JUDGMENT OF THE GENERAL COURT (Eighth Chamber)
7 February 2013 (*)
(Dumping – Imports of solutions of urea and ammonium nitrate originating in Russia – Request for a new exporter review – Normal value – Export price – Articles 1, 2 and 11(4) and (9) of Regulation (EC) No 384/96 (now Articles 1, 2 and 11(4) and (9) of Regulation (EC) No 1225/2009))
In Case T‑118/10,
Acron OAO, established in Veliky Novgorod (Russia), represented by B. Evtimov, lawyer, and D. O’Keeffe, Solicitor,
applicant,
v
Council of the European Union, represented by J.-P. Hix and B. Driessen, acting as Agents, and by G. Berrisch, lawyer, and N. Chesaites, Barrister,
defendant,
supported by
European Commission, represented by H. van Vliet and C. Clyne, acting as Agents,
and by
Fertilizers Europe, established in Brussels (Belgium), represented by B. O’Connor, Solicitor,
interveners,
ACTION for annulment of Council Implementing Regulation (EU) No 1251/2009 of 18 December 2009 amending Regulation (EC) No 1911/2006 imposing a definitive anti-dumping duty on imports of solutions of urea and ammonium nitrate originating, inter alia, in Russia (OJ 2009 L 338, p. 5),
THE GENERAL COURT (Eighth Chamber),
composed of L. Truchot, President, H. Kanninen (Rapporteur), and M. E. Martins Ribeiro, Judges,
Registrar: J. Weychert, Administrator,
having regard to the written procedure and further to the hearing on 8 December 2011,
gives the following
Judgment
Legal context
1 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 OJ 2010 L 7, p. 22)) constitutes the basic anti-dumping legislation.
2 Article 1(1) and (2) of the basic regulation (now Article 1(1) and (2) of Regulation No 1225/2009) provides:
‘1. An anti-dumping duty may be applied to any dumped product whose release for free circulation in the Community causes injury.
2. A product is to be considered as being dumped if its export price to the Community is less than a comparable price for the like product, in the ordinary course of trade, as established for the exporting country.’
3 Article 2 of the basic regulation (now Article 2 of Regulation No 1225/2009) provides:
‘1. The normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country.
However, where the exporter in the exporting country does not produce or does not sell the like product, the normal value may be established on the basis of prices of other sellers or producers.
Prices between parties which appear to be associated or to have a compensatory arrangement with each other may not be considered to be in the ordinary course of trade and may not be used to establish normal value unless it is determined that they are unaffected by the relationship.
…
2. Sales of the like product intended for domestic consumption shall normally be used to determine normal value if such sales volume constitutes 5% or more of the sales volume of the product under consideration to the Community.
However, a lower volume of sales may be used when, for example, the prices charged are considered representative for the market concerned.
3. When there are no or insufficient sales of the like product in the ordinary course of trade, or where because of the particular market situation such sales do not permit a proper comparison, the normal value of the like product shall be calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits, or on the basis of the export prices, in the ordinary course of trade, to an appropriate third country, provided that those prices are representative. A particular market situation for the product concerned within the meaning of the preceding sentence may be deemed to exist, inter alia, when prices are artificially low, when there is significant barter trade, or when there are non-commercial processing arrangements.
…
5. Costs shall normally be calculated on the basis of records kept by the party under investigation, provided that such records are in accordance with the generally accepted accounting principles of the country concerned and that it is shown that the records reasonably reflect the costs associated with the production and sale of the product under consideration. If costs associated with the production and sale of the product under investigation are not reasonably reflected in the records of the party concerned, they shall be adjusted or established on the basis of the costs of other producers or exporters in the same country or, where such information is not available or cannot be used, on any other reasonable basis, including information from other representative markets.
Consideration shall be given to evidence submitted on the proper allocation of costs, provided that it is shown that such allocations have been historically utilised. In the absence of a more appropriate method, preference shall be given to the allocation of costs on the basis of turnover. Unless already reflected in the cost allocations under this subparagraph, costs shall be adjusted appropriately for those non‑recurring items of cost which benefit future and/or current production.
Where the costs for part of the period for cost recovery are affected by the use of new production facilities requiring substantial additional investment and by low capacity utilisation rates, which are the result of start-up operations which take place within or during part of the investigation period, the average costs for the start-up phase shall be those applicable, under the abovementioned allocation rules, at the end of such a phase, and shall be included at that level, for the period concerned, in the weighted average costs referred to in the second sub‑paragraph of paragraph 4. The length of a start-up phase shall be determined in relation to the circumstances of the producer or exporter concerned, but shall not exceed an appropriate initial portion of the period for cost recovery. For this adjustment to costs applicable during the investigation period, information relating to a start-up phase which extends beyond that period shall be taken into account where it is submitted prior to verification visits and within three months of the initiation of the investigation.
6. The amounts for selling, for general and administrative costs and for profits shall be based on actual data pertaining to production and sales, in the ordinary course of trade, of the like product, by the exporter or producer under investigation. When such amounts cannot be determined on this basis, the amounts may be determined on the basis of:
(a) the weighted average of the actual amounts determined for other exporters or producers subject to investigation in respect of production and sales of the like product in the domestic market of the country of origin;
(b) the actual amounts applicable to production and sales, in the ordinary course of trade, of the same general category of products for the exporter or producer in question in the domestic market of the country of origin;
(c) any other reasonable method, provided that the amount for profit so established shall not exceed the profit normally realised by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin.
7. (a) In the case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including the Community, or where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Community for the like product, duly adjusted if necessary to include a reasonable profit margin.
An appropriate market economy third country shall be selected in a not unreasonable manner, due account being taken of any reliable information made available at the time of selection. Account shall also be taken of time-limits; where appropriate, a market economy third country which is subject to the same investigation shall be used.
…’
4 Article 11(1) to (3) and (5) of the basic regulation (now Article 11(1) to (3) and (5) of Regulation No 1225/2009) provides as follows:
‘1. An anti-dumping measure shall remain in force only as long as, and to the extent that, it is necessary to counteract the dumping which is causing injury.
2. A definitive anti-dumping measure shall expire five years from its imposition or five years from the date of the conclusion of the most recent review which has covered both dumping and injury, unless it is determined in a review that the expiry would be likely to lead to a continuation or recurrence of dumping and injury …
3. The need for the continued imposition of measures may also be reviewed, where warranted, on the initiative of the Commission or at the request of a Member State or, provided that a reasonable period of time of at least one year has elapsed since the imposition of the definitive measure, upon a request by any exporter or importer or by the Community producers which contains sufficient evidence substantiating the need for such an interim review.
