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Language of document : ECLI:EU:T:1998:266

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

19 November 1998 (1)

(Anti-dumping duties Administrative procedure Final disclosure Modification of anti-dumping duties Rights of defence)

In Case T-147/97,

Champion Stationery Mfg Co. Ltd, a company established in Hong Kong, People'sRepublic of China,

Sun Kwong Metal Manufacturer Co. Ltd, a company established in Hong Kong,People's Republic of China, and

US Ring Binder Corporation, a company established in New Bedford,Massachussetts, United States of America,

represented by Richard Luff, of the Brussels Bar, with an address for service inLuxembourg at the Chambers of Loesch and Wolter, 11 Rue Goethe,

applicants,

Council of the European Union, represented by Antonio Tanca and Eva Karlsson,of its Legal Service, acting as Agents, and by Hans-Jürgen Rabe and Georg M.Berrisch, Rechtsanwälte, Hamburg and Brussels, with an address for service in

Luxembourg at the office of Alessandro Morbilli, Director-General of the LegalAffairs Directorate of the European Investment Bank, 100 Boulevard KonradAdenauer,

defendant,

Commission of the European Communities, represented by Viktor Kreuschitz andNicholas Khan, of its Legal Service, acting as Agents, with an address for servicein Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service,Wagner Centre, Kirchberg,

Koloman Handler GesmbH, a company incorporated under Austrian law,established in Vienna,

and

Robert Krause GmbH & Co. KG, a limited partnership constituted under Germanlaw, established in Espelkamp, Germany,

represented by Rainer M. Bierwagen, Rechtsanwalt, Berlin and Brussels,

interveners,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fourth Chamber, ExtendedComposition),

composed of: P. Lindh, President, R. García-Valdecasas, K. Lenaerts, J.D. Cooke,and M. Jaeger, Judges,

Registrar: J. Palacio González, Administrator,

having regard to the written procedure and further to the hearing on 1 July 1998,

gives the following

Judgment

Background to the dispute

1.

Champion Stationery Mfg Co. Ltd ('Champion Stationery) and Sun Kwong MetalManufacturer Co. Ltd ('Sun Kwong) produce ring binder mechanisms in thePeople's Republic of China ('China). Both companies sell the ring bindermechanisms they produce to a related company, US Ring Binder Corporation ('USRing Binder), which resells them into the Community.

2.

In response to a complaint lodged on 18 September 1995 by Robert Krause GmbH& Co. KG ('Robert Krause) and Koloman Handler GesmbH ('KolomanHandler), whose combined production is assumed to represent 90% of Communityproduction of ring binder mechanisms, the Commission initiated, on 28 October1995, an anti-dumping proceeding concerning imports of certain ring bindermechanisms originating in Malaysia and China (OJ 1995 C 284, p. 16).

3.

The Commission sent a questionnaire to all the parties known to be concerned. The applicants replied to the questionnaire and verifications were carried out ontheir premises.

4.

On 11 July 1996, the applicants were informed of the essential facts andconsiderations on the basis of which the Commission intended to imposeprovisional measures.

5.

On 25 July 1996 the Commission adopted Regulation (EC) No 1465/96 imposinga provisional anti-dumping duty on imports of certain ring binder mechanismsoriginating in Malaysia and the People's Republic of China (OJ 1996 L 187, p. 47,'the provisional duty regulation). Having found there to be a dumping margin of112.8% for China (recital 41 in the preamble to the provisional duty regulation),the Commission calculated the level of duty necessary to remove the injury causedto the Community industry by the dumping (recitals 82 to 86 in the preamble to theprovisional duty regulation). For China, that calculation gave an injury eliminationlevel of 35.4%. Since that figure was lower than the dumping margin asprovisionally established, the duty was provisionally fixed at that level in respect ofall imports of ring binder mechanisms originating in China.

6.

On 12 August 1996 the applicants submitted written comments to the Commissionconcerning the disclosure document of 11 July 1996.

7.

On 29 October 1996 the Commission sent to the applicants, by fax and by post, thedefinitive disclosure document (hereinafter 'the disclosure document) in which itset out the essential facts and considerations on the basis of which it intended torecommend the imposition of definitive duties.

8.

The covering letter accompanying the disclosure document gave the applicants until8 November 1996 to submit their comments. The applicants did not respond tothat invitation.

9.

Point A.3.1 of the disclosure document explained that the Commission hadconcluded that one of the exporters in China, World Wide Stationery ('WWS),could be granted the individual treatment it had requested. Point A.3.2 of thatdocument states that '[WWS]'s individual dumping margin amounts to 96.6%. Following the decision to grant [WWS] the individual treatment requested, andtherefore disregarding for the average calculation with respect to the Chineseexports the corresponding transactions, the dumping margin for ... China as a wholeis 129.22%. Point D of the same document, entitled 'Definitive measures, whichbegins with 'Considerations relating to the establishment of the injury eliminationlevel, explains that: 'Under these conditions, the injury elimination levelmethodology as set out in recitals (83) to (86) of the provisional duty Regulationshould be confirmed (point D.1.1). Point D.2, entitled 'Injury elimination level,explains that, as regards China: 'The granting of individual treatment to [WWS]affects the provisional findings. The methodology described above has beenapplied to calculate the individual injury elimination level of this company, and a32.5% underselling margin was established for this company (point D.2.2).

10.

The covering letter accompanying the disclosure document stated that the totalnumber of pages sent was nine ('9 pages total). The applicants maintain that theyreceived nine pages, including the covering letter. However, the Council explainsthat, as a result of an oversight, the applicants did not receive the final page of thedisclosure document. On that final page, produced by the Council as Annex D.3to its defence, the Commission explained that '[t]he reduced underselling marginfor [WWS] result[ed] in an increase of the margin for all other exporters from ...China to 39.4% (previously 35.4%). Furthermore, it stated its intention topropose that the Council impose a duty of 32.5% for WWS and a residual duty of39.4% for the other Chinese companies, as well as the definitive collection of theamounts secured under the provisional duty regulation in so far as the rate of theprovisional duty did not exceed the definitive duty.

