By their appeal, Transnational Company ‘Kazchrome’ AO and ENRC Marketing AG (‘the appellants’) seek to have set aside the judgment of the General Court of the European Union of 25 October 2011 in Case T‑192/08 Transnational Company ‘Kazchrome’ and ENRC Marketing v Council [2011] ECR II‑7449 (‘the judgment under appeal’), in which the General Court dismissed their action 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) (‘the regulation at issue’), in so far as it applies to the appellants.
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) was replaced and codified 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). However, having regard to the date on which the regulation at issue was adopted, the dispute must be examined on the basis of Regulation No 384/96 (‘the basic regulation’).
Article 1(1) of the basic regulation provided as follows:
Paragraphs 1, 2 and 5 to 7 of Article 3 of the basic regulation, entitled ‘Determination of injury’, provided as follows:
The background to the dispute is set out as follows in paragraphs 1, 2, 7 and 10 of the judgment under appeal:
The appellants put forward four pleas in law in support of their action, all of which were rejected.
By their appeal, the appellants claim that the Court should:
The Council contends that the Court should:
Euroalliages contends that the Court should:
The Commission contends that the Court of Justice should:
The appellants rely on three grounds in support of their appeal.
The first ground of appeal, alleging an error of law in the application of Article 3(7) of the basic regulation, is divided into two parts. By the first part of this ground of appeal, the appellants claim that the General Court wrongly decided not to annul the regulation at issue even though it had found that the institutions of the European Union had breached that provision of the basic regulation. By the second part of their first ground of appeal, the appellants claim that the General Court erred in law by imposing on them the burden of proving that a correct non-attribution analysis of other known factors would have led those institutions to a different conclusion as regards the causal link.
In the opinion of the appellants, the General Court erred in law in deciding that the established breaches of Article 3(7) of the basic regulation were not sufficient to justify annulment of the regulation at issue. Relying on the judgment in Case C‑358/89 Extramet Industrie v Council [1992] ECR I‑3813, the appellants claim that, where the error in law lies in a breach of Article 3(7) of the basic regulation by reason of the fact that the institutions of the European Union did not carry out a non-attribution analysis of the other two known factors, the regulation at issue must automatically be annulled.
The appellants maintain that, by not annulling the regulation at issue, even though it had found that those institutions had breached Article 3(7) of the basic regulation, the General Court misapplied the test laid down in its judgment in Case T‑35/01 Shanghai Teraoka Electronic v Council [2004] ECR II‑3663, according to which the error or deficiency found in the analysis in question must have an impact on the determination of the existence of injury, and therefore on the content of the regulation adopted as a result of that analysis, in order to be able to lead to annulment of that regulation.
In the opinion of the appellants, that test is not applicable in the present case. Unlike the facts in Shanghai Teraoka Electronic v Council, there was in the present case no non-attribution analysis of the known factors, apart from the dumped imports.
In addition, the applicants state that the judgment in Case C‑141/08 P Foshan Shunde Yongjian Housewares & Hardware v Council [2009] ECR I‑9147 developed the test laid down in Shanghai Teraoka Electronic v Council in that an irregularity could lead to annulment of the regulation at issue if, had it not been for that irregularity, the administrative procedure might have had a different outcome. In the present case, the appellants claim that the General Court found in paragraphs 183 and 184 of the judgment under appeal that it was possible to follow the appellants’ interpretation of the data. In the opinion of the appellants, the General Court was therefore obliged to annul the regulation at issue in the light of the judgment in Foshan Shunde Yongjian Housewares & Hardware v Council.
The European Union institutions and Euroalliages dispute the merits of those arguments and contend that they should be rejected. In particular, the European Union institutions consider that the General Court erred in law by holding that the Council had breached Article 3(7) of the basic regulation in not carrying out a non-attribution analysis of the other known factors. The Commission asks the Court to uphold the judgment under appeal, while making a substitution of grounds, and to hold that those institutions did not breach that provision.
