Severstal v Commission (Dumping - Imports of certain cold-rolled flat steel products originating in China and Russia - Judgment) [2021] EUECJ T-753/16 (22 September 2021)

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Severstal v Commission (Dumping - Imports of certain cold-rolled flat steel products originating in China and Russia - Judgment) [2021] EUECJ T-753/16 (22 September 2021)
URL: http://www.bailii.org/eu/cases/EUECJ/2021/T75316.html
Cite as: ECLI:EU:T:2021:612, [2021] EUECJ T-753/16, EU:T:2021:612

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JUDGMENT OF THE GENERAL COURT (Tenth Chamber)

22 September 2021 (*)

(Dumping – Imports of certain cold-rolled flat steel products originating in China and Russia – Definitive anti-dumping duty – Article 18 of Regulation (EC) No 1225/2009 (now Article 18 of Regulation (EU) 2016/1036) – Use of facts available – Article 2(3), (4), (9), (10) and (12) of Regulation No 1225/2009 (now Article 2(3), (4), (9), (10) and (12) of Regulation 2016/1036) – Calculation of the normal value, the export price and the dumping margin – Article 3(2) and (5) of Regulation No 1225/2009 (now Article 3(2) and (5) of Regulation 2016/1036) – Determination of the existence of injury – Article 3(7) of Regulation No 1225/2009 (now Article 3(7) of Regulation 2016/1036) – Causal link – Article 2(9) and Article 9(4) of Regulation No 1225/2009 (now Article 2(9) and Article 9(4) of Regulation 2016/1036) – Injury elimination – Rights of the defence – Principle of good administration – Proportionality – Manifest errors of assessment)

In Case T‑753/16,

PAO Severstal, established in Cherepovets (Russia), represented by D. O’Keeffe, Solicitor, N. Tuominen and M. Krestiyanova, lawyers,

applicant,

v

European Commission, represented by J.-F. Brakeland, K. Blanck and E. Schmidt, acting as Agents,

defendant,

supported by

Eurofer, European Steel Association, ASBL, established in Luxembourg (Luxembourg), represented by O. Prost, A. Coelho Dias and S. Seeuws, lawyers,

intervener,

APPLICATION pursuant to Article 263 TFEU seeking the annulment of Commission Implementing Regulation (EU) 2016/1328 of 29 July 2016 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2016 L 210, p. 1),

THE GENERAL COURT (Tenth Chamber),

composed of E. Buttigieg (Rapporteur), acting as President, K. Kowalik-Bańczyk and G. Hesse, Judges,

Registrar: E. Artemiou, Administrator,

having regard to the written part of the procedure and further to the hearing on 1 October 2020,

gives the following

Judgment

 Background to the dispute

1        The applicant, PAO Severstal, is a company incorporated under Russian law which is active in the market for the manufacture and distribution of steel products, in particular, cold-rolled flat products of steel (‘the product concerned’).

2        Following a complaint lodged on 1 April 2015 by Eurofer, European Steel Association, ASBL (‘Eurofer’), the European Commission published on 14 May 2015 a Notice of initiation of an anti-dumping proceeding concerning imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2015 C 161, p. 9) pursuant to Council 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, corrigendum OJ 2010 L 7, p. 22) (‘the basic regulation’), replaced by 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).

3        The investigation of dumping and injury covered the period from 1 April 2014 to 31 March 2015 (‘the investigation period’). The examination of the trends relevant for the assessment of injury covered the period from 1 January 2011 to 31 March 2015 (‘the period considered’).

4        On 26 May 2015, the applicant submitted its reply to the sampling questionnaire. On 12 June 2015, the Commission informed the applicant of its decision not to carry out sampling and to investigate all cooperating Russian exporters, including the applicant.

5        On 29 June 2015, the applicant submitted comments concerning injury, the causal link between the alleged injury and the disputed imports, the interest of the European Union as well as the legality of the initiation of the anti-dumping proceedings.

6        On 27 July 2015, the applicant filed its reply to the anti-dumping questionnaire. By e-mail of 3 August 2015, the Commission requested the applicant to provide additional information. By e-mail of 13 August 2015, the applicant provided additional information to the Commission. By letter of 10 September 2015, the Commission invited the applicant to remedy what it considered to be deficiencies in its replies and indicated that, unless agreed, no new information would be accepted during the verification visit. On 24 September 2015, the applicant provided the Commission with additional information and clarifications.

7        On 21 September 2015, the Commission carried out an on-the-spot verification visit at the premises of one of the applicant’s related traders established in Switzerland and, between 5 and 8 October 2015, at the applicant’s premises in Cherepovets (Russia). Finally, on 12 and 13 October 2015, the Commission carried out a verification visit at the premises of a related trader established in Latvia.

8        By letter of 30 October 2015, the Commission informed the applicant of its intention to apply Article 18 of the basic regulation (now Article 18 of Regulation 2016/1036). The Commission stated that the application of that provision was justified, first, by the fact that the applicant had failed to provide the necessary information within the time limits and, secondly, by the fact that it had significantly impeded the proper conduct of the investigation by not providing the documentation requested by the Commission for the start of the verification visit.

9        By letter of 13 November 2015, the applicant objected to the Commission’s intention to apply Article 18 of the basic regulation while expressing its willingness to continue cooperating.

10      On 18 November 2015, the applicant set out its views in a hearing with the Commission services. On 23 November 2015, the applicant submitted further observations to the Commission.

11      On 10 February 2016, the Commission adopted Implementing Regulation (EU) 2016/181 imposing a provisional anti-dumping duty on imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2016 L 37, p. 1) (‘the provisional regulation’). The provisional regulation imposed a provisional anti-dumping duty of 25.4% on the applicant’s exports of the products concerned to the European Union as from 12 February 2016 for a period of six months.

12      In recitals 58 and 59 of the provisional regulation, the Commission confirmed the application of Article 18 of the basic regulation to the applicant for the purpose of determining normal value.

13      In its observations of 8 March 2016, the applicant disagreed with the findings in the provisional regulation regarding the application of Article 18 of the basic regulation. On 25 April 2016, the applicant was heard again at a hearing.

14      On 30 May 2016, the Commission issued a disclosure of its definitive findings on dumping and injury in which it rejected all the arguments put forward by the applicant, decided to maintain the application of Article 18 of the basic regulation and suggested the imposition of a definitive anti-dumping duty of 34.1% on the applicant’s exports of the product concerned to the European Union.

15      By letter of 9 June 2016, the applicant objected to the Commission’s definitive disclosure.

16      On 20 June 2016, the Commission issued a concise additional definitive disclosure.

17      On 29 July 2016, the Commission adopted Implementing Regulation (EU) 2016/1328, imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain cold rolled flat steel products originating in the People’s Republic of China and the Russian Federation (OJ 2016 L 210, p. 1) (‘the contested regulation’).

 Procedure and forms of order sought

18      By application lodged at the General Court Registry on 28 October 2016, the applicant brought the present action.

19      By document lodged at the Court Registry on 1 March 2017, Eurofer applied for leave to intervene in the present proceedings in support of the form of order sought by the Commission.

20      By documents lodged at the Registry of the General Court on 10 March and 30 March 2017 respectively, the Commission and the applicant requested that certain information contained in their pleadings be treated as confidential in relation to Eurofer if Eurofer were granted leave to intervene. They attached a non-confidential version of those pleadings to those requests.

21      By order of 31 May 2017, the President of the Second Chamber granted Eurofer leave to intervene and ordered the communication to it of the non-confidential versions of the pleadings at issue.

22      By decision of the President of the Second Chamber of 24 April 2018, the proceedings were suspended at the applicant’s request for a period of 18 months.

23      Since the composition of the Chambers of the Court was changed, pursuant to Article 27(5) of the Rules of Procedure of the General Court, the Judge-Rapporteur was assigned to the Tenth Chamber, to which the present case was consequently assigned by decision of 16 October 2019.

24      By decision of the President of the Tenth Chamber of 12 November 2019, the request to extend the initial suspension period was rejected.

25      The applicant claims that the General Court should:

–        annul the contested regulation in so far as the applicant is concerned;

–        order the Commission to pay the costs.

26      The applicant further requests that the Court expressly exclude the reopening of the investigation or the opening of a new investigation by the Commission following the annulment of the contested regulation because of the profoundly flawed nature of the investigation at issue in relation to the applicant. The infringements of the right to a fair hearing and its constituent elements as well as of Article 18 of the basic regulation are fundamental and pervasive, so that they vitiate the whole of the findings concerning the applicant on normal value. In so far as it is an essential condition for the determination of the applicable rate of anti-dumping duty, it cannot be detached from the rest of the contested regulation, which justifies the annulment of the latter in its entirety in so far as it concerns the applicant.

27      The Commission contends that the Court should:

–        dismiss the action as unfounded;

–        order the applicant to pay the costs.

28      In so far as the applicant’s claims go beyond an application for annulment of the contested regulation, the Commission notes that the EU Courts do not have the power to issue injunctions to the institutions of the European Union and that it is for the latter to take the measures necessary to comply with the judgments of the Court. The request that the Court prohibit the Commission from reopening the anti-dumping investigation is therefore manifestly inadmissible. The Commission adds that it agrees with the applicant that, in the event of partial annulment of the contested regulation, the effects of the latter should be maintained in respect of the applicant, for example until the Commission has been able to adopt the measures necessary to comply with the judgment.

29      Eurofer did not lodge a statement in intervention within the prescribed period.

 Law

30      In support of the action, the applicant puts forward six pleas in law. The first plea in law alleges infringement of Article 18 of the basic regulation, Article 6.8 of 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’), contained in Annex 1A to the Agreement establishing the World Trade Organisation (WTO) (OJ 1994 L 336, p. 3), Annex II to the Anti-Dumping Agreement, the principle of proportionality and a manifest error of assessment. The second plea in law alleges infringement of the right to a fair hearing and the rights of the defence. The third plea in law alleges infringement of Article 2(3), (4), (9), (10) and (12) of the basic regulation (now Article 2(3), (4), (9), (10) and (12) of Regulation 2016/1036) and manifest errors of assessment. The fourth plea in law alleges infringement of Article 3(2) and (5) of the basic regulation (now Article 3(2) and (5) of Regulation 2016/1036), Article 3.1 of the Anti-Dumping Agreement as well as distortion of the evidence and manifest errors of assessment. The fifth plea in law alleges infringement of Article 3(7) of the basic regulation (now Article 3(7) of Regulation 2016/1036). The sixth and final plea in law alleges infringement of Article 9(4) of the basic regulation (now Article 9(4) of Regulation 2016/1036) and Article 2(9) of that regulation as well as manifest errors of assessment.

 The first plea in law, alleging infringement of Article 18 of the basic regulation, Article 6.8 and Annex II of the Anti-Dumping Agreement, the principle of proportionality and a manifest error of assessment

31      The first plea in law is divided into three parts.

 The first part of the first plea in law

32      As a preliminary point, the applicant observes that the Commission’s assertion that the anti-dumping investigation at issue concerned a ‘semi-finished’ product, with the result that the necessary production, sales and cost data could not be obtained and verified by the usual verification techniques, is incorrect and misleading.

33      By the first part of the first plea in law, the applicant claims that the findings set out in recitals 76 and 77 of the provisional regulation and confirmed in recital 37 of the contested regulation do not contain sufficient grounds to justify the application of Article 18 of the basic regulation to it by considering it partially non-cooperating, which led to a significant upward adjustment of the manufacturing costs which it had reported. In particular, the applicant submits that, in so far as, contrary to the Commission’s allegation, it did not fail to provide the necessary information within the prescribed time limits, that institution infringed Article 18(1) of that regulation (now Article 18(1) of Regulation 2016/1036).

34      The applicant points out in that regard that non-cooperation within the meaning of Article 18(1) of the basic regulation can only be characterised by refusal of access to information, failure to provide the necessary information within the time limits, significant impediment to the investigation and provision of false or misleading information. It considers that the application of facts available under Article 18(1) of the basic regulation cannot be interpreted as being solely or mainly related to the quality of the data provided, but must necessarily include a behavioural component. According to the applicant, its active cooperation as well as the quality of the data it provided in the course of the proceeding precluded the Commission from applying Article 18 of the basic regulation to it.

35      First, it acted ‘to the best of its abilities’ by providing extensive, detailed and complex data in response to the Commission’s anti-dumping questionnaire and requests for additional information within the time limits set and by agreeing to submit to verification visits. In particular, it did not fail to submit any significant data concerning the cost of production of the product concerned before the expiry of a set time limit. Rather, it appears from recital 76 of the provisional regulation that the Commission was not satisfied with the completeness, quality and accuracy of the cost of production data, in particular the raw material data, which it submitted within the prescribed time limits. According to the applicant, the reasons set out in recitals 76 and 77 of the provisional regulation were not sufficient to meet the requirements of Article 18(1) of the basic regulation, since, although there were deficiencies in the reported costs of production, these were not of such a magnitude as to lead to the conclusion that the applicant had not provided the necessary information.

36      The applicant claims, inter alia, that it reported the cost of manufacturing and the cost of raw materials, including their allocation on the basis of individual raw materials, in the replies to the Commission’s questionnaire and in the supplementary replies to the letters inviting it to remedy certain deficiencies. Furthermore, during the verification visit, the Commission obtained even more precise information on the allocation of the cost of raw materials, so that it had sufficient information to reach reasonably accurate conclusions regarding the applicant’s manufacturing costs for the purpose of determining normal value.

37      The applicant explains that, as it had indicated in its letter of 13 November 2015 referred to in paragraph 9 above, in accordance with its data system, it had to report its costs on the basis of its own product codes, which could not be automatically applied to the Product Control Numbers (‘PCNs’) on the Commission’s anti-dumping questionnaire, [confidential] (1) To the extent that [confidential], it could not have fully met the Commission’s requirements because of the peculiarities of its registration system, but that information should have enabled the Commission to reach reasonably accurate conclusions on total costs of production. Furthermore, the Commission refused to accept the guidance on the reconciliation of costs that the applicant had tried to provide during the verification visit.

38      The applicant further claims that, as stated in its letter of 13 November 2015, the actual cost (total amount invoiced) of raw materials was appropriately and accurately reflected in its cost of production in accordance with Russian and international accounting standards. The applicant adds that even if the costs were not properly and accurately reflected, that did not have a significant impact on the determination of the costs of production.

39      In the first place, the discrepancies in the data relating to the cost of raw materials identified during the on-the-spot verification in [confidential] of the applicant’s letter of 24 September 2015 in response to the Commission’s second letter of 10 September 2015 inviting it to remedy certain shortcomings were negligible, since the difference between the value reported and the value verified in the accounting system during the on-the-spot verification was in practice less than 1%. Furthermore, the Commission refused to accept a revised version of [confidential] with accurate data which the applicant had offered to provide without delay.

40      In the second place, the issues identified by the Commission in recital 76 of the provisional regulation did not have a significant effect on the total cost of raw materials reported in the questionnaire reply. The applicant argues that, as stated in its letter of 24 September 2015 referred to above and in its submission of 8 March 2016, it could report in its response to the questionnaire only the total, but actual and verifiable, cost of direct raw materials on a product code basis, as its internal computerised accounting system SAP ERP (‘the SAP accounting system’) could not easily provide a detailed breakdown of the cost of raw materials. However, in order to provide the breakdown by raw material requested by the Commission in its letter of 10 September 2015, the applicant had to use a reasonable allocation key in order to allocate the total cost of raw materials to the main raw materials. That method was based on [confidential] and then applied those rates to the total production costs for each PCN. Therefore, the applicant’s total cost of production and the total cost of raw materials, as reported in the original response to the anti-dumping questionnaire, were actual costs extracted from the accounting system and were not dependent on the purchase-listing file, referred to in recital 76 of the provisional regulation, in which the Commission detected deficiencies that could therefore not have had a significant effect on the cost of production reported on an PCN basis.

41      Secondly, the applicant claims that its cost of production data, as submitted in the replies and verified on the spot, did not create an undue difficulty, such as to prevent the Commission from reaching correct conclusions regarding the cost of production and, therefore, regarding normal value, based on the actual domestic sales for the applicant. It further submits that the Commission could have ascertained the accuracy of the data by other means. In that context, the applicant reiterates that it is not the specific cost of individual raw materials for each PCN, but the total cost of raw materials, which is information necessary for the investigating authority to verify whether the sales were made in the ordinary course of trade and to make its determinations regarding the cost of production.

