Opinion of Mr Advocate General Mischo delivered on 5 July 1989. - Gestetner Holdings plc v Council and Commission of the European Communities. - Common commercial policy - Dumping - Undertaking - Definitive duty - Plain paper photocopiers originating in Japan. - Case C-156/87.



European Court reports 1990 Page I-00781



Opinion of the Advocate-General

++++

Mr President,

Members of the Court,

1 . Like Nashua Corporation and its subsidiaries, the applicants in Joined Cases C-133/87 and C-150/87, the Gestetner group is one of the "OEMs" ( original equipment manufacturers ) which the Council defines in paragraph 8 of Regulation ( EEC ) No 535/87 of 23 February 1987 imposing a definitive anti-dumping duty on imports of plain paper photocopiers originating in Japan ( 1 ) ( hereinafter : "the contested regulation ") as "importers who sold these products in the Community under their own brand names ". Whilst the plain paper photocopiers (" PPCs ") sold under the Nashua brand name are manufactured by Ricoh, the maker of Gestetner' s PPCs is the Japanese company Mita Industrial Company Limited ( hereinafter : "Mita Japan ") on whose PPCs Article 1 of the contested regulation imposes an anti-dumping duty of 12.6 %.

2 . Gestetner claims that the Court should declare that regulation void or, alternatively, void in so far as it imposes that anti-dumping duty on PPCs manufactured by Mita Japan .

3 . Like Nashua, Gestetner also offered the Commission an undertaking during the investigations; it was not accepted . Gestetner also asks the Court to declare that the Commission' s decision refusing to accept that offer of an undertaking is void . Consequently its application is brought against the Commission as well as against the Council .

4 . Some of the submissions and arguments put forward by the parties are identical or similar to those discussed in connection with Joined Cases C-133/87 and C-150/87 . Others are supplementary or even new and it is those that I shall essentially be considering in this Opinion . As far as the former submissions and arguments are concerned I can confine myself to applying the conclusions which I have reached with regard to the Nashua cases .

5 . Unlike Nashua, Gestetner has not brought separate actions against the Council and the Commission . It has brought one action against the Council and, to a lesser extent, the Commission, since it makes it clear that whilst the claim for the annulment of the contested regulation is directed solely against the Council, its claim for the annulment of the Commission decision rejecting its offer of an undertaking is directed against the Commission and the Council, for the latter confirmed that decision when it adopted the contested regulation .

6 . In this context I would refer to my Opinion delivered today in Case C-133/87 Nashua Corporation v Commission ( joined with Case C-150/87 Nashua Corporation v Council ), in which I considered that an action brought against a Commission decision rejecting an offer of an undertaking is inadmissible . I referred in that Opinion to the Court' s order of 11 November 1987 in Case C-150/87 Nashua v Council and Commission (( 1987 )) ECR 4421, in which the Court rejected as inadmissible Nashua' s application for the annulment of Council Regulation No 535/87 in so far as the application was also directed against the Commission . In that order the Court held that the Commission' s decision to reject an undertaking forms an integral part of the Council' s decision-making process culminating in the imposition of a definitive anti-dumping duty . It follows that the proper place for the applicant to take issue with the Commission' s decision rejecting its offer of an undertaking is in the action brought against the Council regulation imposing the definitive anti-dumping duty .

7 . I shall therefore consider the applicant' s complaints with regard to that decision later when I discuss the substance of the application brought against the Council . First of all, some remarks are called for regarding the admissibility of that application .

I - Admissibility

8 . As in Case C-150/87 the Council claims that the application is inadmissible . However, the objection of inadmissibility lodged in this case differs in certain respects in so far as the applicant has submitted alternative as well as principal conclusions, and argues that the application is admissible on account of Article 2 of the contested regulation, which provides that "the amounts secured by way of a provisional anti-dumping duty under Regulation ( EEC ) No 2640/86 ( 2 ) shall be collected at the rates of duty definitively imposed in the cases of Mita and Toshiba and at the rates of provisional duty applicable in all other cases ".

9 . As regards the applicant' s principal claim, for the annulment of the whole of the contested regulation, the Council is right to consider it inadmissible inasmuch as it follows from the Court' s judgments of 7 May 1987 in the cases on small ball-bearings ( Cases 240, 255, 256, 258 and 260/84 (( 1987 )) ECR 1809, 1861, 1899, 1923 and 1975, respectively ) that where a regulation imposes different anti-dumping duties on a number of economic agents, a particular economic agent can be individually concerned only by those provisions of the regulation which impose a specific anti-dumping duty on it and determine the amount of that duty, and not by those provisions which impose anti-dumping duties on other undertakings .

