Dumping margin calculation methodology
The European Commission calculates dumping margins by comparing normal value (the price or constructed value in the exporting country's domestic market) with export price (the price at which the product is sold for export to the European Union), then making adjustments to ensure a fair comparison at the same level of trade. The dumping margin is the amount by which normal value exceeds export price.
Normal value — domestic sales method. Under Article 2(1)–(2) of Regulation (EU) 2016/1036, normal value is normally based on prices paid or payable for the like product in the ordinary course of trade in the domestic market of the exporting country. Domestic sales may be used if they constitute at least 5% of the volume of sales of the product under consideration to the Union, though a lower volume may suffice if prices are representative. Sales made at a loss or below the cost of production may be excluded from the calculation of normal value if they are not in the ordinary course of trade.
Constructed normal value. Where there are no or insufficient domestic sales of the like product in the ordinary course of trade, or where a particular market situation or the low volume of sales in the domestic market makes such sales unsuitable for comparison, normal value is constructed. Article 2(3) and (6) provide that constructed normal value is calculated as the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits. The cost of production includes the cost of raw materials and energy, manufacturing costs, and other costs incurred in producing the like product.
Significant distortions methodology. For WTO member countries where significant distortions exist that affect prices or costs (including raw materials, energy, labour, and capital), Article 2(6a) — introduced by Regulation (EU) 2017/2321 and applicable from 20 December 2017 — permits the Commission to construct normal value using costs of production and sale that reflect undistorted prices or benchmarks, including those on world markets or in an appropriate representative country with a similar level of economic development as the exporting country. Article 2(6a)(a) requires the Commission to select the representative country on the basis of objective criteria, including the level of economic development, and gives the exporting producers an opportunity to comment. Interested parties are given access to the file, and any evidence regarding the existence of significant distortions may be taken into account only if it can be verified in a timely manner. The Commission has published country reports setting out the evidence of significant distortions; since 2017, this methodology has been applied to investigations concerning certain WTO members.
Non-WTO countries. For imports from countries that are not WTO members and are listed in Annex I to Regulation (EU) 2015/755, Article 2(7) provides that normal value is determined on the basis of the price or constructed value in an appropriate representative country (the analogue-country method), or the price from such a third country to other countries including the Union, or on any other reasonable basis.
Export price. Article 2(8) defines export price as the price actually paid or payable for the product when sold for export to the Union. Where there is no export price or where it is unreliable because of an association or compensatory arrangement between the exporter and the importer or a third party, Article 2(9) provides that the export price may be constructed on the basis of the price at which the imported products are first resold to an independent buyer, or on any reasonable basis if the products are not resold to an independent buyer or are not resold in the condition in which they were imported.
Fair comparison. Article 2(10) requires that the comparison between export price and normal value be made at the same level of trade (normally ex-works) and in respect of sales made at as closely as possible the same time. Due allowance must be made for differences affecting price comparability, including differences in conditions and terms of sale, taxation, levels of trade, quantities, and physical characteristics. Adjustments may include costs normally borne by an importer but paid by any associated party, such as transport, insurance, handling, customs duties, and a reasonable margin for selling, general and administrative costs and profit.
Comparison methodologies. Article 2(11) provides that, subject to fair-comparison rules, the dumping margin is normally established by comparing a weighted average normal value with a weighted average of prices of all export transactions to the Union (weighted-average-to-weighted-average, or WA-WA), or by comparing individual normal values and individual export prices on a transaction-to-transaction basis (transaction-to-transaction, or T-T). However, the Commission may use a weighted-average-to-transaction (WA-T) method — comparing a weighted average normal value to prices of all individual export transactions — if there is a pattern of export prices that differs significantly among different purchasers, regions, or time periods, and the standard methods would not reflect the full degree of dumping being practised.
