In Joined Cases C-133/87 and C-150/87
Nashua Corporation, whose head office is in Nashua, New Hampshire ( United States of America ), represented by Michael Hutchings and John Pheasant, solicitors, of Lovell, White and King, with an address for service in Luxembourg at the Chambers of J . C . Wolter, 8 rue Zithe,
applicant,
v
Commission of the European Communities, represented by its Legal Adviser John Temple Lang, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, a member of its Legal Department, Wagner Centre, Kirchberg,
defendant,
APPLICATION for the annulment of the Commission' s decision rejecting the undertaking offered by the applicant in an anti-dumping proceeding concerning the importation of photocopiers originating in Japan ( Case C-133/87 ),
and
Nashua Corporation, whose head office is in Nashua, New Hampshire ( United States of America ),
NV Nashua Belgium SA, whose head office is in Overijse ( Belgium ),
Nashua Copycat Limited, whose head office is in Berkshire ( England ),
Nashua Copygraph GmbH, whose head office is in Hanover ( Federal Republic of Germany ),
Nashua Denmark A/S, whose head office is in Glostrup ( Denmark ),
Nashua France SA, whose head office is in Créteil ( France ),
Nashua Nederland BV, whose head office is in 's-Hertogenbosch ( the Netherlands ),
Nashua International Limited, whose head office is in Hamilton ( Bermuda ),
Nashua Reprographics SpA, whose head office is in Milan ( Italy ),
Nashua España SA, whose head office is in Barcelona ( Spain ),
represented by Michael Hutchings and John Pheasant, solicitors, of Lovell, White and King, with an address for service in Luxembourg at the Chambers of J . C . Wolter, 8 rue Zithe,
applicants,
v
Council of the European Communities, represented by Hans-Juergen Lambers, a Director in its Legal Department, and by its Legal Adviser Erik Stein, acting as Agents, assisted by Hans-Juergen Rabe and Michael Schuette, of Schoen & Pflueger, Hamburg and Brussels, with an address for service in Luxembourg at the office of Joerg Kaeser, Manager of the Legal Directorate of the European Investment Bank, 100 boulevard Konrad-Adenauer, Kirchberg,
defendant,
supported by
Commission of the European Communities, represented by its Legal Adviser John Temple Lang, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, a member of its Legal Department, Wagner Centre, Kirchberg,
and by
Committee of European Copier Manufacturers ( Cecom ), whose registered office is in Cologne ( Federal Republic of Germany ), represented by Dietrich Ehle and Volker Schiller, Rechtsanwaelte, Cologne, with an address for service in Luxembourg at the Chambers of Messrs Arendt and Harles, 4 avenue Marie-Thérèse,
interveners,
APPLICATION for the annulment of Council Regulation ( EEC ) No 535/87 of 23 February 1987 imposing a definitive anti-dumping duty on imports of plain paper photocopiers originating in Japan ( Official Journal L 54, p . 12 ), in so far as it concerns the applicant ( Case C-150/87 ),
THE COURT
composed of : O . Due, President, Sir Gordon Slynn, F . A . Schockweiler and M . Zuleeg ( Presidents of Chambers ), T . Koopmans, G . F . Mancini, R . Joliet, T . F . O' Higgins, J . C . Moitinho de Almeida, G . C . Rodríguez Iglesias and F . Grévisse, Judges,
Advocate General : J . Mischo
Registrar : B . Pastor, Administrator
having regard to the Report for the Hearing and further to the hearing on 18 May 1989,
after hearing the Opinion of the Advocate General delivered at the sitting on 5 July 1989,
gives the following
Judgment
1 By application lodged at the Court Registry on 27 April 1987, Nashua Corporation, a company whose head office is in New Hampshire, USA, brought an action under the second paragraph of Article 173 of the EEC Treaty for the annulment of the decision whereby the Commission rejected the undertaking offered by the applicant in the course of an anti-dumping proceeding concerning the importation of plain paper photocopiers originating in Japan ( Case C-133/87 ).
