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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 17: Appellate Review Standing Appellate Body 1. A standing Appellate Body shall be established by the DSB. The Appellate Body shall hear appeals from panel cases. It shall be composed of seven persons, three of whom shall serve on any one case. Persons serving on the Appellate Body shall serve in rotation. Such rotation shall be determined in the working procedures of the Appellate Body.
2. The DSB shall appoint persons to serve on the Appellate Body for a four-year term, and each person may be reappointed once. However, the terms of three of the seven persons appointed immediately after the entry into force of the WTO Agreement shall expire at the end of two years, to be determined by lot. Vacancies shall be filled as they arise. A person appointed to replace a person whose term of office has not expired shall hold office for the remainder of the predecessor's term.
3. The Appellate Body shall comprise persons of recognized authority, with demonstrated expertise in law, international trade and the subject matter of the covered agreements generally. They shall be unaffiliated with any government. The Appellate Body membership shall be broadly representative of membership in the WTO. All persons serving on the Appellate Body shall be available at all times and on short notice, and shall stay abreast of dispute settlement activities and other relevant activities of the WTO. They shall not participate in the consideration of any disputes that would create a direct or indirect conflict of interest.
4. Only parties to the dispute, not third parties, may appeal a panel report. Third parties which have notified the DSB of a substantial interest in the matter pursuant to paragraph 2 of Article 10 may make written submissions to, and be given an opportunity to be heard by, the Appellate Body.
5. As a general rule, the proceedings shall not exceed 60 days from the date a party to the dispute formally notifies its decision to appeal to the date the Appellate Body circulates its report. In fixing its timetable the Appellate Body shall take into account the provisions of paragraph 9 of Article 4, if relevant. When the Appellate Body considers that it cannot provide its report within 60 days, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which it will submit its report. In no case shall the proceedings exceed 90 days.
6. An appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel.
7. The Appellate Body shall be provided with appropriate administrative and legal support as it requires.
8. The expenses of persons serving on the Appellate Body, including travel and subsistence allowance, shall be met from the WTO budget in accordance with criteria to be adopted by the General Council, based on recommendations of the Committee on Budget, Finance and Administration. Procedures for Appellate Review 9. Working procedures shall be drawn up by the Appellate Body in consultation with the Chairman of the DSB and the Director-General, and communicated to the Members for their information.
10. The proceedings of the Appellate Body shall be confidential. The reports of the Appellate Body shall be drafted without the presence of the parties to the dispute and in the light of the information provided and the statements made.
11. Opinions expressed in the Appellate Body report by individuals serving on the Appellate Body shall be anonymous.
12. The Appellate Body shall address each of the issues raised in accordance with paragraph 6 during the appellate proceeding.
13. The Appellate Body may uphold, modify or reverse the legal findings and conclusions of the panel. Adoption of Appellate Body Reports 14. An Appellate Body report shall be adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the Appellate Body report within 30 days following its circulation to the Members.(8) This adoption procedure is without prejudice to the right of Members to express their views on an Appellate Body report.
(footnote original) 8 If a meeting of the DSB is not scheduled during this period, such a meeting of the DSB shall be held for this purpose.
352. In US - Gasoline, the United States in its appeal argued that the issues of whether clean air is an exhaustible natural resources within the meaning of Article XX(g) and whether the baseline establishment rules are consistent with the TBT Agreement were not properly brought before the Appellate Body in accordance with the Working Procedures. Venezuela and Brazil appealed the relevant findings of the Panel, but brought up these issues in their appellee's submission, contrary to the Appellate Body's Working Procedures which stipulated that such "cross-appeal" be brought in an appellant's submission. The Appellate Body refused to "casually ... disregard" its own Working Procedures and stated: "[T]o deal with those two issues, under the circumstances of this appeal, would have required the Appellate Body casually to disregard its own Working Procedures and to do so in the absence of a compelling reason grounded on, for instance, fundamental fairness or force majeure. Venezuela and Brazil could have appealed the Panel's finding and non-finding on the two matters by taking advantage of Rules 23(1) or 23(4) of the Working Procedures and thereby placing the Appellate Body in a position to dispose of those issues directly in one and the same appellate proceeding.
... the route ... Brazil and Venezuela chose for addressing the two issues in question is not contemplated by the Working Procedures, and therefore, these issues are not properly the subject of this appeal."(529) (a) Establishment of the Appellate Body 353. At its meeting of 10 February 1995, the DSB established the Appellate Body in accordance with Article 17.1 of the DSU.(530) (a) Appointment of Members of the Appellate Body 354. On 6 December 1994, the Preparatory Committee to the WTO approved its recommendations for the procedures for the appointment of Appellate Body members.(531) As of 31 December 2002, the members of the Appellate Body are Mr Georges Michel Abi-Saab, Mr James Bacchus, Mr Luiz Olavo Baptista, Mr Arumugamangalam Venkatachalam Ganesan, Mr John Lockart, Mr Giorgio Sacerdoci and Mr Yasuhei Taniguchi. 4. Article 17.6: Scope of Appellate review (a) "issues of law ... and legal interpretations" (i) Factual findings versus legal findings 355. In EC - Hormones, the Appellate Body made a distinction between factual(532) and legal findings and stressed that factual findings "are, in principle, not subject to [its] review": "Under Article 17.6 of the DSU, appellate review is limited to appeals on questions of law covered in a panel report and legal interpretations developed by the panel. Findings of fact, as distinguished from legal interpretations or legal conclusions, by a panel are, in principle, not subject to review by the Appellate Body. The determination of whether or not a certain event did occur in time and space is typically a question of fact; for example, the question of whether or not Codex has adopted an international standard, guideline or recommendation on [one of the growth hormones at issue] is a factual question. ... The consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is, however, a legal characterization issue. It is a legal question."(533) 356. In EC - Hormones the Appellate Body further considered when may a Panel be regarded as having failed to discharge its duty under Article 11 of the DSU to make an objective assessment of the facts. The Appellate Body stated that "not every error in the appreciation of evidence may be characterized as a failure to make an objective assessment of the facts". The Appellate Body identified three types of factual mistakes that could affect the objective assessment: "The question which then arises is this: when may a panel be regarded as having failed to discharge its duty under Article 11 of the DSU to make an objective assessment of the facts before it? Clearly, not every error in the appreciation of the evidence (although it may give rise to a question of law) may be characterized as a failure to make an objective assessment of the facts. In the present appeal, the European Communities repeatedly claims that the Panel disregarded or distorted or misrepresented the evidence submitted by the European Communities and even the opinions expressed by the Panel's own expert advisors. The duty to make an objective assessment of the facts is, among other things, an obligation to consider the evidence presented to a panel and to make factual findings on the basis of that evidence. The deliberate disregard of, or refusal to consider, the evidence submitted to a panel is incompatible with a panel's duty to make an objective assessment of the facts. The wilful distortion or misrepresentation of the evidence put before a panel is similarly inconsistent with an objective assessment of the facts. "Disregard" and "distortion" and "misrepresentation" of the evidence, in their ordinary signification in judicial and quasi-judicial processes, imply not simply an error of judgment in the appreciation of evidence but rather an egregious error that calls into question the good faith of a panel.(534)..."(535) (ii) Panel as the trier of the facts 357. In EC - Hormones, the Appellate Body stressed the role of the Panel as the trier of facts and considered that the "[d]etermination of the credibility and weight properly to be ascribed to (that is, the appreciation of) a given piece of evidence is part and parcel of the fact finding process and is, in principle, left to the discretion of a panel as the trier of facts."(536) 358. In Korea - Alcoholic Beverages, the Appellate Body reiterated the role of the Panel as the trier of facts with the corresponding discretion to examine and weigh the evidence. The Appellate Body however held that this discretion "is not, of course, unlimited" since it is always subject to the panel's duty to render an objective assessment of the matter before it:(537) "The Panel's examination and weighing of the evidence submitted fall, in principle, within the scope of the Panel's discretion as the trier of facts and, accordingly, outside the scope of appellate review. This is true, for instance, with respect to the Panel's treatment of the Dodwell Study, the Sofres Report and the Nielsen Study. We cannot second-guess the Panel in appreciating either the evidentiary value of such studies or the consequences, if any, of alleged defects in those studies. Similarly, it is not for us to review the relative weight ascribed to evidence on such matters as marketing studies, methods of production, taste, colour, places of consumption, consumption with 'meals' or with 'snacks', and prices.
