JUDGMENT OF THE GENERAL COURT (Seventh Chamber)
19 March 2015 (*)
(Dumping — Imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia — Extension to such imports of the definitive anti-dumping duty imposed on imports of bicycles originating in China — Circumvention — Failure to cooperate — Article 13 of Regulation (EC) No 1225/2009 — Obligation to state reasons — Error of assessment — Equal treatment — Access to the file)
In Case T‑413/13,
City Cycle Industries, established in Colombo (Sri Lanka), represented by T. Müller-Ibold and F.-C. Laprévote, lawyers,
applicant,
v
Council of the European Union, represented by S. Boelaert, acting as Agent, and by R. Bierwagen and C. Hipp, lawyers,
defendant,
supported by
European Commission, represented by J.-F.Brakeland and M. França, acting as Agents,
and by
Maxcom Ltd, established in Plovdiv (Bulgaria), represented by L. Ruessmann, lawyer, and J. Beck, Solicitor,
interveners,
APPLICATION for the partial annulment of Council Implementing Regulation (EU) No 501/2013 of 29 May 2013 extending the definitive anti-dumping duty imposed by Implementing Regulation (EU) No 990/2011 on imports of bicycles originating in the People’s Republic of China to imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, whether declared as originating in Indonesia, Malaysia, Sri Lanka and Tunisia or not (OJ 2013 L 153, p. 1),
THE GENERAL COURT (Seventh Chamber),
composed of M. van der Woude (Rapporteur), President, I. Wiszniewska-Białecka and I. Ulloa Rubio, Judges,
Registrar: S. Spyropoulos, Administrator,
having regard to the written procedure and further to the hearing on 3 September 2014,
gives the following
Judgment
Background to the dispute
1 The applicant, City Cycle Industries, is a Sri Lankan undertaking, importing bicycles from Sri Lanka into the European Union. It challenges the extension of the definitive anti-dumping duty, imposed by Council Implementing Regulation (EU) No 990/2011 of 3 October 2011 on imports of bicycles originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EC) No 1225/2009 (OJ 2011 L 261, p. 2), to certain Sri Lankan undertakings.
The principal initial anti-dumping and anti-subsidy procedures
2 By Council Regulation (EEC) No 2474/93 of 8 September 1993 imposing a definitive anti-dumping duty on imports into the Community of bicycles originating in the People’s Republic of China and collecting definitively the provisional anti-dumping duty (OJ 1993 L 228, p. 1), the Council of the European Communities imposed a definitive anti-dumping duty of 30.6% on imports of bicycles originating in China.
3 Following an expiry review pursuant to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1), as amended (replaced by Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ 2009 L 343 p. 51, corrigendum OJ 2010 L 7, p. 22), ‘the basic regulation’), and in particular pursuant to Article 11(2) of Regulation No 384/96 (now Article 11(2) of the basic regulation), the Council — by Regulation (EC) No 1524/2000 of 10 July 2000 imposing a definitive anti-dumping duty on imports of bicycles originating in the People’s Republic of China (OJ 2000 L 175, p. 39) — decided that the anti-dumping duty of 30.6% should be maintained.
4 Following an interim review pursuant to Article 11(3) of Regulation No 384/96 (now Article 11(3) of the basic regulation), the Council, by Regulation (EC) No 1095/2005 of 12 July 2005 imposing a definitive anti-dumping duty on imports of bicycles originating in Vietnam, and amending Regulation No 1524/2000 (OJ 2005 L 183, p. 1), increased the anti-dumping duty in force to 48.5%.
5 In October 2011, following an expiry review pursuant to Article 11(2) of the basic regulation, the Council, by Implementing Regulation No 990/2011, decided that the anti-dumping duty of 48.5% should be maintained.
6 In April 2012, the European Commission announced the initiation of an anti-subsidy proceeding with regard to imports into the European Union of bicycles originating in China, pursuant to Article 10 of Council Regulation (EC) No 597/2009 of 11 June 2009 on protection against subsidised imports from countries not members of the European Community (OJ 2009 L 188, p. 93).
7 In May 2013, by Decision 2013/227/EU of 22 May 2013 (OJ 2013 L 136, p. 15), the Commission terminated the anti-subsidy proceeding without imposing measures and the Council amended Implementing Regulation No 990/2011 by Council Regulation (EU) No 502/2013 of 29 May 2013 (OJ 2013 L 153, p. 17), adopted following an interim review pursuant to Article 11(3) of the basic regulation.
The circumvention procedure
8 On 14 August 2012, the Commission received a request lodged by the European Bicycle Manufacturers Association (EBMA) on behalf of three bicycle manufacturers in the European Union for it to investigate the possible circumvention of the anti-dumping measures imposed on imports of bicycles originating in China and to make imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, whether declared as originating in those countries or not, subject to registration.
9 On 25 September 2012, the Commission adopted Regulation (EU) No 875/2012 initiating an investigation concerning the possible circumvention of anti-dumping measures imposed by Implementing Regulation No 990/2011 by imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, whether declared as originating in Indonesia, Malaysia, Sri Lanka and Tunisia or not, and making such imports subject to registration (OJ 2012 L 258, p. 21).
10 The purpose of the investigation was, inter alia, to investigate the alleged change in the pattern of trade following the increase in the anti-dumping duty in 2005. It covered the period from 1 January 2004 to 31 August 2012 (‘the investigation period’). More detailed data was collected for the period from 1 September 2011 to 31 August 2012 (‘the reporting period’) in order to examine the possible undermining of the remedial effect of the measures in force and the existence of dumping.
11 The applicant was informed of the initiation of the investigation into circumvention and, on 26 September 2012, was sent an exemption form, to which it was asked to reply electronically no later than 2 November 2012.
12 On 30 October 2012, the Commission received a reply to the exemption form from the applicant.
13 On 7 December 2012, the Commission sent the applicant a letter asking it to send, no later than 17 December 2012, certain missing information relating, in particular, to 10 matters identified in the applicant’s reply to the questionnaire. The Commission received a confirmation of receipt from the telephone of M.I.A., the group’s commercial manager.
14 By letter of 3 January 2013, the Commission requested the applicant to make certain documents available to it during the verification visit, in particular the worksheets which it had used to prepare its reply to the exemption form.
15 The verification visit took place on 21 January 2013 at the applicant’s premises.
16 On 31 January 2013, the Commission informed the applicant of its intention to apply Article 18 of the basic regulation.
17 On 21 March 2013, the Commission sent the applicant, and the Sri Lankan and Chinese authorities, the general disclosure document of its conclusions regarding transhipment and assembly operations and stated its intention to propose the extension of the anti-dumping measures on imports of bicycles from China to imports from Sri Lanka. The applicant’s exemption request was rejected. The time-limit for submitting observations on the general disclosure document was set at 11 April 2013. On 5 April 2013, the applicant requested an extension of the time-limit for submitting its observations. The time-limit was extended twice, finally until 16 April 2013. No observations were submitted by either the Chinese or the Sri Lankan authorities.
18 The applicant disputed the conclusions of the general disclosure document by letter of 12 April 2013. On 27 May 2013, the applicant submitted observations on the draft regulation submitted to the Council by the Commission on 6 May 2013.
19 On 29 May 2013, the Council adopted Implementing Regulation (EU) No 501/2013 extending the definitive anti-dumping duty imposed by Implementing Regulation No 990/2011 to imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, whether declared as originating in Indonesia, Malaysia, Sri Lanka and Tunisia or not (OJ 2013 L 153, p. 1, ‘the contested regulation’).
Contested regulation
20 In recitals 35 to 42 of the contested regulation, the Council stated that six Sri Lankan companies, representing 69% of the total imports from Sri Lanka into the European Union during the reporting period, had submitted a request for exemption in accordance with Article 13(4) of the basic regulation. In the case of three of those companies, one of which had withdrawn its request for exemption and the two others having failed to cooperate sufficiently, the data provided was disregarded and the findings with regard to them were based on the facts available, in accordance with Article 18 of the basic regulation.
21 In recitals 45 to 58 of the contested regulation, the Council, after examining, inter alia, changes in trade flows between China, Sri Lanka and the European Union and also changes in production volumes, concluded that there had been a change in the pattern of trade between Sri Lanka and the European Union, within the meaning of Article 13(1) of the basic regulation, following the increase in anti-dumping duties in July 2005.
