Case T‑402/20
Zippo Manufacturing Co. and Others
v
European Commission
Judgment of the General Court (Third Chamber), 18 October 2023
(Commercial policy – Regulation (EU) 2020/502 – Measures adopted by the United States on imports of certain derivative aluminium and steel products – European Union decision to suspend equivalent trade concessions and other obligations – Additional customs duties on imports of products originating in the United States – Action for annulment – Standing to bring proceedings – Admissibility – Principle of good administration – Right to be heard)
1. Action for annulment – Natural or legal persons – Measures of direct and individual concern to them – Person individually affected by a measure of general application – Conditions – Regulation establishing measures to rebalance concessions in trade relations with a third country – Action brought by an exporting producer of the product concerned to the European Union – Existence of a particular situation which differentiates it from all other operators – Admissibility
(Art. 263, fourth para., TFEU)
(see paragraphs 22, 24, 26-30)
2. Action for annulment – Natural or legal persons – Measures of direct and individual concern to them – Direct concern – Criteria – Regulation establishing measures to rebalance concessions in trade relations with a third country – Direct concern to an exporting producer of the product concerned to the European Union
(Art. 263, fourth para., TFEU)
(see paragraphs 32, 33, 35-43)
3. Action for annulment – Admissibility criteria – Natural or legal persons – Action brought by a number of applicants against the same decision – Standing to bring proceedings of one of them – Admissibility of the action as a whole
(Art. 263, fourth para., TFEU)
(see paragraphs 44-46)
4. Action for annulment – Interest in bringing proceedings – Interest to be assessed at the time when the action is brought – Regulation establishing measures to rebalance concessions in trade relations with a third country – Temporary suspension of that regulation during the proceedings – Applicants maintaining an interest in obtaining recognition of the contested act’s illegality
(Art. 263, fourth para., TFEU)
(see paragraph 47)
5. Common commercial policy – Defence against trade barriers – Protection against measures adopted by a third country on imports of certain products – Regulation establishing measures to rebalance concessions in trade relations with that country – Information gathering prior to the adoption of that regulation – Notification of the relevant stakeholders through any suitable public communication means – No obligation to inform the relevant stakeholders by publishing a notice in the Official Journal of the European Union
(Charter of Fundamental Rights of the European Union, Art. 41(2)(a); European Parliament and Council Regulation No 654/2014, Arts 4(1) and 9(1))
(see paragraphs 54-58)
6. Common commercial policy – Defence against trade barriers – Protection against measures adopted by a third country on imports of certain products – Respect for the rights of the defence – Right to be heard – Scope – Undertakings producing or exporting the products concerned which did not participate in the information gathering – Included – Conditions – Identification during the adoption procedure
(Charter of Fundamental Rights of the European Union, Art. 41(2)(a); European Parliament and Council Regulation No 654/2014, Arts 3(c), 4(1) and (2)(c), and 9(1))
(see paragraphs 59-77)
7. Common commercial policy – Defence against trade barriers – Protection against measures adopted by a third country on imports of certain products – Respect for the rights of the defence – Right to be heard – Infringement due to the lack of consultation of an undertaking identified during the procedure for adopting that regulation – Consequence – Annulment of the decision concerned – Conditions – Whether the undertaking concerned would have been better able to defend itself had there been no irregularity – Assessment on a case-by-case basis
(WTO Agreement on Safeguards, Art. 8(2), Charter of Fundamental Rights of the European Union, Arts 41(2)(a) and 52(1); European Parliament and Council Regulation No 654/2014, Art. 9(1))
(see paragraphs 78-86)
Résumé
In April 2020, in response to the imposition by the United States of America of an increase in the custom duties on imports of certain derivative aluminium and steel products, the European Commission considered that it was necessary to adopt measures to implement Regulation No 654/2014 (1) concerning the exercise of the Union’s rights for the application and enforcement of international trade rules. After having sought the views of the relevant stakeholders pursuant to Article 9 of that regulation, it adopted Implementing Regulation 2020/502 (2) providing for the application of additional customs duties on imports of metal mechanical windproof lighters (‘the products concerned’) originating in the United States.
The applicants, the company Zippo Manufacturing Co. (‘ZMC’), established in the United States, and its subsidiaries, Zippo GmbH and Zippo SAS, are engaged in the manufacture, distribution and sale of the products concerned toward the European Union. Having not participated in the information gathering sought by the Commission, they brought an action for annulment of the contested regulation in so far as its provisions concerned them.
The Commission put forward a plea of inadmissibility against that action, on the ground that the applicants did not have standing to bring proceedings under the fourth paragraph of Article 263 TFEU, since the contested regulation was of neither individual nor direct concern to them.
By rejecting that plea of inadmissibility, the Court declares the action admissible. As regards the substance, it finds the argument alleging an infringement of the principle of good administration well-founded and therefore annuls the contested regulation in so far as it covers the products manufactured and distributed by the applicants. In that regard, the Court finds an infringement of the right to be heard under Article 41(2) of the Charter of Fundamental Rights of the European Union (‘the Charter’) in the information gathering exercise carried out by the Commission prior to the adoption of the contested regulation.
