Opinion of Mr Advocate General Mischo
Mr President,
Members of the Court,
1. Case 172/87 raises fewer — and less complex — problems than the other seven actions for annulment that Japanese manufacturers of plain paper photocopiers (hereinafter referred to as PPC) have brought against Council Regulation (EEC) No 535/87 of 23 February 1987 imposing a definitive antidumping duty on imports of plain paper photocopiers originating in Japan (hereinafter referred to as the definitive regulation or the contested regulation). First, the applicant, Mita, bases its action on only two submissions, one relating to determination of the normal value and the other to determination of the export price. Secondly, the Court has already had occasion to give its views on similar if not identical submissions in its two judgments delivered on 14 March 1990 in Joined Cases C-133/87 and C-150/87 Nashua v Commission and Council [1990] ECR I-719 and in Case 156/87 Gestetner v Council [1990] ECR I-781.
2. Moreover, Mita intervened in support of Gestetner in Case C-156/87 and, in the part of its observations devoted to the substance, confined itself to referring to the submissions that it had lodged or was to lodge in the present case. Gestetner in turn has intervened in the present case in support of Mita and, in its observations, relies largely on those which it submitted in Case C-156/87, which it treats as incorporated in those lodged in the present case, merely adding a number of additional remarks.
3. The two companies' mutual interest in intervening in support of each other arises from the fact that one of them, Gestetner, buys photocopiers from Mita in Japan and then sells them in the Community and in numerous nonmember countries. Gestetner thus falls into the category of Original Equipment Manufacturers (hereinafter referred to as OEMs) whose photocopiers, having been produced by a Japanese exporter, are subject to the antidumping duty imposed on all the latter's machines. In Mita's case, that duty, at the rate of 12.6%, is equal to the dumping margin found in respect of that company. As the Court observed in paragraph 21 of its judgment in Gestetner, that is a weighted margin which takes account not only of sales of PPCs marketed under Mita's own brand-name but also of all Mita's sales channels, and in particular its sales to OEM customers, including Gestetner. It is precisely the special features of sales to OEMs that form the basis of Mita's first submission and part of its second submission in this case.
1. The submission alleging incorrect construction of the normal value of the PPCs sold to OEMs
4. In its first submission, the applicant claims essentially that in order to determine the normal value for the purpose of making a comparison with Mita's export sales to OEMs, the institutions only partly took into account the fundamental differences between Mita's export sales to OEMs and Mita's sales on the domestic market. In its view, the institutions correctly took account of the lower level of profit which manufacturers achieve on sales to OEMs but wrongly failed also to take account of the lower costs which they incur in respect of such sales.
5. However, as the Court confirmed in paragraph 33 of its judgment in Nashua, cited earlier,
6. The question remains whether the level of the adjustment made by the institutions was sufficient to take account of all those differences. In that regard, it must be noted in the first place that the Court confirmed in its judgment of 5 October 1988, TEC v Council, at paragraph 33 (Joined Cases 260/85 and 106/86, [1988] ECR 5855), that
7. It must be pointed out that, although during the course of the investigation (see Annex 3 to its application), Mita did in fact produce a set of figures which, in its view, showed that
8. Mita's reference to a recent judgment of the United States Court of International Trade to the effect that it is unreasonable for an authority to require the production of information which it knows to be nonexistent likewise cannot have any impact on the present case. In the first place it has been held that
9. In my opinion no counterargument can be derived from the fact that Article 2(3)(b)(ii) refers, at the end, to available information, since that part of the provision relates to the element to be added to the costs in respect of profit. As far as profit is concerned, it is also worthwhile asking whether the absence of any OEM sales on the Japanese market is not in fact a clear indication that manufacturers are not interested in selling to OEMs on that market and thereby sacrificing a part of the profits which they can achieve by selling under their own brand-names. On the Community market, by contrast, they may have an interest in giving up a part of their profits in order to gain access to the preexisting network of OEMs. The possibility cannot therefore be ruled out that if there had in fact been OEM sales on the Japanese domestic market, they would have been at a profit very close to that achieved by Mita on sales under its own brand-name.
10. Having regard to the foregoing considerations, it cannot therefore be concluded that Mita has proved that by adding a margin of 5% to Mita's production costs (including SGA expenses), the Council included in the constructed normal value for the (hypothetical) sales to OEMs an amount for SGA expenses and profit which is not reasonable within the meaning of Article 2(3)(b)(ii) of the basic regulation.
11. In those circumstances, I consider that there is no need to verify whether the Council's contention, which appears in paragraph 9 of its rejoinder and is supported by a reference to the dot-matrix printer market, that
12. It is also apparent from the foregoing that there is no justification for the complaint that the method used by the Council in constructing the normal value of PPCs sold to OEMs is discriminatory. That complaint, in so far as it is based on the consideration that the adjustment actually allowed is not the same for all the exporters but is equivalent to the difference between the real profit margin achieved by the exporter concerned on domestic sales under its own brand-name and the flat-rate uniform profit margin of 5% used for construction in respect of all domestic sales to OEM buyers, overlooks, on the one hand, the fact that the adjustment is also deemed to cover the differences in costs and that it is wholly possible, if not probable, that the exporters, which receive high profits, bear lower costs and, on the other, that in the exercise of the discretion which the institutions enjoy, in the absence of any actual information, in evaluating the costs and profits to be included in the constructed normal value, they could reasonably adopt for that purpose one and the same profit level. I would add that it is apparent both from the previous decisions of the Court and from Article 2(3)(b)(ii) of the basic regulation, in its present version, that is to say as it appears in Regulation (EEC) No 2423 of 11 July 1988, which has replaced Regulation No 2176/84, that the calculation of the costs and profits for a given manufacturer or exporter may also be carried out by reference to the costs incurred and the profits earned by other manufacturers or exporters on the domestic market of the country of origin or the exporting country. In that hypothesis too, situations such as that to which Mita objects are likely to arise, since exporters whose costs and profits are normally very high receive a greater benefit than those whose costs and profits are lower from the tailing into consideration, for the construction of the normal value, of the costs and profits of other exporters. However, that has not prevented the Court or the Community legislature from considering such a method of calculation to be reasonable.
