Asia Leader International (Cambodia) Co. Ltd v European Commission (T-462/15)

Contents

Judgment of the General Court (Seventh Chamber)19 April 2018^note(Dumping — Imports of bicycles consigned from Cambodia, Pakistan and the Philippines — Extension to such imports of the definitive anti-dumping duty imposed on imports of bicycles originating in China — Regulation (EU) 2015/776 — Circumvention — Transhipment — Article 13(1) and (2) and Article 18(3) of Regulation (EC) No 1225/2009 (now Article 13(1) and (2) and Article 18(3) of Regulation (EU) 2016/1036))In Case T‑462/15,Asia Leader International (Cambodia) Co. Ltd, established in Tai Seng SEZ (Cambodia), represented by A. Bochon, lawyer, and R. MacLean, Solicitor,vEuropean Commission, represented by J.-F. Brakeland, M. França and A. Demeneix, acting as Agents,THE GENERAL COURT (Seventh Chamber),composed of V. Tomljenović, President, A. Marcoulli and A. Kornezov (Rapporteur), Judges,Registrar: C. Heeren, Administrator,having regard to the written part of the procedure and further to the hearing on 9 November 2017,gives the following

JudgmentOnly the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here.Only the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here. As regards those matters which are omitted, reference is made to the Judgment of the General Court of ..., .../... (T-..., EU:...).

Background to the dispute

1By Regulation (EEC) No 2474/93 of 8 September 1993 imposing a definitive anti-dumping duty on imports into the Community of bicycles originating in China and collecting definitively the provisional anti-dumping duty (OJ 1993 L 228, p. 1), the Council of the European Union imposed a definitive anti-dumping duty of 30.6% on imports of bicycles originating in China.

2Following an expiry review pursuant to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1) (replaced by Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ 2009 L 343, p. 51, corrigendum OJ 2010 L 7, p. 22; ‘the basic regulation’), itself replaced by Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ 2016 L 176, p. 21)), in particular pursuant to Article 11(2) of Regulation No 384/96 (now Article 11(2) of the basic regulation), the Council decided, by Regulation (EC) No 1524/2000 of 10 July 2000 imposing a definitive anti-dumping duty on imports of bicycles originating in China (OJ 2000 L 175, p. 39), that the abovementioned anti-dumping duty should be maintained.

3Following an interim review pursuant to Article 11(3) of Regulation No 384/96 (now Article 11(3) of the basic regulation), the Council, by Regulation (EC) No 1095/2005 of 12 July 2005 imposing a definitive anti-dumping duty on imports of bicycles originating in Vietnam, and amending Regulation (EC) No 1524/2000 (OJ 2005 L 183, p. 1), increased the anti-dumping duty on imports of bicycles originating in China to 48.5%.

4Following an expiry review pursuant to Article 11(2) of Regulation No 384/96, the Council decided, by Implementing Regulation (EU) No 990/2011 of 3 October 2011 imposing a definitive anti-dumping duty on imports of bicycles originating in China (OJ 2011 L 261, p. 2), that the anti-dumping duty in force should be maintained at 48.5%.

5In May 2013, following an interim review pursuant to Article 11(3) of the basic regulation (now Article 11(3) of Regulation 2016/1036), the Council adopted Regulation (EU) No 502/2013 of 29 May 2013 amending Implementing Regulation No 990/2011 (OJ 2013 L 153, p. 17) and decided to maintain the anti-dumping duty in force at 48.5%, except for bicycles exported by three companies to which individual duty rates were assigned.

6Following an anti-circumvention investigation pursuant to Article 13 of the basic regulation (now Article 13 of Regulation 2016/1036), the Council adopted Implementing Regulation (EU) No 501/2013 of 29 May 2013 extending the definitive anti-dumping duty imposed by Implementing Regulation No 990/2011 to imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, whether declared as originating in Indonesia, Malaysia, Sri Lanka and Tunisia or not (OJ 2013 L 153, p. 1).

