EUROPEAN UNION – ANTI-DUMPING MEASURES ON BIODIESEL FROM INDONESIA REQUEST FOR CONSULTATIONS BY INDONESIA
Document: REQUEST FOR CONSULTATIONS BY
Date: 17 June 2014
Document codes: WT/DS480/1; G/L/1071; G/ADP/D104/1
Complainant: Indonesia
Respondent: EU
Third parties: U.S., Japan, Turkey, Singapore, India, China, Canada, Argentina, Australia, Norway, Russia, Brazil, Ukraine
Dispute stage: Panel
Agreements cited: Art. 2.2, 2.2.1.1  Anti-dumpingArt. VI:1  GATT 1994Art. XVI:4  Agreement Establishing the World Trade OrganizationArt. 2.2.2(i), 18.4, 2.2.2, 2.2.2(iii), 2.4, 2.3, 9.3, 3.1, 3.4, 3.5, 6.5, 6.5.1, 7.1, 7.2, 9.2, 9.3, 1  Anti-dumpingArt. VI  GATT 1994

EUROPEAN UNION – ANTI-DUMPING MEASURES ON BIODIESEL FROM INDONESIA
REQUEST FOR CONSULTATIONS BY INDONESIA
The following communication, dated 10 June 2014, from the delegation of Indonesia to the
delegation of the European Union and to the Chairperson of the Dispute Settlement Body, is
circulated in accordance with Article 4.4 of the DSU.

My authorities have instructed me to request consultations with the European Union in accordance
with Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes ["DSU"], Article XXII:1 of the General Agreement on Tariffs and Trade 1994 ["GATT
1994"], and Articles 17.2 and 17.3 of the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994 ["the Anti-Dumping Agreement"], with respect to
the following measures, including any subsequent amendments, replacements, related measures
and implementing measures, which the Government of the Republic of Indonesia ["Indonesia"]
considers to be inconsistent with the obligations of the European Union under the relevant
provisions of the WTO Agreements:

I. Article 2(5) and Article 2(6)(b) of Council Regulation (EC) No 1225/2009 of 30 November
2009 on protection against dumped imports from countries not members of the European
Community ["Basic AD Regulation"]
1 as well as any subsequent amendments, replacements,
implementing measures and related instruments or practices.

II. The anti-dumping measures imposed by the European Union on imports of biodiesel
originating in, inter alia, Indonesia,
2 and the underlying investigation.

I. Claims concerning the Basic AD Regulation 3

A. The second paragraph of Article 2(5) of the Basic AD Regulation provides that "[i]f costs
associated with the production and sale of th e product under investigation are not reasonably
reflected in the records of the party concerned, they shall be adjusted or established on the basis
of the costs of other producers or exporters in the same country or, where such information is not
available or cannot be used, on any other reasonable basis, including information from other
representative markets." Indonesia considers that Article 2(5) of the Basic AD Regulation is

1 Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports
from countries not members of the European Community (codified version), OJ L 343, 22.12.2009, p. 51 and
corrigendum to Council Regulation (EC) No 1225/2009, OJ L 7, 12.1.2010, p. 22, as amended, including by
Regulation (EU) No 765/2012 of the European Parliament and of the Council of 13 June 2012, OJ L 237,
3.9.2012, p.1; Regulation (EU) No 1168/2012 of the European Parliament and of the Council of 12 December
2012, OJ L 344, 14.12.2012, p.1 and Regulation (EU) No 37/2014 of the European Parliament and of the
Council of 15 January 2014, OJ L18, 21.1.2014, p.1.
2 Commission Regulation (EU) No 490/2013 of 27 May 2013 imposing a provisional anti-dumping duty
on imports of biodiesel originating in Argentina and Indonesia, OJ L 141, 28.5.2013, p. 6 and Council
Implementing Regulation (EU) No 1194/2013 of 19 November 2013 imposing a definitive anti-dumping duty
and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and
Indonesia, OJ L 315, 26.11.2013, p. 2.
3 Including any subsequent amendments, replacements, implementing measures and related
instruments or practices.
WT/DS480/1 • G/L/1071 • G/ADP/D104/1

inconsistent as such with, inter alia, the following provisions of the Anti-Dumping Agreement, the
GATT 1994 and the Marrakesh Agreement Establishi ng the World Trade Organization ("Marrakesh
Agreement"):

1. Article 2.2 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994, because
these provisions do not permit the adjustment or establishment of the cost of production on the
basis of data or information other than that pertaining to the production in the country of origin.

2. Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994
because these provisions require that the costs be calculated on the basis of the records kept by
the producers under investigation when such records are in accordance with the generally
accepted accounting principles of the exporting country and reasonably reflect the costs associated
with the production and sale of the product under consideration and do not permit the adjustment
or replacement of the costs actually incurred by the producers under investigation by other costs,
simply because they are considered to be artificially low, depressed or distorted; and because
these provisions require that the costs used be associated with the production and sale of the
product under consideration.

3. Article 9.3 of the Anti-Dumping Agreement since, by failing to construct normal values in
accordance with Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreement, the amount of the anti-
dumping duty to be imposed exceeds the margin of dumping if correctly calculated on the basis of
the rules included in Article 2 of the Anti-Dumping Agreement.

4. Article XVI:4 of the Marrakesh Agreement an d Article 18.4 of the Anti-Dumping Agreement,
insofar as the European Union has not taken all steps to ensure the conformity of its laws,
regulations and administrative procedures with the provisions of the GATT 1994 and of the Anti-
Dumping Agreement.

B. Article 2(6)(b) of the Basic AD Regulation provides that if the amounts for selling, for
general and administrative costs and for profits cannot be determined on the basis of the actual
data pertaining to production and sales, in the ordi nary course of trade, of the like product, by the
exporter or producer under investigation, these amounts may be determined on the basis of the
"actual amounts applicable to production and sales, in the ordinary course of trade, of the same
general category of products for the exporter or producer in question in the domestic market of
the country of origin ." Indonesia considers that Article 2(6)(b) of the Basic AD Regulation is
inconsistent as such with, inter alia, the following provisions of the Anti-Dumping Agreement and
the Marrakesh Agreement:

1. Article 2.2.2(i) of the Anti-Dumping Agreement because this provision does not require that
the actual amounts incurred and realized in respect of production and sales of the same general
category of products by the exporter or producer in question in the domestic market of the country
of origin pertain to sales in the ordinary course of trade in order to be used for the determination
of the amounts for administrative, selling and general costs and profits.

2. Article XVI:4 of the Marrakesh Agreement an d Article 18.4 of the Anti-Dumping Agreement,
insofar as the European Union has not taken all steps to ensure the conformity of its laws,
regulations and administrative procedures with the provisions of the Anti-Dumping Agreement.

II. Claims concerning the anti-dumping me asures imposed on imports of Indonesian
biodiesel
4 and the underlying investigation

Indonesia considers that the anti-dumping measures imposed by the European Union on imports
of biodiesel originating in, inter alia, Indonesia and the underlying investigation are inconsistent
with the following provisions of the Anti-Dumping Agreement and of the GATT 1994:

1. Articles 2.2 and 2.2.1.1 of the Anti-D umping Agreement because the European Union
incorrectly determined the existence of a particular market situation as regards the cost of a raw
material used in the production of biodiesel by the Indonesian producers under investigation, as a
basis to adjust the cost of production of biodiesel.

4 Including any amendments thereof.
WT/DS480/1 • G/L/1071 • G/ADP/D104/1

2. Articles 2.1, 2.2 and 2.2.1.1 of the Anti-D umping Agreement and Article VI:1 of the GATT
1994 because in constructing the normal value for the Indonesian producers under investigation,
the European Union did not calculate the cost of production of biodiesel on the basis of the records
kept by these producers, and because the Europe an Union therefore failed to properly calculate
the cost of production and properly construct the normal value for these producers.

