Case T‑111/20

PT Wilmar Bioenergi Indonesia and Others

v

European Commission

Judgment of the General Court (Fourth Chamber, Extended Composition), 14 December 2022

(Subsidies – Imports of biodiesel originating in Indonesia – Implementing Regulation (EU) 2019/2092 – Definitive countervailing duty – Article 3(1)(a) of Regulation (EU) 2016/1037 – Financial contribution – Article 3(2) of Regulation 2016/1037 – Benefit – Article 7(1)(a) of Regulation 2016/1037 – Calculation of the amount of the countervailable subsidy – Article 3(1)(a)(iv) and (2) of Regulation 2016/1037 – Action consisting in ‘entrusting’ or ‘directing’ a private body to carry out a function constituting a financial contribution – Less than adequate remuneration – Income or price support – Article 28(5) of Regulation 2016/1037 – Use of available information – Article 3(2) and Article 6(d) of Regulation 2016/1037 – Benefit – Article 8(8) of Regulation 2016/1037 – Threat of material injury to the Union industry – Article 8(5) and (6) of Regulation 2016/1037 – Causal link – Attribution analysis – Non-attribution analysis)

1. Common commercial policy – Protection against subsidisation practices of non-Member States – Discretion of the institutions – Judicial review – Limits

   (European Parliament and Council Regulation 2016/1037)

   (see paragraphs 26, 149)

2. Common commercial policy – Protection against subsidisation practices of non-Member States – Subsidy – Definition – Financial contribution by a government in the country of origin or export – Direct transfer of funds – Definition – Origin of the funds – Export levy – Setting of the reference price – Payment by a body governed by public law of the difference between the diesel reference price and the biodiesel price to the biodiesel producer – Included

   (European Parliament and Council Regulation 2016/1037, Art. 3(1)(a)(i))

   (see paragraphs 27-36, 43-60)

3. EU law – Interpretation – Methods – Interpretation in the light of the international agreements concluded by the European Union – Interpretation of Regulation 2016/1037 in the light of the 1994 GATT Anti-Dumping Agreement – Taking into account of the interpretation adopted by the Dispute Settlement Body

   (Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (1994 Anti-Dumping Agreement); European Parliament and Council Regulation 2016/1037)

   (see paragraph 39)

4. Common commercial policy – Protection against subsidisation practices of non-Member States – Subsidy – Definition – Benefit conferred on the beneficiary – Calculation of the benefit – Discretion of the Commission – Adoption by the Commission of guidelines for the calculation of the amount of subsidy – Consequences – Self-limitation of its discretion

   (European Parliament and Council Regulation 2016/1037, Art. 3(1) and (2), Art 6(d) and Art 7)

   (see paragraphs 63-68, 70-87, 90-98, 100-105, 199-211)

5. Common commercial policy – Protection against subsidisation practices of non-Member States – Subsidy – Definition – Financial contribution by a government in the country of origin or export – Regime imposing restrictions on the export of crude palm oil which render the export commercially unattractive – Included

   (European Parliament and Council Regulation 2016/1037, Art. 3(1)(a)(iv))

   (see paragraphs 111-118, 121-148, 150-152, 164, 165)

6. Common commercial policy – Protection against subsidisation practices of non-Member States – Course of the investigation – Use of the facts available where the interested parties refuse to cooperate – Discretion – No obligation to use the best possible facts

   (European Parliament and Council Regulation 2016/1037, Art. 28(1) and (5))

   (see paragraphs 155-162, 167-171)

7. Common commercial policy – Protection against subsidisation practices of non-Member States – Subsidy – Definition – Income or price support within the meaning of Article XVI of the GATT 1994 – Measures that aim to allow biodiesel producers to have access to their main raw material at a price below the world market price – Included

   (European Parliament and Council Regulation 2016/1037, Art. 3(1)(b))

   (see paragraphs 180-191, 194-197)

8. Common commercial policy – Protection against subsidisation practices of non-Member States – Injury – Threat of material injury – Proof – Analysis of the factors to be taken into consideration – Account taken of post-investigation period data – Judicial review – Manifest error of assessment – Burden of proof

   (European Parliament and Council Regulation 2016/1037, Art. 2(d) and Art 8(1), (2), (4), (5) and (8))

   (see paragraphs 217-256)

9. Common commercial policy – Protection against subsidisation practices of non-Member States – Injury – Establishing a causal link – Account taken of factors other than the subsidised imports – Relevance of such factors for establishing the causal link – Judicial review – Manifest error of assessment – Burden of proof

   (European Parliament and Council Regulation 2016/1037, Art. 1(1) and Art. 8(5) and (6))

   (see paragraphs 259-263, 266-277, 280-294)

Résumé

At the end of an anti-subsidy investigation initiated in 2018, the European Commission adopted Implementing Regulation 2019/2092 imposing a definitive countervailing duty on imports of biodiesel originating in Indonesia. ( 1 )

The Indonesian companies PT Wilmar Bioenergi Indonesia, PT Wilmar Nabati Indonesia and PT Multi Nabati Sulawesi, which produce biodiesel and export it to the European Union, brought an action for annulment of that implementing regulation.

In dismissing their action, the General Court clarifies the scope of several concepts in Basic Anti-subsidy Regulation 2016/1037. ( 2 ) In addition, it examines the impact of imports of biodiesel from Argentina on the causal link between imports of biodiesel originating in Indonesia and the threat of material injury to Union industry.

Findings of the Court

First of all, the Court rejects the complaint alleging a manifest error of assessment on the part of the Commission inasmuch as it concluded that the payments made by the Oil Palm Plantation Fund, a public body, to Indonesian biodiesel producers, constituted a ‘financial contribution’ by a government in the form of a direct transfer of funds, in accordance with Article 3(1)(a)(i) of the basic anti-subsidy regulation.

In that regard, the Court observes, first, that the concept of ‘financial contribution by a government’ within the meaning of that provision contains no details as to the origin of the funds transferred and thus covers all the financial means a government may actually use. It follows that the origin of the funds paid by the government to biodiesel producers has no bearing on their classification as a financial contribution. Moreover, the fact that those funds come from the export levy paid by exporting producers does not mean that when they are transferred to biodiesel producers there is no cost for the body which pays them.

Second, the Court states that in order to determine whether a direct transfer of funds may justify the imposition of a countervailing duty, the absence of consideration, or of equivalent consideration, on the part of the undertaking receiving that transfer must be taken into account. In that context, since the applicants have not proved that those payments were due in a purchase contract concluded between the Indonesian Government and the biodiesel producers, the Commission was entitled to recognise the existence of a financial contribution in the form of a direct transfer of funds.

The Court also rejects the complaints alleging that the Commission made an error in its calculation of the advantage conferred on Indonesian biodiesel producers by the payments made by the Oil Palm Plantation Fund. According to the applicants, the Commission should have determined the advantage conferred on biodiesel producers by deducting from the amount of countervailable subsidy the transport costs for the delivery of biodiesel, in accordance with Article 7(1)(a) of the basic anti-subsidy regulation. In that regard, the Court notes that, in order to calculate the amount of the subsidy, the Commission was fully entitled to rely on its Guidelines for the calculation of the amount of subsidy in countervailing duty investigations. ( 3 ) According to those guidelines, fees or costs may be deducted only if, inter alia, they are paid directly to the government during the investigation period and it is shown that their payment is compulsory in order to receive the subsidy. Those conditions being compatible with the basic anti-subsidy regulation, the applicants failed to prove both that the transport costs at issue were paid directly to the Indonesian Government and that they were compulsory.

Next, the Court holds that, by means of export restrictions on crude palm oil (‘CPO’), ( 4 ) introduced by the Indonesian Government in the form of an export tax and an export levy, and the setting of prices by a CPO producer owned by the Indonesian Government, the Indonesian Government had ‘entrusted’ or ‘directed’, within the meaning of the second indent of Article 3(1)(a)(iv) of the basic anti-subsidy regulation, CPO suppliers to provide their goods for less than adequate remuneration.

In that regard, the Court notes that that latter provision is an anti-circumvention provision and that, in order to ensure that that provision is fully effective, ‘entrusting’ must be understood as including any action of the government which amounts, directly or indirectly, to conferring on a private body the responsibility of performing a function of the type referred to in Article 3(1)(a)(i) to (iii) of that regulation, and ‘directing’ must be understood as including any act of the government which consists, directly or indirectly, in exercising its powers over a private body so that that body performs such a function. That was the situation in the present case, since the export restrictions at issue had been designed by the government with the express aim of benefiting the Indonesian biodiesel industry by keeping domestic CPO prices artificially low. Moreover, since those export restrictions had the effect of restricting the freedom of action of domestic producers of CPO by limiting their ability to decide the market on which to sell their products, the conduct of the Indonesian Government could not be regarded as a mere encouragement of domestic producers of CPO.

Moreover, those export restrictions may also be classified as subsidies in the form of ‘income or price support within the meaning of Article XVI of the GATT 1994’ within the meaning of Article 3(1)(b) of the basic anti-subsidy regulation, inasmuch as they contribute to the income received by biodiesel producers by allowing them to have access to their main raw material and main cost component at a price below the world market price. ‘Income or price support’ within the meaning of that provision encompasses any act of the government which amounts, directly or indirectly, to maintaining or increasing revenue stability or prices, and the reference to Article XVI of the GATT means that account must also be taken of the effects of that action on exports and imports.

Lastly, the Court rejects the complaints alleging that the Commission erred in finding that there was a threat of material injury to the Union industry, inasmuch as it concluded that there was a causal link between the imports from Indonesia and the threat of material injury to the Union industry, without taking into account the impact of imports of biodiesel originating in Argentina.

In that regard, the Court recalls that, in accordance with Article 8(6) of the basic anti-subsidy regulation, when examining a causal link between the injury caused to the Union industry and the imports of the subsidised product, the Commission must disregard any injury resulting from other factors and thus ascertain that the effects of those other factors are not capable of breaking the causal link that it has established. However, in order for a causal link to exist, it is not necessary for the imports of the subsidised product to be the sole cause of the injury caused to the Union industry, since the Commission may attribute responsibility for injury to the subsidised imports even if their effects are only part of wider injury attributable to other factors.

It is in the light of those considerations that the Court finds, first, that the persistence of a threat of injury linked to imports of biodiesel from Argentina does not preclude the existence of another threat of injury caused by imports of biodiesel from Indonesia. Second, since the imports from Argentina had already been the subject of countervailing measures, they were not capable of breaking the causal link between imports from Indonesia and the threat of injury to the Union industry. The Court also holds that, despite those imports from Argentina, the threat of injury caused by imports from Indonesia was significant and the causal link between those imports and the threat of injury to the Union industry could be established.

In the light of the foregoing, the Court dismisses the action in its entirety.

( 1 ) Commission Implementing Regulation (EU) 2019/2092 of 28 November 2019 imposing a definitive countervailing duty on imports of biodiesel originating in Indonesia (OJ 2019 L 317, p. 42).

( 2 ) Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (OJ 2016 L 176, p. 55), as amended by Regulation (EU) 2018/825 of the European Parliament and of the Council of 30 May 2018 (OJ 2018 L 143, p. 1) (‘the basic anti-subsidy regulation’).

( 3 ) Information from the Commission – Guidelines for the calculation of the amount of subsidy in countervailing duty investigations (OJ 1998 C 394, p. 6).

( 4 ) Crude palm oil is a production source for Indonesian biodiesel.