Case T-192/08

Transnational Company ‘Kazchrome’ AO and

ENRC Marketing AG

v

Council of the European Union

(Dumping – Imports of ferro-silicon originating in the former Yugoslav Republic of Macedonia, China, Egypt, Kazakhstan and Russia – Causal link – Community interest – Lack of cooperation – Facts available – Market economy treatment – Rights of the defence – Duty to state reasons)

Summary of the Judgment

1. Common commercial policy – Protection against dumping – Injury – Establishing a causal link – Criteria

(Council Regulations No 384/96, Art. 3(6) and (7), and No 1225/2009, Art. 3(6) and (7))

2. International agreements – Agreement establishing the World Trade Organisation – GATT 1994 – Direct effect – None – Not possible to rely on the WTO agreements to contest the lawfulness of a Community act – Exceptions – Community measure intended to implement a GATT or WTO rule or expressly and specifically referring thereto

(Art. 230 EC; General Agreement on Tariffs and Trade 1994)

3. Common commercial policy – Protection against dumping – Injury – Discretion of the institutions – Judicial review – Limits

(Council Regulations No 384/96, Art. 3, and No 1225/2009, Art. 3)

4. Common commercial policy – Protection against dumping – Injury – Establishing a causal link – Obligations of the institutions

(Council Regulations No 384/96, Art. 3(7), and No 1225/2009, Art. 3(7))

5. European Union law – Principles – Rights of the defence – Observance thereof in the context of administrative proceedings – Antidumping

6. Common commercial policy – Protection against dumping – Injury – Establishing a causal link – Obligations of the institutions

(Council Regulations No 384/96, Art. 3(7), No 172/2008 and No 1225/2009, Art. 3(7))

7. Procedure – Application initiating proceedings – Formal requirements – Identification of the subject-matter of the dispute – Brief summary of the pleas in law on which the application is based – General reference to other documents, even those annexed to the application – Inadmissibility

(Statute of the Court of Justice, Arts 21, first para., and 53, first para.; Rules of Procedure of the General Court, Art. 44(1)(c))

8. Common commercial policy – Protection against dumping – Assessment of the Community interest – Taking into account of information relating to a period subsequent to the investigation period – Whether permissible

(Council Regulations No 384/96, Arts 6(1) and 21(1), and No 1225/2009, Arts 6(1), and 21(1))

9. Common commercial policy – Protection against dumping – Assessment of the Community interest – Discretion of the institutions – Elements to be taken into consideration

(Council Regulations No 384/96, Art. 21(1), and No 1225/2009, Art. 21(1))

10. Acts of the institutions – Statement of reasons – Obligation – Scope – Regulation imposing anti-dumping duties

(Art. 253 EC)

11. Common commercial policy – Protection against dumping – Conduct of the investigation – Facts available – Entitlement to use those facts where a verification visit is cancelled

(Council Regulations No 384/96, Art. 18(1) and (3), and No 1225/2009, Art. 18(1) and (3))

12. Common commercial policy – Protection against dumping – Scope of the obligation on the Commission to examine for accuracy the information supplied by the interested parties – Information supplied in the context of the grant of market economy treatment – Included

(Council Regulations No 384/96, Arts 2(7)(b), 6(8), and 16(1), and No 1225/2009, Arts 2(7)(b), 6(8) and 16(1))

13. Common commercial policy – Protection against dumping – Assessment of the Community interest – Infringement of the rights of the defence – No bearing on the lawfulness of the regulation imposing a definitive anti-dumping duty – Conditions

(Council Regulations No 384/96, Art. 3(7), and No 1225/2009, Art. 3(7))

1. It can be seen from Article 3(6) of the basic anti-dumping regulation No 384/96 (now Article 3(6) of Regulation No 1225/2009) that the institutions must demonstrate that the dumped imports are causing material injury to the Community industry, regard being had to their volume and their price (attribution analysis). It can be seen, next, from Article 3(7) of the same basic regulation (now Article 3(7) of Regulation No 1225/2009) that the institutions must examine all the other known factors which are injuring the Community industry at the same time as the dumped imports and ensure that the injury caused by those other factors is not attributed to the dumped imports (non-attribution analysis).

The purpose of those provisions is to ensure that the institutions separate and distinguish the injurious effects of the dumped imports from those of the other factors.

To that end, those other factors must in certain circumstances be analysed collectively. That is the position, in particular, if, after carrying out an individual analysis, the institutions conclude that each of those other factors has had a negative effect on the situation of the Community industry even though on their own the effects cannot be regarded as significant

The analysis of causation does not necessarily have to be carried out at the level of the Community industry as a whole, with no possibility of taking into consideration injury caused to a single Community producer by a factor other than the dumped imports. The institutions must examine, at the same time as the dumped imports, all the other known factors which are causing injury to the Community industry and then ensure that the injury caused by those other factors is not attributed to the dumped imports. Article 3(7) of the basic regulation does not state that that examination must take account only of injury caused by the other factors to the Community industry as a whole. Consequently, it is possible that, in certain circumstances, injury caused individually to a Community producer by a factor other than the dumped imports must be taken into consideration, where it has contributed to the injury observed in relation to the Community industry as a whole. However, such a possibility does not mean that the institutions are obliged as a matter of course to analyse the individual situation of each Community producer.

(see paras 30-31, 37, 41-45, 88, 180, 194-195, 209)

2. In view of their nature and structure, the World Trade Organisation (WTO) agreements are not in principle among the rules in the light of which the Court of the European Union is to review the legality of measures adopted by the EU institutions, pursuant to the first paragraph of Article 230 EC. However, where the Community has intended to implement a particular obligation assumed in the context of the WTO, or where the EU measure refers expressly to precise provisions of the WTO agreements, it is for the Court of the European Union to review the legality of the EU measure in question in the light of the WTO rules. That is the position of the basic anti-dumping regulation No 384/96 whose purpose is to transpose into EU law, as far as possible, the rules laid down in the 1994 Anti-Dumping Agreement. In addition, although the interpretations of the Anti-Dumping Agreement by the WTO’s Dispute Settlement Body cannot bind the Court in its assessment as to whether an implementing regulation is valid, there is nothing to prevent the Court from referring to them, where a provision of the basic regulation has to be interpreted.

(see paras 32-33, 36)

3. The question whether a Community industry has suffered injury and, if so, whether that injury is attributable to the dumped imports and 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 Courts of the European Union of the assessments made by 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 paras 51, 90, 164)

4. It cannot be claimed that basing the analysis of causation between the dumped imports and the injury to the Community industry on theoretical nominal utilisation capacity, rather than on actual utilisation capacity, is necessarily in breach of the non-attribution principle. Although switching the means of production to another market must lead to the adjustment of the figures relating to production capacity, those figures do not have to reflect all the temporary stoppages of the production machinery. On the other hand, in such circumstances, the institutions must ensure that the obligations referred to in Article 3(7) of the basic anti-dumping regulation No 384/96 (now Article 3(7) of Regulation No 1225/2009) are complied with and properly carry out a non-attribution analysis which must separate and distinguish the injury caused, where relevant, by those temporary stoppages, from the injury caused by the dumped imports.

(see paras 105, 109)

5. The requirements stemming from the right to a fair hearing must be observed not only in the course of proceedings which may result in the imposition of penalties, but also in investigative proceedings prior to the adoption of anti-dumping regulations which may directly and individually affect the undertakings concerned and entail adverse consequences for them. In particular, the undertakings concerned should have been placed in a position during the administrative procedure in which they could effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegation concerning the existence of dumping and the resultant injury.

As regards the alleged inconsistencies and anomalies of the essential facts and considerations on the basis of which it is intended to impose provisional duties, an interested party cannot confuse failure to observe its rights of defence with the existence of other, substantive, errors which may affect the legality of the regulation imposing a definitive anti-dumping duty. The [mere allegation of such inconsistencies and anomalies] does not prove, however, that the Commission infringed an applicant’s rights of defence. In any event, in order to observe the right to a fair hearing the institutions are not required to reply to each argument raised by an exporting producer in the course of the proceeding, but only to place the interested parties in a position in which they may effectively defend their interests.

(see paras 110, 319, 321, 326-327, 332)

6. The institutions infringe Article 3(7) of the basic anti-dumping regulation No 384/96 (now Article 3(7) of Regulation No 1225/2009) by failing to separate and distinguish the effects of the substantial investments made by the Community industry during the investigation period from the effects of the dumped imports. The same is true of the failure by the institutions to assess the impact of the lack of profitability of certain Community producers on the Community industry as a whole.

However, such an infringement gives grounds for annulling an implementing regulation, such as Regulation No 172/2008, only if it calls in question the lawfulness of the regulation by invalidating the institutions’ entire analysis of causation. That is not the case when the investments in question did not make a considerable contribution to the injury sustained by the Community industry during the investigation period.

(see paras 116, 119-120, 180-182, 211)

7. Under the first paragraph of Article 21 of the Statute of the Court of Justice – applicable to the General Court by virtue of the first paragraph of Article 53 of that Statute and Article 44(1)(c) and (d) of the Rules of Procedure of the General Court – all applications must indicate the subject-matter of the proceedings and the form of order sought by the applicant, and include a brief statement of the grounds relied on. The information given must be sufficiently clear and precise to enable the defendant to prepare his defence and the General Court to decide the case. In order to ensure legal certainty and the sound administration of justice, it is necessary, if an action is to be admissible, for the essential facts and points of law on which the action is based to be apparent from the text of the application itself, even if only stated briefly, provided that the statement is coherent and comprehensible. Whilst the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed thereto, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law, which must appear in the application.

