European Commission Directorate-General for Trade

Judgments rendered by the Court of Justice in 2008

Seamless pipes and tubes - Judgment of 9 July 2008 (OJ C 209 of 15.8.2008, p.43)

The applicants, an importer of seamless pipes and tubes in the European Community and its managing director, requested to be compensated for the damage they allegedly suffered as a result of the adoption of Regulation 2320/97 imposing definitive anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating in Hungary, Poland, Russia, the Czech Republic, Romania and the Slovak Republic.

• The applicants argued that in the context of proceedings under Article 81 EC, a fine was imposed on several community producers of seamless pipes and tubes. According to the applicants, it is very likely, if not certain, that the anti-competitive conduct of the seamless pipes and tubes producers affected the injury and causality analysis of the anti-dumping proceedings, given the overlap in the product scope, in the companies involved and in the periods of investigation of the competition and anti-dumping proceedings. Nevertheless, the applicants contend, the Commission entirely failed to take into account that anti-competitive conduct when determining the injury caused by the allegedly dumped imports, as required by Regulation 384/1996.

In its analysis the Court concentrated on whether a sufficiently direct causal link existed between the alleged wrongful conduct of the Council and Commission and the alleged damage. It considered that that causal could not be regarded as having been sufficiently direct. Consequently, the Court dismissed the applicants' claims for compensation as unfounded.

As the conditions for establishing non-contractual liability on the part of the Community are cumulative, the Court considered that there was no need to examine whether the other conditions laid down by the case-law had been satisfied. The decision on the appeal lodged by the applicants against this judgement is still pending.

Ammonium Nitrate originating in Russia – of the European Union: Judgment of 10th September 2008 (OJ C 272  of 25.10.2008, p.17)

In 2002 measures were imposed against imports of ammonium nitrate originating in Russia. The product concerned was defined as "ammonium nitrate other than in aqueous solution and mixtures of ammonium nitrate with calcium carbonate or other inorganic non-fertilising substances, with a nitrogen content exceeding 28% by weight…" In 2005, following a partial interim review limited to 'scope' under Article 11(3) of the basic Regulation, the contested Regulation amended the product scope to "solid fertilisers with an ammonium nitrate content exceeding 80% by weight." The applicant, a Russian exporter, challenged the extension of the duty to solid fertilisers.

The Court found that the Council does not have the power, in an interim review, to extend measures to non products concerned, even if the duty is applied only in proportion of the amount of product concerned incorporated in the non product concerned. Therefore it annulled the contested regulation as it concerns the applicant.

Polyester staple fibres from Korea - of the European Union: Judgment of the Court of 8 July 2008 (OJ C 209 of 15.8.2008, p.44)

The applicant, a Korean-based company specialising in the production of polyester filament yarn, polyester staple fibre and polyethylene terephthalate requested annulment of Council Regulation (EC) No 428/20051, by which the Council imposed a definitive anti-dumping duty of 5.7% on imports of polyester staple fibre manufactured by the applicant and originating in Korea.

The judgement deals mainly with two issues:

1. The change between the review and the initial investigation of the method used to calculate the adjustment made under the duty drawback scheme for import charges and indirect taxes and
2. The rejection of a credit cost adjustment claim based on the so-called "open account system" used in South Korea.

Concerning the first issue, the Court stated that using the same method in the context of a review as the method used in the initial investigation which led to the duty being imposed is a general rule set by Article 11(9). The exception to this rule must be interpreted strictly:  it is for the institutions to demonstrate that the circumstances have changed. The Court considered that the institutions failed to do so in the present case. Therefore, it annulled the contested regulation to the extent to which the anti-dumping duty imposed exceeds that which would be applicable if the method used in the original investigation, had been used to calculate the adjustment to the normal value.

As to the second issue, the Court upheld the Institutions' decision to reject the credit costs adjustment. It confirmed that 'it is for the party claiming an adjustment under Article 2(10)(g) of the basic regulation to demonstrate, first, that a credit has been granted and, second, that it affects the prices and their comparability'. This means, inter alia, that the party claiming for an adjustment must show that the credit terms were known at the time the price was agreed with the customer and that the credit terms influenced the price. 

Imports of certain graphite electrode systems originating in India-  of the European Union: Judgment of the Court of 17 December 2008 (OJ C 32 of 7.2.2009, p.25)

The applicants were two Indian companies which manufacture and export certain graphite electrode systems to the European Community.

The Court rejected the application in its entirety. The most important findings of the Court can be summarised as follows:

• Failure to open an investigation against other potential sources of dumping cannot be considered as a breach of the principle of non-discrimination set in Article 9(5).
• The applicants cannot claim their rights of defence were infringed if they have failed to sufficiently alert the Commission and then the Council about the difficulties caused by the alleged defective nature of the non-confidential version of the complaint.

