Contents
Judgment of the General Court (Third Chamber)18 October 2023note(Commercial policy — Regulation (EU) 2020/502 — Measures adopted by the United States on imports of certain derivative aluminium and steel products — European Union decision to suspend equivalent trade concessions and other obligations — Additional customs duties on imports of products originating in the United States — Action for annulment — Standing to bring proceedings — Admissibility — Principle of good administration — Right to be heard)In Case T‑402/20,Zippo Manufacturing Co., established in Bradford, Pennsylvania (United States),Zippo GmbH, established in Emmerich am Rhein (Germany),Zippo SAS, established in Paris (France),represented by R. MacLean and D. Sevilla Pascual, lawyers,vEuropean Commission, represented by J. Flett, G.-D. Balan and M. Mataija, acting as Agents,THE GENERAL COURT (Third Chamber),composed, during the deliberations, of G. De Baere, President, G. Steinfatt and K. Kecsmár (Rapporteur), Judges,Registrar: M. Zwozdziak-Carbonne, Administrator,having regard to the written part of the procedure, in particular:– the order of 6 May 2021 reserving the decision on the plea of inadmissibility put forward by the Commission by document lodged at the Court Registry on 18 September 2020 until the Court rules on the substance of the case;– the measure of organisation of procedure of 12 July 2022 and the replies of the parties filed at the Court Registry on 9 and 10 August 2022;– the measure of inquiry of 21 September 2022 and the Commission’s reply filed at the Court Registry on 26 September 2022.further to the hearing on 29 September 2022,gives the following
Judgment
1By their action under Article 263 TFEU, the applicants, Zippo Manufacturing Co. (‘ZMC’), Zippo GmbH and Zippo SAS, seek the annulment of Commission Implementing Regulation (EU) 2020/502 of 6 April 2020 on certain commercial policy measures concerning certain products originating in the United States of America (OJ 2020 L 109, p. 10) (‘the contested regulation’), in so far as that regulation concerns them.
Background to the dispute and facts subsequent to the filing of the action
2The applicants belong to the same group of companies. They are engaged in the manufacture, distribution and sale of metal mechanical windproof lighters under the Zippo brand, and in after-sales service in relation to those products. Those products are manufactured by ZMC, which claims to be the only known manufacturer of that type of product in the United States.
3ZMC exports some of those products to the European Union. They are subject to customs duties upon entry into the customs territory of the European Union, under subheading 96138000 of the Combined Nomenclature (‘CN code 96138000’) established by Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1). CN code 96138000 covers ‘other lighters’, within ‘cigarette lighters and other lighters, whether or not mechanical or electrical, and parts thereof other than flints and wicks’.
4The products at issue are sold by ZMC to its subsidiaries, Zippo GmbH and Zippo SAS, and to approved independent distributors, in order to be placed on the market in the European Union. Those products are sold on a ‘free on board’ (‘FOB’) basis, with the result that the risks associated with those products pass to the related or independent distributors at the time of delivery to the United States port or airport of export. The distribution agreements between ZMC and those distributors also stipulate that those distributors are responsible for the payment of customs duties.
5On 24 January 2020, the United States of America adopted measures in the form of an increase in customs duties on imports of certain derivative aluminium products and certain derivative steel products, effective from 8 February 2020, with an unlimited duration.
6Although they were described as security measures by the United States of America, those measures were, according to the European Commission, safeguard measures taken in order to restrict imports for the purpose of protecting domestic industry against foreign competition, for the sake of that industry’s commercial prosperity. The Commission therefore considered that it was necessary to adopt measures to implement Regulation (EU) No 654/2014 of the European Parliament and of the Council of 15 May 2014 concerning the exercise of the Union’s rights for the application and enforcement of international trade rules and amending Council Regulation (EC) No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, in particular those established under the auspices of the World Trade Organization (OJ 2014 L 189, p. 50).
7On 6 March 2020, pursuant to Article 9 of Regulation No 654/2014, the Commission sought the views of the relevant stakeholders, by means of a form available on the website of the Commission’s Directorate-General (DG) for Trade. The information gathering was completed on 13 March 2020. Among the measures considered at the end of that information gathering, the Commission indicated the possibility of applying additional customs duties to certain products originating in the United States and in particular, during a first phase, to products under CN code 96138000. It is common ground between the parties that the applicants did not participate in that information gathering.
8On 6 April 2020, the Commission adopted the contested regulation, which entered into force on 7 April 2020, the day of its publication in the Official Journal of the European Union.
9Article 1 of that regulation provides:1. The Commission shall immediately, and in any event no later than 7 April 2020, give written notice to the WTO Council for Trade in Goods that, absent disapproval by the Council for Trade in Goods, the Union suspends, from 8 May 2020, the application to the trade of the United States of import duty concessions under the [General Agreement on Tariffs and Trade] 1994 in respect of the products listed in paragraph 2.2.As a consequence, the Union shall apply additional customs duties on imports into the Union of the products listed below and originating in the United States, as follows:(a) At the first stage, additional ad valorem duties of 20% and 7% shall be applied from 8 May 2020 on imports of the products specified as follows:CN code | Additional ad valorem duty96138000 | 20%39263000 | 7%…’
10Article 2 of that regulation provides:‘The Union shall apply the additional customs duties provided for in Article 1 as long as, and to the extent that, the United States applies or re-applies its safeguard measures in a manner that would affect products from the Union. The Commission shall publish in the Official Journal of the European Union a notice indicating the date on which the United States has ceased to apply its safeguard measures.’
