The Urgency of Domestic Legal Remedies in Trade Remedy Investigations: Ensuring Checks and Balances on Indonesian Investigating Authorities

The Indonesian government is currently formulating a Government Regulation on Safeguard Measures, Antidumping Measures, and Countervailing Measures (“Draft GR”). The Draft GR is intended to replace the existing provisions on trade remedies currently regulated under Government Regulation No. 34 of 2011 on Antidumping Measures, Countervailing Measures, and Safeguard Measures (“GR 34/2011”). The Draft GR incorporates several mechanisms and adjustments to the international trade practices that have not been regulated under GR 34/2011.

Key Changes in the Draft GR

A significant change in this Draft GR is the establishment of an anti-circumvention framework which was not regulated in GR 34/2011. This change will provide legal certainty regarding circumvention practices which have been a concern for many stakeholders in Indonesia. The Draft GR classifies circumvention into two categories, namely circumvention of the safeguard measures and circumvention of anti-dumping and countervailing measures. Circumvention of the safeguard measures includes trade diversion through countries exempt from such measures and alterations or modifications to the Harmonized System (“HS”) Codes for goods subject to safeguard duties. Meanwhile, circumvention of anti-dumping and countervailing measures include trade diversion through a third country, trade diversion through another company in the same country, and alterations or modifications to the HS Codes of goods subject to such duties.

Further, the Draft GR includes a new shipper review mechanism, which is a process for determining individual dumping margins or subsidy rates for exporters or producers who did not import the subject goods into Indonesia during the investigation period and have no affiliate relationship with exporters or producers that have been subject to anti-dumping or countervailing duties.

Another crucial development in this Draft GR is the mandate for further regulations regarding the procedures for calculating dumping margins and subsidy rates through ministerial regulations. The aim is to ensure that every calculation conducted by the Indonesian Anti-Dumping Committee and the Indonesian Safeguard Committee (“Investigating Authorities”) has a more concrete, comprehensive basis and can be subject to more thorough verification. As the precedent, the United States and Australia already have comprehensive regulations regarding these calculation methods. The United States, through the Tariff Act of 1930 and Title 19 of the Code of Federal Regulations (CFR) Part 351, has clearly provided guidelines to the relevant authorities on the procedures and methods for calculating export value, normal value, and other valuation mechanisms under specific circumstances. In Australia, the calculation procedures are also set forth in detail in the Customs Act 1901 and the Customs (International Obligations) Regulation 2015.

Furthermore, the Draft GR clarifies the duration of the imposition of anti-dumping duties and countervailing duties. Previously, GR 34/2011 did not specify a minimum duration for the imposition of such duties, while the Draft GR sets a minimum duration of three years. 

The Draft GR also expands the scope of safeguard measures by adding industrial safeguard measures. These measures are defined as safeguard measures taken in response to global competition that causes injury to the domestic industry as referred to in the laws and regulations on the industrial sector.  However, it does not elaborate on the distinction between the scope of industrial safeguard measures and trade safeguard measures. The WTO Agreement on Safeguards does not have this differentiation.

Recommendation to be Added in the Draft GR

1. Countervailing Measures Details Provision
   We recommend the Government also clarify the procedure of the countervailing investigation in the Draft GR. In fact, Indonesia has not utilized this tool to protect national interests, at least in recent years, while Indonesian products have frequently been the target of subsidy investigations by other countries. The Draft GR should include more comprehensive provisions regarding countervailing measures.
   
   
2. The Urgency of Domestic Appeal Mechanisms and/or Legal Remedies
   Under GR 34/2011 and the Draft GR, objections to trade remedy measures may only be filed through the World Trade Organization’s Dispute Settlement Body (“WTO DSB”). Although this is in accordance with the Anti-Dumping Agreement and the Safeguards Agreement, such mechanisms cannot always be applied due to its Government-to-Government nature, which makes it highly complicated and requires significant time and resources. The most significant challenge is the current situation, in which the WTO Appellate Body cannot perform its duties due to the United States’ blockade on the appointment of Appellate Body judges. Therefore, the Government, through the Draft GR, needs to establish and regulate an alternative mechanism to protect the legal interests of interested parties by the establishment of an objection mechanism and/or domestic legal remedies.
   A domestic objection and/or legal remedy mechanism is essential as a form of checks and balances over the investigation process conducted by the Investigating Authorities. This is important to ensure that the Investigating Authorities always conduct investigations properly and fairly, and to uphold the implementation of investigation principles under the Anti-Dumping Agreement and the Safeguards Agreement, as well as generally accepted accounting principles, both local and international. This mechanism is necessary as the Government must ensure that justice is effectively and efficiently accessible to all parties through mechanisms that are available to the general public.
   Such domestic objection and/or legal remedy mechanisms have been implemented in various countries and it is  crucial that they are adopted in Indonesia as well. The United States, India and Australia are examples of countries that have special tribunals for international trade. In the United States, the United States Court of International Trade (“USCIT”) is a specialized domestic tribunal whose authority includes handling lawsuits against the results of trade remedy investigations issued by the United States Department of Commerce and the United States International Trade Commission. In such cases, the USCIT may affirm, reverse, or remand the case to the trade remedy authorities. In India, the appeal mechanism regarding import duties on trade remedies may be filed through a specialized tribunal known as the Customs, Excise, and Service Tax Appellate Tribunal. Further, in Australia, they implement a dispute settlement mechanism through a panel called the Anti-Dumping Review Panel (“ADRP”). The ADRP may uphold the authority’s decision or request the Minister to revoke the decision and replace it with a new decision. While in Malaysia, the general courts have the authority to order the investigating authority to conduct a reinvestigation and recalculate the anti-dumping duties.

The Draft GR is still under discussion among ministries and stakeholders. We expect that the Government will take the above recommendation seriously, as we also have submitted our input regarding the Draft GR directly to the Ministry of Trade and the Ministry of Law on April 1, 2026.

Note: The content of this article does not constitute legal advice and should not be relied upon since there will be implemented regulations to be further issued. If you need specific advice related to this topic, please contact us by email at info@yangandco.com.