JUDGMENT OF THE GENERAL COURT (Fourth Chamber)
6 September 2013 (*) (1)
(Dumping – Imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia – Adjustment for currency conversion claimed – Burden of proof – Injury – Definitive anti-dumping duty)
In Case T‑6/12,
Godrej Industries Ltd, established in Mumbai (India),
VVF Ltd, established in Mumbai,
represented by B. Servais, lawyer,
applicants,
v
Council of the European Union, represented by J.-P. Hix, acting as Agent, with G. Berrisch and A. Polcyn, lawyers,
defendant,
supported by
Sasol Olefins & Surfactants GmbH, established in Hamburg (Germany),
Sasol Germany GmbH, established in Hamburg,
represented by V. Akritidis, lawyer, and J. Beck, Solicitor,
and by
European Commission, represented by M. França and A. Stobiecka-Kuik, acting as Agents,
interveners,
APPLICATION for annulment of Council Implementing Regulation (EU) No 1138/2011 of 8 November 2011 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia (OJ 2011 L 293, p. 1),
THE GENERAL COURT (Fourth Chamber),
composed of I. Pelikánová, President, K. Jürimäe and M. van der Woude (Rapporteur), Judges,
Registrar: S. Spryropoulos, Administrator,
having regard to the written procedure and further to the hearing on 24 April 2013,
gives the following
Judgment
Facts giving rise to the dispute
1 On 13 August 2010, the Commission initiated an anti-dumping investigation following a complaint lodged on 30 June 2010 by two European Union (‘EU’) producers, Cognis GmbH and Sasol Olefins & Surfactants GmbH.
2 The investigation of dumping and injury covered the period from 1 July 2009 to 30 June 2010.
3 The applicants, Godrej Industries Ltd (‘Godrej’) and VVF Ltd, cooperated with the Commission in the investigation. The anti-dumping questionnaire was transmitted by the Commission following the initiation of the investigation. The applicants submitted their respective replies to the questionnaire on 27 September 2010.
4 By Regulation (EU) No 446/2011 of 10 May 2011 imposing a provisional anti-dumping duty on imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia (OJ 2011 L 122, p. 47), the Commission imposed a provisional anti-dumping duty on imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia.
5 On 11 May 2011, the Commission made available to the applicants a letter disclosing the essential facts and considerations on the basis of which it considered that the imposition of provisional anti-dumping measures was appropriate (‘the provisional findings’).
6 The applicants submitted comments to the Commission on the provisional findings in, inter alia, correspondence dated 9 June, 1 July and 5 August 2011.
7 The applicants also took part in hearings at the Commission’s premises, in particular a hearing with the hearing officer on 2 August 2011. At those hearings the applicants expressed their views on the provisional findings and submitted arguments concerning certain parts of the provisional regulation, particularly in relation to the calculation of the dumping margin and the injury margin. A detailed report of the hearing of 2 August 2011 was drawn up.
8 On 26 August 2011, the Commission made available to all interested parties, including the applicants, a proposal to impose definitive anti‑dumping duties on imports of the product concerned (‘the definitive findings’), together with an annex in which the arguments raised by the interested parties and not addressed in detail in the definitive findings were dealt with. That document informed all parties of the essential facts and considerations on the basis of which the Commission intended to propose the imposition of definitive anti‑dumping duties and granted all parties a period within which they could make comments. On 5 September 2011 the applicants submitted comments on the definitive findings to the Commission.
9 On 8 November 2011, the Council of the Union adopted Implementing Regulation (EU) No 1138/2011 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia (OJ 2011 L 293, p. 1; ‘the contested regulation’).
Procedure and forms of order sought
10 By application lodged at the Court Registry on 5 January 2012, the applicants brought the present action.
11 By a document lodged at the Court Registry on 24 February 2012, the Commission sought leave to intervene in support of the form of order sought by the Council.
12 By a document lodged at the Court Registry on 28 March 2012, Sasol Olefins & Surfactants and Sasol Germany GmbH (together ‘Sasol’) sought leave to intervene in support of the form of order sought by the Council.
13 By order of the President of the Fourth Chamber of 19 April 2012, the Commission was granted leave to intervene.
14 By order of the President of the Fourth Chamber of 4 June 2012, Sasol was granted leave to intervene.
15 The applicants claim that the Court should:
– annul the contested regulation in so far as it applies to them;
– order the Council to pay the costs.