An interim review shall be initiated where the request contains sufficient evidence that the continued imposition of the measure is no longer necessary to offset dumping and/or that the injury would be unlikely to continue or recur if the measure were removed or varied, or that the existing measure is not, or is no longer, sufficient to counteract the dumping which is causing injury. …
4. A review shall also be carried out for the purpose of determining individual margins of dumping for new exporters in the exporting country in question which have not exported the product during the period of investigation on which the measures were based.
The review shall be initiated where a new exporter or producer can show that it is not related to any of the exporters or producers in the exporting country which are subject to the anti-dumping measures on the product, and that it has actually exported to the Community following the abovementioned investigation period, or where it can demonstrate that it has entered into an irrevocable contractual obligation to export a significant quantity to the Community.
…
5. The relevant provisions of this Regulation with regard to procedures and the conduct of investigations, excluding those relating to time-limits, shall apply to any review carried out pursuant to paragraphs 2, 3 and 4. Any such review shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review. …’
5 Recitals 3 and 4 in the preamble to Council Regulation (EC) No 1972/2002 of 5 November 2002 amending the basic regulation (OJ 2002 L 305, p. 1) state:
‘(3) Article 2(3) of Regulation (EC) No 384/96 stipulates, inter alia, that where because of a particular market situation sales of the like product do not permit a proper comparison, the normal value is to be calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits, or on the basis of the export prices, in the ordinary course of trade, to an appropriate third country provided that those prices are representative. It is prudent to provide for a clarification as to what circumstances could be considered as constituting a particular market situation in which sales of the like product do not permit a proper comparison. Such circumstances can, for example, occur because of the existence of barter-trade and other non-commercial processing arrangements or other market impediments. As a result market signals may not properly reflect supply and demand which in turn may have an impact on the relevant costs and prices and may also result in domestic prices being out of line with world-market prices or prices in other representative markets. Obviously, any clarification given in this context cannot be of an exhaustive nature in view of the wide variety of possible particular market situations not permitting a proper comparison.
(4) It is considered appropriate to give some guidance as to what has to be done if, pursuant to Article 2(5) of Regulation (EC) No 384/96, the records do not reasonably reflect the costs associated with the production and sale of the product under consideration, in particular in situations where because of a particular market situation sales of the like product do not permit a proper comparison. In such circumstances, the relevant data should be obtained from sources which are unaffected by such distortions. Such sources can be the costs of other producers or exporters in the same country or, where such information is not available or cannot be used, any other reasonable basis, including information from other representative markets. The relevant data can be used either for adjusting certain items of the records of the party under consideration or, where this is not possible, for establishing the costs of the party under consideration.’
6 Article 2.2.1.1 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (OJ 1994 L 336, p. 103, ‘the 1994 Anti‑Dumping Agreement’), which appears as Annex 1A to the Agreement establishing the World Trade Organisation (‘WTO’), approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1), provides:
‘For the purpose of paragraph 2, costs shall normally be calculated on the basis of records kept by the exporter or producer under investigation, provided, that such records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sale of the product under consideration. Authorities shall consider all available evidence on the proper allocation of costs, including that which is made available by the exporter or producer in the course of the investigation provided that such allocations have been historically utilised by the exporter or producer, in particular in relation to establishing appropriate amortisation and depreciation periods and allowances for capital expenditures and other development costs. Unless already reflected in the cost allocations under this sub-paragraph, costs shall be adjusted appropriately for those non-recurring items of cost which benefit future and/or current production, or for circumstances in which costs during the period of investigation are affected by start-up operations.’
Background to the dispute
7 On 19 December 2006, the Council of the European Union adopted Council Regulation (EC) No 1911/2006 imposing a definitive anti‑dumping duty on imports of solutions of urea and ammonium nitrate originating in Algeria, Belarus, Russia and Ukraine following an expiry review pursuant to Article 11(2) of the basic regulation (OJ 2006 L 365, p. 26).
8 The Commission of the European Communities received a request for a new exporter review, pursuant to Article 11(4) of the basic regulation, from the applicant, Acron OAO, an exporting producer established in Russia. The applicant claimed that it had not exported solutions of urea and ammonium nitrate (‘solutions of UAN’ or ‘the product concerned’) to the European Union during the original investigation period on which the anti-dumping measures were based, namely the period from 1 June 1998 to 31 May 1999, and that it was not linked with any of the exporting producers of UAN that are subject to the measures in force. The applicant further claimed that it had not begun exporting solutions of UAN to the European Union until after the end of the original investigation period.
9 Having determined, after consulting the Advisory Committee, that sufficient evidence existed to justify a review pursuant to Article 11(4) of the basic regulation, the Commission, by Regulation (EC) No 241/2009 of 20 March 2009 (OJ 2009 L 75, p. 5), initiated a new exporter review of Regulation No 1911/2006 with respect to the applicant.
10 Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time-limit set out in the notice of initiation. All interested parties who so requested and showed that there were particular reasons why they should be heard were granted a hearing.
11 The new exporter review investigation period covered the period from 1 January to 31 December 2008.
12 On 18 December 2009, the Council adopted Implementing Regulation (EU) No 1251/2009 amending Regulation (EC) No 1911/2006 (OJ 2009 L 338, p. 5, ‘the contested regulation’). According to the contested regulation, the Council decided to impose an anti-dumping duty in respect of the applicant.
13 Recitals 14 to 18 to the contested regulation read as follows:
‘(14) The applicant had no domestic sales in Russia of the product concerned. Whenever domestic prices cannot be used in order to establish normal value, another method has to be applied. In accordance with Article 2(3) of the basic Regulation, the Commission instead calculated a constructed normal value, as follows:
(15) Normal value was constructed on the basis of the manufacturing costs incurred by the applicant plus a reasonable amount for selling, general and administrative costs (“SG&A costs”) and for profits, in accordance with Article 2(3) and (6) of the basic Regulation.
…
(16) Regarding the cost of manufacturing, it should be noted that gas costs represent a major proportion of the manufacturing cost and a significant proportion of the total cost of production. In accordance with Article 2(5) of the basic Regulation, it was examined whether the costs associated with the production and sales of the product concerned were reasonably reflected in the records of the applicant.
(17) It was established that the domestic gas prices paid by the applicant were abnormally low. By way of illustration, they amounted to between one fourth and one fifth of the export price of natural gas from Russia. In this regard, all available data indicates that domestic gas prices in Russia were regulated prices, which are far below market prices paid in unregulated markets for natural gas. Since gas costs were not reasonably reflected in the applicant’s records, they had to be adjusted accordingly. In the absence of any undistorted gas prices relating to the Russian domestic market, and in accordance with Article 2(5) of the basic Regulation, gas prices had to be established on “any other reasonable basis, including information from other representative markets”.