A panel's discretion as trier of facts is not, of course, unlimited. That discretion is always subject to, and is circumscribed by, among other things, the panel's duty to render an objective assessment of the matter before it. In European Communities - Hormones, we dealt with allegations that the panel had 'disregarded', 'distorted' and 'misrepresented' the evidence before it."(538) (iii) Characterization of a finding by the Panel 359. In Chile - Price Band System, the Appellate Body noted that the Panel's characterization of a finding "as a factual matter" does not mean that the issue is shielded from appellate review: "[T]he Panel's characterization of its finding 'as a factual matter' does not mean that the issue whether Chile's price band system is a border measure similar to a variable import levy or a minimum import price is shielded from appellate review. This is a question of law, and not of fact, and thus is clearly within our jurisdiction under Article 17.6 of the DSU.(539) As we said in our Report in EC - Hormones, the assessment of the consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is an issue of legal characterization. The mere assertion by a panel that its conclusion is a 'factual matter' does not make it so. ... All the same, in reviewing the Panel's assessment of Chile's price band system, we are mindful of the need to give due deference to the discretion of the Panel, as the 'trier of fact', to weigh the evidence before it."(540) (iv) Statements of panels not amounting to "legal findings" 360. In US - Wool Shirts and Blouses, the Appellate Body declined to address a particular statement by the Panel appealed by India. The Appellate Body held that the statement was not a legal finding, but rather a "descriptive and gratuitous comment": "India appealed the following statement relating to Article 6.10 of the ATC at paragraph 7.20 of the Panel Report:
'During the review process, the TMB is not limited to the initial information submitted by the importing Member as parties may submit additional and other information in support of their positions, which, we understand, may relate to subsequent events.' (emphasis added)
In our view, this statement by the Panel is purely a descriptive and gratuitous comment providing background concerning the Panel's understanding of how the TMB functions. We do not consider this comment by the Panel to be 'a legal finding or conclusion' which the Appellate Body 'may uphold, modify or reverse' (541)."(542) 361. In EC - Poultry, the Appellate Body addressed the issue of the allocation of a tariff-rate quota share to a non-Member and the participation of non-Members in the "others" category of a tariff-rate quota. In this context the Appellate Body stated that it was mindful of the mandate under Article 17.6 of the DSU and held that, contrary to Brazil's claim, the Panel had not made any legal findings on this issue: "It is true that in footnote 140 of the Panel Report, the Panel states that paragraph 7.75 of the EC - Bananas panel reports and 'particularly the use of the phrase 'all suppliers other than Members with a substantial interest in supplying the product' ... indicates that the Banana III panel did not take the view that allocation of quota shares to non-Members under Article XIII:2(d) was not permitted'. We do not consider this comment made in a footnote by the Panel to be either a 'legal interpretation developed by the panel' within the meaning of Article 17.6 of the DSU or a 'legal finding' or 'conclusion' that the Appellate Body may 'uphold, modify or reverse' under Article 17.13 of the DSU. It is undisputed in this case that there is no allocation of a country-specific share in the tariff-rate quota to a non-Member. There is, therefore, no finding nor any 'legal interpretation developed by the panel' that may be the subject of an appeal of which the Appellate Body may take cognizance."(543) 362. In Canada - Aircraft, Brazil had raised an argument during the appellate review which it had not raised during the Panel review. The Appellate Body, although it found that this new argument was beyond the scope of appellate review, stated that "new arguments are not per se excluded from the scope of appellate review, simply because they are new": "In our view, this new argument raised by Brazil is beyond the scope of appellate review. Article 17.6 of the DSU provides that '[a]n appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel'. In principle, new arguments are not per se excluded from the scope of appellate review, simply because they are new. However, for us to rule on Brazil's new argument, we would have to solicit, receive and review new facts that were not before the Panel, and were not considered by it. In our view, Article 17.6 of the DSU manifestly precludes us from engaging in any such enterprise."(544) 363. The Appellate Body in US - FSC declined to address a "new" argument regarding double taxation under the last sentence of footnote 59 of the SCM Agreement because it considered that this new argument did not involve either an "issue of law covered in the panel report" or "legal interpretations developed by the panel": "The argument which the United States asks us to address under the fifth sentence of footnote 59 involves two separate legal issues: first, that the FSC measure is a measure 'to avoid double taxation of foreign-source income' within the meaning of footnote 59; and second, that, in consequence, the FSC measure is excluded from the prohibition in Article 3.1(a) of the SCM Agreement against export subsidies. In our view, examination of the substantive issues raised by this particular argument would be outside the scope of our mandate under Article 17.6 of the DSU, as this argument does not involve either an 'issue of law covered in the panel report' or 'legal interpretations developed by the panel'. The Panel was simply not asked to address the issues raised by the United States' new argument. Further, the new argument now made before us would require us to address legal issues quite different from those which confronted the Panel and which may well require proof of new facts. ... We, therefore, decline to examine the United States' argument that the FSC measure is a measure 'to avoid double taxation' within the meaning of footnote 59, and we reserve our opinion on this issue.(545) 364. In US - Gasoline, the Appellate Body, further to reversing the Panel's conclusions on the first part of Article XX(g) of GATT 1994 and having completed the Article XX(g) analysis in that case, examined the measure's consistency with the provisions of the chapeau of Article XX, based on the legal findings contained in the Panel Report.(546) 365. In Canada - Periodicals, the Appellate Body reversed the Panel's findings on the issue of "like products" under Article III:2 of GATT 1994. The Appellate Body then addressed the question whether it could "complete the Panel's analysis", specifically whether it could proceed to make a determination whether the goods at issue were "directly competitive or substitutable" within the meaning of Article III:2, second sentence, of GATT 1994. The Appellate Body held that it could do so, noting that Article III:2, first sentence and Article III:2, second sentence were part of a "logical continuum": "We are mindful of the limitation of our mandate in Articles 17.6 and 17.13 of the DSU. According to Article 17.6, an appeal shall be limited to issues of law covered in the Panel Report and legal interpretations developed by the Panel. The determination of whether imported and domestic products are 'like products' is a process by which legal rules have to be applied to facts. In any analysis of Article III:2, first sentence, this process is particularly delicate, since 'likeness' must be construed narrowly and on a case-by-case basis. We note that, due to the absence of adequate analysis in the Panel Report in this respect, it is not possible to proceed to a determination of like products. ... We believe the Appellate Body can, and should, complete the analysis of Article III:2 of the GATT 1994 in this case by examining the measure with reference to its consistency with the second sentence of Article III:2, provided that there is a sufficient basis in the Panel Report to allow us to do so. The first and second sentences of Article III:2 are closely related. The link between the two sentences is apparent from the wording of the second sentence, which begins with the word 'moreover'. It is also emphasized in Ad Article III, paragraph 2, which provides: 'A tax conforming to the requirements of the first sentence of paragraph 2 would be considered to be inconsistent with the provisions of the second sentence only in cases where ...'. An examination of the consistency of Part V.1 of the Excise Tax Act with Article III:2, second sentence, is therefore part of a logical continuum.