11By letter of 22 May 2020, the applicants asked the Commission for all the preparatory communications and working documents relating to the adoption of the contested regulation under Article 7(2) of Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (OJ 2001 L 145, p. 43). Following the Commission’s response of 24 July 2020 and the applicants’ confirmatory application of 14 August 2020, the Commission, on 27 November 2020, granted full access to several of the documents in question, partial access to some of those documents and refused access to the remainder of those documents.
12In addition, by letter of 2 June 2020, the applicants submitted a request to the Commission to grant the products in question an exemption from the scope of the contested regulation under recital 19 thereof. By letter of 16 June 2020, the Commission refused that request.
13After the United States of America had announced the amendment of its safeguard measures with effect from 1 January 2022, the Commission adopted Implementing Regulation (EU) 2021/2083 of 26 November 2021 suspending commercial policy measures concerning certain products originating in the United States of America imposed by Implementing Regulations (EU) 2018/886 and (EU) No 2020/502 (OJ 2021 L 426, p. 41). That regulation suspends in particular additional ad valorem duties applied to products falling within CN code 96138000 provided for by the contested regulation, from 1 January 2022 to 31 December 2023.
Forms of order sought
14The applicants claim that the Court should:– annul the contested regulation, and in particular Article 1(2)(a) and Article 2 thereof, in so far as those provisions apply to them;– order the Commission to pay the costs.
15The Commission contends that the Court should:– dismiss the action as inadmissible;– in the alternative, dismiss the action as unfounded;– order the applicants to pay the costs.
Law
Admissibility
16By its plea submitted on the basis of Article 130 of the Rules of Procedure of the General Court, the Commission claims that the applicants are not individually concerned by the contested regulation. According to the Commission, that regulation takes the form of an EU measure of general application, which concerns the applicants by virtue of a situation objectively determined by the contested regulation, related to its ultimate objective, namely a trade rebalancing with respect to the United States of America, following the extension of their safeguard measures to certain derivative steel and aluminium products. Therefore, the Commission claims that the action is inadmissible.
17At the hearing, the Commission reiterated its objections to the conclusion that the applicants belonged to a closed circle of operators at the time when the contested regulation was adopted. It nevertheless stated that it was aware, during the process of adopting the contested regulation, that a large part of the measure provided for by that regulation with regard to the products covered by CN code 96138000 was to apply to the applicants’ products. However, it disputed that it was aware, during that process, that they were the only undertakings concerned. Furthermore, the Commission stated that, contrary to what the applicants alleged in their written submissions, the latter’s exports to the European Union had increased since the introduction of the additional customs duties at issue.
18The applicants claim that they are individually and directly concerned by the contested regulation, in the same way as an addressee of the act, and that therefore the action must be declared admissible.
19It should be recalled that the admissibility of an action brought by a natural or legal person against an act which is not addressed to them, in accordance with the fourth paragraph of Article 263 TFEU, is subject to the condition that they be accorded standing to bring proceedings, which arises in two situations. First, such proceedings may be instituted if the act is of direct and individual concern to those persons. Secondly, such persons may bring proceedings against a regulatory act not entailing implementing measures if that act is of direct concern to them (see judgment of 3 December 2020, Changmao Biochemical Engineering v Distillerie Bonollo and Others, C‑461/18 P, EU:C:2020:979, paragraph 54 and the case-law cited).
20The conditions of admissibility laid down in that provision must be interpreted in the light of the fundamental right to effective judicial protection, as enshrined in Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), but such an interpretation cannot have the effect of setting aside those conditions, which are expressly laid down in the TFEU (see judgment of 3 December 2020, Changmao Biochemical Engineering v Distillerie Bonollo and Others, C‑461/18 P, EU:C:2020:979, paragraph 55 and the case-law cited).
21It should also be borne in mind that the legislative nature of a contested act does not preclude it from being of direct and individual concern to certain legal or natural persons concerned (judgment of 18 May 1994, Codorniu v Council, C‑309/89, EU:C:1994:197, paragraph 19; see also, judgment of 28 February 2019, Council v Growth Energy and Renewable Fuels Association, C‑465/16 P, EU:C:2019:155, paragraph 72 and the case-law cited; judgment of 14 September 1995, Antillean Rice Mills and Others v Commission, T‑480/93 and T‑483/93, EU:T:1995:162, paragraph 66).
The condition of individual concern
22It is settled case-law that the fourth paragraph of Article 263 TFEU authorises natural and legal persons to institute proceedings against a measure of general application, such as a regulation, only if, in addition to being of direct concern to them, it affects them by reason of certain attributes peculiar to them, or by reason of a factual situation which differentiates them from all other persons and distinguishes them individually in the same way as the addressee of a decision. In other words, the infringements alleged by the applicant must be such as to distinguish it individually in the same way as the addressee of the measure would be (see judgment of 8 May 2022, Uzina Metalurgica Moldoveneasca v Commission, T‑245/19, EU:T:2022:295, paragraph 57 and the case-law cited).
23In the first place, the Commission’s objections based on the nature of the contested regulation must be rejected.
24The fact that the contested regulation has erga omnes effect by its very nature does not exclude the possibility that such an act may contain measures applying individually to certain economic operators (see, to that effect, order of 30 April 2003, VVG International and Others v Commission, T‑155/02, EU:T:2003:125, paragraphs 40 to 42). Accordingly, even though the contested regulation takes effect by virtue of an objectively determined situation, the applicants may nevertheless rely on factors capable of distinguishing them individually in the same way as the addressee of the act.
