Decision of the European Ombudsman in Case 1167/2016/ANA On

Decision of the European Ombudsman in case 1167/2016/ANA on the Commission’s handling of allegations of improper behaviour in the course of an anti-dumping investigation

Decision Case 1167/2016/ANA - Opened on 26/11/2016 - Decision on 18/05/2018 - Institution concerned European Commission ( No maladministration found ) |

The case concerned the alleged misconduct by two European Commission officials from its Directorate-General for Trade within the context of an anti-dumping investigation.

The complainants, the companies that were the subject of the investigation , argued that the alleged misconduct infringed the European Code of Good Administrative Behaviour on several counts as well as the European Ombudsman’s Public service principles and that the Commission failed to investigate the matter properly.

The Ombudsman inquired into this case and found that the Commission’s Investigation and Disciplinary Office (IDOC) assessed the evidence into the alleged misconduct and concluded that there was no evidence to justify a full administrative investigation.

Having examined the manner in which IDOC carried out its duties, the Ombudsman found that there was no maladministration as regards the handling of the Commission’s internal investigation. The responsible Commission’s department having properly dealt with the issue the Ombudsman thus found that there were no grounds to inquire further into the alleged misconduct.

That said, considering that in anti-dumping investigations which take place in third countries and where the Commission’s officials are in fact the face of the Union, extra care should be put to ensure that investigators behave impeccably even in adverse conditions. To this end, the Ombudsman made a suggestion for improvement recommending that the Commission issue appropriate internal guidelines to officials involved in anti-dumping investigations and, if necessary, provide appropriate and regular training.

Background to the complaint 1. The case is about the Commission’s handling of allegations of improper behaviour in the course of an anti-dumping investigation. It was brought by two Russian steel companies represented by a law firm that were subject to an anti-dumping investigation by the European Commission.

1 2. Under the Anti-Dumping Regulation [1] , a product is to be considered as being dumped if its export price to the Union is less than a comparable price for a like product, in the ordinary course of trade, as established for the exporting country. In order to determine the existence and effect of dumping the Commission may carry out an investigation. During the investigation, the Commission may conduct on-the-spot verification visits to examine the records of the companies concerned [2] . If it concludes that there is injurious dumping, the Commission may impose additional duties (anti-dumping duties) to the extent necessary to counteract the injurious effect of dumping [3] .

3. In this case, the anti-dumping investigation concerned cold-rolled flat steal originating in the Russian Federation (hereinafter, ‘Russia’) and the People’s Republic of China [4] . The Commission conducted on-the-spot verification visits at the complainants’ premises in Russia from 29 September to 2 October 2015 (Complainant A’s premises) and from 5 to 8 October 2015 (Complainant B’s premises). These verifications were conducted by two officials of the Commission’s Directorate General for Trade (hereinafter, ‘DG Trade’).

4. On 13 November 2015, the complainants submitted a complaint to DG TRADE in which they argued that the behaviour of the two DG TRADE officials amounted to bullying, psychological harassment, and intimidation. In addition, they argued that the DG TRADE officials created a tense atmosphere by showing disdain for the complainants’ employees. Furthermore, they contended that one of the officials stated repeatedly that he hated Russia while the other official lost his temper during the visit. The complainants therefore submitted that the officials had infringed the European Code of Good Administrative Behaviour (ECGAB) [5] and the Commission’s Code of Good Administrative Behaviour (CGAB) [6] .

5. On 31 May 2016, the complainants wrote to the Commission’s Directorate General for Human Resources and Security (hereinafter, ‘DG HR’). First, they contended that the behaviour of the two officials constituted a breach of the Staff Regulations [7] . Second, they argued that their misconduct had adversely affected and vitiated the outcome of the anti-dumping investigation. They therefore requested DG HR’s Investigation and Disciplinary Office (hereinafter, ‘IDOC’) to open an administrative investigation against the two officials.

6. In its reply of 23 June 2016, IDOC informed the complainants that it had examined the allegations thoroughly through a series of verifications. On this basis, IDOC stated that, first, both officials and both interpreters present during the verification visits concurred that there had only been tension at the premises of one of the complainants; that, secondly, they all agreed that this tension was primarily between one official and a representative of the complainants’ law firm; in fact, both officials and one interpreter argued that it was the law firm’s representative who demonstrated an arrogant attitude towards the DG TRADE officials. Furthermore, IDOC noted that in their long career, neither official had been subject of any complaint or remark, whether formal or informal. Lastly, taking into account that a tense atmosphere is not unusual given the nature of verification visits, IDOC concluded that there was no “beginning of proof” that the officials behaved inappropriately or breached their statutory obligations.

