JUDGMENT OF THE GENERAL COURT (Tenth Chamber)
10 April 2024 (*)
(Protective measures – Steel products market – Imports of certain steel products – Economic Partnership Agreement – Southern African Development Community – Exemption clause – Implementing Regulation (EU) 2022/664 – Initiation of an investigation – Rights of the defence – Principle of good administration – Obligation to state reasons – Manifest error of assessment)
In Case T‑445/22,
Columbus Stainless (Pty) Ltd, established in Middelburg (South Africa), represented by L. Catrain González and F. Pili, lawyers,
applicant,
v
European Commission, represented by G. Luengo and F. Marisi, acting as Agents,
defendant,
THE GENERAL COURT (Tenth Chamber),
composed of O. Porchia, President, M. Jaeger (Rapporteur) and L. Madise, Judges,
Registrar: V. Di Bucci,
having regard to the written part of the procedure,
having regard to the fact that no request for a hearing was submitted by the parties within three weeks after service of notification of the close of the written part of the procedure, and having decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of the Rules of Procedure of the General Court,
gives the following
Judgment
1 By its action under Article 263 TFEU, the applicant, Columbus Stainless (Pty) Ltd, seeks annulment of Commission Implementing Regulation (EU) 2022/664 of 21 April 2022 amending Implementing Regulation (EU) 2019/159 imposing a definitive safeguard measure against imports of certain steel products (OJ 2022 L 121, p. 12; ‘the contested regulation’), in its entirety or in so far as it applies to the applicant.
Background to the dispute
2 The applicant is an exporting producer of certain steel products established in South Africa.
The exemption clause of the Economic Partnership Agreement signed between the European Union and its Member States, of the one part, and some of the SADC EPA States, of the other part
3 On 19 June 2016, the European Union and its Member States, of the one part, and some States of the Southern African Development Community (‘SADC’), namely the Republic of South Africa, the Republic of Botswana, the Kingdom of Lesotho, the Republic of Mozambique, the Republic of Namibia and the Kingdom of Swaziland (now the Kingdom of Eswatini), of the other part, signed an Economic Partnership Agreement (OJ 2016 L 250, p. 3; ‘SADC EPA’). On 10 October 2016, the SADC EPA entered into force on a provisional basis, except between the European Union and the Republic of Mozambique.
4 Article 33 of the SADC EPA provided for the possibility of excluding imports from the SADC States concerned from EU safeguard measures for a maximum of five years from the date of entry into force of that agreement (‘the exemption clause’). The exemption clause, thus, expired on 10 October 2021.
Imposition of a safeguard measure
5 On 26 March 2018, as a response to the risk of diversion of exports resulting from the import duties imposed by the United States of America under Section 232 of the Trade Expansion Act, the European Commission published a notice of initiation of a safeguard investigation under Article 5 of Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports (OJ 2015 L 83, p. 16; ‘the Basic Safeguard Regulation’), concerning imports of 26 categories of steel products. In that notice, the Commission invited interested parties to submit their observations.
6 The initiation of that investigation was notified to the Committee on Safeguards of the World Trade Organization (WTO) in accordance with Article 12(1)(a) of the Agreement on Safeguards.
7 On 26 April 2018, the applicant sent its comments to the Commission, responding to the questionnaire addressed to exporting producers.
8 Taking the view that the Union steel industry was faced with a threat of serious injury, the Commission adopted Implementing Regulation (EU) 2018/1013 of 17 July 2018 imposing provisional safeguard measures with regard to imports of certain steel products (OJ 2018 L 181, p. 39; ‘the regulation imposing provisional safeguard measures’), imposing provisional safeguard measures against imports of 23 steel product categories. Its scope covered the imports of the applicant in the European Union.
9 On 31 July 2018, the applicant sent a letter to the Commission seeking confirmation that, first, by reason of the exemption clause, the regulation imposing provisional safeguard measures did not apply to imports originating in South Africa and, secondly, that it was not necessary for it to submit comments on that regulation.
10 On 8 August 2018, the applicant provided its comments to the Commission on the regulation imposing provisional safeguard measures.
11 By letter sent on 19 September 2018 to the Commission, the Minister of Trade and Industry of South Africa sought the exclusion of imports from South Africa from the scope of the regulation imposing provisional safeguard measures.
12 On 13 November 2018, the Commission excluded the Republic of South Africa from the scope of the provisional measures by adopting Implementing Regulation (EU) 2018/1712 amending the regulation imposing provisional safeguard measures (OJ 2018 L 286, p. 17).
13 On 31 January 2019, the Commission adopted Implementing Regulation (EU) 2019/159 imposing definitive safeguard measures against imports of certain steel products (OJ 2019 L 31, p. 27; ‘the regulation imposing definitive safeguard measures’), for a period of three years expiring on 30 June 2021. The Republic of South Africa was not included within the scope of the regulation imposing definitive safeguard measures.
The main adaptations and the prolongation of the safeguard measure at issue
14 On 2 September 2019, the Commission adopted Implementing Regulation (EU) 2019/1382 amending certain Regulations imposing anti-dumping or anti-subsidy measures on certain steel products subject to safeguard measures (OJ 2019 L 227, p. 1), in order to take into account the potential combined effect of anti-dumping or anti-subsidy measures and the safeguard measures. The adjustments that that regulation made did not call into question the necessity of maintaining the safeguard measure at issue.
