GC, 7th chamber, February 17, 2011, No T-122/09

THE GENERAL COURT (Seventh Chamber),

Legal context

1 The basic anti-dumping legislation is constituted by Council Regulation (EC) No 384-96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1), as amended, ('the basic regulation') (replaced by 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; corrigendum OJ 2010 L 7, p. 22).

2 Article 3(3) and (5) to (7) of the basic regulation (now Article 3(3) and (5) to (7) of Regulation No 1225-2009) provides as follows:

'3. With regard to the volume of the dumped imports, consideration shall be given to whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in the Community. With regard to the effect of the dumped imports on prices, consideration shall be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product of the Community industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree. No one or more of these factors can necessarily give decisive guidance.

...

5. The examination of the impact of the dumped imports on the Community industry concerned shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including the fact that an industry is still in the process of recovering from the effects of past dumping or subsidisation, the magnitude of the actual margin of dumping, actual and potential decline in sales, profits, output, market share, productivity, return on investments, utilisation of capacity; factors affecting Community prices; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital or investments. ...

6. It must be demonstrated, from all the relevant evidence ... that the dumped imports are causing injury within the meaning of this Regulation. ...

7. Known factors other than the dumped imports which at the same time are injuring the Community industry shall also be examined to ensure that injury caused by these other factors is not attributed to the dumped imports under paragraph 6. Factors which may be considered in this respect include the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, restrictive trade practices of, and competition between, third-country and Community producers, developments in technology and the export performance and productivity of the Community industry.'

3 Article 9(4) of the basic regulation (now Article 9(4) of Regulation No 1225-2009) provides as follows:

'Where the facts as finally established show that there is dumping and injury caused thereby, and the Community interest calls for intervention in accordance with Article 21, a definitive anti-dumping duty shall be imposed by the Council, acting on a proposal submitted by the Commission after consultation of the Advisory Committee. The proposal shall be adopted by the Council unless it decides by a simple majority to reject the proposal, within a period of one month after its submission by the Commission. ...'

4 Article 15(1) and (2) of the basic regulation (now Article 15(1) and (2) of Regulation No 1225-2009) states as follows:

'1. Any consultations provided for in this Regulation shall take place within an Advisory Committee, which shall consist of representatives of each Member State, with a representative of the Commission as chairman. Consultations shall be held immediately at the request of a Member State or on the initiative of the Commission and in any event within a period of time which allows the time-limits set by this Regulation to be adhered to.

2. The Committee shall meet when convened by its chairman. He shall provide the Member States, as promptly as possible, but no later than 10 working days before the meeting, with all relevant information.'

5 Article 20(4) and (5) of the basic regulation (now Article 20(4) and (5) of Regulation No 1225-2009) is worded as follows:

'4. Final disclosure shall be given in writing. It shall be made, due regard being had to the protection of confidential information, as soon as possible and, normally, no later than one month prior to a definitive decision or the submission by the Commission of any proposal for final action pursuant to Article 9. Where the Commission is not in a position to disclose certain facts or considerations at that time, these shall be disclosed as soon as possible thereafter. ...

5. Representations made after final disclosure is given shall be taken into consideration only if received within a period to be set by the Commission in each case, which shall be at least 10 days, due consideration being given to the urgency of the matter.'

Background to the dispute

6 The applicants, Zhejiang Xinshiji Foods Co. Ltd and Hubei Xinshiji Foods Co. Ltd, are companies established in China which produce and export certain prepared or preserved citrus fruits, such as mandarins.

7 Following a complaint lodged on 6 September 2007 by the Spanish National Federation of Associations of the Processed Fruit and Vegetable Industry (FNACV), the Commission of the European Communities initiated an anti-dumping proceeding on 20 October 2007 in respect of imports of certain prepared or preserved citrus fruits originating in China over the period from 1 October 2006 to 30 September 2007.

8 On 4 July 2008, the Commission adopted Regulation (EC) No 642-2008 imposing a provisional anti-dumping duty on imports of certain prepared or preserved citrus fruits (namely mandarins etc.) originating in the People's Republic of China (OJ 2008 L 178, p. 19) ('the provisional regulation'). On 7 July 2008, the Commission sent to the applicants a provisional disclosure document ('the provisional disclosure document') setting out the essential facts and considerations on the basis of which the provisional anti-dumping measures had been imposed. On 4 August 2008, the applicants submitted their comments to the Commission on the provisional disclosure document, which related to, inter alia, the sales volume figures for the Community industry, the impact of the cost of raw materials and the method of calculation used to determine the total export price, and requested a meeting ('the comments of 4 August 2008').

9 On 10 November 2008, the Commission sent to the applicants a final disclosure document ('the final disclosure document'), which set out the essential facts and considerations on the basis of which definitive anti-dumping measures were envisaged, as well as a specific disclosure document ('the specific disclosure document'). The applicants submitted their comments on those documents on 20 November 2008 ('the comments of 20 November 2008').

10 On 25 November 2008, the Commission consulted the anti-dumping advisory committee provided for in Article 15 of the basic regulation ('the Anti-Dumping Committee') on its proposal for definitive anti-dumping duties. On 3 December 2008, the Commission adopted its proposal for a definitive regulation, which it forwarded to the Council of the European Union on 4 December 2008. On 5 December 2008, the Council forwarded that proposal to the delegations of the Member States. On 17 December 2008, representatives of the applicants and of other companies attended a meeting with the Commission. On 18 December 2008, the Council adopted Regulation (EC) No 1355-2008 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on certain prepared or preserved citrus fruits (namely mandarins etc.) originating in the People's Republic of China (OJ 2008 L 350, p. 35) ('the contested regulation'), which entered into force on 31 December 2008.

