On 9 September 2026, the General Court of the European Union delivered its judgment in PT Indonesia Ruipu Nickel and Chrome Alloy v Commission (Case T-348/22), upholding the European Commission's decision to impose countervailing duties on stainless steel products originating in Indonesia, including subsidies financed by the Chinese Government.

The judgment reinforces the EU's approach to cross-border (also referred to as "transnational") subsidies, confirming that financial contributions originating from one government may, under certain circumstances, be attributed to another government for purposes of EU countervailing duty investigations. Crucially, the judgment also raises important questions concerning the interpretation of WTO subsidy disciplines (not only at the EU level but also, potentially at least, at the WTO dispute settlement level). Indeed as examined in an earlier post in this blog, the WTO panel in EU — CVD/AD on SSCRFP (Indonesia) (DS616) interpreted the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement) as precluding the subsidy attribution theory applied by the EU in the underlying anti-subsidy investigation—the same investigation that was at the heart of the EU judgment. In other words, there is divergence between the WTO panel's finding in its October 2025 report and the EU General Court's judgment in Case T-348/22 concerning whether the EU's approach to transnational subsidies is permissible under the SCM Agreement.

1. Background to the dispute

The proceedings concerned Commission Implementing Regulation (EU) 2022/433, which imposed definitive countervailing duties on imports of stainless steel cold-rolled flat products from India and Indonesia.

Following a complaint by the European steel industry association Eurofer, the Commission investigated various subsidy schemes benefiting Indonesian stainless steel producers, including preferential financing provided by Chinese financial institutions.

At the centre of the investigation was the Morowali Industrial Park in Indonesia, developed through extensive cooperation between the Indonesian and Chinese Governments. The Commission concluded that Indonesia had actively encouraged and facilitated Chinese financial support as part of its strategy to develop domestic nickel processing and stainless steel production capacity.

The Commission attributed certain Chinese financial contributions to Indonesia and imposed a countervailing duty of 21.4% on exports by the applicant, PT Indonesia Ruipu Nickel and Chrome Alloy (IRNC).

IRNC challenged the Commission's determination before the General Court, alleging, among other things, errors concerning subsidy attribution, specificity, the calculation of benefits, and the use of facts available.

The General Court dismissed the action in its entirety.

2. The General Court's approach to cross-border subsidy attribution

The central legal question was whether financial contributions originating from the Chinese Government could be treated as subsidies attributable to Indonesia under Regulation (EU) 2016/1037 (the Basic Anti-Subsidy Regulation).

Relying on the Court of Justice's earlier judgment in Hengshi Egypt Fiberglass Fabrics and Jushi Egypt for Fiberglass Industry v Commission (Joined Cases C-269/23 P and C-272/23 P), the General Court confirmed that Articles 2 and 3 of the Basic Anti-Subsidy Regulation permit such attribution where the government of the country of origin or export has played a decisive role in enabling the financial contribution, even where the funds originate from another government.

The Court identified several measures adopted by Indonesia that facilitated the Chinese financing, including restrictions on nickel ore exports and requirements for domestic processing, bilateral agreements encouraging Chinese investment and financing, the establishment and development of the Morowali Industrial Park, and preferential access to land, tax incentives, and administrative support.

The Court considered that these measures went beyond ordinary encouragement of foreign investment. Indonesia had actively sought Chinese financing and implemented a coordinated industrial strategy that enabled Indonesian producers to benefit from that support.

Importantly, the Court rejected the applicant's argument that attribution had to satisfy the requirements of Article 11 of the International Law Commission's Articles on State Responsibility, concerning the acknowledgement and adoption of conduct as a State's own. Instead, it held that attribution was permissible under the Basic Anti-Subsidy Regulation itself, rendering the alleged infringement of Article 11 ineffective (paragraphs 81–86).

The Court's reasoning thus places considerable emphasis on the conduct of the government of the country of origin or export rather than on the immediate source of the financing. Where that government's measures play a decisive role in enabling a foreign government to provide financial support to domestic producers, the resulting contribution may be attributed to the former for purposes of EU countervailing duty law.

