(1)

By Regulation (EC) No 1193/2008 (2), the Council imposed anti-dumping duties on imports of citric acid originating in the People’s Republic of China (‘PRC’, ‘China’ or the ‘country concerned’) (‘the original measures’). The investigation that led to the imposition of the original measures will be referred to as ‘the original investigation’. The measures took the form of an ad valorem duty ranging from 6,6 % to 42,7 %.

(2)

By Decision 2008/899/EC (3), the European Commission (‘the Commission’), accepted price undertakings offered by six Chinese exporting producers (including a group of exporting producers) together with the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (‘CCCMC’). The producers were Anhui BBCA Biochemical Co., Ltd. (now COFCO Bio-Chemical Energy (Yushu) Co., Ltd.); Laiwu Taihe Biochemistry Co., Ltd.; RZBC Co., Ltd. and RZBC (Juxian) Co., Ltd.; TTCA Co., Ltd.; Weifang Ensign Industry Co., Ltd.; and Yixing Union Biochemical Co., Ltd. (now Jiangsu Guoxin Union Energy Co., Ltd.).

(3)

By Decision 2012/501/EU (4), the Commission withdrew the undertaking offered by one exporting producer, i.e. Laiwu Taihe Biochemistry Co. Ltd. (‘Laiwu Taihe’).

(4)

By Implementing Regulation (EU) 2015/82 (5), the Commission extended the definitive anti-dumping measures on imports of citric acid originating in the PRC for five years following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 1225/2009 (6) and revised the measures following a partial interim review pursuant to Article 11(3) of Regulation (EC) No 1225/2009.

(5)

By Implementing Regulation (EU) 2016/32 (7), the Commission extended the anti-dumping measures on imports of citric acid originating in China to imports of citric acid consigned from Malaysia, whether declared as originating in Malaysia or not.

(6)

By Implementing Regulation (EU) 2016/704 (8), the Commission withdrew undertakings of two additional Chinese exporting producers, i.e. Weifang Ensign Industry Co., Ltd (‘Weifang’) and TTCA Co., Ltd (‘TTCA’), because of breaches of the undertakings.

(7)

By Implementing Regulation (EU) 2021/607 (9), the Commission extended the definitive anti-dumping measures on imports of citric acid originating in the PRC as extended to imports of citric acid consigned from Malaysia, whether declared as originating in Malaysia or not, for five years following an expiry review (the ‘previous expiry review’).

(8)

By Implementing Regulation (EU) 2023/2180 (10), the Commission added a new exporter producer Seven Star Lemon Ltd. (‘Seven Star’) to the list of companies with individual duty rates (the ‘new exporter review’).

(9)

The anti-dumping duties currently in force range from 15,3 % to 42,7 % on imports from the cooperating exporting producers, and a duty rate of 42,7 % applies to imports from all other companies.

(10)

The Commission accepted price undertakings offered by six Chinese exporting producers together with ‘CCCMC’. Due to the breach of the undertaking conditions, the Commission withdrew the acceptance for three exporters. Thus, undertakings were in force for the remaining exporters, namely:

(11)

Each of these exporting producers offered jointly with the CCCMC undertakings where both the exporter and CCCMC committed to respect the obligations stipulated therefore.

(12)

The undertakings offers were submitted in two versions: one sensitive, containing details on the MIP of the undertakings that were accessible only to the parties signing the undertakings, and another one non-confidential, without details on the minimum import price (MIP), accessible only to the interested parties registered in the relevant proceeding. Thus, the MIP information was regarded as strictly confidential and cannot be legally disclosed to other parties.

(13)

The exporting producers concerned and CCCMC agreed, inter alia, to consult the Commission for any difficulties, questions, technical or otherwise, which may arise during the implementation and application of the undertakings.

(14)

According to Article 8(9) of the basic Regulation, any breach of the undertakings by any party shall lead to the withdrawal of the acceptance of the undertakings.

(15)

The undertakings stipulate that acceptance of the undertakings is based on trust and that any action which would harm the relationship of trust established with the European Commission shall justify the withdrawal of the acceptance.

(16)

Moreover, the undertakings stipulate that the Commission may withdraw the acceptance of the undertakings at any time during its period of application if monitoring and enforcement prove to be impracticable.

