C-245/95

COMMISSION v N T N A N D KOYO SEIKO

OPINION OF ADVOCATE GENERAL LÉGER delivered on 16 September 1997

1. By this appeal the Commission is asking must therefore be assessed in the same way, the Court of Justice to review the judgment in a review 4and in the original investiga- of the Court of First Instance of 2 May 1995 tion. 5 More specifically, the question is in Joined Cases T-163/94 and T-165/94 NTN whether, in both those cases, the existence of Corporation and Koyo Seiko v Council, 1 injury must be established in accordance which annulled Article 1 of Council Regu- with the criteria laid down by Article 4(1) of lation (EEC) N o 2849/92 (also referred to Regulation N o 2423/88 ('the basic regu- hereinafter as 'the regulation at issue'). 2 lation').

2. The contested judgment was the first given by the Court of First Instance in an anti-dumping case since it was given jurisdic- 4. In the alternative, the Court is asked tion to hear such cases 3 and it is the first whether the fact that an investigation was time that the Court of Justice has been carried out after the period prescribed by requested to give judgment in that connec- Article 7(9)(a) of the basic regulation neces- tion pursuant to Article 168a of the EC sarily means that the regulation at issue must Treaty. be annulled.

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for which I consider it unnecessary to exam- to the international agreements to which the ine the second plea, before suggesting that Community is a party, in particular the Gen- the appeal should be dismissed (III). I shall eral Agreement on Tariffs and Trade concluded by considering the question of ('GATT') and the Agreement on Implemen- costs (IV). tation of Article VI of GATT 7 ('the Anti- Dumping Code').

I — Legal, factual and procedural back- ground to the case

8. Article 113(1) of the Treaty provides that *[t]he common commercial policy shall be based on uniform principles, particularly in Legal background regard to ... measures to protect trade such as those to be taken in the event of dumping or subsidies'.

6. Before considering the relevant provisions of the Community anti-dumping regula- tions, it seems worthwhile calling to mind their legal basis and their general structure. 9. However, the first paragraph of Article 110 of the Treaty places limits on the Com- munity institutions' discretion in framing the common commercial policy and, in particu- lar, in implementing instruments to protect trade, by providing that c[b]y establishing a Basis of the Community's common commer- customs union between themselves Member cial policy States aim to contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and the

lowering of customs barriers'. It follows Community provisions in question were from that provision that recourse to trade observed; 13 that objectively correct facts protection measures must not unjustifiably were taken into account; 14 that no manifest impede international trade. error was made in appraising those facts; 15 that there had been no failure to take an essential matter into consideration; 16 and, finally, that the Community institutions had not included in their reasoning any consider- ations amounting to an abuse of power or an infringement of essential procedural require- 10. Likewise, the Court of Justice has con- ments. 17 sistently held that even though in the context of the common commercial policy and more particularly in regard to trade protection measures, the Community legislature has, on account of the complexity of the economic situations which must be examined by the 12. Lastly, Community anti-dumping legis- institutions, 8 a wide discretion 9 in regard, in lation must also comply with the obligations particular, to the assessment of the dumping assumed by the Community in the context margin 10 and injury or the threat of injury 11 of GATT and the Anti-Dumping Code. and the determination of the period to be Because it was contractually bound by those taken into consideration for the purpose of agreements, the Community could not adopt determining injury in the course of an anti- anti-dumping rules and take measures in that dumping proceeding, 12 there are limits to area conflicting with those agreements with- that discretion. out incurring liability under international law.

