European Union – Anti-Dumping Measures on Biodiesel from Indonesia

Request for the Establishment of a Panel by Indonesia

The following communication, dated 30 June 2015, from the delegation of Indoneisa to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

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1.     Consultations

On 10 June 2014, the Government of the Republic of Indonesia ("Indonesia") requested consultations with the European Union^[1] 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 1994 ("GATT 1994"), and Articles 17.2 and 17.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("the Anti-Dumping Agreement"), with respect to the below-mentioned measures concerning specific provisions of Council Regulation (EC) No. 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community ("Basic AD Regulation")^[2] and related practices and measures, and the anti-dumping measures imposed on biodiesel imports from Indonesia^[3] including provisional measures imposed as regards one Indonesian exporting producer.

Consultations were held between Indonesia and the European Union on 23 July 2014, with a view to reaching a mutually satisfactory solution. These consultations however failed to resolve the dispute.

2.     Measures at issue and claims

Indonesia considers that the measures at issue as described below are inconsistent with the European Union's obligations under the relevant provisions of the WTO Agreements elaborated hereunder. The measures at issue include all those mentioned below as well as any subsequent amendments and replacements.

2.1    "As such" claims concerning the Basic AD Regulation and the European Union's methodologies, procedures or practices:

(i)     Article 2(5) of the Basic AD Regulation^[4] and the European Union's 'cost adjustment methodology, procedure or practice'

A.     The second paragraph of Article 2(5) of the Basic AD Regulation which provides that "[i]f costs associated with the production and sale of the product under investigation are not reasonably reflected in the records of the party concerned, they shall be adjusted or established on the basis of the costs of other producers or exporters in the same country or, where such information is not available or cannot be used, on any other reasonable basis, including information from other representative markets". Pursuant to this provision, the European Union assesses the reasonability of the actually incurred costs of inputs used in the production of the product under consideration by investigated exporters or producers on the basis of a non-distortion test against prices or benchmarks of those inputs in supposedly undistorted markets/from undistorted sources; disregards the actually incurred and accurately recorded costs of inputs as not being reasonable and thus not reasonably reflected in the accounting records of the investigated exporters or producers even though the records of those exporters or producers are in accordance with the generally accepted accounting principles of the investigated country and reasonably as well as accurately reflect the costs associated with the production and sale of the product under investigation, in the event the European Union finds that the non-distortion test is not met and/or that the costs of inputs incurred are artificially or abnormally low, distorted, regulated, below/lower than market prices paid in unregulated markets, or not in line with world market prices/prices in representative markets; and adjusts or replaces those input costs with other data including that pertaining to markets or sources outside the country of origin which it considers to be undistorted.