Anti-dumping regulations in Indonesia are designed to protect domestic industries from unfair trade practices where foreign goods are imported at prices lower than their “normal value.” This article provides an overview of the legal framework, the role of the investigating authority, and the procedural requirements for domestic industries seeking protection.
Definition and International Context
Dumping is an international trade practice condemned by the World Trade Organisation (WTO) if it causes or threatens “material injury” to an established domestic industry. Legally, dumping occurs when the export price of a product is less than the price charged in the exporter’s home market. The dumping margin (DM) is calculated as follows:
DM = NV – EP
Where NV is the Normal Value (the price paid in the exporter’s domestic market), and EP is the Export Price (the price paid for goods exported to Indonesia).
The Indonesian Legal Landscape
Indonesia’s anti-dumping regime is grounded in both international agreements and national laws:
- International Basis: The Agreement on Implementation of Article VI of GATT 1994 (the WTO Anti-Dumping Agreement).
- National Laws: Law Number 10 of 1995 concerning Customs (later amended by Law Number 17 of 2006) and Law Number 7 of 2014 concerning Trade.
- Implementing Regulation: Government Regulation (PP) Number 34 of 2011 is the primary regulation governing the procedures for anti-dumping, countervailing, and safeguard measures.
The Role of KADI
The Indonesian Anti-Dumping Committee (Komite Anti Dumping Indonesia, or KADI) is the government-sanctioned body responsible for investigating dumping allegations.7 Established in 1996, KADI reports directly to the Minister of Trade. Its core functions include:
- Investigating the existence of dumping and material injury.
- Proving the causal link between the dumped imports and the domestic industry’s losses.
- Recommending the imposition of Anti-Dumping Import Duties (AD) to the Minister of Trade.
The Investigation Process
An investigation typically follows a structured timeline as mandated by PP 34/2011:
- Standing: A petition must be supported by domestic producers representing at least 25% of total domestic production. Furthermore, those supporting the petition must account for more than 50% of the production of the group expressing an opinion (support or opposition).
- Initiation: Upon receiving a complete application, KADI has 30 working days to review the evidence and decide whether to initiate an investigation.
- Duration: Investigations generally last 12 months but can be extended to a maximum of 18 months.
- Termination: Investigations are terminated if the dumping margin is “de minimis” (less than 2% of the export price) or if the volume of imports from a specific country is less than 3% of total imports.
Submitting a Petition: Evidence and Requirements
Domestic industries filing a petition must provide comprehensive data to prove their losses. KADI requires specific injury indicators, including :
- Operational Data: Sales volumes, production levels, and inventory.
- Financial Health: Actual profits or losses, cash flow impacts, and return on investment.
- Market Impact: Domestic market share and the magnitude of the dumping margin.
- Labour and Capacity: Employment levels, wages, productivity, and capacity utilisation.
KADI often performs on-site verification visits to both the domestic petitioners and the foreign exporters to ensure the accuracy of the data provided.7
Conclusion
Indonesia utilises anti-dumping regulations as a vital “safety valve” to ensure fair competition. By adhering to WTO standards and following the rigorous procedures of PP 34/2011, KADI provides a legal mechanism for domestic producers to defend themselves against predatory pricing and unexpected import surges that threaten the stability of the national economy.
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