Topics handled by WTO committees and agreements
Issues covered by the WTO’s committees and agreements

REPERTORY OF APPELLATE BODY REPORTS

“Particular Circumstances”


ON THIS PAGE:

General
Actions taken since DSB adoption of report(s)
Complexity of implementing measures
Complexity of implementation process
Relevance of contentiousness
Means of implementation
Structural adjustment
Economic and financial collapse
Economic impact of existing measure. See also Relevance of contentiousness (ARB.5.5)
Developing countries
Calendar of legislative body
Flexibility of implementation process
Relevance of legislative action on other measures
Existence of previous disputes relevant for determination of reasonable period of time


ARB.5.1 General     back to top

ARB.5.1.1 Japan — Alcoholic Beverages II, para. 11
(WT/DS8/15, WT/DS10/15, WT/DS11/13)

 

… Article 21(3)(c) of the DSU also stipulates, however, that the “reasonable period of time” may be shorter or longer than 15 months, depending upon the “particular circumstances”. The term, “particular circumstances”, is not defined in the DSU.

 

ARB.5.1.2 Japan — Alcoholic Beverages II, para. 27
(WT/DS8/15, WT/DS10/15, WT/DS11/13)

 

As stated in Article 3(2) of the DSU, the dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system. Therefore, all WTO Members have a strong interest in prompt compliance with and full implementation of the recommendations and rulings of the DSB. This interest is clearly reflected in the provisions of the DSU, and in particular in Article 21(3)(c), which stipulates that a “reasonable period of time” for implementation should not exceed 15 months unless there are “particular circumstances” justifying a longer or shorter period. In this case, I am not persuaded that the “particular circumstances” advanced by Japan and the United States justify a departure from the 15-month “guideline” either way. …

 

ARB.5.1.3 Australia — Salmon, para. 38
(WT/DS18/9)

 

It has been pointed out that the arbitrator is not obliged to grant 15 months as the reasonable period for implementation in all cases. “Particular circumstances” justifying a longer or shorter period must be taken into account on a case-by-case basis. In the present case, there are certain considerations which persuade me that the reasonable period of time should be significantly less than 15 months. …

 

ARB.5.1.4 Chile — Alcoholic Beverages, para. 39
(WT/DS87/15, WT/DS110/14)

 

The concept of reasonableness, which is, of course, built into the notion of “a reasonable period of time” for implementation, inherently involves taking into account the relevant circumstances. In some cases these circumstances may be singular or few in number but in other cases they may be multiple. Determination of a “reasonable period of time” is not, in principle, appropriately carried out by ascribing decisive or exclusive relevance to one single or even a few a priori factors and eschewing consideration of everything else as non-pertinent. …

 

ARB.5.1.5 Canada — Pharmaceutical Patents, para. 48
(WT/DS114/13)

 

The “particular circumstances” mentioned in Article 21.3 are, therefore, those that can influence what the shortest period possible for implementation may be within the legal system of the implementing Member. Conceivably, several such “particular circumstances”, depending on the facts, could be relevant to a case such as the one before me.

 

ARB.5.1.6 Canada — Pharmaceutical Patents, para. 52
(WT/DS114/13)

 

… There may well be other “particular circumstances” that may be relevant to a particular case. However, in my view, the “particular circumstances” mentioned in Article 21.3 do not include factors unrelated to an assessment of the shortest period possible for implementation within the legal system of a Member. Any such unrelated factors are irrelevant to determining the “reasonable period of time” for implementation. For example, as others have ruled in previous Article 21.3 arbitrations, any proposed period intended to allow for the “structural adjustment” of an affected domestic industry will not be relevant to an assessment of the legal process. The determination of a “reasonable period of time” must be a legal judgement based on an examination of relevant legal requirements.

 

ARB.5.1.7 Canada — Autos, paras. 54-55
(WT/DS139/12, WT/DS142/12)

 

Canada has placed great emphasis on the “significant implications” that implementation of the DSB’s recommendations in this case will have for the “administration of Canada’s customs regime”. …

 

Regardless of Canada’s specific argument on this issue, I wish to emphasize that factors unrelated to an assessment of the shortest period of time possible for a Member to implement, within its legal system, the recommendations and rulings of the DSB in a particular case are irrelevant to determining the “reasonable period of time” under Article 21.3(c) of the DSU. While it might be more convenient for Canada to implement the DSB’s recommendations in this case on the same timeline as it has planned for the reform of its customs administration regime, this factor is not relevant in determining the “shortest period possible” within Canada’s legal system for implementation of the DSB’s recommendations. … the determination of the “reasonable period of time” for implementation must be a legal judgment based on an examination of relevant legal requirements.

 

ARB.5.1.8 US — 1916 Act, para. 40
(WT/DS136/11, WT/DS162/14)

 

The United States also urges me to take account of the “additional special circumstances” involved in this case, that is, the need for a period of transition to a new President, a new Administration, and a new Congress, and the accompanying shifts in the balance of power between the two principal political parties in the United States. Even allowing for these unusual circumstances, I note that what is significant for the case at hand is that the first session of the 107th United States Congress has been in progress since 3 January 2001. It is, therefore, possible for the United States to introduce a legislative proposal and have it passed by the Congress as speedily as possible, using, as I have stated earlier, all the flexibility available within its normal legislative procedures.

 

ARB.5.1.9 Canada — Patent Term, paras. 59-60
(WT/DS170/10)

 

While Canada invokes the controversial character of any amendment to its Patent Act which will have an impact on the Canadian health care system, the United States emphasizes that under Canada’s parliamentary system, the Government of Canada controls the majority in both Houses of Parliament, the House of Commons and the Senate. According to the United States, with this majority, the government controls the legislative process, and sets the timetable for both Houses of Parliament from start to finish; the Government of Canada can essentially pass any legislation it wishes in whatever time it likes.

 

It may well be possible that Canada’s political system and the actual distribution of seats among the political parties in Canada’s Parliament facilitate the passage of legislative initiatives taken by the present Canadian government. I am, however, very reluctant to take these factors into account in determining the “reasonable period of time”. These factors vary from country to country, and from constitution to constitution. Even within a given country, they will change over time. In addition, their evaluation will often be difficult and highly speculative. I also note that such factors have never been considered as “particular circumstances” in any of the earlier awards under Article 21.3(c) of the DSU. Thus, the political factors mentioned in the preceding paragraph, and invoked by the United States in support of its request for a “reasonable period of time” of six months, are not relevant to my task.

 

ARB.5.1.10 Chile — Price Band System, para. 34
(WT/DS207/13)

 

Article 21.3(c) provides for an arbitrator a “guideline” of a maximum of 15 months from the date of adoption of the panel and Appellate Body reports when establishing a “reasonable period of time” for implementation. Notwithstanding this “guideline”, I must ultimately be informed, as Article 21.3(c) instructs, by the “particular circumstances” of a given case, which may counsel in favour of shorter or longer periods. …

 

ARB.5.1.11 Japan — DRAMs (Korea) (Article 21.3(c)), para. 51
(WT/DS336/16)

 

… due process is a flexible concept to be applied to the specific requirements of the case — in this case, the process of implementing DSB rulings. A balance must be struck between respecting due process rights of interested parties and the promptness required in implementation. In determining that balance, I note that considerable opportunity was already afforded to interested parties to participate in the original investigation conducted by the [Japan’s investigating authorities]. It seems then that it would be appropriate to provide a shorter time to such interested parties in the context of an investigation that is far more limited in scope, and which has been initiated to implement DSB recommendations and rulings.

 

ARB.5.1.12 Colombia — Ports of Entry (Article 21.3(c)), para. 87
(WT/DS366/13)

 

… I do not attribute significance to steps such as the implementation of the revised measures into Colombia’s computerized system of customs control and the training of DIAN officials to familiarize them with the revised customs control mechanism. These particular steps seem consequential, rather than prerequisites, to the enactment of Colombia’s modified measures. In this context, I concur with the statement of the arbitrator in Canada — Pharmaceutical Patents that “the determination of a ‘reasonable period of time’ must be a legal judgement based on an examination of relevant legal requirements” for the enactment of the implementing measures. Colombia’s component steps of incorporating its revised measures into computerized system of customs control and the training of officials in the new system, are merely derivative, or consequential, upon the completion of the legal process necessary to the enactment of the implementing measures, and thus, in my view, do not justify a longer period of time for implementation.

 
ARB.5.2 Actions taken since DSB adoption of report(s)     back to top

ARB.5.2.1 US — Section 110(5) Copyright Act, para. 46
(WT/DS160/12)

 

… Article 21.3(c) makes clear that the “reasonable period of time” for implementation is measured as from the “date of adoption of a panel or Appellate Body report”. I recall that Article 21.1 establishes that “prompt compliance” is essential in order to ensure effective resolution of disputes to the benefit of all Members. Clearly, timeliness is of the essence. Thus, an implementing Member must use the time after adoption of a panel and/or Appellate Body report to begin to implement the recommendations and rulings of the DSB. Arbitrators will scrutinize very carefully the actions an implementing Member takes in respect of implementation during the period after adoption of a panel and/or Appellate Body report and prior to any arbitration proceeding. If it is perceived by an arbitrator that an implementing Member has not adequately begun implementation after adoption so as to effect “prompt compliance”, it is to be expected that the arbitrator will take this into account in determining the “reasonable period of time”.

 

ARB.5.2.2 Chile — Price Band System, paras. 43, 45
(WT/DS207/13)

 

… A Member’s obligation to implement the recommendations and rulings of the DSB is triggered by the DSB’s adoption of the relevant panel and/or Appellate Body reports. Although Article 21.3 acknowledges circumstances where immediate implementation is “impracticable”, in my view the implementation process should not be prolonged through a Member’s inaction (or insufficient action) in the first months following adoption. In other words, whether or not a Member is able to complete implementation promptly, it must at the very least promptly commence and continue concrete steps towards implementation. Otherwise, inaction or dilatory conduct by the implementing Member would exacerbate the nullification or impairment of the rights of other Members caused by the inconsistent measure. It is for this reason that arbitral awards under Article 21.3(c) calculate “reasonable period[s] of time” as from the date of adoption of panel and/or Appellate Body reports. …

 

 

…I realize the value of thorough pre-legislative activities, particularly so as to ensure passage of final legislation and thereby achieve “full implementation”. I also recognize that consultations, discussions and deliberations, by their very nature, are indeterminate and cannot be subject to arbitrary time limits, particularly because the extensiveness of these activities may change with each measure in issue. Nevertheless, for purposes of calculating a “reasonable period of time” under Article 21.3(c), such activities should not be assumed to be without reasonable limits. I do not suggest that Chile’s pre-legislative activities in this case should necessarily have concluded by this time; but, in my view, this phase should reasonably have proceeded further than it has.

