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

JUDGMENT OF THE GENERAL COURT (Fifth Chamber)

24 September 2019 (*)

(Dumping — Imports of solar glass originating in China — Article 2(7)(b) and (c) of Regulation (EC) No 1225/2009 (now Article 2(7)(b) and (c) of Regulation (EU) 2016/1036) — Market economy treatment — Concept of ‘significant distortion in the production costs and financial situation of firms’ — Tax incentives — Manifest error of assessment)

In Case T‑586/14 RENV,

Xinyi PV Products (Anhui) Holdings Ltd, established in Anhui (China), represented by Y. Melin, lawyer,

applicant,

v

European Commission, represented by L. Flynn and T. Maxian Rusche, acting as Agents,

defendant,

supported by

GMB Glasmanufaktur Brandenburg GmbH, established in Tschernitz (Germany), represented by R. MacLean, Solicitor,

intervener,

APPLICATION under Article 263 TFEU for annulment of Commission Implementing Regulation (EU) No 470/2014 of 13 May 2014 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of solar glass originating in the People’s Republic of China (OJ 2014 L 142, p. 1; corrigendum OJ 2014 L 253, p. 4),

THE GENERAL COURT (Fifth Chamber),

composed of D. Gratsias, President, I. Labucka (Rapporteur) and I. Ulloa Rubio, Judges,

Registrar: F. Oller, Administrator,

having regard to the written part of the procedure and further to the hearing on 16 January 2019,

gives the following

Judgment

 Background to the dispute

1        The applicant, Xinyi PV Products (Anhui) Holdings Ltd, is a company established in China which manufactures there and exports to the European Union solar glass covered by Commission Implementing Regulation (EU) No 470/2014 of 13 May 2014 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of solar glass originating in the People’s Republic of China (OJ 2014 L 142, p. 1; corrigendum OJ 2014 L 253, p. 4) (‘the contested regulation’).

2        The applicant’s sole shareholder is the company Xinyi Solar (Hong Kong) Ltd, established in Hong Kong (China), which is listed on the Hong Kong Stock Exchange.

3        In the context of the procedure leading to the adoption of the contested regulation, on 21 May 2013 the applicant submitted a request — on the basis 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, ‘the basic regulation’) (replaced by Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ 2016 L 176, p. 21)) — for the purposes of claiming market economy treatment (‘MET’), as provided for in Article 2(7)(b) and (c) of the basic regulation (now Article 2(7)(b) and (c) of Regulation 2016/1036).

4        On 6 June 2013, the applicant lodged its replies to the European Commission’s anti-dumping questionnaire.

5        On 21 June 2013, the applicant replied to the Commission’s request for additional information.

6        The information provided by the applicant in the application form for MET and its replies to the Commission’s questionnaire were verified at the applicant’s Chinese headquarters between 21 and 26 June 2013.

7        At the end of June and in July 2013, the applicant produced additional information in agreement with the Commission and in accordance with the latter’s requests.

8        By letter of 22 August 2013, the Commission informed the applicant that it took the view that it could not grant its request for MET on the sole ground that it did not satisfy the third indent of Article 2(7)(c) of the basic regulation (‘the letter of 22 August 2013’). The Commission invited the applicant to submit its observations, although it considered by contrast that the applicant met the other conditions set out in the first, second, fourth and fifth indents of Article 2(7)(c) of that regulation.

9        On 1 September 2013, the applicant submitted its observations challenging the Commission’s findings.

10      By letter of 13 September 2013, the Commission responded to those observations in its final decision on the MET request (‘the letter of 13 September 2013’) which confirmed the rejection of the applicant’s MET request.

11      On 26 November 2013, the Commission adopted Regulation (EU) No 1205/2013 imposing a provisional anti-dumping duty on imports of solar glass from the People’s Republic of China (OJ 2013 L 316, p. 8; ‘the provisional regulation’).

12      Recitals 34 to 47 of the provisional regulation, concerning ‘market economy treatment (“MET”)’, are worded as follows:

‘(34)      Pursuant to Article 2(7)(b) of the basic regulation, in anti-dumping investigations concerning imports from [China], normal value shall be determined in accordance with Article 2(1) to (6) of the basic regulation for those exporting producers which were found to meet the criteria laid down in Article 2(7)(c) of the basic regulation.

