JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber,Extended Composition)

8 July 1998 (1)

(Anti-dumping duties on plain paper photocopiers — Review — Period ofapplication of the anti-dumping duty — Manifest error of assessment)

In Case T-232/95,

Committee of European Copier Manufacturers (Cecom), an association underGerman law, established in Cologne (Germany), represented by Dietrich Ehle andVolker Schiller, Rechtsanwälte, Cologne, with an address for service in Luxembourgat the Chambers of Marc Lucius, 6 Rue Michel Welter,

applicant,

v

Council of the European Union, represented by Antonio Tanca, of its LegalService, acting as Agent, assisted by Hans-Jürgen Rabe and Georg M. Berrisch,Rechtsanwälte, Hamburg, with an address for service in Luxembourg at the officeof Alessandro Morbilli, Director General of Legal Affairs at the EuropeanInvestment Bank, 100 Boulevard Konrad Adenauer,

defendant,

APPLICATION for annulment of the second paragraph of Article 3 of CouncilRegulation (EC) No 2380/95 of 2 October 1995 imposing a definitive anti-dumpingduty on imports of plain paper photocopiers originating in Japan (OJ 1995 L 244,p. 1),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (First Chamber, ExtendedComposition),

composed of: B. Vesterdorf, President, C.W. Bellamy and R.M. Moura Ramos,Judges,

Registrar: H. Jung,

having regard to the written procedure and further to the hearing on 25 November1997,

gives the following

Judgment

Facts

1.

    Following a complaint lodged in July 1985 by the Committee of European CopierManufacturers ('Cecom‘), the Commission adopted on 21 August 1986 Regulation(EEC) No 2640/86 imposing a provisional anti-dumping duty on imports of plainpaper photocopiers originating in Japan (OJ 1986 L 239, p. 5).

2.

    On 23 February 1987, the Council adopted Regulation (EEC) No 535/87 imposinga definitive anti-dumping duty on imports of plain paper photocopiers originatingin Japan (OJ 1987 L 54, p. 12).

3.

    Following publication in the Official Journal of the European Communities of 27August 1991 (OJ 1991 C 222, p. 2) of notice of the impending expiry of certainanti-dumping measures on imports of plain paper photocopiers originating inJapan, an application was made to the Commission by Cecom for a review of thosemeasures in accordance with Article 15(3) of Council Regulation (EEC) No2423/88 of 11 July 1988 on protection against dumped or subsidised imports fromcountries not members of the European Economic Community (OJ 1988 L 209,p. 1, hereinafter 'the 1988 basic regulation‘).

4.

    By a notice published in the Official Journal of the European Communities of 11February 1992 (OJ 1992 C 33, p. 4), the Commission gave notice of its intentionto carry out a review of the anti-dumping duties introduced by Regulation No535/87.

5.

    On 16 July 1992 Cecom requested that the review be extended to plain paperphotocopiers having a reproduction capacity of more than 75 photocopies perminute on A4 paper, since such photocopiers were not subject to the anti-dumpingduty introduced by Regulation No 535/87 (Article 1(4), first indent, of thatregulation).

6.

    By a notice published in the Official Journal of the European Communities of 14August 1992 (OJ 1992 C 207, p. 16), the Commission announced the initiation ofa review under Articles 14 and 15 of the 1988 basic regulation. In accordance withArticle 15(3) of that regulation, the anti-dumping measures remained in forcepending the outcome of the review.

7.

    On the basis of that review, which lasted from 1 July 1991 to 30 June 1992, andupon a proposal by the Commission submitted after consultation with theConsultative Committee, the Council adopted Regulation (EC) No 2380/95 of 2October 1995 imposing a definitive anti-dumping duty on imports of plain paperphotocopiers originating in Japan (OJ 1995 L 244, p. 1). The anti-dumping dutyimposed by Regulation No 2380/95 also applies to plain paper photocopiers havinga reproduction capacity of more than 75 photocopies per minute on A4 paper.

8.

    In accordance with the second paragraph of Article 3 thereof, Regulation No2380/95 'shall expire two years after its entry into force, save that should anyreview of the measures adopted by this regulation be pending on that date, it shallremain in force until that review is concluded‘.

9.

    In that connection, paragraph 103 of the recitals in the preamble to the regulationstates that:

'With respect to the period of operation of the measures, the Council noted that,due to the unusual complexity of a number of aspects of this case, significant delayswere incurred in its treatment. First, nearly six months elapsed between the noticeof the Commission's intention to carry out a review of the measures and the actualinitiation of the review. Then, the review investigation itself, which was initiatedon 14 August 1992, took more than three years to complete. In accordance withArticle 15(3) of [the 1988 basic regulation], the original anti-dumping duty on PPCimports from Japan remained in force during this entire period. The Counciltherefore considers it reasonable that, in these exceptional circumstances, theperiod of operation of the new measures should be limited, to expire two yearsafter their entry into force, subject to the applicable provisions on reviews.‘

Procedure and forms of order sought by the parties

10.

    It was in those circumstances that the applicant brought this action by anapplication lodged at the Registry of the Court of First instance on 19 December1995.

11.

    Upon hearing the report of the Judge-Rapporteur, the Court of First Instance(First Chamber, Extended Composition) decided to open the oral procedurewithout any preparatory measures of inquiry.

12.

    The parties were heard and gave replies to the questions posed by the Court at thehearing on 25 November 1997.

13.

