Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE GENERAL COURT (Seventh Chamber)

26 November 2015 (*)

(Dumping — Imports of bicycles originating in China — Interim review — Article 9(5) and Article 18 of Regulation (EC) No 1225/2009 — Individual treatment — Non-cooperation — Necessary information — Facts available — Related companies — Circumvention)

In Case T‑425/13,

Giant (China) Co. Ltd, established in Kunshan (China), represented by P. De Baere, lawyer,

applicant,

v

Council of the European Union, represented by S. Boelaert, acting as Agent, B. O’Connor, Solicitor, and S. Gubel, lawyer,

defendant,

supported by

European Commission, represented by J.-F. Brakeland and M. França, acting as Agents,

and by

European Bicycle Manufacturers Association (EBMA), represented by L. Ruessmann, lawyer, and J. Beck, Solicitor,

interveners,

APPLICATION for annulment of Council Regulation (EU) No 502/2013 of 29 May 2013 amending Implementing Regulation (EU) No 990/2011 imposing a definitive anti-dumping duty on imports of bicycles originating in the People’s Republic of China following an interim review pursuant to Article 11(3) of Regulation (EC) No 1225/2009 (OJ 2013 L 153, p. 17),

THE GENERAL COURT (Seventh Chamber),

composed of M. van der Woude (Rapporteur), President, I. Wiszniewska-Białecka and I. Ulloa Rubio, Judges,

Registrar: C. Heeren,

having regard to the written part of the procedure and further to the hearing on 21 May 2015,

gives the following

Judgment

 Background to the dispute

1        The applicant, Giant (China) Co. Ltd, is a company established in China which manufactures bicycles for domestic and export sales, including to the European Union. It is part of a group of companies (‘the Giant group’) whose ultimate shareholder is the Taiwanese company G.M.

 Initial anti-dumping procedures and review procedure

2        By Council Regulation (EEC) No 2474/93 of 8 September 1993 imposing a definitive anti-dumping duty on imports into the Community of bicycles originating in the People’s Republic of China and collecting definitively the provisional anti-dumping duty (OJ 1993 L 228, p. 1), the Council of the European Union imposed a definitive anti-dumping duty of 30.6% on imports of bicycles originating in China.

3        Following an expiry review pursuant to Article 11(2) of 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), the Council, by Regulation (EC) No 1524/2000 of 10 July 2000 imposing a definitive anti-dumping duty on imports of bicycles originating in the People’s Republic of China (OJ 2000 L 175, p. 39), decided to maintain the anti-dumping duty of 30.6%.

4        Following an interim review pursuant to Article 11(3) of Regulation No 384/96, the Council, by Regulation (EC) No 1095/2005 of 12 July 2005 imposing a definitive anti-dumping duty on imports of bicycles originating in Vietnam, and amending Regulation No 1524/2000 (OJ 2005 L 183, p. 1), increased the anti-dumping duty in force to 48.5%.

5        On 10 January 2006 the Commission of the European Communities initiated ex officio a partial interim review pursuant to Article 11(3) of Regulation No 384/96.

6        By Regulation (EC) No 1651/2006 of 7 November 2006 terminating the partial interim review of the anti-dumping measures applicable to imports of bicycles originating in the People’s Republic of China (OJ 2006 L 311, p. 6), the Council decided to maintain the anti-dumping measures in force with regard to the applicant. It was found during the investigation that the applicant was related to a bicycle manufacturer in China, namely Shanghai Giant & Phoenix Bicycle Co. Ltd (‘GP’), which had not returned the market economy treatment claim (‘MET’) form, and that it was therefore impossible to determine whether the Giant group, as a whole, met all the criteria for the grant of MET, or to verify whether the applicant fulfilled the requirements to have an individual duty established.

7        In October 2011, following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ 2009 L 343, p. 51, corrigendum OJ 2010 L 7, p. 22; ‘the basic regulation’), the Council, by Implementing Regulation (EU) No 990/2011 of 3 October 2011 (OJ 2001 L 261, p. 2), decided to maintain the anti-dumping duty of 48.5%.

8        Following the expiry review, the evidence available to the Commission indicated that, as far as dumping and injury were concerned, the circumstances on the basis of which the existing measures were imposed could have changed and that those changes could be of a lasting nature.

9        Consequently, on 9 March 2012 the Commission announced the initiation, ex officio, of an interim review of the anti-dumping measures applicable to imports of bicycles originating in China, pursuant to Article 11(3) of the basic regulation.

