JUDGMENT OF THE COURT (Seventh Chamber)
8 June 2023 (*)
(Appeal – Dumping – Implementing Regulation (EU) 2016/1328 – Imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation – Definitive anti-dumping duty – Regulation (EC) No 1225/2009 – Article 18(1) – Necessary information – Absence – Article 9(4) – ‘Lesser duty rule’ – Target price – Profit margin of the Union industry – Establishment – Selection of the most recent representative year – Article 2(9) – Construction of the export price – Injury to the Union industry – Application by analogy – Calculation of the underselling margin – Statement of reasons)
In Joined Cases C‑747/21 P and C‑748/21 P,
TWO APPEALS under Article 56 of the Statute of the Court of Justice of the European Union, brought on 3 December 2021,
PAO Severstal, established in Cherepovets (Russia) (C‑747/21 P),
Novolipetsk Steel PJSC (NLMK), established in Lipetsk (Russia) (C‑748/21 P),
represented by M. Krestiyanova, avocate, and N. Tuominen, avocată,
appellants,
the other parties to the proceedings being:
European Commission, represented initially by K. Blanck and J.‑F. Brakeland, and subsequently by J.‑F. Brakeland, acting as Agents,
defendant at first instance,
Eurofer, European Steel Association, ASBL, established in Luxembourg (Luxembourg),
intervener at first instance,
THE COURT (Seventh Chamber),
composed of M.L. Arastey Sahún, President of the Chamber, A. Prechal (Rapporteur), President of the Second Chamber, and N. Wahl, Judge,
Advocate General: N. Emiliou,
Registrar: A. Calot Escobar,
having regard to the written procedure,
after hearing the Opinion of the Advocate General at the sitting on 12 January 2023,
gives the following
Judgment
1 By their appeals, PAO Severstal (C‑747/21 P) and Novolipetsk Steel PJSC (NLMK) (C‑748/21 P) ask the Court to set aside, respectively, the judgments of the General Court of the European Union of 22 September 2021, Severstal v Commission (T‑753/16, not published, ‘the judgment in Severstal v Commission (T‑753/16)’, EU:T:2021:612) and of 22 September 2021, NLMK v Commission (T‑752/16, not published, ‘the judgment in NLMK v Commission (T‑752/16)’, EU:T:2021:611) (together, ‘the judgments under appeal’), by which the General Court dismissed, respectively, Severstal’s action and NLMK’s action for the annulment of Commission Implementing Regulation (EU) 2016/1328 of 29 July 2016 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain cold rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2016 L 210, p. 1; ‘the regulation at issue’), in so far as that regulation concerned them.
Legal context
2 Notwithstanding the entry into force, before the date on which the regulation at issue was adopted, of Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ 2016 L 176, p. 21), which repealed and replaced 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), as amended by Regulation (EU) No 37/2014 of the European Parliament and of the Council of 15 January 2014 (OJ 2014 L 18, p. 1) (‘the basic regulation’), the substantive-law rules laid down by the basic regulation remained applicable to the determination of the dumping and injury at issue in the present joined cases, since the investigation of dumping and injury which led to the adoption of the regulation at issue covered the period from 1 April 2014 to 31 March 2015. However, since those substantive-law rules have the same content as the corresponding rules laid down by Regulation 2016/1036, the application of, or reliance upon, those latter rules in the course of the proceedings giving rise to the present appeals is without consequence.
3 Article 2(9) of the basic regulation provided:
‘In cases where there is no export price or where it appears that the export price is unreliable because of an association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported products are first resold to an independent buyer, or, if the products are not resold to an independent buyer, or are not resold in the condition in which they were imported, on any reasonable basis.
In these cases, adjustment for all costs, including duties and taxes, incurred between importation and resale, and for profits accruing, shall be made so as to establish a reliable export price, at the [Union] frontier level.
The items for which adjustment shall be made shall include those normally borne by an importer but paid by any party, either inside or outside the [European Union], which appears to be associated or to have a compensatory arrangement with the importer or exporter, including usual transport, insurance, handling, loading and ancillary costs; customs duties, any anti-dumping duties, and other taxes payable in the importing country by reason of the importation or sale of the goods; and a reasonable margin for selling, general and administrative costs and profit.’
4 Article 9(4) of that regulation provided:
‘Where the facts as finally established show that there is dumping and injury caused thereby, and the [European] Union interest calls for intervention in accordance with Article 21, a definitive anti-dumping duty shall be imposed by the [European] Commission acting in accordance with the examination procedure referred to in Article 15(3). Where provisional duties are in force, the Commission shall initiate that procedure no later than one month before the expiry of such duties. The amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the Union industry.’
5 Article 18(1) of the basic regulation stated:
‘In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within the time limits provided in this Regulation, or significantly impedes the investigation, provisional or final findings, affirmative or negative, may be made on the basis of the facts available. Where it is found that any interested party has supplied false or misleading information, the information shall be disregarded and use may be made of facts available. …’
Background to the disputes
6 The background to the disputes, as set out in the judgments under appeal, may be summarised as follows for the purposes of the present judgment.
7 Severstal and NLMK are companies incorporated under Russian law which are active in the market for the manufacture and distribution of steel products and, in particular, of cold-rolled flat steel products.
8 On 14 May 2015, following a complaint lodged by Eurofer, European Steel Association, ASBL, the Commission published a notice of initiation of an anti-dumping proceeding concerning imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2015 C 161, p. 9).
9 The investigation of dumping and injury covered the period from 1 April 2014 to 31 March 2015. The examination of trends relevant for the assessment of injury covered the period from 1 January 2011 to 31 March 2015 (‘the period considered’).
10 Following the submission by Severstal and NLMK of their replies to the anti-dumping questionnaire and the on-the-spot verification visits carried out by the Commission at the premises of those undertakings and at those of traders related to them, the Commission informed the undertakings, by letters of 30 October 2015, of its intention to apply Article 18 of the basic regulation, on the ground that they had not provided, in those replies, the necessary information within the prescribed time limits and that they had hindered the proper conduct of the investigation by not providing the requested documentation at the start of the verification visit.