3. Articles 2.1 and 2.2 of the Anti-Dumping Agreement because the European Union failed to
construct the normal value for the Indonesian producers under investigation on the basis of the
cost of production of biodiesel in the country of origin, i.e. Indonesia.

4. Articles 2.1, 2.2 and 2.2.1.1 of the Anti-Dumping Agreement and Article VI:1 of the GATT
1994 because when constructing the normal value for the Indonesian producers under
investigation, the European Union included costs that do not reasonably reflect the costs
associated with the production and sale of biod iesel in Indonesia; and the methodology used by
the European Union for the adjustment of the actual cost of production was not reasonable and did
not result in the cost of production of biodiesel being reasonably reflected since, among others, for
some producers the adjustment was based on a feedstock that they did not actually use in the
production of biodiesel. The European Union ther efore failed to properly calculate the cost of
production and to properly construct the normal value for these producers.

Indonesia also considers that Article 2(5) of the Basic AD Regulation as applied in the investigation
underlying the anti-dumping measures is inconsistent with Articles 2.1, 2.2 and 2.2.1.1 of the
Anti-Dumping Agreement and Article VI:1 of the GATT 1994 as set forth in claims 2-4 above.

5. Articles 2.1, 2.2, 2.2.2 and 2.2.2(iii) of the Anti-Dumping Agreement because when
constructing the normal value for the Indonesian producers under investigation, the European
Union did not establish a cap for the profits as required by Article 2.2.2(iii); the amount for profits
established was not determined by the European Union on the basis of a reasonable method; and
the European Union improperly refused to base the amount for profits for some Indonesian
producers on the actual amounts incurred and realized in respect of production and sales in
Indonesia of the same general category of pr oducts. The European Union therefore failed to
properly construct the normal value for these producers.

6. Article 2.4 of the Anti-Dumping Agreemen t because when comparing the normal value and
the export price, the European Union failed to ma ke due allowances for di fferences affecting price
comparability including differences in taxation thereby precluding a fair comparison between the
export price and normal value on account of inter alia, the following:

(i) by comparing a constructed normal value that included a cost of production based on
reference prices of a raw material -- which are in turn based on international prices
that include the export tax on that raw material -- with export prices that reflected the
actual costs of the raw material incurred by the Indonesian producers under
investigation;
(ii) by deducting alleged commissions or mark -up on export sales to the European Union
that were made by an Indonesian producer via related companies located in a third
country;
(iii) by making an allowance for profits accruing to the Indonesian exporters’ related
importers in the European Union on a basis other than the actual profits that accrued
to the related importers in the European Union in the investigation period; by
rejecting the actual profits accrued; and by rejecting the positive evidence provided by
certain Indonesian producers with regard to the level of the notional profit margins of
the European Union importers of biodiesel.
7. Articles 2.3 and 2.4 of the Anti-Dumping Ag reement because the European did not construct
the export price for one Indonesian producer under investigation on the basis of the price at which
the imported biodiesel was first resold to independent buyers in the European Union or because
the European Union failed to make an adjustment to the export price for the premium received for
"double-counting" biodiesel by this Indonesian producer.
WT/DS480/1 • G/L/1071 • G/ADP/D104/1

8. Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 because the
European Union imposed and collected anti-dumping duties in excess of the margin of dumping
that should have been established in accordance with Article 2 of the Anti-Dumping Agreement.

9. Articles 3.1 and 3.2 of the Anti-Dumping Agreement because the European Union's
determination of injury to the Union industry did not involve an objective examination of positive
evidence regarding the volume of the allegedly dumped imports and the effect of those imports on
prices in the domestic market for biodiesel and the consequent impact of these allegedly dumped
imports on domestic producers of biodiesel. Firs t, with regard to the volume of the allegedly
dumped imports, the European Union failed to conduct an objective examination as it did not take
into account in its analysis, inter alia, the large volume of the allegedly dumped imports made by
the Union industry and the reversed trend in the volume of the imports at the end of the period of
investigation. Second, the European Union’s findings regarding the price effects of the allegedly
dumped imports including price undercutting were not based on an objective examination of the
evidence on the record as among others, the European Union did not ensure price comparability in
terms of physical characteristics and model-matching and based its determination of undercutting
on partial and unexplained sales of the sampled European Union producers.

