(1)

On 17 July 2018, the Commission (‘the Commission’) adopted Implementing Regulation (EU) 2018/1012 (3) imposing a provisional anti-dumping duty on imports of electric bicycles originating in the People’s Republic of China (‘the provisional Regulation’).

(2)

On 17 January 2019, the Commission adopted Implementing Regulation (EU) 2019/73 (4) and Implementing Regulation (EU) 2019/72 (5) (the regulations at issue).

(3)

Giant Electric Vehicle Kunshan Co. Ltd (Giant) brought annulment actions before the General Court challenging the legality of the regulations at issue. Giant challenged the adjustment made on its export price for sales via related traders established in the Union using by analogy Article 2(9) of the basic anti-dumping Regulation in the calculation of price undercutting. In particular, Giant claimed that the adjustment – the deduction of the related importer’s SG&A and a notional profit – changed the level of trade of its export sales, which resulted in the comparison of its export price at the level of an importer with the Union prices at retailers’ level. This adjusted export price was compared to the Union industry’s sale prices to their first independent customers through sales via related selling entities in the EU for the purpose of the undercutting and underselling calculations. Giant also challenged the treatment of Original Equipment Manufacturer (OEM) sales for the purpose of the undercutting calculation. In Giant’s view, the Union producers’ sales of own-brand products to retailers should have been adjusted to bring them to the level of a sale to an unrelated OEM customer in the Union before they were compared with its OEM sales.

(4)

On 27 April 2022, the General Court issued its judgements in cases T-242/19 and T-243/19, annulling both Implementing Regulation (EU) 2019/73 (anti-dumping) and Implementing Regulation (EU) 2019/72 (anti-subsidy) as far as Giant is concerned.

(5)

The General Court found that the Commission was not obliged to determine price undercutting margins and that it was entitled to base its injury analysis and, therefore, the causal link, on other price phenomena listed, respectively, in Article 3(3) of the basic anti-dumping Regulation, and in Article 8(2) of the basic anti-subsidy Regulation such as significant depression of Union industry prices or prevention of price increases to a notable extent. However, in both cases, since the Commission relied on the calculation of price undercutting in the context of Article 3(3) and Article 8(2), the General Court found that by taking into account, in relation to the prices of Union producers, certain elements which it had nevertheless deducted from the applicant’s prices (or were not present as regards OEM sales since the downstream marketing of the product concerned (6) was carried out by the independent buyer itself), the Commission did not make a fair comparison when calculating the applicant’s price undercutting margin. The General Court noted that that methodological error found had the effect of identifying undercutting of those prices, the importance or existence of which had not been properly established.

(6)

Considering the importance the Commission had attached to the existence of price undercutting as an indicator of primary importance in its injury analysis and that it was a decisive element in the conclusion on the causal link between the dumped or subsidised imports and that injury, the General Court found that the error in the calculation of price undercutting was sufficient to invalidate the Commission’s analysis of the respective causal links, existence of which is an essential element for the imposition of measures.

(7)

Finally, the General Court noted that irrespective of the application by analogy of Article 2(9) of the basic anti-dumping Regulation for the purposes of assessing the existence of injury within the meaning of Article 3 of that Regulation, or Article 8 of the basic anti-subsidy Regulation, the unfair nature of the comparison found under the second part of that plea vitiated, in any event, the Commission’s analysis under those provisions (7) (8).

(8)

The General Court also noted that the injury elimination level was determined on the basis of a comparison involving the weighted average import price of the sampled exporting producers, duly adjusted for importation costs and customs duties, as had been established for the price undercutting calculation (9) (10). It consequently held that it cannot be ruled out that, were it not for the methodological error relating to the undercutting of the applicant’s prices, the injury margin of the Union industry would have been established at a level even lower than that established in the regulations at issue and lower still than the dumping margin or amount of countervailable subsidies established therein. In that case, in accordance with Article 9(4) of the basic anti-dumping Regulation and Article 15(1) of the basic anti-subsidy Regulation the amount of the respective duties should be reduced to a rate which would be adequate to remove the injury (11) (12).

(9)

Based on those findings, the General Court annulled both regulations at issue insofar as Giant was concerned.

(10)

The Commission analysed whether it is appropriate to make the imports of the product concerned subject to registration. In that context, the Commission took the following considerations into account.

