Joined Cases T-407/06 and T-408/06

Zhejiang Aokang Shoes Co., Ltd and Wenzhou Taima Shoes Co., Ltd

v

Council of the European Union

(Dumping – Imports of footwear with uppers of leather originating in China and Vietnam – Market economy treatment – Individual treatment – Sampling – Rights of the defence – Equal treatment – Injury – Legitimate expectations – Duty to state reasons)

Summary of the Judgment

1.      Common commercial policy – Protection against dumping – Dumping margin – Determination of the normal value – Sampling

(Council Regulation No 384/96, Arts 9(6), and 17(1), (2) and (3))

2.      Common commercial policy – Protection against dumping – Dumping margin – Determination of the normal value – Imports from countries not having a market economy as referred to in Article 2(7)(b) of Regulation No 384/96 – Sampling

(Council Regulation No 384/96, Arts 2(7)(b), 9,(6), and 17(1) and (3))

3.      Common commercial policy – Protection against dumping – Anti-dumping proceeding – Rights of the defence – Final disclosure by the Commission to undertakings

(Council Regulation No 384/96, Art. 20(2) and (4))

4.      Community law – Principles – Rights of the defence – Observance thereof in the context of administrative proceedings – Antidumping – Obligation of the institutions to ensure that the parties concerned are informed – Additional final disclosure document

(Council Regulation No 384/96, Art. 20(5))

5.      Common commercial policy – Protection against dumping – Injury – Period to be taken into consideration

(Council Regulation No 384/96, Art. 3(2))

1.      According to the wording of Article 17(1) and (3) of the basic anti-dumping regulation No 384/96, the use of sampling as a technique in order to deal with a large number of complainants, exporters, importers, types of product or transactions constitutes a limitation of the investigation. That assessment is borne out by Article 9(6) of the basic regulation under which producers who are not part of the sample are not included in the investigation.

However, the basic regulation provides that where there is such a limitation the Community institutions must comply with two obligations. First, the sample must be representative within the meaning of Article 17(1) and (2) of the basic regulation. Secondly, Article 9(6) of that regulation provides that the dumping margin established for producers who are not included in the sample is not to exceed the weighted average margin of dumping established for the parties in the sample.

(see paras 83-84)

2.      Where sampling, as provided for by Article 17 of the basic anti-dumping regulation No 384/96, is used, producers who are not included in the sample may request that an individual dumping margin be calculated – which presupposes the acceptance of a claim for market economy treatment or individual treatment where countries concerned by Article 2(7)(b) of the basic regulation are involved – only on the basis of Article 17(3) of that regulation. However, Article 17(3) gives the Commission the power to assess whether, having regard to the number of such claims, examining them would be unduly burdensome and would prevent completion of the investigation in good time.

It follows that the basic anti-dumping regulation does not give traders who are not included in the sample an unconditional right to the calculation of an individual dumping margin. The acceptance of such a claim depends on the Commission’s decision as to the application of Article 17(3) of the basic regulation. Furthermore, as the grant of market economy treatment or individual treatment serves, pursuant to Article 2(7)(b) of that regulation, only to establish the method for calculating normal value with a view to the calculation of individual dumping margins, the Commission is not required to examine claims from traders who are not included in the sample, where it has concluded, in applying Article 17(3) of the basic regulation, that the calculation of such margins would be unduly burdensome and would prevent it from completing the investigation in good time.

The application of those rules does not constitute a breach of the principle of equal treatment in respect of the companies included in the sample and those who are not as those two groups of companies are in different situations since the Commission must necessarily calculate an individual margin of dumping for the former, and that presupposes the examination and acceptance of such a claim for market economy treatment or individual treatment, whereas it is not obliged to establish an individual margin for the latter.

Furthermore, the principle of equal treatment in respect of the companies which are not included in the sample does not require the Commission to decide on all the claims which have been submitted to it, with the result that the producers or exporters not included in the sample, but to whom such market economy treatment or individual treatment is granted, may have applied to them the average dumping margin of the sampled companies to which such market economy treatment or individual treatment has been granted.

If the number of claims is so large that examining them would prevent the Community institutions from completing the investigation in good time, the institutions are not required, under Article 17(3) of the basic regulation, to decide on all of those claims, even for the sole purpose of distinguishing, among the non-sampled companies, between those which may or may not be entitled to market economy treatment or individual treatment, with a view to applying to them the average dumping margin of the sampled companies to which market economy treatment or individual treatment has been granted, but without calculating an individual dumping margin.

(see paras 87-89, 92-94)

3.      The undertakings affected by an investigation preceding the adoption of an anti-dumping regulation must be placed in a position during the administrative procedure in which they can 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 assessment of the existence of dumping and the resultant injury.

In this connection, the fact that final disclosure requested by the parties pursuant to Article 20(2) of the basic anti-dumping regulation No 384/96 is incomplete renders the regulation imposing definitive anti-dumping duties unlawful only if, as a result of the omission, the interested parties were not in a position to defend their interests effectively. That is inter alia the case where the omission relates to facts or considerations which are different from those used for any provisional measures, to which particular attention must be paid in final disclosure pursuant to that provision. That is also the case where the omission relates to facts or considerations which are different from those on which the Commission or Council bases a decision subsequent to the communication of the final disclosure document, as is apparent from the last sentence of Article 20(4) of the basic regulation.

The fact that the Commission amended its analysis after comments made on the final disclosure document by the parties concerned does not however, in itself, constitute infringement of the rights of the defence. As is apparent from the last sentence of Article 20(4) of the basic regulation, the final disclosure document does not prejudice any subsequent decision by the Commission or the Council. That provision merely requires the Commission to disclose, as soon as possible, the facts and considerations which are different from those which formed the basis for its initial approach in the final disclosure document. Consequently, in order to establish whether the Commission complied with the rights of the parties concerned deriving from the last sentence of Article 20(4) of the basic regulation, it must also be ascertained whether the Commission communicated to them the facts and considerations taken into account for the purpose of the new analysis of the injury and the form of measures necessary to eliminate it, in so far as those facts and considerations differ from those taken into account in the final disclosure document.

(see paras 108, 132-133, 138-139)

4.      The Commission breaches Article 20(5) of the basic anti-dumping regulation No 384/96 by granting a producer who is subject to an anti-dumping investigation a period of less than 10 days to comment on the additional final disclosure document. However, that fact cannot, in itself, lead to annulment of the contested regulation. It is also necessary to establish that the granting of a period shorter than the prescribed period was actually capable of affecting its rights of defence in the procedure in question.

(see para. 145)

5.      The adoption of anti-dumping duties is not a penalty for earlier behaviour but a protective and preventive measure against unfair competition resulting from dumping practices. In order to be able to determine the anti-dumping duties appropriate for protecting the Community industry against dumping, it is therefore necessary to carry out the investigation on the basis of information which is as recent as possible.

Where the Community institutions find that imports of a product which has until then been subject to quantitative restrictions increase after those restrictions have lapsed, they may take that increase into account for the purposes of their assessment of the injury sustained by the Community industry.

(see paras 155-156)