In Case 113/77
NTN TOYO BEARING COMPANY, LTD., Osaka (Japan),
NTN BEARINGS — GKN LTD., Burntwood (United Kingdom),
NTN WÄLZLAGER (EUROPA) GMBH, Erkrath-Underfeldhaus (Federal Republic of Germany),
NTN SIDAG, Schweighouse (France),
represented by Messrs W. Stoecker and Malte Sprenger, Advocates at the Düsseldorf Bar, Dr Werner von Simson, Professor of Law, University of Freiburg-im-Breisgau, and Mr Martin von Simson, Barrister, of the Middle Temple, London, with an address for service in Luxembourg at the Chambers of Mr Claude Penning, Advocate, 43, Avenue du Dix-Septembre,
COUNCIL OF THE EUROPEAN COMMUNITIES, represented by Mr H.-J. Lambers, acting as Agent, Messrs Francis Patrick Neill, Queen's Counsel, of Gray's Inn, Mark Waller, Barrister, of Gray's Inn, and Lawrence Collins, Solicitor, of Messrs Herbert Smith & Co., London, Advisers, with an address for service in Luxembourg at the office of Mr Van de Houten, European Investment Bank, Place de Metz,
FEBMA (Federation of European Bearing Manufacturers' Associations), Frankfurt, represented by Mr Dietrich Ehle, of the Cologne Bar, assisted by Terence M. Lane, Solicitor, London, with an address for service in Luxembourg at the offices of Mrs Jeanne Housse, Huissier, 21, Rue Aldringen,
intervener,
APPLICATION for the annulment of Article 3 of Council Regulation (EEC) No 1778/77 of
THE COURT
composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges,
Advocate General: J.-P. Warner
Registrar: A. Van Houtte
gives the following
The facts of the case, procedure, conclusions and submissions and arguments of the parties may be summarized as follows:
In accordance with the provisions of the General Agreement on Tariffs and Trade, Article 2 of the regulation specifies that an anti-dumping duty may be applied to a dumped product whose introduction into Community commerce causes, or threatens to cause, material injury to an established Community industry or materially retards the setting-up of such an industry. Article 3 defines the concept of dumping, providing that the
The normal procedure begins with the lodging of a complaint by a natural or legal person or an association submitted either to a Member State or to the Commission (Articles 6 and 7). A Member State may also alert the Commission (Article 8). If the complaint seems to be serious the Commission, in co-operation with the Member States, commences an examination of the matter which covers both dumping and injury (Article 10(1)). The other provisions of Anicle 10 and those of Article 11 regulate that examination. Article 10 (4) provides that:
Articles 12 and 13 provide for an advisory committee to be set up consisting of representatives of each Member State with a representative of the Commission as Chairman. Consultations cover in particular the existence and margin of dumping, the existence and extent of injury and the measures appropriate to remedy the effects of dumping.
If it becomes apparent from consultation, unanimously, that protective measures are unnecessary, the proceedings stand terminated. Otherwise the Commission submits to the Council forthwith a repon
Article 14 (2) provides as follows:
Regulation No 2011/73 (Official Journal 1973, L 206/3) adds to this the following provisions:
The representatives of the exporting country and the directly interested parties are informed of the termination of the proceeding which must, with certain exceptions, be published in the Official Journal.
Under Article 15 of Regulation (EEC) No 459/68, the Commission may take
Article 17 concerns the lot of the provisional duty and provides as follows:
Anti-dumping duties are imposed by regulation (Article 19 (1)). Article 20 (1) of Regulation No 459/68 provides, in accordance with Article 8 (b) of the General Agreement on Tariffs and Trade Anti-dumping Code, that the products referred to are described indicating the name of the supplier. Article 20 (2) provides that the only exception to this rule is where it is impracticable to name all the suppliers.
Importers who wish to show that products, although subject to antidumping duties, were not dumped, have the means of administrative appeal (Article 19 (4)).