    The hearing took place before the First Chamber, Extended Composition,comprising A. Saggio, President, B. Vesterdorf, C.W. Bellamy, R.M. Moura Ramosand J. Pirrung, Judges. Following the appointment of Mr Saggio on 4 March 1998as an Advocate General of the Court of Justice, this judgment was deliberatedupon by the three judges whose signatures it bears, in accordance with Article 32(1)of the Rules of Procedure.

14.

    The applicant claims that the Court should:

—    order the Commission and the Council to produce the minutes of the Anti-Dumping Committee and of the Council concerning the adoption ofRegulation No 2380/95;

—    annul the second paragraph of Article 3 of Regulation No 2380/95;

—    in so far as necessary, order the continuation in force of the anti-dumpingduty introduced by Article 1 of Regulation No 2380/95 until the adoptionby the competent institutions of the measures required for compliance withthe judgment of the Court of First Instance;

—    order the Council to pay the costs.

15.

    The Council contends that the Court should:

—    dismiss the action;

—    order the applicant to pay the costs.

The claim for annulment of the second paragraph of Article 3 of Regulation No2380/95

The plea that the Council does not have power to adopt anti-dumping measures fora period of less than five years

Arguments of the parties

16.

    This plea may be divided into two limbs.

17.

    In the first limb the applicant pleads infringement of Article 15(1) of the 1988 basicregulation. The wording of that provision is clear and unconditional: '... anti-dumping ... duties ... shall lapse after five years from the date on which theyentered into force or were last modified or confirmed‘. It thus determines theperiod of operation of anti-dumping measures and the commencement of thatperiod, including where anti-dumping duties are confirmed in the context of areview. Consequently, the limitation to two years of the period of operation of theanti-dumping duties provided for in the second paragraph of Article 3 ofRegulation No 2380/95 is unlawful because the Council had no power to derogatefrom the period of operation of five years applicable on amending or confirminganti-dumping measures under review procedures.

18.

    Confirmation of that interpretation of Article 15(1) of the 1988 basic regulation isto be found in an analysis of the background to and the objectives pursued by thatprovision. To the extent to which it is permissible to refer to the historicalbackground in order to interpret that unequivocal provision, the applicant recallsthat the earlier agreement on the implementation of Article VI of the GeneralAgreement on Tariffs and Trade ('the earlier anti-dumping code‘), approved onbehalf of the Community by Council Decision 80/271/EEC of 10 December 1979concerning the conclusion of the Multilateral Agreements resulting from the 1973to 1979 trade negotiations (OJ 1980 L 71, p. 1), lays down no fixed period for theoperation of anti-dumping duties. However, Article 9 thereof provides that 'ananti-dumping duty shall remain in force only as long as, and to the extent, necessaryto counteract dumping which is causing injury‘. Accordingly, the Communitylegislature must have deemed five years to be the period necessary to eliminate theharmful effects of dumping and to re-establish normal conditions of competition. That is borne out by the 28th recital in the preamble to the 1988 basic regulation,which states that 'it is necessary to provide that, after a certain period of time,anti-dumping and countervailing measures will lapse unless the need for theircontinued existence can be shown‘.

19.

    The applicant infers from that that Article 15(1) of the 1988 basic regulation laysdown both a minimum and a maximum period of duration for anti-dumpingmeasures. As regards the minimum period, that is intended to afford legalprotection to the Community industry which has already, in principle, sufferedserious injury even before anti-dumping measures were imposed. The same periodof protection of five years is also necessary where it appears, after expiry of the

period, that importers have not abandoned their dumping practices and the injurypersists.

20.

    Moreover, the Council always used to fix the duration of anti-dumping measuresat five years in accordance with Article 15(1) of the 1988 basic regulation, evenwhere they were confirmed after a protracted review procedure (see, in particular,the regulation which was the subject of Joined Cases T-163/94 and T-165/94 NTNCorporation and Koyo Seiko v Council [1995] ECR II-1381).

21.

    The provision in Article 15(3) of the 1988 basic regulation that the initial anti-dumping duty is to remain in force pending the outcome of the review creates arisk which, according to the express intention of the Community legislature, mustbe assumed by the exporters responsible for dumping. The same is true, underArticle 15(4) of the 1988 basic regulation, as regards review procedures already inprogress on expiry of the initial period of application of anti-dumping measures. Therefore, the period of operation of an anti-dumping measure cannot, contraryto what is stated at paragraph 103 of the recitals in the preamble to Regulation No2380/95, depend on the duration of the review procedure, because that isdependent on a number of factors which are beyond the control of the Communityindustry.

22.

    Finally, the 'exceptional circumstances‘ relied on by the Council can in no wayjustify the limitation on the period of operation of anti-dumping measures forphotocopiers having a reproduction capacity of more than 75 copies per minutebecause for those photocopiers the anti-dumping duty was introduced for the firsttime by Regulation No 2380/95.

23.

    In the second limb of the plea, the applicant claims that the reduction in the periodof operation of the anti-dumping measures violates the legal arrangementsintroduced by the basic regulations on anti-dumping and, in particular, thedistribution of the rights and duties as between the Community industry andundertakings practising dumping. It relies on Council Regulation (EC) No 3283/94of 22 December 1994 on protection against dumped imports from countries notmembers of the European Community (OJ 1994 L 349, p. 1, 'the 1994 basicregulation‘), stressing at the same time that earlier basic regulations containedanalogous provisions.

24.

    The applicant then sets out in detail the procedural channels through which theCommunity industry may exercise its rights by lodging a complaint (Article 5 of the1994 basic regulation) or by applying for a review (Article 11 of the 1994 basicregulation). The complaint and/or the application for review must contain evidencesufficient to justify the initiation of proceedings; the initiative and the burden ofproof thus fall on the Community industry. However, Article 11(2) of the 1994basic regulation makes it clear that once definitive anti-dumping duties have beenimposed the Community industry is protected against dumping for five years, unlessa review is initiated.