2 By application lodged at the Court Registry on 13 May 1987, Nashua Corporation and its subsidiaries NV Nashua Belgium SA, Nashua Copycat Limited, Nashua Copygraph GmbH, Nashua Denmark A/S, Nashua France SA, Nashua Nederland BV, Nashua International Limited, Nashua Reprographics SpA and Nashua España SA ( hereinafter collectively referred to as "Nashua ") brought an action under the second paragraph of Article 173 of the EEC Treaty for the annulment of Council Regulation ( EEC ) No 535/87 of 23 February 1987 imposing a definitive anti-dumping duty on imports of plain paper photocopiers originating in Japan ( Official Journal 1987, L 54, p . 12; hereinafter referred to as "the contested regulation "), in so far as it concerns Nashua ( Case C-150/87 ).
3 Nashua Corporation is an original equipment manufacturer ( hereinafter : "OEM "), that is to say, a company supplying under its own brand name products manufactured by other undertakings . It purchases plain paper photocopiers in Japan from the Japanese manufacturer Ricoh Company Limited ( hereinafter : "Ricoh ") and sells them under the Nashua brand name in the Community, through its subsidiary companies, and in many non-member countries .
4 In July 1985, Ricoh, together with other Japanese producers, was the subject of a complaint submitted to the Commission by the Committee of European Copier Manufacturers, which accused it of dumping its products in the Community .
5 The anti-dumping proceedings initiated by the Commission pursuant to Council Regulation ( EEC ) No 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community ( Official Journal 1984, L 201, p . 1 ) led, in the first instance, to the imposition on Ricoh of a provisional anti-dumping duty of 15.8 %. In the contested regulation, adopted on a proposal from the Commission, the Council then set the definitive anti-dumping duty at 20 %.
6 By order of 1 February 1989, Cases C-133/87 and C-150/87 were joined for the purposes of the oral procedure and the judgment .
7 Reference is made to the Report for the Hearing for a fuller account of the applicable legislation, the facts of the dispute, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .
Admissibility
Application for the annulment of the Commission' s decision rejecting the undertaking offered by Nashua Corporation
8 As the Court held in its order of 11 November 1987 in Case 150/87 Nashua v Council and Commission (( 1987 )) ECR 4421, paragraph 6, the Commission' s role forms an integral part of the Council' s decision-making process . It follows from the provisions of Council Regulation No 2176/84 that the Commission is responsible for carrying out the necessary investigations and for deciding, on the basis of those investigations, whether to terminate the proceedings or to continue them by adopting provisional measures and by proposing that the Council adopt definitive measures . However, it is the Council which has the power to give a final decision . It is not obliged to make any decision at all if it disagrees with the Commission but may, if it wishes, adopt a decision on the basis of the latter' s proposals .
9 The rejection by the Commission of a proposed undertaking is not a measure having binding legal effects of such a kind as to affect the interests of the applicant, because the Commission may revoke its decision or the Council may decide not to introduce an anti-dumping duty . Such a rejection is an intermediate measure whose purpose is to prepare for the final decision, and is not therefore a measure which may be challenged .
10 As is clear from the judgments of 7 May 1987 in Case 240/84 Tokyo Bearing v Council (( 1987 )) ECR 1809, Case 255/84 Nachi Fujikoshi v Council (( 1987 )) ECR 1861 and Case 256/84 Koyo Seiko v Council (( 1987 )) ECR 1899, it is by challenging the regulation introducing definitive anti-dumping duties that traders can raise any irregularity associated with the rejection of their proposed undertakings .
11 It follows from the foregoing that the application for the annulment of the contested decision is inadmissible .
Application for the annulment of Regulation No 535/87
12 The Council takes the view that the application for the annulment of Regulation No 535/87 is inadmissible . It argues, first, that Nashua is an independent importer of plain paper photocopiers manufactured by Ricoh whose resale price was not taken into account by the institutions in establishing the export price; according to the Court' s case-law it is only where that is done that the importer in question must be recognized as having locus standi to bring an action for the annulment of a regulation introducing definitive anti-dumping duties .
13 Secondly, the Council argues that in order to construct the normal value of the products at issue the institutions set the profit margin of the exporter at 5% on the basis of information deriving solely from Ricoh, the producer and exporter, and not from Nashua .
