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Judgment of the Court of 7 May 1991.

Nakajima All Precision Co. Ltd v Council of the European Communities.

C-69/89 • ECLI:EU:C:1991:186 • 61989CJ0069

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Nakajima All Precision Co. Ltd v Council of the European Communities.

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1. Measures adopted by the Community institutions - Application in time - Application of a new basic anti-dumping regulation to proceedings already in progress - Whether a specific statement of reasons is necessary - Not necessary if no new rules in relation to previous practice are introduced

(EEC Treaty, Art. 190; Council Regulation No 2423/88, Arts 2(3)(b)(ii) and 19(2))

2. International agreements - GATT - Possibility of relying on the GATT Anti-Dumping Code in order to contest the validity of the basic

anti-dumping regulation by means of an objection of illegality - Not dependent on the Code' s having direct effect

(EEC Treaty, Art. 184; Council Regulation No 2423/88; Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (1979 Anti-Dumping Code))

3. Common commercial policy - Protection against dumping practices - Dumping margin - Determination of the normal value - Method of establishing the constructed value - Conformity of provisions of the basic anti-dumping regulation with the GATT Anti-Dumping Code

(Council Regulation No 2423/88, Art. 2(3)(b)(ii); Agreement on

Implementation of Article VI of the General Agreement on Tariffs and Trade (1979 Anti-Dumping Code), Art. 2(4))

4. Action for annulment - Pleas in law - Infringement of essential procedural requirements - Breach by an institution of its rules of procedure - Plea submitted by a natural or legal person -

Inadmissible

(EEC Treaty, Art. 173, first and second paras)

5. Common commercial policy - Protection against dumping practices - Dumping margin - Determination of the normal value - Use of

constructed value - Order of priority to be followed as between different methods of calculation

(Council Regulation No 2423/88, Art. 2(3)(b)(ii))

6. Common commercial policy - Protection against dumping practices - Dumping margin - Determination of the normal value - Use of constructed value - Exporter not involved in the marketing of his products on the domestic market - Method of calculation - Reference to the expenses and profits of other producers or exporters selling on the domestic market - Whether lawful

(Council Regulation No 2423/88, Art. 2(3)(b)(ii))

7. Common commercial policy - Protection against dumping practices - Dumping margin - Comparison between the normal value and the export price - Comparison at the ex-factory level - Producer selling exclusively for exportation - Comparison at the level of the first sale to an independent purchaser

(Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (1979 Anti-Dumping Code, Art. 2(6))

8. Common commercial policy - Protection against dumping practices - Injury - Community production affected - Exclusion of certain producers - Producers importing the dumped product - Discretion enjoyed by the institutions - Conditions governing its exercise - Whether account to be taken of producers resorting to imports as a measure of self-defence

(Council Regulation No 2423/88, Art. 4(5))

9. Common commercial policy - Protection against dumping practices - Injury - Period to be taken into consideration - Discretion enjoyed by the institutions - Conditions governing its exercise

(Council Regulation No 2423/88, Art. 4(2)(c))

10. Common commercial policy - Protection against dumping practices - Anti-dumping duty - Ad valorem duty - Duty based on the net

free-at-Community-frontier price - Rate of duty determined on the basis of the injury threshold expressing the price increase necessary to offset the price-undercutting by the imported product - Injury threshold established by reference to the price charged to the first purchaser in the Community rather than to the free-at-frontier price - Need to convert the injury threshold arithmetically into a percentage of the export price at the c.i.f. level

(Council Regulation No 2423/88, Art. 13(2) and (3))

11. Community law - Principles - Rights of the defence - Compliance with those rights in the course of administrative proceedings -

Anti-dumping - Obligation on the institutions to accede to requests for information by the undertakings involved - Limits - Late requests or requests concerning confidential information

(Council Regulation No 2423/88, Arts 7(4)(c)(i)(cc) and 8(3))

12. Common commercial policy - Protection against dumping practices - Dumping margin - Determination of the normal value - Use of

constructed value - Discretion enjoyed by the institutions with regard to the method of calculation - Breach of the principle of legal certainty - None - Change in the method of calculation - Breach of the principles of the protection of vested rights and legitimate expectations - None

(Council Regulation No 2423/88, Art. 2(3)(b)(ii))

Summary

1. The wording of Article 2(3)(b)(ii) of the new basic anti-dumping Regulation No 2423/88 merely clarifies the scope of the rules laid down in the same article of the previous basic regulation by referring to the different methods of calculating the reasonable amount for selling, general and administrative expenses and the reasonable margin of profit to be applied in individual cases when the constructed value is determined, that clarification being designed to codify the previous practice of the Community institutions.

