Report for the Hearing in Case C-136/91
I — Facts and procedure
1. Legal framework
On 5 February 1987 the Council adopted Regulation (EEC) No 374/87 definitively collecting the provisional antidumping duty and imposing a definitive antidumping duty on imports of housed bearing units originating in Japan (OJ 1987 L 35, p. 32). Article 1(3) of the regulation provides as follows:
To define the products in question Regulation No 374/87 refers to subheading ex 84.63 B I of the Common Customs Tariff and describes them as cast or pressed steel housings fitted with ball bearings (Article 1(1) and (2)).
2. The main proceedings
Findling Wälzlager Handelsgesellschaft mbH (hereinafter Findling) imported from Japan housed bearing units manufactured by Asahi Seiko Ltd. to the order of Nachi Fujikoshi Corp., bearing the mark NACHI, which were sold to it by Gloria International Corp. Osaka, Japan, (hereinafter Gloria) and Ehara Industries Ltd Osaka, Japan, (hereinafter Ehara). An antidumping duty at the rate of 13.39% (a total amount of DM 6789.58) was charged on those imports on the basis of the aforesaid Regulation No 374/87.
An objection raised by Findling against the decision of the Hauptzollamt Karlsruhe (hereinafter the Hauptzollamt) to impose such an antidumping duty was rejected and Findling then brought an action before the Finanzgericht Baden-Württemberg, in which it claimed that the imposition of the duty was illegal. In that connection it does not dispute that Gloria and Ehara are to be regarded as Other exporters within the literal meaning of the table in Article 1(3) of Regulation No 374/87. It claims, however, that the application to the imports in question of an antidumping duty of 13.39% constitutes discrimination against it, since, in cases in which Nachi Fujikoshi Corp. itself exports housed bearing units bearing the mark NACHI e rate of 2.24% is applicable.
According to Findling Wälzlager Regulation No 374/87 concerns only exports effected by producers/exporters or, as in the case of Nachi Fujikoshi Corp., by exporters who manufacture other ball bearings but not housed bearing units and who have them manufactured by other producers to complete their range. Gloria and Ehara do not manufacture any of these products: they bought the housed bearing units on the Japanese market at market prices and resold them to Findling at a profit. Only a rate of antidumping duty of 2.24% can therefore be applied in this case.
The Hauptzollamt takes the view, on the other hand, that the wording of the table in Article 1(3) of Regulation No 374/87 implies the application of the rate of antidumping duty of 13.39%.
The Commission of the European Communities originally supported the position adopted by the Hauptzollamt (telex message of 16 September 1988 to the Federal Ministry of Economic Affairs and the letter of 18 October 1988 to Findling, which, however, concerned Regulation No 371/81). It subsequently took the view in its letters of 12 March and 29 October 1990 to the court of reference and in its letter of 13 March 1990 to the Federal Ministry of Economic Affairs that Gloria and Ehara were intermediary companies (middlemen or trading houses) and that it would therefore be appropriate, in the absence of an individual rate laid down for those companies as exporters, to apply the rate prescribed for the producer or the producer/exporter of the bearings. The purpose of the table in Article 1(3) of Regulation No 374/87 is, according to the Commission, to determine specific rates of antidumping duty for producers/exporters and not for exporters. Finally, in its letter of 15 April 1991 to the Federal Ministry of Economic Affairs, the Commission states that in all antidumping proceedings concerning housed bearing units it maintained the position, together with the Council, that trading houses could not enjoy the status of independent exporters. The rate of antidumping duty to be applied is therefore that prescribed for the products of the manufacturer if it is established that the housed bearing units have been manufactured by a Japanese producer specially mentioned in the antidumping regulations applicable in the case under consideration. That may be seen from Recital (11) to Council Regulation (EEC) No 1739/85 of 24 June 1985 imposing a definitive antidumping duty on imports of certain ball bearings and tapered roller bearings originating in Japan (OJ 1985 L 167, p. 3) and from Recital 14 to Commission Regulation (EEC) No 2516/86 of 4 August 1986 imposing a provisional antidumping duty on imports of housed bearing units originating in Japan (OJ 1986 L 221, p. 16), on which Regulation No 374/87 is based. The same interpretation must also apply to other antidumping regulations relating to bearings, in particular Council Regulation (EEC) No 2089/84 of 19 July 1984 imposing a definitive antidumping duty on imports of certain ball bearings originating in Japan and Singapore (OJ 1984 L 193, p. 1), as amended by Council Regulation (EEC) No 2685/90 of 17 September 1990 (OJ 1990 L 256, p. 1).
