Report for the Hearing delivered in Case 312/84

I — Facts and written procedure

1. Following an investigation into the dumping of cotton yarns originating in Turkey, initiated on 3 August 1979, the Commission, by Regulation No 3453/81 (Official Journal 1981, L 347, p. 19), imposed a provisional antidumping duty of 16% with effect from 3 December 1981. With effect from 3 April 1982 the Council, in Regulation No 789/82 of 2 April 1982 (Official Journal 1982, L 90, p. 1), imposed a definitive duty of 12%.

2. On 30 July 1982 an arrangement was reached between the Commission, the Turkish Government and Turkish exporters whereby the exporters undertook to apply minimum prices on exportation, as a result of which the antidumping duties on cotton yarns originating in Turkey were repealed on 21 August 1982 by Council Regulation No 2306/82 (Official Journal 1982, L 246, p. 14).

3. However, Council Regulation No 789/82, which imposed the definitive antidumping duty, remained in force in respect of goods which, although not yet released for consumption, were already stored in the customs warehouses of the Community. Pursuant to Regulation No 789/82 the applicant, an import company trading in the Federal Republic of Germany, was obliged to pay antidumping duties amounting to DM 676782.57 in respect of cotton yarns imported from Turkey during the period from 15 April to 16 July 1982.

4. The applicant, however, submitted applications dated 24 March 1982, 28 April 1982 and 26 July 1982 to the Federal Minister for Economic Affairs, reclaiming the antidumping duties paid. It supplemented those applications by submitting written observations on 30 November 1982, 4 March 1983 and supporting documents on 6 December 1983. It based itself on Article 15 (1) of Council Regulation No 3017/79 of 20 December 1979 on protection against dumped or subsidized imports from countries not members of the European Economic Community (Official Journal 1979, L 339, p. 1) — the basic antidumping regulation. Article 15 (1) provides that:

5. The applicant based its application on the fact that the actual normal values of its Turkish supplier were lower than those established by Regulation No 789/82, on the basis of which the antidumping duty was imposed.

6. The application was forwarded to the Commission, which considered it in accordance with the procedure under Article 16 of Council Regulation No 2176/84 of 23 July 1984 (Official Journal 1984, L 201, p. 1), which replaced Regulation No 3017/79 as the basic antidumping regulation from 1 August 1984 onwards. Article 16 provides that the Commission, which must inform Member States and give its opinion on the application for reimbursement, may, if its opinion is endorsed by the Member States or encounters no objections from them within one month, adopt a decision in accordance with its opinion; in all other cases, it must decide after consultation whether and to what extent the application should be granted.

7. In this instance, one of the Member States did not agree with the Commission's opinion, and the Commission, after consulting the Member States, adopted Decision K(84) 1605 of 29 October 1984 rejecting the applicant's request except for a sum of DM 1638.01.

8. Under that decision the refundable amount was merely the difference between the duty collected and the normal values as determined definitively in Regulation No 789/82. The applicant had maintained that the sums to be reimbursed should be calculated on the basis of its suppliers' actual, individual normal values, and that these were lower. The reasons stated by the Commission's decision dealt mainly with its refusal to accept the merits of the applicant's argument.

9. It is that decision of the Commission which the applicant contests in this action, which was registered at the Court on 28 December 1984.

II — Conclusions of the parties

10. The applicant claims that the Court should:

11. The Commission contends that the Court should dismiss the application by declaring the applicant's first claim to be unfounded and its second, third and fourth claims to be inadmissible, and should order the applicant to pay the costs.

III — Submissions and arguments of the parties

Admissibility of the alternative claims of the application

12. The Commission contends that the alternative claim for a finding of nullity is inadmissible. Such an action is alien to the Treaty, and no need for it is disclosed by the circumstances of the case. Similarly, the second alternative claim, seeking amendment of the contested decision, together with the third alternative claim, for an order requiring the Commission to take action, are inadmissible in the context of an action for annulment. Furthermore, the Commission argues, if those alternative claims were to be construed as an action for failure to act, then the conditions for such an action are not fulfilled since there was no failure on the part of the Commission to act; indeed, it adopted the decision at issue. The Commission takes the view that any action which it might have to take as a result of an annulment by the Court would be indicated by the terms of the judgment. It therefore considers that the action is not admissible otherwise than as an action under Article 173 of the EEC Treaty.

