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

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

21 February 2024 (*) (1)

(Dumping – Imports of certain polyvinyl alcohols originating in China – Definitive anti-dumping duty – Implementing Regulation (EU) 2020/1336 – Calculation of the normal value – Significant distortions in the exporting country – Article 2(6a) of Regulation (EU) 2016/1036 – WTO law – Principle of consistent interpretation – Choice of appropriate representative country – Readily available data – Non-cooperation – Definition of ‘necessary information’ – Article 18 of Regulation 2016/1036 – Price undercutting – Market segments – Product control number method – Article 3(2) and (3) of Regulation 2016/1036 – Rights of the defence – Confidential treatment – Articles 19 and 20 of Regulation 2016/1036)

In Case T‑763/20,

Inner Mongolia Shuangxin Environment-Friendly Material Co. Ltd, established in Ordos (China), represented by J. Cornelis, F. Graafsma and E. Vermulst, lawyers,

applicant,

supported by

Wegochem Europe BV, established in Amsterdam (Netherlands), represented by R. Antonini, E. Monard and B. Maniatis, lawyers,

intervener,

v

European Commission, represented by G. Luengo, acting as Agent,

defendant,

supported by

European Parliament, represented by A. Neergaard, D. Moore and A. Pospíšilová Padowska, acting as Agents,

by

Council of the European Union, represented by H. Marcos Fraile and B. Driessen, acting as Agents, and by N. Tuominen, lawyer,

by

Kuraray Europe GmbH, established in Hattersheim am Main (Germany), represented by R. MacLean and D. Sevilla Pascual, lawyers,

and by

Sekisui Specialty Chemicals Europe SL, established in La Canonja (Spain), represented by A. Borsos and J. Jousma, lawyers,

interveners,

THE GENERAL COURT (Ninth Chamber, Extended Composition),

composed of L. Truchot (Rapporteur), President, H. Kanninen, L. Madise, R. Frendo and T. Perišin, Judges,

Registrar: I. Kurme, Administrator,

having regard to the written part of the procedure,

further to the hearing on 14 and 15 December 2022,

gives the following

Judgment

1        By its action under Article 263 TFEU, the applicant, Inner Mongolia Shuangxin Environment-Friendly Material Co. Ltd, seeks the annulment of Commission Implementing Regulation (EU) 2020/1336 of 25 September 2020 imposing definitive anti-dumping duties on imports of certain polyvinyl alcohols originating in the People’s Republic of China (OJ 2020 L 315, p. 1; ‘the contested regulation’), in so far as it concerns the applicant.

 Background to the dispute

2        The applicant is a Chinese company which produces and exports polyvinyl alcohols (‘PVA’) in particular to the European Union.

3        On 18 June 2019, Kuraray Europe GmbH (‘Kuraray’), a PVA producer representing more than 60% of total EU production, lodged a complaint with the European Commission on the basis of Article 5 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 regulation’). Accordingly, the Commission published a notice of initiation of an anti-dumping proceeding concerning imports of certain PVA originating in the People’s Republic of China (OJ 2019 C 256, p. 4).

4        The investigation of dumping and resulting injury covered the period from 1 July 2018 to 30 June 2019 (‘the investigation period’). The examination of trends relevant for the assessment of injury, relating to the information in tables 1 to 11 of the contested regulation, covered the period from 1 January 2016 to the end of the investigation period (‘the period considered’) (recital 39 of the contested regulation).

5        Following a number of written exchanges with the applicant and other undertakings covered by its investigation, on 3 July 2020, the Commission sent the applicant the final disclosure provided for in Article 20 of the basic regulation (‘final disclosure’), in which it proposed an anti-dumping duty, based on its injury margin, of 72.9% for the applicant. Following further written exchanges with the Commission, the applicant submitted its comments on final disclosure on 20 July 2020.

6        By the contested regulation, the Commission imposed a definitive anti-dumping duty on imports of certain PVA originating in China and established that the rate of the definitive anti-dumping duty applicable to the net free-at-Union-frontier price, before duty, was to be 72.9% for the applicant.

7        In calculating the normal value of the products manufactured by the applicant, the Commission did not rely on the general rule laid down in the first subparagraph of Article 2(1) of the basic regulation, according to which the ‘normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’. It applied Article 2(6a) of that regulation, a provision that was introduced pursuant to Regulation (EU) 2017/2321 of the European Parliament and of the Council of 12 December 2017 amending the basic regulation and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union (OJ 2017 L 338, p. 1) (recitals 86 and 87 of the contested regulation).

8        Article 2(6a) of the basic regulation provides as follows:

‘6a(a)      In case it is determined, when applying this or any other relevant provision of this Regulation, that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, subject to the following rules.

The sources the Commission may use include:

–        corresponding costs of production and sale in an appropriate representative country with a similar level of economic development as the exporting country, provided the relevant data are readily available; where there is more than one such country, preference shall be given, where appropriate, to countries with an adequate level of social and environmental protection;

–        if it considers appropriate, undistorted international prices, costs, or benchmarks; or

–        domestic costs, but only to the extent that they are positively established not to be distorted, on the basis of accurate and appropriate evidence, including in the framework of the provisions on interested parties in point (c).

Without prejudice to Article 17, that assessment shall be done for each exporter and producer separately.

The constructed normal value shall include an undistorted and reasonable amount for administrative, selling and general costs and for profits.

(b)      Significant distortions are those distortions which occur when reported prices or costs, including the costs of raw materials and energy, are not the result of free market forces because they are affected by substantial government intervention. In assessing the existence of significant distortions regard shall be had, inter alia, to the potential impact of one or more of the following elements:

–        the market in question being served to a significant extent by enterprises which operate under the ownership, control or policy supervision or guidance of the authorities of the exporting country;

–        state presence in firms allowing the state to interfere with respect to prices or costs;

–        public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces;

–        the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws;

–        wage costs being distorted;

–        access to finance granted by institutions which implement public policy objectives or otherwise not acting independently of the state.

(c)      Where the Commission has well-founded indications of the possible existence of significant distortions as referred to in point (b) in a certain country or a certain sector in that country, and where appropriate for the effective application of this Regulation, the Commission shall produce, make public and regularly update a report describing the market circumstances referred to in point (b) in that country or sector. Such reports and the evidence on which they are based shall be placed on the file of any investigation relating to that country or sector. Interested parties shall have ample opportunity to rebut, supplement, comment or rely on the report and the evidence on which it is based in each investigation in which such report or evidence is used. In assessing the existence of significant distortions, the Commission shall take into account all the relevant evidence that is on the investigation file.’

9        In the contested regulation, having found, in particular on the basis of the country report concerning China of 20 December 2017 which it had published pursuant to Article 2(6a)(c) of the basic regulation, that there were ‘significant distortions’, within the meaning of Article 2(6a)(b) of that regulation, in that country (recitals 91 and 171 of the contested regulation), the Commission constructed the normal value in accordance with the method laid down in the first indent of the second subparagraph of Article 2(6a)(a) of the basic regulation. For that purpose, it chose Türkiye as an appropriate representative country (recitals 172 and 222 of the contested regulation). In addition, in accordance with the final subparagraph of Article 2(6a)(a) of the basic regulation, the Commission included in the normal value what it considered to be an undistorted and reasonable amount for administrative, selling and general costs (‘SG&A costs’) and for profits (recital 87 of the contested regulation).

10      Furthermore, the Commission identified some deficiencies in the data provided by the applicant in respect of certain factors of production. Accordingly, the Commission applied Article 18(1) of the basic regulation, according to which, in cases in which any interested party ‘refuses access to … necessary information … or significantly impedes the investigation’, the Commission may rely on the ‘facts available’ (‘the facts available within the meaning of Article 18’). When calculating the normal value of the products manufactured by the applicant, the Commission thus used the facts available within the meaning of Article 18 to establish the undistorted prices of those factors of production (recitals 274, 275 and 317 to 322 of the contested regulation).

11      When comparing the normal value of the products manufactured by the applicant with its export price, the Commission made an adjustment under Article 2(10)(b) of the basic regulation. It thus increased the normal value ‘for the difference in indirect taxes between export sales from [China] to the Union and the normal value where indirect taxes such as [value added tax] [had] been excluded’ (recital 388 of the contested regulation). Furthermore, the Commission also made downward adjustments to the export price, deducting insurance costs, transport, handling and loading expenses, credit costs and bank charges (‘the costs at issue’) in order to reduce the export price to an ‘ex-works’ level (recitals 313, 314 and 357 of the contested regulation).

12      When determining the injury allegedly suffered by the Union industry, pursuant to Article 3(2), (3) and (6) of the basic regulation, the Commission analysed price undercutting. For that purpose, first, it based its conclusion on its findings that the PVA market was not divided into two distinct segments (recitals 61 to 64 of the contested regulation). Secondly, it used in particular a method consisting of comparing import prices and Union industry sales prices by product type, although it did not find a perfect match for some of them (recitals 432 and 433 of the contested regulation).

 Forms of order sought

13      The applicant claims that the Court should:

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

–        order the Commission to pay the costs.

14      Wegochem Europe BV (‘Wegochem’), intervening in support of the applicant, claims that the Court should:

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

–        order the Commission to pay the costs, including those incurred by Wegochem.

15      The Commission, supported by the European Parliament, the Council of the European Union, Kuraray and Sekisui Specialty Chemicals Europe SL (‘Sekisui’), contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

16      In support of the action, the applicant relies on seven pleas in law, the first alleging that the application of Article 2(6a) of the basic regulation is inconsistent with the obligations arising from World Trade Organisation (WTO) law; the second alleging infringement of Article 2(6a)(a) of the basic regulation as regards the choice of appropriate representative country; the third alleging infringement of Article 2(6a)(a) of the basic regulation on the ground that the normal value was not constructed exclusively on the basis of undistorted values of ‘corresponding’ factors of production; the fourth alleging infringement of Article 2(10) of the basic regulation; the fifth alleging infringement of Article 18 of the basic regulation; the sixth alleging infringement of Article 3(2) and (3) of the basic regulation when establishing price undercutting, and infringement of Article 3(6) of that regulation; and the seventh alleging infringement of the rights of the defence.

 First plea in law, alleging that the application of Article 2(6a) of the basic regulation is inconsistent with the obligations arising from WTO law

17      The applicant submits that, in the contested regulation, the Commission’s application of Article 2(6a) of the basic regulation was not in conformity with the Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) (OJ 1994 L 336, p. 103; ‘the anti-dumping agreement’), as interpreted by the decisions of the WTO’s Dispute Settlement Body (DSB). The applicant acknowledges that the anti-dumping agreement does not have direct effect, but argues that, given the commonality between that agreement and the basic regulation, that fact does not affect the obligation, which the Commission infringed in this case, to interpret the abovementioned provision of the basic regulation in a manner consistent with WTO law, including the decisions of the DSB.

18      The applicant makes clear that the present plea cannot be regarded as a plea of illegality against Article 2(6a) of the basic regulation. It does not challenge that provision as such, but the Commission’s application of it in the contested regulation. The applicant states that it is possible to interpret Article 2(6a) of the basic regulation in a manner that is consistent with WTO law, without such interpretation necessarily being contra legem or leading to that provision being deprived of its substance.

19      The Commission, supported by the Parliament, the Council, Kuraray and Sekisui, disputes the applicant’s arguments.

20      It must be recalled that, by virtue of Article 216(2) TFEU, where international agreements are concluded by the European Union they are binding upon its institutions and, consequently, they prevail over acts of the European Union. Therefore, secondary EU legislation must be interpreted, as far as possible, in a manner consistent with those agreements, in particular where such legislation is intended specifically to give effect to an international agreement concluded by the European Union (see, to that effect, judgments of 9 January 2003, Petrotub and Republica v Council, C‑76/00 P, EU:C:2003:4, paragraph 57 and the case-law cited; of 18 March 2014, Z., C‑363/12, EU:C:2014:159, paragraphs 71 and 72 and the case-law cited; and of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 31 and the case-law cited).

21      According to recital 3 of the basic regulation, in order to ensure a proper and transparent application of the rules of the anti-dumping agreement, the language of that agreement should be reflected in EU legislation to the best extent possible. The general international law principle of compliance with treaty commitments (pacta sunt servanda), laid down in Article 26 of the Vienna Convention on the Law of Treaties of 23 May 1969 (United Nations Treaty Series, Vol. 1155, p. 331), means that the Courts of the European Union must, for the purposes of interpreting and applying the anti-dumping agreement, take account of the decisions of the DSB interpreting the provisions of that agreement (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraphs 30, 32 and 33 and the case-law cited).

22      However, as shown by the use in the case-law referred to in paragraph 20 above of the expression ‘as far as possible’, such case-law cannot be applied in the case of a provision whose meaning is clear and unambiguous and which therefore requires no interpretation. If that were so, the principle that secondary EU law must be interpreted in conformity with EU law would serve as the basis for an interpretation of that provision contra legem, which cannot be permitted (see judgment of 13 July 2018, Confédération nationale du Crédit mutuel v ECB, T‑751/16, EU:T:2018:475, paragraph 34 and the case-law cited; see also, to that effect, judgment of 28 February 2017, Canadian Solar Emea and Others v Council, T‑162/14, not published, EU:T:2017:124, paragraph 151).