Dumping margin. The dumping margin is the amount by which normal value exceeds export price, expressed either as a percentage (ad valorem) or as a specific amount per unit. Where dumping margins vary among different exporters or transactions, Article 2(11) permits the Commission to establish a weighted average dumping margin. Under Article 9(4), the final anti-dumping duty may not exceed the dumping margin established, but it should be less than that margin if such a lesser duty would be adequate to remove the injury to the Union industry (the lesser-duty rule). Article 7(2a), introduced by Regulation (EU) 2018/825, provides that when examining whether a duty lower than the margin of dumping would be sufficient to remove injury, the Commission shall take into account whether there are distortions on raw materials with regard to the product concerned; where such distortions exist and meet the threshold set in Article 7(2b) (a single raw material accounting for not less than 17% of the cost of production), the anti-dumping duty may be set at the full dumping margin rather than a lower injury margin.
Injury determination and the three-factor test
The European Commission may impose anti-dumping duties only if it demonstrates that dumped imports cause material injury to the Union industry. Article 3 of Regulation (EU) 2016/1036 establishes the injury-determination framework, which requires positive evidence and an objective examination of three factors: the volume of dumped imports, their effect on prices in the Union market, and the consequent economic impact on the Union industry.
Definition of injury. Under Article 3(1), "injury" means material injury to the Union industry, threat of material injury to the Union industry, or material retardation of the establishment of such an industry. The threshold is "material" — dumped imports must inflict harm that rises above de minimis levels. Article 9(3) provides that proceedings are terminated if the volume of dumped imports from a particular country is found to be negligible (normally less than 3% of total imports of the like product into the Union, unless countries that individually account for less than 3% collectively account for 7% or more).
Volume effects — Article 3(3), first sentence. The Commission examines whether there has been a significant increase in dumped imports, measured either in absolute terms or relative to production or consumption in the Union. A year-on-year rise in import volumes, or a rising share of the Union market captured by dumped products, supports a finding of injury. The regulation does not set a numerical threshold; "significant" is a qualitative assessment informed by the investigation period data (typically three years of historical data plus a shorter investigation period).
Price effects — Article 3(3), second sentence. The Commission assesses whether dumped imports have caused one or more of three price effects:
- Price undercutting: whether dumped imports undercut the price of the like product sold by the Union industry. The Commission compares the weighted average price of dumped imports (adjusted to a common ex-works basis) with the weighted average selling price of Union producers to their first independent customers. General Court case law requires a fair comparison at the same level of trade; adjustments must account for differences in sales channels, physical characteristics, quantities, and terms of sale.
- Price depression: whether dumped imports have caused Union industry prices to fall to a significant degree during the injury period. The Commission examines price trends over time, controlling for cost movements and demand shifts.
- Price suppression: whether dumped imports have prevented Union industry prices from increasing to levels that otherwise would have occurred — typically, preventing producers from passing through increases in raw-material or energy costs.
Article 3(3), final sentence, clarifies that "no one or more of those factors can necessarily give decisive guidance" — the Commission evaluates all three price metrics and weighs them together with volume and economic-impact data.
Economic impact on the Union industry — Article 3(5). The Commission evaluates all relevant economic factors and indices bearing on the state of the Union industry, including:
- Actual and potential decline in sales, profits, output, market share, productivity, return on investments, and utilisation of capacity;
- Factors affecting Union prices;
- Actual and potential negative effects on cash flow, inventories, employment, wages, growth, and ability to raise capital or investments;
- The magnitude of the dumping margin (a higher margin suggests greater distortion and potential for injury).
Article 3(5) requires an evaluation of all relevant factors; the list is non-exhaustive. The Commission typically examines trends over the injury investigation period (often three calendar years plus the subsequent investigation period of 12–15 months). An industry in decline on multiple indicators — falling sales, eroding market share, reduced employment, losses or declining profitability — is more likely to meet the material-injury threshold.