10      The interim review related to bicycles and other non-motorised cycles originating in China (‘the product concerned’). The investigation relating to dumping and injury covered the period from 1 January to 31 December 2011 (‘the RIP’).

11      The Commission officially gave notice of the initiation of the investigation to known European Union producers, known associations of European Union producers, known exporting producers in China and an association of Chinese producers, the representatives of China, known importers and associations of importers, known European Union producers of bicycle parts and their associations and a known association of users. It gave the interested parties the opportunity to make their views known in writing and to request a hearing within the time-limit set in the notice of initiation.

12      Only eight Chinese groups of exporting producers came forward, of which only four, including the applicant, reported exports to the European Union during the RIP. The applicant, moreover, informed the Commission that, among the companies belonging to the Giant group, the joint venture GP had ceased all operations in September 2011 and was in liquidation. On the basis of that information, the applicant requested that GP be excluded from the investigation, on the ground that that company no longer existed.

13      On 15 May 2012 the Commission sent MET claim forms to the four Chinese exporting producers. In the letter sent to it, the applicant was informed that, if it wished to claim MET, every related company situated in China had to complete a MET claim form, including GP, since that company produced bicycles and was the Giant group’s biggest exporter to the European Union during the RIP.

14      On 4 June 2012 the applicant submitted the MET claim forms for six Giant group companies, including GP. In its MET claim form, GP was presented as a joint venture established by a Taiwanese company, namely the company B.I., itself related to G.M., and two Chinese companies, the company S.G. and Jinshan Development and Construction (‘Jinshan’). B.I. and Jinshan each held 45% of GP’s shares, whereas S.G. held 10%.

15      By letter of 14 June 2012, the Commission sought clarification concerning the relationship between the applicant and Jinshan. On the basis of the preliminary assessment, the Commission found that the Giant group was related to Jinshan and that the principal investments of the latter related to the manufacturing and sale of bicycles. Consequently, the applicant was informed that it was to return the MET claim form for Jinshan and all the companies belonging to that company (‘the Jinshan group’). Without those forms, the Commission indicated that it could draw conclusions on the basis of the facts available, in accordance with Article 18 of the basic regulation, and reject the MET claim for the Giant group as a whole.

16      On 21 June 2012 the applicant submitted observations on the Commission’s letter of 14 June 2012. It stated, in particular, that because it was only very indirectly related to Jinshan through the joint venture GP and Jinshan was not a producer of the product concerned, it was not required to submit a MET claim for that company.

17      By letter of 4 July 2012, the Commission confirmed that it considered that the applicant was indeed related to Jinshan and that, the entities of the Jinshan group having failed to complete the MET claim form, it intended to apply Article 18 of the basic regulation and to reject the MET claim of the Giant group. Furthermore, the Commission asked the applicant to submit responses to the anti-dumping questionnaire for all the bicycle exporting producers related to it, including those belonging to the Jinshan group.

18      By letter of 16 July 2012, the applicant maintained its position that its relationship with Jinshan was only indirect and that the latter was therefore not required to complete a MET claim or the anti-dumping questionnaire.

19      On 20 July 2012 the applicant submitted the responses to the anti-dumping questionnaire for 11 companies that were part of the Giant group and participated in the production and export of the product concerned, including GP, and for 6 sales subsidiaries established in the European Union.

20      On 28 August 2012, at an oral hearing held at the premises of the Commission, the applicant raised objections to the Commission’s intention to apply Article 18 of the basic regulation in the context of its MET claim, arguing that it was neither necessary nor possible to submit MET claim forms or questionnaire responses for the other companies in which Jinshan had invested.

21      On 23 October 2012 the Commission informed the applicant that, not having received a MET claim for the Jinshan group companies, it could not investigate the merits of the applicant’s MET claim. Consequently, the Commission decided to apply Article 18(1) of the basic regulation and not to take into account the information submitted by the applicant in relation to its MET claim as a whole.

22      By letter of 12 November 2012, the applicant submitted observations on the application of Article 18(1) of the basic regulation in the context of the MET claim.

23      On 21 March 2013 the Commission informed the applicant that it intended to apply Article 18(1) of the basic regulation and to base its findings on the facts available also for the purposes of establishing the export price, given that, failing complete information on all the parties related to GP, it was impossible to perform complete and reliable calculations on the export price and thereby to determine an individual margin of dumping for GP and, consequently, for the Giant group as a whole.

24      On 11 April 2013 the applicant submitted its observations on applying Article 18(1) of the basic regulation to determine the export price and on the final disclosure document.

