CELEX: 62016TJ0310
Dumping
Imports of ceramic tiles originating in China
Article 11(4) and (5) and Article 17 of Regulation (EC) No 1225/2009 (now Article 11(4) and (5) and Article 17 of Regulation (EU) 2016/1036)
Refusal to grant new exporting producer treatment in accordance with Article 3 of Implementing Regulation (EU) No 917/2011
Sampling
Individual examination
Confidentiality

Background to the dispute
The applicant, Foshan Lihua Ceramic Co. Ltd, established in Foshan City (China), is a producer of ceramic tiles. It is part of the Foshan Lihua group.
On 12 September 2011, the Council of the European Union adopted Implementing Regulation (EU) No 917/2011 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of ceramic tiles originating in the People’s Republic of China (
OJ 2011 L 238, p. 1
, ‘the Definitive Regulation’). The anti-dumping duty rates were based on dumping margins established by the investigation that led to the imposition of those definitive measures (‘the initial investigation’), since they were lower than the injury margins.
During the initial investigation, the European Commission had recourse to sampling, in accordance with Article 17 of Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (
OJ 2009 L 343, p. 51
), as last amended by Regulation (EU) No 37/2014 of the European Parliament and of the Council of 15 January 2014 amending certain regulations relating to the common commercial policy as regards the procedures for the adoption of certain measures (
OJ 2014 L 18, p. 1
), (‘the Basic Regulation’) (replaced by Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (
OJ 2016 L 176, p. 21
)). The exporting producers that were sampled were granted individual treatment, in accordance with Article 9(5) of the Basic Regulation (now Article 9(5) of Regulation 2016/1036) and were charged anti-dumping duties at rates specific to them individually. The exporting producers that cooperated in the initial investigation but were not included in the sample, along with one exporting producer that was included in the sample but was not granted individual treatment, were charged anti-dumping duty at a rate corresponding, in accordance with Article 9(6) of the Basic Regulation (now Article 9(6) of Regulation 2016/1036), to the weighted average of the sampled exporting producers’ dumping margins, that is to say 30.6%. Requests for individual examination pursuant to Article 17(3) of the Basic Regulation (now Article 17(3) of Regulation 2016/1036) were submitted by eight cooperating exporting producers. It was decided that an individual examination should be carried out for one of those exporting producers, as it was not unduly burdensome for the Commission to do so. The exporting producer in question was by far the largest of the eight exporting producers claiming individual examination. However, following final disclosure, it transpired that the exporting producer in question had not provided certain necessary information, and so the findings relating to it were established on the basis of the facts available, in accordance with Article 18 of the Basic Regulation (now Article 18 of Regulation 2016/1036). The exporting producer in question and the exporting producers that had not cooperated in the initial investigation were charged anti-dumping duty at a rate that was calculated by reference to the highest of the dumping margins found for a representative product type from a cooperating exporting producer, that is to say 69.7%.
The applicant did not take part in the administrative procedure which led to the adoption of the Definitive Regulation, and so its name does not appear in Annex I to the Definitive Regulation. Its imports of the product concerned were therefore subject to anti-dumping duty at the rate of 69.7%.
By letter of 7 September 2013, the applicant asked the Commission to carry out an interim review, limited to the dumping, in accordance with Article 11(3) of the Basic Regulation (now Article 11(3) of Regulation 2016/1036). The reason for that request was that the applicant had put in place a new distribution system, via an associated undertaking, and had introduced a new type of product that had not existed in the period from 1 April 2009 to 31 March 2010 (‘the initial investigation period’). The applicant indicated in its request for a review that it had not taken part in the initial investigation, since it had been unaware of the final destination of its products, which, during the initial investigation period, it had sold only through the intermediary of a Chinese trading company.
The Commission replied to the applicant’s letter on 25 October 2013. In its reply, the Commission gave the applicant general and preparatory information concerning in particular reviews in connection with the grant of new exporting producer treatment in accordance with Article 3 of the Definitive Regulation.
Article 3 of the Definitive Regulation provides as follows:
‘Where any producer from [China] provides sufficient evidence to the Commission that it did not export the goods described in Article 1(1) originating in [China] during the period of investigation (1 April 2009 to 31 March 2010), that it is not related to an exporter or producer subject to the measures imposed by this regulation and that it has either actually exported the goods concerned or has entered into an irrevocable contractual obligation to export a significant quantity to the [European] Union after the end of the period of investigation, the Council, acting by simple majority on a proposal by the Commission, after consulting the Advisory Committee, may amend Article 1(2) in order to attribute to that producer the duty applicable to cooperating producers not in the sample, i.e. 30.6%.’
By letter of 28 February 2014, the applicant reiterated its request for an interim review pursuant to Article 11(3) of the Basic Regulation and, as a subsidiary request, asked for the initiation of a new exporting producer treatment review (‘NEPT review’) under Article 3 of the Definitive Regulation. It stated inter alia in its letter that, during the initial investigation period, it had sold all of its output to a single trading company and that it had not known of the final destination of its products. It accepted that some of its tiles may have been exported to the European Union by that trading company and by that trading company’s partners, but stated that it did not know in which manner this was done. It also pointed out that it was not related to any of the companies that were subject to the anti-dumping duties in question and that it had entered into an irrevocable contractual obligation to export its products in the very near future.
By letters of 8 April, 2 June and 17 June 2014, the applicant reiterated its requests for an interim review and the grant of new exporting producer treatment. In that context, it stated that it had not made ‘direct exports’ to the European Union and that it was the victim of discriminatory treatment in relation to one of its competitors that had requested and obtained an interim review and it advised the Commission that it might bring an action against the Commission for failure to act if it did not adopt an appropriate decision.
By letter of 3 September 2014, the Commission replied that all the information required by law needed to be submitted in order for it to be able to proceed with the initiation and conclusion of the interim review investigation, clarified a number of points relating to the review procedure and concluded that it did not yet have all the necessary documents. In its letter, the Commission invited the applicant to complete the questionnaire for applications for the status of trader operating under market-economy conditions, provided for in Article 2(7)(c) of the Basic Regulation (now Article 2(7)(c) of Regulation 2016/1036). The Commission also invited the applicant to submit evidence supporting its allegations that it had not exported to the European Union during the initial investigation period, that it was not related to any of the undertakings subject to the anti-dumping measures in question and that it had entered into a contract to supply the goods in question after the export period. It confirmed that, if the conditions for the application of Article 3 of the Definitive Regulation were met, the applicant would become subject to the same rate of anti-dumping duty as exporting producers that had cooperated in the initial investigation but had not been included in the sample, that is to say 30.6%.
The applicant answered by letter of 9 October 2014, in which it argued that the Commission was imposing on it a burden of proof that went beyond the legal requirements. The applicant also requested that it be granted interested party status in relation to the interim review concerning one of its competitors.
On 18 December 2014, the applicant was granted interested party status and was sent the disclosure documents.
By letter of 11 December 2014, the applicant provided more information in connection with its request for an NEPT review and, subsidiarily and alternatively, for an interim review. The applicant also sent the questionnaire relating to the status of trader operating under market-economy conditions. It stated that it agreed, as a temporary solution, to the application of the same rate of anti-dumping duty as that for the exporting producers that had cooperated in the initial investigation but were not included in the sample. It nevertheless maintained that it was entitled to an individual examination.
By letter of 6 February 2015, the Commission confirmed that it was analysing the file which the applicant had submitted to it on 11 December 2014. It also asked the applicant to confirm that it agreed to new exporting producer treatment, in accordance with Article 3 of the Definitive Regulation, and that, in parallel, it was maintaining its request for an interim review.
By letter of 10 February 2015, the applicant confirmed that it agreed to be treated as a new exporting producer within the meaning of Article 3 of the Definitive Regulation and suggested that the Commission suspend the request for an interim review in order not to delay the outcome of the NEPT review under Article 3.
By email of 23 February 2015, the Commission asked the applicant to complete the questionnaire for operators claiming new exporting producer treatment. It stated that the applicant’s claim would be examined immediately the completed questionnaire was received and that the applicant could refer to information that it had already provided to the Commission.
On 25 March 2015, the applicant requested an extension of time for returning the questionnaire. The Commission granted the applicant an extension until 17 April 2015. A confidential version of the reply was sent within the period allowed and a non-confidential version was sent on 30 April 2015.
In reply to a request concerning the planned timing of its decision, the Commission informed the applicant, on 28 May 2015, that it was in the process of analysing the file and that it would shortly be requesting clarifications.
On 23 June 2015, the Commission sent the applicant a first request for clarification of the information that had been submitted in connection with the application for new exporting producer treatment under Article 3 of the Definitive Regulation.
On 13 July 2015, the applicant sent the Commission a confidential reply. A non-confidential reply was sent on 14 and 24 August 2015.
On 27 August 2015, the European association of the ceramic industry, Cerame-Unie AISBL (‘the intervener’ or ‘Cerame-Unie’), established in Brussels (Belgium), submitted information to the Commission concerning the applicant. That information was not forwarded to the applicant during the administrative procedure. However, in a letter of 18 September 2015 (paragraph 23 below), the applicant was informed of the fact that the Commission had received information concerning the initial investigation from industry representatives in the European Union.
On 16 September 2015, the applicant urged the Commission to adopt a decision on its application.
On 18 September 2015, the Commission informed the applicant of the state of progress of its application for new exporting producer treatment. Taking the view that the claim was still insufficiently substantiated, the Commission sent a second request for clarification, together with an annex detailing the information sought. In particular, it pointed to differences between information publicly available and the information submitted by the applicant and asked for clarification of the matter. As regards, in particular, the condition relating to the absence of any exports of the goods concerned to the European Union during the initial investigation period, the Commission stated the following:
‘The only information which was provided so far concerning sales of Foshan Lihua during [the initial investigation period] is a handwritten monthly list of sales transactions in 2009 and 2010, which does not provide any information on quantities sold, invoice numbers, destinations or customer names. We understand that your client did not have computerised accounting records at the time of the [initial investigation period). Unfortunately, as it stands, this limited information does not allow us to draw any conclusions on [the criterion in question).’
By email of 29 September 2015, the applicant answered the second request for clarification. A non-confidential version was sent to the Commission on 5 November 2015. The applicant submitted that the Commission was not entitled to ask it for the information at issue and that its requests amounted to a misuse of powers. The applicant concluded by requesting that an NEPT review be initiated and requesting an individual anti-dumping margin.
On 4 December 2015, the Commission sent to the applicant, to Cerame-Unie and to the Mission of the People’s Republic of China to the European Union the general disclosure document setting out the essential facts and considerations on the basis of which it proposed to reject the request for an NEPT review in accordance with Article 3 of the Definitive Regulation. In particular, the Commission found that the applicant was an exporting producer of the product concerned and that it had actually exported that product to the European Union following the initial investigation period, and so the third criterion for granting new exporting producer treatment was met. On the other hand, the Commission found that the applicant had not demonstrated that it had not exported the product to the European Union during the initial investigation period or that it was unrelated to companies subject to the anti-dumping duties at issue. Therefore, the first two criteria were regarded as not being met.
On 11 December 2015, the general disclosure document was sent to the Delegations of the Trade Defence Instruments Committee.
By letter of 20 December 2015, the applicant responded to the general disclosure document and requested a hearing before the Commission. Before submitting its observations on the document, it stated that the Commission was under an obligation primarily to examine its request for an interim review. It was only subsidiarily and in the event that the Commission should find that an interim review was not justified that it should take a decision on its request for an NEPT review. Thus, the applicant put the Commission on notice to take a decision on its request for an interim review by 20 January 2016. The applicant also denied that it had submitted a request to be made subject to the anti-dumping rate of 30.6% applicable to the cooperating companies not included in the sample. It had, in fact, requested an individual examination. The applicant also stated that the Commission had not conducted its investigation (‘the investigation in question’) impartially and, instead of relying on facts, had relied on conjecture and that it had imposed on it a higher burden of proof than on other parties that had requested an NEPT review.
On 11 January 2016, the applicant provided a non-confidential version of its observations.
On 13 January 2016, the applicant’s hearing before the Commission took place. Two representatives of the Chinese Chamber of International Commerce also attended. There are no minutes and there is no report of the hearing. On 15 January 2016, the applicant sent a summary of its understanding of the position taken by the Commission at the hearing.
