CJEU, 2nd chamber, September 4, 2014, No C-21/13

THE COURT (Second Chamber),

1 This request for a preliminary ruling concerns the validity of Council Regulation (EC) No 499-2009 of 11 June 2009 extending the definitive anti-dumping duty imposed by Regulation (EC) No 1174-2005 on imports of hand pallet trucks and their essential parts originating in the People's Republic of China to imports of the same product consigned from Thailand, whether declared as originating in Thailand or not (OJ 2009 L 151, p. 1, 'the regulation at issue').

2 The request has been made in proceedings between Simon, Evers & Co. GmbH ('Simon, Evers') and the Hauptzollamt Hamburg-Hafen (Principal Customs Office of the Port of Hamburg, 'the Hauptzollamt') concerning a decision by the latter to require Simon, Evers to pay anti-dumping duties.

Legal context

3 The provisions governing the application of anti-dumping measures by the European Union, in force at the time of the dispute in the main proceedings, were set out in 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 by Council Regulation (EC) No 461-2004 of 8 March 2004 (OJ 2004 L 77, p. 12) ('the basic regulation').

4 Article 13 of the basic regulation, entitled 'Circumvention', provided:

'1. Anti-dumping duties imposed pursuant to this Regulation may be extended to imports from third countries, of the like product ... when circumvention of the measures in force is taking place. ... Circumvention shall be defined as a change in the pattern of trade between third countries and the Community or between individual companies in the country subject to measures and the Community, which stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty, and where there is evidence of injury or that the remedial effects of the duty are being undermined in terms of the prices and-or quantities of the like product, and where there is evidence of dumping in relation to the normal values previously established for the like product, if necessary in accordance with the provisions of Article 2.

...

2. An assembly operation in the Community or a third country shall be considered to circumvent the measures in force where:

(a) the operation started or substantially increased since, or just prior to, the initiation of the anti-dumping investigation and the parts concerned are from the country subject to measures; and

...

(c) the remedial effects of the duty are being undermined in terms of the prices and-or quantities of the assembled like product and there is evidence of dumping in relation to the normal values previously established for the like or similar products.

3. Investigations shall be initiated pursuant to this Article on the initiative of the Commission or at the request of a Member State or any interested party on the basis of sufficient evidence regarding the factors set out in paragraph 1. Initiations shall be made, after consultation of the Advisory Committee, by Commission Regulation which may also instruct the customs authorities to make imports subject to registration in accordance with Article 14(5) or to request guarantees. Investigations shall be carried out by the Commission, which may be assisted by customs authorities and shall be concluded within nine months. When the facts as finally ascertained justify the extension of measures, this shall be done by the Council, acting on a proposal submitted by the Commission, after consultation of the Advisory Committee. ...

... '

5 Under Article 14(6) of the basic regulation:

'Member States shall report to the Commission every month, on the import trade in products subject to investigation and to measures, and on the amount of duties collected pursuant to this Regulation.'

6 Article 18(1) and (6) of the basic regulation was worded as follows:

'1. In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within the time-limits provided in this Regulation, or significantly impedes the investigation, provisional or final findings, affirmative or negative, may be made on the basis of the facts available. ... Interested parties should be made aware of the consequences of non-cooperation.

...

6. If an interested party does not cooperate, or cooperates only partially, so that relevant information is thereby withheld, the result may be less favourable to the party than if it had cooperated.'

7 As a result of an investigation carried out by the Commission between 1 April 2003 and 31 March 2004 ('the original investigation'), the European Union adopted Council Regulation (EC) No 1174-2005 of 18 July 2005 imposing a definitive anti-dumping duty and collecting definitely the provisional duty imposed on imports of hand pallet trucks and their essential parts originating in the People's Republic of China (OJ 2005 L 189, p. 1), as amended by Council Regulation (EC) No 684-2008 of 17 July 2008 (OJ 2008 L 192, p. 1) ('Regulation No 1174-2005').

