EUROPEAN UNION – COUNTERVAILING AND ANTI-DUMPING DUTIES ON STAINLESS STEEL COLD-ROLLED FLAT PRODUCTS FROM INDONESIA REQUEST FOR THE ESTABLISHMENT OF A PANEL BY INDONESIA
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 18 April 2023
Document codes: WT/DS616/2
Complainant: Indonesia
Respondent: EU
Third parties: Argentina, Australia, Brazil, Canada, China, Egypt, India, Japan, South Korea, Russia, Singapore, Taiwan, Thailand, Türkiye, Ukraine, United Kingdom, U.S.
Dispute stage: Panel
Agreements cited: Art. 23.1  Dispute Settlement Understanding (DSU)Art. 1, 2.1, 2.4, 6.1, 6.6, 9.1, 9.2, 9.3, 11.1, 17.6(i), 18.1  Anti-dumpingArt. II:1(b), VI:1, VI:2, VI:3, VI:4, VI:5  GATT 1994Art. 1.1, 1.1(a), 1.1(a)(1), 1.1(b), 1.2, 2.1, 2.2, 2.3, 2.4, 3.1(a), 10, 12, 12.1, 12.7, 12.8, 12.9, 14, 19, 19.3, 22.3, 32.1  Subsidies and Countervailing Measures (SCM)

EUROPEAN UNION – COUNTERVAILING AND ANTI-DUMPING DUTIES ON STAINLESS
STEEL COLD-ROLLED FLAT PRODUCTS FROM INDONESIA
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY INDONESIA
The following communication, dated 17 April 2023 , from the delegation of Indonesia to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On 24 January 2023, Indonesia requested consultations with the European Union ("EU") pursuant to
Articles 1, 4, and 26 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes ("DSU"), Article 30 of the Agreement on Subsidies and Countervailing Measures ("SCM
Agreement"), Article 17 of the Agreement on Implementation of Article VI of the General Agreement
on Tariffs and Trade 1994 ("Anti-Dumping Agreement") and Article XXIII of the General Agreement
on Tariffs and Trade 1994 ("GATT 1994"), concerning the imposition of countervailing and anti-
dumping duties on Stainless Steel Cold-Rolled Flat Products ("SSCRFP") from Indonesia.
The consultations took place in Geneva and online on 13 March 2023 and failed to resolve the dispute.
Hence, Indonesia is requesting the establishment of a Panel pursuant to Article 4.7 of the DSU.

The measures at issue are the definitive countervailing and anti -dumping duties on SSCRFP from
Indonesia as well as the underlying investigation that led to the imposition of these measures
(hereafter "countervailing measures" and "anti -dumping measures", respectively), which include,
amongst others, the actions taken or omitted by the European Commission ("Commission") during
the course of – or in relation to – the investigations.

The countervailing and anti-dumping measures include, but are not limited to, and are evidenced by
the following instruments/documents:

▪ Commission Implementing Regulation (EU) 2022/433 of 15 March 2022 imposing definitive
countervailing duties on imports of stainless steel cold -rolled flat products originating in
India and Indonesia and amending Implementing Regulation (EU) 2021/2012 imposing a
definitive anti -dumping duty and definitively collecting the provisional duty imposed on
imports of stainless steel cold -rolled flat products originating in India and Indonesia
(hereafter "Countervailing Regulation");
1 and

▪ Commission Implementing Regulation (EU) 2021/2012 of 17 November 2021 imposing a
definitive anti-dumping duty and definitively collecting the provisional duty imposed on
imports of stainless steel cold-rolled flat products originating in India and Indonesia,
published in the Official Journal of the European Union (hereafter "Definitive Anti-
Dumping Regulation")2 and Commission Implementing Regulation (EU) 2021/854 of 27
May 2021 imposing a provisional anti-dumping duty on imports of stainless steel cold-

1 Published in the Official Journal of the European Union, L-series number 88, page 24, dated 16 March
2022:
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R0433&from=EN.
2 Published in the Official Journal of the European Union, L-series number 410, page 153, dated 18
November 2021: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R2012&from=EN.

rolled flat products originating in India and Indonesia (hereafter "Provisional Anti-
Dumping Regulation").3

With respect to the countervailing measures, Indonesia is concerned that the following elements of
the Countervailing Regulation, and of the investigation leading to the imposition of these measures,
appear to be inconsistent with the SCM Agreement and the GATT 1994:

1. In connection with the provision of preferential financing and other support
by Chinese grantors to Indonesian SSCRFP producers:

a. The EU's attribution of financial contributions by Chinese grantors to the
Government of Indonesia, and the EU's decision to consider these attributed
financial contributions as subsidies within the meaning of Article 1.1(a)(1) of the
SCM Agreement;

b. The EU's determination that the Government of Indonesia was the granting
authority within the meaning of Articles 2.1 and 2.2 of the SCM Agreement with
respect to financial contributions provided by Chinese grantors;

c. The EU's determination that alleged subsidies, provided by Chinese grantors to
certain enterprises which were not within their jurisdiction, were spec ific in
accordance with Articles 1.2, 2.1, 2.2, and 2.4 of the SCM Agreement;

d. The EU's decision to countervail alleged subsidies provided by Chinese grantors
without demonstrating specificity in accordance with Articles 1.2, 2.1, and 2.2
of the SCM Agr eement on the basis of positive evidence as required by Article
2.4 of the SCM Agreement;

e. The EU's determination of a benefit and the EU's calculations of such benefit
regarding, amongst others, the use of benchmarks that do not reflect prevailing
market conditions in the country of provision, the absence of proper "pass
through" determinations, and the treatment of shareholder loans as grants, as
required by Articles 1.1(b), 10, 14, and 32.1 of the SCM Agreement;

2. In connection with the provision of nickel ore:

a. The EU's determination that certain Indonesian regulatory measures
constituted or led to a financial contribution within the meaning of Article
1.1(a)(1) of the SCM Agreement;

b. The EU's determination that nickel ore mining companies constituted public
bodies within the meaning of Article 1.1(a)(1) of the SCM Agreement;

c. The EU's determination that nickel ore mining companies acted as private
bodies entrusted or directed by the Government of Indonesia within the
meaning of Article 1.1(a)(1)(iv) of the SCM Agreement;

d. The EU's determination that the provision of nickel ore conferred a benefit to
SSCRFP producers and the calculation of the amount of that alleged benefit by
relying on an external benchmark that did not refl ect the prevailing market
conditions for the goods in question in the country of provision, in contradiction
with Articles 1.1, 10, 14, and 32.1 of the SCM Agreement;

e. The EU's determination that the provision of nickel ore was specific within the
meaning of Articles 1.2, 2.1, and 2.2 of the SCM Agreement and shall be clearly
substantiated on the basis of positive evidence as required by Article 2.4 of the
SCM Agreement;

3 Published in the Official Journal of the European Union, L-series number 188, page 61, dated 28 May
2021:
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R0854&from=EN.

f. The EU's decision to seek unilateral redress through countervailing measures
for export restrictions on nickel ore for which the EU alleges, in WT/DS592, a
violation of Article XI:1 of the GATT 1994, in contradiction with Article 23.1 of
the DSU;

3. In connection with the provision of land:

a. The EU's determination that the provisi on of land constituted a financial
contribution by a government within the meaning of Article 1.1(a)(1) of the
SCM Agreement;

b. The EU's reliance on a benchmark, which did not reflect prevailing market
conditions for the goods in question in the country of provision, as the basis for
establishing the existence and the amount of the benefit, in accordance with
Articles 1.1, 10, 14, and 32.1 of the SCM Agreement;

c. The EU's determination that the provision of land by the Government of
Indonesia was specific in accordance with Articles 1.2, 2.1, and 2.2 of the SCM
Agreement and shall be clearly substantiated on the basis of positive evidence
as required by Article 2.4 of the SCM Agreement;

4. In connection with government revenue that is otherwise due which is
foregone or not collected:

a. The EU's determination that the income tax holiday and the income tax
allowance facility were specific within the meaning of Articles 1.2, 2.1, 2.2, and
2.4 of the SCM Agreement;

b. The EU's determination that the import duty exemption on raw materials used
to manufacture exported goods constituted an export subsidy within the
meaning of Article 3.1(a) and/or constituted a financial contribution in the form
of revenue foregone by the Government of Indonesia within the meaning of
Article 1.1(a)(1)(ii) of the SCM Agreement in disregard of footnote 1 to the
SCM Agreement;

c. The EU's determination that the import duty exemption for m achinery and
spare parts imported from China constituted an export subsidy within the
meaning of Article 3.1(a) and/or constituted a financial contribution in the form
of revenue foregone by the Government of Indonesia within the meaning of
Article 1.1(a)(1)(ii) of the SCM Agreement;

d. The EU's decision to countervail the alleged revenue foregone for imports of
bonded zone spare parts from China without appropriately adjusting the anti -
dumping duty in accordance with Article VI:5 of the GATT 1994, Article 9.2 of
the Anti-Dumping Agreement and Article 19.3 of the SCM Agreement;

e. The EU's omission to determine that the import duty exemption for machinery,
spare parts and raw materials were specific, as required by Articles 1.2, 2.1,
2.2, 2.3 of the SCM Agreement, and the EU's omission to clearly substantiate
these determinations of specificity on the basis of positive evidence, as
required by Article 2.4 of the SCM Agreement;

f. The EU's omission to correctly determine the existence and the amount of the
alleged benefit of the import duty exemption for machinery, spare parts and
raw materials, in accordance with Articles 1.1, 10, 14, and 32.1 of the SCM
Agreement;

