Judgments nº T-442/12 of Tribunal General de la Unión Europea, June 01, 2017

• Resolution Date: June 01, 2017
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-442/12

(Dumping - Imports of tartaric acid originating in China- Modification of the definitive anti-dumping duty - Partial interim review - Market economy treatment - Costs of major inputs substantially reflecting market values - Change in circumstances - Obligation to state reasons - Period for adopting a decision on market economy treatment - Rights of the defence - Article 20(2) of Regulation (EC) No 1225/2009) In Case T-442/12,

Changmao Biochemical Engineering Co. Ltd, established in Changzhou (China), represented by E. Vermulst, S. van Cutsem, F. Graafsma and J. Cornelis, lawyers,

applicant,

v

Council of the European Union, represented by S. Boelaert, acting as Agent, assisted initially by G. Berrisch, lawyer, and N. Chesaites, Barrister, and subsequently by G. Berrisch and B. Byrne, Solicitor, and lastly by N. Tuominen, lawyer,

defendant,

supported by

European Commission, represented initially by M. França and A. Stobiecka-Kuik, and subsequently by M. França and J.-F. Brakeland, acting as Agents,

and by

Distillerie Bonollo SpA, established in Formigine (Italy),

Industria Chimica Valenzana SpA, established in Borgoricco (Italy),

Distillerie Mazzari SpA, established in Sant’Agata sul Santerno (Italy),

Caviro Distillerie Srl, established in Faenza (Italy),

and

Comercial Química Sarasa, SL, established in Madrid (Spain), represented by R. MacLean, Solicitor,

interveners,

APPLICATION under Article 263 TFEU for the annulment of Council Implementing Regulation (EU) No 626/2012 of 26 June 2012 amending Implementing Regulation (EU) No 349/2012 imposing a definitive anti-dumping duty on imports of tartaric acid originating in the People’s Republic of China (OJ 2012 L 182, p. 1), in so far as it applies to the applicant,

THE GENERAL COURT (Eighth Chamber),

composed of A.M. Collins (Rapporteur), President, M. Kancheva and R. Barents, Judges,

Registrar: C. Heeren, Administrator,

having regard to the written part of the procedure and further to the hearing on 15 December 2016,

gives the following

Judgment

Background to the dispute

1 Tartaric acid is used in the production of wine and other beverages, as a food additive and as a retardant in plaster and other products. In the European Union, as well as in Argentina, L+ tartaric acid is produced from the by-products of winemaking, known as wine lees, which are transformed into calcium tartrate and subsequently into tartaric acid. In the People’s Republic of China, L+ tartaric acid and DL tartaric acid are produced from benzene, which is transformed into maleic anhydride, then into maleic acid and finally into tartaric acid. The tartaric acid produced via chemical synthesis has the same physical and chemical characteristics and the same basic uses as that produced from the by-products of winemaking. In response to a question put by the Court at the hearing, the parties confirmed that DL tartaric acid was produced solely in China.

2 On 24 September 2004, the European Commission received a complaint concerning dumping in the tartaric acid sector from several European producers, including Comercial Química Sarasa SL, Distillerie Mazzari SpA and Industria Chimica Valenzana SpA.

3 On 30 October 2004, the Commission published in the Official Journal of the European Union the notice of initiation of an anti-dumping proceeding concerning imports of tartaric acid originating in the People’s Republic of China (OJ 2004 C 267, p. 4).

4 On 27 July 2005, the Commission adopted Regulation (EC) No 1259/2005 imposing a provisional anti-dumping duty on imports of tartaric acid originating in the People’s Republic of China (OJ 2005 L 200, p. 73).

5 On 23 January 2006, the Council of the European Union adopted Regulation (EC) No 130/2006 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of tartaric acid originating in the People’s Republic of China (OJ 2006 L 23, p. 1).

6 Following the publication on 4 August 2010 of a notice of the impending expiry of the anti-dumping measures in force (OJ 2010 C 211, p. 11), the Commission received, on 27 October 2010, a request for an expiry review of those measures, lodged by Caviro Distillerie Srl, Comercial Quimica Sarasa, Distillerie Bonollo SpA, Distillerie Mazzari and Industria Chimica Valenzana.

7 On 26 January 2011, the Commission published in the Official Journal of the European Union the notice of initiation of an expiry review and a review of the anti-dumping measures applicable to imports of tartaric acid originating in the People’s Republic of China (OJ 2011 C 24, p. 14), pursuant to Article 11(2) of Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ 2009 L 343, p. 51; ‘the basic regulation’).

