Case T‑763/20
(published in extract form)
Inner Mongolia Shuangxin Environment-Friendly Material Co. Ltd
v
European Commission
Judgment of the General Court (Ninth Chamber, Extended Composition) of 21 February 2024
(Dumping – Imports of certain polyvinyl alcohols originating in China – Definitive anti-dumping duty – Implementing Regulation (EU) 2020/1336 – Calculation of the normal value – Significant distortions in the exporting country – Article 2(6a) of Regulation (EU) 2016/1036 – WTO law – Principle of consistent interpretation – Choice of appropriate representative country – Readily available data – Non-cooperation – Definition of ‘necessary information’ – Article 18 of Regulation 2016/1036 – Price undercutting – Market segments – Product control number method – Article 3(2) and (3) of Regulation 2016/1036 – Rights of the defence – Confidential treatment – Articles 19 and 20 of Regulation 2016/1036)
1. EU law – Interpretation – Methods – Interpretation in the light of the international agreements concluded by the European Union – Interpretation of Regulation 2016/1036 in the light of the 1994 GATT Anti-Dumping Agreement – Account taken of the interpretation adopted by the Dispute Settlement Body – Interpretation contra legem of secondary EU law – Not permissible
(Art. 216(2) TFEU; Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (1994 Anti-Dumping Agreement); European Parliament and Council Regulation 2016/1036, Art. 2(6a) and (7))
(see paragraphs 20-22, 28-33, 39-49)
2. International agreements – Agreement establishing the World Trade Organisation – GATT 1994 – Not possible to invoke WTO agreements to challenge the legality of an EU measure – Exceptions – EU measure intended to ensure its implementation or referring thereto expressly and precisely
(Art. 216(2) TFEU; Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (1994 Anti-Dumping Agreement); European Parliament and Council Regulation 2016/1036, Art. 2(6a))
(see paragraphs 23, 24, 38)
3. Common commercial policy – Protection against dumping – Fixing of anti-dumping duties – Anti-dumping duty not to exceed the amount necessary to counter the injurious effects of the dumped imports – Application of the lesser duty rule
(European Parliament and Council Regulation 2016/1036, Art. 2(6a))
(see paragraphs 56-58)
4. Actions for annulment – Pleas in law – Ineffective plea in law – Definition – Pleas in law raised in support of an action against a regulation imposing anti-dumping duties – Pleas in law challenging the dumping margin – Dumping margin not used to calculate the anti-dumping duties – Ineffective pleas in law – Criteria for assessment
(Art. 263 TFEU)
(see paragraphs 62-65, 69, 173)
5. Common commercial policy – Protection against dumping – Dumping margin – Determination of the normal value – Significant distortions of the market in the exporting country – Construction of the normal value on the basis of undistorted prices or benchmarks – Account taken of corresponding costs of production and sale in a representative country – Choice of appropriate representative country – Criteria – Relevant data that are readily available – Definition – Country having provided confidential data that are not publicly available – Not included
(European Parliament and Council Regulation 2016/1036, Arts 2(6a), 6(7), 19 and 20)
(see paragraphs 86-104)
6. Common commercial policy – Protection against dumping – Dumping margin – Determination of the normal value – Significant distortions of the market in the exporting country – Construction of the normal value on the basis of undistorted prices or benchmarks – Account taken of corresponding costs of production and sale in a representative country – Choice of appropriate representative country – Discretion of the institutions – Criteria – Adequate level of social and environmental protection – Not relevant where there is only one appropriate representative country
(European Parliament and Council Regulation 2016/1036, Art. 2(6a)(a) and (7)(a))
(see paragraphs 119-134)
7. Common commercial policy – Protection against dumping – Course of the investigation – Use of the facts available where the undertaking refuses to cooperate – Conditions – Refusal of access to the necessary information – Concept of necessary information – Information relating to production volumes and manufacturing costs – Included
(Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (1994 Anti-Dumping Agreement), Art. 6.8; European Parliament and Council Regulation 2016/1036, Art. 18(1) and (3))
(see paragraphs 140-161)
8. Common commercial policy – Protection against dumping – Course of the investigation – Obligation of the Commission to disclose information to the parties concerned – Scope – Rights of the defence – Infringement – Conditions – Undertaking concerned better able to ensure its defence in the absence of procedural irregularity
(European Parliament and Council Regulation 2016/1036, Arts 19 and 20)
(see paragraph 166)
9. Common commercial policy – Protection against dumping – Injury – Discretion of the institutions – Judicial review – Limits
(Art. 263 TFEU; European Parliament and Council Regulation 2016/1036, Art. 3)
(see paragraphs 198, 199)