5. In connection with actions taken or omitted during the course of – or in
relation to – the investigation, and other cross-cutting issues:

a. The EU's decision to require the interested Member (Indonesia) to conduct a
part of the investigation on behalf of the European Commission, in

contradiction with Articles 10 and 12 of the SCM Agreement. The EU's action
also nullified and/or impaired a benefit accruing to Indonesia and/or impeded
the attainment of an objective of the SCM Agreement;

b. The EU's decision to resort to facts available against nickel ore mining
companies, in contradiction with Article 12.7 of the SCM Agreement, since: (i)
these companies were not "interested parties" in the sense of Article 12.9 of
the SCM Agreement; (ii) if they were, they were not directly informed of the
information required from them, in accordance with Article 12.1 of the SCM
Agreement; and (iii) if they we re, the Commission did not demonstrate that
these companies had failed or refused to cooperate with the Commission;

c. The EU's decision to resort to facts available against certain SSCRFP producers,
and against the Government of Indonesia, on the basis of an incorrect
determination that these producers and the Government failed or refused to
cooperate with the Commission, in contradiction with Article 12.7 of the SCM
Agreement;

d. The EU's use of facts available in a way that did not reasonably replace the
allegedly missing information (for example, with respect to the benchmark for
purchases of machinery), in contradiction with Article 12.7 of the SCM
Agreement;

e. The timing of the EU's release of essential facts under consideration in the
definitive disclosure documents, which did not provide interested parties
sufficient time to defend their interests and did not allow the parties to present
in writing all evidence that they considered relevant, in contradiction with
Articles 12.1 and 12.8 of the SCM Agreement;

f. The EU's omission to inform Indonesia and other interested parties of certain
essential facts under consideration and to provide sufficient details in the
Countervailing Regulation, for example, with respect to the benchmark for
purchases of machinery, as required by Articles 12.8 and 22.3 of the SCM
Agreement; and

g. In case the EU asserts, in connection with points 1 through 4 above, that the
Commission did conduct "pass through" and specificity analyses, the EU's
omission to inform Indonesia and other interested parties of the essential facts
under consideration, as required by Article 12.8 of the SCM Agreement; to
calculate the benefit in a transparent and adequately explained manner, as
required by Article 14 of the SCM Agreement; and to explain in sufficient detail
in the Countervailing Regulation, the Commission's conclusions on all issues of
fact and law that were considered material by the Commission, as required by
Article 22.3 of the SCM Agreement.

Accordingly, the EU' s imposition of countervailing measures on the imports of SSCRFP from
Indonesia also appears to be inconsistent with Articles II:1(b), VI:3, VI:4, and VI:5 of the GATT
1994 and Articles 10, 19, and 32.1 of the SCM Agreement.

With respect to the anti-dumping measures, Indonesia is concerned that the following elements of
the Definitive and Provisional Anti -Dumping Regulation and of the investigation leading to the
imposition of these measures appear to be inconsistent with the Anti-Dumping Agreement and GATT
1994:

6. In connection with the obligations to make a fair comparison between the
export price and the normal value and to make due allowance for
differences affecting price comparability:

a. The EU's omission to make due allowance for differences in price comparability
as required by Article 2.4 of the Anti-Dumping Agreement. Amongst others,

i. the EU deducted certain handling and loading costs, freight and insurance

expenses and port costs, demurrage and dispatch costs from the export
price, while it did not deduct similar expenses such as transport, handling,
and loading costs from the domestic sales price and the normal value; and

ii. the EU deducted SG&A expenses and a notional profit from the export price
for export sales through related traders while not deducting such SG&A
expenses and a notional profit from the domestic sales price and the normal
value when domestic sales were made through related traders;

b. The EU's omission to make a fair comparison between the export price and the
normal value, and to make the comparison at the same level of trade as required
by Article 2.4 of the Anti -Dumping Agreement. Amongst others, the EU
compared export sales at the ex-works level with a normal value at the ex-
warehouse level;

c. The EU's omission to indicate what information was necessary to ensure a fair
comparison and the imposition of an unreasonable burden of proof, thereby not
acting in an objective and unbiased manner as required by Articles 2.4, 6.1, and
6.6 of the Anti -Dumping Agreem ent and the standard expected from
investigating authorities as expressed in Article 17.6(i) of the Anti -Dumping
Agreement; and

d. The EU's omission to appropriately adjust the anti-dumping duty to take account
of the countervailing duty for imports of bo nded zone spare parts from China,
as required by Article VI:5 of the GATT 1994, Article 9.2 of the Anti -Dumping
Agreement, and Article 19.3 of the SCM Agreement.

Accordingly, the EU's imposition of anti-dumping measures on the imports of SSCRFP from Indonesia
also appears inconsistent with Articles 1, 2.1, 9.1, 9.3, 11.1, and 18.1 of the Anti -Dumping
Agreement, and Articles VI:1 and VI:2 of the GATT 1994.

In light of the above, it appears that by imposing CVD and AD duties on SSCRFP from Indonesia,
the EU has failed to carry out its obligations and has nullified or impaired benefits accruing to
Indonesia directly or indirectly under the covered agreements.

This panel request relates to the measures at issue and any amendments, supplements, extensions,
replacement measures, renewal measures, implementing measures, and any future action or other
measures the EU may take in connection with the measures at issue.

Indonesia asks that this request be placed on the agenda for the meeting of the Dispute Settlement
Body to be held on 28 April 2023.