KOREA – ANTI-DUMPING DUTIES ON IMPORTS OF CERTAIN PAPER FROM INDONESIA
Document: Recourse to Article 21.5 of the DSU by Indonesia Report of the Panel
Date: 28 September 2007
Document codes: WT/DS312/RW
Complainant: Indonesia
Respondent: South Korea
Third parties: Canada, China, EU, Japan, U.S., Taiwan
Dispute stage: Panel
Agreements cited: Art. 5.4, 2.6, 3.1, 4.1, 5.2, 5.3, 5.7, 12.1.1, 6.5, 6.7, Annex I, Annex II, 6.8, 12.2, 2.1, 2.2, 2.4, 5.8, 9.3, 3.2, 3.4, 3.5, 3.7, 6.1, 6.4, 6.9  Anti-dumpingArt. VI:1, VI:2(a), VI:2(b), VI:6  GATT 1994

KOREA – ANTI-DUMPING DUTIES ON IMPORTS
OF CERTAIN PAPER FROM INDONESIA

Recourse to Article 21.5 of the DSU by Indonesia

Report of the Panel

I. INTRODUCTION
1.1 On 22 December 2006, Indonesia requested th e establishment of a panel pursuant to
Article 21.5 of the Understanding on Rules and Procedures Go verning the Settlement of Disputes
("DSU") concerning Korea's alleged failure to im plement the recommendations and rulings of the
Dispute Settlement Body ("DSB") in the dispute . At its meeting on 23 January 2007, the DSB referred this dispute to the
original panel, if possible, in accordance with Artic le 21.5 of the DSU, to examine the matter referred
to the DSB by Indonesia in document The terms of reference are the following:
To examine, in light of the relevant provi sions of the covered agreements cited by
Indonesia in document , the matter referred to the DSB by Indonesia in
that document and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.
1.2 On 5 February 2007, the Panel was composed as follows:
 Chairman: Mr. Ole Lundby

 Members: Ms Deborah Milstein
 Ms Leane Naidin

1.3 China, the European Communities, Japan, the Separate Customs Territory of Taiwan, Penghu,
Kinmen and Matsu ("TPKM"), and the United States reserved their third party rights.
1.4 The Panel met with the Parties on 24-25 April 2007. It met with the Third Parties on
25 April 2007.
II. FACTUAL ASPECTS
2.1 This dispute concerns the implementation by Korea of the DSB recommendations and rulings
in .
2.2 The original anti-dumping investigation on "business information paper and wood-free
printing paper" from Indonesia was initiated on 14 November 2002 and completed on
24 September 2003 with the imposition of anti-dumping duties of 8.22 per cent for Indah Kiat, Pindo
Deli and Tjiwi Kimia, three paper producers in the Sinar Mas Group from Indonesia, and 2.80 per
cent for another Indonesian exporter, April Fine . The Korean Trade Commission ("KTC") also
imposed an "all others" rate of 2.80 per cent. Th e margins for Indah Kiat and Pindo Deli were based
on constructed normal values. Since the verificati on of data pertaining to PT Cakrawala Mega Indah
("CMI"), the trading company
1 that sold in Indonesia the subject product produced by Indah Kiat and
Pindo Deli, was not allowed, the KTC calculated CM I's costs on the basis of facts available as
provided for under Article 6.8 of the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement" or "Agreement"). The KTC
calculated all elements of CMI's selling, gene ral and administrative ("SG&A") expenses except
interest on the basis of the data pertaining to April Fine, another trading company subject to the same

1 We note that the Parties have diverging views as to the exact scope of CMI's business. Our references
to CMI throughout this report as "the trading company" that sold the subject product produced by Indah Kiat
and Pindo Deli are without prejudice to our assessment of the KTC's finding on this issue found elsewhere in
this report.
W T / D S 3 1 2 / R W

investigation, and its interest expenses 2 on the basis of the data pert aining to PT Riau Andalan Kertas
("RAK"), subsidiary of April Fine and subject to the same investigation as a producer.
2.3 In the original panel proceed ings, Indonesia raised claims regarding the KTC's dumping and
injury determinations and certa in procedural aspects of the investigation. We concluded, inter alia,
that by basing CMI's interest expenses on the data pertaining to RAK without an adequate explanation
as to why interest expenses were treate d differently from the rest of CM I's SG&A expenses which were
based on April Fine's data, the KTC acted inconsistently with its obligation under paragraph 7 of Annex II
of the Agreement to exercise special circumspection in the use of information from a secondary source.
We also found the KTC's examination of the impact of dumped imports on the domestic industry to be
inconsistent with Article 3.4 of the Agreement. Fi nally, we found that the KTC violated the procedural
obligations set forth in paragraphs 4, 5 and 6 of Article 6 of the Agreement. The original panel report was
adopted by the DSB on 28 November 2005. Both Parties agreed that Korea would have until 28 July 2006
to implement the DSB recommendations and rulings.
3
2.4 The KTC carried out a proceeding in order to implement the DSB recommendations and
rulings. In these implementation proceedings, th e KTC made, among others, a re-determination of
dumping for Indah Kiat and Pindo Deli. The KTC sent its Draft Dumping Re-determination to the
Sinar Mas Group on 23 May 2006 and invited it to submit its comments by 6 June 2006. The Sinar
Mas Group submitted its comments on the Draft Dump ing Re-determination on 6 June 2006. The
Sinar Mas Group submitted four pieces of evid ence along with its comments: CMI's income
statement, CMI's financial statements for 2001 and 2002, a legal opinion to the effect that Indonesian
law does not require CMI to submit its financial stat ements for auditing, and a legal opinion regarding
the scope of CMI's business. In the same le tter, the Sinar Mas Group also sought to access
information used in the KTC's Draft Dumping Re-determination and to comment on the assessment of
the impact of dumped imports on the Korean domestic industry. On 13 June 2006, the KTC disclosed
the requested information regarding its dumping re-determination to the Sinar Mas Group. On
16 June 2006, the Sinar Mas Group responded, arguing that the information used by the KTC was not
appropriate. In its final Re-determination, the KTC decided that the [BCI]
4 per cent interest rate used
for CMI on the basis of RAK's data was reasonable and consistent with the corroborating information.
It therefore calculated the same margins of dump ing for Indah Kiat and Pindo Deli. The KTC also
carried out a new analysis of the impact of dumped imports on the Korean industry, based on the same
data collected in the original investigation. The KTC's Implementation Re port which contained its
final dumping and injury re-determinations was pub lished in the Korean Official Gazette dated
27 July 2006.
2.5 Not persuaded about the consistency with Korea's WTO obligations of the KTC's Re-
determination, Indonesia requested to hold consultations with Korea.
5 Consultations were held on
15 November 2006 but did not yield a mutually-satisfactory solution. Indonesia requested the
establishment of a panel to review the consistency with the Agreement of the measure taken by Korea
to implement the DSB recommendations and rulings.
6 The Panel was established on 23 January 2007
with standard terms of reference.
2.6 Korea requested the Panel to rule that inform ation that had been received by the KTC on a
confidential basis, under Article 6.5 of the Anti-Du mping Agreement, from the interested parties in
the original anti-dumping investigation at issue should not be disclosed to Indonesian company
officials even if these officials we re made part of the delegation th at will represent Indonesia in these
compliance proceedings. Following the exchange of views between the Parties and one Third Party,

2 The terms "interest expenses" and "financial expenses" are used interchangeably in this report.
3 WT/DS312/6.
4 Business Confidential Information.
5 WT/DS312/8.
6 WT/DS312/9.

the European Communities, the Panel adopted addi tional working procedures for the protection of
such business confidential information and communica ted them to the Parties and the Third Parties
through its letter dated 3 April 2007.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
A. INDONESIA
3.1 Indonesia requests the Panel to find that:
(a) The KTC acted inconsistently with Artic les 2.2 and 2.2.2 of the Agreement as it
failed to impute a "reasonable amount for administrative, selling and general costs" in
its calculation of the constructed value of Indah Kiat and Pindo Deli;
(b) The KTC acted inconsistently with its obligations to make a fair comparison under
Article 2.4 of the Agreement and to make a proper determination of dumping under
Article 2.1 of the Agreement by using a constructed normal value for the Sinar Mas
Group that was determined in a manner inconsistent with Articles 2.2 and 2.2.2 of the
Agreement;
(c) The KTC acted inconsistently with Artic le 6.8 and Annex II to the Agreement, in
particular paragraph 7 thereof, by utilising information sourced from RAK rather than
April Fine Paper Trading to calculate the "Reseller Interest Expense" component of
Indah Kiat and Pindo Deli's constructed values;
(d) The KTC acted inconsistently with Articles 6.1, 6.2, 6.4, 6.6, 6.8 and Annex II of the
Agreement by ignoring undisputed facts fro m the prior investigation, re-opening the
record on the overall nature of CMI's activ ities while failing to provide the Sinar Mas
Group with any opportunity to supply relevant information, failing to satisfy itself as
to the accuracy of information actually provided by the Sinar Mas Group, rejecting
information actually submitted by the Sinar Mas Group and improperly resorting to
unreliable secondary information in arriving at its findings;
(e) The KTC failed to comply with its obliga tions under Articles 6.1, 6.2, 6.4, 6.5 and 6.9
of the Anti-Dumping Agreement, by failing to disclose the factual basis for its injury
redetermination and failing to provide the Indonesian exporters with any opportunity
to provide their views;
(f) The KTC acted inconsistently with Artic les 6.1, 6.2 and 6.4 of the Anti-Dumping
Agreement, by failing to provide copies of all information submitted by interested
parties to the concerned Indonesian exporters. To the extent that this information was
designated as confidential information, th e KTC also failed to comply with its
obligations under Articles 6.1, 6.2, 6.4 a nd 6.5 of the Anti-Dumping Agreement by
failing to require a party submitting confid ential information to show good cause for
confidential treatment or to submit a nonconfidential summary thereof or an
explanation as to why such summarization was not possible.
3.2 Indonesia argues that Korea has also failed to respect its obligation under Article 1 of the
Anti-Dumping Agreement to ensure that an anti-dumping measure is applied only under the
circumstances provided for in Article VI of the General Agreement on Tariffs and Trade ("GATT")
1994 and pursuant to investigations initiated and conducted in accordance with the provisions of the
Anti-Dumping Agreement.
W T / D S 3 1 2 / R W

B. KOREA
3.3 Korea requests the Panel to reject Indonesia's clai ms in their entirety and to find that Korea
has properly implemented the DSB recommendations and rulings at issue.
IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the Parties are set out in their written submissions and oral statements to the
Panel, as well as their answers to the Panel's and each others' questions. The Parties' arguments as
presented in their submissions are summarized in this section.
A. FIRST WRITTEN SUBMISSION OF INDONESIA
4.2 The following summarizes Indonesia's arguments in its first written submission.
1. Introduction
4.3 In this dispute, Indonesia is challenging various aspects of the measures taken by the Korea to
comply with the original panel's findings and th e recommendations and rulings adopted by the DSB
on 28 November 2005 in Korea – Anti-dumping Duties on Certain Paper Products from Indonesia.
2. Factual Background
4.4 In its original determination, in determining the constructed normal value for Indah Kiat and
Pindo Deli, the KTC included amounts purporting to represent the expenses incurred by CMI in
reselling the investigated product. The KTC incl uded these amounts in order to capture the total
selling expenses involved in prod ucing and selling the product unde r investigation to unrelated
distributors and end-users in the Indonesian market . The KTC relied on Indah Kiat's and Pindo Deli's
own data to determine the costs of production, in cluding those companies' own SG&A expenses.
However, because CMI's own data was considered not to be usable, the KTC used facts available
within the meaning of Article 6.8 of the Agreement to determine CMI's selling expenses.
4.5 To determine an amount for "Reseller SG&A Expense", the KTC relied on secondary
information sourced from April Fine Paper Trading, an Indonesian trading company that sold the
investigated product both in Indonesia and in export markets. For one particular element of CMI's
SG&A expenses, however, the KTC used a different approach. To determine an amount for "Reseller
Interest Expense", the KTC relied on secondary info rmation sourced from PT. Riau Andalan Kertas
("RAK"), an Indonesian manufacturing company th at manufactured the investigated product in
Indonesia and was affiliated with April Fine Paper Trading.
4.6 In its final report, the original panel upheld I ndonesia's claim that the KTC failed to exercise
special circumspection in its use of secondary info rmation to calculate CMI's interest expenses.
However, the Panel did not rule on Indonesia's claims under Article 2 of the Agreement.
4.7 Following the DSB's adoption of the original panel's report on 28 November 2005, Indonesia
wrote to Korea on 8 December 2005 requesting that Korea implement the panel's findings in a
cooperative manner. Indonesia explained that if the KTC were to use the interest expenses of
April Fine Paper Trading, a trading company "which carried out activities similar to those of CMI" to
calculate CMI's interest expenses, it would find de minimis dumping margins for Indah Kiat and
Pindo Deli.
4.8 On 23 May 2006, the KTC issued the Draft Du mping Re-determination, which described the
manner in which the KTC intended to implement the Panel's rulings regarding the KTC's dumping
determinations. The Draft Dumping Re-determina tion left the KTC's original calculations of

constructed value for Indah Kiat and Pindo Deli ess entially unchanged. The KTC continued to use
the same information sourced from RAK to calculate CMI's interest expenses.
4.9 On 6 June 2006, the Sinar Mas Group provided its comments on the draft report to the KTC.
On 13 June 2006, the KTC forwarded a set of source documents to the Sinar Mas Group. The Sinar
Mas Group commented on these source documents in its letter of 16 June 2006.
4.10 On 27 July 2006, the KTC published its Implementation Report in the Korean Gazette.
Attached to the Implementation Report were two documents, the KTC's Amended Injury
Determination and the final version of the KTC's Dumping Re-determination. In the Dumping Re-
determination, the KTC continued to rely on in formation sourced from RAK to calculate CMI's
interest expenses. Part III.1 of the Dumping Re -determination, which purports to implement these
rulings, contains the entirety of the KTC's reas oning in support for its decision to use secondary
information sourced from RAK to calculate the re levant financial expenses of CMI. The KTC's
reasoning in part III.1 is not entirely clear but appears to be based on three grounds:7
(a) Even assuming that CMI carried out only trading activities, it may incur financial
expenses on account of loans taken:
(i) To finance the purchase of its own buildings, warehouses and goods,
maintenance of inventories, the purchase of company supplies and
equipment, wages for employees, overhead expenses, etc.
8
(ii) To finance investment in manufacturing facilities by other related
manufacturing companies within the same group when certain specific
circumstances prevail.9
(b) There "was no good reason to assume that CMI was a trading company without a
manufacturing function". 10 The KTC took the view that there was no material that
could be used to determine "whether CMI is merely a trading company only with a
selling function or a manufacturing company" 11 and relied on secondary information
regarding the activities of CMI obtained from an Indonesian company called [BCI].12
(c) The information sourced from RAK was corroborated by other information
introduced onto the record during the im plementation process. This corroborative
material consisted of:
(i) Information sourced from DIS regarding CMI's alleged interest expenses in
the year 2002.13
(ii) Information regarding the interest expenses of four Indonesian paper
manufacturing companies,14 three Indonesian companies operating in sectors

7 Indonesia notes that Korea has not yet made availa ble an official translation of the Implementation
Report. Accordingly, Indonesia reserves the right to expand its arguments on r eceipt of Korea’s official
translation.
8 Dumping Redetermination, Exhibit IDN-11(b), p. 3.
9 Ibid, p.4.
10 Ibid, pp.4-5.
11 Ibid, p.4.
12 Ibid, p.4.
13 Ibid, p.5.
14 Ibid, p.5.
W T / D S 3 1 2 / R W

"other than the paper industry" 15, and five Korean companies "doing
wholesale or agency business".16
4.11 The KTC states that grounds (a) and (b) mandate the conclusion that the KTC is entitled to
assume that "CMI incurred some financial expenses".17
4.12 In the Injury Re-determination, the KTC continued to find that the imports under
investigation had caused injury to the Korean industry, based on a revised analysis within the meaning
of Articles 3.4 and 3.5 of the Agreement of the impact of the imports under investigation on the
domestic industry. The KTC did not provide any op portunity to the Indonesian exporters to comment
on these matters.
3. Legal Argument
(a) Claims Arising from the Determination of Dumping
(i) The KTC failed to calculate properly a " reasonable amount for administrative, selling and
general costs" "pertaining to production and sal es" of the investigated product within the
meaning of Articles 2.1, 2.2, 2.2.2, and 2.4 of the Agreement
4.13 The issue before the Panel is not whether CM I could have any interest expenses, but how,
within the meaning of Articles 2.2 and 2.2.2, the reasonable amount of any such expenses pertaining
to the production and sale of the investigated product is to be determined.
4.14 Under Articles 2.2 and 2.2.2, th is determination would be based on the company's own data.
In this case, CMI's data was not accepted and the KTC used facts available within the meaning of
Article 6.8 and Annex II. It is important to note, however, that Article 2.2 continues to apply and to
govern the determination of the constructed value, even in situations where the investigating authority
has recourse to facts available under Article 6.8 as the s ource of some of the data to be included in the
constructed normal value.
4.15 In this case, the KTC did not follow the rules of Articles 2.2 and 2.2.2 in determining the cost
of production and reasonable amounts for SG&A expenses pertaining to the production and sale of the
investigated product. All of the interest expen ses pertaining to the production of the investigated
product were included in the SG&A costs of Indah Kiat and Pindo Deli. All that remained was for the
KTC to add the costs of selling the investigated product.
4.16 The KTC properly used the expenses of April Fi ne Paper Trading, a company with the same
types of activities as CMI, as the proxy for all of the elements of CMI's SG&A expenses but one. To
derive the costs for that one element (inter est expenses), however, the KTC used costs of producing
the investigated product incurred by RAK. Because it had already captured any interest expenses
associated with producing the goods by using production-relate d interest expenses as a proxy for
CMI's selling-related interest expens es, the KTC thereby overstated the selling-related interest
expenses to be included in the c onstructed normal value. Or, put another way, the KTC effectively
double-counted a production-related expense element in its total calculation. Thus, the KTC did not
make an objective and unbiased dete rmination of CMI's interest expenses and acted inconsistently
with its obligations under Articles 2.2 and 2.2.2 to use only a reasonable amount for SG&A expenses
and to use only amounts that reasonably reflect the costs pertaining to producing and selling the
investigated product.

15 Ibid, p.6.
16 Ibid, pp.6-7.
17 Ibid, pp. 4-5.

4.17 Accordingly, the Panel should find that the KT C acted inconsistently with Articles 2.2 and
2.2.2 in its determination of th e constructed normal value for Indah Kiat and Pindo Deli. By
calculating a constructed normal value in excess of what is permitted under Article 2.2 of the
Agreement, the KTC also failed to make a fair comparison between norma l value and export price
within the meaning of Article 2.4 and failed to make a proper determination of dumping within the
meaning of Article 2.1 of the Agreement.
(ii) The KTC failed to use the best information av ailable and failed to use special circumspection
in its use of facts available as required by Article 6.8 and annex II of the Agreement
4.18 The only aspect of the KTC's determination of the constructed normal value within the
meaning of Article 2.2 of the Agreement with respect to which the KTC was required to have
recourse to facts available was the amount of CMI's selling expenses . All other elements of the
constructed normal value we re duly determined and are not in dispute. The only relevant "missing
information" to which Article 6.8 and Annex II applies in this case is the amount of financial expenses
incurred by CMI as a result of its activity of reselling the investigated product or, to use the words of
the original panel, the amount of "financial expenses stemming from its selling activities".
4.19 For practical purposes, in selecting the best info rmation available to represent CMI's financial
activities stemming from its selling activities, the KTC effectively had to choose between two sources
of secondary information – the production company RAK and the trading company April Fine Paper
Trading. The ratio of financial expenses to cost of investigated product sold for RAK is [BCI] per
cent. The corresponding ratio for April Fine Paper Tr ading is [BCI] per cent. Even though it used
April Fine Paper Trading as the source for all other selling expenses, the KTC chose to use RAK as
the proxy for CMI's interest expenses.
4.20 This choice was flatly inconsistent with Article 6.8 and Annex II of the Agreement. Indonesia
submits that an objective and unbiased investigating authority would be compelled to conclude that
the RAK information actually used by the KTC as the secondary source for CMI's selling expenses is
not only far from being the "best fitting" or "most appropriate" secondary info rmation available, but
is, to quote Korea, "disproportionate" and therefore not usable for this purpose.
4.21 The task before the KTC was to arrive at the level of interest expenses associated with the
activity of reselling the product under investigation in Indonesia. However, the RAK interest expense
figures represent the level of interest expenses as sociated with the activity of manufacturing the
investigated product. In contrast, the informati on relating to April Fine Paper Trading's financial
expenses does relate to the activity of reselling the investigated product in the Indonesian market.
Therefore, it is presumptively far more appropriate for the purposes of replacing the missing
information.
4.22 Indeed, during the original panel proceedings, Korea itself recognised that it could not use
"the overall SG&A expenses shown in the income statement of the April Fine subsidiary that bore the
costs for manufacture and sales of the subject merchandise [i.e., RAK]," because "this SG&A expense
rate was disproportionate to the expenses incurred by a company operating at the level of CMI".
18
4.23 By failing even to consider th e comparative merits of the April Fine Paper Trading and RAK
data, the KTC completely failed to respond to a criti cal concern of the original panel – the absence of
a justification for the KTC's preference for the RAK data over the April Fine Paper Trading data.

18 Korea's Rebuttal Submission to the Original Panel, Exhibit IDN-20(b), para 63. See also Korea's
Responses to the Original Panel's Questions following the First Meeting, Exhibit IDN-20(c), paras. 31, 51, 110;
Korea's Opening Statement at the Second Meeting of the Original Panel, Exhibit IDN-20(d), para. 142.
W T / D S 3 1 2 / R W

4.24 Rather than addressing the April Fine Paper Trad ing data and the concerns of the original
panel, the KTC instead devoted its efforts to fi nding new reasons why it was appropriate to use RAK
data. The KTC's reasoning ignores the established fact s and fails to provide any coherent or adequate
justification for the KTC's choice of secondary information.
(iii) The possibility that a trading company c an have financial expenses provides no basis for
using the RAK data instead of the April Fine Paper Trading data
4.25 The undisputed fact that CMI could have some financial expens es does not provide a ground
on which an objective and unbiased authority could prefer RAK data over April Fine Paper Trading
data. This undisputed fact does not, in itself, mean that CMI necessarily had a particular amount of
interest expense to resell the investigated pr oducts or, indeed, say anything about the likely amount of
CMI's interest expenses in a given period. Moreove r, it does not follow from this fact that the RAK
data is more appropriate than the April Fine Pa per Trading data for the purposes of estimating the
amount of CMI's financial expenses. Like CMI, April Fine Paper Trading could have had interest
expenses stemming from its selling activities. The KTC cannot reasonably reject April Fine Paper
Trading as a secondary source just because the amount of those expenses in the period of
investigation turned out to be [BCI] – just as th e Indonesian exporters could not have complained
about the use of April Fine Paper Trading as a proxy had April Fine Paper Trading instead incurred
interest expenses of, for example, 0.5 per cent during the period of investigation.
4.26 Indonesia also notes that the KTC improperly im plies that any and all interest expenses
incurred by CMI – even related to supposed financing of other manufacturing activities by other
companies – could legitimately be included in th e constructed normal value of the investigated
product. Article 2.2 of the Agreem ent as interpreted by the panel in Egypt – Rebar , makes it
abundantly clear that only cost items that are reasonably related to the production and sale of the
investigated product can be included in calculations of constructed value.
(iv) The KTC has no grounds to assume that CMI incurred anything other than selling expenses
pertaining to the investigated product
4.27 The second ground on which the KTC relies to justify its use of RAK data is that the KTC
need not assume that CMI was a trading company that incurred only selling expenses pertaining to the
production and sale of the investigated product. To be precise, the KTC concluded that "the argument
of Pindo Deli and Indah Kiat and [sic.] CMI is a company with a sales function only was groundless"
and that "there was no good reason to assume that CMI was a trading company without a
manufacturing function".
4.28 It is unclear on what basis the KTC states CM I may not have been only a trading company
when that fact was previously undisputed. It is al so unclear what implications the KTC seeks to draw
from this statement and precisely how those implicat ions affect the choice between the RAK data and
the April Fine Paper Trading data.
4.29 However, this statement is without any support in the evidence on record and cannot be used
to justify the KTC's choice of facts available. Any implication that CMI was involved in the
manufacture of the investigated product is flatly contradicted by the factual findings of the original
panel, Korea's own prior statements, and verified evidence on the record. Equally, it is abundantly
clear from the factual findings of the original panel, Korea's submissions to the original panel and the
KTC's determinations that the only activities that CMI carried out in relation to the investigated
product were sales-related activities.

4.30 The KTC's statement is also unsustainable to th e extent that it implies that CMI manufactured
products other than the product under investigation. 19 The only material on record that contains any
reference to CMI manufacturing any goods is the DIS Report. However, for a variety of reasons this
Report cannot be considered as reliable evidence re garding the types of activities CMI conducted.
Yet it constitutes the sole basis on which the KTC purported to depart from the fact, undisputed
before the original panel, that CMI was a trading company which carried out resale activities.
(v) In any event, it is irrelevant whether CMI may have manufactured other products
4.31 In any case, even assuming that CMI was e ngaged in other manufacturing activities –
pertaining to for example to pulp or any other product – it is abundantly clear that CMI carried out
only selling activities relating to the product under inves tigation. Therefore, interest expenses arising
from any manufacturing activities pertaining to other products could not properly be included in the
determination of selling expenses relating to the product under investigation. Any such
manufacturing-related interest expenses that CMI might have incurred would not have "stem[med]
from CMI's selling activities". Instead, they would have stemmed from altogether different activities
involving altogether different products. As such they would be simply irrelevant to the KTC's
calculations of selling expenses pertaining to the product under investigation and could not be
included in the KTC's calculations of constructed valu e. It is, therefore, irrelevant whether CMI may
have manufactured other products a nd speculation to this effect cannot justify the KTC's use of RAK
data as a proxy for CMI's selling expenses.
(vi) The KTC's efforts to check other sources do not validate its choice of secondary information
4.32 In Section III.1(3)B of the Redetermination, the KTC seeks to establish that the RAK data is a
reliable proxy for CMI's selling expenses by compar ing those data against financial expense data
obtained from the DIS Report, four Indonesian companies operating in the Indonesian paper industry,
three Indonesian companies operating in sectors "other than the paper industry", and five Korean
companies "doing wholesale or agency business".
4.33 Because RAK's interest expenses were used to calculate interest expenses on selling activities
in the Indonesian market, the only appropriate comparison that could validate the use of those
expenses would be with the expenses incurred by companies which carried out activities similar to
those carried out by CMI pertaining to the product under investigation. Unfortunately, the KTC failed
to conduct such a comparison. The comparisons used by the KTC do not lend support to its choice of
secondary information because the corroborative info rmation employed does not reflect financial
expenses pertaining to (i) the activity of reselling (ii) the product under investigation (iii) in the
Indonesian market.
4.34 Indonesia requests that the Panel find that th e best information available regarding CMI's
selling expenses, including interest expenses, wa s April Fine Paper Trading's selling expenses,
including interest expenses, and that by failing to use April Fine Paper Trading's interest expenses as
the secondary source for CMI's interest expenses, th e KTC acted inconsistently with Article 6.8 and
Annex II of the Agreement.

19 Indonesia notes that the KTC also appears to have improperly re-opened the record with respect to
the issue of the nature of CMI's role in the production and sale of the investigated product.
W T / D S 3 1 2 / R W

(b) Claims Relating to Korea's Procedural Obligations
(i) The KTC acted inconsistently with Articles 6.1, 6.2, 6.4, 6.6, 6.8 and paragraphs 1,3,5,6,
and 7 of Annex II to the Agreement in reconsid ering the issue of CMI's activities based on a
partial reopening of the record
4.35 During its implementation proceedings, the KTC decided to examine the issue of whether
"CMI is a trading company purely conducting sales of articles". In addressing this issue, the KTC did
not rely on the undisputed positive evidence from the or iginal investigation or the findings of the
original panel. Instead, the KTC relied on secondary material that was not on the record of the
original investigation. It also decided to igno re certain material submitte d by Indah Kiat and Pindo
Deli to the KTC during the original investigation.
4.36 During the implementation process, the KTC gave no notice whatsoever to the Indonesian
exporters that the KTC required additional informa tion regarding the activities of CMI. This cannot
be reconciled with its obligations under Article 6.1 of the Agreement. Similarly, the KTC's decision
to reject information submitted by the Indonesi an exporters on their own initiative during the
implementation process, such as the Arifandhani Opinion and, indeed, the CMI financial statements is
also inconsistent with Article 6.1 of the Agreement.
4.37 These actions were also inconsistent with th e KTC's obligation under Article 6.2 to ensure
that "throughout the anti-dumping investigation all in terested parties shall have a full opportunity for
the defence of their interests". By failing to inform the exporters that it was re-opening an issue that
had not been in dispute in the original investigati on or to request or even accept information from the
exporters regarding that issue, the KTC failed to en sure that the exporters had a full opportunity for
the defence of their interests. The failure to give the Indonesian exporters an opportunity to
participate in this aspect of the KTC's redeterminati on also meant that the exporters were deprived of
their right under Article 6.4 to timely opportunities to prepare submissions based on evidence relevant
to the issue before the KTC.
4.38 To the extent that the KTC re-opened the record of its investigation, its failure to accept and
satisfy itself as to the accuracy of the informa tion submitted by the Sinar Mas Group in its 6 and
16 June Comments is also inconsistent with Article 6.6 of the Agreement.
4.39 To the extent that the KTC rejected in its Redetermination the info rmation regarding CMI's
functions on which its findings in the orig inal determination were based, including, inter alia , the
information set out on page 3 of Indah Kiat's Or iginal Questionnaire Response and page 4 of Pindo
Deli's Original Questionnaire Response, the KTC's actions cannot be justified under Article 6.8 read
with paragraphs 3, 5, and 6 of Annex II to the Agreement. Equally, the KTC's rejection of the
information submitted by the Indonesian exporters in their 6 June and 16 June Comments cannot be
justified under Article 6.8 read with paragraphs 3, 5, and 6 of Annex II to the Agreement.
4.40 Furthermore, during the implementation proceedings, the KTC did not inform the Indonesian
exporters that this information would be rejected and allow the Indonesian exporters an opportunity to
provide further explanations within the meaning of paragraph 6 of Annex II. Finally, by its reliance
on the flawed DIS Report, the KTC failed to act wi th special circumspection within the meaning of
paragraph 7 of Annex II.
4.41 The KTC cannot have it both ways. Since there was no dispute that CMI was involved only
in the resale of the product under investigation a nd the only issue before the KTC on implementation
was the reasonable amount of one element of CMI's selling expenses, there was no need or basis for
the KTC to re-visit the issue of CMI's overall activities. To the extent that it chose to do so in order to
justify its use of RAK data, however, the KTC was obliged to proceed as if it were addressing this

issue for the first time and to conform with the re quirements of Article 6 regarding the collection,
analysis, and rejection of factual information.
4.42 Accordingly, the Panel should find that the KTC acted inconsistently with Articles 6.1, 6.2,
6.4, 6.6, 6.8 and Annex II of the Agreement to the extent that it re-opened the issue of CMI's activities
without informing the exporters of the information it required, by ignoring undisputed facts from the
prior investigation, re-opening the record on th e overall nature of CMI's activities while failing to
provide the Sinar Mas Group with any opportunity to supply relevant information, failing to satisfy
itself as to the accuracy of information actually provided by the Sinar Mas Group, rejecting
information actually submitted by the Sinar Ma s Group and improperly resorting to unreliable
secondary information in arriving at its findings.
(ii) The KTC failed to comply with Articles 6.1, 6.2, 6.4, 6.5 and 6.9 of the Agreement in making
its re-determination of injury
4.43 The original panel concluded that KTC acted inconsistently with Article 3.4 of the Agreement
with respect to its assessment of the impact of dumped imports on the domestic industry.
Accordingly, KTC was under an obligation to implem ent the original panel's findings by revising its
original injury determination. In order to have a full opportunity to defend its interests during the
injury redetermination, the Sinar Mas Group explicitly requested the KTC, in its 6 June Comments, to
provide relevant information and essential facts relate d to the proposed injury determinations and to
be provided with an adequate opportu nity to defend its interests. D espite this explicit request, which
was acknowledged by the KTC in its Dumping Redete rmination, the KTC did not disclose the factual
basis of its Injury Redetermination to the Indonesi an exporters and did not provide them with any
further opportunity to comment on the issue of injury.
4.44 Accordingly, Indonesia requests the Panel to fi nd that KTC has acted inconsistently with
Articles 6.2, 6.4, 6.5, and 6.9 of the Agreement by failing to disclose any information regarding its
injury redetermination and by refusing the Indonesian exporters an opportunity to comment.
(iii) The KTC failed to comply with its obligations under Articles 6.1, 6.2, 6.4 and 6.5 of the
Agreement
4.45 In its Dumping Redetermination, the KTC states that it conducted the Dumping and Injury
Redetermination based on materials secured in th e original investigation and without receiving or
obtaining new submissions or materials from interest ed parties. However, Indonesia understands that
the KTC received new materials and submissions related to the Redetermination from the Korean
domestic industry or possibly other sources. Thos e documents have not been made available to
Indonesia. Accordingly, Indonesia requests that Korea submit to the Panel all documents received
from all other sources during the course of its impl ementation proceedings. Also, Indonesia requests
the Panel to find that KTC acted inconsistently with its disclosure obligations under Articles 6.1, 6.2,
6.4 and 6.5 of the Agreement.
4. Request for Findings, Rulings and Recommendations
4.46 In the light of the considerations set out above, Indonesia requests the Panel to find that the
KTC acted inconsistently with Article s 2.1, 2.2, 2.2.2, 2.4, 6.1, 6.2, 6.4, 6.5, 6.6, 6.8, 6.9 and
paragraph 7 of Annex II to the Agreement.
4.47 Korea has also failed to respect its obligation unde r Article 1 of the Agreement to ensure that
an anti-dumping measure is applied only under the ci rcumstances provided for in Article VI of the
GATT and pursuant to investigations initiated and conducted in accordance with the provisions of the
Agreement. Indonesia requests the Panel to recomm end, in accordance with Article 19.1 of the DSU,
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that the DSB request Korea to bring the measure at issue into conformity with the GATT and with the
Agreement.
5. Suggestions on Implementation
4.48 It is incumbent on this compliance Panel to ensure that its findings leave no room for the KTC
to avoid proper implementation, thereby prolon ging yet again a WTO-inconsistent measure.
Accordingly, Indonesia requests the Panel to exerci se its authority under Article 19.1 of the DSU to
suggest that on implementation, Korea should determine the dumping margins for Indah Kiat and
Pindo Deli using the methodology and calculations set out in Indonesia's letter to Korea dated
8 December 2005 and should then terminate the measure with respect to those exporters.
B. FIRST WRITTEN SUBMISSION OF KOREA
4.49 The following summarizes Korea's arguments in its first written submission.
1. Background
(a) The Initial Panel Decision
4.50 The Panel's decision of 14 July 2005 in this dispute (the "Initial Pa nel Decision") upheld
virtually all aspects of the KTC's decision in its in itial investigation of uncoated wood-free products
from Indonesia. Among other things, the Panel held that all of the following were consistent with
Korea's obligations under the WTO Agreements:
(i) The KTC decision to treat the three affiliated Indonesian producers of the
"Sinar Mas Group" - Indah Kiat, Pindo Deli, and Tjiwi Kimia - as a single
"exporter".
(ii) The KTC decision to resort to "facts available" to determine the "export
price" and "normal value" for Tjiwi Kimia, in light of the refusal of that
company to respond to the KTC's questionnaire.
(iii) The KTC's decision not to consider th e purported CMI financial statements,
which were submitted only after the ve rification (and long after the deadline
for the Sinar Mas Group's response to the KTC's initial request for those
documents).
(iv) The KTC decision to resort to "facts available" to determine the "normal
value" for Indah Kiat and Pindo Deli, in light of the refusal of CMI to provide
requested information and to allow a full verification of the limited
information that was submitted.
(v) The KTC decision to base the normal value for Indah Kiat and Pindo Deli on
a constructed normal value, in whic h the expenses for domestic sales
operations were based on "facts available".
(vi) The KTC's determination that a company performing domestic sales
operations for Indah Kiat and Pindo Deli would incur some amount of
interest expenses, which should be included in the calculation of the
constructed normal value based on "facts available".

