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WTO ANALYTICAL INDEX: DISPUTE SETTLEMENT UNDERSTANDING Understanding on Rules and Procedures Governing the Settlement of Disputes |
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Article 12: Panel Procedures 1. Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise after consulting the parties to the dispute.
2. Panel procedures should provide sufficient flexibility so as to ensure high-quality panel reports, while not unduly delaying the panel process.
3. After consulting the parties to the dispute, the panellists shall, as soon as practicable and whenever possible within one week after the composition and terms of reference of the panel have been agreed upon, fix the timetable for the panel process, taking into account the provisions of paragraph 9 of Article 4, if relevant.
4. In determining the timetable for the panel process, the panel shall provide sufficient time for the parties to the dispute to prepare their submissions.
5. Panels should set precise deadlines for written submissions by the parties and the parties should respect those deadlines.
6. Each party to the dispute shall deposit its written submissions with the Secretariat for immediate transmission to the panel and to the other party or parties to the dispute. The complaining party shall submit its first submission in advance of the responding party’s first submission unless the panel decides, in fixing the timetable referred to in paragraph 3 and after consultations with the parties to the dispute, that the parties should submit their first submissions simultaneously. When there are sequential arrangements for the deposit of first submissions, the panel shall establish a firm time-period for receipt of the responding party’s submission. Any subsequent written submissions shall be submitted simultaneously.
7. Where the parties to the dispute have failed to develop a mutually satisfactory solution, the panel shall DSB. In such cases, the report of a panel shall set out the findings of fact, the applicability of relevant provisions and the basic rationale behind any findings and recommendations that it makes. Where a settlement of the matter among the parties to the dispute has been found, the report of the panel shall be confined to a brief description of the case and to reporting that a solution has been reached.
8. In order to make the procedures more efficient, the period in which the panel shall conduct its examination, from the date that the composition and terms of reference of the panel have been agreed upon until the date the final report is issued to the parties to the dispute, shall, as a general rule, not exceed six months. In cases of urgency, including those relating to perishable goods, the panel shall aim to issue its report to the parties to the dispute within three months.
9. When the panel considers that it cannot issue its report within six months, or within three months in cases of urgency, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which it will issue its report. In no case should the period from the establishment of the panel to the circulation of the report to the Members exceed nine months.
10. In the context of consultations involving a measure taken by a developing country Member, the parties may agree to extend the periods established in paragraphs 7 and 8 of Article 4. If, after the relevant period has elapsed, the consulting parties cannot agree that the consultations have concluded, the Chairman of the DSB shall decide, after consultation with the parties, whether to extend the relevant period and, if so, for how long. In addition, in examining a complaint against a developing country Member, the panel shall accord sufficient time for the developing country Member to prepare and present its argumentation. The provisions of paragraph 1 of Article 20 and paragraph 4 of Article 21 are not affected by any action pursuant to this paragraph.
11. Where one or more of the parties is a developing country Member, the panel’s report shall explicitly indicate the form in which account has been taken of relevant submit its findings in the form of a written report to the provisions on differential and more favourable treatment for developing country Members that form part of the covered agreements which have been raised by the developing country Member in the course of the dispute settlement procedures.
12. The panel may suspend its work at any time at the request of the complaining party for a period not to exceed 12 months. In the event of such a suspension, the time-frames set out in paragraphs 8 and 9 of this Article, paragraph 1 of Article 20, and paragraph 4 of Article 21 shall be extended by the amount of time that the work was suspended. If the work of the panel has been suspended for more than 12 months, the authority for establishment of the panel shall lapse.