16 The Council, supported by the Commission and Sasol, contends that the Court should:
– dismiss the action;
– order the applicants to pay the costs.
Law
17 In support of the present action for annulment, the applicants put forward three pleas in law. The first plea, alleging infringement of Article 2(10)(j) of 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, with corrigendum OJ 2010 L 7, p. 22; ‘the basic regulation’), is that the applicants should not have been excluded from the benefit of an adjustment for currency conversion. The second plea, alleging infringements of Article 3(2), (6) and (7) and Article 9(4) of the basic regulation, is that the applicants’ sales to Cognis should not have been taken into account in the injury margin calculation and in the injury and causation analysis. The third plea, alleging infringements of Article 1(1), Article 2(10) and Article 9(4) of the basic regulation, and breach of the principles of proportionality and reasonableness, is that the Commission and the Council institutions ought to have excluded the applicants’ sales to Cognis from the dumping margin calculation.
First plea, relating to the adjustment for currency adjustments
18 The first plea comprises, in essence, two parts. The applicants submit that by refusing to grant them the adjustment for currency conversion for sales made between January and June 2010, in view of the fact that there had been a sustained appreciation of the Indian rupee (INR) against the euro, the Commission infringed Article 2(10)(j) of the basic regulation. Furthermore, the Commission imposed an unreasonable burden of proof on the applicants.
19 The Council rejects all of those arguments as unfounded.
First part of the first plea, alleging infringement of Article 2(10)(j) of the basic regulation
20 In the context of the first part of the present plea, the applicants put forward, in essence, three arguments. First, they claim that a sustained movement in exchange rates automatically entitles exporters to benefit from an adjustment for currency conversion. Second, they claim that they were unable to reflect the fluctuations in the rupee in export prices. Third, they maintain that the increase in their export prices is attributable to factors other than the fluctuation of the rupee.
21 It should be borne in mind that, in accordance with the explanation set out at recital 23 to the provisional regulation and recitals 18 and 19 to the contested regulation, the Commission and the Council refused to grant the claim for an adjustment for currency conversion. That adjustment had been claimed by the applicants because of the appreciation of the rupee against the euro from November 2009. The applicants submitted that such appreciation distorted the dumping margin calculation. More specifically, they claimed that the exchange rate of the month in which the sales were made should be replaced by the rate in force two months earlier. It follows from the recitals referred to above that the claim was rejected since, as regards the exports sales in respect of which the adjustment was claimed, the applicants frequently increased their prices, which, according to the Commission and the Council, showed that they were able to reflect changes in the exchange rates in their prices. The applicants explained, on the contrary, that the increases in their export prices reflected the increase in the costs of raw materials and the general improvement in market conditions.
22 In that regard, first, it should be observed that Article 2(10) of the basic regulation is designed to ensure that the institutions of the Union draw a fair comparison between the export price and the normal value. To that end, Article 2(10) requires that the institutions of the Union take into consideration any factor that might affect price comparability.
23 Second, it follows from the case-law that the adjustments provided for in Article 2(10) of the basic regulation are made by reference to objective factors which correspond to the particular features of each market (original and export) and have a varying impact on conditions and terms of sale, thus affecting price comparability (see, by analogy, Case 260/84 Minebea v Council [1987] ECR 1975, paragraphs 42 and 43).
24 Third, pursuant to Article 2(10)(j) of the basic regulation, when the price comparison requires a conversion of currencies, such conversion is to be made using the rate of exchange on the date of sale, except when a sale of foreign currency on forward markets is directly linked to the export sale involved, in which case the rate of exchange in the forward sale is to be used. Normally, the date of sale is to be the date of invoice but the date of contract, purchase order or order confirmation may be used if these more appropriately establish the material terms of sale. Fluctuations in exchange rates are to be ignored and exporters are to be granted 60 days to reflect a sustained movement in exchange rates during the investigation period.
25 Fourth, it should also be borne in mind that the adjustments in question are not made automatically; it is for the party which seeks to benefit from them to prove that they are justified (Case 255/84 Nachi Fujikoshi v Council [1987] ECR 1861, paragraph 33, and Case T‑48/96 Acme v Council [1999] ECR II‑3089, paragraph 133). That is apparent both from Article 2(10) of the basic regulation and from Article 2.4 of the Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) (OJ 1994 L 336, p. 103; ‘the anti‑dumping agreement’) set out in Annex 1 A to the Agreement establishing the World Trade Organisation (WTO) (OJ 1994 L 336, p. 3), which both refer to differences which are demonstrated to affect prices and, accordingly, price comparability (see, by analogy, Case T‑221/05 Huvis v Commission, not published in the ECR, paragraph 76).
