GC, 8th chamber, February 7, 2013, No T-459/08

THE GENERAL COURT (Eighth Chamber),

Legal context

1 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)) constitutes the basic anti-dumping legislation.

2 Article 1(1) and (2) of the basic regulation (now Article 1(1) and (2) of Regulation No 1225/2009) provides:

'1. An anti-dumping duty may be applied to any dumped product whose release for free circulation in the Community causes injury.

2. A product is to be considered as being dumped if its export price to the Community is less than a comparable price for the like product, in the ordinary course of trade, as established for the exporting country.'

3 Article 2 of the basic regulation (now Article 2 of Regulation No 1225/2009) provides:

'1. The normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country.

However, where the exporter in the exporting country does not produce or does not sell the like product, the normal value may be established on the basis of prices of other sellers or producers.

Prices between parties which appear to be associated or to have a compensatory arrangement with each other may not be considered to be in the ordinary course of trade and may not be used to establish normal value unless it is determined that they are unaffected by the relationship.

...

2. Sales of the like product intended for domestic consumption shall normally be used to determine normal value if such sales volume constitutes 5% or more of the sales volume of the product under consideration to the Community.

However, a lower volume of sales may be used when, for example, the prices charged are considered representative for the market concerned.

3. When there are no or insufficient sales of the like product in the ordinary course of trade, or where because of the particular market situation such sales do not permit a proper comparison, the normal value of the like product shall be calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits, or on the basis of the export prices, in the ordinary course of trade, to an appropriate third country, provided that those prices are representative. A particular market situation for the product concerned within the meaning of the preceding sentence may be deemed to exist, inter alia, when prices are artificially low, when there is significant barter trade, or when there are non-commercial processing arrangements.

4. Sales of the like product in the domestic market of the exporting country, or export sales to a third country, at prices below unit production costs (fixed and variable) plus selling, general and administrative costs may be treated as not being in the ordinary course of trade by reason of price, and may be disregarded in determining normal value, only if it is determined that such sales are made within an extended period in substantial quantities, and are at prices which do not provide for the recovery of all costs within a reasonable period of time.

If prices which are below costs at the time of sale are above weighted average costs for the period of investigation, such prices shall be considered to provide for recovery of costs within a reasonable period of time.

...

5. Costs shall normally be calculated on the basis of records kept by the party under investigation, provided that such records are in accordance with the generally accepted accounting principles of the country concerned and that it is shown that the records reasonably reflect the costs associated with the production and sale of the product under consideration. If costs associated with the production and sale of the product under investigation are not reasonably reflected in the records of the party concerned, they shall be adjusted or established on the basis of the costs of other producers or exporters in the same country or, where such information is not available or cannot be used, on any other reasonable basis, including information from other representative markets.

Consideration shall be given to evidence submitted on the proper allocation of costs, provided that it is shown that such allocations have been historically utilised. In the absence of a more appropriate method, preference shall be given to the allocation of costs on the basis of turnover. Unless already reflected in the cost allocations under this subparagraph, costs shall be adjusted appropriately for those non-recurring items of cost which benefit future and/or current production.

Where the costs for part of the period for cost recovery are affected by the use of new production facilities requiring substantial additional investment and by low capacity utilisation rates, which are the result of start-up operations which take place within or during part of the investigation period, the average costs for the start-up phase shall be those applicable, under the abovementioned allocation rules, at the end of such a phase, and shall be included at that level, for the period concerned, in the weighted average costs referred to in the second sub-paragraph of paragraph 4. The length of a start-up phase shall be determined in relation to the circumstances of the producer or exporter concerned, but shall not exceed an appropriate initial portion of the period for cost recovery. For this adjustment to costs applicable during the investigation period, information relating to a start-up phase which extends beyond that period shall be taken into account where it is submitted prior to verification visits and within three months of the initiation of the investigation.

6. The amounts for selling, for general and administrative costs and for profits shall be based on actual data pertaining to production and sales, in the ordinary course of trade, of the like product, by the exporter or producer under investigation. When such amounts cannot be determined on this basis, the amounts 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 realised by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin.

7. (a) In the case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including the Community, or where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Community for the like product, duly adjusted if necessary to include a reasonable profit margin.

An appropriate market economy third country shall be selected in a not unreasonable manner, due account being taken of any reliable information made available at the time of selection. Account shall also be taken of time-limits; where appropriate, a market economy third country which is subject to the same investigation shall be used.

...

10. A fair comparison shall be made between the export price and the normal value. This comparison shall be made at the same level of trade and in respect of sales made at as nearly as possible the same time and with due account taken of other differences which affect price comparability. Where the normal value and the export price as established are not on such a comparable basis due allowance, in the form of adjustments, shall be made in each case, on its merits, for differences in factors which are claimed, and demonstrated, to affect prices and price comparability. Any duplication when making adjustments shall be avoided, in particular in relation to discounts, rebates, quantities and level of trade. ...

...

(i) Commissions

An adjustment shall be made for differences in commissions paid in respect of the sales under consideration. The term "commissions" shall be understood to include the mark-up received by a trader of the product or the like product if the functions of such a trader are similar to those of an agent working on a commission basis.

...'

4 Article 11(1) to (3) and (5) of the basic regulation (now Article 11(1) to (3) and (5) of Regulation No 1225/2009) provides as follows:

'1. An anti-dumping measure shall remain in force only as long as, and to the extent that, it is necessary to counteract the dumping which is causing injury.

2. A definitive anti-dumping measure shall expire five years from its imposition or five years from the date of the conclusion of the most recent review which has covered both dumping and injury, unless it is determined in a review that the expiry would be likely to lead to a continuation or recurrence of dumping and injury ...

3. The need for the continued imposition of measures may also be reviewed, where warranted, on the initiative of the Commission or at the request of a Member State or, provided that a reasonable period of time of at least one year has elapsed since the imposition of the definitive measure, upon a request by any exporter or importer or by the Community producers which contains sufficient evidence substantiating the need for such an interim review.

An interim review shall be initiated where the request contains sufficient evidence that the continued imposition of the measure is no longer necessary to offset dumping and/or that the injury would be unlikely to continue or recur if the measure were removed or varied, or that the existing measure is not, or is no longer, sufficient to counteract the dumping which is causing injury. ...

...

5. The relevant provisions of this Regulation with regard to procedures and the conduct of investigations, excluding those relating to time-limits, shall apply to any review carried out pursuant to paragraphs 2, 3 and 4. Any such review shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review ...'

5 Recitals 3 and 4 in the preamble to Council Regulation (EC) No 1972/2002 of 5 November 2002 amending the basic regulation (OJ 2002 L 305, p. 1) state:

'(3) Article 2(3) of Regulation (EC) No 384/96 stipulates, inter alia, that where because of a particular market situation sales of the like product do not permit a proper comparison, the normal value is to be calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits, or on the basis of the export prices, in the ordinary course of trade, to an appropriate third country provided that those prices are representative. It is prudent to provide for a clarification as to what circumstances could be considered as constituting a particular market situation in which sales of the like product do not permit a proper comparison. Such circumstances can, for example, occur because of the existence of barter-trade and other non-commercial processing arrangements or other market impediments. As a result market signals may not properly reflect supply and demand which in turn may have an impact on the relevant costs and prices and may also result in domestic prices being out of line with world-market prices or prices in other representative markets. Obviously, any clarification given in this context cannot be of an exhaustive nature in view of the wide variety of possible particular market situations not permitting a proper comparison.

