EUROPEAN UNION – ANTI-DUMPING MEASURES ON IMPORTS OF CERTAIN FATTY ALCOHOLS FROM INDONESIA REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 16 December 2016
Document codes: WT/DS442/R
Complainant: Indonesia
Respondent: EU
Third parties: India, South Korea, Turkey, U.S., Malaysia, Thailand
Dispute stage: Appellate Body
Agreements cited: Art. 2.3, 2.4, 5.8, 3.1, 3.4, 3.5, 9.4, 9.2  Anti-dumpingArt. X:3(a)  GATT 1994Art. 2.6, 4.1, 3.2, 3.3, 6.7, 6.9, 1, 18  Anti-dumpingArt. VI  GATT 1994

EUROPEAN UNION – ANTI-DUMPING MEASURES ON IMPORTS OF
CERTAIN FATTY ALCOHOLS FROM INDONESIA
REPORT OF THE PANEL

BCI deleted, as indicated [***]

LIST OF ANNEXES
ANNEX A
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A-1 Working procedures of the Panel A-2
Annex A-2 Additional working procedures concerning business confidential information A-7
ANNEX B
ARGUMENTS OF THE EUROPEAN UNION
Contents Page
Annex B-1 First integrated executive summary of the arguments of the European Union B-2
Annex B-2 Second integrated executive summary of the arguments of the European Union B-11
ANNEX C
ARGUMENTS OF INDONESIA
Contents Page
Annex C-1 First integrated executive summary of the arguments of Indonesia C-2
Annex C-2 Second integrated executive summary of the arguments of Indonesia C-17
ANNEX D
ARGUMENTS OF THIRD PARTIES
Contents Page
Annex D-1 Integrated executive summary of the arguments of Turkey D-2
Annex D-2 Integrated executive summary of the arguments of the United States D-5

CASES CITED IN THIS REPORT
Short title Full case title and citation
Argentina – Ceramic Tiles Panel Report, Argentina – Definitive Anti-Dumping Measures on Imports of
Ceramic Floor Tiles from Italy, , adopted 5 November 2001,
DSR 2001:XII, p. 6241
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of
Footwear, , adopted 12 January 2000, DSR 2000:I, p. 515
Argentina – Poultry
Anti-Dumping Duties
Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from
Brazil, , adopted 19 May 2003, DSR 2003:V, p. 1727
China – Broiler Products Panel Report, China  Anti-Dumping and Countervailing Duty Measures on
Broiler Products from the United States, and Add.1, adopted
25 September 2013, DSR 2013:IV, p. 1041
China – GOES Appellate Body Report, China – Countervailing and Anti-Dumping Duties on
Grain Oriented Flat-Rolled Electrical Steel from the United States,
WT/DS414/AB/R, adopted 16 November 2012, DSR 2012:XII, p. 6251
China – HP-SSST (Japan) /
China – HP-SSST (EU)
Panel Reports, China – Measures Imposing Anti-Dumping Duties on High-
Performance Stainless Steel Seamless Tubes ("HP-SSST") from Japan / China
– Measures Imposing Anti-Dumping Duties on High-Performance Stainless
Steel Seamless Tubes ("HP-SSST") from the European Union, WT/DS454/R
and Add.1 / WT/DS460/R, Add.1 and Corr.1, adopted 28 October 2015, as
modified by Appellate Body Reports WT/DS454/AB/R / WT/DS460/AB/R
China – X-Ray Equipment Panel Report, China – Definitive Anti-Dumping Duties on X-Ray Security
Inspection Equipment from the European Union, WT/DS425/R and Add.1,
adopted 24 April 2013, DSR 2013:III, p. 659
EC – Bananas III
(Article 21.5 – Ecuador II) /
EC – Bananas III
(Article 21.5 – US)
Appellate Body Reports, European Communities – Regime for the Importation,
Sale and Distribution of Bananas – Second Recourse to Article 21.5 of the DSU
by Ecuador, WT/DS27/AB/RW2/ECU, adopted 11 December 2008, and Corr.1
/ European Communities – Regime for the Importation, Sale and Distribution
of Bananas – Recourse to Article 21.5 of the DSU by the United States,
WT/DS27/AB/RW/USA and Corr.1, adopted 22 December 2008,
DSR 2008:XVIII, p. 7165
EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti-Dumping
Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R,
adopted 28 July 2011, DSR 2011:VII, p. 3995
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti-Dumping Measures on
Certain Iron or Steel Fasteners from China, WT/DS397/R and Corr.1, adopted
28 July 2011, as modified by Appellate Body Report WT/DS397/AB/R,
DSR 2011:VIII, p. 4289
EC – Fasteners (China)
(Article 21.5 – China)
Appellate Body Report, European Communities – Definitive Anti-Dumping
Measures on Certain Iron or Steel Fasteners from China – Recourse to
Article 21.5 of the DSU by China, WT/DS397/AB/RW and Add.1, adopted
12 February 2016
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, p. 135
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed
Salmon from Norway, WT/DS337/R, adopted 15 January 2008, and Corr.1,
DSR 2008:I, p. 3
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti-Dumping Duties on Malleable
Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/R, adopted
18 August 2003, as modified by Appellate Body Report WT/DS219/AB/R,
DSR 2003:VII, p. 2701
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from
Turkey, WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, p. 2667
EU – Biodiesel (Argentina) Panel Report, European Union – Anti-Dumping Measures on Biodiesel from
Argentina, WT/DS473/R and Add.1, circulated to WTO Members
29 March 2016
EU – Footwear (China) Panel Report, European Union – Anti-Dumping Measures on Certain Footwear
from China, WT/DS405/R, adopted 22 February 2012, DSR 2012:IX, p. 4585

Short title Full case title and citation
Japan – Alcoholic
Beverages II
Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996,
DSR 1996:I, p. 97
Korea – Certain Paper Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from
Indonesia, WT/DS312/R, adopted 28 November 2005, DSR 2005:XXII,
p. 10637
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes
and Sections of Iron or Non-Alloy Steel and H-Beams from Poland,
WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, p. 2701
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections
of Iron or Non-Alloy Steel and H-Beams from Poland, WT/DS122/R, adopted 5
April 2001, as modified by Appellate Body Report WT/DS122/AB/R,
DSR 2001:VII, p. 2741
US – Countervailing Duty
Investigation on DRAMS
Appellate Body Report, United States – Countervailing Duty Investigation on
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea,
WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, p. 8131
US – DRAMS Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access
Memory Semiconductors (DRAMS) of One Megabit or Above from Korea,
WT/DS99/R, adopted 19 March 1999, DSR 1999:II, p. 521
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain
Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted
23 August 2001, DSR 2001:X, p. 4697
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX,
p. 4051
US – Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Circular Welded Carbon Quality Line Pipe from Korea,
WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, p. 1403
US – Softwood Lumber V Appellate Body Report, United States – Final Dumping Determination on
Softwood Lumber from Canada, WT/DS264/AB/R, adopted 31 August 2004,
DSR 2004:V, p. 1875
US – Softwood Lumber V Panel Report, United States – Final Dumping Determination on Softwood
Lumber from Canada, WT/DS264/R, adopted 31 August 2004, as modified by
Appellate Body Report WT/DS264/AB/R, DSR 2004:V, p. 1937
US – Softwood Lumber VI
(Article 21.5 – Canada)
Appellate Body Report, United States – Investigation of the International
Trade Commission in Softwood Lumber from Canada – Recourse to
Article 21.5 of the DSU by Canada, WT/DS277/AB/RW, adopted 9 May 2006,
and Corr.1, DSR 2006:XI, p. 4865
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003,
DSR 2003:VII, p. 3117
US – Steel Safeguards Panel Reports, United States – Definitive Safeguard Measures on Imports of
Certain Steel Products, WT/DS248/R and Corr.1 / WT/DS249/R and Corr.1 /
WT/DS251/R and Corr.1 / WT/DS252/R and Corr.1 / WT/DS253/R and Corr.1
/ WT/DS254/R and Corr.1 / WT/DS258/R and Corr.1 / WT/DS259/R and
Corr.1, adopted 10 December 2003, as modified by Appellate Body Report
WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R,
DSR 2003:VIII, p. 3273
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven
Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997,
and Corr.1, DSR 1997:I, p. 323
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology
for Calculating Dumping Margins ("Zeroing"), WT/DS294/AB/R, adopted
9 May 2006, and Corr.1, DSR 2006:II, p. 417
US – Zeroing (EC) Panel Report, United States – Laws, Regulations and Methodology for
Calculating Dumping Margins ("Zeroing"), WT/DS294/R, adopted 9 May 2006,
as modified by Appellate Body Report WT/DS294/AB/R, DSR 2006:II, p. 521

EXHIBITS REFERRED TO IN THIS REPORT
Panel Exhibit Short Title
(if any)
Description
IDN-2 Email correspondence of 10 and 11 September 2013 between the
Secretariat and the parties
IDN-3 Preliminary
Determination
Commission Regulation (EU) No. 446/2011 of 10 May 2011 imposing a
provisional anti-dumping duty on imports of certain fatty alcohols and
their blends originatin g in India, Indonesia, and Malaysia, Official
Journal of the European Union, L Series, No. 122/47 (11 May 2011)
IDN-4 Final
Determination
Council Implementing Regulation ( EU) No. 1138/2011 of
8 November 2011 imposing a definitive anti -dumping duty and
collecting definitively the provisional duty imposed on imports of
certain fatty alcohols and their blends originating in India, Indonesia
and Malaysia, Official Journal of th e European Union, L Series,
No. 293/1 (11 November 2011)
IDN-5 Revised
Determination
Council Implementing Regulation (E U) No. 1241/2012 of
11 December 2012 amending I mplementing Regulation (EU)
No. 1138/2011 imposing a definitive anti -dumping duty and collecting
definitively the provisional duty imposed on imports of certain fatty
alcohols and their blends originating in India, Indonesia and Malaysia,
Official Journal of the European Union, L Series, No. 352/1
(21 December 2012)
IDN-18 Corporate Structure of the Musi m Mas Group, annex A -3.4. to
PT Musim Mas' questionnaire response (BCI)
IDN-19 List of PT Musim Mas' Sh areholders, annex A to
PT Musim Mas' questionnaire response (BCI)
IDN-21 Attachment D-1.1 to PT Musim Mas's questionnaire response (BCI)
IDN-22 Excerpt from PT Musim Mas' questionnaire response (BCI)
IDN-24 Sale and Purchase Agreement bet ween PT Musim Mas and ICOF -S
(1 January 2009) (BCI)
IDN-25 Sale and Purchase Agreement bet ween PT Musim Mas and ICOF -S
(1 January 2010) (BCI)
IDN-26 PT Musim Mas
presentation
PT Musim Mas, "Impact of the Interpipe judgement on the fatty
alcohol anti -dumping investigation (AD563), PTMM situation",
presentation at the hearing at DG Trade, 16 August 2012 (BCI)
IDN-27 PT Musim Mas Minutes Inspection Visit Medan, 25 November 2010
(BCI)
IDN-28 OECD, OECD Transfer Pricing Guidelines fo r Multinational Enterprises
and Tax Administrations (22 July 2010)
IDN-33 Annex 2 to the Provisional Company -Specific Disclosure to
PT Musim Mas, Calculation of Dumping Margin (BCI)
IDN-34 PT Musim Mas' Comments on the Pre liminary Determination,
10 June 2011 (BCI)
IDN-35 PT Musim Mas' comments on the complaint, 4 October 2010
IDN-37 Anti-Dumping Complaint by Cognis GmbH and Sasol Olefins and
Surfactants GmbH, 25 June 2010
IDN-38 Company-internal note concerning verification of ICOF-S (BCI)
IDN-39 General Disclosure Document, 26 August 2011
IDN-46 Summary of the meeting between PT Musim Mas and the European
Commission related to case AD563 Fatty alcohols before the EU
Hearing Officer, 4 October 2012 (BCI)
IDN-47 Verification Exhibit PTMM-18 (BCI)
IDN-49 Court of First Instance, Case T -249/06, Interpipe Niko Tube and
Interpipe NTRP v Council (2009) ECR II
IDN-54 Template of an Intercompany Limited Risk Distribution Agreement by
the law firm LCNlegal, available at <http://lcnlegal.com/templ ate-
intercompany-agreement-for-transfer-pricing-limited-risk-distribution-
agreement>, accessed 16 September 2016
IDN-55 ICOFS 2009 Financial Statements, attachment K1-5.2.1 to
PT Musim Mas's questionnaire response (BCI)
IDN-56 ICOFS 2008 Financial Stat ements, attachment K1-5.2.2 to
PT Musim Mas's questionnaire response (BCI)
IDN-58 Anti-Dumping Complaint before the European Commission against
imports of Fatty Alcohol originating in India, Indonesia and Malaysia,
submitted by Cognis GmbH, Sasol Olefins & Surfactants GmbH,
25 June 2010

Panel Exhibit Short Title
(if any)
Description
IDN-60 Sasol letter to the EU Commission, 28 January 2011
EU-3 Basic
Anti-Dumping
Regulation
Council Regulation No. 1225/2009 of 30 November 2009 on protection
against dumped imports from countries not members of the Eu ropean
Community, Official Journal of the European Community, L Series,
No. 343 (22 December 2009), p. 51
EU-4 General Court, Case T-26/12, PT Musim Mas v Council (25 June 2015)
EU-5 PT Musim Mas Business Organization Structure (BCI)
EU-6 PT Musim Mas, Organization Chart- Fatty Alcohol Division (BCI)
EU-10 Letter regarding disclosure of definitive findings, 2 August 2011 (BCI)
EU-11 Detailed breakdown of the calculation PTMM's export price (BCI)
EU-12 Excel file "PTMM definitive disclosure.xls" (BCI)
EU-14 List of exhibits provided to PTMM at the conclusion of the verification
visit (BCI)

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
Basic Anti-Dumping
Regulation
Council Regulation No. 1225/2009 of 30 November 2009 on protecti on against
dumped imports from countries not members of the European Community,
Official Journal of the European Community, L Series, No. 343
(22 December 2009), p. 51
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
Ecogreen P.T. Ecogreen Oleochemicals
EOS Ecogreen Oleochemicals Pte Ltd (Singapore)
FOH Fatty Alcohols
GATT 1994 General Agreement on Tariffs and Trade 1994
ICOF-S Inter-Continental Oils & Fats Pte. Ltd (Singapore)
P&L Profit and loss statement
PTMM PT Musim Mas
SEE Single economic entity
SG&A Selling, general and administrative costs
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155
UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization

1 INTRODUCTION
1.1 Complaint by Indonesia
1.1. On 27 July 2012, Indonesia requested consultations with the European Union pursuant to
Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
(DSU), Article 17.3 of the Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994 (Anti -Dumping Agreement) and Article XXIII:1 of the General Agreement
on Tariffs and Trade 1994 (the GATT 1994) with respect to anti -dumping measures imposed on
imports of certain fatty alcohols from Indonesia, as well as to certain aspects of the investigation
underlying those measures.1
1.2. Consultations were held on 13 September 2012 but failed to resolve this dispute.
1.2 Panel establishment and composition
1.3. On 1 May 2013, Indonesia requested the establishment of a panel pursuant to Article 6 of the
DSU with standard terms of reference. 2 At its meeting on 25 June 2013, the Dispute Settlement
Body (DSB) established a panel pursuant to the request of Indonesia in document WT/DS442/2, in
accordance with Article 6 of the DSU.3
1.4. The Panel's terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Indonesia in document
WT/DS442/2 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.4
1.5. On 8 December 2014 , Indonesia requested the Director -General to de termine the
composition of the P anel, pursuant to Article 8.7 of the DSU . On 18 December 2014, the
Director-General accordingly composed the Panel as follows:
Chairperson: Mr Paul O'Connor

Members: Mr Greg Tereposky
 Mr Mateo Diego Fernández

1.6. India, Korea, Ma laysia, Thailand, Turkey, and the United States notified their interest in
participating in the Panel proceedings as third parties.
1.3 Panel proceedings
1.3.1 General
1.7. After consultation with the parties, the Panel adopted its Working Procedures 5, Additional
Working Procedures Concerning Business Confidential Information (BCI), and timetable on
13 July 2015.
1.8. The Panel held a first substantive meeting with the parties on 25 and 26 November 2015. A
session with the third parties took place on 26 November 2015. The Pane l held a second
substantive meeting with the parties on 15 March 2016. On 20 May 2016, the Panel issued the
descriptive part of its Report to the parties. The Panel issued its Interim Report to the parties on
29 July 2016. The Panel issued its Final Report to the parties on 23 September 2016.

1 See EU – Fatty Alcohols (Indonesia), Indonesia's request for consultations, 1 August 2012,
WT/DS442/1 (Indonesia's request for consultations).
2 Request for the establishment of a panel by Indonesia, WT/DS442/2 (Indonesia's panel request).
3 See Minutes of meeting held in the Centre William Rappard on 25 June 2013, WT/DSB/M/333.
4 EU – Fatty Alcohols (Indonesia), constitution note of the Panel, WT/DS442/3, 19 December 2014.
5 See the Panel's Working Procedures in Annex A-1 and Additional Working Procedures Concerning
Business Confidential Information in Annex A-2.

1.3.2 Request for a preliminary ruling
1.9. On 8 January 2015, the European Union requested the Panel to issue a preliminary ruling
that its authority to rule had lapsed, pursuant to Article 12.12 of the DSU. Indonesia provided a
written response to the request for a preliminary ruling on 30 June 2015, in which it requested the
Panel to reject the procedural objection made by the European Union. The United States also
commented on the European Union's request in its third-party submission.
1.10. Following its review of the claims and arguments raised by the parties and third parties, the
Panel ruled on 23 November 2015, that its authority had not lapsed pursuant to Article 12.12 of
the DSU. The Panel indicated that the preliminary ruling and the reasoning of the Panel would form
an integral part of the Panel's final report.
1.11. The Panel addresses the European Union's request for a preliminary ruling in its findings
below.
2 FACTUAL ASPECTS
2.1 The measures at issue
2.1. This dispute concerns anti -dumping measures imposed by the European Union pursuant to
Council Implementing Regulation (EU) No. 1138/2011 of 8 November 2011 imposing a definitive
anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain
fatty alcoh ols and their blends originating in India, Indonesia, and Malaysia. The
previously-applicable provisional measure challenged by Indonesia had been imposed pursuant to
Commission Regulation (EU) No. 446/2011 of 10 May 2011 imposing a provisional anti -dumping
duty on imports of certain fatty alcohols and their blends originating in India, Indonesia, and
Malaysia.
2.2. On 11 December 2012, the European Union adopted Council Implementing Regulation (EU)
No. 1241/2012 amending Implementing Regulation (EU) No. 1138/2011, which reduced to zero
the anti-dumping duty applicable to one of the inves tigated Indonesian exporters ( P.T. Ecogreen
Oleochemicals ( Ecogreen)), modified the duty applicable to all other exporting producers in
Indonesia and confirmed the duty applicab le to the other inv estigated exporting producer
(PT Musim Mas).
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. Indonesia requests that the Panel find that the anti-dumping measures imposed by the
European Union on imports of certain fatty alcohols from Indonesia are inconsistent with the
European Union's obligations under:
a. Articles 2.3 and 2.4 of the Anti -Dumping Agreement because the European Union made
an improper adjustment to the export price of an Indonesian producer for a factor that
did not affect price comparability;
b. Articles 3.1 and 3.5 of the Anti -Dumping Agreement because the European Union failed
to conduct a proper non -attribution analysis with respect to the factors
"financial/economic crisis" and "issues related to the European Union's do mestic
industry's access to raw materials"; and
c. Article 6.7 of the Anti-Dumping Agreement because the European Union failed to disclose
to either of the investigated Indonesian producers the results of the verification visits.
3.2. The European Union requests t hat the Panel reject Indonesia's claims in this dispute in their
entirety.

4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their executive summaries, provided to the
Panel in accordance with paragraph 19 of the Working Procedures ado pted by the Panel (see
Annexes B-1 and B-2, and C-1 and C-2).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Turkey and the United States are reflected in their executive summaries,
provided in accordance with paragraph 20 of the Working Procedures adopte d by the Panel (see
Annexes D -1 and D -2). India, Korea, Malaysia, and Thailand did not submit written or oral
arguments to the Panel.
6 INTERIM REVIEW
6.1 Introduction
6.1. On 29 July 2016, the Panel submitted its Interim Report to the parties. On 4 August 2016,
Indonesia requested an extension for the submission of written requests for the review of precise
aspects of the Interim Report, which the Panel granted. Accordingly, on 16 August 2016, Indonesia
and the European Union submitted their written requests for revi ew. On 23 August 2016, both
parties submitted comments on the other party's requests for review. Neither party requested an
interim review meeting.
6.2. In accordance with Article 15.3 of the DSU, this section of the Report sets out the Panel's
response to the parties' requests made at the interim review stage. We modified certain aspects of
the Report in light of the parties' comments where we considered it appropriate, as explained
below. In addition, the Panel has made a number of changes of an editorial nature to improve the
clarity and accuracy of the Report or to correct typographical and other non -substantive errors,
certain of which were suggested by the parties.
6.3. As a result of the changes that we have made, the numbering of footnotes in the Final Report
has changed from the Interim Report. References to footnotes and paragraph numbers in this
section relate to the Interim Report.
6.2 The purpose and scope of the interim review
6.4. Before addressing the parties' individual requests for review of our Interim Report , we note
that a significant number of Indonesia's comments are of a general nature and address entire
sections, rather than precise aspects, of the Interim Report. We also note that many of Indonesia's
comments concerning paragraphs of the Interim Report contain requests for the insertion into the
Report of lengthy recitations of the arguments and evidence submitted by Indonesia in the course
of the proceedings.6 The European Union contends in its comments that Indonesia's interim review
comments go "beyond the proper scope of interim review" and "constitute an attempt to re -argue
the case".7
6.5. Article 15.2 of the DSU, and paragraph 22 of the Panel's Working Procedures, provide parties
with an opportunity to request the Panel "to review precise aspects of the Interim Report".
Previous panels have declined to expand the scope of interim review beyond that provided for in
Article 15.2 and have accordingly circumscribed their review to address only those comments that
relate to "precise aspects" of the Interim Re port. Previous panels have also noted that it is not
appropriate to re -open, at the interim review stage, arguments already put before a panel. In
keeping with our understanding of Article 15.2 of the DSU and consistent with the approach
adopted by previous panels, we will review our Interim Report only in light of the comments made
by the parties which relate to "precise aspects" of the Interim Report.

6 See for example Indonesia's request for review of the Interim Report, paras. 7.39, 7.99-7.104, 7.141,
7.150, 7.153, 7.166, and 7.180 and under fn 246.
7 European Union's comments on Indonesia's request for review of the Interim Report, p. 1.

6.6. Regarding Indonesia's comments asking us to insert into the Report lengthy recitations of its
arguments and evidence, we note that the Appellate Body has explained that panels need not refer
explicitly to every argument made, or each piece of evidence adduced, by the parties. We thus
have the discretion to address explicitly in our reasoning only the argumen ts and evidence we
deem necessary to resolve a particular claim and support the reasoning we are required to
provide.
6.7. Finally, we observe that Indonesia requests the Panel to identify precise passages of the
published determinations dealing with specific arguments made by the interested parties during
the underlying investigation or dealing with specific evidence relied upon by the Panel in its
evaluation of the EU authorities' determination.8 In its comments, the European Union notes in this
respect that "it does not follow from the fact that particular record evidence is not expressly
mentioned in the measure that it was not considered by the investigating authority. Nor does this
preclude such evidence from being referenced in panel proceedings". The Eur opean Union also
considers that, "in this case, the Panel has not exceeded these parameters".9
6.8. We refer to paragraph 7.8 of the Interim Report, where we recalled that:
A panel must limit its examination to the evidence that was before the authority
during the course of the investigation and must take into account all such evidence
submitted by the parties to the dispute. A panel's examination in that regard is not
necessarily limited to the pieces of evidence expressly relied upon by an investigating
authority in its establishment and evaluation of the facts in arriving at a particular
conclusion. Rather, a panel may also take into consideration other pieces of evidence
that were on the record and that are connected to the explanation provided by the
investigating authority in its determination. This flows from the principle that
investigating authorities are not required to cite or discuss every piece of supporting
record evidence for each fact in the final determination. That notwithstanding, since a
panel's review is not de novo, ex post rationalizations unconnected to the
investigating authority's explanation – even when founded on record evidence –
cannot form the basis of a panel's conclusion.10
We consider that we have strictly followed this standard of review in our Report.

6.9. With these preliminary remarks, we now turn to the substance of the parties' requests for
review.
6.3 Requests for review submitted by the parties pertaining to Indonesia's claims under
Articles 2.3 and 2.4 of the Anti-Dumping Agreement
6.3.1 Requests for review submitted by Indonesia
Paragraph 7.38

6.10. Indonesia asks the Panel to reflect more clearly in this paragraph its claim that "a violation
of Article 2.4 has occurred because any adjustment was made, rather than because the amount of
the adjustment was improper".11
6.11. The European Union deems the proposed change unnecessary, as it considers that it was
clear from the exchange of arguments in the Panel proceedings that Indonesia challenged the
adjustment in principle and did not take issue with the calculation of the amount.12

8 See for example Indonesia's request for review of the Interim Report, paras. 7.84 and 7.85 and
fn 156.
9 European Union's comments on Indonesia's request for review of the Interim Report, pp. 1 and 2.
10 Emphasis original, fns omitted.
11 Indonesia's request for review of the Interim Report, para. 2.4.
12 European Union's comments on Indonesia's request for review of the Interim Report, p. 2.

6.12. We have decided not to grant Indonesia's request because we consider that Indonesia's
position on this issue was clarified through a question posed by the Panel 13 and that Indonesia's
response is adequately reflected in paragraph 7.38 of the Interim Report.
Paragraph 7.39

6.13. Indonesia requests the Panel to review its description of Indonesia's main arguments in
paragraphs 7.36 to 7.40 of the Interim Report and in particular to revise paragraph 7.39 "to reflect
Indonesia's arguments correctly".14
6.14. The European Union deems the proposed changes unnecessary as "Indonesia's argument of
principle that intra -group commissions never justify adjustment was clear and adequately
summarised by the Panel, before being clearly and correctly r ejected by the Panel, for the reasons
set out in the report".15
6.15. We consider that this paragraph, as well paragraphs 7.40 to 7.43, 7.103 to 7.107, 7.116 ,
and 7.126 of the Interim Report as originally drafted reflect Indonesia's arguments adequately.
Nonetheless, we have granted Indonesia's request in part, by modifying our description of
Indonesia's arguments in those instances where the amendments proposed by Indonesia reflected
more accurately its submissions before the Panel.
Footnote 90

6.16. Indonesia reques ts the Panel to review its description o f the comments made by
PT Musim Mas during the underlying investigation in relation to the calculation of the normal
value.16
6.17. The European Union deems the proposed change unnecessary, as "the report adequately
summarises the arguments made during the administrative proceedings for the purposes of the
findings made in the report."17
6.18. We have decided to grant Indonesia's request by clarifyi ng in footnote 90 that
PT Musim Mas' primary claim was that no adjustment to the ex port price should be made but that,
if the Commission maintained the adjustment, then at least an identical adjustment should be
made to the normal value.
Paragraph 7.65

6.19. Indonesia requests the Panel to "complete" the description of the exchange during the
on-the-spot verification between the EU authorities and PT Musim Mas.18
6.20. The European Union "strongly contest [s]" the proposed changes as well as Indonesia's
version of the events that took place during the verification visits.19
6.21. We note that the purpose o f paragraph 7.65 of the Interim Report is not to provide an
exhaustive description of the discussion which took place between the companies and the
EU authorities during the verification visits. Rather, the purpose of this paragraph is to set out the
basis for the determination made by the EU authorities at the provisional stage of the
investigation. In our view, at that stage of the investigation, the EU authorities relied primarily on
the provisions of the Sale and Purchase Agreement between PT Musim Mas and Inter-Continental

13 See Indonesia's response to Panel question No. 38, para. 1.108. The Panel asked Indonesia if it
agreed with the statement made by the European Union that "in the present case the difference in view is not
about the amount of the adjustment, but rather about the fact that any adjustment was made". Indonesia
responded "[i]n effect, yes".
14 Indonesia's request for review of the Interim Report, para. 2.5.
15 European Union's comments on Indonesia's request for review of the Interim Report, p. 2.
16 Indonesia's request for review of the Interim Report, paras. 2.6-2.11.
17 European Union's comments on Indonesia's request for review of the Interim Report, p. 2.
18 Indonesia's request for review of the Interim Report, para. 2.12.
19 European Union's comments on Indonesia's request for review of the Interim Report, p. 2.

Oils & Fats Pte. Ltd (Singapore) (ICOF-S) and, as shown by the minutes of the verification visit,
they were not convinced that an identical adjustment was warranted on the normal value. We
have nevertheless decided to amend paragraph 7.65 to reflect our understanding more
specifically.
Paragraph 7.77

6.22. Indonesia criticizes the Panel's reference to transfer prices being "not only" significant for
tax payers and tax administrations, "but also" as the prices at which an enterprise transfer s
physical goods and intangible property. Indonesia also considers that the Panel "leaves entirely
unaddressed the very core of Indonesia's argument – that the 'payment' (whether at an arm's
length price or not) is not an expense for one part of the SEE [single economic entity] because it
may also be, at the same time, revenue, including profit, for the other part of the SEE."20
6.23. The European Union objects to the proposed changes.21
6.24. Since the description of the significance of transfer prices is quoted from an exhibit provided
by Indonesia itself (Exhibit IDN -28, p. 19), we have decided not to grant Indonesia's request to
amend this paragraph.
6.25. In any event, we note that what Indonesia describes in its request as the "very core of [its]
argument" is addressed in detail at paragraphs 7.103 to 7.107 of the Interim Report.
Paragraph 7.82

6.26. Indonesia requests the Panel to review its findings in relation to exhibits IDN -55 and 56 and
in particular its finding that these exhibits do not record any expense incurred by ICOF-S for work
undertaken in connection with domestic sales.22
6.27. The European Union asks the Panel to reject this request.23
6.28. The parties were given an opportunity (in the context of Panel question 35) to comment on
the relevance of ICOF -S annual reports for assessing the nature of the mark -up as an expense or
as a mere transfer of funds between related entities. Indonesia did provide extensive arguments
on this issue in paragraphs 1.65 to 1.68 of its response to questio n 35 and again under
paragraphs 1.84 to 1.91.
6.29. Nevertheless, we agree with Indonesia that the final three sentences of paragraph 7. 82 are
not necessary for the Panel to reach a conclusion on the European Union's determination that
PT Musim Mas possessed its own sales and marketing capacity . As such, we have decided to grant
Indonesia's request and have modified paragraph 7.82 accordingly.
Paragraph 7.83

6.30. Indonesia asks the Panel to insert a sentence into paragraph 7.83 (or attach a footnote
thereto) to clarify that Indonesia has never argued that the Sale and Purchase Agreement between
PT Musim Mas and ICOFS was intended to cover anything other than export sales. Indonesia also
asks the Panel to note that Indonesia's argument as to whether an adjustment may be made for
intra-corporate transfers between PT Musim Mas and ICOFS did not depend on whether ICOFS was
involved in domestic sales.24
6.31. We have decided to grant Indonesia's request by inserting a footnote to this paragraph
indicating that "Indonesia does not argue before the Panel that the Sale and Purchase Agreement
between PT Musim Mas and ICOF-S is intended to cover anything other than export sales."

20 Indonesia's request for review of the Interim Report, para. 2.15.
21 European Union's comments on Indonesia's request for review of the Interim Report, p. 2.
22 Indonesia's request for review of the Interim Report, paras. 2.16-2.18.
23 European Union's comments on Indonesia's request for review of the Interim Report, p. 2.
24 Indonesia's request for review of the Interim Report, para. 2.19.

6.32. However, contrary to what Indonesia argues in its request for review, we see nothing in
paragraph 4.183 of Indonesia's first written submission indicating that Indonesia's arguments with
respect to the mark-up were the same regardless of the extent of ICOF-S' involvement in domestic
sales. On the contrary, we consider that Indonesia argued that expenses incurred for domestic
sales may be relevant for assessing whether an adjustment should be made on the export price:
this is apparent from Indonesia's response to Panel questions 31 (para graphs 1.12 and 1.13)
and 38 (paragraph 1.108 (iii)).25 This is also apparent in the last sentence of Indonesia's response
to question 6 of the Panel (paragraph 1.32) .26 We have thus decided not to grant Indonesia's
request on this point.
6.33. Finally Indonesia asks the Panel to clarify where it addressed its arguments and evidence
(contained in Exhibits IDN -52, IDN -53, and IDN -54) in relation to the content of the Sale and
Purchase Agreement between ICOF-S and PT Musim Mas.27
6.34. The European Union considers that the Panel's assessment of the content of the Sale and
Purchase Agreement is correct and thus asks the Panel to reject the proposed changes.28
6.35. We do not see how Exhibits 52, 53 , and 54, which contain general documentation on
inter-company agreements (including loan agreements which are irrelevant to the present case),
contradict or complete the provisions of the Sale an d Purchase Agreement and in particular the
fact that it "constitutes the entire agreement and understanding between the Parties in respect of
its subject matter", or that ICOF -S might be otherwise involved in domestic sales. In addition, we
note that Exhib it 54, which is a template for " Limited Risk Distribution Agreement" contains the
following disclaimer:
This template is written in general terms and its application to specific situations will
depend on the particular circumstances involved. While it aim s to set out terms which
may commonly be used for intra group transactions, it does not purport to address
every issue which parties could or should raise. What is appropriate in any particular
case will depend on a variety of factors, including the functi onal analysis, the
ownership of assets, the intended allocation of risk, the ability of the contracting
parties to bear those risks, and any other contractual terms which form part of the
chain of supply both internally and externally.29
Exhibit 53 contains a similar disclaimer.
6.36. We also note that the Interim Report addresses in detail, at paragraphs 7.77 and 7.103 to
7.106 why we found that the existence of transfer prices does not exclude the characterization of a
payment as an expense rather than as a mere allocation of funds between two related entities. We
have therefore decided not to grant the other aspects of Indonesia's request under this paragraph.
Paragraph 7.84

6.37. Indonesia requests the Panel to refer to precise passages in the published determinat ions
indicating that the EU authorities relied on the exporter's profit and loss statements ( P&L) to
conclude that PT Musim Mas possessed its own sales and marketing capacity for the product under

25 "(iii) to the extent that the adjustment was intended to reflect the seller's SG&A on export sales, no
deduction should have been made because … (b) the Commission included SG&A in the ex-factory normal
value in this case".
26 "[h]owever, since the EU's adjustment for the alleged commission is structured as being composed of
indirect selling expense (SG&A) and profit components, it is important to note that, as explained in the
responses to Questions 9 and 14, the Commission did not deduct either indirect selling expenses (SG&A) or
profits from the normal value. To the contrary, the Commission included both SG&A and profit in the normal
value when it used a constructed normal value". (emphasis original)
27 Indonesia's request for review of the Interim Report, para. 2.21.
28 European Union's comments on Indonesia's request for review of the Interim Report, p. 2.
29 Template of an Intercompany Limited Risk Distribution Agreement by the law firm LCNlegal, available
at <http://lcnlegal.com/template-intercompany-agreement-for-transfer-pricing-limited-risk-distribution-
agreement>, accessed 16 September 2016, (Exhibit IDN-54), p. 1.

investigation and that PT Musim Mas incurred [***] costs for selling and marketing expenses for
both its direct sales to domestic customers and for its sales to ICOF-S.30
6.38. The European Union considers that the measure at issue does not need to refer expressly to
all relevant evidence and arguments.31
6.39. At paragraph 7 .84 of the Interim Report we noted that the EU authorities had sufficient
evidence in the investigation record to conclude that PT Musim Mas possessed its own sales and
marketing capacity. The evidence cited by the EU authorities in their determinations re fers to the
level of direct sales (domestic sales and export sales) performed by PT Musim Mas. 32 We tested
this determination against other evidence on the record, including the questionnaire response of
the company, in which PT Musim Mas reported [***] amount of selling and marketing expenses
for domestic sales and for export sales made via ICOF-S.
6.40. We do not consider that we are required to, or should, limit our evaluation of the
determination reached by the investigating authority to the content of the pu blished
determination. We refer once more to paragraph 7.8 of the Interim Report which recalls that:
A panel's examination in that regard is not necessarily limited to the pieces of
evidence expressly relied upon by an investigating authority in its estab lishment and
evaluation of the facts in arriving at a particular conclusion. Rather, a panel may also
take into consideration other pieces of evidence that were on the record and that are
connected to the explanation provided by the investigating authority in its
determination. This flows from the principle that investigating authorities are not
required to cite or discuss every piece of supporting record evidence for each fact in
the final determination.33
6.41. On this basis we consider it was permissible and a ppropriate to assess the determinations
reached by the EU authorities against the entire set of facts on the investigation record. This is
especially the case when the relevant facts were provided by the exporter in its questionnaire
response. We have thus decided not to grant Indonesia's request on this point. We nevertheless
decided to add a reference to the Final Determination in footnote 155.
6.42. Indonesia also requests the Panel to "reconcile" its statement in paragraph 7.84 of the
Interim Report that "the 'ICOF Margin' in the Sale and Purchase Agreement between PT Musim Mas
and ICOF -S could reasonably be understood to reflect an additional cost , for which there is no
equivalent on the domestic side", with the parties' agreement that the issue before the P anel does
not involve a "level of trade" adjustment.34
6.43. The European Union considers that the fact that the trader's commission reflected the
additional costs of doing business in the export market is a point about the facts while the
observation that there was no level of trade issue is a point about the Panel's terms of reference;
so there is no need for a reconciliation.35
6.44. Despite Indonesia's response to Panel question 1 (paragraph 1.13) that "the key issue
before the Panel is whether the EU correctly adju sted for a factor that 'affect[ed] price
comparability' within the meaning of Article 2.4 and conducted a 'fair comparison ' at the same

30 Indonesia's request for review of the Interim Report, para. 2.22.
31 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
32 Council Implementing Regulation (EU) No. 1138/2011 of 8 November 2011 imposing a definitive
anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain fatty alcohols
and their blends originating in India, Indonesia, and Malaysia, Official Journal of the European Union, L Series,
No. 293/1 (11 November 2011) (Final Determination), (Exhibit IDN-4), recitals 31 and 35; and Council
Implementing Regulation (EU) No. 1241/2012 of 11 December 2012 amending Implementing Regulation (EU)
No. 1138/2011 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed
on imports of certain fatty alcohols and their blends originating in India, Indonesia, and Malaysia, Official
Journal of the European Union, L Series, No. 352/1 (21 December 2012) (Revised Determination),
(Exhibit IDN-5), recitals 24 and 27.
33 Emphasis original, fns omitted.
34 Indonesia's request for review of the Interim Report, para. 2.23.
35 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.

level of trade", we refrained – at the request of the parties – from making any finding regarding
the level of trade of the comparison between the export price and the normal value. Footnote 223
of the Interim Report also indicates that the claim for a level of trade adjustment made by
PT Musim Mas during the underlying investigation was "different from the argument made be fore
the Panel by Indonesia in the present proceedings". The scope of Indonesia's claim under
Article 2.4 of the Anti-Dumping Agreement is therefore clear to us and is described precisely in the
Interim Report. In addition, we consider that our findings un der this paragraph are relevant to
deciding whether or not the mark -up could be lawfully treated as a difference affecting price
comparability. We have thus decided not to grant Indonesia's request on this point.
6.45. Finally Indonesia requests the Panel to "p rovide reasoning" that addresses its argument
that, to the extent that the "ICOF margin" can be considered to be a cost to PT Musim Mas, it is
revenue to ICOFS and therefore not an expense to the single economic entity as a whole.36
6.46. With regard to this arg ument, we explained at paragraph 7.103 of the Interim Report why
we did not agree with Indonesia's argument that a single economic entity is dispositive of whether
a given mark -up qualifies as a difference affecting price comparability. We considered that the
"ICOF-Margin" could be reasonably treated by the EU authorities as the remuneration of certain
functions, incurred only on export sales, rather than as a simple transfer of funds between related
entities. In paragraph 7.88 of the Interim Report, we exp lained why we were convinced by the
arguments put forward by the European Union in this regard. Moreover, we do not consider that,
in order to reach their determination, the EU authorities were obliged to determine that "revenue
to ICOF -S with respect to s ales activities for the investigated export sales was not part of the
[export] price" of the product concerned. Rather, in order to make an adjustment to the export
price, the EU authorities had to determine that the mark -up was a difference affecting pric e
comparability. We concluded that they did so by demonstrating, on the basis of facts on the
record, that the mark -up was a component of the price of exports to the European Union
representing the payment for a service and that there was no concomitant pr icing or expense
component on the domestic side. Contrary to what Indonesia suggests in its comments on this
paragraph37, the Panel does not "consider that because some SG&A [selling, general and
administrative costs] and profit expenses are included in the export price, ICOFS' SG&A and profit
can be deducted from the export price without creating an unfair comparison". As explained in
paragraphs 7.86 and 7.129 of the Interim Report, we considered that the ICOF Margin "could
reasonably be understood to refle ct an additional cost, for which there is no equivalent on the
domestic side …" and that ICOF -S' SG&A and profit represented a reasonable basis for calculating
the actual value of this service. We also recalled at paragraph 7.123 of the Interim Report that our
task in this dispute was not to assess whether the value of the allowance calculated by the
EU authorities was correct and led to a "fair comparison".
6.47. For the foregoing reasons, we have decided not to grant Indonesia's request.
Paragraph 7.85
6.48. Indonesia requests the Panel to38:
a. identify precise passages in the EU's published determination indicating that the
EU authorities ascribed limited probative value to Exhibit P.T. Musim Mas (PTMM)-18 and
that this exhibit does not reveal the nature, extent or scope of ICOF -S alleged
involvement in domestic sales;

b. reflect that there is no evidence on the record as to whether the EU authorities requested
additional information from the company on the involvement of ICOF-S in domestic sales;
and

c. indicate how it treated the EU authorities' alleged failure to seek additional evidence on
this issue.