11 By separate letters of 13 November 2015, Severstal and NLMK contested the application of that article and expressed their willingness to continue to cooperate.
12 On 29 July 2016, the Commission adopted the regulation at issue, Article 1 of which provided, first, that a definitive anti-dumping duty was imposed on imports of flat-rolled products of iron or non-alloy steel, or other alloy steel but excluding stainless steel, of all widths, cold-rolled (cold-reduced), not clad, plated or coated and not further worked than cold-rolled (cold-reduced), currently falling within certain CN codes (‘the product concerned’), originating in the People’s Republic of China and the Russian Federation, and, secondly, that the rate of that duty was to be 34% and 36.1%, respectively, for the imports of the product concerned from Severstal and NLMK.
The proceedings before the General Court and the judgments under appeal
13 By applications lodged at the General Court Registry on 28 October 2016, Severstal and NLMK sought the annulment of the regulation at issue.
14 By two orders of 31 May 2017, the President of the Second Chamber granted Eurofer leave to intervene in support of the form of order sought by the Commission, in both of the proceedings instituted by Severstal and NLMK.
15 In support of their actions, Severstal and NLMK raised six and five pleas respectively. Only the assessments by the General Court of the first and sixth pleas raised by Severstal in the case giving rise to the judgment in Severstal v Commission (T‑753/16) and of the second and fifth pleas raised by NLMK in the case giving rise to the judgment in NLMK v Commission (T‑752/16) are relevant to the present appeals.
16 By those first and second pleas, Severstal and NLMK essentially complained that the Commission had infringed Article 18 of the basic regulation, Article 6.8 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) (OJ 1994 L 336, p. 103), Annex II to that agreement and the principle of proportionality, and had committed a manifest error of assessment in finding that they had not fully cooperated such that the facts available had to be taken into account. By the judgments under appeal, the General Court rejected those pleas, confirming, in essence, that both Severstal and NLMK had failed to provide all the reliable and necessary information for the Commission’s investigation, with the result that the Commission had not erred in applying Article 18 of the basic regulation.
17 By the sixth and fifth pleas referred to in paragraph 15 of the present judgment, Severstal and NLMK essentially complained that the Commission had infringed Article 2(9) and Article 9(4) of the basic regulation and committed manifest errors of assessment in determining the injury elimination level. They argued, in particular, that the Commission had set an unreasonable and excessive profit margin for the Union industry and had erred in applying Article 2(9) of the basic regulation by analogy for the purposes of calculating the injury margin. By the judgments under appeal, the General Court rejected those pleas, holding that the Commission had established the injury elimination level without error.
Forms of order sought and procedure before the Court of Justice
18 By its appeal in Case C‑747/21 P, Severstal claims that the Court should:
– set aside the judgment in Severstal v Commission (T‑753/16);
– give final judgment in the matter, where the state of the proceedings so permits;
– in the alternative, refer the case for reconsideration to the General Court;
– order the Commission to pay the costs of the proceedings before the Court of Justice as well as the costs of the proceedings before the General Court.
19 By its appeal in Case C‑748/21 P, NLMK claims that the Court should:
– set aside the judgment in NLMK v Commission (T‑752/16);
– give final judgment in the matter, where the state of the proceedings so permits;
– in the alternative, refer the case for reconsideration to the General Court;
– order the Commission to pay the costs of the proceedings before the Court of Justice as well as the costs of the proceedings before the General Court.
20 The Commission contends that the Court of Justice should dismiss both appeals as unfounded and order Severstal and NLMK to pay the costs.
21 On 21 September 2022, the President of the Court invited the parties to state their views on the possible joinder of Cases C‑747/21 P and C‑748/21 P for the purposes of the remainder of the proceedings and of the judgment.
22 By letters of 22 September 2022, the Commission informed the Court that it had no objections to the joinder of those cases. By letter of 28 September 2022, Severstal informed the Court that it agreed with that joinder. By letter of the same date, NLMK opposed that joinder for the remainder of the proceedings, without giving any reasons in that regard.
23 By decision of the Court of 18 October 2022, adopted pursuant to Article 54 of the Rules of Procedure of the Court, Cases C‑747/21 P and C‑748/21 P were joined for the purposes of the remainder of the proceedings and of the judgment.
24 By letter of 24 October 2022, the parties were requested to reply to certain questions put by the Court by way of measure of organisation of procedure. The Commission replied to those questions on 24 November 2022. Severstal and NLMK replied on 1 December 2022.
The appeals
25 In support of their appeals, Severstal and NLMK rely on three grounds, alleging, in essence, first, errors of law in the interpretation of Article 18(1) of the basic regulation, distortion of the evidence and substantially incorrect findings of fact, secondly, errors of law in the application and interpretation of Article 9(4) of that regulation and, thirdly, errors of law in the application and interpretation of Article 2(9) of the basic regulation.
26 Since those respective grounds of appeal, raised by both Severstal and by NLMK, overlap to a very large extent, each respective ground will be examined together.
The first grounds of appeal
Arguments of the parties
27 In the first place, the appellants submit that the General Court misinterpreted Article 18(1) of the basic regulation in assessing the Commission’s application of that provision in the regulation at issue without first reaching a conclusion as to whether the product concerned is a finished product or a semi-finished product. However, the criteria for reviewing the application of Article 18(1) of the basic regulation depend on the answer to that question. In addition, the General Court provided no reasoning for its choice to classify the products at issue as semi-finished and wrongly limited its review of the Commission’s investigations. For those reasons, Severstal and NLMK challenge, respectively, paragraphs 32, 56, 58 and 68 of the judgment in Severstal v Commission (T‑753/16) and paragraphs 33, 50, 56, 79, 80 and 163 of the judgment in NLMK v Commission (T‑752/16).
28 In the second place, the appellants submit that the General Court distorted the evidence and made substantially incorrect findings of fact in the judgments under appeal.
