Judgments nº T-586/14 RENV of Tribunal General de la Unión Europea, September 24, 2019

• Resolution Date: September 24, 2019
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-586/14 RENV

(Dumping - Imports of solar glass originating in China - Article 2(7)(b) and (c) of Regulation (EC) No 1225/2009 (now Article 2(7)(b) and (c) of Regulation (EU) 2016/1036) - Market economy treatment - Concept of ‘significant distortion in the production costs and financial situation of firms’ - Tax incentives - Manifest error of assessment)

In Case T-586/14 RENV,

Xinyi PV Products (Anhui) Holdings Ltd, established in Anhui (China), represented by Y. Melin, lawyer,

applicant,

v

European Commission, represented by L. Flynn and T. Maxian Rusche, acting as Agents,

defendant,

supported by

GMB Glasmanufaktur Brandenburg GmbH, established in Tschernitz (Germany), represented by R. MacLean, Solicitor,

intervener,

APPLICATION under Article 263 TFEU for annulment of Commission Implementing Regulation (EU) No 470/2014 of 13 May 2014 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of solar glass originating in the People’s Republic of China (OJ 2014 L 142, p. 1; corrigendum OJ 2014 L 253, p. 4),

THE GENERAL COURT (Fifth Chamber),

composed of D. Gratsias, President, I. Labucka (Rapporteur) and I. Ulloa Rubio, Judges,

Registrar: F. Oller, Administrator,

having regard to the written part of the procedure and further to the hearing on 16 January 2019,

gives the following

Judgment

Background to the dispute

1 The applicant, Xinyi PV Products (Anhui) Holdings Ltd, is a company established in China which manufactures there and exports to the European Union solar glass covered by Commission Implementing Regulation (EU) No 470/2014 of 13 May 2014 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of solar glass originating in the People’s Republic of China (OJ 2014 L 142, p. 1; corrigendum OJ 2014 L 253, p. 4) (‘the contested regulation’).

2 The applicant’s sole shareholder is the company Xinyi Solar (Hong Kong) Ltd, established in Hong Kong (China), which is listed on the Hong Kong Stock Exchange.

3 In the context of the procedure leading to the adoption of the contested regulation, on 21 May 2013 the applicant submitted a request - on the basis 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’) (replaced by Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ 2016 L 176, p. 21)) - for the purposes of claiming market economy treatment (‘MET’), as provided for in Article 2(7)(b) and (c) of the basic regulation (now Article 2(7)(b) and (c) of Regulation 2016/1036).

4 On 6 June 2013, the applicant lodged its replies to the European Commission’s anti-dumping questionnaire.

5 On 21 June 2013, the applicant replied to the Commission’s request for additional information.

6 The information provided by the applicant in the application form for MET and its replies to the Commission’s questionnaire were verified at the applicant’s Chinese headquarters between 21 and 26 June 2013.

7 At the end of June and in July 2013, the applicant produced additional information in agreement with the Commission and in accordance with the latter’s requests.

8 By letter of 22 August 2013, the Commission informed the applicant that it took the view that it could not grant its request for MET on the sole ground that it did not satisfy the third indent of Article 2(7)(c) of the basic regulation (‘the letter of 22 August 2013’). The Commission invited the applicant to submit its observations, although it considered by contrast that the applicant met the other conditions set out in the first, second, fourth and fifth indents of Article 2(7)(c) of that regulation.

9 On 1 September 2013, the applicant submitted its observations challenging the Commission’s findings.

10 By letter of 13 September 2013, the Commission responded to those observations in its final decision on the MET request (‘the letter of 13 September 2013’) which confirmed the rejection of the applicant’s MET request.

11 On 26 November 2013, the Commission adopted Regulation (EU) No 1205/2013 imposing a provisional anti-dumping duty on imports of solar glass from the People’s Republic of China (OJ 2013 L 316, p. 8; ‘the provisional regulation’).

12 Recitals 34 to 47 of the provisional regulation, concerning ‘market economy treatment (“MET”)’, are worded as follows:

‘(34) Pursuant to Article 2(7)(b) of the basic regulation, in anti-dumping investigations concerning imports from [China], normal value shall be determined in accordance with Article 2(1) to (6) of the basic regulation for those exporting producers which were found to meet the criteria laid down in Article 2(7)(c) of the basic regulation.

(35) Briefly, and for ease of reference only, these criteria are set out below:

(1) business decisions are made in response to market conditions and without significant State interference, and costs reflect market values;

(2) firms have one clear set of basic accounting records, which are independently audited, in line with international accounting standards and applied for all purposes;

(3) there are no significant distortions carried over from the former non-market economy system;

(4) legal certainty and stability is provided by bankruptcy and property laws; and

(5) currency exchanges are carried out at the market rate.

(36) Ten cooperating companies requested MET pursuant to Article 2(7)(b) of the basic regulation and replied to the MET claim form within the given deadlines. Pursuant to Article 2(7)(d) of the basic regulation, a[n] MET verification was carried out to the companies which were included in the sample [, including the applicant].

(37) It follows that a[n] MET determination was made in respect of the following four companies or groups of companies:

- Sampled companies:

- ...;

- [the applicant] and Xinyi Solar (Hong Kong) …;

- …

- Company subject to individual examination:

- ...

(38) The Commission sought all the information deemed necessary and verified all the information submitted in the MET claims at the premises of the companies in question.

(39) In case of related parties, the Commission shall examine whether the group of the related companies as a whole fulfils the conditions for MET. Therefore, in cases where a subsidiary or any other company related to the applicant in [China] is involved, directly or indirectly, in the production or sales of the product concerned, the MET examination is carried out in respect of each company individually as well as to the group of companies as a whole.

(40) Accordingly, the MET claims of four exporting producers (groups of companies), comprised of 11 legal entities, were investigated.

(41) The investigation established that all four exporting producers (groups of companies) claiming MET failed to demonstrate that they fulfilled all of the criteria laid down in Article 2(7)(c) of the basic regulation.

(42) ...

(43) [A]ll four exporting producers, either individually or as a group, failed to demonstrate that they were not to subject to significant distortions carried over from the non-market economy system. Accordingly, these companies, or group of companies, did not fulfil MET criterion 3. More specifically, all four exporting producers, or groups of exporting producers, benefited from preferential tax regimes.

(44) ...

(45) The Commission disclosed the results of the MET investigation to the companies concerned, the [Chinese] authorities … and the complainant and invited them to comment.

(46) The comments received were not such as to alter the Commission’s preliminary findings. After having consulted the Member States in accordance with Article 2(7)(c), all applicants were individually and formally notified, on 13 September 2013, of the Commission’s final determination with regard to their respective MET claim.

(47) Accordingly, [none] of the four cooperating exporting producers or groups of exporting producers in [China] that had requested MET could show that they fulfilled all the criteria set out in Article 2(7)(c) of the basic regulation and their MET claims were therefore...