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

The producer or producers which are subject to investigation and are established in a non-market economy country may claim, under the conditions of Article 2(7)(b) of the anti-dumping regulation, for the system applicable to producers active in a market economy country . The claim must be made in writing and contain sufficient evidence that the producer operates under market economy conditions . A …

Market economy producer

The producer or producers which are subject to investigation and are established in a non-market economy country may claim, under the conditions of Article 2(7)(b) of the anti-dumping regulation, for the system applicable to producers active in a market economy country . The claim must be made in writing and contain sufficient evidence that the producer operates under market economy conditions . Article 2(7)(c) sets forth the cumulative conditions that the producer in question must meet : 

- decisions of firms regarding prices, costs and inputs - raw materials, technology, labor, output, sales and investments - are taken in accordance with supply and demand , without significant State interference ; costs of major inputs must substantially reflect market values. Domestic sales restrictions , sales at a loss on the domestic market  or centrally imposed price controls  are regarded as excluding the free market rules from applying;

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

- the production costs and financial situation of firms are not subject to significant distortion carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade or payment via compensation of debts ; the Court of Justice has specified that the words “former non-market economy system” do not refer necessarily and specifically to the historic economic system of a state-trading country, but, more generally, to a non-market economy system ; in addition, even if the connection of a measure to various five-year plans implemented in China  is sufficient for the assumption that that measure constitutes a distortion carried over from the former non-market economy system, the producer concerned may rebut that presumption if it demonstrates, to the requisite legal standard, that the measure in question is not inherently contrary to a market economy ;

- the firms concerned are subject to bankruptcy and property laws;

- exchange rate conversions are carried out at the market rate.

The Commission has a maximum of between seven and eight months  after the initiation of the proceedings to decide whether the producer meets these criteria, after the Union industry has submitted comments. The solution retained remains in force throughout the proceedings. The examination of any market economy treatment (MET) claim is subject to strict and thorough review by the Commission, with every fresh claim being assessed anew on the basis of objective evidence collected and verified during the corresponding investigation with the result that no legitimate expectations may be drawn from previous investigations . Using the sampling technique does not authorize the Commission to depart from its obligation to rule individually on a producer's application for MET status pursuant to a properly substantiated claim, since such an obligation concerning the recognition of the economic conditions under which each producer operates in respect of the manufacture and sale of the like product concerned, is not affected by the manner in which the dumping margin is to be calculated . The conditions for granting MET cannot be fulfilled solely on the basis that the audit was carried out in accordance with international accounting standards insofar as it does not enable the institutions to satisfy themselves of the accuracy of the accounting records of the undertaking concerned . Likewise, if tax breaks such as reduced tax rates, which presuppose State intervention, may orientate the conduct of undertakings in a different direction to that caused by the forces present in a market economy, the mere existence of such measures does not suffice for a refusal to grant the applicant MET .

Where evidence is not brought that the producer is active in a market economy, the provisions of Article 2(7)(a) apply . This is also the case where, within the three months following the initiation of the anti-dumping proceedings, the producer in question is found not to fulfill the criteria which an undertaking operating under market economy conditions must satisfy, following changes in the factual situation or the discovery of new evidence of which the Commission could not reasonably have been aware at the time of the determination of the status of the firm active in a market economy .

The claim must be submitted by the whole group involved in the production and sale of the product rather than only by one company within the group: Commission Regulation (EC) No 1043/2000 of 18 May 2000, imports of glycine (China), LawLex200900002872JBJ.

The claim is dismissed if the answer to the questionnaire is sent after the deadline and is clearly insufficient because there is no list of export sales to the Union of the domestic sales, as well as the required information on the cost of production: Commission Regulation (EU) No 230/2001 of 2 February 2001, imports of certain iron or steel ropes and cables (the Czech Republic, Russia, Thailand, Turkey), LawLex200900002845JBJ.

Case C-301/16 P Commission v GMB Glasmanufaktur Brandenburg GmbH, Xinyi PV Products (Anhui) Holdings Ltd, Judgment of 28 February 2018 LawLex201800000339JBJ, holding that insofar as the tax incentives concerned implement a five-year plan, a characteristic feature of non-market economies which is fundamental to the organization of the Chinese economy, the Commission was entitled to presume that those measures had been "carried over from the former non-market economy system" and therefore did not commit a manifest error of assessment by refusing to grant the Chinese producer market economy treatment (MET) status.

