COMMISSION IMPLEMENTING REGULATION (EU) 2019/244

of 11 February 2019

imposing a definitive countervailing duty on imports of biodiesel originating in Argentina

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 15 thereof,

Whereas:

1. PROCEDURE

1.1. Initiation

(1) On 31 January 2018, the European Commission (‘the Commission’) initiated an anti-subsidy investigation with regard to imports into the European Union of biodiesel originating in Argentina (‘the country concerned’) on the basis of Article 10 of Regulation (EU) 2016/1037. It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 18 December 2017 by the European Biodiesel Board (‘EBB’ or ‘the complainant’) on behalf of producers. The complainant represents around 70 % of the total Union production of biodiesel. The complaint contained evidence of subsidisation and of resulting threat of injury that was sufficient to justify the initiation of the investigation.

(3) Prior to the initiation of the anti-subsidy investigation, the Commission notified the Government of Argentina (‘GOA’) (3) that it had received a properly documented complaint, and invited the GOA for consultations in accordance with Article 10(7) of the basic Regulation. The GOA accepted the offer for consultations, which were held on 24 January 2018. During the consultations as well as subsequent exchanges with the GOA, due note was taken of the comments submitted by the GOA. However, no mutually agreed solution could be reached.

(4) Following the Notice of Initiation, the Commission received comments regarding the initiation from the Argentinian Chamber of Biofuels (Cámara Argentina de Biocombustibles, ‘CARBIO’). In their comments, CARBIO stated that the Argentinian biodiesel industry is not subsidised, and that the imports of Argentinian biodiesel pose no threat of material injury to the Union industry.

(5) Concerning the evidence of subsidisation at initiation stage, the Commission made the open version of the complaint available and provided its analysis on the evidence available at that stage in the memorandum on sufficiency of evidence, on the basis of which the investigation was initiated.

(6) Concerning the evidence on threat of injury, CARBIO argued that the complainant failed to provide sufficient evidence concerning the criteria in Article 8(8) of the basic Regulation, in particular the significant rise in imports, the freely disposable capacity in Argentina and the price effect of Argentinian imports. The argumentation of CARBIO was, however, largely based on overly pessimistic estimations of the development of Argentinian exports in 2018, which CARBIO estimated at 480 000 tonnes for the full year 2018 to all countries of the world, without substantiating that low figure which was 70 % below the corresponding figure for 2016 and 2017 (4). At such a low level, Argentinian imports would allegedly not pose a threat of injury to the Union industry. The Commission considered the evidence provided in the complaint (based on actual imports until August 2017 and estimations for 2018 based on production figures in the GAIN report (5)) that indicated much higher estimated level of imports. As regards production capacity, CARBIO confirmed that the production capacity in Argentina indeed significantly exceeds the domestic consumption by more than 3 million tonnes.

(7) Consequently, those claims were rejected.

1.2. Registration of imports

(8) On 21 February 2018, the complainant submitted a request for registration of imports of biodiesel originating in Argentina under Article 24(5) of the basic Regulation. On 24 May 2018, the Commission published Implementing Regulation (EU) 2018/756 (‘the registration Regulation’) (6) making imports of biodiesel originating in Argentina subject to registration as of 25 May 2018 onwards.

(9) Responding to the request for registration, interested parties submitted comments that the Commission addressed in the registration Regulation. The Commission had at its disposal sufficient evidence justifying the need to register imports.

(10) Under Article 24(5) of the basic Regulation, imports of the product concerned are subject to registration for the purpose of ensuring that should the investigation result in findings leading to the imposition of countervailing duties, those duties can, if the necessary conditions are fulfilled, be levied retroactively on the registered imports in accordance with the applicable legal provisions.

(11) Following the publication of the registration Regulation, the Commission received comments in this regard from the GOA and CARBIO.

(12) The comments of the GOA concerned the allegation that the Commission failed to demonstrate sufficient evidence of subsidisation and to demonstrate that injury to the Union industry was caused by massive imports of Argentinian biodiesel in a relatively short period.

(13) As explained in recitals (5) to (7), the Commission considered that it had sufficient evidence of subsidisation and threat of injury at the time of initiation. In addition, in recital (14) of the registration Regulation, the Commission provided evidence of a massive increase of Argentinian imports of biodiesel in absolute terms and in terms of market share in the period between August 2017 and March 2018, which could show the existence of material injury towards the end of the investigation period. Consequently, those allegations were rejected.

1.3. Investigation period and period considered

(14) The investigation of subsidisation and injury covered the period from 1 January 2017 to 31 December 2017 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2014 to the end of the investigation period (‘the period considered’).

1.4. Interested parties

(15) In the Notice of Initiation, interested parties were invited to contact the Commission in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers and the GOA, the known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(16) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

1.5. Sampling

(17) In its Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 27 of the basic Regulation.

1.5.1. Sampling of Union producers

(18) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the highest representative production, which could reasonably be investigated within the time available.

(19) The provisional sample consisted of three Union producers and represented a broad geographical spread. The sampled Union producers accounted for 19 % of the total production volume of the Union industry. The Commission invited interested parties to comment on the provisional sample.

(20) The Commission received substantiated comments on the provisional sample from CARBIO, Greenergy Fuels Limited and from the complainant. Recitals (310) to (313) provide a more detailed analysis of those comments.

(21) As a result, the Commission replaced one of the Union producers in the provisional sample with another. The final sample consisted of three Union producers located in three different Member States. It accounted for over 23 % of Union production.

1.5.2. Sampling of importers

(22) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

(23) Two unrelated importers provided the requested information and agreed to be included in the sample. In view of the low number of unrelated importers, the Commission decided that sampling was not necessary.

1.5.3. Sampling of exporting producers in Argentina

(24) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all exporting producers in Argentina to provide the information specified in the Notice of Initiation. In addition, the Commission asked the authorities of Argentina to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(25) Nine producers in the country concerned provided the requested information and agreed to be included in the sample. The Commission excluded one company from the sample, as it did not export biodiesel to the Union in the investigation period. The remaining eight companies or groups of companies accounted for 100 % of exports to the Union during the investigation period. In accordance with Article 27(1)(b) of the basic Regulation, the Commission selected the following sample of three groups of exporting producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available: — Group Renova (Molinos Agro SA, Oleaginosa Moreno Hermanos SACIFIyA, Vicentin SAIC), Argentina, — Group T6 (Aceitera General Deheza SA, Bunge Argentina SA), Argentina, — Louis Dreyfus Commodities (‘LDC’) Argentina SA, Argentina.

(26) The sampled groups of exporting producers represented 84 % of the total exports to the Union of the product concerned during the investigation period.

(27) In accordance with Article 27(2) of the basic Regulation, the Commission consulted all known exporting producers concerned and the GOA on the selection of the sample. The Commission received no comments on the proposed sample.

1.5.4. Individual examination

(28) No exporting producer, which was not included in the sample, requested individual examination under Article 27(3) of the basic Regulation.

1.6. Questionnaire replies and verification visits

(29) The Commission sent questionnaires to the GOA, to the three sampled groups of exporting producers, to the three sampled Union producers, and to the two unrelated importers that had come forward.

(30) The Commission received questionnaire replies from the GOA, all sampled groups of exporting producers, all sampled Union producers but only one of the two cooperating unrelated importers.

(31) The Commission sought and verified all the information deemed necessary for a determination of subsidy, resulting threat of injury and Union interest. A verification visit took place at the premises of the Argentinian Ministries of Agroindustry, Foreign Affairs, Production and Taxation, during which officials from other relevant ministries also participated. Verification visits also took place at the premises of the Banco de Córdoba, the Banco de la Provincia de Buenos Aires, the Banco de la Ciudad de Buenos Aires, the Banco Central de la República Argentina and the Banco de la Nación Argentina.

(32) Verification visits under Article 26 of the basic Regulation were carried out at the premises of the EBB and the following companies: Union producers: — Masol Iberia Biofuel, S.L.U., El Grao (Castellón) and Barcelona, Spain, — Saipol, Grand-Couronne, France, — Verbio Vereinigte BioEnergie AG, Leipzig, Germany; Sampled exporting producers in Argentina: — Group Renova: — Molinos Agro SA, Buenos Aires, — Oleaginosa Moreno Hermanos SACIFIyA, Buenos Aires, — Vicentin SAIC, Buenos Aires; — Group T6: — Aceitera General Deheza SA, Buenos Aires, — Bunge Argentina SA, Buenos Aires; — LDC Argentina SA, Buenos Aires.

1.7. Non-imposition of provisional measures and subsequent procedure

(33) Given that the Commission found it necessary to collect further information on developments after the investigation period, which could further confirm the Commission's preliminary findings and shed more light on the Union interest, the Commission decided not to impose provisional measures in this case.

(34) On 21 September 2018, by means of an information document describing its preliminary findings, the Commission informed all interested parties that no provisional countervailing duties would be imposed on imports into the Union of biodiesel originating in Argentina. On 8 October 2018, six Member States (France, Spain, Bulgaria, Poland, Portugal and Romania) requested the Commission to impose provisional countervailing measures in this case. By letter of 10 October 2018, the Commission confirmed that the investigation was ongoing and that further facts would be considered (in particular, developments immediately following the investigation period).

(35) Several interested parties made written submissions on the information document. The parties who so requested were granted an opportunity to be heard, including with the Hearing Officer.

(36) Following the disclosure of the information document, comments were received from the GOA, CARBIO, all sampled groups of exporting producers, and the EBB.

