Case T-107/08

Transnational Company ‘Kazchrome’ AO and ENRC Marketing AG

v

Council of the European Union and European Commission

(Dumping – Imports of silico-manganese originating in China and Kazakhstan – Action for annulment – Export price – Comparison between export price and normal value – Calculation of the undercutting margin – Non-contractual liability)

Summary of the Judgment

1.      Actions for annulment – Council Regulation imposing a definitive anti-dumping duty – Action against the Commission – Inadmissibility

(Art. 230 EC; Council Regulation No 1420/2007)

2.      Acts of the institutions – Statement of reasons – Obligation – Scope – Regulation imposing anti-dumping duties – Adjustments of the export price to ensure a fair comparison between the normal value and the export price – Lack of sufficient reasoning

(Art. 253 EC; Council Regulation No 1420/2007)

3.      Common commercial policy – Protection against dumping – Imposition of an anti-dumping duty – Condition – Injury – Determination – Comparison between the normal value and the export price – Calculation of the undercutting margin

(Council Regulations No 384/96, Art. 3(2) and (3), No 1225/2009, Art. 3(2) and (3), and No 1420/2007, recitals 104 and 105)

4.      Non-contractual liability – Conditions – Unlawfulness – Injury – Causal link – Regulation imposing anti-dumping duties – Reduction in the volume of sales of an undertaking subject to that regulation – No causal link

(Art. 288 EC; Council Regulation No 1420/2007)

5.      Non-contractual liability – Conditions – Unlawfulness – Injury – Causal link – Expenses incurred in participating in anti-dumping proceedings involving an unlawful regulation – No causal link

(Art. 288, second para., EC)

1.      The Commission’s role in anti‑dumping proceedings forms an integral part of the Council’s decision-making process. The Commission is responsible for carrying out 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 such as a regulation imposing anti-dumping duties. However, the power of decision belongs to the Council, which is not obliged to take any decision at all if it disagrees with the Commission or may, if it wishes, adopt a decision on the basis of the latter’s proposals. In those circumstances, an action for annulment of a regulation adopted only by the Council is inadmissible in so far as it is directed against the Commission.

(see para. 26)

2.      The statement of reasons required by Article 253 EC must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether it meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

As regards a Council regulation imposing an anti-dumping duty, the assessment that a company which sells products to which the anti-dumping duty is applicable has, in the sales flow of the production company, functions similar to those of an agent working on a commission basis is vitiated by a lack of reasoning where, in order to make a fair comparison between the normal value and the export price and to make export price adjustments on a commission basis, inter alia, the Council merely states that those undertakings maintain a commercial relationship established under normal conditions of competition and that, accordingly, the sales company cannot be regarded as acting as an internal sales department, in spite of the evidence furnished by the undertakings concerned seeking to show that the relationship between them was that of a company and an internal sales department.

(see paras 31, 34, 36-37, 40)

3.      Article 1(1) of basic anti-dumping Regulation No 384/96 (now Article 1(1) of Regulation No 1225/2009) lays down the essential rule for imposing anti-dumping duties, pursuant to which it is not sufficient that the imported goods are dumped. Their release for circulation must also cause injury. It is precisely for determining whether there has been injury that the basic regulation provides, in Article 3(2) and (3) (now Article 3(2) and (3) of Regulation No 1225/2009), that an objective examination of the effect that imports have on the prices of similar goods on the European Union market must be made and that, to that end, consideration is to be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product, or whether the effect of such imports is otherwise to depress prices to a significant degree or to prevent price increases, which would otherwise have occurred, to a significant degree.

In those circumstances, where, in Regulation No 1420/2007 imposing a definitive anti-dumping duty on imports of silico‑manganese originating in the People’s Republic of China and Kazakhstan and terminating the proceeding on imports of silico-manganese originating in Ukraine, calculates, for the purpose of comparing import prices and European Union industry prices and determining whether injury has been caused to that industry by the dumped goods, the undercutting margin of the imported goods, it commits a manifest error of assessment in considering that the objective comparison between the import prices and those of the European Union industry and import prices requires that the reference point for determining the price of the latter is the point of their first entry in European Union territory and not where they were cleared for customs, in spite of the distance between those two points, thereby excluding from their price the significant expenses incurred in transporting them.

It is the prices negotiated between the exporting companies and the customers in reference to the point of customs clearance and not the prices calculated by the Council at an intermediate stage of transport, even if in European Union territory, which could lead customers to opt for the goods of the exporting companies instead of those of the European Union industry. The Council and Commission must, none the less, take account, within the limits of their discretion, of all the relevant factors in each case, including evidence which suggests that the choice of means of transport and customs clearance points is intended to distort the comparison between import prices and those of European Union products.

(see paras 58, 63, 67-68)

4.      A mere reference to the reduction in the volume of sales of an undertaking subject to Regulation No 1420/2007 imposing a definitive anti-dumping duty on imports of silico‑manganese originating in the People’s Republic of China and Kazakhstan and terminating the proceeding on imports of silico-manganese originating in Ukraine cannot suffice as evidence of the causal link required by the case‑law for the European Union to incur non-contractual liability, as a result of large variations in the volume of sales from one year to the next, irrespective of the adoption of that regulation.

