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

JUDGMENT OF THE GENERAL COURT (Tenth Chamber, Extended Composition)

4 December 2024 (*)

( Subsidies - Extension of the definitive countervailing duty imposed on imports of certain woven or stitched glass fibre fabrics originating in China to imports of those products consigned from Morocco - Anti-circumvention investigation - Circumvention - Euro-Mediterranean Association Agreement EC-Morocco - Article 33(a) of Regulation (EU) 2016/1037 - Misuse of powers - Conditions which must be met in order to establish circumvention - Article 23(3) of Regulation 2016/1037 - Change stemming from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty - Assembly operations - Completion operations - Concept of ‘value added’ - Like imported product or parts of that product continuing to benefit from the subsidy - Error of law - Manifest error of assessment - Principle of non-discrimination - Equal treatment - Principle of good administration - Article 28(1) and (3) of Regulation 2016/1037 - Use of the facts available )

In Case T‑246/22,

PGTEX Morocco, established in Tangier (Morocco), represented by P. Vander Schueren, E. Gergondet and A. Nosowicz, lawyers,

applicant,

supported by

LM Wind Power A/S, established in Kolding (Denmark), represented by B. Servais and V. Crochet, lawyers,

intervener,

v

European Commission, represented by G. Luengo and J. Zieliński, acting as Agents,

defendant,

supported by

Tech-Fab Europe eV, established in Frankfurt am Main (Germany), represented by L. Ruessmann and J. Beck, lawyers,

intervener,

THE GENERAL COURT (Tenth Chamber, Extended Composition),

composed of O. Porchia (Rapporteur), President, M. Jaeger, L. Madise, P. Nihoul and S. Verschuur, Judges,

Registrar: I. Kurme, Administrator,

having regard to the written part of the procedure,

further to the hearing on 16 January 2024,

gives the following

Judgment

1        By its action under Article 263 TFEU, the applicant, PGTEX Morocco, seeks the annulment of Commission Implementing Regulation (EU) 2022/301 of 24 February 2022 extending the definitive countervailing duty imposed by Implementing Regulation (EU) 2020/776 on imports of certain woven and/or stitched glass fibre fabrics (‘GFF’) originating in the People’s Republic of China (‘the PRC’) to imports of GFF consigned from Morocco, whether declared as originating in Morocco or not, and terminating the investigation concerning possible circumvention of the countervailing measures imposed by Implementing Regulation (EU) 2020/776 on imports of GFF originating in Egypt by imports of GFF consigned from Morocco, whether declared as originating in Morocco or not (OJ 2022 L 46, p. 31; ‘the contested implementing regulation’).

I.      Background to the dispute

2        The applicant, a company incorporated under Moroccan law which is established in a free zone in Tangier (Morocco) and belongs to the Chinese group PGTEX, is an exporting producer of certain woven and/or stitched glass fibre fabrics (‘GFF’) which it exports, inter alia, to the European Union.

3        GFF are fabrics made up of woven or stitched continuous filament glass fibre rovings and/or yarns (‘glass fibre rovings’) with or without other elements, excluding products which are impregnated or pre-impregnated, and excluding open mesh fabrics with cells with a size of more than 1.8 millimetres (mm) in both length and width and weighing more than 35 grams per square metre (g/m²). Those products are used in a wide range of applications, for example in the production of blades for wind turbines, of sports equipment and of equipment for boats and lorries, as well as in pipe rehabilitation systems.

4        On 16 May 2019, on the basis of Article 10 of Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (OJ 2016 L 176, p. 55) (‘the basic anti-subsidy regulation’), the European Commission initiated an anti-subsidy investigation with regard to imports into the European Union of GFF originating in China and Egypt (‘the anti-subsidy investigation’).

5        The anti-subsidy investigation resulted in Commission Implementing Regulation (EU) 2020/776 of 12 June 2020 imposing definitive countervailing duties on GFF originating in the People’s Republic of China and Egypt and amending Commission Implementing Regulation (EU) 2020/492 imposing definitive anti-dumping duties on imports of certain GFF originating in the People’s Republic of China and Egypt (OJ 2020 L 189, p. 1). By that implementing regulation, the Commission imposed a residual countervailing duty of 30.7% on imports of GFF from China.

6        On 19 May 2021, the Commission received a request pursuant to Article 23(4) and Article 24(5) of the basic anti-subsidy regulation to investigate the possible circumvention of the countervailing measures imposed on imports of GFF originating in China and Egypt, and to make such imports subject to registration.

7        That request was lodged by the intervener in support of the Commission, namely Tech-Fab Europe eV, which is an association of EU producers of GFF.

8        Having concluded, after informing the Member States, that there was sufficient evidence to justify initiating an investigation (‘the anti-circumvention investigation’) under Article 23 of the basic anti-subsidy regulation, the Commission adopted Implementing Regulation (EU) 2021/863 of 28 May 2021 initiating an investigation concerning possible circumvention of the countervailing measures imposed by Implementing Regulation 2020/776 on imports of certain GFF originating in People’s Republic of China and Egypt by imports of certain GFF consigned from Morocco, whether declared as originating in Morocco or not, and making such imports subject to registration (OJ 2021 L 190, p. 76).

9        The anti-circumvention investigation period was the period from 1 January 2019 to 31 December 2020 (‘the investigation period’). Before 2019, there were no significant export volumes of GFF from Morocco to the European Union. Data were collected for the investigation period to investigate, inter alia, the alleged change in the pattern of trade following the imposition of the countervailing measures on the product concerned, and the existence of a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty. More detailed data were collected for the period from 1 January 2020 to 31 December 2020 (‘the reporting period’), in order to examine whether imports were undermining the remedial effect of the measures in force in terms of prices or quantities, and whether subsidisation was taking place.

10      In the course of the anti-circumvention investigation, the PGTEX Group, comprising the applicant and its related companies in China, namely PGTEX China Co., Ltd (‘PGTEX China’) and Chongqing Polycomp International Corporation (‘CPIC’), completed and submitted the form for companies requesting an exemption (‘the exemption claim form’). PGTEX China also completed the form for exporting producers. On 8 September 2021, the PGTEX Group responded to a request for further information sent by the Commission on 13 August 2021 (‘the response to the request for further information’).

11      By letter of 5 October 2021, the Commission informed the applicant of its intention to make findings on the basis of the facts available, in accordance with Article 28 of the basic anti-subsidy regulation. On 12 October 2021, the applicant replied to that letter (‘the response to the Article 28 letter’).

12      On 15 October 2021, the applicant submitted additional information in order to demonstrate that the processing carried out in Morocco could not be regarded as an assembly operation and that that processing was economically justified on its own merits (‘the additional submission’).

13      On 20 December 2021, the Commission issued its general disclosure document (‘GDD’), in which it recommended the extension of the countervailing measures on imports of GFF originating in China and Egypt to imports of GFF consigned from Morocco, and rejected the applicant’s claim for an exemption from those duties. On 7 January 2022, the applicant submitted its comments on the GDD (‘the comments on the GDD’).

14      In parallel, the applicant, taking the view that the GDD, when applying the facts available in respect of the applicant, had failed to address the comments made in the response to the Article 28 letter, requested, on 29 December 2021, the intervention of the Hearing Officer. Hearings took place, on 10 January 2022 with the Commission, and on 12 January 2022 with the Hearing Officer. The Hearing Officer delivered his report on 25 January 2022 (‘the Hearing Officer’s report’).

15      On 24 February 2022, the Commission adopted the contested implementing regulation.

II.    Forms of order sought

16      The applicant claims that the Court should:

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

–        order the Commission to pay the costs.

17      The intervener in support of the applicant, LM Wind Power A/S, submits that the Court should:

–        uphold the action for annulment;

–        order the Commission to pay the costs of its intervention.

18      The Commission contends that the Court should:

–        dismiss the action as unfounded;

–        order the applicant to pay the costs.

19      The intervener in support of the Commission submits that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs of its intervention.

III. Law

20      In support of the present action, the applicant puts forward five pleas in law, alleging:

–        first, infringement of the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part (OJ 2000 L 70, p. 2), as amended (‘the association agreement’), infringement of Article 33(a) of the basic anti-subsidy regulation and misuse of powers, on the ground that the contested implementing regulation imposes countervailing duties on GFF which it exports to the European Union without considering their preferential Moroccan origin;

–        second, infringement of the obligation to state reasons, infringement of the rights of defence and the right to good administration, manifest errors of assessment and infringement of Article 28(1) and (3) of the basic anti-subsidy regulation as regards the use of the facts available;

–        third, manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation, in that the Commission found that there was insufficient due cause or economic justification for the creation of the applicant’s production site in Morocco other than the imposition of the countervailing duties, and infringement of the right to good administration, in that the Commission did not carefully and impartially examine all relevant aspects of the case;

–        fourth, manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation, breach of the principles of non-discrimination and equal treatment and infringement of the right to good administration in that the Commission found that the manufacturing process carried out in Morocco constituted an assembly operation;

–        fifth, manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation in that the Commission found that the GFF exported from Morocco to the European Union still benefited from subsidies granted to Chinese GFF producers.

21      It is appropriate to begin by examining the first, third, fourth and fifth pleas in law, followed, so far as necessary, by the second plea in law.

A.      The first plea in law

22      In support of the first plea, the applicant, as with the intervener in support of the applicant, puts forward, in essence, three complaints.

23      By its first complaint, the applicant submits, as a preliminary matter, that the GFF which it manufactures are considered, under the applicable rules of the association agreement, as ‘originating’ in Morocco. The preferential origin of those GFF is confirmed, it submits, by the proof of origin issued by the Moroccan authorities in accordance with Articles 16 and 17 of Protocol 4 of the association agreement, in the form of EUR.1 certificates, the validity of which has been confirmed by the Moroccan customs agency. Furthermore, it is not disputed that the GFF have preferential origin status.

24      Accordingly, by imposing countervailing duties on the applicant’s imports of GFF of preferential Moroccan origin, following the anti-circumvention investigation and not the anti-subsidy investigation, the contested implementing regulation infringes Article 9 of the association agreement, which prohibits the imposition of customs duties or charges having equivalent effect – and thus countervailing duties – in respect of such products. The applicant submits that there are no exceptions to that prohibition that can be raised by the Commission as an ‘affirmative defence’.

25      According to the applicant, by ratifying the association agreement, the European Union agreed not to impose countervailing duties on imports ‘originating’ in Morocco, regardless of its own legislative instruments. In any event, the primacy of international agreements concluded by the European Union over provisions of secondary EU legislation means that such provisions must, so far as is possible, be interpreted in a manner that is consistent with those agreements (judgment of 10 September 1996, Commission v Germany, C‑61/94, EU:C:1996:313, paragraph 52). The Commission cannot treat the mere existence of secondary EU legislation as a justification for disregarding commitments undertaken in the association agreement.

26      By the second complaint, the applicant submits that the contested implementing regulation infringes Article 33(a) of the basic anti-subsidy regulation since it imposes countervailing duties on imports ‘originating’ in Morocco, thus disregarding the special rules laid down in the association agreement.

27      By the third complaint, the applicant submits that the contested implementing regulation is vitiated by misuse of powers, since its sole purpose is to avoid the procedure specifically prescribed, in relation to State aid, by Article 36 et seq. of the association agreement. According to the applicant, that implementing regulation states that it benefited from a pass-through of subsidies received by related suppliers of raw materials. It submits that the Commission, having found that the applicant had been granted State aid or a subsidy, ought to have proceeded in accordance with Article 36 of the association agreement. It follows, according to the applicant, that the Commission, by avoiding that procedure and instead unilaterally adopting that implementing regulation imposing remedial measures on the ground that the applicant had benefited from ‘State aid’, misused its powers.

28      Lastly, in that regard, the applicant adds that if the Commission’s aim, in adopting the contested implementing regulation, was to ensure the effectiveness of the measures imposed in respect of imports of GFF originating in China, it remains the case that that implementing regulation imposes customs duties and charges having equivalent effect on imports of GFF originating in Morocco, in breach of Article 9 of the association agreement and Article 33 of the basic anti-subsidy regulation.

29      The Commission, as with the intervener in support of the Commission, disputes the applicant’s arguments.

1.      Preliminary observations

(a)    The association agreement

30      The Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part, was concluded in Brussels on 26 February 1996 and was approved on behalf of the European Communities by Council and Commission Decision 2000/204/EC, ECSC of 24 January 2000 on the conclusion of the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part (OJ 2000 L 70, p. 1). Under Article 96 of that agreement, the latter entered into force on 1 March 2000, as follows from the information published in the Official Journal of the European Communities (OJ 2000 L 70, p. 228).

31      Article 1(1) of the association agreement establishes an association between the European Community and the European Coal and Steel Community (referred to together in the association agreement with Morocco as ‘the Community’) and their Member States, of the one part, and the Kingdom of Morocco, of the other part.

32      According to the second indent of Article 1(2) of the association agreement, the latter aims, inter alia, to establish ‘the conditions for the gradual liberalisation of trade in goods, services and capital’.

33      Thus, Article 6 of the association agreement, which is set out in Title II of that agreement, relating to the free movement of goods, provides that ‘the Community and Morocco shall gradually establish a free trade area over a transitional period lasting a maximum of 12 years starting from the date of the entry into force of this Agreement in accordance with the provisions of this Agreement and in conformity with those of the 1994 General Agreement on Tariffs and Trade and the other multilateral agreements on trade in goods annexed to the Agreement establishing the [World Trade Organisation (WTO)] …’.

34      To that end, Article 9 of the association agreement, which, in accordance with the heading of Title II, Chapter I of that agreement, under which that article is set out, applies to industrial products, provides that ‘products originating in Morocco shall be imported into the Community free of customs duties and charges having equivalent effect’.

35      As stipulated in Article 29 of the association agreement, the concept of ‘originating products’ for the purposes of implementing Title II of that agreement and the methods of administrative cooperation relating thereto are laid down in Protocol 4 of that agreement.

36      Furthermore, under Title IV, Chapter II, which is entitled ‘Competition and other Economic Provisions’, of the association agreement Article 36(1) provides that ‘the following [is] incompatible with the proper functioning of this Agreement, in so far as [it] may affect trade between the Community and Morocco: … any official aid which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, with the exception of cases in which a derogation is allowed under the Treaty establishing the European Coal and Steel Community’.

(b)    EU legislation on circumvention of anti-subsidy measures

37      The EU legislation on circumvention of anti-subsidy measures, set out in Article 23 of the basic anti-subsidy regulation, allows the institutions, on certain conditions, to extend the anti-subsidy duties which they have imposed on imports of products from a third country to imports of like products from, inter alia, another country, in order to avoid circumvention of the anti-subsidy measures.