On 18 January 2016, the applicant sent the Commission a letter following up the hearing. It stated, in particular, that, in accordance with Article 11(4) of the Basic Regulation (now Article 11(4) of Regulation 2016/1036), a notice of the initiation of an NEPT review must be formally published in the
Official Journal of the European Union
and that no such notice had been published. The applicant also pointed out that the Commission had provided it with no document that could substantiate its doubts that the first two criteria for granting new exporting producer treatment had been fulfilled.
By email of 19 January 2016, the Commission stated that the legal basis for assessing a request for an NEPT review in cases, like the present case, in which the institutions had had recourse to sampling in the context of the initial investigation was not Article 11(4) of the Basic Regulation, but a special provision enacted by the regulations imposing the definitive anti-dumping measures. It reiterated the finding that, in the event that an applicant demonstrates in the course of the review that it is a new exporting producer, it will be made subject to the rate of anti-dumping duty applicable to exporting producers that cooperated in the initial investigation but were not included in the sample, rather than to any individual rate.
By letter of 22 January 2016, the applicant stated that it did not agree that, on completion of a review under Article 3 of the Definitive Regulation, it could be made subject to the same rate of anti-dumping duty as applied to exporting producers that had cooperated in the initial investigation but were not included in the sample, submitting that it would be discriminatory to apply different opening conditions to new exporting producers depending on whether or not sampling had been used. The applicant argued that it had submitted evidence that showed, prima facie, that it did not export the product concerned to the European Union during the initial investigation period and was not related to companies subject to the anti-dumping duties in question. The applicant disputed the legality of the procedure in light of the rules of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) (
OJ 1994 L 336, p. 103
, ‘the Anti-Dumping Agreement’) set out in Annex 1 A to the Agreement establishing the World Trade Organisation (WTO) (
OJ 1994 L 336, p. 3
). In its letter, the applicant clarified the structure of the group and the practical use that it had made of the ‘EC’ certification of its goods.
On 15 April 2016, the Commission adopted Implementing Decision C(2016) 2136 final, rejecting a request for a new exporting producer treatment with regard to the definitive anti-dumping measures imposed on imports of ceramic tiles originating in the People’s Republic of China by the Definitive Regulation (‘the contested decision’). As a preliminary point, it stated that Article 11(4) of the Basic Regulation could not serve as a legal basis where sampling had been used in the initial investigation, and that the proper legal basis for the applicant’s request was Article 3 of the Definitive Regulation.
In so far as concerned the criteria for granting new exporting producer treatment, as provided for by Article 3, the Commission first noted that the applicant was an exporting producer of the product concerned and that it had actually exported that product to the European Union following the initial investigation period. Accordingly, it regarded the third criterion for granting new exporting producer treatment as fulfilled.
Next, in so far as concerned the second condition, according to which an undertaking which requests the treatment in question must not be related to a company subject to the anti-dumping duties in question, the Commission, on the other hand, took the view that the information provided by the applicant was insufficient and contradicted publicly available information. Therefore, since the investigation in question had not enabled the Commission to confirm that the applicant was not related to any such company, it concluded that the applicant had not met the second criterion.
Lastly, as regards the first criterion, according to which a company which requests the treatment in question must not have exported the product concerned to the European Union during the initial investigation period, the Commission, taking the view that the information provided by the applicant was incomplete and contradicted other information available to it, could not be sure that, during that period, the applicant had not exported the product concerned to the European Union, directly or indirectly, through the intermediary of related companies or under manufacturing agreements entered into with unrelated companies. Consequently, the Commission concluded that the applicant had not satisfied the first criterion either.
Finding that the applicant had not established that it met the first and second criteria for the grant of new exporting producer treatment as provided for by Article 3 of the Definitive Regulation, even though it had repeatedly been afforded the opportunity to provide additional information, the Commission rejected its request for new exporting producer treatment.
In addition, by decision of 11 July 2016, the Commission rejected the applicant’s request for an interim review under Article 11(3) of the Basic Regulation, that rejection being the subject of the case which gave rise to the judgment of 11 September 2018, Foshan Lihua Ceramic v Commission (
T‑654/16
,
EU:T:2018:525
).
Procedure and forms of order sought
By application lodged at the Registry of the General Court on 20 June 2016, the applicant brought the present action.
By document lodged at the Court Registry on 3 October 2016, Cerame-Unie applied for leave to intervene in support of the form of order sought by the Commission.
On 7 December 2016, in the reply, the applicant requested that the present case be joined with the case that had in the meantime given rise to the judgment of 11 September 2018, Foshan Lihua Ceramic v Commission (
T‑654/16
,
EU:T:2018:525
). It also requested that confidential information concerning it not be communicated to Cerame-Unie, and it provided non-confidential versions of the documents in question.
On 16 December 2016, the Commission objected to the joinder of the present case with the case that had in the meantime given rise to the judgment of 11 September 2018, Foshan Lihua Ceramic v Commission (
T‑654/16
,
EU:T:2018:525
).
By decision of 23 January 2017, the President of the Fourth Chamber of the General Court decided not to join the two cases.
By order of 7 April 2017, the President of the Fourth Chamber of the General Court granted Cerame-Unie leave to intervene in support of the form of order sought by the Commission.
The intervener raised no objection to the applicant’s request for confidential treatment.
The applicant claims that the Court should:
–
annul the contested decision;
–
order the Commission to pay the costs.
The Commission contends that the Court should:
–
dismiss the action;
–
order the applicant to pay the costs.
The intervener contends that the Court should:
–
dismiss the action;
–
order the applicant to pay the costs.
Law
The applicant puts forward eight pleas in law. By the first it alleges infringement of Article 11(4) and (5) of the Basic Regulation (now Article 11(5) of Regulation 2016/1036) and of Articles 6.1 and 9.5 of the Anti-Dumping Agreement, by the second it alleges breach of the principle of non-discrimination, by the third it alleges a manifest error of factual assessment, by the fourth it alleges violation of its rights of defence, by the fifth it alleges misuse of powers and an error of law, by the sixth it alleges a manifest error of law, by the seventh it alleges violation of the right to be heard and that the statement of reasons was based not on facts but on conjecture, and by the eighth it alleges infringement of Article 9.5 of the Anti-Dumping Agreement.
The first plea in law, alleging infringement of Article 11(4) and (5) of the Basic Regulation and of Articles 6.1 and 9.5 of the Anti-Dumping Agreement
By its first plea, the applicant takes issue with recital 8 of the contested decision, which is worded as follows:
‘The applicant also submitted that it should have been granted an individual duty under a newcomer review according to Article 11(4) of the Basic Regulation. The Commission refuted this claim by pointing out that Article 11(4) of the Basic Regulation cannot serve as a legal basis when sampling was applied in the original investigation, and that the legal basis for its request was Article 3 of the [Definitive] Regulation.’
The applicant argues, in substance, that the Commission’s reference to the procedure provided for by Article 3 of the Definitive Regulation, rather than to the procedure provided for by Article 11(4) of the Basic Regulation, has adverse consequences for it. Even though Article 5(10) of the Basic Regulation (now Article 5(10) of Regulation 2016/1036), which requires the publication of a notice of initiation of an anti-dumping investigation, applied, in accordance with Article 11(5) of the Basic Regulation, in all review procedures, no such notice of initiation of a review procedure was published in this case, and consequently interested parties as referred to in Article 6(7) of the Basic Regulation (now Article 6(7) of Regulation 2016/1036), in this case, importers and the Chinese Government, were not able to intervene in the administrative procedure. The Chinese Government could, however, have provided information to confirm that the applicant met all the criteria in order to benefit from new exporting producer treatment, as provided for by Article 3 of the Definitive Regulation.
There is, according to the applicant, no valid reason why, in a case where sampling has been used in the initial investigation, interested third parties should not have the right to intervene in an NEPT review procedure, since they would be invited to intervene in a procedure under Article 11(4) of the Basic Regulation. That is all the more true since the Commission has acknowledged that the criteria for the grant of new exporting producer treatment were essentially the same whether the review is conducted under Article 11(4) of the Basic Regulation or under Article 3 of the Definitive Regulation. Applicants for new exporting producer treatment, as provided for by Article 3 of the Definitive Regulation, would thereby be discriminated against by comparison with those applying for such treatment under Article 11(4) of the Basic Regulation. The fourth subparagraph of Article 11(4) of the Basic Regulation (now the fourth subparagraph of Article 11(4) of Regulation 2016/1036) does not constitute a
lex specialis
derogating from Article 11(5) of the Basic Regulation.
In the reply, the applicant submits that the Commission’s practice, which it followed in the contested decision, which it bases on Article 3 of the Definitive Regulation and which consists in not informing all interested parties mentioned in Article 5(11) of the Basic Regulation (now Article 5(11) of Regulation 2016/1036) and in Article 6(7) of the Basic Regulation, is contrary to Article 6.1 of the Anti-Dumping Agreement.
In so far as concerns Article 9.5 of the Anti-Dumping Agreement, that provision is transposed into EU law by Article 11(4) of the Basic Regulation, which reproduces it almost verbatim. Given that this is, therefore, the direct implementation in EU law of an obligation assumed in the context of the WTO agreements, that obligation has direct effect in EU law. However, Article 9.5 of the Anti-Dumping Agreement does not permit any exceptional treatment of companies according to whether or not they have been included in the sample. It applies to all new exporting producers.
In addition, even companies that have not been included in the sample are entitled, under both Article 17(3) of the Basic Regulation and Article 6.10.2 of the Anti-Dumping Agreement (which has direct effect in EU law) to an individual examination, and they should not therefore be made subject to a rate of anti-dumping duty calculated by reference to the highest of the dumping margins found for a representative product type from a cooperating exporting producer, that is to say 69.7%. Since the applicant was the only exporter that requested new exporting producer treatment, and since the reason for sampling is no longer present, the Commission should have allowed it an individual examination.
The Commission and the intervener dispute the applicant’s arguments.
In that regard, in the first place, it must be observed that the applicant’s argument amounts, in essence, to considering that the contested decision is contrary to Article 11(4) and (5) of the Basic Regulation and to Article 9.5 of the Anti-Dumping Agreement, in so far as the investigation which led to its adoption was not made public by the publication of a notice of initiation in the
Official Journal
of the European Union
.
However, as the Commission argues, the contested decision could not be adopted on the basis of Article 11(4) of the Basic Regulation. It is apparent from the fourth subparagraph of Article 11(4) of the Basic Regulation that the provisions of that article are not to apply where duties have been imposed under Article 9(6) of that regulation, that is to say where, in the initial investigation, the institutions used sampling, as was the situation in the present case.
Accordingly, Article 11(5) of the Basic Regulation, which transposes only to the review procedures laid down in Article 11(2) of the Basic Regulation (now Article 11(2) of Regulation 2016/1036) and in Article 11(3) and (4) of the Basic Regulation the relevant provisions of the Basic Regulation concerning the procedures and the conduct of investigations, including Article 5(10) and (11) of the Basic Regulation and Article 6(7) of that regulation, is not applicable in an investigation based on Article 3 of the Definitive Regulation.
The intention of the EU legislature to exclude the application of the first to third subparagraphs of Article 11(4) of the Basic Regulation (now the first to third subparagraphs of Article 11(4) of Regulation 2016/1036) in a case where sampling has been used in the initial investigation, as well as the application of Article 11(5) of that regulation to reviews other than those provided for in Article 11(2) to (4) of the Basic Regulation, is confirmed by the lack of any amendment to those two provisions, following the implementation, as of Council Regulation (EC) No 285/97 of 17 February 1997 amending Regulation (EEC) No 738/92 imposing a definitive anti-dumping duty on imports of cotton yarn originating in Brazil and Turkey (
OJ 1997 L 48, p. 1
), of the practice of Council and of the Commission to grant, subject to certain conditions, to new exporting producers the dumping margin calculated in accordance with Article 9(6) of the Basic Regulation.
It is moreover established that the applicant requested the application of Article 3 of the Definitive Regulation and that it was duly informed about the anti-dumping duty which would be applied to it in the event that it demonstrated in the course of the investigation in question that it was a new exporting producer.
The contested decision was adopted on the basis of Article 3 of the Definitive Regulation, which lays down a specific procedure extending the anti-dumping duty of 30.6%, applicable to cooperating producers that were not included in the sample, to operators which demonstrate by means of the three conditions laid down in that provision, that they are new exporting producers. Article 3 of the Definitive Regulation does not provide for the publication of a notice of initiation of a review investigation, or even for the notification of its initiation to other interested parties involved for the purposes of Article 5(10) and (11) and of Article 6(7) of the Basic Regulation.