Thus, to the extent to which, precisely, the new wording of that provision cannot be regarded as a substantial alteration of the provision previously in force, its application, pursuant to the second paragraph of Article 19 of Regulation No 2423/88, to "proceedings already initiated" did not require a specific statement of reasons.

2. The possibility of calling in question, by means of an objection of illegality allowed by Article 184 of the Treaty, the validity of the basic anti-dumping regulation on the ground that it is at variance with an international agreement, namely the Anti-Dumping Code drawn up in 1979 within the framework of the GATT for the purpose of ensuring the implementation of Article VI thereof, does not presuppose that that agreement has direct effect. That possibility exists merely by virtue of the fact that the agreement is binding on the Community and it is established that by adopting the contested regulation the Community intended to comply with its international obligations.

3. Article 2(3)(b)(ii) of the basic anti-dumping Regulation No 2423/88 is in conformity with Article 2(4) of the GATT Anti-Dumping Code inasmuch as, without going against the spirit of the latter provision, it confines itself to setting out, for the various situations which might arise in practice, reasonable methods of calculating the constructed normal value of the product alleged to have been exported to the Community at dumping prices.

4. The purpose of the rules of procedure of a Community institution is to organize the internal functioning of its services in the interests of good administration. The rules laid down, particularly with regard to the organization of deliberations and the adoption of decisions, have therefore as their essential purpose to ensure the smooth conduct of the procedure while fully respecting the prerogatives of each of the members of the institution.

It follows that natural or legal persons may not rely on an alleged breach of those rules in support of an action for annulment since they are not intended to ensure protection for individuals.

5. It follows from the wording of Article 2(3)(b)(ii) of the basic

anti-dumping Regulation No 2423/88 that the three methods of calculating the constructed normal value there set out must be considered in the order in which they are presented. It is only in the case where none of those methods can be applied that recourse must be had to the general provision set out at the end of Article 2(3)(b)(ii), according to which expenses and profit may be calculated "on any other reasonable basis".

6. It is consistent with the scheme of both the Anti-Dumping Code and the basic anti-dumping regulation to calculate the constructed normal value of the products of an undertaking, which sells exclusively for the purposes of exportation and does not engage in the marketing of its own products on the domestic market of the country of origin or

exportation, by reference to the expenses and profits of other undertakings which sell their products on that domestic market, pursuant to the second method of calculation provided for in Article 2(3)(b)(ii) of the basic anti-dumping Regulation No 2423/88.

According to the scheme of the basic anti-dumping regulation, the purpose of constructing the normal value is to determine the selling price of a product as it would be if that product were sold in its country of origin or exportation. From this it follows that the normal value of a product must in all cases be constructed as if the product was intended for distribution and sale within the domestic market, regardless of whether or not the producer has, or has access to, a distribution structure for his products on the domestic market.

If the producer for whom a normal price is constructed sold his products on the domestic market, he would inevitably have to adapt to the conditions imposed on other undertakings operating on that market. There would therefore be discrimination between undertakings if the normal value for a producer operating on the domestic market were to be calculated on the basis of all the expenses and profits included in the price of the product in question whilst in the case of a producer disposing of his products exclusively by way of exportation the normal value were to be calculated without having regard to those accounting data.

7. In the case of a producer whose sales of the product which is the subject of the anti-dumping proceeding consist only of export sales, a correct comparison between the normal value and the export price at the ex-factory level, having regard also to the rules laid down in Article 2(6) of the Anti-Dumping Code, presupposes that those two values are compared at the level of the first sale to an independent purchaser.

8. When dealing with an anti-dumping proceeding, it is for the Commission and the Council, in the exercise of their discretion, to determine whether they should exclude from the Community industry producers who are themselves importers of the dumped product. That discretion, the exercise of which is subject only to the limitation that it must not constitute a manifest error, must be exercised on a case-by-case basis, by reference to all the relevant facts.

