On December 4, 2024, the General Court of the European Union delivered two judgments in cases T-245/22 and T-246/22, opposing a Moroccan company, a subsidiary of a Chinese group, against the European Commission.
These cases originated from two anti-dumping and anti-subsidy investigations opened by the European Commission concerning certain woven or stitched glass fiber fabrics originating from China, which concluded with the imposition of anti-dumping and countervailing duties in June 2020. One year later, an investigation regarding a possible circumvention of these duties through Morocco was initiated.
The investigation period covered January 2019 to December 2020. Before 2019, no imports of these fabrics from Morocco had been registered in the European Union. The Moroccan company, plaintiff in both judgments, contested this extension of duties and requested an exemption.
The company attempted to demonstrate that the transformation implemented in Morocco could not be classified as an assembly operation and that it was economically justified in itself.
In December 2021, the Commission recommended extending the countervailing measures applicable to imports originating from China and Egypt to imports shipped from Morocco and rejected the applicant’s request for exemption from these duties. Finally, in February 2022, the Commission adopted the implementing regulation extending the duties.
Indeed, Article 13 of the Anti-dumping Regulation No. 2016/1036 and Article 23 of the Anti-subsidy Regulation No. 2016/1037 target the circumvention of anti-dumping and anti-subsidy measures through simple assembly in the Union or in a third country.
These same articles establish conditions for analyzing such assembly operations: they must not have begun or significantly intensified after the opening of an investigation; the parts originating from the country subject to measures must not constitute more than 60% of the total value of the parts of the merchandise, unless the value added to the parts incorporated during the assembly operation or completion of manufacture is greater than 25% of the manufacturing cost.
In its judgments, the Court confirms the Commission’s position and rejects all of the applicant’s claims. The judges verified the period of imports from Morocco and analyzed the added value of the assembly operations. In conclusion, the simple relocation from Chinese territory to Moroccan territory at the time of the anti-dumping and anti-subsidy investigations, without economic justification or added value exceeding the threshold of 25% of the manufacturing cost, is a circumvention practice.
For more information, the link to the judgments: TUE, T-245/22, 4 décembre 2024, extension du droit antidumping et TUE, T-246/22, 4 décembre 2024, extension du droit antidumping
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