KOREA – ANTI-DUMPING DUTIES ON IMPORTS OF CERTAIN PAPER FROM INDONESIA (WT/DS312)
Document: Report of the Panel
Date: 28 October 2005
Document codes: WT/DS312/R
Complainant: Indonesia
Respondent: South Korea
Third parties: Canada, China, EU, Japan, U.S., Taiwan
Dispute stage: Panel
Agreements cited: Art. 5.4, 2.6, 3.1, 4.1, 5.2, 5.3, 5.7, 12.1.1, 6.5, 6.7, Annex I, Annex II, 6.8, 12.2, 2.1, 2.2, 2.4, 5.8, 9.3, 3.2, 3.4, 3.5, 3.7, 6.1, 6.4, 6.9  Anti-dumpingArt. VI:1, VI:2(a), VI:2(b), VI:6  GATT 1994

KOREA – ANTI-DUMPING DUTIES ON IMPORTS
OF CERTAIN PAPER FROM INDONESIA
(WT/DS312)

Report of the Panel

I. INTRODUCTION
1.1 On 4 June 2004, the Republic of Indonesia ("I ndonesia") requested consultations pursuant to
Article 4 of the Understanding on Rules and Pro cedures Governing the Settlement of Disputes ("the
DSU"), Article XXII:1 of the General Agreemen t on Tariffs and Trade 1994 ("the GATT"), and
Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994 ("Anti-Dumping Agreement") regarding, inter alia, the imposition by the Republic of
Korea ("Korea") of definitive anti-dumping duti es on imports of business information paper and
uncoated wood-free printing paper from Indonesia and certain aspects of the investigation leading
thereto.1 Korea and Indonesia consulted on 7 July 2004, but failed to settle the dispute.
1.2 On 16 August 2004, Indonesia requested the Dispute Settlement Body ("the DSB") to
establish a panel pursuant to Articles 4.7 and 6 of the DSU, Article XXIII:2 of the GATT, and
Articles 17.4 and 17.5 of the Anti-Dumping Agreement ("the Agreement").
1.3 At its meeting on 27 September 2004, the DS B established a Panel in accordance with
Article 6 of the DSU to examine the matter referred to the DSB by Indonesia in document
 At that meeting, the parties to the dispute also agreed that the panel should have
standard terms of reference. The terms of reference are, therefore, the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by Indonesia in document , the matter referred to the DSB by Indonesia
in that document, and to make such fi ndings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements."
1.4 On 18 October 2004, Indonesia requested the Di rector-General to determine the composition
of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. On 25 October 2004, the Director-
General accordingly composed the Panel as follows:
Chairman: Mr. Ole Lundby
Members: Ms. Deborah Milstein
 Ms. Leane Naidin
1.5 Canada, China, the European Communities, Jap an and the United States reserved their third-
party rights.
1.6 The Panel met with the parties on 1-2 February and on 30 March 2005. It met with the third
parties on 2 February 2005.
II. FACTUAL ASPECTS
2.1 On 30 September 2002, the Korea Trade Commi ssion ("the KTC") received an application
from the Korean producers for the initiation of an anti-dumping investigation on the imports of
"business information paper and wood-free printing pa per" originating in China and Indonesia. The
KTC sent questionnaires to four Indonesian comp anies: PT Indah Kiat Pulp and Paper Tbk
("Indah Kiat"), PT Pindo Deli Pulp and Paper Mill s ("Pindo Deli"), PT Pabrik Kertas Tjiwi Kimia
Tbk ("Tjiwi Kimia"), and PT Riau Andalan Kertas ("April Fine"). The KTC initiated the
investigation on 14 November 2002 and issued the public notice of initiation on 26 November 2002.
The original deadline for respon ses to the questionnaires sent to Indonesian companies was extended
by three weeks. Indah Kiat and Pindo Deli responded to the questionnaires in a timely manner, while
Tjiwi Kimia did not respond.

1 WT/DS312/1

2.2 The KTC carried out, between 24-27 March 2003, a verification visit to verify information
submitted by Indah Kiat and Pindo Deli. The KT C issued its preliminary determinations on
23 April 2003 in which it found a dumping margin of 11.56 per cent for Pindo Deli, 51.61 per cent for
Tjiwi Kimia and a negative dumping margin of 0.52 per cent for Indah Kiat. The KTC also made a
preliminary determination of threat of material injury. The KTC did not impose any provisional anti-
dumping duties.
2.3 The KTC issued its final determination on 24 Se ptember 2003. In the context of its final
determination, the KTC treated the three Indonesian companies which were part of the Sinar Mas
Group, i.e. Indah Kiat, Pindo Deli and Tjiwi Kimi a, as a single exporter and calculated one single
dumping margin for the three of them, which was 8.22 per cent. In its final determination, the KTC
made a determination of material injury. C onsequently, Korea imposed an anti-dumping duty of
8.22 per cent for the Sinar Mas Group companies, 2.80 per cent for April Fine and 2.80 per cent for
other Indonesian exporters.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
A.
INDONESIA
3.1 Indonesia requests the Panel to find that in imposing the anti-dumping duty at issue, Korea
acted inconsistently with its obligations under:
(a) Article 6.8 of the Agreement by rejecting domestic sales information
submitted by the Indonesian exporte rs Indah Kiat and Pindo Deli,
and the CMI financial statements, and instead resorting to facts
available to determine normal value for these exporters;
(b) Article 6.8 and paragraph 3 of Anne x II of the Agreement by failing
to follow the requirements of para graph 3 in rejecting the domestic
sales information submitted by Indah Kiat and Pindo Deli, and the
CMI financial statements and resorting to facts available to determine
normal value for these exporters;
(c) Article 6.8 and paragraph 6 of Anne x II of the Agreement by failing
to inform the exporters forthwith of the reasons why the domestic
sales information of Indah Ki at and Pindo Deli, and the CMI
financial statements, were being rejected and by failing to provide the
exporters with an opportunity to pr ovide further explanations within
a reasonable period of time;
(d) Article 6.8 and paragraph 7 of Anne x II of the Agreement by failing
to use special circumspection in using information from secondary
sources in the determination of normal value for Indah Kiat and
Pindo Deli.
(e) Article 6.8 and paragraph 7 of Anne x II of the Agreement by failing
to use special circumspection in using information from secondary
sources to determine the dumping margins for Tjiwi Kimia.
(f) Article 6.8 and paragraph 6 of Anne x II of the Agreement by failing
to provide Indah Kiat and Pindo Deli with an opportunity to provide
further explanations regarding Tjiwi Kimia within the meaning of
paragraph 6.

(g) Article 2.2 of the Agreement by failing to comply with the
requirements of Article 2.2 in de termining the normal values for
Indah Kiat and Pindo Deli.
(h) Articles 2.2, 2.2.1.1, 2.2.2. and 2.4 of the Agreement by improperly
calculating constructed values for Indah Kiat and Pindo Deli,
resulting in an unfair comparison with export price for these
exporters.
(i) Article 2.4 of the Agreement by failing to make due allowance for
differences affecting price comparability between export prices and
normal values for Indah Kiat and Pindo Deli.
(j) Articles 6.10 and 9.3 of the Agreement by failing to determine an
individual margin of dumping for I ndah Kiat, Pindo Deli, and Tjiwi
Kimia, resulting in the imposition of dumping duties in excess of the
margin of dumping established under Article 2.
(k) Article 5.8 of the Agreement by failing to terminate the investigation
of Indah Kiat when it failed to find dumping by that exporter.
(l) Article 6.7 of the Agreement by failing to provide Indah Kiat and
Pindo Deli with the results of the on-site verification of those
exporters.
(m) Articles 6.4, 6.9 and 12.2 of the Agreement by failing to disclose to
the exporters how it determined normal value, including the amounts
used to arrive at the constructed value.
(n) Articles 2.6, 3.1, 3.2, 3.4, 3.5, a nd 3.7 of the Agreement by defining
PPC and WF paper as a single like product and reaching its injury
determinations based on that definition.
(o) Articles 3.1, 3.2 and 3.4 of the Agreement by failing to base its
analysis of the price and volume effects of the imports under
investigation on positive evidence or involve an objective
determination and by imprope rly finding significant price
undercutting within the meaning of Article 3.2.
(p) Articles 3.1 and 3.4 of the Agreem ent by failing to properly consider
all relevant injury factors.
(q) Articles 3.1 and 3.5 of the Agreement by failing to properly establish
a causal link between any injury suffered by the Korean industry and
by failing to properly examine other known factors to ensure that
injury caused by those factors was not attributed to the imports under
investigation.
(r) Articles 3.1, 3.4 and 3.5 of the Agreement by failing to consider the
effect of the Korean industry's own imports in the injury and
causation analyses.
(s) Articles 3.1, 3.2 and 3.5 of the Agreement by treating imports from
Indah Kiat as dumped imports for the purpose of the injury analysis.

(t) Articles 6.1 and 6.9 of the Agreement by failing to establish a proper
period of investigation of injury.
(u) Articles 6.2, 6.4 and 12.2 of the Agreement by failing to provide the
exporters with information regarding its like product determination.
(v) Articles 6.4 and 6.9 of the Agreement by failing to disclose the basis
of its material injury determination.
(w) Article 6.5 of the Agreement by granting confidential treatment to
information contained in the domes tic industry's application without
a showing of good cause or requiring non-confidential summaries.
(i) Article 1 of the Agreement by not ensuring that an anti-dumping measure is
applied only under the circumstances provi ded for in Article VI of the GATT
and pursuant to investigations initiate d and conducted in accordance with the
provisions of the Agreement.
3.2 Indonesia requests the Panel to recommend, in accordance with Article 19.1 of the DSU, that
the DSB request Korea to bring its measure at is sue into conformity with the GATT and with the
Anti-dumping Agreement by repealing Regulation No . 330 of the Ministry of Finance and Economy
dated 7 November 2003 imposing definitive anti-dumping duties on imports of certain paper products
from Indonesia.
B.
KOREA
3.3 Korea requests the Panel to reject Indonesia's claims in their entirety.
IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the parties are set out in their written submissions and oral statements to the
Panel. The parties' arguments as presented in their submissions are summarised in this section.
A. FIRST WRITTEN SUBMISSION OF INDONESIA
4.2 The following summarizes Indonesia's arguments in its first submission.
1. Introduction
4.3 At issue in this dispute, Indonesia challe nges various aspects of the anti-dumping measures
imposed by Korea on imports of certain paper from Indonesia as inconsistent with Article VI of the
GATT, Article 1 of the Agreement, and the other provisions of the Agreement discussed herein.
2. Factual Background
4.4 The KTC, the governmental authority responsible for the conduct of anti-dumping
investigations in Korea, initiated this inves tigation on 14 November 2002, in response to an
application submitted by five Korean paper producers 2 (the "applicants" or the "domestic industry"). 3

2 The applicants were Shinho Paper, Hankook Paper, Hansol Paper, Dong- A Paper and Samil Paper.
The domestic producers expressing support for the application were Moorim, Shin-Moorim, Kyesung, Namhan,
Poongman, Hongwon, Samduk, Daehan and Pan-Asia. See Application for Investigation Necessary for
Imposing Anti-dumping duties, 30 September 2002 (English translation supplied by Indonesia) (the "Application
for Investigation") [Exhibit IDN-1(b)], pp. 16-18.
3 Application for Investigation [Exhibit IDN-1(b)].

The KTC investigated four Indonesian exporters, Indah Kiat, Pindo Deli, Tjiwi Kimia, and April Fine.
The KTC defined the "product subject to investigat ion" as including two categories of information
paper and uncoated woodfree paper:4 "PPC" (plain paper copier or business information paper used on
copies in businesses and home offices) and "WF" (uncoated wood-free printing paper used for
printing from printing presses, as well as for production of stationery items).
4.5 Indah Kiat and Pindo Deli each submitted deta iled information on all relevant domestic and
export sales of both WF and PPC paper. 5 All domestic sales were made through a trading company
called PT Cakrawala Mega Indah ("CMI"). Indah Ki at and Pindo Deli reported complete information
regarding sales both to CMI and resales by CMI (referred to hereinafter as the "domestic sales
information"). Tjiwi Kimia did not submit a questionnaire response, explaining instead that the
volume of its exports to the Korean market was t oo low to justify an active participation in the
investigation.
6
4.6 The KTC fully verified the domestic sales information submitted by Indah Kiat and Pindo
Deli. In its verification plan sent before the veri fications, the KTC requested for the first time that
Indah Kiat and Pindo Deli "prepare" financial st atements of CMI for the years 2001 and 2002 for
presentation at the verification 7 to enable the KTC "to understand Indah Kiat [Pindo Deli] in order to
carry out verification successfully." 8 At the verification, Indah Kiat and Pindo Deli explained to the
KTC that they would not be able to submit the financial statements of CMI because they did not
control CMI and therefore could not compel the production of its documents, even though they had
acted to the best of their ability.
4.7 The KTC did not provide any report on its on-s ite verifications. However, on 4 April 2003,
the KTC held a "disclosure" meeting, at which it announced that it intended to reject entirely the
domestic sales information and instead to resort to "facts available" to determine normal value.
9 The
KTC's stated ground for this was that Indah Kiat and Pindo Deli had not submitted the CMI financial
statements. However, the KTC agreed to accept th e CMI financial statements if they were submitted
by 10 April 2003. 10 By letters dated 9 April 2003, I ndah Kiat and Pindo Deli submitted CMI's
financial statements to the KTC. 11 Thus, these statements were submitted before the deadline of
10 April 2003 fixed by the KTC at the meeting of 4 April 2003, two full weeks before the KTC's
preliminary determination and more than five months before the KTC's final determination.
4.8 In its Preliminary Determination,
12 the KTC rejected the domestic sales information and used
facts available for both exporters on the ground that they had failed to provide relevant documents
such as the CMI financial statements. 13 Nevertheless, the KTC found that Indah Kiat, the largest

4 See, e.g., KTC, Investigation Report on Preliminary Calculation of Dumping Rate for Indonesian and
Chinese-made Business Information Paper and Uncoated Wood-Free Paper , 23 April 2003 (English translation
supplied by Indonesia) ("Preliminary Dumping Report") [Exhibit IDN 12(b)], pp. 11, 17.
5 April Fine also submitted a timely questionnaire response. Indonesia has not raised any claims
regarding the KTC's calculation of dumping margins for this exporter in this dispute.
6 Letter from Arvind Gupta, General Manager, Sinar Mas Group (on behalf Indah Kiat and Pindo Deli)
to Hyun Soo Kim, Deputy Director, Korean Trade Commission of 22 January 2003 [Exhibit IDN-19].
7 Ibid., p. 4 (item VII.1.B(d).
8 Ibid., p. 4 (item VII.1.A).
9 Affidavit by Won-Hyun Choi and Michael Shin, 24 November 2004 [Exhibit IDN-26].
10 Affidavit by Won-Hyun Choi and Michael Shin, 24 November 2004 [Exhibit IDN-26].
11 Letter from Arvind Gupta, General Manager, Sinar Mas Group (on behalf of Indah Kiat and Pindo
Deli) to Seung Jin Bae, Director, Dumping Investigation Division, Korean Trade Commission of 9 April 2003
[Exhibit IDN-10].
12 KTC, A Resolution for Preliminary Judgement on Dumping of Indonesian and Chinese-made
Business Information Paper and Wood-Free Prin ting Paper and Injury to Domestic Industry , 23 April 2003
(English translation supplied by Indonesia) ("Preliminary Determination") [Exhibit IDN-11(b)].
13 Preliminary Dumping Report [Exhibit 12 (b)], p. 8 (for Pindo Deli), p. 15(for Indah Kiat).

Indonesian exporter, had a dumping margin of minus 0.52 per cent.
14 The KTC found a dumping
margin of 11.56 per cent for Pindo Deli. For Tjiw i Kimia, the KTC used total facts available and
determined a dumping margin of 51.61 per cent.
4.9 On 1 September 2003, the KTC disclosed a dr aft version of its final determination15, in which
the KTC indicated that it had decided to calculate a single dumping margin for Indah Kiat, Pindo Deli,
and Tjiwi Kimia, even though it had stated at the preliminary phase that it was not permitted to do so
under Korean law. The KTC stated that it considered these exporters to be a "single economic entity."
In its Final Determination 16, the KTC calculated a dumping margin of 8.22 per cent per cent for the
"single economic entity" comprised of Indah Kiat, Pindo Deli and Tjiwi Kimia. The KTC continued
to reject the domestic sales information on the same grounds as before. The KTC also concluded that
the dumped imports had caused material injury to the applicants.
3. Legal Argument
(a) Claims arising from the determination of dumping
(i) Korea's use of "facts available" to calculate normal values for Indah Kiat and Pindo Deli was
inconsistent with Article 6.8 and Annex II of the Agreement
4.10 Under Article 6.8, the investigating authority may resort to facts available only if it has
established either that (a) the interested party si gnificantly impeded the investigation; or (b) the
interested party did not provide necessary inform ation (or refused access to necessary information)
within a reasonable period of time. The KTC did not determine that either circumstance applied in this
case and, indeed, could not reasonably have done so based on the evidence before it.
4.11 Both Indah Kiat and Pindo Deli cooperated in submitting complete questionnaire responses
and verifying those responses. No discrepancies we re found in any of these data during verification.
Both parties submitted the CMI financial statemen ts in accordance with the KTC's own revised
deadline and indicated their willingness to provide any further information. 17 The CMI financial
statements could be used, at the most, to permit th e KTC to perform an additional layer of verification
of already-verified data, which the KTC was not in any case required to verify exhaustively. 18 Thus,
these exporters did not significantly impede the investigation.
4.12 Moreover, these exporters did not fail to provi de "necessary information (or refused access to
necessary information) within a reasonable period of time" within the meaning of Article 6.8. The
domestic sales information was submitted in a timel y fashion, as were the CMI financial statements,
which were submitted one day in advance of the KTC's extended dead line, two weeks before the
KTC's preliminary determination and more than five months before its final determination.
4.13 Even assuming that the CMI financial statemen ts were untimely submitted, the KTC would
not be entitled to rely on that fact alone to ju stify discarding both the domestic sales information and

14 In its determination of dumping margins, the KTC used a period of investigation for dumping of
1 October 2001 to 30 September 2002.
15 KTC, Tentative Investigation Report on Dumping Rate circulated at 3 September meeting ,
3 September 2003.
16 KTC, Final Resolution on Dumping Imports of Indonesian and Chinese-made Business Information
Paper and Uncoated Wood-Free Printing Paper and Injury to Domestic Industry , 24 September 2003 (English
translation supplied by Indonesia) ("Final Determination") [Exhibit IDN-14(b)].
17 See Final Dumping Report [Exhibit IDN-15(b)], pp. 2-3, which contains charts indicating that all
information sought from Indah Kiat and Pindo Deli was submitted and supported by documentary evidence.
See also Affidavit by Roger Simpson, 24 November 2004 [Exhibit IDN-24].
18 Panel Report, US – DRAMs , para. 6.78 ("Article 6.6 does not explicitly require verification of all
information to be relied on").

the statements themselves. 19 The KTC should have found that, in light of all the facts and
circumstances, the financial statements were ne vertheless submitted within a reasonable period of
time20, as they were submitted merely 2 weeks after the initially stipulated deadline. Moreover,
Indah Kiat and Pindo Deli encountered difficulti es in obtaining and submitting the CMI financial
statements, which the KTC was required to take into account.21 Also, the KTC was provided with full
access to CMI's sales records during the verification. 22 The KTC had already verified the domestic
sales information, so the CMI financial statemen ts were not necessary within the meaning of
Article 6.8.23
4.14 The KTC also failed to comply with the requi rements of Article 6.8 and Annex II regarding
the use of facts available. The domestic sales info rmation, and the CMI financial statements, fulfilled
all four criteria of Paragraph 3 of Annex II. The domestic sales information was actually verified
extensively by the KTC. The CMI financial statemen ts could have been verifi ed by the KTC as they
were received in sufficient time for the KTC to do so. The domestic sales information was timely
submitted and could have been used without "undue difficulty." 24 Moreover, there is no reason why
the circumstances surrounding the submission of the CM I financial statements would make the use of
a distinct category of information, i.e., the domestic sales information, unduly difficult. 25 Finally, all
of the information at issue was submitted within the requested deadlines and in the requested media.
4.15 Paragraph 6 requires an investigating authority to give the supplying party an opportunity to
provide further explanations within a reasonable period . The KTC denied Indah Kiat and Pindo Deli
any opportunity to explain and rectify any "failu res" on which the KTC based its resort to facts
available. The KTC also failed to comply with the requirements of paragraph 7 of Annex II, by
failing to exercise "special circumspection" in its use of secondary information to determine the
normal values for Indah Kiat and Pindo Deli.
(ii) Korea's use of "facts available" to determine Tjiwi Kimia's dumping margin was inconsistent
with Article 6.8 and Annex II of the Agreement
4.16 In determining the normal value for Tjiwi Kimia, the KTC relied exclusively on data supplied
by the applicants and thereby failed to act with the "special circumspection" required under
paragraph 7. The KTC failed to check the inform ation on which it relied against other sources or the
information obtained from other interested parties during the course of the investigation. The massive
difference between the dumping margins yielded by the use of the applican ts' information and the
margins calculated by the KTC for the other exporte rs, indicates that not only did the KTC fail to
check the information provided by the applicants against other sources, but that the applicants' data
was wholly unreliable.
4.17 By weight-averaging the dumping margins for all three exporters, the KTC used Tjiwi
Kimia’s high facts available dumping margin to increase the dumping margin for Indah Kiat and
Pindo Deli. In this case, the KTC failed in its duty, pursuant to Annex II, paragraph 6, to notify these
exporters and to allow them an opportunity to pr ovide further information regarding Tjiwi Kimia's
sales and their relevance to the investigation.26

19 Appellate Body Report, US - Hot Rolled Steel, para. 89.
20 Ibid., para. 87.
21 Ibid., para. 104.
22 Affidavit by Roger Simpson, 24 November 2004 [Exhibit IDN-24].
23 See Affidavit by Roger Simpson, 24 November 2004 (Exhib it IDN-24). See also See Final Dumping
Report [Exhibit IDN-15(b)], pp. 2-3, which contains charts indicating that all information sought from
Indah Kiat and Pindo Deli was submitted and supported by documentary evidence.
24 Ibid., para. 7.72.
25 Ibid., para. 7.67.

(iii) Korea's use of constructed value to determin e normal values for Indah Kiat and Pindo Deli
was inconsistent with Articles 2.2 and 6.8 of the Agreement
4.18 The "constructed value" is one of three possibl e means of calculating "normal value" set out
in Article 2.2 of the Agreement. Under Article 2. 2 of the Agreement, the KTC could have departed
from the use of home market sales as the basis for no rmal value only if it had made one of the three
findings specified in that Article. The KTC made none of these findings. It did not conduct the
viability test of Indonesian market demand becau se it could not review the completeness of the
domestic sales data.
27 It did not perform the "sales below co st" test in order to determine whether
there were sufficient domestic market sales in the ordinary course of trade. 28 Finally, the KTC did not
find a "particular market situation" in Indonesia within the meaning of Article 2.2.
(iv) Korea's calculation of constructed value for I ndah Kiat and Pindo Deli was inconsistent with
Articles 2.2, 2.2.1.1, 2.2.2 and 2.4 of the Agreement
4.19 The KTC's use of the constructed value as the basis for normal value for Indah Kiat and
Pindo Deli was inconsistent with Articles 2.1 and 2.2 of the Agreement. The KTC's calculation
contains several substantive errors. 29 First, the KTC based its calculation in part on the use of facts
available, even though the KTC found no errors or deficiencies whatsoever in the exporters’
reporting. Second, the KTC added financing expenses attributed to CMI to the calculation, even
though CMI is merely a reseller that did not incu r any manufacturing-related financing costs. By
adding the financing expenses of Indah Kiat a nd Pindo Deli, the KTC overstated these expenses.
Third, the KTC erred by relying on the [[Company A]] 30’s SG&A expenses as a proxy for CMI’s
expenses, because [[Company A]] 31’s expenses related to manufacturing as well as selling activities.
The KTC's errors resulted in an overstatement of the cons tructed value and rendered its
determinations inconsistent with Articles 2.2, 2.2.1.1, and 2.2.2, governing the calculation of the
constructed value. These errors also lead to an unfair comparison between normal value and export
price, contrary to the requirements of Article 2.4.
(v) Korea's failure to make a fair comparis on between normal value and export price by
adjusting for selling expenses was inconsistent with Article 2.4 of the Agreement
4.20 There was a clear difference between Indah Kiat 's and Pindo Deli's domestic market sales and
their export sales that affected the price comparab ility of these sales. The exporters’ domestic sales
were made via a reseller, CMI, to the first unr elated purchaser. CMI undertakes selling activities of
its own in making the resales. In contrast, the exporters do not provide any distribution services on
their export sales of the kind performed by CMI in the Indonesian market. The KTC should have
adjusted for selling activities undertaken by CMI to reflect the difference in price comparability
caused by the different circumstances of the domes tic market sales. By failing to do so, the KTC
acted contrary to Article 2.4 of the Agreement. 32 Finally, the KTC added CMI's SG&A expenses to
the constructed value calculated for Indah Kiat and Pindo Deli, for the purposes of its sales below cost
test. However, the KTC did not subsequently remove these expenses for the purpose of the dumping
margin calculation, resulting in an unfair comparison and a further violation of Article 2.4.

27 Final Dumping Report [Exhibit IDN-15(b)], p. 9.
28 Ibid.
29 Final Dumping Report [Exhibit IDN-15(b)], p. 11.
30 Korea requests that the data in square brackets be treated as confidential.
31 Ibid.
32 Final Dumping Report [Exhibit IDN-15(b)], p. 13 st ates that only transpor tation and packing costs
were deducted from normal value.

(vi) Korea's treatment of Indah Kiat, Pindo Deli, and Tjiwi Kimia as a single economic entity was
inconsistent with Articles 6.10 and 9.3 of the Agreement
4.21 The KTC should have calculated separate dumping margins for Pindo Deli, Indah Kiat and
Tjiwi Kimia, which are separate and distinct lega l entities. Absent specific legal authorisation under
the Agreement, an investigating authority cannot treat distinct exporters that are separate natural or
legal persons as a single "exporter" for the purpose of calculating dumping margins.
4.22 Article 6.10 permits investigating authorities to depart from the requirement to calculate a
separate margin for each exporter only in th e case of “sampling” where there are too many
exporters.33 While other provisions of the Agreement, such as Articles 4.1(i) and 2.3, expressly
authorizes investigating authorities to take into account affiliations between distinct legal entities,
Article 6.10 does not do so, and contains no st andards for doing so. By treating Indah Kiat,
Pindo Deli, and Tjiwi Kimia as a single exporter, the KTC has impermissibly read into the text of
Article 6.10 a concept that cannot be found in the text.
 34 By imposing an anti-dumping duty on
Indah Kiat in excess of the de minimis margin of dumping actually established for this exporter, the
KTC also acted inconsistently with Article 9.3 of the Agreement.
(vii) Korea's failure to terminate the investigation of Indah Kiat was inconsistent with Article 5.8
of the Agreement
4.23 Indah Kiat's individual dumping margin of minus 0.52 per cent in the Preliminary
Determination was less than 2 per cent. 35 Accordingly, by failing to terminate the investigation in
respect of Indah Kiat the KTC breached its obligations under Article 5.8 of the Agreement.
(viii) Korea's determinations contain several violations of the disclosure obligations contained in
Articles 6.4, 6.7, 6.9 and 12.2 of the Agreement
4.24 The KTC failed to make an adequate and detaile d disclosure of the results of the verification
visits, in violation of Article 6.7 of the Agreemen t. The KTC's failure to specifically disclose how and
why it arrived at normal values for Indah Kiat and Pindo Deli, including how it had complied with
Article 2.2 in reaching its final determination, is inconsistent with its obligations under Articles 6.4
and 6.9 of the Agreement. This failure also re nders the KTC’s determina tion inconsistent with
Article 12.2.2, governing the public notice of the conclusion of the investigation, all relevant
information and a full explanation of the reasons for the methodology used.
(b) Claims relating to the determination of injury and causal link
(i) The KTC's treatment of PPC and WF Paper as "like products" was inconsistent with
Articles 2.6, 3.1, 3.4, 3.5 and 3.7 of the Agreement
4.25 During the investigation, the exporters argued that PPC and WF are not "like products" within
the meaning of the Agreement. They argued that the KTC should have separately considered (1) the
effect of Indonesian PPC imports on Korean PPC producers and (2) the effect of Indonesian WF
imports on Korean WF producers for the purposes of its injury analysis.
36

33 Appellate Body Report, US – Sunset Reviews on Corrosion-Resistant Steel , para. 154. See also
Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 116.
34See Appellate Body Report , India – Patents, para. 45, where the Appellate Body stated that
"principles of interpretation neither require nor condone the imputation into a treaty of words that are not there
or the importation into a treaty of concepts that were not intended."
35 KTC, English Summary of Preliminary Determination, 9 May 2003 [Exhibit IDN-23], p. 5.
36 Ibid.

4.26 The KTC did not address the question of whether PPC and WF are "like products" but instead
whether Korean PPC is identical to Indonesian PPC and whether Korean WF is identical to
Indonesian WF. Thus, the KTC fundamentally misc onstrued the issue before it. Rather than
conducting the proper enquiry into whether PPC and WF were "like products" the KTC instead
merely enquired into the question, not in dispute, of whether Korean and Indonesian PPC, and Korean
and Indonesian WF, were each "like products." Th is inquiry was simply irrelevant to the essential
issue of whether PPC and WF are "like products." The KTC also failed to examine evidence showing
that these products were different like products. T hus, the KTC’s decision to treat these products as a
single like product was inconsistent with Article 2.6.
(ii) Korea's failure to conduct its injury and causal link determinations in an objective manner
and to base these determinations on positive evidenc e was inconsistent with Articles 3.1, 3.2,
3.4, 3.5 and 3.7 of the Agreement
4.27 In examining whether there was significant price undercutting within the meaning of
Article 3.2, the KTC did not properly evaluate evidence in the years 2000, 2001 and 2003, the prices
of the investigated imports were higher than the prices charged by the Korean producers in their
domestic market, resulting in violations of Articles 3.1 and 3.2.
4.28 Regarding the injury factors listed in Article 3.4, the KTC failed to properly evaluate these
factors in the manner described by the Panel in EC – Bed Linen (Article 21.5 – India).
37 While the
KTC's injury determination recites the trends in many relevant factors, it does not contain any
objective examination of these trends or explain how these trends support a finding of "material"
injury.38 In fact, the trends in many of the injury factors offered no support for the KTC’s conclusion.
The KTC’s failure to properly evaluate these fa ctors rendered its findings inconsistent with
Articles 3.1, 3.2, 3.4 and 3.7 of the Agreement.
4.29 In its causation analysis, the KTC failed to address the decline in demand in the Korean
market that affected the imports under investigation even more than it affected the Korean industry's
own shipments. In addition, the evidence before the KTC indicated that the prices of the imports
under investigation were greater than those charged by the domestic industry for much of the period
of investigation. The KTC also failed to conduct any further analysis of whether imports from other
sources may also have caused injury to the Kore an industry. The KTC also failed to consider
properly that the domestic industry's exports had dec lined sharply over the period of investigation.
The KTC’s failure to properly evaluate these fa ctors rendered its findings inconsistent with
Articles 3.1 and 3.5 of the Agreement.
4.30 The KTC failed to properly consider the impact on its analysis of the condition of the
domestic industry of the fact that the Korean industry itself accounted for a very large portion of the
total imports from Indonesia and China by the Kore an producers themselves, which cannot be said to
have caused injury to the Korean industry themsel ves. Finally, Indah Kiat's exports (with their
de minimis margins) to Korea should have been classifi ed as non-dumped imports and treated as such
throughout the KTC's injury analysis. These failur es rendered the KTC’s determination inconsistent
with Articles 3.1, 3.2, 3.4, 3.5 and 3.7 of the Agreement.
(iii) Korea's injury determinations contain several violations of the disclosure obligations
contained in Articles 6.1, 6.4 and 6.9 of the Agreement
4.31 The KTC's decision to extend the period of investigation for injury to include the first
6 months of 2003
39, without permitting the Indonesian expor ters access to or any opportunity to

37 Panel Report, EC – Bed Linen (Article 21.5 – India), para. 6.162.
38 Ibid., p. 14.
39 Final Staff Report [Exhibit IDN-16(b)].

comment on the additional data, deprived the Indonesi an exporters of their rights under Article 6.1 to
an ample opportunity to present evidence relevant to the determination. This was also inconsistent
with the requirement of Article 6.1.2 that all information submitted by the domestic producers should
be promptly made available to the Indonesian indus try and that of Article 6.4 that the KTC provide
timely opportunities to see all relevant information used by the KTC and to prepare presentations
based on this information. Finally, the KTC acted in consistently with Article 6.9, which requires the
KTC to inform the Indonesian exporters of the essen tial facts under consideration that form the basis
of the KTC's decision, in sufficient time for the Indonesian exporters to defend their interests.
4.32 The KTC also failed to comply with its obligations under Articles 6.2, 6.4 and 12.2 of the
Agreement by failing to provide the Indonesian exporters with inform ation relating to its
determination on the issue of like products. By failin g to disclose details of its price effects analysis
and the basis of its injury determination prior to th e final determination, the KTC acted inconsistently
with its obligation under Article 6.4 and 6.9 of the Agreement.
(iv) Korea improperly granted confidential treatment to information contained in the Domestic
Industry's application in violation of Article 6.5 of the Agreement
4.33 The KTC granted confidential treatment to info rmation contained in the domestic industry's
application domestic industry without (i) requiring th e applicants or the domestic industry to provide
showing of good cause for such a treatment; (ii) requiring the applicants or the domestic industry to
furnish non-confidential summaries "in sufficient de tail to permit a reasonable understanding of the
substance of the information submitted in confiden ce"; or (iii) any indication that the information
could not be summarized and the reasons why summarization was not possible. This was inconsistent
with Articles 6.5, Article 6.5.1 and Article 6.5.2 of the Agreement.
4. Request for Findings, Rulings and Recommendations
4.34 In the light of the considerations set out above , Indonesia requests the Panel to find that in
imposing its anti-dumping measure against certa in paper products from Indonesia, Korea acted
inconsistently with its obligations under Article 6.8 and paragraphs 3, 6, and 7 of Annex II, and
Articles 2.2, 2.2.1.1, 2.2.2, 2.4, 3.1, 3.2, 3.4, 3.5, 3.7, 5.8, 6.4, 6.5, 6.9, 6.10 and 12.2 of
the Agreement.
4.35 Korea has also failed to respect its obligations under Article VI of the GATT and Article 1 of
the Agreement to ensure that an anti-dumping measure is applied only under the circumstances
provided for in Article VI of the GATT and pursuan t to investigations in itiated and conducted in
accordance with the provisions of the Agreement. Indonesia requ ests the Panel to recommend, in
accordance with Article 19.1 of the DSU, that the DSB request Korea to bring the measure at issue
into conformity with the GATT and with the Agreement.
5. Suggestions on Implementation
4.36 By the time the Panel issues its report on this matter, Indonesian exporters will have been
subject to the measure at issue for nearly two years.
40 This measure has imposed, and continues to
impose, a significant financial burden on Indonesia’ s exports. In these circumstances, Indonesia
requests that the Panel exercise its discretion under Article 19.1 of the DSU to suggest ways in which
Korea could implement the Panel's rulings and recommendations. Given that Korea's violations of its
obligations under the Agreement in this case pervad ed its investigation and were fundamental to the
outcome of the investigation, Korea could not revi se its determinations in accordance with the rulings
and recommendations requested by Indonesia wit hout reaching negative determinations of both

40 The KTC's Final Determination was issued in Sept ember 2003; the Panel's report is expected to be
issued in July 2005.

dumping and injury.
41 Accordingly, Indonesia requests that the Panel suggest that Korea repeal
Regulation No. 330 of the Ministry of Fina nce and Economy dated 7 November 2003 imposing
definitive anti-dumping duties on imports of certain paper products from Indonesia.
B. FIRST WRITTEN SUBMISSION OF KOREA
4.37 The following summarizes Korea's arguments in its first submission.
1. The KTC’s procedures were fair
4.38 Indonesia’s claims in this proceeding are based on the contention that the KTC did not allow
the Indonesian respondents — and, in particular, the respondents that were subsidiaries of the
Indonesian Sinar Mas Group — a fair opportunity to defend their interests.
4.39 The evidence in this case demonstrates, however , that the KTC’s investigatory procedures
provided ample opportunity for all parties to submit information and arguments. For example:
• As part of its initiation process, the KTC prep ared a detailed report reviewing the accuracy
and adequacy of the application and made that report publicly available on its web-site.

• After initiating the investigation, the KTC is sued detailed questionnaires to the Indonesian
respondents with explicit descriptions of the required information.

• Prior to verification, the KTC consulted with the designated representative of the Sinar Mas
Group respondents concerning the location of the materials needed for verification, and then
sent a detailed verification work-plan to the Indonesian respondents.

• Shortly after verification, the KTC held a disclosure meeting, at which it provided to all
parties (including the Sinar Mas Group’s representatives) a written disclosure of the proposed
preliminary dumping calculations, and an oral description of the problems encountered at the
verification.

• In connection with its preliminary determinati on, the KTC issued a written explanation of its
decision on the dumping and injury issues, as we ll as two additional reports by its KTC’s
Office of Investigations (one describing all of the information gathered in the dumping and
injury investigations, and the other specifically focused on the information and issues relating
to the dumping margin calculations and res ponding to the arguments presented by the
interested parties). The non-confidential ve rsions of these documents were posted on the
KTC’s web-site and mailed to the desi gnated representative of the Sinar Mas Group
respondents. In addition, the confidential ve rsion of the report on the preliminary dumping
margin calculations was faxed to the desi gnated representative of the Sinar Mas Group
respondents.

• After its preliminary determination, the KT C requested that the domestic producers of
uncoated “wood-free” paper provide updated injury-related info rmation, in accordance with
its normal practice. The updated information was summarized by the KTC in an “interim
report.”

• Before it issued its final determination, the KTC held a hearing on injury issues and a separate
disclosure meeting on dumping margin calculation issues. At the injury hearing, the KTC
provided copies of its “interim report” to a ll parties — including the designated Sinar Mas

41 Panel Report, Argentina – Ceramic Tiles, paras. 8.6-7.

Group representatives. At the dumping disclosur e meeting, the KTC provided a copy of a
written disclosure of the proposed final dumping calculations. Because the representatives of
the Sinar Mas Group respondents did not attend the disclosure meeting, the KTC faxed the
written disclosure of the proposed final dumpi ng calculations to the designated Sinar Mas
Group representative.

• After the injury hearing and dumping disclos ure meetings, the Sinar Mas Group respondents
were given an opportunity to comment on the materials provided. And, in fact, the Sinar Mas
Group respondents did submit comments after those materials were provided to them.

• In connection with its preliminary determinati on, the KTC issued a written explanation of its
decision on the dumping and injury issues, as we ll as two additional reports by its KTC’s
Office of Investigations (similar to those issued in connection with the preliminary
determination).

These procedures gave the parties full notice of the re quired information, and also provided all parties
with a reasonable opportunity to comment on the information that had been gathered. While
Indonesia has attempted to concoct complaints a bout the KTC’s procedure and disclosure, those
claims simply do not withstand scrutiny.
4.40 Nevertheless, despite the KTC’s efforts to en sure a fair proceeding, the Sinar Mas Group
deliberately refused to provide n ecessary information. Two of the Group’s mills — Indah Kiat and
Pindo Deli — did respond to the KTC’s questionnair es and did participate in the verification.
However, a third Group mill — Tjiwi Kimia — simply refused to respond to the KTC’s
questionnaires at all. Another Group subsidiary — CMI, which handled all domestic sales by Indah
Kiat and Pindo Deli — refused to provide the KTC access to its financial statements or accounting
records during the verification, even though the designated representative of the Sinar Mas Group
mills had been informed in advance that those materials would be required and had assured the KTC
that the necessary materials would be available. More generally, the KTC found at verification that
the representatives of the Sinar Mas Group companies had engaged in delaying tactics and had been
“insincere and uncooperative all throughout the on-the-spot investigation.”
4.41 In light of these facts, Indonesia’s suggestion that the Sinar Mas Group mills were treated
unfairly is unsustainable. Those companies were given more than adequate opportunities to defend
their interests. It is not the KTC’s fault that the Sinar Mas Group decided, instead, to impede the
investigation and withhold necessary information.
2. The KTC’s dumping determination was cons istent with the requirements of the
Agreement
(a) Single dumping margin for the Sinar Mas Group Mills
4.42 Indonesia’s primary complaint about the dumping calculations concerns the KTC’s decision
to calculate a single dumping margin for the Sinar Mas Group mills. According to Indonesia, the fact
that the Sinar Mas Group mills are legally distinct under Indonesian corporate law required the KTC
to assign separate dumping margins to each, under the provisions of Article 6.10 of the Agreement.
4.43 But, Article 6.10 does not speak in terms of “corporations.” Instead, it states that, “as a rule,”
the authorities shall “determine an individual margin of dumping for each known exporter or
producer ... of the product under investigation.” Noth ing in the Agreement precludes investigating
authorities from applying a functional definition of “exporter” — and thus treating separate
corporations that act as a single entity as one “exporter or producer” for purposes of Article 6.10.

4.44 The evidence in this case dem onstrated that the Sinar Mas Group mills had intertwined
management structures, that they operated under the oversight of a single “corporate marketing” unit,
and that all of the reported sales in the domes tic market made through a single affiliated sales
organization (CMI). In these circumstances, it wa s plainly reasonable for the KTC to treat the
Sinar Mas Group mills as a single “exporter” for purposes of Article 6.10. Indonesia certainly has not
identified any provision of the Agreement that precludes the KTC from interpreting the term
“exporter” in that manner.
(b) Facts available for Tjiwi Kimia
4.45 Indonesia also asserts that the KTC improperly determined the export price and normal value
for sales by Tjiwi Kimia based on relatively unfavourable information contained in the Korean
producers’ initial application. According to Indonesia, the KTC should have assigned an export price
and normal value to Tjiwi Kimia that reflected the information submitted by the other mills that did
respond to the KTC’s questionnaires, despite Tjiwi Ki mia’s complete failure to cooperate with the
investigation. In addition, Indonesia argues th at the KTC had an obligation to warn the other
Sinar Mas Group mills that Tjiwi Kimia’s failure to respond might adversely affect the overall
dumping margin assigned to the Group.
4.46 Contrary to Indonesia’s claims, however, pa ragraph 7 of Annex II of the Agreement
specifically authorizes investigating authorities to reach a “less favourable” result when “an interested
party does not cooperate and thus relevant informati on is being withheld.” Indonesia has not claimed
that the information in the application (which the KTC relied upon to determine the export price and
normal value for Tjiwi Kimia) was not “adequate and accurate.” And, it also has not identified any
obligation in the Agreement that would have requi red the KTC to warn the other Sinar Mas Group
companies of the consequences of their selective cooperation. Consequently, there is no basis for
Indonesia’s claims.
(c) Facts available for sales through CMI
4.47 Indonesia also claims that the KTC erred in rejecting the su bmitted data on CMI’s domestic
resales of Indah Kiat and Pindo Deli products, due to CMI’s refusal to allow access to its financial
statements and accounting records. According to Indonesia, any deficiencies were cured after
verification, when the Sinar Mas Group submitted two worksheets purporting to reflect CMI’s income
statements for 2002 and 2003.
4.48 But this late submission could not cure the problems caused by CMI’s previous refusal to
cooperate. The CMI financial statements and accoun ting records were needed by the KTC to verify
the accuracy of the submitted domestic sales data. CMI’s refusal to allow access to those documents
at verification — even though they had been requested both in the original questionnaire and again in
the verification plan — prevented verificati on of the submitted domestic sales data.
4.49 Contrary to Indonesia’s claims, the KTC never asked the Sinar Mas Group to submit the CMI
statements after verification, and never set a pos t-verification deadline for the submission of those
statements
42. CMI’s failure to allow access to those documents when they were needed at verification
made any subsequent submission untimely. More over, the submission the Sinar Mas Group actually
made after verification did not cure the problem, be cause there was no way for the KTC to verify the
accuracy of the submitted worksheet s, or to use the worksheets to verify the submitted CMI sales
data, without scheduling another verification and having further access to CMI’s accounting records.

42 See Affidavit of Sang-Deok Han, Deputy Director, Dumping Investigation Division,
18 December 2004, Exhibit KOR-39.

4.50 As a separate matter, Indonesia also argues th at, even if the CMI sales data was properly
rejected, the KTC was not permitted to base norma l value on “constructed value” without following
the hierarchy established by Article 2.2 of the Agreement (under which c onstructed value normally
would not be used unless there was a finding that the “particular market situation” or “low volume” of
sales precluded the calculation of normal value based on domestic market sales). Indonesia also
objects to the method used by the KTC to calculate co nstructed value — in particular, the inclusion of
an amount corresponding to CMI’s selling, general and administrative (“SG&A”) expenses — and the
KTC’s refusal to allow a “level-of-trade” adjustment reducing normal value.
4.51 It is true that, in this case, the KTC was not ab le to determine whether there was a “particular
market situation” or “low volume” of sales. But the KTC’s inability to make that determination was
the direct consequence of the Sinar Mas Group’s re fusal to provide comple te data and to permit
verification. The Sinar Mas Group should not, therefore, be heard to complain about the KTC’s
failure to conduct an analysis that had been re ndered impossible by the Sinar Mas Group’s lack of
cooperation. And, in any event, the use of constr ucted value was consistent with the overall context
of the Agreement, because it allowed the KTC to reduce its reliance on “secondary sources,” which
are disfavoured as a source of facts available under paragraph 7 of Annex II of the Agreement.
4.52 Finally, the inclusion of an amount corres ponding to CMI’s SG&A expenses was appropriate
to ensure that the normal value was calculated at the same level of trade as the sales that were used to
determine the export price. The information s ubmitted by the Sinar Mas Group respondents indicated
that the sales from CMI to its cust omers were at the same level of trade as the sales from the mills to
their customers in Korea. Because the export pr ice was based on sales from the mills to Korean
customers, the KTC properly included in normal value the expenses incurred in selling to CMI’s
customers in the domestic market (at the same level of trade as the export sales). For the same reason,
there was no basis for making an adjustment to reduce normal value to account for differences in level
of trade.
(d) Continuation of investigation after determination of de minimis preliminary dumping margins
for Indah Kiat
4.53 Indonesia argues that, under Article 5.8 of the Ag reement, the investigation should have been
terminated with respect to Indah Kiat at the time of the KTC’s preliminary determination, because the
KTC preliminarily calculated a de minimis dumping margin for Indah Kiat. It should be noted,
however, that Article 5.8 applies only when the au thorities are “satisfied” that there is no dumping,
and only when termination is appropriate for the entire “investigation” or “case.”
4.54 In this case, the de minimis dumping margin for Indah Kiat was calculated based on a
company-specific analysis, and did not reflect a finding of no dumping for the “case” or
“investigation” as a whole. Moreover, the KTC’ s preliminary determination specifically reserved
judgment on the issue whether the Sinar Mas Group companies should be considered separate
“exporters” or a single “exporter” in its analysis. Thus, it is clear that, when the KTC made its
preliminarily determination, it was not “satisfied” that there was no dumping.
4.55 Moreover, the entity covered by the KTC’s fina l determination (the single, “collapsed” Sinar
Mas Group exporter) was not the same as the en tity for which the KTC had preliminary found
de minimis margins (the Indah Kiat corporation). Consequently, the de minimis preliminary dumping
margin for Indah Kiat did not require termina tion of the investigation for the Sinar Mas Group
“exporter.”

3. The KTC’s injury determination was also consistent with the requirements of the
Agreement
4.56 Indonesia’s arguments concerning the issues rela ting to the injury determination are also
unconvincing. Indonesia essentially concedes that the KTC analyzed all of the factors relevant to the
injury determination. It appears that Indonesia’s main complaint is that it would have preferred that
the KTC assign different weights to the various factors it considered. Such arguments do not,
however, provide a basis for finding the KTC’s injury decision inconsistent with the requirements of
the Agreement.
(a) Definition of like product
4.57 Indonesia also asserts that the KTC’s injury anal ysis was distorted by an incorrect definition
of the domestic “like product” and, hence, of the domestic industry. According to Indonesia, the “like
product” defined by the KTC subsumed two distinct items — plain pape r copier paper sold in smaller
sheets and “other” wood-free paper sold in rolls or larger sheets — which are too dissimilar to be
considered a single “like product.
4.58 On closer examination, however, the factual di stinction proposed by Indonesia does not hold
up. In fact, the evidence on the record demonstrat es that plain paper copier paper was sometimes
initially sold in rolls or larger sheets, and then cut by the customer into the smaller sheets described by
Indonesia.
4.59 More importantly, the legal standard proposed by Indonesia has no basis in the Agreement.
The Agreement’s definition of “like product” (which is found in Article 2.6) specifies that the “like
product” should be defined by similarity to the imported “product under investigation” — and not by
differences among the products produced by the domestic industry. This interpretation was recently
upheld by the Panel in the US – Softwood Lumber case, which held that the Agreement does not create
an obligation to limit the like product to a single group of products sharing characteristics.”
4.60 The KTC’s approach to the like product defin ition in this case focused on the similarities
between the imported product under investigation and the products produced by the domestic
industry. It was, therefore, entirely consistent with the definition of “like product” found in
Article 2.6, and with the Panel’s decision in the Softwood Lumber case.
(b) Analysis of import volumes and price effects
4.61 Indonesia also claims that an affirmative in jury determination should have been precluded
by the fact that the average import prices were higher in some periods than the average prices for
domestic products, and by the fact that the absolute volume of subject imports fell during the first half
of 2003. Indonesia’s arguments would, however, create obligations that are not found in the
Agreement.
4.62 Articles 3.1 and 3.2 of the Agreement indicate that the investigating authorities must
objectively examine evidence of the volume of dumpe d imports and the effect of dumped imports on
prices, but they also caution that no single factor will necessarily give decisive guidance. Article 3.2
explicitly permits the investigati ng authority to base an injury determination on increases in import
volumes relative to consumption — even if imports have fa llen in absolute terms. Article 3.2 also
specifically recognizes that an investigating authority may find that dumped imports affected the
domestic industry’s prices, in the absence of “price undercutting,” based on evidence that “the effect
of such imports is
otherwise to depress prices … or prevent price increases….”
4.63 The evidence before the KTC show ed that there had been a shar p deterioration in the prices
for both the domestic products and the dumped imports starting in 2000. It also found that the dumped

imports had steadily increased their share of the Korean market over the entire period examined.
Under Article 3.2, these findings provided a sufficient basis for finding that the imports had increased
in relative terms and that there had been an adverse effect on prices.
(c) Analysis of imports by Korean producers
4.64 Indonesia also asserts that the KTC erred by fa iling to consider the impact of the Korean
industry’s own imports as an alternative cause of injury. But, Indonesia’s claims are based on a faulty
analysis. While there may have been imports by individual Korean producers, there were no
significant imports by the “domestic industry.”
4.65 In this case, the KTC exercised the authority granted to it by Article 4.1 of the Agreement and
excluded from the “domestic industry” those Korean producers that had imported significant volumes
of the subject merchandise from the countries unde r investigation. Because the KTC had excluded
the domestic producers with significant imports from the definition of the “domestic industry,” it
necessarily follows that the remaining producers that were considered part of the “domestic industry”
did not have a significant volume of imports of the subject merchandise from the countries under
investigation. Thus, Indonesia’s argument is based on a false premise. The KTC’s injury
determination was based on data showing that the Korean producers that were not importing subject
merchandise had been harmed by the imports under investigation.
(d) Conclusion
4.66 Indonesia apparently brought this claim ba sed on its belief that the Sinar Mas Group’s
exporters were the victims of arbitr ary governmental action. A fair review of the facts demonstrates,
however, that the Sinar Mas Group companies were the victims only of their own recalcitrance. On
the whole, the KTC’s treatment of the Sinar Mas Group was actually quite mild, and entirely
consistent with the limits prescribed by the Agreem ent. Indonesia’s claims should, therefore, be
dismissed.
C. F
IRST ORAL STATEMENTS OF INDONESIA
4.67 The following summarizes Indonesia's arguments in its first oral statements.
1. Opening Statement of Indonesia at the First Meeting of the Panel
(a) The use of facts available for Indah Kiat and Pindo Deli
4.68 The factual record reveals that contrary to Korea’s arguments, the exporters’ domestic sales
data were extensively verified. Prior to the verification, the Indonesian exporters had cooperated fully
in the investigation and had provid ed all relevant information, in cluding all necessary domestic sales
transactions. The KTC verified sample transactions, including both sales to CMI and re-sales by
CMI, requested both before and during the verification (see Exhibit IDN-20). The KTC also verified
the quantity and value of the reported domestic sale s, by tracing those values back to the exporters’
financial statements, including a review of a breakdown of the exporters’ sales, monthly sales totals,
and sales ledgers for selected months. No discrepancies were found.
4.69 Korea’s contention that it was not able to veri fy the data regarding the re-sales by CMI is
incorrect. The sample sales transactions reviewed by the KTC contained data relating to the re-sales
by CMI, including documents from independent sources such as CMI’s banks. The KTC was also
able to, and in fact did, check the completeness of the exporters’ data by means of the sample selected
sales traces.

4.70 By checking the reported sales by the exporte rs against the expor ters’ own financial
statements, the KTC effectively verified that all relevant CMI re-sales we re also reported. The
questionnaire responses of Indah Kiat and Pindo Deli i ndicated that neither Indah Kiat nor Pindo Deli
makes a sale in the domestic market unless CMI has first obtained a customer and issued an invoice to
the customer and that CMI’s invoi ce to the ultimate customer was a prerequisite for the exporters’
invoice to CMI. This entails that every invoice from the exporter to CMI matched an invoice from
CMI to the unaffiliated customer. Accordingly, by verifying the total of the exporters’ own invoices
to CMI, the KTC of necessity also verified th e total of CMI’s invoices to the first unaffiliated
customers. The KTC also verified the prices charge d by CMI on its re-sales. The KTC also verified,
based on a sample of its own choosing, that the [[**]]
43 charged by CMI pursuant to an agreement
between the exporters and CMI applied in every inst ance. Again, this was supported by CMI’s bank
statements.
4.71 The only document that was not provided at verification was the CMI financial statements.
The relevant question for the Panel is whether this circumstance rendered the "domestic sales
information" unverifiable". Indonesia has submitted evidence to the effect that the KTC indicated
during a meeting held on 4 April 2003 that it would be willing to accept the CMI statement if it were
submitted by 10 April 2003. The Panel should therefor e consider the financial statement to have been
timely submitted.
4.72 Even if the KTC had not indicated to the exporters that the financial statements would be
accepted if submitted by 10 April, the KTC should nevertheless have used the statements. The KTC’s
failures to take a reasonable approach to deadlines, to examine the difficulties faced by the exporters
in this case, and to evaluate whether the financial statements could be relied upon in its determinations
all constitute violations of the duty to cooperate identified by the Appellate Body and found in
Article 6.8, paragraphs 3 and 6 of Annex II, and Article 6.13.
4.73 The mere fact that the CMI financial statemen ts were not required to be audited does not
mean they were not “verifiable” within the mean ing of paragraph 3 of Annex II. The KTC should
have reviewed the statements and requested a ny additional information, such as supporting
documentation for the financial statements themselv es or the link between the financial statements
and the questionnaire responses that it needed.
4.74 The CMI financial statements were not necessar y to verify the data. Reconciliation using
financial statements is not the only way to verify sales data, and loses its importance in the case of a
re-seller like CMI. In situations involving a re-seller of goods obtained from several different
suppliers, any reconciliation to th e re-seller’s financial statemen ts is entirely dependent on the
accuracy of the identification of the subset of the re-seller’s sales that were purchased from the
exporter under investigation. Therefore, any additi onal verification step involving the CMI financial
statement would be dependent on the verification alr eady done on identifying all of the sales from the
exporters to CMI. Thus, the CMI financial statemen ts would, at most, have permitted an additional,
largely superfluous level of verification.
4.75 Korea has also argued that it was not provided with CMI’s accounting records. Indonesia has
provided evidence that the KTC’s team was provide d with on-line access to CMI’s sales records, as
well as an affidavit by the CMI officer that prep ared the database of CMI sales and subsequently
participated in the verification.
(b) Tjiwi Kimia
4.76 By stating that the KTC relied entirely on in formation contained in the application to
determine the facts available margin for Tjiwi Ki mia, Korea effectively co ncedes that the KTC took

43 Korea requests that the data in square brackets be treated as confidential.

no further steps to check this information against secondary sources and therefore acted inconsistently
with Article 6.8 and paragraph 7 of Annex II. It is not enough that the information on which the KTC
relied had been deemed sufficient to justify the ini tiation of the investigation. The standard of
evidence required to satisfy the requirements of Ar ticles 5.2 and 5.3 is lower than the standard
required to make a preliminary or final determination.
4.77 Korea appears to agree that in an investigation involving a single exporter, the investigating
authority is required to notify the exporter of any deficiencies in its questionnaire response before
resorting to facts available under Article 6.8 and paragraph 6 of Annex II. Had the KTC treated the
three exporters as a single entity early in the investig ation, it would have been required to give them
an opportunity to address the missing Tjiwi Kimia da ta. Korea cannot diminish the exporters’ rights
in this regard simply by waiting until immediately befo re the final determination to decide to treat the
three exporters as a single entity.
(c) Calculation of individual margins for each exporter
4.78 Korea argues that the investigating authorit y has discretion to interpret the phrase “each
known exporter” to refer to “several known exporters” that the investigating authority is permitted to
combine into a single entity. As a practical matter, this interpretation would deprive the first sentence
of Article 6.10, including the verb “shall determine,” of any effet utile. Korea does not explain what
this sentence would mean if the investigating aut hority were given unlimited discretion to “collapse”
separate exporters, or what standards investigating authorities must use to “collapse” exporters.
4.79 The mere existence of a legal relationship between individual exporters cannot be an
objective basis for this decision, as it says nothing about how an individual exporter determines its
export prices. The KTC did not make any factual fi ndings that the Indonesian exporters coordinated
their prices during the period of investigation. In f act, all of the evidence on the record shows that the
three exporters conducted their export sales activiti es separately. Thus, even if it were legally
permissible for the KTC to “collapse” different e xporters, the KTC has not provided an explanation
that would permit the Panel to conclude that its determination was unbiased and objective.
(d) Fair comparison
4.80 Korea has clarified that it used the entire production and sales related SG&A expenses of
another Indonesian exporter [[Company A]] 44 as the basis of the selling expenses attributable to CMI,
which resulted in impermissible double-counting of certain SG&A and interest expenses. The CMI
financial statements, which included its SG&A and in terest expenses, were provided in a timely and
usable manner. The KTC could also have avoided double-counting when it used the [[Company A]]45
data, by separating [[Company A]]46’s sales-related expenses from its overall corporate SG&A figures
and using only the sales-related expenses (not production-related expenses) to approximate the
expenses incurred by CMI.
4.81 The KTC's double-counting of interest expenses was unjustified. CMI is a trading company
that had no assets to finance by borrowing. The KT C verified that the exporters delivered the goods
directly to CMI’s customer, so CMI could not have incurred any expenses to finance inventories, and
that CMI’s sales terms were “cash before delivery, ” so that it did not incur interest expenses to
finance its accounts receivable. Thus, the KTC veri fied that CMI did not incur financing expenses.
The use of the full amount of the exporters’ own financing expenses was totally unjustified and
grossly overstated these actual expenses.