15 On 17 May 2019, the Commission published the notice of initiation concerning a review of the safeguard measures applicable to imports of certain steel products (OJ 2019 C 169, p. 9).
16 Following the first interim review of safeguard measures, the Commission adopted Implementing Regulation (EU) 2019/1590 of 26 September 2019 amending the regulation imposing definitive safeguard measures (OJ 2019 L 248, p. 28). The safeguard measure at issue was, thus, maintained, subject to a few adjustments, in particular to tariff-rate quota levels.
17 On 14 February 2020, the Commission published the notice of initiation concerning a review of the safeguard measures applicable to imports of certain steel products (OJ 2020 C 51, p. 21).
18 Following the second interim review of safeguard measures, the Commission adopted Implementing Regulation (EU) 2020/894 of 29 June 2020 amending the regulation imposing definitive safeguard measures (OJ 2020 L 206, p. 27). Once again, the safeguard measure at issue was maintained and only a few adjustments, in particular to tariff-rate quota levels, were made.
19 Following the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union, the Commission adopted the safeguard measure at issue by adopting Implementing Regulation (EU) 2020/2037 of 10 December 2020 amending the regulation imposing definitive safeguard measures (OJ 2020 L 416, p. 32).
20 On 26 February 2021, the Commission published the notice of initiation concerning the possible extension of the safeguard measure applicable to imports of certain steel products (OJ 2021 C 66, p. 50), inviting interested parties to participate in a review investigation and to provide their comments on whether the measures implemented by the regulation imposing definitive safeguard measures should be prolonged.
21 Taking the view that removing the safeguard measures was likely to severely worsen the situation of the Union steel industry, the Commission adopted Implementing Regulation (EU) 2021/1029 of 24 June 2021 amending the regulation imposing definitive safeguard measures to prolong the safeguard measure on imports of certain steel products (OJ 2021 L 225 I, p. 1), by which it prolonged, in particular, the safeguard measure at issue for a new period of three years, namely until 30 June 2024. In applying Implementing Regulation (EU) 2018/1712 (see paragraph 12 above), the Commission excluded imports from, in particular, the SADC EPA States.
22 On 17 December 2021, the Commission published a notice of initiation concerning a review of the safeguard measure applicable to imports of certain steel products (OJ 2021 C 509, p. 12), in order to inform interested parties of the functioning review of the measures provided for to keep its operation adapted to market evolution, inviting interested parties to participate and comment.
23 On 15 March 2022, the Commission adopted Implementing Regulation (EU) 2022/434 amending the regulation imposing definitive safeguard measures (OJ 2022 L 88, p. 181), on account of the import ban on steel products originating in Belarus or Russia.
24 On 21 April 2022, noting that the exemption clause had expired, the Commission adopted the contested regulation covering imports from some SADC EPA States, including the Republic of South Africa, within the scope of the safeguard measure at issue.
25 Following the third interim review of safeguard measures, the Commission adopted Implementing Regulation (EU) 2022/978 of 23 June 2022 amending the regulation imposing definitive safeguard measures (OJ 2022 L 167, p. 58). The earlier safeguard measures, including those applying to the Republic of South Africa, were maintained, subject to a few adjustments.
Forms of order sought
26 The applicant claims that the Court should:
– annul the contested regulation in its entirety or in so far as it affects the applicant;
– order the Commission to pay the costs.
27 The Commission contends that the Court should:
– dismiss the action as unfounded;
– order the applicant to pay the costs.
Law
28 In support of its action, the applicant puts forward three pleas in law.
29 By its first plea, the applicant criticises the Commission for infringing both Articles 4 and 5 of the Basic Safeguard Regulation, as interpreted in the light of Article 3 of the WTO Agreement on Safeguards, and its rights of the defence and the principle of good administration, in failing to, first, publish a notice of initiation inviting interested parties to submit their comments and, secondly, conduct an investigation before adopting the contested regulation.
30 By its second plea, the applicant submits that the contested regulation infringes the obligation to state reasons provided for in Article 296 TFEU by reason of, first, the lack of explanation justifying the failure to apply the procedural requirements relating to the publication of a notice of initiation and the conduct of an investigation and, secondly, the vagueness in the reasoning submitted in support of the substantive conditions being satisfied enabling the inclusion of South African imports within the scope of the safeguard measure at issue.
31 By its third plea, the applicant claims that the Commission committed manifest errors of assessment in its analysis of the conditions imposing a safeguard measure against imports from South Africa.
32 The Commission contends that the action is manifestly unfounded.
The first plea in law, alleging the failure to, first, publish a notice of initiation inviting interested parties to submit their comments and, secondly, conduct an investigation prior to the adoption of the contested regulation
33 In its first plea, the applicant argues that, by neither publishing a notice of initiation inviting interested parties to participate in an investigation nor conducting an investigation before adopting the contested regulation, the Commission infringed both the Basic Safeguard Regulation, as interpreted in the light of the WTO rules, and the applicant’s fundamental rights under EU law.
The first complaint put forward in the first plea, alleging the infringement of Articles 4 and 5 of the Basic Safeguard Regulation, as interpreted in the light of Article 3 of the WTO Agreement on Safeguards
34 Article 4 of the Basic Safeguard Regulation provides as follows:
‘1. Without prejudice to Article 7, the Union investigation procedure shall be implemented before any safeguard measure is applied.
2. Using as a basis the factors referred to in Article 9, the investigation shall seek to determine whether imports of the product in question are causing or threatening to cause serious injury to the Union producers concerned.