(see para. 212)

8. Article 6(1) of the basic anti-dumping regulation No 384/96 (now Article 6(1) of Regulation No 1225/2009) does not apply in the context of determining whether there is a Community interest as contemplated in Article 21(1) of that basic regulation (now Article 21(1) of Regulation No 1225/2009), which means that information relating to a period subsequent to the investigation period may be taken into account for those purposes. Fixing an investigation period and precluding consideration of factors arising subsequently are intended to ensure that the results of the investigation are representative and reliable. The investigation period under Article 6(1) is intended to ensure, in particular, that the factors on which the determination of dumping and injury is based are not influenced by the conduct of the producers concerned after the anti-dumping proceeding has been initiated and, accordingly, that the definitive duty imposed as a result of the proceeding is appropriate to remedy effectively the injury caused by the dumping.

Moreover, first, Article 21 of the basic regulation does not contain any temporal restriction as to the information which may be taken into account by the institutions for the purposes of determining whether there is a Community interest. Second, examination of the Community interest requires an evaluation of the likely consequences, both for the interest of the Community industry and for the other interests at stake, of applying – and of not applying – the measures proposed. That evaluation involves a forecast based on hypotheses regarding future developments, which includes an appraisal of complex economic situations. Such an assessment entails a broad measure of discretion on the part of the Commission and, consequently, a review by the judicature of the European Union restricted to verifying whether the procedural rules have been complied with, whether the facts on which the contested choice is based are accurate or whether there has been a manifest error of appraisal or a misuse of powers.

(see paras 221-224, 227)

9. An assessment of the Community interest with the meaning of Article 21(1) of the basic anti-dumping regulation No 384/96 (now Article 21(1) of Regulation No 1225/2009) requires the interests of the various parties concerned to be balanced against the public interest. The Commission has a broad measure of discretion when evaluating the Community interest, which must be exercised on a case-by-case basis, with reference to all the relevant facts. Nevertheless, for the purposes of applying Article 21(1) of the basic regulation, an earlier decision finding that anti-dumping measures imposed on imports of the same goods from the same countries as those covered by the investigation procedure lacked remedial effect may be relevant if it helps to show that the adoption of anti‑dumping measures is not in the general interest.

(see paras 240-241)

10. The statement of reasons required under Article 253 EC must show clearly and unequivocally the reasoning of the EU authority which adopted the contested measure, so as to inform the persons concerned of the justification for the measure adopted and thus to enable them to defend their rights and the Courts of the European Union to exercise their powers of review. On the other hand, the institutions are not required to reply, in the statement of reasons for the provisional or definitive regulation relating to anti-dumping duties, to all the points of fact and law raised by the persons concerned during the administrative procedure. Since the Commission analysed in a clear and unequivocal manner the consequences of the anti-dumping measures for Community ferro-silicon users and the Council conducted a shorter, yet no less clear, examination of the impact of the imposition of anti-dumping duties on those users, it cannot be claimed that the institutions acted in breach of the obligation to state reasons.

(see paras 256-257)

11. In the context of investigations carried out in the course of an anti-dumping procedure, the cancellation of a verification visit by an interested party must be analysed not in the light of Article 18(3) of the basic anti-dumping regulation No 384/96 (now Article 18(3) of Regulation No 1225/2009) but in the light of Article 18(1) of that regulation (now Article 18(1) of Regulation No 1225/2009). Although the cancellation of a verification visit is not covered by any of the last three cases envisaged in Article 18(1) of that basic regulation, it must be regarded – save in the case of force majeure – as a refusal of access to information which the Commission has considered to be necessary, as in the first case envisaged in that provision. In addition, Article 18(3) of the basic regulation may not be used in order to circumvent the obligation to allow a verification visit to go ahead where such a visit has been considered necessary by the Commission’s services. Admittedly, under Article 18(3) of the basic regulation, where the information is not ideal in all respects, the use of the facts available is to be disregarded only if the interested party has acted to the best of its ability. As it is, where there has been a refusal to allow a verification visit to go ahead, a party cannot be considered to have acted to the best of its ability.

As regards the purpose of Article 18(1) of the basic regulation, since the basic regulation does not give the Commission any power of investigation enabling it to compel the producers or exporters complained of to participate in the investigation or to produce information, the Council and the Commission depend on the voluntary cooperation of the parties concerned in supplying the necessary information within the time-limits set. The refusal to allow a verification visit to go ahead runs counter to the objective of honest and diligent cooperation with which Article 18(1) of the basic regulation seeks to ensure compliance.

Lastly, it follows from an analysis of the scheme of the basic anti-dumping regulation, first, that it is for the institutions to decide whether, for the purposes of checking the information supplied by an interested party, they consider it necessary to corroborate that information by a verification visit at the premises of that party and, second, that, where an interested party impedes verification of the information which it has supplied, Article 18 of the basic regulation applies and the facts available may be used.

(see paras 270-276)

12. Since Article 6(8) of the basic regulation anti-dumping regulation No 384/96 (now Article 6(8) of Regulation No 1255/2009) does not place any limitation on the scope of the obligation to check the facts upon which the institutions base their findings, such an obligation extends to information supplied by an interested party in the course of a claim for market economy treatment (‘MET’). In addition, Article 16(1) of the basic regulation (now Article 16(1) of Regulation No 1225/2009) does not limit the possibility of carrying out visits at the premises of the interested parties, if the Commission considers it appropriate, depending on the information which it seeks to corroborate. It follows that Article 16(1) of the basic regulation authorises the Commission to carry out a visit at the premises of an exporting producer in order to deal with its MET claim and to satisfy itself as to the accuracy of the information supplied therein, if the Commission considers it necessary.

Consequently, the fact that Article 2(7)(b) of the basic anti-dumping regulation No 384/96 (now Article 2(7)(b) of Regulation No 1225/2009) does not require a verification visit to be carried out at the premises of the exporting producer making the MET claim does not mean that such a visit may not take place. Similarly, the organisation of a verification visit, in the context of dealing with an MET claim, cannot be regarded as imposing a condition additional to those laid down in Article 2(7)(b) of the basic regulation.

(see paras 294-296)

13. In the context of an anti-dumping proceeding, the institutions are not required to request explanations from the Community producers for the trends observed in relation to them, since it is not for those producers to carry out a non-attribution analysis under Article 3(7) of the basic anti-dumping regulation No 384/96 (now Article 3(7) of Regulation No 1225/2009). By contrast, such an analysis has to be carried out by the institutions for the purposes of the provisional and definitive determinations. In addition, even if the principle of the right to a fair hearing requires exporting producers to be informed of the essential facts and considerations on the basis of which it is intended to impose provisional duties, a failure to respect that right cannot in itself have the effect of vitiating the regulation imposing definitive duties where, in the course of the procedure for the adoption of the latter regulation, the defect vitiating the procedure for the adoption of the corresponding regulation imposing provisional duties was remedied.

(see paras 314, 319)

JUDGMENT OF THE GENERAL COURT (Second Chamber)

25 October 2011 ( )

(Dumping – Imports of ferro-silicon originating in the former Yugoslav Republic of Macedonia, China, Egypt, Kazakhstan and Russia – Causal link – Community interest – Lack of cooperation – Facts available – Market economy treatment – Rights of the defence – Obligation to state reasons)

In Case T‑192/08,

Transnational Company ‘Kazchrome’ AO, established in Aktobe (Kazakhstan),

ENRC Marketing AG, established in Kloten (Switzerland),

represented initially by L. Ruessmann and A. Willems, and subsequently by A. Willems and S. de Knop, lawyers,

applicants,

v

Council of the European Union, represented initially by J.-P. Hix, and subsequently by J.-P. Hix and B. Driessen, acting as Agents, assisted initially by G. Berrisch and G. Wolf, and subsequently by G. Berrisch, lawyers,

defendant,

supported by:

European Commission, represented by H. van Vliet and K. Talabér‑Ritz, acting as Agents,

and by

Euroalliages, established in Brussels (Belgium), represented by J. Bourgeois, Y. van Gerven and N. McNelis, lawyers,

interveners,

APPLICATION for partial annulment of Council Regulation (EC) No 172/2008 of 25 February 2008 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of ferro-silicon originating in the People’s Republic of China, Egypt, Kazakhstan, the former Yugoslav Republic of Macedonia and Russia (OJ 2008 L 55, p. 6), in so far as it applies to the applicants,

THE GENERAL COURT (Second Chamber),

composed of I. Pelikánová, President, K. Jürimäe (Rapporteur) and S. Soldevila Fragoso, Judges,

Registrar: N. Rosner, Administrator,

having regard to the written procedure and further to the hearing on 7 December 2010,

gives the following

Judgment

Background to the dispute

1 The applicants – Transnational Company Kazchrome AO (‘Kazchrome’) and ENRC Marketing AG – are companies engaged in the production and sale of ferro‑silicon, one of the raw materials used in the manufacture of steel and iron. Kazchrome, which is established in Kazakhstan, sells its entire production to ENRC Marketing, which is established in Switzerland. The latter in turn sells Kazchrome’s production throughout the world.

