Commission Implementing Regulation (EU) 2022/433 of 15 March 2022 imposing definitive countervailing duties on imports of stainless steel cold-rolled flat products originating in India and Indonesia and amending Implementing Regulation (EU) 2021/2012 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of stainless steel cold-rolled flat products originating in India and Indonesia

(575) The Indonesia-China Program shows that both governments identified the key areas (129) of cooperation, which, amongst others, were included mining, metallurgical industry and Industrial parks (including special economic zones). In the actions devoted to mining, in section 2.4.2, GOID and GOC expressly agreed to ‘Collaborating in the exploration, refineries and processing of mineral resources, including …nickel...’, ‘Expediting and facilitating bilateral cooperative on mining and metallurgical projects’, ‘Promoting the development of mineral resources by building dedicated industrial parks and zones in the six economic corridors…’, ‘Collaborating in the development of mineral resources in Indonesia’.

(576) In section 2.7.8 of the Indonesia-China Program, addressing the Metallurgical Industry, the GOID and GOC had specifically agreed to ‘Encourage Chinese metallurgical producers to make direct investments in Indonesia, to utilize Indonesia’s natural resources and to invest in the form of integrated metallurgical industrial parks to help improving its metallurgical industry chain and increase the value added of mineral projects’ (130). The Program equally confirms that Chinese metallurgical producers are encouraged to form joint ventures with Indonesian companies. In section 2.9 on Industrial parks (including special economic zones), the GOID and GOC agreed on the Promotion of industrial parks, ‘encourage Chinese’s enterprises to invest in Indonesia industrial parks…’, ‘…facilitate and provide policy support in the development of industrial parks’. Thus, the GOID actively sought and accepted the policy support granted by the GOC to the specific projects such as the industrial park in Morowali.

(577) On 27 March 2015 both governments released the ‘Joint Statement on strengthening comprehensive strategic partnership between the PRC and Indonesia’ (131). In this statement ‘…Both sides pledged to actively implement the Five-Year Development Plan of China-Indonesia Economic and Trade Cooperation and to finalize the list of priority projects at an early date with a view…’. Similarly, both governments ‘… held the view that the initiative of the 21st-Century Maritime Silk Road proposed by President Xi Jinping and the strategy of the Global Maritime Fulcrum initiated by President Joko Widodo are highly complementary to each other’. Likewise both governments ‘…promised to speed up the construction of China-Indonesia Integrated Industrial Parks and establish the inter-governmental coordinating committee as soon as possible.’ The Indonesian side ‘…. will introduce preferential policies for the industrial parks to provide safeguard and facilitation for more Chinese enterprises to enter the park in accordance with the Indonesian laws and regulations, so as to accelerate the development of the Industrial Parks.’, and China committed to ‘…continue to provide financing support for Indonesia’s infrastructure construction and large projects through bilateral and multilateral financial channels.’

(578) On 7 May 2018, the GOID and GOC signed the Memorandum of Understanding ‘on promoting cooperation on the development of regional comprehensive economic corridors’ in which both side agreed to undertake cooperation on developing inter alia North Sulawesi. In this Memorandum, both sides agreed to ‘mobilize and coordinate relevant governmental agencies, qualified enterprises and institutions to participate in the formulation of the development plan for these corridors.’

(579) On 23 October 2018 the GOID and the GOC signed a Memorandum of Understanding ‘on establishing a joint steering committee for the development of regional comprehensive economic corridors’. This Memorandum set up the organisational structure of the cooperation: joint secretariat, joint working groups, working mechanisms, steering committee, etc. Once again, this structure shows that the bilateral cooperation framework is jointly implemented through specific joint administrative bodies.

(580) The above bilateral agreements and documents show that the bilateral cooperation materialised in agreements specifying the terms and the contribution of each government. The details on the financing, the management through IMIP and the other bilateral administrative mechanisms will be described in the following sections. However, the documents covered in this section confirm that the two governments put in place specific agreements to implement their preferential policies in favour of the specific industries and projects covered by this cooperation. They show that the policies to favour the development of the nickel ore processing industry and of the downstream stainless steel industry in Indonesia by inducing the Chinese investment via Chinese preferential support are specifically covered. The IRNC Group was a clear beneficiary of these policies agreed under the bilateral cooperation.

(581) The above agreements and documents show the framework of the cooperation between Indonesia and China and the evolution and constant deepening of such cooperation over the years. This deepening cooperation permits Chinese investment and companies to benefit from Indonesia’s raw materials and geographical location. The Chinese side provides financing for investments in the selected ‘corridors’ under the Belt and Road Initiative (‘BRI’), while the Indonesian side actively maintains a conducive legislative, policy and political framework to encourage projects to be implemented in specific parts of its own territory. The setting up of the Morowali Park in the Sulawesi Province and the establishment of the main exporting producer fully integrated therein took place within this framework and context, as explained in further details in the following sections.

(582) One of the pillars of the bilateral cooperation on the stainless steel industry was that the Chinese side would provide preferential financial support to Chinese companies in order to develop the stainless steel industry in Indonesia. This was a condition imposed by Indonesia to give access to the Chines companies to its large reserves of nickel ore suitable for their production process.

(583) As seen above, already back in 2005 in the context of the Joint Declaration between Indonesia and China on strategic partnership the Chinese government highlighted the need to protect the interests of investors to achieve a profit, and show that in the previous years the Chinese government had always ensured that this objective would be achieved. These were the years in which the Chinese ‘going out’ policy was being successfully deployed after its introduction in 1999 in order inter alia to promote and incentivise Chinese foreign investment and export expansion.

(584) Article 3.1.10 of the Plan of Action 2010 in the context of ‘Financial cooperation’ states that the two sides will ‘strengthen regular bilateral consultations and coordination to expedite the utilization and implementation of the Preferential Exports Buyer’s Credit facility, Concessional Loan and other development support financial schemes.’

(585) It has been reported in the press (132) that already in 2011 the Industrial and Commercial Bank of China (ICBC) and the Bank of China committed to provide a USD 8 billion capital loan to China-based companies wanting to invest in Indonesia.

(586) The main document sanctioning the Chinese provision of preferential funding was the written Agreement between the GOID and the GOC of 29 April 2011 on expanding and deepening the bilateral economic and trade cooperation. Article VI unequivocally states that ‘The Parties agree to encourage their respective financial and insurance institutions to give priority to financing and insurance support for those projects […]’.

(587) The Indonesia-China Program for Economic and Trade Cooperation of 2 October 2013 also explicitly states in Chapter V on Financial Services, at Point 5.2.1, that ‘Chinese financial institutions are encouraged to support financing for investment and project construction undertaken by Chinese-funded enterprises in Indonesia with respect to domestic laws and regulation’.

(588) As explained in the previous section, the financing was provided in the context of the main objective of the bilateral cooperation ‘to encourage competitive and reputable Chinese enterprises and financial institutions to participate in the development of six economic corridors in Indonesia and the project listed in the GOI[D]’s MP3EI and to encourage competitive and reputable Indonesian enterprises in the development of the GOC’s 12th five year plan’ (133). The reference to the respective domestic preferential policies, including for their stainless steel industry, tie in with the objective to provide preferential financing to achieve the bilateral agreement on the Morowali Industrial Park in favour of the stainless steel industry.

(589) During the Indonesia/China summit at the presence of the respective Presidents of State, on 2 October 2013 the founding shareholders of IMIP, PT Bintangdelapan Investama (‘BDI’) and Shangai Decent Investment Group (‘SDI’) (see recitals (626) and (777)), signed an investment and financing agreement with the China-ASEAN Investment Cooperation Fund (CAF) to develop activities in the Morowali Park (134). The China-ASEAN Fund (CAF) is an offshore equity fund approved by the State Council of the Peoples Republic of China and the National Development and Reform Commission. The establishment of the fund is sponsored by the Export-Import Bank of China together with other Chinese and international institutional investors. CAF focuses on investment in infrastructure, energy and natural resources sectors in the ASEAN, and serves as the pioneer to promote the ‘South-South Cooperation’ between China and the emerging markets, and facilitates the ‘going out’ strategy for the Chinese enterprises.

(590) It was also reported that during the visit of the Chinese President in Indonesia in October 2013, 23 agreements were signed, covering in particular nickel. Of that figure, as much as 60 percent entered the manufacturing industry sector with a total investment of USD 32,8 billion (Rp 36,1 trillion) (135). This further demonstrates that the GOID directly sought the Chinese financing in the nickel industry.

(591) The joint statement of March 2015 reaffirmed the GOC commitment to ‘…continue to provide financing support for Indonesia’s infrastructure construction and large projects through bilateral and multilateral financial channels.’

(592) Furthermore, it has been reported by the chairman of IMIP, the company managing the Morowali Industrial Park where the exporting producer IRNC is located, that the ‘project’ (park and the related tenants) ‘had easy access to mid- and long-term financing. When the project was in its earliest days, policy banks including China Development Bank, the Export–Import Bank of China, and state-owned Chinese banks including Bank of China pitched in with mid- and long-term financial support.’ (136)

(593) Finally, it is clear that the GOID could not have been ignorant of the provision of such preferential financing by the Chinese banks, as its officials were present on several occasions to witness the signature of such financing. One example was already provided in recital (589) above. Another example relates to the signature by ITSS and PT. Dexin Steel Indonesia (DSI), another related company located in the IMIP Park, of a Term Loan of 170 million USD and a Memorandum of Understanding with China Development Bank in the evening of May 7, 2018. This took place at a dinner party of the Indonesia-China Business Summit hosted by Premier Li Keqiang of China and Vice President Jusuf Kalla of Indonesia.

