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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 14
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> Article 16
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> Article 19
> Article 20
> Article 21
> Article 22
> Article 23
> Article 24
> Article 25
> Article 26
> Article 27
> Appendix 1
> Appendix 2
> Appendix 3
> Appendix 4
> Working Procedures for Appellate Review
> Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes
> Principles and Concepts of General International Law Related to Dispute Settlement
> Articles of Covered Agreements Invoked In Panel and Appellate Body Proceedings

 

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XXX. Appendix 3   back to top

A. Text of Appendix 3

Appendix 3: Working Procedures

1.     In its proceedings the panel shall follow the relevant provisions of this Understanding. In addition, the following working procedures shall apply.

 

2.     The panel shall meet in closed session. The parties to the dispute, and interested parties, shall be present at the meetings only when invited by the panel to appear before it.

 

3.     The deliberations of the panel and the documents submitted to it shall be kept confidential. 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 which that Member has designated as confidential. Where a party to a dispute submits a confidential version of its written submissions to the panel, it shall also, upon request of a Member, provide a non-confidential summary of the information contained in its submissions that could be disclosed to the public.

 

4.     Before the first substantive meeting of the panel with the parties, the parties to the dispute shall transmit to the panel written submissions in which they present the facts of the case and their arguments.

 

5.     At its first substantive meeting with the parties, the panel shall ask the party which has brought the complaint to present its case. Subsequently, and still at the same meeting, the party against which the complaint has been brought shall be asked to present its point of view.

 

6.     All third parties which have notified their interest in the dispute to the DSB shall be invited in writing to present their views during a session of the first substantive meeting of the panel set aside for that purpose. All such third parties may be present during the entirety of this session.

 

7.     Formal rebuttals shall be made at a second substantive meeting of the panel. The party complained against shall have the right to take the floor first to be followed by the complaining party. The parties shall submit, prior to that meeting, written rebuttals to the panel.

 

8.     The panel may at any time put questions to the parties and ask them for explanations either in the course of a meeting with the parties or in writing.

 

9.     The parties to the dispute and any third party invited to present its views in accordance with Article 10 shall make available to the panel a written version of their oral statements.

 

10.     In the interest of full transparency, the presentations, rebuttals and statements referred to in paragraphs 5 to 9 shall be made in the presence of the parties. Moreover, each party’s written submissions, including any comments on the descriptive part of the report and responses to questions put by the panel, shall be made available to the other party or parties.

 

11.     Any additional procedures specific to the panel.

 

12.     Proposed timetable for panel work:

 

(a) Receipt of first written submissions of the parties:    
  (1)     complaining Party: _______ 3-6 weeks
  (2)     Party complained against: _______ 2-3 weeks
(b) Date, time and place of first substantive meeting with the parties; third party session: _______ 1-2 weeks
(c) Receipt of written rebuttals of the parties: _______ 2-3 weeks
(d) Date, time and place of second substantive meeting with the parties: _______ 1-2 weeks
(e) Issuance of descriptive part of the report to the parties: _______ 2-4 weeks
(f) Receipt of comments by the parties on the descriptive part of the report: _______ 2 weeks
(g) Issuance of the interim report, including the findings and conclusions, to the parties: _______ 2-4 weeks
(h) Deadline for party to request review of part(s) of report: _______ 1 week
(i) Period of review by panel, including possible additional meeting with parties: _______ 2 weeks
(j) Issuance of final report to parties to dispute: _______ 2 weeks
(k) Circulation of the final report to the Members: _______ 3 weeks

 

      The above calendar may be changed in the light of unforeseen developments. Additional meetings with the parties shall be scheduled if required.

 
B. Interpretation and Application of Appendix 3

1361. See Article 12 of the DSU (“Panel Procedures”).

 

XXXI. Appendix 4   back to top

A. Text of Appendix 4

Appendix 4: Expert Review Groups

The following rules and procedures shall apply to expert review groups established in accordance with the provisions of paragraph 2 of Article 13.

 

1.     Expert review groups are under the panel’s authority. Their terms of reference and detailed working procedures shall be decided by the panel, and they shall report to the panel.

 

2.     Participation in expert review groups shall be restricted to persons of professional standing and experience in the field in question.

 

3.     Citizens of parties to the dispute shall not serve on an expert review group without the joint agreement of the parties to the dispute, except in exceptional circumstances when the panel considers that the need for specialized scientific expertise cannot be fulfilled otherwise. Government officials of parties to the dispute shall not serve on an expert review group. Members of expert review groups shall serve in their individual capacities and not as government representatives, nor as representatives of any organization. Governments or organizations shall therefore not give them instructions with regard to matters before an expert review group.

 

4.     Expert review groups may consult and seek information and technical advice from any source they deem appropriate. Before an expert review group seeks such information or advice from a source within the jurisdiction of a Member, it shall inform the government of that Member. Any Member shall respond promptly and fully to any request by an expert review group for such information as the expert review group considers necessary and appropriate.

 

5.     The parties to a dispute shall have access to all relevant information provided to an expert review group, unless it is of a confidential nature. Confidential information provided to the expert review group shall not be released without formal authorization from the government, organization or person providing the information. Where such information is requested from the expert review group but release of such information by the expert review group is not authorized, a non-confidential summary of the information will be provided by the government, organization or person supplying the information.

 

6.     The expert review group shall submit a draft report to the parties to the dispute with a view to obtaining their comments, and taking them into account, as appropriate, in the final report, which shall also be issued to the parties to the dispute when it is submitted to the panel. The final report of the expert review group shall be advisory only.


B. Interpretation and Application of Appendix 4

1362.     As of 30 September 2011, no dispute settlement panel has established an expert review group under Appendix 4 of the DSU. Instead, panels seeking advice on scientific matters have requested the opinions of individual scientific experts.

1363.     In EC — Hormones, the Panel elected to seek advice from individual experts, rather than establish an expert review group pursuant to Appendix 4 of the DSU. The Panel did so in order to leave open the possibility of receiving a range of opinions from the experts in their individual capacity. The Appellate Body confirmed that a panel has the discretion to consult with individual scientific experts and may establish ad hoc rules for such consultations:

“Both Article 11.2 of the SPS Agreement and Article 13.2 of the DSU require panels to consult with the parties to the dispute during the selection of the experts. However, it is not claimed by any of the participants in this appeal that the Panel did not consult with them when appointing the experts. Moreover, it is uncontested that the experts have been selected in accordance with procedures on which all the participants have previously agreed. It is similarly uncontested that, among the experts consulted by the Panel, there are nationals from each of the parties to the dispute. 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.”(2140)

1364.     For further information on the use of experts in WTO dispute settlement proceedings, see the Section on Article 13 of the DSU (“Right to Seek Information”).

 

XXXII. Working Procedures for Appellate Review   back to top

A. Text of the Working Procedures for Appellate Review

Definitions

1.     In these Working Procedures for Appellate Review,(2141)

“appellant”

means Cany party to the dispute that has filed a Notice of Appeal pursuant to Rule 20;

“appellate report”

means an Appellate Body report as described in Article 17 of the DSU;

“appellee”

means any party to the dispute that has filed a submission pursuant to Rule 22 or paragraph 4 of Rule 23;

“consensus”

a decision is deemed to be made by consensus if no Member formally objects to it;

“covered agreements”

as the same meaning as “covered agreements” in paragraph 1 of Article 1 of the DSU;

“division”

means the three Members who are selected to serve on any one appeal in accordance with paragraph 1 of Article 17 of the DSU and paragraph 2 of Rule 6;

“documents”

means the Notice of Appeal, any Notice of Other Appeal and the submissions and other written statements presented by the participants or third participants;

“DSB”

means the Dispute Settlement Body established under Article 2 of the DSU;

“DSU”

means the Understanding on Rules and Procedures Governing the Settlement of Disputes which is Annex 2 to the WTO Agreement;

“Member”

means a Member of the Appellate Body who has been appointed by the DSB in accordance with Article 17 of the DSU;

“other appellant”

means any party to the dispute that has filed a Notice of Other Appeal pursuant to paragraph 1 of Rule 23;

“participant”

means any party to the dispute that has filed a Notice of Appeal pursuant to Rule 20, a Notice of Other Appeal pursuant to  Rule 23 or a submission pursuant to Rule 22 or paragraph 4 of Rule 23;

“party to the dispute”

means any WTO Member who was a complaining or defending party in the panel dispute, but does not include a third party;

“proof of service”

means a letter or other written acknowledgement that a document has been delivered, as required, to the parties to the dispute, participants, third parties or third participants, as the case may be;

“Rules”

means these Working Procedures for Appellate Review;

“Rules of Conduct”

means the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes as attached in Annex II to these Rules;

“SCM Agreement”

means the Agreement on Subsidies and Countervailing Measures which is in Annex 1A to the WTO Agreement;

“Secretariat”

means the Appellate Body Secretariat;

“service address”

means the address of the party to the dispute, participant, third party or third participant as generally used in WTO dispute settlement proceedings, unless the party to the dispute, participant, third party or third participant has clearly indicated another address;

“third participant”

means any third party that has filed a written submission pursuant to Rule 24(1); or any third party that appears at the oral hearing, whether or not it makes an oral statement at that hearing;

“third party”

means any WTO Member who has notified the DSB of its substantial interest in the matter before the panel pursuant to paragraph 2 of Article 10 of the DSU;

“WTO”

means the World Trade Organization;

“WTO Agreement”

means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, Morocco on 15 April 1994;

“WTO Member”

means any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations that has accepted or acceded to the WTO in accordance with Articles XI, XII or XIV of the WTO Agreement; and

“WTO Secretariat”

means the Secretariat of the World Trade Organization.

  

PART I MEMBERS

Duties and Responsibilities

2.      (1) A Member shall abide by the terms and conditions of the DSU, these Rules and any decisions of the DSB affecting the Appellate Body.

 

        (2)     During his/her term, a Member shall not accept any employment nor pursue any professional activity that is inconsistent with his/her duties and responsibilities.

 

        (3)     A Member shall exercise his/her office without accepting or seeking instructions from any international, governmental, or non-governmental organization or any private source.

 

        (4)     A Member shall be available at all times and on short notice and, to this end, shall keep the Secretariat informed of his/her whereabouts at all times.

Decision-Making

3.     (1)     In accordance with paragraph 1 of Article 17 of the DSU, decisions relating to an appeal shall be taken solely by the division assigned to that appeal. Other decisions shall betaken by the Appellate Body as a whole.

 

        (2)     The Appellate Body and its divisions shall make every effort to take their decisions by consensus. Where, nevertheless, a decision cannot be arrived at by consensus, the matter at issue shall be decided by a majority vote.

Collegiality

4.     (1)     To ensure consistency and coherence in decision-making, and to draw on the individual and collective expertise of the Members, the Members shall convene on a regular basis to discuss matters of policy, practice and procedure.

 

        (2)     The Members shall stay abreast of dispute settlement activities and other relevant activities of the WTO and, in particular, each Member shall receive all documents filed in an appeal.

 

        (3)     In accordance with the objectives set out in paragraph 1, the division responsible for deciding each appeal shall exchange views with the other Members before the division finalizes the appellate report for circulation to the WTO Members. This paragraph is subject to paragraphs 2 and 3 of Rule 11.

 

        (4)     Nothing in these Rules shall be interpreted as interfering with a division’s full authority and freedom to hear and decide an appeal assigned to it in accordance with paragraph 1 of Article 17 of the DSU.

Chairman

5.     (1)     There shall be a Chairman of the Appellate Body who shall be elected by the Members.

 

        (2)     The term of office of the Chairman of the Appellate Body shall be one year. The Appellate Body Members may decide to extend the term of office for an additional period of up to one year. However, in order to ensure rotation of the Chairmanship, no Member shall serve as Chairman for more than two consecutive terms.

 

        (3)     The Chairman shall be responsible for the overall direction of the Appellate Body business, and in particular, his/her responsibilities shall include:

 

(a)     the supervision of the internal functioning of the Appellate Body; and

 

(b)     any such other duties as the Members may agree to entrust to him/her.

 

        (4)     Where the office of the Chairman becomes vacant due to permanent incapacity as a result of illness or death or by resignation or expiration of his/ her term, the Members shall elect a new Chairman who shall serve a full term in accordance with paragraph 2.

 

        (5)     In the event of a temporary absence or incapacity of the Chairman, the Appellate Body shall authorize another Member to act as Chairman ad interim, and the Member so authorized shall temporarily exercise all the powers, duties and functions of the Chairman until the Chairman is capable of resuming his/her functions.

Divisions

6.     (1)     In accordance with paragraph 1 of Article 17 of the DSU, a division consisting of three Members shall be established to hear and decide an appeal.

 

       (2)     The Members constituting a division shall be selected on the basis of rotation, while taking into account the principles of random selection, unpredictability and opportunity for all Members to serve regardless of their national origin.

 

       (3)     A Member selected pursuant to paragraph 2 to serve on a division shall serve on that division, unless:

 

(a)     he/she is excused from that division pursuant to Rules 9 or 10;

 

(b)     he/she has notified the Chairman and the Presiding Member that he/she is prevented from serving on the division because of illness or other serious reasons pursuant to Rule 12; or

 

(c)     he/she has notified his/her intentions to resign pursuant to Rule 14.

Presiding Member of the Division

7.     (1)     Each division shall have a Presiding Member, who shall be elected by the Members of that division.

 

      (2)     The responsibilities of the Presiding Member shall include:

 

(a)     coordinating the overall conduct of the appeal proceeding;

 

(b)     chairing all oral hearings and meetings related to that appeal; and

 

(c)     coordinating the drafting of the appellate report.

 

       (3)     In the event that a Presiding Member becomes incapable of performing his/her duties, the other Members serving on that division and the Member selected as a replacement pursuant to Rule 13 shall elect one of their number to act as the Presiding Member.

Rules of Conduct

8.     (1)     On a provisional basis, the Appellate Body adopts those provisions of the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes, attached in Annex II to these Rules, which are applicable to it, until Rules of Conduct are approved by the DSB.

 

       (2)     Upon approval of Rules of Conduct by the DSB, such Rules of Conduct shall be directly incorporated and become part of these Rules and shall supersede Annex II.

 

9.    (1)     Upon the filing of a Notice of Appeal, each Member shall take the steps set out in Article VI:4(b)(i) of Annex II, and a Member may consult with the other Members prior to completing the disclosure form.

 

       (2)     Upon the filing of a Notice of Appeal, the professional staff of the Secretariat assigned to that appeal shall take the steps set out in Article VI:4(b)(ii) of Annex II.

 

       (3)     Where information has been submitted pursuant to Article VI:4(b)(i) or (ii) of Annex II, the Appellate Body shall consider whether further action is necessary.

 

       (4)     As a result of the Appellate Body’s consideration of the matter pursuant to paragraph 3, the Member or the professional staff member concerned may continue to be assigned to the division or may be excused from the division.

 

10.  (1)     Where evidence of a material violation is filed by a participant pursuant to Article VIII of Annex II, such evidence shall be confidential and shall be supported by affidavits made by persons having actual knowledge or a reasonable belief as to the truth of the facts stated.

 

       (2)     Any evidence filed pursuant to Article VIII: 1 of Annex II shall be filed at the earliest practicable time: that is, forthwith after the participant submitting it knew or reasonably could have known of the facts supporting it. In no case shall such evidence be filed after the appellate report is circulated to the WTO Members.

 

       (3)     Where a participant fails to submit such evidence at the earliest practicable time, it shall file an explanation in writing of the reasons why it did not do so earlier, and the Appellate Body may decide to consider or not to consider such evidence, as appropriate.

 

       (4)     While taking fully into account paragraph 5 of Article 17 of the DSU, where evidence has been filed pursuant to Article VIII of Annex II, an appeal shall be suspended for fifteen days or until the procedure referred to in Article VIII:14-16 of Annex II is completed, whichever is earlier.

 

       (5)     As a result of the procedure referred to in Article VIII:1416 of Annex II, the Appellate Body may decide to dismiss the allegation, to excuse the Member or professional staff member concerned from being assigned to the division or make such other order as it deems necessary in accordance with Article VIII of Annex II.

 

11.  (1)     A Member who has submitted a disclosure form with information attached pursuant to Article VI:4(b)(i) or is the subject of evidence of a material violation pursuant to Article VIII:1 of Annex II, shall not participate in any decision taken pursuant to paragraph 4 of Rule 9 or paragraph 5 of Rule 10.

 

       (2)     A Member who is excused from a division pursuant to paragraph 4 of Rule 9 or paragraph 5 of Rule 10 shall not take part in the exchange of views conducted in that appeal pursuant to paragraph 3 of Rule 4.

 

       (3)     A Member who, had he/she been a Member of a division, would have been excused from that division pursuant to paragraph 4 of Rule 9, shall not take part in the exchange of views conducted in that appeal pursuant to paragraph 3 of Rule 4.

Incapacity

12.  (1)     A Member who is prevented from serving on a division by illness or for other serious reasons shall give notice and duly explain such reasons to the Chairman and to the Presiding Member.

 

       (2)     Upon receiving such notice, the Chairman and the Presiding Member shall forthwith inform the Appellate Body.

Replacement

13.     Where a Member is unable to serve on a division for a reason set out in paragraph 3 of Rule 6, another Member shall be selected forthwith pursuant to paragraph 2 of Rule 6 to replace the Member originally selected for that division.

Resignation

14.     (1)     A Member who intends to resign from his/her office shall notify his/her intentions in writing to the Chairman of the Appellate Body who shall immediately inform the Chairman of the DSB, the Director-General and the other Members of the Appellate Body.

 

      (2)     The resignation shall take effect 90 days after the notification has been made pursuant to paragraph 1, unless the DSB, in consultation with the Appellate Body, decides otherwise.

Transition

15.     A person who ceases to be a Member of the Appellate Body may, with the authorization of the Appellate Body and upon notification to the DSB, complete the disposition of any appeal to which that person was assigned while a Member, and that person shall, for that purpose only, be deemed to continue to be a Member of the Appellate Body.

 

PART II PROCESS

General Provisions

16.     (1)     In the interests of fairness and orderly procedure in the conduct of an appeal, where a procedural question arises that is not covered by these Rules, a division may adopt an appropriate procedure for the purposes of that appeal only, provided that it is not inconsistent with the DSU, the other covered agreements and these Rules. Where such a procedure is adopted, the division shall immediately notify the parties to the dispute, participants, third parties and third participants as well as the other Members of the Appellate Body.

 

         (2)     In exceptional circumstances, where strict adherence to a time-period set out in these Rules would result in a manifest unfairness, a party to the dispute, a participant, a third party or a third participant may request that a division modify a time-period set out in these Rules for the filing of documents or the date set out in the working schedule for the oral hearing. Where such a request is granted by a division, any modification of time shall be notified to the parties to the dispute, participants, third parties and third participants in a revised working schedule.

 

17.     (1)     Unless the DSB decides otherwise, in computing any time-period stipulated in the DSU or in the special or additional provisions of the covered agreements, or in these Rules, within which a communication must be made or an action taken by a WTO Member to exercise or preserve its rights, the day from which the time-period begins to run shall be excluded and, subject to paragraph 2, the last day of the time-period shall be included.

 

         (2)     The DSB Decision on “Expiration of Time-Periods in the DSU”, WT/DSB/M/7, shall apply to appeals heard by divisions of the Appellate Body.

Documents

18.     (1)     No document is considered filed with the Appellate Body unless the document is received by the Secretariat within the time-period set out for filing in accordance with these Rules.

 

         Official versions of documents shall be submitted in paper form to the Appellate Body Secretariat by 17:00 Geneva time on the day that the document is due. Participants, parties, third participants and third parties shall, by the same deadline, also provide to the Appellate Body Secretariat an electronic copy of each document. Such electronic copy may be sent via electronic mail to the Appellate Body Secretariat’s electronic mail address, or brought to the Appellate Body Secretariat on a data storage device such as a CD-ROM or USB flash drive.

 

          (2)     Except as otherwise provided in these Rules, every document filed by a party to the dispute, a participant, a third party or a third participant shall on the same day be served on each of the other parties to the dispute, participants, third parties and third participants in the appeal, in accordance with paragraph 4.

 

          (3)     A proof of service on the other parties to the dispute, participants, third parties and third participants shall appear on, or be affixed to, each document filed with the Secretariat under paragraph 1 above.

 

          (4)     A document shall be served by the most expeditious means of delivery or communication available, including by:

 

     (a)     delivering a copy of the document to the service address of the party to the dispute, participant, third party or third participant; or

 

     (b)     sending a copy of the document to the service address of the party to the dispute, participant, third party or third participant by facsimile transmission, expedited delivery courier or expedited mail service.

 

         Electronic copies of documents served shall also be provided on the same day, either by electronic mail, or through physical delivery of a data storage device containing an electronic copy of the document.

 

          (5)     Upon authorization by the division, a participant or a third participant may correct clerical errors in any of its documents (including typographical mistakes, errors of grammar, or words or numbers placed in the wrong order). The request to correct clerical errors shall identify the specific errors to be corrected and shall be filed with the Secretariat no later than 30 days after the date of the filing of the Notice of Appeal. A copy of the request shall be served upon the other parties to the dispute, participants, third parties and third participants, each of whom shall be given an opportunity to comment in writing on the request. The division shall notify the parties to the dispute, participants, third parties and third participants of its decision.

Ex Parte Communications

19.     (1)     Neither a division nor any of its Members shall meet with or contact one party to the dispute, participant, third party or third participant in the absence of the other parties to the dispute, participants, third parties and third participants.

 

          (2)     No Member of the division may discuss any aspect of the subject matter of an appeal with any party to the dispute, participant, third party or third participant in the absence of the other Members of the division.

 

          (3)     A Member who is not assigned to the division hearing the appeal shall not discuss any aspect of the subject matter of the appeal with any party to the dispute, participant, third party or third participant.

Commencement of Appeal

20.     (1)     An appeal shall be commenced by notification in writing to the DSB in accordance with paragraph 4 of Article 16 of the DSU and simultaneous filing of a Notice of Appeal with the Secretariat.

 

          (2)     A Notice of Appeal shall include the following information:

 

         (a)   the title of the panel report under appeal;

 

         (b)   the name of the party to the dispute filing the Notice of Appeal;

 

         (c)    the service address, telephone and facsimile numbers of the party to the dispute; and

 

         (d)   a brief statement of the nature of the appeal, including:

 

          (i)     identification of the alleged errors in the issues of law covered in the panel report and legal interpretations developed by the panel;

 

          (ii)    a list of the legal provision(s) of the covered agreements that the panel is alleged to have erred in interpreting or applying; and

 

          (iii)   without prejudice to the ability of the appellant to refer to other paragraphs of the panel report in the context of its appeal, an indicative list of the paragraphs of the panel report containing the alleged errors.

Appellant’s Submission

21.     (1)   The appellant shall, on the same day as the date of the filing of the Notice of Appeal, file with the Secretariat a written submission prepared in accordance with paragraph 2 and serve a copy of the submission on the other parties to the dispute and third parties.

 

          (2)   A written submission referred to in paragraph 1 shall

 

      (a)   be dated and signed by the appellant; and

 

      (b)   set out

 

        (i)     a precise statement of the grounds for the appeal, including the specific allegations of errors in the issues of law covered in the panel report and legal interpretations developed by the panel, and the legal arguments in support thereof;

 

        (ii)     a precise statement of the provisions of the covered agreements and other legal sources relied on; and

 

        (iii)     the nature of the decision or ruling sought.

Appellee’s Submission

22.     (1)   Any party to the dispute that wishes to respond to allegations raised in an appellant’s submission filed pursuant to Rule 21 may, within 18 days after the date of the filing of the Notice of Appeal, file with the Secretariat a written submission prepared in accordance with paragraph 2 and serve a copy of the submission on the appellant, other parties to the dispute and third parties.

 

         (2)   A written submission referred to in paragraph 1 shall

 

      (a)  be dated and signed by the appellee; and

 

      (b)  set out

 

       (i)     a precise statement of the grounds for opposing the specific allegations of errors in the issues of law covered in the panel report and legal interpretations developed by the panel raised in the appellant’s submission, and the legal arguments in support thereof;

 

       (ii)     an acceptance of, or opposition to, each ground set out in the appellant’s submission;

 

       (iii)     a precise statement of the provisions of the covered agreements and other legal sources relied on; and

 

       (iv)     the nature of the decision or ruling sought.

Multiple Appeals

23.  (1)  Within 5 days after the date of the filing of the Notice of Appeal, a party to the dispute other than the original appellant may join in that appeal or appeal on the basis of other alleged errors in the issues of law covered in the panel report and legal interpretations developed by the panel. That party shall notify the DSB in writing of its appeal and shall simultaneously file a Notice of Other Appeal with the Secretariat.

 

          (2)   A Notice of Other Appeal shall include the following information:

 

      (a)   the title of the panel report under appeal;

 

      (b)   the name of the party to the dispute filing the Notice of Other Appeal;

 

      (c)   the service address, telephone and facsimile numbers of the party to the dispute; and either

 

       (i)     a statement of the issues raised on appeal by another participant with which the party joins; or

 

       (ii)     a brief statement of the nature of the other appeal, including:

 

       (A)     identification of the alleged errors in the issues of law covered in the panel report and legal interpretations developed by the panel;

 

       (B)     a list of the legal provision(s) of the covered agreements that the panel is alleged to have erred in interpreting or applying; and

 

       (C)     without prejudice to the ability of the other appellant to refer to other paragraphs of the panel report in the context of its appeal, an indicative list of the paragraphs of the panel report containing the alleged errors.

 

          (3)     The other appellant shall, within 5 days after the date of the filing of the Notice of Appeal, file with the Secretariat a written submission prepared in accordance with paragraph 2 of Rule 21 and serve a copy of the submission on the other parties to the dispute and third parties.

 

          (4)     The appellant, any appellee and any other party to the dispute that wishes to respond to a submission filed pursuant to paragraph 3 may file a written submission within 18 days after the date of the filing of the Notice of Appeal, and any such submission shall be in the format required by paragraph 2 of Rule 22.

 

          (5)     This Rule does not preclude a party to the dispute which has not filed a submission under Rule 21 or a Notice of Other Appeal under paragraph 1 of this Rule from exercising its right of appeal pursuant to paragraph 4 of Article 16 of the DSU.

 

          (6)     Where a party to the dispute which has not filed a submission under Rule 21 or a Notice of Other Appeal under paragraph 1 of this Rule exercises its right to appeal as set out in paragraph 5, a single division shall examine the appeals.

Amending Notices of Appeal

23bis. (1)  The division may authorize an original appellant to amend a Notice of Appeal or an other appellant to amend a Notice of Other Appeal.

 

          (2)  A request to amend a Notice of Appeal or a Notice of Other Appeal shall be made as soon as possible in writing and shall state the reason(s) for the request and identify precisely the specific amendments that the appellant or other appellant wishes to make to the Notice. A copy of the request shall be served on the other parties to the dispute, participants, third participants and third parties, each of whom shall be given an opportunity to comment in writing on the request.

 

          (3)  In deciding whether to authorize, in full or in part, a request to amend a Notice of Appeal or Notice of Other Appeal, the division shall take into account:

 

(a)     the requirement to circulate the appellate report within the time-period set out in Article 17.5 of the DSU or, as appropriate, Article 4.9 of the SCM Agreement; and,

 

(b)     the interests of fairness and orderly procedure, including the nature and extent of the proposed amendment, the timing of the request to amend a Notice of Appeal or Notice of Other Appeal, any reasons why the proposed amended Notice of Appeal or Notice of Other Appeal was not or could not have been filed on its original date, and any other considerations that may be appropriate.

 

          (4)  The division shall notify the parties to the dispute, participants, third participants, and third parties of its decision. In the event that the division authorizes an amendment to a Notice of Appeal or a Notice of Other Appeal, it shall provide an amended copy of the Notice to the DSB.

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 21 days after the date of the filing of the Notice of Appeal.

 

        (2)     A third party not filing a written submission shall, within the same period of 21 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 participants are encouraged to file written submissions to facilitate their positions being taken fully into account by the division hearing the appeal and in order that participants and other third participants will have notice of positions to betaken at the oral hearing.

 

        (4)     Any third party that has neither filed a written submission pursuant to paragraph (1), nor notified the Secretariat pursuant to paragraph (2), may notify the Secretariat that it intends to appear at the oral hearing, and may request to make an oral statement at the hearing. Such notifications and requests should be notified to the Secretariat in writing at the earliest opportunity.

Transmittal of Record

25.  (1)     Upon the filing of a Notice of Appeal, the Director-General of the WTO shall transmit forthwith to the Appellate Body the complete record of the panel proceeding.

 

        (2)     The complete record of the panel proceeding includes, but is not limited to:

 

      (a)     written submissions, rebuttal submissions, and supporting evidence attached thereto by the parties to the dispute and the third parties;

 

      (b)     written arguments submitted at the panel meetings with the parties to the dispute and the third parties, the recordings of such panel meetings, and any written answers to questions posed at such panel meetings;

 

      (c)     the correspondence relating to the panel dispute between the panel or the WTO Secretariat and the parties to the dispute or the third parties; and

 

      (d)     any other documentation submitted to the panel.

Working Schedule

26.     (1)     Forthwith after the commencement of an appeal, the division shall draw up an appropriate working schedule for that appeal in accordance with the time-periods stipulated in these Rules.

 

          (2)     The working schedule shall set forth precise dates for the filing of documents and a timetable for the division’s work, including where possible, the date for the oral hearing.

 

          (3)     In accordance with paragraph 9 of Article 4 of the DSU, in appeals of urgency, including those which concern perishable goods, the Appellate Body shall make every effort to accelerate the appellate proceedings to the greatest extent possible. A division shall take this into account in drawing up its working schedule for that appeal.

 

          (4)     The Secretariat shall serve forthwith a copy of the working schedule on the appellant, the parties to the dispute and any third parties.

Oral Hearing

27.     (1)     A division shall hold an oral hearing, which shall be held, as a general rule, between 30 and 45 days after the date of the filing of a Notice of Appeal.

 

          (2)     Where possible in the working schedule or otherwise at the earliest possible date, the Secretariat shall notify all parties to the dispute, participants, third parties and third participants of the date for the oral hearing.

 

          (3)     (a)     Any third party 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 at the oral hearing, make an oral statement at the hearing, and respond to questions posed by the division.

 

                   (b)     Any third party that has notified the Secretariat pursuant to Rule 24(4) that it intends to appear at the oral hearing may appear at the oral hearing.

 

                   (c)     Any third party that has made a request pursuant to Rule 24(4) may, at the discretion of the division hearing the appeal, taking into account the requirements of due process, make an oral statement at the hearing, and respond to questions posed by the division.

 

          (4)     The Presiding Member may set time-limits for oral arguments.

Written Responses

28.     (1)     At any time during the appellate proceeding, including, in particular, during the oral hearing, the division may address questions orally or in writing to, or request additional memoranda from, any participant or third participant, and specify the time-periods by which written responses or memoranda shall be received.

 

          (2)     Any such questions, responses or memoranda shall be made available to the other participants and third participants in the appeal, who shall be given an opportunity to respond.

 

          (3)     When the questions or requests for memoranda are made prior to the oral hearing, then the questions or requests, as well as the responses or memoranda, shall also be made available to the third parties, who shall also be given an opportunity to respond.

Failure to Appear

29.     Where a participant fails to file a submission within the required time-periods or fails to appear at the oral hearing, the division shall, after hearing the views of the participants, issue such order, including dismissal of the appeal, as it deems appropriate.

Withdrawal of Appeal

30.     (1)     At any time during an appeal, the appellant may withdraw its appeal by notifying the Appellate Body, which shall forthwith notify the DSB.

 

          (2)     Where a mutually agreed solution to a dispute which is the subject of an appeal has been notified to the DSB pursuant to paragraph 6 of Article 3 of the DSU, it shall be notified to the Appellate Body.

Prohibited Subsidies

31.     (1)     Subject to Article 4 of the SCM Agreement, the general provisions of these Rules shall apply to appeals relating to panel reports concerning prohibited subsidies under Part II of that Agreement.

 

          (2)     The working schedule for an appeal involving prohibited subsidies under Part II of the SCM Agreement shall be as set out in Annex I to these Rules.

Entry into Force and Amendment

32.     (1)     These Rules entered into force on 15 February 1996, and have subsequently been amended as indicated in Annex III.

 

          (2)     The Appellate Body may amend these Rules in compliance with the procedures set forth in paragraph 9 of Article 17 of the DSU. The Appellate Body will announce the date on which such amendments come into force. The document number for each revised version of these Rules, and the date upon which each version entered into force and succeeded the previous version, are indicated in Annex III.

 

          (3)     Whenever there is an amendment to the DSU or to the special or additional rules and procedures of the covered agreements, the Appellate Body shall examine whether amendments to these Rules are necessary.

ANNEX I TIMETABLE FOR APPEALS(1)

General Appeals (Day) Prohibited Subsidies Appeals (Day)
Notice of Appeal(2) 0 0
Appellant’s Submission(3) 0 0
Notice of Other Appeal(4) 5 2
Other Appellant’s Submission(5) 5 2
Appelle’s Submission(6) 18 9
Third Participant’s Submission(7) 21 10
Third Participant’s Notification(8) 21 10
Oral Hearing(9) 30-45 15-23
Circulation of Appellate Report 60-90(10) 30-60(11)
DSB Meeting for Adoption 90-120(12) 50-80(13)

(footnote original) 1 Rule 17 applies to the computation of the time-periods below.
(footnote original) 2 Rule 20.
(footnote original) 3 Rule 21(1).
(footnote original) 4 Rule 23(1).
(footnote original) 5 Rule 23(3).
(footnote original) 6 Rules 22 and 23(4).
(footnote original) 7 Rule 24(1).
(footnote original) 8 Rule 24(2).
(footnote original) 9 Rule 27.
(footnote original) 10 Article 17:5, DSU.
(footnote original) 11 Article 4:9, SCM Agreement.
(footnote original) 12 Article 17:14, DSU.
(footnote original) 13 Article 4:9, SCM Agreement.

ANNEX II

    [Annex II of the Working Procedures for Appellate Review reproduces the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes.]

ANNEX III

    Table of Consolidated and Revised Versions of the Working Procedures for Appellate Review

Document Number Effective Date Rules Amended Working Documents/Explanatory Texts Principal DSB Meeting(s) at which Amendments Discussed, Minutes
WT/AB/WP/1 15 February 1996 N/A WT/AB/WP/W/1 31 January 1996, WT/DSB/M/10 and 21 February 1996, WT/DSB/M/11
WT/AB/WP/2 28 February 1997 Rule 5(2) and Annex II WT/AB/WP/W/2, WT/AB/WP/W/3 25 February 1997, WT/DSU/M/29
WT/AB/WP/3 24 January 2002 Rule 5(2) WT/AB/WP/W/4, WT/AB/WP/W/5 24 July 2001, WT/DSB/M/107
WT/AB/WP/4 1 May 2003 Rules 24 and 27(3), with consequential amendments to Rules 1, 16, 18, 19, and 28, and Annex I WT/AB/WP/W/6, WT/AB/WP/W/7 23 October 2002, WT/DSB/M/134
WT/AB/WP/5 1 January 2005 Rules 1, 18, 20, 21, 23, 23bis, and 27, and Annexes I and III WT/AB/WP/W/8, WT/AB/WP/W/9 19 May 2004, WT/DSB/M/169
WT/AB/WP/6 15 September 2010 Rules 6(3), 18(1), 18(2), 18(4), 21(1), 22(1), 23(1), 23(3), 23(4), 24(1), 24(2), 27(1), 32(1), and 32(2), and Annexes I and III; additional technical amendments to Spanish and French versions only WT/AB/WP/W/10, WT/AB/WP/W/11 18 May 2010, WT/DSB/M/283

 
B. Interpretation and Application of the Appellate Body Working Procedures

1. General

(a)     Compliance with the Working Procedures

1365.     In US — Gasoline, the United States argued that certain issues were not properly brought before the Appellate Body in accordance with its Working Procedures. The Appellate Body agreed, and stated that it could not “casually disregard” its own Working Procedures:

“[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.”(2142)

1366.     In US — Stainless Steel (Mexico), the Appellate Body emphasized the importance of participants complying with procedural requirements in the Working Procedures:

“Compliance with established time periods by all participants regarding the filing of submissions is an important element of due process of law. The Appellate Body clarified in India — Patents (US) that due process requirements are implicit in the DSU. This is particularly important, given that, according to Rules 22(1) and 24(1) of the Working Procedures, the appellee’s submission(s) and the third participant’s submission(s) are filed contemporaneously. The late filing of a participant’s submission could have implications for the other participants. Compliance with the procedural requirements relating to the timely filing of submissions is a matter of fairness and orderly procedure, which are referred to in Rule 16(1) of the Working Procedures.”(2143)

(b)     Interpretation of the Working Procedures

1367.     In EC — Sardines, the Appellate Body stated that 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.(2144) As we have said:

 

“The procedural rules of WTO dispute settlement are designed to promote … the fair, prompt and effective resolution of trade disputes.”(2145)

 

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.”(2146)

2.     Rule 3: decision-making

1368.     As regards separate and concurring opinions by individual Appellate Body Members, see Article 17.11 of the DSU.

3.     Rule 4: collegiality

(a)     Background

1369.     In a 7 February 1996 communication from the Appellate Body to the Chairman of the DSB explaining some of the rules in the Working Procedures, the Appellate Body offered the following explanation of Rule 4 and collegiality:

“The Appellate Body would like to draw your attention in particular to those parts of the Working Procedures for Appellate Review that bear on collegiality. This is a matter that has been emphasized from the very beginning in the consultations with the Appellate Body …

 

According to Article 17(1) of the DSU, the Appellate Body is composed of seven persons, only three of whom shall serve in any one case. That provision, like every other provision of the DSU, has to be respected fully. Thus, the decision in every appeal will be made only by the three who serve on the division for that case. At the same time, it is also important to ensure consistency and coherence in our decision-making, which is to the advantage of every WTO Member and the overall multilateral trading system we all share. We feel this can best be done by drawing, within the parameters of Article 17 of the DSU, on the individual and collective expertise of all the Members of the Appellate Body.

 

In order to attain these objectives, Rule 4(1) provides for meetings of the entire Appellate Body on a regular basis to discuss matters of policy, practice and procedure. Further, Rule 4(2) foresees that each Member of the Appellate Body shall receive all documents filed in an appeal, in order to allow what Rule 4(3) prescribes, namely that “the division responsible for deciding each appeal shall exchange views with the other Members before the division finalizes the appellate report…”

 

The Appellate Body believes that such a system is consistent with Article 17 of the DSU. To avoid any doubt, Rule 4(4) of our Working Procedures for Appellate Review states expressly, “Nothing in these Rules shall be interpreted as interfering with a division’s full authority and freedom to hear and decide an appeal assigned to it in accordance with paragraph 1 of Article 17 of the DSU.”(2147)

4.     Rule 5: Chairman

(a)     The 2002 amendment of Rule 5(2)

1370.     Rule 5(2) of the Working Procedures originally provided that the Chairman’s term of office would be one year, and did not expressly provide for the possibility of an extension. Rule 5(2) was subsequently amended (the amendment took effect 24 January 2002). The Appellate Body explained the reason behind the amendment in a communication dated 10 July 2001:

“Under the current rules, therefore, an Appellate Body Member can only serve one consecutive term of one year as Chairman.

 

It may be useful to provide for more flexibility in this respect in the Working Procedures by giving the Appellate Body the possibility to extend the term of its Chairman by one year. The composition of both the Appellate Body and its Secretariat has recently been, and will in the near future continue to be, subject to considerable change. In order to ensure some continuity, it may be helpful to have a Chairman serving two consecutive terms of office of one year, rather than one. Furthermore, as of this year, and in line with his mandate under Rule 5(3) of the Working Procedures, the Chairman is more directly involved in the management of the Appellate Body Secretariat. The burden on the Chairman has thus considerably increased. In these circumstances, it is not certain that all Appellate Body Members are able to make themselves available to serve as Chairman thus reducing the pool of Members from which the Chairman is to be selected. For these reasons, the Appellate Body considers it useful to amend the Working Procedures to allow it to extend the term of its Chairman by one year.”(2148)

5.     Rule 6: divisions

(a)     Background

1371.     In a 7 February 1996 communication from the Appellate Body to the Chairman of the DSB explaining some of the Working Procedures, the Appellate Body offered the following explanation of Rule 6 and divisions:

“For the purpose of constituting a division of three Members of the Appellate Body to serve on any one case as required by Article 17(1) of the DSU, the Working Procedures for Appellate Review provide for rotation that takes into account the desirability for random selection of the three Members, unpredictability as to the composition of any division and opportunity for all Members of the Appellate Body to serve regardless of their national origin. The Appellate Body is of the view that to deal with the issue of nationality in any other way would be unnecessary and undesirable: unnecessary in view of the qualifications required for membership in the Appellate Body; undesirable as casting doubts on the capacity of members of the Appellate Body for independence and impartiality in decision-making. There are also some practical considerations that are highly relevant. Were the rules to be cast in a manner that required a Member of the Appellate Body to stand aside in an appeal involving his/her country of origin exclusively for reasons of nationality, this would be likely, in practice, to lead to distortions in the work of the Appellate Body Members. Moreover, appeals involving many parties could arise where it would be impossible to constitute a division. Rule 6 is framed accordingly.”(2149)

6.     Rule 8: rules of conduct

1372.     In a communication dated 20 January 1997, the Chairman of the Appellate Body informed the Chairman of the Dispute Settlement Body that the Rules of Conduct had been directly incorporated into Annex II of the Working Procedures.(2150)

7.     Rule 13: replacement of Appellate Body member in a given appeal

1373.     In US — Lead and Bismuth II, Mr. Christopher Beeby, one of the members of the Division hearing the appeal, passed away and Mr. Julio Lacarte-Muró, another member of the Appellate Body, was selected to replace him.(2151)

1374.     In US — Offset Act (Byrd Amendment), Mr. Giorgio Sacerdoti replaced Mr. A. V. Ganesan as Presiding Member of the Division hearing this appeal because the latter was prevented from continuing to serve on the Division for serious personal reasons.(2152)

1375.     In US — Softwood Lumber IV, Mr. Giorgio Sacerdoti replaced Mr. A. V. Ganesan as a Member of the Division hearing this appeal because the latter was prevented from continuing to serve on the Division for serious personal reasons.(2153)

1376.     In US — FSC (Article 21.5 — EC II), Mr. John Lockhart was prevented from continuing to serve on the Division for serious personal reasons falling within Rule 12 of the Working Procedures. In accordance with Rule 13 of the Working Procedures, the Appellate Body selected Ms. Merit E. Janow to replace Mr. Lockhart.(2154)

8.     Rule 15: transition

1377.     In accordance with Rule 15 of the Working Procedures, the Appellate Body notified the Chairman of the DSB of its decision to authorize Mr. Ganesan to complete the disposition of the appeals in US — Shrimp (Thailand) I US — Customs Bond Directive, even though his second term as Appellate Body Member was to expire before the completion of the appellate proceedings.(2155)

1378.     In accordance with Rule 15 of the Working Procedures, the Appellate Body notified the Chairman of the DSB of its decision to authorize Mr. Abi-Saab to complete the disposition of the appeals in US/Canada — Continued Suspension, even though his second term as Appellate Body Member was due to expire before the completion of the appellate proceedings.(2156)

9.     Rule 16: general provisions

(a)     Rule 16(1): adoption of special or additional procedure for purposes of a particular appeal

(i)     Special procedure to protect business confidential information

1379.     In Brazil — Aircraft, Brazil and Canada requested that the Appellate Body apply, mutatis mutandis, the procedures governing business confidential information adopted by the panel in that case. The Appellate Body issued a preliminary ruling in which it concluded that it was not necessary, under the circumstances of this case, to adopt additional procedures to protect business confidential information.(2157)

1380.     The Appellate Body did adopt additional procedures to protect business confidential information in EC and certain member States — Large Civil Aircraft.(2158) The Appellate Body clarified that:

“[W]e recognize that, in Brazil — Aircraft and Canada — Aircraft, the Appellate Body did not consider it necessary, in the circumstances of those appeals, to adopt additional procedures to protect information deemed sensitive by the participants.(2159) In doing so, however, the Appellate Body did not suggest that the DSU, the other covered agreements, or the Working Procedures precluded the adoption of procedures providing additional protection; rather, the Appellate Body did not consider that such additional protection was necessary in the particular circumstances of those appeals.”(2160)

1381.     In Thailand — Cigarettes (Philippines), the Appellate Body explained that:

“The Panel adopted additional working procedures for the protection of business confidential information (“BCI”),(2161) but we have not done so in this appeal. Neither participant requested that we adopt additional procedures for the protection of BCI in these appellate proceedings, although the Philippines made a conditional request that we consult the participants in the event that we considered it necessary to refer to information that was considered to be BCI in the proceedings before the Panel. We have not found it necessary to refer to any such information in this Report.”(2162)

(ii)     Special procedure for dealing with possible amicus curiae submissions

1382.     In EC — Asbestos, the Appellate Body adopted a special procedure, pursuant to Rule 16(1) of its Working Procedures, to deal with any possible submissions received from amicus curiae. The additional procedure was posted on the WTO website on 8 November 2000 and provided 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, (emphasis original)”(2163)

(iii)     Special procedure to consolidate multiple appeals with substantial overlap in content

1383.     The Appellate Body has consolidated appellate proceedings on a number of occasions due to the substantial overlap in the content of the disputes.(2164) In US — Shrimp (Thailand) I US — Customs Bond Directive, for example, the Appellate Body explained that:

“[I]n the interests of “fairness and orderly procedure”, as referred to in Rule16(1) of the Working Procedures, and in agreement with the participants, the appellate proceedings in respect of the appeals by both Thailand and India would be consolidated due to the substantial overlap in the content of the disputes. A single Division would hear and decide both appeals, and a single oral hearing would be held by the Division. Further to a request by the United States, and in consultation with the participants, the Division extended, pursuant to Rule 16(2) of the Working Procedures, the time periods for the filing of the other appellant’s submissions by the United States, as well as for the filing of appellees’ and third participants’ submissions. The Division also invited all third parties in US — Shrimp (Thailand) and US — Customs Bonds Directive to attend the single oral hearing in the consolidated appellate proceedings, noting, however, the understanding that, in their written submissions and oral statements, the third participants would address only the issues appealed in the dispute(s) to which they were third parties in the panel proceedings.”(2165)

(iv)     Special procedure for public observation of the oral hearing

1384.     See Rule 27 of the Working Procedures.

(v)     Special procedure arising from replacement of Member on the Division

1385.     In US — Lead and Bismuth II, due to the passing away of Mr. Christopher Beeby, the Appellate Body, pursuant to Rule 13 of the Working Procedures, had selected Mr. Julio Lacarte-Muró to replace him (see paragraph 1373 above). In view of these extraordinary circumstances, the newly-constituted Division decided, pursuant to Rule 16(1), and in the interests of fairness and orderly procedure in the conduct of this appeal, to hold another oral hearing. On that date, the participants and third participants presented oral arguments and responded to questions put to them by the Members of the newly-constituted Division.(2166)

(b)     Rule 16(2): request to modify a time-period set out in the Working Procedures for the filing of documents or the date set out in the working schedule for the oral hearing

(i) Request to modify time-period for filing of documents

1386.     In US — Wool Shirts and Blouses, the Appellate Body granted a US request to extend the time for it to file its appellee’s submission.(2167)

1387.     In Guatemala — Cement I, both parties, Guatemala and Mexico, had filed their appellee’s submissions in Spanish. In order to ensure that the third participant, the United States, would have time to prepare its submission after receiving an English version of the appellant’s submission, the Appellate Body granted the United States additional time to file its third participant’s submission. The Appellate Body further declined Mexico’s request that its appellee’s submission be withheld from Guatemala and the United States until the end of the time-period allowed to the United States to file its third participant’s submission.(2168)

1388.     In EC — Bed Linen, the European Communities and India requested the Appellate Body to extend the time-period for filing the appellee’s and third participant’s submissions. The Division hearing the appeal accepted the request pursuant to Rule 16(2) of the Working Procedures and in the light of the “exceptional circumstances” in that appeal.(2169)

1389.     In Mexico — Anti-Dumping Measures on Rice, Mexico requested that the Division modify the working schedule in the light of translation issues. Specifically, Mexico noted that the working schedule provided for five calendar days between the date Mexico would receive the translated appellee’s and third participant’s submissions, and the first day of the oral hearing, whereas the Working Procedures provided normally for 10 to 15 days for that period. Mexico submitted that the other time periods provided in the Working Schedule corresponded to the time periods in a typical appeal, with additional time provided where necessary for translation. Mexico therefore requested that it be given “as much time as possible” in the period preceding the oral hearing to ensure that both participants had “an equal opportunity to present their case”. The Division invited the United States and the third participants to comment on Mexico’s request. The United States responded that, although it was not clear that the time period provided for in the Working Schedule was “manifestly unfair”, it “recognize[d] Mexico’s point of view” and therefore would not object to a “slight, further modification” of the Schedule. In its reply, the Division noted that that in the light of Mexico’s request, the WTO Language Services and Documentation Division had informed the Appellate Body Secretariat that it would provide a translation of the United States’ appellee’s submission two days earlier than scheduled, i.e. eight days before the oral hearing. The Division concluded that, in these circumstances, maintaining the original working schedule “would not prejudice the ability of Mexico to defend its interests”, and therefore “declined Mexico’s request.”(2170)

1390.     In US — FSC (Article 21.5 — EC), the United States requested the Appellate Body to modify its timetable on the grounds that a bioterrorist attack amounted to “exceptional circumstances” under Rule 16(2) of the Working Procedures:

“By letter of 22 October 2001, the United States requested the Appellate Body pursuant to Rule 16(2) of the Working Procedures to modify the timetable set out in the Working Schedule for Appeal for the filing of the appellant’s submissions by the United States. The United States stated that suspected bioterrorist attacks had compromised the ability of the United States to conduct the necessary consultations with the United States Congress with regard to this appeal.(2171) According to the United States, the effect of these circumstances was such that adhering to the original timetable would result in manifest unfairness to the United States. In its letter of 23 October 2001, the European Communities did not object to the request made by the United States, but requested that, in order to preserve the balance of procedural rights afforded to the participants in this appeal, the Appellate Body extend the deadline for the filing of the European Communities’ appellee’s submission by 14 days. In a letter dated 23 October 2001, the Division of the Appellate Body hearing the appeal accepted that the circumstances identified by the United States constituted “exceptional circumstances” within the meaning of Rule 16(2) of the Working Procedures and that maintaining the deadline for submission of the appellants’ submission would result in “manifest unfairness” to the United States. Accordingly, the Division agreed to modify the Working Schedule for this appeal to allow the United States an additional seven days for the filing of its appellant’s submission. In the same letter, the Division also extended by seven days the deadlines for the filing of the other appellant’s submissions, the appellee’s submission, and the third participants’ submissions.”(2172)

1391.     In Chile — Price Band (Article 21.5 — Argentina), Argentina requested that the Division change the date scheduled for filing its other appellant’s submission from 20 February to 26 February 2007. Argentina explained that filing a submission on 20 February would be “highly problematic for Argentina” because the oral hearing in another appellate proceeding, in which Argentina was also a participant, would be held on 19 February 2007. The Appellate Body invited Chile and the third participants to comment on Argentina’s request. Neither Chile nor any third participant objected to Argentina’s request, but Chile and the United States requested extensions of the deadlines for filing their submissions in the event that the Division granted Argentina’s request. The Division decided to change the date for filing Argentina’s other appellant’s submission from 20 February to 23 February 2007, and the date for filing Chile’s appellee’s submission and the third participants’ submissions from 2 March to 6 March 2007.(2173)

1392.     In US — Shrimp (Thailand) I US — Customs Bond Directive, India requested the Division to extend the time period for filing its appellant’s submission by one working day, from 24 April to 25 April 2008, due to certain unforeseen developments. Having considered India’s request and the views expressed by the United States and Thailand, the Division granted India time until 1 p.m., Geneva time, on 25 April 2008 to file its appellant’s submission. Further, in view of the submission made by the United States, the Division also granted the United States time until 1 p.m., Geneva time, on 20 May 2008 to file its appellee’s submissions.(2174)

(ii)     Request to modify date of oral hearing

1393.     In EC — Bananas III, pursuant to Rule 16(2) of the Working Procedures, Jamaica asked the Appellate Body to postpone the dates of the oral hearing, set out in the working schedule. This request was not granted as the Appellate Body was not persuaded that there were exceptional circumstances resulting in manifest unfairness to any participant or third participant that justified the postponement of the oral hearing in the appeal.