(37) The Commission continued seeking and verifying all information it deemed necessary for its definitive findings. The information included in particular, but was not limited to, the additional questionnaire replies received from the EBB and the sampled Union producers concerning the developments after the investigation period, data on biodiesel imports to the Union after the investigation period and data provided by interested parties following the disclosure of the information document.

(38) On 3 December 2018, the Commission disclosed to all parties the essential facts and considerations on the basis of which it intended to impose a definitive countervailing duty on imports of the product concerned into the Union. All parties were granted a period within which they could make comments on the definitive disclosure.

(39) Following final disclosure, the EBB, Copa (Committee of Professional Agricultural Organisations), Cogeca (General Confederation of Agricultural Cooperatives in the European Union) and the European Oilseed Alliance welcomed the Commission's intention to impose a definitive countervailing duty on imports of the product concerned into the Union.

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

(40) The product concerned is fatty-acid mono-alkyl esters and/or paraffinic gasoils obtained from synthesis and/or hydro-treatment, of non-fossil origin, commonly known as ‘biodiesel’, in pure form or as included in a blend, originating in Argentina (‘the product concerned’).

(41) The investigation showed that biodiesel produced in Argentina is exclusively soybean methyl ester (‘SME’) derived from soybean oil, whereas biodiesel produced in the Union is mainly rapeseed methyl ester (‘RME’) but made also from other feedstock, including waste oils as well as virgin oils.

(42) SME and RME both belong to the category of fatty-acid methyl esters (FAME). The term ‘ester’ refers to the transesterification of vegetable oils, namely, the mingling of the oil with alcohol, which produces biodiesel and, as a by-product, glycerine. The term ‘methyl’ refers to methanol, the most commonly used alcohol in the process.

(43) SME biodiesel could be used in its pure form but is generally blended before being used in the Union. The reason for blending is that SME in its pure form does not meet the European standard EN 14214 as regards iodine and cetane numbers. The reason for blending SME with RME is that SME has a higher Cold Filter Plugging Point (‘CFPP’) than RME and is therefore not suitable for use in its pure form during winter months in cold regions of the European Union.

(44) The blends of biodiesel and mineral diesel are ultimately used in the transport sector as a fuel in diesel powered engines of road vehicles such as cars, trucks and buses, and also in trains. Biodiesel in its pure form or blended with mineral diesels can also be used as a heating fuel in domestic, commercial or industrial boilers and as a fuel for generators to produce electricity. There are trials to introduce biodiesel for air transport, in order to reduce CO2 emissions by the air industry.

(45) The product concerned is currently falling within CN codes ex 1516 20 98 (TARIC codes 1516209821, 1516209829 and 1516209830), ex 1518 00 91 (TARIC codes 1518009121, 1518009129 and 1518009130), ex 1518 00 95 (TARIC code 1518009510), ex 1518 00 99 (TARIC codes 1518009921, 1518009929 and 1518009930), ex 2710 19 43 (TARIC codes 2710194321, 2710194329 and 2710194330), ex 2710 19 46 (TARIC codes 2710194621, 2710194629 and 2710194630), ex 2710 19 47 (TARIC codes 2710194721, 2710194729 and 2710194730), 2710 20 11, 2710 20 15, 2710 20 17, ex 3824 99 92 (TARIC codes 3824999210, 3824999212 and 3824999220), 3826 00 10 and ex 3826 00 90 (TARIC codes 3826009011, 3826009019 and 3826009030).

2.2. Like product

(46) The investigation showed that the following products have the same basic physical, chemical, and technical characteristics as well as the same basic uses: (a) the product concerned; (b) the product produced and sold on the domestic market of Argentina; (c) the product produced and sold in the Union by the Union industry.

(47) The Commission decided that those products are therefore like products within the meaning of Article 2(c) of the basic Regulation.

2.3. Claims regarding product scope

(48) The Commission received no claims regarding the product scope.

3. SUBSIDISATION

3.1. Subsidies and subsidy programmes within the scope of the current investigation

(49) On the basis of the information available, including information contained in the complaint, the Notice of Initiation and the replies to the Commission's questionnaire, the Commission investigated the alleged subsidisation by the GOA through the following subsidy programmes: (1) Government's support to the biodiesel industry including through the provision of soybeans for less than adequate remuneration (‘LTAR’); (2) Government's mandated purchase of biodiesel for more than adequate remuneration (‘Biodiesel Supply Agreement’); (3) Provision of loans and export financing on preferential terms and preferential lending by the National Bank of Argentina (Banco de la Nación Argentina, ‘BNA’); (4) Government's revenue forgone or not collected, such as accelerated depreciation for biodiesel producers under the Biofuels Law of 2006, exemption and deferral of the minimum presumed income tax for biodiesel producers under the Biofuels Law of 2006; and (5) Provincial and municipal tax exemptions: (a) Provincial tax exemptions provided by the Province of Cordoba; (b) Provincial tax exemptions provided by the Province of Buenos Aires; (c) Province of Santiago del Estero System of Promotion and Industrial Development (‘PSPID’) — Provincial Law No 6.750; (d) Agreement on municipal taxes between Louis Dreyfus Argentina and the Municipality of General Lagos; (e) Percentage tax rate reduction under the ‘Pacto Fiscal’ (Decree 14/1994); (f) Real Estate exemption under the Santa Fe Industrial Law: exemption from paying real estate tax under Provincial Law No 8.478/1979 (Article 4) of Industrial Promotion; (g) Provincial tax exemptions provided by the Province of Santa Fe; (h) Article 183.29 Santa Fe Stamp Tax Exemption; (i) Article 127 Santa Fe turnover tax exemption for export sales.

3.2. Government's support to the biodiesel industry including through the provision of soybeans for less than adequate remuneration

3.2.1. The application of the provisions of Article 28(1) of the basic Regulation

(50) The Commission informed the GOA that it might have to resort to the use of facts available under Article 28(1) of the basic Regulation when examining the existence and the extent of the alleged support granted to the biodiesel industry including through the provision of soybeans for less than adequate remuneration.

(51) At initiation, the Commission requested the GOA to provide the contact details (names, addresses and email) of all the companies supplying the main input (soybeans) for the production of the product concerned. The GOA did not provide those contact details.

(52) Following the absence of a reply to that question, a request for additional information was sent to the GOA on 17 April 2018 regarding information in relation to the largest producers/suppliers of soybeans that have provided inputs to the Argentinian producers of biodiesel.

(53) Given the significant number of companies providing the main input for the product concerned, in the spirit of good cooperation and in order to collect at least some relevant data for the investigation, the Commission limited its request to data from only the ten most important producers/suppliers of soybeans.

(54) The Commission did not receive full information for most of these producers/suppliers of inputs for the production of the product concerned. In fact the Commission received only information from biodiesel producers who themselves produced soybean oil (not soybeans). No information was received from the ten largest soybean producers, as requested. In the absence of such information, the Commission considered that it had not received crucial information relevant to this aspect of the investigation.

(55) Furthermore, the Commission requested any available information requested in the preceding recital for those providers of soybeans in the years 2014, 2015, 2016 and the investigation period in which the GOA has no shareholding or is not the largest shareholder. That information was required to assess whether the soybeans supplier and the biodiesel producer were unrelated, related or part of the same entity. The Commission requested evidence that the GOA attempted to contact those suppliers or to indicate to the Commission how such information could be obtained (e.g. through relevant associations). The GOA did not include the information requested, or any evidence of the GOA's attempts to even contact those suppliers.

(56) The GOA's reply of 15 February 2018 advised that the data requested by the Commission on the soybean growers could be provided by four bodies, two of which being ACSOJA (Asociación de la Cadena de la Soja Argentina) and CARBIO. The Commission services met with both bodies during the verification visit in Argentina but no data on soybean suppliers was received. The other two bodies (7) were not inspected given the limited amount of time available. ACSOJA and CARBIO were chosen to be inspected as the two most likely to be able to assist with the investigation.

(57) During the meeting with ACSOJA, the Commission representatives asked a number of questions on the market situation of soybeans in Argentina, on their supply relationship with the biodiesel producers and on the impact of the export tax on their activity. The ACSOJA representative did not provide any meaningful reply to those questions, and did not provide specific data and evidence useful for the investigation. It was clear that ACSOJA simply represented other representative bodies in the soybean value chain and was unable to answer detailed enquiries, or give the Commission services the information requested in the questionnaire with regard to the production of soybeans.

(58) Also, ACSOJA committed during the verification visit to sending press releases concerning the export tax on soybeans and its downstream production. The Commission never received such press releases.

(59) As CARBIO is an association of biodiesel producers, it was not able to give the Commission the details on soybean producers that were required.

(60) Consequently, with regard to the alleged government provision of soybeans for less than adequate remuneration, the GOA did not provide the necessary information and evidence as requested by the Commission in its questionnaire, in the letter of 17 April 2018 and during the verification visit.

(61) The absence of sufficient cooperation did not allow the Commission to collect all the information it considers relevant for its findings in this investigation. More specifically, the Commission could not obtain information and data on the market for soybeans producers, the impact of the government measures (such as the export tax of soybeans) on their behaviour as well as on the supply of soybeans to the biodiesel producers.

(62) That information included the behaviour and decisions of soybeans producers prior and subsequent to the introduction and the various changes of the export taxes and other similarly restrictive measures, their production strategies and the possibility to switch to alternative crops, the availability and access to arable land, the market features and dynamics with regard to the differentiation between large companies and SMEs, the sales and marketing channels and strategies for their domestic and export markets, the prices and pricing policies in their domestic and export markets, the impact of the international price on their pricing policies, the competition situation domestically and in export markets, their profitability over the years, the impact of possible overcapacity and stockpiling strategies, the imports and exports of their main customers domestically and in export markets including the role of the soybean crushers' industry and the added-value achieved by the crushers' industry as well as the competition situation of the crushers' industry in Argentina and in international markets.

