Opinion of the Advocate-General
++++
Mr President,
Members of the Court,
1 . In its application in Case C-133/87, Nashua Corporation, a company whose head office is in the United States of America, seeks the annulment of the Commission' s decision rejecting the undertaking which it had offered pursuant to Article 10 of Council Regulation ( EEC ) No 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community, ( 1 ) in the course of the anti-dumping proceeding conducted by the Commission concerning the importation of plain paper photocopiers originating in Japan .
2 . In its second application, lodged barely a fortnight later in Case C-150/87, Nashua Corporation, together with nine of its wholly owned subsidiaries - eight of which have their head offices in various Community countries - claim that the Court should annul Council Regulation ( EEC ) No 535/87 of 23 February 1987 imposing a definitive anti-dumping duty on imports of plain paper photocopiers originating in Japan ( 2 ) ( hereinafter "the contested regulation "). One of its submissions is the claim that the Commission' s rejection of the undertaking which it offered was unlawful, the subject of the application in Case C-133/87 . I propose to consider Case C-133/87 first, and then Case C-150/87 .
I - Case C-133/87
3 . By letter of 9 December 1986, Nashua Corporation offered the Commission an undertaking the essential terms of which were as follows :
"Nashua Corporation, acting for itself and its subsidiary companies within the EEC, hereby undertakes not to export to the European Community more than the following quantity of photocopying machines falling within subheading 90.10 A of the Common Customs Tariff, corresponding to Nimexe Code 90.10-22, originating in Japan :
1987 48 536 units
1988 48 536 units
1989 48 536 units
1990 48 536 units
1991 48 536 units ."
4 . The terms of the undertaking also provided that the applicant would do its utmost to prevent evasion by resales from outside the EEC and would supply regular reports and information to the Commission to ensure effective surveillance of the undertaking . It was proposed that the undertaking should take effect from 1 January 1987 .
5 . By a decision notified to the applicant on 27 January 1987, the Commission rejected the proposed undertaking . The relevant part of the Commission' s decision is quoted in the Report for the Hearing .
6 . Although the Commission had, during the written procedure, expressed the opinion that the application submitted by Nashua Corporation should probably be regarded as admissible, it contended at the hearing that the application was inadmissible .
7 . Since the Court may, of its own motion, question the admissibility of an application, there is no need to consider whether the Commission' s change of position constitutes a fresh submission made out of time .
8 . Nashua was undeniably the recipient of a decision of the Commission, namely a letter informing it that the undertaking which it had proposed could not be accepted . At first sight, therefore, the situation is one which is covered by the first part of the second paragraph of Article 173 .
9 . However, the Commission claims that the decision is not open to challenge under Article 173, on the ground that the only effect of rejecting an offer is to increase the practical risk that an anti-dumping duty will be imposed, without significantly affecting the legal position of the undertaking whose offer is rejected . Furthermore, such a decision on the Commission' s part was merely a stage in the process leading to a further decision, and thus cannot be challenged in a separate action .
10 . I should like to begin by considering the last argument . It is not, of course, possible to establish strict parallels between the rejection of a proposed undertaking and the circumstances which gave rise to the IBM judgment, ( 3 ) cited by the Commission . Indeed, the defendant itself conceded that the term "preparatory act" is inappropriate in the present context . The measures in issue in the IBM case were the decision initiating a procedure against it pursuant to Article 3 of Regulation No 17 of the Council of 6 February 1962, the first regulation implementing Articles 85 and 86 of the Treaty ( Official Journal, English Special Edition 1959-62, p . 87 ), and the notification to IBM of a statement of objections under Article 19 of that regulation . Both measures undoubtedly represent mandatory stages in any procedure leading to the imposition of a fine for conduct in restraint of competition, and thus the Court correctly described them as "measures of a purely preparatory character" ( paragraph 12 of the IBM judgment ) and as "preparatory procedural steps ".
11 . It might, on the other hand, be tempting to view the offer of an undertaking and the decision on that offer as "a special procedure distinct from that intended to permit the Commission or the Council to take a decision on the substance of the case" ( paragraph 11 of the IBM judgment ). Except in cases in which the Commission itself suggests undertakings ( Article 10(3 ) of Council Regulation No 2176/84 ), that procedure is not commenced unless the undertaking in question takes the initiative, and it does not always do so . It is not, therefore, a necessary and obligatory step in the main inquiry seeking to establish whether dumping and injury have occurred .
12 . Even though the procedure is a separate one, however, the Commission' s rejection of an undertaking does not in practice represent its "culmination" ( the term used in paragraph 11 of the IBM judgment ), since the Council is empowered to overturn the Commission' s decision, either directly or indirectly .
13 . Under Article 11(4 ) of Regulation No 2176/84 the Commission is required to inform the Council and the Member States forthwith of any decision imposing a provisional anti-dumping duty . The Council, acting by a qualified majority, may decide differently . That means that if, at that stage, an undertaking has already been offered but has been rejected by the Commission, the Council may, where appropriate, annul the Commission' s decision imposing a provisional duty and accept the undertaking instead .
14 . What happens if an undertaking is not offered until after that stage of the procedure? According to Article 12, a definitive anti-dumping duty
"shall be imposed by the Council, acting by qualified majority, on a proposal submitted by the Commission after consultation"
with the committee set up under Article 6, which consists of representatives of each Member State, with a representative of the Commission as chairman . Consultation covers, in particular :
"( d ) the measures which, in the circumstances, are appropriate to prevent or remedy the injury caused by dumping or the subsidy and the ways and means for putting such measures into effect ".
15 . It is therefore possible that a majority within the Advisory Committee might oppose the introduction of a definitive anti-dumping duty and might prefer to accept the undertaking offered . In those circumstances the Commission might, in the end, decide to reverse its decision to reject the undertaking . If, on the other hand, the Commission nevertheless decided to propose to the Council the imposition of a definitive anti-dumping duty, the proposal might fail to obtain a qualified majority in the Council, and the members of the Council who voted against the Commission' s proposal might intimate that the harmful effects due to the dumping found to have taken place could, in their opinion, be eliminated by way of the undertaking offered . In such a case the Commission would probably decide to annul its initial decision and accept the proposed undertaking after all, so as to avoid injury to Community industry . The provisional duty lapses after four months .
16 . Moreover, as is shown in particular by Council Regulation No 2075/82 of 28 July 1982, regarding the importation of multi-phase electric motors originating in certain East European countries ( Official Journal L 220, 29.7.1982, p . 36 ), disagreement between the Member States within the Advisory Committee may have the result that the Council itself is confronted with the choice of either imposing a definitive anti-dumping duty or accepting an undertaking from the exporters, and that it opts for the second alternative .
17 . Lastly, it is also possible that the Commission and the Council - or the Council alone - may reach the conclusion that the conditions for the application of Regulation No 2176/84 are not fulfilled and that the procedure should be terminated .
18 . It may therefore be concluded that the rejection of a proposed undertaking does not really become definitive until it is confirmed by the imposition by the Council of a definitive anti-dumping duty . It is, in my view, undeniable that from that moment onwards in any event the rejection of the offer must be regarded as an act liable to affect the applicant' s interests, since its result is to deprive him of one alternative : that of escaping the imposition of the anti-dumping duty by entering into an undertaking . That is why I hesitate to affirm, as the Commission has done, that a decision rejecting an undertaking is by its very nature not an act which can be challenged under Article 173 of the Treaty . The act does indeed entail the abovementioned legal consequence, but that consequence is merely a potential one until the Council takes its final decision .
