# C_2021044EN.01005401.xml

| 8.2.2021 | EN | Official Journal of the European Union | C 44/54 |
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8.2.2021

EN

Official Journal of the European Union

C 44/54

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Action brought on 14 December 2020 — Guangdong Haomei New Materials and Guangdong King Metal Light Alloy Technology v Commission

(Case T-725/20)

(2021/C 44/77)

Language of the case: Italian

Parties

Applicants: Guangdong Haomei New Materials Co. Ltd (Qingyuan, China), Guangdong King Metal Light Alloy Technology Co. Ltd (Yuan Tan Town, China) (represented by: M. Maresca, C. Malinconico, D. Guardamagna, M. Guardamagna, D. Maresca, A. Cerruti, A. Malinconico and G. La Malfa Ribolla, lawyers)

Defendant: European Commission

Form of order sought

The applicants claim that the Court should annul Commission Implementing Regulation (EU) 2020/1428 of 12 October 2020, published in the Official Journal of the European Union on 13 October 2020, imposing a provisional anti-dumping duty on aluminium extrusions originating in the People’s Republic of China imported by the applicants and, in the alternative, annul the basic regulation (Regulation 1036/2016) and order the Commission to pay the costs.

Pleas in law and main arguments

In support of the action, the applicants rely on eight pleas in law.

| 1. | First plea in law, alleging infringement of the TFEU and the legal rules governing the application of the Treaty, infringement of the articles of the basic regulation relating to the obligation to ascertain specifically that the requirements for dumping have been met, infringement of the principles of due process, audi alteram partem, and good administration referred to in Article 41 of the EU Charter of Fundamental Rights, and of the principle that the best information available must be used, infringement of essential procedural requirements, misuse of powers due to the generic nature of the objections and failure genuinely to verify the information provided in the spirit of cooperation.






  — | The applicants submit in that regard that the contested regulation is vitiated by unlawfulness in so far as the Commission failed to ascertain specifically the conditions of the markets considered and the applicants were not given the opportunity substantively to exercise their rights of defence. In short, Haomei and King Metal were found liable for dumping, and countervailing duties accordingly imposed on them, not on account of their conduct in respect of exports from China, but rather due to a complex favourable assessment of the Chinese economy, and therefore for entirely generic reasons. Satisfied with this, the Commission failed to carry out any specific assessment of the documents provided by the applicant undertakings. |
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1.

First plea in law, alleging infringement of the TFEU and the legal rules governing the application of the Treaty, infringement of the articles of the basic regulation relating to the obligation to ascertain specifically that the requirements for dumping have been met, infringement of the principles of due process, audi alteram partem, and good administration referred to in Article 41 of the EU Charter of Fundamental Rights, and of the principle that the best information available must be used, infringement of essential procedural requirements, misuse of powers due to the generic nature of the objections and failure genuinely to verify the information provided in the spirit of cooperation.

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The applicants submit in that regard that the contested regulation is vitiated by unlawfulness in so far as the Commission failed to ascertain specifically the conditions of the markets considered and the applicants were not given the opportunity substantively to exercise their rights of defence. In short, Haomei and King Metal were found liable for dumping, and countervailing duties accordingly imposed on them, not on account of their conduct in respect of exports from China, but rather due to a complex favourable assessment of the Chinese economy, and therefore for entirely generic reasons. Satisfied with this, the Commission failed to carry out any specific assessment of the documents provided by the applicant undertakings.

| 2. | Second plea in law, alleging infringement of the TFEU and the legal rules governing the application of the Treaty, and the absence of dumping with regard to the criteria set out in the basic regulation, infringement of the articles of the basic regulation relating to the determination of dumping margins (Article 2, paragraph 6a in particular), incorrect identification of the ‘normal’ price of the goods under investigation, application of provisional duties not on account of the (unestablished) liability of the exporters but in reaction to the overall structure of the Chinese economy, misuse of powers, and failure to investigate and to state reasons.