42      In response to the Commission’s allegation that the cost information provided by the applicant during the on-the-spot verification, in an attempt to reconcile its own classification with the structure required by the Commission, was available only for products ‘sold’ to the exclusion of products processed in-house, the applicant adds that the Commission’s own anti-dumping questionnaires presume that the cost of manufacturing of the products sold and the cost of manufacturing of the products which are used as inputs for further processing are identical.

43      Finally, contrary to the Commission’s assertion, the applicant reported the purchases of raw materials in its response of 24 September 2015 to the second letter inviting it to remedy certain deficiencies, dated 10 September 2015, to [confidential], in which all suppliers were clearly identified according to whether or not they were related.

44      Thirdly, it was exposed to objective difficulties in responding to the Commission’s requests, in particular by having to download a large volume of electronic data from its SAP accounting system at very short notice following a request made at a late stage of the verification visit, namely on the last day of the visit. More generally, if it were to be found that the applicant had failed to provide a particular piece of information within a particular timeframe, that would not be a failure to cooperate, but would be the result of administrative or human resources difficulties which could have been quickly rectified.

45      The Commission contests the applicant’s arguments.

46      As a preliminary point, it should be recalled that Article 6(2) of the basic regulation (now Article 6(2) of Regulation 2016/1036) provides that a questionnaire is to be prepared and sent to interested parties by the Commission services for the purpose of obtaining the information necessary for the anti-dumping investigation. Those parties are obliged to provide those services with the information which will enable it to carry out the anti-dumping investigation (see, to that effect, judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 50 and 51).

47      According to Article 6(8) of the basic regulation (now Article 6(8) of Regulation 2016/1036), ‘except in the circumstances provided for in Article 18, the information which is supplied by interested parties and upon which findings are based shall be examined for accuracy as far as possible’. Similarly, Article 6.6 of the Anti-Dumping Agreement provides that, ‘except in circumstances provided for in paragraph 8, the authorities shall during the course of an investigation satisfy themselves as to the accuracy of the information supplied by interested parties upon which their findings are based’. That obligation to verify is the expression, in the context of the imposition of anti-dumping measures, of a more general principle which requires any authority, notwithstanding its broad discretion, to carry out an accurate examination and to base its assessment on evidence of sufficient quality (see judgment of 3 December 2019, Yieh United Steel v Commission, T‑607/15, under appeal, EU:T:2019:831, paragraph 71 and the case-law cited).

48      One of the tools available to the investigating authority for fulfilling its obligation under Article 6(8) of the basic regulation is the on-the-spot verification visit pursuant to Article 16 of that regulation (now Article 16 of Regulation 2016/1036) if the authority deems it appropriate. Article 6.7 of the Anti-Dumping Agreement provides that, ‘in order to verify information provided or to obtain further details, the authorities may carry out investigations in the territory of other [Member States] as required, provided they obtain the agreement of the firms concerned and notify the representatives of the government of the Member [State] in question, and unless that Member [State] objects to the investigation’.

49      Therefore, Article 16(1) and (3) of the basic regulation (now Article 16(1) and (3) of Regulation 2016/1036) provides, first, that the Commission may carry out visits to examine, inter alia, the records of producers and exporters and to verify the information submitted with regard to dumping and injury and, secondly, that the undertakings concerned are to be advised of the nature of the information to be verified and of any other information to be provided during such visits, which does not preclude the possibility of requesting further clarifications on the spot in the light of the information obtained.

50      As the Court has emphasised, the parties’ replies to the questionnaire provided for in Article 6(2) of the basic regulation and the subsequent verification which the Commission may carry out on the spot, provided for in Article 16 of that regulation, are essential to the conduct of the anti-dumping procedure (see judgment of 30 April 2015, VTZ and Others v Council, T‑432/12, not published, EU:T:2015:248, paragraph 29 and the case-law cited).

51      According to Article 18(1) of the basic regulation, the EU institutions may rely on the facts available in order to make provisional or final, affirmative or negative, findings, in cases in which any interested party refuses access to, or otherwise does not provide, necessary information within the time limits provided for in that regulation, or significantly impedes the investigation. Where it is found that any interested party has supplied false or misleading information, the information is to be disregarded and use may be made of facts available. Interested parties must be made aware of the consequences of non-cooperation.

52      According to Article 18(3) of the basic regulation (now Article 18(3) of Regulation 2016/1036), ‘where the information submitted by an interested party is not ideal in all respects it should 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’.

53      Furthermore, it follows from Article 18(3) and (6) of the basic regulation (Article 18(6) having become Article 18(6) of Regulation 2016/1036) that the information which interested parties are required to provide to the Commission must be used by the EU institutions for the purpose of establishing the findings of the anti-dumping investigation and that those same parties must not omit any relevant information. The necessity of a given piece of information is assessed on a case-by-case basis (see, to that effect, judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraph 52).

54      As the Court has further noted, it is for the Commission, as the investigating authority, to establish the existence of dumping, injury and a causal link between the dumped imports and injury. In so far as there is no provision of the basic regulation which gives the Commission the power to compel interested parties to participate in the investigation or to provide information, that institution is dependent on the voluntary cooperation of these parties to provide the necessary information. In that context, it follows from recital 27 of the basic regulation that the EU legislator intended to provide that, in respect of parties which 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 purpose of Article 18 of the basic regulation is to allow the Commission to continue the investigation even if interested parties refuse to cooperate or cooperate insufficiently. Therefore, given that they are obliged to cooperate to the best of their ability, interested parties must provide all the information at their disposal which the institutions consider necessary for the purpose of making their findings (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 54 to 57).

55      It follows from the foregoing that the purpose of the verification is to enable the Commission to carry out its task and, in particular, to understand and verify the methods used to compile the data and, more generally, to ensure the ‘accuracy’ of the information provided by the undertaking subject to verification, which must answer the questions put by the Commission to the best of its abilities and in full and must not fail to provide all the relevant data and explanations so that the Commission can carry out the cross-checks necessary to verify the accuracy of the data provided and reach reasonably correct conclusions in good time and in any event before the end of the verification, failing which the information can no longer be taken into account (judgment of 3 December 2019, Yieh United Steel v Commission, T‑607/15, under appeal, EU:T:2019:831, paragraph 78).

56      Finally, it must be observed that, according to the case-law of the Court of Justice, in the field of the common commercial policy, and particularly in the field of trade defence measures, the EU institutions have a wide discretion because of the complexity of the economic, political and legal situations which they must examine. Judicial review of such an assessment must therefore be limited to verifying compliance with the procedural rules, the material accuracy of the facts used to make the contested choice, the absence of a manifest error in the assessment of those facts or the absence of misuse of powers (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraph 68).

57      In that context, the review by the General Court of the evidence on which the EU institutions base their findings does not constitute a new assessment of the facts replacing that of those institutions. That review does not encroach on the broad discretion of those institutions in the field of commercial policy, but is limited to ascertaining whether that evidence is such as to support the conclusions drawn by the institutions. It is therefore for the Court not only to 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 (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraph 69).

58      As the Commission rightly noted, while the verification of the profitability of the sales of the product concerned in the exporting producer’s domestic market is a key element of the anti-dumping investigation, the verification of the accuracy and correct allocation of the costs of production, as reported in the reply to the anti-dumping questionnaire, to the product concerned is even more complex when, as in the present case, the product concerned is, first, a semi-finished product, which can either be sold to independent buyers or processed in-house, and, secondly, is manufactured by an integrated steel producer which itself provides part of the inputs, in particular the raw materials necessary to manufacture the product concerned. In such a case, it is essential for the verification to have detailed information on, inter alia, the costs of the different raw materials of the product concerned produced during the investigation period, including that for captive use.

59      It follows from the statements in recitals 59, 76 and 80 of the provisional regulation, confirmed in recital 37 of the contested regulation, that, in view of the findings of the on-the-spot verification, the Commission adjusted the costs of production of the product concerned as reported in the questionnaire reply, in so far as it considered that the information provided did not allow it to assess accurately and reliably the cost of materials used by the applicant for the production of the product concerned.

60      First, according to recital 76 of the provisional regulation, the Commission considered that the applicant had not properly and accurately reflected in its report the actual cost of materials and related purchase costs. The Commission noted that it had not been able to reconcile the quantities, values and related costs of certain raw materials purchased from the applicant’s accounts, as the latter had not reported those costs in the purchase listings of raw materials submitted to the Commission in its replies to the questionnaire and to the deficiency letter. The Commission also noted that, in its reply of 24 September 2015 to the deficiency letter of 10 September 2015, the applicant had not reported the purchases of raw materials in the format requested in the questionnaire, which made it impossible for the Commission to verify the changes in stocks and the consumption of raw materials during the investigation period. Furthermore, according to the same recital 76 of the provisional regulation, the Commission stated that it had evidence collected during the on-the-spot verification that the manufacturing costs in the applicant’s accounts differed from the manufacturing costs reported for the same accounts in the automatic cost allocation module used for the allocation of costs to the different products.

61      For those reasons, the Commission informed the applicant, by letter of 30 October 2015, that it had not provided the necessary information concerning the cost of manufacturing of the product concerned within the time limits set out in the basic regulation, so that it intended to apply facts available in accordance with Article 18 of that regulation for the establishment of the normal value.

62      Next, as is apparent from recital 78 of the provisional regulation, the applicant submitted, on 13 November 2015, additional explanations regarding the differences between the expenses recorded in its general ledger and the costs identified in its cost calculation report. The applicant also admitted the existence of the discrepancies found by the Commission during the on-the-spot verification visit concerning the costs of purchase of raw materials, but claimed that it could immediately identify the reasons for those discrepancies, which it considered to be clerical errors.

63      Furthermore, it follows from recital 79 of the provisional regulation that the Commission examined the comments and explanations submitted by the applicant and considered that the accuracy of the additional information submitted could no longer be verified or reconciled with the applicant’s accounts. The Commission also considered that the discrepancies it had found on the spot concerning the costs of purchasing raw materials were not clerical errors and noted that the applicant had not contested its finding that information concerning the costs associated with the purchase of raw materials, stocks of raw materials and consumption of raw materials was missing from its replies to the questionnaire and the deficiency letter. The Commission concluded that the applicant’s comments and further explanations did not contain any new verifiable information capable of altering its intention to use the facts available to determine normal value.

64      Finally, it is apparent from recital 80 of the provisional regulation, confirmed in recital 37 of the contested regulation, that the Commission also found during the on-the-spot verification visit a significant difference between the material consumption rates that the applicant had communicated to the Commission during that visit and those that it had reported on 24 September 2015 in its reply to the deficiency letter of 10 September 2015. The Commission asked the applicant on the spot for information regarding that discrepancy, and the latter clarified that, for the reporting of its material expenses, it had not used the consumption ratios from its control department, but had calculated the consumption ratios by dividing the material expenses reported to the Commission by the cost of goods sold. For that reason, the Commission considered that the material consumption ratios reported by the applicant did not allow it to make an accurate assessment of its material expenses. Therefore, as indicated above, the Commission decided to amend the cost of production reported by the applicant to bring it into line with the evidence on the cost of raw materials collected by the applicant during the on-the-spot verification.

65      It should be noted that the basic regulation does not define what is ‘necessary’ information within the meaning of Article 18(1) of the basic regulation. However, it should be pointed out that the WTO Panel considered, in paragraph 7.43 of the report entitled ‘Korea – Anti-Dumping Duties on Imports of Certain Paper from Indonesia’ (WT/DS 312/R), adopted on 28 October 2005, that the decision on whether or not a given piece of information is necessary within the meaning of Article 6.8 of the Anti-Dumping Agreement should be taken in the light of the specific circumstances of each investigation, and not in the abstract. In addition, the WTO Panel stated in paragraph 7.343 of its report entitled ‘European Communities – Anti-dumping measure on farmed salmon from Norway’ (WT/DS 337/R), adopted on 15 January 2008, that particular information held by an interested party and requested by the authority conducting the anti-dumping investigation for the purpose of making determinations should be considered necessary within the meaning of that provision (judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council, T‑633/11, not published, EU:T:2014:271, paragraph 46). Similarly, the Court held that it followed from the terms, context and purpose of Article 18(1) of the basic regulation that the concept of ‘necessary information’ referred to the information held by interested parties which the EU institutions requested them to provide in order to make the appropriate findings in the anti-dumping investigation (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 54 to 57).

66      As the Commission rightly noted, the information on raw material costs, which in this case represents around [confidential] % of the manufacturing costs of the product concerned, is clearly necessary information within the meaning of Article 18(1) of the basic regulation.

67      The Commission found that the actual costs of individual raw materials were not accurately and fairly reported by the applicant in its successive versions of Annex F‑15 (namely, Table F.2, relating to purchases of raw materials) of the reply to the anti-dumping questionnaire, so that it was unable to carry out the necessary checks on the accuracy of the total raw material costs reported in a timely manner, in particular during the verification visit, although it had pointed out the deficiencies in the applicant’s reply to the questionnaire in its first letter of 10 September 2015, by which it invited the applicant to remedy those deficiencies by requesting it to indicate, inter alia, [confidential]. In addition, some on-the-spot checks showed that the data reported for one of the raw materials in question, in this case iron ore pellets, were not reliable.

68      The Commission notes, in particular, that the applicant failed to meet the deadline for providing several data concerning the costs of manufacturing the product concerned, whereas, as noted in paragraph 58 above, such detailed information is particularly important when the anti-dumping investigation concerns a semi-finished product manufactured by an integrated producer. Thus, the reply to the anti-dumping questionnaire did not include the requested information on transport costs related to the purchase of raw materials, nor did it include complete information on opening and closing stocks of raw materials, consumption of raw materials and their average unit costs during the investigation period.

69      It should be noted in that regard that, admittedly, as the applicant claims, it is the total cost of the raw materials which is important in order to enable the Commission to ascertain whether the sales were made in the ordinary course of trade and to make its findings regarding the cost of production. However, in order to carry out its basic task of verifying the accuracy of the information provided, as recalled in paragraph 55 above, and, in particular, in order to verify the accuracy of the total cost of raw materials reported by the applicant for the product concerned, the Commission must have precise information on the individual costs of each raw material used in the production of the product concerned, which thus constitutes necessary information to be provided to it within the time limits prescribed.

70      First, it must be noted that the Commission could not verify whether the total costs of purchase of raw materials were accurately reflected in the applicant’s accounts and whether they were indeed included in the cost of manufacturing of the product concerned, in particular since it is common ground that the total costs of raw materials relating to the ‘production of the product concerned’ were not reported, as requested, in Annex F‑12 (Table F.2, entitled ‘Overview of Severstal’s Production Costs’) of the reply to the anti-dumping questionnaire, as it only included the costs for the ‘sales’ of the product concerned, and not also those for the products intended for captive use. As the Commission points out, in the absence of that data, it could not cross-check the cost allocation in relation to total production, including that for internal consumption within the company, with the applicant’s annual accounts.

71      Secondly, the applicant does not dispute that the data on purchases of raw materials submitted in Annex F‑15 to the reply to the questionnaire were incomplete in that they did not include, inter alia, [confidential], without which it is not possible to verify whether the sales prices between related parties are in line with the market price. The data in question were finally provided in the letter of 24 September 2015, but in an incomplete manner, in so far as, inter alia, [confidential], costs related to the purchase of raw materials (transport) and information on stock changes and material consumption, by raw material, were not provided in that revised annex, as reiterated by the Commission at the hearing.

72      Thirdly, it is common ground that the applicant did not report its manufacturing costs in Annex F‑14 A of the reply to the anti-dumping questionnaire in accordance with the classification of costs in the various PCNs adopted by the Commission for the conduct of the investigation in question, it being recalled that the assessment of the passing-on anti-dumping duties by using a PCN-by-PCN method is considered appropriate, in particular where, as in the present case, complex products are involved, the models of which have different technical characteristics and prices which may vary significantly (see, to that effect, judgment of 18 November 2015, Einhell Germany and Others v Commission, T‑73/12, EU:T:2015:865, paragraphs 75 and 76). It was only during the on-the-spot verification visit that the applicant provided a reconciliation between its own classification and the PCN structure requested by the Commission, whose information was, however, limited, as the applicant confirmed at the hearing, to the manufacturing costs of the ‘sold’ products, to the exclusion of the manufacturing costs relating to the products processed in-house. The Commission rightly deduced that it could not carry out the necessary verifications in the absence of presentation of the data in the required format. In the absence of that data, the Commission could not confirm or refute the assumption that the average production costs for sold products and for products used as inputs in the production of other products were identical.