(18) The adjusted price was based on the average price of Russian gas when sold for export at the German/Czech border (Waidhaus), net of transport costs and adjusted to reflect local distribution cost. Waidhaus, being the main hub for Russian gas sales to the Union, which is both the largest market for Russian gas and has prices reasonably reflecting costs, can be considered a representative market within the meaning of Article 2(5) of the basic Regulation.’
14 Recitals 20 to 34 to the contested regulation set out the legal basis of the adjustment of the gas price and the adjustment method applied for the gas.
15 Recitals 35, 36 and 40 to the contested regulation state:
‘(35) SG&A costs and profit could not be established on the basis of the “chapeau” of Article 2(6), first sentence, of the basic Regulation because the applicant had no domestic sales in Russia of the like product. Article 2(6)(a) of the basic Regulation could not be applied, since only the applicant is subject to the investigation. Article 2(6)(b) was not applicable either, since for products belonging to the same general category of goods, natural gas is likewise by far the most important raw material and therefore manufacturing costs would very likely also need to be adjusted, for the reasons indicated in recital (17) above. In the framework of this review, no information was available to properly quantify such adjustment and to establish SG&A costs and the relevant profit margins when selling these products after such adjustment. Therefore, SG&A costs and profit were established pursuant to Article 2(6)(c) of the basic Regulation on the basis of a reasonable method.
(36) As the Russian domestic market of products of the same general category is extremely small, information had to be obtained from other representative markets. In this respect, consideration was given to publicly available information relating to major companies operating in the nitrogen fertilisers business sector. It was found that the corresponding data from North American (namely US) producers would be the most appropriate for the purpose of the investigation, given the large availability of reliable and complete public financial information from listed companies in this region of the world. Moreover, the North American market showed a significant volume of domestic sales and a considerable level of competition from both domestic and foreign companies. Therefore, SG&A costs and profit were established on the basis of the weighted average of SG&A costs and profit from three North American producers, which were found to be amongst the largest companies in the fertilisers sector, with regard to their North American sales of the same general category of products (nitrogen fertilisers). These three producers were considered to be representative of the nitrogen fertilisers business and their SG&A costs and profit as representative of the same type of costs normally incurred by companies operating successfully in that business segment. Furthermore, there is no indication suggesting that the amount for profit so established exceeds the profit normally realised by Russian producers on sales of products of the same general category on their domestic market.
…
(40) The applicant did not submit any evidence in support of this claim. Since the present review was limited to the determination of dumping with regard to the applicant, no information was available concerning other producers in Russia. While noting that gas costs incurred by the applicant have had to be rejected for the reasons outlined above, the applicant’s own reported profitability rate at company level for products sold on the domestic market, after corrections for extraordinary gains and losses from financial activities, is in the same order of magnitude as the profitability rate of the US producers. In these circumstances, there are no grounds to consider that the profit margin used would exceed the profit normally realised by other exporters or producers on products of the same general category in the domestic market of the country of origin within the meaning of Article 2(6)(c) of the basic Regulation.’
Procedure and forms of order sought by the parties
16 By application lodged at the Registry of the Court on 5 March 2010, the applicant brought the present action.
17 The applicant claims that the Court should:
– annul the contested regulation in so far as it concerns the applicant;
– order the Council to pay the costs.
18 The Council contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
19 Following an application to intervene submitted by Fertilizers Europe on 15 May 2010, the latter was, by order of the President of the Eighth Chamber of the Court of 30 September 2010, granted leave to intervene in support of the form of order sought by the Council. Fertilizers Europe lodged a statement in intervention at the Court Registry on 22 November 2010 and the applicant and the Council lodged their observations in response to that statement in intervention on 18 and 17 January 2011 respectively.
20 Following an application to intervene submitted by the Commission on 25 May 2010, the latter was, by order of the President of the Eighth Chamber of the Court of 30 September 2010, granted leave to intervene in support of the form of order sought by the Council. The Commission lodged a statement in intervention at the Court Registry on 22 November 2010 and the applicant and the Council lodged their observations in response to that statement in intervention on 18 and 17 January 2011 respectively.
21 In the observations which it lodged at the Court Registry on 18 January 2011 in response to Fertilizers Europe’s statement in intervention, the applicant argues that Fertilizers Europe’s claim, submitted in the application to intervene, that the applicant should be ordered to pay its costs is inadmissible, since Article 40 of the Statute of the Court of Justice provides that the application to intervene is to be limited to supporting the form of order sought by one of the parties. In any event, the applicant claims that Fertilizers Europe should be ordered to bear its own costs incurred in the context of its intervention, in accordance with the third subparagraph of Article 87(4) of the Rules of Procedure of the General Court. The applicant also claims that Fertilizers Europe should be ordered to pay the applicant’s costs in the context of that intervention.
Law
22 In support of its action, the applicant puts forward one plea in law, which can be presented, in substance, in the form of two pleas, alleging, first, infringement of Articles 1 and 2 of the basic regulation and, second, infringement of Article 2(3) and (6) of the basic regulation and Article 11(9) of that regulation.
First plea, alleging infringement of Articles 1 and 2 of the basic regulation
23 By its first plea, the applicant claims that there has been an infringement of Articles 1 and 2 of the basic regulation. It divides this plea into two parts, whereby, in essence, it maintains, first, that, for the purposes of calculating normal value, it was incorrectly found that the production costs and sales costs of the product concerned were not reasonably reflected in the applicant’s accounts and that it was therefore necessary to apply an adjustment. Second, the applicant states that (i) the adjustment made for the price of Russian gas was incorrectly based on the price at Waidhaus (Germany), (ii) the export duty of 30% applicable to Russian gas was not deducted from the amount of that adjustment and (iii) an adjustment of 15% was wrongly made to take account of local distribution costs.
24 It should be observed, as a preliminary point, that when the Council and the Commission (‘the institutions’), acting under the basic regulation, adopt specific protective measures against dumping, they enjoy a wide discretion by reason of the complexity of the economic, political and legal situations they have to examine (Case C-69/89 Nakajima v Council [1991] ECR I-2069, paragraph 86; Case C-26/96 Rotexchemie [1997] ECR I-2817, paragraph 10; Case T-164/94 Ferchimex v Council [1995] ECR II-2681, paragraph 131; Case T-162/94 NMB France and Others v Commission [1996] ECR II-427, paragraph 72; Case T‑155/94 Climax Paper v Council [1996] ECR II-873, paragraph 98; Case T‑170/94 Shanghai Bicycle v Council [1997] ECR II-1383, paragraph 63; and Case T-118/96 Thai Bicycle v Council [1998] ECR II-2991, paragraph 32).
