WT/DS622/1  
S/L/481  
G/ADP/D144/1  
 
12 February 2024  
(24-1190) Page: 1/5 
  Original: English  
 
EUROPEAN UNION – ANTI -DUMPING MEASURES ON IMPORTS OF FATTY ACID  
FROM INDONESIA  
REQUEST FOR CONSULTATIONS BY INDONESIA  
The following communication, dated 7 February  2024, from the delegation of Indonesia to the 
delegation of the European Union , is circulated to the Dispute Settlement Body in accordance with 
Article 4.4 of the DSU.  
 
_______________  
 
 
1. My authorities have instructed me to request consultations with the European Union pursuant 
to Articles 4 of  the Understanding on Rules and Procedures Governing the Settlement of Disputes 
(DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994), and Article  17 
of the Agreement on Implementation of Article VI of the GATT 1994 (Anti -Dumpi ng Agreement) with 
respect to the European Union 's definitive anti -dumping measures imposed on imports of fatty acid 
originating in Indonesia,1 the investigation leading to the imposition of those measures (fatty acid 
anti-dumping investigation) as well as the methodology applied by the European Union in 
anti-dumping investigations (including in the fatty acid anti -dumping investigation) for cons tructing 
normal value based on PCN -specific costs and profit data.  
2. The Government of Indonesia (Indonesia) considers that these measures are inconsistent with 
the Anti -Dumping Agreement and the GATT 1994.  
I. FACTUAL BACKGROUND AND THE MEASURES AT ISSUE  
A. Fatty acid investigations  
1. Fatty acid anti -dumping investigation  
a. Initiation of the investigation  
3. On 18 October 2021, the Coalition against Unfair Trade in Fatty Acid (CUTFA) lodged a 
complaint pursuant to Article 5 of Regulation (EU) 2016/1036 of the Europ ean Parliament and of the 
Council (Basic Anti -Dumping Regulation)2 with the European Commission (Commission) requesting 
an initiation of an anti -dumping investigation. That complaint alleged that imports of fatty acid 
originating in Indonesia were sold in  the European Union at dumped prices and caused material 
injury to the Union industry.  
4. On 30 November 2021, the Commission published a "Notice of initiation of an anti -dumping 
proceeding concerning imports of fatty acid originating in Indonesia"3 in the O fficial Journal of the 
European Union, whereby it initiated an investigation with a view to imposing anti -dumping duties 
 
1 Commission Implementing Regulation (EU) 2023/111 of 18 January 2023 imposing a definitive 
anti-dumping duty on imports of fatty acid originating in Indonesia, Official Journal of the European Union, 
OJ 2023 L 18, p. 1 (Definitive Anti -Dumping Regulation).  
2 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, 2016 OJ L 176, p. 21.  
3 Notice of initiation of an anti -dumping proceeding conce rning imports of fatty acid originating in 
Indonesia, 2021 OJ C 482, (Notice of Initiation), p. 5.  WT/DS622/1 • S/L/481 • G/ADP/D144/1  
 