38      More specifically, Article 23 of the basic anti-subsidy regulation, entitled ‘Circumvention’, is worded as follows:

‘1.      Countervailing duties imposed pursuant to this Regulation may be extended to imports from third countries of the like product, whether slightly modified or not, or to imports of the slightly modified like product from the country subject to measures, or parts thereof, when circumvention of the measures in force is taking place.

2.      Countervailing duties not exceeding the residual countervailing duty imposed in accordance with Article 15(2) may be extended to imports from companies benefiting from individual duties in the countries subject to measures when circumvention of the measures in force is taking place.

3.      Circumvention shall be defined as a change in the pattern of trade between third countries and the Union or between individual companies in the country subject to measures and the Union, which stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty, and where there is evidence of injury or that the remedial effects of the duty are being undermined in terms of the prices and/or quantities of the like product and that the imported like product and/or parts thereof still benefit from the subsidy.

The practice, process or work referred to in the first subparagraph includes, inter alia:

(a)      the slight modification of the product concerned to make it fall under customs codes which are normally not subject to the measures, provided that the modification does not alter its essential characteristics;

(b)      the consignment of the product subject to measures via third countries;

(c)      the reorganisation by exporters or producers of their patterns and channels of sales in the country subject to measures in order to eventually have their products exported to the Union through producers benefiting from an individual duty rate lower than that applicable to the products of the manufacturers.’

39      It follows from recital 18 of the basic anti-subsidy regulation that that provision was adopted on the ground that ‘even though the Subsidies Agreement does not contain provisions concerning circumvention of countervailing measures, the possibility of such circumvention exists, in terms similar, albeit not identical, to the circumvention of anti-dumping measures’. In the current economic reality, which is characterised by an increasing globalisation of international trade, offering undertakings ever more opportunities to relocate the production of goods to different countries, it is becoming increasingly important for the European Union to have at its disposal trade defence instruments which are able to respond effectively to the challenges presented by that trade environment by ensuring that EU industry has effective protection against imports of subsidised products. Of those instruments, the anti-circumvention rules play an essential role in order to guarantee the effectiveness of the countervailing measures adopted by the European Union (see, to that effect and by analogy, Opinion of Advocate General Pitruzzella in Commission v Kolachi Raj Industrial, C‑709/17 P, EU:C:2019:303, points 1 and 73).

2.      The merits of the first plea, alleging infringement of the association agreement, infringement of Article 33(a) of the basic anti-subsidy regulation and misuse of powers, on the ground that the contested implementing regulation imposes countervailing duties on the GFF that the applicant exports to the European Union without considering their preferential Moroccan origin

40      In the present case, in order to address the first plea, it is necessary to determine, in essence, whether the Commission was entitled to use the anti-circumvention rules laid down in Article 23 of the basic anti-subsidy regulation in order to extend countervailing duties that it had imposed on imports of a product originating in a third country (namely, in the present case, China) to imports of like products originating, inter alia, in another country (namely, in the present case, Morocco), regardless of the fact that the European Union had concluded an association agreement with the Kingdom of Morocco.

41      In the first place, it should be observed that, as stated in paragraph 37 above, Article 23 of the basic anti-subsidy regulation allows the institutions, on certain conditions, to extend the countervailing duties which they have imposed on imports of products from a third country to imports of like products from, inter alia, another country, in order to avoid circumvention of the anti-subsidy measures.

42      Furthermore, according to the case-law, the sole purpose of a regulation extending a countervailing duty is to ensure that the duty is effective and to prevent its circumvention, and consequently, a measure extending a definitive countervailing duty is merely ancillary to the initial act establishing that duty, which protects the effective application of the definitive measures (see, to that effect, judgment of 12 September 2019, Commission v Kolachi Raj Industrial, C‑709/17 P, EU:C:2019:717, paragraph 96 and the case-law cited).

43      In the second place, it should be noted that, as is apparent on reading the provisions cited in paragraphs 31 to 34 above, the association agreement is intended to gradually establish a free trade area between the European Union and Morocco. That agreement was concluded with a view to promoting the free movement of goods between the European Union and Morocco by means, in particular, of the elimination of customs duties and charges having equivalent effect.

44      Thus, the association agreement and Article 23 of the basic anti-subsidy regulation are two EU commercial policy instruments with different aims and rationales. While the first is an instrument of cooperation intended to promote the free movement of goods originating in Morocco within the European Union, the second is a trade defence instrument intended to sanction unfair commercial practices which might undermine the effectiveness of anti-subsidy measures already in force in relation to third countries.

45      In the present case, on the basis of a finding that the PGTEX Group had put in place, in Morocco, a practice intended to circumvent the countervailing duty imposed under Implementing Regulation 2020/776 on imports of GFF originating in China, the Commission, by the contested implementing regulation, extended that countervailing duty to GFF consigned from Morocco. Furthermore, the duty as thus extended, the only purpose of which is to ensure the effectiveness of the countervailing duty imposed on the People’s Republic of China, cannot be separated from the latter countervailing duty, to which it is ancillary (see, to that effect and by analogy, judgment of 8 November 2005, Jersey Produce Marketing Organisation, C‑293/02, EU:C:2005:664, paragraph 70).

46      Thus, by the contested implementing regulation, the Commission is dealing with the Chinese undertakings in the PGTEX Group in order to prevent them from using the territory of Morocco, the Kingdom of Morocco having concluded the association agreement with the European Union, to avoid the countervailing duty imposed on Chinese imports of GFF.

47      In that regard, it should be observed that the association agreement does not include provisions prohibiting either of the parties to that agreement from adopting anti-circumvention measures. Accordingly, that agreement does not prevent the European Union, when confronted with conduct such as that described in paragraph 46 above, from verifying whether all of the conditions for the application of Article 23 of the basic anti-subsidy regulation are met and, subsequently, in so far as it is found that those conditions are actually met, from imposing the anti-circumvention measures to counteract that conduct.

48      Any other reading might deprive the European Union of a trade defence instrument which is crucial for ensuring effective protection of EU industry, and might transform Morocco into a ‘free zone’ in which economic operators would be able to carry out any kind of operation with a view to circumventing anti-subsidy measures, which, in the present case, would be contrary to the mutual commitments made by the Kingdom of Morocco and the European Union in the association agreement.

49      Accordingly, in view of the foregoing, it must be held that the Commission was entitled to use the anti-circumvention rules laid down in Article 23 of the basic anti-subsidy regulation, and, therefore, the first plea must be rejected.

B.      The third to fifth pleas in law

50      The third to fifth pleas relate to the assessment of whether the conditions for the application of Article 23 of the basic anti-subsidy regulation were met in the present case.

51      In that regard, it should be noted that, as is apparent from recital 32 of the contested implementing regulation, the Commission made an assessment, in accordance with Article 23(3) of the basic anti-subsidy regulation, as to whether circumvention was taking place, examining the following matters in the following order:

–        whether there had been a change in the pattern of trade between the third countries (namely China, Egypt and Morocco) and the European Union (which constitutes the first condition);

–        whether that change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty (which constitutes the second condition);

–        whether there was evidence of injury or that the remedial effects of the duty were being undermined in terms of the prices or quantities of the like products (which constitutes the third condition), and whether the imported like product or parts thereof were still benefiting from the subsidy (which constitutes the fourth condition).

52      In the present case, in recital 33 of the contested implementing regulation, the Commission stated that ‘the second subparagraph of Article 23(3) of the basic [anti-subsidy regulation] does not list assembly operations specifically as a practice, process or work that constitutes circumvention’, but that ‘[that subparagraph] explicitly uses the [expression] ‘inter alia’, which means that it provides a non-exhaustive list of possible circumvention practices’, and that ‘as a result, it also covers other circumvention practices, which are not explicitly listed in the Article in question, such as assembly operations’. Therefore, ‘since the evidence provided [in the request to initiate the investigation] pointed to assembly operations in Morocco, the Commission[, in the course of examining the second condition at issue,] … analysed whether, by analogy, the criteria set out in Article 13(2) of [Regulation (EU) 2016/1036] were met, in particular whether the assembly operation started or substantially increased since, or just prior to, the initiation of the anti-subsidy investigation[,whether] the parts concerned are from the country subject to measures, … [whether] the parts constitute 60% or more of the total value of the parts of the assembled product and whether the added value of the parts brought in, during the assembly or completion operation, was greater than 25% of the manufacturing costs’.

53      In the present case, the applicant does not challenge the assessment of either the first or third conditions referred to in paragraph 51 above. It does, however, challenge the assessment made in relation to the second and fourth conditions referred to in that paragraph.

1.      Preliminary observations

54      It should be noted that, according to the case-law, in the sphere of the common commercial policy and, most particularly, in the realm of measures to protect trade, the EU institutions enjoy a broad discretion by reason of the complexity of the economic, political and legal situations which they have to examine. The judicial review of such an appraisal must therefore be limited to verifying whether the procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated, and whether there has been a manifest error in the appraisal of those facts or a misuse of powers (see judgment of 26 January 2017, Maxcom v Chin Haur Indonesia, C‑247/15 P, C‑253/15 P and C‑259/15 P, EU:C:2017:61, paragraph 54 and the case-law cited).

2.      The merits of the third plea in law, alleging manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation, in that the Commission found that there was insufficient due cause or economic justification for the creation of the applicant’s production site in Morocco other than the imposition of the countervailing duties, and alleging infringement of the right to good administration, in that the Commission did not carefully and impartially examine all the relevant aspects of the case

55      The third plea is divided, in essence, into two parts.

56      Under the first part, the applicant, as with the intervener in support of the applicant, submits, first of all, that the contested implementing regulation is based on manifest errors of assessment and infringes Article 23(3) of the basic anti-subsidy regulation in that the Commission found that there was insufficient due cause or economic justification for the establishment of the applicant’s production site in Morocco other than the imposition of the countervailing duties.

57      First, the applicant submits that, during the anti-circumvention investigation, it thoroughly explained and demonstrated the due cause and economic justification for the establishment of its production site in Morocco. According to the applicant, the establishment of that site results, in particular, from a long-term business expansion plan developed by the PGTEX Group, to which the applicant belongs. That plan envisages [confidential]. (1) The applicant considers that the Commission used a purely temporal correlation to disregard strong and clear evidence showing that the decision to establish its production site in Morocco was based on economic and logistical factors and not on the initiation of anti-dumping or anti-subsidy investigations. It adds that the Commission also ignored the evidence which the applicant had provided in order to explain that the establishment of its production site in Morocco had been delayed [confidential].

58      Second, the applicant submits that, although its production site in Morocco was established in October 2019, the process of establishing that site was preceded by several preliminary steps, which demonstrates that the decision to establish that production site was taken well before the initiation of any investigation and that its establishment was not intended or designed to circumvent EU trade defence measures. In particular, according to the applicant, the decision to establish a production site in Morocco was taken [confidential].

59      Third, the applicant submits that the Commission erred in rejecting the argument put forward by the intervener in support of the applicant, to the effect that the applicant’s production site in Morocco was established to serve [confidential]. The additional submission confirms that discussions about the setting up of a plant in Morocco happened as early as [confidential], including with a view to supplying an important local customer. The applicant also states that, during the hearing on the GDD of 10 January 2021, it explained that the reason why it established itself in Morocco was to respond to the growing demand in [confidential], that the reporting period corresponded to a start-up phase and that that phase had been affected by the COVID-19 pandemic, which had caused delays in the qualification and plant audit processes in Morocco.

60      Fourth, the applicant submits that the contested implementing regulation is incorrect in alleging that the 2019 annual report of PGTEX China explicitly confirms that the potential imposition of duties was the reason for the establishment of its production site in Morocco. According to the applicant, that report states that its production site was established not only to ‘actively respond to the EU’s anti-dumping investigation against [the People’s Republic of] China’, but also to ‘further optimise and adjust its internalisation strategy, consolidate and increase the market share of products in [confidential], meet customer demand, and protect customer supply’. That report therefore does not allude to ‘circumvention’, but to ‘measures’ taken in response to the anti-dumping investigation, justified by an ‘internationalisation strategy’, by ‘customer demand’ and by a desire to ‘protect customer supply’. The applicant submits that the report in question was thus intended to reassure investors and to inform them that the applicant was not concerned by anti-dumping or countervailing measures because the PGTEX Group had already planned to serve the EU market through a factory in Morocco.

61      In that regard, the intervener in support of the applicant adds that it follows from the phrase ‘for which there is insufficient due cause or economic justification other than the imposition of the duty’, in Article 23 of the basic anti-subsidy regulation, that the imposition of the duty must be the main, if not the sole, cause for the practice, process or work at issue. It submits that it is not sufficient that the imposition of the duty is one of the causes for the practice, process or work. It must be demonstrated that the other possible causes or economic justifications are insufficient, so that the imposition of the duty is the main reason for the practice, process or work.

62      Furthermore, the intervener in support of the applicant submits that the applicant is not the only undertaking to have established itself in Morocco with a view to supplying manufacturers of windmill blades. It states that, under the association agreement, imports from Morocco into the European Union are not subject to customs duties, whereas there are conventional customs duties of up to 7% in place for imports of GFF originating in China. Morocco is therefore a more suitable location than China for the production and export of GFF to the European Union. Hence, the establishment of the applicant’s production site in Morocco would have taken place regardless of the initiation of the anti-subsidy investigation, in order for the applicant to meet the growing demand for GFF in Morocco and to supply the European Union without being subject to conventional customs duties. Thus, according to the intervener in support of the applicant, there was sufficient due cause or economic justification, other than the imposition of the duty, for the establishment of the applicant in Morocco, since that undertaking would have been created even if no anti-subisdy investigation had been initiated in relation to imports of GFF originating in China.

63      Under the second part of the third plea, the applicant submits that the contested implementing regulation infringes the right to good administration in that the Commission failed to examine carefully and impartially all the relevant aspects of the case and, in particular, in that the Commission, first, refused to take account of documents demonstrating that the applicant’s establishment in Morocco had been envisaged long before the initiation of the anti-dumping or countervailing investigation; second, disregarded the observations of the Moroccan authorities indicating that there had been contact with those authorities as early as [confidential], and therefore before the initiation of any investigation; third, rejected the arguments of the intervener in support of the applicant and other material in the file demonstrating that the applicant’s plant in Morocco had been established to serve [confidential]; and fourth, incorrectly analysed the 2019 annual report of PGTEX China.

