EUROPEAN UNION – ANTI-DUMPING MEASURES ON BIODIESEL FROM INDONESIA REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 25 January 2018
Document codes: WT/DS480/R
Complainant: Indonesia
Respondent: EU
Third parties: U.S., Japan, Turkey, Singapore, India, China, Canada, Argentina, Australia, Norway, Russia, Brazil, Ukraine
Dispute stage: Panel
Agreements cited: Art. 2.2, 2.2.1.1  Anti-dumpingArt. VI:1  GATT 1994Art. XVI:4  Agreement Establishing the World Trade OrganizationArt. 2.2.2(i), 18.4, 2.2.2, 2.2.2(iii), 2.4, 2.3, 9.3, 3.1, 3.4, 3.5, 6.5, 6.5.1, 7.1, 7.2, 9.2, 9.3, 1  Anti-dumpingArt. VI  GATT 1994

EUROPEAN UNION – ANTI-DUMPING MEASURES ON BIODIESEL
FROM INDONESIA
REPORT OF THE PANEL
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LIST OF ANNEXES

ANNEX A
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A-1 Working Procedures of the Panel A-2
Annex A-2 Additional Working Procedures on Business Confidential Information A-7
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 First executive summary of the arguments of Indonesia B-2
Annex B-2 Second executive summary of the arguments of Indonesia B-13
Annex B-3 First executive summary of the arguments of the European Union B-26
Annex B-4 Second executive summary of the arguments of the European Union B-36
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Executive summary of the arguments of Argentina C-2
Annex C-2 Executive summary of the arguments of Australia C-6
Annex C-3 Executive summary of the arguments of Brazil C-9
Annex C-4 Executive summary of the arguments of China C-12
Annex C-5 Executive summary of the arguments of Japan C-14
Annex C-6 Executive summary of the arguments of Norway C-18
Annex C-7 Executive summary of the arguments of Russia C-20
Annex C-8 Executive summary of the arguments of Turkey C-24
Annex C-9 Executive summary of the arguments of the United States C-27
ANNEX D
PROCEDURAL RULINGS OF THE PANEL
Contents Page
Annex D-1 Decision of the Panel concerning Indonesia's request to limit third party access
to specific Business Confidential Information (BCI) D-2
Annex D-2 Decision of the Panel concerning requests by Russia and the European Union
for enhanced third party rights D-3

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CASES CITED IN THIS REPORT
Short title Full case title and citation
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive
Industry, , WT/DS142/AB/R, adopted 19 June 2000,
DSR 2000:VI, p. 2985
Canada – Welded Pipe Panel Report, Canada – Anti-Dumping Measures on Imports of Certain
Carbon Steel Welded Pipe from the Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu, WT/DS482/R and Add.1, adopted
25 January 2017
China – Broiler Products Panel Report, China  Anti-Dumping and Countervailing Duty Measures on
Broiler Products from the United States, WT/DS427/R and Add.1, adopted
25 September 2013, DSR 2013:IV, p. 1041
China – Cellulose Pulp Panel Report, China – Anti-Dumping Measures on Imports of Cellulose Pulp
from Canada, WT/DS483/R and Add.1, adopted 22 May 2017
China – GOES Appellate Body Report, China – Countervailing and Anti-Dumping Duties on
Grain Oriented Flat-Rolled Electrical Steel from the United States,
WT/DS414/AB/R, adopted 16 November 2012, DSR 2012:XII, p. 6251
China – HP-SSST (Japan) /
China – HP-SSST (EU)
Appellate Body Reports, China – Measures Imposing Anti-Dumping Duties on
High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from Japan /
China – Measures Imposing Anti-Dumping Duties on High-Performance
Stainless Steel Seamless Tubes ("HP-SSST") from the European Union,
WT/DS454/AB/R and Add.1 / WT/DS460/AB/R and Add.1, adopted
28 October 2015
China – HP-SSST (Japan) /
China – HP-SSST (EU)
Panel Reports, China – Measures Imposing Anti-Dumping Duties on High-
Performance Stainless Steel Seamless Tubes ("HP-SSST") from Japan /
China – Measures Imposing Anti-Dumping Duties on High-Performance
Stainless Steel Seamless Tubes ("HP-SSST") from the European Union,
WT/DS454/R and Add.1 / WT/DS460/R, Add.1 and Corr.1, adopted
28 October 2015, as modified by Appellate Body Reports WT/DS454/AB/R-

China – X-Ray Equipment Panel Report, China – Definitive Anti-Dumping Duties on X-Ray Security
Inspection Equipment from the European Union, WT/DS425/R and Add.1,
adopted 24 April 2013, DSR 2013:III, p. 659
EC – Bed Linen Panel Report, European Communities – Anti-Dumping Duties on Imports of
Cotton-Type Bed Linen from India, WT/DS141/R, adopted 12 March 2001, as
modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, p. 2077
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti-Dumping Measures on
Certain Iron or Steel Fasteners from China, WT/DS397/R and Corr.1,
adopted 28 July 2011, as modified by Appellate Body Report
WT/DS397/AB/R, DSR 2011:VIII, p. 4289
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, p. 135
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed
Salmon from Norway, WT/DS337/R, adopted 15 January 2008, and Corr.1,
DSR 2008:I, p. 3
EU – Biodiesel (Argentina) Appellate Body Report, European Union – Anti-Dumping Measures on
Biodiesel from Argentina, WT/DS473/AB/R and Add.1, adopted
26 October 2016
EU – Biodiesel (Argentina) Panel Report, European Union – Anti-Dumping Measures on Biodiesel from
Argentina, WT/DS473/R and Add.1, adopted 26 October 2016, as modified
by Appellate Body Report WT/DS473/AB/R
EU – Footwear (China) Panel Report, European Union – Anti-Dumping Measures on Certain Footwear
from China, WT/DS405/R, adopted 22 February 2012, DSR 2012:IX, p. 4585
Japan – Alcoholic Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages,
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996,
DSR 1996:I, p. 97

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Short title Full case title and citation
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and
Sections of Iron or Non-Alloy Steel and H-Beams from Poland, WT/DS122/R,
adopted 5 April 2001, as modified by Appellate Body Report
WT/DS122/AB/R, DSR 2001:VII, p. 2741
US – Anti-Dumping and
Countervailing Duties (China)
Appellate Body Report, United States – Definitive Anti-Dumping and
Countervailing Duties on Certain Products from China, WT/DS379/AB/R,
adopted 25 March 2011, DSR 2011:V, p. 2869
US – Carbon Steel (India) Appellate Body Report, United States – Countervailing Measures on Certain
Hot-Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R, adopted
19 December 2014, DSR 2014:V, p. 1727
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application
of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009,
DSR 2009:III, p. 1291
US – Countervailing Duty
Investigation on DRAMS
Appellate Body Report, United States – Countervailing Duty Investigation on
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea,
WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, p. 8131
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain
Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted
23 August 2001, DSR 2001:X, p. 4697
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX,
p. 4051
US – Oil Country Tubular
Goods Sunset Reviews
Appellate Body Report, United States – Sunset Reviews of Anti-Dumping
Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R,
adopted 17 December 2004, DSR 2004:VII, p. 3257
US – Shrimp (Article 21.5 –
Malaysia)
Appellate Body Report, United States – Import Prohibition of Certain Shrimp
and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia,
WT/DS58/AB/RW, adopted 21 November 2001, DSR 2001:XIII, p. 6481
US – Softwood Lumber VI
(Article 21.5 – Canada)
Appellate Body Report, United States – Investigation of the International
Trade Commission in Softwood Lumber from Canada – Recourse to
Article 21.5 of the DSU by Canada, WT/DS277/AB/RW, adopted 9 May 2006,
and Corr.1, DSR 2006:XI, p. 4865
US – Stainless Steel (Korea) Panel Report, United States – Anti-Dumping Measures on Stainless Steel
Plate in Coils and Stainless Steel Sheet and Strip from Korea, WT/DS179/R,
adopted 1 February 2001, DSR 2001:IV, p. 1295
US – Stainless Steel (Mexico) Appellate Body Report, United States – Final Anti-Dumping Measures on
Stainless Steel from Mexico, WT/DS344/AB/R, adopted 20 May 2008,
DSR 2008:II, p. 513
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven
Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997,
and Corr.1, DSR 1997:I, p. 323
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology
for Calculating Dumping Margins ("Zeroing"), WT/DS294/AB/R, adopted
9 May 2006, and Corr.1, DSR 2006:II, p. 417

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ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994
CFPP Cold filter plugging point
CIF Cost, insurance, and freight
CPO Crude palm oil
DET Differential Export Tax
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
EBB European Biodiesel Board
EU Basic Regulation Council Regulation (EC) No. 1225/2009 of 30 November 2009 on protection
against dumped imports from countries not members of the European
Community (codified version), OJ L 343, 22.12.2009, and corrigendum to
Council Regulation (EC) No. 1225/2009, OJ L 7, 12.1.2010
FOB Free on board
GATT 1994 General Agreement on Tariffs and Trade 1994
HPE Reference price that is published monthly by the Indonesian Authorities and is
based on the average price from the previous month from three sources,
i.e. CIF Rotterdam, CIF Malaysia, and the Indonesian commodity exchange
market, all brought back to the FOB level
PFAD Palm fatty acid distillate
PME Palm methyl ester
RME Rapeseed methyl ester
SG&A Selling, general, and administrative
SME Soybean methyl ester
USD US dollars
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969,
1155 UNTS 331; 8 International Legal Materials 679
Wilmar Group P.T. Wilmar Bioenergi and P.T. Wilmar Nabati
WTO World Trade Organization

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1 INTRODUCTION
1.1 Complaint by Indonesia
1.1. On 10 June 2014, Indonesia requested consultations with the European Union pursuant to
Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes (DSU), Article XXII:1 of the General Agreement on Tariffs and Trade 19 94 (GATT 1994)
and Articles 17.2 and 17.3 of the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement) with respect to the anti-dumping
measures imposed by the European Union on imports of bio diesel originating in, inter alia ,
Indonesia.1
1.2. Consultations were held on 23 July 2014 but failed to resolve the dispute.
1.2 Panel establishment and composition
1.3. On 30 June 2015, Indonesia requested the establishment of a panel pursuant to Article 6 of
the DSU with standard terms of reference. 2 At its meeting on 31 August 2015, the Dispute
Settlement Body (DSB) established a panel pursuant to the request of Indonesia in documents
WT/DS480/2 and WT/DS480/2/Corr.1, in accordance with Article 6 of the DSU.3
1.4. The Panel's terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Indonesia in documents
WT/DS480/2 and WT/DS480/2/Corr.1 and to make such findings as will assist the
DSB in making the recommendations or in giving the rulings provided for in those
agreements.4
1.5. On 4 November 2015, the parties agreed that the panel would be composed as follows:
Chairperson: Ms Deborah Milstein

 Mr Mathias Francke

1.6. Argentina, Australia, Brazil, Canada, China, India, Japan, Norway, the Russian Federation,
Singapore, Turkey, Ukraine, and the United States notified their interest in participating in the
Panel proceedings as third parties.
1.3 Panel proceedings
1.3.1 General
1.7. The Panel began its work on this case later than it would have wished due to staff constraints
in the WTO Secretariat.5 The Panel held its organizational meeting with the parties on 4 May 201 6.
During this meeting, Indonesia requested to postpone the proceedings pending the possible appeal
of the panel report in EU – Biodiesel (Argentina) .6, 7 The European Union did not object to
Indonesia's request. On 3 June 2016, the Panel decided to grant I ndonesia's request and delay the
proceedings until the Appellate Body Report in EU – Biodiesel (Argentina) had been circulated.

1 Request for consultations by Indonesia, WT/DS480/1 (Indonesia's consultations request).
2 Request for the establishment of a panel by Indonesia, WT/DS480/2 (Indonesia's panel request).
3 DSB, Minutes of the meeting held on 31 August 2015, WT/DSB/M/367.
4 Constitution note of the Panel, WT/DS480/3.
5 EU – Biodiesel (Indonesia), communication from the Panel (dated 15 April 2016, circulated
22 April 2016), WT/DS480/4.
6 Indonesia further clarified its request in its communication dated 13 May 2016.
7 The Panel Report in EU – Biodiesel (Argentina) was appealed by the European Union on 20 May 2016.
(Notification of an Appeal by the European Union, WT/DS473/10 (dated 20 May 2016 and circulated on
26 May 2016) and by Argentina on 25 May 2016. (Notification of an Other Appeal by Argentina, WT/DS473/11
(dated 25 May 2016 and circulated on 31 May 2016)).

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1.8. On 6 October 2016, the Appellate Body circulated its report in EU – Biodiesel (Argentina),
which was adopted by the DSB on 26 O ctober 2016. On 4 November 2016, following a
communication from the Panel requesting clarification 8, Indonesia requested the Panel to resume
its work and hold an additional organizational meeting to consider a proposed timetable and
working procedures. 9 The Panel held its second organizational meeting on 30 November 2016.
After consultation with the parties, the Panel adopted its Working Procedures 10, Additional Working
Procedures on Business Confidential Information (BCI)11, and timetable on 13 December 2016.
1.9. The Panel held a first substantive meeting with the parties on 29 -30 March 2017. A session
with the third parties took place on 30 March 2017. The Panel held a second substantive meeting
with the parties on 4 -5 July 2017. On 1 September 2017, the Panel i ssued the descriptive part of
its Report to the parties. The Panel issued its Interim Report to the parties on 3 October 2017. The
Panel issued its Final Report to the parties on 26 October 2017.
1.3.2 Request for a ruling on third party access to BCI pursuant t o the Panel's
Additional Working Procedures on Business Confidential Information (BCI)
1.10. On 6 January 2017, the Panel received a communication from Indonesia, requesting the
Panel to limit third-party access to certain company specific data provided by individual Indonesian
producers, pursuant to paragraph 6 of the Panel's adopted Additional Working Procedures on
Business Confidential Information .12 On 12 January 2017, the European Union objected to the
request, submitting that Indonesia's request is inconsistent with the DSU and fails to comply with
the terms of paragraph 6 of the Additional BCI Procedures. 13 On 17 January 2017, the Panel
informed the parties and the third parties that it had denied Indonesia's request to limit third-party
access to certain BCI. The Panel's decision is set out in Annex D-1.
1.3.3 Requests for enhanced third party rights by Russia and the European Union
1.11. On 12 December 2016, Russia requested the Panel to exerci se its discretion under
Article 12.1 of the DSU to modify its Working Procedures and grant enhanced third party rights in
this proceeding.14 On 13 January 2017, the European Union requested the Panel to grant Russia's
request, albeit for different reasons than those contained in Russia 's request.15 On 2 March 2017,
the Panel informed the parties and the third parties that it had rejected those requests by Russia
and the European Union. The Panel's decision is set out in Annex D-2.
2 FACTUAL ASPECTS
2.1. This dispute concerns the anti-dumping measures imposed by the European Union on imports
of biodiesel from Indonesia that w ere adopted following the conclusion of an investigation on
imports of biodiesel from Argentina and Indonesia. 16 This investigation was previously the subject

8 Communication from the Panel dated 28 October 2016.
9 In a communication dated 9 November 2016, the European Union informed the Panel that it
considered that outstanding developments may have a direct bearing on the question of whether or not it is
necessary, appropriate or fruitful to continue with the present proceedings at this time. Specifically, the
European Union referred to the fact that at that time it had yet to inform the DSB of its intentions in respect of
implementation of the recommendations and rulings of the DSB. In addition, the European Union stated that
the measure at issue had been substantially annulled by the municipal courts of the European Union, and
expected that a pending appeal related to this annulment would be concluded within a reasonable period of
time. In a communication dated 11 November 2016, Indonesia confirmed that it wished to proceed with the
dispute in the absence of any objective changes in factual circumstances.
10 See the Panel's Working Procedures in Annex A-1.
11 Additional Working Procedures of the Panel on Business Confidential Information, Annex A-2.
12 Communication from Indonesia dated 6 January 2017, 03/ITN/I/2017.
13 Communication from the European Union dated 12 January 2017.
14 Communication from Russia dated 12 December 2016.
15 Communication from the European Union dated 13 January 2017.
16 Commission Regulation (EU) No. 490/2013 of 27 May 2013 imposing a provisional anti-dumping duty
on imports of biodiesel originating in Argentina and Indonesia, OJ L 141, 28.5.2013 (Provisional Regulation),
(Exhibit IDN-1), p. 6; Council Implementing Regulation (EU) No. 1194/2013 of 19 November 2013 imposing a
definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel
originating in Argentina and Indonesia, OJ L 315, 26.11.2013 (Definitive Regulation), (Exhibit IDN-2), p. 2.

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of the dispute EU – Biodiesel concerning a complaint by Argentina , in respect of imports of
biodiesel from Argentina.17
2.2. The investigation was initiated by the European Commission on 29 August 2012 18 following a
complaint submitted by the European Biodiesel Board (EBB). 19 The EU authorities 20 imposed
provisional anti -dumping duties on 29 May 2013 21 and defin itive anti -dumping duties on
27 November 2013.22 Provisional anti-dumping duties were applied ranging from zero to 9.6% 23
and were subsequently definitively collected on 2 7 November 2013.24 Definitive dumping margins
were calculated ranging from 8.8% to 23.3% and definitive anti -dumping duties were applied
corresponding to the calculated injury margins, which ranged from 8.8% to 20.5%. 25 The duties
were applied in the form of specific duties expressed as a fixed amount in euro/tonne.
2.3. On 20 December 2016, the European Commission initiated a review of the anti -dumping
measures imposed on imports of biodiesel originating in Argentina to bring them into conformity
with the recommen dations and rulings adopted by the DSB, following the adoption of the panel
report, as modified by the Appellate Body report in the EU – Biodiesel (Argentina) dispute.26 In its
notice of initiation, the European Commission indicated that it also considered it appropriate to
examine the anti-dumping measures imposed on imports of biodiesel from Indonesia, considering
that: (a) the anti -dumping measures imposed on imports of biodi esel from Indonesia are
subject to a WTO dispute and involve essentially the same claims as raised by Argentina in the
EU – Biodiesel (Argentina) dispute; and (b) the legal interpretations contained in the adopted
panel and Appellate Body reports in EU – Biodiesel (Argentina) appear also to be relevant for the
investigation concerning Indonesia.27

17 Panel Report and Appellate Body Report in EU – Biodiesel (Argentina), WT/DS473/R and
WT/DS473/AB/R. Argentina challenged certain aspects of the anti-dumping measures that were imposed in
respect of imports of biodiesel from Argentina. In addition, Argentina made "as such" claims concerning the
second subparagraph of Article 2(5) of Council Regulation (EC) No. 1225/2009 of 30 November 2009 on
protection against dumped imports from countries not members of the European Community. (Panel Report,
EU – Biodiesel (Argentina), paras. 2.2-2.3).
18 Notice of initiation of an anti-dumping proceeding concerning imports of biodiesel originating in
Argentina and Indonesia, OJ C 260, 29.8.2012, (Exhibit IDN-4). On 10 November 2012, the EU authorities
initiated an anti-subsidy proceeding with regard to imports of biodiesel from Argentina and Indonesia.
(Notice of initiation of an anti-subsidy proceeding concerning imports of biodiesel originating in Argentina and
Indonesia, OJ C 342, 10.11.2012, (Exhibit IDN-5)). The domestic industry withdrew its complaint on
7 October 2013 and the investigation was terminated on 27 November 2013. (Commission Regulation (EU)
No. 1198/2013 of 25 November 2013 terminating the anti-subsidy proceeding concerning imports of biodiesel
originating in Argentina and Indonesia and repealing Regulation (EU) No. 330/2013 making such imports
subject to registration, OJ L 315, 26.11.2013, (Exhibit IDN-6)).
19 Consolidated version of the new anti-dumping complaint concerning imports of biodiesel originating in
Argentina and Indonesia (Complaint), (Exhibit IDN-3).
20 At the time of the investigation, the European Commission conducted investigations and adopted
preliminary determinations; the European Council adopted the final determinations on the basis of proposals
from the European Commission.
21 Provisional Regulation, (Exhibit IDN-1).
22 Definitive Regulation, (Exhibit IDN-2).
23 Provisional Regulation, (Exhibit IDN-1), recital 179.
24 Definitive Regulation, (Exhibit IDN-2).
25 Definitive Regulation, (Exhibit IDN-2), recital 215. The injury margins for two Indonesian producers
were determined to be higher than the corresponding dumping margins. Anti-dumping duty rates were
assessed at the rate of the dumping margins for those producers.
26 Notice of initiation regarding the anti-dumping measures in force on imports of biodiesel originating in
Argentina and Indonesia, following the recommendations and rulings adopted by the Dispute Settlement Body
of the World Trade Organization in the EU – Anti-Dumping Measures on Biodiesel dispute (DS473) OJ C476/3
of 20 December 2016, (Exhibit IDN-8).
27 The European Commission indicated that the scope of the review was limited to the cost of production
of the product under investigation when constructing normal value and the production capacity and capacity
utilisation in the context of establishing the impact of the dumped imports on the domestic industry. (Notice of
initiation regarding the anti-dumping measures in force on imports of biodiesel originating in Argentina and
Indonesia, following the recommendations and rulings adopted by the Dispute Settlement Body of the
World Trade Organization in the EU – Anti-Dumping Measures on Biodiesel dispute (DS473) OJ C476/3 of
20 December 2016, (Exhibit IDN-8)).

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3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. Indonesia requests that the Panel find that the anti -dumping measures imposed by the
European Union on imports of biodiesel from Indonesia are inconsistent with28:
a. Articles 2.2 and 2.2.1.1 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the
GATT 1994 because in constructing the normal value for the Indonesian producers under
investigation, the European Union did not calculate the cost of production of biodiesel on
the basis of the reco rds kept by those producers even though the records were in
accordance with the generally accepted accounting principles and accurately and
reasonably reflected the actual cost of production of biod iesel, and because the
European Union therefore failed to properly calculate the cost of production and properly
construct the normal value for those producers.
b. Article 2.2 of the Anti -Dumping Agreement because the European Union failed to
construct the normal value for the Indonesian producers under investigation on the basis
of the cost of production of biodiesel in the country of origin, i.e. Indonesia.
c. Articles 2.2 and 2.2.2(iii) of the Anti-Dumping Agreement because when constructing the
normal value for the Indonesian producers under investigation, the Europ ean Union did
not establish a cap for the profits as required by Article 2.2.2(iii) and the amount for
profits established was not determined by the European Union on the basis of a
reasonable method. The European Union therefore failed to properly constru ct the
normal value for those producers.
d. Articles 2.3 and 2.4 of the Anti-Dumping Agreement because the European Union did not
construct the export price for one Indonesian producer under investigation on the basis
of the price at which the imported biodiesel was first resold to independent buyers in the
European Union.
e. Article 9.3 (chapeau) of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994
because on account of the inconsistencies with Article 2 specified above in the context of
the calculation of the dumping margin for the Indonesian producers, the European Union
calculated a margin of dumping and imposed and collected anti-dumping duties in excess
of the actual dumping margin, if any, by the Indonesian producers. This resulted in the
levy of anti-dumping duties on the Indonesian producers that exceeded their margin of
dumping which, under Article 9.3 of the Anti -Dumping Agreement, operates as the
ceiling for the amount of anti -dumping duty that can be levied in respect of the sales
made by a producer/exporter.
f. Articles 3.1 and 3.2 of the Anti -Dumping Agreement because the European Union's
determination of injury to the Union industry was not based on an objective examination
of the effect of those imports on prices in the domestic market for b iodiesel and the
consequent impact of those allegedly dumped imports on domestic producers of
biodiesel. The European Union's findings regarding the price effects of the allegedly
dumped imports including price undercutting were not based on an objective
examination of the evidence on the record as, among others, the European Union did not
ensure price comparability in terms of physical characteristics and model -matching and
based its determination of price undercutting on partial and unexplained sales of t he
sampled European Union producers.
g. Articles 7.1, 7.2, 9.2 , and 9.3 ( chapeau) of the Anti -Dumping Agreement because the
European Union incorrectly imposed and definitively collected provisional anti -dumping
duties with respect to the imports from one Indo nesian producer under investigation, in
excess of the actual provisional margin of dumping of this producer, as it based itself on
a provisional dumping margin tainted by calculation errors.

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3.2. Indonesia submits that, a s a consequence of the measures imposed by the European Union,
the benefits accruing to Indonesia under the Anti -dumping Agreement and the GATT 1994 were
impaired or nullified. Indonesia considers that the measures at issue should be withdrawn.29
3.3. Indonesia requests the Panel to make use of its di scretion under the second sentence of
Article 19.1 of the DSU by suggesting ways in which the European Union should implement the
recommendations and rulings of the DSB to bring its measures into conformity with the
Anti-Dumping Agreement and the GATT 1994.30
3.4. The European Union requests that the Panel reject Indonesia's claims in this dispute in their
entirety.31
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their executive summaries, provided to the
Panel in accordance with parag raphs 18 and 19 of the Working Procedures adopted by the Panel
(see Annexes B-1, B-2, B-3, and B-4).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Argentina, Australia, Brazil, China, Japan, Norway, Russia, Turkey, and the
United States are reflected in their executive summaries, provide d in accordance with
paragraphs 18 and 20 of the Working Procedures adopted by the Panel (see Annexes from C-1
to C-9). Canada, India, Singapore, and Ukraine did not submit written or oral arguments to the
Panel.
6 INTERIM REVIEW
6.1. On 3 October 2017, the Panel issued its Interim Report to the parties. On 17 October 2017,
the parties submitted communications to the Panel . Neither party asked the Panel to review
specific aspects of the Interim Report, nor requested an interim review meeting.
6.2. We have made a number of changes of an editorial or formatting nature to correct
typographical and other non -substantive errors, as well as to reflect the parties' designations of
information as BCI.
7 FINDINGS
7.1 Introduction
7.1. Indonesia has advanced claims on an "as applied" basis concerning the anti -dumping
measures at issue in this case. Indonesia challenges several aspects of the dumping determination
related to the construction of normal value and export price , certain aspects of the
European Union's consideration of price effects and finding of significant price undercutting made
in the context of the injury determination , the collection of definitive anti -dumping duties , and
finally, the decision to impose and definitively collec t provisional anti -dumping duties on imports
from one Indonesian producer under investigation. These claims have been brought under a
number of provisions of the Anti-Dumping Agreement and GATT 1994.
7.2. We shall address Indonesia's claims after first recalling the general principles governing
treaty interpretation, the standard of review, and the burden of proof in WTO dispute settlement
proceedings.

31 European Union's first written submission, para. 149; second written submission, para. 77.

BCI deleted, as indicated [[***]]

7.2 General principles regarding treaty interpretation, the applicable standard of
review, and burden of proof
7.2.1 Treaty interpretation
7.3. Article 3.2 of the DSU provides that the dispute settlement system serves to clarify the
existing provisions of the covered agreements "in accordance with customary rules of
interpretation of public international law". Article 17.6(ii) of the Anti-Dumping Agreement similarly
requires panels to interpret that Agreement's provisions in accordance with the customary rules of
interpretation of public internation al law.32 It is generally accepted that the principles codified in
Articles 31 and 32 of the Vienna Convention are such customary rules.33
7.2.2 Standard of review
7.4. Panels generally are bound by the standard of review set forth in Article 11 of the DSU, which
provides, in relevant part, that:
[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.
7.5. In addition, Article 17.6 of the Anti -Dumping Agreement sets forth the special standard of
review applicable to disputes under the Anti-Dumping Agreement:
(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 unbiase d and objective. If the establishment of the facts was proper
and the evaluation was unbiased and objective, even though the panel might have
reached a different conclusion, the evaluation shall not be overturned;
(ii) the panel shall interpret the relevant provisions of the Agreement in accordance
with customary rules of interpretation of public international law. Where the panel
finds that a relevant provision of the Agreement admits of more than one permissible
interpretation, the panel shall find the au thorities' measure to be in conformity with
the Agreement if it rests upon one of those permissible interpretations.
Thus, Article 11 of the DSU and Article 17.6 of the Anti-Dumping Agreement together establish the
standard of review we are to apply with respect to both the factual and the legal aspects of the
present dispute.
7.6. When a panel is reviewing an investigating authority's determination of facts, the "objective
assessment" standard in Article 11 of the DSU requires a panel to review whether the au thorities
have provided a reasoned and adequate explanation as to : (a) how the evidence on the record
supported its factual findings; and ( b) how those factual findings support the overall
determination.34 Moreover, with respect to a "reasoned and adequate explanation", the
Appellate Body observed:
What is "adequate" will inevitably depend on the facts and circumstances of the case
and the particular claims made, but several general lines of inquiry are likely to be
relevant. The panel's scrutiny should test whether the reasoning of the authority is
coherent and internally consistent. The panel must undertake an in-depth examination
of whether the explanations given disclose how the investigating authority treated the
facts and evidence in the record and whether there was positive evidence before it to
support the infe rences made and conclusions reached by it. The panel must examine
whether the explanations provided demonstrate that the investigating authority took

32 Article 17.6(ii) of the Anti-Dumping Agreement also provides that if a panel finds that a provision of
the Anti-Dumping Agreement admits of more than one permissible interpretation, it shall uphold a measure
that rests upon one of those interpretations.
33 Appellate Body Report, Japan – Alcoholic Beverages II, p. 10.
34 Appellate Body Reports, US – Countervailing Duty Investigation on DRAMS, para. 186; and US –
Lamb, para. 103.

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proper account of the complexities of the data before it, and that it explained why it
rejected or discoun ted alternative explanations and interpretations of the record
evidence. A panel must be open to the possibility that the explanations given by the
authority are not reasoned or adequate in the light of other plausible alternative
explanations, and must ta ke care not to assume itself the role of initial trier of facts,
nor to be passive by "simply accept[ing] the conclusions of the competent
authorities".35
7.7. Finally, a panel should not conduct a de novo review of the evidence, nor substitute its
judgment for that of the investigating authority. A panel must limit its examination to the evidence
that was before the investigating authority during the course of the investigation and must take
into account all such evidence submitted by the parties to the dispute .36 At the same time, a panel
must not simply defer to the conclusions of the investigating authority; a panel's examination of
those conclusions must be "in-depth" and "critical and searching".37
7.2.3 Burden of proof
7.8. The general principles applicable to the allo cation of the burden of proof in WTO dispute
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert
and prove its claim. 38 Therefore, as the complaining party, Indonesia bears the burden of
demonstrating that the measure at issue is inconsistent with the provisions of the covered
agreements that it invokes. The Appellate Body has stated that a complaining party will satisfy its
burden when it establishes a prima facie case, namely, a case which, in the absence of e ffective
refutation by the defending party, requires a panel, as a ma tter of law, to rule in favour of the
complaining party.39 It is generally for each party asserting a fact to provide proof thereof.40
7.3 Whether the EU anti -dumping measures imposed on import s of biodiesel from
Indonesia are inconsistent with Articles 2.2 and 2.2.1.1 of the Anti -Dumping Agreement
and Article VI:1(b)(ii) of the GATT 1994
7.3.1 Introduction
7.9. Indonesia claims that the anti-dumping measures applied by the European Union on biodiesel
imports from Indonesia are inconsistent with Articles 2.2 and 2.2.1.1 of the
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994, as follows:
a. First, the European Union acted inconsistently with the first sentence of Article 2.2.1.1
and, as a consequence Article 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii)
of the GATT 1994, by failing to calculate the cost of production on the basis of the
records kept by the producers . Indonesia submits that the costs of crude palm oil (CPO)
reflected in the records of the exporting producers were substituted with the reference
export price for CPO published by the Indonesian authorities.41
b. Second, the European Union acted inconsistently with Article 2.2 of the Anti -Dumping
Agreement and Article VI:1(b)(ii) of the GATT 1994 by failing to construct the normal
value for the Indonesian producers under investigation on the basis of the cost of
production of biodiesel in the country of origin, Indonesia.42
7.10. Indonesia submits that the substance of its claims are indistinguishable from claims raised
by Argentina under these provisions in the dispute EU – Biodiesel (Argentina) in respect of
anti-dumping measures imposed on imports of biodiesel from Argentina.43 Indonesia submits that

35 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93 (referring to
Appellate Body Report, US – Lamb, para. 106). (emphasis original)
36 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, paras. 187-188.
37 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93.
38 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.
39 Appellate Body Report, EC – Hormones, para. 104.
40 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.
43 Indonesia's first written submission, para. 45.