In its assessment of the effects of the injury which the investments made by the Community industry caused that same industry, the General Court considered, in paragraph 116 of the judgment under appeal, that it is clear from recital 99 of the preamble to the provisional regulation that considerable investments were made by the Community industry in 2005 and over the investigation period. The General Court found that the provisional regulation and the regulation at issue contain no assessment of whether or not those investments constitute a ‘self-inflicted injury’. According to the General Court, bearing in mind the amounts which they represented during the investigation period, those investments may have contributed to the injury suffered by the Community industry. In those circumstances, it 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’.
Moreover, it is clear from paragraph 181 of the judgment under appeal that, since the data produced by the applicants indeed show that certain producers were unprofitable in 2003 and 2004, ‘the institutions were under a duty to assess the impact of that situation on the injury suffered by the Community industry as a whole, which they failed to do’.
In that regard, it must be stated that Article 3(5) of the basic regulation provides that the examination of the impact of the dumped imports on the Community industry concerned includes an evaluation of all relevant economic factors and indices having a bearing on the state of that Community industry. That provision contains a list of factors which may be taken into account and states that that list is not exhaustive and that decisive guidance is not necessarily given by any one or more of those factors (see the judgment of 28 November 2013 in Case C‑13/12 P CHEMK and KF v Council, paragraph 56).
Article 3(7) of the basic regulation provides that known factors, other than the dumped imports, which are injuring the Community industry at the same time must be examined in order to ensure that injury caused by those other factors is not attributed to the dumped imports pursuant to paragraph 6. Article 3(6) of the basic regulation states that it must be demonstrated, from all the relevant evidence presented, that the dumped imports are causing material injury to the Community industry (see Case C‑398/05 AGST Draht- und Biegetechnik [2008] ECR I‑1057, paragraph 31).
It is settled case-law that the determination of the existence of harm caused to the Community industry requires an appraisal of complex economic situations and the judicial review of such an appraisal must therefore be limited to verifying whether relevant procedural rules have been complied with, whether the facts relied on have been accurately stated, and whether there has been a manifest error in the appraisal of those facts or a misuse of powers (see Case C‑351/04 Ikea Wholesale [2007] ECR I‑7723, paragraph 41). That is particularly the case as regards the determination of the factors injuring the Community industry in an anti-dumping investigation (see AGST Draht- und Biegetechnik, paragraph 34).
In determining injury, the institutions of the European Union are under an obligation to consider whether the injury on which they intend to base their conclusions does in fact derive from the dumped imports and must disregard any injury deriving from other factors, particularly from the conduct of Community producers themselves (see Extramet Industrie v Council, paragraph 16; AGST Draht- und Biegetechnik, paragraph 35; and CHEMK and KF v Council, paragraph 70).
In this regard, it is for the European Union institutions to ascertain whether the effects of those other factors were not such as to break the causal link between, on the one hand, the imports in question and, on the other, the injury suffered by the Community industry. It is also for them to verify that the injury attributable to those other factors is not taken into account in the determination of injury within the meaning of Article 3(7) of the basic regulation and, consequently, that the anti-dumping duty imposed does not go beyond what is necessary to offset the injury caused by the dumped imports (see, to that effect, Case C‑535/06 P Moser Baer India v Council [2009] ECR I‑7051, paragraph 88).
However, if the European Union institutions find that, despite such factors, the injury caused by the dumped imports is material under Article 3(1) of the basic regulation, the causal link between those imports and the injury suffered by the Community industry can consequently be established.
The General Court held that the investments and the lack of profitability of certain Community producers constituted other ‘known factors’ for the purposes of Article 3(7) of the basic regulation, since they were capable of contributing to the injury suffered by the Community industry.
In addition, the General Court found at paragraphs 119 and 120 of the judgment under appeal that the appellants had not put forward any argument capable of invalidating the entire analysis of the European Union institutions relating to the causal link and that the investments had not contributed significantly to the injury suffered by the Community industry in 2005 and during the investigation period. Furthermore, the General Court found in paragraph 183 of the judgment under appeal that the lack of profitability in 2004 of five of the six Community producers could not be regarded as an external factor capable of calling into question the conclusion that the deficit experienced by certain Community producers could have been caused by the dumped imports.