36 Indonesia's request for review of the Interim Report, para. 2.24.
37 Indonesia's request for review of the Interim Report, para. 2.25.
38 Indonesia's request for review of the Interim Report, paras. 2.26 and 2.27.

6.49. The European Union considers that the measure at issue does not need to refer expressly to
all relevant evidence and argument and that the assertion that ICOF -S was a lso involved in
domestic sales was implausible and unsubstantiated. The European Union thus considers that no
changes to the Interim Report are warranted.39
6.50. We noted in this paragraph that the EU authorities rejected PT Musim Mas' argument with
regard to the alleged involvement of ICOF -S in domestic sales and that Exhibit PTMM -18 was the
only evidence cited by the parties supporting this argument. It is therefore implicit that the
EU authorities did not consider this evidence as sufficient to contradict thei r assessment of the
matter. We explained in this paragraph why we considered that it was not unreasonable for the
EU authorities to reach this conclusion in the face of such limited evidence of ICOF -S' involvement
in domestic sales.
6.51. We note that the recor d does not indicate whether the EU authorities requested further
evidence of ICOF-S' involvement in domestic sales. We also note that although Indonesia did refer
during the proceedings to the failure of the EU authorities to request additional evidence 40, it did
not develop a claim under Article 2.4 of the Anti -Dumping Agreement on this basis: there was
therefore no need to address the EU authorities' alleged failure to seek additional evidence in order
to resolve the dispute. For the same reason, we consid er that there is no reason to amend our
Report on this point, and have thus decided not to grant Indonesia's request.
Footnote 156

6.52. Indonesia asks the Panel to indicate that the issue of whether PT Musim Mas had its own
marketing department arose for the first time before this Panel and that the EU authorities never
discussed the charts included in Exhibits EU-5 and EU-6 during the underlying investigation.41
6.53. The European Union objects to the proposed changes and considers that the measure at
issue does not need to refer expressly to all relevant evidence and argument.42
6.54. It is clear from the labelling of these exhibits (EU -5 and EU -6) that this evidence was
brought to the attention of the Panel by the European Union during WTO panel proceedings. We
also consider that our assessment of the determinations made by the EU authorities in this case
should not be limited to the content of the published determinations, but should encompass the
entire body of evidence that was on the record before the investigating authority during the course
of the investigation. Evidence coming directly from the company (such as Exhibits EU -5 and EU-6)
is particularly relevant to such an examination, even if the EU authorities did not expressly discuss
this evidence in their publish ed determinations. We have therefore decided not to grant
Indonesia's request.
Paragraph 7.90
6.55. Indonesia asks the Panel to delete the characterization as "factual" of the
EU authorities' conclusion that ICOF-S performed "functions [similar to those] of an agent working
on a commission basis" or to add an explanation why it considers this finding to be "factual" rather
than "legal".43
6.56. The European Union objects to the proposed changes. It considers that the
EU authorities' conclusion on this issue "may or ma y not be legal characterisations of fact in
EU law, but they are statements of fact for the purposes of WTO law given the scope of these
proceedings."44

39 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
40 Indonesia's response to Panel question No. 35, para. 1.83; and comments on European Union's
41 Indonesia's request for review of the Interim Report, paras. 2.28 and 2.30.
42 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
43 Indonesia's request for review of the Interim Report, paras. 2.31 and 2.35.
44 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.

6.57. We consider that the EU authorities' finding that ICOF -S performed functions similar to
those of an age nt working on a commission basis – and that Ecogreen Oleochemicals Pte Ltd
(Singapore) (EOS) did not – was based on the specific facts concerning the two companies, as
explained in paragraphs 7.93 to 7.95 and at paragraphs 7.147 and 7.148 of the Interim Re port.
Moreover, as explained at paragraph 7.152 of the Interim Report, although the EU authorities
applied the same criteria under EU law to both ICOF -S and EOS, they introduced a quantitative
criterion in the Revised Determination for direct sales made by the producers and for third -party
sales made by the related trader. We therefore disagree with Indonesia 's statement in its request
for review that "the legal nature of this term is also more than amply demonstrated by the fact
that, without any change in the underlying facts , Ecogreen went from being characterized as
having the functions of an agent working on a commission basis (in the Definitive Determination)
to no longer having these functions (in the Amending Regulation ) …".45 We have thus decided not
to grant Indonesia's request.
Paragraph 7.92

6.58. Indonesia asks the Panel to state the legal basis for the determination reached by the
EU authorities with regard to the adjustment for a commission.46
6.59. The European Union objects to the proposed changes.47
6.60. In response to question 3 of the Panel, the European Union indicated that Article 2.10 of the
Basic Regulation "was the basis for the adjustments that were made in this case" . We analysed in
detail the reasoning of the EU authorities in reaching their deter mination on the adjustment to the
export price in paragraphs 7.63 to 7.71 of the Interim Report. As we stated in paragraph 7.73 of
the Interim Report, in their Preliminary Determination:
The EU authorities' explanations relied principally upon the Sale an d Purchase
Agreement between PT Musim Mas and ICOF -S to determine the existence of a
mark-up on sales of the product at issue to the European Union.
In their Final Determination, the EU authorities also analysed (in response to comments
made by the Indone sian exporters), whether the related trader had functions similar to an
agent working on a commission basis, in the sense of Article 2(10)(i) of the Basic
Regulation. We consider that there is no need to clarify further the legal basis for the
determination reached by the European Union, especially as we see no need for us to
express an opinion on the correct legal basis for the EU authorities' actions under EU law.
6.61. Indonesia also requests the Panel to state that Indonesia's claim under Article 2.4 is not
based on the EU authorities having used an incorrect standard – namely using the concept of an
entity having "functions" of an agent working on a commission basis – but rather on the fact that
the adjustment made was inappropriate.48
6.62. However, we note that, at paragraph 4.139 of its first written submission, Indonesia argued
that "the Commission's criterion is flawed and bereft of economic sense. The Commission's
analysis, including the numerous facts it relied on concerning the companies' activities, does n ot
justify the adjustment. The Commission's actions therefore amount to a violation of the
Anti-Dumping Agreement". In light of this statement, we have decided not to grant Indonesia's
request.
Paragraph 7.93

6.63. Indonesia argues that PT Musim Mas and Indone sia made extensive arguments about the
reasons why PT Musim Mas formally undertakes direct export sales, but that these reasons were

45 Indonesia's request for review of the Interim Report, para. 2.33. (emphasis original)
46 Indonesia's request for review of the Interim Report, paras. 2.37-2.40.
47 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
48 Indonesia's request for review of the Interim Report, paras. 2.41-2.43.

insufficiently analysed by the EU authorities during the underlying investigation and by the Panel
during the WTO proceedings.49
6.64. The European Union deems the proposed changes unnecessary and considers that the
measure at issue does not need to refer expressly to all relevant evidence and arguments.50
6.65. The "extensive arguments" allegedly made by PT Musim Mas about direct export s ales are
not apparent to us at page 43 of Exhibit IDN -22, as this excerpt from the questionnaire merely
describes PT Musim Mas as the "formal contract partner of customers in Indonesia".51
6.66. PT Musim Mas explains52 that "some countries do not accept the ICOF-S issued certificate of
origin that product is made in Indonesia. In such cases PTMM must contract directly (China, Japan)
so that PTMM can issue a certificate of origin." This explanation is also developed by Indonesia
before the Panel, as direct export sales made by PT Musim Mas are described as a mere formality53
and "the undisputed evidence on the record is that all sales involve the participation of the sales
and marketing arm in Singapore". 54 We disagree that these statements amount to "undisputed
evidence". On the contrary, we found that the evidence on the record does not support the
argument that sales formally made by PT Musim Mas are, in reality, made by ICOF-S.
6.67. We have nevertheless decided to add a sentence in Paragraph 7.93 to reflect that
"PT Musim Mas and Indonesia have explained that the intervention of PT Musim Mas in sales of the
product concerned was purely formal, but no probative record evidence has been brought to our
attention in support of this explanation."
Paragraphs 7.99-7.104

6.68. Indonesia asks the Panel to revise its description of Indonesia's arguments. Indonesia also
requests the Panel to state clearly that Indonesia did not argue that a mark -up between related
companies can never affect price comparability.55
6.69. The European Union cons iders the proposed changes unnecessary and that "Indonesia's
argument of principle has been correctly summarised and rejected by the Panel."56
6.70. We have already rejected Indonesia's requests to review our description of Indonesia's
arguments under paragraph 7 .39 above and we reach the same concl usion with regard to
paragraphs 7.99 to 7.104 of the Interim Report. We also consider that Indonesia's view is already
accurately reflected at paragraphs 7.103 (where Indonesia's response to Panel question 33 is
quoted) and 7.104 of the Interim Report.
6.71. In addition, Indonesia requests the Panel to clarify the role played by the concept of "an
arm's length transaction" in its analysis, including the applicable legal standard under WTO, and to
relate this concept to the published determinations. Indonesia understands the Panel to mean that
"where transactions between parties within an SEE are 'at arm's length', the authority may adjust
normal value or export price, as appropriate, for the entire amount of the transaction."57
6.72. This is not what we found. At paragraph 7.103 of the Interim Report, we stated that, "in our
view, it is possible that a transaction between two entities within what Indonesia denotes as a
'single economic entity ' could reflect an expense that must be re covered and thus would impact
price comparability." As far as the amount of the adjustment is c oncerned, we refer to
paragraph 7.129 of the Interim Report which states: "when a transfer of funds occurs between two
related entities, an investigating authority would be justified in examining whether the actual value

49 Indonesia's request for review of the Interim Report, paras. 2.44 and 2.45.
50 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
51 Emphasis added.
52 Company-internal note concerning verification of ICOF-S, (Exhibit IDN-38) (BCI), p. 3.
53 See for example, Indonesia's first written submission, para. 4.7.
54 Indonesia's first written submission, para. 4.169.
55 Indonesia's request for review of the Interim Report, paras. 2.48 and 2.49.
56 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
57 Indonesia's request for review of the Interim Report, para. 2.50.

of the expense differs from its reported value. Such an examination would, in our view, assist in
identifying the proper amount of the adjustment to be made." We consider that this finding is
consistent with the statement of the Appellate Body at paragraph 141 of its report in US –
Hot-Rolled Steel that: "where the parties to a transaction have common ownership … usual
commercial principles might not be respected between them".58 We thus disagree with Indonesia's
comment at paragraph 2.57 of its request for review that "in the Appellate Body's language"
transactions within a single economic entity " are a vehicle for transferring economic resources
within the single economic enterprise".59
6.73. Indonesia also asks the Panel to delete the offset -quote in paragraph 7.103, because that
quote "did not address a transaction between two parts of an SEE, but instead addressed activity
conducted by a part of an SEE that gives rise to a flow of funds out of the SEE ".60
6.74. We have decided not to grant Indonesia's request because we consider that Indonesia's
response to question 10 of the Panel (which is quoted in part at paragraph 7.103 of the Panel
Report) distinguishes clearly between actual expenses incurred by payin g a third party and
expenses incurred internally by the producer/exporter. Indonesia's view that such expenses "will
be adjusted for" is also bereft of any ambiguity and consistent with the views expressed in
paragraph 7.103 of the Interim Report.
6.75. Finally, Indonesia asks the Panel to clarify "whether its finding under Article 2.4 is based on
a legal interpretation that a mark -up in a transaction between closely -intertwined companies in a
single economic entity, such as the mark -up at issue in this case, is always an expense to the
single economic entity that may be deducted from the export price (and/or normal value, if it
occurs on the domestic market side)."61
6.76. We consider that the legal standard applied in this case is cl early spelled out at
paragraphs 7.103 and 7.106 of the Interim Report. We therefore see no need to amend the Report
on this point and have thus decided not to grant Indonesia's request.
Footnote 201
6.77. Indonesia requests the Panel to delete the reference in footnote 201 to its position having
"evolved" in the course of the proceedings with respect to whether transactions between entities in
a single economic entity involve an expense. Indonesia argues that it explained consistently in its
first written submission and subsequently that selling expenses incurred by the sales department
of a seller, as indirect selling expenses, are not to be deducted in determining the export price.62
6.78. The European Union objects to the proposed change. It considers the Panel's statement in
footnote 201 to be fair and accurate.63
6.79. We have decided not to grant Indonesia's request because we see some ambiguity in
Indonesia's argument on this issue and footnote 201 is intended to acknowledge this ambiguity. In
particular, we have difficulty reconciling Indonesia's initial argument that the mark -up is a mere
allocation of sales proceeds between related entities 64, and Indonesia's responses to Panel
questions following the second meeting of the Panel with the parties, which do not exclude that a
transaction between two relate d entities may involve an actual expense. 65 The fact that the

58 Emphasis added.
59 Emphasis added.
60 Indonesia's request for review of the Interim Report, para. 2.61..(emphasis original)
61 Indonesia's request for review of the Interim Report, para. 2.63.
62 Indonesia's request for review of the Interim Report, paras. 2.66 and 2.67.
63 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
64 See for example Indonesia's first written submission, paras. 4.4, 4.94, and 4.100; and second w ritten
submission, paras. 2.8-2.12. See also Indonesia's response to Panel question No. 15, para. 1.71: "[t] hus, the
mark-up is an allocation of revenues between closely-related companies (or within a single economic entity). It
is not an expense."
65 See for example Indonesia's response to Panel question No. 31, para. 1.36: " the amount of any
expense for selling/trading services is not the amount transferred between the two companies, but instead is
the amount of the actual expenses incurred in making the sales" and "these actual expenses can be identified
and verified – as they were in this case – from ICOFS' financial statements ". See also Indonesia's response to

amount actually transferred between the related entities as compensation for the services provided
may differ from the actual cost of the service does not affect our conclusion that expenses – rather
than mere allocations of sales proceeds – may be incurred between two related entities. As we
noted at paragraph 7.128, Indonesia itself "recognizes [the] distinction between (i) identifying
whether an allowance should be made; and (ii) identifying the proper amount for that allowance".
Paragraph 7.109
6.80. Indonesia requests the Panel to clarify the appropriate legal standard under WTO law to
determine whether the common ownership, control and management structure of two entities is
such that they form p art of a single economic entity and to identify with references where in its
published determinations the EU authorities correctly stated and applied that standard to all of the
evidence before it.66
6.81. The European Union asks the Panel to reject this request, since the legal standard is set out
in Article 2.4 of the Anti-Dumping Agreement, as explained by the Panel.67
6.82. We see no need to modify the Interim Report on the basis of Indonesia's request. We recall,
in particular, our analysis and conclusion in paragra phs 7.103-7.106 that the existence of a single
economic entity is not dispositive of whether a given payment is a difference which affects price
comparability under Article 2.4 of the Anti-Dumping Agreement.
Paragraph 7.123
6.83. Indonesia requests the Panel to reflect its argument that "a violation of Article 2.4 has
occurred because an adjustment was made , rather than because the amount of the adjustment
was improper." Indonesia also requests the Panel to either delete the assertion that Indonesia
accepts that the value of the allowance is not at issue in the present dispute or include the certain
text in footnote 237, since the portrayal that "Indonesia would be indifferent to the amount of
deduction or that Indonesia would accept the manner in which the EU determined … cannot be
considered an accurate or complete representation of Indonesia's arguments throughout these
proceedings."68
6.84. The European Union objects to the proposed changes. For the European Union, it is clear
that Indonesia stated that it was making an argument in principle, and not contesting the
calculation of the amount of the adjustment.69
6.85. We have decided not to grant Indonesia's requests. We recall, in this regard, our reasoning
in respect of Indonesia's request concerning paragraph 7.38 of the I nterim Report, namely, that
Indonesia's response to question 38 of the Panel is unambiguous ("[i]n effect, yes" 70) and the
Interim Report accurately reflects this answer. Further, we see nothing in the Interim Report that
describes Indonesia's claim as impl ying that "should the EU be found to be entitled to make a
deduction, Indonesia would be indifferent to the amount of deduction."71
Paragraph 7.128
6.86. Indonesia argues that the Panel ignored Indonesia's argument that "for a producer/exporter
using an independent trader, the entire amount paid by the producer/exporter is a selling expense
that affects price comparability", but that "this is not the case where the 'downstream participant '

Panel question No. 33, para. 1.55: "[t] he amount actually transferred between the affiliated producer/exporter
and transporter for the services may be greater or lower than the amount of the expenses actually incurred. In
any event, because of the relationship between the companies, this amount is deemed to be unreliable and
does not reflect the 'actual' or 'genuine' expenses reflected in the profit and loss statements of the relevant
entities."
66 Indonesia's request for review of the Interim Report, paras. 2.68 and 2.69.
67 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
68 Indonesia's request for review of the Interim Report, paras. 2.70-2.75.
69 European Union's comments on Indonesia's request for review of the Interim Report, p. 3.
70 Indonesia's response to Panel question No. 38, para. 1.108.
71 Indonesia's request for review of the Interim Report, paras. 2.74 and 2.75.

… is a legally-separate sales entity within a single economic entity, where the 'additional costs and
profits' remain the costs and profits of the producer/exporter single economic entity as a whole
and are not in toto an expense that must be deducted". 72 Indonesia considers that, without
addressing its arguments in this regard, t he Panel appears to simply assume that all additional
participants in the distribution chain are unrelated, independent companies.
6.87. The European Union sees no basis for any changes to precise aspects of the Interim Report
and considers that Indonesia is attempting to re-argue its case.73
6.88. We see no need to modify the Interim Report on the basis of Indonesia's comments on this
paragraph. Contrary to Indonesia's assertion, the Interim Report does not state that all
downstream participants are necessarily unrelated companies or that transactions between related
companies always reflect actual expenses. Rather, the precise wording we used is that "the
intervention of downstream participants in the sales chain may result 'in additional costs and
profits'".74 In any event, we recall our conclusion in paragraph 7.105 of the Interim Report that the
existence of a single economic entity is not dispositive of whether a given payment is a difference
which affects price comparability. In the present case, we concluded at par agraph 7.88 that the
EU authorities had a sufficient evidentiary basis for finding that the mark -up was a component of
the price of exports to the European Union that represented the payment for a service and that
there was no concomitant pricing or expense component on the domestic side.
Paragraph 7.129
6.89. Indonesia asks the Panel to address in the Final Report certain arguments which, according
to Indonesia, were insufficiently considered by the Panel75:
a. whether it was permissible for the EU authorities to de duct the SG&A and profit of the
related trader;
b. whether and in which situations the relationship between a producing entity and an
affiliated sales entity affects the type and nature of the expenses incurred;
c. whether it is appropriate to deduct from the e xport price the "profit" of a related sales
entity where that sales entity is a 100% subsidiary of the group holding company.
6.90. In addition, Indonesia considers that, by finding in this paragraph that "when a transfer of
funds occurs between two related enti ties, an investigating authority would be justified in
examining whether the actual value of the expense differs from its reported value", the Panel
encourages investigating authorities to ignore how enterprises structure their business when
calculating dumping margins.76
6.91. The European Union sees no basis for any changes to precise aspects of the Interim Report,
and considers that Indonesia is attempting to re -argue its case. For the European Union,
Indonesia's argument of principle was clear, and it was clearly and rightly rejected by the Panel for
the reasons set out in the report.77
6.92. We see no need to modify the Interim Report on the basis of Indonesia's comments on this
paragraph. We consider that our analysis and conclusion in paragraphs 7.103 -7.106 sufficiently
address the matters referred to by Indonesia in its comments on this paragraph.
Footnote 244
6.93. Indonesia takes issue with the Panel's understanding that, "[i]n practical terms", the
EU authorities have "verified" "actual expenses … in a context of co mmon ownership/control by

72 Indonesia's request for review of the Interim Report, paras. 2.78 and 2.79.
73 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.
74 Emphasis added.
75 Indonesia's request for review of the Interim Report, para. 2.82.
76 Indonesia's request for review of the Interim Report, paras. 2.85-2.92.
77 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.

reference to the relevant entity's P&L". Indonesia requests the Panel to clarify whether the
EU authorities performed a verification or based their determination on such "actual expenses".
Indonesia makes six specific requests for clarification in that regard.78
6.94. The European Union sees no reason for any changes to precise aspects of the
Interim Report on the basis of Indonesia's requests. For the European Union, the measure at issue
does not need to refer expressly to all relevant e vidence and argument and the Panel's analysis is
adequate as it stands.79
6.95. We do not see how the clarifications requested by Indonesia would assist the parties in the
resolution of the dispute. We have thus decided not to grant Indonesia's request. We have
however decided to delete the last sentence of footnote 244 of the Interim Report, which reflected
our understanding of the EU authorities' actions in the underlying investigation, but is not directly
relevant to the resolution of this dispute.
Footnote 246
6.96. Indonesia requests that its arguments related to the matters addressed in footnote 246 be
reflected in a "complete and accurate manner", for instance, by inserting certain text proposed by
Indonesia. Indonesia also requests the Panel to elaborate on the reasoning in footnote 246 and
adequately address Indonesia's argument, including (and in particular) Indonesia's arguments in
its comments on the EU's second answers, in paragraphs 2.1 to 2.9 and the scenarios set out in
paragraph 2.7 of that document.80
6.97. The European Union objects to the proposed changes. For the European Union, Indonesia's
argument of principle has been correctly summarised and rejected by the Panel. In the
European Union's view, Indonesia appears to be attempting to re -argue its case, and to be
conflating issues associated with the construction of an export price with issues associated with the
making of necessary adjustments.81
6.98. We have decided not to grant Indonesia's requests. We recall again that panels are not
required to address in thei r reports every single argument or piece of evidence submitted by a
party. To the extent that Indonesia's requests for review are premised on the proposition that the
relationship between two entities is determinative to whether an adjustment should be mad e, we
consider that this matter is addressed sufficiently in paragr aphs 7.103 -7.106 of the
Interim Report.
Paragraph 7.139
6.99. Indonesia requests that subparagraph (ii) of paragraph 7.139 be amended with certain text
in order to clarify that the term "performe d from Indonesia" was used by the EU authorities and
was not endorsed or agreed by Indonesia.82
6.100. The European Union objects to the proposed changes. It considers that the Interim Report
adequately and fairly reflects the arguments that were exchanged by the parties during the
proceedings.83
6.101. Paragraph 7.71 of the Interim Report, which describes the factual findings made by the
EU authorities in the Revised Determination, clearly indicates that the EU authorities found that
"given the level of direct export sale s, it can only be concluded that PTMM's export sales are
performed not only from [ICOF -S], but also from Indonesia." A reference to recital 27 of the
Revised Determination is also included in footnote 116 of the Interim Report. In any event, we
consider th at the wording of sub -paragraph (ii) of paragraph 7.139 sufficiently captures

78 Indonesia's request for review of the Interim Report, paras. 2.93 and 2.94.
79 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.
80 Indonesia's request for review of the Interim Report, paras. 2.98-2.104.
81 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.
82 Indonesia's request for review of the Interim Report, paras. 2.105-2.107.
83 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.

Indonesia's argument and we see no further basis for any modification. We have thus decided not
to grant Indonesia's request.
Paragraph 7.140
6.102. Indonesia requests the Panel to add a reference in this paragraph to the fact that it has
"consistently argued" that third -party sales performed by ICOF -S were "nothing but a second line
of business". Indonesia also requests the Panel to clarify where it has addressed this argument.84
6.103. The European Union considers the proposed changes unnecessary. In its view, Indonesia's
argument of principle has been correctly summarised and rejected by the Panel.85
6.104. We note that paragraphs 4.103 to 4.106 of Indonesia's first written submission and
paragraph 45 of Indonesia's opening statement at the first meeting of the Panel with the parties
merely describe a "scenario" – intended to support Indonesia's argument – in which an entity
establishes two lines of business. We see nothing in these paragraphs indicati ng that third -party
sales performed by ICOF-S were "nothing but a second line of business" . We also note that we
addressed the importance of third -party sales for ICOF -S in paragraph 7.94 and footnote 169 of
the Interim Report. We have thus decided not to grant Indonesia's request.
Paragraph 7.141
6.105. Indonesia requests the Panel to include in paragraph 7.141 a more complete description of
its argument, particularly as it pertains to Ecogreen and PT Musim Mas exhibiting the same
business structures.86
6.106. The Europ ean Union considers the proposed changes unnecessary. In its view, the
summary of the arguments and the Panel's assessment are adequate as they stand in order to
deal with Indonesia's claim in this regard.87
6.107. We have decided not to grant Indonesia's request. We recall again that panels are not
required to address in their reports every single argument or piece of evidence submitted by a
party. In any event, the Interim Report states in paragraph 7.141 that "Indonesia considers that it
was incumbent upon EU au thorities to explain in which regard th e relationship between
PT Musim Mas and ICOF -S was different from the relationship between Ecogreen and EOS", and
proceeds to explain in paragraph 7.157 that "we do not have sufficient information before us to
assess whether the circumstances of the two companies were identical or similar in all aspects."
Paragraph 7.148
6.108. Indonesia requests that the Panel delete the word "factual" in paragraph 7.148 as it
pertains to subparagraph (a) or, alternatively, explain in detail why it considers this finding to be
"factual", as opposed to "legal".88
6.109. The European Union objects to the proposed changes for the reasons already explained
above in respect of Indonesia's requests for review of paragraph 7.90.89
6.110. We consider that the EU aut horities' finding that the mark -up was a factor that had an
impact on the price to be compared and was granted on export sales but not on domestic sales,
was based on an examination of the facts regarding PT Musim Mas and ICOF -S on the record. The
evidence supporting this conclusion is described in details in paragraphs 7.64 to 7.69 and 7.73
to 7.88 of the Interim Report. Our conclusion at paragraph 7.88 of the Interim Report is that "on
the basis of the foregoing, we consider that the EU authorities' factual finding of a mark -up and
associated expenses linked to export sales only was proper and provided a sufficient basis for

84 Indonesia's request for review of the Interim Report, paras. 2.108 and 2.109.
85 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.
86 Indonesia's request for review of the Interim Report, paras. 2.110-2.113.
87 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.
88 Indonesia's request for review of the Interim Report, paras. 2.114 and 2.115.
89 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.

concluding that the factor at issue constituted a difference which affects price comparability". 90 We
have thus decided not to grant Indonesia's request.
Paragraph 7.150
6.111. Indonesia requests that paragraph 7.150 be amended to "reflect correctly" Indonesia's
argument and remove what it considers to be a misleading description in the Interim Report.
Indonesia states that it consistently arg ued that the criteria used by the EU authorities are flawed
because they reveal no meaningful information about whether a payment made between two
related entities affects price comparability and because the EU authorities did not explain
anywhere why they affect price comparability. Indonesia also asserts that it argued that the fact
that the EU authorities first found that the two companies were in an identical situation and
warranted equal treatment, and then, without any change in facts, found that the two companies
warranted differential treatment, casts doubt on the validity of those criteria and requires a
particularly thorough explanation.91
6.112. The European Union objects to the proposed changes. It considers that the summary of
the arguments and the Panel's assessment are adequate.92
6.113. We have decided not to grant Indonesia's request. We note, in this regard, that the title of
section 7.3.5.4.3.1 of the Interim Report describes accurately Indonesia's argument: "that the
criteria used by the EU authorities we re irrelevant to an analysis of price comparability ".93
Moreover, in paragraph 7.44 we explain that Indonesia states "that the EU authorities used
incorrect and arbitrary criteria under Article 2.4 in making the adjustment for PT Musim Mas".94
Paragraph 7.153
6.114. Indonesia requests that its arguments be reflected in the same manner as they have been
set out in its submissions to the Panel, emphasizing that a shift in the investigating
authorities' analytical framework without any change in the underlying facts, requires a particularly
thorough reasoned and adequate explanation.95
6.115. The European Union does not consider that Indonesia's comments in this regard disclose
any basis for changes to precise aspects of the Interim Report. In its view, the summary of the
arguments and the Panel's assessment are adequate as they stand.96
6.116. A summary of Indonesia's arguments in relation to the different outcome for Ecogreen is
contained in paragraphs 7.137 to 7.141 of the Interim Report. This section clearly indicates that,
according to Indonesia, the EU authorities failed to provide a reasoned and adequate explanation
for eventually treating the two Indonesian exporting producers differently in relation to the trading
commission received by their respective traders. The Interim Repo rt also quotes in part
paragraph 4.270 of Indonesia's first written submission. 97 We have nevertheless decided to grant
Indonesia's request by quoting in full paragraph 4.270 of Indonesia's first written submission.
Paragraph 7.159
6.117. Indonesia considers that the Panel mischaracterized its claim by stating in this paragraph
that "Indonesia is not making a claim that [the] EU authorities violated Article 2.4 by not making
an allowance to Ecogreen's export price or by changing their assessment after the end of the
investigation".98 Indonesia also takes issue with the Panel's conclusion that the explanation given

90 Emphasis added.
91 Indonesia's request for review of the Interim Report, paras. 2.116 and 2.117.
92 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.
93 Emphasis added.
94 Emphasis added.
95 Indonesia's request for review of the Interim Report, para. 2.218.
96 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.
98 Indonesia's request for review of the Interim Report, paras. 2.122-2.124.

by the EU authorities in the case of Ecogreen did not affect the explanation supporting the
determination concerning PT Musim Mas.
6.118. The European Union does not consider that Indonesia's comments in this regard disclose
any basis for changes to precise aspects of the Interim Report. In its view, the summary of the
arguments and the Panel's assessment are adequate.99
6.119. We note that Indonesia's request for findin gs at paragraph 2.79 of its second written
submission states that its claim relates to the adjustment made "to PT Musim Mas' export
price".100 We have not been able to identify any request for a finding that the European Union
violated Article 2.4 by not mak ing an allowance to Ecogreen's export price or by modifying the
assessment of Ecogreen's situation after the end of the investigation. We have thus decided not to
grant Indonesia's request.
6.3.2 Requests for review submitted by the European Union
Paragraphs 7.37(b) and 7.112-7.130
6.120. The European Union requests that the Interim Report be clarified to reflect that the reason
referred to in paragraph 7.37(b) and discussed in paragraphs 7.112 -7.130 was not a separate
"claim/argument"101 by Indonesia.
6.121. Indonesia submits that "[e]verything that Indonesia has sa id under the heading of
Article 2.4 are arguments in support of that one single overarching claim." 102 Indonesia also
disagrees with any suggestion that it did not take any issue with the amount of the adjustment
made by the EU authorities.
6.122. We consider that paragraph 7.38 reflects sufficiently that the three arguments of Indonesia
referred to in paragraph 7.37 were intended, jointly and independently, to support Indonesia's
claim that the EU authorities acted inconsist ently with Article 2.4 of the Anti-Dumping Agreement.
We therefore see no reason to grant the European Union's request in this regard.
Paragraph 7.58
6.123. The European Union requests certain modifications to this paragraph. 103 Indonesia did not
express a view on this request. We have decided to grant the European Union's request and have
modified paragraph 7.58 accordingly.
Paragraph 7.65
6.124. The European Union requests certain modifications to this paragraph. 104 Indonesia did not
express a view on this request. We have decided to grant the European Union's request by adding
a footnote to the relevant sentence in paragraph 7.65.
Paragraph 7.71
6.125. The European Union requests that the phrase "[i]n line with the specific requirements of
EU law" be added to the first sentence o f paragraph 7.71.105 Indonesia did not express a view on
this request.

99 European Union's comments on Indonesia's request for review of the Interim Report, p. 4.
100 Emphasis added.
101 European Union's request for review of the Interim Report, p. 4.
102 Indonesia's comments on the European Union's request for review of the Interim Report, para. 2.2.
(emphasis original)
103 European Union's request for review of the Interim Report, p. 4.
104 European Union's request for review of the Interim Report, p. 4.
105 European Union's request for review of the Interim Report, p. 4.

6.126. We have decided not to grant the European Union's request because we are not called
upon in the present dispute to express views on what may or may not be "in line with the specific
requirements of EU law".
Paragraph 7.80
6.127. The European Union requests a modification to this paragraph to reflect that " [t]he issue
was not whether or not ICOF -S was involved in domestic sales but rather whether there was any
evidence of a commission being paid for the alleged involvement of ICOF-S in domestic sales".106
6.128. Indonesia does not express a view on whether the specific modification requested by the
European Union should be made. However, Indonesia submits that "this correction by the EU
illustrates the recurring disregard by the Panel of the proper standard of review in its analysis" and
expresses views on the "substantive implications" of the European Union's request.107
6.129. We have decided not to grant the European Union's request. We do not consider that our
understanding that the EU authorities inferred that ICOF -S was not involved in domestic sales is
incorrect or an inaccurate representation of the issue before them. The determinations make clear
that the EU authorities considered and rejected PT Musim Mas' assertions concerning the
involvement of ICOF -S in domestic sales, namely, that ICOF -S "would also coordinate domestic
sales" and that "functions of marketing and sales were carried out by" ICOF -S.108 We also note
that the European Union itself stated that "PT Musim Mas directly invoiced all of its domestic sales
transactions without the apparent involvement of ICOF -S" and that this "further contradicts the
assertion that ICOF -S performed the functions of an intern al sales department of
PT Musim Mas".109 Additionally, the minutes prepared by ICOF -S and PT Musim Mas during their
respective verification visits (submitted by Indonesia as evidence) indicate that whether or not
ICOF-S was involved in domestic sales was a pertinent issue before the EU authorities.110
Paragraph 7.158
6.130. The European Union requests the deletion of the final three sentences of paragraph 7.158.
The European Union considers that "the Panel itself states [that these sentences] are irrelevant to
the determinations it is called upon to make."111
6.131. Indonesia does not express a view on whether the specific modification requested by the
European Union should be made. However, Indonesia submits that it "is unable to understand how
the Panel can find that the EU failed to provide a reasoned and adequate exp lanation for its
treatment of Ecogreen, all the while rejecting Indonesia's claim that the EU failed to provide a
reasoned and adequate explanation for its treatment of PT Musim Mas."112
6.132. We agree with the European Union that the final three sentences of para graph 7.158 are
not relevant to the particular determinations we are called upon to make, a s reflected in
paragraph 7.159. As such, we have decided to grant the European Union's request and have
modified paragraph 7.158 accordingly.

106 European Union's request for review of the Interim Report, p. 5.
107 Indonesia's comments on the European Union's request for review of the Interim Report, paras. 2.6
and 2.9-2.12.
108 Final Determination, (Exhibit IDN-4), recital 35; and Revised Determination, (Exhibit IDN-5),
recitals 24 and 27.
109 European Union's first written submission, para. 46 (emphasis added). See also European Union's
second written submission, paras. 76 and 81-83.
110 See PT Musim Mas Minutes Inspection Visit Medan, 25 November 2010, (Exhibit IDN-27) (BCI),
p. 13.
111 European Union's request for review of the Interim Report, p. 5.
112 Indonesia's comments on the European Union's request for review of the Interim Report, para. 2.16.