7In 2014, the Commission received a new complaint concerning the possible circumvention of anti-dumping duties involving exporting producers of bicycles established in Cambodia, Pakistan and the Philippines. Thereafter, it adopted Implementing Regulation (EU) No 938/2014 of 2 September 2014 initiating an investigation concerning the possible circumvention of anti-dumping measures imposed by Council Regulation No 502/2013 on imports of bicycles originating in China by imports of bicycles consigned from Cambodia, Pakistan and the Philippines, whether declared as originating in Cambodia, Pakistan and the Philippines or not, and making such imports subject to registration (OJ 2014 L 263, p. 5, corrigendum OJ 2014 L 341, p. 31). In the course of that investigation, which covered the period from 1 January 2011 to 31 August 2014, the Commission sent the applicant, Asia Leader International (Cambodia) Co. Ltd, a ‘[f]orm for companies requesting an exemption from possible extended duties’ (‘the form’), which the applicant completed and returned on 10 October 2014.

8It is apparent from the documents before the Court that the applicant is a one-person limited liability undertaking governed by Cambodian law that was established in May 2013 and is wholly owned by Cronus International Co. Ltd, a company based in Hong Kong which, itself, is wholly owned by a Chinese bicycle manufacturer, Guangzhou Cronus Bicycle Fashion Sports Co. Ltd. The latter company also wholly owns the Chinese company Guangzhou Cronus Bicycles Co. Ltd, a manufacturer of bicycles, frames and painted frames, and is related to another Chinese bicycle manufacturer, Shine Wheel Bicycle Co. Ltd, which allegedly stopped production on 1 June 2014. The applicant did not state in tables D5 and D6 annexed to the form that it was also related to Shine Wheel Bicycle Co. It was not until 27 October 2014 — namely, in reply to the Commission’s deficiency letter of 16 October 2014 — that it provided information on that supplier.

9The applicant states that, in the light of the date on which it was established and commenced its actual business in January 2014, the information it provided in the form and in the tables annexed to that form was more directly concerned with the period between 1 September 2013 and 31 August 2014 (‘the reference period’) than the investigation period (see paragraph 7 above). The form shows that the applicant described its business as the production and sale of bicycles and bicycle frames, particularly for small orders, under the trade mark Cronus.

10In Table F2, which lists all purchases of semi-finished goods by the exemption applicant and is annexed to the form, the applicant mentioned the company ‘Shine Wheel Bicycle Co. Ltd (Guangzhou)’ as its almost exclusive supplier, alongside a Vietnamese company for frame painting and another Chinese company.

11In its reply of 27 October 2014, the applicant produced a revised Table F2. Shine Wheel Bicycle appears in that table as a company related to the applicant, whose sales to the applicant during the reference period represented the vast majority of the applicant’s purchases during that period. Guangzhou Cronus Bicycles is also mentioned in that table as a company related to the applicant in respect of certain transactions during the reference period.

12The investigation allowed the Commission to identify six companies that exported bicycles from Cambodia. One of those companies moved from Cambodia to Pakistan at the end of 2013. The other five bicycle producers, representing 94% of EU imports from Cambodia for goods of that type, cooperated and submitted a request for exemption.

13The Commission analysed the information sent by those five companies, which included the applicant. On 11 November 2014, the Commission informed the applicant of its intention to conduct a verification visit at its premises. The visit took place on 8 and 9 December 2014 at the applicant’s premises in Tai Seng (Cambodia).

14As a result of that on-the-spot verification and verifications targeting the other four producers that had cooperated, the Commission found that three companies were entitled to an exemption under Article 13(4) of the basic regulation (now Article 13(4) of Regulation 2016/1036) while the remaining two, including the applicant, were not.

15During the visit, the Commission identified several irregularities. It heard the additional explanations provided by the applicant concerning those anomalies and reviewed the documents supplied by it.

16First of all, the Commission observed that the applicant had no accounting software and that its accounting records were held on Excel files. It only began to draw up detailed production reports in October 2014.