The limits of this approach, however, remain uncertain because the distinction between facilitating foreign investment and enabling a countervailable financial contribution is not necessarily straightforward. Governments routinely employ investment incentives, export restrictions, regulatory concessions and bilateral cooperation agreements to attract foreign capital. Such measures may influence investment decisions without necessarily determining whether, or on what terms, a foreign government provides financing to particular enterprises. The relevant legal inquiry must therefore establish a sufficiently direct connection between the host government's conduct and the financial contribution concerned. Otherwise, the concept of attribution risks extending to ordinary industrial policies whose relationship with foreign financing is essentially economic rather than legally determinative. Although the General Court required the host government's measures to have played a decisive role, the precise evidentiary threshold for establishing that connection remains to be clarified.

3. The interpretation of WTO law within the EU legal order

The judgment is also significant for its treatment of the relationship between EU trade defence legislation and the WTO's SCM Agreement.

The General Court reaffirmed that WTO agreements do not, as a general rule, constitute a direct standard for reviewing the legality of EU secondary legislation, subject to limited exceptions. Nevertheless, EU legislation must, insofar as possible, be interpreted consistently with the Union's international obligations, including the SCM Agreement and relevant principles of international law.

Applying this principle, the Court endorsed the Court of Justice's interpretation that cross-border financial contributions may qualify as subsidies where the recipient country's government plays a decisive role in enabling them. It considered this interpretation consistent with the SCM Agreement's object and purpose, particularly the need to account for subsidies granted through increasingly internationalised economic activity (paragraphs 29–42 and 50–52).

This reasoning reflects an important feature of the relationship between EU law and WTO law. Although the SCM Agreement informs the interpretation of the Basic Anti-Subsidy Regulation, it does not ordinarily provide an independent basis for challenging the legality of EU countervailing measures before the EU courts. Consequently, the interpretation of the Union's legislation remains primarily a matter of EU law, subject to the obligation of consistent interpretation insofar as the relevant provisions permit it.

The practical consequence is that a finding of compatibility with EU trade defence legislation does not necessarily establish compliance with the SCM Agreement. The two inquiries operate within different legal frameworks and are subject to different standards of judicial review. While the General Court considered the Commission's attribution methodology compatible with the SCM Agreement, that conclusion does not preclude a WTO adjudicator from reaching a different interpretation of the Union's international obligations.

4. Specificity, evidence and the calculation of benefits

Beyond attribution, the General Court upheld several important aspects of the Commission's investigative methodology.

First, it confirmed that the Chinese preferential financing was regionally specific under Article 4(3) of the Basic Anti-Subsidy Regulation, given its concentration on enterprises established in the Morowali Industrial Park (paragraphs 140–155). The Court considered that the Commission had sufficiently demonstrated the geographical limitation of the financing, notwithstanding the existence of broader bilateral economic cooperation between Indonesia and China.

Second, the Court upheld the Commission's reliance on facts available under Article 28 in circumstances involving non-cooperation by the governments concerned. It also rejected the applicant's challenges to the Commission's determination and calculation of the benefits conferred through the subsidy arrangements.

These findings are particularly relevant to future investigations involving cross-border subsidies because the evidence needed to establish the existence, attribution, specificity and benefit of a financial contribution may be distributed among several governments, financial institutions and corporate entities. The resulting informational asymmetries can substantially complicate an investigating authority's task. Nevertheless, the use of facts available does not dispense with the requirement that the authority's conclusions be supported by a reasoned assessment of the evidence on the record.

The judgment therefore strengthens the Commission's ability to investigate complex cross-border financing arrangements while underscoring the importance of establishing a sufficiently substantiated factual connection between governmental conduct and the subsidies ultimately countervailed.