73      Fourthly, the Commission further noted during a check carried out in the course of the on-the-spot verification, inter alia, that the costs reported by the applicant for electricity (from the cost allocation module of its SAP accounting system) did not correspond to the costs reported in its general ledger, and the applicant was unable to give an explanation for that during the verification visit. The Commission could validly conclude therefrom that the unreliability of the applicant’s accounting system went beyond the recording of raw materials, even though, as the applicant pointed out at the hearing, the Commission did not adjust those costs accordingly.

74      Fifthly, the Commission is also right to argue, more fundamentally, that the applicant, by wrongly considering that the Commission should be satisfied with the total costs of the raw materials without providing the actual ratios of the consumption of those materials, did not allow it to check in particular whether [confidential], corresponded to the reality.

75      While the Commission accepts that the applicant provided, in its reply of 24 September 2015, the breakdown of raw material costs (of the products sold only) in Annex F-14 A, the consumption ratios used related to the production of all products manufactured by the applicant, not to the production of the product concerned solely. It was only during the verification visit that the applicant submitted the requested information relating to the product concerned solely, in the form of Verification Exhibit 16, which, as shown in paragraphs 90 and 91 below, revealed that the applicant had adopted two different allocation keys for raw material costs.

76      Sixthly, the applicant failed to substantiate its allegations that the Commission imposed an excessive additional burden or cost on it within the meaning of Article 18(2) of the basic regulation (now Article 18(2) of Regulation 2016/1036) by requiring it to upload the large volume of data requested during the verification visit, despite the fact that it acted ‘to the best of its abilities’. It follows from the abovementioned Article 18(2) that it is up to the party concerned to demonstrate that the submission of the requested data in the required form could prove to be impossible or might entail an excessive burden or additional cost.

77      Finally, in so far as the applicant’s argument can be understood as meaning that the application of the data available under Article 18 of the basic regulation presupposes, in any event, intentional conduct, whereas the Commission has not demonstrated the existence of such conduct, that argument must be rejected.

78      Recourse to Article 18 of the basic regulation, which constitutes the transposition into EU law of the content of paragraph 6.8 and Annex II to the Anti-Dumping Agreement, in the light of which it must be interpreted as far as possible, is not excluded in the absence of intentional conduct (see, to that effect, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraphs 103 and 104).

79      As is apparent from that case-law (judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraph 104), the extent of the efforts made by an interested party to submit certain information does not necessarily bear any relation to the intrinsic quality of the information submitted and is not, in any event, the sole determining factor. Thus, if the requested information is ultimately not obtained, the Commission is entitled to have recourse to the facts available in respect of that information (see, in relation to paragraph 6.8 of the Anti-Dumping Agreement, the WTO Panel Report entitled ‘Egypt – Definitive Anti-Dumping Measures on Steel Rebar from Turkey’, adopted on 1 October 2002, paragraph 7.242).

80      That assessment is supported by Article 18(3) of the basic regulation, according to which, where the information provided is not the best information available in all respects, it should not be disregarded, provided that it does not make it excessively difficult to arrive at reasonably accurate findings, that it is provided in a timely manner, that it is verifiable and that the party has acted to the best of its abilities. Acting to the best of one’s ability is therefore one of the conditions that must be met in order for the Commission to be obliged to take deficient information into account. It is apparent from an examination of the first and third parts of the present plea and from an examination of the second plea that, despite the fact that the applicant has not established that it was not in possession of the necessary data, the data which it communicated to the Commission during the administrative procedure concerning the costs of production of the product concerned remained incomplete, contradictory or unverifiable because they were provided late and, therefore, are unreliable, so that the applicant cannot be regarded as having acted to the best of its abilities (see, to that effect, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraph 105).

81      As the Commission reiterated in its written reply to a question put by the Court, it must be satisfied as to the accuracy of the applicant’s total costs, the allocation of those costs to the production of the product concerned and the volume of production sold or used for captive purposes in order to be able to establish, on the basis of precise and verified data relating to those various elements, a reliable unit cost of manufacture. It follows from the foregoing that the Commission did not commit a manifest error by considering that it could not verify whether the total purchase costs of the raw materials were accurately reflected in the applicant’s accounts and whether those costs were in fact included in the cost of manufacturing the product concerned.

82      Consequently, the applicant’s argument that, even if the data provided in the questionnaire replies and verified on the spot had certain deficiencies, those were not of such a magnitude as to create an undue difficulty for the Commission in reaching reasonably correct conclusions regarding the costs of production, so that by having recourse to Article 18 of the basic regulation to adjust the cost of production of the product concerned the Commission infringed that article, must also be rejected.

83      In those circumstances, the Commission could, for the purpose of calculating normal value, validly make an adjustment to the applicant’s cost of production data for the product concerned using Article 18 of the basic regulation in order to arrive at reasonably correct conclusions, as those data were incomplete, inconsistent or unverifiable and, therefore, unreliable.

84      It follows from the foregoing that the first part of the first plea in law, alleging infringement of Article 18 of the basic regulation in that the applicant’s degree of cooperation and the quality of the data which it had provided precluded the application of that provision to it, must be rejected.

 The third part of the first plea in law

85      By the third part of the first plea in law, the applicant claims that the Commission committed a manifest error of assessment concerning the cost structure of the raw materials in question which led to their double counting and which also vitiated the manifestly unnecessary and inappropriate adjustment of the costs of production, as explained in paragraph 80 of the provisional regulation.

86      The applicant notes that, in its letter of 24 September 2015, in response to the Commission’s letter of 10 September 2015 inviting the applicant to [confidential], it applied an ad hoc consumption ratio, based on a reasonable ratio calculated on the basis of the [confidential] manufactured by the applicant, and not exclusively of the product concerned, to the total reported cost of production of the product concerned alone. The difference of [confidential] between the total cost of raw materials, extracted from its accounting system, and the sum of the costs of raw materials calculated according to the ad hoc allocation method was attributed to ‘other raw materials’. When the Commission decided to apply the contested adjustment, as explained in recital 59 of the provisional regulation, it made its own calculation of the material consumption using the actual consumption ratios of the specific raw materials as set out in Verification Exhibit 16 provided by the applicant during the on-the-spot verification and which concerns the requested breakdown of the production costs of the product concerned only, and not of the entire production. According to the applicant, the Commission’s results differed from the costs of ‘other materials’ reported by the applicant simply because of the use of different material consumption ratios. Thus, the Commission committed an arithmetical error resulting from a manifest error of assessment when it assessed the applicant’s raw materials cost structure and when it made, on that basis, an excessive adjustment, namely a manifestly erroneous and inappropriate increase in the value of all raw materials. In particular, the Commission [confidential].

87      In the alternative, the applicant claims that, if the Commission were to argue that that adjustment was justified under Article 18 of the basic regulation on the basis of non-cooperation, that adjustment would also be manifestly inappropriate in view of both the limited nature of the deficiencies found in the applicant’s data and the seriousness of the consequences of such an adjustment. As a result of that adjustment, the Commission disregarded almost all the domestic sales reported and replaced them with constructed normal values, the cost of production of which was artificially inflated after the adjustment of [confidential] %. By placing the applicant in the same situation as a completely non-cooperating producer, that resulted in a prohibitive anti-dumping duty rate of 34%, which is manifestly inappropriate in the light of the objective pursued by Article 18 of the basic regulation, namely to protect the Union industry from dumping without, as in this case, blocking all of the applicant’s export sales by imposing a prohibitive rate.

88      The Commission contests the applicant’s arguments.

89      As noted above, it is apparent from recital 80 of the provisional regulation that the Commission found during the on-the-spot verification that the material consumption ratios provided by the applicant’s control department during that verification differed significantly from those reported by the applicant on 24 September 2015 in its reply to the deficiency letter. The Commission requested information regarding that discrepancy from the applicant on the spot, and the latter clarified that, for the reporting of its material expenses in the revised Annex F-14 A, it had not used the consumption ratios of its control department, but had calculated them by dividing the material expenses reported to the Commission by the cost of goods sold. For that reason, the Commission considered that the material consumption ratios reported by the applicant did not allow it to make an accurate assessment of its material expenses. Consequently, the Commission decided to amend the cost of production reported by the applicant to bring it into line with the evidence on the cost of raw materials collected by the applicant during the on-the-spot verification.

90      It is common ground that the applicant adopted two different allocation keys for the costs of raw materials. First, in its letter of 24 September 2015, it argued that those costs, which were moreover limited to those of the products sold, should be allocated according to an ad hoc methodology, on a theoretical basis, [confidential], of an amount of [confidential] of the reply to the anti-dumping questionnaire. On the basis of the [confidential], a consumption ratio of the main raw materials was calculated and then applied to the total cost of production of the product concerned reported by the applicant, resulting in a difference of [confidential] between the total cost of raw materials extracted from its accounting system and the sum of the costs of the four main raw materials of the product concerned calculated according to the ad hoc allocation methodology. That difference was attributed to ‘other raw materials’ without any further clarification as to the composition of the latter category. Next, during the on-the-spot verification, the applicant used a different allocation of raw material costs based on the actual raw material costs for the product concerned. On the basis of the data thus provided by the applicant, the Commission identified a total under-reporting of raw material costs for the product concerned of [confidential] equivalent to the difference between the total costs of the main raw materials reported in the revised version of Annex F‑14 A and the value of the raw materials necessary for the production of the product concerned calculated on the basis of the consumption ratios mentioned in Verification Exhibit 16 collected during the on-the-spot verification. To the extent that the material consumption ratios reported by the applicant in its questionnaire reply did not allow an accurate assessment of the cost of materials used by the applicant for the production of the product concerned, the Commission confirmed the adjustment announced in the provisional findings.

91      The applicant has not shown that the Commission committed a manifest error of assessment by considering that, as is apparent from the examination of the first part of this plea, it could not verify whether the applicant had consistently reflected the exact total costs of the various raw materials used in the production of the product concerned, including that intended for captive use, and by calculating, subsequently, the value of the raw materials necessary for the production of the product concerned on the basis of the consumption ratios set out in Verification Exhibit 16 provided by the applicant itself during the on-the-spot verification, in order to find an under-reporting amounting to [confidential].

92      That conclusion cannot be undermined by the applicant’s argument that the [confidential], if only in so far as that argument is based on a theoretical calculation methodology which the applicant itself rejected when it presented the breakdown of raw materials based on the actual data during the on-the-spot verification.

93      Accordingly, it is also necessary to reject the applicant’s argument that, by subsequently calculating that the under-reporting found corresponded to [confidential] % of the total raw material costs reported and [confidential] each of the various allocated raw material costs as reported by the applicant in the revised Annex F‑14 A to its reply of 24 September 2015, the Commission made a manifestly ‘unnecessary and inappropriate’ adjustment on the ground that the applicant provided verifiable total raw material costs, verified raw material consumption ratios and verifiable data for the main raw materials, since it is apparent from the reply to the first part of the present plea and the considerations set out in the context of the part under consideration that the data provided were incomplete, inconsistent or submitted late and, therefore, unreliable.

94      Finally, in so far as the applicant argues that the adjustment made is inappropriate in view of the limited deficiencies found and the consequences of its application, that argument must also be rejected.

95      As is apparent from the examination of the first and third parts of the present plea, the Commission did not infringe Article 18 of the basic regulation by concluding that the data on the costs of production of the product concerned which had been submitted by the applicant were incomplete and unreliable and that it had to replace them with the data available under that article in order to reach conclusions based on accurate facts (as regards the Anti-Dumping Agreement, see, to that effect, the WTO Panel Report in case WT/DS 206/R, entitled ‘United States – Anti-Dumping and Countervailing Measures on Steel Plate from India’, of 28 June 2002, paragraph 7.60). In that regard, it follows from recital 27 of the basic regulation that the EU legislator intended to provide that, in respect of parties which do not cooperate satisfactorily, as is clearly the case in this instance, other information may be used for the purposes of making findings and that such information may be less favourable to those parties than if they had cooperated. Thus, the purpose of Article 18 of the basic regulation is to allow the Commission to continue the investigation even if interested parties refuse to cooperate or cooperate insufficiently (judgment of 14 December 2017, EBMA v Giant (China), C‑61/16 P, EU:C:2017:968, paragraphs 54 and 55).

96      The fact that the major part of the normal value of the applicant’s product concerned consequently had to be constructed, leading to a normal value at a higher level than that resulting from the data reported by the applicant, is a direct consequence of Article 2(3) and 2(4) of the basic regulation, according to which the Commission has to construct normal value where it finds, on the basis of objective evidence, that domestic sales are not profitable.

97      The applicant has not shown that the Commission infringed the principle of proportionality or the objectives pursued by Article 18 of the basic regulation by using the data available for the calculation of the costs of raw materials, which is not vitiated by any manifest error, so that the third part of the first plea in law must be rejected.

 The second part of the first plea in law

98      By the second part of the first plea in law, the applicant claims that the provisions of Article 18(1) and (3) of the basic regulation are intended to ensure the performance of the specific obligations set out in Article 6.8 and Annex II, paragraphs 2, 3, 5 and 7, of the Anti-Dumping Agreement, so that a breach of the former automatically entails a breach of the latter. Furthermore, the Commission did not respect the criterion of ‘cooperation’ established by the Anti-Dumping Agreement and thus infringed Article 6.8 and Annex II of that agreement. In particular, the Commission, while acknowledging that it had cooperated, imposed an excessive burden on it within the meaning of paragraph 2 of Annex II of the Anti-Dumping Agreement by concluding that it had not provided the information requested within the time limits laid down, although it had asked it to provide very detailed computerised replies based on its complex product coding system. Similarly, the Commission did not establish that it had not acted to the best of its abilities within the meaning of paragraph 5 of Annex II of the Anti-Dumping Agreement. In the end, the Commission violated the rules on cooperation set out in Article 6.8 and Annex II of the Anti-Dumping Agreement and imposed on it a stricter cooperation criterion than that set out in the Anti-Dumping Agreement for a finding of non-cooperation.

99      The Commission contests the applicant’s arguments.

100    In response to that complaint, it is sufficient to point out, first, that it follows from the examination of the first part of the present plea that the applicant has not shown that the Commission infringed Article 18 of the basic regulation by using facts available because of the unreliability of the data provided by the interested party, who, moreover, had not acted to the best of its abilities, and, secondly, that, in so far as Article 6.8 and Annex II of the Anti-Dumping Agreement, in the light of which Article 18 of the basic regulation must be interpreted to the extent possible, also concern the reliability of the data provided without giving decisive weight to the conduct of the interested party (see, to that effect, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraphs 103 and 104), there is no reason to consider that a different conclusion should be reached with regard to the provisions of the Anti-Dumping Agreement.

101    Consequently, the second part of the first plea in law must also be rejected.

102    In the light of all the foregoing considerations, it must be concluded that, contrary to what the applicant alleges, the Commission did not commit an error of law or manifest errors of assessment in deciding to apply facts available in accordance with Article 18 of the basic regulation and to make the contested adjustment, so that the first plea in law must be rejected in its entirety.

 The second plea in law, alleging infringement of right to a fair trial and the rights of defence

103    By the present plea in law, the applicant claims that the Commission infringed its rights of defence and the principle of good administration so as to justify the annulment of the contested regulation.

104    First, the applicant observes that, contrary to what the Commission alleges, it asked the Hearing Officer established by Decision 2012/199/EU of the President of the European Commission of 29 February 2012 on the function and terms of reference of the hearing officer in certain trade proceedings (OJ 2012 L 107, p. 5) to intervene in the proceedings at issue.