17Next, according to the Commission, the form and tables annexed thereto show that the applicant was in a position to produce bicycles in its welding and painting departments only from 1 January 2014, and that at the beginning of that period, it did not manufacture frames. The Commission therefore enquired about the origin of 1099 bicycles exported to the European Union (in this instance, to Greece) on 27 January 2014, described in invoice CI‑15295-PM submitted by the applicant as follows: 380 26-inch aluminium frame bicycles; 240 26-inch steel frame bicycles; 120 24-inch steel frame bicycles; 119 ‘hi-ten steel frame 700C’ bicycles; 130 20-inch foldable steel frame bicycles; and 120 20-inch steel frame bicycles. When asked about the circumstances surrounding that export, the applicant submitted invoice KYD-CN-F01 dated 17 January 2014 showing that it had purchased 1098 26-inch steel bicycle frames from the Vietnamese company Kim Y Dinh Trading Service One Member Co. Ltd. The Commission pointed out that that company did not even produce bicycles or bicycle frames and that it was a mere trader. It also expressed surprise that only steel bicycle frames had been purchased, even though invoice CI‑15295-PM recorded the sale of 380 aluminium bicycles and that the sizes of those frames (26 inch) matched only in part the size of the bicycles exported to the European Union.

18The applicant was invited to explain those contradictions and during the visit produced a Form A certificate of origin issued by the Vietnamese Ministry of Commerce in the name of the trader in question for the bicycle frames forming the subject matter of invoice KYD-CN-F01. The Commission nonetheless found that that certificate of origin only mentioned steel frames, even though the export to the EU mentioned in paragraph 17 above also included aluminium frames, which the applicant subsequently admitted, indicating that the certificate was wrong to refer only to steel frames. In addition, the applicant was unable to produce any Form A certificate of origin in its name for the bicycles exported to the European Union forming the subject matter of invoice CI‑15295-PM.

19The Commission therefore considered that, since the applicant had not manufactured bicycle frames itself at the beginning of the start-up of its operations, the only possible explanation was that the bicycles in question had not been assembled by the applicant but had simply been transhipped from the Chinese companies related to it.

20Furthermore, during the verification visit, the Commission found that some of the data appearing in the form was inconsistent and unreliable. In its view, certain reported manufacturing costs did not correspond to a value added to the parts brought in during assembly or completion of production and had been artificially increased so as to meet the two thresholds established by Article 13(2)(b) of the basic regulation (now Article 13(2)(b) of Regulation 2016/1036). Thus, the allocation of certain costs (depreciation, rent and electricity expenses) to the manufacture of bicycle frames was inconsistent with the production volume of bicycles, the consumption of paint used in such manufacturing was overstated compared with the data of genuine bicycle producers and the labour costs were also too high in the light of the production volume of bicycle frames and assembled bicycles, again as compared with the salaries offered by genuine producers. The Commission therefore revised on that basis the applicant’s manufacturing costs and concluded, first, that the bicycle parts from China represented more than 60% of the total value of the parts of the assembled goods (77%) and, second, that the value added to the parts brought in during assembly was well below 25% (2%).

21On 13 March 2015, the Commission disclosed to the applicant its findings concerning, in the first place, the existence of circumvention practices in Cambodia (general findings) and, in the second place, the applicant’s role in those practices (specific findings).

22In reply to that disclosure, on 31 March 2015, the applicant submitted a number of objections in writing and at a hearing. First, it contested in particular the finding that it was involved in transhipment. It claimed that it was apparent from the information gathered during the on-the-spot verification that the most likely explanation was that the bicycle frames in question originated in Vietnam. The applicant provided additional supporting documentation, related to invoice CI‑15295-PM, to prove the Vietnamese origin of the bicycle frames. The applicant states that it therefore submitted, in particular, the invoice recording the purchase of the steel and aluminium used to make the bicycle frames; the invoice of the Vietnamese company which transformed the steel into frames; the invoice of the bicycle frame suppliers, bearing reference KYD-CN-F01, of 17 January 2014; the packing list of those frames, bearing the same date; proof of payment of that invoice; and evidence of the total mass of the bicycle frames shipped (approximately 3000 kg), which corresponded to the data provided in Table F2. The applicant explained that one bicycle frame was missing from the number of bicycles exported (1098 compared with 1099) because it had taken one bicycle frame from the supplier as a sample. Secondly, it disputed the Commission’s adjustments to its manufacturing costs for the purpose of calculating the 25% threshold of value added set out in Article 13(2)(b) of the basic regulation.