11 On 5 January 2009, the Commission sent a letter to the applicants explaining the methods used to calculate importation costs and data relating to the Community industry.

Procedure and forms of order sought by the parties

12 The applicants brought the present action by application lodged at the Registry of the Court on 23 March 2009.

13 By document lodged at the Registry of the Court on 16 July 2009, the Commission sought leave to intervene in the present case in support of the form of order sought by the Council. The President of the Seventh Chamber of the Court granted that application by order of 24 September 2009. By document lodged at the Registry of the Court on 9 October 2009, the Commission waived its right to submit a statement in intervention.

14 Upon hearing the report of the Judge-Rapporteur, the Court (Seventh Chamber) decided to open the oral procedure. The parties presented oral argument and replied to the questions put by the Court at the hearing on 9 September 2010.

15 The applicants claim that the Court should:

- annul the contested regulation in so far as it concerns them;

- order the Council to pay the costs.

16 The Council contends that the Court should:

- dismiss the action;

- order the applicants to pay the costs.

17 The Commission contends that the Court should dismiss the action.

Law

18 Formally, the applicants put forward three pleas in law in support of their action. The first plea, under the heading 'Infringements of the applicants' rights of defence', consists of three parts, alleging: first, breach of Article 20(4) and Article 15(2) of the basic regulation; second, inconsistencies in the data provided by the Commission on the Community industry sales volumes, the effect of prices of raw materials on the Community industry and the account taken of post-importation costs in calculating the price of products originating in China; and, third, a manifest error of assessment in the determination of the injury suffered by the Community industry. The second plea alleges infringement of the duty to state reasons and the third plea infringement of the principle of sound administration.

19 The Council observes, as a preliminary point, that, in their plea alleging infringement of the rights of the defence, the applicants challenge not only the procedure which led to the adoption of the contested regulation but also the substance of that regulation, essentially alleging a manifest error of assessment. According to the Council, those arguments are irrelevant in the context of a plea alleging infringement of the rights of the defence.

20 In that regard, it should be borne in mind that the summary of the pleas in law on which an application is based, referred to in Article 44(1)(c) of the Court's Rules of Procedure, does not require that those pleas be set out in a particular manner. The pleas may be expressed in terms of their substance rather than of their legal classification, provided that the application sets them out with sufficient clarity (Case T-145-98 ADT Projekt v Commission [2000] ECR II-387, paragraph 67; see also, to that effect, the judgment of 23 September 2004 in Case C-297-02 Italy v Commission, not published in the ECR, paragraph 57 and the case-law cited).

21 The applicants' arguments must therefore be examined by making a distinction as between the following:

- failure to respect the time-limits laid down in Article 20(4) and (5) of the basic regulation;

- infringement of the rights of the defence and of the principle of sound administration and manifest error of assessment as regards the purported inconsistencies in the data provided by the Commission on the Community industry sales volumes;

- infringement of the rights of the defence and of the principle of sound administration and manifest error of assessment as regards the effect of the prices of raw materials on the Community industry;

- infringement of the rights of the defence, of the duty to state reasons and of the principle of sound administration and manifest error of assessment as regards the account taken of post-importation costs in the calculation of the price of products originating in China;

- breach of Article 15(2) of the basic regulation.

Failure to respect the time-limits laid down in Article 20(4) and (5) of the basic regulation

Arguments of the parties

22 The applicants submit that the Commission failed to provide them with the necessary information in sufficient time for them effectively to make known their views and observe that failure to adhere to a time-limit constitutes an infringement of the rights of the defence such as to justify the annulment of the regulation imposing an anti-dumping duty where the party concerned establishes that it would have been better able to defend itself had there not been such an irregularity.

23 The applicants maintain that the Commission breached Article 20(4) of the basic regulation in so far as it failed to respect the one-month period, allegedly imposed by that provision, between the time at which the final disclosure document was sent to the applicants (10 November 2008) and the time at which the proposal for a regulation imposing a definitive anti-dumping duty was sent to the Council (4 December 2008). According to the applicants, the fact that the Commission shortened that period had a negative effect on their rights of defence. For example, the applicants had only 10 days in which to submit their comments on the final disclosure document, which is the strict minimum provided for under Article 20(5) of the basic regulation.

24 The applicants are of the view that any delay in sending the final disclosure document was all the more unacceptable given that the Commission had been in possession of their comments on the provisional disclosure document since they submitted those comments on 4 August 2008.

25 The Council and the Commission contest the applicants' arguments.

Findings of the Court

26 According to established case-law, pursuant to the principle of respect for the rights of the defence, the undertakings affected by an investigation preceding the adoption of an anti-dumping regulation must be placed in a position during the administrative procedure in which they can effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegation concerning the existence of dumping and the resultant injury (Case C-458-98 P Industrie des poudres sphériques v Council [2000] ECR I-8147, paragraph 99, and Case T-88-98 Kundan and Tata v Council [2002] ECR II-4897, paragraph 132).

27 The specific requirements flowing from the rights of defence of undertakings affected by an anti-dumping proceeding are set out in Article 20 of the basic regulation. Article 20(1) and (2) provides that the exporters of the product that is the subject of an anti-dumping investigation may request from the Commission final disclosure of the essential facts and considerations on the basis of which it intends to recommend that the Council adopt definitive measures. Article 20(4) of the basic regulation requires that that disclosure be given in writing as soon as possible and, normally, no later than one month prior to a definitive decision or prior to the submission by the Commission of any proposal for final action pursuant to Article 9 of the basic regulation. Moreover, Article 20(5) of the basic regulation grants undertakings which have received such final disclosure the right to submit representations within the period set by the Commission, which must be at least 10 days.