4.51 The Panel also upheld much of the KTC's inju ry determination — including its definition of
the "like product", its assessment of the price effe cts of the dumped imports, and its treatment of
imports by certain Korean producers of merchandise from countries under investigation.
4.52 This is not to say, of course, that the Pane l found that the KTC's initial determination was
perfect. Instead, the Panel identified six areas in which the KTC's determination was not consistent
with Korea's obligations under the WTO Antidumping Agreement. In particular, the Panel found
flaws in (1) the adequacy of the KTC's explan ation of its choice of the amounts used, as "facts
available", to represent CMI's interest expenses in the calculation of a constructed normal value for
Indah Kiat and Pindo Deli; (2) the adequacy of the description of the steps undertaken by the KTC to
corroborate the prices used, as "facts available", to determine the normal value for Tjiwi Kimia;
(3) the adequacy of the KTC's disclosure of th e results of its verification of the Indonesian
respondents; (4) the adequacy of the KTC's disclosure of the constructed normal value calculations to
the Indonesian respondents, (5) the adequacy of the KT C's explanation of its analysis of the impact of
dumped imports on the domestic industry, and (6) the KTC's treatment as confidential information of
a submission by the Korean applicants that was by its nature confidential, without requiring a further
demonstration by the submitter that there was "good cause" for confidential treatment.
4.53 Significantly, the Panel's decision did not take the position that the WTO Antidumping
Agreement precluded the KTC from reaching the determination that it had made. Instead, the Panel
held only that the KTC had failed to provide ad equate explanations of certain aspects of its
determination, and also failed to provide the necessary disclosure of certain documents.
(b) The KTC's Implementation Process
4.54 After the Panel's decision was adopted by the DSB, the KTC undertook a proceeding to
implement the Panel's recommendation. As part of the implementation process, the KTC provided
additional disclosures to the Indonesian respondents of its verification repor t and constructed normal
value calculations, and gave the Indonesian r espondents an opportunity to comment on that
disclosure. It also obtained an explanation from th e domestic Korean industry of the reasons for their
request for confidential treatment of the confidential information in their initial application. It also
provided a detailed description of the methods used to corroborate th e "facts available" information
used to determine the normal value for Tjiwi Kimia.
4.55 All of these actions were described in the KTC's draft Implementation Report, which was
provided to the Indonesian respondents on 23 May 2 006. The Indonesian respondents were given an
opportunity to comment, and any comments they raised were addressed in the KTC's Final
Implementation Report, which was issued on 26 June 2006. Significantly, Indonesia has not objected
to these aspects of the KTC's implementation of th e Initial Panel Decision. Accordingly, in the
interests of brevity, Korea does not discuss them further.
4.56 Indonesia's claims in this proceeding focus on the steps taken by the KTC to implement the
remaining two errors identified in the Panel's ruling: (1) the finding that the KTC had not provided an
adequate explanation for its choice of the "facts ava ilable" interest expense, and (2) the finding that
the KTC had not provided an adequate explanation of its analysis of the impact of dumped imports on
the domestic industry. In order to assist the Panel, a further description of the steps taken by the KTC
to implement the Panel's rulings on those issues is set forth below.
(i) Implementation of the Panel's Finding Concerning the Interest Expense for CMI
4.57 As noted above, the Initial Panel Decision he ld that the KTC had failed to provide an
adequate explanation of its decision to use the inter est expenses reported in the financial statements of
RAK as a surrogate for the interest expenses of CMI, given Indonesia's assertion that CMI acted
solely as a trading company. In the KTC's view, this ruling raised two distinct issues: (1) whether a
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company acting solely as a trading company might incur expenses comparable to those reported by
RAK, and (2) whether the evidence supported Indo nesia's claim that CMI's performed only sales
activities.
4.58 On the first of these issues, the KTC concluded that there was no particular reason to assume
that the interest expenses of a company engaged solely in sales would differ from those for a company
financing only manufacturing activities (or, for that matter, a company that, like RAK, financed both
sales and manufacturing activities). The KTC based this conclusion on logic and on evidence.
• As a logical matter, the KTC explained that selling companies do have financing
requirements that can lead them to borrow mone y. In addition, the KTC also noted that
selling companies in a conglomerate (such as the Indonesian Sinar Mas Group) may
borrow money to finance the activities of othe r group companies. And, finally, the KTC
also explained that manufacturing companies may have even lower interest expenses
than selling companies — where, for example, the manufacturing company has met its
financing requirements by issuing shares of stock, or has paid off existing debts out of
past earnings.
• As an evidentiary matter, the KTC found that an analysis of companies engaged only in
selling activities often had significant interest expenses — in excess, for example, of
those reported by RAK. Thus, the evidence did not support Indonesia's contention that
all trading companies have similar interest e xpenses, and that those interest expenses are
lower than the expenses of companies engaged in manufacturing.
In light of these considerations, the KTC concluded that there was no a priori reason to assume that a
company engaged only in trading activities would ha ve a different interest expense rate than a
company engaged only in manufacturing activities.
4.59 Given this conclusion, it was, quite frankly, irrelevant whether CMI was engaged solely in
trading activities, or whether it had more extensive operations. Nevertheless, the KTC proceeded to
address to the question whether the evidence suppo rted the Sinar Mas Group's (and Indonesia's)
contention that CMI was engaged solely in tradin g activities. The KTC found that, as a result of the
Sinar Mas Group's refusal to provide necessary inform ation in a timely manner, it was not possible to
determine the precise scope of CMI's activities. Based on the available information, it was not
possible, for example, to determine whether CMI ha d an extensive domestic sales network or whether
it maintained substantial product inventories in ware houses, which might have led it to have different
cash flows than April Fine. Indeed, it was not ev en possible to determine whether CMI's activities
were limited only to sales — since there was some information before the KTC indicating that CMI
was engaged in some manufacturing activities. As a result, even if Indonesia were correct in asserting
that the interest expenses of a company are determin ed primarily by its activities, the evidence before
the KTC did not allow it to conclude that CMI's activities were equivalent to those of April Fine.
4.60 Finally, the KTC examined whether the interest expense rate that it had previously calculated
for RAK could be corroborated as a reasonable interest expense amount for CMI. In this regard, the
KTC compared the calculated RAK rate to four separate sources of data:
• Information obtained from a third-party inform ation provider concerning CMI's financial
results;
• Information on the interest expenses fo r four other Indonesian paper companies
(including Indah Kiat, Pindo Deli and Tjiwi Kimia and one other company that was not
affiliated to the Sinar Mas Group);

• Information on the net interest expenses of three other Indonesian companies that were
not engaged in paper manufacturing; and
• Information on the net interest expenses of fi ve Korean companies that were engaged in
the wholesale and retail industries.
 Based on this information, the KTC concluded th at the interest expense rate used as "facts
available" represented a "not unreasonable" estimate of the interest expenses incurred by CMI.
(ii) Implementation of the Panel's Finding Concer ning the Explanation of the Impact of
the Dumped Imports on the Domestic Industry
4.61 As noted above, the Initial Panel Decision held that the KTC's initial explanation of the
impact of the dumped imports on the domestic industry was not adequate, because it failed to
adequately explain its conclusions concerning each of the factors identified in Article 3.4 of the
Antidumping Agreement. Accordingly, as part of its implementation process, the KTC revised its
analysis, and issued a revised explanation of its findings on each of the Article 3.4 factors.
4.62 Significantly, Indonesia has not challenged the substance of the KTC's revised injury
decision. Instead, Indonesia's arguments conc erning the revised injury decision are entirely
procedural. The KTC took the position that its revised injury determination stood in the place of its
original final injury determination, which was made only after the record was closed and all parties
had been given an opportunity to comment on all of the information on the r ecord. As a result, the
KTC concluded that implementation of the Panel deci sion required only that it revise its final analysis
and explanation, without reopening the record fo r new submissions or comments. By contrast,
Indonesia claims that the KTC should have given the Indonesian respondents an opportunity to see a
draft of the revised determination and to submit comments on the draft.
2. Argument
(a) The KTC's Selection of Facts Available Interest Expense Amount was Consistent with
Korea's Obligations under the WTO Agreement
(i) The KTC Correctly Determined that the Preci se Scope of CMI's Activities Could Not be
Ascertained
• Indonesia's Description of CMI's Role in the Sinar Mas Group is not Supported by the
Evidence before the KTC

4.63 Indonesia's arguments concerning the appropriate interest expense to be included in the
constructed normal value as "facts available" for CMI's information are premised on the assumption
that CMI acted solely as a trading company pe rforming the same tasks as the Singaporean-based
company April Fine. Indonesia has contended th at its description of CMI's activities was never
disputed, and that Korea itself admitted during the initial panel proceeding that CMI's activities
related solely to selling products manufactured by other Sinar Mas Group companies. All of
Indonesia's arguments concerning the CMI interest expense issue turn on the assumption that CMI's
activities and financing requirements were known, undisputed and equivalent to April Fine's.
4.64 In support of this assumption, Indonesia has referred to statements in the KTC's
determinations and Korea's submissions to this Panel during the initial panel proceedings that
indicated that CMI handled sales of the subject merchandise for the producers Indah Kiat and Pindo
Deli. However, those statements by their terms only describe what the Sinar Mas Group had told the
KTC. They never purported to provide a description of the full range of CMI's activities with respect
to all of the merchandise it handled. And, more importantly, they clearly do not reflect the position
Korea took before the Panel.
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4.65 In fact, Korea explicitly took the position that the full range of activities performed by CMI
with respect to both subject and non-subject merc handise could not be ascertained due to the Sinar
Mas Group's lack of cooperation. As Korea explained in its response to Indonesia's questions
following the first substantive meeting,
Because the Sinar Mas Group did not permit the KTC to examine CMI's financial
statements or accounting records, the KTC had no basis to determine whether CMI
did not, in fact, incur expenses for office, warehouse or manufacturing facilities.20
 As a result, Korea never conceded that Indon esia had correctly described CMI's role in the
Sinar Mas Group's sales process. To the contrary, Ko rea clearly stated that it did not agree that
Indonesia's characterization of CMI's role was substantiated by the evidence.21

4.66 Significantly, the KTC's Final Implementation Report did not take the position that CMI was
engaged in warehousing or manufacturing or other non-sales activities. Instead, it held only that, as a
result of the Sinar Mas Group's non-cooperation, th ere was insufficient evidence on the record to
support the Sinar Mas Group's argument that CMI performed only trading functions. That position is
entirely consistent with the view expressed by Korea during the initial panel proceedings, and with the
evidence available to the KTC.
4.67 Finally, it should be noted that Indonesia's characterization of Korea's position ignores the
clear distinction that Korea had drawn during th e initial Panel proceedings between the financing
requirements of CMI and April Fine. In these ci rcumstances, there is no basis for Indonesia's
assertion that CMI's activities and financing requirements were known, undisputed and equivalent to
April Fine's. As a result, Indonesia's arguments simply collapse.
• The Additional Information Submitted by the Sinar Mas Group during the Implementation
Proceeding Did Not Confirm Its Description of CMI's Role

4.68 During the course of the KTC's implementation proceeding, the Sinar Mas Group attempted,
once more, to submit the purported CMI income stat ement that it had submitted after the conclusion
of the verification in the original investigation. The Sinar Mas Group also submitted documents that
it claimed came from CMI's accounting system — a pparently as evidence supporting the accuracy of
the purported income statement. In additi on, the Sinar Mas Group submitted opinions from
Indonesian law firms contending (1) that, under Ind onesian law, CMI was not required "to submit its
financial statement (annual account) to a public accountan t for audit," and (2) that, based on a review
of certain documents provided to it by CMI, it has concluded that CMI "has never being runs or
operates in manufacturing industrial sector". Finally, the Sinar Mas Group also asked the KTC
conduct another on-site verification to resolve any questions about the accuracy of this information.

20 See Korea’s Response to Indonesia’s Questions following the First Meeting of the Panel, para. 11.
21 In this regard, Korea specifically noted that th e information requested from CMI, which the Sinar
Mas Group had refused to provide, was needed to confirm the accuracy of the Sinar Mas Group’s description of
CMI’s role. As Korea explained,
{T}he KTC needed access to the CMI financia l statements and accounting records at
verification for a number of reasons.... They were also needed to confirm the accuracy of the
Sinar Mas Group’s description of CMI’s activities was correct, and that CMI was not
incurring expenses for activities (such as warehousing) that the Sinar Mas Group claimed it
did not perform.
See Korea’s Response to Panel Questions following the Second Meeting of the Panel, para. 18
(emphasis added).

4.69 The KTC's Final Implementati on Report took the position that the purported CMI income
statement, the alleged CMI accounting documents, and the legal opinion concerning the audit
requirements under Indonesian law were not part of the record and were not relevant to the
implementation analysis. As the KTC explained, th ose documents related to the question whether the
purported CMI income statement was complete, accu rate and reliable. However, the KTC's initial
determination on that issue had been upheld by the Panel and was not being reconsidered in the
implementation proceeding.
4.70 On the other hand, even though the separate legal opinion concerning the scope of CMI's
activities was not a part of the record, the KTC did analyze and consider its contents. As the KTC
noted, that opinion's conclusion were expressly conditioned on the assumptions that: (1) the
documents provided to the law firm "are valid, accu rate, appropriate with the original, and no{t}
amended.", and (2) that CMI "already fulfils its oblig ations in appropriate with the applicable law and
regulation in Indonesia". Without verification that the documents in question were "valid, accurate,
appropriate with the original, a nd no{t} amended.", there was no b asis for determining whether the
law firm's assumptions were correct. As a result, the KTC did not consider the law firm's opinion to
provide a reasonable basis for determining the scope of CMI's activities.
4.71 In these circumstances, there was no evidentiary basis for concluding that CMI performed the
same role on the Sinar Mas Group's sales that April Fine performed on sales in Indonesia. Instead, the
precise nature of CMI's role could not be determined.
4.72 As discussed more fully below, this finding was not critical to the KTC's analysis. Instead,
the KTC's determination found that, whether or not CMI was engaged solely in selling activities, the
interest expense amount assigned as facts available was reasonable. Nevertheless, the KTC clearly
was correct in finding that the Sinar Mas Group's re fusal to cooperate in the initial investigation had
created a situation in which the KTC could not ma ke a finding about the scope of CMI's activities.
Contrary to Indonesia's claims, the mere recognition of the consequences of the Sinar Mas Group's
refusal to cooperate did not give rise to an ob ligation to allow the Sinar Mas Group a new opportunity
to submit new information to make up for its previous lack of cooperation.
(ii) The KTC's Selection of a Facts Available Interest Expense for CMI Was Based on an
Unbiased and Objective Evaluation of the Facts
• Implementation of the Initial Panel Decision Di d Not Require the KTC to Use the Interest
Expenses of a Trading Company as "Facts Available" for the CMI-Related Expense

4.73 Indonesia has asserted that the Initial Panel D ecision held that the KTC could not use the
interest expenses of a manufacturing company as "facts available" for the interest expenses of CMI.
But that assertion is plainly incorrect.
4.74 To begin with, the Panel did not make any findings concerning the full scope of CMI's
activities. The absence of such findings is hardly surprising. As discussed above, the Sinar Mas
Group's failure to cooperate in the investigation prevented any firm conclusions from being drawn
about CMI's role.
4.75 Furthermore, even if it had been clear that CM I's role was limited to trading activities, the
Initial Panel Decision specifically recognized the po ssibility that it might be appropriate to use a
manufacturing company's interest expenses as "facts available" for a company that was engaged only
in trading. As the Panel explained,
Notwithstanding our observation that the activities carried out by these two types of
companies would normally be different from one another, we do not exclude the
possibility that - in a given investigation - using the information relating to these
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companies for one another may be allowed pr ovided that the reasons for that course
of action are adequately explained in the IA's determinations...
We have seen no explanation on the record as to why the KTC decided to use the data
relating to a company whose activities were le ss similar to CMI, i.e. [[Company B]],
although it had in its possession data relati ng to a company, [[Company A]], which
carried out activities similar to those of CMI. This, in our view, runs counter to the
obligation to exercise special circumsp ection in the use of information from
secondary sources when applying facts availa ble, as set out under paragraph 7 of
Annex II.22
 Thus, the only error identified by the Panel wa s a lack of explanation. As the Panel itself
admitted, the use of a manufacturing company's inte rest expenses as "facts available" for a trading
company would be sustainable, as long as the KTC provided an adequate explanation for its decision.
• The Evidence Before the KTC Corroborated the Interest Expense the KTC Selected as Facts
Available for CMI

4.76 Indonesia has contended that the KTC was faced with a simple choice: It could choose either
to use the interest expense rate calculated from the RAK financial statements or the interest expense
rate calculated from the April Fine financial statem ents, or nothing else. In Indonesia's view, the
KTC's use of the RAK interest expense rate w as unreasonable, given that RAK was a manufacturing
company, while both CMI and April Fine were "trading companies".
4.77 But Indonesia's argument ignores several salient facts.
4.78 First, contrary to Indonesia's assertions, the eviden ce suggested that there were differences in
the financing requirements of April Fine and CMI.
4.79 Second, as discussed above, the evidence before the KTC did not establish that CMI's
activities were limited to a trading function. In stead, as the KTC found, the scope of CMI's activities
could not be determined. Thus, there was no basi s for assuming that CMI's activities were equivalent
to April Fine's.
4.80 Finally, both economic theory and the evidence gath ered by the KTC demonstrated that the
nature of a company's activities did not dictate the amount of interest expenses it would incur.
Instead, as the KTC explained, there were a number of reasons companies engaged solely in trading
activities might have substantial interest expenses, while companies engaged in manufacturing might
have lower expenses. This analysis was borne out by the KTC's review of the interest expenses of a
number of Korean companies engaged in wholesale and retail activities. Thus, the linkage assumed
by Indonesia between the scope of a company's activities and its interest expense simply did not exist.
4.81 In this regard, the arguments presented by I ndonesia reflect a fundamental misunderstanding
of the nature of corporate finance. In very si mple terms, a company incurs interest expenses only
when it borrows money from sources that charge inte rest (such as bank loans). A company that does
not need to borrow money (either for itself or for any affiliates for which it provides financing) does
not normally incur interest expenses. However, the fact that a company does not need to borrow
money does not mean that its activities do not require any financing. Instead, it may mean only that
the company has chosen to finance its activities using sources that do not charge interest (for example,
share offerings, or retained interest, or "commiss ions" from affiliates). Thus, the absence of interest
expenses may simply mean that the company has c hosen to finance its activities from sources that do
not charge interest — and not that the company does not have activities that require financing.

22 See Initial Panel Decision, paras. 7.110-11 (emphasis added) [sic.].

4.82 As a result, the interest expenses of sales companies may differ dramatically, even though
other expenses they incur (such as salesmen's salaries or office rent) are similar. Indeed, one would
expect two sales companies with the same numbe r of salesmen to have roughly similar salary
expenses. One would expect companies with simila r office layouts to have similar overhead costs.
However, there is no reason to expect two sales comp anies with the same number of salesmen to have
the same interest expenses — because one might finance its activities solely through borrowings (and
thus have substantial interest expense), while the other may finance similar activities through other
mechanisms (for example, share offerings or retained interest or commissions from affiliates) that do
not result in interest expenses.
4.83 In these circumstances, Indonesia's arguments regarding the KTC's selection of the "facts
available" interest expense for CMI are simply without merit.
(b) The KTC was not Required to Allow the I ndonesian Respondents to Submit Additional
Comments on Its Revised Injury Analysis
4.84 As noted above, the Initial Panel Decision held that the KTC's initial explanation of the
impact of the dumped imports on the domestic industry was not adequate, because it failed to
adequately explain its conclusions concerning each of the factors identified in Article 3.4 of the
Antidumping Agreement. Accordingly, as part of its implementation process, the KTC revised its
analysis, and issued a revised explanation of its findings on each of the Article 3.4 factors.
4.85 Indonesia has not challenged the substance of the KTC's revised injury determination at all.
However, it claims that the KTC committed a pr ocedural error, because it failed to give the
Indonesian respondents an opportunity to see a draft of the revised injury determination and to submit
comments on the draft. That argument is, however, based on a fundamental misunderstanding of the
nature of the implementation process.
4.86 The KTC's injury determination was not based on new information or new arguments.
Instead, it was based on the information that had alre ady been made available to the parties and on
which the parties had already been allowed to comment in the original KTC investigation. Indonesia's
challenge to the original KTC determination did no t contend that the Indonesian respondents had in
any way been deprived of their rights to see informa tion or defend their interests with respect to the
original injury analysis. Furthermore, the Pane l found no short-comings in the procedures followed
by the KTC in its original injury investigation.
4.87 Indeed, if the Panel's initial decision had f ound the KTC's explanation of its injury
determination to be adequate, there would have been no reason for any implementation on injury
issues. The only reason that the KTC was required to implement the Panel decision was that the Panel
found inadequate the KTC's analysis of the inform ation and explanation of the decision it had reached
after receiving comments from the parties. As a result, implementation of the Panel decision required
a revision of the KTC's analysis and explanation of its determination. But that is all that
implementation required.
4.88 No additional data relating to the injury issues was obtained in the course of this
implementation proceeding. The issues considered by the KTC in the implementation proceeding
related solely to the analysis of the previously-collected data under the criteria described in Article 3.4
of the Antidumping Agreement, which all parties ha d already had an opportunity to comment upon.
In reaching its revised injury determination, the KTC considered all of those comments, as well as the
holding by the Panel.
4.89 While the KTC's procedures do allow parties to comment on all of the underlying data, they
do not allow interested parties to comment on the KT C's final explanation of its determination once
the final determination has been reached. Becau se the KTC's Implementation Injury Determination
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stands in the place of the original final injury determination, there was no basis for allowing the
parties to comment upon it. Nothing in Korean law or the WTO Agreements required the KTC to
solicit comments on its final determination (and accompanying explanation) after the final
determination is made.
(c) Indonesia's Assertions that the KTC obtained Ne w Information from the Domestic Industry
are Baseless
4.90 Finally, Indonesia has asserted that it "understands that the KTC received new materials and
submissions related to the Rede termination from the Korean domestic industry or possibly other
sources" and that "{t}hose documents have not been made available to Indonesia". That assertion is,
however, unfounded.
4.91 The only "new information" obtained by the KTC during the implementation proceeding
consisted of: (1) information obtained from th e [BCI] regarding CMI's expenses and activities,
(2) information concerning the interest expenses in curred by other Indonesian and Korean companies,
and (3) information from the Korean applicants explaining the "good cause" for their claims for
confidential treatment, and (4) the information subm itted to the KTC by the Sinar Mas Group. The
Indonesian respondents were given access to all of this material during the course of the
implementation proceeding, and were given an oppo rtunity to comment upon it. Indonesia's claims
are, therefore, entirely speculative and completely without merit.
3. Conclusion
4.92 The Initial Panel Decision plainly required the KTC to undertake a further analysis and to
provide further explanations. But, by the same t oken, it very clearly did not dictate any particular
outcome — other than that the KTC base its revised determination on an unbiased and objective
analysis of the evidence.
4.93 The KTC has plainly complied with that requirement. Its implementation decision should,
therefore, be found to be entirely consistent with Korea's obligations under the Agreement.
C.
SECOND WRITTEN SUBMISSION OF INDONESIA
4.94 The following summarizes Indonesia's second written submission.
1. Introduction
4.95 The main issue in this case is whether in calculating constructed normal value and selecting
best information otherwise available to replace miss ing information regarding the interest expenses
incurred by an affiliated re-seller, the KTC acted inconsistently with Kor ea's obligations under the
Agreement. The issue arises because the KTC used as a proxy for this missing information amounts
based on the interest expenses incurred by anot her company that produced the product under
investigation.
4.96 In its first submission, Korea does not directly address Indonesia's arguments regarding the
legal standard governing the KTC's actions. Instead , even though the original panel had specifically
found that a company's interest expenses are related to its activities, Korea primarily argues that there
is no relationship between a company's activities and th e nature of the interest expenses it incurs.
Based on this view, the KTC attributed to CMI amo unts to represent its interest expenses relating to
the re-sale of the product under investigation that were more than three times the total amount of all of
CMI's other SG&A expenses. In addition, these amounts were almost twice to three times the verified
amount of the production companies Indah Kiat's an d Pindo Deli's own interest expenses for their
own production and sales activities.

2. Standard of Review
4.97 Korea's first submission gives rise to two concer ns regarding the standard of review to be
applied by the Panel. First, the Panel may not rely on ex post justifications offered by Korea for the
determination of the KTC. However, Korea has put forward in its first submission a number of
arguments that are not reflected in any way in th e KTC's Dumping Re-determination. In particular,
while the KTC's Dumping Re-determination contains no discussion whatsoever of April Fine Paper
Trading, Korea now seeks to justify its choice of facts available on the ground that CMI's activities
were not equivalent to April Fi ne Paper Trading' s activities. The Panel should not rely on these ex
post arguments to determine whether the KTC's determination is consistent with the Agreement.
4.98 Second, Korea attempts to disavow or ignore ve rified facts on the record of the original
investigation and factual findings by the original pa nel. As Korea points out with respect to the re-
determination of injury, however, the re-determination of dumping also appears to have been based on
the same record as the KTC's original determina tion. The re-determination of dumping was also
based on the same record on which the original panel made its factual findings.
4.99 The KTC cannot depart from, and Korea cannot now dispute, the verified facts from the
original investigation and the factual findings of th e original panel if the factual record on which the
original determination and the original panel's findings were based have not been re-opened or
materially changed. Indonesia recalls that paragra ph 3 of Annex II to the Agreement provides that all
information that is properly submitte d must be taken into account by the authorities. Indonesia notes
also that Korea did not appeal that the findings of the original panel were not "an objective assessment
of the facts of the case" and therefore inconsistent with Article 11 of the DSU.
4.100 Moreover, the Panel must also continue to rely on the factual findings of the original panel to
the extent that the record remains unchanged. The ex tent to which a panel is required to evaluate the
facts in an Article 21.5 proceeding in the same mann er as the original panel depends on the degree to
which the factual record relevant to the finding h as changed. As Indonesia explained in detail in its
first submission, several factual findings of the KTC in its original determination and both factual and
legal findings of the original panel remain valid and pertinent in this Article 21.5 proceeding.
3. Legal Argument
(a) Claims Relating to the Determination of Dumping
(i) Korea has failed to rebut Indonesia's claims that the KTC Acted Inconsistently with
Articles 2-1, 2.2, 2.2.2 and 2.4 of the Agreement
4.101 Indonesia has explained that Article 2.2 of th e Agreement makes clear that investigating
authorities are under an obligation to ensure that am ounts included for SG&A co sts are "reasonable".
Similarly, Article 2.2.1.1 requires that costs be based on sources which "reasonably reflect the cost
associated with the production and sale of the prod uct under consideration" and Article 2.2.2 requires
that costs must "pertain[..] to production and sales … of the like product by the exporter or producer
under investigation".
4.102 In its first submission, Korea did not address this issue. Instead, Korea takes the position that
there is no necessary relation between a company's ac tivities and its expenses, especially with respect
to a company's interest expenses. It is simply not correct that there is no connection between a
company's activities and its expenses. Even if it were correct, the Agreement limits the costs that may
be included in the constructed value to costs that reasonably reflect the activities of producing and
selling the subject merchandise. Costs that do not pertain to the activities of producing and selling the
product under investigation may not be included in th e constructed value. Thus, Korea's position that
the investigating authority may ignore the nature of the activities for which it seeks to determine the
W T / D S 3 1 2 / R W

costs is inconsistent with the straightforward te xt of Articles 2.2 and 2.2.2, which require that
expenses included in the constructed value must be reasonably related to the activities of producing
and selling the product under investigation.
4.103 Contrary to Korea's argument, a company norm ally incurs expenses only in connection with
an activity carried out by that company. Interest expenses are no different to any other expenses in
this regard. Nothing in the text of the Agreem ent suggests that interest expenses may be treated
differently than any other type of general or selli ng expense or need not be reasonably related to the
production and sale of the product under investigation. As the original panel stated, there is a clear
link between a company's activities and its financia l expenses: "Production activities might require
more capital investments and might therefore be more likely to give rise to higher financial expenses.
Selling activities, however, would not normally require as much capital investment as production
activities and might therefore create lower financial expenses".23
4.104 Moreover, the European Communities is incorrect to state that interest expenses differ from
other general or selling expenses in that they normally affect the pricing of all products rather than the
pricing of a particular product. 24 "General" expenses, of which interest expense is but one, by
definition affect all products. Thus, expenses such as office costs, insurance, etc. affect all products.
While it is not clear what the European Commun ities means by "pure" selling expenses, Indonesia
notes that even salesmen's salaries may affect more than one product, as salesmen may generally sell
more than one product.
4.105 In any event, the European Communities appears to acknowledge that, as the original panel
found, interest expenses are generally related to particular activities.
25 However, the European
Communities appears to confuse the question of whet her interest expenses re lated to a particular
activity can be allocated over multiple products, which is not at issue here, with the issue of whether
interest expenses incurred to support a particular ac tivity can reasonably be attributed to a wholly
different activity. The costs of manufacturing inv estigated and non-investigated paper products may
not differ greatly. However, the cost of manufactur ing a paper product and the cost of re-selling it do
differ greatly. Accordingly, any allocation of inte rest expenses to those activities would have to
ensure that no interest expenses attributable to th e manufacture of the paper were attributed to the re-
sale of it.
4.106 In the cases of companies that conduct both manufacturing and selling activities, such as
Indah Kiat, Pindo Deli and RAK in the present case, it is normal and reasonable practice to calculate a
single interest expense ratio that may be applied to the total production and sales costs of the company
to derive a single interest expense. As long as interest expenses are properly allocated between
products, there is no need to separate the interest expenses arising from the manufacturing activities
from those arising from the selling activities because both are included in the constructed value
anyway.
4.107 Moreover, even assuming it was reasonable to assume, as Korea has suggested, that CMI may
have had other manufacturing activities and incurred in terest expenses with respect to those activities,
any interest expenses incurred with respect to those activities would pertain to those activities and not
to the activity of re-selling the product under inves tigation. However, the KTC made no effort to
ensure that interest expenses incurred with respect to any such other activities would be attributed to

23 Original Panel Report, para. 7.110. Thus, it is incorrect for Korea to suggest that the original panel
accepted the KTC's use of RAK data as a proxy for CMI and simply requi red the KTC to provide additional
explanation.
24 Third Party Submission by the European Communities, 19 March 2007, para. 12.
25 Ibid. ("Interest expenses linked to long term obligations, such as those aimed at financing capital
infrastructure to support the manufacturing activities . . .") (emphasis added); Original Panel Report,
para. 7.110.

those activities. Instead, the KTC simply attri buted all of RAK's expenses for the activities to
producing and selling the product to the activity of re-selling the product. This is clear from an
examination of the figures contained in Exhibit IDN-1. Indonesia notes that Korea discusses only the
numerator in its calculation – RAK's interest expe nse ratio – without discussing the denominator to
which it was applied. In fact, the KTC applied this numerator to all of the costs incurred by Indah
Kiat and Pindo Deli, including all manufacturing and sales costs incurred by those companies, in
order to derive the amount the KTC actually attributed to CMI as interest expenses.
4.108 This meant that the amounts attributed to CMI as interest expenses represented the costs of
financing all of the activities of manufacturing and selli ng the investigated product. It also meant that
the amounts attributed to CMI as interest expenses we re more than three times the total amount of all
of CMI's other SG&A expenses. In addition, the am ounts attributed to CMI as interest expenses were
almost twice to three times the amount of Indah Kiat's and Pindo Deli's own interest expenses for their
own production and sales activities.
4.109 Korea has failed to provide any coherent theory as to how the KTC's actions result in the
determination of a reasonable amount of interest pertaining to the activity of re-selling the
investigated product. An objective and unbiased i nvestigating authority could not arrive at a
"reasonable amount" of interest expenses relating to this activity that is based on a source that
includes all of the interest expenses related to the activities of manufacturing and selling the product
and that results in an amount almost twice to th ree times the verified amount of interest expenses
relating to the activities of producin g and selling the product. Thus, the Panel should reject Korea's
arguments and find that the KTC acted inconsistently with Articles 2.2 and 2.2.2 of the Agreement in
its determination of CMI's interest expenses.
(ii) Korea has failed to rebut Indonesia's claim that the KTC acted inconsistently with Article 6.8
and Annex II of the Agreement
4.110 Indonesia has explained that Article 6.8 and A nnex II of the Agreement require the KTC to
select the best information available to replace mi ssing data and to use special circumspection in
doing so. Korea has not responded in any detail to Indonesia regarding the legal standard governing
the KTC's actions in replacing this missing inform ation. However, there are three general points
regarding Korea's apparent approach to the use of best information available that should be borne in
mind while considering Korea's arguments on this issue.
4.111 First, recourse to facts available arises only where some information is missing and some fact
is not known. In every case of recourse to facts av ailable, the investigating authority will have to
make objective and unbiased decisions about how best to replace the missing information. Second,
because recourse to facts available arises only where some information is not known, it is inevitable
that the information used to replace the missing information will not be exactly the same as the
missing information or a perfect facsimile thereof. Nevertheless, the investigating authority is under
an obligation to make an objective and unbiased dete rmination of the best information available.
Third, the fact that some information is not know n does not mean that the investigating authority is
entitled to assume every remotest possibility in replacing that information. Without directly saying
so, Korea's position appears to be that the KTC was entitled to make every conceivable negative
assumption in determining CMI's interest expenses w ith respect to the re-sale of the investigated
product. To the contrary, in replacing missing info rmation, the investigating authority remains under
an obligation to act in an objective and unbiased manner, to determine reasonable amounts for SG&A
expenses, and to act with "special circumspection" in selecting the best information available. Thus,
the fact that CMI's interest expenses are not know n does not mean that the KTC is entitled to assume
that CMI may have had massive interest expenses re lated to other activities and that those expenses
may be treated in their entirety as pertaining to the re-sale of the investigated product.
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(iii) The KTC must consider the nature of the activities carried out by CMI, RAK and April Fine
Paper Trading in choosing secondary information
4.112 Korea's first argument is that the KTC was en titled to ignore the differences in the activities
carried out by CMI (re-selling activities) and RA K (manufacturing and selling activities) in its
analysis because there is no reason to assume that the interest expenses of trading and manufacturing
companies are likely to be different. There are several problems with Korea's position.
4.113 First, Korea's position cannot be reconciled with the rulings of the original panel. The
original panel ruled that an investigating aut hority "would normally be expected to take into
consideration the similarities and dissimilarities betw een the activities carried out by the company for
which information is obtained from secondary sources and those of the company whose information is
used as a proxy" 26 and "[p]roduction activities might require more capital investments and might
therefore be more likely to give rise to higher financial expenses. Sellin g activities, however, would
not normally require as much capital investment as production activities and might therefore create
lower financial expenses". 27 Thus, the original panel adopted the reasonable and commonsensical
position that a company with capital-intensive produ ction activities will normally incur much greater
financing expenses relating to those activities than a re-selling company that does not need to finance
production machinery and similar capital assets. Thus, a Renault garage in Geneva that re-sells cars
would normally be expected to have much lower interest expenses than the Renault factory that
manufactures the cars. Any objective and unbiased i nvestigating authority would also proceed on the
basis of this commonsensical position.28
4.114 Second, Korea states that "bot h economic theory and the evidence gathered by the KTC
demonstrated that the nature of a company's activiti es did not dictate the amount of interest expenses
it would occur". 29 Both propositions are incorrect. Korea states that selling companies "might have
substantial interest expenses" and that "it is possible that a company engaged in manufacturing does
not necessarily have any borrowings at all". 30 But the mere fact that, in the abstract, different
companies may in practice have different interest expenses does not mean that the KTC is free to
make any assumptions it pleases in determining CMI's reasonable interest expenses. The fact that a
given manufacturing company does not in fact borro w to finance its capital infrastructure while a
given selling company needs to borrow to finance its office rental does not change the reasonable and
objective reality that manufacturing companies gene rally incur much greater interest expenses in
financing their long-term capital production assets than selling companies generally incur in financing
the short-term costs of their sales activities.
4.115 In addition, Korea is also incorrect that althoug h one can expect that the "other expenses" of
sales companies will be roughly similar, the interest expenses of sales companies "may differ
dramatically". However, a company's borrowing n eeds and hence its interest expenses are a function
of its other expenses. Generally, the amount of money a company needs to borrow will depend on the
amount of money it needs to conduct its activities. Thus, the amount of office expenses a selling

26 Original Panel Report, para. 7.110. In contrast, Korea argues that "it was, quite frankly, irrelevant
whether CMI was engaged solely in trading activities…". Korea's First Submission, para. 28.
27 Ibid., para. 7.110. In contrast, Korea argues that there is "no a priori reason to assume that a
company engaged only in trading activities would have a different interest expense rate than a company engaged
only in manufacturing activities". Korea's First Submission, para. 27.
28 The original panel suggested that there may be situations in which it may be appropriate to use
interest expenses relating to manufacturing activities as a proxy, see Original Panel Report, para, 7.110.
However, Korea has not argued that ther e are any exceptional situations in th is case that would suggest that the
normal reasonable presumptions about company activities and corresponding interest expenses should not apply.
29 Korea's First Submission, para. 53. See also para 4 (stating that the KTC based this conclusion on
"logic and evidence").
30 Ibid., para. 53.

company needs to finance will directly affect the amount of its interest expenses. It may, therefore, be
expected that companies with si milar costs relating to similar activities will borrow similar amounts
of money and incur similar amounts of interest e xpenses. This is also why interest expenses
pertaining to re-selling a product may reasonably be assumed to be lower than the interest expenses
pertaining to producing and selling the product: the other costs of re-selling the product, and hence
the potential borrowing requirements, are usually much lower than the other costs of producing and
selling the product.
4.116 Third, Korea's position that interest expenses ar e unrelated to a company's activities leads to
absurd results. It leaves investigating authorities absolutely unconstrained in their choice of facts
available in calculating interest expenses. In Ko rea's view, any interest e xpense from any activity of
any company operating in any sector or market can be used as facts available to calculate interest
expenses for another company. Indeed, Korea pr oceeds on the assumption that the interest expenses
of "Indonesian companies not engaged in pa per production" and "non-manufacturing Korean
wholesalers and retailers" could have been used to calculate CMI's interest expenses. This
interpretation reduces Article 6.8 and Annex II of th e Agreement to a nullity as far as the calculation
of interest expenses is concerned.
(iv) The evidence on record establishes that April Fine Paper Trading's information is best suited
to replace the missing information
4.117 Korea argues that (1) "the scope of CM I's activities could not be determined" 31, (2) "[t]hus,
there was no basis for assuming CMI's activiti es were equivalent to April Fine's" 32, (3) April Fine's
"financing requirements could have been signifi cantly different from those of CMI" because of
alleged differences in "the nature of cash flows received by April Fine and CMI". 33 None of these
arguments is consistent with the evidence on the re cord. Indonesia also recalls that these arguments
appear to be impermissible ex post facto justifications.
(v) The nature of CMI's activities pertaining to the investigated product were fully determined
4.118 The nature and scope of CMI's activities pe rtaining to the investigated product were
determined by the KTC in the original investigati on. The KTC ascertained that CMI carried out re-
selling activities for Indah Kiat and Pindo Deli in the Indonesian market. This understanding is
confirmed by the KTC's Verification Report and the fi ndings of the original panel. It would be
inconsistent for Korea to assert anything to the cont rary. After all, the determination that CMI resold
the investigated product in Indonesia is the entire ba sis of the KTC's rejecti on of the domestic sales
data submitted by the Sinar Mas Group. Korea also agrees that CMI did not manufacture the
investigated product. Accordingly, Korea's various assertions that the "precise" or "exact" scope of
CMI's activities could not be determined should not be understood to imply that there could be any
doubt or ambiguity about the fact that CMI performed only re-seller trading functions with respect to
the investigated product.
4.119 At most, Korea can only assert that the KTC w as unable to ascertain from the evidence on
record (1) whether CMI was involved in manufacturi ng products other than the investigated product
and (2) specific details about the manner in which CMI carried out its trading functions, for instance
whether or not it maintained inventories and ware houses. However, the evid entiary record does not
support these assertions.