105    Secondly, as is apparent from recitals 79 and 80 of the provisional regulation and recital 37 of the contested regulation, at least from the stage of the verification visit and the letter concerning the application of Article 18 of the basic regulation or thereafter, the Commission rejected or set aside, without explanation, any argument or additional information provided by the applicant concerning the application to it of that article and the status of partial non-cooperation. Therefore, the Commission adopted a restrictive approach to the collection of documents, in particular during the verification visit, by refusing to collect a number of documents and explanations proposed by the applicant, and it refused the applicant’s proposal to provide without delay a revised version of the annex with accurate data on purchases of raw materials.

106    Thirdly, the organisation of hearings by the Commission and the procedural possibility of commenting on the provisional and definitive findings were intended solely to create an appearance of respect for the rights of the defence and the right to be heard, whereas, in fact, the applicant’s arguments were not taken into consideration by the Commission.

107    Fourthly, the Commission also refused a second verification visit, considering that some of the information newly provided by the applicant was no longer verifiable, although the latter sought to correct the numerous cases where the Commission had not taken into account the explanations or additional information it had provided.

108    According to the applicant, the respect of the rights of defence could have affected the entire calculation of the dumping margin and the anti-dumping duty as far as the applicant is concerned and even a minor downward correction of the dumping margin would have led to the imposition of a lower anti-dumping duty in view of the small difference between the injury margin of 34% and the dumping margin of 35.9% as far as the applicant is concerned.

109    The Commission contests the applicant’s arguments.

110    At the outset, the Commission’s argument that the fact that the applicant did not request the intervention of the Hearing Officer should influence the examination of the plea alleging failure to respect the rights of the defence must be rejected. It should be noted in that regard that, as is apparent from recitals 3, 4 and 8 of Decision 2012/199, the intervention of the Hearing Officer is intended to strengthen the procedural guarantees for the exercise of the procedural rights of the parties concerned. However, such intervention remains purely optional, as is also stated in point 7 of the Commission’s notice of initiation of 14 May 2015 (see paragraph 2 above) or in the Commission’s letter of 30 October 2015 (see paragraphs 8 and 61 above), so that the failure to refer the case to the Hearing Officer, assuming it is established, is not such as to influence the assessment, by the EU judicature, of an alleged infringement of the rights of the defence.

111    With regard to the principles and procedural safeguards which the institutions are required to respect when interested parties in an anti-dumping investigation wish to exercise their rights of defence by gaining access to information concerning facts or considerations which may form the basis of anti-dumping measures, it should be noted that it is settled case-law that the requirements arising from the respect of the rights of defence apply not only in the context of proceedings which may lead to sanctions, but also in the context of investigation proceedings preceding the adoption of anti-dumping regulations which may affect the undertakings concerned directly and individually and have adverse consequences for them. In particular, in the context of the communication of information to the undertakings concerned during the investigation procedure, respect for their rights of defence implies that those undertakings must have been given the opportunity, during the administrative procedure, to make their views known on the reality and relevance of the facts and circumstances alleged and on the evidence relied on by the Commission in support of its allegation of dumping and injury resulting therefrom (see judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraphs 91 and 92 and the case-law cited).

112    Furthermore, in the context of anti-dumping investigations, it is for the institutions to ensure compliance with the principle of good administration enshrined in Article 41(1) and (2) of the Charter of Fundamental Rights of the European Union (‘the Charter’), according to which every person has the right to have his or her affairs handled impartially, fairly and within a reasonable time by the institutions, bodies and offices of the Union. It is the latter article of the Charter, and not Article 47 thereof, which governs the administrative procedure before the Commission and the Council of the European Union in relation to the defence against dumped imports from non-member countries of the European Union (see judgment of 12 December 2014, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑643/11, EU:T:2014:1076, paragraph 45 and the case-law cited). The right to good administration includes, inter alia, under Article 41(2)(a) of the Charter, the right of every person to be heard before an individual measure which would adversely affect him or her is taken (judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 95).

113    Those principles are implemented in the basic regulation by a comprehensive system of procedural safeguards aimed, inter alia, at ensuring that interested parties can effectively defend their interests. Thus, Article 20 of the basic regulation (now Article 20 of Regulation 2016/1036), which corresponds, in substance, to the provisions of Article 6.9 of the Anti-Dumping Agreement, provides, inter alia, in its paragraph 1, that interested parties are entitled to be informed of the details underlying the essential facts and considerations on the basis of which provisional measures are imposed (judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraphs 96, 97 and 99).

114    In the first place, the applicant complains that the Commission refused to take into consideration, at least from the stage of the verification visit, all the arguments and additional information which it had provided concerning the application of Article 18 of the basic regulation to it, as is apparent in particular from recital 79 of the provisional regulation and recital 37 of the contested regulation. In so doing, the Commission infringed the applicant’s rights of defence.

115    As noted in paragraphs 59 to 64 above, it follows from recitals 76 to 80 of the provisional regulation that, in view of the findings of the on-the-spot verification, the Commission adjusted the cost of production for the applicant. Therefore, on 30 October 2015, the Commission informed the applicant that, for the reasons set out in recital 76 of the provisional regulation, it considered that it had not provided the necessary information concerning the cost of manufacturing of the product concerned within the time limits set out in the basic regulation and that it intended to apply facts available in accordance with Article 18 of the basic regulation for the establishment of the normal value. On 13 November 2015, the applicant submitted further explanations concerning the differences between the expenses recorded in its general ledger and the costs identified in its cost calculation report. The applicant also admitted the existence of the discrepancies found by the Commission during the on-the-spot verification visit concerning the purchase costs of raw materials, but claimed that it could immediately identify the reasons for those discrepancies, which it considered as clerical errors. It is apparent from recital 79 of the provisional regulation that the Commission examined the applicant’s comments and explanations and considered that the accuracy of the additional information submitted could no longer be verified or reconciled with the applicant’s accounts. The Commission further considered that the discrepancies it had found on the spot concerning the costs of purchasing raw materials were not clerical errors and noted that the applicant had not contested its finding that information concerning the costs associated with the purchase of raw materials, stocks of raw materials and consumption of raw materials was missing from its replies to the questionnaire and the deficiency letter. The Commission concluded that the applicant’s comments and further explanations did not contain any new verifiable information which could alter its intention to use, at that stage of the investigation, the facts available for the determination of normal value.

116    Furthermore, it is apparent from recital 80 of the provisional regulation that the Commission also found during the on-the-spot verification that the material consumption ratios reported during the verification differed significantly from those reported by the applicant on 24 September 2015 in its reply to the Commission’s deficiency letter. The applicant clarified that, for the reporting of its material expenses, it had not used the consumption ratios of its control department, but had calculated the consumption ratios by dividing the material expenses reported to the Commission by the cost of goods sold. For that reason, the Commission considered that the reported material consumption ratios did not allow it to make an accurate assessment of its material expenditure. Therefore, as indicated above, the Commission decided to amend the reported cost of production to bring it in line with the evidence on the cost of raw materials that it had collected during the on-the-spot verification.

117    Finally, it is apparent from recital 37 of the contested regulation that the applicant was given the opportunity to express its views and explain its objections following the disclosure of the provisional findings, in particular, as noted in paragraphs 13 and 15 above, at its hearing on 25 April 2016 and in its letters of 8 March and 9 June 2016. According to the statements in recital 37 of the contested regulation, the applicant did not put forward any argument which could have led the Commission to change its mind in view of the fact that the material consumption ratios it had reported in its reply to the questionnaire did not allow the Commission to assess accurately the cost of the materials used by the applicant for the production of the products concerned. Therefore, the Commission considered that the findings made at the provisional stage, which led it to apply Article 18 of the basic regulation and which are set out in recitals 76 to 80 of the provisional regulation, were confirmed.

118    In that regard, it should be recalled that, as the Commission rightly pointed out, the adversarial phase of the administrative procedure following the adoption of the provisional regulation allows the applicant precisely to have the assessment of the available data collected by the Commission examined and to submit new factual elements, provided that they are supported by verified evidence or linked to data already submitted. However, that phase of the proceeding cannot be misused by interested parties to present completely new data that should have been submitted within the time limits previously set by the Commission, but were not so submitted (see also, to that effect, the WTO Panel Report in Case WT/DS 312/R, entitled ‘Korea – Anti-Dumping Duties on Imports of Certain Paper from Indonesia’, of 28 October 2005, paragraph 7.85).

119    Having regard, in particular, to the considerations set out in paragraphs 115 to 118 above and paragraphs 121 and 122 below, the complaint that the Commission rejected without explanation, did not examine or largely disregarded numerous information and explanations provided by the applicant, during or following the verification visit, relating to the data previously communicated or clarifying those data is lacking in fact and, moreover, is unsubstantiated or inadequately substantiated, so that that complaint must be rejected.

120    In the second place, the applicant is wrong to criticise the Commission in that context for refusing, contrary to its rights of defence, to carry out a second on-the-spot inspection.

121    According to Article 16(1) of the basic regulation, ‘the Commission shall, where it considers it appropriate, carry out visits to examine the records of importers, exporters, traders, agents, producers, trade associations and organisations and to verify information provided on dumping and injury. In the absence of a proper and timely reply, the Commission may choose not to carry out a verification visit’. Similarly, Article 6.7 of the Anti-Dumping Agreement provides that, ‘in order to verify information provided or to obtain further details, the authorities may carry out investigations in the territory of other Members as required, provided they obtain the agreement of the firms concerned and notify the representatives of the government of the Member in question, and unless that Member objects to the investigation’.

122    It follows from those provisions that verification visits are within the discretion of the investigating authority (see also, inter alia, the WTO Panel Report in Case WT/DS 211/R, ‘Egypt – Steel Rebar’, of 8 August 2002, paragraphs 7.349 and 7.350), especially in the case of a second verification visit (see also, to that effect, judgment of 4 March 2010, Sun Sang Kong Yuen Shoes Factory v Council, T‑409/06, EU:T:2010:69, paragraph 107). As noted, inter alia, in paragraphs 46 to 48 above, interested parties are required to submit accurate and complete replies to the anti-dumping questionnaire, which, as is clear from the examination of the first plea in law, was clearly not the case in this instance. Furthermore, to oblige the investigating authority to organise an on-the-spot visit whenever an interested party decides that it is willing to provide information to the investigating authority would create an incentive for interested parties not to comply with their obligation to cooperate fully from the outset of the proceeding, and in particular in the context of the replies to the questionnaire provided for in Article 6(2) of the basic regulation, thus hindering the proper conduct of anti-dumping investigations, with the risk that the Commission may be prevented from carrying out the investigations. Finally, it should be recalled that, as is clear from the wording of Article 16(1) of the Basic Regulation, the purpose of the verification visits, the appropriateness of which is decided by the Commission, is to ‘verify information provided’ concerning dumping and injury and not, as the applicant maintains, to gather new information which should have been submitted within the time limits laid down.

123    In the third place, the applicant’s claim that the organisation of hearings following the adoption of the provisional regulation and the provisional information concerning the application of Article 18 of the basic regulation created only the appearance that the applicant’s right to be heard had been respected, although the Commission had already irreversibly decided that it would apply that article, inasmuch as it is not supported by any concrete evidence, must also be rejected.

124    Consequently the second plea in law is unfounded.

 The third plea in law, alleging infringement of Article 2(3), (4), (9), (10) and (12) of the basic regulation and manifest errors of assessment

125    By its third plea in law, which is divided into two parts, the applicant claims that the Commission failed to establish a proper individual margin of dumping in accordance with Article 2(12) of the basic regulation.

 The first part of the third plea in law

126    By its first part, the applicant claims that the Commission infringed Article 2(3) and (4) of the basic regulation and committed a manifest error of assessment in concluding that the exceptional difference in value (losses indicated in the financial section of the accounts) caused by the depreciation of the Russian national currency during the investigation period and resulting from the revaluation of the applicant’s foreign currency loans should be considered as part of the selling, general and administrative expenses (‘SG&A’) related to the product concerned for the purpose of establishing normal value. Consequently, the Commission did not establish a reasonable amount of the expenses in question and therefore distorted the ‘ordinary course of trade’ test in violation of Article 2(4) of the basic regulation. By failing to make a fair comparison between the normal value, established at an excessive level, and the export price, the Commission also violated Article 2(10) of the basic regulation.

127    The applicant notes in that regard that, as follows from the first plea in law, the Commission established its costs of production at an excessive level, so that that institution had to construct normal value for the vast majority of sales on the basis of Article 2(3) of the basic regulation, using a reasonable amount of SG&A, as described, inter alia, in recital 75 of the provisional regulation, and which included losses related to exchange rate differences arising from the conversion of transactions not denominated in Russian roubles.

128    The applicant claims that the value differences arising from the revaluation of loans denominated in foreign currencies due to the depreciation of the Russian rouble, even if they have the character of losses of an exceptional nature, first, distort the calculation of the costs for the product concerned during the investigation period and, secondly, do not relate to the investigation period in so far as this revaluation does not concern exchange costs incurred during the investigation period, but provisions for future exchange rate differences relating to short and long-term loans.

129    Furthermore, the Commission also committed a manifest error of assessment by rejecting, without challenging it on the merits, the analysis carried out by the audit and accounting firm PricewaterhouseCoopers in its report of 22 June 2016 entitled ‘Presentation of foreign exchange differences arising from revaluation of loans and borrowings in foreign currency in the statement of profit or loss for IFRS and Russian GAAP reporting purposes’ (‘the PwC Report’), in accordance with International Financial Reporting Standards (‘IFRS’) and Generally Accepted Accounting Principles (‘GAAP’) in Russia. According to that analysis, the differences in value resulting from the revaluation of foreign currency loans were not to be considered as cost elements of SG&A related to the product concerned.

130    That analysis is moreover in line with the Commission’s consistent practice of ignoring those exchange rate differences and not including them in the amount of SG&A for the purpose of calculating a constructed normal value. In addition, the financial nature of the differences in value in question is sufficient to rule out their relevance to operating costs such as interest payments on loans. Therefore, the conclusions in recitals 40 to 43 of the contested regulation are incorrect.

131    Finally, the Commission did not explain in sufficient detail in the contested regulation why the factual situation of the practice referred to, as it resulted from Council Regulation (EC) No 2852/2000 of 22 December 2000 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of polyester staple fibres originating in India and the Republic of Korea (OJ 2000 L 332, p. 17), was not relevant.

132    The Commission contests the applicant’s arguments.

133    It follows from recital 75 of the provisional regulation that the Commission, first, found that all exporting producers had incurred significant losses in their financial statements due to exchange rate differences arising from the conversion of transactions not denominated in Russian roubles and, secondly, considered those losses as part of the applicant’s SG&A for inclusion in the normal value calculation.

134    It is further apparent from recital 40 of the contested regulation that, in order to rebut the applicant’s argument that those losses should not be considered as part of SG&A, the Commission referred to both IFRS and Russian GAAP to conclude that the losses in question had been properly recorded in the applicant’s accounts and incurred during the investigation period. In recital 42 of the contested regulation, the Commission explained that in the anti-dumping proceeding which led to Regulation No 2852/2000, the foreign exchange gains, which were not taken into account when calculating SG&A, did not mainly relate to production and sales, as stated in recital 34 of that regulation, before concluding in recital 43 of the contested regulation that the exporting producers in the present proceeding had not called into question the relevance of their loans to the production costs of the product concerned and that, therefore, the losses in question were linked to the loans, which had been used to finance the fixed assets necessary for the production of the product concerned, so that those losses had to be taken into account in the determination of the applicant’s SG&A.

135    By the first part of the third plea in law, the applicant first claims that the Commission infringed Article 2(3) of the basic regulation by considering that the losses relating to value differences arising from the revaluation of loans denominated in foreign currencies caused by the depreciation of the Russian rouble formed part of SG&A for the purpose of calculating normal value.

136    As a preliminary remark, it should be noted that where the Commission finds that the domestic sales of an exporting producer were found not to be profitable, normal value is, in accordance with Article 2(3) of the basic regulation, calculated on the basis of the cost of production in the country of origin ‘plus a reasonable amount for [SG&A]’ and a reasonable margin of profit (see, inter alia, judgment of 3 December 2019, Yieh United Steel v Commission, T‑607/15, under appeal, EU:T:2019:831, paragraph 61).