(4) It is considered appropriate to give some guidance as to what has to be done if, pursuant to Article 2(5) of Regulation (EC) No 384/96, the records do not reasonably reflect the costs associated with the production and sale of the product under consideration, in particular in situations where because of a particular market situation sales of the like product do not permit a proper comparison. In such circumstances, the relevant data should be obtained from sources which are unaffected by such distortions. Such sources can be the costs of other producers or exporters in the same country or, where such information is not available or cannot be used, any other reasonable basis, including information from other representative markets. The relevant data can be used either for adjusting certain items of the records of the party under consideration or, where this is not possible, for establishing the costs of the party under consideration.'

6 Article 2.2.1.1 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (OJ 1994 L 336, p. 103, 'the 1994 Anti-Dumping Agreement'), which appears as Annex 1A to the Agreement establishing the World Trade Organisation ('WTO'), approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1), provides:

'For the purpose of paragraph 2, costs shall normally be calculated on the basis of records kept by the exporter or producer under investigation, provided, that such records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sale of the product under consideration. Authorities shall consider all available evidence on the proper allocation of costs, including that which is made available by the exporter or producer in the course of the investigation provided that such allocations have been historically utilised by the exporter or producer, in particular in relation to establishing appropriate amortisation and depreciation periods and allowances for capital expenditures and other development costs. Unless already reflected in the cost allocations under this sub-paragraph, costs shall be adjusted appropriately for those non-recurring items of cost which benefit future and/or current production, or for circumstances in which costs during the period of investigation are affected by start-up operations.'

Background to the dispute

7 On 15 April 2002, the Council adopted Council Regulation (EC) No 658/2002 imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in Russia (OJ 2002 L 160, p. 1). That regulation was amended by Regulation (EC) No 945/2005 of 21 June 2005 (OJ 2005 L 160, p.1).

8 On 30 August 2005, the Commission of the European Communities received a request for a partial interim review pursuant to Article 11(3) of the basic regulation. That request was submitted by the applicant, EuroChem Mineral and Chemical Company OAO (EuroChem MCC), previously called Open Joint Stock Company 'Mineral and Chemical Company EuroChem'.

9 Having determined, after consulting the Advisory Committee, that sufficient evidence existed for the initiation of an interim review, the Commission published on 30 November 2005 a notice of initiation of a partial interim review, pursuant to Article 11(3) of the basic regulation (OJ 2005 C 300, p. 8).

10 On 17 January 2007, a request for an expiry review pursuant to Article 11(2) of the basic regulation was lodged with the Commission following the publication on 19 July 2006 of a notice of impending expiry (OJ 2006 C 167, p. 17). This request was lodged by the European Fertiliser Manufacturers Association.

11 Having determined, after consulting the Advisory Committee, that sufficient evidence existed for the initiation of an expiry review, the Commission published, on 14 April 2007, a notice of initiation of an expiry review of the anti-dumping measures applicable to imports of ammonium nitrate originating in Russia, pursuant to Article 11(2) of the basic regulation (OJ 2007 C 81, p. 2).

12 The investigation for the purposes of the partial interim review in relation to Eurochem MCC's imports and carried out pursuant to Article 11(3) of the basic regulation covered the period 1 July 2004 to 30 June 2005.

13 The investigation for the purposes of the expiry review covered the period 1 April 2006 to 31 March 2007. Examination of trends relevant for the assessment of the likelihood of the continuation or reappearance of injury concerned the period 1 January 2003 to 31 March 2007.

14 All interested parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the amendment of the anti-dumping measures imposed on the applicant and to maintain a definitive anti-dumping duty on ammonium nitrate ('AN' or 'the product concerned') originating in Russia. All interested parties who so requested and showed that there were particular reasons why they should be heard were granted a hearing.

15 On 8 July 2008, the Council adopted Council Regulation (EC) No 661/2008 imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in Russia following an expiry review pursuant to Article 11(2) and a partial interim review pursuant to Article 11(3) of the basic regulation (OJ 2008 L 185, p. 1, 'the contested regulation'). According to the contested regulation, the Council decided, pursuant to Article 1, to modify, so far as the applicant was concerned, the anti-dumping measures applicable to imports of AN originating in Russia and, pursuant to Article 2, to impose definitive anti-dumping measures applicable to that product. The applicant, an exporting producer in Russia, is one of the undertakings concerned by the definitive anti-dumping duties imposed by the contested regulation.

16 Recital 8 to the contested regulation and recitals 31, 32 and 34 to 39 to that regulation, on the establishment of normal value in the context of the partial interim review, read as follows.

'(8) The request for the expiry review was based on the grounds that the expiry of the measures would be likely to result in a continuation or recurrence of dumping and injury to the Community industry. One party claimed that the Commission should have opened ex officio a parallel interim review concerning both dumping and injury in order to take into account changes in circumstances caused by the EU enlargement that took place in 2004 and 2007. The Commission, by several notices ... that were published in the Official Journal of the European Union, has invited interested parties to request the initiation of interim reviews if they submit evidence that the measures would have been significantly different if they were based on information including the new Member States. No such requests and substantiated evidence have been submitted to the Commission. In this regard, it should be noted that enlargement per se, in the absence of such evidence, is not a sufficient basis for a review to be initiated. Therefore, this claim had to be rejected.

...

(31) Only one product type was exported to the Community, therefore normal value was established in relation to this product type. It was examined whether sufficient sales had been made in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation. The domestic selling prices of each transaction were compared to the total cost of production.

(32) In this respect, it should be noted that energy costs, such as electricity and gas, represent a major proportion of the manufacturing cost and a significant proportion of the total cost of production. For the purpose of carrying out the ordinary course of trade test, it had also been examined whether the costs associated with the production and sale of the product under consideration were reasonably reflected in the records of the parties concerned.

...

(34) As concerns gas supplies, in fact, it was established on the basis of data published by internationally recognised sources specialised in energy markets, that the price paid by EuroChem was around one-fifth of the export price of natural gas from Russia. Moreover, all available data indicates that domestic gas prices in Russia were regulated prices, which are far below market prices paid for natural gas, for example in the USA, Canada, Japan and the EU. These four markets account for a total of 46% of worldwide gas consumption, and the prevailing domestic price levels in these four markets appear to reasonably reflect costs. These gas markets can therefore be considered representative within the meaning of Article 2(5) of the basic Regulation. Information available also suggests that domestic sales prices of Russian gas do not even cover costs of the gas supplier, Gazprom.

(35) In view of the above, it was considered that the gas prices paid by NAK Azot during the investigation period could not be used for the purposes of determining the cost of production of the product concerned pursuant to the first sentence of Article 2(5) of the basic Regulation. Therefore, as provided for in Article 2(5) of the basic Regulation, the costs, i.e. in this case, for gas supplies, of NAK Azot had to be adjusted to reflect the costs associated with the production and sale of the like product, during the IRIP. Given that the current review was limited to an examination of the level of dumping by EuroChem, an adjustment on the basis of undistorted prices paid by other producers or exporters in Russia could not be made as no such data was available. In these circumstances, it was considered appropriate to base the adjustment, in accordance with Article 2(5) of the basic Regulation, on information from other representative markets. In this case, the adjusted price was based on the average price of Russian gas when sold for export at the German/Czech border, net of transport costs ("the adjusted Waidhaus price").