32 Ibid. See also paras. 6, 38, 42, 52.
33 Ibid, paras. 38, 51.
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4.120 Regarding the first issue, the possibility that CMI may be involved in the manufacture of
other products is wholly irrelevant to the KTC' s calculations of selling expenses pertaining to the
product under investigation and cannot justify any pr eference for the RAK cost information over the
April Fine Paper Trading cost information. No objective and unbiased inv estigating authority could
conclude that CMI was involved in other manufact uring activities. The only evidence that suggests
that CMI could be involved in manufacturing activities is the DIS Report. The defects of this report
were discussed in detail in Indonesia's first submis sion. Korea has not responded to these arguments.
Thus, no unbiased and objective investigating author ity could conclude, based on the evidence before
it, that CMI could be involved in manufacturing products other than the investigated product.
Regarding the second issue, no objective and unbiased investigating authority could conclude that it
was not possible, based on the evidence on record, to determine the manner in which CMI carried out
its trading functions concerning the investigated product.
(vi) CMI and April Fine Paper Trading are similar in all material respects
4.121 Even if Korea was correct th at the KTC could not precisely identify all of CMI's selling
activities, this fact would not support a decision not to use April Fine Paper Trading and instead to use
RAK as a proxy for CMI. As noted above, perfect in formation is never available in situations where
recourse must be had to best information available. But even if perfect information about all details
of the activities carried out by CMI is not availabl e, the basket of selling expenses incurred by April
Fine Paper Trading does not have to be identical to the basket of selling expenses incurred by CMI for
April Fine Paper Trading to be used as a proxy fo r CMI. In any event, Indonesia recalls that the KTC
utilized April Fine Paper Trading data to calcula te CMI's SG&A expenses because to use RAK data
would be "disproportionate". Given that the amount of a company's interest expenses is related to its
other costs, the fact that the KTC considered April Fine Paper Trading to be an appropriate proxy for
CMI's SG&A expenses would suggest that April Fine would also be an appropriate proxy for CMI's
interest expenses.
(vii) CMI's and April Fine Paper Trading's cash flows were not materially different
4.122 Korea's assertion that the difference in how April Fine Paper Trading and CMI were
compensated by their parent companies for their re-selling activities undermined the comparability of
these companies is without basis. Korea sugge sts that because April Fine Paper Trading was
compensated in the form of [BCI], while CMI took a [BCI] per cent mark-up on its re-sales, CMI
would have very different cash flows and financing requirements. Korea does not explain how this is
so or, more importantly, how it makes CMI's activities more similar to RAK's than to those of April
Fine Paper Trading.
4.123 In any event, from what is known about the co mpensation received by the two companies, it
is quite probable that CMI would have a better cash flow position than April Fine Paper Trading and
thus would have less need to borrow. CMI received its compensation at the time of sale (based on
cash on delivery terms) and passed the balance of th e price back to its parent. April Fine Paper
Trading [BCI]. Normally, a commission would be paid after the customer had paid the parent for the
sale and the parent calculated the commission due to April Fine Paper Trading. Thus, April Fine
Paper Trading may have had to wait longer for its mone y than CMI and thus, in this respect at least,
may have had a greater need for short-term borrowing than CMI.
(viii) The KTC failed to take a comparative and active approach in its choice of facts available
4.124 Korea's entire argument in support of the KTC's use of RAK's expenses as facts available
consists of the two negative assertions: first, that th ere is "no particular reason to assume that interest
expenses of a company engaged solely in sales would differ from those a company financing only

manufacturing activities"34; and, second, that "there was no basis for assuming that CMI's activities
were equivalent to April Fine's".35
4.125 Indonesia has rebutted these assertions above. Ev en if they were correct, however, it would
not follow that the RAK data is best suited, most fitting or most appropriate to replace the missing
data. Neither Korea nor the KTC has articulated any affirmative reason why the RAK data is
comparatively more suitable than the April Fine Paper Trading data to replace the missing
information in this case. This failure to provide an affirmative justification cannot be reconciled with
the obligation to take an active and comparative approach to the choice of facts available under
Article 6.8 and Annex II of the Agreement. The Pa nel should reject Korea's arguments and find that
the KTC acted inconsistently with Article 6.8 a nd Annex II of the Agreement in determining CMI's
interest expenses.
(b) Claims relating to Korea's Procedural Obligations
(i) Korea has failed to rebut Indonesia's claims that the KTC acted inconsistently with
Articles 6.1, 6.2, 6.4, 6.6, 6.8 and paragraphs 1, 3, 5, 6, and 7 of Annex II to the Agreement in
re-opening the record
4.126 Indonesia has argued that to the extent that the KTC had partially re-opened the record of the
investigation to re-investigate the issue of CMI's activities, the KTC had failed to comply with the
procedural requirements of Article 6 of the Agreement regarding the conduct of investigations. Korea
argues that the KTC's re-determination "was not based on a finding that CMI actually engaged in
manufacturing. Instead, it reflected only the point that the KTC and Korea had made throughout this
proceeding – that as a result of the Sinar Mas Gr oup's non-cooperation the exact scope of CMI's
activities was not known".36 It is not clear whether Korea means to say that the KTC did not re-open
the record, although elsewhere Kore a's submission appears to take this position. Korea also
mischaracterises Indonesia's claims by stating that Indonesia contends that the KTC was "under an
obligation to conduct a new investigation to determine the scope of CMI's activities". 37 T h i s i s
incorrect because Indonesia does not argue that th e KTC is under an independent obligation to re-
open the record. Indonesia only contends that, to the extent that the KTC chose to re-open the record
and admit new evidence on CMI's activities, it was under an obligation to do so in an even-handed
manner by providing the Indonesian exporters w ith a corresponding opportunity to submit evidence
on CMI's activities.38
4.127 Likewise, Korea has not responded specifically to Indonesia's claims regarding the KTC's
treatment of the material submitted by the Sinar M as Group in its 1 June and 16 June Comments.
Finally, Korea has not responded to Indonesia's claim that the KTC's reliance on the DIS Report
cannot be reconciled with its oblig ations under paragraph 7 of Annex II to the Agreement. In the
absence of any rebuttal by Korea, however, the Pa nel should find that the KTC acted inconsistently
with Articles 6.1, 6.2, 6.4, 6.6, 6.8 and Annex II of the Agreement.
(ii) Korea has failed to rebut Indonesia's claims that the KTC acted inconsistently with
Articles 6.1, 6.2, 6.4, 6.5 and 6.9 of the Agreement in making its re-determination of injury
4.128 Indonesia has argued that Korea had acted inconsis tently with its obligations under Article 6
of the Agreement by failing to provide the Indonesian exporters with any opportunity to participate in
the KTC's re-determination of injury. Korea doe s not deny that, as a factual matter, no such

34 Ibid, para. 27.
35 Ibid, para. 52.
37 Ibid, para. 43.
38 See Indonesia's First Submission, para. 157.
W T / D S 3 1 2 / R W

disclosure or opportunity was provided to the Indonesian exporters during the implementation
proceedings. Korea also mischaracterises Indonesi a's claims. Indonesia does not argue that the
Indonesian respondents should have be en provided with "an opportunity to see a draft of the revised
injury determination and to submit comments on the draft". Indonesia argues that its exporters should
have been provided with disclosure of the fact that the KTC would base its injury determination on
information obtained during the original proceeding a nd an opportunity to comment in light of this
fact.
(iii) Korea has failed to rebut Indonesia's claims that the KTC failed to comply with its obligations
under Articles 6.1, 6.2, 6.4 and 6.5 of the Agree ment by failing to disclose materials received
from the Korean domestic industry
4.129 In its first submission, Indonesia argued that the KTC apparently received new materials
relating to its re-determination from the Korean i ndustry and other sources and acted inconsistently
with its obligations under Article 6 of the Agreement with respect to such materials. In response,
Korea argues that Indonesia's claim is unfounded. However, Korea has failed to provide any index to
the record of the KTC's re-determination and, therefore, has failed to rebut Indonesia's claim.
4. Conclusion
4.130 For the above reasons, Indonesia respectfully re quests that the Panel reject the arguments
advanced by Korea in its first submission and make the findings, rulings and recommendations, as
well as the suggestion on implementation, requested in paragraphs 187-195 of Indonesia's first
submission.
D.
SECOND WRITTEN SUBMISSION OF KOREA
1. An Article 21.5 Proceeding is not a Forum to Revisit Issues on which the Panel's Initial
Determination already Found the KTC's Determ ination to be Consistent with Korea's
WTO Obligations
4.131 In its third-party submission, Japan suggests that the Panel should revisit the issue whether the
information that the Sinar Mas Group withheld fro m the KTC during the original investigation was
"necessary", and therefore justified the KTC's decision to resort to "facts available" for the interest
expense of CMI. As the Panel is aware, that issu e was fully litigated by the parties during the initial
panel proceedings in this dispute. In its decisi on in the initial proceeding, the Panel found that the
KTC had properly determined that the informati on withheld by the Sinar Mas Group was necessary,
and that the KTC was therefore justified in resortin g to "facts available" in light of the Sinar Mas
Group's refusal to provide that information. 39 The KTC was under no obligation to justify the use of
facts available in its implementation determination, when the Panel had already held that the use of
facts available was appropriate.
4.132 Japan's suggestion would, in essence, turn ever y Article 21.5 proceeding into an endless re-
hashing of the arguments and issues that were alread y decided in favour of the defending party in the
initial dispute proceeding. The Panel should reject that proposal. Instead, the Panel should focus its
attention only on those issues raised by the KTC's implementation decision, and should ignore
attempts by third parties to raise issues relating to aspects of the KTC's initial determination that have
already been upheld by the Panel.

39 See Korea – Antidumping Duties on Imports of Certain Paper from Indonesia, WT/DS312/R,
14 July 2005, (hereinafter referred to as "Initial Panel Decision"), paras. 7.43 to 7.56.

2. The KTC Fully Explained the Basis for Its Selection of the "Facts Available"
4.133 Japan also asserts that the KTC was required to explain its selection of the information used
as the "facts available" for the information that the Sinar Mas Group refused to provide. In this
regard, Japan argues that it was not sufficient for Korea simply to argue that the "facts available"
selected was more favourable to the Sinar Mas Gr oup than any of the other information used to
corroborate the "facts available".
4.134 It is, of course, true that Korea's First Written Submission did point out that the "facts
available" used for the CMI data was more fa vourable to the Sinar Mas Group than any of the
corroborating information. However Korea never clai med that the KTC selected the "facts available"
solely on that basis. The comparison with the corroborating information was provided for the very
obvious purpose of demonstrating that the "facts available" had been corroborated, in accordance with
paragraph 7 of Annex II of the Antidumping Agreement.
4.135 The basis for the KTC's selection of the "facts available" interest expense rate for CMI was
fully explained in the KTC's determination (as well as in Korea's First Written Submission). The
KTC specifically considered the question whether it might have been more appropriate to base the
"facts available" interest rate for CMI on the inte rest expense of a trading company (such as April
Fine). However, the KTC concluded, based on both logic and evidence, that there was no reason to
believe that the interest expenses of any company can be predicted based simply on a description of
its activities as selling or manufacturing. In light of these considerations, the KTC concluded that
there was no a priori reason to assume that a company engaged only in trading activities would have a
different interest expense rate than a company engaged only in manufacturing activities. Furthermore,
all of the information available to the KTC indicated that it was reasonable to assume that CMI's
interest expense rate would be similar to the amounts used as "facts available".
3. The KTC Properly Re-Opened the Record to Obtain Additional Information Relating to
Issues on which the Panel had found its Original Determination to be Inconsistent with
Korea's WTO Obligations
4.136 In its initial decision, the Panel found that the KTC failed to adequately explain its selection
of the facts-available interest expense rate for CM I, in light of Indonesia's claims that the KTC had
ignored the differences between the financial re quirements of selling and manufacturing companies.
40
In its implementation proceedings, the KTC re-opene d the record to obtain additional information to
confirm whether the difference that Indonesia had posited was reflected in the evidence. As explained
in the KTC's determination, the evidence did not su pport Indonesia's claim that interest expenses are
directly correlated with the nature of the activiti es performed by the compa ny. To the contrary, a
number of companies engaged solely in selling ac tivities were found to have substantially higher
interest expenses than companies engaged solely in manufacturing.
4.137 Indonesia has not objected to the KTC's decision to re-open the record in this manner.
Instead, it contends that the KTC's analysis of th e additional evidence was flawed, and that the KTC's
decision to re-open the record on the issue of the interest expenses of selling and manufacturing
companies required it also to re-open the record on other issues (such as the nature of CMI's
activities).
4.138 In its third-party submission, TPKM has apparently suggested that the KTC was not permitted
to re-open the record at all. As Korea understa nds it, TPKM asserts that the KTC's implementation
decision should have been based so lely on the information that was pa rt of the record at the time of
the KTC's original determination. TPKM appears to contend that, if the information on the record at

W T / D S 3 1 2 / R W

the time of the original determination is not suffi cient to corroborate the se condary information used
as facts available, then the se condary information may not be corroborated from "new sources of
data". TPKM bases this argument on its concern that the new sources of data "may not appropriately
represent the situation of the prevailing state of the industry or the relevant market, while the original
investigation was taking place".
4.139 Korea agrees with TPKM that, in certain circ umstances, it might not be appropriate for an
investigating authority to rely on information relating to a period after the original investigation
period in making a revised determination. Thus, wh ere the original investig ation focused on events
during 2002, it might not be appropriate for an invest igating authority to use data concerning prices or
costs in 2006 in order to corroborate information re lating to 2002. In Korea's view, because data
relating to one period may not be reflective of sal es or costs in another period, the investigating
authorities must take special care to ensure that the information on which they rely relates to a
relevant time period.41
4.140 On the other hand, Korea does not believe that the text of the WTO Agreements or the past
decisions of panels or the Appellate Body suppor t the view that an implementation proceeding may
only consider information that was actually part of the record at the time of the original investigation.
Indeed, Korea notes that the opening of the record in implementation proceedings has been routinely
accepted in past cases.42
4.141 It appears that TPKM's argument is based on la nguage in paragraph 7 of Annex II of the
Antidumping Agreement, which requires corroborati on of information from secondary sources "from
the information obtained ... during the investigation". When read in context, however, it is clear that
the phrase "during the investigation" relates to only a subset of the information that may be used to
corroborate secondary sources (that is, "information obt ained from other interested parties during the
investigation"). That phrase does not relate to ot her types of information that may be used to
corroborate the secondary sources (such as "information from other independent sources at their
disposal, such as published price lists, official impor t statistics and customs returns"). Furthermore,
the sentence on which TPKM appears to rely expr essly states that it applies only to the extent
"practicable". Under this provision, corroboration is required only to the extent "practicable". If
corroboration is not "practicable", then it is not required.
4.142 Consequently, TPKM's argument would lead to the conclusion that the corroboration
requirement may be eliminated entirely in any im plementation proceeding in which the information
needed for corroboration was not available on the or iginal record — since corroboration would, in
such cases, not be "practicable". In Korea's view, the implementation process under the DSU cannot
have been intended to eliminate substantive re quirements in the Antidumping Agreement. Thus,
where information in the original record is not su fficient to corroborate "facts available", it is proper
for the investigating authority to seek out additional information to corroborate the facts available —
rather than to declare corroboration not "practicable" and thus unnecessary.

41 Korea notes that there may be circumstances in which the time period to which the information
relates is not as important, because the data in question is unlikely to have changed substantially over time. For
example, in evaluating claims regarding the general lending practices of banks or the borrowing practices of
companies, it may be reasonable to consider evidence relating to a period for which data is available, even if that
period does not correspond precisely to the "investigation period".
42 See, e.g., United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods
From Argentina – Recourse to Article 21.5 of the DSU by Argentina, WT/DS268/RW, 30 November 2006.

4. The KTC's Selection of the Facts Available Interest Rate for CMI Was Reasonable and
Consistent with Korea's Obligations under Article 2 of the Antidumping Agreement
4.143 In its third-party submission, the European Comm unities contends that it is not clear which of
the methodologies described in the sub-paragraphs of Article 2.2.2 of the Antidumping Agreement the
KTC relied upon in determining the selling, SG&A e xpenses and interest expenses that were included
in the constructed normal value for Indah Kiat and Pindo Deli. The European Communities suggests
that the KTC appears to have relied upon the met hodology described in sub-paragraph (iii) of the
Article 2.2.2 — which refers to "any other reasonable method, provided that the amount for profit so
established shall not exceed the profit normally reali zed by other exporters or producers on sales of
products of the same general category in the domestic market of the country of origin".
4.144 Korea agrees that the amounts for SG&A and inte rest expenses and for profits that were used
by the KTC were determined using a "reasonable method" and did not "exceed the profit normally
realized by other exporters or producers on sales of products of the same general category in the
domestic market of the country of origin". Ne vertheless, Korea does not believe that arguments
concerning the provisions of sub-paragraph (iii) of Article 2.2.2 are relevant in this proceeding.
4.145 In its First Written Submission in this Article 21.5 proceeding, Indon esia did not make any
specific arguments concerning the application of the individual sub-paragraphs of Article 2.2.2 to the
methodology adopted by the KTC. Instead, Indon esia made only a general claim that the amounts
that the KTC used as "facts available" were not "reasonable". Consequently, Korea does not believe it
is necessary to address the issues raised by the Eur opean Communities concerning the different
methodologies described in the sub-paragraphs to Article 2.2.2, which Indonesia has not raised.
4.146 For the reasons described in Korea's First Written Submission, Korea does not believe there is
anything unreasonable about the figures used by th e KTC. The KTC's selection of the interest
expense amount it used as facts available for CMI wa s fully explained and entirely consistent with the
evidence concerning the expenses of other companies in similar industries and of companies engaged
solely in sales and distribution functions.
4.147 One further point should be noted. While Indonesia has quibbled about one of the individual
elements used in the determination of the overall amounts for SG&A, interest and profit, it is clear
that the aggregate amount used by the KTC for those figures was, in fact, entirely consistent with the
amount the Sinar Mas Group had reported. If anything, the effective rate used by the KTC was
slightly more favourable than the average of the rates reported by the Sinar Mas Group.
4.148 In these circumstances, Indonesia's complaints cannot be taken seriously. The KTC did not
"punish" the Sinar Mas Group companies for their refusal to cooperate. If anything, the KTC
rewarded them. An investigating authority cannot be said to act in an unreasonable manner when the
"facts available" figures it selects are, on the whol e, more favourable to an uncooperative respondent
than the figures that respondent itself submitted. Indonesia's contentions must therefore be dismissed.
5. The KTC's Implementation Procedures Complied Fully with the Procedural
Requirements of Article 6 of the Antidumping Agreement
4.149 The third-party submission by the European Co mmunities raises the issue of the extent to
which the obligations of Article 6 of the Antidum ping Agreement apply to proceedings undertaken to
implement a dispute-settlement decision. Although the analysis presented by the European
Communities is helpful and interesting, it does not, in Korea's view, adequately address the issues
raised in this proceeding.
4.150 As explained in Korea's first submission, Indonesia has raised two distinct procedural
challenges to the KTC's determination. First
, Indonesia claims that, because the KTC re-opened the
W T / D S 3 1 2 / R W

record to include additional evidence to corroborat e the "facts available" used for CMI (and allowed
the parties to comment on that information), the KTC was also required to re-open the record to
permit the Sinar Mas Group to provide additiona l information on all CMI-related issues. Second,
Indonesia also claims that, even though the KTC did not obtain or rely on an y additional information
or argument in reaching its revised injury determ ination, it was required to provide the Sinar Mas
Group an additional opportunity to comment on the revised injury determination.
4.151 Korea understands the European Communities to argue for a frame-work in which the nature
of the procedures required in an implementati on proceeding depend on the extent to which the
implementation requires consideration of additional facts and argument that were not available at the
time of the original investigation. Under this framework, where implementation consists solely of
modification of the text of the investigating author ity's final determination, without consideration of
new information or argument, the provisions of Artic le 6 would not require the investigating authority
to allow interested parties to submit informati on or argument. Thus, the European Communities
would appear to agree that the KTC's implemen tation of the revised injury determination was
appropriate.
4.152 On the other hand, where the implementation i nvolves consideration of new information and
argument, then the framework pr oposed by the European Commun ities would impose an obligation
on the investigating authorities to make disclosures of the new information to the interested parties
and to allow those parties to submit written comme nt. As a result, the European Communities would
appear also to approve of the procedures the KT C undertook to supplement the record in order to
corroborate the "facts available" used for CMI (and to allow the parties to comment on that
information).
4.153 In Korea's view, the framework proposed by the European Communities provides a logical
approach to defining the procedural requirements for implementation. Nevertheless, Korea does not
believe that framework is needed to resolve the issues in this case. Instead, the issues can be resolved
simply by considering the actual obligations set forth in Article 6.
4.154 The provisions of Article 6 do require that investigating authorities provide disclosure to the
interested parties of "relevant information" and "essen tial facts", and to allow the interested parties to
"defend their interests" and to "present their cases".
43 However, those provisions do not require
multiple disclosures of the same "relevant information" and "essential facts", or multiple opportunities
to present arguments. Clearly, at some point the i nvestigating authority is entitled to close off debate
and retreat to its offices to analyze the issues and pr epare a final determination. The requirements of
Article 6 are satisfied as long as the interested par ties have, before that point, been provided access to
all of the "relevant information" and "essential fact s", and been given an adequate opportunity to
present arguments (and respond to arguments by other parties) concerning the "relevant information"
and "essential facts".
4.155 In this case, it is beyond dispute that the KT C did provide the Indonesian respondents with
access to the "relevant information" and "essential facts" relating to the injury determination during
the original investigation. 44 Furthermore, the KTC allowed th e Indonesian respondents to comment

43 Article 6.2 of the Antidumping Agreement requires that parties be given "full opportunity for the
defence of their interests" (and especially an oppo rtunity, upon request, to meet with the investigating
authorities and adverse parties to present arguments and rebu ttals). Article 6.4 requires disclosure to the parties
of "all information that is relevant to the presentation of their cases" (other than confidential information.
Article 6.9 requires disclosure of the "essential facts .. . in sufficient time for the parties to defend their
interests").
44 Indonesia has asserted, without any evidentia ry support whatsoever, that there was some
"mysterious" new evidence obtained by the KTC that was not disclosed to the Indonesian respondents. See
Indonesia’s First Article 21.5 Submission, paras. 181- 86. The simple answer is that there was no such

freely on that material, and to respond to the comments of other parties, during the original
investigation. Since the KTC's revised injury dete rmination did not consider any new information or
any new arguments by interested parties, the KTC was under no obligation to provide additional
opportunities for the Indonesian respondents to submit information or comment on the injury
determination. Instead, having allowed full discl osure and a full opportunity for comment, the KTC
was free to retreat to its offices to draft its final determination — and then to draft the final
determination again after receiving the Panel's decision in the initial proceedings.
4.156 On the other hand, the KTC's revised determin ation concerning the corroboration of the facts
available used for CMI's interest expenses did cons ider additional information. As a result, the
disclosure made on that issue during the original KT C investigation was not sufficient to satisfy the
KTC's obligations under Article 6 — because the discl osure during the original investigation did not
encompass all of the "relevant information" and "essential f acts" relating to that issue. Consequently,
the KTC was obligated to disclose the additional "r elevant information" and "essential" facts to the
Indonesian respondents, and to allow them an oppor tunity to submit arguments relating to that
material. And that precisely is what the KTC did.
4.157 Significantly, Indonesia does not contend that there was any inadequacy in the KTC's
disclosure of information or in the opportunity to comment allowed on the specific issue on which the
KTC re-opened the record — that is, the corro borating information on interest expenses for
Indonesian companies and for companies engaged solely in selling activities. Instead, Indonesia
contends that the KTC defined too narrow a scope fo r submission of information and argument. In
Indonesia's view, once the KTC re-opened the reco rd to corroborate the facts available, it was
required to permit the Indonesian respondents to submit new information supporting their claims
about CMI's actual interest expenses and business activities.
4.158 There is, however, a fundamental flaw in I ndonesia's arguments. Article 6.1 of the
Antidumping Agreement does provide that parties may submit any evidence they consider relevant.
However, nothing in Article 6.1 (or in any other provision of the Antidumping Agreement) requires
an investigating authority to accept the views of the parties on the relevance of information. As long
as the investigating authority allows the party to submit the information, it has complied with its
obligation under Article 6.1. The investigating authority remains free to disregard the information as
irrelevant, as long as it properly explains its decision.
4.159 That is, in fact, what happened in this case. The KTC did not prevent the Sinar Mas Group
from submitting information they considered relevant . It also did not prevent the Sinar Mas Group
from presenting arguments concerning that informa tion. Instead, the KTC simply concluded that
some of the information and argument that th e Sinar Mas Group had submitted was irrelevant,
because it did not relate to the issue being consider ed in the implementation proceeding. The KTC's
decision on that score was reasonable and properly explained. Article 6 of the Antidumping
Agreement does not require anything more.

information. All of new information obtained by the KTC was disclosed to the Indonesian respondents. None
of that information related to the revised injury analysis See Korea’s First Article 21.5 Submission, paras. 63-64.
Indonesia also asserts that the fact that there was no new injury-related information itself constituted an
"essential fact" that should have been disclosed to the Indonesian respondents. See Indonesia’s First
Article 21.5 Submission, para. 179. This argument mere ly confirms that there was, in reality, nothing for the
KTC to disclose. And, in any event, the KTC’s decision not to seek new information relating to its injury
analysis is part of its reasoning, not a "fact". As the Panel in the Article 21.5 proceeding on Oil Country
Tubular Goods recently observed, the disclosure obligations of Article 6.9 do not apply to th e investigating
authority’s reasoning. See United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular
Goods From Argentina – Recourse to Article 21.5 of the DSU by Argentina, WT/DS268/RW,
30 November 2006, para. 7.150.
W T / D S 3 1 2 / R W

E. ORAL STATEMENTS OF INDONESIA
4.160 The following summarizes Indonesia's arguments in its oral statements.
• Opening Statement of Indonesia at the meeting with the Panel
1. Introduction
4.161 The central issue in this case is whether th e KTC used the most appropriate secondary
information to calculate the amount of CMI's inte rest expenses stemming from its activity of reselling
the investigated product in Indonesia. The KTC ha d to choose between the verified interest expenses
of a company engaged in the same activities, April Fi ne Paper Trading, and the interest expenses of a
company engaged in very different activities, R AK. In Indonesia's view, the KTC's decision to
choose the latter could not have been made by an objective and unbiased investigating authority.
4.162 The essence of Indonesia's case is quite si mple. Indonesia objects to the fundamental
disconnect between the missing information in this case and the secondary data that were utilised by
the KTC to replace this missing information. The missing information in this case is the amount of
interest expenses arising from reselling activities . The KTC replaced this missing information by
adding amounts for interest expenses arising from manufacturing activities . In Indonesia's view, no
objective and unbiased investigating authority could calculate the per-ton costs of reselling paper in
Indonesia by using the per-ton costs of manufacturing paper in Indonesia, particularly when verified
secondary information regarding the cost of reselling paper is readily available.
4.163 The legal standards that regulate the KTC's choice are found in Article 2.2 of the Anti-
Dumping Agreement which imposes an obligation on the KTC to use only "reasonable" amounts for
CMI's interest expenses and Article 6.8 and Annex II of the Anti-Dumping Agreement which
mandates that the KTC utilise the "best" available secondary information and to act with "special
circumspection". Korea has not, thus far, contested Indonesia's explanation of these legal standards.
Indonesia therefore trusts that the Panel will carefu lly apply the relevant le gal standards set out in
Indonesia's submissions in reaching its decision.
4.164 Korea has responded only partially to Indonesi a's claims. For instance, Korea has not
meaningfully addressed Indonesia's claim that the KTC doubled-counted manufacturing-related
interest expenses and therefore imputed "unreasona ble" amounts in the construction of normal value
for Indah Kiat and Pindo Deli within the meaning of Article 2.2 of the Anti-Dumping Agreement. In
addition, Korea has not fully clarified whether during the implementation proceedings it rejected
certain information relating to CMI's activities th at remained on the record of the original
investigation.
4.165 Korea's responses to Indonesia's claims under Article 6.8 of the Anti-Dumping Agreement
require the Panel to consider two alternative arguments. 45 First, Korea argues that the KTC need not
compare the activities carried out by CMI and poten tial secondary sources. Second, Korea contends
that the activities performed by CMI are unknown and, therefore, that there is no basis for the
contention that CMI and April Fine Paper Trading carried out equivalent activities. Indonesia has
responded to these arguments in detail in Indonesia's second submission. 46 Indonesia will not repeat
those arguments today. Instead, Indonesia will brie fly touch on the implications of adopting Korea's
position.

45 See Indonesia's Second Submission, paras. 35-36.
46 Ibid, paras. 37-62.

4.166 Before doing so, Indonesia discusses briefly Kor ea's apparent position that the original panel
approved the use of RAK as a proxy and that all that was required for Korea to implement the original
panel's ruling was for the KTC to reproduce the argum ents Korea presented to the original panel as an
"explanation" for the KTC's decision to u se RAK as the secondary source for CMI's selling
expenses.47 This attempt to portray the original panel' s rulings as simply identifying some sort of
disclosure lapse in the KTC's original determinati on is disingenuous. To the contrary, nothing in the
original panel report suggests that the original pane l took the view that, on the facts of this case, the
use of RAK as secondary information to replace the missing information was consistent with the Anti-
dumping Agreement. The original panel's task was to make an objective assessment as to whether the
KTC's establishment of the facts was proper and its evaluation of those facts unbiased and objective.
Clearly, the original panel could not have determin ed that the use of RAK as secondary information
was appropriate in the absence of an explanation of that choice by the KTC.
2. The Basis for the choice of secondary information
4.167 The original panel rulings placed the onus on th e KTC to provide a comparative justification
of its choice of secondary data and the relative suita bility of the RAK data. Nonetheless, the KTC did
not provide any reason why the RAK data is more suit able than the April Fine Paper Trading data. In
Korea's view, apparently, it is not necessary to do so. Korea's position is that interest expense figures
from any company are equally suitable to replace the missing information because there is no linkage
between a company's activities and its interest expe nses. Thus, Korea justifies its use of the RAK
data on the ground that it is "more favourable"
48 than the interest expenses of, to give just two
examples, a company engaged in real estate development in Indonesia 49 and a company engaged in
manufacturing, software and electronic game development in Korea. 50 Korea appears to consider that
interest expense figures from these companies could ha ve been legitimately used as facts available to
determine CMI's interest expenses. However, if these companies can be used instead of a company
with the same activities to determin e CMI's interest expenses, then any company's information can be
used.
4.168 To put it simply, in Korea's view, in every inv estigation where there is missing interest cost
information an investigating authorit y can add interest expense amounts from any source as facts
available. If Korea's position is accepted, inves tigating authorities would be wholly unconstrained in
calculating interest expenses on the basis of facts ava ilable. This is an absurd interpretation of the
Anti-dumping Agreement, with far-reaching consequen ces that the Panel should seek to avoid in its
ruling.
4.169 Korea's basic argument is that the interest expense figures used by the KTC "might" be
incurred by a trading company. 51 But this is not the standard imposed by the Anti-Dumping

47 See e.g., Korea’s First Submission, para. 5.
48 Korea’s First Submission, para. 56 (justifying the interest expense amounts used by the KTC on the
ground that it is more favourable than the interest expense rates obtained from (1) "other Indonesian paper
companies", (2) "Indonesian companies not engaged in paper production", (3) "non-manufacturing Korean
wholesalers and retailers").
49 PT. Duta Pertwi Tbk, one of the "Indonesian companies not engaged in paper production" that Korea
refers to, is engaged in real estate development. See KTC Dumping Redetermination, Exhibit KOR-S-4, pp. 28,
38-39. See also 16 June Comments, Exhibit IDN-8, p.2.
50 Unilab Co Ltd, one of the "non-manufacturing Korean wholesalers and retailers" that Korea refers to,
is actually engaged in manufacturing, software and game development. See KTC Dumping Redetermination,
Exhibit KOR-S-4, pp. 28-29, 38-39. See also 16 June Comments, Exhibit IDN-8, p.2.
51 See Korea's First Submission, para. 53 ("Instea d, companies engaged solely in trading activities
might have substantial interest expenses"), KTC Dump ing Redetermination, Exhibit KOR-S-4, p. 25
("Therefore, the KTC concluded that a trading company engaged solely in selling activities may incur
substantial financial expenses").
W T / D S 3 1 2 / R W

Agreement on objective and unbiased investigating aut horities. It is simply incorrect to adopt the
view that the only discipline on an investigating authority is that it cannot impute figures as facts
available that are outside realm of the possible. To accept the standard implicit in Korea's position,
that everything that is possible is permissible, would seriously undermine the disciplines on the use of
facts available and would render meaningless the re quirement that the investigating authority act
objectively and with special circumspection in selecting the "best" information available.
4.170 In any event, as Indonesia has explained, Korea' s view that the interest expenses of more
similar proxies need not be preferred because interest expense levels are unconnected to the nature of
a company's activities cannot be reconciled with the text of Articles 2.2 and 6.8, read with Annex II of
the Anti-Dumping Agreement
52, the original panel rulings 53, or the verified evidence regarding the
interest expenses of manufacturers and resellers in the Indonesian paper industry. 54 Moreover,
Korea's view is unsupported by basic logic or economic theory.55
4.171 In addition, it is important to note that so me of Korea's assertions about these matters are ex
post justifications for the KTC's actions that were not given by the KTC itself in its Re-determination.
The Panel should carefully compare Korea's presen t assertions about the KTC's reasoning this issue
with the actual statements of the KTC in its Dump ing Re-determination to ensure that the Panel does
not improperly rely on ex post justifications.56
4.172 In this case, therefore, the Panel should find that it is neither, reasonable, objective, nor
circumspect to impute interest expense figures that assume that a trading company such as CMI would
normally incur interest expenses three times greater than the total of all its other expenses and roughly
double the interest expenses incurred in manufacturing the investigated product. This is especially so
because the KTC had available information regarding the interest expenses incurred by a proxy that

52 Indonesia's Second Submission, paras 16-17, 59.
53 Ibid, para. 38.
54 Ibid, para. 43.
55 Ibid, paras. 40-42.
56 For example, Korea argues that an analysis by the KTC of the "evidence" collected from various
Indonesian and Korean companies established that there was no linkage between the scope of a company’s
activities and its interest expense (see e.g., Korea's Firs t Submission, para. 4 ("The KTC based this conclusion
on logic and on evidence ... [a]s an evidentiary matter , the KTC found that an analysis of companies engaged
only in selling activities often had significant interest expenses – in excess, for example, of those reported by
RAK. Thus the evidence did not support Indonesia's contention that all trading companies have similar interest
expenses, and that those interest expenses are lower than the expenses of companies engaged in
manufacturing")). However, the only inference that the KTC actually drew from this evidence in its Dumping
Redetermination was that the financial expense ratio used "was confirmed to be valid"(see KTC Dumping
Redetermination, Exhibit KOR-S-4, p. 29). This statement does not deal with issue of whether similar
companies can be presumed to have similar interest ex penses. Likewise, Korea argues that the KTC concluded
in pages 24-25 of its Dumping Redetermination that, as a matter of logic or economic theory, the nature of a
company’s activities did not dictate the amount of in terest expenses it would incur (see Korea's First
Submission, paras. 27, 53. Korea's Second Submission, para. 9). However, the only inference that that the KTC
drew from these statements in its Dumping Redetermination was that "whether a company is a trading company
or a manufacturing company may not be a criterion to determine whether a company will incur financial
expenses or not" (see KTC Dumping Redetermination, Exhibit KOR-S-4, p.25). This tentative statement does
not address the issue of the level or amount of financial expenses; it is directed towards the separate question of
whether it is legitimate to assume that trading companies would incur any financial expenses. Indonesia notes
that the Appellate Body has stated that "the evidentiary path that led to the inferences and overall conclusions of
the investigating authority must be clearly discernable in the reasoning and explanations found in its report" and
that "a panel's examination must be ... based on ... th e explanations given by the authority in its published
report" (see Appellate Body Report, US – Softwood Lumber VI (Recourse to Article 21.5 by Canada) , paras. 97
and 93).

