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ON THIS PAGE:
> Basic rationale behind findings and conclusions.
See also
Claims and Arguments (C.1);
Claims and Panel Reasoning (C.2);
Standard of Review (S.7)
> Panel findings not appealed. See also Review of Implementation of DSB Rulings,
Article 21.5 of the DSU
— Effect of DSB rulings in the original dispute (R.4.3)
> Separate panel reports
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P.1.1 Basic rationale behind findings and conclusions. See
also Claims and Arguments (C.1); Claims and Panel Reasoning
(C.2);
Standard of Review (S.7) back to top
P.1.1.1 Korea — Alcoholic Beverages, paras. 166, 168
(WT/DS75/AB/R, WT/DS84/AB/R)
Korea claims that the Panel has failed to fulfil its obligation under
Article 12.7 of the DSU to set out the basic rationale behind its
findings and recommendations. …
…
In this case, we do not consider it either necessary, or desirable,
to attempt to define the scope of the obligation provided for in Article
12.7 of the DSU. It suffices to state that the Panel has set out a
detailed and thorough rationale for its findings and recommendations in
this case. The Panel went to some length to take account of competing
considerations and to explain why, nonetheless, it made the findings and
recommendations it did. …
P.1.1.2 Chile — Alcoholic Beverages, para. 78
(WT/DS87/AB/R, WT/DS110/AB/R)
… In our view, in this case, the Panel did “set out” a “basic
rationale” for its finding and recommendation on the issue of “not
similarly taxed”, as required by Article 12.7 of the DSU. The Panel
identified the legal standard it applied, examined the relevant facts,
and provided reasons for its conclusion that dissimilar taxation existed. …
P.1.1.3 Argentina — Footwear (EC), para. 149
(WT/DS121/AB/R)
… In this case, the Panel conducted extensive factual and
legal analyses of the competing claims made by the parties, set out
numerous factual findings based on detailed consideration of the
evidence before the Argentine authorities as well as other evidence
presented to the Panel, and provided extensive explanations of how and why it reached its factual and legal conclusions. Although
Argentina may not agree with the rationale provided by the Panel, and we
do not ourselves agree with all of its reasoning, we have no doubt that
the Panel set out, in its Report, a “basic rationale” consistent
with the requirements of Article 12.7 of the DSU.
P.1.1.4 Mexico — Corn Syrup (Article 21.5
— US), paras. 106-109
(WT/DS132/AB/RW)
… Article 12.7 establishes a minimum standard for the reasoning
that panels must provide in support of their findings and
recommendations. Panels must set forth explanations and reasons
sufficient to disclose the essential, or fundamental, justification for
those findings and recommendations.
… the duty of panels under Article 12.7 of the DSU to provide a
“basic rationale” reflects and conforms with the principles of
fundamental fairness and due process that underlie and inform the
provisions of the DSU. In particular, in cases where a Member has been
found to have acted inconsistently with its obligations under the
covered agreements, that Member is entitled to know the reasons for such
finding as a matter of due process. In addition, the requirement to set
out a “basic rationale” in the panel report assists such Member to
understand the nature of its obligations and to make informed decisions
about: (i) what must be done in order to implement the eventual rulings
and recommendations made by the DSB; and (ii) whether and what to
appeal. Article 12.7 also furthers the objectives, expressed in Article
3.2 of the DSU, of promoting security and predictability in the
multilateral trading system and of clarifying the existing provisions of
the covered agreements, because the requirement to provide “basic”
reasons contributes to other WTO Members’ understanding of the nature
and scope of the rights and obligations in the covered agreements.
… Whether a panel has articulated adequately the “basic
rationale” for its findings and recommendations must be determined on
a case-by-case basis, taking into account the facts of the case, the
specific legal provisions at issue, and the particular findings and
recommendations made by a panel. Panels must identify the relevant facts
and the applicable legal norms. In applying those legal norms to the
relevant facts, the reasoning of the panel must reveal how and why the
law applies to the facts. In this way, panels will, in their reports,
disclose the essential or fundamental justification for their findings
and recommendations.