5. Divergence between EU and WTO adjudication

The General Court's judgment acquires particular systemic significance when considered alongside the WTO panel report circulated on 2 October 2025 in European Union — Countervailing and Anti-Dumping Duties on Stainless Steel Cold-Rolled Flat Products from Indonesia (DS616).

That WTO dispute concerned the same EU countervailing measures. However, the WTO panel reached a different conclusion concerning the Commission's attribution of Chinese financial contributions to Indonesia.

As examined in our earlier analysis of DS616, the WTO panel interpreted Article 1.1(a)(1) of the SCM Agreement as establishing an exhaustive list of forms of financial contribution. It concluded that the Commission's theory of state-to-state inducement and attribution could not be accommodated within that provision.

By contrast, the General Court upheld attribution based on Indonesia's active involvement in securing and facilitating Chinese financing.

The divergence is particularly significant because both adjudicative bodies examined the same underlying measures and interpreted closely related legal provisions, yet reached opposing conclusions concerning the permissible scope of subsidy attribution. Whereas the General Court accepted the role played by Indonesia in enabling Chinese financing as a sufficient basis for attribution under EU law, the WTO panel considered that the Commission's reliance on state-to-state inducement could not satisfy the definition of a financial contribution under Article 1.1(a)(1) of the SCM Agreement.

An important qualification is necessary. The WTO panel did not rule that cross-border subsidies are categorically excluded from the SCM Agreement, nor did it resolve every conceivable form of state-to-state attribution. Its findings concerned the particular attribution methodology employed by the Commission. Moreover, the panel report remains unadopted following the EU's appeal of 21 November 2025 and Indonesia's subsequent cross-appeal, against the background of the continuing paralysis of the WTO Appellate Body.

The coexistence of these decisions exposes a broader institutional problem because the same countervailing measure may be upheld within the EU legal order while being found inconsistent with the WTO obligations binding upon the Union. The distinction is legally possible because EU courts and WTO adjudicators exercise different jurisdictions and apply different standards of review. Nevertheless, the divergence creates uncertainty for economic operators and governments and may complicate the implementation of adverse WTO rulings, particularly where the interpretation rejected at the WTO level has already received judicial endorsement within the EU legal order.

For the European Commission and Union industries, the General Court's judgment provides important judicial support for countervailing cross-border subsidies. For exporting producers and governments, the WTO panel's interpretation offers a competing legal framework through which such measures may be challenged internationally.

More broadly, the decisions illustrate the increasing difficulty of reconciling existing WTO subsidy disciplines with industrial policies involving multiple governments, international financing and geographically fragmented production. Unless these interpretative differences are resolved, the treatment of cross-border subsidies is likely to remain a significant source of legal uncertainty and tension between EU trade defence practice and the multilateral trading system.

Resources

EU legislation and judicial decisions

1. Case T-348/22 PT Indonesia Ruipu Nickel and Chrome Alloy v Commission EU:T:2026:542, judgment of 9 September 2026. Full judgment

2. Joined Cases C-269/23 P and C-272/23 P Hengshi Egypt Fiberglass Fabrics and Jushi Egypt for Fiberglass Industry v Commission EU:C:2024:984, judgment of 28 November 2024. Full judgment

3. 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 [2022] OJ L88/24. Full text

4. Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union [2016] OJ L176/55. Full text

WTO law and dispute settlement

1. Agreement on Subsidies and Countervailing Measures (1994), Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 UNTS 14.

2. Panel Report, European Union — Countervailing and Anti-Dumping Duties on Stainless Steel Cold-Rolled Flat Products from Indonesia (2 October 2025) WT/DS616/R.

Academic literature

1. Huan Zhu, Weihuan Zhou, The new US countervailing duty rules on ‘transnational’ subsidies: a creative departure from WTO law, Journal of International Economic Law, 2026; https://doi.org/10.1093/jiel/jgag026.

2. Philipp Reinhold, ‘Strategic Autonomy and Trade Defence: The Case of Cross-Country Subsidies’ (2024) 58(6) Journal of World Trade 919–940, https://doi.org/10.54648/TRAD2024045.