Judgments rendered by the Court of Justice in 2007

Bed Linen originating in Egypt, India and Pakistan – [reference for a preliminary ruling]: Judgment of 27 September 2007 (C 283, 24.11.2007, p.2)

This case concerns a reference for a preliminary ruling by the UK Commissioners of Customs & Excise regarding the validity of Council Regulation (EC) N° 2398/97 imposing a definitive anti-dumping duty on imports of bed linen originating in Egypt, India and Pakistan ("the Bed Linen Regulation") and the possibility for an importer to rely on the invalidity of such regulation in order to obtain repayment of duties paid in accordance with the relevant provisions of the Community Customs Code.  The Court's analysis regarding the validity of the "Bed Linen Regulation" was twofold.

1. The Court first held that the validity of the "Bed Linen Regulation" could not be reviewed in the light of the WTO Anti-Dumping Agreement as subsequently interpreted by the DSB's recommendations. Indeed, it was clear from the subsequent regulations adopted to implement the DSB's recommendations that such implementation was prospective only and excluded any repayment of duties paid under the "Bed Linen Regulation".
2. Second, the Court held that the "Bed Linen Regulation" was incompatible with the Basic Anti-Dumping Regulation in that it applied "zeroing" per model type for the calculation of the margin of dumping. Conversely, the Court held that the determination of the Selling, General and Administrative expenses and profit pursuant to Article 2(6)(a) of the Basic AD Regulation may be carried out on the basis of data from a single enterprise in spite of the use of the plural in the expression 'other exporters or producers' in Article 2(6)(a). Furthermore, the Court held that in evaluating, for the purpose of the examination of the impact of the dumped imports, only the relevant factors having a bearing on the state of the Community industry as opposed to all the factors listed in Article 3(5) of the Basic AD Regulation, the Community institutions did not exceed the margin of assessment which they are acknowledged to have in the evaluation of complex economic situations 25. Lastly, the Court held that an importer which has brought an action before a national court against the decisions by which the collection of anti-dumping duties is claimed from it under a regulation declared invalid is, in principle, entitled to rely on that invalidity in order to obtain repayment of those duties in accordance with Article 236(1) of the Community Customs Code.

Judgments rendered by the Court of First Instance in 2006

Magnesium oxide and deadburned magnesium originating in the People's Republic of China

Van Mannekus, an importer of deadburned magnesia and magnesium oxide from China, challenged Regulations (EC) Nos 986/2003 and 985/2003, both of which altered the form of the anti-dumping duties on imports of those products (from a pure minimum import price to a combination of MIP and ad valorem, taking into account the different situations of related / unrelated importers and that of damaged goods) on the basis of a partial interim review. The Court, in an order that reiterated the jurisprudence on admissibility and especially individual concern, found Van Mannekus' application as non-related importer to be inadmissible. Van Mannekus had not been able to demonstrate certain attributes which would differentiate it sufficiently from other economic actors (Plaumann jurisprudence). The Court broadly confirmed the written submissions made by the Council and the Commission.

Handbags originating in the People's Republic of China -  of the European Union : Judgment of 26 January 2005 (OJ C 74, 25.03.2006, p. 17)

The Court dismissed Medici Grimm's claim for damages. After having won a first court case in which they claimed retroactive reimbursement of the anti-dumping duties collected after it was found in an interim review that their Chinese supplier had, in fact, not dumped, this importer of leather handbags was also trying to obtain compensation for alleged damages. According to a standing Court jurisprudence, the granting of damages requires, inter alia, a serious breach of Community law. In the present case, the Court considered that the Council did not commit such a serious breach given the lack of clarity/complexity of the situation and thus, did not infringe the basic Regulation in a sufficiently serious manner to give rise to the non-contractual liability of the Community.

Compact disc recordables originating in India - of the European Union: Judgment of 4 October 2006 (C 281, 18.11.2006, p. 30)

• The applicant lodged an application before the CFI in 2003 for the annulment of definitive countervailing duties on imports of recordable compact disks from India. The grounds for the application were an alleged (i) error in the determination of the margin of subsidy due to the wrong assessment of the period and the method of depreciation of fixed assets, and (ii) error in the determination of the injury and in the analysis of other factors (causality). The Court rejected all claims of the applicant and dismissed the action in its entirety. In particular, the Court confirmed that the institutions enjoy a wide discretion with regard to the factors that may be relevant in calculating the amount of subsidy.

