WT/DS442/R/Add.1  
 
16 December 2016 
(16-6862) Page: 1/71 
  Original: English  
 
  EUROPEAN UNION – ANTI -DUMPING MEASURES ON IMPORTS OF 
CERTAIN FATTY ALCOHO LS FROM INDONESIA  
REPORT OF THE PANEL  
Addendum  
BCI deleted , as indicated  [***]  
This addendum  contains Annexes A to D to the Report of the Panel to be found in document  
WT/DS442/R . 
 
_______________  
 
 WT/DS442/R/Add.1  
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  LIST OF ANNEXES  
ANNEX  A 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working procedures of the p anel A-2 
Annex  A-2 Additional working p rocedures concerning business confidential information  A-7 
ANNEX B  
ARGUMENTS OF THE EUROPE AN UNION  
Contents  Page  
Annex  B-1 First i ntegrated executive summary of the arguments of the European Union  B-2 
Annex  B-2 Second integrated executive summary of the arguments of the European Union  B-11 
ANNEX  C 
ARGUMENTS OF INDONESIA  
Contents  Page  
Annex  C-1 First i ntegrated executive summary of the arguments of Indonesia  C-2 
Annex  C-2 Second integrated executive summary of the arguments of Indonesia  C-17 
ANNEX  D 
ARGUMENTS OF THIRD P ARTIES  
Contents  Page  
Annex  D-1 Integrated executive summary of the argu ments of Turkey  D-2 
Annex  D-2 Integrated executive summary of the arguments of the United States  D-5 
 
 
 WT/DS442/R/Add.1  
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  ANNEX  A 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working procedures of the p anel A-2 
Annex  A-2 Additional working p rocedures concern ing business confidential information  A-7 
 
 WT/DS442/R/Add.1  
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  ANNEX A -1 
WORKING PROCEDURES O F THE PANEL  
Adopted on 13 July 2015  
1. In its proceedings, the Panel shall follow the relevant provisions of the Understanding on 
Rules and Procedures Governing the Settlement of Di sputes (DSU). In addition, the following 
Working Procedures shall apply.  
 
General  
 
2. The deliberations of the Panel and the documents submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Procedures shall preclude a party to t he dispute (hereafter 
"party") from disclosing statements of its own positions to the public. Members shall treat as 
confidential information submitted to the Panel by another Member which the submitting Member 
has designated as confidential. Where a party  submits a confidential version of its written 
submissions to the Panel, it shall also, upon request of a Member, provide a non -confidential 
summary of the information contained in its submissions that could be disclosed to the public . 
 
3. The Panel shall meet in closed session. The parties, and Members having notified their 
interest in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU 
(hereafter "third parties"), shall be present at the meetings only when invited by  the Pa nel to 
appear before it.  
 
4. Each party and third party has the right to determine the composition of its own delegation 
when meeting with the Panel. Each party and third party shall have the responsibility for all 
members of its own delegation and shall e nsure that each member of such delegation acts in 
accordance with the DSU and these Working Procedures, particularly with regard to the 
confidentiality of the proceedings . 
 
Submissions  
 
5. Before the first substantive meeting of the Panel with the parties,  each party shall submit a 
written submission in which its presents the facts of the case and its arguments, in accordance 
with the timetable adopted by the Panel. Each party shall also submit to the Panel, prior to the 
second substantive meeting of the Pa nel, a written rebuttal, in accordance with the timetable 
adopted by the Panel . 
 
6. A party shall submit any request for a preliminary ruling at the earliest possible opportunity 
and in any event no later than in its first written submission to the Panel. If Indonesia requests 
such a ruling, the European Union shall submit its response to the request in its first written 
submission. If the European Union requests such a ruling, Indonesia shall submit its response to 
the request prior to the first substantiv e meeting of the Panel, at a time to be determined by the 
Panel in light of the request. Exceptions to this procedure shall be granted upon a showing of good 
cause.  
 
7. Each party shall submit all factual evidence to the Panel no later than during the firs t 
substantive meeting, except with respect to evidence necessary for purposes of rebuttal, answers 
to questions or comments on answers provided by the other party. Exceptions to this procedure 
shall be granted upon a showing of good cause. Where such excep tion has been granted, the Panel 
shall accord the other party a period of time for comment, as appropriate, on any new factual 
evidence submitted after the first substantive meeting.  
 
8. Where the original language of exhibits is not a WTO working languag e, the submitting party 
or third party shall submit a translation into the WTO working language of the submission at the 
same time. The Panel may grant reasonable extensions of time for the translation of such exhibits 
upon a showing of good cause. Any obj ection as to the accuracy of a translation should be raised 
promptly in writing, no later than the next filing or meeting (whichever occurs earlier) following 
the submission which contains the translation in question. The Panel may grant exceptions to this  WT/DS442/R/Add.1  
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  procedure upon a showing of good cause. Any objection shall be accompanied by a detailed 
explanation of the grounds of objection and an alternative translation.  
 
9. To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submissions, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute. For example, exhibits submitted by Indonesia could be numbered IDN-1, 
IDN-2, etc. If the last exhibit in connection with the first submission  was numbered IDN-5, the first 
exhibit of the next submission thus would be numbered IDN-6. 
 
10. Each party and third party should make its submissions in accordance with the WTO Editorial 
Guide for Panel Submissions, attached as Annex 1.  
 
Questions  
 
11. The Panel may at any time pose questions to the parties and third parties, orally or in 
writing, including prior to each substantive meeting . 
 
Substantive meetings  
 
12. Each party shall provide to the Panel the list of members of its delegation in advance o f each 
meeting with the Panel and no later than 5.00  p.m. the previous working day . 
 
13. The first substantive meeting of the Panel with the parties shall be conducted as follows:  
 
a. The Panel shall invite Indonesia to make an opening statement to present it s case first. 
Subsequently, the Panel shall invite the European Union to present its point of view. 
Before each party takes the floor, it shall provide the Panel and other participants at the 
meeting with a provisional written version of its statement. In the event that 
interpretation is needed, each party shall provide additional copies for the interpreters, 
through the Panel Secretary. Each party shall make available to the Panel and the other 
party the final version of its opening statement as well as it s closing statement, if any, 
preferably at the end of the meeting, and in any event no later than 5.00  p.m. on the 
first working day following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to 
which i t wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any questions to the parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with Indonesia presenting its statement first.  
14. The second substantive meeting of the Panel with the parties shall be conducted as follows:  
 
a. The Panel shall ask the European Union if it wishes to avail itself of the right to present 
its case first. If so, the Panel shall invite the European Union to presen t its opening 
statement, followed by Indonesia. If the European Union chooses not to avail itself of 
that right, the Panel shall invite Indonesia to present its opening statement first. Before 
each party takes the floor, it shall provide the Panel and othe r participants at the 
meeting with a provisional written version of its statement. In the event that 
interpretation is needed, each party shall provide additional copies for the interpreters, 
through the Panel Secretary. Each party shall make available to the Panel and the other 
party the final version of its opening statement as well as its closing statement, if any, WT/DS442/R/Add.1  
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  preferably at the end of the meeting, and in any event no later than 5.00  p.m. of the 
first working day following the meeting.  
b. After the conc lusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to 
which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any questions to the parties to whi ch it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with the party that presented its opening statement 
first, presenting its closing statement first.  
Third parties  
 
15. The Panel shall invite each third party to transmit to the Panel a written submission prior to 
the first s ubstantive meeting of the Panel with the parties, in accordance with the timetable 
adopted by the Panel . 
 
16. Each third party shall also be invited to present its views orally during a session of this first 
substantive meeting, set aside for that purpose.  Each third party shall provide to the Panel the list 
of members of its delegation in advance of this session and no later than 5.00  p.m. the previous 
working day . 
 
17. The third -party session shall be conducted as follows:  
 
a. All third parties may be presen t during the entirety of this session.  
b. The Panel shall first hear the arguments of the third parties in alphabetical order. Third 
parties present at the third -party session and intending to present their views orally at 
that session, shall provide the Pan el, the parties and other third -parties with provisional 
written versions of their statements before they take the floor. Third parties shall make 
available to the Panel, the parties and other third parties the final versions of their 
statements, preferabl y at the end of the session, and in any event no later than 
5.00 p.m. of the first working day following the session.  
c. After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third parties  questions for clarification on any 
matter raised in the third parties' submissions or statements. Each party shall send in 
writing, within a timeframe to be determined by the Panel, any questions to a third party 
to which it wishes to receive a response i n writing.  
d. The Panel may subsequently pose questions to the third parties. Each third party shall 
then have an opportunity to answer these questions orally. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the t hird parties to 
which it wishes to receive a response in writing. Each third party shall be invited to 
respond in writing to such questions within a deadline to be determined by the Panel.  WT/DS442/R/Add.1  
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  Descriptive part  
 
18. The description of the arguments of the parti es and third parties in the descriptive part of 
the Panel report shall consist of executive summaries provided by the parties and third parties, 
which shall be annexed as addenda to the report. These executive summaries shall not in any way 
serve as a subs titute for the submissions of the parties and third parties in the Panel's examination 
of the case.  
 
19. Each party shall submit an integrated executive summar y of the facts and arguments as 
presented to the Panel in its first written submissions, first o pening and closing oral statement s 
and responses to questions following the first substantive meeting, and a separate integrated 
executive summary of its written rebuttal, second opening and closing oral statements and 
responses to questions following the second substantive meeting , in accordance with the timetable 
adopted by the Panel. Each integrated executive summary shall be limited to no more than 
15 pages. The Panel will not summarize in a separate  part of its report, or annex to its report, the 
parties' responses to questions.  
 
20. Each third party shall submit an integrated executive summary of its arguments as 
presented in its written submission and statement in accordance with the timetable adopted by the 
Panel. This integrated executive summary ma y also include a summary of responses to questions, 
if relevant. The executive summary to be provided by each third party shall not exceed 6  pages.  
 
21. The Panel reserves the right to request the parties and third parties to provide executive 
summaries o f facts and arguments presented by a party or a third party in any other submissions 
to the Panel for which a deadline may not be specified in the timetable.  
 
Interim review  
 
22. Following issuance of the interim report, each party may submit a written re quest to review 
precise aspects of the interim report and request a further meeting with the Panel, in accordance 
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no 
later than at the time the written request for review is submitted.  
 
23. In the event that no further meeting with the Panel is requested, each party may submit 
written comments on the other party's written request for review, in accordance with the timetable 
adopted by the Panel. Such comments sh all be limited to commenting on the other party's written 
request for review.  
 
24. The interim report, as well as the final report prior to its official circulation, shall be kept 
strictly confidential and shall not be disclosed.  
 
Service of documents  
 
25. The following procedures regarding service of documents shall apply:  
 
a. Each party and third party shall submit all documents to the Panel by filing them with 
the DS  Registry (office No. 2047).  
b. Each party and third party shall file 2 paper copies of all d ocuments it submits to the 
Panel. Exhibits may be filed in 2 copies on CD -ROM or DVD and 2 paper copies. The 
DS Registrar shall stamp the documents with the date and time of the filing. The paper 
version shall constitute the official version for the purpos es of the record of the dispute.  
c. Each party and third party shall also provide an electronic copy of all documents it 
submits to the Panel at the same time as the paper versions, preferably in Microsoft 
Word format, either on a CD -ROM, a DVD or as an e -mail attachment. If the electronic 
copy is provided by e -mail, it should be addressed to DSRegistry@wto.org, with a copy 
to xxxxx @wto.org , xxxxx @wto.org  and xxxxx @wto.org . If a CD -ROM or DVD is 
provided, it shall be filed with the DS Registry.  
d. Each party sha ll serve any document submitted to the Panel directly on the other party. 
Each party shall, in addition, serve on all third parties its written submissions in advance WT/DS442/R/Add.1  
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  of the first substantive meeting with the Panel. Each third party shall serve any 
documen t submitted to the Panel directly on the parties and all other third parties. Each 
party and third party shall confirm, in writing, that copies have been served as required 
at the time it provides each document to the Panel.  
e. Each party and third party shal l file its documents with the DS Registry and serve copies 
on the other party (and third parties where appropriate) by 5.00  p.m. (Geneva time) on 
the due dates established by the Panel. A party or third party may submit its documents 
to another party or th ird party in electronic format only, subject to the recipient party or 
third party's prior written approval and provided that the Panel Secretary is notified.  
f. The Panel shall provide the parties with an electronic version of the descriptive part, the 
interim report and the final report, as well as of other documents as appropriate. When 
the Panel transmits to the parties or third parties both paper and electronic versions of a 
document, the paper version shall constitute the official version for the purpose s of the 
record of the dispute.  
26. The Panel reserves the right to modify these procedures as necessary, after consultation 
with the parties.  
 WT/DS442/R/Add.1  
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  ANNEX A -2 
ADDITIONAL WORKING PROCEDURES CONCERNING  
BUSINESS CONFIDENTIA L INFORMATION   
Adopted on 13 July 2015  
The following procedures apply to any business confidential information (BCI) submitted in the 
course of the Panel proceedings in DS442.  
 
1. For the purposes of these Panel proceedings, BCI is any information that has been 
designated as such by the party su bmitting the information and that was previously treated as 
confidential within the meaning of Article 6.5 of the Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade 1994  by the Commission of the European Union in the 
anti-dumping investigation at issue in this dispute . However, these procedures do not apply to any 
information that is available in the public domain. In addition, these procedures do not apply to 
any BCI if the person who provided the information in the cou rse of the aforementioned 
investigation agrees in writing to make the information publicly available.  
 
2. As required by Article 18.2 of the DSU, a party or third party having access to BCI submitted 
in these Panel proceedings shall treat it as confidentia l and shall not disclose that information other 
than to those persons authorized to receive it pursuant to these procedures. Any information 
submitted as BCI under these procedures shall only be used for the purposes of this dispute and 
for no other purpos e. Each party and third party is responsible for ensuring that its employees 
and/or outside advisors comply with these working procedures to protect BCI. An outside advisor 
is not permitted access to BCI if that advisor is an officer or employee of an ente rprise engaged in 
the production, sale, export, or import of the products that were the subject of the investigation at 
issue in this dispute , or an officer or employee of an association of such enterprises . All third party 
access to BCI shall be subject t o the terms of these working procedures.  
 
3. No person may have access to BCI except a member of the Secretariat or the Panel, an 
employee of a party or third party under the terms specified in these procedures, or an outside 
advisor to a party or third pa rty for the purposes of this dispute.  
 
4. The party submitting BCI shall mark the cover and/or first page of the document containing 
BCI, and each page of the document, to indicate the presence of such information. The specific 
information in question sha ll be placed between double brackets, as follows: [[xx,xxx.xx]]. The 
first page or cover of the document shall state "Contains Business Confidential Information ", and 
each page of the document shall contain the notice "Contains Business Confidential Inform ation" at 
the top of the page.  
 
5. Any BCI that is submitted in binary -encoded form shall be clearly marked with the 
statement "Business Confidential Information" on a label of the storage medium, and clearly 
marked with the statement "Business Confidentia l Information" in the binary -encoded files.  
 
6. In the case of an oral statement containing BCI, the party or third party making such a 
statement shall inform the Panel before making it that the statement will contain BCI, and the 
Panel will ensure that on ly persons authorized to have access to BCI pursuant to these procedures 
are in the room to hear that statement. The written versions of such oral statements submitted to 
the Panel shall be marked as provided for in paragraph 4.  
 
7. If a party or third par ty considers that information submitted by the other party or a third 
party contains information which should have been designated as BCI and objects to such 
submission without BCI designation, it shall forthwith bring this objection to the attention of th e 
Panel, the other party, and, where relevant, the third parties. The Panel shall deal with the 
objection as appropriate. Similarly, if a party or third party considers that the other party or a third 
party submitted information designated as BCI which sho uld not be so designated, it shall 
forthwith bring this objection to the attention of the Panel, the other party, and, where relevant, 
the third parties, and the Panel shall deal with  the objection as appropriate.  
 WT/DS442/R/Add.1  
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  8. Any person authorized to have access t o BCI under the terms of these procedures shall store 
all documents containing BCI in such a manner as to prevent unauthorized access to such 
information.  
 
9. The Panel will not disclose BCI, in its report or in any other way, to persons not authorized 
under these procedures to have access to BCI. The Panel may, however, make statements of 
conclusion drawn from such information. Before the Panel circulates its final report to the 
Members, the Panel will give each party an opportunity to review the report to  ensure that it does 
not contain any information that the party has designated as BCI.  
 
10. Submissions containing BCI will be included in the record forwarded to the Appellate Body in 
the event of an appeal of the Panel's Report.  
 
 
_______________  
 
 
 WT/DS442/R/Add.1  
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  ANNEX B 
ARGUMENTS OF THE EUROPEAN UNION  
Contents  Page  
Annex  B-1 First i ntegrated executive summary of the arguments of the European Union  B-2 
Annex  B-2 Second integrated executive summary of the arguments of the European Union  B-11 
 
 WT/DS442/R/Add.1  
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  ANNEX B -1 
 
FIRST INTEG RATED EXECUTIVE SUMM ARY OF THE  
ARGUMENTS OF  THE EUROPEAN UNION  
1. Introduction  
 
1. Indonesia has presented three sets of legal claims in respect of the EU's anti -dumping duty 
on fatty alcohols from Indonesia, which was imposed in 2011. Indonesia considers  that the 
European Union acted inconsistently with several obligations under the Anti-Dumping Agreement  
when adopting the measure relating to (1) the requirement to make adjustments for differences 
affecting price comparability in order to make a fair comp arison between the normal value and the 
export price; (2) the establishment of causal link between the dumped imports and the injury to 
the domestic industry; and (3) the procedural requirement to inform interested parties of the 
results of a verification.1 
 
2. The European Union considers that Indonesia's claims are without merit and constitute an 
unwarranted attempt at obtaining from the Panel a de novo  review of the facts. They are not 
supported by the text of the Anti-Dumping Agreement  and relevant juri sprudence and they are 
based on an inaccurate reflection of the facts on the record. Therefore, all of the claims must be 
rejected.  
 
3. Indonesia is effectively asking the Panel to re -do the investigation based on legal concepts 
that are nowhere to be foun d in the Anti-Dumping Agreement.  However, the standard of review of 
panels in relation to anti -dumping measures is limited to examining whether the EU's 
interpretation of the relevant provisions is permissible, whether the investigating authority's 
establi shment of the facts was proper and whether the evaluation of those facts was unbiased and 
objective. It is equally well -established in WTO jurisprudence that a panel's analysis of the legal 
obligations imposed on Members of the WTO is to be based on the te xt of the Agreement, and that 
panels may not read into the WTO Agreements words or concepts that are not there.2 
 
2. Indonesia 's erroneous interpretation and application of Article 2.4 of the 
Anti-Dumping Agreement  
 
4. Indonesia argues that the European Un ion violated Article 2.4 of the Anti-Dumping 
Agreement  when adjusting PT Musim Mas' export price for the sales commissions received by the 
related trading company in Singapore, ICOF -S, through which its export sales to the EU were 
made, on the basis (i) th at no adjustment was warranted because ICOF -S and PT Musim Mas 
formed a single economic entity, and (ii) that the European Union's adjustment was inconsistent 
with Article 2.4 because it treated two Indonesian exporters in identical situations differently and 
that this distinction was legally unfounded and unsupported by the facts.  
 
A. The relevant consideration of Article 2.4 is whether there is a difference affecting 
price comparability  
 
5. Article 2.4 of the Anti-Dumping Agreement  requires adjustments to  be made for differences 
affecting price comparability in order to make a fair comparison between normal value and export 
price. The purpose of this provision is to ensure that the ultimate determination identifies whether 
or not there is international pri ce discrimination. If the starting domestic and export prices are 
different for some other objective reason, then it is that other reason or countervailing explanation 
                                               
1 It is important to remember that PT Musim Mas ha s brought proceedings on most of the issues raised 
in the present dispute also in the courts of the European Union and lost. The General Court of the EU in its 
judgment of June 2015 made a number of relevant findings that Indonesia seeks to have re -litigat ed, notably 
in relation to the existence of a single economic entity and the alleged discrimination between two Indonesian 
producers. Although the EU Court made its findings based on EU law, many of its factual findings rejecting 
provide important context for a number of the claims and assertions made in the present dispute (See in 
particular paras. 40 –84, 92 -97, 115 -118 and 123 –138 of the EU General Court 's judgment, Exhibit EU –4). 
2 Appellate Body Report, Japan – Alcoholic Beverages II , pp. 11 –12; see als o Appellate Body Report, 
India – Patents (US) , para. 45.  WT/DS442/R/Add.1  
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  that explains what is happening – not the existence of international price discriminatio n by the 
producer. Indonesia shares this understanding of Article 2.4.3 
 
6. The main obligation in Article 2.4 is therefore for investigating authorities to adjust for any 
difference which affects the price comparability of the export price and normal valu e. Failing to 
make such adjustments could result either in a false positive (a finding of dumping when none 
exists) or a false negative (a finding of no dumping when it is in fact occurring). Indonesia 
correctly acknowledges that "the ultimate litmus test "4 of Article 2.4 is whether a factor affects 
price comparability and that, if there is such a factor, Article 2.4 requires that the investigating 
authority makes an adjustment to ensure a fair comparison. Following the same line of reasoning, 
Indonesia adm its that if a sales commission is paid by an exporting producer to a trading company 
through which it sells the goods, an adjustment is due.5 
 
7. However, for commissions paid to trading companies, Indonesia argues that Article 2.4 
contains an implicit obl igation to consider whether or not a single economic entity exists between 
the producer and a related trading company, or whether the producer/exporter and the trader can 
be regarded as two economically independent entities operating at arm's length. Where  a single 
economic entity exists, Article 2.4 would not allow the authority to make any adjustments for a 
commission paid even when, for example, there is evidence that such commissions were paid only 
in relation to export sales and not for domestic sales transactions.6 Indonesia also proposes to 
read into Article 2.4 the principle it calls "follow the money ", i.e. what ultimately goes into the 
pocket of the exporting producer when it sells to the importing country compared to what it gets 
into the pocket w hen selling the same product domestically. There is of course no textual basis for 
Indonesia's propositions and none has been referred to by Indonesia.  
 
8. First, Article 2.4 does not mention "related parties " or a "single economic entity ". The 
concept of a single economic entity is nowhere to be found in the Anti-Dumping Agreement . In any 
case, even Indonesia agrees that within a single economic entity adjustments must be made for 
costs which objectively are generated by specific transactions.7 A commissio n, which by 
contractual arrangement is paid in relation only to export sales and not in relation to domestic 
sales, is such a cost that must be adjusted for irrespective of the relationship. Second, the AD 
Agreement concerns the "product ", not the producer . Article 2.1 provides that there is dumping if 
the product "is introduced " into the commerce of another country at a price that is less than its 
normal value and states that this is the case "if the export price of the product exported from one 
country to  another is less than the comparable price, in the ordinary course of trade, for the like 
product when destined for consumption in the exporting country ". The concept of dumping is not 
about "following the money " and is not about establishing who ultimatel y benefits from certain 
sales transactions or the profitability of those transactions; it is about ensuring a fair and correct 
comparison between two types of transactions that are comparable or that are made comparable 
such that it can be determined wheth er the product was introduced into the commerce of another 
country at less than its normal value.8 The EU also considers that the fourth sentence of Article 2.4 
is evidence of the fact that Article 2.4 does not embody the "follow the money principle ".9 
 
9. Indonesia also argues that the European Union violated Article 2.4 for treating two 
Indonesian producers in similar situations in different ways. However, also this argument is 
divorced from the text of Article 2.4 which contains the general obligation to  make a fair 
comparison and to adjust for factors affecting price comparability. In any case, the differences in 
the situation of the two Indonesian exporters justified a different treatment.  
 
10. The essential question under Article 2.4 is whether there i s an objective difference affecting 
price comparability between the export price and the normal value. It is immaterial whether the 
difference affecting price comparability is, for example, a cost of additional material sourced from 
a related or integrated  company or from a third party supplier.10 Thus, the question is not whether 
the commission is paid to a related party or not. The focus of Article 2.4 is on the price 
                                               
3 Indonesia's first written submission, paras. 4.51 –4.52. 
4 Indonesia's first written submission, para. 4.57.  
5 Indonesia's first written submission, para. 4.67.  
6 Indonesia's first written submissio n, paras. 4.67 –4.71. 
7 Indonesia's first written submission, paras. 4.119 and 4.278.  
8 See European Union's response to Panel Question 7.  
9 See European Union's response to Panel Question 13.  
10 See European Union's response to Panel Question 10.  WT/DS442/R/Add.1  
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  discrimination and the need to ensure a proper apples -to-apples comparison between the ex port 
price and the normal value, adjusted for differences that affected the prices paid by the consumer 
in one context that were not affecting the price in another context.  
 
11. The European Union, like many other Members, considers that sales commissions can 
constitute an objective difference affecting price comparability and has included "commissions " in 
the list of factors that may require an adjustment.11 In that sense, the EU Basic Anti -Dumping 
Regulation goes beyond Article 2.4 that does not expressly refer to commissions. The interference 
of a sales agent in the export sale of a product may introduce an element that can affect price 
comparability. This is particularly the situation where there is no sales commission paid for the like 
product on the dom estic market, but a commission is paid in relation to export sales, or vice versa  
of course. Just like differences between domestic sales and export sales in terms of insurance or 
credit costs need to be adjusted, a difference in commissions paid to tradin g companies that are 
involved in the sale of the product require an adjustment if the commission is lower or non -
existent on either the normal value or the export price side, regardless of the degree of closeness 
between the trading company and the produce r. 
 
12. In the present dispute, the European Union examined all the relevant facts in relation to PT 
Musim Mas' export of the product concerned and domestic sales of the like product and concluded 
that the commission paid to ICOF –S for export sales affecte d price comparability as no similar 
expense was incurred by PT Musim Mas for the domestic sales. The record evidence clearly shows 
that PT Musim Mas and ICOF –S signed a Sale and Purchase Agreement, a contract that 
undisputedly only concerns export sales an d which stipulated that ICOF –S receives a commission 
(in the form of a mark -up) for every export sale it intervenes in.12 Neither the contract nor any 
other piece of evidence presented to the European Union showed that a similar direct selling 
expense was i ncurred for the domestic sales made by PT Musim Mas.13 All other things being 
equal, if there were no export sales, ICOF –S would receive neither a commission nor other forms 
of remuneration from PT Musim Mas that could be equated to that commission.  
 
13. However, Indonesia argues that the Sale and Purchase Agreement, despite its name and 
terms, was drafted for complying with tax laws in Singapore and Indonesia and in order to show 
that transfer prices between the two entities reflect the arm's length princip le.14 Indonesia invites 
the Panel to ignore what the contract says in clear terms, and suggests that the Panel should 
conduct a de novo  review. Indonesia logically fails to show that by accepting the terms of the Sale 
and Purchase Agreement, the European Co mmission acted in an unreasonable and biased manner.  
 
14. In summary, Indonesia has failed to establish a prima facie  case that the adjustment is 
inconsistent with Article 2.4. In fact, the European Union was not only entitled to reach this 
reasonable and reasoned conclusion that the ICOF –S' sales commission affected price 
comparability, it was "required " by Article 2.4 to adjust for this difference.  
 
B. The existence of a single economic entity is not a relevant consideration under 
Article 2.4  
 
15. Indones ia acknowledges that a commission paid to a trader may warrant an adjustment 
because it may affect price comparability.15 It disputes instead the adjustment because of the 
European Union's failure to recognize the single economic entity allegedly formed by PT Musim Mas 
and ICOF –S. The European Union has already demonstrated that whether or not a single economic 
entity exists is not the relevant question for the application of Article 2.4. In fact, the claim that no 
adjustment is warranted where a single econ omic entity exists between the producer and its trader 
lacks a legal basis in Article 2.4.  
 