29 In particular, Severstal challenges paragraphs 70, 72, 80, 81, 83, 84, 90 to 94, 97 and 102 of the judgment in Severstal v Commission (T‑753/16), putting forward the following arguments:
– the assessment, in paragraphs 70 and 81 of that judgment, that the Commission could not verify whether the total costs of purchase of raw materials were accurately reflected in Severstal’s accounts is substantially incorrect in the light of the content of Annex F‑14b to its reply to the anti-dumping questionnaire and Verification Exhibit No 11;
– the assessment, in paragraph 72 of that judgment, that Severstal had not reported its manufacturing costs in Annex F‑14A to that reply in accordance with the classification of costs in the various product control numbers (‘the PCNs’) adopted by the Commission is substantially incorrect, since that paragraph states that, during the on-the-spot verification visit, Severstal had provided a reconciliation between its own classification and the PCN structure requested by the Commission;
– the assessment, in paragraphs 80 and 89 of that judgment, that Severstal had not established that it was not in possession of the necessary data is incorrect, since Severstal showed that the cost of raw materials was not ‘allocated’ by its internal computerised accounting system SAP ERP (‘the SAP system’) to the product concerned, but that it was ‘aggregated’ at each production stage for each individual production code, and
– the assessment, in paragraphs 90 to 93 of the judgment in Severstal v Commission (T‑753/16), that Severstal adopted two different allocation keys for the costs of raw materials is substantially incorrect in the light of Severstal’s reply to the Commission’s letter of 10 September 2015 inviting it to remedy certain deficiencies and Exhibit No 16 produced by Severstal during the on-the-spot verification.
30 NLMK challenges paragraphs 54 to 57, 68 and 77 to 79 of the judgment in NLMK v Commission (T‑752/16) on the ground that the General Court distorted the clear sense of the evidence or made substantially incorrect findings of fact regarding Exhibits Nos 23, 25, 28 and 34.
31 In particular, NLMK submits that the assessments of the General Court in paragraphs 55, 68 and 123 of that judgment distort the facts set out in Exhibit No 34. Thus, contrary to what is apparent from those paragraphs, that exhibit has the same content as that of Exhibit No 23, which was received and verified during the on-the-spot verification visit and which indicates the total quantities and costs of the unfinished products transferred. Consequently, in that regard, it could not be considered that Exhibit No 34 was new information, nor had been belatedly submitted. Furthermore, the Commission used Exhibit No 34 only to determine total amounts and quantities, and not for the use for which it had been requested, namely the breaking down of the information by codes. Such use led the Commission to err in its assessment of the reconciliation of the calculations and to the absurd conclusion that NLMK sold more than it produced.
32 NLMK also challenges paragraphs 81 and 116 of the judgment in NLMK v Commission (Case T‑752/16) on the ground that, contrary to the General Court’s assessment in those paragraphs, it provided adequate, complete and verifiable information. According to NLMK, an examination of the information provided in Exhibits Nos 23 and 34 showed that the reconciliations provided by it were supported by the evidence from the SAP system, which was checked during the on-spot verification visits, that the explanations were logical and not contradictory and that they reflected the complex accounting structure of an integrated steel plant. The Commission failed to understand that an additional deduction of costs without quantities (which were already deducted prior) was necessary to adjust the cost of manufacturing of reusable waste (that is, scrap) against its market value, at which that scrap is put into the production. Such a misunderstanding led to the erroneous conclusion that, first, NLMK sold more than it produced and, secondly, all data was unreliable.
33 The Commission contends that the first grounds of appeal are inadmissible inasmuch as they seek a re-examination of the facts by the Court of Justice and unfounded as to the remainder.
Findings of the Court
34 In the first place, in so far as the appellants complain that the General Court misinterpreted Article 18(1) of the basic regulation on the ground that it did not examine or give reasons for the classification of the product concerned as finished or semi-finished before assessing the Commission’s application of that provision in the regulation at issue, even though the criteria for verifying the necessary information referred to in Article 18(1) differ depending on that classification, the Commission’s objections relating to the admissibility of that complaint must be rejected. Contrary to the Commission’s contention, that complaint raises a question of law not fact, since it relates to the criteria governing the application of Article 18(1) of the basic regulation.
35 As regards the merits of that same complaint, it should be borne in mind that Article 18(1) of the basic regulation enables the Commission to make its findings in relation to dumping and injury on the basis of the facts available in cases in which any interested party does not cooperate in the anti-dumping investigation by refusing access to, or otherwise failing to provide, necessary information within the time limits provided in that regulation, or by significantly impeding the investigation.
36 It is apparent from the case-law of the Court that the concept of ‘necessary information’ referred to in that provision corresponds to information held by the interested parties which enables the Commission to complete its anti-dumping investigations by making provisional or final, affirmative or negative, findings (see, to that effect, judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 47 to 49 and 57).
37 Furthermore, the Court has made clear that the assessment as to whether a particular item of information is ‘necessary’ within the meaning of Article 18(1) of the basic regulation must be carried out in the light of all the specific circumstances of each individual investigation, not in the abstract (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraph 49).
38 It follows that that assessment must be made on a case-by-case basis, taking account of the fact that such information must enable the Commission to complete its anti-dumping investigations.
39 Thus, the relevant criterion for assessing whether information held by an interested party is necessary, within the meaning of Article 18(1) of the basic regulation, is the same regardless of the specific circumstances of each individual investigation. Indeed, in all cases, it is necessary to determine whether that information is such as to enable the Commission to establish the appropriate findings in the anti-dumping investigation at issue. The finished or semi-finished nature of the product concerned cannot, therefore, affect the assessment criterion for the application of that provision.
40 Furthermore, in so far as the appellants allege breaches by the General Court of its duty to state reasons, it should be borne in mind that, according to settled case-law, the statement of the reasons on which a judgment is based must clearly and unequivocally disclose the General Court’s reasoning, so that the persons concerned can ascertain the reasons for the decision taken and the Court of Justice can exercise its power of review (judgment of 13 December 2018, European Union v Kendrion, C‑150/17 P, EU:C:2018:1014, paragraph 80 and the case-law cited).