6.4 Requests for review submitted by the parties pertaining to Indonesia's claims under
Articles 3.1 and 3.5 of the Anti-Dumping Agreement
Paragraph 7.166
6.133. Indonesia requests the Panel to delete the word "additi onally" in line 11 of
paragraph 7.166 because it does not understand what is "additional".113
6.134. The European Union considers the proposed change unnecessary and that the summary in
the Interim Report adequately reflects what Indonesia actually argued in this regard.114
6.135. In order to avoid misrepresenting Indonesia's argument, we have decided to grant
Indonesia's request and have made the modification sought.
Paragraphs 7.166 and 7.180
6.136. Indonesia submits that the Panel has summarized Indonesia's argument with respect to
the beginning of the economic crisis in a highly selective and inco mplete manner. Indonesia
requests that paragraphs 7.166 and 7.180 be amended to reflect what it considers to be the three
arguments (or the three -pronged argument) concerning the beginning of the economic crisis that
it made during the proceedings.115
6.137. The European Union considers the proposed changes unnecessary and that the summary
in the Interim Report adequately reflects what Indonesia actually argued in this regard.116
6.138. In order to avoid misrepresenting Indonesia's argum ent, we have modified
paragraph 7.166 to reflect additional aspects of Indonesia's argument. We have also added a
footnote to paragraph 7.181 clarifying that we consider it unnecessary for the effective resolution
of the dispute to address any further aspects of Indonesia's argument in this regard.
Paragraph 7.177 and footnote 327
6.139. Indonesia requests that the Panel delete the assertions that Indonesia considered that a
quantitative analysis was required and that it changed its arguments during the course of the
proceedings. Indonesia asserts tha t it never argued – either explicitly or "in effect" – that
investigating authorities must use quantitative methodologies for their non -attribution analysis.
Indonesia further asserts that it therefore cannot be said to have "move[d] away" from an
"emphasis on quantitative tools". Indonesia also notes that its use of the term "extent" reflects the
Appellate Body's long-standing legal standard.117
6.140. The European Union considers the proposed changes unnecessary and that the summary
in the Interim Report adequately reflects what Indonesia actually argued in this regard.118
6.141. In order to avoid misrepresenting Indonesia's argument, we have modified the relevant
sentence in paragraph 7.177 to reflect that our understanding pertains to what Indonesia argued
would have bee n preferable in the present case, even if not required under Article 3.5 of the
Anti-Dumping Agreement. We have likewise modified footnote 327 in light of Indonesia's request.
Paragraph 7.190
6.142. Indonesia requests the Panel to replace the phrase in paragraph 7.190 "and further, that
i[t] i[s] not for investigated producers to 'substantiate' that a particular factor is causing injury,

113 Indonesia's request for review of the Interim Report, paras. 2.125 and 2.126.
114 European Union's request for review of the Interim Report, p. 4.
115 Indonesia's request for review of the Interim Report, paras. 2.127-2.134.
116 European Union's request for review of the Interim Report, p. 4.
117 Indonesia's request for review of the Interim Report, paras. 2.135-2.141 (referring to Appellate Body
Reports, US – Hot-Rolled Steel, para. 227; US – Line Pipe, paras. 213 and 214; and EC – Tube or Pipe Fittings,
paras. 188 and 189; and Panel Report, US – Steel Safeguards, paras. 329-332).
118 European Union's request for review of the Interim Report, p. 5.

but rather, it is for an investigating authority to investigate and make a determination" with the
phrase "and further, that alt hough it is for an investigated producer to substantiate that a
particular factor is causing injury, it is subsequently for an investigating authority to investigate
and make a determination of non -attribution." Indonesia's request in this regard relates t o the
omission in the Interim Report of the preceding part of Indonesia's relevant statement, as well as
to an "editorial error" in Indonesia's relevant statement, which Indonesia considers leads to
ambiguity.119
6.143. The European Union considers the proposed cha nges unnecessary and that the summary
in the Interim Report adequately reflects what Indonesia actually argued in this regard.120
6.144. In order to avoid misrepresenting Indonesia's argument, we have decided to reflect the
additional aspect of the statement referr ed to by Indonesia. We have also granted Indonesia's
request to modify the "editorial error" that it made in that statement.
Paragraph 7.198
6.145. Indonesia requests that the Panel quote Indonesia's response to Panel question 21 in its
entirety.121 The European Un ion considers the proposed changes unnecessary and that the
summary in the Interim Report adequately reflects what Indonesia actually argued in this
regard.122
6.146. We have decided not to grant Indonesia's request, because the matter raised by Indonesia
is already addressed in paragraph 7.199.
Paragraphs 7.200 and 7.201
6.147. Indonesia submits that the Panel's characterization of Indonesia's arguments is "entirely
misleading", and that "the allegation that Indonesia made some sort of 'factual error' is
incorrect."123 Indonesia therefore requests that the Panel adjust its description of Indonesia's
arguments and delete the "allegation" of a "factual error".
6.148. The European Union considers the proposed changes unnecessary and that the summary
in the Interim Report adequately reflects what Indonesia actually argued in this regard.124
6.149. We consider that paragraph 7.191 of the Interim Report describes accurately and
sufficiently Indonesia's position that "although the impact of the issue of raw materials access and
the relevant price f luctuations was conceptually separate and distinct from the economic crisis
per se, this impact was nevertheless particularly pronounced during the economic crisis." We have
thus decided to grant Indonesia's request by deleting paragraph 7.200 and the firs t sentence of
paragraph 7.201. The Panel's conclusion in paragraph 7.202 of the Interim Report is not affected
by this change.
Footnote 388
6.150. Indonesia requests that the Panel delete the word "manifestly" in footnote 388. 125 The
European Union considers the p roposed change unnecessary and that the summary in the
Interim Report adequately reflects what Indonesia actually argued in this regard.126
6.151. In order to avoid misrepresenting Indonesia's argument, we have decided to grant its
request regarding footnote 388.

119 Indonesia's request for review of the Interim Report, paras. 2.142-2.148.
120 European Union's request for review of the Interim Report, p. 5.
121 Indonesia's request for review of the Interim Report, paras. 2.149-2.152.
122 European Union's request for review of the Interim Report, p. 5.
123 Indonesia's request for review of the Interim Report, para. 2.166.
124 European Union's request for review of the Interim Report, p. 5.
125 Indonesia's request for review of the Interim Report, paras. 2.169-2.171.
126 European Union's request for review of the Interim Report, p. 5.

6.5 Requests for review submitted by the parties pertaining to Indonesia's claim under
Article 6.7 of the Anti-Dumping Agreement
6.152. Indonesia requests that the Panel include a reference to certain arguments made by
Indonesia with respect to Exhibit PTMM -18. Indonesia requests that such a reference be included
in the Panel's discussion of the failure of the EU authorities to disclose the results of the
verification.127
6.153. The European Union submits that Indonesia appears to be rearguing the case and requests
the Panel to reject Indonesia's request in this regard.128
6.154. Nothing in Indonesia's request affects our reasoning or conclusion in relation to its claim
under Article 6.7 of the Anti -Dumping Agreement. Accordingly, we see no reason to make any
changes to the section of the Interim Report pertaining to Indonesia's claim under Article 6.7.
7 FINDINGS
7.1. This dispute concerns European Union measures imposing anti -dumping duties on certain
fatty alcohols from Indonesia. Indonesia's claims proceed under various provisions of the
Anti-Dumping Agreement. The European Union requests that the Panel reject each of the claims
presented by Indonesia, and in addition, requests the Panel to find that the authority for the
establishment of this Panel has lapsed pursuant to Article 12.12 of the DSU, and that there is
therefore no legal basis on which it may make rulings.
7.2. We begin by examining the request for a preliminary r uling submitted by the
European Union. Thereafter, we consider Indonesia's claim s under Articles 2.3 and 2.4 of the
Anti-Dumping Agreement pertaining to the deduction from PT Musim Mas' export price for the
activities of ICOF -S, before considering Indonesia's claims under Articles 3.1 and 3.5 of the
Anti-Dumping Agreement pertaining to the EU authorities' non -attribution analys is. We then
consider Indonesia's claim under Article 6.7 of the Anti -Dumping Agreement pertaining to the
results of the verification visit. However, before proceeding to do so, we briefly recall the relevant
general principles regarding treaty interpretati on, the standard of review and the burden of proof
in WTO dispute settlement proceedings, as laid down by the Appellate Body.
7.1 General principles regarding treaty interpretation, the applicable standard of review
and burden of proof
7.1.1 Treaty interpretation
7.3. Article 3.2 of the DSU provides that the dispute settlement system serves to clarify the
existing provisions of the covered agreements "in accordance with customary rules of
interpretation of public international law". It is generally accepted that the princ iples codified in
Articles 31 and 32 of the Vienna Convention are such customary rules.129
7.1.2 Standard of review
7.4. Panels generally are bound by the standard of review set forth in Article 11 of the DSU, which
provides, in relevant part:
[A] panel should make an objective assessment of the matter before it, including an
objective assessment of the facts of the case and the applicability of and conformity
with the relevant covered agreements.130

127 Indonesia's request for review of the Interim Report, paras. 2.172-2.175.
128 European Union's request for review of the Interim Report, p. 5.
129 Appellate Body Report, Japan – Alcoholic Beverages II, p. 10, section D.
130 Emphasis added.

7.5. Further to Article 11 of the DSU, Article 17.6 of the Anti -Dumping Agreement sets forth a
specific standard of review applicable to anti-dumping disputes, namely:
(i) [I]n 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 relevant 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
interpretation, the panel shall find the authorities' measure to be in conformity with
the Agreement if it rests upon one of those permissible interpretations.
7.6. The Appellate Body has stated that the "objective assessment" to be made by a panel
reviewing an investiga ting authority's determination is to be informed by an examination of
whether the authority provided a reasoned and adequate explanation as to: ( a) how the evidence
on the record supported its factual findings; and ( b) how those factual findings supported the
overall determination.131
7.7. The Appellate Body has also stated that a panel reviewing an investigating authority's
determination may not undertake a de novo review of the evidence or substitute its judgment for
that of the investigating authority. At the s ame time, a panel must not simply defer to the
conclusions of the investigating authority. A panel's examination of those conclusions must be
"in-depth" and "critical and searching".132
7.8. A panel must limit its examination to the evidence that was before the a uthority during the
course of the investigation and must take into account all such evidence submitted by the parties
to the dispute. 133 A panel's examination in that regard is not necessarily limited to the pieces of
evidence expressly relied upon by an investigating authority in its establishment and evaluation of
the facts in arriving at a particular conclusion. 134 Rather, a panel may also take into consideration
other pieces of evidence that were on the record and that are connected to the explanation
provided by the investigating authority in its determination. This flows from the principle that
investigating authorities are not required to cite or discuss every piece of supporting record
evidence for each fact in the final determination. 135 That notwithstanding, since a panel's review is
not de novo, ex post rationalizations unconnected to the investigating authority's explanation –
even when founded on record evidence – cannot form the basis of a panel's conclusion.136
7.1.3 Burden of proof
7.9. The general principles a pplicable to the allocation of the burden of proof in WTO dispute
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert
and prove its claim. 137 Therefore, as the complaining party, Indonesia bears the burden of
demonstrating that the European Union measures it challenges are inconsistent with the provisions
of the covered agreements that it invokes. The Appellate Body has stated that a complaining party
will satisfy its burden when it establishes a prima facie case, namely, a case which, in the absence
of effective refutation by the defending party, requires a panel, as a matter of law, to rule in

131 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 186.
132 Appellate Body Reports, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93; and US –
Lamb, paras. 106 and 107.
133 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 187.
134 See Appellate Body Report, Thailand – H-Beams, paras. 117-119.
135 See Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 164.
136 Appellate Body Report, US – Lamb, paras. 153-161. See also Appellate Body Reports, US – Steel
Safeguards, para. 326; and US – Softwood Lumber VI (Article 21.5 – Canada), para. 97; and Panel Reports,
Argentina – Ceramic Tiles, para. 6.27; and Argentina – Poultry Anti-Dumping Duties, para. 7.48.
137 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.

favour of the complaining party. 138 It is generally for each party asserting a fact to provide proof
thereof.139
7.2 European Union's request for a preliminary ruling
7.2.1 Procedural background
7.10. On 8 January 2015, the European Union requested the Panel to issue a preliminary ruling
that its authority to rule had lapsed, pursuant to Article 12.12 of the DSU, following the alleged
suspension of Panel proceedings for more than 12 months. The European Union reiterated its
request at the organizational meeting of the Panel on 30 June 2015. While it expressed its
preference for the Panel to reach an early ruling on this matter, the European Uni on deferred to
the discretion of the Panel in respect of the timing of the ruling.
7.11. Indonesia provided a written response to the request for a preliminary ruling on
30 June 2015, in which it requested the Panel to reject the procedural objection made by th e
European Union. Rather, Indonesia requested the Panel to rule that its jurisdiction had not lapsed.
7.12. In the interest of due process, the Panel informed the parties on 20 November 2015 that it
intended to respond to the request for a preliminary ruling be fore the first substantive meeting,
while indicating that it may provide its reasons at a later date.
7.13. Following its review of the claims and arguments raised by the parties and third parties, the
Panel ruled on 23 November 2015 that its authority had not lapsed pursuant to Article 12.12 of the
DSU. The Panel indicated that the preliminary ruling and the reasoning of the Panel would form an
integral part of the Panel's final report.
7.2.2 Main arguments of the parties
7.2.2.1 European Union
7.14. The arguments put forward by t he European Union in support of its request can be
summarized as follows:
a. First, the Europea n Union submits that Indonesia sent a "request" to the
WTO Secretariat on 11 July 2013 with a view to suspending the work of the Panel in the
sense of the first sentence of Article 12.12 of the DSU. According to the European Union,
the fact that this request took the form of a simple email did not affect its nature or
validity because "a request in this sense is simply an indication from the complaining
member that it seeks suspension of the work of the panel".140
b. Second, the European Union considers that the term "work of the panel" in Article 12.12
refers to any task performed by a panel or by the WTO Secretariat, on behalf of the
panel, "from the moment when the pa nel is established" .141 Therefore, the fact that
Indonesia's request occurred before panel composition did not affect its validity.
c. Third, pending panel composition, the European Union considers that a request to
suspend the work of the panel can be dis posed of by the WTO Secretariat as part of its
right to exercise "reasonable executive action" 142 on behalf of the panel. In particular,
the European Union submits that "the suspension may be communicated to the parties
and third parties by any natural person pr operly acting in the name of the panel,
including a duly authorized member of the Secretariat assisting the panel pursuant to
Article 27 of the DSU."143

138 Appellate Body Report, EC – Hormones, para. 104.
139 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.
140 European Union's request for a preliminary ruling, para. 13.
141 Ibid. para. 14.
142 Ibid. para. 35.
143 Ibid. para. 15.

d. Fourth, according to the European Union, Indonesia's request to suspend panel
composition had the consequence of either effectively suspending the work of the Panel
as of the date of the request, or – if the Panel finds that the work of the Panel had not
yet started – of suspending the "future work" of the Panel.144
e. Finally, the European Union submits that its interpretation of the provisions of
Article 12.12 of the DSU is consistent with the purpose of the DSU, which aims inter alia
at the prompt settlement of disputes.145
7.2.2.2 Indonesia
7.15. Indonesia presents two main arguments in response:
a. First, Indonesia argues tha t the email correspondence from the Permanent Mission of
Indonesia to the WTO Secretariat on 11 July 2013 was not intended as a request to
suspend the work of the panel under Article 12.12.146 Indonesia notes that the wording
of the email in question does no t explicitly refer to the "suspension" of the Panel's
"work", nor does it refer explicitly or implicitly to Article 12.12 of the DSU. 147 Further,
the email correspondence did not take the form of an official communication from a
party to the Panel. 148 In fact, according to Indonesia, this email was simply a response
to an invitation to attend a preferences meeting for Panel composition: it was addressed
to the WTO Secretariat rather than the Panel and it merely sought to postpone the
"preferences meeting" in re spect of the composition of the Panel rather than the "work
of the panel" generally.149
b. Second, Indonesia considers that the work of the panel cannot be suspended before
panel composition, since Article 12.12 calls for a panel to take a decision as to wheth er
or not a suspension should be granted.150 This discretion conferred on the panel, in turn,
presupposes that panelists have been appointed in order to be able to deliberate and
decide on the request.151
7.2.3 Main arguments of the United States as third party
7.16. The United States disagrees with the European Union that a non -composed panel can
suspend its work in the sense of Article 12.12. The United States contends that the circumstance
contemplated in the final sentence of Article 12.12 "arises only when there is a panel to which the
complaining party may direct its 'request' and only if the panel has decided to exercise its
discretion to accede to that request".152
7.2.4 Evaluation by the Panel
7.2.4.1 Introduction
7.17. The request for a preliminary ruling submitted by the European Uni on is based on "the final
sentence of Article 12(12)" of the DSU. Paragraph 12 of Article 12 provides:
The panel may suspend its work at any time at the request of the complaining party
for a period not to exceed 12 months. In the event of such a suspensi on, the
time-frames set out in paragraphs 8 and 9 of this Article, paragraph 1 of Article 20,
and paragraph 4 of Article 21 shall be extended by the amount of time that the work

144 European Union's request for a preliminary ruling, para. 32.
145 Ibid. para. 20.
146 Indonesia's response to European Union's request for a preliminary ruling, para. 4.8.
147 Indonesia's response to European Union's request for a preliminary ruling, para. 4.5.
148 Ibid. paras. 4.9 and 4.10.
149 Ibid. paras. 4.7 and 4.8.
150 Ibid. para. 4.16.
151 Ibid. paras. 4.40 and 4.41.
152 United States' third-party submission, para. 7.

was suspended. If the work of the panel has been suspended for more than
12 months, the authority for establishment of the panel shall lapse.
7.18. This provision, which is the last paragraph of an Article dedicated to "Panel Procedures",
deals specifically with the temporary suspension of panel work. The last sentence of paragraph 12
sets out the maximum time-period for such suspensions (12 months), as well as the consequences
attached to the l apsing of this 12 -month period : the expiry of the authority for the panel's
establishment – that is, its existence. The first sentence of paragraph 12 describes the conditions
which need to be met for such a suspension to occur, while the second sentence provides for the
extension of the time-frames for the panel's final report in the event of a suspension.
7.19. The first and final sentences of paragraph 12 appear inextricably linked. In assessing if the
work of the Panel has been suspended, it is necessary to examine if the conditions set forth in the
first sentence are fulfil led, in order to determine whether there was a valid suspension in the first
place. A suspension of the Panel's work which did not comply with these criteria could not lead to
the consequences provided for in the last sentence of paragraph 12, that is, the lapsing of the
authority for the Panel.
7.20. On its face, the plain text of Article 12.12 sets out three conditions which must be fulfilled
before it can be concluded that the authority for the establishment of the Panel has lapsed:
a. the complaining party must have submitted a request to suspend the work of the Panel;
b. the Panel must have suspended its work; and
c. the work of the Panel must have been suspended for more than 12 months.
7.21. We will first assess whether Indonesia's correspondence of 11 July 2013 can be
characterized as a request to suspend the work of the Panel in the sense of Article 12.12 of the
DSU.
7.2.4.2 Whether Indonesia made a "request" to suspend the work of the Panel under
Article 12.12 of the DSU
7.22. In EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US), the
Appellate Body expressed the view that the relinquishment of rights granted by the DSU could not
be lightly assumed, and, therefore, the language in the documents that are alleged to waive such
rights must "reveal clearly that the parties intended to relinquish their rights".153
7.23. A close examination of the facts is all the more warranted in the present case as the
consequences associated with a request under Article 12.12 are particularly serious: the practical
effect of this provision is that a complainant is deprived of the right to continue with a claim in the
event that 12 months pass following the suspension of a panel's work.
7.24. The Panel must therefore determine , as a threshold matter, if a request to suspend the
work of the Panel was, in fact, made by Indonesia.
7.25. The European Union's allegation t hat the contested correspondence was in fact a request
under Article 12.12 rests entirely on the statement, in Indonesia's email, that "[w]e would like to
suspend the meeting while waiting the development from Brussel [sic]".154 This language, together
with the ensuing consequences i.e. a general halt in the progression of the pr oceedings is,
according to the European Union, sufficient to demonstrate that Indonesia made a request under
Article 12.12.

153 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5
– US), para. 217.
154 See Email correspondence of 10 and 11 July 2013 between the Secretariat and the parties,
(Exhibit IDN-2), p. 1.

7.26. In our view, t he plain language of Indonesia's email contr adicts the European Union's
characterization in this regard:
a. While the use of the term "suspend" in the email could evoke Article 12.12, the absence
of any attendant reference to "the work of the panel" or to " Article 12.12 of the DSU"
suggests that the wording of the alleged request is, at best, ambiguous.
b. Indonesia's request to "s uspend the meeting" rather than "the work of the panel"
militates against a reading that Indonesia made a request pursuant to Article 12.12.
Rather, the fact that the request w as made in respons e to an invitation from the
WTO Secretariat to attend a meeting in respect of Panel composition and that it was
addressed to the WTO Secretariat rather than to "the Panel" suggests to us that
Indonesia's intention was to make a request to the WTO Secretariat , acting in its
capacity of assisting the parties during panel composition under Article 8 of the DSU, to
postpone the proposed meeting.
7.27. Against this background of, at a minimum, ambiguity concerning the meaning and intention
of Indonesia's email, we recall the Appellate Body's observation that the relinquishment of rights
granted by the DSU should not be lightly assumed. We therefore conclude that the European Union
has not sufficiently demonstrated that Indonesia did, in fact, make a "request" in the sense of the
first sentence of Article 12.12 of the DSU. We therefore proceed on the basis that, as a matter of
fact, no such request was made.
7.28. Since the suspension of the Panel's work is contingent on a request in this respect having
been made by the complainant, we find, in the absence of such a request, that this Panel's work
has not been suspended in the sense of Article 12.12 of the DSU. In the light of this finding, we do
not consider it necessary for the effective resolution of this request to address the other
arguments raised by the parties and third parties.
7.2.4.3 Conclusion
7.29. Based on the foregoing considerations, we find that:
a. the European Union has not demonstrated sufficiently that t he correspondence sent by
the Permanent Mission of Indonesia to the WTO Secretariat on 11 July 201 3 constituted
a request to suspend the work of the Panel in the sense of DSU Article 12.12;
b. the work of the Panel was not suspended; and
c. the authority for the establishment of this Panel has not lapsed.
7.3 Indonesia's claims under Articles 2.3 and 2.4 of the Anti-Dumping Agreement
7.3.1 Introduction
7.30. Indonesia claims that the EU authorities acted inconsistently with Articles 2.3 and 2.4 of the
Anti-Dumping Agreement by making an improper allowance for a factor that d id not affect price
comparability.155 This allowance was mad e on the basis of Article 2(10)(i) of the Basic
Anti-Dumping Regulation, which specifically addresses the treatment of trading commissions in the
calculation of dumping margins. This provision156 states:
(i) Commissions
An adjustment shall be made for differences in commissions paid in respect of the
sales under consideration.

155 Indonesia's second written submission, para. 5.1.
156 Council Regulation (EC) No. 1225/2009 of 30 November 2009 on protection against dumped imports
from countries not members of the European Community, Official Journal of the European Community,
L Series, No. 343 (22 December 2009), p. 51 (Basic Anti-Dumping Regulation), (Exhibit EU-3), Article 2(10)(i).

The term 'commissions' shall be understood to include the mark -up received by a
trader of the product or the like product if th e functions of such a trader are similar to
those of an agent working on a commission basis.
7.31. The EU authorities determined that a mark-up, within the meaning of this provision, granted
by an Indonesian producer of fatty alcohols (PT Musim Mas) to its relat ed trader (ICOF -S) was a
difference affecting prices and price comparability of the product under investigation. 157 The
EU authorities therefore made a n allowance in the form of a downward adjustment to the export
price and compared it with the normal value to establish the dumping margin.
7.32. Indonesia claims that the EU authorities mischaracterized the mark-up as a trading
commission rather than as a transfer of funds between PT Musim Mas and ICOF -S that is "simply
an allocation, or shifting, of funds (profits ) from 'one pocket to another'" within a single economic
entity, and therefore adjusted the export price for a factor which did not affect price
comparability.158 As a consequence, the allowance led to an unfair comparison between the export
price and the no rmal value and is thus inconsistent with Article 2.4 of the
Anti-Dumping Agreement. Indonesia also makes a consequential claim under Article 2.3 of the
Anti-Dumping Agreement.
7.33. The principal question before us is whether the EU authorities correctly charac terized the
mark-up paid by PT Musim Mas to ICOF -S as a difference which affects price comparability under
Article 2.4 of the Anti -Dumping Agreement. 159 In addressing this question, we begin with an
overview of the parties' and third parties' arguments, befo re setting out our understanding of the
legal standard under Article 2.4 as relevant to the claim and arguments before us. We then review
the EU authorities' explanation and relevant record evidence with a view to determining whether
an unbiased and object ive investigating authority could have treated the mark -up as a difference
which affects price comparability. In light of this conclusion, we then evaluate the arguments made
by Indonesia in support of its claim of inconsistency with Article 2.4, namely : (a) that the
existence of a single economic entity precluded the EU authorities from making an allowance for
the mark -up; ( b) that the allowance resulted in an asymmetrical comparison with the normal
value; and (c) that the different outcomes for the two In donesian producers demonstrate that the
EU authorities' analysis was arbitrary.
7.3.2 Relevant provisions of the covered agreements
7.34. Article 2.4 of the Anti-Dumping Agreement provides, in pertinent part:
A fair comparison shall be made between the export price a nd the normal value. …
Due allowance shall be made in each case, on its merits, for differences which affect
price comparability, including differences in conditions and terms of sale, taxation,
levels of trade, quantities, physical characteristics, and an y other differences which
are also demonstrated to affect price comparability.[*] … The authorities shall indicate
to the parties in question what information is necessary to ensure a fair comparison
and shall not impose an unreasonable burden of proof on those parties.
[*fn original]7 It is understood that some of the above factors may overlap, and authorities shall
ensure that they do not duplicate adjustments that have been already made under this provision.
7.35. Article 2.3 of the Anti-Dumping Agreement provides:
In cases where there is no export price or where it appears to the authorities
concerned that the export price is unreliable because of association or a compensatory

157 Commission Regulation (EU) No. 446/2011 of 10 May 2011 imposing a provisional anti-dumping duty
on imports of certain fatty alcohols and their blends originating in India, Indonesia, and Malaysia, Official
Journal of the European Union, L Series, No. 122/47 (11 May 2011) (Preliminary Determination),
(Exhibit IDN-3), recital 38.
158 See Indonesia's second written submission, paras. 2.8, 2.12, and 2.24. See also Indonesia's first
written submission, paras. 4.9 and 4.71; and response to Panel question No. 42(ii), para. 3.5.
159 The parties do not dispute this. (See Indonesia's first written submission, para. 4.57; second written

arrangement between the exporter and the importer or a third party, the export pric e
may be constructed on the basis of the price at which the imported products are first
resold to an independent buyer, or if the products are not resold to an independent
buyer, or not resold in the condition as imported, on such reasonable basis as the
authorities may determine.
7.3.3 Main arguments of the parties
7.3.3.1 Indonesia
7.36. Indonesia claims that the EU authorities did not make a fair comparison between the normal
value and the export price of the product under investigation. In particular, Indonesia submits t hat
the EU authorities adjusted the export price of the product under consideration for a factor that did
not constitute a difference which affects price comparability under Article 2.4 of the
Anti-Dumping Agreement.
7.37. Indonesia submits that "the ultimate litmus test" for any adjustment is that the factor being
adjusted for must affect price comparability. 160 An allowance may be made only if it is
"demonstrated" that a given factor affects price comparability. 161 For Indonesia, this implies that
an allowance is consistent with Article 2.4 only if the investigating authority's determination
contains a reasoned and adequate explanation that a particular factor affects price comparability.
Indonesia considers that the explanation given by the EU authorities in the i nvestigation at issue
was not reasoned and adequate for the following reasons:
a. the Indonesian producer (PT Musim Mas) and its Singapore -based trader (ICOF -S)
formed a single economic entity such that the mark -up granted on the transfer price of
the product under investigation should not be treated as an expense and as a difference
which affects price comparability162;
b. by calculating the value of the adjustment on the basis of the indirect selling costs and
profit of ICOF-S, the EU authorities created an asy mmetry between the export price and
the normal value163; and
c. the determination made by the EU authorities was arbitrary because no adjustment for a
commission paid to a related trader was made to the export price of the second
Indonesian exporting producer ( Ecogreen) of fatty alcohols despite it being in the same
factual circumstances.164
7.38. Indonesia contends that these arguments, jointly and independently, support its claim that
the EU authorities acted inconsistently with Article 2.4 of the Anti -Dumping Agreement by making
an improper deduction for a factor that did not affect price comparability. 165 We note that
Indonesia does not dispute that commissions can be the subject of an adjustment under Article 2.4
when paid to an independent trader 166, and further, that Indonesia does not take issue with the
amount of the adjustment that was made in the present case.167
7.39. Indonesia's first argument is that no allowance for a trading commission should be made
when a producer and a trader form a single economic entity. Rather, in such a case, the related
trader should be treated in the same manner as the internal sales department of the producer.
Indonesia acknowledges that the list of potential factors for which an allowance can be made
under the third sentence of Article 2.4 is not exhaustive and that commissions paid to a n
unaffiliated trader may, in certain cases, qualify as a difference which affects price comparability

160 Indonesia's first written submission, para. 4.57.
161 Indonesia's first written submission, para. 4.57.
162 Indonesia's second written submission, paras. 2.8-2.10.
164 Indonesia's first written submission, paras. 4.43 and 4.47.
165 See Indonesia's first written submission, para. 4.48; and second written submission, para. 5.1.
166 Indonesia's first written submission, paras. 4.67 and 4.68.
167 Indonesia's response to Panel question No. 38, para. 1.108.

for which an allowance is necessary. 168 However, the circumstances in the present case did not
justify such an allowance because ICOF -S, the related trader based in Singapore, operated as the
internal sales department of PT Musim Mas, with which it formed a single economic entity. As a
consequence of the very close corporate ties between the two entities, finan cial flows between
them "are, in effect, financial flows from one pocket of the exporting [single economic entity] to
another pocket of the same [single economic entity]" .169 For Indonesia, such internal monetary
flows between related parties do not in thems elves constitute an actual expense which can be
adjusted for in the process of calculating a dumping margin. 170 Indonesia contends further that
financial flows between related entities cannot be treated as selling expenses or as factors
affecting price comparability under Article 2.4 of the Anti-Dumping Agreement because they do not
affect the net ex -factory price accruing to the exporting producer. 171 The companies within the
single economic entity could adjust the level of the mark -up transferred between them
independently of either the price charged to the first unaffiliated customer or the actual selling
expenses incurred in making the sale and, as such, internal transfers within it do not affect its
pricing decisions.172
7.40. In light of the importance of the exi stence of a single economic entity to determining
whether an adjustment is warranted, Indonesia contends that investigating authorities are
"implicitly require[d]" under Article 2.4 to assess whether such an entity exists in a given case. 173
For Indonesia, t he criteria for making this determination pertain primarily to the corporate and
structural links between the entities in question, such as whether there is common ownership,
control, and management.174 Indonesia draws on Article 6.10 of the Anti-Dumping Agreement175 in
this regard, pointing to the use of these criteria by panels and the Appellate Body in the context of
that provision in Korea – Certain Paper and in EC – Fasteners (China) 176 to determine the
existence of a single economic entity. Turning to the p resent case, Indonesia submits that,
contrary to the "implicit requirement" under Article 2.4 of the Anti-Dumping Agreement, the
EU authorities did not assess whether PT Musim Mas and ICOF -S formed a single economic entity
by reference to their corporate a nd structural links, but rather focused on the "functions" of the
related trader in order to determine whether the mark -up granted to ICOF-S should be treated as
a difference which affects price comparability.177
7.41. In addition to relying on an irrelevant facto r, namely, the "f unctions" of the trader, the
EU authorities also erred in their assessment of the facts and thus wrongly concluded that the
functions of ICOF -S were similar to those of an "agent working on a commission basis" in the
sense of Article 2) 10) i) of the Basic Anti-Dumping Regulation. Indonesia argues in particular that
the EU authorities: ( a) failed to consider certain evidence on the record that reveals that ICOF -S
was not an independent trader, but operates instead as the internal sales department of
PT Musim Mas; and ( b) erroneously relied on factors which are, according to Indonesia "entirely
meaningless".178 These factors included, inter alia, that:
a. all domestic sales and certain export sales are invoiced directly by PT Musim Mas, which
Indonesia describes as a technique aimed at avoiding the taxation of ICOF-S' activities in

168 See Indonesia's first written submission, para. 4.67; and response to Panel question No. 1,
para. 1.3.
169 Indonesia's first written submission, para. 4.71. See also Indonesia's second written submission,
para. 2.8.
170 See Indonesia's second written submission, para. 2.9.
171 Indonesia's first written submission, para. 4.67.
172 Indonesia's response to Panel question Nos. 1, para. 1.11, 8, para. 1.41, 10, paras. 1.48 and 1.49,
and 42(ii), para. 3.5; opening statement at the second meeting of the Panel, para. 5; and second written
submission, paras. 2.6-2.8.
173 Indonesia's first written submission, para. 4.120.
174 Indonesia's first written submission, para. 4.127.
175 Article 6.10 provides that the authorities "shall, as a rule, determine an individual margin of dumping
for each known exporter or producer concerned of the product under investigation".
176 Indonesia's first written submission, paras. 4.123-4.130.
177 The "functions" of the related trader is the key criterion in Article 2(10)(i) of the European Basic
Anti-Dumping Regulation. It provides that "[t]he term 'commissions' shall be understood to include the
mark-up received by a trader of the product or the like product if the functions of such a trader are similar to
those of an agent working on a commission basis."
178 Indonesia's first written submission, para. 4.169.

Indonesia and a "mere formality driven by the wish to accommodate final customer
preferences"179;
b. PT Musim Mas and ICOF -S concluded a "Sale and Purchase Agreement" which pertains
only to the exportation of goods manufactured by PT Musim Mas, and which sets out the
rules for determining the transfer price of these goods through a margin (or mark -up)
granted by the producer to the trader. Indonesia argues that this Agreemen t is merely a
master agreement, or "a tool to approximate on paper … a relationship that would exist
between two unrelated entities"180; and
c. ICOF-S purchases and resells third -party products, which, according to Indonesia, "per
se says essentially nothing ab out the relations hip between a producer (like PT Musim
Mas) and a selling department (ICOF-S)".181
7.42. Indonesia contends that these factors, which formed the basis for the EU
authorities' conclusion that an adjustment was warranted, were not relevant for asses sing the
functions of ICOF -S nor for determining whether the mark -up constituted a difference which
affects price comparability. Rather, the EU authorities should have concluded from the facts on the
record that ICOF -S was the internal sales department of PT Musim Mas and that all sales of the
product under investigation (domestic and international sales) were organized by ICOF-S.
7.43. Indonesia's second argument is that the deduction for the mark -up led to an asymmetrical
comparison between the export price an d normal value since it resulted in elements being
deducted from the export price (SG&A) that were not deducted from the normal value. 182
According to Indonesia, where a related trader forms a single economic entity with the producer in
question, "nothing sh ould be deducted, either by way of SG&A or by way of profit – just like no
SG&A or profit would be deducted in the case of a formally -integrated company with a formally
internal sales department". 183 This flows from Indonesia's understanding that, where two entities
form a single economic entity, the ex -factory selling price at which a comparison is to be made
under the provisions of Article 2.4 should include the SG&A and profit of both entities in relation to
the product under consideration. 184 Indonesia notes, in this connection, that instead of deducting
the actual value of the trading commission/mark -up from PT Musim Mas' export price, the
EU authorities recalculated a notional commission composed of amounts for ICOF-S' indirect selling
costs and profit. Th is notional commission was then deducted from the single economic entity's
export price. In respect of the amount deducted for ICOF -S' profits, Indonesia contends that,
beyond the narrow exception reflected in Article 2.3 of the Anti -Dumping Agreement, it is never
permissible to deduct profit as a difference which affects price comparability because "[w]ithout
profit, one no longer makes a price -to-price comparison but rather a cost -to-cost comparison on
the basis of which it is no longer possible to identi fy dumping". 185 In respect of the amount
deducted for ICOF -S' SG&A, Indonesia contends that indirect selling expenses – as distinct from
direct selling expenses – are ordinarily included in arriving at an ex -factory price.186 Accordingly,
such expenses would n ot normally be the object of a difference which affects price comparability
under Article 2.4. In any event, Indonesia submits that no such deduction should have been made
because the EU authorities included SG&A in the ex -factory normal value . As a result of this
asymmetrical establishment of the normal value and export price, the comparison was not made
at the same level of trade, contrary to the requirements of Article 2.4 of the Anti -Dumping
Agreement. According to Indonesia, "[t]his asymmetry further v itiates the Commission's
comparison, renders it unfair, and contributes to the violation of Article 2.4".187

179 Indonesia's first written submission, para. 4.170.
180 Indonesia's first written submission, para. 4.192.
181 Indonesia's first written submission, para. 4.246.
182 Indonesia's response to Panel question No. 2, para. 1.25.
183 Indonesia's response to Panel question No. 17, para. 1.81.
184 See Indonesia's first written submission, paras. 4.69-4.71, 4.78, and 4.114; response to Panel
paras. 1.37-1.39; second written submission, para. 2.39; and comments on the European Union's response to
Panel question No. 41, para. 3.1.
185 Indonesia's response to Panel question No. 7, para. 1.36.
187 Indonesia's first executive summary, para. 2.25.