11.

On 29 November 1996 the applicants' lawyer had a telephone conversation with MrKnoche, one of the officials in the Directorate General for External Relations (DGI) responsible for the file.

12.

On 12 December 1996 Mr Knoche made a file note concerning that telephoneconversation. That note reads as follows:

'Mr Luff, legal counsel of US Ring Binders in this case, called on 29 November,alleging that his client was entitled to think that the duty applicable to its exportswould remain unchanged (35.4%), as a consequence of paragraph D.1.1 of thedisclosure letter confirming recitals 83 to 86 of the provisional duty regulation.

It was replied that the paragraph in question only confirmed the methodology setout in the provisional duty regulation, and that the last page of the disclosure wasquite clear as far as the proposed duty applicable to US Ring Binders wasconcerned (39.4%).

Mr Luff then alleged not to have received this last page, and meant that it was thenpossible for him to request another disclosure.

It was replied that the receipt notification of the disclosure fax indicated the rightnumber of pages, and that his office could check if the registered mail received byhim in the meanwhile was also complete (in the other case, he would have had tomake a prompt request).

Mr Luff's requests were not reiterated at a later stage.

13.

The applicants consider that summary of the telephone conversation to beincomplete and inaccurate. In their reply (p. 14, point 3(ii) and (iii)), theysummarise the telephone conversation as follows: 'during the telephoneconversation with Mr Luff, Mr Knoche made it clear that several versions of thedisclosure document had been prepared. He added that, although the disclosuredocument would normally have been sent out by Directorate I.E (which is in chargeof injury), this work had been handled by his colleagues in Directorate I.C (whichis in charge of dumping) in this case. ... Mr Knoche started by confirming that theduty rate applicable to the Applicants had increased following the granting ofindividual treatment to [WWS]. However, when Mr Luff queried how it waspossible that this information was not in the disclosure document he had received,Mr Knoche added that, in any event, the disclosure document mentioned the totalnumber of pages ... and invited Mr Luff to check whether he had received all thepages. Mr Luff immediately replied that the disclosure document indicated on thefirst page that it contained nine pages in total and that he had indeed received thefull nine pages. ... [Mr Luff then] invited Mr Knoche to contact his colleagues inDirectorate I.C in order to confirm which was the correct version and to ask themto check whether the version of the disclosure document which had been sent toMr Luff was indeed the correct one. ... When Mr Knoche asked Mr Luff whetherthe disclosure document he had received confirmed the original duty rate for hisclients, Mr Luff replied that this was the case as a result of the last paragraphunder point D.1.1. ... Mr Knoche said very clearly that in the version he hadreceived the last paragraph did not refer to recitals (83) through (86) [in thepreamble to the provisional duty regulation] and that recitals (85) and (86) [in thepreamble to that regulation] were specifically omitted.

14.

On 20 January 1997 the Council adopted Regulation (EC) No 119/97 imposingdefinitive anti-dumping duties on imports of certain ring binder mechanismsoriginating in Malaysia and the People's Republic of China and collectingdefinitively the provisional duties imposed (OJ 1997 L 22, p. 1; hereinafter 'the

contested regulation). The contested regulation fixed the definitive anti-dumpingduty for imports originating in China at 39.4%, with the exception of imports byWWS, in respect of which a definitive duty of 32.5% was introduced.

Procedure and forms of order sought by the parties

15.

By application lodged at the Registry of the Court of First Instance on 30 April1997, the applicants brought the present proceedings.

16.

By document lodged at the Court Registry on 4 August 1997, the Commissionapplied for leave to intervene in support of the forms of order sought by theCouncil. By decision of the Court of 10 November 1997, the Commission wasgranted leave to intervene. The Commission, which has not submitted anystatement in intervention in this case, presented its arguments at the hearing.

17.

By document lodged at the Court Registry on 26 September 1997, KolomanHandler and Robert Krause also applied for leave to intervene in support of theforms of order sought by the Council. By decision of the Court of 10 November1997 they were granted leave to intervene. They submitted their statement inintervention within the time-limit fixed by the Registry.

18.

The applicants claim that the Court should:

annul the contested regulation in so far as it concerns them; and

order the Council to pay the costs.

19.

In their reply to the statement in intervention by Koloman Handler and RobertKrause the applicants also request that the interveners be ordered to bear theirown costs.

20.

The Council contends that the Court should:

dismiss US Ring Binder's application as inadmissible;

in any event, dismiss the application as unfounded;

order the applicants to pay the costs.

21.

The Commission supports the forms of order sought by the Council.

22.

Koloman Handler and Robert Krause claim that the Court should:

dismiss the action on the ground that it is inadmissible and/or unfounded;

order the applicants to pay the costs of the interveners.

23.

Upon hearing the report of the Judge-Rapporteur, the Court of First Instance(Fourth Chamber, Extended Composition) decided to open the oral procedurewithout any preparatory measures of inquiry. However, it asked the Council toreply to a written question before the hearing. The Council complied with thatrequest within the time-limit.

24.

The parties presented oral argument and their replies to the Court's questions atthe hearing in open court on 1 July 1998.

Admissibility

Arguments of the parties

25.

The Council, referring to the judgment in Case C-75/92 Gao Yao v Council [1994]ECR I-3141, paragraphs 28 to 30, expresses doubt as regards the admissibility ofthis action in so far as it was brought by the applicants Champion Stationery andSun Kwong. It observes that the investigation in the present case was directedagainst producers/exporters in China and Malaysia and not againstproducers/exporters in Hong Kong. For that reason, the questionnaires were notsent to Champion Stationery or Sun Kwong, which are established in Hong Kong. Furthermore, the Council points out, those two applicants are not named in eitherthe provisional duty regulation or the contested regulation as producers/exportersbut as Hong Kong companies related to the Chinese producers/exporters. The factthat the Commission accepted their replies to the questionnaires, exchangedcorrespondence with them and gave their representatives the opportunity to beheard does not mean that those companies are directly and individually concernedby the contested regulation (Gao Yao v Council, paragraph 30).