2 Following a complaint filed on 16 October 2006 by Euroalliages (the Liaison Committee of the Ferro-Alloy Industry), the Commission of the European Communities (now ‘the European Commission’; ‘the Commission’) initiated an anti-dumping proceeding, concerning imports of ferro‑silicon originating in the former Yugoslav Republic of Macedonia, China, Egypt, Kazakhstan and Russia, pursuant to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1), as amended (‘the basic regulation’) (replaced by Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ 2009 L 343, p.51; corrigendum in OJ 2010 L 7, p. 22) and, in particular, pursuant to Article 5 of the basic regulation (now Article 5 of Regulation No 1225/2009). The notice of initiation of the proceeding was published in the Official Journal of the European Union of 30 November 2006 (OJ 2006 C 291, p. 34). The investigation into dumping and injury covered the period from 1 October 2005 to 30 September 2006 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from January 2003 to the end of the investigation period (‘the period under consideration’).

3 In the course of that proceeding, the applicants submitted a claim to the Commission on 15 December 2006 for the grant of market economy treatment (‘MET’), pursuant to Article 2(7)(b) and (c) of the basic regulation (now Article 2(7)(b) and (c) of Regulation No 1225/2009).

4 On 12 January 2007, the applicants sent their replies to the Commission’s anti‑dumping questionnaire, together with a document regarding injury. On 25 January 2007, the applicants sent the Commission additional comments regarding injury.

5 By letter dated 14 February 2007, the applicants informed the Commission that they were stopping their participation in the investigation but that they were prepared to provide explanations regarding the data which they had already submitted to the Commission. By fax of the same date, the Commission informed the applicants that it was accordingly cancelling the verification visit planned for the period from 22 February to 2 March 2007. It pointed out that such a cancellation meant that, in the absence of verification, the data submitted by the applicants to the Commission could not be accepted and that, under Article 18 of the basic regulation (now Article 18 of Regulation No 1225/2009), it might be necessary to make the findings of the investigation on the basis of the facts available. By letter dated 20 February 2007, the applicants informed the Commission that, although unable to cooperate fully in the investigation, they wished to assist in that investigation to the extent possible.

6 On 5 July 2007, the Commission informed the applicants that, since it had been unable to verify, at their premises, the information which they had submitted, they would not be granted MET. On 16 July 2007, the applicants sent the Commission their comments on the refusal to grant MET.

7 On 29 August 2007, the Commission published Commission Regulation (EC) No 994/2007 of 28 August 2007 imposing a provisional anti‑dumping duty on imports of ferro-silicon originating in the People’s Republic of China, Egypt, Kazakhstan, the former Yugoslav Republic of Macedonia and Russia (OJ 2007 L 223, p. 1; ‘the provisional regulation’). In particular, the provisional regulation imposed a provisional anti-dumping duty the rate of which was set at 33.9% for imports of ferro-silicon from Kazakhstan. The Commission stated, in recital 25 in the preamble to the provisional regulation, that the applicants’ MET claim had had to be disregarded, since they had not allowed the verification visit.

8 By letter dated 30 August 2007, the Commission disclosed to the applicants the essential facts and considerations on the basis of which the provisional anti‑dumping measures had been adopted (‘the provisional disclosure document’). By letter of 15 September 2007, the Commission sent the applicants a supplement to the provisional disclosure document. On 5 October 2007, the applicants sent the Commission their comments on the provisional disclosure document.

9 On 18 December 2007, the Commission sent the applicants a letter setting out the essential facts and considerations on the basis of which it proposed to recommend the imposition of definitive anti-dumping measures (‘the definitive disclosure document’). The applicants submitted their comments on the definitive disclosure document by letter sent to the Commission on 3 January 2008.

10 On 25 February 2008, the Council of the European Union adopted Regulation (EC) No 172/2008 of 25 February 2008 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of ferro‑silicon originating in the People’s Republic of China, Egypt, Kazakhstan, the former Yugoslav Republic of Macedonia and Russia (OJ 2008 L 55, p. 6; ‘the contested regulation’). Under the contested regulation, the rate of the definitive anti-dumping duty applicable to the net, free-at-Community-frontier price, before duty, was set at 33.9% for the products from Kazakhstan.

Procedure and forms of order sought

11 By application lodged at the Court Registry on 21 May 2008, the applicants brought the present action.

12 By documents lodged at the Court Registry on 1 and 3 September 2008 respectively, Euroalliages and the Commission applied for leave to intervene in the present case in support of the form of order sought by the Council.

13 By document lodged at the Court Registry on 28 October 2008, the applicants requested that, pursuant to Article 116(2) of the Court’s Rules of Procedure, certain confidential material in the file be omitted from the communication to Euroalliages. For the purposes of that communication, the applicants produced a non-confidential version of the pleadings and documents in question.

14 By orders of 2 December 2008 and 16 February 2009 respectively, the President of the Second Chamber of the Court granted the Commission and Euroalliages leave to intervene.

15 By letter lodged at the Court Registry on 10 March 2009, Euroalliages stated that it had no objection to the applicants’ request for confidential treatment.

16 By letter lodged at the Court Registry on 26 June 2009, the Commission informed the Court that it waived the right to lodge a statement in intervention, but that it would take part in the hearing.

17 The applicants claim that the Court should:

– declare that the action is admissible;

– annul the contested regulation in so far as it applies to them;

– order the Council to pay the costs.

18 The Council, supported by the Commission, contends that the Court should:

– dismiss the action;

– order the applicants to pay the costs.

19 Euroalliages contends that the Court should:

– dismiss the action;

– order the applicants to pay the costs, including those borne by Euroalliages as a result of its intervention.

Law

20 In support of their claim for annulment, the applicants put forward four pleas in law. By the first plea, they dispute the finding that there is a causal link between the dumped imports and the injury. By the second, they call in question the analysis of the Community interest. By the third; they criticise the institutions’ assessment of their cooperation in the investigation, the application of Article 18 of the basic regulation and the treatment of the MET claim. By the fourth plea, they allege infringement of their rights of defence.

A – The first plea, concerning the causal link between the dumped imports and the injury

21 The complaints relied on by the applicants in the context of the first plea can be grouped into three categories:

– (i) the complaints concerning the interpretation of the legal principles governing the analysis of the causal link between the dumped imports and the injury to the Community industry, the applicants alleging, in the first part of the plea, errors of law in the interpretation of Article 3(6) and (7) of the basic regulation (now Article 3(6) and (7) of Regulation No 1225/2009);

– (ii) the complaints concerning the individual analysis by the institutions of a certain number of factors, other than the dumped imports, that could have caused the injury to the Community industry or contributed to it, the applicants alleging in that regard, in the second to eighth parts of the plea, manifest errors of assessment and a number of infringements by the institutions in connection with the individual analysis of certain injury factors;

– (iii) the complaints concerning the fact that no collective analysis was carried out of the various injury factors other than the dumped imports, the applicants alleging, in particular, in the first and eighth parts of the plea, a manifest error of assessment on the part of the institutions in that they did not carry out an analysis of those factors, considered collectively.

22 Those three categories of complaint will each be considered in turn.

1. Interpretation of the legal principles applicable to the analysis of causation (first part of the first plea)

a) Arguments of the parties

23 In the first part of the first plea, the applicants submit that the methodology adopted by the Council, in establishing the causal link between the dumped imports and the injury, is flawed by two errors of law.

24 First, the applicants argue that the Council’s approach reflects an artificial distinction drawn between the attribution injury analysis and the non-attribution injury analysis. Under Article 3(7) of the basic regulation, a proper causation assessment requires consideration of the other known factors from the start, so that the impact of the imports covered by the investigation procedure will not be confused with the impact of the other factors. Accordingly, the institutions could not conclude that the imports covered by the investigation procedure had caused the injury without first investigating whether other factors had in fact caused it.

25 Second, the applicants submit that it is clear from reports of the Appellate Body of the World Trade Organisation (WTO) and from the case-law of the Court of Justice and the General Court that the effect of the causal factors must be examined collectively.

26 The Council, supported by the interveners, contends that, in order to determine whether the dumped imports caused material injury, it is necessary to consider, first of all, whether the injury was caused by the dumped imports, with particular regard to the volume and prices of the dumped imports and the undercutting calculation. Only if such a causal link is established is it then necessary to examine whether other factors might have contributed to the injury in a manner that broke the causal link. The Council additionally contends that the collective assessment of the other factors is in no way mandatory in law; that it is not applied in practice; and that it is not a principle endorsed by the European Union (‘EU’) judicature.

b) Findings of the Court

27 The first part of the first plea concerns, essentially, the conditions for the application of Article 3(6) and (7) of the basic regulation, under which the Council and the Commission are under an obligation to consider whether the injury on which they intend to base their conclusions actually derived from dumped imports and must disregard any injury deriving from other factors (Case C‑358/89 Extramet Industrie v Council [1992] ECR I‑3813, paragraph 16, and Case T‑107/04 Aluminium Silicon Mill Products v Council [2007] ECR II‑669, paragraph 72).