 

ARB.5.2.3 EC — Chicken Cuts, para. 66
(WT/DS269/13, WT/DS286/15)

 

… The European Communities acknowledged during the oral hearing that, four months after the adoption of the recommendations and rulings of the DSB, it had not yet taken any concrete steps toward implementation by formulation of the proposed Regulation. Based on the European Communities’ submission, all that seems to have occurred thus far is internal discussions within the European Communities. Mere discussion is not implementation. There must be something more to evidence that a Member is moving toward implementation. I therefore agree with Brazil and Thailand that this failure to commence implementation of the DSB’s recommendations and rulings is a factor that I should take into account in determining the reasonable period of time for implementation.

 

ARB.5.2.4 Colombia — Ports of Entry (Article 21.3(c)), paras. 79-80
(WT/DS366/13)

 

… I should take into account any action or inaction by Colombia in the period of time comprised between the date of adoption of the Panel Report by the DSB and the initiation of these arbitration proceedings when determining the reasonable period of time for implementation.

 

Since the adoption of the Panel Report, Colombia has established an Inter- Institutional Working Group (Grupo de Trabajo Interinstitucional), composed of representatives of the Ministry of Trade, Industry and Tourism, and of the DIAN, to evaluate how to implement the recommendations and rulings of the DSB. This initiative, in my opinion, goes beyond mere “internal discussions”, as argued by Panama, insofar as it establishes an institutional framework responsible for proposing and coordinating an administrative plan of action for implementation. As noted by a previous arbitrator, “consultations within governmental agencies are typically a concomitant of lawmaking in contemporary polities”, and therefore should be taken into account when fixing the reasonable period of time for implementation. Therefore, I consider the work of such Inter-Institutional Working Group relevant to my determination.

 
ARB.5.3 Complexity of implementing measures     back to top

ARB.5.3.1 US — 1916 Act, para. 36
(WT/DS136/11, WT/DS162/14)

 

At the oral hearing, I enquired whether, although it is not within the mandate of an arbitrator to determine or suggest the precise means of implementation, it is necessary for the arbitrator to know the scope and complexity of the implementing measure, as distinguished from the complexity of the Member’s legislative process, in order to assess the “reasonable period of time” required to put in place the proposed implementing measure. … The United States explained, however, that regardless of the complexity of the legislation required to implement the rulings and recommendations of the DSB, this would be taken care of through the normal legislative process, and the United States does not argue for or seek any additional time on the basis of the scope, content or complexity of the implementing legislation in this case. In view of the explicit acknowledgement of the United States that it is not relying on the complexity of the implementing legislation as a particular circumstance to justify or lengthen the period of time needed for implementation in this case, it is not necessary for me to examine this issue.

 

ARB.5.3.2 Canada — Pharmaceutical Patents, para. 50
(WT/DS114/13)

 

Likewise, the complexity of the proposed implementation can be a relevant factor. If implementation is accomplished through extensive new regulations affecting many sectors of activity, then adequate time will be required to draft the changes, consult affected parties, and make any consequent modifications as needed. On the other hand, if the proposed implementation is the simple repeal of a single provision of perhaps a sentence or two, then, obviously, less time will be needed for drafting, consulting, and finalizing the procedure. To be sure, complexity is not merely a matter of the number of pages in a proposed regulation; yet it seems reasonable to assume that, in most cases, the shorter a proposed regulation, the less its likely complexity.

 

ARB.5.3.3 US — Hot-Rolled Steel, para. 30
(WT/DS184/13)

 

… I do not believe that an arbitrator acting under Article 21.3(c) of the DSU is vested with jurisdiction to make any determination of the proper scope and content of implementing legislation, and hence do not propose to deal with it. The degree of complexity of the contemplated implementing legislation may be relevant for the arbitrator, to the extent that such complexity bears upon the length of time that may reasonably be allocated to the enactment of such legislation. But the proper scope and content of anticipated legislation are, in principle, left to the implementing WTO Member to determine.

 

ARB.5.3.4 US — Offset Act (Byrd Amendment), para. 60
(WT/DS217/14, WT/DS234/22)

 

Similarly, the need to distinguish, in the light of Panel and the Appellate Body findings in this dispute, between WTO-consistent and WTO-inconsistent implementation options would appear to be the typical content, and concomitant aspect, of every legislative process aiming at implementing recommendations and rulings of the DSB. I do agree with previous arbitrators that, in principle, the complex nature of implementing measures can be a relevant factor for the determination of the reasonable period of time. Nevertheless, I do not believe that the need to take into account international treaty obligations in the process of drafting implementing legislation, in and of itself, gives rise to the kind of complexity that would warrant additional time for implementation. Each and every piece of legislation enacted with a view to implementing recommendations and rulings of the DSB must be designed and drafted in the light of the implementing Member’s rights and obligations under the covered agreements. If the need to distinguish between WTO consistent and WTO-inconsistent implementation options were to qualify, per se, as “complexity”, and, therefore, were to give rise to “particular circumstances” relevant for the determination of the reasonable period of time, then every implementation measure under consideration in proceedings pursuant to Article 21.3(c) would have to be considered complex. In other words, “complexity” would not be a “particular circumstance”; rather, it would be a standard aspect of every implementation.

 

ARB.5.3.5 US — Gambling, paras. 46-47
(WT/DS285/13)

 

… I attach some significance to the fact that, as the United States explained at the oral hearing, the field of internet gambling is one that is highly regulated in the United States. A myriad of interconnected and overlapping laws apply to these activities, including state and federal laws, and criminal and civil statutes. For this reason, a careful examination of how proposed legislation will impact the existing regulatory regime will be a necessary part of the process of adopting implementing legislation in this dispute.

 

I am also conscious of the fact that any legislation adopted by the United States will inevitably … bear on questions of public morals and public order. It seems to me that, within the field of public morals and public order, only prohibitions are simple. In other words, to the extent that the United States may consider authorizing any form of internet gambling or wagering, this will increase the complexity of any legislative solution. The more such activities are authorized, the greater lengths the legislator will have to go to in order to ensure that sufficient safeguards are in place to make the system consistent with, and acceptable under, prevailing standards of public morals and public order. This is, in my view, separate from the question of contentiousness. However, the United States has not, in this proceeding, explained in any precise manner how it intends to implement the recommendations and rulings of the DSB. … In the absence of any more specific information from the United States on this issue, I do not consider the fact that the legislative activity called for in this case will inevitably touch on questions of public morals and public order to be a “particular circumstance” affecting my determination of the reasonable period of time.

 

ARB.5.3.6 US — Stainless Steel (Mexico) (Article 21.3(c)), paras. 60-61
(WT/DS344/15)

 

… For the United States, compliance in this case is complex, mainly because terminating simple zeroing in periodic reviews would imply changes in its duty assessment methodology. …

 

In principle, the elimination of simple zeroing in periodic reviews is distinct from the issue of the “allocation of antidumping duties among the importers for assessment purposes”. The former can clearly be carried out by administrative means. In the real world, because it involves imposition of differing levels of financial liability among the importers, depending on the circumstances, the latter may be easier to bring about on a durable basis by a legislative enactment. In the real world too, however, the elimination of simple zeroing in periodic reviews is closely related to the issue of the allocation of final anti-dumping duties among importers; implementation of the former might well be tied to reaching satisfactory resolution of the complexities of allocation of anti-dumping duties among the importers. Accordingly, the technical complexities of allocation of duties among importers cannot casually be disregarded but, to the contrary, may legitimately be considered a particular circumstance affecting the determination of a reasonable time for abolition of the methodology of simple zeroing in periodic reviews. …

 

ARB.5.3.7 Colombia — Ports of Entry (Article 21.3(c)), para. 97
(WT/DS366/13)

 

… I am not persuaded that modifying different provisions of the same legal instruments cannot be done with the same legal process regardless of whether it concerns a few or many provisions of that legal instrument. To the contrary, the fact that amendments to the WTO-inconsistent measures may impact other provisions of the legal instruments in which they are contained seems to be part and parcel of any regulatory decision-making process.

 
ARB.5.4 Complexity of implementation process     back to top

ARB.5.4.1 EC — Bananas III, para. 19
(WT/DS27/15)

 

The Complaining Parties have not persuaded me that there are “particular circumstances” in this case to justify a shorter period of time than stipulated by the guideline in Article 21.3(c) of the DSU. At the same time, the complexity of the implementation process, demonstrated by the European Communities, would suggest adherence to the guideline, with a slight modification, so that the “reasonable period” of time for implementation would expire by 1 January 1999.

 

ARB.5.4.2 EC — Hormones, para. 39
(WTDS26/15, WT/DS48/13)

 

… It would not be in keeping with the requirement of prompt compliance to include in the reasonable period of time, time to conduct studies or to consult experts to demonstrate the consistency of a measure already judged to be inconsistent. That cannot be considered as “particular circumstances” justifying a longer period than the guideline suggested in Article 21.3(c). This is not to say that the commissioning of scientific studies or consultations with experts cannot form part of a implementation process in a particular case. However, such considerations are not pertinent to the determination of the reasonable period of time.

 

ARB.5.4.3 EC — Hormones, paras. 41-42
(WTDS26/15, WT/DS48/13)

 

To grant the European Communities a further two years, from the date of adoption by the DSB of the Appellate Body Report and Panel Reports, to conduct the risk assessment that was required as of 1 January 1995 would not be consistent with the provisions of the DSU requiring prompt compliance with DSB recommendations and rulings, nor with the obligations of the European Communities under the SPS Agreement.

 

For the foregoing reasons, it would not be proper to include in the reasonable period of time granted to the European Communities under Article 21.3(c) of the DSU, an initial phase of two years for the conduct and completion of scientific studies to determine if there is a risk to human health from hormone-treated beef.

 

ARB.5.4.4 US — 1916 Act, para. 38
(WT/DS136/11, WT/DS162/14)

 

In my view, factors such as the volume of legislation brought before the United States Congress, and the high percentage of bills that never become law, are not relevant to my determination of the “reasonable period of time” for implementation of the recommendations and rulings of the DSB in this case. Information of this nature may be of general interest in examining how a legislative system operates in practice, not only in the United States, but in many other countries as well. What is relevant for my determination in this case is the treaty obligations explicitly undertaken by Members pursuant to the covered agreements. … In view of these fundamental obligations assumed by the Members of the WTO, factors such as the volume of legislation proposed, and the high percentage of bills that never become law, cannot be considered to extend the period of time needed for implementation. As for the argument that legislation passed by the United States Congress is usually passed at the end of the legislative session, this again may be the usual practice in the United States Congress, but it is not the outcome of a legal requirement. Where an international treaty obligation is required to be complied with in the shortest period of time possible, as in this case, this cannot be a relevant consideration for extending the period of implementation.