25In the second place, the applicants assert that ZMC is the only known exporting producer in the United States of the products subject to the additional duties at issue. Relying on data from Eurostat, the same as those used by the Commission for the purposes of adopting the contested regulation, the applicants argue that, once the costs of air freight, inland transport, insurance and other associated shipping costs are added and the relevant exchange rate is applied, the value of ZMC’s exports to the European Union of the products at issue is very close to the total amount of imports originating in the United States under CN code 96138000 for 2019.
26In that regard, it should be borne in mind that, although the fact of being the biggest exporting producer of the products subject to the measures at issue is not, in itself, such as to distinguish ZMC individually, it is not irrelevant, inasmuch it forms part of a set of factors constituting a particular situation which distinguishes the applicant, with regard to the measure at issue, from all other economic operators (see, to that effect, judgment of 18 May 2022, Uzina Metalurgica Moldoveneasca v Commission, T‑245/19, EU:T:2022:295, paragraph 63 and the case-law cited).
27In the present case, at the hearing, the Commission was requested to take a position on the quantitative data provided by the applicants. While the Commission expressed reservations as to whether ZMC was the only exporting producer of the products at issue, it nevertheless admitted that the data provided by the applicants and the data from Eurostat were close. It must be concluded from this that the Commission has failed to adduce evidence to disprove the evidence put forward by the applicants in this respect.
28Furthermore, in so far as concerns the Commission’s objection to the existence of a closed class of operators on account of the fact that any actual or potential exporter, established in the territory of the United States, of products falling within CN code 96138000 would also be affected by the contested regulation, it is necessary to identify the body of evidence capable of distinguishing the applicant individually within the meaning of the relevant case-law (see, to that effect, judgments of 16 May 1991, Extramet Industrie v Council, C‑358/89, EU:C:1991:214, paragraph 17, and of 18 May 2022, Uzina Metalurgica Moldoveneasca v Commission, T‑245/19, EU:T:2022:295, paragraph 66).
29In this context, first, it should be noted that the contested regulation imposes additional customs duties on products originating in the United States under CN code 96138000 and that those products are part of the applicants’ business. Secondly, all of the products exported to the European Union by ZMC originate in the United States. Thirdly, without having been validly contradicted by the Commission, the applicants adduced documentary evidence, in particular two certificates issued by professional organisations and quantitative data intended to demonstrate that ZMC is the only exporting producer of products falling within CN code 96138000 from that territory to the European Union. Fourthly, the data from Eurostat used by the Commission for the purposes of adopting the contested regulation are consistent with the data relating to ZMC submitted by the applicants. Fifthly, while the Commission has argued, at the hearing, that the procedure for adopting balancing measures does not provide for any formal step to identify the producers or exporters likely to be concerned by those measures, it nevertheless acknowledged that, during the procedure for adopting the contested regulation, it was aware of the existence of ‘Zippo’, identified as a ‘major US exporter’ of the products falling within CN code 96138000 and of the fact that a significant part of the exports falling within that tariff line, covered by the contested regulation, was composed of ‘Zippo’ exports. Sixthly, the Commission also explained, at the hearing, that the choice of products subject to balancing measures was made inter alia with the aim of ‘lead[ing] the other party, in this case the United States of America, to give up [its] WTO-incompatible safeguard measures’ and that, in that context, it took account of the US state from which those products originated. Seventhly, the applicants claim, without being contradicted in that respect by the Commission, that the State of Pennsylvania, where ZMC is established, is one of the US states which was taken into account for the purposes of that choice.
30In those circumstances and in the light of the case-law recalled in paragraph 20 above, it must be stated that it is apparent from the material in the file, on which the parties expressed their views at the hearing, that there is a set of factual and legal factors constituting a particular situation which distinguishes one of the applicants, namely ZMC, with regard to the contested regulation, from all other economic operators and, accordingly, which shows that the contested regulation is of individual concern to the applicant within the meaning of the fourth paragraph of Article 263 TFEU.
31Accordingly, it must be concluded that the contested regulation is of individual concern to ZMC.
The condition of direct concern
32According to settled case-law, the condition that the decision forming the subject matter of the proceedings must be of direct concern to a natural or legal person, as provided for in the fourth paragraph of Article 263 TFEU, requires the fulfilment of two cumulative criteria, namely the contested measure must, first, directly affect the legal situation of the individual and, secondly, leave no discretion to the addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from EU rules alone without the application of other intermediate rules (judgments of 6 November 2018, Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci, C‑622/16 P to C‑624/16 P, EU:C:2018:873, paragraph 42, and of 3 December 2020, Changmao Biochemical Engineering v Distillerie Bonollo and Others, C‑461/18 P, EU:C:2020:979, paragraph 58).
33Furthermore, it must be recalled, first, that the condition relating to the absence of implementing measures should not be confused with the requirement that a contested act be of direct concern to the applicant and, secondly, that, in the analysis of the applicant’s direct concern, the mere existence of implementing measures is not sufficient to preclude such concern, since the relevant legal criterion is that of the absence of any discretion left to the addressees of the act at issue, who are entrusted with the task of implementing it (see judgment of 18 May 2022, Uzina Metalurgica Moldoveneasca v Commission, T‑245/19, EU:T:2022:295, paragraph 45 and the case-law cited).
34In the present case, it must be examined whether the contested regulation, which is of individual concern to ZMC, is also of direct concern to it.
