Notice amending the notice of initiation of an anti-subsidy proceeding concerning imports of continuous filament glass fibre products originating in Egypt

(2020/C 48/11)

On 7 June 2019, the Commission published a notice initiating an anti-subsidy investigation concerning imports of continuous filament glass fibre products originating in Egypt (1) (the ‘Notice of 7 June 2019’). In Section 3 of the Notice of 7 June 2019, the Commission explicitly reserved the right to investigate other relevant subsidies which may be revealed during the course of the investigation. During the investigation, the Commission has found additional evidence of relevant subsidies which were not included in that notice. Therefore, pursuant to Article 10(7) of Regulation (EU) 2016/1037 of the European Parliament and of the Council (2) (‘the basic Regulation’), the Commission considers it justified to include these subsidies within the scope of the current investigation and to amend accordingly the Notice of 7 June 2019. Further information can be found in a note to the file for inspection by interested parties.

1.   Additional subsidies under investigation

The relevant part of Section 3 of the Notice of 7 June 2019 reads as follows:

‘In addition to subsidies granted directly by the Government of Egypt, the complainant further alleges that the producers of the product under investigation from Egypt also benefit from subsidies granted directly by the Government of Egypt or via Egyptian entities in the context of the cooperation between Egypt and the People’s Republic of China to foster investments in a special economic zone (the China-Egypt Suez Economic and Trade Cooperation Zone). The complaint contains evidence of the cooperation agreements between the Chinese and the Egyptian Governments as well as of loans from Chinese State-owned or State-controlled entities to Egyptian State-owned banks. In view of the objectives of these agreements and loans, the complainant argues that such loans benefit the Chinese-owned exporting producer in Egypt.

The complainant further alleges that the above measures amount to subsidies because they involve a financial contribution from the Government of Egypt (including public bodies) and confer a benefit to the exporting producers of the product under investigation. They are alleged to be limited to certain enterprises or industries or group of enterprises and/or contingent upon export performance and are therefore specific and countervailable. On that basis, the alleged subsidy amounts appear to be significant for Egypt.’

The investigation revealed additional evidence with regard to the financial flows concerning preferential policy loans not reflected in Section 3 of the Notice of 7 June 2019. In particular, the Commission identified in the course of the investigation that in addition to loans mentioned in the complaint as channelled to exporting producers via Egyptian State-owned banks, there were loans granted by Chinese State-owned or State-controlled entities directly to the sole exporting producer in Egypt and indirectly via its related companies established in the People’s Republic of China. As this preferential financing may be attributable to the Government of Egypt, the Commission needs to also investigate them in the on-going proceedings.

The investigation also showed that that cooperation between the Government of Egypt and the Government of the People’s Republic of China may have influenced other subsidy practices, in addition to the transfer of funds through preferential lending (such as the provision of land for less than adequate remuneration). The Commission will further examine this element in this investigation.

Therefore, in accordance with Article 10(7) of the basic Regulation, the following text shall be added to the Notice of 7 June 2019 immediately after the text quoted above:

‘In the course of the investigation, the Commission identified additional evidence of preferential policy loans by Chinese State-owned or State-controlled entities, granted directly to Jushi Egypt and/or indirectly via the parent company of Jushi Egypt in the People’s Republic of China.

With respect to these loans, the Commission identified evidence that they involve a financial contribution that may be attributable to the Government of Egypt and confer a benefit to the exporting producer of the product under investigation. They appear to be limited to certain enterprises or industries or group of enterprises and/or contingent upon export performance and are therefore specific and countervailable. The amounts of these loans appear to involve significant subsidisation.

In the course of the investigation, the Commission also identified other elements in the cooperation between Egypt and the People’s Republic of China which may be relevant for the examination of other subsidy practices, such as the provision of land for less than adequate remuneration.’

2.   Procedural issues

2.1.   Procedure for the determination of subsidisation: exporting producers

In accordance with Article 10(7) of the basic Regulation, all interested parties concerned by the inclusion of these subsidies in the scope of the investigation (including the Government of the People’s Republic of China) are invited to make their views known in writing, submit information and to provide supporting evidence concerning these subsidies. In view of the limited scope of the investigation into the new subsidies, comments on these subsidies in the current anti-subsidy investigation should reach the Commission within 15 days from the date of publication of this Notice in the Official Journal of the European Union.

In order to obtain information it deems necessary for its investigation with regard to these new subsidies, the Commission will request additional information from the authorities of Egypt and of the People’s Republic of China, as well as from Jushi Egypt and its related companies in the People’s Republic of China. The replies to these requests must be provided within 15 days from the date of publication of this Notice. A copy of these requests is available in the file for inspection by interested parties.

A summary of the main elements concerning these subsides can be found in the file for inspection by interested parties.

The Government of Egypt has been invited for consultations.

2.2.   Hearings

Pursuant to Article 10(12) of the basic Regulation, all interested parties may also request a hearing by the Commission within 15 days from the date of publication of this Notice in the Official Journal of the European Union.

The timeframe for hearings set out in section 5.7 of the Notice of 7 June 2019 continues to apply in this investigation.

2.3.   Other procedural issues

The other procedural rules mentioned in sections 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 of the Notice of 7 June 2019 continue to apply to this investigation where relevant.

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(1)  OJ C 192, 7.6.2019, p. 30.

(2)  Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (OJ L 176, 30.6.2016, p. 55).