Commercial Information Circulars

Ref : Ref : CR EIC 230/2/3/2/7/2

18 February 1997

Dear Sirs,

Commercial Information Circular No. 19/97

European Union (EU) :Authorization of the Exemption of Imports of Certain Bicycle Parts Originating in the Peoples's Republic of China(PRC) from the Extension of the anti-dumping Duty Imposed on Imports of Bicycle Originating in the PRC

Further to Commercial Information Circular No. 11/97 of 5 February 1997, the Department has received information that the European Commission has published a regulation (the Regulation) in the Official Journal of the European Communities to authorize the exemption of imports of certain bicycle parts originating in the PRC from the extension of anti-dumping duty imposed on imports of bicyclesoriginating in the PRC. The Regulation entered into force on 22 January 1997. A copy of theRegulation is appended to this circular for reference.

DETAILS

2. The EU has extended, with effect from 19 January 1997, the definitive anti-dumping duty of 30.6% imposed on imports of bicycles falling within CN code 8712 00 originating in the PRC to imports of certain PRC's bicycle parts. Notwithstanding the levy of the extended duty, the European Commission has decided to exempt imports of PRC's essential bicycle parts which do not circumvent the EU's anti-dumping duty on PRC's bicycles from such extended duty. Details of the exemption are set out in the following paragraphs.

Exemption from the Extended Duty

3. Imports of essential bicycle parts shall be exempted from the extended duty in the following cases :
   1. where they are declared for free circulation by or on behalf of an exempted party;
       
   2. where they are declared for free circulation under end-use control stated in paragraphs 13-15 below; and
       
   3. where they are declared for free circulation, by or on behalf of a party under examination, they shall be provisionally exempted from the extended duty subject to the provision of a security that may be required by the authorities.
       
4. For the purpose of the Regulation, essential bicycle parts include :
   1. painted or anodized or polished and/or lacquered bicycle frames (CN code ex 8714 9110);
       
   2. painted or anodized or polished and/or lacquered bicycle front forks (CN code ex 8714 9130);
       
   3. derailleur gears (CN code 8714 9950);
       
   4. crank-gear (CN code 8714 9630);
       
   5. free-wheel sprocket-wheels, whether or not presented in sets (CN code 8714 9390);
       
   6. other brakes (CN code 8714 9430);
       
   7. brake levers, whether or not presented in sets (CN code ex 8714 9490);
       
   8. complete wheels with or without tubes, tyres and sprockets (CN code ex 8714 9990); and
       
   9. handlebars, whether or not presented with a stem, brake and/or gear levers attached (CN code 8714 9910).
       
5. Requests for exemption shall be made in writing in one of the official languages of the European Community and must be signed by a person authorized to represent the applicant. The requests should be substantiated by supporting evidence set out in paragraph 6 below and sent to the following address :

   European Commission
   Directorate-General for External Economic Relations
   Unit I/C-3
   CORT 100 4/59
   Rue de la Loi/Wetstraat 200
   B-1049 Brussels
   Fax No. : (32-2) 295 65 05

6. Requests for exemption should contain the following :
   1. evidence showing that the applicant is using essential bicycle parts for the production or assembly of bicycles in quantities above the threshold set out in paragraph 13(c) below or that he has entered into a irrevocable contractual obligation to do so; and
       
   2. prima facie evidence that the applicant's assembly operations fall outside the scope of circumvention in Article 13(2) of Regulation (EC) No. 384/96 (the EU's Anti-dumping Regulation).

Apart from the above, a request shall be admissible where the applicant has not, within the 12 months preceding the request, been refused authorization of exemption pursuant to paragraph 9, or had an exemption revoked pursuant to paragraph 10 below. Additional information may be required for the determination of the admissibility of a request. Admissibility of duly-substantiated requests shall normally be determined within 45 days of their receipt. Where a request is held admissible, an examination shall be initiated immediately.

Examination of Request for Exemption from the Extended Duty

7. The examination of a request by the Commission will normally cover a period of not less than six months prior to the receipt of the request. The Commission may request additional information from the applicant or carry out on-the-spot verification. The examination of a request shall normally be concluded within twelve months. Any party under examination shall ensure that essential bicycle parts which it declares for free circulation are either used in its assembly operations, destroyed, or re-exported. It shall keep records of the essential bicycle parts delivered to it and of the use made of them. These records shall be retained for at least three years. The records and any necessary additional evidence and information shall be communicated to the Commission upon request.

Decision of Granting Exemption

8. If it is shown after examination by the Commission that the applicant's assembly operations do not fall within the scope of circumvention, the applicant's exemption from the extended duty shall be authorized. The decision shall have retroactive effect as from the date of receipt of the request.
    
9. Where the criteria for exemption are not fulfilled, the request shall be rejected and the suspension of the payment of the extended duty referred to in paragraph 3(c) above shall be lifted. Any breach of obligations referred to in paragraph 7 above or any false declaration relating to a decision may constitute a reason for rejecting the request.

Revocation of an Exemption

10. An exemption shall be revoked in the following situations :
    1. where a review which may be initiated by the Commission has shown that the exempted party's assembly operations fall within the scope of circumvention;
        
    2. in the event of breach of the party's obligation under paragraph 7 above; or
        
    3. in the event of lack of cooperation after the adoption of the exemption decision.

Parties under Examination and Exempted Parties

11. The requests of the parties which are admissible and where examinations are initiated are set out in Annex I of the Appendix. Pending a decision on the requests, the payment of the customs debt incurred for the extended duty shall be suspended with effect from 22 January 1997. Where exemption of the extended duty is authorized, the decision shall have retroactive effect as from 20 April 1996. The applicant's customs debts in respect of the extended duty shall therefore be considered void from that date.
     
12. The parties exempted from the extended duty with retroactive effect from 20 April 1996 are listed in Annex II of the Appendix.

Exemption Subject to End-use Control

13. Where imports of essential bicycle parts are declared for free circulation by a person other than an exempted party, they shall be exempted from the application of the extended duty if declared in accordance with the Taric structure in Annex III of the Appendix and subject to the conditions laid down in Article 82 of Council Regulation (EEC) No. 2913/92 and Articles 291 to 304 of Council Regulation (EEC) No. 2454/93, where :
    1. the essential bicycle parts are delivered to a party exempted under paragraphs 8 or 12 above;
        
    2. the essential bicycle parts are delivered to another holder of an authorization within the meaning of Article 291 of Council Regulation (EEC) No. 2454/93; or
        
    3. on a monthly basis, less than 300 units per type of essential bicycle parts are either declared for free circulation by a party or are delivered to it.
        
14. Where the parties referred to in paragraph 13(c) above are found to have declared for free circulation or received deliveries of quantities of essential bicycle parts above the threshold set out in the same paragraph, or where they fail to cooperate with the examination, they shall no longer be presumed to fall outside the scope of circumvention of the EU's Anti-dumping Regulation.
     
15. Where the parties abused the exemption authorized under paragraph 13(c) above in order to circumvent the extended duty, the extended duty not levied on any essential bicycle parts declared for free circulation by those parties or delivered to them after 22 January 1997 may be reclaimed.

ENQUIRIES

16. For enquiries concerning the content of this circular, please contact the undersigned at telephone number 2398 5351.

Yours faithfully,

(Miss Priscilla LIU)
for Director-General of Trade

Note :
While every effort is made to ensure the accuracy of the above information, the Department cannot guarantee this to be so and will not be held liable for any reliance placed on the same.