44 Korea requests that the data in square brackets be treated as confidential.
45 Ibid.
46 Ibid.

4.82 Regarding the KTC’s failure to deduct selling expenses incurred by CMI from normal value,
the evidence shows that the sales to unaffiliated customers in the domestic market involve selling
activities by CMI and that that there are no compar able activities on export market sales. Therefore,
the Indonesian exporters incurred a category of expense on domestic sales – CMI’s selling expenses –
that was not incurred on export sales. Whether this means that these sales were at a different level of
trade, or simply involved different circumst ances, these expenses clearly affected the price
comparability between the normal value and the e xport price. Using either terminology, an
adjustment was necessary under the third sentence of Article 2.4 of the Agreement.
(e) Like product
4.83 Article 2.6 emphasizes that the domestic produc t must be “like” the imported product “in all
respects.” This requires not just external cons istency between the imported product and the domestic
product but also internal consistency. To conclude otherwise, that the Agreement permits only that
the investigating authority define the domestic like product as having the same external boundaries as
the imported product, would be to read the requirement of likeness “in all respects” out of the
Agreement and result in an injury analysis that does not objectively reflect an analysis of the
competitive impact of the imports under investiga tion with the domestic products with which they
actually compete.
4.84 Korea effectively concedes that the KTC failed to consider whether PPC and WF paper were
“like” products. Thus, the Panel should find that th e KTC’s like product analysis was inconsistent
with Article 2.6, and that its injury analysis, based on this flawed definition of the like product, was
inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the Agreement.
(f) The price and volume effects of imports
4.85 Korea’s admission that the evidence showed a “mixed picture” on price effects undermines its
Article 3.2 analysis. As the evidence provided by Korea in paragraph 171 of its submission shows,
apart from the first year of the period of investigation, the price of the imports was at or above the
price of the domestic product for the remainder of the period. Korea’s admission that the price data
shows a “mixed picture” undermines the KTC’s an alysis of “significant” price undercutting or
depression. The KTC cannot objectively reach an injury finding based in part on the price effects of
imports where there is a “mixed picture” regarding those effects.
4.86 Korea also argues that the volume of imports under investigation relative to consumption
increased substantially. However, the data supplie d by Korea shows that dumped imports in fact
declined by 15.3 per cent in the first half of 200 3, while the decline in domestic shipments was only
11.9 per cent. In addition, the KTC significantly overstated the import market shares by understating
total domestic consumption.
(g) The consideration of injury factors, causa tion analysis and own imports by the domestic
industry
4.87 The KTC’s injury analysis amounts to nothing more than a recitation of the data points
relating to the factors under consideration. The KT C cannot simply recite the data points and reach a
conclusion, but it must exercise judgment to objectiv ely place trends in their context. The injury
factors showed conflicting trends that were inconsis tent with a finding of injury. For example, the
decline in employment coincided with increases in the domestic industry’s profits increased. Wages
and productivity increased as employment decreased. There was no correlation between the trends in
the industry’s operating profits and the imports under investigation.
4.88 Likewise, the KTC’s causation analysis largely c onsists of nothing more than a recital of the
relevant data points and a sentence reaching a conclu sion. The KTC made no effort to evaluate or

place in context the evolution of the industry’s ope rating profits, especially the fact that operating
profits were positive during most of the period of investigation, even at periods when imports
increased. The KTC made no analysis whatsoever of the effect of the decline in domestic
consumption on the performance of the domestic i ndustry. The KTC's examination of two other
possible causes of injury (loss of export mark ets and imports from third countries) was also
inadequate and cursory, and failed to ensure that injury from those factors was not attributed to the
imports.
4.89 Korea has not explained with any clarity how the KTC actually considered the issue of
imports by the domestic industry in its injury determin ation. Indonesia’s claims on this issue are also
based on the failure of the KTC to consider the im portance of these imports to the assessment of the
performance of the domestic industry. However, th e KTC did not address this issue in its injury
analysis, even though Indonesian exporters raised it.
(h) Procedural issues
4.90 Korea argues that it is not required to provide a written report on the verification and that it is
sufficient if it made proper disclosure of the essential facts under consideration pursuant to
Article 6.9. Korea misreads the relevant provis ions of the Agreement. Article 6.7 contains
requirements which are separate and distinct from the requirement under Article 6.9. Korea also
argues that oral disclosure of the results of the verifi cation is sufficient. Indonesia is not aware of any
instance in which oral disclosure satisfies the proce dural obligations of the Agreement. Lastly, Korea
argues that it was not required to disclose “actual calculation figures” to the Indonesian exporters.
However, these figures are the “essential facts” on which the determination of dumping margins is
based within the meaning of Article 6.9. Exporters cannot possibly evaluate whether the investigating
authority has in fact made a fair comparison with in the meaning of Article 2.4 unless they know what
comparison was actually made.
2. Closing Statement of Indonesia at the First Meeting of the Panel
4.91 Anti-dumping investigations should not be conducted in an opport unistic manner to facilitate
the imposition of protectionist measures. In its written submission and its statement to the Panel,
Indonesia has explained in detail how the KTC’s actions were outcome-driven in several respects.
4.92 Defending those actions before the Panel, Kor ea takes the position that the KTC has absolute
discretion in the conduct of its investigations and ho w it responds to issues that arise in the course of
the investigation. Korea also considers that Indonesia and its exporters must abide by the KTC’s
determinations no matter what. In fact, the Agre ement contains detailed rules governing how these
investigations are to be conducted. These rules stri ke a balance between the investigating authority’s
needs, the requirement of fairness and objectivity, and the practical difficulties that inevitably may
arise in investigations of this complexity.
4.93 In its first written submission, Indonesia went through the rules of anti-dumping step-by-step,
measuring the KTC’s conduct against those detailed rules. Korea prefers not to discuss the KTC’s
actions in the context of those rules, hoping inst ead that its complaints regarding the Indonesian
exporters will distract the Panel from analyzing th e KTC’s actions under those rules. Indonesia trusts
that having conducted its own detaile d evaluation of the facts of this investigation and the standards
contained in the Agreement, the Panel will concl ude the flaws Indonesia has identified in the KTC’s
investigation constitute violations of the provision s of the GATT Article VI and the Agreement that
were identified in Indonesia’s first written submission.
D. FIRST ORAL STATEMENTS OF KOREA
4.94 The following summarizes Korea's arguments in its first oral statements.

1. Opening Statement of Korea at the First Meeting of the Panel
4.95 As a frequent target of unfair and arbitrary antidumping actions, Korea recognizes the
fundamental importance of the WTO dispute settleme nt process. Nevertheless, Korea cannot see the
merits in Indonesia’s complaints. Among other th ings, Indonesia’s arguments fail to recognize the
role played by the main Indonesian exporter in cr eating a situation in which an unfavourable result
was inevitable. In addition, Indonesia’s claims concerning the injury finding improperly seek to
ambush Korea with arguments that were never presented to the KTC. An objective review
demonstrates that the KTC’s determinations were consistent with the Agreement’s requirements.
(a) Single dumping margin for the Sinar Mas Group Mills
4.96 According to Indonesia, Article 6.10 of th e Agreement required the KTC to assign separate
dumping margins to each corporation that had exports to Korea. But, Article 6.10 requires, “as a
rule,” a separate dumping margin for each “expor ter or producer.” Nothing in the Agreement
precludes investigating authorities from applying a functional definition of “exporter” — and thus
treating separate corporations that act as a singl e entity as one “exporter or producer” for purposes of
Article 6.10.
4.97 At the same time, Korea does not agree with th e third parties who suggest that any affiliated
corporations may be treated as a single exporter. In Korea’s view, a mere potential for affiliates to act
in a coordinated fashion is not sufficient. In stead, there must be evidence that the affiliated
corporations did in fact act as a single entity. In this case, the KTC’s decision to treat them as a single
“exporters” was appropriate precisely because the evidence in this case de monstrated that the
Sinar Mas Group mills did act as a single entity.
(b) Facts available for Tjiwi Kimia
4.98 Indonesia also objects to the KTC’s use of info rmation contained in the Korean producers’
application to determine the export price and normal value for Tjiwi Kimia. But the use of these “less
favourable” facts available was consistent with pa ragraph 7 of Annex II of the Agreement — which
specifically authorizes investigating authorities to reach a “less favourable” result when “an interested
party does not cooperate and thus relevant inform ation is being withheld.” Also, contrary to
Indonesia’s claims, the Agreement does not require investigating authorities to warn respondents
about the consequences of non-cooperation. The Agreement itself makes clear what those
consequences may be.
4.99 Finally, the arguments about the extent to wh ich the KTC corroborated the “facts available”
used to determine Tjiwi Kimia’s export price and nor mal value do not apply. The information relied
upon came entirely from independent and reliable sources — i.e., from official Korean government
customs statistics and from information obtained by th e Korea Trade - Investment Promotion Agency.
Furthermore, as part of its analysis, the KTC’s staff actually did compare the normal value data in the
application to the data submitted by the responding companies, and found it to be comparable.
(c) Facts available for sales through CMI
4.100 Indonesia claims that the KTC should not have rejected the submitted CMI data, because the
problems caused by CMI’s refusal to allow access to its records at verification were cured when the
Sinar Mas Group subsequently submitted two work sheets purporting to reflect CMI’s income
statements. But this late submission could not cure the problems caused by CMI’s previous refusal to
cooperate, because there was no way for the KTC to go back in time to verify the accuracy of the
submitted worksheets, or to use the worksheets to verify the submitted CMI sales data.

4.101 Indonesia also objects to the method used by the KTC’s inclusion in constructed value of an
amount corresponding to CMI’s selling, general and administrative (“SG&A”) expenses, and to the
KTC’s refusal to allow a “level-o f-trade” adjustment. But, the information submitted by the Sinar
Mas Group indicated that the sales from CMI to its customers were at the same level of trade as the
sales from the mills to th eir customers in Korea. The inclus ion of an amount corresponding to CMI’s
SG&A expenses was appropriate, therefore, to en sure that the normal value was calculated at the
same level of trade as the sales that were used to determine the export price.
(d) Continuation of investigation after preliminary determination
4.102 Indonesia argues that, under Article 5.8 of the Ag reement, the investigation should have been
terminated with respect to Indah Kiat once the KTC preliminarily calculated a de minimis dumping
margin for Indah Kiat. But Article 5.8 applies only when the authorities are “satisfied” that there is
no dumping, and only when termination is appropriate for the entire “investigation” or “case.” In this
case, the preliminary dumping margin for Indah Ki at was calculated based on a company-specific
analysis, and did not reflect a finding of no dumping for the “case” or “investigation” as a whole.
Moreover, the KTC’s preliminary determination sp ecifically reserved judgment on the issue whether
the Sinar Mas Group companies should be considered separate “exporters” or a single “exporter” in
its analysis. The entity covered by the KTC’s fina l determination (the single, “collapsed” Sinar Mas
Group exporter) was not the same as the entity for which the KTC had preliminary found de minimis
margins (the Indah Kiat corporation). Consequently, the de minimis preliminary dumping margin for
Indah Kiat did not require termination of the investigation for the Sinar Mas Group “exporter.”
(e) Like product
4.103 According to Indonesia, the KTC should have found that there were two “like products.” On
closer examination, however, the factual distinction proposed by Indonesia does not hold up.
Moreover, the legal standard proposed by Indonesi a has no basis in the Agreement. The Agreement’s
definition of “like product” specifies that the “lik e product” should be define d by similarity to the
imported “product under investigation” — and not by differences am ong the products produced by the
domestic industry.
4.104 Canada has argued that the term “product under investigation” must impose some limits on
the scope of the items included in the investigation. Korea does not disagree with Canada’s logic.
But Canada’s argument is not relevant to this pr oceeding, because Indonesia has not objected to the
KTC’s definition of the “product under investiga tion.” Having accepted the KTC’s definition of the
“product under investigation,” Indonesia has no gr ounds to object to the definition of the “like
product,” because the “like product” must, under Article 2.6, be defined based on the similarity to the
“product under investigation.”
(f) Consideration of injury factors
4.105 Indonesia’s arguments present a detailed discussion of the updated injury data collected by
the KTC, and attempt to show that this data c ould have supported a finding that the Korean industry
had not been injured. It is worth noting, however, that Indonesia’s arguments concerning the updated
data were never actually made to the KTC dur ing the investigation. Because the Indonesian
respondents failed to submit these arguments to th e KTC, the KTC never had an opportunity to
respond to them.
4.106 In any event, Indonesia’s argum ents are unpersuasive. The Agreement clearly does require
investigating authorities to “consider” various factors in making injury determinations. However, the
Agreement does not require any particular analysis of those factors, or mandate any particular result.
It is clear in this case that the KTC did consider a ll of the factors identified in the Agreement. The
KTC’s determination explained how the analysis of each of these factors led it to an affirmative injury

determination. The KTC’s analysis and explanation were logical and reasonable. Nothing more was
required under the Agreement.
4.107 In this regard, Indonesia has attempted to create obligations that are not found in the
Agreement. Article 3.2 explicitly permits the inves tigating authority to base an injury determination
on increases in import volumes relative to consumption — even if imports have fallen in absolute
terms. Article 3.2 also specifically recognizes that an investigating authority may find that dumped
imports affected the domestic industry’s prices, in the absence of “price undercutting,” based on
evidence that “the effect of such imports is otherwise to depress prices … or prevent price
increases….” Nothing in these provisions would prohi bit an affirmative injury determination when
the import prices are higher than the domestic prices, or when imports have gained market share, but
fallen in absolute terms.
(g) Analysis of imports by Korean producers
4.108 Finally, Indonesia asserts that the KTC erred by failing to consider the impact of the Korean
industry’s own imports as an alternative cause of injury. These claims are, however, based on a faulty
analysis.
4.109 In this case, the KTC exercised the authority granted to it by Article 4.1 of the Agreement and
excluded from the “domestic industry” those Korean producers that had imported significant volumes
of the subject merchandise from the countries unde r investigation. Because the KTC had excluded
the domestic producers with significant imports from the definition of the “domestic industry,” it
necessarily follows that the remaining producers that were considered part of the “domestic industry”
did not have a significant volume of imports of the subject merchandise from the countries under
investigation. Thus, Indonesia’s argument is based on a false premise.
2. Closing Statement of Korea at the First Meeting of the Panel
4.110 In Korea’s view, this dispute is, among othe r things, about non-cooperation by the three
Sinar Mas Group mills. One of them decided not to par ticipate in the investigation at all. The other
two refused to allow the Korean investiga ting authorities access to documentation necessary for
verification, leaving the Korean authorities no other choice but to resort to facts available.
4.111 The full cooperation of respondents is a fundame ntal aspect of anti-dumping investigations.
Investigating authorities do not have legal tools to compel respondents to submit the information
needed to perform the analysis required by th e Agreement. They must depend instead on the
willingness of respondents to cooperate - a willi ngness that may only be encouraged, but not
compelled, by threats of unfavourable facts available.
4.112 Despite the Sinar Mas Group’s lack of cooperation, the KTC conducted the investigation and
made the necessary determinations within the bounds of the disciplines envisaged in the Agreement.
The non-cooperating respondents should be left to b ear the consequences of their action, instead of
their government being forced to try to relieve th em of these consequences through the WTO dispute
settlement process.
4.113 Having said that, the Korean delegation wishes to take this opportunity to put on record its
concern about the composition of the Indonesian delegation which includes employees of Sinar Mas
Group. In Korea’s view, Indonesia’s decision to compose its delegati on in this manner, and to share
Korea's confidential submission with company employ ees, constitutes a clear violation of Article 18.2
of the DSU which sets out requirements for protecti on of confidential information. The confidential
information contained in Indonesia’s oral statem ent has now been given to the main Indonesian
producer and exporter of the product under consid eration. Given Indonesia’s admission that the
employees of the Sinar Mas Group participated in the preparation of that statement, Korea can only

assume that all the confidential information that Korea submitted to the Panel in its first written
submission and related exhibits h as been passed on to an Indonesian paper producer that competes
directly with its Korean counterparts.
4.114 In view of the seriousness of the violation of Article 18.2 of the DSU in terms of potential
commercial damage to the Korean paper industry, the Korean delegation raised an objection to the
presence of the Indonesian industry representative in th e room in the morning of 1 February 2005. In
order to minimize the disclosure of the confidentia l information, Korea requested that they remain
outside the room during the Panel hearing.
4.115 It is unfortunate that the Panel ruled in favour of Indonesia on the basis of Paragraph 15 of its
Working Procedures. Korea has reservations about the ruling which entails invalidation of the treaty
provisions by a procedural guidance in the Working Procedure. A member’s right to determine the
composition of its own delegation should not be construed to permit circumvention of the requirement
to protect confidential information.
4.116 Korea recognizes that, under the Working Pro cedures, it is Indonesia’s responsibility to
ensure that the confidentiality obligations of Article 18.2 are met. However, when the facts
demonstrate that Indonesia has not fulfilled that resp onsibility, the Panel must act. Indonesia’s failure
to honour its Article 18.2 commitments does not abso lve the Panel of its independent responsibilities.
At a minimum, the Panel should instruct Indonesi a to remove all industry representatives from its
delegation, to cease any distribution of the confiden tial submissions in this proceeding to industry
representatives, and to ensure that any copies of confidential submissions that were previously
distributed to industry representatives are returned to Indonesian government and destroyed.
4.117 In this regard, Korea found the Panel’s sugg estion after the ruling to set up a special
procedure governing protection of confidential info rmation not to be a viable option, given the
advanced stage of the Panel process. Such procedur e would only have been meaningful if it had been
established, at the latest, prior to the first submission.
4.118 It should also be noted that the Korean delegation did not object to the above-mentioned
ruling of the Panel in the interest of expediting the proceedings of this Panel, despite the fact that
Korea is the defending party in this dispute. As Korea made it clear immediately after the said
Panel’s ruling, it reserves its right to raise this issue in the future as appropriate.
E.
SECOND WRITTEN SUBMISSION OF INDONESIA
4.119 The following summarizes Indonesia's arguments in its second submission.
1. Introduction
4.120 In resolving this dispute, the Panel must be able to discern from specific statements on the
record that matters the KTC was required to addr ess were properly considered and decided. In
addition, the Panel may not rely on ex post explanations regarding the KTC’s reasoning or findings.
2. Legal Argument
(a) Claims arising from the determination of dumping
(i) Korea's use of "facts available" to calculate normal values for Indah Kiat and Pindo Deli was
inconsistent with Article 6.8 and Annex II of the Agreement
4.121 When the KTC arrived in Indonesia to conduct the verifications, Indah Kiat and Pindo Deli
had cooperated fully and comprehensively in the KTC’s investigation. These exporters had submitted

all requested data, and had written to the KTC asking whether they would be receiving a supplemental
questionnaire. The KTC’s verification plan was th e first time the KTC specifically requested the
Indonesian exporters to “prepare” – not to “submit” – CMI’s financial statement. At this point, there
is no reason why the KTC could have conclude d that these exporters were uncooperative under
Article 6.8 and no evidence that the KTC did so.
4.122 The exporters’ inability to provide the CMI statements at the start of verification was the first
stumbling block in a hitherto normal investiga tion. Articles 6.8 and Annex II contain detailed
procedures that must be applied objectively by the in vestigating authority in (i) dealing with any such
stumbling blocks; and (ii) assessing the nature or size of any stumbling block encountered in the
investigation.
4.123 The KTC took no steps to deal with the exporters’ predicament other than to treat it as a
“wilful refusal” and a “refusal to cooperate” that permitted the use of facts available without any
further consideration. This is inconsistent with the KTC’s obligations under Article 6.8 and Annex II.
The KTC failed to consider the practical ability of the interested parties to comply fully with its
requests. The KTC took no steps to assist the expor ters in overcoming difficulties. The KTC neither
assisted nor made allowances for the inability of the exporters to provide the financial statements at
the start of verification. The KTC ignored its oblig ation under paragraph 5 of Annex II not to discard
information simply because it is not “ideal in all respects.” The KTC improperly failed to consider
providing additional time to obtain the CMI financial statements, or to accept these statements when
they were finally submitted. To the extent that the KTC rejected the CMI financial statements
submitted on 9 April 2003 “ for the sole reason that it was submitted beyond the deadlines,” the KTC
also acted inconsistently with Article 6.8. Korea has also not shown how the KTC determined that the
CMI financial statements were not submitted within a reasonable period of time. In contrast, the KTC
was able to collect data relating to the domestic industry three months after the CMI financial
statements and use it in its determinations. The KTC failed to discharge its obligation to consider
whether it could use these statements “without undue difficulty” under paragraph 3 of Annex II. The
KTC failed to discharge this obligation.
4.124 Information can be “verifiable” under paragraph 3 of Annex II if the accuracy of information
can be determined by “ an objective process of examination,” without limitation to any one way of
doing this. Thus, the USDOC manual states that the “ways and means of [verifying completeness]
varies from response to response and from respondent to respondent;” that “no two verifications are
alike;” and that the verifiers must “above all, be flexible.”
4.125 The obligation to report CMI re-sales is defi ned by the quantity and value of sales from the
exporters to CMI: the “total pool of reportable transaction s” is found by reference to the database of
sales by the exporters to CMI, not CMI’s financial statements. The question of whether the exporters
properly reported all appropriate re-sales by CM I can only be answered by examining the CMI re-
sales of each of the sales to CMI. The CMI financial statements ha ve very limited relevance to this
process. The KTC actually verified extensively both the exporters’ sales to CMI and CMI’s re-sales
to the first unaffiliated customer without finding an y errors or discrepancies, including a review of
CMI’s own documents, including invoices; and i ndependently-sourced documents, such as CMI’s
bank statements. Also, the exporte rs made available to the KTC th e CMI staff member that worked
on preparing the sales database, who made her comput er records available to the KTC’s verifiers.
Korea’s ex post allegations that some of the documents th e KTC saw at verification might have been
falsified are not supported by the record and are contradicted by the KTC’s own findings at
verification. Finally, “Perfection is not the standard” for verifications.
4.126 Under paragraph 6, if the investigating authority decides to reject information, it is required to
inform the exporters forthwith and to provide it with an opportunity to correct whatever deficiency
exists, even if the alleged failure to prov ide supporting information came in response to a
supplemental request in the KTC’s verification plan. Korea’s argument that the KTC did not invite

the Indonesian exporters to provide the CMI fina ncial statements at the 4 April 2003 disclosure
meeting is an admission that the KTC did not fulf il its obligations under paragraph 6. The CMI
financial statements were not necessary for other purposes. In addition, any omissions relating to
minor adjustment items such as credit notes could not justify the rejection of the entire domestic sales
data.
(b) Korea's calculation of constructed value for I ndah Kiat and Pindo Deli was inconsistent with
Articles 2.2, 2.2.1.1, 2.2.2, 2.4, and 6.8 of the Agreement
4.127 The KTC should have relied on CMI’s submitted financial statements to determine amounts
for SG&A and interest expenses for CMI. In addition, the manner in which the KTC calculated
CMI’s SG&A and interest expenses was inconsistent with both the requirement of Article 6.8 and
paragraph 7 of Annex II that the KTC must exercise special circumspection in the use of facts
available and with the requirements of Articles 2, 2.2.1.1, 2.2.2, and 2.4 that the investigating
authority may only include reasonable amounts rela ting to the production and sales of the relevant
product in its calculation of SG&A and interest e xpenses to ensure a fair comparison with export
price.
4.128 The KTC used SG&A and interest expenses of about [[**]] per cent and [[**] 47 per cent
respectively as the proxies for CMI. Evidence on th e record shows that CMI’s SG&A expenses were
[[**]]48 per cent of cost of goods sold, while total interest expenses were zero. These expenses should
have been used by the KTC. In addition, the KTC made no effort to use special circumspection under
paragraph 7 or to ensure that the amounts it u sed were reasonable under Article 2. The KTC had
before it verified information th at showed that Indah Kiat’s a nd Pindo Deli’s SG&A expenses were
much lower than the figures used by the KTC. The KTC should have revi ewed the breakdowns for
these figures to determine whether it was appropriate to include those expenses in its determination of
CMI’s SG&A and interest expenses. This review would have revealed that the exporters’ interest
expenses were related almost exclusively to production-related activities, such as loans for
construction equipment.
4.129 Article 2.2 provides that the investigating authority may add only a “reasonable amount for
administrative, selling and general costs.” Ar ticle 2.2.2 emphasises that these amounts should be
based on actual data where possible. Article 2.2. 2(iii) reiterates that any other method used to
determine amounts for administrative, selling and general costs must be “reasonable". Articles 2.2.1.1
and 2.2.2 recognise a distinction between concepts of “production and sale” in how it describes the
expenses that may reasonably be included in the c onstructed value. In these circumstances, the KTC’s
failure to consider verified evidence to determin e whether the amounts it intended to use as CMI’s
SG&A and interest expenses were reasonable was inconsistent with these provisions and constituted a
failure to exercise special circumspection within the meaning of paragraph 7 of Annex II.
(c) Korea's use of "facts available" to determine Tjiwi Kimia's dumping margin was inconsistent
with Article 6.8 and Annex II of the Agreement

(i) The KTC acted inconsistently with paragraph 7 of Annex II of the Agreement in failing to
exercise "special circumspection" in its use of secondary information to determine dumping
margins for Tjiwi Kimia
4.130 The data contained in the application and u sed by the KTC to determine Tjiwi Kimia’s
margin were inconsistent with data obtained from independent sources. The application overstated
the dumping margins for April Fine by 1600 per cent and overstated Pindo Deli's normal value, before

47 Korea requests that the data in square brackets be treated as confidential.
48 Ibid.

adjustment, by approximately $135-195/ton (approximately 16-23 per cent). It is clear, therefore, that
had the KTC exercised special circumspection in us ing facts available to determine the margins for
Tjiwi Kimia, it would have reached a different result.
4.131 There is no evidence in the record to indi cate how the KTC established that KOTRA and
KOTIS acted "independently" from the domestic industr y in obtaining this information or that the
KTC considered the nature of these agencies as a rele vant factor in its evaluation of the application
data. The duty imposed on the investigating authority is to check the reliability of the secondary
information itself. In doing so, the KTC is not entitled to overlook glaring inconsistencies between
the actual information supplied by these agencies and the other information on the record, including
its own (albeit flawed) findings regarding normal value and export prices, simply because the ultimate
suppliers of this information are supposedly "independ ent and reliable". There is no evidence that the
application data on normal value "fell within th e range of domestic sales data reported by the
responding companies". Also, the KTC has not expl ained how it conducted this alleged comparison,
given that the data in the application on normal value was not segregated between PPC and WF, while
the KTC calculated separate dumping margins for PPC and WF paper.
4.132 Korea defends its decision to collapse the three Sinar Mas companies on the basis that the
Sinar Group companies "really did act as a single entity". If the three Sinar Mas companies "acted as a
single entity" then it is eminently reasonable to assume that the sales prices of that entity would be
similar. Also, the KTC cannot assume that th e prices charged by Tjiwi Kimia would diverge
massively from the prices charged by other Indonesian producers operating in the same markets.
4.133 The investigating authority's duty to act with special circumspection under paragraph 7 of
Annex II applies in all cases where “the authorities have to base their findings ” on information from
secondary sources, regardless of whether the interest ed party concerned cooperates or not. The final
sentence of paragraph 7 does not negate this duty. It merely provides that the margin in a situation
where an exporter does not cooperate may be greater than if the exporter had cooperated. But this
does not give the investigating authority license to ignore the requirement of special circumspection.
Moreover, to the extent that the KTC sought to “p unish” Tjiwi Kimia, Korea has not explained what
standards it used to determine that it was appropria te to “punish” the exporter or how those standards
were consistent with paragraph 7.
4.134 For these reasons, the KTC's calculation of Tjiwi Kimia's dumping margin on the basis of the
information supplied by the applicants was inconsistent with the procedures required under Article 6.8
and paragraph 7 of Annex II of the Agreement.
(ii) The KTC's use of "facts available" for Tjiwi Kimia without providing other exporters with an
opportunity to submit further explanations was in consistent with Article 6.8 and paragraph 6
of Annex II of the Agreement
4.135 Korea acknowledges that paragraph 6 of Annex II to the Agreement imposes a duty on
investigating authorities to "provide respondent s an opportunity to cure defects in submitted
information". When the three exporters were fi rst collapsed into a single entity late in the
investigation, they found themselves in the sa me position as a single exporter that had submitted a
questionnaire response in which certain domestic a nd export sales were not reported. However, the
“single economic entity” in this case was not provided any such opportunity to cure defects. The
KTC’s belated decision to make its final determin ation for a different entit y than its preliminary
determination cannot relieve the KTC of its obliga tions under paragraph 6 or reduce the procedural
protections of the Indonesian exporters under that provision. Korea wants to have it both ways – it
wants the freedom to treat these companies as one entity, but without any of the obligations that might
entail under the Agreement.

4.136 Indonesia’s position is simply that the KTC cannot reduce the procedural rights of exporters
by waiting until the end of the investigation to reso lve issues that affect those rights. Indonesia’s
claims under paragraph 6 do not relate to particular outcomes, they relate to the procedures laid down
in paragraph 6 to protect exporters that must be followed before information can be rejected.
Indonesia’s claims also concern the failure to provide an opportunity to rectify defects in submitted
information.
(d) Korea's failure to make a fair comparison betw een normal value and export price by adjusting
for selling expenses was inconsistent with Article 2.4 of the Agreement
4.137 As the exporters noted in their 9 April letter to the KTC on this topic during the investigation,
the sales in both markets are made to the same kinds of customers. What matters in this case is that
the CMI re-sales involve additional expenses that are not incurred with respect to the export sales. In
making a fair comparison, the crucial question is not where the analysis begins (the gross sales price
in each market), but where it ends (the net, or ex factory, price at which the fair comparison will be
made). At the end-point, the comparison must be at the same level of trade –the investigating
authority must adjust for all differences between th e gross prices in each market that affect the
comparability of those prices. Otherwise, it will ma ke an asymmetrical, unfair comparison of prices,
as happened in this case.
4.138 The verified evidence establishes that CMI in curred expenses that were not incurred on the
export sales. Accordingly, these expenses affect th e price comparability of the CMI re-sale price and
Indah Kiat’s re-sale price. The KTC’s failure to adjust for these expenses resulted in an unfair
comparison, contrary to Article 2.4 of the Agreement.
(e) Korea's treatment of Indah Kiat, Pindo Deli, and Tjiwi Kimia as a single economic entity was
inconsistent with Articles 6.10 and 9.3 of the Agreement
4.139 Korea has made clear that a decision to collapse cannot be based on a “potential for
coordinated action” between a ffiliated exporters following the imposition of definitive dumping
measures. This implies that any decision to co llapse must be based on fi ndings regarding actual
coordinated action on pricing during the period of investigation above and beyond the existence of
affiliations between exporters.
4.140 The KTC failed to disclose the legal standard it used to make its decision to collapse in this
case. There is therefore no way for the Panel to dete rmine what standard, if any, was applied by the
KTC. The KTC’s stated grounds for its determina tion deal primarily with the presence of common
shareholding and the presence of overlapping direct ors and commissioners in the three companies.
The presence of common shareholding and a certain amount of overlap in the composition of the
board of directors and commissioners is merely evid ence of the "existence of affiliation", a fact that
was never denied by the Sinar Mas Group compan ies. It does not establish the presence of
collaboration and coordination of pricing policies in the domestic and export markets. In addition, the
fact that all three affiliated companies produce the subject merchandise and that one of them sold
marginal quantities of the subject merchandise to the ot hers is basically irrelevant to the question of
whether these firms act jointly in the domestic and export markets. Korea has not pointed to any
evidence in the record that show s where the KTC examined the issue of coordination of prices, or
asked the exporters for specific information on that topic.
4.141 Korea’s reference to the existence of a "si ngle corporate marketing department" as evidence
of "extensive coordination and oversight" is an inadmissible
ex post justification and is incorrect as a
matter of fact. Korea’s assertion that the compan ies' sales in Indonesia were closely coordinated
through CMI is incorrect. The fact that the re- sales occurred through an a ffiliated reseller does not
indicate that this reseller was in a position to cont rol pricing decisions for the entire Group. CMI was

not in a position to set centralised prices, because, in fact, the minimum prices to the customers were
determined separately by each mill.
4.142 The KTC did not explain how it investigated or determined that the overlapping
commissioners or non-executive directors actually were involved in managing and coordinating prices
among the exporters. Korea’s arguments regarding Mr. Gupta’s role are also ex post and not
supported by the facts.
4.143 Korea’s allegation that the Sinar Mas Group di d not fully respond to questions regarding
affiliation is also contrary to the record. Had the KTC analysed the actual pricing practices of the
exporters, based on submitted and veri fied data before it, it would have found that the exporters
charged different prices for sales of the same product to the same customers in the same market.
4.144 A finding of coordination of domestic market pricing alone would not suffice to “collapse”
affiliated entities. This would not establish that the exporters could coordinate the export sales to
avoid dumping duties, but would imply only that there is a potential to coordinate prices for export
sales.
(f) Korea's determinations contain several violati ons of the disclosure obligations contained in
Articles 6.4, 6.7, 6.9 and 12.2 of the Agreement
4.145 The KTC’s purported disclosure of the results of verification mentions only one issue and
ignores all other aspects of the verification visit. Moreover, an oral briefing cannot satisfy the
requirements of Article 6.7 or 6.9. Finally, the requirements of Article 6.7 cannot be fulfilled by
disclosure of the essential facts under Article 6.9.
4.146 The actual calculation figures used in de termining normal value and export prices are the
"essential facts" on which a dumping margin calculation is based and must be disclosed under
Article 6.9.
3. Claims relating to the determination of injury and causal link
(a) The KTC's treatment of PPC and WF Paper as " like products" was inconsistent with Articles
2.6, 3.1, 3.4, 3.5 and 3.7 of the Agreement
4.147 Korea now perceives a duty to limit the "product under consideration" to "a single group of
products sharing characteristics". Logic dictates al so that there is a corresponding duty to limit the
"like product" to a single group of products sharin g characteristics and to conduct the injury analysis
on that basis.
4.148 The investigating authority is under a duty not to conduct a single injury determination for
unlike products arising from Articles 2.6 and 3; both of which have been identified by Indonesia in its
panel request and submissions.
4.149 Korea admits the KTC did not assess whether PPC and WF are like products for which it is
appropriate to conduct a single injury analysis. Korea does not refer to findings on the record
regarding the likeness or unlikeness of PPC and WF.
4.150 Korea asserts only that PPC and WF “ may be identical” and “ can have the exact same”
characteristics. The KTC’s failure to conduct any ob jective analysis if whether these products were
alike renders its injury and causal link determinations inconsistent with Articles 3.1., 3.2, 3.4, 3.5 and
3.7 read with Article 2.6 of the Agreement.

4.151 If the KTC had examined this issue, it would ha ve had to conclude that PPC and WF are not
like products. There are significant differences in how PPC and WF are manufactured. The fact that
the Korean Paper Manufacturers Association could distinguish between these two products for the
purpose of preparing statistics also shows that th is distinction is not "unworkable". The KTC's
determination that PPC and WF are "like products" is inconsistent with Artic le 2.6 of the Agreement
and its injury determination theref ore inconsistent with Articles 3.1, 3.2, 3.4, 3.5 and 3.7 of the
Agreement.
(b) Korea's failure to conduct its injury and causal link determinations in an objective manner and
to base these determinations on positive evidence wa s inconsistent with Articles 3.1, 3.2, 3.4,
3.5 and 3.7 of the Agreement
4.152 The KTC failed to make an objective analysis based on positive evidence of the price and
volume effects of the imports under investigation. The KTC appears to have omitted a significant
portion of the domestic market from its analysis, artif icially inflating the market share of the imports
under investigation and deflating the market share of the domestic industry. The KTC also
miscalculated the trends in market shares for the first half of 2003, in which the imports under
investigation declined. The corrected figures provided by Indonesia indicate that the imports under
investigation were losing market share, and that the major increase in that period came from imports
from other sources. Because of these methodological errors, the KTC’s consideration of the volume
effects of the imports under investigation was not based on an objective examination or positive
evidence. Regarding the price effects, the KTC’s analysis does not properly address the trends in
import and domestic prices.
4.153 The KTC’s failure to refer the concepts of significant price undercutting, significant price
depression, or preventing price increases to a signi ficant degree from the final determination of the
KTC itself suggests that the KTC did not properly c onsider these matters. Korea’s admission that the
evidence regarding price undercutting showed a “mixed picture” also indicates that the KTC did not
appear to attach any meaning to the use of the word “significant” four times in Article 3.2.
4.154 The KTC improperly failed to conduct a proper ex amination of the injury factors listed in
Article 3.4. This obligation lies on the investigatin g authority in every instance and is not limited by
the arguments raised by the exporters. WTO panels have repeatedly made it clear that this obligation
is not satisfied by collecting data, reciting it in a determination, and reached a conclusion, but that it
requires
 the analysis of data through placing it in the context of the particular evolution of the data
pertaining to each factor individually, as well as in relation to the other factors examined.
4.155 The KTC’s injury findings consist of roughly one and a half pages of recitals of data for
various factors. The only analysis of these data is to indicate whether the figures went up or down
from one period to the next. While the KTC’s final staff report contains the data recited by the KTC
in its injury determination, it does not contain any additional analysis. The KTC’s recital of data is
followed by a one-sentence conclusion. None of th is determination satisfies the standards required
under Article 3.4. While Indonesia has explained how the KTC’s evaluation of several specific
Article 3.4 factors was flawed, Indon esia’s claims under Article 3.1 and 3.4 relate not just to those
factors, but to the KTC’s Article 3.4 analysis in toto.
4.156 Korea’s arguments with respect to specific factors are flawed. The Bank of Korea data shows
positive trends for the companies w ithin the Korean paper industry, and there is no evidence that the
KTC took these trends into account. Korea misstates Indonesia’s argument that the KTC failed to
properly analyse data relating to wages, productivity and employment. In fact, there is no analysis or
attempt to provide context for these data in the KTC’s injury finding, which merely recites the
statistics on employment (but not wages or productivity). The KTC’s failure to use the evidence
regarding wages and productivity to place the declin e in employment in its proper context further
illustrates how the KTC failed to properly evaluate these data. Korea’s explanation regarding the

impact of non-dumped imports ignores the fact that the data shows that the other imports increased
their market share most dramatica lly at the time at which the impor ts under investigation were falling
(first half 2003) and that this increase in other impo rts’ market share appears to have come at the
expense of the domestic industry and to have coinci ded with that industry’s fall in operating profits.
Korea suggests that the large i nvestment in facilities by the domestic industry was for non-subject
production. This ex post explanation suggests there were errors e ither in the domestic industry’s data
or the KTC’s analysis.
4.157 Korea has not explained the KTC’s causation and non-attribution analysis. However, the
KTC is under an obligation to conduct this analys is in every case. The KTC’s failure to properly
conduct this analysis in this case rendered its determination inconsistent with Articles 3.1, 3.2, 3.4 and
3.5 of the Agreement.
4.158 It is not clear whether the KTC excluded all of the domestic producers that imported the
products under investigation. The KTC’s tr eatment of domestic producers excluded from the
definition of the domestic industry also resulted in the overstatement of the market share of the
imports under investigation.
4.159 The KTC should have evaluated whether imports by the Korean industry were related to a
shift by the Korean industry from producing the products under investigation to producing other
higher value added products. The KTC accepted th at the Korean industry’s own imports accounted
for approximately half of the total Indonesian exports. The KTC should have accounted for the
domestic industry’s own imports by excluding that qua ntity of imports from its injury analysis in
order to ensure a consistent and symmetrical analysis.
(c) Korea's injury determinations contain several violations of the disclosure obligations
contained in Articles 6.1, 6.4 and 6.9 of the Agreement
4.160 The KTC improperly failed to disclose the results of the consumer surveys undertaken by the
KTC and the product tests performed by the Korean Agency for Technology and Standards. Korea
has not explained why these test results were inhe rently confidential and why the results could not
have been disclosed in a manner that would maintain due regard of any interests of other parties in
preserving confidentiality.
4.161 Korea states that the KTC provided injury data for the first half of 2003 at the public hearing
held on 27 August 2003. To the best of Indonesia' s knowledge, no such information was provided to
the representatives of the Sinar Mas Group present at that meeting.
4.162 Korea assumes that there is no requirement to require that good cause be shown for the
treatment of confidential information that is "by na ture confidential". Article 6.5 of the Agreement
mandates a showing of good cause in all situations. The KTC's failure to insist on this requirement
constitutes a violation of Article 6.5 of the Agreement.
4.163 Indonesia identified specific defici encies in the non-confidential ve rsion of the application in
paragraph 205 of its first submission. Korea has not responded to a single one of those allegations.
The KTC made defective disclosure of "normal values, export prices and dumping margins for
Indah Kiat, Pindo Deli, and Tjiwi Kimia", "the basis for the Domestic Industry's request for
cumulation of imports from Indonesia and China" and " the price effects of imported products".
4.164 Indonesia requests the Panel to find that in imposing its anti-dumping measure against certain
paper products from Indonesia, Korea acted inconsistently with its obligations under provisions of the
Agreement listed in paragraph 207 of Indonesia’s first written submission.

4.165 Indonesia also requests that for the reasons e xplained in paragraphs 210-211 of its first
written submission, the Panel exercise its discretion under Article 19.1 of the DSU to suggest ways in
which Korea could implement the Panel's rulings and recommendations by suggesting that Korea
repeal Regulation No. 330 of the Ministry of Finance and Economy dated 7 November 2003 imposing
definitive anti-dumping duties on imports of certain paper products from Indonesia.
F. SECOND WRITTEN SUBMISSION OF KOREA
4.166 The following summarises Korea's arguments in its second submission.
1. The composition of Indonesia’s delegation
4.167 Article 18.2 of the DSU and paragraph 3 of the Panel’s Working Procedures require a WTO
Member participating in a dispute settlement pr oceeding to “treat as confidential information
submitted by another Member ... which that Member has designated as confidential .” These
provisions plainly prohibit WTO Members from disclos ing to company officials any submissions that
have been “designated as confidential” by the WTO Member that submitted them.
4.168 Korea’s first written submission in this proceed ing was designated by Korea as confidential.
Nevertheless, Indonesia included employees of the Sinar Mas Group in its delegation for the first
meeting of the Panel, and gave those employees a ccess to documents prepared based on confidential
information in Korea’s confidential submissions.
4.169 Under Article 6.5 of the Agreement, Korea is required to maintain the confidentiality of
information that was submitted to the KTC in confidence by the parties to the antidumping
investigation. However, the participation of co mpany officials in Indonesia’s delegation necessarily
meant that any attempt by Korea to address confiden tial information in its submissions to the Panel
would result in the improper disclosure of that inform ation. Korea has, therefore, continued to object
to the participation of company employees in Indonesia’s delegation.
4.170 A few days before the deadline for the most recent submissions to the Panel, Indonesia
informed the Panel that its delegation for th e second meeting of the Panel would include only
government officials and legal advisors. Although Indonesia’s letter did not fully satisfy Korea’s
concerns, especially with respect to previous subm issions that Korea had designated as confidential,
Korea decided to provide the full confidential version of its submissions to Indonesia, subject to the
understanding that these submissions would not be disclosed by Indonesia to anyone other than the
relevant Indonesian government officials and to lega l advisors of Indonesia who agreed to maintain
the confidentiality of information provided to them.
4.171 Nevertheless, Korea wishes to re-emphasize th e importance of strict adherence to the
confidentiality obligations of Article 18.2 of the DS U, which are critical to the functioning of the
WTO dispute settlement system. Great care should, th erefore, be taken to prevent actions, such as the
inclusion of company officials in proceedings in which information designated as confidential will be
discussed, that would tend to compromise the confidentiality obligations.
2. Dumping calculation issues
(a) Treatment of Sinar Mas Group Mills as a Single Entity
4.172 In its first written submission, Indonesia asserted that Korea was required to define the terms
“exporter” and “producer” for purposes of Article 6. 10 of the Agreement based on the provisions of
Indonesia’s municipal corporate law, which would treat each corporation as a legally-distinct entity.
However, in its statements during the first Panel meeting, Indonesia appears to have retreated from
that position. It appears that Indonesia now con cedes that an investigating authority may treat

separate corporations as a single entity in appropria te circumstances, and that the separate corporate
form is simply a “relevant” factor.
4.173 However, disagreement still remains concerning the standard for determining the relevant
facts. Indonesia would require explicit evidence of coordination on specific export transactions.
Korea, instead, would allow the investigating authorities to make reasonable inferences from the
totality of the circumstances, even when overt ev idence of a collaboration has not been found. In
Korea’s view, the totality of the evidence in this case plainly jus tified the conclusion that the
Sinar Mas Group mills were not acting independently. Even if this did not identify specific instances
of coordination of activities in export markets, it did provide a reasonable basis for the KTC to infer
such coordination.
(b) Facts Available for Tjiwi Kimia
4.174 Indonesia contends that, before the KTC could r esort to “less favourable” facts available for
Tjiwi Kimia’s export price and normal value, the KTC was required to “cooperate” with the
Sinar Mas Group by providing an additional opportunity to submit the Tjiwi Kimia data. Indonesia
fails to recognize, however, that the Sinar Mas Group’s refusal to provide information precluded
cooperation from the KTC.
4.175 When the KTC first issued its questionnaires, the Sinar Mas Group did not attempt to discuss
with the KTC whether the information requested from Tjiwi Kimia was actually “necessary.” The
Sinar Mas Group did not consult with the KTC a bout possible steps to reduce the burdens of
compiling the Tjiwi Kimia information. Instead, th e Sinar Mas Group unilaterally made the decision
to withhold the Tjiwi Kimia information without co nsulting the KTC at all — before it had given the
KTC any description of the Sinar Mas Group or of the relationship among its mills.
4.176 The provisions of Article 6.8 are absolutely clear . When an interested party “refuses access
to, or otherwise does not provide, necessary information within a reasonable period or significantly
impedes the investigation,” the investigating authorities may apply facts available. It is clear that the
Sinar Mas Group refused to provide necessary information, and it is clear that this refusal “impeded”
the KTC’s ability to complete its analysis. In such circumstances, the KTC’s decision to use “facts
available” was authorized under the Agreement and, in fact, entirely appropriate.
4.177 As a separate matter, Indonesia claims th at the KTC was required to “corroborate” the
information it used as facts available for Tjiwi Kimi a. But these arguments are also misplaced. The
information in the application, which the KTC used as “facts available” for Tjiwi Kimia, came
entirely from independent and reliable sources. Once the KTC confirmed that this data accurately
reflected the information from those independent and reliable sources, any corroboration requirements
under paragraph 7 of Annex II were necessarily satisfied.

4.178 Moreover, although no further corroboration of this data was necessary under the applicable
provisions of the Agreement, the KTC actually did ta ke further steps to corro borate the information
on export prices and normal values that had been submitted in the application. The KTC’s reliance on
this information was, therefore, entirely consistent with the requirements of Paragraph 7 of Annex II.
(c) Facts Available for Indah Kiat and Pindo Deli
(i) Rejection of Submitted CMI Sales Data
4.179 As explained previously, the Sinar Mas Gr oup refused to allow the KTC access to the
financial statements and accounting records of CMI. The KTC concluded that, without access to the
CMI financial statements and accounting records, it could not verify the completeness of the reported

domestic sales. The KTC therefore decided to base the normal value for Indah Kiat and Pindo Deli on
a constructed normal value, as “facts available.”
4.180 Indonesia asserts that the completeness of the re ported sales could have been verified through
the other documentation that the Sinar Mas Group agr eed to make available at verification. That
argument is, however, based on a fundamental misconception of the nature of the verification process.
4.181 In verifying the “completeness” of submitted sal es files, the investigating authorities are
trying to “prove a negative” — that there were no repor table transactions that were incorrectly omitted
from the sales listing. Because certainty can never be achieved, the goal of the verification is to
reduce the risk of inaccuracy to a reasonable leve l. Verification therefore involves a variety of
“completeness” tests intended to achieve a sufficient “level of comfort” with the submitted data.
4.182 As noted in Korea’s first submission, the r econciliation of the reported sales to the selling
company’s accounting records and financial stat ements “lays the foundation” for any other
completeness tests, and also serves to establish the va lidity of the documents presented at verification.
The Sinar Mas Group’s refusal to allow that reconciliation, therefore, seriously impeded the
verification process. It also undermined whatever confidence the KTC may have had in the submitted
data. As an accountant with extensive expe rience in auditing and verification processes has
explained:
[T]he mere fact that the Reseller refused to allow access to its financial statements
would have raised serious questions about the accuracy of its information.... The fact
that the Reseller objected to disclosure of its financial statement after it had agreed to
disclose its detailed customer and pricing in formation would strongly suggest that the
Reseller was hiding something, and that there was some inconsistency between the
information in the financial statements a nd the information already provided in the
sales listing.
In these circumstances, the othe r tests the Sinar Mas Group allowed the KTC to perform could not
replace the reconciliation to the financial statements , because they did not a llow the KTC to achieve
the necessary level of confidence in the completeness of the submitted CMI data.
4.183 There also is no merit to Indonesia’s claims that the completeness of the reported CMI sales
data had been verified once the completeness of the mills’ sales to CMI had been established.
Contrary to Indonesia’s assertions, the Sinar Mas Group actually admitted that there was not a one-to-
one correspondence between the sales from the mills to CMI and the sales from CMI to its customers
over the course of the entire investig ation period, due to differences in “timing.” Instead, there was a
discrepancy of roughly [[**]]
49 tons. Consequently, the verificati on of the total quantity of the mills’
sales to CMI did not establish the total quantity of CMI’s sales to its customers.
4.184 Furthermore even if the total quantity of CMI’ s sales had been estab lished, questions about
the reported prices would have remained. Without access to CMI’s accounting records, there was no
way for the KTC to confirm that the invoices present ed to it at verification to support the reported
sales prices actually matched the invoices that we re recorded in CMI’s accounting records. In
addition, without a reconciliation to CMI’s financial statement, there was no basis to conclude that
there were no unreported discounts, rebates, billing adjustments or additional charges by CMI.
4.185 Indonesia has claimed that, when faced with the Sinar Mas Group’s refusal to submit the
requested information, the KTC was required to try to “cooperate” with the Sinar Mas Group to help
it overcome these “difficulties.” Indonesia thus attemp ts to invoke the provisions of Article 6.13 of
the Agreement, and, more specifically, the Appellate Body’s decision in Hot-Rolled Steel Products

49 Korea requests that the data in square brackets be treated as confidential.

from Japan (in which the Appellate Body overturned a finding that a respondent that was unable to
obtain information from an affiliate had been “uncooperative”).
4.186 There is, however, simply no parallel between the Hot-Rolled Steel case and the present case.
Furthermore, there was no evidence that the Sina r Mas Group was unable to obtain information from
CMI. Any doubt about the Sinar Mas Group’s ability to obtain the necessary information was
removed when the Sinar Mas Group submitted purpor ted CMI income statements only a few days
after the verification, after it realized what th e consequences of its non-c ooperation would be. The
Sinar Mas Group’s argument that it could not persuade CMI to allow access to its financial statements
and accounting records is nothing more than a cyni cal attempt to exploit the Appellate Body’s ruling
in Hot-Rolled Steel.
4.187 Finally, Indonesia claims that the problems caused by the Sinar Mas Group’s refusal to allow
the KTC access to the CMI financial statements and accounting records at verification were cured
when the Sinar Mas Group subsequently submitte d two worksheets purporting to represent CMI’s
income statements. A review of the Sinar Mas Gr oup’s submission makes clear, however, that this
submission was intended to address a different issu e, and not to establish the completeness of the
reported sales. At no point during the proceedings before the KTC did the Sinar Mas Group argue
that the completeness of the submitted CMI sales data had been verified during the verification or by
the subsequent submission of the purported income statements. Instead, that argument was first raised
by Indonesia, in its first submission to this Panel.
4.188 In any event, Indonesia’s post-hoc efforts to resurrect the submitted sales data are
unpersuasive. Because the purported in come statements were only submitted after verification, they
could not have been used to verify the reported sales data at verification. The Sinar Mas Group never
submitted the worksheets and supporting accounting reco rds that would be needed to reconcile the
reported sales data to the purported income stat ements. Furthermore, the KTC had no basis for
assessing whether the purported income statements , which were not audite d, were nonetheless
accurate and reliable. By the time the Sinar Mas Group finally submitted those statements, it was too
late to verify them, because the verification was already finished.
(ii) Inclusion of Amount Representing CMI’s SG&A Ex penses in the Calculation of Constructed
Value
4.189 In its first submission, Indonesia objected to the inclusion of an amount representing CMI’s
SG&A and financial expenses in the calculation of the constructed normal value. During the first
meeting of the Panel, however, Indonesia clarifie d that it did not object to the inclusion of some
amount for CMI’s SG&A and fina ncial expenses. Instead, it now objects only to the particular
amounts used by the KTC.
4.190 According to Indonesia’s oral statement, the SG &A and interest expense figures used by the
KTC (which were derived from verified inform ation from the unrelated Indonesian respondent
[[Company A]]
50) were incorrect because the purported CM I “income statements” submitted by the
Sinar Mas Group after verification presented a better s ource for the relevant expenses. In addition,
Indonesia also argued that the [[Company A]] 51 expenses used by the KTC as “facts available”
double-counted “manufacturing related expenses.” These claims are, however, without merit.
4.191 First, as discussed above, the purported CMI “income statements” were unreliable and
unverifiable. Because they were unaudited, the KT C could not rely on an auditor’s opinion as the
basis for an assumption that they were accura te. And, because the KTC only received those

50 Korea requests that the data in square brackets be treated as confidential.
51 Ibid.

statements after the verification, it had no way to conduct its own verificati on to determine whether
the figures presented in those statements were correct.
4.192 Second, the [[Company A]] 52 SG&A expenses that the KTC used in place of the CMI
expenses did not, in fact, reflect the overall [[Company A]]53 SG&A expenses. Instead, the KTC used
the much lower SG&A expense rate derived from a worksheet [[Company A]] 54 had submitted
identifying the selling and sales-related administrative expenses for sales of the subject merchandise.
4.193 Finally, Indonesia’s suggestion that the SG&A and interest expense figures used by the KTC
double-counted manufacturing-related expenses reflects a fundamental misunderstanding of the nature
of SG&A and interest expenses. SG&A expenses rela te either to selling activities (if they are selling
expenses) or to overall company activities (if they are G&A expenses). There is no direct correlation
of these expenses with a company’s manufacturing activities (or lack thereof).
4.194 In Korea’s view, it would have been reasonabl e for the KTC to use the overall [[Company
A]]55 SG&A expenses as the basis for its calculation of the “facts available” SG&A expenses for a
company operating at the level of CMI. Neverthele ss, the KTC did not do so. Instead, it based its
calculations on the selling and sales-related admi nistration expenses incurred by [[Company A]] 56,
without including the overall G&A expenses of the affiliated company that manufactured the subject
merchandise. This calculation almost certainly understated the applicable G&A expenses.
Consequently, there is no basis for Indonesia’s complaints.
(iii) Adjustment for Differences in Level of Trade
4.195 Indonesia argues that an adjustment should have been made for the differences between the
level of trade for the mill’s exports to Korea and the level of trade for the CMI resales. Indonesia also
claims that, if a level-of-trade adjustment was not required, an adjustment would still have been
required because the involvement of CMI in th e domestic-market sales constituted a difference
affecting “price comparability.” These arguments are, however, fundamentally flawed.
4.196 Indonesia’s request for a level-of-t rade adjustment is flatly in consistent with the Sinar Mas
Group’s repeated statements during the investigati on that the relevant sales in both markets were at
the same level of trade . Consequently, the KTC’s decision not to make a level-of-trade adjustment
must be upheld — in accordance with Article 17.5 of the Agreement, which directs the Panel to base
its review upon “the facts made available in confor mity with appropriate domestic procedures to the
authorities of the importing Member.”
4.197 Furthermore, Indonesia’s claim that CMI’s in volvement resulted in additional expenses is
wholly unsubstantiated. As Korea has explained previously, the involvement of CMI in the domestic-
market sales might just have meant that the mills had to bear expenses on their export sales that they
did not bear on their domestic sales (because CMI was already bearing them on the domestic sales).
To the extent that CMI’s involvement just reflected a shifting of expenses from the mills to CMI on
domestic sales, CMI’s involvement would not have resulted in any additional expenses — and thus
would not have had any impact on price comparability.