(36) The production cost provided by NAK Azot was therefore recalculated in order to take account of the adjusted gas prices. On the basis of this recalculated cost of production, all sales of the domestic product which were directly comparable with the sole product type exported by the company were found to be non-profitable, i.e. not made in the ordinary course of trade. Therefore, normal value had to be constructed. This was done on the basis of the manufacturing costs of the product type exported to the Community, after the adjustment for the gas cost mentioned above, plus a reasonable amount for selling, general and administrative costs ("SG&A costs") and for profits, in accordance with [Articles 2(3) and (6)] of the basic Regulation

(37) SG&A costs and profit could not be established on the basis of the chapeau of Article 2(6) of the basic Regulation because NAK Azot did not have representative domestic sales of the product concerned in the ordinary course of trade. Article 2(6)(a) of the basic Regulation could not be applied, since there is only one other producer subject to the investigation (Nevinka Azot). Article 2(6)(b) was not applicable either, since the manufacturing cost of NAK Azot for products belonging to the same general category of goods would also need to be adjusted in respect of gas costs, for the reasons indicated above. Therefore, SG&A costs and profit were established pursuant to Article 2(6)(c) of the basic Regulation.

(38) In accordance with Article 2(6)(c) of the basic Regulation, the SG&A costs were based on a reasonable method. The North American market showed a significant volume of domestic sales and a considerable level of competition from both domestic and foreign companies. In this respect, consideration was given to publicly available information relating to major companies operating in the fertilisers' business sector. It was found that the corresponding data from North American (USA and Canadian) producers would be the most appropriate for the purpose of the investigation, given the large availability of reliable and complete public financial information from listed companies in this region of the world. Therefore, SG&A costs and profit were established on the basis of the weighted average SG&A costs and profit from three North American producers, which were found to be amongst the largest companies in the nitrogen fertilisers' sector, with regard to their domestic sales of the same general category of products (nitrogen fertilisers). These three producers were considered to be representative of the nitrogen fertilisers' business (on average over 80% of the turnover of the company/business segment) and their SG&A costs and profit thereby representative of those normally incurred by companies operating successfully in that business segment.

(39) The percentage for SG&A costs was 6.9%. The calculated average profit margin was 9.1%. It should be noted that the amount for profit so established did not exceed the profit realised by the Russian producers on sales of products of the same general category on their domestic market.'

17 Recital 50 to the contested regulation is worded as follows:

'(50) In view of the conclusions reached with regard to dumping and the lasting nature of the changed circumstances, the individual anti-dumping duty on imports of the product concerned in respect of EuroChem should be amended in order to reflect the new dumping margin found.'

18 At recitals 56 to 79 to the contested regulation, the Council explained how the normal value was established in the context of the expiry review. The reasoning given is, mutatis mutandis, equivalent to the reasoning with regard to the request for a review, apart from a number of additional clarifications. At recital 56 to the contested regulation, the Council stated as follows:

'The Commission examined whether the domestic sales could be considered as being made in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation. To this end, the cost of production of the product produced and sold by the cooperating exporting producers on the domestic market was examined.'

Procedure and forms of order sought by the parties

19 By application lodged at the Registry of the Court on 6 October 2008, the applicant brought the present action.

20 The applicant claims that the Court should:

- annul the contested regulation, in that it imposes an anti-dumping duty on the applicant, its manufacturing subsidiaries and its related companies, indicated at recital 23(a) and (c) to and in Articles 1(2)(a) and 2(2)(a) of the contested regulation;

- order the Council to pay the costs.

21 The Council contends that the Court should:

- dismiss the action;

- order the applicant to pay the costs.

22 Following an application to intervene submitted by the Commission on 12 January 2009, the latter was, by order of the President of the First Chamber of the Court of 2 March 2010, granted leave to intervene in support of the form of order sought by the Council. The Commission lodged a statement in intervention at the Court Registry on 14 April 2010 and the applicant and the Council responded by pleadings lodged on 16 July and 23 July 2010 respectively.

23 By order of the President of the First Chamber of the Court dated 3 February 2009, the present case was stayed until 3 November 2009.

24 Following an application to intervene submitted by Fertilizers Europe on 9 February 2011, the latter was, by order of the President of the Eighth Chamber of the Court of 11 May 2011, granted leave to intervene in support of the form of order sought by the Council.

25 In the written observations on Fertilizers Europe's application to intervene, lodged at the Court Registry on 18 March 2011, the applicant argued that Fertilizers Europe's claim, submitted in the application to intervene, that the applicant should be ordered to pay its costs was inadmissible, since Article 40 of the Statute of the Court of Justice of the European Communities provides that the application to intervene is to be limited to supporting the form of order sought by one of the parties. The applicant further submits that it is this Court's practice that orders on costs incurred by non-institutional interveners take account of the relevance of the intervention and the extent to which it assists the Court in clarifying the issues before it. In the present case, if Fertilizers Europe's intervention is limited to making observations during the oral procedure, such intervention would not contribute substantially to the Court's analysis. The applicant claims that Fertilizers Europe should be ordered to bear the costs incurred in its intervention, pursuant to the third subparagraph of Article 87(4) of the Rules of Procedure of the Court. The applicant also claims that Fertilizers Europe should be ordered to pay the applicant's costs incurred in the context of the intervention.

26 As the applicant had lodged an application for confidential treatment pursuant to Article 116(2) of the Rules of Procedure on 18 March 2011, the President of the Eighth Chamber of the Court, in his order of 11 May 2011, reserved the decision on whether the applicant would receive the Report for the Hearing in order to identify the elements that might be considered to be confidential.

27 By letter of 14 November 2011, the Court Registry provided a draft of the Report for the Hearing to the applicant, and the applicant stated, by letter dated 29 November 2011, that the draft did not contain any elements that might be considered to be confidential.

Law

28 In support of its action, the applicant puts forward two pleas in law, alleging, first, infringement of Article 11(3) of the basic regulation and/or breach of an essential procedural requirement and also a manifest error of assessment and, second, infringement of Articles 1 and 2 of the basic regulation.

First plea, alleging infringement of Article 11(3) of the basic regulation and/or breach of an essential procedural requirement, and also a manifest error of assessment

29 By its first plea, the applicant claims that there has been an infringement of Article 11(3) of the basic regulation and/or a breach of an essential procedural requirement, in that, in the applicant's submission, the Commission and the Council ('the institutions') ought to have initiated of their own motion a partial interim review relating to the relative aspects of the injury, in parallel with the expiry review. Consequently, the institutions made a manifest error of assessment in the expiry review.

30 The applicant submits that the Commission was the only entity in a position to initiate such an interim review, since it had in its possession relevant sufficient evidence justifying the initiation of such a review, in particular the information submitted by the European Fertilizer Manufacturers Association on 17 January 2007.

31 The applicant claims that the institutions could not, in order to justify the expiry review, assume the continuation or a likelihood of recurrence of injury for the Community industry, since such injury had not been previously established for a Community industry covering 27 Member States. The likelihood of recurrence of injury ought to have been examined in a partial interim review and not an expiry review.