(63) Furthermore, contrary to what the GOA had asserted in its reply to the questionnaire, during the verification visit the Commission services found that it transpired that the GOA had ownership of one provider of soybeans to the biodiesel industry, namely YPF (8). However, as YPF is only one of the hundreds of suppliers of soybeans to the biodiesel industry, the information submitted by this provider, was insufficient to establish the behaviour of the remaining suppliers of soybeans to the biodiesel industry. In particular, YPF does not grow soybeans, but accepts soybeans as payment for its fertiliser and fuel and then sells the soybeans on the Argentinian domestic market. It is therefore not representative of the soybean farmers who supply the biodiesel industry.

(64) In the absence of information to the contrary received from the GOA, the Commission partially relied on facts available for its findings regarding those aspects of the investigation in accordance with Article 28 of the basic Regulation.

(65) Following the disclosure of the information document, the GOA disputed again that it did not cooperate fully regarding information requested from soybean farmers and referred to its letter dated 20 July 2018. CARBIO also claimed that the Commission incorrectly stated that the GOA did not cooperate.

(66) The Commission reiterated that the GOA did not provide contact details for soybean growers and only partial information for soybean oil producers. ACSOJA and CARBIO did not provide the information that the Commission had requested in the questionnaire nor during the meetings held with them. Moreover, during those meetings it became clear that the representative of ACSOJA was not in a position to reply to detailed technical questions and that CARBIO was an association of biodiesel producers and not soybean producers.

(67) The Commission concluded that, with regard to the alleged GOA's support to the biodiesel industry in particular through various measures including the provision of soybeans for less than adequate remuneration, the GOA did not provide the necessary information and evidence as requested by the Commission in its questionnaire, in the letter of 17 April 2018 and during the verification visit. As a result, the Commission had to rely on facts available concerning that aspect of the investigation.

(68) In the absence of data provided by the GOA on the sales of soybean growers in Argentina, the Commission relied on the data provided by the sampled exporting producers on the domestic price of soybeans. Furthermore, the Commission relied on publicly available information with regard to the direction or entrustment of the soybean growers by the GOA to sell soybeans domestically for less than adequate remuneration and the GOA's intention to support the biodiesel industry through this and other related measures.

(69) Following final disclosure, the GOA and CARBIO once again showed their disagreement with the Commission's use of facts available in accordance with Article 28 of the basic Regulation. They claimed that the use of facts available is justified only when an interested party fails to provide ‘necessary information’, indispensable to reach a specific determination. According to the GOA and CARBIO, the Commission never proved how the information requested was indispensable to reach a specific determination in this case and ignored the fact that the requested information was either unavailable for the GOA or strictly covered by tax secrecy law.

(70) The Commission explained extensively in its communication with the GOA the reasons why it needed more detailed information on soybean growers and soybean oil producers. The claim of the GOA and CARBIO that the GOA was not in the position to provide this information was not supported by any evidence proving that this was the case or that the Commission had other reasonable means available to obtain such information. The information requested was of such nature that the Commission could assume that it was either in the possession of the GOA and/or CARBIO or at least that the GOA had the regulatory control over the soybean growers and soybean oil producers to request this information. The Commission also expected better cooperation from soybean growers and soybean oil producers if those were contacted by the GOA directly and/or in close cooperation with the Commission.

3.2.2. Analysis

(71) The complainant alleged the existence of the GOA's support to the biodiesel industry through various measures. In particular, the complainant claimed that the GOA had implemented a policy of imposing high export taxes and other regulations relating to soybeans and soybean oil, which is the key raw material used for the production of biodiesel in Argentina. In doing so, according to the complainant, the GOA was ensuring that the price of raw materials for the production of biodiesel remained significantly lower than global prices.

(72) As stated in the Commission's memorandum on sufficiency of evidence (9), the Commission considered that the export taxes appeared to be one of the tools devised by the GOA to direct soybean growers and soybean oil producers in assisting the Argentinian biodiesel industry. In this investigation, the Commission has examined the set of measures adopted by the GOA in order to support the Argentinian biodiesel industry artificially.

(73) In order to establish the existence of a countervailable subsidy, three elements must be present: (a) a financial contribution or income/price support; (b) a benefit; and (c) specificity (Article 3 of the basic Regulation) (10).

(74) To come to a conclusion on the first element, the Commission analysed if the set of measures adopted by the GOA lead to a financial contribution in the form of government's provision of soybeans for less than adequate remuneration to the Argentinian biodiesel exporting producers, following Article 3(1)(a) of the basic Regulation, and/or whether the set of measures adopted by the GOA falls under the category of income/price support of the biodiesel industry, following Article 3(1)(b) of the basic Regulation.

3.2.2.1. Financial contribution

(75) At the outset, the Commission observed that all sampled companies purchased soybeans domestically from either related or unrelated companies to process into soybean oil and then biodiesel. The sampled exporting producers did not purchase soybean oil to further process into biodiesel, as they crushed the soybeans into soybean oil themselves as an intermediate step for the production of biodiesel. Therefore, the analysis in the following sub-sections focuses on whether the GOA provided soybeans (rather than soybean oil) for less than adequate remuneration.

(76) Article 3(1)(a)(iv), second indent, of the basic Regulation states that a financial contribution exists if a government: ‘entrusts or directs a private body to carry out one or more of the type of functions illustrated in points (i), (ii) and (iii) which would normally be vested in the government, and the practice, in no real sense, differs from practise normally followed by governments’. The type of functions described by Article 3(1)(a)(iii) of the basic Regulation occurs where ‘a government provides goods or services other than general infrastructure, or purchases goods …’. Those provisions mirror paragraphs (iii) and (iv) of Article 1.1(a)(1) of the SCM Agreement and should be interpreted and applied in the light of the relevant WTO case law.

(77) The WTO panel in US — Export Restraints ruled that the ordinary meanings of the two words ‘entrust’ and ‘direct’ in Article 1.1(a)(1)(iv) of the SCM Agreement require that the action of the government must contain a notion of delegation (in the case of entrustment) or command (in the case of direction) (11). It rejected the US ‘cause-and-effect-argument’ and asked for an explicit and affirmative action of delegation or command (12).

(78) However, in a subsequent case, the Appellate Body held that the replacement of the words ‘entrusts’ and ‘directs’ by ‘delegation’ and ‘command’ is too rigid as a standard (13). According to the Appellate Body, ‘entrustment’ occurs where a government gives responsibility to a private body and ‘direction’ refers to situations where the government exercises its authority over a private body (14).

(79) In both cases, the government uses a private body as proxy to effectuate the financial contribution, and ‘in most cases, one would expect entrustment or direction of a private body to involve some form of threat or inducement’ (15). At the same time, paragraph (iv) of Article 1.1(a)(1) of the SCM Agreement does not allow Members to impose countervailing measures to products ‘whenever the government is merely exercising its general regulatory powers’ (16) or where government intervention ‘may or may not have a particular result simply based on the given factual circumstances and the exercise of free choice by the actors in that market’ (17). Rather, entrustment and direction implies ‘a more active role of the government than mere acts of encouragement’ (18).

(80) Moreover, the WTO did not consider that ‘leaving discretion to a private body is necessarily at odds with entrusting or directing that private body […] While there may be cases where the breadth of discretion left to the private body is such that it becomes impossible to properly conclude that that private body has been entrusted or directed (to carry out a particular task), this is a factual/evidentiary matter to be addressed on a case-by-case basis.’ (19)

(81) In line with those WTO rulings, not all government measures capable of conferring benefits equate to a financial contribution under Article 3 of the basic Regulation and Article 1.1(a) of the SCM Agreement. There must be evidence of a government policy or programme to promote the industry under investigation (in this particular case the biodiesel/biofuels industry), by exercising authority over or giving responsibility to public or private bodies (here the soybean growers) to provide soybeans for less than adequate remuneration to the biodiesel industry.