1394.     In US — Shrimp (Article 21.5 — Malaysia), the United States requested that the Division hearing this appeal change the date of the oral hearing set out in the working schedule for this appeal. After inviting the participants to make their views known with respect to this request, the Division ruled that it would not change the date of the oral hearing.

1395.     In US — Softwood Lumber VI (Article 21.5 — Canada), the United States requested a change to the date scheduled for the oral hearing in this appeal on the grounds that lead counsel for the United States was not available on that date, due to a long-established prior commitment. Neither Canada nor the third participants objected to the United States’ request. The Division decided to change the date of the oral hearing.

1396.     In China — Auto Parts, the United States requested that the oral hearing start one day later than scheduled. On the same day, the Division hearing this appeal offered Canada, China, the European Communities and the third participants the opportunity to comment on the United States’ request. None of the participants or third participants objected. The Division decided to change the starting time of the oral hearing in this appeal from the morning to the afternoon of the day originally scheduled.(2175)

10.     Rule 18: documents

(a)     Rule 18(1): failure to file document by the specified deadline

1397.     In US — Upland Cotton, the Appellate Body noted, without further discussion, that:

“In a letter dated 1 November 2004, Brazil, without requesting action by the Appellate Body, drew attention to the failure by the United States to submit its appellant’s submission in a timely fashion. Brazil observed that the United States’ appellant’s submission was submitted on 28 October 2004 after the deadline of 5:00 p.m. that had been established by the Division in the Working Schedule issued pursuant to Rule 26 of the Working Procedures.”(2176)

1398.     In US — Stainless Steel (Mexico), the European Communities complained that the United States’ appellee’s submission was submitted almost three hours after the time-limit set out by the Appellate Body in the Working Schedule for this appeal. The European Communities submitted that the United States “had significant time to examine the filings of the Third Participants and eventually adjust its own submission prior to filing.” At the oral hearing, the European Communities reiterated its request that the Appellate Body clarify whether it considers the United States’ appellee’s submission to be filed within the meaning of Rule 18(1) of the Working Procedures, and what the consequences are, if any, of a late filing. The Appellate Body responded:

“We share the concerns raised by the European Communities. Compliance with established time periods by all participants regarding the filing of submissions is an important element of due process of law. The Appellate Body clarified in India — Patents (US) that due process requirements are implicit in the DSU. This is particularly important, given that, according to Rules 22(1) and 24(1) of the Working Procedures, the appellee’s submission(s) and the third participant’s submission(s) are filed contemporaneously. The late filing of a participant’s submission could have implications for the other participants. Compliance with the procedural requirements relating to the timely filing of submissions is a matter of fairness and orderly procedure, which are referred to in Rule 16(1) of the Working Procedures. In the circumstances of this appeal, we nevertheless consider the United States’ appellee’s submission as filed.”(2177)

1399.     In US/Canada — Continued Suspension, the European Communities sent a letter to the Appellate Body Secretariat noting that the United States and Canada had filed their appellee’s submissions after the 5:00 p.m. time-limit set out by the Division in the Working Schedule drawn up for these appeals. The European Communities referred to Rule 18(1) of the Working Procedures and requested that the Division “inform the parties of the treatment that should be accorded to these documents”. The United States and Canada responded in separate letters and requested the Division to reject the European Communities’ request. At the oral hearing, the Division gave a ruling on the European Communities’ request regarding the late filing of the appellee’s submission by the United States and Canada.

“The Division emphasized the importance of all participants adhering strictly to the time-limits set out in the Working Schedule, given the time constraints imposed upon both the participants and the Appellate Body Members in these proceedings. It also noted that the failure to strictly observe such time-limits can have an impact upon the fairness and the orderly conduct of the proceedings. However, having thoroughly examined the matter, and in the light of the particular time-limits concerned and potential prejudice that might be involved, the Division decided nevertheless to consider the appellees’ submissions filed by the United States and Canada.”(2178)

1400.     In Australia — Apples, the Appellate Body decided not to accept the executive summary of the United States’ third party submission because it was filed two days after the deadline.(2179)

1401.     In US — Anti-Dumping and Countervailing Duties (China), the Appellate Body decided not to accept the executive summary of Argentina’s third participant’s submission because it was filed one day after the deadline.(2180) However, the Appellate Body did accept another third participant’s written submission notwithstanding that it was filed after the 17:00 deadline. In this regard, the Appellate Body noted that:

“Turkey’s third participant’s submission was not received before the 17:00 deadline specified in Rule 18(1) of the Working Procedures. While we are cognizant of the fact that this is the first appeal filed following recent amendments to the Working Procedures, including to Rule 18(1), we nevertheless wish to emphasize strongly the importance of timely filing of documents in appeals.”(2181)

1402.     In Thailand — Cigarettes (Philippines), the Appellate Body noted that:

“Although the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu indicated that its notification was made pursuant to Rule 24(2) of the Working Procedures, the notification was not received before the 17:00 deadline specified in Rule 18(1) of the Working Procedures. Accordingly, the Division treated it as a notification and request to make an oral statement at the hearing made pursuant to Rule 24(4) of the Working Procedures.”(2182)

(b)     Rule 18(5): correction of clerical errors in submissions

(i)     The 2005 amendment of Rule 18(5)

1403.     Rule 18(5) of the original Working Procedures provided that “[u]pon authorization by the division, a participant or a third participant may correct clerical errors in any of its submissions. Such correction shall be made within 3 days of the filing of the original submission and a copy of the revised version shall be filed with the Secretariat and served upon the other participants and third participants.” Rule 18(5) was subsequently amended (the amendment took effect 1 January 2005). In a communication to the DSB Chairman dated 8 April 2004, the Appellate Body explained the reasons for doing so:

“Members have occasionally had recourse to this provision over the last eight years. Their practice in this regard has demonstrated to us that: (i) the meaning of the word “clerical” is not always clear; and (ii) the 3-day requirement is too inflexible.

 

Accordingly, we are considering amending Rule 18(5) of the Working Procedures to eliminate the three-day time limit and to replace the word “clerical” with “minor”. We also propose to add, in parentheses, an illustrative, though not exhaustive, list of what could constitute a “minor” error: for example, typographical errors, errors in syntax, or words or numbers in the wrong order.

 

Authorization to amend pursuant to this provision will be made on a case-by-case basis. It is also our intention, whenever a request is made pursuant to Rule 18(5), to afford all participants and third participants in the appeal an opportunity to comment upon the request.”(2183)

1404.     In a communication to the DSB Chairman dated 7 October 2004 explaining the final version of the amendment to Rule 18(5), the Appellate Body explained that:

“A number of Members voiced a preference to retain the term “clerical” in Rule 18(5), regarding the correction of certain errors in submissions and other documents. Consistent with the concerns expressed, we have, in the final version of the amendments, decided to retain the term “clerical”, while adding an illustrative list of the types of errors subject to the rule. We have also taken into account the preference expressed by certain Members for the maintenance of a deadline for correction of clerical errors. However, in the light of the non-substantial nature of amendments covered by this rule, and to allow for the possibility that participants may become aware of clerical errors only upon the filing of written submissions by other participants, we have chosen to provide a generous deadline, viz. 30 days following the filing of the Notice of Appeal, or, roughly five days following receipt of the last of the written pleadings. We note that, in any event, a Member’s ability to correct clerical errors will be contingent upon the receipt of authorization from the Division hearing the appeal.”(2184)

(ii) Subsequent application of Rule 18(5)

1405.     The Appellate Body has granted requests to correct clerical errors pursuant to Rule 18(5) in a number of proceedings to date, including but not limited to Mexico — Taxes on Soft Drinks;(2185) US — Softwood Lumber VI (Article 21.5 — Canada);(2186) EC — Selected Customs Matters;(2187) US — Zeroing (Japan);(2188) Japan — DRAMs (Korea);(2189) US — Stainless Steel (Mexico);(2190) US — Shrimp (Thailand) I US — Customs Bond Directive;(2191) China — Auto Parts;(2192) Australia — Apples;(2193) and Thailand — Cigarettes (Philippines).(2194)

1406.     In Mexico — Taxes on Soft Drinks, Mexico requested authorization to correct certain clerical errors in its appellant’s submission pursuant to Rule 18(5). The Appellate Body explained that:

“By letter dated 16 January 2006, the Division authorized Mexico to correct the clerical errors in its appellant’s submission but emphasized, however, that it had not been requested, and did not make, a finding “as to whether all of the corrections requested by Mexico are ‘clerical’ within the meaning of Rule 18(5) of the Working Procedures.”(2195)

1407.     In US — Softwood Lumber VI (Article 21.5 — Canada), Canada requested authorization to correct certain clerical errors in its appellant’s submission after the deadline for such requests had passed. The Division decided to grant the request because “the correct information was, in any event, set forth in one of the exhibits submitted by Canada to the Panel; the matter had been discussed at the oral hearing; and the United States did not object to the request”.(2196)

11.     Rule 20(2)(d): Notice of Appeal — “statement of the nature of appeal”

(a)     The purpose of Rule 20(2)(d)

1408.     In US — Countervailing Measures on Certain EC Products, the Appellate Body rejected the argument by the United States that the Notice of Appeal serves a limited purpose as simply a formal trigger for initiating the appeal and stressed the importance of the Notice of Appeal as the means to allow the appellees to exercise their right of defence:

“[0]ur previous rulings have underscored the important balance that must be maintained between the right of Members to exercise the right of appeal meaningfully and effectively, and the right of appellees to receive notice through the Notice of Appeal of the findings under appeal, so that they may exercise their right of defence effectively. Hence, we disagree with the contention of the United States here that the Notice of Appeal ‘serves a limited purpose’ as ‘simply a formal trigger for initiating the appeal.’ Indeed, if this were the only objective of the notice, our Working Procedures would have included only the first paragraph of Rule 20, which refers to commencement of an appeal through written notification to the Dispute Settlement Body and Appellate Body Secretariat. However, Rule 20 also prescribes additional requirements for commencing an appeal; it provides that the Notice of Appeal must include ‘a brief statement of the nature of the appeal, including the allegations of errors in the issues of law covered in the panel report and legal interpretations developed by the panel.’(2197) The notification under Rule 20(1) serves as the “trigger” to which the United States refers. The additional requirements under Rule 20(2) serve to ensure that the appellee also receives notice, albeit brief, of the ‘nature of the appeal’ and the ‘allegations of errors’ by the panel.”(2198)

1409.     Rule 20(2)(d) originally provided that a Notice of Appeal shall include “a brief statement of the nature of the appeal, including the allegations of errors in the issues of law covered in the panel report and legal interpretations developed by the panel”. Rule 20(2)(d) was subsequently amended (the amendment took effect 1 January 2005). In a communication to the DSB Chairman dated 7 October 2004 explaining the final version of the amendment to Rule 20(2)(d), the Appellate Body explained that:

“Having considered the views expressed by Members regarding the contents of the Notice of Appeal, we wish to emphasize that we share the concern implicit in the comments of a number of Members, namely that revision of the Working Procedures should serve the interests of due process and orderly procedure and should reduce, rather than enhance, opportunities for procedural disputes on appeal. For the reasons set out in my letter of 8 April, we believe that these objectives would be served by further clarification of what is meant by the requirement in Rule 20(2)(d) that a Notice of Appeal set out a “brief statement of the nature of the appeal”. We have, accordingly, adopted changes to this provision similar to those envisaged in our initial draft amendment.

 

At the same time, we have made certain adjustments to the draft amendment. First, item (i) of subparagraph (d) has been adjusted to specify that what is required is “identification” (rather than “description”) of the “alleged errors in the issues of law covered in the panel report and legal interpretations developed by the panel”. Furthermore, the qualifying phrase “without prejudice to the ability of the appellant to refer to other paragraphs of the panel report in the context of its appeal” has been added to the beginning of item (iii) of that same subparagraph. This confirms that the list of paragraphs of the panel report to be included in the Notice of Appeal is indicative. We emphasize that this provision is intended to enhance due process and assist the other parties, as well as the Appellate Body, to understand the issues under appeal, and will not prejudice an appellant seeking to refer to other paragraphs in the context of its appeal.”(2199)

1410.     In 2010, the Appellate Body amended Rules 21(1), 23(1), and 23(3) of its Working Procedures to provide that the appellant’s submission will be due on the same day as the filing of the Notice of Appeal, and that the Notice of Other Appeal and the other appellant’s submission will be filed together five days after the filing of the Notice of Appeal. In a 27 July 2010 communication to the Chairman of the DSB, the Appellate Body explained why it had decided to not eliminate the Notice of Appeal or the Notice of Other Appeal in the light of these amendments:

“As explained in our proposal, we did not intend or propose to eliminate the Notice of Appeal or the Notice of Other Appeal. We believe that the Notice of Appeal remains necessary because it commences the proceedings before the Appellate Body and, together with a Notice of Other Appeal, serves the important function of demarcating the scope of appellate review in a specific dispute. In addition, since it has become customary for Members to send the Notice of Appeal to the DSB when notifying their decision to appeal pursuant to the provisions of Article 16.4 of the DSU, these Notices also serve an important transparency function in that they notify WTO Members of the commencement of an appeal and inform the Membership as a whole of its nature.

 

We note that, in the course of their consultations with the DSB Chairman, some Members raised questions about the continuing need for Notices of Appeal and Other Appeal, as well as for Rule 23bis regarding the amendment of Notices of Appeal and Other Appeal. The Appellate Body has on several occasions expressed the view that the Notice of Appeal also serves to provide adequate notice to the appellee of the “nature of the appeal” and the “allegations of error”, which in turn enables the appellee to exercise fully its rights of defence.(2200) It is true that an appellee will have a better understanding of the nature of the appeal and the allegations of error when a detailed written submission is filed on the same day. Nevertheless, we continue to hold the view that there is significant value, both to Members participating in the appeal and to the Appellate Body, in requiring a concise and precise statement of the errors of law and legal interpretation subject to appeal. Indeed, just such considerations led the Appellate Body to introduce, in 2005, the requirement that the other appellant also file a notice of its other appeal. In our view, elimination of the existing requirements to provide, in the Notices, a brief statement of the nature of the appeal and other appeal could create a risk of uncertainty as to the precise demarcation of those appeals. This is because the exact scope of an appeal and other appeal may not always be clear from the arguments contained in the appellant’s and other appellant’s submissions, particularly when such submissions are very lengthy.

 

We thus have decided to preserve the Notices of Appeal and Other Appeal as documents that define the scope of appeal. It follows that Rule 23bis, too, continues to have relevance. With regard to a concern expressed by some Members that retaining these requirements could encourage procedural objections relating to the Notices, with a corresponding loss of precious time during the appeal period, we note that, since the Appellate Body amended Rules 20 and 23 in 2005, procedural disputes regarding the sufficiency of Notices of Appeal have been infrequent.”(2201)

(b)     The distinction between claims and arguments

1411.     In US — Shrimp, the Appellate Body upheld the Notice of Appeal against claims that it was “vague and cursory”. The Appellate Body found that, although the references to the panel’s findings were “terse”, there was no mistaking which findings or interpretations of the panel the Appellate Body was asked to review:

“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.”(2202)

1412.     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). The Appellate Body referred to the established distinction between claims and legal arguments in the context of Article 6.2 of the DSU, and considered that:

“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.”(2203),(2204)

1413.     In US — Countervailing Measures on Certain EC Products, the Appellate Body contrasted the requirements of Rule 20(2)(d), regarding the Notice of Appeal, with the requirements of Rule 21(2):

“[B]oth the Notice of Appeal and the appellant’s submission must set out the allegations of errors; but, the appellant’s submission must be more specific in this regard. The appellant’s submission must be precise as to the grounds of appeal, the legal arguments which support it, and the provisions of the covered agreements and other legal sources upon which the appellant relies.”(2205)

1414.     In US — Countervailing Duty Investigation on DRAMS, Korea alleged that the United States’ Notice of Appeal did not identify the alleged errors in the issues of law covered in the panel report and legal interpretations developed by the Panel. The Appellate Body disagreed. The Appellate Body considered that although Korea was correct that the United States’ Notice of Appeal “simply tracks the Panel’s finding”, it was sufficient for purposes of Rule 20(2)(d)(2206)

(c)     The consequence of failing to meet requirements of Rule 20(2)(d)

(i)     General rule: claim of error excluded from scope of appeal

1415.     In EC — Bananas III, the Appellate Body, having found that the European Communities had not properly indicated, in its Notice of Appeal, that it was appealing one particular Panel finding, decided to exclude that particular finding from the scope of the appeal:

“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.”(2207)

1416.     In US — Offset Act (Byrd Amendment), the Appellate Body stated that “if an appellee has not received sufficient notice in the Notice of Appeal that a particular claim will be advanced by the appellant, that claim normally will be excluded from the appeal”.(2208)

1417.     In EC — Bananas III (Article 21.5 — Ecuador II) I EC — Bananas III (Article 21.5 — US), the Appellate Body observed that Rule 20(2) (d) “does not stipulate what consequences flow from a failure to meet its requirements”, and stated that in “assessing the potential consequences”, we are mindful of the due process function that this Rule fulfills.(2209) In that case, the Appellate Body ultimately found that certain defects in the Notice of Appeal did “not give rise to procedural detriment of the kind that would warrant the dismissal” of the European Communities’ appeal.(2210)

1418.     In EC — Fasteners (China), the European Union argued that China had raised a claim not mentioned in China’s Notice of Other Appeal. The Appellate Body agreed, and stated that:

Rules 20(2)(d)(ii) and 23(2)(c)(ii)(B) of the Working Procedures require a participant to include in its Notice of Appeal or Notice of Other Appeal “a list of the legal provision(s) of the covered agreements that the panel is alleged to have erred in interpreting or applying”. The Appellate Body has recognized the due process function that a Notice of Appeal fulfils, emphasizing:

 

… the important balance that must be maintained between the right of Members to exercise the right of appeal meaningfully and effectively, and the right of appellees to receive notice through the Notice of Appeal of the findings under appeal, so that they may exercise their right of defence effectively.(2211)

 

If an appellee is not notified of the claims raised by the appellant or other appellant in the Notice of Appeal or Other Appeal, those claims are not properly within the scope of the appeal, and the Appellate Body will not make findings thereon.(2212) China failed to list Article 11 of the DSU in its Notice of Other Appeal with regard to the confidential treatment of the identity of the complainants and supporters of the complaint, and we therefore find that this claim under Article 11 is not properly before us. Thus, absent a claim under Article 11 of the DSU, we are not called upon to evaluate whether the Panel made an objective assessment of the facts or to examine the Panel’s weighing of the evidence before it.”(2213)

(ii)     Some exceptions

Claim of error relating to jurisdiction / terms of reference

1419.     In US — Offset Act (Byrd Amendment), the Appellate Body stated that:

“[T]he issue of a panel’s jurisdiction is so fundamental that it is appropriate to consider claims that a panel has exceeded its jurisdiction even if such claims were not raised in the Notice of Appeal.”(2214)

1420.     In US — Continued Zeroing, the United States requested that the Appellate Body find that the panel made findings on certain claims that were outside of its terms of reference. The Appellate Body addressed the merits of the United States’ claim of error, notwithstanding that the United States “did not make this request in its Notice of Other Appeal, but only included this request subsequently in a footnote in its other appellant’s submission”.(2215)

Filing of clarifications, further particulars, or supplementary or amended Notices of Appeal

1421.     In EC — Sardines, Peru requested a preliminary ruling from the Appellate Body excluding four of the nine points raised in the European Communities’ Notice of Appeal because they allegedly did not meet the requirements of Rule 20(2)(d). The European Communities subsequently withdrew its original Notice of Appeal (pursuant to Rule 30) conditionally on the right to file a new Notice of Appeal, and then filed a new Notice of Appeal on the same day.(2216)

1422.     Members adopted the Appellate Body Report in EC — Sardines in 2002. In 2005, the Appellate Body amended the Working Procedures by introducing Rule 23bis (“Amending Notices of Appeal”).

1423.     In US — Countervailing Measures on Certain EC Products, the European Communities filed a request for a preliminary ruling alleging that the United States’ Notice of Appeal was not in conformity with Rule 20(2)(d), and requesting that the Appellate Body order the United States “immediately to file further and better particulars to its Notice of Appeal identifying the precise legal findings and legal interpretations that it is challenging”. The United States responded that the European Communities’ request was unfounded. The Appellate Body invited the United States to identify the precise findings and interpretations of the panel that were alleged, in the Notice of Appeal, to constitute errors. The United States submitted a letter quoting in full the paragraphs of the panel report to which it had merely referred by paragraph number in the Notice of Appeal. The United States also provided information as to legal errors allegedly committed by the panel.(2217) The Appellate Body stated that:

“In conducting our analysis, we will examine both the Notice of Appeal and the letter of 13 September 2002 supplementing the Notice of Appeal. Although the Working Procedures do not expressly provide for the filing of clarifications or further particulars or supplementary or amended Notices of Appeal, we consider it appropriate, in the particular circumstances of this case, to examine both documents with a view to giving “full meaning and effect to the right of appeal.” We note in particular that the additional document was filed by the United States in response to our invitation to do so, based in part on a request for additional particulars filed by the European Communities. Moreover, the additional document was filed shortly after the filing of the Notice of Appeal (three days). Finally, we note that the European Communities referred to both the Notice of Appeal and the letter of 13 September 2002 in its arguments on this issue.”(2218)

Absence of prejudice resulting from formal deficiencies

1424.     In EC — Bananas III (Article 21.5 — Ecuador II) I EC — Bananas III (Article 21.5 — US), the Appellate Body found that although there were certain formal deficiencies in the European Communities’ Notice of Appeal, the United States had suffered no prejudice from this:

“The European Communities’ Notice of Appeal identifies seven distinct legal issues. However, it makes no mention of any paragraph number of the US Panel Report to which the issues appealed relate. Nonetheless, we consider that the United States was in a position to discern the issues raised in the European Communities’ Notice of Appeal. The European Communities has provided a brief description of each legal issue it raises on appeal. The fact that the United States has provided a comprehensive appellee’s submission responding to all the issues of which the European Communities seeks review, suggests to us that the United States was, in fact, in a position to identify the Panel findings the European Communities is appealing, and did not suffer prejudice from the failure of the European Communities to provide a list of relevant paragraphs of the US Panel Report in its Notice of Appeal. Furthermore, we note that, in response to questioning at the oral hearing, the United States confirmed that it was not alleging that it had been prejudiced by the absence of paragraph numbers of the US Panel Report in the European Communities’ Notice of Appeal. We therefore consider that, with respect to items (a)-(g) set out in paragraph 2 of the Notice of Appeal, the United States was in the position to “know the case [it had] to meet” 336, and was thus placed on notice of the issues raised in the European Communities’ Notice of Appeal. The formal defects in the Notice of Appeal thus do not give rise to procedural detriment of the kind that would warrant the dismissal of the European Communities’ appeal. We therefore find that the deficiencies in the European Communities’ Notice of Appeal do not lead to dismissal of the European Communities’ appeal.”(2219)

(d) Potential deficiencies in a Notice of Appeal

(i)     Referring to paragraph numbers only in conclusion section of the panel report

1425.     In US — Countervailing Measures on Certain EC Products, the Appellate Body emphasized that, generally, a Notice of Appeal that simply refers to the paragraph numbers found in the “Conclusions and Recommendations” section of a panel report, or that simply quotes them in full, is insufficient to provide adequate notice of the allegations of error on appeal. In this case, however, as the section in question was particularly detailed, the Appellate Body considered that the Notice of Appeal was adequate in this respect:

“We observe that, in coming to these conclusions, we have before us a rather unusual example of the ‘Conclusions and Recommendations’ section of a panel report. In most panel reports, the ‘Conclusions and Recommendations’ section is relatively brief, setting out findings in summary fashion. Detailed legal interpretations and reasoning upon which panels rely are usually found only in the ‘Findings’ sections of panel reports. In this case, however, the Panel’s ‘Conclusions and Recommendations’ are more detailed than usual. Paragraphs 8.1(a)-8.1(d) of the Panel Report include, not only the Panel’s findings, but also certain of the reasons leading to those findings. Hence, in this case, it is possible, by reading the ‘Conclusions and Recommendations’ section from the Panel Report, to discern alleged errors of law appealed by the United States. We emphasize, however, that generally, a Notice of Appeal that refers simply to the paragraph numbers found in the ‘Conclusions and Recommendations’ section of a panel report, or that quotes them in full, will be insufficient to provide adequate notice of the allegations of error on appeal, and, hence, will fall short of the requirements set out in Rule 20(2)(d) of the Working Procedures.”(2220)

(ii)     Use of “for example”

1426.     In US — Upland Cotton, the Appellate Body considered that the use of the words “for example” in the US Notice of Appeal were insufficient to bring certain non-specified findings within the scope of the appeal:

“We acknowledge that the wording of paragraph 10 of the United States’ Notice of Appeal (and, in particular, the use of the words “for example”) suggests that the findings listed in this paragraph are simply examples of findings challenged in connection with Article 12.7 of the DSU, and that the United States’ claim of error under Article 12.7 extends to other Panel findings. In other words, paragraph 10 purports to provide an illustrative rather than exhaustive list of the findings that the United States intends to challenge under Article 12.7 of the DSU. However, the fact that paragraph 10 purports to provide an illustrative list is not conclusive as to whether the Notice of Appeal contains a sufficient reference to the Panel’s findings described in paragraph 493 above for us to conclude that these findings are included in the United States’ appeal. The significance of terms such as “for example” is likely to depend on the particular claim in question and the particular context in which the term is used in a given appeal. In our view, the United States’ Notice of Appeal did not provide adequate notice to Brazil, as contemplated by Rule 20(2) of the Working Procedures for Appellate Review (the “Working Procedures”), that the United States intended to make a claim of error under Article 12.7 of the DSU with respect to the Panel’s findings described in paragraph 493 above. We therefore decline to rule on these findings in connection with Article 12.7 of the DSU. “(2221)

(iii)     Failure to clearly allege procedural errors by a panel

1427.     In US — Offset Act (Byrd Amendment), the Appellate Body considered that generic statements in a Notice of Appeal do not give the appellees adequate notice of the nature of the appeal and the allegations of errors made by the panel. The Appellate Body made the following observations regarding allegations of “procedural errors” by a panel:

“We do not agree with the United States’ contention that the first numbered paragraph of the United States’ Notice of Appeal, referring generally to the Panel’s failure properly to interpret Article 18.1 of the Anti-Dumping Agreement and Article 32.1 of the SCM Agreement, ‘plainly covers’ a claim that the Panel exceeded its terms of reference. As we have said, the Notice of Appeal ‘serve [s] to ensure that the appellee also receives notice, albeit brief, of the ‘nature of the appeal’ and the ‘allegations of errors’ by the panel.’(2222) Generic statements such as that relied upon by the United States cannot serve to give the appellees adequate notice that they will be required to defend against a claim that the Panel exceeded its terms of reference. This is particularly so for procedural errors; it can be especially difficult to discern a claim of procedural error by a panel from general references to panel findings or from extracts of a panel report, because allegations of procedural error by a panel may not necessarily be raised until the appellate stage.”(2223)

(iv)     Failure to clearly allege a violation of Article 11 of the DSU by a panel

1428.     In US — Countervailing Measures on Certain EC Products, the Appellate Body established that a claim of error by a panel under Article 11 of the DSU is only possible in the context of an appeal and thus it needs to be included in the Notice of Appeal:

“A claim of error by a panel under Article 11 of the DSU is possible only in the context of an appeal. By definition, this claim will not be found in requests for establishment of a panel, and panels therefore will not have referred to it in panel reports. Accordingly, if appellants intend to argue that issue on appeal, they must refer to it in Notices of Appeal in a way that will enable appellees to discern it and know the case they have to meet.

 

Accordingly, we do not believe that the European Communities can be said to have been notified that the United States intended to argue on appeal that the Panel failed to act consistently with Article 11 of the DSU, and, consequently, we consider that the issue of the Panel’s compliance with Article 11 of the DSU is not properly before us in this appeal.”(2224)

1429.     In Japan — Apples, the Appellate Body stressed that notice of an Article 11 claim cannot be assumed merely because there is a challenge to a panel’s analysis of a substantive provision of a WTO agreement.

“By referring to the Panel’s alleged failure to comply with Article 11 of the DSU only in the context of Article 2.2, Japan did not enable the United States to ‘know the case [it had] to meet’(2225) as to the Article 11 claim related to Article 5.1 of the SPS Agreement. The Appellate Body has consistently emphasized that due process requires that a Notice of Appeal place an appellee on notice of the issues raised on appeal.(2226) It is this concern with due process, reflected in Rule 20 of the Working Procedures, that underlay the Appellate Body’s ruling on the sufficiency of the Notice of Appeal in US — Countervailing Measures on Certain EC Products.

 

Japan acknowledged during the oral hearing that it did not give the United States notice of its Article 11 claim specifically with respect to the Panel’s analysis under Article 5.1 of the SPS Agreement. Japan claimed, however, that ‘since we raised the claim under Article 5.1 of the SPS Agreement, this naturally involved some factual issues and …we can assume that the United States was notified’ as to the related Article 11 claim. We disagree. As noted above,(2227) the Appellate Body determined in US — Countervailing Measures on Certain EC Products that Article 11 claims are distinct from those raised under substantive provisions of other covered agreements. It follows from this distinction that notice of an Article 11 challenge cannot be ‘assumed’ merely because there is a challenge to a panel’s analysis of a substantive provision of a WTO agreement. Rather, an Article 11 claim constitutes a ‘separate “allegation of error”’(2228) that must be included in a Notice of Appeal. We therefore reject Japan’s assertion that an Article 11 challenge is only a ‘legal argument’ underlying the issues raised on appeal.”(2229),(2230)

1430.     In US — Steel Safeguards, the Appellate Body further emphasized that a claim under Article 11 of the DSU must not be vague or ambiguous but stand by itself and be substantiated, as such, and not as subsidiary to another alleged violation:

“A challenge under Article 11 of the DSU must not be vague or ambiguous. On the contrary, such a challenge must be clearly articulated and substantiated with specific arguments. An Article 11 claim is not to be made lightly, or merely as a subsidiary argument or claim in support of a claim of a panel’s failure to construe or apply correctly a particular provision of a covered agreement.(2231) A claim under Article 11 of the DSU must stand by itself and be substantiated, as such, and not as subsidiary to another alleged violation.

 

The United States’ arguments on Article 11 of the DSU are mentioned only in passing in its appellant’s submission. Nowhere do we find a clearly articulated claim or specific arguments that would support such a claim. Moreover, the United States did not clarify its challenge under Article 11 of the DSU during the oral hearing. In sum, the United Stated has not substantiated its claim that the Panel acted inconsistently with Article 11 of the DSU, and this claim must therefore fail.”(2232)

12.     Rule 21: appellant’s submission

(a)     Materials attached to an appellant’s submission

1431.     In US — Shrimp, the United States attached three amicus curiae briefs as exhibits to its appellant’s submission. India, Pakistan and Thailand objected to these briefs being appended to the appellant’s submission, and requested that the Appellate Body not consider these briefs. Among other things, they argued that by virtue of the incorporation of “unauthorized material” through the attachment of the exhibits, the United States’ submission could no longer be considered a “precise statement” as required by Rule 21(2) of the Working Procedures. The Appellate Body stated that:

“We consider that the attaching of a brief or other material to the submission of either appellant or appellee, no matter how or where such material may have originated, renders that material at least prima facie an integral part of that participant’s submission. On the one hand, it is of course for a participant in an appeal to determine for itself what to include in its submission. On the other hand, a participant filing a submission is properly regarded as assuming responsibility for the contents of that submission, including any annexes or other attachments.

 

In the present appeal, the United States has made it clear that its views “on the legal issues in this appeal’ are found in “the main U.S. submission.” The United States has confirmed its agreement with the legal arguments in the attached submissions of the non-governmental organizations, to the extent that those arguments “concur with the U.S. arguments set out in [its] main submission.”

 

We admit, therefore, the briefs attached to the appellant’s submission of the United States as part of that appellant’s submission. At the same time, considering that the United States has itself accepted the briefs in a tentative and qualified manner only, we focus in the succeeding sections below on the legal arguments in the main U.S. appellant’s submission.”(2233)

(b)     Rule 21(2): requirements of an appellant’s submission

1432.     In EC — Bananas III, Ecuador argued that the European Communities did not properly set out any allegation of error concerning a particular of the panel report in the Notice of Appeal, as required by Rule 20(2) (d), or in its appellant’s submission, as required by Rule 21(2). The Appellate Body agreed with Ecuador:

“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.”(2234)

1433.     In US — Countervailing Measures on Certain EC Products, the Appellate Body contrasted the requirements of Rule 20(2)(d), regarding the Notice of Appeal, with the requirements of Rule 21(2):

“[B]oth the Notice of Appeal and the appellant’s submission must set out the allegations of errors; but, the appellant’s submission must be more specific in this regard. The appellant’s submission must be precise as to the grounds of appeal, the legal arguments which support it, and the provisions of the covered agreements and other legal sources upon which the appellant relies.”(2235)

1434.     In Japan — DRAMs, Japan appealed several findings by the Panel. In respect of one of those findings, relating to the existence of a “benefit” under Article 1.1(b) of the SCM Agreement, Korea argued that Japan’s appellant’s submission did not satisfy the requirements of Rule 21(2) and the requirements of due process. The Appellate Body disagreed, and stated that:

“Japan provides extensive arguments, in its appellant’s submission, to support its assertion that the Panel’s review of the JIA’s determination of entrustment or direction is erroneous. As we see it, a careful reading of Japan’s appellant’s submission should have indicated to Korea that these arguments are also relevant with respect to the Panel’s review of the JIA’s benefit determination. Therefore, in our view, Japan’s appellant’s submission satisfies the requirements of Rule 21(2) of the Working Procedures and of due process. “(2236)

13.     Rule 23: multiple appeals (Notice of Other Appeal)

(a) General

1435.     In a 7 February 1996 communication from the Appellate Body to the Chairman of the DSB explaining some of the rules in the Working Procedures, the Appellate Body offered the following explanation of Rule 23(1), 23(5) and 23(6) and the procedure for cases involving multiple appellants:

“Fully cognizant of the fact that many panel disputes involve multiple parties, we have provided for a special procedure whereby multiple appellants can be heard fully within the timeframe of the original appeal and by the same division. Because of the time limits provided by Article 17(5) of the DSU for the appeal proceedings, multiple appeals can only be grouped in one single procedure if they are brought within a few days after the initiation of the first appeal. Rule 23(1) of the Working Procedures for Appellate Review specifies this period. Additional appeals which are brought later may not be grouped with the first appeal. They shall, however, be examined by the same division which is responsible for the first appeal. We believe that this is also necessary to ensure maximum coherence and consistency in our decision-making.”(2237)

(b)     The 2005 amendment of the Working Procedures to create the “Notice of Other Appeal” requirement

1436.     The original Working Procedures did not provide for an other appellant to file a Notice of Other Appeal. Rather, an “other appeal” was commenced simply by filing an other appellant’s submission on day 15 of the appeal (the time-period under the original Working Procedures). At no point would the other appellant give formal notice of the nature of the other appeal. Rule 23 was subsequently amended (the amendment took effect 1 January 2005). In a communication to the DSB Chairman dated 8 April 2004, the Appellate Body explained the reasons for doing so:

“The requirement of a Notice of Appeal for the original appeal but not for an other appeal now seems to us to be anomalous. As noted above, a Notice of Appeal enables the appellee to exercise its right of defence effectively. Yet other participants (in particular the original appellant) must also be entitled to the same opportunity where there is an other appeal.

 

Further, we believe that the absence of a Notice of Other Appeal can create a risk of confusion as to the scope of the other appeal. This is because, under the present rules, an other appellant is not required to identify, in a concise manner, the scope of its appeal, and such scope may not always be clear from the arguments contained in the other appellant’s submission.

 

We, therefore, propose that the Working Procedures be modified to include a requirement for the other appellant to file a Notice of Other Appeal. The rules on the content of this Notice would be the same as those applicable to the Notice of Appeal. We also consider that, like the original Notice of Appeal, the Notice of Other Appeal should be filed simultaneously with the Appellate Body Secretariat and the DSB, so that Members would receive notice of both appeals.”(2238)

1437.     In a communication to the DSB Chairman dated 7 October 2004 explaining the final version of the amendment to Rule 23, the Appellate Body explained that:

“For the reasons given in my letter of 8 April, we have decided to introduce a Notice of Other Appeal into the appellate process. Accordingly, we are adopting amendments to Rules 1 (definitions), 21 (timing for filing appellant’s submission), and 23 (timing and contents of Notice of Appeal and other appellant’s submission) that are largely consistent with the terms of the original draft amendment, and which require an other appellant to notify the DSB of its other appeal and to file a Notice of Other Appeal within 12 days of the filing of the original Notice of Appeal. It has, however, been necessary to adjust the initial draft to ensure symmetry between the requirements for the Notice of Other Appeal and the revised requirements for the Notice of Appeal, as identified above(2239), and to otherwise simplify the amended rule. In addition to these adjustments, and as proposed, the deadline for the filing of the appellant’s submission will be changed to 7 days after the filing of the original Notice of Appeal (as opposed to the current 10-day deadline). We have also taken the opportunity to refine the definition of the term “documents” in Rule 1, in order to clarify that the submissions and other written statements of third participants are included within the scope of this definition.”(2240)

(c)     Rule 23(2)(c)(ii): Notice of Other Appeal — “statement of the nature of the other appeal”

1438.     In EC — Fasteners (China), the Appellate Body equated the requirements of Rule 23(2)(c), governing Notices of Other Appeals, with the requirements of Rule 20(2)(d), governing Notices of Appeals.(2241)

14.     Rule 23bis: amending a Notice of Appeal / Notice of Other Appeal

(a)     The 2005 amendment to the Working Procedures creating Rule 23bis

1439.     The original Working Procedures did not address the question of whether an appellant could amend its Notice of Appeal once it had been filed. The issue subsequently arose in several appeals, including US — Countervailing Measures on Certain EC Products(2242) and EC — Sardines.(2243) In the fourth revision of the Working Procedures,(2244) which took effect on 1 January 2005, the Appellate Body created Rule 23bis to address this issue. In a communication to the DSB Chairman dated 8 April 2004, the Appellate Body explained the reasons for doing so:

“The present rules do not provide procedures for amending a Notice of Appeal. In the light of issues that have arisen in certain appeals,(2245) we consider that it is in the interests of orderly procedure for the Working Procedures to be modified to clarify whether, and in what circumstances, an appellant can supplement the Notice of Appeal.

 

We consider it essential to preserve the Notice of Appeal as the single, key document that defines the scope of appeal. At the same time, we wish to avoid confusion that may arise when an appellant seeks to file different documents elaborating on or adding to its Notice of Appeal. For these reasons, we believe that it may be useful to provide for the possibility that an appellant may be authorized to amend its Notice of Appeal.(2246)

 

We emphasize that we are not considering an unfettered right to change the Notice of Appeal. This could prejudice the interests of participants as well as create difficulties for the Appellate Body. Rather, we are considering making any appellant or other appellant’s ability to amend its Notice of Appeal contingent upon the receipt of leave from the Division hearing the appeal. In order to obtain leave to amend the notice, an appellant or other appellant will be required to show cause. What is required to show cause will depend upon the circumstances of each case. Factors that we would expect to take into account in assessing any request to amend a Notice of (Other) Appeal would include the nature and extent of the proposed amendment, due process, the timing of the request to amend the Notice of (Other) Appeal, and any reasons why the proposed amended Notice was not or could not have been filed on its original due date. Changes to the appeals timetable would be minimized and, in any event, the 90-day period within which an appeal is to be completed would not be extended.

 

The Appellate Body would afford all participants and third participants an opportunity to comment on the justification for the proposed amendments before reaching a decision on whether to accept an amended Notice.”(2247)

1440.     In a communication to the DSB Chairman dated 7 October 2004 explaining the final version of the amendment to Rule 23bis, the Appellate Body explained that:

“We are of the view that the adoption of a rule allowing for the amendment of Notices of Appeal would remedy an existing gap in the Working Procedures and have included such an amendment as new Rule 23bis.

 

We also recognize the concern expressed by certain Members regarding the criteria to be considered by a Division when addressing a request for authorization to amend a Notice of Appeal. Accordingly, paragraph (3) of the original draft new Rule has been modified to specify, in non-exhaustive terms, the types of considerations that will be taken into account by a Division in such a case.

 

We have also taken note of the concern expressed by Members regarding the impact of a request to amend a Notice of Appeal on the timeframes involved in an appeal. In line with this concern, we have adjusted the amendment to require that requests for authorization to amend be made “as soon as possible”. We anticipate that a Division considering any such request will consider the matter promptly, and will fix strict deadlines for comment by other parties. We do not, therefore, consider that the new Rule 23bis will affect the ability of the Appellate Body to deal expeditiously with the matters that come before it.”(2248)

(b)     Interpretation and application of Rule 23bis

1441.     In EC and certain member States — Large Civil Aircraft, the European Union requested authorization to amend its Notice of Appeal pursuant to Rule 23bis of the Working Procedures in order to correct certain discrepancies in the references to paragraph numbers of the Panel Report, as well as two typographical errors. The Division provided the United States and the third participants with an opportunity to comment in writing. No objections to the European Union’s request were received, and the Division authorized the European Union to amend its Notice of Appeal.(2249)

15.     Rule 24: third participants

(a)     Role of third participants in appellate proceedings

1442.     In US/Canada — Continued Suspension, the Appellate Body granted a request by the participants to allow public observation of the oral hearing. Some of the third participants argued that the Appellate Body was constrained by Article 17.10 of the DSU in its power to authorize the lifting of confidentiality. In that context, the Appellate Body made a number of observations on the role of third participants in appellate proceedings:

“The Appellate Body has fostered the active participation of third parties in the appellate process in drawing up the Working Procedures and in appeal practice. Article 17.4 provides that third participants “may make written submissions to, and be given an opportunity to be heard by, the Appellate Body.” In its Working Procedures, the Appellate Body has given full effect to this right by providing for participation of third participants during the entirety of the oral hearing, while third parties meet with panels only in a separate session at the first substantive meeting. Third participants, however, are not the main parties to a dispute. Rather, they have a systemic interest in the interpretation of the provisions of the covered agreements that may be at issue in an appeal. Although their views on the questions of legal interpretation that come before the Appellate Body are always valuable and thoroughly considered, these issues of legal interpretation are not inherently confidential. Nor is it a matter for the third participants to determine how the protection of confidentiality in the relationship between the participants and the Appellate Body is best dealt with. In order to sustain their objections to public observation of the oral hearing, third participants would have to identify a specific interest in their relationship with the Appellate Body that would be adversely affected if we were to authorize the participants’ request — in this case, we can discern no such interests.”(2250)

(b)     The 2003 amendment of Rule 24 and Rule 27 (3) to allow for “passive participation”

1443.     Rule 24 of the Working Procedures originally provided that “[a]ny third party may file a written submission, stating its intention to participate as a third participant in the appeal and containing the grounds and legal arguments in support of its position, within 25 days after the date of the filing of the Notice of Appeal”.(2251) Rule 27(3) of the Working Procedures originally provided that “[a]ny third participant who has filed a submission pursuant to Rule 24 may appear to make oral arguments or presentations at the oral hearing”.(2252)

1444.     The Appellate Body subsequently amended Rule 24 and Rule 27(3) (the amendment took effect 1 May 2003). The Appellate Body explained the reasons behind the amendments in a communication dated 19 December 2002:

“The experience of the first six years of operation of the Appellate Body revealed an unintended rigidity in the Working Procedures with respect to the rules relating to third party participation in the oral hearing. Specifically, the Working Procedures did not contemplate participation in the oral hearing by third parties that had not filed a written submission within 25 days of the filing of the Notice of Appeal. Many Members expressed the view that the opportunity to attend the oral hearing and be heard by the Appellate Body should not depend on the filing of a written submission. The Appellate Body’s practice of allowing “passive participation” at oral hearings went some way towards meeting these concerns, although certain Members felt that more flexibility was desirable.

 

The issue of third party participation in the oral hearing arose regularly in appeals in recent years, and several Members continued to press for elimination of the rule requiring the filing of a written submission. We agreed with Members that a more flexible approach was desirable and sought to respond to Members’ requests for change with specifically targeted amendments to Rules 1, 24 and 27 of the Working Procedures.(2253)

16.     Rule 25: transmittal of the record

(a)     Request to delay the transmittal to the Appellate Body of certain information

1445.     In EC and certain member States — Large Civil Aircraft, the Division declined the participants’ joint request that it ask the Panel to delay the transmittal to the Appellate Body of any information classified as BCI or HSBI on the Panel record until after the Appellate Body had adopted additional measures regarding BCI and HSBI. The Division noted that Rule 25 of the Working Procedures requires that the panel record be transmitted to the Appellate Body upon the filing of a Notice of Appeal. However, the Division, taking into consideration the participants’ concern with regard to the protection of BCI and HSBI contained in the Panel record decided, on a provisional basis, to provide additional protection to all BCI and HSBI transmitted to the Appellate Body during the period leading up to the definitive ruling on the participants’ request for additional procedures.(2254)

(b)     Correspondence not contained in the record of the panel proceedings

1446.     In US — Zeroing (EC) (Article 21.5 — EC), the European Communities submitted an exhibit containing certain e-mails. The United States objected to the submission of this exhibit and claimed that it was a new piece of evidence that could not be considered in the appellate proceedings. The European Communities responded that the exhibit had already been transmitted to the Appellate Body as part of the record of the Panel proceedings because, under Rule 25(2) of the Working Procedures, “[t]he complete record of the panel proceeding includes … the correspondence relating to the panel dispute between the panel or the WTO Secretariat and the parties to the dispute or the third parties”. The Appellate Body agreed with the United States, and stated that:

“Having examined the record of the Panel proceedings, transmitted to the Appellate Body under Rule 25(1) of the Working Procedures, we have found that it does not contain the exchange of e-mails referred to in Exhibit EC-62. Accordingly, we conclude that Exhibit-62 is new evidence that cannot be considered at the appellate stage.”(2255)

17.     Rule 26: working schedule

(a)     Extension of deadline for participants’ or third participants’ submissions

1447.     See Rule 16(2).

(b)     Extension of deadline for circulation of Appellate Body Report

1448.     See Article 17.5 of the DSU.

18.     Rule 27: oral hearing

(a)     Authority to organize and conduct oral hearings

1449.     In US/Canada — Continued Suspension, the Appellate Body granted a request by the participants to allow public observation of the oral hearing. In that context, the Appellate Body stated:

“We note that the DSU does not specifically provide for an oral hearing at the appellate stage. The oral hearing was instituted by the Appellate Body in its Working Procedures, which were drawn up pursuant to Article 17.9 of the DSU. The conduct and organization of the oral hearing falls within the authority of the Appellate Body (compétence de la compétence) pursuant to Rule 27 of the Working Procedures. Thus, the Appellate Body has the power to exercise control over the conduct of the oral hearing …”(2256)

(b)     Public observation of oral hearings

1450.     The Appellate Body has authorized public observation of oral hearings in a number of appellate proceedings, upon joint request of the participants. In EC and certain member States — Large Civil Aircraft, the Appellate Body recalled that:

“In its rulings, the Appellate Body has held that it has the power to authorize such requests by the participants, provided that this does not affect the confidentiality in the relationship between the third participants and the Appellate Body, or impair the integrity of the appellate process.