26.

In addition, the Council considers that the action is clearly inadmissible in so faras it was brought by US Ring Binder. It points out that there is no direct linkbetween that applicant and the producers/exporters in China. There is not evenany direct link between US Ring Binder, on the one hand, and ChampionStationery and Sun Kwong, on the other. The fact that the companies all belongto the same group is not in itself sufficient to allow the conclusion that US RingBinder is directly and individually concerned by the contested regulation. TheCouncil adds that the investigation did not concern exports from the United States. Nor was US Ring Binder charged with dumping. The mere fact that it submitteda reply to the Commission's questionnaires does not render it directly andindividually concerned by the contested regulation.

27.

The interveners concur with the arguments put forward by the Council concerningthe admissibility of the present action.

28.

The applicants contend that the action is admissible. First, they claim thatChampion Stationery and Sun Kwong are producers/exporters in China. Theproduction facilities which both companies own in China do not constitute separatelegal entities. In the present case, the replies to the questionnaires could only havebeen submitted by the two applicants concerned, since they were acting asproducers in China and exporters to the European Union. By the same token,since applications under Article 173 of the Treaty can be made only by natural orlegal persons, the production departments of the applicants Champion Stationeryand Sun Kwong in China could not legitimately have brought the presentproceedings.

29.

Next, referring to the judgments in Joined Cases 239/82 and 275/82 AlliedCorporation and Others v Commission [1984] ECR 1005, paragraph 12, and in CaseT-164/94 Ferchimex v Council [1995] ECR II-2681, paragraphs 34 to 36, theapplicants submit that the action is also admissible in so far as it was brought byUS Ring Binder. They point out that US Ring Binder is the exclusive exporter tothe Community of the products manufactured by Champion Stationery and SunKwong. Furthermore, it was identified in the provisional duty regulation and wasaffected by the preliminary investigation (Allied Corporation v Commission,paragraph 12). It is, moreover, clear from the case-law that regulations imposinganti-dumping measures are of direct and individual concern to applicants whoseresale prices for the products in question formed the basis for the construction ofthe export price (Ferchimex v Commission, paragraphs 34 to 36). In the presentcase, the export price used to calculate the dumping margins of ChampionStationery and Sun Kwong was obtained on the basis of the price charged by USRing Binder to independent customers in the European Union.

Findings of the Court

30.

According to Article 14(1) of Council Regulation (EC) No 384/96 of 22 December1995 on protection against dumped imports from countries not members of theEuropean Community (OJ 1996 L 56, p. 1, hereinafter 'the basic regulation),'provisional or definitive anti-dumping duties shall be imposed by Regulation. Although it is true that in the light of the criteria set out in the fourth paragraphof Article 173 of the Treaty, such measures are in fact, as regards their nature andtheir scope, of a legislative character, in that they apply to all the economicoperators concerned taken as a whole, their provisions may none the less be ofdirect and individual concern to certain economic operators (judgments in AlliedCorporation and Others v Commission, cited above, paragraph 11; Case 53/83 AlliedCorporation and Others v Council [1985] ECR 1621, paragraph 4; Gao Yao vCouncil, cited above, paragraph 26; Case T-161/94 Sinochem Heilongjiang v Council[1996] ECR II-695, paragraph 45; and Case T-170/94 Shanghai Bicycle v Council[1997] ECR II-1383, paragraph 35).

31.

The Court holds, first, that the three applicants are directly concerned by thecontested regulation. That regulation imposes a definitive anti-dumping duty whichthe customs authorities of the Member States are obliged to collect and leavesthem no discretion in that regard.

32.

In order to establish whether the applicants are also individually concerned, it isnecessary to consider the situation of Champion Stationery and Sun Kwongseparately from that of US Ring Binder.

33.

The applicants have submitted, without being contradicted by the Council or theinterveners, that the premises of Champion Stationery and Sun Kwong situated inChina, to which the Commission's questionnaires were sent and which, accordingto the Council, should have brought the application for annulment, are productionfacilities belonging to the two applicants established in Hong Kong. They areinternal departments of those applicants. Furthermore, it is not disputed that thefacilities of Champion Stationery and Sun Kwong in China do not have separatelegal personality.

34.

In those circumstances, Champion Stationery and Sun Kwong must be regarded asproducers/exporters in China. The situation in the present case is therefore clearlydifferent from that in Gao Yao v Council. In that case, the Court held theapplication to be inadmissible because the applicant had intervened in theadministrative procedure 'merely as a channel of transmission in Hong Kong setup to facilitate correspondence between the Commission and Gao Yao China(Gao Yao v Council, cited above, paragraph 29).

35.

It is clear from settled case-law that measures imposing anti-dumping duties areliable to be of individual concern to those producers and exporters who are ableto establish that they were identified in the measures adopted by the Commissionand the Council or were affected by the preliminary investigations (judgments inAllied Corporation and Others v Commission, cited above, paragraph 12; JoinedCases C-133/87 and C-150/87 Nashua Corporation and Others v Commission andCouncil [1990] ECR I-719, paragraph 14; Case C-156/87 Gestetner Holdings vCouncil and Commission [1990] ECR I-781, paragraph 17; Case C-358/89 ExtrametIndustrie v Council [1991] ECR I-2501, paragraph 15; Gao Yao v Council, citedabove, paragraph 27; Sinochem Heilongjiang v Council, cited above, paragraph 46,and Shanghai Bicycle v Council, cited above, paragraph 36).

36.

Champion Stationery and Sun Kwong were referred to by name in recital 5(b)(2)in the preamble to the provisional duty regulation, entitled 'exporters/producersin China. Furthermore, they were subject to on-the-spot investigations (recital5(b)(2) in the preamble to the provisional duty regulation). They were alsoidentified in the contested regulation (recital 26 in the preamble).

37.