1. Article 12.1: Working Procedures 400. As regards the Panel’s standard Working Procedures and the additional procedures developed through practice, see Section XXX.B below. 401. In Australia — Salmon, the Appellate Body warned panels to be careful to observe due process(608) when complying with the Article 12.2 requirement of flexibility in panel procedures: “We note that Article 12.2 of the DSU provides that ‘[p]anel procedures should provide sufficient flexibility so as to ensure high-quality panel reports, while not unduly delaying the panel process.’ However, a panel must also be careful to observe due process, which entails providing the parties adequate opportunity to respond to the evidence submitted.”(609) (i) Legal right to have a submission considered by the Panel 402. In US — Shrimp, the Appellate Body considered whether panels have the right to accept so called amicus curiae briefs. With respect to this issue, see also paragraphs 419-420 and 1049 below. In this context, the Appellate Body made a general statement on the issue of access to the dispute settlement process of the WTO. After noting that the access is limited to the Members of the WTO, the Appellate Body stated: “[U]nder the DSU, only Members who are parties to a dispute, or who have notified their interest in becoming third parties in such a dispute to the DSB, have a legal right to make submissions to, and have a legal right to have those submissions considered by, a panel. Correlatively, a panel is obliged in law to accept and give due consideration only to submissions made by the parties and the third parties in a panel proceeding. These are basic legal propositions; they do not, however, dispose of the issue here presented by the appellant’s first claim of error. We believe this interpretative issue is most appropriately addressed by examining what a panel is authorized to do under the DSU.”(610) (ii) Meaning of the term “second written submission” 403. In US — Steel Safeguards, the Panel sent a letter to all parties including a series of preliminary rulings(611) on organizational matters. Among the issues, the Panel referred to the United States’ request to replace the reference to “rebuttal submissions” in paragraph 11 of its Working Procedures with the word “rebuttals”. This paragraph dealt with the timing of the submission of factual evidence.(612) In support of this proposal, the United States made the argument that the word “submission” is ordinarily taken to mean written submissions. Hence, the reference to “rebuttal submissions” in paragraph 11 would restrict the application of the qualification in that paragraph to rebuttals made in writing and would not extend to rebuttals made orally. The complainants argued in response that the suggested amendment would allow, for example, new arguments and evidence to be adduced orally at the Panel’s second substantive meeting. The Panel disagreed and, recalling the comments made by the Appellate Body in the case Argentina — Textiles and Apparel,(613) indicated that they had drafted paragraph 11 to ensure due process and that new evidence was not adduced at a late stage in the panel process, while simultaneously ensuring that all parties and the Panel were kept fully informed of all relevant evidence. (b) “Any subsequent written submissions shall be submitted simultaneously” 404. In US — FSC (Article 21.5 — EC), the respondent, the United States, requested on 12 February 2001 that the Article 21.5 compliance panel deviate from the provision in Article 12.6 of the DSU which provides that the sequential first written submissions are to be followed by simultaneous written rebuttals. The United States argued that the European Communities had had new material from the submission of the United States to rebut in its rebuttal submission while the United States did not. The Panel denied the request. In this regard, see paragraph 616 below. (a) “basic rationale behind any findings and recommendations” 405. In Korea — Alcoholic Beverages, the Appellate Body, although refraining from attempting to define the scope of the obligation in Article 12.7, considered that the Panel had not failed to set out the basic rationale for its findings and recommendations as required by Article 12.7 of the DSU because it had provided a “detailed and thorough” rationale for its findings: “Korea claims that the Panel has failed to fulfil its obligation under Article 12.7 of the DSU to set out the basic rationale behind its findings and recommendations. Korea maintains that ‘much’ of the Panel Report contains contradictions and that it is vague. … In this case, we do not consider it either necessary, or desirable, to attempt to define the scope of the obligation provided for in Article 12.7 of the DSU. It suffices to state that the Panel has set out a detailed and thorough rationale for its findings and recommendations in this case. The Panel went to some length to take account of competing considerations and to explain why, nonetheless, it made the findings and recommendations it did. The rationale set out by the Panel may not be one that Korea agrees with, but it is certainly more than adequate, on any view, to satisfy the requirements of Article 12.7 of the DSU. We, therefore, conclude that the Panel did not fail to set out the basic rationale for its findings and recommendations as required by Article 12.7 of the DSU.”(614) 406. Similarly, the Appellate Body on Chile — Alcoholic Beverages concluded that the Panel had set out a “basic rationale” for its finding and recommendation on the issue of “not similarly taxed”, as required by Article 12.7 of the DSU, because it had “identified the legal standard it applied, examined the relevant facts, and provided reasons for its conclusion that dissimilar taxation existed”.(615) 407. In Argentina — Footwear (EC), the Appellate Body, although not agreeing with all the Panel’s reasoning, considered that it had met its obligation under Article 12.7 because the Panel had “conducted extensive factual and legal analyses of the competing claims made by the parties, set out numerous factual findings based on detailed consideration of the evidence before the Argentine authorities as well as other evidence presented to the Panel, and provided extensive explanations of how and why it reached its factual and legal conclusions”.(616) 408. In Mexico — Corn Syrup (Article 21.5 — US), the Appellate Body analysed the term “basic rationale” and considered that Article 12.7 establishes a minimum standard for the reasoning that panels must provide in support of their findings and recommendations. The Appellate Body, however, indicated that it did not believe that it is either possible or desirable to determine, in the abstract, the minimum standard of reasoning that will constitute a “basic rationale” for the findings and recommendations made by a panel: “In considering the scope of the duties imposed on panels under Article 12.7, we turn first to the dictionary meaning of ‘basic’, which includes both ‘fundamental; essential’ and ‘constituting a minimum … at the lowest acceptable level’.(617) ‘Rationale’ means both ‘a reasoned exposition of principles; an explanation or statement of reasons’ and ‘the fundamental or underlying reason for or basis of a thing; a justification’.(618) The ‘basic rationale’ which a panel must provide is directly linked, by the wording of Article 12.7, to the ‘findings and recommendations’ made by a panel. We, therefore, consider that Article 12.7 establishes a minimum standard for the reasoning that panels must provide in support of their findings and recommendations. Panels must set forth explanations and reasons sufficient to disclose the essential, or fundamental, justification for those findings and recommendations.