10 . The object of the applicant' s alternative claim is precisely the annulment of the contested regulation "in so far as it imposes an anti-dumping duty of 12.6% on PPCs manufactured by Mita ". The Council puts forward the same arguments against its inadmissibility as in the Nashua case, namely that the applicant is not individually concerned by the contested regulation even to that limited extent .

11 . For my part I propose that the Court should consider the applicant' s alternative claim admissible for the reasons set out in my Opinion delivered today in Case C-150/87 Nashua Corporation v Council .

12 . The applicant relies on a further argument not put forward by Nashua, that is to say that its application challenging the contested regulation is admissible because it is one of the importers who paid or provided security for the provisional anti-dumping duties imposed by Regulation No 2640/86 and were charged duty on Mita products, under Article 2 of the contested regulation, at the definitive rate of 12.6 %.

13 . In that regard I shall confine myself to observing that if the application were to be held to be admissible on that ground, the applicant should, in any event, be permitted to rely only on the submissions and arguments directly connected with the collection of the provisional duty at the stated rates . ( 3 ) But Gestetner has not confined itself to such submissions, since all of its submissions are directed against the imposition of the definitive duty .

II - Substance

14 . In support of its application for the annulment of the contested regulation the applicant puts forward five submissions under the following heads :

( i ) determination of the export price;

( ii ) comparison of normal value and export price;

( iii ) definition of the Community industry;

( iv ) Community interest;

( v ) rejection of its offer of an undertaking .

1 . Determination of the export price

15 . Gestetner maintains that the price it pays Mita is "the price actually paid or payable for the product sold for export to the Community" within the meaning of Article 2(8)(a ) of Council Regulation ( EEC ) No 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community . ( 4 ) Since Gestetner is completely independent of Mita that price should have been used for calculating the dumping margin and no adjustment should or could have been made to it .

16 . For its part, the Council maintains there was no "price paid" by Gestetner to Mita Japan and therefore the export price was the price paid by Mita Europe to Mita Japan . However, since there was an association between the parent company and its subsidiary, that price could not be used as the reference and the export price had to be constructed under Article 2(8)(b ) of Regulation No 2176/84 . In constructing the export price the Council took as its basis the "price at which the imported product is first resold to an independent buyer", that is to say the price invoiced by Mita Europe to Gestetner, and deducted 5% to take account of the role played by Mita Europe in those sales . Paragraph 16 of the contested regulation does not clearly state that the Council took Article 2(8)(b ) as its basis also as regards sales to OEMs, but that has been the Council' s position throughout the proceedings .

17 . I have doubts about the validity of that choice of legal basis . In general, the Council' s position is that Gestetner is not, as it claims to be, the exporter of the photocopiers but the importer . Yet when it comes to determining the export price the Council no longer regards Gestetner as being any more than the first independent buyer .

18 . Furthermore, the Council' s reasoning is tantamount to ignoring the actual wording of Article 2(8)(b ), which refers to the "price at which the imported product is first resold to an independent buyer" and to the allowance which may be made "for all costs incurred between importation and resale, including all duties and taxes, and for a reasonable profit margin ". But plainly Mita Europe did not purchase and import the product and then resell it to Gestetner . On the contrary, it appears from paragraph 12 of the application, which has not been contested by the institutions, that the PPCs are dispatched from Mita' s factories to warehouses in Japan nominated by Gestetner' s Japanese agent, Cornes . A delivery note is presented for each consignment . The receipted delivery note ( signed by Cornes ) is sent to Mita Japan, which sends it to Mita Europe . The latter raises an invoice on Gestetner and uses the receipted delivery note to draw against a letter of credit established by Gestetner .

19 . As the Council itself states in its defence, in so doing Mita Europe acts "substantially as an agent, or a coordination centre, in processing order forms and actually invoicing certain independent customers within the EEC" ( paragraph 35 ).

20 . Consequently, it is obviously impossible to take the view that the product was purchased, imported and subsequently resold by Mita Europe or that the latter fulfilled the role normally played by an importer . ( Even if it were to be considered that Mita Europe was a "third party" vis-à-vis Mita Japan within the meaning of Article 2(8)(b ), the fact remains that it neither purchased nor resold the imported products .)

21 . It is also significant that neither paragraph 18 of the provisional regulation nor paragraph 16 of the contested regulation, in which "the Council confirms that the Commission' s findings" with regard to the export prices to be used in the case of sales to OEMs, refers to the exporters' subsidiaries in the Community as "importers ". The provisional regulation refers to the role of those subsidiaries as "agents" whilst the contested regulation merely refers to their "function" in making sales to OEMs .