It follows that Champion Stationery and Sun Kwong are individually concerned bythe contested regulation and their application is admissible.

38.

Recital 5(b)(2) in the preamble to the provisional duty regulation also states that'Champion Stationery Manufacturing Co. Ltd and Sun Kwong Metal ManufacturerCo. Ltd are owned by the same group of companies and both sell their Chinese[ring binder mechanisms] to a related company located in the United States (USRing Binder). For that reason, US Ring Binder is included amongst theundertakings referred to in the provisional duty regulation under the heading'exporters/producers in China and was subject to an on-the-spot investigation(recital 5(b)(2) in the preamble to the provisional duty regulation). US RingBinder was thus identified in the measures adopted by the Commission andaffected by the preliminary investigations within the meaning of the case-law citedat paragraph 35 above. Furthermore, in its reply to a written question from theCourt, the Council acknowledged that the export price of Champion Stationery andSun Kwong was calculated on the basis of the price charged by US Ring Binder toindependent customers established in the Community. That fact also distinguishesthat applicant, with regard to the measure at issue, in respect of all other economicoperators (see, by analogy, the judgments, cited above, in Gao Yao v Council,paragraph 27, and Ferchimex v Council, paragraph 34).

39.

It follows from all the foregoing that the three applicants have standing to bring theproceedings.

Substance

40.

The applicants raise a single plea in law, alleging infringement of their rights ofdefence.

Arguments of the parties

41.

The applicants claim that, in breach of the principles identified in the case-law, theCommunity institutions failed to make available to them, during the administrativeprocedure, all the information which would have enabled them effectively to defendtheir interests (judgments in Case 264/82 Timex v Council and Commission [1985]ECR 849, paragraph 30; Case C-49/88 Al-Jubail Fertiliser and Saudi ArabianFertiliser v Council [1991] ECR I-3187, paragraph 18). They claim that thedisclosure document did not state that the anti-dumping duty to be applied to themwould increase from 35.4% to 39.4% at the final stage in the procedure. On thecontrary, by confirming recitals 85 and 86 in the preamble to the provisional dutyregulation, point D.1.1 of the disclosure document confirmed the injury eliminationlevel of 35.4% for all Chinese exporters/producers other than WWS. Furthermore,it is striking that the contested regulation (recital 64 in the preamble) indicated thatrecitals 82 to 84 in the preamble to the provisional duty regulation were confirmed

and specifically omitted recitals 85 and 86. That discrepancy between thedisclosure document and the contested regulation demonstrates that, far from beingincomplete, the disclosure document actually had a different content from that ofthe contested regulation.

42.

Next, the applicants claim that the disclosure document did not indicate that thegranting of individual treatment to WWS would result in that company's sales beingexcluded for the calculation of the average injury caused by the other Chineseexports. In any event, the granting of individual treatment to WWS need notnecessarily have resulted in the imposition of a rate of duty different from thatprovided for in the provisional duty regulation for the applicants. The granting ofindividual treatment to a given exporter does not necessarily affect the injuryelimination level of the other exporters. The applicants refer to the Japanese plainpaper photocopiers case (Council Regulation (EEC) No 535/87 of 23 February1987 imposing a definitive anti-dumping duty on imports of plain paperphotocopiers originating in Japan (OJ 1987 L 54, p. 12)) and to that of 'DRAMelectronic microcircuits originating in the Republic of Korea (Council Regulation(EEC) No 611/93 of 15 March 1993 imposing a definitive anti-dumping duty onimports into the Community of certain electronic mirocircuits known as DRAMsoriginating in the Republic of Korea and exported by companies not exemptedfrom this duty, and collecting definitively the provisional anti-dumping duty (OJ1993 L 66, p. 1)). Even if the applicants must have been aware of the fact that thelevel of duty applicable to them would increase as a result of the individualtreatment granted to WWS, it was totally impossible for them to calculate theprecise rate of the definitive duty.

43.

According to the applicants, a comparison between the provisional duty regulationand the contested regulation makes it clear that the methodology used to calculatethe injury elimination level changed during the course of the procedure. The merefact that the provisional duty regulation determined a single injury elimination levelbased on exports made by all the Chinese exporters concerned while the contestedregulation determined separate injury elimination levels for those exportersconstitutes a clear change in methodology. The contested regulation thereforeconfirmed only the methodology set out in recitals 82 to 84 in the preamble to theprovisional duty regulation and not that in recitals 85 to 86, which had set the sameinjury margin elimination level for all the Chinese exporters.

44.

The applicants state that they would have submitted new arguments had they beenaware during the administrative procedure that the rate of duty applicable to themwas to be increased to a significant extent. They stress that the methodologyadopted by the institutions in the present case is subject to criticism in that it isillogical to assess injury, in particular price undercutting, on a global basis for allexporters but to determine injury elimination levels on an individual basis. If theCommission had determined, at a provisional stage, that the price undercutting byexports from China was 11.5% (recital 54 in the preamble to the provisional duty

regulation) and that a duty of 35.4% was sufficient to eliminate the injury for allexporters concerned (recital 85 in the preamble to the provisional duty regulation),there was no reason why a higher duty was necessary at the definitive duty stageto eliminate the injury whilst the price undercutting by exports from China wascomputed on a global basis at the same level in the definitive determination (pointB.5 of the disclosure document and recital 34 in the preamble to the contestedregulation).

45.

Next, the applicants claim that during the administrative procedure they had noreason to believe that the disclosure document was incomplete, since they hadreceived exactly the same version by fax and by post, since both versions clearlyindicated on the first page that the disclosure document comprised nine pages andsince the writing on the last (ninth) page of the disclosure document stopped half-way down the page. In any event, the Commission infringed Article 20(4) of thebasic regulation, which provides that 'final disclosure shall be given in writing. Atelephone conversation cannot be a substitute for written disclosure, especiallywhen the definitive duty imposed is different from the provisional duty.

46.