35In the first place, it should be noted that it follows, in particular, from Article 1(1) and (2)(a) of the contested regulation that, in the absence of disapproval by the Council for Trade in Goods of the World Trade Organization (WTO), the European Union is to suspend, from 8 May 2020, the application to the trade of the United States of America of import duty concessions under the General Agreement on Tariffs and Trade (OJ 1994 L 336, p. 11; ‘GATT 1994’) in respect of products falling within CN code 96138000 and that additional ad valorem duties of 20% are to apply from that date on imports of those products. Furthermore, Article 2 of that regulation provides that the European Union is to apply those additional customs duties as long as, and to the extent that, the United States of America applies or reapplies its safeguard measures in a manner that would affect products from the European Union.
36It must therefore be considered that the Member States, entrusted with the task of implementing the contested regulation, have no discretion as regards the rate of additional customs duties at issue on imports into the European Union and the imposition of those duties on the products at issue, and that the second criterion referred to in paragraph 32 above is therefore met (see, to that effect, judgments of 12 December 2014, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑643/11, EU:T:2014:1076, paragraph 28 (not published); of 3 May 2018, Distillerie Bonollo and Others v Council, T‑431/12, EU:T:2018:251, paragraph 50; and order of 10 September 2020, Cambodia and CRF v Commission, T‑246/19, EU:T:2020:415, paragraphs 66, 68 and 108).
37In the second place, as regards the first criterion indicated in the case-law referred to in paragraph 32 above, it should be noted, at the outset, that ZMC is not responsible for the payment of the additional customs duties at issue, as noted in paragraph 4 above.
38Nevertheless, it is apparent from the case-law that the fact that that applicant does not pay those duties is not decisive and that the finding of direct concern to the applicant can be based on other factors (see, to that effect, order of 10 September 2020, Cambodia and CRF v Commission, T‑246/19, EU:T:2020:415, paragraph 107).
39In the present case, first, account must be taken of the fact that the products falling within CN code 96138000 were, before the entry into force of the contested regulation, subject to a consolidated rate of 2.7%, resulting inter alia from the application of multilateral concessions under the GATT 1994. Secondly, the contested regulation temporarily suspended those concessions and applied additional ad valorem duties of 20% to those products. Thirdly, under Article 2 of the contested regulation and until its suspension by Implementing Regulation 2021/2083, those duties were to be applied in the European Union as long as, and to the extent that, the United States of America applied or reapplied its safeguard measures in a manner that would affect products from the European Union. Fourthly, as is apparent from reading recitals 9 and 11 of the contested regulation, the Commission considered that the appropriate rebalancing action should take the form of commercial policy measures, consisting inter alia of the imposition of additional customs duties proportionate to the effect of the safeguard measures imposed by the United States of America, without being excessive. Fifthly, such duties responded to the safeguard measures taken by the United States of America which were capable of having a considerable negative economic impact on the EU industries concerned, as is apparent from reading recitals 7 and 8 of the contested regulation. Sixthly, as stated in paragraph 29 above, the applicants claim that ZMC is the only known exporting producer established in the United States of the products falling within CN code 96138000 subject to the additional customs duties at issue. Seventhly, those products are imported into the European Union in particular by subsidiaries of ZMC which are liable for the payment of those duties. Eighthly, it is apparent from the evidence submitted by the applicants in response to a measure of organisation of procedure that, in 2021, the period during which those duties were in force, the share of products imported into the European Union by those subsidiaries represented more than 80% of the volume of ZMC’s products imported into the European Union.
40Accordingly, first, it should be stated that, similarly to the safeguard measures imposed by the United States of America, the rebalancing measures imposed by the contested regulation are intended, through the application of additional customs duties proportional to the effects of those safeguard measures, to produce a negative economic impact on the activity of US undertakings which export to the European Union the products to which those measures apply, which include ZMC in its status as the sole exporting producer of products falling within CN code 96138000, for the reasons set out in paragraph 29 above. Furthermore, in the present case, that impact is accentuated vis-à-vis ZMC because of its status as the parent company of companies which import into the European Union more than 80% of the volume of those products from the United States and which are therefore responsible for the payment of most of the additional duties established by the contested regulation. It should therefore be stated, as regards the products falling within CN code 96138000, that ZMC was directly concerned by the negative impact intended by the Commission when it adopted the contested regulation.
41Secondly, by suspending the application of the consolidated rate of 2.7% on the importation of products falling within CN code 96138000 and by applying to those products additional ad valorem duties of 20%, the contested regulation affects the right of access to the EU market from which those products benefited until their entry into force (see, by analogy, order of 10 September 2020, Cambodia and CRF v Commission, T‑246/19, EU:T:2020:415, paragraphs 60 and 61). Since ZMC’s status as the sole exporting producer of those products established in the United States has not been validly refuted by the Commission, it must be stated that the contested regulation also affects the right of access to the EU market for ZMC’s products and that, accordingly, that regulation produces direct legal effects on the latter.
42The fact, relied on by the Commission, that, after the entry into force of the contested regulation, the volume of products exported by ZMC to the territory of the European Union increased, does not alter that conclusion. First, the applicants claim that that increase results in particular from a reorganisation of the distribution of their products and an increase in the points of sale on the EU market. Moreover, in the absence of the customs duties imposed by the contested regulation, that increase could have been greater. Furthermore, it should be noted that the customs duties at issue were applied over a relatively short period, from 8 May 2020 to 31 December 2021. Secondly, the fact that it is not possible to observe the negative impact sought by means of a regulation instituting rebalancing measures, such as the contested regulation, is not decisive for the purposes of assessing the criterion of direct concern, in so far as it suffices that the act at issue automatically and immediately alters the applicant’s legal situation. For the reasons set out in paragraphs 40 and 41 above, the contested regulation automatically and immediately produced direct effects on ZMC’s legal situation.