16. The lack of a legal basis in the Anti-Dumping Agreement  is evident from Indonesia's first 
written submission where, in over 50 pages, it is unable to substantia te a relevant legal obligation 
that the European Union would have violated when making the adjustment. Indeed, the "single 
economic entity " concept does not even exist in the Anti-Dumping Agreement and it certainly is 
not part of Article 2.4. Indonesia dul y acknowledges that "there is no provision of the 
                                               
11 This is reflected in Article 2(10)(i) of the EU Basic Anti -Dumping Regulation, Exhibit EU –3. 
12 Exhibit IDN –25; see also Indonesia's first written submission, para. 4.201.  
13 See Exhibit IDN -21, pp. 2 and 3.  
14 Indonesia's first written submission, para. 4.227.  
15 Indonesia's first written submission, para. 4.67.  WT/DS442/R/Add.1  
- B-5 - 
 
  Anti-Dumping Agreement  that explicitly references or defines a [single economic entity] ".16 
Indonesia merely cites to WTO jurisprudence in relation to Article 6.10 of the Anti-Dumping 
Agreement  to argue that  the concept of a single economic entity is "well-engrained in WTO case 
law".17 It also loosely argues that "several provisions in the Anti -Dumping Agreement – in 
particular Articles 2.4 and 6.10 – implicitly require consideration whether two or more formal ly 
separate entities form an [single economic entity] ".18 
 
17. Indonesia is wrong for many reasons. First of all, the fact that Indonesia has to rely from the 
beginning on an "implicit " requirement is telling. It is undisputed in the WTO that a panel's 
analysis of the legal obligations imposed on Members of the WTO is to be based on the text of the 
Agreement. We recall the Appellate Body's statement in India – Patents that "principles of 
interpretation neither require nor condone the imputation into a treaty  of words that are not there 
or the importation into a treaty of concepts that were not intended. "19 
 
18. Second, Indonesia's reference to the WTO jurisprudence on Article 6.10 of the Anti-Dumping 
Agreement  does not suggest that authorities are "implicitly required " to examine whether 
companies form a single economic entity. The question addressed in the two cases referred to by 
Indonesia, Korea – Certain Paper  and EC – Fasteners (China) , considered whether the authorities 
could deviate from the general rule  in Article 6.10 of calculating separate dumping margins when 
several companies can be considered as a single "exporter " because of the corporate and 
functional links between them. At no point in these two cases did the panels or the Appellate Body 
impose a "requirement " to examine this relationship. They merely considered whether the 
language of Article 6.10 allowed investigating authorities to impose a single dumping margin on 
closely related entities.  
 
19. Third, in neither Korea – Certain Paper  nor EC – Fasteners (China)  did the panels or the 
Appellate Body consider the existence of a single economic entity in relation to the application of 
Article 2.4. It was only considered in relation to Article 6.10 and for obvious reasons given that the 
calculation of individual dumping margins for entities that are actually part of the same economic 
entity could lead to circumvention and avoidance of the payment of duties thus undermining the 
protection to be afforded to the domestic industry. The willingness to ent ertain this concept in both 
cases made perfect sense in the logic of Article 6.10; it does not make sense in the price 
comparability logic of Article 2.4.  
 
20. The European Union notes with particular interest Indonesia's frequent references to the 
Korea – Certain Paper  dispute in support of its single economic entity argument. What is 
interesting about the panel's findings in that dispute is that, in so far as the panel dealt with claims 
under Article 2.4 of the Anti-Dumping Agreement , its findings actuall y go against Indonesia's 
arguments in this dispute.  
 
21. First, the panel acknowledged in the context of its Article 6.10 analysis that the trading 
company and the relevant Indonesian producers formed a single economic entity, the "Sinar Mas 
Group ".20 Howev er, this fact played no role in the panel's analysis under Article 2.4 as to whether 
any adjustments were required to ensure price comparability. Instead, the panel rightly focused 
solely on whether evidence had been presented of a difference between norma l value sales and 
export sales that required an adjustment. So, the very same panel that for the first time discussed 
the concept of a single economic entity in the context of Article 6.10 and made findings that such a 
single economic entity existed betwee n the trader and the producing companies in Indonesia did 
not even refer to this relationship when examining whether adjustments under Article 2.4 were 
warranted. Under Article 2.4, the existence or not of a single economic entity was a completely 
irreleva nt consideration for the panel. It should be the same in the current dispute.  
 
22. Second, the panel in Korea – Certain Paper rejected Indonesia's claim that an adjustment 
was required because Indonesia had failed to present evidence of such a difference a ffecting price 
comparability.21 The panel expressly rejected the notion that the intervention of a trading company 
                                               
16 Indonesia's first written submission, para. 4.120.  
17 Indonesia's first written submission, para. 4.120.  
18 Indonesia's first written submission, para. 4.120.  
19 Appellate Body Report, Japan – Alcoholic Beverag es II, pp. 11 – 12; see also Appellate Body Report, 
India – Patents (US) , para. 45.  
20 Panel Report, Korea – Certain Paper , paras. 7.165 –7.168.  
21 Panel Report, Korea – Certain Paper , para. 7.147.  WT/DS442/R/Add.1  
- B-6 - 
 
  was relevant as such but rather focused on whether there was evidence of any difference affecting 
price comparability. It was not convinced th at there were sales -related services rendered by the 
trading company in the Indonesian market which were not rendered in the context of export sales 
to Korea and thus considered that Indonesia had failed to make a prima facie  case that 
adjustments were nec essary. In the Fatty Alcohol investigation, the European Union did have such 
evidence before it, notably in the form of the Sale and Purchase Agreement that refers to the 
payment of commissions only for export sales. No evidence was presented by Indonesia or the 
Indonesian producers that similar commissions were also paid for domestic sales related support 
by the trading company.  
 
23. Third, the dispute in Korea – Certain Paper is also interesting because Indonesia was one of 
the disputing parties and it is  striking to note that its position in that dispute is the exact opposite 
of what it argues in the present dispute. In Korea – Certain Paper , Indonesia argued that an 
adjustment was required  for the interference of the trader that formed a single economic entity 
with the producing company because the trader was only involved in the domestic sales and not in 
the export sales. Thus, Indonesia considered that an adjustment should have been made for the 
costs of the additional sales -related services of the trad er in the domestic market. However, 
because the Korean authority failed to adjust for lack of evidence of such a difference, Indonesia 
alleged a violation of Article 2.4 of the Anti-Dumping Agreement .22 
 
24. Indonesia's argument in the present dispute  is the exact opposite where it considers that no 
adjustment  shall be made because of the existence of a single economy entity between PT 
Musim  Mas and ICOF –S. Although these positions on the same issue are diametrically opposed to 
each other, the European Union  understands the reason for this opportunistic shift in position:  
 
In Korea – Certain Paper , Indonesia wanted to reduce the normal value to avoid a dumping 
determination and thus argued for a downward adjustment of the normal value because of the 
involveme nt of the related trader in the domestic sales; and  
In the present dispute, Indonesia wants to maintain the export price as high as possible to avoid a 
dumping determination by arguing that no adjustment is required for the involvement of the 
related trade r in the export sales.  
25. The opportunistic shift in positions is strategically understandable but does at the same time 
reveal the weakness of Indonesia's present claim under Article 2.4.  
 
26. In sum, the European Union considers that Indonesia has not d emonstrated any legal basis 
for its claim that the European Union violated Article 2.4 by failing to account for the alleged single 
economic entity between PT Musim Mas and ICOF –S. Indonesia opportunistically attempts to 
create an obligation in Article 2.4  that simply does not exist in the text of the Anti-Dumping 
Agreement  and that is not supported by the WTO jurisprudence it refers to. For this reason as well, 
Indonesia's claim under Article 2.4 as well as its purely consequential claim of violation of 
Article 2.3 should be rejected.  
 
C. Even accepting arguendo  the relevance of a single economic entity in Article 2.4, 
Indonesia has failed to demonstrate that the European Union failed to take this into 
consideration  
 
27. Even accepting arguendo Indonesia 's argument that it is necessary to consider whether a 
single economic entity exists under Article 2.4, Indonesia has failed to demonstrate that the 
European Union violated such an (non -existing) obligation. The facts on the record did not lead the 
European C ommission to the conclusion that PT Musim Mas and ICOF –S constituted a single 
economic entity. Indonesia fails to demonstrate that the facts were not properly established or 
were examined in a biased and non -objective manner. It simply disagrees with the E uropean 
Commission 's findings of fact and inappropriately invites the Panel to review the facts as if it was 
the trier of fact and not the Commission. The EU General Court already found against PT 
Musim  Mas on this very factual question .23 The Panel may not  reject a determination simply 
because it would have arrived at a different outcome assessing the same facts.24 
                                               
22 Panel Report, Korea – Certain Paper , para. 7.132.  
23 See in particular paras. 123 –138 of the EU General Court's judgment, Exhibit EU –4. 
24 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS , para. 187. WT/DS442/R/Add.1  
- B-7 - 
 
  28. In any case, Indonesia argues that the EU 's determination lacked a sufficient basis in the 
record evidence and that it improperly focused on the functions of ICOF –S as opposed to its 
corporate and structural links  to PT Musim Mas.  These  arguments are unfounded and should be 
rejected because the European Union's determination to make an adjustment was proper, 
unbiased and objective.  
 
29. First, there is no basis in the text of the relevant  provisions to consider that only corporate 
and structural links are relevant for determining the existence of a single economic entity. 
Functions of a related company would appear to be much more relevant given  the focus on the 
actual services rendered. So, this approach is entirely reasonable. Indonesia points merely to WTO 
jurisprudence developed in relation to Article 6.10 of the Anti-Dumping Agreement  which is wholly 
unrelated to the present dispute, as note d earlier. In any case, the focus on corporate and 
structural links makes sense in that context of Article 6.10 for determining whether to calculate 
individual dumping margins for related entities given the risk of circumvention and avoidance of 
duties. Th ere is no reason, however, to apply only that same test under Article 2.4.  
 
30. Second, the EU's determination to make an adjustment was based on record evidence 
presented by PT Musim Mas25, namely: (i) that a very significant portion of ICOF –S' overall sal es 
related to products of producers other than PT Musim Mas; (ii) that the commercial relationship 
between PT Musim Mas and ICOF –S were governed by a Sale and Purchase Agreement containing 
several provisions which clearly negate that ICOF –S was merely an i nternal sales department of PT 
Musim Mas26; and (iii) that all domestic sales and a significant portion of export sales were 
invoiced directly by PT Musim Mas.  
 
31. These factual  circumstances, which Indonesia fails to disprove, led the European Union to 
reasonably reject the contention that ICOF –S was the internal sales department of PT Musim Mas 
with which it allegedly formed a single economic entity. The determination that ICOF –S acted like 
an agent was reasonable as it was based on the totality of the fa cts on the record which were 
evaluated in an unbiased and objective manner. This determination was therefore one that a 
reasonable investigating authority could have made, and should therefore be upheld by the Panel. 
Moreover, the European Commission revis ited these facts and revised the adjustment 
determination for Ecogreen, but not for PT Musim Mas, following a development in the case law of 
the EU Courts. The conclusion that the new case law of the EU Courts did not require repealing the 
adjustment for P T Musim Mas' was, subsequently, upheld by the Court in PT Musim Mas' domestic 
challenge.27 
 
32. Finally, in relation to the alleged discrimination between PT Musim Mas and the other 
Indonesian producer, Ecogreen, Indonesia has not pointed to any legal oblig ation in the 
Anti-Dumping Agreement that the European Union allegedly violated by treating these producers 
differently. At the first hearing of the Panel, Indonesia ultimately confirmed that it did not claim 
that such differential treatment violated Articl e 2.4.28 Even if there was such an obligation 
(quod non), the 2012 Amending Regulation29 demonstrates that the European Union engaged in 
an extensive discussion of the main arguments and factual circumstances on the basis of which the 
decision was taken to a djust PT Musim Mas' export price and for distinguishing its situation from 
Ecogreen.30 There were three main differences in factual circumstances that led to this 
determination: (i) t hat PT Musim Mas made a significant amount of export sales (about 20% of a ll 
export sales) directly while Ecogreen only sporadically engaged in export transactions (not more 
than 5% of all export sales)31, using its trading company for almost all sales; (ii) tha t the 
relationship between PT Musim Mas and ICOF –S was governed by a comprehensive and formal 
Sale and Purchase Agreement and that ICOF –S traded many products from unrelated parties while 
Ecogreen had no contract with its trader, who almost exclusively sold Ecogreen's products; and 
(iii) that the contract between PT Musim M as and ICOF –S stipulated that the trader was to receive 
a mark -up on all export sales in which it intervened and this was circumstantial evidence that the 
                                               
25 See, e.g. European Union's first written submission, para. 95.  
26 See Exhibit IDN –25. 
27 See Ex hibit EU –4. 
28 See European Union's response to Panel Question 18.  
29 Amending Regulation, Exhibit IDN –5. 
30 See, e.g. European Union's first written submission, paras. 97 –99. 
31 Amending Regulation, Exhibit IDN –5, para. 5 and EU General Court's judgment, Exhi bit EU –4, 
para 134. WT/DS442/R/Add.1  
- B-8 - 
 
  trader acted on a commission basis. On the other hand, there was no such contractual provision 
for a commission to be paid by Ecogreen to its trader.  
 
33. For these reasons, the European Union considered that the situation of PT Musim Mas could 
be distinguished from that of Ecogreen. This determination was reasonable as it was based on the 
totality of the  facts on the record which were evaluated in an unbiased and objective manner. 
Leaving aside the lack of legal relevance of the fact that no adjustment was made to Ecogreen, the 
European Union's determination was one that a reasonable investigating authori ty could have 
made. It should therefore be upheld by the Panel.  
 
34. Finally, for the claim of violation of Article X:3(a) of the GATT 1994, which Indonesia orally 
added during the hearing even though it was not included in its first written submission and  not 
even in the written version of the oral statement that was circulated at the time of the first hearing 
of the Panel, Indonesia has failed to make a prima facie  case that the conditions for its application 
are fulfilled. Clearly, merely treating differ ently-situated producers differently in a specific 
anti-dumping investigation is not a violation of Article X:3(a) concerning the uniform and 
reasonable administration of laws and regulations.  
 
35. In sum, all of Indonesia's claims under Article 2.4 and it s consequential claim under 
Article  2.3 are to be rejected as well as the claim under Article X:3(a) of the GATT 1994.  
 
3. Indonesia's erroneous approach to the legal standard in Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement  
 
36. Indonesia's second cl aim argues that the European Union violated Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement  because it allegedly failed to conduct a proper non -attribution analysis. 
In particular, the European Union allegedly failed properly to examine two "known facto rs" other 
than dumped imports, namely (1) the impact of the economic and financial crisis of 2008/2009, 
and (2) the impact of the difficulties faced by the EU domestic industry to source raw materials 
and the fluctuations in prices of these raw materials. Indonesia 's claim, however, is based on an 
erroneous approach to the legal standard of these provisions. It is also based on an inaccurate 
presentation of the facts on the record and of the European Union 's analysis.  
 
37. First, with respect to the economi c and financial crisis, Indonesia errs when it argues that 
the European Union simply rejected its relevance and that the assessment of the role of the crisis 
was not supported by the facts on the record. In fact, the European Union acknowledged that the 
crisis was a factor. This factor was examined in light of the evidence on the record and involved an 
examination of the coincidence in developments in the injury factors, the financial crisis, and other 
demand -related developments. The European Union carried  out a proper correlation analysis which 
is central to the causation analysis as indicated by the Appellate Body.32 Based on this analysis, 
the European Union reached the reasonable and reasoned conclusion that although the economic 
crisis may have contribu ted to the injury caused by the dumped imports, it was not of such impact 
that it broke the causal link.  
 
38. Indonesia makes a big issue of the fact that the European Commission seemed to consider 
that the financial crisis only started in 2008 and asserts  that this vitiates the whole reasoning of 
the Commission.33 However, the Commission acknowledged that the economic downturn started 
in 2008, whilst it cannot be disputed that the effects for the real economy only became manifest 
in 2009. In any case, irres pective of when exactly the crisis started, when demand increased again 
reflecting a general economic recovery, the Union industry did not recover due to the massive 
presence of dumped imports.34 The Panel should therefore reject Indonesia 's attempt at seek ing a 
de novo  review of the facts as established and properly examined during the original investigation.  
 
39. Moreover, Indonesia acknowledges that the Anti-Dumping Agreement provides "considerable 
latitude " to investigating authorities to carry out the n on-attribution analysis.35 Yet, Indonesia 
attempts to impose a heightened standard on the European Union by pointing to one panel report 
that noted a preference for use of economic models. However, this attempt to impose an 
obligation to conduct a quantitat ive as opposed to a qualitative non -attribution analysis should be 
                                               
32 Appellate Body Report, Argentina – Footwear (EC) , para. 144.  
33 Indonesia's first written submission, paras. 5.34 –5.43. 
34 European Union's first written submission, paras. 133, 146 –147. 
35 Indonesia's first written submission, para. 5.9 4. WT/DS442/R/Add.1  
- B-9 - 
 
  rejected. The proper standard remains whether the European Union properly established the facts 
with respect to the other "known factors " and evaluated the evidence in an objective and unbi ased 
manner.  
 
40. Second, with respect to the claim that access to raw materials was a separate cause of 
injury to the domestic industry and that this was not properly examined, Indonesia also errs both 
on the law and on the facts. Indonesia fails to subst antiate the importance of this issue to elevate 
it to a "known factor ".36 It is not an obligation of investigating authorities to examine every factor 
alleged to have caused injury to the domestic industry, but only those "known factors … which at 
the same time are injuring the industry ". Article 3.5 r equires an interested party to provide 
sufficient argument and evidence of the injurious effect of this factor and not merely to mention a 
factor in passing among many others as the Indonesian producers did at the start of the 
investigation only. In any case, Indonesia itself appears to admit that the price volatility of raw 
materials was closely connected to the economic crisis which was properly examined by the 
European Union. Indeed, Indonesia's argument is a rtificial because it separates the economic crisis 
from its concrete effects. It seeks to elevate to the position of "other factors causing injury " a 
possible aspect of the crisis. Furthermore, the argument that the domestic industry in the 
European Union has greater difficulties to source raw materials is simply not a factor causing injury 
but merely a structural aspect of the conditions of competition. There was no evidence to suggest 
that this was a separate cause of injury to the domestic industry; rath er it appears to be part of 
the conditions of competition which existed also before the dumping.37 The European Union's 
conclusion was reasonable and supported by the facts on the record.38 
 
41. For these reasons, Indonesia 's claim under Articles 3.1 and 3.5  should be rejected by the 
Panel.  
 
4. Indonesia's claim that the European Union failed to disclose verification results is 
in error  
 
42. Finally, Indonesia's third claim that the European Union violated Article 6.7 of the 
Anti-Dumping Agreement  by failing to provide any meaningful information about the results of the 
verification visits to Indonesia is in error. As the record evidence demonstrates, the 
European  Union provided full disclosure  of the essential facts relating to its final determination to 
the relevant Indonesian firms, including the results of the verification visits. Moreover, Article 6.7 
does not impose an obligation on investigating authorities to prepare a detailed report of a 
verification visit or of the reasons why certain information was  requested during verification. It 
only requires that the "results " of the verification be communicated. This was clearly done by the 
European  Union after the verification in the specific disclosures, in the General Disclosure 
Document and the Provisional and Definitive Regulations.  
 
43. The Anti-Dumping Agreement  provides no definition or guidance regarding the exact content 
of the disclosure obligation relating to the "results " of the verification, however the ordinary 
meaning of the term "results " is "an effect, issue, or outcome from some action, process or 
design ".39 The evaluation of the evidence by the investigating authority is not part of the "results " 
of the verification visit. Instead, it refers to the essential factual outcome of the verification.  This 
could include the list of exhibits that were provided during verification. It could also include, where 
relevant, other relevant outcomes such as refusals to provide certain information.  The purpose is 
to inform parties of verification -related develo pments that could potentially have consequences for 
the final determination.  Article 6.7 does not impose a "reporting " obligation, as Indonesia seems to 
suggest, but a mere obligation to "make available " or "disclose " the results to the relevant 
interested  parties.40 
 
44. Moreover, the Commission underlined that during the verification visit mistakes and errors 
were corrected in agreement with the company. A list of exhibits that were provided by the 
Indonesian producers at the time of the verification was a lso made available. Indonesia does not 
deny that such discussions took place and that such an agreement was reached. Nor does 
Indonesia argue that PT Musim Mas made comments concerning the disclosures as explicitly 
                                               
36 See European Union's response to Panel Questions 21 and 23.  
37 See European Union's response to Panel Question 22.  
38 See European Union's response to Panel Question 21.  
39 Appellate Body Report, US – Steel Safeguards , para. 315.  
40 See European Union's r esponse to Panel Question 26.  WT/DS442/R/Add.1  
- B-10 - 
 
  invited by the Commission41, in order to p oint out omissions or other errors, but that those 
comments went unheard. It is also striking that Indonesia cannot point to any information, data or 
behaviour whose absence from the disclosure documents might have affected the position of 
PT Musim Mas. Ba sically, it is clear from its first written submission that rather than the "results " 
of the verification, Indonesia would like this Panel to blame the Commission not to have disclosed 
the "minutes " of the verification.42 However, that is not what the langu age of Article 6.7 requires.43 
Indonesia's claim of a violation of Article 6.7 is therefore without merit.  
                                               
41 See Exhibit EU –1. 
42 Indonesia's first written submission, paras. 6.55 and 6.64.  
43 See European Union's response to Panel Question 26.  WT/DS442/R/Add.1  
- B-11 - 
 
  ANNEX B -2 
SECOND INTEGRATED EX ECUTIVE SUMMARY  OF THE  
ARGUMENTS OF  THE EUROPEAN UNION  
1. Legal Analysis  
 
1. Indonesia raised three sets of claims aga inst the European Union's AD measure on fatty 
alcohols. As demonstrated in the European Union's first written submission, all three sets of claims 
are based on an erroneous interpretation of the relevant provisions of the Anti-Dumping 
Agreement and in fact  request the Panel to make a de novo assessment of the facts on the record. 
Indonesia fails to rebut the arguments presented by the European Union in its first written 
submission.  
 
1.1. Claim 1: Indonesia's claim that the European Union's adjustment for c ommissions paid 
to ICOF -S violated Articles 2.3 and 2.4 of the Anti -Dumping Agreement is without 
merit  
 
2. Indonesia argues that the European Commission made an allegedly inappropriate 
adjustment for the sales commissions paid to a trading company based in  Singapore, ICOF -S, 
when calculating the export price of PTMM, the producer of the product under consideration. 
Indonesia fails to respond to the arguments developed by the European Union under Article 2.4 of 
the Anti-Dumping Agreement . 
 
3. Indonesia fails  to rebut the argument of the European Union that the notion of a Single 
Economic Entity ( "SEE") is foreign to Article 2.4 of the Anti-Dumping Agreement  and that the 
existence of a relationship between certain entities does not preclude making adjustments for 
differences affecting price comparability. The determinative question is not whether two entities 
are related but whether there exists evidence of a difference affecting price comparability which 
requires that an adjustment be made. Without addressing the European Union's legal arguments 
under Article 2.4 of the Anti-Dumping Agreement , Indonesia simply asserts that its position is 
"obvious as a matter of common sense. " It argues that "splitting up a previously integrated 
company … cannot be an automatic  reason for treating them as independent so as to justify 
imputing a "commission " adjustment under Article 2.4. " This argument is purely theoretical and 
does not reflect the facts of the case. ICOF -S is simply not a spinoff of the internal sales 
department  of PTMM. In addition, it is based on a flawed legal interpretation of Article 2.4 of the 
Anti-Dumping Agreement .  
 
4. In fact, in its answers to the Panel questions, Indonesia contradicts its own claim. It 
provides an example that contradicts the main arg ument on which its case rests. Its example 
suggests that it does not contest the fact that an adjustment was made for the intervention of the 
related trader in Singapore, but that it takes issue solely with the amount of the adjustment. 
However, its legal claim is not about the amount of the adjustment but about the fact that an 
adjustment was made to a transaction between related parties. Indonesia has consistently argued 
that the key issue is that no adjustments can be made for transactions between affili ated parties 
because these do not affect the price of the transaction. According to Indonesia, no adjustment 
can be made at all if the two entities involved are related parties. Thus Indonesia's legal claim in 
the present case is contradicted by the very e xample Indonesia provides.  
 
5. In any case, the European Union considers that Indonesia's approach is entirely misguided 
and not supported by the text of Article 2.4 or its context. Indonesia's legal argument is not based 
on the text of Article 2.4 of the Anti-Dumping Agreement  and the "follow the money " principle that 
it seeks to read into this provision is simply an invention of Indonesia that is contradicted by the 
context of this provision. First, Article 2.4 is silent on the relevance of any relationsh ip between the 
parties. This contrasts with other provisions of the Anti-Dumping Agreement  that expressly 
concern the treatment of "related parties " (such as Articles 4.1 and footnote 11 of the 
AD Agreement on the definition of the domestic industry or Art icle 9.5 on the determination of an 
individual margin of dumping for new shippers). Second, neither in Article 2.4 nor in any other 
provision of the Anti-Dumping Agreement  is the concept of a SEE used, let alone defined in any 
way. Third, the notion of an SEE was used only in two instances in WTO disputes, in an entirely WT/DS442/R/Add.1  
- B-12 - 
 
  different context relating to the possibility to apply the same dumping margin to closely related 
entities. Fourth, in neither of these disputes was the investigating authority required to examine 
whether companies formed an SEE, as the question was merely whether an authority was 
permitted to consider this relationship in light of the requirement of Article 6.10 of the 
Anti-Dumping Agreement  to determine an individual margin of dumping for each producer or 
exported under examination. Fifth, in the WTO dispute in which this notion of an SEE was first 
addressed in the context of Article 6.10 of the Anti-Dumping Agreement , Korea – Certain Paper , 
this very same concept was completely ignored in the context of the Article 2.4 discussion of the 
panel in that dispute. There is therefore no basis for Indonesia's focus on the existence of an SEE 
under Article  2.4 and none has been offered by Indonesia in this dispute. In fact, as noted before, 
even In donesia agrees that it is possible to make an adjustment for payments made between 
related parties, and that the only question concerns the amount of the adjustment which may be 
affected by the relationship.  
 
6. Indonesia's failure to respond to the argume nt of the European Union based on the Panel's 
findings in Korea – Certain Paper , the one relevant WTO precedent in which Indonesia was directly 
involved as a complaining party, is also telling. Indonesia tries to avoid the obvious conclusion that 
the panel  in that dispute did not consider the existence of a "single economic entity " to be a 
relevant factor for purposes of determining whether an adjustment was warranted. And neither did 
Indonesia in that case. In fact, it appears that Indonesia was arguing in  favour of making an 
adjustment for the services rendered by the related trading company with respect to domestic 
sales in an effort to lower the normal value, thus arguing that an adjustment was required to 
reflect the involvement of the "closely related " trading company.  
 
7. In any event, Indonesia's legal argument lacks any textual basis and is fundamentally 
flawed.  
 
8. Article 2.4 does not set forth a "follow the money "- principle. Indonesia confuses the 
suggestion  in Article 2.4 to make the comparison "at the same level of trade, normally at the 
ex-factory level " with a requirement  to determine how much of the money paid by the buyer of the 
goods stays with the producer. Furthermore, the "ex factory " recommendation is not a suggestion 
that an investigat ing authority is to pierce the corporate veil to look into the pockets of the 
producer to see how much money he was really making on the sale. The recommendation to 
compare transactions "ex factory " is simply a way of ensuring a comparison that is not affe cted by 
differences in transportation costs, insurance costs, distribution costs, etc. and reflects the fact 
that prices of sales to a distributor can be expected to be different from prices of sales to a 
wholesaler and different from prices of sales to a consumer. It is merely a recommendation but 
there is no obligation (as Indonesia suggests) to compare prices at the "ex factory " level. Nothing 
stops an authority from adding the cost of distribution in order to fairly compare a sale to a 
distributor with a domestic sale that is made directly to the end consumer for example. The 
comparison must not necessarily be made at the "ex factory " level in order to be fair.  
 
9. Indonesia tries to read legal distinctions into the text of Article 2.4 that are simply n ot there. 
Indonesia is making a semantic argument based on terms like "commissions " "direct selling 
expenses " and "notional " versus "objective " expenses that are not even used in Article 2.4 of the 
Anti-Dumping Agreement .  
 