22 . Paragraph 18 of the provisional regulation reads as follows :

"In a number of cases, particularly in relation to exporters to 'OEMs' ..., exporters' subsidiary companies in the Community act as agents in that they process orders from, forward invoices to, and receive payment from the customers concerned . The Commission accordingly considers it appropriate to adjust the export prices to those customers by 5% to take account of a reasonable amount for agent' s commission on the basis of the best information available to the Commission ".

23 . In relation to that paragraph, the contested regulation expressly states ( in paragraph 16 ) that

"the Council confirms the Commission' s findings that the export prices in these circumstances should be appropriately adjusted to take account of the function of the exporter' s subsidiary in making such sales ".

24 . Furthermore, it appears from all the paragraphs of the contested regulation relating to the export price that the Council applied Article 2(8)(b ) to all sales to independent customers in the Community where a Community subsidiary of the exporter played any role whatsoever in those sales . However, the role played was not the same for all sales .

25 . "In cases where, although the subsidiary company (( of the exporter )) was not the formal importer, it performed the functions and bore the costs which are normally those of a related importer", that is to say "took orders, purchased the product from the exporter and resold, at generally higher prices, to, inter alia, unrelated customers" ( first subparagraph of paragraph 15, the Council rightly departed from the initial position adopted by the Commission, which adjusted the export price under Article 2(10)(c ) of Regulation No 2176/84 in order to make allowance for any differences in conditions and terms of sale with the comparable normal value ( paragraph 16 of the provisional regulation ).

26 . The Council thus treated as equivalent cases in which the subsidiary, although not formally importing the product "assumes, nevertheless, the functions typical of an importing subsidiary" ( see the third subparagraph of paragraph 15 of the contested regulation ) and cases in which the exports were made to subsidiaries which formally imported the product into the Community, as referred to in paragraph 17 of the provisional regulation and in the first sentence of paragraph 16 of the contested regulation . However, I do not consider that the Council was entitled to put on the same footing the role played by Mita Europe in Mita Japan' s sales to Gestetner .

27 . It appears from the facts described above that Mita Europe' s role in the sales made to Gestetner is fundamentally different from the role played by the exporter' s subsidiaries in the other sales at issue, in which the latter genuinely purchased and resold the imported product or even acted as the formal importers .

28 . Accordingly I consider that the Council was wrong to apply Article 2(8)(b ) of Regulation No 2176/84 in this case .

29 . However, I do not consider that the contested regulation should be annulled on that account . In its rejoinder ( paragraphs 31 and 32 ) the Council rightly states that if Mita Europe played the role of a mere agent and were part of Mita Japan' s sales organization, its costs would form part of Mita Japan' s direct selling expenses, in which case the institutions would have had to make an allowance under Article 2(10)(c ) of Regulation No 2176/84 for differences in selling costs between domestic and export sales .

30 . The costs associated with the involvement of Mita Europe could therefore in any event have been deducted on that footing from the export price, that is to say the price paid by Gestetner . Gestetner has not challenged the level of the adjustment made in order to take account of the role played by Mita Europe in the sales to Gestetner, namely 5%; indeed, it was not in an ideal situation to do so, since the costs in question were incurred by Mita .

31 . Consequently it has by no means been established that the application of Article 2(8)(b ) of Regulation No 2176/84 led to a result different from that of the application of the proper provision, Article 2(10)(c ). This being so, I consider that, despite the choice of the wrong legal basis, the submission that the determination of the export price was unlawful must be dismissed .

2 . Comparison of normal value and export price

32 . In its second submission Gestetner alleges an infringement of Article 2(9 ) and ( 10 ) of Regulation No 2176/84 . It maintains that the institutions ( a ) did not compare the normal value and the export price "at the same level of trade", and ( b ) did not make the allowances called for as a result .

33 . A reading of paragraph 11 of the contested regulation suffices to show that specific normal values were constructed precisely for comparison with export sales and prices to OEMs . In order to take account of the "difference in cost or profit" between sales to OEMs and sales of manufacturers' own-brand products, a lower profit level was applied to the constructed values for sales to OEMs . It follows that the institutions made allowance for the special nature of sales to OEMs at the stage of the construction of the normal value pursuant to Article 2(3)(b)(ii ) of Regulation No 2176/84 .

34 . Since, therefore, the two parameters in question could in fact be compared at the same level of trade - that of sales to OEMs - it may be asked whether it was still necessary to make an allowance pursuant to Article 2(10 ) of the basic regulation . The applicant itself does not seem convinced that such an allowance was necessary, since it concedes in paragraph 56 of the application that if the institutions had included in the constructed normal value not only a lower profit element but also a lower level of general, administrative and selling expenses it would not have been necessary to apply Article 2(10 ).

