Ajinomoto and The NutraSweet Company v Council: ECFI 18 Dec 1997

ECJ 1 Common commercial policy – Protection against dumping – Anti-dumping procedure – Right to a fair hearing of the undertaking alleged to have engaged in dumping – Institutions’ duty to provide information – Scope
(Council Regulation No 2423/88, Art. 7(4))
2 Actions for annulment – Pleas in law – Actions against a Council regulation imposing definitive anti-dumping duties – Consideration to be given to a defect vitiating the procedure for the adoption of the Commission regulation imposing provisional anti-dumping duties – Criteria
(Council Regulation No 2423/88, Art. 7(4))
3 Common commercial policy – Protection against dumping – Dumping margin – Determination of normal value – Price charged in normal commercial transactions – Product protected by a patent – Consideration to be given to the market structure or the level of competition in the country of export – None
(Council Regulation No 2423/88, Art. 2(3))
4 Acts of the institutions – Statement of reasons – Obligation – Scope
(EC Treaty, Art. 190)
5 Common commercial policy – Protection against dumping – Imposition of anti-dumping duties – Criteria – Injury and causal link – Community industry at the start-up stage also faced with problems not connected with dumping – Method of calculating duty – Discretion of the institutions
(Council Regulation No 2423/88, Arts 2(4), 4 and 13)
6 Common commercial policy – Protection against dumping – Dumping margin – Determination of normal value – Product exported to the Community from an intermediate country
(Council Regulation No 2423/88, Art. 2(6))

7 It is a fundamental principle of Community law that the right to a fair hearing must be respected. In the field of protection against dumped imports, that right is specified in Article 7(1) and (4) of the basic anti-dumping regulation, Regulation No 2423/88, as a right to information which must be reconciled with the Community institutions’ obligation to maintain the confidentiality of business secrets.
In that regard, the undertakings concerned should have been placed in a position during the administrative procedure in which they could effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence relied on by the Commission in support of its allegation concerning the existence of dumping and the resultant injury, not later than during the procedure for the adoption of the Council regulation.
Since Article 7(4)(c)(i) of the basic anti-dumping regulation provides that requests for information made pursuant to Article 7(4)(b) must be in writing and must specify the particular issues on which information is sought, the sufficiency of the information provided by the Community institutions must be assessed in relation to how specific the request for information was. For the purposes of determining whether the Community institutions have fulfilled their obligation to provide information, regard must be had, in the circumstances of the case, to the special characteristics of the market, the knowledge of that market which the undertakings concerned possess and their ability, on the basis of that knowledge, to request such relevant details as they may require.
8 Where, in the procedure leading to the adoption of a regulation imposing provisional anti-dumping duties, the Commission fails to respect the right to a fair hearing of the undertakings alleged to have engaged in the dumping, that failure cannot in itself have the effect of vitiating the Council regulation imposing definitive duties. Such a regulation is distinct from the regulation imposing provisional duties, even if it is so closely connected with the latter that it may, in certain circumstances, take its place; consequently, its validity must be assessed in relation to the rules applying at the time of its adoption. Where, in the course of the procedure leading to the adoption of a regulation imposing a definitive duty, steps are taken to remedy a defect vitiating the adoption of the corresponding regulation imposing a provisional duty, the illegality of the provisional regulation does not render the definitive regulation illegal. Only in so far as the defect has not been remedied, and in so far as the definitive regulation refers to the provisional regulation, will the illegality of the earlier regulation render the later one illegal.
9 There is nothing in the wording of the basic anti-dumping regulation which indicates that the imposition of anti-dumping duties is dependent on any factor other than an injurious price differentiation as between the prices charged in the domestic market and those charged in the export market.
The criteria of the market structure or the level of competition are not in themselves decisive for the purposes of applying a constructed normal value rather than a normal value based on actual prices, where the latter are the result of market forces. Consequently, in determining the normal value of the dumped product on the basis of the prices charged in the country of export, where that product is protected by a patent, the Community institutions did not commit an error of law or a manifest error of assessment of the facts.
10 The statement of reasons required by Article 190 of the Treaty must disclose in a clear and unequivocal fashion the reasoning followed by the Community authority which adopted the measure in question in such a way as to make the persons concerned aware of the reasons for the measure and thus enable them to defend their rights, and to enable the Community judicature to exercise its power of review.
11 The fact that a Community producer is facing difficulties, whether or not attributable in part to causes other than dumping, is not a reason for depriving that producer of all protection against the injury caused by the dumping. It follows that the imposition of an anti-dumping duty cannot be contested on the ground that the difficulties faced by the Community industry are due in part to the fact that that industry is at the start-up stage.
Nor can it be claimed that the Community institutions exceeded their discretion by determining the reference price, that is to say, the minimum price at which the product must be imported into the Community if the Community industry is not to suffer injury, and the amount of the anti-dumping duty on the basis of the Community producer’s production costs during the start-up phase, even where those costs are approximately twice as high as those of the exporting undertakings.
12 Where a product is not imported directly from the country of origin but is exported to the Community from an intermediate country, Article 2(6) of the basic anti-dumping regulation confers on the Community institutions a wide margin of appreciation as to whether to use either the price paid or payable on the market of the country of export or the price paid or payable on the market of the country of origin, provided that the price used is comparable.
In that regard, the criteria which allow the Community institutions, pursuant to that provision, to use the prices prevailing in the country of origin are not fulfilled where the dumped product was not merely transhipped through an intermediate country prior to being imported into the Community but was sold to an economic operator in that intermediate country and was partly transformed and repackaged.

Judges:

R. Garcia-Valdecasas, P

Citations:

T-159/94, [1997] EUECJ T-159/94

Links:

Bailii

European, Commercial, Natural Justice

Updated: 06 June 2022; Ref: scu.172847