25 It follows that review of such assessments by the Courts of the Union must be limited to verifying whether the relevant procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated and whether there has been a manifest error of assessment of the facts or a misuse of power (Case 240/84 NTN Toyo Bearing and Others v Council [1987] ECR 1809, paragraph 19; Case 258/84 Nippon Seiko v Council [1987] ECR 1923, paragraph 21; Case C-156/87 Gestetner Holdings v Council and Commission [1990] ECR I-781, paragraph 63; Rotexchemie, paragraph 24 above, paragraph 11; Climax Paper v Council, paragraph 24 above, paragraph 98; Shanghai Bicycle v Council, paragraph 24 above, paragraph 64; and Thai Bicycle v Council, paragraph 24 above, paragraph 33).
First part of the first plea
26 In this first part, the applicant seeks to show that, for the purposes of calculating normal value, the institutions incorrectly applied the principle of adjustment and also a method intended for non-market economy countries, which is contrary not only to the wording of Article 2(5) of the basic regulation but also to that provision read in conjunction with the other provisions of Articles 1 and 2 of the basic regulation (first complaint) and, furthermore, to the provisions of the 1994 Anti‑Dumping Agreement (second complaint).
– First complaint
27 In the applicant’s submission, the wording of Article 2(5) of the basic regulation allows the institutions to ascertain that the main costs associated with production and sales are duly entered and accounted for in the producers’ records. However, it does not provide that the institutions can ascertain whether those costs are reasonable by reference to the price levels on a different market. The wording of Article 2(5) of the basic regulation does not mean that it is necessary to ascertain the ‘reliability’ of the main elements of the production and sales costs of the product concerned in the light of the prices/values of similar inputs exported to the European Union or found on unregulated third-country markets.
28 The applicant further submits that Article 2(5) of the basic regulation, read in conjunction with the other provisions of Article 1 and Article 2(1) to (6) of that regulation, does not endorse the adjustment made to the price of gas by the institutions in the present case.
29 First of all, it must be observed that the applicant does not challenge as such the Council’s decision to rely on the provisions of Article 2(3) of the basic regulation in order to calculate the normal value of the product concerned.
30 That provision refers, first, to the criteria for disregarding the method for establishing normal value based on the prices on the domestic market of the exporting country and, second, to the alternative methods for calculating that value.
31 In the present case, the institutions resorted to the method laid down in Article 2(3) of the basic regulation, according to which the normal value of the product is calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits (‘the constructed normal value’).
32 The parties disagree as to the determination of the cost of production of the product concerned pursuant to the first subparagraph of Article 2(5) of the basic regulation. More specifically, the dispute concerns the calculation of the cost of gas in the production of the product concerned.
33 It is not in dispute that gas is the major input of the product concerned and that the price of gas from which the applicant benefited in producing the product concerned was regulated in Russia. The cost of gas actually borne by the applicant is not at issue, since the Council does not argue that that cost was different from that set out in the applicant’s accounts. The applicant complains that the Council failed to calculate the normal value of the product concerned on the basis of that cost and used another, higher price of gas for that calculation, taken from a market other than the domestic market in Russia.
34 It is apparent from a combined reading of the first sentence of Article 2(3) and the first sentence of the first subparagraph of Article 2(5) of the basic regulation that, in order to calculate normal value on the basis of the cost of production, costs must normally be calculated on the basis of records kept by the party under investigation.
35 The institutions contend that the second of those provisions contains two clarifications, which may be regarded as two requirements, namely (i) that the records must be kept in accordance with the generally accepted accounting principles of the country concerned and (ii) that the records must reasonably reflect the costs associated with the production and sale of the product under consideration. The second requirement entitles the institutions to ascertain whether the records ‘reasonably’ reflect the costs even if the generally accepted accounting principles of the country concerned are observed, and, where necessary, to make adjustments on the basis of sources of information other than the records, in accordance with the second sentence of the first subparagraph of Article 2(5) of the basic regulation.
36 The Council does not contend that the first requirement has been infringed in the present case. On the other hand, it argues that the applicant’s records do not reasonably reflect the costs associated with the production of the product concerned, given that the price of gas is artificially low, being considerably less than the prices of gas charged on non-regulated markets. Accordingly, the Council claims that it was entitled, in accordance with the first subparagraph of Article 2(5) of the basic regulation, to adjust the price of gas on the basis of information from other representative markets.
37 It must therefore be examined whether the Council was entitled to disregard the cost of gas actually borne by the applicant, as stated in its accounting records, for producing the product concerned, on the ground that – in the Council’s view – that cost was artificially low because of the regulation of the price of gas in Russia, and whether the Council was therefore entitled to adjust that cost upwards taking into account the price of gas on the market which it regarded as representative.
38 In that connection, it must first of all be observed that the first sentence of Article 2(3) of the basic regulation lays down the method for calculating normal value when there are no or insufficient sales of the like product in the ordinary course of trade, or where because of the particular market situation such sales do not permit a proper comparison.
39 The second sentence of Article 2(3) of the basic regulation, which defines those cases in which a particular market situation is deemed to exist, was inserted by Regulation No 1972/2002. It states that a particular market situation exists, inter alia, when prices are artificially low, when there is significant barter trade, or when there are non‑commercial processing arrangements.
40 It is apparent from recital 3 to Regulation No 1972/2002 that the insertion of the second sentence of Article 2(3) of the basic regulation seeks to clarify what circumstances could be considered as constituting a particular market situation in which sales of the like product do not permit a proper comparison. According to recital 3 to that regulation, such circumstances can, for example, occur because of the existence of barter-trade and other non-commercial processing arrangements or other market impediments. As a result, market signals may not properly reflect supply and demand, which in turn may have an impact on the relevant costs and prices and may also result in domestic prices being out of line with world-market prices or prices in other representative markets.
41 The second sentence of Article 2(3) of the basic regulation provides that a particular market situation exists, inter alia, when prices on the market of the exporting country are artificially low.
42 In recital 14 to the contested regulation, constructed normal value was used on the ground that there were no domestic sales of the product concerned in Russia. During the proceedings before the Court, the Council also stated that recourse to the constructed normal value method could be justified, since the cost of gas, the major input of the product concerned, was regulated and the price of natural gas was set at an artificially low level on the domestic market.
43 It must be pointed out that Article 2(3) of the basic regulation refers only to the criteria for disregarding the methods for establishing normal value based on the price of the product on the domestic market of the exporting country. That provision does not prescribe the detailed rules for calculating the production costs for establishing the constructed normal value, that calculation being governed by Article 2(5).
44 The first subparagraph of Article 2(5) of the basic regulation provides that production costs must normally be calculated on the basis of records kept by the party under investigation. Consequently, the calculation of the constructed normal value is normally performed using information from those records.
