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

JUDGMENT OF THE GENERAL COURT (Tenth Chamber)

22 September 2021 (*)

(Dumping – Imports of certain cold-rolled flat steel products originating in China and Russia – Definitive anti-dumping duty – Article 18 of Regulation (EC) No 1225/2009 (now Article 18 of Regulation (EU) 2016/1036) – Use of facts available – Article 3(2) and (5) of Regulation No 1225/2009 (now Article 3(2) and (5) of Regulation 2016/1036) – Determination of injury – Article 3(7) of Regulation No 1225/2009 (now Article 3(7) of Regulation 2016/1036) – Causal link – Article 2(9) and Article 9(4) of Regulation No 1225/2009 (now Article 2(9) and Article 9(4) of Regulation 2016/1036) – Elimination of injury – Rights of the defence – Equality of arms – Principle of good administration – Obligation to state reasons – Proportionality – Manifest errors of assessment)

In Case T‑752/16,

Novolipetsk Steel PJSC (NLMK), established in Lipetsk (Russia), represented by D. O’Keeffe, Solicitor, N. Tuominen and M. Krestiyanova, lawyers,

applicant,

v

European Commission, represented by J.-F. Brakeland, K. Blanck and E. Schmidt, acting as Agents,

defendant,

supported by

Eurofer, European Steel Association, ASBL, established in Luxembourg (Luxembourg), represented by O. Prost, A. Coelho Dias and S. Seeuws, lawyers,

intervener,

APPLICATION pursuant to Article 263 TFEU seeking the annulment of Commission Implementing Regulation (EU) 2016/1328 of 29 July 2016 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2016 L 210, p. 1),

THE GENERAL COURT (Tenth Chamber),

composed of E. Buttigieg (Rapporteur), acting as President, K. Kowalik-Bańczyk and G. Hesse, Judges,

Registrar: E. Artemiou, Administrator,

having regard to the written part of the procedure and further to the hearing on 1 October 2020,

gives the following

Judgment

 Background to the dispute

1        The applicant, Novolipetsk Steel PJSC (NLMK), is a company incorporated under Russian law which is active in the market for the manufacture and distribution of steel products, in particular, cold-rolled flat products of steel (‘the product concerned’).

2        Following a complaint lodged on 1 April 2015 by Eurofer, European Steel Association, ASBL (‘Eurofer’), the European Commission published on 14 May 2015 a Notice of initiation of an anti-dumping proceeding concerning imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2015 C 161, p. 9) pursuant to 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’), 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).

3        The investigation of dumping and injury covered the period from 1 April 2014 to 31 March 2015 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2011 to 31 March 2015 (‘the period considered’).

4        On 25 May 2015, the applicant submitted its reply to the sampling questionnaire. On 12 June 2015, the Commission informed the applicant of its decision not to carry out sampling and to investigate all cooperating Russian exporters, including the applicant.

5        On 29 June 2015, the applicant submitted comments concerning injury, the causal link between the alleged injury and the disputed imports, the interest of the European Union as well as the legality of the initiation of the anti-dumping proceedings.

6        On 27 July 2015, the applicant filed its reply to the anti-dumping questionnaire. By letter of 10 September 2015, the Commission invited the applicant to remedy what it considered to be deficiencies in its replies and indicated that, unless agreed, no new information would be accepted during the verification visit. On 23 September 2015, the applicant provided the Commission with additional information and clarifications.

7        On 24 September 2015, the Commission carried out an on-the-spot verification visit to the premises of one of the applicant’s related traders established in Switzerland and, between 29 September and 2 October of the same year, to the applicant’s premises in Lipetsk (Russia).

8        By letter of 30 October 2015, the Commission informed the applicant of its intention to apply Article 18 of the basic regulation (now Article 18 of Regulation 2016/1036). The Commission stated that the application of that provision was justified, first, by the fact that the applicant had not provided the necessary information in its reply to the anti-dumping questionnaire within the time limits, secondly, by the fact that it had hindered the proper conduct of the verification visit by not having available at the beginning of the visit certain documents requested in advance by the Commission in the letter of 10 September 2015 referred to in paragraph 6 above and, thirdly, by the fact that it had provided false or misleading information.

9        By letter of 13 November 2015, the applicant objected to the Commission’s intention to apply Article 18 of the basic regulation and requested it to carry out a second verification visit at its premises, while expressing its willingness to continue cooperating.

10      On 19 November 2015, the applicant set out its views in a hearing with the Commission services. On 24 November 2015, the applicant submitted further observations to the Commission.

11      On 10 February 2016, the Commission adopted Implementing Regulation (EU) 2016/181 imposing a provisional anti-dumping duty on imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2016 L 37, p. 1) (‘the provisional regulation’). The provisional regulation imposed a provisional anti-dumping duty of 26.2% on the applicant’s exports of the product concerned to the European Union as from 12 February 2016 for a period of six months.

12      In recital 64 of the provisional regulation, the Commission stated that the applicant’s submission of 13 November 2015 referred to in paragraph 9 above did not contain any new verifiable information that would alter its intention to use, at that stage of the investigation, facts available for the determination of dumping for the company concerned. The Commission also considered that it had not imposed an unreasonable burden on the applicant by insisting on an appropriate reconciliation of its production and sales data, which was necessary in order to be able to verify those data for the product concerned. Furthermore, it considered that, in view of the shortcomings already identified in the information submitted by the applicant itself, a second on-the-spot verification visit would be unnecessary. Thus, in accordance with Article 18 of the basic regulation, the Commission provisionally established the dumping margin for the applicant on the basis of the facts available.

13      In its observations of 8 March 2016, the applicant disagreed with the findings in the provisional regulation regarding the application of Article 18 of the basic regulation and reiterated its request to the Commission to carry out a second verification visit.

14      On 7 and 25 April 2016, the applicant was heard again at a hearing.

15      On 30 May 2016, the Commission issued a disclosure of its definitive findings on dumping and injury, in which it rejected all the arguments put forward by the applicant, decided to maintain the application of Article 18 of the basic regulation and suggested the imposition of a definitive anti-dumping duty of 36.1% on the applicant’s exports of the product concerned to the European Union.

16      By letter of 9 June 2016, the applicant objected to the Commission’s definitive findings.

17      On 20 June 2016, the Commission issued a concise supplementary disclosure of its final findings.

18      On 29 July 2016, the Commission adopted Implementing Regulation (EU) 2016/1328, imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain cold rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2016 L 210, p. 1) (‘the contested regulation’).

 Procedure and forms of order sought

19      By application lodged at the General Court Registry on 28 October 2016, the applicant brought the present action.

20      By document lodged at the Court Registry on 1 March 2017, Eurofer applied for leave to intervene in the present proceedings in support of the form of order sought by the Commission.

21      By documents lodged at the Registry of the General Court on 10 March and 30 March 2017 respectively, the Commission and the applicant requested that certain information contained in their pleadings to be treated as confidential in relation to Eurofer if Eurofer were to be granted leave to intervene. They attached a non-confidential version of those pleadings to those requests.

22      By order of 31 May 2017, the President of the Second Chamber granted Eurofer leave to intervene and ordered the communication to it of the non-confidential versions of the pleadings at issue.

23      By decision of the President of the Second Chamber of 24 April 2018, the proceedings were suspended at the applicant’s request for a period of 18 months.

24      Since the composition of the Chambers of the Court was changed, pursuant to Article 27(5) of the Rules of Procedure of the General Court, the Judge-Rapporteur was assigned to the Tenth Chamber, to which the present case was consequently assigned by decision of 16 October 2019.

25      By decision of the President of the Tenth Chamber of 12 November 2019, the request to extend the initial suspension period was rejected.

26      The applicant claims that the Court should:

–        annul the contested regulation in so far as the applicant is concerned;

–        order the Commission to pay the costs.

27      The applicant further requests that the Court expressly exclude the reopening of the investigation or the opening of a new investigation by the Commission following the annulment of the contested regulation because of the profoundly flawed nature of the investigation at issue in relation to the applicant. The infringements of the right to a fair hearing and its constituent elements and of Article 18 of the basic regulation are fundamental and pervasive, so that they vitiate the entirety of the findings relating to the applicant concerning normal value, the export price and the injury elimination level. In so far as they are essential conditions for the determination of the applicable rate of anti-dumping duty, they cannot be detached from the rest of the contested regulation, which justifies the annulment of the latter in its entirety in so far as it concerns the applicant.

28      The Commission contends that the Court should:

–        dismiss the action as unfounded;

–        order the applicant to pay the costs.

29      In so far as the applicant’s claims go beyond an application for annulment of the contested regulation, the Commission notes that the EU Courts do not have the power to issue injunctions to the institutions of the European Union and that it is for the latter to take the measures necessary to comply with the judgments of the Court. The request that the Court prohibit the Commission from reopening the anti-dumping investigation is therefore manifestly inadmissible. The Commission adds that it agrees with the applicant that, in the event of partial annulment of the contested regulation, the effects of the latter should be maintained in respect of the applicant, for example until the Commission has been able to adopt the measures necessary to comply with the judgment.

30      Eurofer did not lodge a statement in intervention within the prescribed period.

 Law

31      In support of its action, the applicant relies on five pleas in law. The first plea alleges infringement of the right to a fair trial, the rights of the defence, the principle of equality of arms and the principle of good administration. The second plea alleges infringement of Article 18 of the basic regulation, Article 6.8 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) (OJ 1994 L 336, p. 103) (‘the Anti-Dumping Agreement’), contained in Annex 1A to the Agreement establishing the World Trade Organisation (WTO) (OJ 1994 L 336, p. 3), Annex II to the Anti-Dumping Agreement, the principle of proportionality and a manifest error of assessment. The third plea alleges infringement of Article 3(2) and (5) of the basic regulation (now Article 3(2) and (5) of Regulation 2016/1036), Article 3.1 of the Anti-Dumping Agreement, distortion of the evidence and manifest errors of assessment. The fourth plea alleges infringement of Article 3(7) of the basic regulation (now Article 3(7) of Regulation 2016/1036). The fifth and final plea alleges infringement of Article 9(4) and Article 2(9) of the basic regulation (now Article 9(4) and Article 2(9) of Regulation 2016/1036) and manifest errors of assessment.

 The second plea in law, alleging infringement of Article 18 of the basic regulation, Article 6.8 and Annex II of the Anti-Dumping Agreement, the principle of proportionality and a manifest error of assessment

32      The second plea in law, which should be examined first, is divided into four parts.

 The first part of the second plea in law

33      First of all, the applicant observes that the Commission’s assertion that the anti-dumping investigation at issue concerned a ‘semi-finished’ steel product, with the result that the necessary production, sales and cost data could not be obtained and verified by the usual verification techniques, is incorrect and misleading.

34      By the first part of the second plea, the applicant claims, in particular, that the findings set out in recitals 60 to 62 of the provisional regulation and confirmed in recital 31 of the contested regulation are not such as to support the status of ‘full non-cooperation’ imposed on it, or are, at the very least, insufficient for that purpose, since intent to impede the investigation or bad faith have not been established. In doing so, the Commission infringed Article 18(1) to (3) of the basic regulation (now Article 18(1) to (3) of Regulation 2016/1036).

35      The applicant notes in this regard that ‘non-cooperation’ by an interested party within the meaning of Article 18(1) of the basic regulation can only be characterised by refusal of access to information, failure to provide the necessary information within the time limits, significant impediment to the investigation and provision of false or misleading information. The application of the data available under the above provision cannot depend solely or mainly on the quality of the data provided, but should necessarily include a behavioural component.

36      According to the applicant, its active cooperation and the quality of the data provided in the course of the proceeding precluded the Commission from ignoring such data and automatically applying Article 18 of the basic regulation. First, it acted ‘to the best of its abilities’ by providing extensive, detailed and complex data in response to the Commission’s anti-dumping questionnaire and requests for additional information within the time limits set and by agreeing to submit to verification visits. In particular, it provided, during the on-the-spot verification, complete information on ‘sales’ of the product concerned by product type and did not fail to submit any significant data concerning export prices or the cost of production of the product concerned before the expiry of the set time limit. Thus, the reasons given by the Commission in recital 60 of the provisional regulation are not supported by the facts and are not sufficient to meet the requirements of Article 18(1) of the basic regulation, since the Commission at no time found that it had not acted to the best of its abilities. Secondly, the applicant submits that, even if its data contained certain deficiencies, partly due to misunderstandings, those were, in any event, not of such a magnitude as to have created an undue difficulty for the Commission in reaching reasonably accurate conclusions regarding production, production capacity and costs, and sales, and thus regarding normal value and export prices for the applicant. It further argues that the Commission could have verified the accuracy of the data by other means. Thirdly, the Commission imposed an excessive burden on the applicant within the meaning of Article 18(2) of the basic regulation and also infringed paragraph 3 of that article in so far as it asked the applicant, essentially only on the last day of the verification visit, to provide complex information in computerised form. The Commission then considered that the applicant had failed to cooperate, despite the fact that it had been faced with an objective difficulty in downloading a large volume of electronic data from its internal computerised accounting system SAP ERP (‘the SAP accounting system’) within a very short period of time, namely during the visit. The applicant demonstrated that that was a difficulty by means of evidence transmitted to the Commission by an email of 17 November 2015. According to the applicant, the Commission’s approach, which allows it to apply the available data to the exclusion of all the data supplied which is potentially concerned where it considers that the information transmitted by the interested party is partially inaccurate or deficient, confers on it an excessively broad discretion and makes any judicial review difficult.

37      The Commission contests the applicant’s arguments.

38      As a preliminary point, it should be recalled that Article 6(2) of the basic regulation (now Article 6(2) of Regulation 2016/1036) provides that a questionnaire is to be prepared and sent to interested parties by the Commission services for the purpose of obtaining the information necessary for the anti-dumping investigation. Those parties are obliged to provide those services with the information which will enable it to carry out the anti-dumping investigation (see, to that effect, judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 50 and 51).

39      According to Article 6(8) of the basic regulation (now Article 6(8) of Regulation 2016/1036), ‘except in the circumstances provided for in Article 18, the information which is supplied by interested parties and upon which findings are based shall be examined for accuracy as far as possible’. Similarly, Article 6.6 of the Anti-Dumping Agreement provides that, ‘except in circumstances provided for in paragraph 8, the authorities shall during the course of an investigation to satisfy themselves as to the accuracy of the information supplied by interested parties upon which their findings are based’. That obligation to verify is the expression, in the context of the imposition of anti-dumping measures, of a more general principle which requires any authority, notwithstanding its broad discretion, to carry out an accurate examination and to base its assessment on evidence of sufficient quality (see judgment of 3 December 2019, Yieh United Steel v Commission, T‑607/15, under appeal, EU:T:2019:831, paragraph 71 and the case-law cited).