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  on imports of certain fatty acid products. The investigation was initiated on the basis of the complaint 
made by CUTFA, on behalf of th e Union industry of fatty acid, in the sense of Article 5(4) of the Basic 
Anti-Dumping Regulation. The Commission considered that the complaint contained evidence of 
dumping and of resulting material injury that was sufficient to justify the initiation of the 
investigation.4 The investigation of dumping and injury covered the period from 1 October 2020 to 
30 September 2021 (i.e., the investigation period). The examination of trends relevant for the 
assessment of injury covered the period from 1 January 201 8 to the end of the investigation period 
(i.e., the period considered).  
b. Product under investigation  
5. The product under investigation described in the Notice of Initiation covers fatty acid with a 
carbon chain length of C6, C8, C10, C12, C14, C16 or C18 with  an iodine value below 105g/100g 
including: single fatty acid (also referred to as "pure cut"), and blends containing a combination of 
two or more carbon chain lengths5; and, excluding fatty acid certified by a voluntary scheme for the 
production of susta inable biofuels, bioliquids and biomass fuels recognised by the Commission.6 
6. Following comments received from the parties, the Commission issued on 21 January 2022 a 
Note to the File regarding the product scope (Note to File on Product Scope). That note c larified that 
the investigation covered only fatty acid with a ratio of free fatty acids to triglycerides (degree of 
split – DoS) of at least 97%.7 The product concerned is the product under investigation originating 
in Indonesia.8 
c. Withdrawal of the comp laint 
7. On 15 August 2022, KLK Emmerich GmbH (KLK), the largest sampled Union producer, sent a 
letter to the Commission expressing its concern that anti -dumping duties would cause turbulence on 
the fatty acid market.9 On 19 August 2022, KLK  sent another letter to the Commission informing it 
that the company opposes the imposition of anti -dumping duties because it considers those duties 
to be against the interest of the company and of the Union industry in general.10 It stated that 
"Europe ne eds to maintain a competitive environment for fatty acids in the interest of all 
stakeholders". KLK also noted that it was able to stay competitive and profitable with imports of the 
product concerned from Indonesia.11  
8. On 24 August 2022, CUTFA withdrew it s anti -dumping complaint, "due to the influence from 
stakeholders".12 Interested parties filed comments on the withdrawal of the complaint,13 requesting 
the Commission to terminate the investigation in light of the lack of Union interest as well as the 
lack of injury to the Union industry, as apparent from the withdrawal of the complaint and KLK 's 
letters of 15 and 19 August 2022.14 
d. Imposition of the definitive anti -dumping measures  
9. The Commission decided not to impose provisional measures. On 1 July 2022, the Commission 
informed the Member States and all interested parties that no provisional duties would be imposed 
on imports of fatty acid originating in Indonesia, and that the investigation would continue.15 
10. On 18 January 2023, the European Union adopted a regulation imposing a definitive anti -
dumping duty on imports of fatty acid originating in Indonesia ( Definitive Anti -Dumping Regulation ). 
The Definitive Anti -Dumping Regulation imposes anti -dumping duties ranging from 15.2% to 46.4% 
 
4 Definitive Anti -Dumping Regulation, recital 2.  
5 Notice of Initiation, recital 2.  
6 Definitive Anti -Dumping Regulation, recitals 70,101 -102, Article 1.  
7 European Commission, Note to the File for the Inspection by Interested Parties - Clarifications on the 
product scope, restart of sampling process and procedural aspects (21 January 2022), Ref t22.000602.  
8 Definitive Anti -Dumping Regulation, recital 74.  
9 Letter KLK 15 August 2022.  
10 Letter KLK 19 August 2022.  
11 Letter KLK 19 August 2022.  
12 Letter - withdrawal of anti -dumping complaint on behalf of CUTFA.  
13 Definitive Anti -Dumping Regulation, recital 62.  
14 Musim Mas letter regarding withdrawal of complain t, 24 August 2022, p. 1.  
15 Definitive Anti -Dumping Regulation, recitals 55 -56. WT/DS622/1 • S/L/481 • G/ADP/D144/1  
 
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  on imports into the European Union of fatty acid originating in Indonesia. These anti -dumping duties 
are due to expire on 20 January 2028.  
11. Definitive anti -dumping duties were set at the level of the dumping margin for two Indonesian 
producers (Wilmar and Musim Mas) at 15.2% a nd 46.4% respectively.16 The definitive duty for the 
other cooperating non -sampled companies in Indonesia was based on the weighted average 
dumping margin for those two sampled companies, at 26.6%. The definitive duty for all other 
companies was based on t he highest dumping margin of the two sampled cooperating exporters, at 
46.4%.17 
2. Fatty acid anti -subsidy investigation  
12. On 13 May 2022, the Commission initiated a separate anti -subsidy investigation concerning 
imports of fatty acid originating in Indonesia following a complaint made by CUTFA.18 The fatty acid 
anti-dumping and anti -subsidy investigations share the same product scope, the same investigation 
period and the same period considered.19 
13. On 24 August 2022, KLK sent a letter to the Commission expressi ng its opposition to the 
imposition of countervailing measures on imports of the product concerned from Indonesia.20  
14. On 3 October 2022, CUTFA withdrew its anti -subsidy complaint.21  
15. Consequently, the Commission terminated the fatty acid anti-subsidy investigation on 
21 December  2022.22 The decision to that effect was published by the Commission on 
20 March  2023.23 In that decision, the Commission referred to the withdrawal of the complaint and 
stated that "[t]he investigation had not brou ght to light any considerations demonstrating that such 
termination would not be in the Union interest".24 
B. EU methodology for constructing normal value based on PCN -specific costs and 
profit data  
16. In EU anti -dumping investigations, the product concerned is typically subdivided into several 
models designated by product control numbers (PCNs). The normal value and the export price are 
computed for each PCN and the comparison between normal value and export price is carried out 
on a PCN -basis.  
17. When the normal v alue cannot be established based on the domestic sales prices in the 
exporting country, the European Union resorts to a constructed normal value based on the cost of 
production plus a reasonable amount for administrative, selling and general (SG&A) costs a nd for 
profits.  
18. Pursuant to Article 2(6) of the Basic Anti -Dumping Regulation, which mirrors the text of 
Article  2.2.2 of the Anti -Dumping Agreement, "the amounts for selling, for general and 
administrative costs and for profits shall be based on actual d ata pertaining to production and sales, 
in the ordinary course of trade, of the like product by the exporter or producer under investigation".  
 
