C-133/87

I — Case C-133/87 1. In its application in Case C-133/87, Nashua Corporation, a company whose head office is in the United States of America, seeks the annulment of the 3. By letter of 9 December 1986, Nashua Commission's decision rejecting the under­ Corporation offered the Commission an taking which it had offered pursuant to undertaking the essential terms of which Article 10 of Council Regulation (EEC) No were as follows: 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community, ' in the course of the 'Nashua Corporation, acting for itself and anti-dumping proceeding conducted by the its subsidiary companies within the EEC, Commission concerning the importation of hereby undertakes not to export to the plain paper photocopiers originating in European Community more than the Japan. following quantity of photocopying machines falling within subheading 90.10 A of the Common Customs Tariff, corre­ sponding to Nimexe Code 90.10-22, orig­ inating in Japan: 2. In its second application, lodged barely a fortnight later in Case C-150/87, Nashua Corporation, together with nine of its wholly owned subsidiaries — eight of which 1987 48 536 units have their head offices in various 1988 48 536 units Community countries — claim that the 1989 48 536 units Court should annul Council Regulation 1990 48 536 units (EEC) No 535/87 of 23 February 1987 1991 48 536 units.' imposing a definitive anti-dumping duty on imports of plain paper photocopiers orig­ 2 inating in Japan (hereinafter 'the contested regulation'). One of its submissions is the 4. The terms of the undertaking also claim that the Commission's rejection of the provided that the applicant would do its undertaking which it offered was unlawful, utmost to prevent evasion by resales from the subject of the application in Case outside the EEC and would supply regular reports and information to the Commission * Original language: French. to ensure effective surveillance of the under­ 1 — OJ L 201, 30.7.1984, p. 1. taking. It was proposed that the undertaking 2 — OJL54, 24.2.1987, p. 12. should take effect from 1 January 1987.

5. By a decision notified to the applicant on to establish strict parallels between the 27 January 1987, the Commission rejected rejection of a proposed undertaking and the the proposed undertaking. The relevant part circumstances which gave rise to the IBM 3 of the Commission's decision is quoted in judgment, cited by the Commission. the Report for the Hearing. Indeed, the defendant itself conceded that the term 'preparatory act' is inappropriate in the present context. The measures in issue in the IBM case were the decision initiating a

Both measures undoubtedly represent mandatory 7. Since the Court may, of its own motion, stages in any procedure leading to the question the admissibility of an application, imposition of a fine for conduct in restraint there is no need to consider whether the of competition, and thus the Court correctly Commission's change of position constitutes described them as 'measures of a purely a fresh submission made out of time. preparatory character' (paragraph 12 of the IBM judgment) and as 'preparatory procedural steps'.

9. However, the Commission claims that judgment). Except in cases in which the the decision is not open to challenge under Commission itself suggests undertakings Article 173, on the ground that the only (Article 10(3) of Council Regulation No effect of rejecting an offer is to increase the 2176/84), that procedure is not commenced practical risk that an anti-dumping duty will unless the undertaking in question takes the be imposed, without significantly affecting initiative, and it does not always do so.

last argument. It is not, of course, possible Comminati [\9Si] ECR 2639

14. What happens if an undertaking is not offered until after that stage of the procedure? According to Article 12, a definitive anti-dumping duty 16. Moreover, as is shown in particular by Council Regulation No 2075/82 of 28 July 1982, regarding the importation of multi-phase electric motors originating in 'shall be imposed by the Council, acting by certain East European countries (Official qualified majority, on a proposal submitted Journal L 220, 29.7.1982, p. 36), by the Commission after consultation' disagreement between the Member States within the Advisory Committee may have the result that the Council itself is confronted with the choice of either with the committee set up under Article 6, imposing a definitive anti-dumping duty or which consists of representatives of each accepting an undertaking from the Member State, with a representative of the exporters, and that it opts for the second Commission as chairman. Consultation alternative. covers, in particular:

17. Lastly, it is also possible that the '(d) the measures which, in the circum­ Commission and the Council — or the stances, are appropriate to prevent or Council alone — may reach the conclusion remedy the injury caused by dumping that the conditions for the application of or the subsidy and the ways and means Regulation No 2176/84 are not fulfilled and for putting such measures into effect'. that the procedure should be terminated.

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NASHUA CORPORATION AND OTHERS v COMMISSION AND COUNCIL

'A — By failing to treat the applicant as a separate exporter in the proceeding and in 19. Those are no doubt the grounds on the measures adopted in the regulation, the which the Court, in its Order of 11 4 Council failed to apply correctly the November 1987 dismissing as inadmissible procedures laid down in Council Regulation Nashua's application for the annulment of (EEC) No 2176/84. Council Regulation No 535/87 in so far as it was directed against the Commission, stated that B — By calculating anti-dumping duties on the basis of figures which excluded all imports by the applicant, the Council acted in breach of Council Regulation (EEC) No 2176/84. 'the Commission's decision ... to reject an undertaking [is] part of the Council's decision-making process' (first and last subparagraphs of paragraph 6). C — By applying anti-dumping duties at a uniform rate on the applicant and on Ricoh, the Council unlawfully discriminated against the applicant in breach of the Community principle of non-discrimination and in breach of Council Regulation (EEC) No 20. Accordingly, I propose that the Court 2176/84.' should dismiss as inadmissible the separate action brought by Nashua against the act 23. It is clear from a simple perusal of those 4 — Case 150/87 Nashua Corporation and Others v Council and Commission [m7] ECR4421 complaints that the applicant regards itself

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OPINION OF MR MISCHO —JOINED CASES C-133/87 AND C-150/87

24. The reason is that in Case C-150/87 the plain paper photocopiers originating in 5 applicant is subdivided into several parts. As Japan (hereinafter referred to as 'the an integral whole it defines itself (at provisional regulation'). In the anti-dumping paragraph 2 of the application) as 'the cases which have previously come before the supplier of Nashua brand photocopiers Court, the applicants were either exporters which it sells in the EEC and numerous (or producers) of products subject other countries'. However, it consists on the to an anti-dumping duty or else one hand of Nashua Corporation, which is importers — usually sole importers — of 'the exporter from Japan of Nashua photo such products, which might or might not be copiers' and on the other hand of its subsi subsidiaries of an exporter (or producers) or diaries, which are 'the importers of Nashua otherwise connected with such a person. photocopiers into the Community'.

25. On the basis of those last-named pendent importer of products bearing the characteristics, the Council places the brand name of an exporter or producer. applicant in the category of Original Having made these preliminary remarks, I equipment manufacturers' (hereinafter shall begin by considering the objection of referred to as 'OEMs'), which, at paragraph inadmissibility raised by the Council. 8 of the contested regulation, it defines as importers who sell in the Community, under their own brand names, products purchased from exporters of PPCs to the Community. A — Admissibility of the application in Case From this it infers, first, that the application C-150/87 is inadmissible because the applicant is in any event unrelated to a producer or exporter (see paragraph 11 of the statement of defence) and, secondly, that neither it

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NASHUA CORPORATION AND OTHERS v COMMISSION AND COUNCIL

acknowledging that Nashua's situation resale prices and not to the export prices differs, in some degree, from that of the charged by the producers or exporters in unrelated importer in Joined Cases 239/82 question (see the judgments of 29 March and 275/82 (judgment of 21 February 1984 1979 in Case 118/77 ISO v Council [1979] in Allied Corporation and Others v ECR 1277, and of 21 February 1984 Allied Commission [1984] ECR 1005), it takes the Corporation I, cited above). Under Article view that it still does not meet the criteria 2(8)(b) of Regulation No 2176/84 export laid down by the Court, in particular in its prices may be constructed in that way inter order of 8 July 1987 in Case 279/86 Sermes alia where there is an association between SA v Commission [1987] ECR 3109. exporter and importer' (paragraphs 15 and 16).

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OPINION OF MR MISCHO —JOINED CASES C-133/S7 AND C-150/87

34. It follows from the foregoing obser­ vations that a regulation establishing an anti-dumping duty may be of individual concern to producers, exporters and importers. There is thus no a-priori 37. However, just as association is not in exclusion of any one of those categories of itself sufficient to support the conclusion economic agents. that an importer is individually concerned, neither is it a necessary condition for such a conclusion. An association is not the only contingency in which Anicie 2(8)(b) of 35. However, it also follows that the mere Regulation No 2176/84 allows the export fact of being a producer or exporter of a price to be constructed on the basis of the product subject to an anti-dumping duty is importer's resale price (hence 'inter alid in not sufficient to allow the economic agent paragraph 16 of the order in Sermes).

I-748

NASHUA CORPORATION AND OTHERS v COMMISSION AND COUNCIL

44. At the same time, however, Nashua 41 . 1 think not. In the first place, OEMs do cannot merely be treated as if it were Ricoh, not form an anonymous class comparable to since the machines which it imports have a

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OPINION OF MR MISCHO —JOINED CASES C-133/87 AND C-150/87

It considered to be an exporter for the is therefore undeniable that during customs purpose of the anti-dumping legislation. The clearance Gestetner brand products are brand name is the distinctive badge of a distinguished from others, which in my view product and differentiates it from any other implies that the contested regulation is of product, even if the product is manu direct and individual concern to Gestetner factured and delivered as it stands by a in just the same way as it is to Mita. business other than the owner of the brand name in question, and even if at a technical level it is no different from the products made and sold by that other business under its own brand name. Through the product, 47. The fact that the situation is not the the brand name identifies its owner and same for Nashua is entirely due to the fact places him in a situation which distinguishes that Ricoh products are subject to duty at him from any other person. the general rate of 20%. However, if the calculations establishing the dumping margin had produced a different result, the same might have applied.

Nashua officer is confronted with a photocopier complains that the Council failed to treat it bearing the Gestetner brand name, his as the exporter of its own products, and in normal reflex must be to impose the general particular that it did not calculate a separate anti-dumping duty of 20%, since dumping margin for the products bearing its Gestetners name is not included amongst brand name, distinct from the margin the three manufacturers whose products, by calculated for Ricoh products. In its defence virtue of Article 1(2), are subject to different the Council argues that Nashua is the rates of duty. At the hearing, however, the importer of products which, although Council confirmed that Gestetner machines, bearing the Nashua brand name, are in fact which are manufactured by Mita, should be Ricoh products for the purposes of the anti subject to duty at the rate of 12.6% charged dumping provisions.

49. That being so, if the question of dumping duty is of direct and individual admissibility were determined by the concern to Nashua. manner in which the Council perceived the functions and role of Nashua, and by its consequent decision either to apply or not to apply the basic anti-dumping provisions, the effect would be to allow the Council, at 54. We have seen that under Article 11(4) its pleasure, to remove the application of of Regulation No 2176/84 the Commission those provisions to economic agents such as must forthwith inform the Council of the OEMs from any direct review by the Court. imposition of a provisional anti-dumping duty. The Council, acting by a qualified majority, may decide differently. Thus the 50. Even though the Community Council may inter alia decide that there is institutions enjoy a broad discretion in no need to impose a provisional anti­ determining dumping margins, especially in dumping duty and may instead accept the deciding whether or not to establish any undertaking offered by the firm in question. separate dumping margin and different rates If it does not do so, and subsequently of duty for Nashua products, their exercise imposes a definitive anti-dumping duty, the of that discretion is still subject to review by Council endorses the Commission's decision the Court with regard to whether the not to accept the undertaking offered. An relevant procedural rules have been undertaking is always offered by an indi­ complied with, whether the facts on which vidual firm. The decision of the Council to the choice is based have been accurately ratify the decision rejecting the undertaking stated and whether there has been a offered by such a firm therefore amounts to manifest error of appraisal or a misuse of a decision of direct and individual concern 6 to that firm. Since Nashua offered to enter powers. into an undertaking, the Council regulation imposing a definitive anti-dumping duty and 51. If the anti-dumping provisions allowed thereby confirming the rejection of its (or indeed required) Nashua to be treated proposed undertaking is of direct and indi­ separately from Ricoh, the fact that the vidual concern to it. institutions withheld that separate treatment from it would single Nashua out just as much as if they had accorded such treatment. 55. It might be tempting to object that this line of reasoning would mean that in future 52. Nevertheless, I hasten to add that that it would be sufficient for any economic does not prejudge the substantive issues and agent, even an unrelated importer, to offer does not mean that the treatment of Nashua an undertaking in order to become auto­ as an importer for the purpose of calcu­ matically entitled to challenge any regu­ lating the dumping margin was necessarily lation relating to the products which it incompatible with the basic regulation, imports. Council Regulation No 2176/84.

culminating in the Council's decision (a) Nashua is an exporter of own-brand whether or not to impose a definitive anti­ PPCs and should have been treated dumping duty, then it necessarily follows separately, in the same way as the other that all firms which have offered an under­ exporters; taking are entitled to bring proceedings against a Council regulation introducing a definitive anti-dumping duty and thereby (b) The calculation of a separate dumping rejecting their offers. margin for Nashua was possible because

(i) the institutions had all the 58. In short, for all the reasons set out necessary information at their above I take the view that the contested disposal; regulation must be regarded as being of direct and individual concern to Nashua and that its application in Case C-150/87 is (ii) Regulation No 2176/84 was not an therefore admissible. obstacle;

(iii) previous practice, and that of the B — The applicant's submissions on the merits United States, show that it was possible;

59. The applicant puts forward four formal (iv) there were no practical difficulties; submission on the merits, the first of which, based on the fact that it was not treated separately, in fact has two parts: in addition (c) a dumping margin had actually been to criticizing the Council for not calculating calculated and was lower than the a separate dumping margin for it, it claims margin adopted for Ricoh.

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NASHUA CORPORATION AND OTHERS v COMMISSION AND COUNCIL

65. In this case, Nashua neither produces PPCs itself nor sells them on the domestic Japanese market. (That in itself distinguishes 'shall indicate in particular the amount and it from the other exporters for whom a type of duty imposed, the product covered, dumping margin was calculated, all of the country of origin or expon, the name of whom produce and sell PPCs bearing their

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OPINION OF MR MISCHO—JOINED CASES C-133/87 AND C-150/87

brand name.) Furthermore, since no sales of 67. The approach adopted by the OEM machines produced by Ricoh or by institutions seems perfectly consistent. other manufacturers took place on the Having constructed the normal value of Japanese market during the reference period Ricoh products sold to Nashua by adding (see the end of paragraph 8 of the contested together Ricoh's cost of production and a regulation), the institutions had to construct reasonable margin of profit, making due normal values for such products in allowance for the special features of sales to accordance with Article 2(3) (b) of Regu­ OEMs (see paragraphs 11 and 24 of the lation No 2176/84, which applies contested regulation), they took as the export price the price actually received by Ricoh for those same sales intended for export. In that way they were able to undertake a proper comparison of those two parameters, by which the existence and the 'when there are no sales of the like product extent of dumping practices may be ascer­ in the ordinary course of trade on the tained, and to do so on a comparable basis, domestic market of the exporting country or as is required by Article 2(9) of Regulation country of origin, or when such sales do not No 2176/84. permit a proper comparison'.

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NASHUA CORPORATION AND OTHERS v COMMISSION AND COUNCIL

scheme of Regulation No 2176/84 is to channel for sales of "Nashua" machines to calculate a dumping margin for a product the applicant'. with a particular origin' and that 'the Council should therefore have investigated the export price of "Nashua" products and compared those prices with normal value', it 72. I do not, however, believe that the suggests that in calculating the dumping method of calculating a separate dumping margin for Nashua products 'the relevant margin for Nashua products would have export price was the price paid to Ricoh by had to be the method advocated by the the applicant; the relevant normal value was applicant, nor that it would necessarily have the Ricoh price in Japan subject to resulted in a margin lower than that estab­ necessary adjustments'. lished for Ricoh's production as a whole.

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OPINION OF MR MISCHO —JOINED CASES C-133/87 AND C-150/87

Nashua, its effect would have been to 76. In any event, the applicant has not increase the dumping margin for Nashua shown that that would have been the case products in line with the higher level but attempts to derive arguments from the constructed for their normal value. general, theoretical points made in para­ However, the export price could not have graphs 27 and 92 of the definitive regu­ remained at the level adopted by the lation, according to which Council.

'in general, lower margins were established for those companies which had high levels of OEM sales', 75. In order to calculate a separate dumping margin for Nashua products, the export price would have had to be the price actually paid or payable to the applicant and it would have been (Article 2(8)(a) of Regulation No 2176/84), or rather — since Nashua has subsidiaries in most countries of the Community — an export price constructed on the basis of 'inappropriate to exclude these sales from Article 2(8)(b) of that regulation, which applies the calculation of the dumping margin for the exporter concerned, especially if such exclusion may, as is possible, increase the dumping margin for that exporter'.

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NASHUA CORPORATION AND OTHERS v COMMISSION AND COUNCIL

'In fact, in that meeting, the Commission 81. If, on the other hand, an autonomous explained that a special normal value was dumping margin had been established speci­ constructed for Ricoh's sales to fically for Nashua products, it would have OEMs . . . which resulted, indeed, generally had to be based on a higher normal value, in a lower dumping margin than that found covering all the costs which Nashua would for sales of Ricoh's own-brand photo­ have incurred if it had sold photocopiers on copiers' (paragraph 9 of the rejoinder). the Japanese market, together with the corresponding profit margin. Otherwise, that normal value would not have been in accordance with the definition in Article 2(3)(a) of the basic regulation, under which 'normal value' is 78. That version of the facts is confirmed by paragraphs 11 and 27 of the contested regulation.

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OPINION OF MR MISCHO—JOINED CASES C-133/87 AND C-150/87

84. For that reason, any reference to the 'in any event ... the fact that the OEMs practice in previous cases (referred to in the resell imported products under their own third paragraph under heading B 2(a) (i) of brand names [is not] sufficient reason to Section IV of the Report for the Hearing) justify separate treatment for OEMs in seems to me to have little relevance. The comparison with other importers'. fact that in those cases the institutions did adopt separate measures for two or more exporters of products from the same producer cannot amount to a practice Besides, those practical difficulties seem to binding upon them for the future. me to be quite real in terms both of intro­ Furthermore, since the non-producing ducing specific measures and of monitoring exporters involved in those cases were all them. Since the calculation of special established in the countries of export, their dumping margins for OEMs and, where circumstances were fundamentally different appropriate, the imposition of specific anti­ from Nashua's. dumping duties on their products are largely determined by the terms of their trading relations with their suppliers, it would be necessary to calculate for each OEM as many margins, and to impose as many 85. As regards the reference to the practice duties, as that OEM has suppliers. Indeed, of the main trading partners of the as the Council rightly argued in the Community, in particular the United States abovementioned paragraph 92, of America, whose example the institutions should, according to the applicant, follow when applying their own anti-dumping rules, it is sufficient to point out that the 'it would be inappropriate for OEMs to be Court observed in its judgment of able to purchase from any exporter and pay 5 October 1988 in Joined Cases 277/85 and the same level of duty irrespective of the 300/85 Canon v Council [1988] ECR 5731, level applicable to the exporter concerned'. that

89. It may be recalled that in order to take account of the difference between manufac­ turers' own-brand sales and sales to OEMs the Council and the Commission applied a 93. That observation is also sufficient to lower profit margin in constructing the refute the argument alleging discrimination normal value for sales to OEMs — as they against the applicant inasmuch as the had to do in the absence of such sales on exponer to whom paragraph 25 of the the Japanese market during the reference contested regulation refers was treated period — than that used for sales under differently. When read in the light of the manufacturers' own brand names. The abovementioned article, the phrase reciting profit margin in question was assessed at that 'the calculation of the normal value 5 %, as opposed to the average of 14.6% comprised only production costs incurred by used elsewhere. the exporter concerned, together with a reasonable margin for profit' cannot be construed as meaning that no additional figure representing sales costs, adminis­ trative expenses and general overheads was 90. The applicant argues that in doing so incorporated in the production costs. the institutions made an arbitrary adjustment which did not reflect the real differences between the two types of sale involved and that by confining the adjustment to the profit margin they over­ 94. As to whether the level of the looked the fact that the sales costs, adminis­ adjustment made by the institutions was trative expenses and overheads associated sufficient to take account of all the with sales to an OEM are much lower than differences regarding costs and profits, it those associated with sales to an ordinary must be noted that the applicant has not dealer. succeeded in producing evidence to the contrary. Admittedly, the applicant was, by the nature of things, in a particularly difficult position for doing so. First of all, since there were no sales to OEMs on the 91. That is an incorrect presentation of the Japanese market, it could not have any facts. The second subparagraphs of para­ information on the actual costs or the true graphs 11 and 24 show clearly that the profit margin in such sales. Such infor­ institutions intended to take account of the mation as it was able to supply could differences between the two types of sale therefore relate, at most, to sales to OEMs both in terms of expenses and in terms of on the Community market. Even in respect profits. It was only for lack of more precise of such sales it could have obtained precise information that they decided that they information only with the assistance of could cover all those differences by making Ricoh, since the adjustment applied was an adjustment to the profit element alone intended to cover differences in Ricoh's and by fixing the profit margin at a flat rate costs and profits between its sales under its of 5% for all sales to OEMs. own brand name and sales to OEMs.

96. However, once the institutions had taken account of the difference in costs and profits between the two types of sales when they were constructing the normal value for 99. It should be observed at the outset that comparison with the export prices charged the manner in which Nashua presents the to OEMs (see paragraphs 11 and 24 of the circumstances does not seem to be quite contested regulation), further adjustments correct. The Council did not in fact impose pursuant to Article 2(9) and (10) of Regu­ a duty on Nashua PPCs on the basis of a lation No 2176/84 were no longer required. calculation from which sales of those PPCs Indeed, such adjustments would have been were excluded, but it did impose a duty on required only if the applicant had proved 8 Japanese PPCs in general, and Ricoh's that they were actually justified. In view of machines in particular, on the basis of a the above circumstances it is not surprising calculation which took account only of a that Nashua did not succeed in proving its given category of PPC sales which it case 'to the satisfaction of the Commission' considered representative of all sales in all (paragraph 24 of the contested regulation). categories, namely sales by related Japanese subsidiaries selling to independent distributors within the Community. Since no dumping margin was calculated for Nashua 97. The second part of the first submission products, there can really be no question of must therefore be rejected as well. discrimination.

101. In particular, there is nothing to especially when no specific rule is laid down compel them, in fixing the amount of the for the calculation of that second element. duty to be applied, to adopt the same method of calculation or the same line of reasoning as is used in determining the dumping margin, at least when they do not fix the duty at the same level as the margin or by reference to it. In its judgments of 7 May 1987 in the 'ball-bearings' cases (Cases 103. In the second place, apart from 240/84, 255/84, 256/84, 258/84 and observing in general terms that the Council 260/84 [1987] ECR 1809, 1861, 1899, 1923, took account only of sales by Japanese 1975), the Court held that the methods of subsidiaries to independent distributors in calculation which may be used for the the Community and not of sales by OEMs , normal value and for the export price are the applicant has not specifically demon independent of each other (paragraphs 13 strated how this approach affected the and 14). In its judgments of 5 October 1988 amount of the anti-dumping duty imposed in the 'electronic typewriters' cases the or the extent to which that amount would Court held that have differed if sales by OEMs had also been taken into consideration.

and whom was Nashua — accounted for almost half the sales of Ricoh products in the Community is beside the point, because the approach adopted by the institutions in 'there are three sets of distinct rules, each of order to determine the amount of duty which must be complied with separately for needed to offset the injury caused to the respective purposes of determining the Community producers, described in normal value, establishing the export price paragraph 107 of the contested regulation, and making the comparison between the was a comprehensive approach based on the two' (see judgment in Joined Cases 260/85 cumulative injury caused by a representative and 106/86 Tokyo Electric Company v percentage (70%) of all exports to the Council, paragraph 31). Community of dumped products by Japanese companies, not on the injury caused by each individual exporter.

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the contested regulation and were not them­ intended to offset, and that it did not selves challenged by the applicant. commit any manifest error or misuse its powers by taking account for that purpose of the entire range of imports of PPCs orig­ inating in Japan, rather than considering 104. This submission of the applicant must imports on a case-by-case basis according to therefore also be rejected. the identity of the producer-exporter. In those circumstances the imposition of a uniform rate is not open to challenge per se. The imposition of several different rates on 4. Discrimination as a result of the the product of a single producer by application to Nashua and Ricoh of anti- reference to the importer's profit margin dumping duty at a uniform rate would also misconstrue the main aim of any anti-dumping duty, namely to remove the injury caused to Community producers, not 105. Since the ad valorem duty is levied at a to reduce or eliminate disparities between uniform rate of 20 % on all imports of importers. Ricoh PPCs irrespective of whether they are imported by subsidiaries related to Ricoh or by Nashua, the applicant maintains that it pays in absolute terms a much higher anti­ 5. Unlawful rejection of Nashua's proposed dumping duty than those subsidiaries, undertaking inasmuch as its gross margin amounts to only 16% whereas the margin achieved by the related subsidiaries on their resales to distributors is 42 %. The applicant regards this state of affairs as an infringement of the 108. Nashua puts forward three submissions principle forbidding discrimination. to challenge the validity of the Commission's decision — which the Council endorsed in paragraphs 92 and 100 of its regulation — rejecting the undertaking 106. It is sufficient to point out that if there which it had offered. is any difference in treatment it is certainly not due to the contested regulation, which imposes the same rate of anti-dumping duty on all imports into the Community of Ricoh 109. The applicant argues that the following PPCs, but to Ricoh's pricing policy in were infringed: selling its photocopiers to its subsidiaries in the Community at a price lower than the selling price which it charges Nashua.

110. In assessing the merits of those until the Commission has reached a decision arguments we must take into consideration on the effect of the undertaking that it can not only the wording of the two paragraphs exercise a discretionary power in deciding cited above and the Commission's further whether or not to accept it. 9 defence of the reasons given therein for rejecting the undertaking, contained in its written pleadings in Case C-133/87 and in its written statement as intervener in Case C-150/87, but also of course the decision of 17 January 1987 rejecting the proposed 113. However, it is apparent from the undertaking and the Commission's ad­ Commission's decision that it carefully ditional letter of 18 February 1987. examined the content of the undertaking itself but took the view that it was inappro­ priate to accept an undertaking from an OEM in those, or similar, circumstances. Like the Commission, I consider that it may be inferred from the wording of Article 10 (a) Infringement of Regulation No 2176/84 of the regulation and from the fact that the Commission enjoys the margin of discretion discussed above that it is free to decline an offer on general grounds which are unrelated to the specific nature of that offer. 111. The Court has consistently held that no Accordingly, where no offer has been made provision of Regulation No 3017/79, now by the producer-exporter and an anti­ Regulation No 2176/84, compels the dumping duty will therefore be imposed on institutions to accept price undertakings the products which it manufactures, the which are offered. On the contrary, it is Commission does not commit a manifest clear from Article 10 thereof that it is for error in taking the view that the acceptance the institutions, in the exercise of their of an offer from an OEM would merely discretionary power, to determine whether I0 complicate matters to no avail. such undertakings are acceptable. It is thus incumbent upon applicants to demon­ strate that the grounds on which an offer of an undertaking was rejected exceed the margin of discretion conferred on the institutions. 114. In any event, in this case the Commission has demonstrated during the written and oral procedure that the under­ taking offered could not have brought about a diminution of expons to an extent 112. According to Nashua, it follows from sufficient to eliminate the harmful effects Article 10(2)(b) that the Commission should resulting from them. The Commission begin by considering whether, if the offer rightly pointed out that an undertaking were accepted, exports would decline to an must terminate an infringement and not extent sufficient to eliminate the injury merely mitigate it, whereas the undertaking caused by the dumped imports. It is not offered by Nashua sought to stabilize the volume of imports at the level which they 9 — Sec for example the judgment of 7 May 1987 in Case had reached during the most recent 256/84 Koyo Seiko v Council [1987] ECR 1899, paragraph 26 12-month period for which figures were 10 — Sec in particular the judgment of 7 May 1987 in Case available. Nashua was therefore proposing 256/84 Kovo SriA-ov Conn «/[ l987 ] ECR 1899, paragraphs 26 and 27.' merely to forgo any increase in imports in

118. As I have explained above, the 115. I should like to add that the Council institutions were not obliged to give such Decision of 9 February 1987, to which the reasons, but could reject the offer on applicant referred, accepting an undertaking grounds unrelated to its specific nature. given in connection with the anti-dumping proceeding concerning imports of paint-, distemper-, varnish- and similar brushes originating in the People's Republic of 11 119. In the event, the reason given by the China, and terminating the investigation Commission for the rejection was the inap- concerned a situation substantially different propriateness of accepting undertakings from the present one. The undertaking in from OEMs (Decision of 27 January 1987), question had been offered by an exporter, and the Council referred to the which was, moreover, an import/export Commission's traditional practice of not organization of a State-trading country. In accepting undertakings from importers the decision the Council concluded that the (paragraph 100 of the contested regulation). effect of the undertaking would be to reduce expons in such a way as to eliminate the injury, and that it was clearly possible to monitor the proper functioning of the undertaking (no doubt because all the 120. I have already observed that the exports originating in the People's Republic institutions were entitled to regard OEMs as of China came from that single source). importers. The Commission pointed to Article 7 of the GATT Anti-Dumping Code, according to which undertakings can be given only by exporters.

intended to comply with existing inter­ 125. If a simple allusion to the difficulties national obligations, in particular those entailed by the acceptance of undertakings arising under the GATT. in a given sector is to be regarded as an adequate statement of reasons, the same must be true of a reference to the various drawbacks associated with the acceptance of undertakings from certain categories of 122. The fact that on two occasions in the economic agents such as importers, past the Commission has accepted under­ including OEMs. takings offered by importers of a very special type, namely European sales subsi­ diaries of Japanese producer-exporters, or companies otherwise associated with 126. Accordingly, I take the view that the Japanese producers, cannot oblige the complaint that the statement of reasons is Commission to act in the same way in the inadequate or incorrect is unfounded. future, and still less to accept undertakings from importers who are not in that situation.

(c) Infringement of the principle of propor­ tionality

123. During the procedure before the Court the Commission also explained that its attitude towards undertakings offered by 127. According to the applicant, the under­ importers was largely dictated by practical taking offered would have eliminated any concerns, in particular difficulties in the injury to Community producers, and the effective monitoring of compliance with imposition of an anti-dumping duty does such undertakings. Those are considerations not confer any greater benefit than the which clearly fall within the margin of solution proposed. discretion which the Court allows the institutions in this context.

in Case C-133/87:

dismiss the application as inadmissible and order the applicant to pay the costs.

in Case C-150/87:

(i) declare the application to be admissible but dismiss it as unfounded and order Nashua to pay its own costs and those of the interveners, the Commission and Cecom;

(ii) order the Council to bear its own costs, pursuant to the first subparagraph of Article 69(3) of the Rules of Procedure, since it was unsuccessful in its submissions disputing the admissibility of the application.

I-766