35 . As we have already seen in my Opinion in the Nashua cases - and this will also refute Mita' s observations in its intervention ( see p . 32 of the Report for the Hearing ) - by applying a lower level of profit to the values constructed for the purposes of comparison with export prices to OEMs, the institutions did in fact make allowance for differences not only in profit but also in costs . It was only because of the absence of precise information in that regard that the institutions took them into account in the form of a single factor, namely profit margin, which they estimated at 5% in the case of sales to OEMs as against the average level of profits of 14.6% observed for other sales . By using that figure, rather than the figure put forward by Gestetner in Annex 6 to its application, the institutions certainly did not make an unreasonable estimate .

36 . Furthermore, as the Court pointed out in its judgment of 7 May 1987 in Case 255/84 Nachi Fujikoshi v Council (( 1987 )) ECR 1861, whereas adjustments required for the purpose of constructing the export price are made automatically by the Community institutions pursuant to Article 2(8 ) of the basic regulation, ( 5 ) those provided for by Article 2(10 ) may also be made on a claim by an interested party . It added that

"a party making such a claim must prove that its claim is justified, that is to say that the difference on which it relies concerns one of the factors listed by Article 2(9 ), that the difference affects price comparability and lastly, if, as in this case, it is a question particularly of differences in conditions and terms of sales, that those differences bear a direct relationship to the sales under consideration" ( paragraph 33 ).

37 . In this case, such proof has been especially difficult in so far as two presumptions to the contrary set out in Article 2(10)(c ) of Regulation No 2176/84 should also have been rebutted .

38 . First, Article 2(10)(c ) provides that allowance may be made for differences in the level of trade only "in so far as no account has been taken of them otherwise ". Consequently, it is not sufficient for the applicant simply to raise possible differences in the level of trade in order to justify making an appropriate allowance under Article 2(10)(c ). The applicant should also have shown that account was not taken of those differences by means of other adjustments relating to the conditions and terms of sale actually applied ( see paragraph 17 of the contested regulation ).

39 . Furthermore, Article 2(10)(c ) provides that "allowances generally will not be made for differences in overheads and general expenses, including research and development or advertising costs ". Since the adjustments claimed by the applicant relate precisely to such expenses, it should have proved "the existence of (( a )) special circumstance capable of justifying a derogation from the rule thus laid down ". ( 6 )

40 . Gestetner failed to show during the proceedings before the Court that its request for an allowance to be made in respect of the level of trade was justified in the light of all those conditions . It can therefore be concluded that there was no manifest error or misuse of powers on the part of the institutions when they took account of the difference in costs and profits as between sales to OEMs and sales to other purchasers, irrespective of the way in which they did so .

41 . The second submission must therefore also be rejected .

3 . Definition of the Community industry

42 . In its third submission the applicant claims that there were "proper grounds" ( see paragraph 67 of the application ) for excluding Rank Xerox, Tetras, Olivetti and Océ ( or each of them ) from the definition of "Community industry" which the institutions had to effect in order to determine in accordance with Article 4(1 ) of the basic regulation whether

"the dumped ... imports are, through the effects of dumping ..., causing injury, i.e . causing or threatening to cause material injury to an established Community industry or materially retarding the establishment of such an industry ".

43 . According to Article 4(5 ) the term "Community industry" is to be interpreted as referring to

"the Community producers as a whole of the like product or to those of them whose collective output of the products constitutes a major proportion of the total Community production of those products except that :

( i ) when producers are related to the exporters or importers or are themselves importers of the allegedly dumped ... product the term 'Community industry' may be interpreted as referring to the rest of the producers;

( ii ) ...".

44 . It follows from that provision that neither the mere existence of some link between a Community manufacturer and an exporter or an importer nor the mere fact that the product in question is imported by a Community manufacturer automatically excludes that manufacturer from "Community industry" for the purposes of assessing the injury sustained . As the Council has repeatedly argued before the Court and as the Commission pointed out in paragraph 64 of the provisional regulation,

"the question of whether the term 'Community industry' in Article 4(5 ) of Regulation ( EEC ) No 2176/84 should include Community producers who import dumped goods is a matter which can only be decided on a case-by-case basis and in the light of all relevant facts regarding the nature of the links between Community producers and the exporters concerned ".