  — | The applicants allege unlawfulness in that regard stemming from the fact that the Commission conducted an investigation that was incomplete and in any event led to an uncertain outcome; that outcome was also vitiated by the unlawfulness deriving from the regulation on the registration of goods, which is already the subject of an action before the Court, in so far as the Commission included goods codes (7610 90 90) in the investigation which, by its own admission, should not have been included as they relate to goods that are different to those subject to investigation. Such an error (having permitted the inclusion of different goods) eliminates both the dumping conditions (in so far as the very low relative price inevitably and artificially reduces the average price) and injury to the Union industry, as the quantities involved are considerable in respect of the total volume of the goods, such as to render irrelevant the impact of the remaining part of the product imported into the European Union. |
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2.

Second plea in law, alleging infringement of the TFEU and the legal rules governing the application of the Treaty, and the absence of dumping with regard to the criteria set out in the basic regulation, infringement of the articles of the basic regulation relating to the determination of dumping margins (Article 2, paragraph 6a in particular), incorrect identification of the ‘normal’ price of the goods under investigation, application of provisional duties not on account of the (unestablished) liability of the exporters but in reaction to the overall structure of the Chinese economy, misuse of powers, and failure to investigate and to state reasons.

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The applicants allege unlawfulness in that regard stemming from the fact that the Commission conducted an investigation that was incomplete and in any event led to an uncertain outcome; that outcome was also vitiated by the unlawfulness deriving from the regulation on the registration of goods, which is already the subject of an action before the Court, in so far as the Commission included goods codes (7610 90 90) in the investigation which, by its own admission, should not have been included as they relate to goods that are different to those subject to investigation. Such an error (having permitted the inclusion of different goods) eliminates both the dumping conditions (in so far as the very low relative price inevitably and artificially reduces the average price) and injury to the Union industry, as the quantities involved are considerable in respect of the total volume of the goods, such as to render irrelevant the impact of the remaining part of the product imported into the European Union.

| — | In the second place, the applicants submit that the absence of a specific determination of their situation is incompatible with the Treaty (and the rules cited) in so far as it establishes a regime of strict or vicarious liability, which runs counter to the fundamental principles of legal certainty and legitimate expectations (judgments of the Court of Justice of 3 December 1998, Belgocodex (C-381/97) and of 26 April 2005, ‘Goed Wonen’ (C-376/02) by reason of market price and cost structure, manifestly of the market, produced by the applicants on several occasions to — and completely ignored by — the Commission (as the positions expressed on the market economy by the Chinese Government were similarly ignored). This led to manifest unlawfulness, both as regards the substance (relating to the concepts of normal value, significant distortion, access to credit, tax regime, insolvency regime, representative countries and choice of those countries) and as regards procedure, set out at length in the present plea, resulting in a clear and detrimental discriminatory effect. |
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In the second place, the applicants submit that the absence of a specific determination of their situation is incompatible with the Treaty (and the rules cited) in so far as it establishes a regime of strict or vicarious liability, which runs counter to the fundamental principles of legal certainty and legitimate expectations (judgments of the Court of Justice of 3 December 1998, Belgocodex (C-381/97) and of 26 April 2005, ‘Goed Wonen’ (C-376/02) by reason of market price and cost structure, manifestly of the market, produced by the applicants on several occasions to — and completely ignored by — the Commission (as the positions expressed on the market economy by the Chinese Government were similarly ignored). This led to manifest unlawfulness, both as regards the substance (relating to the concepts of normal value, significant distortion, access to credit, tax regime, insolvency regime, representative countries and choice of those countries) and as regards procedure, set out at length in the present plea, resulting in a clear and detrimental discriminatory effect.

| 3. | Third plea in law, alleging absence of injury, infringement of the basic regulation (Articles 1, 2 and 7(1)(c)), failure to investigate, manifest error and distortion of the facts relating to market shares, absence of a causal link, and failure to take account of the absence of variation in the total flow of imports.






  — | The applicants submit in that regard that the contested regulation is unlawful because, departing from the objective of anti-dumping, it considers that the Chinese competitors Haomei and King Metal cause injury to the Union industry, in a context of significant growth in consumption and profitability of the aluminium industry. However, there has been no finding of undercutting or underselling, required by the case-law as necessary for a finding of injury. On the contrary, in the applicants’ case, the absence of undercutting and underselling has been established (by way of the various documents produced in the body of the plea) from the ex works prices of Haomei and King Metal, which are comparable with European prices (DOC.3, Bauxite report). |
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3.

