COMMISSION IMPLEMENTING REGULATION (EU) 2020/611

of 30 April 2020

re-imposing the definitive anti-dumping duty imposed by Council Regulation (EC) No 91/2009 on imports of certain iron or steel fasteners originating in the People’s Republic of China to imports of certain iron or steel fasteners consigned from Malaysia, whether declared as originating in Malaysia or not

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union (‘TFEU’),

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (the ‘basic Regulation’) (1), and in particular Articles 13 and 14(1) thereof,

Whereas:

1. PROCEDURE

(1) By Regulation (EC) No 91/2009 (2), the Council imposed a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in the People’s Republic of China (‘the PRC’ or ‘China’). Those measures will hereinafter be referred to as ‘the original measures’ and the investigation that led to these measures will hereinafter be referred to as ‘the original investigation’.

(2) Following the imposition of the definitive anti-dumping duty, the Commission received evidence that these measures were being circumvented through transhipping via Malaysia.

(3) For that reason, on 28 November 2010, the Commission, by way of Regulation (EU) No 966/2010 (3), initiated an investigation concerning the possible circumvention of the anti-dumping measures imposed by Regulation (EC) No 91/2009 (‘the anti-circumvention investigation’).

(4) On 26 July 2011, the Council extended the anti-dumping duty imposed by Regulation (EC) No 91/2009 to certain iron or steel fasteners consigned from Malaysia, whether declared as originating in Malaysia or not, by Council Implementing Regulation (EU) No 723/2011 (4) (‘the anti-circumvention Regulation’).

(5) On 27 February 2016, the Commission repealed the definitive anti-dumping duty imposed by Regulation (EC) No 91/2009, as extended by Implementing Regulation (EU) No 723/2011, by way of Commission Regulation (EU) 2016/278 (5).

(6) By its judgment in Case C-644/17 Eurobolt of 3 July 2019 (6), the Court of Justice declared Implementing Regulation (EU) No 723/2011 invalid inasmuch as it was adopted in breach of the consultation procedure contained in Article 15(2) of Council Regulation (EC) No 1225/2009 (7).

2. IMPLEMENTATION OF THE JUDGMENT OF THE COURT OF JUSTICE IN CASE C-644/17 EUROBOLT

(7) The Court of Justice held that the requirement to provide the Advisory Committee with all relevant information no later than 10 working days before the meeting of that committee, as laid down in Article 15(2) of Regulation (EC) No 1225/2009, constitutes an essential procedural requirement governing the proper conduct of proceedings, the breach of which renders the act concerned invalid (8). According to the Court, that provision had been infringed inasmuch as the observations of Eurobolt, a Dutch importer of fasteners from Malaysia, were not communicated to the Member States no later than 10 working days before the meeting of the Advisory Committee.

(8) In accordance with Article 266 TFEU, the Union’s institutions must take the necessary steps to comply with the judgment of the Court of Justice of the European Union. On 27 August 2019, the Commission, therefore, re-opened the anti-circumvention investigation in order to correct the illegality identified by the Court of Justice (9).

(9) The reopening of the anti-circumvention investigation was limited in scope to the implementation of the judgment of the Court of Justice in Case C-644/17 Eurobolt, namely to ensure that all procedural requirements arising from the Advisory Committee procedure contained in Article 15(2) of Regulation (EC) No 1225/2009 were met (10). That procedure has, in the meantime, been replaced by the examination committee procedure contained in Article 5 of Regulation (EU) No 182/2011 of the European Parliament and of the Council (11).

(10) In this respect, it should be pointed out that acts of the European Union are to be adopted in accordance with the procedural rules in force at the time of their adoption. Article 15(2) of Regulation (EC) No 1225/2009 in the form as it stood at the time of the underlying investigation was repealed. Therefore, a proceeding like the current re-opening of an anti-circumvention investigation initiated pursuant to Article 13(3) of Regulation (EC) No 1225/2009 can, as from the repeal of Article 15(2) of Regulation (EC) No 1225/2009 in the form as applicable at the time of adoption of Implementing Regulation (EU) No 723/2011, be completed only on the basis of the committee procedure currently in place for the imposition of anti-circumvention measures (12). Pursuant to Article 15(3) of Regulation (EC) No 1225/2009, as amended and codified in Regulation (EU) 2016/1036, the procedure to be followed for the purposes of this re-opening is the one contained in Article 5 of Regulation (EU) No 182/2011.

