Judgment of the Court 23 May 1985

In Case 53/83

THE COURT composed of: Lord Mackenzie Stuart, President, G. Bosco and O. Due (Presidents of Chambers), U. Everling, K. Bahlmann, Y. Galmot and R. Joliet, Judges, Advocate General: P. VerLoren van Themaat Registrar: D. Louterman, Administrator

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure and the conclusions, submissions and arguments of the parties may be summarized as follows:

I — Summary of the facts

By Regulation No 3017/79 of 20 December 1979 (Official Journal L 339, p. 1) the Council established common rules for protection against dumped or subsidized imports from countries not members of the European Economic Community. In particular the regulation lays down rules for ascertaining whether dumping has taken place (Article 2), rules on the initiation of a proceeding and subsequent investigation (Article 7), rules regarding undertakings (Article 10), in particular (in paragraph (6)) the measures to be taken where an undertaking is withdrawn and (in Article 14) the circumstances in which the measures taken may be reviewed and how the review is to be conducted.

Having received a complaint from the Comité Marché Commun de l'Industrie des Engrais Azotés et Phosphatés (CMCEngrais) on behalf of the Community fertilizer industry referring to dumping practices concerning imports of certain chemical fertilizer originating in the United States of America, the Commission announced, in a notice of 26 February 1980 (Official Journal C 47, p. 2), the initiation of a proceeding in accordance with Article 7 of Council Regulation No 3017/79 to investigate imports of urea ammonium nitrate solution fertilizer, classified under subheading ex 31.02 C of the Common Customs Tariff, originating in the United States of America.

By Regulation No 2182/80 of 14 August 1980 (Official Journal L 212, p. 43) the Commission imposed a provisional antidumping duty, and its validity was extended by Regulation No 3144/80 of 4 December 1980 (Official Journal L 330, p. 1). By Regulation No 349/81 of 9 February 1981 (Official Journal L 39, p. 4) the Council then imposed a definitive antidumping duty of 6.5% on the products in question. By Decision No 81/35/EEC of 19 February 1981 (Official Journal L 39, p. 35) the Commission accepted the undertakings given by the American exporters Allied and Kaiser, producers, and Transcontinental, a broker, to increase their prices to a level sufficient to eliminate the dumping margins without exceeding them. Article 2 of Regulation No 349/81 therefore exempts the exports of those three companies from the ariti-dumping duty. The undertakings provide for the regular adjustment of the prices according to an index of the general rate of inflation in the United States.

In reliance on certain decisions of the French Minister for Economic Affairs and Finance imposing penalties on a number of French producers for practices restricting competition (Bulletin Officiel de la Concurrence et de la Consommation — Bulletin Officiel des Services des Prix de la République Française [Official Gazette on Competition and Consumption — Official Gazette of the Prices Department of the French Republic] No 23 of 12 December 1981), Demufert, an importer, whose registered office is in Brussels, the European Fertilizer Import Association (EFIA) and subsequently Allied requested the Commission in February and March 1982 to review Regulation No 349/81 and its decision to accept the undertakings.

After the requests of Demufert and the EFIA had been rejected, Allied and Transcontinental revoked their undertakings on 7 June and 2 July 1982 respectively.

On 16 July 1982 the Commission announced the reopening of the proceeding in accordance with Articles 7, 10 (6) and 14 of Regulation No 3017/79. The notice refers to the requests for review submitted by the Community industry, which alleged that dumping was again being practised, and by Demufert and Allied.

By Regulation No 1976/82 of 19 July 1982 (Official Journal L 214, p. 7) the Commission imposed a provisional antidumping duty of 6.5% on products exported by Allied and Transcontinental.

After Kaiser revoked its undertakings on 23 July 1982, the Commission adopted Regulation No 2302/82 (Official Journal L 246, p. 5) amending Regulation No 1976/82 and imposing a provisional duty of 5% on Kaiser's products.

Regulation No 1976/82, as amended by Regulation No 2302/82, was extended for two months by Council Regulation No 3044/82 of 15 November 1982 (Official Journal L 322, p. 4).

Actions for the annulment of Regulations Nos 1976/82 and 2302/82 were brought on 22 September 1982 by Allied, Demufert and Transcontinental VCase 239/82) and on 15 October 1982 by Kaiser (Case 275/82).

By Regulation No 101/83 of 17 January 1983 (Official Journal L 15, p. 1 and L 82, p. 27) the Council imposed a definitive antidumping duty of 19.5% on Allied's exports, a duty of 12.13% on those of Kaiser and a duty of 12.01% on those of Transcontinental. The amounts deposited as security for the provisional duty in accordance with Regulation No 1976/82 were definitively collected at a rate of 6.5% for Allied and Transcontinental and at a rate of 5% for Kaiser.

By judgment of 21 February 1984 (in Joined Cases 239 and 275/82, [1984] ECR 1005) the Court dismissed as inadmissible in Demufert's case and as unfounded in the case of Allied, Transcontinental and Kaiser the actions brought for the annulment of the provisional duties.