32 In the reply, the applicant claims that it also raised the plea under Article 11(1) of the basic regulation, which provides that a measure is to apply only for as long and to the extent to which it is necessary in order to counteract dumping which is causing injury to the Community industry.

33 Still in the reply, the applicant observes that the Council was wrong to claim in its defence that the applicant had never requested an interim review.

34 Lastly, the applicant maintains that the fact that the data relating to the Union consisting of 27 Member States were used in the expiry review does not remove the manifest error of assessment.

35 The Court notes that the applicant fails to show how the lawfulness of the contested regulation could be affected by the alleged inaction on the part of the institutions. The applicant merely asserts that they ought to have initiated a partial interim review of their own motion. In addition, it should be recalled that Article 232 EC provides that an action may be brought if the Commission fails to act. The first plea in law must therefore be rejected as ineffective.

36 In addition, it should be recalled that, although under Article 11(3) of the basic regulation the Commission may request that the continued imposition of measures be reviewed where warranted, it is settled case-law that, in the sphere of measures to protect trade, the institutions enjoy a broad discretion by reason of the complexity of the economic, political and legal situations which they have to examine. The same applies as regards the complex technical assessments made by the institutions (see Case T-369/08 EWRIA and Others v Commission [2010] ECR II-6283, paragraph 77 and the case-law cited).

37 According to case-law, in that sphere review by the Courts of the Union of assessments made by the institutions is limited to verifying that the relevant procedural rules have been complied with, that the facts on which the contested choice is based have been accurately stated and that there has been no manifest error of assessment of the facts or misuse of power (EWRIA and Others v Commission, paragraph 36 above, paragraph 78).

38 The Commission has a broad measure of discretion for the purposes of deciding whether it is necessary to continue to impose anti-dumping measures, under Article 11(3) of the basic regulation (EWRIA and Others v Commission, paragraph 36 above, paragraph 79).

39 The Council therefore rightly noted that, notwithstanding the enlargement of the Union to 25, and then to 27, Member States, the Commission still had a discretion to decide whether it was appropriate to initiate an interim review of its own motion.

40 It is not therefore clear, in any event, that the Commission made a manifest error of assessment in failing to initiate of its motion an interim review of the anti-dumping measures in question following the enlargement to 25, and then to 27, Member States.

41 Moreover, the Commission had not received a request for a partial interim review following the publication of a notice inviting the undertakings concerned to come forward, after the enlargement of the European Union on 1 May 2004, bearing in mind that the application for a partial interim review lodged by the applicant on 30 August 2005 was limited to that undertaking's dumping margin and was not based on the enlargement in question.

42 The first plea in law must therefore be rejected.

The second plea, alleging infringement of Articles 1 and 2 of the basic regulation

43 By its second plea, the applicant claims that there has been an infringement of Articles 1 and 2 of the basic regulation. The applicant divides this plea into three parts, by which in essence it submits, first, that, for the purposes of calculating normal value, it was incorrectly found that the production costs and sales costs of the product concerned were not reasonably reflected in the applicant's accounts and that it was therefore necessary to apply an adjustment. Second, the applicant states that (i) the adjustment made for the price of Russian gas was incorrectly based on the price at Waidhaus (Germany), (ii) the export duty of 30% applicable to Russian gas was not deducted from the amount of that adjustment and (iii) an adjustment of 15% was wrongly made to take account of local distribution costs. Third, the applicant submits that the sales, administrative and other general costs and also the commissions of related companies forming part of the applicant's single economic entity were incorrectly deducted from its export price to the first independent customer.

44 It should be observed, as a preliminary point, that when the institutions, acting under the basic regulation, adopt specific protective measures against dumping, they enjoy a wide discretion by reason of the complexity of the economic, political and legal situations they have to examine (Case C-69/89 Nakajima v Council [1991] ECR I-2069, paragraph 86; Case C-26/96 Rotexchemie [1997] ECR I-2817, paragraph 10; Case T-164/94 Ferchimex v Council [1995] ECR II-2681, paragraph 131; Case T-162/94 NMB France and Others v Commission [1996] ECR II-427, paragraph 72; Case T-155/94 Climax Paper v Council [1996] ECR II-873, paragraph 98; Case T-170/94 Shanghai Bicycle v Council [1997] ECR II-1383, paragraph 63; and Case T-118/96 Thai Bicycle v Council [1998] ECR II-2991, paragraph 32).

45 It follows that review of such assessments by the Courts of the Union must be limited to verifying whether the relevant procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated and whether there has been a manifest error of assessment of the facts or a misuse of power (Case 240/84 NTN Toyo Bearing and Others v Council [1987] ECR 1809, paragraph 19; Case 258/84 Nippon Seiko v Council [1987] ECR 1923, paragraph 21; Case C-156/87 Gestetner Holdings v Council and Commission [1990] ECR I-781, paragraph 63; Rotexchemie, paragraph 44 above, paragraph 11; Climax Paper v Council, paragraph 44 above, paragraph 98; Shanghai Bicycle v Council, paragraph 44 above, paragraph 64; and Thai Bicycle v Council, paragraph 44 above, paragraph 33).

First part of the second plea

46 In this first part, the applicant seeks to show that, for the purposes of calculating normal value, the institutions incorrectly applied the principle of adjustment and also a method intended for non-market economy countries, which is contrary not only to the wording of Article 2(5) of the basic regulation but also to that provision read in conjunction with the other provisions of Articles 1 and 2 of the basic regulation (first complaint) and, furthermore, to the provisions of the 1994 Anti-Dumping Agreement (second complaint).

- First complaint

47 In the applicant's submission, the wording of Article 2(5) of the basic regulation allows the institutions to ascertain that the main costs associated with production and sales are duly entered and accounted for in the producers' records. However, it does not provide that the institutions can ascertain whether those costs are reasonable by reference to the price levels on a different market. The wording of Article 2(5) of the basic regulation does not mean that it is necessary to ascertain the 'reliability' of the main elements of the production and sales costs of the product concerned in the light of the prices/values of similar inputs exported to the European Union or found on unregulated third-country markets.

48 The applicant further submits that Article 2(5) of the basic regulation, read in conjunction with the other provisions of Article 1 and Article 2(1) to (6) of that regulation, does not endorse the adjustment made to the price of gas by the institutions in the present case.

49 First of all, the Court notes that Article 2(3) of the basic regulation lays down, first, the criteria for disregarding the method for establishing normal value based on the prices on the domestic market of the exporting country and, second, the alternative methods for calculating that value. Article 2(3) provides that one of the grounds for having recourse to an alternative method is the fact that there are no sales of the like product in the ordinary course of trade.

50 Article 2(4) of the basic regulation sets out the conditions under which sales may be treated as not being in the ordinary course of trade. As provided in Article 2(4), sales of the like product in the domestic market of the exporting country, or export sales to a third country, at prices below unit production costs plus selling, general and administrative costs may be treated as not being in the ordinary course of trade by reason of price, and may be disregarded in determining normal value, only if it is determined that such sales are made within an extended period in substantial quantities, and are at prices which do not provide for the recovery of all costs within a reasonable period of time.

51 In the present case, it is apparent from the contested regulation and from the file that the institutions disregarded the primary methods of calculation on the ground that the sales had not been made in the ordinary course of trade. They then resorted to the method laid down in Article 2(3) of the basic regulation, according to which the normal value of the product is calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits ('the constructed normal value').

