ECJ: Anti-dumping on leather shoes from China illegal

The European Court of Justice (ECJ) ruled in its judgment of 4 February 2016 (Cases C – 659/13 and C -34/14) that the anti-dumping regulations imposing anti-dumping duties on Chinese shoes with leather uppers are partially illegal and therefore invalid. The textile companies concerned will now be reimbursed in the millions.

Anti-dumping duties on shoes with leather uppers

The companies had been upholstering shoes with leather uppers from China and Vietnam for a long time. Regulation (EU) 1472/2006 imposed an anti-dumping duty on leather uppers originating in China or Vietnam. Regulation (EU) 1294/2009 also extended this to shoes with leather uppers shipped from Macau. In the context of an expiry review, the anti-dumping duty rates were extended once again by implementing Regulation (EU) 1294/2009.

Failure to take account of the application for market economy treatment

At that time, the suppliers of the importing company applied for market economy treatment (MWB) in the procedure for imposing an anti-dumping duty. In this situation, an individual anti-dumping duty rate could have been set for these companies. Accordingly, the importer would have paid lower anti-dumping duties. However, the European Commission only carried out a sampling procedure at the time, taking into account only a few of the suppliers who had applied for market economy treatment at the time.

The European Court of Justice has now stated that companies that are prepared to cooperate with the European Commission and submit all documents for market economy treatment may not be”lumped together” with all other exporting companies without further ado. The European Court of Justice has now stated that, in principle, a random sample may be established if the number of companies subject to an anti-dumping investigation is very large. In this respect, the Commission may then limit the number of parties to a reasonable number. However, Article 17(3) of the basic anti-dumping Regulation provides that an individual dumping margin must be calculated for each exporter not included in the sample when requesting it.

As the applications of the importing company’s suppliers were not taken into account, the European Court of Justice found that they infringed this obligation. In this respect, the anti-dumping duties imposed on the cooperating suppliers from China and Vietnam are illegal. These would therefore have to be reimbursed.

The ECJ deplored the fact that in this way cooperative producers would be treated in the same way as non-cooperative producers, even though the former were in a completely different situation. This would be a violation of the principle of equal treatment, which is also enshrined in European law.

Limitation of the refund period to three years

The European Court of Justice has also clarified that the refund period for anti-dumping duties already paid and wrongly collected cannot be extended beyond the three-year period provided for in Article 236 CC. It is provided that an extension may be considered in the event of force majeure.

However, the European Court of Justice has made it clear that these rules must be interpreted narrowly. Therefore, even if a Regulation which imposes anti-dumping duties is subsequently annulled in whole or in part, it does not extend the refund period. This does not constitute an unforeseeable event or force majeure.

 

Lawyer Dr. Tristan Wegner

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