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S.7.1 General back to top
S.7.1.1 EC — Hormones, para. 114
(WT/DS26/AB/R, WT/DS48/AB/R)
… Only Article 17.6(i) of the Anti-Dumping Agreement has
language on the standard of review to be employed by panels engaged in
the “assessment of the facts of the matter”. We find no indication
in the SPS Agreement of an intent on the part of the Members to
adopt or incorporate into that Agreement the standard set out in Article
17.6(i) of the Anti-Dumping Agreement. Textually, Article 17.6(i)
is specific to the Anti-Dumping Agreement.
S.7.1.2 Argentina — Footwear (EC), para. 118
(WT/DS121/AB/R)
We have stated, on more than one occasion, that, for all but one of
the covered agreements, Article 11 of the DSU sets forth the appropriate
standard of review for panels. The only exception is the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994, in which a specific provision, Article 17.6, sets out a
special standard of review for disputes arising under that Agreement.
S.7.1.3 Argentina — Footwear (EC), para. 120
(WT/DS121/AB/R)
… The Agreement on Safeguards, like the Agreement on the
Application of Sanitary and Phytosanitary Measures, is silent as to
the appropriate standard of review. Therefore, Article 11 of the DSU,
and, in particular, its requirement that “… a panel should make an
objective assessment of the matter before it, including an objective
assessment of the facts of the case and the applicability of and
conformity with the relevant covered agreements”, sets forth the
appropriate standard of review for examining the consistency of a
safeguard measure with the provisions of the Agreement on Safeguards.
S.7.1.4 US — Lead and Bismuth II, para. 49
(WT/DS138/AB/R)
… [the Declaration on Dispute Settlement Pursuant to the
Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994 or Part V of the Agreement on Subsidies and
Countervailing Measures (the “Declaration”)] does not
impose an obligation to apply the standard of review contained in
Article 17.6 of the Anti-Dumping Agreement to disputes involving
countervailing duty measures under Part V of the SCM Agreement.
The Declaration is couched in hortatory language; it uses the
words “Ministers recognize”. Furthermore, the Declaration merely
acknowledges “the need for the consistent resolution of disputes
arising from anti-dumping and countervailing duty measures”. It does
not specify any specific action to be taken. In particular, it does not
prescribe a standard of review to be applied.
S.7.1.5 US — Hot-Rolled Steel, para. 54
(WT/DS184/AB/R)
Article 11 of the DSU imposes upon panels a comprehensive obligation
to make an “objective assessment of the matter”, an obligation which
embraces all aspects of a panel’s examination of the “matter”,
both factual and legal. Thus, panels make an “objective assessment of
the facts”, of the “applicability” of the covered agreements, and
of the “conformity” of the measure at stake with those covered
agreements. Article 17.6 is divided into two separate sub-paragraphs,
each applying to different aspects of the panel’s examination of the
matter. The first sub-paragraph covers the panel’s “assessment
of the facts of the matter”, whereas the second covers its
“interpret[ation of] the relevant provisions”
(emphasis added). The structure of Article 17.6, therefore, involves a
clear distinction between a panel’s assessment of the facts and its
legal interpretation of the Anti-Dumping Agreement.
S.7.1.6 US — Hot-Rolled Steel, para. 55
(WT/DS184/AB/R)
In considering Article 17.6(i) of the Anti-Dumping Agreement,
it is important to bear in mind the different roles of panels and
investigating authorities. Investigating authorities are charged, under
the Anti-Dumping Agreement, with making factual determinations
relevant to their overall determination of dumping and injury. Under
Article 17.6(i), the task of panels is simply to review the
investigating authorities’ “establishment” and “evaluation” of
the facts. To that end, Article 17.6(i) requires panels to make an “assessment
of the facts”. The language of this phrase reflects closely
the obligation imposed on panels under Article 11 of the DSU to make an
“objective assessment of the facts”. Thus the text of
both provisions requires panels to “assess” the facts and this, in
our view, clearly necessitates an active review or examination of the
pertinent facts. Article 17.6(i) of the Anti-Dumping Agreement does
not expressly state that panels are obliged to make an assessment of the
facts which is “objective”. However, it is inconceivable that
Article 17.6(i) should require anything other than that panels make an objective
“assessment of the facts of the matter”. In this respect, we see
no “conflict” between Article 17.6(i) of the Anti-Dumping
Agreement and Article 11 of the DSU.
S.7.1.7 US — Hot-Rolled Steel, para. 62
(WT/DS184/AB/R)
… although the second sentence of Article 17.6(ii) of the Anti-Dumping
Agreement imposes obligations on panels which are not found in the
DSU, we see Article 17.6(ii) as supplementing, rather than replacing,
the DSU, and Article 11 in particular. Article 11 requires panels to
make an “objective assessment of the matter” as a whole. Thus, under
the DSU, in examining claims, panels must make an “objective
assessment” of the legal provisions at issue, their “applicability”
to the dispute, and the “conformity” of the measures at issue with
the covered agreements. Nothing in Article 17.6(ii) of the Anti-Dumping
Agreement suggests that panels examining claims under that Agreement
should not conduct an “objective assessment” of the legal provisions
of the Agreement, their applicability to the dispute, and the conformity
of the measures at issue with the Agreement. Article 17.6(ii) simply
adds that a panel shall find that a measure is in conformity with the Anti-Dumping
Agreement if it rests upon one permissible interpretation of that
Agreement.
S.7.1.8 US — Cotton Yarn, para. 68
(WT/DS192/AB/R)
Article 11 of the DSU lays down the standard of review for panels in
disputes under the covered agreements …
S.7.1.9 US — Countervailing Duty Investigation on DRAMS, para.
182
(WT/DS296/AB/R)
Article 11 of the DSU sets out the proper standard of review to be
applied by panels when examining Members’ subsidy determinations. …
S.7.1.10 US — Countervailing Duty Investigation on DRAMS, para.
184
(WT/DS296/AB/R)
… The standard of review articulated by the Appellate Body in the
context of agency determinations under [the Agreement on Safeguards]
is instructive for cases under the SCM Agreement that also
involve agency determinations. Nevertheless, we recall that an “objective
assessment” under Article 11 of the DSU must be understood in the
light of the obligations of the particular covered agreement at issue in
order to derive the more specific contours of the appropriate standard
of review. In this respect, we are especially mindful, in this appeal,
of Articles 12, 19, and 22 of the SCM Agreement.
S.7.1.11 US — Softwood Lumber VI (Article 21.5 — Canada),
paras. 91-92
(WT/DS277/AB/RW,
WT/DS277/AB/RW/Corr.1)
As regards the standard of review to be applied when a single injury
determination is challenged under both … the Anti-Dumping Agreement
and the SCM Agreement, Canada’s appeal focuses on the
standard of review under Article 11 of the DSU. The United States
considers that Canada’s appeal deliberately downplays the significance
of Article 17.6 of the Anti-Dumping Agreement, but the United
States does not request us to give “separate consideration” to the
issues on appeal as a result of that provision. …
We need not, in this appeal, answer the question of whether there may
ever be circumstances in which separate consideration of a single injury
determination would be required in the light of the standards of review
under the Anti-Dumping Agreement and the SCM Agreement. In
our view, this is not such a case, and neither of the participants
requests such separate consideration. We also wish to add that whether
such separate consideration is called for may depend not only on Article
11 of the DSU and Article 17.6 of the Anti-Dumping Agreement, but
also on the substantive provisions of the Anti-Dumping Agreement and
SCM Agreement that are at issue in the dispute. This is because,
as the Appellate Body has previously observed, and as discussed further
below, the proper standard of review to be applied by a panel must also
be understood in the light of the specific obligations of the relevant
agreements that are at issue in the case.
S.7.1.12 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
S.7.1.13 US
— Stainless Steel (Mexico), para. 76
(WT/DS344/AB/R)
… we recall that the standard of review applicable to disputes
under the Anti-Dumping Agreement is set out in both Article 11
of the DSU and Article 17.6 of the Anti-Dumping Agreement. …
In our analysis, we bear in mind that there could be more than one
permissible interpretation of a provision of the Anti-Dumping
Agreement.
S.7.2 Article 11 of the DSU — Objective assessment of the matter back to top
S.7.2.1 EC
— Hormones, paras. 116-119
(WT/DS26/AB/R, WT/DS48/AB/R)
… Article 11 of the DSU bears directly on this matter and, in
effect, articulates with great succinctness but with sufficient clarity
the appropriate standard of review for panels in respect of both the
ascertainment of facts and the legal characterization of such facts
under the relevant agreements. …
So far as fact-finding by panels is concerned, their activities are
always constrained by the mandate of Article 11 of the DSU: the
applicable standard is neither de novo review as such, nor “total
deference”, but rather the “objective assessment of the facts”.
Many panels have in the past refused to undertake de novo review,
wisely, since under current practice and systems, they are in any case
poorly suited to engage in such a review. On the other hand, “total
deference to the findings of the national authorities”, it has been
well said, “could not ensure an ‘objective assessment’ as foreseen
by Article 11 of the DSU”.
In so far as legal questions are concerned
— that is, consistency
or inconsistency of a Member’s measure with the provisions of the
applicable agreement
— a standard not found in the text of the SPS
Agreement itself cannot absolve a panel (or the Appellate Body) from
the duty to apply the customary rules of interpretation of public
international law. It may be noted that the European Communities
refrained from suggesting that Article 17.6 of the Anti-Dumping
Agreement in its entirety was applicable to the present case.
Nevertheless, it is appropriate to stress that here again Article 11 of
the DSU is directly on point, requiring a panel to “make an objective
assessment of the matter before it, including an objective assessment of
the facts of the case and the applicability of and conformity with the
relevant covered agreements… ”.
We consider, therefore, that the issue of failure to apply an
appropriate standard of review, raised by the European Communities,
resolves itself into the issue of whether or not the Panel, in making
the above and other findings referred to and appealed by the European
Communities, had made an “objective assessment of the matter before
it, including an objective assessment of the facts … ”. …
S.7.2.2 EC
— Poultry, para. 133
(WT/DS69/AB/R)
An allegation that a panel has failed to conduct the “objective
assessment of the matter before it” required by Article 11 of the DSU
is a very serious allegation. Such an allegation goes to the very core
of the integrity of the WTO dispute settlement process itself. …
S.7.2.3 EC — Poultry, para. 135
(WT/DS69/AB/R)
… Just as a panel has the discretion to address only those claims
which must be addressed in order to dispose of the matter at issue
in a dispute, so too does a panel have the discretion to address only
those arguments it deems necessary to resolve a particular claim.
So long as it is clear in a panel report that a panel has reasonably
considered a claim, the fact that a particular argument relating to that
claim is not specifically addressed in the “Findings” section of a
panel report will not, in and of itself, lead to the conclusion that
that panel has failed to make the “objective assessment of the matter
before it” required by Article 11 of the DSU.
S.7.2.4 Chile — Price Band System, para. 173
(WT/DS207/AB/R,
WT/DS207/AB/R/Corr.1)
… Because it made a finding on a provision that was not before it,
the Panel, therefore, did not make an objective assessment of the
matter before it, as required by Article 11. Rather, the Panel made
a finding on a matter that was not before it. In doing so, the
Panel acted ultra petita and inconsistently with Article 11 of
the DSU.
S.7.2.5 US — Gambling, para. 273
(WT/DS285/AB/R,
WT/DS285/AB/R/Corr.1)
… as part of their duties, under Article 11 of the DSU,… panels
must ensure that the due process rights of parties to a dispute are
respected. A panel may act inconsistently with this duty if it addresses
a defence that a responding party raised at such a late stage of the
panel proceedings that the complaining party had no meaningful
opportunity to respond to it. To this end, panels are endowed with “sufficient
flexibility” in their working procedures, by virtue of Article 12.2 of
the DSU, to regulate panel proceedings and, in particular, to adjust
their timetables to allow for additional time to respond or for
additional submissions where necessary.
S.7.2.6 US — Gambling, paras. 281-282
(WT/DS285/AB/R, WT/DS285/AB/R/Corr.1)
… a panel enjoys … discretion [freely to use arguments submitted
by any of the parties
— or to develop its own legal reasoning
— to
support its own findings and conclusions] only with respect to specific
claims that are properly before it, for otherwise it would be
considering a matter not within its jurisdiction. Moreover, when a panel
rules on a claim in the absence of evidence and supporting arguments, it
acts inconsistently with its obligations under Article 11 of the DSU.
In the context of affirmative defences, then, a responding party must
invoke a defence and put forward evidence and arguments in support of
its assertion that the challenged measure satisfies the requirements of
the defence. When a responding party fulfils this obligation, a panel
may rule on whether the challenged measure is justified under the
relevant defence, relying on arguments advanced by the parties or
developing its own reasoning. The same applies to rebuttals. A panel may
not take upon itself to rebut the claim (or defence) where the
responding party (or complaining party) itself has not done so.
S.7.2.7 US
— Gambling, paras. 342-344
(WT/DS285/AB/R, WT/DS285/AB/R/Corr.1)
In deciding to assess whether the measures satisfied the requirements
of the chapeau, the Panel explained that, even though such an
examination was “not necessary”, it wanted “to assist the parties
in resolving the underlying dispute in this case”. Antigua alleges
that the Panel acted inconsistently with the Appellate Body’s decision
in Korea
— Various Measures on Beef
in determining whether the
Wire Act, the Travel Act, and the IGBA meet the requirements of the
chapeau after having found that they were not provisionally justified.
… [the statement by the Appellate Body at paragraph 156 of Korea
— Various Measures on Beef] does not impose a requirement on
panels to stop evaluating a responding party’s defence once they have
determined that a challenged measure is not provisionally justified
under one of the paragraphs of the general exception provision.
Provided that it complies with its duty to assess a matter
objectively, a panel enjoys the freedom to decide which legal issues it
must address in order to resolve a dispute. Moreover, in some instances,
a panel’s decision to continue its legal analysis and to make factual
findings beyond those that are strictly necessary to resolve the dispute
may assist the Appellate Body should it later be called upon to complete
the analysis, as, for example, in this case.
S.7.2.8 Dominican Republic — Import and Sale of Cigarettes,
para. 105
(WT/DS302/AB/R)
Article 11 of the DSU provides that a panel “should make an
objective assessment of the matter before it, including an objective
assessment of the facts of the case and the applicability of and
conformity with the relevant covered agreements”. The Appellate Body
underlined in Chile — Price Band System
that “Article 11
obliges panels not only to make ‘an objective assessment of the facts
of the case’, but also ‘an objective assessment of the matter before
it’ ”. The “matter” is constituted by both the facts of the case
(and, in particular, the specific measures at issue) as well as the
legal claims raised. The corollary is that a panel is not entitled to
make an assessment of a matter that is not before it, for
example, by making findings on a claim not raised by the complainant.