 

The Appellate Body has also noted that public observation in previous cases operated smoothly, and that the rights of third participants who did not wish to have their oral statements made subject to public observation were fully protected.”(2257)

1451.     In appeals in which the Appellate Body has authorized public observation of the oral hearing, this has been done by simultaneous transmission to the public in a separate room via closed-circuit television broadcast.(2258) Oral statements and responses to questions by third participants wishing to maintain the confidentiality of their submissions were not subject to public observation.(2259)

1452.     The following table provides information on Appellate Body hearings opened to the public. In some cases the entirely of the hearing was open to public observation, whereas in others only a portion of the hearing (e.g. opening oral statements) was opened to public observation. It covers those appellate proceedings in which the Appellate Body report was circulated prior to 30 September 2011.

DS No. Case Dates Reference
DS320, DS321 US/Canada — Continued Suspension 28-29 July 2008 Appellate Body Reports, US/Canada — Continued Suspension, para. 32, Annex IV
DS27 EC — Bananas III (Article 21.5 — Ecuador II) /EC — Bananas III (Article 21.5 — US) 16-17 October 2008 Appellate Body Reports, EC — Bananas III (Article 21.5Ecuador II) 1 EC — Bananas III (Article 21.5 — US), para. 28, Annex IV
DS350 US — Continued Zeroing 11-12 December 2008 Appellate Body Report, US — Continued Zeroing, para. 9, Annex III
DS294 US — Zeroing (EC) (Article 21.5 — EC) 23-24 March 2009 Appellate Body Report, US — Zeroing (EC) (Article 21.5 — EC), para. 14, Annex III
DS322 US — Zeroing (Japan) (Article 21.5Japan) 29-30 June 2009 Appellate Body Report, US — Zeroing (Japan) (Article 21.5Japan), para. 18, Annex II
DS367 Australia — Apples 11-12 October 2010 Appellate Body Report, Australia — Apples, para. 9, Annex III
DS316 EC and certain member States — Large Civil Aircraft 11-17 November 9-14 December 2010 Appellate Body Report, EC and certain member States — Large Civil Aircraft, para. 22, Annex IV

(c)     The 2003 amendment of Rule 27(3) to allow for “passive participation” by third participants at oral hearings

1453. See Rule 24 of the Working Procedures.

(d)     Consultation with the disputing parties regarding the date of the oral hearing

1454.     In a communication to the DSB Chairman dated 7 October 2004 explaining certain amendments to the Working Procedures, the Appellate Body stated that:

“We note the suggestion of certain delegations that a Division should consult the parties to a dispute before fixing the date of the oral hearing. Although we believe that it is neither efficient nor appropriate to inscribe in the Working Procedures a specific requirement for consultation on the working schedule for each appeal, we observe that it is always possible for delegations to make the Secretariat aware, at the outset of an appeal, of any constraints regarding the timing of the oral hearing, in order to enable the Division to be cognizant of such matters when preparing the working schedule.”(2260)

(e)     Multiple sessions / hearings

1455.     In EC and certain member States — Large Civil Aircraft, the oral hearing in this appeal took place in two sessions: the first on 11-17 November and the second on 9-14 December 2010.(2261)

1456.     In US — Large Civil Aircraft (2nd complaint), the Appellate Body communicated that it would hold the first session of the oral hearing in August 2011 and the second in October 2011.(2262)

19.     Rule 28: written responses

(a)     Post-hearing memoranda and responses to questions

1457.     In US — Gasoline, further to the oral hearing, the participants and third participants were invited to provide, and did provide, the Appellate Body and each other with final written statements of their respective positions.(2263)

1458.     In Japan — Alcoholic Beverages II, the parties answered most of the Appellate Body’s questions orally at the hearing. They also answered a number in writing. The Division hearing the appeal gave each participant an opportunity to respond to the written post-hearing memoranda of the other participants.(2264)

1459.     In US — Underwear, the participants and third participant to the oral hearing did not take advantage of an invitation by the Division hearing the appeal to submit post-hearing memoranda. The United States later submitted a written clarification and amplification of its oral response to one of the Division’s questions. The next day, Costa Rica responded in writing to the United States’ clarification.(2265)

1460.     In EC — Poultry, at the request of the Division hearing the appeal, the participants and third participants submitted written post-hearing memoranda on particular issues relating to the appeal. The participants submitted their respective written replies to these post-hearing memoranda.(2266)

(b)     Appellate Body requests for additional memoranda / submissions on particular issues

1461.     In US — Shrimp, at the invitation of the Appellate Body, the United States, India, Pakistan, Thailand and Malaysia filed additional submissions on certain issues arising under Article XX(b) and Article XX(g) of the GATT 1994.(2267)

1462.     In Canada — Patent Term, at the request of the Appellate Body Division hearing the appeal, the participants submitted additional memoranda on certain issues of legal interpretation arising under Articles 70.1 and 70.2 of the TRIPS Agreement. The Division afforded each participant an opportunity to respond to the additional memoranda submitted by the other participant.(2268)

1463.     In US — Section 211 Appropriations Act, the Division hearing the appeal requested that the participants submit additional written memoranda on the interpretation by domestic courts of Article 6quinquies of the Paris Convention (1967), or the interpretation by domestic courts of legislation incorporating Article 6quinquies. Both participants filed the additional written memoranda and were given an opportunity to respond to these memoranda at the oral hearing.(2269)

1464.     In US — FSC (Article 21.5 — EC), at the oral hearing, the Division requested the United States to submit in writing certain of its responses to questioning. The Division also authorized the European Communities and the third participants, if they wished, to respond in writing by 30 November 2001.(2270)

1465.     In US — Softwood Lumber IV (Article 21.5 — Canada), the Appellate Body Division hearing the appeal requested the United States to submit an additional written memorandum explaining certain aspects of relevant United States laws and procedures. The United States filed an additional written memorandum on 5 October 2005. On 10 October 2005, Canada submitted a written response to the United States’ additional written memorandum. The Division allowed the third participants additional time during the presentation of their oral statements at the hearing to respond to these additional memoranda.(2271)

1466.     In EC and certain member States — Large Civil Aircraft, at the first session of the hearing, the Division distributed written questions to the participants and third participants in order to clarify certain factual aspects of the Panel’s findings concerning the evolution of the European Aeronautic Defence and Space Company NV, and received written responses from the participants at the hearing. In addition, upon the Division’s invitation to the participants and third participants, the European Union, the United States, Australia, Brazil, China, and Japan submitted additional memoranda regarding the issues discussed during the first session of the hearing. The European Union, the United States, and Brazil submitted comments on the additional memoranda.(2272)

20.     Rule 29: failure to appear

1467.     In US/Canada — Continued Suspension, the Appellate Body referred to Rule 29 of the Working Procedures and stated that:

“[T]he DSU does not provide the means to compel any party to participate in any dispute settlement proceedings. A defending party who refuses to participate in dispute settlement proceedings will lose the opportunity to defend its position and will risk a finding in favour of the complaining party that has established a prima facie case.”(2273)

21.     Rule 30: withdrawal of appeal

(a)     Simple withdrawal of entire appeal

1468.     In India — Autos, India withdrew its appeal and did not file a new one.(2274)

(b)     Withdrawal of “conditional” appeal

1469.     In EC and certain member States — Large Civil Aircraft, the European Union appealed certain findings by the Panel on the condition that the United States appealed certain other findings of the Panel. As the conditions on which these appeals were premised did not arise, the European Union withdrew these conditional appeals pursuant to Rule 30(1) of the Working Procedures.(2275)

(c)     Withdrawal and re-filing of appeal

(i) For scheduling reasons

1470.     In US — FSC, the Appellate Body explained that:

“For scheduling reasons, and pursuant to an agreement it had reached with the European Communities, on 2 November 1999 the United States notified the Chairman of the Appellate Body and the Chairman of the DSB of its decision to withdraw its 28 October 1999 notice of appeal. This withdrawal was made pursuant to Rule 30(1) of the Working Procedures, and was conditional upon the right of the United States to file a new notice of appeal pursuant to Rule 20 of the Working Procedures. On 26 November 1999, the United States once again notified the DSB of its intention to appeal certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the DSU, and filed a Notice of Appeal pursuant to Rule 20 of the Working Procedures.”(2276)

1471.     Likewise, in US — Line Pipe, the Appellate Body explained that:

“For scheduling reasons, on 13 November 2001, the United States notified the Chairman of the Appellate Body and the Chairman of the DSB of its decision to withdraw the notice of appeal filed on 6 November 2001. The withdrawal was made pursuant to Rule 30(1) of the Working Procedures, and was conditional on the right to file a new notice of appeal. On 19 November 2001, the United States again notified the DSB of its intention to appeal certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the DSU, and filed a new notice of appeal pursuant to Rule 20 of the Working Procedures.”(2277)

1472.     In US — Softwood Lumber IV, the Appellate Body stated that:

“On 3 October 2003, for scheduling reasons, the United States withdrew its Notice of Appeal pursuant to Rule 30 of the Working Procedures, conditional on its right to re-file the Notice of Appeal at a later date. On 21 October 2003, the United States re-filed a substantively identical Notice of Appeal pursuant to Rule 20 of the Working Procedures.”(2278)

(ii) As a means of’ amending a Notice of Appeal

1473.     In 2005, the Working Procedures were amended to include Rule 23bis (“Amending Notices of Appeal)”.

1474.     Prior to the introduction of Rule 23bis, the Working Procedures did not explicitly allow an appellant to amend its Notice of Appeal. The means through which the European Communities sought to do so in EC — Sardines (2002) was by withdrawing its original Notice of Appeal, and re-filing a new one immediately thereafter.(2279) In EC — Sardines, the appellee (Peru) objected to the appellant (European Communities) “conditionally” withdrawing its Notice of Appeal and filing a new one. In that case, the Appellate Body considered that the manner in which the European Communities had proceeded was reasonable and permissible. Among other things, the Appellate Body stated that:

“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’.(2280) 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.

 

 

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.”(2281)

22.     Rule 31: accelerated procedures in prohibited subsidies cases

1475.     In 2010, the Appellate Body made certain amendments to the Working Procedures. In a 27 July 2010 communication to the Chairman of the DSB explaining the changes, the Appellate Body noted that:

“To date, no appeal has ever been conducted under the accelerated timeframes set out for prohibited subsidies appeals. Although one Member expressed concern regarding the impractical nature of certain deadlines in prohibited subsidies appeals — notably for third participants — we believe, based on past experience, that the infrequency with which this issue appears justifies leaving Annex I as proposed above. Any difficulties that may arise in a specific appeal involving prohibited subsidies could be addressed on a case-by-case basis under Rule 16 of the Working Procedures.(2282)

 

XXXIII. Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes   back to top

A. Text of the Rules of Conduct(2283)

Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes

I.    PREAMBLE

 

Members,

         Recalling that on 15 April 1994 in Marrakesh, Ministers welcomed the stronger and clearer legal framework they had adopted for the conduct of international trade, including a more effective and reliable dispute settlement mechanism;

         Recognizing the importance of full adherence to the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”) and the principles for the management of disputes applied under Articles XXII and XXIII of GATT 1947, as further elaborated and modified by the DSU;

         Affirming that the operation of the DSU would be strengthened by rules of conduct designed to maintain the integrity, impartiality and confidentiality of proceedings conducted under the DSU thereby enhancing confidence in the new dispute settlement mechanism;

         Hereby establish the following Rules of Conduct.

II.    Governing Principle

 

1.     Each person covered by these Rules (as defined in paragraph 1 of Section IV below and hereinafter called “covered person”) shall be independent and impartial, shall avoid direct or indirect conflicts of interest and shall respect the confidentiality of proceedings of bodies pursuant to the dispute settlement mechanism, so that through the observance of such standards of conduct the integrity and impartiality of that mechanism are preserved. These Rules shall in no way modify the rights and obligations of Members under the DSU nor the rules and procedures therein.

 

III.    Observance of the Governing Principle

 

1.      To ensure the observance of the Governing Principle of these Rules, each covered person is expected (1) to adhere strictly to the provisions of the DSU; (2) to disclose the existence or development of any interest, relationship or matter that that person could reasonably be expected to know and that is likely to affect, or give rise to justifiable doubts as to, that person’s independence or impartiality; and (3) to take due care in the performance of their duties to fulfil these expectations, including through avoidance of any direct or indirect conflicts of interest in respect of the subject matter of the proceedings.

 

2.      Pursuant to the Governing Principle, each covered person, shall be independent and impartial, and shall maintain confidentiality. Moreover, such persons shall consider only issues raised in, and necessary to fulfil their responsibilities within, the dispute settlement proceeding and shall not delegate this responsibility to any other person. Such person shall not incur any obligation or accept any benefit that would in anyway interfere with, or which could give rise to, justifiable doubts as to the proper performance of that person’s dispute settlement duties.

 

IV.    Scope

 

1.      These Rules shall apply, as specified in the text, to each person serving: (a) on a panel; (b) on the Standing Appellate Body; (c) as an arbitrator pursuant to the provisions mentioned in Annex “1a”; or (d) as an expert participating in the dispute settlement mechanism pursuant to the provisions mentioned in Annex “1b”. These Rules shall also apply, as specified in this text and the relevant provisions of the Staff Regulations, to those members of the Secretariat called upon to assist the panel in accordance with Article 27.1 of the DSU or to assist in formal arbitration proceedings pursuant to Annex “1a”; to the Chairman of the Textiles Monitoring Body (hereinafter called “TMB”) and other members of the TMB Secretariat called upon to assist the TMB in formulating recommendations, findings or observations pursuant to the WTO Agreement on Textiles and Clothing; and to Standing Appellate Body support staff called upon to provide the Standing Appellate Body with administrative or legal support in accordance with Article 17.7 of the DSU (hereinafter “Member of the Secretariat or Standing Appellate Body support staff”), reflecting their acceptance of established norms regulating the conduct of such persons as international civil servants and the Governing Principle of these Rules.

 

2.      The application of these Rules shall not in any way impede the Secretariat’s discharge of its responsibility to continue to respond to Members’ requests for assistance and information.

 

3.      These Rules shall apply to the members of the TMB to the extent prescribed in Section V.

 

V.      Textiles Monitoring Body

 

1.      Members of the TMB shall discharge their functions on an ad personam basis, in accordance with the requirement of Article 8.1 of the Agreement on Textiles and Clothing, as further elaborated in the working procedures of the TMB, so as to preserve the integrity and impartiality of its proceedings.(1)

 

(footnote original) 1 These working procedures, as adopted by the TMB on 26 July 1995 (G/TMB/R/1), currently include, inter alia, the following language in paragraph 1.4: “In discharging their functions in accordance with paragraph 1.1 above, the TMB members and alternates shall undertake not to solicit, accept or act upon instructions from governments, nor to be influenced by any other organisations or undue extraneous factors. They shall disclose to the Chairman any information that they may consider likely to impede their capacity to discharge their functions on an ad personam basis. Should serious doubts arise during the deliberations of the TMB regarding the ability of a TMB member to act on an ad personam basis, they shall be communicated to the Chairman. The Chairman shall deal with the particular matter as necessary”.

 

 VI.      Self-Disclosure Requirements by Covered Persons

 

1.      (a)    Each person requested to serve on a panel, on the Standing Appellate Body, as an arbitrator, or as an expert shall, at the time of the request, receive from the Secretariat these Rules, which include an Illustrative List (Annex 2) of examples of the matters subject to disclosure.

 

       (b)    Any member of the Secretariat described in paragraph IV:1, who may expect to be called upon to assist in a dispute, and Standing Appellate Body support staff, shall be familiar with these Rules.

 

2.     As set out in paragraph VI:4 below, all covered persons described in paragraph VI.1(a) and VI.1(b) shall disclose any information that could reasonably be expected to be known to them at the time which, coming within the scope of the Governing Principle of these Rules, is likely to affect or give rise to justifiable doubts as to their independence or impartiality. These disclosures include the type of information described in the Illustrative List, if relevant.

 

3.      These disclosure requirements shall not extend to the identification of matters whose relevance to the issues to be considered in the proceedings would be insignificant. They shall take into account the need to respect the personal privacy of those to whom these Rules apply and shall not be so administratively burdensome as to make it impracticable for otherwise qualified persons to serve on panels, the Standing Appellate Body, or in other dispute settlement roles.

 

4.      (a)    All panelists, arbitrators and experts, prior to confirmation of their appointment, shall complete the form at Annex 3 of these Rules. Such information would be disclosed to the Chair of the Dispute Settlement Body (“DSB”) for consideration by the parties to the dispute.

 

   (b)     (i) Persons serving on the Standing Appellate Body who, through rotation, are selected to hear the appeal of a particular panel case, shall review the factual portion of the Panel report and complete the form at Annex 3. Such information would be disclosed to the Standing Appellate Body for its consideration whether the member concerned should hear a particular appeal.

 

           (ii) Standing Appellate Body support staff shall disclose any relevant matter to the Standing Appellate Body, for its consideration in deciding on the assignment of staff to assist in a particular appeal.

 

   (c)     When considered to assist in a dispute, members of the Secretariat shall disclose to the Director-General of the WTO the information required under paragraph VI:2 of these Rules and any other relevant information required under the Staff Regulations, including the information described in the footnote.(**)

 

(footnote original) ** Pending adoption of the Staff Regulations, members of the Secretariat shall make disclosures to the Director-General in accordance with the following draft provision to be included in the Staff Regulations: 

 

        “When paragraph VI:4(c) of the Rules of Conduct for the DSU) is applicable, members of the Secretariat would disclose to the Director-General of the WTO the information required in paragraph VI:2 of those Rules, as well as any information regarding their participation in earlier formal consideration of the specific measure at issue in a dispute under any provisions of the WTO Agreement, including through formal legal advice under Article 27.2 of the DSU), as well as any involvement with the dispute as an official of a WTO Member government or otherwise professionally, before having joined the Secretariat.

 

        The Director-General shall consider any such disclosures in deciding on the assignment of members of the Secretariat to assist in a dispute.

 

        When the Director-General, in the light of his consideration, including of available Secretariat resources, decides that a potential conflict of interest is not sufficiently material to warrant non-assignment of a particular member of the Secretariat to assist in a dispute, the Director-General shall inform the panel of his decision and of the relevant supporting information.”

 

5.      During a dispute, each covered person shall also disclose any new information relevant to paragraph VI:2 above at the earliest time they become aware of it.

 

6.      The Chair of the DSB, the Secretariat, parties to the dispute, and other individuals involved in the dispute settlement mechanism shall maintain the confidentiality of any information revealed through this disclosure process, even after the panel process and its enforcement procedures, if any, are completed.

 

VII.      Confidentiality

 

1.      Each covered person shall at all times maintain the confidentiality of dispute settlement deliberations and proceedings together with any information identified by a party as confidential. No covered person shall at any time use such information acquired during such deliberations and proceedings to gain personal advantage or advantage for others.

 

2.      During the proceedings, no covered person shall engage in ex parte contacts concerning matters under consideration. Subject to paragraph VII:1, no covered person shall make any statements on such proceedings or the issues in dispute in which that person is participating, until the report of the panel or the Standing Appellate Body has been derestricted.

 

VIII.     Procedures Concerning Subsequent Disclosure and Possible Material Violations

 

1.     Any party to a dispute, conducted pursuant to the WTO Agreement, who possesses or comes into possession of evidence of a material violation of the obligations of independence, impartiality or confidentiality or the avoidance of direct or indirect conflicts of interest by covered persons which may impair the integrity, impartiality or confidentiality of the dispute settlement mechanism, shall at the earliest possible time and on a confidential basis, submit such evidence to the Chair of the DSB, the Director-General or the Standing Appellate Body, as appropriate according to the respective procedures detailed in paragraphs VIII:5 to VIII:17 below, in a written statement specifying the relevant facts and circumstances. Other Members who possess or come into possession of such evidence, may provide such evidence to the parties to the dispute in the interest of maintaining the integrity and impartiality of the dispute settlement mechanism.

 

2.     When evidence as described in paragraph VIII:1 is based on an alleged failure of a covered person to disclose a relevant interest, relationship or matter, that failure to disclose, as such, shall not be a sufficient ground for disqualification unless there is also evidence of a material violation of the obligations of independence, impartiality, confidentiality or the avoidance of direct or indirect conflicts of interests and that the integrity, impartiality or confidentiality of the dispute settlement mechanism would be impaired thereby.

 

3.     When such evidence is not provided at the earliest practicable time, the party submitting the evidence shall explain why it did not do so earlier and this explanation shall be taken into account in the procedures initiated in paragraph VIII:1.

 

4.     Following the submission of such evidence to the Chair of the DSB, the Director-General of the WTO or the Standing Appellate Body, as specified below, the procedures outlined in paragraphs VIII:5 to VIII:17 below shall be completed within fifteen working days.

 

Panelists, Arbitrators, Experts

 

5.     If the covered person who is the subject of the evidence is a panelist, an arbitrator or an expert, the party shall provide such evidence to the Chair of the DSB.

 

6.     Upon receipt of the evidence referred to in paragraphs VIII:1 and VIII:2, the Chair of the DSB shall forthwith provide the evidence to the person who is the subject of such evidence, for consideration by the latter.

 

7.     If, after having consulted with the person concerned, the matter is not resolved, the Chair of the DSB shall forthwith provide all the evidence, and any additional information from the person concerned, to the parties to the dispute. If the person concerned resigns, the Chair of the DSB shall inform the parties to the dispute and, as the case may be, the panelists, the arbitrator(s) or experts.

 

8.     In all cases, the Chair of the DSB, in consultation with the Director-General and a sufficient number of Chairs of the relevant Council or Councils to provide an odd number, and after having provided a reasonable opportunity for the views of the person concerned and the parties to the dispute to be heard, would decide whether a material violation of these Rules as referred to in paragraphs VIII:1 and VIII:2 above has occurred. Where the parties agree that a material violation of these Rules has occurred, it would be expected that, consistent with maintaining the integrity of the dispute settlement mechanism, the disqualification of the person concerned would be confirmed.

 

9.     The person who is the subject of the evidence shall continue to participate in the consideration of the dispute unless it is decided that a material violation of these Rules has occurred.

 

10.     The Chair of the DSB shall thereafter take the necessary steps for the appointment of the person who is the subject of the evidence to be formally revoked, or excused from the dispute as the case may be, as of that time.

 

Secretariat

 

11.     If the covered person who is the subject of the evidence is a member of the Secretariat, the party shall only provide the evidence to the Director-General of the WTO, who shall forthwith provide the evidence to the person who is the subject of such evidence and shall further inform the other party or parties to the dispute and the panel.

 

12.     It shall be for the Director-General to take any appropriate action in accordance with the Staff Regulations.(***)

 

(footnote original) *** Pending adoption of the Staff Regulations, the Director-General would act in accordance with the following draft provision for the Staff Regulations: “If paragraph VIII:11 of the Rules of Conduct for the DSU governing the settlement of disputes is invoked, the Director-General shall consult with the person who is the subject of the evidence and the panel and shall, if necessary, take appropriate disciplinary action”. 

 

13.     The Director-General shall inform the parties to the dispute, the panel and the Chair of the DSB of his decision, together with relevant supporting information.

 

Standing Appellate Body

 

14.     If the covered person who is the subject of the evidence is a member of the Standing Appellate Body or of the Standing Appellate Body support staff, the party shall provide the evidence to the other party to the dispute and the evidence shall thereafter be provided to the Standing Appellate Body.

 

15.     Upon receipt of the evidence referred to in paragraphs VIII:1 and VIII:2 above, the Standing Appellate Body shall forthwith provide it to the person who is the subject of such evidence, for consideration by the latter.

 

16.     It shall be for the Standing Appellate Body to take any appropriate action after having provided a reasonable opportunity for the views of the person concerned and the parties to the dispute to be heard.

 

17.     The Standing Appellate Body shall inform the parties to the dispute and the Chair of the DSB of its decision, together with relevant supporting information.

***

18.     Following completion of the procedures in paragraphs VIII:5 to VIII:17, if the appointment of a covered person, other than a member of the Standing Appellate Body, is revoked or that person is excused or resigns, the procedures specified in the DSU for initial appointment shall be followed for appointment of a replacement, but the time-periods shall be half those specified in the DSU.(**** The member of the Standing Appellate Body who, under that Body’s rules, would next be selected through rotation to consider the dispute, would automatically be assigned to the appeal. The panel, members of the Standing Appellate Body hearing the appeal, or the arbitrator, as the case may be, may then decide after consulting with the parties to the dispute, on any necessary modifications to their working procedures or proposed timetable.

 

(footnote original) **** Appropriate adjustments would be made in the case of appointments pursuant to the Agreement on Subsidies and Countervailing Measures. 

 

19.     All covered persons and Members concerned shall resolve matters involving possible material violations of these Rules as expeditiously as possible so as not to delay the completion of proceedings, as provided in the DSU.

 

20.     Except to the extent strictly necessary to carry out this decision, all information concerning possible or actual material violations of these Rules shall be kept confidential.

 

IX. Review

 

1.     These Rules of Conduct shall be reviewed within two years of their adoption and a decision shall be taken by the DSB as to whether to continue, modify or terminate these Rules.

ANNEX 1a

Arbitrators acting pursuant to the following provisions:

 

ANNEX 1b

Experts advising or providing information pursuant to the following provisions:

 

ANNEX 2

ILLUSTRATIVE LIST OF INFORMATION TO BE DISCLOSED

     This list contains examples of information of the type that a person called upon to serve in a dispute should disclose pursuant to the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes.

 

     Each covered person, as defined in Section IV: 1 of these Rules of Conduct has a continuing duty to disclose the information described in Section VI:2 of these Rules which may include the following:

 

(a)     financial interests (e.g. investments, loans, shares, interests, other debts); business interests (e.g. directorship or other contractual interests); and property interests relevant to the dispute in question;

 

(b)     professional interests (e.g. a past or present relationship with private clients, or any interests the person may have in domestic or international proceedings, and their implications, where these involve issues similar to those addressed in the dispute in question);

 

(c)     other active interests (e.g. active participation in public interest groups or other organisations which may have a declared agenda relevant to the dispute in question);

 

(d)     considered statements of personal opinion on issues relevant to the dispute in question (e.g. publications, public statements);

 

(e)     employment or family interests (e.g. the possibility of any indirect advantage or any likelihood of pressure which could arise from their employer, business associates or immediate family members).

ANNEX 3

Dispute Number: ________

WORLD TRADE ORGANIZATION DISCLOSURE FORM

    I have read the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and the Rules of Conduct for the DSU. I understand my continuing duty, while participating in the dispute settlement mechanism, and until such time as the Dispute Settlement Body (DSB) makes a decision on adoption of a report relating to the proceeding or notes its settlement, to disclose herewith and in future any information likely to affect my independence or impartiality, or which could give rise to justifiable doubts as to the integrity and impartiality of the dispute settlement mechanism; and to respect my obligations regarding the confidentiality of dispute settlement proceedings.

 

Signed:

 

Dated:

 
B. Interpretation and Application of the Rules of Conduct

1.       Section I: establishment of the Rules of Conduct

1476.      The DSB adopted the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes(2284) at its meeting on 3 December 1996.(2285)

2.      Section II: governing principle

(a)      “shall be independent and impartial”

(i) Scientific experts

1477.      In US — Shrimp, the Panel selected five scientific experts to advise it on scientific and technical issues, pursuant to Article 13 of the DSU. The Panel noted that:

“[I]n their disclosure forms, three of the proposed experts disclosed what might be considered to be potential conflicts of interest. However, the Panel decided to confirm their appointments being of the view that the disclosed information was not of such a nature as to prevent the individuals concerned from being impartial in providing the scientific information expected of them. The Panel has also taken into account the disclosed information when evaluating the answers provided. The Panel underlined that, in making its choice, it had been guided primarily by the need to gather expertise of the best quality and covering as wide a field as possible. In the small community of sea turtle specialists, it was difficult-if not impossible-to reconcile this need with an agreement by all the parties to the dispute on each and every individual concerned.”(2286)

1478.      In US/Canada — Continued Suspension, the Appellate Body found that the institutional affiliation of two experts appointed by the Panel compromised their appointment and thereby the adjudicative independence and impartiality of the Panel. The Appellate Body focused its analysis largely on Sections II and VI of the Rules of Conduct. The Appellate Body began its analysis by discussing the relationship between “due process” and the Rules of Conduct, including Section II:

“These due process considerations are reflected in the Rules of Conduct. Section II (Governing Principle) of the Rules of Conduct provides that all covered persons, such as panelists and experts advising panels:

 

…shall be independent and impartial, shall avoid direct or indirect conflicts of interest and shall respect the confidentiality of proceedings of bodies pursuant to the dispute settlement mechanism, so that through the observance of such standards of conduct the integrity and impartiality of that mechanism are preserved.

 

Scientific experts and the manner in which their opinions are solicited and evaluated can have a significant bearing on a panel’s consideration of the evidence and its review of a domestic measure, especially in cases like this one involving highly complex scientific issues. Fairness and impartiality in the decision-making process are fundamental guarantees of due process. Those guarantees would not be respected where the decision-makers appoint and consult experts who are not independent or impartial. Such appointments and consultations compromise a panel’s ability to act as an independent adjudicator. For these reasons, we agree with the view of the European Communities that the protection of due process applies to a panel’s consultations with experts. This due process protection applies to the process for selecting experts and to the panel’s consultations with the experts, and continues throughout the proceedings.”(2287)

1479.      The Appellate Body found that:

“[T]he standard to be applied by panels when selecting experts is whether there is an objective basis to conclude that an expert’s independence or impartiality is likely to be affected or there are justifiable doubts about that expert’s independence or impartiality.”(2288)

1480.      After considering the evidence relating to two of the appointed experts’ institutional affiliation, the Appellate Body concluded as follows:

“We understand that panels often face practical difficulties in selecting experts who have the required level of expertise and whose selection is not objected to by the parties. We do not wish to make the expert selection process more difficult than it may already be. However, experts consulted by a panel can have a decisive role in a case, especially when it involves highly complex scientific questions such as this one. The Panel in this case said “the role of the experts was to act as an ‘interface’ between the scientific evidence and the Panel, so as to allow it to perform its task as the trier of fact.” Experts appointed by a panel can significantly influence the decision-making process. If a panel does not ensure that the requirements of independence and impartiality are respected in its consultations with the experts, this can compromise the fairness of the proceedings and the impartiality of the decision-making. In these circumstances, the practical difficulties that a panel may encounter in selecting experts cannot displace the need to ensure that the consultations with the experts respect the parties’ due process rights.

 

For these reasons, we consider that there was an objective basis to conclude that the institutional affiliation with JECFA of Drs. Boisseau and Boobis, and their participation in JECFA’s evaluations of the six hormones at issue, was likely to affect or give rise to justifiable doubts as to their independence or impartiality given that the evaluations conducted by JECFA lie at the heart of the controversy between the parties. The appointment and consultations with Drs. Boisseau and Boobis compromised the adjudicative independence and impartiality of the Panel. Therefore, we find that the Panel infringed the European Communities’ due process rights as a result of the Panel having consulted with Drs. Boisseau and Boobis as scientific experts.”(2289)

1481.      In Australia — Apples, Australia objected the selection of one of the experts on the grounds that this expert had a connection with the government of New Zealand. The Panel concluded that “nothing in the objection raised by Australia gave any indication of real or perceived conflicts of interest or any other situation that would have affected the expert’s independence and impartiality”.(2290) The Panel stated that:

“A panel is responsible for ensuring that the selected experts have the necessary qualifications and expertise, and comply with the requirements for independence, impartiality and avoidance of conflicts of interest. Conversely, it is not enough for a party to simply assert an objection regarding the selection of a particular expert. Any party raising such an objection is expected to explain in what manner the expert’s independence or impartiality have been or may be compromised.

 

It is to be expected that in any specialized area of science, the few knowledgeable experts will frequently engage with each other and may participate in joint research projects, in meetings and conferences, and joint publications. Participation in “joint research projects and publications” are an indication of the qualifications and specialized scientific expertise that, in accordance with its Working Procedures, the Panel was to use as a basis to select scientific experts. Per se, this fact is not enough to call into question a researcher’s independence and impartiality, nor is it necessarily evidence of a connection with the government of a party. Nor is the fact that some of those “joint research projects and publications” may be funded or supported by institutions associated with the government of a Member. This is particularly true, when, as this Panel’s considerable difficulty in identifying experts clearly demonstrates, there is a very small number of experts in the field in question. In such a situation it is all the more likely that “all of the world’s experts” will work and collaborate in some way at one time or another. Moreover, the fact that a scientific project or publication is funded by a private organization or a governmental institution is not in itself a reason to call into question the results of the research.

 

As noted above, the Panel is responsible of enforcing in its proceedings the standards of independence and impartiality contained in the Rules of Conduct for the DSU. Notwithstanding this fact, in the present case, as the party making an objection to the selection of an expert proposed by the Panel, it was Australia’s burden to make the case that Dr Cross’s participation in a joint research project and publication with researchers from HortResearch New Zealand would call into question Dr Cross’s independence and impartiality, or create actual or potential, direct or indirect, conflicts of interest. In the absence of any explanation or evidence from Australia in this regard, the Panel finds no facts to support the conclusion that Dr Cross’s participation in the research that led to the publication of the Suckling et al. (2007) paper, raises doubts regarding his independence and impartiality or his capacity to provide expert advice to this Panel.”(2291)

(ii)      Panellists

1482.      In Guatemala — Cement II, Guatemala alleged that the presence on the Panel of a member who served Guatemala — Cement I detracted from the “objectivity and independence” of the Panel. See paragraph 1494 below.

(b)      “shall in no way modify the rights and obligations of Members under the DSU”

1483.      In US/Canada — Continued Suspension, the Panel decided to grant a request to open the panel meetings with the parties and experts for public observation. After reviewing the pertinent provisions of the DSU, the Panel stated:

“Finally, the Panel notes that Article VII of the Rules of Conduct for the Understanding on the Rules and Procedures Governing the Settlement of Disputes provides that “[e]ach covered person shall at all times maintain the confidentiality of dispute settlement deliberations and proceedings together with any information identified by a party as confidential.” The Panel notes that such confidentiality obligation on the covered persons during the panel proceedings is applicable to the extent not inconsistent with the DSU provisions.(2292) In this case, the parties waived their right to confidentiality and requested open hearings. As demonstrated above, the Panel accordingly adapted its working procedures by departing from Appendix 3 in a manner consistent with the DSU provisions. Therefore, the Rules of Conduct should not be construed in a manner that would restrict the rights of Members under the DSU. The Panel concludes that Article VII does not prevent the Panel from holding hearings open to observation by the public.”(2293)

1484.      In EC and certain member States — Large Civil Aircraft, the Appellate Body stated that the DSU and the Rules of Conduct “establish a general confidentiality regime.(2294)

3.      Section IV: persons covered by the Rules of Conduct

(a)      Applicability of the Rules of Conduct to the Appellate Body, panels, Secretariat staff, and experts

1485.      In a communication dated 20 January 1997, the Chairman of the Appellate Body informed the Chairman of the Dispute Settlement Body that the Rules of Conduct had been directly incorporated into Annex II of the Working Procedures for Appellate Review.(2295)

1486.      In the context of several Appellate Body proceedings involving requests by the parties for additional procedures to protect confidential information, the Appellate Body has confirmed that Appellate Body Members, the staff of the Appellate Body Secretariat, and experts advising panels are subject to the confidentiality requirements in the Rules of Conduct.(2296)

1487.      Panels have made similar statements in respect of panellists, Secretariat staff and experts advising panels.(2297)

(b)      Non-applicability of the Rules of Conduct to legal counsel representing Members

1488.      In Korea — Alcoholic Beverages, Korea indicated that it wished to have the right to private counsel at the substantive meetings of the Panel. The United States expressed the view that the Panel should impose appropriate safeguards with respect to the conduct of such persons. The Panel decided to permit the appearance of private counsel, and stated that:

“The United States offered several suggestions for new rules and procedures in regard to these questions. However, in our view, the broader question of establishing further rules on confidentiality and possibly rules of conduct specifically directed at the role of nongovernmental advisors generally is a matter more appropriate for consideration by the Dispute Settlement Body and is not within the terms of reference of this Panel.”(2298)

1489.      In EC — Tariff Preferences, the European Communities raised several procedural issues concerning the joint representation of India and Paraguay by the Advisory Centre on WTO Law. In addressing this set of procedural issues, the Panel made no reference to the Rules of Conduct. It noted that:

“[T]he WTO has not itself elaborated any rules governing the ethical conduct of legal counsel representing WTO Members in particular disputes. Accordingly, the Panel considers there are no directly applicable legal provisions or guidelines to which it can have reference in order to resolve any issues raised in respect of the joint representation of a party and a third party.”(2299)

1490.      Nonetheless, the Panel considered that “it is incumbent on the Panel to clarify whether the ACWL’s joint representation of India and Paraguay poses any ethical concerns of the kind raised by the European Communities”.(2300) The Panel proceeded to discuss “the responsibility of legal counsel to ensure that it is not placing itself in a position of actual or potential conflict of interest when agreeing to represent, and thereafter representing, one or more WTO Members in a dispute under the DSU”.(2301)

4.      Section VI: self-disclosure requirements

1491.      In US/Canada — Continued Suspension, the Appellate Body found that the institutional affiliation of two experts appointed by the Panel compromised their appointment and thereby the adjudicative independence and impartiality of the Panel. In the course of its analysis, the Appellate Body offered a number of observations on Section VI of the Rules of Conduct. With respect to Section VI, the Appellate Body began by noting that:

“The requirements under Section VI of the Rules of Conduct relate, as the title indicates, to the self-disclosure obligation of covered persons, including experts. The Rules of Conduct do not provide for automatic exclusion of a covered person upon the disclosure of information pursuant to Section VI and the Illustrative List of Information to be Disclosed, which is attached to the Rules of Conduct as Annex 2. However, we fail to see on what basis a panel, presented with information likely to affect or give rise to justifiable doubts as to the independence or impartiality of an expert, could choose to consult such an expert.

 

We do not agree, however, with the European Communities’ characterization of Section VI.2 as setting out a “low” standard. On the contrary, we consider the standard set forth in Section VI.2 to be a strict one. Covered persons should be encouraged to disclose any information that may be relevant for purposes of ascertaining whether there may be justifiable doubts as to their independence or impartiality. Disclosure should not lead to automatic exclusion. Whether the disclosed information is likely to affect or give rise to justifiable doubts as to the person’s independence or impartiality must be objectively determined and properly substantiated. In the case of an expert, the panel should assess the disclosed information against information submitted by the parties or other information that may be available. It should then determine whether, on the correct facts, there is a likelihood that the expert’s independence and impartiality may be affected, or if justifiable doubts arise as to the expert’s independent or impartiality. If this is indeed the case, the panel must not appoint such person as an expert.”(2302)

1492.      In the case at hand, the Appellate Body found that while one of the appointed expert’s self-disclosure statement taken alone did not appear to fully comply with the requirements of Section VI.2 of the Rules of Conduct, when read together with the information contained in his curriculum vitae it amounted to sufficient disclosure:

“In his self-disclosure statement, Dr. Boisseau stated that “[h]aving worked as a civil servant, I have no conflict of interest which could prevent me to serve as a scientific expert to these two WTO panels.” The purpose of the self-disclosure statement is to reveal relevant facts that would allow the Panel to determine whether the information is likely to affect or give rise to justifiable doubts as to the expert’s independence or impartiality. Instead, Dr. Boisseau’s statement draws a conclusion on a matter that was for the Panel to decide. Dr. Boisseau’s statement does not identify whether he has “worked for, been funded by, or provided advice to, the industries concerned, or to domestic or international regulatory bodies involved in issues similar to those addressed in this dispute”. The statement does not mention his affiliation with JECFA, nor the fact that he was the Chairman or Vice-Chairman of JECFA panels that evaluated some of the hormones at issue in this dispute. Also, Dr. Boisseau’s position as a civil servant did not itself shield him from having a conflict of interest. Thus, we agree with the European Communities that Dr. Boisseau’s statement would not appear to comply fully with the requirements of Section VI.2 of the Rules of Conduct or paragraph 4 of the Experts Working Procedures adopted by the Panel.

 

We note that, in Canada’s view, the self-disclosure requirement was satisfied by the information provided on Dr. Boisseau’s curriculum vitae, which it considers provided full disclosure of Dr. Boisseau’s involvement with JECFA. While panels should insist that self-disclosure requirements under the Rules of Conduct are observed by potential experts, and while parties are entitled to full self-disclosure by experts, we find that the Panel did not exceed its authority in concluding that Dr. Boisseau’s brief statement, when considered together with the information contained in his curriculum vitae, provided sufficient disclosure in this case. Dr. Boisseau’s curriculum vitae provides information about his involvement with JECFA and his other professional activities.”(2303)

5.      Section VII: confidentiality

1493.      See paragraphs 1486-1487 above.

6.      Section VIII: procedures concerning possible material violations

1494.      In Guatemala — Cement II, Guatemala alleged that the presence on the Panel of a member who served Guatemala — Cement I detracted from the “objectivity and independence” of the Panel. The Panel issued a preliminary ruling on the issue, in which it considered that it was not competent to rule on the issue, and noted that if Guatemala wishes to persist with its concerns, it could avail itself of the procedure provided for in Section VIII of the Rules of Conduct. In the Panel’s view, this was the “only proper way” for Guatemala to raise the issue:

“Prior to the first meeting of the Panel with the parties, we issued the following preliminary ruling on this issue through a communication addressed to the parties and third parties, dated 24 February 2000:

 

“In order to determine whether the substance of Guatemala’s preliminary objection is an issue that is susceptible of a ruling by the Panel, we have carefully analysed the provisions of the DSU governing panel composition. It is clear that Article 8.6 of the DSU imposes primary responsibility for panel composition on the parties to the dispute. In cases where the parties are unable to agree on the composition of a panel, such as this one, Article 8.7 of the DSU imposes responsibility for panel composition on the Director General. According to Article 8 of the DSU, therefore, the composition of a panel is determined by the parties to the dispute and, in certain circumstances, by the Director General. Neither Article 8 nor any other provision of the DSU prescribes any role for the panel in the panel composition process. For this reason, we find that we are unable to rule on the substance of the issue raised by Guatemala.

 

Should Guatemala persist with its substantive concerns regarding the composition of the Panel, Guatemala may avail itself of the procedure provided for in the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes.”

  

We are not aware whether Guatemala has decided to avail itself of its right under Article VIII:1 of the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes to submit evidence of a violation of the obligations of independence or impartiality by a panel member to the Chairman of the DSB. As we indicated in our preliminary ruling, we conclude that this would have been the only proper way for Guatemala to raise the issue. In light of this ruling, we also requested the parties not to submit any further arguments on this issue in subsequent stages of the procedure. “(2304)

1495.      In US/Canada — Continued Suspension, the Appellate Body stated that:

“Selected experts are also subject to certain self-disclosure and confidentiality obligations set out elsewhere in the Rules of Conduct, and procedures exist for the referral of a “material violation” of these obligations to the Chairman of the DSB for appropriate action.”(2305),(2306)

1496.      In EC and certain member States — Large Civil Aircraft, the Appellate Body adopted additional procedures to protect business confidential information. In the context of discussing these additional procedures, the Appellate Body stated that:

“The additional procedures that we adopt below ensure that all Appellate Body Members have access to the entirety of the appellate record while they are in Geneva. The additional procedures further provide that Members of the Division shall have access to all but the most sensitive information from their places of residence outside of Geneva. Members of the Appellate Body who are not on the Division shall have access to selected information that they require to discharge their duties of collegiality under Rule 4 of the Working Procedures and to participate meaningfully in any exchanges of views. For their part, Appellate Body Secretariat staff will consult sensitive information only on the premises of the Appellate Body Secretariat and the most sensitive information only in the designated secure location. We recall, in this regard, that Appellate Body Members and Appellate Body Secretariat staff are subject to the Rules of Conduct. Paragraph VII:1 of the Rules of Conduct provides that “{e}ach covered person shall at all times maintain the confidentiality of dispute settlement deliberations and proceedings together with any information identified by a party as confidential.” If participants were to have any concerns regarding the protection of confidentiality by Appellate Body Members and Appellate Body Secretariat staff, they may raise them under the Rules of Conduct and the Appellate Body will decide.(2307) We do not consider that more is required.”(2308)

1497.      The “Additional Procedures to Protect Sensitive Information” adopted by the Appellate Body in that proceeding provided, among other things, that:

“Appellate Body Members and assigned Appellate Body Secretariat staff are covered by the Rules of Conduct. As provided for in the Rules of Conduct, evidence of breach of these Rules may be submitted to the Appellate Body, which will take appropriate action.”(2309)

7.      Section IX: Review of the Rules of Conduct

1498.      At its meeting on 25, 28 and 29 January and 1 February 1999,(2310) and in accordance with Section IX of the Rules of Conduct, which provides for a periodic review of the rules, the DSB agreed to continue to apply the current Rules of Conduct.(2311)

 

XXXIV. Principles and Concepts of General International Law Related to Dispute Settlement

A. General

1499.      The Appellate Body in US — Gasoline stated that WTO law was not to be “read in clinical isolation from public international law”:

“The ‘general rule of interpretation’ set out above has been relied upon by all of the participants and third participants, although not always in relation to the same issue. That general rule of interpretation has attained the status of a rule of customary or general international law. As such, it forms part of the ‘customary rules of interpretation of public international law’ which the Appellate Body has been directed, by Article 3(2) of the DSU, to apply in seeking to clarify the provisions of the General Agreement and the other ‘covered agreements’ of the Marrakesh Agreement Establishing the World Trade Organization (the ‘WTO Agreement’). That direction reflects a measure of recognition that the General Agreement is not to be read in clinical isolation from public international law.”(2312)

B. Vienna Convention on the Law of Treaties

1. Article 25: provisional application of treaties

1500.      In Brazil — Retreaded Tyres (Article 21.3(c)), the Arbitrator concluded that it was not appropriate to factor into the “reasonable period of time” the time requested by Brazil for ratification by MERCOSUR countries of a new MERCOSUR tyres regime, its incorporation in their domestic legal systems, and its entry into force. In that connection, the Arbitrator made reference to Article 25 of the Vienna Convention:

“In any event, even if I were to allocate time for ratification, I could take into account only the most prompt ratification process and not, as suggested by Brazil, an average period. Nor do I see a need to allocate time for Brazil to await entry into force pursuant to Article 40 of the Protocol of Ouro Preto on the Institutional Structure of MERCOSUR after completion of the incorporation process in all MERCOSUR countries. Brazil is expected to use the flexibility available in its legal system in order to comply promptly with the recommendations and rulings of the DSB, and could implement measures on a provisional basis. (In this respect, see supra, footnote, 81. See also Article 62 of the Constitution with respect to provisional measures as referred to in para. 66, supra, and Article 25 of the Vienna Convention on the Law of Treaties with respect to the provisional application of treaties.)”