…’
35 Article 5 of the Basic Safeguard Regulation provides as follows:
‘1. Where it is apparent to the Commission that there is sufficient evidence to justify the initiation of an investigation, the Commission shall initiate an investigation within 1 month of the date of receipt of information from a Member State and publish a notice in the Official Journal of the European Union. That notice shall:
(a) give a summary of the information received, and require that all relevant information is to be communicated to the Commission;
(b) state the period within which interested parties may make known their views in writing and submit information, if such views and information are to be taken into account during the investigation;
(c) state the period within which interested parties may apply to be heard orally by the Commission in accordance with paragraph 4.
The Commission shall commence the investigation, acting in cooperation with the Member States.
The Commission shall provide information to the Member States concerning its analysis of the information normally within 21 days of the date on which the information is provided to the Commission.
2. The Commission shall seek all information it deems necessary and, where it considers it appropriate, after having informed the Member States, endeavour to check that information with importers, traders, agents, producers, trade associations and organisations.
The Commission shall be assisted in this task by staff of the Member State on whose territory those checks are being carried out, provided that that Member State so wishes.
3. The Member States shall supply the Commission, at its request and following procedures laid down by it, with the information at their disposal on developments in the market of the product being investigated.
4. Interested parties which have come forward pursuant to the first subparagraph of paragraph 1 and representatives of the exporting country may, upon written request, inspect all information made available to the Commission in connection with the investigation other than internal documents prepared by the authorities of the Union or its Member States, provided that that information is relevant to the presentation of their case and not confidential within the meaning of Article 8 and that it is used by the Commission in the investigation.
Interested parties which have come forward may communicate their views on the information in question to the Commission. Those views may be taken into consideration where they are backed by sufficient evidence.
5. The Commission may hear the interested parties. Such parties must be heard where they have made a written application within the period laid down in the notice published in the Official Journal of the European Union, showing that they are actually likely to be affected by the outcome of the investigation and that there are special reasons for them to be heard orally.
6. When information is not supplied within the time limits set by this Regulation or by the Commission pursuant to this Regulation, or the investigation is significantly impeded, findings may be made on the basis of the data available. Where the Commission finds that any interested party or third party has supplied it with false or misleading information, it shall disregard that information and may make use of facts available.
7. Where it appears to the Commission that there is insufficient evidence to justify an investigation, it shall inform the Member States of its decision within 1 month of the date of receipt of the information from the Member States.’
36 Article 3 of the WTO Agreement on Safeguards provides as follows:
‘1. A Member may apply a safeguard measure only following an investigation by the competent authorities of that Member pursuant to procedures previously established and made public in consonance with Article X of [the General Agreement on Tariffs and Trade (GATT)]. This investigation shall include reasonable public notice to all interested parties and public hearings or other appropriate means in which importers, exporters and other interested parties could present evidence and their views, including the opportunity to respond to the presentations of other parties and to submit their views, inter alia, as to whether or not the application of a safeguard measure would be in the public interest. The competent authorities shall publish a report setting forth their findings and reasoned conclusions reached on all pertinent issues of fact and law.
2. Any information which is by nature confidential or which is provided on a confidential basis shall, upon cause being shown, be treated as such by the competent authorities. Such information shall not be disclosed without permission of the party submitting it. Parties providing confidential information may be requested to furnish non-confidential summaries thereof or, if such parties indicate that such information cannot be summarised, the reasons why a summary cannot be provided. However, if the competent authorities find that a request for confidentiality is not warranted and if the party concerned is either unwilling to make the information public or to authorise its disclosure in generalised or summary form, the authorities may disregard such information unless it can be demonstrated to their satisfaction from appropriate sources that the information is correct.’
37 In the present case, the contested regulation was adopted, in particular, on the basis of Article 20 of the Basic Safeguard Regulation, which provides as follows:
‘1. While any … safeguard measure applied in accordance with [Chapter V] is in operation, the Commission may, either at the request of a Member State or on its own initiative, and no later than the mid-point of the period of application of measures of a duration exceeding 3 years:
(a) examine the effects of the measure;
(b) determine whether and in what manner it is appropriate to accelerate the pace of liberalisation;
(c) ascertain whether application of the measure is still necessary.
Where the Commission considers that the application of the measure is still necessary, it shall inform the Member States accordingly.
2. Where the Commission considers that any … safeguard measure referred to in Articles … 15, 16 and 17 should be revoked or amended, it shall, acting in accordance with the examination procedure referred to in Article 3(3), revoke or amend the measure.
…’
38 The applicant considers that Articles 4 and 5 of the Basic Safeguard Regulation should have governed the adoption procedure of the contested regulation.
39 In the first place, the applicant takes the view that it is apparent from the wording of Article 4(1) of the Basic Safeguard Regulation that it applies in the event of an extension of the scope of a pre-existing safeguard measure.
40 According to the applicant, first, Article 4 of the Basic Safeguard Regulation covers ‘any’ safeguard measures, whether new or existing, and, secondly, the contested regulation is an ‘application’ of a safeguard measure as referred to in that provision.
41 However, given its general nature, the literal interpretation of Article 4 of the Basic Safeguard Regulation does not make it possible, in the present case, to conclude with certainty and definitively that the approach proposed by the applicant is well founded.
42 In that regard and in the second place, the applicant considers that its position is strengthened by factors drawn from the context connected with the Basic Safeguard Regulation.
