JUDGMENT OF THE GENERAL COURT (Eighth Chamber, Extended Composition)

8 May 2024 (*)

(Dumping – Imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in Türkiye – Definitive anti-dumping duties – Implementing Regulation (EU) 2021/1100 – Adjustment – Article 2(10)(b), (i) and (j) of Regulation (EU) 2016/1036 – Functions similar to those of an agent working on a commission basis – Single economic entity – Import duties – Calculation of the dumping margin – Hedging gains and losses – Manifest error of assessment – Right to be heard)

In Case T‑630/21,

Çolakoğlu Metalurji AŞ, established in Istanbul (Türkiye),

Çolakoğlu Dış Ticaret AŞ, established in Istanbul,

represented by J. Cornelis and F. Graafsma, lawyers,

applicants,

v

European Commission, represented by G. Luengo and J. Zieliński, acting as Agents,

defendant,

THE GENERAL COURT (Eighth Chamber, Extended Composition),

composed of S. Papasavvas, President, A. Kornezov, D. Petrlík, K. Kecsmár (Rapporteur) and S. Kingston, Judges,

Registrar: M. Zwozdziak-Carbonne, Administrator,

having regard to the written part of the procedure, including the measure of organisation of procedure of 21 December 2022 and the parties’ responses lodged at the Registry of the General Court on 13 and 16 January 2023,

further to the hearing on 28 March 2023,

gives the following

Judgment

1        By their action based on Article 263 TFEU, the applicants, Çolakoğlu Metalurji AŞ and Çolakoğlu Dış Ticaret AŞ (‘Çolakoğlu Metalurji’ and ‘ÇOTAŞ’, respectively), seek the annulment of Commission Implementing Regulation (EU) 2021/1100 of 5 July 2021 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in Turkey (OJ 2021 L 238, p. 32; ‘the contested regulation’).

 Background to the dispute

2        The applicants are companies incorporated under Turkish law. Çolakoğlu Metalurji is an exporting producer of hot-rolled flat products. ÇOTAŞ is a related trading and export company.

3        On 14 May 2020, the European Commission initiated an anti-dumping investigation with regard to imports into the European Union of certain hot-rolled flat products of iron, non-alloy or other alloy steel (‘the product concerned’) originating in Türkiye (‘the investigation’).

4        The investigation covered the period from 1 January to 31 December 2019 (‘the investigation period’). The examination of trends relevant for the purpose of determining injury covered the period from 1 January 2016 to the end of the investigation period. The applicants submitted their written observations in the course of the investigation.

5        The applicants were selected among the three sampled Turkish exporters and submitted a questionnaire response on 6 July 2020 and a response to a deficiency letter on 26 August 2020.

6        A remote cross-check was carried out from 21 September to 25 September 2020.

7        On 6 January 2021, the Commission adopted Implementing Regulation (EU) 2021/9 imposing a provisional anti-dumping duty on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in Turkey (OJ 2021 L 3, p. 4; ‘the provisional regulation’), making the applicants’ exports of the product concerned to the European Union subject to a provisional anti-dumping duty of 7.6%.

8        On 23 April 2021, the Commission disclosed to the applicants the definitive facts and considerations on the basis of which it intended to impose definitive anti-dumping duties.

9        On 28 April 2021, the applicants proposed an undertaking, which was rejected by the Commission. Following a hearing with the Commission on 30 April 2021, the applicants submitted, on 3 May 2021, their observations on the final disclosure of 23 April 2021.

10      On 5 July 2021, the Commission adopted the contested regulation, imposing an anti-dumping duty of 7.3% on the imports into the European Union of the product concerned manufactured by the applicants.

 Forms of order sought

11      The applicants claim that the Court should:

–        annul the contested regulation;

–        order the Commission to pay the costs.

12      The Commission contends that the Court should:

–        dismiss the action as unfounded;

–        order the applicants to pay the costs.

 Law

13      In support of their action, the applicants raise four pleas in law, alleging, first, infringement of Article 2(10)(i) 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; ‘the basic regulation’) and a manifest error of assessment; second, infringement of Article 2(10)(b) of the basic regulation; third, a manifest error of assessment and consequent infringement of Article 2(10) of the basic regulation; and, fourth, infringement of Article 2(10)(j) of the basic regulation.

 The first plea in law, alleging infringement of Article 2(10)(i) of the basic regulation

14      The first plea consists of three parts. First, the applicants submit that the amount of the adjustment exceeds the commission actually paid. Second, the applicants claim that, since no profit margin was received, no adjustment under Article 2(10)(i) of the basic regulation should have been applied. Third, the applicants consider that the Commission made a manifest error of assessment in concluding that ÇOTAŞ operated as an agent working on a commission basis rather than as an internal sales department.

15      It is appropriate to begin by examining the third part, then the second part and, lastly, the first part.

 The third part of the first plea, relating to a manifest error of assessment

16      The applicants argue, in essence, that they constitute a single economic entity in which ÇOTAŞ performs the functions of an internal export sales department of the Çolakoğlu Group. Consequently, by regarding ÇOTAŞ as an agent working on a commission basis and, therefore, by deducting from the export price ÇOTAŞ’s selling, general and administrative (‘SG&A’) costs and theoretical profit, the Commission infringed Article 2(10)(i) of the basic regulation.

17      The Commission disputes that line of argument.

18      As a preliminary point, it follows from settled case-law that, in the sphere of the common commercial policy and, most particularly, in the realm of measures to protect trade, the EU institutions enjoy a broad discretion by reason of the complexity of the economic, political and legal situations which they have to examine. As regards the judicial review of that discretion, it must be limited to verifying whether relevant procedural rules have been complied with, whether the facts relied on in order to make the disputed choice have been accurately stated, and whether there has been a manifest error in the appraisal of those facts or a misuse of powers (see judgment of 12 May 2022, Commission v Hansol Paper, C‑260/20 P, EU:C:2022:370, paragraph 58 and the case-law cited).

19      As regards Article 2(10) of the basic regulation, it should be noted that the Commission has a wide discretion in assessing the fairness of the comparison between the normal value and the export price, since the vague concept of ‘fairness’ to be applied by the Commission in the context of that provision has to be made concrete on a case-by-case basis, depending on the relevant economic context (see, to that effect, judgment of 20 September 2019, Jinan Meide Casting v Commission, T‑650/17, EU:T:2019:644, paragraph 50 and the case-law cited).

20      It must be noted that Article 2(10) of the basic regulation seeks to ensure that the EU institutions draw a fair comparison between the export price and the normal value. To that end, that provision requires that the EU institutions take into consideration any factor that might affect price comparability (judgment of 6 September 2013, Godrej Industries and VVF v Council, T‑6/12, EU:T:2013:408, paragraph 22 (not published)).

21      According to Article 2(10)(i) of the basic regulation, ‘an adjustment shall be made for differences in commissions paid in respect of the sales under consideration[; t]he term “commissions” shall be understood to include the mark-up received by a trader of the product or the like product if the functions of such a trader are similar to those of an agent working on a commission basis’.

22      However, by way of exception to the general rule, an adjustment under Article 2(10)(i) of the basic regulation cannot be made where the producer established in a third State and its related distributor responsible for exports to the European Union form a single economic entity (judgment of 26 October 2016, PT Musim Mas v Council, C‑468/15 P, EU:C:2016:803, paragraph 39).

23      Recognition of the existence of a single economic entity avoids costs, which are clearly included in the sale price of a product when that sale is carried out by an integrated sales department in the producer’s organisation, no longer being included where the same sales activity is carried out by a company which is legally distinct, even though economically controlled by the producer (see judgment of 26 October 2016, PT Musim Mas v Council, C‑468/15 P, EU:C:2016:803, paragraph 41 and the case-law cited).

24      Thus, in the analysis of whether there is a single economic entity between a producer and its related distributor, it is crucial, under the case-law of the Court of Justice, to consider the economic reality of the relationship between that producer and that distributor. In view of the requirement of a conclusion reflecting the economic reality of the relationship between that producer and that distributor, the EU institutions are required to take account of all factors relevant to the determination as to whether or not that distributor carries out the functions of an integrated sales department within that producer (see judgment of 26 October  2016, PT Musim Mas v Council, C‑468/15 P, EU:C:2016:803, paragraph 43 and the case-law cited).

25      In addition, a single economic entity exists where a producer entrusts tasks which are normally the responsibility of an internal sales department to a distribution company for its products which it controls economically (judgment of 10 March 1992, Canon v Council, C‑171/87, EU:C:1992:106, paragraphs 9 and 10).

26      As regards the burden of proof relating to the specific adjustments listed in Article 2(10)(a) to (k) of the basic regulation, according to the case-law, that burden must be borne by the party seeking to rely on them (see judgment of 14 July 2021, Interpipe Niko Tube and Interpipe Nizhnedneprovsky Tube Rolling Plant v Commission, T‑716/19, EU:T:2021:457, paragraph 135 and the case-law cited).

