T-164/94

v

Council of the European Union, represented by Ramon Torrent and Jorge Mon- teiro, of the Legal Service, acting as Agents, assisted by Hans-Jürgen Rabe and Georg Berrisch, Rechtsanwälte, Hamburg, with an address for service in Luxem- bourg at the office of Bruno Eynard, Manager of the Legal Affairs Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer,

defendant,

* Language of the case: English.

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THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fourth Chamber, Extended Composition),

composed of: K. Lenaerts, President, R. Schintgen, C. P. Briët, R. García- Valdecasas and P. Lindh, Judges,

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Registrar: J. Palacio González, Administrator,

having regard to the written procedure and further to the hearing on 3 May 1995,

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from countries not members of the European Economic Community (OJ 1988 L 209, p . 1, hereinafter 'Regulation N o 2423/88' or 'the basic regulation'), and offi- cially notified the exporters and importers known to be concerned and the repre- sentatives of the exporting country.

4 Ferchimex SA ('the applicant' or 'Ferchimex'), a company incorporated under Bel- gian law, the majority of the shares in which are held by the producers concerned and by Agrochimexport, the Russian fertilizer export organization, officially imports potash from Russia and Belarus into the Community, and was involved in the proceeding in that capacity.

5 It is common ground between the parties that potash from the former Soviet Union was imported Officially' and 'unofficially', imports of the first kind being chan- nelled through the central export organization, Agrochimexport, and through importers in the Community and Switzerland associated with the Soviet exporters, including, in particular, the applicant, whilst imports of the second kind, also k n o w n as 'perestroïka potash', were sold by the producers to various clients in the former Soviet Union, who resold it through intermediaries to independent import- ers and traders in the Community.

6 Ferchimex maintains that, as an official importer operating on the European mar- ket for some twenty years, it had nothing to gain from adopting an aggressive com- mercial policy which might upset the Community market. Consequently, it was not involved in the 'perestroïka imports' which, it claims, gave rise to the anti- dumping proceeding in the present case.

'In the case of imports from non-market economy countries ..., normal value shall be determined in an appropriate and not unreasonable manner on the basis of one of the following criteria:

(a) the price at which the like product of a market economy third country is actu- ally sold:

(i) for consumption on the domestic market of that country; or

(ii) to other countries, including the Community ...'.

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is Amongst the exporters, only those operating through the official channels cooper- ated in the proceeding. In accordance with Article 2(8)(b) of the basic regulation, the export price was determined on the basis of the prices actually paid by the first independent customer in the Community of the importers associated with the exporters, namely Ferchimex and Fersam (recitals (17) to (19) of Regulation N o 1031/92).

u With regard to injury, the Commission's conclusions were based mainly on the finding that imports of potash originating in the Soviet Union rose by 109% between 1986 and the first half of 1990, that Soviet imports increased their market share from 5.10% to 10.8% over that period whilst the Community industry's sale prices fell by 12%, and that the Soviet producers' prices undercut those of the Community producers by, on weighted average, about 3 % (recitals (24) to (33) of Regulation N o 1031/92).

i7 Following the publication of the Commission regulation in the Official Journal, two importers of the product, Kemira and Ameropa, not associated with the exporters, sent their comments to the Commission by letters dated 21 and 27 May 1992 respectively, in which they contested, in particular, the choice of Potacan as the 'reference company' on the ground that it is owned by the complainant Com- munity producers.

is Following the imposition of the provisional anti-dumping duty by Regulation N o 1031/92, the exporters, the Community producers and certain importers requested and obtained an opportunity of making their views known and of being heard by the Commission.

Procedure

23 It was in those circumstances that the applicant brought the present action before the Court of Justice, by application lodged at the Registry of the Court of Justice o n 11 January 1993.

24 By applications lodged at the Registry of the Court of Justice on 18 May 1993, the Commission and APEP sought leave to intervene in support of the form of order sought by the defendant. The Commission and APEP were granted leave to inter- vene by orders of the President of the Court of Justice of 25 June 1993 and 15 November 1993 respectively, and lodged their observations on 11 October 1993 and 2 February 1994.

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25 By order of 18 April 1994 the Court of Justice referred the case to the Court of First Instance pursuant to Article 4 of Council Decision 93/350/Euratom, ECSC, EEC of 8 June 1993 amending Decision 88/591/ECSC, EEC, Euratom establishing a Court of First Instance of the European Communities (OJ 1993 L 144, p. 21) and Council Decision 94/149/ECSC, EC of 7 March 1994 amending Decision 93/350/Euratom, ECSC, E E C (OJ 1994 L 66, p. 29).

JUDGMENT OF 28. 9. 1995 — CASE T-164/94

— take all such further action as the Court may in its wisdom deem appropriât

— order the Council to pay the costs.

29 The defendant contends that the Court should:

— dismiss the action;

— order the applicant to pay the costs.