The investigation was continued with regard to the other exporters and in particular with regard to Agrico, on whose products a provisional duty of 4.14% was imposed by Commission Regulation No 290/83 of 2 February 1983 (Official Journal L 33, p. 9); however, upon that company's undertaking to increase the prices of its exports to the Community, the proceeding was terminated by Council Regulation No 2193/83 of 29 July 1983 (Official Journal L 211, p. 1).

II — Written procedure and conclusions of the parties

On 31 March 1983 Allied, Demufert, Transcontinental and Kaiser lodged a joint application for the annulment of Regulation No 101/83.

By judgment of 15 June 1983, the Tribunal de commerce [Commercial Court], Brussels, declared Demufert insolvent and appointed Michel Leyy-Morelle, Avocat at the Brussels Bar, as liquidator. After declaring in a document lodged at the Court Registry on 29 September 1983 that he was resuming the proceedings originally instituted by the insolvent undertaking, the liquidator informed the Court by a document lodged at the Court Registry on 17 September 1984 that he was withdrawing from the proceedings.

By order of 21 September 1983 the Court granted the Commission of the European Communities leave to intervene in support of the submissions of the Council, the defendant.

The applicants, Allied, Transcontinental and Kaiser, claim that the Court should:

1) Declare the application admissible and well-founded;

2) Consequently, declare void Council Regulation No 101/83 of 17 January 1983 imposing a definitive antidumping duty on chemical fertilizer originating in the United States of America;

3) Order the defendant to pay the costs.

The Council, the defendant, contends that the Court should:

1) Dismiss the application as unfounded;

2) Order the applicants to pay the costs.

The Commission, the intervener, submits that the Court should:

1) Dismiss the application as unfounded;

2) Order the applicants to pay the costs of its intervention.

The written procedure followed the normal course.

After hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.

However, the Court invited the parties to reply in writing to a number of questions, which they did within the time allowed.

III — Submissions and arguments of the parties

A. Admissibility

Without raising a formal objection the Council expresses doubts as to the admissibility of the action. The sole effect of the contested regulation is to re-impose on the applicants the general scheme established by Regulation No.349/81. The preliminary investigation is simply a procedure in the adoption of the regulation and does not identify the exporters individually to a sufficient extent, unless the finding that dumping has taken place is viewed as the basis for the imposition of a penalty on the undertakings concerned. Neither the fact that they are referred to in the regulation nor the fact that a specific rate is applied to them entitles the applicants to assert that they are directly and individually concerned. Bringing an action directly before the Court of Justice has certain advantages from the point of view of legal protection but it would have the unusual result of making available a second means of redress parallel to the proceedings which may be instituted before the national court. The Court has never accepted that a measure may have the dual character of a decision with regard to the undertakings expressly referred to and of a regulation with regard to the other persons concerned. In that respect the Council repeats the arguments put forward by the Commission and drawn up jointly by the two institutions (judgment of 21 February 1984 in Joined Cases 239 and 275/82 [1984] ECR 1005, Facts and Issues at p. 1014, ‘Admissibility of the other applications').

According to the applicants, their action is directed against a specific measure, separable from and independent of the parent regulation, which, although adopted in the form of a regulation, concerns them directly, individually and exclusively, both as regards the operative event, namely the alleged dumping practices and the withdrawal of the undertakings, and the measure enacted, namely, the imposition of a specific duty higher than the general rate. The imposition of a duty which was at first provisional and then definitive cannot be regarded as the automatic consequence of revoking the undertakings given. Furthermore, the provision to which the measure may possibly be linked is not Article 1 of the parent regulation but Article 2, exempting certain named companies and therefore having the character of a decision. An exporter identified in that manner cannot be denied a right of action on the ground that an importer subject to the general duty has no such means of redress.

B. Substance

In support of their application the applicants make six submissions alleging breach of the EEC Treaty, in particular Articles 113 and 190, breach of Regulation No 3017/79, in particular Articles 2, 7, 10 and 14, failure to observe essential procedural requirements and breach of general principles and rules of law. The Council and the Commission consider all those submissions to be unfounded.

First submission

The applicants complain that they were not informed, in accordance with Article 7 (4) (b) of Regulation No 3017/79, of the main facts and considerations on the basis of which it was intended to recommend to the Council the imposition of definitive duties or the definitive collection of amounts secured by means of a provisional duty.

The Commission merely indicated that the normal value was equal to the indexed undertaking price, without giving any reasons to justify the choice of that criterion rather than those laid down in Article 2 B of Regulation No 3017/79. It gave no details of the exports allegedly carried out by Kaiser in breach of its undertakings. No data was given on the existence of injury or the jeopardizing of Community interests. The latter question is not entirely beyond judicial review.

The requirement of a request for information, laid down in Article 7 (4) (b) and (c), does not apply where the Commission knows the persons concerned and does not free the Commission from its obligation to observe the rights of the defence, recognized by the Court. Even if the information comes mainly from the exporter, he must be allowed to question the Commission's interpretation of it.

