G/SG/N/8/IDN/22  
G/SG/N/10/IDN/22  
 
17 October 2019  
(19-6790) Page: 1/6 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER A RTICLE 12.1(B) OF TH E AGREEMENT ON  
SAFEGUARDS ON FINDIN G A SERIOUS INJURY O R THREAT  
THEREOF CAUSED BY IN CREASED IMPORTS  
 
NOTIFICATION OF A PR OPOSAL TO IMPOSE A M EASURE  
INDONESIA  
(Evaporators ) 
The following communication, dated 17 October  2019, is being ci rculated at the request of the 
delegation of Indonesia.  
 
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Pursuant to Article 12.1(b) of the WTO Agreement on Safeguards, the Government of the Republic 
of Indonesia, hereinafter referred as "GOI", hereby notifies to the Committee on Safeguards on its 
findings of serious injury or threat thereof caused by the increased imports.  
A. GENERAL BACKGROUND  
1. Initiation of Investigation  
On 15 May 2019, KPPI ( Komite Pengamanan Perdagangan Indonesia /Indonesi an Safeguards 
Committee) hereinafter referred as the "Investigating Authority", received an application from PT. 
Fujisei Metal Indonesia (PT. FMI) hereinafter referred as the Applicant, requested for the imposition 
of a safeguard measure on the importation s of Evaporators under HS. code 8418.99.10.  
Based on the examination of the above -mentioned application, the investigating authority initiated 
a safeguard investigation on 12 June 2019. The initiation of the investigation was published in the 
national daily newspaper ("Bisnis Indonesia"), and Ministry of Trade website. The said initiation was 
also notified in the WTO document G/SG/N/6/IDN/30, circulated on 14 June 2019.  
2. Period of Investigation  
The period of investigation covers 2015 to 2018 . 
3. Major Proportion  
The total production of the Applicant is 94.22% from total domestic production of the Subject Goods, 
therefore it represents a major proportion as required by Article 4.1(c) of the WTO Agreement on 
Safeguards.  
4. Views and Comments of the Interested Parties  
In accordance with Article 3.1 of the WTO Agreement on Safeguards, during the process of 
investigation, the Investigating Authority has provided opportunities to all interested parties, to 
submit their views, evidences, comments, and res ponses concerning the investigation. In light of 
the aforementioned, the Investigating Authority has held public hearing on 3 July 2019.  G/SG/N/8/IDN/22 • G/SG/N/10/IDN/22  
 
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  B. INFORMATION ON WHETH ER THERE IS AN ABSOL UTE INCREASE IN IMPO RTS OR AN 
INCREASE IN IMPORTS RELATIVE TO DOMESTIC  PRODUCTI ON 
In the light to provide evidence whether there is an absolute increase in imports or an increase in 
imports relative to domestic production, the Investigating Authority has analyzed import data of the 
Subject Goods during the period of investigation.  
1. Absolute increase in imports  
Table 1 . Volume of Imports  
Description  Unit Year 
2015  2016  2017  2018  
Volume of Imports HS. Ex. 8418.99.10  Ton 2,911  3,407  4,594  3,465  
Growth  %  17.04 34.84 (24.58 ) 
Trend (2015 -2017)  % 8.56 
Source:  Statistics Indonesia/ Badan Pusat Statistik (BPS) . 
It can be seen from the Table 1, import volume of the Subject Goods increased in absolute terms 
with a trend of 8.56%, during the period of investigation. The volume of imports was increasing 
from 2015 to 2017, with the biggest increased in 2017 with a growth of 34.84%. Although the 
volume of imports dropped slightly to 3,465 tons in 2018, but the amount is greater than volume of 
imports in 2015 and 2016.  
2. Relative increase in imports to Total Domestic Production  
Table 2. Volume of Imports, Total Domestic Production, and Relative to  
Total Domestic Production  
Description  Unit Year 
2015  2016  2017  2018  
Volume of Imports  
HS. Ex. 8418.99.10  Ton 2,911  3,407  4,594  3,465  
Total Domestic Production  Index  100 105 108 95 
Imports Relative to Total Domestic Production  Index  100 111 146 126 
Trend (2015 -2018)  % 10.04  
Source:  Statistics Indonesia and as verified by Investigating Authority . 
Based  on the Table 2, imports relative to domestic production have also increased significantly  with 
a trend of 10.04% . It increased sharply from 100 index point in 2015 to 111 and 146 index point in 
2016 and 2017 respectively.  Although the imports relative was dropped slightly to 126 index point 
in 2018 compared to previous year, but the amount  is more than the imports r elative in 2015 and 
2016. 
3. Imports from Main Countries  
Table 3. Imports Shares  
Country  Unit Year 
2015  2016  2017 2018  
People's Republic of China (PRC)  % 89.86  90.20  90.66  94.69  
Thailand  % 6.35 6.61 5.49 3.34 
Others  % 3.79 3.19 3.85 1.97 
Total % 100 100 100 100 
Source:  Statistics Indonesia/Badan Pusat Statistik (BPS) . 
From the table 3, the biggest shares of import from 2015 to  2018 in the domestic market  was PRC, 
which its shares of import in 201 8 accounted for 94 .69%.  Other country that has share of imports 
above 3% during the period of investigation is Thailand , which its shares of import in 201 8 was 
3.34%. G/SG/N/8/IDN/22 • G/SG/N/10/IDN/22  
 