(17)

In the last new exporter review, the producer Seven Star, together with the CCCMC, submitted a price undertaking offer which referred exactly to the same MIP applicable to other three undertakings in force. During the investigation, neither Seven Star nor CCCMC at any stage of the proceeding, requested beforehand from the Commission any information regarding the MIP level (11). As indicated in recital (12), the details on the MIP of the previously accepted undertakings are confidential information accessible only to the parties signing the undertakings. CCCMC was a party to the original undertakings agreements as a co-signatory with the respective exporting producers, given its role and engagements in the implementation and monitoring. By contrast, Seven Star was neither a party to these undertakings, nor was it an interested party in the previous proceedings.

(18)

The CCCMC never informed the Commission that it had received Seven Star’s undertakings offer with the same MIP as for other exporters nor did they contact the Commission about the possible disclosure of the confidential information. The circumstance that the MIP was no longer confidential to an external party such as Seven Star MIP is a major issue which the CCCMC should have brought to the Commission’s attention under its consultation obligation mentioned under recital 13 above. Instead, CCCMC co-signed the offer that was submitted during the new exporter review investigation.

(19)

The CCCMC was already aware that the MIP level and its adjustment mechanism are confidential as any other sensitive information submitted during the investigation, as reminded by the Commission with the letter sent on 1 March 2021, and this confidentiality should be respected by both the CCCMC and the companies (12).

(20)

The Commission assessed this finding and concluded that failure to immediately inform the Commission of the leak of sensitive information regarding the MIP is a breach of the consultation obligation.

(21)

The Commission also assessed the breach of trust in the light of the role of the CCCMC in the implementing and monitoring of the undertaking. As it has been noted in the Commission Implementing Decision (EU) 2015/87 (13), the undertakings offered have been accepted due to joining the CCCMC to the companies offering undertakings and its active role in facilitating the monitoring of the undertakings. The CCCMC directly or indirectly confirming the accuracy of the MIP to the third party not only breached its consultation obligation, but also harmed the trust on which the undertakings have been based. Therefore, the Commission may no longer rely on the CCCMC’s support in the monitoring of the undertakings.

(22)

As a consequence of CCCMC’s aforementioned actions regarding the undertakings in force, producers not subject to the undertakings having information about the MIP level and its adjustment mechanism may adjust their prices accordingly. However, only companies subject to the undertakings must fulfil strict commitments, including the reporting obligation and the obligation to be subject to periodical verification. Thus, the knowledge of the MIP without formal commitment to comply with undertakings provisions may create an advantageous position on the market.

(23)

The Commission assessed the above findings and concluded that the MIP applicable for the exporting producers concerned is not enforceable anymore and that undertakings for all exporters have become impractical.

(24)

The findings of breaches of the undertakings that harmed the relationship of trust established with the Commission and its further impracticability justify the withdrawal of the acceptance of the undertakings for all exporting producers pursuant to Articles 8(7) and 8(9) of the basic Regulation and pursuant to the terms of the undertakings.

(25)

Interested parties were granted the opportunity to be heard and to comment pursuant to Article 8(9) of the basic Regulation.

(26)

The Commission within the prescribed deadline received comments from CCCMC and three Chinese exporting producers. One Union producer after the deadline submitted its statement supporting the termination of the undertakings that according to this producer do not provide adequate protection against dumped imports of citric acid from China. CCCMC and the three Chinese exporting producers were heard by the Commission.

(27)

First, CCCMC and Guoxin Union argued that CCCMC had not breached the undertaking and that none of the situations listed in the provisions of the undertaking that are considered as a breach of the undertaking may refer to the behaviour of CCCMC described above. Despite confirming that it received the letter mentioned in recital (19) with information that the MIP is confidential, CCCMC is of the opinion that providing or confirming the existing MIP to another producer offering the undertaking does not constitute a ground for withdrawal of the undertaking for any exporter already subject to the undertaking. The Parties also claimed that the MIP shall not be considered as confidential information.