28 In the first place, it is necessary to determine whether, as the applicants assert, the provision in question requires the institutions to examine, first, the impact of the dumped imports and of the other known factors on the Community industry, before going on to conclude that there is a causal link between those imports and the dumping, or whether, as the Council contends, it is necessary to examine, first, whether the injury was caused by those imports and, then – if that causal link is established – whether other factors may have contributed to the injury to such an extent that they break the causal link.

29 In order to answer that question, the wording, purpose and context of Article 3(6) and (7) of the basic regulation must be analysed.

30 First, as regards the wording, it can be seen from Article 3(6) of the basic regulation that the institutions must demonstrate that the dumped imports are causing material injury to the Community industry, regard being had to their volume and their price. That is what is known as the ‘attribution analysis’. It can be seen, next, from Article 3(7) of the basic regulation that the institutions must examine all the other known factors which are injuring the Community industry at the same time as the dumped imports and ensure that the injury caused by those other factors is not attributed to the dumped imports. That is what is known as the ‘non‑attribution analysis’.

31 Secondly, as regards the purpose, as both the applicants and the Council have noted in their written pleadings, the purpose of Article 3(6) and (7) of the basic regulation is to ensure that the institutions separate and distinguish the injurious effects of the dumped imports from those of the other factors. If the institutions do not separate and distinguish the impact of the various injury factors, they cannot legitimately conclude that the dumped imports have caused injury to the Community industry.

32 Thirdly, as regards the context, since Article 3(6) and (7) of the basic regulation represent the transposition into EU law, as referred to in recital 5 to that regulation (now recital 3 to Regulation No 1225/2009), of Article 3.5 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) (OJ 1994 L 336, p. 103; ‘the Anti-Dumping Agreement’), set out in Annex 1A to the Agreement establishing the WTO (OJ 1994 L 336, p. 3), reference should be made both to that provision and to its interpretation by the WTO’s Dispute Settlement Body.

33 In that connection, it is settled case-law that, in view of their nature and structure, the WTO agreements are not in principle among the rules in the light of which the Court of the European Union is to review the legality of measures adopted by the EU institutions, pursuant to the first paragraph of Article 230 EC (Case C‑149/96 Portugal v Council [1999] ECR I‑8395, paragraph 47, and Case C‑76/00 P Petrotub and Republica v Council [2003] ECR I‑79, paragraph 53). However, where the Community has intended to implement a particular obligation assumed in the context of the WTO, or where the EU measure refers expressly to precise provisions of the WTO agreements, it is for the Court of the European Union to review the legality of the EU measure in question in the light of the WTO rules (Portugal v Council, paragraph 49; Petrotub and Republica v Council, paragraph 54; and Case C‑351/04 Ikea Wholesale [2007] ECR I‑7723, paragraph 30).

34 As it is, recital 5 to the basic regulation shows that one of the purposes of that regulation is to transpose into EU law, as far as possible, the rules laid down in the 1994 Anti-Dumping Agreement, which include, in particular, those relating to determining whether there has been injury and whether there is a causal link between the dumped imports and the injury (see, to that effect, Petrotub and Republica v Council, paragraph 33 above, paragraph 55).

35 It follows that the provisions of the basic regulation must, so far as is possible, be interpreted in a manner consistent with the corresponding provisions of the Anti‑Dumping Agreement (see, to that effect, Case C‑341/95 Bettati [1998] ECR I‑4355, paragraph 20, and Petrotub and Republica v Council, paragraph 33 above, paragraph 57).

36 In addition, although the interpretations of the Anti-Dumping Agreement by the WTO’s Dispute Settlement Body cannot bind the Court in its assessment as to whether the contested regulation is valid (see, to that effect, Case C‑377/02 Van Parys [2005] ECR I‑1465, paragraph 54), there is nothing to prevent the Court from referring to them, where – as in the present case – a provision of the basic regulation has to be interpreted (see, to that effect, Case T‑45/06 Reliance Industries v Council and Commission [2008] ECR II‑2399, paragraph 107).

37 In that context, it should be noted that, in its report on the case US — Hot-Rolled Steel, adopted on 23 August 2001 (WT/DS184AB/R, paragraph 226), the WTO’s Appellate Body found that, in order to comply with ‘the non-attribution language’ in Article 3.5 of the Anti‑Dumping Agreement, investigating authorities had to make an appropriate assessment of the injury caused to the domestic industry by the other known factors, and they had to separate and distinguish the injurious effects of the dumped imports from the injurious effects of those other factors.

38 In the light of the foregoing, it must be concluded that, under Article 3(6) and (7) of the basic regulation, no obligation is imposed on the institutions regarding the form of the attribution and non‑attribution analyses which they must carry out, or the order in which they must do so. On the contrary, under Article 3(6) and (7), those analyses must be carried out in such a way as to enable the injurious effects of the dumped imports to be separated and distinguished from the injurious effects caused by other factors.

39 Accordingly, it must be found that the dispute between the parties on this point is of a semantic rather than a substantive nature. The manner in which the Council describes, in its written pleadings, the methodology applied to the attribution and non-attribution analyses is of little consequence, so long as the methodology actually applied by the Council and the Commission in the circumstances enabled them to ensure that the injury caused by factors other than the dumped imports had not been attributed to those imports. Thus, in recitals 112 to 114 to the provisional regulation and recitals 85 and 86 to the contested regulation, the Council and the Commission examined, first, the effect of the dumped imports. They went on, in recitals 115 to 136 to the provisional regulation and in recitals 87 to 101 to the contested regulation, to analyse the effects of the other factors. Then, in recitals 137 to 140 to the provisional regulation and recitals 102 to 104 to the contested regulation, they set out a brief summary of the attribution and non‑attribution analyses and based their conclusions as to the causal link on that summary. Although the injury factors other than the dumped imports were only considered at the second stage, the institutions did not draw their final conclusion as to the attribution of injury until that second stage was concluded, so that the injurious effects of the dumped imports were separated and distinguished from the injurious effects caused by other factors.

40 It follows that, in the present case, the causation analysis, referred to in recitals 111 to 140 to the provisional regulation and recitals 83 to 104 to the contested regulation, is not flawed by an error of law in that the institutions carried out the attribution analysis first and then the non‑attribution analysis.

41 In the second place, it must be determined whether, as the applicants claim, the injury factors other than the dumped imports must be examined collectively or whether, as the Council contends, they must be examined individually. As with the previous question, this question must be considered in the light of the wording, purpose and context of Article 3(6) and (7) of the basic regulation.

42 First, with regard to the wording, it should be pointed out that Article 3(6) and (7) of the basic regulation, as set out in paragraph 30 above, does not specify whether the injury factors other than the dumped imports must be analysed collectively or individually.

43 Secondly, as stated in paragraph 31 above, the purpose of Article 3(6) and (7) of the basic regulation is to ensure that the injurious effects of the dumped imports are separated and distinguished from the injurious effects of the other factors, so that the injury caused by those other factors is not attributed to the dumped imports. In order to achieve that objective, the other factors must in certain circumstances be analysed collectively. That is the position, in particular, if, after carrying out an individual analysis, the institutions conclude that each of those other factors has had a negative effect on the situation of the Community industry even though on their own the effects cannot be regarded as significant. As the applicants stated in their written pleadings, if some ten factors other than the dumped imports caused 99% of the injury, but no individual factor has had a significant impact on the Community industry, the institutions would still consider that the dumped imports had caused material injury, since none of the ten other factors on their own would be considered to have caused the injury. Such an analysis cannot be regarded as consistent with the purpose of Article 3(6) and (7) of the basic regulation.

44 Thirdly, an analysis of the context of Article 3(6) and (7) of the basic regulation confirms that the other factors must be analysed collectively in certain circumstances. As has been stated, the purpose of Article 3(6) and (7) of the basic regulation is to transpose into EU law Article 3.5 of the Anti‑Dumping Agreement. In its final report on the case EC – Pipe Fittings, adopted on 18 August 2003 (WT/DS219/AB/R, paragraphs 190 and 192), the WTO’s Appellate Body found that, although Article 3.5 did not require, in each and every case, an examination of the collective effects of the other causal factors, there could be cases where, because of the specific factual circumstances therein, the failure to undertake an examination of the collective impact of the other causal factors would result in the investigating authority improperly attributing the effects of the other causal factors to the dumped imports. In the view of the WTO’s Appellate Body, an investigating authority is not required to examine the collective impact of the other causal factors, provided that, in the specific factual circumstances of the case, it fulfils its obligation not to attribute to the dumped imports the injuries caused by the other causal factors.

45 It follows that it must be found – as the applicants have argued – that the effects of the injury factors other than the dumped imports must be analysed collectively in certain circumstances. That is particularly true where the institutions have concluded that a large number of injury factors other than the dumped imports may have contributed to the injury, but that, individually, their impact could not be regarded as significant.

46 Accordingly, it must be held that the interpretation of Article 3(6) and (7) of the basic regulation argued for by the Council – not in the contested regulation, but exclusively in its written pleadings – is wrong. That does not mean, however, that the contested regulation is vitiated by an error of law which could justify its annulment. In the contested regulation, the Council simply analysed the various injury factors individually and never suggested that a collective analysis of those factors was not required. It cannot be found, therefore, that there is an error of law vitiating the contested regulation unless it is also found that, in the present case, a collective analysis was actually required.