23On 18 May 2015, the Commission adopted Implementing Regulation (EU) 2015/776 extending the definitive anti-dumping duty imposed by Council Regulation (EU) No 502/2013 on imports of bicycles originating in the People’s Republic of China to imports of bicycles consigned from Cambodia, Pakistan and the Philippines, whether declared as originating in Cambodia, Pakistan and the Philippines or not (OJ 2015 L 122, p. 4, ‘the contested regulation’).

24The Commission inter alia found, in recitals 69, 71, 73 and 74 of the contested regulation, as follows:69 One of the five cooperating companies could not reconcile the data on the type of frames purchased from China with the data on the type of bicycles sold to the Union, while the company did not manufacture frames in that period. Therefore, it was concluded that bicycles were transhipped....71 It is recalled that, during the on-[the-]spot verification, the information provided by the company did not allow the Commission to reconcile the type of frames purchased with the type of bicycles exported to the Union, as the company showed purchases of frames of steel while it exported bicycles with frames of steel and aluminium of different sizes. This would indicate that the exported bicycles have not been assembled in Cambodia. Furthermore, the only evidence submitted during the on-[the-]spot verification by the company to show the origin of these frames was the Form A/Certificate of origin issued by Vietnamese authorities in the name of a Vietnamese trader. Following disclosure, the company claimed that the Form A/Certificate of origin wrongly indicated that all the frames were of steel when in fact they are also of aluminium. The new documents submitted by the company after disclosure, in Vietnamese and Chinese with limited translation into English, contained several inconsistencies (the quantity of frames purchased could not be reconciled with the number of bicycles exported as established during the on-[the-]spot verification; one document was submitted as an invoice but it did not include any prices; no evidence was submitted for the other manufacturing steps for the frames like cutting, forming, punching, and painting). These new documents were, therefore, considered incomplete and insufficient in order to show that the frames in question were produced in Vietnam....73 Moreover, the company was not able to provide the Form A/Certificate of origin from the Ministry of Commerce in Cambodia for the bicycles in question. Therefore, and in the absence of any other information available, it is concluded that the parts in question originated from China. …74 Therefore, on the basis of the evidence listed above, the existence in Cambodia of transhipment practices of Chinese-origin products within the meaning of Article 13(1) of the basic Regulation is established.’

25In recital 80 et seq. of the contested regulation, the Commission also dismissed the applicant’s objections to the adjustments made to its manufacturing costs for the purpose of calculating the 25% threshold of value added set out in Article 13(2)(b) of the basic regulation.

26It therefore rejected the applicant’s request for exemption (recital 161 of the contested regulation). In Article 1 of the contested regulation, the Commission decided to extend the definitive anti-dumping duty of 48.5% on imports of bicycles originating in China, mentioned in paragraph 3 above, to imports of bicycles consigned from, inter alia, Cambodia, and did not include the applicant in the list of companies exempted from the duty. Paragraph 3 of that article provides that ‘[t]he duty extended by paragraph 1 of this Article shall be collected on imports consigned from Cambodia, Pakistan and the Philippines, whether declared as originating in Cambodia, Pakistan and the Philippines or not, registered in accordance with Article 2 of Regulation (EU) No 938/2014 and Articles 13(3) and 14(5) of Regulation (EC) No 1225/2009 with the exception of those produced by the companies listed in paragraph 1’.