16 Definitive Anti -Dumping Regulation, recitals 487 -488. 
17 Definitive Anti -Dumping Regulation, recitals 489.  
18 Notice of initiation of an anti -subsidy proceeding concerning impor ts of fatty acid originating in 
Indonesia, 2022 OJ C 195, p. 11. The EU case number of the anti -subsidy investigation is AS688.  
19 Definitive Anti -Dumping Regulation, recital 54.  
20 Letter KLK 24 August 2022.  
21 Letter withdrawal of anti -subsidy complaint on behalf of CUTFA.  
22 General Disclosure Document AS688 – Anti-subsidy proceeding concerning imports of fatty acid 
originating in Indonesia.  
23 Commission Implementing Decision (EU) 2023/617 of 17 March 2023 terminating the anti -subsidy 
proceeding concerning i mports of fatty acid originating in Indonesia, 2023 OJ L 80, p. 99.  
24 Anti-subsidy termination decision, recitals 9 -11. WT/DS622/1 • S/L/481 • G/ADP/D144/1  
 
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  19. If the domestic sales volume of certain PCNs constitute less than 5% of the total volume of 
the same PCNs sold to  the European Union, the European Union applies a PCN -specific profitability 
test to determine the methodology for constructing the normal value of those PCNs:  
• when a PCN has no profitable sales during the entire investigation period, the amounts 
for SG&A and for profit used to construct normal value of that PCN are based on 
weighted average of all profitable domestic sales of the exporting producer (first 
methodology);  
• when a PCN has some profitable sales (even very minor) during the investigation period, 
the amounts for SG&A and for profit used to construct normal value of that PCN are 
based on weighted average of the profitable domestic sales of that PCN only (second 
methodology).  
20. The second methodology, whereby the Commission uses exclusively the data re lating to the 
specific PCN, is consistently applied by the Commission in its anti -dumping investigations, including 
the fatty acid anti -dumping investigation. It is evidenced by the findings of previous investigations 
and is also reflected in the OASYS cal culation file, included in the company -specific disclosure files 
in each EU anti -dumping investigation, which shows the different steps followed by the Commission 
when calculating normal value.  
C. The measures at issue  
21. The measures at issue in this dispute c over the definitive anti -dumping measures imposed by 
the European Union on imports of fatty acid originating in Indonesia, and the investigation leading 
to the imposition of those measures. They include any amendments, supplements, reviews, 
replacements, r enewals, extensions, implementing measures and any other related measures taken 
by the European Union in relation to the investigation and/or the anti -dumping measures at issue. 
The measures at issue also include the European Union 's decision of 21 Decembe r 2022 to terminate 
the anti -subsidy investigation, as published on 20 March 2023.  
22. Furthermore, the measures at issue cover the EU methodology for constructing normal value 
based on PCN -specific costs and profit data for PCNs sold in non -representative qua ntities on the 
domestic market of the exporting country, as explained in Section B above.  
II. LEGAL BASIS FOR THE COMPLAINT  
23. Indonesia considers that the definitive anti -dumping measures imposed by the European 
Union on imports of fatty acid originating in Indonesia and the investigation leading to the imposition 
of those measures  appear to be inconsistent with the following obligations in the relevant WTO 
covered agreements:  
▪ Articles 5.3 and 5.8 of the Anti -Dumping Agreement because the Europ ean Union failed to 
reject the application based on a determination that the application was supported by 
insufficient evidence of injury, particularly as a result of the deficient product scope included 
in the application.  
▪ Article 5.4 of the Anti -Dumping Agreement because the European Union failed to reject the 
application or terminate the investigation despite the lack of standing of the domestic industry.  
▪ Article 5.6 of the Anti -Dumping Agreement, because – following the withdrawal of the 
complaint – the European Union de facto  carried out an ex officio  investigation, without 
sufficient evidence of dumping, injury and a causal link.  
▪ Articles 2.2 and 2.2.2 of the Anti -Dumping Agreement because when constructing the normal 
value of PCNs sold in insufficient  quantities in the domestic market, the European Union used 
amounts for SG&A costs and for profit which are not reasonable and are not based on actual 
data pertaining to production and sales in the ordinary course of trade of the like product by 
the export er or producer under investigation.  WT/DS622/1 • S/L/481 • G/ADP/D144/1  
 
