EUROPEAN UNION – ANTI-DUMPING MEASURES ON IMPORTS OF FATTY ACID FROM INDONESIA REQUEST FOR CONSULTATIONS BY INDONESIA
Document: REQUEST FOR CONSULTATIONS BY
Date: 12 February 2024
Document codes: WT/DS622/1; G/ADP/D144/1; S/L/481
Complainant: Indonesia
Respondent: EU
Dispute stage: Consultation
Agreements cited: Art. 2.2, 2.2.2, 2.4.1, 3.1, 3.4, 5.3, 5.4, 5.6, 5.8  Anti-dumpingArt. VI:1, X:3(a)  GATT 1994

EUROPEAN UNION – ANTI-DUMPING MEASURES ON IMPORTS OF FATTY ACID
FROM INDONESIA
REQUEST FOR CONSULTATIONS BY INDONESIA
The following communication, dated 7 February 2024, from the delegation of Indonesia to the
delegation of the European Union, is circulated to the Dispute Settlement Body in accordance with
Article 4.4 of the DSU.

I. FACTUAL BACKGROUND AND THE MEASURES AT ISSUE
A. Fatty acid investigations
1. Fatty acid anti-dumping investigation
a. Initiation of the investigation
3. On 18 October 2021, the Coalition against Unfair Trade in Fatty Acid (CUTFA) lodged a
complaint pursuant to Article 5 of Regulation (EU) 2016/1036 of the European Parliament and of the
Council (Basic Anti-Dumping Regulation)2 with the European Commission (Commission) requesting
an initiation of an anti -dumping investigation. That complaint alleged that imports of fatty acid
originating in Indonesia were sold in the European Union at dumped prices and caused material
injury to the Union industry.
4. On 30 November 2021, the Commission published a "Notice of initiation of an anti -dumping
proceeding concerning imports of fatty acid originating in Indonesia" 3 in the Official Journal of the
European Union, whereby it initiated an investigation with a view to imposing anti -dumping duties

1 Commission Implementing Regulation (EU) 2023/111 of 18 January 2023 imposing a definitive
anti-dumping duty on imports of fatty acid originating in Indonesia, Official Journal of the European Union,
OJ 2023 L 18, p. 1 (Definitive Anti-Dumping Regulation).
2 Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on
protection against dumped imports from countries not members of the European Union, 2016 OJ L 176, p. 21.
3 Notice of initiation of an anti-dumping proceeding concerning imports of fatty acid originating in
Indonesia, 2021 OJ C 482, (Notice of Initiation), p. 5.
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on imports of certain fatty acid products. The investigation was initiated on the basis of the complaint
made by CUTFA, on behalf of the Union industry of fatty acid, in the sense of Article 5(4) of the Basic
Anti-Dumping Regulation. The Commission considered that the complaint contained evidence of
dumping and of resulting material injury that was sufficient to justify the initiation of the
investigation.4 The investigation of dumping and injury covered the period from 1 October 2020 to
30 September 2021 (i.e., the investigation period). The examination of trends relevant for the
assessment of injury covered the period from 1 January 2018 to the end of the investigation period
(i.e., the period considered).