10. Article 2.4 requires that du e allowance shall be made for any difference affecting price 
comparability. The payment of commissions to a trader in relation to export sales and not 
domestic sales (or vice versa ) is a relevant feature of the transactions that are compared and 
account sh ould be taken of this feature. It may be qualified as a "commission " or "direct selling 
expense " for which it is well accepted that an adjustment can be made. The artificial separation 
that Indonesia seeks to draw between "direct selling expenses " and "commissions " is irrelevant 
and baseless. Similarly baseless is Indonesia's distinction between "objective " costs and other 
expenses of the related trader and why an adjustment for such "objective costs " would be 
warranted between related parties but no other adjustments for what can be assumed to be "un-
objective " costs? There is nothing in Article 2.4 of the Anti-Dumping Agreement  that Indonesia can 
point to in support of its constructed legal argument that is completely divorced from the text of 
Article 2.4 of the Anti-Dumping Agreement . There is simply no basis in Article 2.4 or any other 
provision of the Anti -Dumping Agreement for Indonesia's legal conclusion that "in the case of 
payments made between closely -related entities, the requirement of "price comp arability" under 
Article 2.4 requires an investigating authority to examine whether a particular flow of funds WT/DS442/R/Add.1  
- B-13 - 
 
  reflects either an "objective" expense (that does "affect price comparability" and should be 
adjusted for); or instead a mere shifting of funds ( allocation of profits) between related parties 
(that does not affect price comparability and must not be adjusted for) ". This lifting of the 
corporate veil that Indonesia claims is "required " under Article 2.4 does not make legal or 
economic sense and rais es more questions than it answers, given the absence of any textual 
guidance in the Anti -Dumping Agreement. In contrast, the legal position of the European Union is 
text-based and straightforward: is there a difference between the export transactions and t he 
domestic transactions and, if so, is this a difference that affects price comparability.  
 
11. In any case, Indonesia's legal argument is also based on a misunderstanding of the facts 
and findings in this case.  
 
12. Indonesia makes a number of assertions  about the European Union's findings in this case 
which are factually incorrect and misrepresent the conclusions of the investigating authority. The 
European Union never stated that ICOF -S was an "independent trader " and this dispute does not 
concern the i mposition of a "notional " commission where there was "no actual expense ". The 
evidence on the record confirms that an expense was made in the form of a commission/mark -up 
accorded to ICOF -S for its involvement in PTMM's export sales. The adjustment that wa s made to 
reflect the fact that this commission/mark -up related to export sales only, did not mean that the 
investigating authority deducted PTMM's profits and SG&A from the export price. The record clearly 
shows that the European Commission acknowledged t hat ICOF -S was a related trader. The 
Commission did not "change reality " in any way. Nor was the price adjustment made for an 
"imputed, not actual, commission " given that the Sale and Purchase Agreement between ICOF -S 
and PTMM clearly showed that a commiss ion/mark -up was paid by PTMM to ICOF -S and that the 
actual "payment " of that mark -up to ICOF -S was never put into question. Based on the dictionary 
definition of the relevant terms, a "notional " adjustment is an adjustment "based on a suggestion, 
estimate,  or theory; not existing in reality ". But, in this case, the Sale and Purchase Agreement 
makes this adjustment anything but "notional ". It is an adjustment based on a valid contract that 
both companies relied on. This contract was provided to the investiga ting authorities and the 
companies were expecting the tax and customs authorities to rely on this contract as well. It is 
thus simply not correct to refer to a "notional " adjustment in the current situation. The fact that 
the investigating authority did no t accept the amount of the commission at face value but decided 
to construct the amount of the commission, does not turn the adjustment into an adjustment that 
is not based on reality. It is simply a matter of ensuring that the amount of the adjustment is not 
affected by the relationship between the parties.  
 
13. Furthermore, Indonesia is not correct to assert that the Commission "rejected the 
transaction price " between PTMM and ICOF -S and "calculated the export price on the basis of the 
sale to an "indepen dent" customer in the EU ". Indonesia is confusing the two sales channels and 
thus the two ways in which the export price was determined. All export sales to the EU were made 
via ICOF -S, the related trader in Singapore. Some of the sales went from ICOF -S to the related 
importer in the EU, ICOF -E, and some other sales went directly from ICOF -S to unrelated buyers in 
the EU. For sales made by ICOF -S to the related importer in the EU (ICOF -E), the export price was 
constructed on the basis of the first sale by I COF-E to an independent customer in the EU in 
accordance with Article 2.3 of the Anti-Dumping Agreement . For sales that were made via ICOF -S 
to independent buyers in the EU, the export price was not constructed. This means that for sales 
made to unrelated importers in the EU, the price at which the product was introduced into the 
commerce of the European Union, i.e. the price paid by the unrelated importer in the 
European  Union was used as the export price. In order to ensure a fair comparison with the norm al 
value, adjustments were subsequently made pursuant to Article 2.4 of the Anti-Dumping 
Agreement /Article 2(10) of the EU Basic AD Regulation for differences affecting price 
comparability, including for the commissions paid to ICOF -S. 
 
14. Indonesia keeps  suggesting in its replies that the European Commission acknowledged that 
PTMM and ICOF -S were "related " parties and that it thus treated both as a "single entity " for 
purposes of making the dumping determination. Indonesia argues that "[i]n this case, it is clear 
that the EU defined the producer/exporter for which it was calculating dumping margins as PT 
Musim Mas/ICOFS as a whole ". According to Indonesia, this confirms the correctness of 
Indonesia's approach to both companies as being an SEE and it implie s that no adjustment should 
have been made for payments made inside this "single seller ". Indonesia is wrong. Indonesia is 
clearly reading too much into the European Commission's acknowledgement of the relationship 
between PTMM and ICOF -S. A "relationship " exists in the European Union's practice in many WT/DS442/R/Add.1  
- B-14 - 
 
  different situations and even when there is only a 5% direct or indirect shareholding. So, even for 
entities that are not more closely related than that, the reliability of the pricing may be questioned 
and another basis may be used for determining the price. It is therefore simply not so that the 
European Commission first considered PTMM and ICOF -S to be a "single seller " and then treated 
them as "unrelated " parties when making an adjustment. The margin of d umping was determined 
for PTMM and not, as Indonesia wrongly asserts, for PTMM and ICOF -S "as a whole ", whatever that 
may mean.  
 
15. It is correct that the investigating authority decided not accept at face value the amount  of 
the mark -up as shown in the S ale and Purchase Agreement. But Indonesia makes an unjustified 
leap of logic by asserting that the European Union's examination of the amount of the commission 
meant that a commission was simply assumed or "imputed " when none actually existed. That is 
not correct. A commission was "paid" in the form of mark -up. The Sale and Purchase Agreement is 
direct evidence of this agreed payment. An allowance is therefore due given that, according to the 
Sale and Purchase Agreement that was submitted by PTMM during the  investigation, this payment 
was made only for export sales, and no evidence exists of similar payments being made for the 
alleged involvement of ICOF -S in domestic sales. However, the amount of the mark -up "payment ", 
and thus the level of the allowance, m ay be subject to review and verification given the 
relationship between the two entities.  
 
16. In addition, it is not so that the European Union adjusted the export price of PTMM by 
removing the SG&A and profit of PTMM with respect to its export sales but not with respect to its 
domestic sales as Indonesia asserts. The Commission did not deduct any amount of profits for 
PTMM. In fact, this is confirmed by Indonesia in para. 1.69 of its replies in which it states that the 
amount of the export price "includes  PT Musim Mas's profits ". Rather, the investigating authority 
made an adjustment to the export price of PTMM for the direct selling expense of PTMM given that 
PTMM was obliged by contract to pay a commission/mark -up to ICOF -S, just like it used to pay a 
commission to the independent trader it used before.  
 
17. Indonesia is wrong to equate the SG&A of ICOF -S with those of PTMM. PTMM has its own 
SG&A and no adjustment was made for the SG&A expenses of PTMM. The Sale and Purchase 
Agreement makes clear that ICO F-S existed already before PTMM decided to use it as a trading 
company. PTMM agreed on a commission/mark -up to be paid for the involvement of ICOF -S. There 
was no distinction between the part of the mark -up that would cover costs and the part that would 
cover the profit margin of ICOF -S, just like you would expect in a normal trading relationship. 
There is no indication that ICOF -S was required to subsequently transfer the profits back to PTMM 
or that PTMM was covering the costs of ICOF -S. There is no basis  for the suggestion that simply 
because of their shareholding relationship, commissions paid to ICOF -S become part of the SG&A 
of PTMM. And even then, the commission was paid only for export sales. This suggests that there 
was a difference in costs affecti ng price comparability given that such cost was not borne for 
domestic sales activities.  
 
18. Indonesia also seeks to draw the Panel into a big discussion about "transfer pricing 
agreements ". But this dispute does not require the Panel to opine on what con stitutes a transfer 
pricing agreement and what does not. The WTO Agreements do not refer to transfer pricing 
agreements and there is no agreed definition of a "transfer pricing agreement ". Most relevantly, 
however, the Commission did not simply ignore the argument that the Sale and Purchase 
Agreement was a transfer pricing agreement. Rather, it addressed the argument and rejected the 
alleged legal consequences that the Indonesian producer tried to draw. The investigating authority 
referred among others to t he name and "modalities " of the Agreement and explained that even if 
this agreement can also be used for purposes of calculating arm's length prices in accordance with 
applicable tax guidelines, this does not contradict the finding that pursuant to this sa me 
agreement the trader received a commission. Even if the agreement were a transfer pricing 
agreement or had the regulation of transfer pricing as its main objective, it would not mean that it 
is a useless or fraudulent document that investigating authori ties could not rely on as part of the 
totality of the evidence. Transfer pricing agreements are put in place precisely to ensure that, 
despite the relationship between the parties, their transactions are carried out at arm's length just 
as if they were unr elated parties. Tax authorities are expect to rely on those agreements for tax 
purposes as those agreements should genuinely reflect the financial relations taking place between 
related parties. The same holds for Anti -Dumping investigation authorities, un less it is proven that 
the transfer pricing agreement in question is a sham document, which Indonesia has never 
claimed in the present case.  WT/DS442/R/Add.1  
- B-15 - 
 
  19. Therefore, it is not unreasonable or biased of an investigating authority in an Anti -Dumping 
investigation to also attach importance to this agreement and to consider its provisions to be 
trustworthy.  
 
20. Finally, Indonesia appeared to make a separate claim of violation of Article 2.4 of the 
Anti-Dumping Agreement  as a result of the alleged discrimination in trea tment between PTMM and 
Ecogreen. The European Union rebutted that claim by pointing to the lack of legal basis of 
Indonesia's claim. As explained at length in the EU's answers to the questions of the Panel, there 
were a number of differences that led to th e conclusion that the factual circumstances of Ecogreen 
were similar to those present in the Interpipe  case that led the European General Court to find that 
no adjustment was justified. Indonesia is unable to rebut these conclusions and simply tries to re -
litigate the argument it already lost before the European General Court where this argument about 
discriminatory treatment and the application of the European jurisprudence more properly belongs.  
 
21. First, Indonesia does not deny that, as correctly found  by the investigating authority, PTMM 
invoices directly more than 20% of its export sales while Ecogreen only invoices a very small 
number of export sales directly, as was the case for Interpipe . For a number of export sales, PTMM 
"must contract directly " and therefore no mark -up is being paid to ICOF -S. Such direct contracts 
were concluded in a relatively significant number of cases, different from the situation that 
prevailed for Ecogreen. Nothing in Indonesia's reply suggests otherwise.  
 
22. Second, Indo nesia merely repeats its view that no weight should be ascribed to any of the 
provisions of this contract because it is merely a transfer pricing agreement, but it does not deny 
the fact that a contract exists between PTMM and ICOF -S when no such contract exists governing 
the relationship between Ecogreen and its related trader, EOS. That is a matter of fact that further 
distinguishes the factual situation of both companies.  
 
23. Third, with respect to the significance of the trader's activities and the fac t that the trader's 
supplies originate to a significant extent from unrelated companies (similar to the activities of an 
agent working on a commission basis) Indonesia again "fails to see the relevance of the trader's 
activities with respect to products ou tside of the scope of the investigation ", but does not deny 
that those factual findings are correct. The relevance of course is that these were important factual 
considerations that led the European Court in Interpipe  to reach a certain conclusion. Indones ia 
simply tries to minimize the importance of this factual aspect by consistently trying to portray 
ICOF-S as an internal sales department of PTMM which was simply spun off to Singapore for tax 
reasons, while in fact ICOF -S [***] ; ICOF -S was not created as  the internal sales department of 
PTMM at all; and has significant trading activities that are unrelated to the product concerned and 
to PTMM's activities. If that is put in the context of all of the other evidence and is contrasted with 
the situation for EOS, the trading company of Ecogreen, it is clear why this factual aspect 
differentiates the situation of PTMM and ICOF -S from that of Ecogreen and EOS.  
 
24. In sum, although Indonesia disagrees with the weight given by the investigating authority to 
some of the above stated facts and considerations, it fails to demonstrate that those facts are 
incorrect and as a consequence that the investigating could not reasonably have concluded that 
Ecogreen and PTMM were in a factually different situation, taking into  account the relevant factors 
highlighted in the Interpipe  judgment.  
 
25. In addition, Indonesia has completely failed to indicate which legal provision of the 
Anti-Dumping Agreement  would be violated as a result of this alleged error to treat Ecogreen and  
PTMM in the same manner. There is none.  
 
26. In sum, Indonesia failed to rebut the legal arguments made by the European Union and has 
not been able to establish a prima facie  case that the European Union's reasonable and reasoned 
decision to make due allo wances for commissions paid to ICOF -S for export sales only violated 
Article 2.4 of the Anti-Dumping Agreement . Indonesia's consequential claim under Article 2.3 must 
also fail. In its answers to questions of the Panel, Indonesia confirmed that it only add ed this claim 
because it "considered it prudent " to include a reference to Article 2.3 given that certain export 
transactions for which an adjustment was made for the involvement of ICOF -S also involved the 
construction of an export price due to the involv ement of the related importer ICOF -E in the 
European Union. Its Article 2.3 claim is thus entirely consequential and fails, just like its principal 
claim under Article 2.4. Finally, Indonesia did not even begin to develop a prima facie  case under WT/DS442/R/Add.1  
- B-16 - 
 
  its alleg edly consequential claim under Article X.3 of the GATT 1994 and any continued allegation 
of violation of this provision must therefore be rejected.  
 
1.2. Claim 2: Indonesia's claim that the Commission failed to S eparate and distinguish 
known factors other than the dumped imports causing injury in violation of articles 3.1 
and 3.5 of the Anti -Dumping Agreement is in error  
 
27. Indonesia argues that the Commission's determination that dumped imports caused injury 
to the domestic industry is inconsistent with Articles 3.5 and 3.1 of the Anti-Dumping Agreement  
because the Commission allegedly failed to conduct a proper non -attribution analysis. In 
particular, Indonesia claims that the Commission failed to adequately separate and distinguish the 
effects of the ec onomic/financial crisis of 2008/2009 and that it did not properly examine the 
effects of the alleged difficulties faced by the domestic industry concerning access to raw materials 
and the fluctuations in the prices of these raw materials. In its first subm ission, the 
European  Union demonstrated that Indonesia's arguments with respect to both factors are flawed.  
 
28. Indonesia does not present any new arguments in its answers to the questions of the Panel, 
or in its rebuttal submission. It merely repeats it s erroneous assertions about the alleged lack of a 
proper causation and non -attribution analysis by the European Union. Indonesia's unsubstantiated 
and formalistic arguments are without merit and do not establish a prima facie case of violation of 
Articles  3.1 and 3.5 of the AD Agreement.  
 
29. First, on the evaluation of the effect of the economic crisis, it is clear that the Commission 
was well aware of the commonly known fact that the global economic crisis started around the 
second half of 2008. The glo bal economic/financial crisis is a complex phenomenon which develops 
its effects over time and it is simplistic to turn the debate about its effects on injury factors that 
are examined by the investigating authority on a year by year basis into a debate ab out the exact 
starting point of this crisis. The European Union also disagrees with Indonesia that the injury 
analysis is an "unrelated section " for purposes of examining the effects of other factors on injury. 
Article 3.5 of the Anti-Dumping Agreement  that sets forth the non -attribution requirement is one 
paragraph of Article 3, entitled "Injury ". The text of Article 3.5 refers directly to "the effects of 
dumping as analysed under paragraphs 2 and 4 " of Article 3, which form the heart of any 
investigating authority's injury analysis. The causation and non -attribution analysis of Article 3.5 is 
part and parcel of the injury analysis to be undertaken under Article 3 of the 
Anti-Dumping  Agreement. Indonesia's contrary suggestion that it is not appropriate to r efer to 
analysis and conclusions in an investigating authority's injury determination, simply because not 
all of this analysis is provided under the heading "non-attribution " is not supported by the text of 
the Anti -Dumping Agreement, WTO jurisprudence or,  put simply, common sense. The 
European  Union referred to the findings and reasoning of the investigating authority as included in 
the relevant determinations dealing with the economic crisis, both in the specific section dealing 
with causation and non -attribution and in the overlapping section dealing with the evaluation of 
the injury factors.  
 
30. Second, with respect to the alleged effect of the domestic producers' access to raw materials 
and price fluctuation in raw materials, Indonesia confirms that i t "accepts that an interested party 
that raises a particular non -attribution factor must provide some evidence that this factor 
contributed to the injury , thereby triggering the requirement to perform a non -attribution 
analysis ". As demonstrated in the Eur opean Union's first written submission and in the answers to 
the questions of the Panel, that is precisely what the Indonesian interested parties failed to do. 
Indonesia is unable to present any new arguments or evidence to rebut the European Union's 
position. 
 
31. It is telling that both in the submissions and in its answers to questions, Indonesia decided 
to quote the entire paragraph of the October 2010 comments on the application of PTMM in which 
it raised this factor, trying to increase its importance.  In fact, if the Panel goes to the exhibit of 
Indonesia from which this quote is taken, IDN -35, it will see that these two paragraphs are buried 
amidst many other equally unsubstantiated assertions and claims. It is for the interested parties to 
adduce suf ficient evidence of the effects of another factor such that this factor becomes a factor 
that is known to cause injury, requiring the authority to separate and distinguish its effects. It 
does not suffice to simply make a blunt statement at the start of th e investigation without 
adducing any evidence and then to expect the authority to actively seek to obtain the evidence to 
substantiate these assertions.  WT/DS442/R/Add.1  
- B-17 - 
 
  32. In its replies to the Panel's questions, Indonesia argues that PTMM produced evidence 
showing that the fluctuations in the price of raw material was a factor causing injury distinct from 
the economic crisis. Indonesia is wrong. In particular, Indonesia refers in alleged support of its 
argument to page 30 of the Complaint, which it files as Exhibit IDN -58. However, page 30 of the 
complaint (Exhibit IDN -58) discusses a phenomenon that is precisely the opposite of what 
Indonesia considers to have been proven by PTMM, i.e. it discusses the increase of raw material 
prices. It explains that the increase of raw  material prices cannot be a separate injury factor since 
all raw materials for fatty alcohols are traded at world market prices and therefore price 
fluctuations affect all producers. It explains that integrated producers can shift profits between the 
internal profit centres, but cannot avoid the effect of a raw material price increase. Then it adds 
that because the prices of synthetic raw materials and natural raw materials for fatty alcohols have 
not evolved in parallel (which is exactly the opposite of w hat PTMM argued in subsection 4.9 of its 
comments to the complaint), price development in natural raw materials cannot explain the injury 
suffered by all EU producers that use different manufacturing process. Thus the complaint cannot 
constitute even an in dicator (let alone full evidence) of the claim according to which access to raw 
materials constituted a separate cause of injury. Indonesia was not able to point to any other valid 
evidence that could have supported that claim and had been submitted during  the investigation by 
the interested parties. In light of these circumstances, it is clear that it was reasonable of the 
investigating authority to conclude that PTMM did not produce any evidence to substantiate its 
assertion, made only at the very beginni ng of the investigation, that raw material price fluctuation 
constituted a separate cause of injury to the EU industry so as to deserve further investigation. 
Indonesia's argument that, as an active "investigating " authority, the Commission should have 
actively sought for the additional evidence of such a causal impact is without merit. It is telling 
that Indonesia refers to the panel report in Mexico – Rice on the need for an active investigating 
authority. However, the finding that Indonesia refers to is in fact one of the few findings of that 
panel that the Appellate Body reversed. The Appellate Body rejected this specific conclusion that 
Indonesia is relying on and found that the Panel's "extensive interpretation " requiring an "active 
investigating autho rity" imposed too high a burden on the authority.  
 
33. In the context of its discussion of the European Union's rebuttal on the factor "raw material 
prices ", Indonesia repeatedly asserts that the European Union is making "a series of ex post 
arguments, non e of which is reflected anywhere in the Commission's determinations ". The 
European Union objects to the repeated allegation that any assistance offered by the 
European  Union to the Panel in the context of these proceedings to allow it to better understand 
the information provided and to address novel arguments made by Indonesia for the first time in 
this WTO proceeding would constitute undue "ex post " reasoning. The European Union participated 
in these proceedings in good faith and provided answers to the q uestions of the Panel that related 
to certain evidence on the record that was not further developed by the interested parties and 
which therefore did not need to be further analysed by the investigating authority. The 
European  Union offered its views to th e Panel to explain why from an economic and legal point of 
view the statements about the existing conditions of competition between Indonesian producers 
and European producers of fatty alcohols were not relevant and were inaccurate.  
 
34. The Indonesian pro ducers never developed any of the arguments now made by Indonesia in 
this proceeding and it is thus not surprising that the investigating authority did not provide all of 
the reasonable explanation that the European Union has offered to the Panel in search  of a better 
understanding of the facts. It is not correct that, as the defendant in this proceeding, the 
European  Union cannot provide any explanation that is not expressly provided by the investigating 
authority when rebutting arguments that the determin ation made by the authority was biased and 
not reasonable. If that were the case, there would be no point in having a contradictory debate in 
these panel proceedings.  
 
35. In sum, Indonesia has failed to rebut the European Union's argument that effects of the 
economic crisis were properly separated and distinguished and that access to raw materials or the 
impact of raw material prices was not a known factor causing injury that the investigating 
authority was required to examine further as the interested par ties failed to present arguments 
and evidence to this effect, as required. Indonesia's claims under Articles 3.1 and 3.5 are thus to 
be rejected.  
 WT/DS442/R/Add.1  
- B-18 - 
 
  1.3. Claim 3: Indonesia's claim that the C ommission allegedly failed to disclose the results 
of the verificat ion to the verified producers in violation of article 6.7 of the 
Anti-Dumping Agreement is in error  
 
36. Indonesia claims that the European Union violated the obligation under Article 6.7 of the 
Anti-Dumping Agreement  to make available the results of the v erification visit it made to the 
Indonesian interested parties. In the first written submission, the European Union demonstrated 
that Indonesia's claim is based on a misrepresentation of the facts and a misreading of the legal 
obligation imposed by Article  6.7 of the Anti-Dumping Agreement . Indonesia fails to respond to 
both the factual and legal rebuttal arguments of the European Union. Instead, it simply repeats its 
broad reading of what it would have ideally liked the obligation under Article 6.7 of the 
Anti-Dumping Agreement  to be, ignoring that the requirements it reads into Article 6.7 are 
nowhere to be found in the text of that provision.  
 
37. First, on the facts, it is important to re -state what the European Union explained in the first 
written subm ission. Contrary to Indonesia's assertions, it is clearly from the provisional and final 
disclosure documents that the European Union provided "discussion of information that was 
verified, not verified or corrected with respect to essential facts reference d in Article 6.9 " as 
Indonesia seems to suggest is required under Article 6.7 of the Anti-Dumping Agreement . In 
addition, at the end of each verification visit, the Commission and the verified producer agreed on 
a list of exhibits collected during the veri fication.  
 
38. Indonesia tries to support its argument by referring to two documents provided during 
verification. But it suffices to look at the agreed list of exhibits taken at the time of the verification, 
submitted by the European Union as Exhibit EU -14, to see that both documents are clearly 
referenced in this list. Furthermore, this alleged lack of information on these two exhibits shared 
during verification never stopped PTMM from raising the arguments that these exhibits were 
supposed to support. T here is no basis in the record to claim that the interested parties' due 
process rights were in any way affected by the fact that they allegedly did not receive a detailed 
report explaining that these documents were provided during verification. In fact PT MM made 
express reference to these documents in the context of the proceedings before the investigating 
authorities. It was thus able to defend its interests and develop comments based on the 
information submitted during verification. Other "examples " of Indonesia relate to statements that 
were made by PTMM or ICOF -S personnel or representative during the verification and that 
according to Indonesia were not contested on the spot. However, a statement or an oral 
explanation provided during a verification vi sit and which is not confirmed by any concrete 
evidence does not become a result of the verification or an essential fact just because the 
verification team did not consider it necessary to rebut it on the spot or to put it in the context of 
other evidence  on the record.  
 
39. Furthermore, in terms of the legal standard, Indonesia is responding to an argument the 
European Union never made. It is not the position of the European Union that complying with 
Article 6.9 automatically means that Article 6.7 has be en complied with. The ordinary meaning of 
the term "results " is "the effect, consequence, issue, or outcome of some action, process or 
design. " This suggests that what needs to be made available is not the process as such but rather 
the "outcome " of that p rocess. Again, Indonesia seems to acquiesce in the correctness of the 
ordinary meaning of the term as offered by the European Union. It refers to the Appellate Body 
reading of this term in US – Steel Safeguards  as "an effect, issue, or outcome from some ac tion, 
process, or design " and concludes that the results referred to in Article 6.7 are the "effect " or 
"outcome " of the verification visit. The European Union agrees. However, the European Union does 
not understand on what basis Indonesia jumps from this definition to its assertions that "in this 
context [of a verification] the "results " would mean both a simple recital of the evidence obtained 
during the visit and the evaluation of the evidence ". The European Union clearly complied with the 
first suggeste d requirement by exchanging the lists of exhibits and by correcting the data provided 
by the interested parties in agreement with them (which is uncontested) but sees no basis for the 
second requirement, at least not as part of the verification results. Cl early, to evaluate the 
evidence is not the task of the investigators conducting the verification and it cannot be what is to 
be provided in terms of the report of the verification. But, to the extent that the verified results 
relate to the essential facts,  the European Union would agree that, pursuant to the obligation to 
disclose the essential facts, such an evaluation will be provided by the investigating authority with 
respect to these facts at that time. It will be for the interested parties to make com ments, with 
possible reference to the questionnaire information or to information provided during verification. WT/DS442/R/Add.1  
- B-19 - 
 
  Indonesia only confirms everything the European Union has said about the close relationship 
between Article 6.7 and 6.9 of the Anti-Dumping Agre ement . 
 
40. Furthermore, Indonesia keeps citing to one obiter dictum in Korea – Certain Paper , in which 
the panel said that "[i]t is therefore important that such disclosure [under Article 6.7] contain 
adequate information regarding all aspects of the veri fication, including a description of the 
information which was not verified as well as of information which was verified successfully ". This 
statement, which was not essential to the panel's finding and was not appealed, must be read in 
its context. First,  in that investigation, the Indonesian exporters had expressly requested to see 
the results of the verification but their request had been denied. Second, the real reason why the 
panel found a violation was because the authority "did not inform the two Sin ar Mas Group 
companies of the verification results in a manner that would allow them to properly prepare their 
case for the rest of the investigation ". There is no basis for a similar conclusion in this case, as 
demonstrated above. The European Union sent a list of information to be verified before the visit 
and agreed on a list of exhibits taken at the time of concluding the verification. The interested 
parties never complained about a lack of information on the results of the verification, despite 
frequen t references to the verification visits in the provisional and final determinations  
 
41. In addition, as confirmed by the lack of claims by Indonesia under Articles 6.2, 6.4 or 6.9 of 
the Anti-Dumping Agreement , Indonesia does not consider that its due pr ocess rights were 
violated or that the disclosure of essential facts was deficient. Again this contrasts with the claims 
and arguments made in Korea – Certain Paper . 
 
42. Indonesia continues to seek to raise the profile of the last sentence of Article 6.7 as if this 
"verification results "-disclosure obligation is the alpha and omega of due process. It asserts that 
"exporters must know what information was not verified — so that they can make further efforts 
to put the investigating authority in a position t o ultimately verify that information — as well as 
what information was verified. This information is important for the exporter given that verified 
information must in principle be used by the investigating authority, and the exporter thus need 
not any lon ger devote its scarce resources to convincing the authority about the reliability of that 
information ". Indonesia's approach to on -site verification and the alleged consequences of 
verification is entirely misguided and it grossly over -states the importanc e of the last sentence of 
Article 6.7.  
 