52 Ibid.
53 Ibid.
54 Korea requests that the data in square brackets be treated as confidential.
55 Ibid.
56 Ibid.

(d) Continuation of Investigation after Preliminary Determination
4.198 In its first written submission, Indonesia claimed that Korea was required, under Article 5.8 of
the Agreement, to terminate the antidumping inves tigation immediately with respect to Indah Kiat
once the KTC made its preliminary determination that Indah Kiat had de minimis dumping margins.
But this argument ignores the fact that the KTC ne ver indicated that it was “satisfied” that the Sinar
Mas Group mills were not dumping.
4.199 The KTC’s preliminary determination specifically noted that it was reviewing certain aspects
of its preliminary calculations — in particular, its decision to calculate separate dumping margins for
Indah Kiat , Pindo Deli and Tjiwi Kimia. Consequently, it is clear that the KTC was not “satisfied”
that there was no dumping at the time it made its preliminary decision. Thus, Article 5.8, which
requires termination only when the investigating aut horities are “satisfied” that there is not sufficient
evidence of dumping, is inapplicable.
4.200 Furthermore, contrary to Indonesia’s claims, the KTC did not impose antidumping duties on
Indah Kiat after making a preliminary determination that Indah Kiat had de minimis dumping
margins. Instead, the KTC’s final determina tion imposed antidumping duties on the single entity
comprised of Indah Kiat, Pindo Deli and Tjiwi Kimia. The KTC had never determined that this single
entity had de minimis dumping margins. In short, there ne ver was a preliminary determination of
de minimis dumping margins for the entity that was the subject of the KTC’s final determination.
(e) Disclosure of Verification “Results”
4.201 Indonesia has asserted that the KTC’s failure to disclose its internal verification report was
inconsistent with the requirements of Article 6.7. In this regard, Indonesia claims that the disclosure
of “results” required by Article 6.7 calls for more extensive detail than the disclosure of “essential
facts” under Article 6.9.
4.202 That interpretation cannot, however, be reconcile d with the ordinary meaning of the language
of the Agreement. Article 6.7 clearly envisions that disclosure of the verification results as part of the
“essential facts” under Article 6.9 is sufficient. It states explicitly that the investigating authorities
“shall make the results of any such [ on-the-spot] investigations available, or shall provide disclosure
thereof pursuant to paragraph 9.”
4.203 As a separate matter, Article 6.7 does not, by its terms, require disclosure of a detailed report,
or a step-by-step recitation of the process followed, or a full accounting of all documents examined.
Instead, it only requires the disclosure of the “result s” of verification. The use of the term “results”
indicates that the investigating authorities must disclose their conclusions they drew from the
verification — not the steps that led to those conclusions.
4.204 In this case, the KTC’s disclosure was suffici ent to inform the Sinar Mas Group of the
“results’ of verification and of all other “essential facts.” Indonesia’s claim must therefore be
dismissed.
3. Injury issues
(a) Like product
4.205 As explained in Korea’s first submission, th e KTC defined the “product” under investigation
in this case to include all wood-free paper meeting the definition set forth in the application. Then, in
accordance with Article 2.6 of the Agreement, th e KTC identified the most similar products produced
by the Korean industry as the “like product.”

4.206 Indonesia has argued that the KTC should have considered “whether the product under
consideration contained more than one ‘like product.’” That argument, however, is inconsistent with
the definition of “like product” in Article 2.6, wh ich indicates that the “like product” flows directly
from the definition of the “product under consider ation.” Since Indonesia has not challenged the
KTC’s definition of the “product” under consideration, it has no basis for objecting to the definition of
the “like product” flowing from the definition of the “product” under consideration.
4.207 Furthermore, even if the definition of the “p roduct” under consideration had been raised, the
KTC’s determination would have to be upheld. No evidence was presented to the KTC to support
Indonesia’s claim that the uncoated wood-free pape r category included two “products” within the
meaning of the Agreement. The Indonesian produ cers submitted only broad conclusory statements
that there were differences in physical characteristics, end uses, substitutability, prices, market sectors,
HTS classifications, and production processes. They did not identify what the differences were, and
they did not provide any evidence to support their claims.
4.208 By contrast, the applicants did address the subs tantial overlaps between “plain paper copier”
paper and other categories of “uncoa ted wood-free paper” in their application. Since the information
submitted by the applicants was uncontested, there would have been no basis for an unbiased and
objective investigating authority to find that the two categories proposed by the Sinar Mas Group
constituted separate products.
(b) Dumped import volumes
4.209 Indonesia’s arguments have focused on statistic s that apparently show a 15.3 per cent
decrease in the volume of dumped imports in the first ha lf of 2003. But, a closer review reveals that
this apparent “decrease” did not actually reflect a fa ll in imports. The imports during the first half of
2003 totalled 88,774 tons — which corresponded to an annual rate of 177,548 tons . This annual rate
was actually higher than the annual rate of imports in any previous year, including the previous record
year of 2002 (when dumped imports totalled 176, 522 tons). Thus, in absolute terms, the dumped
imports were increasing.
4.210 Furthermore, the evidence showed that, in relativ e terms, the dumped imports in the first half
of 2003 had an even higher market share than in any previous year. The KTC decided to base its
analysis of import trends during the first half of 2003 on this evidence of increases relative to
consumption.
4.211 In this regard, the KTC’s decision to focus on relative market shares was entirely consistent
with Article 3.2 of the Agreement, which specifical ly provides that “[w]ith regard to the volume of
the dumped imports, the investigating authorities sha ll consider whether there has been a significant
increase in dumped imports, either in absolute terms or rela tive to production or consumption in the
importing Member.” Since the evidence demonstr ated that the dumped imports had increased
“relative to production or consumption,” the KT C properly relied on that evidence to support its
finding of a significant increase in dumped imports.
(c) Adverse price effects of dumped imports
4.212 Indonesia contends that a finding of price undercutting was logically impossible in this case,
in view of data showing that, in some years, the average prices for sales of the dumped imports were
higher than the average prices for the domestic industr y’s sales. But, even if there had been no “price
undercutting,” that would not mean that the dumped imports had not “otherwise depress[ed] prices to
a significant degree or prevent[ed] price increases , which otherwise would have occurred, to a
significant degree.”

4.213 In this case, the KTC found that the evidence demonstrated that the dumped imports had both
depressed prices and prevented price increases: The KTC’s determination of price depression was
based on the evidence that the overall decrease in the domestic industry’s prices from 2000 to 2003
was correlated to the consistent fall in the pr ices for dumped imports over that period. Its
determination of price suppression was based on evid ence that, as a result of the competition with
dumped imports, the domestic industry had been una ble to achieve prices that would have enabled
them to earn a reasonable level of operating income.
4.214 In short, the evidence was overwhelming that, as the dumped imports increased their market
share at ever lower prices, the Korean industry had suffered falli ng prices that resulted in meagre
“operating” profits at best, and consistent losses af ter taking other ordinary expenses into account.
The KTC’s finding of price depression and suppression was entirely consistent with this evidence.
(d) Factors relevant to material injury determination
4.215 Indonesia also claims that the KTC failed “to properly consider all injury factors” described
in Article 3.4 of the Agreement. However, Indonesi a has not identified a single relevant factor that
the KTC ignored. To the contrary, Indonesia has sp ecifically conceded that the KTC actually did
examine all of the factors identified in Article 3.4.
4.216 Indonesia also argues that the KTC’s evaluation of those factors should have led to a different
conclusion. But there was no evidence of any positive trends for the Korean industry. It faced
declining market share, production and prices. A nd, despite shedding employees at an alarming rate,
it remained unprofitable throughout the period. Th e KTC’s determination that the Korean industry
was experiencing material injury was, therefore, entirely consistent with the available evidence.
(e) Causal link between imports and injury
4.217 Indonesia asserts that the KTC should have attributed the injury the Korean industry
experienced to other causes. But, the KTC did ex amine all other factors which it thought might be
suspected of causing the injury to the Korean industry. It found that none of these had been a cause of
the injury the KTC observed.
4.218 In its submissions, Indonesia has attempted to poke holes in the KTC’s analysis of specific
factors. But, the examples identified by Indonesi a are unpersuasive. To th e contrary, the evidence
showed that the dumped imports increased their ma rket share in every single year, at constantly
decreasing prices. As a result, the domestic industr y was unable to raise its prices to profitable levels,
despite massive cuts in employment. No other f actor was to blame for th e injury caused by the
dumped imports.
(f) Imports by Korean producers that we re not part of the domestic industry
4.219 Indonesia asserts that the KTC was required to consider the portion of the dumped imports
accounted for by the Korean producers that were excluded from the domestic industry as an
“alternative cause” of injury. But, Indonesia has not pointed to any provision of the Agreement that
would define imports of the dumped products from the countries under investigation as an
“alternative” cause of injury.
4.220 The only provision addressing imports by domes tic producers is Article 4.1, which permits
the investigating authorities to exclude importing producers from the definition of the “domestic
industry.” There is nothing in Article 4.1 or in an y other provision of the Agreement that permits an
investigating authority to classify imports at dum ped prices of the product under consideration from
the countries under investigation as anything other than “dumped imports.”

4. Conclusion
4.221 It is apparently easy for an exporter like th e Sinar Mas Group to criticize an investigating
authority after the fact for failing to decide the case in the way the exporter would have liked, based
on arguments that were never even presented to th e investigators. But the evidence shows that KTC
and its staff conducted this investigation in accord ance with the highest standards of professionalism.
It adhered to procedures designed to allowed all part ies to participate and defend their interests fully.
Its decisions reflected an objective and unbiased ass essment of the facts, under entirely reasonable
interpretations of the relevant legal principles.
G. SECOND ORAL STATEMENTS OF INDONESIA
4.222 The following summarises Indonesia's arguments in its second oral statements.
1. Opening Statement of Indonesia at the Second Meeting of the Panel
(a) Issues relating to the determination of dumping
(i) Use of FactsAvailable For Indah Kiat And Pindo Deli
4.223 Korea continues to take the position that the investigating authority is entitled to have what is,
in effect, a zero tolerance policy for any inability by an exporter to provide requested information.
This is contrary to the entire scheme of Article 6.8 and Annex II governing the steps that must be
taken by an investigating authority before rejecting submitted information. The investigating authority
cannot rigidly adhere to deadlines without cons idering whether it would be possible to accept
information submitted after the deadline. Here, th e KTC made no such effort. The investigating
authority must take into account difficulties faced by an exporter in deciding how to proceed under
Article 6.8. This requires some cooperative interac tion with the exporters. Here, the KTC did not do
so.
(ii) Rejection of the Domestic Sales Data
4.224 Korea submitted an affidavit of Mr. Ki-Seok You, a Korean accountant that has represented
Korean companies, including the paper industry involve d in this case, in anti-dumping investigations.
In response to Mr. You’s affidavit, Indonesi a submits as Exhibit IDN-57 an affidavit by
Mr. Albert Hayes, a former US Department of Commerce investigator with extensive experience in
conducting USDOC anti-dumping verifications around the world, who has previously testified in
WTO dispute settlement proceedings. Mr. Hayes’ opi nion is that the CMI re-sales data would be
verifiable even without the CMI financial statement.
4.225 Mr. You actually supports Indonesia’s position. Mr. You acknowledges that it is possible that
an investigating authority could have "considered the Reseller’s sales data to be verified in the
circumstances I have described." It follows from this that the domestic sales information was, at a
minimum, verifiable by the KTC within the meaning of paragraph 3.
4.226 Korea argues that it would have had to have acce ss to CMI’s inventory records in order to see
that there was a one-to-one correspondence for all sa les. But it is undisputed that CMI never took
possession of the goods and therefore had no inventor y and no reason to have inventory records.
Korea also suggests that the fact that the databases of re-sales by CMI contained slightly more sales
than the databases of sales by th e exporters to CMI undermines Indo nesia’s position. Contrary to
Korea's argument, this re-affirms Indonesia’s argument s. In its verification plan, the KTC asked the
Indonesian exporters to explain why there were sl ight differences between the quantities in the two
sets of databases. This indicates that the KTC exp ected these two databases to match and that it

considered that the "total pool of reportable sales" was defined by the sales by the exporters to CMI.
The KTC apparently accepted the explanations provided by the exporters.
4.227 Korea does not directly contradict Indonesi a’s evidence that it was provided access to CMI’s
accounting records during the verification, stating only that the relevant KTC officials "are unable to
reconcile [Ms. Lim’s] statement to their experien ce or to the documents provided to them." Korea
argues that the list of exhibits presented to the KT C officials during the verification and provided to
the Panel as Exhibit IDN-20 contains no referen ce to CMI ledgers. However, Ms. Lim’s evidence
was that she provided the KT C officials with access to computerised, not hard copy, sales records.
Second, Korea argues that Ms. Lim’s affidavit "does not indicate that the KTC was allowed access to
CMI’s accounting records." That this is incorrect is confirmed by Ms. Lim's further affidavit
(Exhibit IDN-60).
4.228 Korea's position that the CMI financial statemen ts were necessary to test "completeness" of
the submitted domestic sales is inconsistent with its actions. In its verification plan, under the heading
of "completeness", the KTC requested the submission of a reconciliation between the
Indah Kiat/Pindo Deli financial statements and the submitted mills sales data as well as several
reconciling items. In contrast, there was no expr ess request to submit a reconciliation between the
CMI financial statements and the submitted resales data. From the conduct of the KTC prior to and
subsequent to the verification it is clear that the KTC did not request the submission of any sort of
prior reconciliation to the CMI financial statements in its verification plan.
(iii) Rejection of the CMI Financial Statements
4.229 Korea has not explained why it considered the submission of the CMI financial statements on
9 April 2003 not to have been made within a r easonable period of time. Korea has argued that it
could not use these financial statements because they were not verifiable, in that they were submitted
after verification and were not supported by accompan ying worksheets. However, it appears that the
KTC was verifying information submitted by the domestic industry as late as August 2003 –
four months after the CMI data was deemed unve rifiable. An unbiased and objective investigating
authority cannot consistently reject informa tion provided by the expor ters as untimely and
unverifiable while continuing to collect and veri fy information from the domestic industry for a
further three to four months. Likewise, Korea’s objections to the format of the CMI financial
statements are undermined by the fact that the income statements of [[**]] and [[**]]
57 are in
essentially the same spreadsheet format as those of CMI.
(iv) Calculation of SG&A and Interest Expenses of CMI
4.230 Regarding interest expenses, Indonesia’s position is that the KTC should have used the actual
submitted CMI data. Korea claims that the KTC used for these expenses "an additional amount for
the interest expenses of a company operating at the same level of CMI." This, presumably, also refers
to [[**]]
58. However, Exhibit KOR-54 reveals that [[**]] 59, like CMI, had no interest expenses, but
instead had small amounts of interest income. Inst ead, the KTC used the interest expenses of [[**]] 60
– a manufacturing company not operating at the same level as CMI – as the basis for the interest
expenses of CMI. This is not what Korea claims the KTC did. It is also not what the KTC should
have done. As Indonesia has explained, a production company such as [[**]] 61 necessarily incurs
significant interest expenses solely related to th e manufacturing function. There is no reasonable
basis to attribute interest expenses of this natu re to a company operating at CMI’s level that, in

57 Korea requests that the data in square brackets be treated as confidential.
58 Ibid.
59 Ibid.
60 Ibid.
61 Ibid.

Korea’s words, incurs only selling and sales-related administrative expenses. Korea attempts to rebut
Indonesia’s argument that CMI could not have in curred financing expenses to finance its accounts
receivable by saying that CMI’s payment practices were not verified. This is incorrect. The KTC
verified CMI’s payment terms for 24 different sales without finding any discrepancies.
(v) Use of Facts Available for Tjiwi Kimia
4.231 The KTC’s decision to use data from the application to calculate the normal values and export
prices for Tjiwi Kimia cannot be reconciled with th e requirements of paragraph 7 of Annex II. The
steps allegedly taken by the KTC were plainly inade quate to discharge the duty imposed on the KTC.
Korea’s justifications provide no valid grounds for a reasonable investigating authority to (1) rely on
secondary data which has been directly contradicted by its own findings, and, (2) assume that a single
exporter with an insignificant quantity of export sales has dumping margins far in excess of all other
investigated producers.
4.232 The KTC also failed to comply with its duty to provide the single economic entity of
Sinar Mas companies with any opportunity to submit data regarding the portion of its sales accounted
for by Tjiwi Kimia. Korea now argues that the term "explanation" does not encompass "a second
chance to submit new information." However, th e ordinary meaning of the term "explanation"
encompasses the action of providing further details. Accordingly, paragraph 6 has consistently been
interpreted to refer to an opportunity to provide additional evidentiary information, and not simply
argument, to explain deficiencies in previously-s ubmitted data. Korea's in terpretation would risk
rendering paragraph 6 of Annex II largely inutile.
(vi) Fair Comparison
4.233 Korea argues that CMI’s involvement just reflected a shifting of expenses from the mills to
CMI that would not have resulted in any additional expenses. And yet, as noted, the KTC considered
that CMI incurred roughly double the amount of SG&A and interest expenses as the producers and
exporters Indah Kiat and Pindo Deli. Korea’s argument that these massive additional expenses do not
affect price comparability between the domestic and export markets is at odds with the KTC’s actions
and logic.
(vii) Collapsing the Three Exporters to a Single Entity
4.234 Korea appears to acknowledge that price decision-making in both markets is the appropriate
standard. While it is not clear whether it was actually used by the KTC, this st andard at least has the
advantage of focusing on the essential issue – pricing in each market – and requiring a showing that
the exporters actually or in fact acted as a single entity with respect to those pricing activities.
4.235 From the nature of the grounds used by the KTC, it must be concluded that the KTC did not
consider price coordination to be a necessary conditi on for collapsing legally distinct entities and also
failed to make any determination that there was price coordination between the different Sinar Mas
companies. For this reason, the KTC cannot be consid ered to have articulated or followed a standard
for collapsing that is consistent with Articles 6. 10 and 9.3 of the Agreement. Moreover, no unbiased
and objective authority could have concluded from th e evidence on record that Pindo Deli, Indah Kiat
and Tjiwi Kimia coordinated the prices of their domestic and export sales.
(b) Issues relating to the determination of injury and causation
(i) Like Product
4.236 Indonesia has explained that an injury and cau sal link determination based on unlike products
would be inconsistent with Artic les 2.6 and 3 of the Agreement. Accordingly, there is an obligation

on the investigating authority to ensure that its in jury determinations are based on "like" products.
Nothing in Korea’s second submission rebuts this obligation. In addition, Korea has impliedly
acknowledged that there must be internal consistenc y within the product under consideration. It
would follow then that there must be internal c onsistency in the like product. The fact that the
Agreement does not expressly define the "produc t under consideration" does not absolve the
investigating authority of its duty to define the "lik e product" under Article 2.6 as one that is alike the
product under investigation in all respects and to conduct injury determinations under Article 3 for
"like products," in the plural, so defined.
4.237 It is apparent that the KTC did not make any findings on the issue of whether PPC and WF
were sufficiently similar to warrant the conduct of an aggregate injury determination. While Korea
refers to evidence submitted by an interested part y regarding this issue, the presence of evidence on
the record is, of course, not the same thing as a find ing by the investigating authority regarding that
evidence. Accordingly, the Panel must conclude that the KTC did not compare PPC and WF and
made no findings regarding the similarities or difference between PPC and WF.
(ii) The Injury Analysis
Volume and Price Effects

4.238 Korea consistently relies on its claim that the imports under investigati on were continuing to
increase their market share even in the first half of 2003 to support virtually every aspect of its injury
finding. However, the KTC miscalculated the market share statistics in that it did not properly reflect
the fact that the volume of imports under investiga tion was decreasing at a faster rate than domestic
consumption. Moreover, Korea substantially unders tated total domestic cons umption and, therefore,
overstated market shares, by failing to include in its analysis domestic shipments by domestic
producers excluded from the definition of the domestic industry.
4.239 Korea also now seems to take the position that the KTC did not make any findings regarding
significant price undercutting, instead, the KTC made only findings of price suppression and price
depression. Korea has not explained the standard used by the KTC in its findings of price suppression
and price depression and its findings suffer from a number of deficiencies. Korea’s submissions refer
to the decline in the domestic indus try’s market share as the chief indicator that the domestic industry
was suffering injury. However, given that price is the factor of competition, it is not possible to
attribute the decline in domestic industry market share to imports which do not significantly undercut
domestic prices.
4.240 Korea repeatedly refers to the domestic industry’s consistent ordinary losses as supporting the
findings of price suppression, price depression, and inju ry. These trends have nothing to do with the
price effects of imports since their losses depend on significant changes in non-operating income and
expense.
Article 3.4 Analysis

4.241 The KTC’s superficial series of recitals and conclusions is not sufficient to meet the standards
of Article 3.4. As a legal matter, the KTC may not find injury simply because it considers that there
are no improving trends with respect to the factor s examined. Every industry, including paper, is
subject to the vagaries of a business cycle. It is the responsibility of the investigating authority to
evaluate the trends in injury factors and place them in the context of the business cycle to determine
whether flat trends justify the inference that the domestic industry is sufferi ng material injury. As a
factual matter, Indonesia notes that several of th e injury factors were showing positive or steady
trends. Wages and productivity generally incr eased, and production capacity and output were

generally steady. There was also an increase in facility investment, for facilities that could produce
[[**]]62.
Article 3.5 Causation/Non-Attribution Analysis

4.242 In its attempts to explain the KTC’s causa tion analysis, Korea again relies on the KTC’s
flawed analysis of consumption and market shares. Korea ignores the possible effect of a decline in
domestic consumption on prices. Regarding raw material costs, Korea's position that cost fluctuations
could not affect the Korean industry’s revenues and hence profits. This is directly contradicted by
evidence on the record. The KTC should have analysed the extent to which these cost fluctuations
affected revenue and operating profits as part of its non-attribution analysis. In fact, the substantial
facility investment in 2001 was in facilities th at could be used for [[**]] 63. This suggests the Korean
industry was in a healthy condition. The KTC s hould have considered that imports from other
countries increased significantly over the period of inv estigation, especially towards the end of the
period. Korea has not responded to Indonesia's argument that the domestic industry’s decline in
export volumes was greater than the decline in its domestic shipments for the period 1999-2002.
Domestic Industry’s Own Imports

4.243 Korea admits that if members of the domestic industry were themselves importing the product
under investigation, the analysis "might be more complex." The table provided in Korea’s response to
the Panel’s question 57 indicates that the domestic industry had substantia l imports during several
portions of the period under investigation. The KTC should have conducted the "more complex"
analysis of the impact of these imports on the domestic industry.
(c) Procedural issues
4.244 Indonesia has examined Korea's contention that during the 27 August 2003 hearing, the
Indonesian exporters were provided with a document which indicated that the period of investigation
for injury had been extended till June 2003. In li ght of apparent corroboration of Korea's position,
Indonesia wishes to withdraw its claim regarding this particular issue.
2. Closing Statement of Indonesia at the Second Meeting of the Panel
4.245 Anti-dumping proceedings are necessary complex and burdensome for all parties – the
exporters that participate, the investigating author ities that conduct the investigations, and, not the
least, for WTO panels that must review the investig ating authorities’ determinations. Thus, while this
case is also very detailed, it is by no means unique . The Agreement contains detailed rules for the
conduct of these investigations. These rules have b een interpreted and applied by many previous
panels and the Appellate Body. Indonesia is surpri sed, therefore, by Korea’s claim, not supported by
any reference to precedent, that the Agreement gove rns only the “mental” analysis the investigating
authority must perform, and that the investigating authority’s determinations are no more than written
summaries of that analysis. Indonesia trusts that the Panel will follow established standards and base
its decision on the KTC’s actual determinations.
4.246 In this regard, Indonesia notes that Korea continues to provide new ex post justifications. For
example, Korea now argues that the KTC in fact re quired all three Sinar Mas affiliated exporters to
provide a single questionnaire response, even thoug h the KTC never articulated this position in its
investigation and in fact took the position in its preliminary determination that it was precluded by
law from doing so. Had the KTC taken the position early in the investigation that it wanted a single
response from all three exporters, the entire course of the investigation would undoubtedly have

62 Korea requests that the data in square brackets be treated as confidential.
63 Korea requests that the data in square brackets be treated as confidential.

unfolded differently. But that is not what happe ned, and the Panel can review only what actually
happened. Similarly, Korea now suggests that it excluded importing producers from its analysis of
Korean market consumption as some sort of infere nce adverse to the importers – another previously-
unheard theory.
4.247 In its submissions, Korea has provided much new disclosure and discussion of the substantive
issues that were before the KTC and are now before the Panel. In many respects, the discussion
before the Panel involved precisely the kind of analys is that should have been conducted by the KTC.
For example, Korea has attempted to explain the standards applicable to a decision to collapse
different exporters into one. Any explana tion of these standards was missing from the KTC’s
determination. Similarly, Korea has attempted to discuss the question of whether PPC and WF are
like products, which the KTC did not do (and which Korea continues to maintain it was not required
to do). And to give just one example relating to the injury determination, Korea has provided some
discussion of import trends on a semester-to-semester basis, although Korea has still not disclosed the
half-yearly trends other than for the imports under investigation. Indonesia disagrees with Korea’s
arguments on these issues. However, had the KTC conducted this kind of evaluation of the evidence
– which it was required to do under the Agreement – it is possible that the parties would not be here.
4.248 Korea has suggested that Indonesi a’s arguments have no practical significance. That is not
how Indonesia sees it. An important exporting industry in a developing country has been subject to
anti-dumping duties in a situation where the investiga ting authority first determined that the largest
exporter was not dumping and then changed the rationa les for its determinations until it was able to
conclude that that exporter was in fact dumping. An d the investigating authority then made an injury
determination that consisted of a single sentence of analysis. The Panel may or may not agree with all
of Indonesia’s arguments as to whether the KTC’s conduct was consistent with the Agreement, but it
should be in no doubt as to the practical importance of the issues before it.
H.
SECOND ORAL STATEMENT OF KOREA
4.249 The following summarises Korea's arguments in its second oral statement.
1. Opening Statement of Korea at the Second Meeting of the Panel
(a) The proper conceptual framework
4.250 There are several conceptual flaws in Indon esia’s arguments. For example, a number of
Indonesia’s arguments start with the assumption that the Sinar Mas Group was being truthful — and
then assert that the KTC erred by not accepting the c onclusions that flowed from that premise. But
the Agreement does not require investigating authorities to start with an assumption of truthfulness by
respondents. The KTC was permitted to appro ach the Sinar Mas Group’s submissions with
scepticism, and to require that the Sinar Mas Gr oup demonstrate the accuracy of the submitted
information. When the Sinar Mas Group refused to provide necessary documentation that was readily
available to it, the KTC was justified in concluding that the accuracy of the submitted information was
not established, and that the information could not be used.
4.251 Indonesia’s arguments also fail to recognize that interpretation of the WTO Agreements must
be carefully based on the text of those Agreements . Throughout this proceeding Indonesia has cited a
laundry list of provisions in the Agreement whose obligations it claims Korea has violated. But, it has
failed to undertake the hard analysis of the text of those provisions that is needed to clarify what those
obligations are, and whether Korea’s actions were inconsistent with them.
4.252 Finally, Indonesia’s arguments concerning the sufficiency of Korea’s final determination
assume that the Agreement requires perfect expl anations of the analysis performed by the
investigating authorities — including full responses to arguments that were never presented to the

investigators. But the provisions of Articles 12.2 and 12.2.2, which set forth the requirements for the
investigating authorities’ explanations, only require explanations “in sufficient detail” of all “material
issues” and of the “main reasons leading to the dete rmination.” Of course, the explanations provided
must be sufficient to permit a Panel to determ ine whether an investigating authority properly
“assessed” or “considered” or “examined” or “evaluated” the relevant factors. But they do not require
perfection — especially on issues that were not raised during the proceedings before the investigators.
(b) Dumping calculation issues
(i) The KTC’s decision to “collapse” the Sinar Mas Group mills
4.253 Indonesia has conceded that an investigating authority may treat separate corporations as a
single entity in appropriate circumstances, and that th e separate corporate form is simply a “relevant”
factor. However, Indonesia has argued that Korea’s description of the facts supporting the conclusion
that the Sinar Mas Group acted as a single entity is not correct. The effort is, to say the least,
unconvincing. It would require the Panel to disreg ard the evidence — including the business card of
an official in a corporate marketing department that Indonesia claims does not exist, the Sinar Mas
Group’s own statements about CMI’s role in negotiating sales in Indonesia, and the fact that the three
Sinar Mas Group mills shared the same president, a ma jority of directors, and several vice-presidents
as well.
(ii) “Facts available” for Tjiwi Kimia
4.254 Indonesia has claimed that the KT C failed to properly corroborat e the facts available used to
determine the export price and normal value for Tjiwi Kimia. But the “facts available” for
Tjiwi Kimia were corroborated within the meaning of paragraph 7 of Annex II — by deriving the
export price data from official Korean customs st atistics, and by basing normal value on information
from an independent Korean government agency, and then comparing this information with the data
submitted by the responding companies.
4.255 In the end, Indonesia’s argument reduces to the proposition that the dumping margin assigned
to Tjiwi Kimia could not be significantly higher th an those assigned to more cooperative respondents,
because that would imply that the “facts available” had not been corroborated against the information
submitted by the more cooperative respondents. But th is argument would effectively read the third
sentence of paragraph 7 of Annex II out of the Ag reement, because it would prevent investigating
authorities from assigning results to non-cooperative r espondents that are “less favourable” than those
assigned to cooperative respondents.
4.256 Indonesia also claims that the KTC could not properly resort to “less favourable” facts
available for Tjiwi Kimia unless it had given th e other Sinar Mas Group mills an additional
opportunity to submit the Tjiwi Kimia data. Ther e is nothing in the Agreement that supports this
claim. Furthermore, Indonesia’s argument is based on a factual erro r. Contrary to Indonesia’s
assumptions, the KTC had not initially re quested the Tjiwi Kimia information solely from Tjiwi
Kimia. Instead, its questionnaire to each of the Sinar Mas Group mills requested complete
information on all sales by all related parties. Inda h Kiat and Pindo Deli were specifically told that,
“[f]or all related parties,” they should “include the sales and cost of these related companies with your
sales and cost in the same computer data file(s) and submit a single narrative response.”
4.257 In this case, the Sinar Mas Group did not ask the KTC to modify its questionnaire
requirements, and it did not give the KTC the inform ation that would be needed to make an informed
decision. Instead, without ever consulting the KTC, the Sinar Mas Group unilaterally decided that it
was not going to provide any information on Tjiwi Ki mia’s sales and production. There is no way to
read this as anything other than a refusal by th e Sinar Mas Group to provide information that was

specifically requested in the KTC’s questionnaire — and that was requested not only from the Group
as a whole and from Tjiwi Kimia, but also from each of the Group’s other mills.
(iii) The KTC’s rejection of the submitted CMI sales data
4.258 Indonesia contends that the KTC improperly penalized the Sinar Mas Group for the
“difficulties” the Group experienced in obtaining financial statements and accounting records from
CMI. However, there is no evidence of any real “difficulties.” Although the CMI income statement
had been specifically requested in the KTC’s initial questionnaire, the Sinar Mas Group did not
provide any indication that it was experiencing “difficulties” in obtaining that information until the
start of verification, and it never apprised the KTC of the efforts it was making to obtain the requested
information. Then, when the Sinar Mas Group rea lized the consequences of its non-cooperation after
the verification was over, it managed to provide purported CMI income statements to the KTC in the
space of less than a week. Furthermore, in light of the evidence that CMI was part of the same
Division as the other Sinar Mas Group mills and shar ed the same offices, it was reasonable for the
KTC to conclude that the failure of the Sinar M as Group to supply the requested documentation was a
wilful refusal, and not a mere “difficulty.”
4.259 Indonesia also claims that the KTC could have completed its verification successfully without
access to CMI’s financial statements and accounti ng records. Significantly, this argument was never
raised to the KTC during its investigation. More importantly, it is based on a misunderstanding of the
nature of a completeness test (based in large part on a mischaracterization of the practice of the US
Department of Commerce).
4.260 In verifying the “completeness” of submitted sales files, the investigating authorities are, in
fact, trying to “prove a negative” — to satisfy them selves that there were no reportable transactions
that were incorrectly omitted from the sales listing. In this case, the Sinar Mas Group refused to allow
the KTC to conduct the most fundamental completeness test — the reconciliation of the reported CMI
sales to CMI’s normal accounting records and financ ial statements. The Sinar Mas Group therefore
prevented the KTC from “laying the foundation” fo r any other completeness tests, and from “base-
lining” the documents presented at verification. And, more fundamentally, the Sinar Mas Group’s
refusal to allow the KTC access to the CMI financial statements and accounting records necessarily
raised questions about the Sinar Mas Group’s credibility. In the end, the verification of completeness
comes down to a matter of trust. The Sinar Mas Gr oup’s refusal to allow access to the CMI financial
statements and accounting records made failure virtually inevitable.
4.261 Indonesia also claims that the completeness of the CMI sales to its customers was established
by the verification of the completeness of the sales fr om the mills to CMI. This argument is based on
the premise that there was a one-to-one corresponde nce between the mills’ sales to CMI and CMI’s
sales to its customers. In f act, there was a discrepancy of some [[**]] tons — roughly [[**]]
64 reams
of paper — between the sales form the mills to CMI and the sales from CMI to its customers.
Furthermore, even if the total quantity of CMI’ s sales had been established, questions about the
reported prices would have remained. Without access to CMI’s accounting records, there was no way
for the KTC to confirm that the invoices presented to it at verification to support the reported sales
prices actually matched the invoices that were record ed in CMI’s accounting records, or that there
were no unreported discounts, rebates, billing adjustments or additional charges by CMI.
4.262 Finally, Indonesia claims that the KTC could have verified the completeness of the CMI sales
after the verification was over, based on the Si nar Mas Group’s post-verification submission of
purported CMI income statements. But, the KTC had no basis for assessing whether the purported
income statements were themselves accurate and relia ble. A verification would have been needed to
establish that the purported statements were genui ne and fairly presented CMI’s results — and to

64 Korea requests that the data in square brackets be treated as confidential.

reconcile the reported sales to those statements. By the time the Sinar Mas Group finally submitted
those statements, it was too late to verify them, because the verification was already finished.
(iv) Inclusion of facts available SG&A for CMI in constructed value
4.263 Indonesia also claims that the amounts included in the constructed value to reflect CMI’s
selling, general and administrative (“SG&A”) and in terest expenses were t oo high. However, its
arguments are based entirely on unsupported assu mptions about the expenses CMI might have
incurred. Indonesia has not demonstrated that th e amounts the KTC used were unreasonable. In fact,
the amounts used by the KTC were derived from the actual experience of another Indonesian
company that sold the subject merchandise in the domestic market at the same level as CMI.
4.264 Indonesia also objects to the KTC’s failure to make an adjustment to account for the
involvement of CMI in domestic sales. Although Indonesia concedes that the domestic sales by CMI
were at the same level of trade as the export sales by the mills, it claims that CMI’s involvement
nevertheless required an adjustment for “other diffe rences ... affect[ing] price comparability.” Again,
this argument is based entirely on unsupported assump tions. Indonesia has not demonstrated that the
activities performed by CMI on domestic sales were not performed by the mills themselves on export
sales. Thus, no adjustment was warranted.
2. Injury determination issues
(a) Like product
4.265 Indonesia argues that Korea was under an obligation to define the “product under
consideration” in a reasonable manner. Ho wever, the definition of the “production under
consideration” has not been challenged by Indonesi a in this proceeding. Instead, Indonesia has
accepted the KTC’s definition of the “product under consideration.” Indonesia’s argument has been
that, given this definition, the KTC was required to find that there were two distinct “like products”
for this one “product under consideration.”
4.266 There is nothing in Article 2.6 that requires that result. Instead, Article 2.6 states that the
“like product” is to flow directly from the defi nition of the product under consideration. Having
accepted the KTC’s definition of the “product un der consideration,” Indonesia has no grounds to
object to the “like product” definition that flowed directly from it.
4.267 Indonesia’s factual claims are also unpersuasi ve. The Sinar Mas Group never presented any
evidence to the KTC establishing that there were differences between plai n-paper-copier paper and
other wood-free paper. And, in fact, the informa tion submitted to the Panel by Indonesia shows that
there were substantial overlaps in those products.
(b) Trends in the volume of dumped imports
4.268 Indonesia’s arguments have focused on statistic s that apparently show a 15.3 per cent
decrease in the volume of dumped imports in the first ha lf of 2003. But, a closer review reveals that
this apparent “decrease” did not actually reflect a fa ll in imports. The annual rate of imports on 2003
was actually higher than the annual rate of imports in any previous year.
4.269 Indonesia also claims that the KTC miscalculated the market share figures, by excluding the
domestic production by Korean producers who were not included in the domestic industry. Indonesia
argues that, if one adjusts for these excluded produ cers, one can calculate that the dumped imports
actually lost market share in the first half of 2003. But, the figures In donesia has used in its
recalculation of domestic consumption for the first ha lf of 2003 are wrong. When the correct figures
are used, Indonesia’s recalculation actually shows that the market share held by the dumped imports

increased by almost [[**]] full percentage points from [[**]] per cent in 2002 to [[**]]
65 per cent in
the first half of 2003.
(c) Price effects of the dumped imports
4.270 Indonesia argues that the KTC’s findings are in sufficient, because the KTC did not use the
word “significant” in describing these price effects. But, the failure of the KTC to utter that “magic
word” cannot be dispositive. Instead, the real question before the Panel is whether the KTC’s analysis
was substantively correct.
4.271 In this case, the KTC found that the Korean industry’s prices had fallen by [[**]] 66 per cent
from 2000 to the first half of 2003, due to the impact of the dumped imports. It also found that the
Korean industry’s prices were [[**]]
67 per cent below what would have been needed to return a
reasonable level of profit. Such price depression and suppression is plainly “significant,” under any
definition of that term.
(d) Consideration of injury factors
4.272 Indonesia also claims that the KTC failed “to properly consider all injury factors” described
in Article 3.4 of the Agreement. However, Indonesi a has not identified a single relevant factor that
the KTC ignored. To the contra ry, Indonesia concedes that the KT C actually did examine all of the
factors identified in Article 3.4. A review of th e data analyzed by the KTC indicates that the trends
for every single injury factor were adverse for the domestic industry.
4.273 As required by the Agreement, the KTC also considered whether the injury the domestic
industry had experienced might have been caused by other factors. The KTC’s staff collected detailed
information on possible alternative causes of injury . The KTC’s conclusion that these factors did not
explain the injury to the domestic industry was entirely consistent with that evidence.
(e) Consideration of imports by Korean producers
4.274 Indonesia continues to assert that the KTC s hould have excluded imports by the “Korean
industry” from its analysis. However, the “Korean industry,” as defined by the KTC, did not include
the producers that imported the subject merchandise.
4.275 The Agreement required the KTC to consider the impact of “dumped imports” on the
“domestic industry.” Indonesia has not identified an y provision of the Agreement that would allow,
let alone require, the KTC to treat the imports by Korean producers who were excluded from the
“domestic industry” as anything other than “d umped imports.” The only provision concerning
imports by a domestic producer is Article 4.1 — and there is no claim that the KTC failed to comply
with the provisions of Article 4.1. Consequently, Indonesia’s claims must be dismissed.
V. ARGUMENTS OF THE THIRD PARTIES
5.1 The arguments of the third parties, Canada, Ch ina, the European Communities, Japan and the
United States are set out in their written submissi ons and oral statements to the Panel and are
summarised in this section.

65 Korea requests that the data in square brackets be treated as confidential.
66 Korea requests that the data in square brackets be treated as confidential.
67 Ibid.

A. THIRD PARTY WRITTEN SUBMISSION OF CANADA
5.2 The following summarizes Canada's arguments in its third party written submission.
5.3 This dispute concerns Indonesia’s challenge to various aspects of an anti-dumping measure
imposed by Korea on imports of plain paper copi er and woodfree printing paper under the Agreement
and Article VI of the GATT.
5.4 Canada has a substantial interest in this matter, particularly with respect to Indonesia’s claim
that Korea improperly defined “like product” u nder Article 2.6 of the Agreement. Canada is
concerned with the proper legal interpretation of the definitions for “like product” and “product under
consideration” found in this provision.
5.5 An investigating authority must determine th e “product under consideration” in a specific
investigation. However, in order to comply with WTO obligations, an investigating authority must
act in accordance with Article 2.6 of the Agreement in making a determination.
5.6 In accordance with Article 17.6(ii) of the Agreem ent, a panel has a duty to determine whether
an investigating authority’s determination of what constitutes the “like product” and “product under
consideration” in a specific investigation rests on a permissible interpretation of Article 2.6 of the
Agreement.
5.7 The term “like product” appears in the Ag reement in two main contexts: (1) the
determination of dumping; and (2) th e determination of injury. In the context of the determination of
dumping, the term “like product” refers to the product sold in the home market of the exporting
country that forms the basis for the calculation of the normal value. In the context of the
determination of injury, the term “like product” refers to the product produced by the domestic
industry that allegedly suffers injury.
5.8 Article 2.6 defines the term “like product” in relati on to the “product under consideration”.
The “product under consideration” refers to the alle gedly dumped product that is the subject of the
investigation. The term “like product” must be interpreted in accordance with this definition
wherever it appears in the Agreem ent. All of the words in Article 2.6, including the words “product
under consideration”, must be given meaning.
5.9 A “like product” is a product that has a comm on set of “characteristic s” with the “product
under consideration”. Accordingly, a reasonable in terpretation of the words in Article 2.6 would
suggest that an investigating authority must identify the “characteristics” of the “product under
consideration”.
5.10 An investigating authority must also divide th e “product under consideration” into cohesive
groupings of products that share common characteristics ( i.e., the investigating authority must
determine whether there is one or more “p roduct under consideration”) and make separate
determinations of dumping and injury with respect to each “product under consideration”. Each such
determination will necessarily require the identif ication of a corresponding “like product” to the
“product under consideration”.
5.11 To find that the “product under consideration” can include a group of products that do not
share common characteristics would lead to absurd results. An investigating authority could capture
non-injurious dumping by creating an overly broad definition of “product under consideration”.

B.
THIRD PARTY ORAL STATEMENT OF CANADA
5.12 Canada has indicated in a letter to the Panel da ted 25 January 2005, that it will not make an
oral statement at the third party session.
C. THIRD PARTY WRITTEN SUBMISSION OF CHINA
5.13 The following summarizes China's arguments in its third party written submission.
1. Introduction
5.14 The People’s Republic of China (“China”) wishes to comment on the following issues:
• Issue 1: Necessary Information in the Context of the Application of “Facts Available”

• Issue 2 : Whether the Obligation of the Inves tigating Authorities under Paragraph 7 of
Annex II Can Be Released by Compliance of th e Investigating Authorities with Article 5.3
before the Initiation of the Investigation

• Issue 3: The “Collapsing” of Affiliated Respondents

2. Arguments
(a) Issue 1: necessary information in the context of the application of “facts available”
5.15 In the alleged antidumping investigation, the KTC determined that since Pindo Deli and Indah
Kiat, the two respondents to the alleged investig ation, failed to “submit data such as financial
statements and account documents” of CMI, deemed by the KTC as an affiliate to Pindo Deli and
Inda Kiat, the individual normal value of each of them was calculated based on facts available.
5.16 China understands that Article 6.8 of the Agreemen t, in essence is a sort of “trigger term” for
the adoption of “facts available”, exhaustively provides for the circumstances under which the
investigating authorities can resort to facts availa ble. China will hereby limit its comment only to the
circumstance involving “necessary information” provi ded in Article 6.8 of the Agreement which is
the main focus of the alleged dispute described above.
5.17 China notes that there are no provisions in th e Agreement expressly defining the “necessary
information” referred to in Article 6.8 of the Agre ement and therefore believes that the investigating
authorities shall have the discretion to determin e what information is necessary for a specific
investigation. However, such discretion is subject to certain limitations and procedural requirements
provided for in the Agreement. These limitations ar e that (1) the investigating authority shall not
request irrelevant information; (2) the investigati ng authority shall not request the information that
creates the extra burden for the interested parti es; and (3) when demanding necessary information, the
investigation authorities are also required to act in a reasonable, objective and impartial manner. The
procedural requirements are (1) the investigating au thorities shall determine what exact information is
necessary for the specific investigation and give any interested party qualified instructions which are
sufficient for the interested party to understand what and to what extent it shall provide as the
necessary information demanded by the investigating authorities; and (2) the investigating authorities
shall not disregard the information provided by the interested party even if it is not ideal in all respects
as long as the interested party has acted to the best of its ability.
5.18 China agrees that in the ev ent that some of the require d information necessary for the
investigation has not been submitted or, althoug h provided, has been otherwise rejected, the
investigating authorities shall not therefore reject the entire information provided regardless of the

accuracy of that information. The investigating au thorities shall determine on the basis of the specific
facts and circumstances of the investigation at hand as to whether the fact that some information not
properly submitted or is rejected otherwise has c onsequences for the remainder of the information
submitted and therefore facts available can be resorted to.
(b) Issue 2: whether the obligation of the investig ating authorities under paragraph 7 of Annex II
can be released by compliance of the investig ating authorities with Article 5.3 before the
initiation of the investigation
5.19 Indonesia claimed that, in the alleged antidumpi ng investigation, the KTC failed to check the
information from the applicants on which it relied against the information obtained from other sources
during the course of the investigation as required und er Paragraph 7 of Annex II of the Agreement.
Korea contended that as part of the initiation process, the KTC had examined the information
contained in the application and found that it was acc urate and adequate as required by Article 5.3 of
the Agreement and therefore Indonesia should not cha llenge the investigating authorities’ reliance on
that information as “facts available”.
5.20 China notes that the dispute in this regard mainly lies in the point that whether the
investigating authorities’ implementation of the obligations under Article 5.3 of the Agreement at the
initiation stage will necessarily release their oblig ations under Paragraph 7 of Annex II of the
Agreement when using the information in the app lication to determine the dumping margin in the
later part of the investigation.
5.21 From the plain language of Article 5.3 of the Agreement, it is clear that the obligations
required thereunder for the investigating authorities to examine the application information are right at
the initiation stage before the investigation really starts. The purpose of such examination is none
other than determining whether evidence in the appli cation is sufficient to justify the initiation of an
investigation. However, the obligations required u nder Paragraph 7 of Annex II for the investigating
authorities to use special circumspection are in the la ter part of an initiated investigation, the purpose
of which is to reach findings and justify the determination of dumping margin.
5.22 By comparing the different scenarios implied respectively in Article 5.3 and Paragraph 7 of
Annex II, it is noteworthy that, due to the lapse of time, it is undoubted that there will definitely come
out more “new” information, i.e. information provi ded by respondents, which is available for the
investigating authorities to use fo r the investigation after the initiation. It is possible that the
information contained in the application which was previously determined to be “accurate and
adequate” to justify the initiation of the investiga tion might be found inaccurate or inadequate in the
later part of investigation based on those “new” information duly come out under the Agreement. If
the investigating authorities are permitted to refu se the implementation of their obligations under
Paragraph 7 of Annex II with the sole excuse th at they have implemented the obligations under
Article 5.3 of the Agreement, the opportunity for th e interested parties to defend their interests as
secured by Article 6.2 of the Agreement will definitely be deprived of. Therefore, China concludes
that the investigating authorities’ implementati on of the obligations under Article 5.3 of the
Agreement at the initiation stage will not necessarily release their obligations under Paragraph 7 of
Annex II of the Agreement when using the informat ion in the application to determine the dumping
margin in the later part of the investigation.
(c) Issue 3: The “collapsing” of affiliated respondents
5.23 In the alleged antidumping investigation, the KTC treated, or “collapsed” in another word, the
Sinar Mas Group companies (Indah Kiat, Pindo Deli and Tjiwi Kimia) as a single entity for purposes
of calculating the final dumping margin, which was cl aimed by Indonesia to be inconsistent with
Article 6.10 of the Agreement.

5.24 Korea contended that Article 6.10 of the Agreement does not necessarily require the
calculation of a separate dumping margin for each co rporation that exported the subject merchandise
for the simple reason that Article 6.10 of the Agreement does not speak in terms of corporations.
Since terms “exporters” or “producers” are not explicitly defined by the Agreement, the investigating
authorities are consequently permitted to interpre t the term “exporter” under Article 6.10 of the
Agreement in a functional manner in order to pe rmit separate corporate entities that function as a
single economic unit to be considered as a single “exporter”.
5.25 However, as China perceives, the assertion that there is no language of definition in the
Agreement does not self justify Korea’s implication that the Agreement strictly treat “exporter” or
“producer” and “corporation” as two separate term s. Korea’s interpretation of “producer” and
“corporation” in a so-called functional manner is neither authorized nor justified.
5.26 In China’s view, there is no reason to believe that the Agreement absolutely excludes and
prohibits the “collapsing” of affiliated respondents in any situations. Considering it is a spirit of the
Agreement to conduct a “fair comparison” betw een the export price and the normal value when
determining dumping margins, if the existence of affiliation to any extent damages the “fair
comparison”, the investigating authorities shall be permitted to collapse such affiliation. In addition, a
reference of this Article 9.5 of the Agreement can al so imply, to some extent, in the whole context of
the Agreement that the Agreement actually does not exclude the consideration of collapsing affiliated
parties when determining dumping margins. Theref ore, the investigating authorities shall have
discretion as to collapse affiliated responding corporations and determine a single dumping margin for
them.
D.
THIRD PARTY ORAL STATEMENT OF CHINA
5.27 The following summarizes China's arguments in its third party oral statement.
5.28 China believes that this dispute raises a numbe r of important questions in respect of the
interpretation of the Agreement . China wishes to comment on the following issues which China
believes to be important.
(a) Issue 1: Necessary information in the context of the application of “facts available”
5.29 In the alleged antidumping investigation, the KTC determined that since the two respondents
to the alleged investigation, namely “Pindo Deli” and “Indah Kiat”, failed to “submit data such as
financial statements and account documents” of CMI, which was deemed by the KTC as an affiliate
of the two respondents, the individual normal value of each of them was calculated therefore based on
facts available.
5.30 China understands that Article 6.8 of the Agreemen t in essence is a sort of “trigger term” for
the adoption of “facts available”, exhaustivel y provides the circumstances under which the
investigating authorities can resort to facts availa ble. China will hereby limit its comment only to the
circumstance involving “necessary information” provi ded in Article 6.8 of the Agreement which is
the main focus of the alleged dispute described above.
5.31 China notes that there are no provisions in th e Agreement expressly defining the “necessary
information” referred to in Article 6.8 of the Agre ement and therefore believes that the investigating
authorities shall have the discretion to determin e what information is necessary for a specific
investigation. However, such discretion is subject to certain limitations and procedural requirements
provided in the Agreement. These limitations are that (1) the investigating authority shall not request
irrelevant information; (2) the investigating author ity shall not request the information that creates the
extra burden for the interested parties; a nd (3) when demanding necessary information, the
investigation authorities are also required to act in a reasonable, objective and impartial manner. The

procedural requirements are (1) the investigating au thorities shall determine what exact information is
necessary for the specific investigation and give any interested party qualified instructions which are
sufficient for the interested party to understand what and to what extent it shall provide as the
necessary information demanded by the investigating authorities; and (2) the investigating authorities
shall not disregard the information provided by the interested party even if it is not ideal in all respects
as long as the interested party has acted to the best of its ability.
5.32 China agrees that in the ev ent that some of the require d information necessary for the
investigation has not been submitted or, althoug h provided, has been otherwise rejected, the
investigating authorities shall not therefore reject the entire information provided regardless of the
accuracy of that information. The investigating au thorities shall determine on the basis of the specific
facts and circumstances of the investigation at hand as to whether the fact that some information not
properly submitted or is rejected otherwise has c onsequences for the remainder of the information
submitted and therefore facts available can be resorted to.
(b) Issue 2: Whether the obligation of the investigating authorities under paragraph 7 of Annex II
can be released by compliance of the investig ating authorities with Article 5.3 before the
initiation of the investigation
5.33 Indonesia claimed that, in the alleged antidumpi ng investigation, the KTC failed to check the
information from the applicants on which it relied against the information obtained from other sources
during the course of the investigation as required und er Paragraph 7 of Annex II of the Agreement.
Korea contended that as part of the initiation process, the KTC had examined the information
contained in the application and found that it was acc urate and adequate as required by Article 5.3 of
the Agreement and therefore Indonesia should not cha llenge the investigating authorities’ reliance on
that information as “facts available”.
5.34 China notes that the dispute in this regard mainly lies in the point that whether the
investigating authorities’ implementation of the obligations under Article 5.3 of the Agreement at the
initiation stage will necessarily release their oblig ations under Paragraph 7 of Annex II of the
Agreement when using the information in the app lication to determine the dumping margin in the
later part of the investigation.
5.35 From the plain language of Article 5.3 of the Agreement, it is clear that the obligations
required there-under for the investigating authorities to examine the application information are right
at the initiation stage before the investigation real ly starts. The purpose of such examination is none
other than determining whether evidence in the appli cation is sufficient to justify the initiation of an
investigation. However, the obligations required u nder Paragraph 7 of Annex II for the investigating
authorities to use special circumspection are in the la ter part of an initiated investigation, the purpose
of which is to reach findings and justify determination.
5.36 By comparing the different scenarios implied respectively in Article 5.3 and Paragraph 7 of
Annex II, it is noteworthy that, due to the lapse of time, it is undoubted that there will definitely come
out more “new” information, i.e. information provi ded by respondents, which is available for the
investigating authorities to use for the investigati on after the initiation. If the investigating authorities
are permitted to refuse to implement their obligati ons under Paragraph 7 of Annex II with the sole
excuse that they have implemented the obliga tions under Article 5.3 of the Agreement, the
opportunity for the interested parties to defend their interests as secured by Article 6.2 of the
Agreement will definitely be deprived of. Therefore, China concludes that the investigating
authorities’ implementation of the obligations unde r Article 5.3 of the Agreement at the initiation
stage will not necessarily release th eir obligations under Paragraph 7 of Annex II of the Agreement
when using the information in the application to de termine the dumping margin in the later part of the
investigation.