23      Moreover, it must be noted that the consistent interpretation of acts of the EU institutions in the light of provisions of an international agreement to which the European Union is a party, as defined by the case-law recalled in paragraphs 20 to 22 above, must not be confused with a review of the legality of those acts.

24      According to settled case-law, the provisions of an international agreement can be relied on in support of an action for annulment of an act of secondary EU legislation or an exception based on the illegality of such an act only where, first, the nature and the broad logic of that agreement do not preclude it and, secondly, those provisions appear, as regards their content, to be unconditional and sufficiently precise. It is only when both those conditions are met that such provisions may be relied upon before the Courts of the European Union as a criterion in order to assess the legality of an EU act (see judgment of 16 July 2015, Commission v Rusal Armenal, C‑21/14 P, EU:C:2015:494, paragraph 37 and the case-law cited).

25      In the present case, since the applicant has declared that it is not raising a plea of illegality and, in any event, it has neither argued nor, a fortiori, demonstrated that the conditions laid down by the case-law referred to in paragraph 24 above are satisfied, it must, if the Court is to be able to uphold the present plea, establish that Article 2(6a) of the basic regulation lacks clarity or contains ambiguities that would have to be resolved by being interpreted in a manner consistent with those rules, and that that interpretation is not contra legem.

26      It must be noted that the applicant does not argue that the text of Article 2(6a) of the basic regulation is ambiguous.

27      However, in the first place, the applicant submits that, in order for Article 2(6a) of the basic regulation to be applied in a manner consistent with WTO law, it must be interpreted as meaning that, of the three sources of information referred to in Article 2(6a)(a) of that regulation, only the last – using the domestic costs in the exporting country – must be accepted.

28      It should be borne in mind that, according to settled case-law, for the purposes of 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 2 July 2020, Magistrat der Stadt Wien (European hamster), C‑477/19, EU:C:2020:517, paragraph 23 and the case-law cited).

29      As it is, the interpretation of Article 2(6a) of the basic regulation put forward by the applicant effectively excludes the first two sources of information envisaged by Article 2(6a)(a) of that regulation and gives the third a broad scope, in the sense that it should be applied even if it has not been demonstrated that the relevant costs are undistorted.

30      First, the interpretation put forward by the applicant cannot be based on the wording of the provision concerned, which lists three options, the third of which is subject to a specific condition. It follows from the use of the term ‘include’ that those three options are not exhaustive, and therefore that the Commission could use sources of information other than those covered by those three options. However, the discretion which the legislature gave the Commission with regard to the use of supplementary sources of information does not mean that the Commission can use a fourth source that is the same as the third apart from there being no need to satisfy the condition that it must be proved that the domestic costs in the exporting country are not distorted.

31      Nor, furthermore, is that interpretation supported by the context in which Article 2(6a) of the basic regulation occurs. That provision introduces specific rules that are distinct from those arising from other paragraphs of Article 2 of the basic regulation, in that they apply to cases in which there are significant distortions in the domestic market of the exporting country. Therefore, the words ‘when applying this or any other relevant provision of this Regulation’ in the first subparagraph of Article 2(6a)(a) of the basic regulation do not mean that that provision must, in all cases, be interpreted in such a way as to be consistent with the provisions of the anti-dumping agreement that correspond to other provisions of Article 2 of the basic regulation.

32      Lastly, as regards the objectives of Article 2(6a) of the basic regulation, it must be noted that the objective of that provision is to prevent data relating to prices and costs in the exporting country that would be distorted by the significant distortions that exist in the domestic market of that country from being used for the purposes of an anti-dumping investigation. Provision is thus made for data relating to an appropriate representative third country, or for international data, or for domestic costs in the exporting country to be used, provided that it is demonstrated that these are not distorted.

33      Consequently, it must be held that, by its argument, which is summarised in paragraph 27 above, the applicant is proposing an interpretation contra legem of Article 2(6a) of the basic regulation, which cannot be adopted.

34      In the second place, the applicant maintains that Article 2(6a) of the basic regulation must be interpreted in a manner consistent with Article 2.2 and Article 2.2.1.1 of the anti-dumping agreement.

35      First, according to the applicant, instead of permitting a calculation on the basis of the prices in the exporting country, Article 2.2 of the anti-dumping agreement permits the construction of normal value only in three situations, one of which is when a particular market situation (‘PMS’) exists in the exporting country.

36      The applicant states that the concept of a ‘PMS’, as interpreted by the decisions of the DSB, does not give unlimited freedom to the authority conducting an anti-dumping investigation (‘the competent authority’), but covers only situations in which comparability between the normal value and the export price is affected. However, a situation characterised by significant distortions following substantial State interventions in the exporting country’s market does not, by itself, mean that the costs incurred by the exporting producers of that country may be disregarded when calculating the normal value and the costs incurred by third-country producers used instead. The Commission has the burden of proving the link between that market situation and price comparability. In this case, however, the applicant submits that that proof has not been provided.

37      Secondly, according to the applicant, even if a distortion of input costs were to give rise to a PMS, the method used by the Commission in this case, which imposes an obligation to use input costs from sources not affected by any distortions and to disregard the data on the costs of production reflected in the Chinese exporting producers’ records, is nonetheless inconsistent with Article 2.2.1.1 of the anti-dumping agreement, as interpreted by the decisions of the DSB.

38      It should be recalled that, as noted in paragraph 23 above, the applicant’s reliance on the principle of consistent interpretation cannot lead to the Court’s reviewing the legality of Article 2(6a) of the basic regulation in the light of WTO rules without any need to demonstrate that the conditions laid down by the case-law for the exercise of that review are satisfied.

39      Furthermore, it follows from paragraph 20 above that, in order for the principle of consistent interpretation to be fully applicable, the provisions of EU law at issue must be intended to give effect to WTO rules.

40      It should be recalled that, by Regulation 2017/2321, the EU legislature amended Article 2 of the basic regulation by inserting paragraph 6a and amending paragraph 7.

41      According to the case-law, Article 2(7) of the basic regulation, in the version prior to amendment by Regulation 2017/2321, was the expression of the EU legislature’s intention to adopt, in that area, an approach specific to the EU legal order by establishing a special regime of detailed rules for the calculation of normal value for imports from non-market economy countries. Consequently, it has been held that that provision could not be considered to be a measure intended to ensure the implementation in the EU legal order of a particular obligation assumed in the context of the WTO agreements, which did not lay down rules for the calculation of normal value for non-market economy countries (judgment of 5 May 2022, Zhejiang Jiuli Hi-Tech Metals v Commission, C‑718/20 P, EU:C:2022:362, paragraph 88; see also, to that effect and by analogy, judgment of 16 July 2015, Commission v Rusal Armenal, C‑21/14 P, EU:C:2015:494, paragraphs 47 to 50). This Court has stated that, in so far as that provision laid down rules concerning the calculation of normal value that had no equivalents in the WTO agreements, the Commission was not required to interpret it in accordance with the obligations of the European Union in the context of the WTO. If that had been the case, the Commission would have been deprived of the discretion which the legislature had intended to grant it (see, to that effect and by analogy, judgment of 19 September 2019, Zhejiang Jndia Pipeline Industry v Commission, T‑228/17, EU:T:2019:619, paragraphs 111 to 113).

42      It must be held that those principles are applicable, by analogy, to Article 2(6a) of the basic regulation.

43      In fact that provision establishes a special regime laying down rules for determining normal value in the case of exports from countries whose domestic market has been shown to have significant distortions, as defined in that provision. WTO law does not, however, include specific rules for calculating normal value in such situations.

44      Moreover, it is true that recital 2 of Regulation 2017/2321 states that that regulation ‘is without prejudice to establishing whether or not any WTO Member is a market economy or to the terms and conditions set out in protocols and other instruments in accordance with which countries have acceded to the [Agreement establishing the WTO]’, which include the Protocol on the Accession of the People’s Republic of China to the WTO (‘the accession protocol’).

45      It is also true that paragraph 15 of the accession protocol contains specific rules for the application of the anti-dumping agreement to imports from China and provides for a transitional period, expiring no later than 15 years after the People’s Republic of China has become a member of the WTO, that is to say, 11 December 2016.

46      However, the presence of recital 2 in the preamble to Regulation 2017/2321 does not lead to the conclusion that, by that regulation, the EU legislature wished to create a mechanism that would give effect to paragraph 15 of the accession protocol.

47      In any event, assuming that, after the expiry of the transitional period provided for, paragraph 15 of the accession protocol precludes the use, in the context of an anti-dumping investigation, of a method intended to determine the normal value that is not based on Chinese prices or costs for the industry under investigation, it would follow that Article 2(6a) of the basic regulation would not be compatible with that paragraph.

48      Given that the applicant has not raised a plea of illegality in respect of Article 2(6a) of the basic regulation in the light of WTO rules, that potential incompatibility would merely confirm that it is impossible to interpret that provision in the manner suggested by the applicant.

49      Consequently, it must be concluded that the necessary conditions for the principle of consistent interpretation to be applicable to Article 2(6a) of the basic regulation in the light of WTO rules are not satisfied.

50      Accordingly, the first plea in law must be rejected.

 The Commission’s request that the second to fifth pleas in law be rejected as ineffective

51      The Commission requests that the second to fifth pleas be rejected as ineffective because they relate to the dumping margin, set at 115.6% in the contested regulation, whereas the anti-dumping duty applicable to the applicant corresponds to the injury margin, set at 72.9% in the contested regulation. It asserts that the applicant, which bears the burden of proof, has not shown that, if the pleas in question were well founded, the difference between the dumping margin and the injury margin would be reduced below zero.

52      The Commission also submits that the applicant is required to demonstrate the existence of a vested and current personal interest which cannot concern a future and hypothetical situation.

53      In support of its contention that the pleas in question are effective, first, the applicant relies on the case-law relating to infringement of the rights of the defence, according to which an applicant cannot be required to show that the Commission’s decision would have been different in content but simply that such a possibility cannot be totally ruled out (judgments of 1 October 2009, Foshan Shunde Yongjian Housewares & Hardware v Council, C‑141/08 P, EU:C:2009:598, paragraph 94, and of 11 July 2013, Hangzhou Duralamp Electronics v Council, T‑459/07, not published, EU:T:2013:369, paragraphs 110 and 111). According to the applicant, that case-law is applicable to the present case as it finds itself in the predicament of being unable to demonstrate the numerical counterfactual. Although the difference between the dumping margin and the injury margin is significant, it cannot be ruled out that, following correction of the errors referred to in the pleas in question, the dumping margin could be reduced to a level below the injury margin.

54      Secondly, the applicant claims that it has an interest in having the Commission correctly calculate the dumping margin for possible reviews of the measures imposed by the contested regulation, for other possible anti-dumping proceedings against it or for possible applications made by it for refunds of the anti-dumping duties paid. Those scenarios are not future and hypothetical situations.

55      Thirdly, the applicant states that the anti-dumping duty applicable to another Chinese exporting producer, which was based not on that exporting producer’s injury margin but on its dumping margin, was calculated using data relating to the normal value of the products manufactured by the applicant. The applicant maintains that it should not bear the burden of being the indirect root cause for the dumping margin of other exporting producers to be overstated.

56      The Court recalls that the second subparagraph of Article 9(4) of the basic regulation is worded as follows:

‘The amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the Union industry. …’

57      According to the case-law, that provision lays down the ‘lesser duty’ rule (‘the lesser duty rule’), pursuant to which the injury margin should be used to determine the rate of anti-dumping duty where the dumping margin is higher than the injury margin, and vice versa (see, to that effect, judgments of 4 March 2010, Foshan City Nanhai Golden Step Industrial v Council, T‑410/06, EU:T:2010:70, paragraph 94 and the case-law cited, and of 18 October 2016, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑351/13, not published, EU:T:2016:616, paragraph 49 and the case-law cited).

58      The objective of the lesser duty rule is, inter alia, to prevent the anti-dumping duty imposed from going beyond what is necessary to remove the injury caused by the dumped imports. Thus, the adoption of anti-dumping duties is a protective and preventive measure against unfair competition resulting from dumping practices, not a penalty or a measure giving a competitive advantage to the Union industry (see, to that effect, judgment of 18 October 2016, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑351/13, not published, EU:T:2016:616, paragraph 50 and the case-law cited).

59      In the present case, in recital 658 of the contested regulation, the Commission ‘compared the injury margins and the dumping margins’ and stated that ‘the amount of the [anti-dumping] duties should be set at the level of the lower of the dumping and the injury margins’.

60      Recital 659 of that regulation contains the following table:

61      While the Commission argues that the pleas in question are ineffective in so far as the applicant has failed to prove that, if those pleas were well founded, the dumping margin would drop below the injury margin with the result that the anti-dumping duty would have to be reduced, the applicant counters not only by invoking the burden of proof but also by arguing that it has an interest in raising those pleas, leading the Commission to claim that that interest was not made out in the present case.

62      According to settled case-law, in an action for annulment, a plea in law which, even if it were well founded, would be incapable of bringing about the annulment which the applicant seeks, is considered ineffective (order of 26 February 2013, Castiglioni v Commission, T‑591/10, not published, EU:T:2013:94, paragraph 45, and judgment of 15 January 2015, France v Commission, T‑1/12, EU:T:2015:17, paragraph 73; see also, to that effect, judgment of 21 September 2000, EFMA v Council, C‑46/98 P, EU:C:2000:474, paragraph 38).