26 It is in the light of those considerations that the applicants’ arguments must be examined.
– Automatic adjustment in the event of a sustained movement of exchange rates
27 The applicants claim in their written proceedings, and also maintained at the hearing, that they ought to have benefited automatically from the adjustment for currency conversion, since the Commission and the Council do not dispute that there was indeed a sustained movement in exchange rates, within the meaning of the case-law, between January and June 2010, as the Council confirmed at the hearing.
28 In that regard, it should be emphasised that Article 2(10)(j) of the basic regulation enables exporters not to be penalised in respect of sustained movements in exchange rates that affect price comparability during a period limited to 60 days. Beyond that 60-day period, a sustained exchange rate movement is no longer able to distort a fair comparison, since exporters have had sufficient time to take appropriate measures, as Sasol correctly observes.
29 Pursuant to the case-law cited at paragraph 25 above, a party claiming an adjustment under Article 2(10)(j) of the basic regulation must demonstrate, first, that there is a sustained movement in exchange rates within the meaning of that provision and, second, that it affects prices and price comparability for a period of less than 60 days.
30 In those circumstances, it must be held that, as in the present case, a sustained movement in exchange rates, within the meaning of the case-law, cannot automatically entail the right to an adjustment for currency conversion. The applicants’ first argument must therefore be rejected as unfounded.
– The possibility for the applicants to reflect fluctuations in the rupee in their export prices
31 The applicants submit that they were unable to alter their prices in order to reflect the appreciation in the rupee against the euro, since export prices were negotiated well before the time of actual payment, generally on a quarterly, or even six-monthly, basis, as is clear, for example, from the minutes of the hearing of 2 August 2011 (see paragraph 7 above). They observe that, even on the assumption that they had been capable of reflecting the appreciation in the rupee in their export prices, that would have affected only future sales and not sales that had already been negotiated. The applicants produce, in that respect, a number of e‑mails between Godrej and two customers.
32 In that regard, it must be stated that those exchanges of e-mails do not prove that the applicants’ sales were in most cases made on a quarterly or six-monthly basis, as the Council correctly observes.
33 Admittedly, it is apparent from those e-mails that certain quantities were negotiated on a quarterly basis, which, moreover, is not disputed by the Council. In the ‘subject’ line of the six e-mails produced by the applicants, for example, the expressions ‘C1618 alcohol for Q4’ and ‘C1618TA Q3 allocation’ appear. The exchanges of e-mails, on 23 June and 22 September 2009 respectively, between representatives of Godrej and two of their customers, actually relate to sales in the periods July to September 2009 and the fourth quarter of 2009. The exchange of e-mails on 29 June 2010 also relates to the quantities sold for August and September of that year.
34 However, it is also apparent from those exchanges of emails, first, that those e-mails related to sales that did not take place over the relevant period, namely January to June 2010, with the exception of the e-mails of 29 June 2010. Second, those exchanges of e-mails related to only three transactions. Third, it follows from those exchanges that Godrej and its customers were still able to conclude other transactions during that quarter. Fourth, the exchanges of e-mails related only to Godrej and not to VVF.
35 In those circumstances, it must be held that those exchanges of e-mails are not in themselves sufficient to demonstrate that most of the applicants’ transactions were negotiated on a quarterly, or even six-monthly, basis. The applicants are ultimately able to produce only three exchanges of e-mails between Godrej and its customers, comprising six e-mails in all, in order to demonstrate that most of the applicants’ production was sold on a quarterly or six-monthly basis. Last, those exchanges of e-mails are, ultimately, subject to interpretation.
36 The Council, on the contrary, puts forward precise figures derived from an analysis of all the applicants’ transactions. It is apparent from those figures that for 50% of the applicants’ export sales to the Union, prices changed over a period of less than or equal to one month and that for 60% of their export sales prices changed over a period of less than or equal to 60 days. It should be emphasised that the applicants have not disputed those figures.