13. The applicant submits no observations concerning the Commission's plea that the applicant's alternative claims are inadmissible.

Submissions made in support of the application

A — Submission that the Commission had no power to act

14. The applicant pleads that the Commission had no powers to adopt the decision at issue. It argues that its request was submitted to the competent German authorities on 26 July 1982 and at that date was governed by the provisions of Article 15 of the basic antidumping regulation, Regulation No 3017/79, according to which the authorities empowered to give a ruling on applications for reimbursement were the national authorities.

15. The applicant claims that the powers initially conferred on the German national authority should be maintained with regard to applications submitted before the new antidumping regulation, Regulation No 2176/84, entered into force on 1 August 1984. Despite the fact that, under the second paragraph of Article 19 thereof, Regulation No 2176/84 applies to proceedings already initiated by the date of its entry into force, the applicant claims that it had a vested right to have its application considered by the competent national authorities in accordance with Article 15 of the earlier antidumping regulation, Regulation No 3017/79.

16. The applicant's concern in the matter is due to the fact that the national authorities were opposed to the Commission's adverse opinion and that, even if they were bound to comply with it pursuant to Articie 15 (2) of Regulation No 3017/79, they could always refuse to give effect to the decision and challenge it in proceedings before the Court.

17. The applicant further claims that the Commission deliberately postponed consideration of its application until Regulation No 2176/84 had entered into force.

18. The Commission points out that the second paragraph of Article 19 of Regulation No 2176/84 provides that the regulation applies to proceedings already initiated, which covers the measures closing the proceedings and consequently the authority empowered to adopt it. The Commission contends that that interpretation is in conformity with the general principle that new legislation applies to situations which arose under earlier legislation but which have yet to be resolved (quasiretroactive effect; see judgment of 5 July 1973, Case 1/73 Westzucker v Einfuhr- und Vorratsstelle Zucker [1973] ECR 723, at p. 729). The applicant could not therefore have a vested right regarding the identity of the authority empowered to decide on its application for reimbursement.

19. The Commission adds that even during the currency of Article 15 of Regulation No 3017/79 the national authorities were obliged to adopt a decision in conformity with the opinion of the Commission, with the result that the sole effect of the new legislation was to bring the formal powers into line with the de facto decision-making powers.

B — Submissions on substantive issues

20. Paragraph 6 of the preamble to the contested decision states that the applicant bases its request on the assertion that the normal values for its Turkish suppliers are lower than those definitively fixed by Regulation No 789/82. The Commission takes a different view in the contested decision; paragraph 17 of the preamble to the decision states that the normal values to be applied for the purposes of the application for reimbursement are equal to those which were definitively determined by Regulation No 789/82.

21. The reasons given by the Commission for the contested decision are fourfold:

22. The submissions put forward by the applicant fall into one of two categories: (a) those which are directed at the reasons given by the contested decision itself, and (b) those which contend that it was wrong in the first place for the contested decision to adopt the normal values from Regulation No 789/82, because the latter itself was illegal on several grounds. Sometimes one and the same submission or argument falls into both categories.

C — Submissions concerning the statement of reasons for the contested decision

(i) Submission A 1, concerning paragraph 14 of the statement of reasons

23. According to the applicant, Article 15 of Regulation No 3017/79 should be interpreted as meaning that it requires account to be taken of the individual normal values of the suppliers of any person seeking reimbursement, rather than of the normal values established by the regulation creating antidumping duties and considered to be definitive.