43. First of all, exporters of course do know what information is verified as they are present 
throughout the on -site verification process, as is clear from the legal counsel's notes on which 
Indonesia relies. So, th e premise of Indonesia's argument is once again flawed. Second, there is 
no obligation on Members to conduct an on -site verification. That is clear from the text of 
Article  6.7 (using the term "may") and has been confirmed in WTO jurisprudence. Third, in m ost 
cases verification is a documentary process that the investigating authority undertakes on the 
basis of the information provided and based on any additional information it requests the 
interested parties to provide. Therefore, interested parties do not  really know how the 
investigating authority will appreciate those documents until they see the disclosure of the 
essential facts. Yet, this does not pose a problem from a due process perspective. Fourth, it is 
simply not the case that because information has been verified it is necessarily relevant and 
probative such that it must be used by the investigating authority, contrary to what Indonesia 
seems to suggest. It simply means that the authority checked whether that piece of information is 
correct. But t his piece of information still needs to be placed in the context of all of the other 
information. Its relevance and weight is still to be reasonably determined by the authority, 
irrespective of whether it was verified or not. Fifth, Indonesia errs in its r eliance on Article 6.8 and 
Annex II. These provisions concern a different situation: if the necessary information has not been 
provided within a reasonable period of time or if the producer has impeded the investigation, 
Annex II provides that information that is "verifiable " should still be used by the investigating 
authority as part of its reliance on the best information available. Annex II does not require an on -
site verification and does not state that information provided during verification – and onl y such 
verified information – can and must be used. In any event, this issue does not arise in the present 
case as the interested parties cooperated with the investigating authority to the extent that during 
the verification visits they agreed on the corre ctions to be made to the data previously submitted 
to the investigating authority.  
 
44. Indonesia completely over -states the importance both of the on -site verification process and 
of the fact that information was verified. Its suggestion that exporters w ill continue to use their WT/DS442/R/Add.1  
- B-20 - 
 
  "scarce resources " to get the authority to further analyse certain information as long as they do 
not know whether such information was verified, is not what happens in practice and is not 
required by the text of the Anti -Dumping Agreement. Indonesia is simply inventing these systemic 
concerns  
 
45. Indonesia has failed to rebut the European Union's factual and legal arguments.  
 
46. Indonesia's claim is not supported by the facts on the record and is based on an erroneous 
reading o f the obligation contained in Article 6.7 of the Anti-Dumping Agreement . The 
European  Union respectfully requests the Panel to reject Indonesia's claim under Article 6.7 of the 
Anti-Dumping Agreement  relating to the results of the verification visits.  
 
2. Conclusions  
 
47. For the reasons stated in this submission, the European Union respectfully requests the 
Panel to reject all of Indonesia's claims.  
 
_______________  
 
 
 WT/DS442/R/Add.1  
- C-1 - 
 
  ANNEX  C 
ARGUMENTS OF INDONES IA 
Contents  Page  
Annex  C-1 First i ntegrated executive summ ary of the arguments of Indonesia  C-2 
Annex  C-2 Second integrated executive summary of the arguments of Indonesia  C-17 
 
 WT/DS 442/R/Add.1  
- C-2 - 
 
  ANNEX C -1 
FIRST  INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS OF INDONESIA  
1. INTRODUCTION AND OVE RVIEW  
1.1. In this dispute, Indones ia challenges certain anti -dumping measures imposed by the 
European Union on so -called fatty alcohols imported into the European Union from Indonesia.  
 
1.2. At the heart of this dispute lies an improper deduction that the EU made when calculating 
the ex -factory export price for the Indonesian exporter PT Musim Mas. That deduction accounted 
for practically the entire dumping margin. In addition, the Commission failed to conduct a proper 
non-attribution analysis, thereby improperly attributing the injury to t he Union's industry to the 
allegedly dumped imports. The Commission also failed to disclose to the exporters the results of 
the verification conducted at their premises.  
 
1.3. The Commission's determinations and the EU's arguments before the Panel are inco rrect as 
a matter of substance, on both the relevant legal and on factual issues. In addition, the EU relies 
on extensive ex post rationalisations, that is, reasoning that was not contained in the 
Commission's determinations and that the EU has developed f or purposes of these 
WTO proceedings. Needless to say, the applicable standard of review requires the Panel to 
determine the EU's compliance with its obligations under the Anti -Dumping Agreement exclusively 
in the light of the published determination and t he reasoning contained therein.  
 
2. INDONESIA'S CLAIM UN DER ARTICLE 2.4 OF T HE ANTI -DUMPING AGREEMENT  
2.1 Introduction  
 
2.1. When calculating the export price for the Indonesian exporter PT Musim Mas, the 
Commission made an adjustment under a provision o f European Union (EU) law that, broadly 
speaking, corresponds to Article 2.4 of the Anti -dumping Agreement. Under Article 2.4, an 
investigating authority is required to ensure a "fair comparison " between the export price and 
normal value. The investigating  authority is entitled - and required - to adjust for any difference 
that "affect[s] price comparability ". Conversely, the investigating authority may not adjust for any 
difference that does not "affect price comparability ". 
 
2.2. The EU erroneously adjust ed for what it termed "Commission ICOFS markup ". This 
deduction allegedly reflected the activities of PT Musim Mas' sales entity, which is located in 
Singapore. The key issue before the Panel is whether, in doing so, the EU correctly adjusted for a 
factor that "affect[ed] price comparability " within the meaning of Article 2.4 and conducted a "fair 
comparison " at the same level of trade.  
 
2.3. In Indonesia's view, the answer to this question is manifestly "no". This is because the 
Commission ignored that any  transfer of funds between PT Musim Mas and the sales entity ICOFS 
are simply transfers within a single economic entity (SEE)/between two closely -related companies; 
because the Commission ignored or distorted relevant record evidence; and because it relied  on 
internally -inconsistent reasoning. Moreover, the Commission treated PT Musim Mas differently 
from the second Indonesian exporter Ecogreen, even though Ecogreen was in an identical situation 
as PT Musim Mas, and differentiated between the two companies on the basis of irrelevant or 
inconsistent criteria. This differential treatment of the two exporters further highlights the 
improper nature of the Commission's deduction when calculating PT Musim Mas' export price, 
highlighting the violation of Article 2. 4. 
 
2.2 The Commission ignored the nature of transactions within a single economic entity  
 
2.4. The Commission made an adjustment on the basis of transactions between PT Musim Mas 
and ICOFS. However, the Commission failed properly to consider whether thes e transactions and 
the conditions in which they occurred "affect[ed] price comparability ". The Commission therefore 
failed to consider whether the adjustment was consistent with the requirement to conduct a "fair 
comparison ", within the meaning of Article 2.4. The existence of a close relationship – or a "single WT/DS442/R/Add.1  
- C-3 - 
 
  economic entity " formed by two or more formally separate entities – falls within the scope of the 
terms "affect price comparability " and "fair comparison ", under Article 2.4.  
 
2.5. The evidence bef ore the Commission clearly indicated, both generally as well as with respect 
to the sales in question, that the producer/exporter and its Singapore sales affiliate were closely 
related or intertwined – put another way, that they were part of an SEE. Theref ore, it was 
improper to make an adjustment to the export price on the basis of transactions between the two 
arms of the same entity that amounted, in fact, to nothing more than moving money from one 
pocket of the same body to another.  
 
2.6. The question o f the relationship between producer/exporter and an affiliated trading 
company has not yet arisen in WTO panel proceedings in the context of an adjustment under 
Article 2.4. However, it has arisen in the context of Article 6.10, where panels have – like th e 
European courts and the Commission itself in the present and other anti -dumping investigations – 
found it convenient to use the phrase "single economic entity " to describe a closely -intertwined 
relationship.  
 
2.7. Moreover, whether one uses the term "single economic entity " or any other label, the 
obligation remains for the investigating authority to examine and to ensure that adjustments – 
including those in the context of related companies – be only made for factors that "affect price 
comparability ". The Commission's own reasoning in its determinations reveals that the Commission 
accepts that the degree and nature of the relationship between two companies can be crucial for 
determining whether a particular item or expense "affect[s] price comparability " and therefore is 
highly relevant for a "fair comparison ", within the meaning of Article 2.4.  
 
2.8. The Commission's reasoning confirms that the Commission accepts – as Indonesia argues in 
this dispute – that payments made between related parties, at least  in some circumstances, do not 
justify an adjustment. To recall, the Commission recognized that Ecogreen paid "commissions " to 
its Singapore trading department EOS. Initially, the Commission determined that these 
commissions "affect[ed] price comparability " and that an adjustment was warranted in order to 
ensure a "fair comparison ". However, subsequently, the Commission reconsidered certain criteria 
concerning the relationship between Ecogreen and EOS and determined that the required "fair 
comparison " required not making the adjustment, because the "commissions " paid by Ecogreen 
did not "affect price comparability ".  
 
2.3 The Commission's adjustment for the activities of PT Musim Mas' selling 
department was improper and resulted in a non -"fair comparison"  
 
2.9. The Commission failed to acknowledge, let alone to properly factor into its reasoning, the 
fact that ICOFS is PT Musim Mas' selling department, and that the two companies are integral 
parts of a single economic entity, characterized by common ownershi p and a common managerial 
and operational control structure. The entire SEE is a [***]  
 
2.10. PT Musim Mas repeatedly reminded the Commission, and supported thr ough record 
evidence, that it does not have a sales department, and that all of its sales – whether export or 
domestic sales – are negotiated, org anized and arranged by ICOFS.  
 
2.11. Given this closely intertwined structure, transfers of financial resources between the 
companies – for instance the "mark-up" or "margin " retained by ICOFS on some expor t sales – are 
not expenses to be adjusted for, but rather the shifting of money from one pocket into another 
pocket of a single economic entity. The "mark-up" or "margin " is simply a way, within an SEE, to 
allocate profit generated by that entity and to en sure adequate financing of the selling department 
located in a different jurisdiction.  
 
2.12. The need to finance the selling department arises also because, as PT Musim Mas repeatedly 
pointed out to the Commission during the investigation, ICOFS does not  receive any funds from PT 
Musim Mas for its involvement in domestic sales as well as for its involvement in the so -called 
"direct " export sales. Moreover, the fact that ICOFS does not receive any remuneration for its 
involvement in those sales further und erscores the closely -integrated nature of the two companies' 
relationship. Of course, an independent trader would never accept to perform sales and trading 
services for free.  
 WT/DS 442/R/Add.1  
- C-4 - 
 
  2.4 The Commission's argument that, prior to the creation of ICOFS, PT Musim Ma s 
used independent traders for its sales precisely serves to highlight the issue at hand and 
demonstrates the exact opposite of the Commission's conclusion  
 
2.13. During the Panel's first meeting with the parties, the EU referred to the fact that the 
preamble to the transfer pricing agreement  between PT Musim Mas and ICOFS states that PT 
Musim Mas previously used an independent trader to make its sales. For the EU, this is a 
confirmation of its position. However, quite to the contrary, this fact clearly il lustrates the issue 
before the Panel and demonstrates why Indonesia's position is correct.  
 
2.14. If PT Musim Mas made its European sales of the investigated product through an 
independent trader in Singapore, it would pay that independent trader a commis sion. This was 
indeed PT Musim Mas' situation several years ago, before the Musim Mas Group chose to create 
ICOFS as its sales and trading office. In an anti -dumping investigation, it would be appropriate to 
deduct that commission from the invoice price in  order to arrive at the net ex factory price to be 
used in the fair comparison under the first, second, and third sentences of Article 2.4. This is 
because the commission represents an expense for which an adjustment may – indeed must – be 
made under Artic le 2.4. Of course, an exporter such as PT Musim Mas may decide to stop using an 
independent trader for these sales, and instead decide to establish its own affiliated sales company 
in Singapore to perform the same functions. PT Musim Mas would do so in ord er to save money 
and to increase its profits on the sales. Doing so will change the way in which PT Musim Mas does 
business; it will change the expenses that the company incurs; and this change in expenses must 
be reflected in the anti -dumping calculations . The Commission's position amounts to a denial of 
this very basic principle.  
 
2.15. For example, assume that an exporter sells to an independent European customer at € 100 
per unit and pays a commission of € 10 per unit on each sale to an independent tra der in 
Singapore. The ex factory price – or, put another way, the net return to the exporter – is € 90 per 
unit. 
 
2.16. The exporter may decide that the independent trader is charging too much as a commission. 
Therefore, the exporter may set up its own tra ding company in Singapore. Assume that the costs 
of maintaining the trading company in Singapore are € 4 per unit. In this case, the exporter can 
maintain its price to the independent customer in Europe, reduce its expenses, and increase its 
profits. The e x factory price or net return to the exporter now is €100 - € 4 = € 96 per unit. Profit 
has increased by € 6 per unit.  
 
2.17. For the purposes of a dumping analysis, two things have changed. First, the nature of the 
expense has changed: it is now a selling expense , not a commission . Second, the amount of the 
expense has changed: it is now € 4 per unit, not € 10. These changes can be illustrated in the 
following table:  
 
  Sales Through Independent 
Trader  Sales Through Affiliated 
Trading Company  
Invoice P rice  € 100  € 100  
Commission  € 10  € 0  
Selling Expenses  € 0  € 4  
Ex Factory Price  € 90  € 96  
 
2.18. The EU's position before the Panel is that these changes do not affect the dumping analysis. 
In other words, for the EU, the ex factory price in the second scenario is not € 96, but € 90, just 
like in the first scenario. Even though the exporter has changed how it does business – resulting in 
a change in both the type and amoun t of expenses it incurs, as well as in the net revenue it 
receives – the EU contends that it is entitled to disregard these changes and to conduct the same 
dumping analysis as if the exporter was still selling through an independent trader.  
 
2.19. Indonesia disagrees. Indonesia does not consider that the EU can correctly calc ulate the 
ex factory price and make a fair comparison between export price and normal value within the 
meaning of Article 2.4 where it ignores the actual facts. The EU cannot ignore how the exporter 
structures its business, the expenses it actually incurs in making the investigated sales, and the 
net revenue it receives. It cannot instead replace those amounts with imputed expenses that may 
have been incurred based on a notionally -different means whereby the exporter could have 
structured, or used to struct ure, its sales.  WT/DS442/R/Add.1  
- C-5 - 
 
  2.5 The Commission's adjustment for "profit" and for indirect selling expenses was 
improper and resulted in a non -"fair comparison"  
 
2.20. Above and beyond the fundamentally improper nature of the Commission's deduction, the 
very items (a nd the labels applied to these items) deducted by the Commission demonstrate that 
this adjustment violates Article 2.4.  
 
2.21. To recall, the Commission's deduction consists of two elements: "profit " and "indirect selling 
expenses ". Both items are imprope r elements to be deducted in determining the ex factory price 
(whether on the export or normal value side).  
 
2.22. First, profit  is not an item to be adjusted for. It is not customary for investigating authorities 
to deduct "profit " when determining the ex  factory price, whether on the normal value or on the 
export side. This is because dumping is international price discrimination, and "price" includes 
profit. Indeed, the conventional theory is that dumping is "unfair ", because the exporter is using 
"high profits " from the domestic market to finance "low profits " (or losses) in the export market. 
Profit is also not deducted because, after deducting profits, only costs would remain. However, 
costs should be the same no matter where the product is subsequentl y sold.  
 
2.23. Hence, the items to be adjusted for under Article 2.4 are expenses. However, "profit " is not 
an expense; "profit " is a residual amount, after all costs and expenses have been deducted from 
the price.  
 
2.24. Further proof that profits are no t to be deducted is the fact that a constructed normal value 
includes an amount for profit, as per Articles 2.2 and 2.2.2 of the Anti -dumping Agreement. (The 
only exception to the rule that profits are not to be deducted is in the context of a constructed 
export price, which was a controversial topic in the Uruguay Round and is not at issue in this 
dispute).  
 
2.25. Second, the Commission deducted ICOFS' indirect selling expenses . Indirect selling 
expenses (items such as sales department staff salaries, adve rtising, office expenses of sales 
departments, etc.), as opposed to direct  selling expenses (such as freight, insurance, etc.), are 
normally not deducted when determining the ex factory price. This is also supported by the fact 
that, in the construction of  normal value, indirect selling expenses are included. In the case at 
hand, however, the Commission – without any explanation – deducted ICOFS' indirect selling 
expenses when calculating the ex factory export price. However, the Commission proceeded 
entire ly differently when calculating normal value. It did not deduct any indirect selling expenses 
when determining the ex factory normal value; and, correspondingly, it included indirect selling 
expenses when constructing normal value for certain product model s. Hence, the Commission 
deducted items on the export price side that it did not deduct on the normal value side. This 
asymmetry further vitiates the Commission's comparison, renders it unfair, and contributes to the 
violation of Article 2.4.  
 
2.6 The cri teria relied on by the Commission for justifying the adjustment are 
irrelevant, factually incorrect or involve ignoring or distorting record evidence  
 
2.26. In the Amending Regulation, in which it justified its differential treatment of PT Musim Mas 
from that of Ecogreen, the Commission highlighted certain criteria as supporting its determination. 
In Indonesia's view, none of these criteria has any relevance in determining whether the 
involvement of ICOFS "affect[s] price comparability ". Moreover, in its t reatment of these criteria, 
the Commission repeatedly ignored or distorted record evidence.  
 WT/DS 442/R/Add.1  
- C-6 - 
 
  2.6.2  The Commission improperly relied on "direct" export sales  
 
2.27. The Commission relied on the fact that PT Musim Mas, rather than ICOFS, featured as the 
official selling party on a certain proportion of export sales (the so -called "direct " export sales). 
This, in the Commission's view, meant that certain export sales were "performed " by PT 
Musim  Mas "from Indonesia "1 and that PT Musim Mas was not "using " its sales department in 
Singapore for these export sales.2 
 
2.28. This characterization is demonstrably incorrect and highly misleading. PT Musim Mas 
explained repeatedly during the investigation, and supported by evidence, that, with respect to 
these "direct " export sales, ICOFS handles all contact with the client, as well as negotiates and 
arranges the sale, just as it does for all other export sales. However, in certain instances, the 
client (typically Asia -based clients) prefer for PT Musim Mas to feature on the contract as the 
formal selling party, in order for the client to obtain an Indonesian certificate of origin. In order to 
accommodate this client preference, as the final step in the standard formal sales process, ICOFS 
sends PT Musim Mas a [***] . (No client ever contacts PT Musim Mas directly). Subsequently, PT 
Musim Mas ships the products, as it does for all othe r export sales.  
 
2.29. Hence, all (export) sales are negotiated and arranged by ICOFS; and all (export) sales are 
physically "performed " (shipped) out of Indonesia. It therefore amounts to a distortion of the 
record evidence when the Commission found that the "direct " export sales are somehow different 
due to being "performed " out of Indonesia. Moreover, Indonesia fails to unders tand why the mere 
formality of PT Musim Mas appearing on the contract, rather than ICOFS (a difference driven 
entirely by client preferences), should be one of the decisive criteria for considering that PT 
Musim  Mas and ICOFS operate at arm's length and are fundamental ly different from Ecogreen 
(which also has "direct " export sales, for th e same reason as PT Musim Mas).  If anything, the 
flexibility of adapting one formal aspect of the sale depending on what the client communicates to 
ICOFS is further evidence of the tig htly knit relationship and cooperation between the two 
companies.  
 
2.30. In any event, and leaving aside all of the above, the Commission failed to explain the 
significance of the "direct " export sales for the key issue at hand; namely, why, with respect to the 
sales under investigation, the involving of ICOFS and any transfer of funds from PT Musim Mas to 
ICOFS should be regarded as a sales expense that affects price comparability.  
 
2.6.3 The Commission improperly relied on ICOFS' other trading activitie s  
 
2.31. As another criterion for distinguishing PT Musim Mas from Ecogreen, the Commission stated 
in the December 2012 Amending Regulation that, because "the trader's overall activities [are] 
based to a significant extent on supplies originating from unr elated companies ", the "trader's 
functions are therefore similar to those of an agent working on a commission basis. "3 
 
2.32. Indonesia fails to see the relevance of the activities of the trader's office that involve 
products outside of the scope of invest igation. The Commission's task was to decide whether, with 
respect to the sales under investigation, the allocation of funds between PT Musim Mas and ICOFS 
is an expense that affects price comparability. For Indonesia, it is clear that transactions between  
ICOFS and unrelated third parties, of products outside the scope of investigation, have nothing to 
do with the transactions between PT Musim Mas and ICOFS.  
 
2.33. To the extent that these third party sales can shed any useful light on the question before  
the Commission, they would have to relate to the overall relationship between ICOFS and PT 
Musim Mas, for instance, regarding corporate control, management and operational decision -
making such as pricing decisions. However, the Commission made no attempt to examine such 
circumstances and merely looked at the quantities of these sales (which, in any event, it did not 
disclose or otherwise discuss).  
 
2.34. By way of example, had the Commission examined these "third party " purchases and sales 
in more detail,  it could have found that these sales are oftentimes an integral part of how PT 
                                               
1 Amending Regulation, para. 27. Exhibit IDN -5. 
2 EU's First Written Submission, para. 98.  
3 Amending Regulation, para. 29. Exhibit IDN -5. WT/DS442/R/Add.1  
- C-7 - 
 
  Musim Mas interacts with ICOFS and how ICOFS closely coordinates such purchases and sales with 
PT Musim Mas. Specifically, for a number of products (although not including the  product under 
investigation), ICOFS may sometimes purchase from third parties in order to sell to clients that 
normally purchased PT Musim Mas -produced products. This will occur when, on any given 
occasions,  [***]  Had the Commission properly investigated t he issue, it would have been 
informed about these matters.  
 
2.6.4 The Commission improperly considered that the existence of a sales and 
purchasing agreement as well as certain clauses of that agreement support the 
contested deduction  
 
2.35. As the third criterion, the Commission relied on the fact that a sales and purchase 
agreement ( "S&P Agreement " or "transfer pricing agreement ") existed between PT Musim Mas and 
ICOFS. It also relied on unspecified elements of the content of this agreement, in rejecting  PT 
Musim Mas' explanation that this contract was a "master agreement to regulate transfer prices 
between [the] related parties ".4 
 
2.36. The contract governs sales from PT Musim Mas and ICOFS. It was concluded in order to 
demonstrate to both Singaporean a nd Indonesian tax authorities arm's length pricing prac tices 
applied by the companies.  Such transfer pricing agreements (or intercompany agreements) are a 
daily occurrence in business practices. In its Answers to the Panel's first set of questions, 
Indones ia presented several exhibits to support this point, including general advice to private 
companies from a reputed law firm about intercompany/transfer pricing agreements and how to 
conclude them; as well as two templates for intercompany/transfer pricing a greements that 
contain clauses identical or very similar to those of the S&P Agreement between PT Musim Mas and 
ICOFS.  
 
2.37. It is nonsensical to argue that two related companies become arm's length companies 
because they conclude an intercompany agreeme nt that looks like, or seeks to imitate, an 
agreement between unrelated companies. As demonstrated by Indonesia's evidence above, it is 
the very purpose of intercompany agreements to structure commercial interaction in a manner 
that reflects practices betw een unrelated  companies.  
 
2.38. The Commission also relied in its determinations on certain aspects of the S&P Agreement. 
For instance, it relied on the fact that the trading office "was involved in a range of different palm 
oil-based products".5 Indonesi a does not understand what relevance this criterion has for the issue 
at hand and why the Commission thinks this point proves anything. The Commission also claimed  
that ICOFS bought products from PT Musim Mas under "one single contract without distinguishi ng 
among products ".6 This statement is factually incorrect, because the transfer pricing agreement 
does differentiate between products. Moreover, even if true, lack of, or limited, differentiation 
would suggest – if anything – that the two companies do not  deal at arm's length.   
 
2.39. The Commission left unanswered – as does the EU in these proceedings – the simple fact 
that this type of transfer pricing agreement/intercompany agreement reflects international practice 
and is recommended by international tr ansfer pricing guidelines, including those issued by the 
OECD and the United Nations. Such recommendations also exist in transfer pricing guidelines at 
the national level in numerous jurisdictions, including in the EU's own legal order.  
 
2.40. During the panel proceedings, the EU has also provided certain ex post rationalisations 
concerning other specific clauses of that agreement, not mentioned in the Commission's 
determinations. Besides being procedurally inadmissible, the EU's reliance on these elements  is 
also misplaced as a matter of substance. For instance, the allocation of risk between PT Musim Mas 
and ICOFS is customary for this kind of agreement. PT Musim Mas even highlighted this risk 
allocation, on its own initiative, to the Commission during th e investigation, to argue that – 
contrary to the Commission's view – this risk allocation demonstrated that ICOFS did not act as an 
"agent working on a commission basis ", as stated by the Commission. During the investigation, 
the Commission ignored these a rguments. Now, in the WTO proceedings, the Commission 
impermissibly relies on them to argue the opposite . Besides being incorrect on substance, this is 
procedurally unfair and arbitrary.  
                                               
4 Amending Regulation, para. 30. Exhibit IDN -5. 
5 Amending Regulation, para. 28. Exhibit IDN -5. 
6 Amending Regulation, para. 29. Exhibit IDN -5. WT/DS 442/R/Add.1  
- C-8 - 
 
  2.41. As another example, the Commission's reliance on the clauses co ncerning the manner of 
communication between the contracting parties and the clause concerning dispute resolution 
makes no sense. These clauses are entirely consistent with how related parties structure 
intercompany/transfer pricing agreements. Indonesia h as submitted evidence to this effect.7 
 
2.7 The Commission ignored or distorted further evide nce that suggests that PT 
Musim  Mas and ICOFS are closely intertwined and closely cooperate, including on the 
sales at issue  
 
2.42. Although it purported to analy se the relationship and the mutual "functions " of PT 
Musim  Mas and ICOFS, the Commission ignored relevant evidence of how closely the two 
companies are related and operate. For instance, as part of its Questionnaire Response, PT 
Musim  Mas submitted highly confidential cost data pertaining to ICOFS. Needless to say, a 
producer would never have access to such confidential data of an independent trader. The tight 
relationship between PT Musim  Mas and ICOFS is even implied in how the Commission initially 
treate d the two companies. Indeed, in a pre -verification visit letter addressed to PT Musim Mas' 
lawyers, the Commission referred to ICOFS as "the company's premises in Singapore ([ICOF -S])".8 
 
2.43. Furthermore, ICOFS staff assisted PT Musim Mas throughout the anti-dumping investigation. 
During verification, ICOFS staff was present at the PT Musim Mas' verification and answered 
questions on PT Musim Mas domestic sales and on technical issues concerning PT Musim  Mas' plant 
in Indonesia.    
 
2.44. Finally, ICOFS is  involved in PT Musim Mas' domestic sales in the same manner as it is 
involved in export sales (the only exception being that it is formally PT Musim Mas that signs all 
domestic sales agreements). However, ICOFS does not [***]  for its involvement on domest ic 
sales. The Commission did not contest this evidence during the investigation. The involvement of 
ICOFS [***]  in the domestic sales process (as well as its involvement [***]  in certain export 
sales) demonstrates that the two companies do not deal with ea ch other at arm's length.  
 
2.8 The Commission's proffered logic for the adjustment is internally inconsistent  
 
2.45. The lack of principled reasoning underpinning the contested adjustment is also discernible 
from how the EU explained its logic during the  first panel hearing: According to the Commission, 
PT Musim Mas pays a "commission " to ICOFS on export sales, but not on domestic sales. 
Consequently, the EU explained, the Commission made the adjustment for ICOFS' "commission " 
on export sales, but not on domestic sales. However, because the two companies are related, the 
Commission did not use the amount/percentages actually paid by PT Musim Mas to ICOFS, but 
rather changed the amounts to be deducted. The EU cannot contest that ICOFS negotiated and 
arrange d PT Musim Mas' domestic sales in the same manner as it negotiated and arranged PT 
Musim Mas' export sales. However, the EU argues, ICOFS did not [***]  on the domestic  sales, no 
money changed hands  and therefore no adjustment was warranted.  
 
2.46. However , inconsistently with the above explanation, the EU made the adjustment on all 
export sales, including the "direct e xport sales", even though [***]  Thus, the Commission 
violated its own approach and its own logic. To be consistent with its own logic, the C ommission 
should have made the adjustment only for those export sales in which ICOFS  featured as the 
formal contracting party and on which ICOFS retained a mark -up, and it should not have made the 
adjustment for the "direct " export sales.  
 
2.47. In additio n to highlighting the internally inconsistent approach of the EU, the fact that ICOFS 
did not [***]  on the "direct " export sales further demonstrates the non -arm's length nature of the 
dealings between the companies. It bears repeating that ICOFS negotiate s and arranges all export 
and all domestic sales. However, ICOFS receives [***]  Clearly, an independent trader would 
never do so.  
 