19 . Those are no doubt the grounds on which the Court, in its Order of 11 November 1987 ( 4 ) dismissing as inadmissible Nashua' s application for the annulment of Council Regulation No 535/87 in so far as it was directed against the Commission, stated that
"the Commission' s decision ... to reject an undertaking (( is )) part of the Council' s decision-making process" ( first and last subparagraphs of paragraph 6 ).
20 . Accordingly, I propose that the Court should dismiss as inadmissible the separate action brought by Nashua against the act whereby the Commission rejected the undertaking which it had offered, and order the applicant to pay the costs of Case C-133/87 .
21 . The substantive arguments put forward by Nashua in support of its claim that the rejection of its proposed undertaking was unlawful will be considered below, in connection with Case C-150/87, since it is one of the submissions made in that case .
II - Case C-150/87
22 . In addition to the submission discussed above Nashua makes three submissions, which it summarizes in paragraph 18 of its application as follows :
"A - By failing to treat the applicant as a separate exporter in the proceeding and in the measures adopted in the regulation, the Council failed to apply correctly the procedures laid down in Council Regulation ( EEC ) No 2176/84 .
B - By calculating anti-dumping duties on the basis of figures which excluded all imports by the applicant, the Council acted in breach of Council Regulation ( EEC ) No 2176/84 .
C - By applying anti-dumping duties at a uniform rate on the applicant and on Ricoh, the Council unlawfully discriminated against the applicant in breach of the Community principle of non-discrimination and in breach of Council Regulation ( EEC ) No 2176/84 ."
23 . It is clear from a simple perusal of those complaints that the applicant regards itself at one moment as an exporter of plain paper photocopiers ( hereinafter referred to as "PPCs ") and at the next moment as an importer, and that it refuses to be treated in the same manner as Ricoh Company Limited, established in Japan, which is the producer of the PPCs bearing the Nashua brand name .
24 . The reason is that in Case C-150/87 the applicant is subdivided into several parts . As an integral whole it defines itself ( at paragraph 2 of the application ) as "the supplier of Nashua brand photocopiers which it sells in the EEC and numerous other countries ". However, it consists on the one hand of Nashua Corporation, which is "the exporter from Japan of Nashua photocopiers" and on the other hand of its subsidiaries, which are "the importers of Nashua photocopiers into the Community ". What is certain and undisputed is that "the applicant buys most of its photocopiers from Ricoh Company Limited of Japan which manufactures Nashua brand machines at its production facilities in Japan ...".
25 . On the basis of those last-named characteristics, the Council places the applicant in the category of "original equipment manufacturers" ( hereinafter referred to as "OEMs "), which, at paragraph 8 of the contested regulation, it defines as importers who sell in the Community, under their own brand names, products purchased from exporters of PPCs to the Community . From this it infers, first, that the application is inadmissible because the applicant is in any event unrelated to a producer or exporter ( see paragraph 11 of the statement of defence ) and, secondly, that neither it nor the Commission infringed the basic regulation by not treating the applicant as a separate exporter or by refusing to accept the undertaking on the ground that it was offered by an importer .
26 . The novel feature of these cases therefore lies chiefly in the position of the applicant . In Cases 171, 172 and 174 to 179/87, which also challenge Regulation No 535/87 and are still pending before the Court, the applicants are all Japanese exporters of PPCs expressly concerned by both the contested regulation and Commission Regulation ( EEC ) No 2640/86 of 21 August 1986 imposing a provisional anti-dumping duty on imports of plain paper photocopiers originating in Japan ( 5 ) ( hereinafter referred to as "the provisional regulation "). In the anti-dumping cases which have previously come before the Court, the applicants were either exporters ( or producers ) of products subject to an anti-dumping duty or else importers - usually sole importers - of such products, which might or might not be subsidiaries of an exporter ( or producers ) or otherwise connected with such a person .
27 . In this case, Nashua - meaning the applicant as an integral whole - is certainly not a producer, and its status as an exporter is in dispute . Moreover, in its capacity as an importer, Nashua is neither the subsidiary of an exporter or producer nor the independent importer of products bearing the brand name of an exporter or producer . Having made these preliminary remarks, I shall begin by considering the objection of inadmissibility raised by the Council .
A - Admissibility of the application in Case C-150/87
28 . The Council argues that the application in Case C-150/87 is inadmissible on the ground that the regulation is not of individual concern to the applicant . Whilst acknowledging that Nashua' s situation differs, in some degree, from that of the unrelated importer in Joined Cases 239 and 275/82 ( judgment of 21 February 1984 in Allied Corporation and Others v Commission (( 1984 )) ECR 1005 ), it takes the view that it still does not meet the criteria laid down by the Court, in particular in its order of 8 July 1987 in Case 279/86 Sermes SA v Commission (( 1987 )) ECR 3109 .
29 . In that order, the Court held that "regulations imposing an anti-dumping duty are in fact, as regards their nature and their scope, of a legislative character, inasmuch as they apply to all the traders concerned", and went on to summarize its case-law in the following manner :
"However, the Court has held that certain provisions of such regulations may nevertheless be of direct and individual concern to those producers and exporters who are charged, on the basis of information derived from their business activities, with practising dumping . That is generally true of producers and exporters who are able to establish that they were identified in the measures adopted by the Commission or the Council or were concerned by the preliminary investigations ( see the judgments of 21 February 1984 Allied Corporation I, cited above, and of 23 May 1985 in Case 53/85 Allied Corporation II (( 1985 )) ECR 1621 ).
It is also true of those importers who are directly concerned by findings of dumping inasmuch as export prices have been determined by reference to those importers' resale prices and not to the export prices charged by the producers or exporters in question ( see the judgments of 29 March 1979 in Case 118/77 ISO v Council (( 1979 )) ECR 1277, and of 21 February 1984 Allied Corporation I, cited above ). Under Article 2(8)(b ) of Regulation No 2176/84 export prices may be constructed in that way inter alia where there is an association between exporter and importer" ( paragraphs 15 and 16 ).
The Court went on to find that the applicant ( Sermes SA ) belonged to neither of the two categories of economic agent described above . As an importer it was not associated with the exporter of the product at issue, and dumping was not substantiated by reference to the applicant' s resale prices . Furthermore, the Court saw no relevance in the fact that it was the sole importer in its Member State of the products in question or that it had taken part in the successive stages of the investigation . Accordingly, it rejected the application as inadmissible .
30 . The Court has thus drawn a distinction between producers and exporters on the one hand and importers on the other . Within the second group a further distinction is made between "associated" and independent importers . As the Court has held in its judgment of 6 October 1982 in Case 307/81 Alusuisse Italia v Commission (( 1982 )) ECR 3463, independent importers may not seek the annulment of a regulation introducing an anti-dumping duty, since that duty affects them as members of a category of persons viewed in broad and abstract terms, that is to say, in their objective capacity as importers of the product subject to the anti-dumping duty ( see paragraphs 9 to 11 ).
31 . According to the Council, Nashua belongs to that same category of independent importers, that is to say importers not associated with a producer . Furthermore, in this particular case, the export price was based on sales to Nashua by the producer and exporter, Ricoh, and not on Nashua' s resale price .
