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WTO ANALYTICAL INDEX: GATT 1994 General Agreement on Tariffs and Trade 1994 |
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> General
Agreement On Tariffs And Trade 1994 |
Article IV: Special Provisions relating to Cinematograph Films If any contracting party establishes or maintains internal quantitative regulations relating to exposed cinematograph films, such regulations shall take the form of screen quotas which shall conform to the following requirements:
(a) Screen quotas may require the exhibition of cinematograph films of national origin during a specified minimum proportion of the total screen time actually utilized, over a specified period of not less than one year, in the commercial exhibition of all films of whatever origin, and shall be computed on the basis of screen time per theatre per year or the equivalent thereof;
(b) With the exception of screen time reserved for films of national origin under a screen quota, screen time including that released by administrative action from screen time reserved for films of national origin, shall not be allocated formally or in effect among sources of supply;
(c) Notwithstanding the provisions of subparagraph (b) of this Article, any contracting party may maintain screen quotas conforming to the requirements of subparagraph (a) of this Article which reserve a minimum proportion of screen time for films of a specified origin other than that of the contracting party imposing such screen quotas; Provided that no such minimum proportion of screen time shall be increased above the level in effect on April 10, 1947;
(d) Screen quotas shall be subject to negotiation for their limitation, liberalization or elimination. No jurisprudence or decision of a competent WTO body. 290. With respect to GATT practice concerning Article IV, see GATT Analytical Index, page 210.
VI. Article V back to top Article V: Freedom of Transit 1. Goods (including baggage), and also vessels and other means of transport, shall be deemed to be in transit across the territory of a contracting party when the passage across such territory, with or without trans-shipment, warehousing, breaking bulk, or change in the mode of transport, is only a portion of a complete journey beginning and terminating beyond the frontier of the contracting party across whose territory the traffic passes. Traffic of this nature is termed in this article "traffic in transit".
2. There shall be freedom of transit through the territory of each contracting party, via the routes most convenient for international transit, for traffic in transit to or from the territory of other contracting parties. No distinction shall be made which is based on the flag of vessels, the place of origin, departure, entry, exit or destination, or on any circumstances relating to the ownership of goods, of vessels or of other means of transport.
3. Any contracting party may require that traffic in transit through its territory be entered at the proper custom house, but, except in cases of failure to comply with applicable customs laws and regulations, such traffic coming from or going to the territory of other contracting parties shall not be subject to any unnecessary delays or restrictions and shall be exempt from customs duties and from all transit duties or other charges imposed in respect of transit, except charges for transportation or those commensurate with administrative expenses entailed by transit or with the cost of services rendered.
4. All charges and regulations imposed by contracting parties on traffic in transit to or from the territories of other contracting parties shall be reasonable, having regard to the conditions of the traffic.
5. With respect to all charges, regulations and formalities in connection with transit, each contracting party shall accord to traffic in transit to or from the territory of any other contracting party treatment no less favourable than the treatment accorded to traffic in transit to or from any third country.*
6. Each contracting party shall accord to products which have been in transit through the territory of any other contracting party treatment no less favourable than that which would have been accorded to such products had they been transported from their place of origin to their destination without going through the territory of such other contracting party. Any contracting party shall, however, be free to maintain its requirements of direct consignment existing on the date of this Agreement, in respect of any goods in regard to which such direct consignment is a requisite condition of eligibility for entry of the goods at preferential rates of duty or has relation to the contracting party's prescribed method of valuation for duty purposes.
7. The provisions of this Article shall not apply to the operation of aircraft in transit, but shall apply to air transit of goods (including baggage). Ad Article V: Paragraph 5 With regard to transportation charges, the principle laid down in paragraph 5 refers to like products being transported on the same route under like conditions. No jurisprudence or decision of a relevant WTO body. 291. With respect to GATT practice concerning Article V, see GATT Analytical Index, pages 214-217.
VII. Article VI back to top Article VI: Anti-dumping and Countervailing Duties 1. The contracting parties recognize that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry. For the purposes of this Article, a product is to be considered as being introduced into the commerce of an importing country at less than its normal value, if the price of the product exported from one country to another
(a) is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country, or,
(b) in the absence of such domestic price, is less than either
(i) the highest comparable price for the like product for export to any third country in the ordinary course of trade, or
(ii) the cost of production of the product in the country of origin plus a reasonable addition for selling cost and profit.
Due allowance shall be made in each case for differences in conditions and terms of sale, for differences in taxation, and for other differences affecting price comparability.*
2. In order to offset or prevent dumping, a contracting party may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product. For the purposes of this Article, the margin of dumping is the price difference determined in accordance with the provisions of paragraph 1.*
3. No countervailing duty shall be levied on any product of the territory of any contracting party imported into the territory of another contracting party in excess of an amount equal to the estimated bounty or subsidy determined to have been granted, directly or indirectly, on the manufacture, production or export of such product in the country of origin or exportation, including any special subsidy to the transportation of a particular product. The term "countervailing duty" shall be understood to mean a special duty levied for the purpose of offsetting any bounty or subsidy bestowed, directly, or indirectly, upon the manufacture, production or export of any merchandise.*
4. No product of the territory of any contracting party imported into the territory of any other contracting party shall be subject to anti-dumping or countervailing duty by reason of the exemption of such product from duties or taxes borne by the like product when destined for consumption in the country of origin or exportation, or by reason of the refund of such duties or taxes.
5. No product of the territory of any contracting party imported into the territory of any other contracting party shall be subject to both anti-dumping and countervailing duties to compensate for the same situation of dumping or export subsidization.
6. (a) No contracting party shall levy any anti-dumping or countervailing duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the dumping or subsidization, as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry.
(b) The CONTRACTING PARTIES may waive the requirement of subparagraph (a) of this paragraph so as to permit a contracting party to levy an anti-dumping or countervailing duty on the importation of any product for the purpose of offsetting dumping or subsidization which causes or threatens material injury to an industry in the territory of another contracting party exporting the product concerned to the territory of the importing contracting party. The CONTRACTING PARTIES shall waive the requirements of subparagraph (a) of this paragraph, so as to permit the levying of a countervailing duty, in cases in which they find that a subsidy is causing or threatening material injury to an industry in the territory of another contracting party exporting the product concerned to the territory of the importing contracting party.*
(c) In exceptional circumstances, however, where delay might cause damage which would be difficult to repair, a contracting party may levy a countervailing duty for the purpose referred to in subparagraph (b) of this paragraph without the prior approval of the CONTRACTING PARTIES; Provided that such action shall be reported immediately to the CONTRACTING PARTIES and that the countervailing duty shall be withdrawn promptly if the CONTRACTING PARTIES disapprove.
7. A system for the stabilization of the domestic price or of the return to domestic producers of a primary commodity, independently of the movements of export prices, which results at times in the sale of the commodity for export at a price lower than the comparable price charged for the like commodity to buyers in the domestic market, shall be presumed not to result in material injury within the meaning of paragraph 6 if it is determined by consultation among the contracting parties substantially interested in the commodity concerned that:
(a) the system has also resulted in the sale of the commodity for export at a price higher than the comparable price charged for the like commodity to buyers in the domestic market, and
(b) the system is so operated, either because of the effective regulation of production, or otherwise, as not to stimulate exports unduly or otherwise seriously prejudice the interests of other contracting parties. Ad Article VI: Paragraph 1 1. Hidden dumping by associated houses (that is, the sale by an importer at a price below that corresponding to the price invoiced by an exporter with whom the importer is associated, and also below the price in the exporting country) constitutes a form of price dumping with respect to which the margin of dumping may be calculated on the basis of the price at which the goods are resold by the importer.