FERCHIMEX v COUNCIL

Admissibility

Arguments of the parties

32 The Council points out that the applicant is associated not only with Agrochimex- port, the former sole official Soviet export-import organization, but also with sev- eral non-Russian companies. In non-market economy countries, only the State export organizations have the capacity to bring an action under Article 173 of the E C Treaty. The question therefore arises whether an import company which, as in the case of the applicant, is not wholly owned by the exporter or exporters can be regarded as an associated importer, within the meaning applied to that term by the Court of Justice (judgment in Joined Cases C-305/86 and C-160/87 Neotype v Commission and Council [1990] ECR 1-2945).

33 The applicant maintains that the anti-dumping proceeding was of direct and indi- vidual concern to it from its initiation until the imposition of the definitive duty. It points out in that regard that it was one of the importers identified by the Com- mission when the proceeding was opened, that it received a questionnaire and was subject to verification at its premises, that it had a number of meetings with Com- mission officials, that it submitted written comments on 21 September 1992, and that it was named in Regulation N o 1031/92 as an importer related to the export- ers. It points out, lastly, that the Commission used the prices charged by it on the Community market in order to calculate the export price.

Findings of the Court

37 It follows from the foregoing that the action brought by the applicant is admiss- ible.

Substance

38 The applicant advances nine pleas in support of its application. The first plea alleges infringement of Article 2(5) of the basic regulation and Article 190 of the E C

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Treaty, in that the Council failed to determine normal value in an appropriate and not unreasonable manner and did not provide an adequate statement of reasons. By its second plea, the applicant submits that the assessment of injury was illegal, in that no account was taken of the role played by the complainants as importers, and the Community institutions used information which was out of date. The third plea alleges infringement of Article 4 of the basic regulation, in that imports from other countries were not taken into account when injury was determined. By its fourth plea, the applicant submits that the form in which the anti-dumping duty was imposed is contrary to the spirit of Article 13(3) of the basic regulation and has had the effect of removing it from the market. The fifth plea alleges illegal use of out-of-date information for the purposes of laying down protective measures. By its sixth plea, the applicant asserts that the Commission infringed Article 7(1 )(b) and Article 7(4)(a) of the basic regulation by failing to notify the representatives of Russia, Belarus and Ukraine of the anti-dumping proceeding. The seventh plea alleges breach of the applicant's right to a fair hearing. The eighth plea alleges infringement of Article 7(9)(a) of the basic regulation, in that the length of the investigation was excessive. Lastly, by the ninth plea the applicant alleges that the selection of the investigation period was unfair and arbitrary and that no reasons were given for choosing it.

40 The applicant submits, first, that, by relying exclusively on information supplied by one Canadian company, Potacan, owned by the two main European complain- ants, the Commission did not determine normal value in an appropriate and not unreasonable manner in accordance with Article 2(5) of the basic regulation, and that it disregarded the principle of fairness, which, in the interests of transparency, objectivity and justice, requires the Commission to use neutral information sup- plied by companies having no link with the other parties in the matter, in partic- ular the complainants. Those failures are all the more serious in that neither the applicant nor the Council nor the Court can know whether the information supplied by Potacan was given in good faith and was not influenced by the com- plainants.

43 The Council observes that, upon being informed of the Commission's intention to use the method laid down in Article 2(5)(a) of the basic regulation for the deter- mination of normal value and to take Canada as the reference country, neither the applicant nor the exporters objected to the Commission's choice. It points out that the Community institutions enjoy a wide discretion in the choice of reference country. The Council contends that in the light of the criteria generally applied in the previous practice of the institutions, as confirmed by the Court of Justice (judg- ment in Neotype v Commission and Council, cited above, paragraphs 31 to 33), Canada was in fact the only possible choice of reference country, since it is the only country where the production methods, the quantities produced and access to raw materials are comparable to those of the former Soviet Union.

44 The Council maintains that the Commission made every effort to obtain infor- mation relating to the Canadian market. It points out in that regard that the Com- mission twice approached the largest Canadian company engaged in the sale of potash, the Potash Corporation of Saskatchewan ('PCS'), but that that company

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indicated that it refused to cooperate and that it would only provide information within the public domain. Consequently, the Commission was unable to use in- formation from that source. It was also met with a refusal to cooperate by the Potash Company of America, established in N e w Brunswick. Lastly, the Council points out that following the initial refusal by PCS, the Commission contacted Potacan, which replied on 12 February 1991 that it would not cooperate either, and that it was only in consequence of the Commission's second letter of 12 September 1991 that Potacan replied, on 11 October 1991, to the questionnaire and indicated its willingness to cooperate.

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parties, such as exporters, that have an interest in the outcome of the proceeding. The Commission was thus entitled to use information from a source presumed to be 'partisan', once it had verified that it was correct. Third, given the existence of a very competitive primary product market and the fact that DPPC's production represents only about 10% of Canadian production and 8.15% of Canadian sales, Potacan was not in a position to influence prices on the Canadian market. Lastly, the Commission did not confine itself to verifying Potacan's sale prices but also compared them with prices quoted by Potacan's Canadian competitors and found them to be in line with such prices.