(c) Issue 3: The “collapsing” of affiliated respondents
5.37 In the alleged antidumping investigation, the KTC treated, or “collapsed” in another word, the
three respondents as a single entity for purposes of calculating the final dumping margin, which was
claimed by Indonesia to be inconsistent with Article 6.10 of the Agreement.
5.38 In China’s view, there is no reason to believe that the Agreement absolutely excludes and
prohibits the “collapsing” of affiliated respondents in any situations. Considering it is a spirit of the
Agreement to conduct a “fair comparison” betw een the export price and the normal value when
determining dumping margins, if the existence of affiliation to any extent damages the “fair
comparison”, the investigating authorities shall be permitted to collapse such affiliation. In addition, a
reference of this Article 9.5 of the Agreement can al so imply, to some extent, in the whole context of
the Agreement that the Agreement actually does not exclude the consideration of collapsing affiliated
parties when determining dumping margins. Theref ore, the investigating authorities shall have
discretion as to collapse affiliated responding corporations and determine a single dumping margin for
them.
E.
THIRD PARTY WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES
5.39 The following summarizes the European Comm unities arguments in its third party written
submission.
1. The interpretation of “each known exporter” under Article 6.10 of the Agreement
5.40 As regards the text of Article 6.10 of the Agreement, the term “each known exporter or
producer” is not directly defined. It accordingly bear s an autonomous meaning, and there is a certain
margin for the investigating authorities to interpret this term. The EC notes that the term “exporter” is
different from the term “corporation”. It agrees with Korea that the corporate law of Indonesia cannot
determine the matter. Rather, the text of the Agreem ent allows an investigating authority to consider
separate corporate entities that are related as constituting one single “exporter”. The EC also observers
that Article 6.10 of the Agreement uses the alternative “exporter or producer”, and thus leaves a
certain flexibility to the investigating authority to take due account of the economic circumstances of
a given case, when deciding on whom to impose the anti-dumping duty.
5.41 Seen in its context, Article 6.10 of the Agreem ent first sentence establis hes, “as a rule”, the
duty to determine individual margins of dum ping for each known exporter. The second sentence
provides for the exception, namely that under certain conditions sampling is allowed. The Indonesian
conclusion in the present case that the second sente nce provides for the “only one circumstance where
a departure from determining individual margins is a llowed” is, however, flawed. It is based on the
assumption that “each known producer” refers to each single legal entity and deduces from this that
not granting an individual rate to each single legal entity is in breach of Article 6.10 of the
Agreement, first sentence, unless the conditions under the second sentence of that provision are met.
5.42 However, the present debate is not about th e relationship between the first and second
sentences of Article 6.10 of the Agreement, but about the interpretation of the notion “exporter”
within the meaning of the first sentence. In short, the argument derived by Indonesia out of the second
sentence of Article 6.10 of the Agreement is based on what it is supposed to demonstrate, and is thus
without merit. Treating related companies as one “exporter” does not deprive the provisions
concerning “sampling” under the second sentence of their effect.
5.43 The same is true for the comparison between Ar ticle 6.10 of the Agreement and Article 4.1
(i), footnote 11 and Article 2.3 of the Agreement. Indonesia seems to advance an a contrario
argument based on the fact that there is no co rresponding provision on economic affiliations for
exporters under Article 6.10 of the Agreement. In the view of the EC, it would, however, be equally

possible to come to the opposite conclusion: because Ar ticle 4.1 (i), footnote 11 and Article 2.3 of the
Agreement take account of economic affiliations other provisions of the Agreement may be
interpreted in line with their economic rationale as well.
5.44 Rather than the provisions just cited, Article 9.5 of the Agreement may be more relevant
context. Under this provision, an investigating authority shall promptly carry out a review for the
purpose of determining individual margins of dumping for any exporters or producers in the exporting
country in question who have not exported the pr oduct to the importing Member during the period of
investigation, “provided that these exporters or producers can show that they are not related to any of
the exporters or producers in the exporting country w ho are subject to the anti-dumping duties on the
product”. If the relationship between exporters and producers is decisive for the revision of individual
margins of dumping, the same relationship may also be considered in the initial determination.
5.45 In accordance with Art. 31 (1) third head of the Vienna Convention, Article 6.10 of the
Agreement shall also be interpreted in the light of its object and purpose. In the EC’s view, the
investigating authorities should determine an indivi dual dumping margin for an exporter or producer
that reflects its real economic struct ure, duly delineated in legal terms. If companies are related, this
relationship would give them a possibility to channe l exports through an affiliate with the lowest
dumping margin, thus rendering the anti-dumping meas ures ineffective. In short: the object and
purpose of the provision is to allow fair treatment of the exporter or producer by the investigating
authority, and to ensure the e ffectiveness of the anti-dumping meas ures by preventing possibilities of
manipulation by the exporter or producer.
5.46 It follows that a determination of individual dumping margins for each legal entity regardless
of whether they are economically related to each othe r would be contrary to the object and purpose of
Article 6.10 of the Agreement. Rather, the inves tigating authorities should be allowed to determine
one dumping margin for related companies as a whole.
5.47 Such interpretation reflects the subsequent practice of the Community institutions. The
European Commission and the Council of the European Union have consistently held with respect to
related companies that calculating individua l dumping margins would create the likelihood of
manipulation of anti-dumping measur es (thus rendering them ineffec tive) by enabling the related
producers to channel their exports to the Community through the affiliate with the lowest dumping
margin. In EC practice, related companies would no rmally be treated together where they belong to
the same group, or share directors and facilities, or have other significant financial or economic links.
In conclusion, the EC submits that a group that is composed of several legal entities which are related
may be treated as one “exporter or producer” in the sense of Article 6.10 of the Agreement.
2. The use of “facts available” under Article 6.8 of the Agreement in conjunction with
Annex II of the Agreement
5.48 The EC submits that the division of the “facts available” issue into two claims is questionable.
As has been explained in Section II of this writte n submission, an investigating authority is entitled
under the Agreement to treat separate legal corpora tions as one “exporter or producer”, provided that
they are related. It follows that they, as a whole, bear the rights and obligations vis-à-vis the
investigating authority during the anti-dumping pr ocedure. Therefore, either cooperation or non-
cooperation by any part of it may be attributed to the group as a whole. Accordingly, an investigating
authority may use “facts available” with regard to an exporter if one of its le gal corporations has not
cooperated and thereby prevented an investigating authority from obtaining or verifying the necessary
information relating to the determination of dumping.
5.49 For these reasons the EC believes that the first and second claim should be dealt with
together. The question before the Panel is ther efore whether the KTC did properly apply “facts
available” for the exporter, i.e. the Group composed of Indah Kiat/Pindo Deli/Tjiwi Kiwi.

5.50 The EC emphasizes that a fair balance must be struck between the interests of an investigating
authority to conduct its investigation expeditiously, and the interests of an exporter to be heard.
5.51 First, it goes without saying that submission of evidence within a deadline set by the
investigating authority should be considered as ti mely. As the setting of deadlines creates important
legitimate expectations on the side of exporters , the investigating authority bears a certain
responsibility to ensure that, when deadlines are set, with legal conse quences if they are missed, they
are clearly denoted as such. The EC submits that the legal consequences for any ambiguity whether a
deadline has been set or revised should be borne by the investigating authority.
5.52 Second, the categorical approach under Kor ean law not to accept any new evidence after
closure of the verification period does not seem to be in line with the above stated duty of an
investigating authority to take into account all rele vant factors when determining that a document was
produced in good time or not. Hence, a practice that shuts off any evidence produced by an exporter
after the verification, may well be in breach of Ar ticle 6.8 of the Agreem ent in conjunction with
paragraph 3 of Annex II of the Agreement. The KTC must show in the case at hand, why reliance on a
document submitted after the closure of the verifi cation would compromise its ability to conduct the
investigation expeditiously.
5.53 Third, the Indonesian argument that the two le gal entities had difficulties to obtain relevant
information from CMI, is without merit since such difficulties arose in the sphere of responsibility of
the Sinar Mas Group and would therefore have to be a ttributed to the exporter, in line with the EC's
general observation that the use of facts available should target the related companies as a whole.
5.54 Fourth, both sides point out that the exporter’s right to be heard concerns “all information
which is verifiable” (paragraph 3 of Annex II of th e Agreement, first sentence). Indonesia finds that
the document of 9 April 2003 was a “verifiable” CMI financial statement, whereas Korea denies this
since the papers were not “self-verifying”.
5.55 Again, without attempting to reach a conclusion on the factual aspects of the issue, the EC
submits that the question should not be dealt with in isolation. Rather, verifiability is one of the
factors that allow an investigating authority to reject submitted evidence as untimely. Accordingly, a
statement may be “verifiable” in abstract terms: but if it is submitted only after a verification mission
has already taken place, its actual verification would necessitate a second mission. That costs time and
money and is not required by the Agreement. In such a case, the investigating authorities may
consider this as an important factor in their overall consideration of whether to reject such a document
as untimely or not.
3. The termination of an investigation under Article 5.8 of the Agreement
5.56 The European Communities agrees with Korea that Article 5.8 refers to termination of an
investigation on a country-wide basis. Article 2 of the Agreement defines dumping. Article 2.1 of the
Agreement refers to the word “country” 3 times – and specifically to the product exported “from one
country to another”. The word “country” is used a fu rther 5 times in Article 2.2 and footnote 2 of the
Agreement. These provisions reflect the language of Article VI of the GATT, which also repeatedly
refers to imports from one country to another. They indicate that the concept of dumping involves a
strong connotation of a country-wide assessment, which may be reflected in the scope of the
investigation. Thus, absent particular provisions requiring a company specific approach, a country-
wide approach will generally be permissible.
5.57 Article 5.2(ii) of the Agreement requires the provision of the “names of the country or
countries of origin or export in question”. This is the primary obligation, in the sense that it is
mentioned first in this provision, and is not qualified in any way – a complainant cannot state that it
does not know the country or countries of origin. Th ere is a secondary obligation – to describe known

exporters or producers and impor ters. This obligation is, howeve r, subject to the important
qualification of the word “known” – if the names of the exporters or producers are not known, they do
not need to be indicated in the complaint. It would be permissible to initiate an original investigation
even in circumstances where only the country of origin would be known – even if there were no
known exporters or producers. Thus, the country-wide na ture of the investigation is also reflected in
the complaint, right from the start.
5.58 Such an approach is confirmed by Article 12. 1.1 of the Agreement, which requires that the
public notice of the initiation of an original inves tigation states the name of the exporting country or
countries. There is no obligation to state the names of known exporters or producers.
5.59 The country-wide approach to the initiation of an original investigation is common sense. The
primary objective of an anti-dumping proceeding is to address the economic problem (injury) caused
by dumped imports from a particular source. The pr ecise identification of exporters and producers in
the exporting country is, in terms of the scope of th e investigation, incidental and may be difficult or
impossible to achieve. If the investigation were in itiated in the first place only in relation to known
exporters and producers, then each time a furt her exporter or producer became known, it would
presumably be necessary to extend the investigation. An investigating authority has no real means of
ascertaining with complete certainty the full list of exporters or producers in the exporting country,
and the Agreement imposes no obligation on an inv estigating authority to actively seek out that
information.
5.60 The first sentence of Article 5.8 of the Agreemen t refers to the rejection of an application
under paragraph 1, an application which, the European Communities has just observed, could lawfully
be country-wide only – and indeed is likely to be so. The European Commun ities thus concludes that
the first sentence of Article 5.8 of the Agreement imposes an obligation in relation to the investigation
– that is, the country-wide investigation. Members may go further, by considering such matters on a
company specific basis, but they are not obliged to do so by the terms of Article 5.8 of the Agreement.
5.61 The European Communities understands the final words “the case” in the first sentence of
Article 5.8 of the Agreement to refer to the case as reflected in the application – which may lawfully
be country-wide. Furthermore, the European Comm unities understands the words “the cases” in the
second sentence of Article 5.8 of the Agreement to ha ve the same meaning (except that the plural is
used) as the words “the case” in th e first sentence of Article 5.8 of the Agreement. The European
Communities agrees that the text might have read : “in a case”. However, the European Communities
does not attach any significance to the use of the pl ural in the second sentence of Article 5.8. It is
common when drafting an abstract and normative piece of legislation to have in mind its future
application in concrete terms to many individual cas es (plural), and that may often be reflected in the
drafting. The first sentence of Article 5.8 of the Ag reement might just as well have been drafted in the
plural. That the singular was used, presumably fo r reasons of grammar or style, is without
significance.
5.62 The European Communities would find it unpersuasi ve to suggest that by using the plural
“the cases” the drafters intended to refer to sever al company specific cases or investigations, as
opposed to “the case” referred to in the first sentence of Article 5.8 of the Agreement – that being a
country-wide case. It seems to the European Communiti es that had the drafters wished to write such a
distinction into this provision, they would have done so more clearly – choosing, for example, a
different abstract noun, rather than relying on an over-subtle distinction between the singular and the
plural.
5.63 The European Communities finds further support for this view in the fact that the
French language version of the first sentence of Ar ticle 5.8 of the Agreement does not use the word
“cas”. That strongly militates in favour of rejecting the notion that the drafters intended to build on a

distinction between the singular and the plural – had they so intended they would surely have ensured
that the text had the same meaning in all the language versions.
5.64 Finally, the European Communities would observe that the second sentence of Article 5.8 of
the Agreement refers both to de minimis dumping margins and to a negligible volume of imports.
Both of these are linked to the words “in cases where”. The import threshold factor is clearly country-
wide, as reflected, for example, in the fourth senten ce of Article 5.8 of the Agreement. It follows that
the words “in cases where” cannot, in themselves, l ead to the conclusion that the investigating
authority must conduct a company specific assessment.
5.65 Accordingly, the KTC’s decision to conti nue the investigation after the preliminary de
minimis determination vis-à-vis Indah Kiat was consistent with Artic le 5.8. of the Agreement. Only if
the KTC had found in its final
 determination that the country-wide dumping margin was below the
de minimis threshold – which it did not – would it have been obliged to immediately terminate its
investigation as regards Indonesia.
F. THIRD PARTY ORAL STATEMENT OF THE EUROPEAN COMMUNITIES
5.66 The following summarizes the European Communities arguments in its third party oral
statement.
1. Introduction
5.67 In its written submission, the European Commun ities invited the Panel to conclude on four
points of law:
− Article 6.10 of the Agreement allows an inves tigating authority to determine an individual
margin for an exporter or producer that may be composed of separate corporations that are
related;
− Article 6.8 of the Agreement in conjunction w ith Annex II allows applying “facts available”
to such related companies;
− Article 6.8 of the Agreement in conjunction with paragraph 3 of Annex II is only violated if
the investigating authority rejected submitted evidence without having struck a fair balance
between its own interests to conduct an inves tigation expeditiously and the interests of the
exporter to be heard, taking into account, inter alia, whether the need for a second verification
of a document submitted after the closure of a first verification would lead to undue
prolongation of the investigation or indeed whether any such second verification would be
feasible at all;
− Article 5.8 of the Agreement does not require th e termination of a proceeding in respect of
companies found to have a de minimis dumping margin.

5.68 In this third party session, the European Communities has not developed these arguments
further. The European Communities trusts that the Panel has taken due note of the
European Communities' views. Instead, the European Communities concentrates on another issue that
is of equally systematic importance for the inte rpretation of the Agreement and that has been
addressed by other third parties in their written submissions: the definition of the product under
consideration.

2. The definition of the “product under consideration”
5.69 At the outset, the EC notes the Panel’s obser vation in US – Softwood Lumber that the
Agreement does not give guidance on the way in wh ich the “product under consideration” shall be
determined68.
5.70 Indeed, Article 2.6 of the Agreement only defines the term “like product”. That term refers to
two different products: in the context of the de termination of dumping the “like product” is the
product sold in the home market of the exporting c ountry; in the context of the determination of
injury, the same term refers to the relevant product of the allegedly injured domestic industry.
5.71 In contrast, the Agreement does not contain a similar definition for the “product under
consideration”. Rather, it presupposes that the inv estigating authority selects the product forming the
subject of its investigation. Nevertheless, the discretion of the authority to select products for
investigation purposes is not unfettered under the Agreement.
5.72 Article 2.6 of the Agreement contains a reference to “ the product under consideration ”
(emphasis added). Comparably, Article 2.1 of the Agreement speaks of “ a product” (emphasis added)
that is to be considered as dumped under certain conditions. The two provisions just quoted do not
employ the plural “products”. The European Communities believes that this wording may offer some
guidance to the investigation authorities not to “ bundle” clearly distinct and separate products into
“one product under consideration”.
5.73 The European Communities’ view can perhaps be best illustrated by examples. Paper can be
produced in many different sizes, types and qualities and these may be continuously variable. Whilst
there must be some limits on how widely the scope of the subject product can be defined, paper can
probably be considered a single product. Acco rdingly, one anti-dumping investigation may be
conducted to establish whether exports of all typ es of paper from a given country are dumped when
compared with the prices at which an identical (or, in the absence of an identical range, a “like”)
range of product types is sold on the market of the exporting country and whether this causes material
injury to the producers of the same (or “like”) range of product types in the importing county.
Similarly, whilst there must be some limits on how narrowly the subject product can be defined, it is
probably also possible to conduct an anti-dumping i nvestigation into exports of a more narrowly
defined product, provided it can be distinguished from other product types in the continuum. This
needs to be examined on a case-by-case basis.
5.74 What is not admissible in the view of the Eu ropean Communities is to select two products out
of a product type range and to “bundle” them togeth er to the exclusion of the other products in the
same range. To take an easy example, it is inad missible to bundle together apples and oranges as a
single “product under consideration”. These would constitute two products a nd “bundling” one with
the other could allow an anti- dumping duty to be imposed on a non-dumped product (e.g. apples)
when another product is dumped (e.g. oranges).
5.75 Indonesia considers that plain paper copier (“PPC”) and uncoated wood-free printing paper
(“WF”) should have been consider ed as separate produc ts under consideration since they differ in
physical characteristics, end-uses, market sectors, HTS classification and manufacturing processes 69.
Korea asserts that the two categories of paper differ onl y in form (sheet or roll), or for sheets, in size.
Furthermore, it was impossible to tell at the time a roll is produced whether it will be destined for the
PPC market or the WF market70.

68 See Panel Report, US – Softwood Lumber, para. 7.153.
69 First submission by the Republic of Indonesia, para. 150.
70 First submission by the Republic of Korea, paras. 162-163.

5.76 The European Communities does not wish to comment on the factual dispute between the
parties but is only concerned that the Agreement is correctly interpreted. In the European
Communities' view , the Panel should verify whether the two categories of paper (plain paper copier
and uncoated wood-free printing paper) differ only in form (sheet or roll) or size, as argued by Korea,
and constitute basically the whole continuum, or wh ether they are two separate products plucked out
of a continuum and/or improperly bundled together, as argued by Indonesia. That is a factual question
on which the European Communities does not take a position. Either appears possible.
5.77 Accordingly, it will be for the Panel to decide whether the treatment of PPC and WF by the
KTC as “one product under consideration” was compatible with Articles 2.1 and 2.6 of the Agreement
(and consequently Article 3.1 of the Agreement) . If it establishes that PPC and WF are separate
products, the KTC should also have separately considered:
(1) the effect of Indonesian PPC imports on Korean PPC producers and
(2) the effect of Indonesian WF imports on Korean WF producers to determine dumping and injury.

3. Conclusion
5.78 In sum, the European Community invites the Panel to first define the meaning of the “product
under consideration” and then review whether Korea properly applied it in the present case.
G.
THIRD PARTY WRITTEN SUBMISSION OF JAPAN
5.79 The following summarizes Japan's arguments in its third party written submission.
1. Introduction
5.80 Japan welcomes this opportunity to present its vi ews in the proceeding brought by Indonesia
over the consistency with Article VI of the GA TT, the Agreement, and the Marrakesh Agreement
establishing the World Trade Organization ("WTO Agreement") of the anti-dumping measures
imposed by Korea on imports of certain paper from Indonesia.
5.81 Japan has a systemic interest in the interpretation and application of the Agreement, the
GATT and the WTO Agreement with regard to anti- dumping investigations. As a third party, Japan
would like to address the issue of the interpreta tion and application of the terms “product under
consideration” and “like product” under Article 2.6 of the Agreement in conjunction with Articles 2.1
and 3.1 thereof.
2. Arguments
5.82 Under the Agreement, an antidumping duty inv estigation can begin only after the “product
under consideration” has been defined. The Panel in US—Softwood Lumber noted that:
As the definition of “like product” impli es a comparison with another product, it
seems clear to us that the starting point can only be the “other product”, being the
allegedly dumped product. Therefore, once the product under consideration is
defined, the “like product” to the product under consideration has to be determined
on the basis of Article 2.6.
71
5.83 As noted by the Panel in US—Softwood Lumber , the definition of the “product under
consideration” is the fundamental element in an antidumping duty investigation and is the starting

71 Panel Report, United States—Final Dumping Determination on Softwood Lumber from Canada
(“US—Softwood Lumber ”), WT/DS264/R, adopted on 31 August 2004, para. 7.153 (emphasis in original).

point for both the determination of dumping and injury under Articles 2 and 3 respectively.
Article 2.1 defines dumping under the Agreement that:
For the purpose of this Agreement, a product is to be considered as being dumped,
i.e. introduced into the commerce of anothe r country at less than its normal value, if
the export price of the product exported from one country to another is lower than the
comparable price, in the ordinary course of trade, for the like product when destined
for consumption in the exporting country. (Emphasis added.)
5.84 The Appellate Body in US – Softwood Lumber stated: “It is clear from the texts of these
provisions (Article VI:1 of the GATT and Article 2. 1 of the Agreement) that dumping is defined in
relation to a product as a whole as defined by the investigating authority.”72
5.85 The assessment of injury also begins with cons ideration of the “product under consideration.”
Article 3.1 sets forth:
A determination of injury for the 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) th e consequent impact of these imports on
domestic producers of such products. (emphasis added).
5.86 Whether an import is “dumped” is determined in accordance with Article 2.1, which, as
discussed above, requires the authorities to determine dumping with respect to the product under
consideration. In this way, the definition of the “product under consideration” is the starting point of
the injury determination.
5.87 In light of the fundamental importance of the term “product under consideration”, as
demonstrated above, particular care should be paid to ensure that the particular “product under
consideration” in an antidumping duty investigation is properly defined.
5.88 As noted in Korea’s First Written Submission, the Panel in US—Softwood Lumber offered
some clarification on the meaning of “product u nder consideration”: “in our analysis of the
AD Agreement, we could not find any guidance on the way in which the ‘product under consideration’
should be determined.”
73 Japan believes that the Panel’s analysis of “product under consideration” is
incomplete. It is true that the Agreement on its f ace offers no additional clarification or definition of
the “product under consideration.” However, since the Agreement does not provide specific
additional clarification, it is a basic tenet of treaty interpretation to interpret terms in accordance with
their ordinary meaning, as required in Article 31 of the Vienna Convention on the Law of Treaties.74
5.89 The ordinary meaning of the word “product” is “an article or substance manufactured or
refined for sale; a substance produced during a na tural, chemical, or manufacturing process; or a
result of an action or process.” 75 The ordinary meaning of the wo rd “product” therefore is a single
article or substance, as opposed to a collection of di stinct articles or substance. The interpretation of
the meaning of “product under consideration” for the purposes of the Agreement must follow this
ordinary meaning of the word “product.” It should also be noted that the Ag reement, as specifically

72 Appellate Body Report, United States—Final Dumping Determination on Softwood Lumber from
Canada, WT/DS264/AB/R, adopted on 31 August 2004, para. 93 (emphasis added).
73 Panel Report, US—Softwood Lumber , para. 7.153.
74 Paragraph 1 of Article 31 of the Vienna Convention provides “A treaty shall be interpreted in good
faith in accordance with the ordinary meaning to be given to the terms of the treaty and in the light of its object
and purpose.”
75 Concise Oxford English Dictionary, Tenth Edition, Revised, p. 1140.

set forth in Article 2.1, contemplates defining “a product” under consideration, not “products” under
consideration.
5.90 The term “product under consid eration” thus prevents an anti-dumping investigation from
capturing two separate products. While Japan h as no objection to conduct two separate anti-dumping
investigations on separate products simultaneously, Jap an believes that determination of dumping and
injury combining separate products into one “produ ct under consideration” is not permitted. When
the scope of the investigation includes two of mo re clearly distinct products, the investigating
authorities should make separate de terminations of dumping and injury for each such product. If the
authorities determine either dumping or injury co mbining two separate products, the authorities act
inconsistently with Article 2 or 3 of the Agreement, and also would act inconsistently with Article 2.6
when defining the scope of the “like product.”
5.91 In this case, Indonesia argues that “PPC” (pla in paper copier) and “WF” (woodfree printing
paper) are two distinguishable products.
76 Japan does not take any specific position on the factual
aspect of this issue. If, however, PPC and WF ar e distinct products, Korea should have separately
considered (1) the effect of Indonesian PPC impor ts on Korean PPC producers and (2) the effect of
Indonesian WF imports on Korean WF producers to determine dumping and injury. Therefore, Japan
requests that the Panel first complete the an alysis of the meaning of the “product under
consideration,” then review whether Korea properl y defined the “product under consideration” and
the “like product” in the instant dispute, and revi ew whether Korea properly made determinations of
dumping and injury for PPC and WF separately if the Panel finds that these are distinct products.
3. Conclusion
5.92 For the foregoing reasons, Japan respectfully requ ests that the Panel clarify the meaning of
“product under consideration” under the Agreement, and examine if Korea established the scope of
the product under consideration and the like product properly based on evidence in this dispute.
H. THIRD PARTY ORAL STATEMENT OF JAPAN
5.93 The following summarizes Japan's arguments in its third party oral statement.
1. Introduction
5.94 Japan would like to focus on certain argumen ts for some provisions of the Agreement
presented by parties that Japan did not address in detail in its written submission.
2. Article 6.10 of the Agreement prohibits investigating authorities from arbitrary
“collapsing”
5.95 Indonesia argues that the KTC's decision not to calculate separate dumping margins for Indah
Kiat, Pindo Deli, and Tjiwi Kimia and instead to “co llapse” these three companies into a single entity
with a dumping margin is inconsistent with Korea’s obligations under Article 6.10 of the
Agreement.77 Korea states that when legally-separat e corporations in fact operate as a single
economic entity with respect to sales of a subject merchandise, nothing in the Agreement precludes
the investigating authorities from applying a functional definition and treating them as a single
“exporter.”
5.96 On this issue, Japan would not disagree to all of Korea’s argument. It is worth arguing to
permit investigating authorities to treat certain companies as a single “exporter or producer” under

76 First Written Submission of Indonesia, paras. 142-153.
77 First Written Submission of Indonesia, paras. 120-129.

Article 6.10 of the Agreement in very rare cases. Japan, however, notes that Article 6.10 does not
permit unlimited “collapsing.” Investigating Auth orities are prohibited from treating several legal
entities as one “exporter or producer” arbitrarily.
5.97 The first sentence of Article 6.10 of the Agreement provides as follows:
The authorities shall, as a rule, determine an individual margin of dumping for each
known exporter or producer concerned of the product under investigation.(emphasis
added)
5.98 Article 6.10 thus requires investigating author ities to determine an individual margin of
dumping for “each” exporter or producer concerned as a rule. The purpose of this general obligation
on investigating authorities is not to allow th ese authorities to calculate margins of dumping
arbitrarily. Without this provision, investigating authorities could deliberately find a positive margin
of dumping for a company, applying a single margin for two or more separated entities, even though
the company was not found to be dumping standing alone.
5.99 The only permissible exception to this general obligation is for a special situation,
i.e. “sampling” in the second sentence of Article 6.10 of the Agreement, where the number of
exporters, producers, importers or ty pes of products involved is so large as to calculate an individual
margin impracticable. Article 6.10 makes the general obligation of its first sentence all the more rigid
by permitting only one exception.
5.100 If, however, it is permissible for investigati ng authorities to treat two or more separated
entities as a single “exporter or producer” under the fi rst sentence of the Arti cle 6.10 freely, that
would open up in Article 6.10 a vast loophole on this fundamental obligation of calculating an
individual margin of dumping. It would make results of this rigid obligation effectively worthless. If
so, Members could easily jump over this obligat ion, just by explaining these entities are “one
exporter” in an economical viewpoint. Accordingly, there is a certain margin or limit to treat
separated entities as a single “exporter or producer.” At least, investigating authorities are not entitled
to treat this kind of “collapsing” arbitrarily.
5.101 On this point, some of the Third Parties in this case are apparently willing to give
investigating authorities a relatively free hand for “collapsing” separated entities as a single “exporter
or producer.” For example, China insists that i nvestigating authorities shall have discretion as to
collapse affiliated responding corporations and de termine a single dumping margin.
78 The EC also
submits that a group that is composed of several legal entities which are related may be treated as one
“exporter or producer” in the sense of Article 6.10 of the Agreement. 79 In the view of Japan, these
discretions given to authorities are inappropriate.
5.102 The term “affiliated” or “related” is not used in Article 6.10 of the Agreement. The term
“related” is used in Article 4.1(i) of the Agreem ent, which permits an investigating authority to
exclude a producer from the definition of the domes tic industry because of the relationship between a
producer and an exporter or importer. The situation in Article 4.1(i) is obviously different from that
in Article 6.10. Moreover, Article 4.1(i) has a F ootnote 11 which specifies the type of relationship in
detail, while 6.10 never had such a footnote. Had the negotiators of the Agreement intended to permit
to treat “related” or “affiliated” entities as an “exporter or producer,” they would do so explicitly. But
they did not. The negotiators never had any intent to “treat Opel and Saab as a single entity simply

78 Third Party Submission of China, paras. 24.
79 Third Party Submission of the EC, para. 18.

because they are both owned by General Motors ,” as Indonesia states in its First Written
Submission.
80
5.103 On this present case, Japan does not take any specific position on the factual aspect of this
issue. Japan, however, notes that there is a certa in limit or margin to “collapsing” separated entities
into a single “exporter or producer” and investigating authorities are not entitled to treat such
“collapsing” arbitrary, even if “collapsing” is permitted in some cases.
3. Conclusion
5.104 For the foregoing reasons, Japan respectfully requests the Panel to clarify the meaning of the
first sentence of Article 6.10 of the Agreement and examine whether Korea acted inconsistently with
Article 6.10 of the Agreement or not.
I. THIRD PARTY WRITTEN SUBMISSION OF THE UNITED STATES
5.105 The following summarizes the United States' arguments in its third party written submission.
1. Article 6.10 does not require investigating authorities to determine separate dumping
margins for separate legal entities if they constitute a single “exporter” or “producer”
5.106 Indonesia argues incorrectly that Article 6.10 of the Agreement does not permit an
investigating authority to “treat distinct exporters that are separate natural or legal persons as a single
‘exporter’ for the purpose of calculating dumping margins.” 81 Where the facts demonstrate that
multiple legal entities constitute a single “exporter” or “producer,” the investigating authority may,
consistent with Article 6.10 of the Agreement, determine a single dumping margin for those entities.
5.107 The Agreement does not define either the term “exporter” or “producer.” Moreover, the
terms “exporter” and “producer” reflect commercial functions ( i.e. exporting and producing) rather
than corporate structure. Thus, the facts of a pa rticular case may support a finding that the operations
of two or more affiliated parties are so closely in tertwined that the parties effectively constitute a
single “exporter” or “producer” within the meaning of Article 6.10.
2. Article 2.2 does not limit an investigating au thority’s discretion to use constructed value
as “facts available” to determine normal value in the absence of timely-submitted,
verifiable home market sales data
5.108 Contrary to Indonesia’s arguments, Article 2.2 does not limit an investigating authority’s
discretion to use constructed value as “facts ava ilable” to determine normal value for purposes of
conducting the dumping calculation under Article 2.1 in the absence of timely-submitted, verifiable
home market sales data.
5.109 Article 6.8 expressly permits an investigating au thority to rely on “facts available” in making
a determination if a party to the proceeding does not provide necessary information within a
reasonable period or significantly impedes the inves tigation. Nothing in Articles 6.8 or 2.2 either
limits an investigating authority’s discretion in choosing from among the facts available in making its
determination or imposes conditions on the use of cer tain categories of information, such as the cost
information at issue in this dispute. Moreover, paragraph 3 of Annex II makes clear that an
investigating authority may disregard certain informa tion if it is not verifiable or not submitted in a
timely fashion.

80 First Written Submission of Indonesia, para. 122.
81 First Written Submission of Indonesia, para. 121.

5.110 There is thus no legal basis for concluding that an investigating authority’s discretion in the
selection of facts available under Article 6.8 is su bject to the obligations set out in Article 2.2
regarding the determination of normal value.
3. Article 2.4 of the Agreement requires adjust ment to price only where differences in
selling expenses affect price comparability
5.111 Indonesia claims that Korea breached its ob ligation under Article 2.4 of the Agreement by
failing to make “due allowance” for certain diffe rences in selling expenses between the Korean and
Indonesian markets. Indonesia mi sstates the obligations under Article 2.4. Contrary to Indonesia’s
arguments, Article 2.4 obligates an investigating authority to make “due allowance” only for
differences that are “demonstrated to affect price comparability.” If, as Indonesia appears to suggest,
any difference in expenses warranted an adjustment u nder Article 2.4, regardless of whether it had an
effect on price comparability, the references to “price comparability” in Article 2.4 would be rendered
meaningless.
4. Examining information in the application for initiation under Article 5.3 of the
Agreement does not necessarily satisfy the ob ligation to corroborate information from
secondary sources under paragraph 7 of Annex II
5.112 Indonesia claims in its first submission that Korea breached its obligations under paragraph 7
of Annex II of the Agreement because the Korean investigating authorities failed to corroborate
certain secondary information used as facts available. 82 Korea responds by arguing that, as part of the
initiation process, the authorities examined the info rmation in the applica tion and found it to be
accurate and adequate as required by Article 5.3 of the Agreement. 83 The United States notes, in this
regard, that the obligations under Article 5.3 and pa ragraph 7 of Annex II are distinct. The obligation
to corroborate information from secondary sources unde r Paragraph 7 of Annex II is not necessarily
satisfied by an investigating authority’s examination of the information in an application for initiation
during the initiation process. Whether the steps take n to satisfy the obligati on under Article 5.3 have
also satisfied the obligation under paragraph 7 of Annex II will depend on the facts and circumstances
of the particular case.
5. Article 5.8 of the Agreement does not require immediate termination of an investigation
upon calculation of a preliminary de minimis dumping margin for a responding party
5.113 Indonesia claims that Korea breached its ob ligations under Article 5.8 of the Agreement
because the KTC did not immediately terminate th e investigation as to an Indonesian responding
party upon calculating a preliminary de minimis dumping margin for that company. 84 Indonesia’s
argument is based on a flawed interpretation of Artic le 5.8. Under Article 5.8, the obligation to
terminate an investigation upon a finding of no or de minimis dumping applies solely with respect to
final determinations of dumping.
6. An investigating authority does not act inconsiste ntly with Article 2.6 or fail to take into
account differences in the markets for differen t products simply by defining the “like
product” to include items that are not iden tical to each of the items comprising the
product under consideration
5.114 The United States respectfully requests the Pane l, in assessing the “like product” claims of
Indonesia, to take into account the following ge neral points concerning the definition of the like
product in antidumping cases and the relationship between that definition and the injury analysis.

82 First Written Submission of Indonesia, paras. 83-88.
83 First Written Submission of Korea, para. 99.
84 First Written Submission of Indonesia, para. 130.

5.115 First, the like product analysis under Article 2.6 requires a comparison of the overall scope of
the product under consideration with the overall scope of the like product. There is no requirement
that each individual item within the like product be “like” each individual item within the imported
product subject to consideration. Further, as there are no substantive obligations other than those set
out in Article 2.6 relating to the definition of the appropriate like product in each particular
investigation, it is left to the discretion of the investigating authorities to determine which domestic
product is “alike in all respects, or . . . has char acteristics closely resembling those of the product
under consideration.”
5.116 Second, by determining that there is only one “like product” for purposes of an injury
determination, an investigating authority do es not necessarily fail to “distinguish between the
markets” for different types of the product subs umed within the single like product, as Indonesia
suggests.
85 The Agreement allows for authorities to ta ke into account differences in the markets for
different types of products within the same like product.
7. Article 3.2 of the Agreement requires that investigating authorities “consider” whether
there was significant price undercutting by subject imports
5.117 Indonesia challenges the KTC’s findings regarding the price impact of subject imports,
claiming that there was no positive evidence that would permit an investigating authority to find that
there was price undercutting by subject imports with in the meaning of Article 3.2 of the Agreement. 86
The United States agrees that each in jury determination – including the one at issue in this dispute –
must be supported by positive evidence, as required under Article 3.1. However, the United States
notes that Article 3.2 does not require the authorities to find significant volume increases, price
undercutting, and price effects as a precondition to making an affirmative injury determination.
Article 3.2 of the Agreement simply requires that the authorities consider whether there have been
significant volume increases and significant price unde rcutting, and whether subject imports have had
significant price depressing or suppressing effects.
8. Article 3.5 does not prescribe a particular methodology to be used in determining
whether dumped imports are the cause of inju ry to domestic producers or specify the
level of detail at which the analysis must be conducted
5.118 Indonesia challenges Korea’s analysis of whether dumped imports were the “cause” of injury
to the domestic producers of the lik e product, claiming that Korea did not undertake a sufficiently
detailed analysis under Article 3.5. 87 Further, Indonesia claims that Korea failed to conduct a proper
analysis of the effects of non-subject imports under Article 3.5.88
5.119 The United States notes that while Article 3.5 of the Agreement sets out several factors that
“may” be considered by investigating author ities in ascertaining whether there is a “causal
relationship” between dumped imports and injury to the domestic industry, it does not specify the type
of information that the authorities must collect and examine or the detail in which they must explain
their analysis of the information.
5.120 Article 3.5 also provides that the investigating authorities must examine any known factors
other than the dumped imports which are injuring th e domestic industry to ensure that injury caused
by these other factors is not attributed to the dumped imports. However, it does not prescribe the
particular methods and approaches to be used by investigating authorities to separate and distinguish
the injurious effects of unfair imports from the injurious effects of the other known causal factors.

85 See First Written Submission of Indonesia, para. 151.
86 First Written Submission of Indonesia, paras. 159-161, 164.
87 First Written Submission of Indonesia, paras. 180-187.
88 First Written Submission of Indonesia, para. 180.

9. The fact that some domestic producers import the subject merchandise does not
preclude an affirmative injury finding
5.121 Indonesia claims that Korea breached various provisions of the Agreement because, in
making its injury determination, the KTC failed to take into account the fact that some members of
the domestic industry were importing subject me rchandise from the countries under investigation. 89
The United States notes, in this regard, that the fact that domestic producers may be importing some
dumped merchandise does not preclude an affirmativ e injury finding. Article 4.1(i) provides
investigating authorities with the discretion to exclude from the domestic industry those domestic
producers that are importing the dumped product. However, neither Article 4.1(i), nor any other
provision of the Agreement, requires that such domestic producers be excluded from the domestic
industry in order to make an affirmative finding of injury.
10. Article 6.9 requires that interested parties be given advance notice of the facts under
consideration, not the legal reasoning of the authorities
5.122 Indonesia claims that Korea breached Article 6.9 because the KTC failed to inform the
interested parties in advance that it would dete rmine that subject imports were causing present
material injury, rather than thr eatening to cause material injury. 90 Contrary to Indonesia’s arguments,
however, Article 6.9 does not obligate the investigati ng authorities to give interested parties advanced
notice of the legal reasoning of their determination. Rather , Article 6.9 requires investigating
authorities to inform the interested parties of the “essential facts under consideration which form the
basis for the decision whether to apply definitive measures.” (Emphasis added).
J. THIRD PARTY ORAL STATEMENT OF THE UNITED STATES
5.123 The following summarizes the United States' arguments in its third party oral statement.
5.124 As the Panel will recall, the United States has al ready filed a third party submission in this
dispute. In its statement, the United States woul d like to elaborate on three issues: (i) whether an
investigating authority may find that two or more legal entities constitute a single “exporter or
producer” under Article 6.10 of the Agreement and calculate a single dumping duty for them; (ii)
whether Article 2.2 limits an investigating au thority’s discretion in selecting among the “facts
available” to use in calculating normal value when a respondent does not provide verifiable home
market sales data; and (iii) how the “like product” and “product under consideration” may be defined
for purposes of making an injury determination.
1. A single dumping margin may be calculated for two or more legal entities under
Article 6.10 if they constitute a single “exporter or producer”
5.125 Indonesia has argued in its first written submissi on that investigating authorities may not find
that separate legal entities constitute a single “exporte r” within the meaning of Article 6.10 of the
Agreement and determine a single dumping margin for the entities. According to Indonesia,
investigating authorities must consider each separate legal entity to be a separate “exporter or
producer” for purposes of calculating dumping margins. The United States disagrees.
5.126 Article 6.10 states that “authorities shall, as a rule, determine an individual margin of
dumping for each known exporter or producer concerned in the investiga tion.” The terms “exporter”
and “producer” are not defined in the Agreement. Therefore, nothing in the text of the Agreement
supports Indonesia’s argument that the term “exporter” can encompass only a single legal entity.

89 First Written Submission of Indonesia, paras. 188-195.
90 First Written Submission of Indonesia, para. 202.

5.127 Moreover, the terms “exporter” and “pr oducer” reflect commercial functions ( i.e. exporting
and producing) rather than corporate or legal stru cture. Thus, the facts of a particular case may
demonstrate that the operations of one or more separ ate legal entities are so closely intertwined that –
as a matter of commercial fact – they constitute a single “exporter” or “producer.”
5.128 Consider, for example, that XYZ corporation produces widgets in four separate factories. It
determines – for tax and other commercial reasons – that it will separately incorporate each of its
factories, which will become wholly-owned subsidia ries of XYZ corporation. Prior to the corporate
change, a single dumping margin could be calculated for the corporation and its factories. However,
after the corporate change, under Indonesia’s interp retation, an investigating authority would be
precluded from finding that the separately incorporated f actories and the parent company constitute a
single “producer or exporter” and calculating a single dumping margin for them. In the view of the
United States, such a result is not mandated under Article 6.10.
2. Article 2.2 does not limit an investigating authority’s discretion to select among the
“facts available” to calculate normal value when a respondent does not provide
verifiable home market sales data
5.129 In the investigation that is the subject of this dispute, Korean investigating authorities
calculated the normal value of sales for two Indonesi an respondents on the basis of “facts available.”
They did so because, according to the Korean authorities, the home market sales data submitted by the
respondents could not be verified. The Korean au thorities selected as the “facts available” certain
cost information, which they used to “construct” the normal value of sales. Indonesia is challenging
Korea’s actions. Indonesia argues that, under Article 2.2 of the Agreement, cost information can be
used to determine normal value only in certain limited circumstances – that is (according to
Indonesia), in circumstances where there are either no home market sales of a “like product” or the
home market sales do not provide a proper basis for comparison. Indonesia asserts that, because
Korean authorities did not make a finding that such circumstances existed, they were precluded from
determining normal value on the basis of the cost information.
5.130 In the view of the United States, Indonesia’s argument is off the mark. Article 2.2 establishes
a requirement that home market sales be used to calculate normal value where such sales are available
and provide a proper basis for comparison. Artic le 2.2 says nothing about what an investigating
authority should do when a respondent fails to co operate in an investigation and does not provide
verifiable home market sales data. That issue is governed by Article 6.8 of the Agreement.
5.131 Article 6.8 permits an investigating authorit y to rely on “facts available” in making a
determination if a party to the proceeding does no t provide necessary information within a reasonable
period or significantly impedes the investigation. Further, Paragraph 3 of Annex II recognizes that an
investigating authority may decide not to take into account information that is not verifiable. Applied
together, these provisions allow an investigating author ity to disregard home market sales data if they
are found to be unverifiable and to determine normal value on the basis of “facts available.”
5.132 Article 6.8 does not require that the limitations under Article 2.2 be observed when making a
normal value determination on the basis of “facts av ailable.” Moreover, Article 6.8 does not impose
conditions on the use of certain categories of informa tion, such as the cost information at issue in this
dispute. Thus, there is no legal basis for Indonesia’s argument that cost information cannot be used as
“facts available” to determine normal value unless an investigating authority makes the findings
outlined in Article 2.2.
5.133 Moreover, Indonesia’s argument may lead to illogi cal results. Imagine, for example, that a
respondent submits home market sales and cost da ta for purposes of calculating normal value. The
sales data is ultimately found to be inaccurate but the cost data is verified and found to be accurate.
Under Indonesia’s proposed approach, the investigati ng authority could use the cost data instead of

the flawed sales data to calculate normal value only if it found that there were no home market sales
of a like product in the ordinary course of trade. If the home market sales data on the record of the
proceeding is flawed, however, how can the inves tigating authority make such a finding without
relying on the same flawed sales data? In the view of the United States, Article 2.2 cannot be
interpreted in a way that would require such a result.
3. The definition of the domestic "like pro duct" and the "product under consideration" in
injury determinations
5.134 In its third party submission, the United States provided its views on certain issues raised in
Indonesia’s submission relating to the definition of the domestic “like product” in injury
determinations. The United States would like to submit two other observations today. First, the
United States agrees with Canada that, in defini ng the domestic product that is “like” the “product
under consideration” for purposes of an injury dete rmination, nothing in the Agreement precludes an
investigating authority from considering bot h physical characteristics – including technical
specifications and quality factors – and market characteristics.
91 In the view of the United States, the
market characteristics relevant in defining the domes tic “like product” in injury determinations might
include end uses, interchangeability, channels of distribution, and perceptions of the market
participants. Similarities in production facilities, processes, and employees may also be relevant to
this analysis.
5.135 Second, the United States agrees with Korea’s explanation in its submission that, for purposes
of the injury determination, the “like product” is defined by considering the similarity to the imported
“product under consideration.”92 The United States notes, in this regard, that a “like product” may be
similar to a “product under consideration” even if the two include items that have some different
characteristics. As the United States explained in its third party submission, the domestic “like
product” analysis requires a comparison of the overall scope of the product under consideration with
the overall scope of the like product.
VI. INTERIM REVIEW
6.1 On 24 June 2005, we submitted th e interim report to the parties. Both parties submitted
written requests for the review of precise aspects of the interim report. Parties also submitted written
comments on the other party's comments. Neither party requested an interim review meeting.
6.2 We have outlined our treatment of the parties' requests below. Where necessary, we have also
made certain technical revisions to our report.
A.
REQUEST OF INDONESIA
6.3 First, Indonesia argues that the Panel shoul d change its findings regarding the KTC's
calculation of the constructed normal values for I ndah Kiat and Pindo Deli. More specifically,
Indonesia submits that the KTC acted inconsistently with Articles 2.2, 2.2.2, 6.8 and paragraph 7 of
Annex II of the Agreement by using interest expe nses relating to a production company, [[Company
B]], for CMI which was merely a trading company.
6.4 Korea responds that financial expenses incurred by a company is independent of its size and
activities. Korea also submits that it was prope r for the KTC to use [[Company B]]'s financial
expenses for CMI because these expenses included both production and sales-related components.

91 See Third Party Submission of Canada, para. 16.
92 See Written Submission of the Republic of Korea, para. 164.

6.5 We note that in our discussion of this claim in our interim report (infra, paras. 7.99-7.105), we
addressed what we perceived to be the main argume nts developed by Indonesia in this regard. At
interim review, however, Indonesia drew our at tention to certain additional arguments ( infra,
para. 7.108) regarding the calculation of interest expenses for CMI, which we had not addressed in
our interim report. Although these arguments could, in our view, have been raised in a more coherent
manner, we nevertheless felt obliged to address th em and have accordingly revised our finding with
respect to this claim, as contained in paragraphs 7.106-7.112 below.
6.6 Second, Indonesia contends that the Panel should clarify whether or not its findings in
paragraphs 7.35 and 7.45 refer to its factual finding in paragraph 7.31 that the Sinar Mas Group failed
to allow the KTC investigators access to CMI's acc ounting records other than its financial statements
during verification. Korea submits that the Panel made the necessary findings in this regard. We note
that our findings in paragraphs 7.35 and 7.45 cited by Indonesia are clearly based on our factual
finding in paragraph 7.31 that the Sinar Mas Gr oup failed to allow the KTC investigators access to
CMI's accounting records other than its financial stat ements during verification. We therefore need
not make additional findings in this regard.
6.7 Third, Indonesia argues that the Panel failed to make a factual finding to acknowledge the fact
that Indah Kiat and Pindo Deli provided certain CMI records, including documents relating to certain
sample transactions. Citing para graph 7.31 below, Korea contends that the Panel made the necessary
finding in this regard. We modified paragra ph 7.36 of our report to emphasize the fact that
information relating to sample transactions betw een CMI and independent bu yers were submitted by
Indah Kiat and Pindo Deli.
6.8 Fourth, Indonesia contends that the Panel did not address some of Indonesia's arguments
regarding the meaning of the term "verifiable" under paragraph 3 of Annex II. Korea disagrees and
submits that the Panel properly discussed Indonesia's arguments in this regard. We note that in
paragraphs 7.59-7.67 below, we discussed Indon esia's arguments under paragraph 3 of Annex II
regarding the verifiability of the domestic sales da ta provided by Indah Kiat and Pindo Deli. We
therefore decline to make additional findings in this regard.
6.9 Fifth, Indonesia argues that the Panel should clarify its statement in paragraph 7.67 below that
a comparison of the list of sales from Indah Kiat and Pindo Deli to CMI on the one hand, and the list
of sales between CMI and independent buyers on the other could not have assured the KTC
investigators about the completeness of the domest ic sales data because this comparison would not
shed enough light on the values of the domestic sales transactions. Indonesia re-cites specific
arguments it had raised in this regard during these proceedings. Korea disagrees and submits that the
Panel has properly addressed Indonesia's arguments on th is matter. We note that in paragraphs 7.59-
7.67 below we discuss in detail the issue of whethe r the domestic sales data submitted by Indah Kiat
and Pindo Deli were verifiable within the meaning of paragraph 3 of Annex II. In our view, this
discussion addresses the relevant arguments parties raised on this issue. We therefore decline to make
additional findings in this regard.
6.10 Sixth, Indonesia seeks clarification from the Pa nel as to whether the Panel's statement in
paragraph 7.70 below that "[a]ccuracy ... goes beyo nd verifying the completeness of domestic sales
data and concerns a broader range of information, including CMI's costs associated with the sales of
the subject product and its prices" implies that the absence of CMI's cost information was relevant to
the question of the accuracy of domestic sales. Ko rea has made no specific argument in this regard.
The statement cited by Indonesia is part of our an alysis regarding the issue of whether the record
supports the proposition that the sole purpose of requesting CMI's financial statements and accounting
records was the completeness test. As such, th e mentioned statement is not intended to imply
anything as to whether CMI's cost information was relevant to the question of accuracy of domestic
sales. We therefore decline to make additional findings in this regard.

6.11 Seventh, Indonesia argues that the Panel faile d to address Indonesia's argument that the KTC
failed to explain the reasons for its decision to re ject the domestic sales data submitted by Indah Kiat
and Pindo Deli and to use facts available instead. Indonesia requests us to append a footnote to
paragraph 7.73 below to indicate that Indonesia ra ised such an argument. Korea responds that
Indonesia should not be allowed to raise a new argum ent at the interim review stage. Korea also
submits that the KTC did in fact explain the reasons for its decision to reject the domestic sales data
presented by Indah Kiat and Pindo De li. In our view, the assertion that the KTC failed to explain the
reasons for its decision to reject the domestic sal es data submitted by Indah Kiat and Pindo Deli is
inherent in the way we characterized Indonesia's ar guments in this regard in paragraph 7.73 of our
report. We note that, in paragraph 7.83 below, we expressed our view as to whether the KTC
explained the basis of its decision to reject the me ntioned domestic sales data . We therefore decline
to make additional findings in this regard.
6.12 Eighth, Indonesia requests the Panel to revise its findings in paragraphs 7.79-7.80 below to
reflect the fact that the Provisional Report demonstr ates that the KTC applied the ordinary course of
trade test under Article 2.2 of the Agreement. Kor ea submits that the fact that the KTC applied the
mentioned test in its Provisional Report is legally insignificant as it did not mean that the KTC would
not later on decline to use the domestic sales da ta submitted by Indah Kiat and Pindo Deli in its
normal value determinations. A lthough we do not find it relevant to our legal analysis, we
nevertheless appended footnote 152 to paragraph 7.80 to accommodate Indonesia's request, i.e. to
acknowledge the fact that in the Provisional Report the KTC did in fact apply the mentioned test.
6.13 Ninth, Indonesia asked for clarification regardi ng the Panel's interpretati on of the term "etc."
used in the KTC's Preliminary Dumping Report, quot ed in paragraph 7.81 below. Korea submits that
no clarification is needed in this regard. We made a slight modification to paragraph 7.81 to
accommodate Indonesia's concern.
6.14 Tenth, Indonesia requested a typographical change to paragraph 7.83 below, which we made.
6.15 Eleventh, Indonesia objects to our statement in footnote 185 and argues that the Panel has not
addressed its argument that the single entity consisting of the three Sinar Mas Group companies
should have been given the rights under paragraph 6 of Annex II. Korea submits that our findings in
this regard are sufficiently clear, hence no modifi cation is needed. In order to address Indonesia's
concern regarding the specific issue of whether or not the single entity should have been given the
rights under paragraph 6 of Annex II, we modified the text of footnote 185.
6.16 Twelfth, Indonesia raised a question regarding th e basis of one of our statements in paragraph
7.165 below. Korea submits that no modification is needed to the statement cited by Indonesia. We
modified the wording of the mentioned statement in order to address Indonesia's concern.
6.17 Thirteenth, Indonesia submits that in connecti on with its finding in paragraph 7.210 below,
the Panel should explain how the KTC's obligation not to disclose confidential information would
allow its refusal to disclose (1) why the reported do mestic sales data were rejected, (2) the reasoning
relating to the methods provided for under Article 2.2 of the Agreement, and (3) the details relating to
the calculation of the normal values for Indah Ki at and Pindo Deli. Korea has raised no specific
arguments in this regard. We note that Indonesia re peats the arguments that it has raised on this issue
in the course of these proceedings. We therefore d ecline to make any additional findings in this
regard.
6.18
 Fourteenth, Indonesia requests the Panel to m odify the quotation from Indonesia's response to
question 51 from the Panel following the first meeti ng, found in footnote 243 below. Indonesia also
submits that the Panel has failed to address some of its substantive arguments about the like product
claim, presented in the remainder of Indonesia's response to question 51. Korea disagrees with
Indonesia in this regard. We modified the fo rmat of the mentioned quotation to accommodate

Indonesia's request. Regarding the substantive arguments Indonesia raises, we are of the view that we
have addressed Indonesia's arguments relevant to the resolution of the mentioned claim. We therefore
decline to make any additional findings in this regard.
6.19 Fifteenth, Indonesia contends that the Panel has failed to explain how it found that the KTC
properly analyzed whether or not dumped imports had "significant" price undercutting, "significant"
price depression or "significant" price suppression on the prices of the Korean industry. Our findings
on this issue are found in paragraphs 7.252-7.253 below. As we stated in paragraph 7.253, we do not
interpret Article 3.2 of the Agreement to require that the word "significant" appear in the IA's
determination. We therefore decline to make any additional findings in this regard.
6.20 Sixteenth, Indonesia requests the Panel to revise its finding that Indonesia's claim regarding
the KTC's volume analysis is not within its terms of reference. In this cont ext, Indonesia argues that
the Panel collapsed the issue of the increase in the volume of dumped imports from 2002 to the first
half of 2003 with the issue of the calculation of domestic consumption. Indonesia submits that it is
not clear whether the Panel's conclusion in paragrap h 7.264 applies to both of these issues. We note
that in the mentioned paragraph, we found Indonesi a's claim regarding the KTC's volume analysis to
be outside our terms of reference. That obviously applies to all arguments raised by Indonesia to
support that claim, including its argument relating to the increase in the volume of dumped imports
from 2002 to the first half of 2003 and the calculation of the domestic consumption. We therefore
decline to make any additional findings in this regard.
6.21 Indonesia also argues that it is not clear whet her Korea raised such a jurisdictional issue
before the Panel. Korea submits that even if th is was not requested by Korea, the Panel correctly
considered this jurisdictional issue sua sponte . We discussed Korea's request in this regard in
paragraphs 7.255 and 7.256 below. We also note our statement in paragraph 7.257 that even if this
issue was not raised by Korea, we would have to address it on our own motion. We therefore decline
to make any additional findings in this regard.
6.22 Indonesia argues that its claim regarding the KTC's volume analysis should be found to be
within the Panel's terms of reference through its claim under Article 3.2 concerning the impact of
dumped imports on the prices of the domestic indus try and the one under Ar ticle 3.4 regarding the
consequent impact of those imports on the state of the domestic industry. Korea disagrees with
Indonesia in this regard. We note that we have analyzed Indonesia's request for the establishment of a
panel with sufficient care in deciding whether or not its claim on the volume of dumped imports was
properly raised in it. We do not consider Indonesi a's comments to be convincing to require us to
change our analysis in this regard. We therefore decline Indonesia's request.
6.23 Indonesia submits that the issue of whether th e KTC excluded from the domestic industry all
domestic producers that imported the subject product from the subject countries, raised in
paragraph 116 of its second written submission, is not related to the KTC's volume analysis.
Indonesia submits that this claim has to do with th e KTC's obligation to carry out a WTO-consistent
price analysis under Article 3.2 and the analysis under Article 3.4 of the Agreement. As stated above,
we are not convinced by Indonesia's proposition that its claim regarding the calculation of domestic
consumption has been properly raised in its requ est for the establishment through its other claims
under Article 3.2 or 3.4. We therefore decline to change our finding in this regard.
6.24 Seventeenth, Indonesia argues that the Panel exerci sed false judicial economy with respect to
its claim regarding the KTC's causation analysis. Kor ea disagrees with Indonesia in this regard. As
we explained in paragraph 7.277 below, we applied judicial economy with respect to this claim
because the KTC's causation analysis was based on an injury analysis that we found to be WTO-
inconsistent. We therefore decline to change our finding in this regard.