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  C. EVIDENCE OF SERIOUS INJURY OR THREAT THE REOF CAUSED BY INCRE ASED 
IMPORTS  
In a view to determine the existence of serious injury or threat of serious injury that is  caused by 
increased imports, the Investigating Authority has analyzed and made an evaluation  of all relevant 
factors in objective and quantifiable nature s. The follo wing analyses  are based on data provided by 
the Applicant , which has been verified by the Investigating Authority . 
1. Evidence of serious injury or threat of serious injury  
Table 4. National Consumption, Volume of Imports, and Market Shares  
No. Description  Unit Year Trend  
2015 -2018 
(%) 2015  2016  2017  2018  
1. National Consumption  Index  100 114 142 113 5.99 
2. Volume of Imports  Ton 2,911  3,407  4,594  3,465  8.56 
3. Applicant's Domestic Sales  Index  26.86  28.17  26.13  25.78  (1.96) 
4. Non-Applicant's Domestic Sales  Index  0.13 0.23 0.25 0.20 16.36  
5. Imports ' market share  Index  100 103 111 105 2.42 
6. Applicant's market share  Index  37 34 25 31 (7.45) 
7. Non-Applicant's market share  Index  0.18 0.27 0.25 0.25 9.10 
Source:  Statistics Indonesia and as verified by the Investigating Authority . 
a. It can be seen from Table 4 that national consumption  of the subject goods  increased 
during the investigation period with a trend of 5.99%. However, the increased of national 
consumption in that period could not be utilized by the Domestic Industries.  
b. The Applicant's domestic sales declined in a trend of 1.9 6% during the investigation  period  
due to the pressure of imports . 
Table 5. The Applicant's Indicators of Injury  
No Description  Unit Year Trend  
2015-2018 
(%) 2015 2016 2017 2018  
1. Production  Index  100 105 108 93 (1.78) 
2. Domestic Sales  Index  100 105 97 96 (1.96) 
3. Produ ctivity  Index  100 115 119 104 1.55 
4. Installed  Index  100 100 100 100 - 
5. Utilization  Index  100 105 108 93 (1.78) 
6. Profit/Los ses Index  100 (40) (92) (100) (91.13)  
7. Employment  Index  100 91 90 90 (3.25)  
Source:  As verified by the Investigating Authority . 
As shown in Table 5, the performance of the applicant can be seen as follows:  
a. The Applicant's domestic sales decreased with a trend of 1.96% because of the increased 
of imports in the domestic market.  The decrease in sales will affect its production in a 
negative direction. This was what happened during the investigation period, wherein 
Applicant's domestic sales and production had the same pattern of trend (negative trend) . 
b. The decreased of Applicant's production in 201 7-2018 impacted its productivity in the 
same period, the applicant production decreasing by 14%. In addition to that, the 
decreased of its production led to inefficient employment, which forced the Applicant to 
cutdown number of its employees.  
c. Although the Appli cant's capacity utilization increased in period of 2015 -2017, the capacity 
utilization in period of 201 7-2018 were decreased into lower point than in 2015, which 
made negative trend of Applicant's capacity utilization during period of investigation.  G/SG/N/8/IDN/22 • G/SG/N/10/IDN/22  
 