47 The Council maintains that Potacan was a reliable source of information and that there was, besides, no reasonable alternative.

48 In its reply, the applicant points out that the Commission's assertion that it ensured that Potacan's sale prices corresponded to the market is not borne out by anything in the contested regulation or the Commission's communications. It was unable, therefore, to contest the Commission's methodology.

49 For all the foregoing reasons, the applicant considers that the choice of Canada as reference country was inappropriate and unreasonable, and it maintains that it would have been more appropriate, having regard to the circumstances, to choose the United States market, as previously suggested by Ameropa in its response to the questionnaire dated 12 December 1990.

53 The applicant observes that the study forming Annex 9 to the application shows that the Canadian potash market is located in two different areas. The first of these is the province of Saskatchewan, where there are seven companies operating, including, in particular, the largest Canadian producer, PCS. Saskatchewan is the

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pre-eminent potash producing region of the world; production costs and capital expenses there are relatively low, and in view of its central location its products are sold principally in the Canadian domestic market. The other area is New Bruns- wick, located close to the east coast ports of Canada, the mines in which provide only a small proportion of Canadian production, and where producers such as Potacan concentrate their sales efforts on the export market. The applicant notes the Council's acknowledgement, in recitals (7) and (8) of the contested regulation, that, by reason of its location and the recent commencement of operations at the mine, Potacan's production costs were higher than Canadian and United States market prices. In those circumstances, the Commission's decision to rely solely on Potacan's prices on the Canadian market in order to establish normal value con- stituted a manifest error of judgment.

54 Lastly, the applicant maintains that the reasoning set out in the recitals in the pre- amble to the regulation is summary, confused, contradictory and contrary to nor- mal practice. It states in particular that the Community institutions have thus not explained what is meant by the 'temporary and exceptional costs' or the 'special situation', nor how they calculated the adjustments needed in order to take those factors into account. It follows that Article 190 of the Treaty has been infringed (judgment of the Court of Justice in Case 264/82 Timex v Council and Commis- sion [1985] ECR 849, paragraph 25).

59 Lastly, it maintains that Article 2(5)(a)(i) and (ii) of the basic regulation provides that the Commission may establish normal value on the basis either of sale prices on the domestic market of the reference country or of prices charged by that coun- try on sales to other countries, but n o t by combining the two methods. The use of the conjunction 'or' between sub-subparagraphs (i) and (ii) of the provision in question clearly shows that those two methods are mutually exclusive.

eo The Council maintains that, by reason of the low volume of Potacan's sales of standard grade potash on the Canadian market compared with the quantities imported into the Community from the former Soviet Union, the institutions were entitled to combine Canadian domestic market prices and the prices charged on

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exports to the United States, since that combination gave a more representative and reliable picture. This was a feasible step to take, since Canada and the United States form one large market by reason of the absence of customs barriers and the fact that potash is used in both countries for identical purposes. The Council adds, moreover, that the volume of Potacan's sales in Canada was so low compared with its sales to the United States that they had no influence on the outcome of the cal- culation of normal value.

6i The Commission asserts that there is no provision requiring it to inform interested parties of the method by which normal value is to be calculated when the proceed- ing is opened. It is not until the stage of notification of the main facts and consid- erations on the basis of which action is to be taken that it is bound to inform those parties, as was done in the present case. Next, it contends that Article 2(5)(a) of the basic regulation authorizes the combined use of the methods referred to in sub- subparagraphs (i) and (ii), since the word 'or' linking them must be taken to mean, as it usually does in most languages, 'and/or'. In the present case, the institutions considered that the combined use of the methods referred to in (i) and (ii) produced a more representative price.

65 According to the Council, the applicant's reference to an American anti-dumping measure applied in 1987 against the Saskatchewan producers is misleading and irrel- evant, since it did not apply during the investigation period.

Findings of the Court

66 Article 2(5) of the basic regulation provides that: 'In the case of imports from non- market economy countries ..., normal value shall be determined in an appropriate and not unreasonable manner on the basis of one of the following criteria: ...'. It is thus apparent from the scheme and wording of that provision, and in particular the use of the phrase 'not unreasonable', that the determination of normal value falls

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within the wide discretion enjoyed by the institutions in analysing complex econ- omic situations.

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particular, the largest Canadian producer, PCS, established in Saskatchewan, stated, despite the Commission's insistence, that it refused to cooperate and merely pro- vided certain information within the public domain which was inadequate for the purposes of determining normal value. It should further be noted that the applic- ant does not deny that the Commission made every effort to obtain information relating to the Canadian market from sources other than Potacan.

70 Canada must therefore be regarded as an appropriate reference country, and it must be concluded that the Commission had no alternative but to use the information emanating from Potacan.