Procedure and forms of order sought

27The applicant brought the present action by application lodged at the Court Registry on 11 August 2015.[…]

42The parties presented oral argument and answered the questions put to them by the Court at the hearing on 9 November 2017.

43At the hearing, the applicant and the Commission submitted certain observations on the report for the hearing, formal note of which was made in the minutes of the hearing.

Law[…]

First plea in law: infringement of Article 13(1) of the basic regulation as a result of a manifest error of assessment in law and in fact on the part of the Commission in relation to the finding of circumvention and the nature of the data available

45In its first plea, the applicant argues that the finding of transhipment is wrong, as are the legal implications of that finding. It claims that the bicycles concerned were manufactured from frames and materials of Vietnamese origin and that the Commission had no evidence to the contrary. Furthermore, neither the basic Regulation nor the case-law allows the Commission to find by default the existence of transhipment. The applicant submits that it has proved to the requisite legal standard that the parts were of Vietnamese origin, supported by evidence that the Commission could not disregard, as it in fact did. It asserts that invoice CI‑15295-PM contains specific reference numbers for each model, enabling the material from which the frame was made to be identified. It also states that it provided the additional documents mentioned in paragraph 22 above. In addition, the applicant disputes the Commission’s assessment of the Form A certificate of origin, issued by the Vietnamese authorities, since that form mentioned the supplier’s invoice number, the invoice date, the number of units concerned, the gross mass of the consignment and the fact that it was inspected when crossing the border between Vietnam and Cambodia. Consequently, the only error in that certificate is the reference to ‘steel bicycle frames’, which the applicant previously explained, stating that it was a simple error on the part of the supplier.

46The applicant also states that the only inconsistency in the evidence it submitted concerned the different descriptions of the bicycles in invoice CI‑15295-PM, the frames forming the subject matter of invoice KYD-CN-F01 and of the Form A certificate of origin, and that all the other evidence shows that it had purchased bicycle frames of Vietnamese origin. It thus contends that the Commission’s analysis is tantamount to assuming that all non-Chinese producers related to Chinese bicycle producers are guilty of transhipment regardless of the facts of the case.

47The Commission therefore committed an error of assessment ‘in fact and in law’ in the application of Article 13(1) of the basic regulation.

48The Commission contends that the first plea should be dismissed.

Preliminary observations[…]

53Article 13(1) of the basic regulation provides that circumvention of anti-dumping measures is established when four conditions are met. First, there must be a change in the pattern of trade between a third country and the European Union or between individual companies in the country subject to measures and the European Union. Second, that change must stem from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. Third, there must be evidence of injury to EU industry or that the remedial effects of the anti-dumping duty are being undermined. Fourth, there must be evidence of dumping (judgments of 26 January 2017, Maxcom v Chin Haur Indonesia, C‑247/15 P, C‑253/15 P and C‑259/15 P, EU:C:2017:61, paragraph 55, and of 26 January 2017, Maxcom v City Cycle Industries, C‑248/15 P, C‑254/15 P and C‑260/15 P, EU:C:2017:62, paragraph 57).

54It is apparent from the wording and overall scheme of Article 13 of the basic regulation that, in order to establish circumvention, the institutions concerned must carry out an overall assessment of the third country that is the subject of the investigation in relation to the circumvention as a whole. On the other hand, they are not required, for the purpose of proving circumvention, to carry out an analysis of the situation of every individual producer-exporter, as that analysis is to be conducted by the individual producer-exporters themselves in the context of the requests made pursuant to Article 13(4) of the regulation (judgments of 26 January 2017, Maxcom v Chin Haur Indonesia, C‑247/15 P, C‑253/15 P and C‑259/15 P, EU:C:2017:61, paragraph 57, and of 26 January 2017, Maxcom v City Cycle Industries, C‑248/15 P, C‑254/15 P and C‑260/15 P, EU:C:2017:62, paragraph 59).