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given the identical fact pattern and decisions made by the European Union, these claims warrant
the same finding of inconsistency with the above provisions of the Anti -Dumping Agreement and
GATT 1994.44 The European Union has not disp uted the relevance of the findings contained in the
panel and Appellate Body reports in EU – Biodiesel (Argentina) to the resolution of the dispute.45
7.11. For the purpose of addressing these claims, we consider below whether Indonesia has
demonstrated that the costs of CPO reflected in the records of the exporting producers 46 were
substituted with the reference export price for CPO published by the Indonesian authorities, and
thereafter, we address whether in doing so, the European Union acted inconsistently wit h the
provisions cited by Indonesia.
7.3.2 The EU authorities' determination of the cost of production for the construction of
normal value for Indonesian biodiesel producers
7.12. Indonesia submits that the set of circumstances facing Indonesia are "essentially identical"47
to the factual circumstances of claims raised by Argentina in EU – Biodiesel (Argentina) . We
address the similarities in the EU authorities' determination of the cost of production for Argentine
and Indonesian biodiesel producers in the construction of normal value before considering
Indonesia's claims.
7.13. On 2 9 May 2013, the European Commission imposed provisional anti -dumping duties on
biodiesel originating in Argentina and Indonesia, imposing provisional anti -dumping duties on
Indonesian producers at margins of between zero and 9.6%. 48 The EU autho rities concluded that
since both the Argentine and Indonesian domestic market s for biodiesel were heavily regulated,
domestic sales were not in the ordinary course of trade, and the normal value would have to be
constructed.49 To construct normal value, the EU authorities calculated the normal value by adding
to the producers' own production costs during the investigation period, the selling, general , and
administrative (SG&A) expenses incurred and a reasonable profit margin. 50 At that time, the
petitioner, the EBB, claimed that the "Differential Export Tax" (DET) system in Argentina and
Indonesia depresses the price of soybeans and soybean oil (the main raw material input s used in
the production of biodiesel in Argentina) and CPO (the main raw material input used in the
production of biodiesel in Indonesia) and therefore distorts the costs of biodiesel producers. The
EU authorities indicated that they did not have enough information at that stage to make a
decision as to the most appropriate way to address that claim. 51 The EU authorities indicated that
the question as to whether the costs reasonably reflect the costs associated with the production of
biodiesel would be further examined at the definitive stage.52
7.14. In the Definitive Disclosure, the EU authorities confirmed that their further investigation had
established that the DET system in place in Indonesia and Argentina depressed the domestic prices
of the main raw material input in Indonesia and Argentina to art ificially low level s, and as a
consequence, this affected the cost of biodiesel producers in both countries. 53 The EU authorities
explained that, due to the distortions caused by the DET system in the respective countries, the
costs of the main raw material were not reasonably reflected in the records kept by the
producers.54 In the case of Indonesia , t he EU authorities noted that during the investigation
period, biodiesel exports were taxed between 2% and 5%, while CPO exports were taxed

44 Indonesia's first written submission, paras. 45 and 100.
45 The European Union acknowledges the factual description provided by Indonesia in respect of its
claims. (European Union's first written submission, paras. 6 and 14; second written submission, paras. 8
and 11). The European Union additionally noted that the EU investigating authorities decided to reopen the
investigation regarding anti-dumping measures in force equally in respect of imports of biodiesel originating in
Argentina and Indonesia, following the recommendations and rulings adopted by the DSB in EU – Biodiesel
(Argentina). In light of this, the European Union submits that Indonesia's claims are "unnecessary, premature
and misconceived". (European Union's first written submission, para. 12).
46 We note that the Indonesian government does not set the price of CPO in Indonesia.
48 Provisional Regulation, (Exhibit IDN-1), recital 179.
49 Provisional Regulation, (Exhibit IDN-1), recitals 44-45 and 63-64.
50 Provisional Regulation, (Exhibit IDN-1), recital 63.
51 Provisional Regulation, (Exhibit IDN-1), recitals 45 and 63.
52 Provisional Regulation, (Exhibit IDN-1), recitals 45 and 63.
53 General Disclosure Document, AD593, Anti-Dumping Proceeding concerning imports of biodiesel
originating in Argentina and Indonesia (1 October 2013) (Definitive Disclosure), (Exhibit IDN-7), recital 26.
54 Definitive Disclosure, (Exhibit IDN-7), recitals 25, 34, and 57.

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between 15% and 20%. The export for palm fruit was set at a rate of 40%. 55 The EU authorities
concluded that since the DET system limits the possibility to export CPO, larger quantities of CPO
are available on the domestic market, which lowers domestic C PO prices. The EU authorities noted
that the domestic price of CP O was significantly lower than the international reference price, with
the difference "being very close to the export tax applied to CPO".56
7.15. In light of its finding that the markets were distort ed, the EU authorities therefore decided
to disregard the actual costs of raw materials as recorded by the Argentine and Indonesian
investigated companies in their accounts and replace those costs with the price at which those
companies would have purchased the raw materials in the absence of a distortion , in constructing
the respective normal values of Argentine and Indonesian producers.57 To replace the costs in the
records of Indonesian producers , the EU authorities used the reference price (HPE) for CPO
published by the Indonesian authorities. The EU authorities explained that the published HPE price
is a reference export price that is set monthly by Indonesian authorities and averages the
published international prices from three different sources: cost, insurance, and freight (CIF)
Rotterdam, CIF Malaysia, and the Indonesian commodity exchange market. The HPE price is set on
the basis of the same sources, on a free on board (FOB) basis.58
7.16. The Government of Indonesia and several Indonesian producers raise d objections
concerning the decision by the EU authorities to replace the recorded costs of CPO in the
constructed normal value. 59 In the Definitive Regulation, the EU authorities confirmed their
conclusion that domestic prices of CPO were artificially lowe r than international prices due to the
distortion caused by the Indonesian DET. The EU authorities additionally confirmed their decision
to use reference HPE prices published by the Indonesian authorities and rejected comments made
by Indonesian producers and the Government of Indonesia.60
7.3.3 Whether the European Union acted inconsistently with Article s 2.2.1.1 and 2.2 of
the Anti -Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 , by failing to
calculate the cost of production of biodiesel on the basis of the records kept by the
producers
7.17. Indonesia first requests us to find that the European Union act ed inconsistently with
Articles 2.2.1.1 and 2.2 of the Anti -Dumping Agreement and with Article VI:1(b)(ii) of the
GATT 1994 by failing to calculate the cos t of production of the product under investigation on the
basis of the records kept by the producers. Indonesia refers to the panel and Appellate Body
findings in EU – Biodiesel (Argentina) in support of it s claim. We note that Indonesia's claim is
principally concerned with the second condition in the first sentence of Article 2.2.1.1 of the

55 Definitive Disclosure, (Exhibit IDN-7), recital 60. The EU authorities found that during the
investigation period biodiesel exports from Argentina were taxed at a nominal rate of 20% with an effective
rate of 14.58%, while soybean exports were taxed at 35% and soybean oil exports were taxed at 32%.
(Definitive Disclosure, (Exhibit IDN-7), recital 31).
56 Definitive Disclosure, (Exhibit IDN-7), recital 59. In the case of Argentine producers, the EU
authorities noted that the difference between the international and the domestic price of soya beans and soya
bean oil is the export tax on the product and other expenses incurred for exportation. Thus, the EU authorities
concluded that producers of soya beans and soya bean oil obtain the same net price no matter whether they
sell for export or domestically. (Definitive Disclosure, (Exhibit IDN-7), recital 33).
57 Definitive Disclosure, (Exhibit IDN-7), recitals 35 and 58.
58 Definitive Disclosure, (Exhibit IDN-7), fn 8. In the case of Argentine producers, the EU authorities
replaced the costs at which investigated companies purchased soya beans with the average of the reference
prices of soya beans published by the Argentine Ministry of Agriculture for export FOB Argentina during the
investigation period. (Definitive Disclosure, (Exhibit IDN-7), recital 36; see also Definitive Regulation,
(Exhibit IDN-2), recitals 35-42).
59 P.T. Ciliandra Perkasa, Comments on Definitive Disclosure (17 October 2013), (Exhibit IDN-9 (BCI)),
pp. 2-23; P.T. Pelita Agung Agrindustri, Comments on Definitive Disclosure: Dumping Margin
(17 October 2013), (Exhibit IDN-10 (BCI)), pp. 2-20; Government of Indonesia, Comments on Definitive
Disclosure (17 October 2013), (Exhibit IDN-11), pp. 1-3; Wilmar Group, Comments on Definitive Disclosure
(17 October 2013), (Exhibit IDN-16 (BCI)), pp. 4-6; and P.T. Musim Mas, Comments on Definitive Disclosure,
(Exhibit IDN-17 (BCI)), pp. 5-9.
60 Definitive Regulation, (Exhibit IDN-2), paras. 66-74. The EU authorities similarly confirmed their
conclusions that the price of soybean raw materials in Argentina was artificially lower than international prices
due to the distortion caused by the Argentine DET, and further confirmed their decision to use an international
reference price as set by the Argentine government. (Ibid. paras. 35-42).

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Anti-Dumping Agreement.61 We also recall that Indonesia asserts that the substance of its claims
is indistinguishable from claims raised by Argentina under these provis ions in the EU – Biodiesel
(Argentina), and as a result the same finding of inconsistency is warranted.62
7.18. Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreement provide as follows:
2.2 When there are no sales of the like product in the ordinary course of tr ade 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, such sales do not permit a proper comparison, the margin of
dumping shal l be determined by comparison with a comparable price of the like
product when exported to an appropriate third country, provided 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.63
…
2.2.1.1 For the purpose of paragraph 2, costs shall normally be
calculated on the basis of records kept by the exporter or producer under
investigation, provided that such records are in accordance wi th the
generally accepted accounting principles of the exporting country and
reasonably reflect the costs associated with the production and sale of the
product under consideration. Authorities shall consider all available
evidence on the proper allocation of costs, including that which is made
available by the exporter or producer in the course of the investigation
provided that such allocations have been historically utilized by the
exporter or producer, in particular in relation to establishing appropria te
amortization and depreciation periods and allowances for capital
expenditures and other development costs. Unless already reflected in the
cost allocations under this sub -paragraph, costs shall be adjusted
appropriately for those non -recurring items of cost which benefit future
and/or current production, or for circumstances in which costs during the
period of investigation are affected by start-up operations.[*]
[*fn original]6 The adjustment made for start -up operations shall reflect the costs at the end of
the start-up period or, if that period extends beyond the period of investigation, the most recent
costs which can reasonably be taken into account by the authorities during the investigation.
7.19. Article VI:1 of the GATT 1994 reads, in relevant part:
The contracting parties recognize that dumping, by which products of one country are
introduced into the commerce of another country at less than the normal value of the
products, i s to be condemned if it causes or threatens material injury to an
established industry in the territory of a contracting party or materially retards the
establishment of a domestic industry. For the purposes of this Article, a product is to
be considered as being introduced into the commerce of an importing country at less
than its normal value, if the price of the product exported from one country to another
…
 (b) … is less than …
…

61 Indonesia submits that the European Union acted inconsistently with Article 2.2 of the Anti-Dumping
Agreement and Article VI:1(b)(ii) of the GATT 1994 as a result of failing to calculate the costs of production
consistently with Article 2.2.1.1 of the Anti-Dumping Agreement. (Indonesia's first written submission,
para. 98).
62 Indonesia's first written submission, para. 45.
63 Fn omitted.

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(ii) the cost of production of the product in the country of origin
plus a reasonable addition for selling cost and profit.
7.20. In addressing whether the European Union acted inconsistently with Article 2.2.1.1 of the
Anti-Dumping Agreement, the panel and the Appellate Body in EU – Biodiesel (Argentina) both
found that Article 2.2. 1.1 establishes the records of the investigated producer as the preferred
source of information for the determination of the cost of produ ction. In this respect,
Article 2.2.1.1 provides for two circumstances in which an investigating authority can choose not
to follow the general rule to calculate costs on the basis of the records kept by the
producer/exporter. The first is that the records are inconsistent with the generally accepted
accounting principles of the exporting country . The second is that the records do not reasonably
reflect the costs associated with the production and sale of the product under investigation.64
7.21. The panel and the Appellate Body both reasoned that the second condition in the first
sentence of Article 2.2.1.1 does not permit an inv estigating authority to examine the
reasonableness of reported costs incurred by an exporting producer when the actual costs
recorded in the records of the producer or exporter are found within acceptable limits to be
accurate and faithful. 65 Given the stru cture of the first sentence of Article 2.2.1.1, the
Appellate Body considered it clear that the records of the individual exporters or producers under
investigation are subject to the condition to "reasonably reflect" the "costs". 66 The Appellate Body
explained that the condition in the first sentence of Article 2.2.1.1 that the records "reasonably
reflect" the costs associated with the production and sale of the product under consideration,
relates to "whether the records kept by the exporter or producer un der investigation suitably and
sufficiently correspond to or reproduce those costs incurred by the investigated exporter or
producer that have a genuine relationship with the production and sale of the specific product
under consideration".67 The Appellate Body found support for its interpretation in the additional
rules set out in the second and third sentences of Article 2.2.1.1 and footnote 6 of the
Anti-Dumping Agreement 68, and in Article 2.2, which refers to the costs of production in the
country of origin.69
7.22. In order to establish whether the records reasonably reflect the costs actually incurred, the
panel considered a comparison should be made between the costs in the producer's or exporter's
records and the costs incurred by that producer or exporter. In its view, such a comparison does
not permit an investigating authority to enquire into whether the records of the producer or
exporter reasonably reflect some hypothetical costs that might have been incurred under a
different set of conditions or circum stances. Therefore, an investigating authority should not be
permitted to evaluate the costs reported in the records kept by the exporter or producer pursuant
to a benchmark unrelated to the cost of production in the country of origin.70
7.23. In assessing whethe r the EU authorities had acted consistently with Article 2.2.1.1 in the
investigation, the panel found relevant that the EU authorities decided not to use the cost of
soybeans in the production of biodiesel in Argentina because "the domestic prices of the main raw
material used by biodiesel producers in Argentina were found to be artificially lower than the
international prices due to the distortion created by the Argentine export tax system". 71 In the
panel's view, this did not constitute a legally sufficie nt basis u nder Article 2.2.1.1 for concluding
that the producers' records did not reasonably reflect the costs associated with the production and
sale of biodiesel. 72 The panel therefore found that the European Union acted inconsistently with
Article 2.2.1.1 of the Anti-Dumping Agreement by failing to calculate th e cost of production of the

64 Appellate Body Report, EU – Biodiesel (Argentina), paras. 6.18 and 6.46; Panel Report, EU – Biodiesel
(Argentina), para. 7.227.
65 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.37; Panel Report, EU – Biodiesel
(Argentina), para. 7.231 and fn 400.
66 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.20.
67 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.56.
68 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.22. See also Panel Report, EU – Biodiesel
(Argentina), para. 7.234.
69 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.23.
70 Panel Report, EU – Biodiesel (Argentina), para. 7.242. See also Appellate Body Report, EU – Biodiesel
(Argentina), paras. 6.30, 6.37, and 6.39.
71 Panel Report, EU – Biodiesel (Argentina), para. 7.248.
72 Panel Report, EU – Biodiesel (Argentina), para. 7.248.

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producers under investigation on the basis of the records kept by the producers. 73 Having reached
this finding, t he panel did not consider it necessary for purposes of res olving the dispute to
address Argentina's further claims that, the European Union failed to properly construct the normal
value and thus acted inconsistently with Article 2.2 of the Ant i-Dumping Agreement and
Article VI:1(b)(ii) of the GATT 1994.74
7.24. The Appellate Body upheld the panel's finding that the European Union acted inconsistently
with Article 2.2.1.1 in constructing the normal value for Argentine producers.75
7.25. We recall as set out above 76, a t the definitive stage, the EU authorities revised the
methodology and decided not to use the recorded costs of the main raw materials ( soybean oil in
the case of Argentine producers and CPO in the case of Indonesian producers) to establish the cost
of production of biodiesel for Argentine and Indonesian investigated producers for the same
reason: that "DET systems depressed the domestic prices of the main raw material input in both
Argentina and Indonesia to an artificially low level", which was considered to "affect the costs of
the biodiesel producers in both count ries concerned".77 Thus, the EU authorities applied the same
rationale for deciding not to use the recorded cost of the main raw material to establish the cost of
production of biodiesel for Argentine and Indonesian investigated producers.
7.26. Under these circ umstances, we see no basis to deviate from the findings by the panel in
EU – Biodiesel (Argentina) in respect of Indonesia's claim concerning Article 2.2.1.1 of the
Anti-Dumping Agreement. Nor has the European Union identified any cogent reasons for us to do
so.78 Like the panel in EU – Biodiesel (Argentina), we find that the EU authorities did not provide a
legally sufficient basis under Article 2.2.1.1 for concluding that the Indonesian producers' records
did not reasonably reflect the costs associated wit h the production and sale of biodiesel, and
therefore, we find that the EU authorities acted inconsistently with its obligations under
Article 2.2.1.1 by derogating from using the costs reflected in the records kept by the producers.79
7.27. Based on the foregoing, we uphold Indonesia's claim that the European Union acted
inconsistently with Article 2.2.1.1 of the Anti-Dumping Agreement by failing to calculate the cost of
production of the producers under investigation on the basis of the records kept by the producers.
7.28. Indonesia also requests that we find that, as a result of failing to calculate the costs of
production consistently with Article 2.2.1.1 of the Anti -Dumping Agreement, the European Union
failed to properly construct the normal value and thus acted inconsistently with Article 2.2 and
Article VI:1(b)(ii) of the GATT 1994. 80 We recall that Indonesia has requested us to reach t he
same findings of inconsistency as in EU – Biodiesel (Argentina) , given the identical fact ual
circumstances and decisions made by the European Union. 81 In this regard, the panel did not
consider it necessary for purposes of resolving the dispute to address Argentina's further claims
under Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994. 82 We
have come to the same conclusions regarding Indonesia's claims.
7.3.4 Whether the European Union acted inconsistently with Article 2.2 of the
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 by failing to construct
the normal value on the basis of the cost of production in the country of origin
7.29. Indonesia separately requests that we find that the European Union acted inconsistently
with Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 by failing

73 Panel Report, EU – Biodiesel (Argentina), para. 7.249.
74 Panel Report, EU – Biodiesel (Argentina), para. 7.250.
75 Appellate Body Report, EU – Biodiesel (Argentina), paras. 6.56-6.57.
76 See paras. 7.14. -7.16. above.
77 Definitive Regulation, (Exhibit IDN-2), recital 30. See also ibid. recitals 35-42 and 66-74.
78 In reaching this finding, we recall that it is well established that adopted panel and Appellate Body
reports create legitimate expectations, and that the same legal issues should be resolved in the same way in
subsequent cases, absent cogent reasons for finding differently. (See, for example, Appellate Body Reports,
Japan – Alcoholic Beverages II, p. 14; US – Stainless Steel (Mexico), para. 160; US – Shrimp (Article 21.5 –
Malaysia), para. 109; and US – Oil Country Tubular Goods Sunset Reviews, para. 188).
79 Panel Report, EU – Biodiesel (Argentina), para. 7.248.
80 Indonesia's first written submission, para. 98.
81 Indonesia's first written submission, para. 45.
82 Panel Report, EU – Biodiesel (Argentina), para. 7.250.

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to construct the nor mal value on the basis of the cost of production in the country of origin. 83
Indonesia submits that the cost used by the EU authorities for CPO , derived from international
prices, cannot be understood to be a cost in the country of origin.84
7.30. In addressing a similar claim raised by Argentina in EU – Biodiesel (Argentina), the panel
and the Appellate Body shared the view that the phrase "cost of production in the country of
origin" in Article 2.2 and "cost of production of the product in th e country of origin " in
Article VI:1(b)(ii) may be understood as a reference to the price paid or to be paid to produce
something within the country of origin. 85 The Appellate Body observed that nothing in the
language of these two provisions precludes that an investigating a uthority may need to look for
information on the cost of production from sources outside the country. 86 However, the reference
to "in the country of origin", indicates that, whatever information or evidence is used to determine
the "cost of production", it must be apt to or capable of yielding a cost of production in the country
of origin. In these instances, information or evidence from outside the country of origin may need
to be adapted in order to ensure that it is suitable and it is not sufficient to si mply substitute the
costs from outside the country of origin for the "cost of production in the country of origin".87
7.31. In assessing whether the EU authorities had acted consistently with Article 2.2 or
Article VI:1(b)(ii) of the GATT 1994 , t he panel evaluated whether the cost used by the EU
authorities for soybeans could be understood to be a cost in the country of origin, Argentina. The
panel considered it clear that the EU authorities did not use the cost of soybeans in Argentina , as
the EU authorities spec ifically selected the average reference price of soybeans published by the
Argentine Ministry of Agriculture to remove the perceived distortion in the market place caused by
the Argentine DET. In this respect, the panel stated that the EU authorities selected this cost
precisely because it was not the cost of soybeans in Argentina. 88 The panel therefore found that
the European Union acted inconsistently with Article 2.2 of the Anti -Dumping Agreement and
Article VI:1(b)(ii) of the GATT 1994 by failing to cons truct the normal value on the basis of the
cost of production in Argentina.89 The Appellate Body upheld the panel's finding.90
7.32. As with the decision to replace the actual purchase price of soybean reflected in Argentine
producers' records, the EU authorities replaced the actual purchase price of CPO as reflected in the
producers' records with an international HPE reference price published by Indonesian authorities.91
The EU authorities found that prices of CPO prevailing in Indonesia were artificially lower tha n
international prices and considered that the HPE reference price published by Indonesian
authorities served as "the price at which [domestic biodiesel producers] would have purchased the
CPO in the absence of such a distortion". 92 In this sense , the EU au thorities selected the HPE
reference price to remove the perceived distortion in the market place caused by the
Indonesian DET, in the same way that the EU authorities had selected a reference price to remove
the perceived distortion in the domestic price of soybeans caused by the Argentine DET. Under
these circumstances, in the absence of any rebuttal by the European Union, we see no basis to
depart from the analysis undertaken by the panel and the Appellate Body in EU – Biodiesel
(Argentina). We therefore find that the cost of CPO used by the European Union in respect of
Indonesian producers is not a cost "in the country of origin".

83 Indonesia's first written submission, para. 100 (referring to Panel Report, EU – Biodiesel (Argentina),
para. 7.260; and Appellate Body Report, EU – Biodiesel (Argentina), paras. 6.81 and 6.83).
84 Indonesia's first written submission, paras. 111-116.
85 Panel Report, EU – Biodiesel (Argentina), para. 7.256; Appellate Body Report, EU – Biodiesel
(Argentina), para. 6.69.
86 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.73. This could occur for instance, in
circumstances where the obligation in the first sentence of Article 2.2.1.1 to calculate the costs on the basis of
the records kept by the exporter or producer under investigation does not apply, or where relevant information
from the exporter or producer under investigation is not available. (Ibid.).
87 Appellate Body Report, EU – Biodiesel (Argentina), paras. 6.70 and 6.73.
88 Panel Report, EU – Biodiesel (Argentina), para. 7.258.
89 Panel Report, EU – Biodiesel (Argentina), para. 7.260.
90 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.83. The Appellate Body recognized that
domestic prices could in fact reflect world prices, and that prices at the border could simultaneously be
characterized as both an international and a domestic price. The Appellate Body agreed with the panel,
however, that the mere fact that a reference price is published by the Argentine Ministry of Agriculture does
not necessarily make this price a domestic price in Argentina. (Ibid. para. 6.81).
91 See para. 7.15. above.
92 Definitive Regulation, (Exhibit IDN-2), recital 67.

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7.33. In light of this finding , we uphold Indonesia's claim that the European Union acted
inconsistently with Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the
GATT 1994 by using a cost for CPO that was not the cost prevailing "in the country of origin" in the
construction of normal value.
7.3.5 Conclusions
7.34. We recall above the findings of the panel, as upheld by the Appellate Body in EU – Biodiesel
(Argentina) regarding the obligations contained in Article 2.2.1.1 of the Anti -Dumping Agreement,
and Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 . We
consider the panel's findings that the European Union acted inconsistently with these provisions in
that dispute are directly relevant to the assessment of Indonesia's claims in this proceeding. We
therefore uphold Indonesia's claim that the European Union acted incons istently with
Article 2.2.1.1 of the Anti-Dumping Agreement by failing to calculate the cost of production of the
producers under investigation on the basis of the records kept by the producers . In addition, we
uphold Indonesia's claim that the European Un ion acted inconsistently with Article 2.2 of the
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 by using a cost for CPO that was
not the cost prevailing "in the country of origin" in the construction of normal value.
7.4 Whether the European Union established an amount for profits inconsistently with
Articles 2.2 and 2.2.2(iii) of the Anti-Dumping Agreement
7.4.1 Introduction
7.35. Indonesia claims that the method applied by the European Union to establish an amount for
profits for Indonesian producers is inconsistent with Articles 2.2 and 2.2.2(iii) of the Anti -Dumping
Agreement. Indonesia allege s that the European Union's approach suffers from two main flaws.
First, Indonesia claims that the European Union acted inconsistently with the requirement in
Article 2.2.2(iii) to calculate a cap for profits, i.e. "the profit normally realized by other exporters
or producers on sales of products of the same gener al category in the domestic market of the
country of origin". Second, Indonesia claims that the European Union did not determine an amount
for profits on the basis of a "reasonable" method, as required under Articles 2.2 and 2.2.2(iii).
7.4.2 The EU authorities ' determination of an amount for profits for Indonesian
biodiesel producers
7.36. Before addressing Indonesia's claim s, we recall the followin g facts related to the
European Union's determination of an amount for profits for Indonesian biodiesel producers.
7.37. The EU authorities determined that Indonesian market conditions for biodiesel were such
that domestic sales were not considered as being made in the ordinary course of trade, and
therefore, the amount of profit could not be based on actual data from the sample d companies for
purposes of constructing the normal value of the like product. 93 The EU authorities therefore
resorted to Article 2(6)(c) of the EU Basic Regulation 94 (which mirrors the language in
Article 2.2.2(iii) of the Anti -Dumping Agreement). The EU au thorities determined the amount for
profits as "the reasonable amount of profit that a young and innovative capital intensive industry
of this type under normal conditions of competition in a free and open market could achieve, that
is 15% based on turnover". 95 The EU authorities subsequently confirmed in the Definitive

93 Provisional Regulation, (Exhibit IDN-1), recital 65. The EU authorities noted that, during the
investigation period, the fully State-owned oil and gas company Pertamina was the biggest company active on
the domestic market, representing more than 90% of the domestic biodiesel purchases from the sampled
producers. The EU authorities determined that Pertamina is mandated by the State to blend the biofuels with
fossil fuels for sale at its gas stations, and every month, the Indonesian Ministry of Trade administratively sets
the "HPE price (or Export Check Price)" as a benchmark price used to calculate the monthly level of export
duties. Pertamina purchases biodiesel at the level of the HPE price set by the Indonesian government.
(Provisional Regulation, (Exhibit IDN-1), recital 64).
94 Council Regulation (EC) No. 1225/2009 of 30 November on protection against dumped imports from
countries not members of the European Community (codified version), OJ L 343, 22.12.2009, and corrigendum
to Council Regulation (EC) No. 1225/2009, OJ L 7, 12.1.2010.
95 Provisional Regulation, (Exhibit IDN-1), recital 65.