6.25 Finally, Indonesia requests the Panel to make factual findings on two issues: (1) that CMI's
financial statements submitted by the Sinar Mas Group on 9 April 2003 were part of the record of the
investigation at issue, and (2) that the verifi cation report submitted by Korea as Exhibit KOR-7 was
not part of the record. Korea submits that the Pa nel should not make any furt her findings with regard
to these two issues. We note that we made th e necessary factual findings on these two issues in
paragraphs 7.38 and 7.181 of our report. We ther efore decline to make any additional findings in
these regards.
B. REQUEST OF KOREA
6.26 Korea requests the Panel to modify its finding in paragraph 7.201 to ta ke into consideration
Korea's statement in its response to question 32 fro m the Panel following the second meeting that the
KTC could not disclose confidential information submitted by [[Company A]] to the Sinar Mas Group
because of its confidentiality obligations under Article 6.5 of the Agreement. Indonesia submits that
the Panel should not modify its finding because Indonesia's claim under Article 6.4 is not limited to
confidential information. We note that the main premise of our finding regarding Indonesia's
disclosure claim under Article 6.4 of the Agreemen t is the KTC's failure to disclose confidential
information to interested parties who submitted that in formation. It follows that the fact that the KTC
was precluded from disclosing to the Sinar Mas Gr oup confidential information submitted by another
interested party would not affect our finding. We therefore decline to modify our finding in this
regard.
6.27 Second, Korea requests the Panel to treat certain information in this report as confidential.
Indonesia argues that some of the information that Korea wants to be treated as confidential is
available in the public version of the KTC's reports and therefore should not be treated as confidential.
More specifically, Indonesia argues that redacti ng the company names could create confusion about
the number of companies that were subject to the i nvestigation at issue. We note that Indonesia has
not submitted evidence as to whether the information Korea wants to be treated confidential had been
made public in the same context that it is used in our report. In the absence of such specific evidence
and for the sake of respecting confidentiality of sens itive information, we consider it proper to redact
from our findings the information that Korea iden tified as confidential. However, taking into
consideration the concern raised by Indonesia, we have used abbreviations that would preclude
confusion as to the identities of companies, while keeping their names confidential.
VII. FINDINGS
A.
GENERAL ISSUES
1. Standard of Review
7.1 In light of the claims and arguments made by the parties in the course of these Panel
proceedings, we recall, at the outset of our examinati on, the standard of review we must apply to the
matter before us.
7.2 Article 11 of the DSU93 sets forth the appropriate standard of review for panels for all covered
agreements except the Anti-dumping Agreement. Article 11 imposes upon panels a comprehensive

93 Article 11 of the DSU, entitled "Functio n of Panels", states: "The function of panels is to assist the
DSB in discharging its responsibilities under this Unde rstanding and the covered agreements. Accordingly, 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, and make such other
findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the
covered agreements…"

obligation to make an "objective assessment of th e matter", an obligation which embraces all aspects
of a panel's examination of the "matter", both factual and legal.
7.3 Article 17.6 of the Anti-dumping Agreement set s forth the special standard of review
applicable to anti-dumping disputes. It provides:
“(i) in its assessment of the facts of the matter, the panel shall determine whether
the authorities’ establishment of the facts was proper and whether their evaluation of
those facts was unbiased and objective. If the establishment of the facts was proper
and the evaluation was unbiased and objectiv e, even though the panel might have
reached a different conclusion, the evaluation shall not be overturned;”
“(ii) the panel shall interpret the rele vant provisions of the Agreement in
accordance with customary rules of interpreta tion of public international law. Where
the panel finds that a relevant provision of the Agreement admits of more than one
permissible interpretation, the panel sha ll find the authorities’ measure to be in
conformity with the Agreement if it rests upon one of those permissible
interpretations.”
7.4 Thus, together, Article 11 of the DSU and Ar ticle 17.6 of the Anti-dumping Agreement set
out the standard of review we must apply with respect to both the factual and legal aspects of our
examination of the claims and arguments raised by the parties.
94
7.5 In light of this standard of review, in examining the claims under the Anti-dumping
Agreement in the matter referred to us, we must evaluate whether the Korean measure at issue is
consistent with relevant provisions of the Anti-dumping Agreement. We must find it consistent if we
find that the KTC has properly established the facts and evaluated them in an unbiased and objective
manner, and that its determinations rest upon a "permissible" interpretation of the relevant provisions.
Our task is not to perform a de novo review of the information and evidence on the record of the anti-
dumping investigation at issue, nor to substitute our judgment for that of the KTC, even though we
might have arrived at a different determination were we examining the record ourselves.
2. Burden of Proof
7.6 We recall that the general principles applicable to burden of proof in WTO dispute settlement
require that a party claiming a violation of a provision of the WTO Agreement by another Member
must assert and prove its claim.
95 In these Panel proceedings, Ind onesia, which has challenged the
consistency of Korea's measure, thus bears the bu rden of demonstrating that the measure is not
consistent with the relevant provisions of the Agreement. Indonesia al so bears the burden of
establishing that its claims are properly before us. We also note that it is generally for each party
asserting a fact to provide proof thereof. 96 In this respect, therefore, it is also for Korea to provide
evidence for the facts which it asse rts. We also recall that a prima facie case is one which, in the
absence of effective refutation by the other party, requires a panel, as a matter of law, to rule in favour
of the party presenting the prima facie case.

94 Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products
from Japan ("US – Hot-Rolled Steel "), WT/DS184/AB/R, adopted 23 August 2001, paras. 54-62.
95 Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and
Blouses from India ("US – Wool Shirts and Blouses") , WT/DS33/AB/R and Corr. 1, adopted 23 May 1997,
DSR 1997:I, 323 at 337.
96 Ibid.

3. Treaty Interpretation
7.7 We note that many of the claims raised by Indonesia in these proceedings require us to
interpret various provisions of the Anti-dumping Agreement.
7.8 We note that Article 3.2 of the DSU indicates that Members recognise that the WTO dispute
settlement system serves to clarify the provisions of the covered agreements "in accordance with
customary rules of interpretation of public internati onal law". In this regard, the Appellate Body, in
United States – Gasoline, refers to "a fundamental rule of treaty interpretation [which] has received its
most authoritative and succinct expression in the Vienna Convention on the Law of Treaties "97
("Vienna Convention"), and cites Article 31.1 thereof, which reads as follows:
ARTICLE 31
General rule of interpretation
1. A treaty shall be interpreted in goo d faith in accordance with the ordinary
meaning to be given to the terms of the trea ty in their context and in the light of its
object and purpose.98
7.9 According to the Appellate Body, "[this] general rule of interpre tation has attained the status
of a rule of customary or general international law. As such, it forms part of the 'customary rules of
interpretation of public international law'"99. We shall, therefore, follow the provisions of Article 31.1
of the Vienna Convention when interpreting the provisions of the Anti-dumping Agreement referred
to by the parties in these proceedings and base our interpretation on the text of the provision under
consideration in its context and in light of the object and purpose of the Anti-dumping Agreement.
B.
PROCEDURAL ISSUE
1. Composition of Delegation
7.10 At our first substantive meeting with the parties, Korea, citing Article 18.2 of the DSU, stated
that there were representatives of the Indonesian paper industry in the In donesian delegation and
requested that they leave the hearing room be cause access to confidential information submitted by
Korea would give them an unfair competitive adva ntage over their Korean counterparts. Indonesia
submitted that it had full discretion with respect to the composition of its delegation in these
proceedings and that it had been respecting its oblig ation under Article 18.2 of the DSU to protect the
confidentiality of the submissions made by Korea.
7.11 In that meeting, we ruled that, as provided in paragraph 15 of our Working Procedures,
Indonesia was entitled to determine the composition of its delegation in these proceedings. We also
stated that, in accordance with Article 18.2 of the DSU and paragraph 15 of our Working
Procedures100, Indonesia assumed responsibility for its delegation, including respect for the
confidentiality of the submissions made by Korea in these proceedings.101

97 Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline ("US –
Gasoline"), WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3 at 16.
98 (1969) 8 International Legal Materials 679.
99 Appellate Body Report, US – Gasoline, supra, note 97 at 17 (footnote omitted).
100 Paragraph 15 of our Working Procedures provides:
"The parties to the dispute have the right to determine the composition of their own
delegations. The parties shall have the responsibility for all members of their delegations and
shall ensure that all members of the delegati on act in accordance with the rules of the DSU

7.12 We are cognisant of the need to protect sens itive information in the WTO dispute settlement
proceedings, and in particular of the importance of protecting confidential information submitted to
the IA in an anti-dumping investigation pursuant to Ar ticle 6.5 of the Agreement. We note that at the
time we made our ruling on this issue
102, Korea had not identified any specific information for which
it sought confidential treatment. 103 Rather, Korea sought to exclude certain representatives of
Indonesia from the entirety of the meeting of the par ties with the Panel. We further emphasize that
we indicated at the meeting our willingness to entert ain a request for procedures for the protection of
specific Business Confidential Information, an offer echoed by Indonesia, 104 but Korea made no such
request. We also note that Indonesia subsequently indicated that it would not in any event include
business representatives in its delegation in the sec ond substantive meeting of the Panel with the
parties.
2. Access to Submissions
7.13 In its second written submission, Korea stated that it would continue to serve its confidential
submissions on Indonesia "subject to the understa nding that these submissions [would] not be
disclosed by Indonesia to anyone other than the rele vant Indonesian government officials and to legal
advisors of Indonesia who [had] agreed to mainta in the confidentiality of information provided to
them".105 Indonesia responded that Korea could not un ilaterally subject to conditions Indonesia's use
of Korea's submissions in the preparation of its case. Korea then requested the Panel to direct
Indonesia to return to Korea all confidential submissions made by the latter. Korea also indicated that
it would serve non-confidential versions of its confidential submissions on Indonesia. We understood
this proposition to mean that Korea would submit full confidential versions of its submissions to the
Panel, but that only non-confidential versions would be served on Indonesia.
7.14 Regarding the issue of confidentiality of s ubmissions made by parties to WTO dispute
settlement proceedings, we note the following provision in Article 18.2 of the DSU:
"Written submissions to the panel or th e Appellate Body shall be treated as
confidential, but shall be made available to th e parties to the dispute. Nothing in this
Understanding shall preclude a party to a di spute from disclosing statements of its
own positions to the public. Members sh all treat as confidential information
submitted by another Member to the panel or the Appellate Body which that Member
has designated as confidential. A party to a dispute shall also, upon request of a

and the Working Procedures of this Panel, particularly in regard to confidentiality of the
proceedings."
101 We find support for this proposition in the following ruling of the panel in Indonesia – Autos:
"We would like to emphasize that all members of pa rties' delegations -- whether or not they
are government employees -- are present as repres entatives of their governments, and as such
are subject to the provisions of the DSU and of the standard working procedures, including
Articles 18.1 and 18.2 of the DSU and paragraphs 2 and 3 of those procedures. In particular,
parties are required to treat as confidential all submissions to the Panel and all information so
designated by other Members; and, in addition, the Panel meets in closed session.
Accordingly, we expect that all delegations w ill fully respect those obligations and will treat
these proceedings with the utmost circumspection and discretion." (footnote omitted)
Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry ("Indonesia –
Autos
 "), WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 2, 3, 4, adopted
23 July 1998, DSR 1998:VI, 2201, para. 14.1.
102 We made an oral ruling on this issue during our first meeting with the parties, which we then sent to
the parties in writing in a fax dated 14 March 2005.
103 Korea had designated its entire first submission as confidential.
104 In its letter dated 10 March 2005, Indonesia offered supplemental working procedures concerning
Business Confidential Information.
105 Again, Korea had designated its entire second submission as confidential.

Member, provide a non-confidential summary of the information contained in its
written submissions that could be disclosed to the public."
7.15 Article 18.2 lays down a general requirement that submissions made by parties to a dispute be
treated as confidential by the other parties receivi ng such submissions. We also note that paragraph
15 of our Working Procedures contains the same requirement. We do not, however, understand
Article 18.2 to prevent a party from seeking advice of individuals, as necessary, for its effective
participation in the dispute, provided that any pers ons consulted are held accountable with respect to
the provisions of the DSU, including those on confidentiality.
106 We see this as a natural corollary to
the proposition that Members are free to determine th e composition of their dele gations to meetings.
It would not be logical if Members were allowed to decide which individuals would represent them in
their delegations, but not allowed to decide whose services would be utilized in preparation of their
cases.
7.16 Taking into consideration Indonesia's repeated statements that it would respect the
confidentiality of Korea's submissions in accordance with Article 18.2 of the DSU and paragraph 15
of our Working Procedures, we see no reason to find that Indonesia has not fulfilled this obligation so
far in these proceedings.
7.17 In respect of Korea's proposal to withdraw its existing submissions and submit non-
confidential versions of those submissions to Indon esia, considering the fact that Article 18.1 of the
DSU precludes ex parte communications between the Panel and a party, we stated that while we
would entertain any request by Korea to withdraw its submissions or to redact from them certain
information, in such a case the submissions wit hdrawn or information redacted would no longer be
before the Panel. We further stated that we were fully conscious of the obligations placed on
Members by Article 6.5 of the Anti-dumping Agreem ent, and remain prepared to work with the
parties to design ways to protect any informa tion treated as confidential by the investigating
authorities in the underlying investigation. Korea, however, failed to request such procedures.
7.18 We note in this regard that Korea subsequently requested that we exclude certain specific
information from the public version of our report
107, and we have complied with this request.
C. KTC'S DECISION TO DISREGARD DOMESTIC SALE INFORMATION AND TO CALCULATE NORMAL
VALUES FOR INDAH KIAT AND PINDO DELI ON THE BASIS OF FACTS AVAILABLE
1. Arguments of Parties
(a) Indonesia
7.19 Indonesia argues that the KTC acted inconsistent ly with Article 6.8 of the Agreement and
various provisions of Annex II to the Agreement in its decision to disregard domestic sales data and to
use facts available to calculate normal values for Indah Kiat and Pindo Deli. Indonesia bases this
claim on three grounds. Firstly, Indonesia submits th at the KTC failed to make the necessary finding
under Article 6.8 that these exporters either signi ficantly impeded the investigation or failed to
provide necessary information within a reasonable pe riod. Secondly, Indonesia submits that the KTC
acted inconsistently with Article 6.8 and paragrap h 3 of Annex II by refusing to consider domestic
sales data submitted by these two exporters, because those data (1) were verifiable, (2) were submitted
in a timely manner and in the medium requested by the investigating authority ("IA"), and (3) could

106 See, Panel Report, Brazil – Export Financing Programme for Aircraft, Second Recourse by Canada to
Article 21.5 of the DSU ("Brazil – Aircraft (Article 21.5 – Canada II ) "), WT/DS46/RW/2, adopted
23 August 2001, DSR 2001:XI, 5481, paras. 3.6-3.7.
107 Korea submitted its request in its letter dated 10 May 2005, containing its comments on the
descriptive part of our report.

be used without undue difficulty. Thirdly, accordi ng to Indonesia, the KTC acted inconsistently with
Article 6.8 and paragraph 6 of Annex II by not info rming Indah Kiat and Pindo Deli of its decision to
reject their domestic sales data and not providing them with an opportunity to submit further
explanations and rectify their failure.
7.20 According to Indonesia, had the KTC taken into consideration the domestic sales data
submitted by Indah Kiat and Pindo Deli, it would have found no dumping with respect to the single
entity consisting of Indah Kiat, Pindo Deli and Tjiwi Kimia.
(b) Korea
7.21 Korea submits that the KTC requested CMI's financial statements on different occasions
during the investigation at issue. More specifically , it requested that CMI's financial statements and
accounting records be made available during verification, but the Sinar Mas Group companies refused
to make them available. This, in Korea's view , demonstrates that the Sinar Mas Group companies did
not cooperate in the investigation at issue and the KTC properly resorted to facts available. Korea
asserts that the domestic sales data submitted by In dah Kiat and Pindo Deli were not verifiable and
hence could not be used by the KTC in the absen ce of CMI's financial statements and accounting
records. Korea also submits that the KTC prope rly explained the reasons for resorting to facts
available with respect to calculating normal values for Indah Kiat and Pindo Deli and gave these
companies opportunities to comment on that issue.
2. Arguments of Third Parties
(a) European Communities
7.22 According to the European Comm unities, since the IA is entitled, under Article 6.10, to treat
related companies as a single entity in the context of its dumping determinations, if an exporter that is
part of a single entity subject to an anti-dumping inv estigation fails to cooperate with the IA, the latter
can legitimately resort to facts available with re spect to the single entity pursuant to Article 6.8 and
the relevant provisions of Annex II of the Agreem ent. The European Communities generally argues
that a balance should be struck between the need to complete the investigation in a timely manner and
the interested parties' right to express their views to the IA. In the investigation at issue, the KTC
must show why acceptance of CMI's financial stat ements after verification would undermine the
timely completion of the investigation. The IA should not be allowed to reject the information solely
because it was submitted past the deadline set out under the national law of the importing Member.
(b) China
7.23 China argues that although the IA has a certain degree of discretion with respect to defining
what is meant by "necessary information" for purposes of Article 6.8, such discretion has to be used in
accordance with the procedural requirements implied in the Agreement. According to China, an IA
should not be entitled to reject all the information pr ovided by an interested party on the grounds that
some information has not been submitted. The IA can only do so when the circumstances of a given
investigation so justify.
3. Evaluation by the Panel
(a) Relevant Facts
7.24 The investigation at issue was initiated on 26 November 2002. On the same date,
questionnaires were sent to the Indon esian companies involved in the i nvestigation. In addition to
information relating to individual exporters, i.e. Indah Kiat, Pindo Deli and Tjiwi Kimia in the case of
the Sinar Mas Group, the questionnaires requested that information concerning the sales and costs of

related companies engaged in the production or sale of the subject product, and the financial
statements of these related companies, be submitted. The questionnaires read in relevant part:
"For all related parties ... involved with the production or sale of the merchandise
under investigation during the period of inv estigation ... in the domestic market or
Korean market or both, include the sales and cost of these related companies with
your sales and cost in the same computer file(s) and submit a single narrative
response.

For sales to related resellers, you must report the sales from the related resellers to the
unrelated customers."108 (emphasis added)
"(4) financial statements or other relevant documents (i .e., profit and loss reports) of
all related companies involved in the production or sale of the merchandise under
investigation in your domestic and Korean market, and of the parent(s) of these
related companies, (5) any financial statemen t or other financial report filed with the
local or national government of the country in which your company is located." 109
(emphasis added)
7.25 Tjiwi Kimia chose not to respond to the ques tionnaire. Indah Kiat and Pindo Deli submitted
their responses to the questionnaires on 24 January 2003. In their responses to the questionnaires,
Indah Kiat and Pindo Deli submitted in formation regarding their sales to CMI. This information was
verified by the investigators. Th ey explained to the KTC that [[**]] 110 per cent of Indah Kiat’s and
[[**]]111 per cent of Pindo Deli’s domestic sales of the subject product were made through CMI. They
also submitted a detailed listing of CMI's sales of the subject product to independent buyers.112 CMI's
financial statements were not submitted along with questionnaire responses.113
7.26 The KTC sent its verification plan to the Sinar Mas Group on 10 March 2003. The
verification plan grouped the information request ed for verification purposes under five headings:
"Understanding of Indah Kiat/Pindo Deli", "Verifica tion of the completeness of the data submitted",
"Verification of the accuracy and validity of the information on the export prices to Korea and
relevant adjustment factors", "Verification of th e accuracy and validity of the information on the
domestic prices and the relevant adjustment factors" and "Verification of the cost of production".
7.27 Under the first heading, i.e. "Understanding of Indah Kiat/Pindo Deli", the verification plan
clearly requested that CMI's financial statements be prepared for verification. The verification plan
provides in the pertinent part:
"d. Prepare the financial statement of 2001 and 2002 year of PT.CMI ("CMI") and
PT.MKP ("MKP")."114 (emphasis in original)
7.28 The verification plan also asked for informati on in relation to Indah Kiat's and Pindo Deli's
sales of the subject product through CMI. For in stance, it requested a wide range of documents
relating to certain sample transactions between CMI and independent buyers. 115 The plan also asked

108 Exhibit KOR- 5 at 4.
109 Exhibit KOR- 5 at 13.
110 Korea requests that the data in square brackets be treated as confidential.
111 Ibid.
112 See, First Written Submission of Korea, para. 104.
113 First Written Submission of Korea, para. 42.
114 Exhibit KOR- 25 at 221.
115 Exhibit KOR- 25 at 225-226.

for information relating to certain differences betw een quantities of sales from Indah Kiat and Pindo
Deli to CMI and the latter's corr esponding sales to independent buyers.
116 Finally, information
relating to CMI's resale of the subject product to sister mills within the Sinar Mas Group and the

117charged by CMI over the prices of Indah Kiat and Pindo Deli was also requested.118
7.29 In response to the verification plan, the Sinar Mas Group pointed out that information relating
to CMI's sales to independent buyers could be verified in the Group's office.119
7.30 The verification was carried out between 24- 27 March 2003. During the verification, the
KTC officials requested CMI's fi nancial statements. In respons e, the Sinar Mas Group submitted a
letter indicating that they were unable to make CMI's financial statements available. The letter reads
in relevant parts:
"The KTC verification plan faxed to us on 8 March 2003 requires preparation of the
financial statements of CMI and MKP (section VII.I.B.d). We are unable to prepare
these statements for the following reasons:
CMI and MKP are not controlled by Indah Kiat or Pindo Deli. While CMI and MKP
companies are related to Indah Kiat and Pindo Deli through shareholding they are
separate legal entities with their own manage ment which is independent of that of
Indah Kiat and Pindo Deli.

CMI has no interest in exports to Korea or elsewhere and therefore has no interest in
this proceeding.
At Indah Kiat and Pindo Deli's requests, CMI has already prepared a substantial
amount of material required by the KT C to which it has committed substantial
resources.
CMI considers that the information already prepared and that of Indah Kiat clearly
demonstrates that its resell [sic] prices are its buying prices from the mills divided by
95%, i.e. it takes a 5% profit margin from its resell prices.
CMI is not satisfied that its highly conf idential financial statements have any
relevance to this investigation of Indah Kiat's and Pindo Deli's exports.
We have done our utmost to obtain the re quired statements from CMI but we cannot
control them.
In addition to the financial statements of CMI, the KTC has requested certain further
information in relation to CMI's activities. In response to the repeated requests of
Indah Kiat and Pindo Deli, CMI has provide d the materials requested in relation to
the sample sales per sections VII.4.B.a (Indah Kiat) and VII.4.B.a (Pindo Deli) of the
verification plan, CMI has made it very clear that it will not provide further in
relation to this matter.
We request KTC's understanding that we have acted to the best of our ability in this
matter."120 (emphasis added)

116 Exhibit KOR- 25 at 226.
117 Korea requests that the data in square brackets be treated as confidential.
118 Exhibit KOR-25 at 226.
119 Exhibit KOR-25 at 1.

7.31 We note that although it is undisputed that the Sinar Mas Group did not provide CMI's
financial statements during verification, parti es' views diverge as to whether or not the KTC
investigators were provided access to other accounting records of CMI, again during verification.
Korea asserts that, in addition to the financial st atements, the KTC investigators also requested to
access CMI's accounting records during verificati on and that the Sinar Mas Group did not provide
such access.
121 Indonesia contends that the Sinar Mas Group provided the KTC investigators with
electronic access to CMI's accounting records.122 Indonesia submitted two affidavits in support of this
assertion.123
7.32 Turning to the record, we note that it indicat es that what was requested by the KTC and not
provided by the Sinar Mas Group during verificati on went beyond CMI's financial statements and
included some other accounting records. For instance, the Verification Report states in relevant parts:
"- Since Indah Kiat did not submit data on sales made by CMI, an affiliated company,
to unrelated parties, we could not verify completeness of Indah Kiat's sales data, as
the following could not be performed.
- Verification of the submitted data agains t CMI's financial statements, independent
auditors' reports thereon, general ledgers and sales sub-ledgers, etc ...."124 (emphasis
added)
7.33 The Final Investigation Report reads in pertinent parts:
"During the on the spot investigation, Pindo Deli and Indah Kiat failed to submit
relevant data, such as the financial stat ements, accounting books and records, etc .,
which would support accuracy and complete ness of the resales made through its
affiliated company, CMI. Therefore, the O ffice of Investigation calculated individual
normal values on the basis of the facts available..."125 (emphasis added)
7.34 We note that multiple reports by the KTC investigators indicate that the KTC sought access to
CMI's accounting records other than its financial stat ements and that such request was declined. We
note that the Verification Report was not submitted to the Sinar Mas Group 126 during the
investigation, but the Final Inves tigation Report was. There is no indication on the record that the
accuracy of the above-quoted statements in the Fina l Investigation Report was contested by the Sinar
Mas Group during the investigation. Most critica lly, we recall that the letter provided by the
exporters to the KTC investigators during the verification itself indicated what information had been
provided by CMI and stated that "CMI has made it very clear that it will not provide further
[information] in relation to this matter. " (supra, para. 7.30). We also note that the Provisional Report
on Investigation of Preliminary Dumping Margin s handed out to the Sinar Mas Group during the 4
April meeting stated that the KTC decided to u se constructed normal value on the basis of facts
available because the respondents had failed to submit "evidence on their affiliated company" 127 or "
evidence on resales cost of their affiliated company" 128, without necessarily limiting it to CMI's
financial statements.

120 Exhibit KOR- 29 at 2-3.
121 See, Response of Korea to Question 6 from the Panel Following the First Meeting.
122 See, First Oral Statement of Indonesia, para. 65.
123 See, Exhibits IDN-24 and 35.
124 Exhibit KOR- 6 at 3. On page 7, the Verificati on Report repeats the same statement with respect to
Pindo Deli.
125 Exhibit KOR-13A at 11.
126 First Written Submission of Korea, para. 151.
127 Exhibit KOR-7 at 4.
128 Exhibit KOR-7 at 11.

7.35 We recall that according to our above-outlined st andard of review (paras. 7.1-7.5), Indonesia
has to prove this factual matter that it asserts. Given that the record shows that what was requested by
the KTC and not submitted by the Sinar Mas Group went beyond CMI's financial statements and also
included other accounting records of this company, we conclude that Indonesia has failed to prove
this factual assertion on the basis of the facts on the record. We shall therefore base our analysis on
our factual finding that the Sinar Mas Group faile d to provide CMI's financial statements and
accounting records requested by the KTC investigators during verification.
7.36 Apart from information relating to CMI's sales of the subject product, the verification was
carried out and completed without any difficulty. Among other things, the KTC officials also verified
a number of sample sales transactions by Indah Kiat and Pindo Deli, as well as by CMI to
independent buyers.
7.37 A post-verification public hearing was held in Seoul on 4 April 2003. In this meeting, the
KTC officials orally informed the Sinar Mas Group representatives that since CMI's financial
statements were not made available during verification, the KTC would resort to facts available with
respect to determining normal values for Indah Kiat and Pindo Deli. During this meeting, the KTC
officials also handed out their Provisional Report on Investigation of Preliminary Dumping Margins.
This report contained the KTC's first post-ve rification dumping margin calculations in the
investigation at issue.
7.38 On 9 April, the Sinar Mas Group submitted to the KTC a two-page document, termed CMI's
income statements for the years 2001 and 2002. Ho wever, the KTC did not change its approach and
based normal values for Indah Kiat and Pindo Deli on facts available. Since it considered domestic
sales data submitted by the Sinar Mas Group to be unreliable because CMI's fi nancial statements and
accounting records were not made available during verification, the KTC decided to construct the
normal values for Indah Kiat and Pindo Deli.
129
(b) Legal Analysis
7.39 We note that the crux of Indonesia's claim is th at in its normal value determinations the KTC
should have taken into consideration the domestic sal es data submitted by Indah Kiat and Pindo Deli
in their responses to the questionnaires. Korea res ponds that it could not take the domestic sales data
into account because CMI's financial statements a nd accounting records were necessary to verify the
completeness of that data, and th e Sinar Mas Group failed to make those documents available during
verification. Thus, we shall first consider whet her CMI's financial statements and accounting records
represented necessary information which was not provided within a reasonable period so that the KTC
was entitled under Article 6.8 to resort to facts available. If we find this to be the case, we shall then
consider to what extent that allowed the KTC to disregard the domestic sales data submitted by Indah
Kiat and Pindo Deli.
(i) Did Indah Kiat and Pindo Deli Fail to Provid e Necessary Information to the KTC Within a
Reasonable Period?
7.40 Indonesia claims that the KTC acted inconsiste ntly with Article 6.8 of the Agreement by
resorting to facts available without establishing that the conditions set out therein were met in this
investigation. Korea argues that the KTC did not act inconsistently with Article 6.8 because the Sinar
Mas Group failed to make CMI's financial stat ements and accounting records available during
verification and thus failed to provide necessary information within a reasonable period.
7.41 We note that Article 6.8 of the Agreement provides:

129 First Written Submission of Korea, para. 132.

"In cases in which any interested party refuses access to, or otherwise does not
provide, necessary information within a reas onable period or significantly impedes
the investigation, preliminary and final de terminations, affirmative or negative, may
be made on the basis of the facts available. The provisions of Annex II shall be
observed in the application of this paragraph."
7.42 Article 6.8 allows an IA to base its determ inations on facts available, and to disregard
information submitted by an interested party, only if: the interested pa rty refuses access to, or
otherwise does not provide, necessary information within a reasonable period, or significantly
impedes the investigation. We shall therefore cons ider whether or not CMI's financial statements and
accounting records were necessary information within the meaning of Article 6.8 of the Agreement,
and whether or not they were submitted within a reasonable period.
Were CMI's Financial Statemen ts and Accounting Records Necessary Information Within the
Meaning of Article 6.8?
7.43 Article 6.8 of the Agreement stipulates that failure to provide necessary
 information within a
reasonable period may allow the IA to resort to f acts available. In our view, the decision as to
whether or not a given piece of information constitutes "necessary information" within the meaning of
Article 6.8 has to be made in light of the specifi c circumstances of each investigation, not in the
abstract. A particular piece of information that may play a critical role in an investigation may not be
equally relevant in another one. We shall ther efore determine whether or not CMI's financial
statements and accounting records constituted nec essary information in the circumstances of the
investigation at issue.
7.44 We note that in this investigation, the KTC based its normal value determinations on CMI's
sales of the subject product to independent buyers, rather than Indah Kiat's and Pindo Deli's sales to
CMI.130 Therefore, information pertaining to CMI's sa les played a critical role with respect to the
KTC's normal value determinations. This applies, in particular, to quantities and all aspects of prices
of CMI's sales to independent buyers, as well as in formation relevant to whether those sales were in
the ordinary course of trade. It follows that the KTC could legitimately consider as necessary
information about CMI's selling activities, including its costs associated with the domestic sales of the
subject product. Therefore, the accuracy of Indah Kiat's and Pindo Deli's do mestic sales information
being central to the KTC's normal value determinati ons leads, in our view, to the conclusion that
CMI's financial statements and accounting record s constituted "necessary information" for purposes
of the investigation at issue.
Were CMI's Financial Statements and Accounti ng Records Submitted Within a Reasonable Period
Within the Meaning of Article 6.8?

130 We note that the Appellate Body in US - Hot-Rolled Steel , ruled that basing normal value
determinations on downstream sales in the domestic market of the exporter subject to the investigation is
allowed under the Agreement. The Appellate Body opined:
"Thus, Article 2.1 does not expressly mandate that the sale be made by the exporter for whom
a margin of dumping is being calculated. Nor does Article 2.1 expressly preclude that
relevant sales transactions might be made downstream, between affiliates of the exporter and
independent buyers. In our view, provided that all of the explicit conditions in Article 2.1 of
the Anti-dumping Agreement are satisfied, the identity of the seller of the "like product" is
not a ground for precluding the use of a do wnstream sales trans action when calculating
normal value. In short, we see no reason to read into Article 2.1 an additional condition that is
not expressed."
Appellate Body Report, US – Hot-Rolled Steel, supra, note 94, para. 166.
We note, however, that Indonesia has not challenged the KTC's reliance on downstream sales
in determining normal values for Indah Kiat and Pindo Deli in this investigation.

7.45 It is undisputed that, through the verification plan, the KTC informed the Sinar Mas Group
that its investigators would need to see CMI's financ ial statements during verification. The Sinar Mas
Group refused to make these statements available duri ng verification. The record also indicates that
the Sinar Mas Group failed to allow the KTC invest igators access to other accounting records of CMI
during verification. The KTC investigators comp leted their verification without seeing CMI's
financial statements and accounting records.
7.46 Following the verification, the KTC held a disclosure meeting on 4 April 2003. The KTC's
letter dated 19 March 2003, addressed to the Si nar Mas Group, which convened the mentioned
meeting reads in relevant parts:
"[T]he Korean Trade Commission will hold a disclosure meeting ... on April 4, 2003
for the preliminary determination of th e magnitude of dumping margin about PT.
Indah Kiat Pulp & Paper Tbk., PT. Pindo Deli Pulp & Paper Mills.
In the meeting, we will explain the met hodology and the data used for determining
the dumping margin. After the meeting, you may submit written opinion concerning
our method no later than April 10, 2003."131 (emphasis added)
7.47 After the disclosure meeting, the Sinar Mas Group submitted certain documents which, in
their view, were CMI's financial statements. 132 This took place on 9 April 2003, i.e. within the 6-day
deadline for the submission of a "written opinion concerning [the KTC's] method". Indonesia argues
that the KTC should have taken these financial stat ements into account because during the meeting of
4 April, the KTC officials announced that they would accept CMI's financial statements if they were
submitted by 10 April. Indonesia submitted an affidavit to this effect.133 Korea disagrees and submits
that the KTC never stated that submission of CMI' s financial statements after the verification would
have been accepted.134
7.48 We note that the parties disagree as to whethe r or not the KTC indicated that it would accept
CMI's financial statements if submitted by 10 April. The record, however, is quite clear that the KTC
sought these statements in its original questionnaire, and again in its verification plan. Further, the
letter sent by the KTC indicates that 10 April was the deadline for the submission of a "written
opinion" regarding the KTC's methodology, and does not refer to the receipt of new information post-
verification. It is for a party asserting a fact to provide proof thereof. 135 In light of the conflicting
statements of the parties on this question, and the limited purpose for the deadline reflected in the only
contemporaneous written evidence before us, we conclude that Indonesia has not established as a
matter of fact that the KTC indicated that it would accept CMI's financial statements if submitted by

131 Exhibit KOR-28.
132 We note that different terms, such as "income statement", "profit-and-lo ss statement" and, most
commonly, "financial statements" have been used by the parties to describe the document submitted to the KTC
by the representative of the Sinar Mas Group on 9 April 2003. In response to questioning from the Panel, Korea
stated that the document submitted by the Sinar Mas Group purported to be CMI's "income statements" for the
years 2001 and 2002. Korea also men tioned that an income statement is part of financial statements of a
company, but that financial statements normally include other documents as well. Korea pointed out that the
original questionnaire sent to the exporters did not requ ire a complete set of financial statements, hence "[i]f
CMI did not have a full set of financial statements, the submission of CMI’s “income statements” ( i.e., profit
and loss reports) would have satisfied the KTC’s request." See, Response of Korea to Question 9 from the Panel
Following the First Meeting. We therefore consider that the document submitted by Sinar Mas Group on
9 April 2003 can be referred to as CMI's financial statements for purposes of our evaluation of Indonesia's
claim.
133 Exhibit IDN- 26.
134 Response of Korea to Question 9 from the Panel Following the First Meeting.
135 See, supra, note 96.

10 April. It follows that CMI's financial statemen ts were submitted past the deadline established by
the KTC in the investigation at issue.
7.49 Having found that the Sinar Mas Group failed to submit the requested information within the
deadline fixed by the KTC, the next issue we consid er is whether failure to submit this information
justified the KTC's refusal to consider it. We no te that the relevance of missing a deadline for the
submission of information in an anti-dumping inv estigation was discussed by the Appellate Body in
US - Hot-Rolled Steel . In that case, the Appellate Body acknowledged that importing Members may
impose deadlines for the submission of information in order to allow the IA to complete the
investigation in a timely manner. According to th e Appellate Body, however, this does not mean that
the IA can disregard information every time it is submitted past the deadline. The Appellate Body
ruled that time-limits imposed by an importing Memb er are not absolute and that if information is
submitted after the deadline, but within a reasonable period, the IA cannot disregard it and resort to
facts available.
136 Regarding what a reasonable period might mean in this regard, the Appellate Body
opined:
"In sum, a "reasonable period" must be inte rpreted consistently with the notions of
flexibility and balance that are inherent in the concept of "reasonableness", and in a
manner that allows for account to be taken of the particular circumstances of each
case. In considering whether information is submitted within a reasonable period of
time, investigating authorities should consider, in the context of a particular case,
factors such as: (i) the nature and quantity
 of the information submitted; (ii) the
difficulties encountered by an investigated exporter in obtaining the information; (iii)
the verifiability of the information and the ease with which it can be used by the
investigating authorities in making their determination; (iv) whether other interested
parties are likely to be prejudiced
 if the information is used; (v) whether acceptance
of the information would compromise the ability of the investigating authorities to
conduct the investigation expeditiously
; and (vi) the numbers of days by which the
investigated exporter missed the applicable time-limit."137 (emphasis added)
7.50 We note that the Appellate Body identified certa in factors to be taken into consideration in
determining whether or not information has been s ubmitted within a reasonable period. With regard
to the nature and quantity of the information submitted, we no te that CMI's financial statements
submitted by the Sinar Mas Group consisted of two pages and contained certain accounting
information about this company. 138 As stated below (para. 7.55), we note that the Sinar Mas Group
did not attempt to submit other accounting records th at were also requested by the KTC investigators
during verification.
7.51 Regarding the difficulties encountered by the two Sinar Mas Group companies in obtaining
CMI's financial records, we note that the letter s ubmitted to the KTC investigators during verification
by the Sinar Mas Group alleges that the respondents were not in a position to convince CMI to submit
further information to the KTC b ecause they did not control them ( supra, para. 7.30). We also note
that Indonesia raised the same argument in these proceedings. 139 However, as we observed below
(para. 7.166), the record indicates that there w as a significant degree of commonality of ownership
and management between Indah Kiat and Pindo Deli on the one hand, and CMI on the other. Further,
we note that although the Sinar Mas Group asserted during verification that they could not compel
CMI to provide its financial statements, around tw o weeks following the verification, the Group was
nevertheless able to convince CMI to submit these st atements. Finally, we note that there is no
supporting evidence on the record (such as copies of correspondence) to document the alleged

136 Appellate Body Report, US – Hot-Rolled Steel, supra, note 94,paras. 74 and 77.
137 Appellate Body Report, US – Hot-Rolled Steel, supra, note 94,para. 85.
138 Attachment to the Sinar Mas Group letter dated 9 April 2003 (Exhibit KOR-30).
139 See, for instance, First Written Submission of Indonesia, para. 53.

difficulties experienced by Indah Kiat and Pindo Deli. We therefore reject Indonesia's contention that
the respondents encountered difficulties in obtaining the information requested by the KTC
investigators.
140
7.52 With respect to verifiability , we note that the facts at issue in these proceedings are quite
different from the facts in US - Hot-Rolled Steel . In US - Hot-Rolled Steel , the IA requested the
respondents to submit within a specific deadline certain information to be used in the IA's dumping
margin calculations. Respondents provided the request ed information after the deadline, but before
verification. The IA considered the submissions to be late and did not veri fy the belatedly submitted
information during verification. 141 In the case before us, the KTC stated that it would need CMI's
financial statements during verification, but the Si nar Mas Group failed to provide them. This, in our
view, makes this deadline different from an ordinary deadline for the submission of information to the
IA. Verification is a critical stage in an anti-dumping investigation where the IA's main objective is to
satisfy itself about the completeness and accuracy of the information on which it will later base its
determinations. Thus, it would, in our view, be unfair to take the view that in a case such as this one,
the KTC had to carry out a second verification visit to verify the belatedly submitted information.
7.53 The record contains no indication, and none of the parties has argued before us, that some
interested parties could have been prejudiced if CMI's financial statements were used by the KTC in
its dumping determinations.
7.54 With respect to the KTC's ability to conduct the investigation expeditiously and the number of
days by which the Indonesian companies missed the d eadline, we note that CMI's financial statements
were submitted two weeks before the KTC's prelimin ary determination and over five months before
its final determination. We further note, however, th at the information was originally requested in the
initial questionnaires sent to the exporters and ag ain in the verification plan sent before the
verification. Thus, the delay in receipt of the information was substantial and had the KTC been
required to conduct a second verification, the investigation could have been delayed substantially.
7.55 We therefore conclude that in the investigation at issue, the Sinar Mas Group's submission of
CMI's financial statements on 10 April 2003 was not made within a reasonable period as set out in
Article 6.8 of the Agreement and that the KTC w as entitled to disregard CMI's financial statements
and resort to facts available. Furthermore, we note that Sinar Mas Group's post-verification
submission was limited to CMI's financial statem ents, which were submitted for the specific purpose
of demonstrating CMI's SG&A and financial expenses. The Group never attempted to submit other
accounting records which, as we have found above, were also sought by the KTC during verification
and not submitted by the Group. Obviously, theref ore, these accounting records were not submitted
within a reasonable period either.
7.56 It follows that the KTC did not act inconsiste ntly with Article 6.8 in resorting to facts
available with respect to Indah Kiat and Pindo Deli.
142

140 In this regard, we note the following statement by the Appellate Body in US - Hot-Rolled Steel:
"We, therefore, see paragraphs 2 and 5 of Annex II of the Anti-Dumping Agreement as
reflecting a careful balance between the interests of investigating authorities and exporters. In
order to complete their investigations, investigating authorities are entitled to expect a very
significant degree of effort – to the "best of th eir abilities" – from investigated exporters. At
the same time, however, the investigating authorities are not entitled to insist upon absolute
standards or impose unreasonable burdens upon those exporters."
Appellate Body Report, US – Hot-Rolled Steel, supra, note 94, para. 102.
141 See, Appellate Body Report, US – Hot-Rolled Steel, supra, note 94, paras. 64-69.
142 Korea argued that Sinar Mas Group's failure to provide necessary information within a reasonable
period also led to significantly impeding the investigation. See, Response of Korea to Question 5 from the
Panel Following the First Meeting. We note that "si gnificantly impeding an investigation" is another ground

(ii) In its Use of Facts Available, Could the KTC disregard Domestic Sales Data Submitted by
Indah Kiat and Pindo Deli?
7.57 Above, we found that since the Sinar Mas Group failed to submit necessary information, i.e.
CMI's financial statements and accounting records, within a reasonable time, the KTC was entitled to
disregard the belatedly-submitted fina ncial statements and resort to facts available. We recall that
since the Sinar Mas Group failed to provide CMI's fi nancial statements and accounting records during
verification, the KTC decided to construct normal values for Indah Kiat and Pindo Deli on the basis of
facts available. Parties disagree, however, as to whether or not resorting to facts available allowed the
KTC to disregard the domestic sales data submitted by Indah Kiat and Pindo Deli.
7.58 Indonesia argues that even if the KTC's decision to resort to facts available was consistent
with Article 6.8, that did not necessarily allow the KTC to disregard the domestic sales data submitted
by Indah Kiat and Pindo Deli and to construct normal values for Indah Kiat and Pindo Deli on the
basis of facts available. Since these data fu lfilled the conditions set out under paragraph 3 of
Annex II, the KTC was required to take them into consideration in its norma l value determinations.
More specifically with respect to verifiability, Indonesia argues that the domestic sales data were
verifiable because there were ways, other than usin g CMI's financial statements, available to the KTC
investigators which would have allowed them to verify those data. Korea responds that in the absence
of CMI's financial statements and accounting records, there was no way for the KTC to consider the
domestic sales data submitted by the Sinar Mas Gr oup to be reliable. More specifically, Korea
submits that in the absence of these documents, th e KTC could not verify the completeness of the
submitted domestic sales data. That is, the KTC c ould not confirm that all reportable domestic sales
transactions had been reported by the respondents. Therefore, the KTC was allowed to disregard
these data and construct normal values for Indah Kiat and Pindo Deli on the basis of facts available.
7.59 We note that the crux of the claim at issue is whether or not the domestic sales data submitted
in Indah Kiat's and Pindo Deli's responses to the qu estionnaires were verifiable within the meaning of
paragraph 3 of Annex II and ther efore had to be taken into consideration by the KTC in the
calculation of the constructed normal values for these two companies.
7.60 We note that paragraph 3 of Annex II reads:
"All information which is verifiable
, which is appropriately submitted so that it can
be used in the investigation without undue difficulties, which is supplied in a timely
fashion, and, where applicable, which is supplied in a medium or computer language
requested by the authorities, should be take n into account when determinations are
made. If a party does not respond in the pr eferred medium or computer language but
the authorities find that the circumstances set out in paragraph 2 have been satisfied,
the failure to respond in the preferred me dium or computer language should not be
considered to significantly impede the investigation." (emphasis added)
7.61 We note that paragraph 3 stipulates that information submitted by an interested party has to be
taken into consideration by the IA provided th at it satisfies certain conditions. One of these
conditions is that the information be verifiable. The issue therefore is whether or not the domestic
sales data submitted to the KTC by Indah Kiat and Pi ndo Deli were verifiable within the meaning of
paragraph 3. If we find that these data were verifiable, we shall conclude that the KTC acted
inconsistently with Article 6.8 a nd paragraph 3 of Annex II by disr egarding them in its normal value
determinations for Indah Kiat and Pindo Deli.

provided for in Article 6.8 for resorting to facts available. However, having found that the KTC was justified in
resorting to facts available because of the Sinar Mas Gr oup's failure to provide neces sary information within a
reasonable period, we need not, and do not, discuss the legal issue raised by Korea's argument.

7.62 In this regard, we note that the domestic sal es data submitted by an exporter subject to an
anti-dumping investigation may play an important role with respect to the IA's determinations in
many respects. This applies, more specifically, to the value and quantity of domestic sales. Many
steps that Article 2 of the Agreement requires the IA to take in the context of its dumping
determinations necessarily require information regardi ng the quantity and the value of domestic sales.
For instance, to carry out the ordinary course of tr ade test under Article 2.2, the IA needs information
on the quantity of domestic sales. Similarly, under Article 2.2.1, the IA needs information on the
costs and domestic prices of the exporter. We also note that Article 6.6 of the Agreement generally
requires the IA to take the necessary steps in an in vestigation to satisfy itself on the accuracy of the
information on which it bases its determinations. It fo llows that the KTC in this investigation had the
right to ask the Sinar Mas Group to submit necess ary accounting information that would allow the
investigators to verify the domestic sales data its companies had submitted.
7.63 We recall our factual finding above (paras. 7. 32-7.34) that the KTC investigators requested
CMI's financial statements and accounting records during verification and that they were not provided
by the respondents. More importantly, we recall that the letter submitted by the Sinar Mas Group on
the first day of the verification went beyond a refusal to submit CMI's financial statements in
particular and stated that CMI intended not to submit any further information to the KTC investigators
(supra, para. 7.30).
7.64 Given that during the verification the Sinar Mas Group clearly refused to submit
corroborating information, i.e. CMI's financial st atements and accounting records, which was highly
relevant to the KTC's dumping determinations and also stated that CMI would not submit any further
information, we do not see how the domestic sales data submitted by the Sinar Mas Group could have
been considered reliable and taken into consideration by the KTC.
7.65 We note Indonesia's argument that the completene ss of the domestic sales data reported by
Indah Kiat and Pindo Deli could have been verifi ed through a comparison of the list of sales from
Indah Kiat and Pindo Deli to CMI with the list of CMI's sales to independent buyers, because there
was a "one-to-one correspondence" between these two sets of sales. We note that in Indah Kiat's
response to the KTC's questionnaire, this issue was explained as follows:
"[[**]]"
143
7.66 On the basis of this one-to-one correspondence, Indonesia submits that the KTC could have
checked the completeness of Indah Kiat's and Pi ndo Deli's domestic sales by comparing sales from
these companies to CMI with CMI's sales to independe nt buyers. According to Indonesia, since all
sales from Indah Kiat and Pindo Deli to CMI were verified by the KTC investigators, the only thing
remained to be done was to compare that list agai nst the list of CMI's sales to independent buyers,
which was also submitted to the investigators. 144 In response, Korea asserts that even if this
comparison was made, it would only shed light on the completeness of Indah Kiat's and Pindo Deli's
sales with respect to their quantity. The issue of whether or not sales by CMI to independent buyers
contained any "discounts, rebates, billing adjustme nts or additional charges by CMI" would remain
unanswered.145
7.67 We do not agree with Indonesia's contention that a comparison of these two lists of sales
could have assured the KTC about the completene ss of domestic sales reported by Indah Kiat and
Pindo Deli. That is because, as Korea argues, this comparison would not verify the values of
domestic sales as much as it would have verified their quantities. As we noted above, values of
domestic sales are as important in dumping determin ations as their quantities. Therefore, we do not

143 Korea requests that the data in square brackets be treated as confidential.
144 Response of Indonesia to Question 22(a) from the Panel Following the First Meeting.
145 Second Written Submission of Korea, para. 44.

agree with the proposition that the KTC could have assured itself about the completeness of Indah
Kiat's and Pindo Deli's domestic sales by comparing the list of their sales to CMI with the list of
CMI's sales to independent buyers.
7.68 Furthermore, we note that Indonesia's argumentation is premised on the assumption that the
sole purpose for which the KTC requested CMI's fi nancial statements and accounting records was to
confirm the completeness of the domestic sales da ta submitted by Indah Kiat and Pindo Deli.
However, we note that the record contradicts this proposition. For instance, the Final Investigation
Report reads in relevant parts:
"During the on the spot investigation, Pindo Deli and Indah Kiat failed to submit
relevant data, such as the financial statem ents, accounting books and records, etc.,
which would support accuracy and completeness
 of the resales made through its
affiliated company, CMI. Therefore, the O ffice of Investigation calculated individual
normal values on the basis of the facts available..."146 (emphasis added)
7.69 The Final Dumping Report reads in pertinent parts:
"However, during the on the spot investiga tion, Pindo Deli and Indah Kiat failed to
submit relevant evidence, such as the financial statements, accounting books and
records, etc., to verify the accuracy and completeness of the data on resales made
through its affiliated company, CMI. Therefore, the Office of Investigation
calculated an individual normal value on the basis of the facts available..." 147
(emphasis added)
7.70 We note that these reports indicate that, in add ition to checking completeness, another stated
purpose of requesting these records was to verify th e accuracy of the domestic sales data. Accuracy,
in our view, goes beyond verifying the completene ss of domestic sales data and concerns a broader
range of information, including CMI's costs associ ated with the sales of the subject product and its
prices. Indeed, we find it only normal for the IA to seek accounting records of the exporting company
under investigation during verifica tion to verify accuracy of the information already submitted,
including accounting records of related companies, if any, involved in the domestic sales of the
subject product. If that basic request by the IA is rejected, we do not see how an IA could be required
nevertheless to accept that the data in question were accurate.
7.71 Indonesia argues that completeness and accur acy of the domestic sales data submitted by
Indah Kiat and Pindo Deli were verified through the verification of a number of sample transactions
relating to sales to CMI and CMI's resales to independent buyers.
148 It follows that the KTC did not
need CMI's financial statements and accounting r ecords. We disagree. Although verifying individual
sales transactions could be one of the tools to sa tisfy the investigators about the completeness and
accuracy of domestic sales transactions generally , we do not accept the contention that this could
replace or minimize the relevance of doing a verifica tion on the basis of the financial statements and
accounting records of the exporter under investigation.
7.72 On the basis of the foregoing, we conclude th at the KTC did not act inconsistently with
Article 6.8 of the Agreement and paragraph 3 of Annex II in disr egarding the domestic sales data
provided by Indah Kiat and Pindo Deli in determining normal values for these two companies.

146 Exhibit KOR-13A at 11.
147 Exhibit KOR-14A at 12.
148 See, for instance, First Written Submission of Indo nesia, para. 55; Response of Indonesia to
Question 6 (b) from the Panel Following the First Meeting.

(iii) Did the KTC Fail to Inform Indah Kiat and Pi ndo Deli of its Decision to Reject their
Domestic Sales Data and to Provide them with an Opportunity to Express their Views?
7.73 Indonesia submits that the KTC acted inconsiste ntly with Article 6.8 of the Agreement and
paragraph 6 of Annex II by not informing Indah Kiat and Pindo Deli forthwith of its decision to reject
their domestic sales data and giving them an opportuni ty to provide further explanations and rectify
their failure. Korea argues that the KTC did inform the Sinar Mas Group companies of its decision to
reject their domestic sales data and also gave them opportunities to make comments in this regard.
7.74 Paragraph 6 of Annex II reads:
"If evidence or information is not accepted, the supplying party should be informed
forthwith of the reasons therefore, and should have an opportunity to provide further
explanations within a reasonable period, due account being taken of the time-limits of
the investigation. If the explanations ar e considered by the authorities as not being
satisfactory, the reasons for the rejection of such evidence or information should be
given in any published determinations." (emphasis added)
7.75 We note that paragraph 6 provides that in case s where the IA declines to accept information
submitted by an interested party, that party has to be informed without delay of the IA's decision and
has to be given a chance to provide further explana tions regarding that decision. If the IA finds such
explanations as being unsatisfactory, then the info rmation can be disregarded, in which case the IA
has to explain, in its published determinations, wh y the information has been rejected. Paragraph 6
does not, however, set out a procedure through which the interested party has to be notified of this
rejection.
7.76 We recall our finding above (para. 7.72) that the KTC properly declined to consider the
domestic sales data submitted by Indah Kiat and Pindo Deli in its normal value determinations for
these companies. It follows that the KTC had, under paragraph 6, to inform these companies of this
refusal and give them an opportunity to comment. We now turn to the facts of the investigation at
issue to examine whether this was done.
7.77 We note that Indonesia acknowledges that the KTC explained orally, during the meeting held
on 4 April 2003, and through the submission of ce rtain written documents, that the domestic sales
data submitted by Indah Kiat and Pindo Deli were rejected and facts available were used instead.
149
Indonesia also acknowledges that the KTC stated in the Final Investigation Dumping Report that it
had rejected domestic sales information submitte d by Indah Kiat and Pindo Deli because of these
companies' failure to submit CMI's financial statements. 150 However, Indonesia argues that none of
these disclosures was specific enough to explain prope rly what information had been withheld by
Indah Kiat and Pindo Deli which led to the use of facts available.
7.78 We recall that the issue is whether or not the KTC informed the Sinar Mas Group of its
decision to reject domestic sales data submitted by Indah Kiat and Pindo Deli and to base its normal
value determinations for these two companies on fact s available and whether or not it gave them an
opportunity to provide further explanations within a reasonable period, as set out under paragraph 6 of
Annex II.
7.79 We note that the Provisional Report on Investig ation of Preliminary Dumping Margins which
was submitted to the Sinar Mas Group during the 9 April meeting, reads in pertinent parts:

149 First Written Submission of Indonesia, para. 71.
150 First Written Submission of Indonesia, para. 72.

"Since Respondent failed to submit evidence on resales cost of its affiliated company,
CMI, the Office of Investigation arrived at the average cost b ased on the resales cost
of Pindo Deli which was calculated based on the facts available."151
7.80 We note that this statement clearly indicates th at the KTC decided to base its determinations
regarding CMI's costs on facts available because the respondents had failed to submit the relevant cost
data.152
7.81 Next, we note that the KTC sent its Preliminary Dumping Report to the Sinar Mas Group on
9 May 2003153, which reads in relevant part:
"Respondent submitted within the prescribed time limit the data on domestic sales,
export sales and adjustment factors for fair comparison, together with substantiating
evidence. However, during the on the spot investigation, Respondent failed to submit
relevant evidence, such as the financia l statements, etc. concerning sales made
through its affiliated company, CMI. Therefore, the Office of Investigation
calculated the normal value on the basis of the facts available and calculated the
export price based on the data which were submitted by Respondent and verified
during the on the spot investigation."
154
7.82 We note that the Preliminary Dumping Report al so clearly states that the KTC decided to
resort to facts available with respect to determining normal values for Indah Kiat and Pindo Deli
because of their failure to provide, among others, CMI's financial statements during verification.
7.83 There are other documents on the record that also explain clearly the basis of the KTC's
decision to resort to facts available with respect to determining normal values for Indah Kiat and
Pindo Deli.
155 We also note that the Sinar Mas Grou p submitted CMI's financial statements on 9
April following the 4 April meeting, which indicates th at the Group was in fact aware of the reasons
for the KTC's rejection of the submitted domestic sa les data. We therefore conclude that the KTC
complied with its obligation under paragraph 6 of Annex II to inform the Sinar Mas Group of its
decision to reject Indah Kiat's and Pindo Deli's domes tic sales data and to use facts available instead.
We do not agree with Indonesia's contention that these disclosures were not precise enough to explain
the grounds for the KTC's decision to resort to facts available. They do, in our view, clearly indicate
that the reason why the KTC resorted to facts ava ilable in this regard was because CMI's financial
statements and accounting records were not provided during verification.
7.84 Regarding the issue of providing further explana tions to the IA about its decision to reject
submitted information, we note that Indonesia cited no evidence on the record to show that the Sinar
Mas Group was not given the chance to provide furt her explanations within a reasonable period
regarding the KTC's rejection of the domestic sales information submitted by Indah Kiat and Pindo
Deli. Korea argues that the Group had ample opportunity to comment, but that it did not do so. In the
absence of evidence to the contrary, we see no reason to find that the Sinar Mas Group was not given
the opportunity to provide further explanations within a reasonable period regarding the KTC's
decision to disregard the submitted domestic sales data.

151 Exhibit KOR-7 at 11.
152 We note that the Provisional Report demonstrates that the KTC applied the ordinary course of trade
test under Article 2.2 of the Agreement after using facts available in determining CMI's costs. Ibid.
153 See, the letter conveying the KTC's Preliminary Dumping Report (Exhibit KOR-31).
154 Exhibit KOR-8B at 14. The quoted portion of the report addresses the arguments of Pindo Deli. On
page 25, the report contains the same statement with respect to Indah Kiat.
155 See, for instance, the Final Investigation Report (Exhibit KOR-13A at 11) and the Final Dumping
Report (Exhibit KOR-14A at 12).