8 — See, in particular, Case C-69/89 Nakajima v Council [1991] ECR 1-2069, paragraphs 86 and 87. 13 — Ibid., paragraph 8. 9 — See, in particular, Case C-121/86 Epicheiriseon Metalleft- 14 — See, in particular, Case 191/82 Fediol v Commission [1983] ikon Viomichanikon kai Natáliákon and Others v Council ECR 2913, paragraph 26. [1989] ECR 3919, paragraph 8. 15 — See, in particular, Case 240/84 Toyo and Others v Council, 10 — See, in particular, Case 240/84 Toyo and Others v Council cited above, paragraphs 21 to 24. [1987] ECR 1809, paragraphs 13 and 14. 16 — See, in particular, Case 187/85 Fediol v Commission [1988] 11 — See, in particular, Joined Cases C-320/86 and C-188/87 ECR 4155, paragraph 6. Stanko France v Commission and Council [1990] ECR 1-3013. 17 — See, in particular, Case 264/82 Timex v Council and Com- 12 — See, in particular, Epicheiriseon Metalleftikon Viomichani- misaon [1985] ECR 849, paragraphs 30 and 31. kon kai Naftiliakon and Others v Council, cited above, 18 — Paragraph 65 of the contested judgment. paragraph 20. 19 — Paragraphs 30, 31 and 32.

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14. Under Article VI of GATT, dumping is 18. Article 3 refers to the criteria to be taken to be condemned if it causes or threatens to into account when determining what consti- cause injury to an industry in the importing tutes 'injury'. I shall deal with this point country. later.

15. The Anti-Dumping Code contains use- 19. 'Industry', the conduct of a proceeding ful particulars on the implementation of anti- and its conclusion are also dealt with by the dumping measures. Anti-Dumping Code.

25. According to Article 6(4), consultations may take place within an Advisory Commit- tee consisting of representatives of each Member State and a representative of the Commission. The consultations may cover 22. Article 2(1) lays down the principle that the existence of dumping, injury and the an anti-dumping duty may be applied to any causal link between dumping and injury, dumped product 'whose release for free cir- together with the measures to be taken. culation in the Community causes injury'.

26. Article 7 deals with the investigation car- ried out by the Commission, that is to say, 23. Article 4(1) lists the various relevant fac- its formal aspects and subject-matter. An tors for determining the existence of injury investigation should normally be completed or a threat of injury to an established Com- within one year of the initiation of the pro- munity industry or a material retardation in ceeding. Under Article 8 information sub- the establishment of such an industry. mitted by the parties to the Commission during the investigation may be treated as confidential.

24. Article 5 provides that any natural or 27. At the end of a preliminary examina- legal person, or any association, acting on tion, provisional duties may be imposed by behalf of a Community industry which con- the Commission, for a maximum period of siders itself injured or threatened by dumped four months (Article 11). imports may lodge a written complaint with the Commission or a Member State. In the latter case, the complaint is to be forwarded to the Commission. The complaint must

32. Having found that the Community industry was in a weak position despite the duties imposed by Regulation N o 1739/85, 25 the Council concluded that upon the expiry 30. Article 15(1) provides that the anti- of the existing anti-dumping measures there dumping duties and undertakings are to was a danger of recurrence of the injury suf- lapse after five years from the date on which fered by that industry, 26 and adopted new they entered into force. However, Article measures. 15(3) provides that: 'Where an interested party shows that the expiry of the measure would lead again to injury or threat of injury, the Commission shall, after consulta- 24 — Regulation No 1739/85 of 24 June 1985 imposine a defini- tive anti-dumping duty on imports of certain ball-bearings tion, publish in the Official Journal of the and tapered roller bearers originating in Japan (OJ 1985 L 167, p. 3). European Communities a notice of its inten- 25 — Points 26 to 32 of the preamble to the regulation at issue. tion to carry out a review of the measure'. 26 — Ibid., point 39.

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33. Article 1 of the regulation at issue pro- Factual and procedural background vides in particular as follows:

34. O n 27 December 1988 the Federation of 'The definitive duties imposed by Article 1 European Bearing Manufacturers' Associa- of Regulation (EEC) N o 1739/85 on the tions ('FEBMA') requested a review, on the products defined below are hereby modified basis of Article 14(1) of the basic regulation, in accordance with the following provisions: of the anti-dumping measures taken against imports of ball-bearings originating in Japan, on the ground that there had been a change of circumstances since the imposition of definitive duties by Regulation N o 1739/85.