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Regulation the 15% profit margin as "a reasonable amount that can be achieved by a relatively
new, capital-intensive industry in Indonesia".96
7.38. The Government of Indonesia and Indonesian producers submitted comments during the
investigation, including objections to the 15% profit margin used when constructing normal value.
Several Indonesian producers objected that the EU authorities should have determined a profit
amount based on actual amounts on sales of products in the same general cate gory of products,
pursuant to Article 2(6)(b) of the EU Basic Regulation .97 Two Indonesian producers, P.T. Wilmar
Bioenergi and P.T. Wilmar Nabati (Wilmar Group) and P.T. Pelita Agung Agrindustri referred in this
regard to sales of oleochemicals in Indonesia.98 Several producers also objected that the EU
authorities did not determine a profit cap as required under Article 2(6)(c) of the EU Basic
Regulation (and Article 2.2.2(iii) of the Anti -Dumping Agreement) and ensure that the 15% profit
margin did not exceed that cap.99
7.39. In addition, s everal Indonesian producers asserted that the EU authorities relied on the
target profit margin that had been determined for the EU industry in the context of the 2009
anti-dumping investigation into biodiesel imports from the United States, as the basis to determine
the 15% margin for Indonesian producers. These producers objected that it was not reasonable or
appropriate to base the profit margin for Indonesian producers on the average profit obtained by
the EU industry during the 2004-2006 period as this is not based on data relating to Indonesia. 100
P.T. Pelita Agung Agrindustri argued that, even in the case that data from Indonesian producers
cannot be used, the EU authorities should have based the profit amount on publicly available data
relating to other markets rather than basing the profits on the target profit margin of the EU
industry. P.T. Pelita Agung Agrindustri submitted that the profit mar gin of 6.8% that was
established for the US producers in the 2011 US bioethanol anti-dumping investigation would have
been appropriate.101
7.40. Several producers argued that, given that their revenues were in US dollars (USD), the
average interest rate for USD l oans offered by private banks in Indonesia for working capital and
investment loans (which was between 5 % and 6.3%) should be used to determine a profit
amount.102 Indonesian producer Wilmar Group argued that EU authorities should have taken into
account a s tudy prepared by LMC International that conclude d that actual profit margins in the
biodiesel sector in Indonesia were between 2.4% and 3.2%. 103 Indonesian producer P.T. Musim
Mas submitted that a 15% profit margin for the producer company was excessive taki ng into
account an investment cost for a 300,000 ton ne per year palm methyl ester ( PME) plant is about
USD 30 million in Indonesia. Assuming an average price of PME at USD 1140 per tonne during the

96 Definitive Regulation, (Exhibit IDN-2), recital 84.
97 P.T. Pelita Agung Agrindustri, Comments on Provisional Disclosure: Dumping Margin (1 July 2013),
(Exhibit IDN-15 (BCI)), pp. 3 and 6; Wilmar Group, Comments on Provisional Disclosure (1 July 2013),
(Exhibit IDN-13 (BCI)), pp. 3-5.
98 Submission by the Wilmar Group filed on 25 July 2013, (Exhibit IDN-14 (BCI)), p. 1; P.T. Pelita Agung
Agrindustri, Comments on Provisional Disclosure: Dumping Margin (1 July 2013), (Exhibit IDN-15 (BCI)), p. 6.
See also Wilmar Group, Comments on Definitive Disclosure (17 October 2013), (Exhibit IDN-16 (BCI)), p. 12.
99 P.T. Pelita Agung Agrindustri, Comments on Provisional Disclosure: Dumping Margin (1 July 2013),
(Exhibit IDN-15 (BCI)), p. 10; P.T. Ciliandra Perkasa, Comments on Definitive Disclosure (17 October 2013),
(Exhibit IDN-9 (BCI)), pp. 23-25; and P.T. Pelita Agung Agrindustri, Comments on Definitive Disclosure:
Dumping Margin (17 October 2013), (Exhibit IDN-10 (BCI)), p. 21.
100 P.T. Pelita Agung Agrindustri, Comments on Provisional Disclosure: Dumping Margin (1 July 2013),
(Exhibit IDN-15 (BCI)), pp. 6-9; Wilmar Group, Comments on Provisional Disclosure (1 July 2013),
(Exhibit IDN-13 (BCI)), p. 4. See also P.T. Ciliandra Perkasa, Comments on Definitive Disclosure
(17 October 2013), (Exhibit IDN-9 (BCI)), pp. 23-25; and P.T. Pelita Agung Agrindustri, Comments on
Definitive Disclosure: Dumping Margin (17 October 2013), (Exhibit IDN-10 (BCI)), p. 21.
101 P.T. Pelita Agung Agrindustri, Comments on Provisional Disclosure: Dumping Margin (1 July 2013),
(Exhibit IDN-15 (BCI)), p. 15 (referring to Council Implementing Regulation (EU) No. 157/2013 of
18 February 2013 imposing a definitive anti-dumping duty on imports of bioethanol from the United States,
recital (166)).
102 P.T. Ciliandra Perkasa, Comments on Definitive Disclosure (17 October 2013), (Exhibit IDN-9 (BCI)),
p. 26; P.T. Pelita Agung Agrindustri, Comments on Definitive Disclosure: Dumping Margin (17 October 2013),
(Exhibit IDN-10 (BCI)), p. 22; and Government of Indonesia, Comments on Definitive Disclosure
(17 October 2013), (Exhibit IDN-11), p. 4.
103 Wilmar Group, Comments on Provisional Disclosure (1 July 2013), (Exhibit IDN-13 (BCI)), p. 5;
Wilmar Group, Comments on Definitive Disclosure (17 October 2013), (Exhibit IDN-16 (BCI)), p. 12.
Wilmar Group considered that such a rate would be in line with commercial interest rate in Indonesia ([[***]]).
(Wilmar Group, Comments on Provisional Disclosure (1 July 2013), (Exhibit IDN-13 (BCI)), p. 5).

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investigation period, a 25% profit margin would result in a payback period of slightly less than
5 months, which is too ambitious for any young and innovative industry.104
7.41. Several Indonesian producers also objected to the EU authorities' reference to the short and
medium term borrowing rate in Indonesia of around 12% published by the World Bank as a basis
to confirm the reasonableness of the 15% profit margin. Indonesian producer P.T. Musim Mas
submitted that the 12% borrowing rate was well above its actual borrowing cost of [[***]].105
Several producers further noted that the EU authorities referred to the short and medium term
borrowing rate of 14% in Argentina published by the World Bank as a basis to confirm the
reasonableness of a 15% profit margin applied to Argentine producers, arguing that a different
treatment is justified for Argentine and Indonesian producers given that the short and medium
term borrowing rate in Indonesia is lower (i.e. 12%) as compared to Argentina (i.e. 14%). 106 At
most, they argued that the 12% rate should have been used as the profit cap under Article 2(6)(c)
of the EU Basic Regulation. 107 In addition, the Government of Indonesia claimed that it was
duplicative to replace the CPO costs in the context of constructing normal value while using at the
same time a 15% profit margin to reflect the profit margin in an undistorted market.108
7.42. The EU authorities rejected comments that a profit amount should have been determined
based on Article 2(6)(b) of the EU Basic Regulation on the ground "that all Indonesian (and
Argentinian) companies in the sample don't have sales in the ordinary course of trade of products
of the same general category of products (i.e. any other fuel)".109 In this regard, the EU authorities
rejected that sales of a blend of biodiesel with mineral diesel could be used to d etermine a profit
amount. The EU authorities explained as follows:
Whether or not the sales of a blend of biodiesel with mineral diesel fall under the
same general category of products, Article 2(6)(b) of the basic Regulation states, as
already mentioned i n recital (68) above, that such sales should be made in the
ordinary course of trade. Given that the domestic sales of biodiesel are not in the
ordinary course of trade, the sales of the blend of biodiesel with mineral diesel is not,
mutatis mutandis, considered to be in the ordinary course of trade.110
7.43. The EU authorities determined that, given the short and medium term borrowing rate in
Indonesia is around 12% according to World Bank data, it was reasonable to expect a higher profit
margin to be obtained whe n doing business in the domestic biodiesel markets than the borrowing
cost of capital.111 The EU authorities noted that the reference to the medium term borrowing rate
was not meant to set a benchmark but to "test the reasonableness of the margin used". 112 The EU
authorities also noted that various profit levels were used in the 2009 biodiesel proceeding against
the United States, with the weighted average profit well above 15%. 113 Finally, the EU authorities
rejected the argument of the Government of Indonesia that it was duplicative to replace the cost
of CPO since cost adjustments under Article 2(5) of the EU Basic Regulation and the reasonable
profit under Article 2(6)(c) of that Regulation "are two clearly distinct issues".114

104 P.T. Musim Mas, Comments on Definitive Disclosure, (Exhibit IDN-17 (BCI)), p. 10.
105 P.T. Musim Mas, Comments on Definitive Disclosure, (Exhibit IDN-17 (BCI)), p. 10.
106 P.T. Ciliandra Perkasa, Comments on Definitive Disclosure (17 October 2013), (Exhibit IDN-9 (BCI)),
p. 26; P.T. Pelita Agung Agrindustri, Comments on Definitive Disclosure: Dumping Margin (17 October 2013),
(Exhibit IDN-10 (BCI)), p. 22.
107 P.T. Ciliandra Perkasa, Comments on Definitive Disclosure (17 October 2013), (Exhibit IDN-9 (BCI)),
p. 25; P.T. Pelita Agung Agrindustri, Comments on Definitive Disclosure: Dumping Margin (17 October 2013),
(Exhibit IDN-10 (BCI)), p. 21.
108 Government of Indonesia, Comments on Definitive Disclosure (17 October 2013), (Exhibit IDN-11),
p. 2.
109 Definitive Disclosure, (Exhibit IDN-7), recital 68. See also Definitive Regulation, (Exhibit IDN-2),
recital 79.
110 Definitive Disclosure, (Exhibit IDN-7), recital 72; Definitive Regulation, (Exhibit IDN-2), recital 84.
111 Definitive Disclosure, (Exhibit IDN-7), recital 72; Definitive Regulation, (Exhibit IDN-2), recital 84.
112 Definitive Regulation, (Exhibit IDN-2), recital 84.
113 Definitive Disclosure, (Exhibit IDN-7), recital 72; Definitive Regulation, (Exhibit IDN-2), recital 84.
114 Definitive Regulation, (Exhibit IDN-2), recital 84.

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7.4.3 Whether the European Union acted inconsistently with Articles 2.2 and 2.2.2(iii)
of the Anti -Dumping Agreement by failing to calculate a profit cap and ensure that the
profit margin established for each Indonesian exporter did not exceed that cap
7.44. Indonesia first argues that the European Union violated Articles 2.2 and 2.2.2(iii) of the
Anti-Dumping Agreement for the simple fact that it did not calculate the profit cap , i.e. "the profit
normally realized by other exporters or producers on sales of products of the same g eneral
category in the domestic market of the country of origin".
7.45. Article 2.2 requires an investigating authority to use a "reasonable amount for
administrative, selling and general costs and for profits" in constructing normal value.
7.46. Article 2.2.2 provides:
For the purpose of paragraph 2, the amounts for administrative, selling and general
costs and for profits shall be based on actual data pertaining to production and sales
in the ordinary course of trade of the like product by the exporter or producer un der
investigation. When such amounts cannot be determined on this basis, the amounts
may be determined on the basis of:
(i) the actual amounts incurred and realized by the exporter or
producer in question in respect of production and sales in the domesti c
market of the country of origin of the same general category of products;
(ii) the weighted average of the actual amounts incurred and realized
by other exporters or producers subject to investigation in respect of
production and sales of the like prod uct in the domestic market of the
country of origin;
(iii) any other reasonable method, provided that the amount for profit
so established shall not exceed the profit normally realized by other
exporters or producers on sales of products of the same gene ral category
in the domestic market of the country of origin.
7.47. Indonesia argues that Article 2.2.2 imposes two mandatory conditions when determining an
amount for profits pursuant to subparagraph (iii): first, the amount for profits must be determined
on the basis of "any other reasonable method" ; and second, the amount for profits so established
shall not exceed the cap defined therein. Indonesia submits that the panels in EC – Bed Linen,
Thailand – H-Beams, and EU – Footwear (China) have confirmed that both of these conditions
must be met when applying a methodology pursuant to Article 2.2.2(iii) and there can be no
exception to the requirement to meet either of these obligations. 115 Indonesia submits that there
was no discussion of a benchmark for the cap nor did the EU authorities respond to requests from
Indonesian producers for information pertaining to the profit cap. 116 Hence, Indonesia considers
that it is clear that the EU authorities made no attempt to calculate a profit cap when applying the
methodology under Article 2.2.2(iii).
7.48. The European Union argues that Article 2.2.2(iii) requires only that a profit margin
established by an investigating authority does not exceed such a cap , and there is no mandatory
requirement in Article 2.2.2(iii) to calculate a profit cap . In the European Union's view, a profit
margin may not exceed the cap even absent any express reference to its calculation in the
determination.117 The European Union further considers that there cannot be an obligation on an

115 Indonesia's first written submission, paras. 138-142 (referring to Panel Reports, EU – Footwear
(China), paras. 6.52 and 7.300-7.301; Thailand – H-Beams, para. 7.124; and EC – Bed Linen, para. 6.97). See
also Indonesia's first written submission, paras. 156 (referring to Panel Report, EU – Footwear (China),
para. 7.300).
116 Indonesia's first written submission, paras. 146-150.
117 European Union's opening statement at the first meeting of the Panel, para. 22. The United States
shares the view that there cannot be an obligation to calculate the profit cap when the necessary information
for such a calculation does not exist. Moreover, the United States submits that an investigator is not obliged to
calculate a cap and indicate what that cap amount is in its determination, but rather an investigating authority
may use "any other reasonable method" to determine an amount for profits so long as that amount so

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investigating authority to calculate the profit cap when the necessary information for such
calculation does not exist , making it objectively impossible to calculate the cap .118 The
European Union contends that this was precisely the case in the investigation at hand, as sampled
Indonesian companies did not provide information to the EU authorities of sales in the ordinary
course of trade of products in the same general category that could have been used to calculate a
profit cap . The European Union also rejects that there is any requirement that an investigating
authority must solicit the necessary data from non -investigated Indonesian producers, arguing
that EU authorities do not have the authority to ob lige any party to provide data to calculate a
cap.119
7.49. The parties' arguments raise the issue of whether there is a mandatory requirement in
Article 2.2.2 (iii) to calculate a profit cap, or whether, as the European Union argues , there are
exceptions to the requirement, for instance, in cases where investig ated companies do not provide
information to the investigating authorities of sales in the same general category of product, or it
is not possible to calculate a cap for some other reason.
7.50. We find no basis for the European Union's argument that there is no mandatory requirement
in Article 2.2.2 (iii) to calculate a profit cap. We recall, as previou s panels have observed,
Article 2.2.2(iii) permits an investigating authority to use "any other reasonable method" to
determine an amount for profit subject to a ceiling or cap, defined as "the profit normally realized
by other exporters or producers on sales of products of the same general category in the domestic
market of the country of origin". 120 The panel in EU – Footwear (China) found that the
European Union acted inconsistently with Article 2.2.2(iii) precisely for the reason that it had failed
to consider the calculation of the cap at the time it made its determination. 121 Furthermore, in
reaching its finding, the panel found unconvincing the argument that had been made by the
European Union that the necessary data for calculating the cap was not available. Even accepting
that data was not available for calculating a cap, the panel reasoned that an investigating
authority cannot be excused from complying with the requirements in Article 2.2.2(iii).122
7.51. We share the view of the panel in EU – Footwear (China) , including the view that an
investigating authority may not be excused from the obligation to c alculate the cap whenever
applying a methodology pursuant to Article 2.2.2(iii) based on the argument that data is not
available. We consider that there are important reasons for requiring an investigating authority to
calculate a cap and to further provid e details on the cap in the determination. Absent this
information, interested parties would be unaware of whether the determined amount for profit
exceeds the cap or not. This lack of information would improperly place the burden on interested
parties to then try to demonstrate that the chosen amount for profit is in excess of the cap . The
burden would also shift to a WTO Member representing the exporting producers to bring a
challenge and demonstrate before a WTO panel that the profit amount used in const ructing normal
value exceeds the cap and is therefore in violation of Article 2.2.2(iii). We also consider that the
obligation to calculate the cap is fundamental for the reason mentioned by Indonesia; namely that,
absent a firm obligation, investigating a uthorities would be incentivized to adopt a passive
approach to establishing a cap as a way to lessen their obligation under Article 2.2.2(iii).123
7.52. As concerns the investigation that is the subject of the present dispute, we have no
evidence that the EU authorities addressed the issue of the cap in the investigation . Furthermore,
the European Union has confirmed in this proceeding that the EU authorities were not able to
calculate a cap for profits. 124 Since it is clear that the EU authorities did not calcu late a cap, it is

established does not exceed the profits normally realized by producers of the same general category of
products in the exporting country. In such a situation, the United States submits that a complaining party
would need to demonstrate before a WTO panel that a breach of Article 2.2.2(iii) results.
(United States' third-party submission, para. 18; third-party response to Panel question No. 1, para. 1).
118 European Union's opening statement at the first meeting of the Panel, paras. 23-25.
119 European Union's first written submission, paras. 41-46.
120 Panel Reports, EU – Footwear (China), paras. 6.52 and 7.300-7.301; Thailand – H-Beams,
paras. 7.124-7.125; and EC – Bed Linen, paras. 6.97-6.98.
121 Panel Report, EU – Footwear (China), paras. 7.299-7.300.
122 Panel Report, EU – Footwear (China), para. 7.300. ("Even assuming it to be the case that relevant
data on the basis of which the cap could be calculated was not available to the Commission in this case, we fail
to see how this excuses the Commission from complying with the requirements of the AD Agreement".)
123 Indonesia's second written submission, para. 35.
124 European Union's first written submission, para. 51.

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equally clear that the EU authorities failed to ensure that the amount for profit did not exceed that
cap, contrary to the second condition set forth in Article 2.2.2(iii).
7.53. While we share the view of the panel in EU – Footwear (China) that an investigating
authority may not be excused from the obligation to calculate the cap whenever applying a
methodology pursuant to Article 2.2.2(iii) based on the argument that data is not available , we
shall also address the parties' arguments as to whether or not data necessary to calculate a profit
cap was available to the investigating authority in the underlying investigation.
7.54. As a general matter, Indonesia sees no basis as to why the EU authorities could not have
solicited additional data from producers. Indonesia submits that the EU authorities regularly solicit
data from producers, including producers located in third countries when investigating non -market
economies. Furthermore, Indonesia submits that an investigating authority could resort to
information from publicly available sources to determine the cap. 125 Indonesia considers that this
would not have been necessary in the present investigation, as the EU authorities had the
necessary data before them on which to calculate a profit cap. First, Indonesia submits that the EU
authorities chose to limit the same general category of products to "other fuels", as reflected in
recital 68 of the Definitive Disclosure. 126 Indonesia submits that one producer, Wilmar Group and
related party [[***]] provided information on the profit margins obtained on sales of blends of
biodiesel and mineral diesel, i.e. "other fuels", which could have provided a basis to calculate the
cap.127 Even if these sales were considered to be unacceptable, Indonesia submits that the
European Union has also acknowledged that [[***]] had sales of diesel fuel and marine fuel oil –
also "other fuels" – which could have been used.128
7.55. Alternatively, Indonesia argues that the EU authorities could have defined the "same
general category" as oleochemicals, and used profit data for sales of oleochemicals to calculate the
profit cap. Indonesia submits that the technical, physical, and chemical characteristics of a product
as well as input materials and the production process are relevant factors to determining whether
products are in the same general category. 129 Indonesia submits that oleochemicals and biodiesel
are produced from the same feedstock through a similar process, shar e the same basic properties,
and address the technical markets and therefore, both should be considered to fall within the same
general category of basic organic chemicals.130 Indonesia considers it was particularly unwarranted
to reject profits on sales of oleochemicals, considering that the EU authorities decided to include
biodiesel for non -fuel use in the scope of the product concerned. In recital 24 of the Definitive
Regulation, Indonesia notes that the EU authorities denied a request for end-use relief for biodiesel
for non -fuel use "in view of the fact that biodiesel declared as for non -fuel use has the same
physical properties as biodiesel for fuel use".131 More generally, Indonesia rejects that the scope of
the same general category of products (described as "any other fuel") can be found to be narrower
than the scope of the product concerned (as including biodiesel for non -fuel use). 132 More

125 Indonesia's first written submission, para. 156; response to Panel question No. 68, para. 17; and
second written submission, paras. 31-32.
126 Indonesia's response to Panel question No. 64, paras. 7-8; Definitive Disclosure, (Exhibit IDN-7),
recital 68 ("Article 2(6)(b) is not applicable given that all Indonesian (and Argentinian) companies in the
sample don't have sales in the ordinary course of trade of products of the same general category of products
(i.e. any other fuel)").
127 Indonesia' opening statement at the first meeting of the Panel, para. 20; responses to Panel question
128 Indonesia's response to Panel question No. 64, paras. 4-8.
129 Indonesia's response to Panel question No. 13, paras. 18-19. Indonesia notes that demand side
factors may all be relevant to the determination of the same general category of products, but are a less
important factor in cases where there are dual or multiple uses of the product concerned. (Ibid. paras. 23-24).
130 Indonesia's first written submission, paras. 151-153 (referring to Wilmar Group, Comments on
Provisional Disclosure (1 July 2013), (Exhibit IDN-13 (BCI)), pp. 6-7); Definitive Disclosure, (Exhibit IDN-7),
recital 68.
131 Indonesia's second written submission, para. 46 (referring to Definitive Regulation, (Exhibit IDN-2),
recital 24).
132 Indonesia's second written submission, paras. 49-50. Indonesia finds support for this conclusion in
Article 3.6 of the Anti-Dumping Agreement which states that:

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generally, Indonesia submits that an investigator should not be permitted to define the same
general category of products too narrowly, as doing so effectively allows an investigating authority
to choose to exclude using sales of other products to calculate a profit cap, which thereby enables
the investigator to evade complying with the requirements of Article 2.2.2(iii).133
7.56. The European Union disagrees with Indonesia that the "same general category of products"
should be construed in an overly broad manner, especially given that the intention behind the
methodologies contained in Article 2.2.2 is to approximate as closel y as possible the price of the
like product in the domestic market of the exporting country. In this respect, the European Union
agrees with the reasoning set out by the panel in Thailand – H-Beams that, the broader the same
general category of products is construed, the potential increases that the constructed normal
value will not be representative of the price of the like product.134
7.57. The European Union argues that Indonesia has not met its burden of proof to explain why
other oleochemicals constitute the same category of products with biofuels, taking into account
their different end uses and markets, and different profit margins for that matter. 135 The
European Union also sees no contradiction in the narrow approach with respect to determining the
same general category of products (i.e. limiting the same general category to "any other fuel"),
while the prevention of circumvention requires a broader approach to defining the scope of the
product subject to investigation.136
7.58. Finally, the European Union submits that it would not have been appropriate to base a profit
cap on sales of blended biodiesel with mineral diesel, as the European Union contends that sales of
blended biodiesel with mineral diesel suffered from the "same d eficiencies" as sales of biodiesel,
i.e. these sales were found, mutatis mutandis, not to be in the ordinary course of trade because
they contained domestically sold biodiesel in their blend, which was found not to be in the ordinary
course of trade. 137 The European Union considers that the reference in Article 2.2.2(iii) to profit
"normally" realized operates to permit an investigating authority t o reject data that is obviously
distorted by some act of State for purposes of calculating a profit cap. While the European Union
does not suggest an "ordinary course of trade" requirement is included in Article 2.2.2(iii), the
European Union argues that the fact that sales of a given product are not in the ordinary course of
trade informs the analysis of "normally" under Article 2.2.2(iii). In other words, in certain
occasions data can simultaneously be not in the ordinary course of trade and not "normal" within
the meaning of Article 2.2.2(iii). The European Union finds support for its argument in the
following discussion of the Appellate Body in US – Hot-Rolled Steel that was made in the context of
Article 2.1:
In terms of the above definition, Article 2.1 requires investigating authorities to
exclude sales not made "in the ordinary course of trade", from the calcul ation of
normal value, precisely to ensure that normal value is, indeed, the "normal" price of
the like product, in the home market of the exporter. Where a sales transaction is
concluded on terms and conditions that are incompatible with "normal" commerci al
practice for sales of the like product, in the market in question, at the relevant time,
the transaction is not an appropriate basis for calculating "normal" value.138

The effect of the dumped imports shall be assessed in relation to the domestic production of the
like product when available data permit the separate identification of that production on the basis
of such criteri a as the production process, producers' sales and profits. If such separate
identification of that production is not possible, the effects of the dumped imports shall be
assessed by the examination of the production of the narrowest group or range of produ cts,
which includes the like product, for which the necessary information can be provided.
(emphasis added)
133 Indonesia's second written submission, paras. 53-54.
134 European Union's opening statement at the first meeting of the Panel, paras. 27-28 (referring to
Panel Report, Thailand – H-Beams, paras. 7.112 and 7.115).
135 European Union's first written submission, paras. 47-48, opening statement at the first meeting of
the Panel, para. 29; response to Panel question No. 19, paras. 39-40; and second written submission,
para. 35.
136 European Union's second written submission, para. 36.
137 European Union's second written submission, para. 25.
138 Appellate Body Report, US – Hot-Rolled Steel, para. 140.

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7.59. As highlighted by this passage, the European Union argues that the rationale of providi ng
for a cap for profits which is used to construct the profit is to ensure that the chosen profit is
"normal" in the domestic market. 139 In its view, the fact that sales of biodiesel blended with
mineral diesel were found not to be in the ordinary course of trade establishes that they are not an
appropriate basis to calculate the profit cap as there was no profit "normally" realized on sales of
blended biodiesel with mineral diesel by other exporters or producer s within the meaning of
Article 2.2.2(iii).140
7.60. Indonesia disagrees with the European Union's interpretation of the word "normally" in
Article 2.2.2(iii). Indonesia argues that the term "normally" in Article 2.2.2(iii) is intended to limit
the discretion of an investigating authority by not allowing it to use data that is a statistical outlier.
In this sense, the profit cap cannot be based on a statistical outlier, but should be based for
instance on an average of profit data as taken from various sources. Indonesia contends that its
interpretation is sup ported by the structure of Article 2.2.2, as well as the use of the word
"normally" in other provisions of the Anti -Dumping Agreement. Indonesia submits that the term
"normally" cannot be intended as having the same meaning as the language "in the ordinary
course of trade" that is used elsewhere in the Anti -Dumping Agreement, which provides
investigating authorities with discretion to take into account commercial conditions surrounding
sales and disregard certain sales on that basis.141
7.61. The parties ' debate as whether or not it was possible to calculate a profit cap in the
particular investigation raise s several additional questions regarding the discretion of an
investigating authority surrounding the determination of the profit "normally" realized by other
exporters or producers and the scope of the same general category of products.
7.62. We begin by noting that Article 2.2.2(iii) does not specify a particular requirement on an
investigating authority as to how to define what products fall within the same general category of
products, for purposes of determining "the profit normally realiz ed". We agree with the
European Union that there is no obligation to construe the scope of products in the same general
category broadly. The panel in Thailand – H-Beams noted that the methodologies in Articles 2.2
and 2.2.2 aim to approximate the price of the like product. Re ferring in that case to
Article 2.2.2(i), the panel observed that the use of a broader category of products when defining
the same general category of product s means that more products other than the like product will
be included, which in turn may result in a constructed normal value that is less representative of
the price of the like product.142 We share this view and consider it equally applicable in the cont ext
of Article 2.2.2(iii).
7.63. Against this background, we see no basis why the European Union would be required to
treat oleochemi cals as falling within the same general category as biodiesel . In our view, a
reasonable and objective authority may conclude th at the same general category of products is a
narrower category.143 In light of this discretion, based on the information we have before us, we
disagree with Indonesia that the EU authorities were necessarily required to rely on data on sales
of oleochemicals as a basis to calculate the profit cap under Article 2.2.2(iii) . In stating this, we do
not mean to suggest that the EU authorities were therefore excused from establishing the profit
cap.

139 European Union's second written submission, paras. 21-33.
140 The European Union recalls that Indonesia has not disputed the finding by the EU authorities that
there were no sales of biodiesel in the ordinary course of trade in Indonesia. (European Union's first written
submission, para. 23 (referring to Definitive Regulation, (Exhibit IDN-2), recital 28)). The European Union
further submits that data provided on sales of blends of biodiesel and mineral diesel could not be used for
purposes of Article 2.2.2(iii) because profit amounts were only provided on the biodiesel element, and not the
sales of the blended product. (European Union's opening statement at the second meeting of the Panel,
paras. 18-19). Indonesia disputes this argument. (Indonesia's response to Panel question No. 64, paras. 4-10).
141 Indonesia's response to Panel question No. 71, paras. 26-35. See also response to Panel question
No. 70, para. 25.
142 Panel Report, Thailand – H-Beams, para. 7.115.
143 The European Union submits that according to Wilmar Group's website, oleochemicals are a very
broad category of products, including soap, noodles, refined glycerine, cosmetic esters and palm waxes.
(European Union's response to Panel question No. 19, para 40 (referring to Wilmar Group website
http://www.wilmar-international.com/our-business/tropical-oils/manufacturing/tropical-oils-
products/oleochemicals/ (accessed 28 September 2017))).

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7.64. We also see no issue with the decision of the EU authorities to d efine the scope of the same
general category of products as "any other fuel" 144 while at the same time deny ing a request for
end-use relief for biodiesel for non -fuel use. We recall that Article 2.2.2 aims to approximate the
price of the like product. In app roximating this price, an investigating authority may determine a
category of products that fall in the same general category for purposes of constructing an amount
for profit (or SG&A expenses) with the goal of approximating as closely as possible the pri ce of the
like product. This decision to define the category in this way could result, for instance, from the
fact that a significant portion of sales of the product concerned fall within that category based on a
particular end use (e.g. as a fuel). At the same time, an investigating authority may determine the
need to take action to prevent circumvention in respect of products sold in the domestic market
with similar physical properties but different end uses. In the case at hand, the EU authorities
determined that the product for which end-use relief was requested had similar physical properties
and could be further processed and thereby converted for use as a fuel.145
7.65. We disagree, however, with the European Union's interpretation of the term "normally" in
Article 2.2.2(iii). We see no basis for the European Union's argument that "profit normally realized"
in Article 2.2.2(iii) means that an investigator may disregard the profit realized on sales that are
considered not compatible with normal commercial practice. The word "normally" is defined as
"[i]n a regular manner; regularly" or "[u]nder normal or ordinary conditions ; as a rule, ordinarily "
or "[i]n a normal manner, in the usual way". 146 This suggests that the term "normally" in
Article 2.2.2(iii) refers to commonality of occurrence, and therefore to profits that are regularly,
ordinarily, usually, or as a rule realized. We consider this understanding is consistent with the way
that the word "normally" is used, for example, in footnote 8 of the Anti -Dumping Agreement,
concerning what the date of sale should "normally", i.e. usually, be. Similarly, Article 5.8 states
that the volume of dumped imports shall "normally" be regarded as negligible , except in the case
countries which individually account for le ss than 3 % of the imports of the like product in the
importing Member collectively account for more than 7 % of imports of the like product in the
importing Member.
7.66. We find that t he structure of sub paragraphs of Article 2.2.2 is also relevant in this regard .
Subparagraphs (i) and (ii) refer to the use of "actual amounts", without any qualification that such
sales must relate to any form of "normal" commercial conditions. The three alternative methods
for calculating profit amounts in the three subparagraphs constitute "close approximations" 147 of
the general rule contained in the chapeau of Article 2.2.2 , and while subparagraphs (i) and (ii)
express a preference for the actual data regarding the exporter and like product in question, there
is "an incremental pr ogression away from these principles before reaching 'any other reasonable
method' in Article 2.2.2(iii)".148 Since the data becomes more approximate as one progresses from
subparagraph (i) to subparagraph (iii), it seems highly unlikely that the drafters would have
envisaged an investigating authority considering the "normality" of the commercial conditions
under subparagraph (iii) but not under subparagraphs (i) and (ii).
7.67. In addition, we are not persuaded by the European Union's reliance on the findings of the
Appellate Body in US – Hot-Rolled Steel that:
In terms of the above definition, Article 2.1 requires investigating authorities to
exclude sales not made "in the ordinary course of trade", from the calculation of
normal value, precisely to ensure that normal value is, indeed, the "normal" price of
the like product, in the home market of the exporter. Where a sales transaction is
concluded on terms and conditions that are incompatible with "normal" co mmercial
practice for sales of the like product, in the market in question, at the relevant time,
the transaction is not an appropriate basis for calculating "normal" value.149
7.68. In that case, the Appellate Body necessarily understood "normal value" as referri ng to sales
that are compatible with normal commercial practice. This does not mean that th e term "normal"

144 Definitive Disclosure, (Exhibit IDN-7), recital 68.
145 Definitive Regulation, (Exhibit IDN-2), recital 23.
146 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 2, p. 1945.
147 Panel Report, EC – Bed Linen, para. 6.60.
148 Panel Report, EU – Biodiesel (Argentina), para. 7.335.
149 Appellate Body Report, US – Hot-Rolled Steel, para. 140.