45 The second and third subparagraphs of Article 2(5) of the basic regulation contain specific provisions on (i) the allocation of costs and (ii) start-up costs. Those subparagraphs provide for the possibility of adjusting the costs in the records, and those costs may be adapted and allocated in a different manner under certain conditions.
46 It is also apparent from the first subparagraph of Article 2(5) of the basic regulation that the records of the party concerned do not serve as a basis for calculating normal value if the costs associated with the production of the product under investigation are not reasonably reflected in those records. In that case, the second sentence of the first subparagraph provides that the costs are to be adjusted or established on the basis of sources of information other than those records. That information may be taken from the costs incurred by other producers or exporters or, when that information is not available or cannot be used, any other reasonable source of information, including information from other representative markets.
47 In that connection, it must be observed that the second sentence of the first subparagraph of Article 2(5) of the basic regulation, concerning the method for calculating the normal value, was inserted by Regulation No 1972/2002.
48 It is apparent from recital 4 to that regulation that the insertion of the second sentence was designed to give some guidance as to what has to be done if the records do not reasonably reflect the costs associated with the production and sale of the product under consideration, essentially in particular market situations in which sales of the like product do not permit a proper comparison. In such a case, that recital states that the data should be obtained from sources which are unaffected by such distortions.
49 In recital 4 to Regulation No 1972/2002, it is also stated that recourse may be had to the costs of other producers or exporters in the same country or, where such information is not available or cannot be used, any other reasonable basis, including information from other representative markets. It is also apparent from that recital that the relevant data can be used either for adjusting certain items of the records of the party under consideration or, where this is not possible, for establishing the costs of that party.
50 In the present case, the Council argued before the Court that there were no sales of the product concerned on the Russian domestic market, and that the price of gas, the major input of the product concerned, was regulated so that it was artificially low on the domestic market. The applicant did not deny that the price of gas on the Russian market was regulated and that it represented a considerable proportion of the cost of the product concerned.
51 Since the price of gas in Russia was regulated, it may indeed be presumed that the cost of producing the product concerned was affected by a distortion of the domestic Russian market regarding the price of gas, as that price was not the result of market forces.
52 In addition, the interpretation of the first sentence of Article 2(5) of the basic regulation put forward by the applicant, namely that the costs of production are calculated solely on the basis of the records of the party under consideration, would be tantamount in fact to precluding recourse to the constructed normal value in particular where the costs of production are affected by a particular market situation, even though such recourse is expressly provided for in Article 2(3) of that regulation.
53 The institutions were therefore fully entitled to conclude that one of the items in the applicant’s records could not be regarded as reasonable and that, consequently, that item had to be adjusted by having recourse to other sources from markets which the institutions regarded as more representative and, consequently, the price of gas had to be adjusted.
54 As regards the argument that only Article 2(7) of the basic regulation allows the institutions to establish the normal value by reference to price/cost data in a market-economy third country rather than to price/cost data in the exporting country or the country of origin, the applicant submits that the scope of Article 2(7) is restricted to an exhaustive list of non market-economy countries. The applicant states that, as at the date of the initiation of the new exporter review investigation in the present case, the Russian Federation was not on the list of countries in question. It had obtained country-wide market‑economy status in 2002 and such status constitutes an irrebuttable presumption that the costs of investigated producers based in that country are sufficiently reliable for the normal value to be established on the basis, in particular, of Article 2(3) to (6) of the basic regulation.
55 In the present case, the normal value was not established on the basis of Article 2(7) of the basic regulation, since the Russian Federation was not, at the material time, a country covered by Article 2(7), and Article 2(1) to (6) of the basic regulation applied to the facts. As noted in paragraph 44 above, the first subparagraph of Article 2(5) of the basic regulation allows, under certain conditions, information from markets other than that of the exporting country or the market of origin to be taken into account.
56 In addition, the applicant submits that the costs of producing a product in a market economy country might be considered too low by comparison with the costs of an equivalent product found in the European Union or on other foreign markets. The anti-dumping investigation carried out by the institutions in the present case unjustifiably replaces the rules on State aid and more particularly Council Regulation (EC) No 2026/97 of 6 October 1997 on protection against subsidised imports from countries not members of the European Community (OJ 1997 L 288, p. l).
57 In that connection, it must be noted that, as is apparent from recital 5 to Regulation No 2026/97, both the basic regulation and Regulation No 2026/97 seek to lay down in sufficient detail the requirements for the application of those two trade defence instruments.
58 However, nothing indicates that the issue in the present case, which concerns the legislation obliging Gazprom to supply natural gas at a low price in Russia, ought to have been considered only from the perspective of State aid. It must be noted that the applicant has not adduced any evidence to that effect.
59 Nor does anything indicate that the mere fact that the issue might be examined from the perspective of State aid prevented the institutions from analysing the present case also from the perspective of the basic regulation.
60 At most, as provided for by Article 14(1) of the basic regulation and Article 24(1) of Regulation No 2026/97, no product is to be subject to both anti-dumping and countervailing duties for the purpose of dealing with one and the same situation arising from dumping or from export subsidisation.
61 It follows from the foregoing that the first complaint is unfounded.
– The second complaint
62 The applicant submits that the provisions of the basic regulation are intended to implement the rules of the 1994 Anti-Dumping Agreement and that the institutions are required to interpret and apply the provisions of the basic regulation in accordance with that agreement.
63 In that connection, it is apparent from 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 Courts of the European Union are to review the legality of measures of the EU institutions under the first paragraph of Article 230 EC (Case C-76/00 P Petrotub and Republica v Council [2003] ECR I-79, paragraph 53, and Case T-45/06 Reliance Industries v Council and Commission [2008] ECR II‑2399, paragraph 87).
64 However, where the European Union 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 Courts of the European Union to review the legality of the EU measure in question in the light of the WTO rules (Petrotub and Republica v Council, paragraph 63 above, paragraph 54; Case C-351/04 Ikea Wholesale [2007] ECR I-7723, paragraph 30; and Reliance Industries v Council and Commission, paragraph 63 above, paragraph 88).
65 It is apparent from recital 5 to the basic regulation that the purpose of that regulation is, inter alia, to transpose into EU law as far as possible the new and detailed rules contained in the 1994 Anti-Dumping Agreement, which include, in particular, those relating to the calculation of the dumping margin, so as to ensure a proper and transparent application of those rules (Petrotub and Republica v Council, paragraph 63 above, paragraph 55).
66 The Community therefore adopted the basic regulation in order to satisfy its international obligations arising from the 1994 Anti-Dumping Agreement and, by means of Article 2(5) of that regulation, it intended to implement the particular obligations laid down by Article 2.2.1.1 of the 1994 Anti-Dumping Agreement (see, to that effect, Petrotub and Republica v Council, paragraph 63 above, paragraph 56).
