Adjustment to the Export Price under Article 2.4 of the Anti-Dumping Agreement

The Panel rejected Indonesia's claim that the EU had acted inconsistently with Article 2.4 of the Anti-Dumping Agreement. The EU performed a cost adjustment on the export price, on the grounds that the Indonesian producer had exported through a Singapore-based sales entity and on the basis of particular additional facts. Indonesia argued that this adjustment was improper, because the EU was required to examine whether the Indonesian producer and the Singapore-based sales entity were sufficiently closely intertwined so as to form, effectively, a single economic entity. According to Indonesia, the close relationship was a key element in deciding whether monetary flows between two entities ‘affect price comparability’ within the meaning of Article 2.4 or instead are mere intra-corporate transfers that do not affect price comparability. The Panel ruled, in essence, that an investigating authority is entitled to make an adjustment for a downstream participant, to reflect the remuneration owed to that downstream participant. The Panel ruled that a close relationship between two companies did not mean that transactions between these two entities could not occur at arm's length.

On appeal, the Appellate Body upheld the panel ruling. The Appellate Body agreed with Indonesia that a close relationship between two entities is, in principle, not irrelevant for the determination whether a particular monetary transfer should give rise to an adjustment under Article 2.4. However, according to the Appellate Body, this must be assessed on a case-by-case basis. The Appellate Body did not find fault with the approach of the investigating authority nor with the approach of the Panel in this case. The Appellate Body also rejected further points of appeal by Indonesia, including an appeal about the structure of the Panel's analysis as well as multiple points of appeal against the Panel's standard of review.

Non-Attribution Analysis under Article 3.5

Indonesia claimed that the EU had incorrectly analysed several non-attribution factors, thereby improperly mis-attributing their injurious effects to dumped imports. These factors were the effects of the 2008−2009 economic crisis and the access of the EU industry to raw materials and the price fluctuations of those materials. The Panel rejected Indonesia's arguments, finding that the EU had not improperly failed to separate and distinguish the injurious effects of those factors from those of the dumped imports. In its findings, the Panel reiterated certain broader principles under Article 3.5 of the Anti-Dumping Agreement, including that investigating authorities enjoy discretion in how to conduct the non-attribution analysis, that the investigating authority was only required to examine factors that were known to be causing injury at the same time as dumped imports, and that the allegation of an investigated party during an investigation that a particular factor has injurious effects must be accompanied by sufficient argument and evidence. This Panel finding was not appealed and thus not addressed by the Appellate Body.

Obligation to Make Available or Disclose the Results of the Verification under Article 6.7

Indonesia argued that the EU had failed to comply with the obligation, under Article 6.7 of the Anti-Dumping Agreement, to make available or to disclose the results of the on-the-spot investigations. An important argument of the EU, in this regard, was, in essence, that the ‘results’ of the verification are the same as, or closely track, the concept of ‘essential facts’, within the meaning of Article 6.9 of the Anti-Dumping Agreement. Thus, by providing proper disclosure of the essential facts, an investigating authority can comply with the obligation to inform an investigated company of the ‘results’ of a verification visit. The Panel rejected that argument and found that Article 6.7 requires an investigating authority to disclose, at a minimum, the part of the questionnaire response or other information supplied for which supporting evidence was requested, whether any further information was requested, and whether documents were collected by the authorities. Similarly, the results of the verification should state whether the producer made available the evidence and additional information requested and indicate whether the investigating authorities were or were not able to ‘confirm the accuracy of the information supplied by the verified companies.’ The Panel also stated that Article 6.7 serves a due process function towards, inter alia, investigated parties. Upon review of the relevant investigation documents, the Panel found that the EU had failed to comply with this obligation.

The Appellate Body rejected the EU's appeal concerning both the Panel's interpretation of Article 6.7 and its application to the case at hand. It confirmed, inter alia, that the ‘results’ of an on-the-spot investigation (verification visit) include whether or not the accuracy of information submitted by an investigated company could be verified. It also stated that what employees of the investigated company may or may not have understood at the time of the on-the-spot visit does not form part of the enquiry under Article 6.7