37 As regards the applicants’ argument that, on the assumption that they were able to reflect the appreciation in the rupee in their export prices, that would affect only future sales, it is sufficient to state that the question that arises in the present case is whether exporting undertakings are able to adjust their prices in under 60 days. Consequently, the applicants’ assertion, even if it is true, is not relevant for the purpose of determining whether they could adjust their prices within a sufficiently short period, that is to say, under 60 days, as the Council has emphasised.
38 Accordingly, it must be held that a significant part of the applicants’ sales were negotiated in a timescale of less than two months, which tends to demonstrate that they were capable of altering their prices in a sufficiently short period. The arguments whereby the applicants seek to show that they were not in a position to alter their prices in under 60 days must therefore be rejected as unfounded.
– The cause of the increases in export prices
39 It is apparent from the file that the applicants’ export prices increased significantly between January 2010 and June 2010. In the applicants’ submission, the increase in their export prices is attributable to the prices of raw materials and to the recovery after the global financial crisis and not to the appreciation in the rupee against the euro. Furthermore, domestic market prices also rose, owing to the same factors, which tends to show that the appreciation in the rupee against the euro is not the cause of the increase in export prices.
40 It is common ground that the prices of raw materials also rose significantly during the relevant period. The applicants’ figures and the Council’s are more or less the same, showing an increase in raw materials prices of around 20 to 30% between January and June 2010. It is also apparent from the figures supplied by the Council that the applicants’ export prices rose by approximately 25% over the period under consideration, although the rupee appreciated by 20%.
41 In that regard, it should be emphasised that the fact that the applicants were able to increase their export prices between January and June 2010 tends to demonstrate their ability to increase their prices over the period under consideration and therefore to reflect, where necessary, sustained movements in the exchange rates. It follows from the figures supplied by the Council that the applicants’ export sales actually increased month on month.
42 It must, moreover, be held that the applicants have not demonstrated that the combined effect of the increases in the prices of raw materials and the economic recovery explained in full the increases in export prices.
43 First, it should be observed, as the Council submits, that the applicants have adduced no evidence capable of showing that the economic recovery had influenced their export prices. Essentially, they merely refer to the minutes of the meeting of 2 August 2011, which itself contains no probative evidence in that regard and does not refer to the economic recovery as a relevant factor.
44 Second, it should also be observed that it was logical, as the Council contends, that the Commission should conclude that the difference between the increase in export prices and the increase in domestic prices was mainly intended to compensate for the appreciation of the rupee. Prices on the domestic market did not rise much by comparison with the increase in export prices, which was three times higher than the increase in domestic prices. It follows from the figures supplied by the Council, which have not been challenged by the applicants, that export prices rose by 25% between December 2009 and June 2010, whereas domestic prices rose by only 8% over the period under consideration.
45 The applicants merely claim in that regard that local market conditions explain their inability to pass on the increase in the price of raw materials, but adduce no probative evidence capable of substantiating that assertion. Nor do they claim that the economic recovery in Europe would explain the differences between the increases in prices on the domestic market and export prices. In those circumstances, it must be held that the applicants have not adduced any compelling evidence capable of explaining, other than by the appreciation of the rupee, the differences in price increases between domestic prices and export prices.
46 Third, as regards the argument that certain e-mails produced by the applicants tend to show that the increases in the prices of raw materials were reflected in export prices, it must be held, first, that the e-mails in question do not relate to the period from January to June 2010 and, second, that, in any event, the Commission and the Council have never suggested that the increases in export prices did not to a certain extent reflect the increase in the price of raw materials.
47 Fourth, as regards the exchange of e-mails between Godrej and Cognis, produced by the applicants in the context of the third plea, it must be held that it tends to prove, at least, that the possibility of adjusting export prices following the appreciation of the rupee was discussed between trading partners.
48 Fifth, the fact that the change in export prices has never been taken into account in the past by the Commission for the purpose of determining whether an adjustment for currency conversion was appropriate, which is not disputed by the Commission and the Council, does not show that that variable is not relevant in the circumstances of the present case.
49 In those circumstances, the arguments whereby the applicants seek to explain the increase in export prices by factors other than the appreciation of the rupee must be rejected as unfounded. In the light of the developments set out at paragraphs 31 to 48, it must be held that the applicants have failed to demonstrate that the sustained movement of rates had affected price comparability. The first part of the present plea must therefore be rejected as unfounded.
Second part of the first plea, relating to the burden of proof
50 The applicants claim that the Council imposed an unreasonable burden of proof on them, contrary to Article 2(10) of the basic regulation, as interpreted in accordance with Articles 2.4 and 2.4.1 of the anti-dumping agreement.