24. It claims that the Commission's refusal to give consideration to the individual values specific to the importer seeking reimbursement and to his particular suppliers is contrary to the objective of individual justice, which the reimbursement procedure was designed to achieve. The applicant maintains that the term actual dumping margin which appears in Article 15 of Regulation No 3017/79 envisages the particular circumstances of each importer seeking reimbursement. It takes the view that that interpretation is the only one conducive to a consistent application of the reimbursement procedure, which should be independent of the rules for ascertaining the normal values underlying the antidumping duties, as these may vary and be the outcome of a combined application of differing methods under the antidumping regulation.

25. The Commission admits that the reimbursement procedure seeks to achieve individual justice, but takes the view that it is not possible to take account of the individual values affecting the applicant without there being a risk of undermining ex post facto the whole purpose of normal values as established by the regulation fixing the antidumping duties. The Commission contends that the article setting out the reimbursement procedure takes account of that problem since it does not permit reimbursement unless consideration [is] given to any application of weighted averages.

26. The Commission maintains that the purpose of the reimbursement procedure is in fact to allow account to be taken of the cases in which an exporter eliminates or reduces the margin of dumping after the antidumping duty has been imposed. That entails the application to reimbursement applications of procedures which differ according to whether the normal value was calculated on an individual basis or by reference to the representative or weighted average prices (Article 2 (13) (b) of Regulation No 2176/84). Reimbursement cannot therefore be allowed unless the applicant proves that the data taken into account have changed since the imposition of the antidumping duty. The term actual dumping margin used by Anieles 15 of Regulation No 3017/79 and 16 of Regulation No 2176/84 in the context of reimbursement therefore have temporal force, because the margin in question depends on any new circumstances which may appear after the antidumping duty has been imposed.

(ii) Submission A 2, concerning paragraph 15 of the statement of reasons

27. The applicant claims to have established and proved all the data dealing with the costs and prices of its own suppliers, as is apparent from their written statements, and it maintains that the assertion made in the contested decision, namely that it has failed to substantiate its claims that the costs of its Turkish suppliers are lower that those ascertained in the course of the antidumping investigation, is mistaken. The applicant considers that, if the Commission had doubts about the written statements of its Turkish suppliers, it should have conducted an ex officio inquiry, the omission of which created an unlawful procedural obstacle.

28. The applicant explains that the lower production costs of its suppliers are due to the family-based nature of their undertakings, as may be proved by the statements which it produces on this point and, more generally, on the normal values applied by its suppliers; these emerge from its applications and written observations addressed to the national authorities and to the Commission and from the documents annexed to those documents and to its application to the Court. Similarly, the applicant points to the effects of inflation and fluctuations in exchange rates; these have allowed its suppliers to make gains which they have passed on to it by reducing their selling prices. It refers to a set of contracts concluded with one of its suppliers and to an evaluation of those contracts and to statements which it produces.

29. The Commission expresses doubts as to the accuracy of the applicant's claims concerning its suppliers' costs, because the applicant had initially maintained that they were far lower than the values established by the Commission in Turkey and had then said that they were 25% lower than the total costs and 20% lower than those recorded for raw cotton. The Commission maintains that it is clear from the applicant's statements that the cost of raw cotton of its suppliers was not lower than the cost established during the investigation but 8.5% higher. It states that it invited the applicant to comment on this, but received no explanation. Moreover, it claims that the gains which the applicant alleges were made by its suppliers on account of inflation would at most be reflected in their financial costs and not in the invoice price of raw cotton. As regards the fluctuations in the exchange rates, these cannot affect the price of raw cotton sold in Turkey to Turkish firms. The adjustments claimed by the applicant on that basis must therefore be rejected. It observes that the applicant offered to tender evidence by witnesses only during the proceedings before the Court and not during the administrative procedure concerning the examination of the application for a refund.

(iii) Submission A 3, concerning paragraph 9 of the statement of reasons

30. The applicant disputes the legality of the measures taken by the Commission at the beginning of the antidumping investigation. It claims that it is not aware of, and consequently challenges, the Commission's statement that at the beginning of the antidumping investigation it contacted more than 50 Turkish producers from whom it had requested evidence concerning their prices and costs and that, since some of those producers failed to reply, the Commission contacted the Association of Turkish Textile Exporters with a view to establishing the data needed for determining the normal values.