b. Product under investigation
5. The product under investigation described in the Notice of Initiation covers fatty acid with a
carbon chain length of C6, C8, C10, C12, C14, C16 or C18 with an iodine value below 105g/100g
including: single fatty acid (also referred to as "pure cut"), and blends containing a combination of
two or more carbon chain lengths5; and, excluding fatty acid certified by a voluntary scheme for the
production of sustainable biofuels, bioliquids and biomass fuels recognised by the Commission.6
6. Following comments received from the parties, the Commission issued on 21 January 2022 a
Note to the File regarding the product scope (Note to File on Product Scope). That note clarified that
the investigation covered only fatty acid with a ratio of free fatty acids to triglycerides (degree of
split – DoS) of at least 97%.7 The product concerned is the product under investigation originating
in Indonesia.8
c. Withdrawal of the complaint
7. On 15 August 2022, KLK Emmerich GmbH (KLK), the largest sampled Union producer, sent a
letter to the Commission expressing its concern that anti-dumping duties would cause turbulence on
the fatty acid market.9 On 19 August 2022, KLK sent another letter to the Commission informing it
that the company opposes the imposition of anti -dumping duties because it considers those duties
to be against the interest of the company and of the Union industry in general. 10 It stated that
"Europe ne eds to maintain a competitive environment for fatty acids in the interest of all
stakeholders". KLK also noted that it was able to stay competitive and profitable with imports of the
product concerned from Indonesia.11
8. On 24 August 2022, CUTFA withdrew it s anti-dumping complaint, "due to the influence from
stakeholders".12 Interested parties filed comments on the withdrawal of the complaint,13 requesting
the Commission to terminate the investigation in light of the lack of Union interest as well as the
lack of injury to the Union industry, as apparent from the withdrawal of the complaint and KLK 's
letters of 15 and 19 August 2022.14
d. Imposition of the definitive anti-dumping measures
9. The Commission decided not to impose provisional measures. On 1 July 2022, the Commission
informed the Member States and all interested parties that no provisional duties would be imposed
on imports of fatty acid originating in Indonesia, and that the investigation would continue.15
10. On 18 January 2023, the European Union adopted a regulation imposing a definitive anti -
dumping duty on imports of fatty acid originating in Indonesia (Definitive Anti-Dumping Regulation).
The Definitive Anti-Dumping Regulation imposes anti-dumping duties ranging from 15.2% to 46.4%

4 Definitive Anti-Dumping Regulation, recital 2.
5 Notice of Initiation, recital 2.
6 Definitive Anti-Dumping Regulation, recitals 70,101-102, Article 1.
7 European Commission, Note to the File for the Inspection by Interested Parties - Clarifications on the
product scope, restart of sampling process and procedural aspects (21 January 2022), Ref t22.000602.
8 Definitive Anti-Dumping Regulation, recital 74.
9 Letter KLK 15 August 2022.
10 Letter KLK 19 August 2022.
11 Letter KLK 19 August 2022.
12 Letter - withdrawal of anti-dumping complaint on behalf of CUTFA.
13 Definitive Anti-Dumping Regulation, recital 62.
14 Musim Mas letter regarding withdrawal of complaint, 24 August 2022, p. 1.
15 Definitive Anti-Dumping Regulation, recitals 55-56.
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on imports into the European Union of fatty acid originating in Indonesia. These anti-dumping duties
are due to expire on 20 January 2028.
11. Definitive anti-dumping duties were set at the level of the dumping margin for two Indonesian
producers (Wilmar and Musim Mas) at 15.2% and 46.4% respectively.16 The definitive duty for the
other cooperating non -sampled companies in Indonesia was based on the weighted average
dumping margin for those two sampled companies, at 26.6%. The definitive duty for all other
companies was based on the highest dumping margin of the two sampled cooperating exporters, at
46.4%.17
2. Fatty acid anti-subsidy investigation
12. On 13 May 2022, the Commission initiated a separate anti -subsidy investigation concerning
imports of fatty acid originating in Indonesia following a complaint made by CUTFA.18 The fatty acid
anti-dumping and anti-subsidy investigations share the same product scope, the same investigation
period and the same period considered.19
13. On 24 August 2022, KLK sent a letter to the Commission expressi ng its opposition to the
imposition of countervailing measures on imports of the product concerned from Indonesia.20
14. On 3 October 2022, CUTFA withdrew its anti-subsidy complaint.21
15. Consequently, the Commission terminated the fatty acid anti-subsidy investigation on
21 December 2022.22 The decision to that effect was published by the Commission on
20 March 2023.23 In that decision, the Commission referred to the withdrawal of the complaint and
stated that "[t]he investigation had not brought to light any considerations demonstrating that such
termination would not be in the Union interest".24
B. EU methodology for constructing normal value based on PCN-specific costs and
profit data
16. In EU anti-dumping investigations, the product concerned is typically subdivided into several
models designated by product control numbers (PCNs). The normal value and the export price are
computed for each PCN and the comparison between normal value and export price is carried out
on a PCN-basis.