(594) These written documents, statements and actions confirm in an unequivocal manner that the GOID actively sought, adopted and acknowledged the preferential financial support provided by the GOC as its own. Rather than providing such a support directly, the GOID set up a bilateral cooperation framework with the GOC to ensure that the GOC, in order for Chinese companies to secure the necessary supply of nickel ore, provided preferential financing for the investment of Chinese companies in Indonesia in the context of preferential policies. As the investigation has shown (see Section on IMIP and Section on preferential financing), the IRNC has been a major beneficiary of this preferential financing provided by the Chinese policy and State-owned banks to finance the construction and operating activities of the smelters and related downstream stainless steel producers in the Morowali Industrial Park.

(595) With regard specifically to the nickel ore processing and stainless steel industry, the close cooperation between the GOID and the GOC within the territory of the exporting country culminated with the establishment and operation of the Morowali Industrial Park. The GOID and the GOC provided the stainless steel companies manufacturing in this Park with favourable conditions that confer benefits to them. This pooling of resources via such close cooperation serves a common purpose and benefits a common beneficiary, that is the IRNC Group (137).

(596) The Morowali Park is an industrial park focused on building a fully integrated stainless steel industry, from mining of nickel ore to the final downstream stainless steel product. The park is located in Bahodopi, Morowali district, Central Sulawesi Province.

(597) The main cooperating Indonesian exporting producer, IRNC, is located in the Morowali Park. The park covers an area of 2 500 ha and includes 29 tenants, out of which more than half of the tenants are related to IMIP. The main investor in IRNC and IMIP is the Chinese Tsingshan Steel Group.

(598) The relevant bilateral regulatory framework mentioned before shows that Indonesia and China agreed to set up and develop a special area in the Morowali Industrial Park to support eligible companies to implement their cooperation. The Morowali Park benefited from the status of a recognised industrial estate subject inter alia to the preferential Indonesian domestic rules for industrial estates.

(599) It is noteworthy that the Morowali Park is classified by the GOC as an Economic and Trade Cooperation Zone in Indonesia (138).

(600) While the cooperation to develop IMIP was first announced at a 2013 summit between China’s president, Xi Jinping, and Indonesia’s then-president, Susilo Bambang Yudhoyono, its development can be traced back to 2007, when Bintangdelapan Group started its mining operations in a 47 000-hectare concession in Morowali (139). The company approached Chinese investors to invest in nickel-based mining activities as China was at the time the largest market for Indonesia’s nickel export (140).

(601) In 2009, and thus coinciding with the stricter measures to keep nickel ore in Indonesia contained in the 2009 Mining Law, BDI and SDI formed a joint venture to develop the mining industry in the area. The two parties formed PT Sulawesi Mining Investment (SMI), involved in the production and export of nickel ore mainly to China. This partnership was in line with the ‘going out’ policy of SDI. It has been reported on the website of SDI that ‘to actively implement the “going out” policy SDI established a partnership with SMI in 2009 to be a pioneer in mining and exporting of Indonesia nickel ore and ferronickel smelting and invested in the construction of PT IMIP which is of great importance to exonomic cooperation between China and Indonesia and between China and ASEAN’ (141).

(602) The Joint Communiqué on further strengthening China-Indonesia strategic partnership of 29 April 2011 stated that ‘The Chinese side also hopes to strengthen the cooperation with the Indonesian side on the development of the Economic and Trade Cooperation Zone’.

(603) In May 2011, it was reported that the Indonesian Investment Coordinating Board (BKPM) requested Chinese investors to invest in the processing of mining commodities (including nickel in Southern East of Sulawesi): ‘The Investment Coordinating Board (BKPM) is directing potential investors to invest in mining product processing. (…) In addition, BKPM also asked China to invest in nickel processing in Southeast Sulawesi’ (142). Furthermore, for a project that involved building an aluminium smelter, constraints regarding acquisition of land were highlighted. This shows again the GOID’s push to obtain Chinese investment in Indonesia.

(604) The GOID-GOC Five-Year Development Program for Economic and Trade Cooperation of 2 October 2013 in its Section 2.9 on Industrial Parks (including Special Economic Zones (SEZ)) states: ‘Encourage Chinese enterprises to invest in Indonesia Special Economic Zones, Economic and Technological Development Park, Economic and Trade Cooperation Park, Industrial Parks, Technology Demonstration Area, and other forms of industrial parks. The two sides agreed that the Government would facilitate and provide policy supports in the development of Industrial Parks’.

(605) The two Governments also signed on 2 October an Agreement on Indonesia-China Integrated Industrial Parks. Article V specifies the Policy Supports agreed by the countries: ‘The Government of the People's Republic of China confirms to provide relevant support and facilitation for the construction, business attraction and operation of the Industrial Parks in compliance with the prevailing laws, regulations and policies of both Countries. The Government of Indonesia will endeavour to provide support and facilitate on measures in compliance with its national prevailing laws, regulations and policies. The details of the support policies shall be decided through bilateral discussions.’

(606) Furthermore, in addition to the ‘Indonesia-China Program’ both governments signed on the same day, 2 October 2013, another bilateral agreement specifically devoted to the development of integrated industrial parks in Indonesia. Under Article 1 of this agreement, the GOID and the GOC agreed to ‘support the establishment of Indonesia-China Integrated Industrial Parks in Indonesia’ which ‘shall be prioritized to be established in the Indonesia's mineral resource-rich regions’.

(607) In this agreement, the GOC committed to ‘provide relevant support and facilitation for the construction, business attraction and operation of industrial parks in compliance with the prevailing laws, regulations and policies of both countries’ (143). At the same time, the GOID declared that it would ‘endeavour to provide support and facilitate on measures in compliance with its national prevailing laws, regulations and policies’ (144).

(608) An important bilateral document regulating the Morowali Park was the Agreement between the GOC and the GOID on the Indonesia-China Integrated Industrial Parks of 2013 (‘Agreement on Integrated Industrial Parks’). Article 1 states that ‘The objective of this Agreement is to support the establishment of Indonesia-China Integrated Industrial Parks in Indonesia’, hereinafter referred to as ‘Industrial Parks’. ‘The Industrial Parks shall be prioritized to be established in the Indonesia's mineral resource-rich regions.’ Article 3.1 states that ‘The scope of cooperation of this Agreement shall cover the coordination, facilitation and consultation on the establishment of Industrial Parks.’ Chapter V of this Agreement on ‘Policy support’ states at Article 5.1 that ‘The Government of the People's Republic of China confirms to provide relevant support and facilitation for the construction, business attraction and operation of the Industrial Parks in compliance with the prevailing laws, regulations and policies of both Countries.’

(609) During the bilateral summit on 3 October 2013, Chinese President Xi conveyed a plan to construct a 21st-century maritime silk road. On the previous day of the summit, on 2 October 2013, the Indonesian and Chinese governments signed the ‘Indonesia-China Five-Year Development Program for economic and trade Cooperation’ and the ‘Agreement between the Governments of the People’s Republic of China and the Government of the Republic of Indonesia on the Indonesia-China Integrated Industrial Parks’. These cooperation agreements are to be embodied by selected priority projects.

(610) The China/Indonesia Joint Statement on Strengthening Strategic Partnership of March 2015 stated that the GOID ‘…. will introduce preferential policies for the industrial parks to provide safeguard and facilitation for more Chinese enterprises to enter the park in accordance with the Indonesian laws and regulations, so as to accelerate the development of the Industrial Parks’.

(611) Further to the Joint Statement, the GOID introduced a Regulation No. 142/2015 on Industrial Estates to replace an earlier Regulation on Industrial Estates from 2009 so as to bring it in line with the bilateral Joint Statement of 2015 and with the 2013 bilateral Agreement on Integrated Industrial Parks. This Regulation sets out the main incentives for companies that set up in these Industrial Estates such as the IRNC Group in Chapter 8. They included Article 4(i), which stated that the authorities of the Minister cover the ‘stipulation of guidelines on reference sales price or rent of Industrial blocks and/or buildings within an Industrial Estate based on Industrial Estate Committee proposals’. Article 41(1) provided that ‘An Industrial Estate Company and an Industrial Company located at an Industrial Estate is granted taxation incentives’. Article 45(1) stipulated that ‘The Government may initiate the development of Industrial Estates as Industrial infrastructure (a) in the event the private sector is not interested in nor unable to develop an Industrial Estate; and/or (b) to accelerate the spread and even distribution of Industrial development’. Furthermore, the GOID implemented tight involvement and monitoring of the companies managing these Estates via the body foreseen in Article 51(1): ‘For the purpose of supporting Industrial Estates development, Industrial Estate Committee is established’.

(612) The comprehensive processing integration of the park aligns with the policy development objectives of the GOID. Specifically, the smelting facilities comply with the legal requirements of 2009 Mining Law and the related regulations regarding value-added to primary material from the Ministry of Industry. Under this law and regulations, nickel ore mining companies must build their own smelters capacities with the objective of developing higher value-added industries in Indonesia (see previous section).

(613) The development of the Morowali Park encompasses key elements, which are set as a priority by the GOID in its development plans. In this sense, the Morowali Park is situated in the strategic geographical area of Sulawesi, operates in the encouraged steel sector, foster upstream and downstream integration and enhance the creation of value added of natural resources and mining, namely nickel.

(614) From a geographical perspective, the Morowali Park is situated in the Sulawesi (145) corridor, one of the six economic corridors identified and promoted by the Government of Indonesia as axes of the country’s economic development plans. Nickel mining is identified as one of the sectors to substantiate the development of the area.

(615) The Morowali Park has been granted a special formal status by both the Indonesian and Chinese authorities.