32 . Moreover, the construction of the normal value for sales to OEMs ( including Nashua ) was also based on information from the producer and exporter, Ricoh, and not from Nashua . Thus the dumping practices were not substantiated or the dumping margin ascertained on the basis of information supplied by the applicant, and it is therefore not "singled out" by the contested regulation .
33 . Hence the Council' s application of the principles in Sermes to the circumstances of Nashua is undoubtedly correct . In my opinion, however, the determining factor with regard to the admissibility of applications in anti-dumping cases is not so much the applicant' s status as a producer or exporter, or as a related importer, but rather the manner in which its actual situation was taken into account .
34 . It follows from the foregoing observations that a regulation establishing an anti-dumping duty may be of individual concern to producers, exporters and importers . There is thus no a priori exclusion of any one of those categories of economic agents .
35 . However, it also follows that the mere fact of being a producer or exporter of a product subject to an anti-dumping duty is not sufficient to allow the economic agent in question to be regarded as being individually concerned . The determining factor is that they must have been charged with dumping on the basis of information derived from their business activities . In that connection the fact of being identified in the acts of the Commission or the Council or involved in preliminary investigations affords a strong presumption, but not necessarily proof that such was indeed the case . ( Hence the word "generally" in paragraph 15 of the order in Sermes ).
36 . Similarly, in order that a measure should be of individual concern to him, it is not sufficient that an importer is associated with the exporter of the product in question . In the Sermes case the Court did not confine itself to a finding that the applicant did not have the status of an associated importer but added that in that case the dumping had been substantiated not by reference to its resale prices but by reference to the prices actually paid or payable on exportation . The reason is that even where there is an association the construction of the export price in that manner is not necessarily the only feasible method ( hence the word "may" in paragraph 16 of the order in Sermes ).
37 . However, just as association is not in itself sufficient to support the conclusion that an importer is individually concerned, neither is it a necessary condition for such a conclusion . An association is not the only contingency in which Article 2(8)(b ) of Regulation No 2176/84 allows the export price to be constructed on the basis of the importer' s resale price ( hence "inter alia" in paragraph 16 of the order in Sermes ).
38 . However that may be, in the case before the Court today I do not consider it absolutely necessary to go further into that question, or indeed to draw the same conclusions as the Council did from its findings and conclude that the application is inadmissible .
39 . As I have already pointed out in my preliminary remarks, the feature peculiar to this dispute is that Nashua is an OEM, and as such claims to be both the exporter and the importer of Nashua PPCs . The Council itself concedes that Nashua does physically export ( Ricoh ) PPCs bearing the Nashua brand name from Japan to the Community, although it denies that this circumstance has any relevance in the context of the anti-dumping provisions . It also recognizes that the applicant' s position is different from that of the unrelated importer in the Allied case ( paragraph 7 of its defence ) and considers it to belong to a class of companies which act as sole and exclusive importers of PPCs under their own names or trade marks ( paragraph 8 of its defence ).
40 . Must it therefore be concluded that, to use the terms of the established case-law of this Court, the contested regulation is of concern to the applicant not by reason of certain attributes which are peculiar to it or by reason of circumstances in which it is differentiated from all other persons, but solely by virtue of its objective status as an OEM, in the same way as any business actually or potentially in the same situation, namely that of an OEM importing Japanese-made PPCs under its own brand name? ( See judgment of 14 July 1983 in Case 231/82 Spijker v Commission (( 1983 )) ECR 2559 .)
41 . I think not . In the first place, OEMs do not form an anonymous class comparable to "importers ". The anti-dumping duty levied on Nashua PPCs does not apply indiscriminately to all OEMs . For each of those OEMs the duty is determined by the dumping margin found to exist in respect of the producer whose photocopiers they sell under their own brand name . Nashua is therefore affected by the regulation not merely on account of its objective status as an OEM but in its capacity as an OEM selling products manufactured by Ricoh .
42 . It was the finding that Ricoh - the producer - had been practising dumping which led to the imposition on Nashua brand products of the same anti-dumping duty as that levied on products sold under the Ricoh brand name . I therefore think it legitimate to infer that Nashua is affected by those findings and by the imposition of those duties in the same way as Ricoh . If - and this point is not in dispute - Ricoh is individually concerned and hence entitled to bring an application for the annulment of the legislative provisions imposing the anti-dumping duty on its products, Nashua must be in entirely the same position as regards the products sold under its own brand name .
43 . That conclusion seems all the more justified in the light of the fact that in this case the Council made findings regarding dumping practices on Ricoh' s part and established a weighted dumping margin for Ricoh by reference to the distinctive characteristics of the relationship between Ricoh and Nashua, in particular the difference between Ricoh' s sales to Nashua and its sales to other purchasers .
44 . At the same time, however, Nashua cannot merely be treated as if it were Ricoh, since the machines which it imports have a distinctive livery which characterizes them as Nashua products .
45 . Moreover, I take the view that once a product imported under a given brand name is subject, on entry into the Community, to special customs arrangements, the act which established those arrangements is of direct and individual concern to the business whose product bears the distinctive brand name ( or which is the holder or owner of that brand name ), even if it is not considered to be an exporter for the purpose of the anti-dumping legislation . The brand name is the distinctive badge of a product and differentiates it from any other product, even if the product is manufactured and delivered as it stands by a business other than the owner of the brand name in question, and even if at a technical level it is no different from the products made and sold by that other business under its own brand name . Through the product, the brand name identifies its owner and places him in a situation which distinguishes him from any other person .
46 . Furthermore, the application of the contested regulation itself affords an unusually eloquent illustration of the point that the brand name distinguishes the product and the owner of the brand name which it bears - in particular an OEM - from any other person . Let us take the case of Gestetner . When a customs officer is confronted with a photocopier bearing the Gestetner brand name, his normal reflex must be to impose the general anti-dumping duty of 20%, since Gestetner' s name is not included amongst the three manufacturers whose products, by virtue of Article 1(2 ), are subject to different rates of duty . At the hearing, however, the Council confirmed that Gestetner machines, which are manufactured by Mita, should be subject to duty at the rate of 12.6% charged on products manufactured by that company . Nevertheless, there is nothing in the wording of the regulation to enable the customs officer to discover this fact . Since Gestetner sought the application of duty at 12.6%, rather than the 20% rate which applies prima facie, the customs officer was obliged to seek instructions from the national authorities or the Commission in order to obtain confirmation of that fact . The national customs authorities subsequently received an explanatory memorandum on the regulation, supplying the definitive information on the subject . It is therefore undeniable that during customs clearance Gestetner brand products are distinguished from others, which in my view implies that the contested regulation is of direct and individual concern to Gestetner in just the same way as it is to Mita .
47 . The fact that the situation is not the same for Nashua is entirely due to the fact that Ricoh products are subject to duty at the general rate of 20 %. However, if the calculations establishing the dumping margin had produced a different result, the same might have applied .
48 . Secondly, it should be pointed out that by reason of the somewhat hybrid character of OEMs the admissibility and the merits of this case are closely linked . Nashua complains that the Council failed to treat it as the exporter of its own products, and in particular that it did not calculate a separate dumping margin for the products bearing its brand name, distinct from the margin calculated for Ricoh products . In its defence the Council argues that Nashua is the importer of products which, although bearing the Nashua brand name, are in fact Ricoh products for the purposes of the anti-dumping provisions .