If the imports effected by Community undertakings were carried out as measures of self-defence to fill gaps in the range of products of the undertakings concerned brought about by their abandonment of their own production in certain sectors forced upon them by dumping practices, there is no reason to exclude those undertakings from the group of Community producers for the purpose of determining whether injury has occurred. In such a case, the Community producers who imported products did not intend to inflict injury on themselves by causing, through those imports, a reduction in the use of their own capacity, price falls or the abandonment of projects designed to increase their own production or the development of new products.

9. The Community institutions have a wide discretion when evaluating complex economic situations. This is so in particular when the period to be taken into consideration for the purposes of determining injury in an anti-dumping proceeding is determined.

The fact that the period selected is longer than that covered by the investigation into the existence of dumping practices does not

constitute an error of appraisal. According to Article 4(2)(c) of Regulation No 2423/88, an examination of injury presupposes a study of "actual or potential trends in the relevant economic factors" which must, therefore, be carried out over a sufficiently long period.

10. Since the definitive anti-dumping duties are imposed on the net

free-at-Community-frontier price before duty, that is to say on the customs value (c.i.f. price) of the imports, and determined by reference to the injury threshold, which corresponds to the amount by which the prices of the dumped products must be increased in order to offset the amount by which they undercut the prices of Community products, that injury threshold cannot be used as such to express the rate of duty when it is obtained by reference, not to the free-at-Community-frontier price (the c.i.f. price), but to the price to the first independent buyer in the Community, inasmuch as the latter price will necessarily be higher than the c.i.f. price because it includes customs duties and charges. In such a situation, in order to determine the rate of the anti-dumping duty to be imposed, the injury threshold must be converted arithmetically into a percentage of the price of each exporter at c.i.f. level.

11. In an anti-dumping proceeding, an undertaking cannot complain that the Community institutions infringed its rights of defence by failing to provide it with all information which it had requested when its request had been received after the expiry of the period of one month following imposition of the provisional duty laid down in Article 7(4)(c)(i)(cc) of Regulation No 2423/88 and concerned details relating to the costs and profits of its competitors, which constitute confidential

information under Article 8(3) of that regulation and could not be divulged to it.

12. The basic anti-dumping regulation allows the Community institutions a margin of discretion, particularly in calculating the amount of the selling, general and administrative expenses to be included in the constructed normal value, and the fact that an institution exercises that discretion without explaining in detail and in advance the criteria which it intends to apply in every specific situation does not constitute a breach of the principle of legal certainty.

Likewise, the principles of the protection of vested rights and legitimate expectations are not breached where, for the purpose of calculating that value, the Community institutions use a different method from that applied previously to the same undertaking during an earlier proceeding.

Parties

In Case C-69/89,

Nakajima All Precision Co. Ltd, a company incorporated under Japanese law, whose registered office is in Tokyo, repesented by C.-E. Gudin, of the Paris Bar and also established in Brussels, with an address for service in

Luxembourg at the Chambers of R. Faltz, 6 Rue Heine,

applicant,

v

Council of the European Commmunities, represented by H.-J. Lambers, Director in its Legal Department, and E.H. Stein, Legal Adviser, acting as Agents, assisted by J. Voillemot and A. Michel, of the Paris Bar, with an address for service in Luxembourg at the office of J. Kaeser, Manager of the Legal Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer, Kirchberg,

defendant,

supported by the

Commission of the European Communities, represented by E. de March and Eric White, members of its Legal Department, acting as Agents, assisted by R. Wagner, a German civil servant on secondment to the Commission' s Legal Department under the exchange scheme for national civil servants, with an address for service in Luxembourg at the office of G. Berardis, a member of the Commission' s Legal Department, Wagner Centre, Kirchberg,

and by the

Committee of European Printer Manufacturers (Europrint), whose registered office is in Cologne (Federal Republic of Germany), represented by D. Ehle, Rechtsanwalt, Cologne, with an address for service in Luxembourg at the Chambers of Messrs Arendt & Harles, 4 Avenue Marie-Thérèse,

interveners,

APPLICATION for:

(i) a declaration, pursuant to Article 184 of the EEC Treaty, that Articles 2(3)(b)(ii) and 19 of Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or subsidized imports from countries not members of the European Economic Community (Official Journal 1988 L 209, p. 1) are not applicable to the applicant, and

