C-113/77

JUDGMENT OF 29. 3. 1979 — CASE 113/77

In Case 113/77

NTN TOYO BEARING COMPANY, LTD., Osaka (Japan),

NTN BEARINGS — GKN LTD., Burntwood (United Kingdom),

NTN WÄLZLAGER (EUROPA) GMBH, Erkrath-Underfeldhaus (Federal Republic of Germany), NTN SIDAG, Schweighouse (France),

NTN TOYO BEARING COMPANY v COUNCIL

represented by Messrs W. Stoecker and Malte Sprenger, Advocates at the Düsseldorf Bar, Dr Werner von Simson, Professor of Law, University of Freiburg-im-Breisgau, and Mr Martin von Simson, Barrister, of the Middle Temple, London, with an address for service in Luxembourg at the Chambers of Mr Claude Penning, Advocate, 43, Avenue du Dix-Septembre, applicants, COUNCIL OF THE EUROPEAN COMMUNITIES, represented by Mr H.-J. Lambers, acting as Agent, Messrs Francis Patrick Neill, Queen's Counsel, of Gray's Inn, Mark Waller, Barrister, of Gray's Inn, and Lawrence Collins, Solicitor, of Messrs Herbert Smith & Co., London, Advisers, with an address for service in Luxembourg at the office of Mr Van de Houten, European Investment Bank, Place de Metz,

gives the following

JUDGMENT OF 29. 3. 1979 — CASE 113/77

JUDGMENT

Facts and Issues

NTN TOYO BEARING COMPANY v COUNCIL

If it becomes apparent from consultation, "provisional action" consisting in fixing unanimously, that protective measures a (percentage of) anti-dumping duty in are unnecessary, the proceedings stand respect of which payment is not claimed terminated. Otherwise the Commission but importers must provide security to submits to the Council forthwith a repon that amount, "collection of which shall "on the results of the consultation" be determined by the subsequent decision together with a proposal that the of the Council under Article 17". proceeding be terminated. If the Council Article 17 concerns the lot of the pro­ "acting by a qualified majority, approves visional duty and provides as follows: the proposal … the proceeding shall stand terminated. It shall likewise stand "1. Where the facts as finally established terminated if within one month the show that there is dumping and Council has taken no decision or made injury, and the interests of the no request by a qualified majority to the Community call for Community intervention, the Commission shall, Commission asking it to resume its exam­ ination of the matter" (Article 14 (1)). after hearing the opinions expressed within the Committee, submit a Article 14 (2) provides as follows: proposal to the Council. Such a "The provisions of the foregoing proposal shall also cover the matters paragraph shall also apply where, during set out in paragraph 2. examination of the matter, the exporters 2. (a) The Council shall act by a give a voluntary undertaking to revise qualified majority. Where Article their prices so that the margin of 15 (1) has been applied, the dumping is eliminated or to cease to Council shall decide, subject to export the product in question to the the provisions of Article 15 (2), Community, provided that the what proportion of the amounts Commission, after hearing the opinions secured by way of provisional expressed within the Committee, duty is to be definitively considers this acceptable." collected.

Anti-dumping duties are imposed by (Official Journal 1977, L 112, p. 1). regulation (Article 19 (1)). Article 20 (1) However, the percentage was fixed at of Regulation No 459/68 provides, in 10 % for the products manufactured and accordance with Article 8 (b) of the exported by Nachi Fujikoshi Cor­ General Agreement on Tariffs and Trade poration and Koyo Seiko Company Ltd. Anti-dumping Code, that the products In the meantime the Commission carried referred to are described indicating the out an investigation at the European name of the supplier. Article 20 (2) (French, British and German) sub­ provides that the only exception to this sidiaries of the Japanese companies rule is where it is impracticable to name during the months from Februar)' to all the suppliers. April 1977. Because those subsidiaries Importers who wish to show that were associated with the producer products, although subject to anti­ companies, it based its calculations of the dumping duties, were not dumped, have export prices on the "price at which the the means of administrative appeal imported product is first resold to an (Article 19 (4)). independent buyer" (Article 3 (3)). Because of the great variety of categories (b) Facts of products on the market it adopted for By document of 15 October 1976, the each undertaking a sample of rep­ Committee of the European Bearing. resentative products and determined the Manufacturers' Associations, at that time average price. Finally, the prices determined were reduced by fixed per­ without legal personality, whose members were the three German, British centages so as to reconstruct the export price to be adopted for the purpose of and French trade organizations, comparison with domestic prices. submitted a complaint to the Commission concerning dumping by From 18 to 28 April 1977 an Japanese roller bearing manufacturers. investigation was held in Japan at the After consultation with the Member four major producers by a group of States, the Commission decided on 9 experts from the Commission with the collaboration of a chartered accountant, November 1976 to carry out an official an expert from the United Kingdom and anti-dumping investigation. It informed an expert from the Federal Republic of the Japanese mission of this and sent Germany. questionnaires to all the known importers and exporters and published From the end of May until the end of the required notice in the Official June 1977 meetings were held between Journal of 13 November 1976, C 268, the Commission and the Japanese roller p. 2. bearing producers on the possibility of an undertaking as to prices. After four When the replies to the questionnaires weeks of discussion the four major had been received, the European and Japanese manufacturers met on 18 and 19 January 1977 so that each side could put its views and arguments to the other. The Commission imposed a provisional anti-dumping duty of 20 % on ball bearings and tapered roller bearings and parts thereof originating in Japan by Regulation (EEC) No 261/77 of 4 February 1977 (Official Journal 1977, L 34, p. 60), which was extended by Council Regulation (EEC) No 944/77

Japanese producers signed on 20 June (c) The subject-matter of the dispute 1977 undertakings that they would The applicants have lodged the present increase prices. application against Article 3 of Council On 26 July 1977 the Council adopted Regulation (EEC) No 1778/77. They definitive measures by issuing Regulation claim that during the discussions which (EEC) No 1778/77 concerning the followed the entry into force of Regu­ application of the anti-dumping duty on lation (EEC) No 261/77 imposing a pro­ ball bearings and tapered roller bearings visional anti-dumping duty they originating in Japan. undertook by agreement of 20 June 1977 Article 1 of Regulation (EEC) No no longer to have recourse to practices 1778/77 imposes a definitive anti­ considered unacceptable by the dumping duty of 15% whose application Commission and that by telex message of is however suspended. Article 2 orders 3 August 1977 the Commission declared that it was satisfied with the under­ the Commission, in collaboration with the Member States, to monitor the under­ takings given. takings given by the major Japanese In those circumstances, Article 3 of Regu­ producers and provides that if the lation (EEC) No 1778/77 is not justified. Commission finds that these under­ More generally, the applicants claim that takings are being evaded, are not being dumping complained of has not been observed or have been withdrawn it must sufficiently established in law and in forthwith, after consulting the Member accordance with the requirements both States within the Advisory Committee of the rules of the General Agreement on provided for in Article 12 of Regulation Tariffs and Trade and of the Community (EEC) No 459/68, convened within a rules. period of five days, terminate the suspension of the application of the (d) Procedure definitive duty. The application, dated 19 September In application of Article 17 (2) (a) of 1977, was entered in the Court Register Regulation (EEC) No 459/68, Article 3 on 20 September 1977.<appnote>1</appnote> On 28 of Regulation No 1778/77 provides as September 1977, the applicants requested follows: the Court to adopt interim measures. On 14 October 1977, the President of the "The amounts secured by way of pro­ visional duty under the provisions of Court of Justice ordered, as an interlo­ Regulations (EEC) No 261/77 extended cutory decision, inter alia that the by Regulation (EEC) No 944/77, in application to the applicants of Article 3 respect of products manufactured and of Regulation No 1778/77 should be exported by the following producers, suspended until the final judgment in Case 113/77, on condition that and for shall be definitively collected to the extent that they do not exceed the rate so long as the applicant companies of duty fixed in this regulation: Koyo continued to provide security for the per­ Seiko Company Limited; Nachi formance of their obligations in the Fujikoshi Corporation; NTN Toyo amounts which they were required to Bearing Company Limited; Nippon Seiko KK."

The Court, having heard the report of The defendant considers that the the Judge-Rapporteur and the views of application is not admissible, on the the Advocate General, decided by order ground that is does not fulfil the conditions laid down in the second of 12 April 1978 to reserve its decision on the objection of inadmissibility for the paragraph of Article 173 of the EEC final judgment. Treaty.

Having heard the report of the Judge- 1. Legislative character of Regulation Rapporteur and. the views of the No 1778/77 Advocate General, the Court decided to open the oral procedure without a The defendant emphasizes that the preparatory inquiry. adoption of anti-dumping measures is at the entire discretion of both the Council However, the Court requested the and the Commission. Regulation No parties and the Commission of the 459/68 is based on the principle European Communities to answer according to which the imposition of certain questions, pursuant to Article 21 duties must not constitute per se an of the Protocol on the Statute of the obligation even if dumping and injury Court of Justice of the EEC. have been ascertained. This shows, because of its very objective, the intrin­ II — Conclusions of the parties sically legislative character of Regulation No 1778/77. The applicants claim that the Court Moreover, Regulation No 459/68 should: provides expressly that anti-dumping — Declare Article 3 of Regulation duties must be imposed by regulation. (EEC) No 1778/77 inapplicable to Because those duties are an instrument them. of commercial policy, the defendant considers that a regulation has to apply The defendant contends that the Court should:

to all actual or potential importers provisions of Article 20 of Regulation whether or not they are known or No 459/68, for the sole purpose of identifiable when the measures are identifying products in respect of which adopted. amounts secured by way of provisional duty are to be definitively collected. The Regulation No 1778/77 is a genuine regulation is obligatory and involves generally applicable measure of a legislative nature. Article 1 of that regu­ judicial consequences for categories of persons specified in a general and lation applies a definitive anti-dumping abstract way, that is, all importers of duty on certain generally defined roller bearings originating from the four products originating in Japan. The fact major sources of supply. that products are identified cannot prevent the regulation from having a The applicants observe first of all that general normative character (judgment they challenge one act only, in other of 5 May 1977 Koninklijke Scholten words the pronouncement in Article 3 of Honig v Council and Commission, Case Regulation No 1778/77 that certain pro­ 101/76 [1977] ECR 808). Paragraph 2 of visional duties should be definitively Article 1 suspends the duty quite collected. generally. They consider that the steps to be taken Article 2 expresses the duties of the under Regulation No 459/68 are clearly Commission. By directing the of an administrative nature. Those Commission to perform certain functions measures presuppose an evaluation of and giving it appropriate power and facts and circumstances peculiar to each authority to exercise them the true individual company. They aim at under­ nature of that article is legislative. takings to be given by each enterprise Article 3 is a general provision imposing individually. anti-dumping duty and applies generally Article 3 of Regulation No 1778/77 is a to products manufactured and exported decision. Article 15 (1) (a) and (2) (b) of by four named manufacturers. The manu­ Regulation No 459/68 uses the words facturers are named because Article 8 (b) "subsequent decision of the Council" of the General Agreement on Tariffs and and "that the Council has not decided to Trade Anti-dumping Code requires the collect". The order issued in Article 3 parties to the Code to ensure that the obliges and commits a limited number of authorities should name the suppliers of persons, namely the customs authorities the product concerned. The duty is with whom security has been lodged, to payable quite generally by all importers collect the respective amounts. On the of such products and the fact that the other hand, that provision has an importers may be potentially identifiable would not affect the generality of the regulation in question.

immediate legal effect on a limited and Nor is there anything in Regulation No known number of specially named 1778/77 which individually concerns the persons, namely the four enterprises who exporters. As indicated above, the fact had put up security under the provisions that the exporters are named in Article 3 of Regulation No 261/77. The order to merely serves to comply with the General collect is not an abstract and objectively Agreement on Tariffs and Trade Anti­ determined ruling. It is a concrete and dumping Code and to identify the specific decision made, as Regulation No products which have accounted for all 1778/77 itself terms it, in consideration but an insignificant proportion of of "the facts as finally established". imports into the Community. The intervener makes observations to the The defendant replies that Article 19 (1) same effect. of Regulation No 459/68 provides for anti-dumping duties to be imposed by (b) The importers regulation. The use of expressions elsewhere in that regulation cannot affect According to the defendant the importers the legal nature of the regulation in among the applicants are not directly question. concerned by Articles 1 and 2 of Regu­ lation No 1778/77. First, they cannot be The imposition of an import duty placing directly affected by a duty which is obligations on customs authorities to imposed and then suspended by the same collect the duties is a typical case of the regulation. Next, to the extent that imposition of duties by regulation. To Article 2 may involve the reimposition of argue that because the customs auth­ that duty the importers are not directly orities are limited and known is sufficient concerned because the Commission's to enable the character of a regulation to power is interposed between the be regarded as a decision is to seek to suspension and the reimposition of the enlarge the concept of a decision to such duty. an extent as to jeopardize the system of the Treaty (Koninklijke Scholten Honig v The applicant importers are not Council and Commission [1977] ECR individually concerned by Article 3 of 797 at 808). Regulation No 1778/77 which applies generally to importers of the relevant The provisional duty was not imposed on products. The general character of that the four Japanese undertakings but on article is not affected by the fact that importers. It was in relation to those importers that Regulation No 1778/77 ordered the definitive collection of duty.

those importers can be identified. The 1778/77 by attacking the validity of importers in question in this case are not Regulation No 261/77, the application is the only importers who were required to inadmissible. Even if the applicants pay the definitive duty. There are at least invoke Article 184 of the EEC Treaty it 260 such importers in the Community. is impossible to contest the validity of The applicants reply that the mechanism Regulation No 261/77 since Regulation No 1778/77 is not a decision either in which Regulation No 459/68 has set up form or in substance. Article 184 can implies that they are individually concerned by the contested measure. The only be invoked to attack a "parent" provisional duties as well as the order to regulation of a contested decision. collect them were imposed with regard Since Regulation No 1778/77 is to the individual behaviour and under­ concerned exclusively with the takings of each of the four affected imposition of definitive duties after a full enterprises. investigation by the Commission it can stand alone without reliance on The contested measure is also of direct concern to them. The order to collect is Commission Regulation No 261/77. of direct concern to them and affects The applicants rejoin that if the them immediately without the imposition of the provisional duty laid intervention of an administrative body down in Regulation No 261/77 was whose actions could be brought before a irregular then the decision to have it national court. definitively collected must also fall. Any The contention of the Council that it is measure adopted by the Community may not the exporter but the imponer who is be the subject-matter of an application concerned does not bear scrutiny. The under the second paragraph of Article whole procedure is directed against the 173. The applicants do not see any exporter. Moreover the Commission has inconsistency in challenging a decision treated the European distributors of the and relying inter alia on the inap­ exporter as being economically one unit plicability of a regulation; this is, when substituting their sales prices for moreover, permitted under Article 184 of the export price. The applicants deny the Treaty. that there are any importers of their The defendant claims in reply that if bearings who do not in effect buy from Regulation No 261/77 is a regulation their European distributors. within the meaning of Article 184 it must According to the defendant it follows follow that Council Regulation No from the case-law of the Court that the fact that it is possible to ascertain the number or even the identity of the person to whom an act applies is not sufficient to convert it into a decision.

1778/77 is also a regulation whose Treaty. Having regard to the necessity of annulment cannot be applied for under immediate action the Council had sound the second paragraph of Article 173. practical reasons for delegating the The defendant and the intervener claim implementation of the basic regulation in that Article 184 cannot be used to relation to provisional duties to the Commission under Article 155 of the circumvent the time-limits under Article 173. Treaty. Even if Commission Regulation No The substance of the case 261/77 were defective the Council would not accept that Article 3 of Council The applicants rely on grounds of lack Regulation No 1778/77 would of competence, infringement of an necessarily also be invalid. Having regard essential procedural requirement and to the fact that no direct attack has been infringement of the Treaty and of legal made by the applicants against the latter provisions relating to its application. regulation it may be considered, in the light of the full investigation carried out A — Lack of competence for the purposes of Council Regulation No 1778/77, that the passing of that According to the applicants, the regulation had cured any defect in Commission did not have power to issue Commission Regulation No 261/77, at Regulation No 261/77. The power least in so far as the defect was pro­ conferred on it by Regulation No cedural. 459/68 of the Council is ultra vires and The intervener also maintains that the is not supported by any competence granted by the Treaty to the Council. applicants are time barred from invoking Measures which demand an independent the illegality of Regulation No 261/77. decision and which have a definite effect In their reply, the applicants allege that require the strict observance of the distri­ Article 113 (2) ordains that the bution of competence ordained by the Commission proposes but the Council Treaty. In the view of the applicants, the takes the decisions. Article 15 of Regu­ imposition of a provisional duty required lation No 459/68 concerns an act of such a decision in that the assumed implementing the common commercial occurrence of dumping and following policy which Article 113 of the EEC injury' entitles but does not force the Treaty has reserved to the Council and Community to impose provisional made subject to the requirement of a measures. qualified majority in the Council. This In its defence, the Council claims that in requirement would obviously be evaded if the decision were passed on to the authorizing the Commission to take pro­ Commission. visional measures pursuant to Article 15 of Regulation No 459/68, it was acting within its powers (Case 25/70 Einfuhr- und Vorratsstelle für Getreide und Fut­ termittel v Köster, Berodt & Co. [1970] ECR 1161 and Case 23/75 Rey Soda v Cassa Conguaglio Zucchero [1975] ECR 1279). In relation to anti-dumping duty the basic elements have been dealt with by Council Regulation No 459/68 and in accordance with the procedure laid down in Article 113 (2) of the EEC

The intervener considers that the B — Infringement of essential pro­ applicants have not specified which cedural requirements formal conditions stipulated in Article 10 1. The applicants claim that the order (c) of the Anti-dumping Code it is referred to in Article 3 of Regulation No alleged that the regulation fails to satisfy. 1778/77 to collect the provisionally The Council and the intervener claim imposed anti-dumping duties relies upon that neither Article 190 or any other the imposition of those duties by article of the Treaty provide for a duty Commission Regulation No 261/77 and to refer in a regulation to the fact that it is unlawful if this regulation is invalid. was adopted by a qualified majority. The applicants claim that the latter regu­ The Council observes that the effect of lation does not satisfy the formal imposing a provisional duty of 20% on conditions stipulated in Article 190 of the the products of the applicants against a Treaty and also in Article 10 (c) of the finding as stated that in several cases the Anti-dumping Code. margin of dumping exceeded 30% is by Regulation No 459/68 of the Council, implication, having regard to Article 19 which forms the basis of Regulation No (3) of Regulation No 459/68, to state 621/77, fails to state that a qualified that the average margin as provisionally majority vote has been obtained (Article determined was at least 20%. 113 (4)). Considering that the interests of the Moreover, the Commission was bound Community "call for immediate to observe the conditions imposed by intervention", Commission Regulation Article 19 (3) of Regulation No 459/68, No 261/77 indicated as clearly as according to which no provisional duty possible that there was an emergency. "shall exceed the margin of dumping provisionally established". Commission Regulation No 261/77 entirely fails to determine that margin. In addition, no reasons are given in that regulation as to why such an emergency situation was thought to exist. Such a situation, according to the applicants, constitutes one of the conditions precedent for the power of the Commission.

since the deliberations of the Council are With regard to the alleged failure to not taken in public. The applicants leave state the margin of dumping, the Council this point to the wisdom of the Court to considers that the applicants could consider. deduce from the various findings set out The Council cannot by its acts relieve and the articles in Regulation No 459/68 the Commission of the necessity to give of the Council under which the findings adequate reasons for its decisions. If the are made what the margin provisionally Commission did not fulfil that determined was. It was possible for the requirement within the five working days applicants to make that calculation. that would show that it was unable to With regard to the emergency transact its business in the way the procedure, the Council maintains that all Treaty prescribes. the conditions laid down in Article 15 (1) With regard to the absence of an (a) of Regulation No 459/68 were fulfilled. indication of the margin of dumping, the applicants observe that if the very fact that the duty had been imposed proved 2. Failure to state the reasons why the that the determined margin could not export prices were unreliable have been lower than the duty this would The applicants observe that in accordance make nonsense of Article 10 (c) of the with Article 3 (3) of Regulation No Anti-dumping Code which provides that 459/68, both the provisional determi­ "the authorities concerned shall inform nation of the existence of dumping … the directly interested parties of their within the context of Regulation No decisions regarding imposition of prov­ 261/77 and the definitive determination isional measures, indicating the reasons of the latter within the context of Regu­ for such decisions and the criteria lation No 1778/77 imply an analysis of applied". Article 190 of the Treaty and the price and comparison of that price Article 10 (c) of the Anti-dumping Code with the price on the domestic market give the applicants the right to know "on the basis of the price at which the what actual margin had been determined imported products were first resold to an as the criterion of the allowable rate independent buyer". However the regu­ which the duty must not exceed. lations do not indicate the reasons why the export prices did not constitute a According to the applicants, Regulation reliable basis for the comparison. No 261/77 fails to keep within the limits laid down in the recitals of the preamble It follows from paragraph 1 of the Notes to Regulation No 459/68 for the and Supplementary Provisions to Article purposes of justifying the emergency VI of the General Agreement on Tariffs procedure. The Commission has not and Trade that hidden dumping by even tried to explain why that intervention had to be made by the Commission rather than by the. Council and why it could not wait until, a few months later, the Council could decide on the facts as finally established. In its rejoinder, the Council claims that the short time-limit of five working days

associated houses includes "the sale by integral part thereof; Annex 1 consists of an imponer at a price below that the Notes and Supplementary Provisions corresponding to the price invoiced by relied upon by the applicants. an exporter with whom the importer is The applicants claim that the association associated, and also below the price in must have led, and must be shown to the exporting country" which could only have led, to the importer having sold the have been ascertained by investigating products in question at prices below the transactions of each of the importers those which he paid to the exporter. No separately. such policy has ever been practised by The Council replies that the Commission the applicants. is entitled to take the view that the actual In its rejoinder, the Council answers that export prices were unreliable because of the General Agreement on Tariffs and "association". No other reason is Trade Anti-dumping Code as an in­ required (Article 3 (3) of Regulation No terpretation of Article VI was intended 459/68). to be the operative interpretative Paragraph 1 of the Notes and Sup­ provision unless otherwise expressly plementary Provisions to Article VI stated. The words in paragraph 1 of the relied upon by the applicants was Supplementary Provisions referred to by replaced by the Anti-dumping Code, the applicants do no more than give an which is based on a broader concept. example of hidden dumping. Both under Article 2 (e) of the General Agreement The intervener observes that the on Tariffs and Trade Anti-dumping Commission was faced with extreme Code and under Article 3 (3) of Regu­ difficulty in determining the export lation No 459/68, unreliability "because prices of bearings produced in Japan. of association" is the only criterion The prices on the export price list applicable for the purpose of recon­ discussed during the meetings of 18 and structing the export prices on the basis of 19 January 1977 between representatives sales to the first independent buyer. of the Japanese bearing industry and the The intervener observes that the Commission were described as guide­ applicants have not availed themselves of lines only and whilst originally they were referred to by the Japanese repres­ the opportunity to show from actual entatives as FOB prices, subsequently figures that the export prices to its sub­ sidiaries were, notwithstanding the these representatives maintained that relationship between exporter and they represented ex-warehouse prices. The use of the criterion of the first resale importer, "reliable". price to an independent buyer is therefore justified on both the grounds contained in Article 3 (3) of Regulation No 459/68 of the Council, that is, the lack of a determinable export price and the unreliability of export prices because of the association between exporter and importer, although only the latter grounds were referred to in Commission Regulation No 261/77 and Council Regulation No 1778/77. In their reply, the applicants claim that under Article XXXIV of the General Agreement on Tariffs and Trade, the annexes to that Agreement are an

C — Infringement of the Treaty and of they refer to the actual increases. As has legal provisions relating to its been shown to the Commission they application raised them by substantially more than the percentage called for in the under­ 1. Failure to pay regard to the price takings subsequently signed. increases made pursuant to the under­ The applicants consider that the blame taking for the delay, if there was one, lies The applicants claim that they undertook mainly with the Commission because it to increase their prices in a manner steadfastly refused to answer the which was designed to eliminate to the applicants' queries. satisfaction of the Commission any They claim that the Council was not alleged or definitively determined cause entitled to order the collection of the for the imposition of an anti-dumping security given for the provisional duty duty. The undertaking was given on 20 once a voluntary undertaking had been June 1977 and was retrospective to 5 given and accepted. The undertaking was February 1977, the date on which given at the instigation of and in the Commission Regulation No 261/77 wording suggested by the Commission. came into force. The applicants have The Council's suggestion that not to acted upon this undertaking and thereby achieved the same effect that the collect the duty would amount to a reward to the Japanese companies for definitive collection of the provisional the delay which they had caused is duty could have produced. They submit totally unjustified. Provisional duties are that since Regulation No 1778/77 states not punitive measures (Article 7 (b) of that those undertakings to revise prices the Anti-dumping Code). justify the suspension of the definitively imposed duty they must, by the same In its rejoinder, the Council maintains reasoning, preclude the definitive that any increases in prices prior to the collection of the provisional duty. giving of the undertaking did not eliminate the margin of dumping found. In reply, the Council and the intervener In the view of the Council, the applicants observe that the applicants offered under­ give absolutely no details of the price takings at a very late stage in the increases they say they made or the dates proceedings, in other words, on 20 June when they were made. Neither the 1977. It was impossible for the applicants applicants nor their subsidiaries had thus to have acted on the undertakings implemented the undertaking even by 31 from 5 February 1977. December 1977. Although the undertaking enabled the definitive duty of 15% imposed to be suspended for the future, it did not in any way preclude the collection of the provisional duty. The Council adds that the price increases prior to the offering of the undertaking were due entirely to the imposition of the provisional duty. They had an effect for a very limited period only and did not in any case eliminate the margin of dumping found. In their reply, the applicants emphasize that they did not wait to sign under­ takings before raising their prices and

The Council emphasizes that the failure no reason to treat the different exporters by the applicants to offer an undertaking differently the Council could have until a late stage was in no way welcomed the opportunity of putting prejudicial to their case and the relevant matters right even if this could only be part of Article 7 (b) of the General done by collecting the same 10% from Agreement on Tariffs and Trade Anti­ all exporters. dumping Code (incorporated in Article The discrimination lies in the fact that 14 (2) (c) of Regulation No 459/68 of different amounts are to be collected the Council) was in no way infringed. from parties whose percentage of dumping has been held to have been the 2. Discrimination through applying same at the time the collection was different rates for the provisional ordered. duty In its rejoinder, the Council claims that According to the applicants the pro­ the difference in treatment resulted from visional duty imposed by the being unable to collect duty from Commission provides for a lower rate in importers of Nachi and Koyo products respect of products manufactured and by virtue of the provisions of Article 19 exported by two specified producers. (3) of Regulation No 459/68. It did not Under Article 3 of Regulation No result from any arbitrary decision. 1778/77, the applicants and one other firm would have to pay retrospectively 3. Date taken for the comparison of 15% duty whereas two other firms can prices only be made to pay 10%, although no According to the applicants, it matters difference in the dumping margin has whether the resale price, if substituted been established in that regulation. That for the export price, is being compared regulation must therefore be regarded as with the home market price at the time discriminatory and offending against the of the actual import or with that at the provisions of the Anti-dumping Code time of the "first independent resale". (Article 8 (b)). The applicants hold considerable stocks The Council and the intervener reply that for considerable times. The only non­ if there was any act of discrimination the discriminating comparison can be that act of discrimination was the making of between the home market price at the Commission Regulation No 261/77. time of the actual export and the price at That regulation cannot be challenged in which the goods in question could have these proceedings. first been resold to an independent The investigation carried out at the time buyer. when the provisional duties were The Council and the intervener observe imposed indicated different margins of that the prices were compared in dumping. That being so, the fact provision was made for the application of a duty at a different rate to products of different origins does not constitute discrimination but proves, rather, that the provisions of Article 19 (3) of Regu­ lation No 459/68 have been scrupulously observed.

2 By application of 5 October 1977 the Federation of European Bearing Manu­ facturers' Associations (hereinafter referred to as "FEBMA") asked to be allowed to intervene in support of the submissions of the Council, the defendant; this intervention was allowed by order of the Court of 26 October 1977.

3 As early as the beginning of 1977, the Commission, under Article 10 of Regu­ lation (EEC) No 459/68 of the Council of 5 April 1968 on protection

NTN TOYO BEARING COMPANY v COUNCIL

against dumping or the granting of bounties or subsidies by countries which are not members of the European Economic Community (Official Journal, English Special Edition 1968 (I), p. 80), commenced examination of the matter so as to check whether protective measures against dumping by Japanese ball bearing and tapered roller bearing producers were necessary.

4 Pursuant to Article 10 in conjunction with Article 15 of Regulation No 459/68, the Commission introduced by Regulation (EEC) No 261/77 of 4 February 1977 (Official Journal 1977, L 34, p. 10) a provisional anti­ dumping duty of 20%, reduced to 10% in the case of two producers, for ball bearings, tapered roller bearings and parts thereof originating in Japan; this provisional duty was extended by Council Regulation (EEC) No 944/77 of 3 May 1977 (Official Journal 1977, L 112, p. 1) under Article 16 of the basic regulation, Regulation No 459/68.

5 During the procedure initiated by the Commission the four major Japanese producers, including NTN, gave voluntary undertakings signed on 20 July 1977 under Article 14 (2) of Regulation No 459/68 to revise their prices so that the margin of dumping might be eliminated; those undertakings resulted in an increase of 20% in their export prices.

8 The applicants reply that the contested article, although drafted in abstract terms, in fact affects only the first applicant and three other Japanese under­ takings which produce the products in question (hereinafter referred to as "the major producers"), as well as their subsidiaries in the Community. The preliminary investigation carried out before the adoption of Regulation No 1778/77 was limited to inquiries made first at the premises of the European subsidiaries and then at the premises of the major producers in Japan. The specific nature of the measure is. confirmed by Article 3 of Regulation No 1778/77 which provides for the collection of the amounts secured by way of provisional duty only as regards the products manufactured and exported by the major producers. The contested article therefore constitutes a decision which affects only the major producers and their subsidiaries and must therefore be considered to be a decision concerning them adopted in the guise of a regulation.

9 Before commencing the examination of the admissibility of the application, it should be stated that NTN and its subsidiaries are sufficiently closely associated for the Commission to have considered, during its examination of the matter, that it was necessary to apply to them the special provisions concerning export prices laid down in Article 3 (3) of the basic regulation, Regulation No 459/68. In these circumstances there is no need, as regards the question whether the contested measure is of direct and individual concern to the applicants, to make a distinction in relation to them between producers on the one hand and importers on the other.

11 Article 3 constitutes accordingly a collective decision relating to named addresses. Although the collection of the amounts secured by way of pro­ visional anti-dumping duty is per se of direct concern to any importer who has imported the products in question subject to such duty, the special feature of Article 3 which sets it apart is that it does not concern all importers but only those who have imponed the products manufactured by the four major Japanese producers named in that article. The allegation of the Council and the intervener that only implementing measures adopted by the national authorities are of direct concern to the importers and that these importers should therefore, where appropriate, bring the matter before the national courts having jurisdiction disregards the fact that such implementation is purely automatic and, moreover, in pursuance not of intermediate national rules but of Community rules alone.

12 Article 3 of Regulation No 1778/77 is therefore of direct and individual concern to those importers and consequently the applications lodged by the subsidiaries, as importers of NTN products, are admissible. As a result the application lodged by NTN against that article is also admissible.

The substance of the application

13 The applicants base their application against Article 3 of Regulation No 1778/77 on the claim, amongst other complaints against that article, that Regulation No 459/68 does not permit the definitive anti-dumping duty to be imposed at the same time as undertakings by the producers concerned to revise prices are accepted. They claim that since the collection of the

"(a) The provisions of the foregoing paragraph shall also apply where, during examination of the matter, the exporters give a voluntary under­ taking to revise their prices so that the margin of dumping is eliminated or to cease to export the product in question to the Community, provided that the Commission, after hearing the opinions expressed within the Committee, considers this acceptable. (b) Where the Commission, acting in accordance with the provisions of the foregoing subparagraph, accepts the undertaking referred to therein, the investigation of injury shall nevertheless be completed if the exporters so desire or if, after hearing the opinions expressed within the Committee, the Commission so decides. If the Commission, after hearing the opinions expressed within the Committee, makes a determi­ nation of no injury, the undertaking given by the exporters shall auto­ matically lapse unless the exporters state that it is not so to lapse.

NTN TOYO BEARING COMPANY v COUNCIL

(c) The fact that exporters do not offer to give such undertakings, or do not accept an invitation made by the Commission to do so, shall in no way be prejudicial to the consideration of the case. However, the Commission shall be free to determine that a threat of injury is more likely to be realized if the dumped imports continue. (d) Where the Commission finds that the undertaking of exponers is being evaded or no longer observed or has been withdrawn and that, as a result, protective measures might be necessary, it shall forthwith so inform the Member States and shall recommence the examination of the facts in accordance with Article 10.

at the same time as, on the other, by the imposition on the part of the Council, at the proposal of the Commission, of a definitive anti-dumping duty.

18 It is impossible to accept the argument that in the present case the under­ taking was given only after examination of the matter since the examination of the matter ends only when the Commission submits its proposals to the Council, whilst it is not disputed in the present case that the undertakings were signed on 20 June 1977 before the meeting of the advisory committee provided for in Article 12 (2) of Regulation No 459/68 held on 21 June 1977. Those undertakings were referred to by the Commission in its proposal to the Council of 4 July 1977 and considered to be "acceptable". The same undertakings were referred to by the Council both in the recitals of the preamble to Regulation (EEC) No 1778/77 and in the provisions of that regulation as valid existing undertakings. The fact that the Commission did not notify its acceptance of the undertaking until 3 August 1977 cannot therefore be considered as an indication that that acceptance was made only "subject to" the suspended imposition of a definitive anti-dumping duty as a penalty.

19 On the contrary, under the above-mentioned Article 14, an undertaking by an exporter to revise his prices leads to termination of the proceeding so that it is impossible to apply Article 17 of Regulation No 459/68. By specifying that termination of the proceeding occurs only if "the Commission, after hearing the opinions expressed within the Committee, considers this acceptable", Article 14 in no way implies that the Commission and, where appropriate, the Council may follow the procedure provided for until the stage reached in Article 17 and accept the undertaking only at the same time as introducing a definitive anti-dumping duty.

22 The submission is therefore well founded and it follows that the application directed against Article 3 is sound in law.

23 If the result of the undertakings signed by the four major Japanese producers was that, under Article 14 of the basic regulation, the proceeding should have stood terminated, it follows that there was no need to apply Article 17 which empowers the Council to order the collection of the amounts secured by way of provisional duty. The wording of Article 17 shows moreover that such a decision can be adopted only at the same time as the imposition of a definitive anti-dumping duty.

24 It follows in particular that the Commission can propose a decision to collect the amounts secured only if it proposes "Community action", in other words, the introduction of a definitive anti-dumping duty. This interpretation

JUDGMENT OF 29. 3. 1979 — CASE 113/77

is confirmed by Article 16 (2) which provides that the Commission must submit a proposal to the Council for Community action at least one month before expiry of the provisional anti-dumping duty. It is also confirmed by the wording of Article 17 (2) (b).

25 In fact, under Article 19 (3) of the basic regulation a provisional anti­ dumping duty can be imposed only in so far as a margin of dumping and material injury have been found. This would seem to have been the intention of the Council when it provided in Article 3 of the contested regulation that the amounts secured were to be "definitively collected to the extent that they do not exceed the rate of duty fixed in this regulation", in other words the rate of the definitive anti-dumping duty whose application had been suspended.

30 It is also necessary to order the Council to pay the costs incurred by Nippon Seiko and its subsidiaries as interveners in connexion with the application for the adoption of interim measures.

31 Finally, the intervener FEBMA must be ordered to bear its own costs and those incurred by the applicants on account of its intervention.

On those grounds,

THE COURT

hereby: 1. Annuls Article 3 of Regulation (EEC) No 1778/77;

2. Orders the Council to pay the costs in connexion with the application for the adoption of interim measures and the main action, except for those caused by the intervention;