Causation and non-attribution — Articles 3(6) and 3(7). It is not sufficient to show that dumped imports and injury coexist. Article 3(6) requires that the Commission demonstrate from all relevant evidence that the volume and/or price levels of dumped imports are responsible for an impact on the Union industry that exists to a degree enabling it to be classified as material. Article 3(7) requires the Commission to examine known factors other than the dumped imports that are injuring the Union industry at the same time, and to ensure that injury caused by those other factors is not attributed to the dumped imports. Article 3(7) lists illustrative factors: the volume and prices of imports not sold at dumping prices; contraction in demand or changes in consumption patterns; restrictive trade practices of, and competition between, third-country and Union producers; developments in technology; and the export performance and productivity of the Union industry. The Commission must isolate and distinguish the injury caused by dumped imports from harm attributable to these other causes.
Cumulation of imports — Article 3(4). Where imports of a product from more than one country are simultaneously subject to anti-dumping investigations, the Commission may cumulatively assess the effects of such imports only if it determines that (a) the dumping margin for each country is more than de minimis and the volume of imports from each country is not negligible, and (b) cumulative assessment is appropriate in light of the conditions of competition between the imported products and the conditions of competition between the imported products and the like Union product. Cumulation allows the Commission to evaluate the combined volume and price effects of imports from multiple sources when they compete in overlapping market segments and undercut Union industry prices in a similar manner.
Threat of material injury — Article 3(9). In some cases the Commission may base measures on a threat of material injury rather than present injury. Article 3(9) sets out factors to consider, including: a significant rate of increase of dumped imports indicating the likelihood of substantially increased imports; sufficient freely disposable capacity on the part of the exporter or an imminent substantial increase in such capacity; whether imports are entering at prices that would depress prices or prevent price increases and would probably increase demand for further imports; and inventories of the product. Article 3(9) clarifies that no one factor by itself gives decisive guidance, but the totality of factors must lead to the conclusion that further dumped exports are imminent and that, unless protective action is taken, material injury will occur.
Investigation procedures and deadlines
The European Commission must complete anti-dumping investigations within strict statutory timelines. Regulation (EU) 2016/1036 provides that termination of cases—irrespective of whether definitive measures are adopted—shall normally take place within 12 months, and in no case more than 15 months, of the initiation of the investigation. Parallel deadlines govern the imposition of provisional and final duties.
Initiation. An investigation is initiated by the Commission upon a written complaint by or on behalf of the Union industry, or in special circumstances ex officio by the Commission if it has sufficient evidence of dumped imports causing injury to Union producers. Article 5(4) requires that the complaint be supported by Union producers whose collective output constitutes more than 50% of total production of the like product produced by the portion of Union industry expressing support for or opposition to the complaint. No investigation may be initiated where producers expressly supporting the complaint account for less than 25% of total production by the Union industry. The Commission publishes a notice of initiation in the Official Journal of the European Union setting out the product and countries concerned, a summary of the information received, and the periods within which interested parties may make themselves known, present views, and submit information.
Provisional measures. Under Article 7(1), provisional anti-dumping duties may be imposed after a provisional affirmative determination of dumping and consequent injury to the Union industry, provided the Commission has given notice and interested parties have had an adequate opportunity to submit information and make comments. The provisional duties shall be imposed no earlier than 60 days from the initiation of the proceedings and normally not later than seven months, but in any event not later than eight months, from the initiation. The seven-month standard and eight-month hard ceiling were introduced by Regulation (EU) 2017/2321, which entered into force on 20 December 2017; prior to that amendment, the deadlines were nine months standard and no later than nine months. The amount of the provisional duty may not exceed the dumping margin as provisionally established, but should be less if a lesser duty would be adequate to remove the injury (the lesser-duty rule applies at the provisional stage). Provisional duties are secured by a guarantee; the release of products for free circulation is conditional upon provision of the guarantee.
Duration of provisional measures. Article 7(6) provides that provisional duties may be imposed for six months and extended for a further three months, or they may be imposed for nine months. However, they may only be extended or imposed for a nine-month period where exporters representing a significant percentage of the trade involved so request or do not object upon notification by the Commission. In practice, the Commission announces its intention to impose provisional duties four weeks in advance under Delegated Regulation (EU) 2020/1173, which entered into force on 11 August 2020.
