Judgments nº T-211/16 of Tribunal General de la Unión Europea, March 15, 2018

• Resolution Date: March 15, 2018
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-211/16

(Dumping - Imports of tartaric acid originating in China and produced by Hangzhou Bioking Biochemical Engineering Co., Ltd - Implementing Decision (EU) 2016/176 - Non-imposition of a definitive anti-dumping duty - Article 3(2), (3) and (5) and Article 17(1) and (2) of Regulation (EC) No 1225/2009 - Sampling - No material injury - Manifest error of assessment - Determination of injury - Profitability of the Union industry)

In Case T-211/16,

Caviro Distillerie Srl, established in Faenza (Italy),

Distillerie Bonollo SpA, established in Formigine (Italy),

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

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

represented by A. Bochon, lawyer, and R. MacLean, Solicitor,

applicants,

v

European Commission, represented by J.-F. Brakeland and A. Demeneix, acting as Agents,

defendant,

ACTION under Article 263 TFEU seeking annulment of Article 1 of Commission Implementing Decision (EU) 2016/176 of 9 February 2016 terminating the anti-dumping proceeding concerning imports of tartaric acid originating in the People’s Republic of China and produced by Hangzhou Bioking Biochemical Engineering Co., Ltd (OJ 2016 L 33, p. 14),

THE GENERAL COURT (Ninth Chamber),

composed of S. Gervasoni, President, L. Madise and R. da Silva Passos (Rapporteur), Judges,

Registrar: C. Heeren, Administrator,

having regard to the written part of the procedure and further to the hearing on 28 September 2017,

gives the following

Judgment

Background to the dispute

1 The applicants, Caviro Distillerie Srl, Distillerie Bonollo SpA, Distillerie Mazzari SpA and Industria Chimica Valenzana (ICV) SpA, are EU producers of tartaric acid representing more than 25% of the total production of that substance.

2 On 30 October 2004 the European Commission published in the Official Journal of the European Union a 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). That proceeding led to the adoption of Council Regulation (EC) No 130/2006 of 23 January 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). Under Article 1(1) and (2) of that regulation, a definitive anti-dumping duty was imposed on imports of tartaric acid falling within CN code ex 2918 12 00 (TARIC code 2918 12 00 90) originating in China, providing for a rate between 0% and 34.9%. The regulation granted Hangzhou Bioking Biochemical Engineering Co., Ltd (‘Hangzhou Bioking’) market economy treatment. A zero duty rate was applied to imports of tartaric acid produced by Hangzhou Bioking.

3 In line with the report from the Appellate Body of the World Trade Organisation (WTO) entitled ‘Mexico - Definitive Anti-dumping Measures on Beef and Rice’ (WT/DS295/AB/R, 29 November 2005, AB-2005-6), Council Implementing Regulation (EU) No 332/2012 of 13 April 2012 amending Regulation No 130/2006 (OJ 2012 L 108, p. 1) excluded Hangzhou Bioking from the definitive measures imposed by Regulation No 130/2006 and, in particular, from subsequent reviews of those measures.

4 The original measures mentioned in paragraph 2 above were subsequently subject to various reviews, the last of which resulted in Council Implementing Regulation (EU) No 349/2012 of 16 April 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 Regulation (EC) No 1225/2009 (OJ 2012 L 110, p. 3). That implementing regulation maintained all anti-dumping measures against all Chinese importers with the exception of Hangzhou Bioking.

5 On 15 June 2011 the applicants and a fifth undertaking, Comercial Quimica Sarasa, SL, lodged an anti-dumping complaint under Article 5 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’) relating solely to imports of tartaric acid produced by Hangzhou Bioking. On 29 July 2011 the Commission published in the Official Journal of the European Union a notice of initiation of an anti-dumping proceeding concerning imports of tartaric acid originating in the People’s Republic of China, limited to one Chinese exporting producer, Hangzhou Bioking (OJ 2011 C 223, p. 11). Following withdrawal of the complaint, the Commission, by Decision 2012/289/EU of 4 June 2012 terminating the anti-dumping proceeding concerning imports of tartaric acid originating in the People’s Republic of China, limited to one Chinese exporting producer, Hangzhou Bioking (OJ 2012 L 144, p. 43), terminated the proceeding without imposing anti-dumping measures.