According to the Council, two of the three applicants failed to request information from the Commission as required by Article 7. Allied was informed of the essential factors taken into account and in particular of the method of determining the normal value, as indeed were the other applicants; the Commission is not required to state its reasons for the choice of that method rather than another. It explained that it had not altered its views with regard to the existence of injury. The information requested cannot relate to the question of the interests of the Community; that question involves a very wide discretion on the part of the competent institutions and is hardly capable of being subject to judicial review. The provision of information is nothing more than a stage in the administrative proceeding and must not be confused with the stating of grounds on which a regulation is based; the information supplied concerns the basis on which it is intended to recommend definitive measures and is meant to inform the persons concerned of the Commission's preliminary conclusions in order to enable them to make additional observations. Allied did not provide further information to the Commission, and Kaiser did not dispute the exports in question.

Since Community authorities have no power when conducting an investigation to require the production of information, the principles of the rights of the defence applicable in competition matters cannot be transposed as such to the field of antidumping law.

The Commission refers to the background of Article 7 (4), which was inserted in order to safeguard the rights of the defence in antidumping proceedings. Having regard to the particular requirements of those protective measures, information can only be provided in reply to a request, the submission of which is subject to precise rules and time-limits.

A special statement of reasons on the question of the interests of the Community is essentially required where it is decided not to apply an appropriate duty in spite of the existence of dumping and of injury and is intended to safeguard the complainant's rights of defence.

Second submission

The applicants complain that the Council adopted the contested regulation while the reinvestigation into the other exports originating in the United States was still in progress.

The notice of review, which referred to requests made by Demufert and Allied and by the Community producers and to Allied's revocation of its undertaking, announced the reopening of the investigation in accordance with Articles 7, 10 (6) and 14 of Regulation No 3017/79 but did not specify whether one or several proceedings were involved. Article 7 does not however, permit the opening of separate investigations which may subsequently prove to be incompatible, to the detriment of one group of exporters.

The expediency of establishing a definitive duty before the six-month period of validity of the provisional duties has expired, in order to avoid having to repay amounts lodged as security does not justify a summary investigation.

The imposition of definitive duties, fixed in an entirely arbitrary fashion, before the review of the general scheme was over amounted to discriminatory treatment of the applicants. During the investigation in 1982 the normal value of only the applicants' products was established on the basis of information obtained in 1980. Since they had previously been exempted, the applicants should have been subjected, upon the expiry of the validity of the provisional duties and pending a general review, to the general rules of Regulation No 349/81 and not to special rules applying only to them.

The Council states that in view of the period of validity of the provisional duties and the fact that dumping was still going on it was advisable to adopt the contested regulation without waiting until the general reinvestigation had been completed.

Articles 7 and 14 of Regulation No 3017/79 do not prohibit separate proceedings, particularly where they are carried out on the basis of different sets of rules. Where a proceeding is reopened in accordance with Articles 7, 10 (6) and 14, it is permissible for different measures to be adopted at different times so long as it is established, with regard to the exporters in question, that dumping has taken place and that injury has been caused and so long as the general rules continue to apply to the other exporters throughout the reinvestigation.

Once the validity of provisional duties has expired, Regulation No 3017/79 and the GATT Anti-Dumping Code provide only for the adoption of a definitive measure or the termination of the proceeding without the imposition of duties. In the interest of protecting the Community, industry imports bearing an antidumping duty lower than the dumping finally established cannot be permitted.

The Commission points out that there were two reinvestigations, one based on Articles 14 and 7 and the other on Article 10 (6), connected only by the fact that the revocation of the undertakings coincided with the request for a review.

Since the Commission had completed its investigation on the question of injury and, in view of the lack of cooperation from Allied and Kaiser, had determined the dumping margin by using a method which was adapted but correct, there was no reason to prolong the investigation. The information obtained from the reinvestigation based on Article 14 regarding other producers, in particular Agrico, could have no direct relevance to the proceeding concerning the applicants.

If, as a definitive measure, the Commission had subjected the applicants to the general rules, it would have treated them as an average producer, despite the differences between the dumping margins found in Regulation No 349/81. Although it must respect the procedural rights of the parties, the Commission cannot place undertakings which have acted in breach of or revoked their undertakings in a position identical to or more favourable than that of producers which have observed their undertakings.

Third submission

The applicants complain that the Commission did not recommence the investigation ab initio and that it considers the imposition of antidumping duties an automatic consequence of or even a penalty for the revocation of the undertakings.

The use of the results of the investigation which led to the adoption of Regulation No 349/81 and its premature termination suggests that the investigation was partial and supplementary, a description which was in fact used in the preamble to the contested regulation. The Commission applied its method of calculating the normal value without considering export prices and without discussing the expediency of doing so, although in adopting Regulation No 290/83, concerning another exporter, Agrico, it carried out a thorough examination of the price adjustments to be made.