22 In recitals 77 to 82 of the contested regulation, the Council examined the nature of the circumvention operations carried out.
23 In recitals 77 to 79 of the contested regulation, the Council analysed the existence of transhipment operations. The existence of transhipment or assembly operations was not established in respect of the three cooperating companies. On the other hand, the Council noted that no cooperation had been given with regard to the remaining exports. Given the change in the pattern of trade, and the fact that not all Sri Lankan producers/exporters had come forward and cooperated, the Council concluded that the exports of those producers/exporters could be attributed to transhipment practices.
24 In recitals 80 to 82 of the contested regulation, the Council analysed the existence of assembly operations. As regards the three cooperating companies, the Council concluded that they satisfied the criteria laid down in Article 13(2) of the basic regulation. The existence of assembly operations was not established with regard to the other companies.
25 In recital 92 of the contested regulation, the Council emphasised that the investigation had not brought to light any due cause or economic justification other than the avoidance of the existing measures relating to the product concerned.
26 In recitals 94 and 95 of the contested regulation, the Council stated, first, that a comparison of the injury elimination level as established in the interim review in 2005 and the weighted average export price during the reporting period had showed significant under-selling for each of the four countries concerned. Secondly, it pointed out that the increase in imports into the European Union from Sri Lanka had been considered significant in terms of quantities. The Council therefore concluded, in recital 96 of the contested regulation, that the existing measures were being undermined in terms of quantities and prices.
27 In recitals 107 to 110 of the contested regulation, the Council examined, in accordance with Article 13(1) of the basic regulation, whether there was evidence of dumping by comparison with the normal value as established during the interim review carried out in 2005. Since the cooperation from Sri Lanka was low, the export price was established on the basis of the facts available, that is to say, on the average export price of bicycles during the reporting period as reported in Eurostat’s Comext database, which was cross-checked against the available export data from the companies not involved in circumvention practices. After making various adjustments to the normal value and the export price, the comparison between those two variables demonstrated, in the Council’s view, the existence of dumping.
28 In those circumstances, the Council concluded that there was circumvention, within the meaning of Article 13(1) of the basic regulation, by transhipment via Sri Lanka. It therefore extended the definitive anti-dumping duty of 48.5% provided for in Article 1(2) of Implementing Regulation No 990/2011 to imports of the product concerned consigned from Sri Lanka, whether declared as originating in that country or not. Further to the findings reported in paragraph 20 above, the Council granted an exemption from the extended measures to three of the six exporters that had applied for exemption.
Procedure and forms of order sought
29 By application lodged at the Court Registry on 9 August 2013, the applicant brought the present action.
30 By a separate document accompanying the application, the applicant also requested that the case be dealt with under the expedited procedure provided for by Article 76a of the Rules of Procedure of the General Court.
31 Following a change in the composition of the Chambers of the Court, the Judge‑Rapporteur was assigned to the Seventh Chamber, to which the present case was accordingly allocated.
32 The application that the case be dealt with under the expedited procedure was granted by decision of the Seventh Chamber of the Court of 8 October 2013.
33 By documents lodged at the Court Registry on 17 October and 8 November 2013 respectively, the Commission and the EBMA applied for leave to intervene in support of the form of order sought by the Council.
34 By order of 11 November 2013, the President of the Seventh Chamber of the Court granted the Commission leave to intervene.
35 By order of 17 December 2013, the Seventh Chamber of the Court dismissed the EBMA’s application for leave to intervene.
36 By document lodged at the Court Registry on 19 March 2014, Maxcom Ltd applied for leave to intervene in support of the form of order sought by the Council.
37 By letters of 15 May 2014, by way of measures of organisation of procedure provided for in Article 64 of the Rules of Procedure, the Court put questions in writing to the applicant and requested the Council to lodge certain documents. The parties complied with those measures of organisation of procedure within the prescribed periods.
38 By order of 16 July 2014, the Seventh Chamber of the Court granted Maxcom leave to intervene.
39 The applicant claims that the Court should:
– annul Article 1(1) and (3) of the contested regulation in so far as those provisions concern the applicant;
– order the Council to pay the costs.
40 The Council, supported by the Commission and Maxcom, contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
Law
Admissibility
41 As regards admissibility, it must be noted, in the first place, that the Commission expressed the belief, at the hearing, that the applicant was perhaps neither a Sri Lankan producer nor exporter, but a type of local service provider acting on behalf of the Chinese undertaking A. In those circumstances, the Commission contends that the action is inadmissible in its entirety.
42 In that regard, the Court notes that the Council has not claimed that the action is inadmissible and has confined itself to requesting that it be dismissed on its merits. According to the fourth paragraph of Article 40 of the Statute of the Court of Justice of the European Union, applicable to the procedure before the General Court by virtue of the first paragraph of Article 53 thereof, an application to intervene must be limited to supporting the form of order sought by one of the parties. In addition, pursuant to Article 116(3) of the Rules of Procedure of the General Court, the intervener must accept the case as he finds it at the time of his intervention.
43 It follows that the Commission does not have locus standi to raise a plea that the action is inadmissible and the Court is not therefore required to examine the plea of inadmissibility which it raises (see, to that effect, judgments of 24 March 1993 in CIRFS and Others v Commission, C‑313/90, ECR, EU:C:1993:111, paragraphs 20 to 22, and 27 November 1997 in Kaysersberg v Commission, T‑290/94, ECR, EU:T:1997:186, paragraphs 69 and 70).
44 In any event, it must be found that at the hearing the Commission merely gave voice to conjecture, without adducing any new evidence, in the context of the discussions concerning the nature of the relationships between the applicant and undertaking A, which are the subject, in particular, of the second part of the first plea in law (see paragraphs 85 to 87 below). Such conjecture, raised at a particularly late stage of the judicial proceedings, cannot, in those circumstances, render the action inadmissible.
45 The plea of inadmissibility raised by the Commission must therefore be dismissed.
46 In the second place, the Court notes that the applicant argued, also at the hearing, that all the new factual elements advanced by the Council in response to the measures of organisation of procedure of the Court should be rejected as inadmissible.
47 In that regard, it must be noted that the applicant does not argue that the Council, in its replies to the measures of organisation of procedure, adopted by the Court following its decision to grant the applicant’s application for an expedited procedure (see paragraph 32 above), put forward a new plea in law or made a belated offer of evidence, in breach of Article 48 of the Rules of Procedure. As the Court of Justice has held, where the General Court takes into account answers given by a party to questions put by way of measures of organisation of procedure, and where the other party has had the opportunity of stating its views on those matters at the hearing, which is true in the present case, there is no infringement of Article 48 of the Rules of Procedure (judgment of 14 December 2005 in General Electric v Commission, T‑210/01, ECR, EU:T:2005:456, paragraph 505). The applicant’s argument must therefore be dismissed.
Substance
48 The applicant puts forward five pleas in law in support of the present action. The first plea, alleging infringement of Articles 13(1) and 18(1) of the basic regulation and the duty to state reasons, concerns alleged legal and factual errors and errors of assessment on the Council’s part in relation to the existence of circumvention and the nature of the facts available. The second plea, alleging infringement of Article 18 of the basic regulation, concerns alleged legal errors and errors of assessment in connection with the finding of non-cooperation. The applicant also alleges a failure to state reasons and infringement of the principle of proportionality and of its procedural rights. The third plea, alleging breaches of the principles of diligence and sound administration, infringement of Article 18(4) of the basic regulation and breach of the applicant’s rights of the defence, is intended to prove that the Council, first, failed to inform the applicant properly of its intention to deny its exemption request and, secondly, failed to grant it complete access to the case file. The fourth plea, alleging infringement of the principle of equal treatment, concerns allegedly discriminatory treatment of the applicant by comparison with one of its competitors operating under the same business model. The fifth plea, alleging infringement of Article 13(1) of the basic regulation and the principle of equal treatment, concerns the evidence supporting the finding of dumping.
The first plea in law, alleging infringements of Articles 13(1) and 18(1) of the basic regulation
49 The applicant’s first plea in law is divided into two parts, concerning, first, the issue of whether a change in the pattern of trade had actually occurred and, secondly, the Council’s conclusion that the applicant had engaged in transhipment operations.