10. Common commercial policy – Protection against dumping – Injury – Factors to be taken into consideration – Effect of dumped imports on prices in the Union market for like products – Calculation of the undercutting margin – Calculation method – Discretion of the Commission – Obligation for the Commission to take account of the market segments of the product in question – None save in exceptional circumstances
(European Parliament and Council Regulation 2016/1036, Arts 1(4) and 3(2) and (3))
(see paragraphs 200-209)
11. Common commercial policy – Protection against dumping – Injury – Factors to be taken into consideration – Effect of dumped imports on prices in the Union market for like products – Calculation of the undercutting margin – Calculation method – Obligation for the Commission to take account of all sales of like products of the sampled EU producers – None
(European Parliament and Council Regulation 2016/1036, Art. 3(2) and (3))
(see paragraphs 240, 244-249)
12. Common commercial policy – Protection against dumping – Investigation – Observance of the rights of the defence – Duty of the institutions to keep the undertakings concerned informed, to respect the confidentiality of information, and to reconcile those obligations – Commission decision refusing a request by the undertaking concerned for access to confidential information – No error of law on the part of the Commission – Undertaking having failed to bring that refusal before the hearing officer – Circumstance confirming the finding that there was no error of law on the part of the Commission
(Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (1994 Anti-Dumping Agreement), Art 6.5; European Parliament and Council Regulation 2016/1036, Arts 6(7), 19 and 20)
(see paragraphs 257, 258, 264-273)
Résumé
The General Court dismisses the action brought before it by a Chinese exporting producer for the annulment of Implementing Regulation 2020/1336 of the European Commission imposing definitive anti-dumping duties on imports of certain polyvinyl alcohols (‘PVA’) originating in the People’s Republic of China. (1) In its judgment, the Court clarifies what is meant by ‘readily available’ data in the context of the choice of appropriate representative country for the calculation of the normal value of the product concerned by an anti-dumping investigation where there are significant distortions of the market in the exporting country. It also elaborates on the concept of ‘necessary information’ to be provided by interested parties to the Commission in the course of the anti-dumping investigation. In the present case, the Commission, after receiving a complaint lodged by Kuraray Europe GmbH, the main PVA producer in the European Union, initiated an anti-dumping investigation at the end of which it adopted the contested regulation.
It was against that backdrop that Inner Mongolia Shuangxin Environment-Friendly Material Co. Ltd, a Chinese company which produces and exports PVA to the European Union, considering itself to have been adversely affected by the anti-dumping duties imposed by the Commission, brought an action before the Court for annulment of Implementing Regulation 2020/1336 in so far as that regulation concerns it. (2)
Findings of the Court
In support of its action, the applicant submits, in the first place, that the Commission misinterpreted Article 2(6a)(a) of the basic regulation. (3) Under that article, where it is determined that it is not appropriate to use domestic prices and costs in the exporting country due to the existence of significant distortions on the domestic market, the normal value of the product concerned is to be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks. To that end, the sources of information which the Commission may use include the corresponding costs of production and sale in an appropriate representative country with a similar level of economic development as the exporting country, provided the relevant data are readily available. Where several countries meet that criterion, preference is to be given to the country with an adequate level of social and environmental protection.
In that regard, the Court finds that the Commission did not err in choosing Türkiye over Mexico as the representative country in order to construct the normal value of the product concerned. Indeed, the Commission had no option but to rely on the data provided by a company established in Türkiye, since the data provided by the companies established in Mexico could not be regarded as being ‘readily available’.
Thus, as regards, first of all, the concept of ‘readily available’ data, the Court confirms the literal interpretation adopted by the Commission in the contested regulation to the effect that ‘publicly available’ means available to the public at large, whereas ‘readily available’ means available to everybody, provided that certain conditions, like a payment of a fee, have been fulfilled. The data provided by the companies established in Mexico either had been supplied in confidential form alone and were not publicly available or were available only for a different period than that covered by the investigation.