49 . That being so, if the question of admissibility were determined by the manner in which the Council perceived the functions and role of Nashua, and by its consequent decision either to apply or not to apply the basic anti-dumping provisions, the effect would be to allow the Council, at its pleasure, to remove the application of those provisions to economic agents such as OEMs from any direct review by the Court .
50 . Even though the Community institutions enjoy a broad discretion in determining dumping margins, especially in deciding whether or not to establish any separate dumping margin and different rates of duty for Nashua products, their exercise of that discretion is still subject to review by the Court with regard to whether the relevant procedural rules have been complied with, whether the facts on which the choice is based have been accurately stated and whether there has been a manifest error of appraisal or a misuse of powers . ( 6 )
51 . If the anti-dumping provisions allowed ( or indeed required ) Nashua to be treated separately from Ricoh, the fact that the institutions withheld that separate treatment from it would single Nashua out just as much as if they had accorded such treatment .
52 . Nevertheless, I hasten to add that that does not prejudge the substantive issues and does not mean that the treatment of Nashua as an importer for the purpose of calculating the dumping margin was necessarily incompatible with the basic regulation, Council Regulation No 2176/84 .
53 . Lastly, I think there is a third reason for saying that the imposition of the anti-dumping duty is of direct and individual concern to Nashua .
54 . We have seen that under Article 11(4 ) of Regulation No 2176/84 the Commission must forthwith inform the Council of the imposition of a provisional anti-dumping duty . The Council, acting by a qualified majority, may decide differently . Thus the Council may inter alia decide that there is no need to impose a provisional anti-dumping duty and may instead accept the undertaking offered by the firm in question . If it does not do so, and subsequently imposes a definitive anti-dumping duty, the Council endorses the Commission' s decision not to accept the undertaking offered . An undertaking is always offered by an individual firm . The decision of the Council to ratify the decision rejecting the undertaking offered by such a firm therefore amounts to a decision of direct and individual concern to that firm . Since Nashua offered to enter into an undertaking, the Council regulation imposing a definitive anti-dumping duty and thereby confirming the rejection of its proposed undertaking is of direct and individual concern to it .
55 . It might be tempting to object that this line of reasoning would mean that in future it would be sufficient for any economic agent, even an unrelated importer, to offer an undertaking in order to become automatically entitled to challenge any regulation relating to the products which it imports .
56 . In that regard it should be observed that the risk of a proliferation of applications to the Court is a factor which cannot be taken into consideration in determining whether or not such firms are entitled to judicial review of the decisions affecting them . In the majority of cases it is, in any event, producers who offer undertakings .
57 . More importantly, however, if it is considered, as the Court held in its order of 11 November 1987 ( cited above ), that
"the Commission' s decision rejecting an undertaking forms ... part of the process"
culminating in the Council' s decision whether or not to impose a definitive anti-dumping duty, then it necessarily follows that all firms which have offered an undertaking are entitled to bring proceedings against a Council regulation introducing a definitive anti-dumping duty and thereby rejecting their offers .
58 . In short, for all the reasons set out above I take the view that the contested regulation must be regarded as being of direct and individual concern to Nashua and that its application in Case C-150/87 is therefore admissible .
B - The applicant' s submissions on the merits
59 . The applicant puts forward four formal submission on the merits, the first of which, based on the fact that it was not treated separately, in fact has two parts : in addition to criticizing the Council for not calculating a separate dumping margin for it, it claims that "in any event" ( paragraph 41 of the application ) the adjustment made to the profit margin in constructing a normal value for sales to OEMS took inadequate account of the differences between sales to dealers and sales to OEMs .
1 . Unlawful refusal to treat the applicant as a separate exporter or to calculate a separate dumping margin for Nashua products
60 . This submission is made up of a number of interconnected parts, which may be set out as follows :
( a ) Nashua is an exporter of own-brand PPCs and should have been treated separately, in the same way as the other exporters;
( b ) The calculation of a separate dumping margin for Nashua was possible because
( i ) the institutions had all the necessary information at their disposal;
( ii ) Regulation No 2176/84 was not an obstacle;
( iii ) previous practice, and that of the United States, show that it was possible;
( iv ) there were no practical difficulties;
( c ) a dumping margin had actually been calculated and was lower than the margin adopted for Ricoh .
61 . Is Nashua an exporter? In order to demonstrate that it should have been regarded as an exporter, the applicant bases its case on the fact that by virtue of its trading relationship with Ricoh it usually purchases its copiers fob Japan or, in any event, acquires title to them in Japan upon delivery to the carrier at the latest, and thereafter is solely responsible for exportation, forwarding, sales and after-sales service . Nashua is thus entirely independent of Ricoh and competes with Ricoh directly on the Community market .
62 . The Council replies that in the context of the anti-dumping provisions the relevant question is not where a trader acquires the product or whether he exports it physically from the non-member country, but whether he should be treated as an importer or an exporter for the purposes of Regulation No 2176/84, that is to say whether a separate dumping margin should be calculated for him .
63 . I consider that view to be correct . Even on a preliminary examination I find it hard to see how a person who is not established in the country of exportation can be an exporter . That, however, raises the question what kind of establishment is needed in order for a trader to be recognized as an exporter . The basic regulation, at any rate, does not define the term "exporter ". Article 13(2 ), upon which the applicant has relied, provides that a regulation imposing an anti-dumping duty
"shall indicate in particular the amount and type of duty imposed, the product covered, the country of origin or export, the name of the supplier, if practicable, and the reasons on which the regulation is based ".
It thus uses the broader, neutral term of "supplier" and, even then, requires his name to be given only if it is "practicable to do so"; on the other hand, it provides for the compulsory indication of the product covered and the country of origin or export .
64 . Those two elements define the scope of any regulation introducing an anti-dumping duty : any given product originating in any given country or countries outside the Community is capable of being dumped and of incurring an anti-dumping duty . Under Article 2(2 ) of Regulation No 2176/84, "a product shall be considered to have been dumped if its export price to the Community is less than the normal value of the like product ". Similarly, Article 2(13)(a ) provides that : "' dumping margin' means the amount by which the normal value exceeds the export price ". The normal value is "the comparable price actually paid or payable in the ordinary course of trade for the like product intended for consumption in the exporting country or country of origin" ( Article 2(3)(a ) ) and the export price is "the price actually paid or payable for the product sold for export to the Community" ( Article 2(8)(a ) ). The anti-dumping provisions are therefore focused on a comparison of the prices paid or payable for a given product originating in a non-member country according to whether it is intended to be sold for consumption in that non-member country or for export to the Community .
65 . In this case, Nashua neither produces PPCs itself nor sells them on the domestic Japanese market . ( That in itself distinguishes it from the other exporters for whom a dumping margin was calculated, all of whom produce and sell PPCs bearing their brand name .) Furthermore, since no sales of OEM machines produced by Ricoh or by other manufacturers took place on the Japanese market during the reference period ( see the end of paragraph 8 of the contested regulation ), the institutions had to construct normal values for such products in accordance with Article 2(3)(b ) of Regulation No 2176/84, which applies
"when there are no sales of the like product in the ordinary course of trade on the domestic market of the exporting country or country of origin, or when such sales do not permit a proper comparison ".