47 It is clear from paragraph 45 above that the applicants’ complaints concerning the individual analysis of each of the other known injury factors must be examined first, before it can be determined whether a collective analysis was required in the circumstances. Accordingly, no finding can be made that, by confining itself to an individual analysis of the injury factors, the Council has erred in law until it has been determined – see paragraphs 49 to 215 below – whether the individual analysis of each of the other known injury factors is flawed by illegality and whether the circumstances of the case required a collective analysis of the other injury factors to be carried out.

48 However, it is already appropriate to reject the first part of the first plea in so far as it alleges an error of law in relation to the institutions’ methodology for analysing causation.

2. The individual analysis of the injury factors other than the dumped imports (second to eighth parts of the first plea)

49 First of all, it is necessary to recall the principles laid down by case‑law in the light of which the applicants’ various complaints concerning the individual analysis of the various injury factors other than the dumped imports should be examined.

50 In accordance with the case-law cited in paragraph 27 above, 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 the dumped imports and must disregard any injury deriving from other factors.

51 In addition, it is settled law that the question whether a Community industry has suffered injury and, if so, whether that injury is attributable to the dumped imports and 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 Courts of the European Union of the assessments made by 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, to that effect, Aluminium Silicon Mill Products v Council, paragraph 27 above, paragraph 71, and Case T‑462/04 HEG and Graphite India v Council [2008] ECR II‑3685, paragraph 120).

a) The second part of the first plea, concerning changes in steel demand and in prices on the Community and world markets

Arguments of the parties

52 The applicants claim that recital 85 to the contested regulation is flawed by a manifest error of assessment and infringes Article 3(6) and (7) of the basic regulation, since the pressure on Community prices cannot be attributed to the dumped imports, but should be attributed to the price trends on the world market and to changes in steel demand.

53 First, ferro-silicon prices follow the same trend in all major world markets and the Community price trend reflects global market dynamics. In the applicants’ submission, since prices on all markets were decreasing, in particular between 2005 and the end of the investigation period, it is manifestly unreasonable to assert that, in the absence of the dumped imports, prices in the Community would have increased to cover the Community industry’s increasing costs, while allowing a reasonable profit.

54 Second, the low level of ferro-silicon prices is determined not by the dumped imports but by the changes in demand. The Council itself recognised, in the contested regulation, that ferro-silicon prices follow fluctuations in demand. Nevertheless, the Council – wrongly – analysed the trend in Community ferro‑silicon prices by comparing these with the trend in world crude steel production, whereas Community ferro-silicon prices are determined by Community steel production. The trend in Community ferro-silicon prices exactly reflected the trend in steel demand, and those prices fell in proportion to the stagnation and decrease in Community demand. Thus, in the applicants’ submission, even if there had been no undercutting by the dumped imports, the Community industry would have sustained losses because of the simultaneous increase in costs and decrease in demand.

55 Third, the applicants point out that, during the investigation period, ferro-silicon was sold at a higher price in the Community than in the other markets. In a global market where prices tend towards equilibrium, there is no basis for arguing that prices on the market with the highest prices were unfairly undercut or depressed.

56 The Council, supported by the interveners, disputes the applicants’ arguments.

Findings of the Court

57 The second part of the first plea relates, in essence, to the institutions’ assessment of the global trend in ferro-silicon prices and in steel sector demand as other known factors which could have caused the injury to the Community industry or contributed to it.

58 In that connection, it should be noted that, in recital 85 to the contested regulation, the Council found that, because of the dumped imports, the Community industry was unable to increase its sales prices to the necessary level to cover its full costs. Additionally, in recitals 87 to 90 to the contested regulation, the Council set out the reasons for which it had decided to reject the contention that the low level of ferro-silicon prices was linked, not to dumped imports, but to the dynamics of the global market, which itself changes according to the fluctuating demand of the steel industry. First of all, the Council stated that, in market economies, the prices were generally set by the levels of supply and demand, but that there could be other factors such as the presence of dumped imports. Next, the Council stated that, while it was certainly true that global demand for ferro‑silicon, in particular from the steel industry, had influenced the price setting at certain times during the period under consideration, there had been periods during which ferro-silicon prices had fallen despite growing demand. Lastly, the Council stated that, even on the Community level, ferro‑silicon prices were falling at certain times, despite growing demand from the steel sector.

59 The applicants dispute that finding on the basis of three arguments: (i) since prices on the global market had decreased, in particular between 2005 and the end of the investigation period, Community prices could not have risen even in the absence of dumped imports; (ii) Community ferro-silicon prices followed the fluctuations in Community steel production and decreased at the same time as the demand from the Community steel industry stagnated or fell; and (iii) prices on the Community market are the highest in the world, which rules out any undercutting or depression of prices.

60 However, none of those three arguments goes to prove that the Council made a manifest error of assessment and infringed Article 3(6) and (7) of the basic regulation.

61 Thus, in the first place, as regards the argument based on price trends in the world market, the applicants refer, in support of that argument, to a table reproduced in the application initiating proceedings, which, in their view, shows that ferro‑silicon prices follow the same trend in all major world markets and that the Community price trends merely reflect global market dynamics. Although that table shows that, overall, Community ferro‑silicon prices follow the same trend as the prices in the United States and Japan, it in no way proves that prices on the global market were falling throughout the whole of the period under consideration, that is to say, from 1 January 2003 to 30 September 2006 or, at the very least, between January 2005 and the end of the investigation period on 30 September 2006. On the contrary, it is apparent from that table that prices rose between 2003 and 2004 and during the investigation period. Those trends are confirmed by the data relating to average prices in the Community, referred to in recital 96 to the provisional regulation and not disputed by the applicants. Accordingly, the applicants cannot maintain that, given the general slump in ferro‑silicon prices, it was unreasonable to assert that, in the absence of the dumped imports, prices in the Community would have increased to cover the Community industry’s increasing costs, while allowing a reasonable profit.

62 In the second place, as regards the argument based on the fluctuations in demand in the steel sector and on the analysis of Community ferro‑silicon prices as compared with global crude steel production, the applicants reject the graph produced by the institutions in the definitive disclosure document, showing the changes in Community ferro-silicon prices against the changes in world crude steel production, and refer, in support of their argument, to a graph reproduced in an annex to the application which shows the changes in Community ferro-silicon prices against the changes in Community steel production. Contrary to the assertions made by the applicants, that graph does not show that Community ferro-silicon prices mirrored the fluctuations in Community steel production and decreased at the same time as the demand from the Community steel industry stagnated or fell.

63 Thus, it should be noted first that, as the Council observes, that graph shows that the Community prices have not always mirrored the fluctuations in Community steel production. For example, the graph shows that, in 2004, when Community steel production increased, prices continued to fall. Similarly, the graph shows that, in 2006, steel production decreased while prices increased. Those examples confirm that the graph produced by the applicants is not sufficient to substantiate their claim that the fall in demand caused the reduction in prices.

64 Second, it should be noted that the graph does not show a fall in demand throughout the period under consideration. It thus shows an increase in steel production between the third quarter of 2003 and the second quarter of 2004, between the fourth quarter of 2004 and the second quarter of 2005 and during the first three quarters of the investigation period, that is to say, from 1 October 2005 to 30 September 2006. The graph also shows that Community ferro-silicon prices increased between the third quarter of 2003 and the second quarter of 2004 and throughout the investigation period. In the light of those positive trends, it is not sufficient simply to assert that Community prices fell at the same time as the Community steel industry’s demand stagnated or decreased in order to show that the Council made a manifest error of assessment in maintaining that the dumped imports were the reason why the Community industry was unable to increase its sales prices to the level necessary to cover its costs. The applicants ought to have shown – which they failed to do – that the increase in steel production during the periods referred to had been too small to generate a price increase enabling Community ferro‑silicon producers to pass on the increase in production costs to consumers.

65 In the third place, as regards the argument that the level of prices in the Community is such that it cannot be claimed that those prices were unfairly undercut or depressed, it should be borne in mind that the undercutting or depression of prices are legal concepts referred to in Article 3(3) of the basic regulation (now Article 3(3) of Regulation No 1225/2009). In general terms, when determining whether there is undercutting for the purposes of that provision, the institutions compare Community prices with adjusted import prices, so as to obtain an undercutting margin expressed as a percentage. Similarly, when it is found that Community prices have been depressed or have not increased sufficiently, the institutions compare – again in general terms – import prices with a target Community price, that is to say, the price which would have been have been achieved in the absence of the dumped imports, in order to obtain an injury elimination level, also expressed as a percentage. In the present case, it emerges from recitals 87 to 89 and 112 to the provisional regulation that the institutions determined the undercutting of prices in accordance with Article 3(3) of the basic regulation. Thus, in recital 89 to the provisional regulation, the Commission stated that it had calculated undercutting margins between 4% and 11%, depending on the exporting producer concerned, with the exception of the three exporting producers for which no undercutting was found. No argument is put forward by the applicants that could call in question the institutions’ calculation of the undercutting margins. The simple statement that Community prices are the highest in the world does not call that calculation into question.

66 In the light of the foregoing, it must be concluded that none of the applicants’ arguments goes to prove that that the Council made a manifest error of assessment in stating that the dumped imports – and not the dynamics of the global market and fluctuations in steel sector demand – were the reason why the Community industry had not been able to increase its sales prices to the level necessary to cover its full costs.