In so far as, in the reply, the applicant submits that the Commission’s practice, which it followed in the contested decision, which it bases on Article 3 of the Definitive Regulation and which consists in not informing all interested parties mentioned in Article 5(11) and Article 6(7) of the Basic Regulation, is contrary to Article 6.1 of the Anti-Dumping Agreement, it must be stated that this is a new argument, raised for the first time at the stage of the reply. However, as the applicant essentially submitted at the hearing before the Court, it constitutes an amplification of the other arguments put forward in the application which are aimed at criticising the failure to publish a notice of initiation of the review procedure in question and to inform all interested parties. This argument is therefore admissible. As to whether this argument is well founded, it should be observed that Article 6.1 of the Anti-Dumping Agreement, according to which ‘all interested parties in an anti-dumping investigation shall be given notice of the information which the authorities require and ample opportunity to present in writing all evidence which they consider relevant in respect of the investigation in question’, is transposed into EU law by Article 5(10) of the Basic Regulation. However, it was already held in paragraph 59 above that Article 11(5) of the Basic Regulation, which transposes only to the review procedures laid down in Article 11(2) to (4) of the Basic Regulation the relevant provisions of the Basic Regulation concerning the procedures and the conduct of investigations, including Article 5(10) of the Basic Regulation, is not applicable in an investigation based on Article 3 of the Definitive Regulation.
In the second place, to the extent that the applicant submits, in essence, that the contested decision is contrary to Article 9.5 of the Anti-Dumping Agreement, in so far as Article 11(4) of the Basic Regulation is itself contrary to that provision, on the ground that it excludes from the scope of the review that it provides for situations in which the institutions have used sampling in the initial investigation, which would have required the Commission to have recourse to Article 3 of the Definitive Regulation, it is necessary, as the Commission contends, to ascertain, first of all, whether Article 9.5 of the Anti-Dumping Agreement has direct effect in the EU legal order.
In that regard, it is sufficient to note that, although the wording of the first to third subparagraphs of Article 11(4) of the Basic Regulation is, with the exception of the third condition relating to the existence of exports post-dating the initial investigation period, similar to the wording of Article 9.5 of the Anti-Dumping Agreement, Article 11(4) of the Basic Regulation includes a fourth subparagraph, according to which that article is not to apply where duties have been imposed under Article 9(6) of that regulation, that is to say where the institutions have used sampling in the initial investigation. The purpose of that exception is to ensure that new exporting producers are not placed in a more favourable procedural situation than those which cooperated in the initial investigation, but were not sampled. That consideration is not taken into account in the Anti-Dumping Agreement. Thus, the fourth subparagraph of Article 11(4) of the Basic Regulation is an expression of the EU legislature’s intention to adopt an approach in this field that is specific to the EU legal order. It follows that that provision cannot be considered to be a measure intended to ensure the implementation in the EU legal order of a particular obligation assumed in the context of the WTO. The EU legislature exercised its regulatory competence, as regards the conditions for initiating a review in respect of new exporting producers, by taking an approach specific to the EU legal order and, therefore, it cannot be established that it was the EU legislature’s intention, by the adoption of Article 11(4) of the Basic Regulation, to implement the particular obligations created by Article 9.5 of the Anti-Dumping Agreement (see, to that effect, judgment of 16 July 2015, Commission v Rusal Armenal,
C‑21/14 P
,
EU:C:2015:494
, paragraphs
,
and
). It follows that Article 9.5 of the Anti-Dumping Agreement does not have direct effect in the EU legal order.
In the third place, since the objectives of the investigation conducted under Article 3 of the Definitive Regulation are more restrictive than those of the investigation conducted under Article 11(4) of the Basic Regulation, it is justified that fewer persons are informed of the initiation of an investigation under Article 3 of the Definitive Regulation. Whilst the investigation conducted under Article 11(4) of the Basic Regulation is intended to determine not only whether the operator in question is a new exporting producer, but also, if that first question is answered in the affirmative, its individual dumping margin, the sole purpose of the investigation conducted under Article 3 of the Definitive Regulation is to ascertain whether the operator in question is indeed a new exporting producer. During that investigation, the latter must demonstrate that it did not export the goods described in Article 1(1) of the Definitive Regulation, originating in China during the initial investigation period, that it is not related to an exporter or producer subject to the measures imposed by this regulation and that it has either actually exported the goods concerned or has entered into an irrevocable contractual obligation to export a significant quantity to the European Union after the end of the initial investigation period. Since those conditions relate to the specific situation of the operator in question, that operator — to the exclusion of any third party — is clearly best placed to provide the necessary information.
In the fourth place, and in any event, even if it were to be held that the Commission was bound, when adopting the contested decision, by Article 5(10) and (11) and by Article 6(7) of the Basic Regulation, a procedural irregularity leads to annulment of all or part of a decision only if it is established that the content of the contested decision could have differed if that irregularity had not occurred (order of 24 September 2007, Torres v OHIM and Bodegas Muga,
C‑405/06 P
, not published,
EU:C:2007:546
, paragraph
; see also, to that effect, judgments of 29 October 1980, van Landewyck and Others v Commission,
209/78 to 215/78 and 218/78
, not published,
EU:C:1980:248
, paragraph
, and of 6 February 2013, Bopp v OHIM (Representation of a green octagonal frame),
T‑263/11
, not published,
EU:T:2013:61
, paragraph
).
It is the party relying on that procedural irregularity which must establish that the content of the contested decision could have differed if that irregularity had not occurred.
In the application, the applicant stated that, in the present case, the importers and, above all, the Chinese Government could and probably would have made comments in favour of the applicant. It then reiterated on several occasions that the Chinese Government would have intervened in support of the applicant in the administrative procedure if it had been informed of it and that it would in particular have provided information such as to enlighten the Commission. Lastly, in the reply, the applicant claimed that no association of exporters, of importers, or of consumers and no traders, nor indeed the public, had been informed, and that, consequently, the possibility that they might intervene in the administrative procedure could not be ruled out.
However, it must be stated that the Chinese Government received the general disclosure document, but that it did not submit any comments in this regard, let alone any precise data. As regards the Chinese Chamber of International Commerce, it is not disputed that, at the hearing before the Commission, one of its representatives made a general statement on the applicant’s behalf, but did not provide any detail on the substance of the case. As regards the associations of exporters, of importers or of consumers, traders and the public, the applicant in no way indicated how exactly those actors could have supplemented the information which the Commission had found to be lacking in the applicant’s case file or clarified the information that the Commission had considered to be contradictory. Moreover, the applicant did not make use of the possibility, open to it under Articles 91 to 102 of the Rules of Procedure of the General Court, to request that representatives of those associations be summoned before the General Court in order to confirm those claims (see, see to that effect and by analogy, judgment of 6 September 2017, Intel v Commission,
C‑413/14 P
,
EU:C:2017:632
, paragraph
). In addition, as was stated in paragraph 66 above, since the conditions provided for in Article 3 of the Definitive Regulation relate to the specific situation of the operator in question, that operator — to the exclusion of any third party — is clearly best placed to provide the necessary information.
It follows that the applicant has been unable to establish that the content of the contested decision could have differed if the procedural irregularity had not occurred.
In the fifth place, contrary to what the applicant submits, Article 17(3) of the Basic Regulation and Article 6.10.2 of the Anti-Dumping Agreement, which provide for the possibility for an exporting producer that has not been sampled to request an individual examination in order to obtain an individual dumping margin, are not relevant provisions in the present case. As the intervener essentially submits, it is the special rule, namely the first to third subparagraphs of Article 11(4) of the Basic Regulation, which provides, as far as concerns an NEPT review, for the possibility of determining the individual dumping margin. As was stated above, the fourth subparagraph of Article 11(4) of that regulation lays down an exception to that rule in a case where sampling has been used in the initial investigation.
In the sixth place, contrary to what the applicant claims, there is no discrimination against operators seeking new exporting producer treatment on the basis of Article 3 of the Definitive Regulation by comparison with operators that can request it under Article 11(4) of the Basic Regulation. Article 3 of the Definitive Regulation and the fourth subparagraph of Article 11(4) of the Basic Regulation ensure that, in the event of sampling (i) new exporting producers are not granted preferential procedural treatment by comparison with exporting producers that cooperated in the initial investigation, but were not sampled, and (ii) they can benefit from the same anti-dumping rate as those latter producers. Thus, any difference of treatment between the types of exporting producers highlighted by the applicant is connected with the use of sampling, which is expressly provided for in Article 17 of the Basic Regulation. However, the applicant has not raised a plea that that provision is illegal in the light of the principle of non-discrimination.
It follows that the first plea must be rejected.
The second plea in law, alleging breach of the principle of non-discrimination
The applicant states that, recently, in Commission Implementing Regulation (EU) 2015/2179 of 25 November 2015 initiating a review of Council Implementing Regulation (EU) No 102/2012 imposing a definitive anti-dumping duty on imports of steel ropes and cables originating, inter alia, in the People’s Republic of China, as extended to imports of steel ropes and cables consigned from the Republic of Korea, whether declared as originating in the Republic of Korea or not, for the purposes of determining the possibility of granting an exemption from those measures to one Korean exporter, repealing the anti-dumping duty with regard to imports from that exporter and making imports from that exporter subject to registration (
OJ 2015 L 309, p. 3
), the Commission correctly applied to a Korean exporting producer the provision of the Basic Regulation relating to new exporters, that is to say Article 11(4) of the Basic Regulation. It is clear from recitals 6 to 13 of Implementing Regulation 2015/2179 that the exporting producer in question was required only to show prima facie evidence that it met the three criteria laid down in Article 11(4) of the Basic Regulation, that the Commission then exempted all imports from that Korean exporting producer from all anti-dumping duties during the course of that investigation and that it invited interested third parties to make their views known. In addition, the procedure, which ultimately led to the adoption of Implementing Regulation 2015/2179, took only two months.
In the present case, the applicant was treated in discriminatory fashion because recourse was had to sampling in the initial investigation, and consequently to the procedure laid down in Article 3 of the Definitive Regulation. Like the Korean exporting producer, it provided with its request of September 2013 adequate prima facie evidence, but it did not benefit from exemption from duties during the course of the investigation in question and it had to wait more than two and a half years before a decision was adopted. In addition, the applicant argues in its reply that, contrary to Article 16(2) of the Basic Regulation (now Article 16(2) of Regulation 2016/1036), the Commission did not, in the case that gave rise to Implementing Regulation 2015/2179, seek to supplement the information with which the applicant had provided it by making an on-the-spot visit.
The fact that it was subject to anti-dumping duties of 69.7% throughout the investigation in question, which lasted more than two and a half years, made it impossible for the applicant to develop its business in the European Union, and that had very negative economic consequences for it.
The Commission disputes the applicant’s arguments.
In that regard, it should be pointed out that, by referring to Implementing Regulation 2015/2179 initiating a review of Council Implementing Regulation (EU) No 102/2012 of 27 January 2012 imposing a definitive anti-dumping duty on imports of steel ropes and cables originating in the People’s Republic of China and Ukraine as extended to imports of steel ropes and cables consigned from Morocco, Moldova and the Republic of Korea, whether declared as originating in these countries or not, following an expiry review pursuant to Article 11(2) of the Basic Regulation and terminating the expiry review proceeding concerning imports of steel ropes and cables originating in South Africa pursuant to Article 11(2) of the Basic Regulation (
OJ 2012 L 36, p. 1
), the applicant claims that it was discriminated against by comparison with the Korean exporting producer concerned by that proceeding. The applicant claims, in essence, that, contrary to what was the case in the proceeding which led to the adoption of that initiating regulation, the proceeding that led to the adoption of the contested decision was not made public by a notice of initiation, or that the parties concerned were not informed of the decision, that the investigation in question lasted too long, that it did not enjoy a suspension of the anti-dumping duties in force throughout that investigation and that the standard of proof that it had to adduce was higher.
According to settled case-law, compliance with the principles of equality and non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (see judgment of 13 December 2007, Asda Stores,
C‑372/06
,
EU:C:2007:787
, paragraph
and the case-law cited).
However, as the Commission contends, the situations in the two cases compared by the applicant are different, so that no discrimination can be established.
