulation to all decisions on the initiation of proceedings, and to all proceedings, including original investigations and review investigations, initiated on or after 20 December 2017, subject to Article 11(9) of Regulation (EU) 2016/1036. Furthermore, by way of specific transitional rule for existing measures, and having regard to the absence of any other specific transitional rules regulating the matter, in the case of a transition from a normal value calculated pursuant to Article 2(7) of Regulation (EU) 2016/1036 to a normal value calculated in accordance with the methodology set out in Regulation (EU) 2016/1036 as amended by this Regulation, the original methodology should continue to apply until the initiation of the first expiry review following such transition. With a view to reducing the risk of circumvention of the provisions of this Regulation, the same approach should apply with respect to reviews conducted pursuant to Article 11(4) of Regulation (EU) 2016/1036. It is also appropriate to recall that a transition from a normal value calculated pursuant to Article 2(7) to a normal value calculated in accordance with the methodology set out in Regulation (EU) 2016/1036 as amended by this Regulation would not in itself constitute sufficient evidence within the meaning of Article 11(3) of Regulation (EU) 2016/1036. Such transitional rules should fill a lacuna that would otherwise risk generating legal uncertainty, provide a reasonable opportunity for interested parties to adapt themselves to the expiry of the old rules and the entry into force of the new rules, and facilitate the efficient, orderly and equitable administration of Regulation (EU) 2016/1036.

Regulation (EU) 2016/1036 and Regulation (EU) 2016/1037 should therefore be amended accordingly,