27      The case-law has also established that, where the EU institutions have adduced consistent indicia to establish that a trader affiliated to a producer carries out functions comparable to those of an agent working on a commission basis, it will be for that trader or that producer to adduce evidence that an adjustment under Article 2(10)(i) of the basic regulation is not justified (see judgment of 14 July 2021, Interpipe Niko Tube and Interpipe Nizhnedneprovsky Tube Rolling Plant v Commission, T‑716/19, EU:T:2021:457, paragraph 137 and the case-law cited).

28      Nevertheless, the General Court must not only establish whether the evidence put forward is factually accurate, reliable and consistent but also ascertain whether that evidence contained all the relevant information which had to be taken into account in order to assess a complex situation and whether it was capable of substantiating the conclusions reached (see judgment of 10 July 2019, Caviro Distillerie and Others v Commission (C‑345/18 P, not published, EU:C:2019:589, paragraph 16 and the case-law cited).

29      In the present case, it is common ground between the parties that, during the investigation period, all export sales of the product concerned to the European Union were made through ÇOTAŞ, Çolakoğlu Metalurji’s related trader. The products manufactured by Çolakoğlu Metalurji are sold to ÇOTAŞ, which then resells them to independent customers in the European Union. However, the products are dispatched directly from Çolakoğlu Metalurji to its customers. Furthermore, it is not disputed that Çolakoğlu Metalurji made direct sales of the product concerned to the rest of the world and sales of other products to the European Union, or that all sales made on the domestic market were made directly by Çolakoğlu Metalurji. Lastly, it is also not disputed that there is a framework contract concluded between the producer Çolakoğlu Metalurji and its trader ÇOTAŞ, which provides for the payment of a fixed commission equal to 1 United States dollar (USD) per tonne of the product concerned sold for export by ÇOTAŞ, as well as a precise allocation of functions in the context of the export operations for which each of the parties to that contract is responsible.

30      In that regard, first, as regards the framework contract, the contested regulation states, in recital 79 thereof, that that contract establishes a commission to be paid by Çolakoğlu Metalurji to ÇOTAŞ on goods sold and that duties normally associated with a sales department were retained by the manufacturer, whereas the duties of the related trader corresponded to those of an agent performing a service concerning the manufacturer’s exports. Given that no further information about the contractual relationship between the producer and the related trader was provided, the Commission thus concluded that the contract contained clauses inconsistent with the claim that the economic reality of the relationship between the related trader and the manufacturer reflected the relationship between a manufacturer and an internal sales department.

31      Second, the Commission also observed in recital 83 of the contested regulation that, while the framework contract might be of relevance for tax reasons, that did not detract from the fact that that contract clearly stipulated that the related trader had performed export services against the payment of a commission on the basis of sales made. The Commission also considered that Çolakoğlu Metalurji’s functions demonstrated that it had its own fully functioning sales department for export sales.

32      Third, in recital 84 of the contested regulation, the Commission stated, in essence, that the commission provided for did not reflect ‘the proper remuneration for the service rendered on an arm’s length basis’. It therefore made an adjustment to reflect the proper remuneration for the service rendered on an arm’s length basis.

33      Fourth, as regards export sales, the Commission first of all relied, in recital 79 of the contested regulation, on the fact that the manufacturer also made direct export sales. Next, the Commission stated, in recital 81 of that regulation, that the legal regime attached to export sales was not determinative for the assessment of whether the sales constitute export sales, and that the fact that such direct sales were made, in addition to those made on the domestic market, were evidence that the producer retained sales functions.

34      Fifth, the Commission considered, in recital 82 of the contested regulation, that the fact that the totality of domestic sales were made directly by the producer without involvement of the related trader showed that the producer had a fully fledged internal sales department.

35      Sixth, in recitals 87 and 88 of the contested regulation, the Commission considered that the existence of control by the exporting producer over the related trader was not decisive. In addition, it considered that the fact that the related trader provides export services in exchange for a commission fee exclusively for the exporting producer as well as its location at the same address as the latter showed only that the related trader did not provide the same services to other customers at that stage. According to the Commission, that did not mean that the related trader was the internal sales department of the exporting producer.

36      In recital 89 of that regulation, the Commission therefore concluded that ‘the related trader was performing the functions of an agent dealing with export activities of the exporting producer’ and that it was appropriate, in view of the fact that that remuneration was affected by the intra-group relationship, to use a reasonable profit margin in order to avoid any distorting effect that might arise from internal arrangements between the exporting producer and the related trader.

37      It is necessary to examine the various factors relied on by the Commission in reaching the conclusion that Çolakoğlu Metalurji and ÇOTAŞ did not form a single economic entity.

–       The taking into account of the agreement between the applicants providing for the payment of commission

38      The applicants submit that the existence of an agreement between them does not mean that ÇOTAŞ carried out the activities of an agent working on a commission basis, given that that company does not perform functions similar to those of an agent working on a commission basis.

39      As is apparent from recital 79 of the contested regulation, the content of which is set out in paragraph 30 above, the Commission considered that the contract contained clauses that were inconsistent with the claim that the economic reality of the relationship between the related trader and the manufacturer reflected the relationship between a manufacturer and an internal sales department.

40      In the first place, according to the case-law, the existence of a contract concluded between the producer and its related distributor, providing for the payment of commissions to the latter, is an important factor in the relationship between those two companies, and to disregard it would be to obfuscate part of the economic reality of that relationship (judgment of 26 October 2016, PT Musim Mas v Council, C‑468/15 P, EU:C:2016:803, paragraph 56). It follows that the existence of an agreement between the applicants providing for the payment of commission is an important factor to be taken into consideration by the Court.

41      In that regard, first, it should be noted that that agreement provides for the payment of commission of USD 1 per tonne of product sold for export by ÇOTAŞ.

42      Second, in response to a measure of organisation of procedure, the applicants explained that, as regards the activities related to the export of Çolakoğlu Metalurji’s products, ÇOTAȘ’s profits resulting from the abovementioned commission for the intermediary export services are retained by ÇOTAȘ. It is difficult to reconcile the retention, by the related trader, of certain profits, however minimal, resulting from the commission, with the existence of a single economic entity.

43      In the second place, the applicants’ argument that the question is not whether ÇOTAŞ is an internal sales department, but whether ÇOTAŞ is an internal department involved in export sales on a logistical and financial level, also cannot succeed.

44      First, whatever ÇOTAŞ’s exact functions are, as follows from recital 83 of the contested regulation, Article 2(10)(i) of the basic regulation refers to commission paid in respect of the sales under consideration, namely, in the present case, export sales. The purpose of an adjustment under Article 2(10)(i) of that regulation is to ensure that any commission paid to an agent for export sales, to remunerate the services provided by that agent in relation to those sales activities, whatever those services consist of, is duly adjusted in order to ensure a fair comparison with domestic sales.

45      Second, as regards the applicants’ respective functions, it follows from the agreement in question that ÇOTAŞ’s role is to verify letters of credit, arrange and follow up the documents relating to customs clearance and loading, prepare the necessary export documents after loading and implement export procedures, such as the collection of the cost of the goods. That agreement also stipulates that Çolakoğlu Metalurji retains the main sales-related functions, such as gaining customers and establishing the necessary contractual and sales terms with those customers, including the type of product, the price or the loading time.

46      Accordingly, as is apparent from recital 79 of the contested regulation, the tasks performed by ÇOTAŞ corresponded to those normally carried out by an agent providing a service for the purposes of exporting a product made by the manufacturer and those functions had no equivalent in the determination of the normal value.

47      In the third place, the applicants emphasise the absence, in the agreement, of provisions regarding issues such as arbitration or product guarantees by referring in particular to the case-law concerning situations where such clauses existed (judgments of 25 June 2015, PT Musim Mas v Council, T‑26/12, not published, EU:T:2015:437, paragraphs 62 and 63, and of 14 July 2021, Interpipe Niko Tube and Interpipe Nizhnedneprovsky Tube Rolling Plant v Commission, T‑716/19, EU:T:2021:457, paragraph 163).

48      In that regard, it should be noted that the absence of an arbitration clause in the agreement between the applicants is not decisive. Although the insertion of such a clause may constitute evidence that a producer and its related trader do not form a single economic entity (see, to that effect, judgment of 25 June 2015, PT Musim Mas v Council, T‑26/12, not published, EU:T:2015:437, paragraph 63), each agreement must be analysed in the light of all its clauses, including clauses providing for the payment of commission and specifying the parties’ different functions. In addition, in accordance with the case-law, the Commission, in the contested regulation, rightly relied on a set of relevant factors to conclude that Çolakoğlu Metalurji and ÇOTAŞ did not form a single economic entity.

49      In those circumstances, it must be held that the existence of an agreement between the applicants, the fact that that agreement provides for the payment of commission from Çolakoğlu Metalurji to ÇOTAŞ when the product concerned is exported, and reserves to ÇOTAŞ certain functions typically performed by an agent, as well as the fact that ÇOTAŞ retains the profits from the collection of commission are important indicia for the purposes of determining whether ÇOTAŞ carried out the activities of an agent working on a commission basis.