(ii) a declaration, pursuant to the second paragraph of Article 173 of the EEC Treaty, that Council Regulation (EEC) No 3651/88 of 23 November 1988 imposing a definitive anti-dumping duty on imports of

serial-impact dot-matrix printers originating in Japan (Official Journal 1988 L 317, p. 33) is void in so far as it concerns the applicant,

THE COURT,

composed of: O. Due, President, G.F. Mancini, T.F. O' Higgins, J.C. Moitinho de Almeida, G.C. Rodríguez Iglesias and M. Díez de Velasco (Presidents of Chambers), C.N. Kakouris, F.A. Schockweiler, F. Grévisse, M. Zuleeg and P.J.G. Kapteyn, Judges,

Advocate General: C.O. Lenz,

Registrar: D. Louterman, Principal Administrator,

having regard to the Report for the Hearing,

after hearing the parties submit oral argument at the hearing on 5 July 1990,

after hearing the opinion of the Advocate General delivered at the sitting on 5 December 1990,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 7 March 1989, Nakajima All Precision Co. Ltd (hereinafter referred to as "Nakajima"), whose registered office is in Tokyo, brought an action seeking

(i) a declaration, pursuant to Article 184 of the EEC Treaty, that Articles 2(3)(b)(ii) and 19 of Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or

subsidized imports from countries not members of the European Economic Community (Official Journal 1988 L 209, p. 1) are not applicable to it, and

(ii) a declaration, pursuant to the second paragraph of Article 173 of the EEC Treaty, that Council Regulation (EEC) No 3651/88 of 23 November 1988 imposing a definitive anti-dumping duty on imports of serial-impact dot-matrix printers originating in Japan (Official Journal 1988 L 317, p. 33) is void in so far as it concerns the applicant.

2 Nakajima, which manufactures only typewriters and printers, produces four models of bottom-of-the-range serial-impact dot-matrix printers. According to the applicant, particular features of its business are that it is engaged exclusively in production and has no distribution or sales structure. It claims that it has only a limited number of customers and that it begins production only once it has received orders, so that its production costs are very low. In addition, it claims that it is now several years since it sold printers on the Japanese market and that its production is destined exclusively for export. Most of its printers are sold as Original Equipment Manufacture (hereinafter referred to as "OEM") to foreign manufacturers or independent distributors who market the products under their own brand names, and the remainder of its production is also marketed by independent distributors under the brand name "All". Nakajima points out that in 1986 the EEC market accounted for 41.7% of its printer sales.

3 In 1987, the Committee of European Printer Manufacturers (hereinafter referred to as "Europrint") lodged with the Commission, on behalf of European manufacturers of serial-impact dot-matrix printers, a complaint in which it requested that an anti-dumping proceeding be initiated in respect of Japanese exporters of that type of printer, including Nakajima.

4 The anti-dumping proceeding was initiated by the Commission on the basis 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 (Official Journal 1984 L 201, p. 1, hereinafter referred to as "the former basic regulation"). That proceeding resulted in the adoption, pursuant to the former basic regulation, of Commission Regulation (EEC) No 1418/88 of 17 May 1988 imposing a provisional anti-dumping duty on imports of serial-impact dot-matrix printers originating in Japan (Official Journal 1988 L 130, p. 12, hereinafter referred to as "the regulation imposing the

provisional duty"). That regulation imposed on Nakajima a provisional anti-dumping duty of 12.3%.

5 On 11 July 1988, the Council adopted Regulation No 2423/88, cited above (hereinafter referred to as "the new basic regulation"), which replaced the former basic regulation. The new basic regulation entered into force on 5 August 1988 and applies, according to the second paragraph of Article 19, "to proceedings already initiated".

6 Pursuant to the new basic regulation, the Council, on 23

September 1988, adopted Regulation (EEC) No 2943/88 (Official Journal 1988 L 264, p. 56) extending the provisional anti-dumping duty on imports of serial-impact dot-matrix printers originating in Japan for a period not exceeding two months.