43Accordingly, it must be found that the contested regulation is of direct concern to ZMC and that it therefore has standing to bring proceedings for the purposes of the fourth paragraph of Article 263 TFEU.
44According to settled case-law, which is based on reasons of procedural economy, if the same act is challenged by a number of applicants and it is established that one of them has standing to bring proceedings, there is no need to examine whether the other applicants have standing to bring proceedings (see, to that effect, judgments of 9 June 2011, Comitato ‘Venezia vuole vivere’ and Others v Commission, C‑71/09 P, C‑73/09 P and C‑76/09 P, EU:C:2011:368, paragraph 37, and of 24 October 2019, EPSU and Goudriaan v Commission, T‑310/18, EU:T:2019:757, paragraph 38 and the case-law cited).
45In the present case, in view of the finding that ZMC has standing to bring proceedings seeking the annulment of the contested regulation, there is no need to examine whether Zippo GmbH and Zippo SAS have the necessary standing to institute proceedings on the basis of Article 263 TFEU against that same regulation.
46Furthermore, it should be noted that the applicants have an interest in bringing proceedings against the contested regulation, which, moreover, the Commission does not dispute.
47In that regard, the fact that, after the entry into force of the contested regulation, the additional ad valorem duties at issue were suspended by Implementing Regulation 2021/2083, after the action was filed, has no effect on the applicants’ interest in bringing proceedings in view of the subject matter of the action. That implementing regulation neither repealed nor removed the contested regulation from the EU legal order, of which it therefore continues to form part. In addition, Implementing Regulation 2021/2083 provides that that suspension must end on 31 December 2023. The applicants also retain an interest in bringing proceedings in order to prevent its alleged unlawfulness from recurring in the future, in particular in the context of the possible maintenance of the additional customs duties at issue (see, to that effect, judgments of 23 December 2015, Parliament v Council, C‑595/14, EU:C:2015:847, paragraph 17 and the case-law cited, and of 3 May 2018, Distillerie Bonollo and Others v Council, T‑431/12, EU:T:2018:251, paragraph 108 and the case-law cited).
48In the light of all the foregoing considerations, the action must be declared admissible.
Substance
49In support of their action, the applicants put forward five pleas in law.
50The Court considers it appropriate to examine first the fifth plea in law, alleging breach of the principle of good administration.
51The applicants submit that the information gathering process conducted by the Commission, referred to in recital 10 of the contested regulation, did not comply with the principle of good administration. First of all, that process was not transparent, given that it was conducted via a section of the DG Trade website which was nearly invisible and which was difficult to access. Next, while the Commission was not required to publish the information about that process in the Official Journal of the European Union, such a notice would have complied with the principle of good administration. Lastly, that process did not allow the applicants to be heard before the contested regulation was adopted and, in view of the severity of the measures considered with regard to their interests, their right to be heard was not respected, in breach of Article 41(2) of the Charter.
52The Commission maintains that the information gathering exercise conducted in preparing the contested regulation fully complied with the requirements of Article 9 of Regulation No 654/2014. The Commission states that it received input from the relevant stakeholders, thereby confirming that the communication surrounding that exercise was effective. Furthermore, the right to be heard does not require the Commission to contact individually each undertaking whose economic activities could be affected by rebalancing measures. That right is properly protected by providing public notice, through online publication, which allows the relevant stakeholders to be informed and to manifest their interest, including by requesting information, guidance or a meeting.
53In the first place, the applicants’ allegation as to the choice and the lack of transparency of the method of communication adopted by the Commission in order to organise the information gathering provided for in Article 9(1) of Regulation No 654/2014, prior to the adoption of the contested regulation, must be dismissed.
54Where the Commission is considering adopting an implementing act on the basis of Article 4(1) of Regulation No 654/2014, inter alia in order to rebalance concessions in trade relations with third countries under Article 3(c) of that regulation, Article 9(1) of that regulation provides, first, that it is to seek information and views regarding the European Union’s economic interests in specific goods or services or in specific sectors through a notice in the Official Journal of the European Union or through other suitable public communication means, indicating the period within which input is to be submitted and, secondly, that it is to take the input received into account.
55As the applicants themselves acknowledge, it should be noted that, in accordance with Article 9(1) of Regulation No 654/2014, the Commission was not required to inform the relevant stakeholders of the conduct of that information gathering exclusively by the publication of a notice in the Official Journal of the European Union and that it could also ensure the publicity of that gathering ‘through other suitable public communication means’.
56In the present case, it is apparent from the documents in the file that, as regards the contested regulation, the information gathering conducted prior to its adoption, in accordance with Article 9(1) of Regulation No 654/ 2014, was publicised via a page, entitled ‘Consultations’ on the website of DG Trade. From that webpage, the public could have access to information relating to the consultations conducted in the field of commercial policy by the Commission’s services, in particular in order to contribute thereto.
57Furthermore, in the light of those same documents in the file, it must be noted that, prior to the adoption of the contested regulation, the Commission requested information from relevant stakeholders by means of a form to be completed by those stakeholders, accessible from that same page of the website of DG Trade. The information document to which that form was attached specified in particular the context of the information gathering in question, the measures envisaged by the Commission following that process and the time limit within which relevant stakeholders could submit, by email, information and views, namely no later than 13 March 2020 at noon, Brussels (Belgium) time. Although it is common ground that the applicants did not participate in that consultation, the Commission, however, confirmed, in response to questions from the Court at the hearing, that it had received contributions from six relevant stakeholders, none of which, however, concerned products falling within CN code 96138000.