31. The Commission takes the view that the applicant could have been informed by its own suppliers of all the phases of the investigation in Turkey. It adds that the applicant was also informed about the commencement of the antidumping investigation by the notice of 3 August 1979, and by the adoption of Regulation No 3453/81 fixing the provisional antidumping duty, of which the Commission itself informed the applicant individually, asking it to give its views on the matter.

(iv) Submission A 4, concerning paragraph 10 of the statement of reasons

32. Paragraph 10 of the statement of reasons for the contested decision states that, as a result of the refusal of certain Turkish exporters to reply to the Commission's request for information, the Turkish Association of Textile Exporters, acting on behalf of all exporters, including the applicant's suppliers, supplied evidence on domestic and export prices which it claimed to be valid for all exporters.

33. The applicant maintains that the Commission adduces no evidence to show that the Turkish Association of Textile Exporters is a representative body. It claims that its suppliers belong to other associations (the Istanbul Exporters' Union and the Union of Local Exporters of Izmir and Mersin). It emphasizes that even the Commission in its contested decision does not claim that all exporters are members of the Turkish Association of Textile Exporters; consequently, the Commission should not treat as unimportant the statements made by the applicant's suppliers merely because they were not members of that association.

34. The Commission claims that the Turkish Association of Textile Exporters represented all Turkish exporters either directly or indirectly, as was evident from the confirmation given not only by the association itself but also by the Turkish Government and the association of Turkish employers in the textile industry.

(v) Submission A 5, concerning paragraphs 11 and 12 of the statement of reasons

35. Paragraphs 11 and 12 of the statement of reasons for the Commission's decision state that the Community's antidumping law expressly provides that the normal values may be determined by reference to representative or weighted average prices, and that for those purposes the Commission, after consulting the Association of Turkish Exporters, selected the three main Turkish undertakings which exported to the Community, belonging to both the public and the private sectors and representing the three main cotton-growing areas of Turkey. The paragraphs in question conclude that it was possible to accept that the production costs of those undertakings reflected very accurately the average production costs in Turkey, or were even slightly lower. Furthermore, the reliability of the information supplied by the undertakings selected as representative was borne out by the finding that the dominant factor, accounting for approximately 60% of all Turkish exporters' production costs, namely the cost of the raw cotton, was practically the same in every area of production, owing to the Government's measures of support.

36. The applicant disputes the representativity of the three undertakings chosen by the Commission. It argues that the evidence which they supplied should subsequently either have been adjusted and reconstructed or else verified and supplemented, which was not done, owing to the refusal to cooperate of one of the firms selected. The applicant states that the three undertakings chosen by the Commission did not sell their goods on the Turkish market to any great extent, which caused the Commission to use from the outset the constructed value method under Article 2 (3) (b) (ii) of Regulation No 3017/79 (costs of materials and manufacture, plus a reasonable margin for overheads and profit). It maintains that that method should not be used except as a subsidiary method, unlike the direct method which relies on the actual prices in the country of exportation. Lastly, the applicant claims that the Commission is wrong in supposing the undertakings to be representative because their size and mode of operation differ from those of family-based (or small-scale) production units such as its own suppliers.

37. The Commission submits that reference to the constructed value under Article 2 (3) (b) of the antidumping regulation once it had been established that the three undertakings selected sold relatively little on the domestic market was justified by the following:

(vi) Submission A 6, concerning paragraph 16 of the statement of reasons

38. Paragraph 16 of the preamble to the Commission's decision of 29 October 1984 states that the normal values employed for determining the antidumping duty were those used in the Arrangement of 30 July 1982 regarding minimum prices, and that this proves their accuracy, because the imports in question occurred during or after the antidumping inquiry and before the Arrangement.

39. The applicant considers that the reference to the minimum prices laid down by the Arrangement of 30 July 1982 is unjustified, and maintains that the critical time for ascertaining whether dumping is being practised is not the time at which the goods are brought into free circulation but the — earlier — time at which the exporter enters into a contract, since there must be an element of intent in dumping, which can only be demonstrated at the time when the export contracts are concluded.

