Four Chinese companies – Brosmann Footwear, Seasonable Footwear, Lung Pao Footwear and Risen Footwear – have won a lawsuit against the European Union in the European Court of Justice on the grounds that they were not given the chance to prove they were not subject to anti-dumping duties. Another group of Chinese firms is waiting for a similar ruling.
A group of 30 large and small importers of athletic and street shoes into Europe plans to use the ruling as an additional argument in a legal challenge aimed at obtaining a refund of the anti-dumping duties paid to the EU between October 2006 and March 2011 on the leather shoes they imported from China and Vietnam. None of them imported shoes from any of the four Chinese firms whose claims were upheld by the high European court.
The case concerns the duty of 16.5 percent applied by the EU on shoes with leather uppers imported from China between October 2006 and March 2011. During the same period, a duty of 10.0 percent was applied on similar shoes imported from Vietnam. A panel of the World Trade Organization has been critical of the fact that the duties were imposed on exports from any Chinese or Vietnamese company, irrespective of whether they had been actually dumping or not.
Acting at the request of the European footwear industry federation, CEC, the European Commission opened an anti-dumping investigation on July 7, 2005, on shoes with leather uppers imported from China and Vietnam. According to well-informed sources in Brussels, more than 200 Chinese and Vietnamese companies said at the time that they were willing to be examined for compliance with normal market economy conditions, but the Commission selected only a sample of 10 Chinese and eight Vietnamese companies for its investigation, citing an excessive workload.
On July 25 and 26, the four companies that won the latest lawsuit asked to be included in the sample to demonstrate that they were eligible for so-called “market economy treatment,” or to obtain individual treatment and be exempted from the duties. But the four companies were included into the sample of 18 producers chosen by the Commission, which still represented more than 20 percent of Chinese exports toward the EU. In October 2006, the European Council approved the introduction of anti-dumping duties and at the end of that year the four Chinese companies filed a lawsuit. The duties were extended in December 2009 and lasted until the end of March 2011.
On March 4, 2010, a lower court of the EU, the General Court, dismissed the defendants' request for partial annulment of the anti-dumping measures and those of three other groups of firms. Two of the four groups appealed, and last week, on Feb. 2, the Court of Justice of the European Union overturned the lower court's decision on the grounds that the companies had not been given the chance to prove they were entitled to exemption.
Noting that the European anti-dumping regulations would have required the Commission's action on their claims within three months, the higher court ruled that the anti-dumping measures did not apply to the defendants and that the European Council will have to pay the defendants' legal costs, while the Commission and the CEC will have to pay their own costs.
The court's ruling didn't mention any refund of the duties that have been paid on the imports from those four companies. Vito Artioli, president of CEC, said the sentence doesn't invalidate “the battle fought against unfair Asian competition but shows the difficulties in obtaining the (anti-dumping) measures, which are now expired.”