25.

    During the five years from the date of entry into force of the definitive anti-dumping measures, the initiative and the burden of proof fall, under Article 11(3)of the 1994 basic regulation, on the undertakings carrying out the dumping.

26.

    The applicant considers that by reducing the period of operation of the anti-dumping measures to two years the Council upset the balance established by thebasic regulation between the rights and obligations of the Community industry andthe undertakings practising dumping: since the Community industry is obliged toseek a fresh review after a year or so, reducing the period of operation of the anti-dumping measures undermines the legal protection of the European industry andunfairly reverses the burden of seeking review and the burden of proof, to thedetriment of that industry.

27.

    The Council challenges the applicant's interpretation of Article 15(1) of the 1988basic regulation. Since the provision clearly states that the anti-dumping duties areto lapse not later than five years afterwards, it cannot be interpreted as laying downa minimum period of application of anti-dumping duties.

28.

    That interpretation is confirmed by the background to the provision. Before theadoption of Council Regulation No 2176/84 of 23 July 1984 on protection againstdumped or subsidised imports from countries not members of the EuropeanEconomic Community (OJ 1984 L 201, p. 1, 'the 1984 basic regulation‘), the basicregulations contained no specific provisions concerning the duration of anti-dumping measures, which meant that the Council was entitled to fix such periodas it deemed fit. Under that earlier system, the Council did not as a rule limit theduration of anti-dumping measures, which therefore remained in force untilexporters sought a review. None the less, certain exporters omitted to seek areview, or had no interest in doing so, for example because they no longer exportedto the Community. For that reason Article 15(1) of the 1984 basic regulationintroduced for the first time a provision corresponding to Article 15(1) of the 1988basic regulation. According to the 34th recital in the preamble to the 1984 basicregulation, which corresponds to the 28th recital in the preamble to the 1988 basicregulation, it was inspired by the aim 'to provide that, after a certain period oftime, anti-dumping and countervailing measures will lapse unless the need for theircontinued existence can be shown‘.

29.

    The Council considers that for reasons of legal certainty, and in order to secure a minimum level of protection for the Community industry, it is necessary to providesystematically for anti-dumping measures adopted for the first time to operate forfive years, so that the Community industry is protected for a period of at least thatduration, normally extended by the period of operation of the provisional anti-dumping measures. The same considerations do not apply on the initiation of areview since in that case the Community industry has already been protected fora certain period of time. Moreover, since the initial anti-dumping measures remainin force during the review procedure, the Community industry is also protected

during the whole of that procedure. In the present case, owing to the introductionof anti-dumping duties by Regulation No 2380/95, the anti-dumping dutiesintroduced by Regulation No 535/87 were in fact extended by five years and eightmonths.

30.

    The earlier practice followed by the Community institutions in fixing the period ofapplication of the anti-dumping measures adopted following a review cannot,contrary to the applicant's assertions, be deemed binding on the Council.

31.

    Finally, the fact that Regulation No 2380/95 imposed an anti-dumping duty for thefirst time on plain paper photocopiers having a reproduction capacity of more than75 copies per minute on A4 paper likewise does not preclude a period of operationof less than five years (see the 15th recital in the preamble to the regulation).

32.

    As regards the second limb of the plea, the Council contends that fixing the periodof operation of the anti-dumping duty imposed by Regulation No 2380/95 at twoyears does not, contrary to the applicant's assertions, create a situation in which theJapanese exporters and the Community industry are not competing on a levelplaying-field.

33.

    In fact, as regards the situation of the Community industry, the latter has enjoyedadditional protection by virtue of the fact that the anti-dumping duty remained inforce for the whole of the review period.

34.

    For the Japanese exporters, on the other hand, the maintenance in force during thereview period of the anti-dumping duty imposed by Regulation No 535/87constituted an appreciable drawback because they first had to await the outcomeof the review and then allow an additional year to elapse before themselves beingable to apply for a review.

Findings of the Court

35.

    As a preliminary matter, although Regulation No 2380/95 was adopted after theentry into force on 1 January 1995 of the 1994 basic regulation it is clear fromArticle 24 of the latter regulation that the 1988 basic regulation continues to applyin regard to reviews which were initiated before 1 September 1994. SinceRegulation No 2380/95 was adopted following a review initiated in August 1992, itslawfulness must be assessed in the light of the provisions of the 1988 basicregulation.

36.

    Article 15(1) of the 1988 basic regulation provides that '... anti-dumping ... dutiesshall lapse after five years from the date on which they entered into force or werelast modified or confirmed‘.

37.

    On a literal construction of that provision it is clear that, by providing that the anti-dumping duties are to 'lapse‘ after five years, it is fixing the time after which thoseduties are to expire automatically and not a mandatory minimum period duringwhich they are to apply.

38.

    The literal interpretation of that provision is not put into question by an analysisof its historical origin, contrary to the arguments put forward in that connection bythe applicant.

39.

    A provision equivalent to Article 15(1) of the 1988 basic regulation wasincorporated for the first time in the anti-dumping rules by Article 15(1) of the1984 basic regulation. The 34th recital in the preamble to the latter regulation,which is identical to the 28th recital in the preamble to the 1988 basic regulation,in stating that 'it is necessary to provide that, after a certain period of time, anti-dumping and countervailing measures will lapse unless the need for their continuedexistence can be shown‘, in fact does no more than confirm that that provisionfixes the time after which anti-dumping duties are to expire automatically.