In view of the position set out above the Finanzgericht Baden-Württemberg decided, by order of 7 May 1991, to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
As regards the first question the Finanzgericht Baden-Württemberg observes, first, that, according to a literal interpretation of the table in Article 1(3) of Regulation No 374/87, exports from Gloria and Ehara, as Exporters ... Other were rightly subject to an antidumping duty at the rate of 13.39%, inasmuch as the spaces left blank in the second and third columns of that table show that the (Japanese) manufacturer and the brand or trademark are irrelevant.
The court of reference thinks that the interpretation of the table put forward by Findling and latterly by the Commission is tenable. According to that interpretation it would be sufficient, for the application of the individual rates of antidumping duty assigned to the marks mentioned under items 1 to 7, to prove that the housed bearing units were manufactured by or for the corresponding undertaking mentioned in the column headed Exporters. The 13.39% rate of antidumping duty prescribed in item 8 of the table for Other exporters would be applied only in the absence of such proof.
The court of reference observes, however, that such an interpretation raises certain doubts. In that regard it points out that, whilst Article 1 of Regulation No 2089/84 and Article 1 of Regulation No 2685/90 refer to Manufacturers/exporters, the regulation at issue refers only to Exporters, whilst Regulation No 1739/85 uses the expression manufactured by. According to a Commission communication dated 15 April 1991, Article 1 of the latter regulation was differently worded so as to avoid the difficulties encountered in applying Regulation No 2089/84.
As regards the second question, the Finanzgericht Baden-Württemberg observes that if a literal interpretation of the table were to prevail it would still be possible to consider that the rate of antidumping duty corresponding to Other exporters is applied only if the housed bearing units bear no mark or bear a mark other than those listed in the third column under items 1 to 7. In that event it would be appropriate not to charge any antidumping duty in this case, because the imported bearing units bear the mark NACHI, but the exporter is not Nachi Fujikoshi Corp. unless it follows from Article 1(1) of Regulation No 374/87 that the antidumping duty is always to be charged. That is the reason for Question (2).
3. Procedure before the Court
The order for reference was lodged at the Court Registry on 24 May 1991.
Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by Findling, the plaintiff in the main proceedings, represented by Manfred Hofmann, Rechtsanwalt, Karlsruhe, and by the Commission of the European Communities, represented by Eric White, of its Legal Service, acting as Agent, assisted by Claus-Michael Happe, a national official seconded to the Commission.
On hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. The Commission was requested to give a written reply to one question and complied with the request within the time-limit laid down.
By decision of 25 March 1992 the Court decided to assign the case to the Third Chamber pursuant to Article 95(1) and (2) of the Rules of Procedure.
II — Written observations submitted to the Court
Findling considers that the regulation in question must be interpreted teleologically. In that connection it remarks that the spirit and purpose of Regulation No 374/87 are to bring the price of products imported from Japan up to the level of European market prices but that the application of the rates of duty should not result in prices exceeding prices customary on the European market.
According to Findling, the only rate which may be applied is that mentioned in the regulation for the Japanese producer in question, irrespective of which Japanese wholesaler has obtained the products from that Japanese producer and has sold them to Findling. In that way account is taken of the principle of effectiveness according to which Findling must be treated neither better nor worse than if it were to purchase direct from the Japanese producer mentioned in the regulation.
The Commission first puts forward certain considerations for the purpose of explaining the special problem of interpretation raised by Article 1 of Regulation No 374/87.
In that connection it states that in principle the antidumping regulations must be clearly and unambiguously drafted so that no interpretation ought to be necessary. That makes it possible to guarantee their uniform application throughout the Community. Unambiguous rules are however possible only for facts known at the time the regulation is drafted.
In this case the Commission's officers were not aware of the business relations between Findling and the Japanese trading houses Ehara and Gloria for the purpose of importation into the Community. Moreover such relations did not seem possible in the situation prevailing on the Japanese market at the time of the investigation.
The Commission established that there were three groups of traders in Japan, as may be seen from Recital 13 to Regulation (EEC) No 2516/86, referred to in Recital (11) to Regulation No 374/87. The first group consists of traders who manufactured the bearing units and exported them. The second group consists of those who manufactured the housings but bought the bearings from other producers and marketed them for export under their own mark (NACHI and KOYO) in order to export them. For this second group an individual duty was prescribed (Recital 14 to Regulation No 2516/86), a duty affecting only products of which the actual production costs had previously been checked with the original producer.