51 In that regard, it should be borne in mind that, in contrast to Article 2(10) of the basic regulation, Article 2.4 of the anti-dumping agreement states that the ‘authorities shall indicate to the parties in question what information is necessary to ensure a fair comparison and shall not impose an unreasonable burden of proof on those parties’. Those requirements are not expressly restated in Article 2(10) of the basic regulation; however, they form part of the general principles of EU law and, in particular, the principle of sound administration, which is also set out in Article 41 of the Charter of Fundamental Rights of the European Union (OJ 2010 C 83, p. 389). Thus, it is for the Court to ascertain whether the institutions took those requirements into account when applying Article 2(10)(j) of the basic regulation (see, by analogy, Huvis v Commission, paragraph 25 above, paragraph 77).
52 In the present case, it should be borne in mind that it was for the applicants to demonstrate that the sustained movement of rates had affected the comparability of normal value and export prices. In particular, they were required to demonstrate that the increase in export prices was not connected with the appreciation of the rupee against the euro and also that they were unable to increase their prices to reflect that appreciation.
53 It must be held that there is nothing unreasonable about such a requirement. As the Council has correctly maintained, the applicants could, for example, have demonstrated, by submitting the contracts negotiated with their suppliers of raw materials, that the increase in the prices of those raw materials was exactly reflected in the export prices. The applicants could also have produced all the contracts signed with the Community industry in order to show that most of them had actually been signed on a quarterly or three-month basis. Mere assertions do not suffice to justify an adjustment.
54 In addition, it is apparent from the evidence in the file that the applicants did not at any time complain of an excessive burden of proof during the administrative procedure, nor did they request the Commission to specify the conditions which they needed to fulfil in order to benefit from an adjustment for currency conversion. In answer to a written question put by the Court in that regard, the applicants confirmed that they did not request the Commission to clarify the nature of the evidence which they could have adduced and, furthermore, they continued to call into question the merits of the Commission’s reasoning.
55 Conversely, the Commission did inform the applicants, during the administrative procedure, that it did not have the information which, in its view, was necessary for the implementation of the adjustment for currency conversion. It is apparent from the provisional findings that the Commission rejected the claim for an adjustment for currency conversion, stating, as a reason for its refusal, that the evidence was insufficient. Furthermore, the Commission found that it was not possible to establish the absence of a link between the appreciation of the rupee and the increase in export prices. The same findings are apparent from recital 23 to the provisional regulation.
56 It therefore follows from the documents referred to in the preceding paragraph that the Commission informed the applicants on a number of occasions that they had not sufficiently established that the adjustment for currency conversion was justified, thus giving them a further opportunity to substantiate their claim. It also follows from the final information document, from the meeting with the hearing officer and from recitals 17 and 18 to the contested regulation that the applicants had the opportunity to adduce proof of the reason for the increase in their export prices during the second part of the investigation period.
57 In those circumstances, the second part of the first plea, relating to an excessive burden of proof, must be rejected as unfounded.
58 The first plea must therefore be rejected in its entirety.
Second plea, relating to the inclusion of the applicants’ sales to Cognis in the calculation of the injury margin
59 In support of the second plea, the applicants submit, in essence, three complaints. First, they rely on infringements of Article 3(6) and (7) of the basic regulation. They maintain that their sales to Cognis ought to have been excluded from the injury analysis and that the ‘self-inflicted’ nature of the alleged injury in any event precluded a causal link, within the meaning of Article 3(6) of the basic regulation, from being established between the dumped imports and the injury. Even on the assumption that the alleged injury was established, it ought to have been considered to have been caused by ‘other factors’, within the meaning of Article 3(7) of the basic regulation, as has been considered in certain previous decisions of the Commission and the Council. Those sales also ought to have been excluded from the calculation of the injury margin. Second, the applicants rely on an infringement of Article 3(2) of the basic regulation. Since sales to Cognis were not excluded from the causal link, the Commission and the Council did not carry out an objective examination, nor did they base their determination of injury on positive evidence. Third, the applicants also rely on an infringement of Article 9(4) of the basic regulation, in so far as the Council did not exclude sales of the relevant product to Cognis and imposed an anti-dumping duty without properly evaluating the injury margin.