Relying on a contextual and teleological interpretation, the Court rules that that concept must be construed in the light of the requirements arising from the provisions of the basic regulation concerning confidentiality and disclosure, in order to protect the parties’ rights of defence. Thus, the basic regulation pursues two objectives: on the one hand, to allow the interested parties effectively to defend their interests and, on the other hand, to preserve the confidentiality of the information collected in the course of the investigation. (4) Consequently, when seeking to obtain data that are ‘readily available’, the Commission is, in view of those objectives, entitled to refuse to use data which are considered by the party providing them to be confidential and in respect of which it is unable to secure a non-confidential summary as a basis enabling the other interested parties in the investigation to exercise their rights of defence.
Next, the Court makes clear that, by accepting the data provided by the company established in Türkiye, the Commission did not breach its duty of care by calculating the normal value of the product concerned in an inappropriate or unreasonable manner. The applicant’s arguments challenging the relevance of the data chosen – having regard to the investigation period and the information contained in those data – are not substantiated in the present case. Therefore, the applicant has not adduced sufficient evidence to render implausible the assessments of the facts in the contested regulation.
Finally, having concluded that Türkiye was the only appropriate representative country, the Commission was fully entitled to find that it was not required to carry out an assessment of the level of social and environmental protection in accordance with Article 2(6a)(a) of the basic regulation.
As regards, in the second place, the infringement of Article 18 of the basic regulation, the Court rejects the applicant’s claim that the Commission was wrong to calculate the normal value on the basis of the facts available within the meaning of Article 18 of the basic regulation, despite the fact that the applicant had cooperated to the best of its ability.
The objective of Article 18 of the basic regulation is to enable the Commission to continue with the anti-dumping investigation even though the interested parties refuse to cooperate or do not cooperate satisfactorily. Thus, the first paragraph of that provision allows the Commission to resort to the facts available where the requested information is not ultimately obtained. In order to be regarded as cooperating under that provision, the parties must provide all the information that they have which the institutions consider necessary for the purpose of reaching their findings.
As for the concept of ‘necessary information’, it follows from the wording, context and objective of Article 18(1) of the basic regulation that that term refers to information held by the interested parties which the EU institutions ask them to provide in order to enable those institutions to reach the appropriate findings in an anti-dumping investigation. Thus, information relating to production volumes and manufacturing costs of the product under investigation is necessary information within the meaning of that provision.
In the present case, the Court notes, first of all, that the applicant did not supply the information requested by the Commission regarding the inputs for self-produced factors of production, information that was necessary for determining the normal value. Since the normal value was constructed using a method based on production costs, there was a need to be acquainted with the consumption volumes of all the inputs used to produce PVA, including the inputs for producing self-produced factors of production. As the applicant did not demonstrate that it was impossible for it to provide that information, the Commission did not infringe Article 18(1) by using the facts available as a substitute for that information.
Next, as regards the alleged infringement of Article 18(3) of the basic regulation, the Court recalls that paragraphs 1 and 3 of that article cover different situations. Thus, whereas paragraph 1 of Article 18 sets out in general terms cases in which the information needed by the institutions for the purposes of the investigation has not been supplied, paragraph 3 of that article contemplates the cases in which the information necessary for the purposes of the investigation has been supplied but is irrelevant, with the result that the facts available do not necessarily have to be used. Since the applicant did not provide the information required, Article 18(3) of the basic regulation is not applicable and the Commission was able to use only the facts available as a substitute for the missing information.
Finally, the Commission also did not infringe the applicant’s rights of defence in so far as it did not provide the applicant in good time with the ‘verification report’, which had to be sent to the applicant before the letter informing that party of the Commission’s intention to use the facts available within the meaning of Article 18 of the basic regulation. In that regard, it follows from settled case-law that an infringement of the rights of the defence results in the annulment of the decision adopted at the end of a procedure only if, had it not been for that irregularity, the outcome of the procedure might have been different. The applicant has not put forward any evidence to show that it could not be ruled out that the outcome of the procedure might have been different if it had received that report earlier.
As regards the other pleas challenging the dumping margin adopted by the Commission in the contested regulation, it follows from the analysis of those pleas that the calculation of the dumping margin is not tainted by error, with the result that the dumping margin remains higher than the injury margin, that latter margin having been taken into account in order to determine the anti-dumping rate under the lesser duty rule. Thus, as those other pleas are not such as to call that finding into question, the Court rejects them as ineffective.