(see paras 76-77)

5.      In so far as concerns the non-contractual liability of the European Union, the injury must result directly from the alleged illegality and not from the applicant’s choice as to how to react to the allegedly unlawful act. Thus, the mere fact that the unlawful conduct constituted a necessary condition for the damage to arise, in the sense that the damage would not have arisen in the absence of such conduct, is not sufficient to establish a causal link.

Therefore, expenses incurred as a result of a company’s participation in anti-dumping proceedings cannot be regarded as injury resulting from the adoption of an unlawful regulation, since exporting producers or any interested parties are not required to participate in anti‑dumping proceedings and they are free to assess whether to participate and why they should do so, as well as the degree of their involvement and expenditure for that purpose. Moreover, expenses incurred which correspond to the work carried out by the staff of such an exporting producer cannot be regarded as having a direct link to the investigation since staff members would have to receive their salaries irrespective of whether anti-dumping proceedings were ongoing.

(see paras 80-82)

JUDGMENT OF THE GENERAL COURT (Third Chamber)

30 November 2011 (*)

(Dumping – Imports of silico-manganese originating in China and Kazakhstan – Action for annulment – Export price – Comparison between export price and normal value – Calculation of the undercutting margin – Non-contractual liability)

In Case T‑107/08,

Transnational Company ‘Kazchrome’ AO, established in Aktobe (Kazakhstan),

ENRC Marketing AG, established in Kloten (Switzerland),

represented initially by L. Ruessmann and A. Willems, and subsequently by A. Willems and S. De Knop, lawyers,

applicants,

v

Council of the European Union, represented initially by J.-P. Hix, acting as Agent, assisted by G. Berrisch and G. Wolf, lawyers, and subsequently by J.‑P. Hix and B. Driessen, acting as Agents, assisted by G. Berrisch, lawyer,

and

European Commission, represented by H. van Vliet and K. Talabér‑Ritz, acting as Agents,

defendants,

supported by

Euroalliages, established in Brussels (Belgium), represented by J. Bourgeois, Y. van Gerven and N. McNelis, lawyers,

intervener,

APPLICATION, first, for annulment of Council Regulation (EC) No 1420/2007 of 4 December 2007 imposing a definitive anti-dumping duty on imports of silico‑manganese originating in the People’s Republic of China and Kazakhstan and terminating the proceeding on imports of silico-manganese originating in Ukraine (OJ 2007 L 317, p. 5), in so far as it concerns imports of silico-manganese produced by Transnational Company ‘Kazchrome’ AO, and, second, for damages,

THE GENERAL COURT (Third Chamber),

composed of O. Czúcz (Rapporteur), President, I. Labucka and D. Gratsias, Judges,

Registrar: N. Rosner, Administrator,

having regard to the written procedure and further to the hearing on 18 May 2011,

gives the following

Judgment

 Background to the dispute

1        On 24 July 2006 Euroalliages submitted a complaint to the Commission of the European Communities (now the European Commission) against imports of silico-manganese (‘SiMn’) originating in the People’s Republic of China, Kazakhstan and Ukraine.

2        On 6 September 2006 the Commission published a notice of initiation of an anti‑dumping proceeding with regard to imports of SiMn originating in the People’s Republic of China, Kazakhstan and Ukraine (OJ 2006 C 214, p. 14).

3        The applicants, Transnational Company ‘Kazchrome’ AO (‘Kazchrome’) and ENRC Marketing AG (‘ENRC’) – respectively a company incorporated under the laws of Kazakhstan engaged in the manufacture of, in particular, ferro-silico-manganese and a company incorporated under the laws of Switzerland involved in the marketing and sales of that product, both belonging to the group controlled by Eurasian Natural Resources Corporation plc –, criticised, by letter of 14 September 2006, the initiation of the investigation on the ground, in particular, that in their view the complaint did not contain sufficient evidence of the dumping of SiMn originating in Kazakhstan or of the material injury resulting for the Community industry.

4        On 25 July 2007 the Commission communicated its provisional findings to the applicants. It gave interested parties until 8 August 2007 to submit comments on that document. The applicants submitted their comments on 14 August 2007.

5        On 5 October 2007 the Commission drew up the final information document. It gave interested parties until 15 October 2007 to submit their comments on that document. The applicants submitted their comments on 15 October 2007.

6        By letter of 31 October 2007 the Commission sent the revised final information document to the applicants. The applicants and other interested parties were given until 12 noon on 12 November 2007 to submit their comments. The applicants submitted their initial observations on 7 November 2007. On 12 November 2007 the applicants submitted their additional comments on the revised final information document.

7        On 4 December 2007 the Council of the European Union adopted Regulation (EC) No 1420/2007 imposing a definitive anti-dumping duty on imports of [SiMn] originating in the People’s Republic of China and Kazakhstan and terminating the proceeding on imports of [SiMn] originating in Ukraine (OJ 2007 L 317, p. 5) (‘the contested regulation’).

8        Article 1(1) of the contested regulation states:

‘A definitive anti-dumping duty is hereby imposed on imports of [SiMn] (including ferro-silico-manganese) falling within CN codes 7202 30 00 and ex 8111 00 11 (TARIC code 8111 00 11 10), originating in the People’s Republic of China and Kazakhstan.’