14 Regulations introducing an anti-dumping duty are legislative in nature and scope, inasmuch as they apply to all traders generally . Nevertheless, it is conceivable that some provisions of those regulations may be of direct and individual concern to those producers and exporters of the product in question who are alleged on the basis of information about their business activities to be dumping . This is true in general of producers and exporters who are able to establish that they were identified in the measures adopted by the Commission or the Council or were concerned by the preliminary investigations ( see judgments of 21 February 1984 in Joined Cases 239 and 275/82 Allied Corporation I (( 1984 )) ECR 1005, paragraphs 11 and 12, and of 23 May 1985 in Case 53/83 Allied Corporation II (( 1985 )) ECR 1621, paragraph 4 ).
15 The same is true of those importers whose resale prices were taken into account for the construction of export prices and who are consequently concerned by the findings relating to the existence of dumping ( see judgments of 29 March 1979 in Case 118/77 ISO (( 1979 )) ECR 1277, paragraph 15, and of 21 February 1984 Allied Corporation I, cited above, paragraph 15 ).
16 It is therefore necessary to determine whether, in this case, Nashua was concerned by the findings relating to the existence of the dumping complained of .
17 It was by reference to the particular features of Ricoh' s sales to OEMs, especially the differences in costs incurred by Ricoh in its sales to OEMs as compared with its costs in sales of plain paper photocopiers under its own brand name, that the Council saw fit, in constructing the normal value, to set the profit margin of exporters at 5%, that is to say, at a lower rate than the average profit margin, which was estimated at 14.6 %.
18 Proceeding on the basis of the normal value thus constructed for sales by Ricoh to OEMs the Council and the Commission arrived at a dumping margin lower than the margin calculated for sales of plain paper photocopiers marketed under Ricoh' s own brand name, and that dumping margin, together with those ascertained for all Ricoh' s sales channels, were taken into account in calculating a weighted dumping margin on the basis of which the anti-dumping duty was set .
19 It is true that the profit margin of 5% was applied without any differentiation between the various traders concerned for the purpose of constructing the normal value of plain paper photocopiers . However, the traders in question, who are limited in number, were identified by the institutions, and it was precisely in order to reflect the particular features of their business dealings with producers that the profit margin used was set at 5 %.
20 It follows from the foregoing that there is no need to define the applicant as an importer or as an exporter; in the light of its business dealings with Ricoh, Nashua is concerned by the findings relating to the existence of the dumping complained of, and the provisions of the contested regulation regarding Ricoh' s dumping practices are therefore of direct and individual concern to it .
21 The application for the annulment of Regulation No 535/87 in so far as it imposed an anti-dumping duty of 20% on plain paper photocopiers manufactured by Ricoh is therefore admissible .
Substance
22 In support of its claim Nashua makes five submissions, alleging variously : ( 1 ) miscalculation of the dumping margin; ( 2 ) incorrect construction of the normal value of products sold to OEMs; ( 3 ) miscalculation of the anti-dumping duty; ( 4 ) infringement of the principle prohibiting discrimination; ( 5 ) the illegality of the refusal to take account of the undertaking offered by Nashua .
Miscalculation of the dumping margin
23 Nashua claims first of all that it is an exporter, because it generally purchases its photocopiers in Japan or, in any event, acquires title to them in Japan before they are delivered to the carrier and is solely responsible for the exportation, forwarding, sale and after-sale service of the products . Consequently, the Council should have established a dumping margin for Nashua separate from the margin that it established for manufacturer-exporters of the same product . It points out that the Council had the necessary information for that purpose since, in the course of constructing the normal value, it made adjustments required by the special nature of sales to OEMs and, in ascertaining the export price, took account of the price invoiced to it by Ricoh . Nashua adds that this method is in keeping with the practice of the Commission, which has on several occasions established separate dumping margins for a number of exporters of products purchased from the same manufacturer .
24 According to Article 2(2 ) of Regulation No 2176/84, "a product shall be considered to have been dumped if its export price to the Community is less than the normal value of the like product ". As Article 2(8)(a ) of the regulation further provides, "the export price shall be the price actually paid or payable for the product sold for export to the Community ". In this case, plain paper photocopiers were sold by Ricoh for export, and it is the price paid by Nashua to Ricoh - as, indeed, the applicant has admitted - which must be regarded as the export price . It follows that the dumping must be attributed to Ricoh and not to Nashua .