The judgment of the Court of First Instance

38. FEBMA was granted leave to intervene in support of the Council in Case T-163/94 NTN v Council. The Commission and FEBMA were granted leave to intervene in support of the Council in Case T-165/94 Koyo Seiko v Council. 41. Dealing with the various pleas under two heads, the Court of First Instance gave a detailed judgment which annulled Article 1 of the regulation at issue in so far as it imposed an anti-dumping duty on the appli- cants. Endorsing the applicants' arguments, it held that the Council had not established 39. N T N and Koyo Seiko claimed that the injury within the meaning of Article 4(1) of Court of First Instance should annul Article the basic regulation and had not complied 1 of Regulation N o 2849/92 in so far as it with the time-limit prescribed by Article imposed an anti-dumping duty on them, and 7(9)(a) of that regulation. should order the Council to pay the costs. The Council, supported by FEBMA and the Commission, contended that the Court should dismiss the applications and order the applicants to pay the costs.

The appeal

40. In support of their actions, N T N and Koyo Seiko relied on various pleas in law: the Council's failure to establish the exist- ence of injury to the Community industry; its failure correctly to determine the possible 42. The Commission claims that the Court effects of the expiry of the existing measures; of Justice should set aside the contested and also abuse of powers. They are therefore judgment, refer the case back to the Court of claiming that, if the review investigation had First Instance and order N T N and Koyo been carried out within a reasonable period, Seiko to pay the costs. the Community institutions could not have established the existence of any injury. Finally, the regulation at issue had imposed a 28 — Paragraphs 26 and 27 of the contested judgment.

49. O n 10 October 1995, FEBMA lodged its application to intervene with the Registry of the Court of Justice. Since it was a party to 45. As regards that claim, since NSK did not the proceedings before the Court of First bring an action within the period prescribed Instance, it could intervene only under by the third paragraph of Article 173 of the Article 115(1) of the Rules of Procedure of Treaty for annulment of the individual the Court of Justice, which provides as fol- decision addressed to them, which was part lows: 'Any party to the proceedings before of the regulation at issue, that decision the Court of First Instance may lodge a remains valid and binding as far as they are response within two months after service on concerned. 29 The effects of that decision him of notice of the appeal. The time-limit have become final and cannot therefore be for lodging a response shall not be extended.' challenged in this appeal. Notice was served on 24 July 1995. The

29 — See, for instance, Case C-188/92 TWD Textilwerke 30 — Case C-245/95 P Commission v NTN Corporation, Inter- Deggendorf[1994]ECR I-833, paragraph 13. vention II, [1996] ECR I-559, paragraph 9.

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period allowed to FEBMA for submitting its 53. Furthermore, Article 1 of Annex II to response, as extended by time on account of the Rules of Procedure of the Court of Jus­ distance under Article 81(2) of those rules, tice — which provides that '[i]n order to expired on 2 October 1995. take account of distance, procedural time- limits for all parties save those habitually resident in the Grand Duchy of Luxembourg shall be extended as follows: — for the King­ dom of Belgium: two days ...' — cannot be relied on by parties, such as the Commis­ sion, which have already appointed an agent with an address for service in Luxembourg.

COMMISSION v NTN AND KOYO SEIKO

months and two days later, it complied with First limb: the concept of 'injury' in the con- the rules. text of a review

57. The objection of inadmissibility raised 59. The Commission 35 claims that, by by Koyo Seiko must therefore be rejected. applying the criteria set out in Article 4 of the basic regulation in order to assess the existence of injury in the context of a review — a procedure provided for in Articles 14 and 15 of that regulation — the Court of First Instance 36 committed an error of law.