9        Under Article 1(2) of the contested regulation, the rate of anti-dumping duty applicable to the net, free-at-Community-frontier price, before duty, of imports originating in Kazakhstan was to be 6.5%.

10      By Commission Decision 2007/789/EC of 4 December 2007 suspending the definitive anti-dumping duty imposed by [the contested regulation] on imports of [SiMn] originating in the People’s Republic of China and Kazakhstan (OJ 2007 L 317, p. 79), the anti-dumping duty was suspended for a period of nine months.

11      By letter of 5 December 2007, the Commission responded to the applicants’ submissions made on 7 and 12 November 2007.

12      The suspension put in place by Decision 2007/789 was extended to 6 September 2009 by Council Regulation (EC) No 865/2008 of 27 August 2008 extending the suspension of the definitive anti-dumping duty imposed by [the contested regulation] on imports of [SiMn] originating in the People’s Republic of China and Kazakhstan (OJ 2008 L 237, p. 1).

 Procedure and forms of order sought by the parties

13      By application lodged at the Registry of the General Court on 29 February 2008, the applicants brought the present action.

14      By document lodged at the Court Registry on 23 June 2008, Euroalliages sought leave to intervene in the present proceedings in support of the forms of order sought by the Council and the Commission.

15      By order of 19 January 2009, the President of the Fourth Chamber of the Court granted leave to intervene with respect to the application for annulment and refused leave to intervene with respect to the application for damages.

16      Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Third Chamber, to which the present case was accordingly allocated.

17      Acting upon a report of the Judge-Rapporteur, the Court (Third Chamber) decided to open the oral procedure. The parties presented oral argument and replied to the questions put by the Court at the hearing on 18 May 2011.

18      The applicants claim, in substance, that the Court should:

–        annul the contested regulation, in so far as it imposes an anti-dumping duty on imports of SiMn produced and/or sold by them;

–        order the Council and the Commission jointly and severally to pay them damages, plus interest, for the harm resulting, in particular, from the initiation of the investigation and the adoption of the contested regulation;

–        order the Council and Commission to pay the costs.

19      The Council contends, in substance, that the Court should:

–        dismiss the action;

–        order the applicants to pay the costs.

20      The Commission contends, in substance, that the Court should:

–        dismiss both the application for annulment and the application for damages as inadmissible;

–        in the alternative, dismiss both claims as unfounded;

–        order the applicants to pay the costs.

21      Euroalliages claims, in substance, that the Court should:

–        dismiss the application for annulment;

–        order the applicants to pay the costs.

22      At the hearing, in response to the questions put by the Court, the applicants stated, first, that their application for annulment sought the annulment of the contested regulation only in so far as it concerned the imports of SiMn produced by Kazchrome and, second, that the application for damages was brought solely against the Council.

23      In addition, also in response to a question put by the Court, the applicants stated that their application for confidential treatment vis-à-vis Euroalliages was to be understood, so far as concerns the application for damages, as covering the factual basis of that application and not the legal arguments.

 Law

 The application for annulment

24      The Commission claims that the application for annulment is inadmissible in so far as it is directed against it, since the contested regulation was adopted by the Council.

25      The applicants have not raised any arguments in that regard.

26      The Court finds that the application seeking the annulment of the contested regulation is inadmissible in so far as it concerns the Commission, since that regulation was adopted solely by the Council. In accordance with the case‑law, the Commission’s role in anti‑dumping proceedings forms an integral part of the Council’s decision-making process. The Commission is responsible for carrying out 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 such as the contested regulation. However, the power of decision belongs to the Council, which is not obliged to take any decision at all if it disagrees with the Commission or may, if it wishes, adopt a decision on the basis of the latter’s proposals (see the order in Case 150/87 Nashua and Others v Council and Commission [1987] ECR 4421, paragraphs 6 and 7 and the case‑law cited).

27      In support of their application, the applicants raise 12 pleas or groups of pleas.

28      It is appropriate to examine, first of all, the fourth group of pleas, concerning the comparison between normal value and export price, as well as the fifth group of pleas, concerning the calculation of price undercutting.

 The fourth group of pleas, concerning the comparison between export price and normal value

29      The applicants submit, in particular, that the Council failed to comply with the duty to state reasons and infringed Article 2(10)(i) – now Article 2(10)(i) of Regulation No 1225/2009 – of Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1), as amended (‘the basic regulation’) (replaced by Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ 2009 L 343, p. 51, corrigendum OJ 2010 L 7, p. 22)) by making a downward adjustment of the export price of Kazchrome by reference to ENRC’s alleged commissions on the ground that ENRC had functions similar to those of an agent working on a commission basis.

30      The Council submits that the grounds provided in the contested regulation were sufficient, in particular in the light of the facts and the exchanges which had taken place between the Commission and the applicants during the anti‑dumping procedure, and that the applicants fail to show how the Council committed a manifest error of assessment by making the contested adjustment, and thus how it infringed Article 2(10)(i) of the basic regulation.

31      In that regard, it must be borne in mind that, according to settled case‑law, the statement of reasons required by Article 253 EC must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether it meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see Case C‑76/01 P Eurocoton and Others v Council [2003] ECR I‑10091, paragraph 88 and the case-law cited).

