Case T-119/06

Usha Martin Ltd

v

Council of the European Union and European Commission

(Dumping – Imports of steel ropes and cables originating, inter alia, in India – Breach of an undertaking – Principle of proportionality – Article 8(1), (7) and (9) of Regulation (EC) No 384/96 (now Article 8(1), (7) and (9) of Regulation (EC) No 1225/2009))

Summary of the Judgment

1.      Community law – Principles – Proportionality – Regulation imposing definitive anti-dumping and countervailing duties

(Art. 5, third para., EC; Council Regulation No 384/96)

2.      Common commercial policy – Protection against dumping – Price undertaking – Undertaking concerning the provision of reports and Undertaking Invoices – Breach by the trader

(Art. 5, third para., EC; Council Regulation No 384/96)

1.      By virtue of the principle of proportionality, as expressed in the third paragraph of Article 5 EC, the legality of Community rules is subject to the condition that the means employed must be appropriate to attainment of the legitimate objective pursued by those rules and must not go further than is necessary to attain it, and, where there is a choice of appropriate measures, it is necessary, in principle, to choose the least onerous.

However, in an area such as the common commercial policy in which the Community legislature has a broad discretion which accords with the political responsibilities given to it by the Treaty, only if a measure is manifestly inappropriate having regard to the objective which the competent institution is required to pursue can its lawfulness be affected. The broad discretion enjoyed by the Community legislature in this area corresponds to the broad discretion which, according to settled case-law, the Community institutions have when adopting specific anti-dumping measures pursuant to the basic regulations.

It follows that review by the Community judicature must be limited, in the sphere of anti-dumping action, to determining whether the measures adopted by the Community legislature are manifestly inappropriate having regard to the objective pursued.

(see paras 44-47)

2.      By withdrawing acceptance of an undertaking, because the exporter concerned has breached its obligation to provide quarterly reports of sales of a product not covered by the undertaking as well as its obligation not to issue Undertaking Invoices for products not covered by the undertaking, the Commission has not infringed the principle of proportionality. Any breach of an undertaking or obligation to cooperate in regard to the implementation and monitoring of that undertaking suffices to allow the Commission to withdraw its acceptance of the undertaking and impose a definitive anti-dumping duty on the basis of the facts established within the context of the investigation which led to the undertaking, provided that the investigation was concluded with a final determination that there was dumping and injury, and that the exporter concerned has been given an opportunity to comment. In addition, breach of an undertaking is, in itself, sufficient to trigger its withdrawal. Furthermore, whilst the principle of proportionality applies to the question whether the amount of anti-dumping duty imposed is appropriate in the light of the injury suffered by the Community industry, it does not, however, apply to the question of the imposition per se of those duties. However, the consequence of withdrawal of acceptance of the undertaking is the imposition of definitive anti-dumping duties on the imports in question of the exporting company. Consequently, and in accordance with Article 8(9) of the basic anti-dumping regulation No 384/96, the definitive anti‑dumping duty, imposed on the basis of the facts established in the context of the investigation which led to the undertaking, is applicable to the imports in question of that company and is therefore equivalent to the imposition per se of those duties. It follows that the lawfulness of the withdrawal of acceptance of an undertaking cannot, as such, be called into question by reference to the principle of proportionality.

(see paras 51-55)