25      On 5 June 2013 the Council adopted Regulation (EU) No 502/2013 of 29 May 2013 amending Implementing Regulation No 990/2011 imposing a definitive anti-dumping duty on imports of bicycles originating in the People’s Republic of China following an interim review pursuant to Article 11(3) of the basic regulation (OJ 2013 L 153, p. 17; ‘the contested regulation’).

 Contested regulation

26      In recitals 61 to 65 of the contested regulation, the Council stated that all exporting groups that initially cooperated with the investigation had requested MET, in accordance with Article 2(7)(b) of the basic regulation. However, the applicant’s refusal to provide the Commission with the necessary information on the structure of the group led to the application of Article 18(1) of the basic regulation and to the rejection of the applicant’s claim for MET. Furthermore, MET could not be granted to the other Chinese company groups, for none of them fulfilled all the criteria set out in Article 2(7)(c) of the basic regulation.

27      In recital 115 of the contested regulation, the Council stated that the three cooperating exporting groups which had requested MET had also claimed individual treatment in the event of their not being granted MET, and concluded that those three groups met all the conditions required to benefit from such treatment.

28      In recitals 116 to 122 of the contested regulation, the Council concluded that Mexico was still an appropriate analogue country for the purposes of determining normal value for the exporting producers not granted MET, in accordance with Article 2(7)(a) of the basic regulation.

29      In recitals 131 to 135 of the contested regulation, the Council stated that the applicant had refused to provide the necessary information on the structure of the group and essential information concerning production, export sales volume and prices of the product concerned to the European Union during the RIP by the companies forming part of the Jinshan group, and that it had therefore applied Article 18(1) of the basic regulation to determine the export price. In that regard, the Council stated that one of the Giant group’s subsidiaries active in the production and export of the product concerned to the European Union during part of the RIP, namely GP, was related to the Jinshan group and that the latter was involved in the production and sales of the product concerned. However, given that the companies forming part of the Jinshan group had failed to return the MET claim form and had not responded to the anti-dumping questionnaire, it was impossible to assess the extent to which the production and sale of the product concerned by the Jinshan group could have an impact on the determination of GP’s export price. It had thus not been possible to determine an individual margin for GP or, consequently, for the Giant group as a whole.

30      In recital 136 of the contested regulation, the Council stated that, during the investigation, the applicant had not suggested that obtaining the information requested by the Commission represented an unreasonable burden. It was only after final disclosure that the applicant provided evidence of its alleged efforts, that is to say, at a stage when any verification of that information was impossible.

31      In recital 137 of the contested regulation, the Council stated that the cessation of GP’s operations in September 2011 did not rule out the risk of circumvention of anti-dumping measures, for example through the transfer of production between the Jinshan and Giant groups. Since GP still existed at the end of the RIP, that undertaking could resume its production activity at any time in the future.

32      In recital 139 of the contested regulation, the Council concluded that the information that the shares held by the Giant group in GP had been sold, on 30 March 2013, could not be verified on account of the advanced stage of the investigation and was, moreover, irrelevant. The Council noted that that transaction had occurred after the RIP. In that regard, the Council stated that, if the applicant wished for a review of its situation following the sale of its shares in GP, its request could be considered in due time in accordance with the provisions of the basic regulation.

33      In recitals 143 to 146 of the contested regulation, the Council established the new dumping margins for the three cooperating companies, calculated by comparing the weighted average normal value established for the cooperating Mexican producers with each company’s weighted average export price to the European Union. For all other exporting producers, including the applicant, the Council decided that the national dumping margin applicable to them could not be revised.

34      In those circumstances, and as is clear from Article 1(2) of the contested regulation, the Council established an individual rate of anti-dumping duty for each cooperating company and maintained the anti-dumping duty rate applicable, at national level, to all other companies at 48.5%.

 Procedure and forms of order sought by the parties

35      By application lodged at the Registry of the General Court on 19 August 2013, the applicant brought the present action.

36      By document lodged at the Court Registry on 26 September 2013, the Commission sought leave to intervene in support of the form of order sought by the Council.

37      By order of the President of the Fourth Chamber of 26 November 2013, the Commission was granted leave to intervene.

38      By document lodged at the Court Registry on 20 December 2013, the European Bicycle Manufacturers Association (‘the EBMA’) sought leave to intervene in support of the form of order sought by the Council.