43 First, the applicant takes the view that an interpretation of Article 4 of the Basic Safeguard Regulation consisting in excluding its application to situations extending existing safeguard measures is contrary to the wording of Article 4(1) of that regulation, as interpreted in the light of recital 14 thereof.
44 However, as the wording of recital 14 of the Basic Safeguard Regulation is similar and therefore lacking in added value compared to the wording of Article 4(1) of that regulation, the applicant’s argument is irrelevant.
45 Secondly, in order to demonstrate the importance of the opportunity for interested parties to submit their comments during the investigation before applying a measure to protect trade, the applicant relies on other regulatory contexts relating to that type of measure and stresses the importance of (i) hearing the interested parties when the Commission must determine the Union interest and (ii) initiating an investigation before extending the scope of such a measure.
46 First of all, the applicant highlights the recognition, in the case-law, in order to determine the Union interest, of the importance of permitting, in an anti-dumping investigation before adopting an anti-dumping measure, interested parties to make their views known, in accordance with Article 21(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ 2016 L 176, p. 21; ‘the Basic Anti-dumping Regulation’).
47 Next, the applicant notes that, under Article 11(5) of the Basic Anti-dumping Regulation, any review requires the initiation of an investigation.
48 Lastly, the applicant relies on Article 13(3) of the Basic Anti-dumping Regulation in order to note that, in the event of extending an anti-dumping measure to new countries, an investigation is initiated.
49 Similarly, the applicant cites Article 23(4) of Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (OJ 2016 L 176, p. 55), which is, for countervailing measures, the provision mirroring Article 13(3) of the Basic Anti-dumping Regulation.
50 It is apparent from recital 11 of the Basic Safeguard Regulation that determining the interest of the Union in assessing the need to adopt a safeguard measure requires account to be taken of all the interests at stake.
51 Nevertheless, it is appropriate to note, as the Commission did, that the Basic Safeguard Regulation does not contain a provision similar to Article 11(5) of the Basic Anti-dumping Regulation, which permits the inference in relation to reviews of safeguard measures that the EU legislature did not require a prior investigation to be initiated automatically.
52 In addition, it should be noted that the two other provisions put forward by the applicant concern situations relating to cases of circumvention of anti-dumping duties or countervailing duties, in which the initiation of an investigation appears justified in the light of the suspicion expressed by the Commission regarding the economic operators concerned.
53 That is not the case in a situation such as in the present case, which relates to an extension of the scope of the safeguard measure arising from the expiry of an exemption clause. In accordance with recital 2 of the Basic Safeguard Regulation, the common commercial policy must be based on uniform principles. Accordingly, the fact that, in the context of circumvention, the legislature expressly provided for the initiation of an investigation cannot be an argument used to support the application mutatis mutandis of such a procedure in a situation where that context of suspicion is lacking and where it is only necessary to draw the appropriate conclusions from the expiry of the period of imposition of an exemption clause.
54 Thirdly, the applicant notes the relevance of WTO rules in the interpretation of provisions of the Basic Safeguard Regulation and states that Article 3(1) of the WTO Agreement on Safeguards requires an investigation to be conducted, consisting of publishing a report intended to inform interested parties before imposing a safeguard measure.
55 However, the applicant refers to WTO law to interpret Articles 4 and 5 of the Basic Safeguard Regulation without developing its argument. The applicant merely cites Article 3(1) of the WTO Agreement on Safeguards.
56 In addition, that argument is irrelevant, in so far as Article 3(1) of the WTO Agreement on Safeguards uses the same wording as that of Article 4 of the Basic Safeguard Regulation. Accordingly, relying on the WTO Agreement on Safeguards fails to adduce additional evidence likely to call into question the finding in paragraph 41 above.
57 Fourthly, the applicant claims that the substance over form principle makes it necessary to interpret the term ‘application’, in Article 4(1) of the Basic Safeguard Regulation, as not only covering the new safeguard measures but also those already in force and for which the scope is extended, as in the present case. According to the applicant, for imports from South Africa, the effects of the contested regulation are the same as those arising from a regulation imposing new safeguard measures.
58 In accordance with the substance over form principle, in order to ascertain whether a measure which has been challenged produces legal effects that are binding on the applicant and are capable of affecting his or her interests, and, accordingly, is a reviewable act, it is necessary to look to its substance (see judgment of 30 September 2003, Eurocoton and Others v Council, C‑76/01 P, EU:C:2003:511, paragraphs 54 and 56 and the case-law cited).
59 It follows from that case-law that the principle referred to by the applicant concerns, at first sight, access to the courts. In the present case, neither the contested regulation being open to challenge nor the admissibility of the present action are put in question.
60 Moreover, by reason of its very nature, the substance of a safeguard measure is erga omnes. Consequently, by definition, a safeguard measure refers to imports in a general manner and irrespective of the country from where the exports derive. It follows that a safeguard measure does not target a priori imports from one particular country. Accordingly, the term ‘application’ in Article 4(1) of the Basic Safeguard Regulation should be understood as referring to the implementation of such a measure against any imports of the product concerned in the European Union, irrespective of its source. An exemption, which, moreover, is temporary, for certain countries does not call that nature into question. Accordingly, waiving such an exemption, which only extends the scope of the safeguard measure at issue to a number of countries, is not an application within the meaning of Article 4(1) of the Basic Safeguard Regulation.
