JUDGMENT OF THE GENERAL COURT (Ninth Chamber, Extended Composition)
21 February 2024 (*)
(Dumping – Imports of certain polyvinyl alcohols originating in China – Definitive anti-dumping duty – Implementing Regulation (EU) 2020/1336 – Calculation of the normal value – Significant distortions in the exporting country – Article 2(6a) of Regulation (EU) 2016/1036 – WTO law – Principle of consistent interpretation – Choice of appropriate representative country – Readily available data – Non-cooperation – Definition of ‘necessary information’ – Article 18 of Regulation 2016/1036 – Price undercutting – Market segments – Product control number method – Article 3(2) and (3) of Regulation 2016/1036 – Rights of the defence – Confidential treatment – Articles 19 and 20 of Regulation 2016/1036)
In Case T‑763/20,
Inner Mongolia Shuangxin Environment-Friendly Material Co. Ltd, established in Ordos (China), represented by J. Cornelis, F. Graafsma and E. Vermulst, lawyers,
applicant,
supported by
Wegochem Europe BV, established in Amsterdam (Netherlands), represented by R. Antonini, E. Monard and B. Maniatis, lawyers,
intervener,
v
European Commission, represented by G. Luengo, acting as Agent,
defendant,
supported by
European Parliament, represented by A. Neergaard, D. Moore and A. Pospíšilová Padowska, acting as Agents,
by
Council of the European Union, represented by H. Marcos Fraile and B. Driessen, acting as Agents, and by N. Tuominen, lawyer,
by
Kuraray Europe GmbH, established in Hattersheim am Main (Germany), represented by R. MacLean and D. Sevilla Pascual, lawyers,
and by
Sekisui Specialty Chemicals Europe SL, established in La Canonja (Spain), represented by A. Borsos and J. Jousma, lawyers,
interveners,
THE GENERAL COURT (Ninth Chamber, Extended Composition),
composed of L. Truchot (Rapporteur), President, H. Kanninen, L. Madise, R. Frendo and T. Perišin, Judges,
Registrar: I. Kurme, Administrator,
having regard to the written part of the procedure,
further to the hearing on 14 and 15 December 2022,
gives the following
Judgment (1)
1 By its action under Article 263 TFEU, the applicant, Inner Mongolia Shuangxin Environment-Friendly Material Co. Ltd, seeks the annulment of Commission Implementing Regulation (EU) 2020/1336 of 25 September 2020 imposing definitive anti-dumping duties on imports of certain polyvinyl alcohols originating in the People’s Republic of China (OJ 2020 L 315, p. 1; ‘the contested regulation’), in so far as it concerns the applicant.
…
Forms of order sought
13 The applicant claims that the Court should:
– annul the contested regulation in so far as it concerns the applicant;
– order the Commission to pay the costs.
14 Wegochem Europe BV (‘Wegochem’), intervening in support of the applicant, claims that the Court should:
– annul the contested regulation in so far as it concerns the applicant;
– order the Commission to pay the costs, including those incurred by Wegochem.
15 The Commission, supported by the European Parliament, the Council of the European Union, Kuraray and Sekisui Specialty Chemicals Europe SL (‘Sekisui’), contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
Law
…
The Commission’s request that the second to fifth pleas in law be rejected as ineffective
51 The Commission requests that the second to fifth pleas be rejected as ineffective because they relate to the dumping margin, set at 115.6% in the contested regulation, whereas the anti-dumping duty applicable to the applicant corresponds to the injury margin, set at 72.9% in the contested regulation. It asserts that the applicant, which bears the burden of proof, has not shown that, if the pleas in question were well founded, the difference between the dumping margin and the injury margin would be reduced below zero.
52 The Commission also submits that the applicant is required to demonstrate the existence of a vested and current personal interest which cannot concern a future and hypothetical situation.
53 In support of its contention that the pleas in question are effective, first, the applicant relies on the case-law relating to infringement of the rights of the defence, according to which an applicant cannot be required to show that the Commission’s decision would have been different in content but simply that such a possibility cannot be totally ruled out (judgments of 1 October 2009, Foshan Shunde Yongjian Housewares & Hardware v Council, C‑141/08 P, EU:C:2009:598, paragraph 94, and of 11 July 2013, Hangzhou Duralamp Electronics v Council, T‑459/07, not published, EU:T:2013:369, paragraphs 110 and 111). According to the applicant, that case-law is applicable to the present case as it finds itself in the predicament of being unable to demonstrate the numerical counterfactual. Although the difference between the dumping margin and the injury margin is significant, it cannot be ruled out that, following correction of the errors referred to in the pleas in question, the dumping margin could be reduced to a level below the injury margin.
54 Secondly, the applicant claims that it has an interest in having the Commission correctly calculate the dumping margin for possible reviews of the measures imposed by the contested regulation, for other possible anti-dumping proceedings against it or for possible applications made by it for refunds of the anti-dumping duties paid. Those scenarios are not future and hypothetical situations.
55 Thirdly, the applicant states that the anti-dumping duty applicable to another Chinese exporting producer, which was based not on that exporting producer’s injury margin but on its dumping margin, was calculated using data relating to the normal value of the products manufactured by the applicant. The applicant maintains that it should not bear the burden of being the indirect root cause for the dumping margin of other exporting producers to be overstated.
56 The Court recalls that the second subparagraph of Article 9(4) of the basic regulation is worded as follows:
‘The amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the Union industry. …’
57 According to the case-law, that provision lays down the ‘lesser duty’ rule (‘the lesser duty rule’), pursuant to which the injury margin should be used to determine the rate of anti-dumping duty where the dumping margin is higher than the injury margin, and vice versa (see, to that effect, judgments of 4 March 2010, Foshan City Nanhai Golden Step Industrial v Council, T‑410/06, EU:T:2010:70, paragraph 94 and the case-law cited, and of 18 October 2016, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑351/13, not published, EU:T:2016:616, paragraph 49 and the case-law cited).