7.85 Finally in this regard, we note Indonesia's argument that the KTC should have given the Sinar
Mas Group the right to submit further information to cure the defects in the submitted domestic sales
data. In Indonesia's view, paragraph 6 provides an in terested party whose information is rejected by
the IA with the right to submit further evidence.
156 We do not agree. In our view, what paragraph 6
requires is that the IA has to give the interested pa rty whose information is rejected the opportunity to
explain to the IA why the information has to be taken into consideration. This, in turn, would give the
IA a second chance to review its decision to reject that information. Paragraph 6 does not, however,
give the interested party a second chance to submit in formation. If paragraph 6 is interpreted to mean
that each time there is a defect in the submitted information the interested party concerned has the
right to submit further information, the investigation might carry on indefinitely.
7.86 On the basis of the above considerations, we c onclude that the KTC did not act inconsistently
with Article 6.8 of the Agreement and paragraph 6 of Annex II with respect to informing the Sinar
Mas Group of its decision to reject the domestic sa les data submitted by Indah Kiat and Pindo Deli
and giving them an opportunity to make further explanations within a reasonable period.
D. KTC'S USE OF CONSTRUCTED VALUE TO DETERMI NE NORMAL VALUES FOR INDAH KIAT AND
PINDO DELI
1. Arguments of Parties
(a) Indonesia
7.87 Indonesia asserts that the KTC violated Article 2. 2 of the Agreement by failing to make the
necessary determinations under that article before resorting to constructed normal value with respect
to Indah Kiat and Pindo Deli. According to Indon esia, the KTC did not make any determination as to
whether or not there were no sales of the subject product in the ordinary course of trade in the
Indonesian market, or whether the volume of such sales were low, or whether such sales did not
permit a proper comparison because of a particular market situation.
(b) Korea
7.88 Korea contends that because domestic sales data submitted by Indah Ki at and Pindo Deli
were found to be unreliable and not used by the KTC in its normal value determinations, the KTC
could not possibly follow the hierarchy set forth in Article 2.2 before resor ting to constructed normal
value. The KTC's inability to fo llow this hierarchy was a direct result of the Sinar Mas Group's non-
cooperation, hence it should not complain about the legal consequence of that fact.
2. Arguments of Third Parties
(a) United States
7.89 The United States argues that Article 2.2 of th e Agreement does not prevent an IA from using
constructed value as the basis of normal value dete rminations once the IA, consistently with Article
6.8 and Annex II of the Agreement, resorts to facts av ailable because of an interested party's failure to
submit necessary information within a reasonable period of time. In the view of the United States,
Article 2.2 imposes no obligations with respect to the use of facts available.

156 See, Response of Indonesia to Question 14(b) from the Panel Following the First Meeting; Response
of Indonesia to Question 16 from the Panel Following the First Meeting.

3. Evaluation by the Panel
7.90 Indonesia submits that the KTC violated Article 2.2 of the Agreement by resorting to
constructed normal value without making the necessar y determinations under that provision which
would justify such resorting.
7.91 Article 2.2 of the Agreement reads:
"When there are no sales of the like product in the ordinary course of trade in the
domestic market of the exporting country or when, because of the particular market
situation or the low volume of the sales in the domestic market of the exporting
country
2, such sales do not permit a proper comparison, the margin of dumping shall
be determined by comparison with a comparable price of the like product when
exported to an appropriate third country, pr ovided that this price is representative, or
with the cost of production in the country of origin plus a reasonable amount for
administrative, selling and general costs and for profits.
Article 2.2 for these two companies and reject Indonesia's claim.
157

157 We note that Indonesia also alleged a violation of Article 6.8 of the Agreement in connection with
this claim. However, it also stated that the Article 6.8 aspect of its claim was "somewhat dependant" on the
Article 2.2 aspect. See, Response of Indonesia to Question 19 from the Panel Following the First Meeting. We
therefore need not, and do not, make a finding under Article 6.8.

E.
KTC'S CALCULATION OF THE CONSTRUCTED NORMAL VALUES FOR INDAH KIAT AND PINDO
DELI
1. Arguments of Parties
(a) Indonesia
7.95 According to Indonesia, even assuming arguendo that the KTC could legitimately use
constructed normal value in this investigation with respect to I ndah Kiat and Pindo Deli, the way it
calculated their costs of production was inconsistent with Articles 2.2, 2.2.1.1, 2.2.2 and 2.4 of the
Agreement. Although Indah Kiat and Pindo Deli drew the KTC's attention to certain errors made in
the calculation of the constructed normal values, th e KTC did not respond. The first error stems from
the KTC's use of facts available in the calculation of the constructed normal values for Indah Kiat and
Pindo Deli. According to Indonesia, the KTC had no reason to depart from the cost data submitted by
these two exporters in the calculation of their cons tructed normal values. By disregarding these data
and adding CMI's SG&A expenses to those of Inda h Kiat and Pindo Deli in the calculation of their
constructed normal values, the KTC violated Articl es 2.2, 2.2.1.1, 2.2.2, 6.8 and Annex II of the
Agreement. Secondly, Indonesia submits that the KTC erred in adding CMI's financial expenses to
those of Indah Kiat and Pindo Deli in the calculation of their constructed normal values. Furthermore,
Indonesia argues that the KTC erred in using [[Company A]]'s 158 data in determining CMI's SG&A
and financial expenses, rather than CMI's own data.
7.96 Finally, with regard to the calculation of th e constructed normal values for Indah Kiat and
Pindo Deli, Indonesia asserts that the KTC acted incons istently with Article 6.8 of the Agreement and
paragraph 7 of Annex II by failing to exercise spec ial circumspection in its use of information from
secondary sources instead of domestic sales data provided by Indah Kiat and Pindo Deli.
(b) Korea
7.97 Korea contends that CMI played the role of a wholesaler in the Indonesian market whereas
Indah Kiat and Pindo Deli played the same role in th eir sales to distributors a nd end users in Korea.
In order to calculate a normal value at the same level of trade as the export price, the KTC
legitimately added CMI's SG&A and financial expenses to the constr ucted normal values for Indah
Kiat and Pindo Deli. Because the Sinar Mas Gro up failed to provide CMI's financial statements
during verification, the KTC used data relating to another Indonesian company, [[Company A]] 159,
operating at the same level of trade as CMI in th e Indonesian market to calculate CMI's SG&A and
financial expenses.
7.98 With regard to Indonesia's asserti on that the KTC acted inconsistently with Article 6.8 of the
Agreement and paragraph 7 of Annex II by failing to exercise special circumspection in its use of
information from secondary sources instead of domes tic sales data provided by Indah Kiat and Pindo
Deli, Korea submits that all info rmation used in the calculation of the constructed normal values for
Indah Kiat and Pindo Deli came from sources that were verified during the investigation at issue. It
follows that the KTC did not act inconsistently with Article 6.8 of the Agreement and paragraph 7 of
Annex II in this regard.
2. Evaluation by the Panel
7.99 We recall that the record indicates that in its calculation of the constructed normal values for
these two companies, the KTC took the total of the cost of manufacturing, SG&A and interest
expenses of the individual exporters (Indah Kiat and Pindo Deli), SG&A and interest expenses of

158 Korea requests that the data in square brackets be treated as confidential.
159 Ibid.

CMI and finally profits. All costs relating to Inda h Kiat and Pindo Deli individually were taken from
their responses to the KTC's questionnaires. CM I's SG&A expenses were taken from those of
[[Company A]] 160, another Indonesian company subject to th e same investigation, and its interest
expenses from those of [[Company B]]161, a subsidiary of [[Company A]]162.163
7.100 In the context of the claim at issue, Indon esia takes issue with the SG&A and financial
expenses the KTC used for CMI in calculating th e constructed normal values for Indah Kiat and
Pindo Deli.164 Regarding financial expenses, Indonesia subm its that the KTC erred by adding to the
constructed normal values financia l expenses for CMI. According to Indonesia, CMI did not have
any such expense because it was not involved in the production of the subject product. Korea
responds that there was no evidence on the record that showed that CMI's financial expenses were
zero. In order to determine the exact amount of CMI's financial expenses, the KTC needed this
company's financial statements and accounting reco rds, which the Sinar Mas Group refused to submit
during verification.
7.101 We note that Indonesia has not directed our attention to any evidence on the record that would
show that CMI's financial expenses in the POI were in fact zero. Indonesia mentions two letters by
the Sinar Mas Group to the KTC in which it was argued that CMI's financial expenses were zero. 165
One of them is the 9 April letter that conveyed CMI' s financial statements afte r the verification. The
second is the letter dated 2 June 2003, in which the Sinar Mas Group again cites the financial
statements submitted along with the 9 April letter and argues that CMI's financial expenses were zero.
We note that both letters rely on CMI's financial statements submitted on 9 April as evidence of the
fact that CMI's financial expenses were zero. Further, we recall our finding above (para. 7.55) that the
KTC properly rejected the financial statements subm itted on 9 April. It follows that the record does
not support Indonesia's assertion that CMI's financial expenses in the POI were zero.
7.102 The question then becomes whether or not it w as reasonable for the KTC to assume that CMI
had financial expenses. We note that CMI is a trad ing company that does almost all domestic sales of
the subject product by Indah Kiat and Pindo Deli. Since it is not involved in the production of the
subject product, clearly CMI would not have any production-related financial expenses. However, we
do not consider it biased or non-objective for the KTC to assume that CMI could have financial
expenses stemming from its selling activities. The same applies to CMI's SG&A expenses. Given the
lack of information about CMI's actual SG&A expe nses, we do not find it biased or non-objective for
the KTC to assume that CMI could have such expenses.
7.103 Having found that it was reasonable for the KTC to assume that CMI could have both SG&A
and financial expenses, we sha ll now address Indonesia's argument that the KTC failed to apply
special circumspection in the use of facts available with respect to the two cost items added to the
constructed normal values of Inda h Kiat and Pindo Deli for CMI. Indonesia's contention applies to
both the financial and the SG&A expenses added for CMI. In this regard, Indonesia firstly submits
that the KTC had in front of it verified inform ation pertaining to Indah Kiat and Pindo Deli, from
which it could have derived CMI's financial and SG&A expenses. According to Indonesia, the KTC

160 Ibid.
161 Ibid.
162 Ibid.
163 See, Exhibit KOR-54; Response of Korea to Question 7 from the Panel Following the First Meeting.
164 To the extent that Indonesia's arguments in connection with the claim at issue relate to the KTC's
decision to disregard the domestic sales data submitted by Indah Kiat and Pindo Deli and base normal values for
these two companies on constructed value, we note that we have addressed these claims in preceding sections of
our report. More specifically, we note that in para. 7.56 above, we found that the KTC did not err in resorting to
facts available with respect to determining normal values for Indah Kiat and Pindo Deli in the investigation at
issue. We also found ( supra, para. 7.94) that the KTC did not act inconsistently with the Agreement in using
constructed normal value for Indah Kiat and Pindo Deli.
165 See, First Written Submission of Indonesia, footnote 105.

could, and should, have taken Indah Kiat's a nd Pindo Deli's figures as a starting point and have
calculated CMI's costs by making the necessary adjust ments to them bearing in mind that CMI only
sold the subject product and did not produce it.
166 By relying on the data relating to [[Company
A]]167, rather than those of Indah Kiat and Pindo Deli, the KTC acted inconsistently with Article 6.8
of the Agreement and paragraph 7 of Annex II.
7.104 Paragraph 7 of Annex II provides:
"If the authorities have to base their findings , including those with respect to normal
value, on information from a secondary source, including the information supplied in
the application for the initiation of the inv estigation, they should do so with special
circumspection. In such cases, the aut horities should, where practicable, check the
information from other independent sources at their disposal, such as published price
lists, official import statistics and customs returns, and from the information obtained
from other interested parties during the investigation. It is clear, however, that if an
interested party does not cooperate and thus relevant information is being withheld
from the authorities, this situation could l ead to a result which is less favourable to
the party than if the party did cooperate."
7.105 We recall that the Sinar Mas Group refused to provide CMI's financial statements and
accounting records during verification. The KTC theref ore resorted to facts available with respect to
determining normal values for Inda h Kiat and Pindo Deli. In the context of calculating the normal
values, the KTC had no information regarding CMI's financial and SG&A expenses. It therefore used
information relating to another inves tigated company, i.e. [[Company A]]
168, in determining CMI's
expenses. [[Company A]]'s169 information was verified by the KTC. 170 We agree with Indonesia that
the KTC could have relied on Indah Kiat's and Pindo Deli's information in deriving the appropriate
financial and SG&A expenses for CMI. However, we do not consider that this was the only way for
the KTC to proceed in this regard. The KTC al so had verified information relating to another
investigated company and used it to determine CMI's costs. We do not find this course of action to be
inconsistent with the KTC's obligation to apply special circumspection under paragraph 7 in the use of
information from a secondary source.
7.106 Secondly, Indonesia argues that the KTC failed to apply special circumspection in its use of
information from secondary sources by using SG&A expenses of [[Comp any A]] and interest
expenses of [[Company B]] for CMI.
7.107 With respect to SG&A expenses, Indonesia cont ends the figures used by the KTC included
both production and sales-related components and th erefore could not be properly used for CMI,
which was merely a selling company, without excluding production-related aspects. 171 This, in
Indonesia's view, resulted in an overstatement of these expenses and consequently overstatement of
the constructed normal values. Korea responds th at the KTC only used sales-related administrative
expenses of [[Company A]] in deriving CMI's expenses. 172 Indonesia has not rebutted Korea's
assertion in this regard. 173 We therefore conclude that the KT C has added only sales-related parts of

166 See , Response of Indonesia to Question 18 from the Panel Following the First Meeting; Second
Written Submission of Indonesia, paras. 29-38.
167 Korea requests that the data in square brackets be treated as confidential.
168 Ibid.
169 Ibid.
170 Response of Korea to Question 10 from the Panel Following the First Meeting. See also, Exhibit
KOR-56.
171 First Written Submission of Indonesia, para. 110.
172 Response of Korea to Question 7 From the Panel Following the First Meeting.
173 We note, for instance, para. 30 of Indonesia's Second Oral Statement where Indonesia notes Korea's
explanation in this regard and does not disagree with it.

[[Company A]]'s SG&A expenses as CMI's in the calculation of the constructed normal values for
Indah Kiat and Pindo Deli and reject Indonesia's claim regarding the KTC's determination on CMI's
SG&A expenses.
7.108 With respect to financial expenses, Indonesia also argues that the KTC overstated CMI's
interest expenses by basing its determinations in th is regard on the data pertaining to [[Company B]].
According to Indonesia, since [[Company B]] was a manufacturer of the subject product, the KTC
acted inconsistently with its obligations under para graph 7 of Annex II by taking its expenses as a
proxy for CMI. 174 Indonesia also submits that in the circum stances of the investig ation at issue, the
KTC should have taken interest expenses of [[Comp any A]] as a proxy, which was zero as indicated
on the record. According to Indonesia, the KTC' s decision to base CMI's SG&A on [[Company A]]
and its interest expenses on [[Company B]] has no legal basis. 175 Korea submits that [[Company B]]'s
interest expenses included production as well as sales -related components. Korea also disagrees with
Indonesia's proposition that financial expenses incurre d by [[Company A]] would have been a better
proxy for CMI's expenses because they were both tr ading companies which were not involved in the
production of the subject product. In Koreas' view, "the interest expenses incurred by a company are
independent of its size and activities."176
7.109 We recall that the KTC used SG&A expenses of [[Company A]] and financial expenses of
[[Company B]] in determining corresponding costs of CMI which were then used in the calculation of
the constructed normal values for Indah Kiat and Pindo Deli. [[Company A]] was a trading company
that sold, both domestically and in export markets, the products manufactured by [[Company B]]
which was a manufacturer of the subject product in Indonesia.
177 Indonesia argues that the KTC
should have used the financial e xpenses of [[Company A]] rather than those of [[Company B]] for
CMI because, unlike [[Company B]] which was a producer of the subject product, both [[Company
A]] and CMI were trading companies. In Indon esia's view, it was erroneous to treat financial
expenses of a producer as proxy for those of a trading company.
7.110 In our view, one might expect certain differenc es between the types of activities carried out
by trading companies and those carried out by producing companies. Production activities might
require more capital investments and might therefore be more likely to give rise to higher financial
expenses. Selling activities, however, would not no rmally require as much capital investment as
production activities and might therefore create lower financial expenses. Therefore, when applying
facts available in an investigation, the IA would nor mally be expected to take into consideration the
similarities and dissimilarities between the activ ities carried out by the company for which
information is obtained from secondary sources and t hose of the company whose information is used
as proxy. We do not suggest that the IA is genera lly precluded, for instance, from using the interest
expenses of a producing company as proxy for those of a trading company. Notwithstanding our
observation that the activities carried out by th ese two types of companies would normally be
different from one another, we do not exclude the possi bility that - in a given investigation - using the
information relating to these companies for one anot her may be allowed provided that the reasons for
that course of action are adequately explained in the IA's determinations.
7.111 In the investigation at issue, we note that the KTC needed information regarding CMI's
SG&A and financial expenses in order to use them in the construction of the normal values for Indah
Kiat and Pindo Deli. For SG&A, the KTC based its determination on the data pertaining to a trading
company, i.e. [[Company A]]. With regard to financial expenses, however, it relied on the data
relating to [[Company B]], a producing company. We have seen no explanation on the record as to

174 See, for instance, Second Oral Statement of Indonesia, para. 31.
175 Response of Indonesia to Question 12 from the Panel Following the Second Meeting.
176 Comments of Korea on Indonesia's Closing Statem ent and Responses to Questions from the Panel
177 Response of Korea to Question 7 from the Panel Following the First Meeting, footnote 27.

why the KTC decided to use the data relating to a company whose activities were less similar to CMI,
i.e. [[Company B]], although it had in its possessi on data relating to a company, [[Company A]],
which carried out activities similar to those of CMI. This, in our view, runs counter to the obligation
to exercise special circumspection in the use of information from secondary sources when applying
facts available, as set out under paragraph 7 of Anne x II. We therefore conclude that the KTC acted
inconsistently with Article 6.8 of the Agreemen t and paragraph 7 of Annex II with respect to
determining financial expenses of CMI in the cont ext of calculating the constructed normal values for
Indah Kiat and Pindo Deli.
7.112 We note that Indonesia also alleges violations of several subparagraphs of Article 2 of the
Agreement with regard to the KTC's use of [[Co mpany B]]'s financial expenses for CMI. Having
found that the KTC acted inconsistently with Article 6.8 of the Agreement a nd paragraph 7 of Annex
II in this regard, we do not make any finding under Article 2.
F.
KTC'S USE OF FACTS AVAILABLE TO DETERMINE TJIWI KIMIA'S DUMPING MARGIN
1. Arguments of Parties
(a) Indonesia
7.113 Indonesia contends that the KTC violated Artic le 6.8 of the Agreement and paragraph 7 of
Annex II by relying exclusively on the information provided by the applicants in the calculation of
Tjiwi Kimia's dumping margin and by failing to co mpare that information against data submitted by
other investigated exporters. According to Indon esia, there can logically be a difference between
Tjiwi Kimia's dumping margin and those of the other exporters, but the 51.61 per cent dumping
margin which is four times higher than the hi ghest dumping margin calculated for the other
Indonesian exporters demonstrates that the KTC did not act in an unbiased and objective manner in its
calculation of Tjiwi Kimia's dumping margin.
7.114 According to Indonesia, since, contrary to what it did in the preliminary determinations, the
KTC decided to treat the three Sinar Mas Group companies as a single exporter and calculated a
single dumping margin for them in its final determ inations, the calculation of Tjiwi Kimia's dumping
margin on the basis of facts available materially af fected the positions of Indah Kiat and Pindo Deli.
In the absence of the effect of Tjiwi Kimia's dum ping margin, there would have been no finding of
dumping for Indah Kiat and Pindo Deli. It follows that the KTC should have provided Indah Kiat and
Pindo Deli with an opportunity to submit further expl anations and to rectify defects in the submitted
information regarding Tjiwi Kimia pursuant to Ar ticle 6.8 of the Agreement and paragraph 6 of
Annex II. By failing to do so, the KTC violated these provisions.
(b) Korea
7.115 Korea submits that the Sinar Mas Group chose not to cooperate with the KTC in this
investigation with respect to Tjiwi Kimia. It follows that the results of non-cooperation could become
less favourable for Tjiwi Kimia pursuant to paragraph 7 of Annex II. With respect to Indonesia's
argument about the KTC's alleged failure to use spec ial circumspection in the use of facts available
for Tjiwi Kimia, Korea submits that at the initia tion stage of the investigation, the KTC checked,
pursuant to Article 5.3 of the Agreement, the accura cy and adequacy of the information submitted by
the applicants with respect to Tjiwi Kimia. The KTC found that the mentioned information came
from independent and reliable sources. That, in Korea's view, also satisfied the requirements of
paragraph 7 of Annex II. Furthermore, Korea asserts that in the course of the investigation at issue
the KTC compared those data against other sources. Therefore, the KTC cannot be said to have acted
inconsistently with Article 6.8 and paragraph 7 of Annex II in its use of facts available with respect to
Tjiwi Kimia.

7.116 As to Indonesia's argument relating to paragr aph 6 of Annex II, Korea submits that that
paragraph applies in cases where information subm itted by a responding party is not accepted by the
IA. Since Tjiwi Kimia did not s ubmit any information to the KTC in this investigation, it cannot
logically argue a violation of that paragraph. Noth ing in that paragraph, or in Article 6.8 of the
Agreement, requires the IA to provide non-coop erating parties with a second chance to submit
information.
2. Arguments of Third Parties
(a) China
7.117 China submits that checking, in accordance with Article 5.3 of the Agreement, the accuracy
and adequacy of the information submitted by the ap plicants at the initiation stage of an investigation
does not release the IA from its obligation, under paragraph 7 of Annex II, to check against
independent sources the information from secondary sources that is being used in the context of facts
available. These are two distinct obligations that ha ve to be respected at two different stages of an
anti-dumping investigation.
(b) United States
7.118 The United States argues that the obligation under Article 5.3 of the Agreement to verify the
accuracy and adequacy of the information submitted in the application is distinct from the obligation
under paragraph 7 of Annex II to compare the inform ation from the secondary sources used as part of
facts available against independent sources. A ccording to the United States, meeting the first
obligation may not necessarily amount to meeting the second one. The Panel, therefore, has to find as
a matter of fact whether or not the KTC met its obligation under paragraph 7 of Annex II in the
investigation at issue.
3. Evaluation by the Panel
7.119 We note that facts relating to this claim ar e relatively straightforward. Tjiwi Kimia
intentionally chose not to submit information in response to the KTC's questionnaire. In its
preliminary dumping determinations, the KTC treated the three Sinar Mas Group companies
separately. In its final determinations, however, it treated them as a single exporter and assigned to
them one single margin of dumping. In its fina l margin calculations, the KTC first calculated
individual normal values and export prices for each company and then weighted them in order to
come up with a final normal value and export price figure. These final figures were then used to
calculate the final (single) margin of dumping.
178 In this process, normal value and export price
figures for Tjiwi Kimia were obtained from the in formation submitted by the applicants in the
application.
7.120 Indonesia's claim is premised on two arguments. Firstly, Indonesia argues that the KTC acted
inconsistently with Article 6.8 of the Agreement and paragraph 7 of Annex II by relying exclusively
on the data submitted by the applicants in the cal culation of Tjiwi Kimia's dumping margin without
corroborating them against independent sources. Secondly, Indonesia asserts that the KTC acted
inconsistently with Article 6.8 of the Agreement and paragraph 6 of Annex II by not providing Indah
Kiat and Pindo Deli with an opportunity to submit fu rther explanations and to rectify defects in the
submitted information regarding Tjiwi Kimia.
(a) Alleged Violation of Article 6.8 of the Agreement and Paragraph 7 of Annex II
7.121 We note that paragraph 7 of Annex II provides:

178 First Written Submission of Korea, para. 75.

"If the authorities have to base their findings , including those with respect to normal
value, on information from a secondary source, including the information supplied in
the application for the initiation of the inv estigation, they should do so with special
circumspection. In such cases, the aut horities should, where practicable, check the
information from other independent sources at their disposal, such as published price
lists, official import statistics and customs returns, and from the information obtained
from other interested parties during the investigation. It is clear, however, that if an
interested party does not cooperate and thus relevant information is being withheld
from the authorities, this situation could l ead to a result which is less favourable to
the party than if the party did cooperate."
7.122 Paragraph 7 states that when an IA uses facts available in accordance with Article 6.8 of the
Agreement, and in that context bases its determin ations on information obtained from a secondary
source, it has to do so with special care. It also pr ovides that, to the extent possible, that information
should be compared against information from ot her independent sources, including information
obtained by the IA about other investigated comp anies in the same inv estigation. However,
paragraph 7 also acknowledges that as long as speci al circumspection is exercised in the use of
information from a secondary source, the results of the investigation may be less favourable for the
non-cooperating interested party than had it chosen to cooperate.
7.123 Turning to the investigation at issue, we not e that in the process of calculating the single
margin of dumping for the three Sinar Mas Group companies, the KTC based Tjiwi Kimia's normal
value and export price on the information submitted by the applicants in the application. Korea does
not dispute this fact.
179 However, parties' views diverge rega rding whether or not that information
was later on corroborated by the KTC against inform ation from other independent sources. In this
context, Korea generally argues that in certain cases, the fulfilment of the obligation under Article 5.3
may also suffice to meet the requirements of para graph 7 of Annex II. Based on this view, Korea
asserts that in the investigation at issue, there was no need to corroborate the normal value and export
price data obtained from the application becau se these data came from independent and reliable
sources such as the Korean government customs statistics ("KOTIS") and the Korea Trade-Investment
Promotion Agency ("KOTRA"). Furthermore, Kore a asserts that because these data were obtained
from such sources, they were deemed to have been corroborated.180
7.124 We consider the obligations set forth under Ar ticle 5.3 and paragraph 7 of Annex II to be
different. Firstly, these two sets of obligations apply at different stages of an investigation: Article 5.3
concerns the quality of the evidence that would ju stify the initiation of an investigation whereas
paragraph 7 of Annex II has to do with the eviden ce on which the IA's final determination may be
based. Secondly, the standards of these two obligatio ns are different. The standard under Article 5.3
is that evidence be "adequate and accurate" so as to justify initiation whereas paragraph 7 of Annex II
requires that information from secondary sources be compared against that from other independent
sources. We therefore do not agree with the vi ew that the fulfilment of the obligation under
Article 5.3 of the Agreement may in some cases also satisfy the requirements of paragraph 7 of
Annex II. It may be the case that the obligatio n to corroborate under paragraph 7 may entail little
substantive analysis in addition to the analysis ca rried out under Article 5.3 at the initiation stage.
However, that does not make these two obligations the same from a procedural and substantive point
of view. They are two distinct obligations that have to be observed by the IA at different stages of an
investigation. We therefore disagree with Korea's contention that in certain cases, the fulfilment of
the obligation under Article 5.3 may also suffice to meet the requirements of paragraph 7 of Annex II.

179 First Written Submission of Korea, para. 97.
180 Second Written Submission of Korea, para. 32; Second Oral Statement of Korea, para. 64; Response
of Korea to Question 26 from the Panel Following the First Meeting.

7.125 We have no specific reason to question that th e information about Tjiwi Kimia, submitted by
the applicants in the application, may have been reliable as it came from independent institutions, i.e.
KOTIS and KOTRA. The fact remains, however, th at the KTC was under the obligation to take the
procedural step, under paragraph 7 of Annex II, to confirm the re liability of that information for
purposes of its determinations in the investigation. The issue, therefore, is whether or not the KTC
took that step to satisfy the requirements of paragraph 7.
7.126 Korea argues that in the course of the investiga tion at issue, the KTC did in fact compare the
information obtained from the application against information from other independent sources. In this
context, Korea submits that the export price was compared against data from KOTIS. The record
supports this proposition. 181 Korea also argues that the norma l value was compared against normal
values established with respect to the other investigated companies in the same investigation. We
note, however, that there is no indication of su ch corroboration on the record. Korea submitted an
affidavit from a KTC investigator to prove this assertion. 182 We are left in a position where there is
evidence on the record that demons trates that the KTC did corrobora te export price information from
the data of KOTIS, but no evidence as to whether or not the same was done with respect to the normal
value. It is for a party asserting a fact to provide proof thereof. 183 We therefore consider that Korea
has not established as a matter of fact that the KT C compare the normal value figure for Tjiwi Kimia
against other independent sources. It follows that Korea has not rebutted the prima facie case made
by Indonesia in this regard. We therefore conclude that the KTC acted inconsistently with Article 6.8
of the Agreement and paragraph 7 of Annex II by failing to fulfil its obligation to corroborate
information obtained from secondary sources for purposes of calculating Tjiwi Kimia's dumping
margin against other independent sources at its disposal.
7.127 Regarding Indonesia's argument that the magnitude of the margin of dumping calculated for
Tjiwi Kimia also demonstrates that the KTC failed to exercise special circumspection, we are of the
view that the magnitude of the margin of dumpi ng may not have a bearing on the WTO-consistency
of the KTC's calculation as long as the calculation conforms to the relevant provisions of the
Agreement. We therefore disagree with Indonesia in this regard.
(b) Alleged Violation of Article 6.8 of the Agreement and Paragraph 6 of Annex II
7.128 Indonesia argues that since the KTC decided to treat the three Sinar Mas Group companies as
a single exporter with respect to its dumping de terminations, it should have treated these three
companies as a single exporter for purposes of the pr ocedural requirements of the Agreement as well.
It follows that the single exporter should have been given "an opportunity to cure defects in submitted
information."184 Korea disagrees. According to Kor ea, since Tjiwi Kimia did not submit any
information to the KTC, there may be no violation of paragraph 6 vis-à-vis this company. Similarly,
Korea submits that the fact that the KTC treat ed the three Sinar Mas Group companies as single
exporter for purposes of its dumping margin determ inations did not alter the implications of
paragraph 6.
7.129 We note that paragraph 6 of Annex II reads:
"If evidence or information is not accepted , the supplying party should be informed
forthwith of the reasons therefore, and s hould have an opportunity to provide further
explanations within a reasonable period, due account being taken of the time-limits of
the investigation. If the explanations ar e considered by the authorities as not being

181 Exhibit KOR-8A at 39.
182 Exhibit KOR-44.
183 See, supra, note 96.
184 Second Written Submission of Indonesia, para. 52.

satisfactory, the reasons for the rejection of such evidence or information should be
given in any published determinations." (emphasis added)
7.130 Paragraph 6 provides that in cases where the IA declines to accept information submitted by
an interested party, that party has to be inform ed of the IA's decision and has to be given an
opportunity to provide further explanations regarding th at decision. If the IA finds such explanations
as being unsatisfactory, then the information can be disregarded, in which case the IA has to explain,
in its published determinations, why the information has been rejected.
7.131 In this case, it is undisputed that Tjiwi Kimia chose not to submit any information to the KTC.
Thus, no submission of information was made on be half of this company. Our understanding of the
obligation set out in paragraph 6 is that submission of information is a prerequisite to invoke this
paragraph. In other words, we consider that an interested party that chooses not to submit any
information to the IA cannot logically claim a violati on of paragraph 6. We are therefore of the view
that the KTC did not act inconsistently with Artic le 6.8 and paragraph 6 of Annex II in not giving
either Tjiwi Kimia or the Sinar Mas Group anot her opportunity to submit information which had
already been withheld from the KTC.
185
G. KTC'S ALLEGED FAILURE TO MAKE A FAIR COMPARISON BETWEEN NORMAL VALUE AND
EXPORT PRICE
1. Arguments of Parties
(a) Indonesia
7.132 Indonesia notes that Indah Kiat and Pindo Deli made their domestic sales through CMI
whereas they exported directly to their customer s in Korea. Indonesia asserts that CMI rendered
certain additional sales-related services in the Ind onesian market, which were not rendered in Indah
Kiat's and Pindo Deli's exports to Korea. According to Indonesia, the [[**]] 186 that CMI charged over
the prices of Indah Kiat and Pindo Deli in the Indon esian market was eviden ce of the fact that it
rendered additional marketing services. It follows that the KTC should have made an adjustment
under Article 2.4 of the Agreement for this diffe rence that affected price comparability in the
investigation at issue. By failing to do so, the KTC acted inconsistently with Article 2.4.
(b) Korea
7.133 Korea acknowledges that the Sinar Mas Group co mpanies argued during the investigation at
issue that additional sales-related activities undertaken by CMI in the Indonesian market deserved an
adjustment under Article 2.4 of the Agreement. According to Korea, however, the involvement of
CMI in the domestic sales did not automatically n ecessitate an adjustment under that article. Korea
asserts that the Sinar Mas Group never demonstrated that the involvement of CMI in the domestic
sales gave rise to a difference that affected price comparability as set out under Article 2.4.
2. Arguments of Third Parties
(a) United States
7.134 The United States submits that, contrary to Indonesia's assertion, not all differences
necessitate an adjustment under Article 2.4. For an adjustment to be made under Article 2.4 of the

185 Having concluded that paragraph 6 of Annex II could not possibly be invoked to submit information
on behalf of Tjiwi Kimia because this company had not submitted any information to the KTC, we need not, and
do not, discuss the specific issue of whether or not the fact that the KTC treated th e three Sinar Mas Group
companies as a single exporter changed this outcome.
186 Korea requests that the data in square brackets be treated as confidential.

Agreement for differences in levels of trade, it has to be shown that the alleged difference affects
price comparability.
3. Evaluation by the Panel
7.135 We note, at the outset, that parties agree that the levels of trade of the Sinar Mas Group
companies' domestic and export sales were the same in that the sales in both markets were made to the
same categories of customers. 187 We are therefore not faced with a claim regarding an alleged
difference in the levels of trade per se . Indonesia contends that CMI performed certain marketing
activities with respect to Indah Kiat's and Pindo Deli' s domestic sales, which were not carried out by
these companies in their exports to Korea. These ad ditional activities by CMI necessarily gave rise to
additional costs, which constituted a factor that a ffected price comparability within the meaning of
Article 2.4 of the Agreement. It follows that th e KTC should have made an adjustment with respect
to this difference. According to Indon esia, the fact that CMI charged a [[**]] 188 in the domestic sales
was evidence of this difference that affected price comparability.
7.136 Korea concedes that the Sinar Mas Group companies made a request for an adjustment under
Article 2.4 with respect to the alleged additi onal costs stemming from CMI's involvement in the
domestic sales. Korea asserts, however, that they never provided sufficient evidence to prove that
such involvement necessarily gave rise to additiona l costs that had to be removed in comparing the
normal values and export prices for these companies. According to Korea, the fact that these
expenses were incurred by CMI, rather than the exporters themselves, did not automatically mean that
they deserved an adjustment under Article 2.4.
7.137 We note that the relevant part of Article 2.4 of the Agreement provides:
"A fair comparison shall be made between the export price and the normal value.
This comparison shall be made at the same level of trade, normally at the ex-factory
level, and in respect of sales made at as nearly as possible the same time. Due
allowance shall be made in each case, on its merits, for differences which affect price
comparability, including differences in conditions a nd terms of sale, taxation, levels
of trade, quantities, physical characteristics, and any other differences which are also
demonstrated to affect price comparability." (footnote omitted, emphasis added)
7.138 We note that Article 2.4 of the Agreement, whic h generally requires the IA to carry out a fair
comparison between the normal value and the export pr ice, specifically mentions levels of trade as
one possible item for which an adjustment may be needed. In addition to providing a non-exhaustive
list of items for which adjustments may be needed, Article 2.4 also generally stipulates that necessary
adjustments have to be made with respect to a ny other factor which affects price comparability.
Consequently, to make a prima facie case, Indonesia has to demonstrate to the Panel that there was (1)
a difference (2) that affected pr ice comparability between the normal value and the export price for
which the KTC failed to make an adjustment.
7.139 We note that Indonesia cited two items as the fact ors that affected price comparability in the
investigation at issue: the [[**]] 189 charged by CMI in its sales to independent buyers in Indonesia
and the SG&A and interest expenses added by th e KTC in the constructed normal values for Indah
Kiat and Pindo Deli to account for CMI's expenses related to the sale of the subject product in
Indonesia.

187 See, for instance, Response of Indonesia to Ques tion 28(a) from the Panel Following the First
Meeting.
188 Korea requests that the data in square brackets be treated as confidential.
189 Ibid.

7.140 However, we do not understand Indonesia to assert that the KTC should have made an
adjustment for both of these two factors. Indonesia generally argues that the fact that CMI charged a

190 in its sales to independent buyers is evidence of the fact that there was a difference between
the normal value and the export price, which affected price comparability. 191 As to the quantification
of the adjustment, we note that the Sinar Mas Gr oup put forward a two-fold argument during the
investigation, as shown in the quotation in paragr aph 7.142 below: the Group argued that if the KTC
bases its normal value determinations on CMI's se lling prices submitted by the respondents, account
should be taken of CMI's [[**]] 192. If, however, the KTC constructs the normal values, then the
expenses added to the constructed normal values fo r CMI should be removed at the fair comparison
stage.
7.141 We recall that the KTC did not use CMI's selli ng prices, but decided to construct the normal
values for Indah Kiat and Pindo Deli. In its cons truction of these two normal values, the KTC added
[[**]]193 per cent for SG&A and [[**]] 194per cent for interest expenses for CMI. 195 Given that the
record clearly demonstrates that the KTC used co nstructed normal values fo r Indah Kiat and Pindo
Deli, we understand Indonesia to argue that the KTC should have made an adjustment to remove the
SG&A and the interest expenses added to account fo r CMI's involvement in the domestic sales of the
subject product. In other words, Indonesia's argu ment is that these two expenses added to the normal
values to account for CMI's costs should have been removed when comparing the normal values with
export prices in order to make a fair comparison as required under Article 2.4 of the Agreement. In
any event, we do not consider this distinction regarding the quantification of the adjustment to have an
important bearing on our legal reas oning with respect to this claim because, no matter on what basis
the claimed adjustment should have been calculated by the KTC, the issue is whether or not there was
in fact such a difference that affected price co mparability and for which an adjustment should have
been made. In other words, the issue is whether or not domestic sales of the subject product made
through CMI in Indonesia contained certain a dditional expenses stemming from the services rendered
by CMI with respect to domestic sales, which were not rendered in exports to Korea.
7.142 Turning to the record of the investigation at issue, as stated above, we note that in its
construction of the normal values for the thr ee Sinar Mas Group companies, the KTC added
additional SG&A and interest expenses for CMI's re-sales of the subject product. It is also clear that
the Sinar Mas Group requested that an adjustment be made to the normal values for Indah Kiat and
Pindo Deli to account for these expenses which, in their view, affected price comparability and that
the KTC declined that request. The Sinar Mas Group raised this issue at least three times during the
investigation. The letter by the Sinar Mas Group dated 9 April 2003 reads in relevant parts:
"[[**]]"
196
7.143 The Sinar Mas Group's letter dated 4 July 2003 reads in pertinent parts:
"[[**]]"197
7.144 The Sinar Mas Group's letter dated 12 September 2003 reads in relevant parts:
"[[**]]"198

190 Ibid.
191 Response of Indonesia to Question 16 from the Panel Following the Second Meeting.
192 Korea requests that the data in square brackets be treated as confidential.
193 Ibid.
194 Ibid.
195 These two figures were subsequently corrected to [[**]] and [[**]] per cent (Korea requests that the
data in square brackets be treated as confidential) for the respective companies. See, Exhibit KOR- 54.
196 Korea requests that the data in square brackets be treated as confidential.
197Ibid.

7.145 In response to these requests by the Sinar Mas Group, the KTC's Final Dumping Report reads
in pertinent parts:
"7) Adjustments for the Difference in the Level of Trade
Opinion of the Respondents
Respondents requested to take into consideration the difference in the level of trade in
determining the normal value, as the products are sold to independent domestic
merchants in the domestic market through CMI, the sales company, while the exports
to Korea are directly made to Korean importers, thus making the level of trade
different for the domestic sale in Indonesia and the exports to Korea.
Review Opinion of the Office of Investigation

First, in order for the difference in the level of trade to be recognized as an adjustment
factor of the normal value, the domestic sal e in Indonesia must have one more level
of trade than exports. Second, such differe nce in the level of trade must affect the
difference between the export price to Korea and the domestic sales price.
 - CMI, the sales company, is an affiliated company of Respondent, and thus,
forms one economic entity with Respondent . Therefore, the domestic sale in
Indonesia does not have one more level of trade than exports.
 - Further, for fair comparison, Respondents are required to establish the
impact of such difference in the level of trade on the prices of exports and domestic
sales. However, Respondents failed to submit such evidence to the Office of
Investigation during the on the spot investig ation, thereby failing to prove the impact
of the difference in the level of trade on the price of exports to Korea and the
domestic sales price.
 - Therefore, for the above reasons, Respondents' arguments are not
acceptable."
199
7.146 The crux of Indonesia's claim, and the main line of reasoning put forward by the Sinar Mas
Group in the course of the investigation at issue, is that the involvement of CMI in the domestic sales
chain necessarily meant that an adjustment should ha ve been made to make a fair comparison. The
fact that CMI charged a [[**]] 200 over the prices of Indah Kiat and Pindo Deli is, in Indonesia's view,
evidence of this fact. Evidence on which Indonesia relies in this regard has also to do with the
involvement of CMI in domestic sales. For instance, Indonesia refers to the fact that CMI had to pay
its employees who were carrying out sales-related work in addition to the work done by the
employees of Indah Kiat and Pindo Deli. Indon esia also mentions that there were two price
negotiations in domestic sales: One between Indah Kiat or Pindo Deli and CMI and the other between
CMI and independent buyers. Consequently, two set s of sales-related documents were issued with
respect to domestic sales.201 That is why CMI charged a [[**]]202 and why the KTC added SG&A and
interest expenses for CMI in the constructed normal values for Indah Kiat and Pindo Deli.

198 Ibid.
199 Exhibit KOR-14A at 19.
200 Korea requests that the data in square brackets be treated as confidential.
201 Response of Indonesia to Question 16 from the Panel Following the Second Meeting.
202 Korea requests that the data in square brackets be treated as confidential.

7.147 We note that in a given investigation there ma y be differences with respect to sales-related
expenses in the export and domestic markets for a vari ety of reasons. It may also be the case that
these differences may affect price comparability. If so , the IA has to make an adjustment to account
for the effect of such differences in order to en sure a fair comparison between the normal value and
the export price, consistently with Article 2.4 of the Agreement. This may be the case irrespective of
whether or not there is a trading company, such as CMI in this investigation, involved in the
distribution of the subject product either in the export or the domestic market. In other words, the fact
that a trading company handles domestic or export sales of the subject product does not in and of
itself mean that there is a difference that affects pr ice comparability and that an adjustment has to be
made under Article 2.4. The interested party claimi ng such an adjustment has to demonstrate that the
involvement of the trading company gives rise to a difference that affects price comparability. We
note that, just as the Sinar Mas Group did during th e investigation at issue, in these proceedings
Indonesia repeatedly referred to the costs incurred by CMI as the trading company handling domestic
sales of Indah Kiat and Pindo Deli. This, in our view, is not enough to demonstrate that CMI's
involvement created a difference between the normal values and the export prices of Indah Kiat and
Pindo Deli which affected price comparability. We are not convinced that there were sales-related
services rendered by CMI with respect to domestic sa les of Indah Kiat's and Pindo Deli's products in
the Indonesian market which were not rendered in these two companies' export sales to Korea.
Indonesia has failed to make a prima facie case in this regard. We therefore reject Indonesia's claim.
H.
KTC'S TREATMENT OF INDAH KIAT, PINDO DELI AND TJIWI KIMIA AS A SINGLE EXPORTER
1. Arguments of Parties
(a) Indonesia
7.148 Indonesia notes that Article 6.10 of the Agreement requires that individual margins of
dumping be calculated for each exporter involved in an anti-dumping investigation. Indah Kiat, Pindo
Deli and Tjiwi Kimia are separate legal entities under Indonesian law. Following the mandate of
Article 6.10, therefore, the KTC should have treated them separately in its dumping determinations.
According to Indonesia, no provision in the Agreement permits an IA to treat separate legal entities as
a single exporter and thereby to assign a single dumping margin to them. Had the KTC treated these
three companies separately, there would have been no finding of dumping with respect to Indah Kiat,
the largest Indonesian exporter subject to the inv estigation. It follows that the KTC violated
Article 6.10 of the Agreement by treating these th ree companies as a single exporter for purposes of
its dumping margin calculations.
7.149 Assuming that Article 6.10 allows an IA to treat separate legal entities as a single exporter for
purposes of its dumping determinations, Indonesia subm its that the KTC failed to make the necessary
determinations in the investigation at issue which w ould have justified such treatment. In the absence
of evidence indicating actual coordination with respect to both domestic sales and exports to Korea,
the existence of overlapping management or shar eholding between individual companies cannot be
sufficient ground to treat them as a single exporter.
7.150 Indonesia argues that the KTC also violated Article 9.3 of the Agreement by treating the three
Sinar Mas Group companies as a single exporter because the calculation of the single margin of
dumping subjected Indah Kiat to the anti-dumping duty at issue although that company's preliminary
margin was negative.
(b) Korea
7.151 Korea asserts that Article 6.10 does not require the calculation of a separate dumping margin
for each individual corporate entity. It requires th at an individual dumping margin be calculated for
each known exporter or producer. There is no definiti on of the terms "exporter" or "producer" in the

Agreement. In Korea's view, therefore, the IA can interpret this provision as allowing the treatment
of separate corporate entities that function as a single economic unit as a single exporter. Korea
characterizes this as a functional definition of th e term "exporter" under Article 6.10. Korea argues
that the KTC found important management links that justified treating these three Indonesian
companies as a single exporter.
2. Arguments of Third Parties
(a) China
7.152 Although China disagrees with Korea's propositio n that the terms "corporation" on the one
hand and "exporter" or "producer" on the other have been used in such a way that they cannot
substitute one another in the context of the Ag reement, it nevertheless agrees that in certain
circumstances treating different corporations as a single entity for purposes of dumping margin
determinations in an anti-dumping investigation ma y be allowed. China also finds support for its
proposition in Article 9.5 of the Agreement which allows the IA not to calculate an individual
dumping margin for a new exporter if that exporter is affiliated with another exporter that is already
subject to an anti-dumping measure.
(b) European Communities
7.153 The European Communities submits that the terms "exporter" and "producer" used in
Article 6.10 have not been directly defined in the Agreement. The IA, therefore, has certain
discretion in interpreting these terms by taki ng due account of the economic circumstances
surrounding a given anti-dumping investigation. Acco rding to the European Communities, it is not
inconsistent with the text, or the object and purpose, of Article 6.10 to treat separate corporations that
are related, as a single entity for purposes of dumping determinations in an anti-dumping
investigation. The European Communities finds support for this proposition in Article 9.5 of the
Agreement. According to the Eur opean Communities, if Article 9.5 requires that account be taken of
the relationship between foreign exporters in the context of a newcomer's review, the same should
hold true under Article 6.10 with respect to the initial investigation.
(c) United States
7.154 The United States argues that Article 6.10 does no t disallow the treatment of more than one
corporation as a single economic entity for purpos es of dumping margin calculations in an anti-
dumping investigation. In the view of the Unite d States, the words "exporter" and "producer" which
are used in Article 6.10, and not defined in the Ag reement, should be interpre ted by reference to the
commercial functions of the companies rather than their corporate structure.
3. Evaluation by the Panel
7.155 Indonesia asserts that Article 6.10 of the Agreement precludes the treatment of separate legal
entities in an anti-dumping investigation as a single e xporter and the assignment of a single margin of
dumping to them. Assuming arguendo that Article 6.10 allows a Member to treat separate legal
entities as a single exporter for purposes of dumping ma rgin calculations, Indonesia submits in the
alternative that such treatment is possible only if there is evidence of actual coordination in the
companies' domestic sales and their export sales to the importing Member, and that the KTC did not
find any such evidence in the inves tigation at issue. Korea disagrees and contends that Article 6.10
requires that an individual dumping margin be calculated for each individual exporter, not for each
independent corporate entity. It follows that sev eral companies that act as a single economic entity
may be treated as a single exporter.
7.156 We note that Article 6.10 provides:

"The authorities shall, as a rule, determine an individual margin of dumping for each
known exporter or producer concerned of the product under investigation. In cases
where the number of exporters, producers, im porters or types of products involved is
so large as to make such a determination impracticable, the authorities may limit their
examination either to a reasonable number of interested parties or products by using
samples which are statistically valid on the basis of information available to the
authorities at the time of the selection, or to the largest percentage of the volume of
the exports from the country in question which can reasonably be investigated."
(emphasis added)
7.157 The claim at issue concerns the first sentence of Article 6.10. The issue here is whether, and
if so under what circumstances, Article 6.10 perm its an IA to treat separate legal entities, which
export the subject product to the importing Member and which are in certain ways related to one
another, as a single exporter and to determine an indi vidual margin of dumping for that exporter. We
note that Article 6.10 mentions "exporters" and "producers" of the subject product and requires that an
individual margin be calculated for each of them. It does not, however, define these two words. After
setting out this general rule, Artic le 6.10 then goes on to create an exception, i.e. sampling, which
allows the IA, under certain circumstances, to limit its examination to a certain number of exporters or
producers and to assign the resulting margin of dump ing to unexamined exporters or producers.
Nowhere in the text of Article 6.10, however, can we find any specific guidance as to whether each
separate legal entity must be treated as a distinct exporter or producer.
7.158 Turning to the context of Article 6.10, we find important guidance in Article 9.5 of the
Agreement. Article 9.5 reads in pertinent parts:
"If a product is subject to anti-dumping duties in an importing Member, the
authorities shall promptly carry out a review for the purpose of determining
individual margins of dumping for any exporters or producers in the exporting
country in question who have not expor ted the product to the importing Member
during the period of investigation, provid ed that these exporters or producers can
show that they are not related to any of the exporters or producers in the exporting
country who are subject to the anti-dumping duties on the product . . . . ." (emphasis
added)
7.159 Article 9.5 requires that the IA determine indi vidual margins for exporters and producers who
did not export during the POI. Article 9.5 further provides, however, that the IA is not required to
calculate an individual dumping margin for a newcom er who is related to an exporter subject to an
existing anti-dumping duty. Thus, in the context of new shipper reviews, the mere existence of a
relationship to an exporter or producer already subject to anti-dumping duties is sufficient to
disqualify an entity from entitlement to an individual margin of dumping. The logic of Article 9.5
would appear to be that to allow related compan ies to obtain individual rates could undermine the
efficiency of the existing duties. We recognize that Article 9.5 applies only after
 a duty has been put
in place, and that the situation in an investig ation might well justify a different approach.
Nevertheless, Article 9.5 as contex t strongly suggests that the term "exporter" in Article 6.10 should
not be read in a way to require an individual margin of dumping for each independent legal entity
under all circumstances.
7.160 Several other provisions of the Agreement, a lthough less directly relevant, nevertheless
confirm that the Agreement recognizes that relationships between legally distinct entities may impact
behaviour and are thus relevant to the applicati on of the rules of the Agreement. For example,
Article 2.3 allows the IA to disregard the export price between affiliated parties in cases where there
is reason to believe that, because of an affiliati on between the exporter and the importer or a third
party, the export price reported to the IA is not reliable. In these cases, the IA may base its export
price determination on the price at which the subject product is first resold to an independent buyer in

the importing Member. Similarly, Article 2.1 of the Agreement allows a Member to exclude sales
"not in the ordinary course of trade" when de termining normal value, and the Appellate Body has
made clear that sales might not be in the ordinary course of trade by reason of affiliation.203
7.161 Thus, we consider that, when read in cont ext, Article 6.10 does not necessarily preclude
treating distinct legal entities as a single exporter or producer for purposes of dumping determinations
in anti-dumping investigations. Having said that, however, we do not consider that Article 6.10
provide the IA with unlimited discretion to do so. While Article 6.10 does not by its terms require
that each separate legal entity be treated as a single "exporter" or "producer", neither does it allow a
Member to treat distinct legal entities as a single ex porter or producer without justification. Whether
or not the circumstances of a given investigation justify such treatment must be determined on the
basis of the record of that investigation. In our view, in order to properly treat multiple companies as
a single exporter or producer in the context of its du mping determinations in an investigation, the IA
has to determine that these companies are in a relationship close enough to support that treatment.
7.162 We note Indonesia's contention that a necessary el ement in this regard is evidence indicating
actual coordination in the domestic sales of the companies in question and their exports to the
importing Member in question, a contention disputed by Korea. We recall, however, the standard of
review that we are required to apply in respect of questions of law ( supra, paras.7.1-7.5). Although
evidence of actual coordination of domestic or expo rt sales might well be a highly relevant element
for consideration in determining whether separat e entities may be treated as a single exporter or
producer, we do not consider Indonesia's interpreta tion of Article 6.10 as requiring such evidence to
be the only permissible interpretation of that Article. Rather, we consider that Article 6.10, read in its
context, and in particular with Ar ticle 9.5, could permissibly be inte rpreted to allow such treatment in
other circumstances where the structural and co mmercial relationship between the companies in
question is sufficiently close to be considered as a single exporter or producer.
7.163 With these considerations in mind, we now tu rn to the facts before the KTC in this
investigation. We note that, in its prelimin ary determination, the KTC rejected the domestic
industry's request that the three Sinar Mas Group comp anies be treated as a single exporter and that a
single margin of dumping be assigned to them. 204 At the final stage of the investigation, however, the
KTC did treat them as a single exporter or producer and assigned a single margin to them. The KTC
explained the reasons for its decision in its Final Dumping Report, which states in pertinent parts:
"Upon re-examination, based on the followi ng grounds, the Office of Investigation
calculated a single dumping margin for Pindo Deli, Indah Kiat and Tjiwi Kimia by
considering them as one entity.
- Ekapersada, the subsidiary of APP, owns [[**]]%, [[**]]% and [[**]]% of the
shares of Pindo Deli, Indah Kiat and Tjiwi Kimia, respectively.
205
- Among the commissioners of Pindo Deli [[**]], Indah Kiat [[**]] and Tjiwi Kimia
[[**]], [[**]] commissioners of Indah Kiat and Tjiwi Kimia and [[**]] commissioners
of Pindo Deli and Tjiwi Kimia are identical persons, and [[**]] person serves as a
commissioner of all three companies.206
- Among the directors of Pindo Deli [[**]], Indah Kiat [[**]] and Tjiwi Kimia [[**]],
[**]] directors of Indah Kiat and Tjiwi Kimia, [[**]] directors of Pindo Deli and

203 Appellate Body Report, US – Hot-Rolled Steel, supra, note 94, para. 143.
204 Preliminary Dumping Report (Exhibit KOR-8B at 12).
205 Korea requests that the data in square brackets be treated as confidential.
206 Ibid.

Tjiwi Kimia and [[**]] directors of Pindo De li and Indah Kiat are identical persons,
and [[**]] persons serve as directors of all three companies.
207
- During the POI of the dumping margins, Pindo Deli sold uncoated woodfree paper
to Indah Kiat ([[**]] tons) and Tjiwi Ki mia ([[**]] tons) through its affiliated
company, CMI.208
- Each of Pindo Deli, Indah Kiat and Tjiwi Kimia manufactures and sells the product
under investigation."209
7.164 We note that the above-quoted part of the r ecord, where the KTC discu sses the basis of its
decision to treat the three Sinar Mas Group compani es as a single exporter or producer, demonstrates
that one parent company, i.e. Ekapersada, owns the [[**]] of the shares of the three companies. This,
in our view, shows that the parent company had a considerable controlling power over the operations
of its three subsidiaries. Further, we note that there was a significant commonality with respect to the
management of the three companies. The record shows that [[**]] commissioners of Indah Kiat and
Tjiwi Kimia and [[**]] commissioners of Pindo Deli and Tjiwi Kimia were the same persons and that
[[**]] person served as a commissioner of all three companies. Furthermore, [[**]] directors of Indah
Kiat and Tjiwi Kimia, [[**]] directors of Pindo De li and Tjiwi Kimia and [[**]] directors of Pindo
Deli and Indah Kiat were the same persons, and [[**]] persons served as directors of all three
companies.210
7.165 We consider the commonality of management among these three companies, coupled with the
fact that they were all owned by the same parent company, to be indications of a close legal and
commercial relationship between these three compani es. Given these similarities, one might, in our
view, expect that commercial decisions for the thr ee companies could be made in substantial part by
the same closely interlocked group of individuals, and the management of all three companies could
ultimately be answerable to their majority share holder Ekapersada. We note that the record also
indicates that one of these companies, Pindo Deli, sold the subject product to the other two during the
POI. This also indicates that these companies could harmonize their commercial activities to fulfil
common corporate objectives. The ability and willi ngness of the three companies to shift products
among themselves is, in our view, of some importa nce to the consideration of whether the three
companies should be treated as a single exporter and subject to a single margin determination.
7.166 In addition to these factors specifically referred to by the KTC in the above-quoted part of the
Final Dumping Report, the record also shows that CMI acted practically as the sole channel through
which all three companies made their domestic sales in Indonesia. We note the following
determinations that the KTC made regarding the relationship between the two Sinar Mas Group
companies which cooperated with the KTC in the investigation at issue on the one hand and CMI on
the other:
"In accordance with Article 23, Paragraph 5 of the Decree, Respondent [Pindo Deli]
and CMI can be considered as one econom ic entity, as one company controls the
other company legally or practically for the following reasons: (i) [[**]] shareholders
of PT Sinar Mas Tunggal, the parent company of CMI, are directors of APP, the
holding company of Pindo Deli
; (ii) Pindo Deli controls the sales price of CMI (B-6
1 b of the response: "they cannot sell lower price without Pindo Deli's authority");
(iii) they are described as affiliated companies on the annual report; and (iv)

207 Ibid.
208 Ibid.
209 Exhibit KOR-14A at 14-15. We note that the KTC's Final Determination repeats the same
determination. See, Exhibit KOR-15A at 4.
210 Korea requests that the data in square brackets be treated as confidential.