25 As the Council rightly observed in paragraph 92 of the contested regulation, the fact that the OEMs themselves exported the products could not therefore justify the exclusion of the sales in question from the calculation of Ricoh' s dumping margin; indeed, such exclusion could increase the dumping margin of the firm concerned .
26 Lastly, it should be observed that Nashua' s situation is not comparable to that of exporters for whom the Council and the Commission have set dumping margins separate from those fixed for the manufacturers of the same product . Those exporters were established in the country of export and sold the dumped products complained of not only for export purposes but also on the domestic market .
27 Secondly, Nashua claims that in any case there was nothing to prevent the establishment of a separate dumping margin in respect of the distribution network for its photocopiers . It refers in that regard to the practice adopted in the United States of America in situations such as its own .
28 The dumping margin calculated for Ricoh' s sales to OEMs is lower than the margin established for other sales, and the final dumping margin is equal to the average of the margins set for all the sales channels of manufacturers, in accordance with Article 2(13)(c ) of Regulation No 2176/84, under which "where dumping margins vary, weighted averages may be established ".
29 The application of that provision was justified in the circumstances of this case . In the first place, as was shown above, to calculate the dumping margin without taking account of sales to Nashua might lead to an increase in Ricoh' s dumping margin; secondly, it was necessary to avoid giving the manufacturer an incentive to market most of its products under the brand names of OEMs .
30 As regards the argument based on the United States practice in such matters, which is challenged by the Council, it should be noted that, as the Court held in its judgment of 5 October 1988 in Joined Cases 277 and 300/85 Canon v Council (( 1988 )) ECR 5731, paragraph 15, the attitude of one of its trading partners, even a major partner, does not suffice to oblige the Community to follow the same course . Such reference cannot, therefore, determine how the Community legislation is to be interpreted .
31 It follows from the foregoing that the submission alleging miscalculation of the dumping margin is unfounded and must therefore be rejected .
Incorrect construction of the normal value of products sold to OEMs
32 Nashua maintains that by adopting a profit margin of 5% in constructing the normal value of products sold to OEMs the institutions made an arbitrary adjustment which takes no account of the differences between sales to OEMs and sales under the manufacturer' s own brand name . The difference between those two types of sale is, it says, appreciable at the level of the selling, administrative and general expenses, which are far less in sales to an OEM than in sales to an ordinary dealer, principally because of the large and regular order pattern of an OEM and because the manufacturer incurs no distribution, marketing, advertising and other selling expenses after the sale is made to the OEM .
33 It is apparent from the documents before the Court that the institutions took into consideration the difference between the costs and profits associated with sales to OEMs and the equivalent figures for other sales . Indeed, it was for that purpose, and because the institutions found it impossible to gauge that difference accurately, that in constructing the normal value they set the profit margin at 5% instead of its average rate, estimated at 14.6%, and applied that margin to sales under the manufacturers' own brand names .
34 Nashua has not adduced evidence to show that the profit margin as calculated was insufficient to cover the alleged differences in their entirety . It follows that the submission alleging incorrect construction of the normal value of the products sold to OEMs must be rejected .
Miscalculation of the anti-dumping duty
35 Nashua maintains that the Council made an error in calculating the anti-dumping duty on the basis solely of the prices charged by Ricoh' s Japanese subsidiaries in Europe in sales to independent dealers, rather than the prices charged by Nashua . The percentage of sales thus taken into consideration was not representative, inasmuch as it failed inter alia to include an entire category of sales in the Community, namely sales by OEMs, which accounted for 28% of all sales of Japanese photocopiers in 1985 . According to Nashua the Council' s procedure was at odds with the method which it had used for determining the dumping margin, which was established on the basis of all Ricoh' s sales, including sales to OEMs .
36 For the calculation of the anti-dumping duty, Article 13(3 ) of Regulation No 2176/84 merely requires the institutions not to exceed either the dumping margin established or the extent of the injury, if a duty lower than the dumping margin would be adequate to remove the injury . The institutions thus enjoy a wide discretion in choosing the method for calculating the duty and are not obliged to adopt for that purpose the same method as that used for determining the dumping margin .