3. ASSESSMENT OF THE CLAIMS

3.1. Claims made in the anti-circumvention investigation

(11) Eurobolt, in its submission of 13 June 2011, questioned the legality of the Commission’s interpretation of Article 13 of Regulation (EC) No 1225/2009 on two accounts. First, it argued that the extended measures should not apply to the product concerned if it was of genuine Malaysian origin. Second, Eurobolt questioned the Commission’s power to, in an ex officio anti-circumvention investigation, allege injury on the basis of data of the original investigation without providing evidence of injury.

(12) The Commission observed that neither claim related to the implementation of the judgment. Eurobolt’s comments thus related to issues falling outside the scope of the implementation exercise. In any case, the claims could also be dismissed on the merits.

(13) Regarding Eurobolt’s first claim, and as noted in recital 46 of the anti-circumvention Regulation, Article 13(1) of the basic Regulation allows for the extension of measures to imports of the like product from ‘third countries’. Article 13(4) of the basic Regulation allows for exceptions for genuine producers from that third country. As the anti-circumvention investigation revealed circumvention practises in line with the findings of investigations carried out by OLAF and the Malaysian authorities, Article 1 of the anti-circumvention Regulation extended the anti-dumping measures to imports consigned from Malaysia. However, any company that had demonstrated that it was a genuine Malaysian producer was granted an exemption from the extended measures. Moreover, requests for future exemptions were possible under Article 2 of the anti-circumvention Regulation. Accordingly, as the existence of transhipment of Chinese-origin products via Malaysia was confirmed (see recitals 34 and 45 of the anti-circumvention Regulation) and exports from genuine Malaysian producers were exempted from the extension of the measures, Eurobolt’s first claim was rejected.

(14) Regarding Eurobolt’s second claim, it should be pointed out that Article 13(1) of the basic Regulation requires, inter alia, ‘evidence of injury or that the remedial effects of the duty are being undermined in terms of the prices and/or quantities of the like product ...’ (emphasis added). These two requirements are not cumulative. Recitals 37 and 38 of the anti-circumvention Regulation show that the remedial effects of the anti-dumping duty imposed by the original Regulation were undermined by the circumvention, both in terms of prices and quantities. Therefore, the legal requirements of Article 13 of the basic Regulation were met. Accordingly, there was no need or legal obligation to re-assess or re-use injury data from the original investigation with regard to imports from China. Consequently, this claim was rejected as well.

(15) The Commission concluded from the above that Eurobolt’s submission of 13 June 2011 had been duly considered and Eurobolt’s claims were dealt with in the anti-circumvention Regulation, in particular in Sections 2.8 and 4 thereof. Moreover, it is important to note in this regard that Eurobolt questioned neither the evidence of transhipment of Chinese-origin products via Malaysia nor the finding that the companies from which Eurobolt sourced the product concerned had provided misleading information to the Commission and had not been able to demonstrate that they were genuine Malaysian producers.

3.2. Assessment of claims made after re-opening

(16) Commission Implementing Regulation (EU) 2019/1374 re-opening the anti-circumvention investigation invited interested parties to make comments pertaining to the reopening of the anti-circumvention investigation. Two parties submitted comments.

(17) Eurobolt claimed that the violation of Article 15(2) of Regulation (EC) No 1225/2009 found to have occurred by the Court of Justice cannot be cured ex post because it is a violation of an essential procedural requirement and therefore it vitiates the entire conduct of the original anti-circumvention investigation.

(18) This claim is unfounded for the following reasons. A breach of Article 15(2) does not vitiate the entire proceeding, as the illegality identified by the Court did not concern the substantive findings on circumvention. The breach can therefore be cured by reopening the anti-circumvention investigation at the point at which the illegality occurred. That entailed forwarding Eurobolt’s original observations, together with the draft implementing act, to the committee in line with the procedure currently in place for the imposition of anti-circumvention measures. That is the procedure referred to in recital (10) above. The applicable legal deadline for the relevant information to reach the committee requires submission no later than 14 days before the meeting of that committee. This enables the committee, which consists of representatives of the Member States, to familiarise itself with all relevant information so that the Member States may formulate a position on the draft implementing act. As the Court of Justice has recently recognised, the resumption of the administrative procedure and the re-imposition of anti-dumping duties on imports that were made during the period of application of the regulation which was annulled can also not be considered as contrary to the rule of non-retroactivity (13).