67 Consequently, the second part of the first plea must be rejected as unfounded.

b) The third part of the first plea, concerning the effects of the Community industry’s ‘self-inflicted’ injury

The first complaint, concerning the production switches by certain Community producers

– Arguments of the parties

68 The applicants submit that the Council did not take due account of the impact on the Community industry of the voluntary production switches made by Huta Laziska S.A., OFZ a.s. and Vargön Alloys AB in 2004, a year which the contested regulation characterises as ‘exceptionally prosperous’.

69 First, according to the applicants, the institutions made a manifest error of fact which had an important effect on the analysis of causation, since, although it is apparent from recital 135 to the provisional regulation that in 2004 two Community ferro-silicon producers had switched their production to manganese alloys, it emerges from recital 93 to that same regulation that it was not until 2005 that the reduction in ferro-silicon production was taken into account. The decision to scale back ferro-silicon production at a time when market conditions were favourable led to increased costs per unit of ferro-silicon produced, decreased production output and sales, and a greater scarcity on the market. In addition, the failure to take into account the production switches for 2004 resulted in a misleading picture of the trend in the production capacity, production and profitability of the Community industry.

70 Second, according to the applicants, the institutions made a manifest error of assessment by stating that the production switches were a reaction to the dumped imports. On the one hand, 2004 was an exceptional year during which the Community industry increased its profitability to the highest level of the period under consideration and attained a return on investment of nearly 20% and, on the other, Huta Laziska chose to switch production to silico-manganese, a lower energy consuming product with higher profitability. Consequently, in the applicants’ submission, the injury suffered by the Community industry in 2005 and during the investigation period is explained by those voluntary production switches which led to an increase in production costs which itself led to further production cut-backs.

71 The Council, supported by the interveners, disputes the applicants’ arguments.

– Findings of the Court

72 The present complaint relates, essentially, to the manner in which the institutions analysed the impact on the Community industry of a switch made in 2004 by certain Community producers, converting furnaces producing ferro-silicon to the production of silico‑manganese.

73 In that connection, it should be noted that the Commission analysed the impact of that switch in recitals 135 and 136 to the provisional regulation. It stated there that, despite the costs involved in switching production, part of the production was switched in 2004 because at the time there was a lack of manganese alloys on the EC market and yet a sufficient supply of ferro-silicon. The Commission concluded from this that the decision by some Community producers to cut back production had not been taken on a voluntary basis, but had been caused by the dumped imports which had prevented the Community industry from making profitable ferro-silicon sales. In addition, in recital 93 to the provisional regulation, the Commission adjusted, with effect from 2005, the data relating to production capacity – referred to in the table on production capacity and capacity utilisation – in order to take account of the switch in production in relation to the furnaces.

74 The applicants dispute both recital 93 and recitals 135 and 136 to the provisional regulation.

75 In the first place, as regards the applicants’ argument alleging an error of fact in relation to recital 93 to the provisional regulation, the Council stated, in answer to a written question addressed to it by way of a measure of organisation of procedure, that the production had been switched at the beginning of December 2004. At the hearing, the Council also acknowledged that the capacity which had been switched could not have been used for the production of ferro-silicon in December 2004. Accordingly, it must be found that the figures relating to production capacity should have been adjusted, not from 2005, but from 2004. It follows that recital 93 to the provisional regulation is flawed by substantive inaccuracy.

76 Nevertheless, the Court does not concur with the applicants’ view as to the inferences to be drawn from that inaccuracy. First, it should be pointed out – as the Council observed at the hearing – that, in view of the fact that production capacity did not decrease until December 2004, the overall adjustment of that capacity for the whole of 2004 would have represented only a very small volume equivalent to one-twelfth of the adjustment for 2005. Secondly, even assuming that production capacity had also been adjusted for 2004, the economic situation of the Community ferro-silicon market for 2004 would have been as follows: an increase in demand; an increase in the volume of dumped imports; a decrease in production; a small decrease in production capacity; a fall in the sales and market share of the Community industry; and an increase in the Community industry’s prices, its profit margin and its return on investments. In other words, with the exception of production capacity, production, sales and market share, all the economic indicators would have improved. Admittedly, in certain circumstances, it is plausible that the decision by certain Community producers to switch their production may have been the result of a commercial choice designed to achieve a higher level of profitability on the silico-manganese market, and not the result of the presence of the dumped imports on the ferro‑silicon market, undermining the Community industry’s profitability. However, it is equally plausible that the decision taken by certain Community producers to switch production may have taken into consideration not only the prospect of increased profitability on the silico‑manganese market, but also the presence of low-cost dumped imports which had already increased greatly in volume in 2004 and which made the potential profitability of the ferro‑silicon market less attractive than that of the silico‑manganese market.

77 Consequently, the error of fact vitiating recital 93 to the provisional regulation cannot have distorted the analysis of causation.

78 In the second place, as regards the applicants’ argument that the institutions made a manifest error of assessment in stating, in recital 136 to the provisional regulation, that the production switches were a reaction to the dumped imports, it has been established in paragraph 76 above that, while it is plausible that the switches may have been the result of a commercial decision designed to achieve a higher level of profitability on the silico-manganese market – and not the result of the presence of the dumped imports on the ferro-silicon market, undermining the Community industry’s profitability – it is equally plausible that the decisions to switch production may have been based not only on the prospect of increased profitability on the silico‑manganese market, but also on the presence of low-cost dumped imports on the ferro-silicon market.

79 Consequently, it must be concluded that none of the arguments raised by the applicants goes to prove that the institutions made a manifest error of assessment.

80 In view of the foregoing, the present complaint must be rejected as unfounded.

The second complaint, concerning the disruption of production by certain Community producers

– Arguments of the parties

81 The applicants submit that the Council did not take due account of the effects, on the Community industry, of disruptions to production consciously brought about by certain Community producers, and mistakenly attributed those effects to the imports at issue.

82 First, the Council made a manifest error of assessment in refusing, in recital 101 to the contested regulation, to take account of the effects of the disruption of production brought about by Huta Laziska, on the ground that the determination of causation was to be made at the level of the Community industry as a whole, even though the factor in question had an impact on the performance of the Community industry as a whole. In that regard, the applicants point out that: (i) Huta Laziska stopped production on a number of occasions during the period under consideration, owing to problems with its energy supplier; (ii) Huta Laziska was forced to switch production to less energy intensive and more profitable products such as silico-manganese; and (iii) in the context of Council Regulation (EC) No 1420/2007 of 4 December 2007 imposing a definitive anti‑dumping duty on imports of silico‑manganese originating in the People’s Republic of China and Kazakhstan and terminating the proceeding on imports of silico-manganese originating in Ukraine (OJ 2007 L 317, p. 5), the institutions analysed developments in the situation at Huta Laziska separately.

83 Secondly, the institutions made a manifest error of assessment in failing to take account of the effects of the disruptions to production brought about, on the one hand, by FerroAtlántica SL, during periods of high energy consumption, when that producer maximised its profits by selling energy, and, on the other, by Vargön Alloys, which ended its ferro‑silicon production during the investigation period. As regards FerroAtlántica, the applicants raise the point in their reply that, in its defence, the Council asserted, for the first time, that stopping ferro‑silicon production during hours of peak electricity consumption had always been part of the company’s business model. What is more, according to the applicants, that assertion is contradicted in recital 81 to the contested regulation, in which the Council stated that reductions in production owing to electricity cuts did not occur on a regular basis.

84 The Council, supported by the interveners, disputes the applicants’ arguments.

– Findings of the Court

85 The present complaint relates to the manner in which the institutions analysed the impact on the Community industry of the disruptions to production at three Community producers, Huta Laziska, FerroAtlántica and Vargön Alloys.

86 In essence, the applicants complain that, in recital 101 to the contested regulation, the Council did not correctly analyse the effects of the disruptions to production at Huta Laziska and that it failed to take account of the disruptions at FerroAtlántica and Vargön Alloys.

87 In the first place, as regards the alleged error of assessment in the Council’s examination of Huta Laziska’s situation, the Council stated in recital 101 to the contested regulation that the cause of the injury had to be analysed at the level of the Community industry as a whole and that, even if the data pertaining to this producer could be excluded from the injury assessment, the trends observed for the remainder of the Community industry would remain highly negative and continue to show material injury.

88 In that connection, it should first of all be noted that – as the applicants observed –the analysis of causation does not necessarily have to be carried out at the level of the Community industry as a whole, with no possibility of taking into consideration injury caused to a single Community producer by a factor other than the dumped imports. It has been noted, in paragraph 30 above, that in the non‑attribution analysis envisaged in Article 3(7) of the basic regulation, the institutions must examine, at the same time as the dumped imports, all the other known factors which are causing injury to the Community industry and then ensure that the injury caused by those other factors is not attributed to the dumped imports. Article 3(7) of the basic regulation does not state that that examination must take account only of injury caused by the other factors to the Community industry as a whole. In the light of the purpose of that provision – which, as has been noted in paragraph 31 above, is to ensure that the institutions separate and distinguish the injurious effects of the dumped imports from those of the other factors – it is possible that, in certain circumstances, injury caused individually to a Community producer by a factor other than the dumped imports must be taken into consideration, where it has contributed to the injury observed in relation to the Community industry as a whole.

