European Court of Justice: The Commission Can Continue an Anti-Dumping Investigation Even After a Majority of the Domestic Producers Oppose It

The Commission Can Continue an Anti-Dumping Investigation Even After a Majority of the Domestic Producers Oppose It

October 23, 2015

The EU Court of Justice clarifies (i) the meaning of “major proportion” of the total Union production when assessing injury caused by dumped imports, and (ii) confirms that the European Commission can continue an investigation when a majority of EU producers ceases to support an antidumping investigation while it is ongoing.

On 8 September 2015, Philips Lighting Poland SA and Philips Lighting BV (hereafter “Philips”) lost their appeal in case C-511/13 P before the European Court of Justice (the highest court of the European Union). The Court dismissed Philips’ two grounds of appeal against the judgment of 11 July 2013 of the General Court of the EU (T‑469/07) (the first tier Court of the EU).

Before the General Court, the appellants had requested the annulment of Council Regulation (EC) No 1205/2007 of 15 October 2007 extended following an expiry review the anti-dumping duties on imports of integrated electronic compact fluorescent lamps (CFL-i) originating in China, also extended to imports of the same product consigned from Vietnam, Pakistan and the Philippines. This application for annulment was dismissed by the Court of Justice.

In replying to the first ground of appeal, the Court of Justice decided (para. 53 and 54 of the judgment) that a fall in the EU producers’ support for a complaint or a request for a review does not lead necessarily to the termination of the investigation. It is only if termination is considered by the European Commission to be in the interested of the EU that it may terminate the investigation. Otherwise, the Commission may decide to continue it. This is true even if support falls to a level lower than 25% of the EU production, or if a majority of the EU producers initially supporting the complaint decide to oppose the investigation (these are the two standing requirements of Article 5(4) of the EU basic anti-dumping regulation).

The General Court was therefore right to find that the EU Commission could continue the review investigation despite the fact that the 50% threshold of Article 5(4) of the basic Regulation was no longer met.

In replying to the second ground of appeal, concerning the definition of the EU industry (interpretation of Article 4(1) of the basic Regulation) the Court of Justice recalled (paragraph 62) that the EU industry can be either the EU producers as a whole, or EU producers whose collective output of the products constitute a major proportion of the total EU production of those products, as defined in Article 5(4) of the basic Regulation. The interpretation of the term “major proportion” is the sole purpose of the second ground of appeal, noted the Court.

In the WTO Anti-Dumping Agreement, the term major proportion is not defined (Article 4.1). The basic Regulation (Article 4(1)) is different, in that it defines major proportion by reference to Article 5(4) (concerning the standing for complaints lodged by EU producers to be admissible). There are in Article 5(4) two thresholds: first, producers supporting the complaint must account for at least 25% of EU production of the product concerned. Second, more than 50% of the EU producers who contacted the Commission (“that portion of the Community industry expressing either support for or opposition to the complaint”) must support the complaint.

The Court of Justice ruled (para. 68) that the 25% threshold alone is relevant to determine whether the producers represent a ‘major proportion’ of the total production of the like product produced by the EU industry within the meaning of Article 4(1) of the basic Regulation.

However, according to the Court, it is not sufficient for the combined output of EU producers to exceed 25% of EU production for these producers to represent a major proportion of the EU industry. Indeed, the Court stressed that in addition, the Commission must be able “to establish, taking into account all the relevant facts of the case, that the injury stemming from the imports of the dumped product affects a major proportion of the total [EU] production of the like products” (para. 70). The 25% threshold is therefore a minimum, but it might be higher depending on the circumstances of the case.[1]

In the present case, the Court of justice found that 48% can be considered to constitute clearly a major proportion of the total EU production, as Article 4(1) of the basic Regulation refers to a “major proportion” and not a “majority” of EU production (para. 72).

1.This interpretation seems to be compatible with the findings of the WTO Appellate Body in EC – Fasteners from China. In that case, the WTO Appellate Body pointed out that Articles 4.1 and 5.4 of the WTO Anti-dumping Agreement, which are transposed and implemented respectively by Articles 4(1) and 5(4) of the basic Regulation, concern two different aspects of an anti-dumping investigation. For the WTO Appellate Body, a proper interpretation of the term ‘major proportion’ under Article 4.1 of the Anti-dumping Agreement requires that the domestic industry defined on this basis encompass producers whose collective output represents a relatively high proportion that substantially reflects the total domestic production.

This alert was published on the blog of GreenLane, the Association of European Customs and Trade Law Firms”