(19) Where a judgment of the Court of Justice invalidates an anti-dumping regulation, the institution implementing that judgment (in this case the Commission) has the option of resuming the proceeding at the origin of that Regulation (14). Furthermore, except where the irregularity found has vitiated the entire proceeding, the institution has the option, in order to adopt an act intended to replace the act that has been declared invalid, to resume that proceeding at the stage when the irregularity occurred (15).

(20) Eurobolt also claimed that it would be inappropriate for the Commission to re-impose the anti-circumvention measures, as they have both expired and been repealed since.

(21) In this respect, it should be pointed out that, by remedying a procedural irregularity and confirming the findings of the investigation which were not contested by the judgment at issue, the Commission complies with its obligation to impose measures on imports of the product concerned that took place during the period of application of these measures, i.e. between 27 July 2011 and 27 February 2016. Therefore, the Commission rejected Eurobolt’s claim.

(22) Another party, the European Fastener Distributor Association (EFDA), claimed ‘persistent failures to take seriously the valid and carefully considered comments of European fastener distributors and their respective representative bodies.’ They also claimed that, in a case where an importer can demonstrate that they have carried out proper due diligence and taken all reasonable and appropriate measures to ensure that the imported product has been legitimately manufactured in Malaysia, they should not be responsible for paying the anti-dumping duty and any such duties paid should be reimbursed.

(23) The Commission rejected the first EFDA claim, as the Association did not show any specific violation of due process in the investigation re-opening proceedings and did not provide any evidence in this respect.

(24) As regards the EFDA’s second claim, Article 13(4) of the basic Regulation stipulates that, where the circumventing practice, process or work takes place outside the Union, exemptions may be granted to producers of the product concerned that are found not to be engaged in the circumvention practices. Consequently, there is no scope for exemptions based on importer due diligence when the circumvention takes place outside the EU (as is the case here). Rather, it is up to the exporter to prove that they are a genuine Malaysian producer and to ask for an exemption. As mentioned in Section 4 of the anti-circumvention Regulation, a number of Malaysian exporters applied and were considered for exemptions, with a total of nine companies being granted such exemptions by the Commission. The Commission, therefore, rejected EFDA’s second claim.

(25) Having taken account of the comments made and the analysis thereof, the Commission concluded that the original measures should be re-imposed on imports of the product concerned consigned from Malaysia, whether declared as originating in Malaysia or not.

4. DISCLOSURE

(26) All parties that came forward at the reopening of the anti-circumvention investigation were informed of the essential facts and considerations on the basis of which it was intended to re-impose the anti-dumping duty. They were granted a period within which to make representations subsequent to disclosure. Eurobolt and EFDA submitted comments.

(27) First, Eurobolt maintained that violations of essential procedural requirements vitiate the entire proceeding, and so cannot be cured ex post. Second, Eurobolt maintained that the re-imposition of measures whose legal basis is an act found to be illegal by the WTO violates the rule of law and the principle of good administration. Third, Eurobolt claimed that the Commission’s proposal to re-impose measures results in the absence of effective judicial protection as it means that the Commission can simply cure any violation ex post, and that this outcome upsets the balance of power in trade defence proceedings. Fourth, Eurobolt claimed that the Commission’s proposal ignores the decision of the Hoge Raad (the Dutch High Court) of the Netherlands in Eurobolt v Staatssecretaris van Financiën (16), and urged the Commission to refrain from interfering in customs authorities’ exclusive competence to decide on the repayment of the anti-circumvention duties paid by Eurobolt.

(28) As regards Eurobolt’s first argument, which had already made upon the re-opening of the anti-circumvention investigation, the Commission refers to recital (18) and (19) above. As no new arguments were provided, this claim was rejected.

(29) As regards Eurobolt’s second argument, the Commission decided to bring the measures in line with the findings of the WTO panels and appellate body, which was the reason why the Regulation of 26 February 2016 (see recital (5) above) was issued. It decided not to do so with ex tunc effect. Subsequently, the Commission had the obligation to take the necessary steps to comply with a judgement of the Court of Justice, i.e. to correct an illegality identified by the Court. As the procedural error could be remedied and the findings of circumvention were confirmed, the Commission was entitled to re-impose the anti-circumvention duties for the period of application of the measures, based on the uncontested findings of the anti-circumvention investigation. None of the above actions implicate a violation of the principle of good administration. In any event, Eurobolt referred to the principle of good administration, but did not specify which right was allegedly violated in this respect (17). Therefore, the Commission rejected this claim.