63      Furthermore, a plea for annulment is inadmissible on the ground of lack of interest in bringing proceedings when, even if that plea were well founded, annulment of the contested act on the basis of that plea would not give the applicant satisfaction (see order of 14 July 2020, Shindler and Others v Commission, T‑627/19, EU:T:2020:335, paragraph 47 and the case-law cited).

64      Those are two separate issues (see, to that effect, judgments of 21 September 2000, EFMA v Council, C‑46/98 P, EU:C:2000:474, paragraph 38, and of 4 May 2022, CRIA and CCCMC v Commission, T‑30/19, EU:T:2022:266, paragraph 92 (not published)).

65      The view must be taken that where, in an action for annulment of a regulation imposing anti-dumping duties in which the EU institutions have applied the lesser duty rule, the applicant raises pleas or parts of pleas challenging the highest margin between the dumping margin and the injury margin, the question which arises is whether those pleas or parts are effective (see, to that effect, judgments of 4 March 2010, Foshan City Nanhai Golden Step Industrial v Council, T‑410/06, EU:T:2010:70, paragraphs 94 to 98, and of 21 March 2012, Fiskeri og Havbruksnæringens Landsforening and Others v Council, T‑115/06, not published, EU:T:2012:136, paragraphs 45 to 47).

66      Accordingly, it must be held that the parties’ arguments concerning whether the applicant has an interest in raising the pleas in question are irrelevant.

67      As to whether the pleas in question are effective, in response to written questions put by the Court, the Commission maintained its position that the applicant bore the burden of demonstrating that its pleas could affect the outcome of the investigation, but it also considered the impact that each of the pleas in question, if well founded, might have on the dumping margin. In particular, it contends that the validity of the fifth plea is a necessary, albeit not sufficient, condition for the infringements referred to in the pleas in question to bring the dumping margin below the injury margin. According to the Commission, if the fifth plea were well founded, it would be obliged to recalculate the dumping margin, which would then have to be reduced by 41.1 percentage points to 74.5%. That margin would still be higher than the injury margin of 72.9%, but if other pleas in question, or parts thereof, were also well founded, the dumping margin could drop below the injury margin. Conversely, the Commission states that, if the fifth plea were rejected, the dumping margin to be recalculated would remain higher than the injury margin, even if the other pleas in question were well founded. Those pleas relate to alleged errors the removal of which could, at most, reduce the dumping margin to a level which would remain above 90%. It would thus remain far above the injury margin.

68      Although the applicant accepts that the validity of the fifth plea could lead to a reduction in the dumping margin of 41.1 percentage points, it disputes the Commission’s calculations from which the latter concludes that that validity is a necessary precondition for the second, third and fourth pleas to be effective, in that, if they were upheld, the dumping margin would fall below the injury margin. According to the applicant, if all the pleas in question, except the fifth plea, were well founded, the dumping margin would be reduced to 71.1% and would thus be lower than the injury margin, which is 72.9%. At the hearing, in response to a question from the Court, the applicant confirmed that the figure of 71.1% presupposed that the second plea was well founded, leading to a reduction in the dumping margin of 8.6 percentage points. It also confirmed that, if that plea were rejected, that margin would be 79.7% and therefore higher than the injury margin.

69      Accordingly, the applicant accepts that, if the second and fifth pleas were rejected on the merits, the other pleas in question could not lead to a reduction in the dumping margin such as to bring it below the injury margin. The view must therefore be taken that, in that situation, the other pleas in question would necessarily be ineffective.

70      In those circumstances, the merits of the second and fifth pleas must be examined before ruling on whether the third and fourth pleas are effective.

 Second plea in law, alleging infringement of Article 2(6a)(a) of the basic regulation as regards the choice of appropriate representative country

71      The applicant submits that the Commission infringed Article 2(6a)(a) of the basic regulation in so far as it selected Türkiye as the appropriate representative country, on the basis of data relating to Ilkalem Ticaret V^e Sanayi AS (‘Ilkalem’), when it should have chosen Mexico, on the basis of data relating to Solutia Tlaxcala SA de CV (‘Solutia Tlaxcala’) or Wyn De Mexico Productos Quimicos SA de CV (‘Wyn’).

72      In the first place, the applicant submits that the Commission misinterpreted the requirement laid down in Article 2(6a)(a) of the basic regulation, according to which data relating to a company established in the envisaged country must be ‘readily available’ in order to be used.

73      In the second place, the applicant alleges breach of the duty of care which the Commission is required to comply with when choosing the appropriate representative country.

74      In the third place, the applicant argues that Mexico was the most appropriate representative country because it has a higher level of social and environmental protection than Türkiye.

75      The Commission disputes the applicant’s arguments.

76      Having reproduced the wording of Article 2(6a) of the basic regulation in paragraph 8 above, it is necessary at this juncture to summarise the main steps taken by the Commission in the present case when applying Article 2(6a)(a) of that regulation, as transpires from the contested regulation.

77      According to recital 175 of the contested regulation, the choice of representative country was based ‘on the following criteria:

–        A level of economic development similar to [China];

–        Production of the product under investigation in that country;

–        Availability of relevant public data in that country;

–        Where there is more than one possible representative country, preference was given, where appropriate, to the country with an adequate level of social and environmental protection’.

78      It follows from recitals 177 to 184, 198, 199 and 203 of the contested regulation that, after considering five countries as candidates for appropriate representative country, the Commission excluded three of them, leaving a choice between the two remaining countries, namely Mexico and Türkiye.

79      As regards Mexico, the Commission examined the availability of the financial data of Solutia Tlaxcala and Wyn (recitals 38, 200 to 202, 212, 229 and 230 of the contested regulation).

80      Concerning Solutia Tlaxcala, the Commission was confronted with the fact that its parent company, Solutia Europe SPRL/BVBA (‘Solutia Europe’), a PVA user established in Belgium, had provided it with the necessary financial data in confidential form only, which could not be accessed by the public, and that those data were not available in the Orbis database.

81      The Commission also stated that, although some exporting producers had claimed that the data relating to Solutia Tlaxcala were available in the Dun&Bradstreet database, they had merely pointed to that information as ‘prima facie evidence’ of the availability of such data, without producing the data in question. The Commission therefore concluded that it could not use those data in the proceeding.

82      Concerning Wyn, the Commission stated that the public financial data of that company were available only for the first six months of 2018 and that that period did not coincide with the period covered by its investigation and could not be regarded as representative of a whole year due to seasonal fluctuations. The Commission also found that Wyn had not been profitable in 2017. As a result, the Commission concluded that Mexico was not an appropriate representative country for the purposes of its investigation.

83      Concerning Türkiye, the Commission took the view that it could rely on the data relating to Ilkalem, which were available in the Orbis database, in particular for 2018, and which showed that although Ilkalem had made a loss that year, due to high financial expenses, an examination of the data relating to previous years made it possible to classify those expenses as extraordinary. Thus, the Commission concluded that the data relating to 2018 could be used, subject to an adjustment to take account of the extraordinary nature of the financial expenses borne that year (recitals 205, 206 and 213 to 215 of the contested regulation).

84      Furthermore, in recitals 221 and 226 of the contested regulation, the Commission stated that since it had established that Türkiye was the only available appropriate representative country, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of the first indent of Article 2(6a)(a) of the basic regulation.

85      The principles to be applied in interpreting a provision of EU law are recalled in paragraph 28 above.

86      From a literal perspective, the applicant maintains that the Commission’s interpretation of ‘readily available data’ is incompatible with the wording of Article 2(6a)(a) of the basic regulation, since the adverbs ‘readily’ and ‘publicly’ are not synonyms.

87      It should be pointed out that, although the contested regulation is not wholly unambiguous in that regard, in that it uses the expressions ‘public … data’ and ‘publicly available … data’ on several occasions (see, inter alia, recitals 175, 194, 202, 212 and 217 of that regulation), the Commission made the following statement in recital 228 of that regulation:

‘228 … According to Article 2(6a) of the basic Regulation, the data does not have to be “publicly available” but “readily available”. The Commission noted that “publicly available” means available to the public at large whereas “readily available” means available to everybody, provided that certain conditions, like a payment of a fee, have been fulfilled. Important to mention that all the information used to construct the normal value was made available on the open file. That means that even when the information is only available upon payment, all interested parties had access to it.’

88      In the light of that interpretation of ‘readily available’, the applicant is wrong to claim that the Commission confused the concepts of ‘publicly available’ and ‘readily available’. Indeed, the Commission drew a distinction between those two concepts, which it did not therefore consider to be equivalent.

89      From a contextual perspective, the applicant states that where the basic regulation provides that something is meant to be made public, it explicitly states that to be the case in the relevant provisions. Furthermore, it is apparent from WTO law that procedural obligations of confidentiality do not preclude, in substantive terms, a competent authority from using confidential information.

90      First, since it has already been pointed out that the Commission did not confuse the two concepts referred to in paragraph 88 above, it is irrelevant that, in some provisions of the basic regulation, the legislature specified that certain information was to be made available to the public.

91      Secondly, the Commission was entitled to contend that Article 2(6a)(a) of the basic regulation must be interpreted in the light of the requirements arising from the provisions of that regulation concerning confidentiality and those governing disclosure, in order to protect the rights of the defence.

92      From a teleological perspective, the applicant submits that Article 2(6a)(a) of the basic regulation must contribute to the objective of that regulation, which is to prevent dumping practices on the EU market and to ensure fair trade and competition in that market. Thus, the Commission’s choice of appropriate representative country cannot depend on whether a producer agrees to its data being disclosed to the public.

93      Although the basic regulation is intended to protect against dumped imports by preventing, inter alia, injury being caused to an industry established in the European Union (see, by analogy, order of 11 October 2011, DBV v Commission, T‑297/10, not published, EU:T:2011:583, paragraph 37; see also, to that effect and by analogy, judgment of 28 February 2008, Carboni e derivati, C‑263/06, EU:C:2008:128, paragraph 39), the legislature nevertheless decided to pursue that objective while taking account of the requirements relating to the confidentiality of certain information and the protection of the rights of the defence.

94      It is worth recalling the wording of the relevant provisions of the basic regulation in that regard.

95      Article 19 of the basic regulation provides as follows:

‘1.      Any information which is by nature confidential (for example, because its disclosure would be of significant competitive advantage to a competitor or would have a significantly adverse effect upon a person supplying the information or upon a person from whom the person supplying the information has acquired the information) or which is provided on a confidential basis by parties to an investigation shall, if good cause is shown, be treated as such by the authorities.

2.      Interested parties providing confidential information shall be required to provide non-confidential summaries thereof. Those summaries shall be in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence. In exceptional circumstances, such parties may indicate that such information is not capable of being summarised. In such exceptional circumstances, a statement of the reasons why such summarisation is not possible shall be provided.

3.      If it is considered that a request for confidentiality is not warranted and if the supplier of the information is either unwilling to make the information available or to authorise its disclosure in generalised or summary form, such information may be disregarded unless it can be satisfactorily demonstrated from appropriate sources that the information is correct. Requests for confidentiality shall not be arbitrarily rejected.

4.      This Article shall not preclude the disclosure of general information by the Union authorities, and, in particular, of the reasons on which decisions taken pursuant to this Regulation are based, or disclosure of the evidence relied on by the Union authorities in so far as is necessary to explain those reasons in court proceedings. Such disclosure shall take into account the legitimate interests of the parties concerned that their business secrets not be divulged.

5.      The Commission and Member States, including the officials of either, shall not reveal any information received pursuant to this Regulation for which confidential treatment has been requested by its supplier, without specific permission from that supplier.

…’

96      Article 20 of the basic regulation provides as follows:

‘1.      The complainants, importers and exporters and their representative associations, and representatives of the exporting country, may request disclosure of the details underlying the essential facts and considerations on the basis of which provisional measures have been imposed …

2.      The parties mentioned in paragraph 1 may request final disclosure of the essential facts and considerations on the basis of which it is intended to recommend the imposition of definitive measures, or the termination of an investigation or proceedings without the imposition of measures, particular attention being paid to the disclosure of any facts or considerations which are different from those used for any provisional measures.

…’

97      Article 6(7) of the basic regulation provides as follows:

‘7.      The complainants, importers and exporters … may, upon written request, inspect all information made available by any party to an investigation, as distinct from internal documents prepared by the authorities of the Union or its Member States, which is relevant to the presentation of their cases and not confidential within the meaning of Article 19, and is used in the investigation.

…’

98      By those provisions, the basic regulation is pursuing two objectives: on the one hand, to allow the interested parties effectively to defend their interests and, on the other hand, to preserve the confidentiality of the information collected in the course of the investigation (see, by analogy, judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 96; see also, to that effect and by analogy, judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 142 and the case-law cited).

99      As regards the first objective referred to in paragraph 98 above, it should be recalled that respect for the rights of the defence is, in all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of EU law which must be guaranteed even in the absence of any rules governing the proceedings in question. Respect for that principle is of crucial importance in anti-dumping investigations (see judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 139 and the case-law cited).

