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REPERTORY OF APPELLATE BODY REPORTS

Terms of Reference of Panels


ON THIS PAGE:

General
Claims and legal basis of the complaint. See also Burden of Proof, General (B.3.1); Claims and Arguments (C.1); Enabling Clause (E.1); Judicial Economy (J.1); Jurisdiction (J.2); Request for the Establishment of a Panel, Article 6.2 of the DSU — Claims and legal basis of the complaint (R.2.2)
Specific measure at issue. See also Burden of Proof (B.3); Jurisdiction (J.2); Legislation as such vs. Specific Application (L.1); Mandatory and Discretionary Legislation (M.1); Request for the Establishment of a Panel — Specific measures at issue (R.2.3)
“Post suspension of concessions”. See also Suspension of Concessions or Other Obligations (S.9)


T.6.1 General     back to top

T.6.1.1 Brazil — Desiccated Coconut, p. 22, DSR 1997:I, p. 167 at 186
(WT/DS22/AB/R)

 

A panel’s terms of reference are important for two reasons. First, terms of reference fulfil an important due process objective — they give the parties and third parties sufficient information concerning the claims at issue in the dispute in order to allow them an opportunity to respond to the complainant’s case. Second, they establish the jurisdiction of the panel by defining the precise claims at issue in the dispute.

 

T.6.1.2 Brazil — Desiccated Coconut, p. 22, DSR 1997:I, p. 167 at 186
(WT/DS22/AB/R)

 

… the “matter” referred to a panel for consideration consists of the specific claims stated by the parties to the dispute in the relevant documents specified in the terms of reference. We agree with the approach taken in previous adopted panel reports that a matter, which includes the claims composing that matter, does not fall within a panel’s terms of reference unless the claims are identified in the documents referred to or contained in the terms of reference.

 

T.6.1.3 EC — Bananas III, para. 142
(WT/DS27/AB/R)

 

We recognize that a panel request will usually be approved automatically at the DSB meeting following the meeting at which the request first appears on the DSB’s agenda. As a panel request is normally not subjected to detailed scrutiny by the DSB, it is incumbent upon a panel to examine the request for the establishment of the panel very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU. It is important that a panel request be sufficiently precise for two reasons: first, it often forms the basis for the terms of reference of the panel pursuant to Article 7 of the DSU; and, second, it informs the defending party and the third parties of the legal basis of the complaint.

 

T.6.1.4 India — Patents (US), para. 94
(WT/DS50/AB/R)

 

All parties engaged in dispute settlement under the DSU must be fully forthcoming from the very beginning both as to the claims involved in a dispute and as to the facts relating to those claims. Claims must be stated clearly. Facts must be disclosed freely. This must be so in consultations as well as in the more formal setting of panel proceedings. In fact, the demands of due process that are implicit in the DSU make this especially necessary during consultations. For the claims that are made and the facts that are established during consultations do much to shape the substance and the scope of subsequent panel proceedings. If, in the aftermath of consultations, any party believes that all the pertinent facts relating to a claim are, for any reason, not before the panel, then that party should ask the panel in that case to engage in additional fact-finding. But this additional fact-finding cannot alter the claims that are before the panel — because it cannot alter the panel’s terms of reference. And, in the absence of the inclusion of a claim in the terms of reference, a panel must neither be expected nor permitted to modify rules in the DSU.

 

T.6.1.5 Guatemala — Cement I, para. 72
(WT/DS60/AB/R)

 

… Thus, “the matter referred to the DSB” for the purposes of Article 7 of the DSU and Article 17.4 of the Anti-Dumping Agreement must be the “matter” identified in the request for the establishment of a panel under Article 6.2 of the DSU. That provision requires the complaining Member, in a panel request, to “identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly” (emphasis added). The “matter referred to the DSB”, therefore, consists of two elements: the specific measures at issue and the legal basis of the complaint (or the claims).

 

T.6.1.6 Guatemala — Cement I, para. 76
(WT/DS60/AB/R)

 

… the word “matter” has the same meaning in Article 17 of the Anti-Dumping Agreement as it has in Article 7 of the DSU. It consists of two elements: the specific “measure” and the “claims” relating to it, both of which must be properly identified in a panel request as required by Article 6.2 of the DSU.

 

T.6.1.7 Korea — Dairy, para. 120
(WT/DS98/AB/R)

 

… When parsed into its constituent parts, Article 6.2 may be seen to impose the following requirements. The request must: (i) be in writing; (ii) indicate whether consultations were held; (ii) identify the specific measures at issue; and (iii) provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. In its fourth requirement, Article 6.2 demands only a summary — and it may be a brief one — of the legal basis of the complaint; but the summary must, in any event, be one that is “sufficient to present the problem clearly”. It is not enough, in other words, that “the legal basis of the complaint” is summarily identified; the identification must “present the problem clearly”.

 

T.6.1.8 US — Carbon Steel, para. 123
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)

 

… we have consistently held that, in the interests of due process, parties should bring alleged procedural deficiencies to the attention of a panel at the earliest possible opportunity. In this case, we see no reason to disagree with the Panel’s view that the United States’ objection was not raised in a timely manner. At the same time, however, as we have observed previously, certain issues going to the jurisdiction of a panel are so fundamental that they may be considered at any stage in a proceeding. In our view, the Panel was correct, therefore, in turning to consider its terms of reference and in satisfying itself as to its jurisdiction with respect to this matter.

