Case T-409/06

Sun Sang Kong Yuen Shoes Factory (Hui Yang) Corp. Ltd

v

Council of the European Union

(Dumping – Imports of footwear with uppers of leather from China and Vietnam – Market economy treatment – Sampling – Lack of cooperation – Rights of the defence – Injury – Obligation to state reasons)

Summary of the Judgment

1.      Common commercial policy – Protection against dumping – Dumping margin – Determination of the normal value – Use of the information available where the undertaking refuses to cooperate

(Council Regulation No 384/96, Art. 18)

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

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

3.      Community law – Principles – Rights of the defence – Observance thereof in the context of administrative proceedings – Antidumping – Obligation of the institutions to keep the undertakings concerned informed – Additional final disclosure document

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

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

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

5.      Common commercial policy – Protection against dumping – Dumping margin – Comparison between the normal value and the export price

(Council Regulation No384/96, Art. 2(10))

1.      Article 18 of the basic anti-dumping Regulation No 384/96 constitutes the implementation into Community law of the content of paragraph 6.8 of, and Annex II to the Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade 1994, and must be interpreted in the light thereof in so far as possible. In that regard, it should be noted that recourse to the facts available is justified where an undertaking refuses to cooperate or where it supplies false or misleading information, the second sentence of Article 18(1) of the basic regulation not requiring that conduct be intentional.

The degree of effort displayed by an interested party in submitting certain information does not necessarily reflect the substantive quality of the information submitted, and in any case is not the only determinant thereof. Thus, where the requested information is not ultimately obtained, the Commission is entitled to resort to the facts available in respect of the requested information.

That assessment is supported by Article 18(3) of the basic regulation, according to which, where the information submitted is not ideal in all respects it should nevertheless not be disregarded, provided that it is not such as to cause undue difficulty in arriving at a reasonably accurate finding and the information is appropriately submitted in good time and is verifiable, and that the party has acted to the best of its ability. The fact of having acted to the best of its ability constitutes, therefore, one of the conditions which must be met before the Commission is bound to take deficient information into account.

Thus, where a producer subject to an anti-dumping inquiry, despite being in possession of data relating to the total volume of its exports to the Community market, sends inconsistent information to the Commission during the administrative procedure regarding its export sales, it cannot be considered to have acted to the best of its ability. In those circumstances, the Commission is not obliged to take into account, for the purposes of calculating the export price, lists of sales on the Community market, since use of all the information contained therein would necessarily have led to an incorrect result.

(see paras 103-106)

2.      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 allegation concerning the existence of dumping and the resultant injury.

In that context, the incomplete nature of the final disclosure requested by the parties under Article 20(2) of the basic anti-dumping Regulation No 384/96 does not render a regulation imposing definitive anti-dumping duties unlawful unless, on account of that omission, the interested parties were not in a position properly to defend their interests. That would be the case where the omission concerns facts or considerations different from those used in relation to the provisional measures, to which particular attention must be paid in final disclosure, pursuant to that provision. That would also be the case where the omission concerns facts or considerations different from those which form the basis of a decision taken by the Commission or the Council, subsequent to final disclosure being made, as is apparent from the last sentence of Article 20(4) of the said basic regulation.

The fact that the Commission amended its analysis following comments made by the interested parties on the final disclosure document does not however, in itself, constitute a breach of the rights of the defence. As is clear from the last sentence of Article 20(4) of the basic regulation, the final disclosure document does not prejudice any subsequent decision which may be taken by the Commission or the Council. That provision limits itself to imposing the duty on the Commission to communicate, as soon as possible, the facts and considerations which are different to those underpinning its initial approach contained in the final disclosure document. Therefore, in order to determine whether the Commission respected the rights of the parties concerned under the last sentence of Article 20(4) of the basic regulation, it is still necessary to ascertain whether the Commission sent to them the facts and considerations relied on for the purposes of the new analysis on the injury and on the type of measures required to eliminate that injury, to the extent that those facts and considerations differ from those relied on in the final disclosure document.

(see paras 134-135, 140-141)

3.      By granting a producer subject to an anti-dumping inquiry a period of time less than 10 days to comment on the additional final disclosure document, the Commission breached Article 20(5) of the basic anti-dumping Regulation No 384/96. Nevertheless, that fact cannot, in itself, lead to annulment of the contested regulation. It is also necessary to establish whether the fact of having a period of time shorter than the lawful period was actually capable of affecting the applicant’s rights of defence in the procedure in question.

(see para. 147)

4.      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 Community institutions find that the 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 suffered by the Community industry.

(see paras 157-158)

5.      In the context of an anti-dumping proceeding, where the product concerned contains a wide range of goods which have considerable differences with regard to their characteristics and their prices, it may prove necessary to group them under categories which are more or less homogenous. The purpose of that grouping is to allow for a fair comparison between comparable products and thereby to avoid an incorrect calculation of the dumping and injury margins owing to unsuitable comparisons.

(see para. 172)