S.7.2.9 Dominican Republic
— Import and Sale of Cigarettes,
para. 125
(WT/DS302/AB/R)
In any event, we note that there is no obligation upon a panel to
consider each and every argument put forward by the parties in support
of their respective cases, so long as it completes an objective
assessment of the matter before it, in accordance with Article 11 of the
DSU.
S.7.2.10 US — Countervailing Duty Investigation on DRAMS, para.
174
(WT/DS296/AB/R)
… The issue raised by the United States’ appeal, therefore, is
not whether the evidence was contained in the record, but rather,
whether the evidence contained in the record should have “indicate[d]”
to the USDOC “that three of the four creditors exercising appraisal
rights under option 3 actually exercised their right to seek mediation
in respect of the October 2001 restructuring”.
S.7.2.11 US — Countervailing Duty Investigation on DRAMS,
paras.
176-179
(WT/DS296/AB/R)
We turn now to the evidence relied upon by the Panel. The Panel
pointed to a single paragraph in Hynix’s 2001 Audit Report, which was
on the record of the investigation, as the basis for finding that the
USDOC should have been aware that three creditors had resorted to
mediation …
This excerpt does not indicate explicitly that three creditors
participated in a mediation. Nor does it state that a mediation in fact
occurred, or that it was the mediation … that resulted in the payout
of over 80 billion won.… Thus, we do not read the record
evidence as supporting the Panel’s conclusion that the USDOC should
have understood the “rais[ing]” of “objections” to include the
recourse to mediation by three Hynix creditors.
… faced with no mention of mediation in response to questions, and
given the wording of Article 29(5) of the CRPA, the USDOC, in our view,
should not have been expected to read Hynix’s 2001 Audit Report as
indicating the recourse to mediation by three Hynix creditors.
In our view, therefore, the Panel erroneously concluded that the
USDOC should have made a factual inference from evidence on the record
that would not reasonably have suggested such an inference. We therefore
find that the Panel failed to “make an objective assessment of
the matter before it”, as required by Article 11 of the DSU, by
finding … that “the mediation provisions [of the CRPA] had actually
been invoked by three creditors in respect of the October 2001
restructuring”, in the absence of supporting evidence on the record of
the underlying investigation.
S.7.2.12 Mexico
— Taxes on Soft Drinks, para. 51
(WT/DS308/AB/R)
… Article 11 also requires that a panel “make such other findings
as will assist the DSB in making the recommendations or in giving the
rulings provided for in the covered agreements”. It is difficult to
see how a panel would fulfil that obligation if it declined to exercise
validly established jurisdiction and abstained from making any finding
on the matter before it.
S.7.2.13 US — Zeroing (EC), para. 196
(WT/DS294/AB/R,
WT/DS294/AB/R/Corr.1)
… a panel must not lightly assume the existence of a “rule or
norm” constituting a measure of general and prospective application,
especially when it is not expressed in the form of a written document.
If a panel were to do so, it would act inconsistently with its
obligations under Article 11 of the DSU to “make an objective
assessment of the matter” before it.
S.7.2.14 US — Zeroing (EC),
paras. 253-254, 256, 258, 260-261
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)
The Appellate Body has previously underscored that a claim under
Article 11 of the DSU is a “very serious allegation” and that:
[a] challenge under Article 11 of the DSU must not be vague or
ambiguous. On the contrary, such a challenge must be clearly articulated
and substantiated with specific arguments. An Article 11 claim is not to
be made lightly, or merely as a subsidiary argument or claim in support
of a claim of a panel’s failure to construe or apply correctly a
particular provision of a covered agreement. [Appellate Body Report, US
— Steel Safeguards, para. 498]
We consider this finding apt and instructive in this case. We do not
believe that the European Communities has “substantiated its claim”
that the Panel acted inconsistently with Article 11. Its allusion to “insufficient
reasoning” by the Panel, or “internal inconsistency”, is vague and
mentioned only in passing in its appellant’s submission. …
…
… As we understand it, the European Communities appears to suggest
that the Panel “made the case” for the United States by asking these
questions of the United States.
…
In the present case, the European Communities has not explained why
the questions posed by the Panel would have been inappropriate for
purposes of “clarify[ing] and distil[ling] the legal arguments”
advanced by the parties in this dispute.
…
… The “ample and extensive” nature of a panel’s authority “to
undertake and control the process” by which it informs itself of the
relevant facts of the dispute and of the legal norms and principles
applicable to a case, would appear to suggest that a panel also has
broad authority to pose such questions to the parties as it deems
relevant for purposes of considering the issues that are before it. The
asking of questions is, after all, part and parcel of the investigative
function and duty of panels.
We note, moreover, that, when referring, in Japan —
Agricultural
Products II, to “making the case” for the complaining party, the
Appellate Body was speaking to a situation in which a panel makes a
ruling “in favour of a complaining party which has not established a prima
facie case of inconsistency based on specific legal claims asserted
by it”. In contrast, asking questions to clarify the meaning of an
argument does not, in our view, amount to “making the case”.
S.7.2.15 US — Oil Country Tubular Goods Sunset Reviews (Article
21.5
— Argentina), para. 172
(WT/DS268/AB/RW)
… Argentina considers that the Panel failed to fulfil properly its
duties under Article 11 of the DSU by “subordinat[ing] the actual
treaty text of Articles 11.3 and 11.4, and the disposition of Argentina’s
claims under these provisions, to broader, ‘systemic’ considerations
of the WTO dispute settlement system”. We have found that Articles
11.3 and 11.4 do not address specifically whether an investigating
authority may collect additional facts relating to the initial review
period when making a redetermination of likelihood of dumping.
Therefore, the Panel did not subordinate the text of these provisions to
broader systemic considerations of the WTO dispute settlement system
when it found that the USDOC could develop a new evidentiary basis.
S.7.2.16 Chile — Price Band System (Article 21.5
— Argentina),
para. 229
(WT/DS207/AB/RW)
Article 11 of the DSU deals with the function of panels and assigns
to them certain duties, inter alia, to “make an objective
assessment of the matter before it, including an objective assessment of
the facts of the case and the applicability of and conformity with the
relevant covered agreements”. The Appellate Body has considered these
duties on many occasions, and has consistently recognized that Article
11 affords panels a margin of discretion in their assessment of the
facts. This margin includes the discretion to identify which evidence
the panel considers most relevant in making its findings, and to
determine how much weight to attach to the various items of evidence
placed before it by the parties to the case. A panel does not commit
error simply because it declines to accord to the evidence the weight
that one of the parties believes should be accorded to it. …
S.7.2.17 Chile — Price Band System (Article 21.5
— Argentina),
para. 238
(WT/DS207/AB/RW)
… We also recall that a claim that a panel failed to comply with
its duties under Article 11 of the DSU must stand by itself and should
not be made merely as a subsidiary argument or claim in support of a
claim that a panel failed to apply correctly a provision of the covered
agreements.
S.7.2.18 Japan — DRAMs (Korea),
paras. 184-185
(WT/DS336/AB/R,
WT/DS336/AB/R/Corr.1)
We have found that the Panel erred in its interpretation and
application of Articles 1.1(b) and 14 of the SCM Agreement because
it did not identify properly the appropriate market benchmark to be
applied under those provisions. At the same time, we have found that the
Panel did not err in finding that the JIA’s determination “erroneously
overstate[d] the amount of benefit conferred on the recipient”.
Moreover, based on our review of the Panel’s reasoning and the Panel
record, we find that the Panel did not act inconsistently with
its obligations under Article 11 of the DSU in concluding that Japan
improperly calculated the amount of benefit conferred by the October
2001 and December 2002 Restructurings. As the Appellate Body has
previously found: “not every error of law or incorrect legal
interpretation attributed to a panel constitutes a failure on the part
of the panel to make an objective assessment of the matter before it.
Therefore, we uphold, albeit for different reasons, the Panel’s
finding, in paragraphs 7.316 and 8.2(c) of the Panel Report, that the
JIA calculated the amount of benefit conferred on Hynix by the October
2001 and December 2002 Restructurings inconsistently with Articles
1.1(b) and 14 of the SCM Agreement.
S.7.2.19 US
— Stainless Steel (Mexico), para. 162
(WT/DS344/AB/R)
We are deeply concerned about the Panel’s decision to depart from
well-established Appellate Body jurisprudence clarifying the
interpretation of the same legal issues. The Panel’s approach has
serious implications for the proper functioning of the WTO dispute
settlement system, as explained above. Nevertheless, we consider that
the Panel’s failure flowed, in essence, from its misguided
understanding of the legal provisions at issue. Since we have corrected
the Panel’s erroneous legal interpretation and have reversed all of
the Panel’s findings and conclusions that have been appealed, we do
not, in this case, make an additional finding that the Panel also failed
to discharge its duties under Article 11 of the DSU.
S.7.2.20 US — Continued Suspension / Canada
— Continued
Suspension, para. 482
(WT/DS320/AB/R,
WT/DS321/AB/R)
Because the appointment and consultations with Drs Boisseau and
Boobis compromised the Panel’s ability to act as an independent
adjudicator, the Panel cannot be said to have made “an objective
assessment of the matter” as required by Article 11 of the DSU. …
Consequently, we find that the Panel failed to comply with
its duties under Article 11 of the DSU, as a result of the appointment
and consultations with Drs Boisseau and Boobis in the circumstances of
this case.
S.7.2A Article 11 of the DSU — Objective assessment of the measure back to top
S.7.2A.1 Canada
— Wheat Exports and Grain Imports,
paras. 176-177
(WT/DS276/AB/R)
We agree with Canada that [the United States’ claim that the Panel
did not examine the measure in its entirety] … fits more
properly under Article 11 of the DSU [than under Article XVII:1 of the
GATT 1994]. The Appellate Body has stated previously that the measure at
issue (and the claims made by the complaining Member) make up the “matter
referred to the DSB” for the purpose of Article 7 of the DSU. In
this sense, the United States’ argument that the Panel did not examine
the measure in its entirety relates to the Panel’s examination of the
“matter”. Article 11 of the DSU sets out the duties of a panel,
including that it “should make an objective assessment of the matter
before it” (emphasis added). Therefore, as we see it, the United
States’ allegation that the Panel did not examine the measure in its
entirety amounts to an allegation that the Panel did not “make an
objective assessment of the matter” under Article 11 of the DSU.
Although an appellant is free to determine how to characterize its
claims on appeal, at the same time due process requires that the legal
basis of a claim be sufficiently clear to allow an appellee to respond
effectively. This is especially the case when the claim is an allegation
that the panel did not make an objective assessment of the matter as
required by Article 11 of the DSU because, by definition, such a claim
will not be found in the request for the establishment of the panel and,
therefore, the panel will not have referred to it in the panel report.
S.7.2A.2 Canada
— Wheat Exports and Grain Imports, para. 191
(WT/DS276/AB/R)
In our view, it is incumbent upon a party to identify in its
submissions the relevance of the provisions of legislation —
the
evidence
— on which it relies to support its arguments. It is not
sufficient merely to file an entire piece of legislation and expect a
panel to discover, on its own, what relevance the various provisions may
or may not have for a party’s legal position. We are not satisfied
that the United States argued the relevance before the Panel of the
various provisions of the Canadian Wheat Board Act on which it
now relies. … Therefore, we do not agree with the United States
that the Panel disregarded facts relevant to the independence of the CWB
and we see no failure by the Panel in this respect to comply with its
duty under Article 11 of the DSU.
S.7.2A.3 US
— Oil Country Tubular Goods Sunset Reviews,
paras.
209-210
(WT/DS268/AB/R)
In our view, therefore, in order to objectively assess, as required
by Article 11 of the DSU, whether the three factual scenarios of Section
II.A.3 of the SPB are regarded as determinative/conclusive, it is
essential to examine concrete examples of cases where the likelihood
determination of continuation or recurrence of dumping was based solely
on one of the scenarios of Section II.A.3 of the SPB, even though the
probative value of other factors might have outweighed that of the
identified scenario. Such an examination requires a qualitative
assessment of the likelihood determinations in individual cases.
We find that, in reaching its conclusion on the USDOC’s consistent
application of the SPB, the Panel relied solely on the overall
statistics or aggregate results. The Panel did not undertake a
qualitative analysis of at least some of the individual cases in Exhibit
ARG-63 in order to see whether the USDOC’s determinations in those
cases were objective and rested on a sufficient factual basis.
S.7.2A.4 US
— Oil Country Tubular Goods Sunset Reviews, para.
212
(WT/DS268/AB/R)
The Panel record does not show that the Panel undertook any such
qualitative assessment of at least some of the cases of ExhibitARG-63
with a view to discerning whether the USDOC regarded the existence of
one of the factual scenarios of the SPB as determinative/conclusive for
its determinations. The Panel also appears not to have examined in how
many cases the foreign respondent parties participated in the
proceedings, in how many they introduced other “good cause” factors,
and how the USDOC dealt with those factors when they were introduced.
Such an inquiry would have enabled the Panel to identify and undertake a
qualitative analysis of at least some of those cases to see whether the
affirmative determinations were made solely on the basis of one of the
scenarios to the exclusion of other factors. The Panel failed to
undertake any such qualitative assessment and relied exclusively on the
overall statistics or aggregated results of Exhibit ARG-63. The fact
that affirmative determinations were made in reliance on one of the
three scenarios in all the sunset reviews of anti-dumping duty orders
where domestic interested parties took part strongly suggests that these
scenarios are mechanistically applied. However, without a qualitative
examination of the reasons leading to such determinations, it is not
possible to conclude definitively that these determinations were based
exclusively on these scenarios in disregard of other factors.
S.7.2A.5 US — Oil Country Tubular Goods Sunset Reviews, para.
