Case T-423/09

Dashiqiao Sanqiang Refractory Materials Co. Ltd

v

Council of the European Union

(Dumping – Imports of certain magnesia bricks originating in the People’s Republic of China – Regulation closing an interim review – Comparison between the normal value and the export price – Inclusion of value added tax in the country of origin – Application of a method different from that used in the original investigation – Change of circumstances – Article 2(10)(b) and Article 11(9) of Regulation (EC) No 384/96 (now Article 2(10)(b) and Article 11(9) of Regulation (EC) No 1225/2009))

Summary of the Judgment

1.      Common commercial policy – Protection against dumping – Review procedure – Comparison between the normal value and the export price on a ‘value added tax inclusive’ basis

(Council Regulations No 384/96, Arts 2(10)(b) and 11(3), No 1659/2005, No 826/2009 and No 1225/2009, Arts 2(10)(b) and 11(3))

2.      Common commercial policy – Protection against dumping – Dumping margin – Comparison between the normal value and the export price – Discretion of the institutions – Comparison at the same level of trade

(Council Regulations No 384/96, Arts 1(2) and 2(10), and No 1225/2009, Arts 1(2) and 2(10))

3.      Common commercial policy – Protection against dumping – Review procedure – Change of calculation method

(Council Regulations No 384/96, Arts 2(10), 11(9) and 17, and No 1225/2009, Arts 2(10), 11(9) and 17)

1.      Since, in Regulation No 826/2009, amending Regulation No1659/2005 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain magnesia bricks originating in the People’s Republic of China, the Council takes the view that, in the interim partial review procedure of an anti-dumping measure carried out under Article 11(3) of the Basic Anti-dumping Regulation No 384/96 (now Article 11(3) of Regulation No 1225/2009), in contrast to the position in the original investigation, the conditions for an adjustment of the normal value and/or of the export price under Article 2(10)(b) of the Basic Regulation (now Article 2(10(b) of Regulation No 1225/2009) are not satisfied, so that that provision cannot be applied, there is no reason to consider that, in Regulation No 826/2009, the Council, by using the figure of 17% value added tax, applied Article 2(10)(b) of the Basic Regulation and thus made adjustments within the meaning of that provision to the normal value and the export price in order to restore symmetry between that value and that price. Consequently, there is no reason to consider that the comparison method applied in Regulation No 826/2009 consists of adjusting the normal value and the export price under Article 2(10)(b) of the Basic Regulation. The comparison between that value and that price on a ‘value added tax-inclusive’ basis is made solely by reference to the general terms of the first and second sentences of Article 2(10) of the Basic Regulation (now the first and second sentences of Article 2(10) of Regulation No 1225/2009).

(see paras 37-38)

2.      In the sphere of measures to protect trade, the institutions enjoy a broad discretion by reason of the complexity of the economic, political and legal situations which they have to examine. That discretion extends to appraisal of the facts relied on to demonstrate the fairness of the comparison method used, the concept of fairness being vague in character and needing to be narrowed down by the institutions in each individual case having regard to the relevant economic context. The choice between the different methods of calculating the dumping margin together with the assessment of the normal value of a product require an appraisal of complex economic situations and the judicial review of such an appraisal must therefore be limited to verifying whether the relevant procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated, and whether there has been a manifest error in the appraisal of those facts or a misuse of powers.

In addition, an adjustment to the export price or the normal value may be made only in order to take account of differences in factors which affect the prices and therefore their comparability. That means that the purpose of an adjustment is to re-establish the symmetry between the normal value and the export price, with the result that, if the adjustment has been validly made, that implies that it has re-established the symmetry between the normal value and the export price. By contrast, if the adjustment has not been validly made, that implies that it has created an asymmetry between the normal value and the export price.

In any assessment of the fairness of the comparison method used, the concept of symmetry between the normal value and the export price thus constitutes a key element reflecting the need to establish the comparability of prices within the meaning of Article 1(2) of the Basic Anti-dumping Regulation No 384/96 (now Article 1(2) of Regulation No 1225/2009). By virtue of the first, second and third sentences of Article 2(10) of the same regulation (now the first, second and third sentences of Article 2(10) of Regulation No 1225/2009), a fair comparison between the export price and the normal value must be made, at the same level of trade and in respect of sales made at, as closely as possible, the same time and with due account taken of other differences which affect price comparability and it is only in cases where the normal value and the export price established cannot be compared that the institutions are authorised to make adjustments.

In those circumstances, the Council does not commit any manifest error of assessment in considering that the comparison between the normal value and the export price on a ‘value added tax-inclusive’ basis constitutes a fair comparison method because that comparison is carried out in accordance with the requirement of symmetry between the normal value and the export price at the same level of trade for sales, both domestic and for export, which are all subject to the same rate of value added tax.

(see paras 40-43, 45)

3.      It is clear from Article 11(9) of the Basic Anti-Dumping Regulation No 384/96 (now Article 11(9) of Regulation No 1225/2009) that as a general rule, in a review of an anti-dumping measure, the institutions are required to apply the same method, including the method of comparing the export price and the normal value under Article 2(10) of that regulation (now Article 2(10) of Regulation No 1225/2009), as that used in the original investigation which led to the imposition of the anti-dumping duty. However, the same provision contains an exception whereby the institutions may apply a method other than that used in the original investigation only where the circumstances have changed.

Furthermore, the concepts of ‘method’ and ‘adjustment’ are not coterminous. However, even if it were accepted that the term ‘adjustment’ in Article 2(10) of the Basic Regulation could be considered the same as the term ‘method’ as used in Article 11(9) of the same regulation, since the institutions merely dispensed with any adjustment on the ground that, in contrast to the situation obtaining in the original investigation, the conditions laid down in Article 2(10)(b) of the Basic Regulation (now Article 2(10)(b) of Regulation No 1225/2009) for such an adjustment to be justified were not fulfilled at the time of the review, the mere abandonment of that adjustment cannot be regarded as a change of method within the meaning of Article 11(9) of the Basic Regulation. That provision requires that the method concerned conforms with Article 2 and Article 17 of the same regulation (now Article 2 and Article 17 of Regulation No 1225/2009), the requirements of which must be complied with in all cases. Thus, if it should be found at the review stage that application of the method used in the original investigation was not in conformity with Article 2(10)(b) of the Basic Regulation, the institutions would no longer be required to apply that method even though that might imply a ‘change of method’ in the strict sense.

Thus, where, in the review procedure, the institutions are not authorised to make an adjustment under Article 2(10) of the Basic Regulation, they cannot be compelled, under Article 11(9) thereof, nevertheless to do so, merely because such an adjustment was made in the original investigation.

In any event, even if it were accepted that, in the review procedure, the Council adopted a method of comparing the normal value and the export price of the products concerned different from that used in the original investigation, it does not commit a manifest error of assessment since it demonstrates, first, that, between the original investigation and the review procedure, the circumstances had changed and, second, that that change was such that the abandonment of such an adjustment was justified.

(see paras 54, 57-59, 62, 65)