However, the applicants acknowledged at the hearing, in response to the Council'sargument based on Article 20(3) of the basic regulation, that they had neverrequested final disclosure in writing. They nevertheless submit that, when theCommission gives final disclosure to a given party, that disclosure must becomplete.

47.

The Council and the interveners point out, first, that the applicants were aware ofthe change in the rate of the anti-dumping duty which would apply to them. It isclear from the note for the file concerning the telephone conversation of 29November 1996 (see paragraph 12 above) that the applicants were informed, onthat occasion, that the definitive duty proposed by the Commission to the Councilwould be higher than that imposed by the provisional duty regulation. They werealso informed of the precise rate of the duty. The Council and the interveners alsodraw attention to the fact that the applicants have confirmed in their reply that MrKnoche had informed their lawyer, during the telephone conversation on 29November 1996, that the definitive duty proposed by the Commission was higherthan the provisional duty and had explained the reasons for that increase (seeparagraph 13 above). Nor have the applicants disputed that they were informedof the rate of the definitive duty which the Commission intended to propose. TheCouncil and the interveners therefore conclude that the applicants should havebeen aware that they had not received the complete version of the disclosuredocument. In response to the applicants' argument that the disclosure documentwas not incomplete, but different, the Council claims that the document which theapplicants should have received is the one they actually received, plus the missinglast page. The Council produced that missing page as Annex D.3 to its defence. The only differences between the disclosure document sent to the applicants andthat sent to the other exporters concerned the replies to certain specific argumentsrelating to the dumping and/or business secrets. Because of those slight differences,

the individual disclosure documents were of differing lengths and had different pagebreaks.

48.

The Council and the interveners then submit that the increase in the rate of dutieswas also apparent from the wording of the disclosure document received by theapplicants. They refer to point D.1.1 of the disclosure document, which states that'the injury elimination level methodology as set out in recitals (83) to (86) of theprovisional duty regulation should be confirmed. They also point out that, at pointD.2.2, the Commission stated, as regards the 'Injury elimination level, that '[t]hegranting of individual treatment to [WWS] affects the provisional findings. In theirsubmission, the increase in the amount of duty applicable to the applicants in thedefinitive duty regulation was the logical result of the express confirmation of themethodology used in calculating the injury elimination figure and the granting ofindividual treatment to WWS, whose injury elimination level was below the average. The applicants could therefore have been in no doubt, had they read the disclosuredocument carefully, that the definitive duty which the Commission intended topropose to the Council would be higher than the provisional duty. The Councilconcedes, however, in its rejoinder that, on the basis of the information containedin the disclosure document, the applicants could not have calculated the preciserate of the duty which the Commission intended to propose. None the less, thatdocument made it clear that the duty which the Commission intended to proposewould be higher than the provisional duty imposed.

49.

The Council disputes the applicants' argument that the methodology changed in thecourse of the administrative procedure, contending that the methodology used tocalculate the injury elimination level, and consequently to calculate the anti-dumping duty, did not change at any time, either between the imposition of theprovisional duties and final disclosure, or between final disclosure and theimposition of the definitive duties.

50.

Next, the Council and the interveners claim that the disclosure document wasvisibly incomplete and, in those circumstances, the applicants should have contactedthe Commission to ask whether there were parts missing. They point out that thedisclosure document received by the applicants does not mention the level of dutywhich the Commission intended to propose to the Council, for WWS's exports, forexports from China as a whole, or for exports of ring binder mechanisms fromMalaysia. Furthermore, it was clearly surprising that the disclosure documentreceived by the applicants should refer to the injury elimination level for Malaysiaand for WWS and not for the other Chinese producers/exporters. Finally, thedisclosure document states that the 'provisional findings were affected by thegranting of individual treatment to WWS. The applicants could therefore haveexpected that the disclosure document would contain an explanation as to how thefindings concerning the Chinese exporters other than WWS were affected. At thehearing, the Council and the interveners added that the incomplete nature of the

disclosure document was also apparent from the fact that it made no reference tothe collection of the provisional duties.

51.

In the alternative, the Council submits that, even if the Court were to find that theCommunity institutions failed to inform the applicants that the definitive dutiesproposed by the Commission to the Council would be higher than the provisionalduties imposed, that would not mean that the applicants' rights of defence hadbeen infringed. In accordance with Article 20(2) to (4) of the basic regulation, theCommission disclosed to the applicants the essential facts and considerations forthe calculation of the definitive duties, in particular the methodology applied incalculating the injury elimination level. The Council points out that the injuryelimination level established for the applicants in the contested regulation is higherthan the injury elimination level used in the provisional duty regulation as a resultof simple arithmetic. The amount of the definitive injury elimination level istherefore not one of the 'essential facts and considerations referred to in Article20(2) of the basic regulation.

52.

Furthermore, the Council and the interveners claim that the applicants could nothave presented any additional arguments, even if they had been expressly informedof the level of the proposed duty and of the fact that it was higher than theprovisional duty (Al-Jubail Fertiliser, cited above, paragraph 18). There couldtherefore have been no different outcome to the administrative procedure.

53.

In the further alternative, the Council relies on the fact that the applicants did notsubmit a written request for disclosure within the time-limit laid down by Article20(3) of the basic regulation. They are consequently not entitled to final disclosure,nor are the Community institutions under an obligation to provide such disclosure. It follows that even if the Community institutions had provided insufficientdisclosure, thus preventing the applicants from effectively defending their interests,such insufficient disclosure could not lead to the annulment of the contestedregulation.

54.

In its rejoinder the Council goes on to submit, in response to the applicants'argument that Article 20(4) of the basic regulation requires final disclosure to begiven in writing, that failure to comply with a disclosure obligation can result in theannulment of an anti-dumping measure only if that failure prevented the partyconcerned from effectively defending its interests, which was not the case here.

Findings of the Court

55.