Definitive measures. Where the facts as finally established show that there is dumping and injury caused thereby, and the Union interest calls for intervention (Article 21), the Commission imposes a definitive anti-dumping duty. The Commission must complete the investigation and impose any measures within the 12-to-15-month window from initiation. Where provisional duties are in force, Article 9(4) requires the Commission to initiate the procedure for imposing definitive duties no later than one month before the expiry of the provisional duties. The definitive duty may not exceed the dumping margin established, but it should be less than that margin if such a lesser duty would be adequate to remove the injury to the Union industry. Where a provisional duty has been applied and the facts as finally established show dumping and injury, the Commission decides what proportion of the provisional duty is to be definitively collected, irrespective of whether a definitive duty is imposed (Article 14(2)).
De minimis and negligibility termination. Article 9(3) mandates immediate termination of proceedings where the dumping margin is less than 2%, expressed as a percentage of the export price (for individual exporters, margins below 2% result in termination of the investigation for that exporter, but the exporter remains subject to proceedings and may be reinvestigated in any subsequent review for the country concerned). Recital 16 and Article 5(7) provide that an investigation or proceedings shall be terminated where the volume of dumped imports from a particular country is found to be negligible—normally less than 3% of total imports of the like product into the Union, unless countries that individually account for less than 3% collectively account for 7% or more. For injury, injury is normally regarded as negligible where the imports concerned represent less than the volumes set out in Article 5(7).
Countervailing-duty investigations. Anti-subsidy investigations under Regulation (EU) 2016/1037 follow a similar but slightly different timeline. Provisional countervailing duties may be imposed no earlier than 60 days from initiation but no later than nine months from initiation (Article 12(1) of Regulation 2016/1037). The Commission must impose any definitive countervailing measures within 13 months of the initiation of the investigation. Like anti-dumping cases, anti-subsidy investigations also apply the lesser-duty rule and a de minimis threshold (a subsidy is considered de minimis if it is less than 1% ad valorem for developed countries or less than 2% for developing countries).
Duration of measures and reviews. Once imposed, definitive anti-dumping or countervailing duties remain in force for a maximum of five years unless a review indicates that they should be maintained (Article 11(2)). The Commission may conduct interim reviews on its own initiative or at the request of a Member State or an interested party, or expiry reviews at the end of the five-year period. Interim reviews shall normally be concluded within 12 months of initiation, and in no case more than 15 months (Article 11(5)); new-exporter reviews (for exporters that did not export during the original investigation period) shall in all cases be concluded within nine months of initiation.
Source: Commission Delegated Regulation (EU) 2020/1173 of 4 June 2020 amending Regulation (EU) 2016/1036
Union interest test — the fourth substantive requirement
Even where the European Commission finds dumping, material injury, and causation, it may not impose anti-dumping duties unless the Union interest calls for intervention. Article 21 of Regulation (EU) 2016/1036 establishes this fourth substantive gate, which requires the Commission to weigh the competing interests of Union producers, importers, users, and consumers before deciding whether measures serve the broader Union interest.
The Union interest requirement. Article 9(4) provides that "where the facts as finally established show that there is dumping and injury caused thereby, and the Union interest calls for intervention in accordance with Article 21, a definitive anti-dumping duty shall be imposed." The Union interest test is therefore mandatory; Article 7(1) similarly cross-references Article 21 for provisional measures. Both provisional and definitive duties require a positive Union interest determination.
Article 21(1) — the balancing framework. Article 21(1) requires the Commission to consider "whether it is not in the Union interest to adopt such measures" in respect of any provisional or definitive measure, and specifies that the Commission must give all parties the opportunity to make their views known. The regulation frames the test in the negative: the Commission assesses whether measures are against the Union interest. Article 21(1) further provides that if "the Commission clearly concludes that it is not in the Union interest to adopt such measures it shall terminate the investigation or proceedings without imposing duties."
