Countervailing duty
Additional customs duty imposed to neutralize the effect of subsidies granted by a third country to its exporters.
Countervailing duty
A countervailing duty is an additional customs duty imposed by the EU on imported products to neutralize the effect of subsidies granted by the government of the exporting country to its producers or exporters.
Distinction from anti-dumping duty
The anti-dumping duty targets corporate pricing practices (selling below normal value). The countervailing duty aims at a public policy of the exporting country (subsidizing its companies). The two can be combined.
Types of subsidies targeted
Production subsidies, export subsidies, provision of goods or services by the state on favorable terms, preferential loans, state guarantees and specific tax breaks.
Procedure
The European Commission is carrying out an investigation to establish the existence of the subsidy, the damage caused to European industry and the causal link. The investigation generally lasts 12 to 15 months.
Duration
The compensatory measures are imposed for 5 years, renewable after re-examination.
Impact for importers
Countervailing duties are in addition to normal customs duties and any anti-dumping duties. They can be consulted in the TARIC database.