58 The objective of the lesser duty rule is, inter alia, to prevent the anti-dumping duty imposed from going beyond what is necessary to remove the injury caused by the dumped imports. Thus, the adoption of anti-dumping duties is a protective and preventive measure against unfair competition resulting from dumping practices, not a penalty or a measure giving a competitive advantage to the Union industry (see, to that effect, judgment of 18 October 2016, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑351/13, not published, EU:T:2016:616, paragraph 50 and the case-law cited).
59 In the present case, in recital 658 of the contested regulation, the Commission ‘compared the injury margins and the dumping margins’ and stated that ‘the amount of the [anti-dumping] duties should be set at the level of the lower of the dumping and the injury margins’.
60 Recital 659 of that regulation contains the following table:
Company | Dumping margin | Injury margin | Definitive anti-dumping duty |
Shuangxin Group [T‑763/20] | 115.6% | 72.9% | 72.9% |
Sinopec Group [T‑762/20] | 17.3% | 57.6% | 17.3% |
Wan Wei Group [T‑764/20] | 193.2% | 55.7% | 55.7% |
Other cooperating companies | 80.4% | 57.9% | 57.9% |
All other companies | 193.2% | 72.9% | 72.9% |
61 While the Commission argues that the pleas in question are ineffective in so far as the applicant has failed to prove that, if those pleas were well founded, the dumping margin would drop below the injury margin with the result that the anti-dumping duty would have to be reduced, the applicant counters not only by invoking the burden of proof but also by arguing that it has an interest in raising those pleas, leading the Commission to claim that that interest was not made out in the present case.
62 According to settled case-law, in an action for annulment, a plea in law which, even if it were well founded, would be incapable of bringing about the annulment which the applicant seeks, is considered ineffective (order of 26 February 2013, Castiglioni v Commission, T‑591/10, not published, EU:T:2013:94, paragraph 45, and judgment of 15 January 2015, France v Commission, T‑1/12, EU:T:2015:17, paragraph 73; see also, to that effect, judgment of 21 September 2000, EFMA v Council, C‑46/98 P, EU:C:2000:474, paragraph 38).
63 Furthermore, a plea for annulment is inadmissible on the ground of lack of interest in bringing proceedings when, even if that plea were well founded, annulment of the contested act on the basis of that plea would not give the applicant satisfaction (see order of 14 July 2020, Shindler and Others v Commission, T‑627/19, EU:T:2020:335, paragraph 47 and the case-law cited).
64 Those are two separate issues (see, to that effect, judgments of 21 September 2000, EFMA v Council, C‑46/98 P, EU:C:2000:474, paragraph 38, and of 4 May 2022, CRIA and CCCMC v Commission, T‑30/19, EU:T:2022:266, paragraph 92 (not published)).
65 The view must be taken that where, in an action for annulment of a regulation imposing anti-dumping duties in which the EU institutions have applied the lesser duty rule, the applicant raises pleas or parts of pleas challenging the highest margin between the dumping margin and the injury margin, the question which arises is whether those pleas or parts are effective (see, to that effect, judgments of 4 March 2010, Foshan City Nanhai Golden Step Industrial v Council, T‑410/06, EU:T:2010:70, paragraphs 94 to 98, and of 21 March 2012, Fiskeri og Havbruksnæringens Landsforening and Others v Council, T‑115/06, not published, EU:T:2012:136, paragraphs 45 to 47).
66 Accordingly, it must be held that the parties’ arguments concerning whether the applicant has an interest in raising the pleas in question are irrelevant.
67 As to whether the pleas in question are effective, in response to written questions put by the Court, the Commission maintained its position that the applicant bore the burden of demonstrating that its pleas could affect the outcome of the investigation, but it also considered the impact that each of the pleas in question, if well founded, might have on the dumping margin. In particular, it contends that the validity of the fifth plea is a necessary, albeit not sufficient, condition for the infringements referred to in the pleas in question to bring the dumping margin below the injury margin. According to the Commission, if the fifth plea were well founded, it would be obliged to recalculate the dumping margin, which would then have to be reduced by 41.1 percentage points to 74.5%. That margin would still be higher than the injury margin of 72.9%, but if other pleas in question, or parts thereof, were also well founded, the dumping margin could drop below the injury margin. Conversely, the Commission states that, if the fifth plea were rejected, the dumping margin to be recalculated would remain higher than the injury margin, even if the other pleas in question were well founded. Those pleas relate to alleged errors the removal of which could, at most, reduce the dumping margin to a level which would remain above 90%. It would thus remain far above the injury margin.
68 Although the applicant accepts that the validity of the fifth plea could lead to a reduction in the dumping margin of 41.1 percentage points, it disputes the Commission’s calculations from which the latter concludes that that validity is a necessary precondition for the second, third and fourth pleas to be effective, in that, if they were upheld, the dumping margin would fall below the injury margin. According to the applicant, if all the pleas in question, except the fifth plea, were well founded, the dumping margin would be reduced to 71.1% and would thus be lower than the injury margin, which is 72.9%. At the hearing, in response to a question from the Court, the applicant confirmed that the figure of 71.1% presupposed that the second plea was well founded, leading to a reduction in the dumping margin of 8.6 percentage points. It also confirmed that, if that plea were rejected, that margin would be 79.7% and therefore higher than the injury margin.
69 Accordingly, the applicant accepts that, if the second and fifth pleas were rejected on the merits, the other pleas in question could not lead to a reduction in the dumping margin such as to bring it below the injury margin. The view must therefore be taken that, in that situation, the other pleas in question would necessarily be ineffective.