As far as concerns the interests of the Community, the Commission made no mention of the reactions of German farmers in 1980 nor did it obtain current information from French or German cooperatives. In failing to investigate the existence of that fact by means of an appropriate investigation the Commission infringed the rules of the antidumping procedure.

According to the Council, the investigation must be regarded as part of the resumed proceeding after the revocation of the undertakings and the decision to review the case, which explains why it was referred to as being supplementary.

The regulation adopted is based on the same findings and investigations as Regulation No 290/83, taking into account factors particular to each exporter. It was adopted sooner because of the time-limit constraint which does not mean that only a partial investigation was carried out.

Since the applicants refused to cooperate, the Council and the Commission had to take the information available as a basis. Allied has provided no evidence calling in question the expediency of the calculation method used; the Commission did, moreover, consider whether that method was economically justified.

The Community interest criterion is intended to assist the institutions in deciding whether a measure is economically and politically expedient but is not part of their investigative duties. The protests of the German farmers were made more than two years before the reopening of the proceeding and the persons concerned should have made submissions after the publication of the notice of review. In any case, the regulation mentions the long-term interests of consumers.

The Commission supports the arguments of the Council and points out in particular that the applicants had not indicated that indexation was a major problem for them, causing them to revoke their undertakings, nor asked for them to be renegotiated, which the undertakings expressly allowed them to do.

Having regard to the diversity of the factors to be taken into account in assessing the interests of the Community, the Commission cannot be required to undertake an investigation ex officio.

Fourth submission

The applicants contend that the Council gave insufficient reasons for adopting the method used to determine the normal value, which was based on the indexed prices which the applicants undertook to observe.

The lack of cooperation and the necessity of using available information, as provided for in Article 7 (7) (b), was relied on with regard to Allied, not to Kaiser and Transcontinental. The regulation seeks to show that the published prices are not comparable prices as referred to in Article 2 (3) and does not seek to justify a price calculation on the basis of the available information in accordance with Article 2 (4). That provision could also have been applied in Allied's case. Kaiser's alleged refusal to cooperate is not mentioned in the preamble and has no relevance whatever with regard to this submission, which concerns formal requirements.

The Council, supported by the Commission, states that the application of Article 7 (7) (b) does not preclude that of Article 2 (4). Inasmuch as the prices actually charged on the American market were not available, since the applicants had refused to cooperate in any way, and inasmuch as sales of similar products did not permit any valid comparison because they did not take sufficient account of production costs, the Commission was entitled to calculate the normal value on the basis of the indexed prices agreed to in the undertakings, which were freely entered into.

The regulation indicates the facts and considerations on which the measures adopted were based and even without express references it is possible to determine which provisions were applied. The extent to which reasons are given depends on the nature of the measure and the context in which it is adopted. Since the choice of the method of calculation was determined by the applicants' refusal to cooperate they cannot claim that they do not know the reasons.

Fifth submission

The applicants contend that the Commission and the Council established the normal value on the basis of the entirely fortuitous criterion of the prices agreed to in the revoked undertakings and that they regard the revocation of the undertakings as a reprehensible act which could not lead to the determination of normal values lower than the prices agreed to in the undertakings.

Where an investigation is reopened under Articles 10 (6) and 14 of Regulation No 3017/79 the normal value must be fixed in accordance with the criteria laid down in Article 2 B. Article 2 B (3) refers to the comparable price actually paid or payable in the country of origin or on exportation to a third country or to a constructed value. If there are reasonable grounds to suspect that those prices do not cover production costs (which the Commission failed to explain), Article 2 B (4) allows reference to be made to other sales on the domestic market of the country of origin or to export sales to third countries, to a constructed value or to adjusted prices.

The facts available referred to in Article 7 (7) (b) must relate to the criteria laid down in Article 2. The giving of an undertaking does not amount to an admission of dumping and the price agreed to in an undertaking is not an ‘available fact’.

The adjustment formula bears no relation to actual changes in production costs, which was in fact one of the reasons for the revocation of the undertakings. The reaction of the Community authorities reveals a repressive attitude and renders the possibility of revoking an undertaking meaningless. The Council is wrong to regard the undertaking to raise prices to a level eliminating the dumping margins without exceeding them as an admission that the normal value cannot be exceeded.

Allied raised detailed objections against that calculation method. The wide discretion which the Community authorities enjoy in assessing the available information does not permit them to determine the existence of dumping and injury on the basis of factors bearing no relation to the economics of the product's production.

Kaiser's undertaking price was abnormally higher than that of Transcontinental, a broker. There was also no justification for indexing the undertakings of certain exporters without modifying the rate of duty under the general rules and for calculating the prices in the middle of the season. Because the indexation was applied to a larger volume of exports Allied's normal value became artificially higher in relation to that of Transcontinental and Kaiser. Although Regulation No 1976/82 shows that there was no significant change in the dumping margin, the duties finally imposed on the applicants were substantially increased. Kaiser did not act in breach of its undertaking since the indirect exports were covered by Transcontinental's undertaking.