(35)      Briefly, and for ease of reference only, these criteria are set out below:

(1)      business decisions are made in response to market conditions and without significant State interference, and costs reflect market values;

(2)      firms have one clear set of basic accounting records, which are independently audited, in line with international accounting standards and applied for all purposes;

(3)      there are no significant distortions carried over from the former non-market economy system;

(4)      legal certainty and stability is provided by bankruptcy and property laws; and

(5)      currency exchanges are carried out at the market rate.

(36)      Ten cooperating companies requested MET pursuant to Article 2(7)(b) of the basic regulation and replied to the MET claim form within the given deadlines. Pursuant to Article 2(7)(d) of the basic regulation, a[n] MET verification was carried out to the companies which were included in the sample [, including the applicant].

(37)      It follows that a[n] MET determination was made in respect of the following four companies or groups of companies:

–        Sampled companies:

–        ...;

–        [the applicant] and Xinyi Solar (Hong Kong) …;

–        …

–        Company subject to individual examination:

–        ...

(38)      The Commission sought all the information deemed necessary and verified all the information submitted in the MET claims at the premises of the companies in question.

(39)      In case of related parties, the Commission shall examine whether the group of the related companies as a whole fulfils the conditions for MET. Therefore, in cases where a subsidiary or any other company related to the applicant in [China] is involved, directly or indirectly, in the production or sales of the product concerned, the MET examination is carried out in respect of each company individually as well as to the group of companies as a whole.

(40)      Accordingly, the MET claims of four exporting producers (groups of companies), comprised of 11 legal entities, were investigated.

(41)      The investigation established that all four exporting producers (groups of companies) claiming MET failed to demonstrate that they fulfilled all of the criteria laid down in Article 2(7)(c) of the basic regulation.

(42)      ...

(43)      [A]ll four exporting producers, either individually or as a group, failed to demonstrate that they were not to subject to significant distortions carried over from the non-market economy system. Accordingly, these companies, or group of companies, did not fulfil MET criterion 3. More specifically, all four exporting producers, or groups of exporting producers, benefited from preferential tax regimes.

(44)      ...

(45)      The Commission disclosed the results of the MET investigation to the companies concerned, the [Chinese] authorities … and the complainant and invited them to comment.

(46)      The comments received were not such as to alter the Commission’s preliminary findings. After having consulted the Member States in accordance with Article 2(7)(c), all applicants were individually and formally notified, on 13 September 2013, of the Commission’s final determination with regard to their respective MET claim.

(47)      Accordingly, [none] of the four cooperating exporting producers or groups of exporting producers in [China] that had requested MET could show that they fulfilled all the criteria set out in Article 2(7)(c) of the basic regulation and their MET claims were therefore rejected.’

13      On 13 May 2014, the Commission adopted the contested regulation.

14      In recitals 32 to 34 of the contested regulation, concerning ‘market economy treatment’, the Commission found as follows:

‘(32)      Following provisional disclosure and subsequently after definitive disclosure, [the applicant] claimed that the Commission erred in rejecting its request for MET. The same claim in relation to the MET determination had already been made at the provisional stage and was rejected by the Commission in recitals 43 and 47 of the provisional regulation.

(33) [The applicant] claimed that the benefits received from preferential tax regimes and grants do not represent a significant proportion of their turnover. In this respect, it is recalled that this argument, along with other arguments, was already addressed in the Commission’s letter to the exporter dated 13 September 2013 in which the Commission notified the party with regard to its MET determination. In particular, it was stressed that due to the nature of this advantage, the absolute benefit received during the [investigation period] is irrelevant for assessing whether the distortion is “significant”. This claim is therefore rejected.

(34) Having regard to the above, the finding that all MET claims should be denied, as established in recitals 34 to 47 of the provisional regulation, is confirmed.’

 Procedure and forms of order sought in Case T‑586/14

15      By application lodged at the Court Registry on 7 August 2014, the applicant sought the annulment of the contested regulation.

16      The Commission lodged a defence at the Court Registry on 21 October 2014, by which it contended that the Court should dismiss the action and order the applicant to pay the costs.

