C-119/77

NIPPON SEIKO v COUNCIL AND COMMISSION

In Case 119/77

NIPPON SEIKO K.K., Tokyo (Japan),

and

NSK BEARINGS EUROPE LIMITED, London (United Kingdom),

and

FEBMA (Federation of European Bearing Manufacturers' Associations), Frankfurt, represented by Dietrich Ehle, of the Cologne Bar, assisted by Terence M. Lane, Solicitor, London, with an address for service in Luxem­ bourg at the offices of Jeanne Housse, Huissier, 21 Rue Aldringen, intervener,

JUDGMENT OF 29. 3. 1979 — CASE 119/77

APPLICATION, first, for the annulment of Council Regulation (EEC) No 1778/77 of 26 July 1977 concerning the application of the anti-dumping duty on ball bearings and tapered roller bearings, originating in Japan (Official Journal 1977, L 196, p. 1), and, secondly, for damages,

THE COURT

composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

Advocate General: J.-P. Warner Registrar: A. Van Houtte

exporting country of origin" and no request by a qualified majority to the explains this definition. Article 4 limits Commission asking it to resume its exami­ the concept of injury. nation of the matter" (Article 14 (1)). The normal procedure begins with the Article 14 (2) (a) provides as follows: lodging of a complaint by a natural or "The provisions of the foregoing legal person or an association submitted paragraph shall also apply where, during either to a Member State or to the examination of the matter, the exporters Commission (Articles 6 and 7). A give a voluntary undertaking to revise Member State may also alert the their prices so that the margin of Commission (Article 8). If the complaint dumping is eliminated or to cease to seems to be serious the Commission, in export the product in question to the co-operation with the Member States, Community, provided that the commences an examination of the matter Commission, after hearing the opinions which covers both dumping and injury expressed within the committee, (Article 10 (1)). The other provisions of considers this acceptable". Article 10 and those of Article 11 Regulation No 2011/73 of the Council regulate that examination. Article 10 (4) (Official Journal 1973, L 206/3) adds to provides that: "The Commission shall this the following provisions: provide opportunities for the "(d) Where the Commission finds that complainant and the importers and the undertaking of exporters is exporters known to be concerned ... to see all information that is relevant to the being evaded or no longer observed or has been withdrawn and that, as defence of their interests and not a result, protective measures might confidential within the meaning of be necessary, it shall forthwith so Article 11 and that is used by the inform the Member States and shall Commission in the anti-dumping recommence the examination of the investigation". facts in accordance with Article Articles 12 and 13 provide for an 10." advisory committee to be set up consisting of representatives of each The representatives of the exporting Member State with a representative of country and the directly interested the Commission as Chairman. Consul­ parties are informed of the termination tations cover in particular the existence of the proceeding which must, with and margin of dumping, the existence certain exceptions, be published in the and extent of injury and the measures Official Journal. appropriate to remedy the effects of Under Article 15 of Regulation (EEC) dumping. No 459/68, the Commission may take 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 terminated. Otherwise the Commission submits to the Council forthwith a report "on the results of the consultation" together with a proposal that the

respect of which payment is not claimed Importers who wish to show that but importers must provide security to products, although subject to anti­ that amount, "collection of which shall dumping duties, were not dumped, have be determined by the subsequent decision the means of administrative appeal of the Council under Article 17". (Article 19 (4)). Article 17 concerns the lot of the pro­ (b) Facts visional duty and provides as follows: By document of 15 October 1976, the "1. Where the facts as finally established Committee of the European Bearing show that there is dumping and Manufacturers' Associations, an injury, and the interests of the association at that time without legal Community call for Community personality whose members were the intervention, the Commission shall, three German, British and French trade after hearing the opinions expressed organizations submitted a complaint to within the Committee, submit a the Commission concerning dumping by proposal to the Council. Such Japanese roller bearing manufacturers. proposal shall also cover the matters After consultation with the Member set out in paragraph 2. States, the Commission decided on 9 2. (a) The Council shall act by a November 1976 to carry out an official qualified majority. Where Article anti-dumping investigation. It informed 15 (1) has been applied, the the Japanese mission of this and sent Council shall decide, subject to questionnaires to all the known the provisions of Article 15 (2), importers and exporters and published what proportion of the amounts the required notice in the Official secured by way of provisional Journal of 13 November 1976, C 268, duty is to be definitively p. 2. collected. When the replies to the questionnaires (b) The definitive collection of such had been received, the European and amount shall not be decided Japanese manufacturers met on 18 and upon unless the facts as finally 19 January 1977 so that each side could established show that there is put its views and arguments to the other. material injury (and not merely The Commission imposed a provisional threat of material injury or of material retardation of the anti-dumping duty of 20% on ball bearings and tapered roller bearings and establishment of a Community parts thereof originating in Japan by industry) or that such injury Regulation (EEC) No 261/77 of 4 would have been caused if pro­ visional action had not been February 1977 (Official Journal 1977, taken." L 34, p. 60), which was extended by Council Regulation (EEC) No 944/77 (Official Journal 1977, L 112, p. 1). Anti-dumping duties are imposed by regulation (Article 19 (1)). Article 20 (1) of Regulation No 459/68 provides, in accordance with Article 6 (b) of the General Agreement on Tariffs and Trade Anti-dumping Code, that the products referred to are described indicating the name of the supplier. Article 20 (2) provides that the only exception to this rule is where it is impracticable to name all the suppliers.

However the percentage was fixed at dumping duty of 15%, whose 10% for the products manufactured and application is however suspended. Article exported by Nachi Fujikoshi Cor­ 2 orders the Commission, in collab­ poration and Koyo Seiko Company oration with the Member States, to Limited. monitor the undertakings given by the In the meantime the Commission carried major Japanese producers to revise their out an investigation at the European prices, and provides that if the Commission finds that these under­ (French, British and German) sub­ sidiaries of the Japanese companies takings are being evaded, are not being observed or have been withdrawn, it during the months from February to April 1977. Because those subsidiaries shall forthwith, after consulting the were associated with the producer Member States within the Advisory companies, it based its calculations of the Committee provided for in Article 12 of Regulation (EEC) No 459/68, convened export prices on the "price at which the imported product is first resold to an within a period of five days, terminate independent buyer" (Article 3 (3)). the suspension of the application of the definitive duty. Because of the great variety of categories of products on the market it adopted for In application of Article 17 (2) (a) of each undertaking a sample of repre­ Regulation (EEC) No 459/68, Article 3 sentative products and determined the of Regulation No 1778/77 provides as average price. Finally, the prices follows: determined were reduced by fixed percen­ "The amounts secured by way of pro­ tages so as to reconstruct the export visional duty under the provisions of price to be adopted for the purposes of Regulation (EEC) No 261/77 extended comparison with domestic prices. by Regulation (EEC) No 944/77, in From 18 to 28 April 1977 an respect of products manufactured and investigation was held in Japan at the exported by the following producers, four major producers by a group of shall be definitively collected to the experts from the Commission with the extent that they do not exceed the rate collaboration of a chartered accountant, of duty fixed in this regulation: Koyo an expert from the United Kingdom and Seiko Company Limited; Nachi an expert from the Federal Republic of Fujikoshi Corporation; NTN Toyo Germany. Bearing Company Limited; Nippon Seiko K.K." From the end of May until the end of June 1977 meetings were held between Regulation (EEC) No 1778/77 was the Commission and the Japanese roller published in the Official Journal on 3 bearing producers on the possibility of August 1977 (L 196, p. 1). an undertaking as to prices. After four On the same date the Commission weeks of discussion the four major accepted the undertakings given by the Japanese producers signed on 20 June Japanese producers on 20 June 1977. 1977 undertakings that they would increase prices. On 26 July 1977 the Council adopted definitive measures by issuing Regulation (EEC) No 1778/77 concerning the application of the anti-dumping duty on ball bearings and tapered roller bearings, originating in Japan. Article 1 of Regulation (EEC) No 1778/77 imposes a definitive anti-

In those circumstances, Regulation Having heard the report of the Judge- (EEC) No 1778/77 is not justified. More Rapporteur and the views of the generally, the applicants claim that the Advocate General, the Court decided by dumping complained of has not been order of 12 April 1978 to reserve its sufficiently established in law and in decision on the objection of in­ accordance with the requirements both admissibility for the final judgment. of the rules of the General Agreement of On 30 November 1978 the applicants Tariffs and Trade and of the Community submitted: rules. (a) an application pursuant to Article 91 of the Rules of Procedure to strike (d) Procedure out part of the Commission's The application, dated 7 October 1977, rejoinder; was entered in the Court Register on 10 October 1977. On the same day, the (b) an application pursuant to Article 42 of the Rules of Procedure to allow applicants requested the Court to adopt interim measures. On 20 October 1977, the applicants to answer new issues the President of the Court of Justice raised by the Commission; ordered, as an interlocutory decision, (c) an application for production of inter alia that the application to the documents and supply of infor­ applicants of Article 3 of Regulation No mation by the Commission. 1778/77 should be suspended until the final judgment in Case 119/77, on Having heard the report of the Judge- condition that and for so long as the Rapporteur and the views of the applicant companies continued to Advocate General, the Court decided to provide security for the performance of reserve its decision on the procedural their obligations in the amounts which issues for the final judgment. they were required to pay in pursuance of the aforementioned Article 3 ([1977] Having heard the report of the Judge- ECR 1867). Rapporteur and the views of the Advocate General, the Court decided to Following its application, which was open the oral procedure without any entered on the Court Register on 17 preparatory inquiry. October 1977, the Federation of European Bearing Manufacturers' However, the Court requested the Associations (hereinafter referred to as parties to answer certain questions in "FEBMA") was allowed, by order of the writing. Court of 16 November 1977, to

II — Conclusions of the parties from the date or dates of actual payment of such sums by NSK UK, The applicants claim that the Court NSK Germany and NSK France should: respectively to the date of actual 1. Declare Regulation No 1778/77 void. repayment to NSK UK, NSK Germany and NSK France 2. Alternatively declare Regulation No respectively. 1778/77 void in so far as it affects the 6. Order the Council and/or the applicants or any one of them. Commission to make good the 3. Further or alternatively, declare Regu­ damage caused to the NSK European lation No 1778/77 void in so far as it subsidiaries and each of them by the purports to impose a definitive anti­ Council and/or the Commission or by dumping duty of 15% upon ball their servants in the performance of bearings and tapered roller bearings their duties, and in particular to pay originating in Japan. to the NSK European subsidiaries and 4. Further or in the further alternative, each of them compensation for declare Regulation No 1778/77 void damage in such sum or sums as this in so far as it purports to order that Honourable Court may decide the amounts secured by way of pro­ together with interest thereon at such visional duty by NSK UK, NSK rate or rates of interest and for such Germany and NSK France, in respect period as may seem just and equitable of ball bearings and tapered roller to this Honourable Court. bearings manufactured by NSK Japan 7. In any event, order the Council and exported to the Community, and/or the Commission to pay each should be definitively collected, of the applicants' costs hereunder. whether to the extent that the amounts do not exceed the definitive 8. Order such other relief as may be lawful or equitable in all the circum­ anti-dumping duty on ball bearings stances. and tapered roller bearings of 15% or at all. The Council and the Commission 5. Order the Council and/or the contend that the Court should: Commission to instruct the relevant 1. Declare the application to be competent authorities in the United inadmissible. Kingdom, the Federal Republic of Germany and France to repay to 2. Further or alternatively, dismiss the NSK UK, NSK Germany and NSK application. France respectively the sums of 3. Order the applicants to pay the costs. £ 69 320 (being the sum referred to in paragraph 122 (a) above), DM The intervener claims that the Court 1 860 986 (being the sum referred to should: in paragraph 122 (b) above) and FF 1. Declare the application to be 60 391 (being the net amount of duty, inadmissible. allowing for repayment of the excess paid, referred to in paragraph 122 (c) 2. Dismiss the application. above) respectively together in each case with interest thereon at such rate or rates of interest as may seem to this Honourable Court just and equitable in respect of the United, Kingdom, the Federal Republic of Germany and France respectively,

Moreover, Regulation No 459/68 Admissibility provides expressly that anti-dumping Application duties must be imposed by regulation. Because those duties are an instrument According to the applicants, there should be no dispute about their capacity to of commercial policy, the Council make this application. considers that a regulation has to apply to all actual or potential importers The applicants draw attention to the fact whether or not they are known or that Article 10 (2) and (6) (a) of Regu­ identifiable when the measures are lation No 459/68 refers to "interested adopted. parties", and Article 10 (6) (b) refers to "parties directly concerned", and that Regulation No 1778/77 is a genuine this is also true of Article 15. generally applicable measure of a legislative nature. Article 1 of that regu­ The Commission confined its on-the- lation provides for the application of a spot investigations to the applicants and definitive anti-dumping duty on certain to the other three groups of undertakings generally defined products originating in mentioned in Article 3 of the contested Japan. The fact that products are regulation. identified cannot prevent the regulation Furthermore, Article 20 of the basic regu­ from having a general normative lation, Regulation No 459/68, requires character (judgment of 5 May 1977 that the description of the product Koninklijke Scholten Honig v Council covered by the measure shall include the and Commission, Case 101/76 [1977] name of the supplier or suppliers unless it ECR 808). Paragraph (2) of Article 1 is "impracticable" to name all such suspends the duty quite generally. suppliers. Article 2 expresses the duties of the In particular, Article 3 of the contested Commission. By directing the regulation constitutes a decision adopted Commission to perform certain functions in relation to the applicants. and giving it appropriate power and According to the applicants, Regulation authority to exercise them the true No 1778/77 is the sanction used to nature of that article is legislative. enforce compliance by the applicants with the undertaking given by NSK Japan and referred to in Article 2 of the Regulation [see paragraph 76 of the application].

Article 3 is a general provision imposing The applicant importers are not anti-dumping duty and applies generally individually concerned by Article 3 of to products manufactured and exponed Regulation No 1778/77, because it by four named manufacturers. The manu­ applies generally to importers of the facturers are named because Article 8 (b) relevant products. The general character of the General Agreement on Tariffs and of that article is not affected by the fact Trade Anti-dumping Code requires the that the importers can be identified. The parties to the Code to ensure that the importers who are applicants in this case authorities should name the suppliers of are not the only importers who were the product concerned. The duty is required to pay the definitive duty. There payable quite generally by all importers are at least 260 such importers in the of such products and the fact that the Community. importers may be potentially identifiable The terms appearing in Article 10 (6) of would not affect the generality of the Regulation No 459/68 relied on by the regulation in question. applicants cannot affect the character of According to the Council, the Japanese the regulation which results from the exporters are neither directly nor investigation. individually concerned by the contested Moreover, Regulation No 1778/77 is regulation. The regulation imposes a not an individual sanction. suspended anti-dumping duty and The Council considers that the claim for provides for the definitive collection of provisional duty paid by the importers on damages is inadmissible (pp. 25 to 34 of the products concerned. Since that duty the defence). It emerges from the case-law of the Court that an action for is payable only by the importers, any effect that Regulation No 1778/77 may damages cannot be used as an alternative have on the exporters is indirect. to, or in aid of, an application for annulment. Nor is there anything in Regulation No Moreover, where the claim is for 1778/77 which individually concerns the exporters. As mentioned earlier, the fact restitution of sums paid to national auth­ orities, available national remedies must that the exporters are named in Article 3 be resorted to. merely serves to comply with the provisions of the General Agreement on According to the Council, the Court has Tariffs and Trade Anti-dumping Code no jurisdiction to order the Council or and to identify the products which the Commission to instruct the relevant accounted for all but an insignificant proportion of imports into the Community. As regards the importers among the applicants, the Council considers that they are not directly concerned by Articles 1 and 2 of Regulation No 1778/77. First, they cannot be directly affected by a duty which is imposed and then suspended by the same regulation. Secondly, to the extent to which Article 2 may involve the re-imposition of the duty, the importers are not directly concerned because the Commission's power is interposed between the suspension and the reimposition of the duty.

competent authorities in the Member In the applicants' submission, whether or States to repay the duties together with not the measure also has legislative interest. Accordingly, this claim by the aspects, it can be attacked by natural or applicants is inadmissible. legal persons if it has the aspects of a decision which is of direct and individual Supporting the submissions of the concern to them. Council, the intervener submits obser­ vations to the same effect. On the claim This character as a decision has to be for damages, it adds that this claim is determined by reference to the function inadmissible because, if a distinction is and object of the measure attacked. In drawn between the four applicants, it the present case the definitive duty is a relates to losses suffered by the three sanction which, by Articles 1 (2) and 2 of importers as a result of a voluntary Regulation No 1778/77, is directed in a undertaking given by the exporter. special way at the applicants and the three other major Japanese producers The objection of inadmissibility entered who gave undertakings (pp. 15 to 20 of by the Commission the applicants' document). The contested The Commission submits that all the regulation is of direct concern to the applicants, because Article 2 thereof does provisions of Regulation No 1778/77 are not confer a mere power on the of a legislative nature. Articles 1 and 2 of Commission. On the contrary, these the Regulation are neither of direct nor provisions oblige the Commission to of individual concern to the applicants. terminate forthwith the suspension of the Article 3 is not of direct concern to the application of the duty imposed by Japanese producers. The importers are Article 1. directly concerned, as a necessary consequence of the Commission's having The applicants argue that the identity of legislative competence in these matters. the person who actually pays the duty is However, Article 3 is not of individual not determinative of the identity of the concern either to the producers or to the persons who are directly affected by it. importers (pp. 2 to 10 of the defence). The applicants maintain that, by reason of the particular facts and matters set out The claim for damages is inadmissible, in the application and in the document because the duties are collected by the in answer to the objections of national authorities (p. 11 of the inadmissibility, all the applicants are defence). The Commission considers that directly and individually concerned by the claim for damages in respect of the contested regulation (pp. 23 to 32 of alleged loss of profits is also inadmissible. the document in answer to the objections This follows from the case-law of the of inadmissibility). Court (Case 96/71, Haegeman v Commission [1972] ECR 1005, at p. 1015). Moreover, the alleged losses are due to undertakings given by the applicants.

As regards the claim for damages by According to the Council, the applicants European subsidiaries of NSK seeking do not seriously contest that there are compensation for the loss which they remedies available to them under suffered as a result of their obligation to national law, although they raise doubts pay the provisional duty, the applicants as to their effectiveness or scope (pp. 30 state that the basis of this claim is not to 42 of the rejoinder). merely the invalidity of Regulation No The Commission points out that the 1778/77 but also the wrongful acts of essential characteristic of the contested the defendants [paragraph 90 of the regulation, as for any anti-dumping regu­ document in answer to the objections of lation, is that it imposes a measure of inadmissibility]. general application, applicable to all The applicants have not claimed imports by all importers of the specified repayment, but are claiming damages. products, in response to a specific Such a claim cannot be brought before situation. The regulation itself cannot be the national courts (pp. 44 to 56 of the challenged merely on the ground that the document in answer to the objections of Commission's findings concern the inadmissibility). applicants (pp. 3 to 17). The Commission maintains that the The objection that the loss is due to an claim for damages is inadmissible. As allegedly voluntary undertaking goes not regards the alleged loss of profit, the to the admissibility but to the substance of the case. Commission submits that the act causing such loss must be an act of the Community, otherwise a condition of the Rejoinders admissibility of the applications is not The Council does not accept that one fulfilled (pp. 29 to 36). and the same provision may both have a legislative character and nevertheless be The substance of the case regarded as a decision for the purpose of The applicants submit that Regulation Article 173. The applicants did not No 1778/77 should be declared void on consider the decisions of the Court grounds of lack of competence, which establish that a measure does not infringement of essential procedural lose its character as a regulation simply requirements, infringement of the EEC because it may be possible to ascertain Treaty and of rules of law relating to its with a greater or lesser degree of application and misuse of powers. accuracy the number of the persons to whom it applies [pp. 16 to 30 of the A — Failure to observe procedural rejoinder]. requirements According to the Council, the provisions In the course of the Commission's of Article 2 of the contested regulation investigation which led to Regulation No do not require any automatic action by 1778/77, the Commission failed to the Commission. The applicants have no observe the obligation imposed by Article legal interest in complaining about the 10 (4) of Regulation No 459/68 by conferment of a power which has not been exercised.

The Commission did not inform the There is no power under the basic regu­ applicants of factors on which the lation, Regulation No 459/68, for the Commission based its calculations of the Council to impose a definitive duty the margin of dumping (domestic prices in operation of which is suspended as Japan, export prices, methodology used regards the products of businesses which in the construction of export prices). have given undertakings within the meaning of Article 14 of the said regu­ The Commission also wrongfully applied lation. Either the Council can impose a the provisions concerning the con­ duty or the Commission can accept fidential information supplied by the undertakings: there is nothing in Regu­ Committee which lodged the complaint. lation No 459/68 which permits the Council to follow a third and different B — Inadequate and defective rea­ course of imposing a duty and then soning suspending its operation. Since the Commission's investigation and If undertakings are acceptable to the the conclusions thereof were carried out Commission, it should terminate the and drawn up in secret, the Council's proceeding or propose its termination decision which is based on the (paragraph 104 of the application). Commission's report should, in the applicants' submission, disclose the E — Discrimination between the matters which provided a basis for a exporters referred to in Article 3 finding that there was dumping and of the contested regulation injury. After providing in Article 1 of Regu­ From this point of view, there are lation No 1778/77 for an equal rate of important omissions in the reasoning of anti-dumping duty for all the Japanese Regulation No 1778/77 (paragraphs 88 undertakings concerned, the authors of and 89 of the application). the regulation discriminated by providing in Article 3 of the regulation for C — Fundamental errors of fact different percentages for the collection of the provisional duty (paragraphs 105 The Commission made certain and 106 of the application). fundamental errors of fact, and this affects the validity of the contested regu­ F — Misuse of powers lation. By requiring that the undertaking given In paragraphs 92 to 96 of the by NSK should be extended to NSK application, it is submitted that the UK's production in Great Britain, the Commission's findings of dumping are Commission exceeded its powers under not supportable. Regulation No 459/68; the Council was guilty of a misuse of powers in using the Moreover, the reasons on which the imposition of an anti-dumping duty to contested regulation was based did not state facts capable of showing that the alleged dumping was the principal cause of the injury suffered by the Community industry. There were other factors which probably caused the recession in the Community industry (paragraphs 97 to 100 of the application).

producers. of a suspended definitive duty has the merit of not rendering nugatory the G — Compensation for damage extensive investigations already carried out, should a breach of the undertaking In paragraphs 119 to 126 of the given be committed later. application, the applicants claim that they have suffered damage as a result of If no regulation imposing a definitive the action of the Council and the duty had been passed, the only course Commission, and claim compensation open to the Commission in the case of therefor in accordance with the any failure to comply with the under­ provisions of Articles 178 and 215 of the taking would have been a complete recommencement of examination of the Treaty. facts pursuant to Article 14 (2) (d) of Defence of the Council and observations of Regulation No 459/68 (added by the intervener Council Regulation No 2011/73). According to the Council and the B — Reasoning intervener, Article 14 (2) (d) deals only The Council and the intervener submit with a situation in which an undertaking that in stating the reasons on which a was given and accepted during exam­ ination of the matter and in which measure is based, the Council must have regard to the circumstances in which that proceedings were terminated. measure was adopted. In this case regard In the present case, however, none of the must be had to (a) the extensive conditions was fulfilled under which the investigations conducted by the proceedings had to stand terminated or Commission and (b) the limitations under which the Commission was bound imposed on the Commission by the to submit a proposal to terminate the applicants and all other Japanese proceedings. exporters and by the EEC industry in In the Council's submission, first, the relation to confidentiality of information. undertaking offered at the end of the examination of the matter did not In paragraphs 42 to 45 of its defence, the Council makes observations on the eliminate the margin of dumping for the alleged omissions in the statement of period prior to July 1977 and only went reasons for Regulation No 1778/77. some way to eliminating the margin for the period following. C — Fundamental errors of fact Secondly, the Commission did not accept (paragraphs 46 to 50) the undertaking unreservedly. The under­ According to the Council and the takings were accepted only in the intervener, the Commission was entitled to take the view that the actual export prices were unreliable because of "association" (Article 3 (3) of Regu­ lation No 459/68). Having found that the principal cause of injury was the

context of the adoption of Council Regu­ mation to the Commission, or matters lation No 1778/77 and after examination which were set out in the legislation of the matter had been completed. which the applicants knew the Commission to be applying (paragraphs E — Discrimination 99 and 100). According to the Council and the The Commission did not rely upon the intervener, the laying down of duties information supplied by the having a different rate did not constitute complainants. It conducted an discrimination. Any allegation involving independent inquiry, and its information in effect an attack on the validity of was not relevant to the defence of the Regulation No 261/77 is misconceived. applicants' interests. Thus the Commission could not infringe the F — Misuse of powers provisions concerning .. confidential treatment of certain information (Article The Council points out that the under­ 11 of Regulation No 459/68) taking was freely offered and accepted. No undertaking without Article 5 would Reply of the applicants have been accepted, because it was. necessary to minimize the risk of evasion In the reply, the applicants begin by of the undertaking through disguised complaining that in their defences the Council and the Commission did not dumping or through imports from other parts of the world. give any facts or figures relating to vital matters, or evidence or documents G — Compensation for damage capable of supporting the inferences in the contested regulation, but confined By the very formulation of their claim, themselves to generalities. In the the applicants in effect admit that such a applicants' submission, the defences claim can be made only to the national impliedly admit certain particularly authorities. significant facts and matters (paragraph 7). Defence of the Commission The Council mistakenly contends that First of all, the Commission gives a the obligation to preserve confidentiality survey of the bearings market in Japan precluded it from publishing more and in the EEC. Then it gives a long extensive reasons in Regulation No statement of the history of the matter 1778/77. This is in contradiction with (paragraphs 44 to 95). the position adopted by the Commission The Commission concurs with the point during the investigation, to the effect of view defended by the Council, but that the information and calculations on

positions of the Japanese and European should be provided for those concerned bearings industries and a commentary on "to see all information that is relevant to the defendants' account of the history of the defence of their interests". the matter (paragraphs 12 to 63), the reply goes on to discuss the specific B — Reasoning heads of complaint. The Council cannot rely on the alleged nature of the contested measure as a A — Failure to observe procedural regulation to evade its obligation to give requirements an adequate statement of reasons for the During the inquiry, the Commission measures adopted in this case. Since the refused to disclose essential facts. The basic regulation requires a finding both applicants did not know whether the of dumping and of injury, the Council Commission was basing its calculations cannot confine itself to ..vague and on the prices of all or only some, and if general "evaluations" but must state the facts and calculations on which it based so which, of the 54 types taken into itself. account. The applicants also did not know that the export prices were When the Council contends that the considered unreliable merely because of reasons given are sufficient so that the the association between importers and "reasoning which has led" to the exporters. The Commission did not (save measure being made "may be in the preamble to Regulation No understood", it should be answered that 261/77) give the applicants any expla­ the reasons must justify that reasoning. nation for treating the export prices as Moreover, the reasons did not justify the unreliable. fact that in its investigation the At a meeting of the anti-dumping Commission based itself, with regard to Committee of the General Agreement on export prices, on the sales to the first Tariffs and Trade, a representative of the independent buyer. No reasons were Commission told a representative of the given for the fact that, owing to this Japanese Government that the method of calculation, the domestic Commission could not give the applicant prices in the first half of 1976 were in the calculations until the final decision, fact compared with the (constructed) thereby implying that it could and would export prices in the second half of 1975, do so afterwards. Again, at the meeting a fact capable of falsifying the whole on 1 April 1977 (see paragraph 58 of the comparison. application), the excuse of the Commission's representative for not giving the Japanese producers details of the basis of the dumping margin calcu­ lations was that such details could not be disclosed during the period in which provisional duty was being levied. The Commission cannot justify its refusal to disclose material information in this way. The statement in the defences that the applicants could infer the case against them from the questions asked them in the course of the investigation, does not fulfill the requirement in Article 10 (4) of the basic regulation that opportunities

Finally, it is unclear how the figure of Nor can Article 2 of Regulation No 15% for the alleged margin of dumping 1778/77 be regarded as a "general was arrived at, or why this percentage dispensation" under Article 19 (4) of the corresponds to the injury allegedly basic regulation. suffered by the Community industry. Article 113 of the EEC Treaty cannot be The recitals in the preamble to Regu­ relied upon to extend the Council's lation No 1778/77 do not provide any powers beyond those provided for in the relevant reason justifying the adoption of basic regulation. At most, that article Article 2 of that regulation, as the could justify an amendment of the basic reasoning is essentially restricted to the regulation. use of the words "in the circumstances". According to Article 14 (2), an under­ C — Errors of fact taking which the Commission considers acceptable should lead to-termination of The applicants dispute the Council's the proceeding. The acceptance of under­ contention that the Court should not takings of this kind is incompatible with examine the detailed investigations the imposition of definitive duties. carried out by the Commission but should restrict itself to examining The applicants formally deny the Council's contention that NSK's under­ whether the evaluation made by the Commission contains a patent error or taking did not eliminate the margin of constitutes a misuse of powers. dumping, and submit that that contention is not supported by any facts However, in applying the basic regu­ or relevant considerations. lation, the Commission must make a finding both of dumping and of injury, In paragraphs 136 and 137 the applicants and these findings must be able to be deny the contention that the Commission challenged and completely examined by did not accept the undertaking unre­ the Court. servedly but accepted it only after exami­ The contested regulation did not provide nation of the matter had been completed. any element of justification in particular E — Discrimination as regards the question whether the injury caused by the Japanese imports is The applicants maintain that Article 3 of due to dumping and the question the contested regulation involves whether the anti-dumping duty imposed unlawful discrimination contrary to the exceeds the extent of the injury. principles of the law and in particular the principle of equality of treatment D — Other infringements of the (paragraphs 138 to 142). provisions of Regulation No 459/68

The applicants state that the under­ According to the Council, a dumping takings given by the producers were not investigation in the course of which "freely" offered, but were accepted on judgment and discretion clearly have to the insistence of the Commission. They be exercised (see, for example, Article 4 maintain in particular that the inclusion (2) and (3) of Regulation No 459/68) of NSK UK in the undertaking falls precisely within that category of cases in which the Court has said that it constituted a misuse of powers. will not substitute its own evaluation and Finally, the applicants briefly state that will restrict itself to examining whether they persist in their claim for there is any patent error or a misuse of compensation for the damage which they powers. claim to have suffered, in particular with As to whether the injury caused by regard to NSK UK. Japanese imports is due to dumping, the Council once again emphasizes that it is Rejoinder of the Council not incumbent on it to produce to the In its rejoinder, the Council observes first Court, merely because a regulation is of all that in fact it did not at all make challenged, the totality of the evidence certain arguments which the applicants collected during a dumping investigation. say it raised "by implication". It is in any event absurd to suggest that the mere fact that material was not B — Reasoning annexed to the case-files demonstrates that there was no evidence. The Council maintains that a regulation may be generally reasoned even where it In the Council's view, the question is is specific in nature. However, Regu­ whether the duty should be less than the lation No 1778/77 is quite general. margin of dumping found. The answer is There was no obligation on the Council in the affirmative only if such lesser duty to produce in the reasoning of that regu­ would be adequate to remove the injury lation all the "evidence" on which the of which the dumping was the principal Commission acted. cause, but the answer is in the negative if a lesser margin would not be adequate to According to the Council, the correct remove the injury (not part of the injury) comparison is between the price of goods of which the dumping was the principal on the domestic market and the price at cause.

D — Other infringements of the necessary in order to prevent an exporter provisions of Regulation No to the Community from dumping goods 459/68 through its "limbs". The Council accepts that there are no express words in Regulation No 459/68 G — As regards the claim for providing for the power to suspend a compensation for damage, the Council refers to its defence. definitive duty. However, the Council considers that the fact that there are no In its observations, the intervener adds to express words to this effect should not its earlier obervations concerning the preclude the Court from accepting that Japanese and European bearings there was such power. If there is a power markets, in order adequately to define to impose and make effective a definitive the context of the dispute. duty, there is no necessity for there to be express words providing a general Rejoinder of the Commission dispensation, which would be an obvious After pointing out that, as regards the method of giving effect to the provisions Court's review, there can be no analogy and intent of Article 19 (4) of Regulation between anti-dumping measures and No 459/68. decisions taken under the competition As to the interpretation of Article 14 (1) rules, the Commission surveys the history and (2) of Regulation No 459/68, the of the matter (paragraphs 114 to 184). Council persists in the point of view It states that the margins of dumping which it defended in its defence. It adds which it established are amply justified that the date when the examination by the results of its investigation, and ended was immediately prior to the that the rate of duty imposed is moderate Commission's proposal going to the in relation to the injury found. Council on 4 July 1977. The Commission states that the inquiry The 17th recital in the preamble to the began in November 1976 and ended in contested regulation states that "the four June 1977. The applicants were not major Japanese producers have given prepared to start serious discussions undertakings to the Commission to about undertakings until 24 May 1977 revise their future prices". and did not sign the undertakings until The Council maintains that in fact the 20 June 1977. Moreover, the undertakings were accepted only in the Commission's representatives informed context of the adoption of Regulation the applicants at an early stage that, No 1778/77. since time was necessary for the Commission to prepare its proposal to E — Discrimination the Council in the light of the opinions The Council maintains that by virtue of Article 19 (3) of Regulation No 459/68, the collection of the provisional duty could not exceed 10% as regards Nachi and Koyo. The Council emphasizes that the applicants did not proceed under Article 19 (4) of Regulation No 459/68.

Decision

1 By application of 7 October 1977, received at the Court Registry on 10 October 1977, the applicants, Nippon Seiko K.K. (hereinafter referred to as "NSK"), NSK Bearings Europe Limited, NSK Kugellager GmbH and NSK France (hereinafter referred to as "the subsidiaries") brought before the Court of Justice under Article 173 of the Treaty an action against the Council and the Commission on Council Regulation (EEC) No 1778/77 of 26 July 1977 concerning the application of the anti-dumping duty on ball bearings and tapered roller bearings, originating in Japan (Official Journal 1977, L 196, p. 1).

2 The action is primarily for the annulment of Regulation No 1778/77, in the alternative for its annulment in so far as it affects the applicants and, in the further alternative, for the annulment only of Article 3 of the Regulation, which provides for the definitive collection of the amounts secured by way of provisional duty.

JUDGMENT OF 29. 3. 1979 — CASE 119/77

3 By the same application, the applicants claimed under Articles 178 and 215 of the Treaty that the Council and the Commission should be ordered to make good the damage allegedly suffered by the subsidiaries.

4 By application of 17 October 1977 the Federation of European Bearing Manufacturers' 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 16 November 1977.

NIPPON SEIKO v COUNCIL AND COMMISSION

The admissibility of the application for annulment

9 The defendant institutions have raised an objection of inadmissibility claiming that the contested measure is a regulation and that the applicants are therefore not entitled to request annulment of it under the second paragraph of Article 173 of the Treaty. They claim that in the present case this is not a decision adopted in the guise of a regulation since Regulation No 1778/77 in fact constitutes a general rule which affects all the products in question originating in Japan and which must, according to Article 19 (1) of Regulation No 459/68 of the Council of 5 April 1968 on protection 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), be adopted in the form of a regu­ lation.

12 Regulation No 1778/77 contains essentially three provisions:

(i) Article 1 imposes a definitive anti-dumping duty of 15% on the products in question originating in Japan and suspends the application of that duty without prejudice to Article 2;

(ii) Article 2 regulates the monitoring of the undertakings given by the major Japanese producers and empowers the Commission to terminate the suspension of the application of the duty if it finds that these under­ takings are being evaded, not being observed or have been withdrawn;

(iii) Article 3 provides, in respect of the products manufactured by the major producers, for the collection of the amounts secured by way of prov­ isional duty in application of the imposition by previous regulations of a provisional duty.

For the purpose of judging the admissibility of the application, these three articles should be examined separately.

13 It emerges from the two recitals before last in the preamble to Regulation No 1778/77 that Article 1 (2) provides for the suspension of the definitive anti-dumping duty because "the four major Japanese producers have given undertakings to the Commission to revise their future prices". "Whereas, however, it is necessary that the Commission closely monitor the observance of the undertakings and take immediate action if there is any violation or evasion or if the undertakings are "withdrawn", it is provided in Article 2 of the regulation that "the Commission shall, in collaboration with the Member States, closely monitor the observance of the undertakings given by the major Japanese ... producers to revise their prices" and that it "shall forthwith ... terminate the suspension" if it finds "that these undertakings are being evaded, are not being observed or have been withdrawn". It

14 As regards the admissibility of the application in so far as it. is directed against Article 3, that article constitutes a collective decision relating to named addressees. Although the collection of the amounts secured by way of provisional anti-dumping duty is per se of direct concern to any importer who has imponed 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 imported the products manufactured by the four major Japanese producers named in that article. The allegation of the defendant institutions and the intervener that only implementing measures adopted by the national authorities are of direct concern to the importers and that these importers shall 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.

15 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 NSK products, are admissible. As a result the application lodged by NSK against that article is also admissible.

JUDGMENT OF 29. 3. 1979 — CASE 119/77

The substance of the application for annulment

16 As regards Articles 1 and 2 of Regulation No 1778/77, the applicants claim in substance, amongst other complaints against the reasoning on which that regulation is based and the procedure which led up to it, that Regulation No 459/68 does not permit a definitive anti-dumping duty to be imposed at the same time as undertakings by the producers concerned to revise prices are accepted.

NIPPON SEIKO v COUNCIL AND COMMISSION

(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 exponers 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 exponers shall auto­ matically lapse unless the exponers state that it is not so to lapse.

(c) The fact that exponers 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 exporters 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.

(e) The provisions of Article 18 (1) shall apply mutatis mutandis to the undertakings given by exporters on the basis of this article. Any modification of such undertakings shall be made in accordance with the procedure laid down in this article."

19 On the other hand, where the procedure of examination of the matter is continued, Article 17 of that regulation provides as follows:

21 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". As has been pointed out above, the same undertakings were referred to by the Council both in the recitals in 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.

22 On the contrary, under the above-mentioned Article 14 an undertaking by an exporter to revise his prices leads to termination of the proceedings so that it is impossible to apply Article 17 of Regulation No 459/68. By specifying that termination of the proceedings 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

25 The application is therefore well founded in this respect.

26 As regards the application in so far as it is directed against Article 3 of Regu­ lation No 1778/77, in the circumstances the judgment on Article 3 is the same as that on Articles 1 and 2 of the regulation. If the result of the under-

JUDGMENT OF 29. 3. 1979 — CASE 119/77

takings 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.

27 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 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).

28 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.

JUDGMENT OF 29. 3. 1979 — CASE 119/77

33 Secondly the applicants claim that they have suffered loss of sales, and hence of profit, owing to the allegedly unlawful requirements imposed on them by Article 5 of the undertaking given by NSK to revise its prices. That article obliges NSK to take the necessary steps to extend the revision of prices which it undertook to apply to its products of Japanese origin to its products of origin other than Japanese, and this makes it increase even the prices of products manufactured within the Community, in particular in the factories of the subsidiary NSK Bearings Europe Limited.

34 The applicants have succeeded in their action for annulment because of the undertaking given by NSK and accepted by the Commission. Therefore they cannot rely upon the alleged unlawfulness of that undertaking in order to call in question the liability of the Community.

35 Accordingly the action for damages must be dismissed.

Costs

36 NSK has succeeded in its application for annulment. On the other hand, the action for damages has been dismissed.

hereby:

1. Annuls Council Regulation No 1778/77 of 26 July 1977 concerning the application of the anti-dumping duty on ball bearings and tapered roller bearings, originating in Japan;

2. Dismisses the action for damages;

3. (a) Orders the defendants to bear their own costs, all the costs in connexion with the application for the adoption of interim measures in this case and two-thirds of the costs of the main action incurred by the applicants, except for those caused by the intervention.

(b) Orders the intervener FEBMA to bear its own costs and two- thirds of those incurred by the applicants on account of its intervention.

Kutscher Menens de Wilmars Mackenzie Stuart Donner Pescatore