In the first place, the applicant sought new exporting producer treatment as provided for in Article 3 of the Definitive Regulation. By contrast, the Korean exporting producer to which the applicant refers asked to be included in the list of exporting producers enjoying exemption from payment of the anti-dumping duties, as extended to imports of the product concerned consigned from the Republic of Korea, under the fifth subparagraph of Article 13(4) of the Basic Regulation (now the fifth subparagraph of Article 13(4) of Regulation 2016/1036), which refers for the application of that paragraph 4 to Article 11(4) of the Basic Regulation, as regards undertakings requesting exemption from anti-dumping duties following the adoption of a regulation extending anti-dumping duties. In such a procedure, it is not sufficient to prove that the conditions laid down in Article 11(4) of the Basic Regulation are satisfied. The undertaking in question must also show, in accordance with the third subparagraph of Article 13(4) of the Basic Regulation (now the third subparagraph of Article 13(4) of Regulation 2016/1036), that it is not engaged in circumvention practices. That is indeed the reason why recitals 6 and 8 of Implementing Regulation 2015/2179 specify that the Korean exporting producer provided prima facie evidence that it did not circumvent the measures applicable to the product concerned in that case. The scope of that type of investigation is therefore broader than that of the investigation provided for in Article 3 of the Definitive Regulation.
In the second place, Implementing Regulation 2015/2179 did not grant the exemption requested by the Korean exporting producer, but merely initiated the investigation in question. Accordingly, the fact that the Commission contented itself, at that stage of the exemption procedure, with the evidence that that Korean exporting producer had prima facie satisfied the conditions required does not mean that that undertaking was subject to a lower standard of proof than that imposed on the applicant. That means only that the evidence adduced by that undertaking was sufficiently conclusive to open that investigation, whose purpose was to definitively confirm that undertaking’s claims. Moreover, although the applicant repeatedly claims that it should have been granted new exporting producer treatment, since it had provided prima facie evidence that it fulfilled the necessary conditions, nothing in Article 3 of the Definitive Regulation, let alone in Article 11(4) of the Basic Regulation, suggests that it is sufficient that the undertaking concerned provides such evidence to discharge its burden of proof. In both cases, the legislature provided that it is the undertaking interested in obtaining new exporting producer treatment which must show that the necessary conditions have been fulfilled.
In the third place, contrary to the investigation that led to the adoption of the Definitive Regulation, the investigation that led to the adoption of Implementing Regulation No 102/2012 did not involve recourse to sampling, so that it was possible for the Korean exporting producer to rely on the first to third subparagraphs of Article 11(4) of the Basic Regulation. It was already held in the context of the first plea that discrimination cannot be established on account of new exporting producers not being able to obtain a review on the basis of Article 11(4) of the Basic Regulation if sampling was used in the initial investigation and if, therefore they can be granted only the rate of anti-dumping duty applicable to cooperating exporting producers not included in the sample.
In the fourth place, the same applies as regards the question of differences in terms of notifying the initiation of an investigation to interested parties, which varies according to whether recourse is had to Article 3 of the Definitive Regulation or to Article 11(4) of the Basic Regulation, and which thus depends on whether sampling has been used in the initial investigation.
In the fifth place, given that the investigation initiated by Implementing Regulation 2015/2179 is also conducted on the basis of Article 11(4) of the Basic Regulation, the investigation is accompanied, in accordance with the third subparagraph of Article 11(4), by exemption from the anti-dumping duties in force and from registration of imports throughout that investigation. No such provision is made by Article 3 of the Definitive Regulation, on which the investigation in question is based.
In the sixth place, it must be stated that the applicant compares the time required for the Commission to initiate an investigation on the basis of Article 13(4) of the Basic Regulation with the length of time to adopt a decision on the substance as to whether to grant new exporting producer treatment under Article 3 of the Definitive Regulation. However, those two situations are not comparable. Moreover, the two cases can be distinguished by the satisfactory nature of the Korean exporting producer’s file, in contrast to the applicant’s insufficiently documented file, as well as by the circumstance that the applicant had initially requested an interim review on the basis of Article 11(3) of the Basic Regulation and that, for a certain amount of time, there was a doubt as to what type of review the applicant was seeking or to the order of priority in which its requests for interim review and for the granting of new exporting producer treatment should be examined.
In the seventh place, as regards the argument alleging infringement of Article 16(2) of the Basic Regulation which was raised for the first time in the reply, it is necessary to examine at the outset its admissibility. When questioned on this point at the hearing before the Court, the applicant did not wish to submit its observations. For its part, the Commission contended that that argument was a new plea in law, and should therefore be declared inadmissible. In that regard, although it is true that the applicant complains in the application that the Commission did not carry out an on-the-spot visit, it is not clearly apparent from this that it was a plea for annulment rather than a general comment. It was therefore only at the stage of the reply that the applicant claimed for the first time before the Court that the abovementioned provision had been infringed. It is therefore a new plea, and is thus inadmissible.
In any event, it is sufficient to observe that Article 16(2) of the Basic Regulation, relating to verification visits, provides that ‘the Commission may carry out investigations in third countries as required’. Thus, even where there are doubts about the information contained in an exporting producer’s file, the Commission is not required to carry out on-the-spot verifications, as it indeed contended at the hearing before the Court. The applicant has not referred to any such obligation on the Commission to do so. That applies all the more so in the context of reviews, since the burden of proving that the conditions laid down have been satisfied is clearly on the operator seeking new exporting producer treatment, whether under Article 11(4) of the Basic Regulation or under Article 3 of the Definitive Regulation.
It follows that the applicant is not justified in claiming that it was the victim of discrimination, and the second plea must therefore be rejected.
The third plea in law, alleging a manifest error of factual assessment
By its third plea in law, the applicant takes issue with recitals 11, 12 and 16 of the contested decision, which are worded as follows:
‘(11)
With regard to criterion (b), namely that the applicant is not related to any exporters or producers which are subject to the anti-dumping measures imposed by the original regulation, Foshan Lihua’s questionnaire reply stated that it consists of a group of six related companies. The two deficiency replies revealed the existence of two additional related companies which were not mentioned in the reply to the questionnaire. However, the replies did not specify when these two companies [were] set up and whether these companies have invested in any other legal entities.
(12)
After disclosure, Foshan Lihua stated that these two companies had not been included in the original reply because they were not producing or selling the product concerned and had ceased to exist. However, the company did not submit sufficient additional evidence to substantiate these assertions, in particular concerning the existence and activities of its Hong Kong based investment company.
...
(16)
The applicant claimed that, during the [initial] investigation period, only two companies in the group were actively involved in the production and sale of the product concerned: Foshan Lihua manufactured the product concerned and sold it exclusively on the domestic market, whereas the related trader Foshan Henry (“Henry”) exported the product concerned to other countries, but not to the Union. However, the supporting evidence provided by the applicant was incomplete, as the sales records of Foshan Lihua concerning the [initial] investigation period did not include any delivery terms, customer addresses or shipping destinations and the sales register of Foshan Henry did not include any customer names for the year 2009. Consequently, the Commission could not establish whether Foshan Lihua exported the product concerned to the Union in the [initial] investigation period. Furthermore, the applicant failed to provide detailed sales records of Foshan Lihua for the years after the [initial] investigation period.’
In so far as recitals 11 and 12 of the contested decision, on the one hand, and recital 16 of that decision, on the other hand, concern the second and the first condition for granting the treatment provided for in Article 3 of the Definitive Regulation, respectively, this plea is divided into two parts. They should therefore be considered separately.
The first part of the plea, alleging a manifest error of factual assessment in recitals 11 and 12 of the contested decision
In recitals 11 and 12 of the contested decision, the Commission essentially complains that the applicant gave it incomplete information on its group structure and on the activities of the companies of which that group was composed. Those grounds fall within the scope of the review of the second condition for applying Article 3 of the Definitive Regulation, relating to the absence of any link with exporting producers subject to the anti-dumping duties. The Commission found inter alia that, contrary to the information initially provided by the applicant, the replies to the requests for clarification revealed that one of the group undertakings, namely Foshan Nanhai Huachangsheng Textile Co. Ltd, was owned by two other undertakings which were not mentioned in the initial reply, namely Lihua International (HK) Holding Ltd and Foshan Huachang Textile Development Co. Ltd, which were in turn owned by members of the same family, and in relation to which the applicant was not able to establish, by means of evidence, the dates on which they were established, precise activities, including whether they had invested in any other undertakings, and whether they still existed.
The applicant disputes these conclusions and argues that it provided all the necessary information regarding the internal organisation of its companies and on its group in its letters of 11 December 2014 and 22 January 2016.
In Annex 3 to its letter of 11 December 2014, it had already indicated, by disclosing its operating licence, the date on which Foshan Nanhai Huachangsheng Textile was established and its shareholders.
The two companies put forward in its letter of 22 January 2016 were a textile producing company and a carton producing company and they were not mentioned initially because they had nothing to do with the production, sale or marketing of the product concerned. In particular, the applicant informed the Commission in this letter that Lihua International (HK) Holding was active in the textile sector, was in existence between 2006 and 1 January 2015 and was created only for financing purposes. The letter also contained a summary of the companies in the group, with the dates on which they were established.
The operating licences which were communicated to the Commission and which are set out in Annexes A 9 and A 10 to the application disclose the dates on which the companies in the group were established and show that they had no connection with other undertakings.
At no point did the Commission dispute that, under Chinese law, a company with a licence to operate in the textile, carton or investment field was formally prohibited from producing or trading in any way in ceramic tiles, on pain of committing a criminal offence. It is therefore impossible that those companies exported ceramic tiles to the European Union during the initial investigation period or that they are related to other exporters of such goods.
The applicant is therefore surprised that the contested decision should rest on a ‘lack of additional evidence’, which the Commission in fact never requested.
The Commission disputes the applicant’s arguments.
In that regard, Article 3 of the Definitive Regulation essentially provides that, where a new Chinese exporting producer provides sufficient evidence to the Commission, first, that it did not export the goods concerned during the initial investigation period, second, that it is not related to an exporter or producer subject to the measures imposed by the Definitive Regulation and, third, that it has either actually exported the goods concerned or has entered into an irrevocable contractual obligation to export a significant quantity to the European Union after the end of the initial investigation period, the Council, acting by simple majority on a proposal by the Commission, after consulting the Advisory Committee, may amend Article 1(2) of the Definitive Regulation in order to attribute to that producer the duty of 30.6% applicable to cooperating producers not in the sample.
That provision therefore makes the granting of new exporting producer treatment subject to proof by the operator concerned that it satisfies the three conditions mentioned in the previous paragraph. Since those conditions are applied cumulatively, failure to satisfy one of them results in such treatment being denied.
It should be recalled that it is settled case-law that, in the sphere of measures to protect trade, the EU institutions enjoy a wide discretion by reason of the complexity of the economic, political and legal situations which they have to examine. It follows that review by the EU Courts of the assessments made by the institutions must be confined to ascertaining whether the procedural rules have been complied with, whether the facts on which the contested decision is based have been accurately stated and whether there has been any manifest error of assessment of the facts or any misuse of powers. However, where the EU institutions have a wide power of appraisal, respect for the rights guaranteed by the EU legal order in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case and the right of the person concerned to make his views known and to have an adequately reasoned decision (see judgment of 28 February 2017, Yingli Energy (China) and Others v Council,
T‑160/14
, not published,
EU:T:2017:125
, paragraph
and the case-law cited).
It is by taking into account those factors that it is necessary to ascertain whether the applicant has been able to demonstrate that the Commission made a manifest error of factual assessment in recitals 11 and 12 of the contested decision.
It is established that, when assessing the condition that the operator interested in obtaining new exporting producer treatment must prove that it is not related to an exporter or producer subject to the measures imposed by the Definitive Regulation, the Commission asked in the questionnaire sent to the applicant to present to it the composition of its group, specifying that that presentation should enable the Commission to clearly identify the precise nature of the links that the applicant might have with other companies. In the reply to that questionnaire, the applicant referred to five related companies, so that the group consists of six companies in total. Since the Commission was not satisfied with the completeness of the information submitted, it inter alia requested the applicant, in the first request for clarification, to provide it with a list of Foshan Nanhai Huachangsheng Textile’s shareholders.
The reply to that request revealed that that latter undertaking had been owned by two other companies which had not been mentioned in the reply to the questionnaire, namely Lihua International (HK) Holding and Foshan Huachang Textile Development.
In the letter of 18 September 2015, the Commission inter alia informed the applicant that its request was still not sufficiently substantiated and that it was sending it a second request for clarification. It requested the applicant, inter alia, to provide more information as regards the document submitted in Annex B 15 to the defence and which showed that Lihua International (HK) Holding and Foshan Huachang Textile Development were Foshan Nanhai Huachangsheng Textile’s shareholders. Specifically, the Commission requested the applicant to describe those two companies’ trading activities.