7. Concerning the complainants’ allegation that the misconduct had affected the outcome of

2 the anti-dumping investigation, IDOC pointed out that anti-dumping proceedings are not based solely on inspections. Indeed, the process leading up to the imposition of anti-dumping duties includes the possibility for the concerned parties to exercise their rights of defence. IDOC added that, in this case, the complainants had made full use of their rights, having taken part in hearings and having submitted written observations.

8. In view of the above, IDOC decided not to initiate an administrative inquiry on this matter.

9. Dissatisfied with IDOC’s reply, on 1 August 2016, the complainants turned to the European Ombudsman. The inquiry 10. The Ombudsman opened an inquiry into the following aspects of the complaint:

1) The Commission (DG TRADE) committed maladministration through the misconduct of two DG TRADE officials during the verification visits carried out in the course of an anti-dumping investigation.

2) The Commission (IDOC) committed maladministration by not investigating properly the alleged misconduct of the DG TRADE officials during the verification visits.

11. In the course of the inquiry, the Ombudsman inquiry team carried out an inspection of the Commission’s file concerning the present case and the documents held in this case by both DG TRADE and IDOC. The Ombudsman's analysis takes into account the arguments and views put forward by the parties. Preliminary remark 12. The purpose of the IDOC investigation was to investigate the alleged misconduct of the two DG Trade officials. Thus, there may only be grounds to inquire into the first issue raised by the complainants if it is found that IDOC, the Commission’s responsible department for dealing with such issues, failed to investigate properly the conduct of the officials in question itself. Therefore, the Ombudsman considers it appropriate to examine the second issue first. IDOC’s investigation Arguments presented by the parties

13. The complainants submit that IDOC did not comply with the requirements of the European Code of Good Administrative Behaviour and the Commission’s Code of Good Administrative Behaviour, thereby committing maladministration.

14. First, they note that IDOC’s investigation was surprisingly rushed, as it lasted for only three weeks. They submit that IDOC’s analysis was superficial, thereby infringing the principle of diligence.

15. Second, they contend that IDOC did not provide them with an opportunity to explain or elaborate on the allegations made, whether in the course of a meeting or a hearing. They were also not offered the chance to comment on IDOC’s findings before they became final. Thus, the complainants argue that IDOC thereby breached their right to be heard [8] .

3 Moreover, they argue that IDOC appears to have taken evidence only from one interpreter (hereinafter, ‘Interpreter A’), without contacting the other interpreter (hereinafter, ‘Interpreter B’). Indeed, Interpreter B had only been contacted by DG TRADE in December 2015.

16. Third, they submit that IDOC’s decision of 23 June 2016 lacked reasoning for the conclusion arrived at [9] .

17. Fourth, they contend that IDOC’s decision failed to indicate the complainants’ right to bring a complaint to the Ombudsman, despite the decision adversely affecting their rights [10] .

18. Lastly, the complainants argue that IDOC’s statement that the officials who conducted the on-the-spot investigations had not previously been subject to a complaint is factually incorrect. They contend that one of the officials was the subject of a complaint before the International Labour Organisation (hereinafter, ‘ILO’), which could be confirmed by a third party witness statement.

19. During the Ombudsman’s inspection of the file, IDOC provided detailed clarifications concerning the handling of this case. IDOC explained that it did not carry out an investigation but preliminary verifications to determine whether a full administrative investigation should be initiated. That preliminary verification procedure included: a) the evaluation of incoming information, b) the conduct of preliminary verifications, and c) the establishment whether the “beginning of proof” threshold was reached.

20. Under a), IDOC analysed the information submitted by the complainants. Under b), as DG TRADE had carried out interviews of both officials and both interpreters, IDOC examined the file and evaluated the available evidence. Under c), IDOC reached the conclusion that there is no “ beginning of proof ” because of the inconsistency between the complainant’s allegations and the evidence obtained by DG TRADE from the two investigators and the two interpreters present at the verifications. For instance, while the complainant accused the DG TRADE officials of administrative misconduct in both verification visits, none of the persons interviewed by DG TRADE confirms that there was a problem in the verification visit at the premises of one of the complainants.

21. Concerning the complainants’ submission that IDOC’s investigation was rushed and breached the principle of due diligence, IDOC explained that the normal timeframe for the conduct of preliminary verifications is three months. However, if a case is given priority, then IDOC will carry out its assessment within one month. The complainants’ case was treated as a priority because (i) the allegations were of a serious nature, (ii) they concerned the implementation of an EU policy and were linked to an on-going decision-making of the Commission (anti-dumping), and (iii) the source of the incoming information was external.