The Appellate Body found itself in a similar situation in United States - Gasoline. Having reversed the Panel's conclusions on the first part of Article XX(g) and having completed the Article XX(g) analysis in that case, the Appellate Body then examined the measure's consistency with the provisions of the chapeau of Article XX, based on the legal findings contained in the Panel Report.(547)
As the legal obligations in the first and second sentences are two closely-linked steps in determining the consistency of an internal tax measure with the national treatment obligations of Article III:2, the Appellate Body would be remiss in not completing the analysis of Article III:2. In the case at hand, the Panel made legal findings and conclusions concerning the first sentence of Article III:2, and because we reverse one of those findings, we need to develop our analysis based on the Panel Report in order to issue legal conclusions with respect to Article III:2, second sentence, of the GATT 1994."(548) 366. In EC - Hormones, the Appellate Body, having reversed the Panel's findings under Article 5.5 of the SPS Agreement, refused to complete the analysis by examining the measure under Article 5.6. According to the Appellate Body; it "cannot be assumed that all the findings of fact necessary to proceed to a determination of consistency or inconsistency of the EC measures with the requirements of Article 5.6 have been made by the Panel".(549) 367. In EC - Poultry, the Appellate Body referring to its previous rulings on US - Gasoline and Canada - Periodicals, held that, having reversed the Panel's finding on Article 5.1(b) of the Agreement on Agriculture, it should complete its analysis of the c.i.f. import price by making a finding with respect to the consistency of the EC regulation with Article 5.5, which was not addressed by the Panel for reasons of judicial economy: "We are aware of the provisions of Article 17 of the DSU that state our jurisdiction and our mandate. Article 17.6 of the DSU provides: "An appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel". Article 17.13 of the DSU states: "The Appellate Body may uphold, modify or reverse the legal findings and conclusions of the panel." In certain appeals, however, the reversal of a panel's finding on a legal issue may require us to make a finding on a legal issue which was not addressed by the panel. This occurred, for example, in the appeals in United States - Standards for Reformulated and Conventional Gasoline(550) and in Canada - Certain Measures Concerning Periodicals.(551) And, in this appeal, as we have reversed the Panel's finding on Article 5.1(b), we believe we should complete our analysis of the c.i.f. import price by making a finding with respect to the consistency of the EC regulation with Article 5.5, which was not addressed by the Panel for reasons of judicial economy."(552) 368. In Australia - Salmon, the Appellate Body noted that "[b]ecause the Panel finds that the difference in the level of protection in respect of the three natural hormones, when used for growth promotion purposes, and the level of protection in respect of natural hormones present endogenously in meat and other foods is unjustifiable, the Panel regards it as unnecessary to decide whether the difference in the levels of protection set by the European Communities in respect of natural hormones used as growth promoters and in respect of the same hormones when used for therapeutic or zootechnical purposes, is justified." The Appellate Body then decided to complete the Panel's analysis: "In certain appeals, when we reverse a panel's finding on a legal issue, we may examine and decide an issue that was not specifically addressed by the panel, in order to complete the legal analysis and resolve the dispute between the parties. This occurred, for example, in the appeals in United States - Gasoline, Canada - Certain Measures Concerning Periodicals, European Communities - Measures Affecting the Importation of Certain Poultry Products ('European Communities - Poultry'), and United States - Import Prohibition of Certain Shrimp and Shrimp Products.
As we have reversed the Panel's finding that the SPS measure at issue, erroneously identified as the heat-treatment requirement, is not based on a risk assessment, we believe that - to the extent possible on the basis of the factual findings of the Panel and/or of undisputed facts in the Panel record - we should complete the legal analysis and determine whether the actual SPS measure at issue, i.e., Australia's import prohibition on fresh, chilled or frozen ocean-caught Pacific salmon, is based on a risk assessment."(553) 369. In Argentina - Footwear (EC), the Appellate Body upheld the conclusions of the Panel that Argentina's investigation in that case was inconsistent with the requirements of Articles 2 and 4 of the Agreement on Safeguards. The Appellate Body then stated that, as there was no legal basis for the safeguard measure at issue, it was not necessary to complete the analysis: "As a consequence, there is no legal basis for the safeguard measures imposed by Argentina. For this reason, we do not believe that it is necessary to complete the analysis of the Panel relating to the claim made by the European Communities under Article XIX of the GATT 1994 by ruling on whether the Argentine authorities have, in their investigation, demonstrated that the increased imports in this case occurred 'as a result of unforeseen developments'"(554) 370. In Korea - Dairy, the Appellate Body considered the European Communities' request that the Appellate Body complete the Panel's reasoning and find that by imposing a safeguard measure in circumstances where the alleged increase in imports was not "as a result of unforeseen developments" within the meaning of Article XIX:1(a) of GATT 1994, Korea also violated its obligations under Article XIX of the GATT 1994. The Appellate Body declined to do so, noting there were insufficient factual findings: "In the absence of any factual findings by the Panel or undisputed facts in the Panel record relating to whether the alleged increase in imports was, indeed, 'a result of unforeseen developments and of the effect of the obligations incurred by a Member under this Agreement, including tariff concessions ...', we are not in a position, within the scope of our mandate set forth in Article 17 of the DSU, to complete the analysis and make a determination as to whether Korea acted inconsistently with its obligations under Article XIX:1(a). Accordingly, we are unable to come to a conclusion on whether or not Korea violated its obligations under Article XIX:1(a) of the GATT 1994."(555) 371. The Appellate Body in Korea - Dairy also noted that in determining whether Korea violated the second sentence of Article 5.1 of the Agreement on Safeguards, it would have to determine whether the quantitative restrictions imposed by Korea were below the average level of imports in the last three representative years for which statistics were available, and if so, whether Korea had given a reasoned explanation as required by the second sentence of Article 5.1. Similarly, with regard to its conclusions referenced in paragraph 370 above, the Appellate Body held that it did not have a sufficient factual basis on which to complete the analysis: "The Panel did not make any factual findings on the average level of imports of skimmed milk powder preparations in the last three representative years. The average level of imports in that period was also contested by the parties. Accordingly, we are not in a position, within the scope of our mandate under Article 17 of the DSU, to complete the analysis in this case and make a determination as to the consistency of Korea's safeguard measure with the second sentence of Article 5.1."(556) 372. In EC - Asbestos, the Appellate Body specified the conditions under which it would hold itself competent to "complete the analysis" of a panel. It held that it would do so when there were sufficient factual findings made by the Panel and the additional analysis required was "closely related" to the findings actually made by the Panel. Finally, the Appellate Body noted that the rules it would have had to apply, had it decided to "complete the analysis" in the present case, would have meant applying provisions which had "not previously been the subject of any interpretation or application by either panels or the Appellate Body". Ultimately, the Appellate Body decided not to complete the panel's analysis in this respect: "As we have reached a different conclusion from the Panel's regarding the applicability of the TBT Agreement to the measure, we now consider whether it is appropriate for us to rule on the claims made by Canada relating to the TBT Agreement. In previous appeals, we have, on occasion, completed the legal analysis with a view to facilitating the prompt settlement of the dispute, pursuant to Article 3.3 of the DSU.(557) However, we have insisted that we can do so only if the factual findings of the panel and the undisputed facts in the panel record provide us with a sufficient basis for our own analysis. If that has not been the case, we have not completed the analysis.(558)
The need for sufficient facts is not the only limit on our ability to complete the legal analysis in any given case. In Canada - Periodicals, we reversed the panel's conclusion that the measure at issue was inconsistent with Article III:2, first sentence, of the GATT 1994, and we then proceeded to examine the United States' claims under Article III:2, second sentence, which the panel had not examined at all. However, in embarking there on an analysis of a provision that the panel had not considered, we emphasized that 'the first and second sentences of Article III:2 are closely related' and that those two sentences are "part of a logical continuum."(559) (emphasis added)
In this appeal, Canada's outstanding claims were made under Articles 2.1, 2.2, 2.4 and 2.8 of the TBT Agreement. We observe that, although the TBT Agreement is intended to "further the objectives of GATT 1994", it does so through a specialized legal regime that applies solely to a limited class of measures. For these measures, the TBT Agreement imposes obligations on Members that seem to be different from, and additional to, the obligations imposed on Members under the GATT 1994.
