## Facts

- The European Commission investigated alleged dumping of plain-paper photocopiers (PPCs) imported from Japan and proposed definitive anti-dumping duties later adopted by the Council in Regulation (EEC) No. 535/87.
- Sharp Corporation manufactured PPCs in Japan and sold a substantial portion of its domestic output through Sharp Business K.K. (SBK), a wholly owned subsidiary that handled sales and distribution in Japan.
- Treating Sharp and SBK as related entities, the Commission declined to use intra-group transfer prices between Sharp and SBK to determine “normal value,” viewing SBK as functioning like an internal sales department rather than an independent intermediary.
- The Commission determined normal value primarily from Japanese sales to independent purchasers and determined export price from sales to independent importers in the European Community.
- In comparing normal value and export price, the Commission made certain adjustments and deducted some selling/distribution-related costs on the export side but did not make corresponding deductions for SBK’s home-market costs from normal value.
- Sharp brought an annulment action challenging the regulation insofar as it applied to Sharp, arguing (among other points) that the methodology produced an unfair comparison and an overstated dumping margin.

## Issues

1. Whether the Council and Commission could determine normal value using domestic sales to independent customers where intra-group transfer prices were considered unreliable, rather than using third-country export prices or a cost-plus constructed value.
2. Whether the institutions violated the “fair comparison” requirement by deducting certain costs from export price but not deducting SBK’s domestic selling/distribution costs from normal value, allegedly comparing prices at different levels of trade.
3. Whether alleged inconsistency with GATT and the 1979 Anti-Dumping Code required annulment, and what standard of judicial review applies to the institutions’ economic assessments.

## Decision

- The Court of Justice dismissed Sharp’s action and upheld the anti-dumping duties as applied to Sharp.
- The Court held the institutions acted within their discretion in selecting domestic sales to independent purchasers as the basis for normal value where such sales were available and intra-group prices were not reliable indicators of arm’s-length terms.
- The Court found no breach of the fair-comparison requirement because Sharp did not substantiate that the comparison involved materially different trade levels requiring additional adjustments, and the regulation did not mandate rigid symmetry in cost deductions.
- The Court rejected reliance on GATT/Anti-Dumping Code arguments as a basis for annulment on the record presented and found no manifest error or misuse of powers in the institutions’ assessment.
- Costs were awarded against Sharp.

## Legal Principles

- In EU anti-dumping determinations, the institutions have broad discretion to choose an appropriate normal-value methodology, particularly where related-party transactions may not reflect arm’s-length conditions and sufficient domestic sales to independent buyers exist.
- The “fair comparison” requirement does not impose a mechanical rule that every export-side adjustment must be matched by an equivalent normal-value-side deduction; the question is whether differences materially affecting comparability warrant allowances.
- Judicial review of anti-dumping measures is limited: the applicant must identify a specific legal error or show a manifest error of appraisal or misuse of powers in the institutions’ economic and technical assessments.
- International anti-dumping disciplines may inform interpretation of EU rules, but do not, without clear legislative incorporation, automatically supply directly enforceable grounds for invalidating EU measures in an annulment action.

## Conclusion

The Court upheld definitive anti-dumping duties on Sharp’s photocopiers, concluding that the EU institutions permissibly based normal value on domestic sales to independent purchasers, were not required to deduct SBK’s domestic costs to mirror export-side adjustments absent proof of non-comparable trade levels, and had not committed a manifest error warranting annulment.


Sharp Corp. v. Council of the Eur. Communities, Case C-179/87, 1992 E.C.R. I-1635 (Ct. J. Feb. 27, 1992)