100    In accordance with that principle, the undertakings concerned should have been placed in a position during the administrative procedure in which they could effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegation concerning the existence of dumping and the resultant injury (see judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 140 and the case-law cited).

101    As regards the second objective referred to in paragraph 98 above, it must be recalled that the protection of business secrets is a general principle of EU law. The maintenance of fair competition is an important public interest, the safeguarding of which can justify a refusal to disclose information which reveals business secrets (see, to that effect, judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 165 and the case-law cited).

102    In order to reconcile the two objectives in question, in performing their duty to provide information, the EU institutions must act with all due diligence by seeking to provide the undertakings concerned, as far as is compatible with the obligation not to disclose business secrets, with information relevant to the defence of their interests, choosing, if necessary on their own initiative, the appropriate means of providing such information (see, to that effect, judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 141).

103    The need to reconcile those objectives also follows from the fact that, according to the case-law, Article 19 of the basic regulation is intended to protect not only the business secrets but also the defence rights of the other parties to the anti-dumping proceeding (see judgment of 15 October 2020, Zhejiang Jiuli Hi-Tech Metals v Commission, T‑307/18, not published, EU:T:2020:487, paragraph 82 and the case-law cited).

104    In the light of those provisions and principles, it must be held that the Commission, when seeking to obtain, under Article 2(6a)(a) of the basic regulation, data that are ‘readily available’, is entitled to refuse to use for that purpose data which are considered by the party providing them to be confidential and in respect of which it is unable to secure a non-confidential summary as a basis enabling the other interested parties in the investigation to exercise their rights of the defence.

105    That conclusion is not called into question by the Report of the Appellate Body, Thailand – Anti-dumping duties on angles, shapes and sections of iron or non-alloy steel and H-beams from Poland (WT/DS 122/AB/R), adopted by the DSB on 5 April 2001 (‘the angles and H-beams report’), relied on by the applicant.

106    Paragraph 111 of the angles and H-beams report states:

‘… the requirement in Article 3.1 [of the anti-dumping agreement] that an injury determination be based on “positive” evidence and involve an “objective” examination of the required elements of injury does not imply that the determination must be based only on reasoning or facts that were disclosed to, or discernible by, the parties to an anti-dumping investigation. Article 3.1, on the contrary, permits a[ competent] authority making an injury determination to base its determination on all relevant reasoning and facts before it.’

107    However, first of all, it must be noted that Article 3.1 of the anti-dumping agreement does not contain the condition – which, by contrast, appears in Article 2(6a)(a) of the basic regulation – that the data used by the Commission must be ‘readily available’.

108    Next, it should be borne in mind that, in paragraph 107 of the angles and H-beams report, the Appellate Body makes clear that ‘an anti-dumping investigation … involves the collection and assessment of both confidential and non-confidential information’ and that ‘an injury determination … must be based on the totality of that evidence’. It concludes that there is ‘nothing in Article 3.1 [of the anti-dumping agreement] which limits a[ competent] authority to base an injury determination only upon non-confidential information’. Therefore, while, in accordance with the guidance provided by that report, the competent authority may also use confidential information in addition to non-confidential information, it cannot rely exclusively on confidential information. That would have been the case if the Commission had used the data which Solutia Europe had provided to it regarding Solutia Tlaxcala.

109    Lastly, it must be pointed out that, in paragraph 109 of the angles and H-beams report, although the Appellate Body recalls that Article 6 of the anti-dumping agreement ‘establishes a framework of procedural and due process obligations which, amongst other matters, requires [competent] authorities to disclose certain evidence, during the investigation, to the interested parties’ and finds that ‘there is no justification for reading these obligations … into the substantive provisions of Article 3.1.’ of that agreement, it makes clear that, in so doing, it does ‘not … imply that the injury determination … in this case necessarily met the requirements of Article 6’. Indeed, according to the Appellate Body, as the Panel, whose report was challenged before it, ‘found that [the Republic of] Poland’s claim under Article 6 did not meet the requirements of Article 6.2 of the [Understanding on rules and procedures governing the settlement of disputes, set out in Annex 2 to the Agreement establishing the WTO], the issue was not considered by the Panel’.

110    Accordingly, the Appellate Body wished to avoid the situation whereby a party, which has failed to raise with the requisite clarity in its request for the establishment of a panel the question of compliance by the competent authority with the procedural obligations laid down in Article 6 of the anti-dumping agreement, relating to confidentiality and the rights of the defence, could cure that failure by maintaining that the assessment of infringement of the substantive provisions which it has properly brought before that panel includes an examination of compliance with those procedural obligations.

111    It follows that the angles and H-beams report cannot be construed as enshrining a general principle that a competent authority may in all circumstances use confidential information.

112    In the present case, it is common ground that Solutia Europe objected to the disclosure of the data concerning Solutia Tlaxcala and that it did not provide the Commission with a non-confidential summary of those data. Thus, under Article 19(3) of the basic regulation, the Commission was entitled to disregard those data, unless they could be obtained from other sources.

113    In that regard, the applicant states that the data relating to Solutia Tlaxcala are available in the Dun&Bradstreet subscription database. It claims that the Commission’s decision to subscribe only to the Orbis database is irrelevant.

114    It should be pointed out that, in its comments on final disclosure, the applicant drew the Commission’s attention to the fact that the Dun&Bradstreet database contained readily available data concerning Solutia Tlaxcala and inserted a hyperlink in the relevant passage of those comments, while stating that access to those data was subject to payment of a fee.

115    It is apparent from the replies of the main parties to written questions put by the Court that the hyperlink referred to by the applicant did not give access to the data concerning Solutia Tlaxcala contained in the Dun&Bradstreet database.

116    In addition, in its comments on final disclosure, the applicant merely stated that there was ‘prima facie’ evidence that the data concerning Solutia Tlaxcala in the Dun&Bradstreet database could be obtained.

117    It follows that the applicant itself had not accessed those data, with the result that it was unaware of the level of detail of the data and the period they covered.

118    The Commission was therefore right, in recital 230 of the contested regulation, to refuse to use those data.

119    As regards the applicant’s arguments alleging breach of the duty of care, where it relies on the principles deriving from the case-law on Article 2(7)(a) of the basic regulation, in the version prior to Regulation 2017/2321, which it claims are applicable by analogy, it is appropriate to recall the wording of that provision, which reads as follows:

‘In the case of imports from non-market-economy countries …, the normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including the Union, or, where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Union for the like product, duly adjusted if necessary to include a reasonable profit margin.

An appropriate market-economy third country shall be selected in a not unreasonable manner, due account being taken of any reliable information made available at the time of selection …’

120    According to the case-law on Article 2(7)(a) of the basic regulation, in the version prior to Regulation 2017/2321, the choice of ‘analogue country’ under that provision falls within the broad discretion enjoyed by the EU institutions in the sphere of the common commercial policy, by reason of the complexity of the economic and political situations which they have to examine (see, by analogy, judgment of 29 July 2019, Shanxi Taigang Stainless Steel v Commission, C‑436/18 P, EU:C:2019:643, paragraph 30 and the case-law cited). The exercise of the EU institutions’ discretion in choosing that country is subject to review by the Court. It is for the Courts of the European Union to verify whether the relevant procedural rules have been complied with, whether the facts on which the choice is based have been accurately stated and whether there has been a manifest error of appraisal or a misuse of powers. In particular, it is necessary to verify that those institutions have not neglected to take account of essential factors for the purpose of establishing the appropriate nature of the country chosen and that the information contained in the file in the case was considered with all the care required for it to be held that the normal value of the product concerned was determined in an appropriate and not unreasonable manner (see, to that effect and by analogy, judgments of 29 May 1997, Rotexchemie, C‑26/96, EU:C:1997:261, paragraphs 10 to 12; of 10 September 2015, Fliesen-Zentrum Deutschland, C‑687/13, EU:C:2015:573, paragraph 51; and of 23 April 2018, Shanxi Taigang Stainless Steel v Commission, T‑675/15, not published, EU:T:2018:209, paragraph 31 and the case-law cited).

121    Notwithstanding the differences between Article 2(6a)(a) of the basic regulation and the former Article 2(7)(a) thereof, those principles are applicable by analogy in the present case, as the Commission contends.

122    In this case, first, the applicant observes that the Commission accepted the data relating to Ilkalem despite the fact that, during the investigation period, that company was loss-making because of extraordinary financial expenses and that, therefore, it was necessary to make adjustments on the basis of figures relating to the previous three financial years. The Commission’s acceptance of those data is at odds with the fact that it rejected the data relating to Wyn on the ground that they covered a period which did not coincide with the investigation period. The Commission was therefore wrong to choose Ilkalem’s data over those of Wyn and Solutia Tlaxcala, which were not only ‘readily available’, but also full and complete.

123    It should be noted that the applicant does not dispute the veracity of the considerations set out in the contested regulation, pursuant to which the Commission determined that it could not rely on the data relating to Wyn because they did not cover the investigation period and showed that Wyn did not make a profit in 2017 (see paragraph 82 above). The applicant simply maintains that that determination is at variance with the fact that the Commission accepted the data concerning Ilkalem. However, it must be stated that those data, unlike the data relating to Wyn, were available for the whole of 2018, with the result that they covered at least part of the investigation period. In addition, those data also showed that Ilkalem had made profits during the previous three years and that the absence of profit in 2018 was due to particularly high financial expenses, which the Commission classified as extraordinary. The applicant does not deny that that classification was justified, nor has it demonstrated that the adjustments made by the Commission to Ilkalem’s data in respect of 2018 in order to offset the effect of those extraordinary expenses were inappropriate.

124    In the light of the broad discretion enjoyed by the Commission here as regards the choice of appropriate representative country (see paragraphs 120 and 121 above), the applicant must, if its plea is to be upheld, adduce sufficient evidence to render implausible the assessments of the facts in the contested regulation (see, to that effect and by analogy, judgment of 3 December 2019, Yieh United Steel v Commission, T‑607/15, EU:T:2019:831, paragraph 110 and the case-law cited).

125    The applicant’s present argument must therefore be rejected.

126    Secondly, the applicant submits that the Commission should, at the very least, have distinguished between the data concerning surrogate values for factors of production (‘the surrogate values’) and the data for SG&A costs and for profits. Ilkalem’s data are useful only for SG&A costs and for profits, while the surrogate values could be obtained from public sources, including the Global Trade Atlas database, which contains those values for Mexican raw materials. The applicant states that the Commission has already used data from different sources in an anti-dumping investigation, as have the authorities of the United States of America.

127    It should be noted that the applicant merely asserts that the Global Trade Atlas database contains surrogate values for Mexico, but does not explain how those values would be more relevant than the values for Türkiye. A fortiori, it does not demonstrate that the use of Turkish surrogate values was manifestly wrong.

128    In addition, the applicant does not explain why it would be manifestly wrong to use the data relating to one and the same third country both for the surrogate values and for SG&A costs and for profits.

129    The applicant relies on the Commission’s practice, which it claims shows that the Commission has already used data from different sources, and on the practice of the authorities of the United States of America, confirmed by the competent courts.

130    However, according to the case-law, the lawfulness of a regulation imposing anti-dumping duties must be assessed in the light of legal rules and, in particular, the provisions of the basic regulation, not on the basis of the EU institutions’ alleged previous practice in taking decisions (see, to that effect and by analogy, judgments of 10 February 2021, RFA International v Commission, C‑56/19 P, EU:C:2021:102, paragraph 79; of 4 October 2006, Moser Baer India v Council, T‑300/03, EU:T:2006:289, paragraph 45; and of 18 October 2016, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑351/13, not published, EU:T:2016:616, paragraph 107).

131    Moreover, as regards the practice of the authorities of the United States of America, it should be pointed out that that practice is concerned only with the application of the law of the United States of America, the provisions of which are not necessarily the same as those of the basic regulation, as interpreted by the Court of Justice and the General Court. Therefore, even if that practice concerned a factual and legal situation comparable to the one at issue here, which the applicant has not demonstrated, it cannot bind the General Court.

132    Consequently, the applicant’s present argument must be rejected.

133    Lastly, as regards the applicant’s argument that Mexico has a higher level of social and environmental protection than Türkiye, it should be noted that, according to the wording of the first indent of Article 2(6a)(a) of the basic regulation, the question of the level of those protections arises only ‘where there is more than one [appropriate representative] country’.

134    Since, in the present case, the Commission was justified in finding that there were relevant data on SG&A costs and on profits only for Türkiye, and not for Mexico, it was entitled to conclude, in recitals 221 and 226 of the contested regulation, that Türkiye was the only appropriate representative country and that, consequently, the question of the level of social and environmental protection did not arise.

135    In the light of the foregoing, the second plea in law must be rejected as unfounded.

 Fifth plea in law, alleging infringement of Article 18 of the basic regulation

136    The applicant submits that the Commission was wrong to calculate the normal value of the products manufactured by it on the basis of the facts available within the meaning of Article 18 as regards self-produced factors of production, such as steam and electricity, despite the fact that the applicant had cooperated to the best of its ability by replying to the Commission’s questionnaire.

137    According to the applicant, the Commission, which criticises it for failing to allocate to the product under investigation a share of the costs relating to the inputs needed for the self-produced factors of production it uses to produce PVA, did not take account of the fact that such allocation is impossible due to the characteristics of the applicant’s PVA production process.