(616) The Indonesian government officially granted the status as a National Strategic Project (146) (‘PSN’). This is relevant from two perspectives, the development of priority industrial areas/special economic zones and smelter development projects. PSNs are selected in line with the development policies in Indonesia, receives a close monitoring from the government and are eligible to be provided with certain privileges (147). Furthermore, having the status of a PSN, IMIP was allowed to begin the development of the industrial complex and to start building the plants while waiting for the building construction permit.

(617) The Chinese Government, and in particular its Ministry of Commerce, formally recognised the Morowali Park as a designated overseas trade and economic cooperation zone in 2016 (148), and de facto as early as 2009 (149).

(618) According to MOFCOM’s website (150), formal recognition of an overseas economic and trade cooperation zone refers to an industrial park with complete infrastructure, clear leading industries, sound public service functions and concentrated and radiated effects for investment and construction of Chinese-owned enterprises registered within the territory of the PRC. In carrying out the construction of an overseas economic and trade cooperation zone, an enterprise shall, in accordance with the relevant provisions on overseas investment, complete the formalities for the record or approval of the state's foreign investment in china, obtain the certificate of overseas investment of an enterprise issued by the competent department of commerce, and complete the relevant registration procedures in accordance with the laws of the host country, and establish an enterprise in the cooperative zone. The construction enterprise acquires the land by purchasing or leasing the land and completes the complete land legal procedures. The enterprises in the construction area shall formulate clear plans for the construction and operation of the park and the industrial orientation, complete the infrastructure construction of water, electricity and roads required for the park, and formulate clear service guidelines for the enterprises entering the zone to attract enterprises to invest and produce in the area.

(619) As expressed in one article, ‘Under the government departments’ guidance in the framework of the “One Belt, One Road”, and in connection with the host country strategy at the highest level, overseas cooperation zones have become a vehicle to implement the “One Belt, One Road” and international production capacity cooperation’ (151). This corridor is also eligible under the BRI as one of the areas encouraged by this instrument.

(620) The above framework confirms that establishment and development of the Morowali Park took place under a special regime framed by legislation pertaining to industrial estates with the aim to promote the industrialisation and development of Indonesia through industrial parks. This legal framework provides various advantages and specific support from the Indonesian authorities, such us the facilitation of licensing, provision of infrastructures and tax incentives. This was confirmed by the findings of the investigation as detailed in the next sections (152). Moreover, through its actions, the GOID unequivocally sought the preferential financial support of the GOC to companies in the Morowali Park and adopted such support as its own.

(621) The entity developing and managing the Morowali Park is an Indonesian company, PT Indonesian Morowali Industrial Park (‘IMIP’). This was established and incorporated under Indonesian law in September 2013.

(622) While the cooperation to develop IMIP was first announced at a 2013 summit between China’s president, Xi Jinping, and Indonesia’s then-president, Susilo Bambang Yudhoyono, its development can be traced back to 2007, when Bintangdelapan Group started its mining operations in a 47 000-hectare concession in Morowali (153). The company approached Chinese investors to invest in nickel-based mining activities as China was at the time the largest market for Indonesia’s nickel export.

(623) In 2009, BDI and SDI formed a joint venture to develop the mining industry in the area. The two parties formed PT Sulawesi Mining Investment (SMI), involved in the production and export of nickel ore mainly to China. SDI is a subsidiary to Tsingshan Steel Group, the ultimate mother company of the main cooperating exporting producers, IRNC. On the other hand, BDI, is a subsidiary of Bintang Delapan Group, a conglomerate that includes mining companies with large nickel ore deposits in Indonesia.

(624) The current shareholders of IMIP are SDI (49,7 %), BDI (25 %) and SMI (25,3 %). SMI became a shareholder in 2015.

(625) During the summit of October 2013, an agreement was signed between SDI and BDI to establish IMIP. During the RCC, the GOID confirmed the signing of this agreement. However, it claimed that it did not have a copy of this agreement. Furthermore, IMIP refused to submit this agreement during the investigation as well.

(626) During the same summit, on 2 October 2013, the founder shareholders, BDI and SDI, also signed an investment and financing agreement with the China-ASEAN Investment Cooperation Fund (CAF) to develop activities in the Morowali Park (154). The China-ASEAN Fund (CAF) is an offshore equity fund approved by the State Council of the Peoples Republic of China and the National Development and Reform Commission. The establishment of the fund is sponsored by the Export-Import Bank of China together with other Chinese and international institutional investors. CAF focuses on investment in infrastructure, energy and natural resources sectors in the ASEAN, and serves as the pioneer to promote the ‘South-South Cooperation’ between China and the emerging markets, and facilitates the ‘going out’ strategy for the Chinese enterprises.

(627) Following the establishment of the company IMIP, the Morowali Park developed rapidly. Infrastructure, supporting facilities and production factories were successively built. The investments in the park by December 2017 were estimated to amount 6 billion USD (155). IMIP is a shareholder in several of the companies established in the park, including the cooperating exporting producer. IMIP is a related company of the exporting producer.

(628) Although the Tsingshan Group appears to be a private company, it strictly follows the policy of the GOC, and in Indonesia also of the GOID due to the bilateral cooperation framework. It has been reported by the Chairman of Tsingshan Holding Group that ‘Every move the company has made closely relates to the national strategy and structural transformation of China’s economy’ (156). Furthermore, it has been reported by Tsingshan Steel Group (157) that Tsingshan Steel Group has actively implemented the Chinese BRI by accelerating the development of international strategy, building large industrial parks in Indonesia and other countries. Finally, independent sources describe Tsingshan Group as having ‘significant linkages to the Zhejiang provincial government’ (158).

(629) IMIP, in its annual reports, manifests itself to be a pilot area of this Indonesia-China economic cooperation.

(630) According to the IMIP’s 2017 Annual Report (p.1, p.18 and p.80) and Eternal Tsingshan Group’s website: ‘On 3 October, witnessed by Chinese President Xi Jinping and then the Indonesian President Susilo Bambang Yudhoyono, the owner of China’s Tsingshan Group Xiang Guangda and the owner of Indonesian Bintang Delapan Group Halim Mina signed a cooperation agreement to establish the Indonesia Morowali Industrial Park (“IMIP”) and the first project in the area’. The same report states that ‘The Indonesian President Joko Widodo and all levels of central, provincial and district governments pay close attention to, support and encourage the construction of the IMIP’.

(631) Another link of IMIP with the two governments is that its activity and mandate must comply with the special rules on Industrial Real Estates in order to get the underlying benefits and implement its specific task carried out in the framework of the broader preferential policies put forward by the governments. The framework within which IMIP operates is that of the bilateral cooperation between Indonesia and China to implement one of the strategic projects agreed on, that is to develop the nickel ore processing industry in the Morowali Park. It therefore acts within the perimeter of the main documents of the bilateral cooperation.

(632) Legally, the formal link with the two governments and the monitoring of the implementation of governmental policies takes place via the licensing system provided in the Indonesian Regulations on Industrial Estates, i.e. the one in force being Regulation No. 142 of 2015. Article 1.7 refers to the Industrial Estate Business Permit (‘IUKI’), a license granted by the government to develop and manage an Industrial Estate. Chapter IV of Regulation No. 142, Articles 12 ff. sets out the rules to obtain the IUKI by the government. The Regulation also foresees the establishment of the Industrial Estate Committee, which is an organization formed by the Minister with the task of assisting in the implementation of policies for the development and management of Industrial Estates (Section 1.10). Chapter XII of Regulation N. 142 contains a list of administrative sanctions and the relevant procedure in case the managing companies do not comply with the relevant regulation.

(633) Finally, there is publicly available evidence that IMIP is in regular contact with the authorities of the GOID and GOC, as shown for example in the meeting which took place between the Ministry of Industry, the CEO of Tsingshan, the Chinese ambassador in Indonesia and IMIP on 3 March 2017 to discuss the development of the Morowali Industrial Park (159). Another example is a meeting that took place between the CEO of Tsingshan and the President of Indonesia in July 2019 to report on the development of Tsingshan’s investments in the Park, as well as on the situation of IMIP’s industrial investment promotion activities in the Park (160).

(634) These formal procedures demonstrating a close link between IMIP and the two governments, as well as the bilateral cooperation framework and more specifically the Agreement of October 2013 that the GOID and IMIP refused to supply, for which the Commission bases its inferences in accordance with Article 28 of the basic Regulation, show that IMIP is not a private company managing the Morowali Park according to market principles. To the contrary, IMIP’s mission is to implement the overarching policy objective by the Indonesian and Chinese governments to facilitate the establishment and development of the stainless steel industry, and in particular IRNC, to achieve the successful implementation of this priority project agreed between the two governments.

(635) In addition, the Commission notes that IMIP also facilitates the procurement of land for the companies established in the Morowali Park and of all other incentives set out in Chapter VIII of Regulation N. 142 of 2015 (see Section 4.8).

(636) In addition to IMIP, the two governments put in place a number of bilateral administrative bodies in charge of the implementation and monitoring of the several agreements concluded to seal their cooperation since 2005.

(637) With regard specifically to the Morowali Park, as explained above the two governments signed on 2 October 2013 an Agreement on Indonesia-China Integrated Industrial Parks in Indonesia. Article IV provided a specific ‘Cooperation Mechanism’ between the parties: ‘The two designated authorities will set up the cooperation mechanism comprising of: a. Indonesia-China Integrated Industrial Parks Intern-Governmental Coordinating Committee; b. Local Authority Coordinating Committee; and c. Industrial Parke Development Companies’.