52 The parties disagree as to the determination of the cost of production of the product concerned pursuant to the first subparagraph of Article 2(5) of the basic regulation. More specifically, the dispute concerns the calculation of the cost of gas in the production of the product concerned.

53 It is not in dispute that gas is the major input of the product concerned and that the price of gas from which the applicant benefited in producing the product concerned was regulated in Russia. The cost of gas actually borne by the applicant is not at issue, since the Council does not argue that that cost was different from that set out in the applicant's accounts. The applicant complains that the Council failed to calculate the normal value of the product concerned on the basis of that cost and used another, higher price of gas for that calculation, taken from a market other than the domestic market in Russia.

54 It is apparent from a combined reading of the first sentence of Article 2(3), the first and second subparagraphs of Article 2(4) and the first sentence of the first subparagraph of Article 2(5) of the basic regulation that, in order to calculate the cost of production, costs must normally be calculated on the basis of records kept by the party under investigation.

55 The institutions contend that the first sentence of the first subparagraph of Article 2(5) contains two clarifications, which may be regarded as two requirements, namely (i) that the records must be kept in accordance with the generally accepted accounting principles of the country concerned and (ii) that the records must reasonably reflect the costs associated with the production and sale of the product under consideration. The second requirement entitles the institutions to ascertain whether the records 'reasonably' reflect the costs even if the generally accepted accounting principles of the country concerned are observed, and, where necessary, to make adjustments on the basis of sources of information other than the records, in accordance with the second sentence of the first subparagraph of Article 2(5) of the basic regulation.

56 The Council does not contend that the first requirement has been infringed in the present case. On the other hand, it argues that the applicant's records do not reasonably reflect the costs associated with the production of the product concerned, given that the price of gas is artificially low, being considerably less than the prices of gas charged on non-regulated markets. Accordingly, the Council claims that it was entitled, in accordance with the first subparagraph of Article 2(5) of the basic regulation, to adjust the price of gas on the basis of information from other representative markets.

57 It must therefore be examined whether the Council was entitled to disregard the cost of gas actually borne by the applicant, as stated in its accounting records, for producing the product concerned, on the ground that - in the Council's view - that cost was artificially low because of the regulation of the price of gas in Russia, and whether the Council was therefore entitled to adjust that cost upwards taking into account the price of gas on the market which it regarded as representative.

58 The first subparagraph of Article 2(5) of the basic regulation provides that production costs must normally be calculated on the basis of records kept by the party under investigation. Consequently, the costs are normally calculated using information from those records.

59 The second and third subparagraphs of Article 2(5) of the basic regulation contain specific provisions on (i) the allocation of costs and (ii) start-up costs. Those subparagraphs provide for the possibility of adjusting the costs in the records, and those costs may be adapted and allocated in a different manner under certain conditions.

60 It is also apparent from the first subparagraph of Article 2(5) of the basic regulation that the records of the party concerned do not serve as a basis for calculating normal value if the costs associated with the production of the product under investigation are not reasonably reflected in those records. In that case, the second sentence of the first subparagraph provides that the costs are to be adjusted or established on the basis of sources of information other than those records. That information may be taken from the costs incurred by other producers or exporters or, when that information is not available or cannot be used, any other reasonable source of information, including information from other representative markets.

61 In that connection, it must be observed that the second sentence of the first subparagraph of Article 2(5) of the basic regulation, concerning the method for calculating the normal value, was inserted by Regulation No 1972/2002.

62 It is apparent from recital 4 to that regulation that the insertion of the second sentence was designed to give some guidance as to what has to be done if the records do not reasonably reflect the costs associated with the production and sale of the product under consideration, essentially in particular market situations in which sales of the like product do not permit a proper comparison. In such a case, that recital states that the data should be obtained from sources which are unaffected by such distortions.

63 In recital 4 to Regulation No 1972/2002, it is also stated that recourse may be had to the costs of other producers or exporters in the same country or, where such information is not available or cannot be used, any other reasonable basis, including information from other representative markets. It is also apparent from that recital that the relevant data can be used either for adjusting certain items of the records of the party under consideration or, where this is not possible, for establishing the costs of that party.

64 In the present case, the Council argued before the Court that there was no ordinary course of trade, as the price of gas, the major input of the product concerned, was regulated so that it was artificially low on the domestic market. The applicant did not deny that the price of gas on the Russian market was regulated and that it represented a considerable proportion of the cost of the product concerned.

65 Since the price of gas in Russia was regulated, it may indeed be presumed that the cost of producing the product concerned was affected by a distortion of the domestic Russian market regarding the price of gas, as that price was not the result of market forces.

66 In addition, the interpretation of the first sentence of Article 2(5) of the basic regulation put forward by the applicant, namely that the costs of production are calculated solely on the basis of the records of the party under consideration, would be tantamount in fact to precluding recourse to the constructed normal value in particular where the costs of production do not result from the ordinary course of trade, even though such recourse is expressly provided for in Article 2(3) of that regulation.

67 The institutions were therefore fully entitled to conclude that one of the items in the applicant's records could not be regarded as reasonable and that, consequently, that item had to be adjusted by having recourse to other sources from markets which the institutions regarded as more representative and, consequently, the price of gas had to be adjusted.

68 As regards the argument that only Article 2(7) of the basic regulation allows the institutions to establish the normal value by reference to price/cost data in a market-economy third country rather than to price/cost data in the exporting country or the country of origin, the applicant submits that the scope of Article 2(7) is restricted to an exhaustive list of non market-economy countries. The applicant states that, as at the date of the initiation of the expiry review in the present case, the Russian Federation was not on the list of countries in question. It had obtained country-wide market-economy status in 2002 and such status constitutes an irrebuttable presumption that the costs of investigated producers based in that country are sufficiently reliable for the normal value to be established on the basis, in particular, of Article 2(3) to (6) of the basic regulation.

69 In the present case, the normal value was not established on the basis of Article 2(7) of the basic regulation, since the Russian Federation was not, at the material time, a country covered by Article 2(7), and Article 2(1) to (6) of the basic regulation applied to the facts. As noted in paragraph 60 above, the first subparagraph of Article 2(5) of the basic regulation allows, under certain conditions, information from markets other than that of the exporting country or the market of origin to be taken into account.

70 The applicant also submits that the interpretation of Article 2(5) of the basic regulation proposed by the institutions has a number of inconsistent results.

71 First, a producer enjoying low prices on the domestic market of major inputs of its products will be in a dilemma, as it can either not increase its prices, in which case it may well be considered to be importing dumped products into the European Union, or increase its prices in order to avoid any anti-dumping investigation, in which case its prices may well become prohibitive on the domestic market. The same producers, in order to avoid an anti-dumping investigation, will be induced to enter in their records, in breach of their national law, not the real costs of inputs of their products but the average cost of those inputs on foreign unregulated markets.

72 In that connection, as the Council correctly notes, the institutions' approach does not force the applicant to increase its domestic sales price. The anti-dumping measure in the contested regulation does not restrict the applicant's ability to charge whatever prices it wishes in the Russian market (see, to that effect, Joined Cases T-159/94 and T-160/94 Ajinomoto and NutraSweet v Council [1997] ECR II-2461, paragraph 196).

