Opinion of the Advocate General — ECLI:EU:C:2011:35
Date: 2011-01-27
Language of the case: English
Subject matter: Dumping;External relations;Commercial policy
Procedure: Action for annulment;Appeal - unfounded

summary, the appellant’s sole plea in law, entitled ‘failure to give the correct legal effect to the notion of normal value as defined by Article 2(7)(a) of the basic regulation’, does not seek to contest the fact that the normal value, determined on the basis of the price payable for the product in question on the Community market, was reduced by deducting direct sales expenses. 80. In my opinion, the plea is to be understood to mean that, notwithstanding the Council’s deduction of those expenses, the General Court should have accepted that, in accordance with Article 2(7)(a) of the basic regulation and the judgment in Brother Industries v Council, the normal value was necessarily the price at which the LAMs would have been sold on the Chinese market if they had been marketed in a market economy and that such a price necessarily includes the sales expenses of the companies which market the product, such as LECO and WWS, where those undertakings form, together with the production undertaking, a single economic entity. 81. That plea cannot, in my view, be accepted. 82. It is true that in Brother Industries v Council the Court found that the division of production and sales activities within a group made up of legally distinct but closely linked companies can in no way alter the fact that they form a single economic entity, so that the normal value of the product must be determined on the basis not of the selling price which the producing company charges the distribution company but of the selling price which the latter company charges an independent economic operator. 83. It could therefore have been asked whether, in the light of the provisions in Article 2(7)(a) of the basic regulation and that judgment, the Council was entitled to reduce the constructed normal value of the LAMs by an amount corresponding to the direct sales expenses, on the ground that the appellant did not itself bear the costs of selling its products on the domestic market. 84. However, as has been seen, that question has not been raised in the present appeal. As I have said, the appellant does not dispute that the normal value of the LAMs was calculated in accordance with Article 2(7)(a) of the basic regulation. 85. It is worth repeating that the appellant’s argument amounts simply to a claim that, in accordance with Article 2(7)(a) of the basic regulation and the judgment in Brother Industries v Council, the General Court should have conceded that the normal value corresponded to the stage at which the products are marketed by WWS. 86. That argument cannot succeed because, in my opinion, it is incomplete, not to say contradictory. The appellant cannot claim that the General Court infringed Article 2(7)(a) of the basic regulation, without calling into question that court’s finding that the normal value, in so far as it excluded direct sales expenses, was determined in accordance with that provision. 87. Contrary to what is suggested in the appellant’s argument, the General Court could not disregard the fact that the normal value of the LAMs had been calculated by the Council at the stage at which those products leave the appellant’s production line. From the point at which it then took the view that that assessment was consistent with Article 2(7)(a) of the basic regulation, it was required to draw the appropriate conclusions from this in verifying compliance with the requirement laid down in Article 2(10) of the basic regulation to make a fair comparison. 88. I thus come to the second point of my argument, relating to the scope of Article 2(10) of the basic regulation. 89. That provision requires the institutions to make a fair comparison of the export price and the normal value. It expressly provides that, to ensure compliance with that requirement, the comparison must be made at the same level of trade. 90. Since the normal value was determined at the stage at which the LAMs leave the appellant’s production line, the General Court did not err in law in considering that the adjustment to the export price, which consisted in deducting the expenses and profits of the companies which marketed those products, was consistent with Article 2(10) of the basic regulation. (10) In order to compare the normal value and the export price at the same level of trade, that is to say, at the stage at which the LAMs leave the appellant’s production line, it was indeed necessary to adjust the export price so as to remove the element of the price reflecting the involvement of the related companies which marketed the product on the Community market. 91. Consequently, I propose that the Court should dismiss the present appeal as unfounded. 92. If the Court shares my view, the appellant, which is therefore unsuccessful in these proceedings, should be ordered to bear its own costs and to pay those incurred by the Council, pursuant to Article 69(2) of the Rules of Procedure of the Court. 93. The Commission must be ordered to bear its own costs, pursuant to the first subparagraph of Article 69(4) of the Rules of Procedure. III – Conclusion 94. In the light of the foregoing considerations, I propose that the Court should: – dismiss as unfounded the appeal brought by Dongguan Nanzha Leco Stationery Mfg. Co. Ltd against the judgment of the Court of First Instance of the European Communities of 23 September 2009 in Case T-296/06 Dongguan Nanzha Leco Stationery v Council; – order Dongguan Nanzha Leco Stationery Mfg. Co. Ltd to bear its own costs and to pay those of the Council of the European Union; – order the European Commission to bear its own costs. 1 – Original language: French. 2 – Regulation of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1), as amended by Council Regulation (EC) No 461/2004 of 8 March 2004 (OJ 2004 L 77, p. 12) (‘the basic regulation’). 3 – Regulation of 24 July 2006 imposing a definitive anti‑dumping duty and collecting definitively the provisional duty imposed on imports of lever arch mechanisms originating in the People’s Republic of China (OJ 2006 L 205, p. 1) (‘the definitive regulation’). 4 – Case T‑296/06 (‘the judgment under appeal’). 5 – ‘LAMs’. 6 – ‘WWS’. 7 – ‘LECO’. 8 – OJ 2005 C 103, p. 18. 9 – OJ 2006 L 23, p. 13 (‘the provisional regulation’). 10 – See, to that effect, Case C‑179/87 Sharp Corporation v Council [1992] ECR I‑1635, paragraphs 16 to 19.