70 In those circumstances, the merits of the second and fifth pleas must be examined before ruling on whether the third and fourth pleas are effective.
Second plea in law, alleging infringement of Article 2(6a)(a) of the basic regulation as regards the choice of appropriate representative country
71 The applicant submits that the Commission infringed Article 2(6a)(a) of the basic regulation in so far as it selected Türkiye as the appropriate representative country, on the basis of data relating to Ilkalem Ticaret Ve Sanayi AS (‘Ilkalem’), when it should have chosen Mexico, on the basis of data relating to Solutia Tlaxcala SA de CV (‘Solutia Tlaxcala’) or Wyn De Mexico Productos Quimicos SA de CV (‘Wyn’).
72 In the first place, the applicant submits that the Commission misinterpreted the requirement laid down in Article 2(6a)(a) of the basic regulation, according to which data relating to a company established in the envisaged country must be ‘readily available’ in order to be used.
73 In the second place, the applicant alleges breach of the duty of care which the Commission is required to comply with when choosing the appropriate representative country.
74 In the third place, the applicant argues that Mexico was the most appropriate representative country because it has a higher level of social and environmental protection than Türkiye.
75 The Commission disputes the applicant’s arguments.
76 Having reproduced the wording of Article 2(6a) of the basic regulation in paragraph 8 above, it is necessary at this juncture to summarise the main steps taken by the Commission in the present case when applying Article 2(6a)(a) of that regulation, as transpires from the contested regulation.
77 According to recital 175 of the contested regulation, the choice of representative country was based ‘on the following criteria:
– A level of economic development similar to [China];
– Production of the product under investigation in that country;
– Availability of relevant public data in that country;
– Where there is more than one possible representative country, preference was given, where appropriate, to the country with an adequate level of social and environmental protection’.
78 It follows from recitals 177 to 184, 198, 199 and 203 of the contested regulation that, after considering five countries as candidates for appropriate representative country, the Commission excluded three of them, leaving a choice between the two remaining countries, namely Mexico and Türkiye.
79 As regards Mexico, the Commission examined the availability of the financial data of Solutia Tlaxcala and Wyn (recitals 38, 200 to 202, 212, 229 and 230 of the contested regulation).
80 Concerning Solutia Tlaxcala, the Commission was confronted with the fact that its parent company, Solutia Europe SPRL/BVBA (‘Solutia Europe’), a PVA user established in Belgium, had provided it with the necessary financial data in confidential form only, which could not be accessed by the public, and that those data were not available in the Orbis database.
81 The Commission also stated that, although some exporting producers had claimed that the data relating to Solutia Tlaxcala were available in the Dun&Bradstreet database, they had merely pointed to that information as ‘prima facie evidence’ of the availability of such data, without producing the data in question. The Commission therefore concluded that it could not use those data in the proceeding.
82 Concerning Wyn, the Commission stated that the public financial data of that company were available only for the first six months of 2018 and that that period did not coincide with the period covered by its investigation and could not be regarded as representative of a whole year due to seasonal fluctuations. The Commission also found that Wyn had not been profitable in 2017. As a result, the Commission concluded that Mexico was not an appropriate representative country for the purposes of its investigation.
83 Concerning Türkiye, the Commission took the view that it could rely on the data relating to Ilkalem, which were available in the Orbis database, in particular for 2018, and which showed that although Ilkalem had made a loss that year, due to high financial expenses, an examination of the data relating to previous years made it possible to classify those expenses as extraordinary. Thus, the Commission concluded that the data relating to 2018 could be used, subject to an adjustment to take account of the extraordinary nature of the financial expenses borne that year (recitals 205, 206 and 213 to 215 of the contested regulation).
84 Furthermore, in recitals 221 and 226 of the contested regulation, the Commission stated that since it had established that Türkiye was the only available appropriate representative country, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of the first indent of Article 2(6a)(a) of the basic regulation.
85 The principles to be applied in interpreting a provision of EU law are recalled in paragraph 28 above.
86 From a literal perspective, the applicant maintains that the Commission’s interpretation of ‘readily available data’ is incompatible with the wording of Article 2(6a)(a) of the basic regulation, since the adverbs ‘readily’ and ‘publicly’ are not synonyms.
87 It should be pointed out that, although the contested regulation is not wholly unambiguous in that regard, in that it uses the expressions ‘public … data’ and ‘publicly available … data’ on several occasions (see, inter alia, recitals 175, 194, 202, 212 and 217 of that regulation), the Commission made the following statement in recital 228 of that regulation:
‘228 … According to Article 2(6a) of the basic Regulation, the data does not have to be “publicly available” but “readily available”. The Commission noted that “publicly available” means available to the public at large whereas “readily available” means available to everybody, provided that certain conditions, like a payment of a fee, have been fulfilled. Important to mention that all the information used to construct the normal value was made available on the open file. That means that even when the information is only available upon payment, all interested parties had access to it.’
88 In the light of that interpretation of ‘readily available’, the applicant is wrong to claim that the Commission confused the concepts of ‘publicly available’ and ‘readily available’. Indeed, the Commission drew a distinction between those two concepts, which it did not therefore consider to be equivalent.
89 From a contextual perspective, the applicant states that where the basic regulation provides that something is meant to be made public, it explicitly states that to be the case in the relevant provisions. Furthermore, it is apparent from WTO law that procedural obligations of confidentiality do not preclude, in substantive terms, a competent authority from using confidential information.
90 First, since it has already been pointed out that the Commission did not confuse the two concepts referred to in paragraph 88 above, it is irrelevant that, in some provisions of the basic regulation, the legislature specified that certain information was to be made available to the public.
91 Secondly, the Commission was entitled to contend that Article 2(6a)(a) of the basic regulation must be interpreted in the light of the requirements arising from the provisions of that regulation concerning confidentiality and those governing disclosure, in order to protect the rights of the defence.