In our view, the duty of panels under Article 12.7 of the DSU to provide a ‘basic rationale’ reflects and conforms with the principles of fundamental fairness and due process that underlie and inform the provisions of the DSU.(619) In particular, in cases where a Member has been found to have acted inconsistently with its obligations under the covered agreements, that Member is entitled to know the reasons for such finding as a matter of due process. In addition, the requirement to set out a ‘basic rationale’ in the panel report assists such Member to understand the nature of its obligations and to make informed decisions about: (i) what must be done in order to implement the eventual rulings and recommendations made by the DSB; and (ii) whether and what to appeal. Article 12.7 also furthers the objectives, expressed in Article 3.2 of the DSU, of promoting security and predictability in the multilateral trading system and of clarifying the existing provisions of the covered agreements, because the requirement to provide ‘basic’ reasons contributes to other WTO Members’ understanding of the nature and scope of the rights and obligations in the covered agreements.
We do not believe that it is either possible or desirable to determine, in the abstract, the minimum standard of reasoning that will constitute a ‘basic rationale’ for the findings and recommendations made by a panel.(620) Whether a panel has articulated adequately the ‘basic rationale’ for its findings and recommendations must be determined on a case-by-case basis, taking into account the facts of the case, the specific legal provisions at issue, and the particular findings and recommendations made by a panel. Panels must identify the relevant facts and the applicable legal norms. In applying those legal norms to the relevant facts, the reasoning of the panel must reveal how and why the law applies to the facts. In this way, panels will, in their reports, disclose the essential or fundamental justification for their findings and recommendations.(621)
This does not, however, necessarily imply that Article 12.7 requires panels to expound at length on the reasons for their findings and recommendations. We can, for example, envisage cases in which a panel’s ‘basic rationale’ might be found in reasoning that is set out in other documents, such as in previous panel or Appellate Body reports — provided that such reasoning is quoted or, at a minimum, incorporated by reference. Indeed, a panel acting pursuant to Article 21.5 of the DSU would be expected to refer to the initial panel report, particularly in cases where the implementing measure is closely related to the original measure, and where the claims made in the proceeding under Article 21.5 closely resemble the claims made in the initial panel proceedings.”(622) 409. The Appellate Body on Mexico — Corn Syrup (Article 21.5 — US) further noted that for purposes of transparency and fairness to the parties, an Article 21.5 panel(623) “should strive to present the essential justification for its findings and recommendations in its own report”: “Having regard to these circumstances, we are of the view that the Panel Report, read together with the original panel report, leaves no doubt about the reasons for the Panel’s additional finding under Article 3.1 of the Anti-Dumping Agreement. We, therefore, find that the Panel did not fail to provide a ‘basic rationale’ for that finding. … We wish to add that for purposes of transparency and fairness to the parties, even a panel proceeding under Article 21.5 of the DSU should strive to present the essential justification for its findings and recommendations in its own report. In this case, in particular, we consider that the Panel’s finding under Article 3.1 of the Anti-Dumping Agreement would have been better supported by a direct quotation from or, at least, an explicit reference to, the relevant reasoning set out in the original panel report.”(624) 410. The Appellate Body on US — Steel Safeguards also considered that the Panel had complied with Article 12.7 by providing a detailed explanation on how the investigating authority had failed to provide a reasoned and adequate explanation: “Based on our review of the Panel’s reasoning, it appears to us that the Panel considered in detail the evidence that was before the USITC, and provided detailed explanations of how and why it concluded that the USITC had failed to demonstrate, through a reasoned and adequate explanation, that the alleged ‘unforeseen developments’ resulted in increased imports of each product subject to a safeguard measure …
In our view, in making these statements, the Panel has sufficiently set out in its Reports the ‘basic rationale’ for its finding that the USITC failed to explain how, though ‘plausible’, the ‘unforeseen developments’ identified in the report in fact resulted in increased imports of the specific products subject to the safeguard measures at issue.”(625) 5. Articles 12.8 and 12.9: deadlines for Panel review 411. The table in paragraph 412 shows the duration of the panel review process as regards reports adopted not later than 31 December 2004. (b) Notification of delay in the issuance of a panel report to the parties 412. The following table shows the disputes where panels notified the DSB of a delay in the issuance of a report to the parties as provided for in Article 12.9 of the DSU:
(a) “the panel shall accord sufficient time for the developing country Member to prepare and present its argumentation” 413. In India — Quantitative Restrictions, India requested additional time to prepare and present its first written submission, pursuant to Article 12.10 of the DSU. The Panel, “in light of this provision, and considering the administrative reorganization taking place in India as a result of the recent change in government”, decided to grant an additional period of time (10 days) to India.(626) (a) Explicit indication in the panel’s report of how special and differential provisions were taken into account 414. In India — Quantitative Restrictions, the Panel considered that “Article 12.11 of the DSU requires us to indicate explicitly the form in which account was taken of relevant provisions on special and differential treatment for developing country Members that form part of the covered agreements which have been raised by the developing country Member in the course of the dispute settlement procedures.” The Panel then noted that its analysis of Article XVIII:B of GATT 1994, which embodies the principle of special and differential treatment in relation to measures taken for balance-of-payments purposes, reflected its consideration of the relevant provisions on special and differential treatment.