 

ARB.5.4.5 US — 1916 Act, para. 39
(WT/DS136/11, WT/DS162/14)

 

Turning to the complexity of the United States’ legislative process, I note that the United States has explained, in sufficient detail, the multiple and time-consuming steps involved in the enactment of legislation within the specific context of the legislative system of the United States. It is generally accepted that certain of these steps are not required by law, and that the majority of these steps are not subject to compulsory minimum time limits. In other words, the United States’ legislative process, while complex, is characterized by a considerable degree of flexibility. That this flexibility is exercised to achieve the prompt passage of legislation when this is considered necessary and appropriate is revealed by the fact that bills have been passed by the United States Congress within short periods of time, using its “normal” legislative process. The United States has stated that it “will make every effort to promptly implement the DSB’s recommendations and rulings” in this case. Since this is a case where the United States has to enact a piece of legislation to bring it into compliance with its international treaty obligations under the covered agreements, the United States Congress may reasonably be expected to use all the flexibility available within its normal legislative procedures to enact the required legislation as speedily as possible.

 

ARB.5.4.6 Chile — Price Band System, para. 38
(WT/DS207/13)

 

Chile identifies a “pre-legislative” phase followed by an extensive lawmaking procedure through which any law implementing the DSB’s recommendations and rulings must pass. The multi-step process of legislating, which involves the participation of several legislative committees with at least two rounds of review (“general” and “specific”, as labelled by Chile) by not only those committees, but also by each house of Congress itself, highlights the complexity of the process Chile will undergo during implementation. …

 

ARB.5.4.7 Chile — Price Band System, para. 39
(WT/DS207/13)

 

… I am also conscious of the fact that most steps in Chile’s lawmaking procedure, while required by law, are not subject to statutory or constitutional time limits. Therefore, there appears to be a certain amount of “flexibility” within the normal legislative process, particularly in terms of steps such as the “general discussions” and Presidential endorsement, that Chile may fairly be expected to utilize in good faith so that it may promptly develop a new law repealing or modifying the PBS and otherwise ensure that it conforms with its WTO obligations.

 

ARB.5.4.8 Chile — Price Band System, para. 42
(WT/DS207/13)

 

The absence of a requirement under Chile’s laws to engage in pre-legislative consultations is not sufficient, in my view, to dismiss the relevance of such consultations for purposes of this Article 21.3(c) arbitration. As other arbitrators have noted, and as Chile has emphasized, the consultation phase is important for laying the foundation upon which a proposed law passes through the legislative process. Although not mandated by law, consultations within government agencies as well as with the affected sectors of society are typically a concomitant of lawmaking in contemporary polities, and such consultations should be taken into account when fixing a “reasonable period of time” for implementation.

 

ARB.5.4.9 Chile — Price Band System, para. 52
(WT/DS207/13)

 

Nevertheless, the relevant laws of Chile, namely, the Constitution and Law 18.918, appear to enable Chile to resort to this “extraordinary” legislative procedure when proposing a law to modify the PBS. Because of the significant passage of time since adoption of the panel and Appellate Body reports in this case, and the lack of progress made thus far in implementing the recommendations and rulings of the DSB, Chile may itself decide to resort to the “urgency procedure” at certain stages of the legislative process. Chile recognizes that it must implement those recommendations and rulings in good faith towards other Members of the WTO. It must therefore do everything it reasonably can to act expeditiously in this process of implementation. Perhaps this will call for Chile to invoke its “urgency procedure”. Perhaps it will not. On the facts of this case and the evidence before me, I believe that whether and at what stages Chile utilizes the “urgency procedure” are questions for Chile to determine for itself. But, whatever it does, Chile must implement the recommendations and rulings of the DSB promptly.

 

ARB.5.4.10 US — Offset Act (Byrd Amendment), para. 64
(WT/DS217/14, WT/DS234/22)

 

I am aware that the component steps of the United States’ legislative process, as pointed out by the United States, are numerous and potentially time-consuming. However, I note that legislative bills have been passed by the United States Congress within short periods of time; for instance, the CDSOA itself appears to have been passed in a period of only 25 days. Moreover, the United States has described itself as a “strong advocate of prompt compliance”. Finally, I also agree with the arbitrators in US — Section 110(5) Copyright Act and in US — 1916 Act, respectively, who noted that, where the United States is obliged to enact a piece of legislation in order to bring itself into compliance with its obligations under an international treaty, the United States Congress may be expected to take advantage of the flexibility available within the legislative procedures to implement such legislation as speedily as possible.

 

ARB.5.4.11 EC — Tariff Preferences, para. 53
(WT/DS246/14)

 

To start with the European enlargement, the European Communities argues that considerable time will be needed to translate into the 20 official languages certain instruments connected with implementation. I agree that this circumstance is likely to increase the period of time reasonably required to complete certain steps in the implementation process. Therefore, I have taken this into account in my determination. I also agree with the European Communities that, if a member State of the European Union requested verification that the Council adopted the implementing regulation by a qualified majority representing at least 62% of the population of the European Union, this could add to the time required for implementation.

 

ARB.5.4.12 EC — Tariff Preferences, para. 54
(WT/DS246/14)

 

I turn to the election of a new European Parliament in June 2004 and the commencement of a new Commission on 1 November 2004. According to the European Communities’ estimates, the Commission will complete its proposal on a Council regulation modifying the Drug Arrangements, and that proposal will be transmitted to the European Parliament, in October 2004. The fact that a new Commission takes charge on 1 November 2004 would not appear to increase the time required to complete that proposal. Similarly, if the Commission’s proposal is transmitted to the European Parliament in October 2004, this should allow sufficient time for the European Parliament to become “operational” before it examines the proposal.

 
ARB.5.5 Relevance of contentiousness     back to top

ARB.5.5.1 Chile — Alcoholic Beverages, para. 43
(WT/DS87/15, WT/DS110/14)

 

Two aspects of the Chilean legislative process may be usefully noted. One is the set of practices designated as the “pre-legislative” phase of the law-making process in Chile, during which phase a specific revised tax scheme is developed and proposed on the basis of consultations and technical assessments. These consultations will include discussions aimed at building and organizing the broad support necessary for the adoption of the proposed bill, by both Chambers of the National Congress. The duration of this “pre-legislative” phase may differ from bill to bill; no maximum period is set by law but it is clearly an important phase if the success of the legislative effort is important. …

 

ARB.5.5.2 Canada — Pharmaceutical Patents, para. 58
(WT/DS114/13)

 

… I see nothing in this proposed regulatory change that can be described as complex. What is more, in this case, comments from the public could not be expected to result in much alteration of the one substantive sentence of Canada’s proposed regulatory change, which merely repeals the existing regulation. After all, how many other ways could this one sentence be written? Likewise, in this case, any consideration of any changes that might conceivably be needed in the solitary substantive sentence of the proposed regulatory change could not be expected to take very long. … If this proposed regulatory change were more complex, I might reach a different conclusion. Yet it is not complex at all. And, given the sheer simplicity of the wording, function and purpose of this proposed regulation, I consider it implausible that this particular implementation step in this case should take as much time as claimed by Canada.

 

ARB.5.5.3 Canada — Pharmaceutical Patents, para. 60
(WT/DS114/13)

 

… I see nothing in Article 21.3 to indicate that the supposed domestic “contentiousness” of a measure taken to comply with a WTO ruling should in any way be a factor to be considered in determining a “reasonable period of time” for implementation. …

 

ARB.5.5.4 US — Section 110(5) Copyright Act, paras. 41-42
(WT/DS160/12)

 

… one of the factors listed by the United States as support for the period it has proposed is not relevant for the determination of a “reasonable period of time” for implementation. The United States refers to the “controversy” surrounding the legislation, and the “divergent views of stakeholders”.

 

… any argument as to the “controversy”, in the sense of domestic “contentiousness”, regarding the measure at issue is not relevant. … While I agree that this is an important issue, I do not see how it will add any additional time to the legislative process, as the content of the legislation effecting implementation is precisely the issue that Congress will decide through its normal procedures.

 

ARB.5.5.5 Canada — Patent Term, para. 49
(WT/DS170/10)

 

I now turn to Canada’s main argument in support of its request for a “reasonable period of time” of 14 months and two days. I recall Canada’s observation that the required amendment of its Patent Act will have an economic impact on Canada’s health care system, so that it can be expected that there will be significant debate which is likely to be divisive, and that, therefore, the Government of Canada will have to carefully manage the legislative process. …

 

ARB.5.5.6 Canada — Patent Term, para. 53
(WT/DS170/10)

 

The issue raised by Canada is of great importance, both from the point of view of the implementation of recommendations and rulings of the DSB, that is, the respect of international treaty obligations, and from the point of view of fundamental principles of the democratic process. I do not believe, however, that I have to decide the controversy between the parties for the implementation through legislation in general. My only task is to determine the “reasonable period of time” for the case before me. My reasoning, therefore, applies to this case only.

 

ARB.5.5.7 Canada — Patent Term, para. 58
(WT/DS170/10)

 

The treatment of existing patents which benefit from a longer period of protection than the period prescribed by Article 33 of the TRIPS Agreement may be highly controversial and closely connected politically with the amendment of Article 45 of the Canadian Patent Act. However, as I have already said, this issue is outside the strict boundaries of the implementation of the recommendations and rulings of the DSB. Consequently, the “contentiousness” of this issue is certainly not a “particular circumstance” which I should take into account in determining the “reasonable period of time” in the present case. Therefore, Canada cannot invoke legislative choices and the likely divisiveness of the debate in the Canadian Parliament to justify its request for a “reasonable period of time” of 14 months and two days.

 

ARB.5.5.8 US — Hot-Rolled Steel, para. 38
(WT/DS184/13)

 

… Even so, it does not seem unreasonable to infer that the formal proceedings are likely to be carried out with more dispatch in view of the “pre-legislative”, informal consultations already undertaken. In Chile — Taxes on Alcoholic Beverages — Arbitration under Article 21.3(c) of the DSU (“Chile — Alcoholic Beverages”), the Arbitrator noted that the “pre-legislative” phase is “an important phase if the success of the legislative effort is important”.

 

ARB.5.5.9 Chile — Price Band System, paras. 47-48
(WT/DS207/13)

 

… it has been rightly said that “[a]ll WTO disputes are ‘contentious’ domestically at least to some extent; if they were not, there would be no need for recourse by WTO Members to dispute settlement.” Simple contentiousness may thus not be a sufficient consideration under Article 21.3(c) for a longer period of time.

 

Nevertheless, the facts of this dispute, as identified by Chile and uncontested by Argentina, raise special concerns that warrant my taking them into account in my determination. I am of the view that the PBS is so fundamentally integrated into the policies of Chile, that domestic opposition to repeal or modification of those measures reflects, not simply opposition by interest groups to the loss of protection, but also reflects serious debate, within and outside the legislature of Chile, over the means of devising an implementation measure when confronted with a DSB ruling against the original law. In the light of the longstanding nature of the PBS, its fundamental integration into the central agricultural policies of Chile, its price-determinative regulatory position in Chile’s agricultural policy, and its intricacy, I find its unique role and impact on Chilean society is a relevant factor in my determination of the “reasonable period of time” for implementation.