Findings of the Court
In the first place, the Court examines the admissibility of the action, recalling, from the outset, that, under the fourth paragraph of Article 263 TFEU, a natural or legal person may institute proceedings against a measure of general application, such as a regulation, only if the measure is of direct and individual concern to him or her.
As regards individual concern, the Court holds that it is apparent from the information in the file that there is a set of factual and legal elements constituting a particular situation which differentiates ZMC from all other economic operators and which shows that the contested regulation is of individual concern to it. ZMC has demonstrated to the requisite legal standard that it is, in particular, the sole producing exporter of the products concerned from the United States to the European Union and that the State of Pennsylvania, where ZMC is established, is one of the US states which was taken into account for the purposes of selecting the products subject to the rebalancing measures.
As for the condition relating to direct concern, it requires the fulfilment of two criteria, namely that the contested measure must directly affect the legal situation of the person concerned and leave no discretion to the addressees who are entrusted with the task of implementing it.
In that context, the Court notes, in the first place, that the Member States, entrusted with the task of implementing the contested regulation, have no discretion as regards the rate of additional customs duties at issue on imports into the European Union and the imposition of those duties on the products at issue. In the second place, it finds, first, that ZMC, as the sole exporting producer of the products concerned, is directly concerned by the negative impact intended by the Commission when it adopted the contested regulation. Second, the contested regulation, by affecting the right of access of those products to the EU market, also affects the right of access for ZMC’s products and, accordingly, produces direct legal effects on ZMC.
In the light of, in particular, those considerations, the Court concludes that the contested regulation is of individual and direct concern to ZMC and that it therefore has standing to bring proceedings for the purposes of the fourth paragraph of Article 263 TFEU.
In the second place, as regards the substance, the Court examines the applicants’ complaint alleging an infringement of the principle of good administration, in particular of their right to be heard.
In that regard, it recalls that, according to settled case-law, the right to be heard, as a principle and fundamental right of the EU legal order, guaranteed by Article 41(2)(a) of the Charter, applies to any procedure which is liable to culminate in a measure adversely affecting a person, that is, an act which may have a negative effect on the interests of the individual or Member State concerned. Furthermore, that right must apply, even in the absence of specific legislation.
In the present case, the Court notes, first, that no provision of Regulation No 654/2014 explicitly excludes or restricts the right to be heard of undertakings whose products are subject to rebalancing measures provided for by an implementing act adopted by the Commission under that regulation. Furthermore, Article 9(1) of that regulation, in so far as it provides for the obligation for the Commission to seek information and views regarding the European Union’s economic interests in specific goods or services or in specific sectors, does not constitute an implementation of the right to be heard of the undertakings concerned. Admittedly, it cannot be ruled out that an undertaking which has taken part in such information gathering has usefully and effectively asserted its interests or submitted information relating to its personal situation. However, where an undertaking, whose interests might be adversely affected by those rebalancing measures, has not participated in such information gathering, it cannot be considered that its right to be heard was not violated on the sole ground that the Commission has fulfilled its obligation to organise that information gathering.
Moreover, a rebalancing measure adopted on the basis of Regulation No 654/2014 is likely to adversely affect the interests of the undertakings exporting the products concerned by that measure, even if that measure was not taken following an individual procedure against those undertakings. It follows that those undertakings may rely on the right to be heard, in particular in a case, such as the present one, where the conduct of the procedure for adopting the implementing act led the Commission to identify those undertakings.
That conclusion cannot be called into question by the Commission’s argument that it would not have had the necessary time to hear the applicants during the procedure for adopting the contested regulation, which had to be adopted within the time limits laid down in the World Trade Organisation (WTO) Agreement on Safeguards.
It is for the Commission, first, to ensure compliance with the time limits resulting from the WTO Agreement on Safeguards and, secondly, to hear the applicants, which had the right to be heard during the procedure for adopting the contested regulation. Since the Commission has failed to prove that it was impossible for it to hear the applicants effectively during that procedure, the Court considers that it had the time necessary to allow the applicants to exercise their right to be heard.
As regards the consequences to be drawn from that procedural irregularity, it follows from well-established case-law that an infringement of the rights of the defence leads to the annulment of the decision adopted at the end of the procedure only if, had there been no irregularity, that procedure could have led to a different outcome. That requirement is met when the undertaking concerned demonstrates that it would have been better able to defend itself had there been no irregularity.
In the present case, the Court considers that, if the applicants had been able to exercise their right to be heard during the procedure, they would have been able to rely on the arguments put forward in the application and, thus, would have been better able to defend themselves. Furthermore, since ZMC is the sole producing exporter of the products at issue, it cannot be ruled out that the contested regulation could have differed in content.
In the light of those considerations, the Court finds that the infringement of the applicants’ right to be heard was likely to have an impact on the outcome of the procedure and, therefore, annuls the contested regulation in so far as it covers the products concerned.