17      The applicant and the Commission lodged a reply and a rejoinder at the Court Registry on 16 December 2014 and 30 January 2015 respectively.

18      Acting on a proposal from the Judge-Rapporteur, the Court decided to open the oral part of the procedure.

19      Pursuant to Article 64(2)(a) of the Rules of Procedure of the General Court of 2 May 1991, the Court submitted questions to the parties for written reply before the hearing.

20      The parties replied to those questions within the prescribed period.

21      The parties presented oral argument and replied to the oral questions put by the Court at the hearing on 9 September 2015.

22      By judgment of 16 March 2016, Xinyi PV Products (Anhui) Holdings v Commission (T‑586/14, ‘the original judgment’, EU:T:2016:154), the Court annulled the contested regulation, and ordered the Commission to bear its own costs and to pay those of the applicant.

23      By application lodged at the Registry of the Court of Justice on 26 May 2016, the Commission brought an appeal against the original judgment.

24      By order of 13 October 2016, Commission v Xinyi PV Products (Anhui) Holdings (C‑301/16 P, not published, EU:C:2016:796), GMB Glasmanufaktur Brandenburg GmbH was granted leave to intervene before the Court of Justice in support of the form of order sought by the Commission.

25      By judgment of 28 February 2018, Commission v Xinyi PV Products (Anhui) Holdings (C‑301/16 P, ‘the judgment on appeal’, EU:C:2018:132), the Court of Justice set aside the original judgment, referred the case back to the General Court and reserved the costs.

 Procedure and forms of order sought after referral back

26      Following the judgment on appeal and in accordance with Article 215 of the Rules of Procedure of the General Court, the present case was assigned to the Fifth Chamber of the General Court.

27      In accordance with Article 217(1) of the Rules of Procedure, the applicant and the Commission on 27 April 2018, and the intervener on 8 May 2018, lodged, within the time limits set, their written observations on the inferences to be drawn from the judgment on appeal for the outcome of the proceedings.

28      Pursuant to Article 89(2)(a) of the Rules of Procedure, the General Court submitted questions to the parties, on 21 November 2018, for written reply before the hearing.

29      The parties answered those questions within the prescribed period.

30      The parties presented oral argument and replied to the Court’s questions at the hearing on 16 January 2019.

31      The applicant claims that the Court should:

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

–        order the Commission and the intervener to pay the costs of the proceedings before the General Court and the Court of Justice.

32      The Commission contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs of the proceedings before the General Court and the Court of Justice.

33      The intervener contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs, including those relating to its intervention before the Court of Justice.

 Law

34      In support of its application for annulment of the contested regulation, the applicant relies on four pleas in law.

35      The first plea in law alleges an infringement of the third indent of Article 2(7)(c) of the basic regulation.

36      It is appropriate to begin by examining the second part of the first plea in law.

37      By the second part of the first plea in law, the applicant submits that the Commission committed a manifest error in the assessment of the facts and an error of law by stating that the distortions as far as the applicant’s production costs and financial situation are concerned were significant, within the meaning of the third indent of Article 2(7)(c) of the basic regulation.

38      The applicant submits that, even assuming that the tax incentives at issue were carried over from the former non-market economy system, such incentives do not make its production costs and financial situation subject to significant distortions. As the applicant explained in the course of the investigation, the tax incentives at issue represented merely 1.34% of the applicant’s total cost of production and 1.14% of its turnover.

39      The Commission failed to address that line of argument and erred in finding, in the letter of 13 September 2013, that a significant distortion stemmed from the lower tax rates in that such distortion ‘could, inter alia, serve the purpose of attracting capital at discounted rates and thus affect the overall financial and economic situation of the company’, whereas a financial impact of less than 1.5% of production costs or of turnover cannot form a serious incentive to attract capital, in particular in the case of Xinyi Solar (Hong Kong).

40      As regards the significance of the distortion, first of all, the Commission states that the applicant did not dispute the fact that it had benefited from preferential tax treatment and it contends that where companies labelled as strategic by the government receive favourable treatment from an income tax system, such treatment introduces significant distortions, as they completely change the amount of pre-tax profits such companies need to achieve in order to be attractive to investors. Since such distortions are permanent, because of the nature of such an advantage the absolute benefit obtained during the investigation period is irrelevant in assessing whether the distortion was significant.

