Anti-Dumping Duties on Imports of Certain Paper from Indonesia

Complaint by Indonesia.

On 17 August 2006, Korea and Indonesia notified the DSB of an Understanding regarding procedures under Articles 21 and 22 of the DSU. On 26 October 2006, Indonesia requested consultations under Article 21.5 of the DSU. On 22 December 2006, Indonesia requested the establishment of an Article 21.5 compliance panel. At its meeting on 23 January 2007, the DSB agreed, if possible, to refer the matter raised by Indonesia to the original panel. China, the European Communities, Japan and the United States reserved their third party rights. Subsequently, Chinese Taipei reserved its third party rights.

On 2 April 2007, the Chairman of the Panel informed the DSB that it would not be possible for the Panel to complete its work in 90 days due to scheduling conflicts. The Panel expects to complete its work in June 2007.

On 28 September 2007, the Article 21.5 Panel report was circulated to Members. The Panel concluded that:

• the KTC acted inconsistently with Article 6.8 of the Anti-Dumping Agreement and paragraph 7 of Annex II by failing to exercise special circumspection in the use of information from secondary sources in its effort to base its determination of CMI's interest expenses on the best information available;
• the KTC acted inconsistently with its obligation under Article 6.2 of the Anti-Dumping Agreement by declining to provide the Sinar Mas Group with an opportunity to make comments on the evaluation of the injury factors under Article 3.4;
• Indonesia failed to make a prima facie case with regard to its claims under Articles 6.4, 6.5 and 6.9 of the Anti-Dumping Agreement concerning the alleged disclosure violations in connection with the KTC's injury redetermination; and
• Indonesia failed to make a prima facie case with regard to its claim on the alleged acceptance by the KTC of new information from the Korean industry.

On 22 October 2007, the DSB adopted the Article 21.5 Panel report.

Appellate Body and Panel Reports Adopted

On 4 June 2004, Indonesia requested consultations with Korea concerning the imposition of definitive anti-dumping duties by Korea on imports of business information paper and uncoated wood-free printing paper from Indonesia and certain aspects of the investigation leading to the imposition of such duties.

According to the request for consultations from Indonesia, Korea violates its WTO obligations in respect of the following aspects:

• Korea’s initiation of investigation, notwithstanding several deficiencies such as the applicants’ failure to include in the application sufficient and adequate evidence of dumping, injury and causal link;
• Korea’s failure to provide in the Notice of Initiation any information regarding the factors on which the allegation of injury was based,
• the way Korea granted confidential treatment to information contained in the application,
• Korea’s making of a request for information from a firm not subject to investigation, without having obtained the agreement of that firm and having notified the Indonesian Government of such request,
• Korea’s rejection of information related to the sales of a certain firm, without explaining the reason.
• Korea’s preliminary determination, in such respects as: like products, constructed value, best information available, denial of access to information, and the refusal to provide an opportunity to the exporters to present their views;
• Korea’s final determination, in such respects as: like products, individual dumping margins, constructed value, treating a certain firm and other firms as a single economic unit; the impact and effect of the dumped imports on the domestic industry and prices in the domestic market, failure to evaluate all relevant economic factors and indices, and denial of access to information.

Indonesia considers that these Korean measures are inconsistent with: Article VI of GATT 1994, inter alia, Article VI:1, VI:2 and VI:6; Articles 1, 2.1, 2.2, 2.2.1.1, 2.2.2, 2.4, 2.6, 3.1, 3.2, 3.4, 3.5, 4.1(i), 5.2, 5.3, 5.4, 5.7, 6.1.2, 6.2, 6.4, 6.5, 6.5.1, 6.5.2, 6.7, 6.8. 6.10, 9.3, 12.1.1(iv), 12.2, 12.3, Annex I, and paragraphs 3, 6, and 7 of Annex II of the Anti-Dumping Agreement.

On 16 August 2004, Indonesia requested the establishment of a panel. At its meeting on 31 August 2004, the DSB deferred the establishment of a panel. Further to a second request to establish a panel by Indonesia, the DSB established a panel at its meeting on 27 September 2004. Canada, China, the European Communities, Japan and the United States reserved their third-party rights. On 18 October 2004, Indonesia requested the Director-General to compose the panel. On 25 October 2004, the Director-General composed the panel.

On 25 April 2005, the Chairman of the Panel informed the DSB that it would not be possible for the Panel to complete its work in six months in light of scheduling conflicts, and that it expected to complete its work in July 2005.

On 28 October 2005, the Panel Report was circulated to Members. In its Report:

• The Panel found that the Korea Trade Commission (“the KTC”) acted inconsistently with relevant provisions of the Anti-dumping Agreement (“the Agreement”) in determining the margin of dumping for one Indonesian company, in failing to provide a proper disclosure of the verification results and the details of the calculations of the constructed normal values for two Indonesian companies, and in also failing to exercise special circumspection in the use of information from secondary sources instead of domestic sales data provided by these two Indonesian companies. With respect to the KTC’s injury determination, the Panel found that the KTC erred in its assessment of the impact of dumped imports on the domestic industry and in not requiring that good cause for confidential treatment be shown regarding the information submitted in the application which was by nature confidential.
• The Panel concluded that the KTC did not act inconsistently with the relevant Articles of the Agreement in resorting to facts available with respect to two Indonesian companies, in rejecting the domestic sales data submitted by these two companies, in using constructed normal values for them, in treating three Indonesian companies belonging to the same Group as a single exporter and assigning a single margin of dumping to them. With respect to the KTC’s injury determination, the Panel also concluded that the KTC did not err in its price analysis, in its treatment of the dumped imports made by the Korean producers from the subject countries and in disclosing its determination concerning the effect of the prices of dumped imports on the Korean industry.
• The Panel exercised judicial economy regarding the consequential claims raised by Indonesia, and did not address other claims withdrawn by Indonesia.
• The Panel rejected Indonesia’s request that the Panel suggest that Korea bring its measures into conformity with its WTO obligations by revoking the anti-dumping measure at issue.

At its meeting on 28 November 2005, the DSB adopted the Report of the Panel.

Implementation Status of Adopted Reports

At the DSB meeting on 20 December 2005, Korea stated that they would need a reasonable period of time to implement the DSB recommendations and rulings and that they were ready to consult with Indonesia.  On 10 February 2006, the parties informed the DSB that they had agreed that the reasonable period of time shall be eight months, expiring on 28 July 2006.

On 17 August 2006, Korea and Indonesia notified the DSB of an Understanding regarding procedures under Articles 21 and 22 of the DSU. On 26 October 2006, Indonesia requested consultations under Article 21.5 of the DSU. On 22 December 2006, Indonesia requested the establishment of an Article 21.5 compliance panel. At its meeting on 23 January 2007, the DSB agreed, if possible, to refer the matter raised by Indonesia to the original panel.

Panel Proceedings

Brief Date	Brief Description
03/01/2005	U.S. Answer to the Question from Korea (pdf)
02/02/2005	Oral Statement of the United States at the Third Party Session (pdf)
01/21/2005	Executive Summary of U.S. Third Party Submission (pdf)
01/11/2005	U.S. Third Party Submission (pdf)

Recourse by Indonesia to Article 21.5 of the DSU

Brief Date	Brief Description
04/25/2007	Oral Statement of the United States at the Third Party Session of the Substantive Meeting of the Panel with the Parties (pdf)