40. The Commission explains that the reference in the contested decision to the system of minimum prices under the Arrangement of 30 July 1982 was designed merely to demonstrate the validity of the normal values established by the antidumping inquiry, by virtue of their having been taken into consideration for the Arrangement which was concluded with the Turkish Government and exporters. The Commission further contends that the subjective element is irrelevant and that the exporters' conduct, viewed objectively, provides sufficient grounds for the adoption of antidumping measures provided that the legal conditions are fulfilled.

D — Submissions challenging the legality of Regulation No 789/82

Admissibility of the submissions

41. The Commission pleads the inadmissibility of the applicant's submissions challenging the legality of Regulation No 789/82 laying down the definitive antidumping duty, in so far as it constituted the legal basis for the decision at issue. It argues that Regulation No 789/82 is not challenged directly by the present action and that it is not permissible to cast doubt on its validity when bringing an action against a different measure.

42. Referring to the judgment of 21 February 1984 (Joined Cases 239/82 and 275/82 Allied Corporation and Others v Commission), the Commission contends that the applicant and its suppliers may legitimately challenge Regulation No 789/82 by requesting the Court to annul it. It takes the view that any plea of illegality pursuant to Article 184 of the EEC Treaty presupposes that the measure at issue is directly linked to the regulation which is alleged to be illegal and gives effect to it. However, according to the Commission, the reimbursement procedure for antidumping duties and consequently the measure adopted in pursuance thereof is linked only to the basic antidumping regulation itself, namely Regulation No 2176/84. The Commission emphasizes that, if there is a link between the contested measure and the regulation fixing the definitive antidumping duty, that link in fact consists in acknowledging that the definitive antidumping duty was lawfully imposed, with the result that its validity cannot be contested, since it is no less than the condition placed on the request for reimbursement of the antidumping duties.

43. Finally, the Commission contends that to uphold the admissibility of the arguments against the legality of Regulation No 789/79 would be tantamount to creating a second, subsequent remedy besides the normal remedies available (whereby the exporters concerned may bring an action under Article 173 of the EEC Treaty, or whereby the importer concerned may bring proceedings before a national court, thus obtaining — according to the judgment of 6 October 1982 in Case 307/81 Alusuisse v Council and Commission [1982] ECR 3463 — full and adequate judicial protection). To allow this would be contrary to the case-law of the Court which excludes parallel remedies (such as actions for damages before the Court of Justice in parallel with national remedies, see Case 12/79 Wagner v Commission [1979] ECR 3657, or an action for damages coupled with an action for annulment, see Case 543/79 Birkem v Commission and Council [1981] ECR 2669).

44. The applicant maintains that it could not challenge Regulation No 789/82 direct because that regulation was not a decision addressed to it personally. It considers that it was permitted to challenge only the demands for duty from the national customs authorities, which indeed it did. The applicant therefore regards itself as entitled, first in the context of the reimbursement procedure and later in proceedings before the Court of Justice, to plead the illegality of Regulation No 789/82. It adds, first, that from a legal viewpoint the reimbursement procedure presupposes that the levying of the antidumping duty pursuant to the regulation which introduced those duties is legal, secondly, that Community legislation does not compel an applicant to commence proceedings before a national court prior to, or in parallel with, the reimbursement procedure, and lastly, that Article 184 of the EEC Treaty enables it to raise the objection that Regulation No 789/82 is illegal.

Substantive issues raised by the submissions

(i) Submission B 1

45. The applicant maintains that Regulation No 789/79 was adopted by the Council after the period laid down by the second sentence of Article 7 (9) of Regulation No 3017/79 had elapsed. Article 7 (9) provides: A proceeding is concluded either by its termination or by definitive action. Conclusion should normally take place within one year of initiation of the proceeding. The applicant points out that Regulation No 789/79 was adopted 32 months after the initiation of the proceeding and claims that the introduction of the provisional antidumping duty during that period cannot be regarded as definitive action. The applicant alleges that the delay is due to the fact that the Commission suspended the inquiry for lack of evidence to substantiate dumping, and resumed it only under pressure from French and British producers and their governments; it did not, however, act promptly enough to conclude the inquiry within a reasonable period.