–       The taking into account of Çolakoğlu Metalurji’s direct export sales

50      In the first place, the applicants claim that, in accordance with EU case-law, direct export sales by the producing company can constitute a ground for rejecting the existence of a single economic entity only if they are substantial and support other factors indicating the absence of a single economic entity. In the applicants’ opinion, none of those situations exists in the present case.

51      In that regard, it follows from the case-law that the existence of direct sales by the manufacturer is a relevant criterion for the purposes of ruling on the existence of an agent working on a commission basis (see, to that effect, judgment of 25 June 2015, PT Musim Mas v Council, T‑26/12, not published, EU:T:2015:437, paragraphs 68 to 70).

52      In the present case, despite the absence of direct sales, by the producer of the product concerned, to the European Union, the Commission took into account that, in terms of value, 5.49% of Çolakoğlu Metalurji’s sales of the product concerned to the rest of the world were direct sales.

53      In addition, it must be noted that the Commission took account of the fact that, in terms of value, 11% of other products sold to the rest of the world and 5.48% of other products sold in the European Union were direct sales made by the producer itself. The analysis of the existence of a single economic entity must also take account of products other than the product concerned (judgment of 25 June 2015, PT Musim Mas v Council, T‑26/12, not published, EU:T:2015:437, paragraph 51).

54      The applicants argue that the appropriate comparison should have been made between the total direct export sales and the total export sales, namely including direct and indirect sales. According to that method, Çolakoğlu Metalurji’s total direct export sales represent only 2.3% (77.3 million Turkish lira (TRY)) of the total export sales (TRY 3.31 billion).

55      In that regard, it is sufficient to note that the applicants do not dispute either the reality of the export sales made directly by Çolakoğlu Metalurji, as stated in recital 79 of the contested regulation, or the data referred to in paragraphs 52 and 53 above as such. Thus, the question of how those data should be ‘compared’ is of less importance in the overall assessment of all the factors which the Commission was required to take into account.

56      In the second place, the applicants submit that most direct export sales made by the producer are not genuine export sales because, due to legal requirements under Turkish law, those sales are made, inter alia, either to customers located in a foreign trade zone in Türkiye or to customers situated in Türkiye, but who subsequently export the products to third countries.

57      The Commission does not dispute that those sales were made in a particular context and that, for most of those transactions, legal requirements prevented ÇOTAŞ’s involvement. It nevertheless considered, in recital 81 of the contested regulation, that ‘the legal regime attached to export sales is not determinative for the assessment of whether the sales constitute export sales’.

58      In that regard, the Court has already accepted that a related company may carry out the functions of an internal sales department by organising and negotiating the producer’s sales without issuing directly all of the invoices relating to those sales. Various reasons may explain the ‘on paper’ involvement of the producer for the invoicing, which may include the sole purpose of guaranteeing the origin of the products (see, to that effect, judgment of 25 June 2015, PT Musim Mas v Council, T‑26/12, not published, EU:T:2015:437, paragraph 68).

59      However, in the present case, the applicants have not sought to demonstrate that the producer’s role was limited to such an on-paper involvement consisting solely in issuing the invoice.

60      On the contrary, the agreement concluded between Çolakoğlu Metalurji and ÇOTAŞ provides that Çolakoğlu Metalurji is responsible for finding customers and concluding contracts with them, as is apparent from recital 83 of the contested regulation. Çolakoğlu Metalurji therefore performed, according to the actual wording of that agreement, most, if not all, of the functions normally performed by a sales department, as stated in recital 85 of the contested regulation.

61      It must therefore be concluded that, even for sales made through ÇOTAŞ, Çolakoğlu Metalurji’s involvement was not limited to an on-paper involvement in respect of invoicing, and Çolakoğlu Metalurji retained the most important sales functions, as is apparent from the agreement concluded between the applicants.

62      Accordingly, it must be held that Çolakoğlu Metalurji’s export sales are one indication, among others, of the fact that it itself had a fully operational internal sales department and that, therefore, ÇOTAŞ could not be regarded as fulfilling the role of such an internal department, but rather as fulfilling the role of an agent.

63      The Commission was therefore entitled, without making a manifest error of assessment, to take into account the existence of those sales as one of the relevant indicia, among others, for the purposes of applying Article 2(10)(i) of the basic regulation.

–       The taking into account of Çolakoğlu Metalurji’s direct domestic sales

64      The applicants argue that the existence of direct sales by Çolakoğlu Metalurji on the domestic market is irrelevant for the purposes of determining whether there is a single economic entity in terms of exports.

65      In recital 82 of the contested regulation, the Commission considered that the existence of direct sales on the domestic market made by Çolakoğlu Metalurji itself shows that the latter ‘has a full[y] fledged internal sales department, which is a relevant factor and was recognised as such by the General Court’.

66      Thus, according to the case-law, the fact that the producer directly invoices domestic sales may constitute one factor, among others, that must be taken into account in assessing the existence of a single economic entity (see, to that effect, judgment of 25 June 2015, PT Musim Mas v Council, T‑26/12, not published, EU:T:2015:437, paragraphs 50 and 71).

67      In the present case, the fact that Çolakoğlu Metalurji made all domestic sales without the involvement of any trader demonstrates, as the Commission correctly observed, that Çolakoğlu Metalurji had an internal sales department and that, consequently, ÇOTAŞ also could not be regarded as such a department. It is therefore a relevant factor for the purposes of the application of Article 2(10)(i) of the basic regulation which the Commission could, or even had to, take into account.

–       The other factors taken into account by the Commission

68      The applicants submit that there are no other factors capable of demonstrating that ÇOTAŞ performed tasks of an agent working on a commission basis. They state that ÇOTAŞ is entirely controlled by Çolakoğlu Metalurji, that they are located in the same building, and point to the absence of ÇOTAŞ’s purchases from independent manufacturers.

69      In that regard, it is not disputed that Çolakoğlu Metalurji holds 99.98% of the shares in ÇOTAŞ; that fact can be taken into account amongst all the relevant factors.

70      However, that factor should be put into perspective alongside the other relevant factors. If the mere existence of economic control were sufficient to conclude that there is a single economic entity, Article 2(10)(i) of the basic regulation would be deprived of any practical effect.

71      It is also not disputed that ÇOTAŞ did not make any purchases from unrelated suppliers and that the applicants are located in the same building.

72      In accordance with the case-law referred to in paragraph 24 above and in accordance with recital 88 of the contested regulation, the Commission took those factors into account in the overall assessment of all the relevant factors, which it was required to carry out, in order to determine the economic reality of the relationship between the applicants and concluded, in essence, and correctly, that those factors were not such as to call into question the findings set out in recitals 79 to 86 of the contested regulation, as follows from paragraphs 38 to 67 above.

73      It follows from all of the foregoing that the Commission did not make a manifest error of assessment when it made an overall assessment, in the contested regulation, of all the relevant factors in order to rule out the classification as a single economic entity, in view of the economic reality of the relationship between ÇOTAŞ and Çolakoğlu Metalurji.

74      The third part of the first plea must therefore be rejected as unfounded.

 The second part of the first plea, concerning the absence of a profit margin

75      The applicants submit that Article 2(10)(i) of the basic regulation includes two adjustment scenarios, namely (i) commissions paid in respect of sales, and (ii) the mark-up received by a trader of the product or of the like product if the functions of such a trader are similar to those of an agent working on a commission basis. The applicants argue that no adjustment is possible in the second scenario unless the trader receives a mark-up when reselling. In the present case, no mark-up was received because ÇOTAŞ sells to an independent European customer at the same price as that charged to it by Çolakoğlu Metalurji.

76      The Commission disputes that line of argument.

77      In that regard, it should be recalled that Article 2(10)(i) of the basic regulation provides that ‘an adjustment shall be made for differences in commissions paid in respect of the sales under consideration[; t]he term “commissions” shall be understood to include the mark-up received by a trader of the product or the like product if the functions of such a trader are similar to those of an agent working on a commission basis’.

78      According to the applicants, in order to apply an adjustment pursuant to Article 2(10)(i) of the basic regulation, commission must actually have been paid. An adjustment can also be made for the mark-up received by a trader, but only if the trader’s functions are similar to those of an agent working on a commission basis.

79      In the first place, according to the case-law, Article 2(10)(i) of the basic regulation allows an adjustment to be made not only for differences in commissions paid in respect of the sales under consideration, but also for the mark-up received by traders of the product if they carry out functions which are similar to those of an agent working on a commission basis (see judgment of 25 June 2015, PT Musim Mas v Council, T‑26/12, not published, EU:T:2015:437, paragraph 77 and the case-law cited).

