Sharp Corp. v. Council of the European Communities

[1992] E.C.R. 1635 (1992)

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Sharp Corp. v. Council of the European Communities

European Communities Court of Justice
[1992] E.C.R. 1635 (1992)

Facts

The European Commission (commission) (defendant) conducted an investigation of imports of plain-paper photocopiers (PPCs) from Japan under European Community (EC) antidumping regulations. Under Council Regulation 535/87 and other EC regulations, an antidumping duty was assessed on PPCs made by Sharp Corporation (plaintiff), a Japanese firm. Sharp challenged the assessment under the Treaty of Rome, which allowed judicial review of EC regulatory rulings. Sharp’s sales of PPCs involved transactions with Sharp Business K.K. (SBK), Sharp’s subsidiary in Japan. Sharp controlled SBK, assigning to SBK tasks typical of those carried out by some firms’ internal sales departments. Because Sharp and SBK were related entities, the commission did not use the prices of these transactions to establish the PPCs’ normal values in their home market. Instead, the commission used the PPCs’ prices in sales to independent entities to establish the PPCs’ normal values and export prices, the prices at which the PPCs were sold to importers in the EC market. Sharp argued that the commission had not correctly calculated the normal values, asserting that the commission should have either used the prices of PPCs charged in exports to a third country or constructed the normal values based on the firm’s costs and profits. Also, Sharp argued that the commission should have deducted SBK’s costs from the normal values, just as it deducted Sharp’s equivalent costs from the export prices. Sharp further argued that the commission’s failure to make consistent cost deductions meant that the commission was inappropriately comparing prices at two different levels of trade, that is, retail and wholesale. However, Sharp did not produce evidence supporting this assertion. The General Agreement on Tariffs and Trade (GATT) and a related international agreement, the 1979 Antidumping Code, required fair comparison between prices. Sharp argued that the commission’s method was not consistent with these agreements.

Rule of Law

Issue

Holding and Reasoning (de Almeida, J.)

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