Godrej Industries Ltd, v Council of the European Union, [2013] EUECJ T-6/12 (06 September 2013)

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(Dumping – Imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia – Adjustment for currency conversion claimed – Burden of proof – Injury – Definitive anti-dumping duty)

Council of the European Union, represented by J.-P. Hix, acting as Agent, with G. Berrisch and A. Polcyn, lawyers,

European Commission, represented by M. França and A. Stobiecka-Kuik, acting as Agents,

APPLICATION for annulment of Council Implementing Regulation (EU) No 1138/2011 of 8 November 2011 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia (OJ 2011 L 293, p. 1),

10 By application lodged at the Court Registry on 5 January 2012, the applicants brought the present action.

11 By a document lodged at the Court Registry on 24 February 2012, the Commission sought leave to intervene in support of the form of order sought by the Council.

12 By a document lodged at the Court Registry on 28 March 2012, Sasol Olefins & Surfactants and Sasol Germany GmbH (together ‘Sasol’) sought leave to intervene in support of the form of order sought by the Council.

13 By order of the President of the Fourth Chamber of 19 April 2012, the Commission was granted leave to intervene.

14 By order of the President of the Fourth Chamber of 4 June 2012, Sasol was granted leave to intervene.

16 The Council, supported by the Commission and Sasol, contends that the Court should:

First part of the first plea, alleging infringement of Article 2(10)(j) of the basic regulation

The possibility for the applicants to reflect fluctuations in the rupee in their export prices

Second plea, relating to the inclusion of the applicants’ sales to Cognis in the calculation of the injury margin

59 In support of the second plea, the applicants submit, in essence, three complaints. First, they rely on infringements of Article 3(6) and (7) of Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ 2009 L 343, p. 51, with corrigendum OJ 2010 L 7, p. 22; ‘the basic regulation’). They maintain that their sales to Cognis ought to have been excluded from the injury analysis and that the ‘self-inflicted’ nature of the alleged injury in any event precluded a causal link, within the meaning of Article 3(6) of the basic regulation, from being established between the dumped imports and the injury. Even on the assumption that the alleged injury was established, it ought to have been considered to have been caused by ‘other factors’, within the meaning of Article 3(7) of the basic regulation, as has been considered in certain previous decisions of the Commission and the Council. Those sales also ought to have been excluded from the calculation of the injury margin. Second, the applicants rely on an infringement of Article 3(2) of the basic regulation. Since sales to Cognis were not excluded from the causal link, the Commission and the Council did not carry out an objective examination, nor did they base their determination of injury on positive evidence. Third, the applicants also rely on an infringement of Article 9(4) of the basic regulation, in so far as the Council did not exclude sales of the relevant product to Cognis and imposed an anti-dumping duty without properly evaluating the injury margin.

61 In that regard, first, it should be borne in mind that Article 1(1) of the basic regulation provides that ‘[a]n anti-dumping duty may be applied to any dumped product whose release for free circulation in the [Union] causes injury’. According to Article 3(2) of the basic regulation, a determination of injury is to be based on positive evidence and is to involve an objective examination, in particular of the volume of the dumped imports.

62 It follows from Article 3(6) of the basic regulation that the Union institutions must demonstrate that the dumped imports are causing significant injury to the Community industry, owing to their volume and price. That entails what is known as the ‘attribution analysis’. It also follows from Article 3(7) of the basic regulation that the institutions must examine all other known factors which are injuring the Community industry at the same time as the dumped imports and, moreover, ensure that the injury caused by those other factors is not attributed to the dumped imports. That entails what is known as the ‘non-attribution analysis’.

63 The objective of Article 3(6) and (7) of the basic regulation is therefore to ensure that the Union institutions separate and distinguish the injurious effects of the dumped imports from those caused by other factors. If the institutions do not separate and distinguish the impact of the various injury factors, they cannot legitimately conclude that the dumped imports have caused injury to the Community industry.

64 Next, it follows from the case-law that, when determining the injury, the Council and the Commission must, in particular, examine whether the injury which they propose to find might have its cause in the conduct of the Union producers themselves (Case C-358/89 Extramet Industries v Council [1992] ECR I-3813, paragraph 16).

65 Last, it should be borne in mind that Article 4(1)(a) of the basic regulation contains the following definition of the Community industry: ‘the term “industry” shall be interpreted as referring to the Community producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion, as defined in Article 5(4), of the total Community production of those products, except that;

(a) when producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, the term “Community industry” may be interpreted as referring to the rest of the producers …’.

