European Community rules to deal with dumping date back to the organisation's earliest days. They are targeted at dumped imports which cause significant injury to Community producers. If left unchallenged, dumping gives the third country exporter an unfair competitive advantage which could be exploited with considerable negative consequences for the Community industry.

Existing Community rules were replaced by a new Anti-Dumping regulation which came into force on 1 January 1995. This in turn was updated by Regulation 384/96, which came into force on 6 March 1996. This Regulation incorporates measures agreed in the Uruguay Round of the GATT. It also imposes strict time limits for the completion of investigations and decision-making to ensure that complaints are dealt with rapidly and efficiently.

Dumping is often seen to relate to any cheap or below-cost imports, but the reality is more complicated. The 1996 Anti-Dumping Regulation provides for the imposition of anti-dumping duties, but only when the following conditions are met:

• a finding of dumping: the export price at which the product is sold on the Community market is shown to be lower than the price on the producer's home market;
• a material injury to Community industry: the imports have caused or threaten to cause damage to a substantial part of the industry within the EC, such as loss of market share, reduced prices for producers and resulting pressure on production, sales, profits, productivity etc.;
• the interests of the Community: the costs for the Community of taking measures must not be disproportionate to the benefits.

The European Commission is responsible for investigating complaints and assessing whether they are justified. The Commission can also impose provisional measures, and definitive measures for coal and steel products. In all other cases, it is the Council of Ministers which imposes definitive anti-dumping duties.

When an industry in the Community considers that dumped imports from non-EU countries are causing it material industry injury, it may submit a complaint to the European Commission, either directly or through its national government. The Commission then has 45 days to examine the complaint, consult the member states (represented on an Advisory Committee) and decide whether or not there is enough evidence to merit a formal investigation. The case will be rejected if there is not enough evidence or if the complainants do not represent at least 25 % of the total EC production of the product in question.

The Commission's investigation will cover whether or not dumping is taking place, which can be a complex calculation, and also whether dumped imports are causing material industry to Community industry. Measures may also be imposes if imports are hindering the establishment of a new industry within the Community, or there is a clear and imminent threat of material injury. The investigation normally takes no more than a year, and in any case must be completed within 15 months.

Anti-dumping measures will only take place if they are shown to be in the broader Community interest. Producers, importers, users and consumers are able to present their views. The member states must then be consulted, and then the Commission may, within 60 days to nine months, impose provisional duties. They must not exceed the dumping margin (the difference between the price on the home market and the price charged on the EC market). These may last for six to nine months. After that, when the Commission has completed it's full investigation, it may, after further consultation with the member states, impose definitive duties. Only the Council of Ministers has the authority to decide upon these. Definitive duties are valid for five years before they expire. If, however, Community producers demonstrate that removal of duties is likely to lead to renewed duties and dumping, the Commission may reopen its investigation. This may also happen if the imposition of duties does not have the desired effect of removing the injury, for example because the exporter has absorbed the extra costs, or the pattern of trade has changed. This may result in changes in the level of duties. A Regulation imposing anti-dumping duties may be challenged in the European Court of First Instance, and the WTO dispute settlement procedure may be used to settle disputes between WTO signatories.

Products covered by the expired ECSC Treaty (coal and steel)

Until 23 July 2002 there were two different categories of products subject to the trade defence instruments, ECSC products and EC products. This distinction was due to the existence of two different Treaties, ECSC and EC Treaties. For ECSC products, the anti-dumping action was governed by the Commission Decision No 2277/96/ECSC. The ECSC Treaty expired on 23 July 2002. After this date, products formerly covered by the ECSC Treaty are covered by the EC Treaty. Consequently, since 23 July 2002, anti-dumping action for former ECSC products is carried out also in line with action for those products on the basis of the basic anti-dumping Council Regulation, (EC) No 384/96, adopted pursuant to Article 133 of the EC Treaty. This has been clarified by Council Regulations (EC) 963/2002 and 1310/2002 laying down transitional provisions concerning anti-dumping and anti-subsidy measures, investigations, complaints and applications as regard former ECSC products.