7.44. Third, Indonesia submits that the EU authorities' determination with regard to the
"functions" of the related trader is arbitrary. Indonesia points t o the fact that the two Indonesian
producers involved in the investigation (PT Musim Mas and Ecogreen) were in the same factual
situation with respect to their export sales to the European Union – both had a related trader in
Singapore remunerated by a trading commission. In spite of that, the conclusion reached by the
EU authorities on price comparability was different: no adjustment for a trading commission was
made in the case of Ecogreen, while a downward adjustment was made for PT Musim Mas. For
Indonesia, the different outcome s for PT Mus im Mas and Ecogreen demonstrate that the
EU authorities used incorrect and arbitrary criteria under Article 2.4 in making the adjustment for
PT Musim Mas. 188 Additionally, Indonesia points to the fact that the EU authori ties changed their
assessment of the facts after a judgment of the Court of Justice of the European Union which
clarified the circumstances under which Article 2(10)(i) of the Basic Anti-Dumping Regulation could
be applied. While the Final Determination tr eated both Singapore -based traders as "agents
working on a commission basis", the EU authorities revised this conclusion more than a year after
the end of the investigation and determined that the commission received by Ecogreen's trader no
longer justifie d an adjustment to the export price. Indonesia argues that these "diametrically
opposed conclusions" reached on the basis of the sam e facts demonstrate that the
EU authorities' assessment of those facts was arbitrary and did not meet the standard of a
reasoned and adequate explanation.189
7.45. Finally, Indonesia makes a consequential claim under Article 2.3 of the Anti -Dumping
Agreement. Indonesia's claim is based on the close relationship between this provision and the
third and fourth sentences of Article 2.4. Indonesia contends that if an allowance with respect to a
constructed export price violates Article 2.4, then it may also be said that the export price was
constructed in a way which is inconsistent with Article 2.3.190
7.3.3.2 European Union
7.46. The European Union requests the Panel to reject Indonesia's claim under Article 2.4 as well
as its consequential claim under Article 2.3 of the Anti-Dumping Agreement.
7.47. In relation to Indonesia's argument concerning the existence of a single economic entity,
the European Union submits that whether or not two companies form such an entity is not a
relevant consideration under Article 2.4.191 Rather, for the European Union, the determinative
question is whether there exists evidence of a difference which affects price comparability that
requires an adjustment to be made.192
7.48. The European Union considers that the payment of commissions to a trader in relation to
export sales and not domestic sales (or vice versa) is a relevant feature of the transactions that
are compared. As a conseque nce the European Union argues that the only relevant question
before the Panel is whether "there was evidence on the record that allowed the Commission to
reach the reasonable and reasoned conclusion that commissions were paid with respect to export
sales in which a trading company was involved whereas no commissions were demonstrated to
have been paid in relation to domestic sales". 193 According to the European Union the underlying
investigation showed, in fact, that a commission was paid by t he exporting pr oducer
(PT Musim Mas) to the related trader (ICOF-S) and that it was paid only in relation to export sales.
The EU authorities therefore had a sufficient evidentiary basis to adjust the export price.194
7.49. In any event, the European Union considers that the EU authorities did take into account –
in an unbiased and objective manner – the corporate relationship between the producer/exporter
and the trader, as part of their evaluation of the functions of ICOF -S. On the basis of this
examination, the EU authorities did not find that ICOF -S was the s ales department of
PT Musim Mas. Instead, they concluded that ICOF -S' functions were similar to those of "an agent

188 Indonesia's second written submission, para. 2.62.
189 Indonesia's first written submission, para. 4.270.
190 Indonesia's first written submission, paras. 4.282-4.285.
191 European Union's second written submission, para. 17.
192 European Union's second written submission, para. 26.
193 European Union's first written submission, para. 69.
194 European Union's response to Panel question No. 7, para. 1.34.

working on a commission basis". The EU authorities reached this conclusion on the basis of three
main eleme nts: (a) the high level of third -party sales in ICOF -S' turnover; (b) the fact that
PT Musim Mas (rather than ICOF-S) invoiced directly all domestic sales and a significant portion of
export sales; and (c) the existence of a Sale and Purchase Agreement bet ween PT Musim Mas and
ICOF-S which explicitly provided for a mark-up on export sales.195
7.50. The European Union likewise refutes Indonesia's second argument concerning the alleged
asymmetry of the comparison as a result of the allowance for the mark -up. First, the
European Union explains that, in view of the close corporate ties between the exporting producer
and the related trader, the EU authorities assumed that the mark -up did not fully reflect the
market value of the service rendered by ICOF -S. The EU authorities therefore evaluated what they
considered to be the actual value of the trading commission on the basis of the trader's indirect
selling expenses and a reasonable amount for profit, and then deducted this "notional commission"
from the export price.196 Second, the European Union disagrees with Indonesia's argument that, as
a result of this deduction, the EU authorities compared an export price without SG&A and profit to
a normal value which include those components. On the contrary, the European Union co ntends
that the record demonstrates that the ex -factory export price calculated by the EU authorities did
include an amount for SG&A and profit, even after the deduction had been made. The European
Union thus submits that the comparison was made at the sam e level of trade, as required by
Article 2.4 of the Anti-Dumping Agreement.197
7.51. Finally, in relation to the different outcome for the second Indonesian producer/exporter,
the European Union argues that Ecogreen was in a different factual situation from PT Mu sim Mas,
such that the allowance made was justified in the case of PT Musim Mas but not in the case of
Ecogreen.198
7.3.4 Main arguments of the third parties
7.52. Turkey submits that Article 2.4 of the Anti -Dumping Agreement requires that allowances
shall be made only for differences affecting price comparability and that the decision to make such
allowances must be made on a case-by-case basis.199
7.53. The United States submits that the treatment of commissions is a complex task for
investigating authorities and necessarily depends on the facts and circumstances of each case. The
key question in deciding whether to make an adjustment is whether the factors considered affect
price comparability. 200 The United States also considers that Article 2.4 does not contain a
threshold r equirement to analyse either the corporate relationship between a producer and a
trader or the respective functions carried out by the producer and the trader. It is for an
investigating authority to make a price adjustment if the facts on the record suppo rt it and
regardless of whether affiliated or non-affiliated parties are involved.201
7.3.5 Evaluation by the Panel
7.54. Indonesia requests us to find that the EU authorities acted inconsistently with Article 2.4 of
the Anti -Dumping Agreement by making an improper dedu ction for a factor that did not affect
price comparability. 202 We begin our evaluation of Indonesia's request by setting out our
understanding of the legal standard under Article 2.4 as relevant to the claim and arguments
before us, taking into account relevant reports of prior panels and the Appellate Body.
7.55. We note first that the opening sentence of Article 2.4 mandates that a "fair comparison" be
made between the export price and the normal value when determining whether dumping exists.

195 European Union's first written submission, para. 95.
196 European Union's second written submission, paras. 68 and 69.
197 European Union's response to Panel question No. 41, p. 9.
198 European Union's second written submission, paras. 90 and 101; response to Panel question No. 18,
pp. 16-20.
199 Turkey's third-party submission, para. 9.
200 United States' third-party response to Panel question No. 1, para. 1.
201 United States' third-party response to Panel question No. 2a, paras. 7-9.
202 Indonesia's second written submission, para. 5.1.

The second and thir d sentences of Article 2.4 elaborate on the means of ensuring, in practical
terms, that the "comparison" between the normal value and the export price is "fair". The third
sentence specifically requires that "[d]ue allowance" be made "for differences which affect price
comparability." According to the panel in EU – Biodiesel (Argentina):
[T]he ordinary meaning of making an "allowance" connotes "mak[ing] [an] addition or
deduction corresponding to … tak [ing] into account mitigating or extenuating
circumstances", and "due" connotes what is "just, proper, regular , and reasonable".
That is, additions or deductions in appropriate amounts to the export price or normal
value may be required to account for "differences" between the two if they affect price
comparability, thereby ensuring the "fairness" of the comparison under Article 2.4.203
7.56. The third sentence of Article 2.4 contains an illustrative list of factors that could potentially
affect price comparability. Although the alleged factor in the present case, nam ely a mark-up204, is
not included in this list, we note that the Appellate Body has construed this list as non-exhaustive:
The text of that provision gives certain examples of factors which may affect the
comparability of prices: "differences in conditions and terms of sale, taxation, levels of
trade, quantities, physical characteristics, and any other differences ". However,
Article 2.4 expressly requires that "allowances" be made for "any other differences
which are also demonstrated to affect price compara bility." … There are, therefore, no
differences "affect[ing] price comparability" which are precluded, as such, from being
the object of an "allowance".205
7.57. Prior panel and Appellate Body reports have provided guidance on how to determine
whether an alleged f actor constitutes a "difference which affects price comparability" for which an
allowance must be made under Article 2.4 of the Anti -Dumping Agreement. For instance, the
Appellate Body stated in US – Zeroing (EC) that:
The illustrative list in the third se ntence of Article 2.4 provides indications as to the
nature of the differences covered by the principle set out in that sentence, which
refers to differences that include "differences in conditions and terms of sale, taxation,
levels of trade, quantities, physical characteristics". The elements of this list are all
features, or characteristics, of the transactions that are compared. Although the list is
illustrative and not exhaustive, it suggests that the adjustments, or allowances,
covered by the third se ntence are those that are made to take into account the
differences relating to characteristics of the compared transactions (export
transactions and domestic transactions). Article 2.4 specifies that the differences for
which due allowance shall be made are those "which affect price comparability". In our
view, this refers to differences in characteristics of the compared transactions that
have an impact, or are likely to have an impact, on the price of the transaction.206
7.58. We derive from this that the factors referred to in Article 2.4 are "features", "characteristics"
or "identifiable components" of the transactions and prices in question that have, or are likely to
have, an impact on the comparison of those prices .207 We also understand that such factors must
give rise to a "difference" between the normal value and export prices being compared such that
those prices are not fairly comparable unless an allowance is made. As recognized by the panels in
EU – Biodiesel (Argentina) and US – Softwood Lumber V, this aspect of the legal standard could be
satisfied by evidence that the "feature", "characteristic" or "identifiable component" of the prices in

203 Panel Report, EU – Biodiesel (Argentina), para. 7.294. (fns omitted)
204 We use the terms "mark-up" and "commission" as terms of convenience without prejudice to our
analysis of the parties' arguments concerning the nature and existence of the "mark-up" or "commission". We
note that the EU authorities used both terms to denote the amount referred to in the Sale and Purchase
Agreement between ICOF-S and PT Musim Mas as the ICOF Margin. (See Final Determination, (Exhibit IDN-4),
recital 31; and Revised Determination, (Exhibit IDN-5), recital 31).
205 Appellate Body Report, US – Hot-Rolled Steel, para. 177. (emphasis original)
206 Appellate Body Report, US – Zeroing (EC), para. 157. We note that both parties cited this paragraph
of the Appellat e Body's Report as authority for the legal standard under Article 2.4. (European Union's first
written submission, para. 63; European Union's response to Panel question No. 3; Indonesia's second written
submission, para. 2.5; and Indonesia's response to Panel question No. 2, para. 1.23).
207 See also Panel Report, EU – Biodiesel (Argentina), paras. 7.301 and 7.302.

question is linked exclusively either to the domestic sales or to relevant export sales subject to
comparison, or to both sides of the comparison but in different amounts. 208 Conversely, if an
alleged factor does not represent a difference affecting the comparability between the normal
value and export prices, no allowances are permitted pursuant to the third sentence of
Article 2.4.209
7.59. Beyond this, the Appellate Body and panels have recognized on a number of occasions that
Article 2.4 does not prescribe a specific methodology for how to achieve a "fair" comparison.210 For
instance, the panel in US – Softwood Lumber V stated that:
[B]earing in mind the text of Article 2.4, we consider that this provision does not
impose on investigating authorities any particular method for examining whether any
given difference affects price comparability.211
7.60. Textual elements of Article 2.4, such as the reference to due allowances being made "in
each case, on its merits", and that in a given investigation, "[t]he authorities shall indicate to the
parties in question what information is necessary to ensure a fair comparison", suggest that
allowances made under Article 2.4 involve a case -specific analysis of the particular evidence
available in a given investigation. On that basis, the panel in US – Softwood Lumber V considered
further that:
[T]he requirement to make due allowance for such diff erences, in each case on its
merits, means that the authority must at least evaluate identified differences … with a
view to determining whether or not an adjustment is required to ensure a fair
comparison between normal value and export price under Article 2.4, and make an
adjustment where it determines this to be necessary on the basis of its evaluation. We
consider that Article 2.4 does not require that an adjustment be made automatically in
all cases where a difference is found to exist, but only where – based on the merits of
the case – that difference is demonstrated to affect price comparability.212
7.61. We also consider it relevant to our analysis in the present case that the EU authorities made
the downward adjustment for an identified difference affecting price comparability of their own
volition based on a provision in the governing regulation. 213 This aspect differentiates our analysis
from the evidentiary assessment of alleged differences affecting price comparability by past
panels. In particular, past p anels have assessed whether interested parties provided sufficient
evidence to justify an allowance for differences affecting price comparability (or, at least, to
require an investigating authority to take steps to achieve clarity in respect of the allege d
difference).214 In that regard, the Appellate Body has stated that "exporters bear the burden of

208 Panel Report, EU – Biodiesel (Argentina), paras. 7.301 and 7.302. The panel stated that the alleged
factor in that case "does not relate to a difference in the characteristics of the … domestic vs. export
transactions being compared" and that the alleged factor was not "an identifiable component of the constructed
normal value itself". See also Panel Report, US – Softwood Lumber V, para. 7.176.
209 Appellate Body Report, US – Zeroing (EC), para. 156.
210 See, e.g. Appellate Body Reports, US – Zeroing (EC), para. 146; and US – Softwood Lumber V,
para. 175; and Panel Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 7.78; EC – Fasteners
Softwood Lumber V, para. 7.167.
211 Panel Report, US – Softwood Lumber V, para. 7.167.
212 Panel Report, US – Softwood Lumber V, para. 7.165. (emphasis original)
213 In particular, the original petition does not appear to contain a request for a downward adjustment
for the mark-up (Anti-Dumping Complaint by Cognis GmbH and Sasol Olefins and Surfactants GmbH,
25 June 2010, (Exhibit IDN-37), pp. 12-14), nor do the relevant determinations provide an indication that the
adjustment was made at the request of one or more interested parties during the investigation. (See
Preliminary Determination, (Exhibit IDN-3), recital 38; and Final Determination, (Exhibit IDN-4),
recitals 31-35). Rather, PT Musim Mas requested that no adjustment should be made for the mark-up and
further argued that, if the EU authorities adjusted the export price, then at least an identical adjustment should
be made to the normal value.
214 See Panel Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), paras. 7.83 and 7.84; EC –
Tube or Pipe Fittings, paras. 7.162-7.164; Argentina – Poultry Anti-Dumping Duties, para. 7.238; Egypt – Steel
Rebar, paras. 7.255-7.259; Korea – Certain Paper, para. 7.147; and US – Softwood Lumber V,
paras. 7.173-7.176 and 7.352-7.365. See also Appellate Body Report, EC – Fasteners (China), paras. 487
and 488.

substantiating, 'as constructively as possible', their requests for adjustments reflecting the 'due
allowance' within the meaning of Article 2.4".215 According t o the Appellate Body, "[i]f it is not
demonstrated to the authorities that there is a difference affecting price comparability, there is no
obligation to make an adjustment". 216 In these instances, the burden lay with the relevant
interested party to demonst rate the existence of a difference affecting price comparability. In
contrast, our assessment focuses on whether the EU authorities themselves had sufficient
evidence to justify an allowance for a difference affecting price comparability, taking into accou nt
the argumentation and evidence provided by interested parties in rebuttal.217
7.62. With the foregoing understanding of the legal standard under Article 2.4 in mind, we now
turn to an analysis of whether the EU authorities' explanations reveal a sufficient evid entiary basis
for treating the mark-up in question as a "difference which affects price comparability".
7.3.5.1 Analysis of the EU authorities' determination to make an adjustment to the
export price for the "mark-up"
7.63. We recall that the EU authorities treated the mark-up218 paid to ICOF -S on export sales to
the European Union as a difference which affects price comparability for which a downward
adjustment to the export price was warranted.219 We begin with an overview of relevant aspects of
the EU authorities' determi nations, including as they evolved over the course of the investigation.
We then assess the relevant evidence on the record to determine whether, in arriving at their
conclusion, the EU authorities' establishment of the facts was proper and whether their e valuation
of those facts was unbiased and objective.
7.3.5.1.1 Treatment of the mark-up in the Preliminary Determination
7.64. The Preliminary Determination indicates that "adjustments for differences in … commissions
have been made where applicable and justified". 220 Such adjustments were considered to reflect
"differences affecting prices and price comparability" and were therefore intended to "ensur[e] a
fair comparison between the normal value and export price". Beyond this, the Preliminary
Determination does not elabor ate upon the reasons or evidence relied upon for making such
adjustments. However, the company -specific disclosure reveals t hat the adjustment for
PT Musim Mas was made in respect of the "commission (mark -up) for ICOFS", which we
understand to be a referen ce to the "ICOF Margin" described in [***] the Sale and Purchase
Agreement between PT Musim Mas and ICOF -S.221 The disclosure also reveals that the EU
authorities did not consider a corresponding adjustment appropriate in respect of domestic sales
since [***222] We understand this to be the reason the EU authorities' considered the mark -up

215 Appellate Body Report, EC – Fasteners (China), para. 488 (quoting Panel Report, EC – Tube or Pipe
Fittings, para. 7.158). (fn omitted)
216 Appellate Body Report, EC – Fasteners (China), para. 488.
217 This is, in part, the corollary of the responsibility of the investigating authority under Article 2.4 to
ensure that the comparison is "fair" and that adjustments are only made for factors that are demonstrated to
be differences affecting price comparability. (See Appellate Body Reports, US – Hot-Rolled Steel, para. 178;
and EC – Fasteners (China) (Article 21.5 – China), para. 5.163; and Panel Report, Argentina – Ceramic Tiles,
paras. 6.115-6.117).
218 We reiterate that we use the terms "mark-up" and "commission" as terms of convenience without
prejudice to our analysis of parties' arguments concerning the nature and existence of such a "mark-up". We
note that the EU authorities used the term "commission" and the term "mark-up" to denote the amount
referred to in the Sale and Purchase Agreement between ICOF-S and PT Musim Mas as the ICOF Margin. (See
Final Determination, (Exhibit IDN-4), recital 31; and Revised Determination, (Exhibit IDN-5), recital 31).
219 See Preliminary Determination, (Exhibit IDN-3), recital 38; Final Determination, (Exhibit IDN-4),
recital 31; Revised Determination, (Exhibit IDN-5), recital 26; and Annex 2 to the Provisional Company-Specific
Disclosure to PT Musim Mas, Calculation of Dumping Margin, (Exhibit IDN-33) (BCI), pp. 3 and 4.
220 Preliminary Determination, (Exhibit IDN-3), recital 38.
221 Annex 2 to the Provisional Company-Specific Disclosure to PT Musim Mas, Calculation of Dumping
Margin, (Exhibit IDN-33) (BCI), p. 4.
222 [***]

paid to ICOF -S to represent a "difference" between domestic sa les and exports to the
European Union.223
7.65. Our understanding on these points is corroborated by the minutes prepar ed by ICOF-S and
PT Musim Mas during their respective verification visits submitted by Indonesia as evidence in this
dispute.224 In particular, these minutes indicate that the EU authorities obtained a copy of the Sale
and Purchase Agreement between PT Musim Mas and ICOF -S during the verification visits, and
appear to have enquired into the mark -up provided for in that agreement and whether it was also
paid in respect of domestic sales. 225 According to these minutes, the EU authorities were informed
that a marg in of [***] to 5% applied to sales of fatty alcohols made through ICOF -S, and that
although ICOF -S was not paid a mark -up for PT Musim Mas' domestic sales, it nonetheless
operated as the sales and marketing arm for PT Musim Mas' domestic sales. 226 However, these
minutes also show that the EU authorities expressed doubts over the alleged involvement of
ICOF-S in domestic sales, noting the absence of any evidence documenting such involvement.227
7.3.5.1.2 Treatment of the mark-up in the Final Determination
7.66. In response to the adjustment for a commission in the Prel iminary Determination,
PT Musim Mas argued before the EU authorities that they had "wrongly made a provisional
downward adjustment to the export price for difference in commission in contravention with
Article 2(10)(i) [of the] Basic Regulation" because they "failed to carry out a reasoned assessment
of the functions of ICOF S and PTMM to ascertain whether they are a single economic entity" and
"failed to conclude that PT MM and ICOF S are in fact in substance one s ingle economic entity".228
Further, even accepting the downward adjustment to the export price for the alleged differences in
commissions, the EU authorities "failed to make a corresponding level of trade adjustment to the
normal value" because "ICOF S carri es out exactly the same functions for domestic sales as for
export sales".229
7.67. PT Musim Mas thus argued on the basis of the criteria set out in the European Union's own
Basic Anti -Dumping Regulation and the relevant case law of the Court of Justice of the
European Union that the EU authorities had not provided sufficient justification for the downward
adjustment.230 In particular, PT Musim Mas contended that ICOF -S and PT Musim Mas form a
"single economic entity" because ICOF-S is "merely the sales department of PTMM", which, in turn,
suggested that no adjustment should have been made.231
7.68. In the Final Determination, the EU authorities responded to PT Musim Mas' arguments in
this regard and provided further explanation of why they considered that the adjustment was
warranted. In particular, the EU authorities rejected the argument that no adjustment should have
been made due to the existence of a single economic entity, concluding instead that
ICOF-S performs "functions which are similar to those of an agent working on a commission
basis".232 The EU authorities based this conclusion on the "commission mentioned in a contract
covering export sales only", as well as on the fact that "domestic sales, as well as some export
sales to third countries, are invoiced directly b y [PT Musim Mas] in Indonesia" in contrast to the

223 In particular, this conclusion was reached in response to PT Musim Mas's claim that there was no
difference in respect of ICOF-S' involvement in its sales as between domestic and export sales. (See Excerpt
from PT Musim Mas' questionnaire response, (Exhibit IDN-22) (BCI), pp. 43 and 44).
224 These are documents authored by the interested parties but not placed on the record of the
anti-dumping investigation at issue.
225 PT Musim Mas Minutes Inspection Visit Medan, 25 November 2010, (Exhibit IDN-27) (BCI), p. 9.
226 PT Musim Mas Minutes Inspection Visit Medan, 25 November 2010, (Exhibit IDN-27) (BCI), p. 9.
227 PT Musim Mas Minutes Inspection Visit Medan, 25 November 2010, (Exhibit IDN-27) (BCI), pp. 9, 13,
and 15.
228 PT Musim Mas' Comments on the Preliminary Determination, 10 June 2011, (Exhibit IDN-34) (BCI),
pp. 3 and 4.
229 PT Musim Mas' Comments on the Preliminary Determination, 10 June 2011, (Exhibit IDN-34) (BCI),
p. 19.
230 PT Musim Mas' Comments on the Preliminary Determination, 10 June 2011, (Exhibit IDN-34) (BCI),
pp. 14 and 15.
231 PT Musim Mas' Comments on the Preliminary Determination, 10 June 2011, (Exhibit IDN-34) (BCI),
p. 14.
232 Final Determination, (Exhibit IDN-4), recitals 31-33.

"specific commission" received by ICOF -S for sales it handles on behalf of PT Musim Mas, and the
fact that ICOF-S also sells products manufactured by unrelated producers.233
7.69. The EU authorities also rejected t he claim that ICOF -S "coordinate[s] domestic sales" and
that therefore a concomitant adjustment should be made to the normal value, citing the Sale and
Purchase Agreement between PT Musim Mas and ICOF -S which "only covers export sales" and the
fact that "domestic sales are invoiced by [PT Musim Mas]".234 The EU authorities considered further
that the direct sales made by PT Musim Mas were "structural" and "permanent", as opposed to
being an anomaly.235
7.3.5.1.3 Treatment of the mark-up in the Revised Determination
7.70. In the Revised Determination, the EU authorities elaborated fu rther upon their rebuttal of
PT Musim Mas' claim that no adjustment should have been made due to the existence of a single
economic entity between PT Musim Mas and ICOF -S. This elab oration flowed fro m both the
EU authorities' differentiation between Ecogreen and PT Musim Mas, as well as the related nuances
in judicial developments on the significance of the existence of a "single economic entity" in the
municipal law of the European Union. In particular, the EU authorities considered that:
The factual circumstances for Ecogreen are similar to those of Interpipe NTRP VAT in
respect of the adjustment made pursuant to Article 2(10)(i) of the Basic Regulation, in
particular the following factors in combin ation: volume of direct sales to third
countries of less than 8 % (1-5%) of all export sales; existence of common
ownership/control of the trader and the exporting producer; the nature of functions of
the trader and the exporting producer … .236
By contrast, the EU authorities considered in respect of PT Musim Mas that:

There are a number of differences in the circumst ances of [Ecogreen and
PT Musim Mas], in particular the following in combination: the level of direct export
sales made by the producer; the s ignificance of the trader's activities and functions
concerning products sourced from non-related companies; the existence of a contract
between the trader and producer, which provided that the trader was to receive a
commission for the export sales.237
7.71. The EU authorities' criteria for rebutting PT Musim Mas' argument were "whether the
functions of a trader are not those of an internal sales department but comparable to those of an
agent working on a commission basis", and whether there was a difference in co mmissions paid in
respect of the sales under consideration. 238 In this connection, the E U authorities again rejected
PT Musim Mas' assertions that "it has no marketing and sales division" and that the "functions of
marketing and sales were carried out by [ICOF-S]", instead concluding that "given the level of
direct export sales, it can only be concluded that PTMM's export sales are performed not only from
[ICOF-S], but also from Indonesia". 239 The EU authorities also relied on the fact that
ICOF-S' "overall activities were based to a significant extent on supplies originating from unrelated
companies", and that "the very name and the modalities of the agreement [between
PT Musim Mas and ICOF -S] justify the finding that the contract was intended to govern the
relationship between PT MM and the trader and was not limited to the transfer pricing or tax
issues".240

233 Final Determination, (Exhibit IDN-4), recitals 31-33.
234 Final Determination, (Exhibit IDN-4), recital 35.
235 Final Determination, (Exhibit IDN-4), recital 33.
236 Revised Determination, (Exhibit IDN-5), recital 5.
237 Revised Determination, (Exhibit IDN-5), recital 12.
238 Revised Determination, (Exhibit IDN-5), recitals 24-32.
239 Revised Determination, (Exhibit IDN-5), recitals 24 and 27.
240 Revised Determination, (Exhibit IDN-5), recitals 29-32.

7.3.5.1.4 Analysis of the EU authorities' determination
7.72. In view of the foregoing review of relevant aspects of the EU authorities' explanations, we
understand that t hey arrived at the conclusion that the factor at issue constituted a difference
which affects price comparability on the basis of two factual findings. First, the EU authorities
made a factual finding that there was a mark -up linked exclusively to export s ales. Second, the
EU authorities made the factual finding that ICOF -S had functions which were similar to those of
an agent working on a commission basis, as opposed to operating as PT Musim Mas' internal sales
department. Our review of the EU authorities' explanations follows this basic two-part structure. In
reviewing these factual findings, we recall that we are not necessarily limited to the elements of
evidence expressly relied upon by the investigating authority in its establishment and evaluation of
the facts.241 Rather, we may also take into consideration other elements of evidence that were on
the record and that are connected to the explanation provided by the investigating authority in its
determination.
7.3.5.1.4.1 The existence of a mark -up linked to export s ales only that affects prices
and price comparability
7.73. The EU authorities' explanations relied principally upon the Sale and Purchase Agreement
between PT Musim Mas and ICOF -S to determine the existence of a mark -up on sales of the
product at issue to the E uropean Union. Th is agreement 242 provides for a "Transaction Price"
between ICOF-S and PT Musim Mas based on the following formula:

The "Rebased Final Price" refers, in relevant part 243, to the final price paid by the buyer of the
product. The "ICOF Marg in" refers to either [***] or 5% of the "Rebased Final Price" depending
on [***244]
7.74. Pursuant to the Sale and Purchase Agreement, [***245 246 247 248]
7.75. These elements of the Sale and Purchase Agreement support the conclusion that the
mark-up paid to ICOF -S is a factor that impacts the price of the product under consideration,
which we recall can be one step in determining whether a given factor constitutes a difference
which affects price comparability under Article 2.4.249 In particular, it appears to represent a
discrete, numerical portion of the price that reflects payment for certain "functions, obligations and
risks" – and their associated expenses – assumed by ICOF -S in respect of the product under
consideration. This understanding comports with PT Musim Mas' questionnaire response, in which
PT Musim Mas stated that "ICOF Singapore inter alia assumes the financing, trading and customer
default risk", and in which PT Musim Mas framed the "ICOF Margin " as "the value of the sales
service rendered from ICOF to PT Musim Mas" and "the service fee ICOF Singapore receives for its
sales services". 250 This corroborates the provisions of the Sale and Purchase Agreement that

241 See above, para. 7.8.
242 We note that there are two contracts between PT Musim Mas and ICOF-S on the record: Sale and
Purchase Agreement between PT Musim Mas and ICOF-S (1 January 2009), (Exhibit IDN-24) (BCI); and Sale
and Purchase Agreement between PT Musim Mas and ICOF-S (1 January 2010), (Exhibit IDN-25) (BCI). In all
relevant aspects, these contracts are substantially the same. For expediency, therefore, we refer primarily to
the 2009 Sale and Purchase Agreement between PT Musim Mas and ICOF-S, while cognisant that the same
considerations apply with respect to the 2010 Sale and Purchase Agreement between PT Musim Mas and
ICOF-S.
243 Sale and Purchase Agreement between PT Musim Mas and ICOF-S (1 January 2009), (Exhibit
IDN-24) (BCI), Article 3.1(a). [***]
244 [***]
245 [***]
246 [***]
247 [***]
248 [***]
249 See above, para. 7.58.
250 Attachment D-1.1 to PT Musim Mas's questionnaire response, (Exhibit IDN-21) (BCI), p. 2; and
Excerpt from PT Musim Mas' questionnaire response, (Exhibit IDN-22) (BCI), pp. 43 and 44. We recognize that
these statements were made in the context of arguing for an identical adjustment to be made for domestic
sales.

suggest the mark -up is a component of the price of sales made via ICOF -S, reflecting certain
functions, obligations and risks – and their associated expenses – assumed by ICOF-S with respect
to those sales. The prices that are compared are impacted because the expense s linked to these
functions, obligations and risks must be recovered.
7.76. During the investigation , PT Musim Mas argued against the EU authorities' reliance on the
Sale and Purchase Agreement between PT Musim Mas and ICOF -S as the basis for making a
downward adjustment for the mark -up paid to ICOF -S on exports to the European Union 251,
arguing that it was, in reality, a master agreement to regulate transfer prices between related
entities. In other words, the function of the Sale and Purchase Agreement was to comply with tax
rules on matters related to transfer pricing. 252 In that r egard, PT Musim Mas drew the
EU authorities' attention to, inter alia, OECD guidelines on transfer pricing. 253 For PT Musim Mas,
this characteristic of the Sale and Purchase Agreement suggested that ICOF-S acted as a sales and
marketing department for PT Musim Mas, rather than as a trader or agent.254
7.77. The EU authorities responded to this argument, noting that the use of the Sale and
Purchase Agreement as a tool for complying with tax guidelines and its use as a tool to pay for
"international and marketing sales activities" are not mut ually exclusive.255 On the contrary, the
EU authorities considered that the very terms of the Sale and Purchase Agreement suggested that
it was not limited to transfer pricing or tax issues. 256 This was not, in our view, an unreasonable
conclusion. The OECD gu idelines themselves describe transfer prices not only as "significant for …
taxpayers and tax administrations because they determine in large part the income and expenses,
and therefore taxable profits, of associated enterprises in different tax jurisdicti ons", but
additionally as "the prices at which an enterprise transfers physical goods and intangible property
or provides services to associated enterprises". 257 The purpose of enacting transfer pricing
agreements in accordance with the OECD guidelines is to ensure that "the arm's length principle
should govern the evaluation of transfer prices among associated enterprises". 258 Thus, the
characterisation of the Sale and Purchase Agreement between PT Musim Mas and ICOF -S as a
transfer pricing agreement does not negate the understanding that it reflects payments for a
service provided by ICOF-S to PT Musim Mas and the associated transfer of title to ICOF -S for the
products under consideration. Indeed, as mentioned above, this was the understanding implied by
PT Musim Mas' questionnaire response.259
7.78. PT Musim Mas also referred to certain terms of the Sale and Purchase Agreement –
including ICOF-S' assumption of financing, trading, and customer default risk – as evidence that
ICOF-S and PT Musim Mas formed a single econ omic entity, and that therefore no adjustment
should be made.260 We recall in this regard that the Sale and Purchase Agreement states [***].261
We derive from this that the pricing component represented by the mark -up is intended to reflect

251 See PT Musim Mas, "Impact of the Interpipe judgement on the fatty alcohol anti-dumping
investigation (AD563), PTMM situation", presentation at the hearing at DG Trade, 16 August 2012
(PT Musim Mas presentation), (Exhibit IDN-26) (BCI), p. 20; and Summary of the meeting between
PT Musim Mas and the European Commission related to case AD563 Fatty alcohols before the EU Hearing
Officer, 4 October 2012, (Exhibit IDN-46) (BCI), p. 7.
252 Summary of the meeting between PT Musim Mas and the European Commission related to case
AD563 Fatty alcohols before the EU Hearing Officer, 4 October 2012, (Exhibit IDN-46) (BCI), p. 5.
253 See PT Musim Mas presentation, (Exhibit IDN-26) (BCI), p. 17; and Summary of the meeting
between PT Musim Mas and the European Commission related to case AD563 Fatty alcohols before the EU
Hearing Officer, 4 October 2012, (Exhibit IDN-46) (BCI), pp. 5-7.
254 See PT Musim Mas presentation, (Exhibit IDN-26) (BCI), pp. 17-20; and Summary of the meeting
between PT Musim Mas and the European Commission related to case AD563 Fatty alcohols before the EU
Hearing Officer, 4 October 2012, (Exhibit IDN-46) (BCI), pp. 5-7.
255 Revised Determination, (Exhibit IDN-5), recitals 30 and 31.
256 Revised Determination, (Exhibit IDN-5), recital 31.
257 OECD, OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations
(22 July 2010), (Exhibit IDN-28), p. 19.
258 OECD, OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations
(22 July 2010), (Exhibit IDN-28), p. 36.
259 Attachment D-1.1 to PT Musim Mas's questionnaire response, (Exhibit IDN -21) (BCI), p. 2; Excerpt
from PT Musim Mas' questionnaire response, (Exhibit IDN-22) (BCI), pp. 43 and 44.
260 See PT Musim Mas' Comments on the Preliminary Determination, 10 June 2011, (Exhibit IDN-34)
(BCI), p. 13; and PT Musim Mas presentation, (Exhibit IDN-26) (BCI), p. 8.
261 Sale and Purchase Agreement between PT Musim Mas and ICOF -S (1 January 2009),
(Exhibit IDN-24) (BCI), preambular recital (E). (emphasis added)

the contractual fun ctions, obligations, and risks assumed by ICOF -S, including those terms that
could be described as [***] The terms of the Sale and Purchase Agreement therefore suggest to
us that something of value with an associated expense was transferred between PT Musi m Mas
and ICOF-S pertaining to the product under consideration, which was reflected in its resale price to
independent buyers. These terms do not contradict the understanding that the mark -up is an
expense tied only to relevant export sales.
7.79. In our view, t herefore, an unbiased and objective investigating authority could have found
that the mark -up represents a factor that impacts the price of the compared transactions . The
EU authorities' explanation, which relied on the terms of the Sale and Purchase Agree ment
between PT Musim Mas and ICOF -S and the factual understanding that ICOF -S was remunerated
for a service performed on sales for which the mark -up was paid, provided sufficient support for
this conclusion.
7.80. We now turn to the EU authorities' evidentiary basis for determining that the mark -up
represented a "difference" between the sales to be compared, namely, that it was linked to export
sales only . In particular, the EU authorities noted that [***262] that the Sale and Purc hase
Agreement between PT Musim Mas and ICOF -S covered export sales only 263; and that PT Musim
Mas invoiced domestic sales directly. 264 We understand the EU authorities to have inferred from
this evidence that ICOF -S was not involved in domestic sales, and that its involvement in export
sales to the European Union represented an additional expense as compared with the normal
value.265
7.81. In contrast, PT Musim Mas argued that ICOF -S – as PT Musim Mas' internal sales
department – was involved in all of PT Musim Mas' sales to the same degree. In prac tical terms,
therefore, the value of the sales service reflected in the mark -up paid to ICOF -S was purportedly
applicable to both domestic and export sales in the same amount.266 PT Musim Mas thus submitted
to the EU authorities that, should they make a down ward adjustment to the export price for
ICOF-S' SG&A and profit, the same adjustment should also be made to the normal value.267 Since
PT Musim Mas' argument in this regard was premised on its assertion that it does not have an
active sales department and th at ICOF-S undertakes the sales and merchandising work for all of
PT Musim Mas' sales of the product under consideration (including the domestic and export sales
that PT Musim Mas invoices directly) 268, the EU authorities appear to have solicited evidence to
support this assertion. 269 They were provided with a copy of an email from an ICOF -S staff
member to a PT Musim Mas staff member with a [***270]
7.82. The EU authorities rejected the assertion that PT Musim Mas had no active sales department
and that ICOF-S coordinated all of PT Musim Mas' sales (both domestic and export). 271 The logical
corollary of this is that, since PT Musim Mas made direct sales without the apparent involvement of
ICOF-S, it therefore possessed its own sales and marketing capacity. We do not consi der it
unreasonable for the EU authorities to have concluded that, since [***] ICOF-S was not involved
in domestic sales.
7.83. We also do not consider the EU authorities' reliance on the Sale and Purchase Agreement
between PT Musim Mas and ICOF -S in its reject ion of the assertion that PT Musim Mas had no

262 [***]
263 Final Determination, (Exhibit IDN-4), recitals 31 and 35.
264 Final Determination, (Exhibit IDN-4), recital 35.
265 Final Determination, (Exhibit IDN-4), recital 35; and Revised Determination, (Exhibit IDN-5),
recitals 24 and 27.
266 Excerpt from PT Musim Mas' questionnaire response, (Exhibit IDN -22) (BCI) , pp. 4 3 and 4 4.
According to PT Musim Mas, ICOF -S incurred the same costs for domestic sales, and the cost of having an
effective marketing arm for both domestic and export sales was absorbed within ICOF-S.
267 Excerpt from PT Musim Mas' questionnaire response, (Exhibit IDN-22) (BCI), pp. 43 and 44; and
Final Determination, (Exhibit IDN-4), recital 35.
268 See, e.g. Excerpt from PT Musim Mas' questionnaire response, (Exhibit IDN-22) (BCI), p. 43.
269 PT Musim Mas Minutes Inspection Visit Medan, 25 November 2010, (Exhibit IDN-27) (BCI), pp. 9, 13,
and 15.
270 [***]
271 See Final Determination, (Exhibit IDN-4), recitals 31 and 33-35; and Revised Determination, (Exhibit
IDN-5), recitals 24 and 27.

active sales department and that ICOF -S coordinated all of PT Musim Mas' sales (both domestic
and export) to be unreasonable. Various elements of the Sale and Purchase Agreement indicate
that it is intended to cover exports only. 272 [***273 274 275] This undermines PT Musim Mas'
assertion that ICOF -S is involved in domestic sales and marketing of the product concerned
without any remuneration or documentary records of such involvement.
7.84. Further, we do not consider it unr easonable for the EU autho rities to have inferred from
PT Musim Mas' direct invoicing of domestic sales that PT Musim Mas possessed its own sales and
marketing capacity. 276 Such an understanding is corrobo rated by the charts in
PT Musim Mas' questionnaire re sponse indicating that it had a marketing branch 277, as well as
entries in its P&L for [***278] suggests that PT Musim Mas incurred internally the same type of
costs for both categories of sales. 279 From this, it could be reasonably inferred that PT Musim Mas
incurred the same costs for selling and marketing expenses for both its direct sales to domestic
customers and its sales (or transfers) to ICOF -S. It follows that the pricing component referred to
as the "ICOF Margin" in the Sale and Purchase Agreement between PT Musim Mas and ICOF -S
could reasonably be understood to reflect an additional cost, for which there is no equivalent on
the domestic side, thereby giving rise to a difference for which an adjustment was required.
7.85. We understand the only piece of eviden ce indicating any involvement by ICOF -S in
PT Musim Mas' domestic sales was the document submitted to th e EU authorities as
"Attachment 18" pertaining to an email. 280 In our view, it was not unreasonable for the
EU authorities to ascribe limited probative va lue to this document. The document does not reveal
the nature, extent, or scope of ICOF-S' alleged involvement in domestic sales generally. [***] We
cannot see how this demonstrates that ICOF-S undertakes all sales, marketing, and negotiating
work on behalf of PT Musim Mas for domestic sales, nor how this demonstrates that PT Musim Mas
has no active sales department. This is especially so when considered against the evidence of
[***] in PT Musim Mas' questionnaire response, and entries for [***]
7.86. Thus, in ou r view, the ability of PT Musim Mas to discharge its own sales and marketing
function in respect of domestic sales together with the absence of probative evidence that ICOF -S
was involved in domestic sales militates against the view that ICOF -S undertook a ll sales and
marketing work for PT Musim Mas on domestic sales. It follows that the pricing component
referred to as the "ICOF Margin" in the Sale and Purchase Agreement between PT Musim Mas and
ICOF-S could reasonably be understood to reflect an additiona l cost, for which there is no
equivalent on the domestic side , thereby giving rise to a difference for which an adjustment was
required.
7.87. Finally, the fact th at, in its cost information in its questionnaire responses, PT Musim Mas
[***] and that the EU authorities therefore did not include any such costs in the normal value
calculation supports the view that the mark-up did not relate to domestic sales.281

272 Indonesia does not argue before the Panel that the Sale and Purchase Agreement between
PT Musim Mas and ICOF-S is intended to cover anything other than export sales.
273 [***]
274 [***]
275 [***]
276 See Final Determination (Exhibit IDN-4), recitals 31 and 35 and Revised Determination,
(Exhibit IDN-5), recitals 24 and 27.
277 PT Musim Mas Business Organization Structure, (Exhibit EU-5) (BCI). We note that Indonesia argued
at the first substantive meeting that [***] suggests that PT Musim Mas did not, in fact, possess its own
"Marketing" department. We are not convinced by this argument. The chart referred to by Indonesia in that
regard pertains specifically to [***] This reading accords with the chart in Exhibit EU-5, which clearly indicates
[***] (PT Musim Mas, Organization Chart- Fatty Alcohol Division, (Exhibit EU-6) (BCI)).
278 [***]
279 Excel file "PTMM definitive disclosure.xls", (Exhibit EU-12) (BCI), rows 19 and 20/columns F and G

280 Verification Exhibit PTMM-18, (Exhibit IDN-47) (BCI).
281 See Indonesia's response to Panel question Nos. 15(b), paras. 1.75-1.78, and 15(c), para. 1.79; and
Annex 2 to the Provisional Company-Specific Disclosure to PT Musim Mas, Calculation of Dumping Margin,
(Exhibit IDN-33) (BCI), p. 4. Even if, as argued by Indonesia, ICOF-S provided domestic sales services without
remuneration, there would still be costs associated with those services that would have to be taken into
account in the normal value calculation.