The Council refers to the different methods laid down in Article 2 for the calculation of the normal value. The domestic market price could not be used since the applicants refused to supply any information. Kaiser, acting in breach of its undertakings, exported its products to the common market through the broker Transcontinental and forbade Transcontinental to divulge the prices. Published information on United States prices was disputed by the traders concerned and did not take sufficient account of production costs. Since the Commission had good reasons for believing that both Allied and Kaiser were selling at a loss, it could not use the domestic prices and export prices, even if they had been known. The actual prices charged on the American market by other producers, in particular Agrico, could not be used since that company's production costs were lower than those of Allied and Kaiser. Information regarding sales to third countries was not available. In the absence of cooperation from the applicants it was impossible to establish a constructed value or to determine prices adjusted to production costs.

The undertaking price, which was an available fact within the meaning of Article 7 (7) (b), was based on the normal value and was linked to the criteria laid down in Article 2; in their undertakings the applicants had agreed to charge prices which eliminated, but did not exceed, the dumping margins. The applicants freely accepted the indexation formula, for which they themselves chose the basis, and have not shown that it has no relation to actual changes in prices. To regard the list of criteria in Article 2 as exhaustive when it proves impossible to apply those criteria would amount to granting immunity to exporters practising dumping since the Community authorities have no coercive powers.

The fact that the price undertakings accepted by Kaiser and Transcontinental were different is due to the difference in their dumping margins. The application of antidumping duties at a fixed rate to prices which increase with inflation is equivalent to the indexing of a nominal price undertaking.

In support of the Council, the Commission argues in particular that ‘available facts’ means information in the possession of the Commission and relevant to the calculation of the normal value. If the persons concerned refuse to cooperate, it is illogical to undertake the difficult calculation of the normal value on the basis of a constructed value. The undertaking price has been found to be a reliable and the most suitable datum for determining the normal value. The complaint that the price undertakings were automatically regarded as reflecting the normal value and that the right to withdraw an undertaking was questioned was entirely unfounded.

It is not impossible that Transcontinental, a broker, sells at prices lower than those of Kaiser, a producer, so that Kaiser's normal value and undertaking price are higher, in spite of a lower dumping margin. Transcontinental informed the Commission that Kaiser had forbidden it to divulge sale prices. The acceptance of an undertaking by a broker does not relieve the producer of his obligation not to export indirectly at dumping prices.

Sixth submission

The applicants argue that none of the conditions required for the imposition of an antidumping duty is properly established in this case.

Neither the normal value nor the export price, the comparison of which determines whether dumping has taken place, were properly established. A notional export price was established for Kaiser on the basis of alleged indirect exports carried out by Transcontinental. In selling to a broker bound by its own undertaking Kaiser did not act in breach of its obligations. Nor is the action of the Community institutions justified by the alleged refusal to cooperate or the assertion that the applicants revoked their undertakings in order to dump exports. In Transcontinental's case, a comparison of the export price with the normal value based on the indexed price agreed to in its undertaking shows that no dumping took place.

It is merely asserted that injury was caused. The reference to the total volume of imports from the United States in 1982 is not significant. During the 1981/82 season those imports decreased by 50% in relation to 1979/80, while imports from the Netherlands increased by 800%. That increase is accounted for by the competitiveness of the Netherlands industry, rather than any alleged sales at a loss. The difference between the Netherlands and American export prices is made up by customs duties and various charges borne by the American exporters. Even if sales at a loss took place, it is not to be ruled out that this was part of a strategy for conquering the market. The Council failed to take into consideration the effects of the price freeze in France, the restrictive practices of the French industry and the antidumping duties imposed in 1980.

The interests of the Community should be interpreted as those of the Community as a whole and not as the particular interest of certain producers. The Community legislature did not examine the interests of consumers; it failed to take into account the interests of importers and of ports, the cost of export refunds and the revenue from import duties. The long-term interests of consumers in the maintenance of the Community industry are a valid consideration in any dumping situation and render the criterion of the interests of the Community utterly meaningless. Furthermore, the fact that exports from the Netherlands increased disproves the argument that the Community industry had been weakened. The discretion enjoyed by the Community legislature cannot entirely remove the criterion of Community interest from judicial review.

The difference between the duties applied to Allied on the one hand and to Transcontinental and Kaiser on the other and the discrimination between different importers who buy products fob from the United States bear no relation to economic reality.

On the question of the dumping requirement, the Council points out that Kaiser indirectly exported fertilizer in breach of its undertakings at a price lower than the normal value, that is to say, the indexed price agreed to in its undertaking. In the absence of other information Kaiser's real export price was determined by subtracting a profit margin of 5% from the price charged by Transcontinental. In Transcontinental's case, dumping may be inferred from the comparison of the export price and the normal value. Since it exported only Kaiser products, that value was determined on the basis of the value fixed for Kaiser, taking into account a profit margin of 5%.