2. It is recognized that, in the case of imports from a country which has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the State, special difficulties may exist in determining price comparability for the purposes of paragraph 1, and in such cases importing contracting parties may find it necessary to take into account the possibility that a strict comparison with domestic prices in such a country may not always be appropriate. Paragraphs 2 and 3 1. As in many other cases in customs administration, a contracting party may require reasonable security (bond or cash deposit) for the payment of anti-dumping or countervailing duty pending final determination of the facts in any case of suspected dumping or subsidization.
2. Multiple currency practices can in certain circumstances constitute a subsidy to exports which may be met by countervailing duties under paragraph 3 or can constitute a form of dumping by means of a partial depreciation of a country's currency which may be met by action under paragraph 2. By "multiple currency practices" is meant practices by governments or sanctioned by governments. Paragraph 6 (b) Waivers under the provisions of this subparagraph shall be granted only on application by the contracting party proposing to levy an anti-dumping or countervailing duty, as the case may be. (a) Investigation initiated before entry into force of WTO Agreement 292. In Brazil - Desiccated Coconut, the Appellate Body upheld the Panel's finding that Article VI of GATT 1994 does not apply to countervailing duty measures imposed as a result of an investigation initiated pursuant to an application made before the entry into force of the WTO Agreement. Having found that pursuant to Article 28 of the Vienna Convention on the Law of Treaties, "[a]bsent 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", the Appellate Body based its finding on the interpretation of Article 32.3 of the SCM Agreement, which sets forth that "the provisions of this Agreement shall apply to investigations ... initiated pursuant to applications have been made on or after the date of entry into force for a WTO Agreement of the WTO Agreement". The Appellate Body stated that "[i]f Article 32.3 is read in conjunction with Articles 10 and 32.1 of the SCM Agreement, it becomes clear that the term 'this Agreement' in Article 32.3 means 'this [SCM] Agreement and Article VI of the GATT 1994'."(437) With reference to Articles 10 and 32.1 of the SCM Agreement, the Appellate Body went on to state: "From reading Article 10, it is clear that countervailing duties may only be imposed in accordance with Article VI of the GATT 1994 and the SCM Agreement. A countervailing duty being a specific action against a subsidy of another WTO Member, pursuant to Article 32.1, it can only be imposed 'in accordance with the provisions of GATT 1994, as interpreted by this Agreement'. The ordinary meaning of these provisions taken in their context leads us to the conclusion that the negotiators of the SCM Agreement clearly intended that, under the integrated WTO Agreement, 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."(438) 293. After making the finding quoted in paragraph 292 above, the Appellate Body referred to the omission of note 2 to the preamble of the Tokyo Round SCM Code, which states "[w]herever in this Agreement there is reference to 'the terms of this Agreement' or the 'articles' or 'provisions of this Agreement' it shall be taken to mean, as the context requires, the provisions of the General Agreement as interpreted and applied by this Agreement", from the SCM Agreement. The Preamble, together with footnote 2, had not been retained in the new SCM Agreement. The Philippines argued that this omission was evidence that the term "this Agreement" in Article 32.3 was to be understood to refer only to the SCM Agreement. The Appellate Body was unconvinced: "This note related to a provision in the preamble to the Tokyo Round SCM Code which demonstrated the Tokyo Round signatories' desire 'to apply fully and to interpret the provisions of Articles VI, XVI and XXIII' of the GATT 1947. The preamble was not retained in the new text of the SCM Agreement. Consequently, the note also disappeared. The SCM Agreement contains a set of rights and obligations that go well beyond merely applying and interpreting Articles VI, XVI and XXIII of the GATT 1947. The title to the SCM Agreement was also modified in this respect. Like the Panel, 'we do not consider that the exclusion of this provision from the SCM Agreement sheds much light on the question before us'.(439)"(440) 294. In further support of its view that the term "this Agreement" referred to both the SCM Agreement and Article VI of GATT 1994, the Appellate Body cited the following finding of the Panel, with the understanding that "the Panel's reference to 'SCM Agreements' in this paragraph referred to the SCM Agreement and the Tokyo Round SCM Code":(441) "Article VI of GATT 1947 and the Tokyo Round SCM Code represent, as among Code signatories, a package of rights and obligations regarding the use of countervailing measures, and Article VI of GATT 1994 and the SCM Agreement represent a new and different package of rights and obligations, as among WTO Members, regarding the use of countervailing duties. Thus, Article VI and the respective SCM Agreements impose obligations on a potential user of countervailing duties, in the form of conditions that have to be fulfilled in order to impose a duty, but they also confer the right to impose a countervailing duty when those conditions are satisfied. The SCM Agreements do not merely impose additional substantive and procedural obligations on a potential user of countervailing measures. Rather, the SCM Agreements and Article VI together define, clarify and in some cases modify the whole package of rights and obligations of a potential user of countervailing measures."(442) 295. In this regard, the Appellate Body noted that "[t]he fact that Article VI of the GATT 1947 could be invoked independently of the Tokyo Round SCM Code under the previous GATT system(443) does not mean that Article VI of GATT 1994 can be applied independently of the SCM Agreement in the context of the WTO."(444) The Appellate Body went on to state that "[t]he authors of the new WTO regime intended to put an end to the fragmentation that had characterized the previous system"(445), referring to the preamble and Article II:2 of the Marrakesh Agreement. Further, the Appellate Body stated that "... the Uruguay Round negotiators expressed an explicit intention to draw the line of application of the new WTO Agreement to countervailing duty investigations and reviews(446) at a different point in time from that for other general measures.(447)"(448) 296. In addition, the Appellate Body rejected the Philippines' argument that that "the transitional decisions(449) [of the Tokyo Round SCM Code signatories] recognize the right of WTO Members to invoke WTO norms even in situations involving elements that occurred prior to the entry into force of the WTO Agreement."(450) The Appellate Body opined that "[a]t the time the Tokyo Round SCM Code signatories agreed to these decisions, they were fully cognizant of the implications of the operation of Article 32.3 of the SCM Agreement."(451) 297. Lastly, the Appellate Body noted that its finding on the scope of Article VI of GATT 1994 would not result in leaving Members without a right of action against those countervailing duty measures which are not covered by Article 32.3 of the SCM Agreement.(452) Rather, the Decision on Consequences of Withdrawal from or Termination of the Tokyo Round SCM Code, adopted by the Tokyo Round Subsidies and Countervailing Measures Committee, extended dispute settlement under the Tokyo Round SCM Code for two years, one year beyond the legal termination of the Tokyo Round SCM Code which occurred on 31 December 1995. (b) Anti-dumping measures other than anti-dumping duties 298. In US - 1916 Act, the Appellate Body reviewed the Panels' finding that the United States' 1916 Antidumping Act was inconsistent with Article VI, and rejected the United States' appeal to the Panels' finding that the Act was to counteract "dumping" and thus, fell under the scope of Article VI. The Appellate Body considered that the issue depended on "whether Article VI regulates all possible measures Members can take in response to dumping."(453) In answering this question, the Appellate Body noted that "Article VI of the GATT 1994 must be read together with the provisions of the Anti-Dumping Agreement"(454) and referred to the text of Article 1 of the Anti-Dumping Agreement; specifically, the Appellate Body stated that "[s]ince 'an anti-dumping measure' must, according to Article 1 of the Anti-Dumping Agreement, be consistent with Article VI of the GATT 1994 and the provisions of the Anti-Dumping Agreement, it seems to follow that Article VI would apply to 'an anti-dumping measure', i.e., a measure against dumping."(455) The Appellate Body went on to state that "the scope of application of Article VI is clarified, in particular, by Article 18.1 of the Anti-Dumping Agreement"(456), and indicated that "... Article VI is applicable to any 'specific action against dumping' of exports, i.e., action that is taken in response to situations presenting the constituent elements of 'dumping'": "[T]he ordinary meaning of the phrase 'specific action against dumping' of exports within the meaning of Article 18.1 is action that is taken in response to situations presenting the constituent elements of 'dumping'. 'Specific action against dumping' of exports must, at a minimum, encompass action that may be taken only when the constituent elements of 'dumping' are present. Since intent is not a constituent element of 'dumping', the intent with which action against dumping is taken is not relevant to the determination of whether such action is 'specific action against dumping' of exports within the meaning of Article 18.1 of the Anti-Dumping Agreement.