III — Examination of the appellant's pleas

62. It claims that a teleological interpretation 65. They claim that the concept of 'recur- of that regulation would produce a result rence of injury' is irrelevant inasmuch as it diametrically opposed to that reached by the was 'invented' for the purposes of the action: Court of First Instance. It states that the the Community legislation makes no refer- effectiveness of the provisions of the basic ence to it. That concept is therefore not the regulation providing for the organization of product of an interpretation of that legisla- separate procedures for the original investi- tion but of 'rewriting' it. 42 Besides, the ques- gation and for a review would be frustrated tion of recurrence of the injury was indeed if no legal implication was inferred from the dealt with by the Court of First Instance in existence of distinct procedures. the course of interpreting the concept of 'threat of injury'.

68. Article 168a of the Treaty provides that an appeal is limited to points of law. That restriction is called to mind in the first para- graph of Article 51 of the Statute of the 71. As regards the procedural rules, the leg- Court of Justice, which specifies the grounds islature states, in the fourth, eighth and tenth on which an appeal may be based, namely recitals respectively 45 that it is desirable (a) ‘lack of competence of the Court of First 'that the rules for determining normal value Instance, a breach of procedure before it s h o u l d be presented clearly and in sufficient which adversely affects the interests of the detail …’; (b) ‘to lay down, in adequate detail appellant … [and] the infringement of Com- the manner in which the amount of any sub- munity law by the Court of First Instance’. sidy is to be determined’; and (c) ‘to lay The Court has concluded from this that ‘the down the procedures for anyone acting on appeal may rely only on grounds relating to behalf of a Community industry which con- the infringement of rules of law by the siders itself injured or threatened by dumped Court of First Instance, to the exclusion of or subsidized imports to lodge a complaint any appraisal of the facts …’. 43 …’.

69. I have three main reasons for consider- ing, contrary to the view taken by the Com- mission, that the Court of First Instance cor- rectly interpreted the concept of ‘injury’ in Articles 14 and 15 of the basic regulation. 72. As regards the definition of specific con- cepts, the seventh, ninth and fourteenth recitals, respectively, 46 provide as follows: ‘the term “dumping margin” should be clearly defined …’; ‘it seems appropriate to set out certain factors which may be relevant for the determination of injury’ and ‘to avoid 70. First, it appears from the general scheme confusion, the use of the terms “investiga- of that regulation that, when the legislature tion” and “proceeding” in this regulation intends to adopt a rule or define a rule or should be clarified’. draw a distinction, it must do so expressly

75. Thus, where specific procedural rules are applicable to the original proceeding or to a review, articles in the basic regulation set them out clearly and precisely. 79. Moreover, as far as the provisions gov- erning investigations are concerned, it is a fact not only that the actual terms 'original investigation' and 'review investigation' do not appear in the preamble to the basic regu- lation and appear only very exceptionally in the body of its provisions, 47 but also that the 76. This is so in the case of the rule relating legislature does not give any indication that to locus standi. In the case of the original it intends to lay down separate, specific rules proceeding, Article 5(1) of the basic regu- in regard to those different situations. lation provides that: '[a]ny natural or legal person, or any association not having legal personality, acting on behalf of a Commu- 47 — Only Article 16 refers to the concept of 'original investiga- nity industry which considers itself injured tion' whereas 'review investigation' is never used. On the other hand, the term 'investigation' appears in Articles 7, or threatened by dumped or subsidized 10, 12, 13 and 14.

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80. Thus, the heading to Article 7 of the 84. Article 14 of the regulation, which lays basic regulation is 'Initiation and subsequent down the procedural rules to be followed in investigation', without otherwise specifying the event of a review, does not refer to the nature of the investigation in question, 'injury' or 'threat of injury', let alone to and the very wording of that provision uses 'recurrence of injury'. It merely indicates only the term 'investigation' without ever that a review is to take place if a Member indicating whether the original investigation State, the Commission or an interested party or a review investigation is meant. 'submits evidence of changed circumstances sufficient to justify the need for such review'. 51

48 — See the 9th, 11th and 19th recitals. 51 — Article 14(1), second subparagraph; my emphasis. 49 — Articles 4, 5, 6, 7, 10, 11, 12, 13 and 15. 52 — Paragraph 29 of the appeal. 50 — Articles 4, 10, 12 and 15. 53 — Ibid.