138    Moreover, the applicant claims that since it cooperated with the Commission to the best of its ability, the Commission was required, under Article 18(3) of the basic regulation, to take into account the information which the applicant had provided to it and it was not entitled to use the facts available within the meaning of that article.

139    The Commission, supported by Sekisui, disputes the applicant’s arguments.

140    It should be recalled that the terms of the relevant provisions of Article 18 of the basic regulation, concerning ‘non-cooperation’, are as follows:

‘1.      In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within the time limits provided for in this Regulation, or significantly impedes the investigation, provisional or final findings, affirmative or negative, may be made on the basis of the facts available.

…

3.      Where the information submitted by an interested party is not ideal in all respects, it shall nevertheless not be disregarded, provided that any deficiencies are not such as to cause undue difficulty in arriving at a reasonably accurate finding and that the information is appropriately submitted in good time and is verifiable, and that the party has acted to the best of its ability.

…’

141    In order to understand the rationale for Article 18 of the basic regulation, it must be recalled that it is for the Commission, as the investigating authority, to establish that the product concerned has been dumped, that there has been injury and that there is a causal link between the dumped imports and the proven injury. In so far as there is no provision in the basic regulation which confers on the Commission any power to compel the interested parties to participate in the investigation or to provide information, the Commission is reliant on the voluntary cooperation of those parties in supplying the necessary information. In that context, it follows from recital 27 of the basic regulation that the EU legislature considered it ‘necessary to provide that, where parties do not cooperate satisfactorily, other information may be used to establish findings and that such information may be less favourable to the parties than if they had cooperated’. Thus, the objective of Article 18 of the basic regulation is to enable the Commission to continue with the investigation even though the interested parties refuse to cooperate or do not cooperate satisfactorily. Accordingly, given that they are required to cooperate to the best of their ability, the interested parties must provide all the information that they have which the institutions consider necessary for the purpose of reaching their findings (see, by analogy, judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 54 to 56).

142    The basic regulation does not define what is ‘necessary’ information within the meaning of Article 18(1) thereof.

143    According to the case-law, it follows from the wording, context and objective of Article 18(1) of the basic regulation that the term ‘necessary information’ refers to information held by the interested parties which the EU institutions ask them to provide in order to enable them to reach the appropriate findings in an anti-dumping investigation (see, by analogy, judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraph 57).

144    In addition, it should be pointed out that Article 18 of the basic regulation constitutes the implementation, in EU law, of the content of Article 6.8 of, and Annex II to, the anti-dumping agreement (‘Annex II’), and must be interpreted in the light thereof as far as possible (see, by analogy, judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council, T‑633/11, not published, EU:T:2014:271, paragraph 40 and the case-law cited).

145    Article 6.8 of the anti-dumping agreement provides as follows:

‘In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. The provisions of Annex II shall be observed in the application of this paragraph.’

146    Article 5 of Annex II corresponds to Article 18(3) of the basic regulation, since it provides as follows:

‘Even though the information provided may not be ideal in all respects, this should not justify the authorities from disregarding it, provided the interested party has acted to the best of its ability.’

147    It should be noted that Annex II is ‘incorporated by reference into Article 6.8’ of the anti-dumping agreement (Report of the Appellate Body, United States – Anti-dumping measures on certain hot-rolled steel products from Japan (WT/DS 184/AB/R), adopted by the DSB on 23 August 2001 (paragraph 75)) and that the provisions of that annex are mandatory, despite the fact that they are often phrased in the conditional tense (Panel Report, United States – Anti-dumping and countervailing measures on steel plate from India (WT/DS 206/R), adopted by the DSB on 29 July 2002 (paragraph 7.56)).

148    According to the Panel Report, Korea – Anti-dumping duties on imports of certain paper from Indonesia (WT/DS 312/R), adopted by the DSB on 28 October 2005 (paragraph 7.43), the decision as to whether or not a given piece of information constitutes ‘necessary information’ within the meaning of Article 6.8 of the anti-dumping agreement has to be made in the light of the specific circumstances of each investigation, not in the abstract. Moreover, according to the Panel Report, European Communities – Anti-dumping measure on farmed salmon from Norway (WT/DS 337/R), adopted by the DSB on 15 January 2008 (paragraph 7.343), specific information held by an interested party which is requested by the authority conducting the anti-dumping investigation (‘the competent authority’) for the purpose of making ‘determinations’ must be regarded as necessary within the meaning of that provision.

149    Moreover, it has been held that the information relating to production volumes and manufacturing costs of the product under investigation is clearly necessary information within the meaning of Article 18(1) of the basic regulation (see, by analogy, judgment of 22 September 2021, NLMK v Commission, T‑752/16, not published, EU:T:2021:611, paragraph 53).

150    In the present case, it follows from recitals 274, 275 and 317 to 322 of the contested regulation and from the details provided by the Commission during the proceedings, in response to a question from the Court, that the Commission, in order to construct the normal value, had recourse to the facts available within the meaning of Article 18 in order to establish the consumption volumes of inputs, such as coal and water, employed by the applicant to produce the self-produced factors of production used in its PVA production, such as electricity and steam. The applicant had not provided the Commission with the information which the latter considered necessary for that purpose.

151    It is not disputed that self-produced factors of production play a significant role in the production of PVA. Those factors of production in turn require inputs, which thus represent costs incurred by the applicant in producing PVA. Since the normal value in the present case was constructed using a method based on production costs, the Commission needed to be acquainted with the consumption volumes of all the inputs used to produce PVA, including therefore the inputs for producing self-produced factors of production.

152    The applicant claims that it was impossible for it to supply the data requested by the Commission due to the specific features of its production process, which the questionnaire prepared by the Commission did not take into account. It states that self-produced factors of production are not used solely to produce PVA. The applicant also adverts to the risk of double counting which, as it explained during the investigation, arises from the fact that steam generated by coal boilers is used, first, to produce energy and, subsequently, to produce PVA, with electricity which is not therefore generated directly by coal. Therefore, that self-produced electricity and steam are not comparable to traditional inputs, such as coal. In addition, the applicant states that its process is an entirely chemical reaction during which different ingredients work together and sometimes consume each other, leaving residues which may be reused or which are transformed into other substances.

153    It should be recalled that, according to recital 319 of the contested regulation, the applicant had ‘already reported the inputs for producing the self-produced factors of production’. The Commission concludes that ‘these inputs could equally be allocated to the product under investigation’.

154    It is apparent from recital 319 of the contested regulation that the applicant had indicated to the Commission which inputs were needed to produce the self-produced factors of production. However, the applicant considers that it is not in a position to state to what extent those self-produced factors of production, and therefore the inputs needed to produce them, can be allocated to the production of PVA.

155    It follows that what the applicant is actually objecting to is the validity of the method used by the Commission to construct the normal value, in so far as that method resulted in overestimation of the consumption of the inputs concerned, which were allocated in excess to the production of PVA, when the self-produced factors of production were not used exclusively to produce those inputs. That objection is not such as to demonstrate that it was impossible to supply the information requested by the Commission.

156    It should also be noted that, in order to prevent the Commission from having recourse to the facts available within the meaning of Article 18, the applicant could have forwarded that information to it, without prejudice to the possibility of mounting a substantive challenge to the Commission’s use of the information, including before the Court.

157    Accordingly, the applicant’s arguments alleging infringement of Article 18(1) of the basic regulation must be rejected.

158    As regards its arguments claiming infringement of Article 18(3) of the basic regulation, it should be recalled that, according to the case-law, paragraphs 1 and 3 of Article 18 of that regulation cover different situations. Thus, whereas Article 18(1) of the basic regulation sets out in general terms cases in which the information needed by the institutions for the purposes of the investigation has not been supplied, Article 18(3) of that regulation contemplates the cases in which the information necessary for the purposes of the investigation has been supplied but is irrelevant, with the result that the facts available do not necessarily have to be used (see, to that effect and by analogy, judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council, T‑633/11, not published, EU:T:2014:271, paragraph 98 and the case-law cited).

159    In the present case, the Commission used the facts available within the meaning of Article 18 only as a substitute for the information which the applicant had not supplied, owing to the alleged impossibility of doing so.

160    Furthermore, it should be made clear that the degree of effort displayed by an interested party in submitting certain information does not necessarily reflect the substantive quality of the information supplied, and is not, in any case, the only determinant thereof. Thus, where the requested information is not ultimately obtained, the Commission is entitled to resort to the facts available within the meaning of Article 18 in respect of that information (see, by analogy, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraph 104).

161    Since the applicant did not supply the information requested by the Commission regarding the inputs for self-produced factors of production, Article 18(3) of the basic regulation was not applicable and the Commission could only use the facts available within the meaning of Article 18 as a substitute for that information.

162    In any event, according to the Appellate Body, paragraph 5 of Annex II requires a very significant degree of effort from interested parties (Report of the Appellate Body, United States – Anti-dumping measures on certain hot-rolled steel products from Japan (WT/DS 184/AB/R), adopted by the DSB on 23 August 2001 (paragraph 102)).

163    The applicant cannot be regarded as having made such an effort, since it refused to carry out the accounting exercise required by the Commission in order to allocate a share of the production costs for self-produced factors of production to PVA.

164    Accordingly, the applicant’s arguments alleging infringement of Article 18(3) of the basic regulation must also be rejected.

165    In the reply, the applicant submits that the Commission did not provide it in good time with the ‘verification report’ which that institution is required to forward to an interested party before sending the letter informing that party of its intention to use the facts available within the meaning of Article 18. That procedural irregularity constitutes a breach of the applicant’s rights of defence.

166    It must be recalled that, according to the case-law, although an applicant cannot be required to show that the Commission’s decision would have been different in the absence of the procedural irregularity in question, but simply that such a possibility cannot be totally ruled out, since that party would have been better able to defend itself had there been no irregularity, the fact remains that the existence of an irregularity relating to the rights of the defence can result in the annulment of the measure in question only where there is a possibility that, due to that irregularity, the administrative procedure could have resulted in a different outcome and thus in fact adversely affected the rights of the defence (see judgment of 5 May 2022, Zhejiang Jiuli Hi-Tech Metals v Commission, C‑718/20 P, EU:C:2022:362, paragraph 49 and the case-law cited).

167    The applicant has not put forward any evidence to show that it could not be ruled out that the outcome of the procedure might have been different if it had received the ‘verification report’ earlier.

168    Accordingly, the applicant’s present argument must be rejected as unfounded, without it being necessary to rule on its admissibility, which is disputed by the Commission on the ground that it was not raised in the application.

169    In the light of the foregoing, the fifth plea in law must be rejected as unfounded.

170    In addition, having regard to the considerations set out in paragraph 69 above, the rejection of the second and fifth pleas in law as unfounded means that the third and fourth pleas in law may be rejected as ineffective.

 Sixth plea in law, alleging infringement of Article 3(2) and (3) of the basic regulation when establishing price undercutting, and infringement of Article 3(6) of that regulation

171    The sixth plea is in three parts, all relating to infringement of Article 3(2) and (3) of the basic regulation. More specifically, those parts concern, first, failure to conduct a segmented price undercutting analysis; secondly, failure to make adjustments to account for quality differences between imported PVA and PVA produced in the European Union; and, thirdly, failure to establish price undercutting for the relevant product as a whole. The applicant also relies on the consequent infringement of Article 3(6) of that regulation.

172    Since, in addition to challenging the merits of that plea, the Commission contends that the plea is ineffective, that issue must be examined first of all.

 Whether the sixth plea in law is effective

173    The definition of ineffectiveness of a plea is set out in paragraph 62 above.

174    The Commission contends that, in the contested regulation, in addition to examining price undercutting by imports, it found that there was price suppression in respect of PVA sold by the Union industry, as is apparent from recitals 460 to 462, 473 and 490 of that regulation. The applicant had failed to address how its suppression findings would be insufficient to support its conclusion that the dumped imports were causing injury to the Union industry. Thus, the sixth plea, by which the applicant challenges the examination of price undercutting by imports, is, it argues, ineffective.

175    The applicant responds that simple statements, not supported by evidence, concerning price suppression cannot remedy the infringements of Article 3(2) and (3) of the basic regulation invoked by the present plea.

176    It should be recalled that the terms of the relevant provisions of Article 3 of the basic regulation are as follows:

‘1.      Pursuant to this Regulation, the term “injury” shall, unless otherwise specified, be taken to mean material injury to the Union industry, threat of material injury to the Union industry or material retardation of the establishment of such an industry and shall be interpreted in accordance with the provisions of this Article.

2.      A determination of injury shall be based on positive evidence and shall involve an objective examination of:

(a)      the volume of the dumped imports and the effect of the dumped imports on prices in the Union market for like products; and

(b)      the consequent impact of those imports on the Union industry.

3.      With regard to the volume of the dumped imports, consideration shall be given to whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in the Union. With regard to the effect of the dumped imports on prices, consideration shall be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product of the Union industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree. No one or more of those factors can necessarily give decisive guidance.

