  
  
G/SG/N/8/IDN/29  
G/SG/N/10/IDN/29  
 
5 March 2021  
(21-1852) Page: 1/6 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER ARTICLE 12.1(B) (FINDING)  
NOTIFICATION OF A PROPOSAL TO IMPOSE A MEASURE  
INDONESIA  
Cigarette Paper  
The following communication, dated and received on 4 March 2021, is being circulated at the request 
of the delegation of Indonesia.  
 
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Pursuant to Articles 12.1(b) of the Agreement on Safeguards, the Government of the Republic of 
Indonesia submits a notification on finding serious injury or threat thereof, to the domestic industries 
producing " Cigarette Paper " and a notification of proposed safeguard measures. This notification 
contains all pertinent information relating to the proposed safeguard measures in accordance with 
Article 12.2 of the Agreement on Safeguards and an offer of consultations  pursuant to Article 12.3 
of the Agreement on Safeguards.  
A. GENERAL BACKGROUND  
1. INITIATION OF INVESTIGATION  
On 1 October 2020, an application for a safeguard measures was  received by the Investigating 
Authority from the Indonesia Pulp and Paper Association ( Asosiasi Pulp dan Kertas Indonesia /APKI) 
hereinafter referred as "the Applicant", against the importation of the product under investigation. 
After examining the proper ly documented application, the Investigating Authority concluded that 
there was a sufficient evidence to justify the initiation of a safeguard investigation.  
Subsequently, on 26 October 2020, the Investigating Authority initiated a safeguard investigation 
on the import of "Cigarette Paper". The commencement of the investigation was announced in the 
Bisnis Indonesia newspaper on 26 October 2020 and the Ministry of Trade's website on 
27 October  2020. The said initiation was also notified in the WTO document G /SG/N/6/IDN/37, 
circulated on 28 October 2020.  
2. PERIOD OF INVESTIGATION  
The period of investigation covers 2016 to 2020 (January -June).  
3. MAJOR PROPORTION  
The total production of the Applicant is 70.6% of the total domestic production of the Subject Goods. 
Therefore, it represents a major proportion as required by Article 4.1(c) of the WTO Agreement on 
Safeguards.  G/SG/N/8/IDN/29 • G/SG/N/10/IDN/29  
 
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  4. VIEWS AND COMMENTS OF THE INTERESTED PARTIES  
In accordance with Article 3.1 of the WTO Agreement on Safeguards, during the process of 
investigation,  the Investigating Authority has provided opportunities to all interested parties, to 
submit their views, evidences, comments, and responses concerning the investigation. In light of 
the aforementioned, the Investigating Authority has held public hearings on 19  November  2020. 
(The said public hearing was also notified in the WTO document G/SG/N/6/IDN/37, circulated on 
28 October  2020).  
B. INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN IMPORTS OR AN 
INCREASE IN IMPORTS RELATIVE TO DOMESTIC PRODUCTION  
In the light to provide evidence whether there is an absolute increase in imports or an increase in 
imports relative to domestic production, the Investigating Authority has analysed import data of the 
Subject Goods during the period of investigation.  
1. ABSOLU TE INCREASE IN IMPORTS  
Table 1 . Volume of Imports  
Description  Unit Year  
2016  2017  2018  2019  January -June  
2019  2020  
Volume of Imports  Ton 5,201  5,696  7,900  8,024  4,554  7,434  
Growth  %  9.50 38.70  1.57 63.24  
Trend 2016 -2019 % 17.67    
Source:  Statistics Indonesia/ Badan Pusat Statistik (BPS)  
It can be seen from the Table 1, import volume of the Subject Goods increased in absolute terms 
with a trend of 17.67%, during the period of investigation. The volume of imports was increase 
5,201 to n in 201 6 to 5,696 ton  in 201 7, continued to increase to 7,900 ton  in 201 8 and increased 
again to 8,0 24 ton in 2019 . With the biggest increase in 2017 to 2018 with a growth of 38.70% and 
the most significant increased in period January -June 2019 -2020 with a growth of 63.24%.  
2. RELATIVE INCREASE IN IMPORTS TO TOTAL DOMESTIC PRODUCTION  
Table 2. Volume of Imports, Total Domestic Production, and Relative to Total Domestic 
Production  
Description  Unit Year  
 2016  2017 2018 2019 January -June  
2019  2020  
Volume of Imports  Ton 5,201  5,696  7,900  8,024  4,554  7,434  
Total Domestic Production  Index  100 98.66  97.97  81.90  100 85.63  
Imports Relative to the Domestic Production  Index  100 111.01 155.03 188.36 100 191.65 
Growth  %  11.01  39.65  21.50   90.65  
Trend 2016 -2019 % 25.03   
Source:  Statistics Indonesia and as verified by Investigating Authority  
As seen in Table  2 above, there was a surge increased in imports relative to the national production 
during the investigation period, from 100 indexed points in 201 6 to 111.01 indexed points in 201 7, 
continued to increase to 155.03 indexed points in 201 8 and increased again to 188 .36 indexed points 
in 2019 . During 201 6-2019, imports relative to the national production was increased with a trend 
of 25.03% . Imports relative to the national production  continue to increased from 100 ind exed points 
in 2019 (Jan -Jun) to 191.65  indexed points in 2020 (Jan -Jun) with a growth of 90.65%.  G/SG/N/8/IDN/29 • G/SG/N/10/IDN/29  
 