8 Under Article 1(1) of Regulation No 1174-2005:

'A definitive anti-dumping duty is hereby imposed on imports of hand pallet trucks and their essential parts, i.e. chassis and hydraulics, falling within CN code ex 8427 90 00 and ex 8431 20 00 (TARIC codes 8427 90 00 10 and 8431 20 00 10), originating in the People's Republic of China. ...'

9 It appears from the fifth recital in the preamble to Commission Regulation (EC) No 923-2008 of 12 September 2008 initiating an investigation concerning the possible circumvention of anti-dumping measures imposed by Regulation No 1174-2005, as amended by Regulation No 684-2008, on imports of hand pallet trucks and their essential parts originating in the People's Republic of China by imports of hand pallet trucks and their essential parts consigned from Thailand, whether declared as originating in Thailand or not and making such imports subject to registration (OJ 2008 L 252, p. 3), states that the Commission decided to open an investigation ('the circumvention investigation') on the basis of sufficient evidence which, in the Commission's view, prima facie showed that the anti-dumping measures on imports of hand pallet trucks originating in China were being circumvented by means of assembly operations in Thailand of the product under investigation. Accordingly, the Commission adopted Regulation No 923-2008.

10 Recital 10 in the preamble to the regulation at issue states that the circumvention investigation covered the period from 1 September 2007 to 31 August 2008 ('the investigation period').

11 Under recital 6 in the preamble to the regulation at issue '[t]he Commission officially advised the authorities of the [People's Republic of China; 'the PRC'] and Thailand, the producers-exporters in the PRC and Thailand, the importers in the Community known to be concerned and the Community industry of the initiation of the [circumvention] investigation. Questionnaires were sent to known producers-exporters in the PRC and in Thailand as well as to the importers in the Community known to the Commission from the original investigation and to parties that had made themselves known within the deadlines specified in Article 3 of [Regulation No 923-2008]. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time-limit set out in [that regulation]. All parties were informed that non-cooperation might lead to the application of Article 18 of the basic Regulation and to findings being made on the basis of the facts available.'

12 Recital 7 in the preamble to the regulation at issue states that no replies to the questionnaires were received from exporters-producers in Thailand, nor did the Commission receive any comments from the Thai authorities.

13 Recital 8 in the preamble to the regulation at issue states that 'one Chinese exporting producer replied to the questionnaire by declaring its export sales to the EC as well as some very minor exports of the product concerned to Thailand. No comments were received from the Chinese authorities'.

14 In addition, recital 9 in the preamble to that regulation states that 'nine Community importers submitted questionnaire replies reporting their imports from China and Thailand. In general, from their replies it is concluded that there was an increase of imports from Thailand and a sudden decrease of the imports from the PRC in 2006, the year after definitive anti-dumping duties came into force. In the following years, the imports from the PRC increased again while at the same time imports from Thailand slightly decreased but still remained well above the 2005 levels'.

15 As regards the change in the pattern of trade between third countries and the EU, recitals 16 to 21 in the preamble to the regulation at issue read as follows:

'(16) Due to the non-cooperation of any Thai company, the volume and value of Thai exports of the product concerned to the Community were determined on the basis of the information available, which in this case was statistical data collected by Member States and compiled by the Commission pursuant to Article 14(6) of the basic Regulation, and Eurostat data. ...

(17) Following the imposition of the anti-dumping measures imports of [hand pallet trucks and their essential parts] from Thailand increased from 7 458 trucks in 2005 to 64 706 trucks in 2007 and decreased to 42 056 trucks during the [investigation period].

(18) With respect to China imports of [hand pallet trucks and their essential parts] to the EC increased from 240 639 trucks in 2005 to 538 271 in 2007 and 584 786 during the [investigation period]. According to the available information, this increase is mainly attributed to increased exports of the sole Chinese exporting producer, which has the lowest anti-dumping duty rate. Indeed, Chinese exports from this particular party represent the overwhelming percentage of the increase of imports into the EC of [hand pallet trucks and their essential parts] from the PRC between 2005 and the end of the [investigation period].