(82) In a nutshell, the relevant WTO rulings provide that: (i) the determination of whether there is a ‘financial contribution’ under Article 1.1(a)(1) of the SCM Agreement should focus on the nature of the government action, rather than on the effects or the results of the government action (20). In other words, it is well-acknowledged that governments intervene in the market as regulators and, when so doing, they cause effects on the market and its operators. In this sense, e.g. a government may impose export taxes legitimately in order to generate revenue in case of a very competitive commodity in the international markets. In contrast, there is no such legitimate imposition of export restrictions when it becomes evident that the use of such instrument together with other mechanisms to keep commodities domestically and force suppliers to sell below market prices is part of a broader scheme engineered by the government to support a particular industry or set of industries to boost their competitiveness. Thus, the nature of the government action, including its context, object and purpose, is relevant in assessing the ‘financial contribution’ element; (ii) ‘entrustment’ or ‘direction’ would involve an explicit and affirmative action addressed to a particular party in relation to a particular task or duty, this being very different from the situation in which a government intervenes in the market in some way, which may or may not have a particular result given the factual circumstances and exercise of free choice by the actors in that market. Ultimately, the key question behind the concepts of entrustment or direction is whether the conduct in question, i.e. the financial contribution in the form of provision of goods for less than adequate remuneration, can be attributed to the government or still is the free choice of the private operators in view of market considerations, such as regulatory constraints (21); (iii) Article 1.1(a)(1)(iv) of the SCM Agreement is, in essence, an anti-circumvention provision and, thus, a finding of entrustment or direction requires that the government gives responsibility to a private body or exercises its authority over a private body in order to effectuate a financial contribution. In most cases, one would expect entrustment or direction of a private body to involve some form of threat or inducement, which could, in turn, serve as evidence of entrustment or direction (22). However, governments are likely to have other means at their disposal to exercise authority over a private body some of which may be ‘more subtle’ than a command or may not involve the same degree of compulsion (23); (iv) there must be ‘a demonstrable link’ between the government act and the conduct of the private body (24). There is no reason why a case of government entrustment or direction should not be premised on circumstantial evidence (such as implicit and informal acts of delegation or command), provided that such evidence is probative and compelling (25). In this respect, evidence of the government's intention to support the downstream industry (for example, through publicly stated policies or government decisions, or other governmental actions), or the existence of other government measures ensuring a particular result on the market (e.g. an export restraint together with a government measure preventing operators subject to those restraints from stocking their products), may be relevant to determine the existence of a ‘financial contribution’ under Article 1.1(a)(1)(iv) of the SCM Agreement (in particular as an indirect manner for the government to provide goods, as provided in subparagraph (iii)). In some circumstances, ‘guidance’ by a government can constitute direction (26). The presence of particular effects in the market (such as reduction of prices) may also be a factor to be taken into account together with all other available evidence, including the possibility of anticipating those effects in a particular context. Finally, depending on the circumstances, a private body may decide not to carry out a function with which it was so entrusted or directed, despite the possible negative consequences that may follow. This does not show, however, on its own, that the private body was not entrusted or directed (27).

(83) In line with that case-law, the Commission has reviewed very carefully the nature of the GOA's intervention (whether the GOA's intervention involves the entrustment of or direction to soybean growers?), the nature of the entrusted bodies (are soybean growers private bodies within the meaning of Article 3(1)(a)(iv) of the basic Regulation?), and the action of the entrusted or directed bodies (did the entrusted or directed soybean growers provide soybeans to the Argentinian biodiesel industry for less than adequate remuneration and hence act as a proxy for the GOA?). Moreover, the Commission has verified whether the function carried out would normally be vested in the government (is the provision of soybeans for less than adequate remuneration to soybean oil-producing companies in Argentina a normal government activity?) and whether such function does not, in real sense, differ from the practices normally followed by governments (does the actual provision of soybeans by growers, in real sense, differ from what the government would have done itself?).

3.2.2.2. Entrustment or direction of the soybean growers by the Government of Argentina

(84) In view of the WTO case-law referred to in recitals (77) to (82), the Commission analysed first whether the GOA's support to the Argentinian biodiesel industry is effectively an objective of a government policy and not merely a ‘side effect’ of the exercise of general regulatory powers. The investigation examined in particular whether the price distortions found were part of the governments' objectives, or whether the lower prices of soybeans were rather an ‘inadvertent’ by-product of general governmental regulation. In line with the conclusions reached in recital (64), the Commission decided to partially use facts available to determine whether there has been an entrustment or direction of the soybeans growers by the GOA.

(85) A number of documents show that the GOA explicitly pursued the support and development of the biodiesel industry as a policy objective, in particular by seeking to reduce the domestic price of the input materials (soybeans) and thereby providing a financial contribution to the production of biodiesel.

(86) This support is achieved through several measures attributable to the GOA (including export taxes on soybeans, subsidies to soybean producers to continue producing and selling domestically to biodiesel producers, countermeasures on producing other grains such as by imposing export quotas, and public statements to encourage soybean producers not to stop their production, but to continue selling domestically) (28). These measures, even though modified on several occasions since their introduction in 1994 (29), have been constantly applied in order to, as stated by the GOA itself in the legislation (see recitals (89) to (100), reduce the domestic price of soybeans in the context of rising world prices and to the benefit of the development of the value added chain in Argentina, which among others, include the biodiesel industry.

(87) The export taxes on soybeans amount to an important tool used by the GOA to support the biodiesel industry. According to the OECD, in particular through its export tax regime the GOA imposes ‘higher rates for raw materials or input producers while lower rates apply for finished products. […] The price advantage provided to domestic downstream industries can distort and reduce competition in both domestic and foreign markets’ (30). In addition, the International Renewable Energy Agency (IRENA) stated in a report dedicated to Argentina that ‘Differential export taxes for biofuels versus other products derived from the same feedstock promoted the export of biofuels, especially biodiesel’ (31). The World Bank stated that the GOA levies high export taxes which have the effect of ‘lowering the feedstock cost domestically and encouraging exports of biodiesel’ (32).

(88) The GOA claimed that none of the publications of the OECD, IRENA and the World Bank referred to an explicit objective of the GOA to support the Argentinian biodiesel industry. However, the GOA did not contradict the correctness of the citations found by the Commission. Contrary to the GOA, the Commission considered that the analyses made in those publications support its finding that the GOA explicitly supports the Argentinian biodiesel industry.

(89) Argentina has had an export tax in place for soybeans since 1994, fixed at the rate of 3,5 %. As will be illustrated with all the changes of the legislation described in recitals (91) to (100), the measures used to adjust the export tax beyond the initial rate demonstrate the GOA's explicit objective of reducing domestic prices in the context of rising world market prices. During the investigation the GOA claimed that the export tax on soybeans and soybean oil has been in place for revenue raising reasons. Despite multiple requests of the Commission to provide documents supporting this claim, the GOA did not provide any.

(90) Furthermore, none of the legislative acts since 2002 related to the export tax adjustments on soybeans, soybean oil or biodiesel give the raising of revenue as a reason for the level of the export tax. Rather, as explained in recitals (91) to (100), those legislative acts state that the purpose of the export tax is to induce soybean suppliers to keep selling domestically at below international prices. Thus, rather than a fiscal revenue measure, the GOA uses export taxes on soybeans as a tool to support the development of the domestic biodiesel industry.

(91) Following a public emergency declaration (33), the export tax increased in 2002 from 3,5 % to 13,5 % by Resolution 11/2002 (34). This resolution contained the following statement: ‘the effects of any potential substantive change in international prices of agricultural productions shall also be considered’ (emphasis added), showing that this measure was taken to influence the domestic market price of soybeans compared to the world market price.

(92) The rate was further increased in the same year from 13,5 % to 23,5 % by Resolution 35/2002 (35), which states that ‘Law No 22.415 allows the imposition of imports of goods for consumption in order to stabilise domestic prices until they reach convenient levels and maintain a supply that meets the domestic market needs’. According to the legal text these measures were of a transitory nature and temporary as long as the current general economic conditions persisted. However, these export taxes are still in place, at a similar level as at the time of public emergency, while for other grains the export tax has been set at 0 % (36).

(93) In 2007, the first large scale biodiesel producers in Argentina started operations. In that year the GOA published two resolutions increasing the export tax on soybeans from 23,5 % to 27,5 % (37) and further up to 35 % (38). Both resolutions stated as reason for the additional export tax that besides an increase in domestic and international demand for these products, the products covered by these resolutions (predominantly soybean related products) are applied for new productive uses, explicitly giving biofuels as an example.

(94) In addition, Resolution 10/2007 (39) explicitly stated that ‘the international prices of grains have increased substantially […] the creation of additional export duties on a number of the aforementioned goods is deemed convenient’ (emphasis added).

(95) Resolution 369/2007 (40) furthermore explicitly noted that the increase of the export tax is needed for the purpose of ‘reducing domestic prices, consolidating the improvements on the distribution of income and stimulating added value’ (emphasis added).

(96) In 2008, by means of Resolution 125/2008 (41) the GOA established a formula on the basis of which to calculate a fixed amount of export tax, depending on the level of the official FOB price fixed by the Government (Ministry of Agribusiness) on a daily basis.

(97) Resolution 125/2008 stated the following policy therein: ‘ Cereal grains and oilseeds international prices have significantly increased over the last years, with a high volatility of their inter-annual variation rates. The continuance of such a scenario could have negative effects on the economy as a whole, such as higher domestic prices, lower fairness in the distribution of wealth and growing uncertainty as to investment decisions in the agriculture and livestock industry. The proposed amendment to the scheme of export duties applicable to a key subgroup of cereal grains and oilseeds is an appropriate tool to solve the aforementioned problems.’ (emphasis added).

(98) Again in 2008, by means of Resolution 64/2008 (42) the GOA modified the formula for the calculation of the export tax and restated explicitly its policy objective: ‘The purpose of the scheme of variable export duties is to mitigate the impact on domestic prices of the increase in international prices of grains and oilseeds and their by-products, contributing to improve income distribution .’ (emphasis added).

(99) In 2012, the GOA published a joint resolution stating that Argentina has been adopting a number of public policies to strengthen the national biodiesel industry, especially upon the enactment of Law No 26.093. The joint resolution further noted that export duties on biodiesel and its blends were consistent with the export duties applied on other by-products in the oilseed sector, considering the differential production costs and maintaining a differential so that the effective rate for biodiesel was lower than that for its main input, thereby promoting value addition in Argentina and thus helping to boost the development of the biodiesel industry (43).

(100) Although at the end of 2015 the newly elected GOA eliminated the export tax on other grain crops, the export tax on soybeans remained high. The decree No 133/2015 (44) establishing the elimination of export tax on wheat and adjusting the export tax percentage on soybean to 30 % stated the following policy objective: ‘In the case of soybeans and its by-products, the increase in the planted area and the record harvest of the past season has not prevented the decline of competitiveness and profitability of its entire associated value chain’ (emphasis added). The value chain in this case relates to, among others, the biodiesel industry.