28 In the present case, the Commission forwarded to the applicants the final disclosure document and the specific disclosure document on 10 November 2008. The period allowed for the applicants to reply was 10 days, that is, up to 20 November 2008. The applicants complied with that time-limit. The proposal for the contested definitive regulation was sent to the Council on 4 December 2008.

29 It should be noted in this regard that, as the Council has correctly observed, it is apparent from the use of the adverb 'normally' and the phrase 'as soon as possible' that Article 20(4) of the basic regulation does not lay down a mandatory time-limit. The legislature thus intended to allow for a degree of flexibility as regards the one-month period provided for in that provision. While it is not permissible for the Commission to send its proposal for a regulation imposing a definitive anti-dumping duty before the expiry of the period granted to the undertakings concerned to formulate their representations on the final disclosure document (see, to that effect, Case C-141-08 P Foshan Shunde Yongjian Housewares & Hardware v Council [2009] ECR I-9147, paragraphs 73, 74 and 77), there was nothing to prevent the Commission, in the circumstances of the present case, after receiving those comments, from finalising its proposal for a regulation and sending it to the Council before the expiry of the one-month period referred to in Article 20(4) of the basic regulation. Since two weeks elapsed between receipt by the Commission of the comments of 20 November 2008 and the forwarding of the proposal for a regulation to the Council, there is nothing to suggest that the need, referred to in the case-law, to ensure that account is taken of the comments of the interested parties in a manner that is effective (Foshan Shunde Yongjian Housewares and Hardware v Council, paragraph 78) was not complied with in the present case. Accordingly, it must be concluded that there was no breach of Article 20(4) of the basic regulation.

30 With regard to the fact that the applicants were given only 10 days in which to submit their comments on that document, it should be noted that such a period corresponds to the minimum laid down in Article 20(5) of the basic regulation. Moreover, the applicants do not plead special circumstances, relating to, inter alia, the complexity of the case, capable of proving that the period granted to them was insufficient to ensure that they had the opportunity to express their views effectively on the final disclosure document.

31 It follows from the foregoing that, since neither Article 20(4) nor Article 20(5) of the basic regulation was infringed, the complaint under consideration must be rejected as unfounded.

Infringement of the rights of the defence and of the principle of sound administration and manifest error of assessment as regards the purported inconsistencies in the data provided by the Commission on the Community industry sales volumes

Arguments of the parties

32 The applicants point out that, in the comments of 4 August 2008, they examined the data presented by the Commission in recitals 65, 67 and 70 in the preamble to the provisional regulation relating to its investigation into the injury suffered by the Community industry and sought explanations as to the calculation of the Community industry sales volumes, as set out in recital 70 in the preamble to the provisional regulation. In their view, the Commission, in the provisional regulation, understated the Community industry sales volumes, in one year by as much as 34%, and thus overestimated the injury allegedly suffered by the Community industry as a result of imports from China.

33 The applicants maintain that their rights of defence were infringed on the ground that, in the final disclosure document, the Commission failed to address specifically their objections referred to above. They point out that they once again drew the Commission's attention to those objections in the comments of 20 November 2008 and at the meeting on 17 December 2008 but did not receive any reply before the contested regulation was adopted. The only explanation given to the applicants in that regard was in a letter from the Commission of 5 January 2009 - and thus after the adoption of the contested regulation - which stated that the difference between the Commission's calculations and those of the applicants was attributable to the fact that the Commission's calculations took account of export sales.

34 According to the applicants, in addition to being late, the Commission's explanation did not amount to a satisfactory response because, even if the figures relating to the volume of exports were taken into account, the calculations in the provisional regulation remained inconsistent. Those inconsistencies, they argue, show that the Commission committed a manifest error of assessment when applying Article 3(2) of the basic regulation, under which it was required to determine whether injury existed on the basis of positive evidence.

35 Lastly, the applicants submit that the Council infringed the principle of sound administration by failing to take account of their comments.

36 The Council and the Commission contest the applicants' arguments.

Findings of the Court

37 It should be noted that, in the provisional regulation, the Commission provided all the data which it used in calculating the Community industry sales volumes, including data relating to export sales, which are set out in recital 92 in the preamble to that regulation. However, it did not expressly describe the method followed in making that calculation. In particular, it did not explain whether export sales formed part of that calculation.

38 However, in spite of the failure to provide that clarification, the applicants were able to point out, in the comments of 4 August 2008, that, in their view, the calculation of the Community industry sales volumes ought to have been based on the figure for Community production for a given year, adding to it the stocks held at the beginning of that year before subtracting the stocks held at the end of the year.

39 Moreover, in view of the Commission's failure to adopt a position on that issue in the final disclosure document, the applicants confirmed their position on the calculation of injury in the comments of 20 November 2008.

40 However, even though the Commission did not state, in the final disclosure document, the reasons why the applicants' calculation did not tally with its own calculation, the fact remains that the applicants were given the opportunity to express their view in knowledge of the relevant facts, in accordance with the case-law referred to at paragraph 26 above. They were given access, by means of the provisional regulation, to all the data necessary to ascertain the Commission's method of calculation. Accordingly, their rights of defence were not infringed on that point.

41 That conclusion cannot be brought into question by the fact that the contested regulation does not expressly address the applicants' purported objections and that the explanation of the role played by export sales was expressly provided to the applicants after that regulation had been adopted, since that fact has no bearing on the finding that all the necessary information was made available to the applicants to enable them to express their views during the procedure.