7 Following a proposal by the Commission and pursuant to the new basic regulation, the Council, on 23 November 1988, adopted Regulation No 3651/88, cited above (hereinafter referred to as "the regulation imposing the definitive duty"). Under that regulation, which entered into force on 25 November 1988, the definitive rate of anti-dumping duty applicable to Nakajima was fixed at 12% and the amounts secured by way of provisional anti-dumping duty under the regulation imposing the provisional duty were to be collected at the rate of duty definitively imposed.

8 By an application lodged at the Court Registry on 6 April 1989, Nakajima applied for the adoption of interim measures, seeking, in the first place, suspension of the application to it of the regulation imposing the definitive duty and, in the alternative, any other interim measures which might prove necessary until the Court had ruled on the substance of the case. That application was dismissed by order of the President of the Court of 8 June 1989.

9 By orders of the Court of 17 May and 4 October 1989 respectively, the Commission and Europrint were given leave to intervene in support of the forms of order sought by the Council.

10 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the pleas in law and arguments of the parties, which are mentioned or referred to hereinafter only in so far as is necessary for the

reasoning of the Court.

I - The claim for a declaration that the new basic regulation is

inapplicable to the applicant

11 In support of its claim that Articles 2(3)(b)(ii) and 19 of the new basic regulation should be declared inapplicable to it, Nakajima submits three pleas in law: infringement of essential procedural requirements, breach of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (hereinafter referred as "the Anti-Dumping Code"), approved on behalf of the Community by Council Decision 80/271/EEC of 10 December 1979 concerning the

conclusion of the Multilateral Agreements resulting from the 1973 to 1979 trade negotiations (Official Journal 1980 L 71, p. 1) and, finally, breach of certain general principles of law.

1. The plea that the new basic regulation is unlawful on account of the infringement of essential procedural requirements

12 In support of this plea in law, Nakajima argues first of all that Article 2(3)(b)(ii) of the new basic regulation is vitiated by

illegality for lack of reasoning.

13 The applicant argues in this regard that Article 2(3)(b)(ii) introduces a new method of calculating the constructed normal value, differing fundamentally from that applicable under the former basic regulation, in the case where there are no sales of like products in the ordinary course of trade on the domestic market of the exporting country or country of origin. The new method, which takes account, for the purpose of calculating the constructed normal value, of the expenses incurred and the profits realized by other producers and exporters in the exporting country or country of origin on profitable sales of the like product, is likely to lead to unreasonable and discriminatory results in a case such as this in which the structure of the reference undertakings is in no respect comparable to that of the undertaking concerned. Nakajima stresses that it does not have any marketing structure for its products as its entire production output is sold at the "ex-factory" stage to independent distributors, whereas all of the reference undertakings have a vertically-integrated structure designed to ensure distribution of their products within Japan. From this Nakajima concludes that the Council ought to have specified in the new basic regulation the reasons why it adopted this new method of calculation and ought to have explained how the application of that method did not involve discrimination against undertakings such as Nakajima.

14 On this point, it should be noted first of all that the Court has consistently held (see, in particular, the judgment in Case C-156/87 Gestetner Holdings plc v Council and Commission [1990] ECR I-781, at paragraph 69) that the statement of reasons required by Article 190 of the Treaty must disclose in a clear and unequivocal fashion the reasoning followed by the Community authority which adopted the measure in question in such a way as to make the persons concerned aware of the reasons for the measure and thus enable them to defend their rights, and to enable the Court to exercise its supervisory jurisdiction.

15 Next, it should be noted that Article 2(3)(b)(ii), as it appears in both the former and new basic regulations, sets out the methods of calculating the constructed normal value of the product concerned 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. The constructed normal value is determined by adding together the cost of production and a reasonable margin of profit.

16 In the version contained in the former basic regulation, the cost of production was to be increased by a reasonable amount for selling, general and administrative expenses (hereinafter referred to as "SGA expenses"). The profit was not to exceed the normal profit where sales of products of the same category on the domestic market of the country of origin were normally profitable; in other cases, the text provided that the profit was to be "determined on any reasonable basis, using available information".