(19) Account taken of the above situation, it is concluded that there was a change in the pattern of trade between the EC, the PRC and Thailand. Imports from the PRC continued to increase but this is directly attributed to the export performance of one of the Chinese exporting producers which cooperated with the original investigation and was attributed the lowest anti-dumping duty. On the other hand, imports from Thailand increased by 868% from 2005 to 2007 and stabilised during the [investigation period] to an increase of 564% with respect to 2005.

(20) In sum, the trade pattern found, although showing persistence in exports from the PRC also shows a significant increase of exports from Thailand. The persistence or continued increase, albeit much smaller between 2007 and the [investigation period] than that found in the original investigation, of exports from the PRC, can be explained by noting that the overwhelming majority of the exports come from the Chinese company with the lowest anti-dumping duty rate. The pattern relating to Thailand, on the other hand, could only be explained as the result of actions aiming at the circumvention of measures.

(21) The imports into the Community from Thailand started to rise during the period in which the Community conducted its original investigation. It is recalled that the authorities in Thailand as well as potential Thai producers-exporters were informed of the current investigation. However no evidence was received that could explain this significant increase nor in fact did any Thai company cooperate with the investigation by submitting the necessary questionnaire replies. In this respect it should be highlighted that, as mentioned in recital 7, information at the Commission's disposal at the time of initiation seemed to suggest that there is a significant amount of assembly operations of [hand pallet trucks and their essential parts] in Thailand. On the other hand, no evidence was received to indicate that there was a genuine production of [hand pallet trucks and their essential parts] in Thailand. On the basis of the available information, it is therefore concluded that, in the absence of any other sufficient due cause or economic justification within the meaning of Article 13(1) of the basic Regulation, the change in the pattern of trade stemmed from the imposition of the anti-dumping duty on [hand pallet trucks and their essential parts] originating in the PRC.'

16 Following the circumvention investigation, the regulation at issue was adopted.

17 Article 1 of that regulation provides:

'1. The definitive anti-dumping duty applicable to "all other companies" imposed by Regulation (EC) No 1174-2005 on imports of hand pallet trucks and their essential parts, i.e. chassis and hydraulics, as defined in Article 1 of Regulation [No 1174-2005] originating in [China], is hereby extended to hand pallet trucks and their essential parts, i.e. chassis and hydraulics, as defined in Article 1 of Regulation [No 1174-2005], falling within CN code ex 8427 90 00 and ex 8431 20 00 (TARIC codes 8427 90 00 11 and 8431 20 00 11), consigned from Thailand whether declared as originating in Thailand or not.

2. The duties extended by paragraph 1 shall be collected on imports registered in accordance with Article 2 of Regulation (EC) No 923-2008 and Articles 13(3) and 14(5) of [the basic regulation].

... '

The dispute in the main proceedings and the question referred for a preliminary ruling

18 In October 2008, Simon, Evers imported hand pallet trucks from Thailand.

19 On 12 August 2009, by import duty notice, the Hauptzollamt, acting on the basis of the regulation at issue, demanded that Simon, Evers pay an anti-dumping duty of EUR 9 666.90.

20 After the Hauptzollamt, by decision of 21 February 2011, dismissed as unfounded the appeal brought against that notice, Simon, Evers brought the matter before the Finanzgericht Hamburg (Finance Court, Hamburg).

21 That court is uncertain whether the conditions laid down in Article 13(1) of the basic regulation on determining whether anti-dumping duties have been circumvented are satisfied in this case. More specifically, it raises the question whether a change in the volume of exports from the third countries at issue makes it possible, in itself, to establish a link between imports from countries subject to the anti-dumping duty and imports from countries which the anti-dumping duty must be expanded to. As regards the pattern of imports from Thailand, the Finanzgericht Hamburg notes that, after having increased considerably during 2007, they fell significantly during the investigation period.