80      It must therefore be held that the EU legislature did not intend to draw a distinction between ‘commissions’ and ‘mark-up’. It merely sought to provide clarification in view of the nature of the commercial relationship between the parties in question in the event that they do not have a relationship of principal and agent, but achieve the same economic result by acting as seller and buyer. The second sentence of Article 2(10)(i) of the basic regulation therefore merely defines the term ‘commissions’ set out in the first sentence of that article.

81      In the second place, it is apparent from the contested regulation, in particular recitals 79 and 84, that the adjustment at issue is based on the fact that there was an agreement providing for commission between the applicants and not on the fact that ÇOTAŞ made resales and received a mark-up.

82      In the third place, the Commission submits, without being challenged by the applicants, that it is both unreasonable and illogical to assert that it can adjust the commission paid provided that a certain mark-up is received, but not in cases where no mark-up is received.

83      Therefore, the second part of the first plea appears to be based on a misunderstanding of the law and facts of the case.

84      The Commission therefore did not infringe Article 2(10)(i) of the basic regulation by relying on commission in the form of a fixed amount and not on a profit margin. Accordingly, the second part of the first plea must be rejected as unfounded.

 The first part of the first plea, relating to an adjustment allegedly higher than the commission actually paid

85      The applicants submit that, where an adjustment is made under the first scenario referred to in Article 2(10)(i) of the basic regulation, that is to say, where commission is paid, that adjustment can be made only in respect of the amount of commission actually paid and not in respect of a hypothetical amount that the Commission deems to be more appropriate. In the present case, the adjustment made by the Commission exceeded the amount of commission actually paid. In so doing, the Commission infringed Article 2(10)(i) of the basic regulation. In addition, the applicants argue that they were not given an opportunity to be heard on a new argument which the Commission introduced in the contested regulation.

86      The Commission disputes those arguments.

87      As follows from the case-law referred to in paragraphs 18, 19, 20 and 28 above, although the Commission has a wide discretion in assessing the fairness of the comparison between the normal value and the export price, it is for the EU Courts to verify whether the Commission failed to take essential factors into account.

88      Moreover, it is apparent from recital 84 of the contested regulation that the Commission considered that the commission provided for in the framework contract did not reflect the proper remuneration for the service rendered on an arm’s length basis. Thus, an adjustment was made by applying Article 2(9) of the basic regulation by analogy, as follows from recitals 84 and 89 of the contested regulation, and the amount was therefore calculated on the basis of the profit margin achieved by an importer carrying out functions similar to those of ÇOTAŞ in accordance with recital 55 of the provisional regulation.

89      In the first place, the applicants do not dispute the fact that Çolakoğlu Metalurji paid ÇOTAŞ a commission for export services at the rate of USD 1 per tonne sold, in accordance with the agreement concluded between the applicants. Since the fixing of a commission was provided for in the agreement between the applicants and they have not proved that that commission had not actually been paid, it must be held that a commission was actually paid in return for the provision of the services set out in that agreement.

90      By contrast, no such commission was paid in respect of domestic sales. Therefore, the Commission cannot be criticised for having made an adjustment under Article 2(10)(i) of the basic regulation in order to ensure a fair comparison between the normal value and the export price.

91      In the second place, it should be noted that, in the context of the present part of the plea, the applicants do not dispute the possibility of an adjustment, but argue that, in so far as the adjustment made for commission paid exceeds the commission actually paid to ÇOTAŞ, the Commission infringed Article 2(10)(i) of the basic regulation.

92      In the third place, the applicants complain that the Commission wrongly applied Article 2(9) of the basic regulation by analogy in order to adjust the commission paid by Çolakoğlu Metalurji to ÇOTAŞ. Article 2(9) of that regulation concerns the determination of the export price, whereas Article 2(10) of that regulation concerns adjustments intended to reflect the differences in respect of factors affecting price comparability.

93      In particular, the applicants refer to the solution adopted by the Court of Justice in the Musim Mas case, according to which no conclusion, applicable to the analysis to be carried out by the EU institutions in the context of Article 2(10)(i) of the basic regulation, can be drawn on the basis of Article 2(9) of that regulation (judgment of 26 October 2016, PT Musim Mas v Council, C‑468/15 P, EU:C:2016:803, paragraph 88).

94      In that regard, as the Commission submits, account must be taken of the fact that those considerations set out by the Court of Justice concerned the issue of the burden of proof and the evidence which a party relying on Article 2(10)(i) of the basic regulation must produce. Moreover, the Court of Justice rejected the claim that, ‘in the context of the application of Article 2(10)(i) of the basic regulation, there is a presumption that two related undertakings do not operate independently’ (judgment of 26 October 2016, PT Musim Mas v Council, C‑468/15 P, EU:C:2016:803, paragraph 86), unlike the presumption established by Article 2(9) of that regulation (judgment of 26 October 2016, PT Musim Mas v Council, C‑468/15 P, EU:C:2016:803, paragraph 88). Furthermore, the question of whether or not the related trader should be regarded as an internal sales department is separate from the question relating to the quantification of the adjustment itself at issue in the present case in the context of the present part of the plea. The Court of Justice confined itself to ruling on the first question. In other words, the Court of Justice did not call into question the fact that the Commission may take into account the relationship between the manufacturer and the related trader when determining the appropriate amount of the adjustment to be made, as in the case of the adjustment it usually makes under Article 2(9) of the basic regulation.

95      Accordingly, the principle set out in Article 2(9) of that regulation, according to which ‘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’ must also be capable of applying when quantifying the amount of commission to be deducted from the export price in order not to deprive Article 2(10)(i) of the basic regulation of its practical effect.

96      Thus, what matters for the purposes of quantifying the adjustment is the impact of the related trader’s role on the export price and, in the present case, the issue is what the actual export price would be on the basis of an arm’s length relationship between the exporter and the trader.

97      It must be concluded that, in the circumstances of the present case, the Commission’s application, by analogy, of Article 2(9) of the basic regulation when quantifying the amount of commission to be deducted under Article 2(10)(i) of that regulation was justified.

98      In the fourth place, the applicants submit that they were not given an opportunity to be heard on a new argument which the Commission introduced into the contested regulation and according to which, in essence, ‘an actual commission was paid by Çolakoğlu Metalurji to ÇOTAŞ but, as this actual commission was paid between related parties, the amount was adjusted to reflect a proper remuneration, by applying Article 2(9) [of the] basic [r]egulation by analogy’.

99      As regards the right to be heard, the EU Courts have established that, in anti-dumping proceedings, the parties concerned have the right to be informed of the facts and essential considerations on the basis of which it is envisaged that the imposition of definitive anti-dumping duties will be recommended. In addition, the parties concerned must be informed on a date which still allows them effectively to make their point of view known before the adoption of the contested regulation (see judgment of 10 March 2009, Interpipe Niko Tube and Interpipe NTRP v Council, T‑249/06, EU:T:2009:62, paragraph 200 and the case-law cited).

100    However, the right to be heard extends to all the factual and legal material which forms the basis of the decision-making act, but not to the final position which the authority intends to adopt. Thus, that right does not require that, before taking a final position on the assessment of the evidence submitted by a party, the administration must offer that party a further opportunity to comment on that evidence (see judgment of 14 July 2021, Interpipe Niko Tube and Interpipe Nizhnedneprovsky Tube Rolling Plant v Commission, T‑716/19, EU:T:2021:457, paragraph 211 and the case-law cited).

101    In the present case, after stating in recital 54 of the provisional regulation that the related trader did not meet the criteria to support a finding that it forms a single economic entity with its producer, the Commission stated, in recital 55 of that regulation, the following:

‘As a consequence, to establish an export price ex-works of that exporting producer, the export price was adjusted pursuant to Article 2(10)(i) of the basic Regulation. Thus, the Commission deducted from the export price the SG&A costs of the related trader that was found not to form a single economic entity with the exporting producer, and a profit equal to the profit of an unrelated importer in the Union established on the basis of the information on the file of this investigation as well as the findings of a previous investigation on imports of products similar to the product under investigation…’

102    Therefore, the provisional regulation already informed the applicants that the adjustment to the export price was justified, inter alia, by the existence of related parties. Even if it is true that the contested regulation refers for the first time to an application by analogy of Article 2(9) of the basic regulation in order to take account of the functions of the related trader and to reflect the proper remuneration for the service rendered on an arm’s length basis, the reasons which led the Commission to make that adjustment remained, in essence, unchanged. The Commission merely elaborated on its reasoning but did not change the nature or amount of the adjustment applied. The applicants were therefore informed of the facts and legal considerations that were of fundamental importance, and they were able to express their views in that regard during the administrative procedure.

103    In the fifth place, the applicants claim that no information or explanation was provided as to why the Commission considered that the commission of USD 1 per tonne provided for in the agreement between Çolakoğlu Metalurji and ÇOTAŞ did not constitute proper remuneration and that an additional adjustment was necessary. Nor did the Commission investigate whether the functions of the unrelated importer, taken as a reference, were identical to ÇOTAŞ’s functions.