17. When the normal v alue cannot be established based on the domestic sales prices in the
exporting country, the European Union resorts to a constructed normal value based on the cost of
production plus a reasonable amount for administrative, selling and general (SG&A) costs a nd for
profits.
18. Pursuant to Article 2(6) of the Basic Anti -Dumping Regulation, which mirrors the text of
Article 2.2.2 of the Anti -Dumping Agreement, "the amounts for selling, for general and
administrative 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 under investigation".

16 Definitive Anti-Dumping Regulation, recitals 487-488.
17 Definitive Anti-Dumping Regulation, recitals 489.
18 Notice of initiation of an anti-subsidy proceeding concerning imports of fatty acid originating in
Indonesia, 2022 OJ C 195, p. 11. The EU case number of the anti-subsidy investigation is AS688.
19 Definitive Anti-Dumping Regulation, recital 54.
20 Letter KLK 24 August 2022.
21 Letter withdrawal of anti-subsidy complaint on behalf of CUTFA.
22 General Disclosure Document AS688 – Anti-subsidy proceeding concerning imports of fatty acid
originating in Indonesia.
23 Commission Implementing Decision (EU) 2023/617 of 17 March 2023 terminating the anti-subsidy
proceeding concerning imports of fatty acid originating in Indonesia, 2023 OJ L 80, p. 99.
24 Anti-subsidy termination decision, recitals 9-11.
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19. If the domestic sales volume of certain PCNs constitute less than 5% of the total volume of
the same PCNs sold to the European Union, the European Union applies a PCN -specific profitability
test to determine the methodology for constructing the normal value of those PCNs:
• when a PCN has no profitable sales during the entire investigation period, the amounts
for SG&A and for profit used to construct normal value of that PCN are based on
weighted average of all profitable domestic sales of the exporting producer (first
methodology);
• when a PCN has some profitable sales (even very minor) during the investigation period,
the amounts for SG&A and for profit used to construct normal value of that PCN are
based on weighted average of the profitable domestic sales of that PCN only (second
methodology).
20. The second methodology, whereby the Commission uses exclusively the data re lating to the
specific PCN, is consistently applied by the Commission in its anti-dumping investigations, including
the fatty acid anti-dumping investigation. It is evidenced by the findings of previous investigations
and is also reflected in the OASYS cal culation file, included in the company -specific disclosure files
in each EU anti-dumping investigation, which shows the different steps followed by the Commission
when calculating normal value.
C. The measures at issue
21. The measures at issue in this dispute cover the definitive anti-dumping measures imposed by
the European Union on imports of fatty acid originating in Indonesia, and the investigation leading
to the imposition of those measures. They include any amendments, supplements, reviews,
replacements, renewals, extensions, implementing measures and any other related measures taken
by the European Union in relation to the investigation and/or the anti -dumping measures at issue.
The measures at issue also include the European Union's decision of 21 December 2022 to terminate
the anti-subsidy investigation, as published on 20 March 2023.
22. Furthermore, the measures at issue cover the EU methodology for constructing normal value
based on PCN-specific costs and profit data for PCNs sold in non -representative quantities on the
domestic market of the exporting country, as explained in Section B above.
II. LEGAL BASIS FOR THE COMPLAINT
23. Indonesia considers that the definitive anti -dumping measures imposed by the European
Union on imports of fatty acid originating in Indonesia and the investigation leading to the imposition
of those measures appear to be inconsistent with the following obligations in the relevant WTO
covered agreements:
▪ Articles 5.3 and 5.8 of the Anti -Dumping Agreement because the Europ ean Union failed to
reject the application based on a determination that the application was supported by
insufficient evidence of injury, particularly as a result of the deficient product scope included
in the application.