(101) After disclosure of the information document, the GOA and CARBIO reiterated their claim that any effect on biodiesel production of the export taxes applied to soybeans if such effect exists at all, clearly constitutes at best a side-effect of a revenue collection measure.

(102) The Commission did not agree with this statement. The decrees, as cited in recitals (91) to (100), cannot be considered just ‘mere policy pronouncements’. This legislation repeatedly reflects the GOA's intention to support the biodiesel industry, while, contrary to the GOA's beliefs, the decrees do not state revenue collection as the purpose of the export tax on soybeans. None of the legislation the GOA brought forward in its submission referred to a revenue-raising function for the export tax on soybeans.

(103) By imposing export taxes on soybeans, the GOA puts Argentinian soybean growers into an economically irrational situation, which induces them to selling their goods domestically for a lower price than they could obtain in the absence of those export taxes. They are therefore deprived of a rational choice and induced to comply with the policy objective behind the export tax.

(104) This irrational situation was amplified by other export restraints, such as export quotas on agricultural products other than soybeans from 2006 until 2015, discouraging the export of other crops and directing growers toward continuing the production of soybeans (as opposed to other grains), and lowering the domestic price even further. Soybean growers also continued to produce and sell their production locally since stockpiling is not appropriate in relation to this agricultural product and cannot be maintained in the medium to long-term.

(105) After disclosure of the information document, the GOA claimed that there had been no export quotas on maize and wheat for 10 years. However, the Commission concluded that this statement was factually incorrect. Resolution 543/2008 (45) explicitly regulated the determination of maximum export quantities of, among others, wheat and maize. This measure was in force until the end of 2015 (46).

(106) Furthermore, in 2009 the GOA established a temporary import ban on soybeans, stating that the use of domestic raw materials should be privileged over imported ones thereby adding value to the Argentinian product in the international market, and that the temporary importation of locally produced inputs distorts this objective (47). In 2012 the GOA set up the ‘Registry for Authorised Soy Operators’, removing the import ban (48). However, it remained highly cumbersome to import soybeans into Argentina until the further amendments to that registry in 2016 (49). The import ban in combination with the export tax on soybean confirms the GOA's policy objective to boost the development of a fully domestic biodiesel industry including local contents in the supply chain. It creates an artificial, government-driven output of soybeans in Argentina for domestic consumption ensuring that local demand for soybeans is satisfied on the basis of local supply oriented towards achieving the stated policy objectives.

(107) On top of this, a long period of export restraints on other crops has led to significant production increase in soybeans, the so-called ‘sojización’ (50) of Argentinian agriculture. Even after the removal of the export quotas in 2015 (51) the production of soybeans did not decrease significantly in comparison with the other crops and has remained rather stable, see Graph 1 below: Graph 1 Argentinian production of soybeans, corn, and wheat per harvesting year Soy Corn Wheat Production Millions MT 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Source: http://datosestimaciones.magyp.gob.ar/

(108) In addition, the GOA published in 2017 a resolution setting out a stimulation regime for soybean farmers (52), as part of the Plan Belgrano (53). The Plan Belgrano was set up in 2016 as an infrastructure and industry developing plan in ten of Argentina's northern provinces, which have historically been less developed compared to the rest of the country. This resolution gave financial incentives to soybean growers in the ten most under-developed provinces within Argentina (54) from 1 March until 31 August 2017 and in so doing further directed growers into the production of soybeans and adding to the increased domestic supply of soybeans in favour of the development of the biodiesel industry.

(109) The Commission considered that, in view of the evidence available, the GOA took a ‘more active role than mere acts of encouragement’, as required by the Appellate Body (55). The measures taken by the GOA restrict the freedom of action of the soybean growers by limiting in practice their business decision at what price to sell their product and where.

(110) They are prevented from maximising their income that they would be able to get in the absence of the export tax on soybeans (e.g. by exporting their production to benefit from higher prices or by increasing domestic prices) as well as other similarly restrictive measures.

(111) This is further supported by Decree 133/2015 and Decree 640/2016 in which the GOA takes specific measures to help the soybean industry and its associated value chain to reverse the occurred decline in the competitiveness and profitability of its entire associated value chain. Thus, soybean growers are encouraged or directed by the GOA to maintain production to supply the domestic market even if a rational supplier would adapt its output and prices in a situation where exports have been disincentivised.

(112) Therefore, through those measures the GOA induces the soybean growers to keep the soybeans in Argentina because they cannot sell at better prices which would prevail in Argentina absent those measures.

(113) In this sense, the input producers are ‘entrusted’ or ‘directed’ by the GOA to provide goods to the domestic users of soybeans, i.e. biodiesel producers, for less than adequate remuneration. The soybean growers are given the responsibility to create an artificial, compartmentalised, low-priced domestic market in Argentina.

(114) In other words, when applying the set of measures described, the GOA knows how the soybean growers will respond to the measures and what consequences will result from them. While the soybean growers may lower their domestic production slightly to respond to the export taxes and other restrictive measures, the evidence shows that production did not stop, nor did it significantly decrease (see Table 1 below and explained further in recital (139)). The Commission concluded that this is a result of the GOA entrusting and directing the soybean growers to continue production and export.

(115) As explained, in the soybean growing sector the adaptation of the production will remain moderate, which results in lower domestic prices. In this regard, the effects are established on an ex ante, not ex post basis and are therefore not ‘inadvertent’. There is a clear ‘demonstrable link’ between the policy and the conduct of private bodies involved, which are acting as a proxy for the GOA to carry out its policy of providing soybeans for less than adequate remuneration to the biodiesel industry.

(116) The GOA itself has acknowledged the success of its set of measures in achieving the stated policy objective of support to the biodiesel industry. In the joint resolution referred to below that the GOA published in 2012, it stated that the public policies adopted included a range of mechanisms to promote the biodiesel industry. It further stated that this explains the successful performance displayed by this productive sector, whose gross margins for its main input during the processing stage exceed 25 % (56). These margins seem to have been yielded largely by the differentials between biodiesel, and soybean export duties.

(117) In conclusion, the Commission found that the GOA had entrusted or directed the soybean growers to carry out its policy to create a compartmentalised domestic market and to provide soybeans to the domestic biodiesel industry for less than adequate remuneration.

(118) Following the disclosure of the information document, the GOA claimed that the Commission expanded the scope of entrustment or direction, placing an emphasis on the terms inducement and guidance, while the requirements by the WTO imply that the attribution of responsibility must constitute an explicit and affirmative action, be addressed to a particular party and have as its object a particular task or duty. Mere statements of policy by a government cannot constitute an order and the alleged order or entrustment cannot be inadvertent or a mere by-product of governmental regulation.

(119) The Commission disagreed. As stated in recital (117), in view of the WTO case-law referred to in recital (93), the Commission found substantial evidence to conclude that the GOA has taken explicit and affirmative action to entrust or direct the soybean growers to sell their soybeans for less than adequate remuneration to the biodiesel industry. There is ‘a demonstrable link’ between the government's actions and the conduct of the soybean farmers so that their actions can be attributed to the GOA. The GOA did not substantiate its claim that the evidence found by the Commission could solely be considered as mere statements of policy by the GOA. In particular, the GOA did not dispute the existence of the stated policy objectives, as emanating from those statements; nor did the GOA deny statements celebrating the success of the restrictive measures in achieving the policy goals of supporting the Argentinian biodiesel industry. Therefore, that claim was rejected.

(120) Furthermore, the GOA claimed that the Commission's conclusion that the existence of different mechanisms within a broader scheme engineered by the GOA to support a particular industry is relevant to determine the nature of the action is manifestly wrong, as export taxes are not included in paragraphs (i) to (iii) of Article 3 of the basic Regulation (or the SCM Agreement) and do not fall under paragraph (iv) of Article 3 of the basic Regulation.

(121) The sole fact that export taxes as such are not explicitly mentioned in Article 3(1)(a) of the basic Regulation does not exclude them from having the potential nature of a financial contribution and would therefore fall within the definition of a subsidy under the basic Regulation and the SCM Agreement. The Commission provided ample evidence that the export tax on soybeans was used as a tool, together with other instruments, to induce soybean growers to comply with the stated policy objectives in a manner amounting to a countervailable subsidy as specified under Article 3(1)(a) of the basic Regulation. As the GOA did not substantiate the claim of why the export tax on soybeans could not be considered a countervailable subsidy, the Commission rejected the claim.

(122) Following final disclosure, the GOA did not agree with the Commission's finding in recital (121) that the GOA did not substantiate its claim of why the export tax on soybeans could not be considered a countervailable subsidy.

(123) Although throughout the investigation the GOA claimed that the imposition of export taxes has an objective of revenue generation, the GOA failed to provide evidence in support of this statement in respect to any of the legislative acts imposing or modifying the level of the export tax on soybeans. In fact, on the basis of the evidence available, the Commission considered that the export taxes are tools among others that the GOA employed to support the development of the biodiesel industry. Therefore, the Commission came to a different conclusion explained in recitals (89) to (90) above and rejected the initial claim of the GOA.

(124) CARBIO claimed that the Commission ignored the high standard required to prove entrustment or direction. Soybean growers remain free to decide whether to produce, sell and export their soybeans. No element of the export tax on soybeans entrusts or directs soybean producers to take any of these decisions.