As the Panel decided not to examine Canada's four claims under the TBT Agreement, it made no findings, at all, regarding any of these claims. Moreover, the meaning of the different obligations in the TBT Agreement has not previously been the subject of any interpretation or application by either panels or the Appellate Body. Similarly, the provisions of the Tokyo Round Agreement on Technical Barriers to Trade, which preceded the TBT Agreement and which contained obligations similar to those in the TBT Agreement, were also never the subject of even a single ruling by a panel."(560) 5. Article 17.9: Working procedures of the Appellate Body (a) "Working procedures shall be drawn up by the Appellate Body" 373. On 15 February 1996, the Appellate Body circulated the Working Procedures of the Appellate Body as an unrestricted document.(561) For the text of the Working Procedures in force on 31 December 2002, see Section XXXII below. (ii) Appellate Body's authority to adopt procedural rules 374. In US - Lead and Bismuth II, the Appellate Body examined whether it could admit amicus curiae briefs (see paragraphs 634-639 below; with respect to the issue of amicus curiae briefs submitted to panels, see paragraphs 337-338 above). The Appellate Body confirmed its broad authority to adopt procedural rules: "[Article 17.9 of the DSU] makes clear that the Appellate Body has broad authority to adopt procedural rules which do not conflict with any rules and procedures in the DSU or the covered agreements.(562) Therefore, we are of the opinion that as long as we act consistently with the provisions of the DSU and the covered agreements, we have the legal authority to decide whether or not to accept and consider any information that we believe is pertinent and useful in an appeal."(563) (iii) Amendment of working procedures Rule 5(2): Chairman of the Appellate Body 375. In a communication, dated 24 February 1997, the Chairman of the Appellate Body informed the Chairman of the Dispute Settlement Body and the WTO Members that the Appellate Body, after consultations with the DSB Chairman and the Director-General, pursuant to paragraph 9 of Article 17 of the DSU and Rule 32(2) of the Working Procedures for Appellate Review(564) (the "Working Procedures"), had amended Rule 5(2) of its Working Procedures as follows: "5. Paragraph 2 is hereby repealed and replaced with the following:
(2) The first Chairman of the Appellate Body shall have a term of office of two years. Thereafter, the term of office of the Chairman shall be one year. In order to ensure rotation of the Chairmanship, no Member shall serve as Chairman for more than one term consecutively."(565) 376. Accordingly, the Appellate Body members extended the term of the Chairman until 7 February 1998. A revised version of the Working Procedures was circulated to WTO Members on 28 February 1997 in document WT/AB/WP/3. A consolidated, revised version of the Working Procedures was circulated to WTO Members on 24 January 2002 in document WT/AB/WP/4. This document reflects the above amendment to Rule 5(2) and replaces document WT/AB/WP/3. Rules 1, 24 and 27(3): Third participants 377. In a communication (WT/AB/WP/4), dated 27 September 2002, the Chairman of the Appellate Body informed the Chairman of the DSB and the WTO Members that the Appellate Body, after consultations with the DSB Chairman and the Director General, pursuant to Article 17.9 of the DSU and Rule 32(2) of the Working Procedures, had amended Rules 1, 24 and 27 of its Working Procedures as follows: "1. The definition of 'third participant' in Rule 1 shall be deleted and replaced by the following:
'third participant'
means any third party that has filed a submission pursuant to Rule 24(1), that has notified the Secretariat pursuant to Rule 24(2) that it intends to appear at the oral hearing;
2. Rule 24 shall be deleted and replaced by the following:
Third Participants
24. (1) Any third party may file a written submission containing the grounds and legal arguments in support of its position. Such submission shall be filed within 25 days after the date of the filing of the Notice of Appeal.
(2) A third party not filing such written submission shall, within the same period of 25 days, notify the Secretariat in writing if it intends to appear at the oral hearing, and, if so, whether it intends to make an oral statement.
(3) Third parties wishing to participate in the appeal are encouraged to file written submissions to facilitate their positions being taken fully into account by the division hearing the appeal.
(4) Any third party that has neither filed a written submission in accordance with paragraph (1), nor notified the Secretariat in accordance with paragraph (2), may, at the discretion of the division hearing the appeal, make an oral statement at the oral hearing, respond to questions posed by the division, and comment on responses given by others.
3. Paragraph 3 of Rule 27 shall be deleted and replaced by the following:
(3) Any third participant that has filed a submission pursuant to Rule 24(1) or has notified the Secretariat pursuant to Rule 24(2) that it intends to appear at the oral hearing may appear to make oral arguments or presentations at the oral hearing." 378. In a communication(566), dated 17 December 2002, the Chairman of the Appellate Body provided the Chairman of the DSB and WTO Members with additional explanations regarding the above amendments to Rules 1, 24 and 27 of the Working Procedures. The Chairman also proposed making further amendments to Rules 1, 24(4), and 27, as well as additional consequential amendments to Rules 16(1), 18(5), 19 and 28, as well as to Annex 1. In its communication, the Chairman of the Appellate Body indicated that the intention was to adopt the proposed additional amendments to the Working Procedures in early 2003, to have effect as from 15 February 2003. In the meantime, the Appellate Body would continue to apply provisionally the Rules as amended in September 2002 (see paragraph 377 above). (b) Interpretation of the Working Procedures 379. In EC - Sardines, the Appellate Body stated its Working Procedures cannot be interpreted in a way that could undermine the effectiveness of the dispute settlement system because they have been drawn up pursuant to the DSU: "[W]e emphasize that the Working Procedures must not be interpreted in a way that could undermine the effectiveness of the dispute settlement system, for they have been drawn up pursuant to the DSU and as a means of ensuring that the dispute settlement mechanism achieves the aim of securing a positive solution to a dispute.(567) As we have said:
The procedural rules of WTO dispute settlement are designed to promote ... the fair, prompt and effective resolution of trade disputes.(568)
This obligation to interpret the Working Procedures in a way that promotes the effective resolution of disputes is complemented by the obligation of Members, set out in Article 3.10 of the DSU, to 'engage in [dispute settlement] procedures in good faith in an effort to resolve the dispute'. Hence, the right to withdraw an appeal must be exercised subject to these limitations, which are applicable generally to the dispute settlement process."(569) (c) Rule 16(1): Amicus curiae briefs 380. In EC - Asbestos, the Appellate Body adopted an additional procedure, for the purposes of this appeal only, pursuant to Rule 16(1) of its Working Procedures, to deal with any possible submissions received from amicus curiae (see paragraph 638 below). The additional procedure was posted on the WTO website on 8 November 2000 and provides as follows: "1. In the interests of fairness and orderly procedure in the conduct of this appeal, the Division hearing this appeal has decided to adopt, pursuant to Rule 16(1) of the Working Procedures for Appellate Review, and after consultations with the parties and third parties to this dispute, the following additional procedure for purposes of this appeal only.
2. Any person, whether natural or legal, other than a party or a third party to this dispute, wishing to file a written brief with the Appellate Body, must apply for leave to file such a brief from the Appellate Body by noon on Thursday, 16 November 2000.
3. An application for leave to file such a written brief shall:
(a) be made in writing, be dated and signed by the applicant, and include the address and other contact details of the applicant;
(b) be in no case longer than three typed pages;
(c) contain a description of the applicant, including a statement of the membership and legal status of the applicant, the general objectives pursued by the applicant, the nature of the activities of the applicant, and the sources of financing of the applicant;
(d) specify the nature of the interest the applicant has in this appeal;
(e) identify the specific issues of law covered in the Panel Report and legal interpretations developed by the Panel that are the subject of this appeal, as set forth in the Notice of Appeal (WT/DS135/8) dated 23 October 2000, which the applicant intends to address in its written brief;
(f) state why it would be desirable, in the interests of achieving a satisfactory settlement of the matter at issue, in accordance with the rights and obligations of WTO Members under the DSU and the other covered agreements, for the Appellate Body to grant the applicant leave to file a written brief in this appeal; and indicate, in particular, in what way the applicant will make a contribution to the resolution of this dispute that is not likely to be repetitive of what has been already submitted by a party or third party to this dispute; and
(g) contain a statement disclosing whether the applicant has any relationship, direct or indirect, with any party or any third party to this dispute, as well as whether it has, or will, receive any assistance, financial or otherwise, from a party or a third party to this dispute in the preparation of its application for leave or its written brief.