73 Second, the applicant submits that the costs of producing a product in a market economy country might be considered too low by comparison with the costs of an equivalent product found in the European Union or on other foreign markets. The anti-dumping investigation carried out by the institutions in the present case unjustifiably replaces the rules on State aid and more particularly Council Regulation (EC) No 2026/97 of 6 October 1997 on protection against subsidised imports from countries not members of the European Community (OJ 1997 L 288, p. l).

74 In that connection, it must be noted that, as is apparent from recital 5 to Regulation No 2026/97, both the basic regulation and Regulation No 2026/97 seek to lay down in sufficient detail the requirements for the application of those two trade defence instruments.

75 However, nothing indicates that the issue in the present case, which concerns the legislation obliging Gazprom to supply natural gas at a low price in Russia, ought to have been considered only from the perspective of State aid. It must be noted that the applicant has not adduced any evidence to that effect.

76 Nor does anything indicate that the mere fact that the issue might be examined from the perspective of State aid prevented the institutions from analysing the present case also from the perspective of the basic regulation.

77 As the Council noted at the hearing, both the Commission and itself have already examined certain situations from both State aid and anti-dumping perspectives (Case T-462/04 HEG and Graphite India v Council [2008] ECR II-3685).

78 At most, as provided for by Article 14(1) of the basic regulation and Article 24(1) of Regulation No 2026/97, no product is to be subject to both anti-dumping and countervailing duties for the purpose of dealing with one and the same situation arising from dumping or from export subsidisation.

79 It follows from the foregoing that the first complaint is unfounded.

- The second complaint

80 The applicant submits that the provisions of the basic regulation are intended to implement the rules of the 1994 Anti-Dumping Agreement and that the institutions are required to interpret and apply the provisions of the basic regulation in accordance with that agreement.

81 In that connection, it is apparent from settled case-law that, in view of their nature and structure, the WTO agreements are not in principle among the rules in the light of which the Courts of the European Union are to review the legality of measures of the EU institutions under the first paragraph of Article 230 EC (Case C-76/00 P Petrotub and Republica v Council [2003] ECR I-79, paragraph 53, and Case T-45/06 Reliance Industries v Council and Commission [2008] ECR II-2399, paragraph 87).

82 However, where the European Union intended to implement a particular obligation assumed in the context of the WTO, or where the EU measure refers expressly to precise provisions of the WTO agreements, it is for the Courts of the European Union to review the legality of the EU measure in question in the light of the WTO rules (Petrotub and Republica v Council, paragraph 81 above, paragraph 54; Case C-351/04 Ikea Wholesale [2007] ECR I-7723, paragraph 30; and Reliance Industries v Council and Commission, paragraph 81 above, paragraph 88).

83 It is apparent from recital 5 to the basic regulation that the purpose of that regulation is, inter alia, to transpose into EU law as far as possible the new and detailed rules contained in the 1994 Anti-Dumping Agreement, which include, in particular, those relating to the calculation of the dumping margin, so as to ensure a proper and transparent application of those rules (Petrotub and Republica v Council, paragraph 81 above, paragraph 55).

84 The Community therefore adopted the basic regulation in order to satisfy its international obligations arising from the 1994 Anti-Dumping Agreement and, by means of Article 2(5) of that regulation, it intended to implement the particular obligations laid down by Article 2.2.1.1 of the 1994 Anti-Dumping Agreement (see, to that effect, Petrotub and Republica v Council, paragraph 81 above, paragraph 56).

85 It follows that Article 2(5) of the basic regulation must, so far as possible, be interpreted in the light of Article 2.2.1.1 of the 1994 Anti-Dumping Agreement (see, to that effect, Petrotub and Republica v Council, paragraph 81 above, paragraph 57, and Reliance Industries v Council and Commission, paragraph 81 above, paragraph 91, and the case-law cited).

86 To that end, it must be noted, first, that the applicant refers to one of the final drafts preceding the adoption of the 1994 Anti-Dumping Agreement which provided, so far as the provisions which became Article 2.2.1.1 of that agreement are concerned, that '[a]s a rule, costs should be allocated in accordance with the generally accepted accounting principles of the exporting country, provided that these principles reasonably reflect the costs associated with the production and sale of that product'. It follows from that wording that the initial object of Article 2.2.1.1 of that agreement, and consequently of Article 2(5) of the basic regulation, was to ensure that a producer under investigation applied good accounting principles objectively reflecting the actual costs borne by the producer under investigation and not to ascertain whether the prices of the inputs paid by the producer correspond to prices on unregulated markets.

87 However, invoking a provision in draft form is not sufficient to demonstrate that the intention of the drafters of that provision remained unchanged, especially if it appears that the wording of the provision in its final version is different from the corresponding provision at the draft stage, as in essence the Council correctly notes.

88 Second, it is apparent that the wording of Article 2.2.1.1 of the 1994 Anti-Dumping Agreement does not differ significantly from the text of the first sentence of the first subparagraph of Article 2(5) of the basic regulation which seeks to ensure that records are kept in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sale of the product under consideration.

89 However, as the Council correctly noted at the hearing, the provisions mentioned in the second sentence of the first subparagraph of Article 2(5) of the basic regulation are not mentioned in the 1994 Anti-Dumping Agreement. An interpretation in the light of the 1994 Anti-Dumping Agreement cannot therefore be relied upon fully in relation to those provisions covering the situation where the costs of the product concerned are not reasonably reflected in the records.

90 The second complaint is therefore unfounded.

91 It follows from all of the foregoing that the first part of the second plea is unfounded.

The second part of the second plea

92 The applicant claims that there has been (i) an infringement of the second sentence of the first subparagraph of Article 2(5) of the basic regulation, (ii) a manifest error of assessment and also (iii) a failure to state reasons in that, by the contested regulation, the Council applied the adjustment of the gas price paid, on the basis of the Waidhaus price, did not deduct from the amount of the adjustment the export duty of 30% applicable to Russian gas, and made an upwards adjustment of 15% to take account of local distribution costs. The applicant contests in that regard the conclusion in recital 35 to the contested regulation.

93 Recital 35 is worded as follows:

'[I]t was considered appropriate to base the adjustment, in accordance with Article 2(5) of the basic Regulation, on information from other representative markets. In this case, the adjusted price was based on the average price of Russian gas when sold for export at the German/Czech border, net of transport costs ...'

94 The applicant maintains, first, that if the institutions had chosen a different basis, such as the export price of Russian gas to the Baltic States or any representative market with gas price levels closest to the level of the applicant's levels of gas prices, the dumping margin would have been negative or different. The institutions ought to have chosen a 'reasonable basis' within the meaning of the second sentence of Article 2(5) of the basic regulation rather than the Waidhaus price.

95 The manifest error of assessment is the consequence of the fact that, first of all, the representative markets indicated by the Commission as possible bases for the adjustment (namely the European Union, the United Kingdom, the United States, Canada or Japan) have the highest gas prices in the world and are not close to the levels of gas prices paid by the applicant.

96 Next, the adjustment relating to the gas price was applied on the basis of an intra-Community price, namely the German/Czech border, which reflects not only the production and sales costs of the gas but also the intra-Community profit margin for the Waidhaus hub. The basis for the adjustment applied amounts to taking the view that, for the greater part of its total production costs, the applicant would be based at the German/Czech border and would purchase gas directly on the Waidhaus market. Placing the applicant in a position in which it produces the product concerned in Russia, while paying export duty and intra-Community profit margins, does not constitute a 'reasonable basis' within the meaning of Article 2(5) of the basic regulation.