6 In parallel, on 29 July 2011 - at the request of the same five complainants - the Commission opened another investigation into two Chinese producers of tartaric acid for the purpose of a partial interim review under Article 11(3) of the basic regulation relating to the dumping margins of those two producers, which the complainants considered to be too low (OJ 2011 C 223, p. 16).

7 On 21 October 2014 the applicants lodged another anti-dumping complaint with the Commission, in consequence of which, on 4 December 2014, that institution published in the Official Journal of the European Union a notice of initiation of an anti-dumping proceeding concerning imports of tartaric acid originating in the People’s Republic of China, limited to one Chinese exporting producer, Hangzhou Bioking (OJ 2014 C 434, p. 9).

8 For the purpose of assessing the dumping and injury, the Commission examined the period from 1 October 2013 to 30 September 2014 (‘the investigation period’). With respect to the trends relevant for the injury assessment, the Commission analysed data covering the period from 1 January 2011 to 30 September 2014 (‘the period considered’).

9 In the notice of initiation of 4 December 2014, the Commission stated that it had selected a provisional sample of EU producers, in accordance with Article 17 of the basic regulation. At a later stage, the Commission explained that the sample in question had been selected on the basis of the highest sales volumes in the European Union and consisted of three EU producers, selected from the seven undertakings which had taken part in the investigation, representing 56% of the total production of tartaric acid in the European Union and located in Italy and Spain: the two Member States where the EU producers were established. The three producers included in the provisional sample were two of the applicants, namely Caviro Distillerie and Distillerie Mazzari, established in Italy, and a Spanish company, Comercial Quimica Sarasa.

10 Since ICV was not included in the provisional sample, it claimed that that sample did not sufficiently represent the situation of small EU producers. The Italian trade association Associazione Nazionale Industriali Distillatori di Alcoli e Acquaviti (National Association of Industrial Distillers of Alcohol and Spirits) (AssoDistil), also objected to the composition of that sample. The Commission nonetheless took the view that since EU producers of tartaric acid are all small and medium-sized enterprises, the addition of one small EU producer to the sample would not fundamentally change its representativeness and would not have any significant impact on the injury indicators examined on the basis of the data from the sample. It considered that, in any event, the macroeconomic indicators, such as sales volume, were based on data from the Union industry as a whole, that is to say, all EU producers, including the EU producer in question. The Commission therefore confirmed the sample that it had provisionally selected.

11 During the investigation, the three companies included in the sample were subject to verification visits at their premises, as was Hangzhou Bioking.

12 On 14 December 2015 the Commission sent the applicants a general disclosure document in which it concluded that, despite the existence of a dumping margin of 42.8%, the imports from Hangzhou Bioking were not causing material injury to the Union industry. By letter of 4 January 2016, the applicants submitted their observations on that document. They also requested a hearing, which took place on 13 January 2016.

13 Following the dumping investigation, the Commission adopted Implementing Decision (EU) 2016/176 of 9 February 2016 terminating the anti-dumping proceeding concerning imports of tartaric acid originating in the People’s Republic of China and produced by Hangzhou Bioking (OJ 2016 L 33, p. 14) (‘the contested decision’), in which it concluded that the Union industry had not suffered any material injury within the meaning of Article 3 of the basic regulation.

14 Indeed, in recitals 140 and 141 of the contested decision, the Commission observed that injury indicators such as production, sales volume and market share showed negative trends during the period considered, but that those trends had not had a negative impact on the overall financial situation of the Union industry. The Commission considered that, on the contrary, some indicators such as the Union industry’s profitability, cash flow, return on investment and employment had displayed a positive trend during the period considered. The Commission emphasised that, while recognising that the Union industry had, to a certain extent, been negatively impacted by the dumped imports from Hangzhou Bioking, the investigation had not established that the Union industry had suffered material injury within the meaning of Article 3 of the basic regulation. Consequently, by Article 1 of the contested decision the Commission terminated the anti-dumping proceeding concerning imports into the European Union of tartaric acid produced...