carried out activities directly comparable to those carried out by CMI, which it could and should have
used to calculate CMI's interest expenses.
3. The proxy most similar to CMI
4.173 Two essential facts are undisputed in this case. First, it remains undisputed that CMI and
April Fine Paper Trading both resold the investig ated product in Indonesia while RAK did not engage
in this activity. Second, it is undisputed th at RAK manufactured the investigated product in
Indonesia, while neither CMI nor April Fine Paper Trading did so. These essential facts are, in
themselves, all that is required to sustain the infere nce that April Fine Paper Trading is more similar
to CMI than to RAK or, in the words of the orig inal panel, that RAK is "less similar" to CMI.
57 None
of Korea's speculation to the effect that CMI ma y have been engaged in manufacturing activities or
that there may be minor differences in the kinds of selling expenses and hence financing requirements
of CMI and April Fine Paper Trading can change these essential facts or the conclusions that flow
necessarily from these facts.
4.174 Korea argues, in effect, that any minor differences between April Fine Paper Trading and
CMI make RAK a suitable proxy for CMI's data. Howe ver, this argument is fallacious. The relevant
question is not whether April Fine Paper Trading and CMI are identical; it is whether April Fine
Paper Trading is relatively more similar to CMI than RAK.
4.175 Korea attempts to portray the task of choos ing between RAK and April Fine Paper Trading
data as a tremendously unusual or complicated exercise requiring enormous amounts of detailed
information regarding the activities of CMI. It is not. It is by no means unusual for manufacturing
companies to use affiliated resellers to sell their products in the domestic market. And it is by no
means unusual for investigating authorities to have to determine the selling, SG&A expenses of such
smaller resellers using some sec ondary information. In order to do so, they do not need full and
complete information about every detail of the resel ler's selling activities. And they do not need to
speculate about remote possibilities that the resellers may be engaged in other types of activities with
respect to other products. As Indonesia pointed ou t in its second submission, there is always some
information missing in cases of resort to facts available. 58 But the mere fact that some information is
missing – in this case, the amount of CMI's selling expenses – does not mean that the investigating
authority is entitled to base its determination on speculation about what expenses a reseller may
possibly have with respect to other products.
4.176 Accordingly, the Panel should find that no ob jective and unbiased investigating authority
could conclude that it is not possible to determin e which of the two available proxies, April Fine
Paper Trading and RAK, are more similar to CMI. Indeed, consistent with its finding in the original
proceeding, the Panel should rule that an obj ective and unbiased investigating authority would
necessarily conclude that April Fine Paper Trading is more similar to CMI.
4. Procedural claims
4.177 Korea has failed to respond in any detail to Indonesia's procedural claims regarding the
manner in which the KTC arrived at its findings on CMI's activities. It appears to take the position
that the KTC is permitted to re-open the record on certain issues but not others. Indonesia awaits
precise clarifications on these matters. If the KTC di d not re-open the record on the issue of CMI's
activities, then it is clear that the KTC is not entitl ed to rely on the DIS Report in arriving at its
conclusions on the overall scope of CMI's activities. If it did re-open the record on this issue, then the
KTC was under an obligation to re-open the record in an even-handed manner by giving the exporters

57 Original Panel Report, para. 7.111.
58 Indonesia's Second Submission, paras. 31-33.
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notice of the information it required, by allowi ng the Sinar Mas Group to submit information on
CMI's activities, and by accepting that information onto the record. In either case, it appears that the
KTC's conclusions on this matter are not based on a properly constituted factual record.
4.178 Moreover, to the extent that the record on CMI's activities remains unchanged from the
original investigation (1) the KTC cannot depart from its original finding that CMI was a "sales
company"59 without a very compelling justification for doing so, (2) likewise, the Panel cannot depart
from the original panel's finding that CMI is a "trading company" 60 without a very compelling
justification.
4.179 Indonesia awaits clarification on whether ma terial from the record of the original
investigation, such as the CMI organisation charts provided by Indah Kiat and Pindo Deli 61 and the
statements in their questionnaire responses detailing CMI's role in the sales process 62 were rejected by
the KTC during the implementation proceedings. Indon esia notes that any refusal by the KTC to rely
on material that was not rejected by the KTC duri ng the original proceedings, utilised directly or
indirectly by the KTC in making its determinations , cited by Korea in support of its position during
the original panel proceedings, and relied upon by the original panel in making its rulings or verified
during the original investigation, would be wholly unjustified.
4.180 Indonesia disagrees with Korea's reading of Ar ticle 6.1 of the Anti-Dumping Agreement as
permitting investigating authorities to disregard info rmation as irrelevant "as long it properly explains
its decision".63 Rejection of submitted evidence requires compliance with the stringent requirements
of paragraph 3 of Annex II of the Anti-dumping Agre ement. No such explanation appears in the
KTC's Re-determination. Moreover, Korea's narr ow interpretation of Article 6.1 was impliedly
rejected by the Appellate Body in Mexico – Rice64 and US – Anti-Dumping Measures on Oil Country
Tubular Goods 65 when it ruled that the right to present ev idence includes a concomitant obligation on
the investigating authority to take the submitted information into account.
4.181 Regarding the KTC's failure to provide the e ssential facts on which it based its injury re-
determination and an opportunity to comment to the Sinar Mas Group, Indonesia disagrees with
Korea's argument that Articles 6.1, 6.2, 6.4 and 6.9 do not entail a right to be informed of essential
facts or an opportunity to comment in proceedings where the investigating authority does not collect
"new information" or "new arguments" from interested parties. 66 The text of these provisions does
not reflect such any such limitation.
5. Conclusion
4.182 Indonesia recalls that Article 3.10 of the DS U states that the use of dispute settlement
procedures is not a contentious act and that all WTO Members have undertaken to engage in these
procedures in good faith. In this context, Indonesi a is very surprised and disappointed by some of
Korea's statements during this pro ceeding. For example, in the cont ext of a request for a procedural

59 See e.g., KTC, Final Dumping Report, Exhibit IDN-19, p. 19 (referring to CMI as "the sales
company"), p. 20 (no contestation of the Sinar Mas Group's description of CMI as a "sales company").
60 See e.g., Original Panel Report, para. 7.102 ("We note that CMI is a trading company…").
61 Responses to section B.3-3 of the KTC Questionnaire: Indah Kiat's Questionnaire Response, Exhibit
IDN-13, p. 118 and Pindo Deli's Questionnaire Response, Exhibit IDN-14, p.161.
62 Responses to sections B.5, B.6 and B.7 of the KTC’s Questionnaire: Indah Kiat's Questionnaire
Response, Exhibit IDN-13, pp. 3-5 and Pindo Deli's Questionnaire Response, Exhibit IDN-14, pp 3-6.
63 Korea's Second Submission, paras. 34-35.
64 Appellate Body Report, Mexico – Rice , para. 292 (interpreting Article 12.1 of the SCM Agreement
which is identical to Article 6.1 of the Anti-Dumping Agreement).
65 Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods, para. 246.
66 Korea's Second Submission, paras. 29-31.

ruling, Korea stated the hope that the Indonesian industry might suffer substantial harm.67 Rather than
assisting the Panel in resolving the dispute, such statements serve only to embarrass the party
responsible for them. To the extent that Korea h as chosen to put these statements on the record, the
Panel should consider whether, in light of these st atements, Korea would be likely to implement any
future ruling in an objective and unbiased manner.
4.183 This dispute has gone on too long. It is clea r that based on the evid ence in this case, an
objective and unbiased investigating authority woul d not use RAK as a proxy for CMI's interest
expenses. It would then find that the Sinar Mas companies were not dumping, even though they may
also have failed to provide all of the information requested by the investigating authority. It is equally
clear that the KTC is determined not to make such a finding.
4.184 In these circumstances, Indonesia looks to the Pane l finally to resolve this dispute, by making
not only a clear and unambiguous finding that the KTC's use of the RAK data cannot be reconciled
with its obligation to make an objective and unbiased determination, using special circumspection, of
the best information available regarding the re asonable SG&A costs of reselling the product under
investigation but also the further finding that th ese obligations require the KTC to utilise the April
Fine Paper Trading data, the only verified data on the costs of reselling the investigated product in
Indonesia, to calculate all of CMI's SG&A expenses, including its interest expenses.
• Closing Statement of Indonesia at the meeting with the Panel
4.185 Indonesia regrets that Korea has chosen to prolong this dispute. Indonesia would have
expected that, as a Member whose exporters are often the target of anti-dumping investigations, Korea
would appreciate the importance of the principle th at investigating authorities should arrive at their
determinations in an objective and unbiased manner and must ensure that their conclusions are firmly
based on the evidence on record. Unfortunately, the KTC's determinations in this case fall far short of
the standards set out in the Anti-Dumping Agreement.
4.186 Indonesia is confident that this Panel will conduct a thorough review of the parties'
submissions, the KTC's determination and the evid ence on record. Indonesia remains confident that
following this review this Panel will uphold Indonesi a's claims that Korea has failed to its measure
into compliance with the Anti-dumping Agreement in a manner that will enable this dispute finally to
be resolved.
F.
ORAL STATEMENTS OF KOREA
4.187 The following summarizes Korea's arguments in its oral statements
• Opening Statement of Korea at the meeting with the Panel
1. The KTC's Selection of Facts Available for CMI Interest Expenses
(a) Indonesia's Arguments Are Based on an Illogical Assumption about the Interest Expenses of
Trading Companies that Are Inconsistent with the Facts on the Record before the KTC
4.188 The crux of Indonesia's argument is that it believes that it is unreasonable and unacceptable to
use the interest expense for a so-called "manufact uring company" as a surrogate for the interest

67 Korea's Reply to Indonesia's Letter of 19 March 2007, 22 March 2007, para. 38 ("We recognize, of
course, that the disclosure of the Sinar Mas Group’s confidential information — including the identities of its
customers, the prices at which it sells the merchandis e, and its production costs — would be likely to cause
competitive harm to the Sinar Mas Group. (Indeed, we hope that the harm will be substantial, so that Indonesia
may finally understand why protection of confidential information is important)").
W T / D S 3 1 2 / R W

expenses of a so-called "trading company" like (accor ding to Indonesia) CMI. To support this view,
Indonesia asks the Panel to consider the hypotheti cal situation of automobile distributors selling
automobiles in Geneva. According to Indonesia, consideration of this example proves that the interest
expenses of a trading company may only be estimated by looking at other trading companies.
4.189 Of course, Indonesia has not presented any ev idence concerning the actual experience of
distributors selling automobiles in Switzerland. Instead, Indonesia relies entirely on assumptions
about how such distributors would organize their bus iness. However, by adopting plausible alternate
assumptions, it is easy to show that two companies e ngaged solely in distribution of automobiles in
Geneva might have vastly different interest expenses.
4.190 In this regard, it is important to distinguish between functions that affect selling and sales
administration expenses and those that affect interest expenses. For example, it may be assumed that
the two distributors have similar showrooms, empl oy the same number of sales personnel, and have
similar office support personnel — managers, acco untants, secretaries, and service personnel — in
their operations. Given these assumptions, the two di stributors would probably have similar expenses
for rent, for electricity, for salaries and the like. Thus, the selling and office administration expenses
of the two distributors might be similar.
4.191 On the other hand, the fact that the two companies sell similar products from similar
showrooms, using similar numbers of sales and ad ministrative personnel does not provide a basis for
drawing conclusions about the interest expenses the two companies are likely to incur. Instead, the
amount of the interest expense incurred by any co mpany depends on how much money the particular
company chooses to borrow. And the amount of money the company chooses to borrow is
determined by its cash flow and its access to a lternative sources of funds. These factors may vary
greatly even for companies that appear, on the surface, to be quite similar.
4.192 One critical issue is the capital structure of the company in question. Some companies choose
to raise funds by issuing equity (that is, shares of stock). Others choose to raise funds by taking out
loans. A company that raises funds by issuing equity may face unhappy shareholders if it does not
generate sufficient returns and pr ovide either dividends or stock-price appreciation, but it does not
have interest expenses, because share offerings of common stock do not give rise to interest
obligations. By contrast, a company that raises funds by borrowing does incur interest expenses,
because lenders require borrowers to pay interest on their loans.
4.193 Even for companies with similar capital structur es who raise some or all of the funds they
need by borrowing, the amount of borrowing needed — and, consequently, the amount of interest
expenses incurred — may vary consid erably depending on the credit terms that the companies receive
from their suppliers and offer to their customers. For example, a company that does not have to pay
its suppliers until it receives payment from its custom ers will not have to borrow funds to finance its
purchases. By contrast, a company that has to pay suppliers in advance, but allows customers to delay
their payments, will need to find funds to pay for its purchases while it is awaiting customer payment.
4.194 Even if the sales terms are the same, there may be other differences in the nature of their
operations that affects their cash flow requirements. For example, one company may hold substantial
inventories, while another may not. Furthermore, ev en if the inventory practices were the same, there
might be significant differences in the cash maintenance practices of the two distributors — especially
if they are affiliated with their suppliers and subject to corporate financial strategies. Their parents
may choose to organize the profits and losses of each subsidiary to minimize overall income tax
liabilities by shifting profits to jurisdictions with re latively low tax rates. These strategies may affect
the amount of retained earnings an individual subs idiary (such as the hypothetical trading company)
has to draw upon to meet cash flow requirements.

4.195 In addition, the fact that a particular compan y is, on its face, only a sales company, does not
mean that it does not finance production equipment. It is entirely possible that such a company might
be responsible for borrowing funds to finance purchases of production equipment by its affiliates,
especially if the so-called "sales company" h as lower borrowing costs. When a manufacturing
affiliate has access to relatively lower cost borrowings, the parent company may choose to borrow
through the manufacturing company — and then tr ansfer whatever borrowed money the trading
company needs to finance its operations by allo wing it to delay its payments for purchases from
affiliated suppliers, or by adjusting the price char ged by suppliers to give the trading company a
substantial profit, or by the simple expedient of paying the trading company a commission. By
contrast, when the trading company has access to relatively lower cost borrowings, the parent
company might choose to finance the manufacturi ng affiliate's production equipment as well as the
trading company's operations, by borrowing on the trading company's account — and then
transferring the funds to the manufacturing aff iliate by having the trading company pay the
manufacturing affiliate in advance, or by setting a high transfer price for the purchases by the trading
company, or by having the trading company pay the manufacturing affiliate for "services" provided.
4.196 In short, interest expenses depend on the amount of money borrowed by the company. The
amount of money borrowed by any company depends, in turn, on the corporate strategy of the
company. The interest expenses for two compan ies engaged only in sales and distribution may,
therefore, differ enormously. There is simply no reason to assume that the interest expenses incurred
by one trading company will be similar to the inter est expenses of a different trading company. And,
by the same token, there is no reason to assume that the interest expenses incurred by a manufacturing
company will differ from those of a trading company.
4.197 Significantly, the KTC did not base its decision on hypothetical examples about made up
automobile distributors in Geneva. Instead, it looke d for actual evidence of the interest expenses of
trading companies and manufacturers. And, the data it found indicated that the interest expenses for
companies engaged solely in distribution activities were not perceptibly different from the interest
expenses for companies engaged in manufacturing.
4.198 Indonesia claims that the KTC's factual evid ence should be disregarded, because the KTC
allegedly conceded that two of the five tradi ng companies it identified were not, in fact, selling
companies, while the data from a third company di d not support the KTC's conclusion. These claims
are without merit. And, in any event, even if Indonesia's argument were correct, it would still mean
that, of the companies that Indonesia agrees were i nvolved solely in trading, two of the three had
higher interest expenses than the so-called "ma nufacturing company" whose interest expenses the
KTC used as "facts available". These facts undoubtedly refute Indonesia's assertion that a reasonable
investigating authority would have to assume that the interest expenses of a trading company would
be lower than the interest expenses of a "manufacturing" company.
(b) There Is No Evidence to Support Indonesia's Assumptions that CMI Was Only a Trading
Company
4.199 Because of the Sinar Mas Group's failure to submit requested documents or to cooperate
during the verification, the available evidence was in sufficient to allow any firm conclusions to be
drawn regarding the nature of CMI's activities. It is possible that CMI's activities were limited only to
trading operations. But it is also possible that CMI's activities were much broader and encompassed
manufacturing of various products, possibly even including the subject merchandise. When CMI
refused to allow the KTC to review its financial statements and accounting records, it prevented the
KTC from reaching any firm conclusions about the scope of CMI's activities.
4.200 Indonesia claims that the KTC was bound by th e questionnaire responses filed by Indah Kiat
and Pindo Deli, which purported to describe CMI's role in their sales of the subject merchandise.
Indonesia ignores the fact that, under Article 6.6 of the Antidumping Agreement, the KTC was
W T / D S 3 1 2 / R W

permitted to conduct a verification in order to satisfy itself as to the accuracy of those descriptions of
CMI. The KTC did attempt to conduct such a verifi cation. However, that verification was prevented
by the Sinar Mas Group's refusal to cooperate. Consequently, the KTC was plainly justified in
refusing to accept the accuracy of the Sinar Mas Group's description of CMI's activities.
4.201 The KTC did not rule that the evidence dem onstrated that CMI actually engaged in
manufacturing or that it had an extensive network of warehouses or that it allowed its customers to
delay payment for extended periods or that it fina nced the purchase of production equipment by Indah
Kiat, Pindo Deli and other Sinar Mas Group companies. Instead, the KTC found only that, because of
the Sinar Mas Group's refusal to cooperate, it was no t possible for the KTC to reach a conclusion that
CMI was not performing any of those activities. The evidence did not support the Sinar Mas Group's
claim that CMI was engaged only in trading operati ons with minimal staff and inventory, because the
Sinar Mas Group deliberately withheld the evidence that would have been needed to confirm that
claim. In these circumstances, the KTC was not un der any obligation to accept that the Sinar Mas
Group's claims were correct or to determine the interest expenses based on a description of CMI's
activities that could not be verified because of the Sinar Mas Group's refusal to cooperate.
(c) The KTC's Selection of the Facts Available Interest Expense for CMI Was Consistent with
Article 2.2 of the Antidumping Agreement
4.202 Indonesia asserts that the KTC's determination of the "facts available" interest expense for
CMI was inconsistent with the provisions of Articles 2.1, 2.2, 2.2.2 and 2.4 of the Anti-dumping
Agreement. Its argument appears to be based on th e broad assertion that the "facts available" interest
expense used by the KTC was not "reasonable" and did not "pertain" to the production and sale of the
subject merchandise.
4.203 As an initial matter, it should be noted that I ndonesia's argument fails to address the range of
permissible options under the chapeau and sub-paragraphs of Article 2.2.2. Those provisions
explicitly provide that, when an investigating aut hority is unable to use the actual amounts for SG&A
expenses and profit, it may resort to "any other reasonable method" — including figures that do not
"pertain" to the production or sale of the subject merchandise.
4.204 Furthermore, Indonesia has failed to consid er the interplay between the provisions of
Article 2.2.2 and the KTC's right, under Article 6.8, to resort to "facts available" in light of the Sinar
Mas Group's failure to cooperate. In calculating c onstructed value, the KTC attempted to base its
calculation of SG&A expenses and profit based on the actual experience of the Sina r Mas Group
companies, as described in the chapeau of Article 2.2.2. However, because the Sinar Mas Group
refused to cooperate, CMI's actual expenses and profit could not be ascertained. The KTC therefore
determined the amounts for CMI's expenses and prof it based on "facts available", in accordance with
Article 6.8. As long as the KTC's determination of the "facts available" was consistent with the
requirements of Article 6.8, its determination of normal value was also consistent with the
requirements of Article 2.2.2, because the "facts av ailable" used by the KTC simply replaced the
figures for SG&A expenses and profit of the Sinar M as Group that could not be verified due to the
Sinar Mas Group's failure to cooperate. Thus, th e methodology used by the KTC was the precise
methodology described in Article 2.2.2, but with the twist that, as a result of the Sinar Mas Group's
non-cooperation, the KTC had to use "facts available" in applying that methodology.
4.205 To put this another way, the issue is not whether the "facts available" that were used
"pertained" to sales of the subject merchandise. In stead, the issue is whether the "facts available"
represented an appropriate replacement for the CMI da ta that the Sinar Mas Group refused to supply.
If the "facts available" were an appropriate replacement for the CM I data that the Sinar Mas Group
refused to supply, then the KTC was permitted to u se the "facts available" in place of the CMI data.
Nothing in Article 2.2.2 prevents the use of fi gures based on "facts available" to replace the actual
data that a respondent refuses to provide.

4.206 Finally, as Korea has explained previously, Indonesia's complaints about the alleged
"unreasonableness" of the KTC's actions are difficult to take seriously, in light of the fact that the
"facts available" used by the KTC were actually more favourable to the Sinar Mas Group than the
information the Sinar Mas Group itself reported. If the KTC had used the figures for SG&A expenses
and profit reported by the Sinar Mas Group, and ha d not used "facts available" at all, then the
constructed normal value and dumping margins woul d all have been higher, because the figures
reported by the Sinar Mas Group were less favourable than the allegedly "punitive" figures used by
the KTC as "facts available".
4.207 Indonesia has focused exclusively on the KTC's selection of the "facts available" interest
expense figure. It has ignored the fact that the KTC also used a "facts available" profit figure that was
significantly more favourable to the Sinar Mas Gr oup than the profit figures the Sinar Mas Group
itself reported. On the whole, the benefit the Sinar Mas Group received from the use of the
favourable "facts available" profit figure outwe ighed the alleged harm from the less favourable
interest expense figure.
(d) The KTC's Selection of the Facts Available Interest Expense for CMI Was Consistent with
Article 6.8 and Annex II of the Antidumping Agreement
4.208 The KTC's revised analysis recognized that the verified information on the record indicated
that a "trading company" that is not affiliated with the Sinar Mas Group had no interest expense, and
it considered whether the "trading company" figure, and not the expenses of that company's
"manufacturing" affiliate, should be used as "facts available" for CMI. In the end, the KTC concluded
that the "manufacturing company" figure was more appropriate, based on the following reasoning:
(i) There was no reason to assume that CMI would have zero interest expense, even if its
activities were limited to sales and distribution;
(ii) There was no a priori reason to believe that the actual interest expenses of CMI
would be more similar to the expenses of a trading company than to the expenses of a
company with manufacturing operations; and
(iii) The interest expense was consistent with the available information concerning the
interest expenses incurred by sales and distribution companies and by manufacturing
companies producing similar and non-similar merchandise.
Indonesia, of course, objects to the KTC's conclusion. But it has not provided any basis for disputing
the KTC's analysis.

4.209 In this regard, it should be noted that the Sinar Mas Group did not submit any information
regarding the interest expenses of other companie s involved in sales and distribution in Indonesia.
There was no evidence indicating that the interest expenses of the "trading company" were consistent
with normal industry experience. As a result, even if the KTC had wanted to adopt the "trading
company's" figures as "facts available", there would have been no evidence to corroborate that data.
2. The KTC's Revised Explanation of Its Injury Analysis
(a) The KTC Provided the Indonesian Respondents an Opportunity to Comment on All Factual
Information and on All of the Relevant Issues
4.210 In its first submission, Indonesia initially claimed that the KTC's revision of its explanation of
the injury determination without allowing the Indonesian respondents an opportunity to comment on a
draft was inconsistent with various procedural obligations under the Antidumping Agreement.
However, as a result of Korea's response, Indonesia has narrowed its claims considerably. It now
W T / D S 3 1 2 / R W

contends only that the "exporters should have been provided with disclosure of the fact that the KTC
would base its injury determination on informati on obtained during the original proceeding and an
opportunity to comment in light of this fact".
4.211 As explained in Korea's previous submissions, the provisions of Article 6 of the Antidumping
Agreement do require that investigating authorities pr ovide disclosure to the interested parties of
"relevant information" and "essential facts", and t hose provisions also require that investigating
authorities allow the interested parties to "defen d their interests" and to "present their cases".
However, those provisions do not require multiple disc losures of the same "relevant information" and
"essential facts", or multiple opportunities to present arguments. Clearly, at some point the
investigating authority is entitled to close off debate and retreat to its offices to analyze the issues and
prepare a final determination. The requirement s of Article 6 of the Antidumping Agreement are
satisfied as long as the interested parties have , before that point, been provided access to all of the
"relevant information" and "essential facts", and been given an adequate opportunity to present
arguments (and respond to arguments by other par ties) concerning the "relevant information" and
"essential facts".
4.212 In this case, the Indonesian respondents were given access to all of the "relevant information"
and "essential facts" relating to the KTC's injury analysis during the original KTC investigation.
They were also were also given an opportunity to present arguments (and respond to arguments by
other parties) concerning the "relevant information" and "essential facts", during that investigation .
Contrary to Indonesia's claims, then, the KTC did no t make its injury determination "without giving
the exporters any opportunity to comment".
4.213 The issue presented by Indonesia is whether the Indonesian respondents were entitled to a
second opportunity to comment on the same information (and to respond to the same arguments by
other parties) simply because the KTC was required to revise its explanation of its injury
determination. Indonesia has not, however, identified any provision of the Antidumping Agreement
that requires multiple disclosure of the same in formation or multiple opportunities to comment on the
same issues.
4.214 In fact, Indonesia's arguments are based, in the end, on a misreading of the Panel decision in
the Oil Country Tubular Goods case. Indonesia has ignored the fact that the Panel in that case
specifically ruled that the disclosure obligations of Article 6.9 do not apply to the investigating
authority's reasoning.
4.215 Korea agrees that, if the KTC had obtained new information or allowed new arguments by
any parties concerning the injury analysis, then it would have been required to allow the Indonesian
respondents an opportunity to respond. Indeed, wh en the KTC obtained new information relating to
certain dumping calculations issues, it did precisel y that — allowing the Indonesian respondents an
opportunity to see the new information and to comme nt upon it. However, the KTC's decision not to
request or permit new submissions of injury data is not a new "fact" that required disclosure or an
opportunity to comment.
(b) There Is No Basis for Indonesia's Unfounded Claim that the KTC Relied on New Information
in Making Its Revised Injury Determination
4.216 As the Panel is undoubtedly aware, Indonesia has asserted that it "understands that the KTC
received new materials and submissions related to the Re-determination from the Korean domestic
industry or possibly other sources" and that "{t}ho se documents have not been made available to
Indonesia". That assertion is, however, complete ly unfounded. The Indonesian respondents were
given access to all of this material during the c ourse of the implementation proceeding, and were
given an opportunity to comment upon it. Indonesia' s claims are, therefore, entirely speculative and
completely without merit.

4.217 In its second written submission, Indonesia asserts that Korea should be required to prove that
the KTC did not obtain or rely upon any new informa tion in making its revised injury determination.
It appears, however, that Indonesia is not familiar with the requirement of a prima facie case. As the
complaining party, Indonesia bears the obligation to present factual evidence to support its claim. It is
not Korea's obligation to refute Indonesia's unfounded accusations.
• Closing Statement of Korea at the meeting with the Panel
4.218 Indonesia seems to want to relitigate all of the issues concerning the Sinar Mas Group's
refusal to cooperate during the original investiga tion, and the permissible consequences of that non-
cooperation. Korea will not bore the Panel with a further discussion of the meaning of "verified" and
"verifiable", or with a discussion of the reasons wh y the verification of data submitted by Indah Kiat
and Pindo Deli was not sufficient to verify the data on CMI's resales. The short answer is that
Indonesia's arguments were already rejected by the Panel's original decision, which completely upheld
the KTC's finding that it could not rely on the s ubmitted information concerning CMI due to the Sinar
Mas Group's refusal to cooperate.
68
4.219 Furthermore, the scope of the Sinar M as Group's non-cooperation was not, as Indonesia
suggests, limited to information relating to the comp leteness and price information of the submitted
sales listings. Instead, the Sinar Mas Group letter refusing the verification of CMI specifically
informed the KTC that:
In addition to the financial statements of CMI, the KTC has requested certain further
information in relation to CMI's activities. In response to the repeated requests of
Indah Kiat and Pindo Deli, CMI has provide d the materials requested in relation to
the sample sales per sections VII.4.B.a. (Indah Kiat) and VII.4.B.a (Pindo Deli) of the
verification plan. CMI has made it very clear that it will not provide further in
relation to this matter.69
In light of the Sinar Mas Group's statement, it w as plainly impossible for the KTC to have conducted
any verification of any CMI-related information other than "the materials requested in relation to the
sample sales". It was clear that no other informa tion relating to the nature of CMI's operations would
be forthcoming and, as a result, no other informati on relating to the nature of CMI's operations could
be verified.

4.220 It is, of course, clear that sales in Indonesia of subject merchandise produced by Indah Kiat
and Pindo Deli were made through CMI. Beyond that, Korea simply does not know what CMI did.
Korea does not know what its sales prices or practices were on the sales of subject merchandise
produced by Indah Kiat and Pindo Deli — whether, for example, it held inventory of subject
merchandise or made sales on credit, or what its actual mark-up might have been. Korea does not
know if CMI handled subject merchandise produced by other companies (whether inside or outside of
the Sinar Mas Group). Korea does not know if CMI itself produced subject merchandise — whether
at its own facilities, or by leasing a part of the fac ilities of other companies, or by entering into tolling
arrangements under which CMI supplied the raw ma terials and paid another company a fee to
transform the raw materials into subject merchandise. Korea does not know what kind of transactions
CMI may have had with other Sinar Mas Group compan ies that might have directly or indirectly
provided financing to Indah Kiat, Pindo Deli and other Group manufacturers. Korea simply does not
know.

68 See, e.g., Initial Panel Decision, paras. 7.54to 7.56, 7.67 to 7.72, and 7.101.
69 Letter from Arvind Gupta, Sinar Mas, to Bae, Seung-Jin, Director, Dumping Investigation Division,
24 March 2003, Exhibit KOR-29 (provided in Exhibit KOR-S-2).
W T / D S 3 1 2 / R W

4.221 The KTC's finding on this issue was, therefore, completely appropriate. The KTC did not
find that the evidence on the record demonstrated th at CMI held inventory or made sales on credit or
manufactured subject or non-subject products. Instead, the KTC held only that, given the information
on the record at the time of the original determin ation, it could not make any decision about the
precise scope of CMI's activities.
70 And, because the KTC's inability to reach any conclusion was the
result of the Sinar Mas Group's refusal to cooperate, the KTC was plainly permitted to draw
inferences about CMI's activities that were less favourable to the Sinar Mas Group.71
4.222 Nevertheless, the KTC did not, in fact, take ac tion to punish the Sinar Mas Group. Instead,
the KTC selected facts available that resulted in an amount for SG &A expenses and profit that was
actually lower than the amount reported by the Sinar Mas Group. 72 The Sinar Mas Group's
submissions to the KTC constituted an admission th at it was reasonable to believe that its SG&A
expenses and profit were, on the whole, even highe r than the amount assigned by the KTC. As a
result, the Sinar Mas Group should not now be hear d to complain that the amount assigned by the
KTC was somehow unreasonable.
4.223 In the end, Indonesia's arguments boil down to the proposition that the facts available interest
expense adopted by the KTC simply does not feel right to members of Indonesia's delegation. But
feelings, whatever they may be, are not the releva nt standard. Instead, the Panel must look to the
evidence to determine "whether the {KTC's} estab lishment of the facts was proper and whether {its}
evaluation of those facts was unbiased and objective".73
4.224 The un-refuted evidence on the record indicat ed that a wide variety of companies —
including those whose operations are limited solely to sales and distribution — experience interest
expenses that are greater than the amount used by the KTC as facts available for CMI's interest
expense. The KTC's establishment of these facts was proper and its evaluation of these facts was
unbiased and objective. Consequently, there is no ba sis for challenging the KTC's conclusion that the
information used as facts available for CMI's intere st expense was fully corroborated, as required by
paragraph 7 of Annex II of the Antidumping Agreement.
4.225 Korea knows that the Panel had some questions about the different methods used to determine
facts available for selling and administration expen ses, on the one hand, and for interest expenses on
the other. The basic point is that selling and administration expenses necessarily depend on the nature
of the selling activities, while interest expenses do not. In order to determine the selling and sales
administration expenses incurred in connection with sales of merchandise produced by Indah Kiat and
Pindo Deli, the KTC looked to the selling and sales ad ministration expenses of April Fine, as a source

70 As the KTC explained,
... Pindo Deli and Indah Kiat refused to submit sales and cost data, financial statements (which
could not be verified from verification since submitted after the on-the-spot investigation) and
related information during on-the-spot investigation. Consequently, any information was not
available for the KTC to confirm whether CMI is just a trading company or not...
As a result, the KTC had no information available to verify CMI’s management activity
throughout on-the-spot investigation. In addition, though Pindo Deli and Indah Kiat asserts
that CMI engaged solely in selling activities, the KTC confirmed that nothing in the
information obtained from a third source supports their assertion since such information
indicates CMI is a manufacturer.
Final Implementation Report at 25-26 (provided in KOR-4). See also id. at 34 (Since Sinar
Mas Group did not cooperate for on-the-spot investigation by refusing to submit materials on CMI, the
KTC has no base to find out activities of CMI.”)
71 Id. at 26.
72 See, e.g., Exhibit KOR-S-10.
73 See Antidumping Agreement, Art. 17.6.

of verified information regarding the costs of se lling and sales administration activities in Indonesia.
Even if CMI had its own manufacturing operations, the KTC reasonably concluded that CMI's selling
and sales administration expenses would be similar to April Fine's. But there was no reason to expect
CMI's financial expenses to be similar to Ap ril Fine's — both because financial expenses are
independent of the nature of the companies activ ities, and because the verified evidence did not
permit the KTC to determine that CMI's overall activities were similar to April Fine's.
4.226 In short, the overall amount the KTC used for total SG&A, interest and profit was, by the
Sinar Mas Group's own admission, entirely reasonable. The methods the KTC used to select that
information were consistent with the provisions of Article 2.2. The information used as facts
available for the CMI interest expense was fully co rroborated. That should have been the end of the
issue. Korea is sorry that Indonesia has been unw illing to accept these basic fact s, and that the Panel
has had to be called back into service.
V. ARGUMENTS OF THE THIRD PARTIES
5.1 China, the European Communities, Japan, Th e Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu ("TPKM"), and the United States have reserved their rights to participate
in the Panel's proceedings as Third Parties. Chin a did not provide a written submission or an oral
statement to the Panel. The United States did not provide a written submission to the Panel. The
arguments of the European Communities, Japan, and TPKM are set out in their written submissions
and oral statements to the Panel and are summarize d in this section. The arguments of the United
States are set out in its oral statement to the Panel and is also summarized in this section.
A.
THIRD PARTY WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES
1. Claims arising from the measures taken by Korea to comply with the DSB's
recommendations and rulings
(a) On Korea's alleged violation of Article 6.8 and Annex II of the Agreement
(i) The European Communities' views
5.2 The European Communities reads Article 19.1 of the DSU to impose on Members the
obligation to do what is necessary to bring their me asures into conformity with the panel's findings
and conclusions. There may be several ways to do this. Where, for example, the panel finds that a
particular figure in an anti-dumping decision is in correct, the investigating authority would need
simply to replace the wrong figure in the text of the decision with the correct one. However, where,
as in the present case, the panel concludes that the reasoning of an anti-dumping decision is not
sufficiently developed, the investigating authority would need to redraft the relevant part of the
decision providing a more complete analysis, to th e panels' satisfaction. The European Communities
takes the view that investigating authorities have the discretion to decide the amendments they need to
introduce to their decision in order to improve it s reasoning and, thus, comply with the panel's
findings.
5.3 The European Communities considers that Article 6.8 and Annex II of the Agreement provide
the procedural safeguards that investigating author ities should follow in the collection and evaluation
of evidence, in order to ensure the evidence's reliability, accuracy and completeness. The European
Communities does not consider that Article 6.8 and Annex II of the Agreement were intended to
restrict the application of Article 19.1 of the DS U and limit the measures an investigating authority
could take in order to comply with a panel report.
5.4 Therefore, the European Communities submits that an investigating authority does not violate
Article 6.8 and Annex II of the Agreement where, in complying with a panel finding that the
W T / D S 3 1 2 / R W

reasoning of the anti-dumping decision is not suffi ciently developed, it seeks to develop improved
arguments and explanations in its new decision (as l ong as its alternative action is consistent with the
Agreement).
(b) On Korea's alleged violation of Articles 2.2 and 2.2.2. of the Agreement
(i) The European Communities' views
5.5 With regard to Korea's claims, the Europ ean Communities reserves the right to comment
upon the "reasonableness" of KTC's calculations in its oral statement.
5.6 With regard to Indonesia's claims, the Europ ean Communities takes the view that a company
that simply re-sells the product under investigation, but also manufactures other products would
normally incur interest expenses stemming from both ac tivities. Interest expenses linked to long term
obligations, such as those aimed at financing cap ital infrastructure to support the manufacturing
activities, would normally affect the general cost structure of the company and hence influence the
pricing of all the products it offers, including those products that the company does not produce itself.
This characteristic differentiates those interest expenses from e.g., pure selling expenses that would
normally affect the cost and pricing only of the particular product they aim to promote.
5.7 Therefore, the European Communities submits th at an investigating authority would not act
inconsistently with Articles 2.2 and 2.2.2 of the Agreement if, on the facts of a particular case, it
calculates the normal value taking into considera tion interest expenses resulting from a company's
manufacturing activities, even where these manufacturi ng activities are not directly linked to the sale
of the product under investigation. This is particular ly true where such interest expenses are linked to
long term obligations, such as those aimed at financing capital infrastructure.
2. Claims relating to Korea's Procedural Obligations
(a) On KTC's reconsidering the issue of CMI's activities
(i) The European Communities' views
5.8 The European Communities notes that neither the DSU, nor the Agreement defines what
would be an "undisputed fact". Moreover, the European Communities reads Article 21.1 of the DSU
to mean that the panel's findings and recommendations are the only parts of a panel report that are
binding upon a Member, following the adoption of the panel report by the DSB. The European
Communities finds no support in either the DSU, or the Agreement for the proposition that any
general statements of fact in an original panel report should have the same binding effect. The power
of Article 21.5 panels to assess the measures taken in compliance with the findings of an original
panel report in their totality and examine new and di fferent claims from those raised in the original
panel proceedings, further supports the view of the European Communities.
5.9 Therefore, the European Communities submits th at, in complying with a panel finding, an
investigating authority does not violate Article 6.8 and Annex II of the Agreement, where its new
decision provides an appreciation of facts that is different to that of its original decision, so long as the
investigating authority acts in accordance with the findings and recommendations of the panel.

