Case T‑74/12

Mecafer

v

European Commission

‛Dumping — Imports of certain compressors originating in China — Partial refusal to refund the anti-dumping duties paid — Determination of the export price — Deduction of anti-dumping duties — Adjustment of the temporal effects of an annulment’

Summary — Judgment of the General Court (First Chamber), 18 November 2015

Actions for annulment — Judgment annulling a measure — Effects — Limitation by the Court — Partial annulment of a decision partially refusing the repayment of anti-dumping duties unduly paid — No need provisionally to maintain the effects of the decision in order to avoid the obligation to pay back all the sums repaid

Common commercial policy — Protection against dumping — Reimbursement of anti-dumping duties — Calculation of the actual dumping margin — Determination of the export price — Recourse to a constructed export price — Adjustments — Non-deduction of the amount of anti-dumping duties paid — Proof that the said amount passed on at the importer’s expense

Common commercial policy — Protection against dumping — Reimbursement of anti-dumping duties — Calculation of the actual dumping margin — Determination of the export price — Recourse to a constructed export price — Adjustments — Non-deduction of the amount of anti-dumping duties paid — Choice of the method of analysis — Obligation to use a method consistent with that adopted for the purposes of assessing the passing on of anti-dumping duties to the first independent buyer in the Union

Common commercial policy — Protection against dumping — Reimbursement of anti-dumping duties — Calculation of the actual dumping margin — Determination of the export price — Recourse to a constructed export price — Adjustments — Non-deduction of the amount of anti-dumping duties paid — Condition — Assessment on a case-by-case basis — Earlier or subsequent practice of the institutions — Irrelevant

Common commercial policy — Protection against dumping — Reimbursement of anti-dumping duties — Calculation of the actual dumping margin — Determination of the export price — Recourse to a constructed export price — Adjustments — Interpretation in the light of the 1994 GATT Anti-Dumping Agreement — Non-deduction of the amount of anti-dumping duties paid — Exception — Strict interpretation

Common commercial policy — Protection against dumping — Reimbursement of anti-dumping duties — Calculation of the actual dumping margin — Determination of the export price — Recourse to a constructed export price — Adjustments — Non-deduction of the amount of anti-dumping duties paid — Condition — Passing on of the anti-dumping duties to the resale prices to the first independent buyer in the Union — Product control number by product control number analysis

Common commercial policy — Protection against dumping — Reimbursement of anti-dumping duties — Calculation of the actual dumping margin — Determination of the export price — Recourse to a constructed export price — Adjustments — Non-deduction of the amount of anti-dumping duties paid — Condition — Passing on of the anti-dumping duties to the resale prices to the first independent buyer in the Union — Choice of the method of analysis — Discretion of the institutions — Judicial review — Limits

See the text of the decision. (see paras 28-30)

In dumping matters, Article 11(10) of the basic anti-dumping Regulation No 1225/2009 does not set out a specific method by which to determine whether the anti-dumping duty was duly reflected in the selling price to the first independent buyer in the European Union. In that regard, notwithstanding the dual reference to Article 2 of the basic regulation made by Article 11(10) of that regulation, the adverb ‘duly’ does not refer to a method of examination or a rule referred to in Article 2 of the basic regulation, but to the purpose of reflecting the anti-dumping duties in the resale prices charged by the companies related to the exporting producer to the first independent buyer in the European Union, which is to change the conduct of those companies as a result of the imposition of anti-dumping duties, or, in other words, ultimately, to eliminate the dumping margin initially noted. In the absence of a defined method in the basic anti-dumping regulation enabling it to be determined whether the conditions laid down in Article 11(10) of that regulation are met, the choice between different methods of calculation requires an appraisal of complex economic situations. The Commission therefore has a broad discretion when choosing the method, with the result that the EU judicature is required to carry out, in this field, only a limited judicial review. (see paras 53, 63-67)

Concerning determination of the export price for the purposes of assessing whether dumping exists, it is apparent from Article 2(9) of the basic regulation that the institutions may treat the export price as unreliable in two cases, namely where there is an association between the exporter and the importer or a third party or a compensatory arrangement between the exporter and the importer or a third party. In any other case, where an export price exists, the institutions are required to base their determination of dumping on that price. Where the export price is constructed on the basis of the price at which the imported products are first resold to an independent buyer, or on any other reasonable basis, the adjustments provided for in the second and third subparagraphs of Article 2(9) of the basic regulation are made automatically by the institutions. (see paras 55-57)

For the purposes of determining whether anti-dumping duties have been passed on to the sale prices to the first independent buyer in the Union, in accordance with Article 11(10) of basic anti-dumping Regulation No 1225/2009, assessment by way of a product control number (PCN)-by-PCN method as to whether the anti-dumping duties were passed on does not affect the single character of the product concerned since the Commission has not defined a dumping margin per PCN, but rather a single dumping margin for the product concerned. Next, where the product concerned is a complex product, the different models of which have different technical characteristics and the prices of which can vary significantly, the PCN-by-PCN method, which aims to compare PCNs whose characteristics and resale prices are similar, is more appropriate for the purposes of examining the evolution of the resale prices of the product concerned between the original investigation period and the refund investigation period. By contrast, the method of analysis based on the overall increase in turnover does not make it possible to establish whether the related importer actually changed its conduct in the market or whether, on the contrary, it implemented a pricing policy allowing it to offset the least-sold with the most-sold models, and thus by acting on margins earned. Moreover, according to a literal interpretation of recital 20 and Article 11(10) of the basic anti-dumping regulation, it is appropriate to examine whether the anti-dumping duties were reflected in each selling price and, therefore, rather on the basis of a transaction-by-transaction method or even, where appropriate, on the basis of a model-by-model or PCN-by-PCN method. In that context, recourse to the PCN-by-PCN method, as long as it is consistently applied at all stages of the examination of the application for a refund, does not imply that additional requirements are laid down for the full refund of the anti-dumping duties paid, but only that compliance with the requirements laid down in Article 11(10) of the basic regulation is verified at the level of the individual PCNs, rather than at the level of the product concerned as a whole. Moreover, the fact that the PCN-by-PCN method is nowhere mentioned in the basic regulation does not demonstrate that it is illegal or manifestly incorrect. (see paras 72-74, 76, 96, 114)