32      Article 2(10) of the basic regulation provides:

‘A fair comparison shall be made between the export price and the normal value. This comparison shall be made at the same level of trade and in respect of sales made at as nearly as possible the same time and with due account taken of other differences which affect price comparability … When the specified conditions are met, the factors for which adjustment can be made are listed as follows:

…

(i)      Commissions

An adjustment shall be made for differences in commissions paid in respect of the sales under consideration.

The term “commissions” shall be understood to include the mark-up received by a trader of the product or the like product if the functions of such a trader are similar to those of an agent working on a commission basis.

…’

33      In the present case, it is apparent from recital 67 in the preamble to the contested regulation that, since Kazchrome exported the product concerned to the Community via ENRC, a related trading company established in a non-member country, the export price was established on the basis of the resale prices of ENRC to the first independent customer in the Community.

34      In recitals 73 to 75 in the preamble to the contested regulation, the Council expressed the view that, in order to make a fair comparison between the normal value and the export price, adjustments needed to be made to the export price as established in recital 67, in particular to take account of commissions. In that regard, it affirmed that, in Kazchrome’s sales flow to the Community, ENRC had functions similar to those of an agent working on a commission basis and that ENRC was not a party in the domestic sales channel of Kazchrome.

35      In response to a question put by the Court at the hearing, the Council confirmed that, as seems to be apparent from recital 74 in the preamble to the contested regulation, the reference made therein to the fact that ENRC was not a party in the domestic sales channel of Kazchrome was intended merely to serve as a reason for its finding that there was a difference between domestic sales and export sales justifying the adjustment, and not to establish the classification of the relations between the applicants as being similar to those between a principal and an agent and, consequently, to justify the inclusion of ‘commissions’ in the export price. The reference thus concerned the impact on price comparability of the factor justifying the adjustment made and not the existence of the adjustment per se.

36      The Court notes, therefore, that the conclusion reached in the contested regulation that ENRC had functions similar to those of an agent working on a commission basis is based on two factors set out in recital 74 in the preamble to the contested regulation, namely, (i) the fact that the applicants are separate legal entities; and (ii) the fact that they were acting on the basis of a buyer-seller relationship.

37      Moreover, it transpires from the contested regulation and from the information provided by the Council before the Court that, by those grounds, the Council sought to show that the applicants maintained a commercial relationship established under normal conditions of competition and that, accordingly, ENRC could not be regarded as acting as an internal sales department.

38      The Court notes, however, that, by limiting itself to mentioning those two factors, the wording of the contested regulation does not set out the factual and legal considerations on which the Council’s conclusion is based.

39      First, although it is apparent that the applicants are separate legal entities and thus that ENRC is not an internal sales department, that consideration is not sufficient to support the conclusion that ENRC did not function as an internal sales department, but as an agent working on a commission basis.

40      Second, it is not clear from the mere claim that the applicants ‘were acting on the basis of a buyer-seller relationship’ why the Council considered, in spite of the evidence furnished by the applicants, that the commercial relationship between them was established in normal conditions of competition and that, consequently, ENRC did not function as an internal sales department but as an agent working on a commission basis. The Court notes that, throughout the investigation, the applicants furnished evidence intended to show that ENRC did not function as a related sales arm but as an internal sales department for Kazchrome’s factories.

41      Moreover, although the Council was right to submit that the issue whether the grounds for the contested regulation satisfied the requirements of Article 253 EC must be assessed not only in the light of its wording (see paragraph 31 above), but also in the light of the exchanges which took place between the Commission and the applicants during the anti‑dumping procedure, that consideration does not allow the conclusion to be drawn that the duty to state reasons was complied with in the present case.

42      The Court notes that the Council did not provide, either in its written pleadings or at the hearing, more detailed information on the documents in the file relating to the relevant exchanges. Moreover, more detailed information as to why the Commission proposed that the Council should take the view that the applicants were acting on the basis of a buyer-seller relationship was not provided in either the final information document of 5 October 2007 (recital 72) or the revised final information document of 31 October 2007 (recital 74). Those two documents are drafted identically to the contested regulation and do not provide further information. Nor is additional information provided in the documents specifically relating to the applicants and sent at the same time as the two documents referred to above, or subsequently, such as the Commission’s letter of 5 December 2007 sent in response to the applicants’ reactions to the revised final information document.

43      The Court thus finds that the Council’s assessment that, in Kazchrome’s sales flow to the Community, ENRC had functions similar to those of an agent working on a commission basis is vitiated by a lack of reasoning.

44      The other arguments raised by the Council in the course of the proceedings are not such as to alter that assessment.

45      The Council submits that the validity of its assessment results, first, from an alleged high degree of formality of the contract of sale between the applicants [confidential] (1) and, second, from certain items of evidence furnished by them in their action to show that ENRC did not function as an agent working on a commission basis. It thus argues that the functions of ENRC could not be perceived as being complementary to those of Kazchrome [confidential] and that the structure of the group to which the applicants belong confirms that the relationship between them could be regarded only as being equivalent to a relationship between a principal and agent working on a commission basis. According to the Council, the fact that the contract governing the relations between the applicants is, in its opinion, particularly formal was manifest and did not need to be mentioned explicitly.