– The change in the pattern of trade
50 In the first place, the applicant maintains that the Chinese statistics for the export of bicycles to Sri Lanka, on which the Council in particular relied in order to establish that a change in the pattern of trade had occurred, are erroneous. In the applicant’s view, there is a higher export drawback rate for bicycles than for mere bicycle parts, which gives an incentive to Chinese exporters to classify exports of components as exports of complete bicycles. In those circumstances, the Chinese statistics for bicycle exports are, first, artificially inflated, since most of the bicycles exported were really bicycle parts, and, secondly, conflict with the Sri Lankan import statistics. China therefore exported significantly fewer bicycles to Sri Lanka than shown in table 2 of the contested regulation.
51 In the second place, the applicant considers that the data used to establish a change in the pattern of trade is insufficient to support a finding of transhipment, in that there is no obvious correlation between imports of bicycles from China into Sri Lanka and exports from Sri Lanka to the European Union.
52 In the third place, the applicant submits that the Council failed to consider alternative explanations for the supposed change in the pattern of trade. In particular, the Council did not take into consideration the removal of tariffs in relation to the imports from Sri Lanka under the Generalised Scheme of Preferences in 2005. Moreover, its analysis of production capacities is inconclusive and relates to the wrong period.
53 The Council disputes all the applicant’s arguments.
54 In that regard, in the first place it must be noted that it is apparent from the documents before the Court that there does indeed seem to be a different VAT drawback rate for complete bicycles than for bicycle parts.
55 However, the applicant has adduced no evidence capable of proving that, as a consequence, the Chinese exporters or the Customs authorities declared exports of mere bicycle parts as exports of complete bicycles. The applicant has presented only documents concerning a limited number of transactions. Should those documents have any evidential value as regards the existence of that practice, they could not in themselves show that the practice was sufficiently common in order to call in question the statistics used by the Council. In short, the applicant has not shown, in any event, that the practice was sufficiently common in order to call in question the validity of the Chinese statistics.
56 Secondly, the applicant submits that, during its investigation, the Commission could easily have detected the existence of such a practice, since the latter was well known in the industry. In essence, the applicant argues that the Commission failed to fulfil its duty of diligence.
57 In that regard, first, the Council states, without being disproved by the applicant, that none of the other parties concerned by that investigation or by the other investigations conducted at the same time seems to have mentioned the existence of such a practice or contradictions between the Sri Lankan and Chinese statistics during the investigation. In addition, the Sri Lankan and Chinese authorities, to whom the findings of the anti-circumvention investigation were disclosed, have at no stage questioned the reliability of the statistics used. There was therefore no need for the Council to doubt the reliability of those statistics.
58 Secondly, it must be noted that the applicant notified the alleged existence of that practice only on 27 May 2013, that is to say just before the adoption of the contested regulation and more than 40 days after the expiry of the time-limit for submitting observations on the general disclosure document. It had not mentioned the practice beforehand. The same is true of the alleged contradictions between the Sri Lankan and Chinese statistics. The applicant’s argument was therefore advanced at a particularly late stage of the investigation.
59 In those circumstances, the applicant has not established the existence of an error of assessment or a failure to observe the principle of diligence on the part of the EU institutions as regards the statistics used.
60 In the second place, it must be found that the figures put forward by the Council, in recitals 45 to 55 of the contested regulation, show the existence of a change in the pattern of trade, within the meaning of Article 13(1) of the basic regulation, between China and the European Union, between China and Sri Lanka and, lastly, between Sri Lanka and the European Union.
61 First, it is apparent from recital 45 and Table 1 of the contested regulation that the imports of bicycles from China to the European Union decreased by 84% during the investigation period. Between the increase of the duties in 2005 and the end of the reporting period, imports also decreased to a third of the 2005 level. Secondly, the exports of bicycles from China to Sri Lanka increased as soon as the initial anti-dumping duty was implemented. They increased by 132% during the investigation period, as is apparent from recital 53 and Table 2 of the contested regulation, despite decreases in 2007 and 2009. Admittedly, as the applicant states, in 2009 the Sri Lankan imports from China decreased by 9.9%, while the Sri Lankan exports to the European Union increased by 35%. However, such an annual variation cannot call in question the trend emerging from the figures of the EU institutions. As the Council correctly states, a time lag between the change in flows between China and Sri Lanka and between Sri Lanka and the European Union may arise, in particular, because of the existence of stocks. Thirdly, the imports of bicycles from Sri Lanka to the European Union also increased following the implementation of the original anti-dumping duty. They increased by a factor of 3.8 during the investigation period, as is apparent from recital 48 and Table 1 of the contested regulation.
62 In those circumstances, the Council did not err in concluding, on the basis of those figures, that there had been a change in the pattern of trade.
63 In the third place, the applicant submits that the Council failed to take into account alternative explanations to circumvention when examining the trend in imports from Sri Lanka to the European Union, in particular the full removal of tariffs under the Generalised Scheme of Preferences in 2005.
64 In that regard, it must be noted that the basic regulation does not confer on the Commission investigating powers enabling it to compel companies to participate in an investigation or to produce information. In those circumstances, the Council and the Commission depend on the voluntary cooperation of the parties in supplying the necessary information within the time-limits set (judgment of 24 May 2012 in JBF RAK v Council, T‑555/10, EU:T:2012:262, paragraph 80).
65 In the present case, first, it must be stated that it is apparent from the documents before the Court that no alternative explanation was put forward during the investigation. In particular, the Council states that the Sri Lankan authorities have not put forward any observations which would contradict the findings concerning the cause of the change in the pattern of trade.
66 Secondly, it must be noted that the applicant itself, during the investigation, has not put forward an alternative explanation capable of explaining the change in the pattern of trade, other than by the imposition of the anti-dumping duty, prior to its observations submitted on 27 May 2013. It was indeed only in its observations of 27 May 2013 that it actually referred to the full removal of tariffs under the Generalised Scheme of Preferences in 2005.
67 In that regard, it must be noted that the applicant has not adduced any evidence capable of showing that the change in the Generalised Scheme of Preferences could have had an impact on the change in the pattern of trade. If the change in that scheme could have had an impact, the applicant adduces no evidence which would allow its scale to be determined. An exporter cannot properly rely on the existence of an alternative justification without adducing any evidence, especially at that particularly late stage of the investigation. Indeed, the Council states, without being disproved by the applicant, that the change in the General Scheme of Preferences does not alter the finding that it was still economically more interesting to circumvent the initial anti-dumping duty via Sri Lanka rather than to export directly from China and pay that anti-dumping duty. Consequently, it must be found that the Council has not committed an error in that regard.
68 As regards the change in production volumes, the applicant submits that the Council’s analysis is incomplete, because it relates neither to the investigation period as a whole nor all the Sri Lankan exporting companies.
69 It is apparent from recital 56 and Table 3 of the contested regulation that the EU institutions investigated the change in the production volumes of the cooperating companies. It is clear from that analysis that, between 2009 and the end of the reporting period, that the output of the cooperating Sri Lankan companies decreased slightly.
70 In that regard, it must be noted, first of all, that it was legitimate for the EU institutions to rely on the figures of the cooperating Sri Lankan companies alone, since the figures for the other companies were consequently neither available nor reliable. Next, as the Council rightly noted, it is apparent from the tables to be completed, in annex to the exemption form, that the applicants had to provide information concerning their production volumes as from 2004. The Commission did indeed therefore investigate the production volumes for the whole of the investigation period. In its pleadings, the Council has justified limiting itself to the period from 2009 to August 2012 because the data relating to the first years was not fully complete for all the companies. Lastly, it must be stated that the output of the cooperating Sri Lankan companies decreased slightly during the period from 2009 to August 2012. During that period at least, the change in the production volumes of the cooperating companies cannot therefore be a normal factor explaining the increase in Sri Lankan exports to the European Union.
71 Consequently, having regard to the foregoing (paragraphs 63 to 70 above), the Council was properly entitled to conclude that there was no alternative explanation for the change in the pattern of trade.
72 The first part of the first plea in law must therefore be rejected in its entirety as unfounded.
– The carrying out of transhipment operations
73 In the context of the second part of the present plea, the applicant puts forward four claims.
74 In the first place, the applicant submits that the Council made a manifest error of assessment in concluding that it engaged in transhipment operations.