40.

    Moreover, the earlier anti-dumping code, which was in force at the time of theadoption of the 1984 basic regulation, provided in Article 9 that 'an anti-dumpingduty shall remain in force only as long as, and to the extent, necessary to counteractdumping which is causing injury‘. However, according to its wording that provisionrefers only to the maximum period of application of the anti-dumping duties.

41.

    It is now necessary to consider whether, as the applicant maintains, it may beinferred from the structure and purpose of the 1988 basic regulation that Article15(1) thereof must be interpreted as meaning that it imposes a mandatoryminimum period for which anti-dumping duties are to apply.

42.

    In that connection it should be noted, first, that Article 15(2) to (4) of the 1988basic regulation refers by implication to the five-year period provided for in Article15(1). Article 15(4), for instance, provides:

'Where a review of a measure under Article 14 is in progress at the end of therelevant five-year period, the measure shall remain in force pending the outcomeof such review. A notice to this effect shall be published in the Official Journal ofthe European Communities before the end of the relevant five-year period.‘

43.

    However, even though, as those references show, Article 15(2) to (4) of the 1998basic regulation is based on the assumption that the five-year period constitutes thenormal period of operation for definitive anti-dumping duties, it cannot beinterpreted as meaning that that period is to be regarded as a minimum mandatoryperiod for which the definitive anti-dumping duties are to apply, as that would runcounter to the literal construction of Article 15(1) of the regulation.

44.

    As regards the relationship established in the basic regulation between the rightsand obligations of the undertakings practising dumping, on the one hand, and theCommunity industry, on the other, it should be borne in mind that the Councilitself maintained that it was necessary to provide systematically for definitive anti-dumping duties imposed for the first time to operate for five years, in order toensure that the Community industry was adequately protected.

45.

    There is no reason to believe, however, as the applicant maintains in the secondlimb of the plea, that the rules laid down by the basic regulation preclude theCouncil from fixing, in specific cases and on objective grounds, a period ofapplication of less than five years for a regulation imposing definitive anti-dumpingduties, at least where those duties were adopted following a procedure for thereview of the measures initially adopted. In fact, the Council's power under thebasic regulation to adopt anti-dumping measures must be deemed to include theimplied power to restrict the period of application of those measures if such arestriction is compatible with the aims of the regulation and the balancing of therights and obligations of the parties concerned under the regulation.

46.

    In light of those considerations, Article 15(1) of the 1988 basic regulation must beconstrued as allowing the Council a discretionary power to fix at less than five yearsthe period of application of definitive anti-dumping duties adopted following aprocedure for the review of the measures initially adopted if, owing to specialcircumstances, such a limitation best serves to protect the differing interests of theparties to the procedure and maintain the equilibrium between those interestswhich the basic regulation seeks to establish.

47.

    It should be noted that the fact that in other cases prior to the adoption ofRegulation No 2380/95 the Council did not exercise its discretion to fix at less thanfive years the period of application of definitive anti-dumping duties adoptedfollowing a procedure for the review of the measures initially adopted is irrelevant,especially as, in the Council's own words, it is a discretionary power which can beexercised only in special circumstances.

48.

    Inasmuch as the applicant's arguments seek to show that the Council was notentitled in concreto to limit to two years the period during which the anti-dumpingduties imposed by Regulation No 2380/95 would apply, they fall to be examined inconnection with its other pleas. Since this plea concerns the Council's lack ofpower in principle to fix the period during which anti-dumping duties are to applyat less than five years, those arguments must be regarded as irrelevant in thiscontext.

49.

    In the light of those considerations the plea must be rejected.

Pleas alleging a manifest error of assessment and infringement of Article 190 of theTreaty

Arguments of the parties

50.

    The applicant argues that even if — quod non — the Council enjoyed a discretionarypower to determine the period during which anti-dumping measures are to apply,it made a manifest error of assessment in limiting the period during whichRegulation No 2380/95 was to apply.

51.

    The review could not constitute an 'exceptional circumstance‘ justifying a reductionin the period of operation of the anti-dumping measure. In view of the complexityof the procedure concerning anti-dumping duties on photocopiers and theinvestigations which the Commission needed to carry out, a review lasting threeyears cannot be regarded as exceptional. Moreover, it is of no significance. Whether an investigation lasting for over three years is unusual or not is irrelevantin any event, because what matters is that the duration of the review is ultimatelydetermined by the Community institutions.

52.

    In claiming that the Community producers are protected throughout the reviewprocedure, the Council is disregarding the legal nature of that procedure. WhenArticle 15(3) of the 1988 basic regulation provides that pending the outcome of thereview measures are to remain in force, their continuance will depend in fact onthe outcome of the review: if, for example, it leads to a finding that the exportersare no longer engaged in dumping, the measures will be repealed and the exportersas a matter of principle reimbursed upon request the anti-dumping duties paid bythem during the period of the investigation.

53.

    The applicant also challenges the Council's assertion that the period of investigationand the maintenance in force during that period of the anti-dumping dutiesimposed by Regulation No 535/87 involved appreciable disadvantages for theexporters. It maintains that the exporters did everything they could, by theirinterventions, to prolong the review because expediting it would merely have beendisadvantageous to them. They were aware that the anti-dumping duties wouldprobably be extended to plain paper photocopiers with a reproduction capacity ofmore than 75 copies per minute and that the outcome of the procedure would bean increase in the anti-dumping duty. Conversely, the Community industry ofphotocopier manufacturers had a particular interest in a speedy conclusion of thereview and the adoption of fresh anti-dumping measures.

