Keywords

Summary



Keywords

1. Common commercial policy – Protection against dumping – Investigation – Opening of an investigation against certain imports

(Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade, ‘the 1994 Anti-Dumping Code’, Art. 9(2); Council Regulation No 384/96, Arts 5(6) and 9(5))

2. Common commercial policy – Protection against dumping – Anti-dumping proceeding – Rights of the defence – Scope

(Council Regulation No 384/96, Art. 5(10))

3. Common commercial policy – Protection against dumping or subsidy by non-member countries – Determination of anti-dumping and countervailing duties – Enlargement of the Community after the investigation period

(Council Regulation No 384/96, Arts 6(1) and 11, and No 2026/97, Arts 11(1) and 18)

4. Common commercial policy – Protection against subsidy practices of non-member countries – Subsidy – Concept

(Council Regulation No 2026/97, Arts 2(1)(a)(ii) and 5, and Annexes I to III)

5. Common commercial policy – Protection against dumping or subsidy by non-member countries – Injury – Discretion of the institutions

(Council Regulations No 384/96, Art. 3, and No 2026/97, Art. 8)

6. Common commercial policy – Protection against dumping or subsidy by non-member countries – Injury – Establishing of the causal link

(Council Regulations No 384/96, Art. 3(2), (3) and (7), and No 2026/97, Art. 8(2), (3) and (7))

7. Common commercial policy – Protection against dumping or subsidy by non-member countries – Injury – Causal link

(Council Regulations No 384/96, Art. 3(2), (3) and (7), and No 2026/97, Art. 8(2), (3) and (7))

Summary

1. Even if the Commission opens anti-dumping proceedings only against certain imports of a given product, whilst there is evidence to justify investigating other imports, such a difference in treatment cannot constitute an infringement of either Article 9(5) of basic anti-dumping Regulation No 384/96, or Article 9(2) of the General Agreement on Tariffs and Trade (‘the 1994 Anti-Dumping Code’), or the general principle of equal treatment.

Firstly, such an alleged difference in treatment between imports which have had anti-dumping duties imposed and imports which have not been the subject of any investigation does not fall within the scope of Article 9(5) of Regulation No 384/96, which prohibits discriminatory treatment between imports which have all had anti-dumping duties imposed in respect of imports of the same product, nor within the scope of Article 9(2) of the 1994 Anti-Dumping Code, which prohibits discriminatory treatment in the collection of anti-dumping duties imposed on a product on the basis of the source of the imports in question. Nor is the general principle of equal treatment applicable, since that principle must be reconciled with observance of the principle of legality, according to which no one may rely to his own advantage on an unlawful act committed in favour of a third party.

(see paras 36, 38-40, 42)

2. According to the principle that defence rights are to be observed, in the context of an investigation preceding the adoption of an anti-dumping regulation the undertakings concerned must be placed in a position during the administrative procedure in which they can effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence relied on by the Commission in support of its allegation concerning the existence of dumping and the resultant injury.

An undertaking concerned by such proceedings cannot invoke an infringement of its defence rights as a consequence of the fact that certain evidence contained in the confidential version of the complaint opening those proceedings is not summarised in the non-confidential version which was communicated to it, where, having failed sufficiently to alert the Commission and then the Council, it did not place those institutions in a position to assess the difficulties which that absence could cause it.

(see paras 45-47, 49)

3. It is the composition of the Community at the time of the adoption of the respective regulations that must be taken into account when anti-dumping and countervailing duties are determined. Those duties are not a penalty for earlier behaviour but a protective and preventive measure against unfair competition resulting from dumping and subsidies. Furthermore, under Article 3(2) of basic anti-dumping Regulation No 384/96 and Article 8(2) of Regulation No 2026/97 on protection against subsidised imports from countries not members of the European Community, a determination of injury must be based on positive evidence and involve an objective examination of both the volume of the dumped or subsidised imports and the effect of the dumped or subsidised imports on prices in the Community market for like products, and the consequent impact of those imports on the Community industry. It follows that, where an enlargement of the Community has taken place after the investigation period, and the information obtained by the Commission during that period was not obtained with the enlargement in view and thus concerns only the Community comprising the initial number of Member States, it is for the Commission, when adopting the provisional regulations, and, where appropriate, the Council, when adopting the definitive regulations, to establish whether that information is also relevant with regard to an enlarged Community.

The institutions cannot be relieved of such an obligation either by the normal prohibition on taking account of evidence subsequent to the investigation period, laid down by Article 6(1) of the basic anti-dumping Regulation No 384/96 and Article 11(1) of Regulation No 2026/97, or by the possibility of the measures being reviewed. In the first place, that period and that prohibition, with exceptions, are intended to ensure that the results of the investigation are representative and reliable, by ensuring that the factors on which the determination of dumping or subsidy and injury is based are not influenced by the conduct of the producers concerned following the initiation of the anti-dumping proceeding, and therefore that the definitive duty imposed as a result of the proceeding is appropriate effectively to remedy the said injury. Moreover, the mere possibility of a review, which is left to the Commission’s discretion and would be conducted after the regulations have been adopted, cannot in any way constitute a sufficient taking into account of the effects of the enlargement.