13. Finally, for the sake of completeness, I would point out that in its written observations (paragraph 30 et seq.) Gestetner, the intervener, claims that, if it were assumed that the normal value for OEM sales had been determined correctly, an adjustment would have had to be made under Article 2(9) and (10) of the basic regulation in order to ensure a proper comparison between that value and the export price. However, the same argument has already been rejected by the Court in paragraphs 36 to 40 of the judgment in Gestetner cited earlier.
2. The allegedly incorrect determination of the export price of the PPCs sold to independent importers
14. This second submission has two limbs, depending on whether the sales concerned are to OEMs or to other independent importers. In both cases the role of Mita Europe, a wholly owned subsidiary of Mita, with its registered office in Amsterdam, is at the centre of the dispute. In its judgment in Gestetner, supra, the Court stated that
15. With respect to sales to OEM importers, Mita claims essentially that the Council correctly determined the export price in accordance with Article 2(8)(a) of the basic regulation but improperly deducted from it a theoretical agent's commission of 5% to take account of Mita Europe's role, since the provision in question provides no legal basis for such a deduction. In Gestetner, supra, the Court pointed out that the Council did not determine the export price for sales to Gestetner on the basis of Article 2(8)(a) but that because of Mita Europe's involvement in the sales to Gestetner it had
16. With respect to sales to independent importers other than OEMs, Mita recognizes that the Council applied Article 2(8)(b) of the basic regulation but claims that the prices paid by those importers to Mita Europe are the normal market prices and should have been used as the export price under Article 2(8)(a), without an 11% adjustment therefore being deducted in respect of the costs (6%) and the profits (5%) inherent in Mita Europe's role. The arguments put forward by Mita in support of the applicability of Article 2(8)(a) are the same as those on which it based its view regarding the application of Article 2(8)(a) to export sales to OEMs and, therefore, the illegality of the deductions made.
17. As regards the export sales to OEMs, the Court held in Gestetner that the Council was right to apply Article 2(8)(b) of the basic regulation and therefore
18. The Court's reasoning does not of course apply only to Mita's sales to Gestetner — it applies to the other sales on an OEM basis in which Mita Europe was involved in the same way. Nor is there any reason not to apply it also to Mita's sales to other independent importers in which Mita Europe was involved. In all those cases in fact, Mita Europe,
19. It therefore only remains for me to express my views briefly on a number of arguments which were not raised in the Gestetner case. In the first place, on the basis of the fact that Mita Europe, although not the official importer of Mita products, nevertheless fulfils the functions of such an importer, the institutions, contrary to the applicant's assertion, relied on the economic reality rather than taking a purely formal approach.
20. As regards the argument that, by thus applying Article 2(8)(b) of the basic regulation to export sales to independent importers, whether or not OEMs, the institutions deducted profits twice, it has no real basis. Only one adjustment for profit was made and it related to the price paid by the independent importers to Mita Europe and not to the price paid to the independent importers by their customers. The fact that the export price does not include the profit made by the independent importers on sales to their customers in the Community market is merely the consequence of the fact that it corresponds to the price paid or payable for the product sold by way of export to the Community and not the price paid or payable on the Community market.
21. Finally, Mita's reference to Commission Decision 2247/87/ECSC of 28 July 1987 imposing an antidumping duty on certain sheets and plates of iron or steel originating in Mexico does not seem to me to be relevant. It is true that the Commission acknowledges in that decision that
22. Finally, as Mita has not contested the level of the adjustment made to take account of Mita Europe's role in its sales to independent importers, and since neither the documents before the Court nor the oral arguments presented to it have shown the adjustment to have been excessive, it follows from all the foregoing that the second submission likewise cannot be upheld.
Conclusion
23. Mita's application must therefore be dismissed and Mita must be ordered to pay the costs, including those of the parties intervening in support of the Council. Gestetner must bear its own costs.
1 Original language: French.
2 OJ 1987 L 54, p. 12.
3 In their decision, the insiitulions call firms such as Gestetner Original Equipment Manufacturers and I shall follow that practice, though it should be pointed out that they are in fact companies which buy equipment from original manufacturers and sell it under their own brand-names.
4 Council Regulation (EEC) No 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community (OJ 1984 L 201, p. 1).
5 See Joined Cases 133 and 150/87 Nashua v Commission and Council, supra, paragraph 30, and Joined Cases 277/85 and 300/85 Canon v Council [1988] ECR 5731, paragraph 15.
6 See for example paragraph 18 of die judgment in Joined Cases 273/85 and 107/86 Silver Seiko v Council [1988] ECR 5927, from which il is apparent thai the institutions did not overstep their discretion in using, for the construction of normal value in the case of an exponer which did not sell on the domestic market, the profil margin determined for another exponer. In the present case, the margin used was the lowest of those determined for undertakings which sold sufficient quantities on the domeslic market.
7 OJ 1988 L 209, p. 1.
8 OJ 1987 L 207, p. 21. In its Decision No 3499/87/ECSC of 19 November 1987 imposing a definitive antidumping duty (OJ 1987 L 330, p. 42) the Commission confirmed, in the absence of any new evidence, its interim conclusions concerning in particular the dumping and the injury.