(30) As regards Eurobolt’s third argument, it is established case-law that the scope and grounds of the declaration of invalidity by the Court in a judgment should be determined in each specific case (C-283/14 and C-284/14 CM Eurologistik and GLS, judgment of 28 January 2016, EU:C:2016:57, para. 49 and the case-law cited) and may be such that would not necessitate the full and immediate repayment of the relevant duties (case C-256/16 Deichmann SE v Hauptzollamt Duisburg, Judgment of the Court of 15 March 2018, paragraph 70). In the current case, the violation did not vitiate the entire proceeding with irregularity. As set out above in recitals (7) to (10), in this case the violation of the procedural requirement could be cured and the measure could be re-imposed in accordance with the applicable procedural rules. These obligations do not undermine the principle of effective judicial protection. The Commission therefore rejected this claim as well.

(31) As regards Eurobolt’s fourth argument, as set out in recital (8) above, the Commission had to take the necessary steps to comply with the judgment of the Court of Justice of the European Union. The decision of the Dutch High Court, which in addition concerned the question as to whether interests should be paid in case of repayment of the anti-dumping duties, could not discharge the Commission of its obligation arising from the judgment of the Court of Justice. In any event, the Commission’s action also does not usurp the competences of the customs authorities of the Member States, as recognised by the Court of Justice in both C&J Clark International (18) and Deichmann (19). Therefore, the Commission rejected this claim.

(32) EFDA expressed regret that its previous claim for the exemption of importers from paying anti-dumping duties in cases where importers were able to demonstrate due diligence in ensuring that the product imported had been legitimately manufactured in Malaysia was rejected. EFDA requested that the Commission reconsider its concerns.

(33) As stated in recital (24), there is no scope for exemptions based on importer due diligence when the circumvention takes place outside the EU (as is the case here). Therefore, the Commission confirmed its previous rejection of EFDA’s claim.

(34) In view of the above, the comments made after disclosure did not give rise to a change of the conclusion of the Commission, as set out in recital (25) above.

(35) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (20), when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

(36) This Regulation is in accordance with the opinion of the Committee established by Article 15(1) of Regulation (EU) 2016/1036,

HAS ADOPTED THIS REGULATION:

Article 1 1. The definitive anti-dumping duty applicable to ‘all other companies’ imposed by Article 1(2) of Regulation (EC) No 91/2009 on imports of certain iron or steel fasteners, other than of stainless steel, i.e. wood screws (excluding coach screws), self-tapping screws, other screws and bolts with heads (whether or not with their nuts or washers, but excluding screws turned from bars, rods, profiles or wire, of solid section, of a shank thickness not exceeding 6 mm and excluding screws and bolts for fixing railway track construction material), and washers, originating in the People’s Republic of China, is hereby extended to imports of certain iron or steel fasteners, other than of stainless steel, i.e. wood screws (excluding coach screws), self-tapping screws, other screws and bolts with heads (whether or not with their nuts or washers, but excluding screws turned from bars, rods, profiles or wire, of solid section, of a shank thickness not exceeding 6 mm and excluding screws and bolts for fixing railway track construction material), and washers, consigned from Malaysia, whether declared as originating in Malaysia or not, and falling, during the period of application of Implementing Regulation (EU) No 723/2011, under CN codes ex 7318 12 90, ex 7318 14 91, ex 7318 14 99, ex 7318 15 59, ex 7318 15 69, ex 7318 15 81, ex 7318 15 89, ex 7318 15 90, ex 7318 21 00 and ex 7318 22 00. The TARIC codes are listed in Annex I to this Regulation. 2. Paragraph 1 of this Article shall not apply in the case of the exporting producers listed in Annex II. 3. The duty extended by paragraph 1 of this Article shall be collected on imports consigned from Malaysia, whether declared as originating in Malaysia or not, registered in accordance with Article 2 of Regulation (EU) No 966/2010 and Articles 13(3) and 14(5) of Regulation (EC) No 1225/2009, with the exception of those produced by the companies listed in paragraph 2.

Article 2 1. Duties collected on the basis of Implementing Regulation (EU) No 723/2011 shall not be reimbursed. 2. Any reimbursements that took place following the judgment of the Court of Justice Case C-644/17 Eurobolt (EU:C:2019:555) shall be recovered by the authorities which made those reimbursements.

Article 3 This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 30 April 2020. For the Commission The President Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 21.

(2) Council Regulation (EC) No 91/2009 of 26 January 2009 imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in the People’s Republic of China (OJ L 29, 31.1.2009, p. 1).

