DISPUTE SETTLEMENT

DS: United States — Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing Duties

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

See also:

back to top

Current status

 

back to top

Key facts

 

back to top

Latest document

  

back to top

Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by India. (See also DS343)

On 6 June 2006, India requested consultations with the United States on the Amended Bond Directive and the enhanced bond requirement imposed by the United States on imports of frozen warmwater shrimp from India.  India considers that the Amended Bond Directive as such and the enhanced bond requirement are inconsistent with:

  • Articles 1, 7.1, 7.2, 7.4, 7.5, 9.2, 9.3, 9.3.1, 18.1 and 18.5 of the Anti-Dumping Agreement;
      
  • Articles I, II, III, VI:2, VI:3 (including Note 1 Ad paragraphs 2 and 3 of Article VI), X, XI and XIII of the GATT 1994;  and
      
  • Articles 10, 17.4, 17.5, 19.3, 19.4, 32.1 and 32.5 of the SCM Agreement.

On 21 June 2006, Brazil, China and Thailand requested to join the consultations. The United States informed the DSB that they had accepted the requests of Brazil, China and Thailand to join the consultations.

On 13 October 2006, India requested the establishment of a panel. At its meeting on 26 October 2006, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 21 November 2006, the DSB established a panel. Brazil, China, the European Communities, Japan and Thailand reserved their third party rights. On 19 January 2007, India requested the Director-General to compose the Panel. On 26 January 2007, the Director-General composed the Panel.

On 27 July 2007, the Chairman of the Panel informed the DSB that it would not be possible for the Panel to complete its work within six months of the date of composition, inter alia, due to the nature and scope of the dispute.

On 29 February 2008, the Panel report was circulated to Members. The Panel rejected India's claims that the laws, rules and regulations of the United States that authorize the imposition of the EBR and the instruments comprising the Amended CBD are inconsistent as such with the provisions of Articles 1, 7.1(iii), 7.2, 7.4, 9.1, 9.2, 9.3 (including 9.3.1), 18.1 and 18.4 of the Anti-Dumping Agreement;  Articles 10, 17.1(c), 17.2, 17.4, 19.2, 19.3, 19.4 and 32.1 of the SCM Agreement;  Articles VI:2 and VI:3 of the GATT 1994;  and the Ad Note thereto.

The Panel upheld India's claims that: (i) the application of the EBR to subject shrimp from India is inconsistent with Articles 1 and 18.1 of the Anti-Dumping Agreement, and the Ad Note;  that (ii) the application of the EBR to subject shrimp from India prior to the imposition of the anti-dumping order is inconsistent with Article 7.2 of the Anti-Dumping Agreement;  and that (iii) the United States violated Article 18.5 of the Anti-Dumping Agreement and Article 32.6 of the SCM Agreement because it failed to notify the Amended CBD to the Anti-Dumping and SCM Committees.

The Panel rejected the United States' argument that the application of the EBR is justified under Article XX(d) of the GATT 1994.

The Panel declined to rule separately on India's claims that:  (i) the application of the EBR to subject shrimp from India prior to the imposition of the anti-dumping order is inconsistent with Articles 7.1(iii), 7.4 and 7.5 of the Anti-Dumping Agreement;  that (ii) the application of the EBR to subject shrimp from India is inconsistent with Articles I:1, II:1(a) and (b), X(3)(a), XI:1 and XIII of the GATT 1994;  and that (iii) the laws, rules and regulations of the United States that authorize the imposition of the EBR and the instruments comprising the Amended CBD are inconsistent as such with Articles I:1, II:1(a) and (b), X(3)(a), XI:1 and XIII of the GATT 1994.

The Panel recommended that the United States bring its measures into conformity with its obligations under the Anti-Dumping Agreement and the GATT 1994.

On 17 April 2008, India notified its decision to request the Appellate Body to review certain issues of law covered in the Panel report and certain legal interpretations developed by the Panel. On 29 April 2008, the United States notified its decision to appeal to the Appellate Body certain issues of law covered in the Panel report and certain legal interpretations developed by the Panel. The Appellate Body examined this appeal with that of WT/DS343.

On 10 June 2008, the Chairman of the Appellate Body informed the DSB that it would not be able to provide its report within 60 days due to the time required for completion and translation of the report.  The Appellate Body estimated that the report would be circulated no later than 16 July 2008.

On 16 July 2008, the Appellate Body report was circulated to Members.

The Appellate Body inter alia:

— upheld the Panel's finding that the additional security requirement resulting from the application of the EBR to subject shrimp is not “reasonable” within the meaning of the Ad Note;

— upheld the Panel's finding that the Amended CBD, by virtue of which the EBR is imposed, is not inconsistent “as such” with Articles 1 and 18.1 of the Anti-Dumping Agreement and Articles 10 and 32.1 of the SCM Agreement;

— upheld the Panel's finding that the Amended CBD, by virtue of which the EBR is imposed, is not inconsistent “as such” and “as applied” with Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement and that it is not inconsistent “as such” with Articles 19.2, 19.3, and 19.4 of the SCM Agreement;

— found it unnecessary, for purposes of resolving this dispute, to make an additional finding on India's claims that the Amended CBD is “as such” inconsistent with Article 18.4 of the Anti-Dumping Agreement and Article 32.5 of the SCM Agreement;

— upheld the Panel's finding that the EBR, as applied to subject shrimp, is not “necessary” within the meaning of Article XX(d) of the GATT 1994; and, therefore, does not express a view on the question of whether a defence under Article XX(d) of the GATT 1994 was available to the United States.

Consequently, the Appellate Body upheld the Panel's conclusion that the application of the EBR to subject shrimp is inconsistent with Article 18.1 of the Anti-Dumping Agreement because it is inconsistent with the Ad Note to Article VI:2 and 3 of the GATT 1994.

The Appellate Body recommends that the DSB request the United States to bring its measure, found in this Report and in the Panel Report, US — Shrimp (Thailand), as modified by this Report, to be inconsistent with the Anti-Dumping Agreement and the GATT 1994, into conformity with its obligations under those Agreements.

At its meeting on 1 August 2008, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report.

 

Implementation of adopted reports

On 31 October 2008, the United States and India notified the DSB that they had agreed that the reasonable period of time for the United States to implement the DSB recommendations and rulings shall be 8 months, expiring on 1 April 2009.

At the DSB meeting on 20 April 2009, the United States mentioned that it had notified the documents related to the additional bond requirement to the Committee on Anti-Dumping Practices and the Committee on Subsidies and Countervailing Measures, in accordance with the finding of the panel.  The United States therefore was pleased to inform the DSB that it had complied with the DSB recommendations and rulings.  India said that it looked forward to seeing how steps taken by the United States would be implemented in practice.

Share


Follow this dispute

  

Problems viewing this page? If so, please contact [email protected] giving details of the operating system and web browser you are using.