45 . Apart from the fact that that conclusion makes completely irrelevant the reference to the practice allegedly followed in other earlier cases, it also makes it clear that in order for the submission that Article 4(5 ) of the basic regulation was infringed to be well founded it is not sufficient for there to have been "proper grounds" for or the possibility of excluding certain manufacturers from the category of "Community industry ". On the contrary, the institutions have a wide discretion in this connection and therefore the inclusion of the producers concerned must have been based on substantively incorrect facts or on manifestly wrong assessments of the facts or must constitute a misuse of powers .

46 . I do not consider that in this case the applicant has succeeded in proving that the Council made such errors or was guilty of a misuse of powers .

47 . The part of the contested regulation which deals with the definition of Community industry is one of the longest and certainly the most explicit parts of the whole regulation . According to the opening paragraph of that part ( Section ( iii ) of Chapter H (" Injury ") ) of the contested regulation, it was precisely because all the Community producers concerned had links of either a corporate or a commercial nature with Japanese exporters that the Commission carried out a "detailed examination of the position of each of the complainant companies based on the specific facts pertaining to each company' s situation ". Moreover, a comparison of paragraphs 50 to 77 of the contested regulation and the various complaints made by Gestetner does not in any way suggest that the Council, which confirmed the various conclusions of the Commission, failed to examine any of the aspects mentioned .

48 . Besides, the only two genuine factual claims are more apparent than real and are due, on the one hand, to Gestetner' s lumping together imports of completely assembled PPCs and components and, on the other, to the distinction which it makes between PPCs in segments 1 and 2 ( low-volume copiers ) and PPCs in the other segments covered by the proceeding .

49 . Accordingly, when Gestetner states that Rank Xerox' s imports from Fuji Xerox represented more than approximately 8% of the former' s sales and rentals of segment 1 and 2 photocopiers, contrary to the Council' s assertion in paragraph 52 of the contested regulation, it takes account not only of direct imports of PPCs but also of imports of kits and components ( see paragraph 78 of the application ). At the same time, it takes no account at all of the Council' s other more general statement in that paragraph to the effect that over the period 1981 to July 1985 Rank Xerox' s resales of Fuji Xerox imports represented less than 1% of its sales and rentals of new machines in all the segments covered by the proceeding .

50 . Likewise, in order to challenge the Council' s assertions in paragraph 58 of the contested regulation as to the value added in the Community for PPCs manufactured by Rank Xerox in the range segment 1 to segment 4, Gestetner relies essentially on considerations relating to segments 1 and 2 ( see especially paragraphs 81 and 82 of the reply ). However, apart from the fact that the figures put forward by Gestetner in this regard are within the 20 to 35% range referred to by the Council in paragraph 55 of the contested regulation, it seems to me entirely legitimate that for the purposes of its final finding as to whether Rank Xerox should be part of the "Community industry" the Council should have taken account of the weighted average value added in the Community for all PPCs manufactured by Rank Xerox in the range segment 1 to segment 4 . As the Council itself points out in paragraph 58 of the contested regulation,

"since the like product in the proceeding has been defined to be all photocopiers from personal copiers up to and including machines classified in Dataquest segment 5, it would be inappropriate to analyse whether a Community producer should be part of Community industry just in terms of its production of one model or a limited range of models ".

51 . Since, therefore, the facts relied on by the Council are not themselves genuinely called into question or capable of being challenged, the dispute hinges above all on the way in which the Council assessed them and in particular the legal consequences which it inferred from those facts .

52 . It must first be observed in that connection that in order to determine "Community industry" the institutions must necessarily carry out a general assessment of the situation . Article 4(2 ) of Regulation No 2176/84 provides that the examination of injury is to involve several factors "no one or several of which can necessarily give decisive guidance ". Those factors are the volume and the prices of dumped imports and their impact on the industry concerned . Under that provision the institutions may when determining the injury sustained attach more weight to one of those factors than to the others . Similarly, as appears from the Court' s judgment of 5 October 1988 in Joined Cases 277/85 and 300/85 Canon v Council (( 1988 )) ECR 5731, the list in Article 4(2)(c ) of economic factors which are to be taken into consideration in order to assess the impact of the volume and prices of the dumped imports on the Community industry concerned is merely indicative and the institutions are therefore free to take only some of them as a sufficient basis for forming a judgment ( see the end of paragraph 56 of that judgment ).