(3) Commission Regulation (EU) No 966/2010 of 27 October 2010 initiating an investigation concerning the possible circumvention of anti-dumping measures imposed by Council Regulation (EC) No 91/2009 on imports of certain iron or steel fasteners originating in the People’s Republic of China by imports of certain iron or steel fasteners consigned from Malaysia, whether declared as originating in Malaysia or not, and making such imports subject to registration (OJ L 282, 28.10.2010, p. 29).

(4) Council Implementing Regulation (EU) No 723/2011 of 18 July 2011 extending the definitive anti-dumping duty imposed by Regulation (EC) No 91/2009 on imports of certain iron or steel fasteners originating in the People’s Republic of China to imports of certain iron or steel fasteners consigned from Malaysia, whether declared as originating in Malaysia or not (OJ L 194, 26.7.2011, p. 6).

(5) Commission Implementing Regulation (EU) 2016/278 of 26 February 2016 repealing the definitive anti-dumping duty imposed on imports of certain iron or steel fasteners originating in the People’s Republic of China, as extended to imports of certain iron or steel fasteners consigned from Malaysia, whether declared as originating in Malaysia or not (OJ L 52, 27.2.2016, p. 24).

(6) Case C-644/17 Eurobolt, ECLI:EU:C:2019:555.

(7) Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ L 343, 22.12.2009, p. 51). Repealed and replaced by Regulation (EU) 2016/1036.

(8) Case C-644/17 Eurobolt, ECLI:EU:C:2019:555, paragraph 51.

(9) Commission Implementing Regulation (EU) 2019/1374 of 26 August 2019 reopening of the investigation following the judgment of 3 July 2019, in case C-644/17 Eurobolt, with regard to Council Implementing Regulation (EU) No 723/2011 of 18 July 2011 extending the definitive anti-dumping duty imposed by Regulation (EC) No 91/2009 on imports of certain iron or steel fasteners originating in the People’s Republic of China to imports of certain iron or steel fasteners consigned from Malaysia, whether declared as originating in Malaysia or not (OJ L 223, 27.8.2019, p. 1).

(10) Findings that were not contested by the judgment at issue remain fully valid (see, mutatis mutandis, Case T-650/17 Jinan Meide Casting Co. Ltd, ECLI:EU:T:2019:644, paras. 333–342).

(11) Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (OJ L 55, 28.2.2011, p. 13). See , in this regard, Regulation (EU) No 37/2014 of the European Parliament and of the Council of 15 January 2014 amending certain regulations relating to the common commercial policy as regards the procedures for the adoption of certain measures (OJ L 18, 21.1.2014, p. 1).

(12) Judgment of the Court of 15 March 2018, Case C-256/16 Deichmann, ECLI:EU:C:2018:187, paragraphs 44–55.

(13) Judgment of the Court of 15 March 2018, Case C-256/16 Deichmann SE v Hauptzollamt Duisburg, ECLI:EU:C:2018:187, paragraph 79; and judgment of the Court of 19 June 2019, C-612/16 C & J Clark International Ltd v Commissioners for Her Majesty’s Revenue & Customs, EU:C:2019:508, paragraph 58.

(14) Judgment of the Court of 15 March 2018, Case C-256/16 Deichmann, ECLI:EU:C:2018:187, paragraph 73; see also judgment of the Court of 19 June 2019, Case C-612/16 P&J Clark International, ECLI:EU:C:2019:508, paragraph 43.

(15) Ibid, paragraph 74; see also judgment of the Court of 19 June 2019, Case C-612/16 P&J Clark International, EU:C:2019:508, paragraph 43.

(16) Hoge Raad, Eurobolt v Staatssecretaris van Financiën, 29 November 2019, 15/04667 bis, NL:HR:2019:1875.

(17) See judgments of 2 October 2003, Area Cova v Council and Commission, Case T-196/99, EU:T:2001:281 paragraph 43; of 4 October 2006, Tillack v Commission, Case T-193/04, EU:T:2006:292, paragraph 127; and of 13 November 2008, SPM v Council and Commission, Case T-128/05, EU:T:2008:494, paragraph 127.

(18) Judgment of 19 June 2019, Case C-612/16 C&J Clark International, EU:C:2019:508, paragraph 84–85.

(19) Judgment of 15 March 2018, Case C-256/16 Deichmann, EU:C:2018:187, paragraph 84.

(20) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).