In December 2020, the Eurasian Economic Commission held a hearing on the sunset review of anti-dumping measures against oil well pipes in China. This case is the first sunset review initiated by the Eurasian Economic Union on exporters' price commitments.

As a background, in the 2014-2015 Eurasian Economic Union anti-dumping investigation on oil well pipes in China, the China Iron and Steel Industry Association obtained price commitments for the major export enterprises responding to the lawsuit through a non damaging defense, and the export products within the scope of the commitments will not be affected by anti-dumping measures. This case is the first time that a Chinese enterprise and the Eurasian Economic Commission have properly handled a trade remedy case through price commitment, which has preserved part of its export share and effectively safeguarded the export interests of Chinese enterprises. On May 13, 2020, the Eurasian Economic Commission initiated a sunset review of anti-dumping measures against oil well tubing based on the application of Russian steel companies such as TMK (collectively referred to as the "Applicants") to determine the anti-dumping measures to be applied to Chinese products in the next five years. In this investigation, lawyer Qian Wenjie, a partner of Gaopeng Law Firm, once again represented the China Iron and Steel Association and major export enterprises in a harmless defense.

Since the filing of the case, many Chinese companies have consulted us on the review of price commitments. The main issues are summarized and analyzed as follows for your reference.

1、 Changes brought about by sunset review on current anti-dumping measures for oil well pipes

According to the relevant legislation of the Eurasian Economic Union, the Eurasian Economic Commission will decide to extend or withdraw existing anti-dumping measures during the sunset review. Due to the strong demand of the domestic industry in this case for a tax on Chinese products, this review is expected to continue to apply the existing anti-dumping tax rate in the next five years. On the other hand, as this case is the first sunset review of price commitments by the Eurasian Economic Commission, there is no precedent to follow. The investigating authority may maintain or adjust the implementation plan of price commitments based on the review results.

2、 Enterprises that need to respond in the sunset review

For enterprises that have participated in price commitments, they have the obligation to continuously cooperate with the implementation of the commitments. In addition, the Eurasian Economic Commission will determine the specific terms of future price commitments (such as export quantities and minimum prices) based on the findings of the sunset review. Therefore, these enterprises should actively respond to the lawsuit during the sunset review in order to maintain or even optimize the current price commitment scheme.

For enterprises that have not previously participated in price commitments, whether to respond to a lawsuit does not affect the current anti-dumping tax rate. Of course, if such enterprises submit an application for price commitment to the investigating authority during the review period, they need to actively respond to the lawsuit. However, there is considerable uncertainty as to whether the Department of Protection will allow them to participate in the commitment.

3、 Response process for Eurasian sunset review

The process of the Eurasian sunset review is similar to the original investigation, including filing, hearing, disclosure of dumping margin, and final determination. In June 2020, the investigation authority sent a dumping questionnaire to major export producers, requesting them to fill in production and export data of the products under investigation during the investigation period. In December 2020, the investigating authority organized a hearing on the case. In order to avoid the risk of the epidemic, this hearing replaces on-site participation by submitting written comments from interested parties. At the same time, the investigating authority disclosed the calculation documents of the dumping margin to the responding enterprises. It is expected that the Eurasian Economic Commission will issue a final ruling on this case in May 2021, announcing the anti-dumping measures to be implemented in the next five years.

4、 The key to the sunset review of enterprises responding to lawsuits

As mentioned earlier, the sunset review initiated by the Eurasian Economic Union will not recalculate the anti-dumping tax rate, but the investigating authority may revoke, maintain, or adjust the price commitment. Therefore, for enterprises that have already participated in price commitments, in addition to actively responding to lawsuits, reducing the dumping margin by filling in a volume will help maintain or even lower the minimum price in price commitments, so as to have more flexible pricing power in the export process.

For other companies seeking price commitments, it is not clear whether the Protection Department will agree to their participation in the commitments. However, it can be determined that the probability of successful filing of the application at the initial review stage is significantly higher than that at the sunset review stage, as we have already secured two precedents in favor of China: oil well tubing and galvanized steel plate. To sum up, when an export enterprise first encounters a Eurasian anti-dumping investigation, it must actively respond to the lawsuit in order to lay a solid foundation for subsequent price commitment negotiations.

(This article is translated by software translator for reference only.)