104    It should be noted that the Commission is not required to specify all the often very numerous and complex matters of fact and law covered by a regulation imposing definitive anti-dumping duties. It is sufficient if the Commission sets out the facts and the legal considerations having decisive importance (see, to that effect, judgments of 13 September 2010, Whirlpool Europe v Council, T‑314/06, EU:T:2010:390, paragraph 114, and of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 126). Furthermore, in the case of a regulation, the statement of reasons may be limited to indicating the general situation which led to its adoption, on the one hand, and the general objectives which it is intended to achieve, on the other (see judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 89 and the case-law cited).

105    First, as regards specifically the explanations provided as to why the Commission considered that the commission of USD 1 per tonne did not constitute proper remuneration, it is sufficient to observe that the Commission stated, on the one hand, in recital 84 of the contested regulation, that the adjustment had been made to ‘reflect the proper remuneration for the service rendered on an arm’s length basis’ by adding a reasonable profit, so that it could justify the additional adjustment, and, on the other hand, in recital 89 of the contested regulation, that ‘the related trader was paid by means of a commission on the basis of the sales made[; s]ince such remuneration was affected by the intra-group relationship, and applying Article 2(9) of the basic Regulation by analogy, it was considered appropriate to use a reasonable profit margin in order to avoid any distorting effects that may arise from internal arrangements between the exporting producer and the related trader’.

106    It follows that the Commission set out, to the requisite legal standard, the facts and legal considerations which were of fundamental importance and which explained how the commission of USD 1 per tonne provided for in the agreement concluded between Çolakoğlu Metalurji and ÇOTAŞ did not constitute proper remuneration.

107    Second, the applicants argue that the Commission did not fulfil its obligation to prove that it was necessary to use the adjustment at issue.

108    The applicants rely on the case-law according to which, where the EU institutions take the view that it is appropriate to apply a downward adjustment of the export price, on the ground that a sales company affiliated to a producer carries out functions comparable to those of an agent working on a commission basis, it is the responsibility of those institutions to adduce at the very least consistent evidence showing that that condition is fulfilled (judgments of 26 October 2016, PT Musim Mas v Council, C‑468/15 P, EU:C:2016:803, paragraph 84, and of 10 March 2009, Interpipe Niko Tube and Interpipe NTRP v Council, T‑249/06, EU:T:2009:62, paragraphs 60 and 61). It should be noted that the Commission, as stated in paragraphs 30 to 74 above, provided consistent indicia demonstrating that ÇOTAŞ performed functions comparable to those of an agent working on a commission basis.

109    Moreover, as set out in paragraph 105 above, the Commission provided evidence, in recital 84 of the contested regulation, to show that the adjustment had been made to ‘reflect the proper remuneration for the service rendered on an arm’s length basis’ by means of the addition of a reasonable profit. Furthermore, it should be noted that ÇOTAŞ provided services specifically related to export sales, but no equivalent commission was paid for the domestic market. As stated in recital 83 of the contested regulation, the purpose of an adjustment under Article 2(10)(i) of the basic regulation is to ensure that any commission paid to an agent for export sales to remunerate the services performed by that agent in relation to those sales activities, whatever those services consist of, is duly adjusted in order to ensure comparability with domestic sales.

110    The Commission thus also discharged its burden of proof as regards justification for the additional adjustment on the basis of Article 2(10)(i) of the basic regulation.

111    Third, as regards the applicants’ argument that the Commission did not investigate whether the functions of the unrelated importer were identical to ÇOTAŞ’s functions and, in general, that little or no information was provided on the other investigation, it should be noted that the previous investigation in question was referred to in recital 55 of the provisional regulation and that that investigation refers to an investigation relating to a very similar product.

112    First of all, as follows from recital 55 of the provisional regulation, a reasonable profit margin was calculated on the basis of the information contained in the file of that investigation and on the basis of the findings of a previous investigation into imports of products similar to the product under investigation. To that end, it should be noted that that importer provided, as did ÇOTAŞ in the context of the investigation that led to the contested regulation, services ‘related to customs clearance and loading, preparing the necessary export documents after loading and carrying out export related procedures’, as described in recital 89 of the contested regulation.

113    Next, it should also be noted that the applicants did not raise the issues referred to in paragraph 111 above in the context of their observations on the provisional measures or in their observations on the definitive measures, which would have enabled the Commission to provide further clarifications.

114    Lastly, in the rejoinder, the Commission confirmed that the investigation, in which the data that were obtained from the unrelated importer and verified by the Commission, was the investigation into imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation. That importer specialised, in particular, in cold-rolled or hot-rolled flat steel products. For that reason, and on the basis of a detailed analysis of the investigation file in that case and of the functions performed by the unrelated importer, the Commission cannot be criticised for having considered it appropriate also to rely, in the present investigation, on the verified data of that importer in context of the present investigation.

115    It follows that the Commission sufficiently examined whether the unrelated importer’s functions were identical to ÇOTAŞ’s functions and provided essential information enabling the applicants to make their views known effectively.

116    It follows from the foregoing that the Commission did not infringe Article 2(10)(i) of the basic regulation by adjusting the existing commission in the light of the relationship between the applicants.

117    In the sixth place, it is necessary to assess whether the Commission’s fixing of the amount of the commission in question is vitiated by a manifest error of assessment. Although that complaint was not expressly raised by the applicants in their application, it is nevertheless apparent from their pleadings that they question the Commission’s approach in that regard.

118    In the present case, in recital 89 of the contested regulation, the Commission considered that the related trader had actually been paid by means of a commission on the basis of the sales made, and that since such remuneration was affected by the intra-group relationship, it was appropriate to use a reasonable profit margin in order to avoid any distorting effects that may arise from internal arrangements between the exporting producer and the related trader.

119    First, the Commission was entitled to take the view that the commission in question of USD 1 per tonne did not reflect market conditions and therefore had to be adjusted. Not only was that commission agreed between related parties, but it should be noted, as is apparent from recital 84 of the contested regulation, from the framework contract and the applicants’ explanations, that only certain profits generated by the export transactions went back to ÇOTAŞ. It can reasonably be considered that an unrelated trader would have sought to make a reasonable profit for its work (see, to that effect and by analogy, judgment of 22 September 2021, Severstal v Commission, T‑753/16, not published, EU:T:2021:612, paragraph 162).

120    In addition, according to the case-law (i) a reasonable profit margin may, where there is an association between producer and importer within the European Union, be based not on information from the associated importer, which may be influenced by that association, but on information from an unrelated importer, and (ii) data from a relationship between related entities must be regarded as dubious (see judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraphs 157 and 163 and the case-law cited).

121    Consequently, the Commission did not make a manifest error of assessment in taking the view that the commission in question of USD 1 per tonne had to be adjusted.

122    Second, as is apparent from the explanations of the applicants and the Commission, the latter deducted, instead of the stipulated commission, ÇOTAŞ’s SG&A costs (0.1754%), plus a profit margin of 2% on the turnover from ÇOTAŞ’s final selling price. That margin was calculated on the basis of the profit margin achieved by an importer performing functions similar to those of ÇOTAŞ, as stated in recital 55 of the provisional regulation.

123    On the one hand, it should be noted that the profit margin of 2% does not appear unreasonable for services in respect of the export of the goods in question. On the other hand, as is apparent from recital 55 of the provisional regulation, that margin was calculated on the basis of the information contained in the file of that investigation and the findings of a previous investigation into imports of products similar to the product under investigation. To that end, that importer provided, as did ÇOTAŞ in the context of the present investigation, services ‘related to customs clearance and loading, preparing the necessary export documents after loading and carrying out export related procedures’.

124    Consequently, since ÇOTAŞ provided services such as customs clearance and loading, preparing the necessary export documents after loading and carrying out export related procedures, its actual SG&A costs plus the level of profit of an unrelated importer can be regarded as corresponding to the functions performed by that company and represent a reasonable level of profit.

125    Third, on the basis of the audit report provided during the investigation, the applicants submit, in their reply, that the costs incurred by ÇOTAŞ in connection with export sales amounted to TRY 5 743 836, whereas the revenue from the export agency service amounted to TRY 6 256 504. Accordingly, ÇOTAŞ made a profit – derived only from commission – of 8.2% (as a percentage of revenue) and 8.9% (as a percentage of costs) on its activities relating to Çolakoğlu Metalurji’s export sales.

126    The applicants thus submit that ÇOTAŞ’s profit margin should be adjusted on the basis of the costs incurred by ÇOTAŞ, and not on the basis of sales revenues facilitated by its services. They complain that the Commission failed to explain why a profit margin of more than 8% was unreasonable.

127    First of all, it should be noted that those elements were not put forward by the applicants either during the investigation or in their application.