22 The referring court is also uncertain as to whether the change in the pattern of trade between third countries and the EU can be attributed to the introduction of anti-dumping duties on hand pallet trucks originating in China when, during the investigation period, imports from China themselves increased considerably. In the absence of evidence making it possible, first, to explain the sharp rise in exports from Thailand and, second, to establish the absence of a genuine production of hand pallet trucks in Thailand, it would appear at the very least doubtful that it can be found that, in the absence of any due cause or sufficient economic justification for the purposes of Article 13(1) of the basic regulation, the change in the pattern of trade resulted from the imposition of anti-dumping duties on hand pallet trucks originating in China.

23 In those circumstances the Finanzgericht Hamburg decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

'Is [the regulation at issue] invalid because the Commission, by misjudging the requirements arising from Article 13 of [the basic regulation] concerning the finding of a circumvention of anti-dumping duty measures, found that there was a circumvention merely because the volume of exports in question from Thailand increased significantly after the imposition of the measures, although the Commission, with reference to the lack of cooperation from Thai exporters, made no further specific findings?'

The question referred

Preliminary observations

24 It must be noted at the outset that by its question the referring court asks, in essence, whether the regulation at issue is invalid because the EU institutions did not establish to the requisite legal standard the existence of a 'circumvention' within the meaning of Article 13(1) of the basic regulation, in so far as they failed to identify, on the one hand, the change in the pattern of trade between the third countries and the EU and, on the other hand, the existence of a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the anti-dumping duty, in the absence of cooperation from the Thai exporters.

25 In the written observations submitted to the Court, Simon, Evers raised another ground of invalidity of the regulation at issue based on the fact that the EU institutions failed to establish that the remedial effects of the anti-dumping duty had been undermined in terms of price and-or quantity of like products.

26 According to settled case-law, the procedure laid down in Article 267 TFEU is based on a clear separation of functions between the national courts and the Court of Justice, with the result that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court (see, inter alia, the judgment in Hoesch Metals and Alloys, C-373-08, EU:C:2010:68, paragraph 59).

27 It is also apparent from settled case-law that Article 267 TFEU does not make available a means of redress to the parties to a case pending before a national court, so that the Court cannot be compelled to evaluate the validity of EU law on the sole ground that that question has been put before it by one of the parties in its written observations (see the judgment in MSD Sharp & Dohme, C-316-09, EU:C:2011:275, paragraph 23 and the case-law cited).

28 In those circumstances, it is inappropriate to extend the inquiry into the validity of the regulation at issue to those other grounds of invalidity, which the referring court has not referred to (see the judgment in Nuova Agricast, C-390-06, EU:C:2008:224, paragraph 44).

Validity of the regulation at issue

29 According to settled case-law, in the sphere of the common commercial policy and, most particularly, in the realm of measures to protect trade, the institutions of the EU enjoy a broad discretion by reason of the complexity of the economic, political and legal situations which they have to examine. The judicial review of such an appraisal must therefore be limited to verifying whether the 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 in the appraisal of those facts or a misuse of powers (see the judgment in Council v Interpipe Niko Tube and Interpipe NTRP, C-191-09 P and C-200-09 P, EU:C:2012:78, paragraph 63 and the case-law cited).

30 As regards more specifically the circumvention of anti-dumping measures, Article 13(1) of the basic regulation provides that it consists of a change in the pattern of trade between third countries and the EU which stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty, and where there is evidence of injury or that the remedial effects of the duty are being undermined in terms of the prices and-or quantities of the like product.

31 According to Article 13(3) of that regulation, it is for the Commission to initiate an investigation on the basis of evidence which prima facie suggests circumvention practices. If the facts ascertained during that investigation make it possible to conclude that such circumvention exists, the Commission is to submit a proposal on the extension of anti-dumping measures to the Council.

32 However, there is no provision in the basic regulation which grants the Commission, in the context of a circumvention investigation, the power to require producers or exporters referred to in a complaint to participate in the investigation or to provide information. The Commission is therefore reliant on the voluntary cooperation of the interested parties to provide it with the necessary information.