41 However, contrary to the appellants’ claims, it is apparent from reading paragraphs 46 to 102 of the judgment in Severstal v Commission (T‑753/16) and paragraphs 38 to 91 of the judgment in NLMK v Commission (T‑752/16) that the General Court did sufficiently state the reasons why it found that the Commission’s application of Article 18(1) of the basic regulation to Severstal and NLMK in the procedure giving rise to the adoption of the regulation at issue had to be upheld. That statement enables the appellants to ascertain the reasons for the General Court’s decision and the Court of Justice to exercise its power of review.
42 Accordingly, the Court of Justice must reject as unfounded the appellants’ complaint that the General Court misinterpreted Article 18(1) of the basic regulation on the ground that it did not examine or give reasons for the classification of the product concerned as semi-finished before assessing the Commission’s application of that provision to the appellants in the regulation at issue.
43 In the second place, in so far as Severstal relies on judicial review of the Commission’s discretion and submits that, in the present case, the General Court did not correctly interpret and apply Article 18(1) of the basic regulation, by overly narrowing the scope of its review of the Commission’s investigation, it must be held that Severstal does not sufficiently explain the alleged error of law by the General Court. Accordingly, that complaint must be rejected as inadmissible.
44 In the third place, in so far as the appellants complain that the General Court distorted certain evidence and made substantially incorrect findings of fact, it should be recalled that, in accordance with Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union, an appeal is to be limited to points of law.
45 In an appeal, the Court of Justice has, therefore, no jurisdiction to establish the facts or, in principle, to examine the evidence which the General Court accepted in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the General Court alone to assess the value which should be attached to the evidence produced to it (judgment of 11 May 2017, Dyson v Commission, C‑44/16 P, EU:C:2017:357, paragraph 30 and the case-law cited).
46 The General Court exercises such exclusive jurisdiction save where the findings of fact made by it are substantively inaccurate and where the clear sense of the evidence adduced before it has been distorted. In an appeal, the jurisdiction of the Court of Justice’s review extends, as regards the finding of facts, to the substantive inaccuracy of those findings as apparent from the documents in the file and, as regards the assessment of the facts, to the distortion of that evidence by the General Court (see, to that effect, judgments of 6 January 2004, BAI and Commission v Bayer, C‑2/01 P and C‑3/01 P, EU:C:2004:2, paragraph 47, and of 11 May 2017, Dyson v Commission, C‑44/16 P, EU:C:2017:357, paragraph 31 and the case-law cited).
47 It should also be noted that, where an appellant alleges distortion of the evidence by the General Court, that party must, pursuant to Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court of Justice, indicate precisely the evidence alleged to have been distorted by the General Court and show the errors of appraisal which, in that party’s view, led to such distortion. In addition, according to settled case-law, that distortion must be obvious from the documents in the Court’s file, without any need to carry out a new assessment of the facts and the evidence (judgment of 10 November 2022, Commission v Valencia Club de Fútbol, C‑211/20 P, EU:C:2022:862, paragraph 55 and the case-law cited). The same applies to the substantive inaccuracies in the findings of fact alleged by an appellant.
48 In Case C‑747/21 P, Severstal submits, first, that the General Court made a substantially incorrect finding of fact in paragraphs 70 and 81 of the judgment in Severstal v Commission (T‑753/16), by finding that the Commission had been unable to verify whether the total costs of purchase of raw materials were accurately reflected in Severstal’s accounts and whether they were indeed included in the cost of manufacturing of the product concerned, since Annex F‑14b to Severstal’s reply to the anti-dumping questionnaire, entitled ‘Initial cost sheet’, and Verification Exhibit No 11, referenced in the Commission’s List of Exhibits as ‘Reconciliation of ordinary costs to SAP system’, showed the total cost of those raw materials.
49 In that regard, it should be pointed out that it is apparent from paragraphs 70 and 81 of the judgment in Severstal v Commission (T‑753/16) that the General Court’s assessment is based on the fact that it is not disputed that the reported costs only included the costs for the ‘sales’ of the product concerned, and not also those for the products intended for captive use. It is not obvious from Annex F‑14b that the costs of captive products were included and that, therefore, they could be verified. As regards Verification Exhibit No 11, allegedly referenced in the Commission’s List of Exhibits as ‘Reconciliation of ordinary costs to SAP system’, Severstal does not produce it or provide any details as to that list. Furthermore, that exhibit does not appear in the descriptions of the annexes to the parties’ written pleadings in Case T‑753/16. Therefore, Severstal fails to demonstrate that it was clear that the costs set out in that exhibit included the costs of the captive products.
50 Secondly, in so far as Severstal argues that the General Court’s finding in paragraph 72 of the judgment in Severstal v Commission (T‑753/16) – according to which Severstal had not reported its manufacturing costs in Annex F‑14 A of the reply to the anti-dumping questionnaire in accordance with the classification of costs in the various PCNs adopted by the Commission – is substantially incorrect on the ground that in that paragraph it is stated that, during the on-the-spot verification visit, Severstal had provided a reconciliation between its own classification and the PCN structure requested by the Commission, it should be noted that Severstal quotes that paragraph in abridged form. Paragraph 72 states that the information provided during that visit ‘was, however, limited, as the applicant confirmed at the hearing, to the manufacturing costs of the “sold” products, to the exclusion of the manufacturing costs relating to the products processed in-house’. It follows that Severstal had not indeed reported all its manufacturing costs in accordance with the classification of costs in the various PCNs adopted by the Commission and that it has not been shown that the findings in paragraph 72 of the judgment in Severstal v Commission (T‑753/16) are substantially incorrect.
51 Thirdly, in so far as Severstal challenges the assessment, in paragraphs 80 and 89 of that judgment, that it did not establish that it was not in possession of the necessary data, such a challenge must be rejected, since Severstal does not sufficiently explain the substantive inaccuracies at issue or the evidence alleged to have been distorted by the General Court in that regard.