46      However, even if it were accepted that the alleged high degree of formality of the contract was manifest, the Court notes that, during the anti‑dumping procedure, the applicants produced a wealth of information concerning the relationship between them and the functions of ENRC, which, in their view, demonstrates that ENRC had some of the functions of a producer’s internal sales department. The Court finds that, on reading the contested regulation and the documents in the file, it is not possible for the applicants – or for the Court – to understand that the assessment that they had a buyer-seller relationship established under normal conditions of competition was based on the alleged formality of the contract between them or, a fortiori, the reasons why that formality justified, in itself, the assessment in dispute, notwithstanding the other circumstances which had been raised. The Court thus points out, in particular, that, in response to a reference made to the contract by the Council in its defence, the applicants submit, in their reply, that that possible formality is a result of external constraints which are unconnected to the nature of their relationship.

47      Accordingly, the Council’s reference to the formality of the contract between the applicants must be regarded as a new ground raised during the judicial stage of the proceedings which is not capable of remedying the lack of reasoning established above.

48      The same is true of the Council’s reference to other items of evidence referred to by the applicants in their action, which, in the Council’s view, confirm the validity of its assessment (see paragraph 45 above), but which were not mentioned in the contested regulation or in the Commission’s pleadings during the administrative procedure. Moreover, the Council does not furnish any evidence which could lead to the conclusion that the applicants must necessarily have been able to understand that it was that evidence which led the Council to adopt its position.

49      The complaint alleging a lack of reasoning, raised by the applicants in the context of their fourth group of pleas, must therefore be upheld.

 The fifth group of pleas, concerning the undercutting calculation

50      It was concluded in the contested regulation that, as regards the product originating in Kazakhstan, on a weighted average basis, overall undercutting amounted to 4.5 %, that is to say that the prices at which the product was sold in the Community were 4.5 % lower than those of the Community industry (recital 104).

51      According to the contested regulation, the undercutting margin was calculated, for all countries, by comparing ‘ex-works’ prices of the Community industry with prices of the imported goods as they enter the physical territory of the Community, duly adjusted to take account of the unloading and customs clearance costs (recital 105).

52      Since some of the applicants’ products were transported by train from Kazakhstan to the ports of Klaipėda (Lithuania) and Kaliningrad (Russia), they crossed Lithuania under the ‘external transit’ customs regime, before being shipped and transported through international waters to the port of destination, generally Rotterdam (the Netherlands). Therefore, in accordance with the method set out in paragraph 51 above, the prices of the applicants’ products, for the purposes of the comparison with Community industry prices, were calculated by deducting from the ‘customs cleared’ export price the costs corresponding to the transport between the point at the border between Belarus and Lithuania at which the goods entered Lithuania and the port of destination.

53      The applicants claim that, in calculating the undercutting margin by reference to the price of their goods when they first enter Community (land) territory, even though they are cleared for customs elsewhere, the Council infringed, inter alia, Article 3(2) of the basic regulation (now Article 3(2) of Regulation No 1225/2009) and committed a manifest error of assessment. They point out that Article 3(2) of the basic regulation requires an objective examination of the effect of imports on prices on the Community market and submit that the Council infringed that provision as the adjustment made was manifestly unfair and discriminatory.

54      The Council submits that the basic regulation does not stipulate in detail how the undercutting analysis has to be undertaken and asserts that it has, consequently, a broad discretion in that regard. It considers that the method used to calculate the import prices in order to calculate undercutting is not manifestly unfair or discriminatory and is thus in line with Article 3(2) of the basic regulation.

55      The Court notes that it transpires from the arguments of the parties that the most accurate way of calculating price undercutting would be to compare import prices with the prices of goods of the Community industry by including all the costs incurred up until the customers’ premises. Since this approach is not practical because of the large number of calculations which it would involve, the parties agree that a fair comparison can be made by comparing the ‘ex-works’ price, excluding transport costs, of goods of the Community industry with import prices, including part of the transport costs, to take account of the fact that imports do not compete with Community goods at their ‘ex-works’ price and that they have to be transported over longer distances before arriving at the premises of Community customers.

56      The parties disagree, however, with regard to whether the reference point, from which transport costs of imports do not have to be included in the prices of imports, in order to ensure that the comparison with goods of the Community industry is fair, is the point of customs clearance, as submitted by the applicants, or the place at which the imports enter Community (land) territory for the first time, as argued by the Council.

57      The Court notes that, for the purposes of this case, it is not necessary to comment on the reference point which would be most appropriate in general terms, and it is sufficient to examine whether, in the circumstances in this case, the choice made by the Council was not manifestly inappropriate.

58      The Court notes, at the outset, that Article 1(1) of the basic regulation (now Article 1(1) of Regulation No 1225/2009) provides that ‘an anti-dumping duty may be applied to any dumped product whose release for free circulation in the Community causes injury’. That provision, which forms part of Article 1, entitled ‘Principles’, lays down the essential rule for imposing anti‑dumping duties, under which it is not sufficient that the imported goods are dumped, as it is also necessary that their release for free circulation should cause injury. It is precisely for determining whether there has been injury that the basic regulation provides, in Article 3(2) and (3) (now Article 3(2) ad (3) of Regulation No 1225/2009), that an objective examination of the effect that imports have on the prices of similar goods on the Community market must be made and that, to that end, consideration is to be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product, or whether the effect of such imports is otherwise to depress prices to a significant degree or to prevent price increases, which would otherwise have occurred, to a significant degree.