(28)

Although the situation that has been described in Section 3 of this Regulation is not explicitly mentioned in the list of potential breaches of the undertaking, the Commission noted that the clause consisting of the list of potential breaches is not exhaustive, as underlined in the wording of the clause (14). Moreover, CCCMC in its comments itself refers to one of the clauses of the undertaking that establishes the obligation to consult with the European Commission regarding any difficulties or questions, technical or otherwise, which may arise during the implementation and application of the undertaking (15). Therefore, CCCMC itself, in its comments, refers to the provisions of the undertaking that are applicable to the circumstances based on which the undertaking has been withdrawn, namely due to the breach in the consultation obligation and harm to the relations of trust.

(29)

As it is presented in recital (18), CCCMC omitted to consult with the Commission according to this principle. Therefore, CCCMC has infringed the clauses of the undertaking (16), which constitutes a breach of the undertaking (17). According to the undertaking provisions, in that situation the Commission shall immediately withdraw the acceptance of the undertaking (18).

(30)

The Commission recalled the argumentation presented in recital (12) that the undertaking offer had been submitted in two versions. The limited version of the undertaking, which includes the MIP and calculation method, refers to Article 19 of the basic Regulation regarding confidentiality. Had the MIP not been confidential, then it would have been included in the open version of the undertaking ‘available for all parties of the investigation’. However, it was the opposite (it was marked as confidential). Therefore, any arguments presented by the parties that the MIP is not confidential shall be rejected.

(31)

Further, following the provision of the undertaking regarding the scope and main elements of the undertaking, CCCMC and the Chinese exporters subject to the undertaking committed to respect all other obligations so that the European Commission can effectively monitor the undertaking (19). The monitoring rules were specified in the undertaking (20), which includes clauses based on which the Commission may give further instructions which are considered necessary for correct the functioning of the undertaking (21). Thus, CCCMC incorrectly claimed that the instructions, including the letter dated 1 March 2021, were merely technical and cannot constitute a ground for the withdrawal in case of breach of the obligation stipulated there. The Commission reiterated that the MIP is confidential from the moment the undertaking is offered, and the information on the confidentiality of the MIP contained in the letter of 1 March 2021 was merely a reminder of such provision. Therefore, CCCMC was obliged to respect the confidentiality of the MIP and consult the Commission when it received a new undertaking offer containing confidential information from a third party that was neither authorised nor supposed to have them. As this has not occurred, CCCMC violated the consultation obligation.

(32)

Exporters claimed also that the MIP could be disclosed by the exporting producers mentioned in recitals (3) and (6) who are no longer subject to the undertaking due to withdrawal of the acceptance by the Commission. RZBC, moreover, claimed that Seven Star is even entitled to obtain the information about the MIP because all parties to the undertaking know the MIP, and Seven Star should have the same rights as all other companies subject to measures in light of equal treatment and non-discrimination. In RZBC’s opinion, as Seven Star was entitled to know the MIP, any procedural error in obtaining it should not be considered as a breach, and if so, then only as a purely technical breach.

(33)

It must be noted that although Seven Star was not a party to this proceeding, according to the comments submitted by CCCMC (22), it has provided CCCMC with information regarding the investigation in the new exporter review. Despite that, none of the parties, including CCCMC, submitted any evidence supporting the argumentation that Seven Star has obtained the MIP from one of the exporters that was in the past subject to the undertaking. Parties have not presented any evidence that Seven Star requested the MIP from CCCMC or the Commission. The Commission also did not possess any communication from Seven Star or CCCMC in this regard.

(34)

As regards the allegation on unequal treatment and discrimination, it must be stressed that only parties to the undertaking whose offers were accepted are entitled to possess the information about the MIP, not all exporting producers of the product concerned. Seven Star, although subject to the measures in the form of duties, has never been accepted as a party of the undertaking. In the new exporter review the undertaking offer submitted by Seven Star was not accepted due to other reasons, namely, it was inconsistent with its specific situation resulting from the investigation. This confirms that each case should be assessed separately according to the circumstances. It must be underlined that it is not the exporting producer or CCCMC who may decide who is or not entitled to the MIP. It is in the discretion of the Commission to accept or not the undertaking offer based on the criteria stipulated in Article 8 of the basic Regulation. Furthermore, Seven Star was not required to submit an offer with a calculation mechanism for the MIP identical with the three undertaking offers already accepted. Rather, Seven Star should have proposed an approach for the determination of the MIP and its future indexation, including the calculation components and benchmarks to be used, taking into account the specific circumstances of this company. Seven Star used the same MIP methodology as for other exporting producers, which was not appropriate for it, causing that its offer could not be accepted. Therefore, any allegation regarding discrimination or non-equal treatment are groundless.