52 Fourthly, in so far as Severstal challenges the assessments in paragraphs 90 to 93 of the judgment in Severstal v Commission (T‑753/16), on the ground that the General Court wrongly held that Severstal had adopted two different allocation keys for the costs of raw materials and unlawfully validated adjustments to its manufacturing costs of the product concerned, it must be held that Severstal in fact seeks a fresh assessment of the facts and evidence, without indicating in a sufficiently precise manner the substantive inaccuracies or the distortions levelled against the General Court or showing the errors of analysis which, in Severstal’s view, led it to commit those distortions. Such a challenge is, therefore, inadmissible.
53 Fifthly and lastly, in so far as Severstal challenges paragraphs 94, 97 and 102 of that judgment, it must be stated that Severstal does not explain the grounds on which the assessments in those paragraphs would be wrong in law, with the result that such a challenge is also inadmissible.
54 In Case C‑748/21 P, NLMK submits that, in paragraphs 55, 68 and 123 of the judgment in NLMK v Commission (T‑752/16), the General Court distorted the clear sense of the evidence by finding, in essence, that NLMK had not provided information relating to the total quantity and cost of manufacturing of the product concerned, both finished and semi-finished, whereas that information appears in Exhibits Nos 23 and 34, which were submitted to the Commission during the on-the-spot verification.
55 In that regard, it should be noted that, as is apparent from paragraph 54 of the judgment in NLMK v Commission (T‑752/16), NLMK did not contest that it had not reported the full production volume of the product concerned in its reply to the anti-dumping questionnaire. As the Commission states without being disproven, it arrived at such a finding after Exhibit No 23 was produced during the on-the-spot verification visit, in order to verify the cost deduction for stock variation of work-in-progress which turned out to relate to semi-finished products the volume of which had not been included in that reply. Following that finding, the Commission requested NLMK to provide it with the cost data per product type for the semi-finished product under investigation. In response to that request, NLMK supplied Exhibit No 34 at the end of that visit. The contents of Exhibits Nos 23 and 34 overlap in part in that those exhibits both contain data on the total quantity and cost of manufacturing of the finished and semi-finished product concerned. However, they differ in that Exhibit No 34 also contains cost and quantity data by type of semi-finished product.
56 Nonetheless, the General Court does not distort the sense of those exhibits when it finds, first, in paragraph 68 of the judgment in NLMK v Commission (T‑752/16), that Exhibit No 34 was produced late, that it could not be verified after the on-the-spot visit and that it was not merely a breakdown by production codes of the information provided in Exhibit No 23, but was presented in a different context in order to reconcile the cost deductions for changes in inventories due to work-in-process, as reported in NLMK’s reply to the anti-dumping questionnaire; secondly, in paragraph 55 of that judgment, that the information contained in Exhibit No 34 did not remedy NLMK’s deficiency – which had not reported the totality of the production and capacity for the entire product concerned – but allowed the Commission to establish the inconsistency of the production data reported by NLMK, as it established that NLMK was declaring a quantity sold which was overall greater than what production made physically possible, taking into account stock variations, rejects and waste as reported by it; and, thirdly, in paragraph 123 of that judgment, that NLMK had not been able to support its arguments, according to which it was appropriate to take into account its data on the quantities sold, by the information already contained in that reply, or by that in the exhibits collected on the spot.
57 Such assessments by the General Court relate to the probative value of Exhibits Nos 23 and 34, in view of the Commission’s verification of the data contained in them, following their production during the administrative procedure which led to the adoption of the regulation at issue. Those assessments are, however, assessments of fact which, save where they are distorted, are not subject to review by the Court of Justice on appeal.
58 Similarly, NLMK wrongly argues that, in paragraphs 81 and 116 of the judgment in NLMK v Commission (T‑752/16), the General Court distorted the information provided by NLMK in the context of the double deduction of waste and rejects by finding that that information was unreliable. By its arguments, NLMK merely challenges the assessment of the facts carried out by the General Court, without establishing the existence of any distortion or the existence of substantially incorrect findings of fact.
59 Finally, in so far as NLMK relies, in support of its objections, on Exhibits Nos 25 and 28, it must be found that it does not explain on what grounds the content of those exhibits was distorted.
60 In the light of the foregoing, the appellants’ complaints alleging that evidence was distorted by the General Court and that its findings of fact were substantially incorrect must be rejected.
61 Consequently, the first grounds of appeal must be rejected.
The second grounds of appeal
Arguments of the parties
62 Severstal and NLMK submit that in paragraphs 243 to 257 of the judgment in Severstal v Commission (T‑753/16) and paragraphs 209 to 223 of the judgment in NLMK v Commission (T‑752/16), respectively, the General Court erred in its interpretation and review of the Commission’s application of Article 9(4) of the basic regulation and in failing to address their arguments. In addition, they submit that the General Court failed to fulfil its duty to provide reasons having regard to the arguments which they had put forward in that regard.
63 In particular, the appellants complain that the General Court confirmed that the Commission could, on account of the global financial crisis, take 2008 as the most recent representative year in order to establish the Union industry’s target profit margin for the purposes of applying Article 9(4), even though that year was not part of the period considered. In the present case, that year is too remote to be regarded as such and its selection is the result of a misapplication of Article 9(4).
64 In addition, the appellants submit that the General Court failed to have regard to the principle of the protection of legitimate expectations in holding that the Commission was not bound by the period considered in order to define the most recent representative year for the purposes of establishing the profit margin at issue.
65 Furthermore, the selection of 2008 in order to determine that profit margin is, on account of the financial crisis, incompatible with the assessments in paragraphs 151 and 152 of the judgment in NLMK v Commission (T‑752/16) and in paragraphs 185 and 186 of the judgment in Severstal v Commission (T‑753/16). In those paragraphs, the General Court refused to address the appellants’ arguments concerning the taking into account of that crisis when assessing the Union industry’s production costs for the assessment of the injury caused to the Union industry. Thus, the General Court arbitrarily confirmed the Commission’s approach according to which that crisis is to be taken into account when establishing the target profit margin of the Union industry for the purposes of applying Article 9(4) of the basic regulation, but not when assessing that injury. However, that profit margin is not identical with the one desirable to ensure the survival of the Union industry and/or an adequate return on capital after an external event, such a global financial crisis.