17 After adopting the same method of calculating the cost of production as the former basic regulation, the new basic regulation goes on to provide that the SGA expenses and profit are to be

calculated by reference to the expenses incurred and the profit realized by the producer or exporter on the profitable sales of like products on the domestic market (third sentence of Article 2(3)(b)(ii)) and that, if such data are unavailable or unreliable or are not suitable for use, they are to be calculated by reference to the expenses incurred and profit realized by other producers or exporters in the country of origin or export on profitable sales of the like product (fourth sentence of Article 2(3)(b)(ii)). The new basic regulation adds that, if neither of those two methods can be applied, the expenses incurred and the profit realized are to be calculated by reference to the sales made by the exporter or other producers or exporters in the same business sector in the country of origin or export or on any other reasonable basis.

18 It will be evident from a comparison of the two versions of Article 2(3)(b)(ii) in the former and new basic regulations that the method of calculating the constructed normal value set out in the latter regulation does not differ substantially from the earlier method, which left full discretion to the Community authorities by providing for the calculation of SGA expenses and profits on a

"reasonable" basis. The amended wording of the provision in question in the new basic regulation simply sets out more clearly the scope of the previous version by referring to the different methods of

calculation designed to determine the "reasonable amount" for SGA expenses and the "reasonable margin of profit" in individual cases.

19 That conclusion is borne out by the fourth and thirty-third recitals in the preamble to the new basic regulation, which present the new wording of Article 2(3)(b)(ii) as a mere clarification of the version of that provision in the former basic regulation. Furthermore, the Council pointed out, without being contradicted, that the method of calculation to which Nakajima takes exception in the present case had already been applied by the Community authorities under the former basic regulation. Moreover, the Court has already ruled that there was nothing in Article 2(3)(b)(ii) of the former basic regulation which precluded the use of the profit normally realized by a company other than the one to which the anti-dumping investigation related as the reasonable margin of profit (judgment in Case 301/85 Sharp Corporation v Council [1988] ECR 5813, at paragraph 8).

20 So far as concerns the alleged failure to state reasons in explanation of the discriminatory effect which, in Nakajima' s view, the application of Article 2(3)(b)(ii) of the new basic regulation might entail, it is sufficient to point out that Article 190 of the Treaty does not require the Community authorities to justify specifically every provision which may result in discrimination, since a breach of the principle of equal treatment constitutes an independent ground for annulment of the provision in question.

21 In those circumstances, the first part of the plea in law, alleging a lack of a statement of reasons for Article 2(3)(b)(ii) of the new basic regulation, must be rejected.

22 Nakajima submits, in the second place, that Article 19 of the new basic regulation, which provides that the regulation is to apply "to proceedings already initiated" on the day of its entry into force, does not set out the grounds on which it is based in so far as it fails to specify the reasons which would justify the retroactive application of that regulation. In support of this argument, the applicant contends that Article 2(3)(b)(ii) of the new basic regulation, by amending fundamentally the method of calculating the constructed value, introduces new substantive rules which cannot be applied retroactively in the absence of a specific statement of reasons.

23 In this connection, it suffices to recall, as the Court found with regard to the first part of Nakajima' s plea, that Article 2(3)(b)(ii) of the new basic regulation is no more than a clarification designed to codify the previous practice of the Community institutions. Thus, to the extent to which, precisely, the new wording of that provision could not be regarded as a substantial alteration of the provision previously in force, its application "to proceedings already initiated" did not require a specific statement of reasons.

24 In those circumstances, the second part of the plea in law, based on the absence of a statement of reasons for Article 19 of the new basic regulation, is also without foundation.

25 It follows from the foregoing that the plea that the new basic regulation is unlawful on account of the infringement of essential procedural requirements must be rejected.

2. The plea that the new basic regulation is unlawful for being in breach of the Anti-Dumping Code

26 Nakajima submits in this regard that Article 2(3)(b)(ii) of the new basic regulation cannot be applied in the present case because it is at variance with a number of the provisions in the Anti-Dumping Code. In particular, the applicant argues that Article 2(3)(b)(ii) is incompatible with Article 2(4) and (6) of the Anti-Dumping Code.

27 The Council takes the view that, as is the case with the General Agreement, the Anti-Dumping Code does not confer on individuals rights which may be relied on before the Court and that the provisions of that Code are not directly applicable within the Community. From this the Council concludes that Nakajima cannot place in question the validity of the new basic regulation on the ground that it may be in breach of certain provisions in the Anti-Dumping Code.

