In 2006 the EU imposed an anti-dumping duty on leather footwear made in China and Vietnam

In 2006 the EU imposed an anti-dumping duty on leather footwear made in China and Vietnam

The European Commission has indicated that to just-style that it may accept a European Court of Justice (ECJ) ruling against "anti-dumping" duties imposed on leather footwear made in China and Vietnam imported into the European Union (EU). The decision means there may now be claims for refunds of duties paid by retailers.

The duties were imposed in 2006 over concerns that these were being sold in the EU at below cost-price and have been the subject of some controversy ever since, with several retailers claiming they were illegal and demanding refunds.

"The Commission will assess the outcome of the ruling and its implications before advising Customs authorities on how to implement it," says Commission trade spokesperson Joseph Waldstein.

His comments followed an ECJ ruling on Thursday (4 February) that the 2006 regulation – which imposed duties on cheap imports from China (largely at 16.5%) and Vietnam (10%) – was partially invalid.

The ruling said that the EU had failed to consider certain manufacturers in these countries as independent free market actors when assessing the cost of making their shoes.

While China and Vietnam are not free market countries, meaning the EU generally makes assumptions about their manufacturers' costs by looking at similarly wealthy free market countries, World Trade Organization (WTO) rules say that companies within such territories can nonetheless prove themselves to be free market actors. These companies must have special assessments of their costs – and the court said that the EU wrongly failed to make such calculations in some instances.

There may now be claims for refunds of duties paid by retailers. UK retailer Clarks and Germany's Puma have both previously asked for repayments totalling more than EUR62.5m (US$70m).

EU member states the UK and Germany asked the ECJ to examine the duties after rejecting claims to the relevant Customs authorities from the respective retailers.

The court also ruled that requests for individual rates to be set on certain exporters had been ignored, and that this was another factor that made the regulation unlawful.

Waldstein would not be drawn on the nature of the advice to be given to Customs authorities in different EU countries, but the advice will include instructions on whether to continue to collect these anti-dumping duties and may cover how to handle claims for refunds.

Member states have in the past disagreed on the issue, with shoe-exporting countries Italy, Greece, Spain and France in favour of the duty, and importers Britain, Germany and the Netherlands opposing them.

Reacting to the ruling, the British Retail Consortium (BRC) noted its opposition to the duties. A spokesperson told just-style: "We did not think that they met the 'public interest' test in the anti-dumping regulation. In particular, any benefits for domestic footwear manufacturers would be outweighed by the additional costs that consumers would have to pay for imported footwear."

The spokesperson said anti-dumping rules were prone to legal challenges because of the "large degree of interpretation by the investigating authorities", such as the European Commission, which, said the BRC, did not have a spotless record. "This is not the first occasion when the courts have found the Commission's methodology to be faulty."

A spokesperson for UK retailer Clarks added: "We are aware of the ECJ decision and are currently reviewing it."