By document of
After consultation with the Member States, the Commission decided on
When the replies to the questionnaires had been received, the European and Japanese manufacturers met on
The Commission imposed a provisional anti-dumping duty of 20 % on ball bearings and tapered roller bearings and parts thereof originating in Japan by Regulation (EEC) No 261/77 of
In the meantime the Commission carried out an investigation at the European (French, British and German) subsidiaries of the Japanese companies during the months from Februar) to April 1977. Because those subsidiaries were associated with the producer companies, it based its calculations of the export prices on the
From
From the end of May until the end of June 1977 meetings were held between the Commission and the Japanese roller bearing producers on the possibility of an undertaking as to prices. After four weeks of discussion the four major Japanese producers signed on
On
Article 1 of Regulation (EEC) No 1778/77 imposes a definitive antidumping duty of 15 % whose application is however suspended. Article 2 orders the Commission, in collaboration with the Member States, to monitor the undertakings given by the major Japanese producers and provides that if the Commission finds that these undertakings are being evaded, are not being observed or have been withdrawn it must forthwith, after consulting the Member States within the Advisory Committee provided for in Article 12 of Regulation (EEC) No 459/68, convened within a period of five days, terminate the suspension of the application of the definitive duty.
In application of Article 17 (2) (a) of Regulation (EEC) No 459/68, Article 3 of Regulation No 1778/77 provides as follows:
Regulation (EEC) No 1778/77 was published in the Official Journal on
On the same date the Commission accepted the undertakings given by the Japanese producers on
The applicants have lodged the present application against Article 3 of Council Regulation (EEC) No 1778/77. They claim that during the discussions which followed the entry into force of Regulation (EEC) No 261/77 imposing a provisional anti-dumping duty they undertook by agreement of
In those circumstances, Article 3 of Regulation (EEC) No 1778/77 is not justified. More generally, the applicants claim that dumping complained of has not been sufficiently established in law and in accordance with the requirements both of the rules of the General Agreement on Tariffs and Trade and of the Community rules.
The application, dated The lawyers representing the applicants lodged proof of their authority on
Following its application, which was entered on the Court Register on
By document lodged on
The Court, having heard the report of the Judge-Rapporteur and the views of the Advocate General, decided by order of
Having heard the report of the Judge-Rapporteur and. the views of the Advocate General, the Court decided to open the oral procedure without a preparatory inquiry.
However, the Court requested the parties and the Commission of the European Communities to answer certain questions, pursuant to Article 21 of the Protocol on the Statute of the Court of Justice of the EEC.
The applicants claim that the Court should:
Declare Article 3 of Regulation (EEC) No 1778/77 inapplicable to them.
The defendant contends that the Court should:
Declare the application to be inadmissible;
Further or alternatively, dismiss the application;
Order the applicants to pay the costs of the Council.
The intervener claims that the Court should:
Declare the application to be inadmissible;
Further or alternatively, dismiss the application;
Order the applicants to pay the costs, including the costs of the intervener.
The
The defendant emphasizes that the adoption of anti-dumping measures is at the entire discretion of both the Council and the Commission. Regulation No 459/68 is based on the principle according to which the imposition of duties must not constitute
Moreover, Regulation No 459/68 provides expressly that anti-dumping duties must be imposed by regulation.
Because those duties are an instrument of commercial policy, the defendant considers that a regulation has to apply to all actual or potential importers whether or not they are known or identifiable when the measures are adopted.
Regulation No 1778/77 is a genuine generally applicable measure of a legislative nature. Article 1 of that regulation applies a definitive anti-dumping duty on certain generally defined products originating in Japan. The fact that products are identified cannot prevent the regulation from having a general normative character (judgment of
Article 2 expresses the duties of the Commission. By directing the Commission to perform certain functions and giving it appropriate power and authority to exercise them the true nature of that article is legislative.