10. Articles 3.1 and 3.4 of the Anti-Dumping Agreement because the European Union's injury
determination was not based on positive evidence and did not involve an objective examination of
the consequent impact of the allegedly dumped imports on domestic producers of the like product,
inter alia, in relation to the market share, capacity and capacity utilization of the Union industry
and the European Union failed to make a proper evaluation of the overall developments and
interaction among the injury factors taken together.

11. Articles 3.1 and 3.5 of the Anti-Dumping Agreement because the European Union failed to
conduct an objective examination, based on positive evidence, of the causal relationship between
the allegedly dumped imports and the allegedly inju ry to the domestic industry as the European
Union failed to make an objective determination, on the basis of all relevant evidence before it,
that the allegedly dumped imports were, through the effects of dumping causing injury and also
failed to conduct an objective examination, based on positive evidence, of factors other than the
allegedly dumped imports which at the same time were injuring the Union industry, and thus
attributed the injury caused by these other factors to the allegedly dumped imports. The other
factors include, inter alia, the effect of the "double-counting" regimes on the domestic demand for
biodiesel in the European Union, the effect of the reduction of support by the EU and its Member
States for biodiesel, the overcapacity of the Union industry, the imports of biodiesel made by the
Union industry, and the lack of vertical integration and access to raw materials of the Union
industry.

12. Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement because first, the European Union
treated certain information in the complaint and the submissions made in the course of the
investigation by the complainants as confidential, in the absence of the showing of "good cause",
and second, because the European Union failed to ensure the provision of sufficiently detailed non-
confidential summaries permitting a reasonable und erstanding of the substance of the confidential
information by the complainants as regards several annexes of the complaint and the
macroeconomic data submitted during the course of the investigation, and of certain information in
the questionnaire responses by the sampled Un ion producers or statements appropriately
explaining the reasons why particular pieces of confidential information were not susceptible of
non-confidential summarization.

13. Article 6.9 of the Anti-Dumping Agreement because the European Union failed to inform
interested parties of the essential facts under consideration which formed the basis for its decision
to apply definitive anti-dumping measures including essential facts underlying the determinations
regarding the existence of dumping, injury and causal link, and the calculation of the margins of
dumping and injury, thereby impairing the Indonesian producers’ ability to defend their interests.

14. Articles 7.1, 7.2, 9.2 and 9.3 of the An ti-Dumping Agreement because the European Union
incorrectly imposed on and collected from one Indonesian producer under investigation, a
provisional duty in excess of the margin of dumping established and corrected for it at the
provisional stage.
WT/DS480/1 • G/L/1071 • G/ADP/D104/1

15. Article 15 of the Anti-Dumping Agreement because the European Union failed to explore
possibilities of constructive remedies before appl ying anti-dumping duties on Indonesian biodiesel
imports as it did not actively consider the undertakings offered by two Indonesian producers under
investigation and because the European Union did not give special regard to the special situation
of Indonesia’s status as a developing country Member.

In view of the claims set forth above, Indonesia considers that the European Union has also acted
inconsistently with Article VI of the GATT 1994 and Article 1 of the Anti-Dumping Agreement.

The European Union’s measures noted above, theref ore, appear to nullify or impair, directly or
indirectly, benefits accruing to Indonesia under the cited Agreements.

Indonesia reserves its right to address, in the course of the consultations, additional measures and
claims in respect of the above matters including any amendment, replacement, extension,
implementation measures or other related issues.

Indonesia looks forward to receiving a reply from the European Union to the present request for
consultations. Indonesia is ready to discuss with the European Union a mutually convenient date
and modalities for organizing the consultations.