7.88. On the basis of the foregoing, we consider that the EU authorities' factual finding of a
mark-up and associated expenses linked to export sales only was proper and provided a sufficient
basis for concluding that the factor at issue constituted a difference which affects price
comparability. In particular, the EU authorities' explanation reveals an evidentiar y basis for
considering that the mark -up was a component of the price of exports to the European Union
representing the payment for a service (i.e. for assuming certain risks, obligations, and functions),
and that there was no concomitant pricing or expense component on the domestic side. We recall,
in this regard, our view that the existence of a feature or characteristic of the prices to be
compared that is linked exclusively either to domestic sales or to relevant export sales, or to both
sides of the co mparison but in different amounts, can demonstrate the existence of a difference
which affects price comparability under Article 2.4.282
7.3.5.1.4.2 The determination that ICOF -S has functions similar to an agent working on
a commission basis
7.89. We now turn to the EU autho rities' factual finding in the Final Determination that ICOF -S
had functions similar to those of a trader working on a commissi on basis. We recall that the
EU authorities based this determination on : (a) the di rect sales made by PT Musim Mas;
(b) ICOF-S' trade in products of unrelated entities; and (c) the terms of the Sale and Purchase
Agreement between ICOF-S and PT Musim Mas.
7.90. We recall that this factual finding was reached, at first instance, in the Final Determination
and in response to PT Musim Mas' attempt to rebut the EU authorities' adjustment for the mark-up
in the Preliminary Determination. In particular, this factual f inding was an element of the
EU authorities' rejection of PT Musim Mas' argument that it formed a "single economic entity" with
ICOF-S because ICOF -S is "merely the sales department of PT Musim Mas", which meant,
according to PT Musim Mas, that no adjustment should have been made.283
7.91. Following the EU authorities' factual finding that ICOF -S had functions similar to an agent
working on a commission basis in the Final Determination, PT M usim Mas challenged both the
EU authorities' "look[ing] at the functions carried out by ICOF" since "ICOF -S is not a trader or
agent but a sales and marketing department", as well as the evidence they relie d upon in
assessing these functions, namely, the direct sales made by PT Musim Mas, ICOF -S' trade in
products of unrelated entities, and the terms of the Sale and Purchase Agreement between ICOF-S
and PT Musim Mas.284 Indonesia's arguments on these aspects o f the EU authorities' explanation
mirror, in broad terms, PT Musim Mas' arguments during the investigation in this regard.285
7.92. In respect of the EU authorities' reliance on the functions carried out by ICOF -S, we recall
that the allowance for a commission was made on the basis of Article 2(10)(i) of the Basic
Anti-Dumping Regulation. This provides that "[t]he term 'commissions' shall be understood to
include the mark-up received by a trader of the product or the like product if the functions of such
a trader are similar to those of an agent working on a commission basis." We recall that Article 2.4
does not prescribe a specific methodology for how to achieve a "fair" comparison. 286 In our view,
so long as an investigating authority's method for identifying "diffe rences which affect price

282 See above, para. 7.58.
283 See PT Musim Mas' Comments on the Preliminary Determination, 10 June 2011, (Exhibit IDN-34)
(BCI), pp. 14 and 15.
284 Summary of the meeting between PT Musim Mas and the European Commission related to case
AD563 Fatty alcohols before the EU Hearing Officer, 4 October 2012 , (Exhibit IDN -46) (BCI), pp. 1 -7; and
PT Musim Mas presentation, (Exhibit IDN-26) (BCI), pp. 8-20.
285 For the "functions" criterion, see Indonesia's first written submission, paras. 4.118 and 4.133-4.151,
and Summary of the meeting between PT Musim Mas and the European Commission related to case AD563
Fatty alcohols before the EU Hearing Officer, 4 October 2012, (Exhibit IDN-46) (BCI), pp. 2-7; for
PT Musim Mas' direct sales, see Indonesia's first written submission, paras. 4.182-4.186, and PT Musim Mas
presentation, (Exhibit IDN-26) (BCI), pp. 6-10; for ICOF-S' trade in products of unrelated entities, see
Indonesia's first written submission, paras. 4.234-4.256, and PT Musim Mas presentation,
(Exhibit IDN-26) (BCI), pp. 14-16; and for the reliance on the terms of the Sale and Purchase Agreement, see
Indonesia's first written submission, paras. 4.187-4.232.
286 See, e.g. Appellate Body Reports, US – Zeroing (EC), para. 146; and US – Softwood Lumber V,
para. 175; and Panel Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 7.78; EC – Fasteners
Softwood Lumber V, para. 7.167.

comparability" is capable of comporting with the legal standard we have set out above for
Article 2.4 of the Anti -Dumping Agreement, the re is no basis to reject the
EU authorities' approach. With that in mind, and within the param eters of the particular
investigation at issue in these proceedings, we do not consider that an assessment of whether the
"functions of such a trader are similar to those of an agent working on a commission basis" is
necessarily inconsistent with the legal standard under Article 2.4 for determining whether an
alleged factor affects price comparability. Rather, in our view, the performance of "functions …
similar to those of an agent working on a commission basis" could suggest that the entity in
question undertakes a sales and marketing service for the related producer, and that the mark -up
in question is intended to remunerate that entity for the performance of that service. Thus, we do
not consider that the consideration of this criterion by the EU authori ties in the circumstances of
the present case results, in and of itself, in a violation of Article 2.4 of th e
Anti-Dumping Agreement. Further, we recall that this aspect of the EU authorities' explanation was
just one of a number of elements leading to the ir overall conclusion concerning the mark -up at
issue, which also encompassed the factual findings and evidence canvassed in the previous
section, as well as additional evidence in support of this aspect, to which we now turn.
7.93. In respect of the EU authorit ies' reliance on direct sales made by PT Musim Mas, we recall
that the charts in PT Musim Mas' questionnaire response indicate that [***], and that PT Musim
Mas' P&L likewise indicates that [***287] PT Musim Mas and Indonesia have explained that the
intervention of PT Musim Mas in sales of the product concerned was purely formal, but no
probative record evidence has been brought to our attention in support of this explanation. Thus, it
was not improper to conclude from the fact PT Musim Mas performs "direct" sales to certain export
and domestic customers that it possessed its own sales and marketing capacity, and that ICOF -S
is therefore not the "internal sales department" of PT Musim Mas.288 Rather, as we have concluded
above, it was not unreasonable for the EU authorities to conclude that ICOF -S' involvement in
sales to the European Union and the consequent mark -up represented the payment for a service
(i.e. for assuming certain risks, obligations, and functions), for which there was no concomitant
pricing comp onent on the domestic side. PT Musim Mas' direct sales to domestic and export
customers supports this conclusion.
7.94. Regarding the EU authorities' reliance on the fact that a substantial proportion of
ICOF-S' trade is in products of unrelated entities, we do not consider it implausible to infer from
this that ICOF -S was not dependent to any significant degree on PT Musim Mas for its revenue
stream or the operation of its business. 289 This, in turn, undermines the assertion that ICOF -S is
"merely the internal sal es department" of PT Musim Mas. In that regard, we do not consider it
unreasonable for the EU authorities to have taken this evidence into account in support of their
conclusion that the mark-up was a difference which affects price comparability.
7.95. The EU authorities' explanation for finding that ICOF -S has "functions … similar to those of
an agent working on a commission basis" also rested on the Sale and Purchase Agreement
between PT Musim Mas and ICOF -S. PT Musim Mas submitted, in this regard, that "the ag reement
is not a true agency agreement but a master agreement to regula te transfer prices between
PTMM Group companies located in different countries" and that the EU authorities "failed to
properly understand the purpose and effect of the agreement betwee n PTMM and ICOF S was to
regulate transfer prices between related companies". 290 Indonesia makes substantially the same
argument before us in these proceedings. 291 In our view, it was not unreasonable for the
EU authorities to have relied on the terms of the Sale and Purchase Agreement in their assessment
of "whether the functions of a trader are not those of an internal sales department but comparable
to those of an agent working on a commission basis". 292 The Sale and Purchase Agreement makes

287 [***]
288 Revised Determination, (Exhibit IDN-5), recitals 24 and 27. See also Final Determination,
(Exhibit IDN-4), recitals 33 and 35.
289 In particular, the European Union pointed to a domestic court decision indicating that 50% of
ICOF-S' USD1.4 billion in total sales in 2009 related to products from unrelated producers. (See General Court,
Case T-26/12, PT Musim Mas v Council (25 June 2015), (Exhibit EU-4), para. 54).
290 Summary of the meeting between PT Musim Mas and the European Commission related to case
AD563 Fatty alcohols before the EU Hearing Officer, 4 October 2012, (Exhibit IDN-46) (BCI), pp. 6 and 10.
291 See Indonesia's first written submission, paras. 4.190-4.232.

explicit reference to PT Musim Mas [***293] These aspects suggest that ICOF -S has a functional
capacity to provide certain services as an international trader that is lacking in PT Musim Mas. 294
Further, the Sale and Purchase Agreement stipulates that the services provided by I COF-S –
namely, the assumption of certain "functions, obligations, and risks" – are to be remunerated on
individual sales through the "ICOF Margin", i.e. the mark -up.295 Together, these aspects plausibly
suggest that ICOF-S performs "functions … similar to t hose of an agent working on a commission
basis". Other aspects of the Sale and Purchase Agreement also militate against the inference that
ICOF-S operates as the "internal sales department" of PT Musim Mas. For instance, whereas PT
Musim Mas engages in dom estic sales, the Sale and Purchase Agreement explicitly refers only to
export sales and stipulates that it "constitutes the entire agreement and understanding between
the Parties in respect of its subject matter". 296 Moreover, the provision that "[n]othing i n this
Agreement shall create any partnership, joint venture or relationship of principal and agent
between the Parties" contradicts the characterization of ICOF -S as PT Musim Mas' closely -
intertwined internal sales department.297
7.96. On the basis of the foregoi ng, we consider that the EU authorities did not act inconsistently
with Article 2.4 of the Anti -Dumping Agreement by considering whether "ICOF -S had functions
similar to an agent working on a commission basis" and by reaching this factual finding on the
basis of PT Musim Mas' direct sales, ICOF -S' trade in products of unrelated entities, and the terms
of the Sale and Purchase Agreement between PT Musim Mas and ICOF -S. On the contrary, as our
review above demonstrates, these aspects of the EU authorities' ex planation corroborate and
confirm the initial factual finding on which they concluded that the factor at issue constituted a
difference affecting price comparability.
7.97. In light of the foregoing, we conclude that the EU authorities had a sufficient evidentia ry
basis – encompassing both of the factual findings and their attendant evidence as discussed in the
foregoing sections – for establishing that the mark -up was a factor that impacts the prices of the
product and that was linked exclusively to the export s ide, therefore constitut ing a difference
which affects price comparability under Article 2.4.
7.98. We now turn to the more particular arguments and evidence presented by Indonesia that
the EU authorities acted inconsistently with Article 2.4, taking into accoun t the European Union's
arguments and evidence in rebuttal.
7.3.5.2 Analysis of Indonesia's argument that the "mark -up" cannot be a difference
which affects price comparability under Article 2.4 due to the relationship between
PT Musim Mas and ICOF-S
7.99. We understand Indonesia to argue that, "typically", an internal allocation of funds within a
single economic entity (or between "closely related or intertwined" parties) which does not reflect
an actual or genuine expense and is not reflected in the producer's pricing d ecision cannot be a
difference which affects price comparability under Article 2.4 of the Anti -Dumping Agreement.298
We consider that the European Union agrees that if a difference does not affect price
comparability, no adjustment is necessary under Article 2.4.299 We also understand the parties to
agree that a component of the price of a transaction that is linked to either the export side or the

293 [***]
294 Although we concluded above that it was not unreasonable to infer that PT Musim Mas possessed its
own sales and marketing capacity, we note that it does not automatically follow that such a capacity is
sufficient to sell its product into all markets. Rather, it is not unreasonable to consider that, in respect of
accessing some markets, the assistance of certain brokers or traders might be necessary.
295 Sale and Purchase Agreement between PT Musim Mas and ICOF-S (1 January 2009),
(Exhibit IDN-24) (BCI), preambular recitals (E) and section 3.1.
296 Sale and Purchase Agreement between PT Musim Mas and ICOF-S (1 January 2009),
(Exhibit IDN-24) (BCI), section 7.1.
297 Sale and Purchase Agreement between PT Musim Mas and ICOF-S (1 January 2009),
(Exhibit IDN-24) (BCI), section 7.3.
298 Indonesia's second written submission, para. 2.8. See further Indonesia's response to Panel question
Nos. 1, para. 1.11, 10, paras. 1.48 and 1.49, and 42(ii), para. 3.5; and opening statement at the second
meeting of the Panel, para. 5. We refer to the terms "actual", "genuine", and "objective" expenses solely to
respond to Indonesia's arguments.
299 See European Union's first written submission, paras. 63 and 77.

domestic side – or to both sides but with different amounts – will ordinarily qualify as a difference
which affects price comparability under Article 2.4.300
7.100. Indonesia asserts that the " dividing line at which a monetary flow ceases to be an
objective expense and becomes an internal shifting of funds/allocation of profits without any
implication for price comparability, is what Indonesia has chosen to label as the existence of a
'single economic entity'". 301 In Indonesia's view, the criteria for determining the existence of a
single economic entity – and hence the "dividing line" – principally relate to "commonality in
ownership and operational and managerial control".302 For Indonesia, these criteria were fulfilled in
the present case by evidence of:
a. the "relationship" between PT Musim Mas and ICOF -S, namely, their common ownership
and control [***303];
b. the "fact" that ICOF -S undertook work on PT Musim Mas' domestic (and some export)
sales for no remuneration304;
c. the purchase by ICOF -S of PT Musim Mas' products for resale on risk and liability
conditions that would be "highly unusual" for an unrelated, independent trader305;
d. the nature of the written agreement between PT Musim Mas and ICOF -S as a "transfer
pricing agreement", and the appropriate inferences to be drawn in that regard306; and
e. the participation of ICOF-S staff in the onsite verifications by the EU authorities.307
7.101. For Indonesia, the EU authorities erred by either ignoring, or placing insufficient weight
and drawing incorrect inferences from, this evidence. 308 Indonesia further contends that the
EU authorities erred in their reliance on ICOF -S' trade in the products of unrelate d entities,
PT Musim Mas' direct sales without the involvement of ICOF -S, and the modalities of the Sale and
Purchase Agreement between ICOF -S and PT Musim Mas, in arr iving at the conclusion that
PT Musim Mas and ICOF -S do not form a single economic entity .309 The European Union rejects
both the alleged relevance of the existence of a "single economic entity" to making allowances
under Article 2.4310, as well as Indonesia's assertions regarding the EU authorities' consideration of
the evidence on the existence of a single economic entity between PT Musim Mas and ICOF-S.311
7.102. Our analysis follows the two -part structure of Indonesia's argument. 312 First, we address
whether the existence of a single economic entity necessarily means that the payment of a

300 For Indonesia, see: Indonesia's second written submission, para. 2.6 ("[f]actors that affect price
comparability are actual expenses that can be expected to have affected the seller's pricing decision"
(emphasis omitted)); and response to Panel question Nos. 31, paras. 1.12 and 1.13, and 1.34 ("[i]t should be
noted that … an adjustment may be appropriate either where there is no similar expense incurred in the other
market or where there is a difference in the amount of the adjustment in the two markets"), and 36,
para. 1.93. For the European Union, see: European Union's first written submission, para. 64 ("[c]ommissions
paid to trading companies for services rendered represent a direct selling expense that warrants an adjustment
if no similar expense is demonstrated to exist on the domestic, normal value side"); and opening statement at
the first meeting of the Panel, para. 17.
301 Indonesia's second written submission, paras. 2.12 and 2.24. See also Indonesia's first written
submission, paras. 4.9 and 4.71; and response to Panel question No. 42(ii), para. 3.5. See, in contrast,
European Union's opening statement at the first meeting of the Panel, paras. 11-13.
302 Indonesia's response to Panel question No. 32, para. 1.50. See also Indonesia's first written
submission, paras. 4.128-4.130, 4.155, and 4.156.
303 [***]
304 Indonesia's first written submission, paras. 4.166-4.170 and 4.184-4.186.
305 Indonesia's first written submission, paras. 4.171-4.175.
306 Indonesia's first written submission, paras. 4.187-4.233.
307 Indonesia's first written submission, paras. 4.178 and 4.179.
308 Indonesia's first written submission, paras. 4.10, 4.154, and 4.157.
309 Indonesia's first written submission, paras. 4.187-4.263.
310 European Union's first written submission, para. 28; second written submission, paras. 17 and 18.
311 European Union's first written submission, para. 29; second written submission, para. 58.
312 See Indonesia's first written submission, paras. 4.9 and 4.10.

mark-up between related entities can never affect price comparability. Second, we address
whether the EU authorities ignored certain evidence cited by Indonesia.
7.103. We are not convinced that the existence of what Indonesia denotes as a "single economic
entity"313 is dispositiv e of whether a given mark-up qualifies as a difference which affects price
comparability under Article 2.4. This is because we consider it possible that two entities could
transact for goods and services at arms -length, regardless of how closely intertwine d their control
and ownership might be. This is confirmed by the material before us on transfer pricing
agreements314, as well as relevant elements of the WTO acquis.315 Moreover, even for
non-arms-length transactions, expenses incurred in the provision of ser vices normally need to be
recovered through pricing and therefore could affect price comparability . Therefore, in our view, it
is possible that a transaction between two entities within what Indonesia denotes as a "single
economic entity" could reflect an expense that must be recovered and thus would impact price
comparability. If this expense is linked to either the export side or the domestic side of a
transaction, or to both sides but with different amounts, we would anticipate that it could be found
to be a difference which affects price comparability in a given anti -dumping investigation. Indeed,
our understanding is not inconsistent with Indonesia's argument that:
[A]djustments can only be made to the extent that they reflect actual expenses that
can b e expected to be reflected in the producer's pricing decision. Hence, to the
extent that actual expenses were incurred by paying a third (independent) party, they
will be adjusted for the corresponding amount. Similarly, to the extent that expenses
were actually incurred internally by the producer/exporter , they will also be adjusted
for.316
7.104. By this, we understand Indonesia to mean that an expense "internally incurred" – including
one incurred within a single economic entity – could potentially be the subject of an adjustment so
long as it reflects an "actual expense" that has an impact on the relevant price. Indonesia made
similar comments in respect of "where the producer/exporter uses its own trucks or uses a closely
related company to transport the goods" 317, and "where a seller has its own subsidiary/related
customs broker that provides services related to customs clearance" in which case "the adjustment
should be the actual expense, not the expense that might have been incurred under a very
different way of doing business".318 Moreover, although Indonesia asserts in the present case that
ICOF-S and PT Musim Mas form a "single economic entity", Indonesia stated that:

313 Indonesia additionally used a number of other terms to denote this concept: "the dividing line could
be labelled as a 'sufficiently close relationship' between two formally separate parties", and "[o]ne can also
envisage the label 'relationship in which two companies are closely intertwined'". (Indonesia's second written
submission, para. 2.13).
314 OECD, OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations
(22 July 2010), (Exhibit IDN-28), pp. 19 and 36.
315 In a number of disputes, panels and the Appellate Body have foreshadowed that related entities
could transact goods or services between one another (for instance, as inputs in the production of a product).
(See Appellate Body Report, US – Hot-Rolled Steel, paras. 141-143; and Panel Reports, US – Softwood
Lumber V, paras. 7.322, 7323, 7.328, and 7.329; and EC – Salmon (Norway), paras. 7.593-7.599). Further, in
the context of disciplines for determining the customs value of imported goods, Article 1.2(a) of the Customs
Valuation Agreement provides in relevant part:
In determining whether the transaction value is acceptable for the purposes of paragraph 1, the
fact that the buyer and the seller are related within the meaning of Article 15 shall not in itself be
grounds for regarding the transaction value as unacceptable. In such case the circumstances
surrounding the sale shall be examined and the transaction value shall be accepted provided that
the relationship did not influence the price.
(emphasis added)
According to Article 1.2(a), the fact the legally distinct persons are commonly owned and controlled does not in
and of itself provide a basis for disregarding the price of transactions between them. Rather, it permits the
customs administration to examine "the circumstances surrounding the sale" with a view to determining
whether "the relationship influenced the price".
316 Indonesia's response to Panel question No. 10, para. 1.48. (underlining original, italics added, fn
omitted)
317 Indonesia's response to Panel question No. 33, para. 1.55.
318 Indonesia's second written submission, para. 2.11. See also European Union's first written
submission, para. 94: we agree with the European Union that the focus should be on the function (i.e.
expense) – if any – undertaken.

ICOFS records as revenue the amount received from the unrelated customer (€ 100)
and PT Musim Mas records as revenue the amount received from ICOFS [***]. The
balance [***] remains as revenue/profit in ICOFS' financial statements, from which
actual expenses, including actual SG&A, must be deducted.319
We understand this to mean that the mark -up paid to ICOF-S in the present case was intended to
compensate, at least to some extent, for the expenses incurred by ICOF -S for its involvement in
relevant sales by PT Musim Mas. 320 Thus, even in Indonesia's own framework, a transaction
between two entities in a "single economic entity" can involve an "actual expense".321

7.105. Based on the foregoing, we do not consider the existence of what Indonesia denotes as a
"single economic entity" to be the "dividing line" between an "objective expense" and " an internal
shifting of funds/allocation of profits without any implication for price comparability", and therefore
to be dispositive of whether a given payment is a difference which affects price comparability
under Article 2.4 of the Anti -Dumping Agreement. 322 Accordingly, we do not share Indonesia's
view that transactions between related parties, such as PT Musim Mas and ICOF -S, can never
affect the price of the product at issue to a final buyer.323 For the same reasons, we cannot accept
the assertion that a payment cannot constitute a difference which affects price comparability
simply because "the economic benefit of the sale accrues to the [single economic entity] as a
whole".324 The fact that the benefit of a sale to a final buyer might accrue to an overall entity does
not negate the possibility that a given expense that is tied only to export or domestic sales (or to
both in different amounts) could be incurred within that entity, wit h the potential to affect price
comparability.
7.106. Rather, in our view, the "dividing line" between: (a) an internal allocation of funds within a
single economic entity which is not reflected in the producer's pricing decision; and (b) an expense
that is linke d to either the export side or the domestic side or to both sides but with different
amounts such that price comparability is affected, is dependent on the particular situation and
evidence before an investigating authority in a given case where the proper characterization of the
payment in question is at issue.325
7.107. We find support for our understanding in this regard in the text of Article 2.4, which we
recall refers to due allowances being made "in each case, on its merits", and that in a given
investigation, "[t]he authorities shall indicate to the parties in question what information is
necessary to ensure a fair comparison". As we have discussed above, this suggests to us that
allowances made under Article 2.4 require a case -specific analysis of the eviden ce in a given
investigation. In the absence of any textual reference in Article 2.4 to "single economic entity" or
similar concepts, we see no support for the conclusion that Article 2.4 "implicitly requires"
consideration of "single economic entity", and that its existence or not is the "dividing line"
between payments that do or do not affect price comparability.326

319 Indonesia's response to Panel question No. 35, para. 1.66. (emphasis added)
320 See also Indonesia's response to Panel question No. 35(i), para. 1.76.
321 Although Indonesia initially appeared to argue that a transaction within a single economic entity
could never reflect the incurring of an "expense" (see Indonesia's response to Panel question No. 15(a),
para. 1.71), we understand Indonesia's position to have evolved in this regard, since Indonesia expressly
recognized, in single economic entities, that "[t]he actual or genuine expenses actually incurred by the
producer/exporter … are the expenses recorded in their financial statements". (See Indonesia's response to
Panel question No. 33, para. 1.57). Further, our understanding that the existence of a "single economic entity"
does not preclude two entities from engaging in a transaction that represents an "actual expense" is supported
by Indonesia's statement at the second meeting of the Panel that "PT Musim Mas previously used an
independent trader to provide the services that are now provided by ICOFS which is the sales entity or trading
arm of the Musim Mas Group". (Indonesia's opening statement at the second meeting of the Panel, para. 12
(emphasis original)).
322 See, in contrast, Indonesia's second written submission, para. 2.11.
323 Indonesia's response to Panel question No. 2, para. 1.24.
324 Indonesia's first written submission, paras. 4.69-4.71.
325 See European Union's first written submission, para. 69.
326 Indonesia's first written submission, paras. 4.9 and 4.120; second written submission,
paras. 2.7-2.11. See also European Union's first written submission, paras. 81 and 84.

7.108. We now turn to the second part of Indonesia's argument under Article 2.4 concerning the
relationship between PT Musim Mas and ICOF -S, namely, t hat the EU authorities erred in their
consideration of certain evidence or criteria cited by Indonesia.
7.109. We recall that, in Indonesia's view, evidence pertaining to "commonality in ownership and
operational and managerial control" is "critical" to an inves tigating authority's analysis.327 We thus
begin with Indonesia's assertions concerning the common ownership and control of PT Musim Mas
and ICOF-S [***328] First, we note that no record evidence has been brought to our attention that
supports the conclusion that [***] exercise joint ownership, control, and operational management
over PT Musim Mas and ICOF -S.329 The record evidence relied on by Indonesia indicates that PT
Musim Mas and Musim Mas Holdings Pte (which owned ICOF -S in full) have [***330], and that
PT Musim Mas' shareholding consisted of [***331] This evidence does not expressly indicate
whether the respective shareholders of ICOF -S and PT Musim Mas are identical with shareholdings
of identical proportions, or whether these aspects are not identical but exh ibit a degree of overlap
(and if so, what the extent of such overlap might be). In Indonesia's own framework, the nature
and extent of overlap in this regard appear to be important to identifying whether a payment can
be said to affect price comparability. 332 Therefore, even assuming evidence of commonality in
ownership, operational management and control is "critical", the evidence before the EU
authorities did not, in our view, demonstrate the precise nature of the relationship between PT
Musim Mas and ICOF-S as alleged by Indonesia.
7.110. The arguments made by Indonesia in respect of the other evidence that it asserts were
ignored or accorded undue weight by the EU authorities largel y mirror those made by
PT Musim Mas during the investigation. 333 Based on our revie w of the EU authorities' explanation
and the record evidence, we concluded that an unbiased and objective investigating authority
could have found that ICOF-S was not involved in PT Musim Mas' domestic sales, and could have
relied upon the Sale and Purchas e Agreement between PT Musim Mas and ICOF -S in construing
the mark -up as a difference which affects price comparability under Article 2.4.334 We also
considered the EU authorities' factual finding that ICOF -S undertakes functions similar to those of
an agent working on a commission basis was not inconsistent with Article 2.4, nor were their
reliance on evidence of PT Musim Mas' direct sales, ICOF -S' trade in products of unrelated entities,
and the terms of the Sale and Purchase Agreement , an inappropriate bas is for that factual
finding.335 Since Indonesia's arguments concerning this evidence are largely the same, we see no
reason to set aside our earlier conclusions in that regard.
7.111. On the basis of the foregoing, we do not accept Indonesia's argument that for Article 2.4
of the Anti -Dumping Agreement, the existence or not of a single economic entity (as evidenced
through common control, ownership, and management) is the "dividing line" between payments
that do affect price comparability and those that do not, and that the EU authorities acted
inconsistently with Article 2.4 of the Anti -Dumping Agreement in their treatment of the evidence

327 Indonesia's response to Panel question No. 32, para. 1.50. See also Indonesia's first written
submission, paras. 4.128-4.130, 4.155, and 4.156.
328 [***]
329 See Indonesia's first written submission, fn 116; opening statement at the first meeting of the Panel,
para. 5; and response to Panel question No. 31, fn 15. The only evidence Indonesia points to in this regard is
set out in Exhibit IDN-18 and Exhibit IDN-19, neither of which pertain to the alleged [***] nature of the
ownership, control, or management of the respective companies.
330 [***]
331 [***]
332 See Indonesia's response to Panel question No. 31, para. 1.24.
333 For the evidence allegedly ignored concerning ownership and control, see Indonesia's first written
submission, paras. 4.152 -4.186, and PT Musim Mas' Comments on the Pre liminary Determination,
10 June 2011, (Exhibit IDN -34) (BCI), pp. 12 -14; for the "functions" criterion, see Indonesia's first written
submission, paras. 4.11 8 and 4.133 -4.151, and Summary of the meeting between PT Musim Mas and the
European Commission related to case AD563 Fatty alcohols before the EU Hearing Officer, 4 October 2012,
(Exhibit IDN -46) (BCI), pp. 2 -7; for PT Musim Mas' direct sales, see Indonesi a's f irst written submission,
paras. 4.182-4.186, and PT Musim Mas presentation, (Exhibit IDN-26) (BCI), pp. 6-10; for ICOF -S trade in
products of unrelated entities, see Indonesia's first written submission, paras. 4.234 -4.256, and PT Musim Mas
presentation, (Exhibit IDN-26) (BCI), pp. 14-16; and for the reliance on the terms of the Sale and Purchase
Agreement, see Indonesia's first written submission, paras. 4.187-4.232.
334 See above paras. 7.79 and 7.82.
335 See above para. 7.96.

and criteria cited by Indonesia relating to the mark-up and the relationship between PT Musim Mas
and ICOF-S.
7.3.5.3 Analysis of Indon esia's argument that the EU authorities incorrectly deducted
ICOF-S' SG&A and profit
7.112. Indonesia argues that the adjustment made by the EU authorities to PT Musim Mas' export
price created an asymmetry between the ex -factory export price and the normal value calculated
for this producer. This is because the value of the adjustment was calculated on the basis of
ICOF-S' SG&A and profit, which, according to Indonesia are necessary components of the export
price of the product under investigation. Since the EU a uthorities made no such adjustment for
SG&A and profit on the normal value side, the methodology used resulted in an unfair comparison
in violation of Article 2.4 of the Anti-Dumping Agreement.
7.3.5.3.1 Factual background
7.113. The record contains evidence on the EU authorities' method for establishing the value of
the allowance made to PT Musim Mas' export price. In particular, the EU authorities explain ed in
Annex 2 to the Preliminary Disclosure ("Calculation of dumping margin – PT MUSIM MAS") that:
For sales made by ICOFS to unrelated customers in the Union, allowance in the form
of adjustments to the export price were made for transport, insurance , handling,
loading and ancillary costs, packing , and credit, on the basis of the amounts reported
by ICOFS. … In respect of these sales, allowance in the form of an adjustment for
commission (mark -up) for ICOFS, of [***] on turnover, was also made. This
represents SG&A of [***] (excluding transport and insurance) and profit of [***],
on the basis of ICOFS-PL.336
The same method was used for indirect sales (via a related importer in the EU) of fatty alcohols to
the European Union.337 The Final Determination then describes the methodology as follows:

In respect of the adjustment pursuant to Article 2(10)(i) of the basic regulatio n, it is
considered appropriate to use a reasonable profit margin independent of the actual
profit resulting from transfer prices in order to avoid any distorting effects that may
arise from the transfer prices. Therefore , the actual profit margins of the traders in
the third country which were used at the provisional stage were replaced by a profit of
5% which is considered a reasonable profit for the activities carried out by trading
companies in the chemical sector, as was done in previous cases.338
Further, the European Union clarified that in response to questions from the Panel that:

[T]he European Commission did not simply accept the 5% mark-up/commission of the
Sale and Purchase Agreement as the level of the adjustment that was to be made but
rather looked at the cost/profit of ICOF -S and constructed the amount for the
commission/mark-up based on what was considered to be a reasonable profit for
activities carried out by trading companies in the chemical sector which was added to
the actual SG&A of ICOF-S.339

336 Annex 2 to the Provisional Company-Specific Disclosure to PT Musim Mas, Calculation of Dumping
Margin, (Exhibit IDN-33) (BCI), p. 4.
337 Annex 2 to the Provisional Company-Specific Disclosure to PT Musim Mas, Calculation of Dumping
Margin, (Exhibit IDN-33) (BCI).
338 Final Determinat ion, (Exhibit IDN -4), para. 36. Exhibit EU -11 explains that the amount of the
notional commission deducted from the export price varied according to the sales channels used to sell the
product in the EU. For sales made via the related importer, the notiona l commission was composed of a [***]
amount for ICOF-S' SG&A and a [***] for ICOF-S. For sales made directly by ICOF -S the amounts used were
respectively [***] SG&A for ICOF -S and [***] notional profit. T he European Union explains that the
percentage of SG &A used is higher for direct sales made by ICOF -S than for sales made via the related
importer because ICOF -S incurs higher SG&A when directly selling to unrelated customers. (Detailed
breakdown of the calculation PTMM's export price, (Exhibit EU-11) (BCI)).
339 European Union's response to Panel question No. 12, p. 13.

7.114. In view of the foregoing, we understand that, due to the close ties between PT Musim Mas
and ICOF-S, which had the potential to affect the reliability of the mark-up, the EU authorities
assessed the amount for the mark-up on the basis of ICOF-S' P&L and what they considered to be
a reasonable profit margin for this particular sector , rather than on the basis of the actual margin
reflected in the Sale and Purchase Agreement between PT Musim Mas and ICOF -S.340 The
EU authorities then deducted this amou nt from the export price as required under Article 2(10) of
the Basic Anti-Dumping Regulation.
7.3.5.3.2 Analysis of the Panel
7.115. Indonesia's argument consists of two parts.
7.116. First, Indonesia contends that there is an "asymmetry" between the ex -factory export
price a nd the ex -factory normal value established by the EU authorities for the purpose of
determining the dumping margin of PT Musim Mas. This argument is premised on the following
assertions:
a. Since ICOF-S acts as the sales department of PT Musi m Mas, the SG&A expenses for
PT Musim Mas' export sales were, in fact, the SG&A expenses incurred by ICOF -S.
Relatedly, the profit obtained from export sales of the product concerned was split
between ICOF-S and PT Musim Mas. Therefore, by deducting ICOF -S' SG&A and profi t
from the export price, the EU authorities obtained an ex -factory export price for sales of
the product under investigation which included no amount for SG&A and which included
only a share of the profits accrued in respect of these sales.
b. By contrast, t he ex -factory normal value included both PT Musim Mas' full profits on
sales of the product concerned and any indirect selling expenses relating to these
sales.341
Second, Indonesia contends that, as a matter of law, no allowance for profit and SG&A can be
made under the third sentence of Article 2.4, as profit and SG&A are essential components of the
prices being compared.342
7.117. Although Indonesia initially described this issue as a violation of the second sentence of
Article 2.4 (the obligation to make a compa rison at the same level of trade) 343, it later clarified
that this case does not involve a "level of trade" issue concerning sales made to different types of
customers which might involve different or additional costs to the producer. 344 We therefore
confine our analysis to whether the deduction for the mark -up was impermissible under Article 2.4
for the two aforementioned reasons advanced by Indonesia.

340 The European Union notes that: "that number was actually very close to the mark-up ICOF-S was
entitled to according to the Sale and Purchase Agreement." (European Union' s second written submission,
para. 69).
341 Indonesia's response to Panel question No. 14, paras. 1.68-1.70, contains a detailed explanation of
this alleged asymmetry.
343 See for example Indonesia's response to Panel question No. 2, para. 1.25. We also note that during
the underlying investigation, PT Musim Mas specifically requested a level of trade adjustment to the normal
value on the basis of Article 2(10)(d)(ii) of the Basic Anti-Dumping Regulation, which provides that: "when an
existing difference in level of trade cannot be quantified because of the absence of the relevant levels on the
domestic market of the exporting countries, or where certain functions are shown clearly to relate to levels of
trade other than the one which is to be used in the comparison, a special adjustment may be granted." The
Panel understands that this request aimed at compensating a possible asymmetry between the sales functions
reflected in the adjusted export price (namely, the sales functions undertaken by PT Musim Mas without the
intervention of ICOF-S) and the sales functions reflected in the normal value (namely, the sales functions
undertaken by PT Musim Mas for domestic sales). In our view, this claim is different from the argument made
before the Panel by Indonesia in the present proceedings.
344 Indonesia's comments on the European Union's response to Panel question No. 41, para. 3.2.