137    In that context, the applicant accepts, first, that the Commission used the amounts set out in the financial statements provided to it, which reflected the differences in value at issue relating to the revaluation of the foreign currency loans in the light of the depreciation of the Russian rouble and, secondly, that those differences have the character of ‘losses’ of an exceptional nature. By contrast, the applicant contests the conclusion that those differences in value should be regarded as cost items under SG&A, since, first, those differences in value are of a purely financial nature and ‘distort’ the calculation of SG&A, secondly, they do not relate to the investigation period inasmuch as that revaluation does not concern the exchange costs incurred during that period, but provisions for future exchange rate differences relating to short and long-term loans, thirdly, the reference to IFRS and GAAP is not convincing and, fourthly, the Commission itself has in the past considered that exchange rate gains or losses were not taken into account as SG&A.

138    The applicant’s argument cannot be accepted.

139    In that regard, it should be noted that the Commission correctly argued, first, that the losses at issue were reflected in the applicant’s annual accounts which, in accordance with the first subparagraph of Article 2(5) of the basic regulation (now Article 2(5) of Regulation 2016/1036) serve as a basis for calculating the costs associated with the production and sale of the product concerned, provided that the accounting records in question are kept in accordance with the generally accepted accounting principles of the country concerned and reasonably reflect the costs associated with the production and sale of the product concerned, secondly, that the differences in value in question, resulting from the differences in exchange rates, constituted, as the applicant admits, ‘losses of an exceptional nature’ which related to the ‘investigation period’, irrespective of the fact that they were long-term loans, and, thirdly, that those differences in value were directly linked to the loans, which served to finance the fixed assets necessary for the production of the product concerned, so that the Commission was able to take account of those differences in value in determining the reasonable amount of SG&A.

140    As regards the PwC report, it should be noted that the analysis at issue concerned the presentation of the relevant value differences in the profit and loss statement for the purposes of preparing the financial statements in accordance with IFRS and Russian GAAP, which are referred to in recital 40 of the contested regulation. According to this analysis, under IFRS, ‘as a general rule’, SG&A include ‘selling, marketing and distribution costs and general management costs, but they are usually attributable to the production and sale of inventories, namely an operating function, rather than a financing function’. The report concludes that exchange rate differences arising from loans and borrowings are part of the ‘treasury function[,] are financial in nature and should be presented as such, i.e. as financial items in the income statement’. According to the same analysis, under Russian GAAP, such differences cannot be presented ‘as part of the cost of production, cost of sales or [SG&A]’.

141    Without it being necessary to take a position on the Commission’s challenge to the evidential value of the PwC report, which was drawn up following a request from the applicant, and to the late nature of its production, since it was produced only after the Commission’s supplementary definitive disclosure of 20 June 2016, that is to say, more than 13 months after the initiation of the investigation, which explains why that institution did not refer to it in recital 40 of the contested regulation, it is sufficient to note that, in any event, the analysis contained in that report cannot call into question the conclusion that the losses in question may fall within the scope of SG&A within the meaning of Article 2(3) of the basic regulation for the reasons set out in paragraph 139 above.

142    In that regard, it should also be noted that the Court has had occasion to hold that the ‘losses mentioned in the annual accounts’ under the heading ‘losses on transactions and conversions into foreign currencies’ must be included in SG&A if they are related to the applicant’s main activity, in so far as SG&A consist of the costs associated with the sale and the general functioning and operation of the undertaking (judgment of 11 July 2017, Viraj Profiles v Council, T‑67/14, not published, EU:T:2017:481, paragraphs 177 and 180).

143    Finally, as regards the Commission’s alleged practice of ignoring such exchange rate differences and not including them in the amount of SG&A for the purpose of calculating constructed normal value, it should be noted that in recital 34 of Regulation No 2852/2000, the Commission noted that the foreign exchange gains at issue were related ‘mainly to translation gains on the re-statement of long-term foreign currency liabilities, rather than pertaining to production and sales in the ordinary course of trade in the domestic market during the investigation period [at issue]’ and that ‘exchange gains or losses [were] not taken into account in anti-dumping investigations, whether realised or not’. However, even assuming that, contrary to what the Commission alleges, the debts in question were related to the product covered by that anti-dumping proceeding and that that sole example invoked by the applicant reflects a practice of the Commission, which has not been established, such a practice would not, in any event, be capable of calling into question the interpretation of Article 2(3) of the basic regulation, which follows from the foregoing paragraphs. In response to a question from the Court, the Commission confirmed that, if, in the present case, exchange rate differences formed part of the total cost of the loan at the end of each financial year, exchange rate differences consisting of a net gain, where appropriate, would likewise be taken into account, within the limit of the total cost of financing incurred by the producer in question, when calculating that cost at the end of each financial year concerned.

144    In the light of the foregoing considerations, it must be concluded that the applicant has not shown that the Commission erred in including the losses in question resulting from the depreciation of the Russian rouble and recorded in the applicant’s accounting documents among the reasonable amount of SG&A incurred by the applicant within the meaning of Article 2(3) of the basic regulation. Therefore, in so far as the applicant alleges that the infringement of Article 2(4) and (10) of the basic regulation is due to the failure to comply with Article 2(3) of that regulation, the first part of the first plea in law must be rejected in its entirety.

 The second part of the third plea in law

145    By the second part of its third plea in law, the applicant claims that the Commission misinterpreted Article 2(9) of the basic regulation and committed a manifest error of assessment in that it applied a downward adjustment for reasonable SG&A and profit of a hypothetical unrelated importer – to the export price charged by the applicant’s related trader located outside the Union for export sales to customers in the Union made on a ‘duty unpaid’ (DDU) terms. Consequently, the Commission established an artificially low export price, so that its comparison between the excessively constructed normal value and the low export price was not fair, contrary to the provisions of Article 2(10) of the basic regulation.

146    The applicant argues that sales under DDU terms do not involve customs clearance and are not made at a price covering functions normally performed by importers, so that no costs and profits are likely to arise between importation and subsequent resale and no adjustment can be made under Article 2(9) of the basic regulation. On the contrary, such an adjustment would be necessary where the commercial terms of sale require delivery of a product after importation and payment of all customs duties, such as in the case of ‘delivered duty paid’ (DDP), because it would only be in such transactions that the related trader would incur costs between importation and resale and perform functions normally performed by importers.

147    The applicant considers that the Commission did not correctly assess the role and functions of its related trader in Switzerland with regard to sales to customers in the Union which were made under DDU terms and in the context of which the related trader did not act as an importer, but as part of the applicant’s export network. In such export transactions, the related trader would act as an external export department of the exporting producer, as it would make export sales with pre-clearance delivery at the Union border in the same way as an exporting producer acting without a related trader. Furthermore, the fact that the relationship between the applicant and its related trader is a buyer-seller relationship does not affect the finding that the trader acts as the applicant’s export department or that they are both part of the same export network.

148    Finally, the applicant invokes in support of its argument the long-standing practice of the Commission in anti-dumping proceedings involving a related trader located outside the Union and a member of the export network of an exporting producer.

149    The Commission contests the applicant’s arguments.

150    First of all, it should be noted that, according to Article 2(8) of the basic regulation, the export price is the price actually paid or payable for the product when sold for export to the Union. According to the first subparagraph of Article 2(9) of the basic regulation (now the first subparagraph of Article 2(9) of Regulation 2016/1036), in cases where there is no export price or where it is apparent that the export price is unreliable due to the existence of an association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported goods are first resold to an independent buyer or, if the goods are not resold to an independent buyer or are not resold in the condition in which they were imported, on any other reasonable basis.

151    It follows that, where there is an association between the exporter and the importer, the institutions are entitled, in accordance with Article 2(9) of the basic regulation, to construct the export price, subject to the possibility for the undertakings concerned to rebut the presumption that the prices charged between them are unreliable by presenting evidence which demonstrates the reliability of those prices (see, to that effect, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 111). The case-law accepts the existence of such an association where the exporter and importer belong to the same group (see judgment of 17 March 2015, RFA International v Commission, T‑466/12, EU:T:2015:151, paragraph 39 and the case-law cited).

152    According to the second subparagraph of Article 2(9) of the basic regulation (now second subparagraph of Article 2(9) of Regulation 2016/1036), where the export price is constructed on the basis of the price to the first independent buyer or on any other reasonable basis, adjustments are to be made for all costs incurred between importation and resale in order to establish a reliable export price at the EU frontier. The third subparagraph of Article 2(9) of the basic regulation (now third subparagraph of Article 2(9) of Regulation 2016/1036) provides that the costs for which an adjustment is made are to include, inter alia, a reasonable margin for SG&A and profit (see judgment of 17 March 2015, RFA International v Commission, T‑466/12, EU:T:2015:151, paragraph 40 and the case-law cited).

153    In that regard, it should first be added that the adjustments provided for in the second and third subparagraphs of Article 2(9) of the basic regulation are made automatically by the institutions. Furthermore, it must be considered that that provision does not preclude adjustments being made for costs incurred prior to importation, in so far as those costs are normally borne by the importer (see judgment of 17 March 2015, RFA International v Commission, T‑466/12, EU:T:2015:151, paragraph 41 and the case-law cited).

154    Next, although Article 2(9) of the basic regulation provides that an adjustment is to be made for a reasonable margin for SG&A and profits, that provision does not lay down the method for calculating or determining that margin. It merely refers to the reasonableness of the margin subject to the adjustment (see judgment of 17 March 2015, RFA International v Commission, T‑466/12, EU:T:2015:151, paragraph 42 and the case-law cited; judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 131).

155    Furthermore, the determination of reasonable margins for SG&A and profit is not an exception to the application of the case-law cited in paragraph 56 above, according to which the Commission has, in the field of trade defence measures, a broad discretion, so that the EU Courts are required to exercise only a limited review (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 132).

156    Lastly, it should be noted that, where the exporter and importer are associated, it is for the interested party to contest the extent of adjustments made on the basis of Article 2(9) of the basic regulation, that the margins established in respect of SG&A and profit are excessive, to provide concrete evidence and calculations to substantiate its claims and, in particular, the alternative rate it proposes, if any (see judgment of 17 March 2015, RFA International v Commission, T‑466/12, EU:T:2015:151, paragraph 44 and the case-law cited; see also, to that effect, judgment of 4 May 2017, RFA International v Commission, C‑239/15 P, EU:C:2017:337, paragraph 38).

157    In response to the applicant’s argument, formulated in its comments on the Commission’s provisional findings, that the adjustments made for SG&A and profits under Article 2(9) of the basic regulation could not apply in this case to sales made under DDU terms via related traders or importers based in Switzerland, the Commission noted, in recital 64 of the contested regulation, that a downward adjustment for SG&A and a reasonable profit margin should be applied under the second and third subparagraphs of Article 2(9) of the basic regulation ‘for all types of sales transactions’ made via related traders or importers based in Switzerland. Even if the delivery of the goods according to the transaction terms declared by the exporting producers takes place prior to their release for free circulation and even if the responsibility for customs clearance lies with the buyer (contrary to transactions carried out under DDP terms), that does not change the fact that the sales are made by the related trader or importer, who bears SG&A and generally seeks to make a profit from its services (recital 65 of the contested regulation).

158    The Commission concludes therefrom, in recital 66 of the contested regulation, that, in so far as the trader or importer is related to the exporting producer, it follows from Article 2(9) of the basic regulation that the data of that trader or importer is, by definition, unreliable and that its profit must be determined by the investigating authority on a reasonable basis. Furthermore, Article 2(9) of the basic regulation does not exclude the possibility of making adjustments for costs incurred prior to importation, to the extent that such costs are normally incurred by the trader or importer. Following the applicant’s comments on the Commission’s definitive findings, the latter added, in recital 67 of the contested regulation that, in any event, the fact that related companies perform only certain functions does not prevent it from making adjustments under Article 2(9) of the basic regulation, but that could result in a lower amount of SG&A being deducted from the price at which the product concerned is first resold to an independent buyer. The burden of proof lies with the interested parties who intend to contest the extent of adjustments made on the basis of Article 2(9) of the basic regulation. Consequently, if those parties consider that those adjustments are excessive, they have to provide specific evidence and calculations in support of their arguments. The exporting producers did not provide any evidence capable of calling into question SG&A or the profit percentage used.

159    It is in the light of those reminders and clarifications that the merits of the applicant’s argument in support of the second part of the third plea in law must be examined.

160    In that regard, it appears that the applicant agrees that, in the present case, since the trader in question is related to the exporting producer, the export price should have been constructed in accordance with Article 2(9) of the basic regulation, the applicability of which it thus does not dispute. Furthermore, the applicant states in the reply that it does not claim that it forms a single economic unit with the related trader, but considers that they are part of the same export network.

161    By its arguments, the applicant claims, in essence, that the Commission erred in law and committed a manifest error of assessment by applying a downward adjustment for reasonable SG&A and profit pursuant to Article 2(9) of the basic regulation to the export price of sales made via its related trader, even though those transactions were made in the present case under DDU terms. In such a situation, the transaction would not include customs clearance, importation, resale after importation, nor the functions normally performed by importers.

162    However, the Commission was able to note without error in paragraphs 64 to 67 of the contested regulation that, even if, in the case of sales transactions made under DDU terms, the responsibility for customs clearance lies with the buyer, the fact remains that the sales in question are made by the related trader, who incurs SG&A and normally seeks to make a profit on his services. Consequently, a reasonable margin for SG&A and a profit margin for the related trader must, on a case-by-case basis, be deducted from the resale price to the first independent buyer when constructing the export price at EU frontier level, the amount of which takes into account the functions performed by that trader, as noted in recitals 66 and 67 of the contested regulation.

163    Even assuming that the related trader and the applicant could be considered to constitute a single economic entity, the existence of such an entity would not affect the applicability of Article 2(9) of the basic regulation and the adjustments provided for therein, although the existence of such an entity may, where appropriate, have an impact on the manner of application of Article 2(9) of the basic regulation (see, to that effect, judgment of 17 March 2015, RFA International v Commission, T‑466/12, EU:T:2015:151, paragraphs 50 to 56). Similarly, the alleged fact that the related trader is a ‘member of the exporting network’ of the applicant is irrelevant.

164    In so far as the applicant invokes a Commission practice according to which no downward adjustment is to be made for reasonable SG&A and profit in anti-dumping proceedings involving a related trader located outside the Union and ‘a member of the exporting network’ of an exporting producer, such a practice, the existence of which is disputed by the Commission in response to a question put by the Court, in particular in the situation where the related trader is not, in fact, the export department of the producer and where that trader either purchases the product in question from that export department or performs the functions of an importer in the Union, even assuming that it is established, cannot, in any event, call into question the interpretation of Article 2(9) of the basic regulation which follows from the foregoing paragraphs.

165    Consequently, it must be concluded that the Commission was right to note, in recital 67 of the contested regulation, that it had not erred in law in applying Article 2(9) of the basic regulation and that it was for the applicant to submit evidence to show that the level of the adjustments made in the present case was excessive (see, to that effect, inter alia, judgment of 17 March 2015, RFA International v Commission, T‑466/12, EU:T:2015:151, paragraph 44), which it did not do.

166    In so far as the applicant has not shown that the Commission erred in making the contested adjustment for reasonable SG&A and profit to sales made through the related trader, its claim that Article 2(10) and (12) of the basic regulation were infringed, which is based on the premiss of an infringement of Article 2(9) of that regulation, must therefore also be rejected.

167    In the light of the foregoing considerations, the second part of the third plea in law must be rejected and, consequently, the third plea in law in its entirety.

 The fourth plea in law, alleging infringement of Article 3(2) and (5) of the basic regulation, Article 3.1 of the Anti-Dumping Agreement, distortion of the evidence and manifest errors of assessment

168    The fourth plea in law is divided into two parts.

 The first part of the fourth plea in law

169    By the first part of the fourth plea in law, the applicant claims that the Commission failed to carry out an objective examination of the situation of the Union industry, thereby infringing Article 3(2) and (5) of the basic regulation and Article 3.1 of the Anti-Dumping Agreement, and that it committed a manifest error in concluding that material injury had occurred. The Commission did not take into account economic indicators which would have shown a more positive situation of the Union industry or, at least, did not give them the required importance. In support of that claim, the applicant submits that the Commission based its finding of material injury mainly on the decrease in sales volume, the reduction in market share, the negative profitability and the decrease in the level of employment of the Union industry, whereas some of its conclusions are inaccurate and erroneous. First, most of the decrease in free market sales is due to the decline in consumption and the rest of that decrease can be explained by the more development of the market. Next, the decrease in the market share of the Union industry cannot be an indication of material injury either, while at the same time the Commission claims that the market share of imports from other third countries, of around 5.4%, is not capable of breaking the causal link between the alleged injury and the imports from the countries concerned. Furthermore, the negative development of profitability and the inability of the Union industry to recover from the crisis of 2012 are the result of the low consumption of the product concerned. Finally, the decrease in the level of employment during the period considered, aimed at reducing the Union industry’s cost of production, is also not an indication of material injury linked to imports from the countries concerned.