…

5.      The examination of the impact of the dumped imports on the Union industry concerned shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry …

6.      It must be demonstrated, from all the relevant evidence presented in relation to paragraph 2, that the dumped imports are causing injury within the meaning of this Regulation. Specifically, that shall entail demonstrating that the volume and/or price levels identified pursuant to paragraph 3 are responsible for an impact on the Union industry as provided for in paragraph 5, and that that impact exists to a degree which enables it to be classified as material.’

177    The provisions of Article 3(2), (3) (5) and (6) of the basic regulation are highly similar or identical to those of Article 3.1, Article 3.2 and Article 3.5 of the anti-dumping agreement. Therefore, the principles referred to in paragraphs 20 to 22 apply.

178    According to the Report of the Appellate Body, China – Countervailing and anti-dumping duties on grain oriented flat-rolled electrical steel from the United States (WT/DS 414/AB/R), adopted by the DSB on 16 November 2012 (paragraph 137), the elements relevant to the consideration of significant price undercutting may differ from those relevant to the consideration of significant price depression and suppression. Thus, even if prices of subject imports do not significantly undercut those of like domestic products, subject imports could still have a price-depressing or price-suppressing effect on domestic prices.

179    Similarly, it is apparent from the Panel Report, Korea – Anti-dumping duties on pneumatic valves from Japan (WT/DS 504/R), adopted by the DSB on 30 September 2019 (paragraph 7.299), that, while the existence of price undercutting by imports is frequently relied on as an element suggesting that the effect of dumped imports is depression or suppression of prices in the importing country industry, the competent authority may properly consider that the effect of dumped imports is price depression or price suppression notwithstanding the absence of undercutting.

180    In the present case, the parties are agreed that, in principle, suppression of Union industry prices can occur even if there is no price undercutting by imports.

181    However, whereas, according to the Commission, the findings in the contested regulation concerning the existence of Union industry price suppression are independent of those concerning price undercutting by imports, the applicant argues that that suppression is a consequence of that undercutting.

182    It should be recalled that recital 490 of the contested regulation reads as follows:

‘The analysis of the injury indicators in recitals (398) to (478) shows that the economic situation of the Union industry worsened during the period considered and this coincided with a significant increase of dumped imports from the country concerned, which were found to undercut the Union industry prices during the investigation period and causing significant price suppression, as the Union industry was not able to increase its prices in line with the increase of cost of production.’

183    On the basis of the sole conjunction ‘and’ which appears, in some language versions of the contested regulation, between ‘undercut the Union industry prices during the investigation period’ and ‘causing significant price suppression’, recital 490 of that regulation might be read as meaning that the significant increase in Chinese imports resulted, on the one hand, in price undercutting and, on the other, in a price suppression that is independent of the price undercutting.

184    It is appropriate nevertheless to determine whether the contested regulation contains an analysis of the link between that price suppression and the increase in imports that may be based on elements other than those relating to price undercutting.

185    In that respect, the Commission invokes recitals 460 to 462 and 473 of the contested regulation.

186    It is apparent from recitals 460 to 462 and 473 of the contested regulation that the Commission studied the evolution of Union industry sales prices and found that those prices had increased by 14% during the period considered, whereas the unit cost of production had increased by 24%, because of the increase in the price of the principal raw material used. It noted that the price pressure operated by the Chinese imports had prevented the Union industry from raising its prices further and offsetting that increase.

187    It follows that recitals 460 to 462 and 473 of the contested regulation cannot be interpreted as meaning that the suppression of Union industry prices arises from factors other than the undercutting of prices by imports. The reason why, notwithstanding the significant increase in the unit cost of production, the Union industry did not increase its prices commensurately is the pressure exerted by the dumped imports. That pressure flows from the fact that the Chinese exporting producers’ prices are lower than those of the Union industry, which reflects the existence of price undercutting by imports.

188    Furthermore, the Commission is wrong to rely on paragraphs 95 to 99 of the judgment of 14 September 2022, Methanol Holdings (Trinidad) v Commission (T‑744/19, under appeal, EU:T:2022:558), and paragraphs 257 to 261 of the judgment of 14 September 2022, Nevinnomysskiy Azot and NAK ‘Azot’ v Commission (T‑865/19, not published, under appeal, EU:T:2022:559), in support of the contention that the applicant’s arguments concerning its price undercutting analysis are ineffective. As regards the first of those judgments, the issue dealt with in the paragraphs on which the Commission relies concerned the admissibility of a complaint raised in the reply, whereas in the present case the sixth plea was raised in the application. Moreover, in both judgments, in the paragraphs immediately following those on which the Commission relies, the Court pointed out that there was a link between, on the one hand, the price undercutting and, on the other, the price depression and suppression. Thus, the Court did not attribute any independent value to the price depression or suppression in its finding of injury to the Union industry.

189    In the light of the foregoing, it must be concluded that, contrary to the Commission’s contention, the sixth plea in law is effective, and the question of its merits must therefore be examined.

 The merits of the sixth plea in law

–       First part

190    The applicant submits that, contrary to the Commission’s finding in the contested regulation, the PVA market is divided into two segments. The first segment covers high-quality PVA grades, characterised by narrow viscosity and hydrolysis ranges, a low methanol content, a low ash content and a smaller particle size. Those PVA grades are sold at higher prices. The second segment concerns lower-quality grades, characterised by wide viscosity and hydrolysis ranges, a high methanol content, a high ash content and a larger particle size. Those PVA grades are sold at lower prices.

191    The applicant submits that while, in theory, certain industries using lower-quality PVA grades might be able to switch to high-grade PVA, such a switch would not be economically logical. Meanwhile, industries using higher-quality grades of PVA cannot replace them with lower-quality grades.

192    Due to the significant differences in prices and quality between the PVA grades pertaining to the abovementioned first and second market segments, those grades are not directly interchangeable on the demand side.

193    According to the applicant, since the PVA market is divided into the two segments referred to above, the Commission should have taken their existence into consideration in its price undercutting analysis, particularly given that many Chinese producers were primarily producing PVA pertaining to the low market segment, whereas PVA produced in the European Union were usually in the high market segment.

194    In support of its arguments, the applicant relies, inter alia, on the Report of the Appellate Body, China – Measures imposing anti-dumping duties on high-performance stainless-steel seamless tubes (‘HP-SSST’) from Japan (WT/DS 454/AB/R), adopted by the DSB on 28 October 2015 (paragraph 5.181) (‘the HP-SSST report’).

195    Following delivery of the judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube (C‑891/19 P, EU:C:2022:38), the applicant, in response to a written question from the General Court, explained its arguments in the light of the guidance stemming from that judgment, by which the Court of Justice set aside the judgment of 24 September 2019, Hubei Xinyegang Special Tube v Commission (T‑500/17, not published, EU:T:2019:691), which the applicant had invoked in its pleadings. In its view, the present case entails the three exceptional circumstances, as set out in that judgment of the Court of Justice, in which the Commission cannot simply examine price undercutting on the basis of product control numbers (‘PCN’) but is required to carry out an analysis by market segment. First, according to the applicant, the PVA market is divided into two distinct segments; secondly, PVA prices are significantly different depending on the segment; and, thirdly, Union industry sales of PVA products are concentrated in the high-quality PVA segment, whereas imports from China are concentrated in the lower-quality segment.

196    The Commission, supported by Kuraray and by Sekisui, disputes the applicant’s arguments.

197    The relevant provisions of Article 3 of the basic regulation were recalled in paragraph 176 above.

198    As a preliminary matter, it must be borne in mind that, according to settled 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 and political situations which they have to examine. That broad discretion covers, inter alia, the determination of injury caused to the Union industry in an anti-dumping proceeding. The judicial review of such an appraisal must therefore be limited to verifying whether relevant procedural rules have been complied with, whether the facts relied on have been accurately stated, and whether there has been a manifest error in the appraisal of those facts or a misuse of powers (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraphs 35 and 36 and the case-law cited).

199    In addition, the General Court’s review of the evidence on which the EU institutions based their findings does not constitute a new assessment of the facts replacing that made by the institutions. That review does not encroach on the broad discretion of those institutions in the field of commercial policy, but is restricted to showing whether that evidence was able to support the conclusions reached by the institutions. The General Court must therefore not only establish whether the evidence put forward is factually accurate, reliable and consistent but also ascertain whether that evidence contained all the relevant information which had to be taken into account in order to assess a complex situation and whether it was capable of substantiating the conclusions reached (see judgment of 12 May 2022, Commission v Hansol Paper, C‑260/20 P, EU:C:2022:370, paragraph 59 and the case-law cited).

200    As regards, more specifically, the calculation of the price undercutting of imports, it follows from the case-law that that calculation is carried out, in accordance with Article 3(2) and (3) of the basic regulation, for the purposes of determining the existence of injury suffered by the Union industry by reason of those imports and it is used, more broadly, to assess that injury and to determine the injury margin, namely the injury elimination level (see, by analogy, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 176).

201    The basic regulation does not contain any definition of the concept of ‘price undercutting’ and does not lay down any method for the calculation of that concept (judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 73; see also, by analogy, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 175).

202    However, it is apparent from the very wording of Article 3(3) of the basic regulation that the method used to determine possible price undercutting must, in principle, be applied at the level of the ‘like product’, within the meaning of Article 1(4) of that regulation, even though that product may consist of different product types falling within several market segments (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 74 and the case-law cited).

203    Accordingly, the basic regulation does not, in principle, impose any obligation on the Commission to carry out an analysis of the existence of price undercutting at a level other than that of the like product (judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 75).

204    That interpretation is confirmed by paragraph 5.180 of the HP-SSST report, relied on by the applicant, according to which the competent authority is not required, under Article 3.2 of the anti-dumping agreement, to establish price undercutting for each of the product types under investigation or for the entire range of products constituting the like domestic product (judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 76).

205    However, as confirmed in paragraph 5.180 of the HP-SSST report, since, under Article 3(2) of the basic regulation, the Commission is required to carry out an ‘objective examination’ of the effect of the dumped imports on prices in the Union industry for like products, it is required to take account in its analysis of price undercutting of all the relevant positive evidence, including, where applicable, evidence relating to the various market segments of the product under consideration (judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 77).

206    It is also apparent from the case-law that examination of price undercutting on the basis of a method consisting in a PCN-by-PCN comparison (‘the PCN method’) does enable, to a certain extent, account to be taken of the possible segmentation of the market for the product under consideration (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraphs 106, 113 and 114).

207    The fact remains that, in order to ensure that the analysis of price undercutting is objective, the Commission may, in certain circumstances, be required to carry out such an analysis at the level of the market segments of the product in question, even though the broad discretion enjoyed by that institution, in particular in determining the existence of injury (see paragraph 198 above), extends, at the very least, to decisions on the choice of method of analysis, to the data and evidence to be gathered, to the method of calculation to be used in order to determine the undercutting margin and to the interpretation and evaluation of the data gathered (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 78).

208    Accordingly, the Commission may, in certain exceptional circumstances, be required to carry out an additional analysis of price undercutting consisting of a comparison of the prices in each segment in addition to the application of the PCN method (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 111).

209    Those exceptional circumstances relate to the existence both of a clear segmentation of the market for the product under consideration involving significant variations between market segments (‘the first condition’) and a situation characterised by a high concentration of domestic sales and dumped imports in separate segments (‘the second condition’) (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraphs 79 to 81, 110 and 111).

210    The arguments put forward by the applicant in support of the present part of the sixth plea must be examined in the light of those considerations.

211    In the contested regulation, the Commission stated as follows:

‘(60)      The information collected during the investigation also showed that some of these grades (sold both by the Union industry and exporting producers) have a broad range of application and, generally, have a lower price. Other more specialised grades designed for applications with narrow specifications … are on average more expensive. These grades are also sold by Union and exporting producers.

(61)      However, despite a large number of grades, the Commission found that there is no defined segments in the PVA market. Different users can source a number of PVA grades, depending on their required technical specifications. For some users the ash content is the most important element, for others the viscosity, and some are able to use mostly any of the specification. Each user industry can use a different set of PVA grades interchangeably. Even though certain users … are more limited in terms of the number of grades they can use, their grade range still overlaps with other type of users, which are able to source a wider range of grades.

(62)      For the reasons above, the Commission concluded that all grades compete with each other, at least to a certain extent, and therefore a segment analysis was not warranted nor appropriate in this case …

(64)      The analysis carried out by the Commission confirmed that the different grades, as explained in recital (61), are interchangeable between each other, at least to a certain extent. Even if it is true that certain users can source only a limited set of grades for their application, these grades do not pertain exclusively to one user’s downstream industry but overlap with the grades sourced by other downstream applications. Moreover, the investigation revealed that the Chinese exporting producers supply grades for all the four main applications of PVA and compete in full with the grades sold by the Union industry.

…

(78)      [The] various grades of PVA share the basic characteristics and their uses are to a large extent identical and interchangeable. The sole ash or methanol content levels do not define, alone, the applications or the price of the product concerned as it is the combination with the other relevant characteristics, such as viscosity and hydrolysis, which defines the grade characteristics, its possible end use and the selling price.