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  d. During  investigation period, T he Applicant suffered a losses with a trend of 91 .13%.  
Besides, the increased of imports had forced  the Applicant to sell its product under cost of 
production.  
2. Other Factors That May Contribute to Injury  
In order to ensure that the serious injury or threat of serious injury is only caused by increased 
imports, the Investigating Authority has examined the following other known factors:  
a. Captive sales  
Table 6. The Applicant Sales  
No Description  Unit Year 
2015 2016 2017 2018  
1. Domesti c Sales  Index  96.92  101.63  94.30  93.03  
2. Captive  Sales  Index  3.08 2.62 6.70 1.81 
3. Total Sales  Index  100 104.25  101 94.84  
Source:  As verified by the Investigating Authority . 
It can be seen from Table 6 that the Applicant's captive  sales were only 1.81% if compared with 
total sales in 2018.  It can be concluded that the Applicant's captive sales  performance  were not 
effecting their injury.  
b. Technology  
Based on the result  of inves tigation , the applicant has the latest technology in producing evaporators 
that are similar to the product  being investigated. This is supported by the fact that the machine is 
able to provide roll bond and fin  type that are used for various refrigerators and freezers with the 
latest technology.  
c. Installed Capacity and National Consumption  
Table 7. Installed Capacity and National Consumption  
No Uraian  Satuan  Tahun  
2015 2016 2017 2018  
1. Installed Capacity  Index  175 175 175 175 
2. National Consumption  Index  100 114 142 113 
Source:  As verified by the Investigating Authority . 
As shown in table 7, the installed capacity of the Applicant is adequate to meet national consumption. 
Therefore, it can be concluded that the injury which suffered by the applicant is not caused by the 
inability of the Applicant to fulfill the national co nsumption, but due to the increased of the imports 
effecting the applicant's financial performance.  
d. Competition Between Domestic Industries  
Table 8. Shares of A pplicant's Export Performance from Total Sales  
No. Description  Unit Year Trend  
2015-2018 
(%) 2015  2016  2017  2018  
1. Imports market share  index  100 103 111 105 2.42 
2. Applicant's market share  index  37 34 25 31 (7.45)  
3. Non-Applicant's market share  index  0.18 0.27 0.25 0.25 9.10 
Source:  As verified by the Investigating Authority . 
It can be seen from the table above that during period of investigation  even the Non applicant's 
market share increased, the applicant's market share still larger if compared with Non applicant's 
market shared. This circumstance indicated that there was no compet ition between domestic G/SG/N/8/IDN/22 • G/SG/N/10/IDN/22  
 