For that purpose the institutions were entitled to construct the value by adding cost of production and a reasonable margin of profit ( indent ( ii ) ), which, in view of the fact that Nashua products are manufactured by Ricoh, could only be those of Ricoh .
66 . On the basis of the same considerations, namely that Nashua itself neither produces nor sells on the Japanese market but purchases ready-made Nashua PPCs from Ricoh in order to export them directly to the Community, the Commission and the Council rightly took the view that the price received by Ricoh for its sales was "the price actually paid or payable for the product sold for export ". It is also apparent from that wording that the export price is the price paid to the person who sells for export . Even if Nashua were to be regarded as exporting its PPCs, it does not sell them for export but purchases them with a view to exporting them ( not to selling them for export ).
67 . The approach adopted by the institutions seems perfectly consistent . Having constructed the normal value of Ricoh products sold to Nashua by adding together Ricoh' s cost of production and a reasonable margin of profit, making due allowance for the special features of sales to OEMs ( see paragraphs 11 and 24 of the contested regulation ), they took as the export price the price actually received by Ricoh for those same sales intended for export . In that way they were able to undertake a proper comparison of those two parameters, by which the existence and the extent of dumping practices may be ascertained, and to do so on a comparable basis, as is required by Article 2(9 ) of Regulation No 2176/84 .
68 . That method seems to me perfectly logical . As the applicant itself states,
"it is an underlying principle of anti-dumping rules that a company which controls prices both in its home market and on an export market should be penalized if its prices in the foreign market are below those in its home market" ( paragraph 15 of its reply ).
Pursuant to that principle, the institutions calculated a dumping margin by reference to Ricoh, which alone sells machines on the Japanese market and whose prices as charged to Nashua largely determine Nashua' s PPC prices .
69 . Indeed, the applicant seems indirectly to agree with the approach adopted by the institutions when, in paragraph 9 of its reply, whilst claiming that "the whole scheme of Regulation No 2176/84 is to calculate a dumping margin for a product with a particular origin" and that "the Council should therefore have investigated the export price of 'Nashua' products and compared those prices with normal value", it suggests that in calculating the dumping margin for Nashua products "the relevant export price was the price paid to Ricoh by the applicant; the relevant normal value was the Ricoh price in Japan subject to necessary adjustments ".
70 . Since that seems to be precisely what the Council did, there is some uncertainty as to the true scope of Nashua' s complaint . It becomes quite clear further on in Nashua' s written pleadings, when it deplores the fact that "it is only Ricoh that benefits from the combination of dumping margins for its own-brand sales and its OEM sales, since the lower ( 7 ) ( or zero ) dumping margins of OEM sales counterbalance the higher 7 dumping margins of its Ricoh-brand sales and lead to an eventual lower overall dumping margin for all Ricoh production" ( paragraph 16 of the reply ).
71 . Being convinced that the dumping margin for Nashua products is lower than that for products sold under the Ricoh brand name, the applicant wishes to obtain the benefit of that difference in its entirety, not merely to the extent to which it affects the calculation of a weighted average margin for all products manufactured by Ricoh . This point also emerges from paragraph 12 of its reply, in which it maintains that "the Council should have treated this either as a separate dumping margin to be applied to the applicant, or as a separate dumping margin for the sales channel for sales of 'Nashua' machines to the applicant ".
72 . I do not, however, believe that the method of calculating a separate dumping margin for Nashua products would have had to be the method advocated by the applicant, nor that it would necessarily have resulted in a margin lower than that established for Ricoh' s production as a whole .
73 . It should first be observed that the factors which Nashua itself proposes should be taken into consideration in calculating "its" margin both relate to Ricoh, namely the price charged by Ricoh on the Japanese market and the price paid to Ricoh by Nashua for the products which it exports direct . In order to calculate the dumping margin for Nashua products, the Council would logically have had to take account of factors relating to Nashua products . Instead of taking as the normal value the prices charged by Ricoh on the Japanese market, which, in the case of sales to the OEMs, had to be constructed on the basis of Ricoh' s production costs, the Council would have had to construct a normal value for products deemed to have been sold by Nashua on the Japanese market . That figure might easily have been higher than the value constructed for sales by Ricoh to Nashua, because the various costs incurred by Nashua and the profit margin which it could legitimately have expected when selling on the Japanese market would have had to be included .
74 . Nashua proposes to retain the price paid by it to Ricoh as the export price . Leaving aside the fact that that would have tended to emphasize that exportation takes place as soon as the goods are sold to Nashua, its effect would have been to increase the dumping margin for Nashua products in line with the higher level constructed for their normal value . However, the export price could not have remained at the level adopted by the Council .
75 . In order to calculate a separate dumping margin for Nashua products, the export price would have had to be the price actually paid or payable to the applicant ( Article 2(8)(a ) of Regulation No 2176/84 ), or rather - since Nashua has subsidiaries in most countries of the Community - an export price constructed on the basis of Article 2(8)(b ) of that regulation, which applies
"where there is no export price or where it appears that there is an association or a compensatory arrangement between the exporter and the importer or a third party, or that for other reasons the price actually paid or payable for the product sold for export to the Community is unreliable ".
Even if that export price had been higher than the figure adopted by the Council, it is highly unlikely that the dumping margin thus calculated would have been lower than 20%, the rate of the anti-dumping duty ultimately imposed on all Ricoh products including those sold to Nashua . That rate, which is far less than the dumping margin of 40.6% established for Ricoh products ( including those sold to the OEMs ) was considered sufficient to remove the injury caused to Community production ( paragraph 101 of the contested regulation ).
76 . In any event, the applicant has not shown that that would have been the case but attempts to derive arguments from the general, theoretical points made in paragraphs 27 and 92 of the definitive regulation, according to which
"in general, lower margins were established for those companies which had high levels of OEM sales",
and it would have been
"inappropriate to exclude these sales from the calculation of the dumping margin for the exporter concerned, especially if such exclusion may, as is possible, increase the dumping margin for that exporter ".
77 . According to the applicant, the Commission and the Council had the information necessary for calculating a margin applicable to its products alone, namely the normal value constructed for OEM machines, the export price paid to Ricoh ( see paragraph 37 of the application ) and the particulars which it had itself supplied regarding the adjustments which it would have been necessary to make in particular to the export price so as to allow the two figures to be properly compared ( paragraph 38 of the application ). However, as we have already seen, that information related to all Ricoh products and sales by Ricoh to dealers in Japan or to OEMs . Furthermore, the claim that the Commission informed the applicant at a meeting held on 14 November 1986 that it had indeed calculated a dumping margin for Nashua products and that it was lower than for Ricoh products ( paragraph 10 of the reply ) calls for some qualification . The Council made the following statement on the subject :
"In fact, in that meeting, the Commission explained that a special normal value was constructed for Ricoh' s sales to OEMs ... which resulted, indeed, generally in a lower dumping margin than that found for sales of Ricoh' s own-brand photocopiers" ( paragraph 9 of the rejoinder ).
78 . That version of the facts is confirmed by paragraphs 11 and 27 of the contested regulation .
79 . What actually happened is that the Commission made a calculation in respect of all of Ricoh' s sales subsidiaries, and that the dumping margin finally reached represents the weighted average for all those outlets . It is therefore clear that the Commission also calculated a dumping margin covering Nashua' s case .