92 From a teleological perspective, the applicant submits that Article 2(6a)(a) of the basic regulation must contribute to the objective of that regulation, which is to prevent dumping practices on the EU market and to ensure fair trade and competition in that market. Thus, the Commission’s choice of appropriate representative country cannot depend on whether a producer agrees to its data being disclosed to the public.
93 Although the basic regulation is intended to protect against dumped imports by preventing, inter alia, injury being caused to an industry established in the European Union (see, by analogy, order of 11 October 2011, DBV v Commission, T‑297/10, not published, EU:T:2011:583, paragraph 37; see also, to that effect and by analogy, judgment of 28 February 2008, Carboni e derivati, C‑263/06, EU:C:2008:128, paragraph 39), the legislature nevertheless decided to pursue that objective while taking account of the requirements relating to the confidentiality of certain information and the protection of the rights of the defence.
94 It is worth recalling the wording of the relevant provisions of the basic regulation in that regard.
95 Article 19 of the basic regulation provides as follows:
‘1. Any information which is by nature confidential (for example, because its disclosure would be of significant competitive advantage to a competitor or would have a significantly adverse effect upon a person supplying the information or upon a person from whom the person supplying the information has acquired the information) or which is provided on a confidential basis by parties to an investigation shall, if good cause is shown, be treated as such by the authorities.
2. Interested parties providing confidential information shall be required to provide non-confidential summaries thereof. Those summaries shall be in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence. In exceptional circumstances, such parties may indicate that such information is not capable of being summarised. In such exceptional circumstances, a statement of the reasons why such summarisation is not possible shall be provided.
3. If it is considered that a request for confidentiality is not warranted and if the supplier of the information is either unwilling to make the information available or to authorise its disclosure in generalised or summary form, such information may be disregarded unless it can be satisfactorily demonstrated from appropriate sources that the information is correct. Requests for confidentiality shall not be arbitrarily rejected.
4. This Article shall not preclude the disclosure of general information by the Union authorities, and, in particular, of the reasons on which decisions taken pursuant to this Regulation are based, or disclosure of the evidence relied on by the Union authorities in so far as is necessary to explain those reasons in court proceedings. Such disclosure shall take into account the legitimate interests of the parties concerned that their business secrets not be divulged.
5. The Commission and Member States, including the officials of either, shall not reveal any information received pursuant to this Regulation for which confidential treatment has been requested by its supplier, without specific permission from that supplier.
…’
96 Article 20 of the basic regulation provides as follows:
‘1. The complainants, importers and exporters and their representative associations, and representatives of the exporting country, may request disclosure of the details underlying the essential facts and considerations on the basis of which provisional measures have been imposed …
2. The parties mentioned in paragraph 1 may request final disclosure of the essential facts and considerations on the basis of which it is intended to recommend the imposition of definitive measures, or the termination of an investigation or proceedings without the imposition of measures, particular attention being paid to the disclosure of any facts or considerations which are different from those used for any provisional measures.
…’
97 Article 6(7) of the basic regulation provides as follows:
‘7. The complainants, importers and exporters … may, upon written request, inspect all information made available by any party to an investigation, as distinct from internal documents prepared by the authorities of the Union or its Member States, which is relevant to the presentation of their cases and not confidential within the meaning of Article 19, and is used in the investigation.
…’
98 By those provisions, the basic regulation is pursuing two objectives: on the one hand, to allow the interested parties effectively to defend their interests and, on the other hand, to preserve the confidentiality of the information collected in the course of the investigation (see, by analogy, judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 96; see also, to that effect and by analogy, judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 142 and the case-law cited).
99 As regards the first objective referred to in paragraph 98 above, it should be recalled that respect for the rights of the defence is, in all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of EU law which must be guaranteed even in the absence of any rules governing the proceedings in question. Respect for that principle is of crucial importance in anti-dumping investigations (see judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 139 and the case-law cited).
100 In accordance with that principle, the undertakings concerned should have been placed in a position during the administrative procedure in which they could effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegation concerning the existence of dumping and the resultant injury (see judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 140 and the case-law cited).
101 As regards the second objective referred to in paragraph 98 above, it must be recalled that the protection of business secrets is a general principle of EU law. The maintenance of fair competition is an important public interest, the safeguarding of which can justify a refusal to disclose information which reveals business secrets (see, to that effect, judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 165 and the case-law cited).
102 In order to reconcile the two objectives in question, in performing their duty to provide information, the EU institutions must act with all due diligence by seeking to provide the undertakings concerned, as far as is compatible with the obligation not to disclose business secrets, with information relevant to the defence of their interests, choosing, if necessary on their own initiative, the appropriate means of providing such information (see, to that effect, judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 141).
103 The need to reconcile those objectives also follows from the fact that, according to the case-law, Article 19 of the basic regulation is intended to protect not only the business secrets but also the defence rights of the other parties to the anti-dumping proceeding (see judgment of 15 October 2020, Zhejiang Jiuli Hi-Tech Metals v Commission, T‑307/18, not published, EU:T:2020:487, paragraph 82 and the case-law cited).
104 In the light of those provisions and principles, it must be held that the Commission, when seeking to obtain, under Article 2(6a)(a) of the basic regulation, data that are ‘readily available’, is entitled to refuse to use for that purpose data which are considered by the party providing them to be confidential and in respect of which it is unable to secure a non-confidential summary as a basis enabling the other interested parties in the investigation to exercise their rights of the defence.
105 That conclusion is not called into question by the Report of the Appellate Body, Thailand – Anti-dumping duties on angles, shapes and sections of iron or non-alloy steel and H-beams from Poland (WT/DS 122/AB/R), adopted by the DSB on 5 April 2001 (‘the angles and H-beams report’), relied on by the applicant.