(627) 415. In US — Offset Act (Byrd Amendment), India and Indonesia argued that the Act undermined Article 15 of the Anti-Dumping Agreement on special and differential treatment for developing countries. The United States responded that Article 15 was not part of the terms of reference of the Panel as it had not been identified in any of the complaining parties’ requests for establishment of a panel. The Panel, although acknowledging that Article 15 was not mentioned in the request, noted that Article 12.11 of the DSU required it to explicitly indicate how it had taken into account the relevant special and differential provisions of the covered agreements which are raised by developing countries in the proceedings: “We note that there is no reference to AD Article 15 in the various requests for establishment of this Panel. Generally, therefore, AD Article 15 would not fall within our terms of reference.(628) However, we note that DSU Article 12.11 requires panels to ‘explicitly indicate the form in which account has been taken of relevant provisions on differential and more favourable treatment for developing country Members that form part of the covered agreements which have been raised by the developing country Member in the course of the dispute settlement procedures’. Since we consider AD Article 15 to be relevant, and since that provision has been raised by developing country Members in the present proceedings, we are bound to consider that provision, even though it was not referred to in the various requests for establishment. In doing so, we note that certain developing country Members attach importance to price undertakings as a ‘constructive’ alternative to anti-dumping duties.”(629) 416. In Mexico — Telecoms, the Panel explained the manner in which it had taken into account in its findings, pursuant to Article 12.11, the relevant GATS special and differential provisions for developing country Members: “The Panel notes that, pursuant to Article 12.11 of the DSU, it has taken into account in its findings GATS provisions on differential and more-favourable treatment for developing country Members. In particular, the Panel has examined Mexico’s arguments that commitments of such Members have to be interpreted in the light of Article IV of the GATS, paragraph 5 of the preamble to the GATS, and paragraph 5(g) of the Annex on Telecommunications. The Panel emphasizes that its findings in no way prevent Mexico from actively pursuing the development objectives referred to in these provisions by extending telecommunications networks and services at affordable prices in a manner consistent with its GATS commitments.”(630)
XIII. Article 13 back to top Article 13: Right to Seek Information 1. Each panel shall have the right to seek information and technical advice from any individual or body which it deems appropriate. However, before a panel seeks such information or advice from any individual or body within the jurisdiction of a Member it shall inform the authorities of that Member. A Member should respond promptly and fully to any request by a panel for such information as the panel considers necessary and appropriate. Confidential information which is provided shall not be revealed without formal authorization from the individual, body, or authorities of the Member providing the information.
2. Panels may seek information from any relevant source and may consult experts to obtain their opinion on certain aspects of the matter. With respect to a factual issue concerning a scientific or other technical matter raised by a party to a dispute, a panel may request an advisory report in writing from an expert review group. Rules for the establishment of such a group and its procedures are set forth in Appendix 4.
(a) “right to seek information and technical advice from any individual or body” 417. In EC — Hormones, the Appellate Body examined the European Communities’ challenge of the Panel’s selection and use of experts and stated that a Panel has the discretion to decide whether to seek advice from individual scientific experts or from a group of such experts, and may, in the former case, establish ad hoc rules for such consultations: “Both Article 11.2 of the SPS Agreement and Article 13 of the DSU enable panels to seek information and advice as they deem appropriate in a particular case …. We find that in disputes involving scientific or technical issues, neither Article 11.2 of the SPS Agreement, nor Article 13 of the DSU prevents panels from consulting with individual experts. Rather, both the SPS Agreement and the DSU leave to the sound discretion of a panel the determination of whether the establishment of an expert review group is necessary or appropriate. The rules and procedures set forth in Appendix 4 of the DSU apply in situations in which expert review groups have been established. However, this is not the situation in this particular case. Consequently, once the panel has decided to request the opinion of individual scientific experts, there is no legal obstacle to the panel drawing up, in consultation with the parties to the dispute, ad hoc rules for those particular proceedings.”(631) 418. In US — Shrimp, the Panel received a brief from three non-governmental organizations. The complaining parties in the dispute requested the Panel not to consider the contents of the briefs submitted by the organizations while the United States urged the Panel to take into account any relevant information in the two briefs that the Panel acknowledged receiving. The Panel found that “[a]ccepting non-requested information from non-governmental sources would be, in our opinion, incompatible with the provisions of the DSU as currently applied. We therefore informed the parties that we did not intend to take these documents into consideration.”(632) The Appellate Body found that the Panel had erred in its legal interpretation of Article 13 of the DSU and held that accepting non-requested information from non-governmental sources was not incompatible with the provisions of the DSU. The Appellate Body began by emphasizing the “comprehensive nature” of a panel’s authority to seek information in the context of a dispute: “The comprehensive nature of the authority of a panel to ‘seek’ information and technical advice from ‘any individual or body’ it may consider appropriate, or from ‘any relevant source’, should be underscored. This authority embraces more than merely the choice and evaluation of the source of the information or advice which it may seek. A panel’s authority includes the authority to decide not to seek such information or advice at all. We consider that a panel also has the authority to accept or reject any information or advice which it may have sought and received, or to make some other appropriate disposition thereof. It is particularly within the province and the authority of a panel to determine the need for information and advice in a specific case, to ascertain the acceptability and relevancy of information or advice received, and to decide what weight to ascribe to that information or advice or to conclude that no weight at all should be given to what has been received.