The Court also confirmed that injury may be caused by a number of factors, with the subsidised imports being one cause. Regarding the applicant's claim that the institutions failed to examine, under other factors causing injury, alleged anticompetitive behaviour on the market, this was rejected by the Court. It suffices that the institutions find, as the Council did, that, despite the alleged anti-competitive behaviour, the injury caused by the imports in question is material. On this point, the Court also observed that, as the alleged anti-competitive behaviour was not attributable to the behaviour of the Community producers (but rather abusive behaviour by another party), the institutions were not required to examine whether or not the industry had itself contributed to the injury suffered. The applicant has appealed the judgment of the CFI to the European Court of Justice (case C-535-06). This case is still ongoing.

Ferro molybdenum originating in the People's Republic of China -  of the European Union : Judgment of 14 November 2006 (C 326, 30.12.2006, p. 54)

The applicant (a Chinese producer of ferro molybdenum) sought the annulment of the contested Regulation on the grounds that the Market Economy Treatment (MET) granted to the applicant by the Regulation imposing provisional measures was incorrectly revoked, that the applicant's rights of defence had been violated, that the Institutions breached the rule precluding them to use information subsequent to the investigation period and that, by revoking the MET, the Council exceeded its powers under the basic anti-dumping Regulation, because the Council does not have the power to revoke a grant of Market Economy Treatment without instituting a fresh investigation. The Commission had granted MET to the applicant in the provisional Regulation.

• This treatment was revoked in the definitive Regulation because evidence of circumvention, organised by the China Chamber of Commerce in agreement with state-owned companies, was found (channelling of exports via applicant, who had lowest duty). The Court of First Instance dismissed the applicant's claims. In spite of the wording of the basic Regulation which states that the MET determination shall remain in force throughout the investigation, the Court held that if the Community Institutions had new evidence showing that the exporter did not operate under market economy conditions, they were entitled, even obliged, to draw the consequences of the new factual situation - otherwise they would impose manifestly inappropriate measures.

The Institutions are only precluded from re-evaluating evidence they had at the time of the MET determination. The Court also noted that rights of defence had been respected since the applicant

• was given the opportunity to comment. In relation to the applicant's argument that the institutions are precluded from using information subsequent to the investigation period, the Court confirmed that this rule allows exceptions. In this case, the Institutions had to take into consideration the post-IP information in order not to impose manifestly inappropriate AD duties.

Compact disc recordables originating in Taiwan - of the European Union : Judgment of 24 October 2006 (C 310, 16.12.2006, p. 11)

The applicant sought the annulment of Council Regulation (EC) 1050/2002 concerning imports of recordable compact disks originating in Taiwan. The grounds of application were a manifest error in the assessment of the facts and of law by incorrectly finding that the applicants engaged in "targeted dumping" practices, use of the average-to-transaction methodology rather than use of actual prices in the calculation of the dumping margin of the applicants, manifest error of assessment of the facts in calculating the dumping margin of the applicants by using the "zeroing technique". Using this technique, the Institutions offset the illegitimate benefit that the exporter tried to obtain by compensating the targeted dumped export transactions with non-dumped export transactions.

• The Court dismissed the action by rejecting the applicant's claim of manifest error in establishing targeted dumping and manifestly unjustified application of the asymmetrical method. The first condition for the use of the asymmetrical method does not require intent on the part of the exporters to disguise dumping. With regard to the second condition, the Council did not commit a manifest error of assessment in concluding that the use of the first symmetrical method would have had the effect of inappropriately disguising the significantly higher or targeted dumping which took place during the second half of the investigation period and by finding the asymmetrical method preferable to that method. The Court further held that contrary to what the applicant claimed, the zeroing technique in the context of the asymmetrical method, as performed in the present case, did not consist in distorting the prices of the individual export transactions. The actual value of each export transaction was taken into account by the Council in the comparison with the normal value. It was only where the dumping margin yielded by that individual comparison proved to be negative that that margin was set at zero to prevent it from disguising targeted dumping found to have taken place elsewhere.

Para-cresol originating in the People's Republic of China - of the European Union: Judgment of 13 July 2006 (C 224, 16.09.2006, p. 35)

The applicant lodged an application before the CFI in 2003 for the annulment of the definitive anti-dumping duties on imports of para-cresol from the People's Republic of China. The grounds for the application were all linked to the non-deduction of the cost of by-products in establishing normal value for para-cresol and whether information was submitted in good time by the applicant. The CFI found that that the contested regulation must be annulled insofar as it concerns the applicant as the Institutions failed in their obligations to take account of all the relevant circumstances, so that the constructed normal value may be regarded as having been determined in a reasonable manner.