58Accordingly, it must be found that, by proceeding as described in paragraphs 56 and 57 above, the Commission did not infringe Article 9 of Regulation No 654/2014.
59In the second place, as regards the alleged infringement of the applicants’ right to be heard, it should be borne in mind that all EU acts must respect fundamental rights, that respect constituting a condition of their lawfulness which it is for the Courts of the European Union to review in the framework of the complete system of legal remedies established by the TFEU (judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraph 285).
60It should also be borne in mind that the Commission is required, during an administrative procedure in the matter of defence against commercial policy measures taken by non-EU countries, to respect the fundamental rights of the European Union, which include the right to good administration enshrined in Article 41 of the Charter. According to the case-law relating to the principle of good administration, where the EU institutions have a discretion, respect for the safeguards established by the EU legal order in administrative procedures is of even more fundamental importance (see, to that effect, judgments of 24 May 2012, JBF RAK v Council, T‑555/10, not published, EU:T:2012:262, paragraph 112 and the case-law cited; of 25 January 2017, Rusal Armenal v Council, T‑512/09 RENV, EU:T:2017:26, paragraph 189 and the case-law cited; and of 12 March 2020, Eurofer v Commission, T‑835/17, EU:T:2020:96, paragraph 143).
61Furthermore, it should be borne in mind that Article 41(2)(a) of the Charter provides that the right to good administration includes the right of every person to be heard before any individual measure which would affect him or her adversely is taken (judgment of 5 November 2014, Mukarubega, C‑166/13, EU:C:2014:2336, paragraph 43).
62The right to be heard guarantees every person the opportunity to make known his or her views effectively during an administrative procedure and before the adoption of any decision liable to affect his or her interests adversely. In addition, it should be stated that the right to be heard pursues a dual objective: first, to enable the case to be examined and the facts to be established in as precise and correct a manner as possible; and, secondly, to ensure that the person concerned is in fact protected. The right to be heard is intended, inter alia, to guarantee that any decision adversely affecting a person is adopted in full knowledge of the facts, and its purpose is, in particular, to enable the competent authority to correct an error or to enable the person concerned to submit such information relating to his or her personal circumstances as will argue in favour of the adoption or non-adoption of the decision, or in favour of its having a specific content (see judgment of 4 June 2020, EEAS v De Loecker, C‑187/19 P, EU:C:2020:444, paragraphs 68 and 69 and the case-law cited).
63It should be noted that the Court of Justice has affirmed the importance of the right to be heard and its very broad scope in the EU legal order, taking the view that that right must apply to any procedure which is liable to culminate in a measure adversely affecting a person. In accordance with the case‑law of the Court of Justice, observance of the right to be heard is required even where the applicable legislation does not expressly provide for such a procedural requirement (see judgment du 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:C:2022:314, paragraph 326 and the case-law cited).
64Therefore, in the light of its character as a fundamental general principle of EU law, the application of the principle of the rights of the defence, which include the right to be heard, cannot be excluded or restricted by any legislative provision. Respect for that principle must therefore be ensured both where there is no specific legislation and also where legislation exists which does not itself take account of that principle (see judgment du 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:C:2022:314, paragraph 327 and the case-law cited).
65The scope of the right to be heard, as a principle and fundamental right of the EU legal order, is afforded when the administration plans to adopt an act adversely affecting a person, that is, an act which may have a negative effect on the interests of the individual or Member State concerned, since its application does not depend on the existence of an express rule to that effect laid down by subordinate legislation (judgment of 18 June 2014, Spain v Commission, T‑260/11, EU:T:2014:555, paragraph 64).
66In that regard, first, it should be noted that no provision of Regulation No 654/2014 explicitly excludes or restricts the right to be heard of undertakings whose products are subject to rebalancing measures provided for by an implementing act adopted by the Commission under Article 4(1) of that regulation.
67Furthermore, Article 9(1) of Regulation No 654/2014, in so far as it provides for the obligation for the Commission to seek information and views regarding the European Union’s economic interests in specific goods or services or in specific sectors, does not constitute an implementation of the right to be heard of those undertakings. Their particular interests are not to be confused with the European Union’s economic interests, in particular where an undertaking from a third State is concerned. Admittedly, where an undertaking has taken part in such information gathering, it cannot be ruled out that it has, by reason of the information or views which it has submitted, usefully and effectively asserted its interests or submitted information relating to its personal situation. However, where an undertaking, whose interests might be adversely affected by the measures provided for in an implementing act adopted by the Commission under Article 4(1) of that regulation, has not participated in such information gathering, it cannot be considered that its right to be heard, as guaranteed by Article 41(2)(a) of the Charter, was not violated on the sole ground that the Commission has fulfilled its obligation to organise that information gathering in accordance with Article 9(1) of that regulation.
68Secondly, it must be taken into account that the subject matter of the measures provided for by the contested regulation, on the basis of Article 3(c) and Article 4(1) of Regulation No 654/2014, is the rebalancing of concessions in trade relations with the United States of America, in the form of commercial policy measures consisting of the suspension of tariff concessions and the imposition of additional customs duties, inter alia regarding products falling within CN code 96138000.
69Thus, the producers of the products concerned by those increased customs duties and exported from that third State to the European Union are not addressees of the rebalancing measures in question which are, in principle, part of the trade relations between the European Union and that third State.
