C-294/86

TECHNOINTORG v COMMISSION AND COUNCIL

OPINION OF ADVOCATE GENERAL SIR GORDON SLYNN delivered on 6 July 1988

By Regulation No 29/87 of 22 December By order of 8 July 1987 the Court joined 1986 (Official Journal 1987, L 6, p. 1, 'the Cases 294/86 and 77/87 for the purposes of Definitive Duty Regulation') the Council the written and oral procedure and of the imposed a definitive anti-dumping duty of judgment.

OPINION OF SIR GORDON SLYNN — JOINED CASES 294/86 AND 77/87

By a telex received at the Court on 20 Technointorg has argued that, in spite of its March 1987, the Commission submitted that expiry, the Provisional Duty Regulation has the application in Case 294/86 for created a 'lasting economic fact' still capable annulment of the Provisional Duty Regu­ of separate judicial review. However, the lation had become without purpose since continuing applicability of the duties arises the provisional duty imposed by that regu­ solely from the Definitive Duty Regulation. lation was no longer in force. By telex of 6 Under the Provisional Duty Regulation April 1987 Technointorg replied that the alone the provisional duties would lapse and Council's decision that provisional duties fall to be reimbursed. In my view Tech­ should be definitively collected merely nointorg has failed to demonstrate any constituted a decision on the enforcement of independent effect which could be the Commission regulation imposing the attributed to the Provisional Duty Regu­ provisional duties and that such duties can lation after the date of entry into force of be recovered only if the Court of Justice the Definitive Duty Regulation (9 January annuls the Commission regulation imposing 1987). them. In my view, that argument cannot be reconciled with the scheme for anti­ dumping measures laid down in Council Regulation No 2176/84 of 23 July 1984 on • protection against dumped or subsidized imports from countries not Members of the EEC (Official Journal 1984, L 201, p. 1, 'the Basic Regulation').

Accordingly, in my view, Case 294/86 17 January 1986. A copy of that notice, and ceased to have any purpose aher 9 January an exporters' questionnaire were sent to 1987 and should be dismissed; Tech- Technointorg at its Moscow address in nointorg should pay the Commission's costs. December 1985. The Council alleges that The issues canvassed Ín that case fall to be they were sent by registered post on 13 decided under Case 77/87. December, but the post office receipt produced to the Court is dated 17 December. I accept that the notice and questionnaire were sent at the latest on 17 December 1985. The Council also says that a telex announcing that the questionnaire In Case 77/87 Technointorg puts forward had been sent was sent on 13 December seven grounds in support of its claim for 1985 to Technointorg in Moscow at the annulment. telex number subsequently used by Tech­ nointorg for telexes to the Commission. Technointorg denies receiving that telex. A further telex was, it is said by the Commission, sent on 13 February 1986 to Technointorg but no reply was received. By its first ground of annulment, it alleges Whatever the position in regard to those breach of the general principle of the rights telexes, it is clear that the letter with the of the defence and of the essential questionnaire was received because on 19 procedural requirement of granting a fair February 1986 Technointorg sent a telex to hearing to the parties involved. Tech­ the Commission acknowledging receipt of it nointorg's case is that it gave a proxy to Mr 'just some days ago' and asking for an Astakhov, general director of its associated extension of the time-limit for reply until importer in Belgium, East-West Agencies — March 1986. In my opinion on that basis Technical and Optical Equipment Belgium the Commission fulfilled its obligation to SA— NV ('EWA') to act on its behalf in inform the exporter under Article 7 (1) (b) the anti-dumping proceedings in question of the Basic Regulation. and that the Commission wrongfully failed to ask him for information or to send him an exporters' questionnaire. It also alleges that this was a breach of Article 7 (1) (b) of the Basic Regulation, which requires the Commission to advise exporters of the initiation of an anti-dumping proceeding. As regards Mr Astakhov, Technointorg alleges that the Commission received a copy of his proxy (which is dated 23 December 1985) on 14 February 1986. The Commission denies that, and there is no evidence of it. It is to be noted that EWA's The facts do not in my opinion support letter to the Commission dated 14 February Technointorg's contention. The Com­ 1986 signed by Mr Astakhov does not mission announced the initiation of the anti­ mention the proxy nor indeed does it dumping proceeding in question by a notice mention Technointorg. It can fairly be read (85/C 319/05) published in the Official as being sent on behalf of the importers to Journal on 11 December 1985 (Official whom an importers* questionnaire was also Journal 1985, C 319, p. 3) which set a sent. The Commission contends that it first time-limit for interested parties to supply heard about Mr Astakhov's representative information and request hearings, namely capacity in a telex of 27 February 1986 from