75 In the second place, the applicant maintains that the Council erred in law by inferring transhipment merely from the change in the pattern of trade. The Council neither provided evidence of such transhipment operations nor established a causal link between such operations and the supposed change in the pattern of trade.
76 In the third place, the applicant submits that, for want of any other evidence, the information which it provided should have constituted the facts available, within the meaning of Article 18(1) of the basic regulation. It was for the Council, not the applicant, to prove that it had engaged in transhipment.
77 In the fourth place, the applicant maintains that the Council failed to provide reasons for its finding of transhipment.
78 The Council disputes all the applicant’s arguments.
79 As regards the first claim, the applicant submits that it is indeed a Sri Lankan bicycle producer and that it cannot therefore be involved in circumvention practices. It states that it is apparent from its reply to the exemption form, in particular, that [confidential]. (1) It does not deny that it imported a certain number of components from China. Those components were then used in order to manufacture bicycles at its factory based in Panadura (Sri Lanka), which employed [confidential].
80 In support of that claim, the applicant relies essentially on (i) the content of its reply to the exemption form and its audited annual reports (see, in that regard, paragraphs 83 to 91 below), (ii) an audit report by Bureau V (see, in that regard, paragraphs 92 and 93 below), (iii) the fact that its production facilities were fully operational at the time of the verification visit, (iv) photos and two videos taken before and after the imposition of the duties (see, to that effect, paragraph 94 below), and (v) a report by the European Anti-Fraud Office (OLAF) in which OLAF had concluded that there was no evidence that the applicant was involved in transhipment operations (see, in that regard, paragraphs 95 and 96 below).
81 In that regard, it must be noted that the basic regulation does not confer on the Commission investigating powers enabling it to compel companies to participate in an investigation or to produce information. In those circumstances, the Council and the Commission depend on the voluntary cooperation of the parties in supplying the necessary information within the time-limits set. In that context, the information submitted in the exemption form and the subsequent on-the-spot verification which the Commission may carry out are essential to the operation of the anti-circumvention procedure. The cooperating companies must therefore be precise and accurate in the information and evidence they submit both in their replies to the written and oral questions and during the verification visit (see, to that effect, judgment in JBF RAK v Council, paragraph 64 above, EU:T:2012:262, paragraph 80 and the case-law cited).
82 In the present case, it must be found that the applicant did indeed provide a certain amount of relevant evidence in the exemption form. In particular, it provided aggregated information, in the context of the tables annexed to the exemption form, in relation to its production capacities, its actual production, its export sales, its turnover, certain financial and accounting information, and a large number of diagrams concerning its manufacturing processes.
83 However, in the first place, it must be noted that the information provided by the applicant in the exemption form submitted on 30 October 2012 turned out to be deficient because it was to a large extent incomplete and could not therefore prove that the applicant was indeed a producer of bicycles of Sri Lankan origin. Nor was the applicant able to justify a certain number of inconsistencies pointed out by the Commission in the figures submitted, or provide the evidence necessary to demonstrate that they were reliable. In particular, it failed to clarify its relationship with its main commercial partner, undertaking A.
84 In that regard, first, it must be noted that the applicant was unable, in the tables annexed to the exemption form to break down precisely the costs of the bicycle parts used according to their origin. In addition, it is apparent from those tables that the cost of the parts of Chinese origin purchased was much lower than the cost of the parts of Chinese origin used, thus creating confusion as to the volume and value of the parts of Chinese origin actually used.
85 On that point, the applicant states that the bicycle parts of Chinese origin do not appear in the accounts because of the agreement with undertaking A which manages its supply of bicycle parts. It is apparent from the exemption form that the applicant does indeed operate on the basis of an agreement with that third party, which provides it with bicycle parts and is then involved in the sale of complete bicycles. The applicant stated in the exemption form that its sales within the European Union were made through that undertaking.
86 In the Council’s view, since the agreement between undertaking A and the applicant was not presented and undertaking A did not cooperate in the investigation, it was not possible to establish precisely the relationship between the two parties or the selling process.
87 In that regard, it must be noted that the applicant does not deny that it did not provide, in its exemption form, and then during the verification visit and the numerous subsequent exchanges with the Commission, precise and verifiable information concerning its relationship with undertaking A, its supplier and main commercial partner, in particular as regards the number and value of the components obtained from that undertaking. In its replies to the written questions from the Court, and then at the hearing, the applicant argued that there was no agreement formalising its relationship with undertaking A.
88 Nor does the applicant deny that it failed to provide detailed lists of the components used in order to produce its different bicycle models exported to the European Union, or that, more generally, its accounting and financial management systems did not enable the costs of the raw materials used to be determined according to their origin, although this is essential in an anti-circumvention proceeding. The figures provided by the applicant, in particular in the audited annual accounts presented during the verification visit, distinguish only between the parts which it obtained locally and imports, the latter not being broken down by country. Admittedly, the applicant seems to use ratios or ‘allocation keys’ intended to define the value of the non-Chinese parts in the total value of sales. However, the document supplied in that regard by the applicant at the verification visit is inconclusive, in particular having regard to the fact that it relates only to the period from 2009 to 2011 and that those ratios do not relate specifically to the bicycles exported to the European Union.
89 In those circumstances, the exemption form and the evidence adduced in support thereof do not enable the origin of the bicycle parts used by the applicant to be determined.
90 Secondly, it must be noted in that context that the applicant’s staff failed during the verification visit to provide the worksheets used in order to complete the exemption form. However, those worksheets must enable the reply to the exemption form to be reconciled with the exporter’s financial and accounting documents. By its letter of 3 January 2013, the Commission had, however, informed the applicant beforehand that it would have to provide all documents at the verification visit, in particular the worksheets, enabling the Commission to verify the figures put forward in the exemption form. The attempts by the Commission’s agents during the verification visit to reconcile the audited annual accounts and the figures provided in the exemption form were, in those circumstances, unsuccessful.
91 Thirdly, it must be stated that the applicant has failed to provide certain other information concerning, in particular, the labour costs, its production volumes, and the changes in production capacities in the light of the investments agreed to or the export costs. By its letter of 7 December 2012, the Commission had requested the applicant, by means of 10 precise questions, to provide it with the missing information by 17 December 2012 at the latest, that is to say before the verification visit. The applicant did not reply to that letter (see also, in that regard, paragraphs 146 to 150 below). In its reply to the general disclosure document of 12 April 2013 and its letter of 27 May 2013, the applicant had still not provided specific evidence capable of clarifying those points, reinforcing the doubts of the EU institutions as to its actual activities.
92 In the second place, as regards Bureau V’s audit report of 24 October 2011, which was followed up on 24 February 2012, it must be found that that report does not, in any event, show that that applicant itself produced bicycles of Sri Lankan origin or that it could meet the criteria of Article 13(2) of the basic regulation, as the Council correctly states.
93 That report does not concern the question whether or not the applicant engaged in practices, processes or work for which there was insufficient due cause or economic justification other than the imposition of the initial anti-dumping duty. The report shows at most that, at the date of publication, the applicant was involved in the production of bicycles. In that regard, it must be noted that the audit report relates essentially to working conditions and effective organisation. It does not therefore contain any relevant data on changes in production volumes and on the origins of the components in particular.
94 In the third place, the photos and the two videos provided by the applicant to the Court also fail to prove that it was a producer of Sri Lankan bicycles and, therefore, that it was not involved in circumvention within the meaning of Article 13 of the basic regulation, since they do not enable the origin of the raw materials used throughout the whole of the investigation period to be determined in particular. That finding also applies to the applicant’s assertion that its factories were operational during the verification visit.
95 In the fourth place, as regards the OLAF report on the compliance with the rules of origin, drafted following several requests for information and factory inspections in May and October 2011, the applicant maintains that it is apparent from that report, based moreover on a much more in-depth analysis that than carried out when the contested regulation was adopted, that it did not engage in any transhipment.
96 In that regard, it suffices to note that the OLAF report simply states, on the basis in particular of the analysis of certain specific cargoes and product batches destined for the European Union, that its teams did not obtain any evidence of transhipments during the investigation, in particular during the inspection. In those circumstances, although the OLAF report does indeed cover part of the reporting period, it does not allow any conclusion to be drawn in terms of Article 13 of the basic regulation. The applicant’s argument must therefore be rejected.
