The Court of Justice of the European Union (CJEU) dismissed the appeal brought by two Turkish steel companies against the confirmation of a definitive anti-dumping duty (EuGH (CJEU), judgment of 3 September 2026 – C‑498/24). The case centred on adjustments made when comparing the export price and normal value, the classification of a related distribution company and the treatment of currency hedging. In addition to bearing their own costs, the companies must also pay the costs incurred by the European Commission.
Anti-dumping duty on hot-rolled flat products
The proceedings concerned imports of certain hot-rolled flat products of iron, non-alloy steel or other alloy steel originating in Türkiye. Company C. manufactures and exports such products. B. is a Turkish trading and export company related to C.
On 14 May 2020, the European Commission initiated an anti-dumping investigation. The investigation period ran from 1 January to 31 December 2019. For the purpose of examining trends relevant to injury, the period from 1 January 2016 to the end of the investigation period was considered.
By Implementing Regulation (EU) 2021/9, the Commission initially imposed a provisional anti-dumping duty of 7.6% on the two companies’ exports of the product concerned. Implementing Regulation (EU) 2021/1100 followed on 5 July 2021. It imposed a definitive anti-dumping duty of 7.3% on products manufactured by the companies and ordered the definitive collection of the provisional duty.
The measures would have expired on 7 July 2026 within the prescribed period. Before that date, an expiry review was initiated by Notice C/2026/3536 of 6 July 2026.
Proceedings before the General Court of the European Union
On 29 September 2021, C. and B. brought an action seeking the annulment of the Implementing Regulation insofar as it concerned their products. The General Court of the European Union (General Court) dismissed the action in its entirety by judgment of 8 May 2024 in Case T‑630/21.
Four pleas challenging the Regulation
The companies based their action essentially on four points:
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They challenged the adjustment relating to the commission paid to B. In their view, the adjustment exceeded the commission actually paid. They also argued that B. had acted as an internal sales department rather than as an agent working on a commission basis.
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They challenged an adjustment under Article 2(10)(b) of Regulation (EU) 2016/1036 because, in their view, such an adjustment required the payment of import charges.
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They objected to the refusal to calculate the dumping margin on a monthly or quarterly basis.
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They challenged the Commission’s failure to include gains and losses from currency hedging in the adjustment.
The General Court rejected those objections. The companies appealed that decision to the CJEU.
Standard for comparing normal value and export price
Under Article 2(10) of Regulation (EU) 2016/1036, a fair comparison must be made between the export price and the normal value. In principle, that comparison must be made at the same level of trade and in respect of sales made at dates as close to one another as possible.
Where comparability is lacking, adjustments may be made upon request for differences that are shown to affect prices and thus their comparability. Any duplication of adjustments must be avoided.
Commissions and comparable mark-ups
Article 2(10)(i) of the Regulation covers differences in commissions paid in respect of the sales concerned. The term “commission” also includes the mark-up received by a trader of the product or the like product if the functions performed by that trader are similar to those of an agent working on a commission basis.
Where a manufacturer relies on a particular adjustment, it must generally demonstrate and prove that the conditions for that adjustment are satisfied. By contrast, where the EU institutions intend to make a downward adjustment to the export price on account of the activities of a related distribution company, they must at least provide consistent evidence that the company performs functions similar to those of an agent working on a commission basis.
Adjustment for the services provided
C. and B. challenged the Commission’s treatment of the commission paid to B. when determining the export price. They argued that the payment merely covered indirect selling, general and administrative expenses. Such expenses would not have been deducted from the export price even if they had been incurred directly by C.
Content of the agreement between the companies
According to the General Court’s findings, C. and B. had entered into an agreement that assigned the following tasks to B. in particular:
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B. reviewed letters of credit.
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The company prepared documents for customs clearance and loading and subsequently processed those documents.
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After loading, it prepared the required export documents.
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It carried out export-related procedures such as collecting payment for the products.
A commission of one US dollar per tonne was payable for products sold by B. for export. B. retained the profits generated from that remuneration.
The General Court classified the tasks assumed by B. as activities usually performed by an agent when exporting products manufactured by a producer. Those functions had no equivalent in the determination of the normal value. No commission had been incurred in respect of domestic sales.
The CJEU upheld that assessment. The General Court had not relied solely on the existence of a commission but had also considered its purpose, the content of the agreement and the tasks actually performed. It had therefore made no error of law in finding that the Commission was entitled to make the adjustment under Article 2(10)(i).
No single economic entity between CM and ÇOTAŞ
An adjustment under Article 2(10)(i) is precluded where a manufacturer in a third country and its distributor responsible for exports to the European Union form a single economic entity. In such a case, the distributor may be equivalent to an internal sales department rather than an agent working on a commission basis.
Overall assessment of the economic circumstances
According to the CJEU, the existence of a single economic entity depends on an overall assessment of all relevant circumstances. The economic reality of the relationship is decisive. In particular, it must be examined whether the manufacturer exercises economic control over the distributor and assigns it tasks that would usually be performed by an internal sales department.
The significance of individual factors cannot be determined in the abstract. Instead, each case must be assessed on its own facts.
The Commission and the General Court took account of the following factors, among others:
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the agreement concerning the payment of a commission,
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C.’s direct export sales,
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C.’s direct domestic sales,
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C.’s 99.98% shareholding in B.,
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the absence of purchases by B. from unrelated suppliers, and
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the fact that both companies were located in the same building.
Direct sales by the manufacturer
Although C. had not made any direct sales of the product concerned to the European Union, it had made direct export sales to other countries as well as direct sales of other products both within and outside the European Union.