64      The Commission, as with the intervener in support of the Commission, disputes the applicant’s arguments.

65      Before examining, in order, the two parts of the third plea, it is necessary to note how the Commission, in the present case, made its assessment in relation to the second condition which must be satisfied in order for a finding of circumvention to be made (see paragraph 50 above). In particular, it is necessary to set out, in brief, the recitals of the contested implementing regulation in which the Commission found that there was insufficient due cause or economic justification for the establishment of the applicant’s production site in Morocco other than the imposition of the countervailing duties.

(a)    The assessment that there was insufficient due cause or economic justification for the establishment of the applicant’s production site in Morocco other than the imposition of the countervailing duties in the contested implementing regulation

66      After stating, in recital 61 of the contested implementing regulation, that ‘the increase of exports of GFF from Morocco to the Union constitute[d] a change in the pattern of trade between Morocco and the Union within the meaning of Article 23(3) of the basic [anti-subsidy regulation], together with the significant increase in 2020 compared to 2019 of Chinese exports of glass fibre rovings into Morocco’, the Commission observed, in recital 62 of that implementing regulation, that, ‘Article 23(3) of the basic [anti-subsidy regulation] requires that the change in the pattern of trade [has to stem] from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty.’

67      Thus, the Commission examined the second condition which must be satisfied in order for a finding of circumvention to be made as regards the establishment of the applicant’s production site in Morocco.

68      In that regard, in recital 64 of the contested implementing regulation, the Commission stated that, ‘according to the submission of the Moroccan authorities …, the first contact with the PGTEX Group for the set-up of a plant in Morocco dated back to 20 March 2019, one month after the initiation of the … anti-dumping investigation and two months before the initiation of the … anti-subsidy investigation’, that ‘[the applicant had been] set up on 2 October 2019, about 5 months after the initiation of the anti-subsidy investigation’, and that ‘this coincidence in time [suggested to the Commission] that the potential imposition of the duties were the cause of the establishment of [the applicant]’.

69      In recital 65 of the contested implementing regulation, the Commission added that ‘based on the submitted sales listing by [the applicant], during 2020, all export sales of [the applicant] went to the Union market, whereas only a small fraction of its 2020 production was sold domestically’, and that ‘moreover, its export sales during 2020 were all sold to customers in the Union, which were supplied in the past by PGTEX China’. That suggested to the Commission that ‘the potential imposition of the duties [was] the reason for the set-up of [the applicant]’, a theory which ‘was explicitly confirmed by the 2019 annual report of PGTEX China’.

70      In addition, in recital 67 of the contested implementing regulation, the Commission rejected the PGTEX Group’s argument that there was sufficient due cause and economic justification for the establishment of the applicant. In particular, in that regard, the Commission observed that ‘the documentation which the PGTEX Group submitted on 15 October 2021 showed that [that] Group was assessing a long time before the initiation of the [anti-subsidy] investigation in which country to establish a company’, and that ‘various potential countries were considered, including Morocco’. However, according to the Commission, the fact remained that the applicant ‘was finally set up on 2 October 2019, about 7 months after the initiation of [that] investigation’, that ‘this coincidence in time suggested that [that investigation] was a cause for the establishment of [the applicant]’, that ‘this was further corroborated by a statement of the Moroccan authorities stating that their contacts with PGTEX for the establishment of a plant dated back to 20 March 2019, and as such just after the initiation of the [investigation in question]’, and that ‘this demonstrated that formal contacts with the Moroccan authorities to establish a company in Morocco dated back to March 2019, which was just after the initiation of [that investigation]’.

71      Lastly, in recital 69 of the contested implementing regulation, the Commission rejected the argument of the intervener in support of the applicant, to the effect that the PGTEX Group had set up its Moroccan plant in order to serve [confidential], and that there was therefore an economic justification for the establishment of that plant other than avoiding countervailing duties. In that regard, the Commission, first, made reference to evidence indicating that there was no economic justification for the establishment of that plant other than the countervailing duties that were in force, such as the 2019 annual report of PGTEX China, and, second, observed that all the applicant’s export sales were made to the European Union and that only a small fraction of the applicant’s production was sold on the Moroccan market.

72      In view of the above, in recital 70 of the contested implementing regulation the Commission concluded that ‘the [anti-circumvention] investigation did not reveal sufficient due cause or an economic justification [for] the establishment of a GFF production site in Morocco other than to avoid the payment of the [countervailing] duties currently in force.’

(b)    The first part of the third plea, alleging manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation in that the Commission found that there was insufficient due cause or economic justification for the establishment of the applicant’s production site in Morocco other than the imposition of the countervailing duties

73      The applicant challenges the conclusion in recital 70 of the contested implementing regulation (see paragraph 72 above), submitting in essence that, during the investigation, it thoroughly explained and demonstrated that there was a due cause and economic justification for the establishment of its production site in Morocco other than a desire to circumvent the trade defence measures in force. The applicant submits that the Commission used a purely temporal correlation to disregard strong and clear evidence showing that the decision to establish its production site in Morocco was based on economic and logistical factors and not on the initiation of the anti-subsidy investigation.

74      As regards the date of establishment of the applicant’s production site in Morocco, in the first place, it should be noted that, as the Commission rightly states, the evidence provided by the applicant, namely the emails between PGTEX, CPIC and customers, between [confidential], show, as the applicant itself acknowledges, that Morocco, along with other countries, was regarded as a potential location for the establishment of a factory. As the applicant confirmed during the hearing, those emails do not show that an actual decision to establish the applicant’s production site in Morocco was taken between [confidential], that is to say before the initiation of the anti-subsidy investigation. Similarly, the correspondence between the management of CPIC following a visit to Morocco in [confidential] does not indicate that a decision to establish such a production site in Morocco was taken in [confidential]. In particular, it should be noted that the ‘feasibility study’ annexed to the additional submission, which is dated [confidential], is merely an internal note concerning meetings to evaluate CPIC’s investments in Morocco. That document does not show that the decision to establish the production site in Morocco dates back to that period.

75      In the second place, it is clear from the observations of the Moroccan authorities that ‘[the applicant] was formed in October 2019’. While the Moroccan authorities do state that, as with the formation of any undertaking, the process of establishing the applicant’s production site ‘was preceded by several preliminary steps, such as feasibility studies, demonstrating that PGTEX’s decision to establish itself in Morocco was made well before the imposition of the measures and was not aimed at, or intended to, circumvent the [EU] trade defence measures’, they also state that ‘contact between PGTEX and [them] in relation to the establishment of a PGTEX plant in Morocco dates back to 20 March 2019, which was just after the [initiation] of the [anti-dumping investigation]’. Accordingly, the Commission did not make a manifest error of assessment when, in recital 67 of the contested implementing regulation, it stated that ‘formal contacts with [those] authorities to establish a company in Morocco dated back to March 2019, which was just after the initiation of [that investigation]’.

76      In the third place, the arguments put forward by the applicant to explain why the establishment of its production site in Morocco was delayed until October 2019 (see paragraph 57 above) merely confirm the Commission’s conclusion that the establishment of that production site was completed five months after the initiation of the anti-subsidy investigation.

77      Therefore, as the Commission rightly observed in recital 67 of the contested implementing regulation, the initiation of the anti-subsidy investigation coincides in time with the establishment of the applicant’s production site in Morocco. According to the case-law, such a temporal coincidence is capable of justifying the presumption that the purpose of the establishment of a factory in the country from which the goods are exported is to avoid the application of trade policy measures (see, to that effect, judgment of 13 December 1989, Brother International, C‑26/88, EU:C:1989:637, paragraph 29).

78      It also follows from the case-law that, in consequence, where such a temporal coincidence exists, it is for the economic operator concerned to prove that there were reasonable grounds, other than a desire to avoid the consequences of the measures in question, for establishing a production site in the country from which the goods are exported (see, to that effect, judgment of 13 December 1989, Brother International, C‑26/88, EU:C:1989:637, paragraph 29).

79      In that regard, the applicant claims, in essence, that the establishment of its production site in Morocco was part of a long-term business expansion plan developed by the PGTEX Group, of which it is part, [confidential]. In particular, that site was established with a view to supplying an important local customer and, more generally, to meet the increase in demand in [confidential]. Accordingly, the applicant submits that the Commission erred in rejecting the argument of the intervener in support of the applicant, to the effect that that Group had established its Moroccan plant with a view to serving the [confidential].

80      Furthermore, in order to prove the claims set out in paragraph 79 above, the applicant refers to correspondence between itself and CPIC and between itself and customers, as well as to the PGTEX Group’s expansion plan concerning [confidential], annexed to the additional submission, and to the slides for the hearing on the GDD of 10 January 2021.

81      However, in that regard, first, it should be noted that the correspondence annexed by the applicant to the additional submission does not contain any reference to a real PGTEX Group expansion plan [confidential]. As stated in paragraph 74 above, that correspondence proves only that Morocco, along with other countries, was considered as a potential site for the establishment of a plant.

82      Second, even if the presentation of the PGTEX Group’s expansion plan concerning the [confidential] could demonstrate that that plan had actually been implemented, it is not sufficient to prove that the plan covered Morocco. The applicant has not produced any document relating to PGTEX Group expansion projects in Morocco. As confirmed at the hearing, the slides for the hearing on the GDD of 10 January 2021, far from proving that the plan in question was implemented, simply contain an unsupported assertion by the applicant that the establishment of its plant in Morocco [confidential].

83      Furthermore, it should be stated that the applicant does not challenge the evidence on which the Commission relied in order to reject the argument that the PGTEX Group had established its Moroccan factory with a view to serving the [confidential] markets. In particular, the applicant does not challenge the finding, made in recital 65 of the contested implementing regulation, that ‘based on the submitted sales listing by [it], during 2020, all [its export sales] went to the Union market, whereas only a small fraction of its 2020 production was sold [on the Moroccan market]’.

84      Similarly, the applicant’s statement that the 2019 annual report of PGTEX China indicates that its production site in Morocco was established not only to ‘actively respond to the EU’s anti-dumping investigation against [the People’s Republic of] China’, but also to ‘further optimise and adjust its internalisation strategy’ does not contradict the Commission’s finding that the decision to establish that production site had been made as an active response to the anti-dumping investigation initiated by the European Union in relation to [the People’s Republic of] China. Nor can that statement suffice to prove that there were reasonable grounds for the applicant to be established in Morocco, other than a desire to avoid the consequences of the anti-subsidy measures in question, in accordance with the case-law cited in paragraph 78 above.

85      Accordingly, it must be held that the applicant has not succeeded in challenging the Commission’s conclusion, in recital 70 of the contested implementing regulation, that ‘the [anti-circumvention] investigation did not reveal sufficient due cause or an economic justification [for] the establishment of a GFF production site in Morocco other than to avoid the payment of the [countervailing] duties currently in force’.

86      Consequently, the applicant cannot complain that the Commission made a manifest error of assessment or that it infringed Article 23(3) of the basic anti-subsidy regulation.

87      The first part of the third plea must therefore be rejected as unfounded.

(c)    The second part of the third plea, alleging infringement of the right to good administration, in that the Commission did not examine carefully and impartially all the relevant aspects of the case

88      The applicant complains that the Commission did not examine carefully and impartially all the relevant aspects of the case. In that regard, it should be noted that, according to settled case-law, in the field of trade defence measures, in which the EU institutions have a wide power of appraisal (see paragraph 54 above), respect for the rights guaranteed by the EU legal order in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (see judgment of 24 May 2012, JBF RAK v Council, T‑555/10, not published, EU:T:2012:262, paragraph 112 and the case-law cited).

89      In that regard, it follows from the analysis of the first part of the third plea, first, that neither the documents produced by the applicant nor the observations of the Moroccan authorities show that the establishment of the applicant’s production site in Morocco was envisaged well before the initiation of the anti-subsidy investigation concerning the People’s Republic of China; second, that the Commission did not err in rejecting the argument put forward by the intervener in support of the applicant that the PGTEX Group had established its factory in Morocco with a view to serving the [confidential] markets and that there was therefore no economic justification for the establishment of that factory other than a desire to avoid the countervailing duties in force; and, third, that the Commission’s analysis of the 2019 PGTEX China annual report was correct.

90      In those circumstances, the applicant cannot legitimately argue that the Commission failed to fulfil its obligation to examine carefully and impartially all the relevant aspects of the case.

91      Accordingly, the second part of the third plea must be rejected, as must the third plea in its entirety.

3.      The merits of the fourth plea, alleging manifest errors of assessment, infringement of the right to good administration and of the principles of non-discrimination and equal treatment, and infringement of Article 23(3) of the basic anti-subsidy regulation, in that the Commission found that the manufacturing process implemented by the applicant in Morocco constituted an assembly operation

92      This plea is made up of three parts.

93      By the first part, the applicant seeks, in essence, to challenge the inclusion of the concept of ‘assembly operation’ referred to in Article 13 of 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) (‘the basic anti-dumping regulation’) within the scope of the second subparagraph of Article 23(3) of the basic anti-subsidy regulation. By the second part, it seeks to challenge the finding that assembly operations were taking place in Morocco, within the meaning of Article 13(2) of the basic anti-dumping regulation. Lastly, by the third part, it challenges the Commission’s assessment of the ‘value added’ criterion, as referred to in Article 13(2)(b) of the latter regulation.

(a)    The first part of the fourth plea, alleging manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation in that the Commission applied, by analogy, the concept of ‘assembly operations’ referred to in Article 13(2) of the basic anti-dumping regulation

94      In the first place, the applicant, as with the intervener in support of the applicant, submits that the difference between the wording of the second subparagraph of Article 23(3) of the basic anti-subsidy regulation, which does not refer to assembly operations, and the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation, which expressly refers to such operations, is not a mere omission and is not meaningless. It argues that if the EU legislature had intended the practice, process or work referred to in the second subparagraph of Article 23(3) of the basic anti-subsidy regulation to cover assembly operations then that would have been expressly stated, as it is in the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation. That deliberate omission must therefore be regarded as precluding a finding that countervailing measures can be ‘circumvented’ by means of assembly operations.

95      Furthermore, the applicant submits, the fact that the second subparagraph of Article 23(3) of the basic anti-subsidy regulation uses the expression ‘inter alia’ does not mean that that provision can cover alleged circumvention practices resulting from assembly operations. That regulation and the basic anti-dumping regulation were adopted on a proposal of the Commission on the same day. In addition, the European Parliament appointed the same rapporteur for both texts, and, at Council level, the same presidency was responsible for both texts. In any event, according to the applicant, the difference between the anti-dumping and anti-subsidy circumvention rules originates from one single regulation that modified the former basic anti-dumping and anti-subsidy rules, namely Council Regulation (EC) No 461/2004 of 8 March 2004 amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community and Regulation (EC) No 2026/97 on protection against subsidised imports from countries not members of the European Community (OJ 2004 L 77, p. 12). That difference must therefore be taken into account.