(b) On Korea's refusal to accept new informati on on CMI's activities provided by the exporters
and on Korea's refusal to provide interested pa rties with access to information on which it
based its re-determination of injury
(i) The European Communities' views
5.10 The European Communities considers that the issu e to be determined is the extent to which
Article 6 of the Agreement applies to the procedures followed by an investigating authority when it
takes measures to comply with panel findings.
5.11 The European Communities notes th at there is no clause in the Agreement stating expressly
that all of the provisions of Article 6 apply every time an investigating authority takes measures to
comply with the findings of a panel. This lead s the European Communities to conclude that the
application of the provisions of Articles 6.1, 6.2 and 6.9 depends on the nature and extent of the
measures required to be taken by the investigating authority in order to comply with the findings of
the panel.
5.12 If, for example, compliance with the panel fi ndings involves only a limited number of simple
textual amendments of the original decision, it w ould appear unnecessary to require the investigating
authority to provide opportunities for all interested parties to meet with each other and hold detailed
discussions (as provided by Article 6.2). At the other end of the spectrum, where an investigating
authority accepts new material and submissions from some interested parties, it should fully respect
the "due process" rights of all interested parties contained in Articles 6.1, 6.2 and 6.9 of the
Agreement.
5.13 Therefore, the European Communities submits that the obligation of an investigating
authority to comply with the provisions of Articles 6.1, 6.2 and 6.9 of the Agreement in the
implementation phase of a panel report, depends on the nature and extent of the measures required to
be taken in order to comply with the findings of the panel. The European Communities further
submits that, where an investigating authority accepts new information or material from some
interested parties, the provisions of Articles 6.1, 6.2 and 6.9 of the Agreement should apply fully.
B.
THIRD PARTY ORAL STATEMENT OF THE EUROPEAN COMMUNITIES
5.14 The European Communities makes its oral statemen t because of its systemic interest in the
correct interpretation of the Anti-dumping Agreement and the DSU.
1. Introductory remarks
5.15 In its written submission, the European Comm unities discussed two main themes: First, what
measures can an investigating authority take in order to comply with the findings of a panel. Second,
what procedures should an investigating authority follow when it takes measures in order to comply
with the findings of a panel.
5.16 The European Communities notes that both parties to this dispute have generally agreed with
its conclusions on certain points. For example, the European Communities has suggested that the
procedures an investigating authority should follow depend on the nature of the measures it takes in
order to comply with the findings of the panel. The European Communities has argued that where the
investigating authority accepts new information or material from some interested parties, it should
also afford to all interested parties the proce dural safeguards provided for in Article 6 of the Anti-
dumping Agreement . The parties have agreed with this point, as evidenced by paragraph 29 of
Korea's second submission and paragraph 65 of Indonesia's second submission.
W T / D S 3 1 2 / R W

5.17 The European Communities has also suggested th at an investigating authority should be
permitted to provide in its new decision a different a ppreciation of the facts than that in the original
decision, provided that it acts in accordance with the findings and recommendations of the panel. The
European Communities notes that Indonesia conclud es in paragraph 10 of its second submission that
an investigating authority " cannot depart from the verified facts from the original investigation and
the factual findings of the original panel, if the factual record on which th e original determination
and the original panel's findings were based ha ve not been re-opened or materially changed ". The
European Communities considers that this statem ent indicates that Indonesia accepts the European
Communities' suggestion that an investigating authority indeed is allowed to provide a different
appreciation of the facts in its new decision, provide d that this is done in accordance with the findings
and recommendations of the original panel and can be supported by the evidence.
5.18 In the third party session, the European Commun ities did not expand furt her its arguments on
the points raised in its written submission. Th e European Communities trus ted that the Panel has
taken due note of its views. Instead, the Eu ropean Communities commented on two other points
raised in the parties' second submissions and in Japan's Third Party submission.
2. The Panel's standard of review
5.19 The first comment relates to a point raised by Indonesia. Indonesia states in paragraph 8 of its
second submission that in examining whether the KTC's determination is consistent with the Anti-
dumping Agreement , the Panel " may not rely on ex post justifications and arguments offered by
Korea". The European Communities finds this statement troubling.
5.20 The European Communities understands th at Article 12, paragraph 2 of the Anti-dumping
Agreement imposes certain obligations on the content of an anti-dumping decision. Among others, it
provides that the decision should include, in suffici ent detail, the findings and conclusions reached on
all issues of fact and law considered material by th e investigating authority. Article 12, paragraph 2.2
further provides that the decision should contain al l relevant information on the matters of fact and
law and reasons which have led to the decision. It should also include the reasons for the acceptance
or rejection of relevant arguments or claims made by the exporters and the importers. The European
Communities has no doubt that a complaining party, such as Indonesia, may request a panel to find
that an investigating authority has violated the Anti-dumping Agreement, by failing to include in its
decision the elements required by Article 12.
5.21 However, Indonesia advances a different argument, which is not related to Article 12 of the
Anti-dumping Agreement . Indonesia appears to suggest that there should be a general rule of
procedure that should prevent panels from taking into consideration any facts or arguments advanced
by defending parties, if they have not been alr eady expressly discussed in the text of the measure
under review. This goes too far and has no basis in the Anti-dumping Agreement . The European
Communities considers that such a potential rule of procedure would be problematic. Pushed to an
extreme, such a rule could lead to a situation where the defending party would only be allowed to read
to the panel sections of the text of the contested measure and nothing more.
5.22 The European Communities also considers that such a general and unconditional rule of
procedure would run against the provisions of the Anti-dumping Agreement . The special rules of
procedure for the settlement of disputes in the field of the Anti-dumping Agreement are set out in
Article 17. The European Communities notes that Article 17, paragraph 5, line (ii) provides that a
panel should "examine the matter, based upon… the facts made available… to the authorities of the
importing Member". There is no reference to facts discussed in the contested decision.
5.23 The European Communities reads th is provision to mean that the Anti-dumping Agreement
does not prevent panels from taking into consideration facts that are proven to have been before the
investigating authority at the time it reached its d ecision and to underpin the contested measure, even

though these facts are not expressly discussed in the te xt of the decision. The European Communities
draws support for this conclusion from the panel reports in EC-Bed linen , paragraph 6.43 and US-
Lumber (DS 264), paragraph 7.168.
3. The mandate of Article 21.5 panels
5.24 The second comment relates to a point raised by Japan in its Third Party submission. Japan
establishes a link between, on the one hand, the mandate granted to im plementation panels by
Article 21.5 of the DSU and, on the other hand, an investigating authority's obligation to respect the
Anti-dumping Agreement's procedural safeguards during the implementation proceedings.
5.25 The European Communities has already provided its views on the proper interpretation of
Article 6. The European Communities was pleased to note that the conclusion reached in the last
sentence of paragraph 15 of Japan's Third Party submi ssion is very close to its position: Japan agrees
that the investigating authority " must provide all interested parties with full opportunity to defend
their interests, if it receives new information from the Korean domestic industry or any other
sources". The European Communities consid ers that Japan's emphasis on this " if", implies agreement
with the European Communities' view that the procedural obligations of an investigating authority
depend on the nature of the measures taken in orde r to comply with the original panel's findings.
Precisely which obligations apply is to be decided by applying the interpretative rules in the Vienna
Convention: ordinary meaning, context and object purpose, in good faith, also having regard where
appropriate to the preparatory work. If the entire measure is re-adopted, it is likely that all the
relevant procedural rules should apply.
5.26 Korea responded to Japan's comments, by discussi ng the mandate of Article 21.5 panels. The
European Communities cannot readily see the re levance of this discussion for the proper
interpretation of Article 6 of the Anti-dumping Agreement. The European Communities also note that
the mandate of Article 21.5 panels is currently under review by the Appellate Body in the Chile-Price
bands case. In any event, to the extent that this Panel may decide to discuss the mandate of
Article 21.5 panels, the European Communities note that the case law supports the conclusion that
Article 21.5 panels should not find against those el ements of a measure that were already in place
during the original panel proceedings and were e xpressly found compatible with a covered agreement
in the original panel report. The European Communities refer to the Appellate Body's decision in US-
Shrimp, in paragraphs 91, 92 and 93.
4. Conclusions
5.27 In concluding its statement, the European Communities invited the Panel to confirm the
following three points:
 - First, that this Panel is allowed to ta ke into consideration facts advanced by the
defending party that are proven to have been before the investigating authority at the
time it reached its decision and to underpin the contested measure, even though they
are not expressly discussed in the text of the measure;

 - Second, that the procedural obligations of an investigating authority should depend
on the nature of the measures taken in order to comply with the original panel's
findings; and

 - Third, that this Panel should not find ag ainst those elements of the measure under
review that were already in place during the original Panel proceedings and were
expressly found compatible with a covered agreement in the original Panel report.
W T / D S 3 1 2 / R W

C. THIRD PARTY WRITTEN SUBMISSION OF JAPAN
1. Introduction
5.28 As a third party, Japan addresses the followi ng issues discussed in the First Written
Submissions of Indonesia and Korea. The comments arise from Japan's systemic interest in ensuring
fair and objective application of the Agreem ent as well as proper compliance with the DSB
recommendations:
(a) whether the calculation of the interest expense of CMI by the KTC based on
information provided by RAK is consis tent with the Korea's obligation under
Article 6.8 and Annex II of the Agreement; and
(b) whether the exporter's procedural rights in the implementation process are
appropriately secured consistently with the Korea's obligations under Article 6 of the
Agreement.
2. Arguments
(a) The legal standard concerning the use of facts available as required by Article 6.8 and
Annex II of the Agreement
5.29 In the dumping re-determination proceeding, that the KTC, the Korea's antidumping
authority, undertook for the implementation of the DSB recommendations, the KTC continued to rely
on secondary information in order to re-calculate costs for CMI.
5.30 In Japan's understanding, Article 6.8 of the Agre ement permits determinations to be made on
the basis of the facts available only if certain conditi ons are met. That is, use of facts available as
secondary information is allowed in the absence of in formation from its original source in a situation
where any interested party refuses access to, or otherwise does not provide , necessary information to
the investigating authority within a reasonable peri od or significantly impedes the investigation.
Article 6.8 further provides that the provisions of Annex II shall be observed in resorting to the facts
available.
5.31 Paragraph 7 of Annex II to the Agreement re gulates the use of facts available, or best
information available, by investigating authorities as below:
7. If the authorities have to base their findings, including those with respect to
normal value, on information from a secondary source, including the information
supplied in the application for the initiation of the investigation, they should do so
with special circumspection . In such cases, the authorities should, where
practicable, check the information from other independent sources at their
disposal, such as published price lists, official import statistics and customs
returns, and from the information obtained from other interested parties during the
investigation (Emphasis added.).

5.32 As is pointed out by Indonesia, the panel and the Appellate Body in Mexico-Rice found in
detail what is required of inves tigating authorities in using secondary information under Article 6.8
and Annex II to the Agreement, as follows.
74 Firstly, the facts to be employed are expected to be the
"best information available". 75 Secondly, when culling necessary information from secondary

74 Appellate Body Report in Mexico - Rice, para. 289.
75 More specifically, the panel in Mexico – Rice found that "[t]he use of term "best information" means
that information has to be not simply correct or useful per se , but the most fitting or "most appropriate"

sources, the agency should ascertain for itself the reliability and accuracy of such information by
checking it, where practicable, against informatio n contained in other independent sources at its
disposal, including material submitted by interested pa rties. Such an active approach is compelled by
the obligation to treat data obtained from secondary sources "with special circumspection".
5.33 Japan considers that these criteria provide re asonable and proper guidance to secure unbiased
use of the facts available by the investigating authority. Accordingly, it is the investigating authorities
that should ascertain for itself that certain information is the most appropriate and best suited to
replace the missing data.
5.34 Japan, as a third party, does not take any speci fic position as regards factual findings in the
present case, including whether or not the KTC' s use of information submitted by RAK as facts
available for calculation of the interest expe nse for CMI was based on an unbiased and objective
evaluation of the various information before it, or whether or not the evidence supports the Sinar Mas
Group's contention that CMI engaged solely in trading activities.
5.35 What Japan would like to emphasize is that, from a systemic viewpoint, disciplines set forth
in Article 6.8 and Annex II of the Agreement shoul d be well observed. To meet the criteria shown
above in paragraphs 4 to 6 above, in Japan's view, Korea should ascertain for itself whether or not the
information used is the most appropriate and best suited to replace the missing data.
5.36 For such purpose, in the first place, Kor ea should explain why the submitted data is
"necessary information" which the interested party refuses access to, or otherwise does not provide "to
the investigating authority within a reasonable pe riod or significantly impedes the investigation".
Then, Korea should also explain why specific seconda ry information that KTC used are expected to
be the "best" information available. In the present case, Korea contends that "[t]he [BCI] per cent rate
adopted by the KTC was actually more favourable for the Sinar Mas Group" than the actual interest
expense rate of RAK, the CMI interest expense reported by the third-party information provider, other
Indonesian companies, or non-manufacturing Korean wholesalers and retailers.
76 However, it does
not seem to provide sufficient reasoning whether the KTC used the "best" information available out of
all data at its disposal. In sum, Korea's expl anation leaves it questionabl e whether the information
Korea used is the most appropriate and best suited to replace the CMI data.
5.37 Accordingly, Japan, based on its systemic in terest mentioned above , asks the Panel to
deliberate carefully whether or not Korea's argument justify its use of facts available and its exercise
of special circumspection.
(b) The exporter's procedural rights in the implementation process
5.38 Indonesia argues that the KTC resorted to a dditional data without securing the exporters'
procedural rights to defend their interests in the course of the implementation proceeding, while Korea
denies it. Korea argues that, as far as the injury re-determination is concerned, the KTC's decision
was based solely on the analysis of the previous ly-collected data under the criteria described in
Article 3.4 of the Agreement, which all parti es had already had an opportunity to comment upon 77,
and that in terms of the several new informa tion that the KTC obtained during implementation

information available in the case at hand. Determining that something is "best" inevitably requires, in our view,
an evaluative, comparative assessment as the term "best" can only be properly applied where an unambiguously
superlative status obtains. It means that, for the conditions of Article 6.8 of the Agreement and Annex II to be
complied with, there can be no better information available to be used in the particular circumstances. Clearly,
an investigating authority can only be in a position to make that judgment correctly if it has made an inherently
comparative evaluation of the "evidence available"." (Emphasis in original)
W T / D S 3 1 2 / R W

proceeding, the KTC gave Indonesian respondents not only access to all of this but also an
opportunity to comment upon it.78
5.39 Japan does not take a specific position with regard to the factual aspects whether KTC
resorted to new facts or not during the implementation phase. Japan, however, asks the Panel to
deliberate carefully whether or not the KTC acted in full consistency w ith its obligations under
Article 6 of the Agreement, based on the following consideration.
5.40 Japan is of the view that, even in implem entation proceeding, full consistency with the
obligation under the Agreement is naturally required . That is, the whole re-determination process is
subject to the rules set forth in the Agreement, re gardless of the range of specific violation identified
in the original panel procedure. In this regard , Japan would like to draw Panel's attention to the
previous finding by the Appellate Body that a compliance panel is mandated to review the compliance
measure not only from the perspective of the DSB re commendations and rulings, but also from that of
a covered agreement as cited by the complain ant. As the Appellate Body held in Canada – Aircraft
(Article 21.5 - Brazil) that:
Accordingly, in carrying out its review under Article 21.5 of the DSU, a panel is
not confined to examining the "measures taken to comply" from the perspective of
the claims, arguments and factual circumstances that related to the measure that
was the subject of the original proceedi ngs….. Indeed, the utility of the review
envisaged under Article 21.5 of the DSU woul d be seriously undermined if a panel
were restricted to examining the new measure from the perspective of the claims,
arguments and factual circumstances that related to the original measure, because
an Article 21.5 panel would then be unabl e to examine fully the "consistency with
a covered agreement of the measures taken to comply", as required by Article 21.5
of the DSU.
79

5.41 From this point of view, Japan would be concerned if the Korea's statement that the only error
identified by the Panel was a lack of explanatio n and that revision of the KTC's analysis and
explanation of its determination is all that is required for implementation means that Korea is free
from the discipline of Agreement in the implementa tion stage as far as it modifies its reasoning for
determination. Japan believes that Article 6 of the Agreement applies to the implementation
proceedings requiring the investigating authorities to guarantee procedural fairness to all interested
parties. Thus, the KTC must provide all interested parties with full opportunity to defend their
interest, if it received new information from the Korean domestic industry or any other sources in
making a re-determination of injury.
3. Conclusion
5.42 For the foregoing reasons, Japan respectfully requ ests the Panel to examine carefully the facts
presented by the parties to this dispute in light of Jap an's arguments laid out above, in order to ensure
fair and objective application of the Agreem ent as well as proper compliance with the DSB
recommendations.

78 Ibid. para.64.
79 Appellate Body Report, Canada – Aircraft (Article 21.5 - Brazil) para.41. The Panel also ruled
similarly in United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from
Argentina (Recourse to Article 21.5 of the DSU by Argentina) (paras. 7.128-7.129).

D. THIRD PARTY ORAL STATEMENT OF JAPAN
1. Introduction
5.43 Japan focuses on some issues argued by the parti es to this dispute and endeavours to clarify
Japan's position on the issues as much as possible.
2. The legal standard concerning the use of facts available as required by Article 6.8 and
Annex II of the Agreement
5.44 Japan notes that the Panel and the Appellate Body in Mexico-Rice found in detail what is
required of investigating authorities in using second ary information under Article 6.8 and Annex II to
the Anti-dumping Agreement. Firstly, the facts that should be employed are limited to be the "best
information available". It means that such inform ation must be most appropriate and best suited to
replace the missing data. Secondly, when getting necessary information from secondary sources, the
authority should ascertain for itself the reliability and accuracy of such information by checking it,
where practicable, against the information submitted by interested parties. In so doing, the authority
is obliged to treat data obtained from secondary sources "with special circumspection".
5.45 In Japan's view, these strict criteria are requi red because of the exceptional or alternative
nature of the secondary information. And therefor e, Japan emphasizes that the Member's explanation
should be clear enough to establish that the information used is the most appropriate and best suited to
replace the missing data. Members that are going to use secondary information, therefore, are held
accountable in this regard.
5.46 Turning to this specific case, Korea is oblig ed under the Antidumping Agreement to explain
clearly why the specific secondary information that KTC used as a proxy for interest expenses for
CMI (a re-seller of the investigated products in Indonesia), that is, interest expenses of a
manufacturing company (RAK) instead of those of a trading company (April Fine), are expected to be
the most appropriate and best suited. Although Korea explains in its second written submission that it
has given sufficient consideration in this regard, it se ems that what Korea has articulated is limited to
the explanation on the adequacy of the RAK's interest rate. It remains to be decided in light of the
WTO law whether the use of "facts available" adopt ed by the KTC was well-founded, without further
explanation as to whether there was any alterna tive information available and, if there was, why the
information chosen was regarded as the "best" information among all such alternatives.
3. The Exporter's Procedural Rights in Implementation Process
5.47 Korea asserts in its second submission that Japan wrongfully suggests that the 21.5 Panel
should revisit the issues that were already decided in the original panel proceeding. In this respect,
Korea seems simply to misunders tand Japan's argument. What Japan pointed out, quoting the
decision by the Appellate Body in the Canadian Aircraft-Article 21.5, was the need to behave in full
consistency with the Antidumping Agreement in the implementation phase, including, if applicable in
the present case , in resorting to additional data, by guaran teeing procedural fairness to the interested
parties as required by Article 6 of that Agreement. It was in the context of the possible use of
additional data by the KTC, as argued by Indonesi a, in the implementation proceeding that Japan
addressed the issue of procedural rights of the interested party, not in conjunction with the
justifiability of the KTC's use of "facts available" or any other issue already raised and decided in the
original panel proceeding.
5.48 The Appellate Body in Canadian Aircraft-Article 21.5 provides a meaningful guidance in this
regard, as it clarified that the 21.5 panel is not rest ricted to examine the measures for implementation
from the perspective of the claims, arguments and f actual circumstances related to the measure that
was subject to the original proceedings. Japan quot ed this ruling in suppor t of its contention that
W T / D S 3 1 2 / R W

Members shall comply with covered agreements in taking any measures for implementation.
Especially, the re-determination process for the purpose of implementation of the DSB
recommendation is not at all different from the original investigation and other phase of the
antidumping procedures. Such re-determination process, too, is subject to the rules provided for in
the Antidumping Agreement, and therefore Member s can't escape from the procedural disciplines
articulated under Article 6 of the Antidumping Agr eement, including the requirement of guarantee of
procedural fairness to all interested parties.
5.49 As stated in its third-party submission, Japa n refrains from taking a particular position on the
factual aspects of the case including whether or not the KTC resorted to new facts during the
implementation phase. Japan rather asks the Panel to deliberate carefully on such question in light of
the above-mentioned viewpoints.
4. Conclusion
5.50 For the foregoing reasons, Japan respectfully requ ests the Panel to examine carefully the facts
presented by the parties to this dispute so as to ensure fair and objective application of the
Antidumping Agreement as well as proper compliance with the DSB recommendations.
E.
THIRD PARTY WRITTEN SUBMISSION OF THE SEPARATE CUSTOMS TERRITORY OF TAIWAN ,
PENGHU, KINMEN AND MATSU
1. Introduction
5.51 TPKM welcomes the opportunity to provide its views in these proceedings on the dispute
between Indonesia and Korea with respect to the implementation by Korea of the recommendations
and rulings of the DSB on Korea – Antidumping Duties On Imports Of Certain Paper From
Indonesia.
5.52 TPKM makes these written observations because of its systemic interest in the correct
interpretation of the Agreement and the GATT 1994. As a third party, TPKM addresses in its
submission certain critical issues raised in Korea's First Written Submission.
2. TPKM's Views on Article 6.8 of the Agreement
5.53 The issues discussed in this submission mainly relate to Article 6.8 of the Agreement. The
main issue before this Panel is the manner in wh ich Korea purported to implement the original Panel's
findings with respect to the KTC's use, in calcula ting the constructed normal value for the Indonesian
exporters, of facts available within the meaning of Article 6.8 of the Agreement in order to determine
interest expenses for CMI.
5.54 The original Panel found that the KTC acted inc onsistently with Article 6.8 and Annex II of
the Agreement in its use of facts available to determine interest expenses incurred by CMI. As the
Panel explained:
In the investigation at issue, we note that the KTC needed information regarding CMI's
SG&A and financial expenses in order to use th em in the construction of the normal values
for Indah Kiat and Pindo Deli. For SG&A, th e KTC based its determination on the data
pertaining to a trading company, i.e. [[Compan y A]]. With regard to financial expenses,
however, it relied on the data relating to [[Co mpany B]], a producing company. We have
seen no explanation on the record as to why the KTC decided to use the data relating to a
company whose activities were l ess similar to CMI, i.e. [[Company B]], although it had in
its possession data relating to a company, [[Company A]], which carried out activities
similar to those of CMI. This, in our view , runs counter to the obligation to exercise

special circumspection in the use of inform ation from secondary sources when applying
facts available, as set out under paragraph 7 of Annex II. We therefore conclude that the
KTC acted inconsistently with Article 6.8 of the Agreement and para graph 7 of Annex II
with respect to determining financial expen ses of CMI in the context of calculating the
constructed normal values for Indah Kiat and Pindo Deli.80
5.55 In Indonesia's First Written Submission, Indon esia contends that the KTC still failed to
implement the Panel's findings with respect to its anti-dumping measures because "it simply left its
determination substantively unchanged and merely advanced new a nd inadequate justifications for its
original decision".81
5.56 TPKM also notes that in its First Written Subm ission, Korea contends that: "the flaw
identified by the Panel's decision was the absence of an adequate explanation of the KTC's choice of
facts regarding the interest expense amount, and not the interest expense per se. T h e K T C ' s
implementation decision corrected that flaw by de monstrating, through logic and evidence, that the
interest expense rate it had used was reasonable".82
5.57 The problem with this dispute, in TPKM's view, lies in the concept of the "facts available" in
Article 6.8 and paragraph 7 of Annex II of the Agreement. In other words, to what extent the
information obtained by Korea from secondary sources for purposes of calculating CMI's interest
expenses against other independent sources at its disposal can be deemed within the scope of
application of "facts available".
5.58 Therefore, it appears to TPKM that whether th e "new information" obtained by the KTC
during the implementation procedure to provide evid entiary basis for concluding its determination on
CMI's interest expenses before the implementa tion proceeding is the permitting use of "facts
available." The issue of "facts available" should be judged in light of the "timing" at which facts
available are used.
5.59 In Korea's statement, the KTC examined whether the [BCI] per cent interest expense rate that
it had previously calculated for RAK could be co rroborated as a reasonable interest expense amount
for CMI. TPKM notes that as evidence to suppo rt its [BCI] per cent determination, the KTC
compared the calculated RAK rate to four separate sources of data. TPKM is concerned about
whether the four sources of data cited by the KT C as evidence that its estimate of the interest
expenses incurred by CMI is "not unreasonable" are new information obtained by the KTC only after
its final decision, and during the implementation proceed ing. If so, is this "new information" a fair
use of the "facts available", and particular available at that time to support its determination.
5.60 The basic objective of anti-dumping measures is to offset dumping only to the extent
necessary to address injury to a domestic industry. An important task for the investigating authorities
is to determine the margin of dumping by appr opriately reflecting the extent of the dumping by
responding parties. In some cases, however, the au thorities may not be able to obtain all necessary
data, but must nonetheless complete the proceeding within the prescribed period. To address such
situations, the Agreement allows authorities in certain situations to base their findings on information
from secondary sources known as "facts available".
5.61 Article 6.8 of the Agreement provides that:
In cases in which any interested party refu ses access to, or otherwise does not provide,
necessary information within a reasonable period or significantly impedes "the

80 Panel Report, para. 7.111.
81 First written Submission of Indonesia, para. 4.
82 First Written Submission of Korea, para 5.
W T / D S 3 1 2 / R W

investigation, preliminary and final determina tions", affirmative or negative, may be made
on the basis of the facts available."
In addition, Annex II(7) states in part:
If the authorities have to base their findings, in cluding those with respect to normal value,
on information from a secondary source, including the information supplied in the
application for the initiation of the investig ation, they should do so with special
circumspection. In such cases, the author ities should, where practicable, check the
information from other independent sources at their disposal, such as published price lists,
official import statistics and customs returns, and from the information obtained from other
interested parties "during the investigation".
5.62 Article 6.8 and Annex II of the Agreement both clearly provide that the "facts available" can
be considered to use when there is no adequate information which results in significantly impeding
the proceeding of "the investigation, preliminary and final determinations", and the authority should
check secondary sources with special circumspec tion "during the investigation". Based on the
wording in both Article 6.8 and Annex II, it appear s that the application of "facts available" is
admissible "only" to the circumstances during the investigation period, at least before the final
determination.
5.63 Therefore, in TPKM's view, to comply with the Panel's recommendation and finding as to
provide adequate explanation of the KTC's choice of that facts available interest expense amount, the
KTC's approach is to examine the information from its "original pool" of data during the
investigation, and not to collect new sources of da ta, which may not be "facts available" for use and
may not appropriately represent the situation of the prevailing state of the industry or the relevant
market, while the original investigation was taking place.
3. Conclusion
5.64 In the light of the preceding observations, TPK M invites the Panel to clarify whether the
selection of "facts available" includes only those sour ces of data available during the investigation, or
whether it may also include new source of data th at did not become available until after the final
determination.
F.
THIRD PARTY ORAL STATEMENT OF THE SEPARATE CUSTOMS TE RRITORY OF TAIWAN ,
PENGHU, KINMEN AND MATSU
5.65 TPKM focuses its comments on the obligation sh ouldered by the investigating authorities
when making their determinations based on "facts availa ble". The relevant provision at issue, will be
limited to paragraph 7 of Annex II to the Antidumping Agreement.
5.66 In the original Panel Report, it was decided that the Korean investigating authorities failed to
provide explanations on data they had relied upon with respect to financial expenses. In order to
bring this flaw into conformity with their WTO obligations, Korea partially re-opened the proceedings
and collected additional information to substantiate their reasoning. On this particular matter, TPKM
provides its comments and observations in the following three parts.
5.67 First, TPKM would like to argue that the reasonableness and appropriateness of a
determination made with "facts available" should always be judged with the information at one's
disposal and much more importantly, at that partic ular point of time. If subsequent information,
which was not available at the time of determinat ion, proved that the truth was not the same as
illustrated, the subsequent information should not re troactively invalidate the previous determination
base on incomplete information. To TPKM, this is the basic concept and very nature of the system
applying "facts available". This requirement is al so stipulated under paragraph 7 of the Annex II,

which mandates that "the authorities should … check the information from other independent sources
at their disposal … and from the information obtained … during the investigation " (Emphasis added).
The procedural justice must be preserved in situ ation where determination was made with "facts
available". To us, this is a clear guidance a nd statutory limitation established by the Antidumping
Agreement. If the original Panel could not accept explanation that was not available when making the
antidumping determination, this compliance panel should also reject it.
5.68 Second, even if this compliance panel is w illing to allow Korea to partially re-open the
proceedings, which TPKM's government is not in su pport of, there are due process concerns that are
also indicated by Japan and the European Communities in their Thir d Party opinions. In the re-
opened proceedings, the Indonesian company was willing to provide information from its own
prospective, but that plea was rejected because th at particular company was consider non-cooperative
in the original investigation. By so ruling, Ko rean investigating authorities had enjoyed an unfair
advantage in seeking for information to their liki ng, which rendered the whol e re-opened proceedings
unbalanced. TPKM's government is of the opinion that Korea should only stick to either one of their
positions: either staying in the framework of the original proceedings and supplement its explanations
with information already available at that time, or , alternatively, switch to the mode of a re-opened
proceedings where all interested parties should be allowed to enjoy equal right procedurally to present
their arguments.
5.69 Last but not the least, there are also policy imp lications and systematic concerns involved in
this matter. By accepting Korean argument, the en tire WTO Members would be taught a lessen that,
when applying "facts available", the investigating authorities could do whatever they want in the
original determination. They are entitled to search for justifications and/or explanations after the
completion of the original investigation. Sin ce dispute settlement cases do not happen all the time,
why bother going through all the trouble to do it right in the first place?
5.70 In the three WTO cases previously decided, such as the US oil country tubular goods
complained by Argentina, the Mexico corn syr up complained by the United States, and the United
States countervailing measures complained by the European Communities, the violation of those
sunset reviews were all compensated new proceedings . While in the current case, the application of
"facts available" is trying to s queeze in for the right to partially re-open. TPKM is now confronted
with the most difficult decision: is it allo wed for each and every flaw identified under the
antidumping investigations to be re-opened? Is there any need to draw the line somewhere?
5.71 TPKM would request this compliance Pane l to confirm TPKM's position that the
reasonableness and appropriateness should be judged with the information at one's disposal and, more
importantly, at that particular point of time. Or , if not so determined, TPKM would appreciate that
this Panel could draw the line for us, or at least, to rule on the issue whether "facts available" should
be allowed to re-open, even partially, and why?
G. THIRD PARTY ORAL STATEMENT OF THE UNITED STATES
5.72 The United States offers two brief observations regarding Korea's re-determination of injury
and Indonesia's claims under Articles 6.4 and 6.9 of the Antidumping Agreement.
5.73 First, Indonesia's claim under Article 6.4 is premised on the argument that the KTC fail[ed] to
disclose that it was using the same information as in the original determination, [and] fail[ed] to
provide the Indonesian exporters with an opportunity to comment. 83 Under Article 6.4, authorities
must:

83 See Indonesia’s First Article 21.5 Submission, paras. 173-76.
W T / D S 3 1 2 / R W

whenever practicable provide timely o pportunities for all interested parties to
see all information that is relevant to the presentation of their cases, that is not
confidential ..., and that is used by the authorities in an anti-dumping
investigation, and to prepare presentations on the basis of this information. As
recently noted by the panel in United States – OCTG from Argentina (21.5) , "the
text of Article 6.4 makes it clear that it does not apply to the reasoning of the
investigating authorities".
84 By its express terms, Article 6.4 applies only to
"information". The Panel should bear this distinction in mind in assessing
Indonesia's claim, especially given Korea's assertions that it did not obtain any
additional data relating to the injury issu es in the course of the implementation
proceeding
85, and that the parties had already been given an opportunity to see
and comment on all of the previously-coll ected data. To the extent that Korea's
assertions are correct, the United States no tes that Article 6.4 would not impose
any further obligations in terms of disclosing the analysis of the information or
how the investigating authorities would use (or not use) that information in
support of its determination.

5.74 Second, Indonesia argues that the KTC failed to "inform all interested parties of the essential
facts under consideration which form the basis for th e decision whether to apply definitive measures",
within the meaning of Article 6.9 of the Antidumpi ng Agreement. As an initial matter, the United
States notes that Article 6.9 of the Antidumping Agreement does not deal with opportunity for
comment. It deals only with the disclosure of "essential facts".
5.75 In addition, as the panel explained in United States – OCTG from Argentina (21.5) ,
"Article 6.9 imposes a one-time disclosure obligation on the investigating authorities regarding the
essential facts under consideration which would then form the basis of the authorities' final
determination whether to apply definitive measures". 86 In addition, the panel noted that "the text of
Article 6.9 clarifies that this obligation applies with respect to facts, as opposed to the reasoning of the
investigating authorities".87
5.76 In the present dispute, Korea asserts that, with respect to the facts under consideration which
would form the basis of the authorities' final dete rmination, the KTC had disclosed these fact to the
parties in the original proceeding and that no new facts were gathered in the course of the
implementation proceeding. To the extent these asse rtions are factually correct, Korea satisfied its
obligations under Article 6.9.
VI. FINDINGS
A. GENERAL ISSUES
1. Standard of Review
6.1 The standard of review that we shall apply in these proceedings is the same as that in the
original panel proceedings. We recall that Article 11 of the DSU provides the standard of review for
WTO panels in general. Article 11 requires the pa nels to make an objective assessment of both the
factual and the legal aspects of the case.

84 United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from
Argentina; Recourse to Article 21.5 of the DSU by Argentina, WT/DS268/RW, 30 November 2006, para. 7.124
(emphasis added) (hereinafter "United States – OCTG from Argentina (21.5)").
85 KTC’s First Article 21.5 submission, para 61.
86 United States – OCTG from Argentina (21.5), para. 7.148.
87 United States – OCTG from Argentina (21.5), para. 7.148.