39      By letter lodged at the Court Registry on 23 January 2014, the applicant sent the Court a request for confidential treatment of certain passages of the application, the defence and the reply, and also of certain documents annexed to those pleadings. To that end, the applicant produced a non-confidential version of the documents concerned.

40      By order of the President of the Seventh Chamber of 24 February 2014, the EBMA was granted leave to intervene.

41      By letter lodged at the Court Registry on 2 April 2014, the applicant sent the Court a request for confidential treatment of one passage of the rejoinder. To that end, the applicant produced a non-confidential version of the document concerned.

42      By letter lodged at the Court Registry on 9 April 2014, the EBMA informed the Court that it had no objections to the applicant’s request for confidential treatment.

43      Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Seventh Chamber, to which the present case was accordingly allocated.

44      The applicant claims that the Court should:

–        annul the contested regulation in so far as it concerns the applicant;

–        order the Council to pay the costs.

45      The Council, supported by the Commission and the EBMA, contends that the Court should:

–        dismiss the action as unfounded;

–        order the applicant to pay the costs.

 Law

46      In support of its action, the applicant relies on eight pleas in law. The first plea alleges infringement of Article 9(5) of the basic regulation, in so far as the Council applied the wrong legal criterion in finding that Jinshan and the applicant formed a single entity. The second plea alleges a manifest error of assessment, in so far as the Council concluded that the companies of the Giant and Jinshan groups had a close structural and commercial relationship. The third plea alleges infringement of Article 18 of the basic regulation and is divided into two parts. In the first part, the applicant claims that the information requested was not necessary within the meaning of the abovementioned provision. In the second part, it states that it acted to the best of its abilities but could not obtain the information requested, with the result that the institutions placed an unreasonable burden on it. The fourth plea alleges a manifest error of assessment, in so far as the Council considered that the applicant had not suggested that obtaining the information relating to Jinshan represented an unreasonable burden. The fifth plea alleges a manifest error of assessment, in so far as the Council considered that the applicant’s statements, according to which there was no relationship between the applicant and the other companies belonging to the Jinshan group, could not be verified. The sixth plea alleges infringement of the rights of the defence, in so far as the Council required information which the applicant was unable to provide and rejected the evidence that was presented to it. The seventh plea alleges a manifest error of assessment, in so far as the Council considered that the imposition of an individual duty on the applicant would have created a risk of circumvention. The eighth plea alleges infringement of the principles of non-discrimination and proportionality with regard to the criteria applied for assessing the existence of a risk of circumvention.

47      As a preliminary point, it should be borne in mind that the refusal by the institutions to grant MET to an undertaking does not necessarily exclude an undertaking from individual treatment. Even though the normal value cannot be determined individually in such a case, an individual dumping margin and, thus, an individual anti-dumping duty could nevertheless be determined by taking the relevant undertaking’s own export prices into account.

48      In the present case, the Council refused to grant individual treatment to the applicant because it did not regard itself as having the information necessary for calculating an individual margin for the applicant. It was of the view that, without complete information on all the parties related to GP, and, in particular, on the Chinese bicycle exporting producers belonging to the Jinshan group, it was impossible for it to calculate the applicant’s export price. Moreover, it indicated that, since the companies of the Jinshan group were related to those of the Giant group through GP, there was an intrinsic risk of circumvention and confirmed at the hearing that the existence of such a risk had, to a certain extent, influenced its decision not to grant individual treatment to the applicant.

49      Therefore, it is necessary, as a first step, to examine the applicant’s argument that the Council did have the information necessary for determining an individual anti-dumping margin for it and that the application of Article 18(1) of the basic regulation, which led the Council to disregard that information and to reach its conclusions on the basis of the facts available, was therefore not justified. The applicant develops that argument, essentially, in the first part of its third plea, in which it states that the requested information was not necessary within the meaning of the abovementioned provision, as well as in its fifth plea, in which it specifies which information, among that provided to the institutions, allowed that statement to be verified. It is therefore appropriate to examine the whole of the first part of the third plea and the fifth plea.

50      As a second step, in so far as the existence of a risk of circumvention was also taken into consideration by the Council when adopting the contested regulation, it will be necessary to examine the applicant’s arguments in that regard, developed in the seventh plea, in order to determine whether the Council could consider such a risk to be a relevant factor in refusing to grant the applicant individual treatment.

51      As a third step, if necessary, the other pleas relied on by the applicant will be examined.

 Necessity of the information requested by the Council

52      The applicant claims that the information requested by the Council concerning the Jinshan group companies was not necessary for calculating a reliable export price and, therefore, for determining an individual dumping margin.