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the Community institutions to adopt new 89. Second, the GATT agreements and the anti-dumping measures but also, as Article Anti-Dumping Code, in the light of which 14(3) of the basic regulation indicates, to the basic regulation must be interpreted, 58 repeal or annul the anti-dumping measures confirm the interpretation reached by the originally adopted. That is the reason why Court of First Instance. the second subparagraph of Article 14(1), unlike Article 5, 54 entitles a request for a review to be more widely made, that is to say by any interested party who submits evi- dence of changed circumstances.

90. Although Article 5 of the Anti-Dumping Code is headed 'Initiation and subsequent investigation', the rules governing the origi- nal and the subsequent investigations are identical.

87. That change in circumstances may be a resumption of sound commercial practices — which might justify the repeal or annul- ment of the anti-dumping measures initially adopted 55 — but also the continuation, or even the aggravation, of dumping in a given 91. Article 5(1), (2) and (3) of the Anti- sector and of the resultant injury — which Dumping Code provide as follows: would result in the imposition of new anti- dumping measures. 56

3. An application shall be rejected and an investigation shall be terminated promptly as soon as the authorities concerned are satis- fied that there is not sufficient evidence of either dumping or of injury to justify pro- If in special circumstances the authorities ceeding with the case. There should be concerned decide to initiate an investigation immediate termination in cases where the without having received such a request, they margin of dumping or the volume of shall proceed only if they have sufficient evi- dumped imports, actual or potential, or the dence on all points under (a) to (c) above. injury is negligible.' 59

92. By the same token, examination of Article 3 of the Anti-Dumping Code con- 2. Upon initiation of an investigation and cerning injury shows that injury or threat of thereafter, the evidence of both dumping and injury must be determined in accordance injury caused thereby should be considered with the same criteria, irrespective of the simultaneously. In any event the evidence of purpose of the investigation — namely the both dumping and injury shall be considered 'initiation of a proceeding' or a 'subsequent simultaneously: investigation'.

(a) in the decision whether or not to initiate an investigation, and 93. Third, in Rima Eletrometalurgia v Council this Court held that 'the existence of sufficient evidence of dumping and the injury resulting therefrom is always a pre- requisite for the opening of an investigation,

(b) thereafter, during the course of the inves- tigation, starting on a date not later than 59 — My emphasis.

96. In the Neotype Techmasbexport case, 98. In the Sermes case, following a review which was concerned with adoption of a under Article 14 of Regulation N o 2176/84, definitive duty following a review, 63 the the Council adopted a regulation imposing a Court applied Article 4(2) of Regulation N o definitive anti-dumping duty on imports of standardized multi-phase electric motors having an output of more than 0.75 kW but 60 — Case C-216/91 Rima Eletrometalurgia v Council [1993] ECR I-6303, paragraph 16. 61 — Joined Cases C-305/86 and C-160/87 Neotype Techmashex- port v Commission and Council [1990] ECR 1-2945. 64 — That regulation, which was in force at the material time, has 62 — Case C-323/88 Sermes v Directeur des Services des Douanes been repealed and replaced by Regulation N o 2423/88 (see de Strasbourg [1990] ECR I-3027. point 20, infra). 63 — See Neotype Techmasbexport v Commission and Council, 65 — Neotype Techmashexport v Commission and Council, para- paragraphs 6 to 9. graph 50.