6.2 Article 17.6 of the Anti-Dumping Agreement, however, sets forth a special standard of review
that applies specifically to panel proceedings dea ling with the application of this Agreement.
Article 17.6 provides:
(i) in its assessment of the facts of the matter, the panel shall determine whether
the authorities' establishment of the facts was proper and whether their
evaluation of those facts was unbiased and objective. If the establishment of
the facts was proper and the evaluation was unbiased and objective, even
though the panel might have reached a different conclusion, the evaluation
shall not be overturned;
(ii) the panel shall interpret the rele vant provisions of the Agreement in
accordance with customary rules of interpretation of public international law.
Where the panel finds that a relevant provision of the Agreement admits of
more than one permissible interpretati on, the panel shall find the authorities'
measure to be in conformity with the Agreement if it rests upon one of those
permissible interpretations.
6.3 Thus, taken together, Article 11 of the DSU and Article 17.6 of the Anti-Dumping Agreement
establish the standard of review that we will appl y with respect to both the factual and the legal
aspects of these proceedings. We shall, therefore, fi nd Korea's measure at issue to be consistent with
the WTO Agreements if we find that the Korean investigating authorities have established the facts
properly and evaluated them in an unbiased and ob jective manner, and that the determinations are
based on a permissible interpretation of the releva nt treaty provisions. We are not to carry out a de
novo review of the evidence in the record of the im plementation proceedings at issue nor to substitute
our judgement for that of the Korean investigating authorities even though we might have made a
different determination were we examining these records ourselves.
88
2. Burden of Proof
6.4 The burden of proof in these proceedings is the same as that in the original panel proceedings.
We recall that the general principles applicable to burden of proof in WTO dispute settlement require
that a party claiming a violation of a provision of the WTO Agreement by another Member must
assert and prove its claim. 89 In these Panel proceedings, In donesia, which has challenged the
consistency of Korea's measure, thus bears the bu rden of demonstrating that the measure is not
consistent with the relevant provisions of the Agreement. Indonesia al so bears the burden of
establishing that its claims are properly before the Pa nel. We also note that it is generally for each
party asserting a fact to provide proof thereof. 90 In this respect, therefore, it is also for Korea to
provide evidence for the facts which it asserts. Finally, we recall that a prima facie case is one which,
in the absence of effective refutation by the other part y, requires a panel, as a matter of law, to rule in
favour of the party presenting the prima facie case.
3. Function of Compliance Panels
6.5 In accordance with Arti cle 21.5 of the DSU, we are called upon to assess the existence or
consistency with a covered agre ement of the measure taken by Korea to comply with the DSB
recommendations and rulings at issue in these proceedings. We note that the DSU Article 21.5

88 Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones) (" EC –
Hormones"), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135, para. 117.
89 Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and
Blouses from India ("US – Wool Shirts and Blouses") , WT/DS33/AB/R and Corr.1, adopted 23 May 1997,
DSR 1997:I, 323, p. 337.
90 Ibid.
W T / D S 3 1 2 / R W

proceedings are distinct from original panel proceedings in the sense that they deal with the existence or
consistency with covered agreements of measures taken to comply with the DSB recommendations and
rulings, which are different from the measures subject to the original panel proceedings. This does not
mean, however, that the DSU Arti cle 21.5 proceedings have to be carried out in isolation from the
original panel proceedings. To the extent necessary, panels functioning under Article 21.5 of the DSU
can take account of the reasoning of the investigatin g authorities in an original determination or the
reasoning of the original panel, because "[t]he original determination and original panel proceedings,
as well as the redetermination and the panel proceedi ngs under Article 21.5, form part of a continuum
of events".91 We shall, therefore, in our evaluation of Indonesia's claims raised in these compliance
proceedings, take account of the KTC's reasoning in the original investigation at issue and our own
reasoning in the original panel proceedings, where appropriate.
B. CALCULATION OF CONSTRUCTED NORMAL VALUES FOR INDAH KIAT AND PINDO DELI
1. Arguments of Parties
(a) Indonesia
6.6 Indonesia's claim regarding the calculation of the constructed normal values for Indah Kiat
and Pindo Deli has two aspects. First, Indonesia ar gues that the KTC acted inconsistently with
Articles 2.2 and 2.2.2 of the Agreement in the calcu lation of the constructed normal values for Indah
Kiat and Pindo Deli. Indonesia's claim relates ex clusively to the determination of the interest
expenses for CMI, the selling company that was in charge of re-selling the subject product produced
by Indah Kiat and Pindo Deli in the Indonesian market in the period of investigation. Indonesia does
not challenge other aspects of the calculation of these normal values.
6.7 Indonesia does not question the KTC's assumption that a trading company like CMI could
theoretically have financial expenses. Yet, Indonesi a submits that the interest expenses that the KTC
added for CMI to the constructed normal values for Indah Kiat and Pindo Deli were not reasonable as
required under Articles 2.2 and 2.2.2. Indonesia contends that the KTC's use of a producing
company's financial expenses as surrogate for CM I did not constitute an objective and unbiased
determination because the activities carried out by these two entities were strikingly different.
Indonesia notes that the KTC used the data pertaini ng to April Fine, another trading company subject
to the same investigation, for CMI's SG&A expe nses other than interest and argues that using a
producing company's data when it came to interest expenses was only intended to artificially inflate
the margins of dumping for Indah Kiat and Pindo Deli. By doing this, the KTC overstated the selling-
related interest expenses in these two constructe d values because, unlike April Fine, RAK's activities
entailed production as well as selling. According to I ndonesia, had the KTC used April Fine's data to
determine CMI's financial expenses, it would have found de minimis margins for both Indah Kiat and
Pindo Deli. Finally in this regard, Indonesia subm its that the KTC's determination regarding CMI's
financial expenses also ran counter to Articles 2.4 and 2.1 of the Agreement.
6.8 Second, Indonesia contends that the KTC acted inconsistently with Article 6.8 of the
Agreement and paragraph 7 of A nnex II with regard to determin ing CMI's interest expenses.
Indonesia notes that the KTC had two secondary sources available to it in order to determine the
interest expenses of CMI: verified information relating to another trading company subject to the
same investigation, April Fine, and that relating to RAK, a manufacturing company and subsidiary of
April Fine, also subject to the same investigati on. Indonesia also notes that the KTC relied on the
data for April Fine in determining all of CMI's SG&A expenses except interest, and RAK's data for

91 Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS)
from the United States – Recourse to Article 21.5 of the DSU by the United States ("Mexico – Corn Syrup
(Article 21.5 – US)"), WT/DS132/AB/RW, adopted 21 November 2001, para. 121.

interest expenses and argues that there is no adequa te explanation on the record that would explain
this differentiation. Indonesia contends that taking into consideration the similarities of the scope of
business of the two companies, it would have been more appropriate for the KTC to base its
determinations regarding CMI's fi nancial expenses on April Fine's da ta. According to Indonesia, by
relying on the interest expenses of RAK, a manufac turing company, the KTC failed to apply special
circumspection as required under paragraph 7 of A nnex II. The KTC therefore failed to base its
determination regarding the fina ncial expenses of CMI on the most appropriate, most fitting
information as required under Article 6.8 and Annex II.
6.9 Indonesia acknowledges that in its Re-determinati on the KTC also cited information relating
to the interest expenses of other companies, in cluding three other Indonesian paper producers, three
Indonesian producers from outside the paper industry and five Korean companies engaged in selling
other products. However, Indonesia asserts that th e new bases cited in th e KTC's Re-determination
fail to justify its choice of source for CMI's financ ial expenses. Indonesia submits that these did not
establish alternative sources of information for th e KTC in terms of determining CMI's financial
expenses. Rather, they were used by the KTC in order to justify its preference for using RAK's
information for CMI. Finally, Indonesia also notes that the KTC in its Re-determination relied on the
information obtained from a publication called [BCI] and asserts that this information was not reliable
because it identified CMI as a manufacturing company and mixed the address of CMI with that of
Pindo Deli.
(b) Korea
6.10 Korea contends that the inconsistency found by the original panel in the KTC's determination
regarding CMI's interest expenses was the absence of an adequate explanation on the use of RAK's
data and argues that the KTC corrected that flaw in the implementation proceedings by demonstrating
that these data represented a reasonable amount for CMI's interest expenses. Korea disagrees with
Indonesia's view that the similarities of the activ ities carried out by different companies have a
bearing on their financial expenses. Indeed, the KTC collected evidence showing that some trading
companies could, for a variety of reasons, have hi gher interest expenses th an producers. Evidence
also showed some trading companies with higher inte rest expenses than CMI. Interest expenses are a
function of the amount of money borrowed by a co mpany, which depends on the company's corporate
strategy.
6.11 Notwithstanding the above observations, Kor ea submits that there was no conclusive
evidence on the record showing that CMI was mere ly a trading company. Verification of CMI's
information was not allowed in the underlying inves tigation. As a matter of law, therefore, it could
not be said that CMI was merely a trading compa ny. Furthermore, evidence placed on the record
during the implementation proceedings, i.e. the DIS report, indicated that CMI was involved in some
manufacturing activities. Hence, it was not non-objec tive or biased for the KTC to use RAK's data in
determining CMI's interest expenses. Korea also notes that in the implementation proceedings, the
KTC compared RAK's interest expenses with four different sets of data and concluded that the
amount of the interest expenses for CMI, added to the constructed normal values for Indah Kiat and
Pindo Deli, was reasonable.
6.12 Finally in this regard, Korea disagrees with Indonesia's assertion that CMI's activities were so
similar to those of April Fine that using financia l expenses of a company other than April Fine in
determining CMI's financial expenses did not represent an objective assessment. In this regard, Korea
contends that, unlike CMI, April Fine [BCI]. This, in Korea's view, represented a significant
difference between the financial expenses of April Fine and CMI.
W T / D S 3 1 2 / R W

2. Arguments of Third Parties
(a) European Communities
6.13 The European Communities notes that the original panel applied judicial economy on
Indonesia's claim under Article 2 of the Agreemen t. The European Communities submits that
depending on the facts of a given case, it may not necessarily be unreasonable for an investigating
authority to include in the constructed normal va lue interest expenses incurred from the production of
products not related to the product subject to the investigation.
6.14 The European Communities submits that depending on the nature of the inconsistency found,
a Member may bring its WTO-inconsistent measure into conformity with its WTO obligations in
different ways. The European Communities notes that Article 19.1 of the DSU provides certain
leeway with regard to the manner in which DS B recommendations and rulings may be implemented
by the Member concerned. The European Communities does not consider that Article 6.8 of the
Agreement limits this flexibility. In partic ular, in cases where the investigating authorities'
determination is found to lack a sound reasoning, the European Communities considers that the
authorities may need to redraft their reasoning and ma ke the amendments to their determinations that
they deem necessary.
(b) Japan
6.15 Without taking any position regarding the factua l aspects of Indonesia' s claim, Japan makes
certain observations on the use of facts available. Japan recalls that Article 6.8 of the Agreement
allows resorting to facts available only when certa in conditions are met. More specifically, Japan
contends that paragraph 7 of Anne x II requires the authorities to make sure that the information that
they use as surrogate for the missing information is the best information available. Thus, Korea has to
show that the conditions for resorting to facts availa ble were met in the proceedings at issue and that
the secondary information used in the place of th e missing information was the best information
available. According to Japan, the KTC's Re-deter mination does not seem to have done this because
it is limited to discussing the adequacy of the data from an alternative source of information without
explaining why the source itself was the most appropriate to replace the missing data.
3. Evaluation by the Panel
(a) Relevant Facts
6.16 We recall that the original investigation that gave rise to this dispute included, among others,
two producers from the Sinar Mas Group, Indah Kiat and Pindo Deli. In the original investigation,
Indah Kiat and Pindo Deli cooperated with the KTC, but the KTC's request for the verification of the
data pertaining to their trading company, CMI, w as denied. The KTC therefore decided to construct
the normal values for Indah Kiat and Pindo Deli. In these constructed normal values, costs pertaining
to the production activities of Indah Kiat and Pind o Deli were based on the data submitted by these
companies. Costs of CMI, however, were determin ed on the basis of facts available. Regarding
CMI's SG&A expenses except its financial expenses, the KTC used the figures relating to another
company from Indonesia, April Fine, also subject to the same investigation. April Fine was a trading
company selling the subject product produced by its subsidiary RAK which was also subject to the
investigation at issue. RAK was a producer of the subject product. For CMI's interest expenses, the
KTC used data pertaining to RAK.
6.17 In the original panel proceedings, Indonesia challenged the calculation of the constructed
normal values for the Indah Kiat and Pindo Deli under Articles 2 and Article 6.8 and Annex II of the
Agreement. We found a violation of Article 6.8 a nd paragraph 7 of Annex II and declined to make a
ruling under Article 2. The thrust of our findi ng of inconsistency was that by using a trading

company's data for CMI's SG&A expenses other th an financial expenses and a producer's data for
interest expenses without an adequate explanation for this differentiation, the KTC failed to observe
its obligation to exercise special circumspection in the use of information from a secondary source as
required under paragraph 7 of Annex II of the Agre ement. We considered that the investigating
authorities would normally be expected to take into account the similar ities and dissimilarities
between the business activities of the company whose in formation is used as facts available and those
of the company whose information is missing.92 In the relevant part of our report, we stated:
"In the investigation at issue, we note th at the KTC needed information regarding
CMI's SG&A and financial expe nses in order to use them in the construction of the
normal values for Indah Kiat and Pindo Deli. For SG&A, the KTC based its
determination on the data pertaining to a tr ading company, i.e. [April Fine]. With
regard to financial expenses, however, it relied on the data relating to [RAK], a
producing company. We have seen no explan ation on the record as to why the KTC
decided to use the data relating to a comp any whose activities were less similar to
CMI, i.e. [RAK], although it had in its possession data relating to a company, [April
Fine], which carried out activities similar to those of CMI. This, in our view, runs
counter to the obligation to exercise special circumspection in the use of information
from secondary sources when applying fact s available, as set out under paragraph 7
of Annex II. We therefore conclude th at the KTC acted inconsistently with
Article 6.8 of the Agreement and paragraph 7 of Annex II with respect to determining
financial expenses of CMI in the context of calculating the constructed normal values
for Indah Kiat and Pindo Deli."93
6.18 In the implementation proceedings following the original panel process, the KTC first
addressed the question of whether it would be prope r to use a manufacturer's financial expenses as
proxy for CMI and concluded that it would. The Re-determination reads in this regard:
"A. Whether the calculation of the [sic.] CMI's financial expenses based on the
financial statements of a manufacturing company is proper
(1) Whether any financial expenses may incu r in a company without a manufacturing
function
In relation to whether any financial expen ses may be incurred by CMI, assuming that
CMI operates only as a trading company without a manufacturing function;
A company conducting trading activities only can also be expected to be in need of
borrowing funds for the purchase of bu ildings, warehouses and goods, maintenance
of inventories, purchase or supplies and equipment necessary for the company, wages
for employees, overhead expenses, etc.
A trading company within a group may repr esent such group and be used as a vehicle
to procure the funds for facilities investment for a manufacturing company within the
same group if there are the grounds for the following situations: 1) the cost of
financing for the trading company is lowe r than the manufacturing company because
the former's credit rate is higher than the la tter; 2) procurement of the funds by the
trading company rather than the manufact uring company is more favourable under a
tax system; 3) it is necessary for the trading company to procure the funds in order to
avoid governmental regulations ; 4) it is necessary to avoid risks involving foreign

92 Report of the original panel, para. 7.110.
93 Ibid., para. 7.111.
W T / D S 3 1 2 / R W

exchange rate; 5) it is necessary for the trading company to borrow the funds
according to an existing loan agreement rega rding the procurement of the funds; 6)
the trading company functions as an invest ment company by holding subsidiary's
shares, etc. or 7) the determination of th e trading company as a vehicle to procure the
funds is made according to its policies.
Although a manufacturing company could not initially avoid financial expenses for
investment in its manufacturing facilities, it may have no borrowings at all afterwards
if it repays such borrowings with its ow n capitals procured by issuing additional
equity, or with the profits earned from its business activities; and in practice, many
such companies do exist.
Accordingly, the Trade Investigation Offi ce viewed that a trading company engaged
purely in the sale of goods may incur substan tial financial expenses, on the basis that
a functional classification as a manufacturer or a trading company cannot serve as a
sufficient basis for determining whether a company incurs financial expenses ."94
(emphasis added)
6.19 The KTC then inquired into the issue of whether CMI was merely a trading company and
concluded that this was not clear from the record. The Re-determination reads in this regard:
"(2) Whether CMI is a trading company purely conducting sales of articles.
In response to the questionnaires from th e Trade Committee about the dumping ratio,
Pindo Deli and Indah Kiat answered that CMI sells the goods of the two companies to
distributors in Indonesia and end users.
However, Pindo Deli and Indah Kiat refused to submit, at the on-site investigation,
sales information, cost information, financ ial statements (although they submitted an
income statement after the completion of investigation, which the Committee could
not verify) and related books of CMI during the investigation, and thus, the Trade
Committee failed to obtain any materials that can determine whether CMI was a
merely trading company only with a selling function or a manufacturing company.
In addition, according to other material that the Trade Committee obtained from a
third source, PT. Data Inti Swakarsa ("DIS" ), the business type of CMI was indicated
as a manufacturer.
In conclusion, not only was the Trade Committee unable to obtain any material that
can verify the business activities of CMI durin g the investigation, but also a third
source indicates that CMI operates as a ma nufacturer, such that the Trade Committee
concluded that the argument of Pindo Deli and Indah Kiat that CMI is a company
with a sales function only was groundless . In addition, the Trade Committee also
concluded that the use of less favourable data against a company which refused to
submit the relevant information and at the same time did not cooperate in the
investigation was not inconsistent w ith the WTO Anti-Dumping Agreement." 95
(footnote omitted, emphasis added)
6.20 Next, the KTC compared RAK's interest expense that it used for CMI against four sources: 1)
CMI information obtained from the DIS report, 2) financial expenses of four Indonesian paper

94 Exhibit IDN-11(b), p. 3-4.
95 Exhibit IDN-11(b), p. 4.

producers, including three Sinar Mas Group companies, 3) financial expenses of three Indonesian
producers producing non-paper products, and 4) financial expenses of five Korean trading companies
selling non-paper products. Relevant parts of the KTC's Re-determination read in this regard:
"B. Special Circumspection in determining the level of financial expenses of CMI
Pindo Deli and Indah Kiat refused to submit the financial statements of CMI to the
Trade Committee until the end of on-site investigation. After the on-site
investigation, they submitted an income statement of CMI, which could be not
verified for its accuracy.
Accordingly, in calculating the CV of Pindo Deli and Indah Kiat, the Trade
Committee assumed as the financing e xpenses incurred by CMI the financial
expenses in the amount of [BCI]% of the production costs based on the information
of April's affiliate submitted by April, an Indonesian company, which cooperated
with the dumping investigation.
In the meantime, the Trade Investigation O ffice reviewed the following third source
materials in order to determine whether the financial expense ratio used in the
calculation of CV of Pindo Deli and Indah Kiat was proper.
(1) According to CMI's financial information obtained from DIS, an Indonesian credit
rating information company, CMI incurred interest payable in the amount
corresponding to [BCI]% of cost of sales in 2002.96
(2) In order to determine how much financial expenses were incurred by an
Indonesian paper company, the Trade Inv estigation Office reviewed the materials
submitted by Pindo Deli and Indah Kiat which are the affiliates of CMI and also are
subject to this dumping investigation and th e ratio of financial expenses against cost
of sales in the 2001 and 2002 financial stat ements of Pindo Deli, Indah Kiat, Tjiwi
Kimia and Lontar Papyrus (PT Lontar Papyrus Pulp&Paper Industry) which were
submitted by the Applicants. The results were as follows:
Financial Expense Ratio of Indonesian Paper Industry

Company 2002 2001 Remarks
Pindo Deli [BCI]% [BCI]% Pindo Deli Audit Report
Indah Kiat [BCI]% [BCI]% Materials from Indah Kiat
Tjiwi Kimia [BCI]% [BCI]% Materials from APP
Lontar Papyrus [BCI]% [BCI]% xxx

Note) The financial expense ratio is the ratio of Interest payable/cost of sales in
financial statements.

96 We note that although this specific figure is not found in the DIS report, Korea demonstrated in
response to questioning that 15.3 was the interest expe nse to cost of goods sold . Response of Korea to
Question 3 from the Panel. Indonesia has not contested this calculation. We also note that although Korea
describes this figure as a percentage to cost of goods sold (see also the translation of the KTC's Re-
determination provided in KOR-S-4, p.27), the translation of the KTC's Re-determination provided by Indonesia
from which we quoted in this report describes it as a percentage to cost of sales . The difference in the
description of this aspect of CMI's interest expenses in the DIS report, however, is immaterial to our assessment
of Indonesia's claim.
W T / D S 3 1 2 / R W

(3) In order to check whether there is any other company in non-paper industry
having incurred the level of financial expenses that the Trade Committee applied , the
Trade Investigation Office obtained and analyzed the financial statements of
Indonesian companies and found the companies with the following financial
expenses.
Financial Expense Ratio of companies in Indonesia

Company 2002 Remarks
PT. Barito Pacific Timber Tbk [BCI]% xx
PT. Apac Citra Centerex Tbk [BCI]% xx
PT. Duta Pertiwi Tbk [BCI]% xx

Note) 1. The financial expenses of the above companies are calculated based on the
financial statements thereof obtained from Surabaya Stock Exchange, and Indonesian
stock exchange.
 2. The financial expense ratio is the ratio of Interest payable/Cost of Sales in
financial statements.

(4) The Trade Investigation Office investigated whether any Korean companies doing
wholesale or agency business incurred the level of financial expenses which the
Trade Committee applied to CMI and found th at such trading companies incurred the
financial expenses corresponding to [BCI] per cent or more of cost of sales as
follows:
Financial Expense Ratio of retail or wholesale companies in Korea

Company Year Financial expenses
(Mln. Won)
Cost of
Sales
(Mln.
Won)
Financial
expense
ratio
2002 Total Interest payable xx xx [BCI]% Uniwrap
Co., Ltd. 2002 Net Interest payable xx xx [BCI]%
2002 Total Interest payable xx xx [BCI]% Von Co.,
Ltd. 2002 Net Interest payable xx xx [BCI]%
2002 Total Interest payable xx xx [BCI]% Joongang
Green Stuff
Co., Ltd. 2002 Net Interest payable xx xx [BCI]%
2001 Total Interest payable xx xx [BCI]% Komi
Corporation 2001 Net Interest payable xx xx [BCI]%
2002 Total Interest payable xx xx [BCI]% Yusung
Co., Ltd. 2002 Net Interest payable xx xx [BCI]%

Note) 1. The financial expense ratio of the above companies were calculated based
on audit reports thereof obtained from we bpages of the Financial Supervisory
Services and the CPA Association.

 2. The financial expense ratio is the ratio of Interest payable/Cost of Sales in
financial statements. With respect to J oongang Green Stuff, the ratio of Interest
payable against selling expenses is applied since it is an agency company without cost
of sales.
In the meantime, since the above companies conduct no manufacturing activities but
only sell the goods supplied by manufacturers, they are deemed to play a similar role
as CMI, provided that CMI is a trading company.
As discussed in the foregoing, the Trad e Committee confirmed that after comparing
the ratio of the financial expenses against cost of sales of [BCI] per cent, first applied
by the Trade Committee, with the information obtained from third party sources such
as (1) the financial statements of CMI obtai ned from "DIS", (2) financial statements
of Pindo Deli, Indah Kiat, Tjiwi Kimia and Lontar Papyrus, all of which are paper
manufacturing companies in Indonesia, (3) fi nancial statements of other companies
engaging in other industries in Indonesia and (4) financial statements of the
companies engaging in wholesale or agency business in Korea, all subject companies
incurred interest expenses in the amount of more than [BCI] per cent of cost of sales.
On the basis of the foregoing information, the Trade Investigation Office confirmed
that the application to CMI of the financ ial expense ratio corresponding to [BCI] per
cent of cost of sales was appropriate, wh ich was evidenced by not only April's (a
subject company) information but also other materials, in calculating the CV of Pindo
Deli and Indah Kiat."97 (emphasis added)
6.21 The KTC then concluded that the interest rate used for CMI was reasonable and decided to
maintain the original margins of dumping calculate d for Indah Kiat and Pindo Deli in the original
investigation:
"5) Actions of the Trade Investigation Office
As a result of implementing the WTO Pane l's decision, the Trade Committee has not
found any reason to change the financial e xpenses previously determined, and the
dumping margin shall be the previous dumping ratio."98
(b) Legal Analysis
6.22 We note that Indonesia's claim regarding the calcu lation of CMI's interest expenses is mainly
based on two provisions of the Agreement: Article 2 a nd Article 6.8. As we did in the original panel
proceedings, we consider it appropriate to commen ce our evaluation of Indonesia's claim with Article
6.8 and then proceed, to the extent necessary for the resolution of the dispute, to Article 2.
6.23 Indonesia argues that the KTC failed to comply with its obligations under Article 6.8 and
paragraph 7 of Annex II of the Agreement in its use of facts available in these implementation
proceedings. Indonesia notes that in the implementa tion proceedings, as in the original investigation,
the KTC had two alternative sources of information to use in the determination of CMI's financial
expenses: data pertaining to April Fine and data pe rtaining to RAK. The KTC used April Fine's data
for all of CMI's SG&A expenses except interest expenses for which it used RAK's data. In
Indonesia's view, there is nothing on the record that e xplains this differentiation. In its choice of facts
available, the KTC did not carry out a comparative and evaluative analysis to determine whether the

97 Exhibit IDN-11(b), p. 5-7.
98 Exhibit IDN-11(b), p. 13.
W T / D S 3 1 2 / R W

RAK information was the most appropriate, best fitti ng in the circumstances at issue. Indonesia also
takes issue with the KTC's finding that the exact scope of CMI's bu siness was unclear. According to
Indonesia, this was a settled fact in the original investigation and also acknowledged by Korea in the
original panel proceedings. Even if this new fact ual finding was justified, Indonesia asserts that this
did not allow the KTC to determine CMI's interest expenses on the basis of RAK's data. This is
because by using the interest expenses pertaining to RAK, a production company, the KTC effectively
double-counted Indah Kiat's and Pindo Deli's producti on-related interest expenses. The information
that was missing, however, pertained to CMI's costs on the sales of the subject product. According to
Indonesia, therefore, the KTC should have used April Fine's interest expenses as proxy for CMI.
6.24 Korea, in turn, contends that the only inconsis tency found by the original panel regarding the
KTC's determination was the lack of an adequate e xplanation for the use of RAK's data as proxy for
CMI's interest expenses and that the KTC corrected it in the re-determination process. The KTC first
considered that a trading company could have inte rest expenses, just like a manufacturing company.
It then explained that it was not possible to ma ke a finding regarding the exact scope of CMI's
business. Finally, the KTC compared RAK's data agai nst different sets of data and concluded that it
was reasonable. Consequently, it continued to use RAK's data for CMI's interest expenses.
6.25 The issue is whether, as argued by Indonesia, the KTC's determination regarding CMI's
financial expenses is inconsistent with Article 6.8 and paragraph 7 of Annex II of the Agreement.
6.26 Article 6.8 reads:
"In cases in which any interested party refuses access to, or otherwise does not
provide, necessary information within a reas onable period or significantly impedes
the investigation, preliminary and final de terminations, affirmative or negative, may
be made on the basis of the facts available. The provisions of Annex II shall be
observed in the application of this paragraph."
We note that Article 6.8, interpreted in conjunction with the provisions of Annex II of the Agreement,
allows investigating authorities to use the best information ava ilable to them in cases where an
interested party fails to cooperate with the authorities. It allows authorities to fill in the gap caused by
such non-cooperation. In the process of filling in the gap, however, the Agreement does not provide
the authorities with a carte blanche. Provisions of Annex II, which impose certain limitations on the
authorities' latitude in the use of facts available, ha ve to be observed. One such limitation is found in
paragraph 7 of Annex II, which reads:

"If the authorities have to base their findings , including those with respect to normal
value, on information from a secondary source, including the information supplied in
the application for the initiation of the inv estigation, they should do so with special
circumspection. In such cases, the authorities s hould, where practicable, check the
information from other independent sources at their disposal , such as published price
lists, official import statistics and customs returns, and from the information obtained
from other interested parties during the investigation. It is clear, however, that if an
interested party does not cooperate and thus relevant information is being withheld
from the authorities, this situation could l ead to a result which is less favourable to
the party than if the party did cooperate." (emphasis added)
We note that paragraph 7 generally requires the i nvestigating authorities to exercise caution in their
selection of facts available. It also points out th at the investigating authorities have to check the
information obtained from secondary sources against other independent sources. Although, the last
sentence of paragraph 7 provides th at non-cooperation can lead to an outcome less favourable than it
would have been had the interested party in ques tion cooperated with the authorities, this does not
justify arbitrary selection of the data to be used in the place of the missing data.

6.27 In the proceedings at issue, it is undisputed that verification of CMI's data was not allowed in
the original investigation and that the recourse to facts available was justified under Article 6.8. The
dispute arises, however, as to whether the KTC co mplied with the requirements of paragraph 7 of
Annex II in its selection of information from sec ondary sources to replace the missing information.
We recall that the KTC used constructed norma l values for the two Sinar Mas Group companies,
Indah Kiat and Pindo Deli. One of the elements of the costs of these two producers was that related to
their selling company, CMI. Because verification of the data pertaining to CMI was not allowed, the
KTC used data from secondary sources in order to de termine CMI's costs. In this context, the KTC
obtained CMI's SG&A expenses other than interest expenses from another trading company subject to
the same investigation, April Fine, and inter est expenses from a company called RAK, which was
April Fine's subsidiary and also subject to the same investigation as a producing company. And here
lies the gist of Indonesia's claim. Indonesia asserts that this choice of facts available was arbitrary and
intended to inflate the margin of dumping. According to Indonesia, the KTC should have relied on
April Fine's data for interest expenses too. In support of its claim, Indonesia mainly relies on the
similarities of the activities of CMI and April Fi ne, both being trading companies of the subject
product in Indonesia. We recall that the interest rate used for CMI based on RAK's data was [BCI]
per cent
99 while April Fine's interest rate was [BCI] per cent.
6.28 We recall that in compliance proceedings under Article 21.5 of the DSU, it is the measure
taken to comply with the DSB recommendations and rulings, not the measure subject to the original
panel proceedings, that is reviewed. 100 The new measure has to be re viewed not from the perspective
of the claims and arguments developed in the orig inal panel proceedings, but from the perspective of
the claims and arguments developed in the implementation proceedings. 101 The fact remains,
however, that implementation proceedings are carried out against the background of the original panel
proceedings because, as mentioned above (para. 6.5), these two processes constitute a "continuum of
events". To the extent appropriate, therefore, we shall take into account our reasoning in the original
panel proceedings and that of the KTC in the orig inal investigation at issue in the resolution of
Indonesia's claims in these compliance proceedings.
6.29 We note that the KTC's re-determination regard ing CMI's financial expenses differs from its
original determination in two main regards. The KTC's decision to choose RAK's data for CMI's
interest expenses is premised on two grounds. Firs t, the KTC discusses whether using the interest
expenses of a manufacturer as proxy for CMI would be appropriate and concludes that it would. This
conclusion rests upon two propositions: 1) that a tr ading company may incur financial expenses, or,
put differently, that the interest expenses incu rred by a company are independent from the scope of
the company's business, and 2) that the KTC was una ble to make a finding regarding the exact scope
of CMI's business due to the lack of cooperation in the original investigation. Second, the KTC
corroborates RAK's interest expense that it uses for CMI against different sets of data and concludes
that it was proper. Below, we assess first th e consistency with Kore a's obligations under the
Agreement of the KTC's determination that it w as proper to use a manufacturing company's interest
expenses for CMI. Subsequently, we assess the corroboration that the KTC carried out for the interest
expense that it used for CMI.

99 We note that the [BCI] per cent interest rate that the KTC calculated for RAK and used as proxy for
CMI was erroneous and was subsequently changed to 12.75 per cent in the original investigation. Parties have
no disagreement over this factual issue. See, First Written Submission of Korea, footnote 30; First Written
Submission of Indonesia, paras. 100 and 107. These two figures are found in the KTC's calculations submitted
in Exhibit IDN-1.
100 Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft – Recourse by
Brazil to Article 21.5 of the DSU ("Canada – Aircraft (Article 21.5 – Brazil)") , WT/DS70/AB/RW, adopted
4 August 2000, DSR 2000:IX, 4299, paras. 40-41.
101 Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type
Bed Linen from India – Recourse to Article 21.5 of the DSU by India ("EC – Bed Linen (Article 21.5 – India )"),
WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965, para. 79.
W T / D S 3 1 2 / R W

(i) The Use of a Manufacturing Company's Interest Expenses for CMI
6.30 Regarding the KTC's finding that it was reasonabl e to use RAK's interest expense for CMI,
we first note that the Parties do not dispute the fact that a trading company may incur financial
expenses.102 They do, however, disagree as to the KTC's finding that, on the basis of the record, the
exact scope of CMI's business could not be determ ined. Before evaluating this factual finding,
however, we would like to address Korea's contention that the KTC did not make a finding on the
issue of the scope of CMI's business.
Did the KTC Make a Finding on the Issue of the Scope of CMI's Business?
6.31 Korea asserts that the KTC actually did not make a finding on the issue of the scope of CMI's
business.
103 We note, however, Korea's statement that "the KTC decided to take a look at the scope of
CMI's activities as part of the implementation process" (emphasis added). 104 Likewise, Korea also
stated that "[t]he KTC therefore concluded that, as part of the implementation proceeding, it should
revisit the issue of the scope of CMI's activities to dete rmine what conclusions, if any, could be drawn
(emphasis added)". 105 We recall that in its Re-determina tion, the KTC discussed the Sinar Mas
Group's argument that CMI was only a selling co mpany and concluded that this argument was
"groundless" (supra. para. 6.19). Given the lengthy discussion in the KTC's Re-determination on this
specific issue, and notwithstanding Korea's inconsistent statement that the KTC did not make a
finding on the issue of the scope of CMI's business, we consider that the KTC did in fact make such a
finding.
6.32 We now turn to Korea's assertion that the KTC' s finding on the issue of the scope of CMI's
business was not relevant to the KTC's decision to use RAK's interest expense for CMI.
Was the KTC's Finding on the Issue of the Scope of CMI's Business Relevant to its Choice of Facts
Available?
6.33 Korea argues that the KTC's finding regarding the uncertainty about the scope of CMI's
business did not play an important role in the KTC' s decision to apply RAK's interest rate for CMI.
106
According to Korea, "the KTC's determination fou nd that, whether or not CMI was engaged solely in
selling activities, the interest expense amount assigned as facts available was reasonable".107 We note,
however, that the Re-determination itself clearly show s that the finding on the issue of the scope of
CMI's business was one of the bases for the KTC's c onclusion that it would be proper to apply RAK's
interest rate to CMI. The Re-determination discusses th is issue in detail. It starts with the question of
whether a trading company may incur financial expen ses and concludes that it may. It then moves on
to the more specific question of whether the record supports the Sinar Mas Group's assertion that CMI
is merely a trading company with no manufacturi ng activity and concludes that it does not. RAK, a
company producing the subject product in Indonesia and subject to the same investigation, is then
chosen as a source to determine CMI's financial e xpenses. After corroborating the [BCI] per cent
interest rate of RAK that it uses for CMI, the Re-det ermination concludes that th is rate is reasonable.
Given this carefully organized line of reasoning be hind the KTC's Re-determination, we do not agree
with Korea's contention that the finding on the issu e of the scope of CMI's business was irrelevant to
the KTC's ultimate decision to base CMI's interest expense on RAK's data.

102 Indonesia agrees with the KTC's proposition that selling companies may incur financial expenses
like any other company. See, First Written Submission of Indonesia, para. 118.
103 Response of Korea to Questions 6 and 11 from the Panel.
104 Comments of Korea on Indonesia's Reponses to Panel's Questions, para. 13.
105 Comments of Korea on Indonesia's Reponses to Panel's Questions, para. 66.
106 See, First Written Submission of Korea, paras. 44-45; Opening Statement of Korea, para. 15.
107 First Written Submission of Korea, para. 45.

6.34 In addition, we note that th e discussion of the scope of CMI's business in the KTC's Re-
determination is not limited to the parts quoted above (para. 6.19). There are other references to this
issue elsewhere in the Re -determination. For instance, in response to the legal opinion submitted by
the Sinar Mas Group to the effect that CMI is me rely a re-seller, the KTC provides the following
reasoning in its Re-determination:
"To prove that CMI did not engage in manufacturing business, the Sinar Mas Group
submitted an opinion of an Indonesian law firm as attached to as annex 4. In this
regard, the Panel had never raised a question about the fact that the Sinar Mas Group
refused the investigation of the Trade Committee designed to determine CMI's
business scope and kind, and reached no conclusion that the Trade Committee should
admit the claim of the Sinar Mas Group that CMI had no manufacturing business
although the Panel was aware of such claim during the deliberation of the Panel. The
Trade Investigation Office, with regard to whether or not to admit the claim that CMI
had no manufacturing function and borrowings in the course of implementing the
Panel's decision, reviewed all records and materials retained by the Trade Committee
including the materials submitted by the Sinar Mas Group, and concluded that there
was no evidence of any kind to verify such claim . The opinion of a lawyer submitted
by the Sinar Mas Group (annex 4) was not submitted to the Trade Committee at the
original investigation and thus was not held a part of the records of this investigation.
In the meantime, the opinion contained in annex 4 premises that all documents
submitted to the law firm were rightful, correct, and unmodified and that CMI comply
with any and all relevant Indonesian laws a nd regulations, but the fact that the Sinar
Mas Group refused the investigation of th e Trade Committee during the investigation
made this Office sceptical a bout such premises being satisfied. That is, the opinion
on the business of CMI without the premises being satisfied was viewed by the Trade
Investigation Office as unreliable. In addition, the Trade Investigation Office viewed
that if the Office could not conduct the inv estigation of such company, no facts were
verified, and thus the Office had no reason to accept the legal opin ion even if such
opinion was submitted."108 (emphasis added)
We are curious why the KTC devoted such significan t portions of its Re-determination to discussing
the issue of the scope of CMI's business if, as argued by Korea, this issue was irrelevant to its ultimate
decision to use RAK's interest expense for CMI. We therefore conclude that the KTC's Re-
determination shows that the issue of the scope of CMI's business was relevant to the KTC's choice of
facts available. We recall that the standard of re view that we have to observe in these proceedings
(supra, paras. 6.1-6.3) require us to assess whether the KTC's establishment of the facts was proper.
Thus, we have to evaluate whether the KTC's fi nding that the scope of CMI's business was not clear,
was proper. With that in mind, we now turn to the arguments raised by Indonesia in support of its
assertion that the KTC's finding on the issue of the scope of CMI's business was not proper.