96      In the second place, the applicant submits that extending countervailing duties on account of assembly operations that confer origin would result in such countervailing duties being applied in respect of subsidies that have been granted neither by the country of origin, nor by the country of export. According to the applicant, the contested implementing regulation imposes, for example, countervailing duties on products which are allegedly subsidised by China rather than by their country of origin and export, namely Morocco.

97      The legal requirement that subsidies must be granted by the country of origin or export to be countervailed justifies in itself the different wording of Article 13(2) of the basic anti-dumping regulation and Article 23(3) of the basic anti-subsidy regulation. Slight modifications, transshipments or reorganisation of patterns and channels of sales in the country subject to measures (namely the circumvention practices, processes or works covered by both the basic anti-subsidy regulation and the basic anti-dumping regulation) do not result in a change in the country of origin or export of the products, in contrast to assembly operations (namely the circumvention practices, processes or works that are covered only by the basic anti-dumping regulation).

98      The different wordings of Articles 13(2) of the basic anti-dumping regulation and Article 23(3) of the basic anti-subsidy regulation are thus also justified by the different objectives of the two instruments, meaning that the rule concerning assembly operations in Article 13(2) of the basic anti-dumping regulation cannot be applied by analogy to Article 23(3) of the basic anti-subsidy regulation.

99      The mere fact that the purpose of the anti-circumvention provision is to ensure the effectiveness of the measures does not, however, mean that the Commission – or the Court – can step into the role of the EU legislatures and amend the text of the basic anti-subsidy regulation by including assembly operations. There is a reason why such operations are not covered by the second subparagraph of Article 23(3) of the basic anti-subsidy regulation, namely that, unlike what is stated in Article 13 of the basic anti-dumping regulation, it would be impossible to apply the parts and value added tests correctly. Subsidies granted on the parts in their country of origin can significantly reduce their value and render ineffective the test based on 60% of the total value of parts.

100    Therefore, in so far as the wording of Article 23(3) of the basic anti-subsidy regulation excludes assembly operations, and in so far as any inclusion by analogy would be contrary to the context and the objectives of the basic anti-subsidy regulation, the concept of assembly operations set out in Article 13(2) of the basic anti-dumping regulation cannot be applied by analogy in order to make a finding of circumvention of countervailing duties. Furthermore, there is no justification for applying, by analogy, the tests based on the total value of parts (namely 60%) and the value added (namely 25%).

101    In the third place, the applicant expresses surprise that the Commission, which produced the proposals for both basic regulations and drafted Article 13 of the basic anti-dumping regulation and Article 23 of the basic anti-subsidy regulation, has not produced a single document concerning the legislative history of those texts indicating why assembly operations were omitted from the wording of Article 23 of the basic anti-subsidy regulation. The applicant therefore asks the Court to obtain such documents by means of a measure of organisation of procedure.

102    The Commission, as with the intervener in support of the Commission, disputes the applicant’s arguments.

103    In essence, by the first part of the fourth plea, the applicant seeks to challenge the Commission’s reasoning in recital 33 of the contested implementing regulation (see paragraph 52 above). In particular, it criticises the Commission for applying the concept of ‘assembly operations’ referred to in the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation in order to determine whether circumvention had taken place in the present case, within the meaning of the second subparagraph of Article 23(3) of the basic anti-subsidy regulation, despite the fact that assembly operations are not expressly listed as a practice, process or work which, pursuant to that provision, constitutes a circumvention of anti-subsidy measures.

104    In that regard, it should be noted that the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation is worded as follows:

‘The practice, process or work referred to in the third subparagraph includes, inter alia:

(a)      the slight modification of the product concerned to make it fall under customs codes which are normally not subject to the measures, provided that the modification does not alter its essential characteristics;

(b)      the consignment of the product subject to measures via third countries;

(c)      the reorganisation by exporters or producers of their patterns and channels of sales in the country subject to measures in order to eventually have their products exported to the Union through producers benefiting from an individual duty rate lower than that applicable to the products of the manufacturers;

(d)      in the circumstances indicated in paragraph 2, the assembly of parts by an assembly operation in the Union or a third country’.

105    By contrast, the second subparagraph of Article 23(3) of the basic anti-subsidy regulation is worded as follows:

‘The practice, process or work referred to in the first subparagraph includes, inter alia:

(a)      the slight modification of the product concerned to make it fall under customs codes which are normally not subject to the measures, provided that the modification does not alter its essential characteristics;

(b)      the consignment of the product subject to measures via third countries;

(c)      the reorganisation by exporters or producers of their patterns and channels of sales in the country subject to measures in order to eventually have their products exported to the Union through producers benefiting from an individual duty rate lower than that applicable to the products of the manufacturers.’

106    It is apparent from the wording of the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation and from the wording of the second subparagraph of Article 23(3) of the basic anti-subsidy regulation that, as the Commission recognises in recital 33 of the contested implementing regulation, assembly operations are not expressly listed in the second subparagraph of Article 23(3) of the basic anti-subsidy regulation as a practice, process or work constituting circumvention.

107    However, the absence of any reference to assembly operations in the second subparagraph of Article 23(3) of the basic anti-subsidy regulation does not mean, as the applicant claims, that the EU legislature intended to exclude assembly operations from the scope of that article.

108    Given that the expression ‘inter alia’ is expressly used in the second subparagraph of Article 23(3) of the basic anti-subsidy regulation, it must be held that – as the Commission stated in recital 33 of the contested implementing regulation – that article provides a non-exhaustive list of possible circumvention practices. As a result, the second subparagraph of Article 23(3) of that regulation may also cover other circumvention practices which are not expressly referred to in the article in question, such as assembly operations.

109    That interpretation is supported by the case-law according to which the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation contains a non-exhaustive list of practices, processes and works referred to in the first subparagraph of that article, and according to which the different sorts of circumvention practices appear only as examples, as illustrated by the words ‘inter alia’ (see, to that effect, judgment of 19 April 2018, Asia Leader International (Cambodia) v Commission, T‑462/15, EU:T:2018:196, paragraph 56).

110    Such an interpretation, consistent with the underlying objective of Article 23 of the basic anti-subsidy regulation, namely to ensure the effectiveness of the anti-subsidy measures in force (see paragraph 42 above), cannot be called into question by the other arguments put forward by the applicant.

111    First of all, as regards the applicant’s argument that the basic anti-dumping regulation and the basic anti-subsidy regulation were adopted and published on the same day, such that the absence of any reference to assembly operations in the second subparagraph of Article 23(3) of the basic anti-subsidy regulation cannot be understood as a simple omission, it must be noted that, contrary to the applicant’s submissions, the difference between the wording of Article 13 of the basic anti-dumping regulation and Article 23 of the basic anti-subsidy regulation goes back to the anti-dumping and anti-subsidy regulations that preceded the current regulations, which were, respectively, Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1) and Council Regulation (EC) No 2026/97 of 6 October 1997 on protection against subsidized imports from countries not members of the European Community (OJ 1997 L 288, p. 1).

112    Accordingly, the fact that the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation and the second subparagraph of Article 23(3) of the basic anti-subsidy regulation were conceived and drafted at different times and in different contexts can explain the difference in their wording.

113    In any event, as pointed out in paragraph 108 above, the expression ‘inter alia’, which appears in the second subparagraph of Article 23(3) of the basic anti-subsidy regulation, can be interpreted as meaning that assembly operations may fall within the scope of that article, and that Article 13(2) of the basic anti-dumping regulation may be applied where it has been proved that anti-subsidy measures have been circumvented by means of such operations, which, moreover, is confirmed in recital 18 of the basic anti-subsidy regulation (see paragraph 39 above).

114    Next, as regards the applicant’s argument that the exclusion of assembly operations from the scope of Article 23 of the basic anti-subsidy regulation is justified by the consideration that, in essence, not excluding them would amount to applying countervailing duties to subsidies which had not been granted either by the country of origin or by the country of export, it should be stated that, in the present case, contrary to the what the applicant attempts to argue, the Commission is not seeking to countervail subsidies granted by Morocco but, having established that the glass fibre rovings benefited from a number of subsidies in China and that such rovings were assembled or completed by the applicant in Morocco in order to produce its own GFF, is extending to the GFF originating in Morocco the countervailing measures already applied to the GFF originating in China.

115    Lastly, as regards the applicant’s argument that the omission of assembly operations from the second subparagraph of Article 23(3) of the basic anti-subsidy regulation is justified by the fact that, without that omission, it would be impossible to apply the parts and value added tests correctly, it is sufficient to state, as the Commission has done, that the applicant has not explained, either in its pleadings or at the hearing, how the subsidies granted for the parts in the country of origin might appreciably diminish their value and render ineffective the threshold of 60% of the total value of the parts.

116    It must therefore be held that the Commission did not make a manifest error of assessment or infringe Article 23(3) of the basic anti-subsidy regulation in including assembly operations within the scope of that provision and in referring to the conditions laid down in Article 13(2) of the basic anti-dumping regulation for the purposes of determining whether, in the present case, circumvention of the countervailing measures in force was taking place.

117    Accordingly, the first part of the fourth plea must be rejected, and it is unnecessary to adjudicate on the applicant’s request for a measure of organisation of procedure (see paragraph 101 above).

(b)    The second part of the fourth plea, alleging manifest errors of assessment, infringement of Article 23(3) of the basic anti-subsidy regulation and infringement of the right to good administration, in that the Commission found that the manufacturing process implemented by the applicant in Morocco constituted an assembly operation

118    The applicant, as with the intervener in support of the applicant, challenges the Commission’s conclusion in recitals 76, 77 and 79 of the contested implementing regulation that its GFF are produced in Morocco from glass fibre rovings – all of which are purchased from its parent company in China – by the sewing-knitting process, namely a completion operation that falls within the concept of assembly operations within the meaning of Article 13 of the basic anti-dumping regulation.

119    In that regard, the applicant puts forward, as a preliminary point, explanations regarding the nature of the production process and regarding the other activities undertaken in Morocco. In particular, it states that the GFF are manufactured in Morocco through a sewing-knitting process from uncoloured rovings, rovings and GFF being two distinct products, with a different composition, properties and end-uses, corresponding to two entirely different industries; the production process for GFF requires numerous steps that must be carefully designed and calibrated in order to achieve the characteristics needed based on the specific uses of GFF; the production of GFF is subject to audits in respect of design, product certification, plant and machinery and is subject to sample testing in order to meet the stringent requirements of customers since, in practical terms, the GFF are tailor-made to each customer’s requirements; the production of GFF requires specialised equipment and expertise, and special training, which take it beyond a mere assembly operation and which are essential in the light of the specific uses of GFF; and the complexity of the GFF manufacturing process is evidenced by the list of serious defects which would make GFF unusable by customers.

120    Thus, according to the applicant, the Commission erred, in recital 79 of the contested implementing regulation, in defining the process of producing the GFF in Morocco and the related activities as a completion operation that fell within the concept of assembly operations within the meaning of Article 13 of the basic anti-dumping regulation. The applicant considers that, although the two concepts should not be confused, that manufacturing process is neither an assembly operation, nor a completion operation.

121    In that regard, first, the applicant submits that the Commission erred in equating the concept of an ‘assembly operation’ with that of a ‘completion operation’. According to the applicant, these are different concepts, since, in the basic anti-dumping regulation where they are mentioned, they are separated by the conjunction ‘or’, which indicates an alternative. Thus, there is no basis for concluding that the definition contained in Article 13(2) of that regulation applies to both assembly operations and completion operations without distinction.

122    Second, the applicant submits that, given that an ‘assembly’ means ‘the process of putting together the parts of [a] machine or structure’, the process of producing GFF in Morocco and the related activities went far beyond the mere putting together of parts and, thus, cannot be classified as an ‘assembly operation’.

123    Third, according to the applicant, even if Article 13(2) of the basic anti-dumping regulation applied to completion operations, the Commission was wrong to find, in the contested implementing regulation, that the operations carried out by the applicant constituted completion operations, namely operations by which something is finished. The applicant emphasises that it does not merely finish the transformation of rovings into GFF. It states that, on the contrary, it creates an entirely new product from the rovings – a product with different physical and technical characteristics, end-uses and tariff classifications. In particular, the process of producing GFF in Morocco can be compared to the similar, yet more simple, process of manufacturing cotton fabrics from cotton yarn. Rovings are sewn and woven in a similar way to cotton yarns in the manufacturing of cotton fabrics. Just as cotton fabrics are not merely ‘completed’ cotton yarn, GFF are not merely ‘completed’ rovings, but the result of a complex manufacturing process which requires specialised equipment and expertise. Furthermore, the fundamentally different nature of ‘rovings’ and ‘GFF’ has been acknowledged both by the Union industry, in the 2019 anti-dumping complaint concerning imports of GFF from China and Egypt, and by the Commission itself, through the imposition of trade defence measures in respect of rovings and GFF.

124    The Commission, as with the intervener in support of the Commission, disputes the applicant’s arguments.

125    In the present case, in recital 76 of the contested implementing regulation, the Commission noted that ‘the main raw material to produce GFF is glass fibre rovings’, that ‘[the applicant] purchased 100% of the glass fibre rovings it used from its related parent company in China’, that ‘through the sewing-knitting process carried out, which is a completion operation in Morocco, these glass fibre rovings were transformed into GFF’, and that ‘according to the [information submitted by the applicant], the glass fibre rovings constitute almost 100% of the total value of the parts of the assembled [or] completed product in the sense of Article 13(2)(b) of the basic [anti-dumping regulation]’.

126    The Commission therefore concluded, in recital 77 of the contested implementing regulation, that ‘the process taking place in Morocco is a completion operation (assembly operation) and that the 60% criterion set out in Article 13(2)(b) of the basic [anti-dumping regulation] – applied by analogy in view of the wording of Article 23(3) of the basic [anti-subsidy regulation], as explained in recital (33) [of the contested implementing regulation] – was met.’

127    In addition, in recital 79 of the contested implementing regulation, the Commission stated that ‘the practice described in recital (76) above can be characterised as a completion operation that falls within the concept of assembly operations under Article 13 of the basic [anti-dumping regulation]’.

128    Furthermore, it should be noted that, according to the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation, ‘the practice, process or work referred to in the third subparagraph [and capable of constituting circumvention] includes, inter alia … in the circumstances indicated in paragraph 2, the assembly of parts by an assembly operation in the Union or a third country.’