37 In order to determine, in this case, the level of duty which would eliminate the injury suffered by Community producers, the institutions saw fit to base themselves on the total injury caused by exports of plain paper photo copiers from Japan, which accounted for 70% of total sales of plain paper photocopiers in the Community .
38 Nashua has failed to demonstrate that this approach affected the level of the anti-dumping duty imposed, or to what extent that level would have differed if sales by OEMs had also been taken into account .
39 It follows that this submission must be rejected .
Infringement of the principle prohibiting discrimination
40 According to Nashua, the Council infringed the principle prohibiting discrimination by applying anti-dumping duties at a standard rate to all imports of plain paper photocopiers . It claims that it pays, in absolute terms, a far higher anti-dumping duty than a related subsidiary of a Japanese manufacturer, since its gross profit margin is only 16% whereas the margin achieved by the related subsidiaries of Japanese manufacturers amounts to 42 %.
41 It is not necessary to examine the figures put forward by Nashua and challenged by the Council; it need only be noted, first, that the difference alleged appears to be the result not of the introduction of anti-dumping duties but of Ricoh' s sales policy and, secondly, that the introduction of anti-dumping duties seeks to remove the injury caused to Community producers and not to ensure that all importers enjoy the same profit margin .
42 This submission must therefore be rejected .
Illegality of the refusal to take account of the undertaking offered by Nashua
43 In this submission Nashua argues that by failing to consider the substance of the undertaking which it had proposed the Commission infringed Article 10 of Regulation No 2176/84 . By upholding that practice on the part of the Commission, the contested regulation also infringed Article 10 .
44 According to Nashua the Commission must first of all consider whether the undertaking offered is likely to remove the injury . Only after determining that can the Commission, in the exercise of its discretion, decide to accept or reject the proposed undertaking . There was no such consideration in this case, however; the Commission simply made some general observations on Nashua' s status and referred to its traditional practice of not accepting undertakings from importers .
45 The Commission' s practice of not accepting undertakings from importers, supported by the Council at paragraph 100 of the contested regulation, is based both on the rules of the GATT Anti-Dumping Code, Article 7 of which provides for the acceptance of undertakings from exporters only, and on Article 10 of Regulation No 2176/84 . Although Article 10 does not rule out the possibility for the Commission of accepting an undertaking offered by an importer, its wording implies that they may be accepted only in exceptional cases . Article 10(4 ) and ( 6 ), dealing with the continuation of the investigation after the acceptance of undertakings and the introduction of anti-dumping duties after the withdrawal of an undertaking or the discovery that it has been infringed, refers only to exporters, that is to say, those traders whose undertakings may a priori be accepted .
46 The system is justified on two lines of reasoning . First, acceptance of the undertaking offered by an importer would have the effect of encouraging him to continue to obtain supplies from outside the Community at dumped prices . Secondly, other importers would have to receive the same treatment and this, on account of the large number of companies involved, would make it extremely difficult to monitor compliance with the undertakings .
47 The question whether Nashua is the actual exporter of the plain paper photocopiers or the importer is quite irrelevant . Since the photocopiers are purchased for importation into the Community, and therefore the reasons justifying the refusal to accept undertakings offered by importers are applicable, Nashua could not be regarded as an exporter for that purpose ( fourth subparagraph of paragraph 100 of the contested regulation ).
48 It follows that by refusing to accept the undertaking offered by Nashua on the grounds set out in paragraph 100 of the contested regulation the institutions did not exceed the discretion which they enjoy .
49 The last submission made by Nashua must therefore be rejected, and hence the application must be dismissed in its entirety .
Costs
50 Under Article 69(2 ) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs . As the applicants have failed in their submissions they must be ordered to pay the costs . In Case C-150/87 the applicants are ordered jointly and severally to pay the costs, including the costs of the interveners .
On those grounds,
THE COURT
hereby :
( 1 ) Dismissesthe application in Case C-133/87 as inadmissible;
( 2 ) Dismisses the application in Case C-150/87 as unfounded;
( 3 ) Ordersthe applicants to pay the costs in both cases; in Case C-150/87 the applicants are ordered jointly and severally to pay the costs, including those of the interveners .