215
(WT/DS268/AB/R)
In the light of the above, we find that the Panel did not “make
an objective assessment of the matter”, as required by Article 11 of
the DSU. It apparently reached its conclusion — that the three
scenarios in Section II.A.3 of the SPB are perceived by the USDOC to be
determinative/conclusive of the likelihood of continuation or recurrence
of dumping
— on the sole basis of the overall statistics in Exhibit
ARG-63. The Panel record reveals no qualitative analysis of even some of
the cases in Exhibit ARG-63, and the Panel Report contains only a single
sentence justifying its conclusion based on the overall statistics. …
S.7.2A.6 US
— Gambling, paras. 356-357
(WT/DS285/AB/R)
In our view, the proper significance to be attached to isolated
instances of enforcement, or lack thereof, cannot be determined in the
absence of evidence allowing such instances to be placed in their proper
context. Such evidence might include evidence on the overall number
of suppliers, and on patterns of enforcement, and on the reasons
for particular instances of non-enforcement. Indeed, enforcement
agencies may refrain from prosecution in many instances for reasons
unrelated to discriminatory intent and without discriminatory effect.
Faced with the limited evidence the parties put before it with
respect to enforcement, the Panel should rather have focused, as a
matter of law, on the wording of the measures at issue. These measures,
on their face, do not discriminate between United States and
foreign suppliers of remote gambling services. …
S.7.2A.7 US
— Gambling, para. 364
(WT/DS285/AB/R)
… the United States’ appeal essentially challenges the Panel’s
failure to accord sufficient weight to the evidence submitted by the
United States with respect to the relationship under United States law
between the IHA and the measures at issue. The Panel had limited
evidence before it, as submitted by the parties, on which to base its
conclusion. This limitation, however, could not absolve the Panel of its
responsibility to arrive at a conclusion as to the relationship between
the IHA and the prohibitions in the Wire Act, the Travel Act, and the
IGBA. The Panel found that the evidence provided by the United States
was not sufficiently persuasive to conclude that, as regards wagering on
horseracing, the remote supply of such services by domestic firms
continues to be prohibited notwithstanding the plain language of the IHA.
In this light, we are not persuaded that the Panel failed to make an
objective assessment of the facts.
S.7.2A.8 Chile — Price Band System (Article 21.5
— Argentina), paras. 233-236
(WT/DS207/AB/RW)
Chile also claims that the Panel acted inconsistently with Article 11
of the DSU in refusing to re-assess certain aspects of the original
price band system that, according to Chile, both the original panel and
the Appellate Body misunderstood, and in relying on this “factual
error” in its analysis of the measure at issue. Chile argues that the
original panel and Appellate Body mistakenly believed that, under the
original measure, the c.i.f. band thresholds were compared to an f.o.b.
reference price in order to determine applicable specific duties and
rebates. …
In examining this aspect of Chile’s appeal, we first note that
Chile did not raise this alleged misunderstanding concerning the
operation of the original measure either to the original panel at the
interim review stage, or during the appeal in the original proceedings.
Moreover, Chile itself appeared to state, in response to a question
posed by the original panel, that the reference prices determined on an
f.o.b. basis were not subject to any adjustment. …
… In addition, the Panel expressly stated that its findings and
conclusions regarding the measure at issue did not depend on
whether, under the original price band system, the reference price was
converted to a c.i.f. basis. In other words, even assuming arguendo that
this aspect of the operation of the original price band system was
misunderstood in the original proceedings, this misunderstanding would
not have affected the Panel’s findings with respect to the measure at
issue, and, therefore, even its correction would not have assisted Chile
in these proceedings.
We also recall that, in Mexico
— Corn Syrup (Article 21.5
— US), the Appellate Body declined to “revisit the original panel
report” because that report had “been adopted and … these Article
21.5 proceedings concern a subsequent measure”. In this regard,
the Appellate Body referred to Articles 3.2 and 3.3 of the DSU and the
importance of security, predictability, and the prompt settlement of
disputes. Moreover, we are mindful that adopted panel and Appellate Body
reports must be accepted by the parties to a dispute. These same
considerations must also be taken into account in this appeal, and they
confirm our view that the Panel did not, in this case, fail to comply
with its duties under Article 11 of the DSU in declining to correct the
alleged misunderstanding concerning the original price band system.
S.7.3 Article 11 of the DSU — Objective assessment of the facts back to top
S.7.3.1 EC
— Hormones, para. 132
(WT/DS26/AB/R, WT/DS48/AB/R)
Under Article 17.6 of the DSU, appellate review is limited to appeals
on questions of law covered in a panel report and legal interpretations
developed by the panel. Findings of fact, as distinguished from legal
interpretations or legal conclusions, by a panel are, in principle, not
subject to review by the Appellate Body. The determination of whether or
not a certain event did occur in time and space is typically a question
of fact; for example, the question of whether or not Codex has adopted
an international standard, guideline or recommendation on MGA is a
factual question. Determination of the credibility and weight properly
to be ascribed to (that is, the appreciation of) a given piece of
evidence is part and parcel of the fact finding process and is, in
principle, left to the discretion of a panel as the trier of facts. The
consistency or inconsistency of a given fact or set of facts with the
requirements of a given treaty provision is, however, a legal
characterization issue. It is a legal question. …
S.7.3.2 EC — Hormones, para. 133
(WT/DS26/AB/R, WT/DS48/AB/R)
… when may a panel be regarded as having failed to discharge its
duty under Article 11 of the DSU to make an objective assessment of the
facts before it? Clearly, not every error in the appreciation of the
evidence (although it may give rise to a question of law) may be
characterized as a failure to make an objective assessment of the facts
… The duty to make an objective assessment of the facts is, among
other things, an obligation to consider the evidence presented to a
panel and to make factual findings on the basis of that evidence. The
deliberate disregard of, or refusal to consider, the evidence submitted
to a panel is incompatible with a panel’s duty to make an objective
assessment of the facts. The wilful distortion or misrepresentation of
the evidence put before a panel is similarly inconsistent with an
objective assessment of the facts. “Disregard” and “distortion”
and “misrepresentation” of the evidence, in their ordinary
signification in judicial and quasi-judicial processes, imply not simply
an error of judgment in the appreciation of evidence but rather an
egregious error that calls into question the good faith of a panel. A
claim that a panel disregarded or distorted the evidence submitted to it
is, in effect, a claim that the panel, to a greater or lesser degree,
denied the party submitting the evidence fundamental fairness, or what
in many jurisdictions is known as due process of law or natural justice.
S.7.3.3 EC — Hormones, paras. 135-136
(WT/DS26/AB/R, WT/DS48/AB/R)
… it is generally within the discretion of the Panel to decide
which evidence it chooses to utilize in making findings. …
The European Communities argues that the Panel failed to request the
submission of data on MGA and contends that this failure constituted a
violation of Article 11 of the DSU. However, we see nothing in Article
11 to suggest that there is an obligation on the Panel to gather data
relating to MGA and that it was therefore required to request the
submission of this data.
S.7.3.4 EC
— Hormones, para. 138
(WT/DS26/AB/R, WT/DS48/AB/R)
… The Panel cannot realistically refer to all statements made by
the experts advising it and should be allowed a substantial margin of
discretion as to which statements are useful to refer to explicitly. …
S.7.3.5 Australia — Salmon, para. 267
(WT/DS18/AB/R)
… in response to Australia’s contention that the Panel failed to
accord “due deference” to matters of fact it put forward, we note
that Article 11 of the DSU calls upon panels to “make an objective
assessment of the matter before it, including an objective assessment of
the facts of the case and the applicability of and conformity with the
relevant covered agreements”. Therefore, the function of this Panel
was to assess the facts in a manner consistent with its obligation to
make such an “objective assessment of the matter before it”. We
believe the Panel has done so in this case. Panels, however, are not
required to accord to factual evidence of the parties the same meaning
and weight as do the parties.
S.7.3.6 Korea — Alcoholic Beverages, para. 164
(WT/DS75/AB/R, WT/DS84/AB/R)
We are bound to conclude that Korea has not succeeded in showing that
the Panel has committed any egregious errors that can be characterized
as a failure to make an objective assessment of the matter before it.
Korea’s arguments, when read together with the Panel Report and the
record of the Panel proceedings, do not disclose that the Panel has
distorted, misrepresented or disregarded evidence, or has applied a “double
standard” of proof in this case. It is not an error, let alone an
egregious error, for the Panel to fail to accord the weight to the
evidence that one of the parties believes should be accorded to it.
S.7.3.7 Japan — Agricultural Products II, para. 127
(WT/DS76/AB/R)
… Article 13 of the DSU allows a panel to seek information from
any relevant source and to consult individual experts or expert bodies
to obtain their opinion on certain aspects of the matter before
it. In our Report in United States — Import Prohibition of
Certain Shrimp and Shrimp Products (“United States
— Shrimp”),
we noted the “comprehensive nature” of this authority, and stated
that this authority is “indispensably necessary” to enable a panel
to discharge its duty imposed by Article 11 of the DSU to “make an
objective assessment of the matter before it, including an objective
assessment of the facts of the case and the applicability of and
conformity with the relevant covered agreements … ” [Appellate
Body Report, para. 106].
S.7.3.8 Japan
— Agricultural Products II, para. 129
(WT/DS76/AB/R)
Article 13 of the DSU and Article 11.2 of the SPS Agreement suggest
that panels have a significant investigative authority. However, this
authority cannot be used by a panel to rule in favour of a complaining
party which has not established a prima facie case of
inconsistency based on specific legal claims asserted by it. A panel is
entitled to seek information and advice from experts and from any other
relevant source it chooses, pursuant to Article 13 of the DSU and, in an
SPS case, Article 11.2 of the SPS Agreement, to help it to
understand and evaluate the evidence submitted and the arguments made by
the parties, but not to make the case for a complaining party.
S.7.3.9 Japan — Agricultural Products II, para. 141
(WT/DS76/AB/R)
… not every failure by the Panel in the appreciation of the
evidence before it can be characterized as failure to make an objective
assessment of the facts as required by Article 11 of the DSU. Only
egregious errors constitute a failure to make an objective assessment of
the facts as required by Article 11 of the DSU.
S.7.3.10 India — Quantitative Restrictions, paras. 149, 151
(WT/DS90/AB/R)
… The Panel gave considerable weight to the views expressed by the
IMF in its reply to these questions. However, nothing in the Panel
Report supports India’s argument that the Panel delegated to the IMF
its judicial function to make an objective assessment of the matter. A
careful reading of the Panel Report makes clear that the Panel did not
simply accept the views of the IMF. The Panel critically assessed these
views and also considered other data and opinions in reaching its
conclusions.
…
We conclude that the Panel made an objective assessment of the matter
before it. …
S.7.3.11 Korea — Dairy, para. 137
(WT/DS98/AB/R)
… However, under Article 11 of the DSU, a panel is charged with the
mandate to determine the facts of the case and to arrive at factual
findings. In carrying out this mandate, a panel has the duty to examine
and consider all the evidence before it, not just the evidence submitted
by one or the other party, and to evaluate the relevance and probative
force of each piece thereof. …
… The determination of the significance and weight properly
pertaining to the evidence presented by one party is a function of a
panel’s appreciation of the probative value of all the evidence
submitted by both parties considered together.
S.7.3.11A US — Wheat Gluten, para. 151
(WT/DS166/AB/R)
… although the task of panels under Article 11 relates, in part, to
its assessment of the facts, the question whether a panel has
made an “objective assessment” of the facts is a legal one,
that may be the subject of an appeal (emphasis added). However, in view
of the distinction between the respective roles of the Appellate Body
and panels, we have taken care to emphasize that a panel’s
appreciation of the evidence falls, in principle, “within the scope
of the panel’s discretion as the trier of facts” (emphasis
added). In assessing the panel’s appreciation of the evidence, we
cannot base a finding of inconsistency under Article 11 simply on the
conclusion that we might have reached a different factual finding from
the one the panel reached. Rather, we must be satisfied that the panel
has exceeded the bounds of its discretion, as the trier of facts, in its
appreciation of the evidence. As is clear from previous appeals, we will
not interfere lightly with the panel’s exercise of its discretion.
S.7.3.12 US — Shrimp (Article 21.5
— Malaysia), para. 95
(WT/DS58/AB/RW)
There is no way of knowing or predicting when or how that particular
legal proceeding will conclude in the United States. The Turtle
Island case has been appealed and could conceivably go as far as the
Supreme Court of the United States. It would have been an exercise in
speculation on the part of the Panel to predict either when or how that
case may be concluded, or to assume that injunctive relief ultimately
would be granted and that the United States Court of Appeals or the
Supreme Court of the United States eventually would compel the
Department of State to modify the Revised Guidelines. The Panel was
correct not to indulge in such speculation, which would have been
contrary to the duty of the Panel, under Article 11 of the DSU, to make
“an objective assessment of the matter … including an objective
assessment of the facts of the case”.
S.7.3.12A EC — Asbestos, para. 161
(WT/DS135/AB/R)
The same holds true in this case. The Panel enjoyed a margin of
discretion in assessing the value of the evidence, and the weight to be
ascribed to that evidence. The Panel was entitled, in the exercise of
its discretion, to determine that certain elements of evidence should be
accorded more weight than other elements — that is the essence of the
task of appreciating the evidence.
S.7.3.12B EC
— Sardines, para. 299
(WT/DS231/AB/R)
… As we have stated in several previous appeals, panels enjoy a
discretion as the trier of facts; they enjoy “a margin of discretion
in assessing the value of the evidence, and the weight to be ascribed to
that evidence”. We have also said that we will not “interfere
lightly” with the Panel’s appreciation of the evidence: we will not
intervene solely because we might have reached a different factual
finding from the one the panel reached; we will intervene only if we are
“satisfied that the panel has exceeded the bounds of its discretion,
as the trier of facts, in its appreciation of the evidence”.
S.7.3.13 EC — Sardines, para. 301
(WT/DS231/AB/R)
… The interim review stage is not an appropriate time to introduce
new evidence. We recall that Article 15 of the DSU governs the interim
review. Article 15 permits parties, during that stage of the
proceedings, to submit comments on the draft report issued by the panel,
and to make requests “for the panel to review precise aspects of the
interim report”. At that time, the panel process is all but completed;
it is only — in the words of Article 15
— “precise aspects” of
the report that must be verified during the interim review. And this, in
our view, cannot properly include an assessment of new and unanswered
evidence. Therefore, we are of the view that the Panel acted properly in
refusing to take into account the new evidence during the interim
review, and did not thereby act inconsistently with Article 11 of the
DSU.
S.7.3.14 US
— Carbon Steel, para. 142
(WT/DS213/AB/R,
WT/DS213/AB/R/Corr.1)
… Article 11 requires panels to take account of the evidence put
before them and forbids them to wilfully disregard or distort such
evidence. Nor may panels make affirmative findings that lack a basis in
the evidence contained in the panel record. Provided that panels’
actions remain within these parameters, however, we have said that “it
is generally within the discretion of the Panel to decide which evidence
it chooses to utilize in making findings”, and, on appeal, we “will
not interfere lightly with a panel’s exercise of its discretion”.
