European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Prices used as basis to the normal value must be charged in the ordinary course of trade by independent customers. The concept of ordinary course of trade is negatively defined in Article 2 of the anti-dumping regulation. Are therefore excluded transactions between parties which are associated  or having a compensatory arrangement with each other , unless the price is not affected by the relations …

Ordinary course of trade

Prices used as basis to the normal value must be charged in the ordinary course of trade by independent customers. The concept of ordinary course of trade is negatively defined in Article 2 of the anti-dumping regulation. Are therefore excluded transactions between parties which are associated  or having a compensatory arrangement with each other , unless the price is not affected by the relationship . Parties are associated within the meaning of the anti-dumping regulation where they fall within the concept of related parties in Article 127 of Regulation No 2015/2447 . There is no independence where the distributor is subject to the de facto control of a manufacturer by reason of his capacity as clear majority shareholder  or where the various companies of a same group constitute a single economic entity . However, the existence of a single economic entity can be found only if the functions carried out by the related trader are similar to those of an internal sales department . Where there is no independence, the normal value should be established on the basis of the prices at which the product is first resold to an independent customer . The refusal to exclude the prices of sales made using compensation from the determination of normal value must include adequate statement of the reasons for that refusal .

Sales at a loss are in principle included in the determination of the normal value. However, sales at prices below production cost are not considered as having taken place in the ordinary course of trade where they are made in substantial quantities over an extended period  and at prices which do not make it possible to cover all the costs within a reasonable time-period. The concept of “extended period” usually corresponds to one year or at least six months. Sales are made in substantial quantities when the weighted average selling price is below the weighted average unit cost, or where the volume of sales below unit cost is not less than 20% of sales being used to determine normal value . For product types where at least 10%, but not more than 80%, by volume of sales on the domestic market were not below unit production costs, normal value, by product type, is calculated as the weighted average of domestic prices which are found equal to or above unit costs only, of the type in question . For product types where more than 80% by volume of sales on the domestic market were at prices equal to or above unit production costs and where the weighted average sales price was equal to or higher than the weighted average production cost, normal value, by product type, is calculated as the weighted average of all domestic sales prices of the type in question . If prices are above weighted average costs for the period of investigation, they are considered to provide for recovery of costs within a reasonable period of time .

Lastly, where domestic prices have been fixed by governmental authorities, their artificiality prevents them from being considered as made in the ordinary course of trade  and justifies the application of constructed value , unless it is established that the price is fixed according to competition and market conditions .

See, for an example: Case C-105/90 Goldstar v Council [1992] ECR I-677, LawLex200900000330JBJ.

See for an application, Case C-105/90 Goldstar v Council [1992] ECR I-677, LawLex200900000330JBJ.

Case T-33/98 Petrotub and Republica v Council [1999] ECR II-3837, LawLex200900001349JBJ.

Commission Regulation (EC) No 2479/2001 of 17 December 2001, imports of recordable compact disks (Taiwan), LawLex200900002827JBJ.

Regulation No 2016/1036, Article 2(4) paragraph 2.

Commission Regulation (EC) No 2818/91 of 23 September 1991, imports of cotton yarn (Brazil, Egypt, Turkey, India, Thailand), LawLex200900002719JBJ; No 2835/91 of 23 September 1991, imports of urea (Venezuela, Trinidad, Tobago), LawLex200900002434JBJ.

Commission Regulation (EC) No 2818/91 of 23 September 1991, imports of cotton yarn (Brazil, Egypt, Turkey, India, Thailand), LawLex200900002719JBJ; Council Regulation (EU) No 2835/91 of 23 September 1991, imports of urea (Venezuela, Trinidad, Tobago), LawLex200900002434JBJ.

Commission Decision (EC) No 83/360 of 18 July 1983, imports of certain pears in syrup (Australia, China, South Africa), LawLex201100000557JBJ.

Regulation No 2016/1036, Article 2(1) paragraph 3. See for an application, Case C-76/00 P Petrotub and Republica v Council [2003] ECR I-79, LawLex200900001167JBJ, for compensatory sales.

Commission Regulation No 2015/2447 of 24 November 2015 laying down provisions for the implementation of the Union Customs Code, OJ L 343 of 29 December 2015, 1, Article 127: "For the purposes of this Chapter, two persons shall be deemed to be related if one of the following conditions is fulfilled:(a) they are officers or directors of the other person’s business; (b) they are legally recognized partners in business; (c) they are employer and employee; (d) a third party directly or indirectly owns or controls or holds 5% or more of the outstanding voting stock or shares of both of them; (e) one of them directly or indirectly controls the other;(f) both of them are directly or indirectly controlled by a third person; (g) together they control a third person directly or indirectly; (h) they are members of the same family. 2. Persons who are associated in business with one another in that one is the sole agent, sole distributor or sole concessionaire, however described, of the other shall be deemed to be related only if they fall within the criteria referred to in paragraph 1.3. For the purposes of paragraph 1(e),(f) and (g) one person is deemed to control another when the former is legally or operationally in a position to exercise direction over the latter.

Commission Regulation (EC) No 3643/84 of 20 December 1984, imports of electronic typewriters (Japan), LawLex200900002659JBJ; Case 277/85 Canon v Council [1988] ECR 5731, LawLex200900002332JBJ.

Case C-175/87 Matsushita v Council [1992] ECR I-1409, LawLex200900000739JBJ, stating that the division of production and sales activities between legally distinct companies belonging to a same group does not preclude from identifying a single economic entity, including where the producer performs certain sales functions itself; C-171/87 Canon v Council [1992] ECR I-1237, LawLex200900000715JBJ, regarding a producer which has financial control of a distribution company for its products in the country concerned and which entrusts to it tasks which are normally the responsibility of an internal sales department of its organization.

Case T-26/12 PT Perindustrain dan Perdagangan Musim Semi Mas, Judgment of 25 June 2014, LawLex200900001349JBJ.

Case 277/85 Canon v Council [1988] ECR 5731, LawLex200900002332JBJ; C-171/87 Canon v Council [1992] ECR I-1237, LawLex200900000715JBJ; C-175/87 Matsushita v Council [1992] ECR I-1409, LawLex200900000739JBJ; Commission Regulation (EC) No 2318/95 of 27 September 1995, on imports of certain tube or pipe fittings, of iron or steel (China, Croatia, Thailand, the Slovak Republic, Taiwan), LawLex200900002762JBJ; Council Regulation (EU) No 393/98 of 16 February 1998, imports of stainless steel fasteners and parts thereof (China, India, Korea, Malaysia, Taiwan, Thailand), LawLex200900002464JBJ.

Case C-76/00 P Petrotub and Republica v Council [2003] ECR I-79, LawLex200900001167JBJ.

Case T-33/98 Petrotub and Republica v Council [1999] ECR II-3837, LawLex200900001349JBJ, which considers that sales at prices below unit production cost are considered to be made in substantial quantities where one of the two criteria set forth in Article 2(4)(3) of the anti-dumping regulation is fulfilled: weighted average selling price lower than the weighted average unit cost or volume of sales at prices below unit cost equal to or greater than 20% of the sales used to determine normal value.

European Business Law

402. Ordinary course of trade

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

402. Ordinary course of trade

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise