C-156/87

Mr President, the Commission's decision refusing to Members of the Court, accept that offer of an undertaking is void. Consequently its application is brought against the Commission as well as against the Council. 1. Like Nashua Corporation and its subsi­ diaries, the applicants in Joined Cases C-133/87 and C-150/87, the Gestetner 4. Some of the submissions and arguments group is one of the 'OEMs' (original put forward by the parties are identical or equipment manufacturers) which the similar to those discussed in connection with Council defines in paragraph 8 of Regu­ Joined Cases C-133/87 and C-150/87. lation (EEC) No 535/87 of 23 February Others are supplementary or even new and 1987 imposing a definitive anti-dumping it is those that I shall essentially be duty on imports of plain paper photocopiers considering in this Opinion. As far as the originating in Japan ' (hereinafter: 'the former submissions and arguments are contested regulation') as 'importers who concerned I can confine myself to applying sold these products in the Community under the conclusions which I have reached with their own brand names'. Whilst the plain regard to the Nashua cases. paper photocopiers ('PPCs') sold under the Nashua brand name are manufactured by Ricoh, the maker of Gestetner's PPCs is the Japanese company Mita Industrial Company 5. Unlike Nashua, Gestetner has not Limited (hereinafter: 'Mita Japan') on brought separate actions against the Council whose PPCs Article 1 of the contested regu­ and the Commission. It has brought one lation imposes an anti-dumping duty action against the Council and, to a lesser of 12.6%. extent, the Commission, since it makes it clear that whilst the claim for the annulment of the contested regulation is directed solely against the Council, its claim for the annulment of the Commission decision 2. Gestetner claims that the Court should rejecting its offer of an undertaking is declare that regulation void or, alter­ directed against the Commission and the natively, void in so far as it imposes that Council, for the latter confirmed that anti-dumping duty on PPCs manufactured decision when it adopted the contested by Mita Japan. regulation.

taking is inadmissible. I referred in that duty definitively imposed in the cases of Opinion to the Court's order of 11 Mita and Toshiba and at the rates of November 1987 in Case C-150/87 Nashua v provisional duty applicable in all other Council and Commission [1987] ECR 4421, cases'. in which the Court rejected as inadmissible Nashua's application for the annulment of Council Regulation No 535/87 in so far as the application was also directed against the 9. As regards the applicant's principal claim, Commission. In that order the Court held for the annulment of the whole of the that the Commission's decision to reject an contested regulation, the Council is right to undertaking forms an integral part of the consider it inadmissible inasmuch as it Council's decision-making process culmi­ follows from the Court's judgments of 7 nating in the imposition of a definitive anti­ May 1987 in the cases on small ball­ dumping duty. It follows that the proper bearings (Cases 240, 255, 256, 258 and place for the applicant to take issue with the 260/84 [1987] ECR 1809, 1861, 1899, 1923 Commission's decision rejecting its offer of and 1975, respectively) that where a regu­ an undertaking is in the action brought lation imposes different anti-dumping duties against the Council regulation imposing the on a number of economic agents, a definitive anti-dumping duty. particular economic agent can be indi­ vidually concerned only by those provisions of the regulation which impose a specific anti-dumping duty on it and determine the 7. I shall therefore consider the applicant's amount of that duty, and not by those complaints with regard to that decision later provisions which impose anti-dumping when I discuss the substance of the duties on other undertakings. application brought against the Council. First of all, some remarks are called for regarding the admissibility of that application. 10. The object of the applicant's alternative claim is precisely the annulment of the contested regulation 'in so far as it imposes I — Admissibility an anti-dumping duty of 12.6% on PPCs manufactured by Mita'. The Council puts forward the same arguments against its inadmissibility as in the Nashua case, 8. As in Case C-150/87 the Council claims namely that the applicant is not individually that the application is inadmissible. concerned by the contested regulation even However, the objection of inadmissibility to that limited extent. lodged in this case differs in certain respects in so far as the applicant has submitted alternative as well as principal conclusions, and argues that the application is admissible 11. For my part I propose that the Court on account of Article 2 of the contested should consider the applicant's alternative regulation, which provides that 'the amounts claim admissible for the reasons set out in secured by way of a provisional anti­ my Opinion delivered today in Case dumping duty under Regulation (EEC) No C-150/87 Nashua Corporation v Council 2 2640/86 shall be collected at the rates of [1990] ECR 1-719, at p. 1-742.

13. In that regard I shall confine myself to 15. Gestetner maintains that the price it observing that if the application were to be pays Mita is 'the price actually paid or held to be admissible on that ground, the payable for the product sold for export to applicant should, in any event, be permitted the Community' within the meaning of to rely only on the submissions and Article 2(8)(a) of Council Regulation (EEC) arguments directly connected with the No 2176/84 of 23 July 1984 on protection collection of the provisional duty at the stated against dumped or subsidized imports from 3 rates. But Gestetner has not confined itself countries not members of the European 4 to such submissions, since all of its Economic Community. Since Gestetner is submissions are directed against the impo- completely independent of Mita that price sition of the definitive duty. should have been used for calculating the dumping margin and no adjustment should or could have been made to it.

II — Substance

I-815

OPINION OF MR MISCHO — CASE C-156/87

17. I have doubts about the validity of that 20. Consequently, it is obviously impossible choice of legal basis. In general, the to take the view that the product was Council's position is that Gestetner is not, as purchased, imported and subsequently it claims to be, the exporter of the photo­ resold by Mita Europe or that the latter copiers but the importer. Yet when it comes fulfilled the role normally played by an to determining the export price the Council importer. (Even if it were to be considered no longer regards Gestetner as being any that Mita Europe was a 'third party' more than the first independent buyer. vis-à-vis Mita Japan within the meaning of Article 2(8)(b), the fact remains that it neither purchased nor resold the imported products.)

'In a number of cases, particularly in relation to exporters to " OEMs " ..., exporters' subsidiary companies in the Community act as agents in that they process orders from, forward invoices to, and receive payment from the customers 19. As the Council itself states in its concerned. The Commission accordingly defence, in so doing Mita Europe acts considers it appropriate to adjust the export 'substantially as an agent, or a coordination prices to those customers by 5°/o to take centre, in processing order forms and account of a reasonable amount for agent's actually invoicing certain independent commission on the basis of the best infor­ customers within the EEC' (paragraph 35). mation available to the Commission'.

I-816

GESTETNER HOLDINGS v COUNCIL AND COMMISSION

28. Accordingly I consider that the Council was wrong to apply Article 2(8)(b) of Regu­ lation No 2176/84 in this case. 25. 'In cases where, although the subsidiary company [of the exporter] was not the formal importer, it performed the functions and bore the costs which are normally those of a related importer', that is to say 'took 29. However, I do not consider that the orders, purchased the product from the contested regulation should be annulled on exporter and resold, at generally higher that account. In its rejoinder (paragraphs 31 prices, to, inter alia, unrelated customers' and 32) the Council rightly states that if (first subparagraph of paragraph 15, the Mita Europe played the role of a mere Council rightly departed from the initial agent and were part of Mita Japan's sales position adopted by the Commission, which organization, its costs would form part of adjusted the export price under Article Mita Japan's direct selling expenses, in 2(10)(c) of Regulation No 2176/84 in order which case the institutions would have had to make allowance for any differences in to make an allowance under Article 2(10)(c) conditions and terms of sale with the of Regulation No 2176/84 for differences in comparable normal value (paragraph 16 of selling costs between domestic and export the provisional regulation). sales.

I-817

OPINION OF MR MISCHO —CASE C-156/87

31. Consequently it has by no means been 34. Since, therefore, the two parameters in established that the application of Article question could in fact be compared at the 2(8)(b) of Regulation No 2176/84 led to a same level of trade — that of sales to result different from that of the application OEMs — it may be asked whether it was of the proper provision, Article 2(10)(c). still necessary to make an allowance This being so, I consider that, despite the pursuant to Article 2(10) of the basic regu­ choice of the wrong legal basis, the lation. The applicant itself does not seem submission that the determination of the convinced that such an allowance was export price was unlawful must be necessary, since it concedes in paragraph 56 dismissed. of the application that if the institutions had included in the constructed normal value not only a lower profit element but also a lower level of general, administrative and selling expenses it would not have been necessary to apply Article 2(10). 2. Comparison of normal value and export price

Gestetner in Annex 6 to its application, the 38. First, Article 2(10)(c) provides that institutions certainly did not make an unrea­ allowance may be made for differences in sonable estimate. the level of trade only 'in so far as no account has been taken of them otherwise'. Consequently, it is not sufficient for the applicant simply to raise possible differences in the level of trade in order to justify making an appropriate allowance under Article 2(10)(c). The applicant should also 36. Furthermore, as the Court pointed out have shown that account was not taken of in its judgment of 7 May 1987 in Case those differences by means of other 255/84 Nachi Fujikoshi v Council [1987] adjustments relating to the conditions and ECR 1861, whereas adjustments required terms of sale actually applied (see paragraph for the purpose of constructing the export 17 of the contested regulation). price are made automatically by the Community institutions pursuant to Article 5 2(8) of the basic regulation, those provided for by Article 2(10) may also be made on a 39. Furthermore, Article 2(10)(c) provides claim by an interested party. It added that that 'allowances generally will not be made for differences in overheads and general expenses, including research and devel­ opment or advertising costs'. Since the adjustments claimed by the applicant relate precisely to such expenses, it should have proved 'the existence of [a] special circum­ 'a party making such a claim must prove stance capable of justifying a derogation that its claim is justified, that is to say that 6 from the rule thus laid down'. the difference on which it relies concerns one of the factors listed by Article 2(9), that the difference affects price comparability and lastly, if, as in this case, it is a question particularly of differences in conditions and 40. Gestetner failed to show during the terms of sales, that those differences bear a proceedings before the Court that its direct relationship to the sales under request for an allowance to be made in consideration' (paragraph 33). respect of the level of trade was justified in the light of all those conditions. It can therefore be concluded that there was no manifest error or misuse of powers on the part of the institutions when they took account of the difference in costs and profits as between sales to OEMs and sales 37. In this case, such proof has been to other purchasers, irrespective of the way especially difficult in so far as two in which they did so. presumptions to the contrary set out in Article 2(10)(c) of Regulation No 2176/84 should also have been rebutted. 41. The second submission must therefore 5 — In that case the basic regulation was Council Regulation (EEC) No 3017/79 of 20 December 1979 (OJ L 339, also be rejected. 31.12.1979, p. 1), which was repealed by Regulation No 2176/84 However, the provisions at issue in that case were incorporated with substantially identical wording in 6 — See paragraph 35 of the ludgmcnt of 7 May 1987 in Case Regulation No 2176/84. 255/84 Nach, Fujikmhiv Council[I987J ECR 1861

'the dumped ... imports are, through the 'the question of whether the term effects of dumping ..., causing injury, i.e. "Community industry" in Article 4(5) of causing or threatening to cause material Regulation (EEC) No 2176/84 should injury to an established Community industry include Community producers who import or materially retarding the establishment of dumped goods is a matter which can only such an industry'. be decided on a case-by-case basis and in the light of all relevant facts regarding the nature of the links between Community producers and the exporters concerned'. 43. According to Article 4(5) the term 'Community industry' is to be interpreted as referring to 45. Apart from the fact that that conclusion makes completely irrelevant the reference to the practice allegedly followed in other 'the Community producers as a whole of the earlier cases, it also makes it clear that in like product or to those of them whose order for the submission that Article 4(5) of collective output of the products constitutes the basic regulation was infringed to be well a major proportion of the total Community founded it is not sufficient for there to have production of those products except that: been 'proper grounds' for or the possibility of excluding certain manufacturers from the category of 'Community industry'. On the contrary, the institutions have a wide (i) when producers are related to the discretion in this connection and therefore exporters or importers or are them­ the inclusion of the producers concerned selves importers of the allegedly must have been based on substantively dumped. .. product the term incorrect facts or on manifestly wrong "Community industry" may be inter­ assessments of the facts or must constitute a preted as referring to the rest of the misuse of powers. producers;

Council made such errors or was guilty of a Council's assertion in paragraph 52 of the misuse of powers. contested regulation, it takes account not only of direct imports of PPCs but also of imports of kits and components (see paragraph 78 of the application). At the same time, it takes no account at all of the 47. The part of the contested regulation Council's other more general statement in which deals with the definition of that paragraph to the effect that over the period 1981 to July 1985 Rank Xerox's Community industry is one of the longest resales of Fuji Xerox imports represented and certainly the most explicit parts of the less than 1% of its sales and rentals of new whole regulation. According to the opening machines in all the segments covered by the paragraph of that part (Section (iii) of proceeding. Chapter H ('Injury')) of the contested regu­ lation, it was precisely because all the Community producers concerned had links of either a corporate or a commercial nature with Japanese exporters that the Commission carried out a 'detailed exam­ 50. Likewise, in order to challenge the ination of the position of each of the Council's assertions in paragraph 58 of the complainant companies based on the contested regulation as to the value added specific facts pertaining to each company's in the Community for PPCs manufactured situation'. Moreover, a comparison of para­ by Rank Xerox in the range segment 1 to graphs 50 to 77 of the contested regulation segment 4, Gestetner relies essentially on and the various complaints made by considerations relating to segments 1 and 2 Gestetner does not in any way suggest that (see especially paragraphs 81 and 82 of the the Council, which confirmed the various reply). However, apart from the fact that conclusions of the Commission, failed to the figures put forward by Gestetner in this examine any of the aspects mentioned. regard are within the 20 to 35 % range referred to by the Council in paragraph 55 of the contested regulation, it seems to me entirely legitimate that for the purposes of its final finding as to whether Rank Xerox 48. Besides, the only two genuine factual should be part of the 'Community industry' claims are more apparent than real and are the Council should have taken account of due, on the one hand, to Gestetner's the weighted average value added in the lumping together imports of completely Community for all PPCs manufactured by assembled PPCs and components and, on Rank Xerox in the range segment 1 to the other, to the distinction which it makes segment 4. As the Council itself points out between PPCs in segments 1 and 2 in paragraph 58 of the contested regulation, (low-volume copiers) and PPCs in the other segments covered by the proceeding.

part of Community industry just in terms of or is not to be excluded from the definition its production of one model or a limited of Community industry because of its range of models'. corporate or commercial links with exporters or importers of the product concerned, the question whether it may have inflicted injury on itself or contributed to the injury caused to Community industry 51. Since, therefore, the facts relied on by must also be examined in the light of those the Council are not themselves genuinely factors, that is to say the volume imported called into question or capable of being by that manufacturer, the price advantages challenged, the dispute hinges above all on which it obtained and in particular the the way in which the Council assessed them prices at which it resold the imported and in particular the legal consequences products and their impact on other aspects which it inferred from those facts. of the production of that manufacturer itself or of other manufacturers. Those factors must also be assessed in a general manner by weighing up the pros and cons of each factor and, where appropriate, giving 52. It must first be observed in that priority to the findings made in respect of connection that in order to determine some of those factors over others. What is 'Community industry' the institutions must decisive is the final general conclusion necessarily carry out a general assessment of whether or not Community manufacturers the situation. Article 4(2) of Regulation No helped to cause the injury — judged in 2176/84 provides that the examination of terms of all those factors — which was injury is to involve several factors 'no one or sustained by those manufacturers themselves several of which can necessarily give or by the rest of the Community industry. decisive guidance'. Those factors are the volume and the prices of dumped imports and their impact on the industry concerned. Under that provision the institutions may when determining the injury sustained attach more weight to one of those factors 54. In this case the institutions did carry out than to the others. Similarly, as appears such an assessment. It is clear from several from the Court's judgment of 5 October paragraphs in the contested regulation that 1988 in Joined Cases 277/85 and 300/85 they were perfectly aware of factors which Canon v Council [1988] ECR 5731, the list considered in isolation might have weighed in Article 4(2)(c) of economic factors which in favour of excluding certain manufacturers are to be taken into consideration in order from the definition of 'Community to assess the impact of the volume and industry'. For example, in paragraph 58 the prices of the dumped imports on the Council states that there were Community industry concerned is merely indicative and the institutions are therefore free to take only some of them as a sufficient basis for forming a judgment (see the end of paragraph 56 of that judgment). 'doubts as to whether Rank Xerox's manu­ facturing operations in the United Kingdom were sufficient to confer upon it the status of a Community producer in the sense of 53. In deciding whether, for the purpose of Article 4(5) of Regulation (EEC) No determining injury, a given manufacturer is 2176/84, for segments 1 and 2 copiers',

'has not affected Tetras' position either as a Community producer or as a complainant and consequently Tetras remains part of the Community industry for the purposes of this proceeding'. 55. Similarly, as regards the situation of Océ and Olivetti the Council listed in paragraph 71 of the contested regulation a whole series of arguments to the effect that in the final analysis even though those two Since the paragraph in question is in companies did import PPCs at dumping Chapter H , 'Injury', it must be accepted prices and distributed them on an OEM that that conclusion relates to Article 4 of basis, they did not cause injury to them­ Regulation No 2176/84, which is also selves. It pointed out in particular that they entitled 'Injury', and not to Article 5, did so in order 'to offer a full range of 'Complaint', as the Council suggests in models to their customers' (see the second paragraph 102 of its defence. indent of paragraph 71). However, contrary to Gestetner's arguments (in paragraphs 71 and 72 of the application), that consideration, especially in conjunction with the finding that the total volume of such 57. However, what clinches the matter for imports was low and that they were sold at me is the fact that, as the Council has higher prices then those charged by their correctly pointed out, the situation of Tetras suppliers, is perfectly capable of justifying was not taken into consideration for the the conclusion that those companies did not purposes of assessing injury or in fixing the injure themselves or other Community rate of anti-dumping duty. According to producers and therefore of enabling them to paragraph 107 of the contested regulation, be included in the category of 'Community the duty required to offset the injury to industry' for the purposes of determining Community producers of PPCs was injury. In any event, the Court held such an calculated without the inclusion of any data approach to be valid in its judgment of for Tetras. Moreover, in determining the 5 October 1988 in Joined Cases 260/85 and magnitude of the injury to be offset in that 106/86 Tokyo Electric Company v Council way, only the declines in profits of Rank [1988] ECR 5855 (see paragraph 47). Xerox, Océ and Olivetti were taken into

59. Consequently, the third submission is 62. Secondly, the Council's appraisal must also unfounded. necessarily be comprehensive in scope, balancing all kinds of — sometimes conflicting — interests and covering the long as well as the short term. Accordingly, 4. Community interest even if its appraisal of a particular aspect, taken in isolation, might be questionable, that would not necessarily mean that its overall appraisal would have to be regarded 60. According to Article 12(1) of Regu­ as wrong. lation No 2176/84 anti-dumping duty may be imposed inter alia only 'where the facts as finally established show that ... the interests of the Community call for Community intervention'. Gestetner claims that in this case the Council has failed to 63. It is sufficient to refer to paragraphs 88 take due account of the interests of the to 99 of the contested regulation to see, Community. It criticizes the Council above first, that 'the views of all the Community all for failing to take account of the producers, Japanese exporters, and structure of the market, in particular its importers in the Community, notably the degree of concentration, and the inevitable OEMs' (paragraph 88) were in fact impact — in view of the market considered and, secondly, that the Council structure — of the imposition of anti­ took account of both the competitive dumping duty on competition and prices situation on the market (paragraph 94) and and, as a result, on the consumer. any price increase likely to follow the impo­ sition of anti-dumping duty (paragraph 98) and reached the conclusion that 'on balance,