2. Article 26: pactu sunt servanda (good faith performance of treaty obligations)

1501.      In US — Shrimp, the Appellate Body held that the chapeau of Article XX was “but one expression of good faith” and also reflected the notion of “abus de droit”:

“The chapeau of Article XX is, in fact, but one expression of the principle of good faith. This principle, at once a general principle of law and a general principle of international law, controls the exercise of rights by states. One application of this general principle, the application widely known as the doctrine of abus de droit, prohibits the abusive exercise of a state’s rights and enjoins that whenever the assertion of a right ‘impinges on the field covered by [a] treaty obligation, it must be exercised bona fide, that is to say, reasonably.’(2313) An abusive exercise by a Member of its own treaty right thus results in a breach of the treaty rights of the other Members and, as well, a violation of the treaty obligation of the Member so acting. Having said this, our task here is to interpret the language of the chapeau, seeking additional interpretative guidance, as appropriate, from the general principles of international law.”(2314)

1502.      In Argentina — Textiles the Panel cited, inter alia, Article 3.10 of the DSU in concluding that it “must assume that WTO Members will perform their treaty obligations in good faith, as they are required to do by the WTO Agreement and by international law.”(2315)

1503.      In US — Hot-Rolled Steel, the Appellate Body referred to the principle of good faith in the context of interpreting paragraph 2 of Annex II of the Anti-Dumping Agreement:

“This provision requires investigating authorities to strike a balance between the effort that they can expect interested parties to make in responding to questionnaires, and the practical ability of those interested parties to comply fully with all demands made of them by the investigating authorities. We see this provision as another detailed expression of the principle of good faith, which is, at once, a general principle of law and a principle of general international law, that informs the provisions of the Anti-Dumping Agreement, as well as the other covered agreements. This organic principle of good faith, in this particular context, restrains investigating authorities from imposing on exporters burdens which, in the circumstances, are not reasonable.”(2316)

1504.      In US — Cotton Yarn, the Appellate Body referred to the “pervasive” general principle of good faith in the context of discussing Article 6 of the Agreement on Textiles and Clothing:

“There is no need for the purpose of this appeal to express a view on the question whether an importing Member would be under an obligation, flowing from the “pervasive” general principle of good faith that underlies all treaties, to withdraw a safeguard measure if post-determination evidence relating to predetermination facts were to emerge revealing that a determination was based on such a critical factual error that one of the conditions required by Article 6 turns out never to have been met.”(2317)

1505.      In US — Shrimp (Article 21.5 — Malaysia), the Appellate Body emphasized that the principle of good faith applies to all WTO Members equally:

“We do wish to note, though, that there is one observation by the Panel with which we do not agree. In assessing the good faith efforts made by the United States, the Panel stated that:

 

The United States is a demandeur in this field and given its scientific, diplomatic and financial means, it is reasonable to expect rather more than less from that Member in terms of serious good faith efforts. Indeed, the capacity of persuasion of the United States is illustrated by the successful negotiation of the Inter-American Convention. (Panel Report, para. 5.76)

 

We are not persuaded by this line of reasoning. As we stated in our [original] Report, the chapeau of Article XX is “but one expression of the principle of good faith”. (Appellate Body Report, United States — Shrimp, supra, footnote 24, para. 158) This good faith notion applies to all WTO Members equally.”(2318)

1506.      In EC — Sardines, the Appellate Body stated that:

“We must assume that Members of the WTO will abide by their treaty obligations in good faith, as required by the principle of pacta sunt servanda articulated in Article 26 of the Vienna Convention. And, always in dispute settlement, every Member of the WTO must assume the good faith of every other Member.”(2319)

1507.      In US — Offset Act (Byrd Amendment), the Appellate Body took issue with the Panel’s conclusion that the United States had not acted in good faith in adopting the measure at issue:

“[The] performance of treaties is also governed by good faith. Hence, Article 26 of the Vienna Convention, entitled Pacta Sunt Servanda, to which several appellees referred in their submissions, provides that “[e]very treaty in force is binding upon the parties to it and must be performed by them in good faith.”(2320) The United States itself affirmed “that WTO Members must uphold their obligations under the covered agreements in good faith”.

We have recognized the relevance of the principle of good faith in a number of cases. Thus, in US — Shrimp, we stated that:

The chapeau of Article XX is, in fact, but one expression of the principle of good faith. This principle, at once a general principle of law and a general principle of international law, controls the exercise of rights by states.(2321)

 

In US — Hot-Rolled Steel, we found that:

 

… the principle of good faith … informs the provisions of the Anti-Dumping Agreement, as well as the other covered agreements.(2322)

 

Clearly, therefore, there is a basis for a dispute settlement panel to determine, in an appropriate case, whether a Member has not acted in good faith.

 

Nothing, however, in the covered agreements supports the conclusion that simply because a WTO Member is found to have violated a substantive treaty provision, it has therefore not acted in good faith. In our view, it would be necessary to prove more than mere violation to support such a conclusion.

 

The evidence in the Panel record does not, in our view, support the Panel’s statement that the United States “may be regarded as not having acted in good faith”. We are of the view that the Panel’s conclusion is erroneous and, therefore, we reject it.”(2323)

1508.      Interpreting the above considerations by the Appellate Body, the Panel in Argentina — Poultry Anti-Dumping Duties explained that “two conditions must be satisfied before a Member may be found to have failed to act in good faith. First, the Member must have violated a substantive provision of the WTO agreements. Second, there must be something “more than mere violation”.(2324)

1509.      Along the same lines, the Panel in EC — Bananas III (Article 21.5 — US) found that as the “European Communities has not succeeded in making a prima facie case for the alleged violation of that provision, let alone also for something “more than mere violation” it must reject the European Communities’ arguments concerning good faith.(2325)

1510.      In US/Canada — Continued Suspension, the Panel distinguished different categories of good faith:

“We are of the view that the principle of good faith could be analysed mainly in respect of the following categories:

 

(a)      good faith conduct in a dispute settlement procedure;

 

(b)      substantive good faith, i.e. with respect to the substantive obligations of a State;

 

(c)      good faith in the interpretation process (Article 31 of the Vienna Convention on the Law of Treaties).”(2326)

1511.      The Panel in US/Canada — Continued Suspension offered the following observations on the principle of good faith:

“Good faith is one of the basic principles regarding the creation and execution of legal obligations in public international law.(2327) This principle is expressed inter alia in Article 26 of the Vienna Convention on the Law of Treaties:

 

“Every treaty in force is binding upon the parties to it and must be performed by them in good faith.”

 

It is implicit from the duty to perform treaty obligations in good faith that a party to an international agreement should be deemed to have acted in good faith in the performance of its treaty obligations. More generally, even though Article 26 provides for an obligation and not a presumption, pacta sunt servanda is but only one expression of the principle of good faith. Good faith is a general principle of international law that governs all reciprocal actions of States.(2328) We are therefore inclined to agree with the European Communities that every party to an international agreement must be presumed to be performing its obligation under that agreement in good faith.

 

 

The Panel notes in this respect that good faith has been defined as a:

 

“disposition d’esprit de loyauté et d’honnêteté consistant en ce qu’un sujet de droit ne tente pas de minorer ses obligations, quels qu’en soit I’origine et le fondement… ,”(2329)

 

According to this definition, a State acting in good faith should be honestly seeking to comply with its obligations. A presumption of good faith could thus extend to compliance. It is the understanding of the Panel that States benefit in their actions from the principle that a breach of the principle of good faith cannot be presumed and that any State alleging an abuse of right (abus de droit) or, more particularly, a breach of the principle of good faith, must prove it.”(2330)’(2331)

1512.      In US/Canada — Continued Suspension, the Appellate Body stated that:

“The Member required to implement the DSB’s recommendations and rulings may be presumed to have acted in good faith when adopting the implementing measure. However, the presumption of good faith attaches to the actor, but not to the action itself. Thus, whilst the presumption of good faith concerns the reasons for which a Member acts, such a presumption does not answer the question whether the measure taken by the implementing Member has indeed brought about substantive compliance. Similarly, the suspending Member can also be presumed to act in good faith in maintaining the suspension of concessions, but that does not entail that the suspension of concessions is necessarily consistent with Article 22.8. When a disagreement arises as to whether the implementing measure achieves substantive compliance and whether the suspension of concessions may continue, it should be submitted for adjudication in dispute settlement proceedings. In sum, a presumption of good faith, which can be claimed by both parties, does not offer a clear answer to the question of when inconsistencies arising from the original measure should be considered to have been removed within the meaning of Article 22.8 of the DSU.”(2332)

1513.      The Panel in Thailand — Cigarettes (Philippines), referring to Article 26 and prior jurisprudence, considered that in the absence of solid evidence to prove the contrary, there is no reason to assume that government officials would act in contradiction to their WTO obligations:

“In addition, we note that the Appellate Body has recognized that the good faith principle has an implication for the Panels’ interpretation of the Members obligations. (Appellate Body Report, US — Offset Act (Byrd Amendment), para. 297). The Panel in Canada — Continued Suspension also found that one aspect of the good faith principle applied to the context of WTO disputes was to grant members a presumption of WTO consistency in the application of their domestic laws:

 

“It is implicit from the duty to perform treaty obligations in good faith that a party to an international agreement should be deemed to have acted in good faith in the performance of its treaty obligations. More generally, even though Article 26 provides for an obligation and not a presumption, pacta sunt servanda is but only one expression of the principle of good faith. Good faith is a general principle of international law that governs all reciprocal actions of States. We are therefore inclined to agree with the European Communities that every party to an international agreement must be presumed to be performing its obligation under that agreement in good faith.” (Panel Report, Canada — Continued Suspension, para. 7.317)

 

In the absence of solid evidence to prove the contrary, there is no reason to assume that TTM directors, who are Thai government officials, would act in contradiction to their WTO obligations.”.(2333)

1514.      As regards the application of the principle of good faith engagement in dispute settlement procedures, see the Section of this Chapter on Article 3.10 of the DSU.

1515.      As regards As regards the principle of good faith in the context of treaty interpretation, see the Section of this Chapter on Article 31(1) of the Vienna Convention.

3. Article 27: internal law and observance of treaties

1516.      In Brazil — Aircraft (Article 21.5 — Canada), the Panel found that the continued issuance of NTN-I bonds by Brazil pursuant to letters of commitment issued under PROEX prior to its modification was inconsistent with Brazil’s WTO obligations. In the course of its analysis, the Panel rejected Brazil’s argument that it had a contractual obligation to issue PROEX bonds pursuant to commitments already entered into, and that it would be liable to damages for breach of contract if it failed to do so. The Panel noted that:

“Although a Panel may examine municipal law in order to determine whether a Member has complied with the WTO Agreement, (See, e.g., India — Patent Protection for Pharmaceutical and Agricultural Chemical Products, Report of the Appellate Body adopted on 16 January 1998, WT/DS50/AB/R, para. 66), we are reluctant to enter into such an examination here, as the issues are complex, not fully briefed, and ultimately not essential to our resolution of the case at hand. In any event, we recall that, under Article 27 of the Vienna Convention on the Law of Treaties, a party to a treaty may not invoke the provisions of its internal law as justification for its failure to perform a treaty.”(2334)

1517.      The Appellate Body endorsed the Panel’s finding:

“We note Brazil’s argument before the Article 21.5 Panel that Brazil has a contractual obligation under domestic law to issue PROEX bonds pursuant to commitments that have already been made, and that Brazil could be liable for damages for breach of contract under Brazilian law if it failed to respect its contractual obligations. In response to a question from us at the oral hearing, however, Brazil conceded that a WTO Member’s domestic law does not excuse that Member from fulfilling its international obligations. Like the Article 21.5 Panel, we do not consider that any private contractual obligations, which Brazil may have under its domestic law, are relevant to the issue of whether the DSB’s recommendation to “withdraw” the prohibited export subsidies permits the continued issuance of NTN-I bonds under letters of commitment issued before 18 November 1999.”(2335)

1518.      In a subsequent Article 22.6 proceeding in the same case, the Arbitrators stated that “[w]e do not consider the arguments based on Brazil’s contractual obligations to be compelling. Obligations under internal law are no justification for not performing international obligations.”(2336)

1519.      In Mexico — Telecoms, the Panel confirmed that a requirement imposed by a Member under its internal law on a major supplier cannot unilaterally erode its international commitments made in its schedule to other WTO Members:

“The Panel is aware that, pursuant to doctrines applicable under the competition laws of some Members, a firm complying with a specific legislative requirement of such a Member (e.g. a trade law authorizing private market-sharing agreements) may be immunized from being found in violation of the general domestic competition law. The reason for these doctrines is that, in most jurisdictions, domestic legislatures have the legislative power to limit the scope of competition legislation. International commitments made under the GATS “for the purpose of preventing suppliers … from engaging in or continuing anti-competitive practices” are, however, designed to limit the regulatory powers of WTO Members. Reference Paper commitments undertaken by a Member are international obligations owed to all other Members of the WTO in all areas of the relevant GATS commitments. In accordance with the principle established in Article 27 of the Vienna Convention, a requirement imposed by a Member under its internal law on a major supplier cannot unilaterally erode its international commitments made in its schedule to other WTO Members to prevent major suppliers from “continuing anti-competitive practices”. The pro-competitive obligations in Section 1 of the Reference Paper do not reserve any such unilateral right of WTO Members to maintain anticompetitive measures.”(2337)

1520.      In US — Zeroing (Japan) (Article 21.5 — Japan), the Appellate Body stated that:

“We note that a WTO Member “bears responsibility for acts of all its departments of government, including its judiciary.”(2338) This is supported by Article 18.4 of the Anti-Dumping Agreement, Article XVI:4 of the WTO Agreement, and Article 27 of the Vienna Convention,(2339) The judiciary is a state organ and even if an act or omission derives from a WTO Member’s judiciary, it is nevertheless still attributable to that WTO Member. Thus, the United States cannot seek to avoid the obligation to comply with the DSB’s recommendations and rulings within the reasonable period of time, by relying on the timing of liquidation being “controlled by the independent judiciary”. “(2340)

4. Article 28: non-retroactivity of treaties

1521.      In Brazil — Desiccated Coconut, the Appellate Body discussed Article 28 of the Vienna Convention, i.e. the provision containing the general principle of non-retroactivity of treaties:

“The fundamental question in this case is one of the temporal application of one set of international legal norms, or the successor set of norms, to a particular measure taken during the period of co-existence of the GATT 1947 and the Tokyo Round SCM Code with the WTO Agreement. Article 28 of the Vienna Convention contains a general principle of international law concerning the non-retroactivity of treaties.

 

 

Article 28 states the general principle that a treaty shall not be applied retroactively ‘unless a different intention appears from the treaty or is otherwise established’. Absent a contrary intention, a treaty cannot apply to acts or facts which took place, or situations which ceased to exist, before the date of its entry into force.”(2341)

1522.      In EC — Bananas, the Appellate Body found that the Panel did not commit the error of giving retroactive effect to Articles II and XVII of the GATS:

“The European Communities also raises the question whether the Panel erred in giving retroactive effect to Articles II and XVII of the GATS, contrary to the principle stated in Article 28 of the Vienna Convention. Article 28 states the general principle of international law that “[u] nless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to … any situation which ceased to exist before the date of entry into force of the treaty …”. The Panel stated in its finding on this issue that:

 

… the scope of our legal examination includes only actions which the EC took or continued to take, or measures that remained in force or continued to be applied by the EC, and thus did not cease to exist after the entry into force of the GATS. Likewise, any finding of consistency or inconsistency with the requirements of Articles and XVII of GATS would be made with respect to the period after the entry into force of the GATS.

 

The Panel stated, further, in a footnote to this finding, that “the EC measures at issue may be considered as continuing measures, which in some cases were enacted before the entry into force of the GATS but which did not cease to exist after that date (the opposite of the situation envisaged in Article 28)”.

 

 

It is … evident from the terms of its finding that the Panel concluded, as a matter of fact, that the de facto discrimination did continue to exist after the entry into force of the GATS. This factual finding is beyond review by the Appellate Body. Thus, we do not reverse or modify the Panel’s conclusion in paragraph 7.308 of the Panel Reports.”(2342)

1523.      In EC — Hormones, the Appellate Body examined the Panel’s finding that the SPS Agreement should apply to the European Communities measures that were enacted before the entry into force of the WTO Agreement on 1 January 1995 because the measures continued to exist after that date and the SPS Agreement does not indicate any intention to limits its application to measures enacted after the entry into force of the WTO Agreement. The Appellate Body stated:

“We agree with the Panel that the SPS Agreement would apply to situations or measures that did not cease to exist, such as the 1981 and 1988 Directives, unless the SPS Agreement reveals a contrary intention. We also agree with the Panel that the SPS Agreement does not reveal such an intention. The SPS Agreement does not contain any provision limiting the temporal application of the SPS Agreement, or of any provision thereof, to SPS measures adopted after 1 January 1995. In the absence of such a provision, it cannot be assumed that central provisions of the SPS Agreement, such as Articles 5.1 and 5.5, do not apply to measures which were enacted before 1995 but which continue to be in force thereafter. If the negotiators had wanted to exempt the very large group of SPS measures in existence on 1 January 1995 from the disciplines of provisions as important as Articles 5.1 and 5.5, it appears reasonable to us to expect that they would have said so explicitly. Articles 5.1 and 5.5 do not distinguish between SPS measures adopted before 1 January 1995 and measures adopted since; the relevant implication is that they are intended to be applicable to both.”(2343)

1524.      In Canada — Patent Term, the Appellate Body stated that Article 70.1 of the TRIPS Agreement excludes obligations in respect of “acts which occurred” before the date of the application of the TRIPS Agreement but does not exclude rights and obligations in respect of continuing situations. The Appellate Body in noting that its interpretation did not lead to a retroactive application of the TRIPS Agreement stated:

“Article 28 of the Vienna Convention covers not only any ‘act’, but also any ‘fact’ or ‘situation which ceased to exist’. Article 28 establishes that, in the absence of a contrary intention, treaty provisions do not apply to ‘any situation which ceased to exist’ before the treaty’s entry into force for a party to the treaty. Logically, it seems to us that Article 28 also necessarily implies that, absent a contrary intention, treaty obligations do apply to any ‘situation’ which has not ceased to exist — that is, to any situation that arose in the past, but continues to exist under the new treaty. Indeed, the very use of the word ‘situation’ suggests something that subsists and continues over time; it would, therefore, include ‘subject matter existing … and which is protected’, such as Old Act patents at issue in this dispute, even though those patents, and the rights conferred by those patents, arose from ‘acts which occurred’ before the date of application of the TRIPS Agreement for Canada.

 

This interpretation is confirmed by the Commentary on Article 28, which forms part of the preparatory work of the Vienna Convention:

 

 

We note that Article 28 of the Vienna Convention is not applicable if ‘a different intention appears from the treaty or is otherwise established’. We see no such ‘different intention’ in Article 70. Despite some differences in wording and structure from Article 28, we do not see Article 70.1 as in any way establishing ‘a different intention’ within the meaning of Article 28 of the Vienna Convention.(2344)

1525.      In EC — Sardines, the Appellate Body considered Article 28 in the context of determining the temporal scope of the obligation in Article 2.4 of the TBT Agreement. The Appellate Body stated that “ [w] e recall that Article 28 of the Vienna Convention on the Law of Treaties (the “Vienna Convention”) provides that treaties generally do not apply retroactively”, and that “[a]s we have said in previous disputes, the interpretation principle codified in Article 28 is relevant to the interpretation of the covered agreements”.(2345)

1526.      In EC and certain member States — Large Civil Aircraft, the Appellate Body considered the principle of non-retroactivity in Article 28 in the context of interpreting Article 5 of the SCM Agreement. The Appellate Body began by recalling that it “has previously confirmed that the principle of non-retroactivity under Article 28 of the Vienna Convention is a general principle of law, which is relevant to the interpretation of the WTO covered agreements.”(2346),(2347) The Appellate Body then explained that:

“As a general proposition, a treaty does not apply to acts or facts that took place, or situations that ceased to exist, before the date of its entry into force. As we have noted above, in order to determine the temporal scope of Article 5 of the SCM Agreement, regard must be had to the text of the treaty at issue and, importantly, to the subject matter of the treaty in question and to the nature of the treaty obligations undertaken. We therefore disagree with the European Union to the extent that it suggests that it is the pre-1995 measures that are to be interpreted consistently with the principle of non-retroactivity reflected in Article 28 of the Vienna Convention. Rather, as the Panel found, it is, as set out in Article 5, the causing through the use of any subsidy of adverse effects to the interests of other Members that is the subject of that provision. Thus, even assuming that the European Union was correct in its assertion that the pre-1995 measures challenged by the United States could be properly characterized as “completed acts”, this would not mean that such measures are precluded from challenge under Article 5 of the SCM Agreement, as the European Union suggests.”(2348)

1527.      The Appellate Body continued:

“In practice, it is often difficult to distinguish between, on the one hand, an act or fact that was “completed” before the entry into force of the new treaty and, on the other hand, an act, fact, or situation that “continues” or has “continuing effect”.(2349) In order to draw the line between these concepts, we turn to the text of Article 28 of the Vienna Convention.

 

Article 28 refers to “acts or facts which took place”, as well as to “situations which ceased to exist”. The Appellate Body has previously described the word “act” within the meaning of Article 28 as “something that is ‘done’”.(2350) In assessing the temporal scope of a treaty provision that is directed at “acts” or “facts”, the relevant question is whether the act or fact “occurred” or “took place” prior to the entry into force of the treaty. By contrast, with regard to treaty provisions that are directed at a “situation”, Article 28 does not ask whether the “situation” “took place”, but rather whether it “ceased to exist” prior to the entry into force of the treaty. As the Appellate Body found in Canada-Patent Term, the use of the word “situation” in Article 28 “suggests something that subsists and continues over time” ,(2351) The reference to “ceased to exist” supports the notion that a “situation” may continue to exist over a period of time, rather than simply occur at a particular instant in time, after which the “situation” may “cease[] to exist”.

 

In response to questioning at the oral hearing, the participants agreed that, as a general proposition, there is a certain degree of overlap between the concepts of “act”, “fact”, and “situation”. To us, it would appear that almost any “situation” can be said to have arisen from one or more past “acts” or “facts”, including ones that have been “completed”. Moreover, it would seem that a “situation” may consist of more than a distinct set of repeated acts, such as the use of subsidies under a scheme.”(2352)

1528.      The Appellate Body concluded that:

“[W]e agree with the Panel that Article 5 addresses a “situation” that consists of causing, through the use of any subsidy, adverse effects to the interests of another Member. It is this “situation”, which is subject to the requirements of Article 5 of the SCM Agreement, that is to be construed consistently with the non-retroactivity principle reflected in Article 28 of the Vienna Convention. The relevant question for purposes of determining the temporal scope of Article 5 is whether the causing of adverse effects has “ceased to exist” or continues as a “situation”. We consequently disagree with the European Union that, by virtue of Article 28 of the Vienna Convention, no obligation arising out of Article 5 of the SCM Agreement is to be imposed on a Member in respect of subsidies granted or brought into existence prior to the entry into force of the SCM Agreement. This may mean that a subsidy granted prior to 1 January 1995 falls within the scope of Article 5 of the SCM Agreement, but this is only because of its possible nexus to the continuing situation of causing, through the use of this subsidy, adverse effects to which Article 5 applies.(2353) In reaching this conclusion, we are not saying that the causing of adverse effects, through the use of pre-1995 subsidies, can necessarily be characterized as a “continuing” situation in this case. Rather, we simply find that a challenge to pre-1995 subsidies is not precluded under the terms of the SCM Agreement.(2354)

5. Article 29: territorial scope of treaties

1529.      In Turkey — Textiles, the Panel rejected Turkey’s argument that argument that when, prior to forming the customs union, a constituent member has a WTO right, that Member may, on the occasion of the formation of a customs union, “pass” or “extend” such right to the other constituent members. The Panel considered that “such a legal fiction or concept is not referred to in Article XXIV, in the WTO Agreement or in public international law” and noted:

“See for instance, O’Connell, The Law of State Succession, Cambridge Press, 1956, Chapter V Extension of Treaties of the Successor State to Territory Incorporated where the author concludes that “… it would appear that treaties do not extend, as a general rule, and in the absence of clear intention to the contrary, to territories which remain after their incorporation invested with some degree or other of autonomy. The Permanent Mandates Commission reported in 1923 that ‘the special international conventions entered into by a State do not apply de jure to territories in regard to which the state in question had been entrusted with a mandate, even when those conventions are applicable to contiguous territories placed under the sovereignty of the same state”. See also Lasok, D., Lasok K., Law and Institutions of the European Union (1996), 6th ed., Vol.1; Jennings and Watts, Oppenheim’s International Law (1996), 9th ed., Vol 1 (peace), Parts 2 to 4, p. 1261; Resolution on the White Paper “Preparing the Associated Countries of Central and Eastern Europe for Integration into the Internal Market of the Union”, COM (95)0163-C4-0166/95, OJ No C141, p. 135, 1996/05/13; and Articles 15 and 29 of the VCLT.”(2355)

6. Article 30: application of successive treaties relating to the same subject-matter

1530.      In Japan — Film, the Panel referred to Article 30 in the context of rejecting Japan’s argument that the schedules annexed to the Marrakesh Protocol prevail as a “later agreement” over schedules that entered into force under GATT 1947:

“In our view, such an interpretation would only make sense if the Marrakesh Protocol, referred to in paragraph 1 (d) of GATT 1994, were viewed as later in time than the protocols referred to in paragraph 1(b)(i) thereof, and then, only to the extent of any conflict between tariff concessions annexed to the Marrakesh Protocol and the concessions in the other tariff protocols incorporated in GATT 1994. We consider that, as argued by the United States, Article 30 of the Vienna Convention, which is designed to resolve conflicts between provisions of successive treaties on the same subject matter, is not applicable to the situation at hand because there is nothing inherently incompatible-in conflict-between the earlier and later agreed tariff concessions. Such a conflict would only seem to exist if the subsequent concessions were less favourable than prior concessions, which is not the situation in this case. Where tariff concessions have been progressively improved, the benefits — expectations of improved market access — accruing directly or indirectly under different tariff concession protocols incorporated in GATT 1994 can be read in harmony. This approach is in accordance with general principles of legal interpretation which, as the Appellate Body reiterated in US — Gasoline, teach that one should endeavour to give legal effect to all elements of a treaty and not reduce them to redundancy or inutility.”(2356)

1531.      In EC — Poultry, the Appellate Body stated that “it is not necessary to have recourse to either Article 59.1 or Article 30.3 of the Vienna Convention, because the text of the WTO Agreement and the legal arrangements governing the transition from the GATT 1947 to the WTO resolve the issue of the relationship between Schedule LXXX and the Oilseeds Agreement in this case”.(2357)

1532.      In EC — Hormones (US) (Article 22.6 — EC), the Arbitrators applied Article 30 in the context of declining to take certain bilateral agreements invoked by the United States into account:

“[T]he legal validity and enforceability of such rights and bilateral agreements invoked by the US is questionable for the following reasons.

 

Both bilateral agreements were concluded before the relevant EC schedules that explicitly allocated the quota to both the US and Canada. Moreover, both bilateral agreements were negotiated in a GATT/WTO context where concessions are normally negotiated first on a bilateral level and then “multilateralized” through binding schedules. Once this is done, the bilateral agreement, as a result of which the concession is granted, is superseded by the multilateral schedule. Both the bilateral agreements and the relevant parts of the EC schedule deal with the same subject-matter. Considering the GATT/WTO specific circumstances of their conclusion, the bilateral agreements would appear to be incompatible with the multilateral EC schedule — a quota allocated to only one Member as opposed to a quota allocated to two Members. On these grounds we consider it appropriate to conclude that the EC schedule, in accordance with Article 30 of the Vienna Convention on the Law of Treaties, has superseded and prevails over the bilateral agreements.”(2358)

1533.      In US — Section 110(5) Copyright Act, the United States argued that Article 10 of the 1996 WIPO Copyright Treaty was relevant to the interpretation of certain provisions of the TRIPS Agreement. The Panel stated that:

“[T]he subsequent developments just mentioned do not constitute a subsequent treaty on the same subject-matter within the meaning of Article 30, or subsequent agreements on the interpretation of a treaty, or subsequent practice within the meaning of Article 31(3). Thus such subsequent developments may be of rather limited relevance in the light of the general rules of interpretation as embodied in the Vienna Convention. However, in our view, the wording of the WCT, and in particular of the Agreed Statement thereto, nonetheless supports, as far as the Berne Convention is concerned, that the Berne Union members are permitted to provide minor exceptions to the rights provided under Articles 11 and 11bis of the Paris Act of 1971, and certain other rights.”(2359)

1534.      In EC and certain member States — Large Civil Aircraft, the Panel addressed several issues relating to a 1992 bilateral agreement between the United States and the European Communities (the “1992 Agreement”). In the context of finding that the parties did not waive their rights to WTO dispute settlement under the 1992 Agreement, the Panel stated that “[t]he SCM Agreement, which came into effect on 1 January 1995, does not make any reference to the antecedent 1992 Agreement, and as the United States points out, the European Communities has not made any reservations regarding the application or interpretation of the SCM Agreement.” The Panel further noted that:

“Moreover, we note that Article 30(3) of the VCLT provides that, when all of the parties to an earlier treaty are also parties also to the later Agreement but the earlier treaty is not suspended in operation, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty. This is also consistent with our view that, even if the 1992 Agreement could be considered a bilateral Agreement expressly modifying the application of the GATT/Tokyo Round subsidies rules in the way for which the European Communities contends, it precedes the SCM Agreement, and in the absence of any provision in the SCM Agreement to the effect that the SCM Agreement is subject to, or not to be considered incompatible with, the 1992 Agreement, the SCM Agreement would prevail over the 1992 Agreement to the extent of any inconsistency between them.”(2360)

7.      Article 31: general rule of interpretation

(a) General

1535.      The Appellate Body in US — Gasoline stated that the “general rule of interpretation”, contained in Article 31 of the Vienna Convention had attained the status of “customary or general international law”:

“The ‘general rule of interpretation’ set out above has been relied upon by all of the participants and third participants, although not always in relation to the same issue. That general rule of interpretation has attained the status of a rule of customary or general international law.(2361) As such, it forms part of the ‘customary rules of interpretation of public international law’ which the Appellate Body has been directed, by Article 3(2) of the DSU, to apply in seeking to clarify the provisions of the General Agreement and the other ‘covered agreements’ of the Marrakesh Agreement Establishing the World Trade Organization (the ‘WTO Agreement). That direction reflects a measure of recognition that the General Agreement is not to be read in clinical isolation from public international law.”(2362)

1536.      In EC — Computer Equipment, the Appellate Body emphasized that “[t]he purpose of treaty interpretation is to establish the common intention of the parties to the treaty.(2363)

1537.      In US — Section 301 Trade Act observed that Articles 31 and 32 have attained the status of rules of customary international law, and observed that “[i]n recent years, the jurisprudence of the Appellate Body and WTO panels has become one of the richest sources from which to receive guidance on their application”.(2364)

1538.      In US — Hot-Rolled Steel, the Appellate Body observed that the rules of treaty interpretation in Articles 31 and 32 “apply to any treaty, in any field of public international law, and not just to the WTO agreements”, and that “[t]hese rules of treaty interpretation impose certain common disciplines upon treaty interpreters, irrespective of the content of the treaty provision being examined and irrespective of the field of international law concerned.”(2365),(2366)

1539.      In EC — Chicken Cuts the Appellate Body stated that interpretation pursuant to the customary rules codified in Article 31 “is ultimately a holistic exercise that should not be mechanically subdivided into rigid components. Considering particular surrounding circumstances under the rubric of ‘ordinary meaning’ or ‘in the light of its context’ would not, in our view, change the outcome of treaty interpretation.”(2367)

1540.      In US — Continued Zeroing, the Appellate Body elaborated on the notion that treaty interpretation is a holistic exercise:

“The principles of interpretation that are set out in Articles 31 and 32 are to be followed in a holistic fashion. The interpretative exercise is engaged so as to yield an interpretation that is harmonious and coherent and fits comfortably in the treaty as a whole so as to render the treaty provision legally effective. A word or term may have more than one meaning or shade of meaning, but the identification of such meanings in isolation only commences the process of interpretation, it does not conclude it. …a treaty interpreter is required to have recourse to context and object and purpose to elucidate the relevant meaning of the word or term. This logical progression provides a framework for proper interpretative analysis. At the same time, it should be kept in mind that treaty interpretation is an integrated operation, where interpretative rules or principles must be understood and applied as connected and mutually reinforcing components of a holistic exercise.”(2368)

(b) Article 31(1)

(i) A “treaty” shall be interpreted

1541.      In EC — IT Products, the Panel considered it unnecessary to reach a finding on whether the Information Technology Agreement was a “treaty” within the meaning of the Vienna Convention:

“Finally, the Panel notes the point raised by the European Communities that the ITA, which the European Communities considers is a full-fledged treaty, must be interpreted following the rules of the Vienna Convention first, after which its terms may be relied upon as context to interpret the EC Schedule. The Panel has not addressed the question of whether the ITA is in its own right a treaty within the sense of Article 2 of the Vienna Convention or any other relevant provision. We agree that a treaty is to be interpreted according to the rules codified in the Vienna Convention, which require that a treaty be interpreted in good faith in accordance with the ordinary meaning to be given to its terms. In our view, in considering the terms of the ITA as context, this will in any event involve ascertaining the ordinary meaning of the terms of the ITA, regardless of its nature as a treaty or other instrument. Hence, the Panel does not consider it necessary to reach a finding on whether the ITA is a treaty or some other kind of agreement or declaration.”(2369)

(ii) “in good faith”

1542.      In EC — Computer Equipment, the Panel considered the requirement of “good faith” treaty interpretation to mean that it should interpret the meaning of a tariff concession in the European Communities’ Schedule in light of the “legitimate expectations” of an exporting Member. The Appellate Body disagreed:

“[W]e do not agree with the Panel that interpreting the meaning of a concession in a Member’s Schedule in the light of the ‘legitimate expectations’ of exporting Members is consistent with the principle of good faith interpretation under Article 31 of the Vienna Convention. Recently, in India — Patents, the panel stated that good faith interpretation under Article 31 required ‘the protection of legitimate expectations’. We found that the panel had misapplied Article 31 of the Vienna Convention…

 

The purpose of treaty interpretation under Article 31 of the Vienna Convention is to ascertain the common intentions of the parties. These common intentions cannot be ascertained on the basis of the subjective and unilaterally determined ‘expectations’ of one of the parties to a treaty. Tariff concessions provided for in a Member’s Schedule — the interpretation of which is at issue here-are reciprocal and result from a mutually-advantageous negotiation between importing and exporting Members. A Schedule is made an integral part of the GATT 1994 by Article II:7 of the GATT 1994. Therefore, the concessions provided for in that Schedule are part of the terms of the treaty. As such, the only rules which may be applied in interpreting the meaning of a concession are the general rules of treaty interpretation set out in the Vienna Convention.”(2370)

1543.      The Panel in US — Section 301 Trade Act considered the meaning of the requirement to interpret a treaty “in good faith”. The Panel began with the general observation that:

“It is notoriously difficult, or at least delicate, to construe the requirement of the Vienna Convention that a treaty shall be interpreted in good faith in third party dispute resolution, not least because of the possible imputation of bad faith to one of the parties. We prefer, thus, to consider which interpretation suggests “better faith” and to deal only briefly with this element of interpretation. Applying the good faith requirement to Article 23 may not lead to a conclusive result but impels us in the direction suggested by our examination of the ordinary meaning of the raw text.”(2371)

1544.      The Panel in US — Section 301 Trade Act then proceeded to develop a “good faith” interpretation of the requirement, in Article 23 of the DSU, to have recourse to and abide by the rules and procedures of the DSU in respect of determinations of WTO-inconsistency:

“Imagine two farmers with adjacent land and a history of many disputes concerning real and alleged mutual trespassing. In the past, self help through force and threats of force has been used in their altercations. Naturally, exploitation of the lands close to the boundaries suffers since it is viewed as dangerous terrain. They now sign an agreement under which they undertake that henceforth in any case of alleged trespassing they will abjure self help and always and exclusively make recourse to the police and the courts of law. They specifically undertake never to use force when dealing with alleged trespass. After the entry into force of their agreement one of the farmers erects a large sign on the contested boundary: “No Trespassing. Trespassers may be shot on sight”.

 

One could, of course, argue that since the sign does not say that trespassers will be shot, the obligations undertaken have not been violated. But would that be the “better faith” interpretation of what was promised? Did they not after all promise always and exclusively to make recourse to the police and the courts of law?

 

Likewise, is it a good faith interpretation to construe the obligations in Article 23 to allow a Member that promised its WTO partners — under Articles 23.1 and 23.2(a) — that it will generally, including in its legislation, have recourse to and abide by the rules and procedures of the DSU which specifically contain an undertaking not to make a determination of inconsistency prior to exhaustion of DSU proceedings, to put in place legislation the language of which explicitly, urbi et orbi, reserves to its Executive Branch the right to make a determination of inconsistency — that which it promised it would not do? This Panel thinks otherwise.

 

The good faith requirement in the Vienna Convention suggests, thus, that a promise to have recourse to and abide by the rules and procedures of the DSU, also in one’s legislation, includes the undertaking to refrain from adopting national laws which threaten prohibited conduct.”(2372)

1545.      In US — Offset Act (Byrd Amendment), the Appellate Body observed that:

“Article 31(1) of the Vienna Convention directs a treaty interpreter to interpret a treaty in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of the treaty’s object and purpose. The principle of good faith may therefore be said to inform a treaty interpreter’s task.”(2373)

1546.      In US — Anti-Dumping and Countervailing Duties (China), the Appellate Body reversed the Panel’s finding that the term “public body” in Article 1.1(a)(1) of the SCM Agreement means “any entity controlled by a government”, and found instead that the term “public body” in the context of Article 1.1.(a)(1) of the SCM Agreement covers only those entities that possesses, exercises or are vested with governmental authority. In the course of its analysis, the Appellate Body stated that:

“[According to Article 31 of the Vienna Convention, a treaty is to be interpreted in good faith. That means, inter alia,that terms of a treaty are not to be interpreted based on the assumption that one party is seeking to evade its obligations and will exercise its rights so as to cause injury to the other party. Yet, the United States’ argument that “a government would be able to hide behind its ownership interest in an entity and engage in entrustment or direction behind closed doors” pleads for an interpretation founded on this very assumption, and the above statement by the Panel reveals an interpretation on this basis. A proper interpretation in accordance with Article 31 of the Vienna Convention, however, cannot proceed based on such an assumption.”(2374)

1547.      As regards the principle of good faith in the performance of treaty obligations, see the Section of this Chapter on Article 26 of the Vienna Convention.

1548.      As regards the application of the principle of good faith engagement in dispute settlement procedures, see the Section of this Chapter on Article 3.10 of the DSU.

(iii) “in accordance with the ordinary meaning to be given to the terms”

The terms

1549.      In Japan — Alcoholic Beverages II, the Appellate Body stressed that “Article 31 of the Vienna Convention provides that the words of the treaty form the foundation for the interpretative process: ‘interpretation must be based above all upon the text of the treaty’.”(2375)

1550.      In EC — Hormones, the Appellate Body stated that “ [t] he fundamental rule of treaty interpretation requires a treaty interpreter to read and interpret the words actually used by the agreement under examination, not words the interpreter may feel should have been used.”(2376)

1551.      In India — Patents (US), the Appellate Body emphasized that the principles of treaty interpretation “neither require nor condone” the importation into a treaty of “words that are not there” nor of “concepts that were not intended”:

“The duty of a treaty interpreter is to examine the words of the treaty to determine the intentions of the parties. This should be done in accordance with the principles of treaty interpretation set out in Article 31 of the Vienna Convention. But these principles of interpretation neither require nor condone the imputation into a treaty of words that are not there or the importation into a treaty of concepts that were not intended….These rules must be respected and applied in interpreting the TRIPS Agreement or any other covered agreements….Both panels and the Appellate Body must be guided by the rules of treaty interpretation set out in the Vienna Convention, and must not add to or diminish rights and obligations provided in the WTO Agreement.(2377)

1552.      In US — Carbon Steel, the Appellate Body stated that “the task of interpreting a treaty provision must begin with its specific terms”.(2378)

Ordinary meaning and dictionaries

1553.      In China — Publications and Audiovisual Products, the Appellate Body recalled some of its previous pronouncements pertaining to the use of dictionaries for the purpose of establishing the ordinary meaning of a term:

“The Appellate Body has previously held that, while a panel may start with the dictionary definitions of the terms to be interpreted, in the process of discerning the ordinary meaning, dictionaries alone are not necessarily capable of resolving complex questions of interpretation because they typically catalogue all meanings of words.(2379) Dictionaries are important guides to, but not dispositive of, the meaning of words appearing in treaties.(2380) For these reasons, the Appellate Body has cautioned panels against equating the “ordinary meaning” of a term with the definition provided by dictionaries. Under Article 31 of the Vienna Convention, the “ordinary meaning” of treaty terms may be ascertained only in their context and in the light of the object and purpose of the treaty.(2381) In this respect, the Appellate Body has explained that interpretation pursuant to the customary rule codified in Article 31 of the Vienna Convention is ultimately a holistic exercise that should not be mechanically subdivided into rigid components.”(2382),(2383)

(iv) “in their context”

General

1554.      In Korea — Dairy, the Appellate Body emphasized the general principle that the provisions of a treaty should be interpreted harmoniously:

“In light of the interpretive principle of effectiveness, it is the duty of any treaty interpreter to ‘read all applicable provisions of a treaty in a way that gives meaning to all of them, harmoniously.’(2384) An important corollary of this principle is that a treaty should be interpreted as a whole, and, in particular, its sections and parts should be read as a whole.(2385) Article II:2 of the WTO Agreement expressly manifests the intention of the Uruguay Round negotiators that the provisions of the WTO Agreement and the Multilateral Trade Agreements included in its Annexes 1, 2 and 3 must be read as a whole.”(2386)

1555.      This principle has been followed by panels and the Appellate Body in numerous disputes. For example, in US — Anti-Dumping and Countervailing Duties (China) the Appellate Body applied this principle and cited to some prior instances of application:

“While we agree with the Panel that Articles 19.3 and 19.4 of the SCM Agreement are concerned with countervailing duties and not with anti-dumping duties, we are not persuaded that it necessarily follows that these provisions are, as the Panel noted, “oblivious to any potential concurrent imposition of anti-dumping duties”.(2387) Such an interpretative approach is difficult to reconcile with the notion that the provisions in the WTO covered agreements should be interpreted in a coherent and consistent manner, giving meaning to all applicable provisions harmoniously.(2388) Members have entered into cumulative obligations under the covered agreements and should thus be mindful of their actions under one agreement when taking action under another.”(2389)

Article 31(2)

General

1556.      In US — Gambling, the Appellate Body found that the Panel erred in categorizing W/120 and the 1993 Scheduling Guidelines as “agreement” within the meaning of Article 31(2)(a). In the Appellate Body’s view, these documents did not qualify as context under Article 31(2):

“We note that Article 31(2) refers to the agreement or acceptance of the parties. In this case, both W/120 and the 1993 Scheduling Guidelines were drafted by the GATT Secretariat rather than the parties to the negotiations. It may be true that, on its own, authorship by a delegated body would not preclude specific documents from falling within the scope of Article 31(2). However, we are not persuaded that in this case the Panel could find W/120 and the 1993 Scheduling Guidelines to be context. Such documents can be characterized as context only where there is sufficient evidence of their constituting an “agreement relating to the treaty” between the parties or of their “acceptance by the parties] as an instrument related to the treaty”.

 

We do not accept, as the Panel appears to have done, that, simply by requesting the preparation and circulation of these documents and using them in preparing their offers, the parties in the negotiations have accepted them as agreements or instruments related to the treaty. Indeed, there are indications to the contrary. As the United States pointed out before the Panel, the United States and several other parties to the negotiations clearly stated, at the time W/120 was proposed, that, although Members were encouraged to follow the broad structure of W/120, it was never meant to bind Members to the CPC definitions, nor to any other “specific nomenclature”, and that “the composition of the list was not a matter for negotiations”. Similarly, the Explanatory Note that prefaces the Scheduling Guidelines itself appears to contradict the Panel in this regard, as it expressly provides that, although it is intended to assist “persons responsible for scheduling commitments”, that assistance “should not be considered as an authoritative legal interpretation of the GATS.””(2390)

1557.      In EC — Chicken Cuts, the Panel stated that:

“Regarding other agreements or instruments that may qualify under Article 31(2), the International Law Commission stated that:

 

‘[T]he principle on which [Article 31(2)] is based is that a unilateral document cannot be regarded as forming part of the context […] unless not only was it made in connexion with the conclusion of the treaty, but its relation to the treaty was accepted in the same manner by the other parties. […] What is proposed in paragraph 2 is that, for purposes of interpreting the treaty, these categories of documents should not be treated as mere evidence to which recourse may be had for the purpose of resolving an ambiguity or obscurity, but as part of the context for the purpose of arriving at the ordinary meaning of the terms of the treaty.’(2391) (emphasis added)

 

Further, a leading international law commentator suggests that, in order to be related to the treaty, and thus be part of the ‘context’ as opposed to the negotiating history, which is dealt with in Article 32 of the Vienna Convention, an instrument ‘must be concerned with the substance of the treaty and clarify certain concepts in the treaty or limit its field of application. It must equally be drawn up on the occasion of the conclusion of the treaty.’”(2392)’(2393)

1558.      In China — Auto Parts, the Appellate Body indicated that the realm of context under Article 31(2) is “broad”, but that an agreement or instrument must be “relevant” in the sense of shedding light on the interpretative issue to be resolved:

“We have already stated that the task of the treaty interpreter is to ascertain the meaning of particular treaty terms using the tools set out in Articles 31 and 32 of the Vienna Convention. The realm of context as defined in Article 31(2) is broad. “Context” includes all of the text of the treaty — in this case, the WTO Agreement — and may also extend to “any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty” and “any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty”. Yet context is relevant for a treaty interpreter to the extent that it may shed light on the interpretative issue to be resolved, such as the meaning of the term or phrase at issue. Thus, for a particular provision, agreement or instrument to serve as relevant context in any given situation, it must not only fall within the scope of the formal boundaries identified in Article 31(2), it must also have some pertinence to the language being interpreted that renders it capable of helping the interpreter to determine the meaning of such language. Because WTO Members’ Schedules of Concessions were constructed using the nomenclature of the Harmonized System, the Harmonized System is apt to shed light on the meaning of terms used in these Schedules. It does not, however, automatically follow that the Harmonized System was context relevant to the interpretative question faced by the Panel in its analysis of the threshold issue in this dispute.”(2394)

1559.      In US — Anti-Dumping and Countervailing Duties (China), the Appellate Body noted that:

“[T]he definition of “context” in Article 31(2) of the Vienna Convention makes no mention of jurisprudence. Panel reports in previous disputes do not form part of the context of a term or provision in the sense of Article 31(2) of the Vienna Convention. Rather, the legal interpretation embodied in adopted panel and Appellate Body reports become part and parcel of the WTO acquis and have to be taken into account as such.”(2395)

 

Article 31(2)(a): “any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty”

1560.      In US — Section 110(5) Copyright Act, the Panel found that:

“When ascertaining the legal status of the minor exceptions doctrine, it is important to note that the General Report states that the Rapporteur-General had been “entrusted with making an express mention of the possibility available to national legislation to make what is commonly called minor reservations”.(2396) We believe that the choice of these words reflects an agreement within the meaning of Article 31(2)(a) of the Vienna Convention between the Berne Union members at the Brussels Conference to retain the possibility of providing minor exceptions in national law. We arrive at this conclusion for the following reasons. First, the introduction of Articles 11bis(1)(iii) and 11(1)(ii) occurred simultaneously with the adoption of the General Report expressly mentioning the minor exceptions doctrine. Second, this doctrine is closely related to the substance of the amendment of the Berne Convention in that it limits the scope of the exclusive rights introduced by Articles 11bis(1)(iii)and 11(1)(ii) of the Berne Convention. Third, an “agreement” between all the parties exists because, on the one hand, the Rapporteur-General is being “entrusted to expressly mention” minor exceptions and, on the other hand, the General Report of the Brussels Conference reflecting this express mentioning was formally adopted by the Berne Union members. We therefore conclude that an agreement within the meaning of Article 31(2)(a) of the Vienna Convention between all the parties on the possibility to provide minor exceptions was made in connection with the conclusion of a revision of the Convention introducing additional exclusive rights, including those contained in Articles 11bis(1)(iii) and 11(1)(ii), to which these limitations were to apply, and that this agreement is relevant as context for interpreting these Articles.”(2397)

1561.      The Panel then found that the “subsequent agreement” that had been reached in respect of the Berne Convention must be incorporated into the TRIPS Agreement:

“We note that the express wording of Article 9.1 of the TRIPS Agreement neither establishes nor excludes such incorporation into the Agreement of the minor exceptions doctrine as it applies to Articles 11, 11bis, lifer, 13 and 14 of the Berne Convention (1971).

 

We have shown above that the minor exceptions doctrine forms part of the context, within the meaning of Article 31 (2)(a) of the Vienna Convention, of at least Articles 11 and 11bis of the Berne Convention (1971). There is no indication in the wording of the TRIPS Agreement that Articles 11 and 11bis have been incorporated into the TRIPS Agreement by its Article 9.1 without bringing with them the possibility of providing minor exceptions to the respective exclusive rights. If that incorporation should have covered only the text of Articles 1-21 of the Berne Convention (1971), but not the entire Berne acquis relating to these articles, Article 9.1 of the TRIPS Agreement would have explicitly so provided.