28 It should, however, be pointed out that Nakajima is not relying on the direct effect of those provisions in the present case. In making this plea in law, the applicant is in fact questioning, in an incidental manner under Article 184 of the Treaty, the applicability of the new basic regulation by invoking one of the grounds for review of legality referred to in Article 173 of the Treaty, namely that of infringement of the Treaty or of any rule of law relating to its application.

29 It ought to be noted in this regard that, in its judgment in Joined Cases 21 to 24/72 International Fruit Company NV and Others v Produktschap voor Groenten en Fruit [1972] ECR 1219, the Court ruled (at paragraph 18) that the provisions of the General Agreement had the effect of binding the Community. The same conclusion must be reached in the case of the Anti-Dumping Code, which was adopted for the purpose of implementing Article VI of the General Agreement and the recitals in the preamble to which specify that it is designed to "interpret the provisions of ... the General Agreement" and to "elaborate rules for their application in order to provide greater uniformity and certainty in their implementation".

30 According to the second and third recitals in the preamble to the new basic regulation, it was adopted in accordance with existing international obligations, in particular those arising from Article VI of the General Agreement and from the Anti-Dumping Code.

31 It follows that the new basic regulation, which the applicant has called in question, was adopted in order to comply with the

international obligations of the Community, which, as the Court has consistently held, is therefore under an obligation to ensure

compliance with the General Agreement and its implementing measures (see the judgments in Case 104/81 Hauptzollamt Mainz v Kupferberg [1982] ECR 3641, at paragraph 11, and in Case 266/81 SIOT v Ministero delle Finanze and Others [1983] ECR 731, at paragraph 28).

32 In those circumstances, it is necessary to examine whether the Council went beyond the legal framework thus laid down, as Nakajima claims, and whether, by adopting the disputed provision, it acted in breach of Article 2(4) and (6) of the Anti-Dumping Code.

33 Nakajima first of all argues in this connection that Article 2(3)(b)(ii) of the new basic regulation infringes Article 2(4) of the Anti-Dumping Code in so far as, by providing (in order to determine the constructed normal value) for account to be taken of the SGA expenses and profits of producers or exporters whose structures may be radically different from those of the undertaking in question, Article 2(3)(b)(ii) limits the discretion of the Community authorities and results in account being taken of accounting data which are not reasonable within the meaning of Article 2(4) of the Anti-Dumping Code.

34 Article 2(4) of the Anti-Dumping Code provides as follows:

"When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation, such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to any third country which may be the highest such export price but should be a representative price, or with the cost of production in the country of origin plus a reasonable amount for administrative, selling and any other costs and for profits. As a general rule, the addition for profit shall not exceed the profit normally realized on sales of

products of the same general category in the domestic market of the country of origin".

35 It follows clearly from the wording of Article 2(3)(b)(ii) of the new basic regulation that each of the methods of calculating the constructed normal value there listed must be applied in such a way as to keep the calculation reasonable, an idea which is also expressly mentioned in the first two sentences and the final sentence of that provision.

36 According to Article 2(3)(b)(ii), it is thus necessary to set aside the first method of calculation, referred to in the new basic regulation, in favour of the second method, at issue in the present case, if data on the expenses incurred and the profit realized by the producer or exporter on the sales of like products on the domestic market "is unavailable or unreliable or is not suitable for use", which means, in essence, that the taking of such accounting data into consideration would not be reasonable - a word which is expressly used in the German version of the provision in question. The search for reasonableness in the method of calculation also governs the

application of the third method of calculation set out in the provision in question, which may be implemented only "if neither of these two [previous] methods can be applied". Finally, apart from the

application of this third method, the Community authorities may always determine expenses and profits "on any other reasonable basis" pursuant to the final sentence of the provision; the use of the word "other" in this context confirms that, in any event, the calculation of the constructed value may be made only if it is reasonable in nature.

37 It thus follows that Article 2(3)(b)(ii) of the new basic regulation is in conformity with Article 2(4) of the Anti-Dumping Code inasmuch as, without going against the spirit of the latter provision, it confines itself to setting out, for the various situations which might arise in practice, reasonable methods of calculating the

constructed normal value.

38 Secondly, Nakajima argues that Article 2(3)(b)(ii) of the new basic regulation is incompatible with Article 2(6) of the Anti-Dumping Code in so far as the application to a simple economic production unit of the SGA expenses incurred and the profit realized by other

undertakings with vertically-integrated distribution structures fails to comply with the obligation to establish the comparison between the normal value and the export price at the same level of trade.