106 Paragraph 111 of the angles and H-beams report states:
‘… the requirement in Article 3.1 [of the anti-dumping agreement] that an injury determination be based on “positive” evidence and involve an “objective” examination of the required elements of injury does not imply that the determination must be based only on reasoning or facts that were disclosed to, or discernible by, the parties to an anti-dumping investigation. Article 3.1, on the contrary, permits a[ competent] authority making an injury determination to base its determination on all relevant reasoning and facts before it.’
107 However, first of all, it must be noted that Article 3.1 of the anti-dumping agreement does not contain the condition – which, by contrast, appears in Article 2(6a)(a) of the basic regulation – that the data used by the Commission must be ‘readily available’.
108 Next, it should be borne in mind that, in paragraph 107 of the angles and H-beams report, the Appellate Body makes clear that ‘an anti-dumping investigation … involves the collection and assessment of both confidential and non-confidential information’ and that ‘an injury determination … must be based on the totality of that evidence’. It concludes that there is ‘nothing in Article 3.1 [of the anti-dumping agreement] which limits a[ competent] authority to base an injury determination only upon non-confidential information’. Therefore, while, in accordance with the guidance provided by that report, the competent authority may also use confidential information in addition to non-confidential information, it cannot rely exclusively on confidential information. That would have been the case if the Commission had used the data which Solutia Europe had provided to it regarding Solutia Tlaxcala.
109 Lastly, it must be pointed out that, in paragraph 109 of the angles and H-beams report, although the Appellate Body recalls that Article 6 of the anti-dumping agreement ‘establishes a framework of procedural and due process obligations which, amongst other matters, requires [competent] authorities to disclose certain evidence, during the investigation, to the interested parties’ and finds that ‘there is no justification for reading these obligations … into the substantive provisions of Article 3.1.’ of that agreement, it makes clear that, in so doing, it does ‘not … imply that the injury determination … in this case necessarily met the requirements of Article 6’. Indeed, according to the Appellate Body, as the Panel, whose report was challenged before it, ‘found that [the Republic of] Poland’s claim under Article 6 did not meet the requirements of Article 6.2 of the [Understanding on rules and procedures governing the settlement of disputes, set out in Annex 2 to the Agreement establishing the WTO], the issue was not considered by the Panel’.
110 Accordingly, the Appellate Body wished to avoid the situation whereby a party, which has failed to raise with the requisite clarity in its request for the establishment of a panel the question of compliance by the competent authority with the procedural obligations laid down in Article 6 of the anti-dumping agreement, relating to confidentiality and the rights of the defence, could cure that failure by maintaining that the assessment of infringement of the substantive provisions which it has properly brought before that panel includes an examination of compliance with those procedural obligations.
111 It follows that the angles and H-beams report cannot be construed as enshrining a general principle that a competent authority may in all circumstances use confidential information.
112 In the present case, it is common ground that Solutia Europe objected to the disclosure of the data concerning Solutia Tlaxcala and that it did not provide the Commission with a non-confidential summary of those data. Thus, under Article 19(3) of the basic regulation, the Commission was entitled to disregard those data, unless they could be obtained from other sources.
113 In that regard, the applicant states that the data relating to Solutia Tlaxcala are available in the Dun&Bradstreet subscription database. It claims that the Commission’s decision to subscribe only to the Orbis database is irrelevant.
114 It should be pointed out that, in its comments on final disclosure, the applicant drew the Commission’s attention to the fact that the Dun&Bradstreet database contained readily available data concerning Solutia Tlaxcala and inserted a hyperlink in the relevant passage of those comments, while stating that access to those data was subject to payment of a fee.
115 It is apparent from the replies of the main parties to written questions put by the Court that the hyperlink referred to by the applicant did not give access to the data concerning Solutia Tlaxcala contained in the Dun&Bradstreet database.
116 In addition, in its comments on final disclosure, the applicant merely stated that there was ‘prima facie’ evidence that the data concerning Solutia Tlaxcala in the Dun&Bradstreet database could be obtained.
117 It follows that the applicant itself had not accessed those data, with the result that it was unaware of the level of detail of the data and the period they covered.
118 The Commission was therefore right, in recital 230 of the contested regulation, to refuse to use those data.
119 As regards the applicant’s arguments alleging breach of the duty of care, where it relies on the principles deriving from the case-law on Article 2(7)(a) of the basic regulation, in the version prior to Regulation 2017/2321, which it claims are applicable by analogy, it is appropriate to recall the wording of that provision, which reads as follows:
‘In the case of imports from non-market-economy countries …, the normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including the Union, or, where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Union for the like product, duly adjusted if necessary to include a reasonable profit margin.
An appropriate market-economy third country shall be selected in a not unreasonable manner, due account being taken of any reliable information made available at the time of selection …’
120 According to the case-law on Article 2(7)(a) of the basic regulation, in the version prior to Regulation 2017/2321, the choice of ‘analogue country’ under that provision falls within the broad discretion enjoyed by the EU institutions in the sphere of the common commercial policy, by reason of the complexity of the economic and political situations which they have to examine (see, by analogy, judgment of 29 July 2019, Shanxi Taigang Stainless Steel v Commission, C‑436/18 P, EU:C:2019:643, paragraph 30 and the case-law cited). The exercise of the EU institutions’ discretion in choosing that country is subject to review by the Court. It is for the Courts of the European Union to verify whether the relevant procedural rules have been complied with, whether the facts on which the choice is based have been accurately stated and whether there has been a manifest error of appraisal or a misuse of powers. In particular, it is necessary to verify that those institutions have not neglected to take account of essential factors for the purpose of establishing the appropriate nature of the country chosen and that the information contained in the file in the case was considered with all the care required for it to be held that the normal value of the product concerned was determined in an appropriate and not unreasonable manner (see, to that effect and by analogy, judgments of 29 May 1997, Rotexchemie, C‑26/96, EU:C:1997:261, paragraphs 10 to 12; of 10 September 2015, Fliesen-Zentrum Deutschland, C‑687/13, EU:C:2015:573, paragraph 51; and of 23 April 2018, Shanxi Taigang Stainless Steel v Commission, T‑675/15, not published, EU:T:2018:209, paragraph 31 and the case-law cited).