53      In that regard, first, it claims that only the price information concerning the companies with which it forms a single entity must be taken into account in calculating its margin. In its view, there is no close structural and commercial relationship between the Jinshan and Giant groups, which, therefore, cannot be regarded as a single entity.

54      Second, it considers that, in any event, the responses of the Jinshan group companies were unnecessary for calculating a reliable export price, since the Jinshan group companies [confidential]. (1) The absence of such transactions could, furthermore, have been verified on the basis of the detailed anti-dumping questionnaire responses of the Giant group companies.

55      The Council argues that full information on the parties related to the joint venture GP and belonging to the Jinshan group was necessary for the applicant’s MET claim to be assessed and for complete and reliable export price calculations to be made. It states, moreover, that the applicant supplied false or misleading information on various points during the investigation. Consequently, the Council is of the view that, in accordance with the provisions of the basic regulation and, in particular, Article 18(1), it was entitled to reach its conclusions on the basis of the facts available.

56      First of all, it should be noted that the question that arises in this case concerns the determination of an individual anti-dumping duty and, in particular, the calculation of the export price. That question is governed by Articles 2 and 18 of the basic regulation, the former provision laying down the substantive rules applicable to determining the normal value and export price, the latter determining the consequences of non-cooperation in communicating the necessary information in the application of those substantive rules (see, by analogy, the World Trade Organisation (WTO) Panel Report of 22 April 2003, in the case ‘Argentina — Definitive Anti-Dumping Duties on Poultry from Brazil’ (WT/DS241/R), paragraph 7.215). Therefore, in the present case, only those two provisions are relevant for assessing the necessity of the requested information to calculate the export price.

57      Next, as regards the export price, pursuant to Article 2(8) of the basic regulation the export price is the price actually paid or payable for the product when sold for export to the European Union. Where there is no export price or where it appears to the authorities concerned that the export price is unreliable because of an association or a compensatory arrangement between the exporter and the importer or a third party, Article 2(9) of the same regulation provides that the export price may be constructed on the basis of the price at which the imported products are first resold to an independent buyer.

58      Article 2(10) of the basic regulation provides, moreover, that a fair comparison is to be made between the export price and the normal value and that, where the normal value and the export price as established are not on such a comparable basis owing to factors which affect the export price, adjustments may be made to that price.

59      Accordingly, the Court considers that, pursuant to Article 2(9) of the basic regulation, it is primarily the relationships between the exporting producer in question and the companies importing the product at issue into the European Union that are capable of casting doubt on the reliability of the export price. Providing detailed information on those related importers may therefore prove necessary for the construction of a reliable export price.

60      Nevertheless, it is not ruled out that the relationships between the exporting producer at issue and other companies established in the exporting country may also be relevant for determining the export price, particularly at the stage of the adjustments which may be made under Article 2(10) of the basic regulation in order to make that export price comparable to the normal value. Certain information relating to those other companies may thus prove necessary for making complete and reliable calculations in respect of the export price, making any adjustments and, therefore, determining an individual dumping margin and an individual anti-dumping duty.

61      Last, with regard to non-cooperation, the first sentence of Article 18(1) of the basic regulation authorises the institutions to use the facts available in cases in which any interested party refuses access to, or otherwise does not provide, necessary information within the time-limits provided in that regulation, or in which it significantly impedes the investigation. The use of facts available is also authorised if any interested party supplies false or misleading information. It is apparent from the wording of that provision that these four conditions are alternatives, so that if just one of them is satisfied, the institutions may use the facts available as the basis for their provisional or final findings (judgment of 22 May 2014 in Guangdong Kito Ceramics and Others v Council, T‑633/11, EU:T:2014:271, paragraph 44).

62      In the present case, it must be examined whether application of Article 18(1) of the basic regulation was justified or whether, as the applicant claims, the Council had the information necessary for calculating a reliable export price.

63      In the first place, it should be pointed out that, by letter of 20 July 2012, the applicant provided complete responses to the anti-dumping questionnaire for six of its sales subsidiaries established in the European Union and that at no point did the Council complain of a lack of information in that regard. The information the applicant provided was thus sufficient for assessing the relationships between the applicant and the companies established in the European Union for the purposes of determining the export price.

64      In the second place, it should be noted that the applicant provided, within the time-limits, complete responses to the anti-dumping questionnaire for all the other Giant group companies, including GP. Moreover, it provided the Jinshan group’s consolidated statements, which allowed all the companies belonging to that group to be identified.