In its reply of 29 September 2015, the applicant merely indicated, as regards the business activities of the two companies, the activities of ‘financing and investment’ for Lihua International (HK) Holding and of ‘production and sales of textile fabrics’ for Foshan Huachang Textile Development.
In recital 9 of the general disclosure document, the Commission stated that the applicant’s replies did not specify when these two companies were set up and whether the two companies had invested in any other companies. As the Commission essentially contends, although it is established that those two companies invested in another undertaking of the same group, namely Foshan Nanhai Huachangsheng Textile, the applicant did not provide any information establishing that those companies had not invested in other undertakings. It must be stated that that question is particularly important as regards Lihua International (HK) Holding, which was a financing and investment company. In the absence of that information, it is not possible to ascertain whether that company, and therefore the entire group, was not related to the companies subject to the anti-dumping duties in force.
In the letter of 20 December 2015 making observations on the general disclosure document and at the hearing before the Commission, the applicant stated that those two companies had ceased operating in 2008. However, the applicant did not identify in the case file before the Court any document capable of establishing that it had provided the Commission with evidence relating to when those two companies had ceased operating as well as their shareholdings in other companies. As stated in the previous paragraph, that lack of information is significant especially in relation to Lihua International (HK) Holding.
As the Commission essentially contends, the applicant subsequently changed position, submitting, in the letter of 22 January 2016, first, that Lihua International (HK) Holding had ceased operating on 1 January 2015, second, that Foshan Huachang Textile Development had been established in 2001 and that its shareholders belonged to the family to which Lihua International (HK) Holding and Foshan Huachang Textile Development also belonged (see paragraph 93 above) and, third, that Foshan Nanhai Huachansheng Textile was still operating and had no marketing or trading business, only financing. However, the applicant has not identified in the case file before the Court any document capable of establishing that it had provided the Commission with evidence to substantiate those assertions.
Although Lihua International (HK) Holding’s registration certificate was indeed provided, it adds nothing to the information mentioned in the previous paragraph. In the reply, the applicant further claims that that certificate states that it expired in 2007. In that regard, it must be stated that if that argument should be understood as seeking to show a date when that undertaking ceased operating, it amounts to a new change of position by the applicant and that it is therefore lacking in any credibility. In any event, it is in no way established that the expiry date of the certificate, which was set exactly one year after the undertaking’s registration, constitutes the actual date when that undertaking ceased operating.
Moreover, it is necessary to reject the applicant’s claim that the contested decision is based on a ‘lack of additional evidence’ which the Commission never requested it to provide.
In the letter of 18 September 2015, the Commission requested the applicant to describe the business activities of the two companies whose existence was revealed in the reply to the first request for clarification. Recital 9 of the general disclosure document states that the information provided does not specify when the two companies were set up or whether those companies invested in other companies. Moreover, the questionnaire to request new exporting producer treatment already specified that the applicant’s reply should enable the Commission to identify clearly the precise nature of the links that the applicant might have with other companies. It was therefore incumbent on the applicant to adduce evidence capable of replying to the questions which the Commission considered had still not been answered. Furthermore, it is clear from the applicant’s letter of 22 January 2016, which states ‘please find enclosed the further information as requested’, that the applicant was quite aware that the Commission was asking it for additional information on this matter.
The applicant further submits that, since no minutes of the hearing before the Commission were drawn up, it does not recall whether the date when those two companies ceased operating was raised. The applicant claims that the Commission has never requested the showing of the ‘end dates’. However, those assertions are contradicted by the documents submitted by the applicant itself to the Commission in the context of its presentation at the hearing before the Commission, in which it stated that Lihua International (HK) Holding had ceased operating in 2008.
It follows that, in the light of the contradictory and incomplete nature of the information submitted by the applicant to the Commission in relation to the condition examined, the applicant is wrong to claim that recitals 11 and 12 of the contested decision are vitiated by a manifest error of assessment.
The first part of the third plea must therefore be rejected.
The second part of the plea, alleging a manifest error of factual assessment in recital 16 of the contested decision
According in essence to recital 16 of the contested decision, although the applicant claimed that, during the initial investigation period, only two companies in the group had been actively involved in the production and sale of the product concerned, in that Foshan Lihua had manufactured the product concerned and sold it exclusively on the domestic market, whereas its related trader, Foshan Henry Trading, had exported the product concerned to other countries outside the European Union, it did not submit to the Commission any evidence enabling it to be sure that the applicant and its group undertakings had not exported the product concerned to the European Union during the initial investigation period. According to the Commission, the supporting evidence provided was incomplete, as (i) the sales records of Foshan Lihua concerning the initial investigation period did not include any delivery terms, customer addresses or shipping destinations and (ii) the sales records of Foshan Henry Trading did not include any customer names for 2009. Furthermore, the applicant failed to provide detailed sales records of Foshan Lihua for the years after the initial investigation period.
The applicant states that, since business for Foshan Lihua was not good until 2013, that is to say that only a few customers purchased goods and Foshan Henry Trading had a very small volume of sales, Foshan Henry Trading was of the opinion that there was no need to list its customers’ names and addresses, and so they did not appear in the sales register sent to the Commission. In its reply, the applicant states that that was rather because of the very small number of buyers. In 2009, it sold mostly to an independent trader in Malaysia. However, the applicant stated in the application that, during the initial investigation period, it had sold almost all of its products, if not all, through the intermediary of Foshan Guangchengda Import & Export Co. Ltd, a Chinese trading company with which it was not related, and that it had received the sales price on delivery. These sales were ‘national’ sales.
The applicant maintains, in substance, that, from 2013, its sales increased and that Foshan Henry Trading decided to follower stricter sales accounting rules and to list, from that year onwards, customers’ names and addresses and delivery terms. Its commercial links with the independent sales and trading companies mentioned in paragraph 119 above were terminated. The sales/export ledgers of Foshan Henry Trading for 2009 and 2010, which were given to the Commission, do contain the contract and invoice numbers, the method of payment, the port of destination, the sales quantities and values as well as the final destination.
In the reply, the applicant argues that the absence of customer names and addresses is explained by the fact that the accounting for the registers in 2009 and 2010 was not computerised or up to date.
Nevertheless, the allegedly weak accounting prior to 2013 and the business records of Foshan Henry Trading were in compliance with the Chinese rules applicable to small businesses.
According to the applicant, the Commission has never contested these facts.
The Commission disputes the applicant’s arguments.
In that regard, it must be held that the applicant has failed to show that during the investigation in question it provided the documents which the Commission found to be lacking in recital 16 of the contested decision. In particular, it did not put forward any arguments and evidence capable of establishing the manifestly incorrect nature of the Commission’s findings set out in that recital of the contested decision, which concern the undertaking Foshan Lihua. The applicant rather acknowledged that the information in question was lacking and submitted arguments in order to justify that lack. However, those arguments are not capable of precluding the conclusion, set out in the same recital, that, in essence, the Commission could not be sure on the basis of the documents that the applicant had provided it with that the applicant and its group undertkaings had not exported the product concerned to the European Union during the initial investigation period.
In the first place, the applicant’s argument that, until 2013, the export company Foshan Henry Trading did not hold a list of its customers and their addresses on account of the small volume of its sales or on account of their small number is not persuasive. First of all, the Commission recalled that the sales figures communicated for Foshan Henry Trading contained all the required information, including customer names, for the years 2010 to 2014, but that customer names were missing for 2009. Next, as the Commission contends, the applicant’s sales volumes effected by Foshan Henry Trading presented in its register for 2009 and 2010 and reproduced in Annex B 12 to the defence can in no way be considered negligible. The applicant did not indeed dispute the accuracy of the amounts in question recalled by the Commission both in its pleadings and at the hearing before the Court. Lastly, it must be held that the argument that the lack of necessary information is due rather to there having been a very small number of buyers (paragraph 119 above) is no way substantiated and underlines the lack of credibility of the information submitted by the applicant to the Court. That argument constitutes a new change of position by the applicant.
In the second place, the applicant’s argument that almost all, or all, of its exports before 2013 were made through the trading company Foshan Guangchengda Import & Export is contradicted both by the document submitted in Annexes B 19 and B 29 to the defence, from which it is apparent that the applicant also sold substantial quantities of its products to other export undertakings, and by the applicant’s own statements, according to which it sold its goods to an independent trader in Malaysia in 2009.
In the third place, as regards the applicant’s argument on the compliance with the Chinese rules applicable to small businesses of the accounts and registers that it submitted to the Commission, it is sufficient to note that it has not been substantiated to the requisite legal standard. Since the principle
iura novit curia
does not extend to the law of the Member States, let alone the law of third countries, that is a question of fact, which must be demonstrated, where necessary, by the party relying on it (see, to that effect, judgment of 12 October 2017, Moravia Consulting v EUIPO — Citizen Systems Europe (SDC‑444S),
T‑318/16
, not published,
EU:T:2017:719
, paragraph
). However, the applicant has not submitted anything in support of its claim. In particular, the applicant has not referred to any specific page in the case file of the present case in order to prove what it has stated. In any event, compliance with national accounting rules is not in itself probative in an anti-dumping proceeding, such as that at issue, which pursues objectives other than those of those rules.
Moreover, it should be recalled, as the Commission observes, that nor can the Commission be alleged to have failed to take into account any matters of fact or of law which could have been submitted to it during the administrative procedure, but which were not, since the Commission is not obliged to examine, of its own motion and on the basis of prediction, what information might have been submitted to it. Similarly, the legality of an administrative decision is to be assessed in the light of the information available to the EU body which was the author of that decision when that decision was adopted (see, to that effect, judgments of 24 September 2002, Falck and Acciaierie di Bolzano v Commission,
C‑74/00 P and C‑75/00 P
,
EU:C:2002:524
, paragraph
, and of 14 January 2004, Fleuren Compost v Commission,
T‑109/01
,
EU:T:2004:4
, paragraph
). However, the applicant conceded that the issue of the alleged compliance with the Chinese rules applicable to small businesses of the accounts and registers that it submitted to the Commission had not been raised during the administrative procedure.
In the fourth place, although the applicant claims that the sales/export ledgers of Foshan Henry Trading for 2009 and 2010, which were given to the Commission, contained the contract and invoice numbers, the method of payment, the port of destination, the sales quantities and values as well as the final destination, it has failed to show that those ledgers also contained customer names for 2009. However, that is a fact on which recital 16 of the contested decision is based.
It follows that the second part of the third plea must be rejected, and that it is therefore necessary to reject the third plea in its entirety.
The fourth plea in law, alleging violation of the applicant’s rights of defence
By its fourth plea, the applicant takes issue with recitals 13, 14 and 22 of the contested decision, which are worded as follows:
‘(13)
Furthermore, there are indications of the existence of parts and/or subsidiaries that have not been declared by the applicant in its successive replies to the Commission. Additional information on the nature of these indications, such as the existence of a company branch in Shiwan, mentioned in the internal organigram of the company as well as in other publicly available information, was provided to the applicant during a hearing with the Commission on 13 January 2016. This information was neither confirmed nor denied by the applicant.
(14)
In view of the above, the Commission considers that the information provided by the applicant regarding this criterion is incomplete and contradictory with publicly available information. Therefore, the [initial] investigation could not confirm that the applicant was not related to any of the exporters or producers in [China] which are subject to the measures in force. Consequently, the applicant does not meet this criterion.
...
(22)
The Commission considers that, as the information provided by the applicant is incomplete and contradictory with other information available to the Commission, it cannot be excluded that, during the [initial investigation period], Foshan Lihua exported the product concerned to the Union either directly, via related companies or via manufacturing agreements with other unrelated companies. Consequently, the investigation could not establish that the applicant did not export to the Union ceramic tiles originating in the [People’s Republic of China] during the [initial] investigation period. Therefore, the applicant does not meet this criterion.’
Recitals 13 and 14 of the contested decision are part, like recitals 11 and 12 thereof, which the Court examined in the context of the first part of the third plea, of the analysis of the condition that an operator seeking new exporting producer treatment must prove that it is not related to another undertaking subject to existing anti-dumping duties. First, in recital 13 of the contested decision, the Commission observed that the applicant had not declared all the structure of its group and that it had omitted to notify it of the related companies or subsidiaries which are nevertheless revealed by publicly available information. The Commission claims that it presented those facts to the applicant at the hearing before the Commission and put questions to it particularly in relation to a branch in Shiwan (China). Second, in recital 14 of the contested decision, the Commission concluded that the information provided by the applicant to show that it satisfies the criterion in question is incomplete and contradictory with publicly available information, so that that criterion cannot be considered to be met.
