Judgment — ECLI:EU:T:2017:372
Date: 2017-06-01
Language of the case: English
Court formation: Eighth Chamber
Subject matter: Dumping;External relations;Commercial policy
Procedure: Action for annulment - unfounded;Action for annulment - successful

summary of the facts and the essential considerations regarding the determination of the dumping, in particular in recitals 15 to 35 thereof. That complaint must therefore be rejected. 103 Lastly, as regards the alleged infringement of Article 18(4) of the basic regulation, it should be recalled that, according to recital 20 of the contested regulation, as well as the MET disclosure and the final disclosure document, the reason that the evidence and arguments provided by the applicant were rejected was that, despite that evidence and those arguments, the applicant had been unable to explain the low price of benzene on the market of the People’s Republic of China. Accordingly, the complaint alleging infringement of Article 18(4) of the basic regulation must also be rejected. 104 In the light of the foregoing, the third plea must therefore be rejected as unfounded. The fourth plea, alleging infringement of the second subparagraph of Article 2(7)(c) of the basic regulation Arguments of the parties 105 By its fourth plea, the applicant alleges infringement of the second subparagraph of Article 2(7)(c) of the basic regulation. It claims that, while a determination whether it meets the criteria for MET must be made within three months of the initiation of the investigation, in the present case this took six months. 106 It submits that if that question had been determined within the three-month time limit, the contested regulation and the anti-dumping duties could have been different. In that regard, it states that the Commission based its decision refusing MET on information obtained during the on-site verifications which took place after expiry of the three-month period, in particular as regards the purchase price of benzene. Therefore, it takes the view that had the decision been adopted within the prescribed period, the outcome would have been to grant MET to it, since at that time the institutions did not have information regarding the purchase price of benzene, which was fundamental to the refusal to grant it that treatment. 107 Furthermore, it notes that the questions relating to the alleged export duty on benzene and the absence of refund of VAT were raised after the expiry of the three‑month period, as is apparent from the administrative file. 108 In the reply, the applicant states that had the dumping margin been calculated on the basis of the information that it provided, it would have been significantly lower than that set by the contested regulation. 109 Moreover, according to the case-law, the three-month period is intended to ensure that the question whether an exporting producer satisfies the MET criteria is not decided on the basis of its effect on the calculation of the anti-dumping duties, which was not complied with in the present case. 110 The Council, supported by the intervening companies, disputes the applicant’s arguments. Findings of the Court 111 As provided in the second subparagraph of Article 2(7)(c) of the basic regulation, in the version in force at the material time, a determination whether the producer meets the criteria referred to in the first subparagraph of that provision is to be made within three months of the initiation of the investigation, after specific consultation of the Advisory Committee and after the Union industry has been given an opportunity to comment. This determination is to remain in force throughout the investigation. 112 On 29 July 2011, the Commission published the notice of initiation of the partial interim review procedure, under Article 11(3) of the basic regulation. Accordingly, the three-month period expired on 29 October 2011. However, the Commission sent the applicant its MET disclosure on 1 February 2012. 113 As a preliminary point, it must be made clear that the second subparagraph of Article 2(7)(c) of the basic regulation does not contain any indication as regards the consequences of the Commission’s failure to comply with the three-month period. According to the case-law, any failure to comply with that period does not automatically entail the annulment of the regulation adopted subsequently (see, to that effect, judgments of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precisionv Council, T‑299/05, EU:T:2009:72, paragraphs 115 and 116, and of 10 October 2012, Ningbo Yonghong Fastenersv Council, T‑150/09, not published, EU:T:2012:529, paragraph 53). 114 Moreover, as Article 2(7)(b) of the basic regulation provides for an exception to the method of determining normal value referred to in Article 2(7)(a), that exception must be interpreted strictly. It cannot, therefore, automatically apply where the Commission exceeds the three-month period, in the absence of a provision to that effect (judgment of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precisionv Council, T‑299/05, EU:T:2009:72, paragraph 121). 