7i As regards the link between Potacan and the Community producers, the Court notes that the applicant has merely contended, in its application, that that link was in any event such as to render the information emanating from Potacan unreliable, but without adducing any concrete evidence whatever to show that the adjustments made by the Commission in order t o bring the sale prices into line with normal value were not made in an appropriate and not unreasonable manner, nor even to explain how the link could have influenced the information provided.

72 The institutions have stated, without being contradicted by the applicant, that the information provided by Potacan was verified by the Commission in the course of on-the-spot checks, by reference to invoices and accounting documents of D P P C and Potacan which were prepared in accordance with Canadian accounting legis- lation at a time when Potacan and D P P C could not have surmised that the anti- dumping proceeding in question would be initiated nor, a fortiori, that they would be involved in it. It should be noted, moreover, that the information provided relates to a period — the investigation period — when the Community producers did not have a controlling interest in the mining undertaking D P P C . It should also be recalled, first, that, as the applicant acknowledges, the institutions determined normal value by using the prices charged by Potacan on a wholly competitive basis

76 It follows that the first part of the first plea is unfounded.

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77 As regards the submission concerning the allegedly unrepresentative character of Potacan, the Court finds, first, that it is transparently clear from recitals (7) and (8) of the contested regulation that the institutions specifically considered that Pota- can's production costs should not, in the light of its particular situation, be taken into consideration, but instead determined normal value from its sale prices. It fol- lows that the arguments regarding the exceptional costs which that company was bearing by reason of its geographical location or its particular economic situation are wholly irrelevant.

78 Next, the Court notes that, despite having been informed since its meeting with the Commission on 5 November 1991 of the methods used to calculate the dumping margin and of the fact that Potacan was the only undertaking in the reference coun- try chosen which had agreed to cooperate, the applicant has failed to adduce, either during the administrative procedure or even in its pleadings or at the hearing before the Court, any evidence to show that Potacan's sale prices are not representative of the Canadian market.

82 It should be recalled in that regard, first, that Article 2(5) of the basic regulation lays down the guiding principle that normal value is to be determined in an appro- priate and not unreasonable manner. Consequently, that provision cannot be inter- preted as precluding the institutions from determining normal value in a specific case by means of combined use of the methods provided for in Article 2(5)(a)(i) and (ii), if that combination does in fact make it possible to obtain a result which is more reliable and more representative.

83 It was the institutions' contention, which has not been contradicted by the appli- cant, that the volume of sales of standard grade potash on the Canadian market, taken as a whole and not only those of Potacan, was too small to be representative.

84 Next, the Court notes that recital (15) of the Commission regulation and recital (8) of the contested regulation state that the institutions considered that it was reason- able and appropriate to establish normal value on the basis of Canadian and US prices, on the ground that Canada and the United States form one large

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competitive potash market which, by reason of the absence of customs barriers and the fact that the product is used in both countries for identical purposes, has the characteristics of a single market.

87 Lastly, the applicant's contention that none of the parties was given an opportunity to challenge the statement regarding the large competitive market prior to pub- lication of the contested regulation imposing the anti-dumping duties is also

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incorrect. N o t only did that statement appear in the Commission's letter of 10 August 1992, but it had also been explained in the interim regulation of the Com- mission of 23 April 1992.

88 The Court finds, moreover, that there are numerous documents in the case which confirm the fact that Canada and the United States must be regarded as one large competitive market. By way of example, the European Fertilizer Import Associ- ation suggested, in its letter to the Commission of 31 October 1991, that potash sales in Canada and the United States should be regarded as domestic sales. Similarly, it is apparent from the documentation that, for accounting purposes, the Canadian statistics treat both sales of potash in Canada and exports to the United States as domestic sales.

89 It follows from all of the foregoing that the method adopted by the institutions in order to determine the normal value of standard grade potash is in accordance with Article 2(5) of the basic regulation. Consequently, the arguments set forth in the third part of this plea must also be rejected.

The second plea: the assessment of injury was illegal since no account was taken of the role played by the complainants

Arguments of the parties

92 The applicant's second plea is based on four arguments concerning an alleged failure to take account, in the analysis of injury, of the complainants' role as importers.

93 First, the applicant asserts that the institutions failed to apply Article 4(5) of the basic regulation, which provides that 'when producers are related to the exporters or importers or are themselves importers of the allegedly dumped or subsidized product the term "Community industry" may be interpreted as referring to the rest of the producers ...'. In view of the considerable quantities of the product imported by Kali and SCPA, the applicant considers that the provision in question should