40      One of the tools available to the investigating authority for fulfilling its obligation under Article 6(8) of the basic regulation is the on-the-spot verification visit pursuant to Article 16 of that regulation (now Article 16 of Regulation 2016/1036), if the authority deems it appropriate. Article 6.7 of the Anti-Dumping Agreement provides that, ‘in order to verify information provided or to obtain further details, the authorities may carry out investigations in the territory of other [Member States] as required, provided they obtain the agreement of the firms concerned and notify the representatives of the government of the Member [State] in question, and unless that Member [State] objects to the investigation’.

41      Therefore, Article 16(1) and (3) of the basic regulation (now Article 16(1) and (3) of Regulation 2016/1036) provides, first, that the Commission may carry out visits to examine, inter alia, the records of producers and exporters and to verify the information submitted with regard to dumping and injury and, secondly, that the undertakings concerned are to be advised of the nature of the information to be verified and of any other information to be provided during such visits, which does not preclude the possibility of requesting further clarifications on the spot in the light of the information obtained.

42      As the Court has emphasised, the parties’ replies to the questionnaire provided for in Article 6(2) of the basic regulation, and the subsequent verification which the Commission may carry out on the spot, provided for in Article 16 of that regulation, are essential to the conduct of the anti-dumping procedure (see judgment of 30 April 2015, VTZ and Others v Council, T‑432/12, not published, EU:T:2015:248, paragraph 29 and the case-law cited).

43      According to Article 18(1) of the basic regulation, the EU institutions may rely on the facts available in order to make provisional or final, affirmative or negative, findings, in cases in which any interested party refuses access to, or otherwise does not provide, necessary information within the time limits provided for in that regulation, or significantly impedes the investigation. Where it is found that any interested party has supplied false or misleading information, the information is to be disregarded and use may be made of facts available. Interested parties must be made aware of the consequences of non-cooperation.

44      According to Article 18(3) of the basic regulation, ‘where the information submitted by an interested party is not ideal in all respects it should nevertheless not be disregarded, provided that any deficiencies are not such as to cause undue difficulty in arriving at a reasonably accurate finding and that the information is appropriately submitted in good time and is verifiable, and that the party has acted to the best of its ability’.

45      Furthermore, it follows from Article 18(3) and (6) of the basic regulation (Article 18(6) having become Article 18(6) of Regulation 2016/1036) that the information which interested parties are required to provide to the Commission must be used by the EU institutions for the purpose of establishing the findings of the anti-dumping investigation and that those same parties must not omit any relevant information. The necessity of a given piece of information is assessed on a case-by-case basis (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16, EU:C:2017:968, paragraph 52).

46      As the Court has further noted, it is for the Commission, as the investigating authority, to establish the existence of dumping, injury and a causal link between the dumped imports and injury. In so far as there is no provision in the basic regulation which gives the Commission the power to compel interested parties to participate in the investigation or to provide information, that institution is dependent on the voluntary cooperation of those parties to provide the necessary information. In that context, it follows from recital 27 of the basic regulation that the EU legislator intended to provide that, in respect of parties which do not cooperate satisfactorily, other information may be used to establish findings and that such information may be less favourable to the parties than if they had cooperated. Thus, the purpose of Article 18 of the basic regulation is to allow the Commission to continue the investigation even if interested parties refuse to cooperate or cooperate insufficiently. Therefore, given that they are obliged to cooperate to the best of their ability, interested parties must provide all the information at their disposal which the institutions consider necessary for the purpose of making their findings (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 54 to 57).

47      It follows from the foregoing that the purpose of the verification is to enable the Commission to carry out its task and, in particular, to understand and verify the methods used to compile the data and, more generally, to ensure the ‘accuracy’ of the information provided by the undertaking subject to verification, which must answer the questions put by the Commission to the best of its abilities and in full and must not fail to provide all the relevant data and explanations so that the Commission can carry out the cross-checks necessary to verify the accuracy of the data provided and reach reasonably correct conclusions in good time and in any event before the end of the verification, failing which the information can no longer be taken into account (judgment of 3 December 2019, Yieh United Steel v Commission, T‑607/15, under appeal, EU:T:2019:831, paragraph 78).

48      Finally, it must be observed that, according to the case-law of the Court of Justice, in the field of the common commercial policy, and particularly in the field of trade defence measures, the EU institutions have a wide discretion because of the complexity of the economic, political and legal situations which they must examine. Judicial review of such an assessment must therefore be limited to verifying compliance with the procedural rules, the material accuracy of the facts used to make the contested choice, the absence of a manifest error in the assessment of those facts or the absence of misuse of powers (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraph 68).

49      In that context, the review by the General Court of the evidence on which the EU institutions base their findings does not constitute a new assessment of the facts replacing that of those institutions. That review does not encroach on the broad discretion of those institutions in the field of commercial policy, but is limited to ascertaining whether that evidence is such as to support the conclusions drawn by the institutions. It is therefore for the Court not only to establish whether the evidence put forward is factually accurate, reliable and consistent but also ascertain whether that evidence contained all the relevant information which had to be taken into account in order to assess a complex situation and whether it was capable of substantiating the conclusions reached (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraph 69).

50      As the Commission rightly noted, while the verification of the profitability of the sales of the product concerned in the exporting producer’s domestic market is a key element of the anti-dumping investigation, the verification of the accuracy of the allocation of the costs of production, as reported in the reply to the anti-dumping questionnaire, to the product concerned is even more complex when, as in the present case, the product concerned is, first, a semi-finished product, which can either be sold to independent buyers or processed in-house, and, secondly, is manufactured by an integrated steel producer which itself provides part of the inputs, in particular the raw materials necessary to manufacture the product concerned. In such a case, it is essential for the verification to have detailed information on, inter alia, the volumes of the product concerned produced during the investigation period, including that for captive use.

51      It follows from the statements made in recital 60 of the provisional regulation, confirmed in recital 31 of the contested regulation, that, according to the Commission, the on-the-spot verification revealed, first, that the applicant had not reported to the Commission [confidential] (1), secondly, [confidential], so that it was impossible for the Commission to link information on sales by product type to information on production by product type, and thirdly, that the applicant did not have readily available information by product type on the quantities sold or used captively in further production, which would have allowed the deduction of captive use from the reported total cost of production to be verified on the spot, as the applicant claimed was necessary to obtain the cost of production of the reported quantity of the product concerned sold. It is also clear from recital 60 of the provisional regulation that, according to the Commission, the applicant had submitted the information necessary for the reconciliation of production, sales and captive use requested during the verification only after the Commission’s verification visit, that the Commission analysed that new information by carrying out a stock reconciliation between the quantities of the product concerned produced that the Commission analysed that new information by carrying out a stock reconciliation between the quantities of the product concerned produced, as reported after the verification visit, and the quantity sold or transferred in order to produce other products and that this stock reconciliation showed that the applicant reported a quantity sold which was overall higher than what was physically possible to produce, taking into account stock changes, rejects and waste as reported by the applicant.

52      It should be noted that the basic regulation does not define what is ‘necessary’ information within the meaning of Article 18(1) of the basic regulation. However, it should be pointed out that the WTO Panel considered, in paragraph 7.43 of the report entitled ‘Korea – Anti-Dumping Duties on Import of Certain Paper from Indonesia’ (WT/DS 312/R), adopted on 28 October 2005, that the decision on whether or not a given piece of information is necessary, within the meaning of Article 6.8 of the Anti-Dumping Agreement, should be taken in the light of the specific circumstances of each investigation, and not in the abstract. In addition, the WTO Panel stated, in paragraph 7.343 of its report entitled ‘European Communities – Anti-dumping measure on farmed salmon from Norway’ (WT/DS 337/R), adopted on 15 January 2008, that particular information held by an interested party and requested by the authority conducting the anti-dumping investigation for the purpose of making determinations should be considered necessary within the meaning of that provision (judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council, T‑633/11, not published, EU:T:2014:271, paragraph 46). Similarly, the Court held that it followed from the terms, context and purpose of Article 18(1) of the basic regulation that the concept of ‘necessary information’ referred to the information held by interested parties which the EU institutions requested them to provide in order to make the appropriate findings in the anti-dumping investigation (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 54 to 57).

53      The information relating to production volumes and manufacturing costs of the product concerned is clearly necessary information within the meaning of Article 18(1) of the basic regulation.

54      In the first place, the applicant did not contest that it had not reported the full production volume of the product concerned in its reply to the anti-dumping questionnaire and that the investigation team had not been able to verify on the spot the full cost of production of the product concerned whatever its destination, namely sale or captive use, as is also apparent from the applicant’s written observations before the Court that Verification Exhibit 18 collected during the on-the-spot verification allowed the Commission to verify the exact cost of manufacture for each product code produced ‘and sold’. The applicant’s argument that the anti-dumping questionnaire was not clear on that point cannot be accepted. Point 2 of Section F.2 of the anti-dumping questionnaire clearly requested the quantity ‘produced’ of the product concerned to be indicated in Table F.2 ‘Overview of the cost of production’, without any distinction as to the destination of such production.

55      Therefore, contrary to the applicant’s submission, it must be considered that the Commission had indeed requested all interested parties to report the totality of the production and capacity for the entire product concerned, and not only for the finished product excluding that intended for captive use. In addition, as shown in paragraphs 73 to 82 below, the information collected at the end of the verification visit as Verification Exhibit 34, as well as the information provided thereafter, did not remedy that deficiency, but allowed the Commission to establish the inconsistency of the production data reported by the applicant, as it established that the applicant was declaring a quantity sold which was overall greater than what production made physically possible, taking into account stock variations, rejects and waste as reported by the applicant.

56      In the second place, it follows from recital 60 of the provisional regulation that the Commission found during the on-the-spot verification that the applicant had also not submitted complete information on the product coding system it used for the production and sale of the product concerned, so that it could not link the information on sales by product type with the information on production by product type. According to the Commission, the full cost of production could not be fully traced back to the original raw materials using only the [confidential] used for cold-rolled flat steel products. The Commission discovered during the on-the-spot verification visit that the applicant had separate production codes, namely the [confidential], for the product concerned used for captive purposes, which the applicant had not reported in its reply to the anti-dumping questionnaire, nor in its letter of 23 September 2015 in response to the Commission’s deficiency letter. During the visit, the applicant informed the Commission that [confidential]. As the Commission rightly noted, such information was essential in the context of the investigation of a semi-finished product and the Commission could not reconcile the full cost of production of the product concerned using the [confidential].

57      In the third place, as regards the allegation in recital 60 of the provisional regulation that the applicant did not have readily available information by type and product code at the time of the on-the-spot verification on the quantities sold ‘or used captively in further production’, it is apparent, inter alia, from the applicant’s letter of 8 March 2016 that production reports were not readily available in spreadsheet form at the time of the verification. The applicant failed to substantiate its claims that the Commission, first, imposed on it an ‘unreasonable extra burden or unreasonable additional cost’ within the meaning of Article 18(2) of the basic regulation by requiring it to download the large volume of data requested during the verification visit and that, secondly, it infringed Article 18(3) of the basic regulation by failing to take into account the fact that [confidential], even though it had acted ‘to the best of its ability’. That finding is all the more compelling since, first, as is apparent from the abovementioned Article 18(2), it is for the party concerned to show that the submission of the requested data in the required form could entail an excessive additional burden or cost and, secondly, no explanation as to the reasons for the occurrence of the [confidential] was given during the course of the investigation by the applicant, which merely informed the Commission, by an e-mail of 17 November 2015, that [confidential].

58      In the fourth place, according to the last sentence of recital 60 of the provisional regulation, the information necessary for the reconciliation of production, sales and captive use requested during the verification, which was provided after the verification visit, was analysed by performing a stock reconciliation between the quantities of the product concerned produced, as reported after that visit, and the quantity sold or transferred for processing to other products. That reconciliation revealed that the applicant was declaring a quantity sold that was overall greater than what production made physically possible. As noted in paragraph 55 above, it is apparent from paragraphs 73 to 82 below that the applicant has not demonstrated that that conclusion was manifestly erroneous.

59      On the basis of those findings, the Commission concluded in recital 61 of the provisional regulation that, for the reasons set out in recital 60, the information provided by the applicant, both before and after the on-the-spot verification visit, did not allow the Commission to verify the accuracy and reliability of the information relating to sales volumes and costs of the product concerned. It concluded that the applicant was non-cooperative as it did not provide the information requested by the it in order to assess and verify the sales volume and the cost of production of the product concerned, and therefore could not reliably establish the export price and normal value. Furthermore, as the unreliability affected the entire data set submitted at various stages by the applicant, the Commission concluded that it was not in a position to rely on the specific subsets of data relating to the different elements of the dumping margin thereby submitted. Therefore, the Commission had to determine the applicant’s dumping margin on the basis of facts available and had to disregard the information submitted by the exporting producer, as it could not otherwise make reasonably accurate findings and the information was not verifiable. The provisional findings in recitals 60 and 61 of the provisional regulation were confirmed in recital 31 of the contested regulation.

60      By the first part of the present plea, the applicant claims in substance that the application of facts available under Article 18 of the basic regulation presupposes the intention of the interested party to impede the investigation or its bad faith. The Commission has not demonstrated the existence of such an intention on its part or its bad faith, so that it has infringed that provision.

61      That argument must be rejected.

62      Recourse to Article 18 of the basic regulation, which constitutes the transposition into EU law of the content of paragraph 6.8 and Annex II to the Anti-Dumping Agreement, in the light of which it must be interpreted as far as possible, is not excluded in the absence of intentional conduct (see, to that effect, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraphs 103 and 104).

63      As is apparent from that case-law (judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraph 104), the extent of the efforts made by an interested party to submit certain information does not necessarily bear any relation to the intrinsic quality of the information submitted and is not, in any event, the sole determining factor. Thus, if the requested information is ultimately not obtained, the Commission is entitled to have recourse to the facts available in respect of that information (see, with regard to point 6.8 of the Anti-Dumping Agreement, the WTO Panel Report entitled ‘Egypt – Definitive Anti-Dumping Measures on Steel Rebar from Turkey’, adopted on 1 October 2002, paragraph 7.242).

64      That assessment is supported by Article 18(3) of the basic regulation, which states that where the information provided is not the best information available in all respects, it should not be disregarded provided that it does not make it unreasonably difficult to arrive at reasonably accurate findings, that it is provided in a timely manner, that it is verifiable and that the party has acted to the best of its ability. Acting to the best of one’s ability is therefore one of the conditions that must be met in order for the Commission to be obliged to take deficient information into account. It is apparent from an examination of the first and fourth parts of the present plea that, despite the fact that the applicant was in possession of all the necessary data, the data which it communicated to the Commission in the course of the administrative procedure concerning the production and sales of the product concerned were communicated late and remained incomplete, contradictory and therefore unreliable, so that the applicant cannot be considered to have acted to the best of its ability (see, to that effect, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraph 105).