(79)      The evidence collected in the investigation revealed that, while the average price difference between the PVA grades with “low ash content” versus those with “standard ash content” is about 10%. However, PVA prices can vary up to 40% between PVA grades with the same ash content. In addition, certain allegedly cheaper grades with a “standard” ash content can be up to 27% more expensive than those with “low ash content” grades. Therefore it cannot be concluded, as the interested parties claimed, that the Union market was divided into high-quality PVA (produced by the Union industry) and low-quality PVA (imported from [China]) based on the ash and methanol content, neither that this alleged division is reflected in the prices and the production cost. On the contrary, … several grades with alleged “standard” specifications are also in competition with alleged “high-end” grades of the like product.’

212    It follows that the Commission ruled out the existence of any clear segmentation of the PVA market and a high concentration of Union industry sales and dumped imports in two distinct segments.

213    In so far as the Commission was required to carry out an objective examination of price undercutting (see paragraphs 205 and 207 above), it is necessary to ascertain whether its findings are sufficiently supported by the documents in the case file of the procedure which led to the adoption of the contested regulation.

214    In that regard, it should be noted that a regulation imposing anti-dumping duties must contain the essential part of the Commission’s reasoning, but need not include specific reasons for each of the numerous factual arguments relied on by the interested parties. The Court may therefore ask the Commission for additional explanations and take them into account when carrying out its review, provided that they are based on material in the Commission’s file (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraphs 92, 93, 95 and 96 and the case-law cited).

215    In the present case, the Court asked the Commission to specify the elements of the case file which enabled it to rule out both the existence of a segmented market and the concentration of imports and Union industry sales in separate segments.

216    On that point, the Commission referred to the replies of PVA users to its request for information about their PVA purchases by PCN and to the information supplied to it by Kuraray.

217    As regards the lack of clear segmentation, the Commission produced an example of its request for information, although it did not produce the replies received, which were described as confidential. It also lodged an extract from Kuraray’s website. At the hearing, the Commission stated that an earlier version of that extract was included in the case file of the procedure which led to the adoption of the contested regulation, and this was not contradicted by the applicant.

218    It must be stated that the extract of Kuraray’s website shows that there are several grades of PVA whose main uses are both in industries that would use high-quality PVA and in industries that would use lower-quality PVA. As the Commission observes, several PVA grades used in the paper and adhesives industries are also used in the emulsion polymerisation and polyvinyl butyral production industries. Consequently, that extract serves to confirm that the PVA market is not clearly segmented.

219    Furthermore, it should be noted that, in so far as the first condition relates to the existence of clear segmentation of the product at issue, in order to rule out the possibility of that condition being satisfied, contrary to the applicant’s contention, it is not necessary that all users should be able to purchase all PVA grades and that those grades should therefore be completely interchangeable.

220    Thus, it must be held that the first condition is not satisfied in the present case.

221    Accordingly, it is not necessary to rule on the second condition, as it may already be concluded that the Commission was not required to carry out an additional analysis of price undercutting over and above that based on the PCN method.

222    In any event, as regards the second condition, the following must be noted.

223    The case file in the present case includes three tables that were in the case file of the procedure which led to the adoption of the contested regulation, each table relating to one of the three main Chinese exporting producers that cooperated, including the applicant. Displayed in those tables are the quantities of PVA, by PCN, imported into the European Union. However, on grounds of confidentiality, the tables do not show, by PCN, the importance of sales made by Kuraray. A study of the figures in those tables serves to establish that the imports, taken as a whole, cover eight different PCN, in their revised versions, which are not disputed by the applicant, and that the quantities in respect of two of those PCN are equivalent, in each case, to approximately 29% of total imports from those exporting producers, whereas the quantities in respect of six other PCN are, in percentage terms, between 3.24 and 9.54%.

224    Consequently, the imports cannot be considered to represent a high concentration and, therefore, even without the data relating to Kuraray’s sales, it must be held that the second condition is not satisfied.

225    Since the conditions laid down by the case-law recalled in paragraph 209 are not satisfied, it must be concluded that the Commission was not required to carry out an additional analysis of price undercutting over and above that based on the PCN method.

226    In the light of the foregoing considerations, the first part of the sixth plea in law must be rejected.

–       Second part

227    The applicant submits that the Commission did not properly establish price undercutting because, while it made an adjustment of 10% to account for the lower quality, in terms of ash content, of the PVA imported from China compared to the PVA produced in the European Union, it refused to make other adjustments to reflect the other quality differences between those PVA.

228    The Commission, supported by Sekisui, disputes the applicant’s arguments.

229    It should be recalled that the relevant recitals of the contested regulation read as follows:

‘(423)      Price undercutting of the imports was established on the basis of data of the cooperating exporting producers in the country concerned and domestic sales data provided by the Union industry for the period of investigation …

(424)      The price comparison was made on a type-by-type basis for transactions at the same level of trade, and after deduction of deferred discounts. When necessary, the import price of the product concerned imported from [China] was duly adjusted when compared with the comparable product type sold by the Union industry.

(425)      As regards the differences in certain characteristics between the product concerned and the like product … the product types imported from [China] compete with the product types produced and sold by the Union industry. However, as the ash content of the PVA produced and sold by the cooperating exporting producers was overall higher than the ash content of the PVA produced and sold by the Union industry, the Commission considered that an adjustment was warranted to ensure a fair comparison between the Chinese and EU product types on the basis of PCNs. The Commission established the adjustment on the basis of the difference found for PVA imports with high and low ash content from third countries on the basis of information provided by users. The price difference was established at 10%.

(426)      On this basis, an adjustment of 10% was added to the CIF price of the PVA with high ash content sold by the cooperating exporting producers.

…

(429)      Furthermore, as the methanol content and the packing have a negligible effect on the prices …, the Commission concluded that for undercutting purposes it was appropriate to disregard these characteristics.’

230    Before the Court, the Commission explained that, as could be seen from a questionnaire which it had sent to Chinese exporting producers, the PCNs had been established on the basis of five characteristics of PVA, that is to say, their viscosity, their degree of hydrolysis, their ash content, their methanol content and their packaging.

231    It follows that the Commission considered it necessary to apply an upward adjustment of 10% to the prices of certain product types imported from China, which corresponded, in terms of viscosity and degree of hydrolysis, to product types sold by the Union industry, because of differences in ash content, which was higher in the former than in the latter. By contrast, it ruled out the possibility of other adjustments being warranted on the basis of differences in respect of methanol content and packaging.

232    While the applicant does not challenge the merits of the 10% adjustment applied by the Commission because of differences in ash content, it claims that other adjustments were necessary.

233    However, it did not produce any evidence capable of demonstrating that the Commission had made a manifest error of assessment in finding that the differences, in terms of methanol content and packaging, between product types that were comparable in terms of their viscosity and their degree of hydrolysis did not have a significant effect on their prices.

234    Accordingly, the second part of the sixth plea in law must be rejected.

–       Third part

235    The applicant submits that it is apparent from recitals 432 and 433 of the contested regulation and from the information it was able to obtain from the Commission and information provided by other exporting producers that, in its price undercutting analysis, the Commission compared 100% of the PVA imports from China with 82% of the Union industry’s sales of PVA. The Commission found that there was an 82% overlap between the PCNs sold by the Union industry and those sold by the Chinese exporting producers. The Commission thus excluded from its analysis 18% of the sales made by the Union industry. In so doing, the Commission infringed the obligation under Article 3(2) and (3) of the basic regulation to establish price undercutting for the product concerned as a whole.

236    The applicant disputes that the contested regulation can be interpreted as meaning that the Commission compared 100% of the Union industry’s sales with 82% of the sales made by the Chinese exporting producers, and relies for this purpose on the price undercutting calculations in relation to the applicant itself and to the other exporting producers, from which it may be inferred that 100% of the imports were compared with 82% of the Union industry’s sales. In any event, in its view, even if that portrayal of the facts were accepted, the Commission nevertheless infringed Article 3(2) and (3) of the basic regulation given that it was required to take 100% of the imports into consideration.

237    The Commission, supported by Sekisui, disputes the applicant’s arguments.

238    It should be recalled that recitals 432 and 433 of the contested regulation read as follows:

‘(432)      Wacker and the Chinese exporting producers claimed that 18% of the exports from [China] were not sold by the Union industry since for this quantity no comparable PCNs were found. The parties referred to the judgement [of 24 September 2019, Hubei Xinyegang Special Tube v Commission (T‑500/17, not published, EU:T:2019:691)] in support of their claim that the Commission’s injury analysis was only based on a limited volume of the Union industry’s sales and not the whole like product.

(433)      First, the Commission noted that this judgment is under appeal before the Court of Justice and therefore cannot be taken as authoritative. Second, the basic Regulation does not require the Commission to carry out the price analysis for each product type separately. Rather, the legal requirement is a determination at the level of the like product. While PCNs are used as the starting point for such assessment, it does not mean that different PCNs are not in competition. Thus, the fact that certain PCNs of the Union industry were not compared to imports does not mean that they do not suffer price pressure from the dumped imports. Indeed, the establishment of price undercutting and underselling by first calculating margins at the level of the PCN is only an intermediary and preparatory step of that required price comparison. That step is not legally mandated, but constitutes the standard practice of the Commission. Third, in cases where sampling is applied it is not surprising that there is not a perfect matching between the imports of the sampled exporting producers and the sales of sampled Union industry. This does not necessarily mean that there are no imports of certain types, but that these types were not exported to the Union by the sampled exporting producers during the investigation period. Finally, … the Commission concluded that all PVA grades competed with each other, at least to a certain extent. Therefore, the 18% of the exports of the sampled exporting producers not sold by the Union industry does not constitute a separate category of the product concerned but competes in full with the remaining grades for which a matching was found. Moreover, the PCNs not sold by the Union industry were product types suitable for application in the adhesives, polymerisation and paper sectors, and therefore equivalent and in direct competition with other product types produced and sold by the Union industry for use in the same applications, even if not used for the quantification of price undercutting.’

239    It should be noted that, in recitals 432 and 433 of the contested regulation, the Commission summarised an argument which the applicant had based on the judgment of 24 September 2019, Hubei Xinyegang Special Tube v Commission (T‑500/17, not published, EU:T:2019:691), before going on to reject it.

240    It must be recalled that, in paragraphs 68 to 75 of the judgment of 24 September 2019, Hubei Xinyegang Special Tube v Commission (T‑500/17, not published, EU:T:2019:691), the Court held, in essence, that in so far as the Commission had not taken into account, in the analysis of price undercutting, a certain volume of the product under consideration produced by the sampled EU producers, namely 17 of the 66 product types identified, representing 8% of the sales volume of those producers, which were not exported by the sampled Chinese exporting producers, it had failed to take account of all the relevant data in the case at issue, in breach of Article 3(2) and (3) of the basic regulation (see, to that effect, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 22).

241    In rejecting the applicant’s argument based on the judgment of 24 September 2019, Hubei Xinyegang Special Tube v Commission (T‑500/17, not published, EU:T:2019:691), the Commission first of all pointed out, in the first sentence of recital 433 of the contested regulation, that that judgment was under appeal.

242    Next, in the second to ninth sentences of recital 433 of the contested regulation, the Commission defended the merits of its actions in the regulation that was being challenged in the case that gave rise to the judgment of 24 September 2019, Hubei Xinyegang Special Tube v Commission (T‑500/17, not published, EU:T:2019:691), while also setting out general considerations in relation to the analysis of price undercutting by the PCN method. It is in that context that it stated that ‘certain PCNs of the Union industry [had] not [been] compared to imports’. Accordingly, that part of the sentence cannot be interpreted as an admission by the Commission that, in the present case, it had failed to take account of certain PCNs produced by the Union industry.

243    Lastly, in the 10th to 12th sentences of recital 433 of the contested regulation, the Commission examined the circumstances of the present case. It is apparent from that passage that, first, for 18% of PVA exported to the European Union by the sampled Chinese exporting producers, it had not been possible to find any corresponding product type sold by the Union industry and, secondly, because of the fact that all PVA were in competition with each other to a certain extent, the PVA sold by the Union industry were also competing with the 18% of PVA imported from China.

244    It follows that the Commission associated an imported product type with each product type sold by the Union industry and that, in the case of imported product types that did not match product types sold by the Union industry, it found that a competitive relationship nevertheless existed. In so doing, the Commission carried out the assessment required by Article 3(2) and (3) of the basic regulation, which consists of examining the effect on the Union industry prices of ‘dumped imports’ (judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 161) and analysed price undercutting for the product under consideration as a whole.

245    Contrary to the applicant’s contention, that interpretation of recital 433 of the contested regulation is compatible with the explanation given to it by the Commission in the procedure that led to the adoption of the contested regulation, that ‘the matching percentage between the [Union] industry and the sampled Chinese exporting companies is 82%’. While it is apparent from that explanation that a total match could not be established, the Commission’s choice of wording does not make clear whether it was the Union industry or Chinese exporting producers which sold more product types.

246    Furthermore, that interpretation of recital 433 of the contested regulation is not affected by the tables produced by the applicant in the annexes to the reply. Those tables show, for each of the exporting producers sampled, including the applicant, the PCNs in respect of which there is a match between imported product types and those sold by the Union industry. Although, for confidentiality reasons, the tables do not display the quantities sold by the Union industry, by PCN, it cannot be inferred from this that only 82% of Union industry sales were taken into account, as the applicant claims.

247    Therefore, it must be held that the applicant’s argument that the Commission analysed price undercutting without taking account of all PVA sales by the Union industry has no basis in fact.