33 That is why the EU legislature provided in Article 18(1) of the basic regulation that, in cases in which any interested party refuses access to, or otherwise does not provide, necessary information, or significantly impedes the investigation, provisional or final findings, affirmative or negative, may be made on the basis of the facts available.

34 Furthermore, Article 18(6) of the same regulation states that if an interested party does not cooperate, or cooperates only partially, so that relevant information is thereby withheld, the result may be less favourable to the party than if it had cooperated.

35 While it is true that the basic regulation, and particularly Article 13(3) thereof, establishes the principle that the burden of proof of a circumvention is imposed on the EU institutions, the fact remains that, by providing, in a situation where the interested parties fail to cooperate, that those institutions may base the findings of an investigation of the existence of circumvention on the data available and that the result may be less favourable to the parties who have not cooperated with it, Article 18(1) and (6) of the basic regulation is clearly intended to lessen that burden.

36 It is true that, as the Advocate General noted in points 68 and 69 of his Opinion, it is apparent from Article 18 of the basic regulation that it was not the intention of the EU legislature to establish a legal presumption making it possible to infer the existence of circumvention directly from the non-cooperation of the parties interested or concerned, and thereby exempting the EU institutions from any requirement to adduce proof. However, given that it is possible to making findings, even definitive findings, on the basis of the facts available and to treat a party who does not cooperate or does not cooperate fully less favourably than if it had cooperated, it is equally evident that the EU institutions are authorised to act on the basis of a body of consistent evidence showing the existence of circumvention for the purposes of Article 13(1) of the basic regulation.

37 Any other approach would risk undermining the efficiency of the EU trade defence measures each time the EU institutions are faced with non-cooperation in the context of an investigation seeking to establish whether there has been circumvention.

38 It is in the light of those considerations that the question of the validity of the regulation at issue must be assessed.

39 In the first place, it should be noted that, in this instance, the exporting producers in Thailand, and the Thai authorities, did not cooperate with the circumvention investigation. Furthermore, only one Chinese exporting producer declared its export sales to the EU as well as some very minor exports to Thailand and no comments were received from the Chinese authorities.

40 As is apparent from recital 6 in the preamble to the regulation at issue, the Commission advised the Chinese and Thai authorities, the exporting producers and the importers in the Community known to be concerned as well as the Community industry of the initiation of the circumvention investigation. Furthermore, questionnaires were sent to those exporting producers and importers in the Community who were accordingly given the opportunity to make their views known and to be heard by the Commission.

41 Due to the non-cooperation of those interested parties, the volume and value of Thai and Chinese exports of hand pallet trucks to the EU were determined by the Council on the basis of the only information available, namely statistical data collected by Member States and compiled by the Commission pursuant to Article 14(6) of the basic Regulation, and Eurostat data.

42 That information enabled the EU institutions to find that, following the introduction of anti-dumping measures on imports of hand pallet trucks originating in China, the imports of hand pallet trucks from Thailand had risen from 7 458 in 2005 to 64 706 in 2007 before falling to 42 056 during the investigation period. That represented an increase of 868% between 2005 and 2007 and, during the investigation period, an increase of 564% as against 2005.

43 As regards imports to the EU of hand pallet trucks from China, the EU institutions noted that they had increased from 240 639 in 2005 to 538 271 in 2007 and 584 786 during the investigation period. According to the information available to the institutions, that increase was mainly attributable to increased exports of the Chinese exporting producer to which the lowest anti-dumping duty rate was applied, namely 7.6%, whereas the other Chinese exporting producers were subject to anti-dumping rates of between 28.5% and 46.7%.

44 It is apparent from that, first, that imports from Thailand increased significantly as from 2005, that is to say as from the application of the anti-dumping duty to imports from China, second, that there was a plausible economic reason to justify the increase of those imports as from 2005 and, third, that that increase was, proportionally, inferior to that of the imports from Thailand.