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  3. IMPORTS FROM MAIN COUNTRIES  
Table 3 . Import Shares  
Country  Year  
2016  
(%) 2017 
(%) 2018  
(%) 2019 
(%) January -June  
2019  
(%) 2020  
(%) 
Austria  31.88 43.96 31.74 32.12 42.82 47.57 
People 's Republic of China (PRC)  46.47 33.71 34.90 31.59 30.49  20.96 
Viet Nam 1.05 0.33 16.87 17.97 8.64 16.08 
Spain 1.82 4.22 9.40 12.75 13.48 11.33 
Other Countries  18.78  17.78 7.09 5.58 4.58 4.05 
World  100 100 100 100 100 100 
Source:  Statistics Indonesia/ Badan Pusat Statistik  (BPS)  
From the table above, Table 3 indicates that the biggest shares of import in 2019 are Austria, PRC, 
Viet Nam  and Spain  with total shares of 94.43 %. 
4. UNFORESEEN DEVELOPMENT  
The increasing imports of goods investigated from the exporting country cannot be predicted 
(unforeseen/unexpected) based on the following matters:  
a) Delfort Group as an FDI in V iet Nam gain the right to supply of cigarette paper in Indonesia due 
to the acquisit ion of PT. Pusaka Prima Mandiri, formerly known as a producer of cigarette paper 
in Indonesia, in 2017. Thus, Delfort Group continues to supply a large amount of subject goods 
to Indonesian  market which causes  a significant increase in imports from Viet Na m. 
b) Viet Nam's import quota limitation policy in 2018 (Circular No. 57/2018/TT -BCT)1 resulted in 
cigarette paper products from European countries that are usually exported to Viet Nam being 
diverted to other countries including Indonesia.  
C. EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED 
IMPORTS  
In a view to determine the existence of serious injury or threat of serious injury that is caused by 
increased imports, the Investigating Authority has analyzed and made an evaluation of all rele vant 
factors in an objective and quantifiable natures. The following analyses are based on data provided 
by the Applicant, which has been verified by the Investigating Authority.  
1. EVIDENCE OF SERIOUS INJURY OR THREAT OF SERIOUS INJURY  
The general economic indicators related to Subject Goods in the safeguard investigation are 
presented at the table below.  
Table 4 . National Consumption, Volume of Imports, and Market Shares  
No. Description  Unit Year  Trend  
17-19 
(%) 2016  2017  2018  2019  January -June  
2019  2020  
1. National Consumption  Index  100 99.37  114.36  116.70  100 126.26   6.22  
2. Volume of Imports  Ton 5,201  5,696  7,900  8,024  4,554  7,434   17.67  
3. Applicant Domestic Sales  Index  100 98.13  115.08  115.69  100 97.90   6.15  
4. Non-Applicant's Domestic Sales  Index  100 92.70  75.43  82.33  100 162.28   (7.59)  
5. Import 's Market Share  Index  100 110.21  132.82  132.20  100 129.29   10.78  
6. Applicant 's Market Share  Index  100 98.74  100.63  99.14  100 77.54   (0.07)  
7. Non-Applicant's Market Share  Index  100 93.28  65.96  70.55  100 128.53  (13.01)  
Source:  Statistics Indonesia and as verified by the Investigating Authority  
 
1 http://vbpl.vn/bocongthuong/Pages/vbpq -toanvan.aspx?ItemID=133903&Keyword=  G/SG/N/8/IDN/29 • G/SG/N/10/IDN/29  
 
