Judgment — ECLI:EU:T:1998:9
Date: 1998-01-29
Language of the case: English
Court formation: Fifth Chamber, Extended Composition
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Dumping;External relations;Commercial policy
Concepts: Anti-dumping and anti-subsidy measures
Procedure: Action for annulment - unfounded

summary publication), paragraphs 60 and 61, and Case C-157/87 Electroimpex and Others v Council [1990] ECR I-3021 (summary publication), paragraphs 41 and 42). 109. In the present case the definitive regulation (points 19 and 21 of the preamble) made the following findings relating to the injury suffered by the Community industry: — import prices of furfuraldehyde originating in China undercut the prices of the Community producer by 24.4% and had fallen by more than 30% during the investigation period; — the production of furfuraldehyde by Furfural Español had fallen by 17.7% between 1989 and the investigation period; — the sales of that company on the Community market had fallen by 28.5% between 1989 and the investigation period; — the rate of utilisation of its capacity had fallen from 85% to 70%; — its prices had decreased by 36.4% between 1991 and the investigation period, the decrease being 22.4% between 1992 and that same period; — its stocks had increased by more than 31.6% during the period under consideration. 110. In view of those factors, the Community institutions, notwithstanding any reduction in the imports from China, were entitled to conclude, without committing a manifest error of assessment, that imports from China at dumping prices had caused injury to the Community industry. 111. The third plea in law must therefore be rejected. The fourth and fifth pleas in law, alleging infringement of Article 190 of the Treaty and manifest error of assessment with regard to the Council's refusal to accept the undertaking proposed by the applicant Arguments of the parties 112. The applicant admits that the institutions have a wide discretion in deciding whether undertakings should be accepted or not. However, that discretion is, it points out, subject to the obligation to state reasons as laid down in Article 190 of the Treaty. According to the applicant, the statement of the reasons for the decision to reject the undertaking proposed by it is inadequate and that decision is therefore not valid. 113. According to the applicant, the undertaking which it proposed would have made it possible to limit the measures to what was strictly necessary in order to remove the injury alleged by the complainant. The two grounds for rejecting the undertaking which were put forward by the institutions are invalid. The decision refusing the undertaking must therefore be annulled. 114. The first ground for rejection (point 29 of the preamble to the definitive regulation) was that it was not possible to grant individual treatment to the applicant because, according to the institutions, it did not meet the requirements laid down in that regard for a country with a non-market economy. That ground for rejection derivesfrom a previous Commission policy of 'individual treatment‘, which has since been drastically reconsidered. The applicant refers in this respect to previous cases. 115. The second ground for rejection (point 29 of the preamble to the definitive regulation) is based on the existence of breaches of undertakings made by Chinese exporters in recent years, including a breach by the applicant itself. The applicant submits that a breach of an earlier undertaking in the potassium permanganate case (Council Regulation (EEC) No 1531/88 of 31 May 1988 imposing a definitive anti-dumping duty on imports of potassium permanganate originating in the People's Republic of China and definitively collecting the provisional anti-dumping duty imposed on those imports (OJ 1988 L 138, p. 1)), with which it is charged by the Council, was not committed by the applicant itself but rather by certain of its branches. That breach cannot, therefore, constitute a valid reason for rejecting its proposed undertaking. The applicant adds that it is not uncommon in the institutions' administrative practice for them to accept undertakings even though they have been offered by parties which had breached previous undertakings. The rejection of the undertaking which the applicant offered is therefore arbitrary. 116. The Council observes that the institutions are not required to accept undertakings. In any event, the circumstances of the present case would have prevented the Community institutions from accepting the undertaking proposed by the applicant which, since it related to quantity and not prices, would have conferred on the applicant a de facto monopoly with respect to exports of furfuraldehyde from China. 117. The Council maintains moreover that the applicant breached a previous undertaking. It points out that in the potassium permanganate case Sinochem had offered an undertaking covering all its exports, including those of its subsidiaries, so that it was responsible for their activities. 