Third plea in law, alleging absence of injury, infringement of the basic regulation (Articles 1, 2 and 7(1)(c)), failure to investigate, manifest error and distortion of the facts relating to market shares, absence of a causal link, and failure to take account of the absence of variation in the total flow of imports.

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The applicants submit in that regard that the contested regulation is unlawful because, departing from the objective of anti-dumping, it considers that the Chinese competitors Haomei and King Metal cause injury to the Union industry, in a context of significant growth in consumption and profitability of the aluminium industry. However, there has been no finding of undercutting or underselling, required by the case-law as necessary for a finding of injury. On the contrary, in the applicants’ case, the absence of undercutting and underselling has been established (by way of the various documents produced in the body of the plea) from the ex works prices of Haomei and King Metal, which are comparable with European prices (DOC.3, Bauxite report).

| — | In addition, the applicants submit that the European Union has no interest whatsoever in the duty being imposed, the sole interest being that of the complainants, which the Commission merely ‘adopted’ as its own reasoning, extending it, without analysis, to the entire European Union. In that connection, the applicants argue that the Commission, again, completely failed to take into account the information produced by the applicants during the procedure, which was also not examined during the adversarial proceedings (oral or written) or in the regulation. |
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In addition, the applicants submit that the European Union has no interest whatsoever in the duty being imposed, the sole interest being that of the complainants, which the Commission merely ‘adopted’ as its own reasoning, extending it, without analysis, to the entire European Union. In that connection, the applicants argue that the Commission, again, completely failed to take into account the information produced by the applicants during the procedure, which was also not examined during the adversarial proceedings (oral or written) or in the regulation.

| 4. | Fourth plea in law, alleging absence of a causal link between dumping and injury, infringement of Articles 1, 2 and 7(1)(c) of the basic regulation, failure to take account of the impact of COVID-19 on commercial flows, on the purpose of the anti-dumping procedure and on the adoption of the provisional duties, incomplete and incorrect assessment of the effects of other factors, and failure to assess the applicants’ observations.






  — | The applicants submit in that regard that, despite the seriousness and relevance of the pandemic for international trade, which has already caused unprecedented economic events (for example, the sale of oil at negative prices), the Commission did not consider it appropriate to carry out not just a study, but also not even a minimum of documentary analysis of the effects of COVID-19 on international trade and to include it in the investigation. |
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4.

Fourth plea in law, alleging absence of a causal link between dumping and injury, infringement of Articles 1, 2 and 7(1)(c) of the basic regulation, failure to take account of the impact of COVID-19 on commercial flows, on the purpose of the anti-dumping procedure and on the adoption of the provisional duties, incomplete and incorrect assessment of the effects of other factors, and failure to assess the applicants’ observations.

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The applicants submit in that regard that, despite the seriousness and relevance of the pandemic for international trade, which has already caused unprecedented economic events (for example, the sale of oil at negative prices), the Commission did not consider it appropriate to carry out not just a study, but also not even a minimum of documentary analysis of the effects of COVID-19 on international trade and to include it in the investigation.

| — | The applicants submit that the Commission then failed to carry out any assessment of other factors that clearly influence the analysis: first, the growth — albeit slight — of imports from other countries such as Russia and, secondly, the rise in European worldwide exports of aluminium (paragraph 284 et seq.). The clear effect of those factors is to break the causal link between dumping and injury. |
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The applicants submit that the Commission then failed to carry out any assessment of other factors that clearly influence the analysis: first, the growth — albeit slight — of imports from other countries such as Russia and, secondly, the rise in European worldwide exports of aluminium (paragraph 284 et seq.). The clear effect of those factors is to break the causal link between dumping and injury.

| 5. | Fifth plea in law, alleging unlawfulness stemming from the registration regulation.






  — | The applicants submit in that regard that the Commission did not identify clearly the object of the imports subject to investigation and, in order to justify this, referred to an ongoing exchange of information with DG TAXUD and the ongoing examination of certain TARIC data in order to establish whether they are relevant to the analysis. |
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5.

Fifth plea in law, alleging unlawfulness stemming from the registration regulation.

