Judgments nº T-409/06 of The General Court, March 04, 2010

• Resolution Date: March 04, 2010
• Issuing Organization: The General Court
• Decision Number: T-409/06

In Case T‑409/06,

Sun Sang Kong Yuen Shoes Factory (Hui Yang) Corp. Ltd, established in Hui Yang City (China), represented by I. MacVay, Solicitor, R. Thompson QC, and K. Beal, Barrister,

applicant,

v

Council of the European Union, represented by J.-P. Hix, acting as Agent, and by G. Berrisch, lawyer,

defendant,

supported by

European Commission, represented by H. van Vliet and T. Scharf, acting as Agents,

by

Confédération européenne de l’industrie de la chaussure (CEC), established in Brussels, represented initially by P. Vlaemminck, G. Zonnekeyn and S. Verhulst, and then by P. Vlaemminck and A. Hubert, lawyers,

and by

BA.LA. di Lanciotti Vittorio & C. Sas, established in Monte Urano (Italy), and the 16 other interveners listed in the annex, represented by G. Celona, P. Tabellini and C. Cavaliere, lawyers,

interveners,

APPLICATION for partial annulment of Council Regulation (EC) No 1472/2006 of 5 October 2006 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain footwear with uppers of leather originating in the People’s Republic of China and Vietnam (OJ 2006 L 275, p. 1), in so far as it concerns the applicant,

THE GENERAL COURT (Eighth Chamber),

composed of M.E. Martins Ribeiro, President, S. Papasavvas (Rapporteur) and A. Dittrich, Judges,

Registrar: C. Kantza, Administrator,

having regard to the written procedure and further to the hearing on 18 February 2009,

gives the following

Judgment

Legal context

1 Article 1(1), (2) and (4) of Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1), as amended (‘the basic regulation’), provides:

‘1. An anti-dumping duty may be applied to any dumped product whose release for free circulation in the Community causes injury.

2. A product is to be considered as being dumped if its export price to the Community is less than a comparable price for the like product, in the ordinary course of trade, as established for the exporting country.

…

4. For the purpose of this Regulation, the term “like product” shall be interpreted to mean a product which is identical, that is to say, alike in all respects, to the product under consideration, or in the absence of such a product, another product which although not alike in all respects, has characteristics closely resembling those of the product under consideration.’

2 The first subparagraph of Article 2(1) of the basic regulation provides that ‘[t]he normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’.

3 As regards the conditions for the grant of market economy treatment (‘MET’), Article 2(7)(b) of the basic regulation provides:

‘In anti-dumping investigations concerning imports from ... the People’s Republic of China ..., normal value will be determined in accordance with paragraphs 1 to 6, if it is shown, on the basis of properly substantiated claims by one or more producers subject to the investigation ... that market economy conditions prevail for this producer or producers in respect of the manufacture and sale of the like product concerned. When this is not the case, the rules set out under subparagraph (a) shall apply.’

4 According to Article 2(7)(c) of the basic regulation:

‘A claim under [Article 2(7)(b)] must be made in writing and contain sufficient evidence that the producer operates under market economy conditions, that is if:

– decisions of firms regarding prices, costs and inputs, including for instance raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand, and without significant State interference in this regard, and costs of major inputs substantially reflect market values,

…

A determination whether the producer meets the abovementioned criteria shall be made within three months of the initiation of the investigation, after specific consultation of the Advisory Committee and after the Community industry has been given an opportunity to comment. This determination shall remain in force throughout the investigation.’

5 Under the second subparagraph of Article 9(5) and Article 9(6) of the basic regulation:

‘5. …

Where Article 2(7)(a) applies, an individual duty shall, however, be specified for the exporters which can demonstrate, on the basis of properly substantiated claims that:

(a) in the case of wholly or partly foreign owned firms or joint ventures, exporters are free to repatriate capital and profits;

(b) export prices and quantities, and conditions and terms of sale are freely determined;

(c) the majority of the shares belong to private persons. State officials appearing on the board of Directors or holding key management positions shall either be in minority or it must be demonstrated that the company is nonetheless sufficiently independent from State interference;

(d) exchange rate conversions are carried out at the market rate, and

(e) State interference is not such as to permit circumvention of measures if individual exporters are given different rates of duty.

6. When the Commission has limited its examination in accordance with Article 17, any anti-dumping duty applied to imports from exporters or producers which have made themselves known in accordance with Article 17 but were not included in the examination shall not exceed the weighted average margin of dumping established for the parties in the sample … Individual duties shall be applied to imports from any exporter or producer which is granted individual treatment, as provided for in Article 17.’

6 Article 2(8) and the first subparagraph of Article 2(9) of the basic regulation provide:

‘8. The export price shall be the price actually paid or payable for the product when sold for export from the exporting country to the Community.

9. In cases where there is no export price ... , the export price may be constructed on the basis of the price at which the imported products are first resold to an independent buyer, or, if the products are not resold to an independent buyer, or are not resold in the condition in which they were imported, on any reasonable basis.’

7 The first subparagraph of Article 2(10) of the basic regulation provides:

‘10. A fair comparison shall be made between the export price and the normal value. This comparison shall be made at the same level of trade and in respect of sales made at as nearly as possible the same time and with due account taken of other differences which affect price comparability. Where the normal value and the export price as established are not on such a comparable basis, due allowance, in the form of adjustments, shall be made in each case, on its merits, for differences in factors which are claimed, and demonstrated, to affect prices and price comparability …’

8 According to Article 2(11) of the basic regulation:

‘Subject to the relevant provision governing fair comparison, the existence of margins of dumping during the investigation period shall normally be established on the basis of a comparison of a weighted average normal value with a weighted average of prices of all export transactions to the Community, or by a comparison of individual normal values and individual export prices to the Community on a transaction-to-transaction basis. However, a normal value established on a weighted average basis may be compared to prices of all individual export transactions to the Community, if there is a pattern of export prices which differs significantly among different purchasers, regions or time periods, and if the methods specified in the first sentence of this paragraph would not reflect the full degree of dumping being practised. This paragraph shall not preclude the use of sampling in accordance with Article 17.’

9 As regards the determination of injury, Article 3(2), (3) and (6) of the basic regulation provides:

‘2. A determination of injury shall be based on positive evidence and shall involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the Community market for like products; and (b) the consequent impact of those imports on the Community industry.

3. … With regard to the effect of the dumped imports on prices, consideration shall be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product of the Community industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree. No one or more of these factors can necessarily give decisive guidance.

…

6. It must be demonstrated, from all the relevant evidence presented in relation to paragraph 2, that the dumped imports are causing injury within the meaning of this Regulation. Specifically, this shall entail a demonstration that the volume and/or price levels identified pursuant to paragraph 3 are responsible for an impact on the Community industry as provided for in paragraph 5, and that this impact exists to a degree which enables it to be classified as material.’

10 According to the final sentence of Article 9(4) of the basic regulation, ‘[t]he amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the Community industry’.

11 As regards the sampling technique, Article 17(1) and (3) of the basic regulation provides:

‘1. In cases where the number of complainants, exporters or importers, types of product or transactions is large, the investigation may be limited to a reasonable number of parties, products or transactions by using samples which are statistically valid on the basis of the...