97 Consequently, the exemption form, the audit report from Bureau V, the photos and videos submitted at various points of the judicial proceedings, and the OLAF report, on which the applicant relies, cannot prove that the applicant was indeed a producer of Sri Lankan origin nor that it met the criteria laid down in Article 13(2) of the basic regulation. In particular, it must be found that the applicant failed to provide figures, and also evidence capable of proving their reliability, as regards all its purchases of components, including principally those from undertaking A.
98 None the less, it must be found that, on the basis of the documents before the Court, the Council had no evidence from which it could expressly conclude, in recital 78 of the contested regulation, that the applicant was involved in transhipment operations, that it to say the consignment of the product subject to the measures via third countries.
99 Admittedly, it cannot be ruled out that the practices, processes or work for which there is insufficient due cause or economic justification other than the imposition of the initial anti-dumping duty, within the meaning of the second subparagraph of Article 13(1) of the basic regulation, included the engagement of the applicant in transhipment operations. However, the fact that the applicant was unable to show that it was indeed a Sri Lankan producer or that it satisfied Article 13(2) of the basic regulation did not enable the Council to conclude by default that the applicant was engaged in transhipment, such a power being apparent neither from the basic regulation nor the case-law.
100 In those circumstances, the second part of the first plea in law must be upheld, and there is no need to deal with the applicant’s other claims.
The second plea in law, alleging infringements of Article 18 of the basic regulation, of procedural rights, of the obligation to state reasons and of the principle of proportionality
101 The second plea in law is divided into four parts intended to show that the Council made errors of law and of assessment, in recitals 37 and 38 of the contested regulation, in taking the view that the applicant had not cooperated within the meaning of Article 18 of the basic regulation. By the first part of the plea, the applicant maintains that it cooperated to the best of its ability, which the Council failed to take into account in breach of Article 18 of the basic regulation. By the second part of the plea, also alleging infringement of Article 18 of the basic regulation, the applicant disputes the finding of non-cooperation. By the third part of the plea, the applicant submits that the Council infringed its obligation to state reasons by failing in particular to explain which available facts, within the meaning of Article 18(1) of the basic regulation, it took into account. By the fourth part of the plea, the applicant submits that the Council failed, in breach of Article 18(3) of the basic regulation, to take into account the information provided by it throughout the investigation. In addition, the failure to take into consideration all the information provided by the applicant constitutes an infringement of the principle of proportionality.
102 The Council disputes all the applicant’s arguments.
103 The Court considers that it is necessary to deal, first of all, with the second part of the plea and then in turn with the first, third and fourth parts.
– The finding of non-cooperation
104 In the first place, the applicant maintains that the Council’s conclusion is exclusively based on the fact that the applicant operates under the so-called ‘consignment’ model. It observes in this connection that it also purchases some components and raw materials from local suppliers.
105 In the second place, the applicant states that the finding of non-cooperation relates to the assembly operations. Since the finding of circumvention via Sri Lanka is based solely on an allegation of transhipment in the contested regulation, the finding of non-cooperation relates to a matter irrelevant to the Council’s claim of circumvention.
106 In the third place, the applicant alleges breach of its rights to a fair hearing, in that the Commission failed to inform it that the finding of non-cooperation related to transhipment operations, not assembly operations.
107 In the fourth place, the applicant emphasises that the finding that it cooperated during OLAF’s investigation contradicts the finding of non-cooperation in the anti-circumvention investigation.
108 In that regard, it must be noted at the outset that the first sentence of Article 18(1) of the basic regulation authorises the institutions to use the facts available in cases in which any interested party refuses access to, or otherwise does not provide, necessary information within the time-limits provided in that regulation, or in which it significantly impedes the investigation. The use of facts available is also authorised if any interested party supplies false or misleading information. It is apparent from the wording of that provision that these four conditions are alternatives, so that if just one of them is satisfied, the institutions may use the facts available as the basis for their provisional or final findings (judgment of 22 May 2014 in Guangdong Kito Ceramics and Others v Council, T‑633/11, EU:T:2014:271, paragraph 44).
109 In the present case, in the first place, it must be noted that the lack of cooperation is not based on the applicant’s mode of operation, referred to as ‘consignment’, involving undertaking A. The applicant was not penalised for its business model, but for its inability to produce the necessary information concerning the origin of the products. It is apparent from the contested regulation that the finding of non-cooperation is based, in particular, on the contradictory and unreliable nature of the information submitted, as well as on the difficulties encountered during the verification visit. In that regard, the provision of certain invoices showing that the applicant sometimes obtained supplies on its domestic market is not sufficient to prove that it was indeed a producer of bicycles of Sri Lankan origin or that it satisfied the criteria under Article 13(2) of the basic regulation. In addition, it must be observed that one of the companies competing with the applicant, undertaking B, obtained the exemption, although it used the same ‘consignment’ model. The use of such a business model did not therefore make it impossible to submit the necessary information, within the meaning of Article 18(1) of the basic regulation.
110 In the second place, the applicant submits that the failure to cooperate relates only to assembly operations, not transhipment operations. It states, in that regard, that the allegedly insufficient cooperation relates only to the value of the parts of Chinese origin. In the applicant’s view, that information was only necessary to determine whether it was engaged in assembly operations, that is whether it was complying with the rules relating to the share of parts imported from China in the total value of the manufactured product, in accordance with Article 13(2) of the basic regulation. Since the circumvention via Sri Lanka was, in the contested regulation, solely based on transhipment operations, the finding of non-cooperation relates, in the applicant’s view, to findings which are irrelevant for the purposes of the claim of circumvention raised by the Council.
111 In that regard, first, it must be noted that it is apparent from the exemption form submitted by the applicant that it sought to show that it met the criteria laid down in Article 13(2) of the basic regulation. It was therefore legitimate for the Commission, in Annex B to the general disclosure document, to give reasons for its decision not to grant the applicant an exemption by stating that it had been unable to perform the calculations relating to those criteria on the basis of the information submitted. It must be noted, in that regard, that the investigation concerned the existence of circumvention via Sri Lanka, not the existence of a particular form of circumvention. In recital 9 of Regulation No 875/2012 opening the anti-circumvention investigation, the Commission mentioned moreover, as regards Sri Lanka, possible transhipment and assembly operations.
112 Secondly, it must be noted that the applicant has failed to show that it was indeed a producer of bicycles of Sri Lankan origin or that it satisfied the criteria laid down in Article 13(2) of the basic regulation, that is say, that it was unable to prove the origin of the bicycles that it exported in significant numbers to the European Union. The information submitted by the applicant was, in any event, insufficient, since the purpose of the investigation was to determine whether the applicant had participated in circumvention of the initial anti-dumping duty via Sri Lanka, regardless of the subsequent characterisation of those practices by the Council.
113 In the third place, as regards the applicant’s argument that its due process rights were infringed, since the Commission did not inform it that the finding of non-cooperation related to transhipment operations, not assembly operations, it must be found that the applicant had the opportunity to develop its position on numerous occasions during the administrative procedure. As is apparent from paragraph 111 above, it was legitimate for the Commission to give reasons for its decision not to grant the applicant an exemption by stating that it had been unable to perform the calculations relating to the criteria in question on the basis of the information submitted. In addition, it must be pointed out that the Commission has always clearly established the nature of the information requested. First of all, it is apparent from the ‘Introduction’ section of the exemption form, in particular, that a subsequent verification visit might take place and that to that end the applicant had to retain all the documents used when preparing the reply to the exemption form, in particular the worksheets. That document also warns against the consequences of a finding of non-cooperation. It is also stated in that document that, should the company encounter difficulties in completing the form, it may contact the Commission, which the applicant did on several occasions. Lastly, it is apparent from the Commission’s letters of 7 December 2012 and 3 January 2013 that the Commission specified clearly the documents requested. It must therefore be found that the applicant did have a fair hearing in that regard and that finding does not call in question the Council’s error of assessment found in paragraphs 98 to 100 above.