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94 Second, the applicant maintains that the institutions failed, in their evaluation of injury, to take account of the extent to which the complainants contributed to their own injury ('self-inflicted injury') by their very extensive imports of potash. In its view, the institutions completely ignored the impact of the control exercised by Kali and SCPA over imports of potash into the Community. It points out that recital (17) of the contested regulation states, on the contrary, that the Community producers themselves did not contribute to the injury sustained. The applicant draws attention to the State monopoly enjoyed by SCPA in France as regards imports of potash from third countries and to the requirement for a visa, granted by SCPA on government authority, for all imports from the countries in question. O n the strength of that legal monopoly, SCPA has concluded exclusive marketing agreements with Campotex in Canada, with the Arab Potash Company in the Mid- dle East and with Ferchimex in relation to potash from the member countries of the Commonwealth of Independent States ('CIS'). Even imports into France of potash originating in Germany and Spain, whilst free from restrictions by virtue of the Community rules, are channelled through SCPA. The applicant also contends that Kali and SCPA have established, individually or jointly, import operations in key Western European markets. That collaboration between SCPA and Kali explains the minimal volume of trade between France and Germany, despite the fact that France is import-dependent for a significant proportion of its consump- tion and Germany produces a surplus. The applicant further states that, according to Eurostat statistics, no potash was imported into Spain or Germany from the Soviet Union in 1988, 1989 and 1990, and hardly any into the United Kingdom. The applicant points out that SCPA apparently doubled the volume of its imports of potash originating in Russia and Belarus, by purchasing 250 636 tonnes through Ferchimex, in the year following its submission of the anti-dumping complaint. The applicant also emphasizes the fact that on 27 July 1990, shortly before the opening of the anti-dumping proceeding but immediately after the expiry of the

95 Third, the applicant asserts that the Commission and the Council were under a duty, when assessing injury, to weigh the effect of 'unofficial' imports against the volume of imports channelled through the European producers' extensive network of importing agreements, those producers having imported large quantities of pot- ash from all sources. It alleges that the dumping and consequent injury, within the meaning of the anti-dumping rules, could only have been the result of 'unofficial' imports, and considers that the institutions were under a duty to explain the extent to which injury was caused by 'uncontrolled' exports, the volume of which is small by comparison with the 780 000 tonnes imported from the Soviet Union through the European producers' network. Even though the 'unofficial' exporters refused to collaborate, the Commission could, on the basis of the experience and docu- mentation made available by Ferchimex and the complainants, have drawn a rela- tively precise distinction between official and unofficial imports and assessed injury accordingly. Since there is nothing to indicate that the Commission or the Council performed those calculations, the applicant concludes that the decision assessing injury is insufficiently reasoned.

96 Fourth, the applicant contends that the Community institutions failed to update the economic data on which they based their conclusions concerning injury. The only figures available in respect of Community potash consumption and Soviet potash imports are extrapolated figures for 1990, and no figures at all are given for 1991. Whilst acknowledging that the institutions have a measure of discretion in determining the period over which they assess injury, the applicant considers that in the present case they exceeded the limits of their discretion by failing to assess injury sustained during the course of the investigation.

100 The Council maintains, second, that the imports of Soviet potash by Kali and SCPA cannot have contributed to the injury suffered by the Community industry ('self-inflicted injury'), since they imported, solely on the basis of long-term con- tracts, only 15% of the total imports from that country during the investigation

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period, representing only 2.3% of all sales by the Community industry, and resold the product at normal market prices. The Council contends that it took account of those imports by the two European producers and that recital (17) of the contested regulation, which states that 'the Commission investigation, moreover, did not yield any findings proving or likely to constitute proof that the Community pro- ducers' management practices could have contributed to the injury sustained', refers to the practice of importing potash from the former Soviet Union.

101 A P E P adds that the protection measures implemented pursuant to Article 115 of the Treaty were necessary in order to protect the French market, during the time between the initiation of the anti-dumping proceeding and the imposition of the duty, against the influx of substantial quantities of potash imported at extremely low prices from the CIS and bound for the French market via the ports of other Member States.

102 Third, the Council maintains that the relationship between Official' imports and 'perestroïka potash' is irrelevant and that the Community institutions took into consideration all imports originating in the former Soviet Union, which rose by 109% between 1986 and the investigation period, and the market share of which increased from 5.1% to 10.8%.

106 The Commission states that the injury must have been caused by the dumping which is established and must relate to the period during which the dumping occurred. In the interests of objectivity, legal certainty and the expeditious conduct of the investigation, that period must be clearly and precisely defined.

107 In its reply, the applicant points out that the subsidiaries of SCPA and Kali in Bel- gium, the Netherlands and the United Kingdom imported potash from the former Soviet Union, inter alia through Ferchimex. Those imports were not even referred to in the regulations at issue, let alone discussed with reference to Article 4(5) of the basic regulation. Given the central role played by SCPA in the lodging of the complaint, the fact that, in France, imports from Ferchimex were effected solely through SCPA is of crucial importance. The issue here is not 'Community produc- ers' management practices' but the fact that the Community anti-dumping rules

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provide that where a complainant undertaking is also an importer (with clear responsibility for price negotiations) of the product which is alleged to be dumped, that factor requires careful analysis and explanation in the findings relating to injury. A company which is faced with anti-dumping duties consequent upon trade with a complainant company is entitled to know, in accordance with Article 190 of the Treaty, the Commission's reasons for penalizing such trade.