121 Notwithstanding the differences between Article 2(6a)(a) of the basic regulation and the former Article 2(7)(a) thereof, those principles are applicable by analogy in the present case, as the Commission contends.
122 In this case, first, the applicant observes that the Commission accepted the data relating to Ilkalem despite the fact that, during the investigation period, that company was loss-making because of extraordinary financial expenses and that, therefore, it was necessary to make adjustments on the basis of figures relating to the previous three financial years. The Commission’s acceptance of those data is at odds with the fact that it rejected the data relating to Wyn on the ground that they covered a period which did not coincide with the investigation period. The Commission was therefore wrong to choose Ilkalem’s data over those of Wyn and Solutia Tlaxcala, which were not only ‘readily available’, but also full and complete.
123 It should be noted that the applicant does not dispute the veracity of the considerations set out in the contested regulation, pursuant to which the Commission determined that it could not rely on the data relating to Wyn because they did not cover the investigation period and showed that Wyn did not make a profit in 2017 (see paragraph 82 above). The applicant simply maintains that that determination is at variance with the fact that the Commission accepted the data concerning Ilkalem. However, it must be stated that those data, unlike the data relating to Wyn, were available for the whole of 2018, with the result that they covered at least part of the investigation period. In addition, those data also showed that Ilkalem had made profits during the previous three years and that the absence of profit in 2018 was due to particularly high financial expenses, which the Commission classified as extraordinary. The applicant does not deny that that classification was justified, nor has it demonstrated that the adjustments made by the Commission to Ilkalem’s data in respect of 2018 in order to offset the effect of those extraordinary expenses were inappropriate.
124 In the light of the broad discretion enjoyed by the Commission here as regards the choice of appropriate representative country (see paragraphs 120 and 121 above), the applicant must, if its plea is to be upheld, adduce sufficient evidence to render implausible the assessments of the facts in the contested regulation (see, to that effect and by analogy, judgment of 3 December 2019, Yieh United Steel v Commission, T‑607/15, EU:T:2019:831, paragraph 110 and the case-law cited).
125 The applicant’s present argument must therefore be rejected.
126 Secondly, the applicant submits that the Commission should, at the very least, have distinguished between the data concerning surrogate values for factors of production (‘the surrogate values’) and the data for SG&A costs and for profits. Ilkalem’s data are useful only for SG&A costs and for profits, while the surrogate values could be obtained from public sources, including the Global Trade Atlas database, which contains those values for Mexican raw materials. The applicant states that the Commission has already used data from different sources in an anti-dumping investigation, as have the authorities of the United States of America.
127 It should be noted that the applicant merely asserts that the Global Trade Atlas database contains surrogate values for Mexico, but does not explain how those values would be more relevant than the values for Türkiye. A fortiori, it does not demonstrate that the use of Turkish surrogate values was manifestly wrong.
128 In addition, the applicant does not explain why it would be manifestly wrong to use the data relating to one and the same third country both for the surrogate values and for SG&A costs and for profits.
129 The applicant relies on the Commission’s practice, which it claims shows that the Commission has already used data from different sources, and on the practice of the authorities of the United States of America, confirmed by the competent courts.
130 However, according to the case-law, the lawfulness of a regulation imposing anti-dumping duties must be assessed in the light of legal rules and, in particular, the provisions of the basic regulation, not on the basis of the EU institutions’ alleged previous practice in taking decisions (see, to that effect and by analogy, judgments of 10 February 2021, RFA International v Commission, C‑56/19 P, EU:C:2021:102, paragraph 79; of 4 October 2006, Moser Baer India v Council, T‑300/03, EU:T:2006:289, paragraph 45; and of 18 October 2016, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑351/13, not published, EU:T:2016:616, paragraph 107).
131 Moreover, as regards the practice of the authorities of the United States of America, it should be pointed out that that practice is concerned only with the application of the law of the United States of America, the provisions of which are not necessarily the same as those of the basic regulation, as interpreted by the Court of Justice and the General Court. Therefore, even if that practice concerned a factual and legal situation comparable to the one at issue here, which the applicant has not demonstrated, it cannot bind the General Court.
132 Consequently, the applicant’s present argument must be rejected.
133 Lastly, as regards the applicant’s argument that Mexico has a higher level of social and environmental protection than Türkiye, it should be noted that, according to the wording of the first indent of Article 2(6a)(a) of the basic regulation, the question of the level of those protections arises only ‘where there is more than one [appropriate representative] country’.
134 Since, in the present case, the Commission was justified in finding that there were relevant data on SG&A costs and on profits only for Türkiye, and not for Mexico, it was entitled to conclude, in recitals 221 and 226 of the contested regulation, that Türkiye was the only appropriate representative country and that, consequently, the question of the level of social and environmental protection did not arise.
135 In the light of the foregoing, the second plea in law must be rejected as unfounded.
Fifth plea in law, alleging infringement of Article 18 of the basic regulation
136 The applicant submits that the Commission was wrong to calculate the normal value of the products manufactured by it on the basis of the facts available within the meaning of Article 18 as regards self-produced factors of production, such as steam and electricity, despite the fact that the applicant had cooperated to the best of its ability by replying to the Commission’s questionnaire.
137 According to the applicant, the Commission, which criticises it for failing to allocate to the product under investigation a share of the costs relating to the inputs needed for the self-produced factors of production it uses to produce PVA, did not take account of the fact that such allocation is impossible due to the characteristics of the applicant’s PVA production process.