(638) In order to implement this agreement, Indonesia issued a Decree 432/M-IND/kep/7/2014. This created a specific team for the Indonesian side, that is the Cooperation team for the China–Indonesia integrated industrial estate (‘KIT Indonesia’). KIT Indonesia is vested with the duties of providing ‘directives on the implementation of Agreement between Government of Indonesia and Government of PRC concerning the Indonesia – China Integrated Industrial Estate’ as well as ‘to report the outcome of the preparation for the implementation of Agreement between Government of Indonesia and Government of PRC concerning the Indonesia – China Integrated Industrial Estate’. Furthermore, the ‘Policy Support Team shall have the duty to conduct coordination and prepare the policy materials and facilitations in the framework of the establishment of Indonesia – China Integrated Industrial Estate.’

(639) The Commission requested the GOID to indicate the progresses made on this as well to provide supporting documents concerning the setup of this cooperation mechanism. However, the GOID simply replied that the team created by Decree No 432/M-IND/KEP/7/2014 had not generated meaningful policies but did not submit any further documents.

(640) Due to the lack of cooperation of the GOC, the Commission could not gain the relevant information on the implementation of this specific bilateral Committee by the Chinese side. However, evidence on file showed that it was the intention of the GOC to create such a committee, as can be seen in the 2015 Joint Statement on Strengthening Comprehensive Strategic Partnership between the People's Republic of China and The Republic of Indonesia, which declared that ‘The two sides promised to speed up the construction of China-Indonesia Integrated Industrial Parks and to establish the inter-governmental coordinating committee as soon as possible (161)’.

(641) In any case, the evidence on file further showed that Indonesia and China did set up other joint administrative bodies in which the management and implementation of the Morowali Park could be addressed. Examples include the China/Indonesia bilateral cooperation joint committee and the China/Indonesia Joint Steering Committee for the Development of Regional Comprehensive Economic Corridors between China and Indonesia, in which BRI cooperation projects, as well as projects under the Comprehensive Economic Corridors, are being discussed. Both relate also to the Morowali Park.

(642) Thus, due to the lack of cooperation by the GOC and the partial cooperation by the GOID on this aspect, the Commission had to rely on facts available. On the basis of the public statements seeking to establish entities to allow inter-governmental coordination between the GOID and the GOC, the refusal to provide any document in this respect by the two governments, as well as the existence of multiple joint committees between the GOC and GOID, the Commission concluded that there were bilateral implementation mechanisms in charge of assessing the successful development and monitoring of the Morowali Park for the nickel ore processing project. Through these implementation mechanisms, the GOID is capable of ensuring that the GOC complies with its commitments, including the provision of preferential support to the companies in the Morowali Park, guaranteeing the economic success of that project.

(643) The close cooperation between the GOID and the GOC within the territory of the exporting country culminated with the establishment and operation of the Morowali Park. The GOID and the GOC have pooled their resources to provide the stainless steel companies manufacturing in this Park with favourable conditions that confer benefits to them. This pooling of resources via such close cooperation serves a common purpose and benefits a common beneficiary, that is, the IRNC Group.

(644) Under Article 1.1(a) of the SCM Agreement, a subsidy only exists where there is a financial contribution by a government – or a public body – within the territory of the WTO Member.

(645) In its submission of 21 October 2021, the GOC referred to its position in the AS656 case (162) and argued that a so-called cross-country subsidy investigation is in violation of both the SCM Agreement and the EU Basic Regulation. The GOC referred to Article 1 and 2 of SCM agreement arguing that financial contributions to entities outside the territory of the granting Member do not qualify as subsidies within the meaning of the SCM Agreement, because a subsidy exists where ‘there is a financial contribution by a government or any public body within the territory of a Member’ and a subsidy is specific only if granted to an entity ‘within the jurisdiction of the granting authority’. The GOC further referred to Article 2 of the basic Regulation, arguing that the term ‘government’ is defined as ‘a government or any public body within the territory of the country of origin or export’. It also quoted Article 4.2 of the basic Regulation, which considers a subsidy specific when granted to ‘an enterprise or industry … within the jurisdiction of the granting authority.’ On this basis, the GOC concluded that this investigation could not be extended beyond the territory and jurisdiction of Indonesia, and no act of the GOC could become the basis to determine the existence of Indonesian government’s subsidies.

(646) The Commission observed that these comments tackle the question of whether the GOC is accountable under the SCM Agreement for granting subsidies for the production of goods overseas, which are exported to third WTO members. However, they do not speak to the separate question whether, in specific cases, the government of the exporting country is accountable under the SCM Agreement for having proactively sought, acknowledged and adopted as its own such subsidies for the benefit of the products made therein.

(647) Indeed, as found in Case AS656 (163), the terms ‘by a government’ in Article 3(1)(a) of the Basic AS Regulation and in Article 1.1(a)(1) of the SCM Agreement, interpreted inter alia in light of Article 11 of the ILC Articles on State Responsibility for Internationally Wrongful Acts (‘ILC Articles’) permits the attribution to the GOID of the financial support granted by the GOC to Indonesian exporting producers in the Morowali Industrial Park in Indonesia.

(648) Under Article 11 of the ILC Articles, conduct can be attributed to a State ‘if and to the extent that the State acknowledges and adopts the conduct in question as its own’. The commentary to the Draft ILC Articles confirms that the phrase ‘acknowledges and adopts the conduct in question as its own’ is intended to distinguish cases of acknowledgement and adoption from cases of mere support or endorsement. In this sense, as a general matter, conduct will not be attributable to a State under Article 11 where a State merely acknowledges the factual existence of conduct or expresses its verbal approval of it.

(649) Moreover, acknowledgement and adoption of conduct by a State might be express or it might be inferred from the conduct of the State in question (such as cases where the State is at least aware of and consented to the conduct in question). In any event, the act of acknowledgment and adoption, whether it takes the form of words or conduct, must be clear and unequivocal. Therefore, Article 11 of the ILC Articles requires an in concreto examination of the behaviour of the exporting country indicating that it acknowledged and adopted as its own the conduct of a foreign government.

(650) In this respect, rather than providing the subsidies directly, the Commission will examine whether the conduct of the foreign government (i.e. the GOC, when granting preferential loans) should be attributed to the exporting country (i.e. the GOID) as providing those subsidies indirectly via the foreign government, as agreed by both governments. A demonstrable/explicit link must be established between the GOID and the actions taken by the GOC in order to provide the agreed preferential support to the exporting producers in Indonesia. In that case, the GOID would be accountable for having actively sought, acknowledged and adopted as its own such subsidies for the benefit of the products produced in Indonesia.

(651) The Commission was thus entitled to verify whether the resources provided to the IRNC Group could be qualified as countervailable subsidies granted by the GOID within the meaning of Articles 2, 3 and 4 of the basic Regulation.

(652) According to Article 3(1)(a) of the basic Regulation, a subsidy exists if there is a financial contribution by a government in the country of origin or export. Similarly, Article 1.1(a)(1) of the SCM Agreement states that a subsidy shall be deemed to exist ‘if there is a financial contribution by a government’.

(653) The GOID has provided IRNC Group with nickel ore, land, and a number of additional subsidies. These subsidies are thus operated and granted directly by the GOID.

(654) However, ever since the start of the bilateral cooperation with the Joint Declaration between Indonesia and China in 2005 and the Memorandum of Understanding on Infrastructure and natural Resources Cooperation as per recitals (563) et seq., the GOID has proactively induced the GOC to provide financial support to companies in Indonesia by specifically contributing to the creation and development of the stainless steel industry in Indonesia through the Morowali Park. This is clearly stated in the 2010 Indonesia-China Plan of Action, namely in the chapter on ‘Investment Cooperation’ (see recital (563)). The cooperation was further strengthened with three documents signed between GOID and GOC in 2011 (see recitals (548) et seq.). In the Agreement of 29 April 2011 (recital (566)), the governments ‘agreed to encourage their respective financial and insurance institutions to give priority to financing and insurance support for those projects’, including in the steel industry and industrial parks (such as Morowali). The GOID, via its Investment Coordinating Board (BKPM) expressly asked China to invest in nickel processing in Southeast Sulawesi, i.e. where the Morowali Park is located (see recital (603)).

(655) A key year in the stepping up of the cooperation was 2013. The GOID and the GOC signed the Indonesia-China Five-Year Development Program for Economic and Trade Cooperation, which identified key cooperation areas including the metallurgical industry, nickel projects and industrial parks, and encouraged Chinese enterprises and financial institutions to participate in the development of economic corridors and specific priority projects (see recitals (604) and (609)). The cooperation was then sealed at the highest political level with the visit of the President of China to the President of Indonesia in October 2013 mentioned.

(656) The Morowali Park is managed by the company IMIP, as explained above. This Chinese-Indonesian company was formally established in 2013 and has received the formal recognition by the GOID as a National Strategic Project in 2016 and by the GOC as overseas investment area project under the Chinese BRI. These formal government recognitions entail that the company is acting to carry out State policies and is subject to specific regulations and controls in the fulfilment of its tasks of public interest. Already this shows that IMIP is not merely a private company but the expression of the two governments’ agreement to implement their cooperation to develop the nickel ore processing industry in the Morowali Park for the benefit of the IRNC Group. This is confirmed by IMIP itself, which has declared itself to be a pilot project of the bilateral cooperation.

(657) Furthermore, IMIP is an entity with close ties to the highest political levels in China and Indonesia, as shown by the endorsement of the respective Presidents who were present at the signature of the Agreement for its establishment in October 2013. Significantly, both the GOID and IMIP repeatedly refused to provide this agreement. Due to the lack of cooperation on this aspect by GOID and IMIP, the Commission inferred on the basis of Article 28(1) of the basic Regulation that this agreement also contained specific evidence of IMIP being entrusted by the two governments to implement the nickel ore project as one of the strategic projects agreed by the governments. Moreover, IMIP is subject to the licensing and monitoring requirements by the GOID under Regulation No. 142 of 2015 to fulfil its obligations stemming from being recognised as an Industrial Estate.