129    According to Article 13(2)(b) of the basic anti-dumping regulation, ‘an assembly operation in the Union or a third country shall be considered to circumvent the measures in force where … the parts constitute 60% or more of the total value of the parts of the assembled product, except that in no case shall circumvention be considered to be taking place where the value added to the parts brought in, during the assembly or completion operation, is greater than 25% of the manufacturing cost’.

130    In the present case, it is necessary to determine whether the concept of ‘assembly operations’ must, as the Commission and the intervener in support of the Commission argue, be given a broad interpretation capable of covering completion operations, or, as the applicant submits, be given a narrow interpretation to the effect that completion operations do not fall within the concept of ‘assembly operations’.

131    In that regard, it should be noted that, as the Commission submits, the basic anti-dumping regulation does not define the concepts of ‘assembly operations’, or ‘completion operations’. Similarly, it does not state whether ‘completion operations’ are included within the scope of ‘assembly operations’.

132    According to settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgment of 12 September 2019, Commission v Kolachi Raj Industrial, C‑709/17 P, EU:C:2019:717, paragraph 82 and the case-law cited).

133    As regards the context, it should be observed that, unlike assembly operations, completion operations are not a practice, process or work, listed in the fourth subparagraph of Article 13(1) of the basic anti-dumping regulation, that are capable of constituting circumvention within the meaning of the third subparagraph of Article 13(1) of that regulation.

134    However, the concept of ‘completion’ – which, as confirmed at the hearing, is an autonomous concept specific to the EU anti-circumvention legislation, appears in Article 13(2)(b) of the basic anti-dumping regulation, under which circumvention is excluded ‘where the value added to the parts brought in, during the assembly or completion operation, is greater than 25% of the manufacturing cost’. Furthermore, in that regard, it should be noted that there is no reference to completion operations in any other provision of the basic anti-dumping regulation.

135    The reference to completion in Article 13(2)(b) of the basic anti-dumping regulation, namely in the part of that provision that specifies the conditions under which an assembly operation is to be regarded as circumventing the measures in force, militates in favour of the argument, put forward by the Commission, that completion operations fall within the scope of Article 13(2) of that regulation. Completion operations can be regarded as a type of assembly operations.

136    First, that interpretation is consistent with the underlying objective of EU anti-circumvention legislation, which is to ensure the effectiveness of anti-subsidy measures adopted by the European Union and to prevent circumvention of those measures (see paragraph 42 above). Second, it is supported by the fact that, as follows from the Court’s case-law, the intention of the legislature was to leave a broad margin of discretion to the EU institutions as regards the definition of circumvention operations (see, to that effect, judgment of 4 September 2014, Simon, Evers & Co., C‑21/13, EU:C:2014:2154, paragraph 48).

137    Furthermore, that interpretation cannot be called into question by the applicant’s submission that, since ‘assembly’ and ‘completion’ are different concepts, both being mentioned in the basic anti-dumping regulation and separated by the conjunction ‘or’, the concept of ‘completion operation’ cannot be equated with ‘assembly operation’. While those two concepts are indeed different, as the use of the conjunction ‘or’ confirms (see, to that effect, judgment of 17 May 2013, Trelleborg Industrie and Trelleborg v Commission, T‑147/09 and T‑148/09, EU:T:2013:259, paragraph 83), that does not, however, mean that it is impossible to regard the concept of ‘completion’ as capable of being included within the concept of ‘assembly’ and, accordingly, to accept that completion operations may come under assembly operations within the meaning of Article 13(2) of that regulation. Furthermore, according to the case-law, there are a variety of operations which may be described as ‘assembly’ (judgment of 13 December 1989, Brother International, C‑26/88, EU:C:1989:637, paragraph 20).

138    Accordingly, it must be held that Article 13 of the basic anti-dumping regulation applies to both assembly operations and completion operations, the latter being a category of the former.

139    That being so, it is necessary to establish whether, in the present case, the sewing-knitting process carried out by the applicant in Morocco can be classified, as stated in recitals 76, 77 and 79 of the contested implementing regulation, as ‘a completion operation that falls within the concept of assembly operations under Article 13 of the basic [anti-dumping regulation]’ (see paragraphs 125 to 127 above).

140    The applicant challenges that classification. In that regard, as stated in paragraph 122 above, it submits that the process of producing GFF in Morocco and the related activities go far beyond the mere putting together of parts (or assembly) and completion operations. In particular, it states, first of all, that, it does not merely complete the transformation of rovings into GFF but creates an entirely new product from the rovings – a product with different physical and technical characteristics, end-uses and tariff classifications. Next, it submits that GFF are not merely ‘completed’ rovings, but the result of a complex manufacturing process, consisting of several stages, which requires specialised equipment and expertise as well as specific training. Lastly, the list of serious defects that would make GFF unusable demonstrates the complexity of the manufacturing process, and GFF are manufactured to order according to the requirements of the individual customer.

141    First of all, it must be noted that the basic anti-dumping regulation does not lay down any general criterion based on the process not being intrinsically complex in order for an assembly operation to constitute circumvention as referred to in the third subparagraph of Article 13(1) of that regulation. The circumstances in which an assembly operation carried out in the European Union or in a third country is regarded as circumventing the measures in force are described in Article 13(2) of that regulation, which refers to the proportion of parts originating in the country subject to measures and the value added to those parts by the operation in question.

142    Accordingly, as the Commission rightly states, even if the circumstances relied on by the applicant were established, namely that GFF are new products with different physical and technical characteristics, end-uses and tariff classifications, and are the result of a complex manufacturing process, consisting of several stages, which requires specialised equipment and expertise as well as specific training, those circumstances have no impact on the classification of the process of producing GFF in Morocco as an assembly or completion operation. The same applies to the fact that GFF have different uses in various industrial sectors, that there is a very long list of potential flaws capable of rendering them unusable by customers, and that they are made to order according to the requirements of the individual customer – who, moreover, carries out a detailed design and certification audit.

143    Accordingly, the Commission did not make a manifest error of assessment or infringe Article 13(1) and (2) of the basic anti-dumping regulation in analysing the operations undertaken by the applicant in Morocco through the prism of ‘completion’ rather than ‘assembly’, and in finding that those operations were completion operations. Lastly, the matters put forward by the applicant do not support a finding that the right to good administration was infringed.

144    The second part of the fourth plea must therefore be rejected as unfounded.

(c)    The third part of the fourth plea, alleging manifest errors of assessment, infringement of Article 23(3) of the basic anti-subsidy regulation, infringement of the right to good administration and infringement of the principles of non-discrimination and equal treatment in the assessment of the threshold of the value added by the assembly operations

145    In support of the third part of the fourth plea, the applicant puts forward, in essence, three complaints.

146    By the first complaint, the applicant submits that the contested implementing regulation is based on manifest errors of assessment and infringes Article 23(3) of the basic anti-subsidy regulation in that, in assessing the threshold of the value added to the parts brought in within the meaning of Article 13(2)(b) of the basic anti-dumping regulation, it adjusts the applicant’s fixed costs, in particular its depreciation and rental costs, on the basis of the level of capacity utilisation.

147    In the first place, the applicant submits that the adjustment made to the fixed costs to reflect capacity utilisation is not permitted in law and is factually flawed.

148    The applicant argues that there is no legal provision allowing the Commission to adjust the fixed costs depending on the level of capacity utilisation. More specifically, according to the applicant, it does not make sense to adjust the fixed costs on the basis of capacity utilisation, since fixed costs – by definition – do not depend on production quantities or capacity utilisations. Thus, the adjustment made by the Commission is contrary to the well-recognised accounting definition of ‘fixed costs’ and distorts the calculation of the value added.

149    In the reply, the applicant also challenges the Commission’s proposed interpretation of the concept of ‘value added’ in view of the context and purpose of Article 13(2)(b) of the basic anti-dumping regulation. First of all, it submits that that concept relates to the concept of manufacturing ‘cost’, to which reference is made in the same sentence of that provision. Given that the latter concept is defined in Article 2 of the basic anti-dumping regulation, a reference to costs in the context of Article 13(2)(b) of that regulation means that the concepts of ‘value added’ and ‘costs incurred’ are the same and that the adjustment of costs incurred, in respect of the value added, may be made only on the basis of Article 2(5) of that regulation. According to the applicant, that article does not provide for adjustment where the costs have been calculated on the basis of records that are drawn up in accordance with generally accepted accounting principles and reasonably reflect the costs associated with the production and sale of the product under consideration, even if such costs appear low or high in the light of the actual capacity utilisation level. The same prohibition applies to value added, which relates to the context of costs.

150    The applicant also argues that, on a factual level, there was no reason to adjust the fixed costs. It submits that, with such an approach, depreciation and rental costs can be taken into account at full value only if it operates at full capacity, which never happens in practice, and that depreciation costs are adjusted, on the basis that depreciation costs relating to GFF machines which were not operational for the whole of 2020 cannot be taken into consideration. It adds that the justification for adjusting the fixed costs given by the Commission in recital 84 of the contested implementing regulation is not supported by the facts because the applicant never stated that its machines had been operational for 300 days. According to the applicant, the GFF machines were depreciated only from when they were installed and solely for the period during which they were operational. The applicant submits that the depreciation costs that it reported to the Commission therefore reflect the actual period during which the GFF machines were used and depreciated.

151    In the second place, the applicant submits that there was no reason to exclude the rental costs of the ‘plant – phase 2’ from the rental costs taken into account in the calculation of the value added on the ground that that plant contained [confidential], which is the only product manufactured by the applicant. It therefore considers that, since both ‘plant – phase 1’ and ‘plant – phase 2’ were used to manufacture the product concerned, there was no reason to exclude the rental costs of ‘plant – phase 2’. According to the applicant, all the rental costs contribute to the value added to the end product.

152    In the third place, the applicant maintains that the Commission’s reasons for rejecting the three other methods that it had put forward for calculating the value added were flawed. In particular, it submits that the rejection of the first method, for the reasons set out in recital 86 of the contested implementing regulation, was based on a manifest error of assessment. In that regard, the applicant states that it explained why March had not initially been reported as the first month of production. Thus, the Commission had no basis for calling into question the data provided by the applicant. As regards the second and third methods, the applicant submits that the capacity utilisation rate of [confidential] used by the Commission was determined on the basis of its overall capacity, taking into account all the GFF machines and in particular those which were not operational at any time in 2020. Hence, according to the applicant, that figure is actually less representative of the capacity utilisation rate for the full year 2020. The applicant therefore submits that the Commission could not reject the approaches that the applicant had proposed on the ground that they were not representative of the capacity utilisation rate for the full year 2020 without invalidating its own method.

153    By the second complaint, the applicant submits that the adjustment to fixed costs to reflect capacity utilisation, by using [confidential] of the depreciation and rental costs for ‘plant – phase 1’, is discriminatory. In essence, it complains that the Commission discriminated against it, but not against the Union industry, in that it did not adjust the production costs of the Union industry when calculating the target price in the initial investigation, even though the Union industry had a low capacity utilisation rate during the investigation period.

154    By the third complaint, the applicant submits that the contested regulation infringes its right to good administration, in that it fails to examine carefully and impartially all the relevant aspects of the case and adjusts the costs without taking into account the explanations provided by the applicant in relation to the use of the machines and the rental costs.

155    The Commission, as with the intervener in support of the Commission, disputes the applicant’s arguments.

156    In essence, the third part of the fourth plea concerns the determination of the value added to the parts brought in during the assembly or completion operation, within the meaning of Article 13(2)(b) of the basic anti-dumping regulation.

157    Article 13(2)(b) of the basic anti-dumping regulation provides that ‘in no case shall circumvention be considered to be taking place where the value added to the parts brought in, during the assembly or completion operation, is greater than 25% of the manufacturing cost’.

158    Before turning to examine the three complaints raised by the applicant in support of the third part of the fourth plea, it is necessary to set out the relevant recitals of the contested implementing regulation.

(1)    The calculation of the value added in the contested implementing regulation

159    In recital 80 of the contested implementing regulation, the Commission observed that, according to the applicant, ‘its value added cost [was] above the threshold of 25%’. It stated, in that regard, that ‘the two main cost items in the calculation of the added value were the depreciation cost and the rental cost, which were part of the financial data of the reporting period submitted by [the applicant] in its exemption claim form’.

(i)    The depreciation cost

160    As regards the depreciation cost, as is apparent from recital 81 of the contested implementing regulation, the applicant claimed that ‘there were less than ten GFF-machines installed at its premises, and that each of these GFF-machines had been running for 300 out of the 360 days during 2020’. Thus, ‘[the undertaking] calculated the depreciation amount for the reporting period on the basis of three elements, namely the acquisition value, 9.5% as a depreciation percentage to take into account the estimated useful life[, and] the abovementioned 300 running days on a total of 360 days’.

161    It is apparent from recital 82 of the contested implementing regulation that the Commission disagreed with the way in which the applicant had calculated the depreciation cost for the purposes of calculating the value added within the meaning of Article 13(2)(b) of the basic anti-dumping regulation.

162    In that regard, recital 82 of the contested implementing regulation states as follows:

‘Using 300 days as an element to calculate the depreciation amount may be acceptable according to the international accounting standards, but led to an overstatement of the calculated depreciation amount in the framework of the value-added calculation by [the applicant] for various reasons. First, … the capacity utilisation (actual production in kg divided by the actual production capacity in kg) of the GFF-machines was low in the year 2020. Given the low production capacity utilisation the reported depreciation cost was therefore found to have been overstated. Second, four of the GFF-machines were only shipped in November 2019 from Shanghai to [Tangier] and could not have been running during 300 days in 2020, taking into consideration the shipment time between Shanghai and [Tangier], as well as the period required for unloading, installing and testing each of these 4 GFF machines. Third, [the applicant] claimed in its exemption claim form that the production only started in April 2020. If this were to be true, the total running time for each of the installed GFF-machines could only be at a maximum 270 days (from April 2020 to December 2020), without even taking into account any non-operational time caused by stoppages, as a result of required maintenance, days off, and holidays. As a result, the Commission concluded that the depreciation cost to be taken into account for the calculation of the value added cost should be significantly lower than the depreciation cost as calculated by [the applicant]’.

163    It is apparent from recitals 85 and 86 of the contested implementing regulation that the Commission also rejected the three other methods referred to below, proposed by the PGTEX Group, namely:

–        the method to adjust the capacity to reflect those months during which the relevant GFF machines had not been operational;

–        the method to use only the cost data of December 2020, namely the month of the investigation period in which most GFF machines were operational, except for machine [confidential];

–        the method to use the cost data of the period July to December 2020, since [confidential].