128    Next, even if those arguments were admissible, the Commission, in its rejoinder, states that, on the basis of the applicants’ observations verified during the investigation, the revenue from ÇOTAŞ’s resales of the exports of the product concerned to the European Union amount to more than TRY 2.37 billion during the investigation period. Therefore, the commission paid by Çolakoğlu Metalurji, if allocated only to exports of the product concerned to the European Union on the basis of turnover, amounts to TRY 4.42 million during the investigation period. By subtracting the actual costs incurred by ÇOTAŞ in respect of the exports of the product concerned to the European Union, that would result, if the applicants’ line of argument were to be accepted, in a profit margin of 0.0098%, which would not, however, reflect remuneration on an arm’s length basis.

129    In that regard, the calculation of the profit margin consists, in general, in dividing the net profit by income or sales, also referred to as turnover. Therefore, basing the profit margin on the turnover of the products sold, as the Commission did in the present case, cannot be considered incorrect. Moreover, the applicants’ estimate of the profit margin is in any event imprecise, since the audit report, taken as the basis for the calculation carried out by the applicants, does not specify whether the exports of the product concerned to the European Union are specifically taken into account.

130    Lastly, in the context of the investigation in question, the Commission used concrete and verified evidence of the behaviour of an unrelated entity providing ‘similar’ services to those of the related trader. Consequently, it chose to apply a profit margin of 2% on the turnover of the final sales price, which, as follows from paragraph 124 above, may be regarded as reasonable.

131    Thus, it must be concluded that the Commission did not make a manifest error of assessment in its calculation of the profit margin.

132    On the basis of all of the foregoing and in view of the Commission’s wide discretion referred to in paragraph 18 above, it must be held that the Commission neither infringed Article 2(10)(i) of the basic regulation nor made a manifest error of assessment in adjusting the existing commission in the light of the relationship between the applicants. The first part of the first plea must, therefore, be rejected.

133    It follows that the first plea must be rejected in its entirety.

 The second plea in law, alleging infringement of Article 2(10)(b) of the basic regulation

134    In the context of the second plea, the applicants submit, in essence, that non-payment of import duties is not the relevant legal criterion for rejecting an adjustment under Article 2(10)(b) of the basic regulation.

135    The Commission disputes those arguments.

136    Article 2(10)(b) of the basic regulation provides that ‘an adjustment shall be made to the normal value for an amount corresponding to any import charges or indirect taxes borne by the like product and by materials physically incorporated therein, when intended for consumption in the exporting country and not collected or refunded in respect of the product exported to the Union’.

137    In the first place, in their reply to the questionnaire submitted in the context of the investigation, the applicants requested an adjustment for import charges and indirect taxes to take account of the fact that, for the finished exported products, they did not have to pay import duties for imported input materials, since those duties are payable only when those materials are used in the manufacture of finished products sold on the domestic market.

138    That request for an adjustment was rejected in recitals 62 and 63 of the provisional regulation on the following grounds:

‘(62)      … under the inward processing regime (IPR), domestic producers are exempted from the payment of such duty if the imported slabs/steel scrap are used to produce finished products that are finally exported. The two sampled exporters claimed that the amount of duties they would have paid if the finished [hot rolled flat steel] were sold domestically instead of exported should be taken into account for the purpose of fair comparison of the normal value and the export price.

(63)      However, the investigation showed that none of the two sampled exporters paid any import duty during the [investigation period], as they fulfilled the export commitment linked to each IPR permit, thus the duty drawback adjustment claimed only represented a theoretic cost. For this reason, the claim was considered unfounded and therefore rejected.’

139    In the contested regulation, the Commission stated, in recital 105, that the applicants had not put forward any new arguments that could change that assessment, and the provisional findings were therefore confirmed. As an additional consideration, the Commission also noted in recital 110 of that regulation that it had appeared that, contrary to the company’s allegations, the domestic sales prices charged by the exporting producer did not take into account the amount of the claimed duty drawback, which would otherwise render the sales loss-making.

140    First, the applicants claim that the expression ‘borne by’ in Article 2(10)(b) of the basic regulation has a broader meaning than the expression ‘paid by’ in Article 2(9) of the basic regulation. However, no conclusion can be drawn solely from the wording of the latter provision and, in particular, it cannot be inferred that those two expressions have different meanings. When applying Article 2(9) of the basic regulation, the EU institutions are supposed to rely on the actual costs incurred by importers who are the subject of an investigation and whose accounts have been verified.

141    Moreover, Article 2(10)(b) of the basic regulation does not refer to the indirect effects of charges and taxes, but only to ‘import charges or indirect taxes borne by the like product and by materials physically incorporated therein’.

142    Second, the applicants argued, in their observations on the provisional disclosure, that the mere existence of an import duty on an input has an effect on the price charged by domestic suppliers of that input, regardless of whether or not that import duty was actually paid. Subsequently, in their reply, they stated that import duties on slabs have an impact on the sales price of the finished products on the domestic market.

143    In accordance with the case-law cited in paragraph 26 above, it is for the party claiming an adjustment under Article 2(10)(b) of that regulation to demonstrate, inter alia, first, that an import charge has been paid on an input and, second, that the import charge or its equivalent affects prices and price comparability.

144    Even if a broad interpretation of the concept of ‘taxes borne’ were to be accepted, the applicants have not succeeded in proving either that, owing to the import duty, the prices of slabs manufactured on the domestic market were necessarily increased and raised to the price level of imported slabs, or that that increase in the price of slabs was taken into account in the prices of the applicants’ sales of hot-rolled flat steel on the domestic market and that the equivalent of an import charge had thus affected price comparability.

145    It should be noted in that respect that those prices also depend on other factors, such as the costs of production, the level of charges, the level of imports or the level of competition on the market in question. The applicants have not demonstrated that the import duties could, in the present case, have an effect on the price and on the adjustment made under Article 2(10)(b) of the basic regulation, which refers to differences affecting price comparability.

146    In that regard, it is common ground between the parties that the applicants did not purchase any slabs on the domestic market during the investigation period and that the slabs which they purchased during that period were imported (21% of the total quantity of slabs used) without import duties having to be paid. The other slabs were produced by Çolakoğlu Metalurji itself, in its capacity as a vertically integrated producer of hot-rolled flat steel. Furthermore, the applicants have not demonstrated that the final sales price of hot-rolled flat steel was affected by import duties on the slabs.

147    Third, as regards the applicants’ reference to the determination of a duty drawback adjustment by the US Department of Commerce, suffice it to note that decisions taken by investigating authorities of third States pursuant to their own anti-dumping legislation are irrelevant in the context of the analysis of the application of EU law (see, to that effect, judgment of 1 July 2010, AstraZeneca v Commission, T‑321/05, EU:T:2010:266, paragraph 368 and the case-law cited) in so far as the EU judicature, when adjudicating on an action for annulment on the basis of Article 263 TFEU, must assess the lawfulness of the contested act in the light of EU law (judgment of 16 July 2020, ADR Center v Commission, C‑584/17 P, EU:C:2020:576, paragraph 81). Moreover, as the Commission submits, the underlying facts and the applicable law in that US investigation were not clearly set out either during the administrative procedure or during the present action.

148    It must therefore be held that the Commission did not infringe Article 2(10)(b) of the basic regulation.

149    In the second place, the applicants complain that the Commission failed to respond to a number of their arguments and thus infringed the principle of good administration. The applicants base their observations on the provisional disclosure in which, following the rejection of their request for an adjustment, they provide arguments seeking to demonstrate that the mere existence of an import duty on an input has an effect on the price charged by the domestic suppliers of that input, whether or not that import duty was actually paid.

150    In that regard, the applicants state that Article 2.4 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (OJ 1994 L 336, p. 103; ‘the Anti-Dumping Agreement’) provides, in the relevant part, that the ‘authorities shall indicate to the parties in question what information is necessary to ensure a fair comparison and shall not impose an unreasonable burden of proof on those parties’.

151    First of all, the provisions of the basic regulation, inasmuch as they correspond to provisions of the World Trade Organization (WTO) Anti-Dumping Agreement, are to be interpreted, as far as possible, in the light of the corresponding provisions of that agreement, as interpreted by the Dispute Settlement Body of the WTO (see judgment of 21 December 2022, Grünig v Commission (T‑746/20, EU:T:2022:836, paragraph 163 and the case-law cited).

152    In that regard, it should be noted that, in contrast to Article 2(10) of the basic regulation, Article 2.4 of the Anti-Dumping Agreement states that ‘the authorities shall indicate to the parties in question what information is necessary to ensure a fair comparison and shall not impose an unreasonable burden of proof on those parties’. Those requirements are not expressly restated in Article 2(10) of the basic regulation. However, they form part of the general principles of EU law and, in particular, the principle of sound administration, which is also set out in Article 41 of the Charter of Fundamental Rights of the European Union (OJ 2010 C 83, p. 389). Thus, it is for the Court to ascertain whether the institutions took those requirements into account when applying Article 2(10) of the basic regulation (see, to that effect, judgment of 6 September 2013, Godrej Industries and VVF v Council, T‑6/12, EU:T:2013:408, paragraph 51 and the case-law cited).