(125) The Commission disagreed that the entrustment or direction standard, as spelled out in recital (82), is not met in this case. Moreover, the claim of CARBIO that soybean growers are free to set the price of soybeans is incorrect. During the verification visit, the GOA explained how the FOB price of soybeans for exports is set by the government. As both the export price and the domestic price of soybeans are far below the world market price, soybean growers are limited in their freedom to set their price. Finally, CARBIO ignores that the export tax is not the only tool devised by the GOA to direct soybean growers. Therefore, this claim was rejected.

(126) CARBIO also contested the finding of the Commission in recital (112) that soybean growers cannot sell at better prices which would prevail in Argentina absent these measures, referring as support to a study by the Internal Trade Commission stating that the elimination of export tax on soybeans would result in an increase of domestic soybeans prices of only 1,2 % (57).

(127) However, the Commission noted that according to a study published in the American Journal of Agricultural Economics (58), the domestic price of soybeans in the absence of an export tax may be much larger, up to 26,0 %. Furthermore, the study referred to by CARBIO also indicated that the elimination of export tax on soybeans would lead to a decrease in the world market price of soybeans by 18 %. This means that with the theoretical removal of an export tax of 23,5 % the difference between the Argentinian price and the world market price would almost be removed.

(128) Therefore, the Commission reiterated the conclusion that soybean growers are induced to continue growing and selling soybeans in Argentina without allowing them to sell at better prices, which would prevail in Argentina absent these measures.

(129) Following final disclosure, the GOA and CARBIO reiterated their claims that: — there is no set of measures inducing the domestic soybean growers to sell soybeans locally at less than adequate remuneration, — soybean growers are free to set the price of their soybeans, — no financial contribution occurs through export taxes on soybeans; that any effect of the export taxes applied to soybeans on biodiesel production constitutes, at best, a side effect of a revenue-collection measure, — the nature and revenue-collection purpose of the export taxes on soybeans has nothing to do with the alleged entrustment or direction, and — no benefit is thereby conferred.

(130) The GOA and CARBIO further did not agree with the Commission's legal interpretation of the terms ‘entrust’ and ‘direct’. The GOA claimed that the Commission's assessment of the financial contribution strongly resembles the so-called ‘effects based approach’, which was explicitly and categorically rejected by WTO jurisprudence.

(131) CARBIO further claimed that the current world market price of soybeans does not reflect what would be the domestic price of soybeans in Argentina in the absence of the export tax.

(132) As the GOA or CARBIO merely repeated the arguments made previously but failed to substantiate any of these claims, the Commission rejected them.

3.2.2.3. Entrustment or direction of private bodies within the meaning of Article 3(1)(a)(iv) of the basic Regulation

(133) The Commission then assessed whether the soybean growers in Argentina are private bodies entrusted or directed by the GOA within the meaning of Article 3(1)(a)(iv) of the basic Regulation.

(134) The sampled Argentinian exporting producers were purchasing all of the soybeans used in the production of biodiesel from domestic sources. These were purchased from private soybean farms, apart from minor volumes of soybeans sourced from the state-owned company YPF.

(135) Therefore, the Commission considered that, on the basis of the information available, all soybean growers are private bodies which were entrusted by the GOA within the meaning of Article 3(1)(a)(iv) of the basic Regulation to provide soybeans for less than adequate remuneration.

3.2.2.4. Provision of soybeans by soybean growers for less than adequate remuneration

(136) In the next step, the Commission verified whether the soybean growers actually carried out the Argentinian governmental policy to provide soybeans for less than adequate remuneration. That necessitated a detailed analysis of the market developments in Argentina against an appropriate benchmark. In line with the conclusions reached in recital (64), the Commission decided to partially use facts available to determine whether there had been a provision of soybeans by soybean growers for less than adequate remuneration.

(137) Through the set of measures described in recitals (84) to (116), the GOA induced the soybean growers to sell locally at lower prices than otherwise (i.e. absent those measures, the soybean growers would have exported the soybeans at the much higher world market price or simply they would have adjusted their supply to the market constraints). In contrast, the soybean growers did not do so because of the GOA's policy to boost the development of the downstream biodiesel industry.

(138) As demonstrated in Table 1, practically all of the domestic consumption of soybeans is further processed into soybean oil through crushing. The data concerning production, export, import and domestic crushing of soybeans over the years are as follows: Table 1 Argentinian soybean, soybean oil and biodiesel production Soybean production (MT) Soybean exports (MT) Soybean imports (MT) Soybean crushing (MT) Soybean oil production (MT) Domestic consumption soybean oil (MT) Biodiesel production (MT) 2007 47 482 787 11 843 248 2 245 391 36 268 044 6 962 206 474 078 2008 46 238 890 11 733 588 2 891 771 31 709 219 6 024 101 1 078 022 711 864 2009 30 989 474 4 292 321 823 924 30 285 623 5 772 026 1 348 922 1 179 103 2010 52 676 218 13 616 012 189 36 824 921 7 000 075 2 118 336 1 820 385 2011 48 878 774 10 420 216 12 862 37 339 854 7 113 681 2 996 512 2 429 964 2012 40 100 197 6 158 407 1 428 33 333 313 6 353 359 2 841 121 2 456 578 2013 49 306 202 7 784 236 1 615 34 040 869 6 432 942 2 448 560 1 997 809 2014 53 397 720 7 360 901 2 227 37 936 186 7 096 392 3 184 146 2 584 290 2015 61 446 556 11 509 272 566 40 940 319 7 895 905 2 407 954 1 810 659 2016 58 799 258 8 910 323 853 849 44 482 510 8 670 493 3 137 953 2 659 275 2017 54 971 626 7 369 126 1 897 833 41 824 091 8 065 602 3 264 784 2 871 435 Source: Submission of the GOA, coming from different publicly available Argentinian databases.

(139) As can be seen in Table 1, the production of soybeans increased from 26,7 million MT in 2001 to 40,5 million MT in 2006 (59). The increase of the export tax on soybeans did not lead to the reduction of soybean production, but to an irrational increase from an economic perspective. Indeed, absent the inducement created by the various measures of the GOA, suppliers subject to export restraints would adapt to the market conditions. However, in this case, rather than reducing their production, the soybean growers also benefit from the policy objective to boost and develop a competitive biodiesel industry which, in turn, required quantities of soybean being made available to biodiesel producers at prices below international prices.

(140) The trend is shown in Graph 2 below (in MT): Graph 2 Soybean processing in Argentina Soybean crushing Soybean imports Soybean exports Soybean production 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Source: Data provided in the table in recital (138).

(141) Table 1 and Graph 2 demonstrate that practically all of the soybean production that was consumed domestically went into crushing and the domestic consumption of the resulting soybean oil was predominantly used for the production of biodiesel.

(142) Following final disclosure, CARBIO claimed that the Commission was asserting that all soybeans sold domestically were used exclusively for producing biodiesel. The Commission specified that this is not the case. As set out in recital (141), soybeans are sold domestically for crushing into soybean oil and soybean meal. The resulting soybean oil is used to make biodiesel, as there is no significant domestic market for soybean oil in Argentina. Some soybean oil and soybean meal is exported.

(143) Moreover, exports of soybeans only take place when domestic consumption for both soybean crushing and production of biodiesel is fully satisfied. Table 1 and Graph 2 also show the inexistent or very limited imports of soybeans over the years of application of the export restraints. This is also confirmed by the business model observed with the sampled exporting producers. Indeed, none of them imported soybeans for the production of biodiesel. Rather, they imported the soybeans exclusively for use in their crushing facilities and then exported all of the resulting soybean oil and meal outside Argentina.

(144) Consequently, the primary objective of the GOA's measures has been achieved: domestically produced soybeans have fully satisfied domestic demand for an input for domestic biodiesel production to the detriment of the soybean producers who would rather optimise their profits and either export all of their produce or sell domestically at higher prices but for the export restraints.

(145) According to the relevant WTO case-law, as explained in particular at recitals (78), in most cases there should be some form of threat or inducement by the government to the suppliers of inputs to evidence the existence of entrustment and direction. Leaving a margin of discretion does not automatically discard that finding. This case-by-case analysis is evidence-based. In this case, the fact that the exports are rather limited in a highly international commodity market whereby Argentina is one of the leading soybeans world producers is remarkable, especially considering that the price in international markets is significantly higher than the domestic price in Argentina (see Graph 3 in recital (158).

(146) The evidence contained in the Argentinian legislation (see recitals (91) to (99) shows that the GOA's policy objective is to develop and favour the higher added-value downstream industries, including biodiesel. In addition, the GOA clearly stated its objective to shield the downstream industries from the rise of international prices.

(147) After disclosure of the information document, CARBIO claimed that the Commission failed to provide any evidence for the statement that soybean producers would rather optimise their profits.

(148) Since the Commission did not receive direct information from the soybean growers, as explained in recitals (61) to (64), the Commission assumed that soybean growers are rational economic operators in a market economy that would optimise their benefits whenever possible. Therefore, it is considered an irrational decision to increase the production of soybeans when prices are decreased because of an increased export tax. The fact that soybean growers continue to supply soybeans despite the various restrictive measures adopted by the GOA is the result of the actions adopted by the GOA to induce soybean growers as entities implementing the stated policy objectives to support the biodiesel industry. Therefore, the claim was rejected.

(149) The GOA claimed no evidence has been shown that the processing of soybeans in Argentina has been altered in any way as a result of the export taxes on soybeans.