65      As regards the applicant’s argument that the Commission should have raised the incompleteness of the information relating to the production of the product concerned already in its letter of 10 September 2015, sent before the verification visit and inviting the applicant to remedy certain deficiencies, it cannot call into question the conclusion reached by the Commission, if only because, as the Commission explained, it was only during the verification visit that it discovered that essential information relating to products produced and intended for captive use had not been submitted in the reply to the anti-dumping questionnaire.

66      In those circumstances, the Commission was not obliged and not in a position to take into account, for the purpose of calculating the export price and normal value, the data provided by the applicant, since, as the Commission rightly noted in recital 61 of the provisional regulation, the unreliability affected the entire dataset submitted at various stages by the applicant, so that the Commission was not in a position to rely on the specific subsets of data relating to the different elements of the dumping margin thus submitted. The Commission could conclude from those considerations that it had to determine the applicant’s dumping margin on the basis of facts available and disregard the information submitted by the applicant, since it could not otherwise draw reasonably accurate conclusions and the information was not verifiable.

67      It is necessary to reject the applicant’s argument that, even if the data provided in the questionnaire replies and verified on the spot suffered from certain deficiencies, those deficiencies were not of such a magnitude as to create an undue difficulty for the Commission in arriving at reasonably accurate findings with regard to production, capacity, sales and costs of production, so that, by having recourse to Article 18 of the basic regulation in respect of all the data, the Commission infringed Article 18(3) of that regulation.

68      In addition to the above considerations and the inconsistencies identified in paragraphs 73 to 82 below, which affected the reliability of the information on sales volumes and costs of the product concerned submitted by the applicant and thus justified the use of facts available pursuant to Article 18 of the basic regulation, as the Commission noted in recital 60 of the provisional regulation, it should be recalled that, contrary to the applicant’s allegation, the full cost of production could not be fully traced back to the original raw materials using only [confidential]. As noted in paragraph 56 above, the product concerned used for captive purposes in the production of other products did not have a [confidential], but a [confidential], which prevented the Commission from using the [confidential] to reconcile the full cost of production of the product concerned. It is not disputed that the electronic file, identified as Verification Exhibit 7, submitted during the on-the-spot verification was a database of ‘sales’ only and [confidential]. Similarly, as the applicant also appears to admit in its written reply to a question put by the Court, the [confidential] in Table F.2, entitled ‘Overview of Cost of Production’, of the reply to the anti-dumping questionnaire and [confidential], first, and the applicant’s accounts, secondly, was not possible with the help of [confidential]. In its written reply to a question put by the Court, the Commission adds, inter alia, [confidential]. Finally, it should be noted that Verification Exhibit 34, mentioned in paragraph 55 above in relation to the attempt to reconcile sales and production of the product concerned, was produced late and could not be verified after the on-the-spot visit and that, moreover, as the Commission reiterated at the hearing, that exhibit, collected at the end of the verification visit, is not, contrary to the applicant’s assertion, ‘merely a breakdown by production codes of the information provided’ in Verification Exhibit 23, which was verified, but presented in a different context in order to reconcile the cost deductions for changes in inventories due to work-in-process, as reported in Table F.2 above.

69      In addition, in any event, it follows from the considerations set out in paragraphs 62 to 64 above that the present part of the second plea, in which the applicant essentially criticises the Commission for having infringed Article 18 of the basic regulation by imposing on it the status of ‘full non-cooperation’ without having first established its ‘bad faith’ or its ‘intention’ to oppose the investigation, has no legal basis.

70      The first part of the second plea must therefore be rejected.

 The fourth part of the second plea in law

71      By the fourth part of the second plea in law, which must be examined before the second and third parts, the applicant claims that the Commission made manifest errors of assessment of the evidence provided in the replies to the anti-dumping questionnaire and during the on-the-spot verification concerning the reconciliation of stocks. First, the Commission made a double deduction of the volume of waste and rejects as reported from the volume of input material for the purposes of reconciling the volumes produced and sold. Secondly, it chose a wrong data set for the purposes of reconciling the work-in-process by using Verification Exhibit 28 rather than Verification Exhibit 34. Those two manifest errors led the Commission to erroneously conclude in recital 60 of the provisional regulation and in recital 31 of the contested regulation that the applicant had reported a quantity sold which was in aggregate greater than what production made physically possible.

72      The Commission contests the applicant’s arguments.

73      As noted in the reply to the first part of the present plea in law, it is common ground that the applicant did not provide the requested information on the full production volume of the product concerned in its reply to the anti-dumping questionnaire. In order to remedy that deficiency, the applicant submitted, at the end of the on-the-spot verification, Verification Exhibit 34, containing information on the ‘production’ of the product concerned for the production of other products, not sold and stored or consumed as captive use. In order to assess the total volume of ‘sales’ of the product concerned, the Commission used the applicant’s replies to the anti-dumping questionnaire and the information collected during the visit, including Verification Exhibit 34, and after the visit, to reconcile the total volume of production with the volume of sales, captive use and changes in stocks by reconciling the stocks between the quantities ‘produced’ and the quantity ‘old or transferred for processing to other products’, as set out in recital 60 of the provisional regulation. The Commission concluded from that reconciliation that the information provided was inconsistent since, in its view, the applicant reported a quantity sold overall higher than what production made physically possible, taking into account stock changes, rejects and waste as reported by the applicant. The Commission concluded that it could not confirm the reliability of the sales volume as reported by the applicant. Following the publication of the provisional findings, the applicant submitted in its letter of 8 March 2016, referred to in paragraph 13 above, a new reconciliation between production and consumption in the form of sales and captive use, including changes in stocks. The Commission concluded that the reconciliation was contradictory.

74      First, in Verification Exhibit 34, which, as noted in paragraph 68 above, could not be verified or reconciled with the applicant’s accounting data as it was only submitted at the end of the verification visit, the Commission found that rejects and waste (or ‘material losses’) were deducted from costs, but not from the quantity produced. In the Commission’s view, that question of deducting material losses from costs is not clear, and if they generated income, for example in the form of scrap recycled in the production of another product, the quantity produced cannot, in that case, be the same as the quantity of material consumed in the production process. That Verification Exhibit 34 showed a total quantity of inputs identical to the production of outputs, namely [confidential] for the year 2014, while the applicant showed material losses in the order of [confidential]. By adding those losses to the input, namely, hot rolled coils consumed in the production process of the product concerned, the production exceeded the capacity of [confidential] of the applicant, and by subtracting those losses from the output, the quantity obtained was not sufficient to cover the sales and captive consumption of the product concerned, so that there were inconsistencies in the data at issue.

75      Next, by way of explanation, the applicant submitted, in its letter of 8 March 2016, new information to show that the rejects and waste of [confidential] for the year 2014, including the abovementioned [confidential], were deducted from the quantity of raw input produced (hot rolled coils), ultimately amounting to [confidential], and confirmed that the net production of hot rolled coils used as input for the production of the product concerned was [confidential], the amount of which was equivalent to the production volume of the product concerned. In the Commission’s view, that new assertion does not explain why the reported material losses involved in the production of the input should eliminate, as noted in paragraph 74 above, the material losses resulting from the production of the product concerned, as reported in Verification Exhibit 34.

76      To that the Commission adds that, at the top of the table in Verification Exhibit 25, entitled ‘Breakdown of Production Costs for Hot Rolled Coils’ and presented during the verification visit at the request of the Commission to ascertain the actual consumption of the input consisting of hot rolled coils that were converted to cold rolled coils, the cost of raw material consumption for hot rolled coils indicated the total production ‘volume’ of the input ([confidential]), so that, in its reconciliation, the Commission considered that losses should be deducted from the quantity of that input which was used in the production of the product concerned in order to arrive at the total production volume of the product concerned. In its letter of 8 March 2016, the applicant claims that that quantity is the same as for the product concerned produced from that raw material, while at the same time it maintains the deduction of the value obtained from those losses. According to the Commission, if the consumption of raw materials necessary to produce the net product concerned is shown net of material losses, any further deduction from its cost of the value so obtained would constitute a double deduction.

77      Furthermore, the argument put forward by the applicant that the Commission was aware of the fact that [confidential], because of a [confidential] on Verification Exhibit 25, cannot be accepted, since in particular, first, that document was produced in a different context, namely, for the purposes of verification and reconciliation with the applicant’s accounts, of the cost elements which made up the total reported cost of the hot rolled coils reported in the reply to the questionnaire, whereas the question of the quantities of hot rolled coils used was not, as the Commission reiterated in its written reply to a question put by the Court, verified during the on-the-spot visit, and that, secondly, [confidential] cannot, in any event, be regarded as sufficient proof of the Commission’s actual knowledge of the information in question.

78      The Commission was therefore able to conclude without manifest error that the new information provided after the publication of the provisional findings, in view of the material losses, was in contradiction with the information provided by the applicant during the verification visit and did not allow it to challenge the provisional finding that the applicant’s data could not be considered reliable.

79      With regard, moreover, to the applicant’s complaint that the Commission chose the wrong set of data for the purposes of reconciling the work-in-progress by using the data in Verification Exhibit 28 instead of the data in Verification Exhibit 34, which, as was pointed out in paragraph 68 above, could no longer be verified as it was produced late, the Commission notes in particular that, during the on-the-spot verification, the applicant submitted, at its express request, the stocks of work-in-progress and semi-finished products for the years 2013 and 2014 (Verification Exhibit 28). The Commission was therefore able to use those stocks in its attempt to reconcile the total production of the product concerned with its sales and captive uses, taking into account the changes in stocks. After the verification visit, the applicant submitted, on 13 November 2015, a new version of that Verification Exhibit 28 containing more information than the original submitted during the on-the-spot visit, without, according to the Commission, the applicant providing an explanation for this late submission of essential information. Subsequently, after the publication of the provisional findings, in its letter of 8 March 2016, the applicant changed its position and argued that that Verification Exhibit 28 could not be used for reconciliation purposes, on the grounds that its own product group [confidential] (used in that exhibit) also included products that were not covered by the definition of the product concerned and that some products belonging to its product group [confidential] should be added.

80      The Commission observes that, in addition to this inconsistency in the applicant’s position with regard to the definition of the product in Verification Exhibit 28, the first version of that document referred to work-in-progress as well as to semi-finished products, whereas the new version of that document referred only to work-in-progress. Furthermore, the Commission contends that the figure for work-in-progress in the revised version remained exactly the same, whereas, during the verification visit, the applicant had indicated that some work-in-progress had to be changed to semi-finished products, since the verifying agents found that that work-in-progress was already packed. In the absence of information on semi-finished products in the revised version of Verification Exhibit 28, the Commission considered that it was impossible to assess whether or not the deficiency had been remedied, which cast further doubt on the reliability of the new document submitted by the applicant and whether it was linked to the information collected during the on-the-spot verification or whether it was an attempt to introduce new information at a stage where verification was impossible.

81      The applicant has failed to provide evidence capable of rendering the assessments of the facts concerning the unreliability of the information at issue implausible and, therefore, to show that the Commission had committed a manifest error of assessment (see, to that effect and by analogy, judgment of 11 September 2014, Gold East Paper and Gold Huasheng Paper v Council, T‑444/11, EU:T:2014:773, paragraph 62) by making, on the basis of the above considerations, in the last sentence of recital 60 of the provisional regulation as confirmed in recital 31 of the contested regulation, the finding that the information provided by the applicant was contradictory and could not be considered to be reliable.

82      In particular, the fact maintained by the applicant that the alleged inconsistency identified in paragraph 78 above could, in any event, only affect [confidential]% of the inputs, which is equivalent to the amount of rejects and waste which the Commission found to have been wrongly included in the net volume of inputs, is, in any event, not such as to call into question the conclusion reached by the Commission that, in view of all the foregoing, the information provided was inconsistent and therefore unreliable.

83      Consequently, the fourth part of the second plea in law must be rejected.

 The second part of the second plea in law

84      By the second part of the second plea in law, the applicant claims that the provisions of Article 18(1) and (3) of the basic regulation were intended to ensure the performance of the specific obligations set out in Article 6.8 and Annex II, paragraphs 2, 3, 5 and 7, of the Anti-Dumping Agreement, so that a breach of the former automatically entails a breach of the latter. Furthermore, the Commission did not respect the criterion of ‘cooperation’ established by the Anti-Dumping Agreement and thus infringed Article 6.8 and Annex II of that agreement. In particular, the Commission, while acknowledging that the applicant had cooperated, imposed an excessive burden on it within the meaning of Annex II, paragraph 2, of the Anti-Dumping Agreement by concluding that it had not provided the information requested within the time limits laid down, although it had asked it to provide very detailed computerised replies based on its complex product coding system. Similarly, the Commission did not establish that it had not acted to the best of its ability within the meaning of Annex II, paragraph 5, of the Anti-Dumping Agreement. In the end, the Commission violated the obligations regarding non-cooperation set out in Article 6.8 and Annex II of the Anti-Dumping Agreement and imposed a stricter cooperation criterion than that set out in the Anti-Dumping Agreement to establish non-cooperation.

85      In response to that complaint, it is sufficient to point out, first, that it follows from an examination of the first and fourth parts of the present plea that the applicant has not shown that the Commission infringed Article 18 of the basic regulation by using facts available because of the unreliability of the data provided by the interested party, which had not acted to the best of its ability, and, secondly, that, since Article 6.8 and Annex II of the Anti-Dumping Agreement also focus on the reliability of the data provided without giving decisive weight to the conduct of the interested party (see, to that effect, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraphs 103 and 104), there is no reason to consider that a different conclusion should be reached with regard to the provisions of the Anti-Dumping Agreement.

86      Consequently, the second part of the second plea must also be rejected.

 The third part of the second plea in law

87      By the third part of the second plea in law, first, the applicant claims that the Commission infringed the principle of proportionality by wrongly applying to it the treatment appropriate to a ‘full’ non-cooperation on the part of an interested party, thereby placing it in the position of a company which is totally unwilling to cooperate or which shows bad faith, with manifestly inappropriate and disproportionate consequences. Thus, all the data provided by the applicant was discarded and replaced by data particularly unfavourable to it, resulting in the application of the excessive anti-dumping duty rate of 36.1%. Secondly, the applicant claims that the ‘full’ non-cooperation status applied to it was also inappropriate in view of the objectives pursued by Article 18 of the basic regulation, namely, in the first place, to protect the Union industry from dumping without blocking, as in the present case, all of the applicant’s export sales by imposing a prohibitive rate, and, in the second place, to foster cooperation in anti-dumping proceedings.