As the Court has already held, it is for the parties pleading the illegality of the regulation at issue to adduce evidence to show that those factors could have had such an impact that the existence of injury caused to the Community industry and of the causal link between that injury and the dumped imports was no longer reliable in terms of the obligation of those institutions to disregard any injury resulting from other factors (see AGST Draht- und Biegetechnik, paragraph 51). The appellants, however, have not put forward any sufficient argument to that effect.
In those circumstances, it follows from the case-law cited in the preceding paragraph that the General Court acted correctly in law in finding that the institutions of the European Union had breached Article 3(7) of the basic regulation by failing to separate and distinguish the effects of these external factors from those of the dumped imports, but that that breach was not capable of calling into question the legality of the regulation at issue.
The first part of the first ground of appeal must therefore be rejected.
By the second part of their first ground of appeal, the appellants claim that the General Court erred in law in holding that it was for the appellants to prove that a non-attribution analysis would have led the institutions of the European Union to a different conclusion as regards the causal link. According to the appellants, it is clear from the basic regulation, in particular Article 3, and from Article 3 of the Anti-Dumping Agreement of the World Trade Organisation (WTO) that the burden of proof for carrying out the non-attribution analysis of the other known factors rests on those institutions, and not on the appellants. If those institutions had breached Article 3(7) of the basic regulation by not carrying out a non-attribution analysis of the other known injury factors, the appellants could not be required to prove that, had it not been for that breach, the administrative investigation might have arrived at a different conclusion.
Moreover, according to the appellants, the very structure of Article 3(7) of the basic regulation implies that it is for the institutions of the European Union to carry out the non-attribution analysis during the anti-dumping investigation. That interpretation, they submit, is borne out by the Court’s case-law (Extramet Industrie v Council; AGST Draht- und Biegetechnik; and Moser Baer India v Council), according to which those institutions are required to examine whether the injury actually derives from the dumped imports and to disregard any injury deriving from other factors.
In support of those arguments, the appellants cite the report of the Dispute Settlement Body of the WTO, entitled ‘United States - Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan’ (WT/DS184/AB/R, paragraph 228), according to which, if the injurious effects of the dumped imports and the other known factors remain lumped together and indistinguishable, there is simply no means of knowing whether injury ascribed to dumped imports was, in reality, caused by other factors. According to that report, Article 3.5 of the WTO Anti-Dumping Agreement requires the investigating authority to make an appropriate assessment of the injury caused to the domestic industry and to separate and distinguish the injurious effects of other known factors.
According to the appellants, the General Court’s reasoning reverses the burden of proof and is also contrary to Article 3(2) and (6) of the basic regulation, which requires that the determination of injury be based on positive evidence. The appellants consider that, by asking them to produce negative evidence, the General Court placed them in a situation in which it was impossible to adduce any evidence. Furthermore, even if the test resulting from Foshan Shunde Yongjian Housewares & Hardware v Council were applied to a situation in which the institutions of the European Union did not carry out a non-attribution analysis, it would be incumbent on the appellants to prove, not that, in the absence of irregularities, the conclusions would have been different, but simply that such an eventuality could not be excluded.
The institutions of the European Union contend that those arguments are unfounded and that they should be rejected.
In paragraphs 120 and 182 to 185 of the judgment under appeal, the General Court examined the data submitted by the appellants relating to the Council’s rejection of the arguments that the investments in question were capable of contributing to the injury caused to the Community industry, which was already not profitable before any dumping took place. The General Court found in paragraph 120 of the judgment under appeal that those investments related to production machinery which had been depreciated over many years and ‘accounted for 4.7%, at most, of the Community industry’s loss of profitability in 2005’.
With regard to the lack of profitability of the Community industry, the General Court found, in paragraph 183 of the judgment under appeal, ‘that it [was] possible to interpret the figures for 2004 in a different way’. In particular, the General Court found that ‘three Community producers, together representing 24% to 28% of total Community production, were incurring losses in 2003, and five producers made losses in 2004. However, [it stated] that … despite the increase in consumption, the year 2004 [was] characterised by a loss of market share for the Community industry, a 2% decrease in its sales as compared with 2003, an increase in the dumped imports and in their market share and a decrease in their prices, which [could] mean that some Community producers were already negatively affected by the dumped imports in 2004, even though, overall, the Community industry [had been] able to increase its profits.’