In the Council's view, the injury caused to Community production is established. After falling in 1981/82 following the imposition of antidumping duties, exports from the United States increased substantially in 1982. Kaiser and Transcontinental started dumping substantial quantities before revoking their undertaking and Allied started dumping afterwards. Exports from the Netherlands, which did not increase as much as was asserted, were carried out at a considerable loss. An average difference of 9% was found between Netherlands export prices and American prices, taking into account customs duty at 8%. The restrictive practices found in France related to different products and a different period. The imposition of an antidumping duty is justified even if the injury is not entirely due to the imports in question.

An analysis of the interests of the Community involves a wide discretion in assessing political and economic circumstances and the weighing-up of various factors internal and external to the Community. The interests of consumers and, in particular, their long-term interests were taken into consideration; the interests of the other categories of persons concerned did not conflict with the imposition of the duties. Given such a discretion, the Court must limit its review to determining whether a manifest error or a misuse of power has been committed.

The difference between the situation of Demufert, whose prices were examined only with regard to the requirement of injury, and that of Transcontinental, whose prices were considered in order to determine the dumping margin, explains the difference in the rates applied.

The Commission shares the Council's views on the existence of dumping and injury. The prohibition of indirect exports is intended to prevent an exporter who has entered into an undertaking to observe a high price from exporting his products through another person at the lower price agreed to by that person. The method of calculating the normal value for Kaiser's and Transcontinental's products is justified by their failure to cooperate.

The exercise of the discretion to assess the interests of the Community covers important external aspects and is even less susceptible to judicial review than a discretion exercised where only internal elements are involved. The phrase ‘long-term interests of consumers’ makes it plain that all the interests and risks in question must be considered. The regulation takes into acount the interests of all producers, not only the French producers, whose market share in fact constitutes a major proportion of Community production.

IV — Replies to questions put by the Court

The Council was asked to state whether in view of the Court's judgment of 21 February 1984 in Joined Cases 239 and 275/82 it still maintained its objection of inadmissibility. It replied that it had doubts about the admissibility of the action but had refrained from formally raising an objection of inadmissibility.

The Council and the Commission were asked to explain the scope, variations in and the precise significance of the index referred to in the undertakings given by the applicants as the criterion for determining the updated normal value. They informed the Court that the normal value was brought up to date on the basis of the implicit price deflator of gross national product, which is a general index of inflation used in the United States and published by the Department of Commerce. It is a weighted average of detailed price indexes used in the deflation of the gross national product. In each period, the general inflation index uses as weights the composition of constant dollar output in that period. Changes in the implicit price deflator reflect both changes in prices and changes in the composition of output. It is not related to the applicants' sale prices in the United States. The adjustment of the undertaking prices was carried out on the basis of a formula according to which the base price is multiplied by the index for the quarter ending six months before the review date, divided by the index for the second quarter of 1980. That index went from 175.28 in the second quarter of 1980 to 210.42 in the fourth quarter of 1982 and therefore entailed an increase, as a percentage of the undertaking prices, from 100% in the first quarter of 1980 to 112.1% in the third quarter of 1982.

Asked what significance is attributed, in calculating the updated normal value, to the price of natural gas and price-freezing measures, the applicants stated that the price of natural gas and the effect on it of possible price-freezing measures were to be considered very important, if not decisive, as the Council had in fact admitted. The Community institutions could not have failed to be aware of it and should have examined that aspect, which was not reflected in the variations in the index used.

The applicant Allied had clearly shown that, as far as it was concerned, variations in the purchase price of natural gas unaffected by any price-freezing measures were significantly different from the variations shown by the GNP index.

In reply to the same question the Council and the Commission stated that the calculation of the normal value was not based on production costs, in particular the price of natural gas. The Commission had certain reasons for believing that the price of gas in the United States varied in each State and from producer to producer, depending on their contractual relations with each purchaser. Since it did not have accurate figures, verified for each purchaser, the Commission was unable to take into account changes in the price of gas and their effect on the costs of the companies concerned. It was also unable to verify either domestic prices or the prices of exports to third countries, and the applicants' lack of cooperation made it impossible to establish a reliable constructed value.

For all those reasons the Commission based the normal values on the indices in the undertakings.

Since the applicants disputed that the undertakings they had given were relevant to the establishment of the normal value, they were asked to indicate the criteria which could and should have been used in determining that value. They pointed out that the ‘available facts’ mentioned in Article 7 (7) (b) of Regulation No 3017/79 must concern one of the points of reference listed in Article 2 (3) and (4) of the regulation. Next, a distinction must be drawn between the base price of each undertaking and the indexation formula. The base prices in the undertakings are indisputably ‘available facts’ since they represent the normal value as determined during the investigation which preceded the adoption of Regulation No 349/81; that normal value was established on the basis of the prices charged by the applicants on the domestic market, that is, according to the criterion set out in Article 2 (3) (a) of Regulation No 3017/79. The indexation formula, on the other hand, was not an available fact within the meaning of Article 7 (7) (b). Even if it were — which the applicants deny — the simple application of the GNP index did not in any case enable the Commission and the Council to determine the real prices charged by the applicants on the domestic market or the prices charged by other producers or the prices charged in sales to third countries, or, lastly, the constructed value.

