Case C‑468/15 P

‛Appeal — Dumping — Implementing Regulations (EU) No 1138/2011 and (EU) No 1241/2012 — Imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia — Regulation (EC) No 1225/2009 — Article 2(10)(i) — Adjustment — Functions similar to those of an agent working on a commission basis — First subparagraph of Article 2(10) — Symmetry between the normal value and the export price — Principle of sound administration’

Summary — Judgment of the Court (Ninth Chamber), 26 October 2016

1. Appeal — Grounds — Incorrect assessment of the facts and evidence — Inadmissibility — Review by the Court of the assessment of the facts and evidence — Possible only where the clear sense of the evidence has been distorted

   (Art. 256(1) TFEU)

2. Common commercial policy — Protection against dumping — Dumping margin — Comparison between the normal value and the export price — Adjustments — Account taken of sales commissions — Functions carried out by the trader comparable to those of an agent working on a commission basis — Distributor forming an economic entity with the producer — Not included — Determination of the existence of an economic entity — Elements to be taken into consideration

   (Council Regulation No 1225/2009, Art. 2(10)(i))

3. Actions for annulment — Jurisdiction of the EU judicature — Substitution of an institution’s grounds for a decision — Unlawful

   (Arts 263 TFEU and 264 TFEU)

4. Appeal — Grounds — Inadequate statement of reasons — Reliance by the General Court on implied reasoning — Lawfulness — Conditions

   (Art. 256 TFEU; Statute of the Court of Justice, Arts 36 and 53, first para.; Rules of Procedure of the General Court, Art. 81)

5. Common commercial policy — Protection against dumping — Dumping margin — Comparison between the normal value and the export price — Adjustments — Burden of proof

   (Council Regulation No 1225/2009, Art. 2(10)(i))

1.  See the text of the decision.

   (see paras 27-29, 59, 60, 74, 75, 94, 95, 104, 105)

2.  In the comparison between the normal value and the export price, an adjustment under Article 2(10)(i) of the Regulation No 1225/2009 on protection against dumped imports from countries not members of the European Community (the basic regulation) cannot be made where the producer established in a third State and its related distributor responsible for exports to the European Union form a single economic entity.

3.  The division of production and sales activities within a group made up of legally distinct companies can in no way alter the fact that the group is a single economic entity which organises in that way activities that in other cases are carried on by what is, also from a legal point of view, a single entity.

   In those circumstances, recognition of the existence of a single economic entity avoids costs, which are clearly included in the sale price of a product when that sale is carried out by an integrated sales department in the producer’s organisation, no longer being included where the same sales activity is carried out by a company which is legally distinct, even though economically controlled by the producer.

   It follows that a distributor that forms a single economic entity with a producer established in a third State cannot be regarded as carrying out functions comparable to those of an agent working on a commission basis, within the meaning of Article 2(10)(i) of the basic regulation.

   In the analysis of whether there is a single economic entity between a producer and its related distributor, it is crucial, under the case-law of the Court, to consider the economic reality of the relationship between that producer and that distributor. In view of the requirement of a conclusion reflecting the economic reality of the relationship between that producer and that distributor, the EU institutions are required to take account of all factors relevant to the determination as to whether or not that distributor carries out the functions of an integrated sales department within that producer. Those factors cannot be limited to the functions carried out by the related distributor in connection only with the sales of the product concerned manufactured by the producer which claims to form a single economic entity with that distributor. In the same way, the direct invoicing by the producer established in a third State of a proportion of export sales to the European Union is a relevant factor which those institutions may also take into account.

   In the same way as the EU institutions are entitled to take into account sales of products other than the product concerned manufactured by the related producer for the purposes of determining whether there is a single economic entity, the direct invoicing by the producer established in a third State of a proportion of export sales to the European Union is a relevant factor which those institutions may also take into account. In that regard, the General Court was right to observe, in paragraph 69 of the judgment under appeal, that the larger the proportion of such direct sales, the more difficult it is to maintain that the related trader carries out the functions of an internal sales department. Contrary to what PTMM asserts, paragraph 69 of that judgment is therefore not vitiated by any error of law.

   (see paras 39-44, 49, 56)

4.  See the text of the decision.

   (see para. 64)

5.  See the text of the decision.

   (see para. 71)

6.  If a party claims adjustments under Article 2(10) of the Regulation No 1225/2009 on protection against dumped imports from countries not members of the European Community (the basic regulation) in order to make the normal value and the export price comparable for the purpose of determining the dumping margin, that party must prove that its claim is justified.

   Moreover, the burden of proving that the specific adjustments listed in Article 2(10)(a) to (k) of the basic regulation must be made lies with those who wish to rely on them.

   Thus, where a producer claims that an adjustment of the normal value, in principle downward, or an adjustment of the export price, logically upward, applies, it is for that operator to indicate and to establish that the conditions for granting such an adjustment are satisfied. Conversely, where the EU institutions take the view that it is appropriate to apply a downward adjustment of the export price, on the ground that a sales company affiliated to a producer carries out functions comparable to those of an agent working on a commission basis, it is the responsibility of those institutions to adduce at the very least consistent evidence showing that that condition is fulfilled.

   It follows that, where the EU institutions have adduced consistent evidence that a distributor affiliated to a producer carries out functions comparable to those of an agent working on a commission basis, it will be for that distributor or that producer to adduce evidence that an adjustment under Article 2(10)(i) of the basic regulation is not justified, for example by demonstrating that they form a single economic entity. To that end, those economic operators could, inter alia, prove that they are not operated independently, and that they are tied together by compensatory arrangements. There is no presumption, in the context of the application of Article 2(10)(i) of the basic regulation, that two related companies are not operated independently, and that they are tied together by compensatory arrangements, such that the EU institutions would be required, in order to make an adjustment under that provision, to demonstrate that the two entities are managed independently.

   (see paras 82-86)