7.3.5.3.2.1 Whether the allowance for the mark -up led to an asymmetry between the
export price and the normal value
7.118. Indonesia asserts that, by making the allowance for the mark -up, the EU authorities
"establish[ed] an export price that was not at the same level of trade as the normal value because
it had elements deducted (profit and SG&A) that were not deducted from the no rmal value".345 In
our view, this assertion raises a question of fact, namely, whether the export price to the
European Union that the EU authorities compared with the normal value excluded certain elements
(profit and SG&A) that were included in the normal value.
7.119. We begin by analysing the pertinent elements of the export price and normal value that
were compared. The P&L submitted by PT Musim Mas as part of its r esponse to the
EU authorities' anti-dumping questionnaire provides a breakdown of the prices whic h were
compared. This document includes entries for SG&A pertaining to the product under consideration
[***346] The amounts of SG&A reported for each category of sale are identical, namely [***].347
These reported amounts included components for [***], which w ere also identical, namely,
[***]. The fact that the [***] expenses reported in PT Musim Mas' P&L are identical for both
domestic sales and exports to the European Union suggests that PT Musim Mas incurred internally
the same level and type of costs for bo th categories of sales, which were reflected in the
respective prices to domestic buyers and to ICOF-S.348
7.120. Thus, we cannot accept Indonesia's argument that the export price lacked components of
SG&A – namely, those represented by ICOF-S' involvement on sales to the European Union – that
were included in the normal value with which it was compared.349 On the contrary, both the export
price and the normal value that were compared included similar allocations of amounts for SG&A,
encompassing identical percentage amounts for marketing and selling expenses. Further, the
available evidence suggests that ICOF -S' involvement in export sales to the European Union
represented an additional cost, for which there was no equivalent on the domestic side , thereby
giving rise to a difference for which an adjustment was required.350
7.121. We likewise cannot accept Indonesia's argument that the export price that was compared
to the normal value excluded a profit component. The P&L submitted by PT Musim Mas recorded
amounts of profit pertaining to the product concerned for both direct domestic sales to final buyers
and for sales to ICOF -S that were destined for the European Union. 351 The reported amounts of
profit for the respective sales channels were [***352]
7.122. Indonesia disputes the reliance on PT Musim Mas' P&L, stating that the reported SG&A and
profit figures were provided for the purpose of the "profitability test" and for constructing the
normal value and "had nothing to do with the issue of the sales process for domestic or export
sales".353 Indonesia also questions the reliability of the figures in the P&L for the purposes of
ensuring a fair comparison because "PT MM's SG&A expenses were reported on an aggregate,
company-wide basis, covering all SG&A-related activities with respect to all products, and allocated
in Table 2.3 on the basis of the value of sales of different products to different markets" and,
therefore, "the 'identical percentages' are the result of a simple mathematical calculation and not a
determination of the level of in volvement of the two arms of the producer/exporter in the sales

345 Indonesia's response to Panel question No. 2, para. 1.25.
346 [***]
347 We note however, that the SG&A figure ultimately used by the EU authorities for the normal value
was slightly different, namely [***]. This was because, in order to exclude transport and insurance from the
average cost of production, SG&A had to be reallocated. (See Annex 2 to the Provisional Company-Specific
Disclosure to PT Musim Mas, Calculation of Dumping Margin, (Exhibit IDN-33) (BCI), p. 2).
348 See above paras. 7.84 and 7.86.
349 Indonesia's response to Panel question No. 2, para. 1.25.
350 See above para. 7.84.
351 Excel file "PTMM definitive disclosure.xls", (Exhibit EU-12) (BCI), spreadsheet 2.3 (TABLE G - PL -
(Profit and Loss) - of the exporting producer and each related company), row 44 /columns F and G (indicating
[***] for "DOMESTIC MARKET - PRODUCT CONCERNED - INDEPENDENT CUSTOMERS"), and row 44 /columns
V, W, X and Y (indicating [***] for "EXPORT TO OTHER COUNTRIES - PRODUCT CONCERNED - INDEPENDENT
CUSTOMERS" and "EXPORT TO OTHER COUNTRIES - PRODUCT CONCERNED - RELATED CUSTOMERS").
352 [***]
353 Indonesia's comments on the European Union's response to Panel question No. 44, para. 4.13.

process".354 Finally, Indonesia argues that "the concept of 'profit' in transactions between closely
related parties has little commercial sense . … Neither the artificial value assigned by the t wo units
of the seller to their internal transaction nor any 'profit' that accrues to either company as a result
is meaningful in determining the ex factory price."355
7.123. As noted by Indonesia, "it is not for the Panel to step into the shoes of the investigatin g
authority and make a determination in lieu of the investig ating authority", but rather, "it is for the
Panel to review the plausibility of the investigating authority's explanation in the light of the facts
on the record". 356 In addition, our task is not to assess whether the value of the allowance
calculated by the EU a uthorities was correct: in fact , Indonesia has repeated several times in the
course of the proceedings that the value of the allowance is not at issue in the present dispute. 357
Rather, in ord er to accept Indonesia's argument that the allowance resulted in an asymmetrical
comparison, we need to determine that the evidence on the record demonstrates that the export
price used by the EU authorities for the comparison lacked the components alleged by Indonesia
that are otherwise reflected in the normal value used for the comparison.
7.124. We consider that PT Musim Mas' questionnaire response is useful evidence for the purpose
of assessing Indonesia's argument. In our view, even if PT Musim Mas' P&L was not prepared
specifically for the purpose of making allowances under Article 2.4, its depiction of
PT Musim Mas' costs, expenses, and profits is relevant and probative for establishing if th e
ex-factory export price reflected SG&A and profit. This is all the more the case as it was prepared
and provided by the producer itself as part of its response to the EU authorities' anti -dumping
questionnaire and it was verified by the investigating authority. 358 In addition, we note that
Indonesia does not point to any document on the record evidencing that the ex -factory export
price determined by the EU authorities did not include an amount for SG&A and profit.
7.125. We therefore conclude that Indonesia has not demonstrated that the EU authorities
created an asymmetry betw een the ex -factory normal value and the ex -factory export price by
making an adjustment to PT Musim Mas' export price. For the same reasons, we also conclude that
Indonesia has not demonstrated that the comparison was not made at the same level of trade.
7.3.5.3.2.2 Whether it was permissible to calculate the value of the allowance on the
basis of ICOF-S' SG&A and profit
7.126. Indonesia argues that the allowance made by the EU authorities was in fact an
impermissible deduction of the SG&A and profit from the export price o f the "seller", namely, the
"single economic entity" formed by PT Musim Mas and ICOF-S.
7.127. We agree with Indonesia that the normal value and the export price to be compared in the
establishment of the dumping margin should, in principle, both reflect – on to p of the cost of
manufacturing – a reasonable amount for administrative, selling, and general costs and for profits.
As stated by the panel in China – Broiler Products, the price of a product:
[I]s made of different pricing components that reflect the par ticular conditions or
circumstances of the sale, starting with an amount that represents the cost of
production and sale of the product, to which is added an amount for profit. Depending
on the particular realities of the relevant market, additional pricin g elements –
generally an amount for additional costs and profit for each of the successive
participant in the distribution chain – are added as the product gets traded further

354 Indonesia's comments on the European Union's response to Panel question No. 44, para. 4.13.
(fn omitted)
355 Indonesia's response to Panel question No. 31, para. 1.44.
356 Indonesia's response to Panel question No. 42, para. 3.8.
357 See Indonesia's response to Panel question No. 38, para. 1.108.
358 As noted by Indonesia, "the Commission made some adjustments to these figures". (Indonesia's
comments on the European Union's response to Panel question No. 41, para. 3.4).

down the distribution chain, from producer to wholesaler, from wholesale to ret ailer,
and from retailer to end-user.359
7.128. However, we disagree that the SG&A and profit of an entity involved in the sale of a
product under investigation cannot, in any circumstance, be treated as a difference which affects
price comparability. In particula r, we consider that the intervention of downstream participants in
the sales chain may result in "additional costs and profit" which are likely to affect price
comparability across markets. From an accounting point of view, these elements of the price would
be characterized as the SG&A and profit of the downstream participant, but they would also be
characterized as a direct selling expense for the producer/exporter concerned. We also recall the
Appellate Body's statement in US – Hot-Rolled Steel that "[t]here are … no differences 'affect[ing]
price comparability'" which are precluded, as such, from being subject to an allowance. 360 In the
context of Indonesia's claim, the mark-up must be viewed as a whole and not from the perspective
of its constituent elements. In addition, it is apparent from the record that the EU authorities only
disaggregated the mark -up into components for profit and SG&A in order to quantify the proper
amount of the adjustment, having already concluded that the adjustment for the mark -up was
warranted.361 We note that Indonesia recognizes this distinction between : (a) identifying where an
allowance should be made; and (b) identifying the proper amount for that allowance:
Having identified that an adjustment should be made, the investigating authority must
next identify or quantify the amount of the adjustment.362
7.129. The question before us is not therefore whether it was permissible for the EU authorities to
deduct the SG&A and profit of the related trader, but rather whether – in the process of making an
allowance for a commission – the EU authorities were allowed to use the SG&A and profit as a
basis for calculating the value of the adjustment. In this regard, we note the United States' view
that an investigating authority is allowed to calcula te the value of an adjustment for commission
on the basis of the affiliated trader's selling expenses:
[I]f the producer/exporter and the trading company are affiliated, the price for
comparison purposes could be calculated at the ex -factory level by maki ng an
appropriate adjustment based on the selling expenses that the affiliated trader
incurred.363
We agree. When a transfer of funds occurs between two related entities, a n investigating authority
would be justified in examining whether the actual value of the expense differs from its reported
value. Such an examination would, in our view, assist in identifying the proper amount of the
adjustment to be made.364 Since there is evidence on the record that the mark-up was designed to
cover the cost of the service rendered by ICOF-S, we consider that its SG&A and profit represent a
reasonable basis for calculating the actual value of this service.365

7.130. For these reasons, we do not accept Indonesia's argument that the EU authorities were
precluded from deducting an a llowance that was calculated based on ICOF -S' P&L and what they
considered to be a reasonable profit margin for this particular sector.366

359 Panel Report, China – Broiler Products, para. 7.480. Although the panel made these statements in
the context of Article 3.1 of the Anti-Dumping Agreement, we see no reason why they should not be equally
relevant in the context of Article 2.4.
360 Appellate Body Report, US – Hot-Rolled Steel, para. 177.
361 Annex 2 to the Provisional Company-Specific Disclosure to PT Musim Mas, Calculation of Dumping
Margin, (Exhibit IDN-33) (BCI), p. 4.
362 Indonesia's response to Panel question No. 31, para. 1.4. (emphasis original)
363 United States' third-party response to Panel question No. 1, para. 3.
364 Although we do not understand Indonesia to challenge the EU authorities' methodology for
calculating the allowance in the present case, we note that Indonesia appears to endorse an approach whereby
actual expenses are verified in a context of common ownership/control by reference to the relevant entity's
P&L. (See, e.g. Indonesia's response to Panel question No. 31, fns 5 and 7, and paras. 1.20-1.23).
365 See for example the statement made by PT Musim Mas in the anti -dumping questionnaire: [***]
(Excerpt from PT Musim Mas' questionnaire response, (Exhibit IDN-22) (BCI), pp. 43 and 44).
366 In our view, contrary to Indonesia's arguments, it was not internally-inconsistent for the
EU authorities to have, on the one hand, questioned the reliability of the reported value of the mark-up due to

7.3.5.4 Analysis of Indonesia's argument regarding the different outcome for Ecogreen
7.3.5.4.1 Factual background
7.131. The record shows that two exporting producers in Indonesia cooperated in the original
anti-dumping investigation: Ecogreen and PT Musim Mas. Both producers and their related traders
responded to the anti-dumping questionnaire and the EU authorities conducted verification visits at
the premises of both producers and their related traders. 367 The investigation showed that both
producers sold fatty alcohols to the European Union and other destinations, including through
related traders based in Singapore (EOS and ICOF-S respectively).
7.132. The record also contains evidence that the remuneration of the Singapore -based traders
took the form of trading commissions or mark -ups granted by the producing exporters on sales of
the product concerned. Both PT Musim Mas and Ecogreen claimed during t he investigation that no
allowance should be made to the export price because they formed single economic entities with
their related traders. In the Final Determination, the EU authorities noted that:
Following provisional disclosure both Indonesian expo rters pointed out that no
adjustment should have been made for differences in commissions pursuant to
Article 2(10)(i) for sales via the respective related traders in a third country. Both
companies argued that their production companies in Indonesia and t he respective
related traders in Singapore form a single economic entity and that the traders in the
third country act as the export department of their related Indonesian companies.368
The EU authorities initially rejected this claim, concluding that:

[I]n both cases domestic sales, as well as some export sales to third countries, are
invoiced directly by the manufacturer in Indonesia, and the traders in Singapore
receive a specific commission. For one of the Indonesian companies this commission is
mentioned in a contract covering only export sales. Moreover, the traders in the third
country also sell products manufactured by other producers, in one case also from
unrelated producers. Both related traders in Singapore therefore clearly have
functions which are similar to those of an agent working on a commission basis.369
As a result of this factual determination, an adjustment for the commissions paid to their
respective traders was made to the export prices of Ecogreen and PT Musim Mas, and a dumping
margin above the de minimis level was calculated for both producers at the provisional and
definitive stage.

7.133. In response to the imposition of anti -dumping duties following the Final Determination,
Ecogreen filed an action for annulment370 before the General Court of the European Union, citing in
particular the adjustment made to its export price for commissions paid to its related trader.
PT Musim Mas filed a similar action for annulment before the Court on 20 January 2012.371
7.134. Separately, on 10 March 2009 in unrel ated proceedings (Interpipe v. Council of the
European Communities372) the Court of First Instance of the European Union found in favour of a

the relationship between ICOF-S and PT Musim Mas, and, on the other, determined that PT Musim Mas and
ICOF-S do not form a single economic entity such that payments between them do not affect price
comparability. (See Indonesia's first written submission, paras. 4.257-4.263). In a similar vein, we do not
accept Indonesia's conception that the EU authorities treated ICOF-S and PT Musim Mas as the collective
"seller" of the product for the purposes of determining the dumping margin. (Indonesia's response to Panel
question No. 31, para. 1.28). Rather, we understand the EU authorities to have used the price of the product
"when destined for consumption in the" European Union as required under Article 2.1 of the Anti-Dumping
Agreement, which happened to be the price from ICOF-S.
367 Preliminary Determination, (Exhibit IDN-3), recitals 7 and 8.
368 Final Determination, (Exhibit IDN-4), recital 31.
369 Final Determination, (Exhibit IDN-4), recital 31.
370 General Court, Case T-28/12, PT Ecogreen Oleochemicals and Others v Council (2013).
371 General Court, Case T-26/12, PT Musim Mas v Council (25 June 2015), (Exhibit EU-4).
372 Court of First Instance, Case T-249/06, Interpipe Niko Tube and Interpipe NTRP v Council (2009)
ECR II, (Exhibit IDN-49).

claim by exporters of steel tubes in respect of an analogous adjustment. 373 This judgment was
confirmed on appeal by t he Court of Justice of the European Union on 16 February 2012, i.e. less
than a month after the introduction of Ecogreen's action for annulment in the fatty alcohols case.
Following the confirmation of the Interpipe judgment on appeal, and in light of this new
jurisprudence, the EU authorities decided to reassess their conclusions concerning the impugned
allowances in the present case. As a result of this reassessment, the EU authorities adopted an
amendment to the Final Determination imposing anti -dumping duties on imports of fatty alcohols
from Indonesia on 11 December 2012. This amendment concluded that:
Given that the factual circumstances for Ecogreen are similar to those of Interpipe
NTRP VAT in respect of the adju stment made pursuant to Article 2(10)(i) of the basic
Regulation, in particular the following factors in combination: volume of direct sales to
third countries of less than 8 % (1-5 %) of all export sales; existence of common
ownership/control of the trader and the exporting producer; the nat ure of functions of
the trader and the exporting producer, it is considered appropriate to recalculate the
dumping margin of Ecogreen without making an adjustment pursuant to
Article 2(10)(i) and to amend the definitive Regulation accordingly.374
7.135. As a conse quence of this amendment to the Final Determination, the dumping margin
established for Ecogreen was recalculated and was found to be de minimis. The investigation was
therefore terminated in respect of Ecogreen and the anti -dumping measures in force were
withdrawn. With regard to PT Musim Mas however, EU authorities considered that:
There are a number of differences in the circumstances of the two Indonesian
exporting producers, in particular the following in combination: the level of direct
export sales made by the producer; the significance of the trader's activities and
functions concerning products sourced from non-related companies; the existence of a
contract between the trader and producer, which provided that the trader was to
receive a commission for the export sales.375
On this basis, EU authorities concluded that the functions of ICOF -S were similar to those of "an
agent working on a commission basis" and that the adjustment made for the mark -up was still
justified in the case of PT Musim Mas. Ant i-dumping duties thus continued to apply to
PT Musim Mas' exports of fatty alcohols.

7.136. Finally, on 25 June 2015, the General Court of the European Union rejected the action for
annulment introduced by PT Musim Mas. The General Court of the European Union ruled in
particular that the EU authorities had not made an error in finding that ICOF -S had functions
similar to those of "an agent working on a commission basis" and that the EU authorities had not
breached the principle of equality and non -discrimination in distinguishing PT Musim Mas' situation
from that of Ecogreen as regards the application of Article 2(10)(i) of the Basic Regulation,
pursuant to which the adjustment was made.
7.3.5.4.2 Main arguments of the parties
7.3.5.4.2.1 Indonesia
7.137. Indonesia submits that the EU author ities failed to provide a reasoned and adequate
explanation for eventually treating the two Indonesian exporting producers differently in relation to
the trading commission received by their respective traders. Indonesia takes issue both with : the
alleged fact (a) that two companies which were allegedly in an "identical situation" for "all relevant
purposes"376 were treated differently ; and with the alleged fact ( b) that the authority completely
changed its appreciation of Ecogreen's factual situation followi ng the Interpipe judgment. With
respect to the latter:

373 Court of Justice, Joined Cases C-191/09 and C-200/09, Council and Commission v Interpipe Niko
Tube and Interpipe NTRP (2012).
374 Revised Determination, (Exhibit IDN-5), recital 5.
375 Revised Determination, (Exhibit IDN-5), recital 12.
376 Indonesia's first written submission, para. 4.11.

Indonesia acknowledges that an investigating authority enjoys a degree of discretion
in its assessment of the facts. However, the required "reasoned and adequate
explanation" is seriously undermined wh ere the investigating authority, within a span
of a few months, goes from emphasizing the commonality between two companies for
purposes of an adjustment to arguing that these companies are so fundamentally
differently situated that they should be treated differently. Where the investigating
authority has itself, merely a few months earlier, espoused an entirely different
explanation and interpretation of the record evidence, it is particularly important to
explain, in compelling terms, the plausibility of its now diametrically opposed
conclusions.377
Indonesia argues that these developments demonstrate that the criteria applied to assess whether
an allowance was justified or not were "a meaningless set of criteria that fail to address the core
issue – namely, whether the transfer of funds at hand does or does not affect price
comparability."378 Indonesia goes on to state that the analysis of the EU authorities was
"arbitrary".379

7.138. In its first written submission Indonesia submits that this lack of a reasoned and adequate
explanation gives rise to a violation of Article 2.4 of the Anti-Dumping Agreement, "independently
and jointly [with the argument that no adjustment for commission should be made in the context
of a single economic entity]."380 Indonesia challenges in particular the relevance of the three main
criteria381 used by EU authorities to determine if ICOF -S had functions similar to those of a trader
working on a commission basis:
a. the importance of direct sales made by the exporting producer vs sales made through the
related trader;
b. the importance of third-party sales made by the related trader; and
c. the existence of a "Sale and Purchase Agreement " between the exporting producer and
the related trader.
We set out below the arguments put forward by Indonesia with respect to each of these criteria
during the investigation and before this Panel.

7.139. First, in relation to the percentage of direct sales made by PT Musim Mas and Ecogreen,
the EU authorities found that the volume of sales to third countries made direc tly by Ecogreen was
less than 8% (1-5%) of all export sales 382, while "the level of direct export sales made by PT MM
[was] higher than that of Interpipe NTRP VAT and … this fact distinguishes PT MM from
Ecogreen."383 Indonesia argues that this criterion is irre levant to a determination of whether
ICOF-S had the same functions as "an agent working on a comm ission basis" and of whether

377 Indonesia's first written submission, para. 4.270.
378 Indonesia's response to Panel question No. 42, para. 3.7.
379 Indonesia's first written submission, para. 4.37.
380 Indonesia's first written submission, para. 4.48.
381 The General Court of the European Union mentions these three criteria at recital 50 of its Judgement
in case T-26/12 (PT Musim Mas vs Council): "it is apparent from recital 31 of the contested regulation that the
Council based its conclusion, in particular, that ICOF S did not carry out the functions of an internal sales
department, on three factors, namely, first, on the fact that ICOF S also sold products manufactured by other
producers, including by unrelated producers; secondly, on the fact that the applicant paid ICOF S a
commission, mentioned in a contract, only on the export sales made by ICOF S; and, thirdly, on the fact that
the applicant invoiced directly domestic sales and some export sales to third countries." (General Court, Case
T-26/12, PT Musim Mas v Council (25 June 2015), (Exhibit EU-4)).
382 Revised Determination, (Exhibit IDN-5), recital 5.
383 Revised Determination, (Exhibit IDN-5), recital 27. The relevant determinations made by the
EU authorities during the investigation do not specify what is the exact level of PT Musim Mas' direct sales. But
the General Court of the European Union in PT Musim Mas vs Council notes at recital 69 that: "it is apparent
from the documents before the Court that the applicant acted as the contracting party in respect of 27.08% of
export sales." In paragraph 42 of its opening statement at the first meeting of the Panel with the parties, the
European Union indicated that "PT Musim Mas made a significant amount of export sales (about 20% of all
export sales)".

PT Musim Mas and Ecogreen were in a different situation in this regard. More specifically,
Indonesia submits that:
a. the EU authori ties' reliance on a quantitative threshold to differentiate between
PT Musim Mas and Ecogreen is "arbitrary" .384 Indonesia adds that given the fluctuating
level of these sales, the conclusion could differ for a given company from one year to the
next, without any change in the underlying corporate structure. This would be an "absurd
outcome"385; and
b. in addition, according to Indonesia, it was established during the investigation that the
invoicing of certain export sales by PT Musim Mas occurred only at the req uest of specific
clients for reasons pertaining to the application of rules of origin; in spite of this, all sales
were "'performed' from Indonesia", in the sense that the goods were manufactured and
shipped from Indonesia.386
7.140. Second, in relation to third -party sales, the EU authorities noted that, in the case of
ICOF-S, the trader's overall activities were based "to a significant extent" on supplies originating
from unrelated companies. The trader's functions were therefore similar to those of "an agent
working on a commission basis" .387 Before us, Indonesia argues that "the existence or extent of
trading third-party produced goods per se says essentially nothing about the relationship between
a producer (like PT Musim Mas) and a selling department (ICOF -S)".388 It also submits that the
EU authorities' criterion appears to suggest that an entity consisting of a production company and
a selling company constitute s a SEE "only if the selling entity does not trade more than a
de minimis amount of third party products ".389 For these reasons, Indonesia also considers that
this criterion was irrelevant to a determination of whether ICOF -S functions were similar to those
of "an agent working on a commission basis" and whether PT Musim Mas and Ecogreen were in a
different situation in this regard.
7.141. Finally, in relation to the Sale and Purchase Agreement between PT Musim Mas and
ICOF-S, the EU authorities found that its existence was an important difference b etween
PT Musim Mas and Ecogreen , the latter of which had no such con tract.390 Indonesia considers
however that:
a. The fact that one company provided such a "commission" on the basis of a written
agreement and the other company without a written agreement "can hardly be the basis
for drawing a bright line of distinction betwee n the companies". 391 Indonesia considers
that it was incumbent upon EU authorities to explain in which regard the relationship
between PT Musim Mas and ICOF-S was different from the relationship between Ecogreen
and EOS.392
b. PT Musim Mas demonstrated during th e investigation that the Sale and Purchase
Agreement was merely a "master agreement" aimed at complying with applicable tax
guidelines and internationally accepted guidelines on transfer pricing. As a consequence,
this agreement was irrelevant for assessing whether the trader's functions were similar to
those of an agent working on a commission basis.393
7.3.5.4.2.2 European Union
7.142. The European Union responds that Indonesia has not demonstrated that the different
conclusions reached by the investigating authority in the case of PT Musim Mas and Ecogreen

384 Indonesia's first written submission, para. 4.275.
385 Indonesia's first written submission, fn 211.
386 Indonesia's first written submission, para. 4.274
387 Revised Determination, (Exhibit IDN-5), recital 29.
388 Indonesia's first written submission, para. 4.246.
389 Indonesia's first written submission, para. 4.246.
390 See for example Final Determination, (Exhibit IDN-4), recital 31; and Revised Determination,
(Exhibit IDN-5), recital 31.
391 Indonesia's first written submission, para. 4.274.
392 Indonesia's first written submission, para. 4.279.
393 Indonesia's second written submission, paras. 2.46 and 2.53; first written submission, para. 4.195.

respectively, led to a violation of specific provisions of the Anti -Dumping Agreement. The only
relevant question is whether the EU authorities reached a reasoned conclusion that the
commission paid to ICOF -S was a differe nce which affects price comparability. According to the
European Union, this question "has nothing to do with Ecogreen".394
7.143. In fact, the European Union submits that the EU authorities applied the same relevant
provisions of the Basic Anti-Dumping Regulation – Article 2(10)(i) – to the facts of each exporting
producer and relied on the same criteria for conducting this analysis. 395 On this basis the
authorities found that the respective circumstances of each trader justified a different outcome for
PT Musim Mas and Ecogreen, and, according to the European Union, this conclusion was reached
after an extensive discussion of both producers' argument and factual circumstances. The
European Union noted the following key differences:
a. PT Musim Mas had more significant amounts of direct export sales as compared to
Ecogreen;
b. ICOF-S has no exclusive relationship with PT Musim Mas but also sells many other
products from unrelated parties; and
c. The relationship between PT Musim Mas and ICOF -S was governed by a comprehensive ,
formal Sale and Purchase Agreement which contemplates a mark -up for ICOF -S
international activities, while no such contracts existed for Ecogreen.
d. In light of these criteria, ICOF-S appeared to have functions similar to those of "an agent
working on a commission basis", while Ecogreen did not.

7.144. With regard to the Revised Determination, the European Union explains that the similarity
between the facts concerning Ecogreen and those concer ning Interpipe prompted the
EU authorities to review the factual findings made during the investigation:
Because the factual circumstances concerning Ecogreen were similar to those giving
rise to a judgment of the CJEU that no adjustment was warranted under those factual
circumstances, the European Union concluded that it could not make an adjustment
with respect to Ecogreen.396
The European Union however disagrees with the characterization that different criteria were used
by the EU authorities in the amended version of the Final Determination.
7.3.5.4.3 Analysis of the Panel
7.145. In view of the European Union's assertion that Indonesia's argument varied in the course
of the proceedings397, we consider useful to set out our understanding of Indonesia's argument in
relation to Ecogreen.
7.146. We understand Indonesia's argument in relation to Ecogreen to have been made in support
of its claim under Article 2.4 that, in calculating PT Musim Mas' dumping margin, the EU authorities
made an allowance for a factor which did not affect price comparability. More specifically,
Indonesia argues that the case of Ecogreen shows that EU authorities used irrelevant criteria in
their analysis under Article 2(10)(i) of the Basic Anti-Dumping Regulation and applied them in an
arbitrary manner to the facts of the case. This flawed analysis vitiates the conclusion tha t an
adjustment was warranted for PT Musim Mas. Indonesia thus requests the Panel to assess the
consistency of the adjustment made for PT Musim Mas with Article 2.4 in light of the explanations
given to justify the different results for PT Musim Mas and Ec ogreen and a revision of the
determination concerning Ecogreen.

394 European Union's second written submission, para. 103.
395 European Union's response to Panel question No. 43, para. 21 (lists the criteria reviewed by the
EU authorities for PT Musim Mas and Ecogreen).
396 European Union's response to Panel question No. 43, para. 20.
397 European Union's response to Panel question No. 43, para. 20.

7.147. In considering Indonesia's argument, we find particularly salient Article 6.10 of the
Anti-Dumping Agreement which requires investigating authorities, as a general rule, to determine
an individual margin of dumping for each known producer/exporter concerned of the product under
investigation. This, in turn, suggests to us that the relevant facts and evidence will vary from
producer to producer and that each producer's circumstances should be e valuated individually and
independently in an anti -dumping investigation. That notwithstanding, we do not exclude that the
treatment accorded to other exporters could, in some circumstances, be potentially relevant to
whether the explanation for a particul ar outcome given by the authorities is reasoned and
adequate.398 For instance, where an investigating authority uses radically different reasoning in
respect of very similar fact patterns, this could potentially indicate that the reasoning itself is
somehow flawed or biased.
7.148. We recall , however, our conclusion that the explanation given by the EU authorities for
their determination that an adjustment for the mark-up in question was warranted in the case of
PT Musim Mas is reasoned and adequate. This conclusion was based on our finding that the
EU authorities had a sufficient evidentiary basis for their factual findings that399:
a. the mark-up was a factor that had an impact on the price to be compared and was
granted on export sales but not on domestic sales; and
b. ICOF-S had functions similar to an agent working on a commission basis in the sense of
Article 2) 10) i) of the Basic Anti-Dumping Regulation.
We thus considered the EU authorities had a sufficient evidentiary basis – encompassing both of
these factual fin dings and their underlying evidence – for establishing that the mark -up was a
factor having an impact on the prices to be compared that was linked exclusively to the export
side. On that basis, we considered that an unbiased and objective investigating aut hority could
have found the mark -up to constitute a difference which affects pri ce comparability under
Article 2.4 of the Anti-Dumping Agreement.400

7.149. We will now assess whether the different outcome for Ecogreen affects our conclusion in
this regard. In particular, we proceed to review whether Indonesia has demonstrated that: (a) the
factual findings on which the EU authorities based their conclusion were irrelevant to an analysis of
the comparability between the normal value and the export price; ( b) the rev ised determination
made following the Interpipe judgment was not reasoned and adequate; and (c) the EU violated
Article 2.4 of the Anti-Dumping Agreement by failing to give a reasoned and adequate explanation
of the different results for Ecogreen and PT Musim Mas.
7.3.5.4.3.1 Whether Indonesia has demonstrated that the criteria used by the
EU authorities were irrelevant to an analysis of price comparability
7.150. Indonesia argues that the different outcomes for Eco green and PT Musim Mas and the
Revised D etermination concern ing Ecogreen demonstrate that the criteria used by the
EU authorities in their application of Article 2(10)(i) of the Basic Anti-Dumping Regulation were
irrelevant.
7.151. We begin by recalling that Article 2.4 prescribes no method and no specific criteria for
assessing whether a particular factor can be characterized as a difference which affects price
comparability. We also recall that our assessment focuses on whether the EU authorities had
sufficient evidence to justify an allowance for a difference which affe cts price comparability,
including when such evidence is viewed against the argumentation and evidence provided by the
investigated producers in rebuttal.
7.152. Like Indonesia, we consider that "generally", the EU authorities have applied the same
criteria unde r EU law to both PT Musim Mas and Ecogreen .401 In the Revised Determination

398 See, e.g. Panel Report, US – Softwood Lumber V, para. 7.320; and Appellate Body Report, US –
Softwood Lumber V, paras. 173 and 174.
399 See above, section 7.3.5.1.4.1.
400 See above, section 7.3.5.1.4.2.
401 Indonesia's response to Panel question No. 43, para. 3.15.

however, the EU authorities introduced a quantitative criterion for dir ect sales made by the
producers, in order to reflect the findings of the Court of Justice of the European Union in the
Interpipe case. While the Final Determination notes that "some export sales to third countries are
invoiced directly by the manufacturer in Indonesia", the Revised Determination indicates that the
volume of direct sales to third countries is less t han 8% (1-5%) of all export sales for Ecogreen.
The Revised Determination also introduced a quantitative benchmark for third-party sales made by
the related trader.402
7.153. It is unclear to us why the introduction of a quantitative benchmark relating to the level of
direct sales made by the producers and the level of third -party sales made by their related traders
in the Revised Determination would vitiate the EU authorities' analysis with respect to
PT Musim Mas. In particular, Indonesia does not dispute that an investigating authority enjoys a
certain degree of discretion in its assessment of the facts, "which may also entail a change in the
analytical framework applied during the investigation". 403 Indeed, in our view, it stands to reason
that a high level of direct sales made by the producer (we understand that this level reached 20 %
or more in the case of PT Musim Mas) as well as a high level of third -party sales could be relevant
factors in assessing the functions of the trader, which may, in turn, shed light on the nature of the
mark-up as an expense or as a mere tool to allocate profits between subsidiaries.
7.154. Similarly, with regard to the existence and content of the written Sale and Purchase
Agreement between PT Musim Mas and ICOF -S, we do not see how the analysis made in the case
of Ecogreen affects the relevance of the factual findings made by the EU authorities in the case of
PT Musim Mas. We found that it was reasonable for the EU authorities to rely – inter alia – on the
Sale and Purchase Agreement for their findings that the mark-up was a factor having an impact on
the prices to be compared and tied to export sales and that ICOF -S had functions similar to those
of a trader working on a commission basis. 404 The relevance of these factual findings is in no wa y
affected by the fact that the EU authorities may (or may not) have disregarded whether a similar
arrangement existed between Ecogreen and EOS, albeit under a different form.
7.155. Therefore, we are not convinced by Indonesia's argument that, in light of the analysis
conducted for Ecogreen, the explanations which support the determination made for PT Musim Mas
are not reasoned or adequate.
7.3.5.4.3.2 Whether the explanation given for the different outcomes for Ecogreen and
PT Musim Mas was reasoned and adequate
7.156. We recall that in their initial assessment of the facts, the EU authorities considered that, in
relation to trading commissions, the characteristics of the export sales made to the
European Union by the two exporting producers justified an allowance to their respec tive export
prices. In particular, the EU authorities indicated in the Final Determination that:
[I]n both cases domestic sales, as well as some export sales to third countries, are
invoiced directly by the manufacturer in Indonesia, and the traders in Si ngapore
receive a specific commission . … Moreover, the traders in the third country also sell
products manufactured by other producers, in one case also from unrelated
producers. Both related traders in Singapore therefore clearly have functions which
are similar to those of an agent working on a commission basis.405
With regard to the level of direct sales made by the producers, the Final Determination stated that
"for each producer concerned , those sales represent a considerable percentage of its domestic
sales".406

7.157. The EU authorities therefore considered that the factual situation of the respective
producers justified an adjustment under Article 2(10)(i) of the B asic Anti-Dumping Regulation.
Although we do not have sufficient information before us to asses s whether the circumstances of

402 Revised Determination, (Exhibit IDN-5), recital 29.
403 Indonesia's response to Panel question No. 43, para. 3.11.
404 See for example, section 7.3.5.1.4.1 and section 7.3.5.1.4.2 above.
405 Final Determination, (Exhibit IDN-4), recital 31.
406 Final Determination, (Exhibit IDN-4), recital 33.

the two companies were identical or similar in all aspects, the record shows that the EU authorities
considered that the respective producers were in a similar situation for the purposes of
Article 2(10)(i), i.e. both of thei r related traders had functions similar to those of "an agent
working on a commission basis" and received a commission for their involvement in export sales.
7.158. In its revised assessment of the facts however, the EU authorities – applying the same
criteria – reached a different conclusion for EOS, namely that EOS did not have functions similar to
those of "an agent working on a commission basis". The Revised Determination only provides
limited explanation as to why the commission granted by Ecogreen should no longer be treated as
a difference which affects price comparability, stating that:
Given that the factual circumstances for Ecogreen are similar to those of Interpipe
NTRP VAT in respect of the adjustment made pursuant to Article 2(10)(i) of the basic
regulation, in particular the following factors in combination: volume of direct sales to
third countries of less than 8 % (1-5 %) of all export sales; existence of common
ownership/control of the trader and the exporting producer; the nature of functions of
the trader and the exporting producer, it is considered appropriate to recalculate the
dumping margin of Ecogreen without making an adjustment pursuant to
Article 2(10)(i) and to amend the definitive Regulation accordingly.407
We find this somewhat lacking as an explanation of why the commission granted by Ecogreen to
EOS should not be treated as a difference which affects price comparability. We agree with
Indonesia that "the Commission did not explain how the similarities between how the two
producers/exporters structured their operations that compelled identical treatment in the Definitive
Regulation were no longer relevant".408

7.159. However, while we have concerns as to the reasonableness and adequacy of the revised
determination concerning Ecogreen, it is not clear to us that this is sufficient to demonstrate a
violation of Article 2.4 of the Anti-Dumping Agreement in respect of PT Musim Mas. This is because
Indonesia's claim under Article 2.4 is "based on an improper deduction from the export price of the
Indonesian exporter-producer PT Musim Mas". Indonesia is not making a claim that EU authorities
violated Article 2.4 by not making an allowance to Ecogreen's export price or by changing their
assessment after the end of the investigation. 409 In that context, w e do not consider that an
insufficient explanation for the different outcome with respect to Ecogreen affects the
EU authorities' determination that the mark -up granted to ICOF -S was a difference which affects
price comparability.
7.3.6 Conclusion on Indonesia 's claims under Articles 2.3 and 2.4 of the Anti -Dumping
Agreement
7.160. Based on the foregoing analysis of the three grounds on which Indonesia bases its claim
under Article 2.4 of the Anti -Dumping Agreement, we conclude that Indonesia has not
demonstrated that t he EU authorities acted inconsistently with that provision by making an
improper deduction for a factor that did not affect price comparability.
7.161. Since Indonesia's claim under Article 2.3 of the Anti -Dumping Agreement is consequential
on a finding of incons istency with Article 2.4, we likewise conclude that Indonesia has not
demonstrated that the EU authorities acted inconsistently with Article 2.3.

407 Revised Determination, (Exhibit IDN-5), recital 5.
408 Indonesia's response to Panel question No. 43, para. 3.15
409 See for example para. 3.11 of Indonesia's response to Panel question No. 43: "Indonesia does not
argue that an investigating authority may not change its assessment criteria after the end of the investigation."
Moreover, although the request for the establishment of a panel presented by Indonesia contains a reference
to an alleged violation of GATT Article X.3(a) by the European Union, Indonesia has not provided any argument
during the proceedings in support of such a claim. The Panel therefore considers that Indonesia has not made
a prima facie case that the European Union has violated GATT Article X.3(a).