66 Primarily, the appellants submit that the financial crisis may be a factor to be taken into account in the calculation of that injury, with the result that imports from the countries concerned cannot be the only relevant factor giving rise to the injury suffered by the Union industry. By failing to address those arguments, the General Court committed a manifest error of assessment and infringed its obligation to state reasons.
67 In the alternative, the appellants submit that if the financial crisis is not a relevant factor to be taken into account in assessing causality between that injury and those imports, the General Court ought to have found that the Commission could not choose 2008 as the reference year for calculating the profit margin of the Union industry.
68 The Commission contends that the second grounds of appeal are ineffective in so far as they relate to paragraphs 151 and 152 of the judgment in NLMK v Commission (T‑752/16) and paragraphs 185 and 186 of the judgment in Severstal v Commission (T‑753/16) and unfounded as to the remainder.
Findings of the Court
69 By their second grounds of appeal, the appellants submit, in essence, that the General Court, first, erred in law when interpreting and applying Article 9(4) of the basic regulation and, secondly, infringed the principle of the protection of legitimate expectations and its obligation to state reasons by taking 2008, rather than a year forming part of the period considered, as the most recent representative year for the purposes of establishing the target profit margin of the Union industry.
70 In the first place, it should be borne in mind that, according to settled case-law, in an appeal, the jurisdiction of the Court of Justice is, in principle, confined to review of the findings of law on the pleas argued at first instance (judgment of 12 September 2017, Anagnostakis v Commission, C‑589/15 P, EU:C:2017:663, paragraph 55 and the case-law cited). However, the appellants’ argument that the principle of the protection of legitimate expectations was infringed by the choice of 2008 as the most recent representative year for the purpose of establishing the target profit margin of the Union industry has been put forward for the first time at the appeal stage. Consequently, that argument is inadmissible.
71 In the second place, the appellants’ arguments based on a refusal by the General Court to take into account the effects of the financial crisis when assessing the injury suffered by the Union industry and causality between that injury and the imports at issue, as would be apparent from paragraphs 151 and 152 of the judgment in NLMK v Commission (T‑752/16) and paragraphs 185 and 186 of the judgment in Severstal v Commission (T‑753/16), must be declared ineffective. Indeed, the General Court assessed that injury and causality when it examined the third and fourth pleas raised by NLMK in the context of the case giving rise to the judgment in NLMK v Commission (T‑752/16) and the fourth and fifth pleas raised by Severstal in the context of the case giving rise to the judgment in Severstal v Commission (T‑753/16). However, the examination of those pleas by the General Court is not the subject of the present appeals. Consequently, the appellants’ arguments directed against those paragraphs of the judgments under appeal, irrespective of whether they are well founded, could not in any event lead to the setting aside of those judgments. For the same reasons, the appellants’ complaints alleging that the General Court failed to state reasons for rejecting their arguments concerning the effects of the financial crisis on the assessment of that injury and that causality must also be declared ineffective.
72 In the third place, as regards the appellants’ claims that the General Court erred in law when interpreting and applying Article 9(4) of the basic regulation, it must be recalled that the last sentence of that provision sets out the ‘lesser duty rule’, according to which the amount of the anti-dumping duty must be less than the margin of dumping established if such lesser duty would be adequate to remove the injury to the Union industry.
73 Thus, as the Advocate General observed in point 52 of his Opinion, the objective of that rule is to prevent the anti-dumping duty imposed from going beyond what is necessary to remove the injury caused to the Union industry by the dumped imports. Such a rule is justified in the light of the nature and purpose of anti-dumping duties which are neither penalties nor compensatory measures intended to make good the actual damage caused, but protective measures against unfair competition resulting from dumped imports (see, to that effect, judgment of 3 October 2000, Industrie des poudres sphériques v Council, C‑458/98 P, EU:C:2000:531, paragraph 91). Those duties seek only to prevent dumped imports or to make them economically unattractive and thereby to redress an imbalance in the domestic market, caused by that dumping.
74 It is apparent from recital 175 and Article 1 of the regulation at issue that the Commission applied that rule in order to set the rates of the definitive anti-dumping duty at 34% in respect of imports of the product concerned by Severstal and at 36.1% as regards imports of the product concerned by NLMK. In order to calculate those rates, the Commission used the so-called ‘underselling’ method. Under that method, the injury margin is calculated by comparing the price of the dumped imports with a target sales price of the Union industry. That price represents the price the Union industry could reasonably expect to charge in the EU market in the absence of the dumped imports. To establish such a hypothetical price, a target profit is added to the Union industry’s production costs. That target profit corresponds to the profit margin that the Union industry could reasonably expect under normal market conditions.
75 In applying that method, the Commission took into account the profit margin of the Union industry applied during the year 2008. According to the Commission, in the present case, that year was the most recent representative year for the purposes of establishing the target profit of the Union industry, since it was apparent from its investigation that, first, throughout the period considered, there were significant volumes of low-priced imports which had an adverse impact on the Union industry’s profitability and, secondly, the years 2009 and 2010 could not be regarded as reflecting normal conditions of competition in view of the financial crisis (see, to that effect, recitals 154 to 157 of the regulation at issue). In paragraphs 217 to 223 of the judgment in NLMK v Commission (T‑752/16) and paragraphs 251 to 257 of the judgment in Severstal v Commission (T‑753/16), the General Court endorsed such an approach by the Commission.
76 In the light of the appellants’ arguments, it should be noted, first of all, that, in the absence of a method laid down by the basic regulation for calculating the injury margin referred to in the lesser duty rule, the Commission has a broad discretion as to the choice of such a calculation method. However, the Commission remains bound to exercise that discretion in accordance with the guarantees conferred by the EU legal order in administrative procedures and by ensuring that its choice leads to plausible results.