                                               
7 See Indonesia's exhibits IDN -52, IDN -53, and IDN -54. 
8 Letter  from the European Commission to PT Musim Mas, 5 November 2010, p. 1. Exhibit IDN -41. WT/DS442/R/Add.1  
- C-9 - 
 
  2.9 The EU's incorrectly argues that the Panel should reject Indonesia's arguments in 
case it disagrees with the label "singl e economic entity"  
 
2.48. As part of its legal argument, the EU has stated that, if the Panel does not consider the 
"single economic entity " or "closely related parties " terminology or criteria for addressing this issue 
to be the optimum, the Panel should  reject Indonesia's claim. According to the EU, if Indonesia has 
not guessed precisely how the Panel would interpret and articulate the meaning of the Article 2.4, 
including the phrase "to affect price comparability ", in the context of transactions between  related 
parties, Indonesia's claim should be rejected.  
 
2.49. This, of course, is incorrect. Indonesia's claim is that the EU has violated Article 2.4 because 
it has made an adjustment for something that does not "affect price comparability " within the 
meaning of Article 2.4, thereby failing to conduct a "fair comparison " under that provision. 
Indonesia's argument as to why the transactions, or the transfers between PT Musim Mas and 
ICOFS, do not affect price comparability is expressed through the term "single economic entity " or  
"closely related parties " test. However, even if the Panel does not wish to rely on the "single 
economic entity " or "closely related parties " language or test proposed by Indonesia, the Panel has 
to provide what it considers to be  the correct interpretation of, or the correct legal standard under, 
the phrase "to affect price comparability " in the context of transactions between closely related 
parties under Article 2.4. The Panel must then apply that legal standard to the facts bef ore it. 
Indonesia's claim would not fail simply because the Panel might articulate the relevant legal 
standard in different words or using different concepts than the complainant.  
 
2.50. This is because no party bears the burden of providing the correct le gal interpretation to a 
WTO dispute settlement body. This principle – also known as "iura novit curia " – has been affirmed 
by the Appellate Body in several decisions, including in EC – Tariff Preferences,9 EC - Hormones10 
and EC – Export Subsidies on Sugar.11 
 
2.51. Therefore, in summary, it is for the Panel in this dispute to decide what the phrase "to affect 
price comparability " means in the context of transfers of funds between closely related parties and 
non-arm's length transactions. Should the Panel con sider pertinent Indonesia's proposed legal 
standard of "single economic entity " or "close relationship ", the Panel can rely on this standard. 
Should the Panel disagree with this articulation of the legal standard, the Panel is bound by 
Article  11 of the DS U to enunciate its own version and to apply it to the facts before it.  
 
2.10 The Commission's differential treatment of PT Musim Mas and Ecogreen further 
highlights the unjustified character of the Commission's adjustment  
 
2.52. Another arbitrary aspect o f the Commission's adjustment for PT Musim Mas is the different 
treatment of that company from the treatment of the second Indonesian exporter, Ecogreen. 
Specifically, the Commission relied on the existence of direct export sales; the existence of the 
written S&P Agreement; as well as the type and extent of other activities of the sales department 
to justify the differential treatment between PT Musim Mas and Ecogreen. This reasoning is flawed 
and further demonstrates the arbitrary nature of the Commission' s determination.  
 
2.53. Indonesia submits that the Panel should bear in mind that the Commission initially 
determined that the companies should be treated the same, because they were in an identical 
position. Subsequently, the Commission turned around and  determined the exact opposite, 
arguing that the two companies were situated so fundamentally differently as to warrant an 
entirely different treatment. Indonesia acknowledges that an investigating authority enjoys a 
degree of discretion in its assessment of the facts. However, the required "reasoned and adequate 
explanation" is seriously undermined where the investigating authority, within a span of a few 
months, goes from emphasizing the commonality between two companies for purposes of an 
adjustment to a rguing that these companies are so fundamentally differently situated that they 
should be treated in diametrically opposite fashion. Where the investigating authority has itself, 
merely a few months earlier, espoused an entirely different explanation and i nterpretation of the 
same record evidence, it is particularly important to explain, in compelling terms, the plausibility of 
its now diametrically opposed conclusions.  
 
                                               
9 Appellate Body Report, EC – Tariff Preferences , footnote 220 to para. 105.  
10 Appellate Body Report, EC – Tariff Preferences , footnote 220 to para. 105.  
11 Panel Report, EC – Export Subsidies on Sugar , para .7.121.  WT/DS 442/R/Add.1  
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  2.54. In any event, the Commission's reasoning in the Amending Regulation is flawed. With 
respect to "direct" export sales , the Commission initially relied on the fact that both companies had 
"direct " export sales; and that for both companies  these "direct " export sales " were "structural " 
and "permanent ".12 The Commission subsequently treats the initial criterion as irrelevant and 
decides that what matters is the quantity of these sales. This shift in reasoning is not explained.  
 
2.55. In any event, the Commission has failed to provide any further context or description of the 
circumstances o f these sales and what light these sales, or their respective quantities, might shed 
on question why amounts of money shifted between Ecogreen and EOS should not  be considered 
an expense; and the amounts shifted between PT Musim Mas and ICOFS should  be con sidered an 
expense.  
 
2.56. With respect to the written S&P Agreement , the Commission fails to explain why the 
existence of such a written master transfer pricing agreement between PT Musim Mas and ICOFS 
should place PT Musim Mas in such a different positio n from Ecogreen. It stands to reason that, 
even in the absence of a written master agreement, some form of agreement and agreed -upon 
terms of sale – perhaps transaction -specific contracts or discernible from invoices – must have 
existed between Ecogreen an d its trading department EOS. After all, the Commission found that 
Ecogreen also paid "commissions " to EOS. However, the Commission has made no reference to, 
nor has it analysed, any evidence submitted by Ecogreen on this point. Such evidence must, 
neverth eless, be part of the record, given that it would have been part of Ecogreen's response to 
its Questionnaire.  
 
2.57. Moreover, Indonesia has presented evidence that demonstrates that some related 
companies choose to conclude intercompany/transfer -pricing a greements in order to facilitate their 
interaction with tax authorities, whereas other related companies choose not to do so. This type of 
choice, however, cannot influence the analysis of an anti -dumping investigating authority as to 
whether an adjustment  between two related companies is warranted. In addition, unrelated 
companies may choose to use or not to use written agreements similar to the S&P Agreement. 
Contrary to the EU's assumption, how parties choose to memorialize  their relationship is not as 
important as the substance or nature  of that relationship.  
 
2.58. Furthermore, the Commission's reliance on individual clauses of the written agreement is 
also misplaced. For instance, the Commission's reliance on the risk allocation between PT 
Musim  Mas a nd ICOFS suggests that Ecogreen and ICOFS did not allocate risk between themselves 
or allocated that risk differently. However, the Commission has not pointed to any evidence 
whatsoever to substantiate this implied assertion. However, relevant information must be 
contained in the investigation record, in particular, in Ecogreen's Questionnaire Response.  
 
2.59. With respect to other activities of the selling office, the Commission confirmed in the 
Definitive Regulation that EOS traded products from companie s other than Ecogreen. Hence, the 
only difference appears to be the extent of such third -party sales. As noted above, the Commission 
has not explained why the extent of such sales should have any bearing on the determination 
whether, with respect to the in vestigated sales, PT Musim Mas and ICOFS should be considered as 
an SEE or closely related.  
 
2.11 The Commission also acted inconsistently with Article 2.3  
 
2.60. The EU also violated Article 2.3 of the Anti -Dumping Agreement, because the dumping 
margins  for several sales were calculated using the constructed export price methodology of 
Article  2.3 and the third and fourth sentences of Article 2.4. Given this tight nexus between the 
two provisions, and the overarching role of Article 2.3 for the construct ion of the export price, an 
adjustment with respect to a constructed export price that violates Article 2.4 may also be said to 
mean that the constructed export price under Article 2.3 was also calculated improperly.  
 
3. INDONESIA'S CLAIMS U NDER ARTICLES 3.5 AND 3.1 OF THE A NTI-DUMPING 
AGREEMENT  
3.1. The EU's determination is inconsistent with Articles 3.5 and 3.1 of the Anti -Dumping 
Agreement, because the EU Commission failed to conduct a proper non -attribution analysis for two 
                                               
12 Definitive Determination, para. 33. Exhibit IDN -4.  WT/DS442/R/Add.1  
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  "known factors". These two factors are (i) the "economic/financial crisis of 2008/2009", and (ii) 
"the effects of the difficulties faced by the EU domestic industry with access to raw materials and 
of the fluctuations in the prices of these raw materials".  
 
3.2 The Commission faile d to conduct a proper non -attribution analysis of the factor 
"financial crisis"  
 
3.2. It is undisputed – and the EU accepts in these proceedings – that the financial crisis was a 
"known factor" other than dumped imports, in that it caused injury to the EU industry at the same 
time as the dumped imports. Nevertheless, the Commission's analysis of this factor is entirely 
inadequate and flawed for the following reasons.  
 
3.3. First, the Commission's finding of causation is premised on the unexplained assumpti on 
that 2009 was the year in which the financial crisis started or the year in which its effects could 
first be felt. This is explicit in the Commission's reference to the year 2008 as "the year before the 
financial crisis" in paragraph 96 of its Definitiv e Regulation. The Commission thus relied on 2008 
as a baseline period (counterfactual) during which the EU industry was unaffected by the financial 
crisis and during which injury reflected the effects of dumped imports only.  
 
3.4. However, the assumption that the Union industry in 2008 was unaffected by the financial 
crisis, and that the financial crisis started only the following year, is contradicted by evidence in 
the record as well as by commonly known facts of which judicial notice can be taken. At th e very 
least, the Commission should have provided a reasoned and adequate explanation for its view that 
the year 2008 could serve as evidence of a year in which dumped imports were the only injurious 
factor. However, it failed to do so.  
 
3.5. The EU relies  on various unrelated statements in the Commission's Provisional Regulation. It 
argues that the Commission did not find that the financial crisis began in 2009, but rather 
acknowledged that the crisis began showing some effects already in 2008. This argume nt, 
however, contradicts the explicit words of the Commission in paragraph 96 of the Definitive 
Regulation – the same factor cannot begin both in 2008 and also in 2009. Moreover, the passages 
from the Provisional Regulation to which the European Union refe rs paint a confusing picture. 
Some suggest that the crisis started in 2008; others imply that the crisis started in 2009; in its 
first written submission, the European Union seems to adopt an intermediary position, suggesting 
that the crisis existed in som e fashion, but was not "clearly felt in 2008". All of these explanations 
are ex post rationalisations that may not be taken into account by the Panel. Moreover, the EU 
draws on the statements that, by their very nature, do not address the issue of causatio n/non -
attribution, but instead deal with a description of injury indicators. An investigating authority does 
not satisfy the requirements of Articles 3.1 and 3.5 when its explanation is poorly structured, 
incoherent, illogical, and requires interested part ies to piece together various disjointed statements 
scattered across the record.  
 
3.6. Second, the Commission failed to "separate" and "distinguish" the injurious effects of the 
factor financial crisis from those of dumped imports. It may be recalled that the non -attribution 
analysis requires the investigating authority to examine the nature and the extent of the injurious 
effects of other factors.13 The Commission accepted that the crisis affected the Union industry 
through the same channels  as did the (all egedly) dumped imports, namely by reducing the 
demand for the Union industry's product and lowering sales prices. In other words, the 
Commission found that the nature  of the effects of the financial crisis was the same as that of 
dumped imports. Thus, with out knowing the extent  to which the financial crisis affected the Union 
industry, the Commission was unable to distinguish between the injurious effects of dumped 
imports and the financial crisis, respectively, and therefore could not make its causation an d non -
attribution finding in a manner consistent with Article 3.5.  
 
3.7. Third, the Commission failed to address the parties' arguments and record evidence that 
contradicted its conclusion. For example, the Commission failed to address Musim Mas' explanat ion 
that, in late 2009 and early 2010, imports from the countries concerned increased, but, at the 
same time, the profit of some EU companies as a whole and for the care chemicals segment in 
particular improved considerably. This casts in serious doubt the  Commission's narrative that 
dumped imports, and their increased amounts, were responsible for the domestic industry's injury. 
                                               
13 Panel Report, EC – Countervailing Measures on DRAM Chips , para. 7.405.  WT/DS 442/R/Add.1  
- C-12 - 
 
  In light of this argument, an entirely plausible (if not compelling) interpretation of the record 
evidence is that the injury to the domestic industry in 2008 was caused by the financial crisis, 
rather than dumped imports. The applicable standard of review requires an investigating authority 
to address alternative explanations of record evidence. Nevertheless, the Commission left th is 
argument unaddressed.  
 
3.8. Fourth, in its first written submission, the EU invoked the "correlation/coincidence" approach 
approved by the Appellate Body in Argentina – Footwear (EC) . However, both the panel and the 
Appellate Body in that dispute – just as the case law ever since then – treated "correlation/ 
coincidence" and "non -attribution" as separate elements of the causation analysis. In any event, 
the European Union's argument constitutes ex post rationalization, which should be rejected.  
 
3.9. Finally, the Commission's conclusion with respect to the financial crisis, in paragraph 109 of 
the Provisional Regulation, is that the economic crisis "does not break the causal link established in 
relation to the low -priced dumped imports from the countrie s concerned". Indonesia submits that 
this "breaking the causal link" analytical framework and language is inappropriate to satisfy the 
non-attribution requirement. It is not methodologically possible to first establish a causal link for  
dumped imports and  only then enquire about the injurious effects of other factors, by determining 
whether these factors "break " an already established causal link. This amounts to putting the cart 
before the horse. An investigating authority cannot determine a causal link b etween injury and 
dumped imports without looking at the effects of other injurious factors. Rather, an initial 
determination of the effects of other injurious factors is the logical basis for a determination 
whether the link between dumped imports and inju ry satisfies the standard for "causal link " of 
Article 3.5; it is also the logical prerequisite for ensuring that the effect of other factors is not 
improperly attributed to the dumped imports.  
 
3.3 The Commission failed to conduct a proper non -attributio n analysis of the factor 
"raw materials"  
 
3.10. The Commission failed to conduct any analysis for the factor "raw materials ". At the very 
outset of the investigation, interested parties provided argument and evidence that the domestic 
industry experienced  injury due to insufficient access to raw materials and fluctuations in raw 
material prices. PT Musim Mas provided extensive explanations that the EU industry faces a 
structural disadvantage vis -à-vis Indonesian exporters, because Indonesian exporters have  their 
own sources of raw materials. The EU domestic industry is, therefore, exposed to greater potential 
price fluctuations for these raw materials. This risk of price fluctuations materialized in particular 
during the financial crisis, starting in mid -2008; during this period, the price of the raw material 
decreased by over 60 per cent just between July and December 2008. The significantly longer 
lead-times for the EU industry, and the resulting greater exposure to price fluctuations, can leave 
the EU ind ustry severely limited in its ability to compete with foreign producers.  
 
3.11. In support, PT Musim Mas relied on raw material pricing data, as well as on other documents 
and record evidence submitted to the Commission. The accuracy of the price data was  not 
disputed, nor was the fact that the raw materials account for "a substantial part of the overall 
production costs" in the fatty alcohols production process. It was similarly demonstrated, 
undisputed and verified that some EU companies depend on the su pplies of raw materials by their 
Indonesian competitors, and that the long duration of raw material shipments from 
Indonesia/Malaysia to the EU exposes the industry to price fluctuations.  
 
3.12. The Commission rejected PT Musim Mas' extensive explanation and evidence on the grounds 
that it was allegedly unsubstantiated. This was the entirety of the Commission's explanation for its 
decision in paragraph 98 of the Definitive Regulation. This one -sentence finding is entirely 
inadequate and is inconsistent wit h the requirements of Articles 3.5 and 3.1. The extent of PT 
Musim Mas' arguments and evidence required the Commission to investigate whether the alleged 
factor was indeed an injurious factor for which a non -attribution analysis should have been 
performed.  
 
3.13. To the extent that, notwithstanding the amount of argument and evidence placed before it, 
the Commission considered that it required further evidence, it was incumbent on it to gather such 
evidence. As an investigating authority, in these circumsta nces, the Commission was not permitted 
to remain passive, but rather had an active duty to investigate.  
 WT/DS442/R/Add.1  
- C-13 - 
 
  3.14. Indonesia also emphasizes that the violation of Article 3.5 does not reside in the 
Commission's failure to find that this factor was causing inj ury at the same time as dumped 
imports. Rather, the violation of Article 3.5 arises from the Commission's refusal to engage in any 
analysis at all.  
 
3.15. The EU's defense in these proceedings is that the factor "raw materials " is part of the 
"conditions of competition ", and was subsumed in the factor "economic crisis ". This is in manifest 
contradiction to the Commission's determination. Both interested parties and the Commission 
treated the factor "economic crisis " as a separate factor, acknowledged its i njurious effects and 
analysed (albeit inadequately) it. In contrast, the factor "raw materials " is treated in subsequent 
paragraphs of the determination; and the Commission stated explicitly that, with respect to this 
particular factor, the interested part ies had failed to "substantiate " their assertions. Hence, the 
EU's defense is not only an ex post rationalisation, but is in direct contradiction to the content and 
structure of the Commission's determinations.  
 
4. THE EU VIOLATED ARTI CLE 6.7 BECAUSE IT F AILED TO REVEAL TO TH E 
INTERESTED PARTIES T HE RESULTS OF THE VE RIFICATION VISIT  
4.1. Indonesia's final claim is that the EU violated Article 6.7, because it failed to disclose the 
results of the verification visit, as required by this provision.  
 
4.2. Article 6.7 requires the investigating authority to disclose the results of the verification 
either in a separate report or as part of its disclosure of the essential facts under Article 6.9 of the 
Anti-Dumping Agreement. In this case, however, contrary to Art icle 6.7, the EU did not disclose 
any meaningful information about the results of the verification visits to the premises of the 
Indonesian exporters and their affiliates.  
 
4.3. It is undisputed that the Commissio0n did not issue a separate disclosure docu ment. 
Instead, in the Provisional and Definitive Disclosures issued pursuant to Article 6.9, the 
Commission in essence only stated that verification had taken place and that unspecified 
information had been verified, unspecified errors had been corrected a nd additional unspecified 
information had been collected.  
 
4.4. This is insufficient to comply with the requirements of Article 6.7. Article 6.7 requires the 
investigating authority to disclose the "results" of the verification visits, by means of one or o ther 
of two different avenues: the investigating authority may either (i) "make available" a separate 
report containing the results of the verification visits, or (ii) "provide disclosure" of the results as 
part of the disclosure of the essential facts und er Article 6.9. Regardless of which avenue is 
chosen, the investigating authority must disclose the same thing – the "results" of the verification 
visit. 
 
4.5. The "result" referred to in Article 6.7 is the "effect" or "outcome" of the verification visit. As 
with the "result " of any activity, the "result" of a verification visit is closely linked to the conduct, 
content and purpose  of that verification visit. Indeed, the Appellate Body in US – Steel Safeguards 
stated  that the term "result" is to be read as "an effect, issue, or outcome from some action, 
process or design".14 Annex I(7) of the Anti -Dumping Agreement defines the purpose of a 
verification visit as to "verify the information provided or to obtain further details". The purpose, 
conduct, and conten t of a verification visit is thus to verify the information provided by the 
investigated firms in their questionnaire responses and to enable the investigating authority to 
obtain, and the investigated exporter to provide, additional information or explana tions regarding 
the exporter's submitted questionnaire responses.  
 
4.6. In the normal course of events, during a verification visit, an investigating authority will 
request the investigated company to provide access to its accounting system and other recor ds, 
including all of the worksheets and source documents used to prepare the questionnaire 
responses. During the verification visits, the investigating authority normally reviews these 
documents and cross -checks them against the data provided in the questi onnaire responses. The 
investigating authority also uses the opportunity to clarify any areas of doubt regarding the 
contents of the questionnaire responses. As part of this process, the investigating authority may, 
                                               
14 Appellate Body Report, US – Steel Safeguards , para. 315. (original emphasis).  WT/DS 442/R/Add.1  
- C-14 - 
 
  for instance, request access to an entir e category of documents or data or focus on certain specific 
documents.  
 
4.7. Normally, therefore, a verification visit involves a quasi -audit of all information relevant to 
the company's operations with respect to the investigated product as explained in its questionnaire 
responses. There may be several "results" of the verification, for instance, the investigating 
authority will have collected additional documents , worksheets, copies of invoices, financial 
statements, etc. A proper listing/description of these documents and their contents, therefore, 
forms part of the "results" of the verification. The investigating authority may also have satisfied 
itself as to the accuracy of certain facts and figures contained in the exporter's questionnaire 
responses. The questions posed and answers received  by which the investigating authority 
satisfied itself of this accuracy forms part, therefore, of the results of the verification. The 
investigating authority may have received corrections or additional explanations  regarding matters 
in the exporter's questionnaire responses. These corrections or explanations are part of the 
"results" of the investigation. Next, the investigating authority may discover errors in the 
questionnaire responses . The ability or inability to  correct these errors is also part of the "results " 
of the investigation. The "results " also include any reasons why a particular piece of information 
was not verified , including, for instance, because the exporter refused to provide the required 
informati on and did not provide access to the relevant documents.  
 
4.8. This is precisely the conclusion reached by the panel in Korea – Certain Paper , which stated 
that "results" of verifications include "adequate information regarding all aspects of the 
verifica tion, including a description of the information which was not verified  as well as of 
information which was verified successfully ".15 
 
4.9. It is also important to keep in mind the due process -purpose of the disclosure requirement 
under Article 6.7. As note d by the panel in Korea – Certain Paper :  
 
The purpose of the disclosure requirement under Article 6.7 is to make sure that 
exporters, and to a certain extent other interested parties, are informed of the 
verification results and can therefore structure th eir cases for the rest of the 
investigation in light of those results .16 
 
4.10. In other words, the purpose of Article 6.7 is, inter alia, to enable exporters to safeguard 
their rights in an anti -dumping investigation and "structure their cases for the rest  of the 
investigation in light of those results".17 For this purpose, exporters must know what information 
was not  verified – so that they can make further efforts to put the investigating authority in a 
position to ultimately verify that information – as well as what information was verified, since 
verified information must in principle be used by the investigating authority and the exporter thus 
need not any longer devote its scarce resources to convincing the authority about the reliability of 
that inform ation.  
 
4.11. Throughout these proceedings, the EU has sought to blur or even eliminate the difference 
between the disclosure of the results of the verification , pursuant to Article 6.7, and the disclosure 
of essential facts , pursuant to Article 6.9 of the  Anti-Dumping Agreement. In its First Written 
Submission, the EU argues that the term "results " refers to the "essential factual outcome of the 
verification " or the "essential facts under consideration as established through the on -the-spot 
investigation ".18 
 
4.12. This is of course incorrect. Even if the investigating authority has the option of disclosing the 
"results " of the verification at the same time as disclosing the essential facts, the subject of these 
two sets of disclosures is different: "Results " of the verification visit, on the one hand, and 
"essential facts ", on the other hand. The difference between these two terms is obvious not only as 
a matter of treaty interpretation – since the drafters used two different terms, they must have 
meant two different things. It is also obvious from the structure and the unfolding of an 
                                               
15 Panel Report, Korea – Certain Paper , para. 7.192. (emphasis added).  
16 Panel Report, Korea – Certain Paper , para. 7.192. (emphasis added).  
17 Panel Report, Korea – Certain Paper , para. 7.192.  
18 EU's First Written Submission, paras. 185.  WT/DS442/R/Add.1  
- C-15 - 
 
  anti-dumping investigation. More specifically, whereas the results of the verification become part 
of the investigation record, the essential facts are merely a subset of the f acts on the record.  
 
4.13. The verification team normally cannot or does not take any final decisions on how the 
verification will affect the investigating authority's determinations of dumping and injury in the 
investigation until they have returned home and had the opportunity to consult with their superiors 
and other colleagues on any issues arising during the verification. The verification is, therefore, in 
essence a fact -gathering and a fact -checking exercise. The results of this exercise, therefore, 
relate to what facts have been gathered and checked and, by implication, what facts have not 
been gathered or checked. However, the results of the verification do not include any subsequent 
determinations  by the investigating authority as to how to use the results of the verification, and 
other items in the record, to calculate dumping margins for the exporter in accordance with the 
Anti-Dumping Agreement. The subsequent decision how to determine the dumping margins is the 
result of the investigation  – and d isclosed inter alia in the disclosure under Article 6.9 – and not 
the result of the verification  that must be disclosed under Article 6.7.  
 
4.14. The respective objects of the disclosure under Article 6.7 and 6.9 must also be clearly 
distinguished because  disclosure pursuant to Article 6.7 may occur at a point in time well before 
the disclosure under Article 6.9. The investigating authorities of numerous WTO Members provide 
a separate "verification report "; in the chronology of anti -dumping investigations,  this report is 
typically issued well before these authorities have decided on what constitutes essential facts. 
Indonesia of course accepts that an investigating authority may choose to disclose the results of 
the verification visit simultaneously with th e essential facts, as reflected in the text of Article 6.7. 
However, that choice of the investigating authority may under no circumstances modify the type of 
information to be disclosed or otherwise result in an impairment of the procedural rights and 
position of the investigated parties. Otherwise, the term "results" would refer to different matters 
depending on when the authority decided to satisfy its obligation under Article 6.7. This 
interpretative outcome would be alien to basic principles of treaty i nterpretation and would subject 
the due process rights of investigated companies to discretionary choices by the investigating 
authority.19 
 
4.15. Thus, the results  of a verification visit are reflected in the investigating authority's choices as 
to (i) whi ch information to look at; (ii) why it looks at that information and (iii) whether it is 
satisfied during the verification that a given specific piece of information or document was 
successfully verified. However, the results of the verification may also i nclude information that was 
provided and substantiated by the exporter but that the investigating authority did not 
immediately consider relevant to its final determination.  
 
4.16. Yet another consideration is that Article 6.7 is also intended to provide d omestic courts 
(using their own standard of review) and WTO panels (using the standard of review pursuant to 
Article 17.6(i)) with the ability to review the determinations of investigating authorities. This ability 
depends on the existence of a proper disc losure of the "results" of the verification visit under 
Article 6.7 of the Anti -Dumping Agreement.  
 
4.17. WTO case law – such as Korea – Certain Paper and US – Steel Plate – demonstrates that 
information contained in the disclosure of the verification resu lts (whether through a verification 
report or with the disclosure of essential facts) – concerning the type of information verified; the 
authority's decision whether the information was verifiable, verified or not; as well as any 
attendant circumstances, s uch as behaviour of the investigated firm – plays an important role for a 
panel's ability to examine whether the investigating authority complied with Article 17.6(i) of the 
Anti-Dumping Agreement. A failure to disclose the results of the verification, or an incomplete 
disclosure, will thus significantly undermine a panel's ability to examine, in a "critical and 
searching" fashion, the establishment and evaluation of the facts by the investigating authority.20 
Similarly, only a proper reporting of the result s of the verification visit will enable the appropriate 
judicial review within a WTO Member's domestic legal system, as required by Article 13.  
 
4.18. Moreover, a failure by the investigating authority to describe accurately and in detail events 
during th e verification visit is a failure to permit interested parties to see information that is 
relevant to the presentation of their cases. This is contrary to Article 6.2 - which requires that all 
                                               
19 Indonesia's Opening S tatement at the First Panel Hearing, para. 98.  
20 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 93.  WT/DS 442/R/Add.1  
- C-16 - 
 
  interested parties have a "full opportunity for the defence of their interests" — as well as 
Article  6.4, which requires authorities, whenever practicable, to "provide timely opportunities for 
all interested parties to see all information that is relevant to the presentation of their cases … that 
is used by the authori ties … and to prepare presentations on the basis of this information".  
 
4.19. In this case, the EU argues that the Commission provided the results of the verification visits 
as part of the disclosure of the findings of the investigation. However, these ef forts were, at best, 
cursory and cannot be considered to have met the standard required under Article 6.7. For 
instance, the Commission failed to set out  
 
 which specific types of information, documents, or issues were addressed in the 
verifications.  
 which  particular documents (e.g. sales invoices, rebate notes, etc.) were examined; and  
 what questions were asked by the Commission officials or what answers were provided 
by the exporters.  
4.20. The extent of the Commission's failure to disclose the results of the verification is clearly 
visible from a reading of the contemporaneous notes taken by PT Musim Mas' counsel during the 
verifications at that exporter's premises in Singapore, Medan, and Hamburg. These notes contain 
the kinds of basic information that  are entirely absent from the Commission's purported disclosure 
of the verification results, namely, who attended the verifications, what documents were reviewed, 
what questions were asked, and what answers were given. There are several issues of critical 
importance to the Commission's subsequent adjustment of PT Musim Mas' export price and to 
Indonesia's related claim under Article 2.4 of the Anti -Dumping Agreement. As the counsel notes 
demonstrate, the issues at hand were discussed during verification, bu t were not subsequently 
disclosed by the Commission. These issues include the close corporate, management, 
organizational and operational links between PT Musim Mas and ICOFS; transfer pricing policy; the 
so-called "direct " export sales by PT Musim Mas; th e manner in which ICOFS and PT Musim Mas 
co-operate on such export sales as well as for domestic sales; and the fact that ICOFS was 
involved in negotiating, preparing and executing each and every sale of PT Musim Mas' products, 
including domestic sales.  The Commission's conclusion that ICOFS is not the sales department of 
PT Musim Mas, but rather stands in a commission -agent relationship with PT Musim Mas is in direct 
contradiction with this information.  
 
