Action brought on 10 December 2020 — Far Polymers and Others v Commission

(Case T-722/20)

(2021/C 35/78)

Language of the case: Italian

Parties

Applicants: Far Polymers Srl (Filago, Italy), Gamma Chimica SpA (Milan, Italy), Carbochem Srl (Castiglione Olona, Italy), and Jeniuschem Srl (Gallarate, Italy) (represented by: G. Abbatescianni and E. Patti, lawyers)

Defendant: European Commission

Form of order sought

The applicants claim that the Court should declare the present action admissible and annul Commission Implementing Regulation (EU) 2020/1336 published in the Official Journal (L 315) on 29 September 2020, whereby duties have been imposed on polyvinyl alcohol (PVA) imported from the People’s Republic of China [(‘the contested measure’)].

Pleas in law and main arguments

In support of the action, the applicants rely on eight pleas in law.

The first plea in law alleges that the Commission infringed regulations and manifestly erred in identifying the Union PVA industry, within which it included, in addition to free market operators, those in the captive market, including producers who are also importers. That error (a) invalidated the assessment of injury to the Union industry, which corresponds in fact to the sole complainant, (b) led to the imposition of duties that do not promote free competition on the Union market, but rather favour the sole complainant and/or third countries, (c) led to the inadequate assessment of the interests of all the other Union industry operators (producers, importers and users) in opposing the duties, [and] (d) placed the [contested measure] in direct opposition to the earlier regulations which stated that the production capacity of the Union industry was insufficient and provided for duty-free quotas. For the same reasons, the contested [measure] is, in addition, vitiated by a misuse of powers.

In the second plea in law, it is argued that the contested measure runs counter to the principles set out in Article 102 TFEU and, in addition, is vitiated by manifest error and a misuse of powers, in so far as its effect is to create, in the PVA market, a dominant position for the complainant, the sole producer which operates on the Union free market and has additional production capacity. The [contested] measure does not take into account the documentary evidence relating to the anticompetitive conduct previously shown by the complainant, which has refused to sell low quality PVA at prices that take into account the lower production costs.

In the third plea in law, the applicants criticise the reasoning set out in the [contested] measure imposing the duties as being in breach of Article 296 TFEU and as being vitiated by manifest error, as the Commission refused to segment the Union market into high and low grades, despite having ascertained that two different grades of PVA are sold, with clearly separate production costs, recipients and prices. Those grades are neither superimposable nor interchangeable. After having segmented the market, the Commission should have exempted low-grade PVA from duties.

The fourth plea in law concerns Vinyl Acetate Monomer (VAM), the main raw material in the production of PVA. The Commission, in determining the normal value for the purpose of determining the dumping margin, failed to take account of the absence of distortion of the prices of Chinese VAM aligned with the prices on the international market. Similarly, the Commission failed to take account, when determining the injury margin, of the lower costs incurred by the Chinese exporters who, being vertically integrated, save on the cost of VAM.

In the fifth plea in law it is argued that the Commission provided an incorrect and inconsistent statement of reasons in the contested measure, in breach of Article 296 TFEU, failing to take into account the impact of methanol on the determination of the Chinese producers’ costs and, as a result, failed to recognise, when determining the injury margin, the corresponding adjustment of the export prices for that cost factor.

The sixth plea in law challenges the part of the [contested] measure in which the Commission awarded, pursuant to Article 254 of Regulation (EU) No 952/2013 of the European Parliament and of the Council, an exemption for the import of PVA intended for use in the carton board industry in so far as that exemption (a) was not extended to other end-uses in the exact same situation as the carton board industry and (b) was applied to PVA blending alone, excluding mere import.

The seventh plea in law alleges that the Commission infringed Article 296 TFEU, as well as recital 12 and Article 6(8) of the basic regulation, on account of its decision not to take certain arguments into account for the sole reason that they had been raised by the interested parties and not by the Chinese exporters. In so doing, the Commission arbitrarily introduced the principle that only certain categories of persons may challenge the adoption of a measure by the European institutions.

The eighth and final plea in law alleges infringement of Article 296 TFEU and Article 19 of the basic regulation relating to access to information. The Commission gathered an entire set of non-confidential data without making it accessible to the interested parties. Thus, the interested parties were not in a position to reconstruct the reasoning relied on by the Commission when adopting the contested measure.