45 Simon, Evers claims, however, that the pattern of trade between third countries and the EU did not change significantly, given that a change in the pattern of trade within the meaning of Article 13(1) of the basic regulation would be shown by imports originating in countries subject to the anti-dumping duty having decreased after the anti-dumping measures came into force, while the imports of like products from the alleged circumvention countries would have increased.

46 In the case in the main proceedings that condition was not satisfied.

47 In that regard, it should be pointed out that Article 13(1) of the basic regulation makes no reference to any requirement as to the replacement of imports originating in countries subject to the anti-dumping duty by those from circumvention countries as a condition necessary for a finding of circumvention.

48 Furthermore, as the Advocate General stated in point 87 of his Opinion, the definition of 'circumvention' is set out in Article 13(1) of the basic regulation in very general terms which leave a broad margin of discretion to the EU institutions, since no details of the nature and form of the 'change in the pattern of trade between third countries and the Union' are given.

49 Consequently, the Council has established to the requisite legal standard that there was a change in the pattern of trade between China, Thailand and the EU.

50 In the second place, the doubts expressed by the referring court as to the validity of the regulation at issue are also based on the fact that the EU institutions did not prove that the change in the pattern of trade between the third countries concerned and the EU derived from the circumvention of the anti-dumping duty imposed on imports originating in China.

51 As is apparent from Article 13(1) of the basic regulation, for circumvention to exist it must be established that there is insufficient due cause or economic justification other than the imposition of the anti-dumping duty for the practice, process or work which is responsible for the change in the pattern of trade between third countries and the EU.

52 In this case, it is apparent from the regulation at issue that the institutions acted on the basis of a body of consistent evidence to find the existence of the circumvention in question. They found that the change in the pattern of trade between Thailand and the EU began just after the imposition of the anti-dumping duty on imports from China. That coincidence in time constitutes significant evidence making it possible to establish a link based in logic and reason between the considerable increase in imports from Thailand and the imposition of the anti-dumping duty.

53 Furthermore, it is apparent from recital 21 in the preamble to the regulation at issue that, at the time of initiation of the circumvention investigation, the information at the Commission's disposal appeared to suggest that there was a significant amount of assembly operations of the product concerned in Thailand.

54 Finally, neither the exporting producers in Thailand or China nor the Thai government provided the EU institutions with evidence which would explain the significant increase in imports of hand pallet trucks from Thailand. In particular, those institutions did not receive any evidence showing the existence of genuine hand pallet truck production activities in Thailand.

55 The failure of the undertakings and the national authorities concerned to cooperate during the circumvention investigation therefore prevented the EU institutions from establishing with certainty the reasons for the change in the pattern of trade between Thailand and the EU.

56 In the context of a situation characterised by the complete refusal to cooperate with the circumvention investigation, the EU institutions were entitled to act on the basis of the evidence available in order to find the existence of a practice, process or work in Thailand aiming solely at the circumvention of the anti-dumping duty affecting imports originating in China. In those circumstances, it was for the parties concerned to prove that there were reasonable grounds justifying those activities, other than avoiding that anti-dumping duty (see, by analogy, the judgment in Brother International, C-26-88, EU:C:1989:637, paragraph 29).

57 It follows that, by finding in the regulation at issue that there was circumvention of measures within the meaning of Article 13(1) of the basic regulation, the Council did not commit a manifest error of assessment of the facts.

58 In the light of the foregoing, the answer to the question referred is that consideration of the question raised by the referring court has disclosed no factor of such a kind as to affect the validity of the regulation at issue.

Costs

59 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

Consideration of the question raised by the referring court has disclosed no factor of such a kind as to affect the validity of Council Regulation (EC) No 499-2009 of 11 June 2009 extending the definitive anti-dumping duty imposed by Regulation (EC) No 1174-2005 on imports of hand pallet trucks and their essential parts originating in the People's Republic of China to imports of the same product consigned from Thailand, whether declared as originating in Thailand or not.