66 It is in the light of those considerations that the second plea must be examined.

67 In that regard, it must be pointed out that the inclusion in the definition of the Community industry of a producer who is himself an importer of the allegedly dumped product does not automatically mean that his imports should no longer be considered to be one of the ‘other factors’ within the meaning of Article 3(7) of the basic regulation. It follows from the case-law cited at paragraph 64 above that the Commission and the Council are required, in the light of that provision, to take into account all the factors other than the dumped imports that might preclude the establishment of a causal link between the dumping and the injury suffered by the Community industry. The self-inflicted nature of the injury that might arise from the purchase by a Union producer of dumped products originating in countries covered by the anti-dumping investigation is one of the ‘other factors’ that the Commission and the Council must consider in the context of the injury analysis. Contrary to the applicants’ contention, however, it does not follow from either the basic regulation or the case-law that imports by a Union producer of dumped products originating in the countries covered by the investigation can never be taken into consideration in the injury analysis.

68 In the present case, the Council did in fact examine, first, at recital 61 to the contested regulation, whether Cognis should still be maintained in the definition of the Community industry in spite of its imports from the countries covered by the investigation and, second, at recital 69 to the contested regulation, whether the sales at issue should be excluded from the injury analysis and the injury margin calculation, because any alleged injury relating to those sales would be self-inflicted.

69 In that regard, it must be confirmed that the Council did not err in concluding that there was no compelling reason for excluding the sales at issue from the analysis.

70 First, it is common ground that those sales did indeed constitute dumping. They could therefore contribute to the existence of injury for the Community industry. Even if that injury were considered to be ‘self-inflicted’ in the case of Cognis, that does not apply to the Community industry as a whole, that is to say, for the other importer. The fact that Cognis withdrew its complaint is not capable in every case of calling that finding into question.

71 Second, it follows from recital 69 to the contested regulation that, during the investigation period, Cognis’s imports were mainly attributable to the temporary closure of one of its production sites. Those dumped purchases were therefore mainly attributable to a temporary constraint. As the Council observes, such imports may undoubtedly also be intended to limit the injurious effects of the dumped imports.

72 Indeed, it follows from recital 17 to the contested regulation, as the applicants observe, that Cognis had obtained supplies from the applicants for several years. However, the sales at issue, which were low during the investigation period, were even lower in previous years. It may be seen from the figures supplied by the Council, which have not been challenged by the applicants, that during the investigation period imports represented only 9 to 11% of Cognis’s production, with only between 4 and 5% coming from India. By way of example, in 2007 and in 2008 imports from India accounted for less than 1% of Cognis’s total production and imports from other non-member countries accounted for approximately 1%. In addition, in 2009 the applicants’ sales to Cognis accounted for only 4.3 and 5.3% respectively of total imports from India and in those of the other two countries under investigation. The applicants’ sales to Cognis during the investigation period were therefore indeed temporary for the most part.

73 Third, as regards the earlier decisions and regulations of the Commission and the Council to which the applicants refer in support of their arguments, it is sufficient to state that, both in those cases and in the present case (see paragraph 68 above), the Council and the Commission did indeed examine whether imports by Union producers, as one of the ‘other factors’ within the meaning of Article 3(7) of the basic regulation, had precluded a causal link from being established.

74 In those circumstances, all the arguments whereby the applicants seek to exclude the sales to Cognis for the purposes of the injury analysis and the causal link must be rejected. In so far as the applicants have not put forward any supplementary argument in relation to the exclusion of those sales from the injury margin calculation, the arguments whereby they allege infringements of Article 3(6) and (7) of the basic regulation must be rejected in their entirety as unfounded.

Third plea, relating to the fact that the applicants’ sales to Cognis were taken into account in the dumping margin calculation

2. Orders Godrej Industries Ltd and VVF Ltd to pay the costs of the Council of the European Union and also those incurred by Sasol Olefins & Surfactants GmbH and Sasol Germany GmbH, in addition to bearing their own costs;

1– Only the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Godrej Industries Ltd, v Council of the European Union, [2013] EUECJ T-6/12 (06 September 2013) URL: http://www.bailii.org/eu/cases/EUECJ/2013/T612.html Cite as: [2013] EUECJ T-6/12

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