88      The Commission contests the applicant’s arguments.

89      As follows from the examination of the first and fourth parts of the present plea in law, the Commission did not infringe Article 18 of the basic regulation by concluding that the data provided by the applicant were unreliable and that it had to replace all of them with the data available, pursuant to that article, in order to arrive at findings based on accurate facts (see, with regard to the Anti-Dumping Agreement, the WTO Panel Report in case WT/DS 206/R, entitled ‘United States Anti-Dumping and Countervailing Measures on Steel Plate from India’, of 28 June 2002, paragraph 7.60). In that regard, it follows from recital 27 of the basic regulation that the Union legislator intended to provide that, in respect of parties which do not cooperate satisfactorily, as is clearly the case in this instance, other information may be used for the purposes of determinations and that such information may be less favourable to those parties than if they had cooperated. Thus, the purpose of Article 18 of the basic regulation is to allow the Commission to continue the investigation even if interested parties refuse to cooperate or cooperate insufficiently (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 54 and 55).

90      The applicant has also not shown that the Commission, by using the data available in the present case, disregarded the principle of proportionality or the objectives pursued by Article 18 of the basic regulation, so that the third part of the present plea in law is also unfounded.

91      Having regard to all the foregoing considerations, it must be concluded that the Commission did not err in law or commit manifest errors of assessment in deciding to make use of facts available pursuant to Article 18 of the basic regulation, so that the second plea in law must be rejected in its entirety.

 The first plea in law, alleging infringement of the right to a fair trial, including the rights of defence, the principle of equality of arms, and the principle of good administration

92      The first plea in law is divided into four parts.

 The first part of the first plea in law

93      By the first part of the first plea in law, the applicant claims that the Commission infringed the right to a fair hearing, as a general principle of EU law applicable to anti-dumping investigations and guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), on the ground that it had communicated to it, initially, by letter of 30 October 2015, only a part of the grounds on which it based its decision to apply Article 18 of the basic regulation to the applicant and that it was only after the adoption of the provisional regulation, which confirmed that decision, that the Commission communicated to the applicant all the grounds for the decision. According to the applicant, since that conclusion had become de facto irrevocable by the adoption of the provisional regulation, it was not in a position to defend its point of view effectively with regard to the new grounds contained in that regulation. In so doing, the Commission also disregarded its obligation under Article 18(4) of the basic regulation (now Article 18(4) of Regulation 2016/1036) to inform specifically and immediately the applicant of the reasons which led it to apply paragraph 1 of that provision.

94      The applicant observes in that regard that the Commission’s letter of 30 October 2015 referred to in paragraph 93 above stated, as a general conclusion, that [confidential]. In support of, and in addition to, that general conclusion, the Commission set out eight specific problems. Recitals 60 to 62 of the provisional regulation added a new ground to justify the application of Article 18 of the basic regulation, in that the Commission stated for the first time in recital 60 of the provisional regulation that the reconciliation of stocks on the basis of the data provided by the applicant after the verification visit had proved that the applicant was reporting a quantity sold overall which was greater than what production made physically possible. Subsequently, the Commission broadened the scope and effect of the application of Article 18 of the basic regulation by stating in recital 61 of the provisional regulation that it was not satisfied with the applicant’s cost of production and sales volume data, which led it to disregard all the data relevant to the establishment of the export price and thus to exclude all the data on which the calculation of the anti-dumping duty is based. According to the applicant, there was nothing to prevent the Commission from disclosing all the reasons in the letter of 30 October 2015 or as soon as possible thereafter and before the adoption of the provisional regulation. That could clearly have led to a very different outcome of the whole investigation procedure for the applicant, where appropriate, following a second verification visit.

95      Finally, contrary to the Commission’s allegations, the applicant claims that it did involve, in the course of the investigation, the Hearing Officer established by Decision 2012/199/EU of the President of the European Commission of 29 February 2012 on the function and terms of reference of the Hearing Officer in certain trade proceedings (OJ 2012 L 107, p. 5) (‘the Hearing Officer’), even though the invocation of the right to a fair trial is not conditional on the prior involvement of the Hearing Officer.

96      The Commission contests the applicant’s arguments.

97      At the outset, the Commission’s argument that the fact that the applicant did not request the intervention of the Hearing Officer should influence the examination of the plea alleging failure to respect the rights of the defence must be rejected. It should be noted in that regard that, as is apparent from recitals 3, 4 and 8 of Decision 2012/199, the intervention of the Hearing Officer is intended to strengthen the procedural guarantees for the exercise of the procedural rights of the parties concerned. However, such intervention remains purely optional, as is also stated in point 7 of the Commission’s notice of initiation of 14 May 2015 (see paragraph 2 above) or in the Commission’s letter of 30 October 2015 referred to in paragraph 93 above, so that the absence of referral to the Hearing Officer, assuming it is established, is not such as to influence the assessment by the EU judicature of an alleged breach of the rights of the defence.

98      With regard to the principles and procedural safeguards which the institutions are required to respect when interested parties in an anti-dumping investigation wish to exercise their rights of defence by gaining access to information concerning facts or considerations which may form the basis of anti-dumping measures, it should be noted that it is settled case-law that the requirements arising from the respect of the rights of defence apply not only in the context of proceedings which may lead to sanctions, but also in the context of investigation proceedings preceding the adoption of anti-dumping regulations which may affect the undertakings concerned directly and individually and have adverse consequences for them. In particular, in the context of the communication of information to the undertakings concerned during the investigation procedure, respect for their rights of defence implies that those undertakings must have been given the opportunity, during the administrative procedure, to make their views known on the reality and relevance of the facts and circumstances alleged and on the evidence relied on by the Commission in support of its allegation of dumping and injury resulting therefrom (see judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraphs 91 and 92 and the case-law cited).

99      Furthermore, in the context of anti-dumping investigations, it is for the institutions to ensure compliance with the principle of good administration enshrined in Article 41(1) and (2) of the Charter, according to which every person is entitled to have his or her affairs handled impartially, fairly and within a reasonable time by the institutions, bodies and offices of the Union. It is that Article of the Charter, and not Article 47 thereof, which governs the administrative procedure before the Commission and the Council of the European Union in relation to the defence against dumped imports from non-member countries of the European Union (see judgment of 12 December 2014, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑643/11, EU:T:2014:1076, paragraph 45, and the case-law cited). The right to good administration includes, inter alia, under Article 41(2)(a) of the Charter, the right of every person to be heard before an individual measure which would adversely affect him or her is taken (judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 95).

100    Those principles are implemented in the basic regulation by a comprehensive system of procedural safeguards aimed, inter alia, at ensuring that interested parties can effectively defend their interests. Thus, Article 20 of the basic regulation (now Article 20 of Regulation 2016/1036), which corresponds, in substance, to the provisions of Article 6.9 of the Anti-Dumping Agreement, provides, inter alia, in its paragraph 1, that interested parties are entitled to be informed of the details underlying the essential facts and considerations on the basis of which provisional measures are imposed (see, to that effect, judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraphs 96, 97 and 99).

101    In the present case, the applicant does not challenge the provisional regulation and the Commission is not criticised for failing to communicate its provisional findings in good time. By the present part of the first plea, the applicant does not question that it was informed of the details underlying the essential facts and considerations on the basis of which the Commission adopted the provisional measures on 10 February 2016. In particular, the applicant admits that all the reasons for the application of Article 18 of the basic regulation were disclosed in the provisional regulation and in the disclosure made pursuant to Article 20(1) of the basic regulation (now Article 20(1) of Regulation 2016/1036) following the adoption of the provisional regulation. It is common ground that the Commission explained in recitals 60 and 61 of the provisional regulation the reasons for its reliance on facts available, and then summarised, in recitals 62 to 64 of that regulation, the exchanges of 30 October and 13 November 2015 between it and the applicant on the reasons for the reliance on facts available in place of the applicant’s data which were considered unreliable.

102    By the present part, the applicant complains that the Commission failed to disclose its initial findings on the application of Article 18 of the basic regulation in full prior to the adoption of the provisional regulation. In particular, the Commission should have informed the applicant prior to the adoption of the provisional regulation that it had carried out a reconciliation of stocks between the quantities of the product manufactured, as reported by the applicant after the verification visit, and the quantity sold or transferred in order to produce other products, and that it had deduced from that that the applicant ‘reported an overall higher quantity sold than what production made physically possible, taking into account stock variations, rejects and waste as reported’. According to the applicant, that would have enabled it to defend itself significantly better, for example by explaining and substantiating the errors in the Commission’s reconciliation, and it could have submitted an alternative reconciliation in which sales corresponded to its production figures.

103    But, as the Commission rightly noted, the various exchanges for the purpose of collecting evidence and assessing its quality, including requests to the parties to correct errors or remedy certain inconsistencies, are preparatory measures for the adoption of provisional measures and provisional disclosure under Article 20(1) of the basic regulation. Contrary to what the applicant suggests, the investigating authority is not, as a matter of principle, precluded from identifying for the first time in the provisional regulation inaccuracies or inconsistencies in the data submitted, especially since, in the present case, certain inconsistencies and deficiencies only came to light at the time of, or following, the verification visit, as recalled in paragraph 111 below.

104    It should be noted in that context that, contrary to the applicant’s claim, the findings set out in the provisional regulation with regard to the application of Article 18 of the basic regulation are not irreversible, since the applicant may submit, as indeed it did, observations with a view to challenging those findings subsequent to the adoption of the provisional regulation.

105    In those circumstances, and having regard also to the considerations set out in paragraph 111 above, the Commission cannot be criticised in the present case for having disclosed, in disregard of the applicant’s rights of defence, all the reasons explaining the use of the data available only in the provisional regulation, when, moreover, it was possible for the applicant to subsequently challenge the provisional conclusions set out in that regulation.

106    The applicant’s claim that the Commission’s refusal to carry out a second verification visit contributed to the infringement of its procedural rights must also be rejected.

107    According to Article 16(1) of the basic regulation, ‘the Commission shall, where it considers it appropriate, carry out visits to examine the records of importers, exporters, traders, agents, producers, trade associations and organisations and to verify information provided on dumping and injury. In the absence of a proper and timely reply, the Commission may choose not to carry out a verification visit’. Similarly, Article 6.7 of the Anti-Dumping Agreement provides that, ‘in order to verify information provided or to obtain further details, the authorities may carry out investigations in the territory of other Members as required, provided they obtain the agreement of the firms concerned and notify the representatives of the government of the Member in question, and unless that Member objects to the investigation’.

108    It follows from those provisions that verification visits are within the discretion of the investigating authority (see also, inter alia, the WTO Panel Report in Case WT/DS 211/R, entitled ‘Egypt – Steel Rebar’, of 8 August 2002, paragraphs 7.349 and 7.350), especially in the case of a second verification visit (see, to that effect, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraph 107). As noted in paragraphs 38 to 40 above, interested parties are obliged to submit accurate and complete replies to the anti-dumping questionnaire and the Commission concluded in recital 64 of the provisional regulation that, in view of the shortcomings identified in the information submitted by the company itself, a second on-the-spot verification visit would have been unnecessary. Furthermore, to oblige the investigating authority to organise an on-the-spot visit whenever an interested party decides that it is willing to provide information to the investigating authority would create an incentive for interested parties not to comply with their obligation to cooperate fully from the outset of the proceeding, and in particular in the context of the replies to the questionnaire provided for in Article 6(2) of the basic regulation, thus hindering the proper conduct of anti-dumping investigations and potentially preventing the Commission from carrying out such investigations.

109    For the remainder, as the Commission again notes, the applicant was indeed informed by the Commission’s letter of 30 October 2015 of the latter’s intention to apply Article 18 of the basic regulation and was able to comment on that letter in its letter of 13 November 2015, at a hearing held on 19 November 2015 and in its letter of 24 November 2015, prior to the adoption of the provisional regulation on 10 February 2016. In so far as the applicant invokes in that context, in support of the late disclosure of the full grounds for the application of Article 18 of the basic regulation, the Commission’s failure to comply with Article 18(4) of the basic regulation, although that provision is not directly addressed by the present plea in law, that complaint must, in any event, also be rejected.

110    According to that provision, if evidence or information is not accepted, the party that submitted it is to be informed immediately of the reasons for its rejection and must be given an opportunity to provide further explanations within the time limit set. If such explanations are not considered satisfactory, the reasons for the rejection of the evidence or information in question must be disclosed and set out in the published findings.

111    In the present case, it appears from recitals 60 and 61 of the provisional regulation that the applicant had submitted the information necessary for the reconciliation of production, sales and captive use, requested during the verification, only after the Commission’s verification visit and that the latter subsequently analysed that new information and concluded that the information submitted by the applicant both before and after the verification visit did not allow it to verify the accuracy and reliability of the information submitted concerning sales volumes and costs of the product. As the Commission observed during the hearing in response to a question from the Court, the criticism levelled at it (see paragraphs 94 and 102 above) that it did not state all the reasons for the application of Article 18 of the basic regulation in its letter of 30 October 2015, sent shortly after the verification visit, which ended on 2 October 2015, may be explained by the fact that it had not identified the problem arising from the reconciliation of stocks on the basis of the data provided by the applicant after the verification visit with regard to its sales declaration until after that letter had been sent. Furthermore, it is apparent from recitals 29 to 31 of the contested regulation that the applicant was given the opportunity to express and explain its objections at two hearings held by the Commission following the disclosure of the provisional findings and, as noted in paragraphs 13 and 16 above, in particular in its letters of 8 March and 9 June 2016.

112    In the light of the foregoing considerations, it must be concluded that the applicant has not demonstrated the existence of an irregularity relating to its rights of defence in that the Commission did not, in the present case, communicate all the reasons justifying recourse to Article 18 of the basic regulation before the provisional findings were made and that, therefore, the first part of the first plea in law must be rejected.

 The fourth part of the first plea in law

113    By the fourth part of the first plea in law, which should be examined before the second and third parts, the applicant claims that the Commission committed a manifest error of assessment and, in the alternative, failed to comply with the duty to state reasons, by refusing, in recital 31 of the contested regulation, to examine the additional information which it had communicated to the Commission after the adoption of the provisional regulation, on the pretext that that information was ‘new’ and unrelated to the information contained in its reply to the anti-dumping questionnaire or collected during the verification visit. The applicant provided related information based on documents collected and numbered as such by the Commission and which was intended to clarify or correct errors in the Commission’s calculations. Thus, the Commission committed a manifest error by not taking them into account or it did not give sufficient reasons for its assessment of the entirely new nature of that information.