164    In particular, recital 86 of the contested implementing regulation states the following:

–        ‘The month of March 2020 was not mentioned by [the applicant] as a month of production in Annex 7.2. of the letter of 12 October 2021. [It] stated for the first time on 12 October 2021 that there had been production in March 2020, but that this production in March 2020 was only booked in its production data for the month of April 2020. This means that the Commission could not exclude other errors and/or delays in booking the monthly production. …

–        Using the cost data of December 2020 only could not be accepted either as the capacity utilisation rate for the month of December 2020 was not representative for the capacity utilisation rate for the full year 2020;

–        Using the cost data for the period July – December 2020 could not be accepted either for the same reason as mentioned under the second proposed alternative[: the] capacity utilisation rate for the period July – December 2020 was not representative for the capacity utilisation rate for the full year 2020.’

165    Accordingly, in recital 86 of the contested implementing regulation, the Commission concluded that ‘the capacity utilisation rate over the full year of 2020 was the most appropriate indicator to reduce the fully booked depreciation rate in a reasonable way in the framework of the value-added calculation.’

(ii) The rental cost

166    As regards the rental cost, in recital 91 of the contested implementing regulation, the Commission stated the following:

‘[The applicant] did not provide its rental contracts in its reply in the exemption claim form, despite the important rental costs it incurred in 2020. In its exemption claim form, it informed the Commission that it had installed all its GFF-machines at one location (plant – phase 1). It initially stated that it only rented this one plant as it stated that it “only has one production site”, despite the question in the exemption claim form to provide the addresses of all its production sites. Subsequently, [the applicant], however, provided two rental contracts [in its] reply to the deficiency letter …, indicating that [it] rented two separate premises from two different property owners during the reporting period. Since [the applicant] had claimed previously in its exemption claim form that the GFF-machines, which were operational during 2020, were only installed in one of these two rented plants, the rental amounts incurred in 2020 for the second plant (plant – phase 2) should have been excluded from the rental cost and value added cost. In addition, because of the low capacity utilisation, the Commission, in its value added cost calculation, could also not accept the total rental cost for the plant – phase 1 as it was not fully used due to the fact that the GFF-machines were not producing in the first quarter of 2020 and not running at full capacity during the other quarters of 2020. The total rental cost as reported was not accepted by the Commission because of the above reasons.’

167    Before the Commission, the PGTEX Group argued that the Commission had committed manifest errors of assessment and acted in breach of Article 13(2) of the basic anti-dumping regulation in that it had not taken into account the full rental cost (recital 92 of the contested implementing regulation).

168    However, as is apparent from recital 93 of the contested implementing regulation, ‘the Commission rejected this claim, on the basis of the following statements that had been made by the PGTEX Group in the course of the investigation’. That recital states the following:

‘First, in its reply to the deficiency letter, the PGTEX Group only referred to the plant – phase 1 for its [confidential]. Second, in its reply to the deficiency letter, [it] stated that its GFF machines, which were running in 2020, were all located in plant – phase 1. Consequently, the Commission deducted that none of these machines, which were operational in 2020, were located in plant – phase 2. This was also corroborated by other statements of [that Group] in its deficiency reply.’

169    Accordingly, in recital 94 of the contested implementing regulation, the Commission concluded that ‘by adjusting the reported depreciation cost and rental cost, taking into consideration the issues explained above, the average value added thus established during the reporting period was found to be below the 25% threshold set by Article 13(2)(b) of the basic [anti-dumping regulation]’ and that ‘some other cost items were found to be overstated as well, but were not adjusted as such adjustments should only have led to an even lower percentage of value added.’

(2)    The first complaint, alleging manifest errors of assessment and breach of Article 13(2)(b) of the basic anti-dumping regulation

170    The first complaint gives rise, in essence, to a preliminary point as to how the value added referred to in Article 13(2)(b) of the basic anti-dumping regulation is to be determined, and whether, in order to determine it, the Commission must take into account the costs as recorded by the undertaking carrying out assembly or completion operations, or whether the Commission can adjust those costs by taking into account the undertaking’s actual production capacity.

171    In that regard, it should be noted that the basic anti-dumping regulation does not contain any definition of ‘value added’.

172    In the present case, while the parties agree on defining the value added referred to in Article 13(2)(b) of the basic anti-dumping regulation as being the value incorporated into the goods produced following the assembly or completion operation, they disagree on whether or not that concept is the same as, or differs from, the concept of ‘costs incurred’ or ‘costs recorded’. In particular, although the applicant submits that the concept of ‘value added’ is the same as the concept of ‘costs incurred’, and that the adjustment of costs incurred in respect of the value added may be made only on the basis of the grounds set out in Article 2(5) of the basic anti-dumping regulation, which, however, does not provide for adjustment on the basis of the production capacity utilisation rate, the Commission contends, in contrast, that the concept of ‘value added’ differs from the concept of ‘costs incurred’, and that both the objective and wording of Article 13(2)(b) of that regulation require that the fixed costs as recorded are adjusted for the purposes of assessing the value added to the parts brought in, in particular where the capacity utilisation rate is especially low.

173    As stated in paragraph 132 above, according to settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part (see judgment of 12 September 2019, Commission v Kolachi Raj Industrial, C‑709/17 P, EU:C:2019:717, paragraph 82 and the case-law cited).

174    In the present case, it follows from Article 13(2)(b) of the basic anti-dumping regulation that the Commission is required to assess whether ‘the value added to the parts brought in, during the assembly or completion operation, is greater than 25% of the manufacturing cost’.

175    The fact that the word ‘cost’ appears in the same sentence of Article 13(2)(b) of the basic anti-dumping regulation as value added is not a sufficient basis for concluding that, as the applicant claims, the concepts of ‘value added’ and ‘costs incurred’ are the same, and that the manufacturing costs to be used in calculating the value added within the meaning of that provision can be adjusted only on the grounds referred to, and under the conditions laid down, in Article 2(5) of that regulation.

176    First, the interpretation proposed by the applicant ignores the fact that while, by means of Article 2(5) of the basic anti-dumping regulation, the European Union intended to implement the particular obligations laid down by Article 2.2.1.1 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (‘GATT’) (OJ 1994 L 336. p. 103) (see, to that effect, judgment of 7 February 2013, Acron v Council, T‑118/10, not published, EU:T:2013:67, paragraph 66), the EU legislation on circumvention, set out in Article 13 of that regulation, is not, however, based on that agreement, and must therefore be regarded as a specific regulatory framework in EU law.

177    Thus, any justification for interpreting Article 13(2)(b) of the basic anti-dumping regulation in the light of other provisions of that regulation, such as Article 2(5) thereof, which is a transposition into EU law of the particular obligations set out in the Agreement on Implementation of Article VI of the GATT, cannot be based on the mere fact that the expression ‘manufacturing cost’ appears in the same sentence as the expression ‘value added’.

178    Second, the interpretation proposed by the applicant is not consistent with the underlying objective of the anti-circumvention legislation enshrined in Article 23 of the basic anti-subsidy regulation, which is to ensure the effectiveness of countervailing measures adopted by the European Union and to prevent circumvention of those measures (see paragraph 42 above). In a situation such as that of the applicant in the present case, whose depreciation cost was calculated and recorded on the basis that all [confidential] GFF machines had been operating at their theoretical maximum capacity throughout the reporting period, namely the year 2020, even though, in reality, the GFF machines had been operating at only [confidential] of their capacity during that period, not all of the recorded depreciation cost translates into value added to the parts brought in. Accordingly, if the possibility of adjusting depreciation costs, in order to reflect the low capacity utilisation of the machines, were excluded, this would ultimately enable the undertaking to inflate the value added to the parts brought in. A machine that stands idle generates a depreciation cost which is recorded, but does not add any value to the parts brought in during the assembly or completion operation.

179    Accordingly, the context and objective of Article 13 of the basic anti-dumping regulation require that the calculation of the value added takes into account only those costs which relate to the actual production of GFF, or only the depreciation and rental costs which relate to the operation of the machines that were actually used to produce the parts actually brought in during the reporting period.

180    That being so, it is necessary to determine whether the adjustment of the depreciation and rental costs as made by the Commission in the present case is vitiated by a manifest error of assessment.

181    As the applicant stated at the hearing, it complains that the Commission adjusted the depreciation and rental costs that it had reported to the Commission by applying a capacity utilisation rate of [confidential] for the whole of the year 2020.

182    According to the applicant, although the purpose of the adjustment made to the depreciation and rental costs by the Commission was to reflect the actual usage of the GFF machines, the rate used did not meet that purpose, because it had been determined on the basis of the theoretical maximum capacity of all the GFF machines, including those which were not in service. The applicant therefore considers that, if the Commission wished to adjust the costs, it should have made use of the other methods of calculating the depreciation costs that the applicant had put forward to it, and in particular the first of those methods, in which it proposed, in essence, that the costs should be adjusted by reference to the number of months of the reporting period during which each GFF machine had actually been used.

183    In that regard, in the first place, it should be noted that, as stated in paragraph 54 above, according to the case-law, in the sphere of the common commercial policy and, most particularly, in the realm of measures to protect trade, the EU institutions enjoy a broad discretion by reason of the complexity of the economic, political and legal situations which they have to examine. The judicial review of such an appraisal must therefore be limited to verifying whether the procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated, and whether there has been a manifest error in the appraisal of those facts or a misuse of powers.

184    In the second place, as is apparent from recital 81 of the contested implementing regulation (see paragraph 160 above), the depreciation cost that the applicant reported to the Commission was based on the theoretical maximum capacity of its machines. In that regard, it must be stated that, although the applicant claims, in the application, that the depreciation cost that it reported to the Commission reflects the actual period during which the GFF machines were used and depreciated, it has not produced anything that might support that claim. Moreover, certain elements in the file contradict such a claim. First, that claim does not appear very credible in the light of the statement set out in the response to the Article 28 letter, to the effect that the applicant ‘did not keep a record of the number of days that the GFF machines [were] operational’. Second, that statement is contradicted by the applicant itself, since, in the application, the applicant admits that the fixed costs that it actually incurred during the year 2020 in respect of the production of GFF ‘are kept based on the local generally accepted accounting principles’ and that ‘this is not challenged by the [Commission], which acknowledges that “using 300 days as an element to calculate the depreciation amount may be acceptable according to the international accounting standards”’.

185    In the third place, as the Commission submits, depreciation costs calculated on the basis of all [confidential] GFF machines operating at their theoretical maximum capacity for the entire duration of the reporting period could be regarded as value added to the parts brought in only if the machines had actually operated at their theoretical maximum capacity for the entirety of that period, which, in the present case, they did not, for the reasons set out in recital 82 of the contested implementing regulation (see paragraph 162 above) and, in particular, because that period corresponded to a start-up phase for the applicant’s production site.

186    The Commission thus took the view that the depreciation and rental costs reported by the applicant were not a credible reflection of the value added to the parts brought in, and adjusted those costs. For that purpose it used the capacity utilisation rate as reported by the applicant and not disputed by the latter (recitals 84 and 86 of the contested implementing regulation).

187    Contrary to what the applicant claims, and as the Commission rightly observes, given that both the depreciation cost calculated by the applicant using the theoretical maximum capacity, and the capacity utilisation, were calculated based on the same number of GFF machines, as if the latter had been in operation for the entire reporting period, using one to adjust the other is not a mistake of fact.

188    Furthermore, the three other methods of calculating the value added that the applicant proposed to the Commission would not have provided a more accurate reflection of the value added to the parts brought in.

189    In that regard, it is sufficient to observe that, by the first method of calculating the value added, the applicant proposed to the Commission that the depreciation costs, calculated on the basis of a maximum operating period of twelve months, be adjusted by taking into account the number of months in which each machine was actually operational during the year 2020. In order for that method to provide an accurate reflection of the value actually added to the parts brought in, the depreciation costs would have to be calculated on the basis of the number of months of actual use of the machines – and not on the basis of twelve months, as in the calculation proposed by the applicant – which, moreover, requires the number of months of actual use to be known.

190    However, it is apparent from the first indent of recital 86 of the contested implementing regulation, and from the file, that the March 2020 production was recorded by the applicant only in its production figures for April 2020. Hence, the monthly production figures for April do not reflect the actual production in that month, since part of the production recorded for April actually took place in March.

191    Thus, since the monthly production figures provided by the applicant do not provide a reliable indication of the months of the reporting period during which the GFF machines were actually used, the Commission was right to reject the first method that had been proposed to it for the calculation of the value added.

192    As regards the second method for calculating the value added, which uses the cost data for December 2020, and the third method, which uses the cost data for the period between July and December 2020, it must be pointed out that, since the Commission clearly stated that the investigation covered the whole of the calendar year 2020, which was defined as the reporting period, a reliance on 1 month (namely December) or on a period of 6 months (namely July to December 2020) would not be representative of the operations carried out during the twelve months of 2020, and would not bridge the gap between the way in which the depreciation costs were calculated for 1 or 6 months, on the basis of theoretical maximum capacity, and the actual productivity of the machines, namely the value added to the parts brought in.

193    In view of all the considerations set out above, it must be held that the Commission did not make a manifest error of assessment, or infringe Article 13 of the basic anti-dumping regulation, by adjusting the depreciation costs as calculated by the applicant in the light of the rate of actual utilisation of capacity during the reporting period and by rejecting the three other methods of calculating the value added that had been proposed by the applicant.

194    That conclusion cannot be called into question by the applicant’s argument that there was no reason to exclude the rental costs relating to ‘plant – phase 2’ from the rental costs taken into account for the calculation of the value added (see paragraph 151 above). It must be stated that, as is apparent from recital 93 of the contested implementing regulation (see paragraph 168 above), the GFF machines that were running in 2020 were all located in ‘plant – phase 1’, and that, as the applicant acknowledged at the hearing, GFF machines were first installed in ‘plant – phase 2’ after 2020.

195    In addition, the applicant itself admits that the ‘plant – phase 2’ plan indicates the presence of [confidential]. Moreover, in that regard, the Commission stated, at the hearing, without being contradicted by the applicant, that the latter had never stated that GFF had actually been [confidential].

196    Accordingly, the Commission was entitled to find that no genuine production activity had taken place in ‘plant – phase 2’, and as such, that the rental costs relating to that site did not translate into value added to the parts brought in. As those costs do not relate to the actual production of GFF, for the reason stated in paragraph 179 above, those costs cannot be taken into account when calculating the value added.

197    It must therefore be held that the Commission did not make a manifest error of assessment in excluding the rental costs relating to ‘plant – phase 2’ from the rental costs taken into account for the calculation of the value added.