(35)

As mentioned above, an undertaking should be adequate to remove the effects of injurious dumping and, therefore, the MIP and the methodology for its determination must reflect the circumstances applicable to the exporter. Consequently, both the MIP and the methodology are based on an analysis and assessment of all facts available, to be finalised in close cooperation with the Commission. Thus, the disclosure of a MIP agreed in undertakings already accepted cannot be reduced to a simple act of providing an isolated piece of information which would have been made available to Seven Star in any event, rendering this disclosure a merely ‘technical’ infringement. This reasoning is incorrect for the reasons already set out in the previous recitals.

(36)

Nevertheless, the Commission recalled that the action that harmed the relations of trust was the fact that CCCMC did not consult the Commission before confirming the MIP to the new exporter.

(37)

Second, CCCMC and the exporting producers referred to the past practice in accepting an undertaking offered by new exporting producers. To demonstrate this, CCCMC and Guoxin Union have referred to Commission Decision dated 23 March 2010 (23) (‘castings case’) where three exporters, following the new exporting producer treatment (‘NEPT’), submitted identical undertaking offers to the one that had been already accepted in the original investigation.

(38)

Another exporter submitted a separate undertaking offer which was rejected by the Commission, as its monitoring was considered impractical since it was not the same as the one already accepted. Based on this practice, CCCMC and Guoxin Union came to the conclusion that new exporters may have no possibility to join existing undertakings as in any case the offer may be rejected – either as in the castings case because it was different than the already accepted one, or as in Seven Star due to the breach of confidentiality.

(39)

The Commission reiterated that it has wide discretion in taking decisions on undertaking offers. Moreover, undertakings provide for an exemption to the collection of the duties. Therefore, they must be interpreted strictly and assessed on case-by-case basis. It is impossible to anticipate any practice or legitimate expectation based on only one case and, more importantly, based on the different circumstances.

(40)

It must be recalled that, in the present case, undertakings were initially accepted for five exporters with the same MIP and for one additional exporter with a different MIP based on its dumping margin (24). Therefore, the argument that different undertakings with different MIPs may not be accepted is invalid. Moreover, no analogy can be drawn with the castings case. In that case, the undertaking was a joint liability undertaking of 20 companies and CCCME, where violation of the undertaking agreement by any party entailed a breach of all signatories (25). In the current case, there is no joint undertaking in force: each exporter jointly only with CCCMC offered separate undertakings. As a consequence, any actions conducted by CCCMC has an impact on all the separate undertakings in force. Furthermore, in the casting case, the legal representative of CCCME consulted the Commission before submitting the complete offer by new exporters following NEPT procedures. This was not followed by CCCMC in the current case. Thus, the argument was rejected.

(41)

Third, CCCMC claimed that the consultation obligation is required only in case of difficulties or questions, which CCCMC did not have relating to Seven Star, based on the prior practice in the castings case. According to CCCMC, Seven Star informed the Commission about the intention to join the undertaking already during the verification visit conducted at the premises of the exporter in June 2023. Moreover, the Commission had not raised any objections when Seven Star submitted the offer with the same MIP as for other exporters. CCCMC also claimed that the Commission did not indicate that the undertaking terms proposed by Seven Star had confidentiality issues. The CCCMC assumed that the Commission provided active, timely and responsible guidance and feedback on the new exporter’s undertaking application, so consequently CCCMC did not consult the Commission.

(42)

The Commission recalled that, during the new exporter review, the Commission was not requested any assistance or guidance in this regard. The Commission has not received any requests or communication regarding the MIP or its adjustment methodology. Apart of the indication during the verification visit that Seven Star is interested in submitting the undertaking offer, the first contact from the producer was including a nearly completed undertaking offer with the MIP. The Commission conducted further regular procedural steps to analyse the offer and provided the final assessment to the parties of the investigation. Both CCCMC and Seven Star were informed about this assessment and main findings, including the issues with confidentiality of the MIP, and were given time to comment and present their argumentation in this regard. However, they refrained from this opportunity and did not provide any comments. Therefore, claims that the Commission had not raised any objection concerning confidentiality are unfounded.