S.7.3.15 US — Carbon Steel, para. 153
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)
We also wish to underline that although panels enjoy a discretion,
pursuant to Article 13 of the DSU, to seek information “from any
relevant source”, Article 11 of the DSU imposes no obligation on
panels to conduct their own fact-finding exercise, or to fill in gaps in
the arguments made by parties. In consequence, given that the European
Communities itself had submitted no evidence — other than the text of
the provision
— on this point, the Panel did not act inconsistently
with Article 11 in refraining from seeking additional information on its
own initiative.
S.7.3.16 EC
— Bed Linen (Article 21.5
— India), para. 177
(WT/DS141/AB/RW)
India has not persuaded us that the Panel in this case exceeded its
discretion as the trier of facts. In our view, the Panel assessed and
weighed the evidence submitted by both parties, and ultimately concluded
that the European Communities had information on all relevant economic
factors listed in Article 3.4. It is not “an error, let alone an
egregious error”, for the Panel to have declined to accord to the
evidence the weight that India sought to have accorded to it. We,
therefore, reject India’s argument that, by failing to shift the
burden of proof, the Panel did not properly discharge its duty to assess
objectively the facts of the case as required by Article 11 of the DSU.
S.7.3.17 EC — Bed Linen (Article 21.5
— India), para. 181
(WT/DS141/AB/RW)
… Specifically, India argues that the Panel did not make an
objective assessment of the facts of the case because the Panel distorted
the evidence by placing greater weight on the statements made by the
European Communities than on those made by India. As we stated earlier,
the weighing of the evidence is within the discretion of the Panel as
the trier of facts, and there is no indication in this case that the
Panel exceeded the bounds of this discretion. …
S.7.3.18 Japan — Apples, para. 221
(WT/DS245/AB/R)
… Since EC — Hormones, the Appellate Body has consistently
emphasized that, within the bounds of their obligation under Article 11
to make an objective assessment of the facts of the case, panels enjoy a
“margin of discretion” as triers of fact. Panels are thus “not
required to accord to factual evidence of the parties the same meaning
and weight as do the parties” and may properly “determine that
certain elements of evidence should be accorded more weight than other
elements”.
S.7.3.19 Japan — Apples, para. 222
(WT/DS245/AB/R)
Consistent with this margin of discretion, the Appellate Body has
recognized that “not every error in the appreciation of the evidence
(although it may give rise to a question of law) may be characterized as
a failure to make an objective assessment of the facts”. When
addressing claims under Article 11 of the DSU, the Appellate Body does
not “second-guess the Panel in appreciating either the evidentiary
value of … studies or the consequences, if any, of alleged defects in
[the evidence]”. …
… Where parties challenging a panel’s fact-finding under Article
11 have failed to establish that a panel exceeded the bounds of its
discretion as the trier of facts, the Appellate Body has not “interfere[d]”
with the findings of the panel.
S.7.3.20 US — Oil Country Tubular Goods Sunset Reviews, para.
313
(WT/DS268/AB/R)
In any event, we consider that the Panel’s decision not to rely on
the statements of the USITC before domestic courts and before a NAFTA
panel relates to the weighing of evidence. …
…
The Appellate Body has consistently emphasized that, within the
confines of their obligation under Article 11 of the DSU to make “an
objective assessment of the facts of the case”, panels enjoy a “margin
of discretion” as triers of facts. Accordingly, we see no reason to
interfere with the Panel’s treatment of the USITC’s statements
before domestic courts and before a NAFTA panel.
S.7.3.21 US — Upland Cotton, para. 399
(WT/DS267/AB/R)
… Pursuant to Article 17.6 of the DSU, appeals are “limited to
issues of law covered in the panel report and legal interpretations
developed by the panel”. To the extent that the United States’
arguments concern the Panel’s appreciation and weighing of the
evidence, we note from the outset that the Appellate Body will not
interfere lightly with the Panel’s discretion “as the trier of facts”.
At the same time, the Appellate Body has previously pointed out that the
“consistency or inconsistency of a given fact or set of facts with the
requirements of a given treaty provision is … a legal characterization
issue”. Whether the Panel properly interpreted the requirements of
Article 6.3(c) of the SCM Agreement and properly applied that
interpretation to the facts in this case is a legal question. This
question is different from whether the Panel made “an objective
assessment of the matter before it, including an objective assessment of
the facts of the case”, in accordance with Article 11 of the DSU.
Therefore, the Panel’s application of the legal requirements of
Article 6.3(c) of the SCM Agreement to the facts of this case
falls within the scope of our review in this appeal, despite the fact
that the United States does not claim that the Panel erred under Article
11 of the DSU.
S.7.3.22 US — Upland Cotton, para. 458
(WT/DS267/AB/R)
Unlike in certain other instances under the WTO agreements, a panel
conducting an analysis under Article 6.3(c) of the SCM Agreement is
the first trier of facts, rather than a reviewer of factual
determinations made by a domestic investigating authority. Bearing this
in mind, we underline the responsibility of panels in gathering and
analysing relevant factual data and information in assessing claims
under Article 6.3(c) in order to arrive at reasoned conclusions. In this
case, the voluminous evidentiary record before the Panel included
several economic studies, and substantial data and information. For its
part, the Panel posed a large number of questions to which the parties
submitted detailed answers. Overall, the Panel evidently conducted an
extensive analysis, but we believe that, in its reasoning, the Panel
could have provided a more detailed explanation of its analysis of the
complex facts and economic arguments arising in this dispute. The Panel
could have done so in order to demonstrate precisely how it evaluated
the different factors bearing on the relationship between the
price-contingent subsidies and significant price suppression.
Nevertheless, in the light of the Panel’s examination of the relevant
evidence, coupled with its legal reasoning, we find no legal error in
the Panel’s causation analysis.
S.7.3.23 US — Upland Cotton, para. 663
(WT/DS267/AB/R)
… The United States is not asking us to review the Panel’s
factual findings, nor is it arguing that the Panel’s assessment of the
matter was not objective. Instead, the United States’ claim relates to
the application of the legal standard set out in item (j) of the
Illustrative List of Export Subsidies to the specific facts of this
case. It is an issue of legal characterization. Thus, we do not agree
with Brazil’s contention that the United States was under an
obligation to bring its claim under Article 11 of the DSU. Consequently,
our inquiry will be limited to the Panel’s application of the law to
the facts in this case.
S.7.3.24 US — Upland Cotton, para. 686
(WT/DS267/AB/R)
We understand Brazil to argue that the Panel erred both in the
application of Article 10.1 of the Agreement on Agriculture and
in its assessment of the matter pursuant to Article 11 of the DSU. As we
explained earlier, the application of a legal rule to the specific facts
of a case is an issue of legal characterization. In this case, we
understand that Brazil’s claim under Article 11 of the DSU is
additional to its claim of legal error in respect of Article 10.1. We
thus turn first to Brazil’s claim that the Panel erred in its
application of Article 10.1 of the Agreement on Agriculture to
the facts before it.
S.7.3.25 US — Gambling, para. 363
(WT/DS285/AB/R, WT/DS285/AB/R/Corr.1)
… the Panel had before it conflicting evidence as to the
relationship between the IHA, on the one hand, and the measures at
issue, on the other. We have already referred to the discretion accorded
to panels, as fact-finders, in the assessment of the evidence. As the
Appellate Body has observed on previous occasions, “not every error in
the appreciation of the evidence (although it may give rise to a
question of law) may be characterized as a failure to make an objective
assessment of the facts”.
S.7.3.26 Dominican Republic — Import and Sale of Cigarettes,
para. 82
(WT/DS302/AB/R)
The Dominican Republic also submits that the Panel “misunderstood
the proposition for which Exhibit DR-8 was offered”, because “[t]he
Panel … incorrectly focused on the relationship between smuggling and
forgery”, whereas “Exhibit DR-8 was offered as evidence of (a)
smuggling and, separately, (b) forgery of tax stamps of a product in
respect of which the Dominican Republic allows stamps to be affixed
outside its territory.” In our view, the Panel did not act in a manner
inconsistent with Article 11 of the DSU in not finding that Memo DAT-No.
46 “adds any conclusive elements as relate to the relationship between
the seizure of alcoholic beverages and the possible forgery of tax
stamps”. A panel does not act in a manner inconsistent with Article 11
of the DSU simply because it draws inferences from some of the evidence
that do not coincide with the reason for which a party adduced it.
S.7.3.27 Dominican Republic — Import and Sale of Cigarettes,
para. 84
(WT/DS302/AB/R)
The Dominican Republic disagrees with the Panel’s position that
Exhibits DR-8 and DR-29 do not establish a causal link between allowing
stamps to be affixed abroad and forgery of tax stamps. It contends that
such a causal link exists, basing its contention on an inference it
draws from evidence of smuggling and forgery of tax stamps with respect
to alcohol products. However, a mere divergence of views between a party
and a panel on the inferences to be drawn from pieces of evidence is not
a sufficient ground to conclude that the Panel failed to “make … an
objective assessment of the facts of the case”. …
S.7.3.28 Mexico — Anti-Dumping Measures on Rice,
paras. 273-274
(WT/DS295/AB/R)
… we are of the view that this aspect of Mexico’s appeal should
have been more appropriately brought under Article 11 of the DSU. Mexico’s
argument is premised on the Panel’s purported failure to read the
challenged provisions of the FTA in the light of another FTA
provision that Mexico brought to the attention of the Panel. Mexico
alleges that the Panel “disregarded” this evidence and “made
unsubstantiated findings” on the mandatory nature of the challenged
provisions of the FTA “virtually without undertaking any relevant
analysis”. Mexico’s claim of error, therefore, rests on the Panel’s
failure to conduct its analysis in a proper and impartial manner: Mexico
does not contest, on the merits, the Panel’s decision rejecting the
supposed import of Article 2 for the interpretation of the other
provisions of the FTA.
In this light, Mexico’s claim on appeal appears to be a traditional
Article 11 claim challenging the Panel’s failure to accord sufficient
weight to evidence submitted by one of the parties. …
S.7.3.29 Mexico
— Anti-Dumping Measures on Rice, para. 330
(WT/DS295/AB/R)
… The English translation of Article 93V that was provided to the
Panel by the United States was the official WTO translation of these
notifications. Although Mexico argued in its submissions to the Panel
that Article 93V was not mandatory — based in part on the opening
language of Article 93
— Mexico never questioned the use of these
official WTO translations as the basis for the Panel’s examination. We
do not see how the Panel can be said to have failed to make an objective
assessment when it relied on an official WTO English translation of
Mexico’s law, to which Mexico itself raised no objection. Therefore,
we find that, in its interpretation of Article 93V of the FTA,
the Panel did not fail to fulfil its obligations under Article 11
of the DSU.
S.7.3.30 Mexico
— Taxes on Soft Drinks, paras. 82-83
(WT/DS308/AB/R)
Mexico argues, “separately and in addition” to the previous
errors, that the Panel failed to make “an objective assessment of the
facts”, as required by Article 11 of the DSU, in finding that “Mexico
has not established that its measures contribute to securing compliance
in the circumstances of this case.” Mexico argues that “[t]he
evidence on the record demonstrates that the effects of the measures at
issue have contributed to securing compliance in the circumstances of
this case …
… we held that Mexico’s measures do not constitute measures “to
secure compliance with laws or regulations”, within the meaning of
Article XX(d) of the GATT 1994. Therefore, Mexico’s claim under
Article 11 of the DSU is predicated on an interpretation of Article XX(d)
of the GATT 1994 that we have found to be incorrect. Since Mexico’s
measures cannot be justified under Article XX(d) as a matter of law,
we reject Mexico’s claim under Article 11 of the DSU.
S.7.3.31 US
— Zeroing (EC), paras. 213-214
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)
It seems to us that the Panel took into account all of the evidence
placed before it and sought verification of its accuracy. Moreover, the
Panel set out sufficiently the basis for its conclusions on the
evidence. We disagree with the United States that the Panel did not
assess objectively the issue of whether the zeroing methodology, as it
relates to original investigations in which the
weighted-average-to-weighted average comparison method is used to
calculate margins of dumping, is inconsistent, as such, with Article
2.4.2.We also disagree with the United States that the Panel’s
analysis “relie[d] on nothing more than the fact that the USDOC has
engaged in zeroing in the past using computers”. Instead, as discussed
above, the Panel had before it evidence including standard computer
programs used by the USDOC to calculate margins of dumping, the
Anti-Dumping Manual, expert opinions, and the Standard Zeroing
Procedures. …
We … do not agree with the United States that the Panel erred
simply because it did not apply the mandatory/discretionary distinction
in analysing and finding a violation of Article 2.4.2 of the Anti-Dumping
Agreement. As the Appellate Body has said [in US
— Corrosion-Resistant Steel Sunset Review, paragraph 93], “the
import of the ‘mandatory/discretionary distinction’ may vary from
case to case”. In the light of the above, we conclude that the Panel
did not act inconsistently with its obligations under Article 11 of the
DSU.
S.7.3.32 EC — Selected Customs Matters, para. 258
(WT/DS315/AB/R)
With respect to draft EC Regulation 2171/2005, we disagree with the
European Communities that the Panel did not consider this draft
Regulation. Draft EC Regulation 2171/2005 was discussed by the Panel in
footnote 580 to paragraph 7.305 of the Panel Report. The European
Communities might have wished the Panel had attached more weight than it
did to this piece of evidence. It is, however, well established that the
weighing of the evidence is, in principle, within the discretion of the
panel as the trier of facts. Thus, the Panel was “not required to
accord to factual evidence of the parties the same meaning and weight as
do the parties”. We also recall that “a mere divergence of views
between a party and a panel on the inferences to be drawn from pieces of
evidence is not a sufficient ground to conclude that the Panel failed to
‘make … an objective assessment of the facts of the case’ ”.
S.7.3.33 US — Zeroing (Japan), para. 82
(WT/DS322/AB/R)
As we see it, the United States’ challenge under Article 11 of the
DSU is directed at the Panel’s appreciation and weighing of the
evidence. The Appellate Body has stated on several occasions that panels
enjoy a certain margin of discretion in assessing the credibility and
weight to be ascribed to a given piece of evidence. At the same time,
the Appellate Body has underscored that Article 11 of the DSU requires
panels “to take account of the evidence put before them and forbids
them to wilfully disregard or distort such evidence”. Moreover, panels
must not “make affirmative findings that lack a basis in the evidence
contained in the panel record”. Provided that a panel’s assessment
of evidence remains within these parameters, the Appellate Body will not
interfere with the findings of the panel.