Footnote 24 to Article 18.1 of the Anti-Dumping Agreement states:
'This is not intended to preclude action under other relevant provisions of GATT 1994, as appropriate.'
We note that footnote 24 refers generally to 'action' and not, as does Article 18.1, to 'specific action against dumping' of exports. 'Action' within the meaning of footnote 24 is to be distinguished from 'specific action against dumping' of exports, which is governed by Article 18.1 itself.
Article 18.1 of the Anti-Dumping Agreement contains a prohibition on the taking of any 'specific action against dumping' of exports when such specific action is not 'in accordance with the provisions of GATT 1994, as interpreted by this Agreement'. Since the only provisions of the GATT 1994 'interpreted' by the Anti-Dumping Agreement are those provisions of Article VI concerning dumping, Article 18.1 should be read as requiring that any 'specific action against dumping' of exports from another Member be in accordance with the relevant provisions of Article VI of the GATT 1994, as interpreted by the Anti-Dumping Agreement.
We recall that footnote 24 to Article 18.1 refers to 'other relevant provisions of GATT 1994' (emphasis added). These terms can only refer to provisions other than the provisions of Article VI concerning dumping. Footnote 24 thus confirms that the 'provisions of GATT 1994' referred to in Article 18.1 are in fact the provisions of Article VI of the GATT 1994 concerning dumping.
We have found that Article 18.1 of the Anti-Dumping Agreement requires that any 'specific action against dumping' be in accordance with the provisions of Article VI of the GATT 1994 concerning dumping, as those provisions are interpreted by the Anti-Dumping Agreement. It follows that Article VI is applicable to any 'specific action against dumping' of exports, i.e., action that is taken in response to situations presenting the constituent elements of 'dumping'."(457) 299. The Appellate Body in US - 1916 Act rejected the United States' argument that the term "may" in Article VI:2 indicates that Members may choose to impose other types of anti-dumping measures than anti-dumping duties, in which case they are not bound by the rules of Article VI, stating as follows: "[I]t is not obvious to us, based on the wording of Article VI:2 alone, that the verb 'may' also implies that a Member is permitted to impose a measure other than an anti-dumping duty.
We believe that the meaning of the word 'may' in Article VI:2 is clarified by Article 9 of the Anti-Dumping Agreement on the 'Imposition and Collection of Anti-dumping Duties'. Article VI of the GATT 1994 and the Anti-Dumping Agreement are part of the same treaty, the WTO Agreement. As its full title indicates, the Anti-Dumping Agreement is an 'Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994'. Accordingly, Article VI must be read in conjunction with the provisions of the Anti-Dumping Agreement, including Article 9. ... In light of this provision, the verb 'may' in Article VI:2 of the GATT 1994 is, in our opinion, properly understood as giving Members a choice between imposing an anti-dumping duty or not, as well as a choice between imposing an anti-dumping duty equal to the dumping margin or imposing a lower duty. We find no support in Article VI:2, read in conjunction with Article 9 of the Anti-Dumping Agreement, for the United States' argument that the verb 'may' indicates that Members, to counteract dumping, are permitted to take measures other than the imposition of anti-dumping duties."(458) 300. With respect to the further treatment of this subject-matter under GATT 1947, see GATT Analytical Index, pages 237-238. 301. In Brazil - Desiccated Coconut, the Panel considered that Article VI of GATT 1994 does not apply, in isolation from the SCM Agreement, to countervailing duty cases where the investigation has been initiated pursuant to an application made before the entry into force of the WTO Agreement. The Panel's finding and reasoning were subsequently upheld by the Appellate Body. See paragraphs 292-297 above. The Appellate Body, however, found it unnecessary to address one particular reason the Panel had given for its finding, namely that if Article VI were to apply independently from the SCM Agreement, Members might be subject to "a package of rights and obligations that were potentially more onerous than those to which they were subject under Article VI in conjunction with the Tokyo Round SCM Code when they initiated the investigation."(459) The Panel noted that the Tokyo Round SCM Code did not only impose additional obligations on a contracting party imposing countervailing duties, but also clarified and added some rights for such contracting party, such that certain obligations imposed by Article VI in conjunction with either the Tokyo Round SCM Code or the SCM Agreement were less stringent and easier to meet than obligations imposed by Article VI in isolation.(460) In this regard, the Panel also rejected the argument by the Philippines that Article VI of GATT 1994, as opposed to Article VI of GATT 1947, could be interpreted in the light of the Tokyo Round SCM Code and practice of the Code signatories; the Philippines were arguing that this interpretation would avoid the risk that Members would, through the application of Article VI of GATT 1994 in isolation, be subject to obligations beyond those imposed by Article VI of GATT 1947 in conjunction with the Tokyo Round SCM Code. The Panel noted: "[W]e 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 be taken 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.
Article XVI:1 of the WTO Agreement provides that, '[e]xcept as otherwise provided under this Agreement or the Multilateral Trade Agreements, the WTO shall be guided by the decisions, procedures and customary practices followed by the CONTRACTING PARTIES to GATT 1947 and the bodies established in the framework of GATT 1947'. We recognize that the Pork [i.e. US - Canadian Pork] Panel had indicated, in passing, that the Tokyo Round SCM Code represents 'practice' under Article VI of GATT 1947. Article 31.3(b) of the Vienna Convention provides that there may be taken into account, when interpreting a treaty, '[a]ny subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation'. Article 31.3 clearly distinguishes between the use of subsequent agreements and of subsequent practice as interpretive tools. The Tokyo Round SCM Code is, in our view, in the former category and cannot itself reasonably be deemed to represent 'customary practice' of the GATT 1947 CONTRACTING PARTIES. In any event, while the practice of Code signatories might be of some interpretive value in establishing their agreement regarding the interpretation of the Tokyo Round SCM Code (and arguably through Article XVI:1 of the WTO Agreement in interpreting provisions of that Code that were carried over into the successor SCM Agreement), it is clearly not relevant to the interpretation of Article VI of GATT 1994 itself; rather, only practice under Article VI of GATT 1947 is legally relevant to the interpretation of Article VI of GATT 1994."(461) 302. The relationships between Article VI, and the Tokyo Round SCM Agreement and the SCM Agreement were discussed by the Appellate Body in Brazil - Desiccated Coconut. See paragraphs 292-295 above. 303. In US - 1916 Act (EC), the Panel examined whether the US 1916 Antidumping Act was consistent with Article VI, and emphasized the "close link" between Article VI and the Anti-Dumping Agreement: "The official title of the Anti-Dumping Agreement is 'Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994'. This agreement is essential for the interpretation of Article VI. Articles 1 and 18.1 confirm the close link between Article VI and the Anti-Dumping Agreement. Moreover, as was recalled by the Appellate Body in the Brazil - Coconut case, the WTO Agreement is a single treaty instrument which was accepted by the WTO Members as a single undertaking. As a result, Article 18.1 of the Anti-Dumping Agreement is part of the context of Article VI since Article 31.2 of the Vienna Convention provides that 'the context for the purpose of the interpretation of a treaty shall comprise, [...] the text [of the treaty], including its preamble and annexes...'. We are therefore not only entitled to consider Articles 1 and 18.1 of the Anti-Dumping Agreement even though the European Communities did not mention those provisions as part of its claims in its request for establishment of a panel, but we are also required to do so under the general principles of interpretation of public international law.(462)"(463) 304. With respect to the finding of the Appellate Body in Brazil - Desiccated Coconut concerning the relationship between the SCM Agreement and GATT Article VI as referenced in paragraph 292 above, see the Chapter on the WTO Agreement, paragraph 11, which deals with the issue of the "single undertaking". 305. In Brazil - Desiccated Coconut, the Appellate Body referred to the SCM Agreement in the context of clarifying the scope of Article VI. See the excerpts referenced in paragraphs 292 and 294 above. 4. Challenge against a law as such under Article VI 306. In US - 1916 Act, the Appellate Body rejected the United States' argument that the Panels had no jurisdiction to consider the claims that the Act as such was inconsistent with Article VI. Noting that the complainants had brought their claims of inconsistency with Article VI of the GATT 1994 and the Anti-Dumping Agreement pursuant to Article XXIII of the GATT 1994 and Article 17 of the Anti-Dumping Agreement, the Appellate Body explained: "Articles XXII and XXIII of the GATT 1994 serve as the basis for consultations and dispute settlement under the GATT 1994 and, through incorporation by reference, under most of the other agreements in Annex 1A to the WTO Agreement.(464) According to Article XXIII:1(a) of the GATT 1994, a Member can bring a dispute settlement claim against another Member when it considers that a benefit accruing to it under the GATT 1994 is being nullified or impaired, or that the achievement of any objective of the GATT 1994 is being impeded, as a result of the failure of that other Member to carry out its obligations under that Agreement.
Prior to the entry into force of the WTO Agreement, it was firmly established that Article XXIII:1(a) of the GATT 1947 allowed a Contracting Party to challenge legislation as such, independently from the application of that legislation in specific instances. While the text of Article XXIII does not expressly address the matter, panels consistently considered that, under Article XXIII, they had the jurisdiction to deal with claims against legislation as such.(465) In examining such claims, panels developed the concept that mandatory and discretionary legislation should be distinguished from each other, reasoning that only legislation that mandates a violation of GATT obligations can be found as such to be inconsistent with those obligations. We consider the application of this distinction to the present cases in section IV(B) below.
Thus, that a Contracting Party could challenge legislation as such before a panel was well-settled under the GATT 1947. We consider that the case law articulating and applying this practice forms part of the GATT acquis which, under Article XVI:1 of the WTO Agreement, provides guidance to the WTO and, therefore, to panels and the Appellate Body. Furthermore, in Article 3.1 of the DSU, Members affirm 'their adherence to the principles for the management of disputes heretofore applied under Articles XXII and XXIII of GATT 1947'. We note that, since the entry into force of the WTO Agreement, a number of panels have dealt with dispute settlement claims brought against a Member on the basis of its legislation as such, independently from the application of that legislation in specific instances.(466)"(467) 307. In this connection, in US - 1916 Act, the Appellate Body examined whether challenge against a law as such is permissible under the Anti-Dumping Agreement. See the Chapter on the Anti-Dumping Agreement, paragraphs 472-475. 308. In Guatemala - Cement I, the Appellate Body discussed the specificity requirements for the terms of reference under Article 17.4 of the Anti-Dumping Agreement. See the Chapter on the Anti-Dumping Agreement, paragraphs 484-485. 309. In US - 1916 Act, in discussing the United States' appeal to the Panels' finding that the Act was to counteract "dumping" and thus, fell under the scope of Article VI, the Appellate Body noted as follows: "[U]nder Article VI:1 of the GATT 1994 and Article 2 of the Anti-Dumping Agreement, neither the intent of the persons engaging in 'dumping' nor the injurious effects that 'dumping' may have on a Member's domestic industry are constituent elements of 'dumping'."(468) 310. In US - 1916 Act (EC), the Panel stated that "Article VI:1 of the GATT 1994 requires the establishment of material injury or a threat thereof."(469) 311. In US - 1916 Act, the Appellate Body interpreted Article VI:2 in addressing the question of whether Members may choose to impose other types of anti-dumping measures than anti-dumping duties. The Appellate Body stated that "Article VI, and, in particular, Article VI:2, read in conjunction with the Anti-Dumping Agreement, limit the permissible responses to dumping to definitive anti-dumping duties, provisional measures and price undertakings."(470) See also paragraph 299 above, with respect to the discussion concerning the term "may" contained in Article VI:2. Further, the Panel on US - 1916 Act (Japan) discussed this issue taking into consideration preparatory works of the WTO Agreement.(471) 312. The Panel in Brazil - Desiccated Coconut found that because Article VI of GATT 1994 did not constitute applicable law for the purposes of the dispute, the claims made under Article I (and II) of GATT 1994, which were derived from claims of inconsistency with Article VI of GATT 1994, could not succeed.(472) The Appellate Body in Brazil - Desiccated Coconut confirmed this finding.(473) 313. The Panel in Brazil - Desiccated Coconut found that because Article VI of GATT 1994 did not constitute applicable law for the purposes of the dispute, the claims made under Article II (and I) of GATT 1994, which were derived from claims of inconsistency with Article VI of GATT 1994, could not succeed.(474) The Appellate Body in Brazil - Desiccated Coconut confirmed this finding.(475) 314. In US - 1916 Act (EC) and US - 1916 (Japan), exercising judicial economy, the Panel found that the United States' 1916 Act was inconsistent with Article VI of the GATT 1994. However, the Panel did not also examine the EC claim that it was inconsistent with Article III of GATT 1994. See paragraph 264 above. 315. In US - 1916 Act (Japan), exercising judicial economy, the Panel did not examine a claim under Article XI of GATT 1994, after having found a violation of Article VI. See paragraph 384 below. 316. As the complainant had not established a prima facie case of a violation of Articles 2.1 and 2.2 of the Anti-Dumping Agreement, the Panel in US - 1916 Act (EC) stated that "[t]he fact that we found a violation of Article VI:1 of the GATT 1994 is not as such sufficient to conclude that Articles 2.1 and 2.2 of the Anti-Dumping Agreement have been breached, in the absence of more specific arguments and evidence."(476) 317. In US - 1916 Act (Japan), the Panel was faced with the question whether it could make findings under Article VI, without, at the same time, making a finding under a provision of the Anti-Dumping Agreement or whether "the link between Article VI and the Anti-Dumping Agreement is such as to make impossible a finding under Article VI only". The Panel referred to the findings of the Panel on India - Quantitative Restrictions and of the Appellate Body in Brazil - Desiccated Coconut and distinguished these two cases from the issue before it. The Panel then concluded that it could "make findings under Article VI without, at the same time, having to make findings under the provisions of the Anti-Dumping Agreement, and vice-versa": "Regarding the relationship between Article VI and the Anti-Dumping Agreement and, in particular, the question whether we could make findings regarding Article VI independently from the Anti-Dumping Agreement, we note that the issue addressed by the panel and the Appellate Body in Brazil - Desiccated Coconut, to which the United States refers, must be differentiated from the one before us. In Brazil - Desiccated Coconut, the question was one of application of Article VI of the GATT when the WTO Agreement on Subsidies and Countervailing Measures did not apply. In the present case, the issue is whether the Panel can make findings in relation to Article VI only or whether the link between Article VI and the Anti-Dumping Agreement is such as to make impossible a finding under Article VI only.
We note that the panel in the India - Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products(477) case did not make findings under Article XVIII:11 of the GATT 1994 in isolation from the Understanding on Balance-of-Payments Provisions of the GATT 1994. Likewise, we have no intention to address Article VI in isolation from the Anti-Dumping Agreement. In the present case, the complainant has made claims based on the violation of provisions of Article VI and the Anti-Dumping Agreement. In our opinion, if the panel in Brazil - Desiccated Coconut confirmed that Article VI and the Agreement on Subsidies and Countervailing Measures were an 'inseparable package of rights and obligations', this is because the solution proposed by the complainant would have led to apply Article VI in total disregard of the Agreement on Subsidies and Countervailing Measures. Such a solution cannot even be considered in our case. Article VI and the Anti-Dumping Agreement are part of the same treaty: the WTO Agreement. In application of the customary rules of interpretation of international law, we are bound to interpret Article VI of the GATT 1994 as part of the WTO Agreement and, pursuant to Article 31 of the Vienna Convention, the Anti-Dumping Agreement forms part of the context of Article VI. This implies that we must look at Article VI and the Anti-Dumping Agreement as part of an "inseparable package of rights and obligations" and that Article VI should not be interpreted in a way that would deprive either Article VI or the Anti-Dumping Agreement of meaning.(478) However, this obligation does not prevent us from making findings in relation to Article VI only, as the panel did in its report on India - Quantitative Restrictions.
We conclude that we can make findings under Article VI without, at the same time, having to make findings under the provisions of the Anti-Dumping Agreement, and vice-versa. However, the fact that Article VI and the Anti-Dumping Agreement represent an inseparable package of rights and disciplines requires that we interpret each of the provisions invoked by Japan in its claims in conjunction with the other relevant provisions of this 'inseparable package', so as to give meaning to all of them."(479) 318. Also, the Panel on US - 1916 Act (EC) explained its exercise of judicial economy with respect to Article 3 as follows: "Since we found above that the 1916 Act violated Article VI:1 by not providing for an injury test compatible with the terms of that Article and since Article 3 simply addresses in more detail the requirement of 'material injury' contained in Article VI:1, we do not find it necessary to make specific findings under Article 3 and therefore exercise judicial economy, as we are entitled to do under GATT panel practice and WTO panel and Appellate Body practice."(480) 2. Tokyo Round Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade 319. The Panel on Brazil - Desiccated Coconut discussed the legal relevance of the Tokyo Round Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade to Article VI of the GATT 1994. See paragraphs 293-297 above. 320. In the Brazil - Desiccated Coconut dispute, the Panel was faced with the question "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."(481) In phrasing this issue, the Panel in Brazil - Desiccated Coconut made clear that the SCM Agreement did not supersede Article VI of GATT 1994 as the basis for the WTO discipline of countervailing measures. The Panel stated: "It is evident that both Article VI of GATT 1994 and the SCM Agreement have force, effect, and purpose within the WTO Agreement. That GATT 1994 has not been superseded by other Multilateral Agreements on Trade in Goods ... is demonstrated by a general interpretive note to Annex 1A of the WTO Agreement. The fact that certain important provisions of Article VI of GATT 1994 are neither replicated nor elaborated in the SCM Agreement further demonstrates this point. Thus, the question for consideration is not whether the SCM Agreement supersedes Article VI of GATT 1994."(482) 321. The Appellate Body in Brazil - Desiccated Coconut confirmed the statement by the Panel that the SCM Agreement did not supersede Article VI of GATT 1994(483), and stated: "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."(484) 322. The Appellate Body in Brazil - Desiccated Coconut, in addressing the issue of the scope of Article VI of the GATT 1994, noted that "[t]he relationship between the SCM Agreement and Article VI of GATT 1994 is set out in Articles 10 and 32.1 of the SCM Agreement."(485) See paragraph 292 above. With respect to the Appellate Body's other findings on this issue, see the excerpts referenced in the Chapter on the SCM Agreement, section X.B.3. 323. In Brazil - Desiccated Coconut, the Appellate Body further touched on the relationship between Article VI of the GATT 1994 and the SCM Agreement in clarifying the scope of Article VI. See paragraphs 294-295 above.
VIII. Article VII back to top Article VII: Valuation for Customs Purposes 1. The contracting parties recognize the validity of the general principles of valuation set forth in the following paragraphs of this Article, and they undertake to give effect to such principles, in respect of all products subject to duties or other charges* or restrictions on importation and exportation based upon or regulated in any manner by value. Moreover, they shall, upon a request by another contracting party review the operation of any of their laws or regulations relating to value for customs purposes in the light of these principles. The CONTRACTING PARTIES may request from contracting parties reports on steps taken by them in pursuance of the provisions of this Article.
2. (a) The value for customs purposes of imported merchandise should be based on the actual value of the imported merchandise on which duty is assessed, or of like merchandise, and should not be based on the value of merchandise of national origin or on arbitrary or fictitious values.*
(b) "Actual value" should be the price at which, at a time and place determined by the legislation of the country of importation, such or like merchandise is sold or offered for sale in the ordinary course of trade under fully competitive conditions. To the extent to which the price of such or like merchandise is governed by the quantity in a particular transaction, the price to be considered should uniformly be related to either (i) comparable quantities, or (ii) quantities not less favourable to importers than those in which the greater volume of the merchandise is sold in the trade between the countries of exportation and importation.*
(c) When the actual value is not ascertainable in accordance with subparagraph (b) of this paragraph, the value for customs purposes should be based on the nearest ascertainable equivalent of such value.*
3. The value for customs purposes of any imported product should not include the amount of any internal tax, applicable within the country of origin or export, from which the imported product has been exempted or has been or will be relieved by means of refund.
4. (a) Except as otherwise provided for in this paragraph, where it is necessary for the purposes of paragraph 2 of this Article for a contracting party to convert into its own currency a price expressed in the currency of another country, the conversion rate of exchange to be used shall be based, for each currency involved, on the par value as established pursuant to the Articles of Agreement of the International Monetary Fund or on the rate of exchange recognized by the Fund, or on the par value established in accordance with a special exchange agreement entered into pursuant to Article XV of this Agreement.
(b) Where no such established par value and no such recognized rate of exchange exist, the conversion rate shall reflect effectively the current value of such currency in commercial transactions.
(c) The CONTRACTING PARTIES, in agreement with the International Monetary Fund, shall formulate rules governing the conversion by contracting parties of any foreign currency in respect of which multiple rates of exchange are maintained consistently with the Articles of Agreement of the International Monetary Fund. Any contracting party may apply such rules in respect of such foreign currencies for the purposes of paragraph 2 of this Article as an alternative to the use of par values. Until such rules are adopted by the Contracting Parties, any contracting party may employ, in respect of any such foreign currency, rules of conversion for the purposes of paragraph 2 of this Article which are designed to reflect effectively the value of such foreign currency in commercial transactions.
(d) Nothing in this paragraph shall be construed to require any contracting party to alter the method of converting currencies for customs purposes which is applicable in its territory on the date of this Agreement, if such alteration would have the effect of increasing generally the amounts of duty payable.
5. The bases and methods for determining the value of products subject to duties or other charges or restrictions based upon or regulated in any manner by value should be stable and should be given sufficient publicity to enable traders to estimate, with a reasonable degree of certainty, the value for customs purposes. Ad Article VII Paragraph 1 The expression "or other charges" is not to be regarded as including internal taxes or equivalent charges imposed on or in connection with imported products. Paragraph 2 1. It would be in conformity with Article VII to presume that "actual value" may be represented by the invoice price, plus any non-included charges for legitimate costs which are proper elements of "actual value" and plus any abnormal discount or other reduction from the ordinary competitive price.
2. It would be in conformity with Article VII, paragraph 2 (b), for a contracting party to construe the phrase "in the ordinary course of trade ... under fully competitive conditions", as excluding any transaction wherein the buyer and seller are not independent of each other and price is not the sole consideration.
3. The standard of "fully competitive conditions" permits a contracting party to exclude from consideration prices involving special discounts limited to exclusive agents.
4. The wording of subparagraphs (a) and (b) permits a contracting party to determine the value for customs purposes uniformly either (1) on the basis of a particular exporter's prices of the imported merchandise, or (2) on the basis of the general price level of like merchandise. No jurisprudence or decision of a relevant WTO body. 324. With respect to GATT practice concerning Article VII, see GATT Analytical Index, pages 259-265.
IX. Article VIII back to top Article VIII: Fees and Formalities connected with Importation and Exportation* 1. (a) All fees and charges of whatever character (other than import and export duties and other than taxes within the purview of Article III) imposed by contracting parties on or in connection with importation or exportation shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.
(b) The contracting parties recognize the need for reducing the number and diversity of fees and charges referred to in subparagraph (a).
(c) The contracting parties also recognize the need for minimizing the incidence and complexity of import and export formalities and for decreasing and simplifying import and export documentation requirements.*
2. A contracting party shall, upon request by another contracting party or by the CONTRACTING PARTIES, review the operation of its laws and regulations in the light of the provisions of this Article.
3. No contracting party shall impose substantial penalties for minor breaches of customs regulations or procedural requirements. In particular, no penalty in respect of any omission or mistake in customs documentation which is easily rectifiable and obviously made without fraudulent intent or gross negligence shall be greater than necessary to serve merely as a warning.
4. The provisions of this Article shall extend to fees, charges, formalities and requirements imposed by governmental authorities in connection with importation and exportation, including those relating to: (a) consular transactions, such as consular invoices and certificates;
(b) quantitative restrictions;
(c) licensing;
(d) exchange control;
(e) statistical services;
(f) documents, documentation and certification;
(g) analysis and inspection; and
(h) quarantine, sanitation and fumigation. Ad Article VIII 1. While Article VIII does not cover the use of multiple rates of exchange as such, paragraphs 1 and 4 condemn the use of exchange taxes or fees as a device for implementing multiple currency practices; if, however, a contracting party is using multiple currency exchange fees for balance of payments reasons with the approval of the International Monetary Fund, the provisions of paragraph 9 (a) of Article XV fully safeguard its position.
2. It would be consistent with paragraph 1 if, on the importation of products from the territory of a contracting party into the territory of another contracting party, the production of certificates of origin should only be required to the extent that is strictly indispensable. 325. In Argentina - Textiles and Apparel, the Panel addressed an Argentine ad valorem tax on imports of 3 per cent, called a "statistical tax", described by Argentina as designed to cover the cost of providing a statistical service in the form of a reliable database for foreign trade operators. The Panel found that this statistical tax was inconsistent with the substantive requirements of Article VIII:1(a) of GATT 1994. (Argentina subsequently did not appeal this finding, but claimed that the Panel had failed to take properly into account a relevant obligation by Argentina towards the IMF.) The Panel emphasized that an ad valorem tax, by its very design, is not "limited in amount to the approximate cost of services rendered", as required by Article VIII:1(a): "The meaning of Article VIII was examined in detail in the Panel Report on United States - Customs User Fee.(486) The panel found that Article VIII's requirement that the charge be 'limited in amount to the approximate cost of services rendered' is 'actually a dual requirement, because the charge in question must first involve a 'service' rendered, and then the level of the charge must not exceed the approximate cost of that 'service".(487) According to the panel report, the term 'services rendered' means 'services rendered to the individual importer in question'.(488) In the present case Argentina states that the service is not rendered to the individual importer, or to the specific importer associated with a particular operation, but to foreign trade operators in general and foreign trade as an activity per se.