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should be interpreted through out the Anti-Dumping Agreement as referring to normal commercial
practice, particularly when an "ordinary course of trad e" standard is not expressly provided for , or
in cases where the term "normally" appears to relate more to commonality of occurrence.
7.69. We therefore disagree with the European Union's interpretation of "normal" and its view
that data available to establish " profits normally realized" within the meaning of Article 2.2.2(iii)
may be disregarded in circumstances where, according to the European Union, "all of the data
might be obviously distorted by some act of the State" 150 or data pertains to sales that are not
considered as being made in the ordinary course of trade. Consequently, we also disagree with the
assessment that it was appropriate to disregard information on profit amounts on sales of blends
of biodiesel with mineral diesel for the purposes of calculating the cap for the same reason, i.e.
that sales were not considered as being made in the ordinary course of trade.151
7.70. We also have doubts regarding the failure of the EU authorities to consider whether data on
sales of diesel fuels and marine fuel oil by [[***]] could have been used to determine the profit
cap, considering that these products could be considered as "other fuels", and hence, would fall
within the same general category of product .152 In our view, t he E U authorities could have
considered these sales for the determination of the profit cap.
7.71. Ultimately, an investigating authority retains a degree of discretion to define the same
general category of products pursuant to Article 2.2.2(iii). In this particula r investigation, we
believe that there were sales of products in the same general category that could have provided a
basis to calculate the cap. In addition, if an investigating authority chooses to reject data provided
in the investigation, the investiga ting authority would then be required to seek relevant data
elsewhere, including from publicly available sources in order to comply with its obligations under
Article 2.2.2(iii). We are also not persuaded by the European Union's argument that the term
"normally" in Article 2.2.2(iii) permits an investigating authority to enquire into the commercial
conditions surrounding those sales and to disregard certain sales based on the prevailing
commercial conditions.
7.72. For the foregoing reasons, we therefore disagree with the argument of the European Union
that it was objectively impossible to calculate the profit cap in the underlying investigation. In
reaching this finding, we agree with the European Union that there is no obligation to construe the
scope of products in the same general category broadly, and therefore, the EU authorities were not
required to treat oleochemicals as falling within the same general category as biodiesel. We also
agree with the decision of the EU authorities to define the scope of the same general category of
products as "any other fuel" while at the same time denying a request for end -use relief for
biodiesel for non -fuel use. However, we reject the European Union's argument that the phrase
"profits normally realized" within Article 2.2.2(iii) permits an investigating authority to disregard
data on sales that are not considered compatible with normal commercial practice . Consequently,
we also reject the argument that it would have been appropriate to disregard information on profit
amounts on sales of blends of biodiesel with mineral diesel for the purposes of calculating the cap
for the same reason, i.e. that sales were n ot considered as being made in the ordinary course of
trade. In addition, we also find that the EU authorities should have considered sales of diesel fuels
and marine fuel oil by [[***]] to determine the profit cap.153
7.73. Accordingly, we conclude that Indonesia has demonstrated that the European Union acted
inconsistently with Article 2.2.2(iii) of the Anti -Dumping Agreement in the original investigation in

150 European Union's second written submission, para. 23.
151 We recall that the EU authorities did not specifically address in the investigation whether data on
sales of blends of biodiesel and mineral diesel could be used to calculate the profit cap for purposes of
Article 2.2.2(iii). The EU authorities instead concluded that data on sales of blends of biodiesel and mineral
diesel of one Indonesian producer could not be used to determine a profit amount under Article 2(6)(b) of the
EU Basic Regulation, which implements the obligation contained in Article 2.2.2(i) of the Anti-Dumping
Agreement, subject to the additional requirement that sales in the same general category be made in the
ordinary course of trade. (Definitive Regulation, (Exhibit IDN-2), recital 84).
152 Definitive Disclosure, (Exhibit IDN-7), recital 68.
153 Indonesia rejects the European Union's assertions that it was not possible to calculate a profit cap as
ex post rationalization that should be rejected. (Indonesia's first written submission, paras. 141 and 149-150;
second written submission, para. 28). In light of our disagreement with the European Union's position that it
was objectively impossible to calculate a profit cap based on a lack of data before it, we do not consider it
necessary to address Indonesia's argument further.

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determining the amount for profits for Indonesian producers by failing to determine the profit cap,
i.e. "the profit normally realized by other exporters or producers on sales of products of the same
general category in the domestic m arket of the country of origin" . As a result of this violation,
Indonesia further requests that we find the European Union also acted inconsistently with
Article 2.2 of the Anti -Dumping Agreement.154 We note that the chapeau of Article 2.2.2 indicates
that amounts for administrative, selling , and general costs and for profits shall be determined
"[f]or the purpose of paragraph 2" of Article 2 of the Anti -Dumping Agreement. Accordingly, w e
consider that Indonesia's claim under Article 2.2 is purely consequential and we therefore
additionally find that the European Union acted inconsistently with Article 2.2 of the Anti-Dumping
Agreement.
7.4.4 Whether the European Union determined a profit margin for Indonesian producers
on the basis of a "reasonable method" within the meaning of Article 2.2.2(iii) of the
Anti-Dumping Agreement
7.74. Indonesia additionally seeks a finding that the European Union acted inconsistently with
Article 2.2.2(iii) of the Anti -Dumping Agreement because the European Union failed to determine
the amount for profit based on a "reasonable method" within the meaning of Article 2.2.2(iii) of
the Anti -Dumping Agreement . The Europ ean Union submits that the method on which the EU
authorities determined the level of profits was reasonable, and the resulting amount was also itself
reasonable.155 We now address and make findings with respect to this addition al aspect of
Indonesia's claim, as our views in this regard could be relevant in the context of implementation.
7.75. Argentina raised a similar claim in EU – Biodiesel (Argentina) that, through the
determination of a 15% profit margin for Argentine producers, the European Union failed to
determine an amount for profits on the basis of a reasonable metho d within the meaning of
Article 2.2.2(iii).156 The EU authorities applied the same methodology when determining an
amount for profits for both Argentine and Indonesian producers during the biodi esel investigation,
and determined the same profit margin for all Argentine and Indonesian producers, i.e. 15% based
on turnover as "a reasonable amount that can be achieved by a relatively new, capital intensive
industry" in Argentina and Indonesia .157 The panel in EU – Biodiesel (Argentina) found that
Argentina failed to establish that the E uropean Union acted inconsistently with Article 2.2.2(iii) in
its determination of a 15% margin in constructing the Argentine producers' normal value. 158 This
finding was not the subject of an appeal.
7.76. Indonesia acknowledges the panel's finding in EU – Biodiesel (Argentina) but nevertheless
maintains that this does not prevent the Panel from finding in this proceeding that the same 15%
profit margin established for Indon esian producers was not determined pursuant to a reasonable
method as required by Article 2.2.2(iii). In this regard, Indonesia submits that there are factual
differences between Argentine and Indonesian producers , and the evidence before the EU
authorities during the investigation clearly demonstrate s that a different margin should have been
chosen for Indonesian producers .159 The European Union submits that, although the facts are not
identical in the two cases, Indonesia has not met its burden of proof as complainant to establish
that the method for calculating profits for Indonesian producers was not reasonable or that the
amount was not reasonable.160
7.77. We have set out the facts in paragraphs 7.37. to 7.43. above related to the
European Union's determination of an amount for profits for Indonesian biodiesel producers. Under
its approach, the EU authorities took as a starting point the profit mar gin that the EU biodiesel
industry was reasonably expected to achieve during the early stages of development of the
industry in 2005 -2006, which was found to be 15%. The European Union confirmed that thi s
amount was the average profit obtained by the EU in dustry during the 2004 -2006 period which

155 European Union's first written submission, para. 34.
156 Panel Report, EU – Biodiesel (Argentina), paras. 7.307-7.351. Unlike Indonesia in this dispute,
Argentina did not separately claim that the European Union acted inconsistently with the requirement in
Article 2.2.2(iii) to calculate a cap for profits and to ensure that the profit margin did not exceed such a cap.
157 Definitive Regulation, (Exhibit IDN-2), recitals 44 and 84.
158 Panel Report, EU – Biodiesel (Argentina), para. 7.351.
160 European Union's first written submission, paras. 37-38. See also comments on Indonesia's response

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had been determined in the context of the 2009 anti -dumping duty investigation into biodiesel
imports from the United States.161 The EU authorities considered that it was reasonable to use this
15% profit margin for t he Indonesian and Argentine biodiesel industries as these industries were
found to be at the same stage of development as the EU industry during the 2005 -2006 period.162
As indicated in the Definitive Regulation, the EU authorities confirmed the reasonablene ss of the
15% profit margin by looking at the short and medium term borrowing rates in both Argentina and
Indonesia, which was found to be 14% and 12%, respectively, according to World Bank data. The
EU authorities specifically noted that the reference to the short and medium term borrowing rate
was not meant to set a benchmark but to "test the reasonableness" of the margin used. 163 The EU
authorities considered it reasonable to expect a higher profit margin to be obtained in the domestic
market than the prevailing borrowing cost of capital in those countries. Accordingly, the 15% profit
was found to be "a reasonable amount that can be achieved by a relatively new, capital-intensive
industry in Indonesia".164
7.78. Since the panel in EU – Biodiesel (Argentina) evaluated the methodology used by the EU
authorities – which is the same methodology used to establish an amount for profits for
Indonesian producers – to establish a profit margin for Argentine producer s, we begin by recalling
those findings. We will then assess the relevance of those findings in light of the arguments raised
by Indonesia in this dispute.
7.79. In EU – Biodiesel (Argentina), the panel began with an assessment of what constitutes "any
other reasonable method" under Article 2.2.2(iii) before assessing "whether reliance on such a
method can be discerned from the explanations provided by the EU authorities in the investigation
at issue".165 We first refer to the panel's interpretation of the meaning of "any other reasonable
method" under Article 2.2.2(iii):
We turn first to the ordinary meaning of the term "method" in the context of
Article 2.2.2(iii). Dictionary definitions of the term include "[p]rocedure for attaining
an object", "[a] mode of pr ocedure; a (defined or systematic) way of doing a thing",
and "[a] written systematically -ordered collection of rules, observations, etc. on a
particular subject".[575] Based on these definitions, we understand the term "method"
to refer, in general terms, to a process or procedure, as opposed to an outcome.
The context of the term in Article 2.2.2(iii) sheds further light on its scope. First, the
term is qualified by the words "any other". The use of "any" suggests a particularly
broad scope [576], and the use of "other" suggests that the other subparagraphs of
Article 2.2.2 illustrate what may be captured by the term "method" under
Article 2.2.2(iii). In that regard, we note that the chapeau and paragraphs preceding
Article 2.2.2(iii) provide, in relevant part, that the amounts for administrative, selling
and general costs and for profits may be "based on" or "determined on the basis of":
(i) actual data pertaining to production and sales in the ordinary course of trade of the
like product by the exporter o r producer under investigation; (ii) the actual amounts
incurred and realized by the exporter or producer in question in respect of the same
general category of products; or (iii) the weighted average of the actual amounts
incurred and realized by other ex porters or producers subject to investigation in
respect of production and sales of the like product. [577] It is significant, in our view,
that these three alternatives refer to the kind of specific data on which the amount of

161 European Union's response to Panel question No. 7, paras. 6-8. See also Panel Report, EU – Biodiesel
(Argentina), paras. 7.340-7.342; and Commission Regulation (EC) No. 193/2009 of 11 March 2009 imposing a
provisional anti-dumping duty on imports of biodiesel originating in the United States of America,
(Exhibit IDN-25), recital 164.
162 The European Union has confirmed that the EU authorities' finding in respect of investigated
Argentine producers was based on the same finding. (European Union's response to Panel question No. 7,
paras. 6-8).
163 Definitive Regulation, (Exhibit IDN-2), recital 84. The EU authorities confirmed the reasonableness of
the 15% profit margin for Argentine producers by looking at the short and medium term borrowing rate in
Argentina, which was found to be 14% according to World Bank data. (Definitive Regulation, (Exhibit IDN-2),
recital 44).
164 Definitive Regulation, (Exhibit IDN-2), recital 84. The EU authorities reached the same finding in
respect of investigated Argentine producers. (Definitive Regulation (Exhibit IDN-2), recital 44; see also
Provisional Regulation, (Exhibit IDN-1), recitals 44 and 65).
165 Panel Report, EU – Biodiesel (Argentina), para. 7.333.

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profit can be determined, rat her than a specific procedure or methodology for the
calculation of the amount for profits. This suggests to us that the term "method" in
subparagraph (iii) refers to a reasoned consideration of the evidence before the
investigating authority for the deter mination of the amount for profits, rather than to
a pre-established procedure or methodology. [578] In addition, these "other" methods
indicate a preference for the actual data regarding the exporter and like product in
question, with an incremental progre ssion away from these principles before reaching
"any other reasonable method" in Article 2.2.2(iii). It flows from that context that the
phrase "any other reasonable method" may be used in the absence of reliable data
concerning the actual exporter or oth er exporters and the like product. [579] This, in
turn, suggests that an investigating authority would u sually have recourse to
Article 2.2.2(iii) in circumstances where its options for basing the determination of an
exporter's profit margin are constrained . This context, together with absence of any
additional guidance in Article 2.2.2(iii) on what the "method" chosen should entail in
terms of either the source or scope of the data or procedure, suggests to us a broad
and non-prescriptive understanding of the term.
Second, as we have noted above, in addition to the requirement that it be determined
on the basis of "any reasonable method", Article 2.2.2(iii) imposes a ceiling on the
amount for profits determined [580], requiring that the amount for profits "n ot exceed
the profit normally realized by other exporters or producers on sales of products of the
same general category in the domestic market of the country of origin". The presence
of this constraint, in the absence of any other guidance on the kind of "method" to be
adopted, confirms our broad and non -prescriptive understanding of the term
"method".
We now turn to assess what constitutes a "reasonable" method in the context of
Article 2.2.2(iii). In the context of Article 2.2.2(iii), it is clear from th e use of "any
other" before "reasonable" that what is "reasonable" is connected to the preceding
paragraphs and the chapeau and that the "methods" set in the preceding paragraphs
and the chapeau are presumptively reasonable. As we have discussed, these ind icate
a preference for the actual data of the exporter and like product in question, with an
incremental progression away from these principles before reaching "any other
reasonable method" in Article 2.2.2(iii). In our view, this context suggests that the
general function of Article 2.2.2 is to approximate what the profit margin (as well as
administrative, selling and general costs) would have been for the like product in the
ordinary course of trade in the domestic market of the exporting country.[581] Thus, in
our view, the reasonableness of the method used under Article 2.2.2(iii) for
determining the profit margin turns on whether it is rationally directed at
approximating what that margin would have been if the product under consideration
were sold i n the ordinary course of trade in the domestic market of the exporting
country.
Based on the foregoing considerations, we understand the term "any other reasonable
method" in Article 2.2.2(iii) to involve an enquiry into whether the investigating
authority's determination of the amount for profits is the result of a reasoned
consideration of the evidence before it, rationally directed at approximating the profit
margin to what would have been realized if the product under consideration had been
sold in the ordinary course of trade in the exporting country.166
[fn original]575 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University
Press, 2007), Vol. 1, p. 1767.
[fn original]576 Appellate Body Reports, US – Anti-Dumping and Countervai ling Duties (China) ,
fn 197; Canada – Autos para. 79.
[fn original] 577 See above, para. 7.310, for the text of Article 2.2.2(iii) of the
Anti-Dumping Agreement.
[fn original]578 Argentina acknowledges that "neither of the two procedures set forth in (i) and (ii)
represents a complex or elaborated method. They are rather simple" (adding, however, that
"they go beyond the mere unsubstantiated assertion with respect to what profits are").
(Argentina's response to Panel question No. 108, para. 86)

166 Panel Report, EU – Biodiesel (Argentina), paras. 7.334-7.338.

BCI deleted, as indicated [[***]]

[fn original]579 We note that the panel in EC – Bed Linen found that there is no hierarchy among
the methods for determining the amount for profits in Articles 2.2.2(i) -(iii). (Panel Report, EC –
Bed Linen, para. 6.59). The question of the interaction between these methods, or a potential
hierarchy among them, has not been raised in this dispute and accordingly we express no views
in that regard.
[fn original]580 We note that the ceiling does not apply to the determination of the amounts for
administrative, selling and general costs.
[fn original]581 Panel Report, Thailand – H-Beams, para. 7.112.
7.80. Thus, the panel reached the view that "any other reasonable method" in Article 2.2.2(iii)
"involve[s] an enquiry into whether the investigating authority's determination of the amount for
profits is the result of a reasoned consideration of the evidence before it, rationally directed at
approximating the profit margin to what would have been re alized if the product under
consideration had been sold in the ordinary course of trade in the exporting country".167
7.81. The panel then turned to examine whether the EU authorities' explanations for determining
a 15% profit margin as applied to Argentine produc ers in the investigation met this requirement.
In its evaluation, t he panel found relevant that the application by the petitioner EBB had drawn
attention to findings made by the EU authorities in the 2009 investigation into biodiesel imports
from the Unite d States that a profit margin of 15% "represented a level reasonable achieved by
the European Union biodiesel industry" 168, in particular, as a profit level that would reasonably
guarantee productive investment for a "newly established" biodiesel industry. 169 The panel took
the view that the EU authorities had therefore arrived at the figure of 15% based on their
experience with the relevant industry in other investigations. Accordingly, the panel concluded that
"the EU authorities arrived at the 15% figure by taking into account the characteristics of a
biodiesel industry that is 'young', 'innovative' and 'capital intensive' and by drawing on their earlier
experience in a recent, similar investigation".170
7.82. The panel next noted the EU authorities' explanation that they had "tested" the 15% margin
by comparing it to the short and medium term borrowing rate in Argentina of around 14% that
was published by the World Bank. The panel was of the view that the EU authorities' determination
of the amount for profits "proceeded from a reasoned consideration of the evidence before
them".171 In particular, the panel concluded that the 15% figure was chosen on the basis of what
appear to be plausible similarities between the stage of development of the Argentine biodiesel
industry at the time of the investigation, on the one hand, and the stage of development of the EU
industry at t he time of the investigation of biodiesel from the United States, on the other hand.
The panel disagreed with Argentina that such an approach did not qualify as a "method" within the
meaning of Article 2.2.2(iii).172
7.83. The panel then proceeded to evaluate the reasonableness of the EU authorities' approach.
The panel concluded that " an unbiased and objective investigating authority could reasonably
consider, as an initial step , that profit margins determined in prior investigations of other
producers in the same industry at similar stages of development provide an indication of the p rofit
margins of producers in a subsequent investigation. "173 The panel fu rther reasoned that it would
be appropriate for an unbiased and objective investigating authority to "test" that figure against
relevant benchmarks. Notably, the panel found that the EU authorities had considered four such
benchmarks, including : the World Bank indicator for short and medium term borrowing rates
(which was 14%); the rate of the actual profits of Argenti ne biodiesel producers (which were "in
excess of 25% "174); a 5% benchmark that had been proposed by one Argentine producer as a
profit figure that was regularly used in si milar commodity -related markets; and an 11%
benchmark representing target profit in the context of determining the injury elimination margin
for the EU industry .175 The panel was persuaded by the EU argument that a 5% margin was n ot

167 Panel Report, EU – Biodiesel (Argentina), para. 7.338.
168 Panel Report, EU – Biodiesel (Argentina), para. 7.340.
169 Panel Report, EU – Biodiesel (Argentina), para. 7.340.
170 Panel Report, EU – Biodiesel (Argentina), para. 7.342.
171 Panel Report, EU – Biodiesel (Argentina), para. 7.344.
172 Panel Report, EU – Biodiesel (Argentina), para. 7.344.
173 Panel Report, EU – Biodiesel (Argentina), para. 7.347.
174 Panel Report, EU – Biodiesel (Argentina), para. 7.348.
175 Panel Report, EU – Biodiesel (Argentina), para. 7.348.

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systematically used, as well as the argument that the 11% figure was not appropriate for a "young
and innovative" biodiesel industry.176
7.84. On this basis, the panel found "the selection and testing of the 15% profit margin resulted
from a reasoned analysis t hat … was rationally directed at approximating what the Argentine
producers' profit margin for the like product would have been if the like product had been sold in
the ordinary course of trade in the domestic market of the exporting country".177
7.85. The panel noted what it described as a "degree of inconsistency" in the EU
authorities' assessment, including in the decision to reject a request by Argentine producers to use
the 11% figure, as that was the figure used for calculating the target profit in the conte xt of
determining the injury elimination margin for the EU industry in the US biodiesel investigation,
instead of the 15% profit rate.178 Notwithstanding this observation, the panel reasoned that an
objective and unbiased investigating authority could have p lausibly differentiated between the
determination of the profit margin of Argentine producers for the purpose of constructing normal
value on the one hand, and the determination of the profit margin of the European Union industry
for the purpose of determi ning the level of injury, on the other hand. The panel found this was
reasonable given the view that the EU domestic industry had matured, justifying a reduction in its
target profit in the absence of dumped imports, while the Argentine industry was found to be
"young and innovative".179
7.86. Based on the above reasoning, the panel therefore found that Argentina failed to establish
that the E uropean Union acted inconsistently with Article 2.2.2(iii) in its determination of a 15%
margin.180
7.87. We are of the view that t he panel 's assessment that the approach taken by the EU
authorities constitutes a "method" within the meaning of Article 2.2.2(iii) also applies in this
dispute.181 We further note that Indonesia has not disputed this finding. Accordingl y, we are not
required to assess whether the approach taken by the EU authorities in respect of Indonesian
producers constitutes a "method" under Article 2.2.2(iii). The only question that we are required to
consider is whether the method used by the EU authorities in respect of Indonesian producers was
"reasonable" within the meaning of Article 2.2.2(iii). We will therefore consider the
parties' arguments in relation to this issue.
7.88. There is no disagreement between the parties regarding the decision by EU auth orities to
consider the profits obtained by the biodiesel industry outside of Indonesia (in this case the profits
obtained by the EU authorities in the 2005 -2006 period) as a relevant starting point to determine
the reasonable profit margin for Indonesian producers.182 However, Indonesia maintains that the
focus of Article 2.2.2(iii) is on the profit margin in the exporting country and not the profit margin
obtained by the same industry in another country. 183 Accordingly, Indonesia argues that the Panel
must enquire into whether the EU authorities' determination of the amount of profits is the result
of a reasoned consideration of the evidence before it that is rationally directed at approximating
the profit margin in Indonesia.184 In this respect, Indonesia considers that it has given prima facie
evidence that the EU authorities failed to take into account important difference s in the stage of
development of the Indonesian biodiesel industry as compared to the EU indust ry in the
2005-2006 period, an d has therefore established that the European Union failed to apply a
reasonable method in respect of Indonesian producers. Therefore, Indonesia considers that the
burden of proof shifts to the European Union to rebut its claim. 185 The European Union contend s

176 Panel Report, EU – Biodiesel (Argentina), para. 7.348.
177 Panel Report, EU – Biodiesel (Argentina), para. 7.349.
178 The panel stated: "there seems to be a degree of inconsistency between this reasoning, on the one
hand, and the use by the EU authorities of the 15% profit margin determined on the basis of its earlier
experience from the United States investigation, on the other". (Panel Report, EU – Biodiesel (Argentina),
para. 7.350).
179 Panel Report, EU – Biodiesel (Argentina), para. 7.350.
180 Panel Report, EU – Biodiesel (Argentina), para. 7.351.
181 Panel Report, EU – Biodiesel (Argentina), para. 7.344.
182 Indonesia's second written submission, para. 66.
183 Indonesia's first written submission, para. 163 (referring to Panel Report, EU – Biodiesel (Argentina),
para. 7.338).
184 Indonesia's second written submission, para. 66.
185 Indonesia's responses to Panel question No. 75, para. 49, and No. 76, paras. 50-51.

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that statements made by Indonesia do not qualify as prima facie evidence, but rather, constitute
assertions unsupported by evidence, which are inadequate to establish its claim. The
European Union submits that, in any event, it has provided the necessary rebuttal in the
information it has provided.186
7.89. According to Indonesia , the evidence shows that the European Union industry was "two,
maximum three years old" during the 2005-2006 period. Indonesia submits that the evidence also
shows that some of the Indonesian producers were already active in the biodiesel industry in 2006
and 2007, which means that the Indonesian industry was already five to six years old during the
investigation period in 201 1 and 201 2. In Indonesia's view, t his demonstrates that the
European Union's claim that the Indonesian industry was at a similar stage of development as the
European Union industry was in 2005-2006 is factually incorrect.187
7.90. The European Union submits that the EU authorities properly concluded that the Indonesian
biodiesel industry was at a similar stage of devel opment during the investigation period as the
European Union was during the 2005-2006 period. The European Union argues that information in
the public domain shows that the EU biodiesel industry star ted in the 1990s. Hence, the EU
industry would have been more than five to six years old by the 2005 -2006 period and there is no
basis to Indonesia's argument that the European Union industry was between two and thre e years
old during that period.188
7.91. The European Union further submits that it is not sufficient to establish the maturity of one
industry or another by reference to the number of years an industry has been in existence. The
European Union submits that a biodiesel industry in one country may develo p more quickly or
slowly than a biodiesel industry in another country.189 The European Union submits that reference
to production volumes, the pace of increase or stagnation of production volumes, the number of
producers and the level of competition , and the overall size of the producing country may be
helpful elements in assessing the stage of development of a biodiesel industry. 190 In this
respect, the European Union has submitted publicly available evidence on the production levels of
the EU industry in the 2004-2005 period as compared to Indonesian product ion levels in 2012.
The European Union submits that EU production reached nearly 2 million tonnes in 2004,
3 million tonnes in 2005, and 5 million tonnes in 2006. In comparison , annual production reached
2.2 million tonnes in Indonesia in 2012, similar to the production volume of the EU industry in the
years 2004 and 2005.191
7.92. We note that Indonesia has also not disputed the statement that the EU industry started in
the 1990s. 192 Indonesia also does not disagre e that factors other than the date of starting
operations – such as the pace of development or production volumes of biodiesel industries – may
be relevant for determining whether the Indonesian industry was at a similar stage of development
as the EU industry was in the 2005-2006 period.193 Indonesia has not commented on or otherwise
objected to production statistics submitted by the European Union 194, which , according to the
European Union, shows that production in Indonesia in 2012 was similar to that of the EU industry
in the 2004 -2005 period. To the extent that production volumes may indicate the stage of
development of an industry, the figures submitted by the European Union suggest that the

186 European Union's comments on Indonesia's response to Panel question No. 75, para. 22.
187 Indonesia's second written submission, paras. 70-71.
188 European Union's response to Panel question No. 75, paras. 30-32.
189 European Union's opening statement at the second meeting of the Panel, para. 31.
190 European Union's response to Panel question No. 74, para. 28; comments on Indonesia's response to
Panel question No. 74, para. 19.
191 European Union's response to Panel question No. 75, paras. 31-32 (referring to European Biodiesel
Board, EU production statistics 1998-2013, (Exhibit EU-6 (numbered by the Secretariat) (submitted as
Exhibit EU-4 in response to Panel question No. 75, para. 31)); ECOFYS, International biodiesel markets:
Developments in production and trade (Berlin, 2011), (Exhibit EU-3 (numbered by the Secretariat) (submitted
as Exhibit EU-1 in response to Panel question No. 74, para. 29 and No. 75, para. 31)); and USDA, Indonesia
Biofuels Annual Report 2017 (20 June 2017), (Exhibit EU-4 (numbered by the Secretariat) (submitted as
Exhibit EU-2 in response to Panel question No. 74, para. 29 and No. 75, para. 32), p. 13))).
192 Indonesia did not provide comments on the European Union's response to Panel question No. 75, in
which the European Union contended that information in the public domain shows that the EU biodiesel
industry started in the 1990s.
193 Indonesia's response to Panel question No. 75, para. 49.
194 USDA, Indonesia Biofuels Annual Report 2017 (20 June 2017), (Exhibit EU-4 (numbered by the
Secretariat) (submitted as Exhibit EU-2 in response to Panel question No. 74, para. 29 and No. 75, para. 32)).

BCI deleted, as indicated [[***]]

EU industry had similar annual production in the 2004 -2005 period as compared to Indonesia's
annual production in 2012. In our view, this would suggest that it was not unreasonable for the
EU authorities to find that the two industries were at a similar stage of development. Based on this
observation, it seems plausible to rely on the profits obtained by the EU industry in the 2005-2006
period as a starting point for its determination of a profit amount for sampled Indonesian
producers.
7.93. The figures on annual production volumes also call into question Indonesia's argumen t that
the Indonesian industry had been in existence (five to six years at the time of the investigation)
much longer than the EU industry had been in the 2005 -2006 period (roughly two to three years) .
Even if we accept Indonesia's contention that the matu rity of an industry may be established
based on the number of years in existence, the similarity in production volumes contradict
Indonesia's position. On the contrary, the similarity in production volumes supports the position of
the European Union that t he pace of development may be very different in different countries.
Overall, we are not persuaded by Indonesia's argument that the EU authorities failed to take into
account important differences in the stage of development, as a basis to establish that t he EU
authorities did not apply a reasonable methodology.
7.94. The parties have also responded to a question from the Panel regarding the stages of
development of the Argentine and Indonesian industries during the investigation period. Indonesia
submits that the Indonesian biodiesel industry was at a more advanced stage than the Argentine
industry at the time of the investigation. 195 In support of this statement, as set out in the
complaint submitted in this investigation, Indonesia submits data on the installed c apacity for
biodiesel in Indonesia and Argentina in the 2008-2012 period.196 The European Union rejects that
the Indonesian and Argentine industries were at different stages of development at the time of the
investigation, referring to production volumes dur ing the 2006 -2012 period. 197 Based on our
review of this information , we are not convinced that the EU authorities acted unreasonably in
their determination of a profit amount for both sampled Argentine and Indonesian producers.
7.95. Indonesia further takes issue with the EU authorities' decision to confirm the reasonableness
of the 15% profit margin by reference to the short and medium term borrowing rates published by
the World Bank. First, Indonesia submits that the Indonesian producers submitted detailed
information, including company -specific information to demonstrate what would be a reasonable
profit margin and that the EU authorities should have taken this evidence into account. 198
Indonesia submits that such company -specific information provide s a more appro priate approach
to determining the profit amount in the Indonesian market than World Bank data, which reflects
data for the overall country, and not the biodiesel industry. 199 Second, Indonesia also argues that
the EU authorities failed to take into account that the World Bank short and medium term
borrowing rate was lower for Indonesia (i.e. 12%) than for Argentina (i.e. 14%). In Indonesia 's
view, while a 14% short and medium term rate might support the reasonableness of a 15%

195 Indonesia's response to Panel question No. 74, paras. 45-46.
196 Indonesia submits data on the installed capacity for Indonesia was 4.5 billion litres in
November 2010 and 4.8 billion litres in April 2012 while it can be seen that the installed capacity in Argentina
was 2.8 billion litres in 2010. Indonesia notes that the Indonesian biodiesel industry reached a capacity of
3 billion litres in 2008, pointing out that the Argentine industry reached that capacity three years later in 2011.
(Indonesia's response to Panel question No. 74, paras. 45 (referring to Annex 18 to the Consolidated version of
the new anti-dumping complaint concerning imports of biodiesel originating in Argentina and Indonesia,
(Exhibit IDN-34); and Complaint, (Exhibit IDN-3)), and 46 (referring to USDA, Indonesia Biofuels Annual
Report 2010 (20 December 2010); and Complaint, (Exhibit IDN-3)).
197 According to the European Union, the Argentine and Indonesian biodiesel industries both began
operating in small volumes in the 2006-2007 period. The European Union submits that reports in the public
domain estimate a level of production of 50,000 tonnes in Indonesia in 2006, and 30,000 tonnes in Argentina
in 2006, which increased to 500,000 tonnes and 230,000 tonnes in 2008, respectively. In 2012, the
European Union submits that annual production had levelled somewhat, reaching 2.2 million tonnes in
Indonesia and 2.8 million tonnes in Argentina. (European Union's response to Panel question No. 74, para. 29
(referring to ECOFYS, International biodiesel markets: Developments in production and trade (Berlin, 2011),
(Exhibit EU-3 (numbered by the Secretariat)); USDA, Indonesia Biofuels Annual Report 2017 (20 June 2017),
(Exhibit EU-4 (numbered by the Secretariat)), p. 13; and USDA, Argentina Biofuels Annual Report 2015
(1 July 2015), (Exhibit EU-5 (numbered by the Secretariat)), p. 14)).
198 Indonesia's first written submission, paras. 171-173.
199 Indonesia's second written submission, paras. 73-74.

