Keywords

Summary



Keywords

1 Common commercial policy - Protection against dumping - Discretion of the institutions - Judicial review - Limits

2 Common commercial policy - Protection against dumping - Dumping margin - Determination of the normal value - Priority factor - Price charged in the ordinary course of trade - Reference to other factors - Conditions - Absence of sales on the domestic market made in the ordinary course of trade or permitting a proper comparison - Ordinary course of trade - Sales which permit a proper comparison - Concept

(Council Regulation No 2423/88, Art. 2(3)(a) and (b))

3 Common commercial policy - Protection against dumping - Dumping margin - Determination of the normal value - Reference to the constructed value - Order of priority as between the different methods of calculation - Calculation of the profit margin - Reference primarily to the profit realised by the producer or exporter concerned on its own profitable domestic sales of the like product - Reference to the profit realised by other producers or operators on their profitable domestic sales of the like product - Conditions

(Council Regulation No 2423/88, Art. 2(3)(b)(ii))

4 Common commercial policy - Protection against dumping - Dumping margin - Determination of the normal value - Constructed value - Selling, general and administrative expenses - Different rules from those applicable for construction of the export price

(Council Regulation No 2423/88, Arts 2(3) and 7(7)(b))

5 Procedure - Introduction of new pleas in law in the course of the proceedings - Conditions - New plea - Definition

(Rules of Procedure of the Court of First Instance, Arts 44(1)(c) and 48(2))

6 Common commercial policy - Protection against dumping - Dumping margin - Determination of the normal value - Reference to the constructed value - Export sales to original equipment manufacturers (OEMs) - Adjustment of the profit margin included in the constructed normal value of those sales - Conditions

(Council Regulation No 2423/88, Art. 2(3)(b)(ii))

Summary

1 When the institutions, acting under the basic regulations, adopt specific protective measures against dumping, they enjoy a wide discretion by reason of the complexity of the economic, political and legal situations they have to examine. It follows that review of such assessments by the Community judicature must be limited to verifying whether the relevant procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated and whether there has been a manifest error of assessment of the facts or a misuse of power.

When they exercise the discretion conferred on them by the basic regulation, the institutions are not obliged to explain in detail and in advance the criteria which they intend to apply in every situation, even where they create new policy options.

2 According to the wording and scheme of Article 2(3)(a) of the basic anti-dumping regulation No 2423/88, to establish the normal value regard must be had primarily to the actual price on the domestic market. It is apparent from Article 2(3)(b) of that regulation that that principle may be derogated from only when there are no sales of the like product in the ordinary course of trade or when such sales do not permit a proper comparison.

The ordinary course of trade is a concept which relates to the nature of sales themselves. It is meant to exclude, for the purpose of determining the normal value, situations in which sales on the domestic market are not made under ordinary trade conditions, in particular where a product is sold at a price below production costs.

The institutions consider that where the volume of a producer's profitable domestic sales is less than 10% of its total volume of domestic sales of the like product, the actual price does not constitute an appropriate basis for the purpose of establishing the normal value.

The requirement that domestic sales must permit a proper comparison relates to the question whether those sales are sufficiently representative to serve as a basis for the determination of the normal value. Transactions on the domestic market must reflect normal behaviour on the part of purchasers and result from normal patterns of price formation. That requirement is satisfied where sales by the producer concerned on the domestic market exceed 5% of export sales to the Community.

3 The three methods of calculating the constructed value laid down by Article 2(3)(b)(ii) of the basic anti-dumping regulation No 2423/88 must be considered in the order in which they are set out.

The profit margin must therefore be calculated primarily by reference to the profit realised by the producer concerned on profitable domestic sales of the like product. Only if those data are unavailable or unreliable or not suitable for use is the profit margin to be calculated by reference to the profits realised by other producers on their domestic sales of the like product.

Other than in exceptional cases, where a producer or exporter realises profits on a domestic sales volume which is less than 10% of the total volume of its domestic sales of the like product, those profits are not reliable and are not suitable for use in calculating the profit margin to be included in the constructed normal value of the products concerned.

4 Determination of the normal value and determination of the export price are governed by separate rules which are independent of each other. Consequently, the institutions are not obliged to take into consideration, when determining the constructed normal value, the amount of insurance and transport costs calculated precisely in order to determine the net export price of the dumped products at the ex-factory level.

5 It follows from Article 44(1)(c) in conjunction with Article 48(2) of the Rules of Procedure that the original application must contain the subject-matter of the proceedings and a summary of the pleas in law relied on, and that new pleas in law may not be introduced in the course of the proceedings unless they are based on matters of law or of fact which come to light in the course of the procedure. However, a submission which may be regarded as amplifying a submission made previously, whether directly or by implication, in the original application, and which is closely connected therewith, will be declared admissible.

6 The essential difference between sales to original equipment manufacturers (OEMs) and own-brand sales is at the marketing stage. Those two types of sale are aimed at different customers, who generally operate at different marketing stages. An OEM functions in a different way from ordinary retailers. It buys products from a manufacturer and then sells them under its own brand, while assuming the manufacturer's liability and bearing the costs inherent in marketing the products. The special nature of those functions is reflected in particular in the structure of the prices charged by the manufacturer to OEM purchasers, in that those prices are generally lower than those charged to ordinary distributors.

Consequently, by requiring, for an OEM adjustment to be granted, a producer to show that its export sales to OEM purchasers in the Community were made at a price and profit margin lower than those of its domestic own-brand sales, the Council did not infringe Article 2(3) of the basic anti-dumping regulation No 2423/88.