An ad valorem duty with no fixed maximum fee, by its very nature, is not 'limited in amount to the approximate cost of services rendered'. For example, high-price items necessarily will bear a much greater tax burden than low-price goods, yet the service accorded to both is essentially the same. An unlimited ad valorem charge on imported goods violates the provisions of Article VIII because such a charge cannot be related to the cost of the service rendered. For example, in the Customs User Fee report, the panel examined the consistency with Article VIII of 0.22 and 0.17 per cent ad valorem customs merchandise processing fees with no upper limits. The panel concluded that 'the term 'cost of services rendered'… in Article VIII:1(a) must be interpreted to refer to the cost of the customs processing for the individual entry in question and accordingly that the ad valorem structure of the United States merchandise processing fee was inconsistent with Article VIII:1(a) to the extent that it caused fees to be levied in excess of such costs'.(489)"(490) 326. In support of its finding that an ad valorem tax could not be said to be commensurate with the "cost of services rendered", the Panel on Argentina - Textiles and Apparel referred to the Report of the Working Party on Accession of the Democratic Republic of the Congo.(491) The Panel also rejected Argentina's argument that its tax had been enacted for "fiscal purposes": "Argentina's statistical tax is levied on an ad valorem basis with no ceiling. As described in paragraph 6.70 above, Argentina's tax is clearly not related to the cost of a service rendered to the specific importers concerned. The tax as assessed on many goods is not in proportion to the cost of any service rendered. The tax purportedly raises revenue for the purpose of financing customs activities related to the registration, computing and data processing of information on both imports and exports. While the gathering of statistical information concerning imports may benefit traders in general, Article VIII bars the levying of any tax or charge on importers to support the related costs 'for the individual entry in question' since it will also benefit exports and exporters.(492)
As to Argentina's argument that it was collecting this tax for 'fiscal' purposes in the context of its undertakings with the IMF, we note that not only does Article VIII of GATT expressly prohibit such measures for fiscal purposes but that clearly a measure for fiscal purposes will normally lead to a situation where the tax results in charges being levied in excess of the approximate costs of the statistical services rendered."(493) 327. Argentina did not appeal the findings of the Panel on Argentina - Textiles and Apparel, quoted in paragraphs 325-326 above. However, before the Appellate Body, Argentina argued that the Panel erred in law in failing to take account Argentina's obligations to the IMF in the Panel's interpretation of Article VIII. Specifically, Argentina claimed that a "Memorandum of Understanding" between Argentina and the IMF included an "undertaking" or an "obligation" on the part of Argentina to collect a specified amount in the form of a statistical tax. Argentina pointed to a statement in the aforementioned memorandum according to which the fiscal measures to be adopted by Argentina include " ... increases in import duties, including a temporary 3 per cent surcharge on imports". Argentina also argued that paragraph 10 of the Agreement between the IMF and the WTO(494) and paragraph 5 of the so-called Declaration on Coherence(495) require that the imposition on governments of "cross-conditionality or additional conditions" must be avoided. The Appellate Body found that Argentina had failed to demonstrate an "irreconcilable conflict between its "Memorandum of Understanding" with the IMF and its obligations under Article VIII of GATT: "[T]the Panel does not appear to have been convinced that Argentina had a legally binding agreement with the IMF at all. From the panel record in this case, it does not appear possible to determine the precise legal nature of this Memorandum on Economic Policy, nor the extent to which commitments undertaken by Argentina in this Memorandum constitute legally binding obligations. We note that page 7 of the Memorandum on Economic Policy refers to "a temporary 3 percent surcharge on imports", which is not necessarily the same thing as the 3 per cent statistical tax levied on imports. Argentina did not show an irreconcilable conflict between the provisions of its "Memorandum of Understanding" with the IMF and the provisions of Article VIII of the GATT 1994. We thus agree with the Panel's implicit finding that Argentina failed to demonstrate that it had a legally binding commitment to the IMF that would somehow supersede Argentina's obligations under Article VIII of the GATT 1994."(496) 328. The Panel on US - Certain EC Products examined the consistency with several GATT provisions of the increased bonding requirements imposed by the United States on imports from the European Communities in order to secure the collection of additional import duties that were only later authorized by the DSB. The Panel considered that the costs relating to the bonding requirements upon importation could not constitute the "approximate cost of services rendered" in the sense of Article VIII: "The meaning of Article VIII was examined in the adopted Panel Report on United States - Customs Users Fee(497) and in the adopted Appellate Body and Panel Reports on Argentina - Textiles. It was found that Article VIII's requirement that the charge be 'limited in amount to the approximate cost of services rendered' is 'actually a dual requirement, because the charge in question must first involve a 'service' rendered, and then the level of the charge must not exceed the approximate cost of that 'service'.'(498) The term 'services rendered' means 'services rendered to the individual importer in question.'(499)
Although very briefly in its rebuttals, the United States argued that bonding requirements could be viewed as a form of fee for services rendered (the services being the 'early release of merchandise') and therefore should benefit from the carve-out of Article II:2(c) of GATT, the United States has not submitted any data on the second requirement. There is no evidence that what was required from importers represented any such approximate costs of any service. It is also difficult to understand why the costs of such service would have suddenly increased on 3 March (did the United States provide more services to importers on 3 March?), and then only for listed imports from the European Communities."(500) 329. With respect to GATT practice concerning Article VIII:1, see GATT Analytical Index, pages 268-281. 330. In Argentina - Textiles and Apparel, the Appellate Body agreed that that there is nothing in the Agreement between the IMF and the WTO, the Declaration on the Relationship of the World Trade Organization with the International Monetary Fund or the so-called Declaration on Coherence(501) which justifies a conclusion that a Member's commitments to the IMF shall prevail over its obligations under Article VIII of the GATT 1994.(502) See Chapter on WTO Agreement, paragraph 96. 2. Agreement between the IMF and the WTO 331. In Argentina - Textiles and Apparel, the Appellate Body agreed that that there is nothing in the Agreement between the IMF and the WTO, the Declaration on the Relationship of the World Trade Organization with the International Monetary Fund which justifies a conclusion that a Member's commitments to the IMF shall prevail over its obligations under Article VIII of the GATT 1994.(503) See Chapter on WTO Agreement, paragraph 96. 332. In Argentina - Textiles and Apparel, the Appellate Body agreed that that there is nothing in the Declaration on the Contribution of the World Trade Organization to Achieving Greater Coherence in Global Economic Policymaking (Declaration on Coherence) which would justify a conclusion that a Member's commitments to the IMF shall prevail over its obligations under Article VIII of the GATT 1994.(504) See Chapter on WTO Agreement, paragraph 96.
X. Article IX back to top Article IX: Marks of Origin 1. Each contracting party shall accord to the products of the territories of other contracting parties treatment with regard to marking requirements no less favourable than the treatment accorded to like products of any third country.
2. The contracting parties recognize that, in adopting and enforcing laws and regulations relating to marks of origin, the difficulties and inconveniences which such measures may cause to the commerce and industry of exporting countries should be reduced to a minimum, due regard being had to the necessity of protecting consumers against fraudulent or misleading indications.
3. Whenever it is administratively practicable to do so, contracting parties should permit required marks of origin to be affixed at the time of importation.
4. The laws and regulations of contracting parties relating to the marking of imported products shall be such as to permit compliance without seriously damaging the products, or materially reducing their value, or unreasonably increasing their cost.
5. As a general rule, no special duty or penalty should be imposed by any contracting party for failure to comply with marking requirements prior to importation unless corrective marking is unreasonably delayed or deceptive marks have been affixed or the required marking has been intentionally omitted.
6. The contracting parties shall co-operate with each other with a view to preventing the use of trade names in such manner as to misrepresent the true origin of a product, to the detriment of such distinctive regional or geographical names of products of the territory of a contracting party as are protected by its legislation. Each contracting party shall accord full and sympathetic consideration to such requests or representations as may be made by any other contracting party regarding the application of the undertaking set forth in the preceding sentence to names of products which have been communicated to it by the other contracting party. No jurisprudence or decision of a competent WTO body. 333. With respect to GATT practice concerning Article VIII:1, see GATT Analytical Index, pages 288-289.