42 Moreover, the failure to provide the applicants with more specific explanations is not, in itself, sufficient to establish that there has been an infringement of the principle of sound administration such as to justify annulment of the contested regulation, since that omission does not mean that the institutions failed to take account of all the relevant circumstances and to appraise the facts of the matter with all due care (see, to that effect and by analogy, Case T-413-03 Shandong Reipu Biochemicals v Council [2006] ECR II-2243, paragraph 64 and the case-law cited).

43 Lastly, it is clear that there is also no basis for the applicants' arguments which seek to establish a manifest error of assessment in that the purported inconsistencies in the Commission's calculations would remain even if export sales were taken into account.

44 Although they were expressly informed on 5 January 2009 of the fact that the Commission had taken account of export sales, the applicants did not, in their written pleadings or in their replies to the questions put to them by the Court at the hearing, adduce any evidence capable of showing that there were errors in the Commission's calculations. On the contrary, the applicants merely claim, without providing further details, that those calculations are inconsistent. They have therefore failed to adduce sufficient evidence to render implausible the assessment of the facts set out in the provisional regulation and confirmed in the contested regulation. Such evidence is, however, necessary in order to establish that an institution has committed a manifest error of assessment such as to justify the annulment of a measure (see, to that effect, Case T-68-05 Aker Warnow Werft and Kvaerner v Commission [2009] ECR II-355, paragraph 42 and the case-law cited).

45 It follows from all of the foregoing that the complaints under consideration are unfounded.

Infringement of the rights of the defence and of the principle of sound administration and manifest error of assessment as regards the effect of the prices of raw materials on the Community industry

Arguments of the parties

46 The applicants submit that the Commission failed to explain how it applied Article 3(5) and (7) of the basic regulation, pursuant to which it is required to take account of factors affecting Community prices and of known factors, other than dumped imports, which are causing injury to the Community industry.

47 The applicants point out, first, that in the comments of 4 August 2008 they had asserted that the difficulties experienced by the Community industry had not been caused by imports from China alone but also by other factors such as the high prices of raw materials and, second, that Commission Regulation (EC) No 658-2004 of 7 April 2004 imposing definitive safeguard measures against imports of certain prepared or preserved citrus fruits (namely mandarins etc.) (OJ 2004 L 104, p. 67) had examined the effect of the prices of raw materials on the Community industry. On that occasion, according to the applicants, the Commission identified difficulties experienced by Community producers in purchasing raw materials, while at the same time stating that that process was not yet sufficiently far advanced to have had an appreciable effect on the availability of supply to Community producers. The applicants therefore submit that, in the present case, in response to the concerns which they had expressed, the Commission ought to have carried out a fresh analysis to assess whether those difficulties had increased to such a degree that they were now the source of the injury suffered by the Community industry.

48 The applicants point out that, in the provisional regulation, the Commission observed that the price of raw materials had increased by 29% over the period concerned, whereas it had decreased by 33% over the period from 1998 to 2003, but nevertheless concluded that there was no correlation between the fluctuations in raw material prices and the general situation of the Community industry. They add that the final disclosure document reached the same conclusion, without explaining why the increase in the price of raw materials could not have been responsible, even in part, for the injury suffered by the Community industry, and that the Commission failed to provide adequate explanations or answers, notwithstanding the applicants' representations on that issue in the comments of 4 August 2008.

49 According to the applicants, if they had received the explanations requested, they would have been able to challenge the Commission's reasoning.

50 Lastly, the applicants submit that the Commission infringed the principle of sound administration by failing to take account of their comments.

51 The Council and the Commission contest the applicants' arguments.

Findings of the Court

52 It is apparent from Article 3(5) to (7) of the basic regulation that, in determining whether the Community industry has suffered injury as a result of dumped imports, it is necessary, first, to examine the impact which those imports have on that Community industry by taking account of all relevant economic factors and indices and, second, to ascertain whether there are factors, other than the imports in question, which, at the same time, are causing injury to the Community industry, so as to ensure that the injury caused by those other factors is not attributed to the dumped imports.

53 The applicants submit that no account was taken in the present case of the impact on the injury suffered by the Community industry which was attributable to the price of raw materials, a factor which they had none the less referred to in the comments of 4 August 2008.

54 The impact of the prices of raw materials on the injury suffered by the Community industry was examined by the Commission in the provisional regulation (recitals 96 and 97) and that examination indicated, according to the data gathered, that there was no correlation between variations observed in production and in the prices of raw materials and the injury suffered by the Community industry. Thus, between the 2002/2003 and 2003/2004 harvests, whereas there was a slight increase in the cost of raw materials, there was a significant increase in the losses suffered by the Community industry. By contrast, between the 2003/2004 and 2005/2006 harvests, whereas there was once again an increase in the costs of raw materials, there was a fall in the losses suffered by the Community industry.

55 As the applicants challenged that analysis, it was explained in the final disclosure document that the official data from the Spanish Ministry of Agriculture confirmed that the quantities available for the canning industry were more than sufficient to cover the entire production capacity of Spanish producers and that, whilst it was acknowledged that producers competed to a certain extent for fresh fruit with the direct fresh produce consumer market, a more significant reason for the Community industry's relatively low production, sales and market share was the pressure exerted by the massive imports from China at very low prices.

56 On that occasion, the Commission stated that its analysis was confirmed by the fact that Community producers continued to hold considerable amounts of stocks, which showed that the deterioration in the Community industry's situation was not attributable to insufficient production but, rather, to the fact that it was impossible to sell that production because of the pressure from products originating in China.

57 Moreover, while recognising that the price of raw materials was subject to fluctuations, the Commission observed that, over the five-year period analysed, injury was confirmed irrespective of those fluctuations and, therefore, the economic results of the Community industry were not directly linked to such seasonal fluctuations.

58 The applicants did not express a view on that point in the comments of 20 November 2008 or adduce any fresh evidence concerning the impact of the prices of raw materials which could have led the Commission to pursue a different line of reasoning with regard to that question.