46. The Commission contends that the period provided for by the basic regulation is merely a guideline and seeks, first and foremost, to protect Community industry.

(ii) Submission B 2

47. The applicant denies that the undertakings selected by the Commission for the purposes of its antidumping inquiry are representative, and it also disputes the accuracy of the costs and prices used and the legality of the method applied for calculating the normal values.

(iii) Submission B 3

48. The applicant maintains that the second condition placed on the introduction of an antidumping duty, namely the presence of adverse effects on Community producers, has not been substantiated. In essence, its argument is that the margin of undercutting by Turkish products, as established by the Commission, was as much as 25%, thereby causing injury to producers within the Community in any event, with the result that no injury could be attributed to the alleged dumping, because the injury existed even without dumping.

49. The Commission replies that the fixing of an antidumping duty of 12% was designed to offset—albeit partially — the damage undeniably resulting from undercutting, and it argues that the duty was equivalent to the lowest margin of dumping recorded.

(iv) Submission B 4

50. The applicant takes the view that, even if Regulation No 789/82 were legal as far as the principle of introducing antidumping duties was concerned, it was none the less illegal on three counts:

51. The Commission does not accept that there is in this instance an indirect, defacto retroactivii; first, such retroactivity is expressly prohibited by Article 13 (4) (a) of Regulations No 3017/79 and No 2176/84 and, secondly, the levying of an antidumping duty on goods which were the subject of purchase and resale does not impinge on vested legal rights. The Commission stresses that the duty is levied on all goods declared for home use within the Community with effect from the date on which the customs authorities accept those declarations, in accordance with the antidumping provisions (Articles 13 (4) (a) of Regulations No 3017/79 and No 2176/84, which cites the general customs directive, No 79/623/EEC); those provisions do not contain any general exemption for preexisting contracts because such an exemption would be contrary to the goal pursued by the antidumping duty. Lastly, the Commission points out that the applicant, who, by a telex message of 24 November 1981, had protested against the introduction of the provisional antidumping duty, nevertheless concluded contracts between that date and the date on which the duty actually took effect, namely 3 December 1981, without inserting reservations into those contracts as a precaution against such duties.

Interest chimed by the applicant

52. In the context of its alternative claims, the applicant, in addition to claiming reimbursement of DM 676782.57, seeks interest of 9% on that sum from 24 March 1982 — the date of its first request for reimbursement. In support of its claim the applicant offers a bank certificate showing that it resorted to an overdraft facility in excess of the amount claimed, which, during the material time, carried interest at an annual rate of not less than 8%.

IV — Replies of the parties to the questions put by the Court

53. The applicant, in answer to the question put by the Court, states that it does not challenge the legality of the contested decision by relying on new facts, that is to say facts which occurred after the adoption of Council Regulation No 789/82 of 2 April 1982.

54. The Commission, upon request by the Court, produced the following documents: the minutes of two meetings held on 30 September and 20 November 1981 in the context of the antidumping procedure; a telex message from the Association of Turkish Textile Exporters indicating the names of its member associations; the telex by which the applicant was informed of the adoption of the provisional antidumping duties dated 21 January 1982, and the applicant's reply of 25 January 1982; finally, the applications for a refund submitted by the applicant to the Federal Ministry of Economic Affairs on 24 March and 28 April 1982.

V — Oral procedure

55. At the hearing on 24 June 1986 the applicant, represented by Max Steeger, and the Commission of the European Communities, represented by Peter Gilsdorf, a member of its Legal Department, acting as Agent, presented oral argument.

VI — Events subsequent to the oral procedure

56. At the hearing on 24 June 1986 the applicant was requested to submit a document disclosing the actual free-at-frontier price per kilogram of each type of imported yarn. A document was lodged at the Court on 10 July 1986, and the Commission submitted its observations on it by a letter lodged on 7 August 1986.

1 Language of the Case: German.