153    Next, it should be noted that the right to sound administration presupposes a duty of diligence which requires the competent institution to examine carefully and impartially all the relevant aspects of the individual case (see judgment of 14 December 2022, PT Wilmar Bioenergi Indonesia and Others v Commission, T‑111/20, EU:T:2022:809, paragraph 301 and the case-law cited).

154    Lastly, it does not follow from the wording of Article 2(10) of the basic regulation as a whole or from the case-law that, where the Commission finds that a request for adjustment submitted by an interested party is not sufficiently substantiated, it would be required to ask the interested party to provide it with additional information (judgment of 20 September 2019, Jinan Meide Casting v Commission, T‑650/17, EU:T:2019:644, paragraph 324 (not published)).

155    Moreover, the Commission is not required to respond, in a regulation fixing definitive anti-dumping duties, to all of the arguments advanced by the interested parties during the investigation procedure, and that failure to respond does not automatically establish a failure to consider those arguments. On the contrary, it is sufficient for the Commission to set out the facts and the legal considerations having decisive importance in the scheme of the contested regulation (see judgment of 5 May 2021, Acron and Others v Commission, T‑45/19, not published, EU:T:2021:238, paragraph 95 and the case-law cited).

156    In the present case, the provisional regulation already explained, in recital 63, that ‘the investigation showed that none of the two sampled exporters paid any import duty during the [investigation period], as they fulfilled the export commitment linked to each IPR permit, thus the duty drawback adjustment claimed only represented a theoretic cost. For this reason, the claim was considered unfounded and therefore rejected’.

157    In recital 105 of the contested regulation, the Commission again rejected the parties’ claims on the ground that ‘the companies did not provide any new evidence on the duty drawback adjustment changing [its] provisional assessment’.

158    In recital 110 of the contested regulation, the Commission also stated that ‘the … sales prices charged by the exporting producer did not take into account the amount of the claimed duty drawback’.

159    Furthermore, as follows from the examination of the first part of the present part of the plea in paragraphs 137 to 148 above, Article 2(10)(b) of the basic regulation applies to import charges and indirect taxes that are actually paid and specifically related to the product exported to the European Union, and not to the indirect effects generally arising from the presence of customs tariffs on inputs in the country of export.

160    It follows from the foregoing, first, that the applicants are not justified in claiming that the Commission did not diligently examine their request for adjustment and, second, that the Commission was not required to set out all the matters of fact and of law on which its decision was based, in particular those relating to arguments which the applicants had not sufficiently substantiated.

161    It follows that the argument alleging infringement of the principle of good administration must be rejected.

162    For the foregoing reasons, the second plea must be rejected as unfounded.

 The third plea in law, alleging a manifest error of assessment relating to the Commission’s refusal to carry out a monthly or quarterly calculation of the dumping margin and alleging a consequent infringement of Article 2(10) of the basic regulation

163    By this plea, the applicants complain, in essence, that the Commission infringed Article 2(10) of the basic regulation by refusing a monthly or quarterly calculation of the dumping margin.

164    The Commission disputes that line of argument.

165    Article 2(11) of the basic regulation provides, inter alia:

‘Subject to the relevant provisions governing fair comparison, the existence of margins of dumping during the investigation period shall normally be established on the basis of a comparison of a weighted average normal value with a weighted average of prices of all export transactions to the [European] Union, or by a comparison of individual normal values and individual export prices to the [European] Union on a transaction-to-transaction basis. …’

166    As regards Article 2(11) of the basic regulation, it must be noted that it is settled case-law that the choice between different methods of calculating the dumping margin requires an appraisal of complex economic situations, and review by the Courts of such an appraisal must therefore be limited to verifying that relevant procedural rules have been complied with, that the facts on which the contested choice is based have been accurately stated, and that there has been no manifest error in the appraisal of those facts or a misuse of powers (see judgment of 13 April 2011, Far Eastern New Century v Council, T‑167/07, not published, EU:T:2011:165, paragraph 64 and the case-law cited).

167    It must be noted that Article 2.4 of the Anti-Dumping Agreement, which deals with fair comparison, contains a provision that is partially similar to that of Article 2(10) of the basic regulation and is worded as follows:

‘A fair comparison shall be made between the export price and the normal value. This comparison shall be made at the same level of trade, normally at the ex-factory level, and in respect of sales made at as nearly as possible the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are also demonstrated to affect price comparability … The authorities shall indicate to the parties in question what information is necessary to ensure a fair comparison and shall not impose an unreasonable burden of proof on those parties.’

168    In the context of Article 2.4 of the Anti-Dumping Agreement, in the WTO Panel Report in the case: United States – Anti-dumping measures on stainless steel plate in coils and stainless steel sheet and strip from Korea (WT/DS 179/R, paragraphs 6.122 and 6.123), the following was stated:

‘The United States argues, in effect, that the “same time” requirement of Article 2.4 implies a preference for shorter rather than longer averaging periods. … In our view, however, the US argument proves too much … We do not preclude that there may be factual circumstances where the use of multiple averaging periods could be appropriate in order to [e]nsure that comparability is not affected by differences in the timing of sales within the averaging periods in the home and export markets. …’

169    It is in the light of those considerations that the applicants’ arguments must be examined.

170    The applicants submit, in essence, by invoking infringement of Article 2(10) of the basic regulation and by referring to the fair comparison, that the Commission’s use of annual averages in the present case, in order to calculate the dumping margin, called into question that fair comparison between the export price and the normal value.

171    It is therefore necessary to ascertain whether, by relying on the annual averages for the calculation of the dumping margin, the Commission made a manifest error of assessment leading to an infringement of Article 2(10) of the basic regulation.

172    In the first place, the applicants claim that, because of the fluctuations in the prices of the two main inputs in the present case, namely scrap and steel slabs, a monthly or quarterly calculation for the determination of the profitability of domestic sales is justified in order to achieve a fair comparison between the normal value and the export price.

173    Furthermore, according to the applicants, the inflationary impact of the calculation of the dumping margin over the entire investigation period is twofold. First, where normal value is based on domestic sales, the resulting normal value is too high because only profitable sales at high prices are taken into account. Second, when normal value is constructed, only the profit of profitable domestic sales is taken into account.

174    In that regard, it should be stated, concerning changes in the cost of production, that certain cost fluctuations are a normal element in the functioning of undertakings. Furthermore, it is not sufficient to demonstrate that there were changes in the cost of production, but it is also necessary to demonstrate to what extent such changes were reflected in prices, since it is the comparability of the prices that is at issue.

175    In their pleadings, the applicants relied on three examples to demonstrate the impact of changes in the cost of production on price comparability. However, none of those examples illustrates the impact of changes in the cost of production on price comparability.

176    In the first example, the applicants submit that, for only one product type, a fluctuation in the cost of production amounts to 14.5%. In that regard, it is sufficient to note that fluctuations in the cost of production of an isolated product do not demonstrate the impact of changes in the cost of production on price comparability, in particular in a case such as the present case where the contested regulation concerns 23 different products. Furthermore, the applicants’ argument that the Commission should have taken into account the fluctuations in the cost of production over two six-month periods, and not one, is also unconvincing, since it also concerns the cost of production of a single product.

177    By way of the second example, the applicants point to the impact of the calculation period on the determination of the profitability of domestic sales. In that regard, it must be noted that the applicants admitted, in the reply, that the information concerning the profitability of domestic sales was submitted solely by way of illustration. They also confirmed that they did not dispute the Commission’s application of Article 2(4) of the basic regulation.

178    In addition, as the Commission argued, it should be noted that the difference between the annual and quarterly calculation of the profitability of sales is insignificant, since profitable transactions amount to 72% and 77% respectively.

179    In their third example, the applicants refer to hypothetical illustrations of the impact of the calculation period on the level of the dumping margin.

180    However, since calculations based on hypothetical values are unrelated to the present case, they cannot demonstrate the actual impact of fluctuations in the cost of production on price comparability.

181    In its pleadings, the Commission analysed the sales prices and established that the quarterly average prices deviate by 19% from the annual average prices on the domestic market and by 15% on the export market. Given such a degree of price fluctuations, the Commission did not make a manifest error of assessment in refusing to depart from the method of calculating the annual dumping margin.

182    In the second place, the applicants argue that, where, as in the present case, the quantities sold on the domestic market and to the European Union are not evenly distributed over the investigation period, only a monthly or quarterly calculation allows a fair comparison to be made between the normal value and the export price. In their view, there may be artificial dumping margins, for example, if exports are proportionally higher when overall prices are low and when domestic sales are proportionally higher when overall prices are high, even though the normal value and the EU export price are at exactly the same level.

183    As regards the impact, on price comparability, of the differences in the allocation, during the investigation period, of the volume of sales in the European Union and sales on the domestic market, it should be noted, as did the Commission, that a certain variation in the volume of sales is inevitable.

