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REPERTORY OF APPELLATE BODY REPORTS

Standard of Review


ON THIS PAGE:

General
Article 11 of the DSU — Objective assessment of the matter
Article 11 of the DSU — Objective assessment of the measure
Article 11 of the DSU — Objective assessment of the facts
Article 11 of the DSU — Objective assessment of whether the investigating authority’s explanation is reasoned and adequate
Article 11 of the DSU — No de novo review
Article 11 of the DSU — Temporal scope of review
> Article 11 of the DSU — “make such other findings [to] assist the DSB … in giving the rulings”


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’sassessment 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.7.2 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)

… 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)

… 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)

… 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)

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.7.2A 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] of error 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 Exhibit ARG-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.7.3 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 egal 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 StatesImport Prohibition of Certain Shrimp and Shrimp Products (“United StatesShrimp”), 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 —f 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 analyzing 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)

… 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.7.4 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.7.5 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.7.6 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.7.7 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.

 


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