7.4 Indonesia's claims under Articles 3.1 and 3.5 of the Anti-Dumping Agreement
7.4.1 Introduction
7.162. Indonesia claims tha t the EU authorities acted inconsistently with Article 3.5 of the
Anti-Dumping Agreement by failing to conduct a proper non -attribution analysis with respect to
two "known factors" within the meaning of the third and fourth sentences of that provision,
namely, the "economic crisis" and "issues related to the European Union's domestic industry's
access to raw materials".410 As a consequence, Indonesia claims that the EU authorities also acted
inconsistently with Article 3.1 by failing to conduct an "objective examination" on the basis of
"positive evidence".411
7.163. We begin by addressing Indonesia's arguments concerning the "economic crisis" factor,
before turning to its arguments concerning the alleged "access to raw materials" factor.
7.4.2 Relevant provisions of the covered agreements
7.164. Article 3.1 of the Anti-Dumping Agreement provides:
A determination of injury for purposes of Article VI of GATT 1994 shall be based on
positive evidence and involve an objective examination of both (a) the volume of the
dumped imports and the effect of the dumped imports on prices in the domestic
market for like products, and (b) the consequent impact of these imports on domestic
producers of such products.
7.165. Article 3.5 of the Anti-Dumping Agreement provides:
It must be demonstrated that t he dumped imports are, through the effects of
dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this
Agreement. The demonstration of a causal relationship between the dumped imports
and the injury to the domestic industry sh all be based on an examination of all
relevant evidence before the authorities. The authorities shall also examine any known
factors other than the dumped imports which at the same time are injuring the
domestic industry, and the injuries caused by these o ther factors must not be
attributed to the dumped imports. Factors which may be relevant in this respect
include, inter alia , the volume and prices of imports not sold at dumping prices,
contraction in demand or changes in the patterns of consumption, trad e restrictive
practices of and competition between the foreign and domestic producers,
developments in technology and the export performance and productivity of the
domestic industry.
7.4.3 The EU authorities' analysis of the economic crisis factor
7.4.3.1 Main arguments of the parties
7.4.3.1.1 Indonesia
7.166. Indonesia submits that the EU authorities' analysis of the "economic crisis" factor was
inconsistent with Article 3.5 for three reasons. First, Indonesia argues the EU authorities
incorrectly assumed that the effects of the finan cial crisis began only in 2009, which led to the
erroneous assumption that any injury suffered by the domestic industry in 2008 must have been
caused only by the effects of the dumped imports to the exclusion of any effects of the crisis. 412 In
particular, I ndonesia asserts that the EU authorities failed to provide a reasoned and adequate
explanation for its overall analysis of the "economic crisis" factor because:

410 Indonesia's first written submission, paras. 5.1-5.3 and 7.1; second written submission, paras. 3.1
and 5.1.
411 Indonesia's first written submission, paras. 5.2 and 7.1; second written submission, paras. 3.1
and 5.1.
412 Indonesia's first written submission, paras. 5.32 and 5.34-5.43.

a. the apparent central assumption (that the crisis began in 2009, as reflected in
paragraph 96 of the Definitive Determination) is incorrect because this assumption is
contradicted by record evidence and by evidence of which judicial notice can be taken;
b. the EU authorities failed to explain in paragraph 96 of their Definitive Determination why,
despite there being multiple pieces of evidence on the record that suggest that the crisis
began and its effects were felt already in 2008, their central assumption that the crisis
began in 2009 could nevertheless be sustained; and
c. while paragraph 96 is premised on the assumption that the crisis began only in 2009,
other statements by the EU authorities in other sections of their determinations suggest
that they considered that the crisis began in 2008, which makes their analysis internally
inconsistent, because the same crisis cannot start both in 2008 and in 2009.
7.167. Second, Indonesia contends that the EU authorities failed to separate and distinguish the
injurious effects of the economic crisis – despite acknowledging expressly that the crisis had such
effects – and thus did not properly conclude that a causal link existed between the dumped
imports and injury within the meaning of Article 3.5.413 For Indonesia, since the economic crisis
injured both the domestic industry and the dumped imports contemporaneously in t he same
channels (namely prices and demand reduction), it was incumbent on the EU authorities to
separate and distinguish the extent of the injurious effects of the two respective factors. 414 Third,
Indonesia argues that the EU authorities failed to provide a reasoned and adequate explanation for
their conclusion on injury because they failed to address interested parties' arguments and record
evidence that contradicted their conclusion, including evidence on the temporal coincidence of an
increase in imports and improvements in the domestic industry's profitability, and arguments
concerning a decrease in captive demand.415
7.4.3.1.2 European Union
7.168. The European Union argues the legal standard under Article 3.5 does not prescribe a
methodology for separating and distingu ishing the effects of other known factors from the effects
of the dumped imports. 416 On that basis, the European Union argues that, contrary to Indonesia's
claim, it was not required to use a quantitative methodology for separating and distinguishing the
effects of the economic crisis. 417 Rather, it is permissible under Article 3.5 to conduct a qualitative
analysis. Therefore, the key question is whether the EU authorities properly established the facts
with respect to the economic crisis and evaluated the evid ence in an objective and unbiased
manner.
7.169. In that regard, the EU authorities expressly acknowledged that the economic crisis was a
known factor that contributed to the contraction in demand and to price pressure, and that
indicators of injury such as capa city utilization and sales volume showed that the situation of the
domestic industry worsened with the crisis and somewhat improved with the recovery in the
market.418 However, the improvement of the economic situation, which saw demand going back
to 2007 levels, did not bring the industry performance back to the same 2007 levels. 419 Thus, the
EU authorities determined that the coincidence of the economic crisis was not sufficient to break
the causal link between the dumped imports and injury. 420 In that regard, the European Union
notes that the correlation/coincidence approach is very common in trade remedies investigations
and was expressly upheld as a proper causation methodology by the Appellate Body in Argentina –
Footwear (EC) .421 The European Union rejects In donesia's argument that the
correlation/coincidence approach is applicable only to the causation analysis and not to the

413 Indonesia's first written submission, paras. 5.32 and 5.44-5.58.
414 Indonesia's opening statement at the first meeting of the Panel, paras. 77 and 78.
415 Indonesia's first written submission, paras. 5.32 and 5.59-5.66; opening statement at the second
meeting of the Panel, paras. 24 and 25.
416 European Union's first written submission, para. 122.
417 European Union's first written submission, para. 126.
418 European Union's first written submission, paras. 131 and 146.
419 European Union's first written submission, para. 146.
420 European Union's first written submission, para. 131.
421 European Union's first written submission, para. 144 (referring to Appellate Body Report, Argentina –
Footwear (EC), para. 144).

non-attribution analysis, instead asserting that it is also a useful tool for examining a possible
causal contribution to the injury resulting from other factors.422
7.4.3.2 Main arguments of the United States as third party
7.170. The United States submits that the question of whether an investigating authority's
analysis is consistent with Article 3 should turn on whether the authority has in fact evalu ated the
known factors causing injury, and whether its evaluation is supported by positive evidence and
reflects an objective examination. It thus disagrees with Indonesia that a quantitative analysis is
necessarily required. 423 While the United States does not take a view on the weight the
European Union gave to certain evidence, such as the economic downturn and the availability and
costs of raw materials, the European Union must demonstrate that it examined these factors in its
analysis. Whether or not, as Indonesia claims, the European Union was required specifically to
consider these factors under the third sentence of Article 3.5 would depend on whether these
factors were known to the investigating authority and whether they were in fact contributing at the
same time as the imports to any difficulties experienced by the domestic industry.424
7.4.3.3 Evaluation by the Panel
7.171. Indonesia's argument that the EU authorities acted inconsistently with Article 3.5 in their
consideration of the "economic crisis" factor compri ses thr ee strands, namely, that the
EU authorities: ( a) failed to adequately separate and distinguish the injurious effects of the
economic crisis from those of the dumped imports; ( b) erred in determining the year of
commencement of the economic crisis; a nd (c) failed to address certain arguments and evidence
presented during the investigation by interested parties. We address each in turn.
7.4.3.3.1 Whether the EU authorities adequately separated and distinguished the
injurious effects of the economic crisis from those of the dumped imports
7.172. As a threshold matter, Indonesia and the European Union dispute which aspects of the
EU authorities' determination are appropriate for us to rev iew in assessing whether the
EU authorities provided a reasoned and adequate explanat ion of how they separated and
distinguished the injurious effects of the economic crisis from those of the dumped imports. In
effect, Indonesia argues that we should limit ourselves to the section entitled "Causation" in the
Provisional and Final Determina tions, rather than seeking to "piece together various disjointed
statements scattered across the record". 425 The European Union argues that such an approach
would be overly formalistic, and disagrees that the section entitled "Injury" is an "unrelated
section" for purposes of examining the effects of other factors on injury.426
7.173. We see no obligation in Article 3.5, nor in Article 3 more generally, that requires a
determination to address certain matters only under certain headings. On the contrary, Article 3.5
– which sets out the requirement to demonstrate a causal relationship between the dumped
imports and injury – expressly references Article 3.4 through its requirement that "[i]t must be
demonstrated that the dumped imports are, through the effects of dumpin g, as set forth in
paragraphs 2 and 4, causing injury within the meaning of this Agreement". In turn, Article 3.4
requires "[t]he examination of the impact of the dumped imports on the domestic industry
concerned [including] an evaluation of all relevant e conomic factors and indices having a bearing
on the state of the industry". Therefore, the text of Article 3.5 itself recognizes the
interrelationship between the analysis of the alleged effects of dumping and the alleged effects of
other known factors that might be causing injury to the domestic industry. Further, insofar as the
relevant other "known factor" pertains to a general economic crisis, that factor will necessarily
imbue the "evaluation of all relevant economic factors and indices having a bearin g on the state of
the industry" under Article 3.4.

422 European Union's second written submission, para. 123.
423 United States' third-party submission, para. 36.
424 United States' third-party submission, para. 37.
425 Indonesia's opening statement at the first meeting of the Panel, paras. 74-76; opening statement at
the second meeting of the Panel, para. 26.
426 European Union's second written submission, paras. 118-121.

7.174. Accordingly, on the basis of both the text of Articles 3.4 and 3.5 and the nature of the
factor at issue in the present case, namely, a general economic crisis, it is not unreasonable for an
investigating authority's analysis of that factor to appear in both the context of the impact of the
dumped imports on the domestic industry and in the context of ensuring injurious effects of other
"known factors" are not attributed to the dumped imports. We therefore do not consider it
inappropriate in the present case to take into account the EU authorities' analysis of the economic
crisis in the context of the impact of the dumped imports on the domestic industry as part of our
assessment whether the EU authorities' adequately separated and distinguished the injurious
effects of the economic crisis from the dumped imports.427
7.175. We now turn to what is required of the EU authorities in separating and distinguishing the
injurious effects of other "known factors" from those o f the dumped imports. Article 3.5 requires
the demonstration of a causal link between the dumped imports and injury for the imposition of
anti-dumping measures, and requires the authorities to also examine any other known factors
simultaneously causing injury to the domestic industry and ensure that the injury caused by those
other factors is not attributed to the dumped imports. Accordingly, the Appellate Body in US –
 Hot-Rolled Steel clarified that an investigating authority "must appropriately assess the injurious
effects of those other factors" and that "such an assessment must involve separating and
distinguishing the injurious effects of the other factors from the injurious effects of the dumped
imports".428 The Anti-Dumping Agreement does not provide an y further guidance or specify any
method as to how the injury caused by other known factors may be separated and distinguished
from the injury caused by the dumped imports. 429 Nevertheless, prior panels have taken the view
that it is appropriate "to undertak e a careful and in depth scrutiny" of a determination in order to
evaluate whether the explanations given by an investigating authority are "such reasonable
conclusions as could be reached by an unbiased and objective investigating authority in light of the
facts and arguments before it and the explanations given".430 With this in mind, we now review the
EU authorities' determination to ascertain whether they adequately separated and distinguished
the injurious effects of the economic crisis from the dumped imports.
7.176. The EU authorities addressed the injurious effects of the economic crisis, as distinguished
from the dumped imports, in two ways. First, the EU authorities assessed the impact of the
dumped imports on the domestic industry before and after the cris is occurred, that is, at times
when the economic crisis was not affecting the domestic industry. Before the economic crisis, the
market share of the dumped imports from the countries concerned had increased by 54% and
their sales had increased by 57%. 431 This corresponded with a 12% decline in the domestic
industry's market share and a 15.4% decline in its sales. 432 These figures can be juxtaposed with
an increase in domestic consumption during this period of 2.2%. 433 The domestic industry's prices
increased by 2 2.6% during this period while dumped import prices increased comparatively less,
by 8%. 434 After the economic crisis (i.e. during the economic recovery), when domestic

427 This does not mean that we consider it appropriate to "cobble together" disparate or vague
references in an investigating authority's determination in order to fashion a coherent analysis that satisfies the
"reasoned and adequate" standard. (See Appellate Body Report, US – Steel Safeguards, para. 326; and
Indonesia's opening statement at the first meeting of the Panel, para. 72). However, we do consider that an
investigating authorities' analysis need not be repetitive, and that if something relevant to the assessment of
other known factors causing injury is addressed by the investigating authority in its assessment of the
economic factors and indices having a bearing on the state of the industry, it is appropriate for a reviewing
panel to take the entirety of the determination in this regard into consideration on review.
428 Appellate Body Report, US – Hot-Rolled Steel, para. 223.
429 Both Indonesia and the European Union accept that Article 3.5 does not prescribe how the
non-attribution analysis is to be conducted. See Indonesia's second written submission, para. 3.3; and
European Union's first written submission, para. 122. See also Appellate Body Report, US – Hot-Rolled Steel,
paras. 223 and 224.
430 See Panel Report, EU – Footwear (China), para. 7.483.
431 Preliminary Determination, (Exhibit IDN-3), recitals 70-73 (confirmed in Final Determination,
(Exhibit IDN-4), recital 65).
432 Preliminary Determination, (Exhibit IDN-3), recitals 80 and 81 (confirmed in Final Determination,
(Exhibit IDN-4), recital 71).
433 Preliminary Determination, (Exhibit IDN-3), recitals 64-66 (confirmed in Final Determination,
(Exhibit IDN-4), recital 62).
434 Preliminary Determination, (Exhibit IDN-3), recitals 70-72 (confirmed in Final Determination,
(Exhibit IDN-4), recital 65); and Final Determination, (Exhibit IDN-4), recitals 72 and 73.

consumption increased by 4.6% 435, sales of the dumped imports increased by 6.6% and their
market share increased by 1.9%, while sales of the domestic industry increased by only 4.3% and
its market share by only 1%. 436 At the same time, the domestic industry's prices decreased
by 5.3% vis-à-vis an increase in the dumped imports' prices of 5%. 437 In ou r view, it was not
unreasonable for the EU authorities to conclude from these indicators that the position of the
domestic industry deteriorated in the face of the dumped imports during the portions of the period
of investigation unaffected by the economic crisis.438
7.177. Second, the EU authorities assessed the impact of the crisis on the dumped imports and
the domestic industry respectively. In particular, during the economic crisis, the EU authorities
found that the domestic industry's sales decreased by 6.5%, a nd the dumped imports' sales
decreased by 6.7%. 439 The domestic industry's market share declined by 1%, and the dumped
import's market share declined by 2% 440, while domestic consumption decreased by 4.8%. 441 The
domestic industry's prices decreased by 16.9%, an d the dump ed imports' prices decreased
by 18%.442 Thus, the EU authorities recognized that both the domestic industry and the dumped
imports showed similar downward trends during the crisis. The EU authorities did not, however,
attribute these downward effec ts in the domestic industry to the presence of the dumped imports
in the European Union.443 On the contrary, the EU authorities recognized that:
The crisis played a role in the performance of the Union industry. Trends in injury
factors such as capacity util isation and sales volume show that the situation of the
Union industry worsened with the crisis and somewhat improved with the recovery in
the market.444
The EU authorities made similar observations in respect of the impact of the crisis on the
profitability of the domestic industry, the domestic industry's prices, and the domestic industry's
reduced level of demand and decreased production. 445 In our view, the EU authorities clearly
recognized that the economic crisis had an adverse impact on the domestic indu stry independent
of the impact of the dumped imports.

7.178. We now turn to the question of whether the conclusion reached by the EU authorities
based on this two-part approach satisfies the requirement of Article 3.5 to separate and distinguish
the injurious e ffects of the other known factor, namely, the economic crisis in the present case,
from those of the dumped imports. We recall that Indonesia argues that, in order to "separate and
distinguish" the effects of the dumped imports from the economic crisis, th e EU authorities were
required to examine the respective extent of the effects of these factors, because both factors

435 Preliminary Determination, (Exhibit IDN-3), recitals 64-66 (confirmed in Final Determination,
(Exhibit IDN-4), recital 62).
436 Preliminary Determination, (Exhibit IDN-3), recitals 70-73 and 80-82 (confirmed in Final
Determination, (Exhibit IDN-4), recitals 65, 71, and 73).
437 Preliminary Determination, (Exhibit IDN-3), recitals 70-72 (confirmed in Final Determination,
(Exhibit IDN-4), recital 65); Final Determination, (Exhibit IDN-4), recitals 72 and 73.
438 Final Determination, (Exhibit IDN-4), recitals 87 and 96. While the figures referred to in this and the
next paragraph appear to relate principally to calendar years in the period of investigation, it is apparent from
the determination that the EU authorities also evaluated these figures in view of the economic crisis. (See, in
particular, Preliminary Determination, (Exhibit IDN-3), recitals 73, 77, 79, 87, and 108). We also observe that
Indonesia does not take issue with the EU authorities' evaluation of movements in these figures vis-à-vis the
economic crisis. (See Indonesia's opening statement at the first meeting of the Panel, para. 76).
439 Preliminary Determination, (Exhibit IDN-3), recitals 70, 71, 80, and 81 (confirmed in Final
Determination, (Exhibit IDN-4), recitals 65 and 71).
440 Preliminary Determination, (Exhibit IDN-3), recitals 70, 73, 80, and 81 (confirmed in Final
Determination, (Exhibit IDN-4), recitals 65 and 71).
441 Preliminary Determination, (Exhibit IDN-3), recitals 64-66 (confirmed in Final Determination,
(Exhibit IDN-4), recital 62).
442 Preliminary Determination, (Exhibit IDN-3), recitals 70-72 (confirmed in Final Determination,
(Exhibit IDN-4), recital 65); and Final Determination, (Exhibit IDN-4), recitals 72 and 73.
443 Final Determination, (Exhibit IDN-4), para. 96; and Preliminary Determination, (Exhibit IDN-3),
recitals 104, 105, and 108.
445 See Preliminary Determination, (Exhibit IDN-3), recitals 87 and 104.

affected the domestic industry in the same manner, namely, lower prices and reduced demand. 446
Indonesia's argument implies, in effect, that the failure to use "quantitative assessment tools" or a
"basic quantitative method" in the present case leads to an inconsistency with Article 3.5.447 In
Indonesia's view, by failing to examine the extent of injury caused by the economic crisis vis-à-vis
the extent of injury caused by the dumped imports, the EU authorities failed to "separate and
distinguish" these factors under Article 3.5 of the Anti-Dumping Agreement.448
7.179. We disagree. As both parties acknowledge, Article 3.5 does not prescribe a particular
methodology for separating and distinguishing the injurious effects of the dumped imports from
other known factors. 449 The EU authorities assessed the impact of the dumped imports on the
domestic industry during periods when the economic crisis was not affect ing the industry, and
found downward trends during those periods. In our view, this provided a sufficient basis for them
to consider the impact of the dumped imports on the domestic industry and assess whether they
were causing injury independently of the effects of the crisis. The EU authorities also assessed the
impact of the economic crisis on both the domestic industry and the dumped imports, which
showed that the crisis had similar negative effects for both the domestic industry and the dumped
imports. As we have explained above, the EU authorities consequently did not attribute the
injurious effects experienced by the domestic industry as a result of the crisis to the dumped
imports.450 The EU authorities concluded that:
[T]he investigation showed that t he improvement [after the crisis] did not allow the
recovery of the Union industry which was far from its economic situation that
prevailed at the beginning of the period considered. Furthermore, as mentioned in
recital 89, 2008, just before the financial crisis started, was the year with the highest
increase in dumped imports from the countries concerned and the sharpest decrease
in sales volume of the Union industry. After that year the Union industry did not
recover and the dumped imports continued to be massively present in the Union
market. For these reasons it is clear that, regardless of other factors, dumped imports
largely contributed to the material injury suffered by the Union industry during the
IP.451
Therefore, the EU authorities inferred – both from the decline in the domestic industry's market
share in the face of the dumped imports before the crisis, and from the persistence of this reduced
market share after the crisis – that the dumped imports largely contributed to material injury
suffered by the domestic industry regardless of the economic crisis. 452 We do not consider this
conclusion to be unreasonable. If the economic crisis were the cause of injury to the domestic
industry during the period of investigation, we would expect to see the domes tic industry recover
after the crisis abated and its market position to approach what it had been before it suffered the
effects of both the crisis and the dumped imports. This was not the case. Although domestic
consumption increased by 4.6% after the cri sis, sales of the dumped imports increased
by 6.6%453, while sales of the domestic industry increased by only 4.3%, and this despite
reductions in domestic industry prices at a time when the prices of the dumped imports were
increasing.454 The dumped imports t hus performed better than the domestic industry after the
crisis, and the domestic industry's market share remained stagnant at the level to which it had
fallen as a result of the dumped imports before the crisis.

446 Indonesia's first written submission, paras. 5.48 and 5.49; opening statement at the first meeting of
the Panel, paras. 77 and 78.
447 See Indonesia's first written submission, fn 266, paras. 5.95 and 5.96; and opening statement at the
first meeting of the Panel, para. 60. Indonesia moved away from this emphasis on quantitative tools during the
proceedings (see Indonesia's second written submission, paras. 3.2 and 3.3).
448 Indonesia's opening statement at the first meeting of the Panel, paras. 77 and 78; first written
submission, paras. 5.48 and 5.49.
449 See Indonesia's second written submission, para. 3.3; and European Union's first written submission,
para. 122. See also Appellate Body Report, US – Hot-Rolled Steel, paras. 223 and 224; and Panel Report, EU –
Biodiesel (Argentina), para. 7.439.
450 See Final Determination, (Exhibit IDN-4), para. 96; and Preliminary Determination, (Exhibit IDN-3),
recitals 87 and 104.
451 Final Determination, (Exhibit IDN-4), recital 96.
452 See also Preliminary Determination, (Exhibit IDN-3), recitals 81, 98, and 106.
453 See above para. 7.176.
454 See above para. 7.176.

7.180. On the basis of the foregoing, we conclud e that Indonesia has not demonstrated that the
EU authorities acted inconsistently with Article 3.5 by failing to adequately separate and
distinguish the injurious effects of the economic crisis from those of the dumped imports.
7.4.3.3.2 Whether the EU authorities erred in determining the year of commencement of
the economic crisis
7.181. Indonesia takes issue with the EU authorities' statement in recital 96 of the Final
Determination that "[f]urthermore, as mentioned in recital 89, 2008, just before the financial crisis
started, was the year with the highest increase in dumped imports from the countries
concerned".455 Indonesia derives from this statement that the EU authorities ass umed that the
crisis started in 2009 – not 2008 – and therefore relied on 2008 as a year in wh ich injury could
have been caused only by the dumped imports, rather than by the dumped imports together with
the economic crisis.456
7.182. The European Union points to a series of other references in the Provisional and Final
Determinations that it contends demon strate the EU authorities understood the economic crisis to
have begun in 2008. 457 As we have stated above, we do not consider it inappropriate to take into
account passages of the determinations other than those in the section entitled "Causation" in
evaluating the consistency of the determinations with the European Union's obligations. 458 With
that in mind, we consider that the following passages from the EU authorities' determination show
that they understood that the injurious effects of the economic crisis on the domestic industry
began at some point in 2008:
The economic downturn has contributed to the decrease in consumption from 2008 ,
during which users of the product concerned experienced a drop in demand for their
products.459
The biggest increase [of ma rket share of the countrie s concerned] took place
between 2007 and 2008. There was a slight decrease of imports during the economic
crisis, which reduced the market share of the countries concerned by 2%, between
2008 and 2009.460
Furthermore, starting from 2008, with the overall economic slowdown and Union
consumption decrease, the exporters from the countries concerned managed to
maintain their market share, by reducing prices, still undercutting Union price.461
In light of these extracts, we do not accept Indonesia's factual assertion that the EU authorities
relied on 2008 as a year in which injury could have been caused only by the dumped imports,
rather than by the dumped imports together with the economic crisis. 462 We therefore conclude
that Indonesia has n ot demonstrated that the EU authorities acted inconsistently with Article 3.5
by erroneously attributing injury caused by the economic crisis in 2008 to the dumped imports.463

455 Indonesia's first written submission, para. 5.34; opening statement at the first meeting of the Panel,
paras. 63-71.
456 Indonesia's first written submission, paras. 5.35 and 5.41.
457 European Union's first written submission, paras. 140-142; second written submission, para. 115.
458 See above, para. 7.174.
459 Preliminary Determination, (Exhibit IDN-3), recital 66 (confirmed in Final Determination,
(Exhibit IDN-4), recital 62). (emphasis added)
460 Preliminary Determination, (Exhibit IDN-3), recital 73 (confirmed in Final Determination,
(Exhibit IDN-4), recital 65). (emphasis added)
461 Preliminary Determination, (Exhibit IDN-3), recital 108 (confirmed in Final Determination,
(Exhibit IDN-4), recital 102). (emphasis added)
462 See Indonesia's first written submission, para. 5.35.
463 In the light of this conclusion, we do not consider it necessary, for the effective resolution of the
dispute, to address other aspects of Indonesia's argument in this regard.

7.4.3.3.3 The EU authorities' alleged failure to address certain arguments and evidence
7.183. Indonesia argues that the EU authorities' analysis of the economic crisis failed to address
two matters raised by the interested parties during the investigation, namely, the arguments and
evidence presented on captive demand464 and improvements in Cognis' profitability.465
7.184. We observe at the outset that both parties relied on paragraph 7.267 of the panel report in
China – X-Ray Equipment during the proceedings, which states:
As a general proposition, we agree with China that if there is no relevant evidence
before an investigating authority to indicate that a factor is injuring the domestic
industry, there is no requirement for the investigating authority to make a finding
regarding whether the factor is indeed causing injury, and subsequently to proceed to
conduct a non-attribution analysis. In our view, where an interested party has raised
an "other factor", it would be preferable for an investigating authority to expressly
state that the party has not presented evidence that the factor is injuring the
domestic industry, rather than not mentioning the factor at all in its determination.
However, where there is indeed no such evidence before the investigating authority,
we agree that there can be no inconsistency with Article 3.1 and 3.5 in failing to
conduct a non-attribution analysis.466
Indonesia also makes reference to paragraph 7.279 of that panel report, which states, in pertinent
part, that "an investigating authority's reasoning does not need to refer to the precise terminology
used by parties to an investigation to describe a causal factor" and, further, that "it does not need
expressly to refer to all elements relevant to a particular causal factor, where it is evident that the
elements at issue have been implicitly considered". 467 In the context of the issue a t hand, we take
these principles to stand for the proposition that an investigating authority's determination need
not expressly address a particular argument or piece of evidence raised by an interested party
during an investigation where: ( a) the argumen ts or evidence at issue have been "implicitly
considered" in the authorities' determination; or ( b) the arguments or evidence at issue are of
insufficient probative value to warrant their express consideration in the determination. We do not
understand the parties to contest this proposition in the present case. 468 With that in mind, we
now address whether the EU authorities were required to expressly address the two matters
referred to by Indonesia.

7.185. We begin with the European Union's alleged failure to address the argument that the injury
to the domestic industry in 2008 was caused by the economic crisis, rather than the dumped
imports, because in late 2009 and early 2010 dumped imports from the countries concerned
(India, Indonesia, Malaysia) increased at t he same time as Cognis' profit improved considerably.
We observe in this respect that the EU authorities expressly acknowledged that there was some
degree of improvement in the domestic industry's position following the economic crisis. For
instance, the EU authorities acknowledged that there was an improvement in production and sales

464 Indonesia's first written submission, para. 5.64.
465 Indonesia's first written submission, paras. 5.61 and 5.62.
466 Indonesia's first written submission, para. 5.74; European Union's second written submission,
para. 112; and European Union's opening statement at the second meeting of the Panel, para. 36.
467 See Indonesia's first written submission, fn 288 (referring to Panel Report, China – X-Ray Equipment,
paras. 7.276-7.280); and Panel Report, China – X-Ray Equipment, para. 7.279. (emphasis original)
Paragraph 7.282 of the panel report in Thailand – H-Beams referred to by the panel in this passage of China –
X-Ray Equipment states:
While we would certainly have preferred a more robust examination of global demand in the
documents forming the basis for our review, including an explicit evaluation of the Kobe
earthquake and its effect on world prices and demand a s a possible other causal factor of injury,
we do not consider that Article 3.5 requires that the documents forming the basis for our review
expressly use the precise terminology with which a given factor was raised during the
investigation, nor an express indication that the investigating authorities have examined all
underlying or contributory causal elements which may comprise or influence a given causal factor
(in this case, global demand).
(emphasis original)
468 See, e.g. Indonesia's first written submission paras. 5.74 and 5.78 (citing these aspects of the panel
report in China – X-Ray Equipment); opening statement at the first meeting of the Panel, para. 86;
European Union's first written submission, paras. 118-121; and second written submission, para. 112.

in line with increased domestic consumption 469, and that economic recovery "allowed the …
[domestic] industry to reduce its losses with respect to turnover". 470 However, the EU au thorities
found that the domestic industry was not able to benefit from the recovery of consumption and
that its market share remained unchanged from the level to which it fell upon the onset of
dumping prior to the crisis. 471 Further, the dumped imports out performed the domestic industry
with respect to market share and sales following the crisis.472
7.186. The EU authorities' express consideration of the relevance and significance of positive
indicators in the domestic industry's performance following the economic crisis suggests that they
did take into account Cognis' improved profit margins, which of course were part of the
performance of the domestic industry. 473 We therefore conclude that their omission to explicitly
discuss this in their determination does not constitute a violation of Article 3.5.
7.187. Turning to the second matter referred to by Indonesia, Indonesia points to PT Musim
Mas' comments on the complaint and tables 5 and 6 of the Complaint to assert that PT Musim Mas
"made extensive arguments, supported by record evidence" on captive demand. 474 We have
reviewed these exhibits and do not accept Indonesia's assertion that extensive arguments
supported by record evidence were made. Table 5 of the Complaint indicates that "EU apparent
consumption", including capti ve consumption, decreased progressively from 2007 -2009. Table 6,
on the other hand, indicates that "EU apparent consumption" on the "free market" increased
between 2007 and 2008, before decreasing between 2008 and 2009. Although PT Musim Mas
asserted that this demonstrates that the "real problem" for the domestic industry was decreased
captive use, it did not accompany this assertion with evidence or data on the respective
proportions of captive consumption vis-à-vis "free market" consumption for the product concerned,
and therefore it is not possible to ascertain whether discrepancies between captive demand and
"free market" consumption are the "real problem" for the domestic industry. Further, although
PT Musim Mas asserted that the decrease in captive dem and is due to downstream consumers
switching from premium branded products to other less expensive equivalent products, no
probative record evidence has been brought to our attention that would substantiate this
assertion.475
7.188. We recall that the panel in Thailand – H-Beams stated "we do not consider that Article 3.5
requires … an express indication that the investigating authorities have examined all underlying or
contributory causal elements which may comprise or influence a given causal factor". 476 In the
light of the lack of supporting evidence proffered by PT Musim Mas, we do not consider that the
EU authorities acted inconsistently with Article 3.5 by failing to explicitly address captive demand.

469 Preliminary Determination, (Exhibit IDN-3), recitals 79 and 81 (confirmed in Final Determination,
(Exhibit IDN-4), recital 71).
470 Preliminary Determination, (Exhibit IDN-3), recital 87 (confirmed in Final Determination,
(Exhibit IDN-4), recital 78).
471 Preliminary Determination, (Exhibit IDN-3), recital 98 (confirmed in Final Determination,
(Exhibit IDN-4), recital 94).
472 Preliminary Determination, (Exhibit IDN-3), recital 98 (confirmed in Final Determination,
(Exhibit IDN-4), recital 94).
473 Moreover, we recall that the determination to be made is whether dumped imports caused injury to
the domestic industry. While the performance of individual producers of course drives the assessment of injury
to the domestic industry, and may be relevant in the assessment of causation, the mere fact that one
producer's performance improved, even if it improved more than that of other producers in the domestic
industry, does not necessarily require separate consideration by the investigating authority.
474 Indonesia's first written submission, para. 5.64 (referring to PT Musim Mas' comments on the
complaint, 4 October 2010, (Exhibit IDN -35), pp. 8 and 9); response to Panel question No. 47, paras. 4.1
and 4.3 (referring to PT Musim Mas' comments on the complaint, 4 Oct ober 2010, (Exhibit IDN -35), pp. 8-10;
and Anti-Dumping Complaint before the European Commission against imports of Fatty Alcohol originating in
India, Indonesia and Malaysia, submitted by Cognis GmbH, Sasol Olefins & Surfactants GmbH, 25 June 2010,
(Exhibit IDN-58), pp. 16 and 17).
475 We asked Indonesia to explain further how PT Musim Mas' argumentation and evidence suffices to
require an investigating authority to investigate the matter. In its response, Indonesia did not point to any
evidence to substantiate the assertion that the different patterns of consumption reflected in tables 5 and 6 of
the Complaint pertain to downstream consumers switching between premium and non-premium products, nor
how this, in turn, related to the assessment of injury in the context of the investigation. (See Indonesia's
response to Panel question No. 47, paras. 4.2-4.4).
476 Panel Report, Thailand – H-Beams, para. 7.282.

7.4.3.4 Conclusion on the economic crisis factor
7.189. We have concluded ab ove that Indonesia has not demonstrated that the EU authorities
acted inconsistently with Article 3.5 in their analysis of the economic crisis factor by: ( a) failing to
adequately separate and distinguish the injurious effects of the economic crisis from t hose of the
dumped imports; (b) erring in their determination of the year of commencement of the economic
crisis; or (c) failing to address certain arguments and evidence presented during the investigation
by interested parties. Since Indonesia has not dem onstrated a violation of Article 3.5 in respect of
the economic crisis factor, we likewise consider that Indonesia has not demonstrated a
consequential violation of Article 3.1 in respect of this factor.477
7.4.4 The EU authorities' analysis of "access to raw materials"
7.4.4.1 Main arguments of the parties478
7.4.4.1.1 Indonesia
7.190. Indonesia submits that PT Musim Mas provided detailed arguments and evidence on the
domestic industry's access to raw materials and the effects of fluctuations in the price of those
materials which the EU aut horities disregarded with the cursory statement: " the above parties
were not able to substantiate their claims".479
7.191. In Indonesia's view, it is unclear from this statement whether the EU authorities did not
find it necessary to consider these issues, or whet her they believed that they had addressed them
and concluded that they did not cause injury to the domestic industry. 480 However, Indonesia
submits that this represents a failure to provide a reasoned and adequate explanation, and further,
that although it i s for an investigated producer to substantiate that a particular factor is causing
injury, it is subsequently for an investigating authority to investigate and make a determination of
non-attribution.481 In Indonesia's view, the arguments and evidence provid ed by the investigated
producers were sufficient to satisfy the relevant threshold that triggers the obligation on an
investigating authority to analyse a factor allegedly causing injury and to provide a reasoned and
adequate explanation for its analysis, including why it considered the assertion unsubstantiated.482
In that regard, Indonesia emphasizes that it does not argue that the EU authorities violated
Article 3.5 because they did not conclude that this factor contributed to the injury, or because they
failed to separate and distinguish its injurious effects. Rather, Indonesia submits that the violation
flows from the EU authorities' refusal to even examine whether this factor was a contributor to the
injury suffered by the industry in the first place.483
7.192. Indonesia submits that PT Musim Mas raised this factor separately from the economic crisis
factor.484 In particular, PT Musim Mas explained that the EU industry faced a "structural
disadvantage" vis-à-vis Indonesian industry given their respective geographic proximity to sources
of the raw material, and the EU industry's resulting exposure to longer lead -times for delivery and
price fluctuations.485 According to Indonesia, this structural disadvantage manifested "in particular
during the financial crisis" 486, as e videnced by price data referred to by PT Musim Mas on the
significant price fluctuations during the 2008-2009 period.487

477 See Indonesia's first written submission, para. 5.66.
478 The arguments made by the United States as a third party pertaining to this factor are summarized
above in section 7.4.3.2. The other third parties did not make submissions on this point.
479 Indonesia's first written submission, paras. 5.75 and 5.76 (quoting Final Determination,
(Exhibit IDN-4), recitals 97 and 98). (emphasis original)
480 Indonesia's first written submission, para. 5.78.
481 Indonesia's first written submission, paras. 5.78 and 5.79.
482 Indonesia's first written submission, paras. 5.82 and 5.91.
483 Indonesia's response to Panel question No. 24, para. 1.101; second written submission, para. 3.5.
484 Indonesia's response to Panel question No. 20, para. 1.89.
485 Indonesia's response to Panel question No. 20, para. 1.91.
486 Indonesia's response to Panel question No. 20, para. 1.91.
487 Indonesia's response to Panel question No. 24, para. 1.96.

