EU Lifts Tarriffs Against Changshu Fastener Factory And Orders EU To Pay Court Fees

Via law360.com

The European Union’s top appeals court has vacated tariffs that the European Council imposed on two Chinese importers of certain iron or steel fasteners, finding that the 28-nation body improperly excluded relevant data during its anti-dumping calculation.
The Court of Justice, reversing a decision by the EU’s General Court, agreed with Chinese companies Changshu City Standard Parts Factory and Ningbo Jinding Fastener Co. Ltd. that the EU excluded certain export data during its tariff calculation.

Specifically, the court ruled in an opinion made public recently that the council violated provisions of the World Trade Organization’s Anti-dumping Agreement and EU regulations when it omitted export prices of certain products during the calculation, because the proxy company chosen to reflect the normal value of the exports did not produce those products.

The court agreed with a December report from Advocate General Paolo Mengozzi and said that the General Court committed an error of law in sanctioning the calculation performed by the council and dismissing the Chinese companies’ claims.

“In the light of its wording, objective and context, [the EU regulation] cannot be interpreted as allowing export transactions to the European Union relating to certain types of the product under consideration to be excluded from the calculation of the dumping margin,” read the opinion, dated April 5. “On the contrary, it follows from that provision that the EU institutions are required to take into account all those transactions for the purposes of that calculation.”

The court ordered the EU to pay Changshu City Standard Parts Factory and Ningbo Jinding Fastener for the costs of appearing before the appeals court as well as the General Court.

In July 2011, the WTO’s dispute settlement body adopted a report finding that the EU “infringed” WTO law with 2009 anti-dumping duties on imports of certain iron or steel fasteners originating in China. In response, in 2012, the European Commission initiated a review of the 2009 duty regulation, establishing India as a suitable market for establishing the normal value of the products for purposes of the duty calculation.

It then rejected the Chinese producers’ pleas for adjustments of the regulation, after finding that they had not shown that cost differences between them and the Indian proxy companies resulted in price differences for the product, according to the Court of Justice opinion. Further, the council explained that it would not use the cost structure of the Chinese producers as a basis for adjustments because, residing in China, they did not receive market economy treatment. Given the competitive atmosphere in which the Indian proxy produced its products, its prices fully reflected the reality of its domestic market, the Council found, according to the opinion.

The council ultimately reduced the 2009 anti-dumping regulation to 38.3 percent for Changshu City Standard Parts Factory, and kept Ningbo Jinding Fastener’s duty at 64.3 percent, according to the opinion. Subsequent reports adopted by the WTO’s dispute settlement body found that the new anti-dumping duties violated WTO law, because the council excluded export data from the Chinese companies covering products that the Indian company did not produce to calculate the dumping margin.

The Chinese producers filed actions with the General Court in December 2012 to overturn the regulation, alleging violations of nondiscrimination provisions of and Article 2.4.2 of the Anti-Dumping Agreement, the opinion said. The General Court rejected the claims and threw out the action.

–Editing by Stephen Berg.

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