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  a) The amount of national consumption during the period 2016 -2019 has increased with the trend 
of 6.22%.  
b) Import volume of the Subject Goods increased in absolute terms with a trend of 17.67%, during 
the period of investigation.  
c) The Applicant domestic sales during the investigation period had increased with the trend of 
6.15%.  
d) The Non -Applicant 's domest ic sales during the investigation period decreased with the trend of 
7.59%. 
e) The imports market share during the investigation period has increased significantly with the 
trend of 10.78%.  
f) The Applicant market share during the investigation period decreased with the trend of 0.07%.  
g) The Non -Applicant 's market share during the investigation period decreased with the trend of 
13.01%.  
h) Based on explanation above, can be seen that imports market share increased significantly with 
the trend of 10.78% during the investigation period. The increased of imports market share 
lead to injury for the Applicant market share with the trend of 0.07%, and the Non -Applicant 's 
market share with the trend of 13.01%.  
Table 5. The Applicant Indicators of Injury  
No. Description  Unit Year  Trend  
17-19 
(%) 2016  2017  2018  2019  January -June  
2019  2020  
1. Domestic Sales  Index  100 98.13  115.08  115.69  100 97.90  6.15 
2. Production  Index  100 99.59  99.86  84.45  100 89.39  (4.92)  
3. Inventory  Index  100 156.75  169.66  155.16  100 46.28  14.99  
4. Productivity  Index  100 100.44  101.58  87.68  100 89.39  (3.76)  
5. Capacity Utilization  Index  100 99.59  99.85  84.45  100 89.39  (4.92)  
6. Profits/Losses  Index  100 39.85  7.38 (20.19)  100 (59.03)  (96.30)  
7. Employment  Index  100 99.15  98.31  96.33  100 100 (1.20)  
Source:  As verified by the Investigating Authority . 
As shown in Table 5, the performance of the Applicant can be seen as follows:  
a) Domestic sales increased with a trend of 6.15% during 2016-2019, meanwhile production 
experienced a decrease with a trend of 4.92%  during  the same period as a result increased 
import . 
b) The Applicant inventory has increased significantly during the period 2016 -2019 with a trend of 
14.99% as a result increased import . 
c) The Applicant productivity during the investigation period has decreased with the trend of 
3.76% as a result of decreased in production and employment . 
d) The Applicant profit s experienced a significant decrease during 2017 -2019 with a trend of 
96.30% with the significant losses from 100 indexed points in 2016 to 39.85  indexed points in 
2017 due to the increased in volume of imports of the Subject Goods . 
e) Based on the explanation above, it ca n be concluded that during the investigation period, the 
Applicant experienced threat of serious injury based on the Applicant performance that indicated 
a downward trend in production, productivity, capacity utilization, profit s/losses , employment 
and inc reased of inventory.  
2. OTHER FACTORS THAT MAY CONTRIBUTE TO INJURY  
In order to ensure that the serious injury or threat of serious injury is only caused by increased 
imports, the Investigating Authority has examined the following other known factors:  G/SG/N/8/IDN/29 • G/SG/N/10/IDN/29  
 