54.

    Since elimination of dumping should enable a return to open and fair marketconditions and the removal of distortion of competition arising from illegal tradepractices, the only question that ought to have had a decisive influence on theexercise by the Council of its discretionary power is whether, in the light of theresults of the review, (fresh) anti-dumping measures were necessary to counteractdumping occasioning injury. Consequently, the Council ought to have decidedwhether the objectives pursued by the anti-dumping measures could be achievedif the period of operation were reduced to two years.

55.

    All the relevant assessment criteria ought to have led the Council to fix a fresh five-year period of operation as from the date of the entry into force of Regulation No2380/95. The applicant puts forward three sets of arguments in that respect.

56.

    In the first set, it argues that on the basis of the review the Community authoritiesconcluded that the Japanese exporters had intensified their dumping practices, thatthe injury occasioned to the Community industry had increased, and that theinterest in preserving the Community industry had also been thereby strengthened.

57.

    The findings of the Community authorities show clearly that dumping margins wereappreciably higher for each exporter concerned than the anti-dumping rate initiallyapplicable because the average weighted dumping margin was 41% (paragraphs 76and 78 of the recitals in the preamble to Regulation No 2380/95). The applicantconcludes that the Japanese exporters had intensified their dumping practices andthat the Council ought therefore to have taken account of those new findings whenfixing the anti-dumping duties.

58.

    The injury caused to the Community industry had also increased. For all thephotocopiers regarded as like products, it was established that the key indicatorsof economic performance for the Community industry deteriorated significantlybetween 1988 and the end of the investigation period; these included production(down 16%), market share (down from 15.4% to 12.4%), and PPC hardwareprofitability (from 11.1% to 2.7%) (paragraphs 33 to 35 of the recitals in thepreamble to Regulation No 2380/95). Notwithstanding a reduction in the volumeof exports from Japan, the Commission also found high undercutting margins(paragraphs 42 and 43 of the recitals in the preamble to the regulation). On thebasis of those findings, the Council came to the conclusion that expiry of the anti-dumping duty in force would lead to a recurrence of serious injury (see, inparticular, paragraphs 81 and 87 of the recitals in the preamble to the regulation).

59.

    Finally, the Council found that the Community's interest in retaining Europeanproduction of photocopiers had increased and that if the duties were to lapse therewould be an incentive for the Japanese exporters to cut production in theCommunity in order to reduce the significant stocks in Japan and improve capacityutilisation there (paragraph 88 et seq. of the recitals).

60.

    The applicant concludes that the findings made by the Community authoritiesthemselves under the review procedure clearly preclude any limitation on theperiod during which anti-dumping measures are to apply. The link between thosefindings and the period during which the anti-dumping measures are to applyresults not merely from Article 15(1) of the 1988 basic regulation but, a fortiori,from the fact that the dumping and the injury caused to the Community industry,far from being eliminated, increased considerably during the period of operationof Regulation No 535/87.

61.

    In the second set of arguments, the applicant maintains that the Councilmisunderstood the particular features proper to photocopiers having a reproductioncapacity of more than 75 copies per minute, which are protected for the first timeagainst dumped imports by Regulation No 2380/95. Photocopiers belonging to thisupper segment were marketed particularly aggressively by the Japanese exportersand the fact that an anti-dumping duty is imposed on this group of photocopiersfor only two years should, in the circumstances, be regarded as running counter tothe findings made by the Community authorities themselves.

62.

    The sector of plain paper photocopiers having a reproduction capacity of morethan 75 copies per minute is of particular importance to Community producers. In Regulation No 2380/95 (paragraphs 42 and 46 of the recitals), the Council andthe Commission established however that in that sector there was both a substantialrise in imports and an increased incidence of undercutting.

63.

    The applicant does not seek 'special rules‘ for these machines but simply theapplication of the normal rule in Article 15(1) of the 1988 basic regulation. TheCouncil itself acknowledges that for reasons of legal certainty, and to provide aminimum level of protection, it is necessary for measures adopted for the first timeto apply for five years.

64.

    The absence of a statement of the reasons which led the Council to limit to twoyears the period of operation of anti-dumping measures for those photocopiers,too, likewise constitutes an infringement of Article 190 of the Treaty.

65.

    Finally, the applicant alleges that prior to the entry into force of Regulation No2380/95 some Japanese producers built up considerable stocks of thosephotocopiers in an attempt to defeat the anti-dumping measures.

66.

    In a third set of arguments the applicant maintains that limiting the period ofapplication of Regulation No 2380/95 to two years sets a dangerous precedentwhich could greatly reduce the value of anti-dumping measures as an instrumentof policy, particularly when the Community institutions reduce the period ofoperation of anti-dumping measures notwithstanding increased dumping, greaterinjury and a powerful interest on the part of the Community in the maintenanceof a major industrial sector. Contrary to the Council's assertions, those argumentsare not based on purely political considerations.

67.

    The Council notes at the outset that paragraph 103 of the recitals in the preambleto Regulation No 2380/95 clearly shows that the matters which led it, exceptionally,to fix at two years the period of application of the regulation were the unusuallength of the review procedure and the fact that the anti-dumping duty hadremained in force during that procedure. Regulation No 2380/95 therefore actuallyextended the period of application of the anti-dumping duty by five years and eightmonths, so that the applicant's current situation is more favourable than it would

have been if the Council had immediately extended the initial anti-dumping dutyby five years.

68.

    As regards the duration of the review, it was indeed unusually long, as confirmedby the fact that the procedure leading to the adoption by Regulation No 535/87 ofthe initial anti-dumping duty lasted only some 18 months.