This does not, however, necessarily imply that Article 12.7 requires
panels to expound at length on the reasons for their findings and
recommendations. We can, for example, envisage cases in which a panel’s
“basic rationale” might be found in reasoning that is set out in
other documents, such as in previous panel or Appellate Body reports —
provided that such reasoning is quoted or, at a minimum, incorporated by
reference. Indeed, a panel acting pursuant to Article 21.5 of the DSU
would be expected to refer to the initial panel report, particularly in
cases where the implementing measure is closely related to the original
measure, and where the claims made in the proceeding under Article 21.5
closely resemble the claims made in the initial panel proceedings.
P.1.1.5 Mexico — Corn Syrup (Article 21.5
— US), paras. 124,
126
(WT/DS132/AB/RW)
Having regard to these circumstances, we are of the view that the
Panel Report, read together with the original panel report, leaves no
doubt about the reasons for the Panel’s additional finding under
Article 3.1 of the Anti-Dumping Agreement. …
…
We wish to add that for purposes of transparency and fairness to the
parties, even a panel proceeding under Article 21.5 of the DSU should
strive to present the essential justification for its findings and
recommendations in its own report. In this case, in particular, we
consider that the Panel’s finding under Article 3.1 of the Anti-Dumping
Agreement would have been better supported by a direct quotation
from or, at least, an explicit reference to, the relevant reasoning set
out in the original panel report.
P.1.1.6 US — Steel Safeguards, paras. 503-504
(WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R)
… Based on our review of the Panel’s reasoning, it appears to
us that the Panel considered in detail the evidence that was before the
USITC, and provided detailed explanations of how and why it concluded
that the USITC had failed to demonstrate, through a reasoned and
adequate explanation, that the alleged “unforeseen developments” resulted
in increased imports of each product subject to a safeguard
measure. …
In our view, in making these statements, the Panel has sufficiently
set out in its Reports the “basic rationale” for its finding that
the USITC failed to explain how, though “plausible”, the “unforeseen
developments” identified in the report in fact resulted in
increased imports of the specific products subject to the safeguard
measures at issue.
P.1.1.7 US — Softwood Lumber VI (Article 21.5
— Canada), para.
141
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
We note that, having reversed these findings on the grounds that the
Panel articulated and applied an incorrect standard of review to the
Section 129 Determination, we need not examine Canada’s claim that the
Panel failed to satisfy its duty, under Article 12.7 of the DSU, to
provide a “basic rationale” for its findings and conclusions.
P.1.1.8 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5
— Argentina), para. 183 and footnote 383
(WT/DS268/AB/RW)
… The Panel’s explanation is brief, but it is sufficient to
convey that the Panel considered Argentina’s request and that, in the
light of the discretionary nature of the authority to make a suggestion, the Panel declined to exercise
that discretion. The discretionary nature of the authority to make a
suggestion under Article 19.1 must be kept in mind when examining the
sufficiency of a panel’s decision not to exercise such authority.
However, it should not relieve a panel from engaging with the arguments
put forward by a party in support of such a request. In the present
case, Argentina offered several reasons in support of its request for a
suggestion. Although it would have been advisable for the Panel to
articulate more clearly the reasons why it declined to exercise its
discretion to make a suggestion, this does not mean that Panel’s
exercise of its discretion was improper, and, thus, even assuming arguendo
that Articles 11 and 12.7 were applicable to a request for
suggestion, we do not consider that, in the circumstances of this case,
the Panel failed to fulfil its duties under those provisions.383
P.1.1.9 Chile — Price Band System (Article 21.5
— Argentina),
paras. 243, 247
(WT/DS207/AB/RW)
… we briefly review the duties that Article 12.7 of the DSU
imposes on a panel in the event that the parties do not reach a mutually
satisfactory solution to their dispute. Specifically, a panel is to “submit
its findings in the form of a written report to the DSB” and,
according to the second sentence of Article 12.7, “the report of a
panel shall set out the findings of fact, the applicability of relevant
provisions and the basic rationale behind any findings and
recommendations that it makes”. The Appellate Body has explained that
this provision “establishes a minimum standard for the reasoning that
panels must provide in support of their findings and recommendations”,
namely, that the explanations and reasons provided must suffice “to
disclose the essential, or fundamental, justification for those findings
and recommendations”. Panels need not “expound at length on the
reasons for their findings and recommendations” in order to satisfy
their obligations under Article 12.7. Moreover, panels may refer to
reasoning from other sources …
…
… Chile’s arguments [are] that the Panel’s approach in this
regard constituted an erroneous application of footnote 1 and Article
4.2 of the Agreement on Agriculture, as well as a failure to
comply with Article 11 of the DSU. Chile’s arguments under Article
12.7 of the DSU challenge the same elements of the Panel’s substantive
analysis using a different legal basis, but without identifying how that
analysis lacks a basic rationale. In fact, Chile’s own arguments
disclose that the Panel provided ample reasoning in support of its
findings. Moreover, our examination has shown that the Panel analysed
the measure at issue in detail, and explained why it found the measure
to be similar to a variable import levy and to a minimum import price.