Since they did not attempt to find out the real prices, the Commission and the Council should simply have referred to the base prices contained in the undertakings as representing the normal value, without applying the indexation formula. That course would have come closer to economic reality, since the prices generally charged on the American market fluctuated between the second quarter of 1980 and the third quarter of 1982 without showing any steady upward trend.

At the Court's request, the Council and the Commission provided it with :

i) a note of the hearing held on 14 October 1982;

ii) a table showing the production, intra-Community imports and exports, imports from the United States and imports from the applicants and from other nonmember countries in the case of France, the Federal Republic of Germany, the Netherlands and the EEC between 1979 and 1983;

iii) a table showing the average free-atdestination prices on the French market of French and Netherlands producers and of United States products between 1979 and 1983. The Council and the Commission pointed out that the prices of Community producers were at no time lower than the applicants' import prices.

V — Oral procedure

At the sitting on 2 October 1984 the applicants Allied and Transcontinental, represented by Edmond Lebrun, the applicant Kaiser, represented by Anthony Hooper, the Council, represented by Mr Didier, and the Commission, represented by Daniel Jacob, presented oral argument. With the Court's leave Mr Hooper submitted a table showing the calculations made by the Commission in determining the dumping margin.

The Advocate General delivered his Opinion at the sitting on 21 November 1984.

Decision

1. By application lodged at the Court Registry on 31 March 1983 the applicants brought an action under the second paragraph of Article 173 of the EEC Treaty for a declaration that Council Regulation No 101/83 of 17 January 1983 imposing a definitive antidumping duty on certain chemical fertilizer originating in the United States of America (Official Journal 1983, L 15, p. 1, and L 82, p. 27) is void.

A — Admissibility

2. Although not raising any formal objection, the Council expresses doubts as to the admissibility of the application. Neither the fact that the regulation refers to the applicants and imposes a specific rate of duty on them nor the fact that they were involved in the preliminary investigations allows them to claim that they are individually and directly concerned. Bringing an action directly before the Court has certain advantages from the point of view of legal protection but it would have the unusual result of making available a second means of redress parallel to the proceedings which may be instituted before the national court. The Court has never accepted that a measure may have the dual character of a decision with regard to the undertakings expressly referred to and a regulation with regard to other persons concerned.

3. According to the applicants, their action is directed against a specific measure, separate from and independent of the basic regulation, which, although adopted in the form of a regulation, concerns them directly, individually and exclusively both as regards the operative event, namely the alleged dumping practices and the revocation of the undertakings, and the measure enacted, namely the imposition of a specific duty higher than the general rate. The imposition of a duty, at first provisional and then definitive, cannot be regarded as the automatic consequence of the revocation of the undertakings given. Furthermore, the provision to which the measure may possibly be linked is not Article 1 of the basic regulation but Article 2 exempting certain named companies and therefore having the character of a decision. An exporter identified in that manner cannot be denied a right of action on the ground that an importer subject to the general duty has no such means of redress.

4. In its judgment of 21 February 1984 in Joined Cases 239 and 275/82, Allied Corporation and Others v Commission [1984] ECR 1005) the Court has already held that measures imposing antidumping duties are liable to be of direct and individual concern to those producers and exporters who are able to establish that they were identified in the measures adopted by the Commission or the Council or were concerned by the preliminary investigations.

5. Since the three applicants are expressly referred to in the contested regulation, it follows that their application is admissible.

B — Substance of the case

6. The applicants' main submissions concern the calculation of the normal value of the chemical fertilizer in question and the finding that the Community industry suffered injury.

Calculation of the normal value

7. The applicants complain that the Commission and the Council did not calculate the normal value on one of the bases referred to in Article 2 (3) et seq. of Regulation No 3017/79.

8. Article 2 (3) of Regulation No 3017/79 refers to the comparable price actually paid or payable in the country of origin or on export to a third country, or to a constructed value. Where there are reasonable grounds for suspecting that those prices do not cover production costs, Article 2 (4) permits reference to be made to other sales on the domestic market or to export sales to third countries, to a constructed value or to adjusted prices.

9. Article 7 (7) (b) of the regulation provides that ‘in cases in which any interested party or third country refuses access to, or otherwise does not provide, necessary information within a reasonable period, or significantly impedes the investigation, preliminary or final findings, affirmative or negative, may be made on the basis of the facts available’. In the applicants’ view, the facts available must be used to calculate the normal value according to one of the methods provided for in Article 2.