S.7.3.34 US — Zeroing (Japan), para. 86
(WT/DS322/AB/R)
The United States argues that the statements which the Panel deemed
to reflect a “deliberate policy” consist “primarily of quotations
from one assessment review”. Although this may be so, we cannot fault
the Panel for concluding that these statements, when considered in
conjunction with the other evidence before the Panel, lend support to
the conclusion that a single rule or norm of general and prospective
application that provides for disregarding negative comparison results
exists. As the Appellate Body has previously said, the appreciation of
“a given piece of evidence is part and parcel of the fact-finding
process and is, in principle, left to the discretion of a panel as the
trier of facts”.
S.7.3.35 US — Zeroing (Japan), para. 87
(WT/DS322/AB/R)
The thrust of the United States’ argument is that context-specific
evidence is required to demonstrate the existence of the zeroing
procedures in T-T and W-T comparisons in original investigations. In
other words, according to the United States, the existence of a rule or
norm requiring the application of zeroing must be examined separately
for each comparison methodology and for each type of antidumping
proceeding. Japan submitted evidence to the Panel indicating that
zeroing is a constant feature whenever a margin of dumping is calculated
regardless of the comparison methodology used. In contrast, the United
States did not adduce evidence of a single case in which zeroing was not
applied. Nor did it indicate how the use of alternative comparison
methodologies would make a difference in the operation or application of
the zeroing procedures. Moreover, the United States did not explain why
the rationale underlying the zeroing procedures in W-W comparisons in
original investigations, or W-T comparisons in periodic reviews, does
not apply to the calculation of margins of dumping on the basis of T-T
and W-T comparisons in original investigations. The fact that the
consistency of zeroing may be challenged in relation to a specific
comparison methodology, or a specific type of anti-dumping proceeding,
does not necessarily mean that the existence of a general rule or norm
directing its use must be established through evidence of the actual
application of those procedures in all possible situations, as long as
they were applied every time the occasion arose.
S.7.3.36 US — Zeroing (Japan), para. 88
(WT/DS322/AB/R)
In sum, we agree with the Panel’s understanding of the Appellate
Body’s previous jurisprudence and the manner in which the Panel framed
the question before it. We also consider that the Panel had sufficient
evidence before it to conclude that the “zeroing procedures” under
different comparison methodologies, and in different stages of
anti-dumping proceedings, do not correspond to separate rules or norms,
but simply reflect different manifestations of a single rule or norm.
The Panel also examined ample evidence regarding the precise content of
this rule or norm, its nature as a measure of general and prospective
application, and its attribution to the United States. In our view, the
Panel properly assessed this evidence. We therefore disagree with the
United States that the Panel did not assess objectively the issue of
whether a single rule or norm exists by virtue of which the USDOC
applies zeroing “regardless of the basis upon which export price and
normal value are compared and regardless of the type of proceeding in
which margins are calculated”.
S.7.3.37 Chile — Price Band System (Article 21.5
— Argentina),
para. 238
(WT/DS207/AB/RW)
… The fact that the Panel did not agree with arguments or evidence
proffered by Chile cannot, in itself, establish a failure to consider
such evidence or to assess it objectively as required by Article 11.We
see no indication that the Panel’s treatment of the evidence was
biased or otherwise exceeded the bounds of discretion enjoyed by the
Panel as the trier of fact. …
S.7.3.38 Chile — Price Band System (Article 21.5
— Argentina),
para. 240
(WT/DS207/AB/RW)
We are mindful that the information placed before a panel is often
voluminous in nature and that the probative value of specific pieces of
evidence varies considerably. A panel must examine and consider all of
the evidence placed before it, must identify the evidence upon which it
has relied in reaching its findings, and must not make findings that are
unsupported by evidence. Yet, a panel is also afforded a considerable
margin of discretion in its appreciation of the evidence. This means,
among other things, that a panel is not required, in its report, to
explain precisely how it dealt with each and every piece of evidence on
the panel record. As we see it, Chile is trying to have us weigh the
evidence differently than did the Panel. Chile may well consider that
the Panel should have ascribed more weight to, and relied upon, certain
evidence that Chile put forward, or should not have relied on certain
evidence submitted by Argentina, but, in the absence of any indication
that the Panel ignored or distorted Chile’s evidence, or made findings
that were unsupported by any evidence, we see no basis for
interfering with the Panel’s exercise of its discretion in this case.
S.7.3.39 Brazil — Retreaded Tyres, paras. 196-197
(WT/DS332/AB/R)
… The European Communities claims that the Panel engaged in a “wilful
exclusion” of evidence relating to the importation of used tyres
through court injunctions, even though this evidence was relevant
because it demonstrates that Brazilian retreaded tyres are produced with
imported casings, and casts doubt on Brazil’s position that domestic
casings suitable for retreading are readily available in Brazil.
We are not persuaded that the Panel ignored evidence relating to the
importation of used tyres through court injunctions in its analysis of
the contribution of the Import Ban to the realization of the ends
pursued by it. The Panel acknowledged these injunctions and the
arguments put forth by the European Communities in its analysis of the
conflicting arguments and evidence regarding the level of retreadability
of tyres in Brazil. In the end, the Panel ascribed more weight to
evidence adduced by Brazil suggesting that “at least some domestic
used tyres are being retreaded in Brazil” and that “domestic used
tyres are suitable for retreading”. It appears to us that, in
proceeding in that manner, the Panel did not exceed the bounds of its
discretion as the trier of facts.
S.7.3.40 Brazil
— Retreaded Tyres, para. 202
(WT/DS332/AB/R)
The European Communities also suggests that the Panel erred under
Article 11 in its rejection of landfilling as an alternative to the
Import Ban because it did not take into account legislation allowing
some landfilling of shredded tyres in Brazil. It is true that the Panel
did not refer specifically to this legislation in its analysis. We note,
however, that Brazil had argued that the legislation in question was
exceptional, temporary, and in no way contradicted the existence or
risks generally associated with landfilling. A panel enjoys discretion
in assessing whether a given piece of evidence is relevant for its
reasoning, and is not required to discuss, in its report, each and every
piece of evidence.
S.7.3.41 US — Upland Cotton (Article 21.5
— Brazil), paras.
291-292
(WT/DS267/AB/RW)
Thus, the Panel dismissed the import of the re-estimates data as
estimates, yet concluded that the initial estimates provided a “strong indication”
that the GSM 102 programme is expected to run at a net cost. However,
all the quantitative evidence examined by the Panel, except for the cash
basis accounting data submitted by Brazil, are estimates, or
projections, of future financial performance. There is no rationale
offered by the Panel as to why it marginalized the re-estimates data
while, at the same time, accepting the initial estimates as “provid[ing]
a strong indication” that the GSM 102 programme is expected to run at
a net cost.
The Panel’s treatment of the competing evidence submitted by the
parties is therefore internally inconsistent. The initial estimates, the
re-estimates, and the CCC’s Financial Statements are all routinely
produced by the United States Government, yet obvious discrepancies
exist among them. For example, both the re-estimates data and the credit
guarantee liability figure relate to the financial performance of the
CCC’s export credit guarantee programmes up to 2006, but the former
project profits, whereas the latter projects losses. The Panel did not
reconcile these discrepancies. If this was not possible, the Panel
should have provided a reasoned explanation as to why it preferred one
category of quantitative evidence over the other. Instead, the Panel
dismissed the import of the re-estimates, which were the central piece
of evidence relied on by the United States, on the basis of reasoning
that, in our view, is internally incoherent, and compounded the matter
by relying on evidence that suffered from the same limitation as the
re-estimates. The Panel’s treatment of the evidence submitted by the
parties lacked even-handedness.
S.7.3.42 US
— Upland Cotton (Article 21.5
— Brazil), paras.
294-295
(WT/DS267/AB/RW)
Our concern with the Panel’s treatment of the re-estimates,
however, is not directed towards its weighing of the evidence. Rather,
there is a lack of explanation and coherent reasoning by the Panel that
led it to marginalize the re-estimates. The Panel was presented with a
class of quantitative evidence that is based on estimates, including the
initial estimates, the re-estimates, and the CCC’s Financial
Statements, but effectively disregarded the re-estimates data submitted
by the United States. The error is amplified by the fact that the Panel
unquestioningly accepted the initial estimates and CCC Financial
Statements submitted by Brazil, although they too are based on
estimates. The Panel’s internally incoherent treatment of the same
class of quantitative evidence thus vitiates the conclusion it drew
based on the financial data submitted by the parties.
In sum, we find that, by dismissing the import of the re-estimates
data submitted by the United States on the basis of internally
inconsistent reasoning, the Panel did not make “an objective
assessment of the matter before it, including an objective assessment of
the facts of the case”, under Article 11 of the DSU. Consequently, the
Panel erred in its intermediate conclusion that “the initial subsidy
estimates provide a strong indication that GSM 102 export credit
guarantees are provided against premia which are inadequate to cover the
long-term operating costs and losses of the GSM 102 programme.
S.7.3.43 US
— Upland Cotton (Article 21.5
— Brazil), footnote
618 to para. 293
(WT/DS267/AB/RW)
… In cases concerning a panel’s examination of determinations by
domestic investigating authorities, the Appellate Body has also held
that a panel must assess “whether the explanations provided by the
authority are ‘reasoned and adequate’ … and [assess] the coherence
of its reasoning” [Appellate Body Report, US —
Softwood Lumber VI
(Article 21.5
— Canada), para. 97]. In cases where a panel
operates as the initial trier of facts, such as this one, it would
similarly be expected to provide reasoned and adequate explanations and
coherent reasoning.
S.7.3.44 US — Upland Cotton (Article 21.5
— Brazil), paras.
381, 385
(WT/DS267/AB/RW)
… Although its analysis of China’s role may be succinct, the
Panel considered, “based on the evidence before it, that while
China may play a significant role in the market for upland cotton, this
does not diminish the significance of the impact of [United States]
subsidies on the world price for upland cotton as a result of their
effect on [United States] supply to the world market”. Moreover, we
stated above that the evidence submitted by the United States on the
role of China in the world cotton trade does not establish that China is
a factor that contributes to the suppression of world upland cotton
prices. We do not believe, therefore, that the Panel was required to
conduct a more thorough analysis of the role of China in the light of
the evidence … the Panel did take into account the evidence submitted
by the United States on the role of China and properly reached the
conclusion that China’s role in the world cotton trade did not impact
negatively on world upland cotton prices. For the same reasons, we also
do not believe that the Panel failed to provide a “reasoned and
adequate explanation” for its conclusions in the light of “possible
alternative explanations”, as alleged by the United States.
…
The United States has characterized its appeal under Article 6.3(c)
of the SCM Agreement as one relating to the Panel’s application
of the law to the facts, although it has also brought some claims under
Article 11 of the DSU that challenge the objectivity of the Panel’s
assessment of the facts. We recognize that the boundary between an issue
that is purely factual and one that involves mixed issues of law and
fact is often difficult to draw. However, we consider that many of the
United States’ claims against the Panel’s evaluation of the elements
supporting its finding of significant price suppression are primarily
directed at the Panel’s appreciation and weighing of the evidence, and
the inferences that the Panel drew from the evidence, both of which fall
within its authority that is recognized under Article 11 of the DSU.
Therefore, we shall review those claims and arguments raised by the
United States concerning the application of the law to the facts under
the legal standard of Article 6.3(c) of the SCM Agreement, and
those claims and arguments concerning the Panel’s appreciation and
weighing of the evidence under Article 11 of the DSU.
S.7.3.45 US — Upland Cotton (Article 21.5
— Brazil), paras.
404, 406
(WT/DS267/AB/RW)
In our view, the arguments presented by the United States do not
succeed in demonstrating that the Panel erred in its evaluation of the
economic studies submitted by the United States on the effects of
counter-cyclical payments on production. To the contrary, the Panel made
a careful evaluation of the studies. … The fact that the Panel
accorded to the studies a different meaning and weight than did the
United States does not constitute a failure to make an objective
assessment of the matter under Article 11 of the DSU.
…
We see nothing improper in the Panel’s reasoning that the fact that
83 per cent of cotton planted acreage corresponded directly to upland
cotton base acres supports the conclusion that a strongly positive
relationship exists between recipients of upland cotton counter-cyclical
payments who hold upland cotton base acres and those who continue to
plant upland cotton. In any event, we consider that, on this issue, the
United States is essentially challenging the inferences drawn by the
Panel from the evidence before it, and this is a matter that was within
the Panel’s authority as the trier of facts. We note that the United
States did not raise a claim under Article 11 of the DSU on this issue.
S.7.3.46 US — Upland Cotton (Article 21.5
— Brazil), para.
415
(WT/DS267/AB/RW)
The United States has also raised a claim under Article 11 of the DSU
that the Panel failed to carry out an objective assessment of the facts,
because it “deliberately distorted” the meaning and significance of
the evidence on stable United States shares of world upland cotton
production and exports, and failed to provide a reasoned and adequate
explanation for its conclusions in the light of plausible alternative
explanations. We do not consider that the arguments presented by the
United States succeed in demonstrating that the Panel erred in its
evaluation of the meaning and significance of the evidence on stable
United States shares of world upland cotton production and exports. As
we explained above, the Panel did not disregard or distort the meaning
and significance of such evidence, nor did it fail to provide a reasoned
and adequate explanation for its conclusions in the light of plausible
alternative explanations. We, therefore, find that the Panel did not
fail to carry out an objective assessment of the facts, as required by
Article 11 of the DSU.
S.7.3.47 US — Upland Cotton (Article 21.5
— Brazil), para.
435
(WT/DS267/AB/RW)
… the results of the simulations were one of several elements on
which the Panel based its finding under Article 6.3(c) of the SCM
Agreement. In our view, the Panel’s assessment of the economic
simulations falls within its authority as the trier of facts and we have
not been persuaded that the Panel exceeded the bounds of its authority.
S.7.3.48 US — Continued Zeroing, para. 331
(WT/DS350/AB/R)
Article 11 of the DSU requires a panel to make “an objective
assessment of the matter before it, including an objective assessment of
the facts of the case”. The Appellate Body has explained that panels
enjoy a certain margin of discretion under Article 11 of the DSU in
assessing the credibility and weight to be ascribed to a given piece of
evidence, and that it will “not interfere lightly” with that
discretion. At the same time, the Appellate Body has stated that Article
11 requires panels “to take account of the evidence put before them
and forbids them to wilfully disregard or distort such evidence”. In
carrying out its mandate under Article 11, “a panel has the duty to
examine and consider all the evidence before it, not just the evidence
submitted by one or the other party, and to evaluate the relevance and
probative force of each piece thereof”. Article 11 requires a panel to
consider evidence before it in its totality, which includes
consideration of submitted evidence in relation to other evidence. A
particular piece of evidence, even if not sufficient by itself to
establish an asserted fact or claim, may contribute to establishing that
fact or claim when considered in conjunction with other pieces of
evidence. We also note, in relation to the question of the totality of
the evidence and the burden of proof, the requirement that a complaining
party establish a prima facie case in WTO dispute settlement. As
the Appellate Body has explained, “a prima facie case is one
which, in the absence of effective refutation by the defending party,
requires a panel, as a matter of law, to rule in favour of the
complaining party presenting the prima facie case”.
S.7.4 Article 11 of the DSU — Objective assessment of whether the
investigating authority’s explanation is reasoned and adequate back to top
S.7.4.1 US
— Wheat Gluten, paras. 161-162
(WT/DS166/AB/R)
… We consider that the Panel’s conclusion is at odds with its
treatment and description of the evidence supporting that conclusion. We
do not see how the Panel could conclude that the USITC Report did provide
an adequate explanation of the allocation methodologies, when it is
clear that the Panel itself saw such deficiencies in that Report that it
placed extensive reliance on “clarifications” that were not
contained in the USITC Report.
By reaching a conclusion regarding the USITC Report, which relied so
heavily on supplementary information provided by the United States
during the Panel proceedings
— information not contained in the USITC
Report
— the Panel applied a standard of review which falls short of
what is required by Article 11 of the DSU.
S.7.4.2 US
— Lamb, para. 103
(WT/DS177/AB/R, WT/DS178/AB/R)
Thus, an “objective assessment” of a claim under Article 4.2(a)
of the Agreement on Safeguards has, in principle, two elements.
First, a panel must review whether competent authorities have evaluated all
relevant factors, and, second, a panel must review whether the
authorities have provided a reasoned and adequate explanation of
how the facts support their determination. Thus, the panel’s objective
assessment involves a formal aspect and a substantive aspect.
The formal aspect is whether the competent authorities have evaluated
“all relevant factors”. The substantive aspect is whether the
competent authorities have given a reasoned and adequate explanation for
their determination.
S.7.4.3 US — Lamb, para. 104
(WT/DS177/AB/R, WT/DS178/AB/R)
… Under Article 4.2(a), competent authorities must, as a formal
matter, evaluate “all relevant factors”. However, that evaluation is
not simply a matter of form, and the list of relevant factors to be
evaluated is not a mere “check-list”. …
S.7.4.4 US — Lamb, para. 105
(WT/DS177/AB/R, WT/DS178/AB/R)
It follows that the precise nature of the examination to be conducted
by a panel, in reviewing a claim under Article 4.2 of the Agreement
on Safeguards, stems, in part, from the panel’s obligation to make
an “objective assessment of the matter” under Article 11 of the DSU
and, in part, from the obligations imposed by Article 4.2, to the extent
that those obligations are part of the claim. Thus, as with any claim
under the provisions of a covered agreement, panels are required to
examine, in accordance with Article 11 of the DSU, whether the Member
has complied with the obligations imposed by the particular provisions
identified in the claim. By examining whether the explanation given by
the competent authorities in their published report is reasoned and
adequate, panels can determine whether those authorities have acted
consistently with the obligations imposed by Article 4.2 of the Agreement
on Safeguards.
S.7.4.5 US — Cotton Yarn, para. 74
(WT/DS192/AB/R)
Our Reports in … disputes under the Agreement on Safeguards spell
out key elements of a panel’s standard of review under Article 11 of
the DSU in assessing whether the competent authorities complied with
their obligations in making their determinations. This standard may be
summarized as follows: panels must examine whether the competent
authority has evaluated all relevant factors; they must assess whether
the competent authority has examined all the pertinent facts and
assessed whether an adequate explanation has been provided as to how
those facts support the determination; and they must also consider
whether the competent authority’s explanation addresses fully the
nature and complexities of the data and responds to other plausible
interpretations of the data. However, panels must not conduct a de
novo review of the evidence nor substitute their judgement for that
of the competent authority.
S.7.4.6 US — Countervailing Duty Investigation on DRAMS,
paras.
186-188
(WT/DS296/AB/R)
… we are of the view that the “objective assessment” to be made
by a panel reviewing an investigating authority’s subsidy
determination will be informed by an examination of whether the agency
provided a reasoned and adequate explanation as to: (i) how the evidence
on the record supported its factual findings; and (ii) how those factual
findings supported the overall subsidy determination. Such explanation
should be discernible from the published determination itself. The
explanation provided by the investigating authority
— with respect to
its factual findings as well as its ultimate subsidy determination
— should also address alternative explanations that could reasonably be
drawn from the evidence, as well as the reasons why the agency chose to
discount such alternatives in coming to its conclusions.
… A failure to apply the proper standard of review constitutes
legal error under Article 11 of the DSU.
These general principles reflect the fact that a panel examining a
subsidy determination should bear in mind its role as reviewer of
agency action, rather than as initial trier of fact. Thus, a
panel examining the evidentiary basis for a subsidy determination
should, on the basis of the record evidence before the panel, inquire
whether the evidence and explanation relied on by the investigating
authority reasonably supports its conclusions. In the context of
reviewing individual pieces of evidence, for example, a panel should
focus on issues such as the accuracy of a piece of evidence, or whether
that piece of evidence may reasonably be relied on in support of the
particular inference drawn by the investigating authority. …
S.7.4.7 US
— Softwood Lumber VI (Article 21.5
— Canada),
paras. 93, 95
(WT/DS277/AB/RW,
WT/DS277/AB/RW/Corr.1)
… we examine first the duties that apply to panels in their review
of the factual components of the findings made by investigating
authorities. The Appellate Body has considered these duties on several
previous occasions. It is well established that a panel must neither
conduct a de novo review nor simply defer to the conclusions of
the national authority. A panel’s examination of those conclusions
must be critical and searching, and be based on the information
contained in the record and the explanations given by the authority in
its published report. A panel must examine whether, in the light of the
evidence on the record, the conclusions reached by the investigating
authority are reasoned and adequate. What is “adequate” will
inevitably depend on the facts and circumstances of the case and the
particular claims made, but several general lines of inquiry are likely
to be relevant. The panel’s scrutiny should test whether the reasoning
of the authority is coherent and internally consistent. The panel must
undertake an in-depth examination of whether the explanations given
disclose how the investigating authority treated the facts and evidence
in the record and whether there was positive evidence before it to
support the inferences made and conclusions reached by it. The panel
must examine whether the explanations provided demonstrate that the
investigating authority took proper account of the complexities of the
data before it, and that it explained why it rejected or discounted
alternative explanations and interpretations of the record evidence. A
panel must be open to the possibility that the explanations given by the
authority are not reasoned or adequate in the light of other plausible
alternative explanations, and must take care not to assume itself the
role of initial trier of facts, nor to be passive by “simply accept[ing]
the conclusions of the competent authorities”.
…
In US — Countervailing Duty Investigation on DRAMS
[at
paragraph 184], the Appellate Body further pointed out that the standard
of review to be applied in a given case is also a function of the
substantive provisions of the specific covered agreements that are at
issue in the dispute. In disputes involving a threat of injury
determination under the Anti-Dumping Agreement and the SCM
Agreement, the provisions of the two Agreements relevant to the
standard of review include: Articles 3.1, 3.5, 3.7, 3.8, and 12 of the Anti-Dumping
Agreement; and Articles 15.1, 15.5, 15.7, 15.8, and 22 of the SCM
Agreement.
S.7.4.8 US
— Softwood Lumber VI (Article 21.5
— Canada), para.
97
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
… we observe that it is in the nature of anti-dumping and
countervailing duty investigations that an investigating authority will
gather a variety of information and data from different sources, and
that these may suggest different trends and outcomes. The investigating
authority will inevitably be called upon to reconcile this divergent
information and data. However, the evidentiary path that led to the
inferences and overall conclusions of the investigating authority must
be clearly discernible in the reasoning and explanations found in its
report. When those inferences and conclusions are challenged, it is the
task of a panel to assess whether the explanations provided by the
authority are “reasoned and adequate” by testing the relationship
between the evidence on which the authority relied in drawing specific
inferences, and the coherence of its reasoning. In particular, the panel
must also examine whether the investigating authority’s reasoning
takes sufficient account of conflicting evidence and responds to
competing plausible explanations of that evidence. This task may also
require a panel to consider whether, in analysing the record before it,
the investigating authority evaluated all of the relevant evidence in an
objective and unbiased manner, so as to reach its findings “without
favouring the interests of any interested party, or group of interested
parties, in the investigation”.
S.7.4.9 US — Softwood Lumber VI (Article 21.5
— Canada), para.
98
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
In sum, a panel charged with reviewing the factual basis for a threat
of injury determination must determine whether the investigating
authority has provided “a reasoned and adequate explanation” of:
(a) how individual pieces of evidence can be reasonably relied on in
support of particular inferences, and how the evidence in the record
supports its factual findings;
(b) how the facts in the record, rather than allegation, conjecture,
or remote possibility, support and provide a basis for the overall
threat of injury determination;
(c) how its projections and assumptions show a high degree of
likelihood that the anticipated injury will materialize in the near
future; and
(d) how it examined alternative explanations and interpretations of
the evidence and why it chose to reject or discount such alternatives in
coming to its conclusions.
S.7.4.10 US — Softwood Lumber VI (Article 21.5
— Canada),
para. 99
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
Moreover, the injunction that panels should not substitute their own
conclusions for those of the competent authorities does not mean
that all a panel needs to do in order to comply with its duties when
reviewing a determination is to consider whether the investigating
authority’s findings or conclusions appear to be “reasonable” or
“plausible” in the abstract. To the contrary, a panel can assess
whether an authority’s explanation for its determination is reasoned
and adequate only if the panel critically examines that
explanation in the light of the facts and the alternative explanations
that were before that authority. A panel’s consideration of whether a
certain inference can reasonably be drawn from individual pieces of
evidence and/or from evidence in its totality is one of the means by
which a panel satisfies its duty to examine whether a determination was
based on positive evidence on the record. In its assessment, the panel
should seek to review the determination while giving due regard to the
approach taken by the investigating authority, or it risks constructing
a case different from the one put forward by that authority. Finally, in
its assessment of whether the conclusions reached by an investigating
authority are reasoned and adequate, “[a] panel may not reject an
[investigating authority’s] conclusions simply because the panel would
have arrived at a different outcome if it were making the determination
itself.”
S.7.4.11 US — Softwood Lumber VI (Article 21.5
— Canada),
paras. 107, 109-110
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
According to Canada, … the Panel wrongly “held the investigating
authority to a lower standard of care and explanation on the
grounds that it made a determination of threat rather than a
determination of current material injury” and… “the Panel’s own
review was conducted according to a more deferential standard because it
involved a threat of injury determination”. …
…
… we are not persuaded that the Panel’s statements amount to a
denial of the high standard that applies to a threat of injury
determination. In particular, the excerpt from the Panel Report relied
upon by Canada does not seem, to us, to be inconsistent with the
requirement that the reasoning set out by an investigating authority
making a determination of threat of injury must clearly disclose the
assumptions and extrapolations that were made, on the basis of the
record evidence, regarding future occurrences. Nor are the Panel’s
statements inconsistent with the requirements that the reasoning of the
investigating authority demonstrate that such assumptions and
extrapolations were based on positive evidence and not merely on
allegation, conjecture, or remote possibility; and show a high degree of
likelihood that projected occurrences will occur.
At the same time, the Panel’s reasoning does raise two concerns.
First, the Panel stated that “predictions based on the observed facts
may be less susceptible to being found, on review by a panel, to be
outside the range of conclusions that might be reached by an unbiased
and objective decision maker on the basis of the facts and in light of
the explanations given”. Taken at face value, this could imply a
greater likelihood of panels upholding a threat of injury
determination, as compared to a determination of current material
injury, when those determinations rest on the same level of evidence.
Any such implication would be erroneous, but we do not view the Panel’s
statement as having such an implication. Of somewhat greater concern,
however, is the Panel’s statement that the “possible range of
reasonable predictions of the future that may be drawn based on
the observed events of the period of investigation may be broader than
the range of reasonable conclusions concerning the present that might be
drawn based on those same facts”. We are not persuaded that, in making
this observation, the Panel intended to express the view that a threat
of injury determination must be upheld if the investigating authority’s
report discloses the occurrence of injury as one reasonable prediction
within the possible range of future occurrences. If this were the Panel’s
view, then it would be erroneous.
S.7.4.12 US
— Softwood Lumber VI (Article 21.5
— Canada),
paras. 112-113
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
We are not persuaded that the Panel erred in stating that its task
was to consider “whether the conclusions reached, in light of the
explanations given, were such as could have been reached by an
unbiased and objective decision maker based on the facts”. Indeed,
such a standard is consistent with previous Appellate Body statements on
the standard of review, including the appeal in US
— Countervailing
Duty Investigation on DRAMS, upon which the Panel relied. We do not,
however, consider the Panel’s repeated findings, that it had not been
demonstrated that an objective and unbiased authority “could not”
have reached the same conclusion that the USITC had reached, as
amounting to the same standard.
Similarly, although we consider that a panel would be acting
consistently with the applicable standard of review if it sets out to
determine whether an objective and unbiased authority could reasonably
find that a particular piece of evidence supports an intermediate
factual finding, we are not persuaded that this is the same as the Panel’s
version of this standard, which appears simply to involve testing
whether the USITC’s conclusions were “not unreasonable”. In our
view, the Panel’s repeated references to the USITC’s conclusions as
“not unreasonable” suggest that the Panel applied an insufficient
degree of scrutiny to the Section 129 Determination and failed to engage
in the type of critical and searching analysis called for by Article 11
of the DSU. Inquiring into whether an authority’s finding is “not
unreasonable” does not, in our view, necessarily answer the question
of whether that finding is based on positive evidence rather than
conjecture or remote possibility.