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margin for Argentina, the same cannot be said for a 12% short and medium term rate, which is
significantly lower than the determined 15% profit margin.200
7.96. The European Union argues that the EU authorities' approach to confirm the reasonableness
of the 15% margin by comparing it to the World Bank short and medium term borrowing rate for
Indonesia was reasonable . The European Union contends that t he EU authorities found it was
reasonable to expect biodiesel producers to obtain a profit margin that exceeded that level.201 With
respect to data provided by certain Indonesian producers , including actual profit margins , the
European Union submits that the data was less reliable than World Bank data. 202 In this regard,
the European Union notes that the actual profits on domestic sales of biodiesel of all but one of the
four Indonesian sampled producers were in fact higher than 15%, reaching 30%.203
7.97. We first address the decision by the EU authorities to confirm the reasonableness of the
15% margin by comparing it to the short and medium term borrowing rate in Indonesia. We recall
that there is no particular methodology prescribed by Article 2.2.2(iii), subject to the requirement
that an investigating authority uses a "reasonable method". An investigating authority therefore
has discretion in the approach it takes. In this respect, the EU authorities selected the profit
amount obtained by the EU authorities in the 2005 -2006 period and confirmed the reasonableness
of this figure by testing it against certain benchmarks. In particular, t he selection and testing of
the 15% profit margin against the short and medium term borrowing rate in Argentina was found
in EU – Biodiesel (Argentina) to have resulted from a reasoned analysis that was rationally
directed at approximating the profit margin for sales by biodiesel producers, domestic sales by
Argentine producers in that case.204 We consider it would also be appropriate for the EU authorities
to follow the same approach in respect of Indonesian producers, so long as it can be considered to
have been reasonable. We note the European Union's explanation that the short and medium term
borrowing rate in Indonesia was not intended as a profit cap, in the sense of Article 2.2.2(iii). We
do not find this approach inherently unreasonable, despite the fact that the short and medium
term borrowing rate s in Indonesia and Argentina are not identical, in particular considering that
the rate was not intended to constitute a profit cap. We therefore disagree with Indonesia that the
lower short and medium term borrowing rate for Indonesia demonstrates that the method followed
by the EU authorities in respect of Indonesian producers was unreasonable.
7.98. We now turn to the data submitted by Indonesian producers during the investigation
regarding what would be a reasonable profit margin. In this connection, Indonesian producers
provided data that : a reasonable profit margin for the biodiesel in dustry would be between 2.4 %
and 3.2% on turnover 205; actual borrowing costs wer e around [[ ***]]206; the profit margin
established by the European Union would imply an unrealistically short payback period 207; and the
average interest rate for USD loans offered by priv ate banks in Indonesia for working capital and
investment loans (which was between 5 and 6.3%).208 We recall that the EU authorities considered
it reasonable to rely on the 15% profit margin based on what it considered to be plausible
similarities between th e stage of development of the EU and the Indonesian biodiesel industries
and to then test the reasonableness of that rate. In the exercise of its discretion, an investigating
authority may not consider it appropriate to rely on all data that is provided by interested parties.

200 Indonesia's first written submission, paras. 168; second written submission, paras. 77-78.
201 European Union's first written submission, para. 33.
202 European Union's response to Panel question No. 10, para. 12.
203 European Union's first written submission, para. 39; second written submission, para. 39; and
response to Panel question No. 12, para. 17 ("Even if it was not explicitly mentioned in the measure at issue,
the profit realized by three of the Indonesian producers was actually higher than 15%, while for the
fourth producer it was only slightly lower.")
204 Panel Report, EU – Biodiesel (Argentina), para. 7.349.
205 Wilmar Group, Comments on Definitive Disclosure (17 October 2013), (Exhibit IDN-16 (BCI)), p. 12.
206 Submission by the Wilmar Group filed on 25 July 2013, (Exhibit IDN-14 (BCI)), p. 2.
207 Indonesia's first written submission, para. 128 (referring to P.T. Musim Mas, Comments on Definitive
Disclosure, (Exhibit IDN-17 (BCI)), p. 2). Indonesian producer P.T. Musim Mas submitted that a 15%
profit margin for the producer company was excessive taking into account an investment cost for a
300,000 tonnes per year PME plant is about USD 30 million in Indonesia. Assuming an average price of PME at
USD 1140 per tonne during the investigation period, a 25% profit margin would result in a payback period of
slightly less than 5 months, which is too ambitious for any young and innovative industry. (P.T. Musim Mas,
Comments on Definitive Disclosure, (Exhibit IDN-17 (BCI)), p. 10).
208 P.T. Pelita Agung Agrindustri, Comments on Definitive Disclosure: Dumping Margin
(17 October 2013), (Exhibit IDN-10 (BCI)), p. 22.

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In this particular case, the EU authorities found the Indonesian biodiesel market was distorted and
thus, did not consider it appropriate to base the determination of normal value on actual values.
7.99. Finally, we note that Indonesia questions the determination of a 15% margin, considering
that the EU authorities had adjusted the target p rofit for the domestic industry downwards from
15% to 11% , after finding that the EU industry had mat ured since the 2005 -2006 period.
Indonesia notes that a similar adjustment was not m ade for the Indonesian industry despite the
fact that the Indonesian industry was more mature during the investigation period than the EU
industry was during the 2005 -2006 period.209 The panel in EU – Biodiesel (Argentina) addressed
this argument.210 The panel took the view that this was reasonable given the view that the EU
domestic industry had matured, justifying a reduction in its target profit in the absence of dumped
imports, while the Argentine industry was found to be "young and innovative".211 We have rejected
above Indonesia's argument that the Indonesian industry was at a different (more advanced)
stage of development than the EU industry was during the 2005 -2006 period. Absent convincing
evidence that the industry was at a different stage of development, we do not find the approach
taken by the EU authorities was unreasonable.
7.100. For the foregoing reasons , we therefore reject Indonesia's request that we find that the
European Union additionally acted inconsistently with Article 2.2.2(iii) because the European Union
failed to determine the amount for profit based on a "reasonable method" within the meaning of
Article 2.2.2(iii) of the Anti-Dumping Agreement.
7.4.5 Conclusions
7.101. As indicated above, we conclude that there is a mandatory requirement in Article 2.2.2(iii)
to calculate a profit cap, i.e. "the profit normally realized by other exporters or producers on sales
of products of the same general category in the domestic market of the country of ori gin". As the
EU authorities did not establish , or even attempt to establish such a cap in the investigation of
Indonesian producers, we find that Indonesia has demonstrated that the European Union acted
inconsistently with Article 2.2.2(iii) of the Anti -Dumping Agreement in failing to determine the
profit cap and ensure that the profit amount established by the EU authorities does not exceed
such a cap. We concluded that the European Union also acted inconsistently with Article 2.2 of the
Anti-Dumping Agreement as a result of failing to determine the profit cap. We reject, however,
Indonesia's request that we find that the European Union additionally acted inconsistently with
Article 2.2.2(iii) because the European Union failed to determine the amount f or profit based on a
"reasonable method" within the meaning of Article 2.2.2(iii) of the Anti-Dumping Agreement.
7.5 Whether the European Union constructed the export price inconsistently with
Articles 2.3 and 2.4 of the Anti-Dumping Agreement
7.5.1 Introduction
7.102. Indonesia claims that the European Union acted inconsistently with Article 2.3 and the
fourth and fifth sentences of Article 2.4 of the Anti-Dumping Agreement by failing to construct the
export price of one Indonesian exporting producer, P.T. Musim Mas, on the basis of the price at
which the imported biodiesel produced by P.T. Musim Mas was first resold to independent buyers
in the European Union. In particular, Indonesia asserts that the EU investigating authorities
improperly failed to include in th at first independent resale pric e the additional amount – or
premium – that was paid by clients to the related importer to P.T. Musim Mas, [[ ***]]. The
European Union argues that the premium does not form part of the price at which the imported
biodiesel was first resold to an independent buyer.

209 Indonesia's second written submission, para. 72; response to Panel question No. 75, paras. 47-48.
210 In EU – Biodiesel (Argentina), Argentina argued that the 11% profit figure used by the investigating
authority in the present investigation to calculate the injury elimination level would have been appropriate
because it reflects similar levels of development between the Argentine and EU industries. (Panel Report, EU –
Biodiesel (Argentina), para. 7.320).
211 Panel Report, EU – Biodiesel (Argentina), para. 7.350.

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7.5.2 The EU authorities' construction of the export price for P.T. Musim Mas
7.103. We begin by recalling the relevant facts related to the European Union's determination of
an export price for P.T. Musim Mas. Under the mandatory biodie sel blending regulatory framework
of certain EU member states, palm fatty acid distillate ( PFAD)-based biodiesel is eligible to be
"double counted" for the purpose of compliance with EU mandatory biodiesel blending targets. This
means that the contribution made by PFAD biodiesel is recognized to be twice that made by other
types of biodiesel or biofuels. Because of this, producers are only required to use half as much
PFAD biodiesel when blending with mineral diesel to comply with EU mandatory biodiesel ble nding
targets. Customers are willing to pay more for PFAD biodiesels as a result, and hence, a producer
is able to charge a premium to the client. 212 As relevant to Indonesia's claim in this dispute,
biodiesel may only be "double counted" in Italy subject to the issuance of a certificate by the
Italian government confirming that the biodiesel is eligible for double counting.213
7.104. In the investigation into biodiesel imports from Indonesia, the EU authorities concluded
that there was a "national practice" 214 that clients purchasing PFAD biodiesel eligible for double
counting would only pay the additional amount or premium for such biodiesel upon issuance of the
certificate by the Italian government confirming the eligibility of the biodiesel for double counting.
Upon receipt of such a certificate, the related importer would send a separate invoice to the client
for payment of the outstanding premium to the related importer.215 Evidence on the Panel's record
confirms this practice. 216 Indonesia has also argued in this proce eding that, once customers
became familiar with the operation of the double counting scheme, the invoice contained a single
price that reflected the fact that PFAD biodiesel was eligible for double counting.217
7.105. In the Provisional Regulation, the EU authorit ies determined that the additional amount or
premium that was paid by the client to P.T. Musim Mas' related importer [[ ***]] did not form part
of the price for resale to the first independent customer.218 The EU authorities considered that:
Such premiums are not linked to the product concerned as such, but rather to the
provision of documents by the related importer in order to obtain a government
certificate which enables the related importer's client to fulfil the necessary conditions
to blend only half the biodiesel quantity (given that this biodiesel can be counted
'double').219
7.106. In its comments on the Provisional Disclosure, P.T. Musim Mas objected to the exclusion of
the double counting premium from the first independent resale price .220 In the Definitive
Regulation, the EU authorities maintained their decision that the premium paid for PFAD biodiesel
did not form part of the export price, explaining that, even if it considered the premium as part of
the export price, the premium would in any event have to be deducted again "in order to compare
the export price with the same normal value with due account taken for differences that affect
price comparability".221

212 Provisional Regulation, (Exhibit IDN-1), fn 1.
213 Provisional Regulation, (Exhibit IDN-1), fn 1.
214 Provisional Regulation, (Exhibit IDN-1), fn 1.
215 Provisional Regulation, (Exhibit IDN-1), recital 69.
216 Supplementary Agreement between [[***]] and [[***]] on the sale of biodiesel (30 March 2012),
(Exhibit IDN-32 (English translation) (BCI)).
217 Indonesia's second written submission, para. 103 (referring to Contract between [[***]] and [[***]]
on the sale of Biodiesel (7 March 2014), (Exhibit IDN-33 (English translation) (BCI))). See also Indonesia's
response to Panel question No. 77, para. 53 (referring to Contracts between [[***]] and [[***]] on the sale of
Biodiesel (24 October 2014), and between [[***]] and [[***]] on the sale of Biodiesel (6 March 2014),
(Exhibit IDN-35 (English translation) (BCI)).
218 Provisional Regulation, (Exhibit IDN-1), recital 69.
219 Provisional Regulation, (Exhibit IDN-1), recital 69.
220 P.T. Musim Mas, Comments on Provisional Disclosure (1 July 2013), (Exhibit IDN-18 (BCI)), p. 4.
221 Definitive Regulation, (Exhibit IDN-2), recital 100. Article 2(10)(k) of the EU Basic Regulation
implements aspects of Article 2.4 of the Anti-Dumping Agreement that address differences which affect price
comparability. Under Article 2.4, an investigator is permitted to make due allowance for differences which
affect price comparability, including differences in conditions and terms of sale, taxation, levels of trade,
quantities, physical characteristics, and any other differences which are also demonstrated to affect price
comparability.

BCI deleted, as indicated [[***]]

7.5.3 Whether the European Union properly excluded the double counting premium
from the price at which th e imported biodiesel was first resold to independent buyers in
the European Union
7.107. Indonesia's challenge with respect to the construct ion of the export price of P.T . Musim
Mas raises a single issue: whether the additional premium paid to P.T. Musim Mas' rel ated
importer [IMBI] for PFAD biodiesel , forms part of the price at which the imported biodiesel was
first resold to an independent buyer for purposes of Article 2.3 of the Anti-Dumping Agreement.
7.108. Article 2.3 of the Anti-Dumping Agreement provides:
In case s where there is no export price or where it appears to the authorities
concerned that the export price is unreliable because of association or a compensatory
arrangement between the exporter and the importer or a third party, the export price
may be constructed on the basis of the price at which the imported products are first
resold to an independent buyer, or if the products are not resold to an independent
buyer, or not resold in the condition as imported, on such reasonable basis as the
authorities may determine.
7.109. Indonesia submits that the language in Article 2.3 makes clear that the price charged to
the first independent buyer is the starting point for the construction of an export price. 222 In
Indonesia's view, the term "price" in Article 2.3 refers to the sum of money for which an article or
item is sold. Indonesia submits that Article 2.3 does not contain any requirements or qualifications
to the general rule that the price at which the imported products are first resold to an independent
buyer should be used as the starting point for the construction of export price. For instance,
Indonesia notes that Article 2.3 does not specify that the price at which a product is first resold to
an independent buyer must be included in one invoice and be payable in one instance or free from
any contingent conditions.223
7.110. Indonesia emphasizes that Italian customers contractually agreed to pay the premium and
were willing to pay a higher price for the biodiesel sold because it was eligible for double counting .
In Indonesia's view, this demonstrates that the premium is intrinsically linked to the product being
sold, contrary to the determination made by the investigating authority .224 Indonesia submits that
this link is confirmed in contractual agreements between P.T. Musim Mas' related importer [[***]]
and its customers.225
7.111. The European Union does not dispute that the export price should be constructed on the
basis of the price at which the imported product is first resold to an independent buyer. 226
However, t he European Union is of the view that the premium has no link to the product
concerned and is therefore not part of the price charged to the first independent buyer. The

222 Indonesia's first written submission, para. 206 (referring to Panel Report, US – Stainless Steel
(Korea), para. 6.91).
223 Indonesia's first written submission, para. 207. Indonesia submits that the mere fact that the
payment of part of the price is contingent on the presentation of certain documents does not mean that the
price should be decreased by the amount of the premium for purposes of Article 2.3 of the Anti-Dumping
Agreement. Rather, in Indonesia's view, the contingency is simply a modality of the payment. (Indonesia's
first written submission, para. 213).
224 Indonesia's first written submission, paras. 210-211 and 213.
225 Indonesia's second written submission, para. 102 (referring, for example, to Supplementary
Agreement between [[***]] and [[***]] on the sale of biodiesel (30 March 2012), (Exhibit IDN-32 (English
translation) (BCI))).
226 European Union's response to Panel question No. 26, para. 45 ("The question here is what is the
'price at which the imported products are first resold' within the meaning of Article 2.3.") See also response to
Panel question No. 32, para. 51 ("The relevant legal standard for the purposes of this claim is in Article 2.3:
'the price at which the imported products are first resold'.") In the Specific Provisional Disclosure provided to
[[***]], the EU authorities explained that "[t]he double counting allowance was not considered part of the
export price." (Specific Provisional Disclosure for [[***]], annex 2 A, (Exhibit IDN-19 (BCI)), p. 4 (emphasis
added)). Indonesia maintains that the use of the term "allowance" by the EU authorities does not mean that
that the EU authorities treated the premium as an "allowance" within the meaning of Article 2.4 of the Anti-
Dumping Agreement. According to Indonesia, the premium was reported in the initial sales MS Excel table of
[[***]] as an "allowance", and was subsequently reported by the EU authorities as an "allowance" due to the
formatting of the European Commissions' MS Excel data table. (Indonesia's first written submission, fn 138).
The European Union has not contested this point.

BCI deleted, as indicated [[***]]

European Union argues that Article 2.3 concerns the price that pertains to what is imp orted and
what is resold, which is the product. The premium is not imported or resold. 227 According to the
European Union, t he fact that Italian customers contractually agreed and were willing to pay the
premium, or the fact that the premium was anticipated revenue to P.T. Musim Mas does not
establish that the premium is part of the price.228
7.112. Article 2.3 of the Anti -Dumping Agreement authorizes a Member to construct the export
price where, inter alia, the actual export price is unreliable because of associatio n between the
exporter and importer.229 The plain language of Article 2.3 makes clear that "the price charged to
the first independent buyer is a starting -point for the construction of an export price". 230
Article 2.3 does not itself contain any guidance regarding the methodology to be employed in order
to construct the export price. The only rules governing the methodology for construction of an
export price are set forth in Article 2.4 , which provides that "[i]n the cases referred to in
paragraph 3, allowances for costs, including duties and taxes, incurred between importation and
resale, and for profits accruing, should also be made".231 The panel in US – Stainless Steel (Korea)
found that this sentence authorizes the only allowances that can be made.232 After determining the
price charged to the first independent buyer, an investigating authority would then work
"backwards from the price at which the imported products are first resold to an independent
buyer".233
7.113. There is no dispute that customers purchasi ng the biodiesel from P.T. Musim Mas' related
importer [[***]] are the first independent buyers. The sole issue is whether the premium that the
customer pays to P.T. Musim Mas' related importer [[ ***]] is properly considered as part of the
price that is charged to first independent buyers.
7.114. There is no prior guidance on the interpretation of the term "price" as it appears in the
phrase "the price at which the imported products are first resold to an independent buyer" in
Article 2.3 of the Anti-Dumping Agreement. The Shorter Oxford English Dictionary defines the term
"price" as "the sum in money or goods for which a thing is or may be bought or sold, or a thing or
person ransomed or redeemed". 234 This would suggest that the phrase "the price at which the
imported products are first resold to an independent buyer" refers to the sum in money for which
the imported product was bought or sold. There is no further guidance regarding the term "price".
In our view, as discussed in US – Stainless Steel (Korea), the language "first resold" relates to the
price being the starting point for the construction of the export price, from which an investigating
authority would work "backwards" to construct an export price that would have been paid by the
related importer had the sale been made on a commercial basis.235 Accordingly, in constructing the
export price, we consider that a Member must begin by determining the sum in money for which
the imported product was bought by or sold to an independent buyer . A member may thereafter
make any adjustments for allowances to the extent permitted under the fourth sentence of
Article 2.4 of the Anti-Dumping Agreement. However, this does not change the fact that a Member
must begin with the price charged to the first independent buyer.
7.115. We do not agree with the decision by the EU authorities that the premium is not part of the
sum in money for which the exported product was bought by the first independent buyer. Both
parties accept – as the EU authorities recognized – that customers are willing to pay a higher price

227 European Union's response to Panel question No. 26, para. 45.
228 European Union's first written submission, para. 63. The European Union argues that a statement in
a contract between two private enterprises cannot be determinative of the legal interpretation of what "price"
means under the Anti-Dumping Agreement. (European Union's first written submission, para. 64).
229 Panel Report, US – Stainless Steel (Korea), para. 6.90.
230 Panel Report, US – Stainless Steel (Korea), para. 6.91.
231 Panel Report, US – Stainless Steel (Korea), para. 6.91.
232 Panel Report, US – Stainless Steel (Korea), para. 6.94.
233 Panel Report, US – Stainless Steel (Korea), para. 6.99.
234 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 2, p. 2342.
235 The panel in US – Stainless Steel (Korea) noted that the purpose of "working backwards" from the
price at which products are first resold to an independent buyer is to remove the unreliability arising from
association or a compensatory arrangement between the exporter and the importer or third party. The panel
was referring to allowances to construct an export price contained in the fourth sentence of Article 2.4. (Panel
Report, US – Stainless Steel (Korea), para. 6.99).

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for the PFAD biodiesel eligible for double counting .236 This is because of its particular physical
properties which make it eligible for double counting. The parties additionally agree that the
premium amount is determined by market factors and equals the increased amount that
customers are willing to pay for double counting -eligible biodiesel.237 Customers are willing to pay
a premium precisely because they are permitted to use half as much PFAD -based biodiesel when
blending with mineral diesel. If the product did not qualify for the certificate and was ineligible for
double counting because of its physical characteristics, the additional premium would not be paid.
7.116. The European Union argues that there is a price for the product and a separate price for
the premium, and additionally emphasizes that it is the product which is imported and resold while
the premium is neither imported nor resold. 238 First, the very notion that there is a price for the
product and a price for the premium is misconceived. The premium represents an additional
amount that the customer is willing to pay for the specific type and quantity of PFAD -based
biodiesel that is eligible for double counting. The customer attributes the additional value to the
fact that the biodiesel is eligible for double counting because of its particular physical properties. In
the abstract, the premium is not anything additional that is being purchased. The refore, it makes
no sense to refer to the premium as having its own price. The fact that the premium is not
imported also does not have any bearing on whether it may be considered part of the price at
which the product is first resold. Similarly, the premi um cannot be resold as it is simply a
component of the price that is paid for the product.
7.117. The European Union has described the premium as a "distinct element" that is provided for
separately in the contract and is paid in a different invoice. 239 The European Union has also argued
that the premium has no link to the product concerned but rather, is linked to the provision of
documents.240 A 2011 sales contract submitted by Indonesia as evidence in this proceeding
confirms that the premium was , initially at leas t, paid in a separate invoice upon receipt of a
certificate confirming the eligibility of the PFAD biodiesel for double counting. 241 In addition, the
provided contract indicates that P.T. Musim Mas' related importer [[ ***]] provided documentation
to the buye r to request the certificate .242 We do not in any event consider it relevant that the
amount of the premium may be paid separately in a different invoice or that documentation was
provided that would enable the buyer to confirm the eligibility of the particu lar imported biodiesel
for double counting. As we explained above, there is no guidance in Article 2.3 that requires that
the price is paid in a single transaction or is reflected in a single invoice.243 We also do not see how
documentation confirming the physical properties or authenticity of a product means that the
premium is not paid in exchange for the imported product.
7.118. We note the possibility exists that the certificate may not be granted if the biodiesel is
found to be ineligible for double counting. As a factual matter, there is no evidence that this has
occurred. In any event, the possibility that the certificate may not be granted has no bearing on
our conclusion that, in cases where the premium is paid for PFAD biodiesel, the premium should be
considered as part of the price at which the product is first resold. We do not see any incoherence
in the view that the premium forms part of the price at which the product is first resold in any case
the premium is paid, but does not form part of the price if it is not actually paid.

236 Definitive Regulation, (Exhibit IDN-2), recital 176 ("In fact data shows that double counting biodiesel
has a small price premium over virgin biodiesel, the price of which is linked to mineral diesel.")
237 Indonesia's response to Panel question No. 25, para. 41; European Union's response to Panel
question No. 25, para. 44; and Provisional Regulation, (Exhibit IDN-1), recital 69.
238 European Union's response to Panel question No. 26, para. 45.
239 European Union's second written submission, para. 45.
240 European Union's first written submission, para. 65.
241 Supplementary Agreement between [[***]] and [[***]] on the sale of biodiesel (30 March 2012),
(Exhibit IDN-32 (English translation) (BCI)), recitals 1-4.
242 Supplementary Agreement between [[***]] and [[***]] on the sale of biodiesel (30 March 2012),
(Exhibit IDN-32 (English translation) (BCI)), recitals 1-4.
243 We note that Indonesia has also submitted several 2014 sales contracts as evidence, indicating that
certain customers were willing to make payment for PFAD biodiesel and the premium in a single invoice. In our
view, this supports Indonesia's contention that customers had become familiar with the operation of the double
counting scheme and the eligibility of PFAD biodiesel to qualify for the certificate, and thus were willing to pay
the full amount for the double counting-eligible biodiesel and the premium in the same invoice. (Contract
between [[***]] and [[***]] on the sale of Biodiesel (7 March 2014), (Exhibit IDN-33 (English translation)
(BCI)); Contracts between [[***]] and [[***]] on the sale of Biodiesel (24 October 2014), and between
[[***]] and [[***]] on the sale of Biodiesel (6 March 2014), (Exhibit IDN-35 (English translation) (BCI)); see
also Indonesia's second written submission, para. 103).

BCI deleted, as indicated [[***]]

7.119. For the foregoing reasons , we therefore find that Indonesia has made a prima facie case
that the European Union acted inconsistently with Article 2.3 of the Anti -Dumping Agreement by
failing to include the double counting premi um as part of the price at which imported biodiesel
produced by P.T. Musim Mas was first resold to an independent buyer within the meaning of that
provision. In light of this finding, we are not required to address additional arguments of Indonesia
or the European Union regarding the relevance of the rules contained in the third and
fourth sentences of Article 2.4 of the Anti -Dumping Agreement or rules regarding differences
affecting price comparability contained elsewhere in Article 2.4.244
7.5.4 Conclusions
7.120. As indicated above, we consider that the price charged to the first independent buyer is
the starting-point for the construction of an export price under Article 2.3 of the Anti -Dumping
Agreement. In constructing the export price, we consider that a Member must begin by
determining the sum in money for which the imported product was bought by or sold to an
independent buyer. There is no further guidance to the term price in Article 2.3 relating to the
price of products first resold to an independent buyer. On this basis, we consider that the premium
that the customer pays to P.T. Musim Mas' related importer [[ ***]] is properly considered as part
of the price that is charged to first independent buyers. Therefore, we find that Indonesia has
established that the European Union acted inconsistently with Article 2.3 of the Anti -Dumping
Agreement by failing to include the double counting premium as part of the price at which
imported biodiesel produced by P.T. Musim Mas was first resold to an independent buyer within the
meaning of that provision.
7.6 Whether the European Union's consideration of price effects was consistent with
Articles 3.1 and 3.2 of the Anti-Dumping Agreement
7.6.1 Introduction
7.121. Indonesia claims that the EU authorities' consideration of the price effects of dumped
imports is inconsistent with Articles 3.1 and 3.2 of the Anti -Dumping Agreement. Indonesia raises
two main claims245:
a. the EU authorities failed to ensure price comparability between imported and domestic
biodiesel, by relying on low volume sales o f cold filter plugging point ( CFPP) 13 degrees
centigrade biodiesel produced by the EU industry in calculating an adjustment to the
price of Indonesian imports; and
b. the EU authorities failed to establish the existence of significant price undercutting by
failing: (i) to take into account noticeable differences between imported and domestic
biodiesel; and (ii) to examine the significance of price undercutting with regard to the
majority of the EU industry's sales.
7.6.2 The EU authorities' consideration of the ef fect of dumped imports on the price of
biodiesel sold in the domestic market
7.122. We begin by setting out the relevant facts concerning the EU authorities' price
undercutting analysis. The EU authorities indicated that they would examine th e effects of the
imports from Argentina and Indonesia cumulatively for purposes of the injury analysis. 246 Despite
the cumulative assessment, the price undercutting calculations were made separately for

244 The European Union has argued, for instance, that the premium paid for double counting biodiesel
only results because of intervention by the Italian government. The European Union argues that state
intervention of this type that creates special or exclusive rights and is specifically designed to encourage one
type of activity is functionally equivalent to a decision to impose a tax, or "is in the nature of a negative tax".
The European Union argues that the purpose of the first three sentences of Article 2.4 of the Anti-Dumping
Agreement is to address state interventions like the double counting regime, and hence, the premium would in
any event need to be deducted under these parts of Article 2.4. The European Union additionally emphasizes
that there is no double counting premium scheme present in Indonesia. (European Union's first written
submission, paras. 67-69 and 72; response to Panel question No. 36, para. 53; and second written submission,
paras. 44, 46-48, and 51).
246 Provisional Regulation, (Exhibit IDN-1), recital 90.