59      Consequently, it is by reference, in particular, to the possibility of injury being caused by dumped imports that it is necessary to examine whether the Council committed a manifest error of assessment in determining the reference point to be used, in the present case, to calculate the prices of the applicants’ goods which were to be compared with prices in the Community industry. Moreover, the Council itself recognises the relationship which exists between undercutting and causation in stating that ‘the undercutting calculation is of particular importance’ when examining import prices in order to assess the causal link between dumped imports and the injury suffered and that the present group of pleas ‘concerns a technical aspect ... which is relevant to both the injury and causation determinations’.

60      The applicants submit that the import prices should have been calculated on the basis of the ‘customs cleared’ export prices and, therefore, at the port of customs clearance, not at the point of physical entry into Community territory. They submit, inter alia, that opting for the latter point of entry is unfair in that it implies that goods for which the customer pays an identical price and which are delivered to him at the same place are deemed to harm the Community industry or not depending on whether the route taken to transport them to the port of customs clearance includes, or not, an initial crossing through Community territory, even if under the ‘external transit’ customs regime and even though the goods are not imported.

61      The Council contends that the imports arrive on the Community market when they enter Community territory for the first time, whereas goods of the Community industry do so when they leave the factory, and that it is, therefore, at those two places that it can be assumed that the goods enter into direct competition with one another, thus allowing for a fair comparison to be made.

62      The Court notes that, as submitted by the applicants, the prices used by the Council do not reflect the prices negotiated with customers in the Community, that is to say, generally speaking, cif (cost, insurance and freight) prices at the port of customs clearance, and represent only a value constructed by the Council. Although it is true that all anti‑dumping proceedings involve complicated calculations and, frequently, the taking into account of constructed values, the fact remains that, since the value used by the Council to examine undercutting was calculated during the investigation with the information provided by the applicants, it could not have been taken into account by customers when deciding whether to buy from the Community industry or from the applicants. That value could not even have been estimated by those customers, since there is nothing to suggest that they were aware of the exact route taken by the goods before arriving at the point of customs clearance and, consequently, that they knew that part of the transportation of the goods had already taken place in Community territory. Accordingly, the Council admitted, in response to a question put by the Court at the hearing, that it did not know whether customers knew the route which the goods had taken, but that, in any event, that route was of no interest to them, since they are interested only in the final price of the goods when they enter their factories.

63      Consequently, it is the prices negotiated between the applicants and the customers and not the prices at an intermediate stage of transport, even if in Community territory, which could have led customers to opt for the applicants’ goods instead of those of the Community industry. Even if, as the Council submits, what interests customers is the final price of the product when it arrives in their factories, the fact none the less remains that, as pointed out by the applicants in response to a question put by the Court at the hearing, the customers are well aware of transport costs from the port of customs clearance to their factories and could, therefore, easily calculate the final price from the cif price negotiated with them at the port of customs clearance.

64      A further consequence, as stated by the applicants, is that, if they were sold to customers in the same place at an identical or very similar price, all of the goods which they or other producers from other exporting countries have sold to customers in the Community would have caused the same injury, irrespective of the route taken to transport them.

65      Moreover, the Court notes that, in the case of the goods of the applicants or other exporters which entered Community territory at the port of customs clearance, the Council took the view that the transport costs between the ports and the customers’ premises were equivalent to those of the transport between the factory of the Community producer and the customers’ premises. However, the Council did not establish that the additional deduction of a significant part of the transport costs incurred prior to arrival at the port of customs clearance was indispensable in order to ensure a fair comparison, namely, not to include in the price of imports costs not included in the Community industry price, where the goods have crossed Lithuania, in external transit, for several hundred kilometres before being shipped and transported in international waters.

66      That consideration may be illustrated by reference to the example which the Council itself provides in its rejoinder. The Council asks why the price of part of the applicants’ goods should not be calculated in relation to their crossing of the border between Lithuania and Belarus, even though the goods of the Polish producers also have to be transported from their factories in Poland. However, given that the costs from the factory in Poland were considered to be equivalent to the costs from the port in Rotterdam for imports which arrived directly and which were customs cleared at that point, it has not in any way been established that the deduction in the present case of significant costs related to transport between the Lithuania-Belarus border and the port of Rotterdam were indispensable to ensure a fair comparison between the prices of the applicants’ goods and the prices of those of a Polish producer.

67      In those circumstances, the Court takes the view that, in the present case, the Council committed a manifest error of assessment in considering that the objective comparison between the import prices and those of the Community industry, in this case, required that the reference point for determining the import prices should be the border between Belarus and Lithuania for the applicants’ goods which had been transported via the ports of Klaipėda and Kaliningrad.

68      Finally, with regard to the Council’s argument that, if one were to take the view that the reference point for determining the import prices was the port of customs clearance, this would distort the system by encouraging exporters to come to an agreement with their customers to effect customs clearance as close as possible to their factories, the Court points out that the conclusion resulting from the foregoing examination concerns only the present case and that the Commission and Council must take account, within the limits of their discretion, of all the relevant factors in each case, including evidence which suggests that, unlike in the present case, the choice of means of transport and customs clearance points is intended to distort the comparison between import prices and those of Community products.