77 By choosing in the present case a method based on target prices, the Commission did not exceed that discretion. As the General Court correctly noted in paragraph 214 of the judgment in NLMK v Commission (T‑752/16) and paragraph 248 of the judgment in Severstal v Commission (T‑753/16), the use of a target price instead of the actual sales price of the Union industry in order to determine the injury margin makes it possible to take into account the downward pressure exerted by the dumped imports on the sales prices of the Union industry. Taking that pressure into account contributes to the plausibility of the results obtained by using that method.
78 Next, in so far as the appellants submit that the General Court misinterpreted Article 9(4) of the basic regulation by choosing a year that did not form part of the period considered, as the most recent representative year for the purposes of establishing the target profit of the Union industry, it must be held that, as the General Court found in essence in paragraph 218 of the judgment in NLMK v Commission (T‑752/16) and paragraph 252 of the judgment in Severstal v Commission (T‑753/16), in the absence of a method laid down in the basic regulation for the purposes of determining the target profit margin, the Commission also enjoys discretion in determining that margin.
79 Furthermore, it should be noted that the objective of defining the target profit margin of the Union industry is to reflect, as plausibly as possible, the profit that would have been made by that industry under ordinary market conditions in order to determine the anti-dumping duties to be imposed, in accordance with the nature and purpose of such duties as set out in paragraph 73 above, without going beyond what is necessary to redress an imbalance caused by the dumped imports on the Union market.
80 Consequently, as the Advocate General stated, in essence, in point 55 of his Opinion, the data for the most recent representative year for the determination of the target profit need not be taken from the period considered, if that data would not provide an adequate picture of what is required to re-establish fair competition in the post-investigation period. As the General Court held in its judgment of 28 October 1999, EFMA v Council (T‑210/95, EU:T:1999:273, paragraph 60) – to which it rightly referred in paragraphs 215 and 218 of the judgment in NLMK v Commission (T‑752/16) and paragraphs 249 and 252 of the judgment in Severstal v Commission (T‑753/16) – the profit margin to be used when calculating the target price must correspond to the profit margin which the Union industry could reasonably count on under normal conditions of competition, in the absence of dumped imports, since the choice of such a profit margin contributes to the imposition of the anti-dumping duties re-establishing fair competition in the post-investigation period.
81 Accordingly, the General Court did not err in law in interpreting the lesser duty rule set out in Article 9(4) of the basic regulation as allowing the Commission, pursuant to the underselling method, to take into account a year not forming part of the period considered, as the most recent representative year for the purposes of establishing the target profit of the Union industry, in order to ensure that that profit corresponds to the profit which the Union industry could reasonably count on under normal conditions of competition, in the absence of dumped imports.
82 Moreover, since the factual assessments that, first, there were significant volumes of low-priced imports from the countries concerned throughout the period considered, secondly, the global economic crisis hit the sector hard from 2009 onwards and, thirdly, the years 2005 to 2008 were marked by strong competition without, however, being characterised by exceptionally favourable market conditions, are not disputed, the General Court was entitled, in paragraphs 219 to 222 of the judgment in NLMK v Commission (T‑752/16) and paragraphs 253 to 256 of the judgment in Severstal v Commission (T‑753/16), on the basis of those assessments, to classify 2008 as the most recent representative year without erring in law in the application of Article 9(4) of the basic regulation.
83 Lastly, in so far as the appellants complain that the General Court failed to provide adequate reasons in the judgments under appeal as to why it rejected their complaints alleging misinterpretation or misapplication of Article 9(4) of the basic regulation, it must be borne in mind that, as stated in paragraph 40 above, the obligation to state reasons requires that the judgment at issue must clearly and unequivocally disclose the General Court’s reasoning, so that the persons concerned can ascertain the reasons for the decision taken and the Court of Justice can exercise its power of review. As it is, paragraphs 217 to 223 of the judgment in NLMK v Commission (T‑752/16) and paragraphs 251 to 257 of the judgment in Severstal v Commission (T‑753/16) set out sufficiently the reasons for which the General Court rejected the appellants’ complaints relating to the Commission’s choice of the most recent representative year for the determination of the target profit for the purposes of applying Article 9(4) of the basic regulation.
84 For all the foregoing reasons, the second grounds of appeal must be rejected.
The third grounds of appeal
Arguments of the parties
85 The appellants submit that the General Court erred in law in endorsing the approach adopted by the Commission in the regulation at issue, according to which Article 2(9) of the basic regulation could be applied by analogy in order to determine the export price of resellers related to the exporting producer when assessing the injury caused to the Union industry. In that regard, Severstal relies on the assessments of the General Court in paragraphs 260 to 272 of the judgment in Severstal v Commission (T‑753/16) and NLMK on those in paragraphs 226 to 239 of the judgment in NLMK v Commission (T‑752/16).
86 According to the appellants, the export price to be taken into account in order to assess underselling by companies related to the exporting producer is the CIF (cost, insurance and freight) export price, as actually invoiced at the EU frontier to the first independent customer, without that price being adjusted, on the basis of Article 2(9) of the basic regulation being applied by analogy, by taking into account selling, general and administrative (SG&A) costs and a reasonable profit. Indeed, the aforementioned price would reflect the price competition between the imports at issue and the like product of the EU industry. By contrast, such an adjustment would lead to the establishment of an artificial injury margin and entail a comparison between import and Union prices which are not at the same level of trade.
87 In support of their argument, the appellants rely on the judgments of 30 November 2011, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council and Commission (T‑107/08, EU:T:2011:704); of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission (T‑301/16, EU:T:2019:234); and of 2 April 2020, Hansol Paper v Commission (T‑383/17, not published, EU:T:2020:139), and on the Opinion of Advocate General Pikamäe in Commission v Hansol Paper (C‑260/20 P, EU:C:2022:13).
88 Furthermore, the appellants submit that the General Court failed to fulfil its obligation to state reasons by not taking into account the judgment of 2 April 2020, Hansol Paper v Commission (T‑383/17, not published, EU:T:2020:139), which they had raised during the proceedings before it.