In the CJEU’s view, the General Court was entitled to consider those sales as one of several relevant factors. In doing so, it had considered not merely their existence but also their volume. Direct sales by the manufacturer may indicate that the related distributor does not perform the function of a sales department integrated into the manufacturer’s organisation.
The fact that C. handled all domestic sales without the involvement of a distributor could also be taken into account in the overall assessment. That circumstance indicated that C. had its own internal sales structure. Together with the direct export sales, this could be regarded as evidence against the existence of a single economic entity in relation to the export activities.
Retention of profits from the commission
The CJEU also confirmed that B.’s retention of the profits generated from the commissions could be considered an indication of its economic independence. The fact that this factor had not been expressly relied upon in earlier decisions did not preclude it from being taken into account.
The transfer pricing principles of the Organisation for Economic Co-operation and Development did not lead to a different assessment. Those principles concern the taxation of profits earned by related companies. By contrast, Article 2(10)(i) focuses on the economic reality of the functions performed by the manufacturer and the distributor.
The challenges to the assessment of the evidence were likewise unsuccessful. In some instances, the companies had failed to identify precisely which passages in the documents submitted had allegedly been distorted. In other respects, the CJEU considered that their arguments sought a fresh assessment of the facts and evidence, which is not available in appeal proceedings.
Notional determination of an appropriate commission
A further point of dispute concerned the amount of the commission to be deducted from the export price. The companies objected to applying the approach set out in Article 2(9) of the Regulation to the quantification of an adjustment under Article 2(10)(i).
Article 2(9) permits the export price to be constructed where it is unreliable because of an association or compensatory arrangement between the exporter, importer or a third party.
Difference between the basis for and amount of the adjustment
The CJEU distinguished between two questions. First, it must be determined whether the related distributor acts like an agent working on a commission basis, with the result that Article 2(10)(i) applies. Separately, the amount of the required adjustment must be determined.
As regards the first question, there is no presumption that related companies do not operate independently. The Commission must demonstrate that the distributor performs the corresponding agency functions.
Once it has been established that the provision applies, however, the corporate relationship may be taken into account when determining an appropriate amount for the commission. Otherwise, according to the CJEU, Article 2(10)(i) could be deprived of its practical effectiveness.
The presumption that a commission agreed between related companies may be unreliable is rebuttable. The manufacturer concerned may submit evidence demonstrating that the remuneration actually paid is appropriate.
Right to be heard respected
The companies also argued that the analogous application of Article 2(9) had been mentioned for the first time in the definitive Regulation. They therefore claimed that they had been unable to comment on it effectively.
The CJEU rejected that argument. The provisional Regulation had already made clear that the Commission intended to deduct the related distributor’s selling, general and administrative expenses, as well as a profit determined on the basis of other data, from the export price.
The companies had therefore been informed in good time of the basis and method of the adjustment. The subsequent reference to the analogous application of Article 2(9) had changed neither the nature nor the amount of the adjustment. Accordingly, there had been no infringement of the right to be heard.
Currency hedging had no effect on conversion
The export sales had been concluded in euros. For the comparison with domestic sales, the Commission converted the amounts directly from euros into Turkish lira.
The companies had entered into hedging contracts that fixed an exchange rate between the euro and the US dollar. They argued that the rate stipulated in those contracts had to be taken into account under Article 2(10)(j).
The conversion actually required is decisive
Under Article 2(10)(j), where a currency conversion is required, the exchange rate applicable on the date of sale must generally be used. Where a forward currency transaction is directly linked to the export sale, however, the exchange rate applicable to the forward transaction must be used.
According to the CJEU, that provision governs how the applicable exchange rate is to be determined. It does not, however, specify the currency into which the conversion must be made. In selecting that currency, the Commission has a margin of discretion that is subject to limited judicial review.
A hedging contract must not only be directly linked to the export transaction. It must also relate to the currency into which the Commission converts the prices for the purpose of making a fair comparison.
Since the Commission had converted the amounts directly from euros into Turkish lira, the exchange rate between the euro and the US dollar stipulated in the hedging contracts was not relevant to that conversion. The CJEU therefore upheld the dismissal of this ground of appeal.
No monthly or quarterly dumping margin
The companies further challenged the Commission’s failure to calculate a monthly or quarterly dumping margin. They relied on changes in manufacturing costs and differences in the timing of sales.
The CJEU ultimately upheld the General Court’s assessment. A calculation based on several shorter periods may be required in certain factual circumstances where differences in the timing of sales impair comparability. However, the General Court had examined the companies’ arguments and, as part of its assessment of the facts, found them insufficient.
The allegations of distortion raised on appeal were partially inadmissible because the evidence or passages allegedly assessed incorrectly had not been identified with sufficient precision. In other respects, the documents cited did not reveal any manifest distortion.
It therefore remained established that the Commission had not made a manifest error of assessment by maintaining the calculation of an annual dumping margin.
Appeal dismissed in its entirety
None of the six grounds of appeal resulted in the judgment of the General Court being set aside. In particular, the CJEU confirmed that:
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The commission paid to B. could be taken into account when adjusting the export price.
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C. and B. were not to be classified as a single economic entity in respect of the export sales concerned.
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The corporate relationship could be taken into account when notionally determining an appropriate amount for the commission.
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The companies’ right to be heard had been respected.
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The hedging contracts between the euro and the US dollar were not relevant to the direct conversion from euros into Turkish lira.
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In the circumstances established, the Commission was not required to calculate the dumping margin on a monthly or quarterly basis.
The appeal was therefore dismissed in its entirety. In addition to bearing their own costs, C. and B. must pay the costs incurred by the European Commission in the appeal proceedings.
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