5. The Appellate Body will review and consider each application for leave to file a written brief and will, without delay, render a decision whether to grant or deny such leave.
6. The grant of leave to file a brief by the Appellate Body does not imply that the Appellate Body will address, in its Report, the legal arguments made in such a brief.
7. Any person, other than a party or a third party to this dispute, granted leave to file a written brief with the Appellate Body, must file its brief with the Appellate Body Secretariat by noon on Monday, 27 November 2000.
8. A written brief filed with the Appellate Body by an applicant granted leave to file such a brief shall:
(a) be dated and signed by the person filing the brief;
(b) be concise and in no case longer than 20 typed pages, including any appendices; and
(c) set out a precise statement, strictly limited to legal arguments, supporting the applicant's legal position on the issues of law or legal interpretations in the Panel Report with respect to which the applicant has been granted leave to file a written brief.
8. An applicant granted leave shall, in addition to filing its written brief with the Appellate Body Secretariat, also serve a copy of its brief on all the parties and third parties to the dispute by noon on Monday, 27 November 2000.
9. The parties and the third parties to this dispute will be given a full and adequate opportunity by the Appellate Body to comment on and respond to any written brief filed with the Appellate Body by an applicant granted leave under this procedure. (original emphasis)"(570) (d) Rule 20(2): Notice of appeal (i) Rule 20(2)(d): "brief statement of the nature of appeal, including the allegations of error" Claims of error 381. In US - Shrimp, the Appellate Body discussed the requirement in the Working Procedures for Appellate Review according to which the appellant is to be brief in its notice of appeal in setting out "the nature of the appeal, including the allegations of errors". The Appellate Body concluded that "the 'nature of the appeal' and 'the allegations of errors' are sufficiently set out where the notice of appeal adequately identifies the findings or legal interpretations of the Panel that are being appealed as erroneous": "The Working Procedures for Appellate Review enjoin the appellant to be brief in its notice of appeal in setting out 'the nature of the appeal, including the allegations of errors'. We believe that, in principle, the 'nature of the appeal' and 'the allegations of errors' are sufficiently set out where the notice of appeal adequately identifies the findings or legal interpretations of the Panel which are being appealed as erroneous. The notice of appeal is not expected to contain the reasons why the appellant regards those findings or interpretations as erroneous. The notice of appeal is not designed to be a summary or outline of the arguments to be made by the appellant. The legal arguments in support of the allegations of error are, of course, to be set out and developed in the appellant's submission."(571) 382. The appellees in US - Shrimp argued that the notice of appeal of the United States was both vague and cursory and therefore not in compliance with the procedural requirements of Rule 20(2)(572) of the Working Procedures for Appellate Review. The Appellate Body disagreed: "It is scarcely necessary to add that an appellee is, of course, always entitled to its full measure of due process. In the present appeal, perhaps the best indication that that full measure of due process was not in any degree impaired by the notice of appeal filed by the United States, is the developed and substantial nature of the appellees' submissions."(573) 383. In EC - Bananas III, the Appellate Body had to decide whether the European Communities had properly indicated, in its notice of appeal, that it was appealing one particular Panel finding relating to Ecuador's right to invoke Article XIII:2 or XIII:4 of GATT 1994: "The Panel's finding on this issue reads as follows:
'... we find that the failure of Ecuador's Protocol of Accession to address banana-related issues does not mean that Ecuador must accept the validity of the BFA as contained in the EC's Schedule or that it is precluded from invoking Article XIII:2 or XIII:4.'(574)
Paragraphs (c) and (d) of the Notice of Appeal [by the European Communities] read as follows:
'(c) The Panel erred in law in its interpretation of the Agreement on Agriculture and, in particular, of Articles 4.1 and 21.1 of that Agreement and their relation to the GATT, in particular its Article XIII.
(d) In the alternative: the Panel erred in its interpretation of Article XIII of GATT, in particular paragraph 2(d) (both in relation to the allocation of country shares in the Tariff Rate Quota (TRQ)) for bananas and to the tariff quota reallocation rules of the Banana Framework Agreement (BFA).' ... In our view, the claims of error by the European Communities set out in paragraphs (c) and (d) of the Notice of Appeal do not cover the Panel's finding in paragraph 7.93 of the Panel Reports. The finding in that paragraph explicitly deals with Ecuador's right to invoke Article XIII:2 or XIII:4 of the GATT 1994, given that Ecuador acceded to the WTO after the WTO Agreement entered into force and after the tariff quota for the BFA countries had been negotiated and inscribed in the EC Schedule to the GATT 1994. There is no specific mention of this Panel finding in either the Notice of Appeal or in the main arguments of the appellant's submission by the European Communities. Therefore, Ecuador had no notice that the European Communities was appealing this finding. For these reasons, we conclude that the Panel's finding in paragraph 7.93 of the Panel Reports should be excluded from the scope of this appeal."(575) Distinction between "claims of error" and "legal arguments" 384. In Chile - Price Band System, Chile argued that the Panel had erred in choosing to examine Argentina's claim under Article 4.2 of the Agreement on Agriculture before examining its claim under Article II:1(b) of the GATT 1994. Argentina raised a procedural objection, alleging that Chile introduced this point for the first time in its appellant's submission, when, according to Argentina, Chile should have included this "allegation of error" in its Notice of Appeal pursuant to Rule 20(2)(d) of the Working Procedures for Appellate Review. The Appellate Body referred to the distinction it made between claims and legal arguments under Article 6.2 of the DSU in EC - Bananas III (see paragraph 171 above). The Appellate Body considered that this distinction "is also relevant to the distinction between "allegations of error" and legal arguments as contemplated by Rule 20 of the Working Procedures": "In our view, this distinction between claims and legal arguments under Article 6.2 of the DSU is also relevant to the distinction between "allegations of error" and legal arguments as contemplated by Rule 20 of the Working Procedures. Bearing this distinction in mind, we do not agree with Argentina that Chile's arguments regarding the order of analysis chosen by the Panel amount to a separate "allegation of error" that Chile should have-or could have-included in its Notice of Appeal. In fact, we do not see, nor has Argentina explained, what separate "allegation of error" could have been made, or what legal basis for such "allegation of error" there could have been. Rather than making a separate "allegation of error", Chile has, in our view, simply set out a legal argument in support of the issues it raised on appeal relating to Article 4.2 of the Agreement on Agriculture and Article II:1(b) of the GATT 1994.(576)"(577) Replacement of a Notice of Appeal 385. The Appellate Body in EC - Sardines, after having considered that the conditional withdrawal of its Notice of Appeal by the European Communities was appropriate and effective, and that, therefore, the filing of a replacement Notice of Appeal did not constitute a second appeal (see paragraphs 387-388 below)(578), rejected Peru's request that the replacement Notice of Appeal be declared inadmissible because neither the DSU nor the Working Procedures "accord[s] an appellant the right to appeal the same panel report twice on different grounds": "Peru alleges that, in sanctioning the approach of the European Communities in this appeal, we would be creating a procedural right for which the DSU has not provided - a right that can only be added to the DSU through a formal amendment by the Members of the World Trade Organization (the "WTO"). We are, however, not creating a new procedural right; we are only upholding the right to withdraw an appeal. In addition, in admitting the replacement Notice of Appeal in this dispute, we are, as we were in United States - Import Prohibition of Certain Shrimp and Shrimp Products ("US - Shrimp"), seeking to:
... give full meaning and effect to the right of appeal and to give a party which regards itself aggrieved by some legal finding or interpretation in a panel report a real and effective opportunity to demonstrate the error in such finding or interpretation.(579)
In that same Report, we added that 'an appellee is, of course, always entitled to its full measure of due process.'(580) In the circumstances of this case, we believe that Peru has been accorded the full measure of its due process rights, because the withdrawal of the original Notice and the filing of a replacement Notice were carried out in response to objections raised by Peru, the replacement Notice was filed in a timely manner and early in the process, and the replacement Notice contained no new or modified grounds of appeal. Also, Peru has not demonstrated that it suffered prejudice as a result. Moreover, Peru was given an adequate opportunity to address its concerns about the European Communities' actions during the course of the appeal.
