EU Lightbulb Duties Now Facing Court Challenge

BELGIUM: October 15, 2007

BRUSSELS - The European Commission is facing a court challenge to its controversial anti-dumping duties on imports of energy-saving light bulbs from China, a lawyer said on Friday.

A decision by the European Union executive to extend the duties by one year, after a long dispute, is set to be rubber-stamped by EU ministers on Monday.

But an Italian lighting firm, Targetti Sankey, has now filed a challenge arguing that an investigation of the issue by the Commission was flawed and the dumping decision should be annulled.

Targetti was also readying to file a damages case, once the ministers approve the one-year extension, Maurizio Gambardella, a lawyer for Targetti, said.

The move could reopen an issue which has led to criticism of EU executives by environmentalists, EU governments, trade lawyers and companies.

The duties push up the price of energy-saving bulbs from China by as much as 66 percent, at time when the EU is chasing ambitious energy savings targets to fight climate change.

"A positive outcome in the case would have far-reaching implications for the EU," said Gambardella.

"On the one hand, the new regulation for extending the duties would be declared void. On the other, all importers would be able to claim back from the EU hundreds of millions of euros in duties paid since 2001," Gambardella said.

Targetti alone has spent about US$5 million a year since 2003 importing energy-saving lamps from a unit in China, he said.

The duties of up to 66 percent were supposed to expire in 2006. Germany's Osram, part of Siemens, last year asked for them to be renewed for five more years, triggering a row with rival producers which import larger amounts of the bulbs, such as Philips, and wanted the duties axed.

In the end, the Commission came up with a compromise one-year extension of the duties.

Gambardella said Targetti filed a case in a British tax tribunal last month arguing the Commission's investigation in 2001 was flawed and the dumping decision should be annulled.

He said the court might refer the case to the EU's highest court, the European Court of Justice, in early 2008, and Targetti would also file a damages case after ministers had approved the extension.

The European Commission declined to comment.

REUTERS NEWS SERVICE