Judgment of the General Court (Tenth Chamber, Extended Composition) of 4 December 2024.PGTEX Morocco v European Commission.Subsidies – Extension of the definitive countervailing duty imposed on imports of certain woven or stitched glass fibre fabrics originating in China to imports of those products consigned from Morocco – Anti-circumvention investigation – Circumvention – Euro-Mediterranean Association Agreement EC-Morocco – Article 33(a) of Regulation (EU) 2016/1037 – Misuse of powers – Conditions which must be met in order to establish circumvention – Article 23(3) of Regulation 2016/1037 – Change stemming from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty – Assembly operations – Completion operations – Concept of ‘value added’ – Like imported product or parts of that product continuing to benefit from the subsidy – Error of law – Manifest error of assessment – Principle of non-discrimination – Equal treatment – Principle of good administration – Article 28(1) and (3) of Regulation 2016/1037 – Use of the facts available.Case T-246/22.

This judgment concerns a case where PGTEX Morocco challenged the EU Commission’s decision to extend countervailing duties on glass fiber fabrics (GFF) from China to imports from Morocco. The key points are:1. The Commission found that PGTEX Morocco was circumventing Chinese countervailing duties by assembling GFF in Morocco using Chinese materials that benefited from subsidies.2. The main issues were whether:

• The EU-Morocco Association Agreement prevented extending duties to Moroccan origin goods
• There was sufficient economic justification for PGTEX’s Moroccan operations beyond avoiding duties
• The manufacturing in Morocco constituted assembly operations
• The Chinese subsidies still benefited the Moroccan products

3. The Court upheld the Commission’s decision, finding that:

• The Association Agreement does not prevent anti-circumvention measures
• The timing and circumstances suggested PGTEX’s Moroccan operations were mainly to avoid duties
• The manufacturing constituted assembly/completion operations
• The Chinese subsidies continued benefiting the products through related company transactions

The case is important for Ukraine as it demonstrates how the EU can extend trade defense measures to prevent circumvention through third countries, even those with preferential trade agreements. This could affect Ukrainian companies involved in processing/assembly of goods subject to EU trade measures.

Full text by link