that he had the opportunity to proffer infor­ Technointorg and only received the proxy mation or arguments on behalf of Tech­ on 7 March 1986 under cover of a letter nointorg and to supply the completed ques­ sending the answer to the questionnaire tionnaire. I find it impossible to accept addressed to importers. The telex of 27 Technointorg's case at the hearing that 'if February 1986 does not say that a proxy the Commission would have said, "Fill in had already been sent and I would accept the questionnaire" we would have done so' that the Commission did not know of Mr and that the blame lies on the Commission. Astakhov's authorization before 27 The Commission had made it plain beyond February 1986. There is nothing in the a peradventure that it had sent the ques­ documents to show that it received notice of tionnaire and wanted a reply. such authorization earlier. Technointorg having acknowledged receipt of the ques­ tionnaire on the 19th of the same month and implied (by asking for an extension) that it was going to answer it, there was no obligation on the Community authorities to address themselves to Mr Astakhov until they received a reply to the questionnaire. It is a curious feature of the case that In fact the exporters' questionnaire was apparently on 10 March 1986, EWA telexed never answered. In an anti-dumping the Commission to say that Technointorg proceeding the Community authorities have had asked whether the export questionnaire only limited powers of inquiry and are had been sent to the correct address in largely dependent on information being the USSR, when already by telex of furnished to them, in particular by exporters 19 February 1986 Technointorg had concerned. It appears that they depend on acknowledged receipt of it. Moreover, on 3 the answers to the exporters' questionnaire March by telephone and 14 March 1986 by to establish the main outlines of the position telex, it is said by the Commission (and not and to establish what further points they challenged) that EWA was told that a ques­ may need to ascertain, e. g. by verification tionnaire had been sent to Technointorg visits. Technointorg itself has failed to and no reply received. provide the basic information from which other steps in the investigation could flow. In such circumstances the Community auth­ orities were in my view fully entitled to rely on Article 7 (7) (b) of the Basic Regulation whereby, when information is withheld, they may make findings on the basis of the facts available. Mr Astakhov had a meeting or meetings with officials of the Commission, e. g. on 1 April 1986. Moreover, during 1986 infor­ mation was supplied by EWA about the importer's position so that Mr Astakhov or his colleagues were in touch with the Commission. It is said by Technointorg that Mr Astakhov was not specifically asked In all the circumstances I would reject questions about Technointorg's position or about undertakings which it would give or Technointorg's argument that the rights of to fill up the questionnaire. Whether or not the defence were infringed or that a fair he was specifically asked, it seems to me hearing was denied.

Similar considerations in my opinion apply both to Recital 33 of the Provisional Duty Regulation and to Recital 18 of the Definitive Duty Regulation, concerning the rate of duty. The dumping margin estab­ lished was 204%. Under Article 13 (3) of the Basic Regulation the amount of the duty As regards market share, Technointorg had to be less than that margin 'if such complains that Recital 14 refers only to the lesser duty would be adequate to remove increase in its market share in the United the injury'. The two recitals mentioned Kingdom and Belgium whereas it does not explain why a 33 % duty is sufficient to follow that its market share in the EEC as a remove that injury (comparing the selling whole increased correspondingly or that price needed to provide efficient injury was caused to EEC industry as a Community producers with a reasonable whole. That assertion ignores the first profit margin and the selling prices in the sentence of the third paragraph of Recital Community of dumped imports), and in my 14, which makes it clear that Technointorg's view they do so in sufficient detail and with market share in the EEC as a whole did sufficient clarity to satisfy the requirements increase (since although consumption in the of Article 190 of the EEC Treaty. Community remained steady, imports from the Soviet Union had increased by more than 20 000 units from 1981 to 1985), and it ignores Recital 13 which endorses the points noted by the Commission in this connection in the Provisional Duty Regulation which deals with the matter in some detail, particularly in Recital 23. Accordingly I consider that this complaint is unsubstan­ tiated and fails. Accordingly I reject Technointorg's second ground of annulment.

Recital 4 states: Technointorg contests the assertion in that recital that none of the parties objected to the choice of Yugoslavia, on the grounds that the Commission failed to request Tech- nointorg's views or request information 'After the provisional anti-dumping duty from Mr Astakhov. In my view, the was imposed, Technointorg said it was Commission was under no duty to make ready to cooperate fully with the any such request. It was up to the party to Commission. The Commission notes that, make its views known in due time. It is despite these statements, Technointorg common ground that Technointorg did not supplied no information as to its exports to comment (either directly or through Mr the Community. In any case, as it did not Astakhov) on the choice of comparable

TECHNOINTORG v COMMISSION AND COUNCIL

By its fourth ground of annulment Tech­ nointorg alleges infringement of Article 2 (5) of the Basic Regulation in that, in the Technointorg complains, in relation to these case of a USSR exporter, the domestic price recitals, that the question whether or not on the Yugoslav market is an unreasonable Technointorg did bring forward any criterion of comparison because: (1) the evidence for its statement (which, it submits, purchasing power of Yugoslav consumers it did) is made totally irrelevant by the Council itself as it states there that any such converted into Belgian francs is almost three evidence would have required a further times as great as the purchasing power of investigation which was impossible in any Soviet consumers and (2) certain event. components of deep-freezers produced in Yugoslavia are either manufactured under licences granted by non-Yugoslav under­ takings (entailing payment of royalties) or are acquired outside Yugoslavia. These factors, it is said, could easily have been taken into account by the Community auth­ Recital 6 to my mind gives due weight to orities if they had chosen to construct the Technointorg's objection in view of the late normal value on the Yugoslav market stage at which it was made. Recital 4 sets instead of using the actual domestic price in out the policy of the Community auth­ Yugoslavia. orities, which is against opening a further inquiry at a late stage of proceedings in order to accommodate parties who have earlier refused to participate in the normal course of proceedings according to the scheme laid down in the Basic Regulation The last argument is in my opinion The policy, as a general rule, is in my view erroneous. In constructing normal value in acceptable, though as the Commission one country (here, Yugoslavia), the accepts there may be cases when it would be Community authorities may not take into right to reopen an investigation when the account cost factors from other countries

For the purpose of a fair comparison between export price and normal value, Article 2 (9) and (10) provide for allowances to be made for differences in The arguments about purchasing power and physical characteristics of the product, component costs also fail, in my view, differences in quantities, differences in because they relate to alleged purchasing conditions and terms of sale and differences power and costs in a non-market economy in import charges and indirect taxes. In my country (the USSR), whereas the very view, the differences alleged by Tech­ purpose of Article 2 (5), as I see it, is to nointorg do not fall within any of these exclude the use of prices and costs in such categories, and, even though Article 2 (10) countries as they are not the result of specificies 'guidelines' rather than 'exclusive market forces. It follows, in my view, that factors', it seems to me that the Community adjustments do not fall to be made under authorities were entitled not to take into that provision for differences in costs or account the allowances claimed. I would prices between the comparable country and accordingly reject the fifth ground of the exporting country. annulment.

Community industry by Technointorg Nor does its argument that its products are exports considered separately from the not of the same quality as EEC products in exports from other non-EEC countries, and my view help it. If products cannot compete the Community authorities have failed to on quality, the alternative is to compete on state reasons for their finding of a cumu­ price, and that makes protection against lative injury. unfair price competition by dumping particularly necessary. Finally, Technointorg seeks to rely on the fact that the Community authorities compared its products with 'bottom of the range' EEC products for the purpose of assessing price undercutting. That fact is in my view irrelevant to the argument, because that comparison goes to an examination of price undercutting under Article 4 (2) (b) of the Basic Regulation, not to the definition of the like product for the purposes of Article 4 (1) and (5). In any event, by measuring Technointorg argues that the EEC markei the USSR imports against the lower range for upright freezers is divided into two of EEC products the authorities took the completely separate segments, the upper one approach most favourable to Technointorg consisting of sophisticated, high-quality, and still found that there was dumping and expensive freezers and the . lower one injury to Community producers on evidence consisting of cheap, basic freezers without which has not successfully been challenged. frills or expensive promotional campaigns. It argues that only the affluent buy the former whereas only the poor buy the latter. I do not accept those arguments. In my view, whilst a distinction can validly be drawn between upright freezers and chest freezers (as in Recital 6 of the Provisional Duty Regulation), no reason has been shown why upright freezers (the only kind at issue in this case) should not all be regarded as 'like products' for the purposes of Article 4 (1) and (5) of the Basic Regulation. Tech­ nointorg has provided no substantial evidence for treating them as different products, and, as regards the categories of potential purchasers, it does not seem at all to follow that the relatively well off or the well off will necessarily go for the expensive model. For far more purchasers than 'poor On a market of 1.6 million units (Recital 23 immigrants' (as relied on in argument) a of the Provisional Duty Regulation), I cheap basic unit may be an attractive buy if would not consider a figure of 20 000 units a luxury model is much more expensive. For as de minimis. Furthermore, the volume of purchasers who would otherwise buy in the dumped imports is only one of the several middle or lower ranges there is an even factors to be examined in determining injury greater attraction to purchase the cheap pursuant to Article 4 (2) of the Basic Regu­ model. lation. Although the number of units exported to the EEC by Technointorg in

As regards the Community authorities' By the seventh ground of annulment, Tech­ decision to consider the effect on the nointorg asserts that Article 10 (1) and (3) Community industry of dumped imports of the Basic Regulation, Article 190 of the from Technointorg along with those from EEC Treaty and the principle of Yugoslavia and the German Democratic non-discrimination were all infringed in that Republic, it seems clear to me that, where the Commission refused to accept any of dumped imports originate from several the undertakings offered by Technointorg different countries, their effects on and to discuss with Technointorg any Community industry are cumulative. It must undertaking it might have been willing to therefore be open to the Community auth­ offer. orities to take action against all the exporters, even if each individual exporter's exports are relatively low. In order to achieve the object of the Basic Regulation, which is to provide protection against dumping, the Community authorities must be regarded as entitled to examine the effect Technointorg offered two alternative under­ of dumping of the like product from several takings, the first on 22 October 1986, different countries in aggregate, as in this amended on 24 November 1986, and the case. I would therefore reject Tech- second on 4 November 1986. As stated in nointorg's argument to the contrary. Recital 16 of the Definitive Duty Regu­ lation, the Commission rejected both of them and informed Technointorg of the reasons, in particular by telexes of 18 and 28 November 1986 and by a letter of 11 December 1986, which have been produced to the Court. This correspondence shows that the proposed undertakings were The foregoing points were considered at considered inadequate in three respects: length in Recitals 11 to 15 of the Definitive (1) Technointorg proposed much lower Duty Regulation and Recital 24 of the price rises than were required to eliminate Provisional Duty Regulation, which was the injury; (2) the price rises offered were specifically confirmed by the last paragraph spread over a period of several years so that of Recital 14 of the Definitive Duty Regu­ the maximum rate would not have been lation. The reasons given were in my view

Accordingly, in my opinion:

(i) Case 294/86 should be dismissed, either as having no purpose or for the same reasons mutatis mutandis as those which lead to the dismissal of Case 77 / 87 , and Technointorg ordered to pay the Commission's costs of that action including those relating to the proceedings for interim measures, and

(ii) Case 77 / 87 should be dismissed and Technointorg ordered to pay the costs of the Council and of the Commission including those relating to the proceedings for interim measures.