248    In any event, assuming that the Commission did exclude certain product types sold by the Union industry from the price undercutting analysis, it must be noted that the judgment of 24 September 2019, Hubei Xinyegang Special Tube v Commission (T‑500/17, not published, EU:T:2019:691), was set aside by the Court of Justice, which concluded that the General Court had erred in law in that judgment in holding that, in the context of the analysis of the effects of the dumped imports on the Union industry prices provided for in Article 3(2) and (3) of the basic regulation, and, in particular, in the context of the analysis of price undercutting, the Commission was, in all circumstances, obliged to take account of all the products sold by that industry, including the types of product at issue that were not exported by the sampled producing exporters (judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 159).

249    As the applicant points out, it follows from paragraphs 138 to 140 of the judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube (C‑891/19 P, EU:C:2022:38), that, in order for the Commission to be under that obligation, the first and second conditions (see paragraph 209 above) must be satisfied. As it is, contrary to the applicant’s contention, that is not the case here (see paragraphs 217 to 224 above).

250    Accordingly, the third part of the sixth plea in law must also be rejected.

251    Since all parts of the sixth plea, relating to the infringement of Article 3(2) and (3) of the basic regulation, have been rejected, the applicant also has no basis for claiming that, because of those infringements, the Commission also infringed Article 3(6) of that regulation (see paragraph 171 above).

252    In the light of all of the foregoing, the sixth plea in law must be rejected in its entirety.

 Seventh plea in law, alleging infringement of the rights of the defence

253    The applicant submits that the Commission infringed its rights of defence in that, despite its requests, the Commission failed to provide it with any information with respect to the Union industry’s quantities sold and sales prices by PCN or the price undercutting and underselling margins by PCN (‘the information at issue’). It criticises the Commission for not having provided it with that information at least in the form of ranges of values. In its view, although Article 19 of the basic regulation provides for the confidential treatment of certain information, its application cannot deprive the rights of the defence of their substance. It notes that Article 19(2) of the basic regulation provides that interested parties claiming confidentiality of information supplied are required to submit a non-confidential summary of that information or, at the very least, a statement of reasons as to why such summarisation is not possible. Furthermore, according to the applicant, it is irrelevant that the allegedly confidential information relates to a single EU producer.

254    The applicant submits that, for the present plea to be well founded, it does not have to show that the outcome of the investigation could have been different; it only needs to show that the possibility of a different outcome cannot be totally ruled out. However, without having the information at issue, it could not assess whether there was an absence of price undercutting or underselling for certain PCNs, nor could it assess for which PCNs the Union industry had made most of its sales. That information was therefore essential in order to be able to review the correctness of the undercutting determination, for which it might be appropriate to look at the market shares of the various PCNs in question, and to examine whether the imports had indeed caused injury to that industry.

255    The Commission, supported by Kuraray and by Sekisui, disputes the applicant’s arguments.

256    The relevant provisions of the basic regulation and a number of principles relating to those provisions are recalled in paragraphs 95 to 103 above.

257    It should be added that the protection of information covered by business secrecy does not require the exclusion, on principle, of all disclosure to interested parties of the information used during an anti-dumping investigation, irrespective of the circumstances. In particular, it is necessary to consider the particular situation of the interested party with regard to that information and, in particular, the position that that interested party occupies on the market under consideration in relation to the position of the supplier of the information (judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 199; see also, to that effect, judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 159).

258    The case-law also makes clear that the obligation to respect confidential information cannot deprive the applicant’s rights of defence of their substance (see judgment of 1 June 2017, Changmao Biochemical Engineering v Council, T‑442/12, EU:T:2017:372, paragraph 142 and the case-law cited).

259    In the present case, as is apparent from recital 435 of the contested regulation and from a letter which the applicant sent to the Commission on 8 July 2020, the applicant, after receiving final disclosure, requested access to the information at issue.

260    By email of 13 July 2020, Kuraray informed the Commission that it was opposed to the disclosure to the applicant of the information at issue, including in the form of ranges instead of exact values. As the Commission stated at the hearing, that email was Kuraray’s response to an email which the Commission had sent to it after receiving the applicant’s letter of 8 July 2020, referred to in paragraph 259 above. Kuraray argued that the information at issue was confidential by nature within the meaning of Article 19(1) of the basic regulation and stated that, since it was the only EU producer sampled by the Commission to sell the product concerned to third parties, the disclosure of further details in respect of the undercutting and underselling calculations would be of a competitive advantage to its competitors and would have a significantly adverse effect on it. Such disclosure, which would reveal information about quantities of PVA sold during the investigation period as well as average prices based on PCNs, would cause irreparable harm to its business operations in the European Union.

261    Furthermore, Kuraray contended that the information about price undercutting and underselling already provided to the applicant enabled it to understand the injurious effect of the imports on the Union industry and to exercise its rights of defence. It stated that each exporting producer would be subject to the same level of anti-dumping duties in respect of all of its exports to the European Union of the product concerned, without any distinction based on PCNs.

262    By email of 14 July 2020, the Commission informed the applicant that, having assessed its request for access to the information at issue, it had decided to refuse that request because the information was confidential under Article 19 of the basic regulation. The Commission’s reasons for its decision are the same as those put forward by Kuraray, set out in paragraph 261 above.

263    In recital 436 of the contested regulation, the Commission noted that, in line with Article 19 of the basic regulation, it had not been able to reveal the information at issue, since disclosure of such a level of detail would make it possible, either directly or with the addition of market intelligence, to reconstruct confidential sales or production data of individual EU producers.

264    It must be held that, in the light of Article 19(1) and (5) of the basic regulation, the Commission was not authorised to disclose the information at issue to the applicant because of Kuraray’s opposition (see, by analogy, judgments of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 178, and of 19 May 2021, China Chamber of Commerce for Import and Export of Machinery and Electronic Products and Others v Commission, T‑254/18, under appeal, EU:T:2021:278, paragraph 477).

265    However, where information cannot be communicated because it is confidential, Article 19(2) of the basic regulation requires the parties which are the source of that information to provide a non-confidential summary of it whenever possible (see, to that effect, judgment of 19 May 2021, China Chamber of Commerce for Import and Export of Machinery and Electronic Products and Others v Commission, T‑254/18, under appeal, EU:T:2021:278, paragraph 483).

266    Therefore, the Court must ascertain whether, by failing to take steps to enable the applicant to be provided with the information at issue in the form of non-confidential summaries, within the meaning of Article 19(2) of the basic regulation, the Commission infringed the applicant’s rights of defence.

267    To that end, it is necessary to refer, in accordance with the principles recalled in paragraphs 20 to 22 above, to the decisions of the DSB relating to Articles 6.5 and 6.5.1 of the anti-dumping agreement, which correspond, in essence, to Article 19(1) and (2) and the first sentence of Article 19(5) of the basic agreement (see, to that effect and by analogy, judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraphs 103, 188 and 190).

268    According to the Report of the Appellate Body, European Communities – Definitive anti-dumping measures on certain iron or steel fasteners from China (WT/DS 397/AB/R), adopted by the DSB on 28 July 2011 (paragraphs 542 to 544), in respect of information treated as confidential under Article 6.5 of the anti-dumping agreement, Article 6.5.1 of that agreement obliges the competent authority to require that a non-confidential summary of the information be furnished. The sufficiency of the summary provided will depend on the confidential information at issue, but the summary must permit a reasonable understanding of the substance of the information withheld in order to allow the other parties to the investigation an opportunity to respond and defend their interests. Article 6.5.1 of the anti-dumping agreement contemplates the possibility that, in exceptional circumstances, confidential information may not be susceptible of summary. In such exceptional circumstances, a party may indicate that it is not able to furnish a non-confidential summary of the information submitted in confidence, but it is nevertheless required to provide a statement of the reasons why summarisation is not possible. For its part, the competent authority must scrutinise such statements to determine whether they establish exceptional circumstances and whether the reasons given appropriately explain why, under the circumstances, no summary that permits a reasonable understanding of the information’s substance is possible. Summarisation of confidential information will not be possible where no alternative method of presenting that information can be developed that would not, either disclose the sensitive information, or fail to provide a sufficient level of detail to permit a reasonable understanding of the substance of the information submitted in confidence.

269    In the present case, when Kuraray opposed the disclosure of the information at issue, including in the form of ranges of values, it must be considered to have refused to comply with the obligation to provide non-confidential summaries of that information and to have relied in that respect on the existence of the exceptional circumstance that it was the only EU producer whose sales had been taken into account by the Commission in the analysis of price undercutting and underselling. The Commission examined Kuraray’s arguments and decided that its stance was well founded, having regard also to the fact, noted in essence in recital 436 of the contested regulation, that Chinese exporting producers would have been able to read the information sought in the light of the market intelligence already available to them.

270    Consequently, it must be held that the Commission correctly followed the steps laid down in the relevant provisions in order to strike a balance between the two objectives referred to in paragraph 98 above.

271    As to the merits of the Commission’s assessment, it should be noted that, in view of the sensitivity of the information at issue and the exceptional circumstances of this case, the Commission did not make any error in refusing its disclosure.

272    The fact that there was no error on the part of the Commission is confirmed by the fact that when the applicant received the email from the Commission refusing its request for access to the information at issue (see paragraph 262 above), it did not bring the matter before the hearing officer, although it could have done so under Article 15 of Decision (EU) 2019/339 of the President of the European Commission of 21 February 2019 on the function and terms of reference of the hearing officer in certain trade proceedings (OJ 2019 L 60, p. 20).

273    It must be held that, by refraining from bringing the matter before the hearing officer, the applicant accepted the balance struck by the Commission between the objectives in question.

274    In any event, reference should be made to the case-law referred to in paragraph 166 above concerning the conditions to be satisfied in order for an irregularity relating to respect for the rights of the defence to result in annulment of the measure in question.

275    On that point, first, the applicant maintains that the confusion which arose regarding the percentages of products imported and sold by the Union industry that were examined in the analysis of price undercutting would not have occurred if it had received the information at issue (see the third part of the sixth plea). However, it must be stated that that confusion has no bearing on whether there is a possibility that the procedure conducted by the Commission might result in a different outcome. In any event, if the applicant considered the explanations given by the Commission (see paragraph 245 above) to be ambiguous, it could have asked the Commission for further clarification.

276    Secondly, the applicant submits that, in certain circumstances, in order to ensure that the examination of the existence of significant price undercutting at the level of the like product is objective, it may be appropriate to examine the market shares of the various product types in question. In order for an interested party to be able reasonably to argue that those circumstances prevail, it would have to have information about those market shares.

277    Since, as is apparent from paragraphs 207 to 209, in certain circumstances, the analysis of price undercutting might have to be conducted by market segment, the possibility cannot a priori be entirely ruled out that if the applicant had been in possession of non-confidential summaries in respect of the information at issue, it would have been able to put forward arguments capable of demonstrating that the circumstances of the case required that such an analysis be carried out.

278    However, as is apparent from the examination of the sixth plea, in particular from paragraphs 217 to 224 above, there is nothing in the present case that would require the Commission to carry out an analysis of price undercutting by market segment. Accordingly, the possibility that the procedure might have resulted in a different outcome if the abovementioned summaries had been available to the applicant must be ruled out.

279    In the light of all of the foregoing considerations, the seventh plea in law must also be rejected and, as a result, the action must be dismissed in its entirety.

 Costs

280    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, by Kuraray and by Sekisui, in accordance with the form of order sought by them.

281    Under Article 138(1) of the Rules of Procedure, the Member States and institutions which have intervened in the proceedings are to bear their own costs. Consequently, the Parliament and the Council shall bear their own costs.

282    Under Article 138(3) of the Rules of Procedure, the Court may order an intervener other than those referred to in paragraphs 1 and 2 thereof to bear its own costs. In the present case, Wegochem, which intervened in support of the main party who was unsuccessful, must be ordered to bear its own costs.

On those grounds,

THE GENERAL COURT (Ninth Chamber, Extended Composition)

hereby:

1.      Dismisses the action;

2.      Orders Inner Mongolia Shuangxin Environment-Friendly Material Co. Ltd to bear its own costs and to pay the costs incurred by the European Commission, by Kuraray Europe GmbH and by Sekisui Specialty Chemicals Europe SL;

3.      Orders the European Parliament, the Council of the European Union and Wegochem Europe BV to bear their own costs.

Delivered in open court in Luxembourg on 21 February 2024.

Table of contents

Background to the dispute

Forms of order sought

Law

First plea in law, alleging that the application of Article 2(6a) of the basic regulation is inconsistent with the obligations arising from WTO law

The Commission’s request that the second to fifth pleas in law be rejected as ineffective

Second plea in law, alleging infringement of Article 2(6a)(a) of the basic regulation as regards the choice of appropriate representative country

Fifth plea in law, alleging infringement of Article 18 of the basic regulation

Sixth plea in law, alleging infringement of Article 3(2) and (3) of the basic regulation when establishing price undercutting, and infringement of Article 3(6) of that regulation

Whether the sixth plea in law is effective

The merits of the sixth plea in law

– First part

– Second part

– Third part

Seventh plea in law, alleging infringement of the rights of the defence

Costs

*      Language of the case: English.

1      This judgment is published in extract form.

© European Union
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