Chinese shoemaker wins appeal against EU duties

The European Court of Justice has ruled in favour of a challenge to EU anti-dumping duties.

The Court of Justice of the European Union (ECJ) recently ruled in favour of Wenzhou shoe manufacturer Zhejiang Aokang Shoes, which brought to a close years of litigation involving European ‘anti-dumping’ duties imposed on imports of certain Chinese leather shoes since October 2006.

Aokang, along with other Chinese manufacturers, lodged a lawsuit before the EU’s General Court after the duties were first imposed. Their argument was that the European Commission should have investigated their claims for market economy treatment (MET), even though they had not been included in the sample of companies used as a basis for the calculation of the anti-dumping duties. The granting of MET affects the calculations and usually results in a lower duty compared to the residual country-wide rate.

The General Court, however, decided at the time to side with the Council of the European Union and held that the European Commission was not required to examine MET claims from producers that had not been included in the sample. Aokang appealed to the ECJ against this decision.

The ECJ emphasised that there is no obligation on the EU institutions to prove that a producer does not satisfy the conditions laid down for the recognition of MET. Once a producer has supplied evidence that it qualifies for MET, however, the EU institutions are required to assess whether the criteria to grant MET have been fulfilled. This is regardless of whether the producer was included in the sample of producers or not. The ECJ found that neither the Commission nor the Council had examined the evidence as to whether Zhejiang Aokang Shoes qualified. Consequently, the ECJ concluded that the General Court was wrong to reject the Aokang’s argument.

The ECJ made the final ruling that the Council of the EU needs to pay Aokang's litigation expenses and refund the excess paid anti-dumping duties to the company's trading partners, which is estimated to total around 5 million Yuan ($802,000).

Publishing Data

This article was originally published on page 3 of the January 2013 issue of SATRA Bulletin.

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