170    The Commission contests the applicant’s arguments.

171    It should be borne in mind, first of all, that, in accordance with Article 3(2) of the basic regulation, the determination of injury must be based on positive evidence and must involve an objective examination of, first, the volume of the dumped imports and the effect of those imports on prices in the Union market for like products and, secondly, the consequent impact of those imports on the Union industry.

172    According to well-established case-law, the determination of injury involves the assessment of complex economic issues. In this exercise, the EU institutions have a wide discretion. The EU Courts must therefore limit their review to verifying compliance with the procedural rules, the material accuracy of the facts used to make the contested choice, the absence of a manifest error in the assessment of those facts and the absence of misuse of powers (see, to that effect, judgments of 10 July 2019, Caviro Distillerie and Others v Commission, C‑345/18 P, not published, EU:C:2019:589, paragraph 15, and of 20 May 2015, Yuanping Changyuan Chemicals v Council, T‑310/12, not published, EU:T:2015:295, paragraphs 127 and 128 and the case-law cited).

173    Furthermore, it is for the applicant to adduce evidence enabling the Court to find that the Commission made a manifest error of assessment when determining injury (see, to that effect, judgment of 20 May 2015, Yuanping Changyuan Chemicals v Council, T‑310/12, not published, EU:T:2015:295, paragraph 129).

174    It should further be noted that the list of factors to be taken into account under Article 3(3) and (5) of the basic regulation (Article 3(3) having become Article 3(3) of Regulation 2016/1036) is not exhaustive and that one or more factors do not necessarily give decisive guidance (see judgment of 15 December 2016, Gul Ahmed Textile Mills v Council, T‑199/04 RENV, not published, EU:T:2016:740, paragraph 138 and the case-law cited; see also, to that effect, judgment of 10 July 2019, Caviro Distillerie and Others v Commission, C‑345/18 P, not published, EU:C:2019:589, paragraphs 20 and 21).

175    Therefore, while the examination by the institutions must lead to the conclusion that the injury caused to the Union industry is material, it is not required that all relevant economic factors and indices show a negative trend (judgment of 25 October 2011, CHEMK and KF v Council, T‑190/08, EU:T:2011:618, paragraph 114) and the mere fact that certain injury factors have improved during the period considered does not mean that the Union industry is not suffering material injury (see, to that effect, judgment of 30 March 2000, Miwon v Council, T‑51/96, EU:T:2000:92, paragraph 105).

176    In the WTO context, the Panel clarified in its report entitled ‘Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland’, adopted on 28 September 2000 (WT/DS 122/R, paragraphs 7.245 to 7.256), that a finding of material injury was not necessarily inconsistent with the fact that some, or even several, of the factors provided for in Article 3.4 of the Anti-Dumping Agreement and which were included in Article 3(5) of the basic regulation, showed a positive trend. However, in such a case, the investigating authority must make a convincing analysis which demonstrates that the positive development of certain factors is outweighed by a negative development of other factors. The investigating authority cannot simply ignore a factor indicating a positive trend, but must explain the lack of relevance or importance of such a factor. The same is true in the context of the examination established by the basic regulation (judgment of 15 December 2016, Gul Ahmed Textile Mills v Council, T‑199/04 RENV, not published, EU:T:2016:740, paragraph 139).

177    It is in the light of those considerations that the applicant’s complaints concerning the alleged manifest errors of assessment made by the Commission in assessing the material injury suffered by the Union industry must be analysed.

178    In the present case, it appears from recitals 94 to 155 of the provisional regulation and recitals 73 to 117 of the contested regulation that the Commission made a detailed examination of the relevant factors listed in Article 3(5) of the basic regulation and that, in the context of an overall assessment of the situation of the Union industry, it concluded that the factors indicated a negative development of the Union industry outweighed the positive ones and that the evidence established the existence of material injury.

179    In recital 152 of the provisional regulation, the Commission concluded that the Union industry as a whole was able to slightly increase its production volumes and improve its capacity utilisation rate due to the significant increase in captive consumption. According to the Commission, concrete measures were also necessary to improve efficiency by reducing labour and production capacity and by controlling manufacturing costs.

180    In recital 153 of the provisional regulation, the Commission concluded that despite those concrete actions taken by the Union industry during the period considered to improve its overall performance, its situation on the free market had significantly deteriorated during the period considered while losses started to accumulate from 2012 onwards. According to the Commission, sales volumes on the Union free market had decreased by 14%, unit sales prices had fallen by 19% and the cost of production had decreased by only 16%. Moreover, the Union industry had lost market share to imports from the countries concerned and had to reduce investments due to a negative return on investment.

181    The Commission concluded in recital 155 of the provisional regulation that the Union industry, analysed in its two segments, namely, the free and captive markets, and as a whole, had suffered material injury with regard to the main injury indicators, such as negative profitability and loss of sales volume and market share.

182    In recital 115 of the contested regulation, the Commission noted that it had not limited its analysis to the free market only and that, where relevant, it had also examined the development of the economic situation of the Union industry as a whole and of the captive market in particular, and had subsequently made its findings in that regard.

183    In recital 116 of the contested regulation, the Commission furthermore stressed that the conclusion that the Union industry had suffered material injury was not based solely on the negative development of micro- and macro-economic indicators in the free market. While some of those indicators indeed showed a negative development in the free market, other indicators covering the overall performance of the Union industry – such as employment, labour costs per full time equivalent, investments and return on investments – also showed a deterioration of the situation of the Union industry. The Commission noted that, given the respective size of the free and captive markets, the positive development of the Union industry’s performance on the captive market (with respect to certain indicators) was not sufficient to compensate for the negative performance on the free market, as evidenced by the negative development of the abovementioned indicators relating to the overall activity.

184    In recital 117 of the contested regulation, the Commission concluded that the findings set out in recitals 152 to 155 of the provisional regulation were confirmed.

185    In the first part of the fourth plea in law, the applicant claims that the Commission’s finding of injury is vitiated in that it is not the result of a balancing of the development, both positive and negative, of the factors considered relevant. In particular, several factors in the injury assessment point to a favourable development of the situation of the Union industry and therefore do not allow a finding of injury. First, while the production volume of the Union industry increased by 1%, the major part of the 14% decrease in the free market sales volume, namely, 9% of that decrease, is due to the decrease in consumption. The rest of the decrease is explained by various factors, including the fall in world raw material prices and the increasing volume of imports from third countries not subject to the investigation. Secondly, it is difficult to understand how the Commission can consider the moderate decrease of the Union industry’s market share (from 74.8% in 2011 to 70.8% during the period considered) to be an indication of material injury and at the same time claim that the 5.4% market share held by imports from India, Iran and Ukraine is not such as to break the causal link between the alleged injury and imports from the countries concerned. Thirdly, the negative development of profitability and the inability of the Union industry to recover from the crisis of 2012 are the result of the low consumption of the product concerned. Fourthly, the decrease in the level of employment by 10% during the period considered, aimed at reducing the Union industry’s costs of production, is also not an indication of material injury linked to imports from the countries concerned, but should be associated with the situation of the Union industry following the global financial crisis of 2012.

186    As the Commission rightly noted, the applicant’s argument does not seek to challenge the factual or numerical findings set out in the provisional regulation and confirmed in the contested regulation. By its argument, the applicant does not question the reality of the statements relating to the injury indicators at issue, namely the 14% decrease in the Union industry’s sales, the 4% decrease in the Union industry’s market share, the loss-making situation of the Union industry with a negative profitability of 2.7% and the decrease in employment of 10% during the period considered, which clearly constitute negative injury factors for the purposes of Article 3(2) and (5) of the basic regulation.

187    In so far as the argument, summarised in paragraph 184 above, in support of the first part of the fourth plea in law, which alleges infringement of Article 3(2) and (5) of the basic regulation, can thus be interpreted as not relating to the actual existence of material injury within the meaning of those provisions, but to the causal link within the meaning of Article 3(6) and (7) of that regulation (Article 3(6) having become Article 3(6) of Regulation 2016/1036), the latter provisions not being the subject of the present plea in law, it must be rejected as inoperative (see, as regards the Anti-Dumping Agreement, the report of the WTO Panel in Case WT/DS 211/R, entitled ‘Egypt – Steel Rebar’, of 8 August 2002, paragraphs 7.62 to 7.65, or the WTO Panel Report in Case WT/DS 483/R, entitled ‘China – Anti-Dumping Measures on Imports of Cellulose Pulp from Canada’, of 25 April 2017, paragraph 7.38).

188    In addition, the applicant has neither demonstrated that the Commission’s assessment of material injury, based on an overall evaluation of the relevant economic factors and indices having a bearing on the state of the Union industry, was manifestly flawed, even assuming that one of the injury factors was flawed, nor has it provided any support for its claim that the majority of the other indicators showed positive trends for the Union industry.

189    In those circumstances, the first part of the fourth plea in law must be rejected.

 The second part of the fourth plea in law

190    As regards the second part of the fourth plea in law, the applicant submits that the Commission adopted a biased approach in favour of its injury findings and distorted the evidence before it by not examining the free and captive markets for the product concerned as a whole and that that separate analysis of those markets contravened the obligation under Article 3(1) and (2) of the basic regulation (Article 3(1) having become Article 3(1) of Regulation 2016/1036) and Article 3.1 of the Anti-Dumping Agreement, requiring an objective assessment. In addition, it argues that the Commission did not analyse the free and captive markets in a similar way, which is also contrary to its obligation of objective assessment, as it essentially and mainly examined the free market and largely ignored the captive market in the European Union, even though it accounted for 82% of total production and showed positive trends. The Commission’s claim in recitals 100 and 101 of the provisional regulation that the examination of the Union industry as a whole was not necessary because it was vertically integrated and imports were not in competition with products destined for captive use as it would not make economic sense for integrated producers to purchase products for downstream production from competitors if they have the necessary capacity to produce the products in question (recital 79 of the contested regulation), is, first, incorrect, because the product concerned from Russia and China was indeed purchased by the Union producers (recitals 104 and 130 of the contested regulation), and, secondly, irrelevant for the purposes of the obligation to examine all parts of the market equally and the Union market as a whole.

191    The Commission contests the applicant’s arguments.

192    In response to the applicant’s complaint that the Commission did not consider it necessary to examine the Union industry as a whole after having examined separately the captive and the free market of the product concerned, it should be noted that it appears from recital 115 of the contested regulation and recital 155 of the provisional regulation, confirmed by recital 117 of the contested regulation, that the Commission carried out an overall analysis covering the whole Union industry, in that it concluded that the Union industry, analysed in its two segments ‘and as a whole’, had suffered material injury in terms of the main injury indicators.

193    First, it follows from recital 100 of the provisional regulation, confirmed by recital 81 of the contested regulation, that the Commission considered that since the Union industry was mostly vertically integrated and the product concerned was considered as a raw material for the production of various value-added downstream products, captive and free market consumption should be analysed separately. According to recital 101 of the provisional regulation, which was also confirmed by recital 81 of the contested regulation, the distinction between the captive and free market is relevant for the injury analysis because products destined for captive use are not exposed to direct competition from imports and transfer prices are defined within groups according to various pricing policies and are therefore not reliable. By contrast, production for the free market is in direct competition with imports of the product concerned and prices are those of the free market.

194    In recital 90 of the contested regulation, the Commission notes that, as explained in recital 123 of the provisional regulation, it analysed separately the data relating to the captive market and the free market as well as the overall performance of the Union industry, where relevant. According to that recital, the majority of the captive market concerns captive transfers within the same legal entity, so that no invoices are issued and therefore no sales prices are established. For the Commission, in the case of captive sales between related entities, it is clear from the different transfer pricing policies applicable among the various producers in the sample that no relevant analysis of price and profitability indicators was possible, but since the volume of captive consumption was nevertheless likely to fluctuate, its evolution was submitted for analysis. According to that recital, as regards the free market, unit cost of production, sales price, sales volume and profitability were analysed, while as regards the overall activity covering the closely related captive and free markets, the following indicators were analysed, inter alia: production volume and capacity, capacity utilisation, employment, productivity, inventories, labour costs, cash flow, investments and return on investments.

195    Therefore, as noted in recital 91 of the contested regulation, the argument that the analysis of the economic situation of the Union industry is based solely on the free market and should have included an analysis of the captive market activities as well as the overall activities must be rejected. All relevant aspects concerning the development of the economic situation in those markets were analysed to the extent possible, whether considered separately or in aggregate, and the applicant has not been able to demonstrate that the Commission committed a manifest error of assessment in its analysis.

196    As follows from paragraph 194 above, where a relevant analysis could not be carried out with regard to certain indicators, such as the sales price or the profitability of the captive market, the Commission gave reasons for that, so that the applicant has not shown that the Commission did not analyse the free and captive markets objectively and, as far as possible, in the same way in order to subsequently integrate its analysis into the overall assessment, in accordance with Article 3(2) of the basic regulation and Article 3.1 of the Anti-Dumping Agreement (see, to that effect, the WTO Appellate Body report entitled ‘United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan’, adopted on 23 August 2001 (WT/DS 184/AB/R), paragraph 204).

197    Finally, it is necessary to respond to the applicant’s argument that the Commission wrongly considered in recitals 100 and 101 of the provisional regulation that the examination of the Union industry ‘as a whole’ was not necessary since the Union industry was vertically integrated and thus imports of the product concerned were not in competition with products for captive use which the Union industry has the capacity to produce itself. In support of its argument, the applicant submits more specifically that the product concerned from Russia and China was indeed purchased by the Union producers, so that the Commission’s argument, set out in recital 79 of the contested regulation, that it would ‘not make economic sense’ for the Union industry to purchase cold-rolled steel semi-finished products from competitors is erroneous. In that regard, it is sufficient to note that the applicant has not demonstrated that the Commission’s response in recitals 191 and 192 of the provisional regulation and confirmed in recital 130 of the contested regulation, that the Union industry’s purchase of the product concerned from, inter alia, Russia and China represented less than 1% of the total sales turnover of the Union industry and was made by companies which operated independently of the producing companies and which were forced to meet a very limited part of their needs from such imports under occasional pressure from customers to obtain the cheapest possible material, was manifestly erroneous.

198    In conclusion, the applicant has not shown that the Commission infringed Article 3(2) of the basic regulation and Article 3.1 of the Anti-Dumping Agreement or committed manifest errors of assessment in the context of the assessment of the existence of injury, nor that it adopted a biased approach in the context of that analysis.

199    For all those reasons, the fourth plea in law must be rejected in its entirety.

 The fifth plea in law, alleging infringement of Article 3(7) of the basic regulation

200    By its fifth plea in law, the applicant claims that the Commission infringed Article 3(7) of the basic regulation by attributing the injury to the Union industry to imports from the countries concerned. That injury is the result of other factors, taken individually and in any event considered collectively, namely, the economic crisis of 2012, the bad business decisions taken by the Union industry, the fall in prices of the product concerned due to the fall in raw material prices, the purchases by the Union industry of imports from the countries concerned, the impact of imports from Iran, India and Ukraine and the existence of a previously applicable international agreement on trade in certain steel products between Russia and the EU. The applicant submits that there were exceptional circumstances in this case, namely, the crisis in the world steel industry, followed by a depression in steel prices accompanied by high energy industry prices, and a very large captive market, requiring the Commission to carry out a collective analysis of those other causal factors.