5. CONCLUSION AND REQUE ST FOR FINDINGS  
5.1. For th e above reasons, Indonesia respectfully requests that the Panel find that the 
European  Union.  
 
 Acted inconsistently with Articles 2.3 and 2.4 of the Anti -Dumping Agreement, by 
making an improper deduction for the activities of PT Musim Mas' trading arm ICO FS and 
disregarded the fact that the two entities are part of an SEE;  
 Acted inconsistently with Articles 3.1 and 3.5 of the Anti -Dumping Agreement, by failing 
to conduct a proper non -attribution analysis with respect to the factors 
"financial/economic cri sis" and "issues related to the European Union's domestic 
industry's access to raw materials"; and  
 Acted inconsistently with Article 6.7 of the Anti -Dumping Agreement, by failing to 
disclose to either of the investigated Indonesian exporters the results o f the verification 
visit. 
5.2. Indonesia thanks the Panel and the Secretariat team for its work so far. Indonesia looks 
forward to assisting the Panel in the subsequent stages of this dispute.  
 WT/DS442/R/Add.1  
- C-17 - 
 
  ANNEX C -2 
SECOND INTEGRATED EX ECUTIVE SUMMARY OF THE ARGUMENT S OF INDONESIA  
1  INTRODUCTION AND OVE RVIEW  
1.1.  The key issue regarding Indonesia's claim under Article 2.4 of the Anti -Dumping Agreement 
is that adjustments may be made only for actual/genuine expenses incurred by the seller that 
affect the price and therefore a ffect price comparability, within the meaning of Article 2.4. In this 
case, the EU's adjustment for internal transfers between the two arms of the seller, PT Musim Mas 
and ICOFS did not reflect an actual expense that was incurred by the seller. Therefore, the internal 
transfer did not reduce the net price received by the seller for the goods. The EU has failed to 
address this issue or to explain how this was any other than a purely notional adjustment, based 
on what might have happened had the producer/expo rter structured its business differently.   
1.2.  Regarding Indonesia's claim under Article 3.5 of the Anti -Dumping Agreement, the EU has 
failed to show where the Commission provided a reasoned and adequate explanation of the factors 
raised by Indonesia. Instead , the EU relies on ex post  explanations, which in any event, frequently 
contradict record evidence or are internally inconsistent.  Finally, the EU 's arguments under 
Article  6.7 of the Anti -Dumping Agreement cannot surmount the fact that the Commission simply 
failed to provide the investigated companies with any meaningful " results " of the verification visit.  
2  INDONESIA'S CLAIM UN DER ARTICLE 2.4 OF T HE ANTI -DUMPING AGREEMENT  
2.1  Indonesia's claim does not hinge on the label "single economic entity"  
2.1.  The EU contin ues to argue that Indonesia's claim stands and falls on whether the Panel's 
decision adopts the terminology of a "single economic entity". Indonesia has explained at length 
that its legal claim is that the EU has acted inconsistently with Article 2.4 of th e 
Anti-Dumping  Agreement by making an adjustment for an item that does not affect the price 
received by the seller and therefore does not affect price comparability, resulting in an "unfair 
comparison", within the meaning of Article 2.4.  
2.2.  In Indonesia's vie w – and in keeping with prior WTO case law and the EU's own domestic 
legal terminology – a suitable terminology for the process of considering whether transactions 
between related parties affect price comparability is to ask whether the two entities form a  "single 
economic entity".  However, the term "single economic entity" is nothing but a phrase intended to 
operationalize, in the context of related parties, the concept of "affect[ing] price comparability", 
within the meaning of Article 2.4. Needless to s ay, other labels are perfectly possible, e.g. whether 
two companies are sufficiently closely related or, to paraphrase the EU Commission, whether an 
adjustment is "appropriate". This is the term the Commission used when examining transactions 
between Ecogr een and EOS. The choice of the most appropriate label, as decided by the Panel, 
does not affect either the substance of the analysis or Indonesia's claim that the "mark -up" at 
issue is not an item that affects price comparability. If the companies at issue  are sufficiently 
closely related or intertwined as to operate as a single entity, transfers between them do not affect 
the price they receive for the goods.  
2.2  The EU's adjustment under Article 2.4 does not reflect an actual or genuine expense 
incurred by th e seller  
2.3.  The central question under Article 2.4 is whether the adjustment is required to ensure price 
comparability. An adjustment is required  for any item that affects price comparability; and, 
conversely, an adjustment is prohibited  for any item that doe s not affect price comparability. 
Hence, the key issue is whether transactions between ICOFS and PT Musim Mas and the "mark -up" 
discussed in these proceedings affects the price received by the seller and hence price 
comparability. However, both the Commiss ion and now the EU have failed to explain how the 
"mark -up" can be regarded as an actual or genuine expense incurred by the seller of the 
investigated goods.  WT/DS 442/R/Add.1  
- C-18 - 
 
  2.4.  Indonesia has explained in detail how a company's cost structure will be impacted by the 
differen t ways in which it may organize its business activities.  For instance, if a producer uses an 
in-house sales department to conduct sales activities or an in -house transportation department to 
provide transportation services to its customers (or if a single  economic entity uses separate legal 
entities within its structure for that purpose), the producer's expenses will be the financial outlay 
required to operate these departments or legal entities. In contrast, if the producer uses 
independent third party en tities (traders or a transportation company) to provide these services 
for its customers, the producer's expenses will be the actual fees paid to these independent third 
party service providers. The difference between in -house expenses and actual fees paid  to 
independent third parties cannot be blurred by pretending, for instance, that a producer that in 
reality is using an in -house sales department is actually relying on an independent trader. The 
difference between these two scenarios has significant impl ications for the nature  of the expense 
(cost vs. a commission) and the amount  (one may be higher than the other, which is the very 
reason why companies choose one option over the other).  
2.5.  Indonesia has provided multiple examples – along with numerical valu es in table format – to 
illustrate this point. The EU has not addressed any of these arguments or examples directly. The 
EU cannot make notional or fictitious adjustments as if PT Musim Mas were using (or were 
continuing to use) an independent trader, if t he company in reality is relying on a sales 
department with which it is tightly integrated and with which it jointly sells the investigated 
product.  
2.6.  Moreover, there is not a shred of evidence in the record of the investigation to suggest that 
the "mark-up" represents the amount of an actual commission paid by the seller on these sales. 
Even the Commission did not consider that the "mark -up" was an actual commission. Instead, it 
decided that the actual "mark -up" was not reliable "in order to avoid any disto rting effects that 
may arise from the transfer prices".1 Consequently, instead of relying on the transfer prices, the 
Commission used "a reasonable profit margin" based on "a reasonable profit for the activities 
carried out by trading companies in the chem ical sector". Thus, even in the Commission's view, 
the amount of the "mark -up" appears to be irrelevant: the Commission would, it seems, use a 
reasonable profit margin of other companies regardless of whether the "mark -up" was zero, the 
percentage amount s et out in the S&P Agreement or some other (higher) amount . This makes 
clear that the Commission did not consider that the "mark -up" was an actual commission or 
expense, but merely the justification for making a notional adjustment.  
2.7.  It is clear also that ev en the Commission does not consider that either the actual "mark -up" 
between PT Musim Mas and ICOFS or the "reasonable profit" it used instead represents the actual 
selling, general and administrative expenses (SG&A) incurred by either ICOFS or PT Musim Ma s for 
these sales. As Indonesia has explained, the Commission also deducted ICOFS' SG&A, suggesting 
that this adjustment was intended to represent profit (which is, indeed, the term used by the 
Commission – "a reasonable profit  margin", "actual profit marg ins" etc). The EU now argues that 
this case concerns a direct selling expense in the form of a commission that is related to export 
sales only. There is, however, no suggestion in the Commission's determinations that the 
"mark -up" was an actual selling exp ense actually incurred by the seller – ICOFS and 
PT Musim  Mas – in this case. Instead, it is clear that the Commission decided that the "mark -up" 
was not reliable but that it was nevertheless entitled to make a "notional" adjustment as if ICOFS 
and PT Musi m Mas had used a different structure and process.  
2.8.  Moreover, the audited financial statements of PT Musim Mas and ICOFS provide no evidence 
whatsoever that the "mark -up" was an actual expense incurred by the seller – ICOFS and 
PT Musim Mas – in making the investigated  sales. If PT Musim Mas had used an independent 
trader – or an agent working on a commission basis – a corresponding entry would exist in its 
financial records. However, there is no such entry. Instead, the "mark -up" is simply an allocation 
of revenue between the two arms of the producer/exporter, and the actual selling expenses are 
clearly recorded as SG&A expenses in the financial statements of the two companies.  
2.9.  Throughout this dispute, the EU has failed to establish that a commission was act ually paid in 
this case. While the EU chooses to use the terms "commission" and "mark -up" interchangeably, 
and the EU's regulation defines "commission" to include a "mark -up", the EU has failed to show 
how a commission was actually paid in this case. Moreo ver, the EU has failed to explain the legal 
                                               
1 Definitive Regulation, para. 36. Exhibit IDN -4. WT/DS442/R/Add.1  
- C-19 - 
 
  or economic justification for treating a "mark -up" as the same as an actual commission and 
imputing a notional expense to the seller in these circumstances. It has not explained how a 
transfer between two entitie s that form part of the investigated producer/exporter affects the price 
received by the producer/exporter for the investigated goods. It has not explained on what 
grounds it is permissible to ignore the actual sales structure and process, as well as the a udited 
financial statements, of the producer/exporter in order to impute a notional expense in this case. 
The EU has not explained how the "mark -up" can be a cost to the "seller", when it is the party that 
actually sells the goods – ICOFS – that receives t he "mark -up". 
2.10.  The EU has argued that Indonesia's argument is, in effect, that once two parties are related, 
there can be no adjustments for transactions between them. This is incorrect. Indonesia has made 
clear that there may be situations in which parties  are related in the sense  that there is some 
common stockholding but, overall, the relationship does not satisfy the Korea – Certain Paper 
criteria. In that case, it may be appropriate to treat the two parties as independent. In that case, 
however, several  factors would be different than the present case: (i) it is unlikely that the 
investigating authority would reject the price charged by the producer to its not -closely -related 
affiliate as unreliable; (ii) if the not -closely -related affiliate was acting a s an agent on commission 
basis, it would not take title to the goods and be treated as the "seller"; and (iii) any commission 
paid in those circumstances would likely be recorded as such in the audited financial statements of 
the seller.  
2.11.  Again, there is n o evidence that this is an actual commission paid or actual expense 
incurred by the producer/exporter, even if the Commission considers that it has the right to 
proceed as if it is. The standard of review under Article 17.6(i) of the Anti -Dumping Agreement  
requires a panel to determine whether an investigating  authority's " establishment of the facts was 
proper and whether their evaluation of those facts was unbiased and objective". In this 
investigation, the Commission ignored the actual facts regarding the  expenses actually incurred by 
the producer/exporter and instead adjusted for a hypothetical, imputed commission that is based 
solely on the Commission's view of what expenses would have been incurred if the 
producer/exporter used a different sales process  and determined that it is entitled to make an 
adjustment on that basis . In the absence of any evidence in the financial statements of either 
PT Musim Mas or ICOFS that the intra -company transfer of funds represented an actual expense to 
the producer/expor ter as a whole, there is no basis for the Panel to find that the Commission's 
"establishment of the facts was proper".  
2.12.  Even assuming that the mark -up could be considered as a cost to PT Musim Mas, it is 
revenue  to ICOFS.  As explained in greater length in  the next section, it is fundamental to note 
that the Commission treated both PT Musim Mas and ICOFS – taken together – as the seller. The 
export price on the basis of which an ex works price was calculated was the price charged by 
ICOFS to European custom ers, not the price at which PT Musim Mas sold to ICOFS. This means 
that both PT Musim Mas and ICOFS together were the seller. To the producer/exporter as a whole, 
therefore, the "mark -up" does not represent a cost: the cost to one entity and the revenue to  the 
other cancel each other out. The EU has never addressed this point, nor provided any legal basis 
for a deduction for an amount which, under its own logic, is revenue to the very seller (ICOFS) on 
whose price it is basing its determination of export pr ice.  
2.3  The EU's determinations concerning the relationship between PT Musim Mas and 
ICOFS are contradictory  
2.13.  The starting point for the EU's determination of the export price was the price charged by 
ICOFS to the first unrelated customer in the EU. This mean s, in effect, that the Commission 
treated ICOFS as the seller of the investigated goods and PT Musim Mas/ICOFS together as the 
producer/exporter for whom a single dumping margin must be and was calculated in accordance 
with Article 6.10 of the Anti -Dumping  Agreement.  
2.14.  The EU contends that there is no contradiction between  the treatment of PT Musim Mas and 
ICOFS as a single entity for the purpose of identifying the starting price and as, in effect, separate 
entities for the purpose of adjustments. The EU arg ues that the use of ICOFS' price to the first 
unrelated customer in the EU merely flows from the reference in Article 2.1 to the price at which 
the investigated goods are "introduced into the commerce" of the investigating Member.  WT/DS 442/R/Add.1  
- C-20 - 
 
  2.15.  The EU omits, however, t hat the Commission's reliance on ICOFS' price to the first 
unrelated customer  pre-supposes a finding by the Commission regarding the relationship between 
PT Musim Mas and ICOFS and the reliability of the transfer price between the two. Put another 
way, at the outset of the investigation, the Commission made a crucial choice to treat 
PT Musim  Mas and ICOFS as a single entity. This choice entails logical consequences that the EU 
now seeks to avoid.  
In a number of cases the foreign producer will not sell dire ctly to the Community. A 
trading house, for instance, may act as an intermediary between the foreign 
producer and the Community importer. … If the intermediate company is 
independent  from the producer, provided that the producer knows when selling to 
the intermediate company, that the final destination of the goods is the EC, the 
export price is normally the price charged by the foreign producer to the 
intermediate company for further resale  to the Community … In principle, related 
sales subsidiaries  locate d in the country of the producer will be treated as an export 
sales department  of the producer and the export price will be determined on the 
basis of the prices charged by the related company to the first independent 
customer  in the Community … The same a pproach may also be taken with respect 
to related sales subsidiaries located in a country other than the producer.  In Welded 
Tubes , the Commission acknowledged that the prices charged by a company 
located in a country other than that of the producer and pe rforming the tasks of an 
export department (e.g., conclusion of export contracts, invoicing and collection of 
payments) had to be taken into account for the dumping calculation.2 
2.16.  The EU's decision to use the price charged by ICOFS to the first unrelated cu stomer in the 
EU is, therefore, not simply a matter of applying the definitional provisions of Article 2.1 of the 
Anti-Dumping Agreement. It also involves a decision by the investigating authority regarding the 
relationship between PT Musim Mas and ICOFS t hat has important consequences for the rest of the 
Commission's analysis. If ICOFS were an independent "trading house", the Commission would 
have used the price charged by PT Musim Mas to ICOFS "for further resale to the [Union]" as the 
basis for the expor t price. Instead, the Commission drew the normal distinction "between 
intermediate companies that are independent from the producer and those that are related to the 
producer". The Commission treated the "related sales subsidiary" ICOFS as "an export sales  
department of the producer" that was "performing the tasks of an export department" and used 
ICOFS' price to the first unrelated customer as the starting point to determine the export price. 
Again, put another way, the Commission treated PT Musim Mas and ICOFS as a single entity.  
2.17.  In the words of the description quoted above, ICOFS was treated as the export sales 
department  of the producer and the export price was determined on the basis of the prices 
charged by the related company to the first independent customer  in the EU. As a result, 
PT Musim  Mas and ICOFS were treated as a single "producer/exporter" or "seller" for the purposes 
of determining dumping margins. Again, contrary to the EU's arguments, this necessarily involved 
a determination by the Commis sion regarding the relationship between them.  
2.18.  To illustrate how all this works in practice, an investigating authority may be faced with 
three distinct sales structure and processes that are relevant to this determination. In a 
Scenario  1, the exporter sel ls to an independent trader, who then re -sells to the investigating 
Member. In this case, the investigating authority will ask the producer to report all sales to the 
independent trader for which the producer knows in advance that the destination is the 
investigating Member. Clearly, the Commission found that this is not the structure or process used 
by PT Musim Mas and ICOFS.  
2.19.  In a Scenario 2 , the producer sells directly to customers in the importing Member, but pays 
a commission to an independent trader fo r arranging the sales. Here, the producer (but not the 
independent trader) would be the seller of the goods and would report its sales directly to the 
customers in the importing Member. The starting price for determining the net export price would 
be the p rice charged by the producer. The commission paid to the independent trader would be a 
direct selling expense. Again, the Commission clearly found that this is not the structure or process 
used by PT Musim Mas and ICOFS, as the starting price used was the price charged by ICOFS.  
                                               
2 Anti-Dumping and Other Trade Protection Laws of the EC, Van Bael & Bellis , pp. 87 -89 (italics added). 
Exhibit IDN -69. WT/DS442/R/Add.1  
- C-21 - 
 
  2.20.  Finally, in a Scenario 3,  the producer sells to a related trader who then sells to the 
importing Member. In this case, the investigating authority must determine whether the 
relationship between the producer and the related trader i s such that the prices between them are 
unreliable. Once it makes this determination, it will ask them to report the sales by the related 
trader to the customer in the importing Member rather than the sales from the producer to the 
related trader as the st arting point for the determination of the export price. Clearly, the 
Commission found that this is the sales structure and process that exists with respect to 
PT Musim  Mas and ICOFS in this case. In effect, the related trader acts "as the export sales 
department of the producer", and the two entities are, for all relevant purposes, a single economic 
entity.  
2.21.  Contrary to the EU's assertion, therefore, there is a clear contradiction between the 
Commission's determination to treat PT Musim Mas and ICOFS as a s ingle entity for the purpose of 
identifying the starting price for the calculation of dumping margins and for the purpose of 
determining a single margin of dumping within the meaning of Article 6.10, on the one hand, and 
deciding to treat them as if they o perated independently for the purpose of determining 
adjustments to the export price, on the other. The Commission cannot, on the one hand, 
determine that PT Musim Mas and ICOFS are, together, the producer/exporter or seller of the 
goods and then, on the o ther hand, determine that their relationship is one of seller and 
independent trading company. At a minimum, the Commission has failed to provide a reasoned 
and adequate explanation of how this contradiction can be reconciled.  
2.22.  The EU has failed to address  the implications of its finding – for this purpose at least – that 
PT Musim Mas and ICOFS are a single entity. The EU has not explained how money transfers 
between two pockets of a single producer/exporter – which PT Musim Mas and ICOFS undoubtedly 
are fo r the purposes of this case – affect the ex works price received by the producer/exporter for 
its export sales of the investigated producer.  
2.23.  Put another way, the "mark -up" represents part of the price that the seller, ICOFS and 
PT Musim Mas, receives for the sale. Their decision, as closely intertwined parties, on how to 
allocate that revenue between them, does not in any way affect the price received for the sale. 
The price received by the seller – ICOFS and PT Musim Mas taken together – would not change 
whether the amount of the "mark -up" were in a different amount or zero. To put this in practical 
terms, assume the price charged by PT Musim Mas/ICOFS to the first unrelated customer was 
increased by 20 %. PT Musim Mas /ICOFS could decide – for tax or other  internal reasons – that 
the additional 20 % revenue would be split 50 -50 between them. They could decide that all of the 
additional revenue could go to ICOFS. Or they could decide  that it would all go PT Musim Mas. In 
all of these three scenarios, the actu al price received by the seller remains the same, and the 
expenses actually incurred by the seller remain the same. Similarly, the amount of the expenses 
actually incurred by ICOFS and PT Musim Mas does not change regardless of whether the "mark -
up" is a d ifferent amount or zero. Thus, the "mark -up" does not affect the price and, hence, price 
comparability.  
2.24.  However, under the Commission's approach, however, the choice between the 50 -50 and 
the other options would have a decisive impact on the ex works price  and on the dumping 
margins. This lacks logic under any scenario.  
2.4  The EU has made deductions for items that are normally not deducted from the ex 
works price and that the EU did not deduct for the ex works price on the normal value 
side 
2.25.  First, the EU has not addressed that the ex works price normally includes SG&A expenses 
incurred by the seller  in each of the domestic and export markets. The sole exception in this case 
is the deduction the Commission made for the SG&A incurred by ICOFS and deducted from t he 
export price as part of the contested adjustment. Where the Commission seeks to establish the net 
price at an ex works level that normally includes the indirect selling expenses/SG&A incurred by 
the seller, and it includes indirect selling expenses/SG&A  in the normal value, there is no legal 
basis to deduct any indirect selling expenses/SG&A of the seller from the export price. The same 
applies to any revenue that could be considered as part of the profit of the seller.  WT/DS 442/R/Add.1  
- C-22 - 
 
  2.26.  Secondly, the EU has not provided  any justification for the deduction of any amount that is 
the "profit" of the seller (or that serves as a proxy for that "profit"). The determination  of price 
discrimination involves a comparison of two prices (normal value and export price) in order to 
identify whether the seller is obtaining a lower return on sales in the export market than on sales 
in the domestic market. Deducting profit from the export price necessarily reduces the return 
achieved by the seller on the export sales and distorts the com parison unfairly. To the extent that 
the Commission purports to have deducted profits made by the seller, ICOFS, the EU has provided 
no justification for this deduction. Moreover, unless the Commission can establish that the entire 
amount it deducted repre sented an actual expense of the seller, Indonesia sees no legal basis for 
the adjustment.  
2.5  The differential treatment of PT Musim Mas and Ecogreen  
2.27.  The EU continues to mischaracterize Indonesia's arguments concerning the differential 
treatment of PT Musim M as and Ecogreen. Indonesia does not argue that the differential treatment 
per se  amounts to discrimination. Rather, Indonesia argues that the Commission's reasoning 
explaining its differential treatment of the two companies is part and parcel of the Commis sion's 
explanation for why it made the adjustment for PT Musim Mas and must be measured against the 
benchmark of a "reasoned and adequate explanation".  
2.28.  Indonesia has previously explained that the three key criteria relied on by the Commission 
to different iate between the PT Musim Mas/ICOFS and Ecogreen/EOS, respectively, are not 
meaningful and provide no insight into whether the allocation of income between the producer and 
the trading arm affected price comparability. The EU has failed to respond or expla in why the three 
sets of criteria – "direct" export sales; the existence of a written as opposed to a verbal 
agreement; and third party sales – are relevant for determining whether a monetary transfer 
between two related parties affects price comparability . In Indonesia's view, none of these criteria 
has any relationship with the question at hand.  
2.29.  The Commission 's determination is also  undermined by the fact that it examined the 
existence of corporate and management links in the case of Ecogreen /EOS, but no t in the case of 
PT Musim Mas /ICOFS. The silence of the Commission on this point for PT Musim Mas  cannot be 
read – as the EU argues – that the Commission acknowledged that both companies were closely 
related to their sales entity, but that this criterion w as not of any further relevance. A panel cannot 
take the defending Member at its word, but rather must find direct evidence in the record and in 
the investigating authority's reasoning that a particular analysis was undertaken. Any ambiguity in 
this regard  must be interpreted to the detriment of the investigating authority , which is required  to 
provide a reasoned and adequate explanation.  
2.30.  The absence of any reference or explanation in this case is compounded by the fact that the 
Amending Regulation does not  make clear what weight the Commission attached to the "common 
ownership/control" criterion, relative to the other criteria, in its analysis of Ecogreen /EOS. Thus, 
even if the remaining criteria were meaningful and relevant , the Commission's reasoning woul d 
still be deficient, because it remains entirely unclear how the Commission weighted, in relative 
terms, the differences between the two producer/exporters versus the common, shared feature of 
"common ownership/control".  
2.31.  The EU erroneously claims that it did not change its criteria in response to the Interpipe  
judgment and that "[t]he only change that occurred was to examine the factual situation of the 
interested parties in the light of the factual situation" in the Interpipe case.3  
2.32.  This appears to be nothing but semantics and merely another way of saying that indeed the 
criteria did change . The  criteria changed from those used in the Definitive Regulation to those 
reflected in the Interpipe judgment and applied  in the Amending Regulation.  The Interpipe 
judgment contained not merely a set of facts, but the Court's view as to how EU law should be 
applied to those facts. In the Amending Regulation, the Commission purported to apply the 
interpretation by the Interpipe court to the facts of the fatty alcohols investigation (and made 
other changes below).  
                                               
3 EU's response to Panel question No. 43, para. 17.  WT/DS442/R/Add.1  
- C-23 - 
 
  2.33.  In any event, it is simple logic that the criteria changed.  In the Definitive Regulation,  
Ecogreen and PT Musim Mas were treated identically . In the Amending Regulation, they were 
treated differently. The facts  had not changed. The EU's criteria must, therefore, have changed. It 
is not clear why the EU feels compelled to suggest otherwise.  
2.34.  Although an  investigating authority enjoys a certain degree of discret ion, which  may also 
entail a change in the analytical  framework applied during the investigation , it must comply with 
certain key principles.  
2.35.  First, the authority must provide a reasoned and adequate explanation for its determination. 
Second, where the authority previously reach ed a certain conclusion on the  basis of a given set of 
facts; and then subsequently reaches the exactly opposite conclusion, without any  change in the 
underlying facts;  the investigating authority must address this point in its explanation. In other 
words, whether the second (amended) explanation is sufficient is determined, in no small 
measure, on whether the authority has adequately explained why the authority chose to alter its 
assessment criteria after the initial determination;  how the new assessment criteria differ from the 
old as sessment criteria; why the new assessment criteria are preferable to the old assessment 
criteria; and  how the amended conclusion is justified in the light of the new assessment criteria.  
2.36.  The Commission also failed to explain in the Amended Regulation how it viewed and 
weighed its previous determination that the two producers/exporters were identically situated. The 
investigating authority must also explain how it weighed the previously found similarities between 
the producers/exporters , and its conclusion t hat the two  producers/exporters were identically 
situated and warranted identical treatment, against the new assessment criteria that point towards 
differences between the producers/exporters.  
2.37.  The EU appears to consider that the Commission was entitled to  radically change the 
assessment criteria, and reach a diametrically opposite conclusion, simply because the European 
Court decided that the new criteria were appropriate. However, the EU is not entitled to deference 
simply because the Commission acted in the light of a decision of an EU court.  
3  INDONESIA'S CLAIMS U NDER ARTICLES 3.5 AN D 3.1 OF THE ANTI -DUMPING 
AGREEMENT  
3.1.  The EU has failed to rebut Indonesia's claims that the Commission's non -attribution analysis 
of the factors "financial crisis" and "raw ma terials" is inconsistent with Articles 3.5 and 3.1 of the 
Anti-Dumping Agreement.  
3.2.  As a general defence, the EU alleges that Indonesia seeks to heighten the standard  under 
Article 3.5, by imposing an obligation on investigating authorities to conduct a qua ntitative rather 
than a qualitative analysis of the effects of other factors . However, Indonesia' s arguments merely 
reflect the well -established legal principle that investigating authorities must provide a reasoned, 
adequate, and meaningful explanation fo r their injury and causation determination.  Moreover, with 
respect to the "raw materials" factor, it is useful to recall that the Commission did not provide any 
analysis at all . It simply brushed aside PT Musim Mas ' extensive arguments and evidentiary 
references as "unsubstantiated", without any explanation whatsoever .  
3.3.  Indonesia is not arguing that the Commission erred because it did not agree with 
PT Musim  Mas that poor raw material access for the EU domestic industry was a main cause (or 
simply a cause) of the injury experienced by the domestic industry. W hatever the ultimate result 
the Commission may have reached, at the very least, PT Musim Mas ' arguments and evidence 
required some  degree of analysis.  
3.4.  The EU' s arguments draw on random, unconnected state ments and figures in sections of the 
determinations that the Commission never intended to be part of its non -attribution analysis.  
Indonesia is not arguing that the Panel cannot, as a matter of principle, look beyond the "non-
attribution " heading in analys ing the Commission 's findings . In Indonesia's view, h owever, the fact 
that a particular statement is under a different heading is a good indication that the investigating 
authority did not intend this statement to be part of its causation analysis.  WT/DS 442/R/Add.1  
- C-24 - 
 