80 . However, a number of observations must be made in that connection . In the first place, that dumping margin was not specific to Nashua, because it was based on the constructed normal value for sales by Ricoh to OEMs . Secondly, it belonged within a special context and was valid only within that context, namely the determination of a single dumping margin for all Ricoh products, irrespective of the brand name under which they were sold . Thirdly, the margin adopted for sales to OEMs was bound to be lower than the margin established for sales of photocopiers through Ricoh' s own network, since it was based on a lower normal value which did not cover all of Ricoh' s costs and its normal profit margin for sales on the Japanese market .
81 . If, on the other hand, an autonomous dumping margin had been established specifically for Nashua products, it would have had to be based on a higher normal value, covering all the costs which Nashua would have incurred if it had sold photocopiers on the Japanese market, together with the corresponding profit margin . Otherwise, that normal value would not have been in accordance with the definition in Article 2(3)(a ) of the basic regulation, under which "normal value" is
"the comparable price actually paid or payable in the ordinary course of trade for the like product intended for consumption in the exporting country ".
82 . Lastly, it should be noted that if the Commission had, for whatever reason, adopted the approach advocated by Nashua and had fixed a lower anti-dumping duty for Nashua products than for products marketed under the Ricoh brand name, Ricoh would have been encouraged to sell most of its products under the Nashua brand name even though the normal value for its sales on the Japanese market would have remained the same .
83 . It follows from the foregoing that the approach adopted by the institutions was consistent and logical . In any case, although Regulation No 2176/84 may not preclude separate treatment of the applicant as an exporter of its own products or, therefore, the calculation of a separate dumping margin for Nashua products, there is nothing in that regulation to compel the institutions to do so or to prevent them from acting as they did .
84 . For that reason, any reference to the practice in previous cases ( referred to in the third paragraph under heading B 2(a)(i ) of Section IV of the Report for the Hearing, at p . 24 ) seems to me have little relevance . The fact that in those cases the institutions did adopt separate measures for two or more exporters of products from the same producer cannot amount to a practice binding upon them for the future . Furthermore, since the non-producing exporters involved in those cases were all established in the countries of export, their circumstances were fundamentally different from Nashua' s .
85 . As regards the reference to the practice of the main trading partners of the Community, in particular the United States of America, whose example the institutions should, according to the applicant, follow when applying their own anti-dumping rules, it is sufficient to point out that the Court observed in its judgment of 5 October 1988 in Joined Cases 277 and 300/85 Canon v Council, that
"the attitude of one of its trading partners, even a major partner, does not suffice to oblige the Community to follow the same course . Such reference cannot therefore determine how the Community legislation is to be interpreted" ( paragraph 15 ).
86 . As for the practical difficulties which separate treatment of OEMs would entail, which are set out in paragraph 92 of the contested regulation but which the applicant says have no substance, according to that paragraph itself they constitute no more than a subsidiary argument; the Commission takes the view that
"in any event ... the fact that the OEMs resell imported products under their own brand names (( is not )) sufficient reason to justify separate treatment for OEMs in comparison with other importers ".
Besides, those practical difficulties seem to me to be quite real in terms both of introducing specific measures and of monitoring them . Since the calculation of special dumping margins for OEMs and, where appropriate, the imposition of specific anti-dumping duties on their products are largely determined by the terms of their trading relations with their suppliers, it would be necessary to calculate for each OEM as many margins, and to impose as many duties, as that OEM has suppliers . Indeed, as the Council rightly argued in the abovementioned paragraph 92,
"it would be inappropriate for OEMs to be able to purchase from any exporter and pay the same level of duty irrespective of the level applicable to the exporter concerned ".
87 . Furthermore, any supervening changes in an OEM' s relationship with its supplier, or indeed a change of supplier, would necessarily entail adjustments to the specific measures governing it . However, I do not think that the review procedure for which Article 14 of Regulation No 2176/84 provides can, in view of its necessarily cumbersome and complex nature, serve as the appropriate mechanism for making such adjustments, even on the supposition that those changes are notified to the institutions in good time .
88 . The first part of the applicant' s first submission is therefore unfounded and must be rejected .
2 . Miscalculation of the normal value for sales to OEMs
89 . It may be recalled that in order to take account of the difference between manufacturers' own-brand sales and sales to OEMs the Council and the Commission applied a lower profit margin in constructing the normal value for sales to OEMs - as they had to do in the absence of such sales on the Japanese market during the reference period - than that used for sales under manufacturers' own brand names . The profit margin in question was assessed at 5%, as opposed to the average of 14.6% used elsewhere .
90 . The applicant argues that in doing so the institutions made an arbitrary adjustment which did not reflect the real differences between the two types of sale involved and that by confining the adjustment to the profit margin they overlooked the fact that the sales costs, administrative expenses and overheads associated with sales to an OEM are much lower than those associated with sales to an ordinary dealer .
91 . That is an incorrect presentation of the facts . The second subparagraphs of paragraphs 11 and 24 show clearly that the institutions intended to take account of the differences between the two types of sale both in terms of expenses and in terms of profits . It was only for lack of more precise information that they decided that they could cover all those differences by making an adjustment to the profit element alone and by fixing the profit margin at a flat rate of 5% for all sales to OEMs .
92 . Furthermore, since Article 2(3)(b)(ii ) of Regulation No 2176/84 provides that costs include selling, administrative and other general expenses, it cannot be inferred that the institutions overlooked those factors .
93 . That observation is also sufficient to refute the argument alleging discrimination against the applicant inasmuch as the exporter to whom paragraph 25 of the contested regulation refers was treated differently . When read in the light of the abovementioned article, the phrase reciting that "the calculation of the normal value comprised only production costs incurred by the exporter concerned, together with a reasonable margin for profit" cannot be construed as meaning that no additional figure representing sales costs, administrative expenses and general overheads was incorporated in the production costs .
94 . As to whether the level of the adjustment made by the institutions was sufficient to take account of all the differences regarding costs and profits, it must be noted that the applicant has not succeeded in producing evidence to the contrary . Admittedly, the applicant was, by the nature of things, in a particularly difficult position for doing so . First of all, since there were no sales to OEMs on the Japanese market, it could not have any information on the actual costs or the true profit margin in such sales . Such information as it was able to supply could therefore relate, at most, to sales to OEMs on the Community market . Even in respect of such sales it could have obtained precise information only with the assistance of Ricoh, since the adjustment applied was intended to cover differences in Ricoh' s costs and profits between its sales under its own brand name and sales to OEMs .
95 . Indeed, the applicant admits that it was not in a position to ascertain the constructed normal value of goods sold to it by Ricoh . It therefore proposed adjustments to the export prices ( which it knew ) in order to allow a valid comparison to be made, as is required by Article 2(9 ) of Regulation No 2176/84 ( see paragraph 38 of the application ).
96 . However, once the institutions had taken account of the difference in costs and profits between the two types of sales when they were constructing the normal value for comparison with the export prices charged to OEMs ( see paragraphs 11 and 24 of the contested regulation ), further adjustments pursuant to Article 2(9 ) and ( 10 ) of Regulation No 2176/84 were no longer required . Indeed, such adjustments would have been required only if the applicant had proved that they were actually justified . ( 8 ) In view of the above circumstances it is not surprising that Nashua did not succeed in proving its case "to the satisfaction of the Commission" ( paragraph 24 of the contested regulation ).
