Summary of key findings
The European Union appealed certain of the Panel’s findings under Articles 6.2, 6.4, 6.5, 6.5.1, 6.10, 9.2, and 18.4 of the Anti-Dumping Agreement, Article I:1 of the GATT 1994, and Article XVI:4 of the WTO Agreement. China cross-appealed certain other findings of the Panel under Articles 2.4, 3.1, 4.1, 6.1.1, 6.2, 6.4, 6.5, and 6.5.1 of the Anti-Dumping Agreement.
The Appellate Body upheld the Panel’s findings that Article 9(5) of the European Union’s Basic Anti‑Dumping Regulation (the “Basic AD Regulation”) was inconsistent “as such”, and “as applied” in the fasteners investigation, with Articles 6.10 and 9.2 of the Anti-Dumping Agreement because it conditions the determination of individual dumping margins, and the imposition of individual anti‑dumping duties, on the fulfilment of an “Individual Treatment Test”. Under Article 9(5) of the Basic AD Regulation, an exporter or producer from a WTO Member designated as a non-market economy country (“NME”) under EU law, like China, will receive a country-wide dumping margin and a country-wide anti-dumping duty unless it can demonstrate that its export activities are sufficiently independent from the State to warrant individual treatment. The European Union argued that country-wide margins and duties were justified because, in NME countries, the State itself can be considered the country’s single exporter. The Appellate Body agreed with the Panel that Article 6.10 of the Anti‑Dumping Agreement requires an investigating authority to calculate individual dumping margins for each foreign exporter or producer, and that Article 9(5) of the Basic AD Regulation does not fall under any applicable exception to this rule. Similarly, the Appellate Body agreed with the Panel that Article 9.2 requires the imposition of an anti-dumping duty on each foreign exporter or producer named in an investigation, and that no exception to this rule applied to Article 9(5) of the Basic AD Regulation. Moreover, the Appellate Body did not consider that the purpose of Article 9(5) of the Basic AD Regulation was to identify a single State exporter on whom to impose a single anti‑dumping duty.
Under Article 4.1 of the Anti-Dumping Agreement, the Appellate Body found that the European Union acted inconsistently with its obligations because the domestic industry defined by the European Commission did not constitute producers whose production represented a “major proportion” of the total domestic production within the meaning of Article 4.1. The Appellate Body found that the Commission failed to ensure that the domestic industry definition would not introduce a material risk of distortion to the injury analysis by defining the domestic industry as comprising producers accounting for 27 per cent of total estimated EU production of fasteners, and by including only those producers who were willing to be part of the sample for purposes of the Commission’s injury determination.
The Appellate Body upheld the Panel’s findings under Articles 6.2 and 6.4 of the Anti-Dumping Agreement that the European Union failed to disclose in a timely manner information regarding product categorizations that was necessary for the presentation of the Chinese producers’ case in the dumping determination and for the defence of their interests. The Appellate Body also found that the European Union’s failure to disclose such information was inconsistent with its obligation under Article 2.4 of the Anti-Dumping Agreement to indicate to the parties to the investigation what information was necessary to ensure a fair comparison for purposes of the dumping determination.
Finally, the Appellate Body made several findings regarding procedural aspects of the fasteners investigation. The Appellate Body upheld the Panel’s finding that the European Union did not act inconsistently with its obligations under Article 6.1.1 of the Anti-Dumping Agreement when it allowed Chinese exporters and producers less than 30 days to reply to the Market Economy Treatment and/or Individual Treatment Claim Form. The Appellate Body also upheld the Panel’s finding that the European Union acted inconsistently with Article 6.5.1 of the Anti-Dumping Agreement by failing to ensure that domestic producers provide appropriate statements of the reasons why confidential information was not susceptible of non-confidential summary, and that the European Union did not act inconsistently with Article 6.5 of the Anti-Dumping Agreement when it treated the identity of the complainants and the supporters of the complaint as confidential information. The Appellate Body reversed the Panel’s finding that the European Union acted inconsistently with its obligations under Article 6.5 when it treated information submitted by the analogue country producer participating in the investigation as confidential without requiring a “good cause” showing, and found instead that China had failed to substantiate this claim before the Panel.