41      Next, the Commission states that it could, in essence, assume, having regard to the extent of the tax advantages at issue, that the attractiveness to foreign capital had been enhanced, so that the applicant’s financial situation had been significantly distorted and that, in any event, the applicant had not proven the contrary.

42      In addition, the applicant gives no basis why the relevant frame of reference should be its turnover or why the examination of the distortion should be confined to the investigation period, while the applicant is silent as regards its general financial situation as opposed to its production costs or turnover.

43      Lastly, the Commission cannot see how it misapplied the notion of a ‘significant distortion’ by finding that a combination of a two-year tax holiday and a three-year half-rate of taxation with an open-ended and permanent tax advantage meant that the applicant had not shown that its production costs or financial situation were not significantly distorted by the measures in question.

44      In its written observations on the inferences to be drawn from the judgment on appeal for the outcome of the case, the applicant maintains the form of order it sought in the application.

45      In its written observations on the inferences to be drawn from the judgment on appeal for the outcome of the case, the Commission contends, as regards the second part of the first plea in law, that the parties have extensively discussed this in their written observations before the Court, as well as at the oral hearing.

46      In its written observations on the inferences to be drawn from the judgment on appeal for the outcome of the case, the intervener raises the point that the two tax advantages at issue could be combined allowing the applicant to reduce its rate of taxation to 14% during the investigation period, whereas the normal headline rate of Chinese corporation tax was 25%, and it disputes the applicant’s characterisation of those benefits as insignificant.

47      In support of this, the intervener relies on the applicant’s corporate restructuring and its motives as well as the increase in the volume of solar glass imports from China and the increase in the applicant’s market share.

48      The intervener also contends that, were it not for the tax advantages at issue, the applicant could not have absorbed, in the light of the margins found, the anti-dumping measures adopted against it, nor could it have penetrated the EU market as rapidly and as appreciably as it did, while at the same time dismissing as irrelevant the proportion of its total production costs and turnover represented by those advantages.

49      It should be noted, first of all, that Article 2(7)(a) of the basic regulation (now Article 2(7)(a) of Regulation 2016/1036) provides that, in the case of imports from non-market economy countries, in derogation from the rules set out in paragraphs 1 to 6 of Article 2, normal value must, as a rule, be determined on the basis of the price or constructed value in a market-economy third country.

50      The aim of Article 2(7)(a) of the basic regulation is to prevent account being taken of prices and costs in non-market-economy countries which are not the normal result of market forces (see judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 66 and the case-law cited).

51      However, pursuant to Article 2(7)(b) of the basic regulation, in anti-dumping investigations concerning imports from China, normal value is to be determined in accordance with Article 2(1) to (6) of the basic regulation (now Article 2(1) to (6) of Regulation 2016/1036), if it is shown, on the basis of properly substantiated claims by one or more producers subject to the investigation, and in accordance with the criteria and procedures set out in Article 2(7)(c) of that regulation, that market economy conditions prevail for that producer or those producers in respect of the manufacture and sale of the like product concerned (judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 67).

52      Consequently, first, it is for the producer wishing to claim MET to submit a properly documented claim to that effect and, secondly, it is for the Commission to assess whether the evidence supplied by that producer is sufficient to show that the criteria laid down in Article 2(7)(c) of the basic regulation are fulfilled. In that context, the EU judicature examines, if necessary, whether that assessment is vitiated by a manifest error (see, to that effect, judgments of 2 February 2012, Brosmann Footwear (HK) and Others v Council, C‑249/10 P, EU:C:2012:53, paragraph 32, and of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 70).

53      The requirement that the exception laid down in Article 2(7)(b) and (c) of the basic regulation be interpreted strictly cannot enable the institutions to interpret and apply that provision in a manner inconsistent with its wording and purpose (judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 93).

54      In that regard, it must be borne in mind that, in accordance with the wording of Article 2(7)(b) of the basic regulation, the criterion against which the merits of a claim submitted by a producer wishing to benefit from MET must be examined is that which consists in ascertaining whether market economy conditions prevail ‘in respect of the manufacture and sale of the like product concerned’.