97 Lastly, the Waidhaus market merely reflects Waidhaus's geographic location, namely on the route of the main gas pipelines between Russia and the European Union, and the number of gas supply contracts and the volume of gas negotiated. Those factors are not relevant for the qualification of the price of gas at Waidhaus as a 'reasonable basis'.

98 Second, the applicant submits that the Council also made a manifest error of assessment and failed to state reasons in the contested regulation when it refused to deduct the export duty of 30% on Russian gas, while deducting the costs of transport, as is clear from recital 35 to the contested regulation.

99 The reasoning followed is inconsistent and contradictory, since, in the applicant's submission, just as Russian consumers do not have to pay for the gas to be transported from Russia to Waidhaus - which is why the costs of transport of the gas were deducted - the duty of 30% charged on exports of gas from Russia, which the applicant never pays for the production of the product concerned in Russia, ought to have been deducted as well.

100 The applicant further submits that, even if the institutions intended to penalise the dual pricing applied by the Russian authorities in the gas sector, that did not release them from their duty to establish the adjustment relating to the price of gas on a reasonable basis within the meaning of Article 2(5) of the basic regulation.

101 In that connection, the Court points out, as regards, in the first place, the choice of Waidhaus as the reference price, that the institutions are not required to consider every reference price during an anti-dumping proceeding, but must be prepared to examine in depth the proposals made by the parties, in the event of doubt concerning the choice of the reference price (see, to that effect, Case C-16/90 Nölle [1991] ECR I-5163, paragraph 32).

102 In the present case, it is not apparent that, in the contested regulation, the Council made a manifest error of assessment in selecting the price of gas at Waidhaus. That price seems reasonable on a number of accounts.

103 It is not disputed that Waidhaus is the main hub for Russian gas sales to the European Union. It is apparent from the case-file that Waidhaus is a German town on the route of the main gas pipelines between Russia and the European Union and, in terms of the number of gas supply contracts negotiated and the volume of gas concerned, is the main hub for gas exported by Russian producers to the European Union.

104 The price of gas negotiated at Waidhaus is therefore that charged by the Russian sellers to their European customers and not an intra-Community price, contrary to the applicant's assertions in the application.

105 Next, having regard to the volume of gas concerned and the number of contracts negotiated, there is no indication that the price of Russian gas at Waidhaus is not the result of market forces free from distortion.

106 The applicant referred to the Commission Decision of 8 July 2009 relating to a proceeding under Article 81 of the EC Treaty (Case COMP/39.401 - E.ON/GDF) (Summary in OJ 2009 C 248, p. 5), in order to argue that the agreement penalised by such a decision had affected the data used by the Commission to calculate the adjustment in the present case. In the applicant's submission, it follows from that decision that the price of the Russian gas at Waidhaus is not the result of market forces.

107 It is sufficient to note that, although it relates to sales of gas from Russia, the E.ON/GDF decision only concerns the examination of a market-sharing agreement in Germany and France between E.ON and GDF for sales of gas to their customers. The decision does not relate to an examination of the market for the wholesale export of Russian gas to the European Union as a whole, or the examination of the relationships between E.ON and GDF with their supplier of Russian gas.

108 Lastly, although the applicant disputes that the Waidhaus price is much higher than the price of the gas sold on the Russian domestic market, it has not argued that that the Waidhaus price is indeed higher than the price of gas negotiated in the United Kingdom, the United States or Canada. The applicant stated that the price of the gas from Qatar, Trinidad, Australia and Libya was lower than the Waidhaus price, although it did not specify whether the gas imported from those countries amounted to a significant or representative volume for the European Union. The institutions did not therefore choose the highest reference price on the market. Nor is it certain that the export price of gas to the Baltic States is not comparable to that of the gas which passes through Waidhaus.

109 As regards, furthermore, the decision not to deduct the export tax collected in Russia, with only transport costs being deducted, the applicant maintains that that decision is inconsistent and mistaken, and relies in that regard on a case that led to the adoption of Council Regulation (EC) No 954/2006 of 27 June 2006 imposing definitive anti-dumping duty on imports of certain seamless pipes and tubes, of iron or steel originating in Croatia, Romania, Russia and Ukraine, repealing Council Regulations (EC) No 2320/97 and (EC) No 348/2000, terminating the interim and expiry reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating, inter alia, in Russia and Romania and terminating the interim reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating, inter alia, in Russia and Romania and in Croatia and Ukraine (OJ 2006 L 175, p. 4).

110 The Council replies that, in that case, the Commission and itself deducted only the customs duties payable on domestic sales of gas but made no deduction for export tax.

111 It is apparent from recital 97 to Regulation No 954/2006 that the costs of Russian gas were adjusted on the basis of the price of gas for export to Western Europe, net of transport costs and excise duty. No reference is made to export tax, contrary to what the applicant claims.

112 In any event, the Council justified export tax not being deducted by the fact that Gazprom's prices were not influenced by the amount of the export tax. The Council also stated that those prices were influenced only by what price its customers were willing to pay. At the hearing, the Council repeated its view that what matters is the price paid at Waidhaus, and that knowing the composition of that price is irrelevant.

113 The applicant has not been able to explain or to show how the price setting by Gazprom at Waidhaus could have been influenced by the amount of the export tax.

114 It must therefore be found that the Council has not made a manifest error of assessment in not deducting that tax from the price paid at Waidhaus.

115 Since the applicant has also simply denied, without adducing further evidence, that the local distribution costs used to calculate the constructed normal value were reasonable, it must also be found that the Commission did not make a manifest error of assessment in that regard.

116 Moreover, it is important to note that, since transport costs had been deducted in order to calculate the price of gas, it appears logical to adjust that calculation in addition by taking into account local distribution costs.

117 In recital 42 to the contested regulation, which the applicant has not challenged, the Council explained why it had decided to make an upwards adjustment in order to take into account local distribution costs. In that connection, the Council stated that the Russian exporters had not been able to submit any further information or evidence which showed whether distribution costs were indeed included in the Waidhaus price. It further stated that, since domestic customers were purchasing the gas from local suppliers, it had to be assumed that they would have to pay, at least for sales services, local distribution costs which were not as such included in the unadjusted Waidhaus price.

118 Lastly, the Court rejects the applicant's argument alleging failure to state the reasons for the refusal to deduct the export tax on Russian gas and the adjustment made for local distribution costs. The statement of reasons for the contested regulation must be appraised having regard, in particular, to the information disclosed to the applicant and to the observations which it has made during the administrative procedure (Case T-410/06 Foshan City Nanhai Golden Step Industrial v Council [2010] ECR II-879, paragraph 127).

119 In this case, it is apparent from Annexes A2, A6 and A7 to the application that the applicant had been informed of (i) the conclusions regarding SG&A costs, (ii) the non-deduction of export tax and (iii) the upwards adjustment for local distribution costs with regard to the calculation of normal value, which relieved the Council of the need to repeat those explanations in the body of the contested regulation, so that it could confine itself to the matters of law and of fact on which that regulation is based. An example of this is the clarification at recital 76 to the contested regulation as to why the adjustment was made in respect of local distribution costs, as indicated in paragraph 117 above.