97 . The second part of the first submission must therefore be rejected as well .
3 . Unlawful calculation of the anti-dumping duty
98 . In this submission the applicant argues that by calculating the anti-dumping duty on the basis of figures disregarding all the imports of Nashua photocopiers, the Council infringed Regulation No 2176/84 . Nashua maintains that it is unfair and discriminatory for the Council, on the one hand, to have treated it as inseparable from Ricoh for the purposes of calculating the dumping margin and, on the other, to have imposed a duty on its photocopiers based on a calculation from which sales of those machines were entirely excluded . ( For further details on the arguments put forward by the parties, reference should be made to Section IV, B(2)(b ) of the Report for the Hearing .)
99 . It should be observed at the outset that the manner in which Nashua presents the circumstances does not seem to be quite correct . The Council did not in fact impose a duty on Nashua PPCs on the basis of a calculation from which sales of those PPCs were excluded, but it did impose a duty on Japanese PPCs in general, and Ricoh' s machines in particular, on the basis of a calculation which took account only of a given category of PPC sales which it considered representative of all sales in all categories, namely sales by related Japanese subsidiaries selling to independent distributors within the Community . Since no dumping margin was calculated for Nashua products, there can really be no question of discrimination .
100 . Furthermore, Regulation No 2176/84 contains no precise rules regarding the fixing of the level of anti-dumping duties . Article 13(3 ) simply fixes ceilings which the institutions may not exceed in any circumstances, namely the level of the dumping margin on the one hand and the level of the injury suffered on the other, where a lesser duty would be adequate to remove the injury . Provided that they comply with those two norms, the institutions therefore enjoy almost complete freedom as to the factors to be taken into consideration .
101 . In particular, there is nothing to compel them, in fixing the amount of the duty to be applied, to adopt the same method of calculation or the same line of reasoning as is used in determining the dumping margin, at least when they do not fix the duty at the same level as the margin or by reference to it . In its judgments of 7 May 1987 in the "ball-bearings" cases ( Cases 240, 255, 256, 258 and 260/84 ), the Court held that the methods of calculation which may be used for the normal value and for the export price are independent of each other ( paragraphs 13 and 14 ). In its judgments of 5 October 1988 in the "electronic typewriters" cases the Court held that
"the validity of the comparison provided for in Article 2(9 ) cannot therefore be conditional on calculation of the normal value and the export price by identical methods" ( see judgment in Joined Cases 277 and 300/85 Canon v Council, paragraph 37 )
and
"there are three sets of distinct rules, each of which must be complied with separately for the respective purposes of determining the normal value, establishing the export price and making the comparison between the two" ( see judgment in Joined Cases 260/85 and 106/86 Tokyo Electric Company v Council, paragraph 31 ).
102 . In my opinion, what is true in respect of the calculation of a single factor, namely the dumping margin, must a fortiori be true of the calculation of two different factors, the dumping margin on the one hand and the anti-dumping duty on the other, especially when no specific rule is laid down for the calculation of that second element .
103 . In the second place, apart from observing in general terms that the Council took account only of sales by Japanese subsidiaries to independent distributors in the Community and not of sales by OEMs, the applicant has not specifically demonstrated how this approach affected the amount of the anti-dumping duty imposed or the extent to which that amount would have differed if sales by OEMs had also been taken into consideration . In view of the broad discretion enjoyed by the Council with regard to the method of fixing the anti-dumping duty, it cannot be said on the basis of that general observation that it committed a manifest error or misused its powers in taking account only of sales by related Japanese subsidiaries, which represented 70% of all PPC sales within the Community during the reference period . The fact that sales during the same period by Ricoh' s two OEM customers - one of whom was Nashua - accounted for almost half the sales of Ricoh products in the Community is beside the point, because the approach adopted by the institutions in order to determine the amount of duty needed to offset the injury caused to Community producers, described in paragraph 107 of the contested regulation, was a comprehensive approach based on the cumulative injury caused by a representative percentage ( 70 %) of all exports to the Community of dumped products by Japanese companies, not on the injury caused by each individual exporter . Thus the special circumstances of any given exporter, such as the high level of sales by OEMs in relation to its total sales, can have only a very limited effect . The reasons for which that comprehensive approach was adopted are explained in paragraph 112 of the contested regulation and were not themselves challenged by the applicant .
104 . This submission of the applicant must therefore also be rejected .
4 . Discrimination as a result of the application to Nashua and Ricoh of anti-dumping duty at a uniform rate
105 . Since the ad valorem duty is levied at a uniform rate of 20% on all imports of Ricoh PPCs irrespective of whether they are imported by subsidiaries related to Ricoh or by Nashua, the applicant maintains that it pays in absolute terms a much higher anti-dumping duty than those subsidiaries, inasmuch as its gross margin amounts to only 16% whereas the margin achieved by the related subsidiaries on their resales to distributors is 42 %. The applicant regards this state of affairs as an infringement of the principle forbidding discrimination .
106 . It is sufficient to point out that if there is any difference in treatment it is certainly not due to the contested regulation, which imposes the same rate of anti-dumping duty on all imports into the Community of Ricoh PPCs, but to Ricoh' s pricing policy in selling its photocopiers to its subsidiaries in the Community at a price lower than the selling price which it charges Nashua .
107 . Furthermore, I have already stated that the Council was not obliged to calculate a separate dumping margin for Ricoh products sold to Nashua . I also observed that the Council did not fix the rate of the anti-dumping duty at the level of the margins found to exist but at the level of the injury which the taxation of imports is intended to offset, and that it did not commit any manifest error or misuse its powers by taking account for that purpose of the entire range of imports of PPCs originating in Japan, rather than considering imports on a case-by-case basis according to the identity of the producer-exporter . In those circumstances the imposition of a uniform rate is not open to challenge per se . The imposition of several different rates on the product of a single producer by reference to the importer' s profit margin would also misconstrue the main aim of any anti-dumping duty, namely to remove the injury caused to Community producers, not to reduce or eliminate disparities between importers .
5 . Unlawful rejection of Nashua' s proposed undertaking
108 . Nashua puts forward three submissions to challenge the validity of the Commission' s decision - which the Council endorsed in paragraphs 92 and 100 of its regulation - rejecting the undertaking which it had offered .
109 . The applicant argues that the following were infringed :
( i ) Regulation No 2176/84;
( ii ) Article 190 of the Treaty;
( iii ) The principle of proportionality .
110 . In assessing the merits of those arguments we must take into consideration not only the wording of the two paragraphs cited above and the Commission' s further defence ( 9 ) of the reasons given therein for rejecting the undertaking, contained in its written pleadings in Case C-133/87 and in its written statement as intervener in Case C-150/87, but also of course the decision of 27 January 1987 rejecting the proposed undertaking and the Commission' s additional letter of 18 February 1987 .
( a ) Infringement of Regulation No 2176/84
111 . The Court has consistently held that no provision of Regulation No 3017/79, now Regulation No 2176/84, compels the institutions to accept price undertakings which are offered . On the contrary, it is clear from Article 10 thereof that it is for the institutions, in the exercise of their discretionary power, to determine whether such undertakings are acceptable . ( 10 ) It is thus incumbent upon applicants to demonstrate that the grounds on which an offer of an undertaking was rejected exceed the margin of discretion conferred on the institutions .
