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Legal Battle Ends in Registration of Imports from City Cycle Industries

Laws & Regulations 1808

BRUSSELS, Belgium – A legal battle has been fought between the European Bicycle Manufacturers’ Association (EBMA), Bulgarian bike maker Maxcom Ltd, the Council of the European Union as well as the European Commission and the Sri Lankan company City Cycle Industries. It has all been about stricter circumvention regulations which now has brought about a win by EBMA.

Legal Battle Ends in Registration of Imports from City Cycle Industries
European Commission ruled that bicycle import from Sri Lankan City Cycle Industries is subject to registration by custom authorities. – Photo Bike Europe

This battle started with the March 19, 2015 ruling by the Court of Justice of the European Union which claimed there was insufficient proof for the Sri Lankan company City Cycle Industries and Chin Haur Indonesia carrying out transshipment operations.

EU High Court verdicts

This ruling was appealed and bought about the January 26, 2017 verdict by EU High Court in Luxembourg that claimed that Chin Haur Indonesia has been involved in transshipment operations. Parties involved in this court case said that Chin Haur has been circumventing the 48.5% anti-dumping duty with completely knocked down bicycles it got from Fushida in China. However, this verdict also said that Sri Lankan City Cycle Industries has not been not circumventing.

With the outcome of this legal battle EBMA teamed up with the European Commission to amend its circumvention regulations.

Stricter regulations on circumvention

The European Bicycle Manufacturers’ Association’s fight for stricter regulations on circumvention has resulted in the European Commission imposing the 48.5% anti-dumping on the import whether declared as originating in Sri Lanka or not on City Cycle Industries. The European Commission has ruled that bicycle import from this company is subject to registration by the custom authorities. This registration is to allow further investigation as, according to insiders, there’s the possibility for City Cycle to start again a massive circumvention as the company is said to import on a CKD basis from China. It opens the possibility for the European Commission to formally re-open a brief re-examination of the investigation on City Cycle to probably re-affirm the findings of the Commission investigators of clear circumvention.

According to the EBMA this means that European importers of bicycles from City Cycle have an extremely strong possibility to have to pay 48.5% anti-dumping duty next to the regular 10.5% import duty.

Next to transshipment operations EU’s stricter regulations on circumvention is aimed at ‘screwdriver’ operations. In particular as the fundamental rule of the anticircumvention regulation is to respect 60 – 40 local content. It means that a maximum of 60% Chinese parts are allowed to be used.

By the way, on June 5, 2013 the European Union has extended the anti-dumping duties on bicycles (next to China) to  Indonesia, Malaysia, Sri Lanka, & Tunisia. From that date an anti-dumping duty of 48.5% is levied on bicycles imported into the European Union originating from Indonesia, Malaysia, Sri Lanka and Tunisia. Seven companies based in these countries are exempted from this duty. These are:

From Indonesia:

  • P.T. Insera Sena
  • PT Wijaya Indonesia Makmur Bicycle Industries (Wim Cycle),
  • P.T. Terang Dunia Internusa, (United Bike)

From Sri Lanka:

  • Asiabike Industrial Limited
  • BSH Ventures (Private) Limited
  • Samson Bikes (Pvt) Limited
  • From Tunisia:
  • Euro Cycles SA
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