Judgments rendered by the Court of First Instance in 2005

Unbleached cotton fabrics originating in the People's Republic of China, Egypt, Indonesia, Pakistan, Turkey and India : Judgment of 17 March 2005 (OJ 132, 28.05.2005, p. 22)

Certain parts of television cameras originating in Japan - : Judgment of 17 March 2005 (OJ 132, 28.05.2005, p. 23)

In the above-mentioned three cases, the Court of First Instance confirmed the (C-76/01P – see 22nd Annual report covering the 2003 activities) and annulled the attacked Council's decisions to reject definitive antidumping measures proposed by the Commission. Mirroring the Eurocoton Judgment, the Court annulled the Council's non-adoptions of definitive anti-dumping measures proposed by the Commission on the ground of lack of reasoning (the simple fact that no positive simple majority was reached amongst Member States is not considered as an adequate reasoning; any rejection of proposed measures should be justified along the lines of the basic Regulation's provisions). The Court did not take any decision on the requests for damages made in two of the cases because the applicants withdrew such requests before the Judgments were given (damages were not granted in Eurocoton Judgment either, given that the annulment of Council's non-adoption of measures was based on lack of reasoning, which is not sufficient to engage the Community's liability).

Broadcast camera systems originating in Japan - T-350/02 – Ikegami v. Council of the European Union (case withdrawn by applicants)

The reviewable Act was Regulation N°1696/2002 concerning broadcast cameras systems from Japan. The grounds of Application were the non-retroactivity of the effects of the exclusion of certain types of the like product from the scope of antidumping measures. The applicant withdrew the application and consequently the case was removed from the register on 15 February 2005.

Grain oriented electrical sheets (GOES) originating in Russia - T-335/04 – Viz Stal, Russia and Duferco Commerciale, Italy v. Council of the European Union (case withdrawn by applicants)

The applicants lodged an application before the CFI in August 2004 for the annulment of the Council Regulation imposing definitive anti-dumping duties on imports of GOES from Russia. The grounds for the application were that (i) the applicant was not related to one of its raw material suppliers and accordingly prices between these parties should not have been rejected by the Institutions and (ii) the calculation of normal value and export prices by the Institutions was flawed. It is worth to be mentioned that the Council, in August 2005 (‘the 2005 Regulation'), imposed anti-dumping measures on a broader range of types of GOES than that subject to the measures imposed in 2004.

In September 2005, the applicant informed the CFI that it wished to discontinue the proceedings and requested that its costs be borne by the defendant. The applicant claimed that this would be justified because the Council, in the 2005 Regulation, allegedly reversed its methodology and corrected the mistakes in the contested 2004 Regulation. In essence, the Applicant alleged that in the 2005 Regulation, the Council implicitly admitted that the grounds of application raised by the Applicant in this case were well founded. The Council had no objection to the removal of the case from the register. However, the Council argued that it did not correct any mistakes nor did it change its methodology in the 2005 Regulation, compared to that used in imposing measures in 2004.

By Order of the President of the Court in December 2005, the Court found no evidence on the case file of conduct on the part of the defendant which would justify an order that it bear the costs. The President therefore ordered that the case be removed from the register of the CFI and that the applicant bear its own costs and those of the defendant.

Judgments rendered by the Court of Justice in 2005

Capacitors originating in Japan, the Republic of Korea and Taiwan - C-422/02 P – Europe Chemi-Con (Deutschland) v. Council of the European Union

The Court of Justice rejected the appeal brought by Chemi-Con. This case refers to an expiry review which was initiated on the last possible day (3 December 1997) for measures in place against large aluminium electrolytic capacitors ("LAECs") originating in Japan, the Republic of Korea and Taiwan. Shortly before that date, a new Article 5 investigation had been initiated against the same product, but coming from the US and Thailand.

The Article 5 investigation was terminated de facto on 28 February 1999 as the Council failed to adopt the Commission's proposal for imposition of the measures within the 15 months deadline to impose measures. The conclusions on dumping, injury, causation, and Community interest were similar in both the expiry review and the Article 5 investigation. In both cases, the Commission proposed to (re-)impose duties. Accordingly, and further to non-imposition of measures against the US and Thailand, the Council adopted the contested Regulation n°173/2000 terminating the review investigation and repealing, with retroactive effect as of 28 February (i.e. the day of non-adoption by the Council of the proposed US/Thailand measures) the original measures; indeed from 28 February 1999, it was considered that imposing duties on imports of LAECs from Japan, Korea and Taiwan, but not on those from the US and Thailand would have been discriminatory.

Chemi-Con sought to have the repeal of the original measures go even further back, namely to 4th December 1997, (i.e. immediately after the lapsing of the original five year period) arguing discrimination starting already from that date. The Court of First Instance rejected Chemi-Con's arguments, essentially agreeing with the Institutions' line that the two measures were distinct, one being based on Article 11(2) and an existing finding of dumping, injury and CI, whilst the other was based on Article 5, and hence there was no discrimination before the 28th February. In the appeal, Chemi-Con sought, again, and essentially for the same reasons, to obtain the retroactive annulment of the original measures going back to 4th December 1997.