115 It has been held that an irregularity such as the failure to comply with the three-month period cannot affect the lawfulness of the contested regulation unless the applicant shows that, if the answer to the MET claim had been provided within the time limits, it could have been different, and more favourable to the interests of that party (judgment of 25 October 2011, Transnational Company ‘Kazchrome’and ENRC Marketingv Council, T‑192/08, EU:T:2011:619, paragraph 303; see also, to that effect, judgments of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precisionv Council, T‑299/05, EU:T:2009:72, paragraph 138, and of 18 September 2012, Since Hardware (Guangzhou)v Council, T‑156/11, EU:T:2012:431, paragraph 160). 116 In the present case, the applicant submits that, had the decision been adopted within the prescribed period, it would have been favourable, since at that time the institutions did not have information regarding the purchase price of benzene, which was decisive for refusing it MET. That line of argument cannot be accepted. 117 First, it should be recalled that, as was stated in paragraph 45 above, the burden of proof that it complies with the conditions set out in Article 2(7)(c) of the basic regulation lies with the applicant. 118 Second, it should be pointed out that, according to the notice of initiation of the partial interim review procedure, the companies supporting that request had provided prima facie evidence showing that the applicant derived benefits from certain State measures which distorted the actual cost base of its production. Thus, the institutions had certain doubts that the applicant could still be granted MET, in the light in particular of the claim that it was buying benzene at distorted prices. 119 Third, despite that, in its MET claim, the applicant did not provide any data regarding the price of its benzene purchases. Accordingly, in its request for information of 3 October 2011, the Commission expressly requested the applicant to provide evidence that the price of its benzene purchases reflected market values. In reply to that request, on 17 October 2011, namely before the expiry of the three-month period, the applicant specified that its benzene was produced from coke, rather than from petroleum, and provided data relating to its purchase price in the form of a chart. The Commission checked that data during a verification visit of 14 and 15 November 2011, namely after the expiry of the period in question. 120 In the light of the foregoing, it must be held that, at the time the three-month period expired, the applicant had failed to produce sufficient evidence that it complied in particular with the condition laid down in the second part of the first indent of Article 2(7)(c) of the basic regulation. In actual fact, at that time, the institutions had strong indications that the applicant did not satisfy that condition. 121 None of the applicant’s arguments is such as to invalidate that conclusion. 122 In the first place, the findings relating to the alleged duty on the export of benzene and to the absence of the VAT refund on the export also relate to the question whether the price of the applicant’s benzene purchases substantially reflected market values, which had been called into question before the expiry of the three‑month period. 123 In the second place, as the Council rightly observes, the calculations of the dumping margins provided by the applicant in the reply are merely its own calculations. That does not show that, if the MET decision had been adopted within the prescribed period, the Council would have had to accept those calculations or even make similar calculations. Moreover, those calculations appear to be based on the premiss that the applicant ought to have been granted MET since they appear to carry out a comparison between the sale price on the Chinese domestic market and the export sale price. In the light of the foregoing, that premiss is incorrect. 124 In the third place, contrary to what the applicant appears to suggest, the case-law that it cites does not lead to the conclusion that the contested regulation must be annulled on account of the fact that, where the MET decision was adopted after the expiry of the three-month period, the Commission had all the information necessary to calculate what its dumping margin would be if MET was granted (judgments of 14 November 2006, Nanjing Metalinkv Council, T‑138/02, EU:T:2006:343, paragraph 44; of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precisionv Council, T‑299/05, EU:T:2009:72, paragraph 127; and of 10 October 2012, Shanghai Biaowu High-Tensile Fastener and Shanghai Prime Machineryv Council, T‑170/09, not published, EU:T:2012:531, paragraph 50). 125 In actual fact, that case-law establishes that the last sentence of Article 2(7)(c) of the basic regulation prohibits the institutions, after they have adopted an MET decision, from then altering that original decision on the basis of its effect on the calculation of the dumping margin. However, the institutions may alter that original decision if new evidence is adduced or even in the absence of new evidence in certain situations in the light of the principles of compliance with the law and sound administration (see, to that effect, judgments of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precisionv Council, T‑299/05, EU:T:2009:72, paragraph 127, and of 8 November 2011, Zhejiang Harmonic Hardware Productsv Council, T‑274/07, not published, EU:T:2011:639, paragraphs 37 to 39). In any event, it is sufficient to note that, in the present case, the institutions did not alter the MET decision since that treatment was never granted during the partial interim review investigation. 