Did the KTC Properly Establish the Facts in Connection With its Finding on the Issue of the Scope of
CMI's Business?
6.35 Indonesia submits that the KTC's finding that the scope of CMI's business was not clear, is
devoid of an adequate basis. Indonesia argues th at it was clear from the r ecord of the original
investigation and from the findings of the origin al panel that CMI was a trading company.
Furthermore, there was no basis for the KTC to assume that CMI had any business activities other
than selling the subject product produced by the Sinar Mas Group companies. In this context,
Indonesia cites many instances where the KTC descri bed CMI as a trading company in the original

108 Exhibit IDN-11(b), p. 9.
W T / D S 3 1 2 / R W

investigation.109 Among these instances, however, none constitutes a factual finding that CMI's sole
business was to re-sell the subject product produced by Indah Kiat and Pindo Deli. Indonesia also
cites observations that we made in our original panel report on this issue. For instance, Indonesia
cites our statement that:
"... CMI is a trading company that does almost all domestic sales of the subject
product by Indah Kiat and Pindo Deli. Since it is not involved in the production of
the subject product, clearly CMI would not have any productio n-related financial
expenses."110 (emphasis added)
We note that in the quoted part of our report, we observed the fact that CMI was a trading company
that sold the subject product produced by Inda h Kiat and Pindo Deli. We also expressed our
observation of the then undisputed fact that CMI did not produce the subject product. We note,
however, that the exact scope of CMI's business, i.e. whether CMI's business was limited to selling
the subject product produced by Indah Kiat and Pi ndo Deli, was not at issue in the original panel
proceedings. It follows that we could not be e xpected to, and did not, make a factual finding on the
exact scope of CMI's business in the original panel proceedings.

6.36 We recall that Korea does not dispute the fact that CMI was the re-seller of the subject
product produced by Indah Kiat and Pindo Deli. Ko rea argues, however, that because verification of
CMI's information was not allowed, the KTC was not certain as to whether CMI could have had
business activities other than selling the subject product produced by Indah Kiat and Pindo Deli.
111
None of the Parties argues that the KTC made a sp ecific finding in the original investigation on the
issue of the scope of CMI's business. This issue was specifically addressed for the first time in the
implementation proceedings at issue. We note that the reason why the KTC inquired into this issue
was in order to rebut the Sinar Mas Group's argument that because CMI was a trading company
engaged merely in the resale of the subject pr oduct produced by Indah Kiat and Pindo Deli, it was
more similar to April Fine than to RAK and theref ore the KTC should have used April Fine's interest
expense for CMI. We note that, as Indonesia specific ally pointed out, the KTC consistently described
CMI as the re-seller of the subject product produced by Indah Kiat and Pindo Deli in the original
investigation. Likewise, in the original panel pr oceedings, we also referred to CMI as the trading
company that sold the subject product produced by Indah Kiat and Pindo Deli. Yet the fact remains
that neither in the original inves tigation nor in the original panel proceedings did this specific issue
play a key role. Our findings in the original panel proceedings were based on the assumption that
CMI was the trading company that sold the subject product produced by Indah Kiat and Pindo Deli.
As Korea also points out, this was mainly because "for the most pa rt, the arguments presented by the
parties during the initial panel proceeding assumed (f or the sake of argument) that CMI was engaged
only in selling activities".
112 The reason why this became an important issue in these compliance
proceedings is because in the implementation pr oceedings at issue the KTC made a finding on the
issue of the scope of CMI's business and Indonesia disagreed with the KTC's conclusion that the exact
scope of CMI's business was not clear. We theref ore do not find unreasonable the KTC's inference
from the record that it was not certain whether th e scope of CMI's business was limited to the sales of
the subject product produced by the Sinar Mas Group's producers.
6.37 We note that in addition to the lack of cl arity on the record, the KTC also relied on the
information in the DIS report in concluding that the exact scope of CMI's business was not clear. We
shall therefore also address Indonesia's allegations regarding this report. Indonesia argues that the

109 See, for instance, Response of Indonesia to Question 13(e) from the Panel.
110 Report of the original panel, para. 7.102.
111 See, for instance, Closing Statement of Korea, para. 5; Comments of Korea on Indonesia's
Responses to Panel's Questions, para. 11.
112 First Written Submission of Korea, para. 36.

KTC's reliance on this report was improper because of the deficiencies found in this report, which
were reported by the Sinar Mas Group to the KTC in the implementation proceedings at issue. The
first shortcoming that Indonesia cite s regarding this report is that it mixes the address of CMI with
that of Indah Kiat and the second is that it identifies CMI solely as a manufacturing company without
mentioning its trading function. Furthermore, Indonesi a contends that the discla imer that it contains
renders the DIS report even less reliable.
6.38 The DIS report provides in relevant parts:
"Copyright & Disclaimer
This product has been supplied by [BCI] so lely for use by its authorised licensees
strictly in accordance with their license agreements with DIS. DIS makes no
representation to any other pers on with regard to the completeness or accuracy of the
data or information contained herein, and it accepts no responsibility and disclaims all
liability (save for liability which cannot be lawfully disclaimed) for loss or damage
whatsoever suffered or incurred by any other person resulting from the use of, or
reliance upon, the data or information contai ned herein. Information provided is not
financial product advice. This report contai ns general information only. It is not
intended as financial product advice and must not be relied upon as such. You should
consider obtaining independent advice tailored to your specific circumstances before
making any financial decisions...
Name of Establishment: PT. Cakrawala Mega Indah
Address: Wisma Indah Kiat Building, 3rd Floor JI. Raya Serang Km. 76, Keragilan-
Sentul, Serang 42184 Banten

Number of Employee: 100
Business Type: Manufacturer
Establishment Status: National Company

Cakrawala Mega Indah is a national company. The company is a manufacturer, and
their business activity include: paper and pul p. With its head office in Jakarta,
Cakrawala Mega Indah employs around 100 staff in 2004."
113 (emphasis added)
6.39 We note that the disclaimer found in the preamble to the report is of the kind that would call
for caution when using the information that the report contains. It clearly states that the information is
of general nature and should not be relied upon in making business d ecisions. In our view, a report
that is not sufficiently reliable for business decisions may not be considered to be any more reliable
for purposes of an anti-dumping investigation. Furthermore, we note that the Sinar Mas Group
brought to the KTC's attention the fact that th e DIS report mixed the addresses of CMI and Indah
Kiat. In its letter dated 16 June 2006, the Sinar Mas Group stated:
"The KTC relies on information sourced from [BCI] to support its choice of
secondary sources. In order to respond adequa tely to the [sic.] this evidence, the

113 Exhibit IDN-7, p. 1-2.
W T / D S 3 1 2 / R W

Sinar Mas Group will require access to the documents obtained from [BCI].
However, we note that the statements that CMI is a manufacturing company and that
CMI's interest expenses total [BCI]% of sales cost are completely false. This can be
directly verified by the KTC if it so wi shes. We also note that the [BCI] website
states that the address of the purported CMI pulp and paper division factory is
"Wisma Indah Kiat, 3rd Floor Jl. Raya Serang Km. 76, Kragilan, Serang 42184".
However, this is not the address of a CMI factory, instead it is the address of the
Indah Kiat factory in Serang. It appears that [BCI] has failed to distinguish between
CMI and its affiliated manufacturing companies. This clearly shows that information
sourced from [BCI] is faulty. We have att ached the relevant printout from the [BCI]
website and a reference to the address of Indah Kiat's Serang factory as Annex 5." 114
(footnote omitted, emphasis added)
6.40 In response, the KTC held in its Re-determination:
"In this regard, the Trade Investigation Office added the materials obtained from
"DIS" into evidence in order to corroborate CMI's financial expenses. Therefore, the
Trade Investigation Office, in relation to corroboration of CMI's financial expenses,
reviewed the materials submitted by the Si nar Mas Group (annex 5), and found that it
cannot be used as a basis for denying the ma terials obtained from "DIS" by the Trade
Investigation Office for corroboration becau se the materials submitted by the Sinar
Mas Group was only a print out of the materials of "DIS" and the addresses of CMI
and Indah Kiat."115 (emphasis added)
6.41 We note that the above excerpt from the KT C's Re-determination indicates that the KTC
rejected the documents submitted by the Sinar Mas Group to prove its allegation that the DIS report
mixed addresses of CMI and Indah Kiat on the grounds that the docume nts were printouts of the DIS
materials and addresses of CMI and Indah Kiat. Korea argues that "[t]he KTC found that the
"printouts" submitted by Indonesia to show an alle ged error in the DIS report were not persuasive".
116
In response to questioning during the meeting of the Panel with the Parties, however, Korea
mentioned that the KTC's version of the DIS report was also a printout from an internet site. 117
Hence, the format in which the KTC itself obtaine d the mentioned report was not different from the
format in which the Sinar Mas Group submitted its DI S materials. We do not find the DIS report that
the KTC itself used in its Re-determination to be any more convincing than the DIS materials
submitted by the Sinar Mas Group. We therefore do not consider that the KTC relied on a proper
justification in not taking into consideration the documents submitted by the Sinar Mas Group with a
view to demonstrating the alleged unreliability of the DIS report.
6.42 Korea has pointed the Panel's attention 118 to the following discussion in the KTC's Re-
determination on this issue:
"Firstly, with regard to the argument of Sinar Mas on the information obtained from
DIS company, while Indah Kiat is a large company employing more than
17,608 persons at [sic.] of 2001, the information from DIS company described that
CMI is a small company having 100 employees only. Given this, DIS company is not
deemed to confuse CMI with Indah Kiat when preparing information. Further, it is

114 Letter by the Sinar Mas Group dated 6 June 2006 (Exhibit IDN-5, p. 3). The Sinar Mas Group
repeated the same argument in its letter dated 13 June 2006 (Exhibit IDN-8, p. 1).
115 Exhibit IDN-11(b), p. 11.
116 Response of Korea to Question 5 from the Panel.
117 Korea submitted the version of the DIS report th at was in the KTC's possession in Exhibit KOR-S-
11-E.
118 Response of Korea to Question 5 from the Panel, footnote 7.

possible that CMI can manufacture goods by using Indah Kiat's factory and, thus DIS
company may describe the address of CMI as that of Indah Kiat's factory. Therefore,
as to the first insistence of Sinar Mas Group, DIS company may not be deemed to
confuse CMI with Indah Kiat by reason of indicating the same address for both
companies."119 (footnote omitted, emphasis added)
6.43 We note that in this section of its Re-deter mination, the KTC argues that because the DIS
report indicates the number of CMI's employees as 100, it can not be mixing it with Indah Kiat which
has many more employees than that. The KTC also suggests that it may be that the report gave Indah
Kiat's address for CMI because the latter is capab le of carrying out manufacturing activities by using
the facilities of the former. The Sinar Mas Group br ought to the KTC's attention an issue that would
reasonably raise doubts about the accuracy of the information in the DIS report. The KTC invalidated
this doubt on the basis of some other informati on, the number of employees, found on the same
report. Furthermore, the KTC speculated that th e reason why the DIS report gives the same address
for Indah Kiat and CMI could be because CMI c ould be engaged in produc tion through the facilities
of Indah Kiat. However speculative this may otherw ise be found, we do not totally exclude that CMI
could, as the KTC mentioned, be producing the subject product by using Indah Kiat's production
facilities. We note, however, that the KTC's reasoni ng is not premised on any evidentiary basis. As
such, it remains purely conjectural.
6.44 On the basis of the foregoing, we consider th at the KTC's reliance on the DIS report and the
manner in which it addressed the Sinar Mas Group's concern over the accuracy of the information in
the report indicates that the KTC's establishment of th e facts regarding its finding on the issue of the
scope of CMI's business was not proper. We recall that the KTC's finding on the issue of the scope of
CMI's business was made in the context of the broade r issue of whether it would be appropriate to use
a manufacturing company's interest expenses for CMI. We also recall that this broad issue constituted
the first of the two main bases of the KTC's ultimate decision to use RAK's interest expenses for CMI.
As far as the first base of the KTC's ultimate decision is concerned, therefore, we find that the KTC
failed to exercise special circumspection within the meaning of paragraph 7 of Annex II.
(ii) The KTC's Corroboration of the Interest Expense Used for CMI
6.45 We now turn to Indonesia's arguments concerning the KTC's corroboration of the interest rate
used for CMI with the interest rates pertaining to certain other companies. We recall that the KTC,
after using RAK's interest rate as proxy for CMI, compared it against various sources and concluded
that the interest rate used for CMI was proper. The first source cited in this context is the DIS report.
The KTC's Re-determination points out that CMI's inte rest rate was indicated as [BCI] per cent of its
cost of sales in that document. Second, the KTC l ooked to the interest rates of Indah Kiat and Pindo

119 Exhibit KOR-S-4, p. 38. Although, for the sake of consistency, we have used throughout our
findings the translation of the KTC's Re-determination provided by Indonesia, in this instance we quoted from
the translation provided by Korea because the latter rais ed concern about the quality of translation provided by
Indonesia. See, Response of Korea to Question 5 from the Panel. This comment related only to this specific
quotation and Korea has not generally argued that the Panel should use Korea's translation throughout its
findings. We note that the excerpt that we have quoted reads as follows in the translation provided by
Indonesia:
"First, with regard to the Sinar Mas Group's claims regarding the materials from "DIS", it does
not seem that "DIS" confused CMI and Indah Ki at based on the fact that the address of CMI
concurred with that of Indah Kiat because it described CMI as a small company with XX
employees while Indah Kiat as a big company with XX,XXX employees as of 2001, and that
CMI is capable of manufacturing the goods using the factory facilities of Indah Kiat in that
"DIS" could have described the address of Indah Kiat's factory as CMI's factory."
See, Exhibit IDN-11(b), p. 13.
W T / D S 3 1 2 / R W

Deli plus two other Indonesian paper manufacturers, which were significantly more than the [BCI] per
cent figure used for CMI. Third, the KTC looked to the interest rates of three Indonesian companies
engaged in the production of non-pa per products and found that they were also higher than [BCI] per
cent. Finally, the KTC analyzed the interest rates of five Korean companies engaged in wholesaling
of non-paper products and again found that they were also significantly higher than [BCI] per cent.
The KTC then concluded that the interest rate taken from RAK as proxy for CMI was appropriate.
6.46 Indonesia argues that the KTC's corroboration did not validate its choice of RAK as proxy for
CMI's interest expenses. Nor did it invalidate th e appropriateness of using April Fine's interest
expenses for CMI. According to Indonesia, the KTC should have taken into consideration the
similarities/dissimilarities between the activities of CMI and those of the companies that it used for
corroboration. Because none of them were engaged in "(i) the activity of reselling (ii) the product
under investigation (iii) in the Indonesian market", co mparing RAK's interest rate against the rates of
these companies did not justify the KTC's deci sion to use RAK's interest expenses for CMI. 120
Indonesia maintains that the KTC should have used Ap ril Fine's interest rate for CMI because, unlike
RAK which is a manufacturing company, April Fine was engaged in the same kind of activity as
CMI. Korea disagrees. According to Korea, th e interest expenses that companies may incur are
independent from their business activities. Inter est expenses are a function of how much money a
company borrows to finance its operations. Diff erent companies may have different financial
strategies and may therefore use different ways of financing. Indonesia's argument that April Fine
would have been the correct proxy for CMI becau se of the similarities of their business activities
should, therefore, be rejected.
6.47 We recall that the main basis of our finding of inconsistency in the original panel proceedings
regarding the determination of CMI' s interest expenses was the lack of an adequate explanation for
using different sources of information for different elements of CMI's SG&A expenses. We reasoned
that there would normally be differences between the financial expenses of a producing company and
those of a trading company because "[p]roduction activities might require more capital investments
and might therefore be more likely to give rise to higher financial expenses." 121 We therefore found
unusual the KTC's decision to use RAK's interest ra te for CMI. We did not, however, exclude the
possibility that in a given investigation the inv estigating authorities could use a producing company's
interest rate as proxy for a trading company, or vice versa, as long as the reasons for this approach are
adequately explained.122 We do not consider that there are strict rules that the investigating authorities
have to follow in determining th e financial expenses of different kinds of companies on the basis of
facts available. In the circumstances of the impl ementation proceedings at issue, however, we find it
noteworthy that the KTC used April Fine's data to determine all of CMI's SG&A expenses except
interest expenses for which it used the data pertaining to RAK. We do not consider that this approach
was inconsistent simply because the nature of CMI's and RAK's businesses were different. We note,
however, that the KTC's Re-determination does no t explain the reason for this dual approach
regarding the secondary sources of information used to determine different elements of CMI's SG&A
expenses. In our view, even if there was no di fference between the nature of the businesses of CMI
and April Fine on the one hand and RAK on the othe r, the special circumspection requirement of
paragraph 7 of Annex II would call for an explanati on as to why different sources have been used for
different elements of CMI's SG&A expenses. Give n the significant difference between the interest
expenses of April Fine and RAK, the need for an explanation became, in our view, even more
important in the circumstances of the proceedings at issue. As we mentioned in our original panel
report, we do not exclude the possibility that a produc ing company's data may be used in the place of
a trading company's data as long as the authorities' determination adequately explains the reason for
such an approach. In this case, however, there is no such adequate explanation.

120 First Written Submission of Indonesia, para. 136.
121 Report of the original panel, para. 7.110.
122 Ibid.

6.48 Korea submits that [BCI], April Fine's and CMI's financing requirements were significantly
different. Consequently, the Sinar Mas Group's as sertion regarding the similarities between these two
companies are groundless. 123 Indonesia argues that this differen ce does not change the fact that the
scope of business of these two companies were more similar compared with RAK. Indonesia adds
that CMI received its compensation at the time of the sale and transmitted the balance of the
customer's payment to the relevant producer in the Sinar Mas Group. This, in Indonesia's view,
invalidates Korea's point that April Fine was in a better financial situation than CMI because, [BCI],
CMI obtained its compensation at the time of the sale. 124 We note that Korea's argument in this
regard does not have a basi s in the Re-determination. 125 It therefore constitutes ex post facto
justification and we can not base our assessment on it.
6.49 As we mentioned at the outset, one element that made the implementation proceedings at
issue different from the original investigation su bject to the original panel proceedings was the
corroboration of RAK's interest rate with various groups of companies. The KTC first cited the [BCI]
per cent interest rate indicated in the DIS report fo r CMI. It then found support for its decision to use
RAK's interest rate for CMI in the fact that there were other companies that had interest rates similar
to or higher than that of RAK. As far as the co rroboration with the DIS report is concerned, we recall
that we have already found that the KTC's relianc e on the DIS report in connection with its finding on
the issue of the scope of CMI's business was no t based on a proper justification. Using the
information in this report for corroboration, theref ore, did not satisfy the obligation set forth in
paragraph 7 of Annex II.
6.50 As far as the corroboration with the data pertai ning to the other companies is concerned, our
general view is that it does not explain why the KTC used RAK's interest expense for CMI. It merely
shows that there were some other companies that had an interest expense similar to that of RAK. The
KTC could, in our view, have brought together a different list of companies from different sectors and
engaged in different areas of activ ities whose interest expenses could be higher or lower than that
used for CMI in these proceedings. In our view, the issue is not whether the interest expenses used by
the KTC for CMI were in line with the expenses of some other companies, but rather whether the
KTC exercised special circumspection in deciding to use RAK's interest expenses as proxy for CMI.
In this regard, we generally note that the KTC's Re-determination focuses on what is "appropriate" or
"proper" in terms of representing CMI's interest expenses ( supra, para. 6.20), rather than showing in
what ways, if at all, the KTC exercised special ci rcumspection in the use of the information from the
secondary source, RAK, from which such expenses were derived.
6.51 In this connection, we would like to stress that we are not implying that the KTC should have
used April Fine's interest expenses as proxy for CMI. Rather, it is the non-existence on the record of
an adequate explanation as to why the KTC decided not to use April Fine's data for interest expenses
although it used it for all other elements of CMI's SG &A expenses that, in our view, makes the KTC's
determination fall short of the special circumspection requirement of paragraph 7 of Annex II. In this
regard, we find noteworthy Korea's statement duri ng the original panel proceedings that in the
original investigation the KTC decided not to use RAK's SG&A data as proxy for CMI on the
grounds that this would have been dispropor tionate for a company operating at CMI's level.
126 Korea

123 First Written Submission of Korea, para. 38.
124 Second Written Submission of Indonesia, paras. 55-56.
125 Korea stated that although this information was obtained by the KTC during the original
investigation, it was not addressed in the KTC's determination. Response of Korea to Question 8 from the
Panel.
126 In its Second Written Submission in the original panel proceedings, Korea stated:
"[T]he KTC did not use the overall SG&A expense shown in the income statement of the
April Fine subsidiary that bore the costs for manufacture and sales of the subject merchandise,
because the KTC concluded that this SG&A expense rate was disproportionate to the expenses
incurred by a company operating at the level of CMI." Exhibit IDN-20(b), p. 29-30.
W T / D S 3 1 2 / R W

has not drawn our attention to any difference in the circumstances that would justify the change in the
KTC's approach in this regard.
6.52 Indonesia also takes issue with the simila rities/dissimilarities between CMI and the
companies used for corroboration. With regard to the four Indonesian paper manufacturers – Indah
Kiat, Pindo Deli, Tjiwi Kimia and Lontar Papyrus – Indonesia argues that these are not appropriate
benchmarks because – unlike CMI – they are producers of the subject product. With regard to the
three Indonesian producers producing non-paper products, Indonesia argues that they do not establish
an appropriate benchmark because they are not engaged in re-selling paper in Indonesia. Finally, with
regard to the five Korean comp anies, Indonesia submits that they do not operate in the Indonesian
market, nor are they engaged in the sales of the subject product.
127 Korea, in turn, contends that the
financial expenses of a company are independent fro m the nature of its activities. According to
Korea, companies may use different ways to satisfy their financing needs, such as "various forms of
debt transactions, stock transactions, and even corporate operating transactions". 128 As we mentioned
earlier, it is not the alleged dissimilarities between the nature of CMI's business and that of the
companies used for corroboration that makes th e KTC's determination inconsistent with the
requirement of paragraph 7 of A nnex II to apply special circumspection in the use of information
from secondary sources when resorting to best in formation available under Article 6.8 of the
Agreement. Rather, it is the non-existence of an adequate explanation as to why different sources
have been used to replace different elements of CMI's SG&A expenses that makes the KTC's
determination inconsistent in this regard. Corroborating RAK's inter est expense with that of some
other companies does not constitute such an explanat ion. It merely shows that some other companies
also incurred the same level of interest expense that RAK did in a given period of time. As such, this
analysis remains arbitrary.
6.53 In a different vein, Korea argues that "[t]here was no reason to assume that CMI would have
zero interest expense, even if its activities were limi ted to sales and distribution" and that "[t]here was
no a priori reason to believe that the actual interest e xpenses of CMI would be more similar to the
expenses of a trading company (like April Fine ) than to the expenses of a company with
manufacturing operations (like RAK)". 129 This reasoning defies logic because it could equally apply
the other way round. In other words, one could also argue that there was no reason to assume that
CMI's interest expenses would be similar to those of RAK. Korea argues that "[t]he RAK interest
expense was consistent with the available informat ion concerning the interest expenses incurred by
sales and distribution companies and by manufact uring companies producing similar and non-similar
merchandise".130 Korea refers to the companies who se information was used for corroboration
purposes. As we explained above, however, the co rroboration carried out by the KTC was based on
the information pertaining to a group of companies selected by the KTC. Us ing the same approach,
one could also come up with a list of companies wi th interest expenses higher or lower than those
found by the KTC. We do not consider that th e KTC's exercise constituted the kind of evaluative
comparative analysis that could satisfy the special circumspection requirement set forth in paragraph 7
of Annex II.131
6.54 Korea further argues that "[t]here was no eviden ce indicating that the April Fine figures were
consistent with normal industry experience. As a result, even if the KTC had wanted to adopt the
April Fine figures as "facts available", there w ould have been no evidence to corroborate those

127 See, for instance, First Written Submission of Indonesia, para. 135.
128 Comments of Korea on Indonesia's Responses to Panel's Questions, para. 5.
130 (footnote omitted) Opening Statement of Korea, para. 49.
131 In this regard, we note the reasoning of the panel in Mexico – Anti-Dumping Measures on Rice ,
cited with approval by the Appellate Body. See, Appellate Body Report, Mexico – Definitive Anti-Dumping
Measures on Beef and Rice, Comp laint with Respect to Rice ("Mexico – Anti-Dumping Measures on Rice "),
WT/DS295/AB/R, adopted 20 December 2005, para. 289.

data".132 In response to questioning 133, Korea has not shown to the Pa nel where on the record this
reasoning by the KTC could be found. Instead, Kor ea stated that it "assume[d] that the [original]
Panel's finding was based, in large part, on the fact that the KTC had not explained whether April
Fine's zero interest expense was consis tent with general industry experience". 134 Korea has not,
however, shown to us what was the basis of this as sumption in our original panel report. We also
asked Korea whether its argument implied that with regard to elements of CMI's SG&A expenses
other than interest the KTC confirmed that the fi gures taken from April Fine's data were actually
consistent with the normal industry practice. 135 Korea has not provided a specific answer to this
question. We are therefore not convinced by these arguments.
6.55 Korea contends that "all of the corroborating information obtained by the KTC was consistent
with the interest expense ([BCI] per cent) that the KT C used as facts available for CMI. None of the
corroborating information was consistent with the a lternative interest expense (zero) that the Sinar
Mas Group proposed."136 As we explained above, the fact that the KTC showed that there were other
companies that had interest expenses similar to that of RAK does not in our view satisfy the
obligation to apply special circumspection in the use of information from a secondary source within
the meaning of paragraph 7 of Annex II of the Agr eement. This exercise wrongly assumes that the
interest expenses of the companies used for corro boration somehow represent the relevant standard
for the appropriateness of the interest expense to be used for CMI. We do not consider this type of
selective comparison to constitute special circumspec tion. As we have already mentioned, the KTC
could have collected data pertaining to some other companies which could show interest rates close to
that of April Fine. In our view, however, this would not change the arbitrary nature of the KTC's
corroboration. We note that the very text of the KTC's Re-determination confirms the arbitrary nature
of the exercise that lead the KTC to base CMI's interest expenses on RAK's data. The Re-
determination indicates, inter alia, that the KTC checked "whether there is any other company in non-
paper industry having incurred the level of fina ncial expenses that the Trade Committee applied "
(emphasis added) ( supra, para. 6.20). 137 This indicates that instead of verifying the information
obtained from RAK against independent sources, the KTC inquired whether there were other
companies that had interest rates similar to that of RAK. We have mentioned above that it was clear
from the outset that there would be other companies having interest expenses similar to those of RAK,
just as there would also be other companies, like April Fine, with zero interest expense. This
therefore constitutes an arbitrary analysis and do es not satisfy the special circumspection obligation
under paragraph 7 of Annex II.
6.56 Finally, we note Korea's assertion that had the KTC used the SG&A and profit figures
reported by the Sinar Mas Group for CMI instead of basing itself on facts available, this would have
yielded higher constructed normal values and higher margins of dumping for Indah Kiat and Pindo
Deli.138 More specifically, Korea submits that the amount for profits based on facts available was
lower than the profits reported by the Sinar Mas Gr oup itself. Korea therefore asks the Panel to allow
the KTC to use as facts available the profits figure reported by the Sinar Mas Group if the Panel finds

133 Question 7(a) from the Panel to Korea.
134 Response of Korea to Question 7 from the Panel.
135 Question 7(b) from the Panel to Korea.
136 Response of Korea to Question 7 from the Panel. See also Opening Statement of Korea, para. 50.
137 We note that the translation provided by Korea is not different from the one submitted by Indonesia
from which we quoted. The version of the KTC's Re-determination provided by Korea reads in this regard:
"The KTC obtained and analyzed the financial statements of Indonesian companies engaged
in industries other than the paper manufacturing, in order to verify the existence of company
of which financial statement shows the financial expenses similar to the level used by the
KTC" (emphasis added). Exhibit KOR-S-4, p. 27.
138 Second Written Submission of Korea, paras. 22-24; Opening Statement of Korea, paras. 43-45.
W T / D S 3 1 2 / R W

the interest expenses used by the KTC to be inconsistent with the Agreement. 139 We note that this is
ex post facto justification and we can not base our assessment on it. In addition, we do not consider
the issue before us to be the magnitude of the ma rgin of dumping calculated by the KTC. Rather, the
issue is whether the KTC complied with its obligatio n to exercise special circumspection in its use of
information from a secondary source. Thus, even if Korea's contention is correct we do not find it
relevant to the issue before us.
(c) Conclusion
6.57 The KTC made a finding on the issue of the sc ope of CMI's business, which was partly based
on the DIS report. We have found that the KTC's reliance on the DIS report and the manner in which
it addressed the Sinar Mas Group's concern over the accuracy of the information in the report,
indicated that the KTC's establishment of the fact s regarding its finding on the issue of the scope of
CMI's business was not proper. We have also found that the KTC's corroboration of RAK's interest
expense with some other companies' expenses did not constitute an adequate explanation as to why
the KTC used April Fine's data for CMI's SG&A e xpenses other than interest and RAK's data for its
interest expenses. We therefore conclude that in the implementation proceedings at issue the KTC
acted inconsistently with Article 6.8 of the Ag reement and paragraph 7 of Annex II by failing to
exercise special circumspection in the use of information from secondary sources.
6.58 We recall that Indonesia also claims that the interest expenses the KTC added for CMI to the
constructed normal values for Indah Kiat and Pindo Deli were not "reasonable" within the meaning of
Article 2.2 of the Agreement. In this regard Indone sia asserts violations of Articles 2.2, 2.2.2, 2.4
and 2.1 of the Agreement. We have found the KTC's determination regarding CMI's interest expenses
to be inconsistent with Article 6.8 of the Agreement and paragraph 7 of Annex II. We therefore do
not consider it necessary to address Indonesia's clai m that the same determination also violated
Articles 2.2, 2.2.2, 2.4 and 2.1of the Agreement.
C. ALLEGED VIOLATIONS OF ARTICLE 6 OF THE AGREEMENT
1. Alleged Partial Reopening of the Record Regarding the Issue of the Scope of CMI's
Business
(a) Arguments of the Parties
(i) Indonesia
6.59 Indonesia notes that in the implementation proceed ings at issue, the KTC revisited the issue
of whether CMI was merely a selling company that sold the subject product produced by Indah Kiat
and Pindo Deli and concluded that the exact scope of CMI's business was not clear on the basis of the
record. It therefore used the interest expenses of RAK as surrogate for CMI in the construction of the
normal values for Indah Kiat and Pindo Deli. Indonesia notes that on the basis of the record of the
original investigation at issue, it was undisputed that CMI was merely a selling company that sold in
the Indonesian market the subject product produced by Indah Kiat and Pindo Deli. Indonesia also
argues that in the original panel proceedings Korea made statements to this effect. In Indonesia's
view, the KTC should not have changed this und isputed factual finding in the implementation
proceedings at issue. Once it decided to do ot herwise, however, it had to follow the procedural
requirements of Article 6 as if this factual finding was made for the first time in the investigation.
Indonesia asserts that the KTC act ed inconsistently with certain obligations under Article 6 in
connection with its factual finding on the issue of the scope of CMI's business.

6.60 Indonesia argues that the KTC acted inconsistently with Article 6.1 of the Agreement by not
informing the Indonesian exporters of the inform ation it needed in making this finding and by
rejecting the information they submitted on this very issue. More specifica lly, Indonesia argues that
the KTC should have informed the Sinar Mas Group that it was re-opening the issue of the scope of
CMI's business and invited them to submit informa tion on this matter. According to Indonesia, for
the same reasons that it violated Article 6.1, th e KTC also violated Articles 6.2 and 6.4 of the
Agreement. Furthermore, Indonesia contends that the KTC acted inconsistently with its obligation
under Article 6.6 by declining to accept the in formation submitted by the Indonesian exporters
without verifying its accuracy and adequacy. Indonesia also submits that the KTC acted
inconsistently with Article 6.8 of the Agreement and paragraphs 3, 5, 6 and 7 of Annex II with respect
to the rejection of the information submitted by the Indonesian exporters in the implementation
proceedings at issue. Finally, Indonesia submits th at to the extent that the KTC rejected information
placed on the record of the original investigation regarding the scope of CMI's business, it also acted
inconsistently with Article 6.8 of the Agreement and paragraphs 3, 5 and 6 of Annex II.
(ii) Korea
6.61 Korea acknowledges that during the implementa tion proceedings at issue, the Sinar Mas
Group submitted to the KTC CMI's income statem ents and accompanying documents from CMI's
accounting system as well as the legal opinion of an Indonesian law firm indicating that under
Indonesian law CMI did not have to submit its fina ncial statements to public accountant for auditing
and another legal opinion to the effect that CMI did not have manufacturing activities. The Sinar Mas
Group also asked the KTC to carry out a verification visit in order to confirm that the information
submitted was accurate. Korea argues, however, that the issue of the scope of CMI's business was not
verified in the original investigation because of th e rejection of the KTC's request to verify CMI's
data. Korea also submits that the information su bmitted by the Sinar Mas Group was not relevant to
the implementation proceedings at issue and was not part of the record because inasmuch as the scope
of CMI's business was concerned the KTC's initial de termination had been upheld by the original
panel and was not being reconsidered. Yet the KT C analysed the legal opinion concerning the scope
of CMI's business and concluded that it was not reliable because it was premised on certain
assumptions. It follows that the Sinar Mas Group's assertion that CMI, like April Fine, was merely a
trading company had no basis. Korea nevert heless underlines the fact that the KTC's Re-
determination in the implementation proceedings at issue was not based on the assumption that CMI
was a manufacturing company. The KTC simply found that the exact scope of CMI's business had
not been determined.
(b) Arguments of Third Parties
(i) European Communities
6.62 The European Communities does not consider th at making a finding on a factual issue in the
implementation of the DSB recommendations and ru lings which differs from the finding made on the
same issue in the original proceedings would necessarily violate Article 6.8 and Annex II of the
Agreement provided that the investigating auth orities comply with the DSB recommendations and
rulings.
(ii) The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
6.63 TPKM argues that the issue of the use of facts available has to be judged on the basis of the
point of time at which facts available are used. In other words, if the information which was missing
at the time a specific determination was made by the investigating authorities subsequently-submitted
information should not be allowed to retroactiv ely invalidate the previous decision. The TPKM
submits that the KTC enjoyed an unfair advantag e over the Sinar Mas Group companies by declining
to admit the information that they submitted in the implementation proceedings at issue. According to
W T / D S 3 1 2 / R W

TPKM, either the KTC should have limited the factual basis of its Re-determination to the
information collected in the original investigation or it should have re-opened the record and allowed
the Sinar Mas Group to submit information that they deemed relevant to the KTC's Re-determination.
(c) Evaluation by the Panel
6.64 Above, we have addressed Indonesia's clai m regarding the KTC's calculation of CMI's
interest expenses. We note that Indonesia's claim under Article 6 concerns alleged procedural
inconsistencies in the process that lead to the KTC' s determination regarding CMI's interest expenses.
More specifically, this claim relates exclusively to the manner in which the KTC made its finding on
the issue of the scope of CMI's business. Above (paras. 6.30-6.44), we found, among others, that the
KTC's finding on the issue of the scope of CMI's business fell short of the special circumspection
requirement of paragraph 7 of A nnex II. We do not find it necessary for the resolution of the dispute
before us to make findings regarding the procedur al aspects of a finding that we have found to be
WTO-inconsistent on its substance. We therefore apply judicial economy with respect to this claim.
2. Alleged Violations of Article 6 in the KTC's Injury Re-determination
(a) Arguments of the Parties
(i) Indonesia
6.65 Indonesia asserts that the Sinar Mas Group asked the KTC to discl ose the factual basis of its
injury re-determination and to allow the Group to comment on such re-determination. The KTC
declined this request on the grounds that the injury re-determination was based on the data collected
during the original investigation. Indonesia argues that by declining the Indonesian exporters' request,
the KTC violated Articles 6.2, 6.4, 6.5 and 6.9 of the Agreement. 140 Indonesia argues that the KTC
should also have informed the Sinar Mas Group of its intention to base its injury re-determination
solely on the information gathered during the original investigation.
(ii) Korea
6.66 Korea notes that the KTC's revised injury determination was not based on any new
information. No additional data were collect ed during the implementation proceedings. Korea
therefore argues that because the parties were allo wed to comment on those data in the course of the
original investigation, the KTC was under no obliga tion to give them another opportunity to comment
after making its final determination in the implementation proceedings at issue.
(b) Arguments of Third Parties
(i) European Communities
6.67 The European Communities contends that the in vestigating authorities have to comply with
the requirements of Article 6.4 of the Agreement in the implementation proceedings carried out under
Article 21.5 of the DSU. The obligations set out under Article 6.4 would, in the European
Communities' view, apply to both new information collected in the implementation proceedings and
that which was already on the record of the orig inal proceedings. As far as the provisions of
Articles 6.1, 6.2 and 6.9 of the Agreement are c oncerned, the European Co mmunities considers that

140 Although Indonesia also cited Article 6.1 of the Agreement in its First Written Submission in
connection with this claim, it subsequently clarified that this was a typographical error and that it was not
pursuing a claim under Article 6.1 with regard to the KTC's injury re-determination. See, Response of
Indonesia to Question 19 from the Panel.