The Ombudsman's assessment

4 22. As concerns the complainants’ view that IDOC breached its duty of diligence by reaching its conclusion in a short period of time, the inquiry has not brought to light circumstances that support the submission. The general rules of the Commission are based on the assumption that preliminary verifications can be made within one month if need be. There are no factors that could call into question that assumption. There are neither specific circumstances of this case that show that one must depart from that assumption in this case. Therefore, the Ombudsman therefore finds it reasonable that IDOC managed to conclude its preliminary verifications within three weeks.

23. As regards the complainants’ contention that IDOC infringed their right to be heard, the Ombudsman makes the preliminary observation that, according to the applicable rules [11] , when IDOC carries out an administrative investigation [12] , it may summon any person subject to the Staff Regulations and needs to respect the right to be heard of the officials under investigation. The applicable rules do not confer any right to be heard upon the complainants.

24. Moving on to the question whether the complainants’ right to be heard stemming from the principle of good administrative behaviour has been infringed during IDOC’s conduct of preliminary verifications, the Ombudsman takes the view, on the basis of the information obtained in this inquiry, that IDOC took due account of the detailed information and evidence provided by the complainants in support of their allegations and juxtaposed it with the evidence collected by DG TRADE. On the basis of these verifications, IDOC concluded that there were inconsistencies between the complainants’ allegations and the evidence obtained from DG TRADE and that, therefore, IDOC could not propose opening an administrative investigation into the officials’ conduct. In view of this, the Ombudsman considers that IDOC was not required to grant any additional procedural rights to the complainants. Therefore, the complainants’ allegation in this connection is not convincing.

25. Regarding the complainants’ assertion that only one of the two interpreters was interviewed, the Ombudsman notes that the inspection of the file clarified that IDOC relied on the evidence collected by DG TRADE which includes the observations put forward by both officials as well as the records of DG TRADE’s telephone interviews with both Interpreter A and Interpreter B.

26. Concerning the complainants’ argument that IDOC’s decision lacked proper reasoning, the Ombudsman considers that IDOC provided an account of the inconsistences it found between the complainants’ allegations and the evidence obtained from DG TRADE and thus provided a clear explanation about why a full administrative investigation was not justified in this case.

27. Furthermore, the complainants contend that IDOC’s decision failed to mention the possibility of lodging a complaint with the Ombudsman. The complainants are correct to raise the issue that good administrative behaviour requires that when an EU institution takes a decision adversely affecting the rights or interests of a private person, it must indicate the available remedies including the right to complain to the European Ombudsman [13] . In this case, it is clear that IDOC did not do that. However, it is clear that the absence of this

5 information did not have a substantive effect on the complainants’ right, which in fact they exercised, to lodge a complaint with the Ombudsman. In view of this, the Ombudsman does not consider it necessary to take any additional action on this account other than express her trust that IDOC will ensure that the indication of the right to complain to the European Ombudsman becomes a standard part of IDOC’s reply in similar cases.

28. Lastly, the complainants claim that one of the officials was the subject of a previous complaint to ILO. However, they were not able to produce any evidence to substantiate such allegation and to make a clear link to the matter of this case. The Ombudsman thus concludes that this allegation cannot be sustained.

29. Therefore, the Ombudsman concludes that the complainants’ assertion that IDOC failed to conduct a proper investigation in this case cannot succeed. Consequently, the Ombudsman finds no maladministration by the Commission regarding this aspect of the case. The alleged misconduct of the DG Trade officials Arguments presented to the Ombudsman

30. The complainants submit that the two DG TRADE officials breached the principles of fairness [14] , impartiality [15] , objectivity [16] , integrity [17] , non-discrimination [18] , and courtesy [19] . They also argued that the behaviour of the officials during the on-the-spot investigations breached the complainants’ right to human dignity [20] . They consider that the two officials failed to meet the highest professional standards [21] and at times acted arbitrarily [22] , lacking respect for others [23] .

The Ombudsman's assessment

31. The Ombudsman inquired into the second aspect of this case (paragraphs 22 to 28 above) and found that IDOC, the responsible Commission’s department, assessed the evidence into the alleged misconduct and concluded that there was no evidence to justify a full administrative investigation. Having examined the manner in which IDOC carried out its duties, the Ombudsman found that there was no maladministration as regards the handling of IDOC’s internal investigation. The responsible Commission department having properly dealt with the issue, the Ombudsman thus finds that there are no grounds to inquire further into the alleged misconduct.

