To take anti-dumping action, a Commission investigation must first show that an exporter is selling a product in the EU at a price that is lower than the price charged by the exporter in its home market (dumping). Then the Commission must show that these dumped products are causing damage to the European industry which is manufacturing the product in question. Finally, in order to impose measures the Commission also has to determine that those measures are not against the wider Union interest. The Commission has 15 months to complete an investigation, and the measures imposed are aimed at ensuring a level playing field.
If there is evidence of unfair trade practices, the EU has three kinds of duties it can impose on the non-EU importer usually for five years, subject to review:
1. Ad valorem duty – a percentage of the import price. This is the most common form of action.
2. Specific duty – a fixed value for a certain amount of goods, e.g. €100 per tonne of a product.
3. Variable duty – a minimum import price (MIP). Importers in the EU do not pay an anti-dumping duty if the foreign exporter’s export price to the EU is equal to or higher than the MIP.
Note that a minimum import price is not meant to fix prices but rather to prevent them from falling below a certain minimum level.