Respondent makes domestic sales of most of the like product through CMI ([[**]]%
for PPC and [[**]] for WF).
211 Therefore, the argument of Respondent cannot be
accepted."212 (emphasis added)
"In accordance with Article 23, Paragraph 5 of the Decree, Respondent [Indah Kiat]
and CMI can be considered as one econom ic entity, as one company controls the
other company legally or practically for the following reasons: (i) [[**]] 213
shareholders of PT Sinar Mas Tunggal, the parent company of CMI, are directors of
APP, the holding company of Indah Kiat
; (ii) Indah Kiat controls the sales price of
CMI (B-6 1 b of the response: "they cannot sell lower price without Pindo Deli's
authority"); (iii) they are described as affiliated companies on the annual report; and
(iv) Respondent makes domestic sales of all of the like product through CMI.
Therefore, the argument of Respondent cannot be accepted."
214 (emphasis added)
7.167 Although the foregoing discussion by the KTC focused on the relationship between Indah
Kiat and Pindo Deli, respectively, with CMI, rather than to the direct relationship between Indah Kiat
and Pindo Deli directly, we find the determination by the KTC and the considerations underlying it to
be relevant to our evaluation of the claim at issue. In terms of the determination itself, the conclusion
that Indah Kiat and Pindo Deli were each "one ec onomic entity" with the same third company is
obviously relevant to the relationship between the former two companies. This determination is based
on evidence showing that [[**]] per cent of Indah Ki at’s and [[**]] per cent of Pindo Deli’s domestic
sales of the subject product were made through CMI. 215 Furthermore, we note that CMI also made
Tjiwi Kimia's sales in the Indonesian market.216 We also note that the record shows that CMI charged
the same [[**]], on its sales of the products produced by Indah Kiat and Pindo Deli. 217 These facts
are, in our view, indicative of a close commercial relationship among the three companies.218
7.168 In our view, bearing in mind our standard of review ( supra, paras. 7.1-7.5), the fact that the
three Sinar Mas Group companies made almost all their domestic sales through CMI, coupled with
the commonality regarding shareholdings and manage ment and the existence of cross-sales of the
subject product among the three companies, is an adequate basis for the KTC's decision to treat the
three Sinar Mas Group companies as a single exporter or producer. We therefore reject Indonesia's
claim that Korea acted inconsistently with Article 6.10 of the Agreement.
7.169 We note Indonesia's argument that the KTC's decision to treat the three Sinar Mas Group
companies as a single exporter also violated Artic le 9.3 of the Agreement because it subjected Indah
Kiat to an anti-dumping duty of 8.22 per cen t, although the KTC had calculated a negative
preliminary dumping margin of 0.52 for this company.
7.170 Article 9.3 provides:
"The amount of the anti-dumping duty shall not exceed the margin of dumping as
established under Article 2."
7.171 We note that Article 9.3 clearly prohibits the imposition of a duty in excess of the margin of
dumping calculated in an investigation. It does not, however, mention a distinction between an

211 Ibid.
212 Preliminary Dumping Report (Exhibit KOR-8A at 13).
213 Korea requests that the data in square brackets be treated as confidential.
214 Preliminary Dumping Report (Exhibit KOR-8A at 24).
215 We recall that the third Sinar Mas Group company, Tjiwi Kimia, did not submit any information to
the KTC regarding its sales of the subject product.
216 See, Indah Kiat's Response to the KTC's Questionnaire (Exhibit KOR-20 at 2).
217 Exhibit KOR-20 at 4; Exhibit KOR-21 at 5.
218 Korea requests that the data in square brackets be treated as confidential.

individual margin for separate corporate entities and a single margin calculated for a group of them.
We recall our finding above that the KTC did not act inconsistently with Article 6.10 of the
Agreement by treating the three Sinar Mas Group companies as a single exporter or producer and
assigning a single margin of dumping to them in the inv estigation at issue. It follows that as long as
the single anti-dumping duty imposed in this investigation was not higher than the single margin
calculated for the three Indonesian co mpanies, there can be no violation of Article 9.3. We note that
Indonesia does not argue a violation of Article 9.3 regarding the duty imposed for the single exporter
in this investigation. We do not therefore agr ee with Indonesia's argument that Article 9.3 was
violated because the single margin imposed on the single entity was higher than the individual margin
calculated for Indah Kiat in the KTC's preliminary dumping determinations, and reject it.
I.
KTC'S ALLEGED FAILURE TO TERMINATE THE INVESTIGATION WITH RESPECT TO INDAH KIAT
1. Arguments of Parties
(a) Indonesia
7.172 Indonesia argues that the KTC violated Article 5.8 of the Agreement by not terminating the
investigation with respect to Indah Kiat for whic h a negative dumping margin had been calculated in
the preliminary determinations.
(b) Korea
7.173 Korea argues that the KTC's preliminary determ ination stated that the KTC was reviewing
certain aspects of its preliminary calculations, in pa rticular its decision to calculate separate dumping
margins for Indah Kiat, Pindo Deli and Tjiwi Kimia. Therefore, the KTC was not satisfied at the time
of its preliminary determination that there was no dumping. In fact, the KTC treated the three Sinar
Mas Group companies as a single exporter for purposes of its final determination and calculated a
single margin for the three of them. There could th erefore be no violation of Article 5.8 with respect
to Indah Kiat in the investigation at issue because the KTC did not make individual dumping margin
calculations in its final determinations. The KTC ne ver determined that the dumping margin for this
single entity was de minimis.
2. Arguments of Third Parties
(a) European Communities
7.174 The European Communities contends that Article 5.8 does not require that the investigation
be terminated with respect to an exporter for whom a de minimis dumping margin has been calculated.
According to the European Communities, Article 5. 8 requires such termination when the margin for
the country as a whole is de minimis . The KTC, therefore, did not err in this investigation by not
terminating the investigation with respect to Inda h Kiat on the grounds that the preliminary dumping
margin calculated for this company was de minimis.
(b) United States
7.175 According to the United States, the obligation to terminate the investigation pursuant to
Article 5.8 where the margin of dumping is de minimis only applies to final, as opposed to
preliminary, determinations. Given that the Agreement contains no requirement to make a
preliminary determination, Indonesia's misinterpretation of Article 5.8 becomes more apparent.

3. Evaluation by the Panel
7.176 We recall our finding above (paras. 7.168-7.171) that the KTC did not act inconsistently with
Articles 6.10 and 9.3 of the Agreement with respect to treating the three Sinar Mas Group companies
as a single exporter for purposes of its dumping determinations in the investigation at issue. That is,
we found that the KTC properly treated them as one exporter and assigned one margin of dumping to
them.
7.177 Further, we note the following statement from I ndonesia with regard to the nature of this
claim:
"Indonesia agrees that Article 5.8 applies to final, as opposed to preliminary,
determinations of dumping. Thus, its clai m that the KTC should have terminated the
investigation with respect to Indah Kiat is dependent on its claims that the KTC
improperly “collapsed” Indah Kiat into a “single economic entity” and failed to
calculate an individual margin of dumping for Indah Kiat under Article 6.10 of the
AD Agreement. If the Panel finds that the KTC improperly “collapsed” these
exporters and hence improperly failed to cal culate an individual margin of dumping
for Indah Kiat, Indonesia requests that the Pa nel rule on its claims under Article 5.8,
as well as its related claims under Articl es 3.1, 3.2 and 3.5 of the Agreement
described in paragraph 196 of its first written submission."
219
7.178 We note that Indonesia submits that the Panel should address this claim if it finds that treating
the three Sinar Mas Group companies as a single expor ter was WTO-inconsistent. Given that we did
not find that treating the three Sinar Mas Group companies as a single exporter was WTO-inconsistent
and taking into consideration Indo nesia's above-quoted statement, we need not, and do not, make any
finding on this claim.
J. KTC'S ALLEGED FAILURE TO ABIDE BY THE DI SCLOSURE OBLIGATIONS CONTAINED IN
ARTICLES 6.4, 6.7, 6.9 AND 12.2 OF THE AGREEMENT WITH RESPECT TO ITS DUMPING
DETERMINATIONS
1. Arguments of Parties
(a) Indonesia
7.179 Indonesia submits that the KTC's failure to discl ose the results of the verification violated
Article 6.7 of the Agreement. The KTC did not make such disclosure even though this was expressly
requested by Indah Kiat and Pindo Deli. Indonesia acknowledges that the KTC officials made an oral
disclosure regarding the results of the verificati on. However, Indonesia considers that an oral
disclosure cannot satisfy the requirements of Article 6.7. Furthermore, Indonesia asserts that the
contents of the mentioned oral disclosure, togeth er with the subsequent written disclosures in the
KTC's reports, fell short of disclosing all the verification results.
7.180 Indonesia also argues that the KTC's failure to adequately disclose its method of calculating
the constructed normal values for Indah Kiat and Pin do Deli violated Articles 6.4, 6.9 and 12.2 of the
Agreement.
(b) Korea
7.181 Korea contends that the KTC investigators prepared a verification report for the KTC's
internal use. This report was not released to any of the interested parties in the investigation. During

219 Response of Indonesia to Question 48 from the Panel Following the First Meeting.

the disclosure meeting held on 4 April 2003, the KTC o fficials orally informed interested parties of
the verification results. Furthermore, various reports prepared by the KTC and disclosed to the parties
in connection with the KTC's preliminary determ inations also described the defects found during
verification. According to Korea, these disclosures were sufficient to satisfy the obligation contained
in Article 6.7, which does not necessarily require the disclosure of a written verification report.
7.182 With respect to the alleged violations of Articles 6.4, 6.9 and 12.2 of the Agreement, Korea
argues that the reports released in connection with the KTC's preliminary and final determinations in
the investigation at issue were su fficient to inform the Indonesian exporters of all relevant issues
relating to the calculation of the normal values fo r Indah Kiat and Pindo Deli. Korea contends,
however, that confidential information was ex cluded from the scope of these disclosures in
accordance with Article 6.5 of the Agreement.
2. Evaluation by the Panel
(a) Alleged Violation of Article 6.7 of the Agreement
7.183 We commence our evaluation of Indonesia's cl aim with the text of Article 6.7 of the
Agreement. That article provides in relevant part:
"Subject to the requirement to protect conf idential information, the authorities shall
make the results of any such investigati ons available, 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." (emphasis added)
7.184 We note that Article 6.7 requires the IA to inform the investigated exporters of the
verification results. The text provides that such disclosure can be made either by making the results
available so that the exporters can see them if they so wish or through the final disclosure under
Article 6.9 before a final decision is taken in the investigation.
7.185 Indonesia asserts that there was no adequate di sclosure of the verification results to the
investigated Indonesian exporters, i.e. Indah Kiat and Pindo Deli. Indonesia submits that the person
acting on behalf of Indah Kiat and Pindo Deli in the investigation at issue specifically requested to see
the verification results, but that such request was not granted. Korea submits that the representatives
of the Indonesian exporters were informed orally of the verification results and then through the
disclosure of certain reports prepared by the KTC, which also included the verification results. In
Korea's view, the Agreement does not necessaril y require a written disclosure regarding the
verification results. Korea submits that this oral briefing met the requirements of Article 6.7 in terms
of informing the Indonesian companies about the verification results.
7.186 We note that the record indicates that the KTC organized a disclosure meeting on
4 April 2003, immediately following the verificati on. The representatives of the Sinar Mas Group
participated in this meeting. Parties agree that during this meeting the KTC investigators informed
the Sinar Mas Group of the fact that the KTC woul d base its normal value determinations for Indah
Kiat and Pindo Deli on facts available on the grounds that they failed to provide CMI's financial
statements during verification.
7.187 With regard to the rest of the disclosures th at may have been made during this meeting,
however, parties disagree. Indon esia asserts that nothing else was communicated to the Sinar Mas
Group in that meeting, whereas Korea argues that a number of other issues were also brought to the
attention of the Sinar Mas Group. Korea submitted an affidavit
220 to the Panel in which a KTC
official testified that information relating to expo rt price determinations as well as adjustments to the

220 Exhibit KOR-44.

normal values and export prices for Indah Kiat and Pindo Deli was also conveyed in this meeting.
The affidavit also states that the fact that these data were successfully verified was also explained in
the meeting. Indonesia disagrees with these asser tions. We note that apart from submitting the
mentioned affidavit, Korea has not referred to any evidence on the record in this regard. We recall
that a party making a factual assertion has the burde n to prove it. Korea has failed to prove its
assertion that issues other than the KTC's decision to r esort to facts available for Indah Kiat and Pindo
Deli were also brought to the attention of the Sinar Mas Group during the 4 April meeting. We
therefore consider that the disclosure made during the mentioned meeting was limited to the fact that
the KTC would base its normal value determinations for Indah Kiat and Pindo Deli on facts available
on the grounds that they failed to provide CMI's financial statements during verification.
7.188 Next, we shall address Korea's allegation that certain documents sent by the KTC also
informed the Sinar Mas Group of the verification resu lts. In this context, we shall first address the
issue of whether or not Article 6.7 requires that the disclosure regarding the verification results be
made in a written format. Since Indonesia submits that an oral disclosure would not satisfy
Article 6.7
221, we understand Indonesia to argue that a written disclosure is necessary. Korea
disagrees with Indonesia in this regard. Accord ing to Korea, Article 6.7 does not require written
disclosure.222 We agree with Korea that Article 6.7 does not require written disclosure. It requires
that the verification results be disclosed to the inv estigated exporters without specifying the format in
which such disclosure is to be made. We note that when they intended that written format be used
with respect to certain communications in the course of an anti-dumping investigation, drafters stated
it clearly in the Agreement. For instance, Article 5.1 of the Agreement provides that the application
for the initiation of an investigation has to be made in writing. Similarly, Article 6.3 provides that
oral information submitted to the IA by an inter ested party may only be taken into account if it is
subsequently reproduced in writing. These examples support our interpretation that Article 6.7 does
not require that disclosure be a written disclosure. As long as it can be proved that the substantive
requirements of that provision have been fulfilled, the format of the disclosure would not matter.
7.189 We now turn to the contents of the documents mentioned by Korea to examine whether they
informed the Sinar Mas Group of the verification results . We note that in this regard Korea refers to
the Preliminary Dumping Report and the Prelimin ary Investigation Report prepared by the KTC. 223
The Preliminary Dumping Report states in pertinent parts:
"Although the Office of Investigation request ed for the financial statements of CMI
during the on the spot investigation, R espondent refused to provide the financial
statements for reasons that CMI and Res pondent were separate legal entities and that
Respondent could not control CMI. Therefor e, the Office of Investigation calculated
the sales cost of CMI on the basis of the f acts available, as it was not able to verify
CMI's resale data against the financia l statements, related accounting books and
records and substantiating evidence thereon."224
7.190 The Preliminary Investigation Report reads in pertinent parts:
"However, during the on the spot investiga tion, Respondent failed to submit relevant
data, such as the financial statements, etc. concerning sales made through its affiliated
company, CMI (PT, Cagrawala Mega Indah). Therefore, the Office of Investigation
calculated the normal value on the basis of the facts available and calculated the

221 Response of Indonesia to Question 40 from the Panel Following the First Meeting.
222 First Written Submission of Korea, para. 155.
223 First Written Submission of Korea, footnote 180.
224 Preliminary Dumping Report (Exhibit KOR-8B at 12). The quoted part of the report addresses the
arguments of Pindo Deli. On page 23, the report contains exactly the same statement with respect to Indah Kiat.

export price based on the [sic.] data which were submitted by Respondent and
verified during the on the spot investigation."
225
7.191 We note that these reports clearly disclose that the respondent Indonesian exporters failed to
provide CMI's financial statements during verifica tion and that the KTC therefore based their normal
values on facts available. However, the reports c ontain no clarification with respect to the other
aspects of the verification and hence do not add much to the content of the oral briefing that took
place on 4 April 2003.
7.192 On the basis of the above explanations, it beco mes factually clear that the contents of the
disclosure regarding verification made through the oral briefing during the April 4 meeting and the
KTC's reports issued following the verification were limited to the fact that the Sinar Mas Group
failed to submit CMI's financial statements during ve rification and that the KTC decided to use facts
available with respect to Indah Kiat and Pindo De li. The issue is whether or not this limited
disclosure was enough to satisfy the requirements of Article 6.7. In our view, the purpose of the
disclosure requirement under Article 6.7 is to make su re 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 th e verification, including a description of the
information which was not verified as well as of info rmation which was verified successfully. This is
because, in our view, information which was verifi ed successfully, just as information which was not
verified, could well be relevant to the presentation of the interested parties' cases.
7.193 On the basis of these considerations, we find th at in this case the KTC's disclosure of the
verification results vis-à-vis the Sinar Mas Group fell short of meeting this standard. It did not inform
the two Sinar Mas Group companies of the verificati on results in a manner that would allow them to
properly prepare their case for the rest of the investigation. We therefore conclude that the KTC acted
inconsistently with Article 6.7 of the Agreement in this regard.
(b) Alleged Violations of Articles 6.4, 6.9 and 12.2 of the Agreement
7.194 Indonesia argues that the KTC violated Articles 6.4, 6.9 and 12.2 of the Agreement by failing
to disclose (1) why the reported CMI data were not accepted, (2) the reasoning regarding which one
of the methods provided for under Article 2.2 of the Agreement was used in determining normal
values for Indah Kiat and Pindo Deli, and (3) on what basis and how, in terms of its mechanics, it
calculated the constructed normal values for Indah Kiat and Pindo Deli. Korea disagrees and submits
that the reports released by the KTC in the course of the investigation at issue were sufficient to
inform the Indonesian exporters of all the issues identified by Indonesia.
(i) Article 6.4
7.195 Article 6.4 reads:
"The authorities shall whenever practicable provide timely opportunities for all
interested parties to see all information that is relevant to the presentation of their
cases, that is not confidential as defined in paragraph 5, and that is used by the
authorities in an anti-dumping investigation, and to prepare presentations on the basis
of this information."

225 Preliminary Investigation Report (Exhibit KOR-9A at 11). The quoted part of the report addresses
the arguments of Pindo Deli. On page 16, the report contains exactly the same statement with respect to Indah
Kiat, except the inclusion of CMI's full name.

7.196 We note that Article 6.4 addresses the right of interested parties in an anti-dumping
investigation to see the information contained on the r ecord that is relevant to prepare submissions to
defend their positions in the investigation. It al so makes clear that this right does not extend to
confidential information on the record. Logically, ther efore, in order to prevail in a claim under this
article, the complaining party has to show that an interested party requested to see non-confidential
information that was used by the IA in its dete rminations and that this request was declined.
Following from our understanding of the nature of th e obligation set out under Article 6.4, we note
that most of the arguments raised by Indonesia to support its claim are not of the kind that can
logically be put forward under Article 6.4, with one exception. We therefore do not make any
findings with regard to the arguments that are not relevant to Indonesia's claim under Article 6.4.
7.197 Indonesia's only argument which, in our view, may be properly raised under Article 6.4 is that
the Indonesian exporters made a specific reque st to access information relating to the KTC's
calculation of the constructed normal values for Inda h Kiat and Pindo Deli but that this request was
declined by the KTC.226 We note that the letter sent by the Sinar Mas Group to the KTC in this regard
reads in relevant parts:
"[[**]]"227
7.198 We note that the letter was sent following the r eceipt of the non-confidential version of the
Preliminary Dumping Report.228 In the letter, the Sinar Mas Group clearly requests to see confidential
information regarding the calculation of the margin s of dumping for Indah Kiat and Pindo Deli. We
asked Korea what the KTC's reaction was in response to this letter. Korea stated that in response to
that letter, the KTC sent the confidential version of the Preliminary Dumping Report to the Sinar Mas
Group.229 Furthermore, Korea stated that the KTC also sent the confidential versions of the
Preliminary Investigation Report 230 and the Provisional Report on Final Dumping Margins 231 to the
Sinar Mas Group. Indonesia did not dispute these facts.
7.199 We note that for both Indah Kiat and Pindo Deli, the confidential version of the Preliminary
Dumping Report states their normal values, export prices and the adjustments made to them. 232 I t
does not, however, provide any details of the calculations made to reach these final figures. The
Preliminary Investigation Report contains exactly the same information with respect to these two
companies, without further detail. 233 The same applies to the Provisional Report on Final Dumping
Margins. This report only provides information re garding the final adjusted normal value and export
price for the single entity consisting of the three Sinar Mas Group companies, without explaining, for
instance, which cost figures were used in the calculation of the constructed normal value.
234 In this
regard, we note Korea's acknowledgement that this re port "did not provide the actual figures for cost
of manufacture, SG&A expenses or profit used in the KTC’s calculation of the constructed normal
value."
235
7.200 We asked Korea whether or not confidential information relating to the dumping margin
calculations for Indah Kiat and Pindo Deli was disclosed to these companies. Korea responded:

226 First Written Submission of Indonesia, para. 137.
227 Korea requests that the data in square brackets be treated as confidential.
228 The non-confidential version of the Preliminary Dumping Report is found in Exhibit KOR-8B.
229 Response of Korea to Question 42 from the Panel Following the First Meeting.
230 First Written Submission of Korea, para. 157.
231 Response of Korea to Question 46 from the Panel Following the First Meeting.
232 See, Exhibit KOR-8A at 17, 18, 28 and 29.
233 See, Exhibit KOR-9A at 14, 15, 18 and 19.
234 See, Exhibit KOR-12 at 6.
235 Response of Korea to Question 43 from the Panel Following the First Meeting.

"Articles 6.4, 6.9 and 12.2 do not require investigating authorities to disclose any
confidential information to any interested parties. They also do not preclude an IA
from disclosing an interested party’s own confidential information to that party, if the
investigating authorities choose to do so.
In this case, the KTC did disclose to the Sinar Mas Group the confidential version of
its preliminary dumping margin analysis as well as the confidential version of its
provisional final dumping margin analysis. These analyses plainly described the
methodology used by the KTC to determine the export price and normal value. They
also provided the actual figures for expor t price and normal value, and for the
adjustments made to export price and nor mal value. In addition, although these
analyses did not provide the actual figures for cost of manufacture, SG&A expenses
or profit used in the KTC’s calculation of the constructed normal value, they did
provide the SG&A, interest and profit rates that were used as “facts available.”
The confidential versions of the KTC’s pr eliminary and provisional final dumping
margin analyses that were sent to the Sinar Mas Group included all confidential
information relating to the Sinar Mas Gr oup that was included in those reports."
236
(footnotes omitted, emphasis in original)
7.201 We recall that the reports sent to the Sinar Mas Group did not contain all the confidential
information relating to their dumping margin calcula tions. We also note Korea's view that the KTC
did not have to disclose the confidential part of these calculations even though that confidential
information was provided by these companies themselves. We recall that Article 6.4 precludes the IA
from disclosing confidential information to the inter ested parties. However, that provision cannot, in
our view, possibly be interpreted to deny an interested party access to its own confidential
information. That is, confidentiality cannot be used as the basis for deny ing access to information
against the company which submitted the informati on. The notion of confidentiality, as elaborated
upon in Article 6.5 of the Agreement, is about pr eserving confidentiality of information that concerns
one interested party vis-à-vis the other interested parties. To the extent that the KTC used confidential
information submitted by other interested parties in the calculation of the constructed normal values
for Indah Kiat and Pindo Deli, the relevant provisions of Article 6.5 on confidentiality would preclude
the KTC from disclosing that part of the information to the Sinar Mas Group. We note, however, that
Korea has raised no such argument. Nor does the record contain any indication to that effect. We
therefore conclude that the KTC acted inconsisten tly with its obligations under Article 6.4 of the
Agreement with respect to disclosing information regarding the calculation of the constructed normal
values for Indah Kiat and Pindo Deli to those companies.
(ii) Article 6.9
7.202 We recall that in the context of its claim rega rding the KTC's alleged failure to respect its
disclosure obligations in connection with its du mping determinations, Indonesia puts forward a
number of arguments and asserts that they lead to a violation of Articles 6.4, 6.9 and 12.2 of the
Agreement. In order to distinguish its claim under Article 6.9 from the one under Article 6.4, we
invited Indonesia to explain the exact nature of its claim under Article 6.9 a nd the ways in which it
differed from its claim under Article 6.4. Indonesia responded:
"Unlike Article 6.4, Article 6.9 contains no exception for confidential information.
Moreover, Article 6.9 only requires a one -time disclosure prior to the final
determination, while Article 6.4 applies throughout the investigation. Article 6.9 only
requires the disclosure of essential facts but it does not provide a right to prepare
presentations on the basis of the information be fore the investigating authority. In the

236 Response of Korea to Question 46 from the Panel Following the First Meeting.

present case, Indonesia's claims under Article 6.9 do not differ significantly from its
claims under Article 6.4 in respect of the KTC's failure to disclose aspects of its
dumping determination. However, to the extent that Article 6.9 is understood as a
requirement to make a one-time disclosur e prior to the final determination,
Indonesia's claims in respect of the inadequate disclosure by the KTC throughout the
duration of the investigation are only maintainable under Article 6.4. "237 (emphasis
added)
7.203 Article 6.9 provides:
"The authorities shall, before a final dete rmination is made, inform all interested
parties of the essential facts under consideration which form the basis for the decision
whether to apply definitive measures. Such disclosure should take place in sufficient
time for the parties to defend their interests."
7.204 We note that Article 6.9 requires the IA to di sclose the essential facts establishing the basis of
its final determination whether to apply definiti ve measures in an investigation. As Indonesia
submits, we note that the obligation under Article 6. 9 is one that requires the IA to make a one-time
disclosure and that is before a final determination is made as to whether or not a definitive measure
will be applied. Indonesia stated that its claim would not be maintainable under Article 6.9 if we
consider that Article 6.9 only requires the IA to make a one-time disclosure in the course of an
investigation. We also note that addressing I ndonesia's claim under Article 6.9 based on the same
arguments would not in any event provide further assi stance in resolving the dispute before us. We
therefore need not, and do not, make a ruling in this regard.
(iii) Article 12.2
7.205 Indonesia bases its allegation regarding the viola tion of Article 12.2 in this investigation on
the same arguments that it raises with respect to Ar ticles 6.4 and 6.9. That is, Indonesia argues that
the KTC violated Article 12.2 of the Agreement by failing to disclose (1) why the reported CMI data
were not accepted, (2) the reasoning regardi ng which one of the methods provided for under
Article 2.2 of the Agreement was used in determ ining normal values for Indah Kiat and Pindo Deli,
and (3) on what basis and how, in terms of its m echanics, it calculated the constructed normal values
for Indah Kiat and Pindo Deli. Korea disagrees and submits that the reports released by the KTC in
the course of the investigation at issue were suffici ent to inform the Indonesian exporters of all the
issues identified by Indonesia.
7.206 Article 12.2 provides:
"Public notice shall be given of any prel iminary or final determination, whether
affirmative or negative, of any decision to accept an undertaking pursuant to
Article 8, of the termination of such an undertaking, and of the termination of a
definitive anti-dumping duty. Each such no tice shall set forth, or otherwise make
available through a separate report, in suffi cient detail the findings and conclusions
reached on all issues of fact and law considered material by the investigating
authorities. All such notices and reports shall be forwarded to the Member or
Members the products of which are subject to such determination or undertaking and
to other interested parties known to have an interest therein."
7.207 We note that Article 12.2 contains general provi sions regarding public notices to be given by
the IA at certain stages of an anti-dumping investig ation. One of these is the imposition of a final
anti-dumping duty. Article 12.2 also states that each public notice has to set forth, or make available

237 Response of Indonesia to Question 44 from the Panel Following the First Meeting.

through a separate report, sufficiently detailed information about issues of fact and law on which the
IA bases its determination.
7.208 In our view, this aspect of Indonesia's claim differs from the ones under Articles 6.4 and 6.9
in that the KTC could not include any
 confidential information regarding the calculation of the
constructed normal values for Indah Kiat and Pindo Deli in the public notice of imposition because of
Article 6.5 of the Agreement, which requires th e protection of confidential information in an
investigation.
7.209 We note that the public notice of imposition contains the following general statement
regarding the KTC's dumping determinations:
"Through preliminary investigation, the Korean Trade Commission confirmed that
there existed sufficient evid ence to presume dumping and material injury to the
domestic injury [sic.] caused by such dumping. Through final investigation following
the preliminary investigation, the Ko rean Trade Commission calculated dumping
margins of the product under investiga tion upon confirmation of dumping of the
product under investigation, and determined that there was material injury to the
domestic industry caused by the dumping."238
We also note that the KTC's Final Determination a nd the Final Investigation Report were attached to
the final notice.

7.210 Given that the KTC was precluded from including confidential information in the public
notice by virtue of Article 6.5 and that the KTC' s Final Determination and the Final Investigation
Report were attached to the public notice, we ar e of the view that Indonesia failed to make a prima
facie case with regard to the alleged violation of Artic le 12.2 of the Agreement. We therefore reject
this aspect of Indonesia's claim.
K.
KTC'S TREATMENT OF "PLAIN PAPER COPIER" AND "UNCOATED WOOD-FREE PRINTING PAPER"
AS LIKE PRODUCTS
1. Arguments of Parties
(a) Indonesia
7.211 Indonesia notes that the KTC divided the subject product in the investigation at issue into two
groups for purposes of its dumping determinations, i.e. "plain pa per copier" ("PPC") and "wood-free
printing paper" ("WF") and made separate dumping de terminations with respect to each one of them.
However, the KTC did not make the same distinc tion for purposes of its injury determinations and
carried out an aggregate injury determination for these two types of paper on the basis of the
assumption that they were like products. Indonesia argues that PPC and WF are not like products.
PPC is boxed paper sold to offices and homes mainly for the use in pho tocopiers and printers. WF is
printing paper sold in large rolls and sheets to offset printers and publishers for commercial use. WF
is also used in making notebooks and other stationa ry products. Indonesia also cites other grounds on
which these two types of paper differ. According to Indonesia, therefore, to conform to the provisions
of Article 2.6 of the Agreement, the KTC should have analyzed the effect of Indonesian PPC on
Korean PPC producers and the effect of Indonesian WF on Korean WF producers, separately. It
follows that by carrying out an aggregate injury determination for PPC and WF without affirmatively
determining that they were like products with in the meaning of Article 2.6, the KTC acted
inconsistently with Articles 2.6, 3.1, 3.2, 3.4, 3.5 and 3.7 of the Agreement.

238 Exhibit KOR-16.

(b) Korea
7.212 Korea argues that under Article 2.6 of the Agreem ent, like product is defined by reference to
the similarity between the imported product and th e domestically produced product. Therefore,
Indonesia's reference to the differences among the pro ducts produced by the domestic industry has no
legal basis under the Agreement. Besides, Korea cont ends that PPC and WF only differ in form or in
size. Apart from that, they are id entical because they have the same colour, strength, weight and
surface qualities. Differences in form and size cite d by Indonesia do not provide a sufficient basis to
treat these two paper types as different for purposes of injury determinations in an anti-dumping
investigation.
2. Arguments of Third Parties
(a) Canada
7.213 Canada argues that an interpretation of Article 2.6 of the Agreement should give meaning to
all words contained therein, including "product under consideration" and "characteristics". A
reasonable interpretation of that article would require the IA to identify the characteristics on the basis
of which the product under consideration is defined. It follows that, when necessary, the IA must
divide the product under consideration into cohesi ve groupings and carry out a separate dumping and
injury determination for each one of them. In Canada's view, leaving the definition of the product
under consideration to the IA's complete discretion could lead to absurd results, which would, under
Article 32 of the Vienna Convention, give rise to an impermissible interpretation of Article 2.6.
(b) Japan
7.214 Japan submits that, as noted by the panel in US – Softwood Lumber V , the definition of the
"product under consideration" is critical with respect to both dumping and injury determinations in anti-
dumping investigations. Japan is of the view that in cases where two separate products are at issue,
separate dumping and injury determinations have to be made with respect to each one of them. Carrying
out a combined dumping and injury determination for such distinct products would, in Japan's view, run
counter to the provisions of Articles 2 and 3 of the Agreement, respectively.
(c) United States
7.215 The United States submits that Article 2.6 of the Agreement does not require that each item
within the product under consideration be like each item within the like product. According to the
United States, since there are no s ubstantive provisions about the like product issue in the Agreement
except Article 2.6, the IA has a certain discretion w ith respect to the determination of like product in
an investigation. This does not mean, however, th at the IA cannot take account of different markets
for different types of products within like product.
3. Evaluation by the Panel
7.216 We note that it is undisputed that the inves tigation initiated by the KTC concerned dumped
imports of PPC and WF originating, inter alia, in Indonesia. The KTC determined that Korean PPC
and WF were identical to imported PPC and WF 239 and carried out a single injury determination with
respect to dumped imports of PPC and WF. Indonesi a agrees with the KTC's determination that PPC
and WF originating in Indonesia are identical to PPC and WF produced in Korea, respectively. 240 It
contends, however, that PPC in ge neral is not like WF because they have differences with respect to
physical characteristics, end-uses, substitutability, market sectors in which they compete, HS

239 See, the KTC's Final Investigation Report (Exhibit KOR-13 at 3-4).
240 First Written Submission of Indonesia, para. 144.

nomenclatures and manufacturing processes. Accordi ng to Indonesia, Article 2.6 required that PPC
and WF be treated separately in the KTC's injury determinations because they are not like products as
defined therein. Korea disagrees and contends that Article 2.6, which is the only provision in the
Agreement regarding the like product issue, defines "like product" by reference to "the product under
consideration". However, Article 2.6 does not define "the product under consideration".
Consequently, Indonesia's claim has no legal basi s under the Agreement. Korea also objects to
Indonesia's assertions regarding the differences between PPC and WF. According to Korea,
differences cited by Indonesia do not justify treati ng these two types of paper as separate products in
the context of injury determinations.
7.217 We recall once again that Indonesia argues that the KTC's like product definition was
inconsistent with Article 2.6 of the Agreement because the KTC presumed that WF and PPC were like
products, which, in Indonesia's view, they are not. The issue therefore is whether or not the like product
definition found in Article 2.6 of the Agreement required the KTC to determine that PPC and WF were
like products before proceeding to carry out a single injury determination with respect to these two types
of imported paper.
7.218 Article 2.6 of the Agreement provides:
"Throughout this Agreement the term "like product" ("produit similaire") shall be
interpreted to mean a product which is identical
, i.e. alike in all respects to the
product under consideration , or in the absence of such a product, another product
which, although not alike in all respec ts, has characteristics closely resembling those
of the product under consideration." (emphasis added)
7.219 We note that Article 2.6 takes "the product unde r consideration" as the starting point of the
definition of "like product". It then stipulates that the like product is the product that is identical to
the product under consideration, or one that has physical charact eristics that closely resemble those of
the product under consideration. The phrase "Thr oughout this Agreement" indicates that this
definition applies to the definition of like product for both dumping and injury determinations in an
anti-dumping investigation. Therefore, once the prod uct under consideration is defined, the IA has to
make sure that the product it is using in its injury determination is like the product under
consideration. As long as that determination is made consistently with the parameters set out in
Article 2.6, the IA' s like product definition will be WTO-consistent.
7.220 In the investigation at issue, the KTC determin ed the "the product under consideration" to be
PPC and WF. The KTC also determined that the definition of the domestically produced PPC and
WF was identical to the definition of the PPC and WF imported from Indonesia. It follows that the
KTC's like product definition was consistent with the provisions of Article 2.6.241
7.221 Indonesia argues that the KTC had to determin e that PPC and WF were like products. We
note that these two, together, constituted "the produ ct under consideration" in the investigation at
issue. We see no basis in Article 2.6 for the proposit ion that the like product definition also applies to
the definition of "the product under consideration". We are aware of no provision in Article 2.6, or

241 We find support for our approach in the following finding by the panel in Softwood Lumber V:
"As the definition of "like product" implies a comparison with another product, it seems clear
to us that the starting point can only be the "other product", being the allegedly dumped
product. Therefore, once the product under consideration is defined, the "like product" to the
product under consideration has to be determined on the basis of Article 2.6. However, in our
analysis of the AD Agreement , we could not find any guidance on the way in which the
"product under consideration" should be determined."
Panel Report, United States – Final Dumping Determination on Softwood Lumber from Canada
("US – Softwood Lumber V
 "), WT/DS264/R, adopted 31 August 2004, as modified by the Appellate
Body Report, WT/DS264/AB/R, para. 7.152.

any other article in the Agreement, that contains a definition of "the pr oduct under consideration"
itself.242 In any event, we note Indonesia's statement that it is not challenging the KTC's
determination regarding "the product under consideration".243
7.222 Finally in this regard, we note Indonesia's as sertion that the KTC made separate dumping
determinations with respect to PPC and WF in the inve stigation at issue. We also note, however, that
the KTC's final determination reveals that one single margin of dumping was calculated for "PPC and
WF" by the KTC in this investigation. The Final Dumping Report reads in relevant part:
I. Calculation of dumping rate
The final dumping margin of the 3 APP Companies is 8.22%, which is the weighted
average of the dumping margins for each m odel based on the export volume of each
model exported to Korea.244
7.223 The chart in the Final Dumping Report that follows the above-quoted part indicates dumping
calculations for PPC and WF as being [[**]] per cent and [[**]] per cent, respectively.245 Therefore, it
seems that the KTC divided the subject product into two models for purposes of its dumping
determinations, but ultimately computed one single margin that applied to the subject product as a
whole.
246
7.224 On the basis of the above considerations, we reject Indonesia's claim that the KTC's like
product definition was inconsistent with Article 2.6 of the Agreement. It follows that the KTC's
injury determination based on this like product defin ition was not inconsistent with Articles 3.1, 3.2,
3.4, 3.5 and 3.7 of the Agreement.

242 In this regard, we note the finding by the panel in Softwood Lumber V, Ibid.
243 Korea argued that to the extent that Indonesia challenges the KTC's determination regarding "the
product under consideration", the Panel should decline to address that claim becau se it was not raised in
Indonesia's request for the establishment of a panel. In response to questioning from the Panel, Korea stated that
by raising this argument it did not request the Panel to make a preliminary ruling un der Article 6.2 of the DSU
on jurisdictional grounds because it was Korea's unders tanding that Indonesia did not challenge the KTC's
determination regarding "the product under consideration". Korea mentioned, however, that if Indonesia
challenges that determination then it would require the Panel to make such a procedural ruling. See, Response
of Korea to Question 51 from the Panel Following the First Meeting.
In response to questioning from the Panel, Indonesia stated that it did not challenge the KTC's
determination regarding "the product under consideration". In this regard, Indonesia pointed out:
"Indonesia would simply observe that it has not, in fact, challenged the KTC’s definition of
the product under consideration, in the sense that either PPC or WF paper should have been
entirely excluded from the scope of the KTC’s investigation. Instead, Indonesia challenged
the KTC’s conduct of a single injury investigation on the basis of a flawed definition of the
“like product” as inconsistent with Articles 2. 6, 3.1, 3.2, 3.4, 3. 5, and 3.7 of the AD
Agreement."
Response of Indonesia to Question 51 from the Panel Following the First Meeting.
We therefore did not make any ruling with respect to the KTC's determination regarding "the product
under consideration".
244 Exhibit KOR-14A at 24.
245 Korea requests that the data in square brackets be treated as confidential
246 In this regard, we note the Appellate Body's finding that multiple averaging, i.e. dividing the
product under investigation into product types or models for the purpose of calculating a weighted average
normal value and a weighted average export price for each one of them, is consistent with the Agreement. See,
Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from Canada ("US –
Softwood Lumber V
 "), WT/DS264/AB/R, adopted 31 August 2004, para. 81.

L.
KTC'S ALLEGED FAILURE TO BASE ITS INJURY AND CAUSAL LINK DETERMINATIONS ON AN
OBJECTIVE EXAMINATION OF POSITIVE EVIDENCE
1. Arguments of Parties
(a) Indonesia
7.225 Indonesia asserts five substantive violations by Korea of its obligations under the Agreement
with respect to the KTC's injury a nd causal link determinations in the investigation at issue. Firstly,
Indonesia argues that the KTC's price and volume anal yses were inconsistent with the Agreement.
With respect to price, Indonesia submits that for substantial periods during the injury POI, prices of
Indonesian exporters were above those of Korean pr oducers. Even if at certain points during this
period prices of Indonesian exporters fell below those of Korean producers, the KTC could not
legitimately conclude that Indonesian exporters ' prices undercut or suppressed Korean producers'
prices. Furthermore, Indonesia argues that the KTC did not make any determination as to whether or
not the effect of Indonesian exporters' prices was "significant", and therefore, the KTC's price analysis
was inconsistent with Articles 3.1, 3.2 and 3.4 of th e Agreement. With regard to the analysis of the
volume of dumped imports, Indonesia submits that the KTC acted inconsistently with Articles 3.1 and
3.2 of the Agreement by disregarding the fact that the volume of dumped imports declined by 15.3 per
cent in the first half of 2003.
7.226 Secondly, Indonesia argues that the KTC acted inconsistently with Articles 3.1 and 3.4 of the
Agreement by failing to analyse the relevance of many of the injury factors set out in Article 3.4.
Indonesia does not argue that the KTC failed to coll ect data about these injury factors. Rather,
according to Indonesia, many injury factors signalle d a healthy domestic industry, yet the KTC failed
to explain how it nevertheless reached the conclusion that there was material injury.
7.227 Thirdly, Indonesia contends that the KTC acted inconsistently with Articles 3.1 and 3.5 of the
Agreement in its causation analysis. In this contex t, Indonesia submits that the KTC failed to analyse
developments in the first half of 2003, although th is period was part of the POI for the injury
determination. Indonesia also contends that in its non-attribution analysis, the KTC failed to properly
analyse the impact on the Korean domestic industr y of the increase in the volume of imports from
other sources. According to Indonesia, the KTC also failed to analyze the effect of some other factors
in its non-attribution analysis.
7.228 Fourthly, Indonesia submits that the KTC violated Articles 3.1, 3.2, 3.4 and 3.5 of the
Agreement by failing to exclude imports made by the Korean industry from the volume of dumped
imports considered in its injury determination.
7.229 Finally, Indonesia asserts that the KTC violated Articles 3.1, 3.2 and 3.5 of the Agreement by
considering exports by Indah Kiat as dumped impor ts for purposes of its injury determination when
this exporter's individual dumping margin was de minimis.
(b) Korea
7.230 Korea argues that the KTC's price analysis w as consistent with the Agreement. The KTC
determined that prices of dumped imports were be low the Korean producers' prices in 1999 and 2002,
equal to them in 2000 and above Kor ean producers' prices in 2001 and in the first half of 2003. With
regard to the volume of dumped imports, Korea points out that this claim was not raised in Indonesia's
request for the establishment of a panel. Regarding the substance of this claim, Korea submits that
they increased in absolute terms over the period from 1999 to the first half of 2003. Even though
there was a decline in the volume of dumped imports in absolute terms from 2002 to the first half of
2003, the overall trend was upward and there was also a clear increase in the volume of dumped
imports relative to domestic consumption in Korea.

7.231 With regard to the injury factors under Article 3.4 of the Agreement, Korea submits that the
KTC properly evaluated all of them. Based on its overall evaluation of these injury factors, the KTC
concluded that the Korean industry suffered materi al injury. According to Korea, there is no
provision in the Agreement which requires that a particular weight be given to certain injury factors.
7.232 Korea argues that the KTC's causation analysis wa s also in line with the Agreement. In its
causation analysis, the KTC analysed the effect of dumped imports on the domestic industry. This
included an analysis of the volume and prices of dumped imports. The KTC also evaluated the
potential impact of factors other than dumped im ports on the Korean industry and found no evidence
that suggested that any such factor contributed to the material injury suffered by the domestic
industry.
7.233 Regarding imports of the subject product made by the Korean producers, Korea contends that
the KTC excluded from the definition of the do mestic industry those producers who imported
significant quantities of the subject product from the countries under investigation. The rest of the
domestic producers did not have significant imports.
7.234 With regard to exports made by Indah Kiat , Korea submits that since the dumping margin
calculated for this company was properly attributed to the calculation of the single margin for the
three Sinar Mas Group companies, there was no re ason to exclude these exports from the volume of
dumped imports for purposes of the KTC's injury determination.
2. Arguments of Third Parties
(a) United States
7.235 The United States submits that Article 3.2 of the Agreement requires the IA to "consider"
whether there has been a significant price undercutting, suppression or depression. It does not,
however, require the IA to find that there have been significant price effects as a precondition to
making an affirmative injury determination.
7.236 Regarding causality, the United States argues that all that Article 3.5 requires is a finding by
the IA that there is a causal relationship between du mped imports and injury. It does not specify in
what detail and on the basis of what information th e causation or non-attribution analysis has to be
carried out.
7.237 Regarding imports of the subject product by the domestic producers, the United States
contends that neither Article 4.1(i) of the Agreem ent, nor any other provision, requires that domestic
producers importing the subject product be exclude d from the domestic industry. The Agreement
simply provides the IA with the option of excl uding such domestic producers from the definition of
the domestic industry. According to the United Stat es, the fact that the do mestic producers are also
importers of the subject product may in some cases indicate that the impact of dumped imports is
significant.
3. Evaluation by the Panel
(a) KTC's Price and Volume Analyses
(i) KTC's Price Analysis
7.238 Indonesia asserts that the data collected by the KTC with respect to prices could not support
its finding that dumped imports caused material inju ry to the Korean industry. More specifically,
Indonesia raises two arguments. Firstly, Indonesia c ontends that since for substantial periods during
the POI, prices of Indonesian exporters were highe r than those of Korean producers, the KTC could

not properly find that the Indonesian exporters' prices had an impact on the prices of Korean
producers. Secondly, Indonesia submits that the KT C acted inconsistently with Article 3.2 of the
Agreement because it failed to make a determinati on as to whether or not the price effects that it
found were "significant".
7.239 With respect to price undercutting, Korea notes that the trend in prices in this particular
investigation was somewhat mixed in the sense that prices of Indonesian exporters were at various
times above, below, or equal to, the prices of Korean producers. Korea also notes that the KTC did
not limit its price analysis to undercutting, but al so analyzed price depression and suppression. With
respect to Indonesia's argument relating to whether th e price effects were "significant", Korea submits
that the KTC's determination did not use the word "significant", but nevertheless demonstrated that
there was significant price depression and suppression.
7.240 We shall commence our evaluation of Indonesia's claim with the relevant provisions of the
Agreement regarding price analyses in injury determination. Articles 3.1 of the Agreement reads:
"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."
7.241 Article 3.2 reads:
"With regard to the volume of the dumped imports, the investigating authorities shall
consider whether there has been a signifi cant increase in dumped imports, either in
absolute terms or relative to production or consumption in the importing Member.
With regard to the effect of the dump ed imports on prices, the investigating
authorities shall consider whether there has been a significant price undercutting by
the dumped imports as compared with the price of a like product of the importing
Member, or whether the effect of such imports is otherwise to depress prices to a
significant degree or prevent price increases, which otherwise would have occurred,
to a significant degree. No one or several of these factors can necessarily give
decisive guidance."
7.242 Article 3.1 provides that an injury dete rmination under the Agreement requires an
examination of (a) the volume of dumped imports, (b ) effect of dumped imports on the prices of the
domestic industry and (c) the consequent impact of these imports on the domestic industry in the
importing country. Article 3.2 sets out details pert aining to the examination of the volume of dumped
imports and their impact on the domestic industry's prices. Regarding the price analysis, Article 3.2
stipulates that the IA has to consider
 whether dumped imports have had one of the three possible
effects on the prices of the domestic industry: (a) significant price undercutting, (b) significant price
depression or (c) significant price suppression. In ou r view, what Article 3.2 requires is that the IA
consider whether or not any of these three price eff ects are present in a given investigation. It does
not, however, require that a determ ination be made in this regard. 247 Finally, we note that the last

247 We find support for our conclusion in the following finding of the panel in Thailand – H-Beams:
"We examine the nature of the obligation in Article 3.2. We note that the text of Article 3.2
requires that the investigating authorities "c onsider whether there has been a significant
increase in dumped imports". The Concise Oxford Dictionary defines "consider" as, inter
alia: "contemplate mentally, especially in order to reach a conclusion"; "give attention to";
and "reckon with; take into account". We theref ore do not read the textual term "consider" in
Article 3.2 to require an explicit "finding" or "determination" by the investigating authorities
as to whether the increase in dumped imports is "significant"." (footnote omitted)

sentence of Article 3.2 mentions that no one or se veral of these three injury factors can necessarily
give decisive guidance. That is, even if the IA fi nds certain positive trends with respect to some of
these factors, it can nevertheless reach the conclusion that there is injury, provided that that decision is
premised on positive evidence and reflects an objec tive examination of the evidence as required by
Article 3.1 of the Agreement.
7.243 One initial issue raised in these proceedings with respect to the KTC's price analysis is
whether, in an investigation where the prices of du mped imports were above, or equal to, those of the
domestic industry in certain segments of the injury POI, the IA is precluded from finding that dumped
imports had a negative effect on the domestic industry's prices. In our view, as long as the IA's
analysis conforms to the requirements of Article 3.1 of the Agreement, that is, an objective
examination based on positive evidence, changes in the relative levels of prices of dumped imports
and the domestic industry during the POI do not necessarily preclude the IA from concluding that
dumped imports had negative effects on prices.
248 We therefore do not agree with Indonesia's
argument that because the prices of dumped impo rts remained above, or equal to, those of the
domestic industry in certain segments of the POI, the KTC could not conclude that the Korean
industry was suffering material injury. With that in mind, we now turn to the facts of the
investigation at issue.
7.244 We note that the KTC's final injury determination in the investigation at issue is found in two
documents: The Final Investigation Report and the Final Determination. The Final Investigation
Report mainly contains the information gathered by the investigators whereas the Final Determination
contains the KTC's conclusions based on its analys is of those data. We shall therefore base our
evaluation of the claims at issue on these two documents.
7.245 We note that the Final Investigation Report contains a chart that shows the trends in the prices
of dumped imports preceded by the recital of the data in that chart. 249 In the section on causation, the
Final Investigation Report also contains information regarding the KTC's analysis of the three types of
price effects. This section also consists of charts that show figures with r espect to each of the three
price effects and a recital of the data in the charts.250
7.246 The Final Determination sets out the KTC's price analysis in two places. Firstly, the Final
Determination contains the following statements under the heading "Trend of Import Volume and
Price of the Cumulated Dumped Imports":
"In addition to the above import trend of the cumulated dumped imports, the domestic
resale price of the cumulated dumped imports was reviewed. Although the domestic
resale price of the cumulated dumped imports was KRW [[**]] thousand per ton in
1999, and increased to KRW [[**]] thousand in 2000 by 20.9%, it continuously fell to

 Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-
Alloy Steel and H-Beams from Poland ("Thailand – H-Beams "), WT/DS122/R, adopted 5 April 2001, as
modified by the Appellate Body Report, WT/DS122/AB/R, DSR 2001:VII, 2741, para. 7.161.
248 We find support for this view in the following finding of the panel in EC – Tube or Pipe Fittings:
"Sales at undercutting prices c ould have an impact on the domestic industry (for example, in
terms of lost sales) irrespective of whether other sales might be made at prices above those
charged by the domestic industry. The fact that certain sales may have occurred at "non-
underselling prices" does not eradicate the eff ects in the importing market of sales that were
made at underselling prices."
 Panel Report, European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe
Fittings from Brazil ("EC – Tube or Pipe Fittings "), WT/DS219/R, adopted 18 August 2003, as modified by the
Appellate Body Report, WT/DS219/AB/R, para. 7.277.
249 Exhibit KOR-13A at 41.
250 Exhibit KOR-13A at 62-64.

KRW [[**]] thousand in 2001, KRW [[**]] thousand in 2002, and KRW [[**]]
thousand in the first half of 2003.
251
Accordingly, the Commission determined that the volume of the cumulated dumped
imports has increased in both absolute and relative terms, and that their sales price
has been falling."252 (footnote omitted)
7.247 Secondly, the Final Determination contains a mo re detailed analysis of the price effects of
dumped imports under the heading "Causal Relations hip between Dumped Imports and the Material
Injury to the Domestic Industry".
7.248 With regard to price undercutting , the chart on page 62 of the Final Investigation Report
shows that prices of dumped imports were below t hose of the Korean industry in 1999 and 2002 and
that they were above the Korean industry's prices in 2000, 2001 and the first half of 2003. 253 The
Final Determination contains the following discussion on price undercutting:
"[T]he Commission first examined whether th e dumped imports were sold at a low
price. The resale price of the cumulated dumped imports per ton was lower than the
sales price of the domestic products by KRW [[**]] thousand in 1999, was higher
than the sales price of the domestic products by KRW [[**]] thousand and KRW
[[**]] thousand in 2001, respectively, but was lower than the sales price of the
domestic products by KRW [[**]] thousand in 2002, and was higher by KRW [[**]]
thousand in the first half of 2003
254."255 (footnote omitted)
7.249 With respect to price depression , the Final Investigation Report recites the same price data,
puts them in the form of a graph and contains anot her chart where price fluctuations with respect to
both dumped imports and domestic producers' sales can be seen. 256 The Final Determination contains
the following evaluation with respect to price depression:
"Second, it was reviewed whether the price of the dumped imports caused a fall in the
sales price of the domestic products. The resale price of the cumulated dumped
imports per ton was KRW [[**]] thousand in 1999, and increased 20.9% to KRW
[[**]] 949 thousand in 2000, but decreased 6.6% in 2001, 0.6% in 2002 and 0.4% in
the first half of 2003, respectively. A ccordingly, the sales price of the domestic
products per ton was KRW [[**]] thousand in 1999, and increased 10.1% to KRW
948 thousand in 2000, but decreased 8.1% to KRW [[**]] thousand in 2001,
increased 2.4% in 2002 and decreased 4.6% in the first half of 2003.
257 Thus the
Commission found that the sales price of the domestic products has been falling due
to the continued fall in the price of dumped imports."258 (footnote omitted)
7.250 Concerning price suppression , the situation is similar to price depression. The Final
Investigation Report contains the data relevant to the price suppression analysis. It contains a graph
and a chart that show that the prices of the Korean producers remained below a target price
throughout the POI.259 The Final Determination contains the following analysis:

251 Korea requests that the data in square brackets be treated as confidential.
252 Exhibit KOR-15A at13.
253 Exhibit KOR-13A at 62.
254 Korea requests that the data in square brackets be treated as confidential.
255 Exhibit KOR-15A at16.
256 Exhibit KOR-13A at 62-63.
257 Korea requests that the data in square brackets be treated as confidential.
258 Exhibit KOR-15A at16.
259 Exhibit KOR-13A at 64.