In recital 22 of the contested decision, which is part, like recital 16 of that decision, which the Court examined in the second part of the third plea, of the analysis of the condition relating to the absence of exports to the European Union during the initial investigation period by the applicant’s group of companies, the Commission finds, in essence, that the incomplete and contradictory nature of the information submitted by the applicant prevents it from finding that the latter or its group did not carry out the exports in question.
Since this plea consists, in essence, of two parts, one of which is directed against recitals 13 and 14 of the contested decision, which relate to the second condition, and the other against recital 22 of the contested decision, which relates to the first condition, it is appropriate to analyse them seperately.
The first part of the plea, alleging a violation of the rights of the defence as regards recitals 13 and 14 of the contested decision
First, the applicant states that no minutes of its hearing before the Commission were drawn up, nor was any record made, and that no information was given to it about the branch in Shiwan. The applicant cannot therefore be sure of what was said in this regard at that hearing and whether the Commission had properly understood what it said on this occasion. In its reply, the applicant states that the question of this ‘branch’ was raised by the Commission at the hearing. However, the applicant does not recall exactly what was mentioned by the Commission. Without any minutes or recording of the hearing on which it would have had the right to comment and which, if necessary, it could have corrected, the Commission cannot base the contested decision on anything that was allegedly said at the hearing. The hearing addressed the general disclosure document, but that document made no mention of the branch in Shiwan.
It was thus in the contested decision that the Commission first mentioned to the applicant in writing this branch in Shiwan and its importance for the decision that it would take. It was not mentioned in the general disclosure document or any other document, and the applicant does not know to what publicly available information the Commission was referring. The Commission never gave the applicant an opportunity to comment on this publicly available information, or even to discover what it was.
The applicant maintains that, had it been given an opportunity to comment on this branch in Shiwan, it would have explained that it was not a commercial company, but a joint research company in which all ceramic tile producers in the Foshan region, including the applicant, are required to participate. Its job is to carry out, under State supervision, joint research and technology programmes for its members in the field of ceramic tiles. It has no operational, production, sales or marketing business whatsoever, as the Chinese Government could have confirmed had it been informed of the investigation in question. There is no possibility at all that, during the initial investigation period, this company in Shiwan exported the products concerned to the European Union or could be regarded as establishing any company law connection with other exporters.
Second, during the investigation in question, the Commission never indicated to the applicant to which publicly available information it was referring as the basis for recital 14 of the contested decision. Nor did it clarify the reasons for which the ample information it provided was ‘incomplete’ and ‘contradictory’.
The Commission disputes the applicant’s arguments.
It admits that it did not take any minutes of the hearing. However, a presentation was made at the hearing and the applicant made a summary of the items discussed at the hearing. In addition, the hearing was followed up by an exchange of correspondence. The applicant did therefore have an opportunity to comment during and after the hearing.
In so far as concerns the Shiwan branch, it was the applicant’s internal company organisation chart (Annex B 30 to the defence) that indicated its existence. No further explanation was provided on the subject, other than that it was under the supervision of the general sales manager. The Commission did put evidence to the applicant at the hearing, but the applicant made no comment on the subject.
Similarly, the ‘news’ section of the applicant’s website refers to the 2015 China Import and Export Fair in Canton (China) (Annex B32 to the defence) in which a subsidiary called Meta, Inc. and products advertised under the name ‘Meta Tiles, Inc.’ are mentioned. The Commission did not know whether Meta Tiles was merely a brand name or a separate legal entity. This information was also mentioned to the applicant at the hearing and was neither denied nor confirmed.
Accordingly, the Commission contends that the applicant’s explanations relating to the company in Shiwan given in paragraph 75 of the application include new matters which were not communicated during the investigation in question. By providing this new information the applicant actually confirms that the Shiwan branch is a legal entity and that Foshan Lihua owns shares in it. This new information shows once more that the information which the applicant gave concerning related entities was incomplete from the start and that the statements obtained from the applicant are unreliable. The information provided in paragraph 75 of the application merely reinforces the conclusions in the contested decision.
In any event, the matter of the Shiwan branch was not in itself decisive to the outcome of the NEPT review. It was instead the sum of all the deficiencies and contradictions in the applicant’s submissions that led to the rejection of the NEPT request.
As regards the publicly available information mentioned in recital 14 of the contested decision, this is a reference to several websites that mention a company called Foshan Lehua in Shiwan (Annex B 31 to the defence), to the company website with the information on Meta Tiles (Annex B 32 to the defence) and to the results of a search in the Hong Kong (China) register of companies (Annex B 34 to the defence).
In that regard, it is clear from settled case-law that the right to be heard forms an integral part of the rights of the defence and that that right guarantees every person the opportunity to make known his views effectively during an administrative procedure and before the adoption of any decision liable to affect his interests adversely (judgments of 5 November 2014, Mukarubega,
C‑166/13
,
EU:C:2014:2336
, paragraph
, and of 9 February 2017, M,
C‑560/14
,
EU:C:2017:101
, paragraph
).
The purpose of the rule that the addressee of an adverse decision must be placed in a position to submit his observations before that decision is adopted is, inter alia, to enable that person to correct an error or submit such information relating to his or her personal circumstances as will argue in favour of the adoption or non-adoption of the decision, or in favour of its having a specific content (see, to that effect, judgments of 5 November 2014, Mukarubega,
C‑166/13
,
EU:C:2014:2336
, paragraph
, and of 11 December 2014, Boudjlida,
C‑249/13
,
EU:C:2014:2431
, paragraph
and the case-law cited).
Moreover, as is apparent, in essence, from the fourth subparagraph of Article 6(6) of the Basic Regulation (now the fourth subparagraph of Article 6(6) of Regulation 2016/1036), a party seeking to refer to information provided orally must adduce proof of its existence.
In the first place, whilst the Commission states that it put questions to the applicant during the hearing before it concerning the Shiwan branch, which the applicant acknowledges in the reply, the Commission has neither drawn up minutes of the hearing nor claimed to have made a recording of it. Moreover, the Commission has been unable to identify in the case file any document in which the questions put to the applicant at the hearing regarding that branch appeared.
As regards the issue of the alleged existence of Meta Tiles, the applicant does not admit that it was raised at the hearing by the Commission.
With respect to the publicly available information, namely the various websites, nor has the Commission been able to show that that information was mentioned at the hearing or subsequently and that it had placed the applicant in a position to express its views on those matters.
Accordingly, the applicant has established that the Commission was not entitled to rely, in recitals 13 and 14 of the contested decision, on what was stated at the hearing, or on information on which the applicant could not usefully take a view.
Moreover, Foshan Lihua’s organigram, which mentions a branch in Shiwan, was already provided to the Commission in the applicant’s letter of 7 September 2013, set out in Annex B 2 to the defence. The Commission was thus able to put questions to the applicant in this regard well before the hearing.
In the second place, it is necessary to consider whether the finding made in paragraph 153 above has the effect of invalidating the finding at the end of recital 14 of the contested decision, according to which the investigation in question could not confirm that the applicant was not related to any of the exporters or producers in China subject to the measures in force.
It is apparent from recital 14 of the contested decision that the recital is based on two types of shortcomings alleged against the applicant. The first alleged shortcoming is the contradictory nature of the information submitted by the applicant in the light of the publicly available information and which concerns the findings set out in recital 13 of the contested decision, which, as was found in paragraph 153 above, was vititiated by a violation of the applicant’s rights of defence.
Recital 14 of the contested decision is also based on the incomplete nature of the information provided by the applicant. Whilst it is true that that recital may also refer to the lack of detail about the Shiwan branch, the recital relates above all to the facts found in recitals 11 and 12 of the contested decision, which were deemed to be well established in the context of the first part of the third plea.
In recitals 11 and 12 of the contested decision, the Commission referred inter alia to the lack of evidence regarding the existence and activities of the two undertakings whose existence was revealed by the requests for clarification, and in particular to the investment activities of Lihua International (HK) Holding, which is a commercial and investment company. In the absence of specific and verifiable information regarding those matters, the Commission could not be sure that the applicant’s group was not related to other companies subject to existing anti-dumping duties.
Accordingly, the fact that the applicant’s arguments in relation to recital 13 of the contested decision are well founded does not result in the final conclusion set out in recital 14 of that decision regarding the condition examined being invalidated. That is all the more so because it is apparent from the word ‘furthermore’, at the beginning of recital 13 of the contested decision, that the grounds stated in that recital are made for the sake of completeness and are ancillary to those stated in recitals 11 and 12 of the contested decision. Those arguments are therefore ineffective and must in any event be rejected, despite being well founded.
The first part of the fourth plea in law must therefore be rejected.
The second part of the plea, alleging a violation of the rights of the defence as regards recital 22 of the contested decision
In the reply, the applicant claimed that it was never informed of the fact that the representative of the EU industry was invited by the Commission to join the case. The applicant learnt of this only on the occasion of the intervention of this party in the present proceedings. It is apparent from Annex B 16 to the defence that Cerame-Unie provided the Commission with a voluminous document containing, amongst other things, allegations relating to the applicant’s group structure and export activities. According to this document, it was essential that the Commission should carefully investigate whether the applicant or any of its parts was exporting ceramic tiles during the initial investigation period. Yet this document was never made available to the applicant and so it had no opportunity to comment on it. In addition, in recital 22 of the contested decision, the Commission borrowed the form of words used by Cerame-Unie, stating that ‘it [could not] be excluded’ that it had made exports during the initial investigation period. The Commission thus based the contested decision on information on which the applicant was not given the opportunity to comment.
The Commission disputes the applicant’s arguments.
In that regard, it is necessary at the outset to examine the admissibility of this part of the plea, which was put forward only at the stage of the reply.
When questioned in this regard at the hearing before the Court, the applicant submitted that the non-submission of the arguments in question in the application was explained by the fact that those arguments were based on information of which the applicant had learnt only in the context of these judicial proceedings.
However, contrary to what the applicant claims, it is apparent from the letter of 18 September 2015 that it was informed that the Commission had received from the EU industry information regarding the investigation in question. Although the Commission did not spontaneously provide that information to the applicant, it was entirely open to the applicant to ask for that information to be communicated for the purposes of submitting its observations, which it did not do (see, to that effect, judgment of 28 February 2017, Yingli Energy (China) and Others v Council,
T‑160/14
, not published,
EU:T:2017:125
, paragraph
).
Accordingly, the arguments in question should be classified as new arguments and, therefore, be rejected as inadmissible.
In any event, the argument must also be rejected on the substance.
The applicant has failed to establish that the conclusions which Cerame-Unie reached were reproduced verbatim by the Commission in the contested decision. Recital 22 of the contested decision, with which the applicant takes issue, is the outcome of an investigation carried out by the Commission. It is true that it uses similar or even identical wording to that which appears in Cerame-Unie’s letter, namely that ‘it cannot be excluded’ that the applicant had made exports during the initial investigation period. However, that stems solely from the fact that the applicant, not the Commission, has the burden of proving whether the conditions laid down in Article 3 of the Definitive Regulation have been fulfilled.
Accordingly, the second part of the fourth plea must be rejected, and it is therefore necessary to reject that plea in its entirety.
The fifth plea in law, alleging misuse of powers and an error of law
By its fifth plea, the applicant takes issue with recitals 11, 12 and 16 to 19 of the contested decision. Recitals 11, 12, and 16 of the decision are set out in paragraph 91 above. Recitals 17 to 19 read as follows:
‘(17)
In addition, there are also serious doubts about the accuracy of the production data provided by the applicant. The average production capacity over the years 2009-2015 in the questionnaire reply is much lower than the output publicly stated by Foshan Lihua on its own website, as well as on other commercial websites.
(18)
The applicant also provided monthly internal output figures for newly introduced product types in 2013. However, when these figures are extrapolated on a yearly basis, the total yearly production of the new product range is higher than the total production capacity provided in the questionnaire reply, even though these figures exclude the classical products and do not take into account all product types within the new product range.
(19)
In addition, according to its sales figures, the total export sales figures of [Foshan Henry Trading] for the years 2011 and 2012 exceed the total claimed production capacity of Foshan Lihua. In 2013, exports by [Foshan Henry Trading] still amounted to more than 90% of the reported production capacity. The applicant claimed that this was due to differences in booking dates and sales of inventory backlogs by [Foshan Henry Trading). However, inventory backlogs cannot explain a continuous trend over a period of three years.’