(43)

According to the Commission, it is not in CCCMC’s capacity to anticipate what it believes or assumes it would happen. In any case related to the new exporter, CCCMC is not entitled to provide information regarding the existing undertaking to third parties. The provision of undertaking stipulates that the consultation obligation as regards any situation, not only questions or difficulties, but also technical or any other issue concerning implementation and application of the undertaking are mandatory. Certainly, providing any information concerning the MIP to parties not subject to the undertaking without prior consultation with the Commission falls under this consultation obligation (26).

(44)

Fourth, CCCMC and the exporting producers contested that knowledge about the MIP by other companies not subject to the undertaking may be advantageous for them. They pointed out that there are already companies that know the MIP formula, and there is no proof that it created any advantageous position on the market. Moreover, they claimed that the actual selling price is higher than the MIP, so other companies that are not subject to the undertaking may not predict the actual price.

(45)

The Commission recalled that, according to Article 19(1) of the basic Regulation, any information of which disclosure would be of significant competitive advantage to a competitor is confidential. As already mentioned, the MIP is confidential information due to these reasons. Exporters subject to undertaking cannot sell their products to the Union below the set MIP. Therefore, it is logical that the prices are higher than the MIP. However, usually this difference is not significant, unless there are extraordinary market circumstances, which are not present in this case. All exporters subject to the undertaking committed to fulfil numerous obligations, including periodical reporting of all transactions, being available for any verification, and consulting the Commission on any matters related to monitoring and implementation. Any other exporter not being subject to the undertaking does not have to comply with these obligations. Knowing the MIP and the adjustment methodology would allow other exporters to set the price of their products below the MIP even with duties applied beyond any control, due to a lack of a reporting obligation. Thus, those sales would result in further injury to the Union producers.

(46)

Although some of the companies were subject to the undertaking in the past and had knowledge about the MIP mechanism, the withdrawal of their undertaking followed the non-compliance by these companies with the commitment provided in the undertaking. Thus, the circumstances in the current case are different, as in the previous decisions the Commission had no evidence of breach of confidentiality. In the current case, the Commission has not decided to accept the undertaking from Seven Star and nevertheless the company was able to access confidential information on the MIP. The Commission assessed current circumstances and consequences following the breach of confidentiality and, as explained in recital (45), concluded that maintaining the undertakings was not practical anymore. This claim had to be therefore dismissed.

(47)

Fifth, CCCMC and the exporters concerned argued that the withdrawal of the undertaking is not in the interest of the Union market, and as a consequence, the balanced market will be disrupted. The Commission found this argumentation unsubstantiated. The Union industry in their submission clearly stated that measures in the current form are not sufficient. Withdrawal of the undertaking will not impact the availability of the product on the market or its quality. Besides, withdrawal of the undertaking does not limit the exporters to sell the product concerned to the Union. Therefore, these claims could not be accepted.

(48)

CCCMC and the exporters concerned alleged that the withdrawal of the undertakings is too oppressive and non-proportional to the behaviour of CCCMC and other exporters. It must be noted that the Commission enjoys the discretion to assess the behaviour of the parties for the purpose of defining the nature of the undertaking infringed and determining whether it is necessary to withdraw the acceptance of the undertaking. As already explained above, the Commission found an infringement of the undertaking by CCCMC, and a breach of the relationship based on trust. Furthermore, the Commission found that in these circumstances the undertaking and its monitoring is no longer practical, which itself is an independent reason to withdraw the undertaking. It must also be recalled that undertakings may be withdrawn regardless of the level of the materiality of the breach. Moreover, the undertaking offers were accepted due to the role of CCCMC in the implementation and monitoring of the undertaking, which also was stressed by CCCMC itself in the written submission and hearing. Therefore, in case of breach of trust between the Commission and CCCMC, which is a joint party of each exporter’s undertaking, the breach of trust is implied for all exporters. Thus, after thorough analysis, the Commission concluded that the acceptance of the undertakings shall be withdrawn.