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The applicants submit in that regard that the Commission did not identify clearly the object of the imports subject to investigation and, in order to justify this, referred to an ongoing exchange of information with DG TAXUD and the ongoing examination of certain TARIC data in order to establish whether they are relevant to the analysis.

| — | However, the need for the measure must be established on the basis of technical matters that are not open to question. The absence or inadequacy of such analysis also leads to a direct infringement of the free movement of goods in so far as the registration is detrimental to the subsequent marketability of the imported goods, even following their entry into EU territory. |
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However, the need for the measure must be established on the basis of technical matters that are not open to question. The absence or inadequacy of such analysis also leads to a direct infringement of the free movement of goods in so far as the registration is detrimental to the subsequent marketability of the imported goods, even following their entry into EU territory.

| 6. | Sixth plea in law, alleging manifest error of assessment in determining the level of the measures, infringement of Article 14(5) of the basic regulation from another perspective, incorrect and arbitrary identification of the amount of the duties, failure to investigate, manifest error of assessment, and misuse of powers.






  — | The applicants submit in that regard that there are errors in the determination of the level of the measures (paragraph 330 et seq.). The rate of 30,4 % for Haomei and King Metal has been derived arbitrarily from the confidential version of the anti-dumping complaint of EA. The Commission, despite stating that it has drawn sufficient evidence from the information contained in the notice of initiation and in the complaint, arbitrarily determined a single dumping margin for all the extrusions. The misuse of powers, in respect of the purpose of the protection from harm that the Union industry might suffer, is manifest. |
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6.

Sixth plea in law, alleging manifest error of assessment in determining the level of the measures, infringement of Article 14(5) of the basic regulation from another perspective, incorrect and arbitrary identification of the amount of the duties, failure to investigate, manifest error of assessment, and misuse of powers.

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The applicants submit in that regard that there are errors in the determination of the level of the measures (paragraph 330 et seq.). The rate of 30,4 % for Haomei and King Metal has been derived arbitrarily from the confidential version of the anti-dumping complaint of EA. The Commission, despite stating that it has drawn sufficient evidence from the information contained in the notice of initiation and in the complaint, arbitrarily determined a single dumping margin for all the extrusions. The misuse of powers, in respect of the purpose of the protection from harm that the Union industry might suffer, is manifest.

| 7. | Seventh plea in law, alleging infringement of the General Agreement on Tariffs and Trade (‘GATT’) and, in the alternative, the unlawfulness of the basic regulation if it is not interpreted in accordance with international agreements.






  — | The applicants submit in that regard that Regulation 2020/1428, adopted by the Commission on the legal basis of Article 207 TFEU, departs from the concepts provided for by the relevant international law. If this should not be the case, that is, in other words, if no unlawfulness vitiates Regulation 2020/1428 directly, then the basic regulation itself is unlawful. |
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7.

Seventh plea in law, alleging infringement of the General Agreement on Tariffs and Trade (‘GATT’) and, in the alternative, the unlawfulness of the basic regulation if it is not interpreted in accordance with international agreements.

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The applicants submit in that regard that Regulation 2020/1428, adopted by the Commission on the legal basis of Article 207 TFEU, departs from the concepts provided for by the relevant international law. If this should not be the case, that is, in other words, if no unlawfulness vitiates Regulation 2020/1428 directly, then the basic regulation itself is unlawful.

| 8. | Eighth plea in law, alleging infringement of the European Convention of Human Rights in relation to the procedure imposing a penalty equivalent to a penalty under criminal law as concerns the effects produced on the exporting undertakings.






  — | The applicants submit in that regard that, for the applicant undertakings, the application of those duties constitutes an obstacle to the pursuit of their activities, causing irreparable harm comparable to that of a penalty under criminal law, as the European Court of Human Rights has held on many occasions. |
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8.

Eighth plea in law, alleging infringement of the European Convention of Human Rights in relation to the procedure imposing a penalty equivalent to a penalty under criminal law as concerns the effects produced on the exporting undertakings.

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The applicants submit in that regard that, for the applicant undertakings, the application of those duties constitutes an obstacle to the pursuit of their activities, causing irreparable harm comparable to that of a penalty under criminal law, as the European Court of Human Rights has held on many occasions.

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