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Argentina and Indonesia, due to the product differences between biodiese l produced by these
countries. The comparison between imported and domestic biodiesel was made based on the CFPP,
which is the temperature at which the biodiesel turns back into fat and cannot be used as fuel. 247
The biodiesel produced in Indonesia and sold to the EU market was mostly "palm methyl ester"
(PME) with a CFPP level of 13 degrees centigrade (hereinafter "CFPP 13 biodiesel" or "PME"). T he
biodiesel from Argentina was exclusively "soybean methyl ester" (SME) with a CFPP level of zero
degrees centigrade.248 While SME and PME can be used in certain environments in their pure form,
they are nearly always blended with "rapeseed methyl ester" (RME), which has a lower CFPP,
before being used in the European Union.249
7.123. The EU industry produced biodiesel composed from different feedstocks, mainly from
rapeseed (RME), but also from other feedstocks, including palm oil, waste , and virgin oils.250 The
EU industry blended several feedstocks together to produce the final biodiesel that was sold to
customers.251 The EU industry sold blended biodiesel at various CFPP levels, but mainly at a CFPP
level of zero degrees centigrade (CFPP 0) and below. 252 In the price undercutting calculations, the
EU authorities compared the price of PME from Indonesia and SME from Argentina to the price of
blended CFPP 0 biodiesel sold by the EU industry (hereinafter "blended CFPP 0 biodiesel"). CFPP 0
biodiesel is a blend of different biodiesels. The EU industry used both its own production of
biodiesel and imported biodiesel when producing blende d CFPP 0 biodiesel. The EU authorities
excluded blended CFPP 0 biodiesel made using imported biodiesel from their price undercutting
calculations.253
7.124. Since Argentina exported SME with CFPP 0 to the EU market, the EU authorities compared
prices of Argentine SME directly to the domestic sales of blended CFPP 0 biodiesel.254 Indonesia
mainly exported CFPP 13 biodiesel to the European Union. 255 Given that the volume of sales of
domestically-produced CFPP 13 biodiesel was very low, the EU authorities considered that a direct
comparison between imported and domestic CFPP 13 biodiesel was not "reasonable". 256 The
EU authorities therefore compared Indonesian imports with blended CFPP 0 biodiesel produced by
the EU industry. In order to compare CFPP 13 biodiesel from Indonesia to blended CFPP 0 biodiesel
from the European Union, the EU authorities made an adjustment to account for the different CFPP
levels between the compared products. The EU authorities calculated this adjustment by taking the
price difference between the EU industry's sales of blended CFPP 0 biodiesel and the EU industry's
sales of CFPP 13 biodiesel, and then adding that amount to the price of Indonesian biodiesel. 257 As
a result, the price of Indonesian PME was adjusted upwards by 17.35%, to construct what the

247 Provisional Regulation, (Exhibit IDN-1), recital 94.
248 Provisional Regulation, (Exhibit IDN-1), recital 30.
249 The EU authorities also indicated that SME is blended with PME, because SME in its pure form does
not meet the European standard EN 14214 as regards iodine and cetane numbers. (Provisional Regulation,
(Exhibit IDN-1), recital 32).
250 Provisional Regulation, (Exhibit IDN-1), recital 30; Definitive Regulation, (Exhibit IDN-2), recitals 18
and 117.
251 Definitive Regulation, (Exhibit IDN-2), recital 123. This recital reads:
Unlike the exporting producers in Argentina and Indonesi a, the Union industry does not sell
biodiesel made from one feedstock, but blends several feedstocks together to produce the final
biodiesel that is sold.
252 European Union's second written submission, para. 57.
253 Definitive Regulation, (Exhibit IDN-2), recitals 121 and 128; European Union's first written
submission, para. 92.
254 In EU – Biodiesel (Argentina), Argentina did not submit any claims with regard to the EU
authorities' consideration of price undercutting. Argentina challenged other aspects of the injury determination,
in particular the evaluation of certain injury factors under Article 3.4 (production capacity and capacity
utilization) and the examination of the other factors causing injury to the domestic industry under Article 3.5
(overcapacity, EU industry' imports of product concerned, double counting regimes in some EU Member States,
lack of vertical integration, and access to raw materials). (Panel Report, EU – Biodiesel (Argentina),
paras. 7.368-7.529; Appellate Body Report, EU – Biodiesel (Argentina), paras. 6.114-6.148).
255 Indonesia clarifies that around 19% of PME imports from Indonesia had CFPP levels other than
CFPP 13, ranging between CFPP 7 and CFPP 17. (Indonesia's second written submission, para. 131).
256 Provisional Regulation, (Exhibit IDN-1), recital 96.
257 Provisional Regulation, (Exhibit IDN-1), recital 96; Definitive Regulation, (Exhibit IDN-2), recital 124.

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price of imports of CFPP 0 biodiesel from Indonesia would have been. 258 The price was then
compared to the price of blended CFPP 0 biodiesel sold by the EU industry.
7.125. In the Provisional Regulation, the EU authorities explained this methodology as follows:
All sales from Argentina to the EU were at a CFPP of 0 degrees centigrade. These sales
were therefore compared to the sales of Union producers of biodiesel at a CFPP of 0.
All sales from Indonesia to the EU were at a CFPP of 13 degrees centigrade. Given the
very small volume of sales of Union producers at this CFPP – since PME from
Indonesia is almost always blended with other biodiesel from other sources before
being sold to the first independent customer – a direct comparison was not considered
reasonable. The export price of the PME from Indonesia at CFPP 13 was therefore
adjusted upwards to a price at CFPP 0 by taking the difference in price on the Union
market between the sales of PME at CFPP 13 manufactured by the Union industry and
the average price of biodiesel at CFPP 0.259
7.126. Based on the above methodology, the EU authorities considered that there was significant
price undercutting caused by the dumped imports of biodiesel from Argentina and Indonesia as
compared with the price of EU biodiesel. The average undercutting margin for Indonesia was 4%
during the investigation period. 260 The EU authorities confirmed their findings in the Definitive
Regulation.261
7.6.3 Whether the adjustment made by the EU authorities to the price of imports of
Indonesian biodiesel was flawed
7.127. Indonesia first claims that the European Union acted incon sistently with Articles 3.1
and 3.2 of the Anti-Dumping Agreement by failing to ensure price comparability between imported
and domestic biodiesel in terms of differences in quantities. Indonesia contends that the
EU authorities failed to account for the low volume of sales of CFPP 13 biodiesel produced by the
EU industry in calculating an adjustment to the price of Indonesian imports.
7.128. Article 3.1 of the Anti -Dumping Agreement sets out the basic principles that a
determination of injury shall be based on positive evidence and involve an objective examination.
It reads as follows:
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.
7.129. The second sentence of Article 3.2 provides more specific guidance regarding the objective
examination of the effect of dumped imports on prices in the domestic market. It provides:
With regard to the effect of the dumped 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.
7.130. Indonesia argues that the adjustment to the price of CFPP 13 biodiesel imports d id not
resolve the issue of the lack of comparability in terms of volume differences, and is therefore

258 Indonesia's first written submission, para. 226(b) (referring to Specific Provisional Disclosure for the
Wilmar Group, annex 8, (Exhibit IDN-20), p. 1); European Union's response to Indonesia's question No. 2,
paras. 2-3.
259 Provisional Regulation, (Exhibit IDN-1), recitals 95-96.
260 Provisional Regulation, (Exhibit IDN-1), recitals 97 and 126.
261 Definitive Regulation, (Exhibit IDN-2), recitals 121-129 and 147.

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inconsistent with Articles 3.1 and 3.2 of the Anti -Dumping Agreement. Indonesia refers to the
EU authorities' conclusion that a direct comparison between Indonesian imports and EU sales of
CFPP 13 "was not considered reasonable" given the "very small volume of sales" of EU -produced
CFPP 13 biodiesel. 262 According to Indonesia, based on this statement, the EU authorities found
that the EU industry's price of CFPP 13 biodiesel was "not comparable" 263 to Indonesian CFPP 13
biodiesel due to significant differences in volumes and therefore that the price was "unreliable" 264
for the purpose of price effects analysis. 265 Indonesia argues that, if the sales price of the
EU producers' CFPP 13 biodiesel is non -comparable for a direct comparison, then EU sales of
CFPP 13 are also non -comparable for calculating the price adjustment (to address different CFPP
levels).266 Indonesia underlines that the volume difference between CFPP 13 biodiesel
(6,300 tonnes) and blended CFPP 0 biodiesel ( 993,860 tonnes) produced by the EU industry that
was used for calculating the adjustment is nearly the same as the volume difference between
Indonesian CFPP 13 biodiesel (995,663 tonnes) and EU-produced CFPP 13 biodiesel (6,300 tonnes)
that was rejected for the purpose of a direct comparison.267 Accordingly, Indonesia argues that the
EU authorities failed to properly consider differences in quantities when making the price
adjustment to account for ph ysical differences between CFPP 13 biodiesel and blended CFPP 0
biodiesel. The result was a distorted calculation of the price adjustment, which undermined the
accuracy of the price undercutting margin that was calculated.268
7.131. The European Union denies that the EU authorities found the price of EU industry's sales of
CFPP 13 biodiesel was "unreliable" in the way Indonesia argues. Rather, a direct comparison
between Indonesian and EU biodiesel at CFPP 13 was not considered "reasonable" 269 or
"representative"270 due to a very small volume of EU industry's sales at this CFPP "from the total of
all biodiesel made and sold by the EU industry". 271 The European Union notes that the EU industry
did not sell biodiesel made from one feedstock, but blended several feedstocks together to produce
the final biodiesel that was sold to customers. 272 The EU authorities therefore compared the price
of CFPP 13 biodiesel from Indonesia to the price of blended CFP P 0 biodiesel from the
European Union, which had the highest share of domestic sales.273 In particular, the sales of
blended CFPP 0 biodiesel amounted to 993,860 tonnes, which represented 37% of the sales of the
EU sampled producers, while other sales were mainly at lower CFPP levels. 274 The European Union
submits that in order to ensure price comparability at CFPP 0, the export price of CFPP 13 biodiesel
from Indonesia was adjusted upwards to a price at CFPP 0 biodiesel.275 The European Union argues
that this adjustment was calculated on the basis of transactions of similar volumes.276
7.132. Article 3.1 or 3.2 of the Anti -Dumping Agreement do not provide any specific guidance as
to how an investigating authority should make adjustments for price comparability in the context
of injury determination. This stands in contrast to Article 2.4 of the Anti-Dumping Agreement that
provides specific guidance in respect of allowances to be made to ensure price comparability
between the export price and the normal value in the context of dumping determination. For
purposes of Article 3.2, previous panels have noted that price comparability can be ensured, for
instance, by carefully defining product categories for the collection of price information or by
making adjustments to prices as warranted by the factual c ircumstances of the case.277 In light of
our standard of review, the question before us is whether the EU authorities' calculation of the

262 Indonesia's first written submission, para. 245.
263 Indonesia's first written submission, paras. 246 and 248-249; second written submission,
paras. 115, 118-120, and 125-126.
264 Indonesia's first written submission, paras. 246 and 248-249.
265 Indonesia's first written submission, para. 246.
266 Indonesia's first written submission, paras. 248-249.
267 Indonesia's second written submission, paras. 115-116 and 118; opening statement at the
second meeting of the Panel, para. 60.
268 Indonesia's first written submission, paras. 250 and 254; second written submission, para. 122.
269 Provisional Regulation, (Exhibit IDN-1), recital 96.
270 European Union's first written submission, para. 86.
271 European Union's response to Panel question No. 88, para. 41.
272 European Union's first written submission, para. 82; response to Panel question No. 95, para. 54
(referring to Definitive Regulation, (Exhibit IDN-2), recital 123).
273 European Union's second written submission, para. 57; response to Panel question No. 88, para. 41.
274 European Union's second written submission, paras. 56-57.
275 European Union's first written submission, para. 94.
276 European Union's first written submission, para. 95 (referring to Definitive Regulation,
(Exhibit IDN-2), recital 124).
277 Panel Reports, EC – Fasteners (China), para. 7.328; China – X-Ray Equipment, para. 7.51.

BCI deleted, as indicated [[***]]

adjustment to account for different CFPP levels of Indonesian and EU biodiesel, in the context of its
overall price undercutting analysis, was reasonable and objective.
7.133. As noted above, the EU authorities considered that a direct comparison between CFPP 13
biodiesel from Indonesia and CFPP 13 biodiesel made by the EU industry could not be made
because of "very small volumes of sales" by the EU industry at this CFPP level. The European
Union explained that CFPP 13 biodiesel constituted a small share of all biodie sel sold and produced
by the EU industry.278 The EU sampled producers sold 6,300 tonnes of CFPP 13 biodiesel during
the investigation period, which constituted 0.23% of total sales of the EU sampled producers
during the investigation period.279 The low volumes of CFPP 13 sales thus represented a miniscule
proportion of EU industry sales, which would not provide a robust ba sis for the price effects
analysis. This would mean that the price comparison and the analysis of the effect of the imports
would not have taken into account the vast majority (99.77%) of EU industry's sales. Such a
comparison to such a small share of the EU industry's sales would not provide a reasonable picture
of the effect of the dumped imports on the prices of the domestic like product to establish the
existence of significant price undercutting, as required by Article 3.2. 280 It would not seem
unreasonable that the EU authorities instead decided to compare the price of Indonesian imports
to the EU industry's price of blended CFPP 0 biodiesel, which represented 37% of EU industry's
sales ( 993,860 tonnes ) during the investigation period. The European Union has specified that
sales of blended CFPP 0 biodiesel represented the largest share of any of the types of biodiesel
sold in the European Union by volume.281
7.134. We disagree with Indonesia that the EU authorities' decision not to make a direct
comparison betwee n imported and domestic CFPP 13 biodiesel rendered the price of CFPP 13
biodiesel produced by the EU industry to be "unreliable" or "non -comparable".282 As we explain
above, sales of 6,300 tonnes of CFPP 13 biodiesel produced by the EU industry during the
investigation period constituted 0.23% of total sales of the EU sampled producers during the
investigation period. The European Union has explained that it was not considered reasonable to
base the price comparison on such a low percentage of sales by the EU industry, i.e. a low overall
proportion of the EU industry's sales. We see no evidence on the record that the EU authorities
considered that the price of CFPP 13 biodiesel was in any way unusable due to a large difference in
volumes. Even though the EU authorities did not use the price of CFPP 13 biodiesel for the purpose
of a direct comparison with Indonesian imports, this data was part of the record before the EU
authorities. We do not find it unreasonable that the EU authorities relied on this data for a different
purpose, i.e. to establish an adjustment factor to the price of CFPP 13 biodiesel from Indonesia in
order to bring it to a CFPP level of 0.
7.135. We note that the EU authorities looked into the difference in quantities between sales of
CFPP 13 biodiesel and blended CFPP 0 biodiesel made by the EU industry in the context of making
the price adjustment. In particular, the EU authorities examined the quantities per transactions of
sales of CFPP 0 biodiesel manufactured and blended in the European Union as compared to sales
transactions of CFPP 13 biodiesel. In recital 124 of the Definitive Regulation, the EU authorities
explained as follows:
For imports from Indonesia, which are at a CFPP of 13 or above, an adjustment was
made, being the difference in price between the Union industry's sales of CFPP 13 and
the Union industry's sales of CFPP 0, in order to compare the CFPP 13 and above from

278 Recital 96 of the Provisional Regulation notes that "PME from Indonesia is almost always blended
with other biodiesel from other sources before being sold to the first independent customer". The Panel asked
the European Union whether the decision not to make a direct comparison was strictly due to low volume of
sales of CFPP 13 biodiesel or also to address the issue of blending. The European Union replied that the
adjustment was made due to the low percentage of CFPP 13 biodiesel made and sold by the EU industry from
the total of all biodiesel made and sold by the EU industry. (European Union's response to Panel question
No. 88, para. 41).
279 European Union's response to Indonesia's question No. 2, para. 6; Indonesia's response to Panel
question No. 108, para. 102.
280 Indonesia agrees that a finding of price undercutting with respect to the EU industry's sales of
CFPP 13 biodiesel would not have been sufficient for considering whether there has been significant price
undercutting by the dumped imports from Indonesia. (Indonesia's second written submission, para. 124).
281 European Union's second written submission, para. 57.
282 Indonesia's first written submission, paras. 246, 248-249, and 253; second written submission,
paras. 120 and 125-126.

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Indonesia with the CFPP 0 manufactured and blended in the Union. One Indonesian
exporting producer noted that as the sales of CFPP 13 by the Union industry were
made in small quantities per transaction, that these prices should be compared to
similar sized transactions of CFPP 0. On inspection of transactions of CFPP 0 of a
similar quantity per transaction, the differen ce in price found was in line with the
difference using all transactions of CFPP 0, with differences in price both above and
below the average price difference. As a result there was no change to the level of
price undercutting found in the provisional Regulation in recital 97.283
7.136. Following an examination of quantities per transaction, the EU authorities observed that
the difference in price remains the same regardless of the fact whether the average price was used
based on all CFPP 0 transactions or only on the price of CFPP 0 transactions with the volume
similar to the volume of CFPP 13 biodiesel transactions. Thus, contrary to what is suggested by
Indonesia, the EU authorities took into account volume aspects of the sales in the context of
making an adjustment.
7.137. Indonesia also notes that the EU authorities should have employed the same method for
the calculation of the adjustment on account of physical differences that was used in the prior
investigation concerning biodiesel from the United States, which factored in the type of feedstock
used in producing biodiesel as a basis to make price comparisons instead of focusing on CFPP. 284
The EU authorities addressed the same point raised by interested parties during the investigation,
explaining that the method b ased on CFPP was appropriate in the present investigation, because
the CFPP level was a determinative factor for customers that were not concerned with the
composition of biodiesel once the product meets a required CFPP level. 285 As mentioned above,
Articles 3.1 and 3.2 of the Anti -Dumping Agreement do not specify a methodology that must be
followed in conducting a price effects analysis. An investigating authority enjoys a degree of
discretion to determine the analytical methodologies that will be applied in the course of an
investigation, provided that such method respects the basic principles in Article 3.1 that a
determination of injury must be based on positive evidence and involve an objective
examination.286
7.138. In addition, Indonesia submits that approximately 19% of biodiesel imports from Indonesia
had a CFPP level other than CFPP 13, ranging from CFPP 7 to CFPP 17 degrees centigrade .
Indonesia submits that the EU authorities improperly applied the adjustment calculated for
CFPP 13 biodiesel to all biodiese l imports from Indonesia, without regard to the different prices of
CFPP 7 to CFPP 17 varieties (other than CFPP 13 biodiesel). 287 The Panel questioned the parties on
the volumes and prices of CFPP 7 to CFPP 17 biodiesel imports. Indonesia referred to the da ta of
two producers that sold biodiesel other than CFPP 13 and indicated that the overall price
differential between CFPP 7 and CFPP 15 biodiesel was around [[***]] and the difference between
CFPP 13 and CFPP 17 was [[***]].288 In its response, the European Union explained that sales of
CFPP 12, CFPP 13 , and CFPP 14 collectively accounted for 94% of all biodiesel imports from

283 Definitive Regulation, (Exhibit IDN-2), recital 124.
284 In that investigation, the price of the respective feedstock (palm, soybean, or rapeseed oils) was
used to calculate an allowance on account of physical differences between different types of biodiesel before a
price comparison was made. The EU authorities also factored in the percentage of particular types of biodiesel
in blended varieties to take into account all biodiesel that was imported or sold by the sampled EU producers.
Indonesia submits that this method would have allowed to resolve the issue of difference in quantities and to
permit the calculation of a reliable adjustment on account of physical differences. (Indonesia's second written
submission, paras. 134-138; Commission Regulation (EC) No. 193/2009 of 11 March 2009 imposing a
provisional anti-dumping duty on imports of biodiesel originating in the United States of America,
(Exhibit IDN-25), recital 84; and Council Regulation (EC) No. 599/2009 of 7 July 2009 imposing a definitive
anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in
the United States of America, (Exhibit IDN-26), recital 123).
285 Definitive Regulation, (Exhibit IDN-2), recitals 122-123; Indonesia's first written submission,
para. 255 (referring to Wilmar Group, Comments on Provisional Disclosure (1 July 2013), (Exhibit IDN-13
(BCI)), pp. 28-29; and P.T. Pelita Agung Agrindustri, Post-Hearing Brief (30 August 2013), (Exhibit IDN-24),
p. 7).
286 Panel Reports, Thailand – H-Beams, para. 7.159; China – Broiler Products, paras. 7.474-7.476;
287 Indonesia's second written submission, paras. 131-133; first written submission, para. 244; and
response to Panel question No. 102.
288 Indonesia's response to Panel question No. 102, paras. 89-91.

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Indonesia.289 The European Union also noted that Indonesia had only referred to the price
difference between the lowest price biodiesel import (presumably CFPP 17) and the highest price
import (presumably CFPP 7).290 This suggests that the price differential between CFPP 12,
CFPP 13, and CFPP 14 would be appreciably smaller. In these circumstances, we consider t hat it
was reasonable for the EU authorities to calculate an adjustment on the basis of CFPP 13
considering that so few imports were at the extremes (CFPP 7 and CFPP 17) that they would have
an insignificant impact on the overall assessment.
7.139. Finally, in the second written submission, Indonesia raised additional arguments as to why
the price s of CFPP 13 biodiesel produced by the EU industry cannot serve as the basis for
calculating the adjustment to the price of imports from Indonesia . First, Indonesia subm its that
there may be additional costs when producing CFPP 13 biodiesel in the European Union, due to the
fact that imported CPO feedstock from Malaysia or Indonesia may need to be used in the
production of CFPP 13 biodiesel, which may have implications fo r the price of the final product. In
Indonesia's view, this possibility may distort the comparison between CFPP 13 biodiesel and
CFPP 0 biodiesel prices.291 Second, Indonesia submits that the European Union itself acknowledged
that the production of PME in t he European Union is uneconomical which, according to Indonesia,
demonstrates that "the odd sale of 6,300 MT of the Union produced CFPP 13°C biodiesel is unlikely
to be representative of the value that the customers assign to the physical differences betwe en
PME and CFPP 0°C".292
7.140. We are of the view that these arguments are founded on a completely different basis from
those adduced by Indonesia in its first written submission, in respect of its challenge to the
adjustment, and we therefore do not consider it appropriate to make findings with regard to these
additional arguments that have been raised in the second written submission.
7.141. In the first written submission, Indonesia focused its claim concerning the price
adjustment on the EU authorities' failure to account for differences in quantities. Indonesia did not
present any arguments in connection with the additional costs when producing CFPP 13 biodiesel
in the European Union . Indonesia's arguments rel ated to the presence of additional costs are a
completely different basis for challenging the adjustment and cannot be considered as an
elaboration of Indonesia's arguments presented in the first written submission or a rebuttal to the
arguments of the European Union. We recall that Paragraph 6 of the Working Procedures provides
that each party shall present the facts of the case and its arguments in its first written submission
in advance of the first substantive meeting of the Panel with the parties .293 Paragraph 6 of the
Working Procedures is an expression of the principle of due process: the complainant must make
its case at a sufficiently early stage of the proceeding to allow the respondent sufficient time to
defend itself. Indonesia's additional arguments are based on the information provided in the
Provisional Regulation, and we therefore consider that these arguments could have been
articulated in Indonesia's first written submission.294
7.142. In consideration of the above, we conclude that Indonesia has failed to establish that the
European Union acted inconsistently with Articles 3.1 and 3.2 of the Anti -Dumping Agreement, by
relying on prices of CFPP 13 biodiesel produced by the EU industry in calculating an adjustment to
the price of Indonesian imports.

289 European Union's response to Panel question No. 101, para. 57.
290 European Union's comments on Indonesia's response to Panel question No. 102, paras. 46-47.
291 Indonesia's second written submission, paras. 128-129.
292 Indonesia's second written submission, para. 130.
293 Paragraph 6 of the Panel's Working Procedures states that:
Before the first substantive meeting of the Panel with the parties, each party shall submit a
written submission in which it presents the facts of the case and its arguments, in accordance
with the timetable adopted by the Panel.
294 In the context of the injury determination, the EU authorities addressed the issues related to the DET
system in their non-attribution analysis. In particular, the imports of biodiesel from Argentina and Indonesia
made by the EU industry were examined as a non-attribution factor. (Provisional Regulation, (Exhibit IDN-1),
recitals 132-136; Definitive Regulation, (Exhibit IDN-2), recitals 151-160). This issue was a subject to dispute
in EU – Biodiesel (Argentina). (Panel Report, EU – Biodiesel (Argentina), paras. 7.473-7.490).

BCI deleted, as indicated [[***]]

7.6.4 Whether the EU authorities failed to take into account noticeable differences
between imported and domestic biodiesel and to examine the significance of price
undercutting with regard to the majority of the EU industry's sales
7.143. Indonesia submits that the Europe an Union acted inconsistently with Articles 3.1 and 3.2
of the Anti -Dumping Agreement, by failing to take into account certain product differences
between imported and domestic biodiesel as well as the majority of the EU industry's sales in its
price undercutting analysis. Therefore, the EU authorities failed to properly consider the effect of
the dumped imports from Indonesia on the price of the EU biodiesel.
7.144. Indonesia draws on the Appellate Body's interpretation of "significant price undercutting"
to argue that the EU authorities failed to make a "dynamic assessment" of whether the price of
PME imports from Indonesia had any effects on the price of the blended CFPP 0 biodiesel from the
European Union.295 Indonesia submits that the analysis fails to take into account that PME from
Indonesia and blended CFPP 0 biodiesel from the European Union have noticeably different
physical characteristics (different feedstock and CFPP levels), considerable price differ ences (the
price of blended CFPP 0 biodiesel is 21% more expensive than Indonesian PME) and different
modes of use (PME is rarely used by consumers in its pure form and must be blended with other
types of biodiesel).296 Considering that the price comparison was made between different types of
biodiesel, Indonesia argues that the price effects analysis should have involved a discussion of
price substitutability, price correlation , and the degree of the impact that movement of prices of
imported PME might have on the EU producers' sales of blended CFPP 0 biodiesel. 297 Indonesia
further argues that the EU authorities' finding of significant price undercutting is flawed because it
is based on a comparison concerning only 37% of the EU industry's sales.298
7.145. The European Union argues that PME from Indonesia was in competition with EU biodiesel.
The European Union submits that imported and domestic biodiesel had similar basic physical,
chemical, technical characteristics and uses , and were considered to be like products. 299 The
European Union notes that during the investigation the EU authorities rejected an argument raised
by an interested party that PME from Indonesia was not a like product to RME and other
EU biodiesels as well as to SME from Argentina due to the higher C FPP level of PME (which
necessitates that PME is blended with other types of biodiesel before use). 300 In this respect, the
EU authorities stated that PME is in competition with biodiesel produced in the European Union,
which includes RME as well as biodiese l from palm oil and other feedstocks. 301 The EU authorities
considered that PME is interchangeable with biodiesel produced by the EU industry, because it can
be used in the EU market throughout the year by blending with other biodiesels. 302 The
European Union also refers to the EU authorities' findings that imports from Indonesia and
Argentina are blended with mineral diesel by the same trading companies and sold to customers in
direct competition with EU biodiesel.303
7.146. The European Union further submits that it was reasonable to use only sales of blended
CFPP 0 biodiesel, which represented 37% of the EU sampled producers' sales, because blended
CFPP 0 biodiesel was the product with the highest volume of sales of the EU industry, while other
sales were mainly of biodiesel with lower CFPP ratings.304

295 Indonesia's second written submission, para. 144 (referring to Appellate Body Reports, China –
HP-SSST (Japan) / China – HP-SSST (EU), para. 5.158).
296 Indonesia's second written submission, paras. 146-147; first written submission, paras. 258
and 269.
297 Indonesia's second written submission, paras. 148-151.
298 Indonesia's second written submission, paras. 160-168; first written submission, paras. 259-269.
299 European Union's response to Panel question No. 90, paras. 43-44 (referring to Provisional
Regulation, (Exhibit IDN-1), recital 34).
300 European Union response to Panel question No. 90, para. 45 (referring to Definitive Regulation,
(Exhibit IDN-2), recitals 17-18).
301 Definitive Regulation, (Exhibit IDN-2), recital 18.
302 Definitive Regulation, (Exhibit IDN-2), recital 18.
303 European Union's response to Panel question No. 90, para. 43 (referring to Provisional Regulation,
(Exhibit IDN-1), recital 89).
304 The European Union explained that the EU authorities "relied on 37% of the sampled producers' sales
because sales of biodiesel of CFPP 0 were by far the most important sales of the sampled EU industry by
volume, while other sales were mainly at lower CFPP". (European Union's second written submission,
para. 57).

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7.147. We note that in China – HP-SSST (Japan) / China – HP-SSST (EU), the Appellate Body
stated that the inquiry with regard to "significant price undercutting" requires " a dynamic
assessment of price developments and trends in the relationship between the prices of the
dumped imports and those of domestic like products over the entire period of investigation". 305
The consideration as to whether the observed price undercutting is significant will necessarily
depend on the circumstances of each case and may involve an examination of the nature of the
products or product types at issue, the extent and duration of price undercutting, or the relative
market shares of the product types with respect to which the authority has made a find ing of price
undercutting.306, 307
7.148. The obligation under Article 3.2 is to " consider", i.e. to take into account, whether there
has been a significant price undercutting (or whether the effect of dumped imports is otherwise
significant price depression or significant price suppression), rather than to make a determination
regarding the ef fects of dumped imports on prices. 308 The provisions of Article 3 contemplate "a
logical progression of inquiry leading to an investigating authority's ultimate injury and causation
determination."309 The consideration of the effects of dumped imports on price s is a step in the
logical progression toward a determination whether injury is caused by the dumped imports. 310
The consideration of price effects under Article 3.2 is necessary in order to answer t he ultimate
question in Article 3.5 as to whether dumped imports are causing injury to the domestic industry.
The outcome of this inquiry thus forms a basis for the overall causation analysis under Article 3.5,
which requires an investigati ng authority to demonstrate that the dumped imports are causing
injury to t he domestic industry " 'through the effects of ' dumping, or subsidies '[ a]s set forth in
paragraphs 2 and 4'".311
7.149. Article 3.2 establishes a link between the price of dumped imports and that of like
domestic products, by requiring that a comparison be made be tween the two.312 When conducting
a price effects analysis and comparing prices of the imported product to a certain domestic
product, panels and the Appellate Body have emphasized that it is appropriate and important to
consider factors affecting comparabil ity, including the competitive relationship between the
imported and domestic products at issue. Specifically, the Appellate Body stated in China – GOES
that even though there is no explicit requirement regarding price comparability in Article 3.2, the
failure to ensure price comparability is incompatible with basic principles for injury determination
provided in Article 3.1. 313 The panels in China – Broiler Products and China – X-Ray Equipment
highlighted that the failure to ensure price comparability in the price effects analysis could lead to
a distorted analysis of the causal link between dumped imports and the injury to the domestic
industry.314 The panel in China – X-Ray Equipment stated that if two products being compared are
not in competition with each other and thus are not comparable, the results of such analysis would
not provide a reasonable basis for the causation analysis.315
7.150. We agree with Indonesia that there are complexities in the competitive relationship
between PME imports from Indonesia and blended CFPP 0 biodiesel from the European Union that
were not considered by the EU authorities in their price undercutting analysis. We note in
particular that due to its higher CFPP level, Indonesian PME is generally not used on its own in the

305 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.159.
306 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.161.
307 In making its claim under Articles 3.1 and 3.2, Indonesia also refers to the legal standard under
Article 3.5 developed by the Appellate Body in China – HP-SSST (Japan) / China – HP-SSST (EU). (Indonesia's
second written submission, para. 149 (referring to Appellate Body Reports, China – HP-SSST (Japan) / China –
HP-SSST (EU), para. 5.262)). In this regard, we note that the requirements under Articles 3.2 and 3.5 are
different. In China – GOES, the Appellate Body stated that the inquiry under Article 3.2 "does not duplicate the
different and broader examination regarding the causal relationship" between dumped imports and injury to
the domestic industry pursuant to Article 3.5. (Appellate Body Report, China – GOES, para. 154).
308 Appellate Body Report, China – GOES, para. 130.
309 Appellate Body Report, China – GOES, para. 128.
310 Panel Report, China – Cellulose Pulp, para. 7.64.
311 Appellate Body Report, China – GOES, para. 143 (emphasis original); Panel Report, China – X-Ray
Equipment, para. 7.50.
312 Appellate Body Report, China – GOES, para. 136.
313 Appellate Body Report, China – GOES, para. 200. See also Appellate Body Reports, China – HP-SSST
(Japan) / China – HP-SSST (EU), para. 5.161 and fn 382.
314 Panel Reports, China – Broiler Products, para. 7.475; China – X-Ray Equipment, para. 7.51.
315 Panel Report, China – X-Ray Equipment, para. 7.50.