67 It follows that Article 2(5) of the basic regulation must, so far as possible, be interpreted in the light of Article 2.2.1.1 of the 1994 Anti‑Dumping Agreement (see, to that effect, Petrotub and Republica v Council, paragraph 63 above, paragraph 57, and Reliance Industries v Council and Commission, paragraph 63 above, paragraph 91, and the case-law cited).
68 To that end, it must be noted, first, that the applicant refers to one of the final drafts preceding the adoption of the 1994 Anti-Dumping Agreement which provided, so far as the provisions which became Article 2.2.1.1 of that agreement are concerned, that ‘[a]s a rule, costs should be allocated in accordance with the generally accepted accounting principles of the exporting country, provided that these principles reasonably reflect the costs associated with the production and sale of that product’. It follows from that wording that the initial object of Article 2.2.1.1 of that agreement, and consequently of Article 2(5) of the basic regulation, was to ensure that a producer under investigation applied good accounting principles objectively reflecting the actual costs borne by the producer under investigation and not to ascertain whether the prices of the inputs paid by the producer correspond to prices on unregulated markets.
69 However, invoking a provision in draft form is not sufficient to demonstrate that the intention of the drafters of that provision remained unchanged, especially if it appears that the wording of the provision in its final version is different from the corresponding provision at the draft stage, as in essence the Council correctly notes.
70 Second, it is apparent that the wording of Article 2.2.1.1 of the 1994 Anti‑Dumping Agreement does not differ significantly from the text of the first sentence of the first subparagraph of Article 2(5) of the basic regulation which seeks to ensure that records are kept in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sale of the product under consideration.
71 However, as the Council correctly noted at the hearing, the provisions mentioned in the second sentence of the first subparagraph of Article 2(5) of the basic regulation are not mentioned in the 1994 Anti‑Dumping Agreement. An interpretation in the light of the 1994 Anti-Dumping Agreement cannot therefore be relied upon fully in relation to those provisions covering the situation where the costs of the product concerned are not reasonably reflected in the records.
72 It should be added that the WTO rules do not define the expression ‘a particular market situation’, as defined in the second sentence of the Article 2(3) of the basic regulation and which may be used as a basis by the institutions for assessing whether the records reasonably reflect the costs, pursuant to the second sentence of the first subparagraph of Article 2(5) of the basic regulation, as noted in paragraphs 44 to 51 above.
73 The second complaint is therefore unfounded.
74 It follows from all of the foregoing that the first part of the first plea is unfounded.
The second part of the first plea
75 The applicant claims that there has been (i) an infringement of the second sentence of the first subparagraph of Article 2(5) of the basic regulation, (ii) a manifest error of assessment and also (iii) a failure to state reasons in that, by the contested regulation, the Council applied the adjustment of the gas price paid, on the basis of the Waidhaus price, did not deduct from the amount of the adjustment the export duty of 30% applicable to Russian gas and made an upwards adjustment of 15% to take account of local distribution costs. The applicant contests in that regard recital 18 to the contested regulation.
76 That recital is worded as follows:
‘The adjusted price was based on the average price of Russian gas when sold for export at the German/Czech border (Waidhaus), net of transport costs and adjusted to reflect local distribution cost. Waidhaus, being the main hub for Russian gas sales to the Union, which is both the largest market for Russian gas and has prices reasonably reflecting costs, can be considered a representative market within the meaning of Article 2(5) of the basic Regulation.’
77 The applicant maintains, first, that if the institutions had chosen a different basis, such as the export price of Russian gas to the Baltic States or any representative market with gas price levels closest to the level of the applicant’s levels of gas prices, the dumping margin would have been negative or different. The institutions ought to have chosen a ‘reasonable basis’ within the meaning of the second sentence of Article 2(5) of the basic regulation rather than the Waidhaus price.
78 The infringement of Article 2(5) of the basic regulation and the manifest error of assessment are the result of the institutions’ failure to examine the past existence of a market-sharing cartel which affected the conditions of imports of Russian gas from Waidhaus. The applicant refers to a Commission Decision of 8 July 2009 relating to a proceeding under Article 81 [EC] (Case COMP/39.401 - E.ON/GDF) (summary in OJ 2009 C 248, p. 5), which shows an infringement of Article 81 EC between E.ON AG, jointly and severally with its wholly-owned subsidiary E.ON Ruhrgas AG, and GDF Suez SA in the natural gas sector. The applicant explains that the undertakings in question acted as direct purchasers, importers and wholesalers of Russian gas at Waidhaus, and that their cartel was likely to increase or distort the purchase prices negotiated with suppliers of Russian gas at Waidhaus.
79 Similarly, the applicant refers to Case C-358/89 Extramet Industrie v Council [1992] ECR I-3813 and Case T-58/99 Mukand and Others v Council [2001] ECR II-2521 to substantiate the impact that anti‑competitive behaviour might have on dumping assessments.
80 Second, the Council also made a manifest error of assessment and failed to state reasons in the contested regulation when, for the purposes of calculating the cost of the natural gas, it refused to deduct the export duty of 30% on that gas, while deducting the costs of transport and making an upwards adjustment to take account of local distribution costs, as is clear from recital 18 to the contested regulation.
81 The reasoning followed is inconsistent and contradictory, since, in the applicant’s submission, just as Russian consumers do not have to pay for the gas to be transported from Russia to Waidhaus – which is why the costs of transport of the gas were deducted – the duty of 30% charged on exports of gas from Russia, which the applicant never pays for the production of the product concerned in Russia, ought to have been deducted as well. The institutions also made an upwards adjustment of 15% to take account of local distribution, without the slightest reasonable basis.
82 In the reply, the applicant further maintains that the mere fact of combining the price of gas at Waidhaus, the export duty of 30% and the 15% adjustment for local distribution costs constitutes an infringement of Article 2(5) of the basic regulation and a manifest error of assessment, in so far as that leads to the costs and profits of export sales being added to the costs and profits of domestic gas sales.
83 In that connection, the Court points out, as regards, in the first place, the choice of Waidhaus as the reference price, that the institutions are not required to consider every reference price during an anti-dumping proceeding, but must be prepared to examine in depth the proposals made by the parties, in the event of doubt concerning the choice of the reference price (see, to that effect, Case C-16/90 Nölle [1991] ECR I‑5163, paragraph 32).
84 In the present case, it is not apparent that, in the contested regulation, the Council made a manifest error of assessment in selecting the price of gas at Waidhaus. That price seems reasonable on a number of accounts.