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  a. Technol ogy 
Based on the results of the investigation, the Applicant already has the latest technology in producing 
the Subject Goods. This argument is supported by the fact that the Applicant machinery is able to 
produce sophisticated goods for the consumers. Thi s shows that the threat of a serious injury 
suffered by the Applicant is not caused by technology.  
b. Installed Capacity  
Table 6. Installed Capacity  
Description  Unit Year  
2016  2017 2018 2019 January -June  
2019  2020  
Installed Capacity  Index  100 100 100 100 100 100 
National Consumption  Index  28.25  28.07  32.30  34.66  21.39  27.01  
Source:  The Applicant  and Ministry of Industry, as  verified by the Investigating Authority.  
As shown in Table 6, the installed capacity of the domestic industry  is adequate to meet national 
consumption. Therefore, it can be concluded that the injury which suffered by the applicant is not 
caused by the inability of the domestic industry  to fulfill  the national consumption, but due to the 
increased of the imports.  
c. Quality  
The quality of goods produced by the Applicant has met the national  standards and the 
internationally recognized standards  to compete with imported goods.  
d. Competition between domestic producers  
Table 7 . Competition between Domestic Producers  
Description  Unit Year  Trend  
2017 -
2019  2016  2017 2018 2019 January -June  
2019  2020  
Imports ' Market Share  Index  100 110.21  132.82  132.20  100 129.29  10.78  
Applicant Market Share  Index  100 98.74  100.63  99.14  100 77.54  (0.07)  
Non-Applicant's Market Share  Index  100 93.28  65.96  70.55  100 128.53  (13.01)  
Source:  Statistics Indonesia and as verified by the Investigating Authority.  
As shown in Table above, during period of 2016 to 201 9 the Applicant 's market share and 
Non-Applicant 's market share decreased with the trend of 0.07% and 13.01%. As oppose, during 
the same period the import market share increased significantly with the trend of 10.78%. This 
prove s that the competition between the Applicant and Non -Applicant is not a factor that causes a 
threat of serious injury to the Applicant.  
Based on the facts of 2.a. to d. above, it can be concluded that during the period of investigation 
there were no other factors that caused a threat of serious injury to the Applicant other than 
increased volume of imports of the Subject Goods.  
3. CAUSAL LINK  
The Investigating Authority has examined all  relevant  factors having a bearing in the Applicant 
situation, and came int o a conclusion that threat of serious injury suffered by the Applicant mainly 
caused by significant increased volume of imports and not due to the other factors, as follows:  
a) There was a surge increase of Subject Goods in absolute terms in 2016 -2019 with a trend of 
17.67% . 
b) There was a surge increase of Subject Goods in relative to domestic production in 2016 -2019 
with a trend of 25.03% . G/SG/N/8/IDN/29 • G/SG/N/10/IDN/29  
 
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  c) Import's market share has increased with a trend of 10.78% in 2016 -2019. 
d) The Applicant market share has decreased w ith a trend of 0.07% and the Non -Applicant's 
market share has also decreased with a trend of 13.01% during 2016 -2019. 
e) Downward trend in production, productivity, capacity utilization, profit s/losses , employment, 
and increased of inventory . 
f) There were no ot her factors that caused a threat of serious injury to the Applicant other than 
increased volume of imports of the Subject Goods . 
D. DESCRIPTION OF THE PROPOSED SUBJECT GOODS  
Cigarette paper and plug wrap paper non -porous, under Indonesia HS codes ex. 4813.20. 00,  
ex. 4813.90.10 and ex. 4813.90.90.  
E. DESCRIPTION OF THE PROPOSED MEASURE  
In a view of the aforementioned findings, a safeguard measure s has been proposed in form of specific 
duty with HS codes, proposed date of introduction, and expected duration of the  measure as follow:  
Table 8. The Proposed on Safeguard Measure s 
Specific Duty ( Rupiah /Ton)  
Period I  Period II  Period III  
7,513,743  7,363,468  7,216,199  
In a view of the aforementioned conclusion  of the causal link, the Investigating Authority has 
proposed to the Government of the Republic of Indonesia to impose a safeguard measure s on the 
importation of the Subject Goods for three periods.  
The imposition of the safeguard measure s will be carried out in accordance with the Article 2.2 and 
Article 9 of the WTO Agreement on Safeguards.  
The non -confidential version of the Final Report of this investigation, can be found in the website of 
the Indonesian Safeguard Committee: http://kppi.kemendag.go.id . 
F. PROVIDE PROPOSED DATE OF THE APPLICATION OF THE MEASURE  
The safeguard measure s is proposed to enter into force after the publication of the decree of the 
Minister of Finance of the Republic of Indonesia, which will be promulgated at the Official Gazette.  
G. CONSULTATIONS  
Members who have a substantial interest of the Subject Goods , shall submit a written request of 
consultation within a period of 7 days from the date of circulation of this notification. All written 
requests must be sent both in written letter and in electronic format, and must indicate the name, 
address, e -mail address, ph one and fax number of the Members.  
In Accordance with Article 12.3 WTO Agreement on Safeguard, the Government of the Republic of 
Indonesia is open for consultation in order to provide opportunities for those Members, consultation 
is scheduled to be held no  later than 26 March  2021.  
The contact information for correspondence is:  
DIRECTORATE OF MULTILATERAL NEGOTIATION, MINISTRY OF TRADE  
Jl. M.I. Ridwan Rais No.5, Building 2, 9th Floor, Jakarta 10110  
Phone: (62 -21) 3840139  
Fax: (62 -21) 3840139  
E-mail: dit.multilateral.ppi@kemendag.go.id  
 
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