January 25, 2018 / 2:16 PM / a year ago

REFILE-EU set to launch subsidy inquiry into Argentine biodiesel

(Corrects spelling error in headline and first paragraph)

BRUSSELS, Jan 25 (Reuters) - The European Commission will next week launch an investigation into whether Argentine producers exporting biodiesel to the bloc are benefiting from unfair subsidies, people familiar with the case said.

The Commission, which oversees trade policy across the 28-nation bloc, is expected to launch the investigation on Jan. 30 or 31 in response to a complaint from the European Biodiesel Board (EBB).

The Commission declined to comment.

The new investigation would offer another channel for imposing effective tariffs on imported biodiesel as Argentina, and Indonesia, both major producers, have mounted successful challenges to EU anti-dumping duties, which were set for five years in 2013.

The General Court of the European Union, the second-highest EU court, delivered a series of rulings in September 2016 to annul those duties. The EU initially appealed the ruling, but decided on Monday to withdraw that appeal.

Argentina also won a case against the EU anti-dumping duties on its biodiesel filed to the World Trade Organization. Indonesia’s case at the WTO is pending.

The European Commission subsequently cut the anti-dumping duties for Argentinean biodiesel last year to between 4.5 and 8.1 percent from initial rates of 22-25.7 percent. The rates for Indonesia remain those set in 2013 - between 8.8 and 20.5 percent.

The European Union’s case was based on export duties both countries impose on the raw material, soybeans in the case of Argentina and palm oil for Indonesia. The EU view was that this gave an unfair advantage to biodiesel producers there, allowing them to “dump” product at unfairly low prices.

Argentina and Indonesia called the anti-dumping duties protectionist.

The European Commission did start an investigation in 2012 into alleged subsidies in the sector for both Argentina and Indonesia, but terminated it in 2013 after the EBB withdrew its complaint.

The termination came on the same day as the announcement that the EU would be imposing definitive anti-dumping duties on imports. (Reporting by Philip Blenkinsop, editing by Pritha Sarkar)

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