85 As was noted in recital 18 to the contested regulation, Waidhaus is the main hub for Russian gas sales to the European Union. It is apparent from the case-file that Waidhaus is a German town on the route of the main gas pipelines between Russia and the European Union and, in terms of the number of gas supply contracts negotiated and the volume of gas concerned, is the main hub for gas exported by Russian producers to the European Union.
86 The price of gas negotiated at Waidhaus is therefore that charged by the Russian sellers to their European customers and not an intra‑Community price, contrary to the applicant’s assertions in the application.
87 Having regard to the volume of gas concerned and the number of contracts negotiated, there is no indication that the price of Russian gas at Waidhaus is not the result of market forces free from distortion.
88 As regards the E.ON/GDF decision (see paragraph 78 above), it is sufficient to note that, although it relates to sales of gas from Russia, the E.ON/GDF decision only concerns the examination of a market-sharing agreement in Germany and France between E.ON and GDF for sales of gas to their customers. The decision does not relate to an examination of the market for the wholesale export of Russian gas to the European Union as a whole, or the examination of the relationships between E.ON and GDF with their supplier of Russian gas.
89 Similarly, as regards the judgments in Extramet Industrie v Council and Mukand and Others v Council (paragraph 79 above), the Court notes that those judgments do not address the issue of whether the institutions determined the gas costs on a reasonable basis. In particular, the judgment in Extramet Industrie v Council addresses the institutions’ obligation to consider whether the injury on the basis of which they intend to impose an anti-dumping duty actually derived from dumped imports or from other factors (Extramet Industrie v Council, paragraph 79 above, paragraph 16). The judgment in Mukand and Others v Council also addresses the issue of whether, when deciding whether or not injury had been caused and whether or not there was any causal link between any such injury and the subsidised imports, other factors were capable of causing the damage to the Community industry (Mukand and Others v Council, paragraph 79 above, paragraph 41). Those judgments do not support the conclusion that the institutions made a manifest error of assessment in the basis chosen in order to determine the gas costs to be taken into account in the present case.
90 Lastly, although the applicant disputes that the Waidhaus price is much higher than the price of the gas sold on the Russian domestic market, it is not clear either that the Waidhaus price is indeed higher than the price of gas negotiated in the United Kingdom, the United States or Canada. The institutions did not therefore choose the highest reference price on the market. Nor is it certain that the export price of gas to the Baltic States is not comparable to that of the gas which passes through Waidhaus.
91 As regards, in the second place, the non-deduction of the 30% export tax and the 15% adjustment for local distribution costs, it must, first of all, be stated that, although, at the stage of the reply, the applicant argued that the combination of those factors infringed Article 2(5) of the basic regulation and constituted a manifest error of assessment, that argument simply amplifies the plea put forward by the applicant in the application, tending to show that that combination is inconsistent.
92 The argument in question must therefore be held to be admissible, contrary to what the Council argued at the hearing. For a plea which amplifies a submission put forward previously, whether directly or by implication, and which is closely connected with that submission, will be declared admissible (Case T-419/03 Altstoff Recycling Austria v Commission [2011] ECR II-975, paragraph 44).
93 Next, in order to show that the adjustment is in its view inconsistent, the applicant relies on a case that led to the adoption of Council Regulation (EC) No 954/2006 of 27 June 2006 imposing definitive anti-dumping duty on imports of certain seamless pipes and tubes, of iron or steel originating in Croatia, Romania, Russia and Ukraine, repealing Council Regulations (EC) No 2320/97 and (EC) No 348/2000, terminating the interim and expiry reviews of the anti‑dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating, inter alia, in Russia and Romania and terminating the interim reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating, inter alia, in Russia and Romania and in Croatia and Ukraine (OJ 2006 L 175, p. 4).
94 However, it is apparent from recital 97 to Regulation No 954/2006 that the costs of the Russian gas were adjusted on the basis of the price of gas for export to Western Europe, net of transport costs and excise duty. No reference is made to export tax, contrary to what the applicant claims.
95 In addition, the Council justified export tax not being deducted by the fact that Gazprom’s prices were not influenced by the amount of the export tax. The Council also stated that those prices were influenced only by what price its customers were willing to pay. At the hearing, the Council repeated its view that what matters is the price paid at Waidhaus, and that knowing the composition of that price is irrelevant.
96 The applicant has not been able to explain or to show how the price setting by Gazprom at Waidhaus could have been influenced by the amount of the export tax. It simply denied that 30% export tax constituted a reasonable basis.
97 It must therefore be found that the Council has not made a manifest error of assessment in not deducting that tax from the price paid at Waidhaus.
98 Since the applicant has simply denied, without adducing further evidence, that the local distribution costs used to calculate the constructed normal value were reasonable, it must also be found that the Commission did not make a manifest error of assessment in that regard.
99 Moreover, it is important to note that, since transport costs had been deducted in order to calculate the price of gas, it appears logical to adjust that calculation in addition by taking into account local distribution costs.
100 Lastly, the Court rejects the applicant’s argument alleging failure to state the reasons for the refusal to deduct the export tax on Russian gas and the adjustment made for local distribution costs. The statement of reasons for the contested regulation must be appraised having regard, in particular, to the information disclosed to the applicant and to the observations which it has made during the administrative procedure (Case T-410/06 Foshan City Nanhai Golden Step Industrial v Council [2010] ECR II‑879, paragraph 127).
101 In this case, it is apparent from recital 37 to the contested regulation, that the applicant – which it does not dispute – had been informed of the conclusions regarding the SG&A costs which would or would not be taken into account in calculating the constructed normal value, and that it was able to submit its observations in that regard, which relieved the Council of the need to repeat those explanations in the body of the contested regulation, so that it could confine itself to the matters of law and of fact on which that regulation is based. The argument alleging a failure to state reasons cannot therefore be upheld.
102 The second part of the first plea is therefore unfounded.
103 It follows from all of the foregoing that the first plea must be regarded as unfounded and must therefore be rejected.
Second plea, alleging infringement of Article 2(3) and (6) of the basic regulation and also Article 11(9) thereof
104 The applicant divides this plea into two parts. It maintains that it was unreasonable to take into account, in the present case, a profit margin, added to the cost of manufacturing to establish the normal value. That approach infringes Article 11(9) of the basic regulation (first part of the second plea) and Article 2(3) and (6) of the basic regulation (second part of the second plea).
Infringement of Article 11(9) of the basic regulation
105 The applicant submits that all the findings of the initial expiry review regulation which did not deal specifically with the applicant must remain valid. It adds that a new exporter review, pursuant to Article 11(4) of the basic regulation, is a partial re-opening of the initial investigation as regards the data relating to the new exporter taken individually. That has the effect that all the data of the initial regulation which are not based on data specific to Russian companies, and which are therefore not specific to the applicant, must be maintained, since they concern the method used for the expiry review. In addition, the choice of a new investigation period should affect only the data relating specifically to the applicant.