Case C-301/16 P Commission v GMB Glasmanufaktur Brandenburg GmbH, cited above.

Prior to the entry into force of Regulation No 2016-1036, failure to comply with the three-month period on the part of the Commission automatically entailed the annulment of the regulation relating to the review which was adopted subsequently: Case T-299/05 Shanghai Excell M&E Enterprise Co. Ltd, Judgment of 18 March 2009, LawLex200900001938JBJ; Case T-156/11 Since Hardware (Guangzhou), Judgment of 18 September 2012, LawLex201200002406JBJ.

Case T-741/16 Changmao Biochemical Engineering Co. Ltd c. Commission, Judgment of 28 June 2019,.

Case C-247/10 P Zhejiang Aokang Shoes v Council, Judgment of 15 November 2012, LawLex201200002407JBJ.

Case T-741/16 Changmao Biochemical Engineering Co. Ltd c. Commission, Judgment of 28 June 2019, LawLex202000001672JBJ.

Case T-586/14 Xinyi PV Products Holdings Ltd, Judgment of 16 March 2016, LawLex201600000605JBJ.

Council Regulation EU No 92/2002 of 17 January 2002, imposed on imports of urea originating in Belarus, Bulgaria, Croatia, Estonia, Libya, Lithuania, Romania and the Ukraine, LawLex200900002602JBJ.

Case T-138/02 Nanjing Metalink v Council [2006] ECR II-4347, LawLex200900001229JBJ.

These conditions must be met by all the companies belonging the a same group to be given the status as market economy producer to one of them: Case T-1/07 Apache Footwear and Apache II Footwear v Council [2009] ECR II-232*, Summ.pub., LawLex201100000231JBJ.

As regards compliance with market signals, see Council Regulation (EU) No 692/2005 of 28 April 2005, imports of certain electronic weighing scales (REWS) originating, inter alia, in the People's Republic of China, LawLex200900002497JBJ.

Council Regulation (EU) No 1612/2001 of 3 August 2001, imports of ferro molybdenum originating in the People's Republic of China, LawLex200900002832JBJ, which defines significant State interference as the exercise of a direct influence in the management of companies to the imposition of limitations in the freedom to run the business and the creation of distortions in the costs of major inputs; Case T-498/04 Zhejiang Xinan Chemical Group Industrial v Council [2009] ECR II-1969, LawLex201100000241JBJ, which excludes that State 'control' or 'influence' might be a criterion expressly laid down in Article 2(7)(c) where such a control is not, as such, incompatible with the taking of commercial decisions in keeping with market economy conditions.

Commission Regulation (EC) No 1043/2000 of 18 May 2000, imports of glycine (China), LawLex200900002872JBJ; Council Regulation (EU) No 2605/2000 of 27 November 2000, imports of certain electronic weighing scales (China, Korea, Taiwan), LawLex200900002591JBJ.

Council Regulation (EU) No 2605/2000 of 27 November 2000, imports of certain electronic weighing scales (China, Korea, Taiwan), LawLex200900002591JBJ; Case T-35/01 Shanghai Teraoka Electronic v Council [2004] ECR II-3663, LawLex200900001352JBJ.

Council Regulation (EU) No 2605/2000 of 27 November 2000, imports of certain electronic weighing scales (China, Korea, Taiwan), LawLex200900002591JBJ.

Commission Regulation (EU) No 230/2001 of 2 February 2001, imports of certain iron or steel ropes and cables (the Czech Republic, Russia, Thailand, Turkey), LawLex200900002845JBJ; Council Regulation (EU) No 692/2005 of 28 April 2005, imports of certain electronic weighing scales (REWS) originating, inter alia, in the People's Republic of China, LawLex200900002497JBJ; Case T-299/05 Shanghai Excell M&E Enterprise and Shanghai Adeptech Precision v Council [2009] ECR II-573, LawLex200900001938JBJ.

Case T-1/07 Apache Footwear and Apache II Footwear v Council [2009] ECR II-232*, Summ.pub., LawLex201100000231JBJ, for a Chinese producer which had a rent for immovable properties that was significant lower than the market price from the former non-market economy system.

European Business Law

410. Market economy producer

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410. Market economy producer

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise