C-260/85

Following a complaint lodged by the Committee of European Typewriter Manu­ Under the Basic Regulation, a product is facturers ('Cetma'), an organization repre­ defined as having been dumped if its export senting substantially all Community price to the Community is less than the producers of electronic typewriters, the normal value of the like product (Article Commission initiated an anti-dumping 2 (2)), and the Community may impose an proceeding concerning imports into the anti-dumping duty under the following Community of electronic typewriters orig­ basic conditions. On the one hand, it must inating in Japan, made by a number of establish normal value (Article 2 (3) to (7)), companies including Tokyo Electric it must establish export price (Article 2 (8)), Company Ltd ('TEC').

TEC v COUNCIL

By an application lodged on 19 August 1985 TEC and its subsidiaries TEC Belgium SA Under the Basic Regulation (Article 11 (5)), of Belgium ('TEC Belgium'), TEC provisional duties have a maximum period Elektronik GmbH of the Federal Republic of validity of four months, renewable under of Germany ('TEC Germany'), TEC certain conditions for a further period of Europe Company Ltd of England ('TEC two months. The Provisional Duty Regu­ UK') and TEC France SA of France ('TEC lation (Article 3) applied for a period of France') brought an action (Case 260/85) four months from 23 December 1984 unless against the Council claiming that the Court the Council adopted definitive measures should:

OPINION OF SIR GORDON SLYNN — JOINED CASES 260/85 AND 106/86

(a) annul Articles 1 and 2 of Council Regu­ far as it applies to electronic typewriters lation No 1698/85 in so far as they manufactured by TEC , and (b) costs. The apply to electronic typewriters manu­ arguments raised in that case are in factured by the applicant; substance identical to those raised in Case 260/85, except that the Council contends that the case is inadmissible for duplication and lack of any separate argument directed specifically against Regulation No 113/86. (b) order the Council to pay the costs. It therefore asks for its costs in any event. The Court joined Cases 260/85 and 106/86 by an Order of 11 March 1987.

TEC v COUNCIL

In the Provisional Duty Regulation a profit TEC advances four grounds of annulment. margin of 10% was 'considered to be They concern: reasonable' (Recital 16) but, as the

OPINION OF SIR GORDON SLYNN — JOINED CASES 260/85 AND 106/86

TEC is not content with that explanation and argues: (a) A profit margin as high as 47.92% cannot possibly constitute a 'reasonable margin of profit' nor a 'normal profit' within the sense of Article 2 (3) (b) (ii) of the Basic Regulation; (b) The use of a 47.92% profit margin The basic question here is whether it is a violates the rule laid down in Article proper way of constructing normal value to 2 (3) (b) (ii) that the addition for profit take one company's actual profit margin on

TEC v COUNCIL

domestic sales or where such sales do not the Commission took the lowest of the three permit a proper comparison. A way of margins (47.92%) which is a more constructing normal value which brings it favourable hypothesis for the company closer to actual domestic prices is in line concerned and is therefore a fortiori within with that purpose. The texts (Article the Commission's power of appraisal. 2 (3) (b) (ii) of the Basic Regulation, which in this respect closely follows Article 2 (4) of the Code) provide for the inclusion in the constructed normal value of a reasonable amount for profit and provide that as a general rule the addition for profit should not exceed the normal profit (if there is one) on sales of products of the same general category on the domestic market of the country of origin.

If the Commission found that Japan in numbers too small to provide a sales of electronic typewriters on the statistically reliable basis. That suggestion Japanese market normally gave rise to falls in my view to be rejected. The models profit, I consider that it was in accordance were sold in relatively substantial numbers, with the wording of Article 2 (3) (b) (ii) of and the Community authorities used profit the Basic Regulation for such profit to be figures from sales on the Japanese domestic taken into the construction of normal value market only where those sales exceeded 5 % for companies which did not have sales on by volume of exports to the Community, a the Japanese market. threshold introduced precisely in order to safeguard legal certainty (Recital 4 to the Definitive Duty Regulation).

OPINION OF SIR GORDON SLYNN — JOINED CASES 260/85 AND 106/86

be used in constructing normal value, quences of the alleged breach have to be pursuant to the penultimate sentence of considered. TEC asserts that the conse Article 2 (3) (b) (ii). (In other cases the quences are that an exporter would never Commission has power under the last know how to set its prices so as to avoid sentence of that provision to determine the dumping and would find it impossible to profit margin 'on any reasonable basis', take steps so as to avoid dumping. That is although that is not the present case.) not wholly accurate. There will necessarily Nowhere in the provision is there any come a point at which the exporter is made requirement on the Commission to continue aware that a finding of dumping is possible, using a hypothetical profit margin once a and he can then offer to raise his prices so 'normal profit' has been established. as to eliminate the dumping: Article 10 of Moreover, to do so would risk creating the Basic Regulation. If he is too late to inequality between the cases where normal come within the time specified in Article value was constructed (using a hypothetical 10 (1), he may still raise his prices volun profit margin of, say, 10%) and those tarily and request a review of the anti where it was based on domestic sales price dumping regulation under Article 14 of the (with a margin of between 47 and 71%). Basic Regulation.

TEC v COUNCIL

margin on sales in the domestic market and not 'reasonable' as required by the first attribute it to another company not having sentence of Article 2 (3) (b) (ii) of the such sales for the purpose of constructing Basic Regulation, as well as Article 2 (4) of the normal value of its products. The next the Code. They lay down in detail what is question is whether the particular profit to be understood as 'reasonable' and it is margin attributed to TEC was correctly apparent from their terms and purpose that determined. a validly ascertained actual profit margin on domestic sales is the primary example of what is to be considered 'reasonable'. As the 16th Recital to the Definitive Duty Regu­ lation says, 'no profit margin can be more reasonable to use than the actual margin'.

Since, on this view, the 'normal profit' realized on the domestic market was validly I conclude on this point therefore that the ascertained, there can be no question that 47.92% profit margin attributed to TEC the margin of profit was so high that it was was validly ascertained.

OPINION OF SIR GORDON SLYNN — JOINED CASES 260/85 AND 106/86

In view of products. Target sales prices were used this fundamental distinction, the system of because actual prices realized by the Basic Regulation (and the Code) does Community producers had been depressed not require any correlation between the by the low prices of Japanese imports estimate of profit on Community products (Recital 33). Since the target sales price was used in the injury finding and the margin of a wholly notional one the profit margin profit used in constructing the normal value included in it could only be an estimate: of TEC's products. This argument must unlike the situation with normal value, there therefore be rejected. were no actual sales at full price on the Community market which could be used for the purpose. Since the actual profitability of Community industry during the investi gation period was below a level at which the existence of the industry could be guaranteed (Recital 31) the Commission had to fix a notional profit figure at a level adequate for such an industry to continue to

The Council asserts that TEC was given all the information to which it was entitled under these provisions. That assertion is borne out by copies of telexes and letters produced to the Court, which show that TEC was given the profit margin used, then at its request was given further Moreover, in the system both of the Basic information about the models used, the Regulation and of the Code, the ascer individual profit margins found, the quan-

I consider this unpersuasive. For the reasons given above, I consider that it was compatible with Article 2 (3) (b) (ii) of the Basic Regulation to use the lowest profit Finally, it is asserted that the Council and margin found in the actual sales on the Commission have discriminated against Japanese market for the construction of TEC and in favour of Nakajima as regards normal value. It is established that normal the 'reasonable margin of profit' used in the value had to be constructed for Nakajima. I construction of normal value. Discrimi­ am not satisfied that the structure of the nation consists in treating similar situations company should alter the basis adopted for differently or different situations similarly. estimating profitability in constructing that In the Definitive Duty Regulation a profit normal value, so as to justify using a margin of '32.39% on turnover' was used to different margin from that used for the construct the normal value of TEC's other exporters including TEC . However, I products: in Decision 86/34 a profit margin do not find it necessary to express a

OPINION OF SIR GORDON SLYNN — JOINED CASES 260/85 AND 106/86

(d) The only SGA expenses to be taken into TEC's second ground of annulment account under Article 2 (3) (b) (ii) for concerns the other component of purposes of establishing the constructed constructed normal value, the cost of value of the product under con­ production. In that regard, TEC alleges that sideration are those relating to such in including in the cost of production of product, not those relating to sales of TEC products an amount for selling products other than the product under expenses at a level of trade beyond the consideration. ex-factory level and relating to sales of products other than that under consideration, the Community authorities have incorrectly applied the Basic Regu­ lation in the following respects. Electronic typewriters, up to now at least, are made with alphanumeric keyboards (i. e. with arabic numbers and roman letters) but not with Japanese characters. Unlike many (a) The approach used by the Community other products, therefore, (e.g. ball­ authorities to inflate the cost of bearings) they are not saleable in the same production of TEC electronic type­ way both in Japan and in the rest of the

TEC v COUNCIL

In such circumstances little sacrifice is likely Equally, if it were possible for an exporter to be involved in a manufacturer refraining to escape a finding of dumping merely by from making any sales of the product on his refraining from marketing his product on home market. his domestic market, the legislation would largely be rendered a dead letter. That, it seems to me, would be the effect of upholding TEC's argument. TEC did not make any sales of electronic typewriters in Japan, but both the Code and the Basic Regulation provide for the construction of a normal value precisely to allow an anti­ TEC argues that it is a wrong approach to dumping proceeding to go ahead effica­ construct normal value as if sales had ciously inter alia in such circumstances. actually taken place on the domestic market. Constructed normal value includes a That argument I would reject. If that had 'reasonable' amount for cost of production, been the intention, the legislation need have and what is 'reasonable' must perforce be provided only for the use of 'domestic price' ascertained by reference to the circum­ as the term of comparison with export price. stances where sales are actually made in the The fact that both the Code and the Basic normal course of trade on the domestic Regulation take the wider concept of market. To construct normal value in this 'normal value' shows a recognition by the respect 'as if' sales had actually taken place authors that the concept of 'domestic price' on the domestic market seems to me not was too narow and an intention to adopt a only within the powers of the Community wider concept capable of catching a broader authorities but the most obvious way of range of situations with a view to ensuring complying with the Basic Regulation. the efficacity of the legislation. The basic Moreover, it has the advantage of applying notion none the less remains that of similar criteria to those manufacturers with domestic price. This follows from the relevant sales on the domestic market and historical evolution of the legislation and those without, and thus avoiding the risk of from its present structure, e. g. the order of discriminating between them. Apart from the subparagraphs of Article 2 (3) of the the risk of discrimination which it thus

In view of the foregoing analysis I do not consider it possible to sustain the argument, advanced by TEC , that constructed normal value concerns the value of the product sold TEC argues that the selling costs of its sales for export. It does not. It concerns the value company TEC Electronics should not have of the product envisaged in relation to the been used for this purpose. That argument domestic market. Council Regulation No must, in my view, be rejected. First, all three 789/82 (Official Journal 1982, L 90, p. 1; companies in the present series of cases the 'Turkish cotton yarn regulation') is of which made sufficient numbers of domestic no assistance to TEC here. In that case the sales for them to be used as the basis for Community authorities lacked reliable data normal value (Brother, Silver Seiko and on sales on the domestic market and for the Canon) did so through their respective asso­ purpose of constructing normal value had to ciated sales companies. Secondly, TEC sold fall back on what information was available, other electronic products which it did sell in to that end extrapolating from expenses Japan, through TEC Electronics. There was connected with exports. That solution was good, or at any rate sufficient, reason to dictated by the particular circumstances of suppose that, if it had sold electronic type­ the case and does not support the broader writers in Japan, TEC would have done so principle contended for by TEC . Moreover through TEC Electronics. The hypothesis those special circumstances are not shared was not only within the discretion of the by the present case, so that it cannot be Community authorities, but on the evidence argued that the same approach should be before the Court appears the most likely adopted here. one.

course of trade unless the Community auth obvious that an ex-factory price includes all orities are satisfied that the prices and costs of these and not just the bare cost of the involved are comparable to those involved production line and the components, and in transactions between parties which have Article 2 (3) (b) (ii) provides for them to no such link'. It follows that the relevant be included. If by chance an undertaking sale price for establishing normal value splits up its manufacturing and its marketing would not be the transfer price from TEC activities between different companies in the to TEC Electronics but the price on the first same group, that cannot prevent this rule arm's length sale, that from TEC Elec from operating. Such a peculiarity of tronics to an independent buyer. For the corporate structure does not bring down a Community authorities to construct normal curtain at the gate of the manufacturing value on that hypothetical basis is in company, beyond which the Community accordance with Article 2 (7). authorities are not allowed to look.

I reject the argument that the selling price of the parent company to its subsidiary sales company (be I also reject the argument that SGA it a hypothetical or an actual price) must expenses must be treated in the same way in necessarily be taken as the 'ex-factory price'. constructing normal value as in constructing Quite apart from the exclusion of transfer export price. The two operations are prices as a basis under Article 2 (7) of the different: constructing normal value is Basic Regulation, such an argument is essentially an addition, adding up various contrary to the provisions of Article production costs and an amount for profit

OPINION OF SIR GORDON SLYNN - JOINED CASES 260/85 AND 106/86

comparison of normal value and export to products other than electronic typewriters price at the same level of trade, but it cannot, in my opinion, be upheld. Article cannot be read as requiring in the 2 (3) (b) (ii) of the Basic Regulation construction of each of them SGA expenses requires a 'reasonable amount' for SGA to be dealt with in the same way. The Court expenses to be included in constructed so held in the 'Mini ball-bearing' Cases, see normal value. The words cited obviously e. g. Case 258/84 Nippon Seiko v Council, give the Community authorities a margin of cited above, at paragraphs 14 to 18 and 44. discretion in assessing that amount. It would Those judgments make it clear that Article be alien to the purpose of Article 2 (3) to (7) of the Basic Regulation lays 2 (3) (b) (ii) to hold that SGA expenses down one set of rules for ascertaining could only be used where they related to normal value, Article 2 (8) another set for sales by the exporter of the actual product ascertaining export price and Article 2 (9) concerned, because by definition it provides and (10) another set for carrying out the for the construction of normal value in the comparison. They are three distinct bodies absence of such sales. TEC Electronics did of rules, each of which has to be fulfilled sell other electronic products, cash registers separately. (The Code also treats the three and scales, and the SGA expenses incurred matters separately: see Article 2 (4), (5) and on them may in my view serve as a guide to (6)). In particular Articles 2 (9) and (10) of the SGA expenses that would have been the Basic Regulation concern allowances to incurred on electronic typewriters had any be made only after normal value has been been sold. No cogent evidence has been established according, in this case, to Article adduced to show that they gave a substan­ 2 (3) (b) (ii) and (7). tially wrong guide as to the SGA expenses that would have been incurred had TEC actually sold electronic typewriters in Japan, and I conclude that it has not been demon­ strated that the Community authorities have exceeded their powers in this respect.

Article 2 (11) of the Basic Regulation Ground 3: the treatment of the selling costs provides: 'In general, all cost calculations of TEC France shall be based on available accounting data, normally allocated, where necessary, in proportion to the turnover for each product and market under consideration.' I take this to apply inter alia to the mode of calculating TEC's third ground of annulment concerns export price under Article 2 (8). the calculation of the export price for its products. Where its exports were made to its subsidiaries in the EEC, export price was constructed, pursuant to Article 2 (8) (b) of the Basic Regulation, 'on the basis of the prices at which the imported product was I take Article 2 (8) to mean that, in the case first resold to an independent buyer, of electronic typewriters which TEC sold suitably adjusted to take account of all costs through its subsidiaries TEC Belgium, TEC incurred between importation and resale, France, TEC Germany and TEC UK, the including all duties and taxes' (Recital 20 to Community authorities were entitled under the Definitive Duty Regulation). Article 2 (8) to construct the export price on the basis of the price charged on the first resale to an independent buyer, and that is what they did: Recital 20 to the Definitive Duty Regulation. In thus constructing the TEC argues in this connection that the export price, the Community authorities had definitive dumping determination is vitiated to make allowances for 'all costs' incurred by an error in the allocation of the selling between importation and resale. Where one costs of the TEC subsidiary in France and of the TEC subsidiaries sold goods other by the imputation of the incorrectly than electronic typewriters subject to the calculated selling costs of that subsidiary to anti-dumping proceeding, their selling costs the TEC subsidiaries in Germany and the fell to be apportioned between those other United Kingdom. The first limb of this goods and the typewriters. In that argument is that the Commission has connection Article 2 (11) of the Basic refused to correct an error in the allocation Regulation lays down that in general the of the selling costs of TEC France. available accounting data is normally to be

allocated in proportion to the turnover for in the calculation were located in branch each product under consideration. offices and were engaged exclusively in sales of electronic scales to end-users. Excluding the cost of such staff, TEC calculated the SGA expenses of TEC France at 16.97%. TEC repeated the submission in a letter to the Commission of 10 May 1985. The Commission did not respond to that In answering the anti-dumping ques­ particular point, and the Definitive Duty tionnaire sent by the Commission, TEC Regulation was adopted on 19 June 1985 France suggested that expenses (such as apparently on the basis of 27.7% for the overheads and salaries of administrative SGA expenses of TEC France. TEC's case personnel) which related both to typewriters now is that that was not correct, because and to other products should be allocated electronic typewriters were sold only out of 'on a basis which would reflect their the head office of TEC France and importance to the various products.' For therefore the salary costs of staff in the example, it suggested that the salaries of branches of TEC France should have been salesmen selling both typewriters and cash left out of the calculation. registers should be allocated on the basis of the amount of time devoted by the salesmen to the various products. That approach is contrary to the general rule laid down in Article 2 (11) of the Basic Regulation. The Commission was not prepared to accept that The Council in its defence says: approach and allocated the mixed expenses on the basis of turnover. It explained this to TEC's representatives at a disclosure meeting on 9 January 1985, where it also stated that it had found a figure of 27.7% for the SGA expenses of TEC France 'The Commission . . . allocated certain although it had decided to use the lower non-specific costs of TEC France on the figure (24.87%) which it had found for basis of turnover. While the Commission is Belgium because quantities sold were prepared to depart from the general rule similar. laid down by Article 2 (11) whenever there is sufficient evidence that such a departure is justified, in the present case the Commission was not convinced that this was the case. It is therefore inappropriate for the applicants to refer to an error made by the TEC did not, and does not, challenge the Commission. There was a disagreement Commission's carrying out the allocation on between TEC and the Commission on the the basis of turnover. Indeed, in view of the appropriate method of allocation, and the terms of Article 2 (11), it could hardly do Commission was not satisfied by TEC's so. However, by a document of 31 January arguments in this respect.' 1985 TEC submitted that the Commission had taken the total salary expenses of TEC France and allocated them whereas part of its staff did not deal with typewriters at all and should not have been brought into the calculation. It alleged that the majority of This seems to me to refer to the the staff whose expenses had been included Commission's decision to allocate the costs

In its rejoinder, the Council says, on this latter point: 'the applicants fail altogether to Although the Community authorities have show how that list could have established to work through a vast amount of detail in what was in issue, namely whether the the course of an anti-dumping proceeding, I salaries concerned were partly allocable to do not think that it can be within their sales of electronic typewriters'. That is true. powers to leave such a material point It is a bare allegation. Moreover the list has completely out of account. There is not not been presented to the Court. The sufficient material before the Court to say Council goes on: 'In any event the allo­ whether there has been a mistake of fact or cation of costs was fully discussed both a manifest error of appraisal, but my view is during the visit to TEC France in June 1984 that in this respect the relevant procedural and during the disclosure meetings in rules have not been complied with. January and May 1985. If TEC considered that the salary list was of decisive importance, TEC could have provided it at any time during the Commission's investi­ gation.' Article 2 (11) of the Basic Regulation begins: 'In general, all cost calculations shall be based on available accounting data.' Article 7 (7) (b) of the same regulation The mere offer to show the Community provides inter alia: 'In cases in which any authorities a list of staff salaries and interested party . . . refuses access to, or functions establishes nothing relevant for otherwise does not provide, necessary present purposes. It was not in the hands of information within a reasonable the Community authorities at the relevant period . . . preliminary or final findings, time, and it has not been established that it affirmative or negative, may be made on the would in fact substantiate TEC's present basis of the facts available.' I do not think allegation. In my opinion it is not decisive that the Community authorities can rely on of the present point. either of these provisions in the present

context. It cannot be said that TEC France went on to say: 'Tokyo Electric Company 'refused access to' information relevant to requests that the Commission use the figure the present question, and further infor­ of 16.97% to calculate SGA expenses for all mation was offered to the Commission of the TEC subsidiaries. In its provisional investigators in the form of the list of staff determination the Commission apparently functions and salaries. Therefore I do not took the position that the most reasonable read either of these provisions as entitling basis for determining SGA expenses of the Community authorities to ignore the European subsidiaries is to use the lowest point raised by TEC concerning staff expenses of the subsidiaries at which verifi­ salaries. cation was carried out. At the stage of provisional determination, the Commission used the figure for TEC Belgium. In fact, the figure of 16.97% for TEC France would be a more reasonable basis for calculating Accordingly, the Definitive Duty Regulation SGA expenses for TEC Europe and TEC should in my view be sent back to those Germany than the Belgian subsidiary's authorities for them to review the calcu­ figures.' lation of the SGA expenses of TEC France for the purpose of constructing the export price, in so far as those expenses result from the staff salaries of TEC France. The regu­ lation would have to remain in force It is clear that TEC was content for the pending the completion of such review, but SGA figure of TEC France to be used by I apprehend that an order to that effect analogy for TEC Germany and TEC UK as would be within the Court's powers under long as there was a prospect (at least in Articles 173 and 174 of the EEC Treaty. their view) of it resulting in a figure lower than that provisionally used (24.87%, the figure found for the SGA expenses of TEC Belgium). TEC's complaint in essence is that, instead of ending up with a lower The second limb of TEC's third argument is figure as it had hoped, the use of TEC that the Commission has arbitrarily imputed France as a 'surrogate' has led to a higher the selling costs of TEC France to TEC figure for SGA expenses. That does not subsidiaries in Germany and the United found a claim of arbitrary treatment. As the Kingdom. Council rightly says, TEC was prepared to accept that the expenses of TEC France should be taken as representative of the other European subsidiaries. TEC gives no reason to suppose that the expenses of TEC The Council answers that this second France as adjusted by the Commission were complaint is contrary to the facts: TEC not representative. In such circumstances the proposed that the selling costs of TEC Basic Regulation puts no obligation on the France were representative and should be Commission to investigate separately the used for the other TEC subsidiaries. costs of each of an exporter's subsidiaries.

TEC's fourth ground of annulment concerns the finding of injury to the Community industry. TEC submits that the injury determination is unsupported. Its submission again has two limbs. First, TEC argues that there is no basis for the imposition of anti-dumping duties on imports of compact electronic typewriters corresponding to Nimexe Code The dumping margin and the injury to the 84.51-14, because Japanese market share in Community industry have to be determined those products fell from 100% in 1980 to separately, and each of them constitutes a below 75 % in 1983 (although the volume of maximum limit on the rate of anti-dumping exports increased) and because Olympia and duty (if any) which may be imposed. Article Olivetti themselves imported them from 13 (3) of the Basic Regulation thus non-member countries (including Japan). provides: 'The amount of such duties shall not exceed the dumping margin ... ; it should be less if such lesser duty would be adequate to remove the injury.' The definitive anti-dumping duty was imposed on 'imports of electronic type­ writers, whether or not incorporating calcu­ lating mechanisms, falling within subheadings ex 84.51 A or ex 84.52 B of In answer to a question by the Court, the the Common Customs Tariff and corre­ Council stated that the margin of dumping sponding to Nimexe codes 84.51 ex 12, found for TEC was 44.30% and the level of ex 14, ex 19, ex 20 or 84.52 ex 95 orig­ injury which its products were found to be inating in Japan' (Article 1 (1) of the causing was 24.05%. The latter figure, Definitive Duty Regulation). Of the being the lower, constituted the maximum different Nimexe codes cited here, TEC rate of duty which the Community auth­ singles out Code 84.51-14 to define the orities were allowed to impose. In fact they category of typewriters which it describes as rounded the figure down to the nearest 'compact'. That code covers 'conventional whole number and imposed a definitive duty typewriters with ordinary characters of 24 % (Definitive Duty Regulation as weighing not more than 12 kg (excluding amended by Regulation No 113/86). case), electric', as opposed in particular to

It appears that imported electronic type­ The injury finding in this case was made in writers are most often cleared under one of relation to electronic typewriters under all three Nimexe codes: 84.51-14, 84.51-19 the Nimexe codes cited. TEC's submission (both mentioned above) and 84.51-20 is based on the proposition that separate 'Typewriters: Other' (i. e. other than injury determinations should have been conventional typewriters with ordinary carried out for what it calls 'compact' elec­ characters). If the 12 kg threshold allows a tronic typewriters on the one hand and distinction to be drawn between the first what it calls 'professional' electronic type­ two Nimexe codes, the same cannot be said writers on the other. That point had already of the third, in relation to which weight is been put to the Community authorities in irrelevant. No weight threshold is used in the course of the proceeding and rejected in the CCT. In any event the Nimexe classifi­ the following terms: 'Two exporters claimed cation does not purport to represent market that there were two distinct markets for conditions for a particular product: it electronic typewriters; one for what was pursues other purposes. I do not think called "portable" or "compact", and the therefore that the existence of a Nimexe other for "professional" typewriters. With code more or less corresponding to a notion regard to the latter the exporters claimed of a 'compact' typewriter can be relied upon that no injury was caused by Japanese in itself to invalidate the Community auth­ imports. The exporters have not offered any orities' approach. support for this claim. In fact it was estab­ lished during the investigation that Community production covered all the models of electronic typewriters in question and, in consequence, all models were inves­ tigated. ... In addition, with further It cannot be said, in my view, that the technical development, the borderline existence of separate markets for 'compact' between different groups of models, if it has and 'professional' machines is self-evident. ever existed, is disappearing so that it is not While weight is a factor which may allow a appropriate to artificially divide the elec­ distinction to be drawn, the functions tronic typewriter market into groups of performed by the machines must also be at models.' (Recital 30 to the Definitive Duty least as important a factor, and here it has Regulation). not been shown that there is any substantial difference between the two alleged categories.

while such a distinction was used for lation; and has been extended from time to convenience, e. g. for compiling statistics, it time. In my view that was a permissible way was not systematically used. Thus Cetma in of dealing with the question of small models its complaint said: 'The complaint is not competing with Community production, directed against all kinds of electronic and it has not been shown that such a typewriters ... The electronic typewriters model-by-model approach to the injury range from small-sized and low-weight determination exceeded the discretion of the portable typewriters up to professional Community authorities. featured office machines. The borderline between the various models is vague ... All electronic typewriters are "like products" because they have closely resembling characteristics and basically similar functions'. Secondly, there can be nothing in the nature of an estoppel against the Council because the whole injury determi­ nation for the Definitive Duty Regulation I conclude therefore that no requirement was clearly based on the concept of a single has been made out for the Community market including all models of electronic authorities to approach the injury determi­ typewriters. nation on the basis that there was a separate market for 'compact' electronic typewriters, however defined. Even if there had been' the market share held by Japanese imports over the relevant period, referred to by TEC , is but one of several indications of injury to which the Community authorities must have regard in assessing injury, none of which is necessarily decisive: Article 4 (2) of the Basic Regulation. TEC itself alludes to another such factor, this one pointing in the opposite direction, i. e. Application of the view that injury could volume of imports. That point alone is in only be evaluated and assessed in relation to my view inconclusive. the total market for electronic typewriters led the Community authorities to examine specifically every single typewriter model. As a result they found that a model which TEC regards as 'compact' was comparable to a model produced in the Community by Triumph-Alder. TEC has not denied that they were comparable. The dumping of TEC's model was found to be causing As regards models sold by Olympia and injury to Triumph-Adler's sales of its Olivetti in the Community but manu­ Community-produced model. When, on the factured outside it, the Council admitted other hand, it was established that particular that one of the allegedly Com­ 'small-size electronic typewriters' imported munity-produced models with whose target from Japan fell into a different category price the TEC model TW 1000 was from those produced and investigated in the compared to determine the margin of injury Community, a list of models excluded from was in fact produced in Singapore, and it the duty was established (Recital 49 and stated that steps would be taken to correct Article 1 (3) of the Definitive Duty Regu­ the error. The Council then adopted Regu-

lation No 113/86 amending the Definitive to fill gaps then existing in its product range Duty Regulation. It recited inter alia: and were not in competition with models 'Following the imposition of the definitive which it manufactured itself. The same is duty it has come to light that certain calcu­ true of Olivetti. Triumph-Adler, for its part, lations had to be revised. These calculations did not import any electronic typewriters do not concern the dumping margins but from Japan. Therefore none of the the level of duty necessary to eliminate complainants has inflicted injury on itself by injury: — in the case of Brother Industries importing dumped Japanese typewriters. I Ltd, Silver Seiko Ltd, TEC Tokyo Electric apprehend that, if one of them had inflicted Company Ltd and Towa Sankiden injury on another by so doing, that would Corporation, the comparison between their not deprive the injured complainant of entit­ sales prices in the Community and the target lement to protection from injury under the prices described in Recital 36 of Regulation Basic Regulation. But that question does not No 1698/85 had erroneously included some fall to be decided because the Council has data concerning models of electronic type­ found that neither Olympia's imports from writers manufactured by a Community Japan nor Olivetti's injured their fellow producer outside the Community. These complainants. That finding is supported by data should be excluded from the the facts that few models were imported, comparison.' That revision led to the result that they were confined to models at the that the definitive duty on TEC's products smaller end of the range and that the total was increased from 21 to 24 %. TEC volume of imports remained relatively low brought its second action, Case 106/86, at all relevant times. TEC in my view has against Regulation No 113/86, but its not produced evidence sufficient to rebut pleadings contained no fresh arguments that finding. Accordingly the Community concerning the present point. In the circum­ authorities were not required to exclude stances it appears that the Community auth­ Olivetti and Olympia from the injury orities have corrected the error complained finding because they imported certain of in the course of the proceedings. models from Japan, and it has not been established that the injury determination in the Definitive Duty Regulation is defective in this regard.

method used by the Community authorities 'Even if the downward pressure on the to determine the level of price undercutting prices of the French producers was mainly is invalid. The use of hypothetical 'target due to the prices of the Netherlands prices' is contrary to Article 4 of the Basic producers (as the applicants contend), this Regulation: see Advocate General VerLoren would still not help the applicants. As I have van Themaat's Opinion in Case 53/83 pointed out, the prices of the Netherlands Allied Corporation v Council [1985] ECR producers are almost certainly exposed to 1621, at p. 1631. The passage cited refers to downward pressure from the import prices Article 4 of Regulation No 3017/79, which in question so that downward pressure on has now been replaced by Article 4 of the the prices of the French producers also Basic Regulation in identical terms. It can seems to come indirectly from the import therefore be taken to apply to the latter. In prices of the applicants. In the context of the passage cited he said: the margin of discretion which must also be accorded to the Commission in interpreting Article 4 (1) of Regulation No 3017/79, that appears sufficient.'

OPINION OF SIR GORDON SLYNN - JOINED CASES 260/85 AND 106/86

TEC v COUNCIL

OPINION OF SIR GORDON SLYNN - JOINED CASES 260/85 AND 106/86

Conclusion

Accordingly I consider it is appropriate for the Court to:

(1) annul the Definitive Duty Regulation in so far as it concerns the inclusion of staff salaries of TEC France in the constructed export price of TEC products sold through TEC France, TEC Germany and TEC UK;

(2) state that the Definitive Duty Regulation shall remain in force in its entirety until the Community authorities have recalculated the export price in that respect and amended that regulation accordingly;

(3) for the rest, dismiss the applications;