55      It is apparent from Article 2(7)(b) of the basic regulation that the criteria laid down in Article 2(7)(c) of that regulation, to which the claims submitted by the producers must have regard and in the light of which the Commission is required to evaluate those claims, relate to ‘the manufacture and sale of the like product concerned’. From a contextual point of view, that clarification takes place within the framework of Article 2 of the basic regulation, which lays down the rules for calculating normal value, namely a comparable price for the like product, in the ordinary course of trade, as established for the exporting country.

56      In particular, in accordance with Article 2(1) and (3) of the basic regulation, normal value must normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country. When there are no or insufficient sales of the like product in the ordinary course of trade, or where because of the particular market situation such sales do not permit a proper comparison, the normal value of the like product must be calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits. In that regard, it is apparent from Article 2(4) to (6) of the basic regulation that the faithful application of those concepts depends on whether the accounting information stemming from the records of the producer concerned on which the Commission will rely reflects as a matter of principle market values and will therefore enable normal value to be calculated in line with the objectives of an anti-dumping investigation.

57      The set of criteria drawn up by the EU legislature, exercising its discretion, in Article 2(7)(c) of the basic legislation, reflect the intention to ascertain that the operator requesting MET operates, as regards the manufacture and sale of the like product concerned, in a manner consistent with principles enabling normal value to be calculated.

58      It is in that context that the third criterion laid down in Article 2(7)(c) of the basic regulation, the only criterion considered not to have been met in the present case, requires that ‘the production costs and financial situation of firms not [be] subject to significant distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts’.

59      In that regard, it must be pointed out that the condition mentioned in paragraph 58 above refers to an undertaking’s production costs and financial situation from the point of view of certain parameters having a direct link with the methods for calculating normal value laid down in Article 2(1) to (6) of the basic regulation. Those parameters are, in particular, the depreciation of assets, other write-offs, barter trade and payment via compensation of debts. That wording is admittedly indicative, as shown by the use of the adverb ‘in particular’. However, neither the object nor the effect of those words is to allow the Commission to reject an MET claim on the basis of circumstances which, even if linked to the applicant’s financial situation in the broad sense, do not automatically entail distortion — which must also be ‘significant’ — of one or more factors determining the elements relating to the manufacture and sale of the like product concerned (see, by analogy, as regards the first indent of Article 2(7)(c) of the basic regulation, judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraphs 78 to 82).

60      Consequently, as regards measures which concern an undertaking’s financial situation from a general point of view and are, therefore, merely capable of distorting that situation significantly as regards the manufacture and sale of the like product concerned, it is for the Commission to assess, in the light of the evidence submitted during the administrative procedure, whether those measures actually do give rise to such distortion.

61      First, the third indent of Article 2(7)(c) of the basic regulation refers to production costs and a financial situation which ‘are not’ subject to significant distortions, not which ‘cannot be’ subject to such distortion. Secondly, whether or not the distortion in question is ‘significant’ must be assessed in relation to the purpose of that provision, which is to ensure that the elements relating to an undertaking’s production costs and financial situation are not distorted to the point that any application of Article 2(1) to (6) of the basic regulation would give rise to artificial results calling in question the objectives of an anti-dumping investigation (see, by analogy, judgment of 19 July 2012, Council v Zhejiang Xinan Chemical Industrial Group, C‑337/09 P, EU:C:2012:471, paragraph 82).

62      In the present case, the applicant was refused MET by the Commission solely on the ground that it had not shown that it met the criterion laid down in the third indent of Article 2(7)(c) of the basic regulation.

63      In particular, first, the Commission considered, in the letter of 22 August 2013, that the applicant had benefited from various corporation tax breaks, namely:

‘ –      … [a] tax regime [which] allows for foreign invested companies to benefit from a two-year [corporate] income tax holiday (0%) followed by three years of [that] tax levied at [half the rate, namely] 12.5% instead of the normal tax rate, which is 25%;

–        The High-Tech Enterprises tax regime. Under this scheme the company is subject to a reduced [corporate] income tax rate of 15% instead of the normal 25% [corporate] income tax rate. This preferential tax rate is a subsidy of a quasi-permanent open-ended character which could also serve the purpose of attracting capital at discounted rates, thereby distorting competition.’