Article 21(1) requires "a determination, based on an appreciation of all the various interests taken as a whole, including the interests of the domestic industry and users and consumers." The regulation does not assign fixed weights to each interest group or enumerate a closed list of factors; the Commission balances the interests in light of the particular facts of each case. In practice, the factors examined include: the degree and duration of injury to the Union industry and the importance of that industry for employment; the impact of duties on importers and availability of alternative supply; the effect on downstream users' costs, competitiveness, and employment; and the likely price effect on consumers. The Commission may also consider systemic factors such as the effect of measures on competition, market concentration, and—particularly for critical inputs—the impact on Union supply-chain resilience.
Interested parties who may submit Union interest arguments — Article 21(2). Article 21(2) specifies that information may be submitted by "the domestic industry, importers, their representative associations, representative users and representative consumer organisations" if the information is received "within the overall time limits set for making submissions in accordance with Article 5(10) or Article 20(5), as appropriate, or in the case of final measures, within time limits set by the Commission." The Commission invites Union interest submissions in the notice of initiation (which sets the initial deadlines under Article 5(10)) and again when imposing provisional measures (typically setting a deadline in the provisional regulation for comments on the application of provisional measures).
Article 21(4) provides that interested parties which have submitted information under paragraph 2 may request a hearing. The Commission "shall provide an opportunity for the domestic industry, importers, their representative associations, representative users and representative consumer organisations which have made themselves known in accordance with Article 5(10), to meet, so that opposing views may be presented and any rebuttal arguments put forward." Article 21(4) further specifies that such hearings "shall take place only after a preliminary determination of dumping and injury has been made or in the case of final measures, after a provisional duty has been applied."
Standing to participate. Article 21(3) defines the categories of parties for purposes of the Union interest test:
- "Users" means those who use the product under consideration in their manufacturing or who incorporate it into another product;
- "Representative user" means a user whose interests in relation to the product under consideration are not mainly as an importer;
- "Representative association of users" means an association the majority of whose members use the product under consideration in their manufacturing or incorporate it into another product and whose interests are not mainly as importers;
- "Representative consumer organisation" means an association the majority of whose members are final consumers of the product under consideration.
These definitions ensure that the Union interest test captures the interests of actual end users and consumers within the Union, rather than entities whose primary interest is in the commercial importation of the dumped product.
Legal standard and burden. Article 21(1) does not expressly allocate a burden of proof or state a presumption. The text requires the Commission to make a determination of Union interest and provides that the Commission "shall terminate" the investigation if it "clearly concludes" that measures are not in the Union interest. In cases decided to date, the Commission has typically concluded that eliminating injurious dumping is in the Union interest unless parties opposing measures present evidence that the negative effects on importers, users, or consumers would outweigh the benefits to the injured Union industry. The General Court reviews Union interest determinations for manifest error of assessment, procedural failures, or misuse of powers, recognizing that the balancing exercise involves complex economic and political appraisal.
Outcome and timing. If the Commission concludes that imposing duties is not in the Union interest, Article 21(1) requires termination of the investigation or proceedings. Such outcomes are uncommon in cases where dumping and injury are established; termination on Union interest grounds has occurred where the Union industry represents a negligible share of consumption or employment relative to affected user industries, or where duties would severely disrupt critical supply chains without realistic alternative sources. The Commission's final Union interest determination is set out in the recitals of the definitive regulation, together with a summary of the arguments submitted by each category of interested party and the Commission's reasoning.
Parties may submit Union interest arguments at any stage of the investigation, but the regulation sets specific procedural windows: the initial submission period runs from the notice of initiation through the deadlines in Article 5(10); a further opportunity arises after provisional measures, when the Commission sets a deadline (often in the range of three to four weeks) for comments on the application of provisional measures. Late submissions risk exclusion from the administrative record.
Parallel anti-subsidy cases. Regulation (EU) 2016/1037 governing anti-subsidy investigations contains a Union interest requirement at Article 31 with substantively identical language and procedural framework. Where the Commission conducts parallel anti-dumping and anti-subsidy investigations concerning the same product, it generally performs a combined assessment of the Union interest covering both sets of measures; the legal finding is recorded separately in each definitive regulation.