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EU market, but is rather an input to produce blended biodiesel. 316 Specifically, the EU authorities
stated that:
SME and PME biodiesel could be used in their pure forms but they are generally
blended, either among themselves or with RME, before being us ed in the
European Union. The reason for blending SME with PME is that SME in its pure form
does not meet the European standard EN 14214 as regards iodine and cetane
numbers. The reason for blending PME (and SME) with RME is that PME and SME have
a higher Cold Filter Plu gging Point (CFPP) than RME and are not therefore suitable for
use in their pure form during winter months in cold regions of the European Union.317
7.151. The EU authorities also observed that:
[T]he Cold Filter Plugging Point ('CFPP') of PME (at +13 Centigrade) m eans that PME
cannot be used across the Union without being mixed with other biodiesels to bring
down the CFPP.318
7.152. In response to a question from the Panel, Indonesia explained that the amount of PME
used in a blend would depend on the season and location. In Southern Europe, CFPP -5 biodiesel is
used in winter months while CFPP +5 biodiesel is used in summer months. In Northern Europe,
CFPP -10 biodiesel is used in winter months and CFPP 0 biodiesel is alternately used in summer
months. Indonesia noted that in summer months, PME is blended at an average of 70% in Italy
and Spain, while in winter months it cannot be used at all. In the Scandinavian countries, PME may
not even be used at all during the year.319 The European Union has not contested this explanation.
7.153. We note that the Definitive Regulation confirms that sales of PME are affected by issues
pertaining to seasonality:
Both SME and PME are imported into the Union, and are also manufactured within the
Union, and are blended with RME and other biodiesels manufactured within the Union
before being sold or blended with mineral diesel. The blenders have the choice of
purchasing biodiesel from different feedstocks and different origins to produce their
final product, based on the market and the climatic condit ions throughout the year.
PME is sold in larger quantities during the summer months and smaller quantities
during the winter months, but it is still in competition with RME and Union made
biodiesel and also SME from Argentina.320
7.154. This recital suggests that PME competes with SME from Argentina, RME , and other
biodiesels produced by the EU industry, because they are used to make various blends that are
suitable for certain climatic conditions. However, this recital does not address the important issue
of whether imports of PME from Indonesia compete with blended CFPP 0 biodiesel produced by the
EU industry. Taking into account this statement of the EU authorities, the Panel specifically asked
the European Union to explain whether climatic conditions affect the competition between PME and
blended CFPP 0 biodiesel. The European Union did not specifically address the issue of competition
between imported PME and blended CFPP 0 biodiesel in its reply. The European Union simply
stated that " [c]limatic conditions infl uence the suitable CFPP of the blend in differ ent parts of the
European Union", and that PME is blended with biodiesel having a lower CFPP (e.g. RME) in order
to achieve CFPP 0.321
7.155. We note that recital 34 of the Provisional Regulation indicates that importe d biodiesel and
EU biodiesel had similar basic physical, chemical, technical characteristics , and uses, and were

316 Provisional Regulation, (Exhibit IDN-1), recitals 32 and 148. The European Union explained that the
main product sold in the European Union was CFPP 0, which contains PME and other biodiesels blended
together. (European Union's response to Panel question No. 88, para. 41). The European Union further noted
that "[a]s PME has a higher CFPP (mostly CFPP 13), it is blended with biodiesel having a lower CFPP (e.g. RME)
in order to achieve CFPP 0". (European Union's response to Panel question No. 91, para. 47).
317 Provisional Regulation, (Exhibit IDN-1), recital 32.
318 Provisional Regulation, (Exhibit IDN-1), recital 148.
319 Indonesia's response to Panel question No. 89.
320 Definitive Regulation, (Exhibit IDN-2), recital 117.
321 European Union's response to Panel question No. 91, para. 48.

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considered to be like products. 322 We also note that recital 18 of the Definitive Regulation rejects
the argument of an interested party that PME is not a like product to biodiesel produced by the
EU industry due to its high CFPP level, which necessitates that PME is blended with other types of
biodiesel before use in the EU market. In particular, recital 18 reads:
PME produced in Indonesia is in competition with biodiesel produced in the Union,
which is not just RME but also biodiesel made from palm oil and other feedstocks. PME
can be used throughout the Union throughout the year, by blending with other
biodiesels before use, in the same way as R ME and SME. PME is therefore
interchangeable with biodiesel made in the Union and therefore is a like product.323
7.156. The fact that the imported and domestic products were considered to be like products does
not automatically mean that each of the products inclu ded in the basket of imported products is
alike in all respects to each of the products included into the basket of domestic products. 324 Nor
does the fact that the imported and domestic products were considered to be like products address
the particular com petitive dynamic that PME may only be used in a blend, and is actually a
component of the different blends sold to end users in the EU marke t. PME might compete with
RME to the extent that they both are used to produce a blend. However, this does not mean that
PME and blended CFPP 0 biodiesel are in competition with each other. In response to a question
from the Panel t he European Union confirmed this understanding, noting that "[recital 18 of the
Definitive Regulation] does not state that In donesian imports of PME and blends or EU industry
CFPP 0 biodiesel are in competition with each other."325, 326
7.157. The EU authorities found that the imported biodiesel was blended with mineral diesel by
the same trading companies and sold to customers at the EU market in direct competition with
biodiesel produced by the EU industry. 327 Even though both PME from Indonesia and blended
CFPP 0 biodiesel might compete for sales to the companies who blend biodiesel with mineral
diesel, this point nonetheless does not address the fact th at the EU authorities failed to explain

322 Recital 34 of the Provisional Regulation states:
The investigation has shown that the product concerned, the product produced and s old on the
domestic market of Argentina and Indonesia, and the product produced and sold in the Union by
the Union industry have similar basic physical, chemical, technical characteristics and uses. They
are therefore provisionally considered to be alike w ithin the meaning of Article 1(4) of the basic
Regulation.
(Provisional Regulation, (Exhibit IDN-1), recital 34)
323 Definitive Regulation, (Exhibit IDN-2), recital 18.
324 Panel Report, China – X-Ray Equipment, para. 7.65 (referring to Panel Report, EC – Salmon
(Norway), paras. 7.13-7.76), which reads:
[A] number of panels have clarified that where a broad basket of goods under consideration and
a broad basket of domestic goods have been found by an investigating authority to be "like", this
does not mean that each of the goods included in the basket of domestic goods is "like" each of
the goods included within the scope of the product under consideration.
In addition, the panel in China – Broiler Products stated:
[I]n our view, ensuring that the products bei ng compared are "like products" will not always
suffice to ensure price comparability. Where the products under investigation are not
homogenous, and where various models command significantly different prices, the investigating
authority must ensure that the product compared on both sides of the comparison are sufficiently
similar such that the resulting price difference is informative of the "price undercutting", if any,
by the imported products.
(Panel Report, China – Broiler Products, para. 7.483)
325 European Union's response to Panel question No. 92, para. 49.
326 The European Union also notes that the EU authorities conducted a cumulative assessment of the
effects of the dumped imports from Indonesia and Argentina on the prices of the domestic like product. The
fact that the EU authorities decided to undertake a cumulative assessment based on the circumstances is not
determinative of whether the requirements of Article 3.2 have been met. In any event, although the
European Union refers to the fact that imports were assessed cumulatively, as Indonesia points out, the EU
authorities assessed price undercutting separately for Indonesia and Argentina, due to the difference in
products exported by these countries. The EU authorities clearly indicated that all Argentine exports were at a
CFPP level of 0, while Indonesian imports were not, requiring a price adjustment, as discussed above.
(European Union's response to Panel question No. 90, para. 42; Indonesia's comments on the
European Union's response to Panel question No. 90, paras. 17-20).
327 Provisional Regulation, (Exhibit IDN-1), recital 89.

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whether the comparison between sales of PME and blended CFPP 0 biodiesel was made at a proper
comparison level, given that PME is an input to the blends, including CFPP 0 biodiesel.328
7.158. In our view, an objective and un biased investigating authority should have explained why
it was reasonable and adequate to compare the prices of blended CFPP 0 biodiesel with the prices
of PME that is used as an input to produce such blend. The particular physical properties and end
uses (for blending) have implications when it comes to competition between the compared
products, i.e. an end user cannot simply use PME to the extent that blended CFPP 0 biodiesel is not
available, due to climatic limitations related to CFPP levels. This necessarily affects price
comparability in respect of those products. Although the EU authorities made an adjustment to the
price of Indonesian PME to account for different CFPP levels of Indonesian and EU biodiesel, we are
of the view that this adjustment is not sufficient to account for complexities in competitive
relationships between PME and blended CFPP 0 biodiesel, given that Indonesian PME is an input to
blended biodiesel, including blended CFPP 0.
7.159. Under these circumstances, we consider that the comp etitive dynamic between imports of
Indonesian PME and blended CFPP 0 biodiesel is significantly more complex than the E U
authorities' determination would suggest. The effect of seasonality in particular suggests that
competition between imported PME and blended CFPP 0 biodiesel will often be nuanced, rather
than "direct". While it is not impossible that a more complex analysis would still have justified a
finding that imports of PME had a significant price undercutting effect on price of blended CFPP 0
biodiesel sold by the EU industry, Indonesia has raised a series of legitimate questions regarding
the validity of the EU authorities' analysis. The European Union has failed to resolve these
questions, or rebut the case made by Indonesia.329
7.160. We now turn to Indo nesia's argument that the EU authorities improperly limited the price
undercutting analysis to only 37% of the EU industry's sales. As discussed above, the EU
authorities based the price undercutting calculations on the EU industry's sales of blended CFPP 0
biodiesel, which was the product with the highest volume of sales , representing 37% of the EU
sampled producers' sales. We note that Articles 3.1 and 3.2 of the Anti -Dumping Agreement do
not require an investigating authority to consider the existence of price undercutting with regard to
the entire range of domestic like products. 330 There is no requirement in the Anti -Dumping
Agreement that provides any specific percentage of the domestic industry sales to be considered in
the price effects analysis. Indon esia acknowledges that there is no obligation under Article 3.2 to
establish the existence of price undercutting with regard to the entire range of domestic like
products.331 Rather, Indonesia argues that extending the price undercutting analysis to at least
two or three additional products sold by the EU industry would have significantly increased the
credibility of the EU authorities' findings.332 Indonesia adds that the EU authorities did not assess
the significance of price undercutting in relation to the r emaining 63% of the EU industry's

328 We note the argument of the European Union that PME imports from Indonesia were bought by both
the EU industry in self-defence and also by blenders and traders. The European Union submits that the EU
producers were in competition with traders and blenders which bought PME directly and Indonesian exporting
producers with related importers in the European Union, which imported PME and then resold it. The
European Union submits that this would be the correct price competition point. (European Union's opening
statement at the second meeting of the Panel, paras. 43-44). Indonesia agrees that EU producers are likely to
be in competition with traders and blenders. (Indonesia's response to Panel question No. 100, para. 86).This
argument of the European Union fails to address the issue of whether there is a direct competition between
CFPP 13 biodiesel from Indonesia and blended CFPP 0 biodiesel sold by the EU industry.
329 We note the argument of the European Union that the existence of significant price undercutting was
considered in the framework of other factors, such as an increase in volume of dumped imports from Indonesia
and its market share in the EU market as well as a series of factors having a bearing on the state of the
domestic industry. (European Union's first written submission, paras. 99-105). The fact that the existence of
significant price undercutting was considered together with other factors examined for the purpose of injury
analysis does not change our conclusion that the EU authorities' analysis of the price relationship between
imported PME and blended CFPP 0 biodiesel is flawed, because it is not clear that imports of PME had an effect
on prices of blended CFPP 0 biodiesel sold by the EU industry.
330 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.180 (referring to
Panel Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 7.141).
331 Indonesia's first written submission, para. 241 (referring to Appellate Body Reports, China –
HP-SSST (Japan) / China – HP-SSST (EU), para. 5.180).
332 Indonesia's second written submission, para. 166; opening statement at the second meeting of the
Panel, para. 79.

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sales.333 We found above that the EU authorities' analysis of the price relationship between
imported PME and blended CFPP 0 biodiesel is inadequate, because it fails to establish whether
imports of PME from Indonesia had an effect on prices of blended CFPP 0 biodiesel sold by the
EU industry. Given our finding that the price undercutting analysis is flawed, the question whether
this analysis should have included a broader range of the domestic like products becomes moot.
Given the failure by the EU authorities to properly establish price undercutting in respect of the
price comparison that they did make, there is no sense in seeking to ascertain whether or not the
EU authorities' analysis is sufficient to draw any conclusions regarding the existence of price
undercutting more generally, including in respect of other products sold by the EU industry.334
7.161. Based on the above, we find that Indonesia has demonstrated that the EU authorities
failed to establish that imports from Indon esia had an effect on prices of blended CFPP 0 biodiesel
sold by the EU industry. Therefore, we find that Indonesia has made a prima facie case that the
European Union acted inconsistently with Articles 3.1 and 3.2 of the Anti -Dumping Agreement by
failing to establish the existence of significant price undercutting with regard to Indonesian
imports. This prima facie case has not been rebutted by the European Union.
7.6.5 Conclusions
7.162. As indicated above, we find that Indonesia failed to establish that the European Union
acted inconsistently with Articles 3.1 and 3.2 of the Anti -Dumping Agreement, by relying on prices
of CFPP 13 biodiesel produced by the EU industry in calculating an adjustment to the price of
Indonesian imports. We further find that Indonesia made a prima facie case that the EU authorities
acted inconsistently with Articles 3.1 and 3.2 of the Anti -Dumping Agreement, by failing to
establish the existence of significant price undercutting with regard to Indonesian imports . Since
that prima facie case has not been rebutted, we uphold Indonesia's claim accordingly.
7.7 Whether the European Union acted inconsistently with Article 9.3 of the
Anti-Dumping Agreement and Article VI:2 of the GATT 1994 by imposing and levying
anti-dumping duties in excess of the margins of dumping
7.7.1 Introduction
7.163. Indonesia claims that the European Union acted inconsistently with Article 9.3 of the
Anti-Dumping Agreement and Article VI:2 of the GATT 1994 by imposing and levying anti-dumping
duties in excess of the margin of dumping that should have been established in accordance with
Article 2 of the Anti-Dumping Agreement. Indonesia submits that this results from the fact that the
European Union acted inconsistently with Articles 2.2, 2.2.1.1, 2.2.2(iii), and 2.3 of the
Anti-Dumping Agr eement when constructing the normal value for Indonesian exporters and
establishing the constructed export price for one Indonesian exporter . Indonesia submits that, if
the dumping margins ha d been correctly calculated in conformity with Article 2, this would have
resulted in negative dumping margins in certain cases, or the margins of dumping would have
been significantly lower than the duties imposed by the European Union. 335 The European Union

333 Indonesia's second written submission, para. 167; opening statement at the second meeting of the
Panel, para. 80.
334 In its second written submission, Indonesia takes issue with the fact that the price undercutting
analysis only covered the period from 1 July 2011 to 30 June 2012. Indonesia submits that the EU authorities
failed to provide data on the price of CFPP 0 biodiesel during the entire period considered for the injury
assessment, i.e. from 1 January 2009 to 30 June 2012, and instead only provided data on average prices of
the EU industry during this period. (Indonesia's second written submission, paras. 157-159). We note that
similar to Indonesia's arguments discussed in paras. 7.139. -7.141. above, Indonesia did not raise the issue
of period considered for the price undercutting analysis in its first written submission. This allegation appears
to relate to Indonesia's broader claim that the EU authorities failed to perform a dynamic assessment of price
developments and trends over the entire period of investigation. Nevertheless, the specific factual allegations
are new and were not raised by Indonesia in its first written submission. We therefore consider it inappropriate
to address this new allegation in our report. In any event, it is well-established that panels do not need to
address all arguments made by the parties. (See, e.g. Appellate Body Report, US – Carbon Steel (India),
para. 4.233). We do not need to address this argument in order to resolve the dispute before us, since we
have already found that the EU authorities' price undercutting analysis was flawed.
335 Indonesia's first written submission, paras. 271-272; second written submission, paras. 170-174.

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has acknowledged the factual description provided by Indonesia, but has not responded to the
substance of Indonesia's claim.336
7.7.2 The EU authorities' imposition of definitive anti-dumping duties
7.164. We recall that, o n 2 9 May 2013, the EU authorities imposed indiv idual provisional
anti-dumping duties on four sampled Indonesian producers ranging between zero and 9.6%. 337 At
the provisional stage, the dumping margins for the producers were based on the decision of the EU
authorities to construct the normal value based on the recorded costs of production of Indonesian
producers during the investigation period, the SG&A expenses incurred and a 15% profit
margin.338 In the Definitive Disclosure, the European Union revised its methodology for
establishing the cost of producti on of biodiesel by replacing the recorded costs of CPO of
Indonesian producers with an international reference price published by the Indonesian
government. The EU authorities based their decision to replace the recorded costs of production on
the finding that the Indonesian DET system distorted the costs of production of biodiesel
producers.339 As a result of this adjustment, the anti -dumping duty rates for Indonesian producers
increased significantly. Definitive dumping margins were calculated ranging from 8.8% to 23.3%
and definitive anti -dumping duties were applied corresponding to the calculated injury margins,
which ranged from 8.8% to 20.5%. 340 The duties were applied in the form of specific duties
expressed as a fixed amount in euro/tonne.
7.7.3 Whether Indonesia has established that the European Union acted inconsistently
with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994
7.165. The chapeau of Article 9.3 of the Anti-Dumping Agreement provides that:
The amount of the anti -dumping duty shall not exceed the margin of dumping as
established under Article 2.
7.166. Article VI:2 of the GATT 1994 provides that:
In order to offset or prevent dumping, a contracting party may levy on any dumped
product an anti -dumping duty not greater in am ount than the margin of dumping in
respect of such product. For the purposes of this Article, the margin of dumping is the
price difference determined in accordance with the provisions of paragraph 1.
7.167. Indonesia submits that, in order to demonstrate a viola tion of Article 9.3 of the
Anti-Dumping Agreement, it is required to demonstrate, first, that the margin of dumping
calculated by the EU authorities was determined in violation of the di sciplines prescribed in
Article 2 of the Anti-Dumping Agreement, and second, that the anti-dumping duties were imposed
at a rate that is higher than the dumping margin that would have been established had the EU
authorities acted consistently with Article 2. 341 Indonesia submits that a similar approach may be
taken to establish a violation of Article VI:2 of the GATT 1994.342
7.168. Similar claims were raised by Argentina in EU – Biodiesel (Argentina) . In addressing
Argentina's Article 9.3 claim, the panel considered that the term "margin of dumping" in Article 9.3
"relates to a margin [of dumping ] that is established in a manner subject to the disciplines of
Article 2 and which is therefore consistent with those disciplines". 343 The panel additionally

336 European Union's first written submission, paras. 110-111; second written submission, para. 62.
337 Provisional Regulation, (Exhibit IDN-1), recital 179.
338 Provisional Regulation, (Exhibit IDN-1), recital 63.
339 Definitive Disclosure, (Exhibit IDN-7), recitals 57-62.
340 Definitive Regulation, (Exhibit IDN-2), recital 215. The injury margins for two Indonesian producers
were determined to be higher than the corresponding dumping margins. Anti-dumping duty rates were
assessed at the rate of the dumping margins for those producers.
341 Indonesia's first written submission, para. 274.
342 In order to demonstrate a violation of Article VI:2 of the GATT 1994, Indonesia submits that a
complainant must demonstrate that: (a) the dumping margin was not determined in accordance with the
disciplines laid out in Article VI:1 of the GATT 1994; and (b) that the anti-dumping duties are imposed at a rate
that is higher than the dumping margin that would have been established had the authority acted consistently
with Article VI:1 of the GATT 1994. (Indonesia's first written submission, para. 281).
343 Panel Report, EU – Biodiesel (Argentina), para. 7.359.

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observed that Article 9.3 also sets the maximum level at which anti -dumping duties may b e
levied.344 With these considerations in mind, the panel recalled its finding that the European Union
acted inconsistently with Articles 2.2.1.1 and 2.2 of the Anti -Dumping Agreement and with
Article VI:1(b)(ii) of the GATT 1994 in establishing the dumping margins in the Definitive
Regulation due to the use of surrogate input prices in the construction of normal value for
investigated Argentine producers. 345 The panel considered whether this finding could provide a
basis to establish an inconsistency with Arti cle 9.3. The panel observed that an error or
inconsistency under Article 2 of the Anti -Dumping Agreement "does not necessarily or
automatically mean that the anti -dumping duty actually applied will exceed the correct margin of
dumping".346 The panel recalled that the EU authorities had used actual input prices when
constructing the normal value and calculating the dumping margins at the provisional stage. While
it was not possible to infer the exact dumping margins that would have been established had the
determinations been done in accordance with Article 2, the panel considered that "the dumping
margins established in the Provisional Regulation provide a reasonable approximation of what
margins calculated in accordance with Article 2 of the Anti -Dumping Agre ement might have
been".347
7.169. The panel recalled that the margins of dumping calculated in the Provisional Regulation
ranged from 6.8% to 10.6%, while the duties imposed by the EU authorities in the Definitive
Regulation ranged from 22.0% to 25.7%, an amount t hat was "two to three times higher". 348 The
panel considered this to be a "substantial difference" which "suggests that the anti-dumping duties
imposed by the European Union in the Definitive Regulation exceeded what the dumping margins
could have been had t hey been established in accordance with Article 2". 349 On this basis, the
panel concluded that Argentina had made a prima facie case that the European Union had acted
inconsistently with the chapeau of Article 9.3 of the Anti-Dumping Agreement.350
7.170. The panel further considered this "substantial difference" gave rise to a violation of
Article VI:2 of the GATT 1994. The panel noted that Article VI:2 of the GATT 1994 provides that a
WTO Member "may levy … an anti -dumping duty not greater in amount than the margin of
dumping in respect of such product", further specifying that "[f]or the purposes of this Article, the
margin of dumping is the price difference determined in accordance with [Article VI:1]". The panel
in EU – Biodiesel (Argentina) considered that the terms "in accordance with" makes clear that
Article VI: 2 prohibits the levying of anti -dumping duties in excess of the dumping margin
determined consistently with Article VI:1 of the GATT 1994 in the same way as the phrase "as
established under Article 2" operates in Article 9.3. 351 Therefore, the reasoning applied under
Article 9.3 applies mutatis mutandis to Argentina's claim under Article VI:2 of the GATT 1994.352
7.171. The Appellate Body upheld the panel's reliance on the margins calculated in the Provisional
Regulation as appropriate in light of the specific circumstances .353 The Appellate Body also agreed
with the panel that the same consideration s that guided i ts assessment of Argentina's Article 9.3
claim apply to its assessment under Article VI:2 of the GATT 1994.354
7.172. We have found in Sections 7.3.3 and 7.3.4 above that the European Union acted
inconsistently with Articles 2.2.1.1 and 2.2 of the Anti -Dumping Agreement and with
Article VI:1(b)(ii) of the GATT 1994 in establishing the dumping margin s in the Definitive
Regulation due to the use of surrogate input prices in the construction of normal value for
investigated Indonesian producers. As Indonesia has indicated, the margins calculated in the
Provisional Regulation ranged from zero to 9.6%, while the duties imposed by the EU authorities in
the Definitive Regulation ranged from 8.8% to 20. 5%, amounts which are twice as high or greater

344 Panel Report, EU – Biodiesel (Argentina), para. 7.360.
345 Panel Report, EU – Biodiesel (Argentina), para. 7.364.
346 Panel Report, EU – Biodiesel (Argentina), para. 7.363.
347 Panel Report, EU – Biodiesel (Argentina), para. 7.365.
348 Panel Report, EU – Biodiesel (Argentina), para. 7.365.
349 Panel Report, EU – Biodiesel (Argentina), para. 7.365.
350 Panel Report, EU – Biodiesel (Argentina), para. 7.365.
351 Panel Report, EU – Biodiesel (Argentina), para. 7.366.
352 Panel Report, EU – Biodiesel (Argentina), para. 7.366.
353 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.110.
354 Appellate Body Report, EU – Biodiesel (Argentina), para. 6.112.

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in the case of each Indonesian producer/exporter.355 The difference is attributable to the change in
the basis for constructing the normal value between the Provisional Regulation and the Definitive
Regulation. In our view, this difference is significant . As the panel did in EU – Biodiesel
(Argentina), w e therefore consider it appropriate to rely on the margins calcul ated in the
Provisional Regulation as a basis to finding that the definitive anti -dumping duties imposed on
Indonesian producers/exporters exceeded what the dumping margins might have been had they
been established in accordance with Article 2 of the Anti-Dumping Agreement.
7.173. For the foregoing reasons , we uphold Indonesia's claim that the European Union acted
inconsistently with Article 9.3 of the Anti -Dumping Agreement by imposing anti -dumping duties in
excess of the margin of dumping that should have been established under Article 2 of the
Anti-Dumping Agreement. We further consider it appropriate to follow the approach taken by the
panel in EU – Biodiesel (Argentina) in respect of Indonesia's claim under Article VI:2 of the
GATT 1994.356 Accordingly, we find that the same considerations that informed our assessment of
Indonesia's claim under Article 9.3 therefore apply mutatis mutandis to our assessment of its
Article VI:2 claim. We therefore also uphold Indonesia's claim that the European Union acted
inconsistently with Article VI:2 of the GATT 1994.
7.7.4 Conclusions
7.174. As indicated above, we consider that "margin of dumping" referred to in Article 9.3 of the
Anti-Dumping Agreement relates to a margin of dumping that is established in a manner subject to
the disciplines of Article 2 of the Anti -Dumping Agreement and which is therefore consistent with
those disciplines. We find that Indonesia has made a prima facie case that the European Union
acted inconsistently with Article 9. 3 of the Anti -Dumping Agreement by impos ing anti -dumping
duties in excess of the margin of dumping that should have been established under Article 2 of the
Anti-Dumping Agreement. In addition, we find that the same considerations that informed our
assessment of Indonesia's claim under Article 9. 3 apply mutatis mutandis to our assessment of its
Article VI:2 claim. We therefore also conclude that that the European Union acted inconsistently
with Article VI:2 of the GATT 1994.
7.8 Whether the European Union acted inconsistently with Articles 7 and 9 of the
Anti-Dumping Agreement through the application and definitive collection of provisional
anti-dumping duties
7.8.1 Introduction
7.175. Indonesia submits that the European Union committed several errors in calculating a
provisional margin of dumping of 2.8% for the sampled Indonesian producer, P.T. Musim Mas ,
which led to an inflated provisional dumping margin that otherwise would have been negative. 357
Indonesia claims that the European Union acted inconsistently with a number of provisions of the
Anti-Dumping Agreement because it applied and definitively collected provisional anti -dumping
duties on imports from P.T. Musim Mas. Specifically, Indonesia reques ts the Panel to find that the
European Union acted inconsistently with358:
a. Article 7.1 of the Anti -Dumping Agreement because it applied provisional measures to
P.T. Musim Mas based on a WTO inconsistent preliminary determination of the existence
of dumping for P.T. Musim Mas;
b. Article 7.2 of the Anti-Dumping Agreement because it applied to P.T. Musim Mas a
provisional anti -dumping duty in excess of the provisionally estimated margin of
dumping for P.T. Musim Mas;
c. Article 9.2 of the Anti-Dumping Agreement becau se the provisional anti -dumping duty
that was applied to P.T. Musim Mas and definitively collected was not in an "appropriate
amount" within the meaning of Article 9.2; and

355 Indonesia's first written submission, table following para. 276. See also Provisional Regulation,
(Exhibit IDN-1), recital 179; and Definitive Regulation, (Exhibit IDN-2), recital 215.
356 The approach of the panel in EU – Biodiesel (Argentina) is set out in para. 7.170. above.
357 Indonesia's first written submission, para. 286.
358 Indonesia's first written submission, para. 285.

