15 July 2019
EU Clarifies Interest Rate in Cases of Reimbursement of Duties Relating to Trade Defence Measures
On 4 July 2019, a Notice on the payment of interest in the case of reimbursement of duties relating to trade defence measures was published in the Official Journal. The Notice is relevant where, for example, an anti-dumping measure targeting Chinese mainland imports is declared invalid, or is annulled by the Court of Justice. Those who have paid taxes or duties pursuant to the annulled regulation have the right, in principle, to obtain not only the repayment of those taxes or duties but also interest on those amounts.
According to the newly published Notice, the European Commission initially set the interest rate to be paid in case of reimbursement following a final judgement by the Court of Justice as the rate applied by the European Central Bank to its principal refinancing operations, increased by one percentage point. For the sake of clarity, the Commission began to include provisions on the applicable interest rate in its implementing regulations imposing trade defence measures (i.e., anti-dumping, countervailing, and safeguard measures).
Then, on 2 August 2018, a new Regulation (EU, Euratom) 2018/1046 entered into force, on the EU’s general budget. Article 109 of this new Regulation stipulates that “when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union. …, the interest rate shall be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month. The interest rate shall not be negative. The interest shall run from the date of payment of the amount to be reimbursed until the date at which the reimbursement is due.” It is also stipulated there that “in cases where the overall interest rate would be negative it shall be set at zero percent.”
Traders should be aware that, in consequence, for imports cleared for free circulation on 2 August 2018 or after that date, when an amount is to be reimbursed following a final judgment by the Court of Justice, the applicable interest rate should be that applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.
It is also noteworthy that imports cleared for free circulation prior to 2 August 2018 are not subject to Article 109 of Regulation (EU, Euratom) 2018/1046. In consequence, if specified, the interest rate set out in the respective implementing regulation applies to such imports.
As a result of the above, the relevant provisions in all anti-dumping, anti-subsidy and safeguard implementing regulations targeting various imports have been replaced by Article 109 of Regulation (EU, Euratom) 2018/1046 from 2 August 2018. For ease of reference, the Commission’s Notice includes in its Annex a list of all implementing regulations amended by Article 109 of Regulation (EU, Euratom) 2018/1046. Hong Kong sellers with interests in mainland China may like to know that the following implementing regulations have been amended:
- Anti-dumping regulation on lever arch mechanisms from mainland China;
- Safeguard measures regulation on steel products;
- Anti-dumping regulation on imports from Hubei Xinyegang Steel Co. and seamless pipes and tubes of iron or steel from Mainland China;
- Anti-dumping regulation on cast iron articles from mainland China;
- Anti-dumping regulation on corrosion resistant steel from mainland China;
- Anti-dumping regulation on steel ropes and cables from mainland China;
- Anti-dumping regulation on oxalic acid from India and mainland China;
- Anti-dumping regulation on tartaric acid from mainland China;
- Anti-dumping regulation on chamois leather from mainland China.
For companies affected by these and future trade defence regulations, the change of interest rate (following a final judgement by the Court of Justice when the duties that were levied need to be reimbursed) will change their legal position negatively. While all of the implementing regulations had set the interest rate at the rate applied by the European Central Bank to its principal refinancing operations increased by at least one percentage point, the interest rate now will be the rate applied by the European Central Bank without any increase.