126 In the light of the foregoing, the fourth plea must be rejected as unfounded. The fifth plea, alleging infringement of Article 20(2) of the basic regulation and of the rights of the defence Arguments of the parties 127 By its fifth plea, the applicant alleges infringement of Article 20(2) of the basic regulation and of the rights of the defence. 128 In particular, it notes that, in the final disclosure document of 11 April 2012, the Commission stated that normal value was established on the basis of the information received from the cooperating producer in the analogue country, namely Argentina. Although that producer sold the product concerned on its domestic market, given the differences in the production method between Argentina and the People’s Republic of China, it was decided to construct normal value, rather than use the sales prices on the domestic market. Accordingly, normal value for L+ tartaric acid, which was produced by the Argentinian producer, was constructed from the cost of production in Argentina, taking into account the differences in production method. Given that the Argentinian producer did not manufacture DL tartaric acid, the normal value of that acid was constructed using the difference in price found between the two product types. The disclosure document stated that, for confidentiality reasons, it was not possible to give more detailed information regarding the normal value as only one Argentinian producer cooperated fully in the proceeding. 129 The applicant adds that, in its comments of 25 April 2012 on the final disclosure document, it stated that the Commission had not provided meaningful information on the method used for calculating normal value for DL tartaric acid, in particular as to the source of the prices of L+ tartaric acid and DL tartaric acid and the factors affecting the price comparison. 130 The applicant submits that the rejection, in recital 38 of the contested regulation, of its request relating to the construction of the normal value of DL tartaric acid, on the ground that it would be impossible to provide such information without disclosing the methods and costs of production of the Argentinian producer concerned, constitutes an infringement of the rights of the defence and of Article 20(2) of the basic regulation. 131 In that regard, the applicant states that, since the producer in the analogue country did not produce DL tartaric acid, it would appear that, in order to calculate a normal value for DL tartaric acid, the institutions, first, compared certain prices of L+ tartaric acid and DL tartaric acid and, second, applied that difference to the normal value calculated for L+ tartaric acid in the analogue country. It was not in a position to make known its position as regards the accuracy of the price comparison made in the contested regulation between L+ tartaric acid and DL tartaric acid. Furthermore, according to the applicant, the data concerning DL tartaric acid could not constitute confidential information of the producer in the analogue country since it did not produce that product. In any event, it would have been possible to send the confidential information in summarised form or by indicating the order of magnitude rather than precise figures. 132 The Council contends that that claim is vague and unfounded. The Council disclosed the methodology and explained which factors were adjusted. In particular, the contested regulation explained that the institutions used the L+ tartaric acid production costs of the producer in the analogue country, replaced the cost of the raw material in Argentina with an average market price for benzene and adjusted the selling, general and administrative expenses in the analogue country. For DL tartaric acid, the contested regulation took account of the price difference between L+ tartaric acid and DL tartaric acid to construct the normal value. The Council maintains that it could not provide the data used in the calculations of the normal value for L+ tartaric acid without revealing confidential commercial information relating to the analogue country producer. 133 In the rejoinder, the Council adds that it was obvious that the institutions relied on the export price from the People’s Republic of China in order to calculate the price difference between L+ tartaric acid and DL tartaric acid. 134 In reply to the questions put by the Court at the hearing, the Council and the Commission specified that they had relied on the prices charged by the applicant and the other cooperating Chinese exporting producer in order to calculate the price difference between L+ tartaric acid and DL tartaric acid. Given that the applicant’s prices were one of two components for calculating that difference, if the institutions had provided that data, the applicant would have been able to deduce its competitor’s prices, which constituted sensitive commercial information. 