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  ▪ Article 2.4.1 and Article 9.3 of the Anti -Dumping Agreement, as well as Article VI:2 of the 
GATT 1994, because the European Union applied an anti -dumping duty which exceeds the 
margin of dumping, as a result of using an incorrect exchange rate.  
▪ Articles 3.1 and 3.4 of the Anti -Dumping Agreement because the European Union failed to 
make an objective and unbiased examination of the injury factors and erroneously found the 
existence of material injury to the Union industry.  
▪ Articles 9.2 and 9.3 of the Anti -Dumping Agreement and Article VI:2 of the GATT 1994, 
because the amount of the anti -dumping duty imposed by the European Union exceeds the 
margin of dumping as established under Article 2 of the Anti -Dumping Agreement and 
Article VI:1 of the GATT 1994.  
▪ Article X:3(a) of the GATT 1994 because by imposing the anti -dumping duties while 
terminating a parallel countervailing investigation following the withdrawal of both complaints, 
the European Union failed to administer its Basic Anti -Dumping and Basic Anti -Subsidy 
Regulations, and in particular Articles 9(1) and 14(1) governing the termination of an 
investigation following the withdrawal of a complaint, in a uniform and reasonable manner.  
▪ Article X:3(a) of the GATT 1994 because by applying different method ologies for constructing 
normal value for PCNs sold in insufficient quantities on the domestic market of the exporting 
country, depending on the existence of profitable sales of those PCNs, the European Union 
failed to administer Article 2(6) of the Basic Anti-Dumping Regulation in a uniform and 
reasonable manner.  
▪ Article 1 of the Anti -Dumping Agreement and Article VI of the GATT 1994 as a consequence 
of the violations described above.  
24. Indonesia considers that the EU methodology for constructing normal valu e based on 
PCN-specific costs and profit data appears to be inconsistent with the following obligations in the 
relevant WTO covered agreements:  
▪ Articles 2.2 and 2.2.2 of the Anti -Dumping Agreement because by requiring the use of the 
SG&A and profit data re lating exclusively to a specific PCN sold in insufficient quantities on 
the domestic market of the exporting country, the EU methodology uses amounts for SG&A 
costs and for profit which are not reasonable and are not based on actual data pertaining to 
production and sales in the ordinary course of trade of the like product by the exporter or 
producer under investigation.  
▪ Article X:3(a) of the GATT 1994 because by applying different methodologies for constructing 
normal value for PCNs sold in insufficient qu antities on the domestic market of the exporting 
country, depending on the existence of profitable sales of those PCNs, the European Union 
fails to administer Article 2(6) of the Basic Anti -Dumping Regulation in a uniform and 
reasonable manner.  
25. The measure s described above appear to nullify or impair the benefits accruing to Indonesia, 
directly or indirectly, under the Anti -Dumping Agreement and the GATT 1994.  
26. Indonesia reserves its right to raise additional claims and other matters in respect of the 
mentio ned issues, whether factual or legal, during the course of the consultations. This request also 
covers any other amendments, replacements, extensions, related measures or implementing 
measures that relate to the inconsistent measures at issue here.  
27. Indones ia looks forward to receiving a response to the present request from the 
European  Union and to establishing a mutually convenient date for consultations, with a view to 
resolving this dispute.  
__________