89 Next, it is true that, in recital 101 to the contested regulation, the Council stated somewhat bluntly that the cause of the injury had to be analysed at the level of the Community industry as a whole, a statement which could be taken to mean that an injury factor affecting a Community producer individually may never be taken into consideration. Nevertheless, contrary to the assertions made by the applicants, the injury which the disruption to production caused to Huta Laziska was properly taken into consideration in recital 101. Thus, as noted in paragraph 87 above, the Council stated in that recital that, even if the data pertaining to Huta Laziska were excluded from the injury assessment, the trends observed for the Community industry would continue to show material injury. However, the applicants are not seeking to prove that the latter consideration is flawed by a manifest error of assessment. They simply state that the difficulties experienced by Huta Laziska with its electricity supplier caused the disruptions to production, a point which the Council agreed to take into consideration in recital 101 to the contested regulation.

90 Lastly, with regard to Regulation No 1420/2007, as has been noted in paragraphs 50 and 51 above, it is for the institutions, in exercising their discretion, to examine whether the Community industry has suffered injury, and whether that injury is attributable to the dumped imports or other factors have contributed to the injury. That discretion must be exercised on a case‑by-case basis, by reference to all the relevant facts (see, to that effect, Case C‑156/87 Gestetner Holdings v Council and Commission [1990] ECR I‑781, paragraph 43). In any event, contrary to the assertions made by the applicants, the examination of Huta Laziska’s situation in Regulation No 1420/2007 does not differ appreciably from its examination in the contested regulation. As in the contested regulation, there is no separate section on Huta Laziska in Regulation No 1420/2007. Furthermore, as in the contested regulation, Huta Laziska’s situation is examined in Regulation No 1420/2007 in the section on the contribution to the injury of the changes in production costs. Only one difference between Regulation No 1420/2007 and the contested regulation can be identified. Whereas, in the contested regulation, the Council acknowledged – hypothetically and solely in order to exclude any impact on the assessment of the injury to the Community industry as a whole – that the injury to Huta Laziska may have been the result of the dispute with its electricity supplier, the Council accepted in Regulation No 1420/2007 that that dispute and the increase in electricity costs might have had some impact on Huta Laziska’s performance, but that, overall, changes in production costs had not contributed to the injury suffered by the Community industry.

91 It follows that none of the arguments raised by the applicants goes to prove that recital 101 to the contested regulation is flawed by a manifest error of assessment.

92 In the second place, as regards the alleged manifest error of assessment in examining the disruptions to production at FerroAtlántica and Vargön Alloys, it should be pointed out, first, that, in relation to FerroAtlántica, the applicants stated at the hearing that, in their view, the disruptions to production brought about by that company had given rise to a ‘self‑inflicted injury’ in so far as the increase in the price of electricity had led FerroAtlántica to prioritise energy sales over ferro‑silicon sales. However, it should be pointed out that the only document on which the applicants base their allegation of a manifest error of assessment on the part of the institutions is a letter from FerroAtlántica to Euroalliages dated 26 February 2007. In that letter, FerroAtlántica stated that, owing to its tariff system, ferro‑silicon production was stopped during peak hours of electricity consumption and the electricity produced by it during those hours was sold. That letter in no way proves that FerroAtlántica stops production whenever electricity prices increase. Consequently, the applicants have failed to adduce any evidence to prove that FerroAtlántica’s scaling down of production, during peak hours of electricity consumption, had contributed to the injury suffered by the Community industry as a whole and that the Council should have taken it into consideration.

93 Secondly, as regards Vargön Alloys, the applicants simply assert that that company stopped production during the investigation period. Although, in a document appended to the application, they assert that that stoppage was because of the level of electricity prices, they have failed to adduce any evidence in support of that assertion. They have therefore in no way proved that Vargön Alloys itself contributed to its own injury or that its reasons for stopping production did not lie with the dumped imports. Consequently, it cannot be maintained that the Council made a manifest error of assessment in failing to attribute specific developments to Vargön Alloys’ situation.

94 In the light of the foregoing, the present complaint, put forward in the third part of the first plea, must be rejected as unfounded.

The third complaint, concerning the use of the theoretical nominal production capacity

– Arguments of the parties

95 The applicants submit that the Council made manifest errors of assessment and infringed Article 3(7) of the basic regulation and their rights of defence in refusing to use actual production capacity rather than theoretical nominal production capacity.

96 In the first place, the Council made a manifest error of assessment when, first, it disregarded elements, such as the production switches and interruptions in electricity supply, which had a material effect on the important injury factors, namely, production capacity and production capacity utilisation.

97 Secondly, the applicants point out that it is incorrect to assert – as the Council does – that, even if actual production capacity had been used, the trends observed concerning production capacity and capacity utilisation and the conclusions as to the existence of injury would have remained unchanged. Even if the trends observed as regards production capacity and capacity utilisation remained unchanged, the fact that, for example, capacity utilisation increases from 50% to 95% is important, since such an increase means that the Community industry is unable to meet demand.

98 Thirdly, in the applicants’ submission, the Council’s assertion that theoretical nominal utilisation capacity can be used, because production stoppages or reductions did not occur on a regular basis, constitutes a serious error of fact and a manifest error of assessment. The applicants maintain that production stoppages or reductions occurred on a regular basis and should have been taken into account. That is true of the production stoppages practised by Ferroatlántica during hours of peak electricity consumption, which are inherent in its business model and thus occurred on a regular basis. Similarly, ferro-silicon furnaces undergo annual maintenance, during which they cannot be used. The applicants also submit that it is a manifest error of assessment to calculate production capacity considering only events that occur on a regular basis. Thus, when its electricity supplies were reduced, Huta Laziska had severely reduced production capacity on a number of occasions, which prevented it from producing ferro-silicon, regardless of market circumstances.

99 In the second place, in the applicants’ submission, basing the analysis of causation on theoretical nominal utilisation capacity, rather than on actual utilisation capacity, necessarily infringes the non-attribution principle as laid down in Article 3(7) of the basic regulation, because it leads to the disguising of the true cause of changes in production figures.

100 In the third place, the applicants submit that the contested regulation infringes their rights of defence, since the assertion that trends would remain unchanged even if actual utilisation capacity were taken into account is unsubstantiated.

101 The Council, supported by the interveners, disputes the applicants’ arguments.

– Findings of the Court

102 In the present complaint, the applicants submit in essence that, by using the theoretical nominal utilisation capacity instead of actual production capacity: (i) the institutions made manifest errors of assessment and an error of fact; (ii) they infringed Article 3(7) of the basic regulation; and (iii) they infringed the applicants’ rights of defence.

103 In the first place, as regards the manifest errors of assessment and the error of fact which the institutions are alleged to have made, it should be noted that, in recitals 92 and 93 to the provisional regulation, the Commission stated that it had established the production capacity on the basis of the theoretical nominal capacity of the production units of the Community industry, but that it had adjusted the production capacity in order to take account of the fact that two producers in the Community had switched part of their production from ferro‑silicon to other ferroalloys during the period under consideration. In addition, in paragraph 81 to the contested regulation, the Council responded to the criticisms levelled against the methodology applied in recital 93 to the provisional regulation and, more specifically, to the suggestions made by certain interested parties, in the course of the administrative procedure, that a figure taking into account closures for maintenance and electricity cuts should be applied. The Council referred in that regard to the investigation, which – in its view – had shown that the closures of the machinery for maintenance or electricity cuts were of a temporary nature and had not occurred on a regular basis during the period under consideration. The Council also stated that, even if adjustments were made to production capacity, the trends concerning the production capacity and capacity utilisation and the conclusions reached on the existence of material injury would remain unchanged.

104 The applicants submit that those considerations are flawed by a manifest error of assessment, in particular since they do not take account of disruptions and production switches. It should be noted that the applicants’ contention lacks precision, since they do not specify which disruptions and switches they are referring to. Assuming, however, that they are referring to the events considered when the two previous complaints were examined – the production switch and disruption to production at Huta Laziska and the disruptions to production at FerroAtlántica and Vargön Alloys – it should be noted, first of all, that the applicants do not dispute that Huta Laziska’s decision in 2004 to switch production from ferro-silicon to silico-manganese was taken into consideration in the table on production capacity and capacity utilisation – referred to in recital 93 to the provisional regulation – by means of an adjustment of production capacity for 2005 and the period under investigation.

105 Next, as regards the disruptions to production at Huta Laziska in 2005 and 2006 – because of a dispute with its electricity supplier – and at Vargön Alloys in 2006 – according to the applicants, because of the increase in electricity costs – the institutions’ action is not only sensible, but also free from any manifest error of assessment. It is clear from recital 81 to the contested regulation that the institutions decided not to adjust figures relating to production capacity, because the disruptions in question were of a temporary nature. The institutions’ approach is correct, since, first, contrary to the assertions made by the applicants, it is clear from the case-file that those disruptions were indeed of a temporary nature. Secondly, if the figures relating to production capacity had to reflect the temporary closures of the machinery such as those referred to here, they would not be put to their proper use, which is to give an indication of the Community industry’s production capacity, not to indicate the fluctuations in production reflected by the production figures. Nevertheless, in order for the institutions’ approach not to be flawed by a manifest error of assessment, such temporary closures of machinery must be taken into consideration in the course of the non‑attribution analysis provided for in Article 3(7) of the basic regulation.