(150) The Commission disagreed. At the outset, the Commission recalls that the GOA did not assist the Commission in obtaining the necessary information from the soybean growers to better assess their behaviour. Thus, the Commission considered that, on the basis of the information available, the GOA's measures (including the export tax) altered the soybean growers' behaviour to achieve the effects intended by the GOA. As can been seen in Table 1, despite an increase in the export tax on soybeans in 2007, i.e. at the start of large-scale production of biodiesel, the production of soybeans increased significantly. On top of that, the export of soybean oil has been significantly replaced by the export of biodiesel during the same period, showing that the GOA's measures have incentivised a structural change to improve the competitiveness of the biodiesel industry. Consequently, the claim was rejected.

(151) It is also clear that the countless small soybeans farmers (approximately 64 000), even though not formally prevented by the GOA from exporting their products, are induced by these policies to sell domestically almost all of their production and at lower prices that they would have otherwise achieved in the international markets. There is no evidence on file that the GOA is in any way trying to encourage and/or actively support directly or indirectly an increase of exports and hence a maximisation of profits for the soybeans farmers despite the known difficulties of small farmers to find clients abroad, communicate in a foreign language, and arrange all the burdensome administrative formalities for exports.

(152) In the absence of other evidence to the contrary on file, and given the lack of sufficient cooperation by the GOA to provide relevant evidence and information in this respect, the Commission concluded that this evidence shows the inducement of soybean growers to sell their production domestically for the benefit of the downstream industries (including the biodiesel producers) rather than maximising their returns, such as by finding other ways such as adapting their production output or even switching to other type of production (e.g. other grains).

(153) The fact that there is still some degree of discretion for soybean growers to sell abroad at least formally and that very limited exports did take place does not undermine the main conclusion on the existence of their entrustment or direction in line with the WTO case-law in DRAMS (60).

(154) Further, the Commission analysed the impact of the supply of soybeans due to the GOA's measures on the domestic price of soybeans in Argentina, if any.

(155) The Commission used the average domestic price of soybeans in Argentina which is based on monthly data from Buenos Aires Grain Exchange for Rosario, Bahia Blanca, and Quequen provided by the Ministry of Agribusiness at a country level.

(156) The sampled exporting producers did import some soybeans. Although the companies did not use these imports for the production of biodiesel — they were used to make soybean oil which was then exported, the price of these imports could be considered representative, as the soybeans were imported to be crushed and re-exported as soybean oil and their price mirrored the world market price of soybeans.

(157) The domestic price was compared to the average FOB import price of soybeans by the sampled exporting producers on a monthly basis.

(158) Graph 3 below shows the price fluctuations over the period considered and the price difference in percentages between the Argentinian domestic price and the world market price. Graph 3 Argentinian domestic price versus world market price Price difference (%) World market price (ARS/MT) Argentinian domestic price (ARS/MT) 2017M11 2017M09 2017M07 2017M05 2017M03 2017M01 2016M11 2016M09 2016M07 2016M05 2016M03 2016M01 2015M11 2015M09 2015M07 2015M05 2015M03 2015M01 Source: Bloomberg and the submission of GOA based on publicly available data.

(159) Graph 3 shows a price difference between the Argentinian domestic price and the world market price which can be explained mainly by the export tax on soybeans. The directing policy of the GOA prevents the soybean growers from realising profits based on world market prices. The soybean growers are effectively deprived of a rational choice to sell on international markets at much higher prices.

(160) Instead, they are achieving comparable profits on both the domestic and international market, at the expense of reducing domestic prices by the amount of the export tax. Thereby, the GOA suppresses the domestic prices to the benefit of the domestic processing industry.

(161) The GOA directs by withholding a rational choice from the soybean growers. In addition, as can be observed from the chart, the price difference between domestic prices and international prices has not only remained substantial, but has also shielded the biodiesel industry and all other downstream industries (such as the crushers, mainly integrated with biodiesel producers) from the highest price increases on the international market.

(162) Consequently, the GOA's set of measures have achieved their pre-defined goal, namely to reduce domestic prices in the context of rising international prices to the benefit of the domestic value added industry, including biodiesel.

(163) In light of the foregoing, the Commission concluded that the soybean growers in Argentina were entrusted or directed to provide soybeans to the domestic biodiesel industry for less than adequate remuneration.

3.2.2.5. The function which would normally be vested in the government and the practice, which, in no real sense, differs from practices normally followed by governments

(164) With respect to the ‘normally vested’ criterion, which had not been further clarified by the Panel (61) yet, the Commission considered that the provision of raw materials located within a country to national companies is a function which is normally vested in the government. Under general international law, States have sovereignty over their natural resources. While they enjoy large discretion how to organise the exploitation of their natural resources, their sovereignty normally translates into a regulatory governmental power to do so. In this respect, it is irrelevant whether or not a government would habitually engage in this function (62). The Commission therefore found that the provision of soybeans located on Argentinian soil to the Argentinian biodiesel industry is a function which is normally vested in the government.

(165) Following disclosure of the information document, CARBIO objected to the Commission's decision that a State must be held accountable for the decisions taken by privately owned suppliers of soybeans cultivated within that State. In order to fulfil the ‘normally vested’ criterion, CARBIO claimed, that all decisions regarding soybeans must be taken for a public purpose. However, as CARBIO stated in its submission, ‘a State may elect to take action regarding its natural resources.’ This confirms the Commission's stance that such sovereignty normally translates into a regulatory governmental power to organise the exploitation of a state's natural resources. Therefore, it is not necessary that all decisions regarding soybeans must be taken for a public purpose in order to fulfil the ‘normally vested’ criterion. Otherwise, such entities could be considered as ‘public bodies’ and attribute their actions to the State, which is not the case under the entrustment or direction scenario. Under this latter case, there is no need that all actions from private bodies can be attributed to the State, but only the specific action examined (i.e. the provision of inputs for less than adequate remuneration). Consequently, the Commission rejected the claim and concluded that the provision of raw materials, such as soybeans, in pursuing objectives of public interests (such as the development of the biodiesel industry) is a function which is normally vested in the government.

(166) As regards the ‘in no real sense differs’ criterion, the Commission noted that the language originated in the 1960 report of the Panel on Review Pursuant to Article XVI:5, in which similar language was used in respect of producer-funded levies that were deemed not to differ, in any real sense, from government practices of taxation and subsidisation (63). Against that background, this criterion requires an affirmative finding that the provision of goods by the entrusted private bodies does not, in any real sense, differ from the hypothesis that the government had provided such goods itself. The Commission considers this to be the case. Rather than providing the inputs directly to the biodiesel industry in order to achieve the GOA's public policy objectives of boosting the development of the biodiesel industry, including its export potential, the GOA through a set of measures induces private entities to do so on behalf of the GOA.

(167) Following final disclosure, the GOA and CARBIO claimed that the Commission failed to provide any evidence showing that decisions taken by privately owned suppliers on the production and sales of soybeans, cultivated on privately owned land in Argentina, reflect a function that is normally vested in the GOA.

(168) As the Commission set out in recital (164), it considered that the provision of raw materials located within a country to national companies is a function which is normally vested in the government. The GOA or CARBIO did not provide any substantive arguments or evidence rebutting this conclusion and therefore this claim was rejected. The GOA uses soybean growers to achieve a particular policy objective which does not differ to a situation where the GOA itself were the grower of the soybeans directly.

3.2.2.6. Conclusion

(169) Through a set of measures, including export taxes, quantitative restrictions, subsidies to domestic producers, and public policy statements, the GOA induced the domestic soybean growers to sell soybeans locally and ‘entrusted’ or ‘directed’ them to provide this raw material in Argentina for less than adequate remuneration. The measures at issue achieved the desired effect to distort the domestic market of soybeans in Argentina and to depress the price to an artificially low level to the advantage of the downstream biodiesel industry. The function to provide soybeans for less than adequate remuneration is normally vested in the government in view of the public objective to support the biodiesel industry and the practice of the soybean growers producing companies to carry it out does not, in any real sense, differ from practices normally followed by governments when pursing similar policy objectives through other forms of support (such as grants or revenue foregone).

(170) The Commission thus concluded that the GOA provided an indirect financial contribution within the meaning of Article 3(1)(a)(iv) and (iii) of the basic Regulation, as interpreted and applied in line with the relevant WTO standard under Article 1.1(a)(iv) and (iii) of the SCM Agreement.

3.2.2.7. Price or income support

(171) The Commission considers that the categories of ‘financial contribution’/‘income or price support’ are not mutually exclusive. In fact, the Appellate Body has confirmed that the ‘range of government measures capable of providing subsidies [under ‘financial contribution’] is broadened still further by the concept of ‘income or price support’ in paragraph (2) of Article 1.1(a)’ (64). This interpretation is also consistent with the object and purpose of the SCM Agreement, which is ‘to increase and improve GATT disciplines relating to the use of both subsidies and countervailing measures’ (65).

(172) Article XVI of the GATT 1994 covers ‘any subsidy including any form of income or price support, which operates directly or indirectly to increase exports of any product from, or to reduce imports of any product into, its territory’.

(173) The terms ‘any form’ indicate the broad scope of this category, in the sense that it includes all forms that directly or indirectly provide income or price support. In this sense, the dictionary meaning of ‘form’ refers to ‘one of the different modes in which a thing exists or manifests itself; a species, kind, or variety’ also a ‘manner, method, way’ (66). Thus, ‘any form’ includes any way or manner in which the government provides income or price support to someone.

(174) ‘Support’ denotes ‘the action of contributing to the success or maintaining the value of something’ (67). The term ‘support’ is often used in the context of agriculture, as referring to government support programmes (68). In this case, the meaning of ‘support’ in Article 1.1(a)(2) of the SCM Agreement refers to the action of the government that contributes to the success or maintaining the value of prices or of the income received by someone.