64      The Commission inferred from this that ‘the reduced tax rates provide significant financial benefits’, so that the applicant ‘failed to demonstrate that its [manufacturing] costs and financial situation are not subject to distortions carried over from the former non-market economy system’. The Commission recalled that ‘the High-Tech Enterprise tax programme was recently scrutinised in the Solar Panels case and found to be a sufficient ground for denying MET’.

65      Secondly, in the letter of 13 September 2013, by which the Commission notified the applicant of its final decision on the applicant’s MET claim in response to the applicant’s observations on the letter of 22 August 2013, the Commission made, inter alia, the following remarks:

‘The application of a preferential tax rate scheme changes the amount of pre-tax profits the company has to achieve in order to be attractive to investors. The absolute benefit received during the investigation period is not necessarily the decisive factor in determining whether the distortion is significant due to the nature of the advantage. Rather, the assessment of the significance has to be based on the overall impact of the measure on the financial and economic situation of the company over a period of time.

In this regard it is recalled that the lower-rate tax for [the applicant] (14.01%) was possible as [it] could combine the High-Tech Enterprise tax regime with another scheme, the “2 Free 3 Halve” programme. The combined effect was hence a significant lower tax rate than that normally applied (25%), which could, inter alia, serve the purpose of attracting capital at discounted rates and thus affect the overall financial and economic situation of the company.

…

Finally, you argue that the Commission’s finding that the tax regime is of quasi-permanent open-ended character is unsubstantiated. Your arguments that the two tax regimes are limited in time are duly noted. The fact that the two regimes do not have a permanent character does however not change the fact that … they served to distort the financial and economic situation of the firm.’

66      In that regard, the Court points out that the Commission based its conclusion regarding the condition laid down in the third indent of Article 2(7)(c) of the basic regulation on information concerning a different criterion from those laid down in that provision (see paragraph 58 above). It is apparent from the letters of 22 August and 13 September 2013 that it relied, first, on the financial advantage generally provided by the reduced rates of taxation from which the applicant benefits and, secondly, on the fact that such an advantage could attract investors in the applicant’s capital. Consequently, the Commission seems to have rejected the applicant’s argument that the scale of the benefit in question was actually negligible, emphasising what it calls the ‘overall impact’ of the measure at issue, consisting in the possibility of ‘attracting capital at discounted rates’.

67      It must be found that those grounds relate at most to an undertaking’s financial situation from an eminently abstract point of view, unconnected to the elements expressly mentioned in the third indent of Article 2(7)(c) of the basic regulation or to other elements relating to the manufacture and sale of the like product concerned, the significant distortion of which as a consequence of the advantage at issue would call in question the possibility of calculating normal value properly pursuant to Article 2(1) to (6) of the basic regulation.

68      First, a corporation tax regime concerns the tax treatment of profits generated in the course of a given financial year. Neither its object nor effect is to influence the amount or the rate of those profits, or other factors, as components of the normal value which the Commission is required to calculate in accordance with Article 2(1) to (6) of the basic regulation for the purposes of an anti-dumping investigation. Consequently, the Commission’s general reference to the ‘overall impact’ of the measures at issue on the applicant’s financial situation is not, as such and without any further explanation, relevant for the purposes of applying the third indent of Article 2(7)(c) of the basic regulation.

69      Secondly, a similar analysis is necessary as regards the Commission’s assessments of the applicant’s ‘attractiveness’ as a recipient of investment capital. In particular, it must be found that, having regard to the wording of the third indent of Article 2(7)(c) of the basic regulation, the mere possibility that a preferential tax regime may attract investors in an undertaking’s capital is not sufficient to find that its financial situation ‘is’ in fact significantly distorted. In addition, contrary to what the Commission suggests, the decision to invest in a company’s capital is not taken at any ‘rate’, so that ‘the purpose of attracting capital at discounted rates’ relied on by the Commission remains an assessment difficult to understand. Accordingly, in any event, the fact that an investor allocates its funds to purchasing shares in the applicant is, by its nature, not clearly connected to a distortion of the applicant’s financial situation from a perspective encompassed by the purpose of the third indent of Article 2(7)(c) of the basic regulation (see paragraphs 59 to 61 above). Consequently, the Commission cannot rely on mere conjecture in order to assume that there are appreciable effects deserving to be characterised as ‘significant distortion’, and thus reject the evidence adduced by the applicant which tends to deny that any distortion from which it may have benefited is significant.