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101. In view of my reasoning so far and the conclusions which I have reached, 70 I submit that, as the Court of First Instance correctly observed, 71 that factor could not be validly taken into account by the Council without 99. It follows from the above observations infringing the last sentence of Article 4(1) of that, in the context of a review, when assess- the basic regulation, which provides as fol- ing whether the expiry of an anti-dumping lows: 'Injuries caused by other factors, such measure previously adopted would again as volume and prices of imports which are lead to injury or a threat of injury, the crite- not dumped or subsidized, or contraction in ria laid down by Article 4 of the basic regu- demand, which, individually or in combina- lation must be applied. Consequently, the tion, also adversely affect the Community first limb of the first plea, alleging an error of industry must not be attributed to the law by the Court of First Instance in apply- dumped or subsidized imports.' 72 ing the concept of 'injury' cannot be accepted. 68 — Paragraph 30 of the appeal. 69 — Paragraph 97 of the contested judgment. 70 — First limb of the first plea. 66 — Serines, paragraph 26. 71 — Paragraph 98 of the contested judgment. 67 — Ibid., paragraph 27. 72 — My emphasis.

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102. I must therefore conclude that the fact that the first plea of the appeal must be Court of First Instance was right in law to rejected in itself affords confirmation that take the view that, in a review, the existence Article 1 of Regulation No 2849/92 should be of injury must be determined on the basis of annulled in so far as it imposes an anti- the factors exhaustively listed in Article 4(2) dumping duty on the respondents. and (3) of the basic regulation.

104. In its second plea the Commission 107. While the Court of First Instance, after seems 73 to be asking the Court, in the alter- considering the second plea, states that '[t]he native, to set aside the contested judgment Council has therefore failed to demonstrate but only if Article 1 of Regulation N o to the satisfaction of the Court that the 2849/92 was also annulled on the ground of review proceeding was concluded in this case the infringement of Article 7(9)(a) of the within a reasonable period. Consequently the basic regulation considered by itself. plea of infringement of Article 7(9)(a) of the basic regulation is likewise well founded', 76 it does not conclude from this that the infringement of Article 7(9)(a) of the basic regulation also warrants the annulment of Article 1 of the regulation at issue, but that 'in the light of all those considerations Article 105. In my view, it follows from the very 1 of the contested regulation must be grounds of the contested judgment that the

74 — Paragraph 115 of the contested judgment. 73 — The Commission's observations in support of the second plea are not very clear (see, in particular, paragraphs 5, 7, 8 75 — Ibid., my emphasis. and 32 of those observations). 76 — Paragraph 124, my emphasis.

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annulled, in so far as it concerns the appli- 111. Advocate General Darmon 7 9 and cants. It is not necessary for the Court to rule Advocate General Tesauro 80 argued that fail- on the other pleas relied on by the applicants, ure to comply with Article 7(9)(a) of the nor to order the measures of inquiry sought basic regulation should not result automati- by Koyo Seiko in Case T-165/94.' 77 cally in the regulation's being annulled. However, since the Court did not consider that the duration of the investigations in question had to be regarded as 'unreason- able', it did not have to consider that ques- tion.

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115. Likewise, Article 5(5) of the Anti- adopted by the competent institutions — Dumping Code provides that: 'investigations after having correctly followed the pro- shall, except in special circumstances, be con- cedure in other respects — is the proper pen- cluded within one year after their initia- alty to be imposed for failure to comply with tion'. 82 The international legislator has not the time-limit for the investigation and noth- explained what is to be understood by 'spe- ing more. cial circumstances'. In that way, it leaves a degree of discretion to the competent authorities as regards the period for carrying out an investigation.

119. Moreover, the interpretation which I suggest also reflects the principle adopted by 116. Second, nowhere in the basic regulation a number of Member States, according to or in the Anti-Dumping Code is there any which there can be no presumption that a reference to a penalty in the event of a failure penalty is to be imposed. In my view, that to comply with that time-limit. principle constitutes in the present case the necessary corollary to the general principle of legal certainty recognized by Community law.

Conclusion

123. H a v i n g regard t o the foregoing observations, I p r o p o s e that the C o u r t should:

(1) dismiss t h e appeal;

(2) o r d e r t h e appellant t o p a y t h e costs of t h e appeal.

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