69.

    The factors other than the length of the review relied on by the applicant insupport of its argument that the period of application of Regulation No 2380/95ought not to have been limited are not such as to invalidate the assessment madeby the Council.

70.

    First, the applicant's arguments concerning the alleged increase in dumping and inthe injury caused to the Community industry and the strengthening of theCommunity interest are said to be based essentially on the findings set out inRegulation No 2380/95 itself. However, there is no link at all between those factorsand the fixing of the period of operation of the anti-dumping duty introduced bythat regulation.

71.

    Secondly, the Council points out that in paragraph 15 of the recitals in thepreamble to Regulation No 2380/95 it set out the reasons why it was not possibleto lay down specific rules for photocopiers having a reproduction capacity of morethan 75 copies per minute. Since it was therefore not possible to lay down adifferent period for those machines during which the anti-dumping duty wouldapply, it was also unnecessary for Regulation No 2380/95 to provide any particularreasoning in that regard.

Findings of the Court

72.

    As a preliminary point, it must be stated that the applicant cannot validly maintainthat the review was not unduly long in this case. It is sufficient to cite Article 7(9)of the 1988 basic regulation, which provides that 'an investigation shall beconcluded either by its termination or by definitive action. Conclusion shouldnormally take place within one year of the initiation of the proceeding.‘ TheCommission announced the initiation of the review procedure only on 14 August1992, some six months after the publication on 11 February 1992 of the notice ofits intention to initiate it. The review then lasted from August 1992 to October1995, or approximately 38 months.

73.

    In those circumstances the first point to consider is whether the unusual length ofthe review was a factor which the Council could legitimately take into account indetermining the period of operation of the definitive anti-dumping duties imposedfollowing the review. In order to do so it is necessary to determine theconsequences of such a lengthy procedure both for the undertakings subject to theanti-dumping duty and for the Community industry.

74.

    As regards the undertakings subject to the duty, the anti-dumping measuresimposed by Regulation No 535/87 remained in force during the whole of the reviewprocedure, in accordance with Article 15(3) of the 1988 basic regulation. Furthermore, even though the review covered the period from 1 July 1991 to 30June 1992, the imposition by Regulation No 2380/95 of new definitive measuresmeant that the undertakings subject to anti-dumping measures were unable to seeka new review before October 1996, since Article 14(1) of the 1988 basic regulationprovides that application for review may be made 'provided that at least one yearhas elapsed since the conclusion of the investigation‘.

75.

    Protection against dumping practices was thus secured for the Community industry,owing to the duration of the review procedure, until at least October 1996.

76.

    The Council was therefore entitled to take the view that the unusual length of thereview affected the legal situation of the parties to the procedure to the detrimentof the undertakings subject to the anti-dumping measures.

77.

    Consequently, the unusual length of the review was capable of justifying limiting theperiod during which the definitive anti-dumping measures adopted following thatprocedure were to apply. Furthermore, the Council cannot be said to haveexceeded the limits of its discretion in deciding that in view of the length of thereview procedure a period of application of two years for Regulation No 2380/95was reasonable. The introduction by Regulation No 2380/95 of new definitivemeasures meant that unless there was an application for a review of the measuresimposed under that regulation the Community industry would be protected againstdumping practices until October 1997, that is to say for five years after the expiryof the initial anti-dumping duty.

78.

    The next point to consider is whether the other factors relied on by the applicantought to have dissuaded the Council from limiting the period during whichRegulation No 2380/95 was to apply to two years, notwithstanding the unusuallength of the review.

79.

    In that regard it must be noted, first, that the applicant has failed to adduce anyevidence whatsoever in support of its assertion that the review was deliberately heldup by the undertakings subject to the anti-dumping duty.

80.

    Secondly, the applicant's argument to the effect that the findings made by theCommunity authorities in the context of the dumping investigation, the injurycaused by the dumping and the Community interest ought to have led the Councilto confirm the anti-dumping duty for a fresh period of five years must be rejected.

81.

    In the first place, the review covered the period from 1 July 1991 to 30 June 1992. Secondly, the anti-dumping measures introduced by Regulation No 535/87 remainedin force throughout the review procedure. Finally, it was on the basis of the

findings made by the Community authorities in the context of the dumpinginvestigation, the injury caused by the dumping and the Community interest thatthe Council considered it necessary not to allow the anti-dumping measuresintroduced by Regulation No 535/87 to lapse and to confirm the rate of anti-dumping duty laid down in that regulation. Since the period of operation of thedefinitive anti-dumping duty introduced by Regulation No 2380/95 was fixed at twoyears, the Community industry was protected against dumping practices for morethan five and a half years after February 1992, when the anti-dumping dutyimposed by Regulation No 535/87 would have lapsed if no review procedure hadbeen initiated.

82.

    In those circumstances the applicant cannot validly claim that the findings inquestion ought to have been taken into consideration in determining the periodduring which the new definitive anti-dumping measures were to apply. It shouldbe emphasised in that regard that, although those findings were relevant for thepurposes of determining the rate of the anti-dumping duty laid down in RegulationNo 2380/95, the applicant is not seeking to have that rate annulled.

83.

    Thirdly, the applicant maintains that the period of operation of the new anti-dumping measures should not have been limited because for photocopiers havinga reproduction capacity of more than 75 copies per minute on A4 paper an anti-dumping duty was introduced for the first time by Regulation No 2380/95. It iscommon ground that those photocopiers were not subject to the anti-dumping dutyimposed by Regulation No 535/87 because, at the time, those photocopiers werenot imported from Japan and photocopiers having a reproduction capacity of morethan 75 photocopies per minute were not manufactured by the Communityindustry.