In recitals 17 to 19 of the contested decision, the Commission observes in essence that there are inconsistencies in data provided by the applicant or contradictions with data displayed on the internet regarding its production capacity, its actual production and Foshan Henry Trading’s export sales.
The applicant maintains that the Commission is not entitled to ask questions that are unrelated to new exporting producer treatment. Although the applicant asked the question in its reply to the general disclosure document, the Commission has never explained how the commercial figures of a textile or carton or financing company are relevant in a case concerning ceramic tiles.
In so far as the Commission referred, in recital 16 of the contested decision, to sales records post-dating the initial investigation period, and to the extent that it based the contested decision on this point, the Commission has also made an error of law, since these sales are unrelated to the review in question.
Recital 17 of the contested decision contains a statement totally outside the scope of an NEPT review, which can only relate to exports during the initial investigation period and links to exporters. Production figures and data post-dating the initial investigation period have nothing to do with an NEPT review.
The Commission disputes the applicant’s arguments.
In that regard, it should be recalled that it is clear from settled case-law that a measure is vitiated by misuse of powers only if it appears on the basis of objective, relevant and consistent evidence to have been taken with the exclusive purpose, or at any rate the main purpose, of achieving an end other than those pleaded or of evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case (judgment of 13 November 1990, Fedesa and Others,
C‑331/88
,
EU:C:1990:391
, paragraph
; see also, to that effect, judgment of 15 July 1994, Matra Hachette v Commission,
T‑17/93
,
EU:T:1994:89
, paragraph
). It is sufficient to find, as the Commission observes, that, since the applicant has failed to establish, or even properly claim, that the Commission had adopted the contested decision for an end other than those pleaded, this plea must be rejected.
To the extent that the applicant submits that the Commission erred in law by relying, in recital 16 of the contested decision, on the detailed sales records of Foshan Lihua for the years after the initial investigation period, it must be stated that the applicant is taking issue with a ground included for the sake of completeness introduced by the word ‘furthermore’. The argument in question is therefore ineffective.
Moreover, although it was insistent in claiming that data post-dating the initial investigation period and data relating to the companies active in the textile, carton and investment fields were unrelated to the investigation in question, the applicant has not demonstrated this whatsoever (see the case-law cited in paragraph 103 above).
As the Commission essentially contends, the data referred to in the previous paragraph may be used in order to verify inter alia the information relating to the activities of the group during the initial investigation period, including the undertakings operating in the sector of the product concerned. Thus, the Commission did not manifestly go beyond what was necessary in order to investigate the matter in question.
It follows that the fifth plea must be rejected.
The sixth plea, alleging a manifest error of law
By its sixth plea, the applicant takes issue with recitals 16 and 22 of the contested decision. Those recitals were already set out in paragraphs 91 and 132 above.
In so far as concerns recital 16 of the contested decision, which states that ‘the Commission could not establish whether Foshan Lihua exported the product concerned to the Union in the [initial] investigation period’, first, the applicant argues that nobody can establish whether the applicant exported to the European Union during the initial investigation period because there were no exports. An operator wishing to obtain new exporting producer treatment should only have to provide prima facie evidence that it did not export the product under review to the European Union during the initial investigation period and that it was not related to any of the exporting producers of the goods in question that were subject to the anti-dumping duties in force, as indeed was the case for the Korean exporting producer in the procedure which resulted in the adoption of Implementing Regulation 2015/2179. Second, as an objective authority, the Commission is not required by the Basic Regulation to seek to establish the existence of such exports.
As regards recital 22 of the contested decision, the applicant maintains that the words ‘it cannot be excluded that’ find no legal basis in the Basic Regulation or in the Definitive Regulation. The Commission’s conclusion is arbitrary and conjectural. First, the Commission has presented no evidence of exports of the product concerned to the European Union made directly, via related companies or under manufacturing agreements with other unrelated companies. Second, since the burden of proof which rests on the applicant requires it to provide evidence that it did not export the product under review to the European Union during the initial investigation period and that it is not related to any of the exporting producers of the goods in question that are subject to the anti-dumping duties in force, it is pure logic that it can never be completely ruled out that there were or are no such exports or links.
It follows that these two conclusions of the Commission are vitiated by manifest errors of assessment.
In addition, in its reply the applicant submits that the arguments outlined in paragraphs 182 and 183 above also demonstrate a clear violation of the Commission’s discretion.
The Commission and the intervener dispute the applicant’s arguments.
In that regard, the sixth plea relates to matters concerning the burden of proof and the standard of proof to be adduced by the party on which that burden rests. Those matters were indeed debated and examined at length in the context of the second plea.
In the first place, it should be recalled (see paragraph 83 above) that, although the applicant repeatedly claims that it should have been granted new exporting producer treatment, since it had provided prima facie evidence that it fulfilled the necessary conditions, nothing in Article 3 of the Definitive Regulation, let alone in Article 11(4) of the Basic Regulation, suggests that such would be the standard of proof required by the legislature. In both cases, the legislature merely provided that it is the undertaking interested in obtaining new exporting producer treatment which has to demonstrate that the necessary conditions have been fulfilled.
As was found in paragraphs 82 to 90 above, (i) nothing else can be inferred from Implementing Regulation 2015/2179 and, (ii) the applicant was not discriminated against in comparison with the Korean exporting producer in question.
In the second place, whilst the applicant submits that a burden of proof which is impossible to discharge has been placed on it, it should be observed that proving a non-existent fact may indeed be impossible. However, the burden of proof on an applicant for new exporting producer treatment, both under Article 3 of the Definitive Regulation and pursuant to Article 11(4) of the Basic Regulation, is in itself in no way impossible to satisfy. The provision of complete, consistent and verifiable evidence, in particular on all its sales and on its group structure, as requested in the review questionnaire and in any requests for clarification, enables the Commission to rule out, if that was not actually the case, that the product concerned was exported to the European Union during the initial investigation period, or to conclude that the applicant is not related to any exporting producer subject to the anti-dumping duties in question.
In the third place, to the extent that the applicant takes issue with the specific wording that ‘the Commission could not establish whether Foshan Lihua exported the product concerned to the Union in the [initial] investigation period’ and ‘it cannot be excluded that, during [that period], Foshan Lihua exported the product concerned to the Union either directly, via related companies or via manufacturing agreements with other unrelated companies’, that wording stems directly (i) from the allocation of the burden of proof required in order to ascertain whether the three conditions for granting new exporting producer treatment to the operator concerned have been fulfilled and, (ii) from the standard of proof required in that context (see paragraph 188 above). Thus, contrary to what the applicant suggests, it is not for the Commission either to prove the existence of exports of the product concerned by the applicant to the European Union or of any links with undertakings subject to the anti-dumping duties in question, or to provide any indications in support of this. In order to reject an application for the grant of that treatment, it is sufficient, on the substance, that the evidence adduced by the operator in question was insufficient to substantiate its claims, as was the situation in the present case. As the Commission rightly contends, it is for the Commission, in the context of its role in investigations on whether to grant new exporting producer treatment, to verify by all means available the accuracy of the claims and evidence put forward by such an operator (see, to that effect, judgment of 22 March 2012, GLS,
C‑338/10
,
EU:C:2012:158
, paragraph
). By proceeding in this manner in the investigation that led to the adoption of the contested decision, the Commission in no way exceeded its powers, did not make a manifest error of assessment and did not depart from its position of objective authority.
In the fourth place, as regards the claim, set out in the reply, that the arguments put forward in paragraphs 182 and 183 above also demonstrate a clear violation of the Commission’s discretion, it is sufficient to note that that claim adds nothing to the arguments already submitted in the context of this plea and which were rejected in paragraphs 188 to 191 above.
It follows that the sixth plea must be rejected.
The seventh plea in law, alleging violation of the right to be heard and that the statement of reasons was based not on facts but on supposition
By its seventh plea, the applicant takes issue with recitals 17 to 22 of the contested decision. Recitals 17 to 19 of the decision are set out in paragraph 170 above and recital 22 is set out in paragraph 132 above. Recitals 20 and 21 of the contested decision are worded as follows:
‘(20)
Lastly, the applicant indicated on several websites that the Union is a target market for the company, and its ceramic tiles are described as being “EC certified since 2004” and “popular in Europe”. Therefore, the applicant has been able to export ceramic tiles to the Union since at least 2004. Thus, it seems unlikely that the applicant, after obtaining the necessary EC certificate to export the product concerned to the Union, would not have exported to the Union until 2012, [that] is, eight years after obtaining the certificate.
(21)
The applicant argued that the existence of an EC certification was no proof of exports during the [initial] investigation period, and that the EC certificate had been used for sales to African customers, as well as to Korea, Russia, Belarus and Ukraine, who value the EC standard as a quality label. However, this does not affect the Commission’s reasoning in recital 20 above. Even if the allegation that the EC certificate could be a useful marketing tool in certain countries was true, it seems unlikely that this would have in itself justified the costly process [of obtaining] EC certification if the intention was not to start exporting to the Union. Indeed, such process implies, among other things, adaptations to the production process, new testing routines, possibly design changes for [the application of] the marking and certification by a third party. On the other hand, the EC certificate is mandatory for export sales to the Union, as ceramic tiles are construction products falling under the scope of [Regulation (EU) No 305/2011 of the European Parliament and of the Council of 9 March 2011 laying down harmonised conditions for the marketing of construction products and repealing Council Directive 89/106/EEC (
OJ 2011 L 88, p. 5
)]. This argument was thus rejected.’
Referring, in particular, to the order of 18 June 1986, British American Tobacco and Reynolds Industries v Commission (
142/84
, not published,
EU:C:1986:250
, paragraph
), to the judgments of 17 November 1987, British American Tobacco and Reynolds Industries v Commission (
142/84 and 156/84
,
EU:C:1987:490
), and of 1 October 2009, Foshan Shunde Yongjian Housewares & Hardware v Council (
C‑141/08 P
,
EU:C:2009:598
, paragraph
), and to the Opinion of Advocate General Slynn in Hasselblad v Commission (
86/82
,
EU:C:1983:204
), the applicant makes the preliminary point that the right to be heard is a fundamental right which guarantees every person the opportunity to make his views known effectively during an administrative procedure and before the adoption of any decision liable to affect his interests adversely. The Commission should have taken account of the factors emerging from the answer of the undertaking concerned, in order either to abandon its objections if they proved unfounded or to amend and supplement its arguments, both in fact and in law, in support of the objections which it maintained. It should, therefore, have reviewed the findings which it made during the investigation in question and, above all, in the general disclosure document, in the light of the explanations and arguments which the applicant provided. While, according to the applicant, in its final decision, the Commission was not compelled to address all the arguments which it put forward, it should have been receptive and open to those arguments, and open to persuasion, and should have included in its final decision, at very least, the principal arguments which the applicant raised. Accordingly, the Commission was obliged to consider all the matters of fact and law which the applicant brought to its attention.
However, the Commission did not in this case observe the principle of sound administration and the right to a fair and effective hearing. Indeed, while it permitted and allowed the applicant to present its case in writing and orally, in reality the Commission totally ignored all the facts it presented and all the arguments it submitted. The applicant did not, therefore, have an effective hearing.
In so far as concerns recital 17 of the contested decision, the applicant maintains that the Commission failed to take account of the ample counterarguments it put forward in paragraph 3 of Part II of its reply of 20 December 2015 to the general disclosure document. The wording of recital 17 is exactly the same as that of recital 14 of the general disclosure document. The Commission did not indicate what ‘other commercial websites’ it was referring to in recital 17 of the contested decision, and that prevented the applicant from defending itself.
The applicant argues that it explained that the production figures which it provided the Commission with were based on the audited accounts that are in the Commission’s file. The information which the Commission took from websites, on the other hand, the purpose of which is to impress future customers, serves a totally different purpose from that served by the audited accounts and it need not be as accurate as the audited financial reports. The financial reports alone should therefore have been decisive for the Commission.
