Background
The European Commission investigated imports into the European Union of certain hot-rolled flat steel products originating in Türkiye. The investigation covered 2019 and included Ereğli Demir ve Çelik Fabrikaları TAŞ (Erdemir), İskenderun Demir ve Çelik AŞ (Isdemir), and their related trader, Erdemir Çelik Servis Merkezi Sanayi ve Ticaret AŞ (Ersem). In July 2021, the Commission imposed a definitive anti-dumping duty of 5% on their covered exports.
The companies sought annulment of the implementing regulation, challenging, among other things, the Commission’s conversion of sales and production-cost data into Turkish lira, its use of monthly exchange rates, its refusal to adjust for gains and losses under certain hedging contracts, and its treatment of selling, general, and administrative costs associated with Erdemir’s role in Isdemir’s domestic sales. The General Court dismissed the action, and the companies appealed on eight grounds.
The Court’s Holding
The Court of Justice dismissed the appeal in its entirety. It held that Article 2(10)(j) of Regulation (EU) 2016/1036 permitted the Commission to convert the relevant prices into Turkish lira for a fair comparison, even though the companies had already converted their accounting data into United States dollars. The provision does not require use of the exporter’s preferred conversion currency, and Article 2(5) does not prescribe a particular exchange rate for converting production costs.
The Court also held that the Commission did not have to use the exchange rate fixed by the companies’ euro-to-dollar hedging contracts when the Commission’s relevant conversion was from euros into Turkish lira. A forward rate must be considered only when the contract is directly linked to the export sale and covers the currency into which the Commission considers conversion necessary. The Court further upheld the General Court’s treatment of the companies’ cooperation obligations and its reasoning concerning SG&A costs: information supplied voluntarily in an anti-dumping investigation must be timely, verifiable, and sufficiently clear, and the Commission could add a calibrated amount where it could not verify whether Erdemir’s sales functions were properly reflected in Isdemir’s declared costs.
Key Takeaways
- The Commission has discretion to select the currency used to compare export price and normal value, subject to limited judicial review and the requirement of a fair comparison.
- The date-of-sale exchange-rate rule in Article 2(10)(j) concerns price conversions; it does not dictate the exchange rate used to convert production costs under Article 2(5).
- A hedging contract’s forward rate is not controlling unless the contract is directly linked to the export sale and covers the currency relevant to the Commission’s chosen conversion.
- Even cooperating exporters must provide clear, timely, and verifiable information sufficient for the Commission to understand and check their reported data.
Why It Matters
The judgment clarifies the Commission’s latitude in currency conversion during anti-dumping investigations and limits when exporters may require the use of rates fixed by hedging arrangements. A direct link between a hedge and an export sale is not enough if the hedge concerns currencies different from those used in the Commission’s comparison.
It also underscores that formal cooperation does not relieve investigated companies of the burden of supplying data that the Commission can verify. Where related-company transactions and allocated costs remain unclear after verification efforts, the Commission may make a reasoned adjustment rather than accept the reported figures unchanged.