According to the appellants, in this case, although the institutions of the European Union breached Article 3(7) of the basic regulation by not carrying out a non-attribution analysis of other known injury factors, the appellants could not be required to prove that, had it not been for that infringement, the administrative investigation might have had a different outcome.
In this regard, it should be noted that the objective of Article 3(7) of the basic regulation is to prevent the Community industry from being granted protection beyond that which is necessary by requiring reasoning that is adequate and open to judicial review, so that the injurious effects of other external factors are not taken into account when the injury attributed to dumped imports is being determined. However, according to the case-law cited in paragraph 32 of the present judgment, it is for the appellants, who dispute the consequences of the breaches established in this case by the General Court, to show that those breaches cast doubt on the reliability of the determination of injury.
In this case, the appellants, by attempting to show that the General Court could not reasonably have concluded that it was for them to prove that a non-attribution analysis would have led the institutions of the European Union to a different conclusion, are in fact seeking, by their arguments, to call into question the findings of fact made by the General Court and, in particular, to contest the probative value which that Court attached to those facts.
It should be pointed out in this regard that it is settled case-law that the Court of Justice has no jurisdiction to find the facts or, as a rule, to examine the evidence which the General Court accepted in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the General Court alone to assess the value which should be attached to the evidence produced before it. That assessment does not therefore constitute, save where the clear sense of that evidence has been distorted, a point of law which, as such, is subject to review by the Court of Justice.
Accordingly, the second part of the first ground of appeal must be rejected as inadmissible.
By their second ground of appeal, the applicants claim that the General Court erred in law in finding that it was possible for the institutions of the European Union, without committing a manifest error of assessment, not to carry out a collective analysis of the injury factors other than the dumped imports. They submit that the General Court upheld the Council’s interpretation of Article 3(6) and (7) of the basic regulation, according to which the known factors had to be examined individually and a collective analysis of those factors was necessary only under certain conditions. However, according to the appellants, the General Court wrongly decided that they had not adduced evidence that the investments in question had contributed to the injury suffered by the European Union industry. The General Court misread the evidence and did not state the reasons for rejecting the appellants’ plea.
Furthermore, the General Court misapplied the criterion, set out in paragraph 43 of the judgment under appeal, that a collective analysis of the known injury factors is necessary only where the other known factors have had a negative impact on the situation of the European Union industry, without such impact being considered material. The appellants claim that, once the General Court had found that imports from Iceland and Venezuela, the investments made by the European Union industry and the pre-existing lack of competitiveness had contributed to the injury caused to the European Union industry, the conditions for carrying out a collective analysis of the known injury factors were satisfied.
The appellants take the view that the case-law of the WTO supports their approach. According to the relevant report of the WTO Appellate Report Body, entitled ‘EC - Pipe fittings’ (WT/DS219/AB/R), the investigating authority was not required to undertake a collective analysis of the various injury factors on condition that, in view of 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.
According to the appellants, that obligation required that the distinction between the nature and extent of the injurious effects of the other factors and the nature and extent of the effects of the dumped imports should be sufficiently justified. Following the example of that case-law, the appellants claim that the institutions of the European Union did not properly separate or distinguish the injurious effects of those imports from the injurious effects of other known factors. The General Court, they argue, wrongly concluded that those institutions were not required to carry out a collective analysis of all other known factors.
The institutions of the European Union contend that those arguments are unfounded and that they should be rejected.
Article 3(5) of the basic regulation provides that the examination of the impact of the dumped imports on the Community industry concerned must include an evaluation of all economic factors and indices having a bearing on the state of that industry.
Article 3(6) of the basic regulation states that the institutions of the European Union are required, using all the relevant evidence relating to the situation of the European Union industry, to establish the existence of injury to that industry. In particular, that article provides that such proof must entail a demonstration that the volume and/or price levels identified pursuant to paragraph 3 are responsible for an impact on the European Union industry as provided for in paragraph 5, and that this impact exists to a degree which enables it to be classified as material.