53 . In deciding whether, for the purpose of determining injury, a given manufacturer is or is not to be excluded from the definition of Community industry because of its corporate or commercial links with exporters or importers of the product concerned, the question whether it may have inflicted injury on itself or contributed to the injury caused to Community industry must also be examined in the light of those factors, that is to say the volume imported by that manufacturer, the price advantages which it obtained and in particular the prices at which it resold the imported products and their impact on other aspects of the production of that manufacturer itself or of other manufacturers . Those factors must also be assessed in a general manner by weighing up the pros and cons of each factor and, where appropriate, giving priority to the findings made in respect of some of those factors over others . What is decisive is the final general conclusion whether or not Community manufacturers helped to cause the injury - judged in terms of all those factors - which was sustained by those manufacturers themselves or by the rest of the Community industry .

54 . In this case the institutions did carry out such an assessment . It is clear from several paragraphs in the contested regulation that they were perfectly aware of factors which considered in isolation might have weighed in favour of excluding certain manufacturers from the definition of "Community industry ". For example, in paragraph 58 the Council states that there were

"doubts as to whether Rank Xerox' s manufacturing operations in the United Kingdom were sufficient to confer upon it the status of a Community producer in the sense of Article 4(5 ) of Regulation ( EEC ) No 2176/84, for segments 1 and 2 copiers",

and in paragraph 64 it observes that Rank Xerox advanced no convincing evidence to show that it was in order to protect itself against low-priced competition from Japanese producers that it purchased low-volume photocopiers from 1978 onwards from Fuji Xerox, its affiliate in Japan . Consequently, it was only in the light of other relevant circumstances that the overall conclusion was reached that in the final analysis Rank Xerox should nevertheless form part of "Community industry ".

55 . Similarly, as regards the situation of Océ and Olivetti the Council listed in paragraph 71 of the contested regulation a whole series of arguments to the effect that in the final analysis even though those two companies did import PPCs at dumping prices and distributed them on an OEM basis, they did not cause injury to themselves . It pointed out in particular that they did so in order "to offer a full range of models to their customers" ( see the second indent of paragraph 71 ). However, contrary to Gestetner' s arguments ( in paragraphs 71 and 72 of the application ), that consideration, especially in conjunction with the finding that the total volume of such imports was low and that they were sold at higher prices then those charged by their suppliers, is perfectly capable of justifying the conclusion that those companies did not injure themselves or other Community producers and therefore of enabling them to be included in the category of "Community industry" for the purposes of determining injury . In any event, the Court held such an approach to be valid in its judgment of 5 October 1988 in Joined Cases 260/85 and 106/86 Tokyo Electric Company v Council (( 1988 )) ECR 5855 ( see paragraph 47 ).

56 . As far as Tetras is concerned, it must be admitted that the Council' s defence to the effect that paragraph 68 of the contested regulation refers only to whether Tetras should be excluded from "Community industry" for the purposes of joining in the complaint is hard to reconcile with a literal reading of that paragraph, which states that the fact that Canon took a 19% shareholding in Tetras with an option to purchase an additional 30% of the company' s stock

"has not affected Tetras' position either as a Community producer or as a complainant and consequently Tetras remains part of the Community industry for the purposes of this proceeding ".

Since the paragraph in question is in Chapter H, "Injury", it must be accepted that that conclusion relates to Article 4 of Regulation No 2176/84, which is also entitled "Injury", and not to Article 5, "Complaint", as the Council suggests in paragraph 102 of its defence .

57 . However, what clinches the matter for me is the fact that, as the Council has correctly pointed out, the situation of Tetras was not taken into consideration for the purposes of assessing injury or in fixing the rate of anti-dumping duty . According to paragraph 107 of the contested regulation, the duty required to offset the injury to Community producers of PPCs was calculated without the inclusion of any data for Tetras . Moreover, in determining the magnitude of the injury to be offset in that way, only the declines in profits of Rank Xerox, Océ and Olivetti were taken into account ( see paragraph 81 of the contested regulation ). As for paragraph 86 of the contested regulation, which is relied on by Gestetner, that paragraph merely deals with the question whether the ( unquantified ) injury caused to Tetras may be due to factors other than dumping .

58 . It follows that even if paragraph 68 implies that Tetras was included in "Community industry" and if in fact Tetras should have been excluded because of its links with Canon, that does not suffice to justify the annulment of the imposition of anti-dumping duty, since it was not based on the situation of Tetras .

59 . Consequently, the third submission is also unfounded .

4 . Community interest

60 . According to Article 12(1 ) of Regulation No 2176/84 anti-dumping duty may be imposed inter alia only "where the facts as finally established show that ... the interests of the Community call for Community intervention ". Gestetner claims that in this case the Council has failed to take due account of the interests of the Community . It criticizes the Council above all for failing to take account of the structure of the market, in particular its degree of concentration, and the inevitable impact - in view of the market structure - of the imposition of anti-dumping duty on competition and prices and, as a result, on the consumer .