59 In those circumstances, it cannot be held that the applicants' rights of defence were infringed with regard to the application of Article 3(5) to (7) of the basic regulation.

60 Moreover, the conduct of the institutions' does not point to any infringement of the principle of sound administration capable of justifying the annulment of the contested regulation, in the light of the case-law referred to at paragraph 42 above.

61 Lastly, in so far as the applicants, using the same arguments formally pleaded as alleged infringement of the rights of the defence, essentially seek to rely on a manifest error of assessment which vitiated the institutions' analysis as to the influence of factors other than Chinese imports on the state of the Community industry, it is clear that those arguments are also unfounded.

62 First, the applicants simply posit the hypothesis, not supported by any evidence, that, had the Commission carried out a fresh analysis of the difficulties which Community producers may have encountered in purchasing raw materials, it might have concluded that those difficulties were greater than those to which it had referred in Regulation No 658-2004. Second, the applicants merely state that the Commission's finding that there was no correlation between the fluctuations in the prices of raw materials and the situation of the Community industry is unfounded, without providing any specific evidence to cast doubt on the conclusion reached by that institution.

63 Accordingly, the applicants have failed to adduce sufficient evidence to render implausible the assessment of the facts set out in the provisional regulation and confirmed in the contested regulation (see the case-law cited at paragraph 44 above).

64 It follows from all of the foregoing that the complaints under consideration are unfounded.

Infringement of the rights of the defence, of the duty to state reasons and of the principle of sound administration and manifest error of assessment as regards the account taken of post-importation costs in calculating the price of products originating in China

Arguments of the parties

65 The applicants submit that the Commission infringed their rights of defence in that it failed to explain the methods by which it applied, in the present case, Article 3(3) of the basic regulation, which provides that the Commission must consider whether there has been significant price undercutting by the dumped imports as compared with the price of a like product of the Community industry.

66 The applicants point out that, according to recital 60 in the preamble to the provisional regulation, in determining the Community industry sales prices, the Commission took into consideration the sales prices to independent customers, adjusted where necessary to the 'Hamburg-delivered' level, after deducting discounts and rebates, and that those prices were compared with the sales prices of exporting producers from China, net of discounts and adjusted where appropriate to the CIF (cost, insurance and freight) 'Hamburg-delivered' level, plus customs duties and safeguard duties where applicable. However, in the provisional disclosure document, the Commission opted for a different formula for the calculation, which took account of the CIF price at the Community frontier, to which were added customs duties and post-importation costs and, where applicable, safeguard duties.

67 The applicants state that, in the comments of 4 August 2008, they expressed the view that export prices should be determined at the level of the importer's selling prices. However, in its specific disclosure document, the Commission simply stated that an exporting producer had asked that account be taken in this regard of the sales costs incurred by importers and provided new calculation tables taking account of the CIF price, customs duty, a 2% uplift for import costs and the importer's margin, and safeguard duty. In their comments on that document, the applicants contested that methodology and sought explanations on the calculation of the 2% uplift for import costs and the importer's profit margin, since the Commission had provided no evidence to show that that uplift was appropriate. Moreover, the applicants raised that issue at the hearing on 17 December 2008 and asked what costs were included in the uplift in question but did not receive any answer. The contested regulation contains no explanation as to those questions, with the result that the applicants were not given any information as to why the uplift was considered appropriate. Following the adoption of the contested regulation, the Commission stated, in its letter of 5 January 2009, that 'importation costs' included all costs (including trucking costs) incurred to bring the product to the importer's warehouse. However, the applicants maintain that, even after that belated communication, they remained unaware of the source of the data taken into account, of the evidence which might show that the uplift was appropriate and of the costs included in the uplift.

68 According to the applicants, respect for the rights of defence of the parties affected by an anti-dumping investigation entails an obligation on the part of the institutions to inform them not only that an adjustment is to be applied but also of the reasons justifying that adjustment. That applies all the more so where the adjustment in question has a direct effect on the level of duty applicable, as in the present case. Thus, by failing to communicate to the applicants the facts and figures underlying the uplift in question, the Commission deprived them of the opportunity to rebut the basis of its assessment and to influence the level of duty applicable. The applicants further submit that a 2% uplift does not reflect all the costs incurred up to what is equivalent to the Community industry ex-works level and that the appropriate percentage is between 10% and 18%.

69 Moreover, the fact that the contested regulation does not contain any other information on the facts and figures underlying the uplift at issue amounts to a failure to state reasons in that regard, precluding the applicants from defending their interests and the Court from exercising its powers of review.

70 Lastly, the applicants submit that the Commission infringed the principle of sound administration by failing to take account of their comments.

71 The Council, supported by the Commission, contends that the notion of post-importation costs and the method used to calculate the total export price for the purpose of calculating undercutting are well known among anti-dumping practitioners and that those costs do not include the selling, administrative and other expenses of the importer or his profit margin, except in the case - irrelevant here - where the Community industry and the exporters sell to different types of customers.

72 The Council also points out that the 2% uplift for post-importation costs that was applied in the present case was based on confidential evidence.

73 With regard to the purported infringement of the rights of the defence, the Council submits that the applicants had already, in the comments of 4 August 2008, expressed their view on the items to be included in the calculation of post-importation costs. Thus, after having been apprised in the final disclosure document of the fact that the Commission had factored in a 2% uplift to take account of those costs, the applicants had at their disposal, according to the Council, all the information necessary to defend their interests. They could indeed have commented on what items should have been taken into account in calculating the post-importation costs and explained why the figure of 2% was, in their view, too low. The applicants are, therefore, not contending that their rights of defence were infringed, but are in fact seeking to challenge the soundness of the level of uplift applied by the institutions to take account of post-importation costs, without, however, providing any explanation as to why a higher uplift would have been necessary.