The thrust of Articles 12 and 13, taken together, is that the DSU accords to a panel established by the DSB, and engaged in a dispute settlement proceeding, ample and extensive authority to undertake and to control the process by which it informs itself both of the relevant facts of the dispute and of the legal norms and principles applicable to such facts. That authority, and the breadth thereof, is indispensably necessary to enable a panel to discharge its duty imposed by Article 11 of the DSU to ‘make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements ….’ (emphasis added)”(633) 419. The Appellate Body on US — Shrimp subsequently held that the word “seek” in the phrase “seek information” should not be given an excessively “formal and technical” reading. The Appellate Body opined that given the breadth of a panel’s mandate to seek information without “unduly delaying the panel process”, “for all practical and pertinent purposes, the distinction between ‘requested’ and ‘non-requested’ information vanishes”: “That the Panel’s reading of the word ‘seek’ is unnecessarily formal and technical in nature becomes clear should an ‘individual or body’ first ask a panel for permission to file a statement or a brief. In such an event, a panel may decline to grant the leave requested. If, in the exercise of its sound discretion in a particular case, a panel concludes inter alia that it could do so without ‘unduly delaying the panel process’, it could grant permission to file a statement or a brief, subject to such conditions as it deems appropriate. The exercise of the panel’s discretion could, of course, and perhaps should, include consultation with the parties to the dispute. In this kind of situation, for all practical and pertinent purposes, the distinction between ‘requested’ and ‘non-requested’ information vanishes.
A panel has the discretionary authority either to accept and consider or to reject information and advice submitted to it, whether requested by a panel or not. The fact that a panel may motu proprio have initiated the request for information does not, by itself, bind the panel to accept and consider the information which is actually submitted. The amplitude of the authority vested in panels to shape the processes of fact-finding and legal interpretation makes clear that a panel will not be deluged, as it were, with non-requested material, unless that panel allows itself to be so deluged.
Moreover, acceptance and rejection of the information and advice of the kind here submitted to the Panel need not exhaust the universe of possible appropriate dispositions thereof. The Panel suggested instead, that, if any of the parties wanted ‘to put forward these documents, or parts of them, as part of their own submissions to the Panel, they were free to do so.’ In response, the United States then designated Section III of the document submitted by CIEL/CMC as an annex to its second submission to the Panel, and the Panel gave the appellees two weeks to respond. We believe that this practical disposition of the matter by the Panel in this dispute may be detached, as it were, from the legal interpretation adopted by the Panel of the word ‘seek’ in Article 13.1 of the DSU. When so viewed, we conclude that the actual disposition of these briefs by the Panel does not constitute either legal error or abuse of its discretionary authority in respect of this matter. The Panel was, accordingly, entitled to treat and take into consideration the section of the brief that the United States appended to its second submission to the Panel, just like any other part of the United States pleading. … We find, and so hold, that the Panel erred in its legal interpretation that accepting non-requested information from non-governmental sources is incompatible with the provisions of the DSU. At the same time, we consider that the Panel acted within the scope of its authority under Articles 12 and 13 of the DSU in allowing any party to the dispute to attach the briefs by non-governmental organizations, or any portion thereof, to its own submissions.”(634) 420. While in US — Shrimp the Appellate Body held that panels have the authority to accept so called amicus curiae briefs (see paragraph 419 above), in US — Lead and Bismuth II, the Appellate Body recognized that it also had the authority to accept amicus curiae briefs, albeit on a different legal basis. See paragraphs 1043-1051 below. 421. The Appellate Body on Japan — Agricultural Products II agreed with the Panel’s finding that “[I]n deciding whether a fact or claim can…be accepted, we consider that we are called upon to examine and weigh all the evidence validly submitted to us, including the opinions we received from the experts advising the Panel in accordance with Article 13 of the DSU.” The Appellate Body recalled its statement about the “comprehensive nature” of a panel’s authority to engage in fact finding; however, it emphasized that a panel could not use this authority so as to relieve a complaining party of its burden of proof and the concomitant duty to make a prima facie case. With respect to this aspect of the burden of proof issue, see paragraph 1000 below. 422. In India — Quantitative Restrictions, the Panel consulted with the IMF on India’s balance-of-payments situation. In this context, the question arose whether in the light of Article XV:2, which speaks of consultations between the Contracting Parties and the IMF, a panel could engage in such consultations with the IMF. The United States, the complaining party, opined that the terms of Article XV:2 of GATT 1994, read as per paragraph 2(b) of the Incorporation Clause of GATT 1994 in Annex 1A of the WTO Agreement, require the WTO to consult with the IMF in specific matters, and the WTO, by definition, includes panels. India, in contrast, argued that to interpret the terms of Article XV to refer to panels meant to ignore the division of functions between the different bodies of the WTO, and that only the General Council and the BOP Committee were covered by this provision. The Panel stated: “Article 13.1 of the DSU entitles the Panel to consult with the IMF in order to obtain any relevant information relating to India’s monetary reserves and balance-of-payments situation which would assist us in assessing the claims submitted to us.