61 Furthermore, it follows from that nature that the treatment of a safeguard measure as being ‘new’ must be assessed in the light of the termination of a pre-existing safeguard measure. The definition of newness implies a temporal and historical dimension, creating an interdependence between two measures. That interpretation is confirmed by the wording of Article 21(1) of the Basic Safeguard Regulation, according to which no further measure may be applied to the import of a product that has already been subject to a previous safeguard measure, until a period equal to the duration of the previous measure has elapsed.
62 Consequently, the applicant’s argument should be rejected as irrelevant.
63 Fifthly, the applicant relies on the principle of conformity, applied in the light of the Charter of Fundamental Rights of the European Union, to interpret the meaning of Articles 4 and 5 of the Basic Safeguard Regulation. According to the applicant, those provisions of secondary law cannot be interpreted in a manner that leads to the infringement of primary law. Such would be the case if that interpretation sought to limit, without justification, the fundamental rights that it enjoys, namely the rights of the defence and the right to good administration.
64 In so far as that argument is essentially the same as the second complaint put forward in the first plea, it will be examined in the light of that plea.
65 In the third place, the applicant considers that, first, the failure to publish a notice of initiation inviting the interested parties to submit their comments, and, secondly, not conducting an investigation before adopting the contested regulation undermines the substance of the Basic Safeguard Regulation and Articles 4 and 5 thereof, as interpreted in the light of Article 3(1) of the WTO Agreement on Safeguards.
66 In the first place, the applicant notes the extraordinary nature of the safeguard measures, which results in the need for a strict legal framework in terms of both formal and substantive conditions that should be complied with for their implementation.
67 In that regard, it considers that an interpretation of Articles 4 and 5 of the Basic Safeguard Regulation that consists in excluding its application to situations extending existing safeguard measures would reduce its effectiveness.
68 According to the applicant, the validation of the approach followed by the Commission in the present case results in the Commission being given a blank cheque to circumvent the requirements set out in Articles 4 and 5 of the Basic Safeguard Regulation and the rights of interested parties. More specifically, the Commission could extend the scope of an existing safeguard measure without conducting a prior investigation and without allowing interested parties to make known their point of view.
69 However, it should be noted that, by the Basic Safeguard Regulation, the legislature implements, in EU law, the principle of the elimination of safeguard measures, as is apparent from the WTO Agreement on Safeguards, and the willingness to clarify and reinforce the disciplines of the GATT, in particular those of Article XIX thereof, relating to urgent measures concerning the importation of particular products.
70 Thus, in accordance with recitals 12 and 13 of the Basic Safeguard Regulation, the Commission may consider safeguard measures against a member of the WTO ‘only if’ cumulative conditions are satisfied, which must be defined according to ‘precise criteria’.
71 In addition, the very nature of a safeguard measure is that of an initial safety net. The Commission cannot choose the origin of imports into the European Union for which the safeguard measure concerned is to apply and any exclusion must be justified on a clear legal basis, such as the existence of an obligation in an agreement concluded between the European Union and third countries (Article 24(1) of the Basic Safeguard Regulation) or the application of the derogation intended for developing countries (Article 18 of the Basic Safeguard Regulation). In the present case, the contested regulation merely draws the appropriate conclusions from the expiry of the exemption clause that was envisaged for a period of five years in the SADC EPA.
72 Lastly, in accordance with Article 20 of the Basic Safeguard Regulation, the Commission may only amend an existing safeguard measure by complying with the framework provided for by the examination procedure set out in Article 5 of Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (OJ 2011 L 55, p. 13).
73 In the present case, it is apparent from recital 30 of the contested regulation that the Commission complied with that procedure.
74 Accordingly, the applicant’s argument concerning the risk of arbitrariness is unfounded.
75 In the second place, the applicant considers that making the guarantee of the rights of the defence provided for in Articles 4 and 5 of the Basic Safeguard Regulation dependent on the new or existing nature of a safeguard measure would lead to discriminatory treatment of economic operators, which are, whatever their nature, affected in the same manner.
76 First, contrary to the applicant’s claims, the contested regulation is not a new safeguard measure simply because it imposes restrictions on imports from South Africa.
77 By the contested regulation, the Commission directly amended only a single factor, namely the scope ratione loci and, consequently, the scope ratione personae, of the safeguard measure at issue. In that regard, that regulation constitutes an amendment of an existing safeguard measure within the meaning of Article 20 of the Basic Safeguard Regulation.
78 That interpretation is supported by Article 21(1) of the Basic Safeguard Regulation, in which the phrase ‘further measure’ is expressly referred to and from which it is apparent that ‘newness’ is assessed in the light of the termination of a previous measure.
79 Secondly, it can be noted that, a contrario, it is apparent from Article 19(3) of the Basic Safeguard Regulation that, during an examination seeking to prolong a safeguard measure at the end of the initial period, the legislature expressly indicated that the requirements were to be the same as those applicable to the adoption of an initial safeguard measure.
80 In the light of the foregoing, the application in the present case of the requirements provided for in the initial adoption of a safeguard measure goes against the willingness of the legislature to mark a difference in rules between a prolongation at the end of the initial period of application of a measure and an amendment made during that period.
81 Accordingly, it must be concluded that the procedure adopting the contested regulation, governed by Article 20 of the Basic Safeguard Regulation, does not flow from the application of Articles 4 and 5 of that regulation.
82 In that context, the applicant’s argument that the Commission reassessed each of the substantive conditions for applying the safeguard measure at issue with regard to the SADC EPA States (except for the Republic of Mozambique) and, accordingly, could not also disregard the application of the formal requirements applying to procedures adopting that type of measure, such as those set out in the Basic Safeguard Regulation, must be rejected.
