Anti-dumping: A French manufacturer of electric bikes risks bankruptcy

Arnof Haddouk, president of Vélobécane, a French electric bike specialist, is risking of losing his company “because” of customs.

Vélobécane has today 11 containers blocked at the port of Antwerp and they’re facing a 600 000 € fine which has to to be paid to be able to release these containers which contain all the components coming from China to allow Arnof’s company to face the bicycle season.

The reason?

An infringement of the anti-dumping law, according to the Belgian authorities. According to the Belgian customs, Velobecane imports bikes ready to be assembled and are therefore subject to anti-dumping rules.

What are these rules?

A product is dumped when companies in the exporting country sell it at a price below its normal value. Normal value is generally based on the price at which the product is sold in the domestic market of the exporting country.

The level of dumping or “dumping margin” is therefore the difference between what is considered to be the normal value of the product, which is based on the price in the domestic market of the exporting country, and the export price of the same product.

According to Arnof, the Belgian authorities are making a wrong interpretation, because article 13 of this regulation explains that if the parts come from China they must not exceed 60% of the assembled product, except if the value added to the components integrated during the assembly or finishing phase is more than 25% of the manufacturing cost, which, according to Arnof, is the case of Velobecane.

Moreover, the risks are only increasing, as the president of Velobecane has stated that he is waiting for 5 new containers, which would make a total of 16 blocked containers and a fine of nearly 750,000 €.

The president says he is desperate, with the closure of his factory, he’s losing100 000 € per month. Another example that shows us not only the importance, impacts and consequences that customs can have on the economic health of a company, but also how customs is a product in its own right.

It is therefore necessary to take this factor into consideration and to master it well when making procurement choices.