EU Loses Case
at WTO on Stainless Steel Subsidies by Indonesia, but Upholds EU Anti-Dumping
Action
WTO panel proceedings
and findings in the Indonesia–European
Union stainless steel cold-rolled flat products (SSCRFP) dispute:
·
17
Apr 2023 –
Indonesia requested panel establishment.
·
30
May 2023 – DSB
established panel (18 third parties reserved rights, incl. India, US, China,
Japan).
·
13
Sep 2023 –
Panel composed.
·
8
Mar 2024 & 6 Dec 2024
– Panel Chair informed of delays due to scheduling and complexity.
·
02
Oct 2025 –
Panel report circulated to WTO Members.
·
Measure
challenged: EU’s
countervailing
and anti-dumping duties on
imports of stainless steel cold-rolled flat products (SSCRFP) from Indonesia.
·
Indonesia’s
arguments:
1.
EU
wrongly attributed Chinese financial contributions to the Government of
Indonesia (GOID).
2.
EU
wrongly concluded that nickel ore was provided at less than adequate
remuneration.
3.
EU
wrongly treated import duty exemptions, income tax holidays, and tax allowances
as subsidies.
4.
Procedural
flaws in EU’s countervailing duty investigation.
5.
Faulty
dumping determination in EU’s anti-dumping investigation (failure of fair
comparison).
a.
Attribution of Chinese financing/support
·
EU
acted inconsistently
with SCM Article 1.1(a)(1)
by attributing Chinese financial contributions to GOID.
·
Since
attribution was unlawful, panel did
not rule on
related claims about specificity or benefits.
b.
Provision of nickel ore at less than adequate remuneration
·
EU
acted inconsistently
with SCM Article 1.1(a)(1)
by treating all Indonesian nickel miners as “public bodies.”
·
EU
wrongly found entrustment/direction under Article 1.1(a)(1)(iv).
·
Consequential
claims on benefit calculation, benchmarks, and duty rates were not addressed.
c.
Revenue foregone (import duty exemptions, tax holidays, allowances)
·
Import
duty exemptions: EU
acted inconsistently
with SCM Article 1.1(a)(1)(ii) & Footnote 1 (failed to allow further examination).
·
Income
tax holiday:
Indonesia failed to prove EU’s determination was inconsistent.
·
Income
tax allowance: EU
acted inconsistently
with SCM Articles 1.2 & 2.1
(lack of reasoned explanation on specificity).
d.
Procedural issues in the investigation
·
Most
of Indonesia’s procedural challenges (e.g., non-designation of nickel miners as
interested parties, fact-finding burdens, timelines) were not established.
·
EU
acted inconsistently
with SCM Article 12.7 by
applying facts available against IRNC Group over imported machinery origin.
·
Again,
EU failed to justify specificity finding on the income tax allowance facility (Articles 1.2 & 2.1).
·
Indonesia’s
claims on fair
comparison (ADA Article 2.4, GATT Article VI) mostly not established:
o Same level of trade comparison – EU did
not violate ADA.
o Transport costs – rejection of adjustment
consistent with ADA.
o Adjustments for related traders – EU’s
decisions upheld.
o Disclosure of necessary information – no
violation proven.
·
Indonesia
succeeded in
several countervailing duty claims:
o Wrong attribution of Chinese subsidies to
GOID.
o Wrong findings on nickel ore provision.
o Wrong treatment of import duty exemptions
as subsidies.
o Lack of reasoning in tax allowance
specificity finding.
o Improper use of “facts available” in one
instance.
·
Indonesia
failed in
most anti-dumping
duty claims; EU’s
determinations largely upheld.
In essence: The panel largely faulted the EU’s
countervailing duty investigation
for incorrect subsidy attribution and inadequate reasoning, but upheld the EU’s anti-dumping findings.
On 2
October, the WTO circulated the panel report in the case brought by Indonesia
in “European Union — Countervailing and Anti-Dumping Duties on Stainless Steel
Cold-Rolled Flat Products from Indonesia“(DS616).
·
Just the findings and conclusions
·
Addendum
Summary
of key findings
Summaries
are updated regularly, but the Documents Online search may retrieve more recent
documents
The summary below was up-to-date at 10
January 2025
Complaint by Indonesia
On 24 January 2023, Indonesia requested consultations with
the European Union with respect to countervailing and anti-dumping measures
imposed by the European Union on imports of stainless steel cold-rolled flat
products from Indonesia.