55Accordingly, under Article 13(1) of the basic regulation, it is the task of the EU institutions to establish that anti-dumping measures are being circumvented in respect of the third country in question as a whole, whereas it is for each individual producer-exporter to show that its particular situation justifies an exemption pursuant to Article 13(4) of the regulation (judgments of 26 January 2017, Maxcom v Chin Haur Indonesia, C‑247/15 P, C‑253/15 P and C‑259/15 P, EU:C:2017:61, paragraph 59, and of 26 January 2017, Maxcom v City Cycle Industries, C‑248/15 P, C‑254/15 P and C‑260/15 P, EU:C:2017:62, paragraph 61).

56Moreover, as Advocate General Mengozzi observed in his Opinion in Joined Cases Maxcom and Others v Chin Haur Indonesia (C‑247/15 P, C‑253/15 P and C‑259/15 P, EU:C:2016:712, points 7 and 67), the second subparagraph of Article 13(1) of the basic regulation (now the fourth subparagraph of Article 13(1) of Regulation 2016/1036) contains a non-exhaustive list of the practices, processes and work referred to in the first subparagraph. These include, inter alia, ‘the consignment of the product subject to measures via third countries’ and, ‘in the circumstances indicated in paragraph 2, the assembly of parts by an assembly operation in the [Union] or a third country’. As the Commission correctly stated in its reply of 13 October 2017 to the measure of organisation of procedure of 22 September 2017 (see paragraphs 38 and 39 above), the different sorts of circumvention practices listed in that second subparagraph of Article 13(1) appear only as examples, as illustrated by the words ‘inter alia’.

57It follows that it is sufficient that only one sort of circumvention practice be established in order for the second condition mentioned in paragraph 53 above to be fulfilled, which does not however prevent the institutions concerned establishing other sorts of circumvention practices where they consider them to be present.

Application to the present case

58It is apparent from the contested regulation that the Commission examined the four conditions referred to in paragraph 53 above in terms of Cambodia as a whole before, first, granting the individual requests for exemption submitted by three of the five Cambodian companies which had cooperated and, second, rejecting the individual requests lodged by the other two companies, including the applicant.

59First of all, as regards the first, third and fourth conditions, the Commission found that they were fulfilled, which the applicant does not contest.

60Next, as regards the second condition, namely the existence of circumvention practices in Cambodia, that is to say of practices, processes or work for which there is insufficient due cause or economic justification other than the imposition of the duty, the Commission found the existence of both transhipment practices and assembly operations not fulfilling the criteria laid down in Article 13(2) of the basic regulation.

61Admittedly, it is apparent from recitals 69 to 74 of the contested regulation that the finding of the existence of transhipment practices for Cambodia as a whole is based solely on the individual situation of the applicant. Nonetheless, it must be pointed out that the Commission also found the existence in Cambodia of assembly operations not fulfilling the criteria of Article 13(2) of the basic regulation as regards two Cambodian companies, including the applicant, as is apparent from recitals 75 to 88 of the contested regulation.

62Consequently, even on the assumption that the applicant was not involved in transhipment practices, which would have the effect of invalidating the existence of such practices for Cambodia as a whole, the finding, in relation to that country, of circumvention practices would remain valid on the basis of the grounds of the contested regulation relating to the assembly operations not fulfilling the criteria of Article 13(2) of the basic regulation as regards, at the very least, the other Cambodian company, the findings with respect to that company not being the subject of these proceedings.

63The first plea is not therefore capable of undermining the finding made in the contested regulation as to the existence of circumvention practices for Cambodia as a whole for the purposes of Article 13(1) of the basic regulation.

64It is now necessary to ascertain whether the first plea is well founded inasmuch as it seeks to show that transhipment practices on the part of the applicant did not exist.

65In that regard, it is apparent from the contested regulation that the Commission rejected the applicant’s request for exemption on the ground of the existence of both transhipment practices and assembly operations not fulfilling the criteria of Article 13(2) of the basic regulation.