138 Moreover, the applicant claims that since it cooperated with the Commission to the best of its ability, the Commission was required, under Article 18(3) of the basic regulation, to take into account the information which the applicant had provided to it and it was not entitled to use the facts available within the meaning of that article.
139 The Commission, supported by Sekisui, disputes the applicant’s arguments.
140 It should be recalled that the terms of the relevant provisions of Article 18 of the basic regulation, concerning ‘non-cooperation’, are as follows:
‘1. In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within the time limits provided for in this Regulation, or significantly impedes the investigation, provisional or final findings, affirmative or negative, may be made on the basis of the facts available.
…
3. Where the information submitted by an interested party is not ideal in all respects, it shall nevertheless not be disregarded, provided that any deficiencies are not such as to cause undue difficulty in arriving at a reasonably accurate finding and that the information is appropriately submitted in good time and is verifiable, and that the party has acted to the best of its ability.
…’
141 In order to understand the rationale for Article 18 of the basic regulation, it must be recalled that it is for the Commission, as the investigating authority, to establish that the product concerned has been dumped, that there has been injury and that there is a causal link between the dumped imports and the proven injury. In so far as there is no provision in the basic regulation which confers on the Commission any power to compel the interested parties to participate in the investigation or to provide information, the Commission is reliant on the voluntary cooperation of those parties in supplying the necessary information. In that context, it follows from recital 27 of the basic regulation that the EU legislature considered it ‘necessary to provide that, where parties do not cooperate satisfactorily, other information may be used to establish findings and that such information may be less favourable to the parties than if they had cooperated’. Thus, the objective of Article 18 of the basic regulation is to enable the Commission to continue with the investigation even though the interested parties refuse to cooperate or do not cooperate satisfactorily. Accordingly, given that they are required to cooperate to the best of their ability, the interested parties must provide all the information that they have which the institutions consider necessary for the purpose of reaching their findings (see, by analogy, judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 54 to 56).
142 The basic regulation does not define what is ‘necessary’ information within the meaning of Article 18(1) thereof.
143 According to the case-law, it follows from the wording, context and objective of Article 18(1) of the basic regulation that the term ‘necessary information’ refers to information held by the interested parties which the EU institutions ask them to provide in order to enable them to reach the appropriate findings in an anti-dumping investigation (see, by analogy, judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraph 57).
144 In addition, it should be pointed out that Article 18 of the basic regulation constitutes the implementation, in EU law, of the content of Article 6.8 of, and Annex II to, the anti-dumping agreement (‘Annex II’), and must be interpreted in the light thereof as far as possible (see, by analogy, judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council, T‑633/11, not published, EU:T:2014:271, paragraph 40 and the case-law cited).
145 Article 6.8 of the anti-dumping agreement provides as follows:
‘In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. The provisions of Annex II shall be observed in the application of this paragraph.’
146 Article 5 of Annex II corresponds to Article 18(3) of the basic regulation, since it provides as follows:
‘Even though the information provided may not be ideal in all respects, this should not justify the authorities from disregarding it, provided the interested party has acted to the best of its ability.’
147 It should be noted that Annex II is ‘incorporated by reference into Article 6.8’ of the anti-dumping agreement (Report of the Appellate Body, United States – Anti-dumping measures on certain hot-rolled steel products from Japan (WT/DS 184/AB/R), adopted by the DSB on 23 August 2001 (paragraph 75)) and that the provisions of that annex are mandatory, despite the fact that they are often phrased in the conditional tense (Panel Report, United States – Anti-dumping and countervailing measures on steel plate from India (WT/DS 206/R), adopted by the DSB on 29 July 2002 (paragraph 7.56)).
148 According to the Panel Report, Korea – Anti-dumping duties on imports of certain paper from Indonesia (WT/DS 312/R), adopted by the DSB on 28 October 2005 (paragraph 7.43), the decision as to whether or not a given piece of information constitutes ‘necessary information’ within the meaning of Article 6.8 of the anti-dumping agreement has to be made in the light of the specific circumstances of each investigation, not in the abstract. Moreover, according to the Panel Report, European Communities – Anti-dumping measure on farmed salmon from Norway (WT/DS 337/R), adopted by the DSB on 15 January 2008 (paragraph 7.343), specific information held by an interested party which is requested by the authority conducting the anti-dumping investigation (‘the competent authority’) for the purpose of making ‘determinations’ must be regarded as necessary within the meaning of that provision.
149 Moreover, it has been held that the information relating to production volumes and manufacturing costs of the product under investigation is clearly necessary information within the meaning of Article 18(1) of the basic regulation (see, by analogy, judgment of 22 September 2021, NLMK v Commission, T‑752/16, not published, EU:T:2021:611, paragraph 53).
150 In the present case, it follows from recitals 274, 275 and 317 to 322 of the contested regulation and from the details provided by the Commission during the proceedings, in response to a question from the Court, that the Commission, in order to construct the normal value, had recourse to the facts available within the meaning of Article 18 in order to establish the consumption volumes of inputs, such as coal and water, employed by the applicant to produce the self-produced factors of production used in its PVA production, such as electricity and steam. The applicant had not provided the Commission with the information which the latter considered necessary for that purpose.
151 It is not disputed that self-produced factors of production play a significant role in the production of PVA. Those factors of production in turn require inputs, which thus represent costs incurred by the applicant in producing PVA. Since the normal value in the present case was constructed using a method based on production costs, the Commission needed to be acquainted with the consumption volumes of all the inputs used to produce PVA, including therefore the inputs for producing self-produced factors of production.