112 . According to Nashua, it follows from Article 10(2)(b ) that the Commission should begin by considering whether, if the offer were accepted, exports would decline to an extent sufficient to eliminate the injury caused by the dumped imports . It is not until the Commission has reached a decision on the effect of the undertaking that it can exercise a discretionary power in deciding whether or not to accept it .
113 . However, it is apparent from the Commission' s decision that it carefully examined the content of the undertaking itself but took the view that it was inappropriate to accept an undertaking from an OEM in those, or similar, circumstances . Like the Commission, I consider that it may be inferred from the wording of Article 10 of the regulation and from the fact that the Commission enjoys the margin of discretion discussed above that it is free to decline an offer on general grounds which are unrelated to the specific nature of that offer . Accordingly, where no offer has been made by the producer-exporter and an anti-dumping duty will therefore be imposed on the products which it manufactures, the Commission does not commit a manifest error in taking the view that the acceptance of an offer from an OEM would merely complicate matters to no avail .
114 . In any event, in this case the Commission has demonstrated during the written and oral procedure that the undertaking offered could not have brought about a diminution of exports to an extent sufficient to eliminate the harmful effects resulting from them . The Commission rightly pointed out that an undertaking must terminate an infringement and not merely mitigate it, whereas the undertaking offered by Nashua sought to stabilize the volume of imports at the level which they had reached during the most recent 12-month period for which figures were available . Nashua was therefore proposing merely to forgo any increase in imports in line with the anticipated growth of the photocopier market in Western Europe, estimated at a compound annual rate of 9.7% until 1990 . Furthermore, the proposed undertaking made no provision for price increases . Nashua' s contribution to the harmful effects of the importation of cheap PPCs from Japan would therefore have been at best stabilized, but not eliminated .
115 . I should like to add that the Council Decision of 9 February 1987, to which the applicant referred, accepting an undertaking given in connection with the anti-dumping proceeding concerning imports of paint -, distemper -, varnish - and similar brushes originating in the People' s Republic of China, and terminating the investigation ( 11 ) concerned a situation substantially different from the present one . The undertaking in question had been offered by an exporter, which was, moreover, an import/export organization of a State-trading country . In the decision the Council concluded that the effect of the undertaking would be to reduce exports in such a way as to eliminate the injury, and that it was clearly possible to monitor the proper functioning of the undertaking ( no doubt because all the exports originating in the People' s Republic of China came from that single source ).
116 . For all those reasons I propose that the Court should hold that the institutions have not infringed Article 10 of Regulation No 2176/84 .
( b ) Infringement of Article 190 of the Treaty
117 . The applicant claims that the statement of the reasons for the regulation is inadequate on several grounds . First, the institutions should have explained why the type of quantitative undertaking offered was not capable of remedying the injury caused .
118 . As I have explained above, the institutions were not obliged to give such reasons, but could reject the offer on grounds unrelated to its specific nature .
119 . In the event, the reason given by the Commission for the rejection was the inappropriateness of accepting undertakings from OEMs ( Decision of 27 January 1987 ), and the Council referred to the Commission' s traditional practice of not accepting undertakings from importers ( paragraph 100 of the contested regulation ).
120 . I have already observed that the institutions were entitled to regard OEMs as importers . The Commission pointed to Article 7 of the GATT Anti-Dumping Code, according to which undertakings can be given only by exporters .
121 . There can be no doubt that the Community institutions are entitled to interpret the Council regulation in the light of that code when the regulation admits of several interpretations on any given point . It is apparent from the second recital in its preamble that Regulation No 2176/84 was intended to comply with existing international obligations, in particular those arising under the GATT .
122 . The fact that on two occasions in the past the Commission has accepted undertakings offered by importers of a very special type, namely European sales subsidiaries of Japanese producer-exporters, or companies otherwise associated with Japanese producers, cannot oblige the Commission to act in the same way in the future, and still less to accept undertakings from importers who are not in that situation .
123 . During the procedure before the Court the Commission also explained that its attitude towards undertakings offered by importers was largely dictated by practical concerns, in particular difficulties in the effective monitoring of compliance with such undertakings . Those are considerations which clearly fall within the margin of discretion which the Court allows the institutions in this context .
124 . In this connection it may be recalled that in its judgments of 7 May 1987 the Court held that an adequate statement of reasons was afforded by the observation that
"past experience in the ball-bearing sector had shown that undertakings did not provide a satisfactory solution to the problems caused by instances of dumping in that sector ".
125 . If a simple allusion to the difficulties entailed by the acceptance of undertakings in a given sector is to be regarded as an adequate statement of reasons, the same must be true of a reference to the various drawbacks associated with the acceptance of undertakings from certain categories of economic agents such as importers, including OEMs .
126 . Accordingly, I take the view that the complaint that the statement of reasons is inadequate or incorrect is unfounded .
( c ) Infringement of the principle of proportionality
127 . According to the applicant, the undertaking offered would have eliminated any injury to Community producers, and the imposition of an anti-dumping duty does not confer any greater benefit than the solution proposed .
128 . The answer to that is that the principle of proportionality can operate only when the various solutions available are more or less equally effective for the attainment of the desired aim .
129 . In taking the view that Nashua' s offer to stabilize imports in absolute terms, without price increases, could not afford the same guarantees of the elimination of injury as an anti-dumping duty, the Council and the Commission remained within their margin of discretion and did not infringe the principle of proportionality .
Conclusion
On the basis of all the foregoing considerations I therefore propose that the Court should :
in Case C-133/87 :
dismiss the application as inadmissible and order the applicant to pay the costs .
in Case C-150/87 :
( i ) declare the application to be admissible but dismiss it as unfounded and order Nashua to pay its own costs and those of the interveners, the Commission and Cecom;
( ii ) order the Council to bear its own costs, pursuant to the first subparagraph of Article 69(3 ) of the Rules of Procedure, since it was unsuccessful in its submissions disputing the admissibility of the application .
(*) Original language : French .
( 1 ) OJ L 201, 30.7.1984, p . 1 .
( 2 ) OJ 24.2.1987, p . 12 .
( 3 ) Judgment of 11 November 1981 in Case 60/81 IBM v Commission (( 1981 )) ECR 2639 .
( 4 ) Case 150/87 Nashua Corporation and Others v Council and Commission (( 1987 )) ECR 4421 .
( 5 ) OJ L 239, 26.8.1986, p . 5 .
( 6 ) See for example the judgment of 7 May 1987 in Case 240/84 NTN Toyo Bearing v Council (( 1987 )) ECR 1809, paragraph 19 .
( 7 ) This word is underlined in the original text .
( 8 ) On the question of proof, see the judgment of 7 May 1987 in Case 255/84 Nachi Fujikoshi v Council (( 1987 )) ECR 1861, paragraph 33 .
( 9 ) See for example the judgment of 7 May 1987 in Case 256/84 Koyo Seiko v Council (( 1987 )) ECR 1918, paragraph 26 .
( 10 ) See in particular the judgment of 7 May 1987 in Case 256/84 Koyo Seiko v Council (( 1987 )) ECR 1918, paragraphs 26 and 27 .
( 11 ) OJ L 46, 14.2.1987, p . 45 .
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