… We do not find it necessary for the purposes of this case to decide the extent to which Article XV:2 may require panels to consult with the IMF or consider as dispositive specific determinations of the IMF. As will be seen in Section V.G infra, we accept in the circumstances of this case certain assessments of the IMF. In this regard, however, we note that whether or not the provisions of Article XV:2 extend to panels, the Panel has the responsibility of making an objective assessment of the facts of the case and the conformity with GATT 1994, as incorporated into the WTO Agreement, of the Indian measures at issue, in accordance with Article 11 of the DSU.”(635) 423. For information relating to amicus curiae submissions, see Section XXXVI.G below. (b) Right to disregard information submitted 424. In US — Section 110(5) Copyright Act, the Arbitrators decided to seek additional information from United States collective management organizations. One such organization submitted some of the information requested but attached a number of conditions concerning the use of that information, in particular the obligation for the Arbitrators to submit “any proposed public document” to its counsel in order for it to confirm that the confidentiality of the information submitted had been effectively protected. The Arbitrators understood that the term “any proposed public document” could actually apply to their Award. Therefore, pursuant to their Working Procedures and to general practice under public international law, the Arbitrators considered that “such a condition was incompatible with the confidentiality of their deliberations, which extends to the content of their report until it is made public”. The Arbitrators also feared that such conditions, if they were to be accepted, could make access to evidence more difficult in future cases under the DSU. As a result, they decided not to use the information submitted.(636) 425. As regards the possibility of the panel’s drawing adverse inferences, see Section XI.B.3(c) above. (c) “A Member should respond promptly and fully to any request by a panel for such information as the panel considers necessary and appropriate” 426. The Appellate Body on Canada — Aircraft addressed the issue of the authority of a panel to request a party to a dispute to submit information concerning that dispute. The Appellate Body stated: “It is clear from the language of Article 13 that the discretionary authority of a panel may be exercised to request and obtain information, not just ‘from any individual or body’ within the jurisdiction of a Member of the WTO, but also from any Member, including a fortiori a Member who is a party to a dispute before a panel. This is made crystal clear by the third sentence of Article 13.1, which states: ‘A Member should respond promptly and fully to any request by a panel for such information as the panel considers necessary and appropriate.’”(637) 427. In Canada — Aircraft, Canada argued in its appeal that it was not legally bound to comply with the Panel’s request to provide information relating to the disputed financing of the subject transaction. The Appellate Body held: “[W]e are of the view that the word ‘should’ in the third sentence of Article 13.1 is, in the context of the whole of Article 13, used in a normative, rather a merely exhortative, sense. Members are, in other words, under a duty and an obligation to ‘respond promptly and fully’ to requests made by panels for information under Article 13.1 of the DSU.”(638) 428. See also the discussion on adverse inferences in Section XI.B.3(c) above. (a) “seek information from any relevant source” 429. In Argentina — Textiles and Apparel, Argentina argued on appeal that the Panel had failed to make “an objective assessment of the matter” because it had not acceded to the request of the parties in seeking information from, and consulting with, the IMF concerning certain aspects of the statistical tax. The Appellate Body held that “[j]ust as a panel has the discretion to determine how to seek expert advice, so also does a panel have the discretion to determine whether to seek information or expert advice at all”: “The DSU gives panels different means or instruments for complying with Article 11; among these is the right to ‘seek information and technical advice’ provided in Article 13 of the DSU. … Pursuant to Article 13.2 of the DSU, a panel may seek information from any relevant source and may consult experts to obtain their opinions on certain aspects of the matter at issue. This is a grant of discretionary authority: a panel is not duty-bound to seek information in each and every case or to consult particular experts under this provision. We recall our statement in EC Measures Concerning Meat and Meat Products (Hormones) that Article 13 of the DSU enables a panel to seek information and technical advice as it deems appropriate in a particular case, and that the DSU leaves ‘to the sound discretion of a panel the determination of whether the establishment of an expert review group is necessary or appropriate.’ Just as a panel has the discretion to determine how to seek expert advice, so also does a panel have the discretion to determine whether to seek information or expert advice at all. … In this case, we find that the Panel acted within the bounds of its discretionary authority under Articles 11 and 13 of the DSU in deciding not to seek information from, nor to consult with, the IMF.”