Viewpoint | Exploring the Countermeasures of Chinese Enterprises to Deal with EU Countervailing
Published:
2024-04-03
With the changes in the global trade environment and the adjustment of laws and regulations, the operating environment of cross-border enterprises in the EU market will also change. In the future, companies need to pay close attention to the changes in EU regulations and flexibly adjust their business strategies to cope with the changing legal environment and market needs.
On February 16, local time, the European Union announced the launch of an unprecedented investigation into CRRC Qingdao Sifang Locomotive and Rolling Stock Co., Ltd. (hereinafter referred to as "CRRC Qingdao Sifang"), a subsidiary of CRRC Corporation Limited (hereinafter referred to as "CRRC"). On March 26, local time, the European Commission announced that it would stop the investigation of foreign subsidies to CRRC Qingdao Sifang. This decision was based on the company's withdrawal from the public procurement bidding of the Bulgarian Ministry of Transport and Communications.
This incident involves the impact of EU countervailing regulations on cross-border EU trade of Chinese enterprises. With the change of global trade environment and the adjustment of laws and regulations, the business environment of cross-border enterprises in the EU market will also change. In the future, companies need to pay close attention to the changes in EU regulations and flexibly adjust their business strategies to cope with the changing legal environment and market needs.
Application of EU Countervailing Regulation
The EU has formulated a series of countervailing regulations, which stipulate the definition of subsidies, investigation procedures, standards and procedures for the collection of countervailing duties. In order to maintain fair competition in the EU market, the EU takes measures to prevent countries or enterprises from subsidizing products, thus affecting market competition and the healthy development of international trade. Specifically, the EU's countervailing policy is mainly reflected in the following aspects:
1. Countervailing investigation (Anti-subsidy Investigation)
Countervailing investigation is a trade remedy investigation launched by the European Commission against foreign enterprises or national governments subsidizing export products in the EU market.
The European Commission can investigate products or businesses suspected of receiving unfair subsidies based on complaints or self-discovered leads. The scope of the investigation includes the amount of subsidy, the object of subsidy, the form of subsidy, etc., to determine whether there is subsidy behavior.
The process of countervailing investigation usually includes the following steps:
2. Anti-subsidy Duties
If an investigation confirms that a country or an enterprise has unfairly subsidized a product, the EU can impose countervailing duties on it. The calculation of countervailing duties in the EU is based on the findings of the investigation and relevant regulations, and aims to compensate for the material damage caused by the subsidized behavior to the EU market and to maintain a level playing field in the market. The following steps and methods are usually involved:
3. Subsidy declaration
The EU requires member states and enterprises to declare the subsidies received, maintain transparency and disclose subsidy information to the public and relevant parties. This helps to monitor and assess the compliance and impact of subsidy policies. The procedure for reporting is usually as follows:
Exploring the potential reasons for the EU's anti-subsidy investigation into CRRC Sifang Qingdao
The EU's countervailing investigation into CRRC Sifang Qingdao should be based on EU countervailing rules, which may mainly consider the following aspects:
Suggestions for Chinese Enterprises to Deal with EU Countervailing Policy
When dealing with the EU countervailing investigation, Chinese enterprises need to use comprehensive strategies to minimize the risk of countervailing investigation, avoid possible negative effects, protect the legitimate rights and interests of enterprises, maintain the international reputation and market competitiveness of enterprises, and promote long-term sustainable development. Counsel recommends the following:
Summary
With the changes and development of the global trade environment, the EU's countervailing policy may become more stringent, and the impact on Chinese companies will be more profound. Therefore, Chinese companies need to continuously improve their compliance capabilities and competitiveness, strengthen communication and cooperation with relevant EU institutions and industry organizations, jointly respond to challenges, and achieve sustainable development and long-term stable operations. At the same time, enterprises can also actively seek innovative development, expand new markets and business areas, realize diversified development strategies, and ensure the long-term development and competitive advantages of enterprises.
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