(see paras 63-67, 71)

4. Having regard to the particularly clear wording of Article 2(1)(a)(ii) of Regulation No 2026/97 on protection against subsidised imports from countries not members of the European Community, which excludes from the concept of subsidy the exemption of an exported product from duties or taxes borne by the like product when destined for domestic consumption, or the remission of such duties or taxes in amounts not in excess of those which have been accrued, provided that such an exemption is granted in accordance with the provisions of Annexes I to III to the regulation, those annexes are not mere guidelines to determine whether there are safeguards against excess drawbacks, but contain rules which must be complied with in order to avoid classification of a remission or exemption from duties as a subsidy. Furthermore, it follows from the scheme of that article that the derogation given to exemptions or remissions from duty is an exception to the principle that a subsidy exists where government revenue that is otherwise due is forgone or not collected. That derogation must therefore be interpreted narrowly.

Consequently, in the absence of compliance with the provisions of Annexes I to III to Regulation No 2026/97, the countervailable benefit is made up of the total amount of duties or taxes normally due. Limiting classification as a subsidy solely to the excess collected presupposes that the system for remission or exemption of import duties is compatible with Article 2(1)(a)(ii) of Regulation No 2026/97, and thus, with Annexes I to III thereto, since exporters are entitled to drawback in respect of duties or taxes on the inputs used in the exported products only where the said provisions are complied with.

The aim of the criteria set out in Annexes II and III to the said regulation is to verify that the country of export’s drawback scheme enables the actual consumption of inputs or substitution inputs to be confirmed. The first criterion relates to the existence of a system or procedure which enables such verification to be carried out. The second criterion, which applies in the alternative, in the event that such a procedure or system does not exist or is defective, consists of the country of export having recourse to an examination based on the actual inputs used or transactions performed. In that regard, the Commission need only determine whether the government of the exporting country has in place and applies a monitoring system or procedure. It is in no way required to conduct an investigation in order to verify the way that system or procedure functions in practice. On the contrary, in the absence of an appropriate monitoring system or procedure it is for the exporting country and not the Community to carry out a further examination based on the actual inputs and transactions in question.

The fact that those annexes use the adverb ‘normally’ when referring to the steps which the Commission must take when examining a drawback scheme implies that, in particular circumstances, the institutions may use other criteria, but it cannot deprive them of the possibility of basing their finding that a drawback or substitution drawback scheme is unauthorised on the fact that the criteria laid down are not met.

(see paras 89-92, 98, 103, 106)

5. The question whether a Community industry has suffered injury and, if so, whether that injury is attributable to dumped or subsidised imports and whether imports from other countries or, more generally, whether other known factors contributed to the injury to the Community industry involves the assessment of complex economic matters in respect of which the institutions enjoy a wide discretion. Consequently, review by the Community courts of the assessments of the institutions must be confined to ascertaining whether the procedural rules have been complied with, whether the facts on which the contested decision is based have been accurately stated and whether there has been any manifest error of assessment of the facts or any misuse of powers.

(see para. 120)

6. Under Article 3(2) and (3) of the basic anti-dumping Regulation No 384/96 and Article 8(2) and (3) of Regulation No 2026/97 on protection against subsidised imports from countries not members of the European Community, a determination of injury is to be based, inter alia, on increases in imports, changes in prices on the Community market and changes in the profitability of the Community industry. It is important, therefore, that the indicators on which the institutions base their findings should be consistent with normal market conditions.

Thus, in determining injury, the Council and the Commission are under an obligation to consider whether the injury on which they intend to base their conclusions actually derives from dumped or subsidised imports and must disregard any injury deriving from other factors, particularly from the conduct of Community producers themselves or from imports of the product concerned from third countries. The institutions are required to assess the effects of other known factors, not only when analysing the causal link between those factors and the injury suffered by the Community industry, but also when determining the injury suffered by the latter.

(see paras 121, 135, 146)

7. In proceedings against dumping or subsidies, the choice of method for calculating the injury elimination level falls within the discretion enjoyed by the institutions in respect of determinations of injury suffered by the Community industry and which is justified by the complex economic assessments inherent in such determinations. Recourse to a method of calculation based on the profit margin which the Community industry could reasonably have anticipated in the absence of unfair practices, as opposed to a method of calculation based only on price undercutting, is not vitiated by any manifest error of assessment.

The profit margin to be used by the Council when calculating the target price that will eliminate the injury in question must be limited to the profit margin which the Community industry could reasonably anticipate under normal conditions of competition, in the absence of the dumped or subsidised imports.

(see paras 161-162)