In our view, the withdrawal of the original Notice of Appeal of 25 June 2002 and its replacement with the Notice of Appeal of 28 June 2002 was not an exercise of abusive litigation techniques by the European Communities, but rather was an appropriate response under the circumstances to Peru's objections regarding the original Notice of Appeal."(581) (e) Rule 30(1) : Withdrawal of appeal (i) Nature of the right to withdraw an appeal 386. The Appellate Body in EC - Sardines considered that Rule 30(1) grants the appellant the right to withdraw an appeal which on its face appears to be "unfettered". The Appellate Body however referred to its previous ruling on US - FSC and recalled that, in spite of the permissive language of Rule 30(1), the Working Procedures must not be interpreted in a way that could undermine the effectiveness of the dispute settlement system (see paragraph 379 above): "This rule accords to the appellant a broad right to withdraw an appeal at any time. This right appears, on its face, to be unfettered: an appellant is not subject to any deadline by which to withdraw its appeal; an appellant need not provide any reason for the withdrawal; and an appellant need not provide any notice thereof to other participants in an appeal. More significantly for this appeal, there is nothing in the Rule prohibiting the attachment of conditions to a withdrawal. Indeed, in two previous cases, notices of appeal were withdrawn subject to the condition that new notices would be filed.(582) Nor is the right to withdraw an appeal expressly subject to the condition that no new notice be filed on the same matter after the withdrawal.
However, despite this permissive language, we emphasize that the Working Procedures must not be interpreted in a way that could undermine the effectiveness of the dispute settlement system, for they have been drawn up pursuant to the DSU and as a means of ensuring that the dispute settlement mechanism achieves the aim of securing a positive solution to a dispute.(583)..."(584) (ii) Conditional withdrawal of an appeal 387. In EC - Sardines, Peru claimed that Rule 30 did not permit conditions to be attached to a withdrawal of an appeal. The Appellate Body disagreed: "Peru submits that nothing in Rule 30 of the Working Procedures permits the attachment of conditions to the withdrawal of a notice of appeal, and that, therefore, this appeal must be deemed to have been withdrawn irrespective of whether the conditions are met. We find no support in Rule 30 for Peru's position. While it is true that nothing in the text of Rule 30(1) explicitly permits an appellant to exercise its right subject to conditions, it is also true that nothing in the same text prohibits an appellant from doing so. As we have just explained, in our view, the right to withdraw a notice of appeal under Rule 30(1) is broad, subject only to the limitations we have described. Therefore, we see no reason to interpret Rule 30 as granting a right to withdraw an appeal only if that withdrawal is unconditional. Rather, the correct interpretation, in our view, is that Rule 30(1) permits conditional withdrawals, unless the condition imposed undermines the "fair, prompt and effective resolution of trade disputes", or unless the Member attaching the condition is not "engag[ing] in [dispute settlement] procedures in good faith in an effort to resolve the dispute." Therefore, it is necessary to examine any such conditions attached to withdrawals on a case-by-case basis to determine whether, in fact, the particular condition in a particular case in any way obstructs the dispute settlement process, or in some way diminishes the rights of the appellee or other participants in the appeal."(585) 388. In EC - Sardines, the Appellate Body considered whether, by withdrawing its Notice of Appeal subject to the condition of filing a replacement notice of appeal, the European Communities had effectively undermined the "fair, prompt and effective resolution of trade disputes" (see paragraphs 379 and 386 above) or has not "engage[d] in [dispute settlement] procedures in good faith in an effort to resolve the dispute."(586) The Appellate Body considered that attaching a condition to the withdrawal was not unreasonable under the circumstances of the case(587) and addressed examples of situations where the attachment of conditions to a withdrawal of appeal could be abusive or contrary to the DSU: "We agree with Peru that there may be situations where the withdrawal of an appeal on condition of refiling a new notice, and the filing thereafter of a new notice, could be abusive and disruptive. However, in such cases, we would have the right to reject the condition, and also to reject any filing of a new notice of appeal, on the grounds either that the Member seeking to file such a new notice would not be engaging in dispute settlement proceedings in good faith, or that Rule 30(1) of the Working Procedures must not be used to undermine the fair, prompt, and effective resolution of trade disputes. We agree with Peru that the rules must be interpreted so as to "ensure that appellate review proceedings do not become an arena for unfortunate litigation techniques that frustrate the objectives of the DSU, and that developing countries do not have the resources to deal with".(588) The case before us, however, presents none of these circumstances.
In addition, we believe there are circumstances that, although not constituting "abusive practices", would be in violation of the DSU, and would, thus, compel us to disallow the conditional withdrawal of a notice of appeal as well as the filing of a replacement notice. For example, if the conditional withdrawal or the filing of a new notice were to take place after the 60-day deadline in Article 16.4 of the DSU for adoption of panel reports, this would effectively circumvent the requirement to file appeals within 60 days of circulation of panel reports. In such circumstances, we would reject the conditional withdrawal and the new notice of appeal."(589)
XVIII. Article 18 back to top Article 18: Communications with the Panel or Appellate Body 1. There shall be no ex parte communications with the panel or Appellate Body concerning matters under consideration by the panel or Appellate Body.
2. Written submissions to the panel or the Appellate Body shall be treated as confidential, but shall be made available to the parties to the dispute. Nothing in this Understanding shall preclude a party to a dispute from disclosing statements of its own positions to the public. Members shall treat as confidential information submitted by another Member to the panel or the Appellate Body which that Member has designated as confidential. A party to a dispute shall also, upon request of a Member, provide a non-confidential summary of the information contained in its written submissions that could be disclosed to the public.
(a) Business confidential information (BCI) 389. In Canada - Aircraft, the Panel adopted special Procedures Governing Business Confidential Information that went beyond the protection afforded by Article 18.2 of the DSU. The Procedures state that the Business Confidential Information is to be stored in a safe in a locked room at the premises of the relevant Geneva missions, with restrictions imposed on access to the locked room and safe. The Procedures also provide for either party to visit the other party's Geneva mission and review the proposed location of the safe and propose any changes. In a subsequent submission, Canada stated that it could not submit BCI under the revised Procedures because they did not provide the requisite level of protection. The Panel stated: "[T]he important distinction between the 4 November 1998 Procedures, and the final Procedures, is that the latter would facilitate the work of the parties in preparing themselves for these 'fast-track' proceedings, without impairing the protection afforded to the substance of the BCI. The timetable of the proceedings is such that party representatives would be likely to spend large periods of time in Geneva. As noted above, Canada itself has recognised the need for a party to have 'reasonable access' to BCI submitted by the other party. In the context of a fast-track case in particular, we do not consider that there is 'reasonable access' to the BCI if a party is required to adjust its work in respect of that BCI to the official working hours of the WTO Secretariat, excluding evenings and weekends. Under the final Procedures, authorised representatives of the parties would have had the convenience of access to the BCI of the other party at any time of day or night, rather than during the working hours of the WTO Secretariat. In our view, the final Procedures therefore strike a reasonable balance between (1) the need for 'reasonable access' to BCI by the Panel and the other disputing parties, and (2) the need to provide private business interests with adequate protection for their proprietary business information."(590) 390. In Canada - Aircraft and Brazil - Aircraft, the Appellate Body made a preliminary ruling on 11 June 1999 that it was not necessary to adopt additional procedures to protect business confidential information in the appellate proceeding. The Appellate Body held that the existing provisions concerning confidentiality of dispute settlement proceedings were sufficient for the purposes at issue: "Pursuant to Article 17.9 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the 'DSU'), the Appellate Body has the authority to draw up its own Working Procedures. Under Rule 16.1 of our Working Procedures for Appellate Review, a Division of the Appellate Body may adopt additional procedures for the orderly conduct of a particular appeal, provided that any such additional procedures are not inconsistent with the DSU, the other covered agreements and the Working Procedures for Appellate Review. We have concluded, however, that it is not necessary, under all the circumstances of this case, to adopt additional procedures to protect 'business confidential information' during these appellate proceedings.