Indonesia claimed that the countervailing measures at issue
appear to be inconsistent with:
·
Articles
1.1, 1.1(a)(1), 1.1(a)(1)(ii),footnote 1, 1.1(a)(1)(iv), 1.1(b), 1.2, 2.1, 2.2,
2.3, 2.4, 3.1(a), 10, 12, 12.1, 12.7, 12.8, 14, 19, 19.3, 22.3 and 32.1 of the
SCM Agreement;
·
Article
9.2 of the Anti-Dumping Agreement;
·
Articles
II:1(b), VI:3, VI:4 and VI:5 of the GATT 1994; and
·
Article
23.1 of the DSU.
Indonesia claimed that the anti-dumping
measures at issue appear to be inconsistent with:
·
Articles
1, 2.1, 2.4, 6.1, 6.6, 9.1, 9.2, 9.3, 11.1, 17.6(i) and 18.1 of the
Anti-Dumping Agreement;
·
Article
19.3 of the SCM Agreement; and
·
Articles
VI:1, VI:2 and VI:5 of the GATT 1994.
On 17 April 2023, Indonesia requested the establishment of
a panel. At its meeting on 28 April 2023, the DSB deferred the establishment of
a panel.
At its meeting on 30 May 2023, the DSB established a panel.
Argentina, Australia, Brazil, Canada, China, Egypt, India, Japan, Korea, the
Russian Federation, Singapore, Chinese Taipei, Thailand, Türkiye, Ukraine, the
United Kingdom, and the United States reserved their third-party rights.
Following the agreement of the parties,
the panel was composed on 13 September 2023.
On 8 March 2024, the Chair of the panel
informed the DSB that, due to constraints pertaining to the availability of a
member of the panel as well as the scheduling of the 13th Ministerial
Conference in February 2024, it was not possible to schedule the first
substantive meeting with the parties before April 2024, and that the panel had
received particularly voluminous submissions from the parties on a range of
issues. As a result, the panel did not expect to issue its final report to the
parties before the end of 2024. The Chair apprised the DSB that the report
would be available to the public once it was circulated to the Members in all
three official languages, and that the date of circulation depends on
completion of translation. On 6 December 2024, the Chair of the panel informed
the DSB that, in view of the reasons provided in its communication of 8 March
2024, the complexity and number of claims at issue, and taking account of the
availability of the members of the panel, including one panelist who was also
engaged in a separate ongoing dispute settlement proceeding involving Indonesia
and the European Union which had precluded the second substantive meeting with
the parties from being held before December 2024, the panel did not expect to
issue its final report to the parties before the third quarter of 2025.
On 02
October 2025, the panel report was circulated to Members.
This
dispute concerns a challenge by Indonesia against the application of certain
countervailing and anti-dumping duty
measures by the European Union on imports of stainless steel cold-rolled flat
products (SSCRFP) from Indonesia. With regard to the countervailing duty
measures, Indonesia challenged the European Commission's determination that:
(a) certain preferential financing and other support that Chinese grantors
provided to Indonesian SSCRFP producers could be attributed to the Government
of Indonesia (GOID) and thus countervailed; (b) the GOID had provided nickel
ore to the country's SSCRFP producers at less than adequate remuneration; and
(c) the GOID had foregone revenue that was otherwise due under an import duty
exemption scheme, an income tax holiday, and an income tax allowance facility.
Indonesia also challenged certain actions and omissions of the Commission in
the underlying countervailing duty investigation. With regard to the
anti-dumping duty measures, Indonesia challenged certain elements of the
Commission's dumping determination in connection with its obligation to make a
fair comparison between the export price and the normal value and to make due
allowances for differences affecting price comparability.
Claims
challenging the Commission's determination to apply countervailing duty
measures to SSCRFP imports from Indonesia
a. With
respect to the Commission's determination that certain allegedly preferential
financing and other support (i.e., support that Chinese grantors had provided
to Indonesian SSCRFP producers) could be attributed to the Government of
Indonesia and thus countervailed, the Panel concluded as follows:
i. The
Commission acted inconsistently with Article 1.1(a)(1) of the SCM Agreement by:
(a) relying on its finding of "inducement" to attribute to the GOID
the financial contributions that Chinese grantors provided to the IRNC Group in Indonesia; and (b) considering these
attributed financial contributions to be subsidies within the meaning of that
provision.
ii. Having
found that the Commission acted inconsistently with Article 1.1(a)(1) of the
SCM Agreement by attributing to the GOID the financial contributions provided
by the Chinese grantors to the IRNC Group in Indonesia, the Panel declined to
make findings on Indonesia's claims under Articles 1.2, 2.1, 2.2, and 2.4 of
the SCM Agreement challenging the Commission's specificity determination.
iii. Given
the conditional nature of Indonesia's challenge and having found that the
Commission acted inconsistently with Article 1.1(a)(1) of the SCM Agreement by
attributing to the GOID the financial contributions provided by the Chinese
grantors to the IRNC Group in Indonesia, the Panel declined to make findings on
Indonesia's claims under Articles 1.1(b), 10, 14, and 32.1 of the SCM Agreement
challenging the Commission's benefit determination.
b. With
respect to the Commission's determination that the GOID had provided nickel ore
for less than adequate remuneration to the country's SSCRFP producers, the
Panel concluded as follows:
i. The
Commission acted inconsistently with Article 1.1(a)(1) of the SCM Agreement by
concluding that information on the record demonstrated that all nickel ore
mining companies in Indonesia are "public bodies".
ii. The
Commission acted inconsistently with Article 1.1(a)(1)(iv) of the SCM Agreement
by concluding that the GOID entrusted or directed nickel ore mining companies –
as private bodies – to provide nickel ore to the stainless steel producers in
Indonesia.
iii. Having
found that the Commission's public body and entrustment or direction findings,
that formed the basis for its financial contribution determination, are
inconsistent with Article 1.1(a)(1) of the SCM Agreement, the Panel declined to
make findings on Indonesia's claims under Articles 1.1, 10, 14, 19, and 32.1 of
the SCM Agreement challenging: (a) the benchmark that the Commission selected
for its benefit analysis; and (b) the duty rate that the Commission determined
for the sole non-sampled cooperating steel producer. For the same reason, the
Panel also declined to make findings on Indonesia's claims under Articles 1.2,
2.1, and 2.4 of the SCM Agreement challenging the Commission's specificity
determination.
c. With
respect to the Commission's determination that the GOID had improperly
forgone revenue that was otherwise due,
the Panel concluded as follows:
i. The
Commission acted inconsistently with Article 1.1(a)(1)(ii) and Footnote 1 of
the SCM Agreement by deeming import duty exemptions for raw materials imported
into bonded zones to be financial contributions and subsidies without providing
Indonesia an appropriate opportunity to undertake a "further
examination" pursuant to Annex II(II)(2) of the SCM Agreement.
ii. Having
found that the Commission's financial contribution and subsidy determination
with respect to import duty exemptions for raw materials imported into bonded
zones is inconsistent with Article 1.1(a)(1)(ii) and Footnote 1 of the SCM
Agreement, the Panel declined to make findings on Indonesia's consequential
claims under Articles 1.1(b), 3.1(a), 10, 14, and 32.1 of the SCM Agreement and
Articles VI:3 and VI:4 of the GATT 1994.
iii. The
Panel declined to make findings with respect to Indonesia's claim under Article
1.1(a)(1)(ii) and Footnote 1 of the SCM Agreement that the Commission was
obligated to determine whether excess exemptions were granted even if the
exemptions were ineligible to "not be deemed to be a subsidy"
pursuant to Footnote 1. Having found that the Commission's financial
contribution and subsidy determination with respect to import duty exemptions
for raw materials imported into bonded zones is inconsistent with Article
1.1(a)(1)(ii) and Footnote 1, the Panel found that the circumstance
contemplated by this claim did not exist.
iv. Having
found that the Commission's financial contribution and subsidy determination
with respect to import duty exemptions for raw materials imported into bonded
zones is inconsistent with Article 1.1(a)(1)(ii) and Footnote 1 of the SCM
Agreement, the Panel declined to make findings on Indonesia's claim that this
alleged subsidy was determined to be specific inconsistently with Articles 1.2,
2.1, 2.2, 2.3, and 2.4 of the SCM Agreement.
v. Indonesia
has not established that the Commission's specificity determination with
respect to the income tax holiday is inconsistent with Articles 1.2, 2.1, and
2.4 of the SCM Agreement.
vi. The
Commission acted inconsistently with Articles 1.2 and 2.1 of the SCM Agreement
because it did not provide a reasoned and adequate explanation sufficient to
justify its determination that the income tax allowance facility is specific.
vii. Having
found that the Commission did not provide a reasoned and adequate explanation
sufficient to justify its determination that the income tax allowance facility
is specific, the Panel declined to make further findings with respect to
Indonesia's claim that the Commission's specificity determination with respect
to the income tax allowance facility is also inconsistent with Article 2.4 of
the SCM Agreement.
d. With
respect to Indonesia's claims challenging the Commission's actions and
omissions in the underlying countervailing duty investigation, the Panel
concluded as follows:
i. Indonesia
has not established that, by not designating nickel ore mining companies as
"interested parties", the Commission acted inconsistently with
Article 12.9 of the SCM Agreement. Indonesia has also not established that the
Commission acted inconsistently with Article 12.1 of the SCM Agreement because
it did not directly notify the nickel ore mining companies of the information
that was required from them, or because it allegedly transferred its
fact-finding responsibilities as an investigating authority to the GOID.
Accordingly, Indonesia has also not established its consequential claim that
the Commission acted inconsistently with Article 10 of the SCM Agreement.
ii. Indonesia
has not established that the Commission acted inconsistently with Article 12.7
by improperly: (a) applying facts available "against" or "with
respect to" the nickel ore mining companies; or (b) attributing these
companies' non-cooperation to the GOID.
iii. Indonesia
has not established that the Commission acted inconsistently with Article 12.7
of the SCM Agreement with respect to the data that the GOID submitted regarding
the domestic consumption of nickel ore or the Commission's conclusion that the
GOID failed to provide information about nickel ore prices in Indonesia, or
because "the GOID cooperated to the best of its abilities, despite the
unreasonable burdens placed upon it by the Commission".
iv. The
Commission acted inconsistently with Article 12.7 of the SCM Agreement in
determining to apply facts available on the grounds that the IRNC Group did not
provide necessary information with respect to the origin of the machinery
imported from the Chinese parent companies.
v. Indonesia
has not established that the Commission acted inconsistently with Articles 12.1
and 12.8 of the SCM Agreement in establishing a period of 21 calendar days to
comment on the disclosure of essential facts.
vi. Indonesia
has not established that the Commission acted inconsistently with Article 12.8
of the SCM Agreement: (a) when it determined it was unable to reconcile the
data that the GOID submitted regarding the domestic consumption of nickel ore
with the IRNC Group's purchases of nickel ore; (b) when it disclosed the
essential fact that the Commission considered that the GOID had owned and
provided land; or (c) based on the fact that it did not state that the analysis
of competitive conditions was conducted using product control numbers.
vii. Indonesia
has not demonstrated that the Commission's final determination with respect to
the income tax holiday is inconsistent with Article 22.3.
viii. The
Commission acted inconsistently with Articles 1.2 and 2.1 of the SCM Agreement
because it did not provide a reasoned and adequate explanation sufficient to
justify its determination that the income tax allowance facility is specific.
ix. The Panel
determined that it did not need to make findings on a number of related
procedural claims in order to provide a
positive resolution to this dispute. As neither of the conditions that
Indonesia posited for asserting its conditional claims under Articles 12.8, 14,
and 22.3 of the SCM Agreement regarding the Commission's pass-through analysis
were satisfied, the Panel also did not address these claims.
Claims
challenging the Commission's determination to apply anti-dumping duty measures
to imports of SSCRFP from Indonesia
a. With
respect to Indonesia's claims concerning the Commission's findings in the
underlying anti-dumping investigation in connection with fair comparison and
due allowances, the Panel concluded that:
i. Indonesia
has not established that the Commission acted inconsistently with its
obligation to make comparisons at the same level of trade within the meaning of
the second sentence of Article 2.4.
ii. Indonesia
has not established that the Commission acted inconsistently with the third
sentence of Article 2.4 of the Anti-Dumping Agreement and the chaussette
of Article VI:1 of the GATT 1994 when rejecting adjustments to the normal value
to reflect transport-related expenses between a party's warehouses.
iii. Indonesia
has not established that the Commission's downward adjustment to the export
price for the involvement of related traders in the export sales was
inconsistent with the third sentence of Article 2.4 of the Anti‑Dumping
Agreement.
iv. Indonesia
has not established that the Commission's decision not to make adjustments to
the normal value for the involvement of related traders in domestic sales is
inconsistent with the third sentence of Article 2.4 of the Anti‑Dumping
Agreement.
v. Indonesia
has not established that the Commission failed to indicate what information was
necessary to ensure a fair comparison inconsistently with the final sentence of
Article 2.4 and Article 6.1 of the Anti-Dumping Agreement