201    As regards, first, the decrease in demand due to the global economic crisis in 2012, the Commission allegedly wrongly stated in recital 163 of the provisional regulation that the Union producers did not benefit from an alleged recovery between 2012 and 2013 due to Russian or Chinese imports and that that lack of recovery was due to the continued decrease in demand for the product concerned. As regards, secondly, the poor business decisions taken by the Union industry, the Commission wrongly rejected that argument in recital 169 of the provisional regulation and recitals 121 and 122 of the contested regulation, since the timing of costly investments by the Union industry in 2011 and 2012 and the increase in capacity in 2011 were particularly detrimental to the Union industry. As regards, thirdly, the fall in prices of the product concerned due to the fall in raw material prices, the Commission also wrongly dismissed that as a factor of injury in recital 171 of the provisional regulation and in recital 127 of the contested regulation. Fourthly, with regard to the fact that the Union industry itself purchased the product concerned from China and Russia, the Commission also assessed that incompletely and incorrectly for the purposes of the analysis of the causes of injury in recital 192 of the provisional regulation and recital 131 of the contested regulation, even though those imports were not negligible. As regards, fifthly, the imports from India, Iran and Ukraine, their combined market share of 5.4% was sufficiently high to be the main reason for the reduction of the Union industry’s market share by 4%, contrary to what appears from recital 180 of the provisional regulation and recital 141 of the contested regulation, and the Commission wrongly considered that imports from Russia were causing injury while imports of similar volumes, and sometimes at lower prices, from other third countries did not contribute to it. Sixthly, with regard to the previously applicable international agreement on trade in certain steel products between the Union and Russia, which provided for import quotas on a year-by-year basis that were not injurious to the Union industry, the Commission did not take due account of that circumstance when assessing the situation.

202    The Commission contests the applicant’s arguments.

203    First of all, it should be noted that, in accordance with Article 3(6) of the basic regulation, it must be demonstrated from all the relevant evidence submitted in relation to Article 3(2) of that regulation that the dumped imports are causing injury within the meaning of that regulation. That implies a demonstration that the volume or price levels referred to in Article 3(3) of that regulation have an impact on the Union industry within the meaning of Article 3(5) of that regulation and that that impact is such that it can be considered material (see judgment of 10 July 2019, Caviro Distillerie and Others v Commission, C‑345/18 P, not published, EU:C:2019:589, paragraph 22 and the case-law cited).

204    Furthermore, it should be noted that Article 3(7) of the basic regulation provides that known factors other than dumped imports, which are injuring the Union industry at the same time, are to be examined to ensure that injury caused by those other factors is not attributed to dumped imports within the meaning of Article 3(6) of that regulation.

205    Moreover, as noted above, it is settled case-law that the determination of the existence of injury to the Union industry involves the assessment of complex economic situations and that judicial review of such an assessment must therefore be limited to verifying compliance with the procedural rules, the material accuracy of the facts relied upon, the absence of a manifest error of assessment of those facts or the absence of misuse of powers. That is in particular the case as regards the determination of the factors causing injury to the Union industry in the context of an anti-dumping investigation (see judgment of 10 July 2019, Caviro Distillerie and Others v Commission, C‑345/18 P, not published, EU:C:2019:589, paragraph 15 and the case-law cited).

206    In making that determination, the EU institutions are obliged to examine whether the injury which they intend to uphold actually stems from the dumped imports and to rule out any injury arising from other factors, in particular that which is caused by the conduct of the Union producers themselves. To that end, it is for the institutions to verify that the effects of those other factors were not capable of breaking the causal link between the imports concerned and the injury suffered by the Union industry. It is also for them to determine whether injury caused by those other factors is not relevant to the injury determination. However, if the EU institutions find that, despite such factors, the injury caused by those imports is material, the causal link between those imports and the injury suffered by the Union industry may accordingly be established (see, to that effect, judgments of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraphs 23 to 25, and of 16 April 2015, TMK Europe, C‑143/14, EU:C:2015:236, paragraphs 35 to 37).

207    Finally, it is for the parties invoking the illegality of a regulation such as the contested regulation to adduce evidence to show the impact of the factors that may have an effect on the injury caused to the Union industry. Those parties must, in particular, show that those factors could have had such an impact that the existence of injury caused to the Union industry and of the causal link between that injury and the dumped imports was no longer reliable (see, to that effect, judgment of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 28).

208    By the present plea in law, alleging infringement of Article 3(7) of the basic regulation, the applicant does not refer to the Commission’s provisional conclusion, under Article 3(6) of the basic regulation, as set out in recital 159 of the provisional regulation, repeated in recital 202 of that regulation and confirmed in recital 143 of the contested regulation, that in view of the clearly established coincidence in time between, on the one hand, the ever increasing level of dumped imports at continuously decreasing prices and, on the other hand, the Union industry’s loss of sales volume and price depression leading to a loss-making situation, the dumped imports were responsible for the injurious situation of the Union industry.

209    Likewise, the applicant does not contest that, as noted in recital 82 of the contested regulation, the effects of the dumped imports from Russia and China were cumulatively assessed within the meaning of Article 3(4) of the basic regulation (now Article 3(4) of Regulation 2016/1036), for the reasons mentioned in recitals 107 to 111 of the provisional regulation.

210    By contrast, the applicant contests the second step of the examination of the causal link between the injury and the imports from the countries concerned, carried out pursuant to Article 3(7) of the basic regulation, which is the sole subject of the present plea in law.

211    According to the Commission, the findings in the contested regulation regarding the existence of a causal link between the dumped imports from China and Russia and the material injury suffered by the Union industry, including taking into account whether other factors were capable of breaking any link between those imports and that injury, had become definitive since no Chinese exporting producer had brought an action for annulment of the contested regulation and the applicant had not challenged the Commission’s decision to carry out a cumulative assessment of the effects of those imports pursuant to Article 3(4) of the basic regulation. That argument by the Commission must therefore be rejected. Nothing prevents the applicant from demonstrating that the effect of those other factors was such as to break the causal link between the imports from China and Russia, which were assessed cumulatively, and the material injury suffered by the Union industry.

212    It is therefore necessary to examine whether, as the applicant maintains, other factors, taken individually or collectively, were at the root of the material injury suffered by the Union industry and thus broke the causal link between the injury and the imports at issue.

213    As regards, in the first place, the decrease in demand due to the economic crisis, the Commission noted in recital 120 of the contested regulation that, in a context of slow recovery of demand from 2012, namely, by 4.4% between 2012 and the investigation period, the market share of imports from the countries concerned increased from 13.5% in 2012 to 18.7% in 2013 and even to 20.1% in the investigation period. At the same time, as shown in recitals 127 and 129 of the provisional regulation and recital 105 of the contested regulation, the Union market share decreased from 74.8% to 70.8% during the period considered and, in order to avoid an even stronger contraction, the Union industry was forced to lower prices (recital 140 of the provisional regulation). Without committing a manifest error of assessment, the Commission could conclude that the fact that the dumped imports from the countries concerned were not, unlike the Union industry, negatively affected by the slight recovery of consumption from 2012 onwards showed that that factor was not such as to break the causal link between the dumped imports and the material injury caused to the Union industry.

214    Consequently, contrary to the applicant’s submission, the Commission took into account the effect of the decrease in demand on the situation of the Union industry and the applicant failed to demonstrate that that decrease had an impact of such magnitude that the existence of material injury to the Union industry as well as the causal link between that injury and the dumped imports was no longer reliable.

215    It follows from the above that the applicant’s complaint that the Commission committed manifest errors of assessment during the evaluation of the possible impact of the decrease in demand due to the economic crisis on the injury caused to the Union industry must be rejected.

216    As regards, in the second place, the alleged bad business decisions taken by the Union industry in relation to investment and capacity increase, namely, the making of allegedly ‘costly’ investments in 2011 and 2012 as well as the capacity increase in 2011, the Commission noted in recital 122 of the contested regulation that since the purpose of the investigation was to analyse the development of the economic situation of the Union industry during the period from 2011 to the investigation period, the increase in capacity that took place during the years 2010 and 2011 could not be considered as part of the scope of the analysis. Furthermore, the claim that the Union industry had made costly investments in 2011 and 2012 is not supported by any facts and the investments made by the sampled Union producers during the period considered represented less than 2.5% of their net assets and consisted mainly of replacement and rationalisation investments. The Commission concluded in the same recital that, given the level and nature of the investments, they could not be considered significant enough to have an impact on the economic performance of the Union industry.

217    It should be noted that the applicant did not provide any evidence to support its claim that the Union industry made costly investments which caused the material injury suffered by the applicant. Furthermore, that industry did indeed decrease its level of investments by 14% over the whole period considered, as shown in Table 16 of the provisional regulation.

218    Consequently, the applicant failed to demonstrate that the investment and capacity decisions of the Union industry were so important that the existence of material injury to the Union industry and the causal link between that injury and the dumped imports were no longer reliable.

219    It follows from the above that the applicant’s claim that the Commission committed manifest errors of assessment in evaluating the possible impact of the Union industry’s investment and capacity decisions on the injury caused to that industry must be rejected.

220    As regards, in the third place, the impact of the decrease in raw material prices on the Union industry’s prices of the product concerned, the Commission indicated, first, in recital 126 of the contested regulation, that the prices of imports from the countries concerned decreased on average by 20%, whereas the decrease in raw material prices could only lead to a price decrease of around 11%, and, secondly, in recital 127 of the contested regulation, the Commission stated that the decrease in sales prices in the European Union of around 19%, as noted in particular in recitals 140 and 153 of the provisional regulation, was more pronounced than the decrease in raw material prices.

221    The Commission was therefore able to consider without committing a manifest error of assessment that the decrease in sales prices in the Union was at least partly due to the price pressure exerted by the dumped imports from the countries concerned.

222    Consequently, the applicant has failed to demonstrate that the decrease in raw material prices had had such an impact that the existence of material injury to the Union industry and the causal link between that injury and the dumped imports were no longer reliable.

223    It follows from the above that the applicant’s complaint that the Commission committed manifest errors of assessment in evaluating the possible impact of raw material prices on the injury caused to the Union industry must be rejected.

224    As regards, in the fourth place, the imports of the product concerned by the Union industry itself, the Commission indicated, in recital 130 of the contested regulation, that those imports represented less than 1% of the total sales turnover of the Union industry. Given the low volumes involved and the fact that those volumes did not increase during the period considered, while the market share of the dumped imports from the countries concerned amounted to 20.1%, the Commission was able to conclude, without committing a manifest error of assessment, that those purchases were not capable of breaking the causal link between the imports concerned and the material injury caused to the Union industry.

225    In the absence of concrete evidence to support its claim, the applicant has failed to demonstrate that the imports of the product concerned by the Union industry could have been of such a magnitude that the existence of material injury to the Union industry as well as the causal link between such injury and the dumped imports were no longer reliable.

226    It follows from the foregoing that the applicant’s claim that the Commission committed manifest errors of assessment when evaluating the possible impact of the imports made by the Union industry on the injury caused to the Union industry must be rejected.

227    As regards, in the fifth place, the imports of the product concerned from other third countries, it can be seen from Table 27 and recital 177 of the provisional regulation as well as recital 139 of the contested regulation that, during the period considered, the volume of imports from those other third countries decreased by 24% and their market share decreased from 10.9% to 9.1%, while the volume of imports from the countries concerned increased by 28% and the market share of imports from Russia increased from 5.9% to 9.8%. Furthermore, the combined market share of the countries concerned had increased from 14.3% in 2011 to 20.1% in the investigation period. The Commission concluded that imports from Russia and imports from other third countries followed opposite trends.

228    It is without committing a manifest error of assessment that the Commission was able to conclude that imports from other third countries, whose market share had remained relatively stable, were not capable of breaking the causal link between imports from the countries concerned, which were growing rapidly and had a market share of 20.1%, and the injury suffered by the Union industry. That is all the more so since, as the Commission noted in recitals 140 and 141 of the contested regulation, even if it was not disputed that the average prices of imports from Iran and Ukraine were indeed lower than those of the countries concerned, there was no significant change in the pricing behaviour of Iran and Ukraine during the period considered, unlike the prices of the imports concerned, which decreased by 20% during the same period, and that the fact that the market share of imports from those two third countries increased slightly (from 2.9% to 3.4%, and from 4% to 5.4% by including India) was not such as to break the causal link between the imports from the countries concerned and the material injury caused to the Union industry.

229    In view of that change in trends, the applicant has failed to demonstrate that imports from third countries had been so significant that the existence of material injury to the Union industry as well as the causal link between such injury and the dumped imports were no longer reliable.

230    It follows from the foregoing that the applicant’s claim that the Commission committed manifest errors of assessment when evaluating the possible impact of third-country imports on the injury caused to the Union industry must be rejected.

231    As regards, in the sixth and last place, the existence of a previously applicable agreement on trade in certain steel products between Russia and the European Union, it should be noted from the outset that measures which facilitate and promote imports are only indirect causes and cannot be considered as ‘other factors’ within the meaning of Article 3(7) of the basic regulation (see, to that effect, judgment of 14 November 2013, Council v Gul Ahmed Textile Mills, C‑638/11 P, EU:C:2013:732, paragraph 31).

232    In so far as the applicant’s argument can be understood as meaning that, in so far as Russian imports remained within the allegedly ‘non-injurious’ quotas set out in the previously applicable agreement on trade in certain steel products between Russia and the European Union, those imports are exempt from any determination of causation and that that would result in an acknowledgement that imports under the quota provided for would not be injurious, that argument must be rejected.

233    In that regard it is sufficient to note, first, that recital 133 of the contested regulation states that the abovementioned agreement expired on 22 August 2012, namely, before the investigation period, following Russia’s accession to the WTO, secondly, that the agreement did not provide for any exemption from the rules of the basic regulation and referred only to quantitative restrictions without referring to an obligation to respect non-injurious price levels and, thirdly, that it appears from recital 135 of the contested regulation that the material scope of the agreement was different from the definition of the product concerned.

234    Consequently, the applicant has not shown that the Commission committed manifest errors of assessment in evaluating the importance of the various factors examined above and in concluding that they were not sufficient to break the causal link between the imports from the countries concerned and the injury caused to the Union industry and that those factors had not been of such importance that the existence of a material injury to the Union industry as well as the causal link between that injury and the dumped imports were no longer reliable.

235    The applicant’s argument that, in any event, the various factors examined above, taken together, should have been considered sufficient to break the causal link between the imports from the countries concerned and the injury caused to the Union industry cannot be accepted either.

236    In that regard, it should be noted that Article 3(7) of the basic regulation and Article 3.5 of the Anti-Dumping Agreement require that the effects of other causation factors be separated and distinguished from those of the dumped imports in order to ensure that the injury caused by the dumped imports and that caused by the other factors are not lumped together and cannot be distinguished. Those provisions do not, however, prescribe the method by which the investigating authorities must avoid attributing the damage caused by the other causal factors to the dumped imports (judgment of 15 December 2016, Gul Ahmed Textile Mills v Council, T‑199/04 RENV, not published, EU:T:2016:740, paragraph 178).

237    Therefore, those provisions do not contain a general obligation for investigating authorities to examine the effects of other causation factors collectively after having examined them individually. Although, as the WTO Appellate Body has noted, it cannot be entirely excluded that in certain cases, and due to their specific factual circumstances, the investigating authority, by not examining the collective impact of the other causation factors, wrongly attributes the effects of the other causation factors to the dumped imports, Article 3.5 of the Anti-Dumping Agreement must be interpreted as not obliging the investigating authorities to examine the collective impact of the other causation factors when fulfilling their obligation not to attribute the damage caused by the other causation factors to the dumped imports (see, to that effect, judgment of 15 December 2016, Gul Ahmed Textile Mills v Council, T‑199/04 RENV, not published, EU:T:2016:740, paragraph 179).

238    In the present case, it appears from recitals 203 and 204 of the provisional regulation that the Commission took into account the potential combined effect of those factors.

239    Therefore, in recital 203 of the provisional regulation, the Commission stated that it had distinguished between the effects of all known factors on the situation of the Union industry and the injurious effects of the dumped imports and that the other factors identified were provisionally not considered to break the causal link established above, even taking into account their potential combined effect. According to the Commission, the crisis and the decline in consumption as well as the rationalisation of the Union industry may have contributed to the injury to a certain extent, but in the absence of continuous price reductions of the dumped imports, the situation of the Union industry would certainly not have deteriorated to such an extent. In particular, sales prices would not have fallen to such low levels and profitability would have been better. The Commission therefore concluded in recital 204 of the provisional regulation that the material injury suffered by the Union industry was caused by the dumped imports originating in the countries concerned and that no other factors considered ‘individually or collectively’ broke that causal link. Those findings were confirmed in recital 143 of the contested regulation.