61 . I would first observe that in order to assess the "interests of the Community" the Council has to carry out an appraisal of a complex economic situation . The Court has consistently held that

"the Court must ... limit its review of such an appraisal to verifying whether the relevant procedural rules have been complied with, whether the facts on which the choice is based have been accurately stated and whether there has been a manifest error of appraisal or a misuse of powers ". ( 7 )

62 . Secondly, the Council' s appraisal must necessarily be comprehensive in scope, balancing all kinds of - sometimes conflicting - interests and covering the long as well as the short term . Accordingly, even if its appraisal of a particular aspect, taken in isolation, might be questionable, that would not necessarily mean that its overall appraisal would have to be regarded as wrong .

63 . It is sufficient to refer to paragraphs 88 to 99 of the contested regulation to see, first, that "the views of all the Community producers, Japanese exporters, and importers in the Community, notably the OEMs" ( paragraph 88 ) were in fact considered and, secondly, that the Council took account of both the competitive situation on the market ( paragraph 94 ) and any price increase likely to follow the imposition of anti-dumping duty ( paragraph 98 ) and reached the conclusion that "on balance, it is in the Community' s long-term interest to eliminate the injurious effect to the Community industry concerned of the dumped Japanese imports, and that the benefits of such protection clearly outweigh any effects, particularly on price, which could be said not to be in the interests of the consumer" ( paragraph 99 ).

64 . Moreover, I do not consider that the Council made any manifest error in its appraisal of the various aspects considered .

65 . As for the structure of the market, in the first place it is not clear that Rank Xerox, the biggest Community manufacturer, has a dominant position on that market, as Gestetner considers ( so much so that in September 1986 it lodged a complaint against Xerox Corporation, the parent company, alleging that Article 86 of the EEC Treaty had been infringed ). Although it takes the view that the market as a whole should have been taken into consideration, Gestetner relies exclusively on statistics for the number of copies in order to illustrate its claim, but has to concede that a different view emerges if the market is examined from the point of view of the number of photocopiers sold ( see paragraphs 98 to 100 of the reply ). Furthermore, and leaving aside the fact that it is not for the Council to prejudge, in an anti-dumping proceeding, a decision which the Commission will have to take in a proceeding under Council Regulation No 17 of 6 February 1962, ( 8 ) the fact that in the reference period covered by the anti-dumping investigation in this case some 19 manufacturers held a market share in the Community PPC market and the total market share of all Community manufacturers was only 19% ( see paragraph 109 of the Council' s defence ) clearly distinguishes this case from that of glycine originating in Japan, ( 9 ) cited by Gestetner, in which the competitive situation and the structure of the Community market were characterized by the presence of only one Community producer and two non-Community undertakings . Although, as a result, the risk of a monopoly was unquestionably much greater, the Council considered that it was in the Community' s interest to take protective measures, and even though the definitive duty imposed was not sufficient fully to eliminate the injury determined, it was fixed at the level of injury caused by one of the two Japanese exporters . ( 10 )

66 . In addition, the take-over during the proceeding of one of the complainants by a Japanese exporter gave the Council legitimate grounds for doubts as to the possibilities of survival of an independent Community industry . Moreover, the disappearance of Community manufacturers would foster the development of an oligopolistic market situation just as much as the possible departure of Japanese exporters . The fact that the Council gave preference to the Community industry in those circumstances was certainly in the interest of the Community .

67 . Besides, it does seem that the development predicted by the applicant has not come to pass . None of the competitors has withdrawn from the market since the imposition of the provisional duty and seven Japanese companies have begun to assemble or manufacture machines in the Community ( paragraph 80 of the rejoinder ).

68 . Lastly, I do not consider it to be necessary to consider the effects which Council Regulation No 1761/87 of 22 June 1987 ( 11 ) (" the screwdriver regulation "), authorizing the imposition of anti-dumping duty on products assembled in the Community, is likely to have on the development of the competitive situation in the Community . Since that regulation entered into force after the contested regulation was adopted the Council was not required to take it into account when it imposed the definitive anti-dumping duty . If its effects should turn out to be such that the continued application of the anti-dumping duty is no longer in the interest of the Community, the Commission will have to initiate the review procedure provided for in Article 14 of Regulation No 2176/84, either on its own initiative or at the request of a Member State or an "interested party ".

69 . Consequently, the fourth submission must also be rejected .