ios Next, the applicant submits that, since the Council acknowledges that the imports by Kali and SCPA did not contribute to the injury suffered by the Community industry and that it conducted the bulk of its trade in the Community with or through the complainants, the effect of its sales could not have been injurious. Con- sequently, the institutions should have tailored the measures imposing duties in such a way as to exempt its operations from those measures.

m It must be recalled that the effect of Article 4(5) of the basic regulation is that it is for the institutions, in the exercise of their power of assessment, to determine whether they should exclude from the Community industry producers who are themselves importers of the dumped product. That power of assessment must be exercised on a case-by-case basis, by reference to all the relevant facts (judgment of the Court of Justice in Case C-156/87 Gestetner Holdings v Council and Commis- sion [1990] ECR 1-781, paragraph 43).

in The Court observes in that regard that the institutions considered it inappropriate to exclude SCPA and Kali from the Community industry on the ground that, dur- ing the investigation period, those two companies imported only 15% of the total potash imported from the former Soviet Union, and that the sales of the imported products represented only 2.3% of all sales by the Community industry.

in Furthermore, although in its written pleadings before the Court the applicant merely described the volumes imported by the producers in question as consider- able, without providing any figures whatever in that regard, it indicated its agree- ment during the hearing to the figures put forward by the institutions.

iu In those circumstances, the Court considers that the Council did not exceed the limits of the discretion conferred on the institutions by Article 4(5) of the basic regulation in deciding, in view of the small proportion which those imports by the Community producers represented, not to exclude them from the Community industry.

us It is settled case-law that the statement of reasons need not give details of all rel- evant factual or legal aspects, and that the question whether it fulfils the applicable requirements must be assessed with particular regard to the context of the act and to all the legal rules governing the matter in question (judgment of the Court of Justice in Case 203/85 Nicolet [1986] ECR 2049, paragraph 10). For the reasons set out above, it must be stated that it was clearly inappropriate to exclude the two abovementioned companies from the Community industry; moreover, the appli- cant did not raise any request whatever in that regard throughout the entire admin- istrative procedure — save in the observations contained in its letter of 21 Septem- ber 1992, which, for the reasons given in paragraphs 160 to 163 below, cannot be taken into consideration in view of their late submission — despite the fact that it was well aware of the situation, having itself sold the product in question to those producers. Consequently, the applicant cannot complain that, by failing to give a detailed explanation of their position on that point in the regulation, the institu- tions infringed Article 190 of the Treaty.

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120 As regards the third argument, alleging a failure to distinguish between Official' imports and 'unofficial or perestroïka imports', it is sufficient to note that the anti- dumping proceeding concerned all imports of potash from the former Soviet Union, which rose by 109% between 1986 and the investigation period, and the market share of which increased from 5.1% to 10.8%. Whilst it may be normal practice to draw a distinction between the different producers within the same country and to determine, in respect of each of them, whether their products have been dumped or not, it is impossible to distinguish between the products of one and the same producer according to the different channels through which they are imported into the Community. In any event, in the present case dumping was spe- cifically established on the basis of the resale prices charged by applicant, which was the Official' importer of the product under consideration, and it cannot there- fore claim that 'official' imports did not contribute to the injury suffered by the Community industry.

121 As regards the fourth argument, alleging a failure to update the data on which the findings in respect of injury were based, suffice it to say that the applicant has

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submitted no concrete evidence whatever to show that the situation had altered to such an extent as to render the findings of the investigation inappropriate.

122 It follows from the foregoing that the second plea is wholly unfounded.

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electrolysis, either uncut or cut into squares, originating in the Soviet Union, OJ 1983 L 286, p. 29), have commented in greater detail on that point.

125 The Council states in reply that the question whether other imports could have contributed to the injury involves the assessment of complex economic matters in respect of which the Community institutions enjoy a wide discretion. It also points out that the regulation states that the possible impact of such other imports was discounted.

126 The Council maintains, first, that it rightly referred to the volume and prices of imports from other sources, and observes that, although the volume of those other imports exceeded that of imports from the former Soviet Union, the volume of imports from each of the other countries was declining at the same time as imports from the former Soviet Union rose substantially.

127 Next, the Council maintains that the main reason why it discounted the possible effects of imports from other countries is because, by contrast with the nickel case relied on by the applicant, there was no evidence of price undercutting in relation to those imports, which were sold at normal market prices.

1 3 1The question whether imports other than those forming the subject-matter of the anti-dumping investigation at issue contributed to the injury suffered by the Com- munity industry involves the assessment of complex economic matters in respect of which the Community institutions enjoy a wide discretion.

132 It is apparent from recital (35) of the Commission regulation and recital (17) of the Council regulation that, having demonstrated the causal link between the rise in imports from the former Soviet Union and the increased losses suffered by the Community industry, the institutions explained that the Commission compensated for this by discounting the possible negative effects of imports from other sources, o n the ground that the volumes imported were relatively small and had not been the subject of any price undercutting.