Respect for the rights of the defence is a fundamental principle of Community law,observance of which is ensured by the Community judicature (Al-Jubail Fertiliser,cited above, paragraph 15; Joined Cases T-159/94 and T-160/94 Ajinomoto andNutrasweet v Council [1997] ECR II-2461, paragraph 81). Pursuant to thatprinciple, the undertakings affected by an investigation preceding the adoption of

an anti-dumping regulation must be placed in a position during the administrativeprocedure in which they can effectively make known their views on the correctnessand relevance of the facts and circumstances alleged and on the evidence presentedby the Commission in support of its allegation concerning the existence of dumpingand the resultant injury (Al-Jubail Fertiliser, paragraph 17; Case T-121/95 EFMA vCouncil [1997] ECR II-2391, paragraph 84, and Ajinomoto and Nutrasweet vCouncil, paragraph 83). Those requirements were given more specific expressionby Article 20 of the basic regulation. Article 20(2) provides that the complainants,importers and exporters and their representative associations, and representativesof the exporting country, 'may request final disclosure of the essential facts andconsiderations on the basis of which it is intended to recommend the imposition ofdefinitive measures ..., particular attention being paid to the disclosure of any factsor considerations which are different from those used for any provisionalmeasures. Article 20(5) also grants undertakings which have received such finaldisclosure the right to submit any representations within the period set by theCommission, which must be at least 10 days.

56.

It is therefore necessary to consider, in the light of those principles, whether theapplicants' rights of defence were infringed during the administrative procedure.

57.

It is not disputed by the parties that the disclosure document received by theapplicants on 29 October 1996 was incomplete. The Community institutionsexplain that the document which the applicants should have received is the onethey actually received on 29 October 1996, plus the missing last page (seeparagraph 10 above).

58.

The applicants consider that the fact that the disclosure document was incompletehindered the effective exercise of their rights of defence during the administrativeprocedure. They claim, in the first place, that they were not informed, between thedate on which they received the disclosure document and the imposition of thedefinitive measures, of the changes in the methodology used to calculate thedefinitive duty. Second, their rights of defence were infringed in that the disclosuredocument received by them confirmed the injury elimination level of 35.4% forChina, whereas the contested measure uses a level of 39.4%. Third, the applicantsconsider that their rights of defence were infringed in that the disclosure documentreceived by them did not mention either the fact that the Commission intendedproposing that the Council adopt a definitive duty higher than the provisional duty,as a result of the individual treatment granted to WWS, or the precise rate of thedefinitive duty. Finally, the applicants submit in the fourth place that the contestedregulation should be annulled on the ground that it infringes Article 20(4) of thebasic regulation. Those various arguments must be examined separately.

The change in the methodology used to calculate the definitive duty

59.

Pursuant to Articles 7(2) and 9(4) of the basic regulation, the amount of theprovisional and definitive anti-dumping duties imposed must be less than themargin of dumping established, if such lesser duties are adequate to remove theinjury to the Community industry. In accordance with that principle, theCommunity institutions fixed the level of the anti-dumping duty, both in theprovisional duty regulation (recitals 85 and 86 in the preamble) and in thecontested regulation (recital 66 in the preamble), at the injury elimination levelsestablished.

60.

Contrary to the applicants' assertion, the methodology applied to calculate theinjury elimination level and the anti-dumping duty did not change after theadoption of the provisional duty regulation. The contested regulation even statesexpressly that 'the injury elimination methodology as set out in recitals (82) to (84)of the provisional duty regulation [is] confirmed (recital 64 in the preamble). Thatmethodology is as follows. The Community institutions determined the level ofduty necessary to remove the injury to the Community industry caused by thedumping (recitals 82 to 84 in the preamble to the provisional regulation and recitals62 to 69 in the preamble to the contested regulation). For that purpose, it wasconsidered that a price level based on the Community producers' costs ofproduction together with a reasonable profit margin should be calculated. TheCommunity institutions therefore established a 'non-injurious price (recital 83 inthe preamble to the provisional duty regulation and recital 64 in the preamble tothe contested regulation) and subsequently stated that it was necessary to calculatethe difference between that 'non-injurious price and the actual selling prices ofthe exporters in the Community. That difference represented the injury eliminationlevel, namely the price increases necessary to bring the selling prices of theexporters up to the level of the 'non-injurious price (recital 84 in the preambleto the provisional duty regulation and recital 64 in the preamble to the contestedregulation).

61.

The applicants are wrong to claim, as they do in their reply, that the mere fact thatthe provisional duty regulation determined a single injury elimination level basedon exports made by all the Chinese exporters concerned, while the contestedregulation determined separate injury elimination levels for WWS and for the otherChinese exporters constitutes a clear change in methodology. The methodologyapplied, both in the provisional duty regulation and in the contested regulation,required the institutions to calculate the injury elimination level by establishing a'non-injurious price and by comparing that price to the actual selling prices ofexporters in the Community. The application of that methodology for calculatingthe injury elimination level, combined with the granting of individual treatment toWWS of which the applicants were informed by the disclosure document (pointsA.3.1 and D.2.2 of that document) resulted in the determination of a definitiveduty for the applicants of 39.4%.

62.

It follows from the foregoing that the first argument put forward by the applicantslacks any factual basis and must therefore be rejected.

The claim that the disclosure document confirmed an injury elimination level of35.4% for the Chinese producers/exporters other than WWS

63.

The applicants claim that, by referring to recitals 85 and 86 in the preamble to theprovisional duty regulation, point D.1.1 of the disclosure document confirmed theinjury elimination level of 35.4% for Chinese producers/exporters other than WWS. They conclude that they did not receive an incomplete version of that documentbut, rather, the complete version of a different disclosure document. Unlike thedisclosure document received by the applicants, the contested regulation (recital 64in the preamble) and the alleged official disclosure document do not contain anyexpress reference to recitals 85 and 86 in the preamble to the provisional dutyregulation.

64.

Point D.1.1 of the disclosure document states that 'the injury elimination levelmethodology set out in recitals (83) to (86) of the provisional duty regulationshould be confirmed.

65.