The third group consists of business houses purchasing products from the most varied producers in order to market them under their original mark. The Commission states that such establishments were not taken into account at the time the specific duties were prescribed because it was not possible to grant them the status of independent exporters for the application of antidumping duties: on the one hand some of them were so closely linked to the producers that in fact they served the purpose of a sales office, and on the other hand those which were independent did not export to the Community. Moreover they could not have had the status of exporters since by reason of the large number of products marketed it was impossible to prescribe distinct dumping margins and there would have been as a result very many opportunities for infringement.
The Commission also states that in the answers given to the questionnaires Ehara and Gloria indicated that they did not export to the Community but to Switzerland; there was therefore no export to the Community.
In Regulation No 374/87 the rules therefore applied only to the first two groups. In its letter of 29 October 1990 to the Finanzgericht Baden-Württemberg (Annex 2 to the observations) the Commission's officers emphasized that the purpose of the table set out in Article 1 of Regulation No 374/87 is to lay down specific rates for antidumping duties, not for exporters but for producers who export. The proceedings relate to bearing units which are most frequently, but not invariably, manufactured also by producers of ball bearings. All the exponers listed in Article 1 of the regulation produce ball bearings; two of them, Koyo and Nachi, purchase housed bearing units from other producers in order to export them and complete their range of products. In those special circumstances specific duties were fixed for producers/exporters and not for the intermediaries.
The Commission remarks that the specific importance of the third group mentioned above appeared subsequently and that it decided to deal nonspecifically with those cases by expressly laying down in the regulations concerned an exception to the residual duty (that is, the application of the individual duty) where it is possible to prove the origin of the products and if there is an individual duty for the producers (see Council Regulation (EEC) No 112/90 of 16 January 1990 imposing a definitive antidumping duty on imports of certain compact disc players originating in Japan and the Republic of Korea and collecting definitively the provisional duty (OJ 1990 L 13, p. 21). In that case the individual duty must be charged irrespective of the exporter.
As regards in particular the first question referred to the Court by the Finanzgericht Baden-Württemberg, the Commission reminds the Court of the purpose of the residual duty (13.39%) which is applicable in principle to the products in question from the country in question (Article 13(2) of the basic regulation) but in cases for which it has not been possible to take account of special features by the introduction of an individual duty. Special cases can be taken into consideration only if there are specific factors which it has been possible to verify at the time of investigations carried out on the premises of the companies concerned, which was not the case with Ehara and Gloria.
The Commission points out another exception to the residual duty which consists in applying the individual duty where, in a case which has not been the subject of an investigation, it can be proved a posteriori that the conditions are met (Recital (11) to Regulation No 1739/85). It remarks, however, that such an exception can be envisaged only where it is expressly provided for, which is not the case here.
According to a literal interpretation of the table in question, the rate of the antidumping duty corresponding to the Other exporters is applicable irrespective of the origin of the product. However, such a literal application leads, in this case, to effects which the antidumping duty was manifesdy not intended to produce, which is why the Commission's officers opted for a broad interpretation of Regulation No 374/87.
After an in-depth examination, however, the Commission came to the conclusion that the literal interpretation of the table in question must prevail, in particular to ensure the uniform application of the various features of customs legislation in the Community. According to the Commission the answer to the first question referred to the Court must be that, regard being had to the unambiguous wording of the operative part of the regulation, it is not sufficient, for the application of the individual duty, to prove that the housed bearing units were manufactured by or for the corresponding undertaking.
As regards the second question referred to the Court, the Commission's view is that in any event a duty must be imposed on the sole ground that all exporters or producers/exporters who are not mentioned by name necessarily come under the legal concept of Other exporters.
III — Commission reply to the question put by the Court
Question
Reply
The Commission first emphasizes that it sees no objection in principle to a teleologicai interpretation of the antidumping regulations.
It observes, however, that an interpretation of legal provisions according to their intention is possible only by way of exception. If a provision is clear and offers no ambiguity it is not of such an exceptional nature and in such a case any lacuna should not be made up by interpretation. That is the position in this case, since the table set out in Regulation No 374/87 exhaustively covers all foreseeable situations, the residual duty being always payable if the situation is not covered by any cumulative factors. A teleological interpretation of the residual duty — which it is intended should apply to all cases not provided for or unforeseeable — produces the same result.
Finally the Commission emphasizes that it is important that the common customs provisions should be applied uniformly by a large number of customs officers in the various Member States in order that the effectiveness of the Common Customs Tariff should not be compromised and the wording of the provisions to be applied should therefore be as exact as possible. Any need for an interpretation would operate contrary to that requirement and compromise the effectiveness of the external protection which is essential in the case of antidumping legislation.
1 Language of the case: German.