 

ARB.5.5.10 US — Offset Act (Byrd Amendment), para. 61
(WT/DS217/14, WT/DS234/22)

 

I do not mean to suggest that I am of the view that the dispute between the United States and the eleven Complaining Parties in US — Offset Act (Byrd Amendment) does not involve important questions under WTO law. Moreover, I am fully aware of the high level of economic and political interest in this particular dispute, as evidenced by the significant number of WTO Members involved in all stages of this dispute, including in these arbitration proceedings. Nevertheless, “complexity” of implementing legislation as a particular circumstance, within the meaning of Article 21.3(c), is a legal criterion, to be examined without regard for political contentiousness or other non-legal factors that may surround a measure at issue. I am precluded, by my mandate under Article 21.3(c), from giving consideration to these non-legal factors.

 

ARB.5.5.11 EC — Tariff Preferences, para. 56
(WT/DS246/14)

 

I am not persuaded by the statements of the European Communities that the particular nature of the Drug Arrangements within the GSP scheme and the development policy of the European Communities warrants any increase in the reasonable period of time for implementation. Although a modification to the Drug Arrangements may well be described as “politically sensitive”, this factor does not distinguish the Drug Arrangements from any other measure that is likely to be the subject of a WTO dispute. The measure examined in Chile — Price Band System was quite different. That measure had a “unique … impact on Chilean society” (that is, the society of the implementing Member); “domestic opposition” to its repeal or modification reflected “serious debate, within and outside the legislature of Chile, over the means of devising an implementation measure” and “not simply opposition by interest groups to the loss of protection”.

 

ARB.5.5.12 US — Stainless Steel (Mexico) (Article 21.3(c)), para. 62
(WT/DS344/15)

 

… Issues relating to Presidential and Congressional elections and the transition to a new President, a new Administration, and a new Congress, or the controversial character of required changes in the domestic legal system, have arisen in previous arbitrations. Like those arbitrators, I believe that the implementation process — particularly an administrative one — should begin forthwith upon adoption of the DSB recommendations and rulings and be completed after the new Administration and Congress take office.

 

ARB.5.5.13 Colombia — Ports of Entry (Article 21.3(c)), para. 103
(WT/DS366/13)

 

… Colombia has not established in what way the indicative prices mechanism and the ports of entry measure operate as “essential pillars” of the regulatory regime it adopted to combat under-invoicing, smuggling, and contraband. Even if this were the case, Colombia has not demonstrated how the relative importance of these measures in its overall customs control and enforcement framework for combating under-invoicing, smuggling, and contraband impact the implementing process in a manner that justifies the assessment of a longer reasonable period of time for implementation.

 
ARB.5.6 Means of implementation     back to top

ARB.5.6.1 Australia — Salmon, paras. 31, 33
(WT/DS18/9)

 

A certain difficulty arises in this case because of the divergent views of the parties as to what constitutes implementation. …

 

 

Clearly, what constitutes a “reasonable period of time” depends upon the action which Australia takes under its legal system to implement the recommendations and rulings of the DSB. If implementation is effected by means of an administrative decision to repeal or modify the measure at issue or by means of a permit granted by the Director of Quarantine, the length of time needed to carry out such a process would be different from what it would be if Australia were to conduct a series of risk assessments.

 

ARB.5.6.2 Australia — Salmon, para. 38
(WT/DS18/9)

 

… Both parties also agree that the process involved in bringing the measure in dispute into conformity with Australia’s obligations under the SPS Agreement is an administrative, not a legislative, process. As pointed out by the arbitrator in European Communities — Hormones, when implementation can be effected by administrative means, the reasonable period of time should be “considerably shorter than 15 months”.

 

ARB.5.6.3 Canada — Pharmaceutical Patents, para. 49
(WT/DS114/13)

 

For example, if implementation is by administrative means, such as through a regulation, then the “reasonable period of time” will normally be shorter than for implementation through legislative means. It seems reasonable to assume, unless proven otherwise due to unusual circumstances in a given case, that regulations can be changed more quickly than statutes. To be sure, the administrative process can sometimes be long; but the legislative process can oftentimes be longer.

 

ARB.5.6.4 Canada — Pharmaceutical Patents, para. 51
(WT/DS114/13)

 

In addition, the legally binding, as opposed to the discretionary, nature of the component steps leading to implementation should be taken into account. If the law of a Member dictates a mandatory period of time for a mandatory part of the process needed to make a regulatory change, then that portion of a proposed period will, unless proven otherwise due to unusual circumstances in a given case, be reasonable. On the other hand, if there is no such mandate, then a Member asserting the need for a certain period of time must bear a much more imposing burden of proof. …

 

ARB.5.6.5 US — Hot-Rolled Steel, para. 32
(WT/DS184/13)

 

The temporal relationship between the legislative and the administrative implementing actions is an important consideration in the present arbitration. The United States and Japan agree that the relationship is not necessarily a linear, sequential one and that some administrative actions may well be taken, or at least commenced, concurrently with the initiation of the legislative implementing effort.

 

ARB.5.6.6 Chile — Price Band System, footnote 86 to para. 33
(WT/DS207/13)

 

… I note that both parties in this arbitration argue that new legislation is necessary for implementation of the recommendations and rulings of the DSB, and therefore, appear to agree that “immediate” compliance by Chile is impracticable. The impracticability of Chile’s immediate compliance has not been raised as an issue for decision in this arbitration.

 

ARB.5.6.7 Chile — Price Band System, paras. 36-37
(WT/DS207/13)

 

… Whether elimination of the PBS, in so far as it impacts upon the relevant products, is the “only appropriate” means of implementation (as opposed to a modification of the PBS) is not an issue for decision in this arbitration. As discussed above, the focus of my inquiry and determination relates to the period of time needed to implement the recommendations and rulings of the DSB, not to the manner in which Chile intends to implement them. …

 

The fact that an Article 21.3(c) arbitration focuses on the period of time for implementation, however, does not render the substance of the implementation, that is, the precise means or manner of implementation, immaterial from the perspective of the arbitrator. In fact, the more information that is known about the details of the implementing measure, the greater the guidance to an arbitrator in selecting a reasonable period of time, and the more likely that such period of time will fairly balance the legitimate needs of the implementing Member against those of the complaining Member. Nevertheless, the arbitrator should still avoid deciding what a Member must do for proper implementation. …

 

ARB.5.6.8 Chile — Price Band System, para. 38
(WT/DS207/13)

 

… I find the intricacy of the lawmaking process relevant to my determination, and I agree with the observation of previous arbitrators that implementation through legislation is likely to require a longer time for implementation than administrative rulemaking or other exclusively Executive action.

 

ARB.5.6.9 US — Offset Act (Byrd Amendment), para. 57
(WT/DS217/14, WT/DS234/22)

 

… As a general rule, absent evidence to the contrary, implementation by legislative measures will, more often than not, require a longer period of time than implementation by means of administrative measures. …

 

ARB.5.6.10 US — Offset Act (Byrd Amendment), para. 59
(WT/DS217/14, WT/DS234/22)

 

I do not consider the existence of numerous options to implement the recommendations and rulings of the DSB, as invoked by the United States, to be relevant to my determination of the “reasonable period of time” for implementation of the recommendations and rulings of the DSB. The weighing and balancing of the respective merits of various legislative alternatives is one of the key functions and aspects of any legislative process. The mere fact that implementation of the recommendations and rulings of the DSB necessitates the choice between several, or even a large number of, alternative options is generally not, in my view, in and of itself, a particular circumstance that would inform my determination of the shortest period possible to implement the recommendations and rulings of the DSB in this case.

 

ARB.5.6.11 EC — Tariff Preferences, para. 42
(WT/DS246/14)

 

It is not unusual for domestic or other legal systems to follow procedural conventions that are not explicitly mandated by legal instruments. Moreover, I find relevant that the Council has sought an opinion from the European Parliament and the ECOSOC before adopting the great majority of regulations related to the European Communities’ GSP scheme over the years. The European Communities has also suggested that the consequences of failing to seek such opinions in the present implementation process would be a matter to be determined by the Court of Justice of the European Communities. It appears, therefore, that adoption of the regulation in question without seeking opinions from the European Parliament and the ECOSOC would be an “extraordinary” procedure. I agree with previous arbitrators that implementing Members are not required to adopt “extraordinary legislative procedures” in every case. In my view, seeking the opinions of the European Parliament and the ECOSOC should be included in determining the reasonable period of time for implementation.

 

ARB.5.6.12 EC — Tariff Preferences, para. 51
(WT/DS246/14)

 

I note that the Arbitrator in Korea — Alcoholic Beverages determined that it was reasonable to include in the reasonable period of time the “thirty-day grace period for enforcement of certain … instruments” provided in a Korean statute. The Arbitrator in EC — Bananas III also appears to have taken into account the European Communities’ statement that “any change in legislation which directly affects the customs treatment of products in connection with importation or exportation, enters into force either on 1 January or 1 July of the relevant year” in determining the reasonable period of time in that dispute. In the present case, I regard the administrative practice of the European Communities, as it pertains to advance publication of tariff changes and the date on which such changes take effect, as a relevant factor in determining the reasonable period of time for implementation.

 

ARB.5.6.13 US — Oil Country Tubular Goods Sunset Reviews, para. 26
(WT/DS268/12)

 

… the nature of the steps to be taken for implementation has a bearing on the “reasonable period of time” required to fully implement the recommendations and rulings of the DSB. The implementation may require amendments to laws or regulations that may involve legislative action, or it may require amendments to administrative guidelines or procedures that may not involve such action. Implementation may also involve only the remedying of the deficiencies in a particular determination. Previous arbitration awards under Article 21.3(c) have recognized that when implementation requires legislative action, the “reasonable period of time” required may be longer than in cases where only administrative action is required to amend guidelines or procedures or to remedy the deficiencies in particular determinations. …

 

ARB.5.6.14 US — Oil Country Tubular Goods Sunset Reviews, para. 50
(WT/DS268/12)

 

The United States considers that the waiver provisions of the USDOC Regulations must first be amended to bring them into conformity with the DSB’s recommendations and rulings, and that only after the amended regulations are issued could they be applied to a new determination to remedy the “as applied” violation in this dispute. In this regard, I note two aspects of this dispute: first, one of the reasons for the Panel finding the “as applied” violation was that WTO-inconsistent waiver provisions were applied to Argentine exporters other than Siderca; and, second, an amendment of the waiver provisions of the USDOC Regulations is in any event required to remedy the “as such” violations in this dispute. The United States has explained why it considers an in seriatim approach to be necessary in this case to ensure that the redetermination is in conformity with its own legal system. …

 

ARB.5.6.15 US — Gambling, para. 35
(WT/DS285/13)

 

It is by now well established that a key determinant of the reasonable period of time for implementation is the nature of the implementing action that is to be taken. Legislative action will, as a general rule, require more time than regulatory rulemaking, which in turn will normally need more time than implementation that can be achieved by means of an administrative decision.