8 On 9 June 2011, the five companies mentioned in paragraph 6 above lodged a request for partial interim review in respect of two exporting producers, one of which was the applicant, Changmao Biochemical Engineering Co. Ltd, pursuant to Article 11(3) of the basic regulation.

9 On 29 July 2011, the Commission published in the Official Journal of the European Union the notice of initiation of the partial interim review procedure of the anti-dumping measures applicable to imports of tartaric acid originating in the People’s Republic of China (OJ 2011 C 223, p. 16), in accordance with Article 11(3) of the basic regulation.

10 On 1 August 2011, the Commission sent a questionnaire and a claim form for market economy treatment (‘MET’) to the applicant. The applicant sent its claim to the Commission on 26 August 2011 and the duly completed questionnaire on 1 September 2011.

11 On 3 October 2011, the Commission sent a request for information to the applicant. In particular, it asked the applicant to provide evidence that the prices of its raw materials reflected market values, given that the source of the raw material at issue was petroleum, a commodity marketed globally.

12 On 17 October, the applicant responded to the Commission’s request, clarifying that the benzene which it used was derived from coke, not petroleum, and providing a chart showing the prices which it had paid for benzene produced from coke and a chart showing the price of benzene from coke in the north of the People’s Republic of China. It added that its benzene purchase price reflected Chinese market values.

13 On 14 and 15 November 2011, the Commission carried out a verification visit at the applicant’s premises.

14 On 1 February 2012, the Commission sent its MET disclosure to the applicant, informing the latter that that claim had been refused and stating the essential facts and considerations upon which that refusal was founded. In particular, the disclosure stated that, according to the applicant, the benzene that it used was produced from coke and not from petroleum. The disclosure also pointed out that benzene accounted for the vast majority of the cost of the raw materials, which in turn represented almost half of the production cost of tartaric acid. Therefore, according to the disclosure, any distortion in the price of benzene had a significant impact on the production cost of tartaric acid in the People’s Republic of China. Lastly, the disclosure stated that the price of benzene in the People’s Republic of China was between 19% and 51% lower than in Europe and the United States.

15 On 13 February 2012, the applicant sent to the Commission its comments on the disclosure mentioned in paragraph 14 above, claiming inter alia that the 40% duty levied on benzene exports had been replaced by a temporary duty of 0%. Furthermore, the applicant stressed that the benzene that it used was produced from coke and that, therefore, the Commission’s comparison of benzene prices was incorrect, since benzene was produced from petroleum in Europe and the United States.

16 On 11 April 2012, the Commission sent to the applicant the final disclosure document containing the essential facts and considerations on the basis of which it intended to recommend that the anti-dumping measures in force be modified, in accordance with Article 20 of the basic regulation, as well as a document giving details on the calculation of the applicant’s dumping margin. In particular, the disclosure document stated that the 40% duty on benzene exports had been replaced by a temporary duty of 0%. However, it concluded that the applicant had been unable to explain the low price of benzene on the Chinese market. In that regard, the final disclosure document noted that there was a difference of between 19% and 51% in the price of benzene between the People’s Republic of China and other market economy countries, as well as the absence of a refund of the 17% Value Added Tax (VAT) on benzene exports.

17 On 16 April 2012, the Council adopted Implementing Regulation (EU) No 349/2012 imposing a definitive anti-dumping duty on imports of tartaric acid originating in the People’s Republic of China, following an expiry review pursuant to Article 11(2) of the basic regulation (OJ 2012, L 110, p. 3).

18 On 25 April 2012, the applicant sent its comments on the final disclosure document to the Commission, requesting in particular that the latter provide additional information as regards the methodology used to construct the normal value. Furthermore, on the same day, the applicant sent an offer of a price undertaking intended to eliminate dumping, in accordance with Article 8 of the basic regulation.

19 Following the partial interim review procedure concerning the applicant and one other exporting producer, on 26 June 2012 the Council adopted Implementing Regulation (EU) No 626/2012 amending Implementing Regulation No 349/2012 (OJ 2012 L 182, p. 1; ‘the contested regulation’).

20 In essence, the contested regulation refuses to grant MET to the applicant and, having constructed the normal value on the basis of information provided by a cooperating producer in the analogue...