69      The complaint alleging a manifest error of assessment, raised by the applicants in the context of their fifth group of pleas, must therefore be upheld.

70      The Court points out that, without the adjustment applied to Kazchrome’s export price, as established in recital 67 in the preamble to the contested regulation, the applicants’ goods would not have been regarded as being dumped or, at the very least, the dumping margin established would have been lower than that calculated in the contested regulation, which was used to determine the anti‑dumping duty imposed (recital 170). Moreover, it is apparent from the file that the calculation of the prices of the applicants’ exports to the Community when they cross the border between Belarus and Lithuania had the effect of undercutting prices as compared with those of the Community industry, which forms the basis for the conclusion that the importation of the applicants’ goods was at the origin of the injury suffered by the Community industry (recital 145 in the preamble to the contested regulation). Consequently, the two complaints which the Court has upheld concern assessments which constitute the basis necessary for the imposition of an anti‑dumping duty on imports of SiMn produced by Kazchrome.

71      In the light of the foregoing, the contested regulation must be annulled in so far as it concerns the imports of SiMn produced by Kazchrome, and there is no need to give judgment on the other pleas and arguments raised by the applicants.

 The application for damages

72      By this application, the applicants are seeking damages in respect of three types of injury, namely, a loss of profits, the procedural expenses which they incurred, and losses incurred in the share flotation of their parent company on 7 December 2007.

73      According to settled case-law, in order for the Community to incur non-contractual liability on account of the unlawful conduct of its institutions, a number of requirements must be satisfied, namely that the alleged conduct of the institutions is unlawful, that the damage is real and that there is a causal link between the conduct alleged and the damage relied upon (Case 26/81 Oleifici Mediterranei v EEC [1982] ECR 3057, paragraph 16, and Case T‑199/96 Bergaderm and Goupil v Commission [1998] ECR II‑2805, paragraph 48). If any one of the conditions governing the Community’s non‑contractual liability is not satisfied, the action must be dismissed in its entirety without its being necessary to examine the other conditions (Case T‑170/00 Förde-Reederei v Council and Commission [2002] ECR II‑515, paragraph 37 and the case‑law cited).

74      In the present case, it is appropriate to begin the examination by addressing the condition that there must be a causal link between the alleged illegalities and the damage relied on.

75      So far as concerns, first, the causal link between the loss of profits and the alleged illegalities, the applicants submit that, if the Commission had not acted unlawfully by initiating the procedure against Kazakhstan, conducting that procedure and proposing measures, and if the Council had not unlawfully adopted the contested regulation, they would have made significantly higher profits than they in fact made on the Community market. In that regard, they submit that ENRC’s sales to the Community show, from the initiation of the anti‑dumping procedure and until the bringing of the action, a noticeable reduction in the total value [confidential].

76      The Court notes that a mere reference to the reduction in the volume of sales cannot suffice as evidence of the causal link required by the case‑law for the Community to incur non-contractual liability. It is apparent from the file that the volumes of imports and sales in the Community industry vary significantly from one year to the next. Thus, in particular, while the applicants claim that the difference between the volume of sales in 2006 and 2007 is sufficient to demonstrate the causal link, it is clear from their arguments in the context of their application for damages, in particular from the plea concerning the cumulation of their imports and those originating in the People’s Republic of China, that their exports to the Community in 2004 [confidential] were lower than in 2007 [confidential], even though no investigation relating to them was in progress at that time. Similarly, a comparison between the export figures for 2006 [confidential] and 2007 [confidential] and the export figures for 2002 and 2003 [confidential] and those for 2004 [confidential] shows that significant reductions in imports originating in Kazakhstan did not result solely from the initiation of anti‑dumping proceedings or the imposition of anti‑dumping duties.

77      The comparison of the sales volumes set out in the contested regulation for other countries confirms how variable such volumes are from one year to the next on the market concerned. Thus, the table in recital 137 in the preamble to the contested regulation, concerning Community imports originating in South Africa, shows an increase of 70% in 2003 (81 330 tonnes) compared with 2002 (47 808 tonnes), followed by a decrease of 27.76% in 2004 (58 753 tonnes) compared with 2003. The table in recital 138 in the preamble to the contested regulation, concerning Community imports from non-member countries other than Norway, India, South Africa and the countries concerned by the investigation, shows an increase of 28% in 2003 (108 539 tonnes) compared with 2002 (84 904 tonnes), followed by a new increase of 15.05% in 2004 (124 872 tonnes) compared with 2003, whereas the comparison of the figures for 2004 and 2005 (63 178 tonnes) shows a decrease of 49.41%.

78      As regards, second, the causal link between the expenses incurred for the purpose of their participation in the administrative procedure and the alleged illegalities, the applicants submit that, if the Commission had not, wrongly, included Kazakhstan in the investigation, they would not have incurred those expenses and that if, once the procedure had been initiated, the Commission had not seriously and manifestly failed to have regard to its powers of discretion and/or misused its powers, their cooperation and the related expenses would have enabled them to avoid having an anti‑dumping duty imposed on them.