74 As regards the purported infringement of the duty to state reasons, the Council observes that that duty does not require the institutions to disclose the source of underlying evidence for the adoption of a measure but simply to set out the principal issues of law and matters of fact on which they relied and which are necessary to facilitate an understanding of the reasoning which led to the adoption of the measure.

Findings of the Court

75 It should be noted, first, that, where the institutions enjoy a wide power of appraisal, as is clearly the case when a choice is to be made between a number of methods for calculating the injury margin in anti-dumping matters, respect for the safeguards guaranteed by the Community legal order in administrative procedures is of even greater fundamental importance. Those safeguards include, in particular, the requirement that the competent institution examine, carefully and impartially, everything relevant to the particular case, and the right of the person concerned to put forward his point of view and to have sufficient reasons given for the decision. Only in this way can the European Union Courts verify whether the factual and legal elements upon which the exercise of the power of appraisal depends were present (Case C-269-90 Technische Universität München [1991] ECR I-5469, paragraph 14, and Shandong Reipu Biochemicals v Council, paragraph 63).

76 As regards the right of the person concerned to put forward his point of view, Article 20 of the basic regulation sets out the means by which the parties concerned, including exporters, may exercise their right to be heard, which constitutes one of the fundamental rights recognised by the Community legal order and includes the right to be informed of the essential facts and considerations on the basis of which it is intended to recommend the imposition of definitive anti-dumping duties (Case C-49-88 Al-Jubail Fertilizer v Council [1991] ECR I-3187, paragraph 15, and Case T-147-97 Champion Stationery and Others v Council [1998] ECR II-4137, paragraph 55).

77 In an investigation preceding the adoption of an anti-dumping regulation, the undertakings concerned must be placed in a position during the administrative procedure in which they can effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegation concerning the existence of dumping and the resultant injury (Al-Jubail Fertilizer v Council, paragraph 17; Industrie des poudres sphériques v Council, paragraph 99; Champion Stationery and Others v Council, paragraph 55; and Kundan and Tata v Council, paragraph 132).

78 Moreover, the applicants cannot be required to show that the Commission's decision would have been different in content if they had been given the information requested; they must simply show that such a possibility cannot be entirely ruled out, since they would have been better able to defend themselves had there been no procedural error (see, to that effect, Foshan Shunde Yongjian Housewares & Hardware v Council, paragraph 94).

79 In the present case, the adjustment at issue, which was applied to the export price to reflect the expenses incurred after the imported products had entered Community territory, was made in the context of the calculation of price undercutting and therefore for the purpose of defining the injury margin, in accordance with Article 3(2) and (3) of the basic regulation. With regard to that calculation, it should be borne in mind that, under Article 3(2) of the basic regulation, the determination of the injury suffered by the Community industry involves an objective examination of the impact which dumped imports have had on the Community industry. It requires a fair comparison to be made between the export price and the price that was or should have been obtained by the Community industry in sales within Community territory. In order to ensure that the comparison is fair, it is necessary to be satisfied, first of all, that the prices are being compared at the same level of trade. A comparison of prices obtained at different levels of trade, that is to say, one which does not include all the costs relating to the levels of trade which must be taken into account, would necessarily be misleading in its results and would not allow a correct assessment to be made of the actual injury suffered by the Community industry.

80 Consequently, in order to ensure that the principles referred to at paragraphs 76 and 77 above are complied with when the export price and the Community industry price are compared for the purpose of calculating the injury caused as a result of dumping, the undertakings concerned must be placed in a position during the administrative procedure in which they can effectively make known their views on the factors taken into account by the Commission in concluding that that comparison was made at the same level of trade.

81 In the present case, in their comments on the provisional disclosure document, the applicants submitted that the export prices should have been adjusted to the ex-works level of the importer, that is, by including the importer's selling, general and administrative expenses and a reasonable profit margin. According to the applicants, it is at that level that the Community industry prices and the prices of imported products are in competition.

82 In response to that observation, the Commission stated, at paragraph 28 of the general disclosure document, that one exporting producer had 'contested the methodology used to calculate undercutting and requested an adjustment to reflect costs borne by traders for their indirect sales' and that '[w]here justified, calculations were adapted'. The Commission also annexed to that document two tables setting out the calculation of the injury margin.

83 It is clear in this regard that the Commission accepted that it was necessary to make an adjustment in order to calculate the injury margin.

84 First of all, however, the two tables annexed to the specific disclosure document contain conflicting indications as to the costs deemed to be reflected in the adjustment at issue. Whereas column 4 of the table headed 'Underselling margin = injury margin' indicates that the adjustment in question includes only importation costs, that is, according to the letter of 5 January 2009, the costs up to the importer's warehouse, the following table indicates that that adjustment also includes the importer's profit margin.

85 Next, on the assumption that the applicants must have understood that the adjustment in question included only the costs incurred up to the stage at which the goods reached the importer's warehouse, which it is reasonable to suppose in view of the small size of that adjustment, there is nothing in the information communicated to the applicants during the administrative procedure which addresses the question of why that stage in the distribution chain of imported products is equivalent to the Community industry ex-works level and, consequently, why that adjustment is appropriate. Since it is a prerequisite of the lawfulness of the calculation of injury that a fair comparison be made between the export price and the Community industry price, that is, at the same level of trade, the operators in question cannot be regarded as having been placed in a position in which they could effectively make known their views when they were not provided with any information to show that the comparison was fair.