198    Accordingly, having regard to all of the foregoing, the first complaint must be rejected.

(3)    The second complaint, alleging breach of the principles of non‑discrimination and equal treatment

199    The applicant submits, in essence, that the fixed costs adjustment that was made by the Commission in order to reflect capacity utilisation, using [confidential] of the depreciation and rental costs relating to ‘plant – phase 1’, is discriminatory in comparison with what the Commission does in the anti-subsidy investigation, when calculating the injury margin for the Union industry (see paragraph 153 above).

200    In that regard, it must be noted, as a preliminary point, that, according to settled case-law, the principle of equality and non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (see judgment of 13 December 2007, Asda Stores, C‑372/06, EU:C:2007:787, paragraph 62 and the case-law cited).

201    In the present case, according to the applicant, the Commission discriminated between it and the Union industry in that, when it calculated the injury margin, on the basis of the target price, in the anti-subsidy investigation, it did not make any adjustment to the Union industry’s production costs, despite finding that the production capacity utilisation rate was low, whereas, in the contested implementing regulation, the Commission did make such an adjustment when it calculated the value added.

202    In that regard, it should be noted that the use of the cost of production for the calculation of the margin of injury suffered by the Union industry due to subsidised imports and the use of the cost of production for the calculation of the value added to the parts brought in during an assembly or completion operation, within the meaning of Article 13(2)(b) of the basic anti-dumping regulation, in order to establish whether circumvention of anti-subsidy measures is taking place, differ in context and purpose, and, accordingly, in order for the present complaint to be properly supported, the applicant would have needed to explain how the Commission, by using those costs in a different way, had infringed the principles of non-discrimination and equal treatment. However, the applicant, by simply asserting, in essence, that there was no justification for taking one approach to the situation of the Union industry in the anti-subsidy investigation and another approach to the applicant’s own situation in the anti-circumvention investigation, and that the cost referred to in the basic anti-dumping regulation was a cost that could be defined only in a uniform manner, has not provided a sufficient explanation in that regard.

203    Accordingly, the second complaint must be rejected.

(4)    The third complaint, alleging infringement of the right to good administration

204    As regards the third complaint, it follows from the analysis of the other complaints in paragraphs 170 to 203 above that, contrary to what the applicant claims, the Commission did carefully and impartially examine all the relevant aspects of the case and, when it adjusted the costs, did take into account the explanations that the applicant had provided in relation to the use of the machines and the rental costs.

205    Accordingly, the third complaint must be rejected.

(d)    Conclusion

206    As all the complaints raised by the applicant in support of the third part of the fourth plea have been rejected, the third part of that plea and, accordingly, the fourth plea as a whole, must be rejected.

4.      The merits of the fifth plea, alleging manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation in that the Commission found that the GFF exported from Morocco to the European Union still benefited from the subsidies granted to Chinese GFF producers

207    The applicant challenges, in essence, the statements made by the Commission in recitals 102 to 105 of the contested implementing regulation, relating to the assessment of the fourth condition required for a finding of circumvention (see paragraph 50 above), namely whether, in accordance with Article 23(3) of the basic anti-subsidy regulation, ‘the imported like product [or] parts thereof still benefit from the subsidy’.

208    To that end, in the first place the applicant submits that Implementing Regulation 2020/776, which is referred to by the Commission in recital 102 of the contested implementing regulation, relates not to the subsidisation of rovings and yarns, as supplied to the applicant by PGTEX China, but to the subsidisation of GFF, which is a different product. The determinations made in Implementing Regulation 2020/776 are thus valid only in so far as they concern GFF, and not in so far as they concern rovings and yarns. That being the case, there is no ‘subsidy’ that could have been passed through by PGTEX China to the applicant.

209    In the second place, the applicant submits that assembly operations are not covered by the basic anti-subsidy regulation since they cannot give rise to a subsidy granted by the country of origin or export that continues to benefit the product to which the alleged circumvention relates. That is because any subsidy that could be countervailed would need to be granted by the country in which the assembly operations take place (in this case, the Kingdom of Morocco) or from which the assembled products are exported (in this case, also the Kingdom of Morocco). The question of whether or not ‘Article 23(3) of the basic [anti-subsidy regulation] also covers assembly operations’ is irrelevant, the applicant submits, as subsidies can be countervailed only if they have been granted by the country of origin or export.

210    In the third place, the applicant submits that there is no legal basis for a finding that a pass-through of subsidies between related parties can be legally presumed. The use, in the contested implementing regulation, of the report of the Appellate Body of the World Trade Organisation (WTO) of 19 January 2004, in the case ‘United States – Final Countervailing Duty Determination with respect to certain Softwood Lumber from Canada’ (WT/DS257/AB/R) (‘the WTO Appellate Body report’) does not provide an adequate basis for that presumption. According to the applicant, that report relates to a specific situation in which the benefit flowing from a subsidised input is passed through to the processed product. That is a completely different situation from that of the GFF, in relation to which there is no evidence that the input (namely rovings) is subsidised.

211    Furthermore, according to the applicant, the Commission’s reading of the WTO Appellate Body report is incomplete, in that the report states that ‘where the input producers and producers of the processed products operate at arm’s length, the pass-through of input subsidy benefits from the direct recipients to the indirect recipients downstream cannot simply be presumed; it must be established by the investigating authority’. The applicant states that, in the present case, the purchases that it made from PGTEX China and the purchase that PGTEX China made from CPIC were at arm’s length, and that it has clearly demonstrated that that was the case.

212    Lastly, the applicant submits that the allegation that ‘PGTEX China charged lower prices to [the applicant] than to other customers during the investigation period’ is not supported by the facts of the anti-circumvention investigation. There is also no support for the allegation that a pass-through could have occurred through means other than via the level of prices of input material, such as charging management fees. The Commission’s allegations are therefore purely theoretical.

213    The Commission, as with the intervener in support of the Commission, disputes the applicant’s arguments.

214    As a preliminary point, it should be noted that, in recitals 102 to 105 of the contested implementing regulation, the Commission stated the following:

‘As set out in Implementing Regulation (EU) 2020/776, Chinese exporting producers were found to benefit from a number of subsidy schemes by the [Chinese Government] as well as regional and local governments in China. In this respect, PGTEX China and CPIC were found to benefit also from a number of subsidy schemes such as preferential interests on loans, grant programmes, and tax benefits.

No new information became available in this investigation that would question the conclusion from the initial subsidy investigation that such subsidy schemes were no longer valid.

PGTEX China is the parent company of [the applicant], whereby the latter company purchased 100% of the glass fibre rovings it used from its related parent company PGTEX China, which on its turn bought them from CPIC, the manufacturer of these glass fibre rovings.

A pass-through of subsidies between related parties can be legally presumed, in particular when the related downstream company was assembling and exporting the final product to the Union. In this case, since PGTEX China and PGTEX Morocco SARL make and export GFF and they use glass fibre rovings manufactured by CPIC, the amount of countervailable subsidies granted upon them should take into account the fact that, because of their relationship, they are capable of passing through those benefits to the product concerned exported to the Union as they see fit.’

215    The Commission thus concluded, in recital 106 of the contested implementing regulation, that, in accordance with Article 23(3) of the basic anti-subsidy regulation, ‘the imported like product and/or parts thereof still benefit from the subsidy’.

216    Furthermore, in recital 107 of the contested implementing regulation, the Commission disputed the PGTEX Group’s arguments that ‘there was no evidence that imports of GFF from Morocco still benefit from subsidies granted to Chinese GFF producers’.

217    In that regard, in recital 108 of the contested implementing regulation, the Commission stated the following:

‘First, even if the [anti-subsidy investigation] was in the first place related to the subsidisation of GFF, the PGTEX Group fully cooperated during such investigation. In this respect, the … anti-subsidy investigation showed that both CPIC and PGTEX China, which are related to [the applicant], received subsidies from the Chinese Government. Second, as already mentioned in recital (33) [of the contested implementing regulation], Article 23(3) of the basic [anti-subsidy regulation] also covers other circumvention practices, which are not explicitly listed in that Article, such as assembly operations. Third, as explained in recital (105) [of that implementing regulation], a pass-through of subsidies between related parties can be legally presumed, in particular when the related downstream company was assembling and exporting the final product to the Union. Moreover, a pass-through to related companies can occur in many ways (such as by charging certain management fees), and is not necessarily limited to the level of prices of input material charged to customers. In any event, a price comparison of glass fibre rovings and yarns, based on its questionnaire reply, showed that PGTEX China charged lower prices to [the applicant] than to other customers during the investigation period.’

218    In the present case, the applicant disputes that assessment, raising, in essence, three complaints. By the first complaint, it submits that Implementing Regulation 2020/776 relates not to glass fibre rovings, but to GFF, meaning that a pass-through of the subsidy for the benefit of glass fibre rovings cannot be presumed in the present case. By the second complaint, it submits that subsidies can be countervailed only if they have been granted by the country of origin or export, a condition which was not met in the present case. By the third complaint, it submits that there is no legal basis on which a pass-through of subsidies between related parties can be legally presumed, and that, in the present case, the transactions with the applicant’s related parties in China were made at arm’s length.

219    As regards the first complaint, it should be noted that the applicant does not contest the statement in recital 102 of the contested implementing regulation that, as had been set out in Implementing Regulation 2020/776, ‘Chinese exporting producers were found to benefit from a number of subsidy schemes by the [Chinese Government] as well as regional and local governments in China’, or the statement that ‘PGTEX China and CPIC were found to benefit also from a number of subsidy schemes such as preferential interests on loans, grant programmes, and tax benefits’.

220    Nor does the applicant dispute the Commission’s argument that the findings made in Implementing Regulation 2020/776 concerning the subsidisation of GFF were used in Commission Implementing Regulation (EU) 2021/328 of 24 February 2021 imposing a definitive countervailing duty on imports of continuous filament glass fibre products originating in the People’s Republic of China following an expiry review pursuant to Article 18 of the Regulation (EU) 2016/1037 (OJ 2021 L 65, p. 1). In that regulation, the Commission made a specific finding that subsidies continued as regards all the Chinese exporting producers of glass fibre rovings, including the Chinese undertakings related to the applicant. It is apparent from recital 43 of Implementing Regulation 2021/328 that ‘the Commission was able to take the findings of [Implementing Regulation 2020/776 concerning GFF] as regards benefit, and consider that these findings were applicable to Chinese exporting producers of [continuous filament glass fibre products] during the review investigation period’. In particular, in that regard, in recital 44 of that implementing regulation, the Commission stated that ‘none of the subsidy practices investigated were linked directly to the production or export of GFF, but were rather subsidies which benefited the entire company or Group of Chinese companies [also making continuous filament glass fibre products]’ and that, accordingly, ‘in the GFF investigation[, the Commission] first determined the benefit received by the exporting producer, and then allocated that benefit over their total turnover for all products sold by the exporting producer, including [glass fibre rovings]’.

221    Furthermore, in that regard, it should be stated that the applicant has not produced any evidence seeking to challenge the Commission’s statement that the subsidies granted by the Chinese public authorities, the existence of which was stated in Implementing Regulation 2020/776, benefited all of the production of the entire PGTEX Group, whether in respect of GFF or glass fibre rovings.

222    Accordingly, the applicant cannot argue that the assessments made by the Commission in Implementing Regulation 2020/776 are valid only in so far as they concern GFF, and not glass fibre rovings.

223    As regards the second complaint, it must be noted that, as stated in paragraph 114 above, in the present case, contrary to what the applicant attempts to argue, the Commission is not seeking to countervail subsidies granted by Morocco, but to ensure that the countervailing measures imposed on subsidised Chinese imports of GFF are not circumvented, following a finding that glass fibre rovings, namely the raw material from which GFF are produced, benefited from a number of subsidies in China, and that those rovings were assembled or completed by the applicant in Morocco in order to produce GFF.

224    As regards the third complaint, it must be observed that, in recital 105 of the contested implementing regulation, the Commission stated that ‘a pass-through of subsidies between related parties can be legally presumed, in particular when the related downstream company was assembling and exporting the final product to the Union’.

225    In that regard, it should be noted that, in the contested implementing regulation, the Commission bases the legal presumption at issue, in particular, on paragraph 146 of the WTO Appellate Body report. As the Court has held, it follows from that paragraph that the investigating authority must establish that the benefit conferred by a financial contribution directly on input producers is passed through, at least in part, to producers of the processed product subject to the investigation, where input producers and downstream processors operate at arm’s length (judgment of 1 March 2023, Hengshi Egypt Fiberglass Fabrics and Jushi Egypt for Fiberglass Industry v Commission, T‑480/20, under appeal, EU:T:2023:90, paragraph 56). The Commission infers from that that pass-through of subsidies can be legally presumed in cases of related companies, in particular where the downstream company assembles the final product and exports it to the European Union.

226    In order to challenge that conclusion, first, the applicant argues, in essence, that, in the present case, there is no evidence that the raw material from which GFF are made, namely glass fibre rovings, was subsidised, and thus a pass-through of such a subsidy cannot be legally presumed. Second, it submits that it has proved that its purchases from PGTEX China and the purchases made by PGTEX China from CPIC were made at arm’s length.

227    However, first, leaving aside the issue of the relevance of the WTO Appellate Body report, it follows from the examination of the first complaint that the Commission has demonstrated, without being contradicted by the applicant, that the raw material used in the production of GFF had been subsidised (see paragraphs 219 to 222 above).

228    Second, as the Commission has stated, without being contradicted by the applicant, it is apparent from PGTEX China’s response to the pre-verification letter, annexed to the defence, that the sales prices charged to the applicant were always lower than the prices charged to unrelated customers. It is apparent from that response that ‘the [reselling] of rovings and yarns is not the main business of PGTEX China, so PGTEX China has no intention to gain the profit from such reselling, and has no necessity to determine a “market price” for such reselling’, that ‘when reselling these raw materials to [the applicant], PGTEX China adds the estimated freight expenses to the purchase prices from CPIC to determine the transfer price, because PGTEX China will be responsible for the transportation of these raw materials to Morocco’, and that ‘when reselling these raw materials to unrelated customers, because they are all occasional sales with limited quantity, the customers could accept a higher price’.

229    Accordingly, the Commission was fully entitled to apply the legal presumption of pass-through of the subsidies at issue so as to determine that the fourth condition for a finding of circumvention was met in the present case.

230    Thus, having regard to the foregoing, the applicant cannot complain that the Commission made a manifest error of assessment or infringed Article 23(3) of the basic anti-subsidy regulation in finding that the GFF exported from Morocco to the European Union continued to benefit from the subsidies granted to the Chinese producers of GFF.