65      In that regard, first of all, it is apparent from the Jinshan group’s consolidated statements, read in combination with the information provided in relation to GP, that the amounts of the transactions carried out between the Giant and Jinshan groups corresponded to the amounts of the transactions carried out between the Giant group and GP, apart from a minor difference in respect of which the applicant provided a detailed explanation, in its letter of 16 July 2012, which was not disputed by the Council. It can therefore be concluded from the information provided by the applicant that, among the Jinshan group companies, only the joint undertaking GP had carried out transactions with the Giant group during the RIP.

66      Next, in relation to the Council’s argument that Jinshan’s financial statements contain only aggregated data describing the group’s financial situation at the end of the period in question, but do not allow it to be determined whether other sales or acquisitions took place between the Jinshan and Giant groups during the RIP, it must be noted that, according to the applicant, all the companies operating under its control provided detailed transaction-by-transaction information on all their sales and purchases, listing the names of all their suppliers and customers, a claim which is not disputed by the Council. The institutions conducting the investigation could thus verify, on the basis of the information supplied by the applicant concerning the companies in the Giant group, the existence of any other commercial transactions between the companies acting under the applicant’s control and the other companies in which Jinshan had invested. It must be stated that, on the basis of all of that information, the Council found no evidence suggesting the existence of transactions between the Giant and Jinshan groups which did not involve GP.

67      Last, it should be noted that, as an annex to its letter of 16 July 2012, the applicant provided the Commission with a copy of a statement of the Jinshan board of directors confirming that the only connection between the applicant and the Jinshan company was the joint venture GP and that neither Jinshan nor any of its subsidiaries had any relationship whatsoever with it. Although that statement is not signed, but bears only a stamp, as noted by the Commission in its letter of 21 March 2013, that fact cannot, in principle, call into question the authenticity of that document, given that the applicant provided a certain number of documents explaining the importance of affixing a stamp or seal in business relations in China. It is apparent from the documents provided by the applicant that every company registered in China is required by law to create a seal, which will be used to represent the company in its operations. Moreover, in certain cases, only the affixing of such a seal is accepted as a signature on a legal document. The Court therefore considers that, while Jinshan’s statement cannot in itself constitute sufficient evidence to conclude that there was no relationship between the Jinshan group companies and the applicant, it may nevertheless be regarded as a document capable of supporting such a conclusion.

68      Therefore, even considering that many of the Jinshan group companies manufactured the product concerned and generated a large portion of that group’s turnover, that fact does not support the conclusion, in the present case, that the information regarding those companies was necessary for calculating the applicant’s export price.

69      In the third place, the Court points out that, neither in its pleadings nor at the hearing was the Council able to specify what additional information concerning the Jinshan group companies might have proved necessary for the calculation of the applicant’s export price. The applicant cannot, therefore, be criticised for not having provided certain information specified by the Council as necessary on the basis of vague allegations, especially since the lack of a relationship between the applicant and the Jinshan group companies clearly invalidated the Council’s allegations as regards the necessity of the responses to the anti-dumping questionnaire for those latter companies (see paragraphs 64 to 68 above).

70      In those circumstances, the Court considers that the Council was wrong to apply Article 18(1) of the basic regulation and reach its conclusions on the basis of facts available, since it had the information necessary for calculating a reliable export price and, therefore, for establishing an individual dumping margin and an individual anti-dumping duty. The information provided by the applicant allowed such a price to be calculated and the Council was unable to determine what additional information would have been necessary to that end.

71      That conclusion cannot be called into question by the Council’s allegation that the applicant had supplied false or misleading information. The Court considers that the alleged inconsistences identified by the Council are not such as to cast doubt on the reliability of the information and of the responses to the anti-dumping questionnaire provided by the applicant for the Giant group companies.

72      In that regard, first, although the terms used by the applicant to describe the method for ending GP’s operations was rectified during the administrative procedure, the applicant clearly explained to the Commission, in its letter of 21 June 2012, that the term ‘liquidation’ mentioned in the response forms referred to the fact that GP had ceased operations and that the bulk of its goods and equipment had been sold in September 2011. Moreover, it explained that there were plans to put an end to that company by means of [confidential]. (2) Consequently, while the use of the term ‘liquidation’ was inappropriate in this case, it cannot be regarded as misleading, since the subsequent information provided by the applicant quickly allowed GP’s situation to be clarified.