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133 As regards the volume of imports from other sources, the Court finds it apparent from the table produced by the applicant (page 31 of the application) that imports from each of the four countries referred to fell appreciably during the period under consideration, whereas those from the former Soviet Union almost doubled. It is also clear that the volume of imports from the former Soviet Union during the investigation period was very much greater than that in respect of the four other countries.

u« As regards the prices at which the imports were sold, the Court notes that the applicant has provided no evidence whatever showing that the imports from other sources were also the subject of price undercutting. It appears, moreover, that the anti-dumping complaint against imports from Canada, to which the institutions referred in their answers to the Court's written questions, cannot be taken into consideration for the reasons that it was withdrawn, the information contained in it has not been verified in any way and, above all, it was based on a fall in the price of imports from Canada which did not start to occur until August 1991, that is to say, more than a year after the investigation period.

137 The applicant maintains that the imposition of a duty in the form of a minimum price is contrary to the spirit of Article 13(3) of the basic regulation and runs counter to the Community institutions' own assertion, in recital (46) of the Com- mission regulation, that the imposition of anti-dumping measures should not remove products originating in the countries concerned from the Community mar- ket. It says that, since the imposition of the provisional duty in April 1992, its sales have fallen by about 60% throughout the Community markets (see the table in Annex 11 to the application). It points out that, in its observations of 21 September 1992, it clearly showed the perverse effects of a duty in the form of a minimum price on a volatile market such as that of potash, and observes that, shortly after the introduction of the minimum price, the Commission was forced to make an adjustment as a result of price fluctuations.

us The Council observes, first, that in its judgment in Neotype v Commission and Council, cited above, the Court of Justice held that it was lawful to fix duties in the form of a minimum price. In its view, both recital (39) of the Commission regu- lation and recital (19) of the Council regulation provide an adequate statement of reasons for their choice of a duty in that form. It further points out that duties of that type are generally more favourable to exporters, as they enable them to avoid paying any duty at all, provided that they raise their prices accordingly.

139 Next, the Council observes that the applicant is not in fact contesting the form of the duty but merely its level. If that level proved to be too high because of changed circumstances, it was always open to the applicant to request a review under Arti- cle 14 of the basic regulation.

143 In proceeding in that manner, the Council did not exceed the limits of its discre- tion, particularly since a variable duty is generally more favourable to the economic operators concerned, because it enables them to avoid paying anti-dumping duties altogether.

144 As the Council has observed, the applicant is in fact contesting not the form of the duty as such but its level, which, it claims, is such as to prevent it from continuing to sell on the Community market. It suffices in that regard to state that the

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applicant has not shown that the duty exceeded the dumping margin, nor that it was higher, at the time of its imposition, than was necessary in order to remove the injury. The Court also notes that the fact that the applicant's sales of potash in the Community have decreased does not in itself mean that the level of the duty is excessive and such as to deprive exporters from access to the Community market. Moreover, it is, on the contrary, apparent from the Eurostat statistics that imports of potash from the former Soviet Union as a whole remained more or less stable during the two years following the adoption of the contested regulation.

ns In any event, Article 14 of the basic regulation, which confers on the operators concerned the right to require the Commission to review regulations imposing duties, puts at the applicant's disposal an appropriate means of challenging the duties in the event of their proving unwarranted.

149 It is apparent from the examination of the fourth plea, and from the considerations set forth in paragraph 121, that the fifth plea must also be rejected.

The sixth plea: failure to notify the authorities in Russia, Belarus and Ukraine

Arguments of the parties

iso The applicant maintains that, by failing to advise the representatives of Russia, Belarus and Ukraine of the proceeding, the Commission infringed Article 7(1 )(b) and Article 7(4)(a) of the basic regulation. That failure deprived them of an oppor- tunity to 'inspect all information made available to the Commission by any party to an investigation' and to defend their interests (judgment of the Court of Justice in Case C-49/88 Al-Juh ail Fertilizer v Council [1991] ECR1-3187). The applicant points out that the investigation, which commenced on 31 October 1990, con- cerned imports of potash originating in the Soviet Union, and that the new States of Russia, Belarus and Ukraine which succeeded it were recognized by the Com- munity as independent States in December 1991. Since the provisional anti- dumping duty was imposed on 23 April 1992, the applicant maintains that the Community institutions were under a duty to inform those new independent States.

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154 It follows, in the Council's view, that the State producers and exporters concerned were not only in a position fully to defend their interests but in fact did so.

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FERCHIMEX v COUNCIL

Findings of the Court

iss As the Council rightly submits, although Article 7(1 )(b) of the basic regulation requires the Commission to inform the representatives of the exporting country of the opening of an anti-dumping proceeding, there is nothing in the basic regulation, nor any general principle, which obliges the Commission to repeat that notifica- tion to States which may succeed it. In assuming the rights and obligations of the State which they succeed, those States must take the anti-dumping proceeding as they find it, and they have the right, in particular, to inspect the information made available to the Commission and the right to be heard pursuant to Article 7(4) and (5) of the basic regulation.