 

Thus we conclude that, in the absence of any express exclusion in Article 9.1 of the TRIPS Agreement, the incorporation of Articles 11 and 11bis of the Berne Convention (1971) into the Agreement includes the entire acquis of these provisions, including the possibility of providing minor exceptions to the respective exclusive rights.”(2398)

1562.      The Panel in EC — Tariff Preferences also found the existence of an “agreement” within the meaning of Article 31(2)(a):

“From the above factual review, the Panel considers that the 1971 Waiver Decision is intended to cover the Agreed Conclusions. According to Article 31.2(a) of the Vienna Convention, an “agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty” constitutes context of the treaty. The Panel considers that Resolution 21(11) and the Agreed Conclusions establish such an agreement relating to the conclusion of the 1971 Waiver Decision; therefore, they are context for the 1971 Waiver Decision in the sense of Article 31.2(a) of the Vienna Convention. This is confirmed by the fact that the 1971 Waiver Decision itself does not contain any specifics on GSP arrangements.”(2399)

1563.      In EC — Chicken Cuts, the Appellate Body addressed the question of whether the Harmonized Systems and Schedules of Members to the WTO constitutes “context” for interpreting a term under Articles 31(1), 31(2)(b) or 31(3)(c) of the Vienna Convention. After referring to the concept of “context” within the customary rules of treaty interpretation codified in Articles 31(1), 31(2) and 31(3) of the Vienna Convention(2400), the Appellate Body acknowledged that the Harmonized System could serve as “context” under Articles 31(2)(a), 31(2)(b) or possibly 31(3)(c) of the Vienna Convention:

“The Harmonized System is not, formally, part of the WTO Agreement, as it has not been incorporated, in whole or in part, into that Agreement. Nevertheless, the concept of ‘context’, under Article 31, is not limited to the treaty text — namely, the WTO Agreement — but may also extend to ‘any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty’, within the meaning of Article 31 (2)(a) of the Vienna Convention, and to ‘any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty’, within the meaning of Article 31(2)(b) of the Vienna Convention. Moreover, should the criteria in Article 31 (3)(c) be fulfilled, the Harmonized System may qualify as a ‘relevant rule[] of international law applicable in the relations between the parties’”.(2401)

1564.      With these possibilities in mind, the Appellate Body established that the Harmonized System serves as “context” under Article 31(2) (a) for the purpose of interpreting the WTO agreements based on a “close link” between the Harmonized System and the WTO agreements and “broad consensus” among GATT Contracting Parties to use the Harmonized System:

“We note that, in 1983, the GATT Contracting Parties took a Decision setting out guidelines and ‘special procedures’ to facilitate the ‘wide adoption of the Harmonized System’;(2402) later, in 1991, they took a Decision on Procedures to Implement Changes in the Harmonized System.(2403) The close link between the Harmonized System and the WTO agreements is also clear. A number of WTO agreements that resulted from the Uruguay Round negotiations use the Harmonized System for specific purposes; the Agreement on Rules of Origin (in Article 9), the Agreement on Subsidies and Countervailing Measures (in Article 27), and the Agreement on Textiles and Clothing (in Article 2 and the Annex there to) refer to the Harmonized System for purposes of defining product coverage of the agreement or the products subject to particular provisions of the agreement.

 

This close link to the Harmonized System is particularly true for agricultural products.(2404) Annex 1 to the Agreement on Agriculture, which forms an integral part of that Agreement(2405), defines the product coverage of that Agreement by reference to headings of the Harmonized System, both at the level of whole chapters and at the four-digit level in respect of specific products. Moreover, it is undisputed that the Uruguay Round tariff negotiations for agricultural products were held on the basis of the Harmonized System and that all WTO Members have followed the Harmonized System in their Schedules to the GATT 1994 with respect to agricultural products.

 

The above circumstances confirm that, prior to, during, as well as after the Uruguay Round negotiations, there was broad consensus among the GATT Contracting Parties to use the Harmonized System as the basis for their WTO Schedules, notably with respect to agricultural products. In our view, this consensus constitutes an ‘agreement’ between WTO Members ‘relating to’ the WTO Agreement that was ‘made in connection with the conclusion of that Agreement, within the meaning of Article 31(2)(a) of the Vienna Convention. As such, this agreement is ‘context’ under Article 31(2)(a) for the purpose of interpreting the WTO agreements, of which the EC Schedule is an integral part. In this light, we consider that the Harmonized System is relevant for purposes of interpreting tariff commitments in the WTO Members’ Schedules.”(2406)’(2407)

1565.      In China — Raw Materials, the Panel had some difficulty treating a discussion among negotiators as an “agreement” within the meaning of Article 31(2)(a):

“Nor does the Panel find much assistance in the negotiators’ agreement that Article XI:2(a) would cover Australia’s ban on the export on live merino sheep. China posits that this demonstrates that a product may be essential to a Member because of its importance for domestic processing industries. Even if the Panel were to agree that the drafters’ agreement constitutes context within the meaning of Article 31(2)(a) of the Vienna Convention as an “agreement relating to the treaty which was made between all parties in connection with the conclusion of the treaty”, the Panel does not consider China’s identification of Australia’s restriction on merino sheep particularly useful to the Panel’s interpretative exercise.”(2408)’(2409)

 

Article 31(2)(b): “any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty”

1566.      In EC — Chicken Cuts, the Panel stated that the outcome of its interpretative exercise would not be affected depending on whether the Harmonized System was classified as context under Article 31(2)(a) or Article 31(2)(b):

“We do not consider that the outcome of the interpretative exercise we are undertaking with respect to heading 02.10 of the EC Schedule will be affected depending upon whether we classify the HS as “context” under Article 31(2)(b) of the Vienna Convention as submitted by Brazil, or as “context” under Article 31(1) as submitted by Thailand, or as a “relevant rule of international law” under Article 31(3)(c) as submitted by Thailand and the European Communities. Therefore, we will treat the HS as if it qualifies as “context” under Article 31(2), recalling that the Appellate Body in EC — Computer Equipment indicated that the HS should be taken into consideration for the interpretation of a Member’s schedule.”(2410)

1567.      In EC — IT Products, the parties were unanimous in their view that the Information Technology Agreement falls within Article 31(2)(b). The Panel made the following observations:

“Setting aside for the moment whether the ITA is a treaty or not, Article 31(2) recognizes that both “agreements” and “instruments” may qualify as context as long as they meet certain conditions. The Vienna Convention refers to the concepts of “agreement” and “instrument” within the definition of “treaty” above.(2411) The statement by the International Law Commission above implies that a qualifying “instrument”(2412) may even be a unilateral “document” so long as it complies with the additional requirements in Article 31(2)(b) that it was “made in connection with the conclusion of the treaty”, and “its relation to the treaty was accepted in the same manner by the other parties”. In light of this, it is useful to consider whether the ITA is concerned with the substance of the treaty, clarifies concepts in the WTO Agreement, or otherwise limits its field of application, and the extent to which it was drawn up on the occasion of the conclusion of the treaty.

 

At a minimum, the ITA qualifies as an “instrument” for the purposes of Article 31(2)(b).(2413) The ITA was proposed, drafted and agreed to by a subset of WTO Members and states or separate customs territories in the process of acceding to the WTO. ITA participants in turn modified their WTO Schedules, which themselves form part of the WTO Agreement, following the conclusion and signing of the ITA. In this sense, the parties recognized the ITA as an “instrument” as we understand that term.

 

The ITA also represents an instrument “made by one or more parties in connection with the conclusion of the treaty”, where the term “parties” refers to WTO Members. The ITA (formally the Ministerial Declaration on Trade in Information Technology Products) was agreed upon on 13 December 1996 by 15 WTO Members (counting the then 15 EC member States as one), as well as States or separate customs territories in the process of acceding to the WTO. Pursuant to the provisions in the ITA, participants modified their schedules of concessions, which themselves form part of the WTO Agreement. Because the original ITA participants expressly agreed to a process for incorporating ITA-related concessions into their WTO Schedules, the Panel considers that the ITA was clearly made “in connection with the conclusion of the treaty”, as the WTO Members amended their Schedules (which form part of the WTO Agreement) in order to give effect to the ITA.

 

The ITA also meets the requirement of having being “accepted by the other parties as an instrument related to the treaty.” At least three elements demonstrate this. First, the ITA was recognized under paragraph 18 of the Singapore Ministerial Declaration of 13 December 1996 which was adopted by all WTO Members:

 

“Taking note that a number of Members have agreed on a Declaration on Trade in Information Technology Products, we welcome the initiative taken by a number of WTO Members and other States or separate customs territories which have applied to accede to the WTO, who have agreed to tariff elimination for trade in information technology products on an MFN basis …” (emphasis added)

 

This express reference to the ITA in a WTO Ministerial Declaration adopted by consensus by all WTO Members constitutes, in our view, acceptance by WTO Members that the ITA is an instrument related to the WTO Agreement.

 

Second, following the ministerial declaration, ITA participants modified their WTO Schedules of concessions to reflect commitments undertaken pursuant to the ITA. No objections were raised by other WTO Members within the three-month period provided for such purpose to the ITA-related modifications that were proposed by the European Communities and these were, therefore, certified by the Director General of the WTO in document WT/ Let/156.

Third, the EC headnote of the Annex to the EC Schedule, which forms part of the WTO Agreement, makes express reference to the ITA, further suggesting that the ITA is related to the WTO Agreement.

 

For the reasons discussed above, the Panel concludes that the ITA qualifies as an instrument that was made by one or more parties in connection with the conclusion of the treaty and accepted by WTO Members as an instrument related to the treaty. The ITA may thus serve as context within the meaning of Article 31(2)(b) of the Vienna Convention.”(2414)

(v) “in the light of its object and purpose”

1568.      In US — Shrimp, the Appellate Body cautioned against relying too heavily on the object and purpose of a treaty:

“A treaty interpreter must begin with, and focus upon, the text of the particular provision to be interpreted. It is in the words constituting that provision, read in their context, that the object and purpose of the states parties to the treaty must first be sought. Where the meaning imparted by the text itself is equivocal or inconclusive, or where confirmation of the correctness of the reading of the text itself is desired, light from the object and purpose of the treaty as a whole may usefully be sought.”(2415)

1569.      In Canada — Aircraft, the Panel noted that the SCM Agreement does not contain any express statement of its object and purpose, and stated that “[w]e therefore consider it unwise to attach undue importance to arguments concerning the object and purpose of the SCM Agreement”.(2416)

1570.      In US — Export Restraints, the Panel explained how reliance on a treaty’s object and purpose can entail circular reasoning:

“[W]e do not see any contradiction between the said object and purpose of the SCM Agreement and the fact that certain measures that might be commonly understood to be subsidies that distort trade might in fact be excluded from the scope of the Agreement. Indeed, while the object and purpose of the Agreement clearly is to discipline subsidies that distort trade, this object and purpose can only be in respect of “subsidies” as defined in the Agreement.”(2417)

1571.      In US — Softwood Lumber IV, the Appellate Body rejected an interpretation that would permit the circumvention of the SCM Agreement’s disciplines and therefore undermine its object and purpose:

“[T]o accept Canada’s interpretation of the term “goods” would, in our view, undermine the object and purpose of the SCM Agreement, which is to strengthen and improve GATT disciplines relating to the use of both subsidies and countervailing measures, while, recognizing at the same time, the right of Members to impose such measures under certain conditions. It is in furtherance of this object and purpose that Article 1.1(a)(1)(iii) recognizes that subsidies may be conferred, not only through monetary transfers, but also by the provision of non-monetary inputs. Thus, to interpret the term “goods” in Article 1.1(a)(1)(iii) narrowly, as Canada would have us do, would permit the circumvention of subsidy disciplines in cases of financial contributions granted in a form other than money, such as through the provision of standing timber for the sole purpose of severing it from land and processing it.”(2418)

1572.      In EC — Chicken Cuts, the Appellate Body discussed the relationship between the object and purpose of particular provisions and that of the treaty as a whole:

“It is well accepted that the use of the singular word ‘its’ preceding the term ‘object and purpose’ in Article 31(1) of the Vienna Convention indicates that the term refers to the treaty as a whole;(2419) had the term ‘object and purpose’ been preceded by the word ‘their’, the use of the plural would have indicated a reference to particular ‘treaty terms’. Thus, the term ‘its object and purpose’ makes it clear that the starting point for ascertaining ‘object and purpose’ is the treaty itself, in its entirety.(2420) At the same time, we do not believe that Article 31(1) excludes taking into account the object and purpose of particular treaty terms, if doing so assists the interpreter in determining the treaty’s object and purpose on the whole. We do not see why it would be necessary to divorce a treaty’s object and purpose from the object and purpose of specific treaty provisions, or vice versa. To the extent that one can speak of the ‘object and purpose of a treaty provision’, it will be informed by, and will be in consonance with, the object and purpose of the entire treaty of which it is but a component.(2421),(2422)

1573.      However, the Appellate Body in EC — Chicken Cuts cautioned against evaluating the “object and purpose” of specific provisions of a treaty in isolation from the treaty in its entirely:

“Having said this, we caution against interpreting WTO law in the light of the purported ‘object and purpose’ of specific provisions, paragraphs or subparagraphs of the WTO agreements, or tariff headings in Schedules, in isolation from the object and purpose of the treaty on the whole. Even if, arguendo, one could rely on the specific ‘object and purpose’ of heading 02.10 of the EC Schedule in isolation(2423), we would share the Panel’s view that ‘one Member’s unilateral object and purpose for the conclusion of a tariff commitment cannot form the basis’(2424) for an interpretation of that commitment, because interpretation in the light of Articles 31 and 32 of the Vienna Convention(2425) must focus on ascertaining the common intentions of the parties. “(2426)’(2427)

(c) Article 31(3)

(i) “there shall be taken into account”

1574.      The Panel in EC — Approval and Marketing of Biotech Products conducted a detailed analysis of Article 31(3)(c). In the course of its analysis, the Panel considered the meaning of “shall be taken into account” and the function of Article 31(3)(c):

“It is important to note that Article 31(3)(c) mandates a treaty interpreter to take into account other rules of international law (“[t]here shall be taken into account”); it does not merely give a treaty interpreter the option of doing so.(2428) It is true that the obligation is to “take account” of such rules, and thus no particular outcome is prescribed. However, Article 31(1) makes clear that a treaty is to be interpreted “in good faith”. Thus, where consideration of all other interpretative elements set out in Article 31 results in more than one permissible interpretation, a treaty interpreter following the instructions of Article 31(3)(c) in good faith would in our view need to settle for that interpretation which is more in accord with other applicable rules of international law.(2429)

 

Taking account of the fact that Article 31(3)(c) mandates consideration of other applicable rules of international law, and that such consideration may prompt a treaty interpreter to adopt one interpretation rather than another, we think it makes sense to interpret Article 31(3)(c) as requiring consideration of those rules of international law which are applicable in the relations between all parties to the treaty which is being interpreted. Requiring that a treaty be interpreted in the light of other rules of international law which bind the States parties to the treaty ensures or enhances the consistency of the rules of international law applicable to these States and thus contributes to avoiding conflicts between the relevant rules.”(2430)

(ii) Article 31(3)(a): “any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions”

1575.      In Brazil — Desiccated Coconut, the Panel considered that while the Tokyo Round Subsidies Code may be regarded as a subsequent agreement under Article 31(3)(a) regarding the interpretation of the GATT 1947, it cannot be so regarded in respect of the GATT 1994:

“In any event, we do not consider that it would be appropriate to interpret Article VI of GATT 1994 in light of the Tokyo Round SCM Code. Article 31:3(a) of the Vienna Convention on the Law of Treaties (“the Vienna Convention”), which is generally held to reflect customary principles of international law regarding treaty interpretation, provides that “any subsequent agreement between the parties to a treaty regarding its interpretation or the application of its provisions” may betaken into account when interpreting a treaty. The Tokyo Round SCM Code may constitute such a subsequent agreement among Tokyo Round SCM Code signatories regarding the interpretation of Article VI of GATT 1947. However, Article II:4 of the WTO Agreement provides that the GATT 1994 is “legally distinct” from the GATT 1947. While GATT 1994 consists of, inter alia, “decisions of the CONTRACTING PARTIES to GATT 1947,” the Tokyo Round SCM Code is not a “decision” of the CONTRACTING PARTIES. Thus, the Tokyo Round SCM Code does not represent a subsequent agreement regarding interpretation of Article VI of GATT 1994. For the Panel to conclude to the contrary would in effect convert that Code into a “covered agreement” under Appendix 1 of the DSU). If such an approach were followed, WTO Members that were Tokyo Round Code signatories would find that their Code obligations were now enforceable under the WTO dispute settlement system.”(2431)

1576.      In Canada — Patent Term, the Panel found guidance in an unadopted GATT panel’s interpretation of Article 31(3)(a):

“We note Canada’s argument that the parties to the North American Free Trade Agreement (“NAFTA”) accepted the substantive equivalence of the protection offered by two types of protection term. The relevant NAFTA provision cited by Canada states that “[e]ach party shall provide a term of protection for patents of at least twenty years from the date of filing or seventeen years from the date of grant.” We do not consider that the NAFTA provision means that Section 45 of the Canadian Patent Act and Article 33 of the TRIPS Agreement have substantive equivalence of protection. In this regard, we note that the Panel in United States — Restrictions on Imports of Tuna, GATT Doc. DS29/R, 20 May 1994 (unadopted), stated, in relation to Article 31.3(a) of the Vienna Convention, the following:

 

“The Panel recalled that the Vienna Convention provides for a general rule of interpretation (Article 31) and a supplementary means of interpretation (Article 32). The Panel first examined whether, under the general rule of interpretation of the Vienna Convention, the treaties referred to might be taken into account for the purposes of interpreting the General Agreement. The general rule provides that “any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions” is one of the elements relevant to the interpretation of a treaty. However the Panel observed that the agreements cited by the parties to the dispute were bilateral or plurilateral agreements that were not concluded among the contracting parties to the General Agreement, and that they did not apply to the interpretation of the General Agreement or the application of its provisions. Indeed, many of the treaties referred to could not have done so, since they were concluded prior to the negotiation of the General Agreement. The Panel also observed that under the general rule of interpretation in the Vienna Convention account should be taken of “any subsequent practice in the application of the treaty which established the agreement of the parties regarding its interpretation.” However, the Panel noted that practice under the bilateral and plurilateral treaties cited could not be taken as practice under the General Agreement, and therefore could not affect the interpretation of it. The Panel therefore found that under the general rule contained in Article 31 of the Vienna Convention, these treaties were not relevant as a primary means of interpretation of the text of the General Agreement.”(2432)

1577.      In US — Section 211 Appropriations Act, the Panel was faced with a situation in which a previously “agreed interpretation” had may have been reduced in value as a possible interpretative tool under Article 31(3)(a):

“The documents concerning the Lisbon Conference of 1958 provided by WIPO in response to our request make it unequivocally clear that from the very beginning of the Paris Convention’s history, the predecessor provisions to Article 6quinquies had been largely drafted in the same wording but had been since considered somewhat opaque. As a matter of fact, it was necessary, in order to arrive at the final adoption of the predecessor provisions, to adopt an agreed interpretation of that provision in the form of paragraph 4 of the final Protocol of 1883. This agreed interpretation is very clear in stating that the predecessor provision of Article 6quinquies is an exception to the rule that the legislation of the Members of the Union remains applicable and is restricted only to the form of the trademark. Later on, this agreed interpretation was set aside at the Washington Conference of 1911 and this may have reduced its value as a possible interpretative tool under Article 31(3)(a) of the Vienna Convention.”(2433)

1578.      In EC — Bananas III (Article 21.5 — Ecuador II) I EC — Bananas III (Article 21.5 — US), the Appellate Body discussed the relationship between Article IX:2 of the WTO Agreement and Article 31(3)(a):

“Multilateral interpretations of provisions of WTO law are the next method identified above. Article IX:2 of the WTO Agreement sets out specific requirements for decisions that may be taken by the Ministerial Conference or the General Council to adopt interpretations of provisions of the Multilateral Trade Agreements. Such multilateral interpretations are meant to clarify the meaning of existing obligations, not to modify their content. Article IX:2 emphasizes that such interpretations “shall not be used in a manner that would undermine the amendment provisions in Article X”. A multilateral interpretation should also be distinguished from a waiver, which allows a Member to depart from an existing WTO obligation for a limited period of time. We consider that a multilateral interpretation pursuant to Article IX:2 of the WTO Agreement can be likened to a subsequent agreement regarding the interpretation of the treaty or the application of its provisions pursuant to Article 31(3)(a) of the Vienna Convention, as far as the interpretation of the WTO agreements is concerned.”(2434)

1579.      The Appellate Body provided further guidance on Article 31(3)(a):

“We further observe that, in its commentary on the Draft Articles on the Law of Treaties, the International Law Commission (the “ILC”) describes a subsequent agreement within the meaning of Article 31(3)(a) of the Vienna Convention “as a further authentic element of interpretation to be taken into account together with the context”. In our view, by referring to “authentic interpretation”, the ILC reads Article 31(3)(a) as referring to agreements bearing specifically upon the interpretation of a treaty. In the WTO context, multilateral interpretations adopted pursuant to Article IX:2 of the WTO Agreement are most akin to subsequent agreements within the meaning of Article 31(3)(a) of the Vienna Convention, but not waivers adopted pursuant to Articles IX:3 and 4 of the WTO Agreement.

 

… In our view, the term “application” in Article 31(3)(a) relates to the situation where an agreement specifies how existing rules or obligations in force are to be “applied”; the term does not connote the creation of new or the extension of existing obligations that are subject to a temporal limitation and are to expire. We find the Panel’s conclusion that the Doha Article I Waiver extended the duration of the tariff quota concession beyond 31 December 2002, and thereby modified or changed the content of the European Communities’ Schedule, difficult to reconcile with its conclusion that the Waiver should be considered an agreement on the application of existing commitments contained in that Schedule. As such, we do not consider that the Doha Article I Waiver could be regarded as an agreement on the application of the tariff quota concession in the European Communities’ Schedule within the meaning of Article 31(3)(a) of the Vienna Convention.”(2435)

1580.      In US — Clove Cigarettes, the parties disagreed on the legal status of paragraph 5.2 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns (WT/MIN(01)/17), which provides guidance on the meaning of the term “reasonable interval” in Article 2.12 of the TBT Agreement.(2436) The Panel considered it unnecessary to take a definite position on whether paragraph 5.2 amounted to an authoritative interpretation within the meaning of Article IX:2 of the WTO Agreement, a subsequent agreement under Article 31(3)(a) of the Vienna Convention, or supplementary means of interpretation under Article 32 of the Vienna Convention. In the course of its analysis, the Panel stated that:

“Although the parties disagree on the categorization of paragraph 5.2 of the Doha Ministerial Decision as an authoritative interpretation under Article IX:2 of the WTO Agreement, this Panel deems that it must be guided by it in its interpretation of the phrase “reasonable interval”, as it was agreed by all WTO Members meeting in the form of Ministerial Conference, the highest ranking body of the WTO. Furthermore, the Panel is of the view that paragraph 5.2 of the Doha Ministerial Decision could be considered as a subsequent agreement of the parties within the meaning of Article 31(3)(a) of the VCLT,(2437) on the interpretation of “reasonable interval” within Article 2.12 of the TBT Agreement.”(2438),(2439)

(iii) Article 31(3)(b): “any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation”

1581.      In Japan — Alcoholic Beverages II, the Panel found that “panel reports adopted by the CONTRACTING PARTIES constitute subsequent practice in a specific case”. The Appellate Body disagreed(2440) and, in reversing the Panel’s findings on this issue, considered “subsequent practice” to mean a “concordant, common and consistent” sequence of acts:

“Article 31(3)(b) of the Vienna Convention states that ‘any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation’ is to be ‘taken into account together with the context’ in interpreting the terms of the treaty. Generally, in international law, the essence of subsequent practice in interpreting a treaty has been recognized as a ‘concordant, common and consistent’ sequence of acts or pronouncements which is sufficient to establish a discernable pattern implying the agreement of the parties regarding its interpretation. An isolated act is generally not sufficient to establish subsequent practice; it is a sequence of acts establishing the agreement of the parties that is relevant.”(2441)’(2442)

1582.      In US — Gambling, the Appellate Body clarified that establishing “subsequent practice” within the meaning of Article 31(3)(b) involves two elements:

“… (i) there must be a common, consistent, discernible pattern of acts or pronouncements; and (ii) those acts or pronouncements must imply agreement on the interpretation of the relevant provision.”(2443)

1583.      The Appellate Body in EC — Chicken Cuts discussed the relevance of subsequent practice to treaty interpretation:

“[W]e observe that ‘subsequent practice’ in the application of a treaty may be an important element in treaty interpretation because ‘it constitutes objective evidence of the understanding of the parties as to the meaning of the treaty’.”(2444)’(2445)

1584.      Moreover, the Appellate Body in EC — Chicken Cuts explained that “common” and “concordant” practice does not necessarily require practice by all parties:

“We share the Panel’s view that not each and every party must have engaged in a particular practice for it to qualify as a “common” and “concordant” practice. Nevertheless, practice by some, but not all parties is obviously not of the same order as practice by only one, or very few parties. To our mind, it would be difficult to establish a “concordant, common and discernible pattern” on the basis of acts or pronouncements of one, or very few parties to a multilateral treaty, such as the WTO Agreement. We acknowledge, however, that, if only some WTO Members have actually traded or classified products under a given heading, this circumstance may reduce the availability of such “acts and pronouncements” for purposes of determining the existence of “subsequent practice” within the meaning of Article 31(3)(b).”

1585.      In EC — Chicken Cuts, the Appellate Body addressed the question of how to establish agreement of the parties regarding interpretation of a treaty term when these parties have not engaged in a practice. The Appellate Body explained that agreement may be deduced from the affirmative reaction of a treaty party, but not from a party’s “lack of reaction” without further inquiry into attendant circumstances:

“We agree with the Panel that, in general, agreement may be deduced from the affirmative reaction of a treaty party. However, we have misgivings about deducing, without further inquiry, agreement with a practice from a party’s “lack of reaction”. We do not exclude that, in specific situations, the “lack of reaction” or silence by a particular treaty party may, in the light of attendant circumstances, be understood as acceptance of the practice of other treaty parties.(2446) Such situations may occur when a party that has not engaged in a practice has become or has been made aware of the practice of other parties (for example, by means of notification or by virtue of participation in a forum where it is discussed), but does not react to it. However, we disagree with the Panel that “lack of protest” against one Member’s classification practice by other WTO Members maybe understood, on its own, as establishing agreement with that practice by those other Members.”(2447)

1586.      The Appellate Body in EC — Chicken Cuts, however, rejected the view that Article IX:2 of the WTO Agreement is dispositive to determining whether agreement exists by Members that have not yet engaged in a practice:

“To our mind, the existence of Article IX:2 of the WTO Agreement is not dispositive for resolving the issue of how to establish the agreement by Members that have not engaged in a practice. We fail to see how the express authorization in the WTO Agreement for Members to adopt interpretations of WTO provisions-which requires a three-quarter majority vote and not a unanimous decision — would impinge upon recourse to subsequent practice as a tool of treaty interpretation under Article 31(3)(b) of the Vienna Convention. In any case, we are mindful that the Appellate Body, in Japan — Alcoholic Beverages II, cautioned that relying on “subsequent practice” for purposes of interpretation must not lead to interference with the “exclusive authority” of the Ministerial Conference and the General Council to adopt interpretations of WTO agreements that are binding on all Members.(2448) In our view, this confirms that “lack of reaction” should not lightly, without further inquiry into attendant circumstances of a case, be read to imply agreement with an interpretation by treaty parties that have not themselves engaged in a particular practice followed by other parties in the application of the treaty. This is all the more so because the interpretation of a treaty provision on the basis of subsequent practice is binding on all parties to the treaty, including those that have not actually engaged in such practice.”(2449)

(iv) Article 31(3)(c): “any relevant rules of international law applicable in the relations between the parties”

1587.      In US — Shrimp, the Appellate Body stated that “our task here is to interpret the language of the chapeau [of Article XX of the GATT 1994], seeking additional interpretative guidance, as appropriate, from the general principles of international law” and referred to Article 31(3)(c) in a footnote.(2450)

1588.      In Brazil — Aircraft (Article 22.6 — Brazil), the Arbitrators referred to the ILC Articles on State Responsibility in the context of interpreting the term “countermeasures” in Articles 4.10 and 4.11 of the SCM Agreement. Canada objected, arguing that the ILC Articles on State Responsibility are not “relevant rules of international law applicable to the relations between the parties” within the meaning of Article 313(c) of the Vienna Convention. The Arbitrators responded that “we use the Draft Articles as an indication of the agreed meaning of certain terms in general international law.”(2451)

1589.      In US — Shrimp (Article 21.5 — Malaysia), the Panel stated that:

“[W]e note that the Appellate Body, like the Original Panel, referred to a number of international agreements, many of which have been ratified or otherwise accepted by the parties to this dispute. Article 31.(3)(c) of the Vienna Convention provides that, in interpreting a treaty, there shall be taken into account, together with the context, “any relevant rule of international law applicable to the relations between the parties”. We note that, with the exception of the Bonn Convention on the Conservation of Migratory Species of Wild Animals (CMS), Malaysia and the United States have accepted or are committed to comply with all of the international instruments referred to by the Appellate Body in paragraph 168 of its Report.”(2452)

1590.      In Argentina — Poultry Anti-Dumping Duties, Argentina raised as a preliminary issue that prior to bringing WTO dispute settlement proceedings against Argentina’s anti-dumping measure, Brazil had challenged that measure before a MERCOSUR Ad Hoc Arbitral Tribunal. Argentina requested that, in light of the prior MERCOSUR proceedings, the Panel refrain from ruling on the claims raised by Brazil in the present WTO dispute settlement proceedings. In the alternative, Argentina asserted that the Panel should be bound by the ruling of the MERCOSUR Tribunal.(2453)Argentina claimed that the earlier MERCOSUR ruling was part of the normative framework to be applied by the Panel as a result of Article 31(3)(c) of the Vienna Convention, whereby “relevant rules of international law applicable in the relations between the parties” shall be taken into account for the purpose of treaty interpretation. The Panel disagreed with Argentina and pointed out that Article 3.2 of the DSU is concerned with international rules of treaty interpretation rather than of treaty application:

“We note that Article 3.2 of the DSU is concerned with international rules of treaty interpretation. Article 31.3(c) of the Vienna Convention is similarly concerned with treaty interpretation. However, Argentina has not sought to rely on any law providing that, in respect of relations between Argentina and Brazil, the WTO agreements should be interpreted in a particular way. In particular, Argentina has not relied on any statement or finding in the MERCOSUR Tribunal ruling to suggest that we should interpret specific provisions of the WTO agreementsin a particular way. Rather than concerning itself with the interpretation of the WTO agreements, Argentina actually argues that the earlier MERCOSUR Tribunal ruling requires us to rule in a particular way. In other words, Argentina would have us apply the relevant WTO provisions in a particular way, rather than interpret them in a particular way. However, there is no basis in Article 3.2 of the DSU, or any other provision, to suggest that we are bound to rule in a particular way, or apply the relevant WTO provisions in a particular way. We note that we are not even bound to follow rulings contained in adopted WTO panel reports(2454), so we see no reason at all why we should be bound by the rulings of non-WTO dispute settlement bodies. Accordingly, we reject Argentina’s alternative arguments regarding Article 31.3(c) of the Vienna Convention.”(2455),(2456)

1591.      The Panel in Argentina — Poultry Anti-Dumping Duties added that:

“Even if Argentina had relied on the MERCOSUR Tribunal ruling to argue that particular provisions of the WTO Agreement should be interpreted in a particular way, it is not entirely clear that Article 31.3(c) of the Vienna Convention would apply. In particular, it is not clear to us that a rule applicable between only several WTO Members would constitute a relevant rule of international law applicable in the relations between the “parties”.”(2457)

1592.      In US — Gambling, the Panel stated that:

“Under Article 31.3(c) of the Vienna Convention, the Panel could also examine whether “any other relevant rules of international law” could be applicable in the interpretation of the terms used in the US Schedule. This could, for instance, lead the panel to examine the US Schedule in light of the effective treaty interpretation principle. The Panel will, however, refer to the effective treaty interpretation principle pursuant to the first sentence of Article 31. The Panel will also examine other principles of interpretation, as supplementary means of interpretation, pursuant to Article 32 of the Vienna Convention.”(2458)

1593.      In EC — Chicken Cuts, the Appellate Body found that the consensus among GATT Contracting Parties to use the Harmonized System as the basis for their WTO Schedules constitutes an “agreement” within the meaning of Article 31(2)(a) of the Vienna Convention. In the light of this conclusion, the Appellate Body, like the Panel in that dispute, did not find it necessary to determine whether the Harmonized System could constitute a “relevant rule of international law” within the meaning of Article 31(3)(c) of the Vienna Convention.(2459)

1594.      The Panel in EC — Approval and Marketing of Biotech Products conducted a detailed analysis of Article 31(3)(c). In the course of its analysis, the Panel considered the sources of public international law covered by “rules of international law”, the meaning of “the parties”, and what it considered to be the separate issue of having reference to other rules of international law for the purpose of determining the “ordinary meaning” of a term under Article 31(1). Beginning with the sources of public international law covered by “rules of international law”, the Panel took an inclusive approach:

“Article 31(3)(c) directly speaks to the issue of the relevance of other rules of international law to the interpretation of a treaty. In considering the provisions of Article 31(3)(c), we note, initially, that it refers to “rules of international law”. Textually, this reference seems sufficiently broad to encompass all generally accepted sources of public international law, that is to say, (i) international conventions (treaties), (ii) international custom (customary international law), and (iii) the recognized general principles of law. In our view, there can be no doubt that treaties and customary rules of international law are “rules of international law” within the meaning of Article 31(3)(c). We therefore agree with the European Communities that a treaty like the Biosafety Protocol would qualify as a “rule of international law”. Regarding the recognized general principles of law which are applicable in international law, it may not appear self-evident that they can be considered as “rules of international law” within the meaning of Article 31(3)(c). However, the Appellate Body in US — Shrimp made it clear that pursuant to Article 31(3)(c) general principles of international law are to be taken into account in the interpretation of WTO provisions.(2460) As we mention further below, the European Communities considers that the principle of precaution is a “general principle of international law”. Based on the Appellate Body report on US — Shrimp, we would agree that if the precautionary principle is a general principle of international law, it could be considered a “rule of international law” within the meaning of Article 31 (3)(c).”(2461)

1595.      The Panel in EC — Approval and Marketing of Biotech Products the considered the meaning of the term “the parties” in Article 31(3)(c):

“Furthermore, and importantly, Article 31(3)(c) indicates that it is only those rules of international law which are “applicable in the relations between the parties” that are to be taken into account in interpreting a treaty. This limitation gives rise to the question of what is meant by the term “the parties”. In considering this issue, we note that Article 31(3)(c) does not refer to “one or more parties”.(2462) Nor does it refer to “the parties to a dispute”.(2463) We further note that Article 2.1(g) of the Vienna Convention defines the meaning of the term “party” for the purposes of the Vienna Convention. Thus, “party” means “a State which has consented to be bound by the treaty and for which the treaty is in force”. It may be inferred from these elements that the rules of international law applicable in the relations between “the parties” are the rules of international law applicable in the relations between the States which have consented to be bound by the treaty which is being interpreted, and for which that treaty is in force.(2464) This understanding of the term “the parties” leads logically to the view that the rules of international law to be taken into account in interpreting the WTO agreements at issue in this dispute are those which are applicable in the relations between the WTO Members.(2465)

 

 

The European Communities appears to suggest that we must interpret the WTO agreements at issue in this dispute in the light of other rules of international law even if these rules are not binding on all Parties to this dispute.(2466) In addressing this argument, we first recall our view that Article 31(3)(c) should be interpreted to mandate consideration of rules of international law which are applicable in the relations between all parties to the treaty which is being interpreted.(2467) The parties to a dispute over compliance with a particular treaty are, of course, parties to that treaty. In relation to the present dispute it can thus be said that if a rule of international law is not applicable to one of the four WTO Members which are parties to the present dispute, the rule is not applicable in the relations between all WTO Members. Accordingly, based on our interpretation of Article 31(3)(c), we do not consider that in interpreting the relevant WTO agreements we are required to take into account other rules of international law which are not applicable to one of the Parties to this dispute. But even independently of our own interpretation, we think Article 31(3)(c) cannot reasonably be interpreted as the European Communities suggests. Indeed, it is not apparent why a sovereign State would agree to a mandatory rule of treaty interpretation which could have as a consequence that the interpretation of a treaty to which that State is a party is affected by other rules of international law which that State has decided not to accept.(2468)

 

Before applying our interpretation of Article 31(3)(c) to the present case, it is important to note that the present case is not one in which relevant rules of international law are applicable in the relations between all parties to the dispute, but not between all WTO Members, and in which all parties to the dispute argue that a multilateral WTO agreement should be interpreted in the light of these other rules of international law. Therefore, we need not, and do not, take a position on whether in such a situation we would be entitled to take the relevant other rules of international law into account.”(2469)

1596.      The Panel in EC — Approval and Marketing of Biotech Products also discussed what it considered to be the separate issue of having reference to other rules of international law for the purpose of determining the “ordinary meaning” of a term under Article 31(1):

“The Panel recalls that pursuant to Article 31(1) of the Vienna Convention, the terms of a treaty must be interpreted in accordance with the “ordinary meaning” to be given to these terms in their context and in the light of its object and purpose. The ordinary meaning of treaty terms is often determined on the basis of dictionaries. We think that, in addition to dictionaries, other relevant rules of international law may in some cases aid a treaty interpreter in establishing, or confirming, the ordinary meaning of treaty terms in the specific context in which they are used.(2470) Such rules would not be considered because they are legal rules, but rather because they may provide evidence of the ordinary meaning of terms in the same way that dictionaries do.(2471) They would be considered for their informative character. It follows that when a treaty interpreter does not consider another rule of international law to be informative, he or she need not rely on it.

 

In the light of the foregoing, we consider that a panel may consider other relevant rules of international law when interpreting the terms of WTO agreements if it deems such rules to be informative. But a panel need not necessarily rely on other rules of international law, particularly if it considers that the ordinary meaning of the terms of WTO agreements may be ascertained by reference to other elements.

 

This approach is consistent with the Appellate Body’s approach in US — Shrimp, as we understand it. In that case, the Appellate Body had to interpret the term “exhaustible natural resources” in Article XX(g) of the GATT 1994. The Appellate Body found that this term was by definition evolutionary and therefore found it “pertinent to note that modern international conventions and declarations make frequent references to natural resources as embracing both living and non-living resources”.(2472) Thus, as we understand it, the Appellate Body drew on other rules of international law because it considered that they were informative and aided it in establishing the meaning and scope of the term “exhaustible natural resources”.(2473) The European Communities correctly points out that the Appellate Body referred to conventions which were not applicable to all disputing parties. However, the mere fact that one or more disputing parties are not parties to a convention does not necessarily mean that a convention cannot shed light on the meaning and scope of a treaty term to be interpreted.(2474)

 

In the present case, in response to a question from the Panel, the European Communities has identified a number of provisions of the Convention on Biological Diversity and of the Biosafety  Protocol which it considers must be taken into account by the Panel. The European Communities has not explained how these provisions are relevant to the interpretation of the WTO agreements at issue in this dispute. We have carefully considered the provisions referred to by the European Communities. Ultimately, however, we did not find it necessary or appropriate to rely on these particular provisions in interpreting the WTO agreements at issue in this dispute.

 

Furthermore, we recall that after consulting the Parties, we have requested several international organizations (Codex, FAO, the IPPC Secretariat, WHO, OIE, the CBD Secretariat and UNEP) to identify materials (reference works, glossaries, official documents of the relevant international organizations, including conventions, standards and guidelines, etc.) that might aid us in determining the ordinary meaning of certain terms used in the definitions provided in Annex A to the SPS Agreement. The materials we have obtained in this way have been taken into account by us, as appropriate.”(2475)

1597.      In US/Canada — Continued Suspension, the Panel implied that even if a principle of international law may not be directly applicable in WTO dispute settlement, it could be taken into account in the interpretative process through Article 31(3)(c):

“We note that what the European Communities claims in this respect is the existence of a presumption of good faith compliance based on the international law principle of good faith. We are mindful of the position expressed by the United States that the impact of general international law on the DSU is limited to the application of the customary rules of interpretation of public international law embodied in the Vienna Convention on the Law of Treaties (cf. Article 3.2 of the DSU). However, we note that Article 31.3(c) provides that

 

“[t]here shall betaken into account, together with the context: … (c) any relevant rule of international law applicable to the relations between the parties.”

 

Having regard to the overarching nature of the principle of good faith in international legal relations, we deem it appropriate to determine first whether there is any basis in public international law for the principle to which the European Communities refers. If this is the case, we will then proceed with determining whether the WTO Agreement in general and the DSU in particular exclude the application of this principle. “(2476)

1598.      In US — Anti-Dumping and Countervailing Duties (China), the Appellate Body interpreted the term “public body” in Article 1.1(a)(1) of the SCM Agreement in the light of the ILC Articles on State Responsibility. The Appellate Body began by noting that:

“In interpreting the term “public body”, we next turn to consider — in accordance with Article 31(3)(c) of the Vienna Convention — any relevant rules of international law applicable in the relations between the parties”….

 

 

“We note that Article 31(3)(c) of the Vienna Convention, quoted above, contains three elements. First, it refers to “rules of international law”; second, the rules must be “relevant”; and third, such rules must be “applicable in the relations between the parties”. We will address these three elements in turn.

 

First, the reference to “rules of international law” corresponds to the sources of international law in Article 38(1) of the Statute of the International Court of Justice and thus includes customary rules of international law as well as general principles of law.(2477) Second, in order to be relevant, such rules must concern the same subject matter as the treaty terms being interpreted. To the extent that Articles 4, 5, and 8 of the ILC Articles concern the same subject matter as Article 1.1(a)(1) of the SCM Agreement, they would be “relevant” in the sense of Article 31(3)(c) of the Vienna Convention. With respect to the third requirement, the question is whether the ILC Articles are “applicable in the relations between the parties”. We observe that Articles 4, 5, and 8 of the ILC Articles are not binding by virtue of being part of an international treaty. However, insofar as they reflect customary international law or general principles of law, these Articles are applicable in the relations between the parties.”(2478),(2479)

1599.      In US — Anti-Dumping and Countervailing Duties (China), the Appellate Body criticized the Panel’s reluctance to take the ILC Articles on State Responsibility into account, as well as the Panel’s interpretation of prior cases:

“In our view, the Panel misconstrued the role of the ILC Articles when it set out to analyze “whether [the ILC Articles] would override [the Panel’s] analysis and conclusions based on the text of the SCM Agreement itself”. The question is not whether intermediate results of one element of the interpretative exercise “override” the results of another. Rules of international law within the meaning of Article 31(3)(c) are one of several means to ascertain the common intention of the parties to a particular agreement reflected in Article 31 of the Vienna Convention.

 

We are puzzled by the Panel’s statement that the ILC Articles have been cited by panels and the Appellate Body “as conceptual guidance only to supplement or confirm, but not to replace, the analyses based on the ordinary meaning, context and object and purpose of the relevant covered Agreements”. The Panel elaborated that, while in some WTO disputes the ILC Articles “have been cited as containing similar provisions to those in certain areas of the WTO Agreement, in others they have been cited by way of contrast with the provisions of the WTO Agreement, as a way to better understand the possible meaning of the provisions of the WTO Agreement”. The Panel considered this to indicate that panels and the Appellate Body have not considered the ILC Articles to constitute rules of international law in the sense of Article 31(3)(c). To us, this demonstrates the opposite. If, as the Panel states, certain ILC Articles have been “cited as containing similar provisions to those in certain areas of the WTO Agreement” or “cited by way of contrast with the provisions of the WTO Agreement”, this evinces that these ILC Articles have been “taken into account” in the sense of Article 31(3)(c) by panels and the Appellate Body in these cases.”(2480)

1600.      Furthermore, in US — Anti-Dumping and Countervailing Duties (China) the Appellate Body disagreed with the Panel’s statement that the ILC Articles on State Responsibility would be “superseded” by Article 1.1(a)(1) of the SCM Agreement as lex specialis pursuant to Article 55 of the ILC Articles, and drew a distinction between reference to other rules of international law to interpret a provision versus the direct application of those other rules:

“As we see it, Article 55 of the ILC Articles does not speak to the question of whether, for the purpose of interpreting Article 1.1(a)(1) of the SCM Agreement, a panel or the Appellate Body can take into account provisions of the ILC Articles. Article 55 stipulates that “[t]hese articles do not apply where …”.Article 55 addresses the question of which rule to apply where there are multiple rules addressing the same subject matter. The question in the present case, however, is not whether certain of the ILC Articles are to be applied, that is, whether attribution of conduct of the SOEs and SOCBs at issue to the Government of China is to be assessed pursuant to the ILC Articles instead of Article 1.1(a)(1) of the SCM Agreement. There is no doubt that the provision being applied in the present case is Article 1.1(a)(1). Rather, the question is, whether, when interpreting the terms of Article 1.1(a)(1), the relevant provisions of the ILC Articles may be taken into account as one among several interpretative elements. Thus, the treaty being applied is the SCM Agreement, and the attribution rules of the ILC Articles are to be taken into account in interpreting the meaning of the terms of that treaty. Article 55 of the ILC Articles does not speak to the issue of how the latter should be done.”(2481)

1601.      As regards the principle of non-retroactivity in Article 28 of the Vienna Convention, the Panel in EC and certain member States — Large Civil Aircraft considered it unnecessary to resolve the disagreement between on the parties on whether Article 28 can only be given effect as a rule of interpretation through Article 31(3)(c), or whether it may be applied as a general principle of international law independently of Article 31(3)(c) of the VCLT:

“The principle of non-retroactivity embodied in Article 28 of the VCLT has been recognized by the Appellate Body to be a “general principle of international law” relevant to the interpretation of obligations contained in the WTO Agreements in many disputes. The United States’ comment appears to have given rise to a disagreement between the parties as to the basis on which Article 28 of the VCLT may be applied by the Panel. The United States maintains that Article 28 can only be given effect as a rule of interpretation through Article 31.3(c) of the VCLT, while the European Communities appears to consider this approach too narrow and suggests that Article 28 of the VCLT may be given effect as a general principle of international law, independently of Article 31.3(c) of the VCLT. In our view, it is unnecessary to engage in this debate, as neither party disputes that the interpretation of Article 5 of the SCM Agreement should be consistent with the principle of non-retroactivity embodied in Article 28 of the VCLT. We therefore have made revisions … to clarify that we interpret Article 5 of the SCM Agreement consistently with the principle of non-retroactivity embodied in Article 28 of the VCLT, in accordance with the approach taken by the Appellate Body in prior disputes.”(2482)

1602.      In EC and certain member States — Large Civil Aircraft, the European Communities argued that the Panel should exclude all pre-1992 subsidies from its analysis because, in a bilateral agreement between the European Communities and the United States (the “1992 Agreement”), the parties had agreed to waive their right to challenge any subsidies granted prior to 1992. In that regard, the European Communities argued that the Panel should treat the 1992 Agreement as a “relevant rule of international law applicable in the relations between the parties” under Article 31(3)(c) that should affect the “interpretation” of the “temporal scope of this proceeding”. The Panel rejected the European Communities’ argument:

“The European Communities argues that the Panel should take the 1992 Agreement into consideration in its interpretation of the temporal scope of application of the SCM Agreement for purposes of this dispute. The European Communities argues that Article 31(3)(c) of the VCLT provides a basis for us to do so, because the 1992 Agreement constitutes a relevant rule of international law applicable in the relations between the parties. Although presented as an argument relating to the ‘interpretation’ of the SCM Agreement, the European Communities has not specifically indicated how the 1992 Agreement should influence our interpretation of the actual terms in Article 5 of the SCM Agreement, other than to argue that we should ‘interpret’ a particular temporal scope of application of the SCM Agreement for this dispute because the parties agreed in Article 2 of the 1992 Agreement to exclude pre-1992 measures from GATT/WTO dispute settlement proceedings. In reality, this is an argument that a particular group of measures (i.e., support measures for large civil aircraft committed by either of the parties prior to 17 July 1992) should be excluded from the disciplines of the SCM Agreement based on the 1992 Agreement, rather than an argument about the interpretation of provisions of the SCM Agreement, or of specific terms within those provisions.

 

It is not necessary for us to determine whether, for purposes of Article 31 (3)(c) of the VC LT, the 1992 Agreement constitutes applicable law between the parties that we must take into account in interpreting the SCM Agreement.(2483) Even if it were (and we emphasize that on this issue we express no view), as we have previously indicated, we do not agree with the European Communities that the 1992 Agreement constitutes an agreement between the parties to ‘grandfather’ pre-1992 measures of support for large civil aircraft for the purposes of subsequent GATT/WTO proceedings. Consequently, even if we were to interpret the temporal scope of the SCM Agreement ‘taking into account’ the 1992 Agreement pursuant to Article 31 (3)(c) of the VCLT, there is nothing in the 1992 Agreement that would lead us to ‘interpret’ the SCM Agreement as not applying to measures of support to large civil aircraft committed by the parties prior to 17 July 1992. “(2484)

1603.      In EC and certain member States — Large Civil Aircraft, the European Communities also argued that the Panel’s assessment of whether launch aid / member state financing (LA/MSF) conferred a “benefit” within the meaning of Article 1.1(b) of the SCM Agreement must be informed by the benchmark levels of support agreed to in the 1992 Agreement. In that regard, the European Communities again argued that the Panel should treat the 1992 Agreement as a “relevant rule of international law applicable in the relations between the parties” under Article 31(3)(c). The Panel again rejected the European Communities’ argument:

“Although the European Communities argues that Article 4 serves as relevant context for the interpretation of the notion of “benefit”, it has not explained exactly how it informs the meaning that must be given to this term. Rather, a large part of the European Communities’ submissions on this subject are devoted to demonstrating that the post-1992 LA/MSF measures comply with the terms of Article 4 of the 1992 Agreement. In this light, it is not entirely clear to us how the European Communities believes the meaning of the word “benefit” in Article 1.1(b) of the SCM Agreement is informed by Article 4 of the 1992 Agreement.