  3.5.  Measur ed against the well -established standard of review applicable in disputes involving 
anti-dumping matters, all of the EU' s ex post  arguments must be rejected . 
3.1  The Commission failed to conduct a proper non -attribution analysis of the factor 
"financial crisis " 
3.6.  With respect to the "financial crisis" factor, the EU failed to explain  why the Commission 
refused to address the exporter' s argu ment concerning the EU industry's profits in late 2009 and 
early 2010 . During that time period, imports from the countries co ncerned increased, but at the 
same time the profit of some EU companies as a whole and for the care chemicals segment 
improved considerably.   
3.7.  Furthermore, the Commission refused to address the issue of captive demand , raised by 
PT Musim Mas in Exhibit IDN -35 in support  of its argument that the injury to the EU industry was 
caused by the factor "financial crisis", rather than by dumped impo rts. In a nutshell, the logic of 
this argument was that the financial crisis led to reduced captive demand for fatty alc ohols (FOH) -
downstream products, such as ethoxylate or surfactants. This , in turn, resulted in lower demand 
for FOH itself, especially for premium branded products produced by EU companies. Before the EU 
FOH-producers adjusted to this situation, their cont inued production at previous levels created an 
oversupply of FOH , which led to a decrease in the price of FOH  in the EU market . Subsequently, 
there was lower capacity utilization by the EU companies. Both of these phenomena – price 
decreases and/or lower c apacity utilisation – were relied upon by the Commission  in its finding of 
injury , but improperly attributed to imports.   
3.8.  In Indonesia's view , at the very least, the EU Commission had a  duty to investigate and 
analyse the EU industry's profits in late 2009  and early 2010 , and the issue of captive demand. By 
ignoring entirely PT Musim Mas 's arguments and evidence with respect to these issues , the EU 
Commission acted inconsistently with Articles 3.1 and 3.5 of the Anti -Dumping Agreement.  
3.2  The Commission failed  to conduct a proper non -attribution analysis of the factor 
"raw materials"  
3.9.  With respect to the factor "raw materials", the EU alleges  that Indonesia's entire case r ests 
on a few paragraphs in PT Musim Mas 's comments on the Complaint, and that, i n all of t he 
subsequent comments and communications, PT Musim Mas  failed to repeat  its arguments with 
respect to this factor.  
3.10.  However, PT Musim Mas ' arguments and evidence constitute an extensive narrative 
contained in PT Musim Mas' Comments on the Complaint, which  Indonesia quoted and described in 
its first written submission and its responses to Panel q uestions 20 and 24 . Furthermore, a s the EU 
acknowledges, after setting out its detailed arguments in its initial submission, PT Musim Mas 
referred consistently to t he "raw materials" factor as an independent "known factor" throughout 
the remainder of the investigation, in par ticular in its Comments on the provisional d etermination.   
3.11.  The EU is also incorrect to suggest that, faced with the Commission 's silence in the 
provisional determination, PT Musim Mas was somehow obliged subsequently to repeat in extenso  
these arguments and e vidence in its comments on the provisional d etermination , and that the 
company's failure to do so somehow limits the Panel' s analysis in this  case. This argument is 
untenable.  On the contrary, it is established case law that the right of an exporting WTO Member 
in a WTO dispute — Indonesia in this case — to raise particular arguments concerning a trade 
remedy determination do es not depend on w hether an investigated company raised that argument 
during the investigation. This applies, a fortiori , in a case where the argument was made by the 
investigated company and merely was not repeated  in subsequent stages of the investigation.  
Finally, the EU 's argument has far -reaching systemic implications. It means essentially that, in 
order to maintain their rights in a subsequent challenge to a dumping determination, investigated 
companies would have to repeat all of their arguments throughout all of thei r submissions during 
the entire investigation — simply because the investigating authority chooses not to address them 
in a provisional determination. This makes no sense, and, moreover, would impose a high burden 
on commercial operators, affecting in part icular exporters from developing countries.  WT/DS442/R/Add.1  
- C-25 - 
 
  3.12.  The EU's primary defence is that the factor "raw materials" is nothing but a part of the 
factor "financial crisis", or t hat access to "raw materials" is relevant to the conditions of 
competition between Indonesia n and EU producers and, therefore, was analysed under a different 
rubric . This is incorrect. PT Musim Mas listed the factor "raw materials" among "various other 
factors" that injured the EU industry, separately from the factor "financial crisis" , and the 
Commission itself  treated it as an independent non -attribution factor in its final determination. The 
fact that "raw materials" may indeed be an element within the competitive relationship between 
the domestic and foreign producers  does not  preclude this fa ctor from being a non -attribution 
factor in its own right within the meaning of Article 3.5. Indeed, several factors listed in Article 3.5 
can be characterized as aspects o f the conditions of competition . 
3.13.  The EU made a number of additional ex post  argument s, all of which lack merit. For 
instance, in its response to Panel q uestion 22, the EU alleged that  EU FOH producers could easily 
switch from one raw -material source to another, depending on their market price, as prices for 
different raw materials do not develop in parallel.  In its response to Panel question 45, the EU  tried 
to develop  this argument by relying on a very general statement in the EU domestic industry's 
Complaint  that the EU producers have plants that use as inputs both synthetic and natural raw 
materials . Importantly, however, this statement lacks any evidentiary support, and does not 
explain  whether a particular plant may use one or more types of  raw materials. Indeed, it is clear 
from a letter from one of the complainants  (submitted as an exhibit in this dispute ) that some EU 
companies produce FOH based on natural oils, whereas others produce FOH products based on 
synthetic inputs . These raw materials are not substitutable and producers relying on one of these 
inputs cannot easily shift to t he other raw material.  
4  THE EU HAS FAILED TO  REBUT INDONESIA'S CL AIMS UNDER ARTICLE 6 .7 
4.1.  Indonesia claims that the EU acted inconsistently with Article 6.7 of the Anti -Dumping 
Agreement, because it failed to make the results of the verification visit availa ble or to disclose 
them pursuant to Article 6.9, as required by Article 6.7.  
4.2.  Article 6.7 requires the investigating authority to disclose the results of the verification either 
in a separate report or as part of its disclosure of the essential fact s under  Article 6.9 of the 
Anti-Dumping Agreement . In this case, the EU did not provide any meaningful disclosure of the 
results of the verification visits to the Indonesian exporters and their affiliates , either in the form 
of a stand -alone disclosure document  containing the results of the verification or as part of the 
disclosure of the essential facts. Instead, i n the Provisional and Definitive D isclosures issued 
pursuant to Article 6.9, the Commission stated only that verification had taken place and that 
unspecified information had been verified, unspecified errors had been corrected and additional 
unspecified information had been collected .  
4.3.  The EU's position in this dispute is, in essence, that these general boilerplate references — 
that could apply to any a nti-dumping verification — satisfy the requirements of Article 6.7. Before 
the Panel, the EU has also relied on a list of exhibits that it provided to the Panel as Exhibit EU -14 
as part of the verification results. Beyond these two elements, the EU in esse nce denies that the 
"results" of the verification are an independent concept, because it argues that the essential facts 
under consideration under Article 6.9 are co -extensive with the "results" of the verification and 
that, by disclosing essential facts u nder Article 6.9, the authority also complies with Article 6.7. 
Finally, as evidenced in particular in its later submission in this dispute, the EU has relied on what, 
in its view, the investigated company "knew", "should have known" or "must have known", that 
the verification did not happen "behind closed doors" and that the company never complained 
about insufficient information. As explained below, all these arguments are mistaken.  
4.1  The "results" of the verification  
4.4.  In this dispute, Indonesia's primary l egal argument is that the EU failed to make available the 
"results" of the verification. Indonesia does not dispute that, as provided in Article 6.7, the 
"results" may be provided in a separate document or in the disclosure of the essential facts.  
4.5.  It is c lear from the text of Article 6.7 and of Article 6.9 that the "results" of the verification 
visits referred to in Article 6.7 are not the same as the "essential facts" referred to in Article 6.9. WT/DS 442/R/Add.1  
- C-26 - 
 
  In its legal analysis, therefore, bearing in mind the ordina ry meaning, purpose, and context of the 
terms, the Panel should take care to define the "results" separately from the "essential facts".  
4.6.  The EU, however, appears to conflate these terms. Under the EU's practice and arguments 
before this Panel, the terms a re interpreted so as to provide no separate meaning to "results" as 
compared to "essential facts". If endorsed by the Panel, this would render the obligation with 
respect to the "results" essentially meaningless. In accordance with the doctrine of effet ut ile, the 
Panel must ensure that its interpretation of these terms gives effect to the differences between 
these terms and gives substance to the requirement in Article 6.7 to make the "results" of the 
verification available.  
4.7.  Moreover, if the Panel agrees w ith Indonesia's legal interpretation that the term "results" in 
Article 6.7 means something different than the "essential facts" referred to in Article 6.9, the Panel 
should rule in Indonesia's favour. In its submissions to the Panel, the EU takes the posi tion that by 
disclosing the essential facts it has necessarily  disclosed the results of the verification. Hence, if 
the Panel disagrees with this legal position adopted by the EU, it can immediately find that the EU 
has acted inconsistently with Article 6. 7. 
4.8.  Indonesia broadly agrees with the general definitions of the term "results" provided by the EU 
in its answers to the Panel's questions following the first meeting of the Panel with the parties. For 
example, the EU quotes the Appellate Body in US – Steel Safeguards to the effect that the 
ordinary meaning of "result" is "an effect, issue, or outcome from some action, process or design".  
4.9.  Indeed, t he "result s" referred to in Article 6.7 are the "effect " or "outcome " of the verification 
visit. As with the "result" of any activity, the "result " of a verification visit is closely linked to the 
conduct, content and purpose  of that verification visit. I n Korea – Certain Paper , the panel 
explained that " results " of verifications include "adequate information regard ing all aspects of the 
verification , including a description of the information which was not verified  as well as of 
information which was verified successfully ". 
4.10.  Although it provides a correct initial definition of the term "results", however, the EU errs  
when it subsequently defines the "results" of a verification visit . The EU's position appears to be 
that there is no practical difference between the results of the verification visit and the essential 
facts under Article 6.9, such that there is no necess ity for separate disclosure and that a disclosure 
of essential facts automatically constitutes disclosure of the results of a verification visit. This 
erroneous view appears to be premised on the notion that "the evaluation of the evidence by the 
investiga ting authority is not part of the 'results' of the verification visit".4 This is incorrect.  
4.11.  Under the EU's view, the "results" of the verification consist of nothing more than any facts 
that end up in the essential facts and a listing of the evidence coll ected during the verification. This 
is inconsistent with the definition of the word "results" to include the "effect" or "outcome", as 
noted above. It is also inconsistent with the purpose  of the verification  visits, as set out in 
Article  6.7, which is "to  verify information or to obtain further information". It is axiomatic that 
information is not verified simply because the investigating authority collects additional exhibits  
during a verification visit. The dictionary definitions of "to verify" include " show to be true or 
correct by demonstration or evidence; confirm the truth or authenticity of; substantiate" and 
"ascertain or test the accuracy or correctness of, esp. by examination or by comparison of data 
etc". A mere list of exhibits collected does no t indicate whether those documents served to 
establish that an issue was "shown to be correct by demonstration or by a comparison of data" or 
even what the issue was.  
4.12.  The results of the verification visit are different than the essential facts because the y are 
known before the essential facts are decided upon.5 At the end of the verification visit, the results 
of the verification visit are known, even if the essential facts are not. This means that the results 
of the verification visit are different than t he essential facts — even the investigating authority may 
later decide that some of the results of the verifications are also "essential facts", while other 
results of the verification may not, in the investigating authority's view, amount to "essential 
facts".  
                                               
4 EU's response to Panel q uestion 26, p. 28.  
5 See Indonesia 's Opening Statement at the first meeting of the Panel with the parties , para. 98.  WT/DS442/R/Add.1  
- C-27 - 
 
  4.13.  Indonesia has previously provided the Panel with practical examples of results of the 
verification visits and of how these results may differ from the essential facts.6 The EU has failed to 
address these examples or explained how the logic of Indone sia's analysis is inconsistent with the 
text of Article 6.7.  
4.14.  To give a further example, a situation that occurs with some frequency in practice during 
verifications is whether an exporter has cooperated within the meaning of Article 6.8 of the 
Anti-Dumping  Agreement. As the Panel is aware, a determination by the investigating authority 
that an exporter has not cooperated within the meaning of Article 6.8 can lead to the exporter's 
information being rejected and determinations being made on the basis of the facts available, with 
adverse consequences for the exporter.  
4.15.  The question of whether an exporter actually cooperated to the best of its ability is 
frequently hotly contested. When controversies arise with respect to what occurred in the course 
of a verifi cation visit, it can become a drawn -out "he said/she said" dispute between the 
investigating authority and the exporter as to what really happened at the verification visits: What 
did the investigating authority ask for? Did the exporter make its best effo rts to provide 
documents and answers? Were there any problems with the documents — were they sourced from 
the company's ledgers or financial statements or could they otherwise be authenticated?  Did the 
investigating authority fairly acknowledge the export er's efforts to provide documents or, if 
requested documents were not realistically available, to provide reasonable alternative 
documents? These and other questions about the verification are relevant both to the investigating 
authority's decision as to w hether the exporter was cooperative within the meaning of Article 6.8 
as well as the exporter's ability to challenge that decision. Thus, while the essential fact  may be 
that the investigating authority has determined that the exporter was not cooperative,  the results 
of the verification  would include the circumstances that gave rise to the investigating authority 
making that determination. In order to challenge that determination in either domestic courts or in 
WTO dispute settlement, the exporter or its g overnment must have access to a record of what 
happened at the verification and the reasons relied on by the investigating authorities to deem 
that the exporter had been uncooperative.  
4.16.  Other potential "results" of the verification would include an explana tion of issues that arose 
during the verification which the investigating authority might need to resolve on the verification 
team's return to capital. For example, an issue could arise during verification as to whether the 
exporter had properly allocated its freight expenses between investigated and non -investigated 
products. Based on the information reviewed during the verification, the verification team may 
have questions as to whether this allocation of expenses between investigated and non -
investigated  products should be accepted or revised.  
4.17.  In that scenario, the results of the verification  would necessarily include the facts relating to 
how the freight expenses were incurred and the evidence both for and against the exporter's 
allocation of the expens es, as reviewed by the investigating authority and the exporter during the 
verification visit.  In contrast, the essential facts  would consist of the investigating authority's 
decision as to what freight expenses it intended to use in its calculation.  
4.18.  As the above examples demonstrate, it is necessary to distinguish between the results of 
the verification, on the one hand, and the essential facts, on the other hand. These examples also 
demonstrate that the EU's approach of collapsing the difference between these two concepts is 
incorrect.  
4.19.  It is also important to keep in mind the due-process purpose of the disclosure requirement 
under Article 6.7 . This purpose further underlines the need to keep separate the two concepts 
"results of the verification" and "ess ential facts". As noted by the panel in Korea – Certain Paper :  
The purpose of the disclosure requirement under Article 6.7 is to make sure that 
exporters, and to a certain extent other interested parties, are informed of the 
                                               
6 Indonesia's Op ening Statement, paras. 106 -108. Indonesia's respon se to Panel question 26, 
paras.  1.106 –1.115.  WT/DS 442/R/Add.1  
- C-28 - 
 
  verification results and can t herefore structure their cases for the rest of the 
investigation in light of those results .7 (emphasis added)  
4.20.  In other words, the purpose of Article 6.7 is, inter alia , to enable exporters to safeguard 
their rights in an anti -dumping investigation and "structure their cases for the rest of the 
investigation in light of those results ".8 For this purpose, exporters must know what information 
was not  verified — so that they can make further efforts to put the investigating authority in a 
position to ultimately  verify that information — as well as what information was verified . This 
information is important for the exporter given that verified information must in principle be used 
by the investigating authority , and the exporter thus need not any longer devote i ts scarce 
resources to convincing the authority  about the reliability of that information .  
4.21.  There is yet another factor that supports the need for giving separate meaning to the terms 
"results of the verification" and "essential facts". This factor has to do with what kinds of decisions 
are or are not taken during a verification visit. Specifically, t he verification team normally cannot 
or does not take any final decisions on how the verification will affect the investigating authority's 
determinations of d umping and injury in the investigation until they have returned home and had 
the opportunity to consult with their superiors and other colleagues on any issues arising during 
the verification. The verification is, therefore, in essence a fact -gathering and  a fact -checking 
exercise . The results of this exercise, therefore, relate to what facts have been gathered and 
checked and, by implication, what facts have not been gathered or checked. However , the results 
of the verification do not include any subsequen t determinations  by the investigating authority as 
to how to use the results of the verification, and other items in the record, to calculate dumping 
margins for the exporter in accordance wi th the Anti -Dumping Agreement. The subsequent 
decision how to det ermine the dumping margins is the result of the investigation  — and disclosed, 
inter alia, in the disclosure under Article 6.9. It is not the result of the verification  that must be 
disclosed under Article 6.7.  
4.22.  WTO case law - such as Korea – Certain Paper and Mexico – Steel Pipes and Tubes  - 
demonstrate s that information contained in the disclosure of the verification results (whether 
through a verification report or with the disclosure of essential facts) plays an important role for a 
panel's ability to ex amine whether the investigating authority complied with Article 17.6(i) of the 
Anti-Dumping Agreement.  This may include information concerning the type of information 
verified; the authority's decision whether the information was verifiable  and whether it was 
actually verified , as well as any attendant circumstances, such as behaviour of the investigated 
firm. The case law reveals that a  failure to disclose the results of the verification, or an incomplete 
disclosure, will significantly undermine a panel's ability to examine, in a "critical and searching " 
fashion, the establishment and evaluation of the facts by the investigating authority.  In addition , 
only a proper reporting of the results of the verification visit will enable the appropriate judicial 
review within a WTO Member's domestic legal system, as required by Article 13.  
4.23.  Moreover, the EU's interpretation of Article 6.7 in this case, if accepted, would automatically 
give rise to violations of Articles 6.2 and 6.4, at least in the circumstances in whi ch the 
investigating authority chooses to disclose the verification results simultaneously with the essential 
facts. Specifically, conflating the verification "results" with the "essential facts" in the manner 
advocated by the EU would mean that the invest igating authority would not disclose all those 
verification "results" that did not find their way into the "essential facts". This would be contrary to 
Article 6.2 , which requires that all interested parties have a "full opportunity for the defence of 
their interests ", as well as Article 6.4, which requires authorities, whenever practicable, to "provide 
timely opportunities for all interested parties to see all information that is relevant to the 
presentation of their cases … that is used by the authorities  … and to prepare presentations on the 
basis of this information ". This inevitable conflict with the requirements of Articles 6.2 and 6.4 is 
yet another reason why the EU's proposed interpretative approach, and the Commission's actions 
in this investigatio n, under Article 6.7 cannot be correct.9 
4.24.  In this case , the EU argue s that the Commission provided the results of the verification 
visits as part of the disclosure of th e findings of the investigation. However, these efforts were, at 
                                               
7 Panel Report, Korea – Certain Paper , para. 7.192.  
8 Panel Report, Korea – Certain Paper , para. 7.192.  
9 See Indonesia 's Opening Statement at the first meeting of the Panel with the parties , para. 108. 
Indonesia's first written s ubmission, para s. 6.46–6.48.  WT/DS442/R/Add.1  
- C-29 - 
 
  best, cursory and canno t be considered to have met the standa rd required under Article 6.7. For 
instance, assuming that the General Disclosure document was indeed intended to be the vehicle to 
disclose the "results" of the investigation, the Commission failed to set out : 
 which s pecific types of information, documents, or issues were addressed in the 
verifications ;  
 which particular documents (e.g. sales invoices, rebate notes, etc.) were examined; and  
 what questions were asked by the Commission officials or what answers were pro vided 
by the exporters.  
4.25.  The extent of the Commission's failure to disclose the results of the verification is clearly 
visible from a reading of the contemporaneous notes taken by PT Musim Mas' counsel during the 
verifications at that exporter's premises i n Singapore, Medan, and Hamburg . These notes contain 
the kinds of basic information that are entirely absent from the Commission's purported disclosure 
of the verification results , such as who attended the verifications, what documents were reviewed, 
what questions were aske d, and what answers were given. There are several issues of critical 
importance to the Commission 's subsequent adjustment of PT Musim Mas ' export price and to 
Indonesia's related claim under Article 2.4 of the Anti -Dumping Agreement. A s the counsel notes 
demonstrate, the issues at hand were discussed during verification, but were not subsequently 
disclosed by the Commission.  
4.26.  These issues include: the close corporate, management, organizational and operational links 
between PT Musim Mas a nd ICOFS;  transfer pricing policy; the so -called "direct " export sales by 
PT Musim Mas; the manner in which ICOFS and PT Musim Mas co -operate on such export sales as 
well as for domestic sales; and the involvement of ICOF S in PT Musim Mas' sales, including  Exhibit 
PTM-18. 
4.27.  The Co mmission's conclusion that ICOF S is not the sales department of PT Musim Mas, but 
rather stands in a commission -agent relationship with PT Musim Mas is in direct contradiction with 
this information.  
4.28.  The EU states that "the Commission  underlined that during the verification visit mistakes 
and errors were corrected in agreement with the company".10 This is, of course, a wholly generic 
assertion that could be made with respect to any verification in any investigation. It hardly 
constitute s the "results" of the specific verifications  in this investigation, which involved specific 
companies , with their own features, data, and specific matters that were addressed during the 
respective verification visits. Presumably, the Commission officials,  when they report back to their 
superiors after the verification, provide more detail than simply stating that "mistakes and errors 
were corrected". To the extent that the officials' reports to their colleagues and superiors address 
whether the verificatio n team was able to verify information — to "ascertain or test the accuracy or 
correctness of, esp. by examination or by comparison of data etc." — those reports could be said 
to contain "results" of the verification.  
4.29.  In arguing that the Commission disclos ed the results of the verification visit, the EU also 
repeatedly refers to actions that occurred prior to the visits.  However, events occurring prior to a 
verification visit cannot be relevant for assessing whether the Commission subsequently 
communicated the "results " of the verification exercise.  Neither the exporter, nor a reviewing 
domestic court or WTO panel, can glean from a list of information that the investigating authority 
announces it will/may verify – but may end up not verifying – whether that information was 
successfully verified or not; whether additional information was requested; and what discussion 
around that information took place between the company and the investigating authority.  Claiming 
that results of a verification visit can be dis closed by something that occurred prior to the visit is 
comparable to arguing that the investigating authority can satisfy its disclosure obligation under 
Article 6.9 by pointing to information requests contained in a blank questionnaire response.   
                                               
10 EU's Opening Statement, para. 52.  WT/DS 442/R/Add.1  
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  4.2  Alleged  knowledge or awareness by the companies is not a workable standard for 
assessing an investigating authority's compliance with Article 6.7  
4.30.  The EU relies , as a crucial part of its argument, on alleged awareness on the part of the 
exporters of what informat ion the Commission wanted to inspect; what information it did inspect; 
and what it concluded with respect to that information; and that the investigating parties never 
protested or complained about lack of information.  This argument is flawed at a number o f levels.  
4.31.  It is virtually impossible to verify or to ascertain what the companies were or were not 
aware of at the time of verification or subsequently.  The EU would have the Panel guess, infer and 
rely entirely on the Commission 's view as to what the Comm ission thinks the investigated parties 
knew or should have known.  This is not a proper workable standard on which to conduct a 
coherent enquiry at the multilateral level. If adopted, it would leave less experienced or less 
sophisticated exporters at the me rcy of what investigating authorities think they knew or should 
have known.  This is precisely one of the reasons why the Anti -Dumping Agreement requires a 
proper disclosure of the results of the verification that can be examined by a WTO panel.  In any 
event, even if the companies were aware of what the EU claims they were aware  of, the EU has a 
duty also to the reviewing courts and WTO panels, as well as WTO Member governments, including 
Indonesia.  Compliance with its WTO obligations vis -à-vis these other M embers cannot depend on 
whether different entities – private investigated companies – were or were not aware of some fact 
that cannot be subsequently verified in domestic court or WTO proceedings.  
4.3  The results of the verification must be "made available" or  disclosed  
4.32.  In response to the Panel's question to the parties as to meaning of "make available", the EU 
quotes the Appellate Body in EC and certain member States – Large Civil Aircraft to the effect that 
to "make available" is part of the ordinary meaning of the verb "to provide" and, therefore, in the 
EU's words, the results of the verification may be made available to the relevant firms either 
"directly by sending them a report or by making the results available as part of the file or as an 
additional alt ernative through the disclosure of the outcome of the verification visit as part of the 
general obligation to disclose 'essential facts'". Indonesia agrees.11 This, of course, does not 
address the key issue at hand — the failure of the Commission to actuall y convey the required 
information about the results of the verification visit, whatever the chosen procedural conduit.  
4.4  The list of exhibits is not sufficient to satisfy Article 6.7  
4.33.  As a final issue concerning Indonesia's claim under Article 6.7, Indonesia addresses the list 
of exhibits. In its questions following the first meeting, the Panel asked the EU to provide the list of 
exhibits referred to in the first substantive meeting and asked Indonesia whether PT Musim Mas 
received this document. In its answer s to questions, the EU provided certain lists of the exhibits 
collected by the Commission at the verifications as Exhibit EU -14.  
4.34.  Indonesia notes that the EU's exhibit is an undated and unsigned document that contains 
only a title of each exhibit without a ny indication of the content or purpose of each exhibit. 
Indonesia understands that PT Musim Mas was not provided with or asked to agree as to the 
content of these lists, although, however, PT Musim Mas agrees that these lists reflect the 
documents collect ed by the verification teams. Indonesia disagrees, however, that these lists of 
exhibits, either separately or read in conjunction with the disclosure documents, satisfy the 
requirements of Article 6.7.  
4.35.  First, the list of documents does not explain what t opics were discussed at the verification 
visit or how the listed documents served to verify those topics. For example, as noted above, the 
EU asserts that the results of the verification were contained in the statement that "mistakes and 
errors were correc ted in agreement with the company". However, the lists of exhibits, by 
themselves, shed no light whatsoever on what mistakes and errors were corrected or why. There 
is no indication that the unspecified "mistakes and errors" had anything to do with the con tent of 
the documents collected.  
                                               
11 See Indonesia's response to Panel question 27, paras. 1.116 -1.122.  WT/DS442/R/Add.1  
- C-31 - 
 
  4.36.  Second, the EU asserts that "the relevant results of the discussion reflected [in the counsel's 
notes submitted by Indonesia] are all included in the list of exhibits". The EU then argues that the 
relevant "result" of the verification is simply that the agreements were provided and that this is 
reflected fully in the list of exhibits. However, if the agreements were provided and reviewed at the 
verification "to provide further information on the relationship between PT Musi m Mas and 
ICOF-S", the result of the verification must include some discussion of what the agreements 
actually said about the relationship between the two companies, whether the Commission team 
had any further questions about the companies' explanation of the relationship, and whether the 
Commission team was satisfied with the explanations provided by the company. A mere reference 
to the documents provided contains no information as to whether the Commission had to 
"ascertain[ed] or test[ed] the accuracy or  correctness of [the information and explanations 
provided by the company], by examination or by comparison of data etc" on this point.  
4.37.  In addition, the list of documents does not indicate whether there were other topics 
addressed during the visit for whic h no additional documents were collected.  
4.38.  Moreover, the "results" of the verification must include also the purpose  for which a 
particular document was provided or particular information requested.12 The EU's list of documents 
does not specify this purpose.  It is not obvious, from the face of the EU's list, what the purpose of 
providing each document was. For instance, a reader of the list would have had to be physically 
present at the verification to know the purpose for which the S&P Agreement was submitte d. 
Moreover, the S&P Agreement was subsequently relied upon by the Commission for multiple 
purposes. Hence, a mere listing of the evidence as in the EU's list is entirely insufficient adequately 
to disclose the "results" of the verification visit.  
4.39.  Similarl y, the EU notes that the counsel's notes refer to the Commission team examining 
the role of ICOFS in domestic sales in Indonesia and that PT Musim Mas provided "an email as 
alleged evidence that ICOFS is also involved in providing services for domestic sal es of PTMM". The 
EU states that "the provision of this email was a result of the verification". Indonesia disagrees. 
Again, the mere provision of this email is only at most only a small part of the result of the 
verification. To the extent that the Commiss ion was verifying the role of ICOFS in domestic sales, 
the result of the verification is whether the Commission was satisfied that the corroborating 
evidence provided by the company was consistent with the company's explanations. To the extent 
that it was not, the Commission should have requested additional information or explained how 
the explanations provided by the company were not satisfactory.  
4.40.  Finally, Indonesia rejects the EU's argument that PT Musim Mas should have urged the 
Commission to provide it  with more detailed information about the results of the verification. 
Indonesia notes that nothing in Article 6.7 imposes on the investigated producers/exporters an 
obligation to request further information on the results of the verification from the inve stigating 
authority. Article 6.7 imposes a mandatory obligation on the investigating authority to make the 
results of the verification available. It cannot be a defence to a violation of this requirement that 
the producer/exporter did not push the investig ating authority to comply.  
4.41.  To conclude, the EU has failed to show how the Commission disclosed the actual results of 
the verification in this case. The stand -alone obligation of Article 6.7 cannot be satisfied by a grab 
bag of generic and separate referen ces sprinkled throughout the essential facts disclosures or by 
reference to lists of exhibits that contain nothing more than imprecise references to the documents 
examined during the verifications.  
4.5  Conclusion  
4.42.  For these reasons, Indonesia respectfully reque sts that the Panel find that the EU has acted 
inconsistently with Article 6.7 by failing to make the results of the verifications available or 
otherwise provide disclosure thereof as required under Article 6.7.  
                                               
12 See Indonesia's first written submis sion, para. 6.42.  WT/DS 442/R/Add.1  
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  5  CONCLUSION AND REQUE ST FOR FINDINGS  
5.1.  For all o f the above reasons, Indonesia reiterates its request to the Panel that the Panel find 
that the European Union :  
 Acted inconsistently with Articles 2.3 and 2.4 of the Anti -Dumping Agreement, by 
making an improper deduction for a factor that did not affect price comparability;  
 Acted inconsistently with Articles 3.1 and 3.5 of the Anti -Dumping Agreement, by failing 
to conduct a proper non -attribution analysis with respect to the factors 
"financial/economic crisis" and "issues related to the European Union's d omestic 
industry's access to raw materials"; and  
 Acted inconsistently with Article 6.7 of the Anti -Dumping Agreement, by failing to 
disclose to either of the investigated Indonesian exporters the results of the verification 
visit. 
5.2.  Indonesia once again thanks the Panel and the Secretariat team for their hard work and 
dedication to this dispute.  
_______________  
 
 
 WT/DS442/R/Add.1  
- D-1 - 
 
  ANNEX D  
ARGUMENTS OF THIRD P ARTIES  
Contents  Page  
Annex D -1 Integrated executive summary of the arguments of Turkey  D-2 
Annex D-2 Integrated exec utive summary of the arguments of the United States  D-5 
 
 WT/DS442/R/Add.1  
- D-2 - 
 
  ANNEX D -1 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS OF TURKEY  
I. INTRODUCTION  
1. The Republic of Turkey (hereinafter referred to as "Turkey ") welcomes this opportunity to be 
heard and to prese nt its views as a third party in this case. Turkey 's objective to make this third 
party submission is to contribute to the correct and consistent interpretation of the Agreement on 
the Implementation of Article VI of GATT 1994 (hereinafter referred to as "ADA" or 
"Anti-Dumping  Agreement "). 
 