135 The intervening companies submit that the institutions could legitimately refuse to communicate sensitive commercial information relating to a competitor’s production costs. 136 In its observations on the statement in intervention, the applicant states that it did not request information regarding the analogue country producer. Findings of the Court 137 By its fifth plea, the applicant pleads infringement of the rights of the defence and of Article 20(2) of the basic regulation in so far as the institutions had not provided meaningful information on the method used for calculating normal value for DL tartaric acid, in particular as to the source of the prices of L+ tartaric acid and DL tartaric acid and the factors affecting the price comparison. 138 As provided in Article 20(2) of the basic regulation, the parties may request final disclosure of the essential facts and considerations on the basis of which it is intended to recommend the imposition of definitive measures, or the termination of an investigation or proceedings without the imposition of measures. 139 According to settled case-law, respect for the rights of the defence is, in all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of EU law which must be guaranteed even in the absence of any rules governing the proceedings in question (see judgment of 1 October 2009, Foshan ShundeYongjian Housewares & Hardwarev Council, C‑141/08 P, EU:C:2009:598, paragraph 83 and the case-law cited). Respect for that principle is of crucial importance in anti-dumping investigations (see judgment of 16 February 2012, Council and Commission v Interpipe Niko Tube and Interpipe NTRP, C‑191/09 P and C‑200/09 P, EU:C:2012:78, paragraph 77 and the case-law cited). 140 In accordance with that principle, the undertakings concerned should have been placed in a position during the administrative procedure in which they could effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegation concerning the existence of dumping and the resultant injury (judgment of 16 February 2012, Council and Commission v Interpipe Niko Tube and Interpipe NTRP, C‑191/09 P and C‑200/09 P, EU:C:2012:78, paragraph 76). 141 In addition, according to the case-law in performing their duty to provide information, the EU institutions must act with all due diligence by seeking to provide the undertakings concerned, as far as is compatible with the obligation not to disclose business secrets, with information relevant to the defence of their interests, choosing, if necessary on their own initiative, the appropriate means of providing such information (see, to that effect, judgments of 20 March 1985, Timexv Counciland Commission, 264/82, EU:C:1985:119, paragraph 30; of 27 June 1991, Al-Jubail Fertilizerv Council, C‑49/88, EU:C:1991:276, paragraph 17; and of 3 October 2000, Industrie des poudressphériquesv Council, C‑458/98 P, EU:C:2000:531, paragraph 99). 142 The obligation to provide information which is incumbent on the EU institutions in anti-dumping matters must be reconciled with the obligation to respect confidential information (see, to that effect, judgments of 25 September 1997, Shanghai Bicyclev Council, T‑170/94, EU:T:1997:134, paragraph 121, and of 18 December 1997, Ajinomoto and NutraSweetv Council, T‑159/94 and T‑160/94, EU:T:1997:209, paragraph 83). However, the obligation to respect confidential information cannot deprive the applicant’s rights of defence of their substance (see, to that effect, judgment of 20 March 1985, Timexv Counciland Commission, 264/82, EU:C:1985:119, paragraph 29). 143 It is also apparent from the case-law that the sufficiency of the information provided by the EU institutions must be assessed in relation to how specific the request for information was (judgment of 18 December 1997, Ajinomoto and NutraSweetv Council, T‑159/94 and T‑160/94, EU:T:1997:209, paragraph 93). 144 It must be recalled that the applicant cannot be required to demonstrate that the institutions’ decision would have been different, but simply that such a possibility cannot be totally ruled out since it would have been better able to defend itself if there had been no procedural error thus in fact affecting the rights of the defence (judgment of 16 February 2012, Council and Commission v Interpipe Niko Tube and Interpipe NTRP, C‑191/09 P and C‑200/09 P, EU:C:2012:78, paragraphs 78 and 79). 145 On the other hand, it is for the applicant to establish specifically how it would have been better able to ensure its defence in the absence of such an irregularity, without merely pleading that it was impossible for it to provide comments on hypothetical situations (see, to that effect, judgment of 9 June 2016, Growth Energy and Renewable Fuels Associationv Council, T‑276/13, EU:T:2016:340, paragraph 264). 