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

Like the SG&A expenses, the reasonable profit margin is calculated on the basis of actual data regarding domestic sales of the like product made in the ordinary course of trade, whether exported or not to the Union . When the amounts corresponding to profits cannot be determined on this basis, they may be determined on the basis of:
"a) the weighted average of the actual amounts determined for oth …

Reasonable profit margin

Like the SG&A expenses, the reasonable profit margin is calculated on the basis of actual data regarding domestic sales of the like product made in the ordinary course of trade, whether exported or not to the Union . When the amounts corresponding to profits cannot be determined on this basis, they may be determined on the basis of:

"a) the weighted average of the actual amounts determined for other exporters or producers subject to investigation in respect of production and sales of the like product in the domestic market of the country of origin;

b) the actual amounts applicable to production and sales, in the ordinary course of trade, of the same general category of products for the exporter or producer in question in the domestic market of the country of origin;

c) any other reasonable method, provided that the amount for profit so established shall not exceed the profit normally realized by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin" .

The profit normally realized is the criterion usually retained to define a reasonable profit . To be used to construct normal value, a producer's profit margin is reliable if the profit is realized on a sufficiently large and representative number of its domestic sales, i.e. at least 10% of the total domestic sales volume of the like product compared with the volume of sales for export to the Union . Where the volume is not representative, the weighted average profit margin of other companies with sufficient sales in the ordinary course of trade in the country concerned is used . Products must be like products but they do not have to be exported to the Union . 

Where there is no appropriate information on a normal profit realized on the domestic market of the country of origin, the profit is determined on any reasonable basis . This is the case for the profit margin established for profitable sales on the domestic market in another country, where that market is the only market covered by the on-going procedure for which profitable sales of similar products were made in representative quantities  or the profit incurred in domestic sales by companies of a third country producing and selling the same general category of products in the recent past, given the fact that the production and sales structure are similar .

In order to establish valid comparison, it may be necessary to take account of the nature of domestic sales in relation to export sales. Thus, where domestic sales are mainly intended for manufacturers and export sales for distributors, the significant difference in prices and quantities entails determination of the profit margin to be added to the cost of production by reference to the level of profit made on sales on the domestic market to independent distributors .

Council Regulation (EU) No 1992/2000 of 18 September 2000, imports of polyester textured filament yarn (Malaysia), LawLex200900002573JBJ.

Council Regulation (EU) No 1698/85 of 19 June 1985, imports of electronic typewriters originating in Japan, LawLex200900002372JBJ.

Case T-118/96 Thai Bicycle Industry v Council [1998] ECR II-2991, LawLex200900001225JBJ; See also Commission Regulation (EC) No 2208/96 of 18 November 1996, imports of unbleached (grey) cotton fabrics (China, Egypt, India, Indonesia, Pakistan, Turkey), LawLex200900002778JBJ, for determining the weighted average profit margin of other companies whose domestic sales are sufficient.

Commission Regulation (EC) No 1742/2000 of 4 August 2000, imports of certain polyethylene terephthalate (PET) (India, Indonesia, Malaysia, Korea, Taiwan, Thailand), LawLex200900002850JBJ; No 2208/96 of 18 November 1996, imports of unbleached (grey) cotton fabrics (China, Egypt, India, Indonesia, Pakistan, Turkey), LawLex200900002778JBJ, considering that for a company which has insufficient profitable domestic sales, normal value may be constructed from the profit margin of a company which belongs to the same group or from the weighted average profit margin of other companies with sufficient domestic sales.

Commission Decision No 1613/90 of 13 June 1990, imports of ball bearings with a greatest external diameter not exceeding 30 mm originating in Thailand, LawLex200900002692JBJ.

Council Regulation (EC) No 535/87 of 23 February 1987, imports of plain paper photocopiers (Japan), LawLex201200000250JBJ.

Case T-48/96 Acme v Council [1999] ECR II-3089, LawLex200900001379JBJ.

Commission Regulation (EC) No 1628/2003 of 17 September 2003, imports of large rainbow trout (Norway, Faeroe Islands), LawLex200900002635JBJ; See also Commission Decision No 1613/90 of 13 June 1990, imports of ball bearings with a greatest external diameter not exceeding 30 mm originating in Thailand, LawLex200900002692JBJ, which refers to the profit realized on certain products exported then re-imported, which is a method regarded as reasonable in view of the similarities with regard to the product range; No 967/2000 of 8 May 2000, imports of hairbrushes (China, Korea, Taiwan, Thailand, Hong-Kong), LawLex200900002873JBJ, which determines the profit margin from representative domestic sales of the producer of a third country in the ordinary course of trade; Case T-48/96 Acme v Council [1999] ECR II-3089, LawLex200900001379JBJ, which refers to profitable sales on the domestic market in another country, because it is the only market covered by the on-going procedure for which profitable sales of similar products were made in representative quantities.

Commission Regulation (EC) No 313/92 of 4 February 1992, imports of radiobroadcast receivers (South Korea), LawLex200900002720JBJ.

European Business Law

407. Reasonable profit margin

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407. Reasonable profit margin

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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