The mere fact that Chile disagrees with the substance of that reasoning
cannot suffice to establish a violation of Article 12.7.
Duty to address issues. See Completion of the Legal
Analysis by the Appellate Body (C.4); Judicial Economy
(J.1);
Jurisdiction (J.2); Objections (O.1)
P.1.2 Panel findings not appealed. See also Review of
Implementation of DSB Rulings, Article 21.5 of the DSU — Effect of DSB
rulings in the original dispute (R.4.3) back to top
P.1.2.1 Canada — Periodicals, footnote 28 to p. 19, DSR 1997:I,
p. 449 at 464
(WT/DS31/AB/R)
… a Panel finding that has not been specifically appealed in a
particular case should not be considered to have been endorsed by the
Appellate Body. Such a finding may be examined by the Appellate Body
when the issue is raised properly in a subsequent appeal.
P.1.3 Separate panel reports
back to top
P.1.3.1 US — Offset Act (Byrd Amendment), para. 311
(WT/DS217/AB/R, WT/DS234/AB/R)
Having made these observations, we note that Article 9.2 must not be
read in isolation from other provisions of the DSU, and without taking
into account the overall object and purpose of that Agreement. The
overall object and purpose of the DSU is expressed in Article 3.3 of
that Agreement which provides, relevantly, that the “prompt settlement”
of disputes is “essential to the effective functioning of the WTO”.
If the right to a separate panel report under Article 9.2 were “unqualified”,
this would mean that a panel would have the obligation to submit a
separate panel report, pursuant to the request of a party to the
dispute, at any time during the panel proceedings. Moreover, a
request for such a report could be made for whatever reason — or
indeed, without any reason — even on the day that immediately
precedes the day the panel report is due to be circulated to WTO Members
at large. Such an interpretation would clearly undermine the overall
object and purpose of the DSU to ensure the “prompt settlement” of
disputes.
P.1.3.2 US — Offset Act (Byrd Amendment), paras. 315-316
(WT/DS217/AB/R, WT/DS234/AB/R)
… we note that the first sentence in Article 9.2 provides that it
is for the panel to “organize its examination and present its findings
in such a manner that the rights which the parties to the dispute would
have enjoyed had separate panels examined the complaints are in no way
impaired.” Our comments in EC — Hormones about panels’
discretion in dealing with procedural issues are pertinent here:
… the DSU and in particular its Appendix 3, leave panels a margin of
discretion to deal, always in accordance with due process, with
specific situations that may arise in a particular case and that are not
explicitly regulated. Within this context, an appellant requesting the
Appellate Body to reverse a panel’s ruling on matters of procedure must
demonstrate the prejudice generated by such legal ruling. (emphasis
added)
In our view, the Panel acted within its “margin of discretion”
by denying the United States’ request for a separate panel report. We
do not believe that we should lightly disturb panels’ decisions on
their procedure, particularly in cases such as the one at hand, in which
the Panel’s decision appears to have been reasonable and in accordance
with due process. We observe that, on appeal, the United States is not
claiming that it suffered any prejudice from the denial of its request
for a separate panel report. We also note that the first sentence of
Article 9.2 refers to the rights of all the parties to the dispute. The
Panel correctly based its decision on an assessment of the rights of all
the parties, and not of one alone.
Status of GATT panel reports. See Review of Implementation
of DSB Rulings, Article 21.5 of the DSU — Effect of DSB rulings in the
original dispute (R.4.3); Status of Panel and Appellate Body Reports
(S.8)
383. In the light of the above, we need not decide here whether the
requirements of Articles 11 and 12.7 are applicable to a panel’s
consideration of a request for a suggestion pursuant to Article 19.1 of
the DSU. back to text
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