89 The Commission contends that the third grounds of appeal must be rejected as unfounded.
Findings of the Court
90 In the first place, in so far as the appellants submit that the General Court erred in law in endorsing the Commission’s application of Article 2(9) of the basic regulation by analogy in order to determine the export price of resellers related to the exporting producer, when assessing the injury caused to the Union industry, it should be noted that, by its judgment of 12 May 2022, Commission v Hansol Paper (C‑260/20 P, EU:C:2022:370), the Court of Justice held that such an application by analogy did not constitute an error of law.
91 Indeed, the Court held that as the assessment of whether there has been price undercutting is an economically complex issue in respect of which the basic regulation does not lay down any particular method, the Commission enjoys a broad discretion in that regard, with the result that the application, by analogy, of the price construction method referred to in Article 2(9) of the basic regulation in order to assess price undercutting may be considered, provided that that method is consistent with the legal framework laid down by the basic regulation and does not lead to a manifestly incorrect result (see, to that effect, judgment of 12 May 2022, Commission v Hansol Paper, C‑260/20 P, EU:C:2022:370, paragraph 99).
92 Accordingly, the General Court did not err in law when it held, in paragraphs 233 and 234 of the judgment in NLMK v Commission (T‑752/16) and in paragraphs 266 and 267 of the judgment in Severstal v Commission (T‑753/16), that the Commission could consider, within its broad discretion, that for the purpose of calculating the underselling margin, an export price had to be determined, by applying Article 2(9) of the basic regulation by analogy, where sales were made via related importers, since the Commission had rightly noted, first, that Article 2(9) of the basic regulation was the only provision of that regulation which provided guidance for the calculation of a reliable export price where export sales were made via related importers and, secondly, that that provision reflected the principle of unreliability of transfer prices, which is likely to be applied both to the determination of the injury margin and to the calculation of the dumping margin.
93 Furthermore, the Court of Justice has stated that it follows from a combined reading of Article 1(1) and Article 3(2) of the basic regulation that the injury must be assessed at the time of the dumped product’s ‘release for free circulation in the Union’, with the result that the calculation of undercutting must, in principle, be made at the level of the dumped imports. It inferred from this that it was open to the Commission, in order to ensure an objective comparison of the prices at the level of the first release for free circulation in the European Union of the product concerned, to construct that CIF ‘EU border’ value by deducting SG&A costs and a profit margin from the price of resale of that product to independent customers (see, to that effect, judgment of 12 May 2022, Commission v Hansol Paper, C‑260/20 P, EU:C:2022:370, paragraphs 102 and 105).
94 The General Court did not, therefore, err in law in holding, in paragraphs 236 and 237 of the judgment in NLMK v Commission (T‑752/16) and in paragraphs 269 and 270 of the judgment in Severstal v Commission (T‑753/16), first, that it is justified to base the assessment of the sufficiency of a lower duty rate in the present case, for the purpose of removing injury caused by imports, on the ‘Union frontier’ export price, which is considered to be of a comparable level to the ‘ex-works’ Union price, namely, the indicative sales price of the Union industry to the first independent customer minus the various ex-factory costs, such as transport or insurance costs, to arrive at the level of the ex-factory price of the product concerned and, secondly, that the use in this case of the ‘Union frontier’ level of trade, rather than that of resale to the first independent buyer, as the reference point for the injury margin calculation can be justified both under Article 1(1) of the basic regulation as well as under Article 3(3) of that regulation.
95 The foregoing assessments are not called into question by the appellants’ reply to a question put by the Court by way of a measure of organisation of procedure, concerning the inferences to be drawn from the judgment of 12 May 2022, Commission v Hansol Paper (C‑260/20 P, EU:C:2022:370) for the assessment of their third grounds of appeal.
96 In that reply, the appellants submit, in essence, that the facts at the origin of the disputes at issue in the present joined cases differ from those at the origin of the dispute in the case giving rise to the aforementioned judgment, which is grounds for not applying the approach adopted in that judgment to the present case. In particular, the Commission, they argue, wrongly considered that the traders related to the appellants acted as importers, with the result that the General Court made a manifest error of assessment in upholding the application by analogy of Article 2(9) of the basic regulation in the present case. However, such an argument challenges a factual assessment by the General Court. As is apparent from paragraphs 44 to 46 above, such an assessment is not subject to review by the Court of Justice on appeal, save where the clear sense of the evidence has been distorted. Since no distortion has been alleged, that argument must be rejected as inadmissible.
97 In the second place, in so far as the appellants claim that the General Court failed to fulfil its obligation to state reasons on the ground that it did not take into account the assessments set out in its judgment of 2 April 2020, Hansol Paper v Commission (T‑383/17, not published, EU:T:2020:139), it should be borne in mind that the Court of Justice has consistently held that the requirement that the General Court give reasons for its decisions cannot be interpreted as meaning that it is obliged to respond in detail to every single argument advanced by the appellant (judgment of 15 April 2010, Gualtieri v Commission, C‑485/08 P, EU:C:2010:188, paragraph 41 and the case-law cited). Nor is such an assessment called into question by the fact that the General Court itself asked the parties about the possible impact of the judgment of 2 April 2020, Hansol Paper v Commission (T‑383/17, not published, EU:T:2020:139). Consequently, the appellants’ complaint alleging a failure to state reasons must also be rejected.
98 In the light of all the foregoing considerations, the third grounds of appeal must also be rejected and, accordingly, the appeals must be dismissed in their entirety.
Costs
99 In accordance with Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs. Under Article 138(1) of those rules of procedure, which applies to the procedure on appeal by reason of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
100 In the present case, since the Commission has applied for costs and the appellants have been unsuccessful in their pleas, the appellants must be ordered to pay the costs relating to their respective appeals.
On those grounds, the Court (Seventh Chamber) hereby:
1. Dismisses the appeals;
2. Orders PAO Severstal to pay the costs in Case C‑747/21 P;
3. Orders Novolipetsk Steel PJSC (NLMK) to pay the costs in Case C‑748/21 P.
Delivered in open court in Luxembourg on 8 June 2023.
A. Calot Escobar | | M.L. Arastey Sahún |
Registrar | | President of the Chamber |