114    The Commission contests the applicant’s arguments.

115    It should be noted at the outset that the applicant does not dispute that, as stated in recital 31 of the contested regulation, any observation or explanation made after the verification could only be accepted if the data on which the observation or explanation was based had already been submitted or could be linked to information submitted in the questionnaire reply or, at the latest, during the verification visit. By contrast, the applicant contests that the data in question did not meet the conditions for acceptance. According to the applicant, those data related, first, to the challenge to the Commission’s double deduction of waste and rejects and, secondly, to the challenge to the Commission’s calculations concerning work-in-progress, both of which were relevant for the purpose of establishing that the applicant’s production volume corresponded to the sales reported. With regard to the first element, the applicant submits that it provided all the screenshots of its SAP accounting system in Annex 3 to its submission of 8 March 2016 on the Commission’s provisional findings, complete cost data that represent the detailed extraction of the aggregated information contained in Verification Exhibits 23 and 34 provided as part of the verification visit, so that it clearly demonstrated the relationship between that complete data and the information provided as part of the on-the-spot verification. With regard to the second element, the applicant claims that it provided additional information justifying the use of Verification Exhibit 34 rather than Verification Exhibit 28 for the purpose of the Commission’s reconciliation of sales and production volumes, so that it also demonstrated the link between that data and the information provided during the on-the-spot verification.

116    To that, first, the Commission responds that Annex 3 to the applicant’s submission of 8 March 2016 contained new information on the quantities of rejects and waste that contradicted the data on rejects and waste reported in the questionnaire response and in Verification Exhibit 34 received after the on-the-spot visit. Thus, Table F.2 (Overview of cost of production) of the reply to the anti-dumping questionnaire and Verification Exhibit 34 show that the applicant reported rejects and waste corresponding to a volume of [confidential] for the investigation period, whereas in the abovementioned Annex 3, the volume of rejects and waste for the same period corresponded to [confidential]. Secondly, the Commission notes that the screenshots referred to in paragraph 115 above were shown in a completely different context, namely, when the Commission’s investigators were trying to determine the level of production of the product concerned subsequently used for captive purposes, which the applicant had not reported in Table F.2, and, more importantly, that those screenshots did not contain information on rejects and waste. The Commission submits that it could validly disregard that new, contradictory and incomplete data provided after the provisional disclosure.

117    It is sufficient to note in that respect that it is clear from paragraphs 73 to 82 above that the Commission was able to consider, without committing a manifest error, that the additional data submitted after the provisional disclosure was in contradiction with the evidence collected up to and immediately after the verification visit, both with regard to the double deduction of waste and rejects and to the calculation of work-in-progress, and that it could not invalidate the Commission’s decision to rely on facts available under Article 18 of the basic regulation in order to make accurate findings. Therefore, the mere allegation by the applicant that that additional data submitted after the adoption of the provisional regulation should not be considered as new data, but as information linked to that already collected by the Commission as Verification Exhibits 23, 28 and 34, is, in any event, not such as to invalidate the conclusion reached by the Commission as to the unreliability of the information provided by the applicant.

118    In those circumstances, the Commission cannot be accused of having failed in its duty to state reasons or of having committed a manifest error of assessment by concluding, in recital 31 of the contested regulation, that the applicant had not been able to support the arguments put forward after the disclosure of the provisional findings with information already contained in its questionnaire reply form or that contained in the documents collected on the spot.

119    Consequently, the fourth part of the first plea must be rejected.

 The second part of the first plea in law

120    By the second part of the first plea in law, the applicant claims that the Commission infringed its rights of defence and the principle of good administration in that, as is apparent from recitals 61 and 64 of the provisional regulation and recital 31 of the contested regulation, the latter rejected or ignored any additional evidence, argument or information relating both to the application of Article 18 of the basic regulation and to its dumping and injury margins submitted after the adoption of the provisional regulation. Furthermore, the organisation of hearings by the Commission was only intended to create the appearance of respect for the rights of defence and the right to be heard, whereas in fact the applicant’s arguments were not taken into consideration by the Commission. Finally, the applicant claims that, as it indicated in its reply of 13 November 2015 to the Commission’s letter of 30 October 2015, the latter adopted a selective approach to the collection of documents during the verification visit by refusing in particular to collect a number of documents and explanations offered by the applicant.

121    The Commission contests the applicant’s arguments.

122    In so far as, by that complaint, the applicant seeks a declaration that its procedural rights as referred to in the present plea have not been respected, it should first be recalled that, according to recital 29 of the contested regulation, following the disclosure of the provisional findings, the applicant contested the application of Article 18 of the basic regulation and produced new data in order to rebut the findings set out in recital 60 of the provisional regulation. Following those objections, the Commission held two hearings in order to allow the applicant to express itself and explain its objections.

123    Next, according to the statements in recital 31 of the contested regulation, which, as is clear from paragraphs 117 and 118 above, are not vitiated by a manifest error of assessment, the applicant was not able to support its arguments by the information already contained in its questionnaire response, nor by that contained in the documents collected on the spot. In those circumstances, the Commission decided that the findings made at the provisional stage which led to the application of Article 18 of the basic regulation and which are set out in recitals 60 and 61 of the provisional regulation were confirmed, after having noted in recital 31 of the contested regulation that any observation or explanation made after the verification could be accepted only if the data on which the observation or explanation was based had already been submitted or could be linked to information submitted in the questionnaire response or, at the latest, during the verification visit.

124    In that regard, it should be added that, as the Commission rightly noted, the adversarial phase of the administrative procedure following the adoption of the provisional regulation allows the applicant precisely to have the assessment of the available data collected by the Commission examined and to submit new factual elements in so far as they are supported by verified evidence or linked to data already submitted. However, that phase of the proceeding cannot be misused by the interested parties to present any new data which should have been submitted within the time limits previously set by the Commission, but were not, as noted in paragraph 115 above (see also, to that effect, the WTO Panel Report in Case WT/DS 312/R, entitled ‘Korea – Anti-Dumping Duties on Imports of Certain Paper from Indonesia’, of 28 October 2005, paragraph 7.85).

125    Furthermore, the applicant’s allegations that the organisation of hearings following the adoption of the provisional regulation and the provisional disclosure created only the appearance that the applicant’s right to be heard had been respected, although the Commission had already irreversibly decided that it would apply Article 18 of the basic regulation, in so far as they are not supported by any evidence, must be rejected.

126    Finally, as is clear from the very terms of Article 16(1) of the basic regulation, the purpose of the verification visits, the appropriateness of which is decided by the Commission, is to ‘verify the information provided’ concerning dumping and injury. In those circumstances, the Commission’s refusal to collect certain documents submitted by the applicant during such a visit cannot, in itself, constitute a breach of the rights of the defence, although the conduct of verification visits is the responsibility of the Commission’s investigators. For the remainder, in so far as the applicant challenges the Commission’s alleged arbitrary refusal to collect [confidential], it has not shown that the Commission committed a manifest error of assessment by explaining its refusal, inter alia, by the fact that the extraction from the SAP accounting system did not appear to establish, contrary to the applicant’s argument, that [confidential], in so far as [confidential], that extraction only indicated that [confidential].

127    Consequently, the second part of the first plea in law must be rejected.

 The third part of the first plea in law

128    By the third part of the first plea in law, the applicant claims that the Commission violated the principle of procedural equality or equality of arms in that it refused to accept any new evidence or information from the applicant and a second verification visit to its premises, despite the fact that the Commission agreed to take into consideration new information on the profitability of the Union industry submitted by the Union producers and also granted them a second verification visit in order to verify the new data as to the determination of the target profit margin of the Union industry, as can be seen, inter alia, from recitals 8, 9 and 154 to 156 of the contested regulation. The applicant submits that the principle of procedural equality is a general principle of law which also applies to parties opposing each other in an anti-dumping investigation and that it was incumbent on the Commission to demonstrate that the discrimination and procedural inequality were objectively justified, which it has failed to do.

129    The Commission contests the applicant’s arguments.

130    It appears that, by deciding, in the exercise of its broad discretion, not to organise a second verification visit to the applicant’s premises, the Commission did not infringe the principle of equal treatment as enshrined in particular in Article 20 of the Charter.

131    As can be seen from recitals 8 and 155 of the contested regulation, the Commission became aware, in the light of the comments received after the publication of the provisional findings, linked to the Court’s case-law, and more particularly to the judgment of 28 October 1999, EFMA v Council (T‑210/95, EU:T:1999:273), that it needed a limited amount of additional data that had not been requested from the Union producers in the anti-dumping questionnaire, namely, profitability data, for the years 2005 to 2010, relating to sales in the Union of the product concerned. The Commission considered it appropriate subsequently to verify the accuracy of that new data in the framework of a verification visit at the premises of the Union producers, as mentioned in recital 8 of that regulation. The applicant does not contest that the purpose of that latter visit was not to verify the same data as requested in the original questionnaire, which had been submitted by the Union producers and found to be reliable.

132    By contrast, the purpose of the second visit requested by the applicant was to re-examine the data which had to be communicated and which the Commission had considered unreliable and inconsistent. Since the situations in comparison are objectively different, the Commission cannot be criticised for having infringed the principle of non-discrimination to the detriment of the applicant by refusing, in the context of its broad discretion, a second verification visit to the applicant’s premises while granting a second visit to the premises of the Union producers.

133    In those circumstances, the third part of the first plea in law must also be rejected and, consequently, the first plea in law in its entirety.

 The third plea in law, alleging infringement of Article 3(2) and (5) of the basic regulation, Article 3.1 of the Anti-Dumping Agreement, distortion of the evidence and manifest errors of assessment

134    The third plea in law is divided into two parts.

 The first part of the third plea in law

135    By the first part of the third plea in law, the applicant submits that the Commission failed to carry out an objective examination of the situation of the Union industry, thereby infringing Article 3(2) and (5) of the basic regulation and Article 3.1 of the Anti-Dumping Agreement, and that it committed a manifest error in concluding that material injury had occurred. The Commission did not take into consideration economic indicators that would have revealed a more positive situation of the Union industry or, at least, did not give them the required importance. In support of that claim, the applicant submits that the Commission based its finding of material injury mainly on the decrease in sales volume, the reduction in market share, the negative profitability and the decrease in the level of employment of the Union industry, while some of its conclusions are inaccurate and erroneous. First, most of the decrease in free market sales is due to the decrease in consumption and the rest of the decrease is due to the more general market development. Next, the decrease in the market share of the Union industry cannot be an indication of material injury either, while at the same time the Commission maintains that the market share of imports from other third countries, of around 5.4%, is not such as to break the causal link between the alleged injury and the imports from the countries concerned. Furthermore, the negative development of profitability and the inability of the Union industry to recover from the crisis of 2012 are the result of the low consumption of the product concerned. Finally, the decrease in the level of employment during the period considered, aimed at reducing the Union industry’s production costs, is also not an indication of material injury linked to imports from the countries concerned.

136    The Commission contests the applicant’s arguments.

137    It should be borne in mind, first of all, that, in accordance with Article 3(2) of the basic regulation, the determination of injury must be based on positive evidence and must involve an objective examination of, first, the volume of the dumped imports and the effect of the dumped imports on prices in the Union market for like products and, secondly, the consequent impact of those imports on the Union industry.

138    According to well-established case-law, the determination of injury involves the assessment of complex economic matters. In that respect, the EU institutions enjoy a broad discretion. The EU Courts must therefore limit their review to verifying compliance with the procedural rules, the material accuracy of the facts used to make the contested choice, the absence of a manifest error in the assessment of those facts and the absence of misuse of powers (see, to that effect, judgments of 10 July 2019, Caviro Distillerie and Others v Commission, C‑345/18 P, not published, EU:C:2019:589, paragraph 15 and of 20 May 2015, Yuanping Changyuan Chemicals v Council, T‑310/12, not published, EU:T:2015:295, paragraphs 127 and 128 and the case-law cited).

139    Furthermore, it is for the applicant to adduce evidence enabling the Court to find that the Commission made a manifest error of assessment when determining injury (see, to that effect, judgment of 20 May 2015, Yuanping Changyuan Chemicals v Council, T‑310/12, not published, EU:T:2015:295, paragraph 129).

140    It should further be noted that the list of factors to be taken into account under Article 3(3) and (5) of the basic regulation (Article 3(3) having become Article 3(3) of Regulation 2016/1036) is not exhaustive and that one or more factors do not necessarily constitute a decisive basis for a finding (see judgment of 15 December 2016, Gul Ahmed Textile Mills v Council, T‑199/04 RENV, not published, EU:T:2016:740, paragraph 138 and the case-law cited; see also, to that effect, judgment of 10 July 2019, Caviro Distillerie and Others v Commission, C‑345/18 P, not published, EU:C:2019:589, paragraphs 20 and 21).

141    Therefore, while the examination of the institutions must lead to the conclusion that the injury caused to the Union industry is material, it is not required that all the relevant economic factors and indices show a negative trend (judgment of 25 October 2011, CHEMK and KF v Council, T‑190/08, EU:T:2011:618, paragraph 114) and the mere fact that some injury factors have improved during the period considered does not mean that the Union industry is not suffering material injury (see, to that effect, judgment of 30 March 2000, Miwon v Council, T‑51/96, EU:T:2000:92, paragraph 105).

142    In the WTO context, the Panel clarified in its report entitled ‘Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland’, adopted on 28 September 2000 (WT/DS 122/R, paragraphs 7.245 to 7.256), that a finding of material injury was not necessarily inconsistent with the fact that some, or even several, of the factors provided for in Article 3.4 of the Anti-Dumping Agreement and which were included in Article 3(5) of the basic regulation, showed a positive trend. However, in such a case, the investigating authority must make a convincing analysis which demonstrates that the positive development of certain factors is outweighed by a negative development of other factors. The investigating authority cannot simply ignore a factor indicating a positive trend, but must explain the lack of relevance or importance of such a factor. The same is true in the context of the examination established by the basic regulation (judgment of 15 December 2016, Gul Ahmed Textile Mills v Council, T‑199/04 RENV, not published, EU:T:2016:740, paragraph 139).

143    It is in the light of those considerations that the applicant’s complaints concerning the alleged manifest errors of assessment made by the Commission in assessing the material injury suffered by the Union industry must be analysed.

144    In the present case, it appears from recitals 94 to 155 of the provisional regulation and recitals 73 to 117 of the contested regulation that the Commission made a detailed examination of the relevant factors listed in Article 3(5) of the basic regulation and that, in the context of an overall assessment of the situation of the Union industry, it concluded that the factors indicated a negative development of the Union industry outweighed the positive ones and that the evidence established the existence of material injury.

145    In recital 152 of the provisional regulation, the Commission concluded that the Union industry as a whole was able to slightly increase its production volumes and improve its capacity utilisation rate due to the significant increase in captive consumption. According to the Commission, concrete measures were also necessary to improve efficiency by reducing labour and production capacity and by controlling manufacturing costs.