70      That is all the more so when, as in the applicant’s case, the producer shows, in the light of the low absolute value of the tax incentives vis-à-vis its turnover and its total production costs, its economic and financial autonomy on the market at issue in relation to the measures concerned over a period, namely the investigation period.

71      It must be found that an undertaking’s turnover is a relevant indicator of its economic and financial power from which it generates its profits. Consequently, in stating that the distortions at issue represented 1.14% of its turnover, the applicant did put forward a factor which was as a matter of principle reliable and relevant in relation to the overall impact on its financial situation of the tax measure examined.

72      In those circumstances, it was for the Commission, at the very least, to make clear the link between the choice to invest in the applicant’s capital, motivated as the case may be by an advantageous tax regime, on the one hand, and the distortion of the applicant’s financial situation, on the other, not in a general and theoretical manner, but in terms of the objective pursued by the third indent of Article 2(7)(c) of the basic regulation (see paragraphs 49 to 61 above).

73      Such an assessment is borne out by the fact that, in order to reject the evidence submitted by the applicant, the Commission expressly referred back to its analysis of one of the tax regimes at issue in the context of the ‘Solar Panels’ case and considered that that analysis was sufficient in order to refuse the applicant MET. However, as provided for in Article 2(7)(b) of the basic regulation, MET is to be assessed in the light of the economic conditions under which each producer the subject of an investigation operates (see, to that effect, judgment of 2 February 2012, Brosmann Footwear (HK) and Others v Council, C‑249/10 P, EU:C:2012:53, paragraph 38).

74      It is apparent from the foregoing considerations that the grounds relied on by the Commission in order to reject the applicant’s MET claim are vitiated by a manifest error of assessment, so that the second part of the first plea in law is well founded. The contested regulation must, therefore, be annulled and there is no need to adjudicate on the first part of the first plea in law and on the other pleas raised.

 Costs

75      In accordance with Article 219 of the Rules of Procedure, in decisions of the General Court given after its decision has been set aside and the case referred back to it, the General Court is to decide on the costs relating to the proceedings instituted before it and to the proceedings on the appeal before the Court of Justice. Since in the judgment on appeal the Court of Justice reserved the costs in respect of the applicant, the Commission and the intervener, it is for the General Court to decide, in the present judgment, on all the costs relating to the proceedings before it, including the proceedings at first instance, and on the costs relating to the procedure on the appeal in Case C‑301/16 P.

76      Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

77      In addition, under Article 134(2) of the Rules of Procedure, where there is more than one unsuccessful party the Court is to decide how the costs are to be shared.

78      In the present case, the Commission has been unsuccessful in the proceedings at first instance and the applicant has been unsuccessful in the procedure on appeal. However, since the Commission and the intervener have ultimately been unsuccessful before the General Court in the proceedings after referral back, the Commission must be ordered to bear its own costs and to pay those of the applicant, with the exception of the costs relating to the intervention. The intervener must, in addition to its own costs, bear the applicant’s costs relating to its intervention.

On those grounds,

THE GENERAL COURT (Fifth Chamber)

hereby:

1.      Annuls Commission Implementing Regulation (EU) No 470/2014 of 13 May 2014 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of solar glass originating in the People’s Republic of China;

2.      Orders the European Commission to bear its own costs and to pay the costs of Xinyi PV Products (Anhui) Holdings Ltd, with the exception of those relating to the intervention;

3.      Orders GMB Glasmanufaktur Brandenburg GmbH to bear its own costs and to pay the costs of Xinyi PV Products (Anhui) Holdings relating to its intervention.

Delivered in open court in Luxembourg on 24 September 2019.

*      Language of the case: English.

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