Tag Archive: anti-dumping

  1. EU companies damaged by anti-dumping legislation meet with Commission

    Comments Off on EU companies damaged by anti-dumping legislation meet with Commission

    On 15 March, more than 40 participants, a mixture of company representatives and lawyers, signed up for the meeting with the EU Commission on the damaging effects on EU companies of anti-dumping (ADD) and anti-subsidy (ASD) measures against e-bikes from China. The meeting had been requested by LEVA-EU. In an exchange with three different Commission departments of DG Trade and DG Taxud, a long list of questions was presented. LEVA-EU Manager, Annick Roetynck, opened the meeting with a presentation of the different ADD and ASD issues that are damaging many EU companies.

    LEVA-EU Manager, Annick Roetynck, opened with the ascertainment that ADD and ASD on e-bikes from China, in combination with related legislation has become an inextricable tangle. EU companies are no longer able to understand the legislation and apply it correctly. As a result, many companies come under attack with their very existence put at risk. Some companies have already gone bankrupt, some are on the brink of bankruptcy. Annick Roetynck concluded that the inextricable tangle causes legal uncertainty that poses very serious risks and threats to the whole EU e-bike industry. As a result, she requested the Commission for clarification of the legislation, for potential measures to provide legal certainty and for potential measures to improve legislation.

    All Chinese components

    One of the first issues on the table was the applicability of Article 13 of the Basic Regulation in court-cases involving national customs services. This Article stipulates among other things that if the Chinese parts in an EU assembly represent 60% or more of the total value of the components or if in the assembly less than 25% value is added, the assembly may be considered to be circumventing.

    In several EU countries, national customs services have embarked on litigations partly based on this very article. In the past 5 years, LEVA-EU has always cautioned its members to comply with the 60/40 – 25% rule for fear of circumvention accusations and extension of the duties to essential e-bike components. It was therefore surprising, to say the least, to find the EBMA openly reassuring its members about the fact that the EU Commission itself had confirmed that the 60/40 rule or 25 % added value did not apply to e-bikes.

    In the meeting, the Commission repeatedly emphasized that customs services have no legal right to invoke Article 13, for which the competence lies solely with the Commission. The Commission representatives also assured that they were prepared to raise the matter with national customs authorities, provided that companies and/or their lawyers addressed the Commission directly. With that, the Commission guaranteed absolute confidentiality.

    One of the company managers in the meeting, who is subjected to a criminal court-case partly based on Article 13, reacted particularly emotionally when discussing this issue. He explained to the Commission, how all his life, he had done nothing but working hard for a third generation EU family business. His perception was that Europe was destroying not only his company but also him personally. He faces a fine of 60 million euro and 5 years in prison, a downright inhumane threat.

    General Rule of Interpretation 2(a)

    Unfortunately, the Commission’s assurances on Article 13, did not solve the problem since a representative of DG Taxud further complicated the issue by introducing the problem of the General Rule of Interpretation (GRI) 2(a), set out in Annex II to Council Regulation 2658/87. This Rule stipulates that the imports of parts may be considered as the import of a complete e-bike, which may prompt customs to categorize the parts under the HS-code for e-bikes instead of the codes for components. That categorization in turn, comes with ADD and ASD, if the components originate from China.

    The Commission seemed genuinely surprised to find a lawyer confirming to the EBMA President in 2021 that: “the EU customs nomenclature does not define the parts needed in order to have the “essential character” of a complete electrical bicycle and there has not been any authoritative ruling by the European Courts on the question of the minimum parts needed together to consider that they have the essential character of an electrical bicycle.

    The Commission was however unable to provide further clarification on how to practically deal with GRI 2(a). The Commission representative stated: “The import of e-bike parts could be characterized as imports of complete e-bikes for customs’ clarification purposes in principle if they are imported in one or more containers presented to customs’ clearance on the same day. Nevertheless, it cannot be excluded that parts imported on different dates are considered complete e-bikes, if it is obvious from objective characteristics that they are related.” In other words, while one department of the Commission confirmed that assembling electric bicycles from 100% Chinese parts was legal for the moment, another department could not give a conclusive answer to the question of how these could be legally imported.

    Import e-bike components ǂ import bike components

    A few years ago, the Commission published an explanatory note for national customs services on the import of conventional bicycle parts, stating that an incomplete bicycle, whether or not assembled, is to be classified under heading 8712 for complete bicycles, if it consists of the frame, the fork and at least two of the essential bike components subject to ADD. It is not possible for the Commission to publish a similar explanatory note for e-bike components because custom services have not asked for this. In the meantime, some custom services in the EU apply the same explanatory note to e-bike components. In the meeting, the Commission confirmed that this is incorrect and declared themselves prepared to make a statement about this!

    The last issue that was discussed in this meeting was the legal validity of the non-binding list rule for imports of e-bikes from outside the EU, issued by the Commission at the explicit request of the EBMA, aimed at actually refuting the change of tariff heading (CTH) for e-bikes imported from outside the EU.