146    In recital 153 of the provisional regulation, the Commission concluded that despite those concrete actions taken by the Union industry during the period considered to improve its overall performance, its situation on the free market had significantly deteriorated during the period considered while losses started to accumulate from 2012 onwards. According to the Commission, sales volumes on the Union free market had decreased by 14%, unit sales prices had fallen by 19% and the cost of production had decreased by only 16%. Moreover, the Union industry had lost market share to imports from the countries concerned and had to reduce investments due to a negative return on investment.

147    The Commission concluded in recital 155 of the provisional regulation that the Union industry, analysed in its two segments, namely, the free and captive markets, and as a whole, had suffered material injury with regard to the main injury indicators, such as negative profitability and loss of sales volume and market share.

148    In recital 115 of the contested regulation, the Commission noted that it had not limited its analysis to the free market only and that, where relevant, it had also examined the development of the economic situation of the Union industry as a whole and of the captive market in particular, and had subsequently made its findings in that regard.

149    In recital 116 of the contested regulation, the Commission furthermore stressed that the conclusion that the Union industry had suffered material injury was not based solely on the negative development of micro- and macro-economic indicators in the free market. While some of those indicators indeed showed a negative development in the free market, other indicators covering the overall performance of the Union industry – such as employment, labour costs per full-time equivalent, investments and return on investments – also showed a deterioration of the situation of the Union industry. The Commission noted that, given the respective size of the free and captive markets, the positive development of the Union industry’s performance on the captive market (with respect to certain indicators) was not sufficient to compensate for the negative performance on the free market, as evidenced by the negative development of the above mentioned indicators relating to the overall activity.

150    In recital 117 of the contested regulation, the Commission concluded that the findings set out in recitals 152 to 155 of the provisional regulation were confirmed.

151    In the first part of the third plea in law, the applicant claims that the Commission’s finding of injury is vitiated in that it is not the result of a balancing of the development, both positive and negative, of the factors considered relevant. In particular, several factors in the injury assessment point to a favourable development of the situation of the Union industry and therefore do not allow a finding of injury. First, while the production volume of the Union industry increased by 1%, the major part of the 14% decrease in the free market sales volume, namely, 9% of that decrease, is due to the decrease in consumption. The rest of the decrease is explained by various factors, including the fall in world raw material prices and the increasing volume of imports from third countries not subject to the investigation. Secondly, it is difficult to understand how the Commission can consider the moderate decrease of the Union industry’s market share (from 74.8% in 2011 to 70.8% during the period considered) to be an indication of material injury and at the same time claim that the 5.4% market share held by imports from India, Iran and Ukraine is not such as to break the causal link between the alleged injury and imports from the countries concerned. Thirdly, the negative development of profitability and the inability of the Union industry to recover from the crisis of 2012 is the result of the low consumption of the product concerned. Fourthly, the decrease in the level of employment by 10% during the period considered, aimed at reducing the Union industry’s costs of production, is also not an indication of material injury linked to imports from the countries concerned, but should be associated with the situation of the Union industry following the global financial crisis of 2012.

152    As the Commission rightly noted, the applicant’s argument does not seek to challenge the factual or numerical findings set out in the provisional regulation and confirmed in the contested regulation. By its argument, the applicant does not question the reality of the statements relating to the injury indicators at issue, namely, the 14% decrease in the Union industry’s sales, the 4% decrease in the Union industry’s market share, the loss-making situation of the Union industry with a negative profitability of 2.7% and the decrease in employment of 10% during the period considered, which clearly constitute negative injury factors for the purposes of Article 3(2) and 3(5) of the basic regulation.

153    In so far as the argument, summarised in paragraph 151 above, in support of the first part of the third plea in law, which alleges infringement of Article 3(2) and (5) of the basic regulation, can thus be interpreted as not relating to the actual existence of material injury within the meaning of those provisions, but to the causal link within the meaning of Article 3(6) and (7) of the regulation (Article 3(6) having become Article 3(6) of Regulation 2016/1036), the latter provisions not being the subject of the present plea in law, it must be rejected as inoperative (see, as regards the Anti-Dumping Agreement, the report of the WTO Panel in Case WT/DS 211/R, entitled ‘Egypt – Steel Rebar’, of 8 August 2002, paragraphs 7.62 to 7.65, or the WTO Panel Report in Case WT/DS 483/R, entitled ‘China – Anti-Dumping Measures on Imports of Cellulose Pulp from Canada’, of 25 April 2017, paragraph 7.38).

154    In addition, the applicant has neither demonstrated that the Commission’s assessment of material injury, based on an overall evaluation of the relevant economic factors and indices having a bearing on the state of the Union industry, was manifestly flawed, even assuming that one of the injury factors was flawed, nor has it provided any support for its claim that the majority of the other indicators showed positive trends for the Union industry.

155    In those circumstances, the first part of the third plea in law must be rejected.

 The second part of the third plea in law

156    As regards the second part of the third plea in law, the applicant submits that the Commission adopted a biased approach in favour of its injury findings and distorted the evidence before it by not examining the free and captive markets for the product concerned as a whole and that that separate analysis of those markets contravened the obligation under Article 3(1) and (2) of the basic regulation (Article 3(1) having become Article 3(1) of Regulation 2016/1036) and Article 3.1 of the Anti-Dumping Agreement, requiring an objective assessment. In addition, it argues that the Commission did not analyse the free and captive markets in a similar way, which is also contrary to its obligation of objective assessment, as it essentially and mainly examined the free market and largely ignored the captive market in the European Union, even though it accounted for 82% of total production and showed positive trends. The Commission’s claim, in recitals 100 and 101 of the provisional regulation, that the examination of the Union industry as a whole was not necessary because it was vertically integrated and imports were not in competition with products destined for captive use as it would not make economic sense for integrated producers to purchase products for downstream production from competitors if they have the necessary capacity to produce the products in question (recital 79 of the contested regulation), is, first, erroneous, because the product concerned from Russia and China was indeed purchased by the Union producers (recitals 104 and 130 of the contested regulation), and, secondly, irrelevant for the purposes of the obligation to examine all parts of the market equally and the Union market as a whole.

157    The Commission contests the applicant’s arguments.

158    In response to the applicant’s complaint that the Commission did not consider it necessary to examine the Union industry as a whole after having examined separately the captive and the free market of the product concerned, it should be noted that it appears from recital 115 of the contested regulation and recital 155 of the provisional regulation, confirmed by recital 117 of the contested regulation, that the Commission carried out an overall analysis covering the whole Union industry, in that it concluded that the Union industry, analysed in its two segments ‘and as a whole’, had suffered material injury in terms of the main injury indicators.

159    First, it follows from recital 100 of the provisional regulation, confirmed by recital 81 of the contested regulation, that the Commission considered that, since the Union industry was mostly vertically integrated and the product concerned was considered as a raw material for the production of various value-added downstream products, captive and free market consumption should be analysed separately. According to recital 101 of the provisional regulation, which was also confirmed by recital 81 of the contested regulation, the distinction between the captive and free market is relevant for the injury analysis because products destined for captive use are not exposed to direct competition from imports and transfer prices are defined within groups according to various pricing policies and are therefore not reliable. By contrast, production for the free market is in direct competition with imports of the product concerned, and prices are those of the free market.

160    In recital 90 of the contested regulation, the Commission notes that, as explained in recital 123 of the provisional regulation, it analysed separately the data relating to the captive market and the free market as well as the overall performance of the Union industry, where relevant. According to that recital, the majority of the captive market concerns captive transfers within the same legal entity, so that no invoices are issued and therefore no sales prices are established. For the Commission, in the case of captive sales between related entities, it is clear from the different transfer pricing policies applicable among the various producers in the sample that no relevant analysis of price and profitability indicators was possible, but since the volume of captive consumption was nevertheless likely to fluctuate, its evolution was submitted for analysis. According to that recital, as regards the free market, unit cost of production, sales price, sales volume and profitability were analysed, while as regards the overall activity covering the closely related captive and free markets, the following indicators were analysed, inter alia: production volume and capacity, capacity utilisation, employment, productivity, inventories, labour costs, cash flow, investments and return on investments.

161    Therefore, as noted in recital 91 of the contested regulation, the argument that the analysis of the economic situation of the Union industry is based solely on the free market and should have included an analysis of the captive market activities as well as the overall activities must be rejected. All relevant aspects concerning the development of the economic situation in those markets were analysed to the extent possible, whether considered separately or in aggregate, and the applicant has not been able to demonstrate that the Commission committed a manifest error of assessment in its analysis.

162    As follows from paragraph 160 above, where a relevant analysis could not be carried out with regard to certain indicators, such as the sales price or the profitability of the captive market, the Commission gave reasons for that, so that the applicant has not shown that the Commission did not analyse the free and captive markets objectively and, as far as possible, in the same way in order to subsequently integrate its analysis into the overall assessment, in accordance with Article 3(2) of the basic regulation and Article 3.1 of the Anti-Dumping Agreement (see, to that effect, the WTO Appellate Body report entitled ‘United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan’, adopted on 23 August 2001 (WT/DS 184/AB/R), paragraph 204).

163    Finally, it is necessary to respond to the applicant’s argument that the Commission wrongly considered, in recitals 100 and 101 of the provisional regulation, that the examination of the Union industry ‘as a whole’ was not necessary since the Union industry was vertically integrated and thus imports of the product concerned were not in competition with products for captive use which the Union industry has the capacity to produce itself. In support of its argument, the applicant submits more specifically that the product concerned from Russia and China was indeed purchased by the Union producers, so that the Commission’s argument, set out in recital 79 of the contested regulation, that it would ‘not make economic sense’ for the Union industry to purchase cold-rolled steel semi-finished products from competitors is erroneous. In that regard, it is sufficient to note that the applicant has not demonstrated that the Commission’s response in recitals 191 and 192 of the provisional regulation and confirmed in recital 130 of the contested regulation, that the Union industry’s purchase of the product concerned from, inter alia, Russia and China represented less than 1% of the total sales turnover of the Union industry and made by companies which operated independently of the producing companies and which were forced to meet a very limited part of their needs from such imports under occasional pressure from customers to obtain the cheapest possible material, was manifestly erroneous.

164    In conclusion, the applicant has not shown that the Commission infringed Article 3(2) of the basic regulation and Article 3.1 of the Anti-Dumping Agreement or committed manifest errors of assessment in the context of the assessment of the existence of injury, nor that it adopted a biased approach in the context of that analysis.

165    For all those reasons, the third plea in law must be rejected in its entirety.

 The fourth plea in law, alleging infringement of Article 3(7) of the basic regulation

166    By its fourth plea in law, the applicant claims that the Commission infringed Article 3(7) of the basic regulation by attributing the injury to the Union industry to imports from the countries concerned. That injury is the result of other factors, taken individually and in any event considered collectively, namely, the economic crisis of 2012, the bad business decisions taken by the Union industry, the fall in prices of the product concerned due to the fall in raw material prices, the purchases by the Union industry of imports from the countries concerned, the impact of imports from Iran, India and Ukraine and the existence of a previously applicable international agreement on trade in certain steel products between Russia and the EU. The applicant submits that there were exceptional circumstances in this case, namely, the crisis in the world steel industry, followed by a depression in steel prices accompanied by high energy industry prices, and a very large captive market, requiring the Commission to carry out a collective analysis of those other causal factors.

167    As regards, first, the decrease in demand due to the global economic crisis in 2012, the Commission allegedly wrongly stated in recital 163 of the provisional regulation that the Union producers did not benefit from an alleged recovery between 2012 and 2013 due to Russian or Chinese imports and that that lack of recovery was due to the continued decrease in demand for the product concerned. As regards, secondly, the poor business decisions taken by the Union industry, the Commission wrongly rejected that argument in recital 169 of the provisional regulation and recitals 121 and 122 of the contested regulation, since the timing of costly investments by the Union industry in 2011 and 2012 and the increase in capacity in 2011 were particularly detrimental to the Union industry. As regards, thirdly, the fall in prices of the product concerned due to the fall in raw material prices, the Commission also wrongly dismissed that as a factor of injury in recital 171 of the provisional regulation and in recital 127 of the contested regulation. Fourthly, with regard to the fact that the Union industry itself purchased the product concerned from China and Russia, the Commission also assessed that incompletely and incorrectly for the purposes of the analysis of the causes of injury in recital 192 of the provisional regulation and recital 131 of the contested regulation, even though those imports were not negligible. As regards, fifthly, the imports from India, Iran and Ukraine, their combined market share of 5.4% was sufficiently high to be the main reason for the reduction of the Union industry’s market share by 4%, contrary to what appears from recital 180 of the provisional regulation and recital 141 of the contested regulation, and the Commission wrongly considered that imports from Russia were causing injury while imports of similar volumes, and sometimes at lower prices, from other third countries did not contribute to it. Sixthly, with regard to the previously applicable international agreement on trade in certain steel products between the Union and Russia, which provided for import quotas on a year-by-year basis that were not injurious to the Union industry, the Commission did not take due account of that circumstance when assessing the situation.

168    The Commission contests the applicant’s arguments.

169    First of all, it should be noted that, in accordance with Article 3(6) of the basic regulation, it must be demonstrated from all the relevant evidence submitted in relation to Article 3(2) of that regulation, that the dumped imports are causing injury within the meaning of that regulation. That implies a demonstration that the volume or price levels referred to in Article 3(3) of that regulation have an impact on the Union industry within the meaning of Article 3(5) of that regulation and that that impact is such that it can be considered material (see judgment of 10 July 2019, Caviro Distillerie and Others v Commission, C‑345/18 P, not published, EU:C:2019:589, paragraph 22 and the case-law cited).

170    Furthermore, it should be noted that Article 3(7) of the basic regulation provides that known factors other than dumped imports, which are injuring the Union industry at the same time, are to be examined to ensure that injury caused by those other factors is not attributed to dumped imports within the meaning of Article 3(6) of that regulation.

171    Moreover, as noted above, it is settled case-law that the determination of the existence of injury to the Union industry involves the assessment of complex economic situations and that judicial review of such an assessment must therefore be limited to verifying compliance with the procedural rules, the material accuracy of the facts relied upon, the absence of a manifest error of assessment of those facts or the absence of misuse of powers. That is in particular the case as regards the determination of the factors causing injury to the Union industry in the context of an anti-dumping investigation (see judgment of 10 July 2019, Caviro Distillerie and Others v Commission, C‑345/18 P, not published, EU:C:2019:589, paragraph 15 and the case-law cited).