The provisions of basic anti-dumping Regulation No 1225/2009 must, so far as is possible, be interpreted in the light of the corresponding provisions of Article VI of the General Agreement on Tariffs and Trade of 1994 (Anti-Dumping Agreement). The Union has adopted the basic regulation in order to meet its international obligations arising from the Anti-Dumping Agreement. Furthermore, by means of Article 11(10) of the basic regulation, the European Union intended to implement the particular obligations laid down by Article 9.3.3 of the Anti-Dumping Agreement. Article 11(10) of the basic regulation must therefore be interpreted in the light of that provision. In that regard, the fourth sentence of Article 2.4 of the Anti-Dumping Agreement, like the second subparagraph of Article 2(9) of the basic regulation, establishes the principle of ‘duty as a cost’, according to which duties and taxes incurred between importation and resale, including the anti-dumping duties paid, are costs to be deducted when constructing the export price. In that context, non-deduction of the anti-dumping duties pursuant to Article 9.3.3 of the Anti-Dumping Agreement is regarded as an exception to the rule of ‘duty as a cost’, laid down in the fourth sentence of Article 2.4 of that agreement. Similarly, non-deduction of anti-dumping duties, laid down in Article 11(10) of the basic regulation, is an exception to the rule of ‘duty as a cost’, set out in the second subparagraph of Article 2(9) of that regulation, and must therefore be interpreted strictly. Thus, the obstacle to obtaining a full refund of the anti-dumping duties paid, which consists in demonstrating that the resale prices in the European Union have increased by an amount equal to twice the dumping margin, is the inevitable consequence of non-fulfilment of the requirements laid down in Article 11(10) of the basic regulation and, therefore, of the application of the ‘duty as a cost’ rule. (see paras 81, 82, 86-88, 94, 95)

In the context of a procedure for refund of anti-dumping duties paid, the Commission has a broad discretion for the purposes of determining whether the requirements for the non-deduction of anti-dumping duties from the constructed export price have been met. That discretion must be exercised on a case-by-case basis, with reference to all the relevant facts. In that regard, the conditions governing non-deduction of the anti-dumping duties from the calculation of the export price must be assessed in the light, on the one hand, of the evidence produced by the importers seeking non-deduction of the anti-dumping duties and, on the other, of the factual circumstances of each case. Consequently, in order to benefit from non-deduction of the anti-dumping duties paid, an importer cannot rely on the earlier or subsequent practice of the Commission. (see paras 121-123)

In the context of a procedure for refund of anti-dumping duties, the review as to whether the anti-dumping duties were passed on to customers of a related importer, provided for under Article 11(10) of the basic regulation, is a stage in the calculation of the export price constructed on the basis of Article 2(9) of that regulation. In step with the result obtained at the conclusion of that review, the anti-dumping duties are to be deducted from the constructed export price and, accordingly, will have a direct impact on the amount of that constructed export price, in that it will necessarily be less than if the anti-dumping duties had not been deducted. Moreover, the lower the export price, the greater will be the difference with the normal value and the higher will be the revised dumping margin. Article 11(10) of the basic regulation therefore contributes to the construction of the export price and, indirectly, to the calculation of the revised dumping margin. In that context, the Commission must be consistent in the methods it uses for the purposes of the application of Article 2(9) and (11) and Article 11(10) of the basic anti-dumping regulation. In that regard, where the Commission verifies whether anti-dumping duties have been passed on to the resale prices to the first independent buyer in the Union in accordance with a PCN-by-PCN method of analysis, it commits a manifest error of assessment by refusing non-deduction of the anti-dumping duties from the export prices of the PCNs for which the anti-dumping duties had nevertheless been reflected in the resale prices and the subsequent selling prices in the Union. By proceeding in that way, the Commission does not draw all the consequences of the PCN-by-PCN method which it had itself decided to apply, in that it deducts all of the anti-dumping duties paid from the export price constructed pursuant to Article 2(9) of the basic anti-dumping regulation, thereby artificially reducing the single weighted average export price per PCN. Moreover, Article 11(10) of the basic regulation does not require the Commission systematically to deduct all the anti-dumping duties paid in a case in which examination by way of a PCN-by-PCN method as to whether the anti-dumping duties were passed on has not made it possible to conclude that the anti-dumping duties were passed on for all PCNs, but only for some of them. (see paras 137-144, 147)

For the purposes of determining, in the context of a procedure for refund of anti-dumping duties paid, whether the constructed export price must be calculated without deducting the amount of those duties, the only requirement laid down in Article 11(10) of the basic regulation is that the related importer must adduce conclusive evidence that the anti-dumping duties have been reflected in the resale prices and in the subsequent selling prices in the Union. In that context, provided it is conclusive, evidence that the anti-dumping duties have been reflected in the resale prices and subsequent selling prices in the Union may be adduced by any means. (see paras 151, 152)