    In 2017, also at the request of EBMA, HS code 8711 was amended to “Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars” with a view to creating a specific HS code for electric cycles. With that, electric bikes came under the same rules of origin as motorcycles, one of which was CTH. According to the Commission, EBMA subsequently requested for a change of that rule of origin, because the rule for motorcycles was allegedly not suitable for electric bikes.

    Since this change, if for instance a Taiwanese, Thai or Turkish assembler imports parts from China for the assembly of electric bicycles to be exported to the EU, that assembly does not qualify as “last substantial transformation” and must therefore be considered circumvention.

    Many outstanding questions

    So, EBMA requested the Commission in 2020 to close the so-called loophole by changing the rule of origin, upon which dozens of EU companies were attacked and literally and figuratively being presented with the bill. At the same time, EBMA reassured dozens of other EU companies that importing Chinese components for the assembly of e-bikes in the EU was not a legal issue.

    According to the Commission, there’s no going back on this change of the non-binding list rule, because it was approved by the member states. All this still doesn’t provide a conclusive answer to the question of the legal validity of this non-binding list rule.

    Furthermore, there are still many other outstanding questions about for instance OLAF’s working methods, the lack of insight into the investigations as well as the lack of redress for the European companies, that are subsequently charged by customs and dragged into legal cases that may last 5 to 10 years and cost the companies fortunes . Since at the end of this meeting, many questions remained unanswered, on behalf of the participants, LEVA-EU expressly requested a second meeting for further discussions. The classification of e-bike components and the discrimination of companies under end-use authorization as opposed to the exemption scheme are two more issues that still need to be discussed. Although some tentative steps towards improvement have been taken, this meeting has mainly shown that the legislation is an inextricable tangle that entrepreneurs simply cannot understand. A story to be continued.

    Photo by Rocío Perera on Unsplash

  2. LEVA-EU calls for evidence of damage to EU e-bike companies by dumping measures

    Comments Off on LEVA-EU calls for evidence of damage to EU e-bike companies by dumping measures

    The Commission has announced the expiry of the measures against electric bicycles from China in the Official Journal. LEVA-EU is anticipating a review and potential renewal of the measures. In the meantime, the Kafkaesque legislation and the multiple actions by national customs services and OLAF, cause unacceptable disruption and damage to many European companies. Ahead of the review, LEVA-EU calls on all companies affected by the measures for evidence.

    In the EU Official Journal of 2 May, the European Commission has published a notice of the impending expiry of the anti-dumping and countervailing measures against electric bicycles from China. This notice only results from normal procedural rules. The deadline for the current measures is 19 January 2024. Article 11.2 of the basic Dumping Regulation stipulates: “A definitive anti-dumping measure shall expire five years from its imposition (…), unless it is determined in a review that the expiry would be likely to lead to a continuation or recurrence of dumping and injury. Such an expiry review shall be initiated on the initiative of the Commission, or upon a request made by or on behalf of Union producers, and the measure shall remain in force pending the outcome of that review.

    It seems a foregone conclusion that EBMA will request a review. However, the main question is what arguments the organisation will use to extend the measures for another five years.

    In the past 4.5 years, EBMA has developed a surging discours on bringing industry back to Europe and especially on the large number of jobs that will come with it. The whole campaign culminated in a European Parliament Motion for a resolution on developing an EU cycling strategy which, very triumphantly announced that “the EU cycling ecosystem can scale up to 2 million jobs by 2030”.

    Much, of course, depends on the definition of the ‘EU cycling ecosystem”, but the fact is that we are still very far from those targeted two million jobs. In a report on employment in the (e)bike business, CONEBI concluded that there were 155,00 jobs in 2021. Incidentally, it appears that the violins in the (e)bike business are not quite tuned in unison. In their 2022 market report, the German (e)bike industry association stated: “The ZIV anticipate no large-scale relocation of production (reshoring) to Europe at the current time. However, it does expect production in The EU to grow in importance.

    And, contrary to what EBMA might claim, the anti-dumping measures are all but helpful to achieve the objective of 2 million jobs, since they are a major obstacle in starting up new companies, whilst causing extensive damage to existing companies in the European Union.

    EBMA shouts so loudly that the measures are absolutely necessary for “reshoring for better sustainability, more EU green jobs and EU investments/innovation”, that everyone, including the EU authorities seem to forget what dumping is really about. It is of course not about reshoring, green jobs nor about investments or innovation. The WTO defines dumping as “in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.” Another important element of dumping is the injury it causes to the EU-industry. And here lies the crux of the matter: what is the European ebike industry? In the end, everyone does the same thing: buying parts and assembling them into electric bikes. The net result of the measures against China however is that one part of the European ebike “industry” proffers from the measures, while another part is getting severely injured.

    The anti-dumping measures on electric bicycles from China have nothing to do with “a situation of international price discrimination“. They prove to be a huge barrier for those European companies that have had to find an alternative to assembly in China and equally for all those trying to start a new e-bike business in Europe since the introduction of the measures.