172    In determining injury, the EU institutions are obliged to examine whether the injury which they intend to uphold actually stems from the dumped imports and to rule out any injury arising from other factors, in particular that which is caused by the conduct of the Union producers themselves. To that end, it is for the institutions to verify that the effects of those other factors were not capable of breaking the causal link between the imports concerned and the injury suffered by the Union industry. It is also for them to determine whether injury caused by those other factors is not relevant to the injury determination. However, if the EU institutions find that, despite such factors, the injury caused by those imports is material, the causal link between those imports and the injury suffered by the Union industry may accordingly be established (see, to that effect, judgments of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraphs 23 to 25, and of 16 April 2015, TMK Europe, C‑143/14, EU:C:2015:236, paragraphs 35 to 37).

173    Finally, it is for the parties invoking the illegality of a regulation such as the contested regulation to adduce evidence to show the impact of the factors that may have an effect on the injury caused to the Union industry. Those parties must, in particular, show that those factors could have had such an impact that the existence of injury caused to the Union industry and of the causal link between that injury and the dumped imports was no longer reliable (see, to that effect, judgment of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 28).

174    By the present plea in law, alleging infringement of Article 3(7) of the basic regulation, the applicant does not refer to the Commission’s provisional conclusion, under Article 3(6) of the basic regulation, as set out in recital 159 of the provisional regulation, repeated in recital 202 of that regulation and confirmed in recital 143 of the contested regulation, that in view of the clearly established coincidence in time between, on the one hand, the ever increasing level of dumped imports at continuously decreasing prices and, on the other hand, the Union industry’s loss of sales volume and price depression leading to a loss-making situation, the dumped imports were responsible for the injurious situation of the Union industry.

175    Likewise, the applicant does not contest that, as noted in recital 82 of the contested regulation, the effects of the dumped imports from Russia and China had been assessed cumulatively within the meaning of Article 3(4) of the basic regulation (now Article 3(4) of Regulation 2016/1036), for the reasons mentioned in recitals 107 to 111 of the provisional regulation.

176    By contrast, the applicant contests the second step of the examination of the causal link between the injury and the imports from the countries concerned, carried out pursuant to Article 3(7) of the basic regulation, which is the sole subject of the present plea in law.

177    According to the Commission, the findings in the contested regulation regarding the existence of a causal link between the dumped imports from China and Russia and the material injury suffered by the Union industry, including taking into account whether other factors were capable of breaking any link between those imports and that injury, had become definitive since no Chinese exporting producer had brought an action for annulment of the contested regulation and the applicant had not challenged the Commission’s decision to carry out a cumulative assessment of the effects of those imports pursuant to Article 3(4) of the basic regulation. That argument by the Commission must therefore be rejected. Nothing prevents the applicant from demonstrating that the effect of those other factors was such as to break the causal link between the imports from China and Russia, which were assessed cumulatively, and the material injury suffered by the Union industry.

178    It is therefore necessary to examine whether, as the applicant maintains, other factors, taken individually or collectively, were at the root of the material injury suffered by the Union industry and thus broke the causal link between the injury and the imports at issue.

179    As regards, in the first place, the decrease in demand due to the economic crisis, the Commission noted in recital 120 of the contested regulation that, in a context of slow recovery of demand from 2012, namely, by 4.4% between 2012 and the investigation period, the market share of imports from the countries concerned increased from 13.5% in 2012 to 18.7% in 2013 and even to 20.1% in the investigation period. At the same time, as shown in recitals 127 and 129 of the provisional regulation and recital 105 of the contested regulation, the Union market share decreased from 74.8% to 70.8% during the period considered and, in order to avoid an even greater decrease, the Union industry was forced to lower prices (recital 140 of the provisional regulation). Without committing a manifest error of assessment, the Commission could conclude that the fact that the dumped imports from the countries concerned were not, unlike the Union industry, negatively affected by the slight recovery of consumption from 2012 onwards showed that that factor was not such as to break the causal link between the dumped imports and the material injury caused to the Union industry.

180    Consequently, contrary to the applicant’s submission, the Commission took into account the effect of the decrease in demand on the situation of the Union industry and the applicant failed to demonstrate that that decrease had an impact of such magnitude that the existence of material injury to the Union industry as well as the causal link between that injury and the dumped imports was no longer reliable.

181    It follows from the above that the applicant’s complaint that the Commission committed manifest errors of assessment during the evaluation of the possible impact of the decrease in demand due to the economic crisis on the injury caused to the Union industry must be rejected.

182    As regards, in the second place, the alleged bad business decisions taken by the Union industry in relation to investment and capacity increase, namely, the making of allegedly ‘costly’ investments in 2011 and 2012 as well as the capacity increase in 2011, the Commission noted, in recital 122 of the contested regulation, that since the purpose of the investigation was to analyse the development of the economic situation of the Union industry during the period from 2011 to the investigation period, the increase in capacity that took place during the years 2010 and 2011 could not be considered as part of the scope of the analysis. Furthermore, the claim that the Union industry had made costly investments in 2011 and 2012 is not supported by any facts and the investments made by the sampled Union producers during the period considered represented less than 2.5% of their net assets and consisted mainly of replacement and rationalisation investments. The Commission concluded in that recital that, given the level and nature of the investments, they could not be considered significant enough to have an impact on the economic performance of the Union industry.

183    It should be noted that the applicant did not provide any evidence to support its claim that the Union industry made costly investments which caused the material injury suffered by the applicant. Furthermore, that industry did indeed decrease its level of investments by 14% over the whole period considered, as shown in Table 16 of the provisional regulation.

184    Consequently, the applicant failed to demonstrate that the investment and capacity decisions of the Union industry were so important that the existence of material injury to the Union industry and the causal link between that injury and the dumped imports were no longer reliable.

185    It follows from the above that the applicant’s claim that the Commission committed manifest errors of assessment when evaluating the possible impact of the Union industry’s investment and capacity decisions on the injury caused to that industry must be rejected.

186    As regards, in the third place, the impact of the decrease in raw material prices on the Union industry’s prices of the product concerned, the Commission indicated, first, in recital 126 of the contested regulation, that the prices of imports from the countries concerned decreased on average by 20%, whereas the decrease in raw material prices could only lead to a price decrease of around 11%, and, secondly, in recital 127 of the contested regulation, that the decrease in sales prices in the European Union of approximately 19%, as noted in particular in recitals 140 and 153 of the provisional regulation, was more pronounced than the decrease in raw material prices.

187    The Commission was therefore able to consider without committing a manifest error of assessment that the decrease in sales prices in the Union was at least partly due to the price pressure exerted by the dumped imports from the countries concerned.

188    Consequently, the applicant failed to demonstrate that the fall in raw material prices had had such an impact that the existence of material injury to the Union industry and the causal link between that injury and the dumped imports were no longer reliable.

189    It follows from the above that the applicant’s complaint that the Commission committed manifest errors of assessment in evaluating the possible impact of raw material prices on the injury caused to the Union industry must be rejected.

190    As regards, in the fourth place, the imports of the product concerned by the Union industry itself, the Commission indicated, in recital 130 of the contested regulation, that those imports represented less than 1% of the total sales turnover of the Union industry. Given the low volumes involved and the fact that those volumes did not increase during the period considered, although the market share of the dumped imports from the countries concerned amounted to 20.1%, the Commission was able to conclude, without committing a manifest error of assessment, that those purchases could not break the causal link between the imports concerned and the material injury caused to the Union industry.

191    In the absence of concrete evidence to support its claim, the applicant has failed to demonstrate that the imports of the product concerned by the Union industry could have been of such a magnitude that the existence of material injury to the Union industry and the causal link between that injury and the dumped imports were no longer reliable.

192    It follows from the foregoing that the applicant’s claim that the Commission committed manifest errors of assessment when evaluating the impact, if any, of the imports made by the Union industry on the injury caused to that industry must be rejected.

193    As regards, in the fifth place, the imports of the product concerned from other third countries, it can be seen from Table 27 and recital 177 of the provisional regulation as well as recital 139 of the contested regulation, that, during the period considered, the volume of imports from those other third countries decreased by 24% and their market share decreased from 10.9% to 9.1%, while the volume of imports from the countries concerned increased by 28% and the market share of imports from Russia increased from 5.9% to 9.8%. Furthermore, the combined market share of the countries concerned had increased from 14.3% in 2011 to 20.1% in the investigation period. The Commission concluded that imports from Russia and imports from other third countries followed opposite trends.

194    It is without committing a manifest error of assessment that the Commission was able to conclude that imports from other third countries, whose market share had remained relatively stable, were not capable of breaking the causal link between imports from the countries concerned, which were growing rapidly and had a market share of 20.1%, and the injury suffered by the Union industry. That is all the more so since, as the Commission noted in recitals 140 and 141 of the contested regulation, even if it was not disputed that the average prices of imports from Iran and Ukraine were indeed lower than those of the countries concerned, there was no significant change in the pricing behaviour of Iran and Ukraine during the period considered, unlike the prices of the imports concerned, which decreased by 20% during the same period, and that the fact that the market share of imports from those two third countries increased slightly (from 2.9% to 3.4%, and from 4% to 5.4% by including India) was not such as to break the causal link between the imports from the countries concerned and the material injury caused to the Union industry.

195    In view of that change in trends, the applicant has failed to demonstrate that imports from third countries had been so significant that the existence of material injury to the Union industry as well as the causal link between that injury and the dumped imports were no longer reliable.

196    It follows from the foregoing that the applicant’s claim that the Commission committed manifest errors of assessment when evaluating the possible impact of third country imports on the injury caused to the Union industry must be rejected.

197    As regards, in the sixth and last place, the existence of a previously applicable agreement on trade in certain steel products between Russia and the Union, it should be noted from the outset that measures which facilitate and promote imports are only indirect causes and cannot be considered as ‘other factors’ within the meaning of Article 3(7) of the basic regulation (see, to that effect, judgment of 14 November 2013, Council v Gul Ahmed Textile Mills, C‑638/11 P, EU:C:2013:732, paragraph 31).

198    In so far as the applicant’s argument can be understood as meaning that, in so far as Russian imports remained within the allegedly ‘non-injurious’ quotas set out in the previously applicable agreement on trade in certain steel products between Russia and the European Union, those imports are exempt from any determination of causation and that that would result in an acknowledgement that imports under the quota provided for would not be injurious, that argument must be rejected.

199    In that regard, it is sufficient to note, first, that recital 133 of the contested regulation states that the abovementioned agreement expired on 22 August 2012, namely, before the investigation period, following Russia’s accession to the WTO, secondly, that the agreement did not provide for any exemption from the rules of the basic regulation and referred only to quantitative restrictions without referring to an obligation to respect non-injurious price levels and, thirdly, that it appears from recital 135 of the contested regulation that the material scope of the agreement was different from the definition of the product concerned.

200    Consequently, the applicant has not shown that the Commission committed manifest errors of assessment in evaluating the importance of the various factors examined above and in concluding that they were not sufficient to break the causal link between the imports from the countries concerned and the injury caused to the Union industry and that those factors had not been of such importance that the existence of material injury to the Union industry and the causal link between that injury and the dumped imports were no longer reliable.

201    The applicant’s argument that, in any event, the various factors examined above, taken together, should have been considered sufficient to break the causal link between the imports from the countries concerned and the injury caused to the Union industry cannot be accepted either.

202    In that regard, it should be noted that Article 3(7) of the basic regulation as well as Article 3.5 of the Anti-Dumping Agreement require that the effects of other causation factors be separated and distinguished from those of the dumped imports in order to ensure that the injury caused by the dumped imports and that caused by the other factors are not lumped together and cannot be distinguished. Those provisions do not, however, prescribe the method by which the investigating authorities must avoid attributing the damage caused by the other causal factors to the dumped imports (judgment of 15 December 2016, Gul Ahmed Textile Mills v Council, T‑199/04 RENV, not published, EU:T:2016:740, paragraph 178).

203    Therefore, those provisions do not contain a general obligation for investigating authorities to examine the effects of other causation factors collectively after having examined them individually. Although, as the WTO Appellate Body has noted, it cannot be entirely excluded that in certain cases, and due to their specific factual circumstances, the investigating authority, by not examining the collective impact of the other causation factors, wrongly attributes the effects of the other causation factors to the dumped imports, Article 3.5 of the Anti-Dumping Agreement must be interpreted as not obliging the investigating authorities to examine the collective impact of the other causation factors when fulfilling their obligation not to attribute the damage caused by the other causation factors to the dumped imports (see, to that effect, judgment of 15 December 2016, Gul Ahmed Textile Mills v Council, T‑199/04 RENV, not published, EU:T:2016:740, paragraph 179).

204    In the present case, it appears from recitals 203 and 204 of the provisional regulation that the Commission took into account the potential combined effect of those factors.

205    Therefore, in recital 203 of the provisional regulation, the Commission stated that it had distinguished between the effects of all known factors on the situation of the Union industry and the injurious effects of the dumped imports and that the other factors identified were provisionally not considered to break the causal link established above, even taking into account their potential combined effect. According to the Commission, the crisis and the decline in consumption as well as the rationalisation of the Union industry may have contributed to the injury to a certain extent, but in the absence of continuous price reductions of the dumped imports, the situation of the Union industry would certainly not have deteriorated to such an extent. In particular, sales prices would not have fallen to such low levels and profitability would have been better. The Commission, therefore, concluded in recital 204 of the provisional regulation that the material injury suffered by the Union industry was caused by the dumped imports originating in the countries concerned and that no other factors considered ‘individually or collectively’ broke that causal link. Those findings were confirmed in recital 143 of the contested regulation.

206    Therefore, contrary to what the applicant alleges, the Commission took into account the potential combined effect of those factors and the applicant has failed to establish that those conclusions were vitiated by manifest errors of assessment.

207    In the light of all the foregoing considerations, the fourth plea in law must be rejected in its entirety.

 The fifth plea in law, alleging infringement of Articles 9(4) and 2(9) of the basic regulation and manifest errors of assessment

208    By its fifth plea in law, divided into two parts, the applicant claims that the Commission committed errors of law and manifest errors of assessment in determining the injury elimination level.

 The first part of the fifth plea in law

209    With regard to the first part of the fifth plea in law, the applicant claims that the Commission infringed Article 9(4) of the basic regulation and committed a manifest error of assessment, in so far as it set, in recitals 152 to 161 of the contested regulation, an unreasonable and excessive profit margin for the Union industry, namely, a margin of 9.9%, for the purpose of calculating the target price and the undercutting margin, by wrongly considering that the years following the onset of the financial crisis in 2009 were not representative of the Union industry for the purpose of calculating the target profit margin.

210    The applicant claims that, by choosing 2008 as the reference year, the Commission infringed the temporal limits of the assessment of the situation of the Union industry which it had set itself objectively and impartially, by retroactively extending those limits, the beginning of the ‘period under consideration’ having been set by the Commission at 2011. Such an unlimited discretionary power is also contrary to the principle of good administration. Ultimately, the Commission chose a reference year that was too old, in which profits were at a level that the Union industry could no longer reasonably expect to reach.