84.

    In accordance with the request to that effect made by the applicant, however, thereview procedure also covered photocopiers having a reproduction capacity of morethan 75 copies per minute on A4 paper. In that connection, the thirdsubparagraph of paragraph 15 of the recitals in the preamble to Regulation No2380/95 states:

'Conducting two separate proceedings on the same product originating from thesame country would be illogical, contrary to the system envisaged by [the 1988 basicregulation], and conducive to incongruous results. In the case of PPCs from Japan,the review of the existing measures pursuant to Article 15 was opened andconducted in accordance with Article 14 as well, based on the view that Article 15should, and indeed can only, be read in conjunction with Article 14. Reviews ofexisting measures under these provisions may lead to the amendment of thosemeasures. If, following a review, existing measures could not be amended toinclude within the scope of those measures new types of the same product, theeffectiveness of those measures would be impaired.‘

85.

    Since large-capacity photocopiers were included in the review procedure on theground that it would be illogical, and would undermine the usefulness of the anti-dumping measures, to have different arrangements for dumping practicesconcerning like products from the same country, the Council was entitled to takethe view that the anti-dumping duty had to be applied for the same period to allthe photocopiers covered by the procedure.

86.

    Furthermore, Regulation No 2380/95 was adopted following a review of themeasures initially introduced which was extended to cover large-scale photocopiersonly at the applicant's express request. Accordingly, the Council did not exceed thelimits of its discretion in taking the view that the inclusion of those photocopiersin the review procedure did not make it necessary for the new definitive measuresto apply for more than two years.

87.

    It should be added that the applicant has adduced no evidence in support of itsassertion that before the entry into force of Regulation No 2380/95 certainJapanese exporters had built up considerable stocks of the photocopiers at issuein order to circumvent the anti-dumping duty. It is not necessary therefore for theCourt to consider whether sufficient evidence of an attempt to circumvent the anti-dumping duties imposed for the first time in regard to those photocopiers was afactor to be taken into account in determining the period of operation of the newdefinitive anti-dumping measures laid down in that regulation.

88.

    In so far as the applicant alleges infringement of Article 190 of the Treaty, theinclusion in the review of photocopiers having a reproduction capacity of more than75 copies per minute on A4 paper is explained in paragraph 15 of the recitals inthe preamble to Regulation No 2380/95 by the fact that this was done at theapplicant's express request and that it would be illogical to initiate two distinctprocedures for photocopiers from Japan. Accordingly, since the Council set out,in paragraph 103 of the recitals in the preamble to Regulation No 2380/95 (seeparagraph 9 above), the reasons for which it decided that the regulation shouldapply for a period of two years, it was under no obligation to provide specificreasoning concerning the limitation of the period of application of the regulationin regard to large-capacity photocopiers.

89.

    Fourthly and finally, the applicant's argument that the limitation of the periodduring which Regulation No 2380/95 was to apply sets a dangerous precedent likelyto erode the value of anti-dumping measures as an instrument of policy must berejected, since it is not founded on breach of a rule of law. In any event, since theCouncil itself has argued that its discretion to set at less than five years the periodof operation of definitive anti-dumping duties adopted following a procedure forthe review of the measures initially adopted can only be used in specialcircumstances, there is no reason to conclude that the limitation of the periodduring which Regulation No 2380/95 was to apply creates a precedent capable ofundermining the effectiveness of anti-dumping measures.

90.

    In the light of those considerations, the pleas alleging a manifest error ofassessment and infringement of Article 190 of the Treaty must be rejected.

Plea alleging infringement of the Community industry's rights of defence and the rightsavailable to it to ensure the effectiveness of anti-dumping measures

Arguments of the parties

91.

    The applicant begins by explaining that, shortly after the imposition of definitiveanti-dumping duties on photocopiers in 1987, the Japanese exporters largelycircumvented the protective measures by constructing assembly units in theCommunity (see, in particular, Council Regulation (EEC) No 3205/88 of 17October 1988 extending the anti-dumping duty imposed by Regulation (EEC) No535/87 to certain plain paper photocopiers assembled in the Community (OJ 1988L 284, p. 36). In addition, the exporters partly absorbed the anti-dumping duties,with the result that there was found to have been practically no price increase onthe Community market. It refers in that connection to the findings of increaseddumping and undercutting made by the Commission during the review procedure.

92.

    Similar practices, the applicant claims, may be expected on the part of Japaneseexporters and importers seeking to avoid price increases and loss of shares of theCommunity market after confirmation of the anti-dumping duties in Regulation No2380/95. Regard should also be had to the construction of assembly plants in otherAsian countries, and in particular the People's Republic of China, by Japanesephotocopier manufacturers because statistics show an increase in exports from thatcountry to the Community. The applicant claims to be in possession of evidenceproving that the anti-dumping duties on the photocopiers at issue have beencircumvented.

93.

    Under those circumstances, the Community industry should take all the stepsnecessary to avoid the absorption of anti-dumping duties and/or circumventionthereof by means of the assembly of photocopiers in the Community and/or in non-Member States by having recourse to the specific procedures provided for in thebasic regulation on anti-dumping. However, the specific procedures to deal withabsorption of anti-dumping duties (Article 12 of the 1994 basic regulation) andcircumvention (Article 13 of that regulation) come into operation only when arequest in that connection is made by the Community industry. Such a requestmust contain sufficient evidence or information to justify the initiation of aninvestigation. Moreover, the marshalling of evidence, the preparation and lodgingof the application, consultations with the Member States, the initiation of theprocedure, the investigations to be carried out by the Commission, and thepreparation and adoption of the decision by the Community authorities would, inany event, require more than two years.