83 Accordingly, the complaint alleging infringement of Articles 4 and 5 of the Basic Safeguard Regulation must be rejected, without it being necessary to rule on the merits of the other arguments put forward by the applicant, in particular those relating to the nature of the contested regulation and those based on Commission practice.
The second complaint put forward in the first plea, alleging infringement of the rights of the defence and the principle of good administration
84 In the first place, the applicant reiterates the relevance of observing, in the sphere of measures to protect trade, first, the rights of the defence as a fundamental principle of EU law, and, secondly, the right to good administration, as guaranteed by Article 41 of the Charter of Fundamental Rights.
85 In the second place, the applicant considers that, in the present case, by not publishing a notice of initiation and not conducting an investigation prior to the adoption of the contested regulation, the Commission infringed those rights, in so far as the applicant was neither authorised to exercise its rights of the defence nor to make known its point of view as regards observing the principle of good administration.
86 In that regard, the applicant adds, in its reply, that, contrary to that put forward by the Commission, the notification to the WTO Committee on Safeguards cannot counteract either the failure to publish a notice of initiation inviting the interested parties to submit their comments or the failure to carry out a prior investigation.
87 In that respect, first, the applicant notes that the procedure governing that notification, provided for in Article 12 of the WTO Agreement on Safeguards, only concerns WTO members. Involving interested parties is, according to the applicant, organised in accordance with Article 3(1) of that agreement, as transposed by Article 5 of the Basic Safeguard Regulation, which facilitates the submission of comments in an investigation.
88 Secondly, the applicant disputes the Commission’s conflation of a formal procedure for participation in the process of adopting the contested regulation with the opportunity for any person to submit spontaneous submissions by placing them on the same level.
89 The Commission contests the merits of the applicant’s arguments.
90 As a preliminary point, it should be borne in mind that, first, according to settled case-law, respect for the rights of the defence is, in all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of EU law which must be guaranteed even in the absence of any rules governing the proceedings in question (see judgment of 14 December 2022, PT Ciliandra Perkasa v Commission, T‑138/20, not published, EU:T:2022:810, paragraph 221 and the case-law cited) and, secondly, that although the applicant cannot be required to show that the Commission’s decision would have been different in the absence of the procedural irregularity in question, but simply that such a possibility cannot be totally ruled out, since that party would have been better able to defend itself had there been no irregularity, the fact remains that the existence of an irregularity relating to the rights of the defence can result in the annulment of the measure in question only where there is a possibility that, due to that irregularity, the administrative procedure could have resulted in a different outcome and thus in fact adversely affected the rights of the defence (see judgment of 5 May 2022, Zhejiang Jiuli Hi-Tech Metals v Commission, C‑718/20 P, EU:C:2022:362, paragraph 49 and the case-law cited).
91 In the present case, the applicant merely put forward arguments seeking to demonstrate the failure to comply with its right to be heard, constituting an infringement of its rights of the defence and of its right to good administration, without providing an explanation or an indication as regards the consequences that that alleged failure could have had.
92 It must be observed that the volume of imports considered in the contested regulation (Tables 1 and 2), including the imports from countries hitherto exempted from the safeguard measures on account of the SADC EPA, and the corresponding import volumes (Tables 2 and 3) taken into account in the regulation imposing definitive safeguard measures, that were not applied to the applicant under that temporary exemption, show very minimal differences, albeit upwards. For the remainder, the factors set out in the reasoning of the contested regulation indicate, in essence, that the conditions present when adopting the regulation imposing definitive safeguard measures are still ongoing. Next, it is stated therein that only South Africa, among the developing country WTO members, exceeds the thresholds below which an exemption must be given on that basis and that the imports from that country must therefore be subject to safeguard measures for certain product categories.
93 In those circumstances, with the apparent lack of significant changes in relation to the context of adopting the regulation imposing definitive safeguard measures and in the absence of any clarification provided by the applicant as to the consequences that the lack of comments on its part could have had for the Commission’s assessment prior to adopting the contested regulation, or even any indication concerning the aspects on which it based its comments, it must be held that the applicant has not established that any infringement of its rights of the defence could have had an impact on the content of that regulation.
94 Therefore, on the basis of the case-law recalled in paragraph 90 above, the second complaint must be rejected as unfounded, without it being necessary to rule on the merits of the line of argument alleging, first, infringement of the applicant’s rights of the defence and, secondly, infringement of the right to good administration.
95 Since the first and second complaints have been rejected, it is necessary to reject the first plea in its entirety.
96 It is necessary at this stage to examine the third plea and, subsequently, the second plea.
The third plea in law, alleging manifest errors committed by the Commission in its assessment of the conditions for imposing a safeguard measure against South African imports
97 By its third plea, the applicant claims that the assessment, by the Commission, of the conditions imposing a safeguard measure against imports from South Africa is based on manifest errors of assessment of the data available.
98 In the first place, the applicant states that the Commission examined whether the substantive conditions applicable in view of the data that it had for the period from 1 January 2013 to 30 June 2018, which represents the reference period of the regulation imposing definitive safeguard measures, were satisfied.
99 First, the applicant considers that, by so doing, the Commission committed a manifest error of assessment of the facts, in so far as it relied on outdated data whereas it should have carried out its analysis in the light of up-to-date data so as to reflect the situation existing at the time of the application of the safeguard measure at issue by the contested regulation.