106 Indeed, the profit margin used in the contested regulation is disproportionately in excess of the profit margin that had been found to be the rate normally realised on sales in the same category of products in Russia. That disproportion shows that the institutions had recourse to a different method from that used for Regulation No 1911/2006, in breach of Article 11(9) of the basic regulation. It is unlikely that between 2005-2006, the period taken into account in Regulation No 1911/2006, and 2008, the period taken into account in the contested regulation, the profit margin normally realised in Russia on the same general category of products could have tripled, even if the price of gas had fluctuated.
107 In that connection, Article 11(9) of the basic regulation provides that in review investigations, provided that circumstances have not changed, the Commission is to apply the same methodology as in the investigation which led to the duty.
108 Consequently, it is necessary to establish whether the methodological difference relied on by the applicant exists and, if it does, to examine it in the light of Article 11(9) of the basic regulation in order to ascertain whether its existence infringes it (see, to that effect, Case T-299/05 Shanghai Excell M&E Enterprise and Shanghai Adeptech Precision v Council [2009] ECR II‑565, paragraph 163).
109 During the initial investigation, as during the new exporter review investigation, the amounts for selling, general and administrative costs and for profits were established pursuant to Article 2(6)(c) of the basic regulation.
110 In recitals 60 and 61 of Regulation No 1911/2006, the Council had stated as follows:
‘(60) As for Algeria, SG&A costs and profit could not be established on the basis of the chapeau of Article 2(6), first sentence, of the basic Regulation because the related manufacturers did not have representative domestic sales of the product concerned in the ordinary course of trade. Article 2(6)(a) of the basic Regulation could not be applied, since there are only these two producers subject to the investigation. Article 2(6)(b) was not applicable either, since the manufacturing costs for products belonging to the same general category of goods would also need to be adjusted in respect of gas costs, for the reasons indicated in recital 58 above. As it was found to be impossible to establish the magnitude of the necessary adjustment for all products belonging to the same general category of goods sold domestically, it is equally impossible to establish the profit margins after such adjustment. Therefore, SG&A costs and profit were established pursuant to Article 2(6)(c) of the basic Regulation.
(61) … SG&A costs and profit were established on the basis of the weighted average SG&A costs and profit from the same three North American producers. It should be noted that the amount for profit so established did not exceed the profit realised by the Russian producers on sales of products of the same general category on their domestic market.’
111 As stated in recitals 35 and 36 to the contested regulation and as the Council sets out in its defence, in order to determine the amounts for selling, administrative and general costs and for profit, in the context of the new exporter review, Article 2(6)(c) of the basic regulation was also applied. The Council also justifies the application of that provision by the argument that, in its view, Article 2(6)(a) and (b) could be applied with difficulty, since, first, no other exporters were examined in the course of the new exporter review and, second, manufacturing costs were in all likelihood distorted, owing to abnormally low gas costs.
112 It is therefore apparent that the institutions applied the same methodology as in the initial investigation.
113 It must be pointed out that, in essence, the applicant does not criticise the recourse to Article 2(6)(c) of the basic regulation.
114 The applicant maintains, however, that the review carried out ought only to have led to a partial re-opening of the initial investigation as regards solely the data relating to the new exporter and that the profit margin used in the contested regulation is unreasonable and too high.
115 However, the use of the same method does not mean that the same data collected during a previous investigation or the same factual conclusions or calculations obtained from that data must be used.
116 If the data used for the initial investigation were used, as such, in relation to the new exporter review, that would mean, inter alia, that identical data is taken into account although the investigation periods are different.
117 The first part of the second plea in law must, therefore, be rejected as unfounded.
Infringement of Article 2(3) and (6) of the basic regulation
118 The applicant contends that the contested regulation contains no explanation of the reason why the institutions did not use the profit margin applied in the initial regulation and merely states, at recital 40 to the regulation, that ‘no information was available concerning other producers in Russia’. The applicant submits that the institutions were not entitled to make an adjustment for the price of gas by reference to the applicant’s own recorded profitability rate. Such a rate could be valid only together with the applicant’s own reported gas cost and its own reported cost of manufacturing.
119 The applicant also maintains that, if it could be established that it had realised a profit of 42.6%, according to its own statement, the institutions ought to have applied Article 2(6)(b) of the basic regulation.
120 The institutions made a manifest error of assessment in establishing the profit margin on the basis of data from United States producers when their profit during the period taken into account was historically high and unprecedented. That is contrary to the provisions of Article 2(6)(c) of the basic regulation, which refers to a profit ‘normally realised’.
121 In that connection, it is not apparent that the determination of the profit margin established on the basis of the available data, which results from the ordinary course of trade and is established not to have exceeded the profit normally realised by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin, within the meaning of Article 2(6)(c) of the basic regulation, can constitute misapplication of that provision. The applicant’s complaint alleging contradictory reasoning between recitals 35 and 40 to the contested regulation cannot, moreover, be upheld.
122 Since the costs associated with the gas on the Russian market are not the result of market forces, it was justified, as previously seen, to determine the applicant’s profit margin on a reasonable basis, having recourse to other values, while ensuring, nevertheless, that those values do not exceed the values resulting from equivalent trade on the Russian domestic market.
123 The institutions were therefore fully entitled to conclude that to take into account the information from other producers – in this case American producers – would be the most appropriate and the most reasonable method, given the wide availability, reliability and completeness of the public financial information from listed companies and also the significant volume of domestic sales and the considerable level of competition between domestic and foreign companies.
124 The second part of the second plea in law must therefore be rejected as unfounded and, with it, that plea in its entirety.
125 It follows from all of the foregoing that the action must be dismissed.
Costs
126 As regards, first of all, the applicant’s argument that Fertilizers Europe’s claim that the applicant should be ordered to pay its costs is inadmissible, it is sufficient to note that costs are a matter ancillary to the main proceedings and that, as a matter of course, only the intervener has an interest in requesting that its costs be borne by another party.
127 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered, in accordance with the form of order sought by the Council and by Fertilizers Europe, to bear its own costs and to pay those incurred by both of the latter.
128 In accordance with the first subparagraph of Article 87(4) of the Rules of Procedure, the Commission is to bear its own costs.
On those grounds,
THE GENERAL COURT (Eighth Chamber)
hereby:
1. Dismisses the action;
2. Orders Acron OAO to bear its own costs and to pay those incurred by the Council of the European Union and by Fertilizers Europe;
3. Orders the European Commission to bear its own costs.
Truchot | Kanninen | Martins Ribeiro |
Delivered in open court in Luxembourg on 7 February 2013.
[Signatures]