86 It is therefore necessary to hold that the applicants are correct in claiming that their rights of defence were infringed as a result of their not being granted access to the information necessary for them to determine whether, in the light of the structure of the market, the adjustment in dispute was appropriate in that it made it possible to compare the export price and the Community industry price at the same level of trade. It should be pointed out that that information is not confidential, since it is a question of defining, and giving reasons to justify, the level of trade at which products are imported corresponding to the Community industry 'ex-works' level and making an appropriate adjustment in order to take account of all relevant costs. It is also abundantly clear that the applicants' arguments in that regard might have had a bearing on the content of the proposal for definitive measures.

87 The Council's argument (see paragraph 71 above) that it is well known that the notion of post-importation costs includes selling, general and administrative expenses, as well as the importer's reasonable profit margin, only where exporting producers and the Community industry sell to different types of customers, which is not the case here, does not affect the finding set out in the previous paragraph.

88 Even though the Council is correct in its assertion that, in essence, the higher adjustment claimed by the applicants is justified only where the Community industry essentially sells its production to customers other than importers, the latter being the customers of exporting producers and placing the product concerned on the Community market (see, by way of illustration, recital 65 in the preamble to Council Regulation (EC) No 2155-97 of 29 October 1997 imposing a definitive anti-dumping duty on imports of certain footwear with textile uppers originating in the People's Republic of China and Indonesia and collecting definitively the provisional duty imposed (OJ 1997 L 298, p. 1), the fact remains that the information forwarded to the applicants during the investigation does not contain any assessment of that issue.

89 It should be added that, inasmuch as the relevant information for such an analysis is normally in the possession of importers and the Community industry, the onus cannot be on the applicants to produce that information to the Commission in order to be entitled to a reasoned assessment of that issue.

90 Lastly, the fact that the applicants might have been able to ask the Commission, before the general disclosure document was sent, to establish the export price at the level of the selling prices of independent importers does not alter that finding. What is important in ascertaining whether the rights of the defence were respected when the general disclosure document was being drawn up is whether the person concerned was given the opportunity to be apprised of the information which, according to the Commission, demonstrates that the price comparison which it carried out was fair, especially when, as in the present case, the Commission did not follow that person's proposal in that connection in the disclosure document.

91 For the same reasons, the factors which, according to the institutions, demonstrate that the comparison of the export price and the Community industry price was made at the same level of trade are of vital importance for the purpose of ensuring not only effective exercise of the rights of the defence but also the fullness of the reasons given for the contested regulation. Given that that regulation does not contain any further information than that contained in the documents sent by the institutions during the administrative procedure on that issue, it is clearly vitiated by a lack of reasoning which prevents the Court from effectively reviewing its legality in that regard.

92 It should be added that the explanation given by the Council in its pleadings that the structure of the European market did not justify the adjustment claimed by the applicants (see paragraph 71 above) does not alter that finding. First, the reasons for a measure must appear in the actual body of the measure and may not be stated in written or oral explanations given subsequently when the measure is already the subject of proceedings brought before the European Union Courts (see, to that effect, Case T-349-03 Corsica Ferries France v Commission [2005] ECR II-2197, paragraph 287 and the case-law cited). Next, the explanation given by the Council amounts, in any event, to a simple statement that, contrary to what was claimed by the applicants during the administrative procedure (see paragraph 81 above), the Community industry and the exporting producers sell to the same type of customers, leaving unexplained the factors which emerged from the investigation on which that conclusion was based.

93 The complaints alleging infringement of the rights of the defence and failure to state reasons must therefore be upheld, without there being any need to rule on the alleged infringement of the principle of sound administration. Moreover, the above finding that there was a failure to state reasons precludes any examination of the merits of the claims that the adjustment applied is inappropriate.

Breach of Article 15(2) of the basic regulation

Arguments of the parties

94 The applicants point out, first, that under Article 9(4) of the basic regulation the Commission is required to consult the Anti-Dumping Committee before sending its proposal for the adoption of definitive measures to the Council and, second, that, under Article 15(2) of the basic regulation, the chairman of the Anti-Dumping Committee must provide the Member States with all relevant information as promptly as possible, and no later than 10 days before the meeting of that committee. As, in the present case, the Anti-Dumping Committee met on 25 November 2008, the Member States should have received that information no later than 11 November 2008, that is to say, a considerable time before the deadline given to the applicants for the submission of their comments on the final disclosure document, which was 20 November 2008.

95 It follows that, as of 11 November 2008, the Commission did not envisage making any further changes to its draft definitive regulation. In any event, it had no genuine opportunity to review or amend its draft definitive regulation following receipt of the comments of 20 November 2008, since there would have been only two working days between that date and the meeting of the Anti-Dumping Committee on 25 November 2008.

96 The applicants state that it is particularly important that the Anti-Dumping Committee should be given full information because, in practice, it is at the meetings of that committee that anti-dumping measures are approved by the Member States, since the procedure within the Council does not normally give rise to any amendments. It is therefore essential that the Anti-Dumping Committee should have at its disposal not only the documents prepared by the Commission but also the exporters' comments.

97 According to the applicants, the fact that the Commission may subsequently amend its proposal, including on the basis of Article 250(2) EC, does not mean that it may prematurely conclude the procedure.

98 Lastly, the applicants submit that the purpose of the requirement to consult the Anti-Dumping Committee is, inter alia, to protect the parties' rights of defence. Accordingly, infringement of the provisions governing that consultation procedure could lead to annulment of the contested regulation, since, contrary to what the Council claims in its defence, it is not a question of an internal rule of procedure the sole purpose of which is to ensure the smooth functioning of the institution, within the meaning of the case-law resulting from Case C-69-89 Nakajima v Council [1991] ECR I-2069, paragraphs 48 to 51. Moreover, it is apparent from the Court's case-law that only certain provisions governing the internal procedures of an institution may be relied on by individuals.