156 The Court finds, moreover, that it is apparent from the various meetings held dur- ing the administrative procedure that the representatives of the exporting country were given the opportunity to defend their interests.

it in good time for the issues raised to be fully considered and that the institutions failed to have regard to natural justice and infringed Article 190 of the Treaty by failing to explain the reasons why they were not taken into consideration.

159 The Council maintains that the letter of 21 September 1992 was sent too late. It points out that the Commission informed all the parties, by letter of 10 August 1992, of the main facts and considerations on the basis of which it intended to rec- ommend the imposition of a definitive duty and requested them to reply in writing within three weeks. The Council adds that the applicant's advisers promised, dur- ing a meeting with the Commission on 7 September 1992, to provide a written submission before 9 September 1992. In view of the imminent expiry of the pro- visional regulation, the Commission had to submit its proposal to the Council by no later than 25 September 1992, and was in the circumstances no longer obliged, n o r in a position, to take account of all the arguments in that letter. The Council maintains, moreover, that the institutions dealt with most of those arguments.

Findings of the Court

«o Article 7(4)(c)(iii) of the basic regulation provides that: 'Representations made after the information is given shall be taken into consideration only if received within a period to be set by the Commission in each case, which shall be at least 10 days, due consideration being given to the urgency of the matter'.

iei In the present case, the information letter sent by the Commission on 10 August 1992 to the parties concerned, including the applicant, allowed a period of three weeks in which to reply, which was subsequently extended to 9 September 1992. The period thus granted was not only in accordance with the basic regulation but was, moreover, justified in view of the fact that the Commission had to submit a proposal for a definitive measure to the Council before 25 September 1992.

IM The applicant maintains that the period of nearly two years between the opening of the investigation on 31 October 1990 and the imposition of the definitive anti- dumping duty on 23 October 1992 was excessive and that it constitutes an infringe- ment of Article 7(9)(a) of the basic regulation. It states that, as the investigation dragged on, the prospect of finally remedying the economic situation which had been engendered by the abnormal imports of 'perestroïka potash' and which had given rise to the complaint became more and more remote. In its view, the Com- mission and the Council cannot found any argument on the volume and complex- ity of the information gathered, given the details provided to them by the two main complainants regarding the Community potash market and the degree of control which those complainants exercised over it.

tes The Council and the Commission assert that the period fixed by the aforemen- tioned provision is not mandatory, since it provides that the investigation should 'normally' be concluded within one year. Moreover, the two complainants' knowl- edge of the market did not absolve the Commission from its duty to verify the information provided by them. Lastly, the Council acknowledges that the problem

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of finding a Canadian producer willing to cooperate caused some delay, but main- tains that there was no reasonable alternative enabling it to determine normal value more quickly.

Findings of the Court

The ninth plea: unfair and arbitrary selection of the investigation period

Arguments of the parties

170 The applicant states that, by selecting an investigation period ending three months before the opening of the proceeding, the institutions infringed Article 7(l)(c) of the basic regulation. It maintains that, whilst the institutions may legally choose an investigation period other than the six months immediately prior to the opening of the proceeding, they may only do so 'in exceptional circumstances and only when such a choice is justified'. In the present case, the absence of justification was con­ trary both to previous practice (see, for example, Commission Regulation N o 3798/90 of 21 December 1990 imposing a provisional anti-dumping duty on imports of espadrilles originating in the People's Republic of China, OJ 1990 L 365, p. 25) and inconsistent with Article 190 of the Treaty. The applicant contends that the Commission chose an investigation period which was particularly unfavourable to the exporters, because it coincided exactly with the period when economic tur­ bulence in the disintegrating Soviet Union was at its height. That period finally came to an end in June 1990, so that, if the Commission had chosen the period of six months immediately prior to the opening of the proceeding, the bulk of 'unof­ ficial' exports would have been excluded and the result of the investigation would have been different. It should also be noted, according to the applicant, that, in choosing an investigation period ending on 30 June 1990, the Commission pre­ vented the effects of the import restrictions applied by France from 1 July 1990 pursuant to its decision under Article 115 of the Treaty from being taken into account.

Findings of the Court

174 First, it follows from the very wording of Article 7(l)(c) of the basic regulation that that provision does not preclude the Commission from choosing an investigation period other than the six months immediately prior to the opening of the proceed- ing.

175 Next, the Court finds that the applicant did not contest the correctness or relevance of the explanations provided by the Council in its defence to justify its choice of a slightly different period. Furthermore, as has already been pointed out, the

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applicant has adduced no concrete evidence in support of its allegation that the dis- turbance in the economy of the former Soviet Union came to an end in June 1990.

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Since Article 87(4) of the Rules of Procedure provides that institutions which inter- vene in the proceedings are to bear their own costs, the Commission must be ordered to bear its own costs.

On those grounds,

THE COURT O F FIRST INSTANCE (Fourth Chamber, Extended Composition)

hereby:

H. Jung K. Lenaerts

Registrar President

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