European Commission v Xinyi PV Products (Anhui) Holdings Ltd.
Date: 2018-02-28
64


At the outset, it should be noted that, in accordance with Article 2(7)(a) of the basic regulation, in the case of imports from non-market economy countries, in derogation from the rules set out in Article 2(1) to (6) of that regulation, normal value must, as a rule, be determined on the basis of the price or constructed value in a market economy third country, that is to say, according to the analogue country method. The aim of that provision is thus to prevent account being taken of prices and costs in non-market-economy countries which are not the normal result of market forces (see, inter alia, judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 66).
66


As is apparent from the various regulations from which Article 2(7)(b) of the basic regulation stems, that wording is intended to enable producers subject to market economy conditions having emerged, inter alia, in China to obtain treatment corresponding to their individual situation, rather than to the overall situation of the country in which they are established (judgment of 4 February 2016, C & J Clark International andPuma, C‑659/13 and C‑34/14, EU:C:2016:74, paragraph 108).
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In application of the powers conferred on it by the basic regulation, it is for the Commission to assess whether the evidence supplied by the producer concerned is sufficient to show that the criteria laid down in Article 2(7)(c) of the basic regulation are fulfilled in order to grant it MET, referred to in Article 2(7)(b) of that regulation, and it is for the EU Courts to examine whether that assessment is vitiated by a manifest error (see, to that effect, inter alia, judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 70).
75


In that regard, it must be observed that the wording set out in the fourth and fifth recitals of Regulation No 905/98, which was subsequently reproduced in, inter alia, Article 2(7)(b) and (c) of the basic regulation, was inserted owing to the fact that the process of reform in China had fundamentally altered its economy and had led to the emergence of firms for which market economy conditions prevailed, with the result that China had moved away from the economic circumstances which inspired use of the analogue country method as a matter of course (judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 68).
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However, in so far as, despite those reforms, the People’s Republic of China is still not a market economy country to whose exports the rules set out in Article 2(1) to (6) of the basic regulation apply automatically, it is, in accordance with Article 2(7)(c) of that regulation, for each producer wishing to benefit from those rules to produce sufficient evidence, as laid down by that provision, that it operates under market economy conditions justifying the granting of MET (judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 69).
83


Finally, that finding is supported by the purpose of Article 2(7)(c) of the basic regulation, which is to ensure that a producer operates under market economy conditions and, in particular, that the costs to which it is subject and the prices which it charges are the result of market forces (judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 82).
90


The Commission is in fact entitled to lodge an appeal relying, before the Court of Justice, on pleas arising from the judgment under appeal itself which seek to criticise, in law, its merits (see, to that effect, inter alia, judgment of 10 April 2014, Commission and Others v Siemens Österreich and Others, C‑231/11 P to C‑233/11 P, EU:C:2014:256, paragraph 102). Furthermore, it follows from paragraphs 52 and 53 of the judgment under appeal that the argument in question was raised by the Commission before the General Court, with the result that the General Court was required to respond.
105


In that regard, as regards the Member States of the European Union, it should be noted that such tax incentives are, in principle, incompatible with the internal market and thus prohibited if they may be classified as ‘State aid’, within the meaning of Article 107(1) TFEU, which requires that the four conditions laid down in that provision are fulfilled (see, to that effect, judgment of 21 December 2016, Commission v World Duty Free Group and Others, C‑20/15 P and C‑21/15 P, EU:C:2016:981, paragraph 53).