"Third, it was reviewed whether the du mped imports suppressed an increase in the
sales price of the domestic products. The sal es price of the domestic products per ton
was lower than the target sales price by KRW [[**]] thousand in 1999, KRW [[**]]
thousand in 2000, KRW [[**]] thousand in 2001, KRW [[**]] thousand in 2002, and
KRW [[**]] thousand in the first half of 2003, respectively.
260 Thus, the Commission
found that the sales price of the domestic products was suppressed." 261 (footnote
omitted)
7.251 On the basis of our review of the Final Inves tigation Report and the Fi nal Determination, we
conclude that the KTC has clearly considered whet her there was price undercutting, price suppression
and price depression caused by dumped imports.
7.252 We now turn to Indonesia's argument that the KTC failed to determine or at least consider
whether these price effects were "significant". In Indonesia's view, failure to address the issue of
whether or not the price effects were "significant" constitutes a violation of Article 3.2.262
7.253 We note that the record contains no discussion as to whether or not the price effects found by
the KTC were "significant". However, we do not read Article 3.2 as requiring that the word
"significant" appear in the text of the IA's de termination. Furthermore, as we stated above
(para. 7.242), Article 3.2 does not generally requi re the IA to make a determination about the
"significance" of price effects or indeed as to whet her there were price effects as such. All it requires
is that the IA consider whether there has been si gnificant price undercutting, price depression or price
suppression. In our view, therefore, the requirements of that article will be satisfied if the
determination demonstrates that the IA properly c onsidered whether or not prices of dumped imports
had one of the three price effects set out under Article 3.2.
263 We are of the view that the KTC's
determination in this investiga tion properly addressed the issue of whether or not dumped imports
caused significant price undercutting, price depressi on or price suppression to the domestic industry's
prices. Consequently, we do not agree with I ndonesia that the KTC acted inconsistently with
Article 3.2 of the Agreement by failing to determ ine or consider whether or not dumped imports
caused "significant" price undercutting, price depression or price suppression.
7.254 We therefore reject Indonesia's claim that the KTC's analysis concerning the price effects of
dumped imports on the Korean industry was incons istent with Articles 3.1, 3.2 and 3.4 of the
Agreement.
(ii) KTC's Volume Analysis
7.255 Indonesia submits that the KTC failed to analyse the volume of dumped imports in the first
half of 2003, which was part of the KTC's POI fo r the injury determination. Since there was a

260 Korea requests that the data in square brackets be treated as confidential.
261 Exhibit KOR-15A at16.
262 Second Written Submission of Indonesia, para. 99.
263 In this regard, we find support in the following finding of the panel in Thailand – H-Beams:
"We therefore do not read the textual term "c onsider" in Article 3.2 to require an explicit
"finding" or "determination" by the investiga ting authorities as to whether the increase in
dumped imports is "significant". While it would certainly be preferable for a Member
explicitly to characterize whether any increase in imports as "significant", and to give a
reasoned explanation of that ch aracterization, we believe that the word "significant" does not
necessarily need to appear in the text of the relevant document in order for the requirements of
this provision to be fulfilled. Nevertheless, we consider that it must be apparent in the
relevant documents in the record that the investigating authorities have given attention to and
taken into account whether there has been a significant increase in dumped imports, in
absolute or relative terms." (footnote omitted)
 Panel Report, Thailand – H-Beams, supra, note 247, para. 7.161.

decrease of 15.3 per cent in the volume of dumped imports from 2002 to the first half of 2003,
Indonesia asserts that the KTC could not properly c onclude that there had been an increase in the
volume of dumped imports. Indonesia also asserts that the domestic consumption figures used by the
KTC in its analysis of the increase in the volume of dumped imports relative to domestic consumption
were flawed because the KTC ignored an important portion of domestic consumption in its
calculations. Consequently, the KTC overstated th e market share of dumped imports. Indonesia
contends that had the KTC calculated domestic consumption correctly, it would have found a decrease
in the market share of dumped imports in the firs t half of 2003, rather than the increase found by the
KTC. Korea points out that this claim was not raised in Indonesia's request for the establishment of a
panel. Regarding the substance of the claim, Ko rea generally argues that the KTC based its volume
analysis on trends in the absolute volume of dumped imports, as well as trends in the volume relative
to domestic consumption. With regard to the change in the volume of dumped imports from 2002 to
the first half of 2003, in particular, Korea notes th at the KTC analyzed the impact of this decline
relative to domestic consumption.
7.256 Given Korea's assertion that this claim w as not raised in Indonesia's request for the
establishment of a panel, we shall first make a finding in that regard. We will only address the
substance of Indonesia's claim if we find the claim to be properly before us.
7.257 We note that paragraph 13 of the Working Proce dures states that any requests for preliminary
rulings have in principle to be submitted before the first meeting with the parties. We also note that
Korea raised this jurisdictional matter relatively la te during these proceedings, i.e. in its comments on
Indonesia's closing statements in our second meeting with the parties. It would, obviously, have been
preferable had Korea raised it earlier in these pro ceedings. However, we consider this to be a
fundamental issue as it concerns our jurisdiction. We cannot make a finding on a claim which has not
been raised by Indonesia in its request for establishment in conformity with the provisions of the DSU
outlined below, and which is therefore not properly before us.
264
7.258 We recall that, under Article 7 of the DSU, it is Indonesia's panel request that determines our
terms of reference in these proceedings. Article 6.2 of the DSU, which sets out the requirements
applicable to the requests for the establishment of a panel, provides:
"The request for the establishment of a pane l shall be made in writing. It shall
indicate whether consultations were held, identify the specific measures at issue and
provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly. In case the applicant re quests the establishment of a panel with
other than standard terms of reference, th e written request shall include the proposed
text of special terms of reference."
7.259 According to Article 6.2, therefore, a panel request must identify the specific measures at
issue and must provide a brief summary of the legal basis of the complaint. Together, these two
elements comprise the "matter referred to the DS B", which forms the basis for a panel's terms of
reference under Article 7.1 of the DSU. It is importa nt that the panel request be sufficiently clear for
two reasons: first, it defines the scope of the di spute and second, it serves the due process objective of
notifying the parties and third parties of the nature of a complainant's case.
265 We must therefore
scrutinize carefully Indonesia's panel request "to ensu re its compliance with both the letter and the

264 We find support for our proposition in the decisions of the Appellate Body in Mexico – Corn Syrup
(Article 21.5 – US) and US – Carbon Steel. See, Appellate Body Report, Mexico – Anti-Dumping Investigation of
High Fructose Corn Syrup (HFCS) from the United States, Recourse to Article 21.5 of the DSU by the United
States ("Mexico – Corn Syrup (Article 21.5 – US) "), WT/DS132/AB/RW, adopted 21 November 2001, DSR
2001:XIII, 6675, para. 36; Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-
Resistant Carbon Steel Flat Products from Germany ("US – Carbon Steel"), WT/DS213/AB/R and Corr.1, adopted
19 December 2002, para. 123.
265 Ibid., para. 126.

spirit of Article 6.2 of the DSU." 266 In doing that, we shall consider Indonesia's panel request as a
whole and take into account the circumstances of the present proceedings.267
7.260 With these considerations in mind, we now turn to the text of Indonesia's panel request to
decide whether it conforms to the requirements of Article 6.2 of the DSU. We note that Indonesia's
request for the establishment of a panel mentions the word "volume" only in paragraph 3 which reads:
"3. Korea initiated the investigation notwithstanding its failure to make an
objective examination of the participati on of the applicant Hansol Paper Co.
("Hansol") in the definition of "domestic industry", despite Hansol's significant
volume of imports from Indonesia during the period of investigation for injury. This
is inconsistent with Article 3.1 and Article 4.1(i) of the AD Agreement." (emphasis
added)
We note that paragraph 3 specifically concerns the alleged deficiencies in the KTC's decision to
initiate the investigation at issue. In that context, this paragraph refers to the volume of imports made
by Hansol, one of the domestic producers of the s ubject product, and asserts th at Hansol should have
been left out of the domestic industry for purposes of the investigation at issue. We therefore do not
consider this section to refer to the alleged deficien cies in the KTC's analysis regarding trends in the
volume of dumped imports in the course of the investigation at issue.
7.261 We note that Article 3.2 of the Agreement, on which Indonesia's claim regarding the KTC's
volume analysis is mainly based, has been ment ioned in three instances in the request for
establishment. Paragraph 28 of the request for establishment reads:
"28. Korea's incorrect classification of imports from PT Indah Kiat as dumped
imports as a result of treating PT Indah Ki at, PT Pindo Deli and PT Tjiwi Kimia as a
single economic unit, as well as Korea's incorrect classification of all imports from
Indonesia and China, including imports that occurred outside the period of
investigation for dumping , as dumped imports and the consequent incorrect
determination of injury and causal link between the alleged dumped imports and
injury is inconsistent with Article 3.1, Article 3.2 , Article 3.4, Article 3.5 and
Article 3.7 of the AD Agreement, and Artic le VI:1 and Article VI:6 of GATT."
(emphasis added)
We note that paragraph 28 concer ns imports made from Indah Kiat , and imports made outside the
injury POI. We cannot construe this specific refere nce to Article 3.2 as one that takes issue with the
alleged deficiencies in the KTC's analysis regarding trends in the volume of dumped imports.
7.262 The second reference to Article 3.2, found in pa ragraph 30 of the request for establishment,
reads:
"30. Korea's failure to adequately evalua te the effect of the dumped imports on
prices in the domestic market for like products is inconsistent with Article 3.1, Article
3.2, Article 3.5 and Article 3.7 of the AD Ag reement, and Article VI:1 and Article
VI:6 of GATT." (emphasis added)
We note that paragraph 30 only raises a claim regard ing the alleged deficiencies in the KTC's price
analysis. It does not seem in any way to relate to the KTC's volume analysis.
7.263 The third and the last reference to Article 3.2 reads:

266 Ibid.
267 Ibid., para. 127.

"32. Korea's failure to objectively exam ine the participation of the domestic
industry in the importation of the allegedly dumped im ports and Korea's erroneous
attribution of the injury that occurred in th e first half of 2003 to dumped imports that
entered the Korean market 3-15 months earlier is inconsistent with the requirements
set out in Article 3.1, Article 3.2 , Article 3.4, Article 3.5, and Article 3.7 of the
AD Agreement, and Article VI:1 and Article VI:6 of GATT." (emphasis added)
We note that paragraph 32 concer ns dumped imports made by the Korean industry, and the KTC's
linking injury that occurred towards the end of th e injury POI to dumped imports that entered the
Korean market 3-15 months earlier. As such, it ca nnot be construed to raise a claim regarding the
KTC's volume analysis in the investigation at issue.
7.264 On the basis of the foregoing, it is clear to us that the request for establishment does not
contain any reference to the KTC's volume analysis in its final injury determination, and thus fails to
set out any legal basis for a complaint concerning th at aspect of the determination. We therefore
conclude that Indonesia failed to raise a claim re garding the alleged WTO-inconsistencies in the
KTC's volume analysis during the investigation at is sue. As the purported claim is thus not properly
before us, we decline to make any findings in this regard.
(b) KTC's Evaluation of the Impact of Dumped Imports on the Korean Industry
7.265 Indonesia acknowledges that the KTC gathered data concerning each injury factor set out in
Article 3.4 of the Agreement. However, Indonesia contends that the KTC failed to evaluate these
factors. More specifically, Indonesia asserts that the KTC did not explain how it came to the
conclusion that the Korean industry suffered material injury notwithstanding the fact that a number of
injury factors showed positive trends with respect to the state of the Korean industry. Indonesia cites
profits, wages, employment, productivity, production capacity, output and investments as the factors
regarding which the Korean industry showed positive signs.
7.266 Korea argues that the KTC considered all injury factors set out in Article 3.4 in its injury
determination. Korea cites factors such as produc tion, capacity utilization, sales, market share and
inventories as supporting the KTC's overall conclusion that the Korean industry suffered material
injury. According to Korea, th e KTC was justified with respect to the relative weight assigned to
certain injury factors given that the Agreement cont ains no rule as to the weight to be given to the
Article 3.4 injury factors.
7.267 We note that Article 3.4 of the Agreement provides:
"The examination of the impact of th e dumped imports on the domestic industry
concerned shall include an evaluation of all relevant economic factors and indices
having a bearing on the state of the industry, including actual and potential decline in
sales, profits, output, market share, productivity, return on investments, or utilization
of capacity; factors affecting domestic prices; the magnitude of the margin of
dumping; actual and potential negativ e effects on cash flow, inventories,
employment, wages, growth, ability to raise capital or investments. This list is not
exhaustive, nor can one or several of these factors necessarily give decisive
guidance."
7.268 We note that the WTO panels and the Appellate B ody have consistently held that an analysis
of the impact of dumped imports on the domestic i ndustry in the importing Member shall comprise an

evaluation of all factors set out in Article 3.4. 268 To fulfil that obligation, the IA has obviously to
collect the data relating to each of the factors set out in Article 3.4. However, the obligation under
Article 3.4 is not limited to the compilation of the relevant data. Having gath ered the relevant data,
the IA then has to evaluate them in context and in connection with one another. The WTO
jurisprudence has also consistently approved this proposition. 269 Recently, the panel in Egypt –Steel
Rebar stated that "for an IA to "evaluate" evid ence concerning a given factor in the sense of
Article 3.4, it must not only gather data, but it must analyze and interpret those data."270
7.269 We note that Indonesia acknowledges that the KTC did collect the relevant data regarding the
injury factors set out under Article 3.4. The issu e, therefore, is whether or not the KTC analyzed
these data in context and reached a reasoned conclusi on with respect to the impact of dumped imports
on the Korean industry.
7.270 We note that Korea cites the text of the Final Investigation Report and the Final
Determination as evidence that the KTC carried out a WTO-consistent analysis of the impact of
dumped imports on the Korean industry. The Final Determination 271 and the Final Investigation
Report272 both contain analyses of injury factors on wh ich the KTC's determination was based. We
also note, however, that these two reports do not see m to have a section where the KTC evaluates the
relevance of these factors with respect to its overall conclusion on injury, except the following
concluding paragraph in the Final Determination:
"Accordingly, the Commission determined that there exists material injury to the
domestic industry, such as reduced production quantity, reduced sales quantity,
increased inventory, reduced sales amount, low operating income ratio, and reduced
employment etc."
273
7.271 We note that there were certain factors, such as capacity, profits, wages, cash flow, which
fluctuated rather than showing negative trends throughout the POI. For instance, the domestic
industry's production capacity increased from 751,668 t ons in 1999 and 2000 to 754,168 tons in 2001
and then to 758,668 tons in 2002. 274 Operating income rose from a loss of [[**]] million KRW in
2000 to a profit of [[**]] KRW in 2001 and further to a profit of [[**]] KRW in 2002. 275 Average
wages constantly grew throughout the POI, rising from [[**]] KRW in 1999 to [[**]] KRW in the
first half of 2003. Cash flows increased from [[ **]] million KRW in 2000 to [[**]] million KRW in
2001 and to [[**]] million KRW in 2002
276.277

268 See, for instance, Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and
Sections of Iron or Non-Alloy Steel and H-Beams from Poland ("Thailand – H-Beams "), WT/DS122/AB/R,
269 See, for instance, Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from
Turkey ("Egypt –Steel Rebar "), WT/DS211/R, adopted 1 October 2002, para.7.236.
270 Ibid., para. 7.44.
Applying this standard to the facts of the case before it, the panel in Egypt –Steel Rebar found that the
Egyptian IA had "failed to evaluate productivity, actual and potential negative effects on cash flow, employment,
wages, and ability to raise capital or investments." Ibid., para. 7.51.
271 Exhibit KOR-15A at 13-15.
272 Exhibit KOR-13A at 45-51.
273 Exhibit KOR-15A at 15. In response to questioning from the Panel as to where in its final
determinations the KTC discussed the relevance of the injury factors set out in Article 3.4, Korea referred to the
same sections of the Final Investigation Report and the Final Determination cited above. See, Response of
Korea to Question 59 from the Panel Following the First Meeting.
274 Final Investigation Report (Exhibit KOR-13A at 45).
275 Final Investigation Report (Exhibit KOR-13A at 47).
276 Korea requests that the data in square brackets be treated as confidential.
277 Final Investigation Report (Exhibit KOR-13A at 50).

7.272 We do not suggest that these data precluded th e KTC from making an affirmative finding of
material injury in the investigation at issue. Ho wever, we are of the view that the KTC failed to
properly evaluate the relevance of these injury fact ors in making its conclusion regarding the material
injury suffered by the Korean industry. We consider that the IA's obligation to evaluate all relevant
economic factors under Article 3.4 shall be read in conjunction with the overarching obligation to
carry out an "objective examination" on the basis of "positive evidence" as set out under Article 3.1.
Therefore, the obligation to analyse the mandatory list of fifteen factors under Article 3.4 is not a
mere "checklist obligation" consisting of a mechanical exercise to make sure that each listed factor
has somehow been addressed by th e IA. We recognize that the relevance of each one of these injury
factors may vary from one case to the other. The f act remains, however, that Article 3.4 requires the
IA to carry out a reasoned analysis of the state of the industry. This analysis cannot be limited to a
mere identification of the "relevance or irrelevan ce" of each factor, but rather must be based on a
thorough evaluation of the state of the industry. The analysis must explain in a satisfactory way why
the evaluation of the injury factors set out under Ar ticle 3.4 lead to the determination of material
injury, including an explanation of why factors which would seem to lead in the other direction do
not, overall, undermine the conclusion of material injury.
278
7.273 In the investigation at issue, we note that the KTC did not provide any analysis which
adequately explains why the data collected with r espect to the Article 3.4 injury factors lead to a
determination of material injury, except the stat ement found in the KTC's Final Determination that
"there exists material injury to the domestic i ndustry, such as reduced production quantity, reduced
sales quantity, increased inventory, reduced sales am ount, low operating income ratio, and reduced
employment etc."279 As we pointed out above, the IA's dete rmination may find certain injury factors
to be more relevant than others in a given inves tigation. However, the bottom line is that it has to
evaluate the data pertaining to each factor set out under Article 3.4. Consequently, since the KTC did
not adequately evaluate the injury factors, especia lly those that showed a positive trend, and explain
their relevance in the determination of material in jury, we find that it acted inconsistently with its
obligations under Article 3.4 of the Agreement.
7.274 We note that Indonesia argued that the KTC's fa ilure to evaluate all injury factors also
violated Article 3.1 of the Agreement.280 It seems to us that Indonesia's claim under Article 3.1 in this
regard is dependent on its main cl aim under Article 3.4. Having foun d a violation of Article 3.4 in
this regard, we consider that a finding of incons istency with respect to Article 3.1 would neither

278 We find support for our approach in the following finding of the panel in Thailand – H-Beams:
"We are of the view that the "evaluation of all relevant factors" required under Article 3.4
must be read in conjunction with the overarch ing requirements imposed by Article 3.1 of
"positive evidence" and "objective examination" in determining the existence of injury.
Therefore, in determining that Article 3.4 cont ains a mandatory list of fifteen factors to be
looked at, we do not mean to establish a mere "checklist approach" that would consist of a
mechanical exercise of merely ensuring that each listed factor is in some way referred to by
the investigating authority . It may well be in the circumst ances of a particular case that
certain factors enumerated in Article 3.4 are not relevant, that their relative importance or
weight can vary significantly from case to case, or that some other non-listed factors could be
deemed relevant. Rather, we are of the view that Article 3.4 requires the authorities properly
to establish whether a factual basis exists to support a well-reasoned and meaningful analysis

of the state of the industry and a finding of injury. This analysis does not derive from a mere
characterization of the degree of "relevance or irrelevance" of each and every individual
factor, but rather must be based on a thorough evaluation of the state of the industry and, in
light of the last sentence of Article 3.4, must contain a persuasive explanation as to how the
evaluation of relevant factors led to the determination of injury." (footnote omitted, emphasis
added).
Panel Report, Thailand – H-Beams, supra, note 247, para. 7.236.
279 Supra, note 273.
280 See, for instance, First Written Submission of Indonesia, para. 176.

elucidate the scope of that provision nor assist in any meaningful way in the implementation of our
finding. We therefore need not, and do not, make any finding on this aspect of Indonesia's claim.
(c) KTC's Causation Analysis
7.275 Indonesia puts forward a number of arguments in the context of its claim regarding the KTC's
causation analysis in the investigation at issue. Firstly, Indonesia submits that the KTC failed to
consider the decrease in the volume of dumped imports in the first half of 2003. Secondly, it did not
consider the fact that prices of dumped imports remained above those of the Korean domestic industry
for long periods during the POI. Thirdly, the KTC failed to consider whether or not imports from
other sources caused the injury suffered by the Korean producers. Fourthly, the KTC did not take into
account the decline in the Korean industry's exports of the subject product. With respect to its non-
attribution analysis, Indonesia also argues that the KTC failed to consider the impact of the domestic
industry's excessive investments, the decline in the domestic industry's internal consumption and the
facts that the prices of dumped imports remained above those of the domestic industry and their
volume declined in the POI.
7.276 Korea submits that the KTC's causation analysis complied with the requirements of
Article 3.5. The KTC based its causation analysis mainly on the impact of dumped imports on the
domestic industry's market share. The KTC also ev aluated the impact of the other factors cited by
Indonesia.
7.277 We recall our finding above (para. 7.273) th at the KTC acted inconsistently with its
obligations under Article 3.4 of the Agreement with respect to the evaluation of the impact of dumped
imports on the Korean industry. Given this incons istency we have found with respect to the KTC's
injury determination in the investigation at issue, we do not consider that addressing Indonesia's claim
regarding the KTC's causation analysis would provide any further assistance in resolving the dispute
before us because that analysis was based on a WTO- inconsistent injury determination. We therefore
do not address Indonesia's claim on causation.
(d) KTC's Treatment of the Korean Industry's Imports of the Subject Product as Dumped Imports
7.278 Indonesia asserts that the KTC should have cons idered the fact that the Korean producers
were importing substantial quantities of the subject product from Indonesia as an injury factor under
Article 3.4 of the Agreement. Second, Indonesia s ubmits that the KTC should have considered this
fact, under Article 3.5, as a potential other factor th at might have contributed to the material injury
suffered by the Korean industry.
7.279 Korea submits that there is no legal basis in the Agreement to support Indonesia's view that
the fact that Korean producers imported the subj ect product from the subject countries has to be
evaluated as an injury factor under Article 3.4 of the Agreement. More generally with regard to
imports made by the Korean producers, Korea notes that Article 4.1 of the Agreement gives the IA the
discretion to exclude domestic producers who are impor ters of the subject product in an anti-dumping
investigation from the domestic industry. Korea submits that in accordance with the mentioned
provision of the Agreement, the KTC excluded Korean producers, importing significant quantities of
the subject product from the countries under investig ation, from the domestic industry for purposes of
the investigation at issue. It follows that the remaining domestic producers did not have significant
imports of the subject product into Korea from the countries under investigation. Therefore, not
analyzing the impact of these imports under Article 3.5 was not inconsistent with that provision.
7.280 We recall the provisions of Article 3.4:
"The examination of the impact of th e dumped imports on the domestic industry
concerned shall include an evaluation of all relevant economic factors and indices

having a bearing on the state of the industry, including actual and potential decline in
sales, profits, output, market share, productivity, return on investments, or utilization
of capacity; factors affecting domestic prices; the magnitude of the margin of
dumping; actual and potential negativ e effects on cash flow, inventories,
employment, wages, growth, ability to raise capital or investments. This list is not
exhaustive, nor can one or several of these factors necessarily give decisive
guidance."
7.281 Article 3.4 sets out a list of factors that have to be taken into account by the IA in evaluating
the impact of dumped imports on the state of th e domestic industry in importing Member. We note
that the fact that the domestic industry also impor ts the subject product from the countries subject to
the investigation is not mentioned as an injury factor under Article 3.4. We also note, however, that
this list is not exhaustive. That is, Article 3.4 do es not preclude the possibility that there may be other
factors that should be analyzed by the IA, depending on the circumstances of a specific investigation.
However, we are puzzled by Indonesia's argument that the KTC should have treated the fact that the
Korean producers imported the subject product from th e subject countries as an injury factor under
Article 3.4. We do not see in what sense this fact could qualify as an injury factor under Article 3.4.
In response to questioning from the Panel, Indonesia st ated that the fact that Korean producers were
importing the subject product demonstrated their st rategy to move from the subject product to higher
value-added products. This, in Indonesia's view , should have been considered as an indicator
regarding the state of the Korean industry.
281 We do not agree. We do not see the factor cited by
Indonesia as one that describes the state of the Korean industry. Rather, it seems to reflect a business
decision made by the Korean industry, which may or may not have been the result of dumping. Thus,
in our view, rather than being an injury factor to be considered under Article 3.4, this issue would
logically be addressed, if at all, in the context of the KTC's causation analysis under Article 3.5. We
therefore reject Indonesia's argument under Article 3.4 and turn to its argument under Article 3.5.
7.282 Article 3.5 provides:
"It must be demonstrated that the 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 shall 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 other 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 pa tterns of consumption, trade restrictive
practices of and competition between the foreign and domestic producers,
developments in technology and the export performance and productivity of the
domestic industry."
7.283 We note that Article 3.5 requires that the IA in an anti-dumping investigation determine that
dumped imports are the cause of the injury suffered by the domestic industry. It does not, however,
set out a methodology through which that determinati on has to be made. The second sentence states
that the causation analysis has to be carried out on th e basis of all available evidence before the IA. It
follows that if the IA demonstrates, on the basis of positive evidence, that dumped imports are causing
the injury suffered by the domestic industry, the re quirement of the first sentence of Article 3.5 would
be satisfied. The third sentence of Article 3.5, th e so-called non-attribution clause, stipulates that the
IA has to analyze whether there are factors other than dumped imports that are also contributing to the
injury and to refrain from attributing that injury to dumped imports.

281 Response of Indonesia to Question 57(b) from the Panel Following the First Meeting.

7.284 Indonesia contends that the KTC acted inconsis tently with Article 3.5 by not assessing the
impact of imports made by Korean producers as part of its non-attribution analysis under that article.
Korea submits that since the KTC excluded the pro ducers that had significant imports of the subject
product from the subject countries, the remaining producers did not have significant imports.
Therefore, there could be no violation of Article 3.5 stemming from the KTC's failure to take these
imports into account as part of its causation analysis under that article.
7.285 We note that the record indicates that the KT C did in fact exclude two of the Korean
producers who imported significant amounts of the s ubject product from the subject countries, i.e.
Kye Sung Paper Co., Ltd. and Hansol Patech Co., Lt d., from the scope of the domestic industry. The
remaining 14 Korean producers imported the subject product from the subject countries in 1999 and
2000. Their imports ceased as of 2001. The sh are of these domestic producers in total dumped
imports were [[**]] and [[**]] per cent in 1999 and 2000, respectively
282.283 We note that the share of
the Korean producers making up the domestic industry in the total dumped imports declined from
1999 to 2000 and then stopped completely from 2001 on. Thus, by the time of the KTC's
determination, imports by the Korean producers making up the domestic industry had been reduced to
zero and could not have been causing injury. Even assuming that in theory imports by the domestic
industry might be considered as an "other factor" caus ing injury, on the basis of the facts of this case
we cannot conclude that the KTC was required to treat imports by the domestic producers which had
ceased as of 2001 as such an "other factor". We th erefore do not agree with Indonesia's assertion that
the KTC was required to treat these imports as a potentia l other factor that could have contributed to
the injury suffered by the Korean industry under Article 3.5 of the Agreement.
7.286 We note that in the context of this claim, I ndonesia also raises its argument about the KTC's
alleged failure to properly calcu late total domestic consumption.
284 We recall that we have found
Indonesia's claim regarding the KTC's analysis of the volume of dumped imports to be outside our
terms of reference ( supra, para. 7.264). Indonesia's argument regarding the calculation of total
domestic consumption concerns the KTC's analysis of the volume of dumped imports relative to
domestic consumption. It follows that this aspect of Indonesia's claim is outside our terms of
reference. We therefore do not make any finding in that regard.
7.287 Finally in this regard, we note Indonesia's argument that the KTC should have excluded
imports made by Korean producers from the scope of dumped imports for purposes of its injury
determination in the investigation at issue.
285 In this context, Indonesi a refers to imports made by
producers making up the domestic industry. 286 However, we are unaware of any provision in the
Agreement which could support the proposition that dumped imports made by the domestic industry
have to be excluded from the scope of dumped imports for purposes of the IA's injury determination.
Imports from sources subject to an anti-dumping in vestigation may properly be treated as dumped
imports irrespective of the identity of the importe rs making these imports. We therefore do not agree
with Indonesia's view in this regard either.
7.288 On the basis of the foregoing, we reject Indon esia's claim that the KTC acted inconsistently
with Articles 3.4 and 3.5 of the Agreement with re gard to the treatment of dumped imports made by
the Korean producers from the subject countries.

282 Korea requests that the data in square brackets be treated as confidential.
283 See, the chart provided in the Response of Korea to Question 57 from the Panel Following the First
Meeting.
284 See, Second Written Submission of Indonesia, para. 116.
285 First Written Submission of Indonesia, para. 189.
286 Response of Indonesia to Question 58(a) from the Panel Following the First Meeting.

(e) KTC's Treatment of Imports from Indah Kiat as Dumped Imports
7.289 Indonesia submits that the KTC acted inconsistently with Articles 3.1, 3.2 and 3.5 of the
Agreement by treating imports from Indah Kiat as dumped imports in this investigation because the
preliminary dumping margin calculated for this company was de minimis. Since Indah Kiat was the
largest Indonesian exporter of the subject product into Korea, this inclusion significantly increased the
amount of dumped imports in the context of the KTC's injury determination. Korea states that since
the KTC treated the three Sinar M as Group companies as one exporter in its dumping determinations,
it properly included all expor ts made by these three companies as dumped imports for purposes of its
injury determination, including Indah Kiat's.
7.290 We recall our finding above (paras. 7.168-7.171) that the KTC did not act inconsistently with
Articles 6.10 and 9.3 of the Agreement with respect to treating the three Sinar Mas Group companies
as a single exporter for purposes of its dumping determinations in the investigation at issue. That is,
we found that the KTC properly treated them as one exporter and assigned one margin of dumping to
them.
7.291 Further, we note the following statement from I ndonesia with regard to the nature of this
claim:
"Indonesia agrees that Article 5.8 applies to final, as opposed to preliminary,
determinations of dumping. Thus, its clai m that the KTC should have terminated the
investigation with respect to Indah Kiat is dependent on its claims that the KTC
improperly “collapsed” Indah Kiat into a “single economic entity” and failed to
calculate an individual margin of dumping for Indah Kiat under Article 6.10 of the
AD Agreement. If the Panel finds that the KTC improperly “collapsed” these
exporters and hence improperly failed to cal culate an individual margin of dumping
for Indah Kiat, Indonesia requests that the Pa nel rule on its claims under Article 5.8,
as well as its related claims under Articl es 3.1, 3.2 and 3.5 of the Agreement
described in paragraph 196 of its first written submission."
287
7.292 We note that Indonesia submits that the Panel should address this claim if it finds that treating
the three Sinar Mas Group companies as a single expor ter was WTO-inconsistent. Given that we did
not find that treating the three Sinar Mas Group companies as a single exporter was WTO-inconsistent
and taking into consideration Indo nesia's above-quoted statement, we need not, and do not, make any
finding on this claim.
M. KTC'S ALLEGED FAILURE TO ABIDE BY THE DI SCLOSURE OBLIGATIONS CONTAINED IN
ARTICLES 6.1, 6.2, 6.4 AND 6.9 OF THE AGREEMENT WITH RESPECT TO ITS INJURY
DETERMINATION
1. Arguments of Parties
(a) Indonesia
7.293 Indonesia argues that at the final determination stage of the investigation at issue, the KTC
extended the POI for the injury determination to cove r the first half of 2003, but it did not provide the
Indonesian exporters with an opportunity to comment on the data relating to the additional period.
This deprived these exporters of their right to comme nt on this decision, in violation of Articles 6.1,
6.1.2, 6.4 and 6.9 of the Agreement. Indonesia furt her contends that the KTC's failure to disclose to
the Indonesian exporters the results of the techni cal test carried out by the Korean Agency for
Technology and Standards and those of a customer su rvey, which were used in the context of the

287 Response of Indonesia to Question 48 from the Panel Following the First Meeting.

KTC's like product determination, was in violation of Articles 6.2, 6.4, 6.9 and 12.2 of the Agreement.
Indonesia also asserts that the KTC acted inconsistently with Articles 6.4 and 6.9 of the Agreement by
failing to inform the Indonesian exporters of it s decision to change the basis of its injury
determination from threat to material injury. Finally, Indonesia argues that by not disclosing the
results of its analysis regarding the price effect s of dumped imports, the KTC acted inconsistently
with Articles 6.4 and 6.9 of the Agreement.
(b) Korea
7.294 Korea asserts that the Indonesian exporters we re given a full opportunity to comment on the
injury data concerning the first half of 2003. This was done through the disclosure of the KTC's
Interim Report to the interested parties during the meeting held on 27 August 2003. Regarding the
results of the technical test and the customer su rvey, Korea contends that the KTC treated these two
documents as confidential and therefore could not disclose them to the Indonesian exporters.
2. Arguments of Third Parties
(a) United States
7.295 Regarding the disclosure requirements of Article 6.9, the United States argues that nothing in
that article requires the IA to disclose its legal re asoning. The disclosure requirements of Article 6.9
are limited to the essential facts under consideration wh ich form the basis of the IA's determination.
More specifically, the United States submits that Article 6.9 does not require the IA to disclose
whether its injury determination will be based on material injury or threat thereof.
3. Evaluation by the Panel
(a) Disclosure of the Data Relating to the First Half of 2003
7.296 Indonesia submits that the KTC violated Articles 6.1, 6.4 and 6.9 of the Agreement by not
giving the Indonesian exporters an opportunity to see, and comment on, the data relating to the first
half of 2003. Korea submits that the Indonesian e xporters had an opportunity to comment on the data
relating to the first half of 2003 as they received, in the public hearing held on 27 August 2003, a copy
of the non-confidential version of the KTC's In terim Report. Korea also submits that the
representatives of the Sinar Mas Group made comments on that report.
7.297 We note that in its second oral statement, Indon esia pointed out that it withdrew this aspect of
its claim because the document submitted by Kor ea in Exhibit KOR-50 corroborated Korea's position
in this regard.
288 We therefore do not make any finding with respect to this aspect of Indonesia's
claim.
(b) Disclosure of the Results of the Technical Test and the Customer Survey Regarding the Like
Product Issue
7.298 Indonesia notes that, in the context of its like pr oduct determination, the KTC cited the results
of a technical test carried out by the Korean Ag ency for Technology and Standards and those of a
customer survey. According to Indonesia, the KTC' s failure to inform the Indonesian exporters of the
substance of these two documents was in violation of Articles 6.2, 6.4, 6.9 and 12.2 of the Agreement.
Korea contends that Indonesia's claim in this re gard is without merit because these two documents
contained confidential information, which could not be disclosed by the KTC.

288 Second Oral Statement of Indonesia, para. 93.

(i) Article 6.4
7.299 We note that Article 6.4 provides:
"The authorities shall whenever practicable provide timely opportunities for all
interested parties to see all information that is relevant to the presentation of their
cases, that is not confidential
 as defined in paragraph 5, and that is used by the
authorities in an anti-dumping investigation, and to prepare presentations on the basis
of this information." (emphasis added)
7.300 Article 6.4 stipulates that interested parti es have the right to see all non-confidential
information that is relevant to the presentation of th eir cases in an investigatio n. When an interested
party requests to see that information, Article 6.4 re quires that they be allowed to see it, to the extent
this is practicable for the IA. C onsequently, in order to establish a prima facie case with respect to
this particular claim, Indonesia has to demons trate that the Sinar Mas Group requested to see non-
confidential information on the record of the inves tigation at issue and that the KTC declined such
request.
7.301 In this regard, we note Indonesia's assertion that , in its letter dated 18 October 2003, the Sinar
Mas Group requested the disclosure of the results of a technical test carried out by the Korean Agency
for Technology and Standards and those of a custom er survey and that the KTC never responded.
That letter provides in pertinent parts:
"We are in receipt of non-confidential versions of the Commission's Final
Investigation Reports on Dumping Rate, Dumping and Injury and its Final Resolution
on Dumping and Injury, all of 24 September 2003.
We request your prompt supply of confidential information pertaining to findings in
respect of Indah Kiat, Pindo Deli and Tjiwi Kimia appropriately not included in the
non-confidential versions but important to our understanding of the findings. The
information required is outlined hereunder:

2. Final Investigation Report on Dumping and Injury

a) Details of comparison of physical pr operties between domestic products and
dumped imports per the table in Section II.3. A as they relate to the exports of Pindo
Deli, Indah Kiat and Tjiwi Kimia."289 (emphasis added)
7.302 We note that the letter acknowledges that the Sinar Mas Group received the non-confidential
version of the KTC's Final Investigation Report. Indeed, it clearly requests to see confidential
information regarding the KTC's like product determ ination found in Section II.3.A of the Final
Investigation Report. In our view, this indicat es that the Sinar Mas Group recognized that this
information was appropriately not included in the n on-confidential version of the Final Investigation
Report. It is therefore clear that what the Sina r Mas Group requested to see was the texts of these two
documents, which were treated by the KTC as confid ential. The issue is whether or not the KTC's
refusal to make these documents available to the Sinar Mas Group was inconsistent with Article 6.4 of
the Agreement.
7.303 Indonesia has made no claims under Article 6.5 of the Agreement regarding the treatment of
these documents as confidential. As noted above, Article 6.4 clearly states that the right to see the

289 Exhibit IDN-31.

information on the record is limited to the non-conf idential information. Since the Sinar Mas Group's
request pertained to confidential information, we are of the view that there is no legal basis for
Indonesia's claim under Article 6.4 in light of the acknowledged facts. We therefore reject this aspect
of Indonesia's claim.
(ii) Article 6.2
7.304 Indonesia asserts that by not disclosing the resu lts of the technical test carried out by the
Korean Agency for Tech nology and Standards and those of the customer survey, the KTC also
violated the requirements of Article 6.2 of the Agr eement. According to Indonesia, in the absence of
this information, the Indonesian exporters were unable to defend their interests.
7.305 Article 6.2 of the Agreement reads:
"Throughout the anti-dumping investigation all interested parties shall have a full
opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interest ed parties to meet those parties with
adverse interests, so that opposing views may be presented and rebuttal arguments
offered. Provision of such opportunities must take account of the need to preserve
confidentiality and of the convenience to the parties. There shall be no obligation on
any party to attend a meeting, and failure to do so shall not be prejudicial to that
party's case. Interested parties shall also have the right, on justification, to present
other information orally." (emphasis added)
7.306 We note that Article 6.2 addresses interested parties' right to defend their interests in an
investigation. To that end, Artic le 6.2 stipulates that interested parties shall be given the opportunity
meet other interested parties with opposing views about the investigation to be able to exchange
views. We do not consider Article 6.2 to address interested parties' right to see the information on the
record. That right is addressed in Article 6.4, which has also been invoke d by Indonesia in these
proceedings. We therefore consider that there is no legal basis for Indonesia's claim under Article 6.2
in light of the acknowledged facts. We therefore reject this aspect of Indonesia's claim too.
7.307 Assuming arguendo that Article 6.2 could be interpreted as relating to interested parties' right
to see the information on the record, Indonesia's claim would still fail because, by its own terms,
Article 6.2 excludes confidential information from the scope of the right it creates. In this regard, we
note again that Indonesia has not challenged the conf idential treatment of these two documents by the
KTC under Article 6.5 of the Agreement. Thus, there would be no legal basis for a claim under
Article 6.2 on the basis of the facts of this case.
(iii) Article 6.9
7.308 Indonesia asserts that by not disclosing the resu lts of the technical test carried out by the
Korean Agency for Tech nology and Standards and those of the customer survey, the KTC also
violated the requirements of Article 6.9 of the Agre ement. In response to questioning from the Panel
regarding the nature of this aspect of its claim, Indonesia stated that its claim under Article 6.9 would
only apply if the KTC made a comparison between PPC and WF generally.
290
7.309 The text of the KTC's Final Investigation Report demonstrates that the KTC did not make a
comparison between PPC and WF generally. The KTC compared imported PPC and WF with Korean
PPC and WF, respectively, and concluded that "[t] he domestic products [were] identical to the

290 Response of Indonesia to Question 29 from the Panel Following the Second Meeting.

product under investigation in terms of the pr oduct name, definition, usage and manufacturing
process."
291
7.310 Thus, as the factual basis Indonesia considers nece ssary for its claim does not exist, we need
not, and do not, make a finding regarding this aspect of Indonesia's claim.
(iv) Article 12.2
7.311 Indonesia asserts that by not disclosing the resu lts of the technical test carried out by the
Korean Agency for Tech nology and Standards and those of the customer survey, the KTC also
violated Article 12.2 of the Agreement.
7.312 We note that Article 12.2 reads:
"Public notice shall be given of any prel iminary or final determination, whether
affirmative or negative, of any decision to accept an undertaking pursuant to
Article 8, of the termination of such an undertaking, and of the termination of a
definitive anti-dumping duty. Each such no tice shall set forth, or otherwise make
available through a separate report, in suffi cient detail the findings and conclusions
reached on all issues of fact and law considered material by the investigating
authorities. All such notices and reports shall be forwarded to the Member or
Members the products of which are subject to such determination or undertaking and
to other interested parties known to have an interest therein."
7.313 Article 12.2.2, which sets out additional deta il concerning the public notice on the imposition
of a final anti-dumping duty, reads in relevant part:
"A public notice of conclusion or suspensi on of an investigation in the case of an
affirmative determination providing for th e imposition of a definitive duty or the
acceptance of a price undertaking shall contai n, or otherwise make available through
a separate report, all relevant information on the matters of fact and law and reasons
which have led to the imposition of final measures or the acceptance of a price
undertaking, due regard being paid to the requirement for the protection of
confidential information." (emphasis added)
7.314 We note that Article 12.2.2 clearly states that th e IA's disclosure obligation with respect to a
public notice imposing a definitive anti-dumping duty is subject to the protection of confidential
information. With that in mind, we now turn to the facts of the investigation at issue.
7.315 We note that the public notice of imposition of the anti-dumping duty in question does not
specifically address the like product issue. We note , however, that the Final Determination and the
Final Investigation Report were atta ched to the final public notice. 292 That is, these two reports were
part of the public notice itself. Section II.3.A of the KTC's Final Investigation Report contains a
sufficiently detailed description of the KTC's like pr oduct determination. We recall that the two tests
were confidential and that Indonesia has not raised any claim under Article 6.5 of the Agreement
regarding their confidentiality.
7.316 Article 12.2 does not allow an IA to disclose confidential information in its public notice
imposing a final measure. Therefore, Indonesia failed to establish a legal basis for its claim in light of
the facts acknowledged. We therefore reject this aspect of Indonesia's claim.

291 Final Investigation Report (Exhibit KOR-13A at 4).
292 See, Exhibit KOR-16.

(c) Change With Respect to the Basis of the KTC's Injury Determination
7.317 Indonesia alleges that the KTC acted inconsis tently with Articles 6.4 and 6.9 of the
Agreement by failing to inform the Indonesian export ers of its decision to change the basis of its
injury determination from threat to material injury.
7.318 In its second written submission, however, Indonesia withdrew this claim.293 We therefore do
not make any finding with regard to this claim.
(d) Failure to Disclose Findings Regarding the Price Effect of Dumped Imports
7.319 Indonesia argues that by not disclosing the results of its analysis regarding the price effects of
dumped imports, the KTC acted inconsistently with Articles 6.4 and 6.9 of the Agreement. Indonesia
asserts that although the Sinar Mas Group specifically requested to see this information, the KTC
never replied.294 In this regard, Indonesia refers to th e letter dated 18 October 2003, which reads in
pertinent parts:
"We are in receipt of non-confidential versions of the Commission's Final
Investigation Reports on Dumping Rate, Dumping and Injury and its Final Resolution
on Dumping and Injury, all of 24 September 2003.
We request your prompt supply of confidential information pertaining to findings in
respect of Indah Kiat, Pindo Deli and Tjiwi Kimia appropriately not included in the
non-confidential versions but important to our understanding of the findings. The
information required is outlined hereunder:

2. Final Investigation Report on Dumping and Injury
c) An indexed summary of the comparison of the resale prices of dumped products
and domestic products per section IV.2.c."295 (emphasis added)
7.320 Korea submits that the mentioned letter by th e Sinar Mas Group came more than three weeks
after the KTC had disclosed its final determination a bout the investigation at issue. Therefore, the
KTC did not respond to this letter.
7.321 We note that the Article 6.4 aspect of Indonesia's claim in this regard is very similar to its
claim under Articles 6.4 and 6.9 regarding the KTC's alleged failure to disclose the results of the
technical test carried out by the Korean Agency for Technology and Standards and those of the
customer survey in that they both concern a requ est to see confidential information on the record. In
its above-quoted letter, the Sinar Mas Group requests to see confidential information relating to the
KTC's analysis on the impact of the Indonesian expor ters' prices on those of the Korean industry.
That is, they acknowledge the confidential nature of that information.
7.322 We recall once again that Indonesia has made no claim under Article 6.5 of the Agreement
concerning the confidential treatment of these documen ts. As we stated above (para. 7.300), Article
6.4 clearly states that the right to see the information on the record is limited to the non-confidential
information. Since the Sinar Mas Group's request was directed at confidential information, we are of

293 Second Written Submission of Indonesia, para. 121; Response of Indonesia to Question 68 from the
Panel Following the First Meeting.
294 First Written Submission of Indonesia, paras. 202-203.
295 Exhibit IDN-31.

the view that Indonesia failed to establish a legal ba sis for its claim under Article 6.4 in light of the
facts acknowledged. We therefore reject this aspect of Indonesia's claim too.
7.323 Turning to the Article 6.9 aspect of Indonesia's clai m, we first note that parties agree that the
Sinar Mas Group received, as did others, the non-confidential version of the KTC's Final Investigation
Report on 1 October 2003.
296 Indonesia argues that the disclosure provided in that report with regard
to the price effect of dumped imports on the Kor ean industry was not sufficient to satisfy the
requirements of Article 6.9.
7.324 Article 6.9 provides:
"The authorities shall, before a final dete rmination is made, inform all interested
parties of the essential facts under consideration which form the basis for the decision
whether to apply definitive measures. Such disclosure should take place in sufficient
time for the parties to defend their interests." (emphasis added)
7.325 We note that, regarding the price effect of dumped imports, the non-confidential version of
the KTC's Final Investigation Report provides:
"Impact of the Dumped Imports on the Price of Domestic Products and
Likelihood of Increase in the Demand for Imports
The resale price of the dumped imports was lower than the sales price of the domestic
products by KRW ** thousand in 1999, w as higher than the sales price of the
domestic products by KRW * thousa nd and KRW ** thousand in 2000 and 2001,
respectively, but was lower than the sales price of the domestic products by KRW **
thousand in 2002 and was higher by KRW ** thousand in the first half of 2003."297
7.326 We also note that the above-quoted section of the report is followed by a chart that
demonstrates the changes in the prices of dumped im ports and the domestic producers in the form of
percentages over the POI. The core of Indonesia's cl aim is that the KTC's failure to include in this
chart the absolute figures with respect to the Korean industry's prices was inconsistent with
Article 6.9. Indonesia contends that since the prices of the Korean producers in this chart belonged to
the industry as a whole rather than individual producers, the KTC should have included them in the
chart.298
7.327 Since Indonesia has made no claim under Article 6.5 to challenge the KTC's decision to treat
the information on the prices of the Korean industry as confidential, we cannot make a finding with
regard to the confidentiality of those price data.
7.328 Regarding the conformity with Article 6.9 of the explanations provided in the mentioned
report, we consider that the trends in prices may be seen as one essential fact that established the basis
of the KTC's decision to apply the definitive anti-dumping duty at issue. We note that the report
explains trends in the prices of dumped imports and t hose of the Korean industry in the POI. We do
not agree with Indonesia's view that failure to include absolute figures for the Korean industry's prices
rendered this disclosure inconsistent with the requi rements of Article 6.9. We see no support in the
text of Article 6.9, or elsewhere in the Agreemen t, for Indonesia's proposition. We therefore reject
this aspect of Indonesia's claim too.

296 See, KTC's letter addressed to the Sinar Mas Group conveying the Final Investigation Report
(Exhibit KOR-38).
297 Exhibit KOR-13B at 55.
298 Response of Indonesia to Question 31 from the Panel Following the Second Meeting.

N. TREATMENT OF THE INFORMATION CO NTAINED IN THE DOMESTIC INDUSTRY 'S APPLICATION
AS CONFIDENTIAL
1. Arguments of Parties
(a) Indonesia
7.329 Indonesia argues that the KTC provided confiden tial treatment to the information submitted
in the Korean domestic industry's application for th e initiation of the investigation without requiring a
showing of good cause. This, in Indonesia's view, violated Articles 6.5, 6.5.1 and 6.5.2 of the
Agreement.
(b) Korea
7.330 Korea argues that the information submitte d by the Korean domestic industry in the
application for the initiation of the investigation was by nature confidential and therefore could not be
disclosed by the KTC pursuant to Article 6.5 of the Agreement. Accordin g to Korea, since the
information submitted in the application was by nature confidential, no good cause needed to be
shown for that information to be treated as confidential under Article 6.5.
2. Evaluation by the Panel
7.331 As an initial factual matter, we note that I ndonesia agrees that the applicants submitted a non-
confidential version of their application.
299 Indonesia argues, however, that the non-confidential
version was inconsistent with Ar ticle 6.5 of the Agreement in that the KTC failed to require good
cause to treat certain information in the application as confidential. In this regard, Indonesia cites
information relating to the allega tions of dumping and injury by the domestic industry, which was
either deleted or indexed in the non-confidential version of the application.
7.332 We also note that Indonesia is not taking issu e with Korea's assertion that information in the
application cited by Indonesia was by nature confid ential. That is, Indonesia does not disagree that
this information could appropriately be treated as confidential. Parties do disagree, however, as to
whether or not the Agreement requires that good cau se be shown for the confidential treatment of the
information that is by nature confidential. Indon esia asserts that good cause has to be shown in these
circumstances. Korea disagrees with Indonesia and contends that no good cause is required for
information that is by nature confidential.
7.333 We note that Article 6.5 of the Agreement reads in pertinent parts:
"Any information which is by nature conf idential (for example, because its disclosure
would be of significant competitive advantage to a competitor or because its
disclosure would have a significantly a dverse effect upon a person supplying the
information or upon a person from whom that person acquired the information), or
which is provided on a confidential basis by parties to an investigation shall, upon
good cause shown, be treated as such by the au thorities. Such information shall not
be disclosed without specific permissi on of the party submitting it." (footnote
omitted)
7.334 We note that Article 6.5 provides for the confid ential treatment of two types of information:
information which is confidential by nature a nd information which, although not confidential by
nature, has been submitted by an interested party on a confidential basis. Article 6.5 stipulates that

299 Response of Indonesia to Question 69 from the Panel Following the First Meeting.

both types of confidential information may not be di sclosed by the IA without specific authorization
by the party submitting it.
7.335 The only issue presented by this claim is whet her or not the requirement of showing good
cause in order for information to be treated as confidential under Article 6.5 applies to information
that is by nature confidential as well as to info rmation that is submitted on a confidential basis. We
note that the phrase "upon good cause shown" is preced ed by both types of confidentiality in the text
of Article 6.5. We are therefore of the view that the text of Article 6.5 makes it clear that the good
cause requirement applies to both categories of confidential information.
300 That is, some showing of
good cause is necessary for the confiden tial treatment of information that is by nature confidential.
The degree of that requirement may, however, depe nd on the type of information concerned. In the
investigation at issue, there is no indication that the KTC requested that an y good cause be shown in
order to treat as confidential information submitted in the a pplication, which was by nature
confidential. We therefore conclude that the KT C acted inconsistently with Article 6.5 in the
investigation at issue by not requiring that good cause be shown with respect to the information
submitted in the application which was by nature confidential.301
7.336 Before concluding our findings concerning th e specific claims raised by Indonesia, we note
Indonesia's assertion that to the extent that the Ko rean measure was inconsistent with the provisions
of the Agreement cited by Indonesia in connection with each of its specific claims, it was also
inconsistent with the requiremen t of Article 1 of the Agreement to impose anti-dumping measures in
accordance with the provisions of the Agreement. Indonesia has not raised an independent claim
based on the obligations set out in Article 1. Rath er, we understand Indonesia's claim to be dependent
on our finding of an inconsistency with respect to the specific claims raised by Indonesia. In our
view, to the extent that we have found an inconsiste ncy with respect to the sp ecific claims raised by
Indonesia, making an additional ruling under Article 1 would neither elucidate the scope of that
provision nor assist in any meaningful way in the implementation of our finding. With respect to
Indonesia's claims where we have found no inconsistency, we would not need to make a finding under
Article 1 because of the dependent nature of Indonesia's claim under that Article.
7.337 We therefore need not, and do not, make any finding under Article 1 of the Agreement.
VIII. CONCLUSIONS AND RECOMMENDATIONS
8.1 In light of the above findings, we conclude that:
(a) In respect of the KTC's dumping determination:
(i) The KTC did not
 act inconsistently with Article 6.8 of the Agreement in
resorting to facts available with respect to Indah Kiat and Pindo Deli,

300 We find support for our proposition in the following finding of the panel in Guatemala – Cement II:
"Instead, the requirement to show "good cause" appears to apply for both types of confidential
information, such that even information "which is by nature confidential" cannot be afforded
confidential treatment unless "good cause" has been shown." (footnote omitted)
Panel Report, Guatemala – Definitive Anti-Dumping Measures on Grey Portland Cement from
Mexico ("Guatemala – Cement II "), WT/DS156/R, adopted 17 November 2000, DSR 2000:XI, 5295,
para. 8.219.
301 We note that Indonesia also argued that the KTC acted inconsistently with Articles 6.5, 6.5.1 and
6.5.2 of the Agreement by failing to require a non-confidential version of the application from the applicants.
See, First Written Submission of Indonesia, para. 206. We note, however, that Korea submitted, in Exhibit
KOR-1B, the non-confidential version of the application. In response to questioning from the Panel in this
regard, Indonesia stated that "its claims concern the nature of this non-confidential version." See, Response of
Indonesia to Question 69 from the Panel Following the First Meeting. We therefore do not make any finding on
this aspect of Indonesia's claim.

(ii) The KTC did not act inconsistently with Article 6.8 of the Agreement and
paragraph 3 of Annex II in disregar ding domestic sales data submitted by
Indah Kiat and Pindo Deli,
(iii) The KTC did not act inconsistently with Article 6.8 of the Agreement and
paragraph 6 of Annex II with respect to informing Indah Kiat and Pindo Deli
of its decision to reject their domestic sales data and giving them an
opportunity to provide further explanations,
(iv) The KTC did not act inconsistently with Article 2.2 of the Agreement by
using constructed normal values for Indah Kiat and Pindo Deli,
(v) The KTC acted inconsistently with Article 6.8 of the Agreement and
paragraph 7 of Annex II with regard to exercising special circumspection in
its use of information from secondary sources instead of domestic sales data
provided by Indah Kiat and Pindo Deli,
(vi) The KTC acted inconsistently
 with Article 6.8 of the Agreement and
paragraph 7 of Annex II, but did not act inconsistently with Article 6.8 of the
Agreement and paragraph 6 of Annex II with respect to determining Tjiwi
Kimia's margin of dumping,
(vii) The KTC did not act inconsistently with Article 2.4 of the Agreement with
respect to the alleged difference stemming from CMI's involvement in
domestic sales of Indah Kiat and Pindo Deli, which allegedly affected price
comparability,
(viii) The KTC did not
 act inconsistently with Articles 6.10 and 9.3 of the
Agreement by treating the three Sinar Mas Group companies as a single
exporter and assigning a single margin of dumping to them,
(ix) The KTC acted inconsistently
 with Article 6.7 of the Agreement with respect
the disclosure of the verification results,
(x) The KTC acted inconsistently with Article 6.4 of the Agreement with regard
to disclosing details of the calculations of the constructed normal values for
Indah Kiat and Pindo Deli,
(xi) Indonesia failed to make a prima facie case with respect to its claim under
Article 12.2 of the Agreement with rega rd to the KTC's alleged failure to
disclose details of the calculations of the constructed normal values for Indah
Kiat and Pindo Deli,
(xii) The KTC did not act inconsistently with Articles 2.6, 3.1, 3.2, 3.4, 3.5 and
3.7 of the Agreement of the Agreement with respect to its like product
definition,
(b) In respect of the KTC's injury determination:
(i) The KTC did not
 act inconsistently with Articles 3.1, 3.2 and 3.4 of the
Agreement with respect to its price analysis,
(ii) The KTC acted inconsistently with Article 3.4 of the Agreement with respect
to its assessment of the impact of dumped imports on the domestic industry,

(iii) The KTC did not
 act inconsistently with Articles 3.4 and 3.5 of the
Agreement with regard to the treatment of the dumped imports made by the
Korean producers from the subject countries,
(iv) The KTC did not act inconsistently with Articles 6.2, 6.4 and 12.2 of the
Agreement with respect to disclosing the results of the technical test carried
out by the Korean Agency for Techno logy and Standards and those of a
customer survey, and did not act inconsistently with Articles 6.4 and 6.9 of
the Agreement with respect to disclos ing its determination concerning the
effect of the prices of dumped imports on the Korean industry,
(v) The KTC acted inconsistently with Article 6.5 of the Agreement by not
requiring that good cause for confidential treatment be shown with respect to
the information submitted in the application which was by nature
confidential,
(c) We decline to address the following claims on the grounds of judicial
economy:
(i) Alleged violation by the KTC of Ar ticle 5.8 of the Agreement by not
terminating the investigation vis-à-vis Indah Kiat,
(ii) Alleged violation by the KTC of its disclosure obligations under Article 6.9
of the Agreement with respect to its dumping determinations,
(iii) Alleged violation by the KTC of Article s 3.1 and 3.5 of the Agreement with
respect to its causation analysis,
(iv) Alleged violation by the KTC of Article s 3.1, 3.2 and 3.5 of the Agreement
by treating imports from Indah Kiat as dumped imports,
(v) Alleged violation by the KTC of Article 6.9 of the Agreement with respect to
disclosing the results of the technical t est carried out by the Korean Agency
for Technology and Standards and those of a customer survey,
(vi) Alleged consequent violation by the KTC of Article 1 of the Agreement
stemming from the violations of the provisions of the Agreement cited in
connection with Indonesia's specific claims,
(d) We do not address the following claims because they have been
withdrawn by Indonesia:
(i) Alleged violation by the KTC of Article s 6.1, 6.4 and 6.9 of the Agreement
by not giving the Indonesian exporters an opportunity to see, and comment
on, the data relating to the first half of 2003,
(ii) Alleged violation by the KTC of Articles 6.4 and 6.9 of the Agreement by
failing to inform the Indonesian exporters of its decision to change the basis
of its injury determination from threat to material injury,
(e) We do not address Indonesia's claim under Ar ticles 3.1 and 3.2 of the Agreement
regarding the KTC's analysis of the volume of dumped imports as we have found that
claim not to be within our terms of reference.

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 of benefits under that ag reement. Accordingly, we conclude that, to the
extent Korea has acted inconsistently with the provisions of the Anti-dumping Agreement, it has
nullified or impaired benefits accruing to Indonesi a under that agreement. We therefore recommend
that the Dispute Settlement Body request Korea to bring its measures mentioned in paragraph
8.1(a)(v), 8.1(a)(vi), 8.1(a)(ix), 8.1(a)(x), 8.1(b )(ii) and 8.1(b)(v) above into conformity with its
obligations under the WTO Agreement.
IX. ARTICLE 19.1 OF THE DSU
9.1 Indonesia requests that we use our discretion under article 19.1 of the DSU to suggest that
Korea implement our recommendation in this case by revoking the measure at issue. Korea did not
specifically respond to this request.
9.2 We note that Article 19.1 of the DSU provides:
"Where a panel or the Appellate Body concl udes that a measure is inconsistent with a
covered agreement, it shall recommend that the Member concerned bring the measure
into conformity with that agreement. In addition to its recommendations, the panel or
Appellate Body may suggest ways in which the Member concerned could implement
the recommendations." (footnotes omitted)
9.3 We note that the general rule under Article 19.1 of the DSU with respect to the
recommendations of WTO panels is to recommend that the Member concerned bring its measure into
conformity with the relevant provisions of the covered agreements at issue. Exceptionally,
Article 19.1 also authorizes the panels to suggest ways in which such recommendations could be
implemented.
9.4 Taking into account the circumstances of the pro ceedings at issue, we see no reason to depart
from the general rule and make a suggestion rega rding implementation. We therefore decline
Indonesia's request.