Case T-410/06

Foshan City Nanhai Golden Step Industrial Co., Ltd

v

Council of the European Union

(Dumping – Imports of footwear with uppers of leather originating in China and Vietnam – Calculation of the constructed normal value – Export price – Rights of the defence – Injury – Obligation to state the reasons on which the decision is based)

Summary of the Judgment

1.      Common commercial policy – Protection against dumping – Dumping margin – Determination of the normal value – Use of constructed value – Discretion of the institutions as regards the method of calculation

(Council Regulation No 384/96, Art. 2(6)(c))

2.      Common commercial policy – Protection against dumping – Fixing of anti-dumping duties – Method of calculation

(Council Regulation No 384/96, Art. 9(4))

3.      Common commercial policy – Protection against dumping – Anti-dumping proceeding – Rights of the defence – Final disclosure by the Commission to undertakings

(Council Regulation No 384/96, Art. 20(2) and (4))

4.      Community law – Principles – Rights of the defence – Observance thereof in the context of administrative proceedings – Antidumping – Obligation of the institutions to ensure that the parties concerned are informed – Additional final disclosure document

(Council Regulation No 384/96, Art. 20(5))

5.      Common commercial policy – Protection against dumping – Injury – Period to be taken into consideration

(Council Regulation No 384/96, Art. 3(2))

1.      Article 2(6)(c) of the basic anti-dumping regulation No 384/96 gives the Community institutions a wide discretion to choose the method by which they will calculate selling costs, general and administrative costs and profit margin in calculating the constructed normal value.

In those circumstances, review by the Community Courts relates to whether the relevant procedural rules have been complied with, whether the facts on which the disputed conclusion is based have been accurately stated and whether there has been a manifest error of appraisal or a misuse of powers.

Furthermore, Article 2(6)(c) of the basic anti-dumping regulation No 384/96 provides that that method must be reasonable. Therefore, the Community judicature may find that there is a manifest error of assessment relating to the method chosen only if that method is unreasonable. Consequently, the existence of other reasonable methods which could have been followed does not affect the legality of the method actually chosen as the Community judicature cannot substitute their assessment for that of the institutions in that regard.

Consequently, within that context, the institutions may take the view that it is more reasonable to use information relating to profits realised on the domestic market of the country of manufacture by undertakings which are comparable in size to that of the producer subject to the investigation, do not incur particularly high selling or general costs, and have also obtained market economy treatment during recent investigations on products other than the products concerned and in respect of which the institutions had reliable data, than to base their decision on information relating to profits realised on sales of the products concerned in completely different markets.

It is apparent from Article 2(6)(c) of the basic anti-dumping regulation that where the institutions apply that provision in order to calculate a reasonable profit margin they do not have to use data relating to products of the same general category, but must ensure that the profit margin determined according to a reasonable method does not exceed the profit realised on sales of products of the same general category. Furthermore, that provision must not be interpreted as meaning that the institutions are prevented from establishing a profit margin if they do not have a reliable basis for calculating the profit margin realised on sales of products of the same general category.

(see paras 64-67, 71, 74)

2.      According to the final sentence of Article 9(4) of the basic anti-dumping regulation No 384/96, ‘[t]he amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the Community industry’. That rule means that a producer upon whom anti-dumping duties have been imposed cannot contest them on the ground that the investigation resulted in an exaggerated injury margin if the rate of duty has been fixed at the level of the dumping margin and that dumping margin is below both the injury margin incorrectly adopted and the real injury margin.

(see para. 94)

3.      The undertakings affected by an investigation preceding the adoption of an anti-dumping regulation must be placed in a position during the administrative procedure in which they can effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its assessment of the existence of dumping and the resultant injury.

In this connection, the fact that the final disclosure requested by the parties pursuant to Article 20(2) of the basic anti-dumping regulation No 384/96 is incomplete renders the regulation imposing definitive anti-dumping duties unlawful only if, as a result of the omission, the interested parties were not in a position to defend their interests effectively. That is inter alia the case where the omission relates to facts or considerations which are different from those used for any provisional measures, to which particular attention must be paid in final disclosure pursuant to that provision. That is also the case where the omission relates to facts or considerations which are different from those on which the Commission or Council bases a decision subsequent to the communication of the final disclosure document, as is apparent from the last sentence of Article 20(4) of the basic regulation.

The fact that the Commission amended its analysis after comments made on the final disclosure document by the parties concerned does not however, in itself, constitute infringement of the rights of the defence. As is apparent from the last sentence of Article 20(4) of the basic regulation, the final disclosure document does not prejudice any subsequent decision by the Commission or the Council. That provision merely requires the Commission to disclose, as soon as possible, the facts and considerations which are different from those which formed the basis for its initial approach in the final disclosure document. Consequently, in order to establish whether the Commission complied with the rights of the parties concerned deriving from the last sentence of Article 20(4) of the basic regulation, it must also be ascertained whether the Commission communicated to them the facts and considerations taken into account for the purpose of the new analysis of the injury and the form of measures necessary to eliminate it, in so far as those facts and considerations differ from those taken into account in the final disclosure document.

(see paras 111-112, 117-118)

4.      The Commission breaches Article 20(5) of the basic anti-dumping regulation No 384/96 by granting the producer subject to an anti-dumping investigation a period of less than 10 days to comment on the additional final disclosure document. However, that fact cannot, in itself, lead to annulment of the contested regulation. It is also necessary to establish that the granting of a period shorter than the prescribed period was actually capable of affecting its rights of defence in the procedure in question.

(see para. 124)

5.      The adoption of anti-dumping duties is not a penalty for earlier behaviour but a protective and preventive measure against unfair competition resulting from dumping practices. In order to be able to determine the anti-dumping duties appropriate for protecting the Community industry against dumping, it is therefore necessary to carry out the investigation on the basis of information which is as recent as possible.

Where the Community institutions find that imports of a product which has until then been subject to quantitative restrictions increase after those restrictions have lapsed, they may take that increase into account for the purposes of their assessment of the injury sustained by the Community industry.

(see paras 133-134)