114 In the fourth place, it must be noted that even if the applicant cooperated in a satisfactory manner in the context of the OLAF investigation on compliance with the rules of origin, which the Council denies, this could not lead to a finding of cooperation in the anti-circumvention proceedings, which are a different set of proceedings. The applicant’s argument that the finding of cooperation during the OLAF investigation conflicts with the finding of non-cooperation of the contested regulation must therefore, in any event, be rejected as ineffective.
115 In those circumstances, the second part of the second plea in law must be rejected as in part unfounded and in part ineffective.
– The effects of the applicant’s cooperation
116 By the first part of the plea, the applicant submits that the Council failed, in breach of Article 18 of the basic regulation, to take into account the fact that it had cooperated to the best of its ability. The applicant states in that regard, in particular, that it applied for an exemption and provided a non-confidential version of its reply to the questionnaire, that it agreed to receive the Commission’s team during the verification visit and that it had continuous contacts thereafter with the Commission’s services. In addition, the cooperation took place in difficult circumstances, in that the applicant had limited administrative resources and was not familiar with the Commission’s administrative procedures.
117 In that regard, in the first place, it should be noted that recourse to the facts available is justified where an undertaking refuses to cooperate or where it supplies false or misleading information, the second sentence of Article 18(1) of the basic regulation not requiring that conduct to be intentional. The degree of effort displayed by an interested party in submitting certain information does not necessarily reflect the substantive quality of the information submitted, and in any case is not the only determinant thereof. Thus, where the requested information is not ultimately obtained, the Commission is entitled to resort to the facts available in respect of the requested information (judgment of 4 March 2010 in Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, ECR, EU:T:2010:69, paragraphs 103 and 104).
118 In addition, it must be borne in mind that it is for the EU institutions to decide whether, for the purposes of checking the information supplied by an interested party, it is necessary to corroborate that information by a verification visit at the premises of that party and that, where an interested party impedes verification of the information which it has supplied, Article 18 of the basic regulation applies and the facts available may be used. Although a refusal to allow a verification visit to go ahead runs counter to the objective of honest and diligent cooperation which Article 18(1) of the basic regulation seeks to ensure, the fact of agreeing to a verification visit cannot in itself result in a finding of cooperation (see, to that effect, judgment of 25 October 2011 in Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, T‑192/08, ECR, EU:T:2011:619, paragraphs 273 and 275).
119 In those circumstances, the submission of an application for exemption, receiving the Commission’s team during the verification visit and maintaining continuous contacts thereafter with the Commission’s services is not sufficient to lead to a finding of cooperation or an obligation on the EU institutions to take into account deficient information. In addition, the data requested by the Commission, in the present case, cannot be considered to impose a particularly heavy administrative burden. Indeed, according to the Council, there were nine people employed in the applicant’s sales and administration department, which the applicant does not deny.
120 In the second place, it must be noted that Article 18(3) of the basic regulation provides that where the information submitted by an interested party is not ideal in all respects, it should nevertheless not be disregarded, provided that any deficiencies are not such as to cause undue difficulty in arriving at a reasonably accurate finding, that the information is appropriately submitted in good time and is verifiable, and that the party has acted to the best of its ability. It is evident from the wording of that provision that the four conditions are to be applied cumulatively. Accordingly, if just one of them is not satisfied, that provision cannot be applied and the information in question cannot be taken into account (judgment in Guangdong Kito Ceramics and Others v Council, paragraph 108 above, EU:T:2014:271, paragraph 100).
121 In the present case, since the applicant has not provided the necessary information, within the meaning of Article 18(1) of the basic regulation, capable of showing that it was indeed a producer of Sri Lankan origin or that it satisfied the criteria laid down in Article 13(2) of the basic regulation, as has been established in paragraph 97 above, Article 18(3) of the basic regulation could not apply. In addition, even if, first, the applicant provided the necessary information and, secondly, it did in fact cooperate to the best of its ability, it has already been established that the information provided was not verifiable.
122 The first part of the second plea in law must therefore be rejected as unfounded.
– The statement of reasons
123 The applicant submits, in the first place, that the Council should have drawn a distinction between cooperation in relation to the claim of assembly and cooperation in relation to the claim of transhipment. The Council failed to specify whether the information provided related to the claim of transhipment or to the claim of assembly and the contested regulation is thus vitiated by a failure to state reasons.
124 In the second place, the applicant argues that, after rejecting all the information provided, the Council failed to clarify the facts available, within the meaning of Article 18(1) of the basic regulation, on the basis of which it reached its finding of circumvention. The applicant also submits that the Council ought to have explained why the facts available used were the best facts.
125 It must be borne in mind that the statement of reasons of a measure of an EU institution must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for it and defend their rights and to enable the Court to exercise its power of review (judgment of 27 September 2005 in Common Market Fertilizers v Commission, T‑134/03 and T‑135/03, ECR, EU:T:2005:339, paragraph 156). In addition, the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see, to that effect, judgments of 29 February 1996 in Belgium v Commission, C‑56/93, ECR, EU:C:1996:64, paragraph 86, and in Kaysersberg v Commission, paragraph 43 above, EU:T:1997:186, paragraph 150).
126 In the present case, the Council observed those principles, for the reasons set out below.
127 In the first place, as regards the applicant’s argument that the Council ought to have distinguished between cooperation as regards the assembly claim and cooperation as regards the transhipment claim, it must be noted that it has been established in paragraph 111 above that the investigation concerned the existence of circumvention via Sri Lanka, not the existence of a particular form of circumvention. In addition, the evidence to be taken into account in order to assess cooperation was similar as regards transhipment and assembly. There was therefore no need, contrary to what the applicant claims, to separate the assessment of the applicant’s cooperation as regards, first, the claim of assembly and, secondly, the claim of transhipment.
128 In addition, it must be found that the reasoning set out in recital 37 of the contested regulation is correctly substantiated, in the light of the case-law cited in paragraph 125 above. It is apparent from that recital that the Council took the view that the data submitted by the applicant was unverifiable, as the value and volume of the parts of Chinese origin purchased by the company had not been able to be reliably determined. Moreover, the value and volume of the parts used in the manufacturing process could not be verified, as they had been purchased by a third party and only consigned to the company for assembly.
129 In that regard, the multiple exchanges between the applicant and the Commission during the investigation must also be taken into account.
130 In the second place, it must be found that the exact nature of the facts available was indeed not expressly listed by the Council in the contested regulation.
131 However, it is apparent, in particular, from recitals 35 to 42, 45, 48, 50, 53, 55, 56, 92 and 107 to 110 of the contested regulation that the facts available include all the data used by the Council in order to conclude that there was circumvention by the applicant. This includes, in particular, (i) the information enabling it to be concluded that there was a change in the pattern of trade, (ii) the absence of a credible alternative explanation and (iii) the data from the Eurostat Comext database used as a basis, first, for finding that remedial effect of the initial anti-dumping duty was being undermined, and, secondly, that there was evidence of dumping in relation to the normal values previously established. In addition, the facts available include all the relevant evidence of the case, including the complaint (recitals 10 to 17 of the contested regulation).
132 In the third place, as regards the argument that the Council ought to have stated in what way the facts available that were used were the best possible, it must be noted that such an obligation is apparent from neither Article 18(1) of the basic regulation nor from the case-law. Article 18(1) of the basic regulation provides that the Council may base its conclusions on the facts available when the facts submitted are deficient (see paragraph 117 above). Since the facts submitted in the present case were deficient, the Council was not therefore required to state why the facts available used were better than the facts submitted. In addition, it must be noted that the applicant has not argued that other facts available are better than the facts available used by the Council. The applicant’s argument must therefore be rejected as unfounded.
133 In those circumstances, the third part of the second plea in law must be rejected as unfounded.
– The taking into account of the additional information provided by the applicant
134 By the fourth part of the second plea in law, the applicant maintains that the Council infringed Article 18(3) of the basic regulation and the principle of proportionality by disregarding all the information provided without considering whether some of the information could be used in connection with the claim of transhipment. It emphasises that it provided the information in good time and that it was easily verifiable, in so far as the claim of transhipment was concerned.
135 In the first place, as regards the alleged infringement of Article 18(3) of the basic regulation, it has been noted, in paragraph 120 above, that in order for Article 18(3) to apply, four cumulative conditions must be met relating in particular to the fact that any deficiencies are not such as to cause undue difficulty in arriving at a reasonably accurate finding and that the information submitted is verifiable. However, in the present case, it has been established, in the context of the first plea in law, that the information provided by the applicant was deficient, which precluded the application of Article 18(3) of the basic regulation, irrespective of the type of circumvention considered.
136 The claim alleging breach of Article 18(3) of the basic regulation must therefore be rejected as unfounded.
137 In the second place, it must be borne in mind that in accordance with the principle of proportionality, the legality of EU rules is subject to the condition that the means employed must be appropriate to attainment of the legitimate objective pursued and must not go further than is necessary to attain it, and, where there is a choice of appropriate measures, it is necessary, in principle, to choose the least onerous (judgment of 5 June 1996 in NMB France and Others v Commission, T‑162/94, ECR, EU:T:1996:71, paragraph 69).
138 In the present case, the applicant submits, in essence, that it was disproportionate to disregard the entirety of the information submitted without assessing whether some of that information could be used concerning the claim of transhipment.
139 In that regard, it is sufficient to note that the applicant failed to provide the information showing that it was indeed a Sri Lankan exporter or that it satisfied the criteria laid down in Article 13(2) of the basic regulation. The Council therefore disregarded that information without infringing the principle of proportionality.
140 In those circumstances, the fourth part of the second plea in law must be rejected as unfounded.
141 The second plea in law must therefore be rejected in its entirety.
The third plea in law, alleging breaches of Article 18(4) of the basic regulation, the principles of diligence and sound administration and infringement of the rights of the defence
142 In the first place, the applicant submits that the Commission infringed the principles of diligence and sound administration and Article 18(4) of the basic regulation by failing to inform it properly of its intention to deny the exemption request. In that regard, first, the applicant maintains that it never received the Commission’s letter of 31 January 2013 sent by email. In its replies to the written questions of the Court, it also maintained that it did not receive the letter of 7 December 2012. In addition, in the applicant’s view, the Council and the Commission ought to have used registered mail with acknowledgement of receipt rather than sending an email. Secondly, the applicant was never informed that its exemption request could be denied on the basis of a claim of transhipment.
143 In the second place, the applicant maintains that the Commission infringed its right of defence by failing to grant it full access to the investigation file, in particular, to the exemption form of the other Sri Lankan exporter that operated under the same business model.
144 The Commission disputes the applicant’s arguments.
145 In the first place, as regards the alleged infringement of Article 18(4) of the basic regulation and the principles of diligence and sound administration, it must be noted that Article 18(4) provides that ‘[i]f evidence or information is not accepted, the supplying party shall be informed forthwith of the reasons therefor and shall be granted an opportunity to provide further explanations within the time-limit specified’. It makes clear that ‘[i]f the explanations are considered unsatisfactory, the reasons for rejection of such evidence or information shall be disclosed and given in published findings’.
146 In that regard, the Court notes that it is apparent from the documents provided by the parties that the letter of 31 January 2013 was indeed sent to the contact address given by the applicant in its exemption form. That address is the same as that on the business card communicated by the commercial manager to the Commission’s agents during the verification visit, as the Council states. As regards the letter of 7 December 2012, it must be found that it was sent to the correct address. The Council indeed provided the acknowledgements of receipt from the applicant’s server and the telephone of the applicant’s commercial manager. It must also be pointed out that the same address was used in numerous other email exchanges with the Commission. The Commission did not therefore commit an error.
147 In any event, there is no need to answer the question of whether the Commission ought in the present case to have used registered mail with acknowledgement of receipt rather than an email, since it may be noted that the applicant had the time necessary to submit its observations as regards the Council’s finding of non-cooperation.
148 First, on 4 April 2013 the Commission communicated the letter of 31 January 2013 to the applicant a second time, at the latter’s request, and that left it sufficient time to submit its observations. Secondly, the applicant had over three weeks to reply to the general disclosure document. The applicant submitted its observations on all those documents by its letter of 12 April 2013. On 27 May 2013, the applicant also submitted observations on the draft regulation submitted to the Council by the Commission on 6 May 2013 and then adopted on 29 May 2013.
149 As regards the applicant’s argument that it was never informed that its application for exemption could be refused on the basis of a claim of transhipment, it suffices to note that it has already been established, in paragraphs 111 and 112 above, that the Commission had not committed an error, since the same anti-circumvention proceedings were at issue and the applicant had sought to show that it met the criteria laid down in Article 13(2) of the basic regulation.
150 In those circumstances, the applicant’s arguments concerning infringements of the principles of diligence and sound administration and of Article 18(4) of the basic regulation must be rejected as unfounded.
151 In the second place, as regards the access to the investigation file, it must be noted that it is apparent from Article 6(7) of the basic regulation concerning investigations, that exporters, such as the applicant, ‘may, upon written request, inspect all information made available by any party to an investigation, as distinct from internal documents prepared by the authorities of the [European Union] or its Member States, which is relevant to the presentation of their cases and not confidential within the meaning of Article 19 [of the basic regulation], and that it is used in the investigation’. That provision states that ‘[Those] parties may respond to such information and their comments shall be taken into consideration, wherever they are sufficiently substantiated in the response’.
152 In addition, it must be borne in mind that it is settled case-law that the principle of respect for the rights of the defence is a fundamental principle of EU law (see judgment of 28 October 2004 in Shanghai Teraoka Electronic v Council, T‑35/01, ECR, EU:T:2004:317, paragraph 288 and the case-law cited).
153 In accordance with that principle, the undertakings affected by an investigation preceding the adoption of an anti-dumping regulation must be placed in such a position during the administrative procedure that they can effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegations (see judgment in Shanghai Teraoka Electronic v Council, paragraph 152 above, EU:T:2004:317, paragraph 289 and the case-law cited).
154 In addition, the procedural irregularity in question can render the regulation imposing definitive anti-dumping duties unlawful only if, as a result of the omission, the parties were not in a position to defend their interests effectively (see, by analogy, judgment in Shanghai Teraoka Electronic v Council, paragraph 152 above, EU:T:2004:317, paragraph 292 and the case-law cited).
155 It must also be borne in mind that it is apparent from the case-law that in anti‑dumping matters, in the event of a procedural issue, it is for the applicant to place the EU institutions in a position to assess the difficulties which the procedural issue could cause it. Having failed to have sufficiently alerted the EU institutions in that regard, the applicant cannot rely on infringement of its rights of defence (see, to that effect, judgment of 17 December 2008 in HEG and Graphite India v Council, T‑462/04, ECR, EU:T:2008:586, paragraphs 47 and 48 and the case-law cited).
156 In the present case, it is apparent from the documents before the Court that the applicant submitted its request for access to the file on 17 May 2013, that is 12 days before the adoption of the contested regulation. Following the agreement of the Commission’s services, the applicant was able to access the investigation file on 23 May 2013. It informed the Commission on 5 June 2013 that the file was incomplete. In the applicant’s view, the file did not contain, in particular, any non‑confidential version of the exemption forms of the other Sri Lankan exporters. On 11 June 2013, the Commission stated in reply to the applicant that, following the adoption of the contested regulation, its comments could not be taken into account. The applicant applied to the hearing officer on the same date. On 14 June 2013, the hearing officer replied to the applicant stating that, after checking, the file had been completed and could be consulted again. The applicant had access a second time to the file on 18 June 2013. It informed the hearing officer that the file was still incomplete on 11 July 2013. The applicant states in that regard that certain non-confidential versions of the exemption forms were still missing.
157 In that regard, it must be found at the outset that, contrary to what the Council contends, the applicant’s request was submitted in good time. The request was submitted nearly two weeks before the contested regulation was adopted.
158 However, the applicant stated to the Commission that the public version of the file was incomplete only on 5 June 2013, that is after the contested regulation had been adopted. At that stage, the Commission was no longer in a position to remedy effectively the error noted. In addition, it must be found that, during the multiple exchanges between the Commission’s services and the applicant, the applicant at no stage raised that problem, nor requested access to the file.
159 In those circumstances, the procedural issue concerned cannot lead to the annulment of the contested measure.
160 For the sake of completeness, it must also be pointed out that, following a measure of organisation of procedure, the Council provided the missing documents before the hearing, in particular those concerning the other Sri Lankan exporter using the same business model. Since the applicant did not put forward, at the hearing, any new argument to prove that those documents could have been useful to its defence, it is appropriate, in any event, to reject its arguments concerning an infringement of its rights of defence as unfounded.