The injury elimination level methodology is explained in recitals 83 and 84 in thepreamble to the provisional duty regulation and the injury elimination levels wereestablished, on the basis of that methodology, in recitals 85 and 86 in the preambleto that regulation, for China (35.4%) and for Malaysia (10.5%) respectively. Itfollows that at point D.1.1 of the disclosure document the Commission did notconfirm the injury elimination level of 35.4% established in recital 85 in thepreamble to the provisional dumping regulation for the Chinese exports. Itconfirmed only the injury elimination level methodology, which remainedunchanged between the adoption of the provisional duty regulation and thecontested regulation (see paragraph 60 above). Even if there had been anotherversion of the disclosure document which did not contain any reference to recitals85 and 86 in the preamble to the provisional duty regulation, the applicants' rightsof defence could not have been affected by the failure to communicate that version,since point D.1.1 of the disclosure document communicated to them, like thesupposed version of the disclosure document which was not sent, confirms only themethodology for calculating the injury elimination level, and not the injuryelimination level of 35.4% established in recital 85 in the preamble to theprovisional dumping regulation for Chinese exports.

66.

It follows that the second argument put forward by the applicants also lacks anyfactual basis and must therefore be rejected.

The absence of any reference in the disclosure document to the increase in theduty applicable to the applicants as a result of the individual treatment granted toWWS or to the precise rate of the definitive duty

67.

The applicants submit that their rights of defence were infringed during theadministrative procedure in that the disclosure document received by them did notmention either the fact that the Commission intended proposing that the Counciladopt a definitive duty higher than the provisional duty as a result of the individualtreatment which had been granted to WWS or the precise rate of the definitiveduty.

68.

It must be borne in mind that the provisional duty regulation (recital 85 in thepreamble) had established an injury elimination level of 35.4% and a provisionalanti-dumping duty of the same level, for all the Chinese producers/exporters of theproduct concerned. By contrast, the contested regulation (recital 68 in thepreamble) states that 'the reduced injury elimination level for WWS resulted in anincrease, from 35.4% to 39.4%, of the injury elimination level for all otherexporters from ... China. On that basis, the residual duty for Chineseproducers/exporters other than WWS was increased to 39.4% (recital 69 in thepreamble).

69.

The definitive anti-dumping duty applicable to the applicants' imports to theEuropean Union thus differs substantially from the duty provisionally imposed,because of the effect of granting individual treatment to WWS. As it is clear fromthe case-law of the Court that the amount of the definitive duty constitutes essentialinformation (Al-Jubail Fertiliser, cited above, paragraph 23), it is necessary toexamine whether the applicants were duly informed of that change during theadministrative procedure.

70.

First of all, it is clear that, by means of the disclosure document, the applicantswere informed that individual treatment would be granted to WWS. Furthermore,the document indicated that such individual treatment would affect the provisionalfindings. Thus, point D.2.2. of that document states: 'The granting of individualtreatment to [WWS] affects the provisional findings. The methodology describedabove has been applied to calculate the individual injury elimination level of thiscompany and a 32.5% underselling margin was established for this company. However, it is not stated expressly anywhere in the disclosure document that therate of the anti-dumping duty applicable to the applicants would be increased asa result of granting individual treatment to WWS. Nor does that document statethe precise rate of the definitive duty applicable to the applicants' exports. Thosetwo pieces of information were, in fact, stated on the last page of the disclosuredocument, which was not communicated to the applicants during the administrativeprocedure (see paragraph 10 above).

71.

However, the applicants have themselves acknowledged in their reply that, duringtheir lawyer's telephone conversation with Mr Knoche on 29 November 1996, thelatter 'started by confirming that the duty rate applicable to the applicants hadincreased following the granting of individual treatment to [WWS]. Furthermore,in response to a question from the Court at the hearing, the applicants' lawyerstated that during that same telephone conversation he had been informed of the

precise rate of the definitive duty which would apply to imports of the applicants'products into the European Union (39.4%).

72.

Even though that telephone conversation on 29 November 1996 took placebetween the applicants' lawyer and the Commission official, the applicantsthemselves must be regarded as having been made aware of the informationcommunicated in the course of that conversation. It is not disputed that the samelawyer also represented the applicants' interests during the administrativeprocedure.

73.

The Court therefore concludes that, even though the disclosure document did notmention either the fact that the rate of the anti-dumping duty applicable to theirproducts would be increased in the definitive regulation as a result of the individualtreatment granted to WWS or the precise rate of that duty, the applicants none theless became aware of those facts in the course of the administrative procedure.

74.

However, it is still necessary to establish whether the applicants were informed ofthose 'facts and considerations in sufficient time, in the course of theadministrative procedure, in order to prepare their defence.

75.

Article 20(5) of the basic regulation provides that: '[r]epresentations made afterfinal disclosure is given shall be taken into consideration only if received within aperiod to be set by the Commission in each case, which shall be at least 10 days,due consideration being given to the urgency of the matter.

76.

In the present case the Commission sent the disclosure document to the applicants,by fax and by post, on 29 October 1996. The latter had at least the minimumperiod of 10 days required by Article 20(5) of the basic regulation within which tosubmit any representations. That period expired on 8 November 1996.

77.

The applicants only became aware on 29 November 1996 that the granting ofindividual treatment to WWS would result in an increase in the anti-dumping dutyapplicable to imports of their products into the European Union, and of the preciserate of that anti-dumping duty (39.4%). Since that essential information was notincluded in the disclosure document, it follows that the applicants did not receivesufficient information to enable them to ensure the defence of their rights beforethe expiry of the period set by the Commission for the submission of anyrepresentations.

78.

Furthermore, following the telephone conversation between the applicants' lawyerand Mr Knoche on 29 November 1996, the Commission must have realised that thedisclosure document was incomplete. However, it failed both to send theapplicants a complete version of the disclosure document following that telephoneconversation and to grant them a period of time within which to submit anyrepresentations, in accordance with Article 20(5) of the basic regulation.

79.