(639) 430. In Australia — Automotive Leather II, Australia argued that the United States was limited to relying on the facts and arguments set forth in its request for consultations. Australia argued that the requirement that the request for consultations “include a statement of available evidence” pursuant to Article 4.2 of the SCM Agreement, in conjunction with the expedited nature of proceedings, requires a panel to limit the complaining party to using the evidence and arguments set forth in the request for consultations. The Panel held that the expedited nature of the proceedings under Article 4 of the SCM Agreement did not limit the Panel’s general right to seek information: “[W]e note that panels have, under Article 13.2 of the DSU, a general right to seek information ‘from any relevant source’. Indeed, it is a common feature of panel proceedings for panellists to question parties about the facts and arguments underlying their positions. There is nothing in Article 4 of the SCM Agreement to suggest that this right is somehow limited by the expedited nature of dispute settlement proceedings conducted under that provision. If Australia’s position were correct, a panel might be constrained from seeking out relevant information from the party, in this case the United States, that was limited to reliance on the facts set forth in its request for consultations. Similarly, under Australia’s view, the defending party might introduce information during the panel proceedings, which the complaining party, in this case the United States, would not be able to rebut, as it would be limited to reliance on the facts set forth in its request for consultations. We do not believe Article 4.2 requires this result.”(640) 431. The Appellate Body on EC — Sardines rejected the claim of the European Communities that the Panel had failed to conduct “an objective assessment of the facts of the case”, as required by Article 11 of the DSU. The European Communities had alleged impropriety in relation to the Panel’s decision not to seek information from the Codex Commission: “Article 13.2 of the DSU provides that ‘[p]anels may seek information from any relevant source and may consult experts to obtain their opinion on certain aspects of the matter.’ This provision is clearly phrased in a manner that attributes discretion to panels, and we have interpreted it in this vein. Our statements in EC — Hormones, Argentina — Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items (“Argentina — Textiles and Apparel“),(641) and US — Shrimp, all support the conclusion that, under Article 13.2 of the DSU, panels enjoy discretion as to whether or not to seek information from external sources.(642) In this case, the Panel evidently concluded that it did not need to request information from the Codex Commission, and conducted itself accordingly. We believe that, in doing so, the Panel acted within the limits of Article 13.2 of the DSU. A contravention of the duty under Article 11 of the DSU to make an objective assessment of the facts of the case cannot result from the due exercise of the discretion permitted by another provision of the DSU, in this instance Article 13.2 of the DSU.”(643)
XIV. Article 14 back to top Article 14: Confidentiality 1. Panel deliberations shall be confidential.
2. The reports of panels shall be drafted without the presence of the parties to the dispute in the light of the information provided and the statements made.
3. Opinions expressed in the panel report by individual panelists shall be anonymous.
432. In Brazil — Aircraft (Article 21.5 — Canada II), Brazil strongly objected to the alleged disclosure of its confidential statements to the representatives of private parties who were not members of Canada’s delegation. Brazil submitted that the alleged disclosure by Canada was a serious breach of Canada’s obligations to respect the rules of confidentiality contained in Article 14 of the DSU and paragraph 3 of the Panel’s Working Procedures. According to Brazil, nothing in the Panel’s Working Procedures or the DSU authorizes disclosure of confidential documents to persons who are not members of a delegation. The Panel held that it did not think that Article 14 of the DSU was relevant to this issue since it “focuses on panels and their obligations in respect of confidentiality; it does not address itself to the obligations of the parties in respect of confidentiality”.(644)
XV. Article 15 back to top Article 15: Interim Review Stage 1. Following the consideration of rebuttal submissions and oral arguments, the panel shall issue the descriptive (factual and argument) sections of its draft report to the parties to the dispute. Within a period of time set by the panel, the parties shall submit their comments in writing.
2. Following the expiration of the set period of time for receipt of comments from the parties to the dispute, the panel shall issue an interim report to the parties, including both the descriptive sections and the panel’s findings and conclusions. Within a period of time set by the panel, a party may submit a written request for the panel to review precise aspects of the interim report prior to circulation of the final report to the Members. At the request of a party, the panel shall hold a further meeting with the parties on the issues identified in the written comments. If no comments are received from any party within the comment period, the interim report shall be considered the final panel report and circulated promptly to the Members.
3. The findings of the final panel report shall include a discussion of the arguments made at the interim review stage. The interim review stage shall be conducted within the time-period set out in paragraph 8 of Article 12.