152 The applicant claims that it was impossible for it to supply the data requested by the Commission due to the specific features of its production process, which the questionnaire prepared by the Commission did not take into account. It states that self-produced factors of production are not used solely to produce PVA. The applicant also adverts to the risk of double counting which, as it explained during the investigation, arises from the fact that steam generated by coal boilers is used, first, to produce energy and, subsequently, to produce PVA, with electricity which is not therefore generated directly by coal. Therefore, that self-produced electricity and steam are not comparable to traditional inputs, such as coal. In addition, the applicant states that its process is an entirely chemical reaction during which different ingredients work together and sometimes consume each other, leaving residues which may be reused or which are transformed into other substances.
153 It should be recalled that, according to recital 319 of the contested regulation, the applicant had ‘already reported the inputs for producing the self-produced factors of production’. The Commission concludes that ‘these inputs could equally be allocated to the product under investigation’.
154 It is apparent from recital 319 of the contested regulation that the applicant had indicated to the Commission which inputs were needed to produce the self-produced factors of production. However, the applicant considers that it is not in a position to state to what extent those self-produced factors of production, and therefore the inputs needed to produce them, can be allocated to the production of PVA.
155 It follows that what the applicant is actually objecting to is the validity of the method used by the Commission to construct the normal value, in so far as that method resulted in overestimation of the consumption of the inputs concerned, which were allocated in excess to the production of PVA, when the self-produced factors of production were not used exclusively to produce those inputs. That objection is not such as to demonstrate that it was impossible to supply the information requested by the Commission.
156 It should also be noted that, in order to prevent the Commission from having recourse to the facts available within the meaning of Article 18, the applicant could have forwarded that information to it, without prejudice to the possibility of mounting a substantive challenge to the Commission’s use of the information, including before the Court.
157 Accordingly, the applicant’s arguments alleging infringement of Article 18(1) of the basic regulation must be rejected.
158 As regards its arguments claiming infringement of Article 18(3) of the basic regulation, it should be recalled that, according to the case-law, paragraphs 1 and 3 of Article 18 of that regulation cover different situations. Thus, whereas Article 18(1) of the basic regulation sets out in general terms cases in which the information needed by the institutions for the purposes of the investigation has not been supplied, Article 18(3) of that regulation contemplates the cases in which the information necessary for the purposes of the investigation has been supplied but is irrelevant, with the result that the facts available do not necessarily have to be used (see, to that effect and by analogy, judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council, T‑633/11, not published, EU:T:2014:271, paragraph 98 and the case-law cited).
159 In the present case, the Commission used the facts available within the meaning of Article 18 only as a substitute for the information which the applicant had not supplied, owing to the alleged impossibility of doing so.
160 Furthermore, it should be made clear that the degree of effort displayed by an interested party in submitting certain information does not necessarily reflect the substantive quality of the information supplied, and is not, in any case, the only determinant thereof. Thus, where the requested information is not ultimately obtained, the Commission is entitled to resort to the facts available within the meaning of Article 18 in respect of that information (see, by analogy, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraph 104).
161 Since the applicant did not supply the information requested by the Commission regarding the inputs for self-produced factors of production, Article 18(3) of the basic regulation was not applicable and the Commission could only use the facts available within the meaning of Article 18 as a substitute for that information.
162 In any event, according to the Appellate Body, paragraph 5 of Annex II requires a very significant degree of effort from interested parties (Report of the Appellate Body, United States – Anti-dumping measures on certain hot-rolled steel products from Japan (WT/DS 184/AB/R), adopted by the DSB on 23 August 2001 (paragraph 102)).
163 The applicant cannot be regarded as having made such an effort, since it refused to carry out the accounting exercise required by the Commission in order to allocate a share of the production costs for self-produced factors of production to PVA.
164 Accordingly, the applicant’s arguments alleging infringement of Article 18(3) of the basic regulation must also be rejected.
165 In the reply, the applicant submits that the Commission did not provide it in good time with the ‘verification report’ which that institution is required to forward to an interested party before sending the letter informing that party of its intention to use the facts available within the meaning of Article 18. That procedural irregularity constitutes a breach of the applicant’s rights of defence.
166 It must be recalled that, according to the case-law, although an applicant cannot be required to show that the Commission’s decision would have been different in the absence of the procedural irregularity in question, but simply that such a possibility cannot be totally ruled out, since that party would have been better able to defend itself had there been no irregularity, the fact remains that the existence of an irregularity relating to the rights of the defence can result in the annulment of the measure in question only where there is a possibility that, due to that irregularity, the administrative procedure could have resulted in a different outcome and thus in fact adversely affected the rights of the defence (see judgment of 5 May 2022, Zhejiang Jiuli Hi-Tech Metals v Commission, C‑718/20 P, EU:C:2022:362, paragraph 49 and the case-law cited).
167 The applicant has not put forward any evidence to show that it could not be ruled out that the outcome of the procedure might have been different if it had received the ‘verification report’ earlier.
168 Accordingly, the applicant’s present argument must be rejected as unfounded, without it being necessary to rule on its admissibility, which is disputed by the Commission on the ground that it was not raised in the application.
169 In the light of the foregoing, the fifth plea in law must be rejected as unfounded.
170 In addition, having regard to the considerations set out in paragraph 69 above, the rejection of the second and fifth pleas in law as unfounded means that the third and fourth pleas in law may be rejected as ineffective.
…
On those grounds,
THE GENERAL COURT (Ninth Chamber, Extended Composition)
hereby:
1. Dismisses the action;
2. Orders Inner Mongolia Shuangxin Environment-Friendly Material Co. Ltd to bear its own costs and to pay the costs incurred by the European Commission, by Kuraray Europe GmbH and by Sekisui Specialty Chemicals Europe SL;
3. Orders the European Parliament, the Council of the European Union and Wegochem Europe BV to bear their own costs.
Delivered in open court in Luxembourg on 21 February 2024.
[Signatures]