    As for assembly in Europe, anti-dumping measures have become completely intertwined with the extension of anti-dumping measures on bicycle parts from China. Furthermore, the Commission has created a highly discriminatory legal distinction between companies that assemble both conventional and electric bicycles and those that assemble electric bikes only. Furthermore, the Commission has recently made it quite a bit more difficult to obtain an exemption for assembly of conventional and electric bicycles. The entire legislation is so complex that no manufacturer can be assumed to understand the rules on their own. Start-ups are forced to pay anti-dumping duties on electric bike components for quite a while, before obtaining the necessary authorization to be released from duties on components. Who can afford this?

    However, after having paid duties on e-bike components, which according to Sabine Weyand, Director General of DG Trade are not subject to anti-dumping duties, they are then subject to extensive financial guarantees.  In addition, shortly after introducing dumping duties on e-bikes from China, the European Commission also changed the rules of origin for imports of electric bikes from non-preferential origin countries overnight.

    In the meantime, both national customs authorities and OLAF are constantly investigating companies, electric bike imports and assembling facilities in and outside Europe. The companies involved usually have no idea what they are suspected/accused of, nor are they given any information about the progress of the case. Some, meanwhile, have been waiting for news for three years and live with the threat of fines that may push them into bankruptcy, sometimes even imprisonment!

    LEVA-EU has been working relentlessly to explain all legislation pertaining to this e-bike case. In meetings with the European Commission, we have explained the many aberrations an discrimination in the rules, the net result of which being that it’s virtually impossible to start-up a new e-bike business in Europe, while many existing businesses are under threat due to unfair rules. Ahead of the review, we will continue to do so. To this end, we want to draw up an inventory of as many cases as possible of European companies that are being investigated by customs and/or OLAF.

    So, are you or have you been investigated by customs and/or OLAF and are you or have you been accused of for instance:

    • Buying from a European supplier who is suspected of circumventing anti-dumping duties on electric bicycles from China
    • Not paying anti-dumping duties on bike components for e-bike assembly
    • Using incorrect HS codes to avoid anti-circumvention duties on bicycle components
    • Assembling in the EU or buying from an assembler without an exemption or end-use authorization
    • Illegal application of rules of origin for e-bikes that are produced outside the EU and China

    We kindly request you to report your problems to LEVA-EU. We guarantee absolute confidentiality. Cases may be reported to LEVA-EU Manager Annick Roetynck by phone, +32 475 500 588 or by mail, annick@leva-eu.com. Alternatively, you can also book an appointment at the forthcoming Eurobike, here: https://calendly.com/annick_leva-eu/eurobike-meeting

    Photo by John Simmons on Unsplash

  3. How Chinese anti-dumping measures impact EU import of e-bikes

    Comments Off on How Chinese anti-dumping measures impact EU import of e-bikes

    In 2019, Taiwan has taken the lead in the export of electric bicycles 25 km/h to the EU. Exports increased by 80% to almost 390,000. This was of course due to the imposition of anti-dumping duties on Chinese e-bikes. This forced companies assembling in China to move their operations. Some of them crossed the Formosa Strait to set up shop in Taiwan.

    Logically, the relocation of these e-bike assemblers accused of and punished for dumping should have resulted in Taiwan’s average export value being dragged down. Instead, it went up with 5.4% This further questions the very dubious Commission decision to penalize imports from China.

    In the meantime, efforts are continuing to make assembly of electric bicycles outside Europe more difficult. At the request of EBMA, in October last year, the European Commission has suddenly amended the rules of origin for countries with non-preferential status such as Taiwan: without prior warning and without a transition period. As a result, it is much more difficult to use Chinese parts in Taiwanese assembly. Thus, Europe tightens the thumbscrews on Taiwan without EBMA having to go through the difficult procedure of a circumvention complaint against the country.

    Apart from Taiwan (for the time being), very few non-EU countries seem to really benefit from the dumping. The growth percentages for Turkey, Malaysia, Indonesia and Cambodia, among others, are considerable, but the total export figures of these countries remain limited. In 2019, total export from non-EU countries declined 30% but increased in value by 38% from 602 to € 831. This value is very close to the average value of intra-EU imports for 2019: € ​​860. Total intra-EU imports increased by 47.4% to almost 2.3 million units.

    That indicates that much of the assembly was brought from China to Europe. And here too, the average value seriously questions the Chinese dumping measures. If dumping had actually been such that action had to be taken, the relocation of those assemblers would have led to a significant drop in intra-EU import values. Quod non. In 2019, it decreased only by 3.2% compared to 2018. Supporters of the dumping measures will no doubt point to the fact that a lot of assembly activities have been moved to the old continent. However, dumping measures have never been intended for relocation of production.

    Non-EU imports

    Country201720182019Change 2019/2018
    United Kingdom5,2585,37810,418+93.7%
    Total non-EU993,6631,091,610763,855-30%

    Average value of non-EU imports

    Country201720182019Change 2019/2018
    United Kingdom352581438-24.6%
    Total non-EU543602831+38%

    Intra-EU imports


    Average value of EU-imports

Campaign success

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

Member profile

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.