 

ARB.5.6.16 US — Gambling, paras. 36, 40-41
(WT/DS285/13)

 

… Antigua contends that the United States can implement, in part, through executive action, and in part through legislative action. With respect to what Antigua characterizes as the supply of “non-sports related and horseracing” gambling and betting services, Antigua argues that the United States can, and should, implement the recommendations and rulings of the DSB through the issuance of an executive order by the United States President that would clarify that the supply of such services from Antigua is not prohibited under the Wire Act, the Travel Act or the IGBA. As regards the supply of “other sports-related” gambling and betting services, Antigua accepts that legislative change will be necessary in order to clarify whether and how the Wire Act, the Travel Act and the IGBA apply to these activities.

 

 

In asking me to draw this distinction, therefore, Antigua is effectively asking me to make a ruling concerning the meaning and scope of application of United States municipal law. I do not consider that it forms part of my mandate to do so, given that the findings of the Panel and the Appellate Body make no such distinction.

 

Because I do not rule on whether the distinction asserted by Antigua exists, I need not, in this proceeding, resolve the issue of whether it is permissible for an arbitrator under Article 21.3(c) of the DSU to determine more than one reasonable period of time for implementation. …

 

ARB.5.6.17 US — Gambling, paras. 42-43
(WT/DS285/13)

 

Having declined to rule on the distinction on which Antigua bases its assertion that the United States could undertake two separate methods of implementation, I need not consider the reasonable period of time that would be necessary for implementation by means of an executive order. I turn, instead, to the question of the reasonable period of time needed for the United States to implement by legislative means.

 

… Antigua suggested that even if I were to consider that the United States enjoys the discretion to decide to implement by legislative means, … the United States should be required to “pay the price” for having chosen a “complicated, more lengthy way” of implementing rather than another available method that would be shorter. … I need not decide whether a Member’s decision to opt for one means of implementation (legislative) notwithstanding that another, more rapid means of implementation has been demonstrated to be available, could affect the determination of the reasonable period of time for implementation under Article 21.3(c) of the DSU.

 

ARB.5.6.18 EC — Export Subsidies on Sugar, para. 69
(WT/DS265/33, WT/DS266/33, WT/DS283/14)

 

… the choice of the method of implementation rests with the implementing Member. However, the implementing Member does not have an unfettered right to choose any method of implementation. Besides being consistent with the Member’s WTO obligations, the chosen method must be such that it could be implemented within a reasonable period of time in accordance with the guidelines contained in Article 21.3(c). Objectives that are extraneous to the recommendations and rulings of the DSB in the dispute concerned may not be included in the method if such inclusion were to prolong the implementation period. Above all, it is assumed that the implementing Member will act in “good faith” in the selection of the method that it deems most appropriate for implementation of the recommendations and rulings of the DSB.

 

ARB.5.6.19 EC — Export Subsidies on Sugar, paras. 78-79
(WT/DS265/33, WT/DS266/33, WT/DS283/14)

 

… the Complaining Parties submitted an exhibit indicating three instances where the management committee delivered its opinion before the Council adopted the relevant regulation. The European Communities responds that, although the management committee may be invited by the Commission to deliver its opinion before the Council regulation has been adopted, this, nevertheless, remains an extraordinary procedure in the practice of the European Communities’ institutions.

 

I agree with previous arbitrators that an implementing Member is not required to adopt “extraordinary legislative procedures” in every case. In this respect, I am not persuaded by the argument of the Complaining Parties that, although the instances cited by them are few, the flexibility suggested by them should not be regarded as “extraordinary”. In this respect, I take note of the requirement that the opinion of the management committee would have to be sought again in the event that the Council, in adopting the regulation, modified the original Commission proposal.

 

ARB.5.6.20 EC — Export Subsidies on Sugar, paras. 93-95
(WT/DS265/33, WT/DS266/33, WT/DS283/14)

 

… The European Communities argues that the Council regulation under discussion must enter into force on 1 July 2006 because “it is an established legislative practice that regulations which must be implemented by the customs authorities should be published at least six weeks before their entry into force and take effect from 1 January, or exceptionally, from 1 July”. This practice is based on a Council resolution from 1974. …

 

In response, the Complaining Parties have submitted two tables showing 33 Council and Commission regulations that, according to the Complaining Parties, “appear to fall within the [European Communities’] description of the Council’s long-standing practice”; however, in the case of these regulations, the alleged European Communities’ practice was not followed, in that the relevant regulations did not enter into force on 1 January or 1 July, and were not published six weeks prior to their entry into force. …

 

In my view, the statistical information submitted by the Complaining Parties suggests that a degree of flexibility exists with respect to the practice alleged by the European Communities. I am aware that the arbitrator in EC — Tariff Preferences regarded this administrative practice of the European Communities as a relevant factor in determining the reasonable period of time for implementation. However, unlike in that case, the Complaining Parties have presented clear evidence that the practice has not been followed in a number of instances. The European Communities has not explained why, in this particular case, the European Communities cannot make use of the flexibility it appears to have with respect to this particular administrative practice.

 

ARB.5.6.21 EC — Export Subsidies on Sugar, para. 96
(WT/DS265/33, WT/DS266/33, WT/DS283/14)

 

With respect to the European Communities’ argument that there is a “well established legislative practice” that significant changes to the rules of a CMO should take effect from the start of the following marketing year, I note that the European Communities has not directed my attention to any factual evidence in support of this claim. In contrast, the Complaining Parties have submitted evidence that casts doubt on the existence of the “legislative practice” in the form of a table with ten Council amendments to existing CMOs that, according to the Complaining Parties, did not take effect at the start of the marketing year. I am therefore of the view that the European Communities has not discharged its burden of proof with respect to this issue. Therefore, the alleged “legislative practice” that “significant changes to the rules of a common market organization should take effect … from the start of the following marketing year” is not a “particular circumstance ” that I propose to take into account in determining the reasonable period of time.

 

ARB.5.6.22 EC — Chicken Cuts, paras. 51-52
(WT/DS269/13, WT/DS286/15)

 

With respect to the first step of the European Communities’ proposed means of implementation, I observe at the outset that the action envisaged — the classification decision of the Harmonized System Committee of the WCO — is outside the lawmaking procedures of the European Communities. In considering this proposed first step, I note, first of all, that disputes that give rise to WTO dispute settlement under the DSU focus exclusively on “measures taken” by a Member, and that, accordingly, a measure that is the subject of a challenge in WTO dispute settlement must be “attributable” to that Member. Because measures so challenged originate in the decision-making organs of a WTO Member’s own legal system, an arbitrator under Article 21.3(c) may reasonably expect that implementation would ordinarily be achieved by means entirely within the implementing Member’s lawmaking procedures. In that ordinary situation, a Member’s prerogative to select the means of implementation is particularly strong, and it is appropriate in that situation for an arbitrator to refrain from questioning whether another, perhaps shorter, means of implementation is available within that legal system.

 

The situation is not the same, however, where, as here, a Member seeks to implement recommendations and rulings of the DSB by decision-making processes outside its domestic legal order. Recourse to such external processes will not ordinarily form part of the implementation of the recommendations and rulings of the DSB. Accordingly, as I see it, the mere assertion by a Member of the need for recourse to such external decision-making processes as part of an implementation proposal is not entitled to the same deference as in the case of an implementation procedure that is entirely within that Member’s domestic legal system. Instead, in my view, an implementing Member seeking to go outside its domestic decision-making processes bears the burden of establishing that this external element of its proposed implementation is necessary for, and therefore indispensable to, that Member’s full and effective compliance with its obligations under the covered agreements by implementing the recommendations and rulings of the DSB.

 

ARB.5.6.23 EC — Chicken Cuts, para. 67
(WT/DS269/13, WT/DS286/15)

 

… I recognize that the Commission engages in a “law-making” function, and thereby acts in a manner similar to legislatures when enacting a Regulation amending Additional Note 7. In my view, however, this, alone, does not render the process legislative such that additional time may be required for implementation. Previous arbitrations have highlighted that implementation achieved through administrative processes generally requires less time than implementing legislation. This distinction is premised on the fact that administrative action generally may be accomplished solely by one institution (often the Executive Branch) of the implementing Member, whereas legislative action generally requires the participation of additional institutions (typically at least the Legislative Branch — likely to have slower, more deliberative processes — possibly in conjunction with the Executive Branch as well). The implementation steps proposed by the European Communities under Community law are expected to be accomplished exclusively by the Commission, without involvement by the Council or the European Parliament. I therefore do not consider these steps to be “legislative” in the sense in which I believe that term has come to be understood in the context of arbitrations under Article 21.3(c). Accordingly, I must take into account in my determination the administrative nature of the proposed implementation process.

 

ARB.5.6.24 EC — Chicken Cuts, para. 79
(WT/DS269/13, WT/DS286/15)

 

… not all of the actions identified by the European Communities are required under Community law when passing a Commission Regulation. In some instances, this may suggest that those actions not required by law are to be given less weight in my determination of the reasonable period of time. In other instances, however, the fact that a certain action is not mandated does not mean that such action is irrelevant to my determination. In this respect, I note, in particular, that certain procedures and time-frames, while not mandated, are based on standard practice as the European Communities has substantiated with relevant evidence. While WTO Members will, unquestionably, always want to ensure that they are complying fully with all of their WTO obligations by implementing adverse WTO rulings as quickly as possible in their own legal systems, ordinarily their standard practices in those systems should suffice.

 

ARB.5.6.25 Japan — DRAMs (Korea) (Article 21.3(c)), para. 27
(WT/DS336/16)

 

… In assessing whether the means chosen by the Member is consistent with the recommendations and rulings of the DSB, I must consider whether the implementing action falls within the range of permissible actions that can be taken in order to implement the DSB’s recommendations and rulings. This does not mean that I am permitted to determine the consistency with WTO law of the measure taken to comply. This can only be judged in Article 21.5 proceedings. Article 21.3(c) arbitrations are distinct and concern by when implementation must take place. In making this determination, the means of implementation available to the Member concerned is a relevant consideration.