S.7.4.13 US — Softwood Lumber VI (Article 21.5
— Canada),
para. 117
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
In our view, a panel is not compelled under Article 11 to “automatically
reject” the explanation given by an investigating authority merely
because a plausible alternative explanation has been proffered. At the
same time, a panel may find the investigating authority’s explanation
inadequate when, even though that explanation seemed “reasoned and
adequate” at the outset, or in the abstract, it no longer seems so
when viewed in the light of the plausible alternatives. In other words,
it is not the mere existence of plausible alternatives that renders the
investigating authority’s explanation “implausible”. Rather, in
undertaking its review of a determination, including the authority’s
evaluation (or lack thereof) of alternative interpretations of the
evidence, a panel may conclude that conclusions that initially, or in
the abstract, seemed “reasoned and adequate” can no longer be
characterized as such.
S.7.4.14 US — Softwood Lumber VI (Article 21.5
— Canada),
para. 137
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
… The Panel examined, separately, the various USITC findings
challenged by Canada, but did not undertake any assessment of whether
the totality of the factors and evidence considered supported the
ultimate finding of a threat of material injury. In neglecting this
aspect of its review, the Panel does not seem to have taken account of
the express requirement in Article 3.7 of the Anti-Dumping Agreement and
Article 15.7 of the SCM Agreement that “the totality of
the factors considered must lead to the conclusion that further
[dumped/subsidized] exports are imminent and that, unless protective
action is taken, material injury would occur” (emphasis added). This
neglect is particularly striking given that the original panel
recognized the need to undertake such an analysis, and the Panel asked
Canada a specific question in this regard.
S.7.4.15 US — Softwood Lumber VI (Article 21.5
— Canada),
para. 138
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
In sum, the Panel’s analysis, viewed as a whole, reveals a number
of serious infirmities in the standard of review that it articulated and
applied in assessing the consistency of the Section 129 Determination
with Articles 3.5 and 3.7 of the Anti-Dumping Agreement and
Articles 15.5 and 15.7 of the SCM Agreement. First, the Panel’s
repeated reliance on the test that Canada had not demonstrated
that an objective and unbiased authority “could not” have reached
the conclusion that the USITC did, is at odds with the standard of
review that has been articulated by the Appellate Body in previous
reports. As we noted earlier, the standard applied by the Panel imposes
an undue burden on the complaining party. Secondly, the “not
unreasonable” standard employed by the Panel at various reprises is
also inconsistent with the standard of review that has been articulated
by the Appellate Body in previous reports, and it is even more so for
ultimate findings as opposed to intermediate inferences made from
particular pieces of evidence. Thirdly, the Panel did not conduct a
critical and searching analysis of the USITC’s findings in order to
test whether they were properly supported by evidence on the record and
were “reasoned and adequate” in the light of alternative
explanations of that evidence. Fourthly, the Panel failed to conduct an
analysis of whether the totality of the factors and evidence considered
by the USITC supported the ultimate finding of a threat of material
injury.
S.7.4.16 Japan — DRAMs (Korea), para. 159
(WT/DS336/AB/R, WT/DS336/AB/R/Corr.1)
In our view, it follows from the requirement that the investigating
authority provide a reasoned and adequate explanation for its
conclusions, that the underlying rationale behind those conclusions be
set out in the investigating authority’s determination. It is on the
basis of the rationale or explanation provided by the investigating
authority that a panel must examine the consistency of the determination
with a covered agreement, including whether the investigating authority
has adequately explained how the facts support the determination it has
made. Just as a panel must focus in its review on the rationale or
explanation provided by the investigating authority in its report, so,
too, is the respondent Member precluded during the panel proceedings
from offering a new rationale or explanation ex post to justify
the investigating authority’s determination.
S.7.5 Article 11 of the DSU — No de novo review back to top
S.7.5.1 US
— Lamb, paras. 106-107
(WT/DS177/AB/R, WT/DS178/AB/R)
We wish to emphasize that, although panels are not entitled to
conduct a de novo review of the evidence, nor to substitute their
own conclusions for those of the competent authorities, this does not
mean that panels must simply accept the conclusions of the
competent authorities. To the contrary, in our view, in examining a
claim under Article 4.2(a), a panel can assess whether the competent
authorities’ explanation for its determination is reasoned and
adequate only if the panel critically examines that explanation,
in depth, and in the light of the facts before the panel. Panels must,
therefore, review whether the competent authorities’ explanation fully
addresses the nature, and, especially, the complexities, of the data,
and responds to other plausible interpretations of that data. A panel
must find, in particular, that an explanation is not reasoned, or is not
adequate, if some alternative explanation of the facts is
plausible, and if the competent authorities’ explanation does not seem
adequate in the light of that alternative explanation. Thus, in making
an “objective assessment” of a claim under Article 4.2(a), panels
must be open to the possibility that the explanation given by the
competent authorities is not reasoned or adequate.
In this respect, the phrase “de novo review” should not be
used loosely. If a panel concludes that the competent authorities, in a
particular case, have not provided a reasoned or adequate
explanation for their determination, that panel has not, thereby,
engaged in a de novo review. Nor has that panel substituted its
own conclusions for those of the competent authorities. Rather, the
panel has, consistent with its obligations under the DSU, simply reached
a conclusion that the determination made by the competent authorities is
inconsistent with the specific requirements of Article 4.2 of the Agreement
on Safeguards.
S.7.5.2 US
— Lamb, para. 113
(WT/DS177/AB/R, WT/DS178/AB/R)
… In arguing claims in dispute settlement, a WTO Member is
not confined merely to rehearsing arguments that were made to the
competent authorities by the interested parties during the
domestic investigation, even if the WTO Member was itself an interested
party in that investigation. Likewise, panels are not obliged to
determine, and confirm themselves the nature and character of the
arguments made by the interested parties to the competent authorities.
Arguments before national competent authorities may be influenced by,
and focused on, the requirements of the national laws, regulations and
procedures. On the other hand, dispute settlement proceedings brought
under the DSU concerning safeguard measures imposed under the Agreement
on Safeguards may involve arguments that were not submitted to the
competent authorities by the interested parties.
S.7.5.3 US — Steel Safeguards,
paras. 298-299
(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)
… A panel must not be left to wonder why a safeguard measure
has been applied.
It is precisely by “setting forth findings and reasoned conclusions
on all pertinent issues of fact and law”, under Article 3.1, and by
providing “a detailed analysis of the case under investigation as well
as a demonstration of the relevance of the factors examined”, under
Article 4.2(c), that competent authorities provide panels with the basis
to “make an objective assessment of the matter before it” in
accordance with Article 11. As we have said before, a panel may not
conduct a de novo review of the evidence or substitute its
judgement for that of the competent authorities. Therefore, the “reasoned
conclusions” and “detailed analysis” as well as “a demonstration
of the relevance of the factors examined” that are contained in the
report of a competent authority, are the only bases on which a panel may
assess whether a competent authority has complied with its obligations
under the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994. This is all the more reason why they must be made explicit by
a competent authority.
S.7.5.4 US
— Steel Safeguards, para. 303
(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)
… we cannot accept the United States’ interpretation that a
failure to explain a finding does not support the conclusion that the
USITC “did not actually perform the analysis correctly, thereby
breaching Article 2.1, 4.2, or 4.2(b) [of the Agreement on Safeguards]”.
As we stated above, because a panel may not conduct a de novo review
of the evidence before the competent authority, it is the explanation
given by the competent authority for its determination that alone
enables panels to determine whether there has been compliance with the
requirements of Article XIX of the GATT 1994 and of Articles 2 and 4 of
the Agreement on Safeguards. It may well be that, as the United
States argues, the competent authorities have performed the appropriate
analysis correctly. However, where a competent authority has not
provided a reasoned and adequate explanation to support its
determination, the panel is not in a position to conclude that the
relevant requirement for applying a safeguard measure has been fulfilled
by that competent authority. …
S.7.5.5 US — Countervailing Duty Investigation on DRAMS, para.
150
(WT/DS296/AB/R)
In our view, having accepted an investigating authority’s approach,
a panel normally should examine the probative value of a piece of
evidence in a similar manner to that followed by the investigating
authority. Moreover, if, as here, an investigating authority relies on
individual pieces of circumstantial evidence viewed together as support
for a finding of entrustment or direction, a panel reviewing such a
determination normally should consider that evidence in its totality,
rather than individually, in order to assess its probative value with
respect to the agency’s determination. Indeed, requiring that each
piece of circumstantial evidence, on its own, establish entrustment or
direction effectively precludes an agency from finding entrustment or
direction on the basis of circumstantial evidence. Individual pieces of
circumstantial evidence, by their very nature, are not likely to
establish a proposition, unless and until viewed in conjunction with
other pieces of evidence.
S.7.5.6 US — Countervailing Duty Investigation on DRAMS, paras.
187-189
(WT/DS296/AB/R)
A panel may not reject an agency’s conclusions simply because the
panel would have arrived at a different outcome if it were making the
determination itself. In addition, in the absence of an allegation that
the agency failed to investigate sufficiently or to collect certain
information, a panel must limit its examination to the evidence that was
before the agency during the course of the investigation, and must take
into account all such evidence submitted by the parties to the dispute.
In other words, a panel may not conduct a de novo review of the
evidence or substitute its judgement for that of the investigating
authority. …
… the Panel in this case examined whether certain pieces of
evidence were sufficient to establish certain conclusions that the USDOC
did not seek to draw, at least solely on the basis of those pieces of
evidence. Moreover, it failed to examine the evidence in its totality.
The Panel thus failed to assess the agency’s determination. Instead,
the Panel’s examination reflected its own view of whether entrustment
or direction existed in this case; the Panel thereby engaged,
improperly, in a de novo review of the evidence before the
agency.
Furthermore, with respect to the Panel’s refusal to admit certain
evidence submitted by the United States, we note that the Panel did not
indicate that the evidence was not contained in the record of the
underlying investigation. Nevertheless, the Panel excluded such evidence
from its consideration in the absence of any legal basis to do so. In
addition, the Panel erred in concluding that the USDOC should have been
aware of a fact that was not reasonably based on evidence in the agency
record, namely, that three creditors exercised mediation rights under
the CRPA. In so doing, the Panel essentially “second-guessed” the
investigating authority’s analysis of the evidence and thus
overstepped the bounds of its review.
S.7.5.7 US
— Softwood Lumber VI (Article 21.5
— Canada), para.
99
(WT/DS277/AB/RW, WT/DS277/AB/RW/Corr.1)
Moreover, the injunction that panels should not substitute their own
conclusions for those of the competent authorities does not mean
that all a panel needs to do in order to comply with its duties when
reviewing a determination is to consider whether the investigating
authority’s findings or conclusions appear to be “reasonable” or
“plausible” in the abstract. To the contrary, a panel can assess
whether an authority’s explanation for its determination is reasoned
and adequate only if the panel critically examines that
explanation in the light of the facts and the alternative explanations
that were before that authority. A panel’s consideration of whether a
certain inference can reasonably be drawn from individual pieces of
evidence and/or from evidence in its totality is one of the means by
which a panel satisfies its duty to examine whether a determination was
based on positive evidence on the record. In its assessment, the panel
should seek to review the determination while giving due regard to the
approach taken by the investigating authority, or it risks constructing
a case different from the one put forward by that authority. Finally, in
its assessment of whether the conclusions reached by an investigating
authority are reasoned and adequate, “[a] panel may not reject an
[investigating authority’s] conclusions simply because the panel would
have arrived at a different outcome if it were making the determination
itself.”
S.7.6 Article 11 of the DSU — Temporal scope of
review back to top
S.7.6.1 US
— Cotton Yarn, paras. 76-79
(WT/DS192/AB/R)
Unlike Article 3 of the Agreement on Safeguards, which
provides explicitly for an investigation by competent authorities of a
Member, Article 6 of the ATC does not specify either the organ or
the procedure through which a Member makes its “determination”.
Nevertheless, the above principles concerning the standard of review
under Article 11 of the DSU with respect to the Agreement on
Safeguards apply equally, in our view, to a panel’s review of a
Member’s determination under Article 6 of the ATC. We note that
Article 6 does not require the participation of all interested parties
in the process leading to the determination. We consider, therefore,
that the exercise of due diligence by a Member is all the more important
in reaching a determination under Article 6 of the ATC.
The exercise of due diligence by a Member cannot imply, however, the
examination of evidence that did not exist and that, therefore, could
not possibly have been taken into account when the Member made its
determination. The demonstration by a Member that a particular product
is being imported into its territory in such increased quantities as to
cause serious damage (or actual threat thereof) to the domestic industry
can be based only on facts and evidence which existed at the time the
determination was made. The urgent nature of such an investigation may
not permit the Member to delay its determination in order to take into
account evidence that might be available only at a future date. Even a
determination on the existence of threat of serious injury must be based
on projections extrapolating from existing data.
In our view, a panel reviewing the due diligence exercised by
a Member in making its determination under Article 6 of the ATC has
to put itself in the place of that Member at the time it makes its
determination. Consequently, a panel must not consider evidence which
did not exist at that point in time. A Member cannot, of course,
be faulted for not having taken into account what it could not have
known when making its determination. If a panel were to examine such
evidence, the panel would, in effect, be conducting a de novo review
and it would be doing so without having had the benefit of the views of
the interested parties. The panel would be assessing the due diligence
of a Member in reaching its conclusions and making its projections with
the benefit of hindsight and would, in effect, be reinvestigating the
market situation and substituting its own judgement for that of the
Member. In our view, this would be inconsistent with the standard of a
panel’s review under Article 11 of the DSU.
Moreover, if a Member that has exercised due diligence in complying
with its obligations of investigation, evaluation and explanation, were
held responsible before a panel for what it could not have known at
the time it made its determination, this would undermine the right
afforded to importing Members under Article 6 to take transitional
safeguard action when the determination demonstrates the fulfilment of
the specific conditions provided for in this Article.
S.7.6.2 US
— Countervailing Duty Investigation on DRAMS, para.
175
(WT/DS296/AB/R)
… The Appellate Body has stated previously that, when assessing an
investigating authority’s determination, a panel may not fault the
agency for failing to take into account facts that it could not
reasonably have known. A panel must therefore limit its examination to
the facts that the agency should have discerned from the evidence on
record. Where a panel reads evidence with the “benefit of hindsight”,
it fails to consider how the evidence should have fairly been understood
at the time of the investigation, and thereby fails to make an “objective
assessment” in accordance with Article 11 of the DSU.