100 Secondly, the applicant submits that the Commission’s approach constitutes a breach of the principle of parallelism. It states that the relevance of the application of the safeguard measure at issue was examined in the light of data relating to the period from 2018 to 2020 in the context of Implementing Regulation 2021/1029, applicable since 1 July 2021, whereas, in the contested regulation, the reference period was from 2013 to 2018.
101 In the second place, the applicant criticises the Commission for not excluding, in the contested regulation, South African imports to the United Kingdom when that State had not been part of the European Union since 31 January 2020.
102 The Commission disputes the merits of the applicant’s arguments.
103 According to settled case-law, in order to establish that an EU institution committed a manifest error of assessment which would justify the annulment of a measure, it is for the applicant to adduce sufficient evidence to render implausible the assessments of the facts in that measure (see, to that effect, judgment of 3 December 2019, Yieh United Steel v Commission, T‑607/15, EU:T:2019:831, paragraph 110 and the case-law cited).
104 Moreover, an error in the reasoning or method of the author of the contested measure does not lead to the annulment of that measure if, in the specific circumstances of the case, that error could not have had a decisive influence on the outcome (see judgment of 20 September 2019, Jinan Meide Casting v Commission, T‑650/17, EU:T:2019:644, paragraph 348 (not published) and the case-law cited).
105 In the present case, the applicant did not explain how the more recent data taken into account in Implementing Regulation 2021/1029, which are accessible by it, or the failure to take into account imports to the United Kingdom from South Africa, led to a conclusion other than that in the contested regulation.
106 In fact, the applicant does not address that aspect in either the application or the reply, which is nonetheless essential to demonstrating the merits of its plea. The applicant merely submits arguments seeking to call into question the assessments of the Commission and the method followed by the Commission without providing explanations or further indications as to the possible consequences of its claims.
107 In any event, as stated in paragraph 92 above, it should be noted that, in the absence of explanations to the contrary, it appears that the data taken into account, first, in the regulation imposing definitive safeguard measures and, secondly, in the contested regulation do not contain significant differences enabling the conclusion to be drawn that there is sufficient evidence to render implausible the assessments of the facts in the contested regulation.
108 Accordingly, without it being necessary to adjudicate on the existence of manifest errors committed by the Commission in its assessment of the conditions for imposing a safeguard measure against South African imports, the third plea must be rejected as unfounded.
The second plea in law, alleging infringement, by the Commission, of the obligation to state reasons provided for in Article 296 TFEU
109 By its second plea, the applicant submits that, by adopting the contested regulation, the Commission infringed the obligation to state reasons placed on it pursuant to Article 296 TFEU.
110 In the first place, the applicant claims that, if the Commission were able to disregard the procedural requirements relating to the publication of a notice of initiation and the conduct of an investigation, which it disputes, the Commission should have set out, nevertheless, its reasons for doing so in the contested regulation.
111 In the second place, the applicant considers unintelligible the Commission’s reasoning that including the South African imports within the scope of the regulation imposing definitive safeguard measures is justified on the basis that the substantive conditions required to apply the safeguard measure at issue are satisfied.
112 The Commission disputes the merits of the applicant’s arguments.
113 It is settled case‑law that the statement of reasons required by Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted that measure in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to carry out its review (see judgments of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 87 and the case-law cited, and of 21 June 2023, Hangzhou Dingsheng Industrial Group and Others v Commission, T‑748/21, EU:T:2023:346, paragraph 105 and the case-law cited).
114 That requirement must be appraised by reference to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgments of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 88 and the case-law cited, and of 21 June 2023, Hangzhou Dingsheng Industrial Group and Others v Commission, T‑748/21, EU:T:2023:346, paragraph 106 and the case-law cited).
115 Similarly, in the case of a regulation, the statement of reasons may be limited to indicating the general situation which led to its adoption, on the one hand, and the general objectives which it is intended to achieve, on the other. Consequently, it is not possible to require that the EU institutions should set out the various facts, which may be very numerous and complex, on the basis of which the regulation was adopted, or a fortiori that they should provide a more or less complete evaluation of those facts (see judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 89 and the case-law cited).
116 It is in the light of those principles that the merits of the second plea in law must be assessed.
117 The line of argument put forward by the applicant in its second plea, relating to the infringement of the obligation to state reasons placed on the Commission under Article 296 TFEU, is divided into two parts.
118 By the first part of the second plea, the applicant criticises, in essence, the Commission for failing to provide a statement of reasons and, in particular, for not clarifying the reasons why it neither published a notice inviting the interested parties to make known their point of view nor initiated an investigation (see paragraph 110 above). In that regard, the applicant submits, without substantiating the point, that ‘even assuming that the Commission was entitled to proceed in such a manner …, it should have explained why an investigation was unnecessary’.
119 Having regard to the considerations set out in paragraphs 113 to 115 above, it must be held that the Commission did not have to provide a statement of reasons for specifically choosing not to have an investigation among interested parties prior to the adoption of the contested regulation, the statement of reasons required under Article 296 TFEU above all seeking to make known the reasons for the measure and not the methods used.
120 Accordingly, the first part of the second plea in law must be rejected.
121 By the second part of the second plea, the applicant criticises, in essence, the Commission for an inadequate statement of reasons and, more particularly, for the lack of clarity of the reasoning that resulted in confirming the validity of its findings as to the question of whether the criteria relating to the unforeseen developments were fulfilled, namely the threat of serious injury, causation and the Union interest, when the analysis carried out in the contested regulation was based on outdated data (see paragraph 111 above).