66It should be pointed out that, as is apparent from the case-law recalled in paragraph 55 above, it is for each individual producer-exporter to show that its particular situation justifies an exemption pursuant to Article 13(4) of the basic regulation. Under that provision, requests for exemption must be ‘duly supported by evidence’ and, where the circumventing practice, process or work takes place outside the Union, enable interested parties to ‘show that they are not related to any producer subject to the measures’ and that ‘[they are not] engaged in circumvention practices as defined in paragraphs 1 and 2 of [that] Article’.

67Consequently, if the applicant for exemption fails to prove that its particular situation justifies the grant of that exemption, for example on account of the existence of evidence establishing transhipment practices, the Commission is fully entitled to refuse that exemption.

68In the present case, first, the Commission found that, in January 2014, the applicant was only at the start-up stage of its manufacturing operations and that it had not itself manufactured the bicycle frames exported to the EU on 27 January 2014, forming the subject matter of invoice CI‑15295-PM; the applicant does not contest this.

69Second, the Commission found, on the basis of invoice CI‑15295-PM, containing the number and type of bicycles exported to the EU on 27 January 2014, and of the invoice for the purchase of bicycle frames which were allegedly used to manufacture bicycles exported to the EU, bearing the reference KYD-CN-F01, two types of inconsistencies. According to invoice KYD-CN-F01, the frames purchased from the Vietnamese trader were of steel, whereas, according to invoice CI‑15295-PM, some of the bicycles exported to the EU had steel frames whilst others had aluminium frames. Moreover, whilst invoice KYD-CN-F01 indicates that it relates to 26-inch bicycle frames, the bicycles sold in the EU forming the subject matter of invoice CI‑15295-PM were of three different sizes, namely 26, 24 and 20 inches. The applicant does not contest the substance of those inconsistencies.

70Third, the Form A certificate of origin, issued by the Vietnamese authorities for those bicycle frames, provides further evidence of the first inconsistency, since it refers only to steel frames.

71It must therefore be held that the evidence provided by the applicant is not capable of demonstrating that it was able to produce the bicycles exported to the EU forming the subject matter of invoice CI‑15295-PM from bicycle frames allegedly purchased in Vietnam.

72The applicant attempts to explain the inconsistencies thus found by a simple ‘error’ on the part of its Vietnamese supplier. However, that argument cannot be accepted.

73It should be pointed out that those inconsistencies concern both the material and size of the frames, which constitute the essential characteristics of any bicycle, determining the type and quality of the bicycle as well as its price. It cannot therefore be argued that such significant discrepancies can be explained by a simple ‘error’ on the part of the supplier, particularly as it transpires that the alleged ‘error’ is of a multiple nature, affecting not only the material (steel or aluminium), but also three different frame sizes.

74Moreover, certain documents and information submitted by the applicant after the Commission’s disclosure and during these proceedings cast further doubt on the circumstances surrounding the export to the EU of the bicycles forming the subject matter of invoice CI‑15295-PM.

75Thus, first, the Court endorses the Commission’s finding that invoice CI‑15295-PM as presented, examined and photocopied during on-the-spot verification, submitted as Annex B5, does not match the invoice submitted by the applicant in the context of these proceedings as Annex A11 (p. 200). The same is true of the packing list, set out in Annex A11 (p. 201), which is not an exact copy of the list presented during the on-the-spot verification.

76Second, the applicant asserts that the customs authorities inspected the consignment of bicycle frames at issue when it crossed the border between Vietnam and Cambodia. However, it cannot be maintained that those authorities did not realise that that consignment did not match the description of the goods in question which was set out in the Form A certificate of origin, or indeed in invoice KYD-CN-F01, particularly as the inconsistencies at issue relate to the essential characteristics of those parts, namely the material and size of the frames.