XI. Article X back to top Article X: Publication and Administration of Trade Regulations 1. Laws, regulations, judicial decisions and administrative rulings of general application, made effective by any contracting party, pertaining to the classification or the valuation of products for customs purposes, or to rates of duty, taxes or other charges, or to requirements, restrictions or prohibitions on imports or exports or on the transfer of payments therefor, or affecting their sale, distribution, transportation, insurance, warehousing inspection, exhibition, processing, mixing or other use, shall be published promptly in such a manner as to enable governments and traders to become acquainted with them. Agreements affecting international trade policy which are in force between the government or a governmental agency of any contracting party and the government or governmental agency of any other contracting party shall also be published. The provisions of this paragraph shall not require any contracting party to disclose confidential information which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private.
2. No measure of general application taken by any contracting party effecting an advance in a rate of duty or other charge on imports under an established and uniform practice, or imposing a new or more burdensome requirement, restriction or prohibition on imports, or on the transfer of payments therefor, shall be enforced before such measure has been officially published.
3. (a) Each contracting party shall administer in a uniform, impartial and reasonable manner all its laws, regulations, decisions and rulings of the kind described in paragraph 1 of this Article.
(b) Each contracting party shall maintain, or institute as soon as practicable, judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review and correction of administrative action relating to customs matters. Such tribunals or procedures shall be independent of the agencies entrusted with administrative enforcement and their decisions shall be implemented by, and shall govern the practice of, such agencies unless an appeal is lodged with a court or tribunal of superior jurisdiction within the time prescribed for appeals to be lodged by importers; Provided that the central administration of such agency may take steps to obtain a review of the matter in another proceeding if there is good cause to believe that the decision is inconsistent with established principles of law or the actual facts.
(c) The provisions of subparagraph (b) of this paragraph shall not require the elimination or substitution of procedures in force in the territory of a contracting party on the date of this Agreement which in fact provide for an objective and impartial review of administrative action even though such procedures are not fully or formally independent of the agencies entrusted with administrative enforcement. Any contracting party employing such procedures shall, upon request, furnish the CONTRACTING PARTIES with full information thereon in order that they may determine whether such procedures conform to the requirements of this subparagraph. 334. In EC - Poultry, the Appellate Body rejected Brazil's claim that the retroactive application of transitional safeguard measures under the Agreement on Textiles and Clothing was prohibited by Article X. The Appellate Body briefly discussed the scope of Article X as follows: "Article X relates to the publication and administration of 'laws, regulations, judicial decisions and administrative rulings of general application', rather than to the substantive content of such measures.(505) ...
Thus, to the extent that Brazil's appeal relates to the substantive content of the EC rules themselves, and not to their publication or administration, that appeal falls outside the scope of Article X of the GATT 1994."(506) 335. In US - Underwear, the Appellate Body agreed with the following finding of the Panel on the term "of general application":(507) "We note that Article X:1 of GATT 1994, which also uses the language 'of general application', includes 'administrative rulings' in its scope. The mere fact that the restraint at issue was an administrative order does not prevent us from concluding that the restraint was a measure of general application. Nor does the fact that it was a country-specific measure exclude the possibility of it being a measure of general application. If, for instance, the restraint was addressed to a specific company or applied to a specific shipment, it would not have qualified as a measure of general application. However, to the extent that the restraint affects an unidentified number of economic operators, including domestic and foreign producers, we find it to be a measure of general application."(508) 336. In EC - Poultry, the Appellate Body reviewed the Panel's finding that certain import licensing of the European Communities on certain poultry products was not inconsistent with Article X because "the information which Brazil claims the EC should have made available concerns a specific shipment, which is outside the scope of Article X of GATT."(509) In upholding the Panel's finding, the Appellate Body discussed the term "of general application" as follows: "Article X:1 of the GATT 1994 makes it clear that Article X does not deal with specific transactions, but rather with rules 'of general application'. It is clear to us that the EC rules pertaining to import licensing set out in Regulation 1431/94 are rules 'of general application'. ... ... ... Although it is true, as Brazil contends, that any measure of general application will always have to be applied in specific cases, nevertheless, the particular treatment accorded to each individual shipment cannot be considered a measure 'of general application' within the meaning of Article X. The Panel cited the following passage from the panel report in United States - Restrictions on Imports of Cotton and Man-made Fibre Underwear: 'The mere fact that the restraint at issue was an administrative order does not prevent us from concluding that the restraint was a measure of general application. Nor does the fact that it was a country-specific measure exclude the possibility of it being a measure of general application. If, for instance, the restraint was addressed to a specific company or applied to a specific shipment, it would not have qualified as a measure of general application. However, to the extent that the restraint affects an unidentified number of economic operators, including domestic and foreign producers, we find it to be a measure of general application.'"(510)
We agree with the Panel that 'conversely, licences issued to a specific company or applied to a specific shipment cannot be considered to be a measure 'of general application' ' within the meaning of Article X."(511) 337. In Japan - Film, the Panel, referring to the Panel Report on US - Underwear referenced in paragraph 335 above, interpreted the term "of general application" as follows: "[I]t stands to reason that inasmuch as the Article X:1 requirement applies to all administrative rulings of general application, it also should extend to administrative rulings in individual cases where such rulings establish or revise principles or criteria applicable in future cases. At the same time, we consider that it is incumbent upon the United States in this case to clearly demonstrate the existence of such unpublished administrative rulings in individual matters which establish or revise principles applicable in future cases."(512) (ii) Reference to GATT practice 338. For GATT practice on this subject-matter, see GATT Analytical Index, pages 294-295. 339. In US - Underwear, the Appellate Body described the policy underlying Article X:2 as pertaining to transparency and due process: "Article X:2, General Agreement, may be seen to embody a principle of fundamental importance - that of promoting full disclosure of governmental acts affecting Members and private persons and enterprises, whether of domestic or foreign nationality. The relevant policy principle is widely known as the principle of transparency and has obviously due process dimensions. The essential implication is that Members and other persons affected, or likely to be affected, by governmental measures imposing restraints, requirements and other burdens, should have a reasonable opportunity to acquire authentic information about such measures and accordingly to protect and adjust their activities or alternatively to seek modification of such measures."(513) 340. The Panel on US - Underwear was called on to find whether a Member is entitled, when taking transitional safeguard measures under Article 6 of the ATC, to backdate the application of such measures to the date of publication of its request for consultations. The Panel opined that Article 6.10 of the ATC, the relevant provision, was "silent" as to this question and turned to Article X of the GATT. The Panel concluded that "if the importing country publishes the proposed restraint period and restraint level after the request for consultations, it can later set the initial date of the restraint period as the date of the publication of the proposed restraint".(514) Upon review, the Appellate Body disagreed with the Panel's finding that Article 6.10 of the ATC was "silent" as to whether a transitional safeguard measure could be backdated or not and found that Article 6.10 prohibited such backdating. With respect to the Panel's finding that Article X of GATT permitted such backdating, the Appellate Body held that prior publication of a measure, as required under Article X of GATT, could not, in and of itself, justify the retroactive effect of a restrictive governmental measure: "[W]e are bound to observe that Article X:2 of the General Agreement, does not speak to, and hence does not resolve, the issue of permissibility of giving retroactive effect to a safeguard restraint measure. The presumption of prospective effect only does, of course, relate to the basic principles of transparency and due process, being grounded on, among other things, these principles. But prior publication is required for all measures falling within the scope of Article X:2, not just ATC safeguard restraint measures sought to be applied retrospectively. Prior publication may be an autonomous condition for giving effect at all to a restraint measure. Where no authority exists to give re |