 

ARB.5.6.26 Brazil — Retreaded Tyres (Article 21.3(c)), para. 68
(WT/DS332/16)

 

… implementing Members have usually proposed either legislative or regulatory means to implement DSB recommendations and rulings. However, I do not consider that implementation through the judiciary can be a priori excluded from the range of permissible action that can be taken to implement DSB recommendations and rulings and bring about compliance with a Member’s obligations under the covered agreements. The degree of government control may well be different with respect to the executive, the legislative, and the judiciary branches of power. Implementation action, whether it is taken by the legislature, or the judiciary, may not be executed in the way envisaged by the government. Yet the possibility of failure to achieve the intended compliance has not been regarded by previous arbitrators as a reason to question the permissibility of implementation by means of legislation, nor, in my view, does it exclude judicial action from the range of a permissible means of implementation. …

 

ARB.5.6.27 Brazil — Retreaded Tyres (Article 21.3(c)), para. 80
(WT/DS332/16)

 

Therefore, I agree with the arbitrator in EC — Chicken Cuts that “[r]ecourse to such external processes will not ordinarily form part of the implementation of the recommendations and rulings of the DSB”, and that recourse to external decision making “is not entitled to the same deference as in the case of an implementation procedure that is entirely within that Member’s domestic legal system”. In addition, the arbitrator in EC — Tariff Preferences stated that “[t]he mere fact that the European Communities has decided to incorporate the task of implementation within the larger objective of reforming its overall GSP scheme cannot lead to a determination of a shorter, or longer, period of time.” Similarly, in this case, Brazil seems to envisage negotiations on new MERCOSUR disciplines, which seems to include a wider spectrum than the MERCOSUR exemption from the ban on retreaded tyres at issue here. This is not to say that I would discourage the Member concerned from consulting and coordinating with its trading partners in advance of a modification of an import regime, including in the context of implementing DSB recommendations and rulings that may affect them. The question before me, however, is whether this should be recognized as a “particular circumstance” that should be factored into my calculation of the reasonable period of time. In keeping with the premise set out by the arbitrator in EC — Chicken Cuts, I am of the view that an implementing Member seeking to go outside its domestic decision-making processes bears the burden of establishing that “this external element of its proposed implementation is necessary for, and therefore indispensable to, that Member’s full and effective compliance with its obligations under the covered agreements”.

 
ARB.5.7 Structural adjustment     back to top

ARB.5.7.1 Indonesia — Autos, para. 23
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)

 

Indonesia also requests an additional period of nine months following the issuance of its implementing measure (i.e., to 23 October 1999) as a “transition” period to allow the affected companies/industries to make structural adjustments. I do not view structural adjustments of Indonesia’s affected industries as a “particular circumstance” which may be taken into account under Article 21.3(c) of the DSU. In virtually every case in which a measure has been found to be inconsistent with a Member’s obligations under the GATT 1994 or any other covered agreement, and therefore, must be brought into conformity with that agreement, some degree of adjustment by the domestic industry of the Member concerned will be necessary. This will be the case regardless of whether the Member concerned is a developed or a developing country. Structural adjustment to the withdrawal or the modification of an inconsistent measure, therefore, is not a “particular circumstance” that can be taken into account in determining the reasonable period of time under Article 21.3(c).

 

ARB.5.7.2 Canada — Pharmaceutical Patents, para. 52
(WT/DS114/13)

 

… in my view, the “particular circumstances” mentioned in Article 21.3 do not include factors unrelated to an assessment of the shortest period possible for implementation within the legal system of a Member. Any such unrelated factors are irrelevant to determining the “reasonable period of time” for implementation. For example, as others have ruled in previous Article 21.3 arbitrations, any proposed period intended to allow for the “structural adjustment” of an affected domestic industry will not be relevant to an assessment of the legal process. The determination of a “reasonable period of time” must be a legal judgement based on an examination of relevant legal requirements.

 

ARB.5.7.3 Argentina — Hides and Leather, para. 41
(WT/DS155/10)

 

It thus appears that the concept of compliance or implementation prescribed in the DSU is a technical concept with a specific content: the withdrawal or modification of a measure, or part of a measure, the establishment or application of which by a Member of the WTO constituted the violation of a provision of a covered agreement. Compliance within the meaning of the DSU is distinguishable from the removal or modification of the underlying economic or social or other conditions the existence of which might well have caused or contributed to the enactment or application of the WTO-inconsistent governmental measure in the first place. Those economic or other conditions might, in certain situations, survive the removal or modification of the non-conforming measure; nevertheless, the WTO Member concerned will have complied with the DSB recommendations and rulings and with its obligations under the relevant covered agreement. To my mind, it is inter alia for the above reason that the need for structural adjustment of the industry or industries in respect of which the WTO-inconsistent measure was promulgated and applied, has generally been regarded, in prior arbitrations under Article 21.3(c) of the DSU, as not bearing upon the determination of a “reasonable period of time” for implementation of DSB recommendations and rulings.

 

ARB.5.7.4 EC — Export Subsidies on Sugar, paras. 91-92
(WT/DS265/33, WT/DS266/33, WT/DS283/14)

 

I turn now to the European Communities’ contention that production already undertaken before the dispute in EC — Export Subsidies on Sugar was decided should be given consideration as a “particular circumstance ”. More specifically, the European Communities argues that “it would be appropriate to allow the European Communities’ exporters to continue to export out of quota sugar until 1 January 2007 without being subject to the payment of the ‘surplus’ levies provided [for] in the Commission proposal”. The Complaining Parties consider it unwarranted to grant an additional six months as a transition period to enable the domestic industry to export the sugar it has already produced. …

 

I agree with the views put forth by the Complaining Parties. In my view, the European Communities effectively requests a transitional period following the withdrawal or modification of a WTO-inconsistent measure, so that the domestic industry may adjust to such withdrawal or modification. As previous arbitrators have held, the perceived need for such “structural adjustment” or phase-in periods for the domestic producers does not constitute a “particular circumstance ” within the meaning of Article 21.3(c) and, as such, cannot have an impact on the determination of the reasonable period of time under that provision. In my view, allowing such a transitional period would have the effect of including in the reasonable period of time action that is extraneous to implementation of the recommendations and rulings of the DSB.

 
ARB.5.8 Economic and financial collapse     back to top

ARB.5.8.1 Indonesia — Autos, para. 24
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)

 

… Indonesia has indicated that in a “normal situation”, a measure such as the one required to implement the recommendations and rulings of the DSB in this case would become effective on the date of issuance. However, this is not a “normal situation”. Indonesia is not only a developing country; it is a developing country that is currently in a dire economic and financial situation. Indonesia itself states that its economy is “near collapse”. In these very particular circumstances, I consider it appropriate to give full weight to matters affecting the interests of Indonesia as a developing country pursuant to the provisions of Article 21.2 of the DSU. I, therefore, conclude that an additional period of six months over and above the six-month period required for the completion of Indonesia’s domestic rulemaking process constitutes a reasonable period of time for implementation of the recommendations and rulings of the DSB in this case.

 

ARB.5.8.2 Argentina — Hides and Leather, para. 49
(WT/DS155/10)

 

A final point that should be made is that to build into the concept of a “reasonable period of time” to comply with DSB recommendations and rulings, time or opportunity to control and manage economic or social conditions which antedate or are contemporaneous with the adoption of the WTO-inconsistent governmental measure, may, in the generality of instances, be to defer to an indefinitely receding future the duty of compliance. The implications for the multilateral trading system as we know it today, of such an interpretation of “reasonable period of time” for compliance are clear and far-reaching and ominous. Such an interpretation would tend to reduce the fundamental duty of “immediate” or “prompt” compliance to a figure of speech.

 

ARB.5.8.3 Argentina — Hides and Leather, para. 51
(WT/DS155/10)

 

… I agree that under Article 21.2 of the DSU in conjunction with Article 21.3(c), account may appropriately be taken of the circumstance that the WTO Member which must comply with the DSB recommendations and rulings is a developing country confronted by severe economic and financial problems. That those problems in the case of Argentina are real is not disputed, although there may be debate as to whether Argentina’s economy is “near collapse”.

 
ARB.5.9 Economic impact of existing measure.
See also Relevance of contentiousness (ARB.5.5)     back to top

ARB.5.9.1 Canada — Patent Term, paras. 46-48
(WT/DS170/10)

 

A second point of convergence between the parties concerns the significance, under Article 21.3(c) of the DSU, of the economic consequences of the expiry of certain patents during the “reasonable period of time” for the implementation of the recommendations and rulings of the DSB. I recall the United States’ assertion that, if Canada is permitted to delay its implementation of the recommendations and rulings of the DSB, thousands of patents will continue to expire “prematurely”, causing irreparable harm to patent owners; on average, 1,149 patents will fall into the public domain each month during 2001.

 

At the oral hearing, Canada accepted the statistics presented by the United States, but submitted that they are misleading as they fail to indicate whether or not the “prematurely” expiring patents have any commercial significance. …

 

Canada advanced the argument about the small number of patents with commercial value for the first time at the oral hearing. It is obvious that this argument would raise a major procedural problem if the commercial value of the patents expiring during the “reasonable period of time” had any relevance as a “particular circumstance” for the determination of the length of the “reasonable period of time” in this case. However, in my view, this is not so. Measures taken by Members, which are inconsistent with one of the covered agreements will, naturally, or at least very often, cause irreparable harm to economic operators who are nationals of other Members. In this respect, violations of the TRIPS Agreement will generally not differ from violations of one of the other covered agreements. The precise assessment of damage caused to a group of economic operators or to single individuals, or companies, may well be more difficult to evaluate than in the present case. However, this does not distinguish the present case from other cases involving violations of covered agreements for the purposes of determining the “reasonable period of time”, under Article 21.3(c). I note that this view corresponds to the position taken by the United States at the oral hearing according to which the argument of urgency was raised to provide context. The United States acknowledged that the commercial value of the expiring patents is not relevant to the determination of the shortest period possible, within the Canadian legal system.

 

ARB.5.9.2 US — Offset Act (Byrd Amendment), paras. 79-80
(WT/DS217/14, WT/DS234/22)

 

… economic harm suffered by foreign exporters does not, and cannot, by definition, impact on what is the “shortest period possible within the legal system of the Member to implement the recommendations and rulings of the DSB”. The particular circumstances, within the meaning of Article 21.3(c), can only be of such nature as will influence the evolution and unfolding of the implementation process itself. Factors external to the legislative process itself are of no relevance for the determination of the reasonable period of time for implementation.

 

I do not wish to imply that economic harm, caused by the WTO-inconsistent measure, to economic agents of the Complaining Parties, or any other WTO Members, is irrelevant in the context of the implementation of the recommendations and rulings of the DSB. Many WTO-inconsistent measures will cause some form of economic harm to exporters of WTO Members. However, the need, and urgency, to remove WTO-inconsistent measures, and to remove the harm to economic agents caused by such measures, is, in my view, already reflected in the principle of “prompt compliance” under Article 21.1. The same concern, in my view, underlies the well established principle, under Article 21.3(c), that the reasonable period of time for implementation be the shortest time possible within the legal system of the Member. Thus, it would be supererogatory, and incongruous, to accord renewed consideration to the issue of economic harm when determining the shortest period possible for implementation within the legal system of the implementing Member.