70However, it should be noted that, on the basis of Article 4(1) of Regulation No 654/2014, the Commission may exercise the right of rebalancing in the form of commercial policy measures substantially equivalent to the level of concessions affected by the safeguard measures adopted by the third State at issue, in accordance with Article 4(2)(c) of that regulation.
71In the present case, as is apparent from recital 7 of the contested regulation, the Commission considered that the safeguard measures adopted by the United States of America were capable of having a considerable negative economic impact on the EU industries concerned. In those circumstances, as set out in paragraph 40 above, it must be noted that, in a manner analogous to the safeguard measures imposed by the United States of America, according to the contested regulation, the rebalancing measures established by the latter are intended, through the application of additional customs duties proportional to the effects of those safeguard measures, to produce a negative economic impact on the activity of US undertakings which export to the European Union the products to which those measures apply.
72Thus, a rebalancing measure provided for by an implementing act adopted on the basis of Article 4(1) of Regulation No 654/2014, even if it is not taken following an individual procedure against undertakings exporting the products concerned by that procedure, may constitute a measure likely to affect the interests of those undertakings adversely.
73The case-law of the Court of Justice, referred to in paragraph 63 above, has adopted a broad interpretation of the right to be heard as being guaranteed to every person in any procedure which is liable to culminate in a measure adversely affecting him or her. Therefore, it cannot be ruled out that undertakings exporting the products concerned by the rebalancing measures provided for by a regulation adopted on the basis of Article 4(1) of Regulation No 654/2014, in particular in the form of additional customs duties, may rely on the right to be heard, as guaranteed by Article 41(2)(a) of the Charter, in the context of the procedure for adopting those measures.
74In its defence and at the hearing, the Commission argued that the procedure for adopting an implementing act, on the basis of Article 4(1) of Regulation No 654/2014, does not provide for the identification of producers or exporters whose products are likely to be subject to rebalancing measures. However, under Article 41(2)(a) of the Charter and having regard to the case-law referred to in paragraphs 62 and 63 above, where the conduct of the procedure for the adoption of that act leads the Commission to identify a natural or legal person whose interests are likely to be adversely affected by the measures provided for by that same act, it should be considered that that person must be able to submit information relating to his or her personal circumstances as will argue in favour of the adoption or non-adoption of the act in question, or in favour of its having a specific content.
75In the present case, at the hearing, in response to questions put by the Court, the Commission confirmed that it was aware, during the procedure for adopting the contested regulation, not only that the applicants’ products were among those to which the additional customs duties at issue were to apply, but also that those duties concerned them to a large extent.
76Furthermore, it should be noted that the identification of products of the Zippo brand during the procedure for adopting the contested regulation does not result from the information gathering exercise conducted by the Commission under Article 9(1) of Regulation No 654/2014. As stated in paragraph 57 above, the Commission clarified, at the hearing, that it had not received any contributions concerning products falling within CN code 96138000. Therefore, it must be stated that the Commission, of its own initiative, identified the applicants’ products as being the subject of the rebalancing measures envisaged via the contested regulation.
77It follows from the foregoing that, in the circumstances of the present case, the applicants had the right to be heard during the procedure for adopting the contested regulation.
78However, the exercise of the right to be heard may be subject to limitations under Article 52(1) of the Charter, according to which:‘Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the [European] Union or the need to protect the rights and freedoms of others.’
79However, it is settled case-law that fundamental rights, such as respect for the rights of the defence, do not constitute unfettered prerogatives and may be restricted, on the condition that the restrictions in fact correspond to objectives of general interest pursued by the measure at issue and that they do not entail, with regard to the objectives pursued, a disproportionate and intolerable interference which infringes upon the very substance of the rights guaranteed (see judgments of 15 July 2021, Commission v Poland (Disciplinary regime for judges), C‑791/19, EU:C:2021:596, paragraph 207 and the case-law cited, and of 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:T:2022:314, paragraph 337 and the case-law cited).
80In the present case, since the Commission disputes the very existence of the applicants’ right to be heard, it does not maintain that considerations relating to the pursuit of objectives in the general interest justified restricting that right in the circumstances of the present case. However, it submits, in essence, that the entire procedure for adopting the contested regulation was subject to the time limits laid down in Article 8(2) of the WTO Agreement on Safeguards and that the collection of information necessarily had to fall within that framework. It should be understood that, in so doing, the Commission is arguing that, in the context of the procedure laid down by those provisions, it would not have materially had the time necessary to hear the applicants during the procedure for adopting the contested regulation, in view of the time to be devoted to the various stages of that procedure, in particular the information gathering provided for in Article 9(1) of Regulation No 654/2014, and the time limits imposed by the applicable provisions of the WTO Agreement on Safeguards. At the hearing, it also argued that the rebalancing measures at issue had to be adopted by 1 April 2020 in order to comply with the provisions of the WTO Agreement on Safeguards and that a one-week information gathering exercise in March 2020 was the most that could have been achieved.
81In that regard, as argued by the Commission, it should be noted that the process of adopting the contested regulation had to fall within the time limits resulting from the provisions of Article 8(2) of the WTO Agreement on Safeguards, which provide inter alia that the suspension of trade concessions in respect of the third State which has adopted safeguard measures must take place within 90 days of the application of those measures and upon the expiry of 30 days from the day on which written notice of such suspension is received by the Council for Trade in Goods of the WTO. Accordingly, under those provisions – in view of the fact that the measures adopted by the United States of America, to which the contested regulation responds, took effect on 8 February 2020 – the rebalancing measures adopted by the Commission had to themselves take effect within 90 days, that is to say, no later than 8 May 2020. In addition, at least 30 days before that date, the Commission had to have notified the Council for Trade in Goods of the WTO, that is to say, no later than 7 April 2020.