231    Accordingly, the fifth plea must be rejected.

C.      The second plea in law, alleging infringement of the obligation to state reasons, infringements of the applicant’s rights of defence and the right to good administration, and alleging manifest errors of assessment and infringement of Article 28(1) and (3) of the basic anti-subsidy regulation as regards the use of the facts available

232    The second plea is divided into two parts. Under the first part, the applicant argues that, by making findings against it on the basis of the facts available, the Commission infringed the obligation to state reasons, the applicant’s rights of defence and the right to good administration. Under the second part, it argues that the contested implementing regulation is based on manifest errors of assessment and infringes Article 28(1) and (3) of the basic anti-subsidy regulation in relation to the use of the facts available.

233    In support of the first part of the second plea, the applicant puts forward, in essence, three complaints.

234    By the first complaint, the applicant submits that, in rejecting, without any explanation, the evidence that the applicant produced in its response to the Article 28 letter and in its comments on the GDD, the Commission infringed its obligation to state reasons as regards application of the facts available. In that regard, the applicant states that, despite its responses to each of the points set out in recital 38 of the contested implementing regulation, the allegations in that letter and in the GDD as well as in the contested implementing regulation remained identical.

235    Furthermore, the applicant states, in the reply, that the justifications put forward by the Commission in the defence in order to explain the approach taken in the contested implementing regulation are new and thus inadmissible because they do not appear in the contested implementing regulation.

236    By the second complaint, the applicant submits that it was not put in a position to understand the Commission’s rationale for making findings on the basis of the facts available, and that it was not given an opportunity to make effective comments on the matter, and therefore the contested implementing regulation infringes its rights of defence.

237    By the third complaint, the applicant submits that the contested implementing regulation infringes the right to good administration, which requires the competent institution to examine carefully and impartially all the relevant aspects of the case. It states that, in that implementing regulation, the Commission did not take into account the information submitted in the applicant’s response to the Article 28 letter and in its comments on the GDD.

238    In support of the second part of the second plea, the applicant submits that the Commission made manifest errors of assessment in concluding, in the contested implementing regulation, that the applicant had not provided ‘necessary information’ within the meaning of Article 28(1) of the basic anti-subsidy regulation.

239    First, the applicant submits that it clarified all the issues in respect of which information was requested.

240    Second, the applicant submits that the information referred to in recital 38 of the contested implementing regulation cannot be classified as necessary within the meaning of Article 28(1) of the basic anti-subsidy regulation and the case-law. It argues that the Commission could have obtained that information through other means and verified it through visits and remote cross-checks.

241    Third, the applicant submits that the contested implementing regulation infringes Article 28(3) of the basic anti-subsidy regulation, in that the Commission decided to make findings on the basis of the facts available on the sole ground that the information which the applicant had provided was allegedly not ideal in all respects. The applicant states that, even if that information were to be considered not ‘ideal’, that was not a sufficient reason to make findings on the basis of the facts available. The applicant adds that, in deciding to apply Article 28(1) of the basic anti-subsidy regulation, the Commission disregarded some of the cost of production data that it had submitted and made findings on the basis of the facts available in respect, in particular, of the starting date of production, whereas, in the event of doubts relating solely to the reliability of the data submitted, the Commission should have applied Article 28(3) of the basic anti-subsidy regulation and thus accepted that data.

242    The Commission, as with the intervener in support of the Commission, submits that the second plea is ineffective in its entirety, and that it is, in any event, unfounded.

243    In support of its submission that the second plea is ineffective, the Commission states that, during the anti-circumvention investigation, it initiated the procedure provided for by Article 28 of the basic anti-subsidy regulation because the information referred to in recital 38 of the contested implementing regulation suggested that transhipment might be taking place, but that, in view of the incomplete and contradictory nature of the information provided by the applicant, it ultimately concluded that it would be unable to prove transhipment and focused on proving assembly or completion operations. It states that, for the purposes of proving such operations, it did not use available facts pursuant to Article 28 of the basic anti-subsidy regulation, except for certain statistical data extracted from Eurostat and the applicant’s data, which, however, are not disputed by the applicant.

244    As a preliminary point, it should be noted that, according to Article 23(4) of the basic anti-subsidy regulation, it is for the Commission to initiate an investigation on the basis of evidence which prima facie suggests circumvention practices. If the facts ascertained during that investigation make it possible to conclude that such circumvention exists, the Commission is to submit a proposal on the extension of anti-subsidy measures to the Council (see, to that effect, judgment of 4 September 2014, Simon, Evers & Co., C‑21/13, EU:C:2014:2154, paragraph 31).

245    However, there is no provision in the basic anti-subsidy regulation which grants the Commission, in the context of a circumvention investigation, the power to require producers or exporters referred to in a complaint to participate in the investigation or to provide information. The Commission is therefore reliant on the voluntary cooperation of the interested parties to provide it with the necessary information (see, to that effect, judgment of 4 September 2014, Simon, Evers & Co., C‑21/13, EU:C:2014:2154, paragraph 32).

246    That is why the EU legislature provided in Article 28(1) of the basic anti-subsidy regulation that, in cases in which any interested party refuses access to, or otherwise does not provide, necessary information, or significantly impedes the investigation, provisional or final findings, affirmative or negative, may be made on the basis of the facts available (see, to that effect, judgment of 4 September 2014, Simon, Evers & Co., C‑21/13, EU:C:2014:2154, paragraph 33).

247    Furthermore, it has been stated in the case-law that Article 28(1) of the basic anti-subsidy regulation concerns the institutions’ use of the facts available to the detriment of the facts which are specific to one or more of the interested parties (see, to that effect, judgment of 30 April 2015, VTZ and Others v Council, T‑432/12, not published, EU:T:2015:248, paragraph 35 and the case-law cited).

248    In the present case, recital 38 of the contested implementing regulation states the following:

‘[According to the Commission,] the questionnaire replies, including the response to a deficiency letter, of [the applicant] and its two Chinese related companies … were found to be deficient for the following reasons:

–        [the applicant] did not provide the necessary information required in the exemption claim form. In particular, it did not provide the necessary underlying documents for [confidential] sales transactions. As a result, the Commission was unable to verify the claim that [the applicant] only started its production in April 2020.

–        Moreover, despite the fact that the Commission requested a detailed explanation for missing sales invoice numbers, only a general explanation for these missing sales invoice numbers was received. The Commission also noted a difference in the total turnover for the reporting period as reported in the sales listing compared to the one reported in its statutory accounts of 2020. The Commission could therefore not confirm the reported export sales volumes to the Union. In this respect, the Commission also noted that the reported export sales were higher than total imports to the Union from Morocco according to Eurostat import statistics and that [the applicant] was the only known producer in Morocco that exported the product under investigation to the Union.

–        Contradictory information was also provided concerning the actual start of the production at [the applicant]. The information about the actual start of the production in 2020 was needed to identify the proportion of the incurred major costs (such as depreciation cost and rental cost) which could be attributed to the production of the product concerned.

–        Furthermore, no satisfactory explanation was provided in the [response to the deficiency letter] about the reasons behind the significant increase in the production volume in July 2020, which was about [confidential] higher than the production volume of the previous month, June 2020, despite a more or less same level of electricity consumption in both months.

–        PGTEX China did not provide information from the [GTS] as requested concerning its purchases from CPIC and its sales to [the applicant]’.

249    Therefore, as is apparent from recital 39 of the contested implementing regulation, in accordance with Article 28(4) of the basic anti-subsidy regulation the Commission informed the PGTEX Group, on 5 October 2021, of the fact that the non-exhaustive list of elements described in recital 38 of the contested implementing regulation might lead to the application of that article and to the use of facts available. It also invited the PGTEX Group to comment on the possible application of that article.

250    As is apparent from recital 41 of the contested implementing regulation, the Commission ‘analysed the information and documents that the PGTEX Group submitted [by] letter of 12 October 2021’ and ‘concluded that neither satisfactory replies nor convincing supporting documentation [had been] provided on most elements that [had been] raised in its letter of 5 October 2021.’

251    Accordingly, as is apparent from recital 42 of the contested implementing regulation, ‘the Commission considered that the information provided by the PGTEX Group was partially incomplete and contradictory and thus could not be fully relied on by the Commission’, but that ‘the data submitted by [that Group] were not wholly disregarded’, and ‘the Commission used both the sales and cost data submitted by [that Group] as a starting point of its analysis’.

252    Furthermore, in recital 43 of the contested implementing regulation, the Commission stated that ‘in accordance with Article 28(1) first sentence and Article 28(5) of the basic [anti-subsidy regulation], the information provided by the PGTEX Group was complemented by data extracted from databases such as the Global Trade Atlas [(GTA)], and Eurostat … Import data were extracted from Eurostat, and GTA was used for the determination of export volumes of glass fibre rovings from [China] and Egypt into Morocco.’

253    It is thus apparent, from reading recitals 38 and 43 of the contested implementing regulation, that the Commission used import data that had been extracted from Eurostat, and data relating to export volumes of glass fibre rovings from China and Egypt to Morocco that had been extracted from the Global Trade Atlas (GTA) database, to rectify the lack of reliability of the information provided by the applicant as regards the volume of export sales to the European Union referred to in recital 38 of that implementing regulation. In particular, the Commission used those statistical data to determine whether, in the present case, there had been a change in the pattern of trade.

254    It is also apparent from recital 42 of the contested implementing regulation that the data submitted by the PGTEX Group were not disregarded and that the Commission took the sales and cost data provided by that Group as a starting point for its analysis (see paragraph 251 above).

255    In the present case, the applicant does not dispute the facts available that were used by the Commission pursuant to Article 28(1) of the basic anti-subsidy regulation. In particular, as regards the data extracted from Eurostat and from the GTA database, which were used by the Commission in finding that, on the facts of the present case, there had been a change in the pattern of trade, the applicant does not raise any argument, in its pleadings, seeking expressly to challenge the accuracy of those data. It merely observes that, in recital 86 of the contested implementing regulation, the Commission rejected March as being the starting point of production and, consequently, the first of the other methods of calculating the depreciation costs, precisely on the basis of the arguments set out in recital 38 of that implementing regulation.

256    However, it is apparent from the examination of the third part of the fourth plea (see paragraphs 189 to 191 above) that the Commission did not reject the first of the other methods of calculating the depreciation costs on the basis of facts available, pursuant to Article 28(1) of the basic anti-subsidy regulation, but did so on the ground that the monthly production data as recorded by the applicant did not always reflect the actual production for the month and could not be treated as reliable.

257    Furthermore, when questioned at the hearing, the applicant did not put forward other arguments seeking to challenge the facts available that had been used by the Commission pursuant to Article 28(1) of the basic anti-subsidy regulation, and therefore the applicant cannot claim that the use of that provision adversely affects its position.

258    Accordingly, the second plea must be rejected as ineffective, and there is no need to analyse the merits of the parts raised by the applicant in support of that plea.

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

IV.    Costs

260    Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the 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 form of order sought by the Commission.

261    Pursuant to Article 138(3) of the Rules of Procedure, the interveners must be ordered to bear their own costs.

On those grounds,

THE GENERAL COURT (Tenth Chamber, Extended Composition)

hereby:

1.      Dismisses the action;

2.      Orders PGTEX Morocco to bear its own costs and to pay those incurred by the European Commission;

3.      Orders LM Wind Power A/S and Tech-Fab Europe eV to bear their own costs.

Delivered in open court in Luxembourg on 4 December 2024.

Table of contents

I. Background to the dispute

II. Forms of order sought

III. Law

A. The first plea in law

1. Preliminary observations

(a) The association agreement

(b) EU legislation on circumvention of anti-subsidy measures

2. The merits of the first plea, alleging infringement of the association agreement, infringement of Article 33(a) of the basic anti-subsidy regulation and misuse of powers, on the ground that the contested implementing regulation imposes countervailing duties on the GFF that the applicant exports to the European Union without considering their preferential Moroccan origin

B. The third to fifth pleas in law

1. Preliminary observations

2. The merits of the third plea in law, alleging manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation, in that the Commission found that there was insufficient due cause or economic justification for the creation of the applicant’s production site in Morocco other than the imposition of the countervailing duties, and alleging infringement of the right to good administration, in that the Commission did not carefully and impartially examine all the relevant aspects of the case

(a) The assessment that there was insufficient due cause or economic justification for the establishment of the applicant’s production site in Morocco other than the imposition of the countervailing duties in the contested implementing regulation

(b) The first part of the third plea, alleging manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation in that the Commission found that there was insufficient due cause or economic justification for the establishment of the applicant’s production site in Morocco other than the imposition of the countervailing duties

(c) The second part of the third plea, alleging infringement of the right to good administration, in that the Commission did not examine carefully and impartially all the relevant aspects of the case

3. The merits of the fourth plea, alleging manifest errors of assessment, infringement of the right to good administration and of the principles of non-discrimination and equal treatment, and infringement of Article 23(3) of the basic anti-subsidy regulation, in that the Commission found that the manufacturing process implemented by the applicant in Morocco constituted an assembly operation

(a) The first part of the fourth plea, alleging manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation in that the Commission applied, by analogy, the concept of ‘assembly operations’ referred to in Article 13(2) of the basic anti-dumping regulation

(b) The second part of the fourth plea, alleging manifest errors of assessment, infringement of Article 23(3) of the basic anti-subsidy regulation and infringement of the right to good administration, in that the Commission found that the manufacturing process implemented by the applicant in Morocco constituted an assembly operation

(c) The third part of the fourth plea, alleging manifest errors of assessment, infringement of Article 23(3) of the basic anti-subsidy regulation, infringement of the right to good administration and infringement of the principles of non-discrimination and equal treatment in the assessment of the threshold of the value added by the assembly operations

(1) The calculation of the value added in the contested implementing regulation

(i) The depreciation cost

(ii) The rental cost

(2) The first complaint, alleging manifest errors of assessment and breach of Article 13(2)(b) of the basic anti-dumping regulation

(3) The second complaint, alleging breach of the principles of non‑discrimination and equal treatment

(4) The third complaint, alleging infringement of the right to good administration

(d) Conclusion

4. The merits of the fifth plea, alleging manifest errors of assessment and infringement of Article 23(3) of the basic anti-subsidy regulation in that the Commission found that the GFF exported from Morocco to the European Union still benefited from the subsidies granted to Chinese GFF producers

C. The second plea in law, alleging infringement of the obligation to state reasons, infringements of the applicant’s rights of defence and the right to good administration, and alleging manifest errors of assessment and infringement of Article 28(1) and (3) of the basic anti-subsidy regulation as regards the use of the facts available

IV. Costs

*      Language of the case: English.

1 Confidential information omitted.

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