184    The applicants claim that sales on the EU market, in relation to total exports, differ by 66% from one quarter to another. They add that, for one quarter, the differences between, on the one hand, sales on the domestic market during that quarter in relation to total sales on the domestic market and, on the other hand, sales in the European Union during the same quarter in relation to total sales in the European Union amounted to 220%. In addition, the applicants complain that the Commission did not set a threshold above which an allocation of sales volume during the investigation period would become exceptionally unequal.

185    In that regard, it should be noted that, in recital 95 of the contested regulation, the Commission stated that sales took place throughout the investigation period. The differences referred to by the applicants concerned only one quarter and were offset by the absence of deviations during the other quarters. In addition, the figure of 220% referred to sales of only 3 products out of 23 different products concerned. Lastly, it is not appropriate to establish an absolute numerical threshold above which an allocation of sales during the investigation period becomes exceptionally unequal. Each case must be assessed by taking into account the circumstances of the case and within the limits of the discretion of the EU institutions in relation to trade defence measures, in accordance with the case-law set out in paragraph 18 above.

186    In the light of the foregoing considerations, it must be concluded that the Commission did not make a manifest error of assessment in refusing to depart from the method of calculating the annual dumping margin because of the unequal distribution of sales during the investigation period.

187    In the third place, the applicants also claim that, since the level of the undercutting margin of between 1.2% and 2% had been considered significant, the factors and fluctuations which they had demonstrated should also have been sufficiently extensive to justify a monthly or quarterly calculation of the dumping margin.

188    In that regard, it should be noted that the importance attached to one of the elements of analysis in the context of trade defence measures, namely the level of undercutting, cannot automatically be applied to the other data analysed in that context, namely fluctuations in the cost of production or the rate of inflation. In other words, the fact that the level of undercutting of between 1.2% and 2% was considered significant was not such as to influence the interpretation of the impact of fluctuations in the cost of production or the rate of inflation on price comparability.

189    In particular, it should be noted, as the Commission submitted, that there are substantial differences between the calculation of undercutting and the calculation of prices for the purposes of determining the dumping margin, including as regards the impact of cost fluctuations on that calculation. First, the rules and components of those calculations differ, since undercutting is based on data gathered during the investigation which are not the result of a methodology established by the basic regulation. Second, their legal basis differs, namely Article 3 of the basic regulation for undercutting and Article 2 of the basic regulation for the dumping margin. Third, the nature of a fluctuation, in particular in cost, is to measure the maximum extent of the variation in relation to an average, whereas undercutting constitutes a difference in the average price. Therefore, the interpretation of what is ‘significant’ also differs in the context of the analysis of the undercutting and the analysis of the components of the dumping margin.

190    In the light of the foregoing considerations, the Commission did not make a manifest error of assessment in refusing to depart from the method of calculating the annual dumping margin, even though it considered that the undercutting of between 1.2% and 2% was significant.

191    Accordingly, the Commission also did not infringe Article 2(10) of the basic regulation when determining the dumping margin.

192    Consequently, the third plea must be rejected as unfounded.

 The fourth plea in law, alleging infringement of Article 2(10)(j) of the basic regulation due to a refusal to make an adjustment for hedging gains and losses

193    The applicants submit that the request for adjustment under Article 2(10)(j) of the basic regulation should have been accepted for hedging gains and losses. They explain that, at the time when the price of an order is agreed in euros, they conclude a hedging contract which locks in the exchange rate between the US dollar and the euro on the date of the order in order to protect themselves against unfavourable fluctuations in the exchange rate between the two currencies on the (later) date of sale.

194    The Commission disputes that line of argument.

195    As a preliminary point, it should be noted that this plea relates specifically to the second part of the first sentence of Article 2(10)(j) of the basic regulation, which provides that, when the price comparison requires a conversion of currencies, that conversion is to be made using the rate of exchange on the date of sale, ‘except that, when a sale of foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange rate in the forward sale shall be used’.

196    It is apparent from recital 98 of the contested regulation that the hedging contracts concluded by the applicants and relied on by them for the purposes of claiming an adjustment under Article 2(10)(j) of the basic regulation related to export sales denominated in euros and that the currency conversion risk stemming from those transactions was, in all those contracts, hedged against the US dollar. Since the Commission compared the export price and the normal value in Turkish lira and converted all transactions denominated in euros into Turkish lira directly, without any intermediate conversion into US dollars, it considered that those hedging contracts, in so far as they concerned the conversion rate between the euro and the US dollar, were irrelevant for the direct conversions of euros into the Turkish lira in question and therefore did not take them into consideration.

197    The applicants maintain that the Commission was wrong to take the view that the conversion rate between the euro and the US dollar agreed in the hedging contracts was irrelevant for the purposes of comparing the normal value and the export price. The applicants also state that Article 2(10)(j) of the basic regulation does not impose a requirement that the hedge in a foreign currency should be carried out with the currency of the exporting country.

198    In the present case, it is common ground between the parties that a ‘hedge’ is a type of financial instrument which enables a company to reduce or eliminate financial risk. A hedging contract makes it possible to lock in, at the time the contract is concluded, the exchange rate to be applied to the monetary transaction that will take place on a future date.

199    In the first place, it should be noted that it is also common ground that the applicants’ export sales were made in euros and therefore had to be converted in order to ensure a fair comparison between those sales and domestic sales. It is apparent from the file that the Commission directly converted the value of those sales into Turkish lira. There was therefore no intermediate conversion into US dollars, as stated in recital 98 of the contested regulation, and contrary to the applicants’ assertion. The hedging contracts relied on by the applicants in support of their claim for adjustment under Article 2(10)(j) of the basic regulation provided for a hedge in US dollars by agreeing a rate of conversion between the euro and the US dollar. The latter conversion therefore had nothing to do with the conversion carried out by the Commission, namely from euros into Turkish lira. Accordingly, those contracts were irrelevant for the purposes of that conversion, as the Commission correctly stated in recital 98 of the contested regulation.

200    Given that the applicants’ other arguments are based on the incorrect premiss that the Commission was required to use the conversion rate provided for in the hedging contracts, those arguments must also be rejected.

201    In the second place, the applicants complain that the Commission set out, for the first time in the contested regulation, therefore at a time when the applicants were no longer in a position to submit observations, the argument in recital 101 of that regulation relating to the lack of evidence that the hedging operations were not adjusted after the sale.

202    In addition, according to the applicants, since the legality of an EU measure must be assessed on the basis of the facts and law as they stood when the measure was adopted, account should not be taken of the Commission’s arguments, which are based in particular on Annex S 1-18 and which conclude that there were allegedly speculative actions, since those arguments were raised only during the present court proceedings.

203    The Commission disputes that line of argument.

204    It follows from paragraph 200 above that the hedging contracts relied on by the applicants in support of their claim for an adjustment under Article 2(10)(j) of the basic regulation were irrelevant, as the Commission was fully entitled to state in recital 98 of the contested regulation.

205    That conclusion is sufficient, in itself, to justify the rejection of that claim.

206    Consequently, the applicants’ complaints directed against recital 101 of the contested regulation and against the Commission’s arguments concerning speculative actions, which contain grounds included purely for the sake of completeness in order to justify that rejection, are, in any event, ineffective.

207    In the light of the foregoing considerations, the fourth plea must be rejected.

208    For all of the above reasons, the action must be dismissed in its entirety.

 Costs

209    Under Article 134(1) of the Rules of Procedure of the General Court, 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 applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

On those grounds,

THE GENERAL COURT (Eighth Chamber, Extended Composition)

hereby:

1.      Dismisses the action;

2.      Orders Çolakoğlu Metalurji AŞ and Çolakoğlu Dış Ticaret AŞ to pay the costs.

Papasavvas Kornezov Petrlík

Kecsmár Kingston

Delivered in open court in Luxembourg on 8 May 2024.

V. Di Bucci S. Papasavvas

Registrar President

Table of contents

Background to the dispute

Forms of order sought

Law

The first plea in law, alleging infringement of Article 2(10)(i) of the basic regulation

The third part of the first plea, relating to a manifest error of assessment

– The taking into account of the agreement between the applicants providing for the payment of commission

– The taking into account of Çolakoğlu Metalurji’s direct export sales

– The taking into account of Çolakoğlu Metalurji’s direct domestic sales

– The other factors taken into account by the Commission

The second part of the first plea, concerning the absence of a profit margin

The first part of the first plea, relating to an adjustment allegedly higher than the commission actually paid

The second plea in law, alleging infringement of Article 2(10)(b) of the basic regulation

The third plea in law, alleging a manifest error of assessment relating to the Commission’s refusal to carry out a monthly or quarterly calculation of the dumping margin and alleging a consequent infringement of Article 2(10) of the basic regulation

The fourth plea in law, alleging infringement of Article 2(10)(j) of the basic regulation due to a refusal to make an adjustment for hedging gains and losses

Costs

*      Language of the case: English.