62019TJ0744_RES
Case T‑744/19
Methanol Holdings (Trinidad) Ltd
v
European Commission
Judgment of the General Court (Eighth Chamber, Extended Composition), 14 September 2022
(Dumping – Imports of mixtures of urea and ammonium nitrate originating in Russia, Trinidad and Tobago and the United States – Implementing Regulation (EU) 2019/1688 – Article 3(1) to (3) and (5) to (8) of Regulation (EU) 2016/1036 – Sales through related companies – Construction of the export price – Injury to the Union industry – Calculation of price undercutting – Causal link – Article 9(4) of Regulation 2016/1036 – Calculation of the injury margin – Injury elimination)
Common commercial policy – Protection against dumping – Injury – Establishing a causal link – Obligations of the institutions – Calculation of the price undercutting of the imports at issue – Recourse to a constructed export price – Whether permissible
(European Parliament and Council Regulation 2016/1036, Arts 2(9) and 3(1) to (3))
(see paragraphs 54-58)
Common commercial policy – Protection against dumping – Dumping margin – Determination of the export price – Recourse to a constructed export price – Conditions – Association between exporter and importer
(European Parliament and Council Regulation 2016/1036, Art. 2(8) and (9))
(see paragraphs 60-63)
Common commercial policy – Protection against dumping – Injury – Establishing a causal link – Obligations of the institutions – Calculation of the price undercutting of the imports at issue – Obligation to make a fair comparison between the price of the product concerned and the price of the like product of the Union industry – Comparison to be made between prices obtained at the same level of trade – Need to compare prices at a particular level of trade – None
(European Parliament and Council Regulation 2016/1036, Arts 1(1) and 3(2))
(see paragraphs 74-85, 90-92)
Common commercial policy – Protection against dumping – Discretion of the institutions – Judicial review – Limits
(see paragraph 86)
Résumé
Following a complaint, the European Commission adopted Implementing Regulation 2019/1688 (
1
) imposing a definitive anti-dumping duty on imports of mixtures of urea and ammonium nitrate originating in Russia, Trinidad and Tobago and the United States of America.
The applicant, Methanol Holdings (Trinidad) Ltd, is a company established in Trinidad and Tobago which produces and exports the product concerned to the European Union through a related importer. It brought an action for annulment of the contested regulation.
In dismissing that action, the General Court confirms the possibility of using constructed export prices for the purposes of calculating price undercutting. It also applies and clarifies the case-law relating to the Commission’s obligation, when calculating the price undercutting margins of imports subject to anti-dumping investigations, to make a fair price comparison at the same level of trade, in order to assess the existence of injury suffered by the Union industry as a result of those imports.
Findings of the Court
In the first place, as regards recourse to constructed export prices for the purposes of calculating price undercutting, the Court notes that, in accordance with Article 3(2) and (3) of the basic anti-dumping regulation, (
2
) a determination of injury is to be based on positive evidence and is to involve an objective examination of, inter alia, the impact of the imports on prices in the Union market for like products and that, to that end, it is necessary to give consideration to whether there has been, for the dumped imports, significant price undercutting as compared with the price of a like product.
The Court goes on to point out that those provisions do not lay down any particular method for determining the effect of the dumped imports on prices of like products of the Union industry. It follows that the Commission is entitled to determine the existence of injury on the basis of constructed export prices, in accordance with Article 2(9) of the basic anti-dumping regulation, which concerns the determination of dumping.
In the present case, the Court finds, in essence, that recourse to a constructed export price was justified because the export price declared to customs by the applicant was unreliable as a result of the intra-group relationship between the applicant and its related importer.
In the second place, as regards the assessment of the price undercutting of the imports by comparison with the price of the like product of the Union industry, the Court finds that, in the price undercutting calculation carried out at the stage of the provisional implementing regulation (
3
) and used again in the contested regulation for the purposes of the definitive calculation, the Commission had not made a comparison at the same level of trade. Thus, with regard to the exporting producers, the Commission had reduced the prices of their sales in the European Union by the amount of selling, general and administrative (‘SG&A’) expenses and profit of their related trading companies in the European Union, whereas it had made no such deduction for Union industry sales via related traders.
Since that calculation methodology had been held to be contrary to Article 3(2) of the basic anti-dumping regulation by the judgment in Jindal, (
4
) the Commission, at the stage of the contested regulation, supplemented its provisional calculation with two additional calculations, which the Court examined in turn.
First of all, with regard to the first of those additional calculations, the Court notes that the Commission deducted the SG&A expenses and profit from the selling prices charged by the Union producers’ related entities. In so doing, it brought the prices used for the Union producers to the same level of trade as those of the exporting producers, in accordance with its obligations.
In response to the applicant’s arguments disputing that calculation, the Court states that the requirement of an objective and fair comparison does not prejudge the level of trade at which the Commission must compare prices, but means only that that comparison must be made at the same level of trade with regard to both the prices of the Union producers and those of the exporting producers.
The Court also sets out the reasons why the approach adopted in Kazchrome (
5
) is not applicable to that calculation. It states, inter alia, that on that occasion that case did not relate to a deduction of SG&A expenses and profit from selling prices and that in any event, in that judgment, the Court did not rule out, in general terms, the possibility of taking into consideration, for the purposes of calculating undercutting, CIF (cost, insurance and freight) landed prices at the exporting producers’ ports of customs clearance.
Next, with regard to the second additional calculation, the Court finds that the Commission excluded from the undercutting calculation the Union industry sales through related parties, that is, 40% of the sales of the parties included in the EU sample. In that regard, since the existence of price undercutting was established to the requisite legal standard in the first calculation examined and in so far as the second calculation, carried out in the alternative, does not call into question the existence of that price undercutting, the Court considers that the second additional undercutting calculation also cannot validly be relied on to call into question the lawfulness of the contested regulation.
The Court adds, for the sake of completeness, that, contrary to what is claimed by the applicant, the Commission in no way compared the Union industry’s sales to independent customers, on the one hand, with the applicant’s sales to related parties, on the other, since it took into account sales made by the exporting producers to independent customers, duly adjusted to CIF level. The applicant also has not shown that the adjusted price of the exporting producers did not include the same price components as those of the Union producers. The SG&A expenses and profit of the related selling entities were not taken into consideration at any point in the comparison.
Lastly, the Court notes that, in addition to undercutting and in any event, the effect of the dumped imports was to cause price suppression on the Union market and price depression. Those indicators corroborated the existence of injury to the Union industry.
Accordingly, even if the Commission erred in its provisional calculation of the undercutting margin, the additional factors taken into consideration by the Commission in its examination of the effects on prices, in the contested regulation, had the effect of neutralising that error.
(
1
)	Commission Implementing Regulation (EU) 2019/1688 of 8 October 2019 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of mixtures of urea and ammonium nitrate originating in Russia, Trinidad and Tobago and the United States of America (OJ 2019 L 258, p. 21; ‘the contested regulation’).
(
2
)	Regulation (EU) 2016/1036 of the 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 basic anti-dumping regulation’).
(
3
)	Commission Implementing Regulation (EU) 2019/576 of 10 April 2019 imposing a provisional anti-dumping duty on imports of mixtures of urea and ammonium nitrate originating in Russia, Trinidad and Tobago and the United States of America (OJ 2019 L 100, p. 7).
(
4
)	Judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission (T‑301/16, EU:T:2019:234; ‘the judgment in Jindal’).
(
5
)	Judgment of 30 November 2011, Transnational Company Kazchrome and ENRC Marketing v Council and Commission (T‑107/08, EU:T:2011:704).