Thus, the term ‘Community industry’, for the purposes of Article 4(1) of the basic regulation, refers to ‘the Community producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion, as defined in Article 5(4), of the total Community production of those products’.
It therefore follows from those provisions that the determination of injury must be conducted at the level of the Community industry as a whole.
In that regard, the General Court stated in paragraphs 43 and 45 of the judgment under appeal that, in accordance with the objective laid down in Article 3(6) and (7) of the basic regulation of ensuring 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, it was necessary in certain circumstances to carry out a collective analysis of such external factors. Where the institutions take the view that a wide range of injury factors, other than the dumped imports, may have contributed to the injury, but that their impact cannot individually be regarded as significant, such a collective analysis must be carried out.
The General Court found, in paragraph 211 of the judgment under appeal, that the individual analysis of the injury factors was not flawed by a manifest error, with the exception, however, of two factors which the European Union institutions had failed to analyse, but which the appellants had failed to prove would, in the circumstances, have contributed to the injury suffered by the Community industry. The General Court concluded that it was possible for those institutions, without committing a manifest error of assessment, not to carry out a collective analysis of the injury factors other than the dumped imports.
In accordance with settled case-law, the provisions of the basic regulation must, so far as is possible, be interpreted in the light of the corresponding provisions of the WTO Anti‑Dumping Agreement. In this case, the General Court’s decision is supported by the interpretation of the Dispute Settlement Body of the WTO in the EC - Pipe fittings report, referred to above, in that the requirement under Article 3.5 of that anti-dumping agreement to carry out a non-attribution analysis, in due and proper form, which must separate or distinguish the injury caused by the other known factors from the injury caused by the dumped imports, does not automatically require a collective analysis of the external injury factors, provided that, under the specific factual circumstances of each case, the institutions of the European Union fulfil their obligation not to attribute to the dumped imports the harm caused by the other known factors.
This is in particular the case where those institutions are able reasonably to conclude, without carrying out an in-depth collective analysis of the other known injury factors, that the injury attributed to the dumped imports is in fact caused by those imports, rather than by the other external factors.
In that regard, the appellants have not adduced any evidence capable of invalidating the General Court’s conclusion that a collective analysis of the injury factors, other than the dumped imports, was not necessary for the European Union institutions to fulfil their obligation not to attribute to the dumped imports the harm caused by the other known factors.
In those circumstances, the second ground of appeal must be rejected.
The appellants rely on Article 87(3) of the Rules of Procedure of the General Court in seeking to have set aside the General Court’s decision on costs, which orders them also to pay the Council’s costs. The appellants claim that in this case the number of errors committed by the institutions of the European Union at the time when the regulation at issue was adopted constitutes exceptional circumstances, within the meaning of Article 87(3) of those Rules of Procedure, which justify an order that each party should bear its own costs.
The Council and Euroalliages contend that this ground of appeal should be rejected. The Commission did not lodge observations on this ground of appeal.
It is clear from the judgment under appeal that the infringements established by the General Court were not such as to induce the appellants to appeal to the Court of Justice to have that judgment set aside, since those infringements were not capable of affecting the legality of the regulation at issue.
In the light of the foregoing, the appellants’ claim that the number of errors committed by the institutions of the European Union at the time when the regulation at issue was adopted constitutes exceptional circumstances, within the meaning of Article 87(3) of the Rules of Procedure of the General Court, which justify an order that each party should bear its own costs is, in any event, unfounded having regard to the rejection of their other grounds of appeal.
This ground of appeal must therefore be rejected as being unfounded.
Under Article 138(1) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since Transnational Company ‘Kazchrome’ AO and ENRC Marketing AG have been unsuccessful, and since the Council has applied for costs to be awarded against them, the appellants must be ordered to pay the costs of the appeal. In accordance with Article 140(1) of the Rules of Procedure, which also applies to appeal proceedings pursuant to Article 184(1) thereof, the Commission and Euroalliages are to be ordered to bear their own respective costs.