19 Nov 2019
Changmao Biochemical Engineering Co. Ltd Appeals Court Judgment on EU Imposition of Anti-dumping Measures
In an anti-dumping case likely to be of interest to Hong Kong traders with commercial activities in mainland China, Changmao Biochemical Engineering Co. Ltd (“Changmao”) appealed a judgement of the General Court of the European Union (“General Court”). The General Court had ruled rejecting an action for annulment of Commission Implementing Regulation 2016/1247 (“Regulation 2016/1247”) by means of which the European Commission (“Commission”) imposed anti-dumping duties on imports of aspartame originating in mainland China. Aspartame, the product concerned in this anti-dumping case, is an artificial non-saccharide sweetener, commonly used as a sugar substitute in foods and beverages.
Following a complaint lodged on 16 April 2015 by Ajinomoto Sweeteners Europe SAS, the sole producer of aspartame in the EU, the Commission initiated an anti-dumping investigation concerning imports of aspartame originating in mainland China.
After completing the corresponding phases of an EU anti-dumping proceeding, the Commission issued Regulation 2016/1247 whereby it imposed definitive anti-dumping measures against, among others, Changmao – in the form of an ad valorem duty of 55.4%.
A product is considered to be dumped – i.e. introduced into the commerce of another country at less than its normal value – if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. Hong Kong traders might recall that where there are market distortions present in the exporting country that do not allow for a determination of the normal value in the ordinary course of trade, anti-dumping legislation provides for mechanisms to construct such normal value. In the EU anti-dumping legislation, where market distortions are perceived to be present, the normal value can be based on the value of the product concerned in a third country market (referred to as the analogue or surrogate country).
By means of an application lodged at the Registry of the General Court on 21 October 2016, Changmao brought an action for annulment of Regulation 2016/1247. An action for annulment can be filed before the General Court by a natural or legal person, even if not established in the European Union, subject to one of the following requirements being met: (i) that the challenged act is an act addressed to the applicant or which is of direct and individual concern to it; or (ii) that the challenged act is a regulatory act which is of direct concern to the applicant and which does not entail implementing measures.
In its application, Changmao claimed that the Commission had breached several provisions of the EU anti-dumping legislation. As a main claim, Changmao contended that the Commission had not granted it Market Economy Treatment (“MET”), disregarding its export data and prices, and, therefore, used the EU market data to construct the normal value instead of using the analogue country methodology.
In a judgment rendered on 28 June 2019, the General Court dismissed the action and ordered Changmao to pay the costs of the proceedings. Regarding Changmao’s main claims, the General Court found that although it is for the EU institutions to assess whether the evidence supplied by the producer concerned is enough to show that the criteria necessary to grant it MET are fulfilled, the burden of proof lies with the exporting producer wishing to claim MET. The General Court found that Changmao’s MET claim was rejected on the grounds that it had not established that it satisfied the requirements provided for in the EU anti-dumping legislation in order to be granted MET. Moreover, Changmao had argued that the Commission infringed the EU anti-dumping legislation by resorting to EU industry data instead of analogue country data for the determination of the normal value of the product concerned in the investigation. The General Court found that the Commission took all due care in the search for an appropriate analogue country and, therefore, that Changmao could not criticise the Commission for not having taken the necessary steps to obtain all the relevant information. According to the General Court, the choice of the Commission to use EU industry data was made in a reasonable manner, considering all the reliable information available at the time of that choice, and with all due care.
Furthermore, Changmao argued that, in view of the circumstances arising from the fact that the normal value was determined on the basis of EU industry data, the Commission was under a special obligation to make adjustments in order to ensure price comparability for the purposes of determining both the dumping margin and the existence of injury. Changmao also claimed that the Commission failed to examine carefully and impartially all the relevant aspects of the case. All of these claims were rejected by the General Court.
As reported by MLex on 11 November 2019, within the two-month period provided for by EU law, Changmao has filed an appeal against the judgment of 28 June 2019 before the Court of Justice of the European Union (“Court of Justice”). In its appeal, Changmao reaffirms its grounds upon which it requested the annulment of Regulation 2016/1247 and has claimed that the judgment of 28 June 2019 of the General Court is vitiated by manifest errors in the application of EU law. The ruling of the Court of Justice will be the last verdict possible in the proceedings.