94.

    The limitation to two years of the period of application of Regulation No 2380/85thus robs the Community industry of the legal protection conferred by the basicregulation on anti-dumping because that period is not sufficient to ensure the actualexercise of its rights under Articles 12 and 13 of the 1994 basic regulation. Thelimitation thus substantially impairs the rights of the Community industry.

95.

    Moreover, the Commission stated in a letter of 7 April 1995 that it was appropriatefor the anti-dumping regulation to apply for such period as would allow theeffective implementation of the anti-dumping measures and, if necessary, theinitiation of the specific procedures provided for in the basic regulation.

96.

    The Council begins by emphasising that the applicant's allegations concerning theabsorption or circumvention of anti-dumping duties in the future are purespeculation, wholly unsupported by evidence. The reference by the applicant to thefindings made in the context of the review procedure are irrelevant, as thosefindings relate to the past. Moreover, the intensification of dumping could beaccounted for not only by the absorption of the anti-dumping duties but also by anincrease in normal value. Finally, the Commission did not include undercutting inits calculations at the time of the procedure leading to the adoption in RegulationNo 535/87 of the initial anti-dumping duty; there could therefore be no finding ofincreased undercutting.

97.

    Howsoever that may be, limiting the period of operation of Regulation No 2380/95to two years cannot be regarded as depriving the applicant of the legal protectionafforded by the 1994 basic regulation. In particular, applications made in respectof the procedures in question could refer to events prior to the adoption ofRegulation No 2380/95 because, at the time of the review procedure, the anti-dumping duty imposed by Regulation No 535/87 was still in force. If necessary, theapplicant could even have made those applications while the review was inprogress.

98.

    In the present case, limiting the period of application of Regulation No 2380/95 totwo years is justified by special circumstances. Consequently, even if that limitationwere to be regarded as restricting the Community industry's right to avail itself ofthe procedures provided for in Articles 12 and 13 of the 1994 basic regulation, itis a consequence which must be accepted of the rules established by thatregulation.

99.

    Moreover, if the applicant could show that the anti-dumping duties were beingabsorbed or circumvented, it could use the same evidence in support of a freshapplication for review.

Findings of the Court

100.

    As a preliminary point it should be observed that this plea must be examined in thecontext of the basic regulation in force when Regulation No 2380/95 was adopted,that is to say the 1994 basic regulation, because any requests to initiate proceduresdesigned to protect the Community industry against absorption or circumventionof the anti-dumping duties had to be lodged in accordance with the provisions ofthat regulation.

101.

    In the present case, there is no reason to conclude that limiting the period ofoperation of Regulation No 2380/95 to two years impaired the rights available tothe Community industry in order to combat absorption or circumvention of theanti-dumping duty.

102.

    The applicant has adduced no evidence whatever capable of showing that therewas, at the time when Regulation No 2380/95 was adopted, an imminent risk thatthe anti-dumping duties would be absorbed or circumvented. In any event, the1994 basic regulation does not permit the adoption of definitive anti-dumpingmeasures for a period exceeding five years and it is therefore inevitable that, afterthree years at the most, the definitive anti-dumping measures will lapse within twoyears or less if no application for review is made. It follows that even if it isdifficult in practice for the Community industry to avail itself of the procedureswhich are designed to protect it against attempts to absorb and/or circumvent theanti-dumping duty when the anti-dumping measures are to lapse within two years,that situation is dictated by the rules established by the basic regulation.

103.

    This plea must therefore also be rejected.

The claim for production of documents

104.

    The applicant states that the Commission proposed that the definitive anti-dumpingmeasures be applied until August 1998. However, during the discussions on thatproposal within the Anti-Dumping Committee and the Council, representatives ofcertain Member States sought to have the period reduced. Since it is not awareof the reasons given for seeking the reduction, the applicant requests the Court toorder the Commission and the Council to produce the minutes of the meetings ofthe Committee and the Council on the Commission's proposal.

105.

    However, examination of the institutions' internal file with a view to ascertainingwhether the contested decision was influenced by factors other than those indicatedin the statement of the reasons on which the decision was based or stated by theinstitution during the proceedings before the Court would constitute a specialmeasure of inquiry. Such a measure would presuppose that the circumstancessurrounding the decision in question give rise to serious doubts as to the realreasons and in particular, to suspicions that those reasons were foreign to the aimsof Community law and thus amounted to a misuse of powers (see the order of the

Court of Justice of 18 June 1986 in Joined Cases 142/84 and 156/84 BAT andReynolds v Commission [1986] ECR 1899, paragraph 11).

106.

    In the present case the applicant has not alleged misuse of powers, nor has itexplained why it considers that the reasons stated in Regulation No 2380/95 maydiffer from the reasons cited during the procedure leading to its adoption.

107.

    Consequently, the applicant's request for production of documents cannot begranted.

108.

    In the light of all those considerations, the action must be dismissed.

Costs

109.

    Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs if they have been asked for in the other party's pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs inaccordance with the form of order sought by the Council.

On those grounds,

THE COURT OF FIRST INSTANCE (First Chamber, Extended Composition)

hereby:

1.    Dismisses the action;

2.    Orders the applicant to pay the costs.

VesterdorfBellamy Moura Ramos

Delivered in open court in Luxembourg on 8 July 1998.

H. Jung

B. Vesterdorf

Registrar

President

1: Language of the case: German.

ECR