65. As for the structure of the market, in the first place it is not clear that Rank 66. In addition, the take-over during the Xerox, the biggest Community manu­ proceeding of one of the complainants by a facturer, has a dominant position on that Japanese exporter gave the Council market, as Gestetner considers (so much so legitimate grounds for doubts as to the that in September 1986 it lodged a possibilities of survival of an independent complaint against Xerox Corporation, the Community industry. Moreover, the disap­ parent company, alleging that Article 86 of pearance of Community manufacturers the EEC Treaty had been infringed). would foster the development of an oligo­ Although it takes the view that the market polistic market situation just as much as the as a whole should have been taken into possible departure of Japanese exporters. consideration, Gestetner relies exclusively The fact that the Council gave preference to on statistics for the number of copies in the Community industry in those circum­ order to illustrate its claim, but has to stances was certainly in the interest of the concede that a different view emerges if the Community. market is examined from the point of view of the number of photocopiers sold (see paragraphs 98 to 100 of the reply). Furthermore, and leaving aside the fact that 67. Besides, it does seem that the devel­ it is not for the Council to prejudge, in an opment predicted by the applicant has not anti-dumping proceeding, a decision which come to pass. None of the competitors has the Commission will have to take in a proceeding under Council Regulation No 9 — Council Regulation (EEC) No 2322/85 of 12 August 1985 8 imposing a definitive anti-dumping duty on imports of 17 of 6 February 1962, the fact that in the glycine originating in Japan, OJ L 218, 15.8.1985, p. 1. reference period covered by the anti­ 10 — See in that connection paragraph 18 of Regulation No 2322/85, which must be read in the light of paragraph 31 of Commission Regulation No 997/85 of 18 April 1985 8 — First Regulation implementing Articles 85 and 86 of the imposing a provisional anti-dumping duty on imports of Treaty, OJ, English Special Edition 1959-62, p. 87. glycine originating in Japan (OJ L 107, 19.4.1985, p. 8).

69. Consequently, the fourth submission must also be rejected. 72. In those circumstances, Community manufacturers would suffer as much injury as they would in the absence of the under­ taking. The only effect of an undertaking given by an importer is to reduce injury to 5. The rejection of the offer of an undertaking distributors of Community-produced goods, which is not the same thing as eliminating injury to Community producers.

70. Gestetner's arguments in this connection are largely identical to those put

II — Council Regulation (EEC) No 1761/87 of 22 June 1987 amending Regulation (EEC) No 2176/84 on protection 73. Furthermore, if an undertaking were to against dumped or subsidized imports from countries not be accepted from one importer, under­ members or the European Economic Community (OJ L 167,26.6.1987, p. 9). takings would have to be accepted from all

I-826

GESTETNER HOLDINGS v COUNCIL AND COMMISSION

other importers in the same position. The stances, effective supervision of the under­ number of exporters is (usually) limited: if it takings would become excessively difficult. is excessive, undertakings are not accepted. In contrast, the number of potential 74. I propose that the Court should also importers is always very large. These accept those arguments of the institutions: arguments would still hold good even if they do not reflect any manifest error of Gestetner could be regarded as an exporter, appraisal and are therefore within the very since the number of potential exporters wide discretion which the Court has held which are not producers could also be very that the institutions enjoy. The submission large. Lastly, the number of types of photo­ relating to the rejection of the offer of an copiers is quite large. In those circum­ undertaking must therefore also be rejected.