5 . The rejection of the offer of an undertaking

70 . Gestetner' s arguments in this connection are largely identical to those put forward by Nashua . For the most part, I can therefore refer to the Opinion which I delivered today in Case C-150/87, where I maintained, in particular, that the institutions did not make a manifest error when they followed the traditional practice of not accepting undertakings from importers ( paragraph 100 of the contested regulation ). Moreover, on pp . 7 and 8 of its defence in this case the Commission sets out a particularly cogent explanation of the reasons underlying that traditional practice .

71 . Given that the undertaking involved raising prices ( Gestetner offered such an undertaking whereas Nashua proposed restricting the quantities imported ), the Commission rightly points out on p . 9 of its defence that even if the undertaking were accepted importers would still have an interest in purchasing the product from manufacturers outside the Community at dumping prices rather than purchasing products manufactured in the Community . The undertaking would secure them a large profit margin .

72 . In those circumstances, Community manufacturers would suffer as much injury as they would in the absence of the undertaking . The only effect of an undertaking given by an importer is to reduce injury to distributors of Community-produced goods, which is not the same thing as eliminating injury to Community producers .

73 . Furthermore, if an undertaking were to be accepted from one importer, undertakings would have to be accepted from all other importers in the same position . The number of exporters is ( usually ) limited : if it is excessive, undertakings are not accepted . In contrast, the number of potential importers is always very large . These arguments would still hold good even if Gestetner could be regarded as an exporter, since the number of potential exporters which are not producers could also be very large . Lastly, the number of types of photocopiers is quite large . In those circumstances, effective supervision of the undertakings would become excessively difficult .

74 . I propose that the Court should also accept those arguments of the institutions : they do not reflect any manifest error of appraisal and are therefore within the very wide discretion which the Court has held that the institutions enjoy . The submission relating to the rejection of the offer of an undertaking must therefore also be rejected .

Conclusion

For all those reasons I propose that the Court should :

( i ) dismiss Gestetner' s application in so far as it is directed against the Commission and in so far as it seeks the annulment of Council Regulation No 535/87 in its entirety;

( ii ) for the rest, declare it to be admissible but dismiss it as unfounded .

Although the applicant' s alternative claim must be declared admissible the fact remains that it has been unsuccessful on its main heads of claim . I therefore propose that the Court order it to pay the costs, including those of the interveners, Cecom . As for the intervener Mita, which intervened in support of Gestetner' s conclusions, it must bear its own costs .

(*) Original language : French .

( 1 ) OJ L 54, 24.2.1987, p . 12 .

( 2 ) Commission Regulation ( EEC ) No 2640/86 of 21 August 1986 imposing a provisional anti-dumping duty on imports of plain paper photocopiers originating in Japan ( OJ L 239, 26.8.1986, p . 5 ), hereinafter referred to as the "provisional regulation ".

( 3 ) This view is supported by the Court' s judgment of 29 May 1979 in Case 118/77 Import Standard Office v Council (( 1979 )) ECR 1277, in which it took into account the provision of the contested regulation providing for the definitive collection of the provisional duty only for the purpose of deciding whether the application was admissible in so far as it was directed against that particular provision ( paragraphs 24 and 27 ).

( 4 ) OJ L 201, 30.7.1984, p . 1 .

( 5 ) In that case the basic regulation was Council Regulation ( EEC ) No 3017/79 of 20 December 1979 ( OJ L 339, 31.12.1979, p . 1 ), which was repealed by Regulation No 2176/84 . However, the provisions at issue in that case were incorporated with substantially identical wording in Regulation No 2176/84 .

( 6 ) See paragraph 35 of the judgment of 7 May 1987 in Case 255/84 Nachi Fujikoshi v Council (( 1987 )) ECR 1861 .

( 7 ) See in particular the judgment of 7 May 1987 in Case 255/84 Nachi Fujikoshi v Council (( 1987 )) ECR 1861, paragraph 21 .

( 8 ) First Regulation implementing Articles 85 and 86 of the Treaty, OJ, English Special Edition 1959-62, p . 87 .

( 9 ) Council Regulation ( EEC ) No 2322/85 of 12 August 1985 imposing a definitive anti-dumping duty on imports of glycine originating in Japan, OJ L 218, 15.8.1985, p . 1 .

( 10 ) See in that connection paragraph 18 of Regulation No 2322/85, which must be read in the light of paragraph 31 of Commission Regulation No 997/85 of 18 April 1985 imposing a provisional anti-dumping duty on imports of glycine originating in Japan ( OJ L 107, 19.4.1985, p . 8 ).

( 11 ) Council Regulation ( EEC ) No 1761/87 of 22 June 1987 amending Regulation ( EEC ) No 2176/84 on protection against dumped or subsidized imports from countries not members of the European Economic Community ( OJ L 167, 26.6.1987, p . 9 ).