99 The Council and the Commission contest the applicants' arguments.

Findings of the Court

100 Article 15(2) of the basic regulation provides that the Anti-Dumping Committee is to meet when convened by its chairman, who is to provide the Member States, 'no later than 10 working days before the meeting, with all relevant information'.

101 It is therefore necessary to consider, first, whether the applicants can rely on a possible breach of that provision.

102 It should be noted that, in Nakajima v Council, the Court of Justice held that natural or legal persons may not rely on an alleged breach of rules which are not intended to ensure protection for individuals but to organise the internal functioning of the institution's services in the interests of good administration, such as those relating to observance of the period laid down for the drawing-up of the provisional agenda for a Council meeting or making available all the language versions of a regulation on the day on which it is adopted (paragraphs 48 to 51).

103 This does not, however, mean that an individual can never successfully plead infringement of a rule governing the decision-making process leading to the adoption of an act of the European Union. Among the provisions governing the internal procedures of an institution, a distinction must be made between those in respect of which natural and legal persons cannot plead infringement, because they concern only the rules governing the internal functioning of the institution and can have no effect on the legal situation of those persons, and those provisions which, if infringed, may, on the contrary, be relied on as they create rights and are a factor contributing to legal certainty for those persons.

104 Thus, failure to comply with a rule relating to consultation of a committee can render the final decision of the institution concerned unlawful only if it is sufficiently substantial and has a detrimental effect on the legal and factual situation of the party alleging a procedural irregularity. The consultation of a committee is an essential procedural requirement, breach of which affects the legality of the act adopted following consultation if it is proved that failure to forward certain material information did not allow the committee to deliver its opinion in full knowledge of the facts, that is to say, without being misled in a material respect by inaccuracies or omissions (see, to that effect, Case T-290-94 Kaysersberg v Commission [1997] ECR II-2137, paragraph 88, and Joined Cases T-25-95, T-26-95, T-30-95 to T-32-95, T-34-95 to T-39-95, T-42-95 to T-46-95, T-48-95, T-50-95 to T-65-95, T-68-95 to T-71-95, T-87-95, T-88-95, T-103-95 and T-104-95 Cimenteries CBR and Others v Commission [2000] ECR II-491, paragraph 742).

105 That is not the case where the documents not sent to the committee, or sent only belatedly, do not contain any important new information not already contained in the file sent to the committee when it was convened. In such a situation, the fact that the Commission failed to send a document or sent it belatedly has no repercussions on the outcome of the consultation procedure. Such an omission cannot, therefore, render the whole administrative procedure invalid and thereby call into question the legality of the final measure (see, to that effect, Case T-69-89 RTE v Commission [1991] ECR II-485, paragraph 23).

106 Moreover, the possibility that an infringement of provisions governing the consultation of a committee may affect the legality of the measure ultimately adopted is not brought into question by the fact that the committee's opinion is not binding.

107 The question therefore arises as to whether, in the circumstances of the present case, the fact that the Commission did not wait to receive the applicants' comments on the final disclosure document before referring the matter to the Anti-Dumping Committee or, in any event, did not defer discussion of the draft regulation until a later meeting of that committee, after having received and analysed those comments, must be regarded as a breach of a substantive procedural requirement affecting the legality of the measure adopted following that consultation.

108 That could be the case only if the comments in question contained significant new information that was not previously available to the Anti-Dumping Committee when it was convened.

109 It is, however, apparent from the examination of the applicants' other complaints carried out above that the comments of 20 November 2008 do not contain any such information. First, it was possible to evaluate the method used by the Commission to calculate the Community industry sales volumes - the validity of which was not disputed by the applicants in the comments of 20 November 2008 - by reading the provisional regulation and the final disclosure document. Second, as regards the prices of raw materials, the applicants had already raised their objections in the comments of 4 August 2008 and the final disclosure document addressed those objections, the applicants providing no new information in the comments of 20 November 2008. Third, as regards the post-importation costs, the applicants were able, in the comments of 20 November 2008, to do no more than refer to a lack of explanations, since the infringement of the rights of the defence established above prevented them from expressing a view on whether the calculation of the price of products originating in China was well founded and from producing new and significant information that was not contained in the objections which they had already set out in the comments of 4 August 2008.

110 In those circumstances, it must be concluded that Article 15(2) of the basic regulation was not breached.

111 The complaint in question must therefore be rejected as unfounded.

112 It follows from the foregoing that the contested regulation must be annulled on the ground that it infringes the rights of the defence and fails to set out reasons in so far as it concerns the applicants.

Costs

113 Under Article 87(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads, the Court may order that the costs be shared or that each party bear its own costs. In the circumstances of the present case, it is appropriate to order the Council, in addition to bearing its own costs, to pay half of the applicants' costs.

114 In accordance with Article 87(4) of the Rules of Procedure, the Commission shall bear its own costs.

On those grounds,

THE GENERAL COURT (Seventh Chamber)

hereby:

1. Annuls Council Regulation (EC) No 1355-2008 of 18 December 2008 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain prepared or preserved citrus fruits (namely mandarins etc.) originating in the People's Republic of China in so far as it concerns Zhejiang Xinshiji Foods Co. Ltd and Hubei Xinshiji Foods Co. Ltd;

2. Orders Zhejiang Xinshiji Foods and Hubei Xinshiji Foods to bear half of their own costs;

3. Orders the Council of the European Union to bear its own costs and to pay half of the costs incurred by Zhejiang Xinshiji Foods and Hubei Xinshiji Foods;

4. Orders the European Commission to bear its own costs.