161 The third plea in law must therefore be rejected in its entirety.
The fourth plea in law, alleging infringement of the principle of equal treatment
162 The applicant argues that the Council breached the principle of equal treatment by granting other undertakings, in particular undertaking B, an exemption even though they are not in a different situation from the applicant. The applicant and undertaking B operate under the same business model, work with the same third company and, since 2005, have exported approximately the same number of bicycles to the European Union.
163 The Commission disputes the applicant’s arguments.
164 In that regard, it must borne in mind that, according to settled case-law, the principle of equal treatment and non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (see judgment of 14 April 2005 in Belgium v Commission, C‑110/03, ECR, EU:C:2005:223 paragraph 71 and the case-law cited).
165 In the present case, first, it must be pointed out that, contrary to the applicant’s claims, the finding of a lack of cooperation on the part of the applicant is not based, in the contested regulation, on the business model, but on the fact that the applicant failed to provide the necessary information within the meaning of Article 18(1) of the basic regulation. Company B did, however, provide the necessary information and therefore benefited from the exemption under Article 13(2) of the basic regulation.
166 Secondly, as has been mentioned in paragraph 160 above, following the communication by the Council of all the documents relating to undertaking B, the applicant did not put forward any additional argument concerning the existence of an infringement of the principle of equal treatment.
167 In those circumstances, the fourth plea in law must be rejected as unfounded.
The fifth plea in law, alleging infringements of Article 13(1) of the basic regulation and of the principle of equal treatment
168 In the first place, the applicant submits that the Council committed errors of fact and of assessment by using pricing data from Eurostat’s Comext database. In the applicant’s view, it has been recognised in all the review phases of the anti-dumping regulations relating to imports of bicycles and bicycle parts originating in China that the data from Eurostat’s Comext database was not reliable and could not enable conclusive comparisons to be made.
169 In the second place, the applicant submits that the Council infringed Article 13(1) of the basic regulation and the principle of equal treatment by excluding the applicant’s own export price data. In the applicant’s view, the taking into consideration of the data of the cooperating companies distorted the figures concerning the existence of dumping.
170 The Council disputes the applicant’s arguments.
171 In that regard, it must be noted that it is apparent from Article 13(1) of the basic regulation that in order for there to be circumvention there must be evidence of dumping in relation to the normal values established during the initial anti‑dumping investigation.
172 In addition, it is apparent from the basic regulation that the EU institutions must choose the most appropriate method in order to calculate the dumping and that that choice requires an appraisal of complex economic situations (see, to that effect, judgment of 10 March 1992 in Minolta Camera v Council, C‑178/87, ECR, EU:C:1992:112, paragraph 41).
173 In the present case, in the first place, the Court notes that it has been established that the applicant had not cooperated, within the meaning of Article 18 of the basic regulation, since the data provided were not reliable and were unverifiable. In those circumstances, since the Council did not have reliable facts as regards the applicant and the companies did not make themselves known, it could rightly rely on the facts available.
174 In the second place, the applicant calls in question the use of the data from Eurostat’s Comext database for the facts available, within the meaning of Article 18(1) of the basic regulation. It refers to Regulation No 1095/2005, Implementing Regulation No 990/2011 and Regulation No 502/2013, in which the reliability of that data was allegedly called in question.
175 In that regard, first, it must be pointed out that the three regulations cited by the applicant did not concern anti-circumvention proceedings. They concerned, respectively, the increase of a definitive anti-dumping duty at the end of an interim review, the maintenance of a definitive anti-dumping duty at the end of an expiry review and an interim review.
176 Secondly, it must be noted that the export prices of the producers which had not cooperated were calculated in different ways in those three regulations. In Regulation No 1095/2005, the data of the cooperating companies was used, since the data from Eurostat’s Comext database was not considered sufficiently precise in the case of a full review of the conclusions relating to dumping and injury. On the other hand, in Implementing Regulation No 990/2011, the data from the Eurostat Comext database was indeed used, only one undertaking having cooperated. In Regulation No 502/2013, the data from Eurostat’s Comext database was used only to a certain extent, since that data was again not considered sufficiently precise for the specific case of an interim review.
177 Contrary to the applicant’s claims, the data from Eurostat’s Comext database was not therefore considered deficient in the three regulations referred to. In addition, it must be pointed out that the dumping was calculated in various ways according to the object of the investigation and the circumstances of the case.
178 Thirdly, those regulations concerned China and Vietnam, not Sri Lanka. The applicant has not adduced any evidence capable of proving that those findings are also relevant as regards Sri Lanka.
179 In those circumstances, the applicant’s arguments concerning the reliability of the data from Eurostat’s Comext database must be rejected as unfounded.
180 In the third place, as regards the arguments alleging an infringement of the principle of equal treatment, the applicant submits that if the figures used by the Council — that is, in the applicant’s view, essentially the figures of the cooperating exporters — did constitute evidence of dumping, the Commission should then have opened an anti-dumping investigation with respect to the other Sri Lankan producers instead of singling out the applicant as the improbable sole cause of the EU industry’s difficulties.
181 In that regard, first, it must be noted that the EU institutions concluded that there was evidence of dumping in relation to the normal values previously established during the earlier anti-dumping investigation, not in relation to the normal value of the sales of those exporters on the national market. The findings set out in the contested regulation did not therefore indicate the need to initiate a separate anti-dumping investigation concerning the Sri Lankan producers. In addition, it must also be noted that the cooperating producers were able to prove that they did not participate in the circumvention, unlike the applicant.
182 Secondly, the Council stated, in reply to a written question from the Court, that the volumes and value of the exports of the cooperating producers were deducted from the aggregate data concerning the whole of the Sri Lankan exporters available in the Comext database. Consequently, the Council did not use the data of the cooperating producers in order to conclude that there was evidence of dumping, contrary to the applicant’s claims.
183 In the light of the foregoing (paragraphs 171 to 182 above), it must be concluded that the applicant has failed to establish that the Council made errors of law or of assessment or that the principle of equal treatment was infringed, as regards the existence of evidence that there was dumping.
184 Consequently, the fifth plea in law must be rejected in its entirety as unfounded.
185 In the light of all the foregoing, in particular paragraphs 98 to 100 above, Article 1(1) and (3) of the contested regulation must be annulled to the extent that it concerns the applicant.
Costs
186 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Council has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.
187 The Commission and Maxcom are to bear their own costs, in accordance with the first and third subparagraphs of Article 87(4) of the Rules of Procedure.
On those grounds,
THE GENERAL COURT (Seventh Chamber)
hereby:
1. Annuls Article 1(1) and (3) of Council Implementing Regulation (EU) No 501/2013 of 29 May 2013 extending the definitive anti-dumping duty imposed by Implementing Regulation (EU) No 990/2011 on imports of bicycles originating in the People’s Republic of China to imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, whether declared as originating in Indonesia, Malaysia, Sri Lanka and Tunisia or not, to the extent that it concerns City Cycle Industries;
2. Orders the Council of the European Union to pay the costs incurred by City Cycle Industries and to bear its own costs;
3. Orders the European Commission and Maxcom Ltd to bear their own costs.
Van der Woude | Wiszniewska-Białecka | Ulloa Rubio |
Delivered in open court in Luxembourg on 19 March 2015.
[Signatures]
Table of contents
Background to the dispute
The principal initial anti-dumping and anti-subsidy procedures
The circumvention procedure
Contested regulation
Procedure and forms of order sought
Law
Admissibility
Substance
The first plea in law, alleging infringements of Articles 13(1) and 18(1) of the basic regulation
– The change in the pattern of trade
– The carrying out of transhipment operations
The second plea in law, alleging infringements of Article 18 of the basic regulation, of procedural rights, of the obligation to state reasons and of the principle of proportionality
– The finding of non-cooperation
– The effects of the applicant’s cooperation
– The statement of reasons
– The taking into account of the additional information provided by the applicant
The third plea in law, alleging breaches of Article 18(4) of the basic regulation, the principles of diligence and sound administration and infringement of the rights of the defence
The fourth plea in law, alleging infringement of the principle of equal treatment
The fifth plea in law, alleging infringements of Article 13(1) of the basic regulation and of the principle of equal treatment
Costs