73      Second, with regard to the fact that the applicant had not revealed that the Chinese Government held 33.13% of Jinshan, it should be noted that that company was presented as an entity distinct from the applicant, which the Council never disputed. The applicant cannot, therefore, be criticised for not having immediately provided the information regarding the composition of Jinshan’s shareholding in its answers to the questionnaire.

74      Third, with regard to the information concerning the Jinshan group which, according to the Council, was incomplete in so far as it did not mention that some of the companies belonging to that group were active in the production of the product concerned, the Court notes that, in paragraphs 64 to 68 above, it was concluded that the information regarding those companies was not, in this case, likely to influence the determination of the applicant’s export price. However, the mere fact that the applicant did not provide certain information which proves to be irrelevant in the calculation of the export price cannot be regarded as a lack of cooperation that would cast doubt on the reliability of other information provided by the applicant or, accordingly, justify the application of Article 18(1) of the basic regulation for the calculation of that price.

75      Fourth, with regard to the various arguments put forward by the applicant to justify the lack of communication of the information requested by the Commission, namely, initially, the non-necessity of that information and, then, Jinshan’s refusal to provide that information, it must be pointed out that the applicant never abandoned its first argument. The applicant has not, therefore, changed its line of argument in that regard, but has merely advanced an additional argument that cannot undermine the consistency of its line of argument, contrary to what the Council asserts.

76      Accordingly, the items of evidence put forward by the Council, taken individually or in conjunction, did not support the conclusion, in this case, that the information provided by the applicant regarding the export price was false or misleading and therefore did not justify disregarding that information in favour of other available facts.

77      Therefore, in view of all the foregoing, the third and fifth pleas must be upheld, without it being necessary to rule on the second part of the third plea. It may be concluded that the Council infringed Article 18(1) of the basic regulation in using the facts available within the meaning of that provision for the calculation of the export price, even though the applicant had provided the information necessary for calculating that price. The Court considers, therefore, that it is not necessary to answer the question of whether the institutions’ request placed an unreasonable burden on the applicant and whether such a situation could also have excluded the application of Article 18(1) of the basic regulation.

78      In so far as the refusal to grant individual treatment to the applicant was justified not only by the impossibility of calculating an individual export price, but also by the existence of a risk of circumvention, it is appropriate to examine whether, in the present case, such a risk could justify the Council’s decision to subject the applicant to the countrywide duty rate.

 Risk of circumvention

79      The applicant argues that the imposition on it of an individual duty would not have created a risk of circumvention, because the Jinshan group companies were not able to channel their exports through GP to benefit from a lower anti-dumping duty.

80      The Council, on the other hand, considers that the risk of circumvention is intrinsic to the concept of ‘related companies’. It is of the view that, if the exporting producers are related to other exporting producers benefiting from a lower individual anti-dumping duty rate, circumvention is likely to occur since sales can easily be channelled via the related company to which the lower anti-dumping duty rate applies.

81      In that regard, in the first place, it should be pointed out that, pursuant to the first subparagraph of Article 9(5) of the basic regulation, an individual anti-dumping duty must, in principle, be imposed on every exporting producer. Such a duty may also be determined for companies that have not obtained MET, subject to compliance with certain conditions, set out in the second subparagraph of that provision, one of which refers to the question of the risk of circumvention.

82      Nevertheless, in the present case, the Council confirmed at the hearing, in response to a question from the Court, that the conditions set out in the second subparagraph of Article 9(5) of the basic regulation had not been taken into consideration in the examination of the applicant’s situation. Moreover, it did not refer to any other provision of the basic regulation that provides that the existence of a risk of circumvention may justify the refusal to grant an individual anti-dumping duty to an exporting producer. In those circumstances, the Court considers that such a risk cannot be invoked by the Council to justify subjecting the applicant to the countrywide duty rate.

83      In the second place, the Court considers that the Council cannot invoke a solely hypothetical risk of circumvention, intrinsic, in its view, to the concept of ‘related companies’, to refuse the grant of an individual anti-dumping duty. Contemplated hypothetically, the risk of circumvention could be regarded as intrinsic to the very principle of the application of an individual anti-dumping duty, since, even despite any link between several companies, it is not ruled out that those companies, following the imposition of an anti-dumping duty calculated individually for each of them or for one of them, may organise themselves to channel their exports through the one that has been subjected to the lowest duty rate. Such an interpretation would therefore leave the grant of an individual anti-dumping duty to the sole discretion of the Council, which in no way corresponds to the provisions of Article 9(5) of the basic regulation.