60 The Council disputes all the appellants’ arguments.
The infringements of Article 3(6) and (7) of the basic regulation
61 In that regard, first, it should be borne in mind that Article 1(1) of the basic regulation provides that ‘[a]n anti-dumping duty may be applied to any dumped product whose release for free circulation in the [Union] causes injury’. According to Article 3(2) of the basic regulation, a determination of injury is to be based on positive evidence and is to involve an objective examination, in particular of the volume of the dumped imports.
62 It follows from Article 3(6) of the basic regulation that the Union institutions must demonstrate that the dumped imports are causing significant injury to the Community industry, owing to their volume and price. That entails what is known as the ‘attribution analysis’. It also follows from Article 3(7) of the basic regulation that the institutions must examine all other known factors which are injuring the Community industry at the same time as the dumped imports and, moreover, ensure that the injury caused by those other factors is not attributed to the dumped imports. That entails what is known as the ‘non-attribution analysis’.
63 The objective of Article 3(6) and (7) of the basic regulation is therefore to ensure that the Union institutions separate and distinguish the injurious effects of the dumped imports from those caused by other factors. If the institutions do not separate and distinguish the impact of the various injury factors, they cannot legitimately conclude that the dumped imports have caused injury to the Community industry.
64 Next, it follows from the case-law that, when determining the injury, the Council and the Commission must, in particular, examine whether the injury which they propose to find might have its cause in the conduct of the Community producers themselves (Case C‑358/89 Extramet Industries v Council [1992] ECR I‑3813, paragraph 16).
65 Last, it should be borne in mind that Article 4(1)(a) of the basic regulation contains the following definition of the Community industry: ‘the term “industry” shall be interpreted as referring to the Community producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion, as defined in Article 5(4), of the total Community production of those products, except that;
(a) when producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, the term “Community industry” may be interpreted as referring to the rest of the producers …’.
66 It is in the light of those considerations that the second plea must be examined.
67 In that regard, it must be pointed out that the inclusion in the definition of the Community industry of a producer who is himself an importer of the allegedly dumped product does not automatically mean that his imports should no longer be considered to be one of the ‘other factors’ within the meaning of Article 3(7) of the basic regulation. It follows from the case-law cited at paragraph 64 above that the Commission and the Council are required, in the light of that provision, to take into account all the factors other than the dumped imports that might preclude the establishment of a causal link between the dumping and the injury suffered by the Community industry. The self-inflicted nature of the injury that might arise from the purchase by a Union producer of dumped products originating in countries covered by the anti-dumping investigation is one of the ‘other factors’ that the Commission and the Council must consider in the context of the injury analysis. Contrary to the applicants’ contention, however, it does not follow from either the basic regulation or the case-law that imports by a Union producer of dumped products originating in the countries covered by the investigation can never be taken into consideration in the injury analysis.
68 In the present case, the Council did in fact examine, first, at recital 61 to the contested regulation, whether Cognis should still be maintained in the definition of the Community industry in spite of its imports from the countries covered by the investigation and, second, at recital 69 to the contested regulation, whether the sales at issue should be excluded from the injury analysis and the injury margin calculation, because any alleged injury relating to those sales would be self‑inflicted.
69 In that regard, it must be confirmed that the Council did not err in concluding that there was no compelling reason for excluding the sales at issue from the analysis.
70 First, it is common ground that those sales did indeed constitute dumping. They could therefore contribute to the existence of injury for the Community industry. Even if that injury were considered to be ‘self-inflicted’ in the case of Cognis, that does not apply to the Community industry as a whole, that is to say, for the other importer. The fact that Cognis withdrew its complaint is not capable in every case of calling that finding into question.
71 Second, it follows from recital 69 to the contested regulation that, during the investigation period, Cognis’s imports were mainly attributable to the temporary closure of one of its production sites. Those dumped purchases were therefore mainly attributable to a temporary constraint. As the Council observes, such imports may undoubtedly also be intended to limit the injurious effects of the dumped imports.
72 Indeed, it follows from recital 17 to the contested regulation, as the applicants observe, that Cognis had obtained supplies from the applicants for several years. However, the sales at issue, which were low during the investigation period, were even lower in previous years. It may be seen from the figures supplied by the Council, which have not been challenged by the applicants, that during the investigation period imports represented only 9 to 11% of Cognis’s production, with only between 4 and 5% coming from India. By way of example, in 2007 and in 2008 imports from India accounted for less than 1% of Cognis’s total production and imports from other non-member countries accounted for approximately 1%. In addition, in 2009 the applicants’ sales to Cognis accounted for only 4.3 and 5.3% respectively of total imports from India and those of the other two countries under investigation. The applicants’ sales to Cognis during the investigation period were therefore indeed temporary for the most part.