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d. Article 9.3 of the Anti-Dumping Agreement by applying to P.T. Musim Mas and
definitively collecting a provisional anti -dumping duty in excess of the provisionally
estimated margin of dumping for this exporting producer.
7.8.2 The EU authorities' determination of a p rovisional margin of dumping for
P.T. Musim Mas and the definitive collection of provisional duties
7.176. We begin by recalling the relevant facts related to the European Union's determination of a
provisional margin of dumping for P.T. Musim Mas before addressing the substance of Indonesia's
claims. On 29 May 2013, the EU authorities impo sed an individual p rovisional anti-dumping duty
of 2.8% on the sampled Indonesian producer, P.T. Musim Mas, based on a 2.8% provisional
dumping margin and a 23.3% provisional injury margin.359
7.177. In its comments on the Provisional Disclosure, P.T. Musim Mas alleged that the EU
authorities made three "mathematical and accounting errors"360 in calculating the normal value
and export price, as follows:
a. a mathematical error in calculating P.T. Musim Mas' domestic SG&A expenses by adding
to the amount of SG&A for d omestic sales the amount of the export tax payable on
exports of biodiesel, in constructing the normal value361;
b. inconsistent accounting treatment of income tax expenses of two related importers,
[[***]] and [[ ***]], by treating income tax expenses for both importers as an SGA
expense, in addition to deducting an amount for income tax expenses as part of a 5%
reasonable profit margin based on turnover, in constructing the export price362; and
c. inconsistent accounting treatment of gasoil hedging gains and losses , by deducting
gasoil hedging losses from the resale prices of a related importer [[***]] as an
allowance while failing to include hedging gains of another related importer [[***]] in its
resale prices, in constructing the export price.363
7.178. The EU authorities acknowledged these comments in the 1 October 2013 Definitive
Disclosure and indicated that necessary corrections were made .364 Specifically, with regard to the
constructed normal value, the EU authorities excluded the export tax from the SG&A based on the
fact that the export tax was not paid on domestic sales. 365 With regard to the constructed export
price, the EU authorities excluded income tax expenses from SG&A amounts 366 and addressed the

359 Provisional Regulation, (Exhibit IDN-1), recital 179.
360 P.T. Musim Mas, Comments on Provisional Disclosure (1 July 2013), (Exhibit IDN-18 (BCI)), p. 1.
361 P.T. Musim Mas, Comments on Provisional Disclosure (1 July 2013), (Exhibit IDN-18 (BCI)), pp. 1-2.
362 P.T. Musim Mas, Comments on Provisional Disclosure (1 July 2013), (Exhibit IDN-18 (BCI), p. 3.
363 P.T. Musim Mas, Comments on Provisional Disclosure (1 July 2013), (Exhibit IDN-18 (BCI)), pp. 3-4;
Specific Definitive Disclosure for [[***]], Annex 2 D (1 October 2013), (Exhibit IDN-27 (BCI)), p. 4; and
Specific Provisional Disclosure for [[***]], annex 2 A, (Exhibit IDN-19 (BCI)), p. 4.
364 The Definitive Regulation notes that one interested party (P.T. Musim Mas) claimed that some
"clerical mistakes" had been made in the calculation of the dumping margins at the provisional stage.
(Definitive Regulation, (Exhibit IDN-2), recital 227). In the Definitive Disclosure, the EU authorities referred to
"overstated SG&A", "an inconsistent accounting treatment of biodiesel hedging gains and losses" and "claims
for data changes in the calculations", indicating in each case that "corrections" were made. (Definitive
Disclosure, (Exhibit IDN-7), recitals 64, 73, 75, and 80).
365 Definitive Disclosure, (Exhibit IDN-7), recital 64 ("One party claimed that in relation to recital (63) of
the provisional Regulation an overstated SG&A was used for that party. After having examined this claim, it
appeared that the SG&A for both domestic and export sales was included in the construction of normal value.
The necessary corrections to use the SG&A for only the domestic sales were accordingly made.") Four specific
disclosures were issued to importing companies of P.T. Musim Mas explaining the change. (Specific Definitive
Disclosure for [[***]], Annex 2 A (1 October 2013), (Exhibit IDN-28 (BCI)), p. 2; Specific Definitive Disclosure
for [[***]], Annex 2 B (1 October 2013), (Exhibit IDN-29 (BCI)), p. 2; Specific Definitive Disclosure for
[[***]], Annex 2 C (1 October 2013), (Exhibit IDN-30 (BCI)), p. 2; and Specific Definitive Disclosure for
[[***]], Annex 2 D (1 October 2013), (Exhibit IDN-27 (BCI)), p. 2).
366 Definitive Disclosure, (Exhibit IDN-7), recital 80 ("Several exporting producers came also forward
with claims for data changes in the calculations. Where these claims were substantiated with the necessary
evidence, corrections were made"); Specific Definitive Disclosure for [[***]], Annex 2 D (1 October 2013),
(Exhibit IDN-27 (BCI)), p. 4; and Specific Definitive Disclosure for [[***]], Annex 2 C (1 October 2013),
(Exhibit IDN-30 (BCI)), p. 4. Indonesia submits that SG&A expenses for [[***]] were decreased by 0.05% and

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inconsistent treatment of hedging gains and losses by re -adding the a mount of hedging losses
from the resale prices of [[***]] that had been deducted as an allowance.367
7.179. In its comments on the Definitive Disclosure, P.T. Musim Mas argued that the collection of
provisional duties should only be done on the basis of the corrections that were made .368 Based on
the above corrections, P.T. Musim Mas submitted that the dumping margin at the provisional stage
"would be de minimis" and therefore no provisional duties should be collected .369 In the Definitive
Regulation, the EU authorities confirmed the corrections .370 Notwithstanding, the EU authorities
rejected the request by P.T. Musim Mas and ordered the definitive collection of the provisional duty
that had been provisionally secured on the basis that " the definitive anti-dumping duty is clearly
higher than the provisional duty ".371 The definitive anti -dumping duty rate determined
for P.T. Musim Mas was 16.9%, based on a dumping margin o f 18.3% and an injury margin
of 16.9%.372
7.8.3 Whether Indonesia has established violations of Articles 7 and 9 of the
Anti-Dumping Agreement related to the definitive collection of provisional anti -dumping
duties on imports from P.T. Musim Mas
7.180. Indonesia's claims under Articles 7.1(ii), 7.2, 9.2 , and the chapeau of Article 9.3 of the
Anti-Dumping Agreement relate to the decision of the EU authorities to definitively collect the
provisional anti-dumping duties on imports from P.T. Musim Mas.373
7.181. Article 7.1 provides in relevant part:
Provisional measures may be applied only if:
…
(ii) a preliminary affirmative determination has been made of dumping
and consequent injury to a domestic industry; …
7.182. The first sentence of Article 7.2 provides:
Provisional measures may take th e form of a provisional duty or, preferably, a
security – by cash deposit or bond – equal to the amount of the anti -dumping duty
provisionally estimated, being not greater than the provisionally estimated margin of
dumping.
7.183. The first sentence of Article 9.2 provides:
When an anti-dumping duty is imposed in respect of any product, such anti -dumping
duty shall be collected in the appropriate amounts in each case, on a
non-discriminatory basis on imports of such product from all sources found to be

for [[***]] by 0.18% to address the overstatement of income tax expenses. (Indonesia's first written
submission, paras. 295-298).
367 The EU authorities recognized that hedging losses of [[***]] had been deducted as an allowance,
while hedging gains of [[***]] were not taken into account, in constructing the export price. The EU authorities
determined that the export price should reflect the price actually paid or payable for the product when sold for
export exclusive of any gain or loss related to hedging practices. Therefore, the EU authorities increased the
export price of [[***]] by the amount of hedging losses that were treated as an allowance. (Definitive
Disclosure, (Exhibit IDN-7), recitals 74-75; Specific Definitive Disclosure for [[***]], Annex 2 D (1 October
2013), (Exhibit IDN-27 (BCI)), p. 4 ("The hedge allowance was not considered part of the export price. As
stated in Article 2(8) of the Basic Regulation, the export price shall be the price actually paid or payable for the
product when sold for export from the exporting country to the EU. Therefore the hedge allowance as indicated
in the column 'other allowances' was now eliminated from the dumping calculation."))
368 P.T. Musim Mas, Comments on Definitive Disclosure, (Exhibit IDN-17 (BCI)), paras. 2.2 and 21-22.
369 P.T. Musim Mas, Comments on Definitive Disclosure, (Exhibit IDN-17 (BCI)), paras. 2.2 and 23.
370 Definitive Regulation, (Exhibit IDN-2), recitals 76, 96, and 102.
371 Definitive Regulation, (Exhibit IDN-2), recital 227.
372 Definitive Regulation, (Exhibit IDN-2), recital 215.
373 See paras. 7.177. -7.178. above.

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dumped and causing injury, except as to imports from those sources from which price
undertakings under the terms of this Agreement have been accepted.
7.184. The chapeau of Article 9.3 reads: "The amount of the anti -dumping duty shall not exceed
the margin of dumping as established under Article 2".
7.185. In addressing Indonesia's claims, we consider it necessary to first clarify the precise nature
of the findings sought by Indonesia. In its first submission, Indonesia framed its claims in respect
of the fact that the EU authorities improperly applied provisional measures to P.T. Musim Mas, and
thereafter definitively collected the provisional anti -dumping duty. 374 Indonesia argued, for
instance, that an investigating authority cannot simply disregard the d isciplines contained in
Article 2 of the Anti-Dumping Agreement and impose and subsequently collect duties that exceed a
provisionally estimated margin of dumping. In this respect, Indonesia argued that the language
"provisionally estimated" in Article 7.2 cannot be understood as pe rmitting an investigating
authority to make "clear cut and apparent " violations of Article 2.375 Indonesia submits that, if this
were the case, this would defeat the purpose of imposing a limitation that provisional measures
should not exceed the provisional ly estimated margin of dumping. 376 Indonesia argues that
corrections must be retroactive because, if investigating authorities were allowed to definitively
collect provisional duties in excess of the actual provisional dumping margin, investigating
authorities could circumvent the requirements of Article 7.2 (and Articles 9.2 and 9.3) by making
errors when calculating the provisional dumping margin and thereafter collect those duties at the
definitive stage.377
7.186. Following its first written submission, Indonesia made several subsequent clarifications
regarding its claims. At the first substantive meeting with the Panel, for instance, Indonesia
indicated that it does not challenge the provisionally estimated dumping margin and the imposition
of the provisional duties " as such", but explained rather that Indonesia "does not agree with the
definitive determination made in the Definitive Regulation to collect a provisional duty which the
EU knew was erroneous and in exc ess of the real dumping margin that should have been
determined at the provisional stage ".378 Indonesia further indicated that it does not seek to
challenge the Provisional Regulation but "rather that part of the Definitive Regulation that ordered
the definitive collection of the provisional duties ".379 Subsequently, in response to a question from
the Panel, Indonesia specified that it "only seeks a finding of the Panel with respect to the
definitive collection of [the provisional duties applied to P.T. Musim M as] in the Definitive
Regulation".380
7.187. From the outset, the European Union has maintained that In donesia's claims under
Articles 7 and 9 are misconceived in light of Indonesia's clarification that its challenge is directed at
the definitive collection of provisional duties as opposed to any findings related to the imposition of
provisional measures contained in the Provisional Regulation. T he European Union considers that
this is confirmed by the fact that Indonesia has identified as the pertinent measure the Definitive
Regulation that ordered the definitive collection of the provisional duties . The European Union
submits that the relevant obligations governing the definitive collection of provisional anti-dumping
duties are contained in Articles 10.3 and 10.5 of the Anti -Dumping Agreement. The
European Union contends that the EU authorities respected the obligation contained in Article 10.3
when collecting provisional duties that were secured for P.T. Musim Mas and therefore, Indonesia's
claims should be rejected.381
7.188. In light of the clarifications by Indonesia, we understand that Indonesia's challenge is
limited to whether the definitive collection of provisional duties applied to P.T. Musim Mas was in
any way inconsistent with the cited provisions of Article 7 or 9 of the Anti-Dumping Agreement. As

374 See, e.g. Indonesia's first written submission, para. 285.
375 Indonesia's first written submission, paras. 323-324.
376 Indonesia's first written submission, para. 326.
377 Indonesia's first written submission, para. 340.
378 Indonesia's opening statement at the first meeting of the Panel, para. 59. (emphasis original)
379 Indonesia's opening statement at the first meeting of the Panel, para. 59.
380 Indonesia's response to Panel question No. 61, para. 95.
381 European Union's first written submission, para. 129; opening statement at the first meeting of the
Panel, para. 48; response to Panel question No. 50, para. 78; and second written submission, paras. 63-64
(referring to Indonesia's responses to Panel question No. 55, para. 89, and No. 61, para. 95). See also
responses to Panel question Nos. 112, 114, 115, 117, 118, 120, and 121.

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Indonesia has clarified that it is not challenging the fact that the EU authorities imposed
provisional duties on P.T. Musim Mas pursuant to findings contained in the Provisional Regulation –
nor has Indonesia challenged in any way the right of the European Union to impose provisional
measures – we need not address issues related to the application, or imposition of provisional
measures. In this regard, it follows therefore, that Indonesia may establish its clai ms to the extent
that the cited provisions in Articles 7 and 9 are pertinent to the definitive collection of provisional
duties.
7.189. It is evident on the face of its various subparagraphs that Article 7 addresses the
imposition, or application of provisional measures. Article 7.1 expressly refers to situations in
which provisional measures may be applied (stating that "Provisional measures may only be
applied if:"). In turn, Article 7.2 addresses the form which provisional measures that are applied
may take, i ncluding provisional duties or security equal to the amount of the duty provisional ly
estimated, subject to the requirement that any duty or security taken does not exceed the
provisionally estimated margin of dumping. Articles 7.3 and 7.4 address the peri od of application
of provisional measures. Article 7.3 states that "[p]rovisional measures shall not be applied sooner
than 60 days from the date of initiation of the investigation". Article 7.4 indicates that "[t]he
application of provisional measures sha ll be limited to as short a period as possible …" Finally,
Article 7.5 indicates that "[t]he relevant provisions of Article 9 shall be followed in the application
of provisional measures".382
7.190. At the provisional stage, the EU authorities calculated a 2.8% provisional dumping margin
for P.T. Musim Mas and subsequently ordered the imposition of provisional measures in respect of
imports by P.T. Musim Mas.383 This determination is contained in the Provisional Regulation, which
Indonesia has indicated that it does n ot challenge. We recall that Indonesia has requested us to
make findings only in respect of the definitive collection of those duties. Article 7.2 addresses the
form and amount that provisional measures that are imposed may take, but does not address the
definitive collection of those duties. As this is the case, we agree with the view o f the
European Union that Indonesia's claim under Article 7.2 as concerning the definitive collection of
duties is misplaced. We therefore find that there is no basis to consider Indonesia's claims under
Article 7.2 of the Anti -Dumping Agreement as concerns the definitive collection of provisional
anti-dumping duties on imports from P.T. Musim Mas.
7.191. In addition, we find there is no basis for Indonesia's claim under Article 7.1 (ii) of the
Anti-Dumping Agreement because we consider that Indonesia's claim under Article 7.1(ii) is also
dependent on the findings contained in the Provisional Regulation. The
EU authorities' determination that a preliminary affirmative determination has been made of
dumping for P.T. Musim Mas is based on those same findings.
7.192. We next consider the relevance of Indonesia's claims under Article 9.2 and the chapeau of
Article 9.3 of the Anti -Dumping Agreement. Indonesia first claims that the European Union acted
inconsistently with Article 9.2 of the Anti -Dumping Agreement because the EU authorities did not
definitively collect provisional anti -dumping duties in the "appropriate amounts", as required by
the first sentence of Article 9.2.
7.193. According to Indon esia, the term "appropriate amount s" in Article 9.2 is informed by the
provisions of Articles 7.2, 9.3 , and 10.3 of the Anti -Dumping Agreement. An appropriate amount
that is collected may not exceed the amount of the provisionally estimated margin of dumping that
is determined consistently with Article 2 of the Anti -Dumping Agreement. Indonesia acknowledges
that, once the definitive findings have been made, the amount of the provisional duty that is
definitively collected must comply with the requirement in Article 10.3 of the
Anti-Dumping Agreement. In particular, in cases where the definitive duty is lower than the
provisional duty paid or payable, or the amount established for the purpose of the security that is
taken, the difference shall be reimbursed o r the duty recalculated, as relevant to the
circumstances.384 However, Indonesia argues that the requirement to definitively collect
provisional anti-dumping duties in appropriate amounts cannot be set aside due to the fact that an
investigating authority made calculation errors that led to a higher provisionally estimated margin

382 Emphasis added.
383 Provisional Regulation, (Exhibit IDN-1), recitals 60-79 and 173-182.
384 Indonesia's first written submission, paras. 353-354.

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of dumping at the provisional stage, or the fact that the definitive duty is ultimately higher than
the provisional duty.385
7.194. Indonesia considers that the appropriateness of the duty in the context of
provisional measures can be inferred from the requirement in the fir st sentence of Article 7.2
that the provisional duty cannot be greater than the provisionally estimated margin of dumping. 386
In addition, Indonesia cites the definition of "appropriate" that was referred to by the panel in EC –
 Salmon (Norway), as "specially suitable (for to); proper fitting".387 Thus, an "'appropriate' amount
of anti-dumping duty must be an amount that results in offsetting or preventing dumping".388
7.195. Indonesia also claims that the European Union acted inconsistently with the chapeau of
Article 9.3 of the Anti -Dumping Agreement. Indonesia argues that the chapeau of Article 9.3 is
equally applicable to the imposition and definitive collection of provisional anti -dumping duties,
and a violation results from the fact that the provisional anti-dumping duty that was applied to and
definitively collected from P.T. Musim Mas was in fact higher than the provisional ly estimated
margin of dumping determined consistently wit h Article 2 of the Anti -Dumping Agreement. 389
Indonesia submits that the chapeau of Article 9.3 sets the ceiling for the imposition and collection
of anti-dumping duties.390
7.196. The European Union argues that Indonesia 's claims under Article 9 .2 and the chapeau of
Article 9.3 should fail . The European Union contends that the EU authorities' preliminary
determination of dumping in respect of P.T. Musim Mas was not based on a "flawed calculation"
but was in fact a provisional estimate within the meaning of Article 7.2.391 Therefore, the
European Union argues that Indonesia has not established that the amount of the anti -dumping
duty provisionally estimated was greater than the provisionally estimated margin of dumping and
Indonesia cannot establish that the duties th at were collected were not in an appropriate
amount.392 In addition, the European Union argues that Indonesia has failed to take into account
that the definitive duty has been found to be higher than the provisional duty paid or payable ,
which triggers the o bligations contained in Articles 10.3 and 10.5. According to the first sentence
of Article 10.3, the European Union submits that any amount estimated for the purpose of the
security need not be released if the definitive duty is higher than the p rovisional duty paid or
payable.393 The European Union submits that it respected this obligation by not collecting the
difference between the definitive and provisional duties.394
7.197. We note that Article 9 is entitled "Imposition and Collection of Anti -Dumping Duties". We
recall that Article 7.5 of the Anti -Dumping Agreement provides that "[t]he relevant provisions of
Article 9 shall be followed in the application of provisional measures". Thus, according to
Article 7.5, we understand that certain provisions of Article 9 co ncerning either the imposition or
collection of anti -dumping duties may be relevant in respect of the application of provisional
measures. This may include, for instance, the decision whether or not to impose anti -dumping
duties in cases where all requirem ents for imposition have been fulfilled, or the decision whether
the amount of the duty to be imposed shall be the full margin of dumping or less, as set out in
Article 9.1. Article 9.2 indicates that anti-dumping duties that are imposed shall be collected in the
appropriate amounts in each case , on a non-discriminatory basis on imports of such product from

385 Indonesia's first written submission, para. 357.
386 Indonesia's first written submission, para. 355.
387 Indonesia's first written submission, para. 356 (referring to Panel Report, EC – Salmon (Norway),
para. 7.704).
388 Panel Report, EC – Salmon (Norway), paras. 7.704-7.705.
389 Indonesia's first written submission, paras. 349-350.
390 Indonesia's first written submission, para. 348 (referring to Appellate Body Reports, US – Zeroing
391 See, e.g. European Union's first written submission, paras. 131-133.
392 European Union's first written submission, paras. 143-148; response to Panel question No. 57,
para. 84.
393 Article 10.3 of the Anti-Dumping Agreement provides:
If the definitive anti -dumping duty is higher than the provisional duty paid or payable, or the
amount estimated for the purpose of the security, the difference shall not be collected. If the
definitive duty is lower than the provisional duty paid or payable, or the amount estimated for
the purpose of the security, the difference shall be reimbursed or the duty recalculated, as the
case may be.
394 European Union's second written submission, para. 65; responses to Panel question No. 47, para. 74,
and No. 49, para. 77. See also response to Panel questions Nos. 51 and 52.

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all sources found to be dumped and causing injury, except as to imports from those sources from
which price undertakings have been accepted .395 The chapeau of Article 9.3 provides that the
amount of anti -dumping duties shall not exceed the margin of dumping as established under
Article 2. The European Union does not dispute that Article 9.2 and the chapeau of Article 9.3 may
be relevant in respect of provisional measures.396
7.198. In our view, the definitive collection of the provisional duties paid or payable is governed
under either Article 10.3 or 10.5 of the Anti -Dumping Agreement. Pursuant to the first sentence of
Article 10.3 if the definitive anti -dumping du ty is higher than the provisional duties paid or
payable, or the amount estimated for the purpose of the security, the difference shall not be
collected. It may be inferred from this provision that any provisional duty or security that has been
collected or otherwise secured by a cash deposit or bond is confirmed . On the other hand , the
second sentence of Article 10.3 provides that where the definitive duty is lower than the
provisional duties or security collected or secured, the difference must be reimbursed or the duty
recalculated, as the case may be. As to Article 10.5, it states that any cash deposit made or bonds
collected must be released expeditiously in cases where a final determination is negative.
7.199. In the circumstances of this dispute, the EU auth orities ordered the definitive collection of
the provisional duty that had been provisionally secured on the basis that the definitive duty
calculated was higher than the provisional duty .397 We agree with the European Union's argument
that this approach is consistent with the obligation contained in Article 10.3 of the Anti -Dumping
Agreement.
7.200. We disagree with Indonesia's argument that the EU authorities failed to collect duties in
"appropriate amounts" within the meaning of Article 9.2 of the Anti-Dumping Agreement. We recall
that, pursuant to Article 7.5 of the Anti-Dumping Agreement, certain provisions of Article 9 may be
relevant to "the application of provisional measures". Yet, when referring to Article 9.2 we note
that the provision indicates that anti -dumping duties shall be imposed and collected in the
"appropriate amounts" in each case while Article 7 governs t he application of provisional
measures.398 At the time of the application of provisional measures, Article 7.2 specifically allows
for the collection of a provisional duty or otherwise the collection of security in the form of a cash
deposit or bond. In either case, the amount that is collected shall not exceed the provisionally
estimated margin of dumping. In this case, the EU authorities collected security equal to the
margin of dumping that had been calculated at the provisional stage . In this sense, we do not see
how the European Union failed to impose or collect duties in the appropriate amount at the time of
the applicatio n of provisional measures . Article 9.2 cannot be interpreted without regard to
Article 10.3 of the Anti-Dumping Agreement. The definitive collection of provisional duties occurred
at the definitive stage following the correction of the errors that had been identified by P.T. Musim
Mas. In the Definitive Regulation, the EU authorities ordered the definitive collection of the
provisional duty consistently with the obligation in the first sentence of Article 10.3 of the
Anti-Dumping Agreement, i.e. the EU auth orities confirmed the provisional measures and did not
collect the difference between the amount estimated for the purpose of the security and the
definitive duty that was determined to be higher . We therefore reject Indonesia's claim under
Article 9.2 of the Anti-Dumping Agreement.
7.201. We further disagree with Indonesia's argument that the definitive collection of provisional
duties is inconsistent with the obligation in the chapeau of Article 9.3 of the Anti -Dumping
Agreement that the amount of the anti -dumping duty shall not exceed the margin of dumping as

395 A panel previously found that the provision "sources found to be dumped" in Article 9.2 is applicable
in respect of provisional measures. (Panel Report, Canada – Welded Pipe, para. 7.77).
396 See, e.g. European Union's first written submission, para. 144 ("Indonesia also raises consequential
claims under Articles 9.3 and 9.2 of the Anti-Dumping Agreement, which apply mutatis mutandis to provisional
measures as per Article 7.5 of the Anti-Dumping Agreement".) We note that the European Union has argued
that Indonesia should have brought a claim with respect to the provisional determination under Article 2 of the
Anti-Dumping Agreement. (European Union's response to Panel question No. 49, para. 77; second written
submission, para. 68). We do not exclude that a party may choose to bring a claim directly under Article 2 in
relation to provisionally estimated dumping margin or the imposition of the provisional duties. However, we do
not consider the fact that Indonesia did not bring a claim under Article 2 prevents us from addressing its claims
under Article 9 in relation to the provisional measures imposed on P.T. Musim Mas.
397 Definitive Regulation, (Exhibit IDN-2), recital 227.
398 We recall that Articles 7.1, 7.3, 7.4, and 7.5 all refer to the application of provisional measures, while
Article 7.2 addresses the form which provisional measures that are applied may take.

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established under Article 2.399 We consider that the chapeau of Article 9.3 is relevant in respect of
the application of provisional measures , by virtue of Article 7.5 of the Anti -Dumping Agreement.
This means the obligation is relevant at the time of the application of provisional measures . We
understand Indonesia's claim under the chapeau of Article 9.3 is based on the same issue
underlying its claim under Article 9.2, specifically, that the provisional anti -dumping duty applied
to and definitively collected from P.T. Musim Mas was in fact higher than the provisional margin of
dumping determined consistently with Article 2 of the Anti -Dumping Agreement. As noted above,
at the time of imposition of provisional measures, pursuant to the first sentence of Article 7.2, the
amount of provisional duty that is imposed, or security that is taken shall not exceed the
provisionally estimated margin of du mping. The EU authorities collected security equal to the
margin of dumping that had been estimated at the provisional stage, and in this sense, the
provisional duty amount did not exceed the margin of dumping at the time of application of the
provisional measures. We therefore reject Indonesia's claim under the chapeau of Article 9.3 of the
Anti-Dumping Agreement.
7.202. Finally, in the context of addressing Indonesia's claims, we recall our findings in
Sections 7.3.3 and 7.3.4 above that the European Union acted inconsistently with
Articles 2.2.1.1 and 2.2 of the Anti -Dumping Agreement and with Article VI:1(b)(ii) of the
GATT 1994 in establishing the dumping margins in the Definitive Regulation . This was due to the
use of surrogate input prices in the construction of normal value for investigated Indonesian
producers. We have observed that the substantial difference between the provisional and definitive
duties is attributable to the change in the basis f or constructing the normal value at the definitive
stage of the investigation .400 Had the European Union not substituted the recorded costs of
producers the definitive duties for affected producers would not have been substantially higher
than the provisiona l duties , if at all . Indonesia has submitted evidence in this proceeding to
demonstrate that the provisional dumping margin for P.T. Musim Mas would have been negative, -
0.42%, had the EU authorities not committed the errors that are the subject of the pre sent claim.
The European Union has not contested this evidence. 401 This evidence before us thus supports the
conclusion that the definitive anti-dumping duty rate for P.T. Musim Mas would have been negative
had the European Union not changed the basis for co nstructing the normal value at the definitive
stage. This in turn presumably would have had implications for the implementation of the relevant
provision under Article 10.3 of the Anti -Dumping Agreement. We therefore note that our findings
made in respect of Articles 2.2.1.1 and 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii)
of the GATT 1994 are relevant to Indonesia's claims.
7.8.4 Conclusions
7.203. We have addressed claims raised by Indonesia under Articles 7.1(ii), 7.2, 9.2 , and the
chapeau of Article 9.3 of the Anti -Dumping Agreement, in relation to the European Union's
determination of a p rovisional margin of dumping for P.T. Musim Mas that led to the subsequent
application of provisional duties to P.T. Musim Mas and the definitive collection of those duties. As
set out above, we find that Indonesia has failed to establish a basis for its claims under Articles 7.2

399 We note that Indonesia has argued that the "basis" of its claim is that the provisional dumping
margin was not calculated in compliance with the disciplines set out in Article 2 of the Anti-Dumping
Agreement. (Indonesia's response to Panel question No. 61, para. 95). However, Indonesia has not identified
particular provisions in Article 2 in respect of its claim, nor has Indonesia presented arguments in this
proceeding in respect of how the errors made in constructing the normal value and export price violated
particular obligations contained in the provisions of Article 2 of the Anti-Dumping Agreement.
400 See para. 7.172. above.
401 Indonesia's first written submission, paras. 286 and 288; response to Panel question No. 119;
P.T. Musim Mas dumping margin calculation by the European Union at the time of the final disclosure in the
original investigation, (Exhibit IDN-37 (BCI)); and P.T. Musim Mas dumping margin calculation by Indonesia,
(Exhibit IDN-38 (BCI)). Indonesia's calculation is additionally confirmed in the disclosure that was submitted as
Exhibit IDN-36 in this proceeding. We recall that the European Commission initiated a review of the
anti-dumping measures imposed on imports of biodiesel originating in Argentina following the adoption of the
panel and Appellate Body reports in the EU – Biodiesel (Argentina) dispute. In its notice of initiation of the
review, the European Commission indicated that it also considered it appropriate to review the anti-dumping
measures imposed on imports of biodiesel from Indonesia. (See para. 2.3. above). In the disclosure, the EU
authorities recalculated the normal value for Argentine and Indonesian producers, including P.T. Musim Mas
based on the actual costs of the main raw materials as contained in the producer/exporter records. Although
the content of this disclosure does not constitute a final determination, recitals 40 and 87 confirm that the final
definitive anti-dumping duty rate for P.T. Musim Mas would have been de minimis or zero. (See also
European Union's response to Panel question No. 120).

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and 7.1(ii) of the Anti -Dumping Agreement as concerns the definitive collection of provisional
anti-dumping duties on imports from P.T. Musim M as, in the view that Indonesia does not
challenge findings related to the imposition of provisional measures contained in the Provisional
Regulation. In addition, we reject Indonesia's claims that the European Union ac ted inconsistently
with Article 9.2 or the chapeau of 9.3 of the Anti-Dumping Agreement.
8 CONCLUSIONS AND RECOMMENDATION
8.1. For the reasons set forth in this Report, the Panel concludes as follows:
a. the European Union acted inconsistently with Article 2.2.1.1 of the Anti -Dumping
Agreement by failin g to calculate the cost of production of the product under
investigation on the basis of the records kept by the producers; we do not reach findings
as to whether, as a consequence, the European Union ac ted inconsistently with
Article 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994;
b. the European Union acted inconsistently with Article 2.2 of the Anti -Dumping Agreement
and Article VI:1(b)(ii) of the GATT 1994 by using a "cost" for the main input that was not
the cost prevailing "in the country of origin", Indonesia;
c. the European Union acted inconsistently with Article s 2.2.2(iii) and 2.2 of the
Anti-Dumping Agreement by failing to determine "the profit normally realized by other
exporters or prod ucers on sales of products of the same general category in the
domestic market of the country of origin"; we reject Indonesia's request that we find
that the European Union additionally acted inconsistently with Article 2.2.2(iii) because
the European Unio n failed to determine the amount for profit based on a "reasonable
method" within the meaning of Article 2.2.2(iii) of the Anti-Dumping Agreement;
d. the European Union acted inconsistently with Article 2.3 of the Anti -Dumping Agreement
by failing to construct the export price of one Indonesian exporting producer, P.T. Musim
Mas, on the basis of the price at which the imported biodiesel produced by P.T. Musim
Mas was first resold to independent buyers in the European Union;
e. Indonesia has not established that t he European Union act ed inconsistently with
Articles 3.1 and 3.2 of the Anti -Dumping Agreement, by relying on prices of CFPP 13
biodiesel produced by the EU industry in calculating an adjustment to the price of
Indonesian imports;
f. the European Union acted inconsistently with Articles 3.1 and 3.2 of the Anti -Dumping
Agreement, by failing to establish the existence of significant price undercutting with
regard to Indonesian imports;
g. the European Union acted inconsistently with Article 9.3 of the Anti -Dumping Agreement
and Article VI:2 of the GATT 1994 by imposing anti -dumping duties in excess of the
margins of dumping that should have been established under Article 2 of the
Anti-Dumping Agreement and Article VI:1 of the GATT 1994, respectively;
h. Indonesia has not established that the European Union acted inconsistently with
Article 7.1(ii) of the Anti-Dumping Agreement because it applied provisional measures to
P.T. Musim Mas based on a WTO inconsistent preliminary determination of the existence
of dumping for P.T. Musim Mas;
i. Indonesia has not established that the European Union acted inconsistently with
Article 7.2 of the Anti -Dumping Agreement because it applied to P.T. Musim Mas a
provisional anti -dumping duty in excess of the provisionally estimated margin o f
dumping for P.T. Musim Mas;
j. Indonesia has not established that the European Union acted inconsistently with
Article 9.2 of the Anti -Dumping Agreement because the provisional anti -dumping duty
that was applied to P.T. Musim Mas and definitively collected was not in an "appropriate
amount", within the meaning of Article 9.2; and

BCI deleted, as indicated [[***]]

k. Indonesia has not established that the European Union acted inconsistently with
Article 9.3 of the Anti-Dumping Agreement by applying to P.T. Musim Mas and
definitively collecting a provisional anti -dumping duty in excess of the provisionally
estimated margin of dumping for this exporting producer.
8.2. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. We conclude that, to the extent that the measures at issue are
inconsistent with the Anti-Dumping Agreement and the GATT 1994, they have nullified or impaired
benefits accruing to Indonesia under these agreements.
8.3. Pursuant to Article 19.1 of the DSU, we recommend that the European Union bring its
measures into conformity with its obligations under the Anti -Dumping Agreement and the
GATT 1994. Indonesia requests that we use our disc retion under the second sentence of the same
article to suggest ways in which the European Union should bring its measures into conformity
with the Anti -Dumping Agreement and the GATT 1994. Indonesia considers that the measures at
issue in this dispute sho uld be withdrawn. We decline to exercise our discretion under the
second sentence of Article 19.1 of the DSU in the manner requested by Indonesia.