 

As we have previously noted, Article 4 establishes a set of qualitative and quantitative parameters for the provision of support for the development of new LCA or derivative programmes. It identifies the dividing line that was agreed between the United States and the European Communities for acceptable and prohibited “development support” under that Agreement. It contains no definition of a “subsidy” nor does it make any reference to the notion of “benefit”. Thus, we see nothing in the language of Article 4 to suggest that it in forms the meaning of Article 1.1(b) of the SCM Agreement. Moreover, we cannot simply assume, on the basis of the arguments presented by the European Communities, that “development support” measures taken in compliance with Article 4 of the 1992 Agreement do not have the characteristics of “financial contributions” that confer a “benefit”, within the meaning of Article 1.1 of the SCM Agreement. Thus, even assuming that the 1992 Agreement were an instrument containing relevant rules of international law applicable between the parties, within the meaning of Article 31(3)(c) of the VCLT (and once again, we emphasize that on this question, we express no view),(2485) we are not convinced that Article 4 of that Agreement provides any guidance on how to interpret the concept of “benefit” under Article 1.1(b) of the SCM Agreement. Consequently, we dismiss the European Communities’ argument that the benchmark to be applied when assessing whether LA/MSF confers a “benefit” should, in effect, be Article 4 of the 1992 Agreement.”(2486)

1604.      In EC and certain member States — Large Civil Aircraft, the Appellate Body agreed with the Panel that the 1992 Agreement was not relevant to the interpretation of Article 1.1(b) of the SCM Agreement. In the course of its analysis, the Appellate Body provided the following guidance on Article 31(3)(c):

“To qualify under Article 31(3)(c), the 1992 Agreement would therefore have to be a “rule{} of international law”, which is “relevant” and “applicable in the relations between the parties”. Moreover, even assuming the 1992 Agreement were to fulfil these conditions, the chapeau to Article 31(3)(c) specifies the normative weight to be ascribed to the 1992 Agreement, namely that it is to be “taken into account” in interpreting the SCM Agreement.

 

 

We note that the meaning of the term “the parties” in Article 31(3)(c) of the Vienna Convention has in recent years been the subject of much academic debate and has been addressed by the ILC.(2487) While the participants refer to WTO panels that have addressed its meaning(2488), the Appellate Body has made no statement as to whether the term “the parties” in Article 31(3)(c) refers to all WTO Members, or rather to a subset of Members, such as the parties to the dispute.

 

An interpretation of “the parties” in Article 31(3)(c) should be guided by the Appellate Body’s statement that “the purpose of treaty interpretation is to establish the common intention of the parties to the treaty.”(2489) This suggests that one must exercise caution in drawing from an international agreement to which not all WTO Members are party.(2490) At the same time, we recognize that a proper interpretation of the term “the parties” must also take account of the fact that Article 31(3)(c) of the Vienna Convention is considered an expression of the “principle of systemic integration”(2491) which, in the words of the ILC, seeks to ensure that “international obligations are interpreted by reference to their normative environment”(2492) in a manner that gives “coherence and meaningfulness”(2493) to the process of legal interpretation. In a multilateral context such as the WTO, when recourse is had to a non-WTO rule for the purposes of interpreting provisions of the WTO agreements, a delicate balance must be struck between, on the one hand, taking due account of an individual WTO Member’s international obligations and, on the other hand, ensuring a consistent and harmonious approach to the interpretation of WTO law among all WTO Members.

 

In this dispute, the resolution of the European Union’s arguments regarding the 1992 Agreement need not turn on the proper meaning to be ascribed to the term “the parties”. Even accepting the European Union’s argument that the 1992 Agreement is “applicable in the relations between the parties”, we recall that for the 1992 Agreement to qualify under Article 31(3)(c) of the Vienna Convention, it must be shown to be “relevant”. A rule is “relevant” if it concerns the subject matter of the provision at issue.(2494)

 

 

we do not consider Article 4 of the 1992 Agreement to be relevant to the specific question that must be examined under Article 1.1(b) of the SCM Agreement, that is, whether the amount to be paid by the recipient of the government loan is lower than the amount that would be paid for a comparable commercial loan.

 

 

For the foregoing reasons, we find that Article 4 of the 1992 Agreement is not a “relevant” rule of international law applicable in the relations between the parties, within the meaning of Article 31(3)(c) of the Vienna Convention, that informs the meaning of “benefit” under Article 1.1(b) of the SCM Agreement, and that Article does not form “part of the facts to establish the relevant market benchmark”.”(2495)

1605.      The Panel in China — Raw Materials referred to Article 31(3)(c) in the context of finding that the requirements of Article XX(g) of the GATT 1994 can be interpreted harmoniously with the international law principle of State sovereignty over its natural resources:

“In our view, the Panel must take into account in interpreting Article XX(g) principles of general international law applicable to WTO Members.(2496) Article 31(3)(c) of the Vienna Convention provides that in interpreting a treaty, there shall be taken into account together with the context “any relevant rules of international law applicable in the relations between the parties”.

 

One of the fundamental principles of international law is the principle of state sovereignty, denoting the equality of all states in competence and independence over their own territories and encompassing the right to make laws applicable within their own territories without intrusion from other sovereign states.”(2497)

(d) Article 31(4): “special meaning”

1606.      The Panel in India — Quantitative Restrictions stated that:

“Footnote 1 to the 1994 Understanding on Balance-of-Payments Provisions provides that the WTO dispute settlement provisions “may be invoked with respect to any matters arising from the application of restrictive measures taken for balance-of-payments purposes”. India claims that our interpretation of the footnote deprives the term “application” of any useful effect. We disagree. We identified the ordinary meaning of the terms which is confirmed by their context and the object and purpose of the WTO Agreement, whereas India’s interpretation could be considered rather to support a special meaning (within the meaning of Article 31.4 of the Vienna Convention on the Law of Treaties of 1969 — hereinafter the “Vienna Convention”), in respect of which it has not proved that there was an agreement of the negotiators.”(2498)

1607.      In Mexico — Telecoms, the Panel, in the process of considering the meaning of various telecommunications terms (such as linking and interconnection), decided that they should be given a “special meaning” within the meaning of Article 31(4) of the Vienna Convention. The Panel concluded that, given that the provision at issue was a technical one that appeared in a specialized service sector, the Panel was “entitled to examine what ‘special meaning’ it may have in the telecommunications context”.(2499) The Panel stated that “[w]e consider that Article 31(4) includes cases in which the term at issue is a technical one that is in common use in its field, and which the parties can be presumed to have been aware of’.(2500)

1608.      The Panel in EC — Chicken Cuts took note of the fact that “none of the parties have referred to Article 31(4) of the Vienna Convention. Nor have they advanced any argumentation to suggest that a “special meaning” of the term “salted” in the concession contained in heading 02.10 of the EC Schedule exists.”(2501)

1609.      The Panel in EC — Approval and Marketing of Biotech Products conducted a detailed analysis of Article 31(3)(c). In the course of its analysis, the Panel made reference to Article 31(4):

“A treaty interpreter would have to keep in mind, of course, that other rules of international law may be negotiated rules and, as such, may assign meanings to particular terms which may not be reflective of the ordinary meaning of those terms. We note that this possibility is recognized in Article 31(4) of the Vienna Convention, which states that “[a] special meaning shall be given to a term if it is established that the parties so intended”.”(2502)

1610.      The Panel in China — Intellectual Property Rights considered Article 31(4) to be a “distinct exercise” from that under Article 31(1):

“The Panel observes that the general rule of treaty interpretation in Article 31 of the Vienna Convention refers in paragraph 1 to the ordinary meaning of the terms of the treaty, read in context. Where the terms are a single term, or ordinarily used together, then the treaty interpreter should refer to the ordinary meaning of that single term, or of each term in the particular context of each other. This is a distinct exercise from that in paragraph 4 of Article 31 of the Vienna Convention which requires a “special meaning” to be given to a term if it is established that the parties so intended. No party to this dispute considers that a “special meaning” should be given to the phrase “on a commercial scale”, and nor does the Panel.”(2503)

(e) Corollaries of the general rule of interpretation

(i) Principle of effectiveness

Meaning and effect must be given to all the terms of a treaty

1611.      In US — Gasoline, the Appellate Body considered the principle of effective treaty interpretation (ut res magis valeat quam pereat)(2504) as “one of the corollaries of the ‘general rule of interpretation’ in the Vienna Convention”. In particular, the Appellate Body stated:

“One of the corollaries of the ‘general rule of interpretation’ in the Vienna Convention is that interpretation must give meaning and effect to all the terms of a treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.(2505),(2506)

1612.      In Japan — Alcoholic Beverages II, the Appellate Body referred to its ruling in US — Gasoline and indicated that “a fundamental tenet of treaty interpretation flowing from the general rule of interpretation set out in Article 31 is the principle of effectiveness (ut res magis valeat quam perea)”.(2507) The Appellate Body concluded that:

“Article III:1 constitutes part of the context of Article III:2, in the same way that it constitutes part of the context of each of the other paragraphs in Article III. Any other reading of Article III would have the effect of rendering the words of Article III:1 meaningless, thereby violating the fundamental principle of effectiveness in treaty interpretation.”(2508)

1613.      The principle of effectiveness has been applied by panels and the Appellate Body on numerous occasions. For example, in Canada — Dairy, the Appellate Body made it clear that a treaty interpreter cannot lightly assume that a WTO Member intended no specific purpose when inscribing a term in its schedule.

“In interpreting the language in Canada’s Schedule, the Panel focused on the verb ‘represents’ and opined that, because of the use of this verb, the notation was no more than a ‘description’ of the ‘way the size of the quota was determined’. The net consequence of the Panel’s interpretation is a failure to give the notation in Canada’s Schedule any legal effect as a ‘term and condition’. If the language is merely a ‘description’ or a ‘narration’ of how the quantity was arrived at, we do not see what purpose it serves in being inscribed in the Schedule. The Panel, in other words, acted upon the assumption that Canada projected no identifiably necessary or useful qualifying or limiting purpose in inscribing the notation in its Schedule. The Panel thus disregarded the principle of effectiveness in its interpretive effort.”(2509)

Meaning and effect must be given to omissions

1614.      In Japan — Alcoholic Beverages II, the Appellate Body stated that “omission must have some meaning”:

“Article III:1 informs Article III:2, first sentence, by establishing that if imported products are taxed in excess of like domestic products, then that tax measure is inconsistent with Article III. Article III:2, first sentence does not refer specifically to Article III:1. There is no specific invocation in this first sentence of the general principle in Article III:1 that admonishes Members of the WTO not to apply measures “so as to afford protection”. This omission must have some meaning.”(2510)

1615.      In Canada — Autos, the Appellate Body stated that omissions may have different meanings in different contexts:

“In our view, the Panel’s analysis was incomplete. As we have said, and as the Panel recalled, “omission must have some meaning.”(2511) Yet omissions in different contexts may have different meanings, and omission, in and of itself, is not necessarily dispositive. Moreover, while the Panel rightly looked to Article 3.1(a) as relevant context in interpreting Article 3.1(b), the Panel failed to examine other contextual elements for Article 3.1(b) and to consider the object and purpose of the SCM Agreement.”(2512)

1616.      In US — Large Civil Aircraft (2” Complaint), the Panel found that purchases of services are excluded from the scope of Article 1 of the SCM Agreement. In the course of its reasoning, the Panel stated that:

“The omission must have some meaning.(2513) In other words, a textual analysis in accordance with the Vienna Convention requires an interpreter to consider both what is in the text, and at the same time what is not in the text. The glaring difference between the first and second parts of subparagraph (iii) necessarily implies that the parties intended to exclude purchases of services from the definition of Article 1.1(a)(1) of the SCM Agreement. Moreover, we recall that “omissions in different contexts” may carry different meanings.(2514) Article 1.1(a)(1) is a definitional provision that sets forth an exhaustive, closed list (“… i.e. where …”) of the types of transactions that constitute financial contributions under the SCM Agreement. The omission of the words “or services” in the context of a provision that sets forth an exhaustive, closed list of the kinds of transactions covered by the SCM Agreement only reinforces the implication that the parties intended to exclude purchases of services from the definition of “financial contribution” in Article 1.1(a)(1) of the SCM Agreement.”(2515)

1617.      In US — Anti-Dumping and Countervailing Duties (China), the Panel reasoned that because the explicit prohibition in Article VI:5 is limited to potential double remedies in respect of export subsidies, Members could not have intended to prohibit the imposition of double remedies in respect of domestic subsidies in Articles 19.3 and 19.4 of the SCM Agreement, which are, on their face, silent on the issue of double remedies. The Appellate Body disagreed, and in the course of its reasoning explained that:

“We have concerns about the Panel’s rather mechanistic, a contrario reasoning in this connection. While it is true that omissions have meaning,(2516) “omissions in different contexts may have different meanings, and omission, in and of itself, is not necessarily dispositive”.(2517) In this instance, we do not agree with the Panel that the “explicit terms in which the drafters addressed the issue” of double remedies in Article VI:5 make it “all the more unlikely that they sought to prohibit the imposition of double remedies in respect of other types of subsidies”. We note, rather, that Article VI:5 prohibits the concurrent application of anti-dumping and countervailing duties to compensate for the same situation of dumping or export subsidization. In our view, the term “same situation” is central to an understanding of the rationale underpinning the prohibition contained in Article VI:5, which in turn sheds light on the reason why, in the case of domestic subsidies, an express prohibition is absent.”(2518)

(ii) Meaning/application of certain terms may evolve over time

1618.      In US — Shrimp, the Appellate Body concluded that the meaning of the term “exhaustible natural resources” in Article XX(g) of the GATT 1994 is not confined to non-living (e.g. mineral) resources:

“From the perspective embodied in the preamble of the WTO Agreement, we note that the generic term “natural resources” in Article XX(g) is not “static” in its content or reference but is rather “by definition, evolutionary”.(2519)

 

It is, therefore, pertinent to note that modern international conventions and declarations make frequent references to natural resources as embracing both living and non-living resources. …

 

Given the recent acknowledgement by the international community of the importance of concerted bilateral or multilateral action to protect living natural resources, and recalling the explicit recognition by WTO Members of the objective of sustainable development in the preamble of the WTO Agreement, we believe it is too late in the day to suppose that Article XX(g) of the GATT 1994 may be read as referring only to the conservation of exhaustible mineral or other non-living natural resources.(2520) Moreover, two adopted GATT 1947 panel reports previously found fish to be an “exhaustible natural resource” within the meaning of Article XX(g)(2521) We hold that, inline with the principle of effectiveness in treaty interpretation,(2522) measures to conserve exhaustible natural resources, whether living or non-living, may fall within Article XX(g).”(2523)

1619.      The Panel in China — Intellectual Property Rights addressed the question of subsequent technology developments in the context of interpreting the terms “commercial scale” in Article 61 of the TRIPS Agreement:

“The Panel emphasizes that the terms used in the first sentence of Article 61, in particular “commercial”, are technology-neutral. A “commercial scale” can apply to various forms of commerce and, hence, various means of infringement. The specific forms of commerce are not static but adapt to changing forms of competition due to technological development and the evolution of marketing practices. The Panel sees no reason why those forms of commerce should be limited to the forms of commerce that existed at the time of negotiation of the TRIPS Agreement. Accordingly, the application of the term “commercial scale” can adjust to different situations, and refer to a different relative magnitude or extent, degree or proportion, depending on the facts. However, subsequent technological developments do not alter the considerations relevant to the interpretation of the terms used in Article 61.”(2524)

1620.      In China — Publications and Audiovisual Products, the Appellate Body rejected China’s argument that the Panel should have relied on the meaning of “sound recording” and “distribution” at the time of China’s accession to the WTO in 2001. First, the Appellate Body was not persuaded that the meaning of the terms had changed between 2001 and 2009. In addition, the Appellate Body stated that:

“More generally, we consider that the terms used in China’s GATS Schedule (“sound recording” and “distribution”) are sufficiently generic that what they apply to may change over time. In this respect, we note that GATS Schedules, like the GATS itself and all WTO agreements, constitute multilateral treaties with continuing obligations that WTO Members entered into for an indefinite period of time, regardless of whether they were original Members or acceded after 1995.(2525)

 

We further note that interpreting the terms of GATS specific commitments based on the notion that the ordinary meaning to be attributed to those terms can only be the meaning that they had at the time the Schedule was concluded would mean that very similar or identically worded commitments could be given different meanings, content, and coverage depending on the date of their adoption or the date of a Member’s accession to the treaty. Such interpretation would undermine the predictability, security, and clarity of GATS specific commitments, which are undertaken through successive rounds of negotiations, and which must be interpreted in accordance with customary rules of interpretation of public international law. “(2526)

1621.      In EC — IT Products, the Panel considered that certain products developed after the conclusion of the Information Technology Agreement were nonetheless covered by the concession at issue:

“The Panel has interpreted the concession based on the FPDs narrative description in this manner. In the case of this concession, the Panel notes that generic terms were used to cover a wide range of products and technologies. In addition, it appears to be undisputed that flat panel display devices designed for use with automatic data-processing machines existed at the time the ITA was concluded (for example, the European Communities has referred to an earlier version of the “displays designed for use with computers” concession that expressly mentions both CRT and flat panel display technology), and that the notion of multifunctional monitors was not unknown to negotiators, as evidenced in the monitors concession in the ITA, which appears to contemplate the existence of monitors that accept signals from multiple sources.(2527)

 

We are of the view, therefore, that there is no need to consider further the particular status of technology at the time of negotiating the concession in assessing the scope of the concession before us. Thus, for instance, the Panel does not consider the fact that DVI was developed after the conclusion of the ITA operates to exclude FPDs with DVIs from the scope of the concession.”(2528)

1622.      The Panel added that:

“We also do not consider it necessary to resort to any form of evolutionary interpretation of the terms, in light of our conclusion on the ordinary meaning of the terms. Had there been doubt as to whether LCD or other displays that were capable of connecting to other sources than an automatic data-processing machine, or displays that were fitted with DVI or other multi-use connectors, were within the scope of the concession, only then might we have considered such an interpretative approach.”(2529)

(iii) Domestic law concepts and classifications cannot govern the interpretation and application of the WTO Agreements

1623.      In US — Countervailing Measures on Certain EC Products, the Panel rejected the relevance of the distinction between a company and its shareholders for purposes of determining the existence of a benefit under Article 1.1(b) of the SCM Agreement. According to the Panel, “[t]he concept of benefit is independent of the legal business structure established pursuant to national corporate law”.(2530) Likewise, the Appellate Body considered that, if the corporate law distinction between a corporation and its shareholders were to be determinative of the existence of “benefit” under the SCM Agreement, this would essentially enable subsidizing governments to circumvent the provisions of the SCM Agreement by providing financial contributions to a corporation’s shareholders, rather than the corporation itself. The Appellate Body concluded that “the legal distinction between firms and their owners that may be recognized in a domestic legal context is not necessarily relevant, and certainly not conclusive, for the purpose of determining whether a “benefit” exists under the SCM Agreement”.(2531)

1624.      In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body found that the phrase “laws, regulations and administrative procedures” in Article 18.4 of the AD Agreement encompasses the entire body of generally applicable rules, norms and standards adopted by Members in connection with the conduct of antidumping investigations. The Appellate Body cautioned against relying on the label given to instruments under domestic law in this context:

“We observe that the scope of each element in the phrase “laws, regulations and administrative procedures” must be determined for purposes of WTO law and not simply by reference to the label given to various instruments under the domestic law of each WTO Member. This determination must be based on the content and substance of the instrument, and not merely on its form or nomenclature. Otherwise, the obligations set forth in Article 18.4 would vary from Member to Member depending on each Member’s domestic law and practice.”(2532)

1625.      In US — Softwood Lumber IV, the Appellate Body rejected Canada’s argument that standing timber should be excluded from the definition of “goods” in Article 1.1(a)(1)(iii) of the SCM Agreement. In that context, the Appellate Body cautioned against reliance on domestic law concepts for the purpose of interpreting or applying WTO provisions:

“[W]e observe that the arguments put forward by Canada relating to the nature of “personal property”, raise issues concerning the relevance, for WTO dispute settlement, of the way in which the municipal law of a WTO Member classifies or regulates things or transactions. Previous Appellate Body Reports confirm that an examination of municipal law or particular transactions governed by it might be relevant, as evidence, in ascertaining whether a financial contribution exists.(2533) However, municipal laws — in particular those relating to property-vary amongst WTO Members. Clearly, it would be inappropriate to characterize, for purposes of applying any provisions of the WTO covered agreements, the same thing or transaction differently, depending on its legal categorization within the jurisdictions of different Members. Accordingly, we emphasize that municipal law classifications are not determinative of the issues raised in this appeal.

 

 

In seeking to exclude “standing timber” from the definition of “goods” in Article 1.1(a)(1)(iii), Canada contends in the alternative that, even if we find that the term is not limited to “tradable items with an actual or potential tariff classification”, standing timber is still not “goods” as the Panel has defined them, because it is neither “personal property” nor an “identified thing to be severed from real property”. The concepts of “personal” and “real” property are, in the context Canada raises them, creatures of municipal law that are not reflected in Article 1.1(a)(1)(iii) itself. As we have said above, the manner in which the municipal law of a WTO Member classifies an item cannot, in itself, be determinative of the interpretation of provisions of the WTO covered agreements. As such, we do not believe that the distinction drawn by Canada is dispositive of the issues raised in this appeal.”(2534)

1626.      In China — Auto Parts, the Appellate Body upheld the Panel’s finding that the measure was an “internal charge” falling with the scope of Article III:2 of the GATT 1994, and not an “ordinary customs duty” falling under Article II:1(b) of the GATT 1994. The Appellate Body stated that:

“[W]e first observe that the way in which a Member’s domestic law characterizes its own measures, although useful, cannot be dispositive of the characterization of such measures under WTO law.(2535) … In addition, as the Panel recognized, and as is the case with all of the criteria we have just mentioned, a degree of caution must be exercised in attributing decisive weight to characteristics that fall exclusively within the control of WTO Members, “because otherwise Members could determine by themselves which of the provisions would apply to their charges.””(2536)’(2537)

1627.      In US — Anti-Dumping and Countervailing Duties (China), the Appellate Body rejected the Panel’s interpretation of the term “public bodies” in Article 1.1(a)(1) of the SCM Agreement. In the course of its analysis, the Appellate Body expressed concern with the Panel’s reliance on domestic law in its interpretative analysis:

“[W]e recall that dictionaries are not, as the Appellate Body has previously recognized, the sole source of information for determining the meaning of a treaty term. Nonetheless, we have some reservations relating to the way in which the Panel had recourse to usages of the term “public body” or similar terms in the municipal law of a number of jurisdictions in this dispute. First, the Panel did not clearly explain why it considered that an examination of the understanding of the concept of a public body in municipal law would assist in answering the particular interpretative question with which it was confronted. Second, while the Panel refers to the definition of “public body” or similar terms in four different jurisdictions, it is not clear whether the Panel assessed the usage of the relevant terms only in these four jurisdictions or whether the Panel surveyed other jurisdictions as well. If the former, it is not evident why the Panel picked those particular jurisdictions; if the latter, the Panel did not disclose or discuss the results of its survey in their entirety. Nor did the Panel, as it might usefully have done, seek input from the parties and third parties as to which municipal law usages of the term “public body” were of assistance, if any, and why.”(2538)

1628.      In US — Large Civil Aircraft (2” complaint), the Panel found that purchases of services are excluded from the definition of a subsidy under Article 1 of the SCM Agreement. The Panel then proceeded to analyse whether certain DOD R&D contracts and agreements with Boeing were properly characterized as purchases of services. In the course of its analysis, the Panel emphasized that its conclusions were based on more than the label or form given to those transactions under domestic US law:

“The European Communities argues that what matters “is the substance of the transaction, not its form”,(2539) and that “the manner in which the municipal law of a WTO Member classifies a transaction cannot, in itself, be determinative for the purpose of applying any provision of the WTO covered agreements”.(2540) It is difficult to disagree with either proposition. And it is because we agree with both propositions that we have gone beyond the simple “labels” of the transactions, and examined, in detail, the different substantive features of these contracts and agreements, as reflected, inter alia, in U.S. laws and regulations and in the contracts and agreements themselves. The conclusion reached is that there are significant, substantive differences between DOD’s R&D procurement contracts and DOD’s R&D assistance instruments with Boeing. This is not an analysis that rests on the label “contract”. There is more to our analysis than the label or form of the transactions.”(2541)

8. Article 32: supplementary means of interpretation

(a) General

1629.      In Japan — Alcoholic Beverages II, the Appellate Body confirmed that Article 32 of the Vienna Convention has also attained the status of a rule of “customary or general international law”:

Article 3.2 of the DSU directs the Appellate Body to clarify the provisions of GATT 1994 and the other “covered agreements” of the WTO Agreement “in accordance with customary rules of interpretation of public international law”. Following this mandate, in United States — Standards for Reformulated and Conventional Gasoline, we stressed the need to achieve such clarification by reference to the fundamental rule of treaty interpretation set out in Article 31(1) of the Vienna Convention. We stressed there that this general rule of interpretation “has attained the status of a rule of customary or general international law”. There can be no doubt that Article 32 of the Vienna Convention, dealing with the role of supplementary means of interpretation, has also attained the same status.”(2542),(2543)

(b) “Recourse may be had”

1630.      In Canada — Dairy, the Appellate Body, disagreeing with the Panel, considered that it was “appropriate, indeed necessary” to have recourse to supplementary means of interpretation in that case:

“In our view, the language in the notation in Canada’s Schedule is not clear on its face. Indeed, the language is general and ambiguous, and, therefore, requires special care on the part of the treaty interpreter. For this reason, it is appropriate, indeed necessary, in this case, to turn to “supplementary means of interpretation” pursuant to Article 32 of the Vienna Convention.”(2544)

1631.      In EC — Chicken Cuts, the Appellate Body explained that:

“The application of these rules in Article 31 of the Vienna Convention will usually allow a treaty interpreter to establish the meaning of the term. However, if after applying Article 31 the meaning of the term remains ambiguous or obscure, or leads to a result which is manifestly absurd or unreasonable, Article 32 allows a treaty interpreter to have recourse to:

 

‘… supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion.’

  

With regard to ‘the circumstances of [the] conclusion’ of a treaty, this permits, in appropriate cases, the examination of the historical background against which the treaty was negotiated. (2545)

1632.      Likewise, in US — Gambling the Appellate Body concluded that:

“[A] proper interpretation pursuant to the principles codified in Article 31 of the Vienna Convention does not yield a clear meaning as to the scope of the commitment made by the United States in the entry “Other recreational services (except sporting)”. Accordingly, it is appropriate to have recourse to the supplemental means of interpretation identified in Article 32 of the Vienna Convention. These means include W/120, the 1993 Scheduling Guidelines, and a cover note attached to drafts of the United States’ Schedule.”(2546)

1633.      Although Panels have most frequently had recourse to supplementary means of interpretation for the purpose of “confirming” the interpretation arrived at on the basis of Article 31, Panels have also occasionally considered it necessary to have recourse to supplementary means of interpretation to “determine” the meaning of a provision that is ambiguous or obscure. For example, the Panel in China — Intellectual Property Rights considered it necessary to have recourse to the preparatory work to determine the meaning of the terms “such requests” in the context of the third sentence of Article 46 of the TRIPS Agreement. The Panel stated that:

“The third sentence of Article 46 refers to “such requests” although the previous sentences do not refer expressly to any requests. The content of the third sentence clearly relates to materials and implements as addressed in the second sentence but it could equally relate to infringing goods as addressed in the first sentence. The text is ambiguous on this point. This ambiguity can be resolved by reference to the records of the negotiation of the TRIPS Agreement.”(2547)’(2548)

1634.      In a number of cases, the Appellate Body has considered it unnecessary to have recourse to supplementary means of interpretation, but has nonetheless proceeded to address the arguments of the parties. For example, in US — Carbon Steel, the Appellate Body stated that:

“[W]e do not consider it strictly necessary to have recourse to the supplementary means of interpretation identified in Article 32 of the Vienna Convention.

 

In any event, we consider that recourse to the negotiating history of the SCM Agreement tends to confirm our view as to the meaning of Article 21.3. We note that the two issues, namely the application of a specific de minimis standard in investigations, and the introduction of a time-bound limitation on the maintenance of countervailing duties, were considered to be highly important and were the subject of protracted negotiations. Specific provisions dealing with each of these two issues were viewed as necessary to improve the existing disciplines of the GATT and of the Tokyo Round Subsidies Code. The final texts of Article 11.9 and of Article 21.3 were the result of a carefully negotiated compromise that drew from a number of different proposals, reflecting divergent interests and views. We further note in this respect that none of the participants in this appeal pointed to any document indicating that the inclusion of a de minimis threshold was ever considered in the negotiations on sunset review provisions leading to the text of Article 21.3.”(2549)

(c) “including”

1635.      In EC — Poultry, the Appellate Body found that a bilateral agreement between two WTO Members could serve as “supplementary means” of interpretation for a provision of a covered agreement:

“[T]he Oilseeds Agreement may serve as a supplementary means of interpretation of Schedule LXXX pursuant to Article 32 of the Vienna Convention, as it is part of the historical background of the concessions of the European Communities for frozen poultry meat.”(2550)

1636.      In EC — Chicken Cuts, the Appellate Body confirmed that the list of supplementary means of interpretation identified in Article 32 is not exhaustive.

“We stress, moreover, that Article 32 does not define exhaustively the supplementary means of interpretation to which an interpreter may have recourse. It states only that they include the preparatory work of the treaty and the circumstances of its conclusion. Thus, an interpreter has a certain flexibility in considering relevant supplementary means in a given case so as to assist in ascertaining the common intentions of the parties.”(2551)

1637.      The Appellate Body added that:

“We agree with Yasseen who says:

 

Let us not forget that the list of supplementary means of interpretation contained in Article 32 of the Vienna Convention is not exhaustive. If the circumstances in which the treaty was concluded are expressly mentioned, it is to underline their importance in the elaboration of the Treaty, and not to exclude the possibility of wider-ranging and more thorough historical research into a period preceding that of the conclusion of the treaty[.]

 

(Yasseen, supra, footnote 70, p. 92, paras. 10-11 (quoted in Panel Reports, footnote 570 to para. 7.342))”(2552)

1638.      The Panel in EC — IT Products recalled the passages above, and stated that:

“It follows therefore that the fact that the HS2007 is not preparatory work of the treaty or circumstances of the conclusion of the treaty, does not per se disqualify it from being considered supplementary means of interpretation under Article 32. Nor can the fact that the HS2007 occurred subsequently to the conclusion of the treaty be per sea reason to disqualify it under Article 32, so long as it serves to indicate what were the “common intentions of the parties” at the time of the conclusion of the treaty, i.e. at the time they bound their Schedules.”(2553)

(d) “the preparatory work of the treaty”

1639.      In Canada — Periodicals, the Appellate Body referred to the preparatory work of Article III:8(b) of the GATT 1947 to support its understanding of the object and purpose of that provision:

“Our textual interpretation is supported by the context of Article III:8(b) examined in relation to Articles III:2 and III:4 of the GATT 1994. Furthermore, the object and purpose of Article III:8(b) is confirmed by the drafting history of Article III. In this context, we refer to the following discussion in the Reports of the Committees and Principal Sub-Committees of the Interim Commission for the International Trade Organization concerning the provision of the Havana Charter for an International Trade Organization that corresponds to Article III:8(b) of the GATT 1994:

 

This sub-paragraph was redrafted in order to make it clear that nothing in Article 18 could be construed to sanction the exemption of domestic products from internal taxes imposed on like imported products or the remission of such taxes. At the same time the Sub-Committee recorded its view that nothing in this subparagraph or elsewhere in Article 18 would override the provisions of Section C of Chapter IV.”(2554),(2555)

1640.      In India — Quantitative Restrictions, the Appellate Body explained that:

“We note India’s arguments relating to the negotiating history of the BOP Understanding. However, in the absence of a record of the negotiations on footnote 1 to the BOP Understanding, we find it difficult to give weight to these arguments. We do not exclude that footnote 1 to the BOP Understanding was “heavily negotiated”, and that it tries to accommodate opposing views held by different parties to the negotiations on the BOP Understanding. We are convinced, however, that the second sentence of footnote 1 does not accord with the position held by India. To interpret the sentence as proposed by India would require us to read into the text words which are simply not there. Neither a panel nor the Appellate Body is allowed to do so.” (2556)

1641.      In US — Line Pipe, the Appellate Body concluded that the negotiating history of Article XIX of the GATT 1947 and of the Agreement on Safeguards “does not provide guidance as to whether the Members intended to establish a requirement of a discrete determination of serious injury or of threat of serious injury”.(2557) The Appellate Body explained that:

“As regards Article XIX of the GATT 1947, this provision was discussed during the four negotiation rounds that took place between 1946 and 1948 and which formed the basis of the Havana Charter…. However, the record of those four negotiations does not indicate that the issue of the requirement of a discrete determination was expressly raised.

 

During the Uruguay Round, the negotiations on safeguards took place within the framework of the Negotiating Group on Safeguards. The early documents prepared by the Negotiating Group on Safeguards suggest that the participants wanted the terms “serious injury” and “threat of serious injury” to be clarified in the course of the Uruguay Round. (Negotiating Group on Safeguards, “Work Already Undertaken in the GATT on Safeguards”, Note by the Secretariat, MTN.GNG/NG9/W/ 1, 7 April 1987, which describes some of the main points raised in past negotiations and discussions, both formal and informal, on elements enumerated in the Ministerial Declaration on the Uruguay Round) At an early stage of the negotiations, a proposal supported by Brazil and Egypt to allow for safeguard measures only in case of “serious injury” was set aside. (Negotiating Group on Safeguards, MTN.GNG/NG9/W/3, 25 May 1987; Negotiating Group on Safeguards, MTN.GNG/NG9/W/9, 5 October 1987; Negotiating Group on Safeguards, MTN. GNG/NG9/3/Add.1, 17 November 1987) In June 1989, the Chairman of the Negotiating Group on Safeguards presented a first draft text where “serious injury” was defined as “a severe or critical overall deterioration in the position of domestic producers responsible for at least a major proportion of the domestic production of like products or directly competitive products” whereas “threat of serious injury” was defined as “serious injury that is clearly imminent and is demonstrated to be a virtual certainty.” (Negotiating Group on Safeguards, MTN. GNG/NG9/W/25, 27 June 1989)

 

After several discussions and revisions a final revised draft was submitted in October 1990. This draft further defined “serious injury” as “a significant overall impairment in the position of a domestic industry”, whereas “threat of serious injury” was defined as “serious injury that is clearly imminent …”. (Negotiating Group on Safeguards, MTN.GNG/NG9/W/25/Rev.3, 31 October 1990) This proposal evolved into the definitions of “serious injury” and “threat of serious injury” contained in Article 4 of the Agreement on Safeguards. Although the Negotiating Group on Safeguards spent much effort on the clarification of the terms “serious injury” and “threat of serious injury”, its deliberations do not provide guidance as to whether the distinct definitions of “serious injury” and “threat of serious injury” imply a requirement of a discrete finding.”(2558)

1642.      In US — Carbon Steel, the Appellate Body considered that even if it were appropriate to rely on a document constituting preparatory work to the SCM Agreement, “in accordance with the rules of interpretation set forth in the Vienna Convention, selective reliance on such a document does not provide a proper basis for the conclusion reached by the Panel in this regard”.(2559)

1643.      In US — Large Civil Aircraft (2” Complaint), the Panel attached significance to the fact that a reference to governmental “purchases of services” originally appeared in earlier drafts, but was subsequently removed from the final draft, of Articles 1.1(a)(1)(iii) and 14(d) of the SCM Agreement:

“[A]n examination of the preparatory work of Articles 1.1(a)(1)(iii) and 14(d) of the SCM Agreement reveals that a reference to governmental “purchases of services” originally appeared in and was subsequently removed from the text of both of these provisions in the final draft. More specifically, the first and second drafts of Articles 1.1(a)(1)(iii) referred to the provision of “goods or services”, but not to purchases of either goods or services.(2560)1 n the third draft, an additional reference to purchases of “goods or services” was added to Article 1.1(a)(1)(iii), which was mirrored in the draft of Article 14(d).(2561) In this regard, Articles 1.1(a)(1)(iii) and 14(d) remained unchanged in the fourth draft, and in the first draft of the Final Act of the Uruguay Round.(2562) However, in the second draft of the Final Act, the reference to purchases of “services” was removed from both Article 1.1(a)(1)(iii) and Article 14(d), but the reference to purchases of “goods” was retained.(2563) In our view, the preparatory work confirms that the parties intended to exclude purchases of services from the scope of Article 1.1(a)(1).

 

According to the European Communities, “one can only speculate on why the drafters omitted the reference to purchases of services in the final draft of the SCM Agreement, as there is more than one possible explanation”. The Panel considers that the European Communities has failed to provide the Panel with any plausible explanation of why the drafters deleted the reference to purchases of services from Article 1.1(a)(1)(iii) and Article 14(d) of the SCM Agreement.” (2564)

(e) “the circumstances of its conclusion”

1644.      In EC — Computer Equipment, the Appellate Body stated that “[w]ith regard to ‘the circumstances of [the] conclusion’ of a treaty, this permits, in appropriate cases, the examination of the historical background against which the treaty was negotiated.”(2565)

1645.      In EC — Computer Equipment, the Appellate Body further considered that the classification practice of the European Communities was part of the “circumstances of the conclusion” of the WTO Agreement and that this may be used as a supplementary means of interpretation:

“In the light of our observations on ‘the circumstances of [the] conclusion’ of a treaty as a supplementary means of interpretation under Article 32 of the Vienna Convention, we consider that the classification practice in the European Communities during the Uruguay Round is part of ‘the circumstances of [the] conclusion’ of the WTO Agreement and may be used as a supplementary means of interpretation within the meaning of Article 32 of the Vienna Convention.(2566)

1646.      With respect to the question whether the classification practice of one country, existing at the time of tariff negotiation, was relevant for the interpretation of a country’s Schedule of concessions, the Appellate Body, in EC — Computer Equipment, emphasized that while of limited value, such unilateral practice was not irrelevant; also, the Appellate Body found that where such unilateral practice of one Member was inconsistent, it could not be considered relevant:

“We note that the Panel examined the classification practice of only the European Communities, and found that the classification of LAN equipment by the United States during the Uruguay Round tariff negotiations was not relevant. The purpose of treaty interpretation is to establish the common intention of the parties to the treaty. To establish this intention, the prior practice of only one of the parties may be relevant, but it is clearly of more limited value than the practice of all parties. In the specific case of the interpretation of a tariff concession in a Schedule, the classification practice of the importing Member, in fact, may be of great importance. However, the Panel was mistaken in finding that the classification practice of the United States was not relevant.

 

 

Then there is the question of the consistency of prior practice. Consistent prior classification practice may often be significant. Inconsistent classification practice, however, cannot be relevant in interpreting the meaning of a tariff concession. “(2567)

1647.      In EC — Chicken Cuts, the Appellate Body clarified that a “direct link” to the treaty text and “direct influence” on the common intentions is not necessary for an event, act, or instrument to qualify as a “circumstance of the conclusion” of a treaty under Article 32 of the Vienna Convention, explaining:

“An ‘event, act or instrument’ may be relevant as supplementary means of interpretation not only if it has actually influenced a specific aspect of the treaty text in the sense of a relationship of cause and effect; it may also qualify as a ‘circumstance of the conclusion’ when it helps to discern what the common intentions of the parties were at the time of the conclusion with respect to the treaty or specific provision … it should not be misconstrued as introducing a concept that an act, event, or instrument qualifies as a circumstance only when it has influenced the intent of all the parties. Thus, not only ‘multilateral’ sources, but also ‘unilateral’ acts, instruments, or statements of individual negotiating parties may be useful in ascertaining ‘the reality of the situation which the parties wished to regulate by means of the treaty’ and, ultimately, for discerning the common intentions of the parties.”(2568)’(2569)

1648.      The Appellate Body in EC — Chicken Cuts pointed out that, “‘relevance’, as opposed to ‘direct influence’ or [genuine] link’, is the ‘more appropriate criterion’ to judge the extent to which a particular event, act, or other instrument should be relied upon or taken into account when interpreting a treaty provision in the light of the ‘circumstances of its conclusion’.(2570) (2571) In the light of this, the Appellate Body explained that interpreters should employ an objective approach to determined the relevance of circumstances for interpretation:

“In our view, the relevance of a circumstance for interpretation should be determined on the basis of objective factors, and not subjective intent. We can conceive of a number of objective factors that may be useful in determining the degree of relevance of particular circumstances for interpreting a specific treaty provision. These include the type of event, document, or instrument and its legal nature; temporal relation of the circumstance to the conclusion of the treaty(2572); actual knowledge or mere access to a published act or instrument; subject matter of the document, instrument, or event in relation to the treaty provision to be interpreted; and whether or how it was used or influenced the negotiations of the treaty.”(2573)

1649.      In EC — Chicken Cuts, the Appellate Body warned that the precise date of conclusion of a treaty should not be confused with the circumstances that were prevailing at the point in time in which a treaty was concluded, thereby acknowledging that an interpreter should ascertain the circumstances of the conclusion of the WTO Agreement over a period of time ending on the date of the conclusion of the WTO Agreement:

“Events, acts, and instruments may form part of the ‘historical background against which the treaty was negotiated’, even when these circumstances predate the point in time when the treaty is concluded, but continue to influence or reflect the common intentions of the parties at the time of conclusion. We also agree with the Panel that there is ‘some correlation between the timing of an event, act or other instrument … and their relevance to the treaty in question’(2574), in the sense that ‘the further back in time that an event, act or other instrument took place, was enacted or was adopted relative to the conclusion of a treaty’, the less relevant it will be for interpreting the treaty in question.(2575) What should be considered ‘temporally proximate will vary from treaty provision to treaty provision’ and may depend on the structure of the negotiating process.(2576) Accordingly, we see no error in the Panel’s finding that the circumstances of the conclusion should be ascertained over a period of time ending on the date of the conclusion of the WTO Agreement.’(2577)

1650.      In EC — Chicken Cuts, the Appellate Body explained that official publication of an act or instrument, which provides interested parties with an opportunity to acquire knowledge about it, is sufficient for it to qualify as “circumstances of conclusion” under Article 32 of the Vienna Convention:

“We understand the Panel’s notion of ‘constructive knowledge’ to mean that ‘parties have deemed notice of a particular event, act or instrument through publication’.(2578) We note the European Communities’ view that ‘deemed knowledge’ on the basis of general ‘access’ to a publication cannot substitute the need for demonstrating a direct link between a circumstance and the common intentions of the parties.(2579) However, we consider that the European Communities conflates the preliminary question of what may qualify as a ‘circumstance’ of a treaty’s conclusion with the separate question of ascertaining the degree of relevance that may be ascribed to a given circumstance, for purposes of interpretation under Article 32. As far as an act or instrument originating from an individual party may be considered to be a circumstance under Article 32 for ascertaining the parties’ intentions, we consider that the fact that this act or instrument was officially published, and has been publicly available so that any interested party could have acquired knowledge of it, appears to be enough. Of course, proof of actual knowledge will increase the degree of relevance of a circumstance for interpretation.”(2580)

1651.      In EC — Chicken Cuts, the Appellate Body also determined that the “prevailing situation internationally” is relevant in considering the circumstances of conclusion of a treaty. This conclusion was reached in the context of interpreting a term in customs classification practice.(2581)

1652.      In EC — Chicken Cuts, the Appellate Body addressed whether the classification practice of customs authorities and the customs legislation and court judgments relating to tariff classification may be relevant as “circumstances” of the conclusion of the WTO agreements. Regarding the timing of publications or events, the Appellate Body noted that relevance should be assessed based on whether publications, events or practice reflected the parties’ intentions:

“In our view, it is possible that documents published, events occurring, or practice followed subsequent to the conclusion of the treaty may give an indication of what were, and what were not, the ‘common intentions of the parties’ at the time of the conclusion.(2582) The relevance of such documents, events or practice would have to be determined on a case-by-case basis.”(2583)

1653.      With respect to whether classification practice must show a high level of “consistency” for it to be relevant as a “circumstance of the conclusion of a treaty”, the Appellate Body in EC — Chicken Cuts clarified that consistent prior practice is relevant:

“We believe that the Appellate Body’s statement in EC-Computer Equipment regarding the ‘consistency’ of classification practice should not be read as setting a benchmark for determining whether a particular classification practice may qualify at all as ‘circumstance of the conclusion’. A careful reading reveals that the Appellate Body addressed the degree of relevance of customs classification practice. The Appellate Body said:

 

Consistent prior classification practice may often be significant. Inconsistent classification practice, however, cannot be relevant in interpreting the meaning of a tariff concession.(2584) (emphasis original)

 

Thus, the Appellate Body concluded that the ‘consistent prior classification practice’ is ‘significant’, whereas ‘inconsistent classification practice’ is not ‘relevant.”(2585)

1654.      Regarding the relevance of legislation relating to customs classification for purposes of interpretation, the Appellate Body in EC — Chicken Cuts took note of its prior statement in EC — Computer Equipment:

“If the classification practice of the importing Member at the time of the tariff negotiations is relevant in interpreting tariff concessions in a Member’s Schedule, surely that Member’s legislation on customs classification at that time is also relevant.(2586) (emphasis added)”(2587).

1655.      Finally, as to whether a Member’s court judgments may be considered as supplementary means of interpretation under Article 32, the Appellate Body in EC — Chicken Cuts noted that domestic court judgments may be considered if they assist in ascertaining the common intentions of the parties:

“[Judgments of domestic courts are not, in principle, excluded from consideration as ‘circumstances of the conclusion’ of a treaty if they would be of assistance in ascertaining the common intentions of the parties for purposes of interpretation under Article 32.(2588) It is necessary to point out, however, that judgments deal basically with a specific dispute and have, by their very nature, less relevance than legislative acts of general application (although judgments may have some precedential effect in certain legal systems).(2589),(2590)

(f) “confirm” versus “determine”

1656.      In China — Publications and Audiovisual Products, the Appellate Body stated that:

“Although the Panel’s application of Article 31 of the Vienna Convention to “Sound recording distribution services” led it to a “preliminary conclusion” as to the meaning of that entry, the Panel nonetheless decided to have recourse to supplementary means of interpretation to confirm that meaning. We note, in this regard, that China’s argument on appeal appears to assume that the Panel’s analysis under Article 32 of the Vienna Convention would necessarily have been different if the Panel had found that the application of Article 31 left the meaning of “Sound recording distribution services” ambiguous or obscure, and if the Panel had, therefore, resorted to Article 32 to determine, rather than to confirm, the meaning of that term. We do not share this view. The elements to be examined under Article 32 are distinct from those to be analyzed under Article 31, but it is the same elements that are examined under Article 32 irrespective of the outcome of the Article 31 analysis. Instead, what may differ, depending on the results of the application of Article 31, is the weight that will be attributed to the elements analyzed under Article 32. “(2591)

9. Article 33: plurilingual treaties

1657.      In India — Quantitative Restrictions, the Panel, when examining the meaning of certain terms in the Ad Note to Article XVIII:11 of the GATT 1994, noted that its interpretation was consistent with the Spanish and French versions of the Agreement.(2592)

1658.      In Argentina — Footwear (EC), the Panel compared the English, French and Spanish text of Article 2.1 of the Agreement on Safeguards:

“[W]e note that unlike the Spanish text, the English text of Article 2.1 authorizes the application of safeguard measures only where the product at issue “is being imported in such increased quantities … so as to cause or threaten to cause serious injury” which would seem to indicate that, whatever the starting-point of an investigation period, it has to end no later than the very recent past. The French text conveys the same meaning as it is in the present tense “ce produitesf/mporfesurson territorire en quantites tellement accrues”. The Spanish text is more ambiguous, as the phrase “que las importaciones de ese product en su territorio ban aumentado en tal cantidad” unequivocally means that imports have increased in the past, but it does not clearly imply that imports which have started to increase in the past necessarily also have to continue to increase at least through the recent past.”(2593)

1659.      In EC — Asbestos, the Panel considered that “[a]s the WTO Agreement is a treaty with authentic texts in three languages, it is … important to bear in mind the spirit underlying the provisions of Article 33” (2594), (2595) The Appellate Body also referred to the different authentic languages and examined the term “similar” as compared to “produits similaires” and “productos similares” since both French and Spanish versions of the WTO Agreements, “together with the English version, are equally authentic.” (2596)

1660.      In Chile — Price Band System, the Panel, when attempting to define the term “ordinary customs duty”, had found that the dictionary meanings of the English term, on the one hand, and the French and Spanish corresponding terms, on the other hand, differed in the way they defined “ordinary”. The Appellate Body, which disagreed with the Panel’s interpretation of this term, noted that the Panel had interpreted the French and Spanish versions of the term “ordinary customs duty” to mean something different from the ordinary meaning of the English version of that term. In this regard, the Appellate Body stated that “[i]t is difficult to see how, in doing so, the Panel took into account the rule of interpretation codified in Article 33(4) of the Vienna Convention whereby “when a comparison of the authentic texts discloses a difference of meaning …, the meaning which best reconciles the texts … shall be adopted.” (emphasis added).”(2597)

1661.      In EC — Bed Linen (Article 21.5 — India), the Appellate Body stated that:

“According to Article 33.3 of the Vienna Convention on the Law of Treaties, where treaties have been authenticated in two or more languages, “[t]he terms of the treaty are presumed to have the same meaning in each authentic text.” The Spanish terms (“se han cumplido” and “hayan limitado”), in paragraphs 1 and 4 of Article 9, have the same temporal meaning as the English terms (“have been fulfilled” and “have limited”). The French terms (“sont remplies” and “auront limite”) can also accommodate this temporal meaning.”(2598)

1662.      In US — Softwood Lumber IV, the Appellate Body stated that:

“[I]n accordance with the customary rule of treaty interpretation reflected in Article 33(3) of the Vienna Convention on the Law of Treaties (the “Vienna Convention”), the terms of a treaty authenticated in more than one language — like the WTO Agreement — are presumed to have the same meaning in each authentic text. It follows that the treaty interpreter should seek the meaning that gives effect, simultaneously, to all the terms of the treaty, as they are used in each authentic language.”(2599)’(2600)

1663.      In EC — Tariff Preferences, the Appellate Body applied Article 33 and concluded that:

“In our view, the stronger, more obligatory language in both the French and Spanish texts — that is, using “as defined in” rather than “as described in” — lends support to our view that only preferential tariff treatment that is “generalized, non-reciprocal and non-discriminatory” is covered under paragraph 2(a) of the Enabling Clause.”(2601)

1664.      In US — Upland Cotton, the Appellate Body applied Article 33 and considered that “the Panel’s description of ‘price suppression’ … reflects the ordinary meaning of that term, particularly when read in conjunction with the French and Spanish versions of Article 6.3(c), as required by Article 33(3) of the Vienna Convention on the Law of Treaties (the ‘Vienna Convention’)”.(2602)

1665.      The Panel in China — Auto Parts stated that:

“Under Article 33(3) of the Vienna Convention “[t]he terms of the treaty are presumed to have the same meaning in each authentic text.”(2603) As a consequence, in interpreting these terms we should “seek the meaning that gives effect, simultaneously, to all the terms of the treaty, as they are used in each authentic language.”(2604)

 

Following the guidance provided by the Appellate Body in EC-Bed Linen (Article 21.5 — India)(2605), we note that our analysis above reveals that the only “simultaneous” ordinary meaning of “on” as used in each authentic language version of the first sentence of Article II:1(b) of the GATT 1994 is a strict temporal meaning. We therefore conclude that this is the proper ordinary meaning of the word “on”.”(2606)

1666.      The Panel in China — Intellectual Property Rights applied Article 33(3) and found that:

“The “authority” required by Article 59 concerns two types of remedies, namely “destruction or disposal”. The meaning of “destruction” is not controversial. As for “disposal”, the Panel notes that the English text of Article 59 does not qualify this word so that it could, in accordance with its ordinary meaning, refer both to disposal outside the channels of commerce as well as to release into the channels of commerce. However, read in context, the word “disposal” could be a reference to an order that goods be “disposed of” outside the channels of commerce as set out in Article 46. This ambiguity is resolved by reference to the French and Spanish texts, which are equally authentic. The French text of Article 59 refers to authority to order “la mise hors circuit” which is a reference to the authority to order that infringing goods be “ecartees des circuits commerciaux” in Article 46. The Spanish text of Article 59 refers to authority to order “eliminacion” which, read in its context as an alternative to “destruccion”, is evidently a reference to the authority to order that infringing goods be “apartadas de los circui-tos comerciales” in Article 46. Accordingly, the correct interpretation of the term “disposal” in the first sentence of Article 59 is disposal “outside the channels of commerce”.”(2607)

1667.      In US — Anti-Dumping and Countervailing Duties (China), the Appellate Body reversed the Panel’s finding that the term “public body” in Article 1.1(a)(1) of the SCM Agreement means any entity controlled by a government, and found instead that the term “public body” in the context of Article 1.1.(a)(1) of the SCM Agreement covers only those entities that possesses, exercises or are vested with governmental authority. In the course of its analysis, the Appellate Body concluded that the Panel failed to properly address an argument based on Article 33(3) of the Vienna Convention:

“As a preliminary matter, we do not consider it determinative that the term used in Article 9.1 of the Agreement on Agriculture and Article 1.1(a)(1) of the SCM Agreement, “organismo publico”, is the same only in the Spanish version. The covered agreements are authentic in all three languages. Therefore, pursuant to Article 33(3) of the Vienna Convention, the terms of the treaty are presumed to have the same meaning in each authentic text. Nonetheless, specific terms may not have identical meanings in every covered agreement. Where the ordinary meaning of the term is broad enough to allow for different interpretations, and the context as well as the object and purpose of the relevant agreements point in different directions, the meaning of a term used in different places of the covered agreements may differ.

 

We note that the Panel rejected China’s argument relating to the harmonious interpretation of “government or any public body” in Article 1.1(a)(1) of the SCM Agreement and “governments or their agencies” in Article 9.1 of the Agreement on Agriculture, because it had found definitions and usages showing a broader possible scope of the term “public body”. However, we do not see that China argued simply that the term “public body” or “organismo publico” in itself has a narrow scope. Rather, we understand China’s argument to be that the same term “organismopublico” is used in Article 1.1(a)(1) of the SCM Agreement and Article 9.1 of the Agreement on Agriculture, and that, since the Appellate Body has interpreted the term “organismo publico” in Article 9.1 of the Agreement on Agriculture to mean an entity which exercises powers vested in it by a government for the purpose of performing functions of a governmental character, the same term, albeit identical only in the Spanish version of the covered agreements, should be interpreted in the same way in the context of Article 1.1(a)(1) of the SCM Agreement.

 

In any event, for the purpose of the present appeal, it suffices to note that the Panel’s statement that it had “found other definitions and usages showing a broader possible scope” of the term “public body” than the definitions suggested by China, provides no support to the conclusion of the Panel’s analysis under Article 1.1(a)(1) of the SCM Agreement. In our view, the Panel failed to address properly the substance of China’s argument about a harmonious interpretation of the term “organismo publico” in the SCM Agreement and in the Agreement on Agriculture.”(2608)

10. Article 41: agreements to modify multilateral treaties between certain of the parties only

1668.      In Turkey — Textiles, the Panel referred to Article 41 and then observed that “[cjonsequently, even if the Turkey-EC customs union agreement did require Turkey to adopt all EC trade policies, an issue that we do not have to address, we consider that such requirement would not be sufficient to exempt Turkey from its obligations under the WTO Agreement.”(2609)

11. Article 44: separability of treaty provisions

1669.      In Korea — Procurement, the Panel made several observations on Articles 44 and 65 of the Vienna Convention in the context of analysing the concept of error in treaty formation under Article 48 of the Vienna Convention:

“A finding of justifiable error in treaty formation might normally be expected to lead to the application of Article 65 of the Vienna Convention. However, Article 65 on the specific procedure for invoking invalidity of a treaty does not seem to belong to the provisions of the Vienna Convention which have become customary international law. See also the European Court of Justice in Case C-162/69 (Racke v. Hauptzollampt Mainz), 1998 ECR, I-3655, at point 59. The Article on separability (Article 44) raises the possibility that provisions may be separated, such as e.g. separate reciprocal concessions in schedules, if they do not form an essential basis for the consent of the other party of the treaty as a whole (though the fact or the circumstance to which the error related was an essential factor in the consent to be bound by the treaty (Art. 48 (1)). We do not think that any of these provisions would be required with respect to non-violation under the WTO Agreements because Article 26 of the DSU clearly provides for the appropriate remedy.”(2610)

12. Article 48: error

1670.      In Korea — Procurement, the Panel considered the concept of error in treaty formation under Article 48 of the Vienna Convention. The Panel stated that:

“Error in respect of a treaty is a concept that has developed in customary international law through the case law of the Permanent International Court of Justice(2611) and of the International Court of Justice.(2612) Although these cases are concerned primarily with the question in which circumstances of error cannot be advanced as a reason for invalidating a treaty, it is implicitly accepted that error can be a ground for invalidating (part) of a treaty. The elements developed by the case law mentioned above have been codified by the International Law Commission in what became the Vienna Convention on the Law of Treaties of 1969. The relevant parts of Article 48 of the Convention read as follows: …

 

Since this article has been derived largely from case law of the relevant jurisdiction, the PCIJ and the ICJ, there can be little doubt that it presently represents customary international law and we will apply it to the facts of this case.”(2613)

13. Article 59: termination or suspension of the operation of a treaty implied by conclusion of later treaty

1671.      In EC — Poultry, the Appellate Body stated that “it is not necessary to have recourse to either Article 59.1 or Article 30.3 of the Vienna Convention, because the text of the WTO Agreement and the legal arrangements governing the transition from the GATT 1947 to the WTO resolve the issue of the relationship between Schedule LXXX and the Oilseeds Agreement in this case”.(2614)

14. Article 60: termination or suspension of the operation of a treaty as a consequence of its breach

1672.      The Panel in US — Certain EC Products stated that “in the WTO context, the provision of Article 60 of the Vienna Convention on the Laws of Treaties (1969) on this matter does not apply since the adoption of the more specific provisions of Article 23 of the DSU”.(2615)

1673.      In Brazil — Aircraft (Article 22.6 — Brazil), the Canada and Brazil entered into a bilateral agreement regarding recourse to Articles 21 and 22 of the DSU and Article 4 of the SCM Agreement (hereinafter the “Bilateral Agreement”), which extended the deadline in relation to the invocation of Article 22. Brazil subsequently declared that it had terminated the Bilateral Agreement because of a material breach by Canada, and referred to Article 60 of the Vienna Convention. Brazil thus stated that, pursuant to Article 22.7 of the DSU, the Arbitrators should determine that the proposed countermeasures are not allowed under the SCM Agreement on the grounds that the time within which they may be authorized has expired. The Arbitrators stated that:

“We note that Article 60 of the Vienna Convention provides for the “termination” of a treaty by one party in response to a “material breach” by the other party. Article 70 of the Vienna Convention nevertheless provides that the termination of a treaty does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination. We conclude that, even assuming that the Bilateral Agreement has been terminated by Brazil on 14 July 2000, the request by Canada under Article 4.10 of the SCM Agreement, to the extent it was made in accordance with the terms of the Bilateral Agreement, remains unaffected by the termination. We therefore do not find it necessary to address further this question.”(2616)

1674.      In EC — Commercial Vessels, the European Communities argued that Article 23 of the DSU should be interpreted in the light of Article 60 of the Vienna Convention, in support of its argument that measures that do not involve a suspension of concessions or other obligations fall outside of the scope of Article 23 of the DSU. The Panel stated that:

“The Panel recalls that it has concluded, based on an interpretation of Article 23.1 of the DSU in accordance with the ordinary meaning of its terms and in light of the object and purpose of the provision, that measures not involving a suspension of WTO concessions or other obligations are not excluded from its scope. While the Panel realizes that in a number of WTO dispute settlement and arbitration cases reference has been made to the public international law concepts invoked by the European Communities,(2617) the Panel can see no basis for using these concepts to read into Article 23.1 a limitation that is unsupported by an interpretation based on its text, context and object and purpose.”(2618),(2619)

15. Article 65: procedure for invoking invalidity of a treaty

1675.      In Korea — Procurement, the Panel made several observations on Articles 44 and 65 of the Vienna Convention in the context of analysing the concept of error in treaty formation under Article 48 of the Vienna Convention. See above, paragraph 1669 above.

 
C. Other Principles and Concepts of General International Law

1. Attribution of acts or omissions to a Member

1676.      In Canada — Dairy, the Panel concluded that certain provincial marketing boards acted under the explicit authority delegated to them by either the federal or a provincial government, and could therefore be presumed to be an “agency” of one or more of Canada’s governments in the sense of Article 9.1(a) of the Agreement on Agriculture. The Panel noted that:

“In this respect, we refer to Article 7:2 of the Draft Articles on State Responsibility of the International Law Commission (ILC) — which might be considered as reflecting customary international law — which states: “The conduct of an organ of an entity which is not part of the formal structure of the State or of a territorial governmental entity, but which is empowered by the internal law of that State to exercise elements of the governmental authority, shall also be considered as an act of the State under international law, provided that organ was acting in that capacity in the case in question”  (Report of the ILC on the Work of its 48th Session, General Assembly, Official Records, 51st Session, Supplement No. 1 (A/51/ 10), under Chapter III).”(2620)

1677.      In Turkey — Textiles, the Panel noted that in public international law, Turkey could be held responsible for the measures taken by the customs union between Turkey and the European Communities. The Panel noted and quoted the separate opinion of Judge Shahabuddeen in the Nauru case before the ICJ:

“‘[T]he [International Law Commission] considered, that where States act through a common organ, each State is separately answerable for the wrongful act of the common organ. That view, it seems to me, runs in the direction of supporting Nauru’s contention that each of the three States in this case is jointly and severally responsible for the way Nauru was administered on their behalf by Australia, whether or not Australia may be regarded as technically as a common organ. …’.(2621) (Emphasis added.)”(2622)

1678.      The Panel in Turkey — Textiles also noted the International Law Commission’s commentaries to the adopted report:

“A similar conclusion is called for in cases of parallel attribution of single course of conduct to several States, as when the conduct in question has been adopted by an organ common to a number of States. According to the principles on which the articles of chapter II of the draft are based, the conduct of the common organ cannot be considered otherwise than as an act of each of the States whose common organ it is. If that conduct is not in conformity with an international obligation, then the two or more States will concurrently have committed separate, although identical, internationally wrongful acts. It is self-evident that the parallel commission of identical offences by two or more States is altogether different from participation by one of those States in an internationally wrongful act committed by the other.(2623) (Emphasis added.)”(2624)

1679. In Australia — Salmon (Article 21.5 — Canada), the Panel concluded that a ban by Tasmania was to be regarded as a measure taken by Australia, “in the sense that it is a measure for which Australia, under both general international law and relevant WTO provisions, is responsible”. The Panel noted that:

“ In respect of general international law, see Article 27 of the Vienna Convention on the Law of Treaties (“A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty”) and Article 6 of the Draft Articles on State Responsibility of the International Law Commission (“The conduct of an organ of the State shall be considered as an act of that State under international law, whether that organ belongs to the constituent, legislative, executive, judicial or other power, whether its functions are of an international or an internal character, and whether it holds a superior or a subordinate position in the organization of the State”, Yearbook of the ILC, 1996, Chapter III).”(2625)

1680.      The Panel in Korea — Procurement referred to “long established principles of State responsibility” in the context of rejecting Korea’s argument that certain inaccurate information provided to the United States in the context of negotiations under the Agreement on Government Procurement was the responsibility of a single individual in a single Ministry:

“We note that this argument was previously made by Korea during the course of the proceedings and was fully taken into account by us in coming to our Findings. Furthermore, in our view, Korea is simply wrong in making such an argument. The Parties to the GPA did not expect incomplete or even possibly inaccurate answers from one portion of the Korean Government speaking only for itself. The answers must be on behalf of the whole of the Korean Government. Negotiations would be impossible otherwise. The Korean Government chose who was tasked with answering the questions and the Korean Government cannot avoid responsibility for the result. It cannot be a justifiable excuse for incomplete answers that an applicant for accession to the GPA gave responsibility to Ministry A to answer questions, but the projects and procurement responsibilities were really the concern of Ministry B and Ministry A was ignorant of the true situation when it provided answers. In our view, and as we stated in the Findings, there is an affirmative duty on the part of a Party or prospective Party to the GPA to answer such questions fully, comprehensively and on behalf of the whole government. This conclusion is supported by the long established international law principles of State responsibility. The actions and even omissions of State organs acting in that capacity are attributable to the State as such and engage its responsibility under international law.”(2626),(2627)

1681.      In Argentina — Hides and Leather, the Panel rejected a claim that certain conduct by customs officials alleged by the European Communities amount to a violation of Article XI:1 of the GATT 1994. In that context, the Panel observed that “as an additional matter, the European Communities would also need to prove that this private action was attributable to the Argentinean government under the doctrine of state responsibility, but because the initial factual point has not been established, we do not need to reach that issue here”.(2628)

1682.      In US — Gambling, the Panel referred to “customary principles of international law concerning attribution” in the context of concluding that, as an agency of the United States government with specific responsibilities and powers, actions taken by the United States International Trade Commission (USITC) pursuant to those responsibilities and powers are attributable to the United States:

“We believe that, as an agency of the United States government with specific responsibilities and powers, actions taken by the USITC pursuant to those responsibilities and powers are attributable to the United States.

 

This conclusion is supported by the International Law Commission (“ILC”) Articles on the Responsibility for States of Internationally Wrongful Acts(2629) Article 4, which is based on the principle of the unity of the State, defines generally the circumstances in which certain conduct is attributable to a State.(2630) This provision is not binding as such, but does reflect customary principles of international law concerning attribution. As the International Law Commission points out in its commentary on the Articles on State Responsibility, the rule that “the State is responsible for the conduct of its own organs, acting in that capacity, has long been recognised in international judicial decisions.”(2631) As explained by the ILC, the term “state organ” is to be understood in the most general sense.(2632) It extends to organs from any branch of the State, exercising legislative, executive, judicial or any other functions.

 

The fact that certain institutions performing public functions and exercising public powers are regarded in internal law as autonomous and independent of the executive government does not affect their qualification as a state organ.(2633) Thus, the fact that the USITC is qualified as an “independent agency” does not affect the attributability of its actions to the United States, because what matters is the activity at issue in a particular case, not the formal qualification of the body concerned.

 

Consequently, official pronouncements by the USITC in an area where it has delegated powers are to be attributed to the United States.”(2634)

1683.      In US — Anti-Dumping and Countervailing Duties (China), the Appellate Body reversed the Panel’s finding that the term “public body” in Article 1.1(a)(1) of the SCM Agreement means “any entity controlled by a government”, and found instead that the term “public body” in the context of Article 1.1.(a)(1) of the SCM Agreement covers only those entities that possesses, exercise or are vested with governmental authority. The Appellate Body interpreted the term “public body” in Article 1.1(a)(1) of the SCM Agreement in the light of the ILC Articles on State Responsibility:

“Both Article 1.1(a)(1), on the one hand, and Articles 4, 5, and 8 of the ILC Articles, on the other hand, set out rules relating to the question of attribution of conduct to a State. At the same time, we note certain differences in the approach reflected in these two sets of rules. The connecting factor for attribution pursuant to the ILC Articles is the particular conduct, whereas, the connecting factors in Article 1.1(a)(1) of the SCM Agreement are both the particular conduct and the type of entity. Under the SCM Agreement, if an entity is a public body, then its conduct is attributed directly to the State, provided that such conduct falls within the scope of subparagraphs (i)-(iii), or the first clause of subparagraph (iv). Conversely, if an entity is a private body in the sense of Article 1.1(a)(1)(iv), its conduct can be attributed to the State only indirectly through a demonstration of entrustment or direction of that body by the government or a public body. By contrast, the sole basis for attribution pursuant to the ILC Articles is the particular conduct at issue. Articles 4, 5, and 8 each stipulates the conditions in which conduct shall be attributed to a State.

 

More specifically, however, with regard to Article 5 of the ILC Articles, we note that despite certain differences between the attribution rules of the ILC Articles and those of the SCM Agreement, our above interpretation of the term “public body” coincides with the essence of Article 5. We have indicated that being vested with, and exercising, authority to perform governmental functions is a core feature of a “public body” in the sense of Article 1.1(a)(1). Here, we note that the commentary on Article 5 explains that Article 5 refers to the true common feature of the entities covered by that provision, namely that they are empowered, if only to a limited extent or in a specific context, to exercise specified elements of governmental authority. The commentary also states that the existence of a greater or lesser State participation in its capital, or ownership of its assets are not decisive criteria for the purpose of attribution of the entity’s conduct to the State.(2635) This corresponds to our above interpretation of the term “public body” in Article 1.1(a)(1). As we have said above, being vested with governmental authority is the key feature of a public body. State ownership, while not being a decisive criterion, may serve as evidence indicating, in conjunction with other elements, the delegation of governmental authority.

 

In this context, we observe that the United States acknowledges that the ILC Articles might reflect customary international law to some extent. Yet, the United States contends that given the “fine line distinctions”(2636) constructed in Articles 5 to 8 of the ILC Articles, it remains an open and contested question whether all of these details and distinctions have risen to the status of customary international law. Our analysis, however, does not draw on any details or “fine line distinctions” that might exist under Article 5 of the ILC Articles. Rather, we see similarities in the core principles and functions of the respective provisions. Our consideration of Article 5 of the ILC Articles does not contradict our analysis of Article 1.1(a)(1) above. Rather, it lends further support to that analysis. Yet, because the outcome of our analysis does not turn on Article 5, it is not necessary for us to resolve definitively the question of to what extent Article 5 of the ILC Articles reflects customary international law.”(2637),(2638)

1684.      In US — Tuna II (Mexico), the Panel stated that a U.S. court ruling was “a priori capable of constituting a measure attributable to the United States, which may be challenged in dispute settlement proceedings under the DSU”. That Panel recalled that in Brazil — Retreaded Tyres, the panel examined whether discrimination arose from the importation of used tyres through court injunctions, and that in US — Section 211 Appropriations Act, the only application of the challenged law by US courts to date of which the parties were aware was the Havana Club Holdings, S.A. v Galleon S.A.(2639)

2. Attributing international legal significance to unilateral statements made by a State General

1685.      In US — Section 301 Trade Act, the Panel found that certain statements that the United States made to the Panel amounted to an undertaking, and carried international legal significance:

“Attributing international legal significance to unilateral statements made by a State should not be done lightly and should be subject to strict conditions. Although the legal effects we are ascribing to the US statements made to the DSB through this Panel are of a more narrow and limited nature and reach compared to other internationally relevant instances in which legal effect was given to unilateral declarations, we have conditioned even these limited effects on the fulfilment of the most stringent criteria. A sovereign State should normally not find itself legally affected on the international plane by the casual statement of any of the numerous representatives speaking on its behalf in today’s highly interactive and inter-dependant world(2640) nor by a representation made in the heat of legal argument on a State’s behalf. This, however, is very far from the case before us.

 

 

The statements made by the US before this Panel were a reflection of official US policy, intended to express US understanding of its international obligations as incorporated in domestic US law. The statements did not represent a new US policy or undertaking but the bringing of a pre-existing US policy and undertaking made in a domestic setting into an international forum.

 

The representations and statements by the representatives of the US appearing before us were solemnly made, in a deliberative manner, for the record, repeated in writing and confirmed in the Panel’s second hearing. There was nothing casual about these statements nor were they made in the heat of argument. There was ample opportunity to retract. Rather than retract, the US even sought to deepen its legal commitment in this respect.

 

We are satisfied that the representatives appearing before us had full powers to make such legal representations and that they were acting within the authority bestowed on them. Panel proceedings are part of the DSB dispute resolution process. It is inconceivable except in extreme circumstances that a panel would reject the power of the legal representatives of a Member to state before a panel, and through the panel to the DSB, the legal position of a Member as regards its domestic law read in the light of its WTO obligations. The panel system would not function if such a power could not be presumed.

 

We are equally satisfied, as a matter of fact, that the statements made to us were intended to be part of the record in the full knowledge and understanding that they could, as any other official submission, be made part of our Report; that they were made with the intention not only that we rely on them but also that the EC and the third parties to the dispute as well as all Members of the DSB — effectively all WTO Members — place such reliance on them.

 

Accordingly, we find that these statements by the US express the unambiguous and official position of the US representing, in a manner that can be relied upon by all Members, an undertaking that the discretion of the USTR has been limited so as to prevent a determination of inconsistency before exhaustion of DSU proceedings. Although this representation does not create a new international legal obligation for the US — after all the US was already bound by Article 23 in becoming a WTO Member — it clarifies and gives an undertaking, at an international level, concerning aspects of domestic US law, in particular, the way the US has implemented its obligations under Article 23.2(a) of the DSU.

 

… As a matter of international law, the effect of the US undertakings is to anticipate, or discharge, any would-be State responsibility that could have arisen had the national law under consideration in this case consisted of nothing more than the statutory language.”(2641)

1686.      In US — 1916 Act (EC), the Panel found that statements made by certain US government officials did not create obligations for the United States under international law:

“[W]e should determine whether they could actually generate legal obligations for the United States under international law. For instance, since they are subsequent to the notification by the United States of its “grandfathered” legislation under the GATT 1947, it might be argued that they implicitly modified that notification by stating that the 1916 Act was “grandfathered”. We recall that the International Court of Justice has developed, inter alia in its judgement in the Nuclear tests case,(2642) criteria on when a statement by a representative of a State could generate international obligations for that State. In the present case, we are reluctant to consider the statements made by senior US officials in testimonies or letters to the US Congress or to members thereof as generating international obligations for the United States. First, we recall that the constitution of the United States provides for a strict separation of the judicial and executive branches. With the exception of criminal prosecutions, the application of the 1916 Act falls within the exclusive responsibility of the federal courts. Under those circumstances, a statement by the executive branch of government in a domestic forum can only be of limited value. Second, with the possible exception of the statement of US Trade Representative Clayton Yeutter, they were not made at a sufficiently high level compared with the statements considered by the International Court of Justice in the Nuclear Tests case, where essentially declarations by a head of State and of members of the French government were at issue. Moreover, the statements referred to in the present case were not directly addressed to the general public. Finally, they were not made on behalf of the United States, but — at best — on behalf of the executive branch of government. This aspect would not be essential if the statements had been made in an international forum, where the executive branch represents the State.(2643) However, in the present case, the statements were addressed to the US legislative branch. Therefore, we cannot consider them as creating obligations for the United States under international law.”(2644)

1687.      In EC — Trademarks and Geographical Indications (US), the Panel considered that the statements made by agents of the European Commission before the Panel “commit and engage the European Communities”:

“The European Communities’ delegation to this panel proceeding confirms that the statements made by agents of the European Commission before the Panel commit and engage the European Communities. It indicates that Community laws are generally not executed through authorities at Community level but rather through recourse to the authorities of its member States which, in such a situation, “act de facto as organs of the Community, for which the Community would be responsible under WTO law and international law in general”. The Panel accepts this explanation of what amounts to the European Communities’ domestic constitutional arrangements and accepts that the submissions of the European Communities’ delegation to this panel proceeding are made on behalf of all the executive authorities of the European Communities.”(2645)

1688.      In US — Gambling, the Panel suggested that the United States was “bound” by certain statements it had made at DSB meetings:

“During two successive DSB meetings, the United States stated that a prohibition on the “cross-border supply of gambling and betting services under US laws” exists in the United States.(2646) The panel’s decision in US — Section 301 Trade Act appears to support the view that the United States should be bound by these statements.(2647) The statements were made by representatives of the United States to express their understanding of US law. They were made in the context of a formal WTO meeting for the record. The United States has not argued that the representatives were acting outside the authority bestowed upon them in making these statements.”(2648)

1689.      In US/Canada — Continued Suspension, the Appellate Body concluded that the Panel in that case erred in its treatment of statements that the United States and Canada made at DSB meetings. The Panel had concluded — on the basis of the statements made by Canadian and United States delegates at two DSB meetings — that the United States and Canada had reached “a more or less final decision” that the EC measure at issue was inconsistent with the SPS Agreement and failed to implement the DSB’s recommendations and rulings in EC — Hormones. Such statements, in the Panel’s view, constituted a “determination” under Article 23.2(a) of the DSU and, because the determination was made unilaterally without recourse to the DSU, it breached Article 23.2(a). In the context of reversing the Panel’s finding and reasoning, the Appellate Body explained that:

“… DSB statements are not intended to have legal effects and do not have the legal status of a definitive determination in themselves. Rather, they are views expressed by Members and should not be considered to prejudice Members’ position in the context of a dispute. As the United States rightly points out, “[statements made by Members at DSB meetings, especially those expressing a view as to the WTO consistency of another Member’s measures or actions, are generally diplomatic or political in nature” and “generally have no legal effect or status in and of themselves”.

 

The Panel’s finding that DSB statements could constitute a definitive determination concerning the WTO-inconsistency of a Member’s measure could adversely affect WTO Members’ ability to freely express their views on the potential compatibility with the covered agreements of measures adopted by other Members.(2649) This would result in a “chilling” effect on those statements, because Members would refrain from expressing their views at DSB meetings regarding the WTO-inconsistency of other Members’ measures lest such statements be found to constitute a violation of Article 23. If this were the case, the DSB would be inhibited from properly carrying out its function, pursuant to Article 21.6 of the DSU, to keep under surveillance the implementation of its recommendations and rulings.”(2650)

3. Burden of proof

1690.      In US — Wool Shirts and Blouses, the Appellate Body observed that “various international tribunals, including the International Court of Justice, have generally and consistently accepted and applied the rule that the party who asserts a fact, whether the claimant or the respondent, is responsible for providing proof thereof.”(2651)’(2652)

1691.      The Panel in US — Large Civil Aircraft (2” complaint) stated that the “normal international legal standards” governing the discharge of the burden of proof unquestionably apply to the WTO dispute settlement procedures, as an important element of its functions concerning dispute resolution under the rule of law and due process.(2653)

1692.      For more information on burden of proof and evidence in WTO dispute settlement proceedings, see Article 11 of the DSU.

4.      Countermeasures

(a) General

1693.      The Panel in US — Certain EC Products discussed the concept of retaliation under general international law in the context of examining a claim under Article 23 of the DSU:

“Under general international law, retaliation (also referred to as reprisals or counter-measures) has undergone major changes in the course of the XX century, specially, as a result of the prohibition of the use of force (jus ad bellum). Under international law, these types of countermeasures are now subject to requirements, such as those identified by the International Law Commission in its work on state responsibility (proportionality etc… see Article 43 of the Draft). However, in WTO, countermeasures, retaliations and reprisals are strictly regulated and can take place only within the framework of the WTO/DSU. Elagab Omer Youssif, “The Legality of Non-Forcible Counter-Measures in International Law (1988), Oxford University Press; Boisson de Charzournes Laurence, Les contre-mesures dans les relations économiques internationales, (1992) A Pedone; Henkin L, Pugh R.C, Schacter 0. and Smit H., International Law (1993), West Publishing, p. 570-571 and Chapter 11.”(2654)

1694.      In Brazil — Aircraft (Article 22.6 — Brazil), the Arbitrators referred to the ILC Articles on State Responsibility in the context of interpreting the term “countermeasures” in Articles 4.10 and 4.11 of the SCM Agreement, explaining that “we use the Draft Articles as an indication of the agreed meaning of certain terms in general international law.”(2655) The Arbitrators stated that:

“While the parties have referred to dictionary definitions for the term “countermeasures”, we find it more appropriate to refer to its meaning in general international law(2656) and to the work of the International Law Commission (ILC) on state responsibility, which addresses the notion of countermeasures.(2657) We note that the ILC work is based on relevant state practice as well as on judicial decisions and doctrinal writings, which constitute recognized sources of international law.(2658) When considering the definition of ‘countermeasures’ in Article 47 of the Draft Articles,(2659) we note that countermeasures are meant to “induce [the State which has committed an internationally wrongful act] to comply with its obligations under articles 41 to 46”. We note in this respect that the Article 22.6 arbitrators in the EC — Bananas (1999) arbitration made a similar statement.(2660) We conclude that a countermeasure is ‘appropriate’ inter alia if it effectively induces compliance.”(2661)

(b) Proportionality of countermeasures

1695.      In EC — Bananas III (US) (Article 22.6 — EC), the Arbitrators referred to the “general international law principle of proportionality of countermeasures” in the context of disallowing double-counting of the same nullification or impairment by different complainants in Article 22.6 proceedings:

“If we were to allow for such “double-counting” of the same nullification or impairment in arbitration proceedings under Article 22.6 of the DSU with different WTO Members, incompatibilities with the standard of “equivalence” as embodied in paragraphs 4 and 7 of Article 22 of the DSU could arise. Given that the same amount of nullification or impairment inflicted on one Member cannot simultaneously be inflicted on another, the authorizations to suspend concessions granted by the DSB to different WTO Members could exceed the overall amount of nullification or impairment caused by the Member that has failed to bring a WTO-inconsistent measure into compliance with WTO law. Moreover, such cumulative compensation or cumulative suspension of concessions by different WTO Members for the same amount of nullification or impairment would run counter to the general international law principle of proportionality of countermeasures.”(2662)’(2663)

1696.      In US — Cotton Yarn, the Appellate Body referred to the rules of general international law on state responsibility as supporting its conclusions on the reasons why a comparative analysis is needed as part of the attribution of serious damage analysis under Article 6.4, second sentence of the Agreement on Textiles and Clothing. The Appellate Body pointed out at the need for proportionality as between the serious damage and the countermeasure imposed. It indicated that “[its] view is supported further by the rules of general international law on state responsibility, which require that countermeasures in response to breaches by states of their international obligations be commensurate with the injury suffered”:

“[T]he part of the total serious damage attributed to an exporting Member must be proportionate to the damage caused by the imports from that Member. Contrary to the view of the United States, we believe that Article 6.4, second sentence, does not permit the attribution of the totality of serious damage to one Member, unless the imports from that Member alone have caused all the serious damage.

 

Our view is supported further by the rules of general international law on state responsibility, which require that countermeasures in response to breaches by states of their international obligations be commensurate with the injury suffered. In the same vein, we note that Article 22.4 of the DSU stipulates that the suspension of concessions shall be equivalent to the level of nullification or impairment. This provision of the DSU has been interpreted consistently as not justifying punitive damages. These two examples illustrate the consequences of breaches by states of their international obligations, whereas a safeguard action is merely a remedy to WTO-consistent “fair trade” activity. It would be absurd if the breach of an international obligation were sanctioned by proportionate countermeasures, while, in the absence of such breach, a WTO Member would be subject to a disproportionate and, hence, “punitive”, attribution of serious damage not wholly caused by its exports. In our view, such an exorbitant derogation from the principle of proportionality in respect of the attribution of serious damage could be justified only if the drafters of the ATC had expressly provided for it, which is not the case.”(2664)

1697.      In US — Line Pipe, also in the context of the application of a safeguard, the Appellate Body emphasized the importance of the state responsibility rules which command the need for proportionality when imposing countermeasures:

“If the pain inflicted on exporters by a safeguard measure were permitted to have effects beyond the share of injury caused by increased imports, this would imply that an exceptional remedy, which is not meant to protect the industry of the importing country from unfair or illegal trade practices, could be applied in a more trade-restrictive manner than countervailing and anti-dumping duties. On what basis should the WTO Agreement be interpreted to limit a countermeasure to the extent of the injury caused by unfair practices or a violation of the treaty but not so limit a countermeasure when there has not even been an allegation of a violation or an unfair practice?

 

 

We note as well the customary international law rules on state responsibility, to which we also referred in US-Cotton Yarn. We recalled there that the rules of general international law on state responsibility require that countermeasures in response to breaches by States of their international obligations be proportionate to such breaches. Article 51 of the International Law Commission’s Draft Articles on Responsibility of States for Internationally Wrongful Acts provides that “countermeasures must be commensurate with the injury suffered, taking into account the gravity of the internationally wrongful act and the rights in question”. Although Article 51 is part of the International Law Commission’s Draft Articles, which do not constitute a binding legal instrument as such, this provision sets out a recognized principle of customary international law. We observe also that the United States has acknowledged this principle elsewhere. In its comments on the International Law Commission’s Draft Articles, the United States stated that ‘under customary international law a rule of proportionality applies to the exercise of countermeasures’.”(2665)

1698.      In US — FSC (Article 22.6 — US), the Arbitrators examined the language of footnotes 9 and 10 to Articles 4.10 and 4.11 of the SCM Agreement, which set forth the special and additional dispute settlement rule that “countermeasures” in respect of prohibited subsidies should not be “disproportionate”. The Arbitrators considered that this negative formulation meant that strict proportionality was not required, and stated:

“We note in this regard the view of the commentator, Sir James Crawford, on the relevant Article of the ILC text on State Responsibility, reflected in a resolution adopted on 12 December 2001 by the UN General Assembly (A/RES/ 56/83), which expresses — but only in positive terms — a requirement of proportionality for countermeasures:

 

“the positive formulation of the proportionality requirement is adopted in Article 51. A negative formulation might allow too much latitude.” (J. Crawford, The ILC’s Articles on State Responsibility, Introduction, Text and Commentaries 2002, CUP, para. 5 on Article 51). Article 51 of the ILC Articles on State responsibility (entitled “Proportionality”) reads as follows: “counter-measures must be commensurate with the injury suffered, taking into account the gravity of the internationally wrongful act and the rights in question”, (emphasis added)

 

We also note in this respect that, while that provision expressly refers — contrary to footnote 9 of the SCM Agreement — to the injury suffered, it also requires the gravity of the wrongful act and the right in question to be taken into account. This has been understood to entail a qualitative element to the assessment, even where commensurateness with the injury suffered is at stake. We note the view of Sir James Crawford on this point in his Commentaries to the ILC Articles:

 

“Considering the need to ensure that the adoption of countermeasures does not lead to inequitable results, proportionality must be assessed taking into account not only the purely “quantitative” element of the injury suffered, but also “qualitative” factors such as the importance of the interest protected by the rule infringed and the seriousness of the breach. Article 51 relates proportionality primarily to the injury suffered but “taking into account” two further criteria: the gravity of the internationally wrongful act, and the rights in question. The reference to “the rights in question” has a broad meaning, and includes not only the effect of a wrongful act on the injured State but also on the rights of the responsible State. Furthermore, the position of other States which may be affected may also be taken into consideration.” (op. cit., para. 6 of the commentaries on Article 51).”(2666)

5. Obligations erga omnes

1699.      In US — FSC (Article 22.6 — US), the Arbitrators referred to the concept of an erga omnes obligation in the context of determining the level of appropriate countermeasures under under Article 4.11 of the SCM Agreement:

“The quantitative element of the breach in this case is, in fact, that the United States has spent approximately US$4,000 million yearly in breach of its obligations. To our mind, each dollar is, as it were, as much a breach of the obligations of the United States as any other. Certain dollars do not become any less so — or effectively “quarantined” from their legal status of breach of an obligation — by virtue of some other criteria (such as trade effects). To put it another way, the United States’ breach of obligation is not objectively dismissed because some of the products benefiting from the subsidy are, e.g., exported to another trading partner. It is an erga omnes obligation owed in its entirety to each and every Member. It cannot be considered to be “allocatable” across the Membership. Otherwise, the Member concerned would be only partially obliged in respect of each and every Member, which is manifestly inconsistent with an erga omnes per se obligation. Thus, the United States has breached its obligation to the European Communities in respect of all the money that it has expended, because such expenditure in breach-the expense incurred-is the very essence of the wrongful act.”(2667)’(2668)

1700.      However, the Arbitrators were careful to clarify that “to address any possible residual concern that the European Communities cannot be entitled to de facto act erga omnes on behalf of the WTO membership, as it were”.(2669)

6. Consistency in jurisprudence

1701.      In US — Stainless Steel (Mexico), the Appellate Body concluded that ensuring security and predictability in the dispute settlement system, as contemplated in Article 3.2 of the DSU, implies that, absent cogent reasons, an adjudicatory body will resolve the same legal question in the same way in a subsequent case. The Appellate Body noted that:

“See H. Lauterpacht, “The so-called Anglo-American and Continental Schools of Thought in International Law” (1931) 12 British Yearbook of International Law 53, who points out that adherence to legal decisions “is imperative if the law is to fulfil one of its primary functions, i.e. the maintenance of security and stability”. Consistency of jurisprudence is valued also in dispute settlement in other international fora. In this respect we note the Decision of the International Criminal Tribunal for the Former Yugoslavia, Case No. IT-95-14/1-A, Prosecutor v. Aleksovski, Judgement of 24 March 2000, para. 113, which states that “the right of appeal is … a component of the fair trial requirement, which is itself a rule of customary international law and gives rise to the right of the accused to have like cases treated alike. This will not be achieved if each Trial Chamber is free to disregard decisions of law made by the Appeals Chamber, and decide the law as it sees fit.” Furthermore, we note the Decision of 21 March 2007 of the ICSID (International Centre for Settlement of Investment Disputes) Arbitration Tribunal, Case No. ARB/05/07, Saipem S.p.A. v. The People’s Republic of Bangladesh, ICSID IIC 280 (2007), p. 20, para. 67, which states that “[t]he Tribunal considers that it is not bound by previous decisions. At the same time, it is of the opinion that it must pay due consideration to earlier decisions of international tribunals. It believes that, subject to compelling contrary grounds, it has a duty to adopt solutions established in a series of consistent cases. It also believes that, subject to the specifics of a given treaty and of the circumstances of the actual case, it has a duty to seek to contribute to the harmonious development of investment law and thereby to meet the legitimate expectations of the community of States and investors towards certainty of the rule of law.”(2670)

7. Competence to determine jurisdiction

1702.      In US — 1916 Act, the Appellate Body agreed with the Panel that some issues of jurisdiction maybe of such a nature that they have to be addressed by the Panel at any time, and noted that:

“We note that it is a widely accepted rule that an international tribunal is entitled to consider the issue of its own jurisdiction on its own initiative, and to satisfy itself that it has jurisdiction in any case that comes before it. See, for example, Case Concerning the Administration of the Prince von Pless (Preliminary Objection) (1933) P.C.I.J. Ser. A/B, No. 52, p. 15; Individual Opinion of President Sir A. McNair, Anglo-Iranian Oil Co. Case (Preliminary Objection) (1952) I.C.J. Rep., p. 116; Separate Opinion of Judge Sir H. Lauterpacht in Case of Certain Norwegian Loans (1957) I.C.J. Rep., p. 43; and Dissenting Opinion of Judge Sir H. Lauterpacht in the Interhandel Case (Preliminary Objections) (1959) I.C.J. Rep., p. 104. See also M.O. Hudson, The Permanent Court of International Justice 1920-1942 (MacMillan, 1943), pp. 418-419; G. Fitzmaurice, The Law and Procedure of the International Court of Justice, Vol. 2 (Grotius Publications, 1986), pp. 530, 755-758; S. Rosenne, The Law and Practice of the International Court (Martinus Nijhoff, 1985), pp. 467-468; L.A. Podesta Costa and J.M. Ruda, Derecho Internacional Publico, Vol. 2 (Tipografica, 1985), p. 438; M. Diez de Velasco Vallejo, Instituciones de Derecho International Publico (Tecnos, 1997), p. 759. See also the award of the Iran-United States Claims Tribunal in Marks & Umman v. Iran, 8 Iran-United States C.T.R., pp. 296-97 (1985) (Award No. 53-458-3); J.J. van Hof, Commentary on the UNCITRAL Arbitration Rules: The Application by the Iran-US. Claims Tribunal (Kluwer, 1991), pp. 149-150; and Rule 41 (2) of the rules applicable to ICSID Arbitration Tribunals: International Centre for Settlement of Investment Disputes, Rules of Procedure for Arbitration Proceedings (Arbitration Rules).”(2671)

8. Estoppel, acquiescence, waiver

1703.      The Panel in Guatemala — Cement II distinguished “acquiescence” from “estoppel”:

“A second argument raised by Guatemala is based on the lack of reaction from Mexico to the alleged late notification, the alleged insufficient public notice and the alleged delay in providing the full text of the application to Mexico and Cruz Azul. Guatemala asserts that, by not reacting at the earliest possible moment, Mexico waived its rights to object to the above-mentioned alleged violations. Guatemala uses both the concepts of “acquiescence” and “estoppel” in support of this argument. We note that “acquiescence” amounts to “qualified silence”, whereby silence in the face of events that call for a reaction of some sort may be interpreted as a presumed consent.(2672) The concept of estoppel, also relied on by Guatemala in support of its argument, is akin to that of acquiescence. Estoppel is premised on the view that where one party has been induced to act in reliance on the assurances of another party, in such a way that it would be prejudiced were the other party later to change its position, such a change in position is “estopped”, that is precluded.”(2673)’(2674)

1704.      In Argentina — Poultry Anti-Dumping Duties, Argentina invoked the principle of estoppel to justify its claim that the Panel should refrain from ruling on the dispute. Argentina had raised as a preliminary issue that, prior to bringing WTO dispute settlement proceedings against Argentina’s anti-dumping measure, Brazil had challenged that measure before a MERCOSUR Ad Hoc Arbitral Tribunal. Argentina requested that, in light of the prior MERCOSUR proceedings, that the Panel refrain from ruling on the claims raised by Brazil in the present WTO dispute settlement proceedings.(2675) The United States, a third-party, argued that there is no basis for a WTO panel to apply the principle of estoppel. The Panel did not take up the issue of whether this principle can be applied by a panel or not. In a footnote to the Report, the Panel simply said that since it had found that the conditions identified by Argentina for the application of the principle of estoppel(2676) were not present, it did not consider it necessary to determine whether or not it would have had the authority to apply the principle of estoppel if the relevant conditions had been satisfied. Neither did the Panel consider it necessary to determine whether the three conditions proposed by Argentina were sufficient for the application of that principle.(2677)

1705.      In EC — Export Subsidies on Sugar the Appellate Body found an overlap between good faith under Article 3.10 of the DSU and estoppel:

“We understand the Panel to have addressed the European Communities’ arguments on Article 3.10 of the DSU and good faith together with the European Communities’ arguments regarding estoppel. We note, for instance, that, at the outset of its analysis, the Panel referred to the “parties’ arguments in respect to good faith and estoppel”.486 In summarizing those arguments, the Panel referred, inter alia, to the European Communities’ contention that “the Complainants were acting inconsistently with the general principle of good faith and with their obligation[s] under Article 3.10 of the DSU.”(2678)

1706.      In the same report, the Appellate Body later commented on the possibility of estoppel in the context of WTO dispute settlement proceedings:

“The principle of estoppel has never been applied by the Appellate Body. Moreover, the notion of estoppel, as advanced by the European Communities, would appear to inhibit the ability of WTO Members to initiate a WTO dispute settlement proceeding. We see little in the DSU that explicitly limits the rights of WTO Members to bring an action; WTO Members must exercise their “judgement as to whether action under these procedures would be fruitful”, by virtue of Article 3.7 of the DSU, and they must engage in dispute settlement procedures in good faith, by virtue of Article 3.10 of the DSU. This latter obligation covers, in our view, the entire spectrum of dispute settlement, from the point of initiation of a case through implementation. Thus, even assuming arguendo that the principle of estoppel could apply in the WTO, its application would fall within these narrow parameters set out in the DSU.”(2679)

1707.      The Panel in EC and certain member States — Large Civil Aircraft considered the European Communities’ argument “that the good faith obligation contained in Article 3.10 of the DSU, can reasonably be analysed “in the light of the general international law principle of estoppel.””(2680)

9. Ex aqueo et bono

1708.      In India — Patents (EC), India objected to the successive challenges its measures by the United States and the European Communities, and requested that the Panel dismiss the EC complaint as inadmissible on the grounds that since it was feasible for the European Communities to have brought its complaint simultaneously with the US complaint, the European Communities was required to do so. The Panel recognized that India’s concerns were “serious”, but stated that it could not make a ruling ex aequo et bono:

“We note that India’s rationale behind its restrictive reading of Articles 9.1 and 10.4 is that an unmitigated right to bring successive complaints by different parties based on the same facts and legal claims would entail serious risks for the multilateral trade order because of the possibility of inconsistent rulings, as well as problems of waste of resources and unwarranted harassment. While we recognize that these are serious concerns, this Panel is not an appropriate forum to address these issues.

 

According to Article 11 of the DSU, the Panel’s role is to “make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability and conformity with the relevant covered agreements”. Furthermore, under Article 3.2 of the DSU, the purpose of the panel process is to “clarify the existing provisions of [covered] agreements in accordance with customary rules of interpretation of public international law”. The same paragraph goes on to state that “Recommendation and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements”, and Article 19.2 also states that “… in their findings and recommendations, the panel and the Appellate Body cannot add to or diminish the rights and obligations provided in the covered agreements”. Thus, the Panel is required to base its findings on the language of the DSU. We simply cannot make a ruling ex aequo et bono to address a systemic concern divorced from explicit language of the DSU.”(2681)

10. Harmless error

1709.      The Panel in Guatemala — Cement II rejected the defence of “harmless error”:

“In our view, the GATT panel referred to by Guatemala in support of its position merely stated that it did not wish “to exclude that the concept of harmless error could be applicable in dispute settlement proceedings under the Agreement. “(2682) it therefore cannot be concluded that the GATT panel referred to “recognized the principle of harmless error “as alleged by Guatemala. We do not consider that the concept of “harmless error” as presented by Guatemala has attained the status of a general principle of public international law. In any event, we consider that our first task in this dispute is to determine whether Guatemala has acted consistently with its obligations under the relevant provisions of the AD Agreement. To the extent that Mexico can demonstrate that Guatemala has not respected its obligations under the relevant provisions of that Agreement, we must next consider arguments raised by Guatemala in respect of the nullification or impairment of benefits accruing to Mexico thereunder. Thus, while arguments regarding the existence and extent of the possible harm suffered by Mexico may be relevant to the issue of nullification or impairment, we do not consider that an argument of harmless error represents a defence in itself to an alleged infringement of a provision of the WTO Agreement.”(2683)

11. Jurit novit curia

1710.      In EC — Tariff Preferences, the Appellate Body invoked the principle of jura novit curia in support of the proposition that the burden of proof does not apply to questions of law or legal interpretation:

“Consistent with the principle of jura novit curia, it is not the responsibility of the European Communities to provide us with the legal interpretation to be given to a particular provision in the Enabling Clause; instead, the burden of the European Communities is to adduce sufficient evidence to substantiate its assertion that the Drug Arrangements comply with the requirements of the Enabling Clause.”(2684)

1711.      In a footnote to this passage, the Appellate Body quoted the International Court of Justice’s interpretation of jura novit curia:

“The principle of jura novit curia has been articulated by the International Court of Justice as follows:

 

It being the duty of the Court itself to ascertain and apply the relevant law in the given circumstances of the case, the burden of establishing or proving rules of international law cannot be imposed upon any of the parties, for the law lies within the judicial knowledge of the Court.

 

(International Court of Justice, Merits, Case Concerning Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), 1986 ICJ Reports, p. 14, para. 29 (quoting International Court of Justice, Merits, Fisheries Jurisdiction Case (United Kingdom of Great Britain and Northern Ireland v. Iceland), 1974 ICJ Reports, p. 9, para. 17))”(2685)

12. Lex specialis and the presumption against conflict

(a) General

1712.      In Indonesia — Autos, Indonesia invoked the principle of lex specialis in support of its argument that because the measures at issues are subsidies, they are governed exclusively by Article XVI of GATT and the SCM Agreement, and are not subject to Article III of the GATT or the TRIMS Agreement. The Panel rejected Indonesia’s defence. In the course of its analysis, the Panel discussed the principle of lex specialis and the presumption against conflict:

“In considering Indonesia’s defence that there is a general conflict between the provisions of the SCM Agreement and those of Article III of GATT, and consequently that the SCM Agreement is the only applicable law, we recall first that in public international law there is a presumption against conflict.(2686) This presumption is especially relevant in the WTO context(2687) since all WTO agreements, including GATT 1994 which was modified by Understandings when judged necessary, were negotiated at the same time, by the same Members and in the same forum. In this context we recall the principle of effective interpretation pursuant to which all provisions of a treaty (and in the WTO system all agreements) must be given meaning, using the ordinary meaning of words.”(2688)

1713.      In Thailand — Cigarettes (Philippines), the Panel was not persuaded by Thailand’s argument that Article 11.1 of the Customs Valuation Agreement is lex specialis to Article X:3(b). Regarding the general international law principle of lex specialis, the Panel observed that:

“The lex specialis principle has been defined by the International Law Commission (“ILC”) as “a generally accepted technique of interpretation and conflict resolution in international law. It suggests that whenever two or more norms deal with the same subject matter, priority should be given to the norm that is more specific”.(2689) It is our understanding that Thailand’s lex specialis argument with respect to the relationship between Article X:3(b) and Article 11.1 is therefore made on the premise that the obligations under these two provisions concern the same subject matter. Although both provisions address an obligation to provide for the right of appeal concerning customs issues, namely “administrative action relating to customs matters” under Article X:3(b) and “a determination of customs value” under Article 11.1, we do not consider that these two matters can necessarily be considered as the same subject matter such that they would trigger the application of the lex specialis principle.”(2690)

(b) General Interpretative Note to Annex 1A

(i) Text of the General Interpretative Note to Annex 1A

General Interpretative Note to Annex 1A

 

In the event of conflict between a provision of the General Agreement on Tariffs and Trade 1994 and a provision of another agreement in Annex 1A to the Agreement Establishing the World Trade Organization (referred to in the agreements in Annex 1A as the “WTO Agreement”), the provision of the other agreement shall prevail to the extent of the conflict.

(ii) Interpretation and application of the General Interpretative Note to Annex 1A

1714.      In Brazil — Desiccated Coconut, the Appellate Body noted that “[t]he general interpretative note to Annex 1A of the WTO Agreement indicates that the GATT 1994 and the other agreements are to be considered together”.(2691) The Appellate Body added that “[a] general interpretative note was included in Annex 1A in order to clarify the legal relationship of the GATT 1994 with the other agreements in Annex 1A”.(2692) The Appellate Body further clarified that:

“The relationship between the GATT 1994 and the other goods agreements in Annex 1A is complex and must be examined on a case-by-case basis. Although the provisions of the GATT 1947 were incorporated into, and became a part of the GATT 1994, they are not the sum total of the rights and obligations of WTO Members concerning a particular matter. For example, with respect to subsidies on agricultural products, Articles II, VI and XVI of the GATT 1994 alone do not represent the total rights and obligations of WTO Members. The Agreement on Agriculture and the SCM Agreement reflect the latest statement of WTO Members as to their rights and obligations concerning agricultural subsidies. The general interpretative note to Annex 1A was added to reflect that the other goods agreements in Annex 1A, in many ways, represent a substantial elaboration of the provisions of the GATT 1994, and to the extent that the provisions of the other goods agreements conflict with the provisions of the GATT 1994, the provisions of the other goods agreements prevail. This does not mean, however, that the other goods agreements in Annex 1A, such as the SCM Agreement, supersede the GATT 1994. As the Panel has said:

 

… the question for consideration is not whether the SCM Agreement supersedes Article VI of GATT 1994. Rather, it is whether Article VI creates rules which are separate and distinct from those of the SCM Agreement, and which can be applied without reference to that Agreement, or whether Article VI of GATT 1994 and the SCM Agreement represent an inseparable package of rights and disciplines that must be considered in conjunction.”(2693)

1715.      Finally, the Appellate Body confirmed that “[i]f there is a conflict between the provisions of the SCM Agreement and Article VI of the GATT 1994, furthermore, the provisions of the SCM Agreement would prevail as a result of the general interpretative note to Annex 1A”.(2694)

1716.      In Canada — Periodicals, the Panel rejected Canada’s argument that the measure at issue should be scrutinized under the GATS, to the exclusion of the GATT 1994. In the course of its analysis, the Panel observed that:

“The ordinary meaning of the texts of GATT 1994 and GATS as well as Article II:2 of the WTO Agreement, taken together, indicates that obligations under GATT 1994 and GATS can co-exist and that one does not override the other. If the consequences suggested by Canada were intended, there would have been provisions similar to Article XVI:3 of the WTO Agreement or the General Interpretative Note to Annex 1A in order to establish hierarchical order between GATT 1994 and GATS. The absence of such provisions between the two instruments implies that GATT 1994 and GATS are standing on the same plain in the WTO Agreement, without any hierarchical order between the two.”(2695)

1717.      In EC — Bananas III, given the existence of claims raised under GATT 1994, the Licensing Agreement and the TRIMs Agreement, the Panel was required to consider the interpretative interrelationship of these three agreements. After setting out the text of the General Interpretative Note to Annex 1A of the WTO Agreement, the Panel stated:

“As a preliminary issue, it is necessary to define the notion of “conflict” laid down in the General Interpretative Note. In light of the wording, the context, the object and the purpose of this Note, we consider that it is designed to deal with (i) clashes between obligations contained in GATT 1994 and obligations contained in agreements listed in Annex 1A, where those obligations are mutually exclusive in the sense that a Member cannot comply with both obligations at the same time, and (ii) the situation where a rule in one agreement prohibits what a rule in another agreement explicitly permits.(2696)

 

However, we are of the view that the concept of “conflict” as embodied in the General Interpretative Note does not relate to situations where rules contained in one of the Agreements listed in Annex 1A provide for different or complementary obligations in addition to those contained in GATT 1994. In such a case, the obligations arising from the former and GATT 1994 can both be complied with at the same time without the need to renounce explicit rights or authorizations. In this latter case, there is no reason to assume that a Member is not capable of, or not required to, meet the obligations of both GATT 1994 and the relevant Annex 1A Agreement.

 

Proceeding on this basis, we have to ascertain whether the provisions of the Licensing Agreement and the TRIMs Agreement, to the extent they are within the coverage of the terms of reference of this Panel, contain any conflicting obligations which are contrary to those stipulated by Articles I, III, X, or XIII of GATT 1994, in the sense that Members could not comply with the obligations resulting from both Agreements at the same time or that WTO Members are authorized to act in a manner that would be inconsistent with the requirements of GATT rules. Wherever the answer to this question is affirmative, the obligation or authorization contained in the Licensing or TRIMs Agreement would, in accordance with the General Interpretative Note, prevail over the provisions of the relevant article of GATT 1994. Where the answer is negative, both provisions would apply equally.

 

Based on our detailed examination of the provisions of the Licensing Agreement, Article 2 of the TRIMs Agreement as well as GATT 1994, we find that no conflicting, i.e. mutually exclusive, obligations arise from the provisions of the three Agreements that the parties to the dispute have put before us. Indeed, we note that the first substantive provision of the Licensing Agreement, Article 1.2, requires Members to conform to GATT rules applicable to import licensing.”(2697)

1718.      On appeal, the Appellate Body stated that the Panel should have first applied the agreement that “deals specifically, and in detail” with the subject matter at issue:

“Although Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing Agreement both apply, the Panel, in our view, should have applied the Licensing Agreement first, since this agreement deals specifically, and in detail, with the administration of import licensing procedures. If the Panel had done so, then there would have been no need for it to address the alleged inconsistency with Article X:3(a) of the GATT 1994.”(2698)

1719.      In EC — Hormones, the complainants advanced claims under both the GATT 1994 and the SPS Agreement. The Panel stated that:

“The parties to the dispute present diverging views with respect to whether we should first address GATT or the SPS Agreement. However, neither of the parties claims that the relevant provisions of the SPS Agreement and GATT are in conflict. Therefore, we do not need, as a preliminary matter, to address the General Interpretative Note to the Multilateral Agreements on Trade in Goods which only applies “[i]n the event of conflict between a provision of [GATT] and a provision of another Agreement in Annex 1A [inter alia, the SPS Agreement]”.”(2699)

1720. In Argentina — Footwear (EC), the Panel addressed the relationship between Article XIX of the GATT 1994 and Article 2.1 of the Agreement on Safeguards. In the course of its analysis, the Panel stated that:

“In arriving at this conclusion, we wish to emphasise that the issue before this Panel is not really whether the criterion of unforeseen developments of Article XIX is in outright conflict(2700) — in the sense of being mutually exclusive or mutually inconsistent, quod non, with Article 2.1 or any other provision of the Safeguards Agreement. In this respect, we recall the statement of the Indonesia — Automobiles panel that in international law there is a presumption against conflict.(2701) Nevertheless, if we were to assume that a conflict exists, the General Interpretative Note to Annex 1A to the Agreement Establishing the WTO would resolve the issue in the sense that the provisions of the Safeguards Agreement would prevail over Article XIX of GATT to the extent of that conflict.”(2702)’(2703)

1721. In Argentina — Footwear (EC), the Appellate Body reached a different conclusion from the Panel on the relationship between Article XIX of the GATT 1994 and Article 2.1 of the Agreement on Safeguards, but agreed that there was no “conflict”:

“[I]t is clear from Articles 1 and 11.1(a) of the Agreement on Safeguards that the Uruguay Round negotiators did not intend that the Agreement on Safeguards would entirely replace Article XIX. Instead, the ordinary meaning of Articles 1 and 11.1(a) of the Agreement on Safeguards confirms that the intention of the negotiators was that the provisions of Article XIX of the GATT 1994 and of the Agreement on Safeguards would apply cumulatively, except to the extent of a conflict between specific provisions.(2704) We do not see this as an issue involving a conflict between specific provisions of two Multilateral Agreements on Trade in Goods. Thus, we are obliged to apply the provisions of Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 cumulatively, in order to give meaning, by giving legal effect, to all the applicable provisions relating to safeguard measures.”

1722.      In India — Autos, the Panel decided to apply the GATT 1994 first, rather than the TRIMs Agreement. In the context of discussing this question of the order of analysis, the Panel noted that:

“Determining order of analysis is different to the question of resolution of conflict between provisions. The latter entails the use of conflict resolution rules or interpretative techniques. The Panel notes that both GATT 1994 and the TRIMs Agreement are part of Annex 1A of the WTO Agreement. A general interpretative note to Annex 1A provides that “[i]n the event of a conflict between a provision of the General Agreement on Tariffs and Trade 1994 and a provision of another agreement in Annex 1A (…) the provision of the other agreement shall prevail to the extent of the conflict.” No conflict has been alleged to exist in this instance, in the absence of any issue relating to any TRIMs which would have been notified under the TRIMs Agreement.”(2705)

1723.      In US — Softwood Lumber IV, Canada claimed that the United States investigating authority failed to conduct a proper analysis of whether subsidies “passed through” to the subject goods under investigation. In that context, the Appellate Body stated:

“At the outset, we observe that provisions in both the GATT 1994 and the SCM Agreement are relevant to this dispute. We note the Appellate Body’s earlier ruling that a provision of an agreement included in Annex 1A of the WTO Agreement (including the SCM Agreement), and a provision of the GATT 1994, that have identical coverage, both apply, but that the provision of the agreement that “deals specifically, and in detail” with a question should be examined first.(2706) The Appellate Body has also ruled that “countervailing duties may only be imposed in accordance with the provisions of Part V of the SCM Agreement and Article VI of the GATT 1994, taken together”(2707), and that “[i]f there is a conflict between the provisions of the SCM Agreement and Article VI of the GATT 1994 … the provisions of the SCM Agreement would prevail as a result of the general interpretative note to Annex 1A.”(2708) No conflict between Articles 10 and 32.1 of the SCM Agreement on the one hand, and Article VI:3 of the GATT 1994 on the other hand, is alleged in this appeal, nor do we see any such conflict. Therefore, the requirements of these provisions of the SCM Agreement and the GATT 1994 apply on a cumulative basis.”(2709)

1724.      In US — Upland Cotton, the Panel was presented with claims under the SCM Agreement, the Agreement on Agriculture, and the GATT 1994. In the context of discussing the order of analysis, the Panel stated that:

“An appropriate order of analysis of the claims requires careful consideration due to the interlocking nature of the SCM Agreement and the Agreement on Agriculture, the relationship between the SCM Agreement and Article XVI of the GATT 1994, and the relationship between the SCM Agreement and the Agreement on Agriculture, and Article III:4 of the GATT 1994. The respective texts of the covered agreements expressly provide for a general order of precedence among them. The general interpretative note to Annex 1A of the WTO Agreement provides that:

 

“In the event of conflict between a provision of the General Agreement on Tariffs and Trade 1994 and a provision of another agreement in Annex 1A to the Agreement Establishing the World Trade Organization (referred to in the agreements in Annex 1A as the “WTO Agreement”), the provision of the other agreement shall prevail to the extent of the conflict.”

  

This note only applies “[i]n the event of conflict”. It does not exclude the G/\7T/994 from the scope of application of the agreements set out in Annex 1A, including the SCM Agreement and the Agreement on Agriculture, in any other circumstances.”(2710)

1725.      In EC — Export Subsidies on Sugar, the Appellate Body rejected the European Communities’ argument that it could depart from its obligations under the Agreement on Agriculture through a claimed commitment provided in its goods schedule to the GATT 1994. The Appellate Body referred to the General Interpretative Note and the hierarchy between these two agreements:

“In any event, we note that Article 21 of the Agreement on Agriculture provides that: “[t]he provisions of [the] GATT 1994 and of other Multilateral Trade Agreements in Annex 1A to the WTO Agreement shall apply subject to the provisions of this Agreement.” In other words, Members explicitly recognized that there may be conflicts between the Agreement on Agriculture and the GATT 1994, and explicitly provided, through Article 21, that the Agreement on Agriculture would prevail to the extent of such conflicts. Similarly, the General interpretative note to Annex 1A to the WTO Agreement states that, “[i]n the event of conflict between a provision of the [GATT 1994] and a provision of another agreement in Annex 1A the provision of the other agreement shall prevail to the extent of the conflict.” The Agreement on Agriculture is contained in Annex 1A to the WTO Agreement.

 

As we noted above, Footnote 1, being part of the European Communities’ Schedule, is an integral part of the GATT 1994 by virtue of Article 3.1 of the Agreement on Agriculture. Therefore, pursuant to Article 21 of the Agreement on Agriculture, the provisions of the Agreement on Agriculture prevail over Footnote 1. We, therefore, do not agree with the European Communities that “there is no hierarchy between the export subsidy commitments in a Member’s schedule and the Agreement on Agriculture.(2711)

1726.      In US — Shrimp (Thailand) I US — Customs Bond Directive, the Panel found that the challenged measure was inconsistent with Article 18.1 of the Anti-Dumping Agreement. The Panel referred to the General Interpretative Note and related jurisprudence pertaining to lex specialis in the context of declining to rule on certain additional claims raised under the GATT 1994:

“Even if the Panel would have found that the application of the EBR is not inconsistent with Article 18.1 of the Anti-Dumping Agreement, the Panel is of the view that it would not be appropriate to proceed and rule on India’s additional GATT 1994 claims. We note that the text of Article 18.1 of the Anti-Dumping Agreement provides that “[n]o specific action against dumping of exports from another Member can be taken except in accordance with the provisions of the GATT 1994, as interpreted by this Agreement.” We recall that this reference to the provisions of GATT 1994 has been interpreted by the Appellate Body as referring to Article VI of the GATT 1994. We further recall that the Ad Note is an integral part of Article VI of the GATT 1994. We therefore interpret these provisions to mean that the WTO Agreements allow for the imposition of measures which are considered to be specific action against dumping provided they are in accordance with Article VI of the GATT 1994, including its Ad Note. Accordingly, we are unable to accept that a measure which constitutes specific action against dumping in accordance with the provisions of the Ad Note, can nevertheless be found inconsistent with other provisions of the GATT 1994. For example, if we were to find that the Amended CBD violates the MFN provision of Article I of the GATT 1994, such a finding would, as a consequence, render inutile the provision in Article 18.1 of the Anti-Dumping Agreement, and by reference, Article VI of the GATT 1994 and the Ad Note.

 

We find additional support for our conclusion in the General Interpretative Note to Annex 1A of the WTO Agreement, which provides that in the event of conflict between a provision of the GATT 1994 and another Agreement of Annex 1A, the provision of the other Agreement prevails. We have found that the Amended CBD constitutes specific action against dumping or subsidisation in accordance with Article VI of the GATT 1994, as interpreted by the Anti-Dumping Agreement, and thus, is consistent with Articles 1 and 18.1 of the Anti-Dumping Agreement. Therefore, our findings under these provisions of the Anti-Dumping Agreement must prevail over any potential finding of violation under Articles X:3(a), XI:1 and XIII, I:1, II:1(a) and (b) of the GATT 1994.

 

Finally, we consider the Panel’s discussion in US — 1916 Act (Japan) further relevant to this issue. After finding a violation of Article VI of the GATT 1994, the Panel considered whether it must also analyse a claim under Article III:4 of the GATT 1994. It held that, in the case before it, Article VI addressed the “basic feature” of the measure at issue more directly than Article III:4. In doing so, the Panel referred to the international law principle lex specialis derogat legi general! in support of its reasoning.(2712) The Panel did so by virtue of the Appellate Body’s finding in EC — Bananas III that

 

“Although Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing Agreement both apply, the Panel, in our view, should have applied the Licensing Agreement first, since this agreement deals specifically, and in detail, with the administration of import licensing procedures. If the Panel had done so, then there would have been no need for it to address the alleged inconsistency with Article X:3(a) of the GATT 1994.”(2713)

 

We agree that the principle of lex specialis should apply in such circumstances. Since Article VI of the GATT 1994, including the Ad Note, “deals specifically, and in detail”, with the issue of security for definitive anti-dumping and countervailing duties, those provisions address the “basic feature” of the measure at issue more directly than the other GATT 1994 provisions cited by India. Article VI and the Ad Note therefore constitute lex specialis that should prevail over the more general GATT 1994 provisions cited by India.”(2714)

1727.      In US — Poultry (China), the Panel was confronted with the issue of the relationship between Article XX(b) of the GATT 1994 and the SPS Agreement. In the course of its analysis, the Panel stated that “[i]is not uncommon for the specific agreements on trade in goods to be elaborations on provisions of the GATT 1994”. The Panel found support for its understanding of such a relationship in the way WTO Members have elaborated other provisions of the GATT 1994 through specific covered agreements. By way of example, the Panel stated that the Customs Valuation Agreement elaborates the provisions of Article VII of the GATT 1994, the Anti-Dumping Agreement and SCM Agreement provide that they explain the implementation and application of Article VI of the GATT 1994, and the Agreement on Safeguards provides that it clarifies and reinforces the disciplines of GATT 1994, specifically those of Article XIX. In that context, the Panel noted that:

“We acknowledge the existence of a general interpretative note in Annex 1A of the WTO Agreement which, in the words of the Appellate Body in Brazil — Desiccated Coconut, was included “in order to clarify the legal relationship of the GATT 1994 with the other agreements in Annex 1A (Appellate Body Report, Brazil — Desiccated Coconut, p. 12). It provides that in the event of a conflict between a provision of the GATT 1994 and a provision of another agreement in Annex 1A, the latter shall prevail to the extent of the conflict. We are not referring to this note since we do not understand this situation as a conflict.”(2715)

1728.      In Thailand — Cigarettes (Philippines), the Panel was not persuaded by Thailand’s argument that Article 11.1 of the Customs Valuation Agreement is lex specialis to Article X:3(b) of the GATT 1994. In the course of its analysis, the Panel noted that:

“Finally, we recall that the general interpretative note to Annex 1A of the WTO Agreement provides that” [i]n the event of conflict between a provision of the General Agreement on Tariffs and Trade 1994 and a provision of another agreement in [the WTO Agreement], the provision of the other agreement shall prevail to the extent of the conflict”. In our understanding, however, Thailand is not arguing that there is a conflict between Article X:3(b) of the GATT 1994 and Article 11.1 of the Customs Valuation Agreement. In any event, our reading above of both provisions in their specific context does not indicate a conflict between these two provisions either. Accordingly, we do not consider the principles under the general interpretative note to Annex 1A as applicable to the relationship between Article X:3(b) of the GATT 1994 and Article 11.1 of the Customs Valuation Agreement.”(2716)

1729.      The Panel in US — Tuna II (Mexico) referred to the General Interpretative Note in the context of discussing its order of analysis to claims presented under the TBT Agreement and the GATT 1994. The Panel concluded that “taking into account the specificity of the TBT Agreement and its precedence over GATT 1994 in the event of a conflict between provisions of the two agreements, we find it appropriate to consider first Mexico’s claims under the TBT Agreement”.(2717)

13. Precautionary principle

1730.      In EC — Hormones, the Appellate Body agreed with the Panel finding that the precautionary principle does not override the provisions of Articles 5.1 and 5.2 of the SPS Agreement and made the following observations about this principle:

“The status of the precautionary principle in international law continues to be the subject of debate among academics, law practitioners, regulators and judges. The precautionary principle is regarded by some as having crystallized into a general principle of customary international environmental law. Whether it has been widely accepted by Members as a principle of general or customary international law appears less than clear.(2718) We consider, however, that it is unnecessary, and probably imprudent, for the Appellate Body in this appeal to take a position on this important, but abstract, question. We note that the Panel itself did not make any definitive finding with regard to the status of the precautionary principle in international law and that the precautionary principle, at least outside the field of international environmental law, still awaits authoritative formulation.(2719)

 

It appears to us important, nevertheless, to note some aspects of the relationship of the precautionary principle to the SPS Agreement. First, the principle has not been written into the SPS Agreement as a ground for justifying SPS measures that are otherwise inconsistent with the obligations of Members set out in particular provisions of that Agreement. Secondly, the precautionary principle indeed finds reflection in Article 5.7 of the SPS Agreement. We agree, at the same time, with the European Communities, that there is no need to assume that Article 5.7 exhausts the relevance of a precautionary principle. It is reflected also in the sixth paragraph of the preamble and in Article 3.3. These explicitly recognize the right of Members to establish their own appropriate level of sanitary protection, which level may be higher (i.e., more cautious) than that implied in existing international standards, guidelines and recommendations. Thirdly, a panel charged with determining, for instance, whether “sufficient scientific evidence” exists to warrant the maintenance by a Member of a particular SPS measure may, of course, and should, bear in mind that responsible, representative governments commonly act from perspectives of prudence and precaution where risks of irreversible, e.g. life-terminating, damage to human health are concerned. Lastly, however, the precautionary principle does not, by itself, and without a clear textual directive to that effect, relieve a panel from the duty of applying the normal (i.e. customary international law) principles of treaty interpretation in reading the provisions of the SPS Agreement.(2720)

1731.      The Panel in EC — Approval and Marketing of Biotech Products reviewed the jurisprudence and doctrine related to the precautionary principle, noting many uncertainties in the status of the principle. The Panel finally declined to uphold the European Communities’ contention that the precautionary principle has “by now become a fully-fledged and general principle of international law”, and opted to refrain from expressing any view on the issue.(2721)

14. Right to determine composition of delegation

1732.      In EC — Bananas, Saint Lucia requested that the Appellate Body permit is non-governmental legal advisers to participate in the oral hearing. The Appellate Body agreed, stating:

“[W]e can find nothing in the Marrakesh Agreement Establishing the World Trade Organization (the “WTO Agreement”), the DSL) or the Working Procedures, nor in customary international law or the prevailing practice of international tribunals, which prevents a WTO Member from determining the composition of its delegation in Appellate Body proceedings.”(2722)

15. Sovereignty

1733.      In Japan — Alcoholic Beverages II, the Appellate Body stated that:

“The WTO Agreement is a treaty-the international equivalent of a contract. It is self-evident that in an exercise of their sovereignty, and in pursuit of their own respective national interests, the Members of the WTO have made a bargain. In exchange for the benefits they expect to derive as Members of the WTO, they have agreed to exercise their sovereignty according to the commitments they have made in the WTO Agreement.(2723)

1734.      In EC — Hormones, the Appellate Body referred to the principle of in dubio mitius and the notion of interpreting treaties “in deference to the sovereignly of states” in a footnote:

“The principle of in dubio mitius applies in interpreting treaties, in deference to the sovereignty of states. If the meaning of a term is ambiguous, that meaning is to be preferred which is less onerous to the party assuming an obligation, or which interferes less with the territorial and personal supremacy of a party, or involves less general restrictions upon the parties.”(2724)

1735.      The Appellate Body has not referred to or invoked the principle in any subsequent cases. In response to China invoking the principle in China — Publications and Audiovisual Products, the Appellate Body stated “even if the principle of in dubio mitius were relevant in WTO dispute settlement”, there was no scope for its application in that dispute:

“We have found above that the Panel did not err in its interpretation of “Sound recording distribution services” in accordance with Article 31 of the Vienna Convention. We have expressed the view that the Panel’s recourse to Article 32 of the Vienna Convention was not in error, but that it was also not necessary, given that the application of Article 31 yielded a conclusion on the proper interpretation of this entry in China’s GATS Schedule. We have also observed that we see no error in the Panel’s analysis under Article 32. We therefore do not accept China’s contention that the Panel should have found that the meaning of the entry “Sound recording distribution services” remains inconclusive or ambiguous after its analysis under Articles 31 and 32 of the Vienna Convention. Consequently, even if the principle of in dubio mitius were relevant in WTO dispute settlement, there is no scope for its application in this dispute.”(2725)

1736.      In US — FSC, the United States argued that a WTO Member is free to maintain a worldwide or territorial tax system, and that in recognition of “principles of tax sovereignty”, a country using a worldwide system is free to incorporate elements of a territorial system (or vice versa). The Panel stated that it

“We agree with the United States that neither the SCM Agreement specifically, nor the WTO Agreement generally, is intended to dictate the type of tax system that should be maintained by a Member. On the other hand, certain WTO rules do have implications for specific tax practices of Members. In the area of subsidies, it is clear from Article 1 of the SCM Agreement itself that tax measures of a WTO Member may give rise to subsidies subject to the disciplines of the SCM Agreement. It is further clear that, to the extent that a subsidy is contingent upon export performance, it is a prohibited export subsidy. Thus, the United States is free to maintain a world wide tax system, a territorial tax system or any other type of system it sees fit. This is not the business of the WTO. What it is not free to do is to establish a regime of direct taxation, provide an exemption from direct taxes specifically related to exports, and then claim that it is entitled to provide such an export subsidy because it is necessary to eliminate a disadvantage to exporters created by the US tax system itself.”(2726)

1737.      In US — Shrimp (Article 21.5 — Malaysia), Malaysia argued that the United States, by imposing a unilaterally defined standard of protection, violates the sovereign right of Malaysia to determine its own sea turtles protection and conservation policy. The Panel responded:

“We are mindful of the problem caused by the type of measure applied by the United States to pursue its environmental policy objectives. We recall that Principle 12 of the Rio Declaration on Environment and Development states in part that:

 

“unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on international consensus.”

 

However, it is the understanding of the Panel that the Appellate Body Report found that, while a WTO Member may not impose on exporting members to apply the same standards of environmental protection as those it applies itself, this Member may legitimately require, as a condition of access of certain products to its market, that exporting countries commit themselves to a regulatory programme deemed comparable to its own. At present, Malaysia does not have to comply with the US requirements because it does not export to the United States. If Malaysia exported shrimp to the United States, it would be subject to requirements that may distort Malaysia’s priorities in terms of environmental policy. As Article XX of the GATT 1994 has been interpreted by the Appellate Body, the WTO Agreement does not provide for any recourse in the situation Malaysia would face under those circumstances. While we cannot, in light of the interpretation of Article XX made by the Appellate Body, find in favour of Malaysia on this “sovereignty” issue, we nonetheless consider that the “sovereignty” question raised by Malaysia is an additional argument in favour of the conclusion of an international agreement to protect and conserve sea turtles which would take into account the situation of all interested parties.”(2727)

1738.      In US — Line Pipe, the Appellate Body stated that Members exercise sovereignty in respect of matters not regulated by the WTO agreements:

“We note also that we are not concerned with how the competent authorities of WTO Members reach their determinations in applying safeguard measures. The Agreement on Safeguards does not prescribe the internal decision-making process for making such a determination. That is entirely up to WTO Members in the exercise of their sovereignty. We are concerned only with the determination itself, which is a singular act for which a WTO Member may be accountable in WTO dispute settlement. It is of no matter to us whether that singular act results from a decision by one, one hundred, or-as here — six individual decision-makers under the municipal law of that WTO Member. What matters to us is whether the determination, however it is decided domestically, meets the requirements of the Agreement on Safeguards.(2728)

1739.      In Mexico — Telecoms, the Panel observed that “Members maintain the sovereign right to regulate within the parameters of Article VI of the GATS. Members’ regulatory sovereignty is an essential pillar of the progressive liberalization of trade in services, but this sovereignty ends whenever rights of other Members under the GATS are impaired.”(2729)

1740.      The Panel in EC — Approval and Marketing of Biotech Products rejected an argument that the WTO agreements at issue in that dispute should be interpreted in the light of other rules of international law that were not binding on all Parties to this dispute. The Panel rejected this argument for several reasons, including considerations relating to sovereignty:

“The European Communities appears to suggest that we must interpret the WTO agreements at issue in this dispute in the light of other rules of international law even if these rules are not binding on all Parties to this dispute.(2730) In addressing this argument, we first recall our view that Article 31(3)(c) should be interpreted to mandate consideration of rules of international law which are applicable in the relations between all parties to the treaty which is being interpreted.(2731) The parties to a dispute over compliance with a particular treaty are, of course, parties to that treaty. In relation to the present dispute it can thus be said that if a rule of international law is not applicable to one of the four WTO Members which are parties to the present dispute, the rule is not applicable in the relations between all WTO Members. Accordingly, based on our interpretation of Article 31(3)(c), we do not consider that in interpreting the relevant WTO agreements we are required to take into account other rules of international law which are not applicable to one of the Parties to this dispute. But even independently of our own interpretation, we think Article 31(3)(c) cannot reasonably be interpreted as the European Communities suggests. Indeed, it is not apparent why a sovereign State would agree to a mandatory rule of treaty interpretation which could have as a consequence that the interpretation of a treaty to which that State is a party is affected by other rules of international law which that State has decided not to accept.(2732)

1741.      In China — Intellectual Property Rights, China argued that the United States should carry a significantly higher burden of proof than it would normally encounter in respect of a claim concerning criminal law matters, and that the Panel should treat “sovereign jurisdiction over police powers” as a powerful default norm, departure from which can be authorized only in light of explicit and unequivocal consent of State parties. The Panel stated that:

“The Panel acknowledges the sensitive nature of criminal matters and attendant concerns regarding sovereignty. These concerns may be expected to find reflection in the text and scope of treaty obligations regarding such matters as negotiated by States and other Members. Section 5 of Part III of the TRIPS Agreement, dedicated to criminal procedures and remedies, is considerably briefer and less detailed than the other Sections on enforcement in Part III. Brief as it is, the text of Section 5 also contains significant limitations and flexibilities. The customary rules of treaty interpretation oblige the treaty interpreter to take these limitations and flexibilities into account in interpreting the relevant provision.”(2733)

1742.      In China — Raw Materials, China argued that the covered agreements affirm the inherent and sovereign right of every WTO Member to regulate trade, to which the Panel responded:

“The Panel agrees with China that WTO Members have an inherent and sovereign right to regulate trade. WTO Members and China have exercised this right, inter alia, in negotiating and ratifying the WTO Agreement. China has exercised its inherent and sovereign right to regulate trade in negotiating, among other actions, the terms of its accession into the WTO.

 

To the Panel, the implication of China’s argument is that because it has an inherent right to regulate trade, this right prevails over WTO rules intended to govern the exercise of that right. In the Panel’s view, it is China’s sovereign right to regulate trade that enabled it to negotiate and agree with the provisions of Paragraph 11.3 of its Accession Protocol. Thus, there is no contradiction between China’s sovereign right to regulate trade, the rights acquired, and the commitments undertaken by China that are contained in its Accession Protocol, including in its Paragraph 11.3. On the contrary, China’s Accession Protocol and its various rights and obligations, are the ultimate expression of China’s sovereignty.”(2734)

1743.      In China — Raw Materials, the Panel considered that the requirements of Article XX(g) of the GATT 1994 can be interpreted harmoniously with the international law principle of State sovereignty over its natural resources:

“One of the fundamental principles of international law is the principle of state sovereignty, denoting the equality of all states in competence and independence over their own territories and encompassing the right to make laws applicable within their own territories without intrusion from other sovereign states. Independent decisions can be taken with regard to matters including the choice of political, economic and social systems. The principle of state sovereignty is also exercised whenever states choose to enter into an international agreement with other sovereign states.

This was first established by the Permanent Court of International Justice (PCIJ) in the case of the S.S Wimbledon (1923), where it confirmed that “the right of entering into international engagements is an attribute of State sovereignty”.(2735) This principle was further elaborated in the PCIJ’s advisory opinion on the Exchange of Greek and Turkish Populations (1925).(2736) We find especially instructive for our purposes the PCIJ’s consideration of the principle in the case on Jurisdiction of the European Danube Commission between Galatz and Braila (1927), where the Court stated that “restrictions on the exercise of sovereign rights accepted by treaty by the State concerned cannot be considered as an infringement of sovereignty”.(2737)

 

An important element of the principle of state sovereignty is the principle of sovereignty over natural resources, recognized as a principle of international law,(2738) and allowing states to “freely use and exploit their natural wealth and resources wherever deemed desirable by them for their own progress and economic development”.(2739) The principle of sovereignty over natural resources is embodied in a number of international agreements, including in the Preamble of the Convention on Biological Diversity, which “[reaffirms] that States have sovereign rights over their biological resources”.(2740)

 

In the Panel’s view, consistently with Article 31(3)(c) of the Vienna Convention, our interpretation of Article XX(g) should “take into account” the principle of sovereignty over natural resources. The principle of sovereignty over natural resources affords Members the opportunity to use their natural resources to promote their own development while regulating the use of these resources to ensure sustainable development. Conservation and economic development are not necessarily mutually exclusive policy goals; they can operate in harmony. So too can such policy goals operate in harmony with WTO obligations, for Members must exercise their sovereignty over natural resources consistently with their WTO obligations. In the Panel’s view, Article XX(g) has been interpreted and applied in a manner that respects WTO Members’ sovereign rights over their own natural resources.(2741)

 

The Panel observes that the ability to enter into international agreements — such as the WTO Agreement — is a quintessential example of the exercise of sovereignty. In joining the WTO, China obtained significant commercial and institutional benefits, including with respect to its natural resources. It also committed to abide by WTO rights and obligations.

 

Exercising its sovereignty over its own natural resources while respecting the requirements of Article XX(g) that China committed to respect, is an efficient way for China to pursue its own social and economic development. These considerations support the view that “a comprehensive policy comprising a multiplicity of interacting measures” is an appropriate policy to conserve natural resources.(2742)

 

The Panel agrees with China that, in interpreting and applying Article XX(g) in relation to non-renewable resources, the treaty interpreter may take into account the international law principle of sovereignty over natural resources, to the extent relevant to the case at hand. The Panel also agrees that resource-endowed countries are entitled to manage the supply and use of those resources through conservation-related measures that foster the sustainable development of their domestic economies consistently with general international law and WTO law. As long as even-handed restrictions are imposed on domestic supply, Article XX(g) does not oblige resource-endowed countries to ensure that the economic development of other user-countries benefits identically from the exploitation of the resources of the endowed countries.

 

The Panel is of the view that China’s right to economic development and its sovereignty over its natural resources are not in conflict with China’s rights and obligations as a WTO Member. When China chose to join the WTO in full exercise of its sovereignty, China made the concurrent decision that its sovereign rights over its natural resources would thereafter be exercised within the parameters of the WTO provisions, including those of Article XX(g). At that time, China was aware of the terms of Article XX, as interpreted by the Appellate Body in its Gasoline and Shrimp reports, in particular with respect to the requirement that restrictions for which Article XX(g) is invoked could be justified only if they are made effective in conjunction with restrictions on domestic production or consumption. China’s Accession Protocol does not reveal any contrary understanding on the part of China or any WTO Members.”(2743)

16. Standing to bring a dispute / legal interest

1744.      In EC — Bananas III, the Panel and the Appellate Body rejected the European Communities’ argument that US claims concerning trade in goods should be rejected because US banana production is minimal, its banana exports are nil, and that for climatic reasons this situation is not likely to change. In that regard, the European Communities argued that there must be a requirement in the WTO dispute settlement system that a complaining party have such a “legal interest”, and the United States did not meet that requirement in this dispute. In the context of rejecting the European Communities’ argument, both the Panel and the Appellate Body considered general international law. For its part, the Panel observed that its conclusion “is consistent with decisions of international tribunals”, and noted that:

“The International Court of Justice has not defined the concept of legal interest in specific terms. However, a number of its cases would support finding a legal interest in this case. For example, in the Wimbledon case, the Permanent Court of International Justice found that a state could raise a claim with respect to the Kiel Canal even though its fleet did not want to use it, suggesting that a potential interest was sufficient for a legal interest. PCIJ (1923), Ser. A, no. 1, 20. In Northern Cameroons (Preliminary Objections), the ICJ stated:

 

“The function of the Court is to state the law, but it may pronounce judgment only in connection with concrete cases where there exists at the time of adjudication an actual controversy involving a conflict of legal interest between the parties. The Court’s judgment must have some practical consequence in the sense that it can affect existing legal rights or obligations of the parties, thus removing uncertainty from their legal relations” (ICJ Reports (1963), 33-34).

 

Here, our decision will have such an effect to the extent that the EC is obligated to revise the challenged measures. See also Part II of the Draft Articles on State Responsibility, art. 40.2(e)-(f), provisionally adopted by the Drafting Committee of the International Law Commission. A/CN.4/L524, 21 June 1996.”(2744)

1745.      In EC — Bananas III, the Appellate Body agreed with the Panel’s conclusion, and in the course of its reasoning stated that:

“The participants in this appeal have referred to certain judgments of the International Court of Justice and the Permanent Court of International Justice relating to whether there is a requirement, in international law, of a legal interest to bring a case.(2745) We do not read any of these judgments as establishing a general rule that in all international litigation, a complaining party must have a “legal interest” in order to bring a case. Nor do these judgments deny the need to consider the question of standing under the dispute settlement provisions of any multilateral treaty, by referring to the terms of that treaty.”(2746)

 

XXXV. Articles of Covered Agreements Invoked in Panel and Appellate Body Proceedings     back to top

A. Scope

1746.     This table identifies the articles of the covered agreements that have been invoked in panel and Appellate Body proceedings. It covers both original proceedings and Article 21.5 proceedings. The table covers disputes in which a panel report or Appellate Body report was circulated prior to 30 September 2011.

 
B. Sources

1747.     The information regarding articles of covered agreements invoked in panel proceedings is generally based on articles referred to in the complainant’s panel request.(2747) Information on exceptions invoked by the respondent in panel proceedings is based on the panel report.

1748.     The information regarding articles of the covered agreements invoked in Appellate Body proceedings is generally based on articles referred to by the Appellate Body in the section of its report entitled “Issues Raised in this Appeal”. However, in several instances that has been supplemented with additional article references found in the notice of appeal (and/or notice of other appeal).

 
C. Covered Agreements and Abbreviations

1749.     The titles of the covered agreements have been abbreviated as follows: WTO Agreement (“WTO”); GATT 1994 (“GATT”); Agreement on Agriculture (“AoA”); SPS Agreement (“SPS”); Agreement on Textiles and Clothing (“ATC”); TBT Agreement (“TBT”); Agreement on Trade-Related Investment Measures (“TRIMs”); Anti-Dumping Agreement (“AD”); Customs Valuation Agreement (“CVA”); Agreement on Import Licensing Procedures (“Lie.”); SCM Agreement (“SCM”); Agreement on Safeguards (SG”); General Agreement on Trade in Services (“GATS”); Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”); Dispute Settlement Understanding (“DSU”).

1750.     This table also includes paragraphs of Members’ protocols of accession and related working party reports invoked in panel or Appellate Body proceedings (“Accession”).

1751.     The “Exceptions” column identifies cases in which the respondent invoked one or more of the following exceptions: the “Enabling Clause”; Article XI:2 of the GATT 1994; Article XV:9 of the GATT 1994; Article XVIII of the GATT 1994; Article XX of the GATT 1994; Article XXIV of the GATT 1994; or Article XIV of the GATS.(2748)

This table does not include covered agreements that have been addressed in only one or fewer cases. These are the following: Agreement on Preshipment Inspection (not invoked in any proceeding); Agreement on Rules of Origin (invoked in one case;)(2749) Agreement on Trade in Civil Aircraft (not invoked in any proceeding); Agreement on Government Procurement (invoked in one case;)(2750) International Dairy Agreement (not addressed in any proceeding); and International Bovine Meat Agreement (not invoked in any proceeding).

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DS No. Type Short Title WTO GATT AoA SPS ATC TBT TRIMs AD CVA Lic. SCM SG GATS TRIPS DSU Accession Exceptions
DS2 P US — Gasoline I 2 GATT:
III XX(b)
XXII:1 XX(d)
XX(g)
DS2 AB US — Gasoline GATT:
XX
XX(g)
DS8, P Japan — Alcoholic III:1
DS10, Beverages II III:2
DS11
DS8, AB Japan — Alcoholic III:1
DS10, Beverages II III:2
DS11
DS18 P Australia — Salmon XI 2
XIII 3
5
DS18 AB Australia — Salmon 2.2
2.3
5
5.1
5.5
5.6
6
DS18 P Australia — Salmon 2.2
(Article 21.5 — 2.3
Canada) 5.1
5.5
5.6
6.1
6.2
8
Annex:
C:1(c)
DS22 P Brazil — Desiccated VI:3 13
Coconut VI:6(a)
DS22 AB Brazil — Desiccated I 32.3
Coconut II
VI
DS24 P US — Underwear 2
6
8
DS24 AB US — Underwear X:2 6
XIII:3(b) 6.10
DS26, P EC — Hormones III 4 2 2 GATT:
DS48 XI 3 5 XX(b)
5
DS26, AB EC — Hormones 2.2 11
DS48 3.1
3.3
5.1
5.5
5.6
DS27 P EC — Bananas III I 2 1 II
II 3 XVI
III XVII
X
XI
XIII
DS27 AB EC — Bananas III I:1 4.1 1.3 I:2(c) 6.2
III:4 21.1 II
X:3(a) II:1
XIII XVII
XIII:1 XXVIII(m)
XXVIII(n)
DS27 P EC — Bananas III 23
(Article 21.5 — EC) 23.2(a)
DS27 P EC — Bananas III I 3 II
(Article 21.5 — II XVII
Ecuador) XIII
XIII:1
XIII:2(d)
XIII:5
DS27 P EC — Bananas III I
(Article 21.5 — II
Ecuador II) / EC — XIII:1
Bananas III (Article XIII:2
21.5 — US)
DS27 AB EC — Bananas III II 9.3
(Article 21.5 — II:1(b) 19.1
Ecuador II) / EC — XIII 21.5
Bananas III (Article XIII:1
21.5 — US) XIII:2
DS31 P Canada — III GATT:
Periodicals XI XX(d)
DS31 AB Canada — III:2
Periodicals III:8(b)
DS33 P US — Wool Shirts 2
and Blouses 6
8
DS33 AB US — Wool Shirts 6 11
and Blouses 6.10
DS34 P Turkey — Textiles XI 2 GATT:
XIII XXIV
DS44 P Japan — Film III:1
III:4
X:1
X:3
DS46 P Brazil — Aircraft XVI 3
DS46 AB Brazil — Aircraft 3.1(a)
3.2
27.4
Annex:
I(k)
DS46 P Brazil — Aircraft [3]
(Article 21.5 —
Canada)
DS46 AB Brazil — Aircraft 3.1(a)
(Article 21.5 — 4.7
Canada) Annex:
I(k)
DS46 P Brazil — Aircraft [3]
(Article 21.5 —
Canada II)
DS50 P India — Patents 27
(US) 65
70
DS50 AB India — Patents 63
(US) 70.8
70.8(a)
70.9
DS54, P Indonesia — Autos I:1 2 3.1(b) 3
DS55, III:2 Annex: 5 20
DS59, III:4 1(a) 6 65
DS64 III:7 27
X:1 28.2
X:3(a)
DS56 P Argentina — II 7 1-8
Textiles and VII
Apparel VIII
X
DS56 AB Argentina — II 11
Textiles and VIII
Apparel
DS58 P US — Shrimp I GATT:
XI XX(b)
XIII XX(g)
DS58 AB US — Shrimp GATT:
XX
DS58 P US — Shrimp [XI] GATT:
(Article 21.5 — XX(g)
Malaysia)
DS58 AB US — Shrimp 21.5 GATT:
(Article 21.5 — XX
Malaysia)
DS60 P Guatemala — VI 2
Cement I 3
5
6
7
Annex I
DS60 AB Guatemala — 5.3 3.8
Cement I 17 19.1
17.4
DS62, P EC — Computer II:5
DS67, Equipment
DS68
DS62, AB EC — Computer II:1 6.2
DS67, Equipment II:5
DS68
DS69 P EC — Poultry II 4 1
III 5 3
X
XIII
XXVIII
DS69 AB EC — Poultry X 5.1(b) 1.2 11
XIII 3.2
XIII:2(d)
XXVIII
DS70 P Canada — Aircraft 3.1(a)
3.2
DS70 AB Canada — Aircraft 1.1(b)
3.1(a)
DS70 P Canada — Aircraft 3
(Article 21.5 —
Brazil)
DS75, P Korea — Alcoholic III:2
DS84 Beverages
DS75, AB Korea — Alcoholic III:1 11
DS84 Beverages III:2 12.7
Note Ad:
III:2
DS76 P Japan — XI 4 2
Agricultural 4
Products II 5
7
8
DS76 AB Japan — 2.2 11
Agricultural 5.1
Products II 5.6
5.7
7
8
Annex:
B:1
C:1(c)
DS79 P India — Patents 27
(EC) 65
70
DS87, P Chile — Alcoholic III:2
DS110 Beverages
DS87, AB Chile — Alcoholic III:1 3.2
DS110 Beverages III:2 12.7
Note Ad: 19.2
III:2
DS90 P India — XI:1 4.2 3 GATT:
Quantitative XIII XVIII
Restrictions XVIII:11
DS90 AB India — 11 GATT:
Quantitative XVIII:1
Restrictions XVIII:B
Note Ad:
XVIII:11
DS98 P Korea — Dairy XIX 2
4
5
12
DS98 AB Korea — Dairy XIX:1(a) 4 6.2
4.2
5.1
12.2
DS99 P US — DRAMS I 2
VI 3
X 5.8
6
11
17
17.6(i)
DS99 P US — DRAMS X:1 11
(Article 21.5 — 12.3
Korea)
DS103, P Canada — Dairy II 3 1 3
DS113 X 4 2
XI 8 3
XI:1 9
XIII 10
DS103, AB Canada — Dairy II:1(b) 9.1(a)
DS113 9.1(c)
10.1
DS103, P Canada — Dairy 3.3 3.1(a)
DS113 (Article 21.5 — New 8 3.2
Zealand and US) 9.1(a) Annex:
9.1(c) I(d)
10.1
10.3
DS103, AB Canada — Dairy 9.1(c)
DS113 (Article 21.5 — New
Zealand and US)
DS103, P Canada — Dairy 3.3 3.1(a)
DS113 (Article 21.5 — New 8 3.2
Zealand and US II) 9.1(a) Annex:
9.1(c) I(d)
10.1
10.3
DS103, AB Canada — Dairy 9.1(c)
DS113 (Article 21.5 — New 10.1
Zealand and US II) 10.3
DS108 P US — FSC 8 3.1(a)
9 3.1(b)
10
DS108 AB US — FSC 3.3 1.1
9.1(d) 3.1(a)
3.1(b)
4.2
FN59
DS108 P US — FSC (Article III:4 3 3.1(a)
21.5 — EC) 8 3.1(b)
10.1 3.2
Annex:
I(e)
DS108 AB US — FSC (Article III:4 3.3 1.1(a)(1)(ii)
21.5 — EC) 8 3.1(a)
10.1 4.7
10.3 FN59
DS108 P US — FSC (Article III:4 3 3.1(a)
21.5 — EC II) 8 3.1(b)
10.1 3.2
Annex
I(e)
DS108 AB US — FSC (Article 4.7 6.2
21.5 — EC II) 21.5
DS114 P Canada — 27
Pharmaceutical 28
Patents 33
DS121 P Argentina — XIX 2
Footwear (EC) 4
5
6
12
DS121 AB Argentina — XIX:1(a) 2 12.7
Footwear (EC) 3
4
DS122 P Thailand — H- VI 2
Beams 3
5
6
DS122 AB Thailand — H- 2 6.2
Beams 3
3.1
3.4
5
17.6(i)
17.6(ii)
DS126 P Australia — 3.1(a)
Automotive