77Third, it should be pointed out, as the Commission observes, that the purchase order submitted by the applicant in reply to the disclosure (see Annex A12, p. 231) bears no price, which casts doubt on its reliability. The applicant explains, in that regard, that the absence of any price is due to the fact that negotiations with its Vietnamese supplier on the final price were still ongoing at the time that it placed that purchase order (paragraph 43 of the reply). However, at the same time, the applicant states that it chose that suppler precisely because it presented the ‘cheapest offer’ (paragraph 45 of the reply). Those explanations appear thus to be contradictory.

78Fourth, the Commission found, in recital 71 of the contested regulation, that ‘no evidence was submitted for the other manufacturing steps for the frames like cutting, forming, punching, and painting’. Although, in the application, the applicant claims that the purchased frames were transformed in its factory into finished bicycles for export, the applicant submits no evidence regarding the various manufacturing steps of the frames at issue. When questioned on that point at the hearing, the applicant confirmed that it had not adduced such evidence, as the Commission found in recital 71 of the contested regulation.

79Fifth, it is common ground that the applicant did not submit any Form A certificate of origin concerning the bicycles exported to the European Union forming the subject matter of invoice CI‑15295-PM.

80Accordingly, it must be held that the Commission was entitled to find, without making a manifest error of assessment, that, in view of the state of its factory in January 2014, the lack of any evidence regarding the other manufacturing steps of the bicycle frames and in the absence of any other credible explanation, the 1099 bicycles exported to Greece were transhipped from China, since those bicycles could not have been assembled from bicycle frames which did correspond to their essential characteristics.

81In that regard, the applicant cannot allege that the Commission found ‘by default’ that the bicycles exported to the EU forming the subject matter of invoice CI‑15295-PM were transhipped from China.

82According to the case-law recalled in paragraph 55 above, it is for each individual producer-exporter to show that its particular situation justifies an exemption pursuant to Article 13(4) of the basic regulation. However, in the light of the considerations set out in paragraphs 68 to 80 above, it must be held that the applicant has not succeeded in demonstrating that it manufactured those bicycles from frames of Vietnamese origin.

83Moreover, it is apparent from recital 72 of the contested regulation and from the information submitted by the applicant in Table F2 that the applicant imported, during the reference period, the vast majority of the bicycle parts from Chinese bicycle and bicycle parts producers with whom it had capital links (see paragraph 11 above). Accordingly, and in the absence of any other credible explanation substantiated by reliable evidence, the Commission was entitled to find, without making any error of law, that the bicycles exported to the EU forming the subject matter of invoice CI‑15295-PM had been transhipped from China.

84That finding is sufficient to establish that the applicant did not fulfil the conditions laid down in Article 13(4) of the basic regulation and that, therefore, the Commission was correct to reject its request for exemption.

85First, as is apparent from paragraph 57 above, only one type of circumvention practice is sufficient to establish that the applicant for exemption engages in such practices for the purposes of that provision.

86Second, the Court finds that the transhipment in question concerns only the export to the EU of 1099 bicycles forming the subject matter of invoice CI‑15295-PM, as the parties confirmed in their replies to the measures of organisation of procedure. However, Article 13(4) of the basic regulation requires the producer concerned to show that it ‘[does not engage] in circumvention practices’. That provision does not lay down any quantitative conditions or qualitative requirements regarding those practices. In particular, the provision does not require that those practices be found in relation to each export to the EU during the reference period.

87In addition, it must be held that, in the present case, that export, far from being negligible, represents, as the Commission stated, 18% of the total volume of the applicant’s exports to the EU during the reference period.

88Consequently, since the Commission was right to find that the applicant had engaged in such a transhipment practice, if only as regards the export mentioned in paragraph 86 above, the Commission was entitled, without making any error of law, to reject its request for exemption. The first plea in law must therefore be rejected as unfounded.[…]

99It follows from all the foregoing that the action must be dismissed in its entirety.

Costs

100Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

101Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

Operative part

On those grounds,THE GENERAL COURT (Seventh Chamber)hereby:

1.Dismisses the action;

2.Orders Asia Leader International (Cambodia) Co. Ltd to pay the costs.

Delivered in open court in Luxembourg on 19 April 2018.