As regards recitals 18 and 19 of the contested decision, the discrepancies in question are easily explained, and the Commission was informed thereof in paragraphs 3 and 4 of the applicant’s reply to the general disclosure document. They are due to the fact that Foshan Lihua and Foshan Henry Trading are two different companies within the same group and to differences in booking dates. Under Chinese law, a producer, such as the applicant, must issue value added tax (VAT) invoices to Foshan Henry Trading after goods have been loaded and have left China. That may occur several weeks after the goods have physically left China. An exporter, such as Foshan Henry Trading, on the other hand, must declare the goods to the Chinese customs authorities at the precise time they are exported, that is at the time of their physical departure from China, and so there is often a considerable time difference in the booking dates as between the applicant and Foshan Henry Trading, especially near the end of each year, when sometimes huge quantities of goods were exported. Goods are often loaded and exported by Foshan Henry Trading in the last two months of the year, but the VAT invoices are issued by Foshan Lihua the following year. Therefore, some exports will be stored and booked only the next year by Foshan Henry Trading. This explains why 90% of production capacity is sometimes for Foshan Henry Trading exports. All this happened on a continuing basis for the years including 2013.
The Commission did not explain how it came to the conclusion, set out in recital 19 of the contested decision, that inventory backlogs cannot explain a continuous trend over a period of three years. It seems that, in China, such backlogs are quite common because of the accounting and public registering practices there.
The Commission ignored all those arguments and recitals 18 and 19 of the contested decision reproduce verbatim recitals 15 and 16 of the general disclosure document.
In so far as concerns recitals 20 to 22 of the contested decision, although the Commission accepted that EC certification is a security tool and a quality label also used in markets outside the European Union, it nevertheless asserted that it seemed unlikely that this would in itself have justified the costly process of obtaining EC certification if the intention was not to start exporting to the European Union.
In recital 22 of the contested decision, the Commission’s conclusion on this point was that, since the information provided by the applicant was incomplete and contradictory with other information available to the Commission, it could not be excluded that, during the initial investigation period, Foshan Henry Trading had exported the product concerned to the European Union directly, via related companies or via manufacturing agreements with other unrelated companies. Consequently, the investigation in question could not establish that the applicant had not exported the product in question to the European Union during the initial investigation period. By reproducing verbatim recitals 17 to 19 of the general disclosure document, the Commission ignored the counterarguments which the applicant had raised in paragraphs 5 and 6 of its reply to the general disclosure document which are set out in Annex A 5 to the application. Yet the applicant had shown how important EC certification was, even for Korean customers, compliance with EU safety standards being an important marketing tool even for sales outside the European Union, a point which the Commission ignored, maintaining its position that the high costs of the certification in 2004 showed the applicant’s intention to start exporting to the European Union.
Although it is true that the applicant had always wished to export to the European Union the Commission has no evidence whatsoever that this intention was realised, such exports unfortunately not taking place until 2013. It invested the expenditure needed to obtain EC certification in order to export not only to the European Union, but also to other markets, where such certification is an excellent marketing tool.
In recital 22 of the contested decision, the Commission described the information provided by the applicant as incomplete and contradictory, but it has been unable to explain what information was incomplete or contradictory and why that was so.
The Commission disputes the applicant’s arguments.
In that regard, and as was recalled in the context of the fourth plea, it is clear from settled case-law that the right to be heard forms an integral part of the rights of the defence and that that right guarantees every person the opportunity to make known his views effectively during an administrative procedure and before the adoption of any decision liable to affect his interests adversely (see paragraph 147 above).
The purpose of the rule that the addressee of an adverse decision must be placed in a position to submit his observations before that decision is adopted is, inter alia, to enable that person to correct an error or submit such information relating to his or her personal circumstances as will argue in favour of the adoption or non-adoption of the decision, or in favour of its having a specific content (see paragraph 148 above).
However, the fact that recitals 17 to 20 and 22 of the contested decision are worded in the same way as recitals 14 to 18 of the general disclosure document does not mean, as the Commission claims, that it had failed to take account of the applicant’s explanations and that it had thus infringed the applicant’s right to be heard during the administrative procedure. It is necessary to recall — as the main parties did — the Opinion of Advocate General Slynn in Hasselblad v Commission (
86/82
,
EU:C:1983:204
), according to which that fact indicates rather that the arguments and evidence submitted by the applicant were not capable of convincing the Commission, and the Commission therefore rejected them. Moreover, it is apparent from the applicant’s letter of 15 January 2016, sent to the Commission in order to summarise the content of the hearing of 13 January 2016, that the applicant noted that the arguments and documents provided to the Commission, including those which followed the release of the general disclosure document, had not been such as to persuade the Commission that the two conditions at issue for obtaining the new exporting producer treatment provided for in Article 3 of the Definitive Regulation had been fulfilled. Thus, the applicant cannot argue that the Commission purely and simply ignored the information that it received.
That conclusion is consistent with the case-law that the statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure in order to defend their rights and to enable the Courts to exercise their power of review. It cannot be required, however, that details of all relevant factual and legal aspects be given, in so far as the question whether the statement of the grounds for a decision meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. Moreover, the statement of reasons for the contested measure must be appraised having regard, in particular, to the information disclosed to the applicant and to its observations submitted during the administrative procedure. In particular, the statement of the reasons on which anti-dumping decisions are based is not required to specify the often very numerous and complex matters of fact and law dealt with in those decisions, provided that they fall within the general scheme of the body of measures of which they form part. In that regard, it is sufficient for the reasoning of the institutions in those decisions to appear clearly and unequivocally (see, to that effect, judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council,
T‑633/11
, not published,
EU:T:2014:271
, paragraph
and the case-law cited).
Moreover, recital 21 of the contested decision specifically responds to the observations submitted by the applicant following notification of the general disclosure document.
It follows that the applicant’s arguments by which it seeks to establish infringement of its right to be heard by the mere fact that several grounds in the contested decision and the general disclosure document are identical must be rejected.
It is now necessary to examine the applicant’s particular criticisms levelled against the specific recitals of the contested decision.
In the first place, as regards the criticisms levelled against recital 17 of the contested decision (see paragraphs 197 and 198 above), the applicant’s argument that it was not able to express a view on the sources of information to which the Commission refers is contradicted by the second request for clarification set out in Annex B 18 to the defence. The Commission clearly states that its sources of information are the applicant’s own website and that of Global Manufacturer Certification (‘GMC’), an internationally renowned company, which audited the applicant in 2009 as part of a certification procedure. That argument must therefore be rejected.
Whilst the applicant claims that it submitted in its reply to the general disclosure document explanations in this regard, it must be stated that the two letters set out in Annex A 6 to the application contain no information capable of explaining the differences in terms of production capacity between the reply given in the questionnaire and the data which emerge from both its website and GMC’s website. The argument must therefore be rejected.
As regards the argument that the applicant’s replies to the questionnaire are based on its audited reports submitted to the Commission, it must be stated that the applicant does not identify where exactly the necessary information is to be found in the Court’s case file. The applicant does not moreover rebut the Commission’s argument that those audits do not contain the information in question.
Moreover, it is not credible to attempt to explain such significant discrepancies as those noted by the Commission by the argument that the information provided on its own website, or on GMC’s website, is not accurate, since it was not obtained following rigorous analysis. That argument cannot therefore succeed.
In any event, it should be pointed out that, before the Court, the applicant merely put forward general claims. The applicant carried out no analysis to show that the figures relied on by the Commission were incorrect or that the conclusions at which the Commission arrived were manifestly incorrect.
In the second place, although recital 18 of the contested decision is mentioned as one of the contested recitals, the applicant acknowledged at the hearing before the Court that it had not levelled any specific criticism against it. It must therefore be held that the applicant has not established that the grounds relied on in that recital were vitiated by the illegality claimed in this plea.
In the third place, as regards recital 19 of the contested decision, it is sufficient to note that the applicant has not demonstrated the existence of the Chinese VAT rule on which it relies (see, to that effect, judgment of 12 October 2017, Moravia Consulting v EUIPO — Citizen Systems Europe (SDC‑444S),
T‑318/16
, not published,
EU:T:2017:719
, paragraph
). In addition, the applicant has not proved that most of its exports actually occurred near the end of each year. It is apparent furthermore from Annex B 12 to the defence that, between 2009 and 2015, Foshan Henry Trading’s sales during the last two months of each of those years do not exceed whatsoever the sales achieved during the other months. Moreover, the Commission is right in arguing that the differences in the booking dates can only explain a shift in volumes over a single year. Yet the applicant asserts that the situation recurred without interruption for the years including 2013. Thus, if the same shift occurs over a period of several years there is no longer a discrepancy, because whatever volume is not booked in one year will need to be booked in the following year and the overall volume over the years will remain constant or will be very similar. The arguments submitted against recital 19 of the contested decision must therefore be rejected.
In the fourth place, as regards the arguments relating to the effects of the applicant’s possession of EC certification on the assessment of the condition that an applicant for new exporting producer treatment must demonstrate that it has not exported the product concerned to the European Union during the initial investigation period, the Commission’s conclusions must be assessed in the context of the case. The Commission accepts that such certification may constitute a marketing tool in certain third countries. However, the cost and effort which must be committed to obtaining that certification are such that it would be pointless to seek to obtain it in the absence of a clear intention to also export the product concerned to the European Union. The applicant expressly admitted in the application that it had always wanted to export the product concerned to the EU. It is true that this does not demonstrate that the applicant actually exported to the EU during the initial investigation period. However, its intention to export to the EU from 2002 onwards, coupled with the obtaining of that certification, is a factor which, considered in the light of the contradictory nature of certain information provided by the applicant and of its failure to provide the necessary information, is such as to strengthen the conclusion, set out in recital 22 of the contested decision, that it did not demonstrate that there were no exports to the EU during the period in question.
Given that that conclusion is already sufficiently apparent from recitals 16 to 19 of the contested decision, the explanations set out in recitals 20 and 21 of the contested decision must be regarded as having been included for the sake of completeness. That is so all the more since the applicant, in its letter of 15 January 2016, which summarises the content of the hearing of 13 January 2016, essentially stated that it had taken note of the fact that the Commission’s ground relating to the EC standards was another factor.
Accordingly, even if the applicant’s arguments directed against recitals 20 and 21 of the contested decision are well founded, this cannot invalidate the conclusion set out in recital 22 of that decision, regarding the condition examined. Moreover, it should again be recalled that that recital is also based on the circumstance, already mentioned in recital 18 of the general disclosure document, that the Commission could not be sure that the applicant had not exported the product concerned to the European Union under manufacturing agreements entered into with unrelated companies. It has been established that the applicant’s argument that almost all, or all, of its exports before 2013 were made through the trading company Foshan Guangchengda Import & Export is contradicted both by the document submitted in Annexes B 19 and B 29 to the defence, from which it is apparent that the applicant also sold substantial quantities of its products to other export undertakings, and by the applicant’s own statements, according to which it sold its goods to an independent trader in Malaysia in 2009. However, it has not referred to any evidence capable of establishing that its products were not subsequently exported by those undertakings to the European Union. It acknowledged rather that it had lost track of those products after selling them to traders.
The seventh plea must therefore be rejected.
The eighth plea in law, alleging infringement of Article 9.5 of the Anti-Dumping Agreement
The applicant argues that, by requiring it to provide evidence of a representative or any other volume of exports to the European Union after the initial investigation period, the Commission imposed an unlawful condition on it, one that is not contemplated by Article 9.5 of the Anti-Dumping Agreement.
The Commission disputes the applicant’s arguments.
In that regard, recital 10 of the contested decision establishes that the applicant was an exporting producer of the product concerned and that it had actually made exports to the European Union following the initial investigation period. Thus, any finding that the third condition laid down in Article 3 of the Definitive Regulation is not consistent with Article 9.5 of the Anti-Dumping Agreement would not result in an improvement in the applicant’s legal situation. This plea is therefore ineffective.
Accordingly, the eighth plea must be rejected, and the action must therefore be dismissed in its entirety.
Costs
Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
Since the applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those of the Commission, in accordance with the form of order sought by the latter.
Under Article 138(3) of the Rules of Procedure, the Court may order an intervener other than those referred to in paragraphs 1 and 2 of that article to bear its own costs. In the present case, it is appropriate to decide that the intervener shall bear its own costs.

On those grounds,
THE GENERAL COURT (Fourth Chamber)
hereby:

1.
Dismisses the action;

2.
Orders Foshan Lihua Ceramic Co. Ltd to bear its own costs and to pay those incurred by the European Commission;

3.
Orders Cerame-Unie AISBL to bear its own costs.

Kanninen
Schwarcz
Iliopoulos
Delivered in open court in Luxembourg on 20 March 2019.
E. Coulon
Registrar
G. Berardis
President
(
*1
)	Language of the case: English.