We note that, with respect to 'business confidential information' submitted to the Panel that remains currently in the possession of the participants, Article XII of the Panel Procedures Governing Business Confidential Information required the parties, '[a]t the conclusion of the Panel', to 'return any printed or binary-encoded Business Confidential information in their possession to the party that submitted such Business Confidential (sic)' and to 'destroy all tapes and transcripts of the Panel hearings that contain Business Confidential information, unless the parties mutually agree otherwise.' It thus appears that each participant has an obligation, under the Panel Procedures, to return any Business Confidential information submitted by the other participant. The WTO Secretariat, assisting the Panel, was required, by the Panel Procedures, to 'transmit any printed or binary-encoded Business Confidential information, plus all tapes and transcripts of the panel hearings that contain Business Confidential Information, to the Appellate Body as part of the record of the Panel proceedings.' That information will be kept in a secure, locked cabinet in the Appellate Body Secretariat.
We also note that all Members are obliged, by the provisions of the DSU, to treat these proceedings of the Appellate Body, including written submissions and other documents filed by the participants and the third participants, as confidential. We are confident that the participants and the third participants in this appeal will fully respect their obligations under the DSU, recognizing that a Member's obligation to maintain the confidentiality of these proceedings extends also to the individuals whom that Member selects to act as its representatives, counsel and consultants.
Accordingly, we decline the request of Brazil and Canada. The reasons for this ruling will be set out more fully in the Appellate Body Report in this appeal."(591) 391. In its final ruling in Canada - Aircraft, the Appellate Body determined that it had no further reasons to add to the first two paragraphs of its preliminary ruling, referenced in paragraph 390 above. Noting that its ruling applies only to the request for additional procedures to protect business confidential information, the Appellate Body stated: "[T]he provisions of Articles 17.10 and 18.2 apply to all Members of the WTO, and oblige them to maintain the confidentiality of any submissions or information submitted, or received, in an Appellate Body proceeding. Moreover, those provisions oblige Members to ensure that such confidentiality is fully respected by any person that a Member selects to act as its representative, counsel or consultant. ... For these reasons, we do not consider that it is necessary, under all the circumstances of this case, to adopt additional procedures for the protection of business confidential information in these appellate proceedings."(592) 392. In EC - Bananas III (US) (Article 22.6 - EC), the United States requested the Arbitrators to establish procedures for the handling of business confidential information similar to those established in several pending panel procedures.(593) Under the United States proposal, there would be two levels of BCI: regular BCI and super BCI. Regular BCI was described as company-specific information that was non-public and sensitive, but that could be extrapolated from other public and non-public information available to governments and the company's competitors. Super BCI was described as non-public, sensitive company-specific information that could not be so extrapolated.(594) The European Communities objected to the proposal on the grounds that working procedures on confidentiality should not be adopted on a case-by-case basis, but rather by WTO Members as a whole.(595) The Arbitrators finally adopted BCI procedures where, while agreeing with the United States that special rules were justified in light of the type of information involved, did not accept the need for special treatment of super BCI.(596) 393. In Brazil - Aircraft (Article 22.6 - Brazil), Brazil insisted in the course of the proceedings on the confidentiality of certain documents it had provided to the Arbitrators. The Arbitrators, who were mindful of the serious problems that could be caused by the disclosure of certain commercial or financial information, decided to prepare two versions of their report. The first version, including the details of their calculations and all the information relied upon, was issued exclusively to the parties on a confidential basis. The second version, in which the most commercially sensitive information had been removed, was circulated to the Members.(597) 394. In Thailand - H-Beams, an industry association submitted an amicus brief which cited Thailand's confidential submission. Thailand then claimed that Poland's private counsel may have violated WTO rules of confidentiality by providing Thailand's submission to the said association. Although Poland and the lawyer concerned denied the alleged breach of confidentiality, the Appellate Body rejected the amicus brief in a preliminary ruling: "The terms of Article 17.10 of the DSU are clear and unequivocal: "[t]he proceedings of the Appellate Body shall be confidential". Like all obligations under the DSU, this is an obligation that all Members of the WTO, as well as the Appellate Body and its staff, must respect. WTO Members who are participants and third participants in an appeal are fully responsible under the DSU and the other covered agreements for any acts of their officials as well as their representatives, counsel or consultants. We emphasized this in Canada - Measures Affecting the Export of Civilian Aircraft, WT/DS70/AB/R, para. 145, where we stated that:
... the provisions of Articles 17.10 and 18.2 apply to all Members of the WTO, and oblige them to maintain the confidentiality of any submissions or information submitted, or received, in an Appellate Body proceeding. Moreover, those provisions oblige Members to ensure that such confidentiality is fully respected by any person that a Member selects to act as its representative, counsel or consultant. (emphasis added)
We note that Poland has made substantial efforts to investigate this matter, and to gather information from its legal counsel, Hogan & Hartson L.L.P. We note as well the responses from the third participants, the European Communities, Japan and the United States. Furthermore, Poland has accepted the proposal made by Hogan & Hartson L.L.P. to withdraw as Poland's legal counsel in this appeal. On the basis of the responses we have received from Poland and from the third participants, and on the basis of our own examination of the facts on the record in this appeal, we believe that there is prima facie evidence that CITAC received, or had access to, Thailand's appellant's submission in this appeal.
We see no reason to accept the written brief submitted by CITAC in this appeal. Accordingly, we have returned this brief to CITAC."(598) 395. The Panel on Brazil - Aircraft (Article 21.5 - Canada II) rejected Brazil's arguments that Canada had acted inconsistently with the requirements of the DSU or the Panel's working procedures providing advisers who were not designated as members of its delegation with access to information submitted to the Panel by Brazil. A member of the Canadian delegation at a meeting of the Panel with the parties had provided a copy of Brazil's written version of its oral statement to persons who were not members of its delegation. Further, Canada had "shared [Brazil's submissions and statements] with members of a private law firm retained by a Canadian aircraft manufacturer".(599) The Panel advised as follows: "In our view, it emerges from [Article 18.2 of the DSU] that Canada must keep confidential all information submitted to this Panel by Brazil.(600) However, as the Appellate Body has noted, "a Member's obligation to maintain the confidentiality of [...] proceedings extends also to the individuals whom that Member selects to act as its representatives, counsel and consultants."(601) Thus, the Appellate Body clearly assumed that Members may provide confidential information also to non-government advisors.