32. That being said, the inquiry carried out by the Ombudsman revealed how important it is for the Commission, and in this case DG TRADE, to always ensure that EU officials carrying out on-the-spot investigations in third countries are aware of the need to always act and behave in accordance not only with professional rules and ethics but also in accordance with the principles enshrined in the European Code of Good Administrative Behaviour. After all, given that anti-dumping investigations take place in third countries and the Commission’s officials are in fact the face of the Union, extra care should be put to ensure that investigators behave impeccably even in adverse conditions.

6 33. During the inquiry, the Ombudsman found that, at present, the only guidance provided by DG TRADE regarding verification visits in third countries appears to be a letter addressed to the companies concerned. This letter highlights the importance of ethics for Commission officials and the fact that officials may not receive gifts. The Ombudsman considers that this does not suffice and it would thus be useful to issue internal guidelines to DG TRADE officials involved in verification visits in the field of anti-dumping. Such guidelines could set out the requirements of good administrative behaviour and provide links to the Ombudsman’s public service principles and the European Code of Good Administrative Behaviour. If necessary, these guidelines could be complemented by appropriate and regular training. To this end, the Ombudsman makes a related suggestion for improvement. Conclusions Based on the inquiry, the Ombudsman closes this case with the following conclusions:

There was no maladministration.

The complainant and the Commission will be informed of this decision . Suggestions for improvement The Commission (DG Trade) should issue appropriate internal guidelines on the requirements flowing from the principles of good administration to officials conducting verification visits in the context of anti-dumping investigations and, if necessary, provide appropriate and regular training.

Emily O'Reilly

European Ombudsman

Strasbourg, 18/05/2018

[1] Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union, OJ L 176, 30.6.2016, p. 21 available at http://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154702.en.L176-2016.pdf .

[2] Article 16 of the Anti-Dumping Regulation.

[3] Articles 9 of the Anti-Dumping Regulation.

[4] Notice of initiation of an anti-dumping proceedings concerning imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation 2015/C 161/07, OJ C 161, 14.5.2015, p. 9, available at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015XC0514(02)&from=EN .

7 Eventually, the Commission imposed definitive anti-dumping duties on imports of cold rolled flat steel products originating from Russia, including of the complainants’: see, Commission Implementing Regulation (EU) 2016/1328 of 29 July 2016 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain cold rolled flat steel products originating in the People's Republic of China and the Russian Federation, OJ L210, 4.8.2016, p. 26, available at http://trade.ec.europa.eu/doclib/docs/2016/august/tradoc_154831.def.en.L210-2016.pdf

The complainants have brought an action for annulment against the Commission Regulation imposing definitive anti-dumping duties.

See Case T-752/16 Novolipetsk Steel v Commission and Case T-753/16 Severstal v Commission, pending before the General Court of the European Union.

[5] https://www.ombudsman.europa.eu/en/resources/code.faces

[6] https://ec.europa.eu/info/sites/info/files/code-of-good-administrative-behaviour_en.pdf

[7] The complainants referred in particular to Article 86(1) of the Staff Regulations. A consolidated version of the Staff Regulations is available at http://ec.europa.eu/civil_service/docs/toc100_en.pdf .

[8] The complainants rely on Article 3 of the CGAB and Article 16 of the ECGAB.

[9] Article 18(2) of the ECGAB and Article 3 of CGAB.

[10] Article 19 of the ECGAB and Article 3 of the CGAB.

[12] It should be added here that IDOC has not carried out a full administrative investigation. It merely carried out preliminary verifications on the basis of which it concluded that there was no “beginning of proof” that would justify an administrative investigation,.

[13] Articles 19 and 26 of the European Code of Good Administrative Behaviour.

[14] Article 11 of the ECGAB.

[15] Article 8 of the ECGAB.

[16] Principle No. 3 of the Public service principles for the EU civil service (hereinafter, ‘Public service principles’), available at https://www.ombudsman.europa.eu/en/resources/publicserviceprinciples.faces .

[17] Principle No. 2 of the Public service principles.

8 [18] Article 5(3) of the ECGAB.

[19] Article 12 of the ECGAB.

[20] The complainants refer to Article 2 of the Treaty on European Union, according to which “ [t]he Union is founded on the values of respect for human dignity” .

[21] Principle No. 1 of the Public service principles.

[22] Articles 8 and 9 of the ECGAB.

[23] Principle No. 4 of the Public service principles.