▪ Article 5.4 of the Anti -Dumping Agreement because the European Union failed to reject the
application or terminate the investigation despite the lack of standing of the domestic industry.
▪ Article 5.6 of the Anti -Dumping Agreement, because – following the withdrawal of the
complaint – the European Union de facto carried out an ex officio investigation, without
sufficient evidence of dumping, injury and a causal link.
▪ Articles 2.2 and 2.2.2 of the Anti-Dumping Agreement because when constructing the normal
value of PCNs sold in insufficient quantities in the domestic market, the European Union used
amounts for SG&A costs and for profit which are not reasonable and are not based on actual
data pertaining to production and sales in the ordinary course of trade of the like product by
the exporter or producer under investigation.
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▪ Article 2.4.1 and Article 9.3 of the Anti -Dumping Agreement, as well as Article VI:2 of the
GATT 1994, because the European Union applied an anti -dumping duty which exceeds the
margin of dumping, as a result of using an incorrect exchange rate.
▪ Articles 3.1 and 3.4 of the Anti -Dumping Agreement because the European Union failed to
make an objective and unbiased examination of the injury factors and erroneously found the
existence of material injury to the Union industry.
▪ Articles 9.2 and 9.3 of the Anti -Dumping Agreement and Article VI:2 of the GATT 1994,
because the amount of the anti -dumping duty imposed by the European Union exceeds the
margin of dumping as established under Article 2 of the Anti -Dumping Agreement and
Article VI:1 of the GATT 1994.
▪ Article X:3(a) of the GATT 1994 because by imposing the anti -dumping duties while
terminating a parallel countervailing investigation following the withdrawal of both complaints,
the European Union failed to administer its Basic Anti -Dumping and Basic Anti -Subsidy
Regulations, and in particular Articles 9(1) and 14(1) governing the termination of an
investigation following the withdrawal of a complaint, in a uniform and reasonable manner.
▪ Article X:3(a) of the GATT 1994 because by applying different methodologies for constructing
normal value for PCNs sold in insufficient quantities on the domestic market of the exporting
country, depending on the existence of profitable sales of those PCNs, the European Union
failed to administer Article 2(6) of the Basic Anti-Dumping Regulation in a uniform and
reasonable manner.
▪ Article 1 of the Anti -Dumping Agreement and Article VI of the GATT 1994 as a consequence
of the violations described above.
24. Indonesia considers that the EU methodology for constructing normal valu e based on
PCN-specific costs and profit data appears to be inconsistent with the following obligations in the
relevant WTO covered agreements:
▪ Articles 2.2 and 2.2.2 of the Anti -Dumping Agreement because by requiring the use of the
SG&A and profit data re lating exclusively to a specific PCN sold in insufficient quantities on
the domestic market of the exporting country, the EU methodology uses amounts for SG&A
costs and for profit which are not reasonable and are not based on actual data pertaining to
production and sales in the ordinary course of trade of the like product by the exporter or
producer under investigation.
▪ Article X:3(a) of the GATT 1994 because by applying different methodologies for constructing
normal value for PCNs sold in insufficient quantities on the domestic market of the exporting
country, depending on the existence of profitable sales of those PCNs, the European Union
fails to administer Article 2(6) of the Basic Anti -Dumping Regulation in a uniform and
reasonable manner.
25. The measures described above appear to nullify or impair the benefits accruing to Indonesia,
directly or indirectly, under the Anti-Dumping Agreement and the GATT 1994.
26. Indonesia reserves its right to raise additional claims and other matters in respect of the
mentioned issues, whether factual or legal, during the course of the consultations. This request also
covers any other amendments, replacements, extensions, related measures or implementing
measures that relate to the inconsistent measures at issue here.
27. Indonesia looks forward to receiving a response to the present request from the
European Union and to establishing a mutually convenient date for consultations, with a view to
resolving this dispute.