84      In addition, it must be stated that, in accordance with the case-law of the WTO Dispute Settlement Body, the risk that the imposition of individual anti-dumping duties might be ineffective for combating dumping cannot, in itself, justify the imposition of a countrywide duty on exporting producers (see the WTO Panel Report of 3 December 2010, in the case ‘European Communities — Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China’ (WT/DS397/R), paragraphs 7.107 to 7.109, and the WTO Appellate Body Report of 15 July 2011 in the same case (WT/DS397/AB/R), paragraph 348). Thus, the fact that certain exporters may be able to circumvent higher anti-dumping duties by channelling exports through exporters subject to the lower duty rate could admittedly render individual anti-dumping duties ineffective, but cannot justify, in itself, the application of the countrywide duty rate to related exporters.

85      In the third place, the Court considers that, in any event, the information available to the institutions when adopting the contested regulation was sufficient to conclude that there was no risk of circumvention between the Giant and Jinshan groups.

86      First, the information provided by the applicant showed that, apart from GP, none of the subsidiaries of Jinshan active in the production of the product concerned was related to the applicant (see paragraphs 64 to 68 above).

87      Second, with regard to GP, it should be pointed out that the applicant informed the Commission, early in the administrative procedure, that that company had ceased production and business operations as of September 2011. By that date, all of GP’s manufacturing equipment and existing inventories had, moreover, been sold and the employees had been made redundant, with the exception of the eight management personnel responsible for the completion of the administrative and accounting formalities resulting from the cessation of the company’s activities and the transfer of its assets. Contrary to what the Council asserts in recital 137 of the contested regulation, it was therefore unlikely that GP’s production activity would resume in the future.

88      Moreover, it should be stated that the applicant provided proof that, before the end of the RIP, GP’s shareholders had formally committed themselves to ending that company and to selling the remaining shares to a third company. That decision is apparent from the minutes of the meetings of the GP board of directors of 26 May, 24 August and 16 December 2011, as well as from the statement of the Jinshan board of directors of 18 January 2012.

89      In addition, on 30 March 2013 — after the RIP but before the adoption of the contested regulation — the decision to sell the shares held in GP was actually taken by the applicant, which sold its stake to a third company, thereby eliminating the only link between it and the Jinshan group and, consequently, the only element that, in the Council’s view, gave rise to a risk of circumvention. Even though the dissolution of GP by means of selling the shares held in the company was validated after the RIP and communicated to the institutions at a relatively advanced stage of the investigation, namely 11 April 2013, the Court considers that that information could, in the present case, have been taken into account in assessing the risk of circumvention. The applicant’s withdrawal from GP, which was formally decided in 2011 (see paragraph 88 above), at the same time as the effective shutdown of that company’s operations (see paragraph 87 above), was indeed capable of eliminating such a risk and, in so far as the evidence of that withdrawal was communicated to the institutions almost 40 days before the adoption of the contested regulation, that evidence could, despite the advanced stage of the investigation, be verified. It must, moreover, be pointed out that the question regarding individual treatment, at issue in the present case, was addressed only at a later stage, the institutions’ intention to apply Article 18(1) of the basic regulation to determine the anti-dumping duty applicable to the applicant having been announced only on 21 March 2013.

90      In such circumstances, it must be held that the Council could not invoke a risk of circumvention to justify the refusal to apply an individual anti-dumping duty to the applicant and the seventh plea must be upheld.

91      Consequently, none of the evidence relied on by the Council permitted it to refuse the applicant individual treatment. It is therefore necessary to annul the contested regulation in so far as it concerns the applicant, without it being necessary to examine the other pleas.

 Costs

92      Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Council has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.

93      The Commission and the EBMA shall bear their own costs, in accordance with the provisions of Article 138(1) and (3) of the Rules of Procedure.

On those grounds,

THE GENERAL COURT (Seventh Chamber)

hereby:

1.      Annuls Council Regulation (EU) No 502/2013 of 29 May 2013 amending Implementing Regulation (EU) No 990/2011 imposing a definitive anti-dumping duty on imports of bicycles originating in the People’s Republic of China following an interim review pursuant to Article 11(3) of Regulation (EC) No 1225/2009 so far as it concerns Giant (China) Co. Ltd;

2.      Orders the Council of the European Union to pay the costs of Giant (China) and to bear its own costs;

3.      Orders the European Commission and the European Bicycle Manufacturers Association (EBMA) to bear their own costs.

Delivered in open court in Luxembourg on 26 November 2015.

[Signatures]

* Language of the case: English.

1 Confidential information redacted.

2 Confidential information redacted.

© European Union
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