(49)

Lastly, CCCMC and the exporting producers concerned proposed to address the issue of the consultation obligation and MIP disclosure to other exporters. CCCMC offered to establish a common position on the consultation obligation in case of new exporters would intend to join the undertaking. As already explained in recital (31), the undertaking offered by the exporters concerning citric acid is not a joint undertaking, and new offers are assessed based on the circumstances at hand. Exporters, on the other hand, proposed that they may maintain the undertakings with a possible revision. Although parties have not submitted any particular solution or precise proposal, the Commission assessed any possible solution that could be practical and acceptable for the Commission as foreseen in the undertaking (27); however, such a solution that fulfilled the requirements of the Undertaking according to Article 8 of the basic Regulation could not be found.

(50)

To fully prevent potential risks of duties evasion and selling goods below a non- injurious price by companies that are not subject to the undertaking but have knowledge about the MIP, the Commission would have to conduct complex monitoring of imports in general, besides the monitoring of the imports falling under the undertakings. Without any reporting obligation provided for these exporters, monitoring of imports by exporting parties not subject to the undertaking is too burdensome and, therefore, cannot be considered as an effective one. For the same reason, having individual undertakings for each separate exporter cannot be accepted. Moreover, as already mentioned in recitals (21)-(23), the undertaking offered by the exporters were accepted due to the joining of CCCMC and its active role in facilitating the monitoring of the undertakings. Having regard to the reasons of the withdrawal of the undertaking, the more complex monitoring without involvement of the CCCMC even more cannot be accepted due to its impracticability. Thus, the Commission considered that there is no possible remedy for the disclosure of the current MIP to the new exporter not subject to the undertaking, and the current undertaking is no longer practical. Therefore, its acceptance should be withdrawn.

(51)

To conclude, the Commission was concerned that CCCMC omitted to consult the Commission while it was approached by the new exporter with the new undertaking offer. That behaviour constitutes a violation of the undertaking and, therefore, the undertaking must be withdrawn. CCCMC is not entitled to solely, without any consultation with the Commission, conclude what is the practice of the Commission, especially as regards the exceptional form of measures like undertakings, which have to be assessed on case-by-case manner. Neither CCCMC nor the exporters concerned managed to present any previous example of the acceptance of the undertaking for the new exporter in the same circumstances as in the new exporter review in citric acid, and any other similar case or alleged previous Commission’s practice would not impinge upon the Commission’s discretion to terminate undertakings in the circumstances of the present case. Similarly, the argument put forward by the parties that the withdrawal of the undertaking is not in the interest of the Union is not relevant in this case. According to Article 8 of the basic Regulation, Union interest is not an element for assessing the practicality and effectiveness of an undertaking offer. In any case, parties have not presented any substantiated argument about the negative impact of the undertaking’s withdrawal for the Union industry or the Union market. Lastly, the Commission has not been presented any new solution that could be practical for monitoring.

(52)

In the view of the above, none of the reasons put forward by CCCMC and the exporting producers could alter the conclusion that the acceptance of the undertaking should be withdrawn.

(53)

In accordance with Article 8(9) of the basic Regulation and the relevant clauses of the undertakings authorising the Commission to unilaterally withdraw the undertakings, the Commission concluded that the acceptance of the undertakings offered by COFCO, RZBC and Guoxin Union jointly with the CCCMC should be withdrawn and that Implementing Decision (EU) 2015/87 and preceding Decision of 2 December 2008 (2008/899/EC) should be repealed. Accordingly, the definitive anti-dumping duty imposed by Article 1 of Implementing Regulation (EU) 2021/607 should be collected as regards imports of the product concerned produced by the companies COFCO Bio-Chemical Energy (Yushu) Co. Ltd. (Taric additional code A874), RZBC Co. Ltd. (Taric additional code A876), RZBC (Juxian) Co., Ltd. (Taric additional code A877), and Jiangsu Guoxin Union Energy Co., Ltd. (Taric additional code A879).

(54)

Having regard the contractual commitments of the Union importers who purchased the goods in the expectation to receive the goods covered by the undertakings, imports of citric acid accompanied by an undertaking invoice issued before the entry into force of this Regulation, in compliance with the provisions of the undertakings, shall be exempted from the collection of anti-dumping duties. However, any goods for which the declaration for release into free circulation has been accepted after 30 days from the entry into force this Regulation, shall be subject to the collection of duties. This period shall allow both importers in the Union and exporting producers to finalise their already concluded contractual commitments or to be duly informed about possible consequences related with the withdrawal of the acceptance for the undertakings,