Cracking the code

Date: 29/03/01

Dumping experts cite many reasons for the practice. Foreign exporters, with a lower cost base, may need to 'offload' a surplus of goods that can no longer be sold at home or in traditional markets. The least likely cause, they say, is the classic argument that foreign firms sell goods below their home market price to put EU producers out of business.

How the system works

Industry complains it has suffered 'injury' from dumped goods sold for less than the price on the producers' home market. For example loss of market share, profits or productivity. (Complaints have to represent at least 25% of the EU production of the goods in question.)

The Commission has 45 days to decide whether to take up the complaint. It then has a 'window' of 60 days to nine months in which it may impose provisional duties of six to nine months after consulting a committee of member state diplomats.

The Commission terminates the probe or proposes definitive duties. If it proposes duties, it must find a material injury to Community industry. The costs for the Union of taking measures must not be disproportionate to the benefits.

The Council of Ministers takes ultimate decision whether to support Commission and impose duties for five years.

The decision is open to challenge in the European Courts.