(658) Based on all these elements, the Commission concluded that the Morowali Park and IMIP were expressions of the joint management by the GOID and GOC of the nickel ore processing project for the benefit of the IRNC Group.

(659) The GOID and the GOC have also put in place joint administrative and cooperation bodies in charge of ensuring the smooth implementation of their bilateral cooperation, including via the Morowali Park and IMIP. Among them, the bilateral Cooperation team under the China-Indonesia Agreement on Indonesia Integrated Industrial Parks included government representatives elected by the GOID (KIT Indonesia), and based on inferences under Article 28(1) of the basic Regulation, in particular the bilateral cooperation framework, also by the GOC.

(660) The joining forces by the GOID and the GOC served several purposes.

(661) From the Indonesian perspective, the objective was to induce China to bring in investments, know-how, and capital in order to develop the whole value chain of the stainless steel industry and thus maximise the added value of the large nickel ore reserves for the country. Indonesia was unable to achieve this objective on its own and thus needed Chinese cooperation and support. The GOID leveraged its privileged position of having the large nickel ore reserves that the Chinese industry badly needed to induce the GOC to actively engage in providing the necessary support to the specific project. As an additional incentive, as concluded above, the GOID put on the table the provision of nickel ore for less than adequate remuneration.

(662) From the Chinese perspective, given the situation the GOC had little choice but to agree to the Indonesian request. The Chinese stainless steel industry had relied for some time on imports of Indonesian nickel ore, which in terms of quality matched perfectly with the technology and production processes of its industry. This is confirmed by the export statistics to China in Tables 1 and 2. The change of the GOID’s policy by stepping up the domestic value chain by banning exports of nickel ore put at risk the Chinese stainless steel production. The Chinese industry tried to source nickel ore from the Philippines, but this attempt was unsuccessful. Therefore, China agreed to enter into the bilateral cooperation framework with Indonesia.

(663) With the progressive deepening of the cooperation, the GOC relied on its BRI to prioritise this project and provide the corresponding preferential financing and other support. According to MOFCOM’s 13th Five-Year Plan for the Development of Foreign Trade, one of the main tasks under the OBOR initiative is to enhance the trade cooperation with countries along the BRI in order to promote and expand exports as mentioned in the following statement: ‘Stabilize exports of advantageous products such as labour-intensive products to the aforesaid countries, seize the opportunities of constructing infrastructure for such countries, and foster exports of large-sized complete sets of equipment, technologies, standards and services. Adapt to the trend of transformation and upgrade of industries of these countries, and accelerate exports of electromechanical and high-tech products. … Intensify the expansion of emerging markets, and after comprehensively considering economic scale, growth speed, resource endowment, risk degree and other factors, select several emerging markets for primary expansion. Expand exports of advanced technical equipment, and promote exports of high-quality, high-grade and comparatively advantageous industries and products.’

(664) Envisaged measures to achieve these tasks include the ‘development of State-level economic and technological development zones and various parks’. The Morowali Park falls in this context. Furthermore, ‘Focus on countries with good resource conditions, strong supporting capabilities and great market potential along the “Belt and Road”, continue to improve the investment cooperation mechanism with relevant countries, strengthen coordination […] and orderly promote the export of advantageous production capacity, prevent rush and disorderly competition […] encourage advantageous steel enterprises to set up steel production bases as well as processing and distribution centers overseas, drive exports of advanced equipment, technology and management’ (164). The deal with the resource-rich Indonesia fits perfectly with this objective.

(665) Furthermore, the 13th Five Year Plan on Steel adjustment and upgrade, states that China shall ‘encourage advantageous steel enterprises to set up steel production bases as well as processing and distribution centers overseas, drive exports of advanced equipment, technology, and management.’ Once again, this shows the GOC policy bias in favour of high value-added steel industries like the stainless steel industry.

(666) Overseas zones, such as the one at Morowali Park, thus serve several strategic objectives also for China. First, they help increase demand for Chinese-made machinery and equipment. Second, by producing overseas and exporting to Europe or North America, Chinese companies are able to avoid trade frictions and barriers imposed on exports from China (there are anti-dumping duties already in place on imports of stainless steel products from China, and the import market share from China is almost non-existent). Third, they assist China’s efforts to boost its own domestic restructuring and to assist its industries to move up the value chain at home (165).

(667) The Chinese investor Tsingshan Group, the main investor in the exporting producer IRNC Group, has explicitly confirmed that it has actively implemented the Chinese BRI (see recital (628)).

(668) It follows from the above that the GOID induced China to provide inter alia preferential financing to stainless steel producers through the close cooperation within the Morowali Park. As explained above, the GOC had little choice but to engage in the bilateral cooperation, including the provision of financial support, and it used the BRI context to finance this project which, as previous cases have shown (166), is used by the GOC to provide preferential financing to Chinese companies.

(669) Under these circumstances, the Commission considered that the term ‘by the government’ in Article 3(1)(a) of the basic Regulation should include not only measures directly emanating from the GOID, but also those measures by the GOC which can be attributed to the GOID on the basis of the available evidence.

(670) From the start of the cooperation as early as 2005, the GOID proactively sought the Chinese financial support to encourage its nickel and downstream industries, which materialised in the Morowali Park. As amply detailed above, in particular the 2011 and 2013 Agreements between Indonesia and China as well as the Chinese provisions on the implementation of OBOR and of the steel policies, the provision of preferential financing was an integral part of the deal between Indonesia and China. For instance, the 2011 Agreement states that ‘The Parties agree to encourage their respective financial and insurance institutions to give priority to financing and insurance support for those projects.’ Point 5.2.1 of the Indonesia-China Program stated that ‘Chinese financial institutions are encouraged to support financing for investment and project construction undertaken by Chinese-funded enterprises in Indonesia.’ The deal was then sealed at a summit in 2013 with the presence of then Indonesia President Susilo Bambang Yudhoyono and China’s President Xi Jinping. The 2013 Indonesia-China Five-Year Development Program for Economic and Trade Cooperation also unequivocally shows that the GOID acknowledged and endorsed the Chinese preferential support also for industrial parks, such as the Morowali Park.

(671) The characteristics of the Chinese BRI are public knowledge. Articles 30 to 36 of the Guiding Opinions of the State Council on the Promotion of International Production Capacity and Equipment Manufacturing Cooperation of 13 May 2015 list all the policy support that companies ‘going abroad’ can receive. They include fiscal and tax support policies, concessional loans, financial support through syndicated loans, export credits, and project financing, equity investment, and finally export credit insurance. Article 31 thereof refers to ‘concessional loans’ which shall ‘support enterprises to participate in the export of large-scale complete sets of equipment, project contracting and large-scale investment projects’. In practice, this policy has led to numerous preferential financing schemes by banks or the specifically set-up ‘Silk Road Fund’ under Article 35 of the Guiding Opinions, as recently established by the Commission in another case (167).

(672) As the Presidents of Indonesia were no doubt aware that the Chinese BRI involves heavy State financing through preferential financing and other financial instruments (see recitals (577) and (589)), there was a clear act of acknowledgment and adoption at the highest political level of such preferential financing from the GOC by the joint setting up of the Morowali Park.

(673) The fact that Indonesia proactively sought the preferential financing from China as one of the main points of their bilateral cooperation confirms that the preferential support granted by the GOC should be attributed to the GOID. This underpins the conclusion that Indonesia acknowledged and adopted Chinese preferential financing as its own. This is based inter alia on Article VI of the 2011 bilateral Agreement and Article 5.2.1 of the Indonesia-China Programme. The Indonesian government was also in agreement that China would designate the Morowali Park and IMIP as an ‘overseas investment area’ under its laws for the purpose of the BRI Initiative, and mirrored it with the formal domestic recognition of this project as a National Strategic Project under Indonesian law. Since ‘overseas investment areas’ are a vehicle of the BRI and since this initiative uses preferential financing as a tool, such a designation of the Morowali Park and of IMIP had the consequence that IRNC Group became eligible to ask for preferential lending from Chinese policy banks and preferential export insurance terms. As already found in a number of previous investigations (168), the Chinese preferential financing is not operated by clearly prescribed funding programs with strict eligibility criteria, but rather by the identification at the highest level of a number of encouraged industries (169). The official designation of the Morowali Park and IMIP in Indonesia as an overseas investment area for Chinese companies in the aftermath of a common agreement between the two governments to support financing fits perfectly into the usual Chinese pattern of activating preferential financing by its policy banks. This records the shared understanding of Indonesia and China that the GOC was not to provide financing at market rates, but proactively provides State incentives also in view of the huge investments amount required and the associated risks of project failure. This once more shows the benefits or preferences granted to them.

(674) The Chinese preferential measures in favour of the Chinese entities established in Indonesia were thus clearly and unequivocally ‘identified’ and ‘acknowledged and adopted as its own’ by Indonesia.

(675) Moreover, the GOID was closely involved in the activities of IMIP as the vehicle chosen to manage the Morowali Park, via the authorisations to settle in the area of the Park, the facilitation to procure the land (see below). Equally important means of government intervention are the licensing system via the IUKI and the monitoring activities prescribed by Regulation No. 142 of 2015 through the Industrial Estate Committee. These enable the GOID to closely control and monitor the activities of companies managing industrial estates, such as IMIP. Moreover, Indonesian officials were continuously present in the bilateral implementation mechanism set up in 2014 under the bilateral Agreement on Integrated Industrial Parks (recital (605)). The GOID was also in charge of conferring the formal status of eligible industrial estate to IMIP as administrator of the Morowali Park by issuing the temporary license to operate under this status, and subsequently to check that all the requirements of the relevant laws and policies were fulfilled in order to grant the permanent licence.