106 In the present case, the institutions stated, in recital 81 to the contested regulation, that, even if adjustments had been made to production capacity, the conclusions as to the existence of material injury to the Community industry would remain unchanged. Although the applicants claim that that statement is incorrect, they do not adduce any evidence which proves that that is the case. They simply assert that, even if the trends observed as regards production capacity and capacity utilisation remained unchanged, the fact that, for example, capacity utilisation increases from 50% to 95% is important, since such an increase means that the Community industry is unable to meet demand. In addition to the fact that the situation referred to by the applicants is purely theoretical, the fact that the Community industry is unable to meet demand, in circumstances such as the present, where a number of economic indicators reflect injury suffered by the Community industry, does not give any indication as to the origin of that injury, and is therefore not in itself capable of proving that the injury was not caused by the dumped imports.

107 Lastly, as regards the disruptions to production at FerroAtlántica, it has been established, in paragraph 92 above, that the applicants had failed to adduce any evidence to prove that those reductions in production, which had occurred on a regular basis, had contributed to the injury suffered by the Community industry as a whole. Although, as the applicants have observed, an adjustment of the production capacity in order to take account of those disruptions could perhaps have changed the Community industry’s capacity utilisation rate, showing that the latter was less able to meet demand, it has been noted in paragraph 106 above that, where a number of economic indicators reflect injury to the Community industry, the fact that the Community industry is unable to meet demand is not in itself capable of proving that the injury was not caused by the dumped imports.

108 In the light of the foregoing, it must be concluded that none of the arguments raised by the applicants goes to prove the existence of manifest errors of assessment concerning the use of the theoretical nominal capacity.

109 In the second place, as regards the alleged infringement of Article 3(7) of the basic regulation, it cannot – contrary to the applicants’ submissions – be claimed that basing the analysis of causation on theoretical nominal utilisation capacity, rather than on actual utilisation capacity, is necessarily in breach of the non‑attribution principle. It should be noted that, although switching the means of production to another market, as occurred here, must undoubtedly lead to the adjustment of the figures relating to production capacity, it has been pointed out, in paragraph 105 above, that those figures did not have to reflect all the temporary stoppages of the production machinery, since those stoppages appeared in the production figures. On the other hand, in such circumstances, the institutions must ensure that the obligations referred to in Article 3(7) of the basic regulation are complied with and properly carry out a non-attribution analysis which must separate and distinguish the injury caused, where relevant, by those temporary stoppages, from the injury caused by the dumped imports.

110 In the third place, as regards the infringement of the applicants’ rights of defence, the case-law of the Court of Justice shows that the requirements stemming from the right to a fair hearing must be observed not only in the course of proceedings which may result in the imposition of penalties, but also in investigative proceedings prior to the adoption of anti-dumping regulations which may directly and individually affect the undertakings concerned and entail adverse consequences for them (Case C‑49/88 Al-Jubail Fertilizer v Council [1991] ECR I‑3187, paragraph 15). In particular, the undertakings concerned should have been placed in a position during the administrative procedure in which they could effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegation concerning the existence of dumping and the resultant injury (Al-Jubail Fertilizer v Council, paragraph 17).

111 In that connection, it should be pointed out that – as the Council observes – paragraph 80 of the definitive disclosure document was, in essence, identical to recital 81 to the contested regulation, which states that the trends would have remained unchanged, even if adjustments had been made to production capacity. However, the applicants did not, in their comments on the definitive disclosure document, ask for the figures underlying that assertion to be disclosed to them. Consequently, they cannot claim that their rights of defence have been infringed.

112 In the light of the foregoing, the present complaint must be rejected as unfounded.

The fourth complaint, concerning the investments made by the Community industry in 2005 and during the investigation period

– Arguments of the parties

113 The applicants submit that the Council acted in breach of the non-attribution principle as laid down in Article 3(7) of the basic regulation, in so far as it failed to take account, in the contested regulation, of the effects of substantial investments made by the Community industry in 2005 and during the investigation period, amounting, over the investigation period, to more than a third of the Community industry’s total losses. In that regard, the applicants state that, in recital 99 to the provisional regulation, the institutions indicated that the Community industry had invested almost EUR 10 million in 2005, and EUR 6 million during the investigation period, for the upgrading of production equipment. In the applicants’ submission, in view, in particular, of the magnitude of those investments as compared with the industry’s profitability, the effects of those investments should have been considered even if they were depreciated over longer periods of time and regardless of whether complying with mandatory environmental legislation was an injury which the Community industry inflicted on itself.

114 First, the Council, supported by the interveners, replies that the applicants exaggerate the size of the investments and their effect on profitability. The total investments made during the investigation period cannot be compared with the total losses during that period. In the Council’s view, since the investments in question were investments in production machinery and were depreciated over many years, only a small fraction of the investments made in 2005 and during the investigation period affected the profit figure. Secondly, since the investments were made in order to comply with mandatory environmental legislation, they cannot be considered to be ‘self-inflicted injury’. Thirdly, account was taken, in recitals 99, 100 and 109 to the provisional regulation and in recital 82 to the contested regulation, of the effect of those investments on the injury indicators. Fourthly, the applicants have not put forward any evidence demonstrating a manifest error of assessment on the part of the institutions in concluding that the investments in question did not constitute ‘self-inflicted’ injury.

– Findings of the Court

115 The applicants submit, in essence, that the institutions infringed Article 3(7) of the basic regulation in failing to take account of the effects of substantial investments made by the Community industry in 2005 and during the investigation period, amounting, over the investigation period, to more than a third of the Community industry’s total losses.

116 In that connection – as the applicants observed – it is clear from recital 99 to the provisional regulation that considerable investments were made in 2005 and during the investigation period. Nevertheless, neither the Commission in the provisional regulation, nor the Council in the contested regulation, undertook a non-attribution analysis in relation to those investments. Thus, contrary to the Council’s contention, those regulations do not contain any argument as to whether or not the investments in question constitute ‘self-inflicted injury’. As it is, given the amounts which they represent – almost EUR 10 million in 2005 and EUR 6 million during the investigation period – those investments may have contributed to the injury suffered by the Community industry. Consequently, it must be found that the institutions infringed Article 3(7) of the basic regulation by failing to separate and distinguish the effects of those investments from the effects of the dumped imports.

117 That conclusion cannot be called in question by the Council’s arguments. First, contrary to the assertions made by the Council, the fact that the investments were made in order to comply with mandatory environmental legislation did not mean that it was permissible for the institutions to disregard their obligation to carry out a non-attribution analysis. It matters little whether or not the injury is categorised as ‘self‑inflicted’, since the investments could have affected the Community industry and Article 3(7) of the basic regulation prohibited the institutions from attributing an injury to the dumped imports which should not have been attributed to them.

118 Secondly, it is true that – as the Council notes – the total investments made during the investigation period cannot be compared with the losses recorded during that period. However, the fact remains that the institutions failed to carry out a proper non-attribution analysis with regard to the investments.

119 Although the Council infringed the non-attribution rule in Article 3(7) of the basic regulation, such an infringement gives grounds for annulling the contested regulation only if it calls in question the lawfulness of the regulation by invalidating the institutions’ entire analysis of causation (see, to that effect, Case T‑35/01 Shanghai Teraoka Electronic v Council [2004] ECR II‑3663, paragraph 167). The applicants have not put forward any argument to that effect.

120 The Court considers that that infringement does not affect the lawfulness of the contested regulation. As the Council points out, the investments in question were investments in production machinery which were depreciated over many years and only part of which affected the Community industry’s profitability in 2005 and during the investigation period. In that connection, in answer to the written question put to it by the Court by way of a measure of organisation of procedure, the Council stated, on the basis of precise figures and explanations, that the investments made in 2005 accounted for 4.7%, at most, of the Community industry’s loss of profitability in 2005. Consequently, the investments cannot be regarded as having made a considerable contribution to the injury suffered by the Community industry in 2005 and during the investigation period.

121 It follows that the infringement found cannot call into question the lawfulness of the contested regulation and that the present complaint must be rejected, as must the third part of the first plea in its entirety.

c) The fourth part of the first plea, concerning the impact of the increase in the cost of raw materials

Arguments of the parties

122 The applicants submit that the institutions failed to take due account of the effects of the increase in the cost of raw materials on the injury suffered by the Community industry, thereby committing manifest errors of assessment.

123 In the first place, the Council made a manifest error of assessment by asserting, in recital 99 to the contested regulation, that production cost increases observed in the alloy sector had occurred on a worldwide scale, thereby affecting the sector equally worldwide. In the applicants’ view, while production costs may increase globally, such increases do not have the same effect all over the world.

124 First, the Council failed to take account of the fact that Community producers had a higher production cost base than the rest of the world’s producers. In the applicants’ submission, even if all producers are faced with a similar production cost increase, the producers starting from a higher cost level will be injured more quickly and to a greater degree than the other producers. Thus, in the applicants’ view, contrary to the Council’s assertion in the contested regulation, a third country producer will not necessarily be compelled to raise its prices to the same extent as a Community producer facing the same cost increase, since the third country producer starts from a position of higher profitability at a given sales price.

125 As it is, first of all, the institutions had information showing that the Community producers had a higher ferro-silicon production cost structure than producers