REQUEST OF INDONESIA
A. REQUEST OF INDONESIA
6.3 First, Indonesia argues that the Panel should change its findings regarding the KTC's calculation of the constructed normal values for Indah Kiat and Pindo Deli. More specifically, Indonesia submits that the KTC acted inconsistently with Articles 2.2, 2.2.2, 6.8 and paragraph 7 of Annex II of the Agreement by using interest expenses relating to a production company, [[Company B]], for CMI which was merely a trading company.
6.4 Korea responds that financial expenses incurred by a company is independent of its size and activities. Korea also submits that it was proper for the KTC to use [[Company B]]'s financial expenses for CMI because these expenses included both production and sales-related components.
6.5 We note that in our discussion of this claim in our interim report (infra, paras. 7.99-7.105), we addressed what we perceived to be the main arguments developed by Indonesia in this regard. At interim review, however, Indonesia drew our attention to certain additional arguments (infra, para. 7.108) regarding the calculation of interest expenses for CMI, which we had not addressed in our interim report. Although these arguments could, in our view, have been raised in a more coherent manner, we nevertheless felt obliged to address them and have accordingly revised our finding with respect to this claim, as contained in paragraphs 7.106-7.112 below.
6.6 Second, Indonesia contends that the Panel should clarify whether or not its findings in paragraphs 7.35 and 7.45 refer to its factual finding in paragraph 7.31 that the Sinar Mas Group failed to allow the KTC investigators access to CMI's accounting records other than its financial statements during verification. Korea submits that the Panel made the necessary findings in this regard. We note that our findings in paragraphs 7.35 and 7.45 cited by Indonesia are clearly based on our factual finding in paragraph 7.31 that the Sinar Mas Group failed to allow the KTC investigators access to CMI's accounting records other than its financial statements during verification. We therefore need not make additional findings in this regard.
6.7 Third, Indonesia argues that the Panel failed to make a factual finding to acknowledge the fact that Indah Kiat and Pindo Deli provided certain CMI records, including documents relating to certain sample transactions. Citing paragraph 7.31 below, Korea contends that the Panel made the necessary finding in this regard. We modified paragraph 7.36 of our report to emphasize the fact that information relating to sample transactions between CMI and independent buyers were submitted by Indah Kiat and Pindo Deli.
6.8 Fourth, Indonesia contends that the Panel did not address some of Indonesia's arguments regarding the meaning of the term "verifiable" under paragraph 3 of Annex II. Korea disagrees and submits that the Panel properly discussed Indonesia's arguments in this regard. We note that in paragraphs 7.59-7.67 below, we discussed Indonesia's arguments under paragraph 3 of Annex II regarding the verifiability of the domestic sales data provided by Indah Kiat and Pindo Deli. We therefore decline to make additional findings in this regard.
6.9 Fifth, Indonesia argues that the Panel should clarify its statement in paragraph 7.67 below that
a comparison of the list of sales from Indah Kiat and Pindo Deli to CMI on the one hand, and the list of sales between CMI and independent buyers on the other could not have assured the KTC investigators about the completeness of the domestic sales data because this comparison would not shed enough light on the values of the domestic sales transactions. Indonesia re-cites specific arguments it had raised in this regard during these proceedings. Korea disagrees and submits that the Panel has properly addressed Indonesia's arguments on this matter. We note that in paragraphs 7.59-
7.67 below we discuss in detail the issue of whether the domestic sales data submitted by Indah Kiat and Pindo Deli were verifiable within the meaning of paragraph 3 of Annex II. In our view, this discussion addresses the relevant arguments parties raised on this issue. We therefore decline to make additional findings in this regard.
6.10 Sixth, Indonesia seeks clarification from the Panel as to whether the Panel's statement in paragraph 7.70 below that "[a]ccuracy ... goes beyond verifying the completeness of domestic sales data and concerns a broader range of information, including CMI's costs associated with the sales of the subject product and its prices" implies that the absence of CMI's cost information was relevant to the question of the accuracy of domestic sales. Korea has made no specific argument in this regard. The statement cited by Indonesia is part of our analysis regarding the issue of whether the record supports the proposition that the sole purpose of requesting CMI's financial statements and accounting
6.11 Seventh, Indonesia argues that the Panel failed to address Indonesia's argument that the KTC failed to explain the reasons for its decision to reject the domestic sales data submitted by Indah Kiat and Pindo Deli and to use facts available instead. Indonesia requests us to append a footnote to paragraph 7.73 below to indicate that Indonesia raised such an argument. Korea responds that Indonesia should not be allowed to raise a new argument at the interim review stage. Korea also submits that the KTC did in fact explain the reasons for its decision to reject the domestic sales data presented by Indah Kiat and Pindo Deli. In our view, the assertion that the KTC failed to explain the reasons for its decision to reject the domestic sales data submitted by Indah Kiat and Pindo Deli is inherent in the way we characterized Indonesia's arguments in this regard in paragraph 7.73 of our report. We note that, in paragraph 7.83 below, we expressed our view as to whether the KTC explained the basis of its decision to reject the mentioned domestic sales data. We therefore decline to make additional findings in this regard.
6.12 Eighth, Indonesia requests the Panel to revise its findings in paragraphs 7.79-7.80 below to reflect the fact that the Provisional Report demonstrates that the KTC applied the ordinary course of trade test under Article 2.2 of the Agreement. Korea submits that the fact that the KTC applied the mentioned test in its Provisional Report is legally insignificant as it did not mean that the KTC would not later on decline to use the domestic sales data submitted by Indah Kiat and Pindo Deli in its normal value determinations. Although we do not find it relevant to our legal analysis, we nevertheless appended footnote 152 to paragraph 7.80 to accommodate Indonesia's request, i.e. to acknowledge the fact that in the Provisional Report the KTC did in fact apply the mentioned test.
6.13 Ninth, Indonesia asked for clarification regarding the Panel's interpretation of the term "etc." used in the KTC's Preliminary Dumping Report, quoted in paragraph 7.81 below. Korea submits that no clarification is needed in this regard. We made a slight modification to paragraph 7.81 to accommodate Indonesia's concern.
6.14 Tenth, Indonesia requested a typographical change to paragraph 7.83 below, which we made.
6.15 Eleventh, Indonesia objects to our statement in footnote 185 and argues that the Panel has not addressed its argument that the single entity consisting of the three Sinar Mas Group companies should have been given the rights under paragraph 6 of Annex II. Korea submits that our findings in this regard are sufficiently clear, hence no modification is needed. In order to address Indonesia's concern regarding the specific issue of whether or not the single entity should have been given the rights under paragraph 6 of Annex II, we modified the text of footnote 185.
6.16 Twelfth, Indonesia raised a question regarding the basis of one of our statements in paragraph 7.165 below. Korea submits that no modification is needed to the statement cited by Indonesia. We modified the wording of the mentioned statement in order to address Indonesia's concern.
6.17 Thirteenth, Indonesia submits that in connection with its finding in paragraph 7.210 below, the Panel should explain how the KTC's obligation not to disclose confidential information would allow its refusal to disclose (1) why the reported domestic sales data were rejected, (2) the reasoning relating to the methods provided for under Article 2.2 of the Agreement, and (3) the details relating to the calculation of the normal values for Indah Kiat and Pindo Deli. Korea has raised no specific arguments in this regard. We note that Indonesia repeats the arguments that it has raised on this issue in the course of these proceedings. We therefore decline to make any additional findings in this regard.
6.18 Fourteenth, Indonesia requests the Panel to modify the quotation from Indonesia's response to
Indonesia's request. Regarding the substantive arguments Indonesia raises, we are of the view that we have addressed Indonesia's arguments relevant to the resolution of the mentioned claim. We therefore decline to make any additional findings in this regard.
6.19 Fifteenth, Indonesia contends that the Panel has failed to explain how it found that the KTC properly analyzed whether or not dumped imports had "significant" price undercutting, "significant" price depression or "significant" price suppression on the prices of the Korean industry. Our findings on this issue are found in paragraphs 7.252-7.253 below. As we stated in paragraph 7.253, we do not interpret Article 3.2 of the Agreement to require that the word "significant" appear in the IA's determination. We therefore decline to make any additional findings in this regard.
6.20 Sixteenth, Indonesia requests the Panel to revise its finding that Indonesia's claim regarding the KTC's volume analysis is not within its terms of reference. In this context, Indonesia argues that the Panel collapsed the issue of the increase in the volume of dumped imports from 2002 to the first half of 2003 with the issue of the calculation of domestic consumption. Indonesia submits that it is not clear whether the Panel's conclusion in paragraph 7.264 applies to both of these issues. We note that in the mentioned paragraph, we found Indonesia's claim regarding the KTC's volume analysis to
be outside our terms of reference. That obviously applies to all arguments raised by Indonesia to support that claim, including its argument relating to the increase in the volume of dumped imports from 2002 to the first half of 2003 and the calculation of the domestic consumption. We therefore decline to make any additional findings in this regard.
6.21 Indonesia also argues that it is not clear whether Korea raised such a jurisdictional issue before the Panel. Korea submits that even if this was not requested by Korea, the Panel correctly considered this jurisdictional issue sua sponte. We discussed Korea's request in this regard in paragraphs 7.255 and 7.256 below. We also note our statement in paragraph 7.257 that even if this issue was not raised by Korea, we would have to address it on our own motion. We therefore decline to make any additional findings in this regard.
6.22 Indonesia argues that its claim regarding the KTC's volume analysis should be found to be within the Panel's terms of reference through its claim under Article 3.2 concerning the impact of dumped imports on the prices of the domestic industry and the one under Article 3.4 regarding the consequent impact of those imports on the state of the domestic industry. Korea disagrees with Indonesia in this regard. We note that we have analyzed Indonesia's request for the establishment of a panel with sufficient care in deciding whether or not its claim on the volume of dumped imports was properly raised in it. We do not consider Indonesia's comments to be convincing to require us to change our analysis in this regard. We therefore decline Indonesia's request.
6.23 Indonesia submits that the issue of whether the KTC excluded from the domestic industry all domestic producers that imported the subject product from the subject countries, raised in paragraph 116 of its second written submission, is not related to the KTC's volume analysis. Indonesia submits that this claim has to do with the KTC's obligation to carry out a WTO-consistent price analysis under Article 3.2 and the analysis under Article 3.4 of the Agreement. As stated above, we are not convinced by Indonesia's proposition that its claim regarding the calculation of domestic consumption has been properly raised in its request for the establishment through its other claims under Article 3.2 or 3.4. We therefore decline to change our finding in this regard.
6.24 Seventeenth, Indonesia argues that the Panel exercised false judicial economy with respect to its claim regarding the KTC's causation analysis. Korea disagrees with Indonesia in this regard. As we explained in paragraph 7.277 below, we applied judicial economy with respect to this claim
6.25 Finally, Indonesia requests the Panel to make factual findings on two issues: (1) that CMI's financial statements submitted by the Sinar Mas Group on 9 April 2003 were part of the record of the investigation at issue, and (2) that the verification report submitted by Korea as Exhibit KOR-7 was not part of the record. Korea submits that the Panel should not make any further findings with regard to these two issues. We note that we made the necessary factual findings on these two issues in paragraphs 7.38 and 7.181 of our report. We therefore decline to make any additional findings in these regards.