(676) Furthermore, as regards more specifically the preferential financing, the GOID has a monitoring process in place to be able to check the any financial flows for foreign investors and foreign capital, including the need to channel overseas funds via local Indonesian branches. Moreover, in the case of the specific loans and financial support provided to the companies in the IRNC Group, the funds were provided by SOCBs or policy banks located in China, but the loan agreements signed by the companies located in Indonesia also provided for so-called ‘agent’ banks. These consisted of local Indonesian branches of the Chinese banks, whose role was to act as intermediaries to channel the funds from China to the recipient companies in Indonesia. Thus, the GOID could properly monitor the agreed financial support.

(677) Through all these mechanisms, Indonesia also showed its full endorsement and close control of the Chinese preferential financing for the benefit of the stainless steel producer in the Morowali Park.

(678) It follows from the evidence available, and despite the lack of cooperation of the GOID and the GOC related to this part of the investigation, that the preferential financing from Chinese public bodies to IRNC Group can be attributed to the GOID as the government of the country of origin or export under Article 3.1(a) of the basic Regulation. The evidence showed that the GOID proactively sought from China and hence endorsed the preferential financial support to the stainless steel producer in the Morowali Park in line with the agreed commitments to develop and support the development of the stainless steel industry in Indonesia.

(679) In this context, the Commission further noted that the possibility for governments to provide a financial contribution indirectly through private bodies is neither exogenous to the basic Regulation nor to the SCM Agreement (170). Indeed, in cases where governments entrust or direct private bodies into a particular conduct, a key issue is that there must be ‘a demonstrable link’ between the government act and the conduct of the private body (171). Similarly, in this case, there is a clear and explicit link between the affirmative actions taken by China in order to provide the agreed financial support to the IRNC Group and the GOID.

(680) Consequently, the Commission considered that the preferential financing granted by the GOC to the SSCR exporting producers in Morowali Park amounted to a financial contribution by the GOID in the sense of Article 3(1)(i) of the basic Regulation (172).

(681) The Commission then considered whether these financial contributions attributable to the GOID conferred a benefit on IRNC Group under Article 3(2) of the basic Regulation. It recalled that the IRNC companies were operating in Indonesia and were incorporated under Indonesian law. Hence, it was in principle appropriate to inquire whether these recipients of the financing received better terms than they would have received on the Indonesian financial market. As mentioned in recitals (732) and (733), the Commission verified this point and was satisfied that this was the case.

(682) However, the Commission also took into consideration the exceptional circumstances of this case. It is recalled that the exporting producers are related to Chinese parent companies. Chinese public bodies granted the preferential financing after negotiation and signature of the relevant documents in China, and the recipients received them directly or indirectly through the channel of their parent company in China (inter-company loans). The loan agreements specified that the funds would be used for the projects in Indonesia. Through the setting up of the bilateral cooperation framework triggered by the GOID’s actions to induce the Chinese smelting capacity to be moved to Indonesia, the GOID sought and endorsed that those entities received preferential support, including cheap loans in line with Chinese law, i.e. under Chinese conditions. The Chinese public bodies provided such financing according to the preferential financing policies implemented in China.

(683) The Commission therefore concluded that the adoption and acknowledgement by the GOID of the financial contributions from the Chinese public bodies to IRNC included also the preferential/benefit aspects thereof. It hence established Chinese market rates for the preferential financing and calculated the benefit accordingly. Those details are further elaborated upon in section 4.6 below. The Commission noted that this reasonable approach resulted in lower subsidy amounts than the ones derived from applying a hypothetical Indonesian benchmark.

(684) Concerning the third point on specificity, the Commission examined whether these subsidies were specific as required by Articles 4(2) through (4) of the basic Regulation.

(685) By way of acknowledgment and adoption, the GOID was the granting authority with respect to the preferential financing. In particular, the GOID acknowledged and adopted the designation by the GOC of the Morowali Park and IMIP as an overseas investment territory and endorsed the fully-fledged implementation of the bilateral agreement and other bilateral documents thereof by, inter alia, the GOC’s provision of preferential financing.

(686) These subsidies were limited to companies operating in the Morowali Park. Consequently, the Commission concluded that they were regional subsidies within the meaning of Article 4(3) of the basic Regulation and falling within the jurisdiction of the granting authority in accordance with Articles 4(2) through (4) of the basic Regulation.

(687) The complainant, the GOID, the GOC and IRNC Group submitted comments on final disclosure concerning the cooperation between the GOID and the GOC.

(688) The GOID, the GOC and IRNC Group claimed that this investigation, insofar it tackles subsidies for the production of the product concerned granted by a country other than the exporting country, is in violation of both the SCM Agreement and the basic Regulation. According to them, the anti-subsidy investigation could not be extended beyond Indonesia’s territory and jurisdiction.

(689) The GOC further recalled that it had already expressed its position in the GFF anti-subsidy investigation. In the case at hand, the GOC understood recital (646) as a confirmation that the Commission shares the GOC’s view that the SCM Agreement does not involve the relationship between one government and producers located overseas.

(690) Along these lines, the GOC and IRNC Group claimed that, according to Articles 1 and 2 of SCM Agreement, financial contributions to entities outside the territory of the granting country do not qualify as subsidies within the meaning of the SCM Agreement. More specifically, the GOID stated that Article 1.1(a)(1) (i) – (iv) of the SCM Agreement also mentions “a government/government” in each of the paragraphs which refer to the same entity in its chapeau and those references cannot be construed to mean that a government outside of the territory of the country granting the financial contribution would be included

(691) The GOID added that the WTO case-law interpreted Article 1.1(a)(1) of the SCM Agreement as an ‘exhaustive closed list’ (173), which ‘defines and identifies the government conduct that constitutes a financial contribution for purposes of the SCM Agreement’ (174) and ‘from the outset was intended by its proponents precisely to ensure that not all government measures that conferred benefits could be deemed to be subsidies’ (175). In relation to the interpretation of Article 1.1(a)(1) of the SCM Agreement through Article 11 of the ILC Articles, referred to in recitals (647) to (650), the GOID recalled the WTO case-law on the interpretation of the WTO agreements (176). Then, it claimed that the Commission, by interpreting ‘by a government’ in Article 1.1(a)(1) of the SCM Agreement as including a possible attribution of the provision of subsidies to other governments, added words that are not in the text of the SCM Agreement.

(692) The GOID, the GOC and IRNC Group further argued that, since the term ‘government’ included in Article 2 of the basic Regulation is defined as ‘a government or any public body within the territory of the country of origin or export’, GOC’s alleged subsidies could not fall within the scope of this investigation. According to the GOC and to IRNC Group, Article 4(2) of the basic Regulation reinforces this view through a reference to the ‘jurisdiction of the granting authority’.

(693) The Commission disagreed with all of the above claims. The Commission noted that the arguments made by the GOID, the GOC and IRNC mostly overlapped and for some issues invoked separate arguments. The Commission analysed the overlapping points together and tackled the remaining arguments made by each party separately.

(694) At the outset, the Commission referred to the arguments developed in case AS 656, in particular at recitals (685) and following, and at recitals (709) and following, which would already be sufficient to dismiss the claims of these parties. Nevertheless, the Commission provided the following clarifications to support further its position.

(695) With regard to the interpretation of the WTO provisions and the provisions of the basic Regulation, the Commission noted that the parties failed to refer to the relevant WTO jurisprudence. The WTO Appellate Body (‘AB’) held in the US-Gasoline case (177) that WTO law cannot be read in clinical isolation from general international law. General international law principles thus form part of the WTO legal order, which is not a self-contained regime (178). In line with Article 3.2 DSU and Article 31(3) (c) of the Vienna Convention on the Law of Treaties (VCLT), ‘[a]ny relevant rules of international law applicable in the relations between the parties’ must be taken into account in the assessment of the context of the terms of a treaty. These ‘rules’ include customary international law (179), which are by definition binding on all WTO members, including Indonesia, China, and the European Union. The ILC Articles are an integral and important branch of customary international law, in accordance with the mandate of the UN General Assembly under Article 13(1) (a) of the UN Charter. The rules in the ICL Articles are also ‘relevant’ within the meaning of Article 31(3) (c) VCLT because they provide guidance for the interpretation of the notion of attribution, i.e. when certain acts or omission can be attributed to one State, even when those acts or omissions do not emanate from that State directly. In this respect, the notion of attribution becomes relevant to interpret the terms ‘by the government’ in the chapeau of Article 1.1(a)(1) of the SCM Agreement, and more in particular, to determine the correct attribution of a conduct in a situation of cooperation between two States with respect to subsidies, as in the case at hand (180). Therefore, the ILC Articles can thus be used to interpret the terms ‘by the government’ in the chapeau of Article 1.1(a)(1)of the SCM Agreement in order to attribute the conduct (granting of a subsidy) to the GOID, even in cases where the financial contribution has not been made directly by the GOID.

(696) With regard to the claims concerning Article 2(b) of the basic Regulation, this Article provides that ‘“Government” means a government or any public body within the territory of the country of origin or export.’ The Commission concurred with the interpretation that this provision covers actions of the government from whose territory the subsidised products are exported to the EU. This is precisely the case here. The product concerned is manufactured in Indonesia and exported from Indonesia to the EU. However, Article 2(b) of the basic Regulation does not speak to the separate question which action the government may authorise on its territory and acknowledge as its own. Just like with the notion of ‘public body’, the notion of ‘government’ is open to interpretation, taking into account its context, object and purpose. Thus, the actions attributable to the government of the country of origin or export may not only be actions directly emanating from such a government but also actions imputable to such a government. This is further confirmed by the terms in Article 3(1)(a) of the basic Regulation when referring to a financial contribution ‘by’ a government. For the same reasons, the other arguments invoking the provisions of the SCM Agreement, namely Article 1.1(a)(1), are of no avail.