However, the above findings do not, in themselves, make it possible to hold thatthe applicants' rights of defence were infringed in the course of the administrativeprocedure. There can be no question of any such infringement it if is establishedthat, in spite of the passive attitude of the Commission, the applicants were in aposition, during the administrative procedure, effectively to make known their pointof view on the information brought to their attention in the course of the telephoneconversation on 29 November 1996.

80.

Article 20(5) of the basic regulation, which sets a minimum period for thesubmission of any representations, is clear and precise and does not leave anydiscretion to the Community institutions (see, by analogy, Joined Cases C-6/90 andC-9/90 Francovich and Others v Italian Republic [1991] ECR I-5357, paragraph 19). An undertaking which receives notification, in the course of the administrativeprocedure, of the essential facts and considerations within the meaning of Article20(2) of the basic regulation can thus, in the absence of any indication by theCommunity institutions of the time-limit within which it must submit anyrepresentations, be regarded as having a minimum period of 10 days as a result ofthe direct effect of Article 20(5) of the basic regulation.

81.

Consequently, in the present case the applicants had 10 days within which to submitany representations concerning the essential information which was not includedin the disclosure document sent to them on 29 October 1996, and which came totheir attention on 29 November 1996. That time-limit expired on 9 December1996.

82.

The applicants are wrong to claim, as they did at the hearing, that the notificationof certain essential information in the course of the telephone conversation on 29November 1996 took place at too late a stage. It is not disputed that theCommission adopted the proposal for the adoption of the contested regulation on16 December 1996 and forwarded it to the Council later that day (OJ 1997 C 13,p. 2). Therefore, if the applicants had submitted their representations before 9December 1996, the Commission could still have taken them into account whendrafting its proposals.

83.

It follows that the fact that the disclosure document fails to mention either theincrease in the rate of anti-dumping duty applicable to their products as a result ofthe individual treatment granted to WWS or the precise rate of the definitive duty(39.4%) does not constitute an infringement of the applicants' rights of defencesince it has been established that they became aware of those facts during atelephone conversation with a Commission official at a time when it was stillpossible for them effectively to make known their point of view in that respectbefore the Commission adopted its proposal for the adoption of the contestedregulation.

84.

The third argument put forward by the applicants in support of their plea musttherefore also be rejected.

Alleged infringement of Article 20(4) of the basic regulation

85.

The applicants submit that a telephone conversation does not relieve theCommission of the obligation to give accurate disclosure in writing, as required byArticle 20(4) of the basic regulation. Failure to comply with that provision of thebasic regulation constitutes a ground for the annulment of the contested regulation.

86.

Although it is true that Article 20(4) of the basic regulation provides that 'finaldisclosure shall be given in writing, Article 20(3) also provides that requests fordisclosure 'shall be addressed to the Commission in writing. At the hearing theapplicants' lawyer acknowledged that, in the present case, his clients had neversubmitted a written request to that effect. The applicants, which concede that theyfailed to comply with Article 20(3) of the basic regulation, cannot therefore criticisethe Community institutions for having failed to provide written confirmation of theinformation provided to them during the telephone conversation on 29 November1996.

87.

Furthermore, Article 20 of the basic regulation is intended to protect the rights ofdefence of interested parties during the administrative procedure. It follows that,in the present case, the failure to comply with the requirements of Article 20(4) ofthe basic regulation can result in the annulment of the contested regulation only ifit is established that that fact affected the applicants' defence. Even if theCommunity institutions provide information orally, they could none the lessexperience difficulty in gathering 'evidence enabling them ... to prove that suchinformation was actually communicated (Al-Jubail Fertiliser, cited above, paragraph20). In the present case, the applicants themselves have acknowledged that theCommission had informed them by telephone on 29 November 1996 both of theincrease in the definitive anti-dumping duty applicable to their products as a resultof the individual treatment granted to WWS and of the precise rate of thedefinitive duty. Furthermore, as it has been established that the applicants werein a position effectively to make known their point of view on those facts during theadministrative procedure, it must be concluded that their defence was not affectedby the failure to comply with the requirements of Article 20(4) of the basicregulation in respect of the facts and considerations which were brought to theattention of the applicants in the course of the telephone conversation on 29November 1996.

88.

The fourth argument put forward by the applicants in support of their plea musttherefore also be rejected.

89.

It follows from all the foregoing that the applicants have failed to establish that thefact that the disclosure document was incomplete prevented them from effectivelyexercising their rights of defence during the administrative procedure. In those

circumstances, the plea alleging infringement of the rights of the defence and,consequently, the application as a whole, must therefore be dismissed.

Costs

90.

Under Article 87(2) of the Rules of Procedure of the Court of First Instance, theunsuccessful party is to be ordered to pay the costs. However, the firstsubparagraph of Article 87(3) provides that the Court may order the parties tobear their own costs where the circumstances are exceptional. The firstsubparagraph of Article 87(4) provides that institutions which have intervened inthe dispute are to bear their own costs. Furthermore, the second subparagraph ofArticle 87(4) provides that the Court may order a party which has intervened, otherthan a Member State or an institution, to bear its own costs.

91.

Even though the application in the present case must be dismissed, the Courtconsiders that the first subparagraph of Article 87(3) and the first and secondsubparagraphs of Article 87(4) of the Rules of Procedure should be applied andeach of the parties should be ordered to bear its own costs. The Court considersthat, following the telephone conversation on 29 November 1996 between theapplicants' lawyer and a Commission official, the Commission should have sent theapplicants a complete version of the disclosure document forthwith and given thema period of time within which to submit any representations. The present disputecould have been avoided had the Commission done so.

On those grounds,

THE COURT OF FIRST INSTANCE (Fourth Chamber, ExtendedComposition)

hereby:

1. Dismisses the application;

2. Orders each of the parties to bear their own costs.

Lindh

García-Valdecasas

Lenaerts

Cooke Jaeger

Delivered in open court in Luxembourg on 19 November 1998.

H. Jung

P. Lindh

Registrar

President

1: Language of the case: English.