120 The second part of the second plea is therefore unfounded.

The third part of the second plea

121 The applicant claims that there has been an infringement of Article 2(10) of the basic regulation and a manifest error of assessment in that, in the contested regulation, the Council deducted from the applicant's export price to the first independent customer the sales, general and administrative costs and also the commissions of the related companies forming part of the applicant's single economic entity. The applicant contests, in that regard, recitals 40 to 42 to the contested regulation, in particular in so far as the Council reasoned, in recital 42, that:

'Due allowance in the form of adjustments was made for differences affecting price and price comparability in accordance with Article 2(10) of the basic Regulation. Accordingly, adjustments were made for differences in transport, handling, loading and ancillary costs, packing, credit and commissions, where applicable and supported by verified evidence. In this respect, since export sales are made via the related traders mentioned above, and as these related traders were found to have functions similar to those of an agent working on a commission basis, an adjustment for each of these traders was made to the export price, pursuant to Article 2(10)(i) of the basic Regulation. In the absence of cooperation from Community importers, this adjustment was made at the level of 1.5%, since this level reflected commissions paid to independent agents involved in the trade of the product concerned in the original investigation.'

122 In the applicant's submission, the adjustments listed in Article 2(10) of the basic regulation are neither mandatory nor automatic and the party claiming the adjustment bears the burden of proof.

123 In the first place, it is necessary to outline the relevant factual context in which the institutions applied, in the present case, Article 2(10) of the basic regulation, which provides that the comparison between the normal value and the export price is to be made at the same level of trade and in respect of sales made at as nearly as possible the same time, with due account being taken of other differences which affect price comparability.

124 For the purposes of the application of that provision, the Council explained that the applicant and its manufacturing companies did not sell the product concerned directly to customers in the United States. It explained that the sales were carried out in the following manner: the manufacturing companies - subsidiaries of the applicant - concluded an agency agreement with the applicant, under which the latter received a commission for sales of the product. The applicant, as an agent, ensured that the product was sold by its manufacturing companies to two trading companies, also subsidiaries of the applicant, the first located in the British Virgin Islands, but which ceased to operate in 2005, and the other in Switzerland. Those trading companies sold the product concerned to the first independent customer with a mark-up.

125 Although the applicant states that it contested those findings during the administrative procedure, it is apparent that this was only in order to assert that all the companies related to it, including its manufacturing companies and its two trading companies, were owned, controlled and managed by the same single shareholder, the applicant. The applicant submits that Eurochem Moscow and Eurochem Trading performed the same functions as those of a fully integrated export sales department.

126 It is apparent from recital 42 to the contested regulation that the normal value and the export price were compared on an ex-works basis.

127 In that connection, as regards the normal value, this was constructed on the basis of the manufacturing costs of the product type exported, after the adjustment for the gas cost, plus a reasonable amount for SG&A costs and for profits. Recital 38 to the contested regulation states that the amounts for SG&A costs and profit were established on the basis of the weighted averages from three North American producers, which were found to be amongst the largest companies in the nitrogen fertilisers' sector. At recital 39 to that regulation, it is stated that the amount for profit so established did not exceed the profit realised by the Russian producers on sales of products of the same general category on their domestic market.

128 As regards the export price, recital 41 to the contested regulation states that this was established on the basis of export prices actually paid or payable for the product when sold for export from the exporting country to the European Union.

129 Article 2(10) of the basic regulation provides that adjustments are possible.

130 However, according to the case-law, it is apparent from both the wording and the scheme of Article 2(10) of the basic regulation that an adjustment to the export price or the normal value may only be made to take account of differences in factors which affect the prices and therefore their comparability (Case T-88/98 Kundan and Tata v Council [2002] ECR II-4897, paragraph 94). In other words, the purpose of an adjustment is to re-establish the symmetry between normal value and export price.

131 In that connection, it should be observed that Article 2(10)(i) of the basic regulation provides that an adjustment is to be made for differences in commissions paid in respect of the sales under consideration. The second sentence of that provision states that the term 'commissions' is to be understood to include the mark-up received by a trader of the product or the like product if the functions of such a trader are similar to those of an agent working on a commission basis.

132 That second sentence of Article 2(10)(i) of the basic regulation was inserted by Article 1(5) of Regulation No 1972/2002. Recital 6 to that regulation states that the rationale for the insertion of the sentence in question was to clarify, in line with the consistent practice of the institutions, that such adjustments were also to be made if the parties did not act on the basis of a principal-agent relationship, but achieved the same economic result by acting as buyer and seller.

133 Therefore, Article 2(10)(i) of the basic regulation allows an adjustment to be made not only for differences in commissions paid in respect of the sales under consideration, but also for the mark-up received by traders of the product if they carry out functions which are similar to those of an agent working on a commission basis (Case T-299/05 Shanghai Excell M & E Enterprise and Shanghai Adeptech Precision v Council [2009] ECR II-565, paragraph 281).

134 In the present case, the respective roles played by the applicant, its manufacturing companies and its trading companies must therefore be examined.

135 The applicant has not disputed that commissions were paid, in accordance with the export sales agency agreement. The Council emphasised that that agreement was a fully fledged agency agreement that even included an arbitration clause.

136 The applicant submits that the institutions have not proved the effect of such commissions on the comparability of the export price and normal value.

137 However, it is apparent that the Council contended that the commission payments represented compensation for tasks performed in the context of functions similar to those of an agent working on a commission basis and that the commission payments were not a mere internal redistribution of profits that does not affect price comparability.

138 It has not been disputed that the product concerned was sold by the trading company, which set a price including a profit margin, thereby carrying out the role of trader. It should be added that the applicant has not denied its own role or the respective roles of its manufacturing and trading companies, as set out in paragraph 124 above, save to claim that the applicant and its companies constituted a single economic entity.

139 In addition, although the applicant submitted, in the application, that none of the trading companies at any level had received a mark-up, it is apparent from the evidence collected in the course of the administrative procedure, as noted by the Council - and not subsequently disputed by the applicant - that, during the investigation, Eurochem Trading achieved an overall profit for all the products sold and a profit in respect of EU sales of the product concerned.

140 It is not therefore apparent that there has been an infringement of Article 2(10)(i) of the basic regulation or that there has been a manifest error of assessment in relation to the application of that provision in the present case.

141 The third part of the second plea is therefore unfounded.

142 It follows from all of the foregoing that the second plea must be regarded as unfounded and must therefore be rejected.

143 Accordingly, the action must be dismissed in its entirety.

Costs

144 As regards, first of all, the applicant's argument that Fertilizers Europe's claim that the applicant should be ordered to pay its costs is inadmissible, it is sufficient to note that costs are a matter ancillary to the main proceedings and that, as a matter of course, only the intervener has an interest in requesting that its costs be borne by another party.

145 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful, it must be ordered, in accordance with the form of order sought by the Council and by Fertilizers Europe, to bear its own costs and to pay those incurred by both of the latter.

146 In accordance with the first subparagraph of Article 87(4) of the Rules of Procedure, the Commission is to bear its own costs.

On those grounds,

THE GENERAL COURT (Eighth Chamber)

hereby:

1. Dismisses the action;

2. Orders EuroChem Mineral and Chemical Company OAO (EuroChem MCC) to bear its own costs and to pay those incurred by the Council of the European Union and by Fertilizers Europe;

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