(175) Finally, the reference ‘in the sense of Article XVI of the GATT 1994’ implies all forms of income or price support that directly or indirectly increase exports of ‘any product’ from a WTO Member's territory or reduce imports of this product within its territory. This effect, potential or actual, is explicitly contemplated in Article XVI:1 of the GATT 1994: ‘… including any form of income or price support, which operates directly or indirectly to increase exports of any product from, or to reduce imports of any product into, its territory’.

(176) In sum, Article 3(1)(b) of the basic Regulation covers government measures of any form that directly or indirectly provide income or price support to someone and that has as an effect, potential or actual (69), increasing exports of any product from a WTO Member's territory or reducing imports of this product within its territory. This interpretation is also consistent with the object and purpose of the SCM Agreement that is ‘to increase and improve GATT disciplines relating to the use of both subsidies and countervailing measures’ (70).

(177) In line with this interpretation, in addition to examining whether the set of measures adopted by the GOA could be characterised as ‘financial contribution’ in the form of provision of goods for less than adequate remuneration, the Commission also analysed whether the GOA's set of measures could also be characterised as income or price support falling under Article 3(1)(b) of the basic Regulation. In so doing, the Commission first examined whether the GOA intends to support the creation and development of the biodiesel industry; second, what kind of measures the GOA adopted to support the biodiesel industry; and third, whether those measures qualified as ‘any form of income/price support’ in the sense of Article XVI of GATT 1994.

(178) Following disclosure of the information document, the GOA and CARBIO claimed that the Commission based itself on an inadmissibly broad interpretation of the terms ‘any form of income or price support’ used in Article 3(1)(b) of the basic Regulation, by arguing that it encompasses ‘all forms that directly or indirectly provide income or price support’ and ‘any way or manner in which the government provides income or price support to someone’.

(179) The Commission rejected this claim. It made its determination in compliance with the WTO jurisprudence and interpretation of ‘income or price support’. As detailed in recitals (186) to (195) below, the Commission did not only look at the effects of the measures taken by the GOA, but also carefully analysed the policy objectives of the measures taken by the GOA as well as their nature and design concluding that the price of biodiesel and soybeans on the Argentinian domestic market ‘include direct government intervention in the market with the design to fix the price of a good at a particular level’ (71). As a result of the policy objectives pursued by the GOA, the domestic biodiesel prices, when compared to the price of the exported biodiesel, are set at an artificially high level, supporting the domestic biodiesel industry (see recitals (189) and (195). At the same time, the price of soybeans is set at an artificially low level through an export tax on soybeans which also supports the domestic biodiesel industry.

(180) Following final disclosure, the GOA did not agree with the Commission's interpretation that the categories of ‘financial contribution’/‘income or price support’ are not mutually exclusive, because of the conjunction ‘or’ in Article 1.1.(a)(2) of the SCM Agreement.

(181) In recital (171), the Commission explained why it did not consider these categories mutually exclusive. The simple linguistic explanation of the word ‘or’ in the text of the SCM Agreement did not alter the Commission's reasoning and therefore the claim was rejected.

(182) The GOA reiterated its claim that the Commission's findings are inappropriately based on an inadmissibly broad interpretation of the terms ‘any form of income or price support’ as used in Article 1.1.(a)(2) of the SCM Agreement and that in order for the export tax regime to fall within the provisions of Article 1.1.(a)(2), the Commission applies an ‘effect-based approach’, which is inconsistent with WTO jurisprudence.

(183) As the GOA did not bring any new supporting evidence to rebut the Commission's conclusions, the Commission rejected the claims.

(184) Following final disclosure, CARBIO also disputed the Commission's findings of income and price support, quoting in their favour another part of the China — GOES Panel Report (72). According to CARBIO, income and price support does not cover situations where ‘a movement in prices is an indirect effect of another form of government intervention’ (73).

(185) The Commission considered that CARBIO's reference to the case-law from China — GOES is not relevant in the present case where the conclusions on income/price support are not based on indirect price effects, but on actions attributable to the GOA which are designed, and which have as their objective, price effects that support the biodiesel industry. This claim is therefore rejected.

3.2.2.8. The GOA's intention to support the domestic biodiesel industry

(186) The legislative acts referred to in recitals (89) to (100) show that the GOA has an explicit policy to support the creation and development of the domestic biodiesel industry. In particular, through Law 26.093 of 12 May 2006 (74), the GOA set out a regime to promote the domestic production and use of biofuels, including biodiesel. That law set up an enforcement authority with the role to promote and control sustainable biofuel production and use (75). Furthermore, that law provides that the Department of Agriculture, Livestock, Fisheries and Food shall promote crops destined to the production of biofuels that encourage productive diversification of the agricultural sector, the Department of Small and Medium-Sized Enterprises shall promote the acquisition of capital assets by small and medium-sized enterprises destined to biofuel production, and the Department of Science, Technology and Productive Innovation shall promote the research, cooperation and transfer of technology between small and medium-sized enterprises and relevant institutions of the Public National Science, Technology and Innovation System (76).

(187) The GOA has provided explicit support since 2001, when Decree 1396 (77) entered into force. That decree set up the Competitiveness Plan for Biodiesel, exempting producers from taxes ‘in order to promote the development of biodiesel’ and stating ‘that the tax component of liquid fuels and natural gas is a fundamental tool for sending economic signals’ (emphasis added). That Plan was supported by the Undersecretary of Fuels in 2001, who assured the promoters of biodiesel production projects that biodiesel would remain tax-free fuel, and affirmed the role of the GOA by promising the establishment of a stable regulatory framework and by announcing that projects on biodiesel would enjoy the benefits of the industrial promotion regime and credits. He further declared that the development of biodiesel must have agricultural producers as protagonists (78).

(188) The promotion of domestic biodiesel was consolidated by Resolution 1156 in 2004, creating the National Biofuels Programme (79) which promoted the technological development of the domestic biodiesel industry by Ministry of Economy and Production (80). The GOA explicitly considered the promotion of the domestic biodiesel industry as part of the Argentinian macroeconomic model (81).

(189) The Centro de Economía Internacional stated in 2011 (82) that the development of domestic biodiesel was aimed at maximising the added value of soy, rather than reducing the use of fossil fuels. Reasons for the development of the biodiesel industry given by this research body were, among others, the growing opportunity to supply the needs of external markets and the differentials in terms of export duties, encouraging production with greater added value over that of basic products such as soybeans (83).

(190) Furthermore, a study conducted by a governmental entity, the National Institute of Agricultural Technology (‘Instituto Nacional de Tecnología Agropecuaria’, INTA) in 2011 (84) concluded that ‘it is common to the biodiesel market that it is stimulated by the State for different reasons through different policies’, ‘[i]n other words, it is likely that the market is artificially stimulated and that, without the presence of the State, it loses economic relevance’, and that ‘the obvious conclusion is that biodiesel does not seem to push the production of soybeans but that the causality goes in the opposite direction’.

(191) This support has continued until after the investigation period, as in February 2018 the Minister of Energy, the Governor of Santa Fe and CARBIO agreed to set up a joint working group to better design and improve the national strategy for biodiesel (85).

(192) In 2010, the GOA set a blending mandate for the domestic market, requiring the fuel companies in Argentina to purchase biodiesel and blend it with mineral diesel before sale (86). This blending mandate was set up together with Biodiesel Supply Agreements between the GOA and biodiesel producers from 2010 until 2015. Those Supply Agreements were established ‘because of the importance of the insertion of biofuels into the energy scheme of the country’ and it was therefore ‘necessary to establish clear guidelines that guarantee efficiently and effectively the achievement of the objectives proposed by the national executive power’ (87), and further ‘taking into account the objectives of the national state to promote the agro industrial activity generating added value to the raw materials produced on national territory’ (88).

(193) As discussed in recitals (265) to (267), the GOA did not sign any Biodiesel Supply Agreements after 2015 but continued to allocate quotas and set the price at which the blending companies have to purchase biodiesel. The quota was based upon the expected quantity required by the domestic market to fulfil the blending mandate. The rest of the Argentinian production could only be exported.

(194) During the investigation period, the price of biodiesel on the domestic market was set on a monthly basis, differentiating for large, large non-integrated, and small and medium companies. The domestic price of biodiesel was based upon the following formula: Cost of soybean oil (as published by the Ministry of Agriculture) + cost of methanol + cost of labour + other costs + return of capital (being set at 3 %) (89).

(195) None of the sampled groups of exporting producers received a quota and supplied the domestic market during the investigation period. However, the average set prices on the domestic market appear to be higher than the average export price, especially for the small, medium, and large non-integrated biodiesel producers. Therefore, by artificially setting the price of domestic biodiesel at an artificially high level, the GOA pursued a policy of providing price support to the small and medium-sized biodiesel industry selling on the domestic market.

(196) Following the disclosure of the information document, the GOA disputed the finding that the domestic price of biodiesel is set at an artificially high level.

(197) The Commission disagreed. To assess the domestic price level of biodiesel the Commission used public data provided by the GOA. That public data showed that the domestic price is set by the GOA and thus is not left to market forces. The GOA did not dispute that it sets the domestic biodiesel prices. Furthermore, the public data showed that prices on the domestic market paid by the companies having access to that market (i.e. the small and medium-sized companies) were higher, as a matter of fact, than the export price. The GOA did not dispute that price difference either. Therefore, the Commission concluded that the domestic price of biodiesel is set at an artificially high level. Consequently, that claim was rejected.

(198) Following the disclosure of the information document, the GOA claimed that the causality connection between the alleged income or price support and a subsequent eff