Article 3 is a general provision imposing anti-dumping duty and applies generally to products manufactured and exported by four named manufacturers. The manufacturers are named because Article 8 (b) of the General Agreement on Tariffs and Trade Anti-dumping Code requires the parties to the Code to ensure that the authorities should name the suppliers of the product concerned. The duty is payable quite generally by all importers of such products and the fact that the importers may be potentially identifiable would not affect the generality of the regulation in question.
The
The
They consider that the steps to be taken under Regulation No 459/68 are clearly of an administrative nature. Those measures presuppose an evaluation of facts and circumstances peculiar to each individual company. They aim at undertakings to be given by each enterprise individually.
Article 3 of Regulation No 1778/77 is a decision. Article 15 (1) (a) and (2) (b) of Regulation No 459/68 uses the words
The
The imposition of an import duty placing obligations on customs authorities to collect the duties is a typical case of the imposition of duties by regulation. To argue that because the customs authorities are limited and known is sufficient to enable the character of a regulation to be regarded as a decision is to seek to enlarge the concept of a decision to such an extent as to jeopardize the system of the Treaty
The provisional duty was not imposed on the four Japanese undertakings but on importers. It was in relation to those importers that Regulation No 1778/77 ordered the definitive collection of duty.
The
Nor is there anything in Regulation No 1778/77 which individually concerns the exporters. As indicated above, the fact that the exporters are named in Article 3 merely serves to comply with the General Agreement on Tariffs and Trade Antidumping Code and to identify the products which have accounted for all but an insignificant proportion of imports into the Community.
The intervener makes observations to the same effect.
According to the
The applicant importers are not individually concerned by Article 3 of Regulation No 1778/77 which applies generally to importers of the relevant products. The general character of that article is not affected by the fact that those importers can be identified. The importers in question in this case are not the only importers who were required to pay the definitive duty. There are at least 260 such importers in the Community.
The
The contested measure is also of direct concern to them. The order to collect is of direct concern to them and affects them immediately without the intervention of an administrative body whose actions could be brought before a national court.
The contention of the Council that it is not the exporter but the imponer who is concerned does not bear scrutiny. The whole procedure is directed against the exporter. Moreover the Commission has treated the European distributors of the exporter as being economically one unit when substituting their sales prices for the export price. The applicants deny that there are any importers of their bearings who do not in effect buy from their European distributors.
According to the
It maintains that in law and in practice the duty is imposed upon importers and it is only importers who would be directly concerned by any imposition of duty.
The
Since Regulation No 1778/77 is concerned exclusively with the imposition of definitive duties after a full investigation by the Commission it can stand alone without reliance on Commission Regulation No 261/77.
The
The
The
The applicants rely on grounds of lack of competence, infringement of an essential procedural requirement and infringement of the Treaty and of legal provisions relating to its application.
According to the
In its defence, the
In relation to anti-dumping duty the basic elements have been dealt with by Council Regulation No 459/68 and in accordance with the procedure laid down in Article 113 (2) of the EEC Treaty. Having regard to the necessity of immediate action the Council had sound practical reasons for delegating the implementation of the basic regulation in relation to provisional duties to the Commission under Article 155 of the Treaty.
Even if Commission Regulation No 261/77 were defective the Council would not accept that Article 3 of Council Regulation No 1778/77 would necessarily also be invalid. Having regard to the fact that no direct attack has been made by the applicants against the latter regulation it may be considered, in the light of the full investigation carried out for the purposes of Council Regulation No 1778/77, that the passing of that regulation had cured any defect in Commission Regulation No 261/77, at least in so far as the defect was procedural.
The
In their reply, the
In its rejoinder, the
Regulation No 459/68 of the Council, which forms the basis of Regulation No 621/77, fails to state that a qualified majority vote has been obtained (Article 113 (4)).
Moreover, the Commission was bound to observe the conditions imposed by Article 19 (3) of Regulation No 459/68, according to which no provisional duty
In addition, no reasons are given in that regulation as to why such an emergency situation was thought to exist. Such a situation, according to the applicants, constitutes one of the conditions precedent for the power of the Commission.
In its defence, the
The
The
The
Considering that the interests of the Community
The
The Council cannot by its acts relieve the Commission of the necessity to give adequate reasons for its decisions. If the Commission did not fulfil that requirement within the five working days that would show that it was unable to transact its business in the way the Treaty prescribes.
With regard to the absence of an indication of the margin of dumping, the applicants observe that if the very fact that the duty had been imposed proved that the determined margin could not have been lower than the duty this would make nonsense of Article 10 (c) of the Anti-dumping Code which provides that
According to the applicants, Regulation No 261/77 fails to keep within the limits laid down in the recitals of the preamble to Regulation No 459/68 for the purposes of justifying the emergency procedure. The Commission has not even tried to explain why that intervention had to be made by the Commission rather than by the. Council and why it could not wait until, a few months later, the Council could decide on the facts as finally established.
In its rejoinder, the
With regard to the alleged failure to state the margin of dumping, the Council considers that the applicants could deduce from the various findings set out
With regard to the emergency procedure, the Council maintains that all the conditions laid down in Article 15 (1) (a) of Regulation No 459/68 were fulfilled.
The
It follows from paragraph 1 of the Notes and Supplementary Provisions to Article VI of the General Agreement on Tariffs and Trade that hidden dumping by associated houses includes
The
Paragraph 1 of the Notes and Supplementary Provisions to Article VI relied upon by the applicants was replaced by the Anti-dumping Code, which is based on a broader concept.
The
In their reply, the
The applicants claim that the association must have led, and must be shown to have led, to the importer having sold the products in question at prices below those which he paid to the exporter. No such policy has ever been practised by the applicants.
In its rejoinder, the
The
The applicants claim that they undertook to increase their prices in a manner which was designed to eliminate to the satisfaction of the Commission any alleged or definitively determined cause for the imposition of an anti-dumping duty. The undertaking was given on
In reply, the
Although the undertaking enabled the definitive duty of 15 % imposed to be suspended for the future, it did not in any way preclude the collection of the provisional duty.
The
In their reply, the
The applicants consider that the blame for the delay, if there was one, lies mainly with the Commission because it steadfastly refused to answer the applicants' queries.
They claim that the Council was not entitled to order the collection of the security given for the provisional duty once a voluntary undertaking had been given and accepted. The undertaking was given at the instigation of and in the wording suggested by the Commission.
The Council's suggestion that not to collect the duty would amount to a reward to the Japanese companies for the delay which they had caused is totally unjustified. Provisional duties are not punitive measures (Article 7 (b) of the Anti-dumping Code).
In its rejoinder, the
The Council emphasizes that the failure by the applicants to offer an undertaking until a late stage was in no way prejudicial to their case and the relevant part of Article 7 (b) of the General Agreement on Tariffs and Trade Antidumping Code (incorporated in Article 14 (2) (c) of Regulation No 459/68 of the Council) was in no way infringed.
According to the
The
The investigation carried out at the time when the provisional duties were imposed indicated different margins of dumping. That being so, the fact provision was made for the application of a duty at a different rate to products of different origins does not constitute discrimination but proves, rather, that the provisions of Article 19 (3) of Regulation No 459/68 have been scrupulously observed.
According to the
The discrimination lies in the fact that different amounts are to be collected from parties whose percentage of dumping has been held to have been the same at the time the collection was ordered.
In its rejoinder, the
According to the
The applicants hold considerable stocks for considerable times. The only nondiscriminating comparison can be that between the home market price at the time of the actual export and the price at which the goods in question could have first been resold to an independent buyer.
The
In their reply, the
In its rejoinder, the
The parties presented oral argument at the hearing on
On those grounds,
THE COURT
hereby:
Kutscher
Mertens de Wilmars
Mackenzie Stuart
Donner
Pescatore
Sørensen
O'Keeffe
Bosco
Touffait
Delivered in open court in Luxembourg on
A. Van Houtte
Registrar
H. Kutscher
President