118. In its statement in intervention Furfural Español adds that the applicant failed to give any positive reason in support of its contention that the undertaking offered would have been sufficient to remove the injury being suffered by the EU industry and should therefore have been accepted. Findings of the Court 119. No provision of the basic regulation requires the institutions to accept undertakings which are offered by economic operators who are the subject of an investigation prior to the imposition of anti-dumping duties. On the contrary, it is clear from Article 10 of that regulation that it is for the institutions, in the exercise of their discretion, to decide whether such undertakings are acceptable. It is not open to the Court to find fault with a rejection of offers of undertakings, which was issued after individual examination and was accompanied by a statement of reasons which satisfies the requirements of Article 190 of the Treaty, where the grounds on which that rejection is based do not exceed the margin of discretion conferred on the institutions (Case 240/84 NTN Toyo Bearing and Others v Council [1987] ECR 1809, paragraphs 30 to 34). 120. The applicant claims that the obligation to state reasons has not been fulfilled. However, the reasons for which the Council rejected the undertaking offered by the applicant are set out at point 29 of the preamble to the definitive regulation. That statement of reasons enabled the applicant to know why its proposed undertaking had been rejected and the Court to exercise its power of review. 121. Thus, as the Council rightly maintains, the applicant did not propose to undertake to export at a certain minimum price but rather to limit on a yearly basis the volume of furfuraldehyde which it exports to the Community. The consequence of accepting the proposed undertaking would have been that a high anti-dumping duty would have been applied to all other imports from China and the applicant would have regained the monopoly in Chinese exports of furfuraldehyde to the Community. Such acceptance would thus have meant granting the applicant individual treatment without removing the injury. 122. The previous cases referred to by the applicant, in which the Community institutions accepted the undertaking proposed, are not comparable to the present case, since only one single State-owned producer existed in the exporting country. The undertaking was therefore, in effect, proposed by the State itself rather than by an individual exporter and comprised all exports from the country. The effect of the acceptance was not, therefore, the granting of individual treatment to one specific exporter. 123. Finally, as regards the rejection of the undertaking on the ground that the applicant had breached previous undertakings, the applicant cannot avail itself of the fact that the breach of the undertaking given in the potassium permanganate case was attributable solely to its subsidiaries. In that case, its undertaking covered all its exports, including those of its subsidiaries, as the Council has contended without being contradicted on that point. In those circumstances, the applicant was responsible also for the activities of its subsidiaries. 124. Breach of a previous undertaking constitutes a factor which the Community institutions may validly take into consideration in conjunction with the facts of the case under consideration when deciding whether to accept or reject a proposed undertaking. The fact that, in previous cases, they have sometimes accepted undertakings given by exporters which had previously breached their undertakings is not such as to restrict the wide discretion which they enjoy in this matter. 125. In the present case the Council did not, therefore, exceed the bounds of its wide discretion by basing its rejection of the proposed undertaking on the fact that a previous undertaking had not been complied with. 126. In view of all the foregoing considerations, it must be concluded that the statement of the reasons for the measure satisfies the requirements of Article 190 of the Treaty in so far as the contested rejection is concerned and that it is not open to criticism since the factors on which that rejection was based did not fall outside the bounds of the discretion which was vested in the Council. 127. Accordingly, the fourth and fifth pleas in law are unfounded. 128. The application must therefore be dismissed in its entirety. Costs 129. Under Article 87(2) 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 and the Council has applied for costs, the applicant must be ordered to pay the costs incurred by the Council. Since the intervener, Furfural Español, has applied for costs, the applicant must, in the circumstances of the present case, also be ordered to pay the costs incurred by Furfural Español. 130. Under the first subparagraph of Article 87(4) of the Rules of Procedure, institutions which intervene in the proceedings are to bear their own costs. Accordingly, the Commission must be ordered to bear its own costs. On those grounds, THE COURT OF FIRST INSTANCE (Fifth Chamber, Extended Composition) hereby: 1. Dismisses the application; 2. Orders the applicant to bear its own costs and to pay the costs of the Council and of the intervener Furfural Español; 3. Orders the Commission to bear its own costs. García-Valdecasas Tiili Azizi Moura Ramos Jaeger Delivered in open court in Luxembourg on 29 January 1998. H. Jung R. García-Valdecasas Registrar President 1: Language of the case: English. ECR