7.4.4.1.2 European Union
7.193. The European Union argues that the legal standard under Article 3.5 only requires
examination of factors other than dumpin g that are "known", which means that interested parties
must clearly raise and substantiate such factors with evidence during the investigation. 488 In
respect of the factor concerning access to raw materials and price fluctuations, the European Union
submits that it was clearly a matter pertaining to the conditions of competition and an element of
the price of the product, rather than a separate cause of injury. This is because the Indonesian
producers' easier access to raw materials is a geographically -determined constant that exists in
general, rather than a matter that materializes at some point in time and is not a structural
characteristic of the market. 489 In that regard, the European Union argues that the EU authorities
were entitled to reject further eva luation of the alleged injury factor concerning access to raw
materials and price fluctuations for lack of substantiation. 490 Rather, the EU authorities examined
this factor as one of the price -related elements of the conditions of competition that is addres sed
in the injury analysis.491
7.194. The European Union also argues that PT Musim Mas did not provide sufficient
argumentation and evidence on this factor to warrant examination by the investigating
authorities.492 In that regard, the European Union po ints to the br evity of
PT Musim Mas' submissions on this point 493, the fact that a time lag between ordering raw
materials and actual delivery would not have had a determining impact on the profitability of the
domestic industry since raw materials are traded at world mar ket prices 494, and the fact that
differing sources of raw material are substitutable but their prices did not correlate or develop in
parallel over time.495
7.195. Finally, the European Union argues that PT Musim Mas raised this factor only as a part of
the economic crisis factor and the distinction between the two is "entirely artificial". 496 In the
European Union's view, any possible developments in prices to which the interested parties
referred related to the economic crisis, and this factor was examined by the EU authorities.497
7.4.4.2 Evaluation by the Panel
7.196. We begin by setting out our understanding of what constitutes a "known factor" under
Article 3.5 that must be addressed by an investigating authority in its explanation. We recall, in
this regard, that both parties hav e referred to paragraph 7.267 of the panel report in China –
X-Ray Equipment, which states, inter alia , that "if there is no relevant evidence before an
investigating authority to indicate that a factor is injuring the domestic industry, there is no
requirement for the investigating authority to make a finding regarding whether the factor is
indeed causing injury". 498 Thus, an investigating authority need only address an alleged factor
raised by an interested party where sufficient evidence has been provided that the factor causes
injury. We further recall that Indonesia refers to paragraph 7.279 of the panel report in China –
X-Ray Equipment, which states, inter alia, that "an investigating authority's reasoning does not
need to refer to the precise terminolo gy used by parties to an investigation to describe a causal
factor" and, further, that "it does not need expressly to refer to all elements relevant to a
particular causal factor, where it is evident that the elements at issue have been implicitly

488 European Union's first written submission, paras. 118-121.
489 European Union's first written submission, para. 155.
490 European Union's first written submission, para. 158.
491 European Union's first written submission, para. 157.
492 European Union's response to Panel question No. 22, p. 23; second written submission, paras. 112
and 127-129.
493 European Union's response to Panel question Nos. 21, p. 22, and 23, pp. 25-27.
494 European Union's response to Panel question No. 22, pp. 24 and 25.
495 European Union's response to Panel question No. 22, pp. 23-25; first written submission, para. 156.
496 European Union's response to Panel question No. 23, pp. 26 and 27; second written submission,
para. 133.
497 European Union's response to Panel question No. 45, para. 28.
498 See Panel Report, China – X-Ray Equipment, para. 7.267; Indonesia's first written submission,
para. 5.74; European Union's second written submission, para. 112; and European Union's opening statement
at the second meeting of the Panel, para. 36.

considered".499 We agree with this understanding of "known factors" under Article 3.5 and see no
reason to deviate from it in the present case.500
7.197. The parties did, however, dispute whether the concept of "other known factors" causing
injury can encompass "structural d isadvantage[s]"501 in conditions of competition between the
domestic industry and the producers/exporters under investiga tion. On one hand, the
European Union argued that "access to raw materials … is not a factor causing injury but simply an
aspect of the c onditions of competition that may be reflected in price differences between the
imported products from Indonesia and domestic products". 502 For the European Union, "[t]he
cause of injury should be a change that materializes at some point in time and not a st ructural
characteristic of the market which is not subject to changes". 503 On the other hand, Indonesia
acknowledged that "'[r]aw materials' may indeed be an element within the competitive relationship
between the domestic and foreign producers", but asserte d that this "should [not] preclude this
factor from being a non-attribution factor in its own right within the meaning of Article 3.5".504
7.198. The question of whether "known factors" can encompass "structural disadvantages" in
conditions of competition between t he domestic industry and the producers/exporters under
investigation was recently addressed by the panel in EU – Biodiesel (Argentina). The panel in that
case reached the following conclusion505:
The two factors, namely lack of vertical integration and lack of access to raw
materials, identified by Argentina, essentially are inherent features of the EU domestic
industry that, according to Argentina, render it less competitive than the Argentine
producers. In our view, however, this line of argument is premise d on a misreading of
Article 3 of the Anti -Dumping Agreement and its various paragraphs, including
Article 3.5. The concept of injury envisaged by Article 3 relates to negative
developments in the state of the domestic industry.[*] Article 3 is not intende d to
address differences in the structure of the domestic industry as compared to that of
the exporting Member. Rather, it is clear from the text of Article 3.5 and from its
indicative list of such "other factors" – which all pertain to developments in the
situation of the domestic industry – that the authority is not required to conduct a
non-attribution analysis with respect to features that are inherent to the domestic
industry and have remained unchanged during the period considered by the
investigating authority for purposes of its injury analysis.
[*fn original]906 This is particularly clear from the text of Article 3.4, which requires consideration
of the evolution of the state of the domestic industry and calls upon the authority to consider,
inter alia, "declines" in various factors or indices.
We agree with this understanding of "known factors" as used in Article 3.5 of the Anti -Dumping
Agreement. Indonesia contends that several factors listed in Article 3.5 can be characterized as
aspects of condit ions of competition, such as "competition between the foreign and domestic

499 See Indonesia's first written submission, fn 288 (referring to Panel Report, China – X-Ray Equipment,
paras. 7.276-7.280); and Panel Report, China – X-Ray Equipment, para. 7.279. (emphasis original)
500 We note that Indonesia referred elsewhere to the statement of the Appellate Body in US – Line Pipe
that "[t]o be explicit, a statement must express distinctly all that is meant; it must leave nothing merely
implied or suggested; it must be clear and unambiguous". (See Indonesia's comments on the European Union's
response to Panel question No. 46, para. 5.9). This statement was a general reference to the "reasoned and
adequate" standard, and we do not consider it to stand for the principle that an investigating authority must
explicitly address every argument or piece of evidence in its explanation. Rather, as the Appellate Body stated
at paragraph 164 of US – Countervailing Duty Investigation on DRAMS, "we are of the view that Article 22.5
does not require the agency to cite or discuss every piece of supporting record evidence for each fact in the
final determination" (emphasis original). This accords with the statements of the panels in China – X-Ray
Equipment and Thailand – H-Beams to the effect that not every argument or piece of evidence concerning a
"known factor" need be explicitly addressed in an explanation when they are implicitly considered or when
insufficient evidence has been presented to warrant their consideration. (See Panel Reports, China – X-Ray
Equipment, paras. 7.267 and 7.279; and Thailand – H-Beams, para. 7.282).
501 Indonesia's response to Panel question No. 20, para. 1.91.
502 European Union's first written submission, para. 155.
503 European Union's first written submission, para. 155.
504 Indonesia's second written submission, para. 3.19.
505 Panel Report, EU – Biodiesel (Argentina), para. 7.522. (emphasis original)

producers", "changes in the patterns of consumption", "export performance", and "productivity of
domestic industry". 506 While those factors may exhibit features relating to conditions of
competition, they do not, in our view, relate to inherent disadvantages between the domestic
industry and the producers/exporters under investigation that are unchanged during the period
considered by the investigating authority for its injury analysis . Rather, the factors listed in
Article 3.5 all pertain to developments in the situation of the domestic industry. Matters such as
geographical proximity to raw materials are inherent features of the domestic industry, as opposed
to something that can develop or change and thereby cause injury.

7.199. Indonesia acknowledges that access to raw materials represented a "structural
disadvantage" to the domestic industry in the present case. 507 We agree with the European Union
that it does not constitute a "known facto r" causing injury to the domestic industry and therefore
requiring examination pursuant to Article 3.5. Further, since access to raw materials was not a
matter that the EU authorities were required to examine under Article 3.5, we do not accept
Indonesia's view that the EU authorities acted inconsistently with Article 3.5 by their "refusal to
even examine in the first place whether this factor was a contributor to the injury suffered by the
industry".508 If a matter does not qualify as a "known factor" in the first place, there is no
requirement to examine it under Article 3.5, regardless of the evidence and argumentation
presented pertaining to that matter.509
7.200. We recall, however, that PT Musim Mas' argument concerning "access to raw materials"
was augmented by evidence and argumentation concerning "significant fluctuations in [the main
input] prices" paid by the domestic industry.510 In particular, PT Musim Mas asserted that the main
input material accounts for between 80% and 90% of the price of the product under consideration,
and that the price of the main input material dropped from US D 1241/MT in July 2008 to
USD 899/MT in September 2008 before reaching US D 465/MT in December 2008. 511 We do not
exclude the possibility that this kind of price collapse could conce ivably represent a
"development[] in the situation of the domestic industry" 512 and could thus qualify as a "known
factor" under Article 3.5, particularly where it leads to negative effects for the domestic industry.
However, even assuming that this could qu alify as a factor under Article 3.5, we recall that an
investigating authority need only examine such factors upon the presentation of sufficient evidence
and argumentation by an interested party, and further, that an investigating authority need not
use the precise terminology or framing used by an interested party, nor explicitly address certain
evidence or argumentation where it has been implicitly considered in the determination. 513 On that
basis, as we explain below, we consider that the EU authorities d id not act inconsistently with
Articles 3.1 and 3.5 by failing to explicitly address fluctuations in the price of the main input
material as a standalone factor.
7.201. Our review of the record satisfies us that PT Musim Mas explicitly linked price fluctuation to
the economic crisis. PT Musim Mas explained that the exposure of the domestic industry to price
fluctuations was, in the present case, " particularly crucial in times such as the crisis in 2008 and
2009 when there were significant fluctuations in CPKO pric es from US$1241/MT in July 2008 to

506 Indonesia's second written submission, para. 3.19; opening statement at the first meeting of the
Panel, para. 85.
507 Indonesia's response to Panel question No. 20, para. 1.91.
508 Indonesia's response to Panel question No. 24, para. 1.101; opening statement at the first meeting
of the Panel, para. 87.
509 This flows from the text of Article 3.5, which states, in relevant part, "[t]he authorities shall also
examine any known factors other than the dumped imports which at the same time are injuring the domestic
industry" (emphasis added). While it is implicit that an investigating authority would need to assess, at first
instance, whether an alleged factor qualifies as a "known factor" within the meaning of Article 3.5, the only
requirement under Article 3.5 is to examine "known factors". There is no requirement to examine anything
other than "known factors", such as inherent features of the domestic industry affecting conditions of
competition. We therefore disagree with Indonesia's assertion that the third sentence of Article 3.5 imposes
duties on investigating authorities regarding matters that do not qualify as a "known factor". (See Indonesia's
opening statement at the second meeting of the Panel, para. 32).
510 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), p. 13.
511 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), p. 13.
512 Panel Report, EU – Biodiesel (Argentina), para. 7.522. (emphasis original)
513 See above para. 7.184.

US$899/MT in September 2008 and touching US$465/MT in Dec[ember] 2008".514 PT Musim Mas
likewise stated that " when market conditions are as volatile as in 2008 and 2009 , synthetic FOH
[Fatty Alcohols] producers and natural FOH producers in the targeted countries with integration
into CPKO supply fared better than the complainants". 515 According to PT Musim Mas, therefore,
the price fluctuations that allegedly caused injury to the domestic industry in the present case
were a fu nction of the economic crisis. Indeed, the main section in which PT Musim Mas raised
these issues in its comments on the complaint is entitled "Raw materials access particularly
important during the economic crisis".516
7.202. In our view, it was not improper for the EU authorities to address the price fluctuations in
the context of their assessment of the effects of the economic crisis rather than as a standalone
factor. It is undisputed that the EU authorities' explanation does not explicitly address price
fluctuation, including as a facet of the economic crisis factor. 517 The question before us, therefore,
is whether PT Musim Mas presented sufficient evidence and argumentation to warrant explicit
discussion of price fluctuation as a facet of the economic crisis fac tor, and whether this facet was
nonetheless implicitly considered in the EU authorities' explanation of the economic crisis factor.
7.203. Our review of the evidence and argumentation provided by PT Musim Mas on price
fluctuations reveals that it was not suffici ent to require their consideration as a separate other
known factor allegedly causing injury. PT Musim Mas asserted that many investigated producers of
the product under consideration enjoy a "formidable advantage as they are often integrated
producers with supply chain links all the way to oil palm plantation", without providing evidence for
that assertion. 518 PT Musim Mas also stated that "[t]ypically, the complainants would purchase
their raw material in Q1 for production in Q2 and subsequent FOH sales in Q3", which formed the
basis of their exposure to "greater market risk" – again without any supporting evidence
substantiating this assertion.519 PT Musim Mas further mentioned "the fact that [the complainants]
have to buy [the main input material] from FOH p roducers in Indonesia and Malaysia who have
controls over [its] supply" – again without any supporting evidence substantiating this assertion520,
and contrary to the complainants' assertion that crude palm kernel oil is not the only source of the
main input for the product under consideration.521
7.204. Therefore, a number of key aspects of PT Musim Mas' argument concerning price
fluctuations were not accompanied by the kind of evidence and data that we would expect an
interested party to adduce in order to warrant a n explicit examination of an alleged known other
factor causing injury and explanation in the authorities' determination. Indeed, it is questionable
whether PT Musim Mas' argumentation and evidence on this point sufficed to warrant any
consideration by the EU authorities. We need not resolve that question, since it is evident from the
explanation in the present case that the injurious effects of price fluctuations during the economic
crisis were considered by the EU authorities, at least implicitly. In part icular, the EU authorities
stated that522:
It was established that the profitability of the Union industry has been negative since
the beginning of the period concerned in 2007 and during the period considered the
losses increased significantly. After a reduction in losses in 2008, they increased again
significantly in 2009, at the time of the general economic crisis . The economic

514 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), p. 13. (emphasis
added)
515 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), p. 17. (emphasis
added)
516 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), pp. 12 and 13.
(emphasis added)
517 European Union's first written submission, para. 153; second written submission, para. 130;
response to Panel question No. 46, para. 34; and Indonesia's first written submission, para. 5.76.
518 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), p. 12.
519 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), p. 12.
520 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), p. 17.
521 Anti-Dumping Complaint before the European Commission against imports of Fatty Alcohol
originating in India, Indonesia and Malaysia, submitted by Cognis GmbH, Sasol Olefins & Surfactants GmbH,
25 June 2010, (Exhibit IDN-58), p. 30; and Sasol letter to the EU Commission, 28 January 2011,
(Exhibit IDN-60), p. 2.
522 Preliminary Determination, (Exhibit IDN-3), recital 87 (confirmed in Final Determination,
(Exhibit IDN-4), recital 78). (emphasis added)

recovery felt during the IP, however, allowed the Union industry to reduce its losses
with respect to turnover, but it remained still far away from returning to positive profit
levels.
From this, it is apparent that the EU authorities considered that the profitability of the domestic
industry was negatively affected during the economic crisis. This corres ponds to
PT Musim Mas' explanation that the "lack of direct access to raw material has played a crucial role
in the complainants' competitiveness and profitability, or the lack of it, in 2008/2009 ".523 In other
words, PT Musim Mas asserted that the price fluctuations caused by the econo mic crisis affected
the domestic industry's profitability, and the EU authorities explicitly addressed and took into
account the negative impact of the economic crisis on the domestic industry's profitability. In our
view, this demonstrates at least implic it consideration of price fluctuations, and is sufficient to
comport with the requirements of Article 3.5 in the present case, particularly in view of the
minimal evidence provided by PT Musim Mas on this point. Therefore, even assuming that price
fluctuations can qualify as another "known factor" within the meaning of Article 3.5, and even
assuming that PT Musim Mas provided sufficient evidence and argumentation to warrant some
consideration of this point by the EU authorities, we consider that the EU auth orities' explanation
suffices through its implicit consideration of that facet of the economic crisis.

7.205. In summary, Indonesia has not demonstrated that the EU authorities acted inconsistently
with Articles 3.1 and 3.5 of the Anti -Dumping Agreement by fail ing to address the domestic
industry's access to raw materials, since this does not constitute an other "known factor" within
the meaning of Article 3.5. Further, in view of the quality and quantity of the evidence provided by
PT Musim Mas, Indonesia has n ot demonstrated that the EU authorities acted inconsistently with
Articles 3.1 and 3.5 by failing to address explicitly the raw material price fluctuations during the
economic crisis. Accordingly, we find that Indonesia has not demonstrated that the EU aut horities
acted inconsistently with Articles 3.1 and 3.5 of the Anti -Dumping Agreement in respect of the
alleged "access to raw materials and price fluctuations" factor.
7.5 Indonesia's claim under Article 6.7 of the Anti-Dumping Agreement
7.206. Indonesia claims tha t the European Union acted inconsistently with Article 6.7 of the
Anti-Dumping Agreement by failing to disclose to interested parties the results of on -the-spot
investigations conducted at the premises of two Indonesian producers under investigation.524
7.5.1 Relevant provisions of the covered agreements
7.207. Article 6.7 of the Anti-Dumping Agreement authorizes investigating authorities, in order to
verify information or obtain further details, to carry out investigations in the territory of other
Members, subject to c ertain conditions. The relevant part of Article 6.7 at issue in this case is its
final sentence, which provides that:
Subject to the requirement to protect confidential information, the authorities shall
make the results of any such investigations availab le, or shall provide disclosure
thereof pursuant to paragraph 9, to the firms to which they pertain and may make
such results available to the applicants.
Article 6.9 of the Anti-Dumping Agreement states, in turn, that:

The authorities shall, before a fi nal determination 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.

523 PT Musim Mas' comments on the complaint, 4 October 2010, (Exhibit IDN-35), p. 12. (emphasis
added)
524 Indonesia's first written submission, para. 7.1.

7.5.2 Main arguments of the parties
7.5.2.1 Indonesia
7.208. For Indonesia, the information communicated by the EU authorities to the two Indonesian
producers under investigation (PT Musim Mas and Ecogreen) following the verifications conducted
at their premi ses, does not meet the standard set out in Article 6.7 of the
Anti-Dumping Agreement. Indonesia's claim focuses on "the substance of the EU's reporting of the
results – rather than on the manner in which the results were disclosed – that is, the procedural
means by which the EU complied with its obligation".525
7.209. Indonesia first contends that the term "results of any such investigations" in the context of
Article 6.7 must be interpreted consistently with the objective of on -the-spot investigations, which
is "t o verify the information provided or to obtain further details" .526 In this regard, Indonesia
submits that the panel in Korea – Certain Paper set out an appropriate standard for the scope of
the disclosure obligation contained in Article 6.7. That panel stat ed that the information
communicated by the authorities to the respondents must include "adequate information regarding
all aspects of the verification , including a description of the information which was not verified as
well as of information which was v erified successfully".527 In the case at hand, Indonesia submits
that EU authorities failed to meet this standard because:
a. No separate report was made available to the Indonesian producers following the
verification visit528; and
b. no disclosure of the verific ation results was made as part of the disclosure of essential
facts, which instead contained only general and cursory statements that did not properly
disclose these "results".529
7.210. In particular, for Indonesia, the EU authorities failed to disclose properly:
a. Which specific types of information, documents, or issues were addressed in the
verifications;
b. which particular documents were examined; and
c. what questions were asked by the EU authorities' officials or what answers were
provided by the producers under investigation.530
7.211. Further, Indonesia considers that the European Union conflates the obligations contained in
Article 6.9 ("to inform all interested parties of the essential facts under consideration which form
the basis for t[heir] decision") with the obligati on contained in Article 6.7 (to "make the results [of
the verification visits] available or to provide disclosure thereof pursuant to [ Article 6.9]").
Indonesia contends that disclosing the essential facts consistently with Article 6.9 is not sufficient
to comply with the "separate and distinct" obligation under Article 6.7 to disclose the results of the
on-the-spot investigation. 531 Indonesia specifically requests the Panel "[i]n its legal analysis,
therefore, bearing in mind the ordinary meaning, purpose, a nd context of the terms … [to] take
care to define the 'results' separately from the 'essential facts'."532
7.212. Indonesia points to specific issues which were allegedly not disclosed by the EU authorities
to interested parties although they w ere addressed during the visits : these issues include "the
close corporate, management, organizational and operational links between PT Musim Mas and

525 Indonesia's response to Panel question No. 27, para. 1.116.
526 Article 6.7 and Annex I(7) of the Anti-Dumping Agreement. See also Indonesia's first written
submission, paras. 6.21 and 6.22.
527 Panel Report, Korea – Certain Paper, para. 7.192. (emphasis added)
529 Indonesia's first written submission, paras. 6.6-6.12 and 6.52-6.54.
530 Indonesia's second written submission, para. 4.24.
531 Indonesia's first written submission, para. 6.62.
532 Indonesia's second written submission, para. 4.5.

ICOF-S; transfer pricing policy; the so-called 'direct' export sales by PT Musim Mas; the manner in
which ICOF-S and PT Musim Mas co-operate on such export sales as well as for domestic sales ;
and the fact that ICOF-S was involved in negotiating, preparing and executing each and every sale
of PT Musim Mas' products, including domestic sales".533
7.213. Finally, Indonesia submits that the lack of a proper disclosure prevented the investigated
producers from defending their interests during the subsequent stages of the proceedings. 534 In
particular, PT Musim Mas was allegedly unable to defend its interests effectively on the issue of the
existence of a single economic entity.535
7.5.2.2 The European Union
7.214. The European Union responds that Indonesia's assertions are based on an erroneous
reading of the obligation contained in Article 6.7 of the Anti -Dumping Agreement and are not
supported by the facts on the record.536
7.215. For the European Union, although Articles 6.7 and 6.9 set out two separate obligations, the
context afforded by Articles 6.6, 6.8, and 6.9 indicates that the term "results" in Article 6.7 refers
to the "essential factual outcome of the verif ication [visit]", and does not require a full report on
everything that happened during the on -the-spot verification.537 According to the European Union
therefore, the EU authorities were not required under Article 6.7 to prepare minutes of the
verification or lengthy explanations and descriptions on aspects of the verification which had no
further consequences.538
7.216. In fact, the European Union argues that it complied with both disclosure methods provided
for by Article 6.7 to either "make available" or "disclos e" the results of the verifications to the
investigated producers539:
a. by informing the Indonesian interested parties beforehand about the information that
was going to be verified;
b. by providing a list of exhibits collected during on-the-spot verifications; and
c. by providing the results of the verification visits as part of the general disclosure of
essential facts to Indonesian exporters and through the communication of a
company-specific report.540
The European Union submits in particular that the company -specific disclosure contains evidence
that "during the verification process mistakes and errors in the submission were corrected in
agreement with the company".541 The European Union considers that the "result" of the verification
"is the corrected information that was agreed upon with the interested parties in the context of the
on-site verification."542

7.217. Further, the European Union highlights that Indonesian producers were themselves present
during the verifications. As a consequence, Indonesia cannot claim th at the producers were
unaware of the developments which took place during the on -the-spot verifications. 543 The

533 Indonesia's second written submission, para. 4.25.
534 Indonesia's first written submission, paras. 6.34-6.39 and 6.46-6.48.
535 Indonesia's first written submission, para. 6.60.
536 European Union's first written submission, para. 165; second written submission, para. 198.
537 European Union's first written submission, para. 185; second written submission paras. 189 and 191.
538 European Union's first written submission, para. 167; response to Panel question No. 26, pp. 28-30.
539 European Union's second written submission, para. 196; response to Panel question No. 48,
para. 38.
540 Paras. 190 to 195 of the European Union's first written submission and para. 168 and fns 121
and 123 of the European Union's second written submission refer to specific recitals which allegedly aim at
complying with the obligation contained in Article 6.7.
541 European Union's first written submission, para. 174.
542 European Union's response to Panel question No. 49, para. 43; second written submission, para. 169
and fn 125.
543 European Union's second written submission, para. 171.

European Union notes that, throughout the proceedings, the investigated producers never
complained about a lack of transparency concerning the res ults of the verifications. On the
contrary, they engaged in a dialogue with the EU authorities in relation to all key aspects of the ir
determinations. T he written and oral comments made by PT Musim Mas in its responses
demonstrate that the information prov ided by the EU authorities w as sufficient to allow
PT Musim Mas to defend its interests.544
7.5.3 Main arguments of the United States as third party
7.218. The United States submits that the ordinary meaning of the term "results" in Article 6.7
refers to the "outcomes" of the verification process. 545 While the United States does not believe
that trivial or immaterial aspects of what occurred at the verification must be included in the
report, at a minimum it should include discussion of information that was verified, not ve rified, or
corrected with respect to the essential facts referenced in Article 6.9.546 The United States agrees
with Indonesia that failing to disclose information under Article 6.7, particularly as it relates to the
"essential facts" of an investigation und er Article 6.9, would deprive parties of the full opportunity
to defend their interests.547
7.5.4 Evaluation by the Panel
7.219. We begin by setting out our understanding of the legal standard under Article 6.7 of the
Anti-Dumping Agreement as relevant to the claim befo re us, before applying our understanding in
this regard to the relevant evidence on the record in the underlying investigation.
7.5.4.1 Legal standard under Article 6.7 of the Anti -Dumping Agreement: the "results"
of the on-the-spot investigations
7.220. We recall that the Anti-Dumping Agreement does not impose an obligation on investigating
authorities to conduct verification visits in the territory of other WTO Members. 548 However, when
authorities do so, they are required by Article 6.7 to communicate the "results of a ny such
investigations" to "the firms to which they pertain", that is, the companies subject to verification
visits. On its face, Article 6.7 provides for two possible methods to satisfy this disclosure
obligation. An investigating authority can decide to either:
a. make the results of the verification visit(s) available to the companies concerned, or
b. include the results of the verification in the disclosure of essential facts provided for
under Article 6.9.
7.221. The main point of contention between the parties in the present dispute concerns the
meaning of the term "results of any such investigations", which is common to both disclosure
methods provided for by Article 6.7. We thus begin our analysis with the ordinary meaning of the
term "results" in the context of Article 6.7. Black's Law Dictionary defines the term "result" as549:
1. A consequence, effect, or conclusion.
2. That which is achieved, brought about, or obtained, esp. by purposeful action.
Similarly, the Oxford English Dictionary defines the term "result" as550, inter alia:

544 European Union's first written submission, para. 196; second written submission, para. 172; and
response to Panel question No. 49, para. 50.
545 United States' third-party submission, para. 41.
546 United States' third-party submission, para. 42.
547 United States' third-party submission, para. 46.
548 See for example: Panel Report, Argentina – Ceramic Tiles, fn 65.
549 Black's Law Dictionary, 10th edn, B. A. Garner (ed.) (Rhomson Reuters, 2004), p. 1509.
550 Oxford English Dictionary, definition of "result", available at:
<http://www.oed.com/view/Entry/164061?isAdvanced=false&result=1&rskey=UhqxfU&>, accessed
14 July 2016.

a. The effect, consequence, or outcome of some action, process, or design, etc.
We thus understand the term "results" as used in Article 6.7 to refer to what is achieved, brought
about or obtained in the course of the on -the-spot verifications. The meaning of the term "results"
in this context is therefore directly connected to the purpose of such verifications, which is
described by the Anti -Dumping Agreement as: "to verify information provided or to obtain further
details."551

7.222. We t urn next to the meaning of the term "verify", which is defined in Black's Law
Dictionary as552:
1. To prove to be true; to confirm or establish the truth or truthfulness of; to
authenticate.
and in the Oxford English Dictionary as553:
2. To show to be true by demonstration or evidence; to confirm the truth or
authenticity of; to substantiate.
3.a. In passive : To be proved true or correct by the result or event, or by some
confirming fact or circumstance; to be fulfilled or accomplished in this way.
In view o f the ordinary meaning of the term "verify", we consider that the purpose of the
verification is therefore to enable the investigating authorities to confirm the accuracy of the
information supplied by the verified companies in, inter alia, their questionnaire response.

7.223. We find support for this view in the immediate context of Article 6.7. In particular, we
consider Article 6.6 highly relevant in this regard. While Article 6.6 is not at issue in this dispute,
we note that it establishes a general obligati on on investigating authorities, except where facts
available are relied upon, to "satisfy themselves as to the accuracy of the information supplied by
interested parties upon which their findings are based." Article 6.7554 is immediately preceded by
this general obligation, and in our view elaborates upon it by setting out more specific guidance in
the particular context of on-the-spot investigations in the territory of other Members. As the panel
in US – DRAMS stated:
Members could "satisfy themselves as to the accuracy of the information" in a number
of ways without proceeding to some type of formal verification, including for example
reliance on the reputation of the original source of the information. Indeed, we
consider that anti -dumping investigations would become totally unmanageable if
investigating authorities were required to actually verify the accuracy of all
information relied on.555
Further, the panel in Argentina – Ceramic Tiles stated556:

Article 6.6 of the AD Agreement thus places the burden of satisfying oneself of the
accuracy of the information on the investigating authority. As a general rule, the
exporters are therefore entitled to assume that unless otherwise indicated they are
not required to also automatically and in all cases submit evidence to demonstrate the
accuracy of the information they are supplying … We believe that if no on -the-spot
verification is going to take place but certain documents are required for verification
purposes, the authorities should in a similar manner inform the exporters of the
nature of the information for which they require such evidence and of any further
documents they require.

551 Article 6.7, first sentence and Annex I(7) of the Anti-Dumping Agreement.
552 Black's Law Dictionary, 10th edn, B. A. Garner (ed.) (Rhomson Reuters, 2004), p. 1793.
553 Oxford English Dictionary, definition of "verify", available at:
<http://www.oed.com/view/Entry/222511?redirectedFrom=verify&>, accessed 14 July 2016.
554 Including Annex 1 of the Anti-Dumping Agreement.
556 Panel Report, Argentina – Ceramic Tiles, para. 6.57.

7.224. These statements support the view that on -the-spot verifications involve a specific means
by which the authorities request the exporter to supply evidence of the accuracy of the information
supplied by the entity or entities subject to verification. The "results" of the verification should thus
reflect the outcome of this process. At a minimum, the authorities should disclose the p art of the
questionnaire response or other information supplied for which supporting evidence was
requested, whether any further information was requested, and whether documents were collected
by the authorities. Further, the results of the verification sh ould state whether the producer made
available the evidence and additional information requested and indicate whether the investigating
authorities were or were not able to confirm the accuracy of the information supplied by the
verified companies in, inter alia, their questionnaire responses.
7.225. We find support for our understanding in this regard in the report of the panel in Korea –
Certain Paper, in which the panel stated that:
[T]he purpose of the disclosure requirement under Article 6.7 is to make sure that
exporters, and to a certain extent other interested parties, are informed of the
verification results and can therefore structure their cases for the rest of the
investigation in light of those results. It is therefore important that such disclosure
contain adequate information regarding all aspects of the verification , including a
description of the information which was not verified as well as of information which
was verified successfully. This is because, in our view, information which was verifie d
successfully, just as information which was not verified, could well be relevant to the
presentation of the interested parties' cases.557
Although – as pointed out by the European Union 558 – this statement must be read in the light of
the specific dispute between Korea and Indonesia in that case, we are of the view that it provides
a correct assessment of the obligation contained in Article 6.7 in two important respects.

7.226. First, by referring to "information regarding all aspects of the verification", the panel made
clear that the scope of the results which must be made available or disclosed to the interested
parties is not limited. We read this to mean that the only limitation is that the information must
relate to the results of the verification. This is in contrast to the scope of the disclosure obligation
in Article 6.9 of the Anti -Dumping Agreement, which is limited to the " essential facts under
consideration which form the basis for the decision whether to apply definitive measures" .559 The
term "results" in Article 6.7 is only qualified by the term "of any such investigations". This implies
that the obligation to make available the results of the on -the-spot investigations is not limited to
the "essential" results of such investigations. Nor is it limited to facts which will eventually form
the basis of the decision to impose anti -dumping measures. With respect to the cross -reference
"shall provide disclosure thereof pursuant to paragraph 9 ", we read "disclosure thereof " as
referring to the "results" of the on-the-spot verification and the phrase "pursuant to paragraph 9 "
as referring to the date by which the disclosure must have been made , i.e. "before a final
determination is made" and with "sufficient time for the parties to defend their interests ". We thus
disagree with the European Union that the cross reference to Article 6.9 suggests that the term
"results" refers only to the essential factual outcome of the verification.560
7.227. Second, the panel in Korea – Certain Paper describes the disclosure obligation of
Article 6.7 as an important aspect of the due process rights of interested parties. In the present
dispute, Indonesia also submits that561:
It is in the light of this knowledge that the firm may subsequently decide to focus its
submissions on other issue s, for instance, on topics for which information may not
have been successfully verified. This will enable the firm effectively to allocate its
scarce resources in the course of the investigation.

557 Panel Report, Korea – Certain Paper, para. 7.192. (emphasis added)
558 European Union's response to Panel question No. 48, para. 36.
559 Emphasis added. The "essential facts" contemplated in Article 6.9 were described by the
Appellate Body in China – GOES as "those facts that are significant in the process of reaching a decision as to
whether or not to apply definitive measures". (Appellate Body Report, China – GOES, para. 240).
560 European Union's first written submission, para. 185.
561 Indonesia's first written submission, para. 6.38.

We agree. However, we consider that the disclosure obligat ion of Article 6.7 serves more than the
due process rights of the investigated firm. Indeed, as pointed out by the European Union in the
present case, the representatives of the investigated firm are normally present during the
on-the-spot verification and may therefore be presumed to be aware of the developments which
took place during the visit. 562 However, Article 6.7 specifically provides that the results of
verifications may be made available to the applicants, that is, the domestic producers seeking the
imposition of anti -dumping measures. These interested parties may well have an interest in the
results of the on-the-spot verification, for instance with respect to allowances that might be made
under Article 2.4 of the Anti-Dumping Agreement.

7.228. We do not mean to suggest that investigating authorities must address each argument or
each piece of evidence presented by the respondent during the verification. Nor do we mean to
suggest that " Article 6.7 require[s] the [investigating authorities] to prepare minu tes of the
verification … or to prepare lengthy explanations and descriptions on aspects of the verification
which had no further consequences or to draft a document setting out the verification team's
evaluation of the evidence and explanations that the c ompany provided on the spot."563 The
results made available or disclosed must nevertheless be sufficiently specific for the interested
parties to understand at a minimum those parts of the questionnaire response or other information
supplied for which supporting evidence was requested and whether:
a. any further information was requested;
b. the producer made available the evidence and additional information requested;
c. the investigating authorities were or were not able to confirm the accuracy of the
information supplied by the verified companies, inter alia in their questionnaire response.
7.229. Finally, we note that the disclosure obligation in Article 6.7 is unqualified and rests entirely
on the investigating authorities. The fact that the exporter did not request a ccess to the results of
the investigation, or the absence of a demonstrated impact on the due process rights of the
exporter, are irrelevant to an evaluation of whether the authorities have complied with Article 6.7.
Compliance with the provisions of Article 6.7 must be assessed solely on the basis of actions taken
by the investigating authorities to comply with this provision throughout the anti -dumping
investigation.
7.230. We now turn to the facts on the record in order to assess whether the information provided
by the EU authorities following the on-the-spot investigations was sufficient to comply with
Article 6.7 of the Anti-Dumping Agreement.
7.5.4.2 Whether the information provided to the producers under investigation complies
with Article 6.7
7.231. The European Union does not assert that a verification report was provided to the
Indonesian companies investigated.564 In response to Indonesia's argument that the EU authorities
provided to the interested parties only "one general statement in the Disclosure of Provisional
Findings"565, the European Union has drawn our attention to three documents:
a. The final disclosure document of August 2011.566

562 European Union's second written submission, para. 171.
563 European Union's second written submission, para. 159.
564 The Panel understands that this is consistent with the practice of EU authorities. See Committee on
Anti-Dumping Practices, Working Group on Implementation, Article 6.7, Conduct of Verification, Paper by the
European Communities, G/ADP/AHG/W/156 (10 March 2004), p. 3: "It is not the Commission's practice to
provide the companies with specific reports on verification visits. Rather, parties concerned receive, in
accordance with the last sentence of Article 6.7 of the Anti-Dumping Agreement and Article 20 of the Basic
Regulation the results of the verification visits as part of the disclosure of the findings of the investigation."
565 Indonesia's first written submission, para. 6.61.
566 Letter regarding disclosure of definitive findings, 2 August 2011, (Exhibit EU-10) (BCI). The Final
Disclosure sent to PT Musim Mas on 2 August 2011 included three annexes: The General Disclosure Document,
which is attached as Exhibit IDN-39 (General Disclosure Document, 26 August 2011, (Exhibit IDN-39)); the

The European Union further explains that the corrected response of the company must be read in
conjunction with the list of exhibits collected during the verification.574
7.234. Indonesia does not dispute that this information was made available to the Indonesian
producers under investigation by the EU authorities. However, Indonesia asserts that the
European Union attempts to "piece together a WTO -consistent disclosure o f the results of the
verification visits from scattershot sources and references in the record of the investigation".575 We
recall in this regard that Article 6.7 prescribes no particular format for the disclosure of the
verification results. As stated by th e panel in Korea – Certain Paper, Article 6.7 "requires that the
verification results be disclosed to the … [producers] without specifying the format in which such
disclosure is to be made ".576 The fact that the information provided by the authorities appear s in
separate documents does not matter as long as the information supplied allows interested parties
to understand the results of the verification.
7.235. We agree with the European Union that the corrections made to original response and the
lists of exhibits collected on-the-spot are "outcome [s]"577 of the verification visit. Taken together
however, these documents do not comprise the full extent of the "results" of the on -the-spot
investigation, as they fail to put the investigated producer (PT Musim Mas) – and this Panel – in a
position to understand in respect of which part of the questionnaire response or other information
supplied supporting evidence was requested , whether any further information was requested ,
whether the exporter made available the evidenc e and additional information requested, and
whether the investigating authorities were or were not able to confirm the accuracy of the
information supplied by the verified producers in , inter alia their questionnaire responses. By
looking at the "List of electronic files" attached to the confidential company -specific disclosure one
can understand that some of the original worksheets provided by PT Musim Mas were corrected
during the verification visit .578 However, we are unable to relate the corrections made to any
evidence that was verified or not verified by the EU authorities during on-the-spot verifications.579
7.236. We consider that the EU authorities did not make available or disclose the "results of any
such investigations" to PT Musim Mas , as required by Article 6.7, because they failed to explain
those parts of the questionnaire response or other information supplied for which supporting
evidence was requested and they also failed to explain whether:
a. any further information was requested;
b. the producer made available the evidence and additional information requested;
c. the investigating authorities were or were not able to confirm the accuracy of the
information supplied by the verified company, inter alia in its questionnaire response.
8 CONCLUSIONS AND RECOMMENDATIONS
8.1. For the reasons set forth in this Report, we conclude as follows:
a. With respect to the European Union's request for a preliminary ruling:

574 European Union's response to Panel question No. 49, paras. 48 and 49.
575 Indonesia's comments on the European Union's response to Panel question No. 49, para. 6.14.
576 Panel Report, Korea – Certain Paper, para. 7.188.
577 European Union's response to Panel question No. 49, para. 43.
578 We understand that worksheets 2.2, 2.3, 2.4, 2.9, 2.12, and 2.13 were amended on the basis of
"Exhibit 1", which is described in Exhibit EU-14 as "Corrections to Tables (hard copy + CD-ROM with 6 Excel
files)". We also understand that "Exhibits 8, 17 and 21" collected during the on-the-spot verifications are the
corrected versions of PT Musim Mas original response for worksheets 2.6, 2.4, and 2.2 respectively. (List of
exhibits provided to PTMM at the conclusion of the verification visit, (Exhibit EU-14) (BCI)).
579 For example, worksheet 2.2 of Exhibit EU-12, which is the Cost of Production table for PT Musim Mas
shows corrections made "from the combined exhibits 1 + 21": we cannot discern however if these corrections
were made by the company itself, or if they result from the verification by EU authorities of the company's cost
of production, or from the correction of mathematical errors made in the original submission. The same is true
for other worksheets included in Exhibit EU-12. (Excel file "PTMM definitive disclosure.xls", (Exhibit EU-12)
(BCI)).

i. the European Union has not demonstrated sufficiently that the correspondence sent
by the Permanent Mission of Indonesia to the WTO Secretariat on 11 July 201 3
constituted a request to suspend the work of the Panel in the sense of DSU
Article 12.12;
ii. the work of the Panel was not suspended; and
iii. the authority for the establishment of this Panel has not lapsed.
b. With respect to Indonesia's claims under Articles 2.3 and 2.4 of the Anti -Dumping
Agreement:
i. Indonesia has not demonstrated that the EU authorities acted inconsistently with
Article 2.4 by making an improper deduction for a factor that did not affect price
comparability; and
ii. Indonesia has therefore not demonstrated that the EU authorities consequently acted
inconsistently with Article 2.3.
c. With respect to Indonesia's claims under Articles 3.1 and 3.5 of the
Anti-Dumping Agreement:
i. Indonesia has not demonstrated that the EU authorities acted inconsistently with
Articles 3.1 and 3.5 in their analysis of the economic crisis factor; and
ii. Indonesia has not demonstrated that the EU authorities acted inconsistently with
Articles 3.1 and 3.5 in respect of the alleged "ac cess to raw materials and price
fluctuations" factor.
d. With respect to Indonesia's claim under Article 6.7 of the Anti -Dumping Agreement, the
EU authorities failed to make available or disclose the "results of any such
investigations" to PT Musim Mas, and therefore acted inconsistently with of Article 6.7 of
the Anti-Dumping Agreement.
8.2. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. We conclude that, to the extent that the measures at issue have been
found to be inconsistent with the Anti -Dumping Agreement, they have nullified or impaired
benefits accruing to Indonesia under that agreement.
8.3. Pursuant to Article 19.1 of the DSU, we recommend that the European Union bring its
measures into conformity with its obligations under the Anti-Dumping Agreement.