they apply in cases where the investigating aut horities collect new facts in the implementation
proceedings.
(ii) Japan
6.68 Without taking any position regarding the factua l aspects of Indonesia's claim, Japan argues
that in the implementation proceedings carried out under Article 21.5 of the DSU, the measure taken
to comply with the DSB recommendations and rulings is subject to the disciplines of the Agreement
in its entirety, irrespective of the specific viol ations found in the origin al panel proceedings.
According to Japan, Article 6 of the Agreement applies to the implementation proceedings under
Article 21.5 of the DSU in order to guarantee procedural fairness to all interested parties. It follows
that the KTC had to give inter ested parties full opportunity to defend their interests if the KTC
collected new information concerning its injury de termination in the implementation proceedings at
issue.
(iii) United States
6.69 The United States disagrees with Indonesia's assertion that the KTC was required to disclose
to the Sinar Mas Group the fact that it would base its injury re-determination solely on the information
collected in the original investigation. The United States argues that if it is factually correct that the
KTC based its injury re-determination solely on the information collected in the original investigation,
Article 6.4 did not impose any furt her obligations on the KTC in th e implementation proceedings at
issue. This is because, argues the United States, Article 6.4 applies to "information", not "the
authorities' reasoning". Likewise, the United States subm its that Article 6.9 applies to "essential facts
under consideration", as opposed to "the authorities' r easoning". It follows that to the extent that the
KTC fulfilled this obligation during the original investigation, it did not have to make another
disclosure under Article 6.9 in the implementation proceedings at issue.
(c) Evaluation by the Panel
6.70 We recall that in the original panel proceedi ngs, we found, among others, that the KTC failed
to adequately analyze the injury factors set out in Article 3.4 of the Agreement. More specifically, we
found that "the KTC did not adequately evaluate the injury factors, especially those that showed a
positive trend, and explain their relevance in the determination of material injury".
141 Indonesia does
not argue before this compliance Panel that the KTC's injury re-determination failed to implement this
aspect of our findings in the original panel pro ceedings. Indonesia conte nds, however, that while
making its injury re-determination the KTC acted inconsistently with some of its procedural
obligations under Article 6 of the Agreement. Kore a, in turn, submits that because the KTC's injury
re-determination was based solely on the informatio n collected during the original investigation and
the procedural obligations now cited by Indonesi a were then satisfied, the Panel should dismiss
Indonesia's claim.
6.71 We note that Indonesia does not dispute Korea's assertion that the KTC's injury re-
determination was based solely on the information co llected during the original investigation. It is
also factually undisputed that the Sinar Mas Gr oup specifically requested disclosure of the KTC's
injury re-determination and the right to make comments on it. 142 The KTC declined such request on
the grounds that the injury re-determination was based solely on the information obtained in the
original investigation. The KTC's Re-determination provides in relevant parts:

141 Report of the original panel, para. 7.273.
142 Sinar Mas Group's letter dated 6 June 2006 (Exhibit IDN-5, p.4).
W T / D S 3 1 2 / R W

"The previous resolution of the Trade Committee regarding anti-dumping
investigation on Fine Paper originating from Indonesia and China contains the
resolution of the Trade Committee and its grounds after deliberating any and all
issues and reviewing opinions of interest [s ic.] parties. In amending its previous
resolution in accordance with the Panel's decision, the Trade Committee re-analyzes
the facts based on materials secured during the previous investigation without
receiving any new materials from interested parties; the Office concludes that there is
nothing requiring the Trade Committee to obtain a new opinion from the interested
parties.
In addition, the resolution of the Trade Co mmittee is one final decision of the Trade
Committee after analyzing, reviewing and de liberating all materials collected by the
Trade Investigation office. Thus, recei ving new opinions of interested parties
regarding the resolution of the Trad e Committee does not seem reasonable and
consistent with the decision-making process of the Trade Committee.
Therefore, the Trade Investigation Office concluded that the request of Sinar Mas
Group to read the resolution of the Trade Committee beforehand and to have an
opportunity to suggest its opinion [sic.] improper procedurally."
143
6.72 The broad issue raised in connection with this claim is the extent to which the procedural
obligations set forth in various paragraphs of Ar ticle 6 apply in a situation where the authorities'
implementation of the DSB recommendations and rulings are solely based on the data collected in the
original investigation, i.e. where implementation is limited to a new analysis on the basis of the same
data. The legal reasoning that we provide belo w regarding the claims raised by Indonesia under
specific subparagraphs of Article 6, therefore, addresses the circumstanc es of the implementation
proceedings at issue where no new in formation has been added to the r ecord in addition to that which
had been collected during the original investigation.
6.73 Before addressing the specific claims raised by Indonesia, however, we find it useful to
address a horizontal issue raised by Indonesia rega rding the interrelation between the original
investigation and the implementation proceedings at issue. Indonesia asserts that the fact that the
Indonesian exporters were allowed to make co mments on the injury fact ors in the original
investigation does not deprive them of the same right "in the new proceeding". 144 According to
Indonesia, the finding in our original panel repor t rendered the KTC's original determination under
Article 3.4 "null and void", and the KTC could not therefore carry out its injury re-determination
without giving the Indonesian exporters an opportunity to comment.145
6.74 We disagree with Indonesia's characterization of the implementation proceedings at issue as
being a new proceeding. Indonesia has not cited any provision in the DSU or elsewhere in the WTO
Agreement that would support such a proposition. The proceedings carried out for the purpose of
complying with the DSB recommendations and rulings based on the WTO-inconsistencies found in an
anti-dumping investigation are not, in our view, new or independent from that original investigation.
Rather, as the Appellate Body opined in Mexico – Corn Syrup (Article 21.5 – US) , "[t]he original
determination and original pa nel proceedings, as well as the redetermination and the panel
proceedings under Article 21.5, form part of a continuum of events".
146 It follows that as a
compliance panel operating under Article 21.5 of th e DSU, we have to an alyze the procedural
inconsistencies alleged by Indonesia against the pr ocedural background consisting of the original

143 Exhibit IDN-11(b), p. 20.
144 Response of Indonesia to Question 20 from the Panel.
145 Response of Indonesia to Question 20 from the Panel.
146 Supra, footnote 91.

investigation as well as the implementation proceedings at issue. As a logical consequence of this
approach, when a procedural oblig ation set forth under Article 6 has been fulfilled in the original
investigation, we shall refrain from ruling that it had to be re-observed in the implementation
proceedings unless the steps taken by the KTC made it necessary. 147 Otherwise, we would have
imposed on the KTC procedural obligations that had no legal or logical connection with the
implementation of the DSB recommendations and rulings at issue. With that in mind, we now turn to
the specific obligations that Indonesia asserts to have been violated by the KTC in the implementation
proceedings at issue.
6.75 The first provision cited by Indonesia in this cont ext is Article 6.2. Indonesia argues that the
KTC acted inconsistently with the obligation set forth under Article 6.2 by failing to allow the
Indonesian exporters "any opportunity to comment on or participate in the injury re-determination". 148
Indonesia does not contend that the KTC should have disclosed its draft injury re-determination to the
Indonesian exporters for comment. Rather, Indonesi a's assertion is that the Indonesian exporters
should have been given an opportunity to comment on "how the Article 3.4 factors should properly be
analysed".149
6.76 Article 6.2 provides:
"Throughout the anti-dumping investigation all interested parties shall have a full
opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interest ed parties to meet those parties with
adverse interests, so that opposing view s may be presented and rebuttal arguments
offered. Provision of such opportunities must take account of the need to preserve
confidentiality and of the convenience to the parties. There shall be no obligation on
any party to attend a meeting, and failure to do so shall not be prejudicial to that
party's case. Interested parties shall also have the right, on justification, to present
other information orally."
Article 6.2, interpreted in conjunction with Ar ticle 6.1, requires the authorities to provide the
interested parties in anti-dumping proceedings with "liberal opportunities ... to defend their
interests."
150 To this end, Article 6.2 charges the aut horities with the obligation to organize meetings,
upon request, to allow interested parties to hear other parties' views. The interested parties' right to
defend their interests is not, however, unlimited in ti me. As mentioned in Article 6.14, the procedural
obligations provided for under Article 6 are not intended to preclude the authorities from completing
the proceedings in a timely manner.151

6.77 We note that in its letter dated 6 June 2006, the Sinar Mas Group made the following request:

147 We note Korea's proposition that although the provisions of Article 6 apply "in some manner" to the
implementation proceedings at issue, the Panel should base its assessment of whether the KTC complied with its
Article 6 obligations on the record of the original investigation and th at of the implementation proceedings
altogether. In other words, Korea argu es that as far as the fulfilment of the obligations set forth under Article 6
is concerned, the Panel should not vi ew the implementation proceedings as being distinct from the original
investigation. Response of Korea to Question 10 from the Panel. We note that Korea's proposition parallels our
reasoning regarding the relationship between the original investigation and the implementation proceedings at
issue.
148 First Written Submission of Indonesia, para. 172.
149 Response of Indonesia to Question 20 from the Panel.
150 Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country
Tubular Goods from Argentina ("US – Oil Country Tubular Goods Sunset Reviews") , WT/DS268/AB/R,
151 Ibid.
W T / D S 3 1 2 / R W

"EVALUATION OF INJURY FACTORS
13. The Sinar Mas Group looks forward to receiving the proposed determinations
regarding injury and assumes that it will be provided with an adequate opportunity to
defend its interests."152 (emphasis added)
6.78 The KTC's Re-determination reads in response:
"In amending its previous resolution in accordance with the Panel's decision, the
Trade Committee re-analyzes the facts based on materials secured during the previous
investigation without receiving any new materials from the interested parties; the
Office concludes that there is nothing re quiring the Trade Committee to obtain a new
opinion from interested parties.
In addition, the resolution of the Trade Co mmittee is one final decision of the Trade
Committee after analyzing, reviewing and de liberating all materials collected by the
Trade Investigation Office. Thus, recei ving new opinions of interested parties
regarding the resolution of the Trad e Committee does not seem reasonable and
consistent with the decision-making process of the Trade Committee.
Therefore, the Trade Investigation Office concluded that the request of Sinar Mas
Group to read the resolution of the Trade Committee beforehand and to have an
opportunity to suggest its opinion [sic.] improper procedurally."153 (emphasis added)
It is therefore factually clear that the Sinar M as Group asked the KTC for an opportunity to make
comments on the KTC's assessment of the impact of dumped imports on the domestic industry and its
request was not granted. The issue is whether not granting the Sinar Mas Group's request violated its
right to defend its interests as provided for under Article 6.2.

6.79 We note that Indonesia's claim under Article 6.2 differs from its claims under Articles 6.4 and
6.9, discussed below, in that it concerns the right to make comments, not disclosure of information. It
is undisputed that the KTC's injury re-determination was based solely on the information collected in
the original investigation. Korea argues that beca use the injury re-determi nation was based solely on
the information from the original investigation, th e KTC did not have to provide the Sinar Mas Group
with an additional opportunity to make comments on its injury analysis. Indonesia, on the other hand,
contends that because the implementation proceedin gs at issue constituted a "new proceeding" the
Sinar Mas Group was entitled to make comments on the evaluation of the Article 3.4 injury factors in
such proceedings. We recall our reasoning abov e (para. 6.74) that b ecause the implementation
proceedings at issue were the continuation of the or iginal investigation, the procedural obligations
imposed on the KTC relate to this combined process. It follows that a procedural obligation that had
been fulfilled in the original investigation had to be observed again in the implementation proceedings
only if the steps taken in such proceedings made it necessary. We therefore do not agree with
Indonesia's contention that the KTC had to give the Sinar Mas Group an additional opportunity to
comment on its injury re-determination simply b ecause the implementation proceedings constituted a
new proceeding. Nor do we agree with Korea's ass ertion that because the injury re-determination was
based on the information collected in the original investigation the Sinar Mas Group did not have the
right to make comments on the KTC's injury analysis in the implementation proceedings. We can not
assume that the same factual basis would in all cases lead to the same analysis regarding the impact of
dumped imports on the domestic industry under Article 3.4 of the Agreement. It was, in our view,
entirely possible, if not to be expected, that in the implementation proceedings at issue the KTC

152 Exhibit IDN-5, p. 4.
153 Exhibit IDN-11(b), p. 20.

would have engaged in an analysis that in some respects would differ. This new analysis, in turn,
could have lead to a different conclusion regard ing the impact of dumped imports on the domestic
industry under Article 3.4. The opposite proposition would suggest that notwithstanding our finding
of inconsistency under Article 3. 4 in the original panel proceedin gs the KTC would necessarily reach
the same conclusion regarding the impact of dump ed imports on the domestic industry, and would
imply that our finding was devoid of any potential impact on the implementation proceedings. This
can not be the case. We therefore consider that the KTC should have allowed the Sinar Mas Group to
comment on the evaluation of the injury factors under Article 3.4 of the Agreement.
6.80 We note that the right provided for under Article 6.2 to have full opportunity to defend one's
interests is not limited to make comments on the fact ual basis of the authorities' determinations. It
also entails the right to comment on how the data co llected by the authorities have to be assessed. As
we have noted above, Article 6.2, interpreted in conjunction with Article 6.1, gives the interested
parties in an anti-dumping investigation a broad right to defend their interests. We also recall that
these provisions do not provide for indefinite rights. Otherwise, it would have been impossible for the
authorities to complete investigations in a tim ely manner as mentioned in Article 6.14 of the
Agreement. We note that the injury re-determi nation at issue was made after the disclosure of
essential facts under Article 6.9 of the Agreement. We also note that Indonesia does not argue that
the Sinar Mas Group's right to defend its interests under Article 6.2 was denied in the original
investigation. Nonetheless, because it was a new determination – made in the context of the
combined process consisting of the original inves tigation and the implementation proceedings –, we
consider that the Sinar Mas Group was entitled to su bmit comments in order to defend its interests as
provided for in Article 6.2. We therefore find that the KTC acted inconsistently with Article 6.2 of
the Agreement in the implementation proceedings at issue.
6.81 Next, Indonesia submits that the KTC acted inconsistently with the obligation under
Article 6.4 of the Agreement by failing to inform the Sinar Mas Group of the information relevant to
the presentation of their case. More specifically, Indonesia argues that the KTC should have informed
the Sinar Mas Group of the fact that it would base its injury re-determination solely on the
information gathered in the original investigation. This, in Indonesia's view, constitutes relevant, non-
confidential information within the meaning of Article 6.4.
154
6.82 Article 6.4 provides:
"The authorities shall whenever pr acticable provide timely opportunities for all
interested parties to see all information that is relevant to the presentation of their
cases, that is not confidential as defined in paragraph 5, and that is used by the
authorities in an anti-dumping investigation, and to prepare presentations on the basis
of this information." (emphasis added)
Article 6.4 requires the authorities to give the interest ed parties the chance to see "information" that is
relevant to the presentation of their cases. Thus, th e principal characteristic of the obligation set forth
under Article 6.4 is that it concerns "information". We interpret the word "information" in Article 6.4
as referring to information before the inves tigating authorities in the relevant anti-dumping
proceeding. This may be information submitted by the interested parties or collected by the
investigating authorities themselves. In addition, Article 6.4 applies to a specific category of

154 First Written Submission of Indonesia, para. 173.
W T / D S 3 1 2 / R W

information: it has to be information relevant to th e presentation of the interested parties' cases, used
by the authorities and not confidential within the meaning of Article 6.5.155
6.83 We note that Indonesia does not argue that the KTC should have physically sent the same
injury data to the Sinar Mas Group. 156 The only issue that, according to Indonesia, should have been
notified is the fact that the KTC intended to b ase its injury re-determination solely on the data
collected in the original investigation. We fail to comprehend, however, how this constituted
"information used by the authorities" within the meaning of Article 6.4. What Indonesia refers to is
the KTC's intention regarding the implementation of the DSB recommendations and rulings relevant
to Article 3.4 of the Agreement. We simply can not agree with the proposition that this intention
constituted "information" within the meaning of Article 6.4.
6.84 To support its claim under Article 6.4, Indonesia cites the decision of the panel in US – Oil
Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) . Regarding the nature of the
obligation under Article 6.4, that panel held:
"We interpret Article 6.4 to require the i nvestigating authorities to allow interested
parties to see the information they use in their determinations irrespective of whether
that same information may have been used in a previous proceeding and may have
been made available to the same interest ed parties in connection with that past
proceeding. Article 6.4 requires the inves tigating authorities to allow the interested
parties to see the information relevant to the presentation of their cases with respect to
each proceeding in which the information is used by the authorities."
157
6.85 Based on this finding, Indonesia argues that "A rticle 6.4 applies to a redetermination
irrespective of whether the redetermination is based on the same information that was used in a
previous proceeding and made available to the same interested parties in connection with that past
proceeding".158 We note that the factual circumstances surrounding the US – Oil Country Tubular
Goods Sunset Reviews (Article 21.5 – Argentina) case were considerably different from those presented
in these proceedings. The original panel in that di spute had found certain aspects of the statutory and
regulatory provisions of the United States' law dealing with sunset reviews to be in contravention of
the obligations set forth in various provisions of the Anti-Dumping Agreement. It also had found
certain inconsistencies specific to the sunset review that was at issue in that dispute.
159 With a view to
implementing the DSB recommendations and rulings, the United States made certain amendments to
its sunset regulations. Following these amendmen ts, the United States Department of Commerce
("USDOC") initiated a new sunset review in order to comply with the DSB recommendations and
rulings specific to the sunset review at issue.
160 In the compliance proceedings under Article 21.5 of
the DSU, Argentina, the complainant, argued, among others, that the USDOC violated Article 6.4 of
the Agreement in the new sunset review by failin g to make available certain information to the

155 We find support for our proposition in the Appellate Body's decision in EC – Tube or Pipe Fittings.
Appellate Body Report , European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe
Fittings from Brazil ("EC – Tube or Pipe Fittings"), WT/DS219/AB/R, adopted 18 August 2003, para. 142.
156 Response of Indonesia to Question 21 from the Panel.
157 Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular
Goods from Argentina – Recourse to Article 21.5 of the DSU by Argentina ("US – Oil Country Tubular Goods
Sunset Reviews (Article 21.5 – Argentina)"), WT/DS268/RW, circulated to WTO Members 30 November 2006,
para. 7.128.
158 (emphasis in original) First Written Submission of Indonesia, para. 175.
159 Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular
Goods from Argentina – Recourse to Article 21.5 of the DSU by Argentina ("US – Oil Country Tubular Goods
Sunset Reviews (Article 21.5 – Argentina)"), WT/DS268/RW, circulated to WTO Members 30 November 2006,
para. 2.5.
160 Ibid., para. 2.6.

Argentine exporters. The information at issue had been disclosed to the Argentine exporters in the
previous sunset review. Hence, the United States argued that the USDOC did not have to disclose the
same information to the Argentine e xporters in the new sunset review. 161 In the above-quoted part of
its report, the compliance panel rejected this argument.
6.86 The implementation proceedings before us, however, supplemen ted the KTC's determination
in the original investigation certain aspects of whic h we found in the original panel proceedings to be
WTO-inconsistent. That is, these implementation pr oceedings were the continuation of the original
investigation, not a phase distinct from it. Furthermore, we note that in US – Oil Country Tubular
Goods Sunset Reviews (Article 21.5 – Argentina), there was no disagreement that the subject matter of
the claim constituted "information" within the meaning of Article 6.4. We therefore disagree with
Indonesia on the relevance to the case at hand of the above-quoted finding by the panel in US – Oil
Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina).
6.87 Furthermore, we note that Article 6.4 stipulates that the authorities have to provide timely
opportunities for the interested parties to see
 the information relevant to the presentation of their
cases. It does not, in our view, impose an independent disclosure obligation on the authorities. That
is, it does not require the authorities to disclose inform ation to the interested parties when there is no
request to that effect. It follows that even if Indonesia had shown to the Panel that its claim under
Article 6.4 concerned "information" within the mean ing of this provision, its contention that the KTC
failed to disclose this "information" would not amount to a violation of the obligation set forth in
Article 6.4.
6.88 On the basis of the foregoing, we find that Indonesia has failed to make a prima facie case
with regard to its claim under Article 6.4 of the Agreement.
6.89 Indonesia also argues that if the KTC considered the information that had to be disclosed
under Article 6.4 to be confidential and refrained from disclosing it to the Sinar Mas Group on the
basis of confidentiality, the KTC acted inconsisten tly with the obligation under Article 6.5 of the
Agreement to ask for "good cause" for the c onfidential treatment of such information.
162 Having
found that Indonesia has not proved the existence of "information" within the meaning of Article 6.4,
we also find that Indonesia has failed to make a prima facie case under Article 6.5.
6.90 Next, Indonesia asserts a violation of Article 6. 9 of the Agreement. Indonesia contends that
for the same reasons that it violated Article 6.4, the KTC also violated Article 6.9.163
6.91 Article 6.9 provides:
"The authorities shall, before a final dete rmination is made, inform all interested
parties of the essential facts under consideration which form the basis for the decision
whether to apply definitive measures. Such disclosure should take place in sufficient
time for the parties to defend their interests." (emphasis added)
We note that Article 6.9 provides for a one-time disclosure requirement that has to contain the
"essential facts" that are under consideration rega rding the authorities' decision whether to apply
definitive measures. We also note that just as Article 6.4 concerns "information", Article 6.9 concerns
"facts". In addition, this obligation only applies to "essential" facts that establish the basis of the
authorities' decision whether to apply definitive measures. The scope of application of Article 6.9 is

161 Ibid., para. 7.128.
162 First Written Submission of Indonesia, para. 177.
163 First Written Submission of Indonesia, para. 178.
W T / D S 3 1 2 / R W

therefore limited to "essential facts" that are u sed by the authorities in deciding whether to apply
definitive measures.164

6.92 Turning to Indonesia's arguments in support of its claim, we note that Indonesia argues that
the KTC should have disclosed under Article 6.9 th e fact that it intended to base its injury re-
determination solely on the informa tion from the original investigation. 165 Here too we disagree with
the view that the KTC's intention to base its injury re-determination solely on the data collected in the
original investigation cons tituted an "essential fact" within the meaning of Article 6.9. The scope of
the obligation under Article 6.9, in our view, excludes the reasoning of the authorities or their
intention as to how certain determ inations will be made. We therefore find that Indonesia has failed
to make a prima facie case with regard to its claim under Article 6.9 of the Agreement.
3. Alleged Acceptance by the KTC of New Information From the Korean Domestic
Industry
(a) Arguments of the Parties
(i) Indonesia
6.93 Indonesia argues that the KTC accepted information from the Korean domestic industry, and
possibly from other sources as well, and failed to make it available to the Indonesian exporters. The
KTC therefore acted inconsistently with its oblig ations under Articles 6.1.2, 6.2 and 6.4 of the
Agreement. Indonesia also contends that to the exte nt that this information was not disclosed to the
Indonesian exporters on the grounds of confidentiality, the KTC acted inconsistently with Article 6.5
of the Agreement by failing to confirm that ther e was good cause that justified confidential treatment
and to ask the sources of the mentioned informa tion to provide a non-confidential version of it for
disclosure purposes.
(ii) Korea
6.94 Korea rejects Indonesia's assertion that the KTC received information from the Korean
industry during the implementation proceedings at issue.
(b) Evaluation by the Panel
6.95 We note that the Parties' views diverge regarding the factual basis of this claim. Korea
disputes Indonesia's allegation that the KTC received new information from the Korean domestic
industry for its injury re-determination. We asked Indonesia to show as a matter of fact that the KTC

164 In this regard, we note the description by the panel in US – Oil Country Tubular Goods Sunset
Reviews (Article 21.5 – Argentina) of the obligation set forth in Article 6.9. See, Panel Report, United States –
Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina – Recourse to Article
21.5 of the DSU by Argentina ("US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina)") ,
WT/DS268/RW, circulated to WTO Members 30 November 2006, para. 7.148.
165 First Written Submission of Indonesia, para. 179. In the same paragraph of its First Written
Submission, while acknowledging that the KTC fulfilled its Article 6.9 disclosure obligation in the original
investigation, Indonesia argues that the KTC should have disclosed the same essential facts to the Sinar Mas
Group in the implementation proceedings at issue. We asked Indonesia for clarification regarding this
argument. Indonesia responded that it is not arguing that the KTC should have physically disclosed in the
implementation proceedings at issue the same essential facts under consideration already disclosed in the
underlying original investigation. Indonesia limited its arguments to the assertion that the KTC should have
disclosed to the Sinar Mas Group the fact that it would base its injury re-determination solely on the data
collected during the original investigation. See, Response of Indonesia to Question 22 from the Panel.

received information from the Korean industry in th e implementation proceedings at issue. Indonesia
responded:
"Indonesia notes that this claim ... relates to both the redetermination of dumping and
injury.
For the purposes of the Panel's decision, the primary factual basis for this claim is that
the KTC provided an opportunity to the Indonesian exporters to provide comments on
the KTC's dumping redetermination. It is, therefore, reasonable to assume
 that the
same opportunity was provided to the Korean interested parties and that they availed
of this opportunity. It is also reasonable to assume that some of the information
regarding the interest expenses of Korean companies referred to by the KTC in its
dumping redetermination was provided to the KTC by Korean industry sources.
Indonesia also relies on the fact that Korea has declined to provide Indonesia and the
Panel with any documents obtained from such s ources, or even an index of the record
of its investigation.
The Panel is entitled to conclude that in the circumstances, Indonesia has made a
prima facie case that the KTC received new su bmissions and evidence from the
Korean industry and has not acted consiste ntly with its obligations under Article 6
with respect to such submissions and evidence, for the reasons explained in
paragraphs 183-185 of Indonesia's first submission." 166 (italic emphasis in original,
underline emphasis added)
6.96 We note that Indonesia's claim is not premised on an adequate factual basis. Indonesia
mainly invites the Panel to find on the basis of certain presumptions that Indonesia made a prima facie
case. We recall that the principles of burden of proof applicable to these proceedings ( supra,
para.6.4) require Indonesia to provide proof of its factual assertion that the KTC received information
from the Korean industry in the implementation proceedings at issue. Indonesia has not done so.
6.97 Indonesia has invited the Panel to ask Korea to su bmit to the Panel the index of the record of
the implementation proceedings at issue. 167 We have declined this request for two reasons. First, we
have to assume that WTO Members engage in dispute settlement in good faith, as required under
Article 3.10 of the DSU. We see no reason to doubt Korea's good faith in its statement that the KTC
did not receive information from the Korean indus try in these implementation proceedings. Second,
we do not consider it appropriate to ask th e defendant to produce evidence to rebut a prima facie case
that the complaining party has not made.168 We therefore conclude that Indonesia has failed to make a
prima facie case with regard to its claim regarding the alleged acceptance by the KTC of new
information from the Korean industry in the implementation proceedings at issue.
VII. CONCLUSIONS AND RECOMMENDATION
7.1 On the basis of the above findings, we conclude that:

166 Response of Indonesia to Question 23 from the Panel.
167 Second Written Submission of Indonesia, para. 74.
168 In this regard, we find support in the following pronouncement by Appellate Body in Japan –
Agricultural Products II:
"Article 13 of the DSU and Article 11.2 of the SPS Agreement suggest that panels have a significant
investigative authority. However, this authority can not be used by a panel to rule in favour of a
complaining party which has not established a prima facie case of inconsistency based on specific
legal claims asserted by it." (emphasis in original).
Appellate Body Report, Japan – Measures Affecting Agricultural Products ("Japan – Agricultural
Products II "), WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 277, para. 129.
W T / D S 3 1 2 / R W

(a) The KTC acted inconsistently with Article 6.8 of the Agreement and
paragraph 7 of Annex II by failing to exercise special circumspection
in the use of information from sec ondary sources in its effort to base
its determination of CMI's interest expenses on the best information
available,
(b) The KTC acted inconsistently
 with its obligation under Article 6.2 of
the Agreement by declining to provide the Sinar Mas Group with an
opportunity to make comments on the evaluation of the injury factors
under Article 3.4,
(c) Indonesia has failed to make a prima facie case with regard to its
claims under Articles 6.4, 6.5 and 6.9 of the Agreement concerning
the alleged disclosure violations in connection with the KTC's injury
re-determination,
(d) Indonesia has failed to make a prima facie case with regard to its
claim on the alleged acceptance by the KTC of new information from
the Korean industry.
7.2 We have applied judicial economy with regard to:
(a) Indonesia's claim under Articles 2.2, 2.2.2, 2.4 and 2.1 of the
Agreement regarding the KTC's de termination of CMI's interest
expenses on the basis of best information available,
(b) Indonesia's claim under Articles 6.1, 6.2, 6.4, 6.6, 6.8 and Annex II
of the Agreement concerning the a lleged partial re-opening of the
record on the issue of the scope of CMI's business.
7.3 We recall Indonesia's assertion that because of th e alleged inconsistencies in the KTC's Re-
determination, Korea has also failed to respect its obligation under Article 1 of the Anti-Dumping
Agreement to ensure that an anti-dumping measure is applied only under the circumstances provided
for in Article VI of the GATT 1994 and pursuant to investigations initiated and conducted in
accordance with the provisions of the Anti-Dumping Ag reement. Given the dependent nature of this
claim, we need not, and do not, make any findings in this regard.
7.4 Since the original DSB recommendations and ru lings in 2005 remain operative, we make no
new recommendation.
7.5 Indonesia notes that -notwithstanding our stat ement in our original panel report on this
specific issue- in the calculation of CMI's financ ial expenses in the implementation proceedings at
issue, the KTC disregarded the differences betw een the scope of business of the company whose
information is missing and that of the company whose information is used represent the missing
information. This paved the way for the conti nuation of the anti-dumping duties based on margins
calculated through a WTO-inconsistent method. Indon esia therefore invites the Panel to suggest that
Korea implement its findings in these compliance pro ceedings, as pointed out in Indonesia's letter to
Korea dated 8 December 2005
169, by basing CMI's interest expenses on April Fine's data in which
case margins of dumping for Indah Ki at and Pindo Deli would become de minimis and termination of
the duties inevitable. Korea has not specifically responded to Indonesia's request for a suggestion
from the Panel for implementation.

169 Exhibit IDN-2.

7.6 We note that Article 19.1 of the DSU states that WTO panels may suggest ways through
which the Member concerned coul d implement their recommendations. 170 With regard to Indonesia's
request for a suggestion, however, we recall that our task is to assess whether the KTC's determination
was proper, not to make suggestions as to which in formation it should have used or it should use in
the implementation of the DSB recommendations and rulings following these compliance
proceedings. We therefore decline to make the suggestion proposed by Indonesia.

ANNEX A
REQUEST FOR THE ESTABLISHMENT
OF A PANEL

4 January 2007

 (07-0030)
 Original: English

Recourse to Article 21.5 of the DSU by Indonesia

Request for the Establishment of a Panel

 The following communication, dated 22 Decem ber 2006, from the delegation of Indonesia to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 21.5 of the DSU.

 On 28 November 2005, the Dispute Settle ment Body (the "DSB") adopted the
recommendations and rulings in (WT/DS312). At the meeting held on 20 December 2005, the Republic of Korea ("Korea")
informed the DSB that it intended to fully implemen t the recommendations and rulings of the DSB in
this matter within a reasonable period of time. Indonesia and Korea agreed under Article 21.3(b) of
the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU") that
Korea had until 28 July 2006 to implement those recommendations and rulings.

 On 27 July 2006, the Korean Trade Commissi on (the "KTC") publishe d its Implementation
Report (Public Notice No. 2006-105 of the Korean Ministry of Finance and Economy) (the
"Redetermination") in the Korean Gazette. The Redetermination leaves the underlying anti-dumping
measure and the rate of dumping duties unchanged. At the DSB meeting held on 1 September 2006,
Korea stated that by adopting the Redetermina tion it had fully complied with the recommendations
and rulings of the DSB. Indonesia did not agree.

 On 26 October 2006, Indonesia requested consu ltations with Korea under Article 21.5 of the
DSU and paragraph 1 of the Understanding between Korea and Indonesia of 17 August 2006
1
regarding the consistency of the Redetermination with Korea's ob ligations under the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "Anti-

1 This Understanding related to the "sequencing" of proceedings under DSU Articles 21.5 and 22 and
was circulated as document WT/DS312/7.

Dumping Agreement"). The request was circulated in document WT/DS312/8. Consultations were
held on 15 November 2006. These consultations failed to settle the dispute.

 Accordingly, Indonesia and Korea disagree as to the "existence or consistency with a covered
agreement of measures taken to comply with the recommendations and rulings" of the DSB. Pursuant
to Articles 6 and 21.5 of the DSU, Article 17.5 of the Anti-Dumping Agreement and paragraph 2 of
the Understanding between the Republic of Korea and the Republic of Indonesia of 17 August 2006,
Indonesia hereby requests the establishment of a pa nel to examine the measures described below.
Indonesia requests that this item be placed on the agenda of the next meeting of the DSB.

A. R
ESELLER SELLING EXPENSES
The Panel found that in calculating normal va lues based on constructed value for the
Indonesian exporters at issue, the KTC acted inc onsistently with the Anti-Dumping Agreement with
respect to its calculation of the amount of interest expenses to be included in the selling, general and
administrative expenses incurred by a related reselle r of the like product. In the Redetermination,
however, the KTC left unchanged the amount of inter est expenses it included in the reseller's selling
expenses in the original determination. Accordingl y, the Redetermination is inconsistent with the
provisions of the Anti-Dumping Agreement described below and fails to pr operly implement this
aspect of the DSB's recommendations and rulings for the following reasons:
(a) The KTC failed to properly calculate a "r easonable amount for administrative, selling
and general costs" to be included in the constructed value within the meaning of
Article 2.2 of the Anti-Dumping Agreemen t, and failed to rely on "actual data
pertaining to production and sales in the ordinary course of trade of the like product
by the exporter or producer under investigati on" within the meaning of Article 2.2.2,
in that, inter alia , it used expenses incurred by a production company, ignored
verified evidence that the reseller would not have incurred such interest expenses, and
imputed expenses that were unrelated to the production and sale of the like product.
By thus failing to properly determine the c onstructed value, the KTC also failed to
make a fair comparison between normal value and export price within the meaning of
Article 2.4 and failed to determine dumpi ng margins properly within the meaning of
Article 2.1.
(b) The KTC failed to comply with its obligation to utilise the "best information
available", failed to exercise "special circumspection" in its use of secondary sources
and failed to properly corroborate the secondary information used as facts available
as required by Article 6.8 of the Anti-Dumpi ng Agreement, read together with Annex
II, in particular paragraphs 3 and 7 thereof, in that, inter alia , it used the expenses
incurred by a production company, imprope rly ignored verified evidence regarding
the interest expenses incurred by a reseller affiliated to another producer, failed to
properly conduct a comparative assessment of or make a determination whether the
secondary information used could reasonably replace the missing information,
ignored verified evidence that the reselle r would not have incurred such interest
expenses in the resale of the like product, failed to provide an adequate explanation of
its determination and relie d on new, irrelevant, unr eliable and unverifiable
information regarding the reseller and regarding selling expenses incurred by
companies in other industries in Korea.
(c) The KTC failed to comply with its obligation to reach an unbiased, objective and
proper determination of dumping under Ar ticles 2.1, 2.2, and 2.4 of the Anti-
Dumping Agreement, as well as its obligations under Article 6.8 read together with
Annex II, in that, inter alia, it treated the reseller as a manufacturing company and in
arriving at this conclusion relied on faulty information and disregarded its previous

findings, verified evidence and the findings of the panel regarding the nature and
activities of the reseller.
(d) The KTC failed to comply with its obligations under Articles 2, 2.2, 2.2.2, 6.1, 6.2,
6.4, 6.6, 6.8, 17.6(i) and Annex II, in particular paragraphs 3 and 7 thereof, to make a
proper determination of norma l value and to provide the Indonesian exporters with
adequate opportunities to submit evidence a nd to defend their interests, in that, inter
alia, it excluded evidence supplied during the implementation process by the
Indonesian exporters while accepting on the record new evidence from other sources
and failed to take into account direct a nd verifiable evidence regarding the selling
expenses incurred by the reseller.
B. FAILURE TO COMPLY WITH PROCEDURAL OBLIGATIONS
 During the implementation phase, the KTC provided the Indonesian exporters with disclosure
regarding the manner in which it intended to impl ement the DSB's rulings with respect to the
determination of dumping. However, the KTC faile d to provide the Indonesian exporters with any
disclosure regarding the manner in which it intended to implement the DSB's rulings with respect to
the determination of injury or with any oppor tunity to comment on issues relating to the re-
determination of injury and the causal link between dumping and injury. In particular, the KTC did
not disclose to the Indonesian exporters the facts on which it based its injury re-determinations.
Accordingly, in the Redetermination:

(a) The KTC failed to comply with its obligations under Articles 6.1, 6.2, 6.4, 6.5 and 6.9
of the Anti-Dumping Agreement, in that it failed to disclose the factual basis for its
injury re-determinations and failed to pr ovide the Indonesian exporters with any
opportunity to provide their views.
 Moreover, the KTC appears to have accepte d confidential submissions from the Korean
domestic industry and other sources without re quiring a showing of good cause, the submission of
non-confidential summaries or an explanation as to why such summarization is not possible. In
addition, information contained in these submissi ons was not provided to the concerned Indonesian
exporters. Accordingly, in the Redetermination:

(b) The KTC failed to comply with its obligations under Articles 6.1, 6.2, 6.4 and 6.5 of
the Anti-Dumping Agreement, in that it failed to require a party submitting
confidential information to show good cause for confidential treatment or to submit a
non-confidential summary thereof or an e xplanation as to why such summarization
was not possible.
(c) The KTC acted inconsistently with Articl es 6.1, 6.2 and 6.4 of the Anti-Dumping
Agreement, in that it failed to provide c opies of the submissions made by the Korean
domestic industry to the Indonesian exporters.
 Indonesia continues to reserve its rights in respect of all other aspects of Korea's purported
compliance with its obligations in this case.

 Indonesia requests that the Panel be established w ith the standard terms of reference set out in
Article 7 of the DSU.