10. The applicants also challenge the Commission's and Council's use of the prices contained in the revoked undertakings as a criterion for establishing the normal value. They claim that the adjustment formula contained in the undertakings, which referred to a price index published by the federal government of the United States, bears no relation to real increases in production costs, which was in fact one of the reasons for their revocation of the undertakings. The reaction of the Community authorities in taking the undertaking price as the basis for calculating the normal value renders the possibility of revoking the undertaking meaningless in practice, particularly when the reason for the revocation was the fact that the undertaking price was no longer realistic.

11. The Council points out that since the applicants did not cooperate it was impossible to establish the normal value otherwise than on the basis of the revoked undertakings. The undertaking price, which is an available fact within the meaning of Article 7 (7) (b), is based on the normal value and is related to the criteria laid down in Article 2: the undertaking given was to charge a price eliminating the dumping margins without exceeding them. The applicants freely accepted the indexation formula for which they themselves chose the parameter.

12. The Commission contends that the applicant Allied Corporation did not cooperate in its investigation and that it could not use published data on American market prices since the exporters and importers concerned disputed their accuracy and since it had reason to believe that even if those prices accurately reflected the situation on the American market they did not take sufficient account of fixed and variable production costs. On the other hand the Commission did take into account the fact that in 1981 Allied Corporation had given a price undertaking to maintain its export prices in line with the normal value and that the undertaking included an indexation formula providing for the adjustment of export prices every six months. The Commission, taking the period between July 1982 and the end of 1982 as a reference period, calculated the undertaking price for that reference period by applying the indexation formula and used that price to establish the normal value. For the same reasons the Commission also used the undertakings given by the applicants Kaiser and Transcontinental to calculate the normal value.

13. This submission of the applicants must be rejected. If a firm does not cooperate in an antidumping investigation carried out by the Commission and the information available does not enable it to establish the normal value on one of the bases mentioned in Article 2 of Regulation No 3017/79, the Commission is entitled to take as a basis the prices which the firm undertakes to observe, which may be considered to be closest to economic reality, unless the Commission possesses information indicating that those prices no longer correspond to economic reality. In recalculating the normal value it may also use the general price index referred to for adjusting the prices agreed to in the undertaking if there is a reasonable relation between the index and the firm's costs. Even if the applicants are correct in stating that the application of the index in question to the reference period used by the Commission gives results which do not reflect the increases in their costs, the Commission has shown that the alternatives which they proposed produced results even more unfavourable to them. The applicants have not therefore been able to substantiate their complaint.

Injury

14. The applicants also contest the Commission's finding that the Community fertilizer industry suffered injury as a result of dumping by the applicants.

15. They argue in particular that the retail prices of their products on the most important market in the Community, the French market, were higher than those of Netherlands producers and that there could therefore be no question of injury. Imports from the United States during the 1981/1982 season decreased by 50% in relation to 1979/1980 while imports from the Netherlands increased by 800%. The Council failed to take into account the effects of the price freeze in France, the anticompetitive practices of the French industry and the antidumping duties imposed in 1980. In any case, even if there was injury, a lower rate of duty would have been sufficient to eliminate it.

16. The Council states that, after decreasing during the 1981/1982 season following the imposition of the antidumping duties, exports from the United States increased substantially in 1982. Exports from the Netherlands, which did not increase as much as was suggested, were carried out at considerable losses. The anticompetitive practices found in France related to a different period and different products. The imposition of an antidumping duty is therefore justified, even if the injury is not exclusively due to the imports in question. The Commission shares the the Council's views on the existence of dumping and injury.

17. According to Article 13 (3) of Regulation No 3017/79, the amount of antidumping duties may not exceed the dumping margin and should be less if such lesser duty would be adequate to remove the injury.

18. It follows that when the Council adopts an antidumping regulation it is required to ascertain whether the amount of the duties is necessary in order to remove the injury. In this case, however, there is nothing in the documents before the Court to suggest that the Council took into consideration that aspect of the matter.

19. In the preamble to Regulation No 101/83, the Council deals in detail with the question whether the injury was caused by imports from the United States or by sales on the French market by producers established in other Member States. It does not however discuss the question of the amount of duties necessary in order to remove the injury; its only reference in that connection is to the Commission's view that ‘lower levels would constitute a bonus for Allied Corporation's withdrawal from its undertaking and subsequent non-cooperation and the withdrawal from their undertakings by Kaiser and Transcontinental’. That consideration is not relevant to the application of Article 13 (3) of the regulation. Examination of the case has not disclosed any other factors indicating that the Council took into account that article in fixing the amount of the antidumping duties. It must therefore be concluded that the regulation was adopted in disregard of Article 13 and that it must therefore be declared void.

Costs

20. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Council has failed in all its submissions, it must be ordered to pay the costs. The Commission must also be ordered to pay the costs of its invervention.

On those grounds, THE COURT hereby:

(1) Declares void Council Regulation (EEC) No 101/83 of 17 January 1983;

(2) Orders the Council to pay the costs and the Commission to pay the costs of its intervention.

1 Language of the Case: French.