(11)

Article 266 TFEU provides that the Institutions must take the necessary measures to comply with the judgments. In case of annulment of an act adopted by the Institutions in the context of an administrative procedure, such as anti-dumping or anti-subsidy investigations, compliance with the General Court’s judgement consists in the replacement of the annulled act by a new act, in which the illegality identified by the Court is eliminated (13).

(12)

According to the case-law of the Court of Justice, the procedure for replacing the annulled act may be resumed at the very point at which the illegality occurred (14). That implies in particular that in a situation where an act concluding an administrative procedure is annulled, that annulment does not necessarily affect the preparatory acts, such as the initiation of the anti-dumping procedure. In a situation where for instance a Regulation imposing definitive anti-dumping measures is annulled, that means that subsequent to the annulment, the anti-dumping proceeding is still open, because the act concluding the anti-dumping proceeding has disappeared from the Union legal order (15), except if the illegality occurred at the stage of initiation.

(13)

As explained in the reopening Notice (16), and since the illegality did not occur at the stage of initiation but at the stage of the investigation, the Commission decided to reopen the anti-dumping and anti-subsidy investigations insofar as they concern Giant, and resumed them at the point at which the irregularity occurred.

(14)

According to the case-law of the Court of Justice, the resumption of the administrative procedure and the eventual re-imposition of duties cannot be seen as contrary to the rule of non-retroactivity (17). The Notice of reopening informed interested parties, including importers, that any future liability, if warranted, would emanate from the findings of the re-examination.

(15)

Based on its new findings and the outcome of the reopened investigations, which is unknown at this stage, the Commission may adopt regulations revising, where warranted, the applicable duty rates. Those revised rates, if any, will take effect as from the date on which the anti-dumping and anti-subsidy Regulations at issue entered into force.

(16)

For this purpose, the Commission requested national customs authorities to await the outcome of the re-examination before deciding on any repayment claim concerning the anti-dumping and/or countervailing duties annulled by the General Court with respect to Giant. Customs authorities are thus directed to put on hold any claims for reimbursements of the annulled duties until the outcome of the re-examination is published in the Official Journal of the European Union.

(17)

Furthermore, should the reopening investigations lead to the re-imposition of measures, duties should also be collected for the period during which the reopening investigations are carried out.

(18)

In this respect, the Commission notes that registration is a tool provided in Articles 14(5) of the basic anti-dumping Regulation and Article 24(5) of the basic anti-subsidy Regulation so that measures may subsequently be applied against imports from the date of the registration. In the present case, the Commission deems it appropriate to register imports concerning Giant with a view to facilitating the collection of anti-dumping and countervailing duties once their levels are revised in line with the General Court ruling (18).

(19)

In line with the jurisprudence of the Court of Justice (19), contrary to registration taking place during the period before the adoption of provisional measures, the conditions of Article 10(4) of the basic anti-dumping Regulation and Article 16(4) of the basic anti-subsidy Regulation are not applicable to the case at hand. Indeed, the purpose of registration in the context of Court implementation is not to allow the possible retroactive collection of trade defence measures as envisaged in those provisions. The purpose is rather to safeguard the effectiveness of the measures in place, without undue interruption from the date of entry into force of the regulations at issue until the re-imposition of the corrected duties, by ensuring that the collection of the correct amount of duties is possible in the future.

(20)

In light of the above considerations, the Commission considered that there were grounds for registration pursuant to Article 14(5) of the basic anti-dumping Regulation and Article 24(5) of the basic anti-subsidy Regulation.

(21)

On the basis of the above, imports of the product concerned produced by Giant Electric Vehicle Kunshan Co. Ltd. under TARIC additional code C383 must be made subject to registration.

(22)

As indicated in the reopening Notice, the final liability for payment of anti-dumping and countervailing duties, if any, from the date of entry into force of the anti-dumping and anti-subsidy regulations at issue will emanate from the findings of the re-examination.

(23)

No duties higher than the duties established in the regulations at issue may be collected for the period between the publication of the Notice of reopening and the date of entry into force of the results of the reopening investigations.

(24)

The current anti-dumping and anti-subsidy duties applicable to Giant Electric Vehicle Kunshan Co. Ltd are 20,7 % and 3,9 % respectively,