146 In the present case, it must be pointed out that, according to the final disclosure document, given that the Argentinian producer did not manufacture DL tartaric acid, normal value was constructed using the difference in price found between the two product types. In its comments on the final disclosure document, the applicant specifically requested information on the method of calculating normal value for DL tartaric acid, in particular as to the source of the prices of L+ tartaric acid and DL tartaric acid and the factors affecting the price comparison. Notwithstanding that request, as in the final disclosure document, recital 29 of the contested regulation states that, given that the Argentinian producer did not manufacture DL tartaric acid, normal value was constructed using the difference in price found between the two product types. In addition, according to recital 38 of the contested regulation, the further information requested by the applicant had to be rejected as it would be impossible to do so without disclosing the production methods and costs of the Argentinian producer. 147 It is apparent from paragraph 61 of the reply that the applicant understood that, in order to calculate a normal value for DL tartaric acid, the institutions had, first, compared certain prices of L+ tartaric acid and DL tartaric acid and had, second, applied that difference to the normal value calculated for L+ tartaric acid in the analogue country. 148 However, the institutions did not inform the applicant of the origin of the prices of L+ tartaric acid and of DL tartaric acid used to calculate the price difference which served to calculate the normal value of DL tartaric acid. It was only at the stage of the rejoinder that the Council stated that it was obvious that the institutions had relied on the export price from the People’s Republic of China in order to calculate the price difference between L+ tartaric acid and DL tartaric acid. In reply to the Court’s questions, the institutions specified for the first time at the hearing that the prices used for the comparison originated from the applicant itself and from the other exporting producer concerned in the People’s Republic of China, that is the only two exporting producers concerned which cooperated during the investigation. It is clear that that information had not been provided to the applicant in due time during the administrative procedure. 149 Moreover, the institutions never communicated to the applicant the price difference between L+ tartaric acid and DL tartaric acid. 150 It is common ground between the parties that DL tartaric acid is produced solely in the People’s Republic of China. Contrary to what the Council contended in the rejoinder, it cannot necessarily be inferred from the final disclosure document, or from the contested regulation, that the prices used to calculate the price difference between L+ tartaric acid and DL tartaric acid originated from producers established in that country. In principle, nothing would prevent the Commission from calculating that difference on the basis of the prices of DL tartaric acid in the People’s Republic of China and of L+ tartaric acid elsewhere in the world. 151 It is apparent from paragraph 28 of the rejoinder that the explanation given by the Council that it could not provide the applicant with confidential information concerning the Argentinian producer related to the construction of the normal value of L+ tartaric acid and not to the comparison of the prices of DL tartaric acid and L+ tartaric acid. 152 At the hearing, the institutions contended that the refusal to communicate the information relating to the price differences between DL tartaric acid and L+ tartaric acid was founded on the fact that, on the basis of that information, the applicant would have been capable of obtaining the prices of its competitor, namely the other exporting producer, which constituted sensitive commercial information. 153 According to the case-law, the legality of an EU measure must be assessed on the basis of the facts and the law as they stood at the time when the measure was adopted, with the result that the General Court cannot substitute other grounds relied on for the first time before it for the grounds relied on during the investigation procedure (see, to that effect, judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 150). Accordingly, the refusal to disclose the information in question cannot be justified by a ground relied on during the oral procedure before the Court, namely the protection of the commercial interests of a competitor of the applicant, as the applicant rightly asserted at the hearing. 154 Accordingly, it must be concluded that the contested regulation makes no reference to any valid justification warranting the refusal to communicate the information relating to the price difference between DL tartaric acid and L+ tartaric acid. 155 It should be noted that the price difference between L+ tartaric acid and DL tartaric acid is one of the fundamental elements of the calculation of the normal value of DL acid, the other being the value of L+ tartaric acid constructed on the basis of the information provided by the Argentinian producer. The applicant claimed that, if it had received the information relating to the price difference, it would have been able to compare that information with its own data in order to ensure that the price difference was at least consistent with those data, which would have enabled it to rule out the existence of significant errors. 