 
ARB.5.10 Developing countries     back to top

ARB.5.10.1 Indonesia — Autos, para. 24
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)

 

… Indonesia is a developing country. In that context, I note that Article 21.2 of the DSU requires that:

 

Particular attention should be paid to matters affecting the interests of developing country Members with respect to measures which have been subject to dispute settlement.

 

Although the language of this provision is rather general and does not provide a great deal of guidance, it is a provision that forms part of the context for Article 21.3(c) of the DSU and which I believe is important to take into account here. … Indonesia is not only a developing country; it is a developing country that is currently in a dire economic and financial situation. Indonesia itself states that its economy is “near collapse”. In these very particular circumstances, I consider it appropriate to give full weight to matters affecting the interests of Indonesia as a developing country pursuant to the provisions of Article 21.2 of the DSU. I, therefore, conclude that an additional period of six months over and above the six-month period required for the completion of Indonesia’s domestic rule-making process constitutes a reasonable period of time for implementation of the recommendations and rulings of the DSB in this case.

 

ARB.5.10.2 Chile — Alcoholic Beverages, para. 44
(WT/DS87/15, WT/DS110/14)

 

Chile has also referred to Article 21.2, where the DSU, immediately after stressing that “prompt compliance” with the recommendations and rulings of the DSB is essential for the WTO dispute settlement system, provides:

 

Particular attention should be paid to matters affecting the interests of developing country Members with respect to measures which have been subject to dispute settlement.

 

Chile has submitted that account must be taken of the specific interests of Chile as the developing country Member whose measure has been the subject of dispute settlement. However, Chile has not been very specific or concrete about its particular interests as a developing country Member nor about how those interests would actually bear upon the length of “the reasonable period of time” to enact necessary amendatory legislation.

 

ARB.5.10.3 Chile — Alcoholic Beverages, para. 45
(WT/DS87/15, WT/DS110/14)

 

It is not necessary to assume that the operation of Article 21.2 will essentially result in the application of “criteria” for the determination of “the reasonable period of time” — understood as the kinds of considerations that may be taken into account — that would be “qualitatively” different for developed and for developing country Members. I do not believe Chile is making such an assumption. Nevertheless, although cast in quite general terms, because Article 21.2 is in the DSU, it is not simply to be disregarded. As I read it, Article 21.2, whatever else it may signify, usefully enjoins, inter alia, an arbitrator functioning under Article 21.3(c) to be generally mindful of the great difficulties that a developing country Member may, in a particular case, face as it proceeds to implement the recommendations and rulings of the DSB.

 

ARB.5.10.4 Chile — Price Band System, paras. 55-56
(WT/DS207/13)

 

… I agree with the following statement by the arbitrator in Chile — Alcoholic Beverages that “an arbitrator functioning under Article 21.3(c) [must] be generally mindful of the great difficulties that a developing country Member may, in a particular case, face as it proceeds to implement the recommendations and rulings of the DSB”. This arbitration is, however, the first arbitration under Article 21.3(c) to include developing countries as both complainant and respondent. The period of time for implementation of the recommendations and rulings of the DSB in this case is thus a “matter affecting the interests” of both Members: the general difficulties facing Chile as a developing country in revising its longstanding PBS, and the burden imposed on Argentina as a developing country whose access to the Chilean agricultural market is impeded by the PBS, contrary to WTO rules.

 

Furthermore, Chile has not pointed to additional specific obstacles that it faces as a developing country under present circumstances. This is a matter which I should take into account in evaluating whether a longer period of time may be needed for implementation. The absence of presently existing, concrete difficulties in Chile’s position as a developing country stands in contrast to previous arbitrations, wherein Members have identified, not simply their positions as developing countries, but also “severe” or “dire” economic and financial situations existing at the time of the proposed period of implementation. In contrast, the acuteness of Argentina’s burden as a developing country complainant that has been successful in establishing the WTO-inconsistency of a challenged measure, is amplified by Argentina’s daunting financial woes at present. Accordingly, I recognize that Chile may indeed face obstacles as a developing country in its implementation of the recommendations and rulings of the DSB, and that Argentina, likewise, faces continuing hardship as a developing country so long as the WTO-inconsistent PBS is maintained. In the unusual circumstances of this case, therefore, I am not swayed towards either a longer or shorter period of time by the “[p]articular attention” I pay to the interests of developing countries.

 

ARB.5.10.5 US — Offset Act (Byrd Amendment), para. 81
(WT/DS217/14, WT/DS234/22)

 

… I note that, by its wording, Article 21.2 does not distinguish between situations where the developing country Member concerned is an implementing or a complaining party. However, I also note that the Complaining Parties have not explained specifically how developing country Members’ interests should affect my determination of the reasonable period of time for implementation. It is useful to recall, once again, that the term “reasonable period of time” has been consistently interpreted to signify the “shortest period possible within the legal system of the Member”. Therefore, I have some difficulty in seeing how the fact that several Complaining Parties are developing country Members should have an effect on the determination of the shortest period possible within the legal system of the United States to implement the recommendations and rulings of the DSB in this case.

 

ARB.5.10.6 US — Oil Country Tubular Goods Sunset Reviews, para. 52
(WT/DS268/12)

 

… for my determination of the reasonable period of time, Argentina requests me to use as “context” the fact that Argentina is a developing country Member. Having regard to the implementation process involved in this dispute, I consider that, beyond the fundamental requirement that the implementation process should be completed in the shortest period possible within the legal and administrative system of the United States, the “reasonable period of time” for implementation is not affected by the fact that Argentina, as the complaining Member, is a developing country.

 

ARB.5.10.7 US — Gambling, paras. 57, 59-60
(WT/DS285/13)

 

… For the United States, Article 21.2 can be relevant in an arbitration to determine the reasonable period of time for implementation only when it is the implementing Member that is a developing country. … The fact that the complaining Member may be a developing country cannot, in the view of the United States, have any impact on such a determination.

 

 

On its face, … the text of Article 21.2 does not expressly limit its scope of application to developing country Members as implementing, rather than as complaining, parties to a dispute. Any such limitation, if it exists, must therefore be found in the context and/or object and purpose of this provision.

 

… The provision requires that “particular attention” be paid to: (i) matters; (ii) affecting the interests of developing country Members; (iii) with respect to the measures at issue. At first blush, it is not clear whether the word “matters” in Article 21.2 has the same meaning as elsewhere in the DSU, or whether it refers simply to the subject matter covered by Article 21. In any event, it seems to me that Article 21.2 contemplates a clear nexus between the interests of the developing country invoking the provision and the measures at issue in the dispute, as well as a demonstration of the adverse affects of such measures on the interests of the developing country Member(s) concerned.

 

ARB.5.10.8 US — Gambling, para. 61
(WT/DS285/13)

 

… Article 21.2… is located within Article 21, which is entitled “Surveillance of Implementation of Recommendations and Rulings”. The second paragraph of Article 21, like the first, sets out a broad principle that guides and informs the more specific paragraphs that follow, including Article 21.3. Given that Article 21 contains a number of additional paragraphs dealing with different aspects of surveillance and implementation, it seems likely that Article 21.2 informs each of the subsequent paragraphs in a different manner. Arguably, for example, Article 21.2 could constitute a legislative expression of a factor that is to constitute a “particular circumstance” to be taken into account under Article 21.3(c). The last two paragraphs of Article 21 are also, as Antigua pointed out at the oral hearing, of potential use in interpreting the scope and role of Article 21.2. Each of those provisions also deals with developing country Members of the WTO at the stage of surveillance and implementation of DSB recommendations and rulings. Yet, contrary to Article 21.2, both Article 21.7 and Article 21.8 expressly apply to the developing country Members that brought the case, that is, to developing countries as complaining parties.

 

ARB.5.10.9 US — Gambling, paras. 62-63
(WT/DS285/13)

 

The significance to be attached to this context, and the precise nature of the relationship between Article 21.2 and Article 21.3(c), are not issues that need be resolved in this arbitration. This is because, in my view, Antigua has not satisfied the criteria expressly mentioned in Article 21.2. … Antigua did not … provide specific data in support of [its] arguments. Nor did Antigua seek to demonstrate any clear relationship between the decline of its industry and the measures which were subject to this dispute …

 

In the absence of any more specific evidence or elaboration of the affected interests of Antigua and their relationship with the measures at issue, I am not persuaded that the criteria referred to in Article 21.2 have been satisfied. For this reason, I need not consider further the issue of the precise relationship between paragraphs 2 and 3 of Article 21, nor how I might apply Article 21.2 so as to pay “particular attention” to the interests of Antigua in fixing the reasonable period of time for implementation by the United States in this dispute.

 

ARB.5.10.10 EC — Export Subsidies on Sugar, para. 81
(WT/DS265/33, WT/DS266/33, WT/DS283/14)

 

I do not question the need for the European Communities to consult the ACP countries under the Cotonou Agreement on “measures which may affect the interests of the ACP states”. However, the European Communities has not demonstrated why this should have an impact so as to require additional time for the European Communities to implement the recommendations and rulings of the DSB. I observe, first, that implementation by the European Communities in this dispute relates to its export subsidy commitments under the Agreement on Agriculture, whereas the ACP countries enjoy preferential market access to the European Communities’ market. Secondly, the European Communities did not provide sufficient information on what consultations have taken place with the ACP countries, nor on past experience on how consultations with ACP countries had an impact on the European Communities’ legislative process. The European Communities has not provided me with information sufficient to substantiate its assertion that consultations with the ACP Countries will necessitate additional time for implementation of the recommendations and rulings of the DSB.

 

ARB.5.10.11 EC — Export Subsidies on Sugar, para. 99
(WT/DS265/33, WT/DS266/33, WT/DS283/14)

 

… previous arbitrators have not explicitly resolved the question whether the phrase “developing country Members” in Article 21.2 refers exclusively to the implementing Member, or whether it also applies to developing country Members other than the implementing Member such as, for instance, the complaining Member, third parties to the dispute, or any developing country Member of the WTO. I consider that Article 21.2 is to be interpreted as directing an arbitrator to pay “[p]articular attention” to “matters affecting the interests” of both an implementing and complaining developing country Member or Members. I note that Brazil, the European Communities and Thailand explicitly agree on this point. In arriving at this conclusion, I agree with the arbitrator in US — Gambling that the text of Article 21.2 does not limit its scope of application to an implementing developing country Member. I also note that Articles 21.7 and 21.8 refer to circumstances in which a “matter … has been raised by a developing country Member” or “the case is one brought by a developing country Member”; this suggests that, where the drafters of the DSU wished to limit the scope of a provision to a particular category or group of developing country Members, they did so expressly.

 

ARB.5.10.12 EC — Chicken Cuts, para. 82
(WT/DS269/13, WT/DS286/15)

 

… my determination of the reasonable period of time results from my understanding of the shortest period of time possible in the Community legal order for implementing the proposed Commission Regulation amending Additional Note 7 to heading 02.10. Having arrived at the shortest period of time possible, I consider that the reasonable period of time for implementation is not additionally affected by the fact that Brazil, as a complaining Member in this dispute, is a developing country.