82It should be noted that, in order to comply with those time limits, the contested regulation was adopted on 6 April 2020.
83Furthermore, as follows from paragraphs 75 and 76 above, the Commission had identified of its own initiative the products of the brand Zippo as being affected by the rebalancing measures provided for by the contested regulation, then in the process of being adopted.
84In such circumstances, it was for the Commission, first, to ensure compliance with the time limits resulting from the provisions of Article 8(2) of the WTO Agreement on Safeguards and, secondly, to hear the applicants, who had the right to be heard during the procedure for adopting the contested regulation, as found in paragraph 77 above.
85In the present case, the Commission merely asserts the existence of those provisions, without however stating how compliance with the resulting time limits prevented the applicants from being heard. In that regard, first, it must be taken into account that those time limits and the date by which the contested regulation had to be adopted were known to the Commission. Secondly, the Commission’s choice to respond, with rebalancing measures adopted under Regulation No 654/2014, to the safeguard measures adopted by the United States of America was formalised on 6 March 2020 by the request for consultations submitted to the WTO in accordance with the WTO Agreement on Safeguards, as is apparent from the footnote referred to in recital 4 of the contested regulation. Thirdly, while the Commission stated, at the hearing, that an information gathering exercise in accordance with Article 9 of Regulation No 654/2014 of ‘one week [in] March [2020] was … the most that could … have been achieved’, it does not explain how hearing the applicants, pursuant to the right to be heard, would have required more time nor why the collection of their observations could not have been conducted in parallel or subsequent to that information gathering, in the period between 6 March 2020, the date of the request for consultations submitted to the WTO, and 1 April 2020, the date by which the Commission stated that the rebalancing measures at issue had to be adopted. Fourthly, as stated in paragraph 57 above, the Commission collected only six contributions from relevant stakeholders during that information gathering and it should be observed that it has not put forward any argument to explain how the processing of the applicants’ observations, added to that of those six contributions collected from 6 to 13 March 2020, would have resulted in its being unable to adopt the contested regulation within the time limits laid down in the WTO Agreement on Safeguards, while guaranteeing the applicants their right to be heard under Article 41(2)(a) of the Charter.
86Accordingly, since the Commission has failed to prove that it was impossible for it to hear the applicants effectively during the procedure for adopting the contested regulation, whereas it has admitted that it identified them of its own initiative in that context, it must be stated that it had the time necessary to allow the applicants to exercise their right to be heard.
87It is true that the alleged infringement of the principle of good administration could lead to the annulment of the contested regulation only in so far as that irregularity might have had a bearing on the outcome of the procedure, thereby actually affecting the applicant’s rights of defence (see, to that effect, judgment of 20 May 2015, Yuanping Changyuan Chemicals v Council, T‑310/12, not published, EU:T:2015:295, paragraphs 224 and 225 and the case-law cited). In that case, however, an applicant cannot be required to show that the Commission’s decision would have differed in content but simply that such a possibility cannot be entirely ruled out, since it would have been better able to defend itself had there been no procedural error (see judgment of 20 May 2015, Yuanping Changyuan Chemicals v Council, T‑310/12, not published, EU:T:2015:295, paragraph 214 and the case-law cited).
88In that regard, in the application, the applicants claim in particular that, at the time of the adoption of the contested regulation, the rebalancing measures envisaged with regard to their products constituted the harshest form of the envisaged rebalancing measures, in terms of both scale and comparative size compared to those applied to other industries in the United States. They also note the particularly severe nature of a measure which targets a single undertaking and imposes on it the entire burden of the rebalancing measures at issue, and the fact that their products have no connection with those covered by the safeguard measures adopted by the United States of America, with the result that the measures taken by the Commission are therefore not likely to redress the effects of those safeguard measures. They also maintain that, by targeting them specifically, the Commission adopted a discriminatory measure, when it had the possibility of choosing other products which would have concerned several undertakings and of distributing the rebalancing measures at issue more fairly.
89In the present case, it must be stated that, if the applicants had been able to exercise their right to be heard during the procedure for adopting the contested regulation, they could in particular have put forward the arguments set out in paragraph 88 above.
90To the extent that ZMC is the sole exporting producer of the products at issue, for the reasons set out in paragraph 29 above, it cannot be ruled out that the contested regulation would have differed in content if the applicants had been heard by the Commission prior to its adoption.
91Accordingly, it follows from the foregoing that the Commission disregarded the applicants’ right to be heard during the procedure for adopting the contested regulation and, accordingly, the principle of good administration, and that that breach might have had a bearing on the outcome of the procedure.
92In those circumstances, the fifth plea in law must be upheld and, accordingly, the contested regulation annulled in so far as it covers products falling within CN code 96138000, without there being any need to examine the other pleas or to rule on the admissibility of the evidence submitted by the applicants by letter of 10 January 2023.
Costs
93Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicants.
Operative part
On those grounds,THE GENERAL COURT (Third Chamber)hereby:
1.Annuls Commission Implementing Regulation (EU) 2020/502 of 6 April 2020 on certain commercial policy measures concerning certain products originating in the United States of America in so far as it concerns products falling within CN code 96138000;
2.Orders the European Commission to pay the costs.
Delivered in open court in Luxembourg on 18 October 2023.
Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.