2. Turkey will not elaborate on the particular facts presented by the Parties, rather, underlining 
her systematic interest, Turkey would like to limit her third party submission to the discussion on 
the rights and obliga tion of an investigating authority within the legal context of Article 2.3 and 2.4 
of the ADA.  
 
II. LEGAL INTERPRETATION  OF ARTICLE 2.3 AND 2.4 OF THE 
ANTI -DUMPING  AGREEMENT  
3. At the outset Turkey would like to underline that the structure of the "fair co mparison " 
between normal value and export price of the product under consideration is as significant as the 
methodology used by the investigating authority to calculate the normal value or export price 
itself. In this vein, the components of the fair compa rison do have a potential to alter the outcome 
of the dumping margin calculation profoundly. Therefore, accurate interpretation of the Article 2.3 
and 2.4 of the ADA is highly important in this regard.  
 
4. Article 2.3 and 2 .4 of the ADA reads as follows:  
 
2.3 In cases where there is no export price or where it appears to the authorities 
concerned that the export price is unreliable because of association or a compensatory 
arrangement between the exporter and the importer or a third party, the export price m ay 
be constructed on the basis of the price at which the imported products are first resold to 
an independent buyer, or if the products are not resold to an independent buyer, or not 
resold in the condition as imported, on such reasonable basis as the auth orities may 
determine.  
2.4 A fair comparison shall be made between the export price and the normal value. This 
comparison shall be made at the same level of trade, normally at the ex -factory level, and 
in respect of sales made at as nearly as possible the same time. Due allowance shall be 
made in each case, on its merits, for differences which affect price comparability, including 
differences in conditions and terms of sale, taxation, levels of trade, quantities, physical 
characteristics, and any other diff erences which are also demonstrated to affect price 
comparability. In the cases referred to in paragraph 3, allowances for costs, including 
duties and taxes, incurred between importation and resale, and for profits accruing, should 
also be made. If in thes e cases price comparability has been affected, the authorities shall 
establish the normal value at a level of trade equivalent to the level of trade of the 
constructed export price, or shall make due allowance as warranted under this paragraph. 
The authori ties shall indicate to the parties in question what information is necessary to 
ensure a fair comparison and shall not impose an unreasonable burden of proof on those 
parties.  
5. Turkey understands that the existence of two conditions is imperative to reso rt to 
constructed export price within Article 2.3 of the ADA. First, the presence of an association or 
compensatory arrangement between exporter and importer or a third party and second, the 
outcome of unreliable export prices due to this association or co mpensatory arrangement. Under 
this reading, the mere existence of an association or compensatory arrangement is not enough to 
conclude that the export prices between the exporter and importer or any other third party is 
unreliable. Equally, the fact that t he provisions of the arrangement do not point out any kind of 
distortions of export price should not overshadow the possibility that the export prices can be WT/DS442/R/Add.1  
- D-3 - 
 
  unreliable due to de-facto reasons. In light of these explanations, the investigating authority ma y 
undertake both a de-jure and de-facto examination to determine whether this arrangement 
warrants the us e of constructed export prices.  
 
6. The word "appear ", however, indicates that the investigating authority is not under a strict 
obligation to reach an  undisputable conclusion that the distortion of export prices is a direct 
outcome of the arrangement between the exporter and importer or a third party. Turkey 
understands that the drafters tended to keep the wording flexible considering the often loose 
nature of the arrangements between exporter and importer or trader. Nevertheless, Turkey 
understands that the investigating authority is still burdened to present an explanation on why the 
arrangement appeared to render the export prices unreliable.  
 
7. The reference made in the second sentence of Article 2.4 requires the investigating authority 
to consider allowances for costs including but not limited to duties, taxes (incurred between 
importation and resale) and profits accrued by the trader and importer o f the product under 
consideration. Similar to the comparison between the normal value and the ordinary export price, 
the investigating authority is obliged to make due allowances or to equal the level of trade if the 
price comparability is affected.  
 
8. As rightly underlined by the EU1, the investigating authority is obliged to evaluate and, if 
applicable, alter the elements of the normal value and (constructed) export price if the differences 
in components in these two data sets adversely affect the compar ability of the normal value and 
export price.  
 
9. In that context, as stressed in the panel report of US -Sheet/Plate form Korea "…[t]he 
requirement to make due allowances for differences that affect price comparability is intended to 
neutralize differences  in a transaction that an exporter could be expected to have reflected in his 
pricing ".2Thus, the analysis required in Article 2.4 of the ADA di splays a fact based and 
case-by-case nature taking into consideration that the elements of due allowance may dif fer based 
on the merits of each case.3 
 
10. As matter of legal interpretation , the interested party claiming that the legal discipline in 
Article 2.4 was violated by the investigating authority has to pass through three steps to bring a 
viable assertion. I t has to show that (1) there was a difference between the elements of normal 
value an d export price which (2) affected  the price comparability between these data (3) that was 
not accepted by the investigating authority as an element of due allowance.4 Turkey understands 
that the word "demonstrate " at the end of the first sentence of Article 2.4 of the ADA introduces a 
positive obligation vis-à-vis the interested parties requesting modification. The interested parties 
must bring their requests of fair compar ison to the attention of the investigating authority by 
indicating the elements to be considered and to what extent these elements influence the 
comparability of the normal value and export pric e. 
 
11. Turkey considers the elements listed in Article 2.4 to  illustrate, inter alia , the possible 
examples of due allowance (conditions and terms of sale, taxation, levels of trade, quantities, 
physical characteristics) are equally subject to the above -mentioned obligation incumbent on the 
interested pa rties reques ting due allowance.  
 
12. Turkey is in the same line with the case law that the investigating authority has discretion to 
reject the request of due allowance if it concludes that the difference is not affecting price 
comparability or such an adjustment lack s merits.5 Furthermore , she equally agrees with the case 
law that the investigating authority cannot be legally compelled to conduct an ex-officio inquiry to 
identify non -requested elements of due allowance6. 
 
                                               
1 EU's first written submission, para.  59 and 60 . 
2 Panel Report, US -Sheet/Plate from Korea, para.  6.77. 
3 Panel Report, Egypt -Rebar, para.  7.352; Panel Report, EC -Pipe Fittings, para.  7.138 . 
4 Panel Report, Korea -Certain Sheet, para.  7.138. 
5 Panel Report, EC -Fasteners, para.  7.298; Appellate Body Report, EC -Fastener, para.  488 and 528; 
Panel  Report, EC -Tube or Pipe Fittings, para.  7.158 . 
6 Panel Report, EC -Fastener, para.  7.298; Appellate Body Report, EC -Fastener, para.  517; Panel Report , 
China -HP-SSST, para.  7.77. WT/DS442/R/Add.1  
- D-4 - 
 
  13. Finally as underlined in the Panel Report of Egypt -Rebar the dialogue between the interested 
parties and the investigating authority concerning the context of Article 2.4 is central to ensure 
that the dumping margin is calculated with necessary components compared in a fair manner.7 
 
III. CONCLUSI ON  
14. With these comments, Turkey expects to contribute to the legal debate of the parties in this 
case, and would like to express again its appreciation for this opportunity to share its points of 
view on this relevant debate, regarding the interpretati on of the ADA Agreement.  
                                               
7 Panel report, Egypt -Rebar, para.  7.352 . WT/DS442/R/Add.1  
- D-5 - 
 
  ANNEX D -2 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE UNITED STATES  
I. U.S. VIEWS ON THE EUROPEAN UNION 'S PRELIMINARY RULING REQUEST  
 
1. While sympathetic to certain practical concerns expressed by the European Union, th e 
United States respectfully disagrees with the understanding of Article 12.12 that underlies the 
European Union's PRR. The United States submits that the European Union wrongly interprets the 
relevant terms of Article 12.12, including its interpretation o f "panel, " and what it means in the 
context of this provision for a panel to "suspend " its "work. " 
 
2. Pursuant to DSU Article 11, the Panel's "function " is to assist the DSB by making an 
objective assessment of the matter before it, including the applicab ility of and conformity with the 
relevant covered agreements. DSU Article 3.2 establishes that such an assessment of the existing 
provisions of those covered agreements shall be made in accordance with customary rules of 
interpretation of public internatio nal law.  
 
3. The ordinary meaning of "panel " (or "the panel ") is not in dispute by either party. The 
United States agrees with the European Union that there is no express limitation imposed in the 
text of the DSU on the meaning of the term "panel, " and tha t in some instances, "panel " may refer 
to a panel that has been composed and in others, it may refer to a panel that has been established 
but not composed. The United States also agrees with Indonesia, however, that it is precisely 
because "panel " refers t o both circumstances in various places in the DSU that interpretation of 
"panel " as used in Article 12.12 does not end with a facial inquiry into the ordinary meaning of the 
term.  
 
4. The last sentence of Article 12.12 describes a circumstance in which the  work of the panel 
"has been suspended for more than 12 months. " The first sentence sets out how such a 
suspension may arise: "at the request of the complaining party for a period not to exceed 12 
months. " The request is made to, and would be acted upon in  its discretion, by the panel ( "[t]he 
panel may suspend its work "). The second sentence confirms the "suspension " is one the panel 
decides upon at the complaining party's request ( "[i]n the event of such a suspension "). Thus, the 
circumstance in Article 12 .12 arises only when there is a panel to which the complaining party may 
direct its "request, " and only if the panel has decided to exercise its discretion to accede to that 
request. Neither can occur before a panel has been composed.  
 
5. The context of Ar ticle 12 as a whole also is instructive. The articles of the DSU proceed 
sequentially from the initial phases of the dispute settlement process to the final stages of that 
process. Depending on the stage of the process and the content of the relevant rules , the term 
"panel " in the various provisions may be interpreted differently.  
 
6. Article 6, for example, governs the "establishment of panels, " including the timing of their 
establishment and the method by which their establishment must be requested. As a matter of 
both timing and logic, these actions necessarily would precede the composition of a panel and 
therefore would refer to an uncomposed panel. Article 7, on the other hand, may refer to both 
composed and uncomposed panels when it describes the "terms of reference of panels. " For 
example, Article 7.1 states that "[p]anels shall have the following terms of reference unless the 
parties to the dispute agree otherwise within 20 days from the establishment of the panel. " 
Therefore, whether or not a panel h as been composed, within 20 days of establishment the terms 
of reference are determined and govern thereafter the scope of the dispute for purposes of any 
panel that has been "established, " including one that has subsequently been composed. 
Article  7.2, ho wever, provides that "[p]anels shall address the relevant provisions in any covered 
agreement or agreements cited by the parties to the dispute. " By requiring panels to "address " 
certain provisions of the covered agreements, the use of the term "panel " in Article 7.2 necessarily 
refers to a panel that has been composed, for the obvious reason that a panel that has been 
established only cannot "address " anything.  
 
7. With respect to the interpretation of "panel " in Article 12 as well, both the stage of the 
process and the specific rules it provides assist in interpreting the terms contained in Article 12.12.  WT/DS442/R/Add.1  
- D-6 - 
 
  Article 8, for example, which deals with panel composition, precedes Article 12, which deals with 
panel procedures. Therefore, given where it is situate d in the DSU, Article 12 contemplates that, in 
the normal course, a panel already would have been composed when the "panel procedures " would 
apply. For example, Article 12.1 establishes that a panel shall follow the Working Procedures in 
Appendix 3 unless the panel decides otherwise after consulting the parties; a panel could neither 
"follow " those Procedures nor decide otherwise nor consult if it has not been composed. 
Article  12.3 even more explicitly refers to "panelists " when it describes a process and schedule for 
fixing the timetable during the panel process. Logically, there would be no "panelists " fixing the 
timetable if the panel had not yet been composed.  
 
8. Based on the above, the "work" of the panel in the context of Article 12.12 refers to the 
examination by the panel, once composed, of the matter referred to it by the DSB under the 
procedures established in Article 12. Therefore, Indonesia's request to the Secretariat  to suspend a 
meeting to compose  the panel would not constitute a request to the panel that it "suspend its 
work" pursuant to Article 12.12. Nothing in the text of the DSU, or in the email correspondence 
from Indonesia to the Secretariat, supports the European Union's position to the contrary.  
 
9. The European Union also raises a co ntextual argument regarding the interpretation of the 
term "panel " in Article 12.12 based on its relationship with Article 12.9. To bolster its argument 
that reference to the "panel " in Article 12.12 means only a panel that has been established, not 
necess arily composed, the European Union notes that Article 12.9 (governing timeframes to 
submit the panel report) and 12.12 both refer to the "establishment, " not composition, of a panel. 
Because "composition " is used elsewhere in the DSU, the European Union ar gues, the use of 
"establishment " alone is significant.  
 
10. The United States agrees that use of the term "establishment " in Article 12.12 is 
meaningful. Because a panel is established by the DSB (Article 6.1) to assist the DSB in 
discharging its responsi bilities to make recommendations (Articles 7.1, 11, 19.1) through issuance 
of findings in a written report (Article 15), to terminate a panel's authority to undertake that work, 
the DSU removes the legal basis for the panel's establishment. That this legal  authority relates to 
whether a panel is established does not imply that a panel that has not been composed may 
undertake any "work, " much less "suspend " that work.   
 
11. Second, with respect to the contention that the time limit in Article 12.9 would be rendered 
meaningless were the twelve month limitation in 12.12 read to apply only to composed panels, the 
United States observes that the language regarding the time limit imposed in Article 12.9 is 
precatory, not binding, providing that in no case "should " the proceedings exceed nine months. 
Therefore, the premise for the European Union's arguments in this respect – that in no case may 
the proceedings, including any 12 month suspension, exceed 21 months – fails. It is simply not the 
case that such a mandat ory time limit is imposed by the DSU on panel proceedings.  
 
12. For these reasons, the situation described in the last sentence in DSU Article 12.12 arises 
only once a panel has been composed, the complaining party makes a request to the panel to 
suspend i ts work, and the panel decides to exercise its discretion to accept that request and 
suspends its work accordingly.  
 
13. The European Union raises several policy concerns which it considers support its 
interpretation of Article 12.12, including considerati ons relating to the reputational consequences 
of unresolved proceedings for a responding Member and the limited resources both Members and 
the Secretariat have to dedicate to a given dispute. While such policy considerations cannot lead to 
a different inte rpretation and application of DSU Article 12.12, the United States nonetheless 
considers that the proper interpretation and application of Article 12.12 lead to a desirable policy 
outcome.  
 
14. There does not seem to be any serious cause for concern about  a "reputational stain " 
somehow adhering to a responding Member as a result of a dispute brought before the WTO. If 
Members have not, through consultations or other means, managed to resolve a trade issue 
between them, parties regularly request the establi shment of panels in an effort to achieve formal 
resolution of the dispute. Not all of these disputes proceed to the circulation of a final panel report. 
Often, disputes are successfully resolved only after the establishment of a panel. Therefore, the 
Europ ean Union's suggestion that in all cases it would be in a responding party's interest to WT/DS442/R/Add.1  
- D-7 - 
 
  expedite the panel process so that accusations against it can be resolved does not reflect the 
nature of dispute settlement under the DSU.  
 
15. Regarding resource cons traints and the burden imposed on Members and the Secretariat to 
devote resources indefinitely to a dispute, the United States understands the dilemma to which the 
European Union refers. However, we do not consider that dissolving the panel process would 
address these concerns. To the contrary, the likelihood that the same issue might be raised 
multiple times as formally "new" disputes would seem to risk exacerbating the strains on limited 
WTO resources rather than easing them. And should the European Union  believe it is prejudiced by 
the length of time taken to compose a panel, the United States respectfully suggests that an 
adequate remedy may be found under the DSU. Pursuant to Article 12.4, the European Union 
could explain those circumstances to the Pane l and, in light of those circumstances, the Panel must 
provide the parties with sufficient time to prepare their written submissions to the panel.  
 
16. Finally, the United States considers that reading into Article 12.12 a limitation on the ability 
of a co mplaining party to pause in its use of dispute settlement procedures would undermine the 
aim of the dispute settlement system to secure a positive solution to the dispute (Article 3.7). 
Where a party may be actively engaged in trying to resolve a dispute t hrough alternative means, 
even after panel establishment, such action would be consistent with the preference expressed 
under the DSU. Indeed, under DSU Article 11, a panel is charged with giving the parties an 
adequate opportunity to develop a mutually sa tisfactory solution. The understanding of 
Article  12.12 proposed in the PRR would rather appear to limit such opportunities.  
 
II. INDONESIA'S CLAIMS REGARDING ARTICLE 2 OF THE AD AGREEMENT  
 
17. Indonesia claims that the European Union acted inconsistently with Article 2.4 of the 
AD Agreement by failing to make allowances for differences affecting price comparability – namely, 
by subtracting sales commissions from the constructed export price for one of the participating 
producers.  
 
18. Article 2.4 of the AD  Agreement requires investigating authorities to conduct a comparison 
between the export price and normal value. As Indonesia correctly observes, such comparison "is 
typically made at the ex -factory level…a practice envisaged explicitly by Article 2.4. " It appears 
that both the European Union and Indonesia share the U.S. view that the essential requirement for 
any adjustment under Article 2.4 is that a factor must affect price comparability. Thus, under 
Article 2.4, making a "fair comparison " requires a con sideration of how differences in conditions 
and terms of sale, taxation, levels of trade, quantities, and physical characteristics impact price 
comparability.  
 
19. In this respect, the Appellate Body has stated that under Article 2.4, the obligation to en sure 
fair comparison lies on the investigating authorities, and not the exporters. Although the 
investigating authority has the burden to ensure a fair comparison, the interested parties also 
have the burden to substantiate any requested adjustments for di fferences that affect price 
comparability. As the Appellate Body has found, an investigating authority does not have to accept 
a request for an adjustment that is unsubstantiated.  
 
20. Indonesia and the European Union appear to agree that a sales commissio n can affect price 
comparability within the meaning of Article 2.4 because it may reflect a difference in conditions 
and terms of sale. However, the parties disagree on whether it is necessary to determine that a 
single economic entity ( "SEE") does not exi st in order to make a downward adjustment to export 
price for sales commissions.  
 
21. While the United States agrees with the European Union that an analysis of whether an SEE 
exists is not required under Article 2.4, it may sometimes be relevant to consid er the relationship 
between two entities as part of an evaluation of price comparability. In this respect, it would not 
be inappropriate to consider the various factors discussed by the panel in Korea – Certain Paper  
and referenced by the Appellate Body in  EC-Fasteners (China) . While we recognize that, as stated 
by the European Union, the analyses in those cases arose in a different context – i.e., for purposes 
of determining whether related companies should be assigned a single dumping margin – these 
factors may nonetheless be relevant to determining what, if any, adjustment should be made 
under Article 2.4.  WT/DS442/R/Add.1  
- D-8 - 
 
  22. In reviewing the investigating authority's determination, the Panel may wish to consider 
whether the evidence and explanation provided – regardles s of the specific methodology applied – 
supports a finding that the sales entity did not form part of a single entity with PTMM and that, 
therefore, an adjustment was necessary to ensure a fair comparison under Article 2.4. If the Panel 
concludes that the facts support a finding that the producer and the trading company are not 
affiliated, there is no dispute that an adjustment for a commission paid to the trader was 
appropriate.  
 
23. Finally, the United States considers that it is permissible for an invest igating authority to 
make a price adjustment to address circumstances of sale, if the facts on the record support it. An 
investigating authority must ensure price comparability regardless of whether affiliated or 
non-affiliated parties are involved. As exp lained earlier, a comparison between normal value and 
export price is usually made at the ex factory level. If, for example, the producer sells in the home 
market directly to its customers, but sells through a trading company (affiliated or not) to its 
export market, the differences in the circumstances of sale may warrant an adjustment to ensure 
that comparison is made at the ex -factory level in both markets.  
 
24. The views expressed by the United States in relation to Indonesia's claims under Article 2.4  
are relevant to the substance of Indonesia's Article 2.3 claim. The United States agrees with the 
European Union that Indonesia's Article 2.3 claim is purely a consequential claim.  
 
III. INDONESIA'S CLAIMS REGARDING ARTICLE 3 OF THE AD AGREEMENT  
 
25. The third sentence of Article 3.5 provides that, in addition to examining the effects of the 
dumped imports, an authority must examine other known factors which at the same time are 
injuring the domestic industry. As the Appellate Body has found, if a known fa ctor other than 
dumped imports is a cause of injury, the third sentence requires the authority to engage in a non -
attribution analysis to ensure that the effects of that other factor are not attributed to the dumped 
imports.  
 
26. The Appellate Body has fu rther stated that the AD Agreement does not specify the particular 
methods and approaches an authority may use to conduct a non -attribution analysis. In this 
regard, the United States disagrees with Indonesia that only a particular kind of analysis – e.g., 
quantitative analysis – meets the requirements of Article 3.5. The question of whether an 
investigating authority's analysis is consistent with Article 3 should turn on whether the authority 
has in fact evaluated these factors and whether its evaluation i s supported by positive evidence 
and reflects an objective examination, as required by Article 3.1.  
 
27. Article 3.5 further requires that "[t]he demonstration of a causal relationship between the 
dumped imports and the injury to the domestic industry shal l be based on an examination of all 
relevant evidence before the authorities. " Hence, the authorities are obliged to consider all 
relevant evidence in the record. While the United States does not take a view on the weight the 
European Union gave to certain  evidence, the European Union must demonstrate that it examined 
these factors in its analysis. Whether or not, as Indonesia claims, the European Union was 
required specifically to consider these factors under the third sentence of Article 3.5 would depend 
on whether these factors were known to the investigating authority and whether they were in fact 
contributing at the same time as the imports to any difficulties experienced by the domestic 
industry.  
 
28. Thus, the panel must determine if the investigatin g authority demonstrated that it examined 
other "known factors " within the meaning of Article 3.5 of the AD Agreement, and based its 
causation analysis on an examination of all relevant evidence.  
 
IV. INDONESIA'S CLAIM UNDER ARTICLE 6 OF THE AD AGREEMENT  
 
29. Article 6.7 of the AD agreement requires investigating authorities conducting verification to 
"make the results of any such investigations available, or shall provide disclosure thereof pursuant 
to paragraph 9 to the firms which they pertain and may ma ke such results available to the 
applicants. " Article 6.9 in turn provides that an investigating authority "shall, before a final 
determination is made, inform all interested parties of the essential facts under consideration 
which form the basis for the d ecision whether to apply definitive measures. "  The United States 
agrees with both Indonesia and the European Union that under its ordinary meaning, the term WT/DS442/R/Add.1  
- D-9 - 
 
  "results " in Article 6.7 refers to "outcomes " of the verification process. The United States agree s 
with the European Union that Articles 6.7, 6.8, and 6.9 form a continuum of obligations under 
Article 6, and that each obligation is grounded in the context of the specific provision.  
 
30. While the United States does not believe that trivial or immater ial aspects of what occurred 
at the verification must be included in the report, at a minimum the report should include 
discussion of information that was verified, not verified, or corrected with respect to essential facts 
referenced in Article 6.9. The U nited States agrees with the European Union that the text of 
Article  6.7 contains no requirements on form or format. Articles 6.7 and 6.9 do require disclosure 
of verification "results " and the "essential facts under consideration. " To the extent the Europ ean 
Union characterizes the lack of disclosure of results and essential facts as a question of form, not 
substance, the United States disagrees with that characterization. For example (without opining on 
the factual issues presented in this dispute), the U nited States believes that the term "essential 
facts, " as defined in Article 6.9, relates necessarily to the determination of normal value and 
export prices, as well as  to the data underlying those determinations.  Accordingly, the 
United  States believes t hat information verified or corrected at verification relating to these 
"essential facts " should be disclosed pursuant to Article 6.7 and Article 6.9.  
 
31. These provisions of the AD Agreement promote transparency and procedural fairness by 
ensuring that "disclosure…take[s] place in sufficient time for the parties to defend their interests. " 
Failure to provide such disclosure could prevent an interested party from effectively defending its 
interests in the proceeding, and potentially, before national courts . In this respect, the 
United  States agrees with the panel in Korea – Certain Paper , which noted that disclosing both 
verified and unverified information could "be relevant to the presentation of the interested parties' 
cases. " 
 
32. Similarly, a basic tene t of the AD Agreement, as reflected in Article 6, is that the 
investigating authority "must provide timely opportunities for all interested parties to see all 
information … relevant to the presentation of their cases that is not confidential as defined in 
paragraph 5, and that is used by the authorities in an anti -dumping investigation, " and "shall, on 
request, provide opportunities for all interested parties to meet those parties with adverse 
interests…[and these opportunities] must take account of the nee d for confidentiality. " Articles 6.4 
and 6.2 have specific obligations which may apply to the disclosure of verification results. 
Therefore, bearing in mind the obligations of Article 6.5, the United States agrees with Indonesia 
that failing to disclose in formation under Article 6.7, particularly as it relates to the "essential 
facts" of an investigation under Article 6.9, would deprive parties of the full opportunity to defend 
their interests.  
 
 
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