211    The applicant contests that it follows from the judgment of 28 October 1999, EFMA v Council (T‑210/95, EU:T:1999:273) that the period under consideration could not be used to determine the target profit margin because of, on the one hand, imports from China and Russia throughout the period under consideration and, on the other hand, the ‘economic crisis’ which, in the Commission’s view, is difficult to reconcile with the concept of normal conditions of competition within the meaning of that judgment. First, at least from 1 January 2011 to 1 April 2014, the period not covered by the dumping findings, the Commission had no evidence of dumped imports. Secondly, that judgment should be interpreted in the light of the temporal limits that the Commission set for itself and cannot result in determining a profit margin that the Union industry could not have expected in the absence of dumping.

212    The Commission contests the applicant’s arguments.

213    According to the third sentence of Article 9(4) of the basic regulation (now the second subparagraph of Article 9(4) of Regulation 2016/1036), the amount of the anti-dumping duty must not exceed the dumping margin established and should be less than the dumping margin if such lesser duty is adequate to remove the injury to the Union industry. As noted in recital 166 of the contested regulation, the purpose of the injury margin calculation is thus to determine whether the application of a lower duty rate than the one established on the dumping margin is sufficient to remove that injury.

214    As the Commission noted, in the absence of further clarification, the generally used calculation method, and which is not contested in the present case, is based on the undercutting margin of the ‘target prices’, which takes into account the downward pressure exerted by the dumped imports on the sales prices of the Union industry. That method therefore does not only compare the prices of the dumped imports with the actual sales prices of the Union industry, but replaces the latter with a hypothetical sales price as it would exist in the absence of the dumped imports. That price is calculated by adding a target profit to the Union industry’s cost of production or sales prices, adjusted to the break-even point.

215    In that regard, it has been held that the profit margin to be used for the calculation of the target price that will eliminate the injury should be limited to the profit margin that the Union industry could reasonably expect to obtain under ‘normal conditions of competition, in the absence of the dumped imports’ (judgment of 28 October 1999, EFMA v Council, T‑210/95, EU:T:1999:273, paragraph 60).

216    In the present case, it follows from recitals 238 and 239 of the provisional regulation that the Commission had provisionally calculated a non-injurious price of the product concerned for the Union industry by adding a profit margin of 5%, which is considered to be the level that the Union industry could be expected to obtain in the absence of injurious dumping, to the cost of production of the sampled Union producers during the investigation period.

217    Contrary to what the applicant alleges, the Commission was not bound by the temporal limits of the period considered, from 1 January 2011 to 31 March 2015, for the selection of the most recent representative year for the purpose of establishing the Union industry’s target profit.

218    Since, in accordance with the case-law cited in paragraph 215 above, the profit margin to be used for the calculation of the injury elimination target price must be limited to the profit margin that the Union industry could reasonably expect to obtain under ‘normal conditions of competition, in the absence of the dumped imports’, the Commission, in the framework of its broad discretion, can validly conclude that the most recent representative year is, as the case may be, outside the period considered, without violating the principle of good administration or the basic regulation, which does not provide that the determination of the target profit margin must necessarily be based on the same period as the one used as a reference for the determination of injury and causation pursuant to Article 6(1) of the basic regulation (now Article 6(1) of Regulation 2016/1036) (see, to that effect and by analogy, judgment of 11 September 2014, Gold East Paper and Gold Huasheng Paper v Council, T‑444/11, EU:T:2014:773, paragraphs 308 to 313).

219    In the present case, it is stated in recital 236 of the provisional regulation, confirmed by recital 154 of the contested regulation, that the investigation had established that there were significant volumes of low-priced imports from the countries concerned throughout the period considered which had a negative impact on the profitability of the Union industry and that, as shown in particular in Table 16 of recital 145 of the provisional regulation, that profitability remained negative throughout the period considered, with the exception of the year 2011, an assessment which the applicant has not shown to be manifestly wrong. In the context of its wide discretion, the Commission was able to deduce from that situation, without committing an error of law or a manifest error of assessment, that none of the years of the period considered, including 2011, which was still severely affected by the economic crisis of 2009, was suitable as a reference for establishing the profit that could reasonably be achieved under normal conditions of competition within the meaning of the case-law cited in paragraph 215 above.

220    In recital 155 of the contested regulation, the Commission explains, furthermore, that it requested the sampled Union producers to provide profitability data for the like product sold on the Union market during the years 2005 to 2010 and that the weighted average profitability for the years 2005 to 2008 that could be calculated on the basis of those data was, for each of those years, between 9 and 15%. According to the Commission, the years 2005 to 2008 were representative for the purpose of establishing the target profit as they were not affected by the global economic crisis, which hit the sector hard from 2009 onwards, and were not characterised by exceptionally favourable market conditions. Moreover, the volume of imports from the countries concerned and other countries during those years was indicative of strong competition.

221    It should be noted, in that regard, that, although the applicant disputes that the concept of economic crisis is difficult to reconcile with the concept of normal conditions of competition within the meaning of the judgment of 28 October 1999, EFMA v Council (T‑210/95, EU:T:1999:273, paragraph 60), it failed to substantiate its claim that the Commission had committed a manifest error of assessment by considering in the present case that the economic crisis, described by the applicant itself as an exceptional circumstance, as noted in paragraph 166 above, had hit the sector hard from 2009 onwards and concluded that the years 2009 and 2010 could not be regarded as reflecting normal conditions of competition within the meaning of the abovementioned judgment, unlike the years 2005 to 2008, which were marked by ‘strong competition’ without being characterised by exceptionally favourable market conditions, which was not disputed by the applicant.

222    In view of the above, the Commission concluded in recital 156 of the contested regulation that the profit margin achieved by the Union industry in the most recent representative year, namely 2008, was a more appropriate basis for the establishment of the target profit of the Union industry at 9.9% than the target profit of 5% provisionally used.

223    In the absence of proof by the applicant that the Commission made an error of law or a manifest error of assessment in determining the reference year for the calculation of the target profit, the first part of the fifth plea in law must be rejected.

 The second part of the fifth plea in law

224    By the second part of the fifth plea in law, the applicant claims that the Commission erred in law and committed a manifest error of assessment by applying by analogy, for the purposes of calculating the injury elimination level and the injury margin, the downward adjustment for selling, general and administrative expenses (‘SG&A’) and the reasonable profit of an unrelated importer, as provided for in Article 2(9) of the basic regulation, to the Union frontier cost, insurance, freight (cif) export price for Russia, including for the applicant. The price in free circulation should be established on the basis of the price actually charged by the related importers in the Union to the first independent customer in the Union. The application of that adjustment, provided for in the context of the determination of dumping, to the calculation of the injury margin is not justified, as the specific circumstances set out in Article 2(9) of the basic regulation in which the said adjustment is to be applied to the free market price does not include the comparison for the purpose of calculating the injury margin. The contested adjustment leads to the establishment of an artificial margin and an adjusted export price that is not real and is not appropriate for the purpose of establishing the injury elimination level. Furthermore, that adjustment is unreasonable in that the determination of the export price, in order to be reasonable, should only take into account the actual cif Union frontier price of the allegedly dumped imports on the free market upon entry into the Union market in order to reflect the direct price competition between those imports and the like product of the Union industry. Finally, contrary to what is stated in recital 167 of the contested regulation, the principle of equal treatment could not justify that adjustment either, as exporting producers selling via related trader-importers and those who sell to unrelated importers are in different individual circumstances.

225    The Commission contests the applicant’s arguments.

226    It should be noted at the outset that, for the purpose of determining the existence of ‘dumping’, Article 2(8) of the basic regulation (now Article 2(8) of Regulation 2016/1036) states that the export price is the price actually paid or payable for the product when sold for export to the Union, whereas Article 2(9) of that regulation states that where, as in the present case, the exporting producer sells the product concerned to the Union via related companies, such sales are made at unreliable transfer prices and therefore a reliable export price has to be constructed in accordance with that provision.

227    It should moreover be noted, that, in recital 166 of the contested regulation, the Commission explains that the assessment of the ‘injury’ margin caused by imports should be based on the Union frontier export price, which is considered to be at a level comparable to the Union industry’s ex-works price, and that, in the case of export sales via related importers, the export price, by analogy with the approach taken for the calculation of the ‘dumping’ margin, is constructed on the basis of the resale price to the first independent customer, duly adjusted, in accordance with Article 2(9) of the basic regulation. In the Commission’s view, since the export price is an indispensable element for the calculation of the injury margin and since that article is the only provision of the basic regulation which provides guidance on the construction of the export price, the application of that article by analogy is justified in the present case.

228    Therefore, according to recital 240 of the provisional regulation, the Commission in this case ‘determined the injury elimination level on the basis of a comparison of the weighted average import price of the cooperating exporting producers in the countries concerned, duly adjusted for importation costs and customs duties, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value’.

229    As can be seen from recital 174 of the contested regulation, the definitive injury margin for non-cooperating exporting producers was established on the basis of the injury margin determined for a representative product type of the cooperating exporting producers. That margin applies to the applicant because, as noted inter alia in paragraph 66 above, its non-cooperation also affected its export price and, therefore, its injury margin.

230    Consequently, the Commission adjusted the export price for the applicant downwards by applying an adjustment for SG&A and the reasonable profit of an unrelated importer for the purpose of calculating the injury elimination level. As can be seen from Table 4 of the contested regulation, that resulted in a definitive anti-dumping duty rate for the applicant of 36.1%, corresponding to the definitive injury margin, whereas the definitive dumping margin was 38.9%.

231    In the first place, contrary to what the applicant alleges, the application by analogy of Article 2(9) of the basic regulation in the present case is not vitiated by error.

232    It should be recalled that the calculation of the price undercutting of the imports at issue is carried out, in accordance with Article 3(2) and (3) of the basic regulation, for the purpose of determining whether the Union industry has suffered injury as a result of those imports and is used, more broadly, for the purpose of assessing that injury and determining the injury margin, namely, the injury elimination level of that injury (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 176). However, the basic regulation does not contain a definition of the concept of price undercutting and does not provide for a methodology for its calculation (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 175), nor does it provide specific rules for calculating the export price for the purpose of calculating the injury margin within the meaning of the third sentence of Article 9(4) of the basic regulation, according to which the amount of the provisional or definitive duty should be less than the dumping margin established if such lesser duty would be sufficient to ‘remove the injury’ caused to the Union industry.

233    In those circumstances, the Commission rightly noted that Article 2(9) of the basic regulation was the only provision of the basic regulation which provided guidance for the calculation of a reliable export price where export sales were made via related importers. As the Commission also rightly observed, that provision reflects the principle of unreliability of transfer prices, which is likely to be applied both to the determination of the injury margin and to the calculation of the dumping margin, whereas it is common ground in the present case that the sales in question were made via related importers at unreliable transfer prices.

234    Consequently, the Commission could consider, within its broad discretion, that for the purpose of calculating the undercutting margin, a reliable export price had to be determined in the present case by applying Article 2(9) of the basic regulation by analogy where sales were made via related importers.

235    In the second place, since the Commission used ‘ex-works’ sales prices for the like product of the Union industry, the requirement to compare prices at the same level of trade required it to also compare them, in respect of the product concerned of the cooperating exporting producers, with the prices of sales to the first unrelated buyers, duly adjusted to arrive at the cif Union frontier price (see, to that effect, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU: T:2019:234, paragraphs 183, 188 and 189). In order to ensure the fairness of that comparison, prices must be compared at the same level of trade, as a comparison between prices obtained at different levels of trade, namely, without including all costs related to the level of trade to be taken into account, will necessarily lead to artificial results that do not allow for a proper assessment of the injury caused to the Union industry. Such a fair comparison is a condition for the legality of the injury calculation for that industry (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 176).

236    In those circumstances, as noted in recital 166 of the contested regulation, it is justified to base the assessment of the sufficiency of a lower duty rate in the present case, for the purpose of removing injury caused by imports, on the ‘Union frontier’ export price, which is considered to be of a comparable level to the ‘ex-works’ Union price, namely, as explained by the Commission at the hearing, the indicative sales price of the Union industry to the first independent customer minus the various ex-factory costs, such as transport or insurance costs, to arrive at the level of the ex-factory price of the product concerned.

237    It should be noted, as the Commission does, that the use in this case of the ‘Union frontier’ level of trade, rather than that of resale to the first independent buyer, as the reference point for the injury margin calculation can be justified both under Article 1(1) of the basic regulation (now Article 1(1) of Regulation 2016/1036), which allows any dumped product to be subject to an anti-dumping duty if its ‘release for free circulation in the Union’, and not its subsequent resale to the first independent customer in the Union, causes injury, as well as under Article 3(3) of that regulation, according to which significant price undercutting refers to dumped ‘imports’.

238    In the third place, the applicant’s argument that the calculation method advocated by the Commission contravenes the principle of equal treatment by distinguishing whether the exporting producer sells, as it does, to related traders or to unrelated importers, as is the case of other sampled exporting producers for which the method used was based on an export price at cif Union frontier level, must also be rejected. The purpose of Article 9(4) of the basic regulation is to assess whether a lower level of duty than the one resulting from the dumping margin is sufficient to remove the injury caused to the Union industry. As noted in recital 167 of the contested regulation, for that industry, the establishment of the relevant import price for the purpose of calculating price undercutting and target prices should not be influenced by whether exports are destined for related or unrelated operators in the Union, and the calculation method chosen ensures precisely equal treatment in both cases, as the method used for other exporting producers, who sell to unrelated importers, is based on a cif export price which excludes SG&A and profits on resale in the Union after customs clearance.

239    Consequently, the applicant has not shown that the Commission committed an error of law or a manifest error of assessment by applying, in the circumstances of the present case, by analogy, Article 2(9) of the basic regulation for the purposes of calculating the injury margin applicable to the applicant, which was established, as noted in recital 174 of the contested regulation, on the basis of the injury margin of the cooperating exporting producers. The second part of the fifth plea in law must therefore be rejected and, consequently, the fifth plea in law in its entirety.

240    In the light of all the foregoing, the action must be dismissed in its entirety.

 Costs

241    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. Since the applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the Commission, in accordance with the latter’s submissions. Since Eurofer has not applied for costs, it must bear its own costs.

On those grounds,

THE GENERAL COURT (Tenth Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Novolipetsk Steel PJSC (NLMK) to bear, in addition to its own costs, those incurred by the European Commission;

3.      Orders Eurofer, European Steel Association, ASBL, to bear its own costs.

Delivered in open court in Luxembourg on 22 September 2021.

[Signatures]

*      Language of the case: English.

1      Confidential data omitted.

© European Union
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