122 In that regard, first, the complaint set out by the applicant concerns a failure to understand the method followed by the Commission. According to the applicant, ‘the Commission reasoning is incomprehensible, considering that the [regulation imposing definitive safeguard measures] did not (and could not) assess the impact of South African imports because they were not within [its] scope’.
123 Several provisions of the contested regulation contain explanations concerning both the path that resulted in the Commission applying that analytical method and its application. Accordingly, the following are referred to therein:
– in recital 6, the reason for the need to include certain States previously excluded from the scope of the safeguard measure at issue (namely the expiry of the exemption clause);
– in recitals 7 and 8, the reason for the approach followed by the Commission for imports from the SADC EPA States compared to that followed in the regulation imposing definitive safeguard measures (namely the principle of parallelism);
– in recitals 9 to 11, the application of the method as defined;
– in recital 12, the finding drawn from the analysis arising from the application of the method (namely confirming the finding made in 2019 about the imports increase);
– in recitals 14 and 15, the lack of impact of the inclusion of imports from the SADC EPA States on the findings made in 2019 as regards unforeseen developments;
– in recital 16, the consequences of the finding as regards the imports increase for the assessment of conditions relating to the threat of injury, causation and Union interest.
124 Accordingly, the applicant’s statement relating to the failure to provide sufficient reasons that prevents it from contesting the validity of the safeguard measure at issue is not well-founded. Moreover, by its third plea, the applicant does specifically contest the merits of the Commission’s analysis.
125 Secondly, the deficient statement of reasons claimed by the applicant concerning the ‘way’ in which the product category 10 imports were analysed is also based on the applicant’s failure to understand the method applied.
126 However, the fact that (i) that category of products was absent from the regulation imposing provisional safeguard measures and (ii) the South African imports were not taken into account in the analysis made initially in the regulation imposing definitive safeguard measures does not have any bearing on the analytical method applied by the Commission.
127 In the defence, in the first place, the Commission specifies, first, that the analysis carried out in the contested regulation was performed ‘on the basis of the data available from the original investigation leading to the definitive safeguard measure in 2019 (including the relevant South African imports in the provisional safeguard measure)’ and, secondly, that ‘it used the level of imports from SADC countries from publicly available sources/statistics’.
128 Those sources of information are stated in the contested regulation, generally, under Table 1, entitled ‘Import volume (after inclusion of certain EPA countries) and market share’ and under Table 2, entitled ‘Import volume (after inclusion of certain EPA countries) and market share – per product family’, with the reference ‘Source: Eurostat and 2018 Union Industry questionnaire replies’. In addition, more specifically, recital 28 of the contested regulation in fine specifies that for category 10 South Africa will receive country-specific quotas ‘in line with its historical import volumes’.
129 In the second place, the Commission states that ‘the [c]ontested [r]egulation examined import data concerning product category 10 and, as of [1 April 2022], included South African imports in Annex IV [to] the Definitive Safeguard Measure’.
130 That approach corresponds to the method explained in the contested regulation (see, to that effect, paragraph 123 above). More specifically, concerning the method used for establishing tariff quotas, recitals 20 to 25 of the contested regulation clarify the manner and factors taken into account in the calculation of the quota volume.
131 Accordingly, the manner in which the imports of category 10 products were analysed cannot be the subject of a criticism based on a failure to provide a statement of reasons.
132 Thirdly, the applicant emphasises more specifically a failure to understand the Commission’s assessment of the Union interest.
133 In that regard, in the contested regulation, the Commission assessed that criterion at the same time as the criteria relating to the threat of serious injury and causation, which were the subject of an assessment.
134 It should be borne in mind that, in accordance with the case-law cited in paragraph 115 above, it cannot be required that the Commission provide a full assessment in the context of a regulatory act, such as the contested regulation, that relates to a measure with erga omnes effects.
135 The finding in paragraph 7.3 of the regulation imposing definitive safeguard measures, that ‘the Union interest requires the adoption of definitive safeguard measures under the form of a tariff rate quota, in order to prevent further deterioration in the situation of the Union producers’, cannot be called into question merely on account of including imports from SADC EPA States within the scope of the measure. However, such a finding does not result from an infringement of the obligation to state reasons but from an error of assessment of the condition relating to the Union interests. In that regard, such a complaint is not raised in the third plea, concerning supposed errors of assessment committed by the Commission in the analysis of the substance.
136 Consequently, the second part of the second plea must be rejected and, therefore, the second plea in its entirety.
137 Since none of the pleas in law relied upon by the applicant is well-founded, the action must be dismissed in its entirety.
The request for a measure of organisation of procedure
138 The applicant requests the Court to ask the Commission to provide clarifications as to the timing and content of the discussions that took place between the European Union and the SADC EPA States about the prolongation of the exemption clause.
139 However, in the light of the findings that the Court reached in the analysis of the pleas put forward by the applicant, that request lacks any relevance and must be rejected.
Costs
140 Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
141 Since the applicant has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the Commission.
On those grounds,
THE GENERAL COURT (Tenth Chamber)
hereby:
1. Dismisses the action;
2. Orders Columbus Stainless (Pty) Ltd to pay the costs.
Delivered in open court in Luxembourg on 10 April 2024.
V. Di Bucci | | M. van der Woude |