We see nothing in Article 18.2 of the DSU, or any other provision of the DSU(602), to suggest that Members may share such confidential information with non-government advisors only if those advisors are members of an official delegation at a panel meeting.(603) Indeed, paragraph 13 of this Panel's Working Procedures expressly provides that:
The parties and third parties to this proceeding have the right to determine the composition of their own delegations. Delegations may include, as representatives of the government concerned, private counsel and advisers. The parties and third parties shall have responsibility for all members of their delegations and shall ensure that all members of their delegations, as well as any other advisors consulted by a party or third party, act in accordance with the rules of the DSU and the working procedures of this Panel, particularly in regard to confidentiality of the proceedings. Parties shall provide a list of the participants of their delegation before or at the beginning of the meeting with the Panel. (emphasis added)
It is apparent from the second and third sentences of paragraph 13 of the Working Procedures that the "other advisors" referred to are advisors who are not part of a Member's delegation at a panel meeting. It is equally clear to us that paragraph 13 is based on the premise that parties to panel proceedings may give their "other advisors" access to confidential information submitted by the other party.(604) Were it otherwise, there would be no point in requiring parties to safeguard the confidentiality of panel proceedings in respect of such "other advisors".(605)
On the basis of the foregoing, we are unable to accept Brazil's argument that Canada acted inconsistently with the requirements of the DSU or this Panel's Working Procedures by giving advisors not designated as members of its delegation access to information submitted to this Panel by Brazil.(606)
In reaching this conclusion, we note, however, that, pursuant to paragraph 13 of the Working Procedures, Canada must ensure that any advisors who were not members of its official delegation respect the confidentiality of the present proceedings."(607) 396. In relation to the involvement of private lawyers (see also paragraphs 628-631 below), the Panel on Brazil - Aircraft (Article 21.5 - Canada II) indicated that it had no basis for questioning a confidentiality agreement between the relevant private lawyers and the Canadian Government. Confidentiality rules are not to be used by a panel to "stifle" necessary communication between Member governments and their advisers, provided adequate safeguards are in place. "We note Canada's statement that the members of the law firm which have had access to Brazil's submissions have been part of its litigation team and have served as "advisors" to the Government of Canada. Since no members of a private law firm were part of Canada's delegation to the meeting of the Panel with the parties, the private lawyers Canada says were advising it fall within the "other advisors" category within the meaning of paragraph 13 of the Panel's Working Procedures. It was (and is), therefore, the responsibility of Canada to ensure that those private lawyers maintain the confidentiality of the documents submitted by Brazil.
Based on Canada's representations, we also understand that the law firm in question has an attorney-client relationship with a Canadian regional aircraft manufacturer. We think that the dual role performed by the law firm - as advisor to the Government of Canada and attorney for a Canadian regional aircraft manufacturer - places the law firm in a particularly delicate position as far as the protection of Brazil's submissions, statements and exhibits is concerned.(608) In our view, it is crucial, in such circumstances, that Canada put in place appropriate safeguards to ensure non-disclosure of confidential information. ... We agree that maintaining confidentiality in accordance with the obligations of the DSU is important. On the other hand, in applying the rules on confidentiality we must be careful not to stifle necessary communication between Member governments and their advisors, as long as appropriate safeguards are in place. In the absence of arguments and evidence to the contrary, we have no basis for questioning Canada's representation that the relevant private lawyers are subject to a confidentiality agreement with the Government of Canada.(609)"(610)
XIX. Article 19 back to top Article 19: Panel and Appellate Body Recommendations 1. Where a panel or the Appellate Body concludes that a measure is inconsistent with a covered agreement, it shall recommend that the Member concerned(9) bring the measure into conformity with that agreement.(10) In addition to its recommendations, the panel or Appellate Body may suggest ways in which the Member concerned could implement the recommendations.
(footnote original) 9 The "Member concerned" is the party to the dispute to which the panel or Appellate Body recommendations are directed.
(footnote original) 10 With respect to recommendations in cases not involving a violation of GATT 1994 or any other covered agreement, see Article 26.
2. In accordance with paragraph 2 of Article 3, in their findings and recommendations, the panel and Appellate Body cannot add to or diminish the rights and obligations provided in the covered agreements.
(a) "bring the measure into conformity with that agreement" (i) Measures no longer in existence 397. In US - Certain EC Products, the Panel had recommended that the DSB request the United States to bring its measure into conformity with its obligations under the WTO Agreement.(611) However, the Appellate Body, having upheld the Panel's finding that the "measure at issue in this dispute [was] no longer in existence", concluded that: "[T]here is an obvious inconsistency between the finding of the Panel that "the 3 March Measure is no longer in existence" and the subsequent recommendation of the Panel that the DSB request that the United States bring its 3 March Measure into conformity with its WTO obligations. The Panel erred in recommending that the DSB request the United States to bring into conformity with its WTO obligations a measure which the Panel has found no longer exists."(612) 398. In India - Autos, the Panel noted that Article 19 "envisages a situation where a violation is in existence".(613) (ii) Relevance of events that occurred during the proceedings 399. In India - Autos, the Panel noted that certain events occurred in the course of the proceedings that had affected the existence or persistence of the alleged violations whereby the respondent had requested such events be taken into account when making recommendations under Article 19.1.In these circumstances, the Panel felt that it would not be making an "objective assessment of the matter before it", had it chosen not to address the impact of events that took place in the course of the proceedings, in assessing the appropriateness of making a recommendation under Article 19.1.(614) (b) "the panel ... may suggest ways in which the Member concerned could implement the recommendation" (i) Panel's discretion to suggest ways to implement General 400. In US - Steel Plate, the Panel indicated that it was "free to suggest ways in which we believe the [defendant] could appropriately implement our recommendation".(615) 401. As regards the effect of a finding of violation of Article 3.1 of the SCM Agreement on the Panel's discretion to suggest ways to implement, in light of the Article 4.7 of the SCM Agreement withdrawal requirement, see Section V.B.6(a) of the Chapter on the SCM Agreement. Suggestions made by Panel of ways to implement 402. In US - Underwear, the Panel recommended the DSB to request the United States bring its measure into compliance with United States obligations under the Agreement on Textiles and Clothing by removing the measure inconsistent with the United States' obligation. The panel went further in suggesting the following: "We find that such compliance can best be achieved and further nullification and impairment of benefits accruing to Costa Rica under the ATC best be avoided by prompt removal of the measure inconsistent with the obligations of the United States. We further suggest that the United States bring the measure challenged by Costa Rica into compliance with US obligations under the ATC by immediately withdrawing the restriction imposed by the measure."(616) 403. In EC - Bananas III (Article 21.5 - Ecuador), the Panel made the following recommendations to the European Communities to bring its banana import regime into conformity with WTO rules after noting that previous implementation attempts had been only partly successful: "First, the European Communities could choose to implement a tariff-only system for bananas, without a tariff quota. This could include a tariff preference (at zero or another preferential rate) for ACP bananas. If so, a waiver for the tariff preference may be necessary unless the need for a waiver is obviated, for example, by the creation of a free-trade area consistent with Article XXIV of GATT. This option would avoid the need to seek agreement on tariff quota shares.
Second, the European Communities could choose to implement a tariff-only system for bananas, with a tariff quota for ACP bananas covered by a suitable waiver.
Third, the European Communities could maintain its current bound and autonomous MFN tariff quotas, either without allocating any country-specific shares or allocating such shares by agreement with all substantial suppliers consistently with the requirements of the chapeau to Article XIII:2. The MFN tariff quota could be combined with the extension of duty-free treatment (or preferential duties) to ACP imports."(617) 404. In India - Patents (US), the Panel declined the United States' request to the Panel to suggest a manner in which India should implement its obligation, since in its opinion it would have impaired India's right to choose how to implement the TRIPS Agreement pursuant to Article 1.1.(618) However it made a following suggestion regarding interests of persons who would have filed patent applications. The panels stated: "[I]n establishing a mechanism that preserves novelty and priority in respect of applications for product patents in respect of pharmaceutical and agricultural chemical inventions during the transitional period, India should take into account the interests of those persons who would have filed patent applications had an appropriate mechanism been maintained since the expiry of the Patents Ordinance 1994, as well as those who have already filed such applications under that Ordinance or the administrative practices currently in place."(619) 405. In Guatemala - Cement I, the Panel concluded that Guatemala had violated the provisions of the Anti-Dumping Agreement by initiating an investigation when there was not sufficient evidence to justify such an initiation under Article 5.3 of the Agreement. Therefore it suggested that the anti-dumping measure be revoked. The Panel stated: "[T]he entire investigation rested on an insufficient basis, and therefore should never have been conducted. This is, in our view, a violation which cannot be corrected effectively by any actions during the course of the ensuing investigation. Therefore, we suggest that Guatemala revoke the existing anti-dumping measure on imports of Mexican cement, because, in our view, this is the only appropriate means of implementing our recommendation."(620) 406. In India - Quantitative Restrictions, the Panel suggested that a reasonable period of time be granted to India in order to remove the |
