June 2, 2016 / 11:57 AM / 2 years ago

Russian steelmakers complain of bullying by EU officials

* Russian, Chinese firms hit with EU steel duties

* Two Russian firms allege bullying during EU probe

* EU officials decline to comment

* Russian firms deny dumping steel in EU market

By Philip Blenkinsop and Barbara Lewis

BRUSSELS, June 2 (Reuters) - Two of Russia’s largest steelmakers NLMK and Severstal have made formal complaints against two EU officials, alleging bullying during an EU investigation into whether China and Russia exported steel at unfairly low prices.

Tensions between Russia and Brussels have been high since Moscow’s seizure of Ukraine’s Crimea region in March 2014 that led to economic sanctions.

Ties have been further soured by an anti-dumping investigation into cold-rolled flat steel products following complaints from European producers that they face unfair competition from Russian and also Chinese rivals.

The Commission has imposed provisional anti-dumping duties on a number of Russian and Chinese companies - including for NLMK at the highest rate of 26.2 percent and Severstal at 25.4 percent. These were enforced even though the investigation is only set to close by August.

A letter from the Brussels office of international law firm Dentons Europe to the European Commission, seen by Reuters and dated May 31, alleges that two Commission officials carried out verification visits to NLMK “in such a way as to amount, cumulatively, to bullying, psychological harassment and perceived intimidation”.

The visits were aimed at gathering information for the investigation, the letter said. Such visits are normal practice during EC trade investigations.

The two EU officials at the trade directorate, case handler William De Ruyck and assistant case handler Jean-Michel Bindner, declined to comment when spoken to by Reuters.

A European Commission source said it was aware of the concerns raised by NLMK and held its staff to the highest ethical standards but had no further comment.

Complaints over EU trade investigations are normally about methodology or tariffs imposed rather than allegations such as those made by NLMK and Severstal.

In an emailed statement sent to Reuters, NLMK said the Commission’s investigation into imports of cold-rolled flat steel products was conducted with “flagrant violations of all possible norms and standards, as filed in a separate complaint to the European Commission”.

NLMK said the decision to impose the duties was absurd and it denied allegations it was dumping steel, or selling it at below cost price, on the EU market.

NLMK said it employs over 2,000 people in the European Union and continues to invest in developing its EU operations.

Severstal confirmed it had sent a letter of complaint about the behaviour of two EU officials, adding that it had cooperated fully with the investigation and had not engaged in dumping.

Dentons office in Brussels was not immediately available for comment. (Additional reporting by Jack Stubbs in Moscow; Editing by Susan Fenton and Alexander Smith)

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