73 Third, as regards the earlier decisions and regulations of the Commission and the Council to which the applicants refer in support of their arguments, it is sufficient to state that, both in those cases and in the present case (see paragraph 68 above), the Council and the Commission did indeed examine whether imports by Union producers, as one of the ‘other factors’ within the meaning of Article 3(7) of the basic regulation, had precluded a causal link from being established.
74 In those circumstances, all the arguments whereby the applicants seek to exclude the sales to Cognis for the purposes of the injury analysis and the causal link must be rejected. In so far as the applicants have not put forward any supplementary argument in relation to the exclusion of those sales from the injury margin calculation, the arguments whereby they allege infringements of Article 3(6) and (7) of the basic regulation must be rejected in their entirety as unfounded.
Infringement of Article 3(2) of the basic regulation
75 As regards the complaint alleging infringement of Article 3(2) of the basic regulation, the applicants maintain, having regard to the fact that sales to Cognis were not excluded from the injury margin calculation, that the Union institutions failed to carry out an objective examination and did not base their analysis on positive evidence. In those circumstances, failure to exclude such sales favours the interests of the Community industry and results in a lack of neutrality and good faith.
76 In that regard, it should be borne in mind, first, that Article 3(2) of the basic regulation provides that a determination of injury is to be based on positive evidence and involve an objective examination of, in particular, the volume of the dumped imports.
77 Second, it should be observed that it has already been held, at paragraph 74 above, that the analysis whereby the Council sought to establish the existence of injury and a causal link was not vitiated by any manifest error of assessment so far as the inclusion of the applicants’ sales to Cognis was concerned.
78 Third, as the applicants and Sasol have submitted, it was stated, in essence, concerning Article 3.1 of the anti-dumping agreement, at paragraphs 192 and 193 of the report of the World Trade Organisation (WTO) Appellate Body of 24 July 2001 in the case ‘United States – Anti-dumping measures applied to certain hot-rolled steel products originating in Japan’ that the expression ‘objective examination’ indicated essentially that the examination process must conform to the dictates of the basic principles of good faith and fundamental fairness and that the expression ‘positive evidence’ meant that the evidence should be of an affirmative, objective and verifiable character and that it should be credible.
79 In the present case, it must be held, as the Council and Sasol submit, that the volume and prices of the applicants’ sales to Cognis are tangible, credible and verifiable facts and cannot be seen as ‘allegation, conjecture or remote possibility’. Since it was for the Commission to carry out an ‘objective examination’ of the ‘volume of the dumped imports’, the volume and prices of the applicants’ sales to Cognis constituted positive evidence, independently of whether the Commission had made an error of assessment in the present case.
80 In addition, it must be held that the applicants have not substantiated their argument by any specific information or fact of such a kind as to suggest that the Commission and the Council did not act in good faith in this case. It is apparent from the evidence in the file that the Commission and the Council did in fact take into account all the arguments raised by the applicants, concerning the fact that their sales to Cognis ought not to have been included in the analysis, during the administrative procedure. The applicants’ arguments were examined in the definitive findings, at the applicants’ meeting with the hearing officer, in the letter sent to the applicants on 10 June 2011 and at recital 17 to the contested regulation. In those circumstances, it must be held that the Commission and the Council have not breached their obligation to carry out an objective and impartial examination and that they based their analysis on positive evidence.
Infringement of Article 9(4) of the basic regulation
81 As regards the complaint alleging infringement of Article 9(4) of the basic regulation, it must be observed that the applicants, in essence, merely refer to the arguments whereby they claim that there has been an infringement of Article 3(6) of the basic regulation. Those arguments were rejected at paragraphs 61 to 74 above as unfounded. Furthermore, it should be borne in mind that under Article 9(4) of the basic regulation the anti-dumping duty must be lower than the dumping margin if that enables the injury to be removed. However, as the Council correctly observes, there is nothing in Article 9(4) of the basic regulation to indicate any obligation to exclude certain sales from the analysis. It follows from recital 130 to the contested regulation, moreover, that Article 9(4) of the basic regulation was applied in the present case. Consequently, the complaint alleging infringement of Article 9(4) of the basic regulation must be rejected as unfounded.