240    Therefore, contrary to what the applicant alleges, the Commission took into account the potential combined effect of those factors and the applicant failed to establish that those conclusions were vitiated by manifest errors of assessment.

241    In the light of all the foregoing considerations, the fifth plea must be rejected in its entirety.

 The sixth plea, alleging infringement of Articles 9(4) and 2(9) of the basic regulation and manifest errors of assessment

242    By its sixth plea, divided into two parts, the applicant claims that the Commission committed errors of law and manifest errors of assessment in determining the injury elimination level.

 The first part of the sixth plea in law

243    With regard to the first part of the sixth plea in law, the applicant claims that the Commission infringed Article 9(4) of the basic regulation and committed a manifest error of assessment, in so far as it set, in recitals 152 to 161 of the contested regulation, an unreasonable and excessive profit margin for the Union industry, namely a margin of 9.9%, for the purpose of calculating the target price and the undercutting margin, by wrongly considering that the years following the onset of the financial crisis in 2009 were not representative for the Union industry for the purpose of calculating the target profit margin.

244    The applicant claims that, by choosing 2008 as the reference year, the Commission infringed the temporal limits of the assessment of the situation of the Union industry which it had set itself objectively and impartially, by retroactively extending those limits, the beginning of the ‘period under consideration’ having been set by the Commission at the year 2011. Such an unlimited discretionary power is also contrary to the principle of good administration. Ultimately, the Commission chose a reference year that was too old, in which profits were at a level that the Union industry could no longer reasonably expect to reach.

245    The applicant contests that it follows from the judgment of 28 October 1999, EFMA v Council (T‑210/95, EU:T:1999:273) that the period under consideration could not be used to determine the target profit margin because of, on the one hand, imports from China and Russia throughout the period under consideration and, on the other hand, the ‘economic crisis’ which, in the Commission’s view, is difficult to reconcile with the concept of normal conditions of competition within the meaning of that judgment. First, at least from 1 January 2011 to 1 April 2014, the period not covered by the dumping findings, the Commission had no evidence of dumped imports. Secondly, that judgment should be interpreted in the light of the temporal limits that the Commission set for itself and cannot result in determining a profit margin that the Union industry could not have expected in the absence of dumping.

246    The Commission contests the applicant’s arguments.

247    According to the third sentence of Article 9(4) of the basic regulation (now the second subparagraph of Article 9(4) of Regulation 2016/1036), the amount of the anti-dumping duty must not exceed the dumping margin established and should be less than the dumping margin if such lesser duty is adequate to remove the injury to the Union industry. As noted in recital 166 of the contested regulation, the purpose of the injury margin calculation is thus to determine whether the application of a lower duty rate than the one established on the dumping margin is sufficient to remove that injury.

248    As the Commission noted, in the absence of further clarification, the generally used calculation method, and which is not contested in the present case, is based on the undercutting margin of the ‘target prices’, which takes into account the downward pressure exerted by the dumped imports on the sales prices of the Union industry. That method therefore does not only compare the prices of the dumped imports with the actual sales prices of the Union industry, but replaces the latter with a hypothetical sales price as it would exist in the absence of the dumped imports. That price is calculated by adding a target profit to the Union industry’s cost of production or sales prices, adjusted to the break-even point.

249    In that regard, it has been held that the profit margin to be used for the calculation of the target price that will eliminate the injury should be limited to the profit margin that the Union industry could reasonably expect to obtain under ‘normal conditions of competition, in the absence of the dumped imports’ (judgment of 28 October 1999, EFMA v Council, T‑210/95, EU:T:1999:273, paragraph 60).

250    In the present case, it follows from recitals 238 and 239 of the provisional regulation that the Commission had provisionally calculated a non-injurious price of the product concerned for the Union industry by adding a profit margin of 5%, which is considered to be the level that the Union industry could be expected to obtain in the absence of injurious dumping, to the cost of production of the sampled Union producers in the investigation period.

251    Contrary to what the applicant alleges, the Commission was not bound by the temporal limits of the period considered, from 1 January 2011 to 31 March 2015, for the selection of the most recent representative year for the purpose of establishing the Union industry’s target profit.

252    Since, in accordance with the case-law cited in paragraph 249 above, the profit margin to be used for the calculation of the injury elimination target price must be limited to the profit margin that the Union industry could reasonably expect to obtain under ‘normal conditions of competition, in the absence of the dumped imports’, the Commission, in the framework of its broad discretion, can validly conclude that the most recent representative year is, as the case may be, outside the period considered, without violating the principle of good administration or the basic regulation, which does not provide that the determination of the target profit margin must necessarily be based on the same period as the one used as a reference for the determination of injury and causation pursuant to Article 6(1) of the basic regulation (now Article 6(1) of Regulation 2016/1036) (see, to that effect and by analogy, judgment of 11 September 2014, Gold East Paper and Gold Huasheng Paper v Council, T‑444/11, EU:T:2014:773, paragraphs 308 to 313).

253    In the present case, it is stated in recital 236 of the provisional regulation, confirmed by recital 154 of the contested regulation, that the investigation had established that there were significant volumes of low-priced imports from the countries concerned throughout the period considered which had a negative impact on the profitability of the Union industry and that, as shown in particular in Table 16 of recital 145 of the provisional regulation, that profitability remained negative throughout the period considered, with the exception of the year 2011, an assessment which the applicant has not shown to be manifestly wrong. In the context of its wide discretion, the Commission was able to deduce from that situation, without committing an error of law or a manifest error of assessment, that none of the years of the period considered, including 2011, which was still severely affected by the global economic crisis of 2009, was suitable as a reference for establishing the profit that could reasonably be achieved under normal conditions of competition within the meaning of the case-law cited in paragraph 249 above.

254    In recital 155 of the contested regulation, the Commission explains, furthermore, that it requested the sampled Union producers to provide profitability data for the like product sold on the Union market during the years 2005 to 2010 and that the weighted average profitability for the years 2005 to 2008 that could be calculated on the basis of those data was, for each of those years, between 9 and 15%. According to the Commission, the years 2005 to 2008 were representative for the purpose of establishing the target profit as they were not affected by the economic crisis, which hit the sector hard from 2009 onwards, and were not characterised by exceptionally favourable market conditions. Moreover, the volume of imports from the countries concerned and other countries during those years was indicative of strong competition.

255    It should be noted in that regard that, although the applicant disputes that the concept of economic crisis is difficult to reconcile with the concept of normal conditions of competition within the meaning of the judgment of 28 October 1999, EFMA v Council (T‑210/95, EU:T:1999:273, paragraph 60), it failed to substantiate its claim that the Commission had committed a manifest error of assessment in considering in the present case that the economic crisis, described by the applicant itself as an exceptional circumstance, as noted in paragraph 200 above, had hit the sector hard from 2009 onwards and concluded that the years 2009 and 2010 could not be regarded as reflecting normal conditions of competition within the meaning of the abovementioned judgment, unlike the years 2005 to 2008, which were marked by ‘strong competition’ without being characterised by exceptionally favourable market conditions, which was not disputed by the applicant.

256    In view of the above, the Commission concluded in recital 156 of the contested regulation that the profit margin achieved by the Union industry in the most recent representative year, namely 2008, was a more appropriate basis for the establishment of the target profit of the Union industry at 9.9% than the target profit of 5% provisionally used.

257    In the absence of proof by the applicant that the Commission made an error of law or a manifest error of assessment in determining the reference year for the calculation of the target profit, the first part of the sixth plea in law must be rejected.

 The second part of the sixth plea in law

258    By the second part of its sixth plea in law, the applicant claims that the Commission erred in law and committed a manifest error of assessment by applying by analogy, for the purposes of calculating the injury elimination level and the injury margin, the downward adjustment for reasonable SG&A and profit of an unrelated importer, provided for in Article 2(9) of the basic regulation, to the Union frontier cost, insurance, freight (cif) export price for Russia, including for the applicant. The price in free circulation should be established on the basis of the price actually charged by the related importers in the Union to the first independent customer in the Union. The application of that adjustment, provided for in the context of the determination of dumping, to the calculation of the injury margin is not justified, as the specific circumstances set out in Article 2(9) of the basic regulation in which that adjustment is to be applied to the free market price does not include the comparison for the purpose of calculating the injury margin. The contested adjustment leads to the establishment of an artificial margin and an adjusted export price which is not real and is not appropriate for the purpose of establishing the injury elimination level. Furthermore, that adjustment is unreasonable in that the determination of the export price, in order to be reasonable, should only take into account the actual cif Union frontier price of the allegedly dumped imports on the free market upon entry into the Union market in order to reflect the direct price competition between those imports and the like product of the Union industry. Finally, contrary to what is stated in recital 167 of the contested regulation, the principle of equal treatment could not justify that adjustment either, as exporting producers selling via related trader-importers and those who sell to independent importers are in different individual circumstances.

259    The Commission contests the applicant’s arguments.

260    It should be noted at the outset that, for the purpose of determining the existence of ‘dumping’, Article 2(8) of the basic regulation (now Article 2(8) of Regulation 2016/1036) states that the export price is the price actually paid or payable for the product when sold for export to the Union, whereas Article 2(9) of that regulation states that where, as in the present case, the exporting producer sells the product concerned to the Union via related companies, such sales are made at unreliable transfer prices and therefore a reliable export price has to be constructed in accordance with that provision.

261    It should, moreover, be noted that, in recital 166 of the contested regulation, the Commission explains that the assessment of the ‘injury’ margin caused by imports should be based on the Union frontier export price, which is considered to be at a level comparable to the Union industry’s ex-works price, and that, in the case of export sales via related importers, the export price, by analogy with the approach taken for the calculation of the ‘dumping’ margin, is constructed on the basis of the resale price to the first independent customer, duly adjusted, in accordance with Article 2(9) of the basic regulation. In the Commission’s view, since the export price is an indispensable element for the calculation of the injury margin and since that article is the only provision of the basic regulation which provides guidance on the construction of the export price, the application of that article by analogy is justified in the present case.

262    Therefore, according to recital 240 of the provisional regulation, the Commission, in the present case, ‘determined the injury elimination level on the basis of a comparison of the weighted average import price of the cooperating exporting producers in the countries concerned, duly adjusted for importation costs and customs duties, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value’.

263    Consequently, the Commission adjusted the export price for the applicant downwards by applying an adjustment for SG&A and the reasonable profit of an unrelated importer for the purpose of calculating the injury elimination level. As can be seen from Table 4 of the contested regulation, that resulted in a definitive anti-dumping duty rate for the applicant of 34%, corresponding to the definitive injury margin, whereas the definitive dumping margin was 35.9%.

264    In the first place, contrary to what the applicant alleges, the application by analogy of Article 2(9) of the basic regulation in the present case is not vitiated by error.

265    It should be recalled that the calculation of the price undercutting of the imports at issue is carried out, in accordance with Article 3(2) and (3) of the basic regulation, for the purpose of determining whether the Union industry has suffered injury as a result of those imports and is used, more broadly, for the purpose of assessing that injury and determining the injury margin, namely, the injury elimination level of that injury (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 176). However, the basic regulation does not contain a definition of the concept of price undercutting and does not provide for a methodology for its calculation (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 175), nor does it provide, as noted in paragraph 248 above, specific rules for calculating the export price for the purpose of calculating the injury margin within the meaning of the third sentence of Article 9(4) of the basic regulation, according to which the amount of the provisional or definitive duty should be less than the dumping margin established if such lesser duty would be sufficient to ‘remove the injury’ caused to the Union industry.

266    In those circumstances, the Commission rightly noted that Article 2(9) of the basic regulation was the only provision of the basic regulation which provided guidance for the calculation of a reliable export price where export sales were made via related importers. As the Commission also rightly observed, that provision reflects the principle of unreliability of transfer prices, which is likely to be applied both to the determination of the injury margin and to the calculation of the dumping margin, whereas it is common ground in the present case that the sales in question were made via related importers at unreliable transfer prices.

267    Consequently, the Commission could consider, within its wide discretion, that for the purpose of calculating the undercutting margin, a reliable export price had to be determined in the present case by applying Article 2(9) of the basic regulation by analogy where sales were made via related importers.

268    In the second place, since the Commission used ‘ex-works’ sales prices for the like product of the Union industry, the requirement to compare prices at the same level of trade required it to compare them also, in respect of the applicant’s product at issue, with the prices of sales to first independent buyers, duly adjusted to arrive at the cif Union frontier price (see, to that effect, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraphs 183, 188 and 189). In order to ensure the fairness of that comparison, prices must be compared at the same level of trade, as a comparison between prices obtained at different levels of trade, namely without including all costs related to the level of trade to be taken into account, will necessarily lead to artificial results which do not allow for a proper assessment of the injury caused to the Union industry. Such a fair comparison is a condition for the legality of the injury calculation for that industry (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑301/16, EU:T:2019:234, paragraph 176).

269    In those circumstances, as noted in recital 166 of the contested regulation, it is justified to base, in the present case, the assessment of the sufficiency of a lower duty rate, for the purpose of removing injury caused by imports, on the ‘Union frontier’ export price, which is considered to be of a comparable level to the ‘ex-works’ Union price, namely, as explained by the Commission at the hearing, the indicative sales price of the Union industry to the first independent customer minus the various ex-factory costs, such as transport or insurance costs, to arrive at the level of the ex-factory price of the product concerned.

270    It should be noted, as the Commission does, that the use in the present case of the ‘Union frontier’ level of trade, rather than that of resale to the first independent buyer, as the reference point for the injury margin calculation can be justified both under Article 1(1) of the basic regulation (now Article 1(1) of Regulation 2016/1036), which allows any dumped product to be subject to an anti-dumping duty if its ‘release for free circulation in the Union’, and not its subsequent resale to the first independent customer in the Union, causes injury, as well as under Article 3(3) of that regulation, according to which significant price undercutting refers to dumped ‘imports’.

271    In the third place, the applicant’s argument that the calculation method advocated by the Commission contravenes the principle of equal treatment by distinguishing whether the exporting producer sells, as it does, to related traders or to unrelated importers, as is the case with other sampled exporting producers for which the method used was based on an export price at cif Union frontier level, must also be rejected. The purpose of Article 9(4) of the basic regulation is to assess whether a lower level of duty than the one resulting from the dumping margin is sufficient to remove the injury caused to the Union industry. As noted in recital 167 of the contested regulation, for that industry, the establishment of the relevant import price for the purpose of calculating price undercutting and target prices should not be influenced by whether exports are destined for related or unrelated operators in the Union, and the calculation method chosen ensures precisely equal treatment in both cases, as the method used for other exporting producers, who sell to unrelated importers, is based on a cif export price which excludes SG&A and profits on resale in the Union after customs clearance.

272    Consequently, the applicant has not shown that the Commission committed an error of law or a manifest error of assessment in applying, in the circumstances of the present case, by analogy, Article 2(9) of the basic regulation for the purposes of calculating the injury margin applicable to it. The second part of the sixth plea in law must, therefore, be rejected, as must the two parts of the sixth plea in law.

273    In the light of all the foregoing, the action must be dismissed in its entirety.

 Costs

274    Under Article 134(1) of the Rules of Procedure, 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, in accordance with the latter’s submissions. Since Eurofer has not applied for costs, it must bear its own costs.

On those grounds,

THE GENERAL COURT (Tenth Chamber)

hereby:

1.      Dismisses the action;

2.      Orders PAO Severstal to bear, in addition to its own costs, those incurred by the European Commission;

3.      Orders Eurofer, European Steel Association, ASBL, to bear its own costs.

Buttigieg

Kowalik-Bańczyk

Hesse

Delivered in open court in Luxembourg on 22 September 2021.

[Signatures]


*      Language of the case: English.


1      Confidential data omitted.

© European Union
The source of this judgment is the Europa web site. The information on this site is subject to a information found here: Important legal notice. This electronic version is not authentic and is subject to amendment.


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