(697) Therefore, based on the interpretation of Articles 2(b), 3(1)(a), and 4(2) of the basic Regulation in conformity with the relevant provisions of the WTO SCM Agreement and the ILC Articles, the Commission concluded that it was entitled to countervail the subsidies provided by the GOID which not only acknowledged and accepted the underlying countervailable financial contributions provided by the GOC as its own, but even proactively sought it. The Commission therefore rejected these claims.

(698) With regard to recital (646), the IRNC Group claimed that, by changing the topic to attribution, the Commission circumvented the prerequisites for taking countervailing measures. According to the IRNC Group, the Commission concluded that the GOID was the granting authority without a proper explanation and analysis, through attribution based only on Article 11 of the ILC Articles, although such a reference was not made. The IRNC Group claimed that, in order for Article 11 of the ILC Articles to allow the attribution to the GOID of the GOC’s financial support, the Commission needed to prove that the alleged financial support granted by the GOC was an ‘internationally wrongful act’ in the first place, otherwise, the whole basis of the Commission’s argument would not exist. As the WTO considers that developing countries are entitled to make full use of their own resources for economic development, bilateral cooperation between two developing countries could not fall within the definition of ‘internationally wrongful acts’. IRNC Group added that, even if the Commission somehow established attribution, there is still a considerable logic gap from ‘GOID is accountable’ to ‘GOID is the granting authority’ itself.

(699) The Commission explained at length via its cross-reference to the arguments and legal reasoning developed in the case AS656 combined with the further explanations at recitals (647)-(651) how Article 11 of the ILC Articles applied in this investigation. In addition, Section 4.5.8.1 detailed all the legal arguments and underlying evidence to support the attribution of the financial contribution and the relevant subsidies to the GOID. The Commission recalled that according to Article 11 of the ILC Articles conduct can be attributed to a State ‘if and to the extent that the State acknowledges and adopts the conduct in question as its own’. The commentaries to the Draft ILC Articles confirm that the phrase ‘acknowledges and adopts the conduct in question as its own’ is intended to distinguish cases of acknowledgement and adoption from cases of mere support or endorsement. In particular, conduct is not attributable to a State under Article 11 where a State merely acknowledges the factual existence of conduct or expresses its verbal approval of it. The act of acknowledgment and adoption, whether it takes the form of words or conduct, must be clear and unequivocal (181). Therefore, Article 11 of the ILC Articles requires an in concreto examination of the behaviour of the exporting country indicating that it acknowledged and adopted as its own the conduct of a foreign government. The Commission has done exactly that in its detailed analysis in Section 4.5.8.1, concluding that the GOID sought, acknowledged and adopted as its own the conduct of the GOC. The actions consisting of granting of countervailable subsidies of the GOID and GOC were at odds with the provisions of the SCM Agreement and of the basic Regulation, and thus they fall squarely within the scope of Article 11 of the ILC Articles. Whether or not such preferential lending triggered from a normative point of view also the international responsibility of China for a breach of the SCM Agreement is irrelevant. In other words, the Commission attributed Chinese ‘conduct’ (namely, the granting of the preferential lending) to the GOID and not ‘wrongful acts’. Therefore, the arguments of the parties were rejected. The GOC sought a clarification from the Commission concerning whether the Commission’s reliance on Article 11 of the ILC Articles is applicable to the interpretation of the basic Regulation, that is to say, according to the GOC, whether customary international law can be used to interpret the EU domestic law.

(700) The Commission noted at the outset the settled case-law of European Courts, under which the provisions of the basic Regulation must be interpreted, insofar as possible, in light of the corresponding provisions of the WTO Agreements (182). This requirement to interpret secondary EU legislation in a manner consistent with an international agreement presupposes that it is possible to achieve consistency between the different provisions and applies only ‘insofar as is possible’. The Commission further noted that the Court has previously ruled that the primacy of international agreements concluded by the EU over secondary EU legislation requires that the latter be interpreted, in so far as possible, in a manner consistent with those agreements, including when the provisions of the latter do not have direct effect (183).

(701) The provisions of the basic Regulations at stake, that is Articles 2(b), 3(1)(a), and 4(2), stem from obligations contained in corresponding provisions of the SCM Agreement, namely Article 1.1(a)(1), and must thus in principle be interpreted in conformity. The fact that Article 1.1(a)(1) of the SCM Agreement, and the corresponding provisions of the basic Regulation, do not refer explicitly to the possibility to attribute financial support provided by one State to another State is not an obstacle to interpret the terms in line with the attribution principles in the ILC Articles. Article 11 of the ILC Articles is relevant since it concerns the same subject matter as the treaty terms being interpreted (184). The interpretation of the terms ‘by the government’ in these provisions in line with Article 11 of the ILC Articles permits to ‘ascertain the common intention of the parties to a particular agreement’ (185). Thus, the proper interpretation of Article 1.1 of the SCM Agreement and of the Basic AS Regulation do require the taking into account of the ILC Articles, which have already been explicitly considered by the Court of Justice in a number of cases (186).

(702) IRNC Group asserted that, even if cross-country subsidy investigations were permissible under the SCM Agreement, the Commission would have failed to establish financial contribution in this case. Indeed, according to IRNC Group, the fact that the GOID identified, acknowledged and adopted as its own the Chinese preferential measures (recital (674)), the full endorsement and the close control of Chinese preferential financing (recital (677)), as well as the clear and explicit link between the actions of the GOC and of the GOID (recital (679)), are logically flawed and not supported by substantial evidence.

(703) In this respect, IRNC Group underlined that the Commission did not demonstrate the contribution by the GOID or by a public body. The Commission did not prove the full endorsement of the GOID, whilst the alleged close control corresponded in the IRNC Group’s view to few normal administrative functions and normal control on foreign financial flows. Also the involvement of local branches in the repayment of the loans corresponded to a common business practice. The Commission considered these arguments baseless. This entire Section 4.5 explains in great detail how the cooperation led to the GOID acknowledging and accepting as its own the financial contribution provided by the GOC. This is then specifically dealt with in a separate Section 4.5.8.1. Contrary to this party’s assertion, there is ample substantial evidence supporting these conclusions, and this evidence has not been rebutted by parties. The assessment concludes that the financial contribution was provided by financial institutions established in the PRC acting as public body (see also recitals (727)-(731)), and that this financial contribution was proactively sought by the GOID, which made it its own. The GOID and GOC have put in place a number of bilateral administrative bodies in charge of implementing the Morowali project, as detailed among others in Section 4.5.7. Finally, the Commission noted that not only did the Chinese preferential funding have to transit via Indonesian ‘agency banks’ (see recital (751)), but also that offshore loans linked to development projects like the Morowali one are subject to specific approval and monitoring by an inter-Ministry Team for Offshore Commercial Loans (Tim Pinjaman Komersial Luar Negeri or ‘PKLN’) according to Presidential Decree No. 39 of 1991, as explained in more detail at recitals (752) and following). These arguments were therefore rejected.

(704) The GOID reacted to the Commission’s findings by stating that it is open to international cooperation and it has many bilateral agreements in place. However, this does not mean that the GOID gives a preference to foreign investments, since any investment in Indonesia is carried out in accordance with Indonesian law. The GOID refused to address any of the documents cited by the Commission because it regarded all of them as non-binding. In addition, the GOID highlighted that the cooperation with the GOC does not focus on the stainless steel industry or on industrial parks.

(705) At the outset, the Commission observed that the GOID (and the GOC) did not contest the accuracy of the facts and the relevant evidence regarding the cooperation between these two governments as described in Section 4.5.

(706) The Commission further noted that the fact that the GOID is open to international cooperation and has many bilateral agreements with other countries – albeit referred to generically with no specific details - does not detract from the conclusion that the cooperation with the GOC in the Morowali Park went well beyond an ordinary international cooperation or other unspecified bilateral agreements. The Commission acknowledges that governments conclude cooperation agreements or other bilateral agreements for many purposes, including when they provide for certain provisions encouraging or promoting investment. These provisions alone would be insufficient to attribute countervailable financial support from the country providing them to the exporting country for the purposes of the basic Regulation. However, the present investigation was not concerned with the existence of a mere generic cooperation or ordinary bilateral agreement(s) between Indonesia and China. Instead, the Commission based its analysis and findings that the Chinese financial support was attributable to the GOID, on the existence of a large number of documents and elements which, taken together, showed that the cooperation between the GOID and the GOC went well beyond the mere promotion of development and attraction of investment. Instead, the two governments agreed to implement a very specific project in the Morowali Park and had established detailed bilateral administrative mechanisms to ensure the successful implementation of this project, as explained in detail in Section 4.5.5. The cooperation in the Morowali project was based on a series of specific bilateral agreements and documents which unequivocally foresaw inter alia the obligation for the Chinese side to provide massive preferential financing for the Chinese-based investors in the Morowali Park. The subsequent successful implementation of the project confirmed that its scope and objective went well beyond those of generic development and cooperation agreements. These arguments were therefore rejected.

(707) The GOID claimed that any investment in the context of the cooperation with the GOC was carried out by the private sector.

(708) The Commission noted that even if the actual investors in the companies producing the product concerned and in the related company operating the Morowali Park were private, this is irrelevant and does not affect the conclusion that the preferential financing provided by GOC and attributed to GOID constituted a countervailable subsidy. The purportedly private investors were simply the recipients of these countervailable subsidies, which were attributed to, and granted by the GOID. Therefore, this claim was dismissed.