82 It follows that the second plea must be rejected in its entirety as unfounded.
Third plea, relating to the fact that the applicants’ sales to Cognis were taken into account in the dumping margin calculation
83 The applicants claim that there have been infringements of Article 1(1), Article 2(10) and Article 9(4) of the basic regulation and a breach of the principle of proportionality and the obligation to state reasons. They submit, in essence, that their sales to Cognis ought to have been excluded from the dumping margin calculation since, first, Cognis is a Union producer and, second, the sales were not made at arm’s length because the prices were imposed by Cognis.
84 The Council rejects all of the applicants’ arguments as unfounded.
85 As a preliminary point, it should be noted that the applicants appear to claim that the Commission and the Council relied, in order not to exclude the sales at issue from the analysis, not on the fact that there was no reason to exclude them, but, on the contrary, on the fact that the basic regulation contained no legal basis on which those sales could be excluded from the analysis.
86 In that regard, it should be observed that it is apparent from the contested regulation that the Council did not put forward that argument. At recital 17 to the contested regulation, the Council stated only that Article 9(4) of the basic regulation merely imposed an obligation to limit the anti-dumping duty to a level sufficient to remove the injury. It then expressed the view that there was no evidence, such as the conditions of the negotiations between the applicants and Cognis or the sales prices paid by Cognis to other suppliers, to support the applicants’ assertion that the sales at issue should be excluded. The Council therefore did indeed rely on the circumstances of the case to substantiate its refusal not to take the applicants’ sales to Cognis into account and not on the fact that no provision of the basic regulation allowed it to do so. This complaint must, in any event, be rejected as unfounded.
87 Primarily, the applicants claim, in the present plea, in essence, that it was unfair, unreasonable and disproportionate to take their sales to Cognis into consideration in the dumping margin calculation, since Cognis prepared its complaint while negotiating the prices. That complaint was thus used as a threat in order to bring down prices. The correspondence with Cognis supplied by the applicants shows that Cognis had significant bargaining power.
88 In that regard, first, it should be observed that the applicants put forward no specific evidence in support of their argument that their sales to Cognis were negotiated other than in normal market conditions, that is to say, that Cognis was capable of imposing a particularly low price on the applicants. Even if Cognis did in fact have such bargaining power, which has not been demonstrated in the present case, that could not alter that assertion, in so far as unequal bargaining power between trading partners is not uncommon. Furthermore, the applicants have adduced no evidence capable of showing that Cognis used the threat of lodging a complaint in order to bring down prices during negotiations with the applicants. The applicants have produced only an exchange of e-mails, which reveal nothing resembling anything other than classic business negotiations. In particular, it is clear from those e-mails that Godrej refused Cognis’s requests for price reductions on a number of occasions.
89 Second, it must be emphasised that Article 1(1) of the basic regulation merely lays down the general principle that ‘[a]n anti-dumping duty may be applied to any dumped product whose release for free circulation in the [Union] causes injury’, but does not specify how the Commission and the Council must calculate the dumping margin, which is dealt with in other provisions of that regulation. Furthermore, as regards Article 9(4) of the basic regulation, it is sufficient to recall that that provision contains no indication of an obligation not to take certain sales into consideration, whether for the purpose of calculating the injury margin or the dumping margin (see paragraph 81 above).
90 The applicants have therefore put forward no argument in the present plea capable of showing that it was unfair, unreasonable or disproportionate to take their sales to Cognis into consideration in the calculation of the dumping margin. Accordingly, the third plea must be rejected as unfounded.
91 In those circumstances, the action must be dismissed in its entirety.
Costs
92 Under Article 87(2) 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. Since the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Council and by Sasol.
93 The Commission must be ordered to bear its own costs, pursuant to the first subparagraph of Article 87(4) of the Rules of Procedure.
On those grounds,
THE GENERAL COURT (Fourth Chamber)
hereby:
1. Dismisses the action;
2. Orders Godrej Industries Ltd and VVF Ltd to pay the costs of the Council of the European Union and also those incurred by Sasol Olefins & Surfactants GmbH and Sasol Germany GmbH, in addition to bearing their own costs;
3. Orders the European Commission to bear its own costs.
Pelikánová | Jürimäe | van der Woude |
Delivered in open court in Luxembourg on 6 September 2013.
[Signatures]