79      First, the Court notes that, as submitted by the Council, the expenses incurred for the purpose of participation in the administrative procedure could, at most, have resulted only from the initiation of the investigation and the conduct thereof, and not from the adoption of the contested regulation itself.

80      Second, in accordance with the case‑law, the injury must result directly from the alleged illegality and not from the applicant’s choice as to how to react to the allegedly unlawful act. The view has thus been taken that the mere fact that the unlawful conduct constituted a necessary condition (a condition sine qua non) for the damage to arise, in the sense that the damage would not have arisen in the absence of such conduct, is not sufficient to establish a causal link (see, to that effect, the order of 12 December 2007 in Case T‑113/04 Atlantic Container Line and Others v Commission, not published in the ECR, paragraphs 31 to 40).

81      Exporting producers (or any interested parties) are not required to participate in anti‑dumping proceedings (order in Case T‑134/95 Dysan Magnetics and Review Magnetics v Commission [1996] ECR II‑181, paragraph 27) and they are free to assess whether to participate and why they should do so, as well as the degree of their involvement and expenditure for that purpose. Moreover, they are free, in particular, to choose whether to participate solely by requesting their staff to compile all relevant data and to be represented by a member of their legal service, or to call on the services of a law firm.

82      In any event, as submitted by the Council, expenses incurred which correspond to the work carried out by the applicants’ staff cannot be regarded as having a direct link to the investigation since staff members would have to receive their salaries irrespective of whether anti‑dumping proceedings were ongoing. In addition, the applicants do not even submit that the persons who participated in the proceedings were hired to follow those proceedings or that they were dismissed as a result of a lack of additional work resulting from the monitoring of the investigation.

83      So far as legal fees are concerned, suffice it to note that the applicants merely refer to such expenses without even attempting to show that they were indispensable and did not result from their choice as to how to react to the initiation of the investigation.

84      Accordingly, the Court finds that the applicants have failed to demonstrate a causal link between the alleged illegalities and the first two types of injury which they claim. The application for damages must, therefore, be dismissed so far as concerns those alleged injuries, without there being a need to examine whether there was a sufficiently serious infringement or whether the injuries claimed were actually incurred.

85      As regards, third, the injury resulting from the losses incurred as a result of the drop in the price of shares in the applicants’ parent company on 7 December 2007, the Court finds that no reference whatsoever was made to that injury in their arguments on the causal link. Pursuant to the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union, applicable to proceedings before the General Court by virtue of the first paragraph of Article 53 of that Statute, and pursuant to Article 44(1)(c) of the Rules of Procedure of the General Court, an application must, inter alia, state the subject-matter of the dispute and contain a brief statement of the pleas in law on which the application is based. That information must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary without any further information (orders in Case T‑85/92 De Hoe v Commission [1993] ECR II‑523, paragraph 20, and in Case T-154/98 Asia Motor France and Others v Commission [1999] ECR II-1703, paragraph 49; judgment in Case T‑277/97 Ismeri Europa v Court of Auditors [1999] ECR II‑1825, paragraph 29). Therefore, the application for damages must be dismissed as being inadmissible in so far as the third type of injury claimed is concerned.

86      In the light of the foregoing, the application for damages must be dismissed in its entirety.

 The application for measures of organisation of procedure and for measures of inquiry

87      The applicants have requested the Court to ask the Council and the Commission to produce an entire series of documents relating to certain claims which they raise and to order the appointment of an independent economic expert to report on several aspects of the dispute.

88      In the light of the foregoing, there is no need to request production of the documents referred to by the applicants or to appoint an independent economic expert.

 Costs

89      Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicants have been unsuccessful in so far as their action was brought against the Commission, they must be ordered to pay the latter’s costs.

90      In addition, under Article 87(3) of the Rules of Procedure, the Court may, where each party succeeds on some and fails on other grounds, order costs to be shared or order each party to bear its own costs. In the circumstances of the present case, it is appropriate to order the applicants to bear half of their own costs and to order the Council to bear the other half of the applicants’ costs, in addition to its own costs.

91      In accordance with the third subparagraph of Article 87(4) of the Rules of Procedure, the Court may order an intervener other than those mentioned in the first and second subparagraphs to bear its own costs. In the circumstances of the present case, it is appropriate to order Euroalliages to bear its own costs.

On those grounds,

THE GENERAL COURT (Third Chamber)

hereby:

1.      Annuls Article 1 of Council Regulation (EC) No 1420/2007 of 4 December 2007 imposing a definitive anti-dumping duty on imports of silico-manganese originating in the People’s Republic of China and Kazakhstan and terminating the proceeding on imports of silico-manganese originating in Ukraine in so far as that article applies to imports of silico-manganese produced by Transnational Company ‘Kazchrome’ AO;

2.      Dismisses the action as to the remainder;

3.      Orders Transnational Company ‘Kazchrome’ and ENRC Marketing AG to bear half of their own costs and to bear the costs of the European Commission;

4.      Orders the Council of the European Union to bear half of the costs of Transnational Company ‘Kazchrome’ and ENRC Marketing, in addition to its own costs;

5.      Orders Euroalliages to bear its own costs.

Czúcz

Labucka

Gratsias

Delivered in open court in Luxembourg on 30 November 2011.

[Signatures]

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*Language of the case: English.

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1 Confidential information removed.