(709) The GOID further claimed that no list of priority projects exists under the high level economic dialogues with the GOC.

(710) The Commission noted that it is undisputed that the Morowali project was formally recognised as a special eligible project both in the PRC under the BRI, and in Indonesia as a National Strategic Project. The Commission further noted that there were several references to the list of strategic projects under the bilateral cooperation, as specified inter alia in recitals (577) and (609). As explained at recitals (552) and (573), the GOID submitted a different list of projects than the list of priority projects under the high level economic dialogue, and the Commission inferred on the basis of facts available under Article 28(1) of the basic Regulation that the Morowali Project was among the priority projects identified by the GOID and GOC. Even if the claim of the GOID that there exists no formal list of priority projects under the high level economic dialogue were substantiated and true, this did not affect the conclusion that the Morowali project was formally recognised as a National Strategic Project by the GOID and under the BRI by the GOC, and certainly that it was in any event considered a strategic priority project closely followed and implemented by the two governments due to its importance. Therefore, even if it would have been properly substantiated – quod non - this argument would not have affected the conclusion that the Morowali Park was a priority project formally recognised by both governments in the context of their bilateral cooperation. Its investors were thus in receipt of countervailable subsidies in this context. The Commission therefore dismissed this claim.

(711) In relation to recital (599), the GOID claimed that there was no evidence that IMIP was the Chinese Indonesian Economic and Trade Cooperation Zone. In any case, it submitted that this qualification did not imply any special treatment on the part of the GOID.

(712) The Commission noted the overwhelming evidence already provided in recital (599), confirming that IMIP is indeed an Economic and Trade Cooperation Zone. In addition, in response to this claim, it is noted that the same information can be found on other GOC websites (187). This claim was therefore rejected. The GOID also claimed that no special treatment was applied to IMIP concerning the industrial estate business license. The GOID clarified that IMIP is not regulated by the Agreement on Indonesia-China Integrated Industrial Parks but by GR No. 142 of 2015, which was not enacted to be in line with the bilateral agreements with the GOC. According to the GOID, (i) there is no reference to the agreements in it, (ii) it applies to all industrial estates, and (iii) the GOID simply provided incentives available also to companies outside industrial estates.

(713) The Commission noted that, in addition to the Decree No. 142 of 2015, there was a specific bilateral agreement between Indonesia and China of 2 October 2013 identifying the importance of the Industrial Parks for the successful implementation of the bilateral cooperation in the Morowali Project, as specified in Sections 4.5.3 and 4.5.5. Decree No. 142 provided a number of special provisions applicable only to eligible Industrial Estate companies under the specified conditions, which applied to IMIP. In any event, the Commission did not countervail subsidies provided by IMIP, but subsidies provided by the GOID, including by attributing to it financial support provided by GOC. The specific bilateral agreement on Industrial Estates between Indonesia and China constituted integral relevant context of the bilateral cooperation to implement the Morowali project. On this basis, the Commission considered this claim by the GOID irrelevant and dismissed it.

(714) The GOID clarified that the qualification of National Strategic Project does not provide any financial contribution. The GOID added that it did not provide any financial contribution to IMIP, only general infrastructure in the surrounding area.

(715) Similar to its rebuttal at recital (713), the Commission considered these arguments irrelevant with regard to the main findings of the investigation. Indeed, the Commission did not countervail financial contributions or other subsidies provided by IMIP, but only subsidies provided by the GOID. The qualification of National Strategic Project constituted relevant context showing that the Morowali Project was specifically encouraged and closely implemented by both the GOC via its official recognition under its Belt and Road programme, and by the GOID via this special qualification. The Commission considered the specific discipline linked to the qualification as a National Strategic Project in its assessment in this context, as specified at Recital (616). As for the argument concerning the general infrastructure, the Commission did not assess the provision of general infrastructure, which indeed is not countervailable according to Article 3(1)(a)(iii) of the basic Regulation. Therefore the Commission dismissed these claims as irrelevant.

(716) The GOID contested the finding of specificity because it submitted that the cooperation with the GOC did not cover just industrial parks, but a number of areas.

(717) In its analysis on specificity detailed in Section 4.5.8.3 and in particular at recital (686), the Commission explained that the countervailable subsidies covered by the cooperation between GOID and GOC were regionally specific as they were limited to eligible companies formally established in the Morowali Park as part of the implementation of the development project implemented by the two governments. This claim was therefore rejected.

(718) The IRNC Group claimed that the missing agreement related to IMIP cannot constitute best facts available and cannot be the basis for the finding that IMIP is an entrusted private body. The IRNC Group conceded that the agreement could be one of the considerations, but not the only one, and argued that the Commission should reach a conclusion comprehensively from all the documents collected. These, according to IRNC Group show that there was no such entrusted function. The GOID reiterated that it does not possess the missing agreement, since IMIP was established and funded by private parties.

(719) The Commission found this claim incorrect and irrelevant. The missing agreement, which IRNC deliberately failed to submit and which the GOID claimed not to possess, was used to draw certain inferences on the basis of Article 28(1) due to non-cooperation as explained at recital (634). These inferences were taken into account in the assessment of the joint management of the Morowali Park by the GOID and GOC, together with a number of other pieces of evidence and considerations as detailed at Section 4.5, and in particular in the legal assessment at Section 4.5.8. It was indeed just one of the elements and considerations which allowed the Commission to arrive at the conclusion that the IMIP was, among others, entrusted to implement the successful implementation of the Morowali Project by being the manager of the Morowali Park in conformity with the overarching bilateral cooperation agreed between the GOID and GOC. Therefore, contrary to what the parties argue, the missing agreement was neither the only nor the decisive piece of evidence used to arrive at that conclusion (nothwithstanding the possibility, in the Commission’s view, for the Commission to arrive at the same conclusion even just on the basis of that agreement, due to its importance coupled with the refusal of the IRNC and GOID to produce it). Therefore this claim was dismissed.

(720) The GOC asserted that it was not obliged to provide any information in the investigation, which is against Indonesia, and in which the recipients and beneficiaries of the supposed subsidies are Indonesian producers established in Indonesia.

(721) The Commission noted that the GOID and the GOC put in place several administrative mechanisms in the context of their bilateral cooperation and in particular to successfully implement the Morowali project, as explained in Section 4.5.6. These cooperation mechanisms allowed the GOID to collect the requested information from the GOC. The fact that the one party of the joint cooperation (i.e. the GOC) decided not to provide any information does not automatically mean that the other party to the bilateral cooperation (i.e. the GOID) should not be held responsible with regard to this obligation. In the context of a joint cooperation, as the one undisputedly found between the GOID and the GOC, one party cannot use the inaction of the other to claim that it fully cooperated in the investigation to the best of its abilities. Otherwise, in similar circumstances in other cases the governments involved could deliberately decide not to submit the information requested by the Commission without incurring in any legal consequences for their failure to cooperate.

(722) The Commission was not asking the GOID to use coercive means to collect the requested data from the GOC, but rather it gave the opportunity to the GOC to intervene and submit the relevant information since the very beginning of the investigation by treating it as an interested party. In particular, according to Point 5.3 of the Notice of Initiation the Commission specifically invited the GOC to participate as an interested party given the allegations in the complaint. The GOC requested to be registered with the investigation to have access to the file and explicitly confirmed to be an interested party by email of 19 February 2021. The provisions of Article 28 of the basic Regulation apply fully to all interested parties, as also clearly laid out in Point 10 of the Notice of Initiation. The Commission also recalled that the GOC was well aware of the legal situation since the GFF and GFR cases. On the basis of all these arguments, the Commission rejected this claim.

(723) In conclusion, the Commission found that both the subsidies granted to companies operating in the Morowali Park directly provided by the GOID (provision of nickel ore, provision of land, and tax incentives) as well as the subsidies granted indirectly through the GOC’s preferential financing are countervailable under Articles 2-4 of the basic Regulation. The latter are attributable to the GOID by virtue of the acknowledgment and adoption of the GOC’s measures by the GOID as its own, for example through the bilateral agreement of 2011, the Indonesia-China Program of 2013 Cooperation Agreement, and the close cooperation and the various levels of cooperation mechanisms. The financial contributions also conferred benefits and were specific. The Commission examined all the relevant subsidies in more details below.

(724) The investigation revealed that all the loans to IRNC Group were provided by Chinese banks (Eximbank, China Development Bank, Bank of China, Industrial and Commercial Bank of China) except for IMIP who received loans from Eximbank Indonesia. The first loans were used to finance the construction of the plants and others were used for working capital needs.

(725) The Commission first ascertained whether these banks were ‘public bodies’ within the meaning of Articles 3 and 2 (b) of the basic Regulation. The Commission thus sought information about State ownership as well as formal indicia of government control in the State-owned banks. The Commission also sought information about whether the GOC exercised meaningful control over the conduct of the State-owned banks with respect to their lending policies and assessment of risk.

(726) As stated above, the GOC refused to cooperate in the investigation and provide the requested information. Therefore, the Commission resorted to the provisions of Article 28 of the basic Regulation in order to assess the conduct of the Chinese banks mentioned above as public bodies by relying on facts available, namely relevant information from previous investigations covering the period 2015 to 2020 (188), including most recently the GFF anti-subsidy investigation and Commission Implementing Regulation (EU) 2020/870 of 24 June 2020 imposing definitive countervailing duties and definitively collecting the provisional countervailing duty imposed on imports of continuous filament glass fibre products originating in Egypt, and levying the definitive countervailing duty on the registered imports of continuous filament glass fibre products originating in Egypt (189) (‘GFR investigation’).