156 In that regard, it is useful to recall that, according to the case-law, the fact of having the detailed calculations made by the Commission available to it and the data used for those calculations, is, in general, capable of enabling the interested parties to make observations that are more useful for their defence. They can then verify exactly how the Commission used those data and compare them with their own calculations, which would enable them to identify possible errors made by the Commission which would otherwise be undetectable. Moreover, the institutions’ practice shows that they themselves consider that, for the interested parties, having available to them the detailed calculations as regards the determination of the dumping margin can enable them usefully to exercise their rights of defence (judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 208). 157 In addition, according to the case-law cited in paragraph 144 above, the applicant cannot be required to demonstrate that the institutions’ decision would have been different, but simply that such a possibility cannot be totally ruled out since it would have been better able to defend itself if there had been no procedural error thus in fact affecting the rights of the defence. 158 Those requirements are fulfilled in the present case, since the institutions refused to supply the information relating to the price difference between DL tartaric acid and L+ tartaric acid without providing any valid justification in due time. It is common ground that that difference was fundamental to the calculation of the normal value of DL tartaric acid. In addition, the applicant submits that the fact of having that information would have enabled it, inter alia, to rule out the existence of manifest errors. Accordingly, the applicant would have been better able to defend itself in the absence of that procedural error. 159 Lastly, in the context of an anti-dumping investigation procedure, the institutions cannot be placed under an absolute obligation to refuse to disclose information covered by business secrecy, without assessing the specific circumstances of the case (see, to that effect, judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraphs 165 and 199). Accordingly, the General Court cannot prejudge the result at which the institutions would arrive in the context of a review of the request for information relating to the price difference, in the light of the considerations that the institutions might reasonably take into account. 160 Consequently, pursuant to Article 20(2) of the basic regulation and of the rights of the defence, the institutions should in principle have granted the applicant access to the information requested on the price difference between DL tartaric acid and L+ tartaric acid, given that they had not identified a valid reason justifying that refusal in due time. 161 In the light of the foregoing, the fifth plea must be upheld. Costs 162 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. However, according to Article 135(1) of the Rules of Procedure if equity so requires, the General Court may decide that an unsuccessful party is to pay only a proportion of the costs of the other party in addition to bearing his own costs, or even that he is not to be ordered to pay any costs. 163 Since the action has been upheld only in part, it is fair in the circumstances of the case that the applicant bear half of its costs. The Council is to bear its own costs and pay half of the costs incurred by the applicant. 164 According to Article 138(1) of the Rules of Procedure, the Member States and institutions which have intervened in the proceedings are to bear their own costs. Consequently, the Commission will bear its own costs. 165 Under Article 138(3) of the Rules of Procedure, the Court may order an intervener other than those referred to in Article 138(1) and (2) to bear his own costs. In the circumstances of this dispute, it is appropriate that the intervening companies bear their own costs. On those grounds, THE GENERAL COURT (Eighth Chamber) hereby: 1. Annuls Council Implementing Regulation (EU) No 626/2012 of 26 June 2012 amending Council Implementing Regulation (EU) No 349/2012 imposing a definitive anti-dumping duty on imports of tartaric acid originating in the People’s Republic of China in so far as that regulation applies to Changmao Biochemical Engineering Co. Ltd.; 2. Orders the Council of the European Union to pay half of the costs incurred by Changmao Biochemical Engineering and to bear its own costs; 3. Orders Changmao Biochemical Engineering to bear half of its own costs; 4. Orders the European Commission to bear its own costs; 5. Orders Distillerie Bonollo SpA, Industria Chimica Valenzana SpA, Distillerie Mazzari SpA, Caviro Distillerie Srl and Comercial Química Sarasa, SL to bear their own costs. Collins Kancheva Barents Delivered in open court in Luxembourg on 1 June 2017. E. Coulon A.M. Collins Registrar President * Language of the case: English.