1. Scope of the interim review 433. In Australia — Salmon, Australia had requested a review of the whole of the Panel’s report during the interim review on the grounds that a large part of the legal reasoning of the interim report was not based on an objective assessment of the matter before the Panel and contained a number of factual inaccuracies and assertions not supported by evidence before the Panel. The Panel recalled that Article 15 provides for the review of “precise aspects” of the interim report and not of the whole of the report. The Panel therefore dismissed Australia’s request.(645) 2. Confidentiality of interim reports 434. In US — Steel Safeguards, the Panel addressed the issue of the confidentiality of interim reports because it had discovered that the parties had not respected the confidentiality obligation and had disclosed aspects of the interim reports: “[W]e would like to address the issue of confidentiality of the Interim Reports. When, on 26 March 2002, we transmitted our Interim Reports to the parties, we clearly indicated that such Reports were confidential. Indeed, pursuant to the DSU, all panel proceedings remain confidential until the Panel Report is circulated to WTO Members. We had also explicitly emphasized at all our meetings with the parties that the panel proceedings were confidential. This was accepted by the parties and reflected in the Panel’s working procedures and in all our relevant correspondence with the parties. Therefore, we are concerned to discover that parties have not respected this confidentiality obligation and have disclosed aspects of the Panel’s Interim Reports. We consider that this lack of respect of a specific requirement imposed by the DSU and the Panel’s working procedures is regrettable and should not remain unmentioned.”(646) 3. Introduction of new evidence at the interim review stage 435. In EC — Sardines, the Appellate Body explained that the interim review stage is not an appropriate time to introduce new evidence: “The interim review stage is not an appropriate time to introduce new evidence. We recall that Article 15 of the DSU governs the interim review. Article 15 permits parties, during that stage of the proceedings, to submit comments on the draft report issued by the panel,(647) and to make requests “for the panel to review precise aspects of the interim report”.(648) At that time, the panel process is all but completed; it is only — in the words of Article 15 — ‘precise aspects’ of the report that must be verified during the interim review. And this, in our view, cannot properly include an assessment of new and unanswered evidence…”(649)
XVI. Article 16 back to top Article 16: Adoption of Panel Reports 1. In order to provide sufficient time for the Members to consider panel reports, the reports shall not be considered for adoption by the DSB until 20 days after the date they have been circulated to the Members.
2. Members having objections to a panel report shall give written reasons to explain their objections for circulation at least 10 days prior to the DSB meeting at which the panel report will be considered.
3. The parties to a dispute shall have the right to participate fully in the consideration of the panel report by the DSB, and their views shall be fully recorded.
4. Within 60 days after the date of circulation of a panel report to the Members, the report shall be adopted at a DSB meeting(7) unless a party to the dispute formally notifies the DSB of its decision to appeal or the DSB decides by consensus not to adopt the report. If a party has notified its decision to appeal, the report by the panel shall not be considered for adoption by the DSB until after completion of the appeal. This adoption procedure is without prejudice to the right of Members to express their views on a panel report.
(footnote original) 7 If a meeting of the DSB is not scheduled within this period at a time that enables the requirements of paragraphs 1 and 4 of Article 16 to be met, a meeting of the DSB shall be held for this purpose.
(a) Time-period under Article 16.4 436. On 2 December 2004, Australia, Brazil, Thailand and the European Communities requested that a meeting of the DSB be held on 13 December 2004 for the DSB to agree to postpone consideration of the Panel reports in EC — Export Subsidies on Sugarand to agree an extension of the corresponding time-period under Article 16.4 of the DSU until 31 January 2005. The request included the following procedural agreement reached by the parties concerned: “1. In order to take account of the end of year period, and to avoid inconveniencing the appeal procedure, the above parties agree that the 60 day time-period in Article 16.4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) as applicable to the above disputes will be extended to 31 January 2005, and that the agreement of the Dispute Settlement Body (DSB) to this extension will be sought at a meeting of the DSB to be requested for 13 December 2004.
2. This extension is agreed on the understanding that the rights of the parties to the disputes with respect to adoption or appeal of the panel reports are preserved, as if such adoption or appeal had been requested within the 60 days specified in Article 16.4 of the DSU.
3. The European Communities (EC) will file its notice of appeal of the panel reports in these disputes on 13 January 2005, provided the DSB agreement set out in paragraph 1 is obtained.
4. If for any reason the EC does not file its notice of appeal on 13 January 2005, the complainants may, individually or jointly, request a DSB meeting for adoption of the panel reports within the extended 60 day period.
5. The parties also agree that the complainants will request a second meeting of the DSB for 14 December 2004 for the adoption of the panel reports within the original 60 day period should this prove necessary, but that this request will be withdrawn should the DSB agreement set out in paragraph 1 above be obtained.”(651) 437. At the DSB meeting of 13 December 2004, the DSB took note of the request and agreed that it would adopt the Panel Reports, upon request, on or before 31 January 2005, unless the DSB decided otherwise by consensus not to do so or a party notified the DSB of its decision to appeal.(652)
Footnotes: 608. See
paras. 919-930 of this Chapter on due process issues.
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