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  industries (either the Applicant or Non -Applicant), which were causing injury during investigation 
period.  
Based on the facts above, it can be concluded that  during the period of investigation  there were no 
other factors that caused serious injury to the Applicant besides increased volume of imports of the 
Subject Goods.  
3. Causal Link  
The Investigating Authority has examined all  relevant  factors having a bearing in the Applicant 
situation, and came into a conclusion that threat o f serious injury suffered by the Applicant mainly 
caused by significant increased volume of imports and not due to the other factors, as follows:  
a) There was an increased of imports of the Subject Goods  in absolute and relative terms,  
during investigation pe riod as shown in Table 1.  
b) During investigation period,  the national consumption increased with a trend of 5.9%. 
However this situation could not be utilize d by the Applicant as  imports had surged the 
domestic market . 
c) The share of imports increased by 2 .42% in the domestic market throughout the period of 
investigation . On the other hand , the Applicant's market shares decreased with a trend of 
7.45%, during the same period.  
d) During investigation period,  there were negative trends in the Applicant's performance s, 
such as domestic sales, production, productivity, capacity utilization, and employment. 
Moreover , the Applicant's financial losses showed an increasing trend, with a trend of 
91.13%, which showed overall impairment in the Applicant's performance or seri ous injury 
suffered by the Applicant.  
e) Based on analysis on C.2, it can be  concluded that there were no factors other than increased 
imports, which were causing the decrease on the Applicant 's performances.  
Based on  the conditions above, the Investigating Authority has examined all relevant factors in 
accordance with the Agreement on Safeguards, Article 4.1 and 4.2, and it can be concluded that the 
increased imports have caused a threat of serious injury on the Applicant or domestic industries. No 
factors other than increased imports, which has caused injury to the domestic industries.  
D. UNFORESEEN DEVELOPME NT 
In 2017 the Prime Minister of Vietnam at the proposal of the Vietnamese Minister of Trade Industry 
issued a dom estic regulation in Vietnam which obliged the use of certification and labeling of 
imported household goods including refrigerators and their components in the context of energy 
efficiency. The policy caused the export of refrigerator components including evaporators, especially 
from China to Vietnam to experience a drastic decrease, so that they were diverted to other countries 
including Indonesia. These conditions caused a surge in the number of imports of evaporator in 
Indonesia and this was not to be ex pected.  
E. DESCRIPTION OF THE P ROPOSED SUBJECT GOOD S 
The description of the Subject Goods under Article 12.1(a)  (WTO document G/SG/N/6/IDN/30) , had 
been modified and narrowed down based on the result of the investigation . The product that is 
proposed to be i mposed by safeguard  measure, becomes  as follows:  
"Evaporator in a type of roll -bond and fin that part of refrigerators, freezers, and other refrigerating 
or freezing equipment under Indonesia HS code Ex. 8418.99.10" . G/SG/N/8/IDN/22 • G/SG/N/10/IDN/22  
 
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  F. DESCRIPTION OF THE P ROPOSED MEASURE  
1. In a view of the aforementioned findings, a safeguard measure has been proposed 
in form of ad valorem  tariff duty:  
Table 9. The Proposed on Safeguard Measure  
Year  Measure (%)  
Year 1  17 
Year 2  15.5 
Year 3  14 
2. In a view of the aforementioned conclusion of the causal link, the Investigating 
Authority has proposed to the Government of the Republic of Indonesia to impose a 
safeguard measure on the importation of the Subject Goods for a period of three 
years.  
3. The non -confidential version of the Final Report of this investigation, can be found 
in the website of the Indonesian Safeguard Committee: www.kppi .kemendag.go.id/ . 
G. CONSULTATION  
Members who have a substantial interest of the Subject Goods , shall submit a written request of 
consultation within a period of 7 days from the date of circulation of this notification. All written 
requests must be sent both in written letter and in electronic format, and must indicate the name, 
address, e -mail addr ess, phone and fax number of the Members.  
In Accordance with Article 12.3 WTO Agreement on Safeguard, the Government of the Republic of 
Indonesia will conduct consultation in order to provide opportunities for those Members, consultation 
is scheduled to be  held no later than 1 November  2019.  
The contact information for correspondence is:  
DIRECTORATE OF MULTILATERAL NEGOTIATION , MINISTRY OF TRADE  
Jl. M.I. Ridwan Rais No.5, Building 2, 9th floor, Jakarta 10110  
Phone: (62 -21) 3858171  
Fax: (62 -21) 3840139  
E-mail: dit.multirateral.ppi@kemendag.go.id  
 
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