S.7.6.3 EC — Selected Customs Matters, paras. 186, 188
(WT/DS315/AB/R)
We agree with the conclusion of the Panel that “the steps and acts
of administration that pre-date or post-date the establishment of a
panel may be relevant to determining whether or not a violation of
Article X:3(a) of the GATT 1994 exists at the time of establishment”.
…
…
In order to determine whether the measures at issue have been
administered at the time of the Panel’s establishment in a manner that
is inconsistent with Article X:3(a) of the GATT 1994, the Panel was …
entitled to rely on evidence of acts of administration. Thus, it
is important to distinguish between, on the one hand, the measures at
issue and, on the other hand, acts of administration that have been
presented as evidence to substantiate the claim that the measures at
issue are administered in a manner inconsistent with Article X:3(a) of
the GATT 1994. The Panel failed to make the distinction between measures
and pieces of evidence. While there are temporal limitations
on the measures that may be within a panel’s terms of reference, such
limitations do not apply in the same way to evidence. Evidence in
support of a claim challenging measures that are within a panel’s
terms of reference may pre-date or post-date the establishment of the
panel. A panel is not precluded from assessing a piece of evidence for
the mere reason that it pre-dates or post-dates its establishment. In
this case, the United States was not precluded from presenting evidence
relating to acts of administration before and after the date of Panel
establishment. A panel enjoys a certain discretion to determine the
relevance and probative value of a piece of evidence that pre-dates or
post-dates its establishment.
S.7.6.4 EC — Selected Customs Matters, para. 254
(WT/DS315/AB/R)
… In our view, the Panel did not err in referring, in its analysis,
to “evidence related to instances of administration which occurred
after its establishment” [that is to say, in March 2005], because this
evidence was relevant to the task of determining whether there was a
violation of Article X:3(a) at the time of the establishment of the
Panel. The Dutch decree of 8 July 2005 and the German BTI of 19 July
2005 had come into existence within a short time after the establishment
of the Panel. In our view, it was not unreasonable for the Panel to
consider that this evidence was relevant for assessing how the measures
at issue were administered at the time the Panel was established. …
S.7.6.5 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5
— Argentina), paras. 167-168
(WT/DS268/AB/RW)
… Therefore, we do not consider that Articles 11.3 and 11.4 address
the specific question of whether an investigating authority can develop
a new evidentiary basis when implementing DSB recommendations and
rulings.
Neither do Articles 11.3 and 11.4 provide a basis for drawing a
distinction between allowing an investigating authority to clarify
information, or provide further explanations, on the one hand, and to
develop a new factual basis, on the other hand. …
S.7.7 Article 11 of the DSU “make such other findings [to] assist
the DSB… in giving the rulings” back to top
S.7.7.1 EC
— Export Subsidies on Sugar, para. 331
(WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R)
Thus, in addition to ruling on the matter before it, a panel is
required [under Article 11 of the DSU] to “make such other findings as
will assist the DSB in making the recommendations or in giving the
rulings provided for in the covered agreements”. Such “other
findings” could, for instance, relate to implementation, to the extent
that such findings “will assist the DSB in making the recommendations
or in giving the rulings provided for in the covered agreements”.
S.7.7.2 EC — Export Subsidies on Sugar, para. 335
(WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R)
In this case, the Panel’s findings under Articles 3 and 8 of the Agreement
on Agriculture were not sufficient to “fully resolve” the
dispute. This is because, in declining to rule on the Complaining
Parties’ claims under Article 3 of the SCM Agreement, the Panel
precluded the possibility of a remedy being made available to the
Complaining Parties, pursuant to Article 4.7 of the SCM Agreement,
in the event of the Panel finding in favour of the Complaining Parties
with respect to their claims under Article 3 of the SCM Agreement.
Moreover, in declining to rule on the Complaining Parties’ claims
under Article 3 of the SCM Agreement, the Panel failed to
discharge its obligation under Article 11 of the DSU by failing to make
“such other findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered
agreements”, namely, a recommendation or ruling by the DSB pursuant to
Article 4.7. This constitutes false judicial economy and legal error.
S.7.7.3 US — Stainless Steel (Mexico), para. 76
(WT/DS344/AB/R)
… we recall that the standard of review applicable to disputes
under the Anti-Dumping Agreement is set out in both Article 11
of the DSU and Article 17.6 of the Anti-Dumping Agreement. As
regards issues of legal interpretation, Article 17.6(ii) provides that:
[a] panel shall interpret the relevant provisions of the Agreement in
accordance with customary rules of interpretation of public
international law. Where the panel finds that a relevant provision of
the Agreement admits of more than one permissible interpretation, the
panel shall find the authorities’ measure to be in conformity with the
Agreement if it rests upon one of those permissible interpretations.
The Appellate Body has noted that the customary rules of
interpretation of public international law as codified in Articles 31
and 32 of the Vienna Convention apply to the interpretation of
the Anti-Dumping Agreement. The Appellate Body has recognized
that the second sentence of Article 17.6(ii):
… presupposes that application of the rules of treaty
interpretation in Articles 31 and 32 of the Vienna Convention could
give rise to, at least, two interpretations of some provisions of the Anti-Dumping
Agreement, which, under that Convention, would both be “permissible
interpretations”. In that event, a measure is deemed to be in
conformity with the Anti-Dumping Agreement “if it rests upon
one of those permissible interpretations”. (original emphasis)
In our analysis, we therefore bear in mind that there could be more
than one permissible interpretation of a provision of the Anti-Dumping
Agreement.
S.7.8 Standard of Review: Article 11 of the DSU —
Risk assessment
under Article 5.1 of the SPS Agreement back to top
S.7.8.1 US
— Continued Suspension / Canada
— Continued Suspension, paras. 590-592
(WT/DS320/AB/R, WT/DS321/AB/R)
A panel reviewing the consistency of an SPS measure with Article 5.1
must determine whether that SPS measure is “based on” a risk
assessment. It is the WTO Member’s task to perform the risk
assessment. The panel’s task is to review that risk assessment. Where
a panel goes beyond this limited mandate and acts as a risk assessor, it
would be substituting its own scientific judgement for that of the risk
assessor and making a de novo review and, consequently, would
exceed its functions under Article 11 of the DSU. Therefore, the review
power of a panel is not to determine whether the risk assessment
undertaken by a WTO Member is correct, but rather to determine whether
that risk assessment is supported by coherent reasoning and respectable
scientific evidence and is, in this sense, objectively justifiable.
The Appellate Body has observed that a WTO Member may properly base
an SPS measure on divergent or minority views, as long as these views
are from qualified and respected sources. This must be taken into
account in defining a panel’s standard of review. Accordingly, a panel
reviewing the consistency of an SPS measure with Article 5.1 of the SPS
Agreement must, first, identify the scientific basis upon which the
SPS measure was adopted. This scientific basis need not reflect the
majority view within the scientific community but may reflect divergent
or minority views. Having identified the scientific basis underlying the
SPS measure, the panel must then verify that the scientific basis comes
from a respected and qualified source. Although the scientific basis
need not represent the majority view within the scientific community, it
must nevertheless have the necessary scientific and methodological
rigour to be considered reputable science. In other words, while the
correctness of the views need not have been accepted by the broader
scientific community, the views must be considered to be legitimate
science according to the standards of the relevant scientific community.
A panel should also assess whether the reasoning articulated on the
basis of the scientific evidence is objective and coherent. In other
words, a panel should review whether the particular conclusions drawn by
the Member assessing the risk find sufficient support in the scientific
evidence relied upon. Finally, the panel must determine whether the
results of the risk assessment “sufficiently warrant” the SPS
measure at issue. Here, again, the scientific basis cited as warranting
the SPS measure need not reflect the majority view of the scientific
community provided that it comes from a qualified and respected source.
A panel may and should rely on the advice of experts in reviewing a
WTO Member’s SPS measure, in accordance with Article 11.2 of the SPS
Agreement and Article 13.1 of the DSU. In doing so, however, a panel
must respect the due process rights of the parties. Moreover, a panel
may not rely on the experts to go beyond its limited mandate of review.
The purpose of a panel consulting with experts is not to perform its own
risk assessment. The role of the experts must reflect the limited task
of a panel. The panel may seek the experts’ assistance in order to
identify the scientific basis of the SPS measure and to verify that this
scientific basis comes from a qualified and respected source,
irrespective of whether it represents minority or majority scientific
views. It may also rely on the experts to review whether the reasoning
articulated on the basis of the scientific evidence is objective and
coherent, and whether the particular conclusions drawn by the Member
assessing the risk find sufficient support in the evidence. The experts
may also be consulted on the relationship between the risk assessment
and the SPS measure in order to assist the panel in determining whether
the risk assessment “sufficiently warrants” the SPS measure. The
consultations with the experts, however, should not seek to test whether
the experts would have done a risk assessment in the same way and would
have reached the same conclusions as the risk assessor. In other words,
the assistance of the experts is constrained by the kind of review that
the panel is required to undertake.
S.7.8.2 US
— Continued Suspension / Canada
— Continued Suspension, paras. 594-598
(WT/DS320/AB/R, WT/DS321/AB/R)
Next, the Panel referred to its consultations with scientific
experts, noting that it had consulted six scientific experts
individually, and not as an expert review group. The Panel stated that:
Although the Panel is not carrying out its own risk assessment, its
situation is similar in that it may benefit from hearing the full
spectrum of experts’ views and thus obtain a more complete picture
both of the mainstream scientific opinion and of any divergent views.
The analogy that the Panel draws between its situation and that of a
risk assessor is unfortunate, but is not in itself a sufficient
indication that the Panel incorrectly understood the applicable standard
of review. We do not think that the Panel meant to suggest that it saw
its task under Article 5.1 as requiring it to perform a risk assessment.
At the beginning of the statement, the Panel expressly recognizes that
it “is not carrying out its own risk assessment”.
The Panel then elaborated on the approach it would take in respect of
the testimony of the experts:
We note that, in some circumstances, only one or two experts have
expressed their views on an issue. Sometimes these views were similar or
complemented each other. In other circumstances, a larger number of
experts expressed opinions and, sometimes, they expressed diverging
opinions. While, on some occasions, we followed the majority of experts
expressing concurrent views, in some others the divergence of views were
such that we could not follow that approach and decided to accept the
position(s) which appeared, in our view, to be the most specific in
relation to the question at issue and to be best supported by arguments
and evidence. (footnotes omitted)
The European Communities submits that “the majority view is not
probative simply because it represents the majority”. We agree that
automatically giving more weight to the testimony of the majority of
experts would be too rigid an approach. The fact that a majority in the
spectrum of the scientific experts consulted by the Panel had a
particular view is not a proper basis for determining whether a WTO
Member’s risk assessment complies with the requirements of Article 5.1
and Annex A of the SPS Agreement.
Looking at the Panel’s analysis of whether the European Communities
specifically assessed the risks arising from the consumption of meat
from cattle treated with oestradiol-17β, we note that a significant
portion of the Panel’s reasoning consists of summaries of the
responses of the experts. It is only after summarizing the experts’
responses that the Panel describes some of the issues discussed in the
1999 Opinion. Given the applicable standard of review and the role of
the Panel that is determined by it, the Panel’s analysis should have
proceeded differently. The Panel should have first looked at the
European Communities’ risk assessment. It should then have determined
whether the scientific basis relied upon in that risk assessment came
from a respected and qualified source. The Panel should have sought
assistance from the scientific experts in confirming that it had
properly identified the scientific basis underlying the European
Communities’ risk assessment or to determine whether that scientific
basis originated in a respected and qualified source. The Panel should
also have sought the experts’ assistance in determining whether the
reasoning articulated by the European Communities on the basis of the
scientific evidence is objective and coherent, so that the conclusions
reached in the risk assessment sufficiently warrant the SPS measure.
Instead, the Panel seems to have conducted a survey of the advice
presented by the scientific experts and based its decisions on whether
the majority of the experts, or the opinion that was most thoroughly
reasoned or specific to the question at issue, agreed with the
conclusion drawn in the European Communities’ risk assessment. This
approach is not consistent with the applicable standard of review under
the SPS Agreement.
S.7.8.3 US
— Continued Suspension / Canada
— Continued Suspension,
paras, 601-602,
(WT/DS320/AB/R, WT/DS321/AB/R)
Following the approach that we outlined earlier regarding the
applicable standard of review, the first
step in the Panel’s analysis should have been to identify what in the
European Communities’ risk assessment was the scientific basis for the
conclusions on the genotoxicity of oestradiol-17β; verify whether
this scientific basis came from a respected and qualified source;
and determine whether the reasoning articulated on the basis of that
scientific evidence is objective and coherent. As a second step, the
Panel should have pursued a similar inquiry concerning the conclusion
that the genotoxicity of oestradiol-17β
did not permit the establishment of a threshold, as the European
Communities submits. In that context, the Panel would have sought the
experts’ view as to whether the conclusions reached by the European
Communities can find support in the scientific evidence relied
upon by the European Communities (even if the expert in question was of
a different scientific view).
… However, under the applicable standard of review, neither the
Panel nor the experts it consulted were called upon to evaluate the
correctness of the European Communities’ risk assessment. The Panel’s
role was more limited and consisted, as we explained earlier, of
identifying the scientific basis and evidence relied upon in the risk
assessment; verifying that the scientific evidence comes from respected
and qualified sources; and determining whether the reasoning articulated
by the European Communities on the basis of the scientific evidence is
objective and coherent.
S.7.8.4 US
— Continued Suspension / Canada
— Continued Suspension, paras. 614-615
(WT/DS320/AB/R, WT/DS321/AB/R)
… It was not the Panel’s task, much less that of the experts that
the Panel consulted, to determine whether there is an appreciable risk
of cancer arising from the consumption of meat from cattle treated with oestradiol-17β.
Instead, the Panel was called upon to review the European Communities’
risk assessment.
… We have found that the Panel did not apply the proper standard of
review. This is a legal error and does not fall within the authority of
the Panel as the trier of facts. Moreover, we have found instances in
which the Panel exceeded its authority in the assessment of the
testimony of the scientific experts. By merely reproducing testimony of
some experts that would appear to be favourable to the European
Communities’ position, without addressing its significance, the Panel
effectively disregarded evidence that was potentially relevant for the
European Communities’ case. This cannot be reconciled with the Panel’s
duty to make an “objective assessment of the facts of the case”
pursuant to Article 11 of the DSU.
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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