39 In order to examine whether that argument is well founded, it should be recalled that Article 2(6) of the Anti-Dumping Code provides as follows:

"In order to effect a fair comparison between the export price and the domestic price in the exporting country (or the country of origin) or, if applicable, the price established pursuant to the provisions of Article VI(1)(b) of the General Agreement, the two prices shall be compared at the same level of trade, normally at the ex-factory level, and in respect of sales made at as nearly as possible the same time. Due allowance shall be made in each case, on its merits, for the differences in conditions and terms of sale, for the differences in taxation, and for the other differences affecting price comparabilty. ...".

40 It suffices to point out in this regard that Nakajima' s argument alleging incompatibility of Article 2(3)(b)(ii) of the new basic regulation with Article 2(6) of the Anti-Dumping Code lacks any relevance in view of the fact that the objectives of the two provisions cited by the applicant are fundamentally different.

41 The objective of Article 2(3)(b)(ii) of the new basic regulation is to determine the constructed normal value of the product in

question, whereas Article 2(6) of the Anti-Dumping Code lays down the rules to be complied with when a comparison is made between the normal value and the export price. That comparison is dealt with in Article 2(9) and (10) of the new basic regulation; however, the applicant has not in any way called in question the validity of those provisions on the ground that they fail to comply with Article 2(6) of the

Anti-Dumping Code.

42 For those reasons, the plea in law alleging that the new basic regulation is unlawful for being in breach of the Anti-Dumping Code must also be rejected.

3. The plea that the new basic regulation is unlawful on the ground that it is in breach of certain general principles of law

43 In support of this plea in law, the applicant contends first of all that the Commission infringed the rights of the defence in several respects during the course of this anti-dumping proceeding. It then goes on to argue that the principle of legal certainty was infringed in the present case through the application of the second method of calculating the constructed normal value set out in Article 2(3)(b)(ii) of the new basic regulation, whereas in an earlier case the Community authorities had recognized the applicant' s special economic structure and had for that reason closed the anti-dumping proceeding initiated against it. Finally, Nakajima alleges infringement of the principle of equal treatment inasmuch as the application of the method of

calculating the constructed normal value chosen in this case

discriminated against it in view of the fact that account was taken of accounting data relating to undertakings with structures different from its own.

44 It is sufficient to note in this regard that the applicant, by this plea in law, is in fact criticizing the application by the Community authorities of Article 2(3)(b)(ii) of the new basic

regulation in the anti-dumping proceeding which resulted in the adoption of the regulations imposing the provisional and definitive duties. Such arguments, however, cannot be relied on to call in question the validity of a regulation under Article 184 of the Treaty.

45 In those circumstances, the plea that the new basic regulation is illegal for infringement of certain general principles of law must be rejected.

46 Since none of the pleas in law submitted in support of the claim for a declaration that the new basic regulation is inapplicable has proved capable of being upheld, that claim must be dismissed as being unfounded.

II - The claim for the annulment of the regulation imposing the definitive duty

47 Nakajima bases its claim for the annulment of the regulation imposing the definitive duty on ten pleas in law: infringement of essential procedural requirements, incorrect definition of the like products taken into consideration, irregularities vitiating the calculation of the constructed normal value, errors in the comparison between the normal value and the export price, errors in the evaluation of the Community production of printers, errors relating to the injury suffered by the Community industry, errors relating to the Community' s interest in putting an end to the injury caused by dumping practices, errors relating to the amount of the anti-dumping duty, infringements of a number of general principles of law and misuse of powers.

1. The plea alleging infringement of essential procedural requirements

48 Nakajima contends first of all that the Council acted in breach of Articles 2 and 8 of its Rules of Procedure (Official Journal 1979 L 268, p. 1) because the Commission proposal for the adoption of the regulation imposing the definitive duty was communicated to the Council outside the period laid down for the drawing-up of the provisional agenda for the meeting and because not all the language versions of the document in question were available on the day when the regulation was adopted.

49 With regard to this point, it should be noted that the purpose of the rules of procedure of a Community institution is to organize the internal functioning of its services in the interests of good