12 June 2019
EU's General Court Dismisses Damages Claim in Case Concerning Silicon Metal Imports
On 23 May 2019, the General Court dismissed the silicon metal trader company Remag Metallhandel’s damages claim concerning the anti-dumping duties which the Austrian Government collected following the EU’s fraud department OLAF’s request. In brief, Metallhandel had claimed before the General Court that the anti-dumping duties were collected wrongly by EU governments because they were collected before the origin of the goods was confirmed, and that a compensation of around 10 million euros needed to be paid by the EU, as EU governments had imposed anti-dumping duties following OLAF’s request.
Hong Kong businesses with links to EU establishments may recall that, since 2004, the EU has been imposing anti-dumping tariffs on silicon metal imports from mainland China. In 2011, OLAF had recommended that national customs officials of EU Member States should immediately collect 14 million euros on allegedly circumvented Chinese silicon metal imported through Taiwan from 2008 onwards. In pursuit of OLAF’s recommendation, some EU Member States, such as Germany, Spain and Austria, requested payment of tariffs from importers. The applicants in the case at hand submitted that OLAF was liable due to its conduct, which led to the post-clearance recovery carried out by the national authorities, as it put a great amount of pressure on those authorities, which perceived OLAF’s recommendations as “de facto orders” under the principle of loyal cooperation laid down in Article 4(3) of the Treaty on European Union (the TEU).
The General Court located in Luxembourg, which is a constituent court of the Court of Justice of the European Union, held that OLAF had not overstepped its authority when it urged European customs authorities to collect this amount on the Chinese silicon metal coming from Taiwan so as to dodge EU duties. The Court highlighted in its reasoning that OLAF’s recommendations are not binding on EU governments, and that governments collected the duties under their own authority.
The judges made reference to the settled EU case-law that OLAF’s reports constitute only recommendations or opinions, which have no binding effects and impose no obligation, even of a procedural nature, on the authorities to which they are addressed.
Hong Kong traders should note that the judges also placed emphasis on the lack of a causal link between the conduct alleged and the damage relied upon, on the grounds that the determining cause of the damage was not OLAF’s recommendations but Member State governments’ own actions. The judges made reference to the second paragraph of Article 340 of the Treaty on the Functioning of the European Union (TFEU) where it is required that the damage must be the direct consequence of the wrongful act in question, in order for a causal link to be established to claim that there is non-contractual liability on the part of the EU.
As regards the applicants’ claim on wrongful imposition of the duties before the confirmation of origin of the goods, the Court underlined that OLAF had recommended to the national authorities to identify the certificates of origin for those consignments for which the number had not yet been communicated to OLAF, and to send that information to it as soon as possible. Therefore, the Court concluded that the applicants’ claim on wrongful imposition for the collection of duties is unfounded.
Hong Kong’s business community with operations in the EU will note that the mission of the European Anti-Fraud Office (OLAF) includes:
(i) protecting the financial interests of the European Union by investigating fraud, corruption and any other illegal activities;
(ii) detecting and investigating serious matters relating to the discharge of professional duties by members and staff of the EU institutions and bodies that could result in disciplinary or criminal proceedings; and
(iii) supporting the EU institutions, in particular the European Commission, in the development and implementation of anti-fraud legislation and policies.