 

ARB.5.10.13 Colombia — Ports of Entry (Article 21.3(c)), para. 106
(WT/DS366/13)

 

… in a situation where both the implementing and the complaining Member are developing countries, the requirement provided in Article 21.2 is of little relevance, except if one party succeeds in demonstrating that it is more severely affected by problems related to its developing country status than the other party. In this case, I do not consider that either Colombia or Panama have demonstrated that the challenges they face as developing countries are relatively more severe than the ones faced by the other party.

 
ARB.5.11 Calendar of legislative body     back to top

ARB.5.11.1 US — Offset Act (Byrd Amendment), paras. 69-70
(WT/DS217/14, WT/DS234/22)

 

… The fact that at any given point in the Congressional schedule there would be a “greater opportunity” to pass legislation than at another point in time, is not a particular circumstance relevant for my determination of the reasonable period of time for implementation in this case. The obligation to implement promptly and, if impracticable to do so immediately, then within a reasonable period of time, the recommendations and rulings of the DSB is an international treaty obligation of the United States; the specific content and meaning of this international legal obligation cannot be affected by non-legal considerations related to the United States Congressional schedule.

 

This is not to say that the schedule of the United States Congress (or any other legislative body of any implementing Member) can never be a relevant particular circumstance; for instance, previous arbitrators have given consideration, in their determination of the reasonable period of time for implementation, to circumstances where a draft bill could not be introduced into Congress for a number of months because a new Congress had not yet convened at the time when the arbitration was initiated. However, these circumstances do not arise in the present proceedings. The United States has not argued that it would not be possible to pass the implementing legislation at another point in time, for instance at the end of the Congressional session when the majority of bills are enacted, or at any other time during the Congressional session.

 

ARB.5.11.2 US — Gambling, paras. 51-52
(WT/DS285/13)

 

The United States suggests that another “particular circumstance” that has a strong influence on the passage of legislation within the United States and that should, therefore, influence my determination in this proceeding, is the Congressional schedule. …

 

I do not take the view that a legislature’s schedule is totally irrelevant to the determination of the reasonable period of time for implementation of the recommendations and rulings of the DSB. Rather, it seems tome that this is a circumstance that may or may not be relevant depending on the particular case. … In this case, I do not attach much weight to this “particular circumstance”, for the reasons that follow. The United States has taken the position that it would be appropriate for the reasonable period of time to expire just before Congress begins its August 2006 recess. … I note, in this respect, that in addition to its August recess (the “Summer District Work Period”), Congress takes a number of recesses of a week or more throughout the year. In 2005, these include: a “Presidents Day District Work Period” in February; a “Spring District Work Period” in March/April around the time of Easter; a “Memorial Day District Work Period” at the end of May/early June; and an “Independence Day District Work Period” around the time of the 4th of July. In my view, the United States’ argument that a recess period spurs legislative action must apply in the same way to these recesses as it does to Congress’ August recess and to the end of a session of Congress. Thus, Congress has, throughout the year, a number of breaks that could serve to push forward the legislative process.

 
ARB.5.12 Flexibility of implementation process     back to top

ARB.5.12.1 US — 1916 Act, para. 39
(WT/DS136/11, WT/DS162/14)

 

Turning to the complexity of the United States’ legislative process, I note that the United States has explained, in sufficient detail, the multiple and time-consuming steps involved in the enactment of legislation within the specific context of the legislative system of the United States. It is generally accepted that certain of these steps are not required by law, and that the majority of these steps are not subject to compulsory minimum time limits. In other words, the United States’ legislative process, while complex, is characterized by a considerable degree of flexibility. That this flexibility is exercised to achieve the prompt passage of legislation when this is considered necessary and appropriate is revealed by the fact that bills have been passed by the United States Congress within short periods of time, using its “normal” legislative process. The United States has stated that it “will make every effort to promptly implement the DSB’s recommendations and rulings” in this case. Since this is a case where the United States has to enact a piece of legislation to bring it into compliance with its international treaty obligations under the covered agreements, the United States Congress may reasonably be expected to use all the flexibility available within its normal legislative procedures to enact the required legislation as speedily as possible.

 

ARB.5.12.2 Canada — Patent Term, paras. 63-64
(WT/DS170/10)

 

Canada has described, in detail, in its written submission the different steps of the legislative phase of its law making process. The passage of legislation requires, in essence, three readings in both Houses of the Canadian Parliament, that is, the House of Commons and the Senate. The process includes an examination of the proposed legislation by committees, which normally takes place between the second and the third reading. Once the House of Commons has considered the bill, it is sent to the Senate for its consideration. After approval by the Senate, the bill is given Royal Assent by the Governor-General. The different steps in this process and their sequence are clearly structured and defined. With respect to timing and scheduling, however, the process is flexible, as Canada acknowledged at the oral hearing. Use of this flexibility does not require recourse to extraordinary procedures. Following earlier arbitration awards, I consider this flexibility to be an important element in establishing the “reasonable period of time”.

 

Ultimately, the “reasonable period of time” appears to be a function of the priority which Canada attributes to the amendment of its Patent Act in order to bring it into conformity with its obligations under Article 33 of the TRIPS Agreement. I recognize that in all democratic societies, legislative initiatives designed to satisfy different needs and wishes compete with each other. I share, however, the view expressed in a recent arbitration award concerning another Member, which I adopt only to the extent that it fits the present case concerning Canada; it seems to me that this is the type of matter for which the Canadian Parliament should try to comply with the international obligations of Canada as soon as possible, taking advantage of the flexibility that it has in its normal legislative procedures.

 

ARB.5.12.3 EC — Tariff Preferences, para. 36
(WT/DS246/14)

 

As several previous arbitrators have noted, flexibility in a Member’s legislative system may enable the Member to effect a legislative amendment in a shorter period of time than might otherwise be possible. In the present case, India submits that the European Communities’ legislative system “is characterised by considerable flexibility”. I agree, in the sense that no mandatory minimum time periods are imposed for any particular step in the implementation process as outlined by the European Communities. The European Communities has used this flexibility to modify Regulation 2501 (modifying or extending the GSP scheme) promptly in the past. I take into account, as a relevant matter, the flexibility in the European Communities’ legislative system; but it does not, of itself, determine the question of the reasonable period of time for implementation.

 

ARB.5.12.4 US — Gambling, para. 50
(WT/DS285/13)

 

In my view, the need for prompt compliance means that it is incumbent upon the United States to use the flexibility available in its legislative process to ensure rapid implementation. The United States is not, however, obliged to have recourse to extraordinary legislative procedures.

 

ARB.5.12.5 EC — Export Subsidies on Sugar, paras. 76-77
(WT/DS265/33, WT/DS266/33, WT/DS283/14)

 

The European Communities’ legislative system is characterized by “considerable flexibility”, in the sense that no mandatory minimum time periods are imposed for any particular step in the legislative process as outlined by the European Communities. Furthermore, as acknowledged by the European Communities, it is possible that certain steps of the legislative process may proceed in parallel. Thus, for instance, the European Communities agrees that the Council may start deliberating a Commission proposal, which is still being considered by the European Parliament and the EESC. …

 

I take note of the “flexibility” available that the Council could begin its examination of the Commission proposal of 22 June 2005 before it receives the opinions of the European Parliament and the EESC. This could save some time as compared with the Council examining the Commission proposal only after receiving the opinion of the European Parliament and the EESC. I agree, however, with the European Communities that, even if the Council has begun examination of the Commission proposal prior to receiving the opinions of the European Parliament and the EESC, it will still require time to consider these opinions after it has received them. As the Arbitrator in EC — Tariff Preferences noted, “[i]f no such time were provided for this, it would defeat the purpose of seeking the opinions.”

 
ARB.5.13 Relevance of legislative action on other measures     back to top

ARB.5.13.1 US — Gambling, para. 48
(WT/DS285/13)

 

… I am … unable to determine whether Congress’ inability to pass previous bills was related to their complexity — a relevant particular circumstance — or to their contentiousness — something that would not constitute a relevant particular circumstance for purposes of my determination.

 

ARB.5.13.2 US — Gambling, paras. 53-54
(WT/DS285/13)

 

Antigua emphasizes the speed with which the 109th Congress has passed legislation to date, pointing out that this Congress adopted 15 measures through 19 June 2005. …

 

… Given that the 109th Congress has only been in session for half a year, it follows that any law that it has adopted during that time must have been adopted in less than half a year. Taken in isolation, however, that fact is not probative of the average length of time that it takes to pass legislation, nor of the relationship between the content of specific legislation and the length of time that is required for it to be passed. In the absence of any additional context that would allow me to evaluate the significance of the time taken to pass the 15 measures cited by Antigua, I do not consider this to be a particular circumstance relevant to my determination.

 

ARB.5.13.3 US — Gambling, para. 55
(WT/DS285/13)

 

Antigua also points to the fact that the United States Congress took just five months to pass the 2000 amendments to the IHA. I take note of this fact. Given that these amendments relate to the same field as the one in which the United States intends to implement in this case, I consider it relevant that Congress was able to act so expeditiously on a prior occasion.

 

ARB.5.13.4 US — Stainless Steel (Mexico) (Article 21.3(c)), para. 52
(WT/DS344/15)

 

… I recognize that both the legislative and administrative means of implementation proposed by the United States fall within this range of permissible means that are capable of achieving the elimination of simple zeroing “as such” in periodic reviews. …

 

ARB.5.13.5 US — Stainless Steel (Mexico) (Article 21.3(c)), para. 53
(WT/DS344/15)

 

… It is widely accepted that implementation through administrative action usually takes a shorter period of time than implementation through legislative action. In the light of the parties’ responses to questioning at the oral hearing, I am not persuaded that the United States is not in a position to eliminate the simple zeroing methodology in periodic reviews by administrative action, or that legislative implementation would necessarily be more effective than administrative implementation. In these circumstances, I turn to the period of time within which administrative action eliminating the methodology of simple zeroing in periodic reviews could be completed.

 
ARB.5.14 Existence of previous disputes relevant for determination of reasonable period of time     back to top

ARB.5.14.1 US — Stainless Steel (Mexico) (Article 21.3(c)), paras. 63-64
(WT/DS344/15)

 

Finally, Mexico points out that several WTO disputes resemble the present dispute in that they also concern the simple zeroing methodologies employed by the United States, and have led to DSB recommendations and rulings on this issue. …

 

The disputes to which Mexico refers are indeed distinct from the present one. Those disputes involved different complainants and were at different procedural stages of WTO dispute settlement, including proceedings under Article 21.5 of the DSU. Given this context, I consider that the particular circumstances of those disputes should be attributed limited relevance to my determination of the reasonable period of time in this arbitration.

 


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