 

T.6.1.9 US — Carbon Steel, paras. 124-125
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)

 

… pursuant to Article 7 of the DSU, a panel’s terms of reference are governed by the request for establishment of a panel. Article 6.2 of the DSU sets forth the requirements applicable to such requests. … There are … two distinct requirements, namely identification of the specific measures at issue, and the provision of a brief summary of the legal basis of the complaint (or the claims). Together, they comprise the “matter referred to the DSB”, which forms the basis for a panel’s terms of reference under Article 7.1 of the DSU.

 

T.6.1.10 US — Carbon Steel, para. 126
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)

 

The requirements of precision in the request for the establishment of a panel flow from the two essential purposes of the terms of reference. First, the terms of reference define the scope of the dispute. Secondly, the terms of reference, and the request for the establishment of a panel on which they are based, serve the due process objective of notifying the parties and third parties of the nature of a complainant’s case. When faced with an issue relating to the scope of its terms of reference, a panel must scrutinize carefully the request for establishment of a panel “to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.”

 

T.6.1.11 US — Offset Act (Byrd Amendment), para. 208
(WT/DS217/AB/R, WT/DS234/AB/R)

 

… “[a]n objection to jurisdiction should be raised as early as possible” and it would be preferable, in the interests of due process, for the appellant to raise such issues in the Notice of Appeal, so that appellees will be aware that this claim will be advanced on appeal. However, in our view, the issue of a panel’s jurisdiction is so fundamental that it is appropriate to consider claims that a panel has exceeded its jurisdiction even if such claims were not raised in the Notice of Appeal.

 

T.6.1.12 Mexico — Taxes on Soft Drinks, paras. 44-46
(WT/DS308/AB/R)

 

…the issue before us in this appeal is not whether the Panel was legally precluded from ruling on the United States’ claims that were before it, but, rather, whether the Panel could decline, and should have declined, to exercise jurisdiction with respect to the United States’ claims under Article III of the GATT 1994 that were before it. … We agree with Mexico that WTO panels have certain powers that are inherent in their adjudicative function. Notably, panels have the right to determine whether they have jurisdiction in a given case, as well as to determine the scope of their jurisdiction. …

 

In our view, it does not necessarily follow, however, from the existence of these inherent adjudicative powers that, once jurisdiction has been validly established, WTO panels would have the authority to decline to rule on the entirety of the claims that are before them in a dispute. To the contrary, we note that, while recognizing WTO panels’ inherent powers, the Appellate Body has previously emphasized that:

 

Although panels enjoy some discretion in establishing their own working procedures, this discretion does not extend to modifying the substantive provisions of the DSU. … Nothing in the DSU gives a panel the authority either to disregard or to modify … explicit provisions of the DSU. (emphasis added) [Appellate Body Report, India — Patents (US), para. 92]

 

T.6.1.13 Mexico — Taxes on Soft Drinks, para. 52
(WT/DS308/AB/R)

 

… The fact that a Member may initiate a WTO dispute whenever it considers that “any benefits accruing to [that Member] are being impaired by measures taken by another Member” implies that that Member is entitled to a ruling by a WTO panel.

 

T.6.1.14 Mexico — Taxes on Soft Drinks, para. 53
(WT/DS308/AB/R)

 

A decision by a panel to decline to exercise validly established jurisdiction would seem to “diminish” the right of a complaining Member to “seek the redress of a violation of obligations” within the meaning of Article 23 of the DSU, and to bring a dispute pursuant to Article 3.3 of the DSU. This would not be consistent with a panel’s obligations under Articles 3.2 and 19.2 of the DSU. We see no reason, therefore, to disagree with the Panel’s statement that a WTO panel “would seem … not to be in a position to choose freely whether or not to exercise its jurisdiction”.

 

T.6.1.15 Mexico — Taxes on Soft Drinks, para. 54
(WT/DS308/AB/R)

 

Mindful of the precise scope of Mexico’s appeal, we express no view as to whether there may be other circumstances in which legal impediments could exist that would preclude a panel from ruling on the merits of the claims that are before it. In the present case, Mexico argues that the United States’ claims under Article III of the GATT 1994 are inextricably linked to a broader dispute, and that only a NAFTA panel could resolve the dispute as a whole. Nevertheless, Mexico does not take issue with the Panel’s finding that “neither the subject matter nor the respective positions of the parties are identical in the dispute under the NAFTA… and the dispute before us”. Mexico also stated that it could not identify a legal basis that would allow it to raise, in a WTO dispute settlement proceeding, the market access claims it is pursuing under the NAFTA. It is furthermore undisputed that no NAFTA panel as yet has decided the “broader dispute” to which Mexico has alluded. Finally, we note that Mexico has expressly stated that the so-called “exclusion clause” of Article 2005.6 of the NAFTA had not been “exercised”. We do not express any view on whether a legal impediment to the exercise of a panel’s jurisdiction would exist in the event that features such as those mentioned above were present. In any event, we see no legal impediments applicable in this case.

 

T.6.1.16 Mexico — Taxes on Soft Drinks, para. 57
(WT/DS308/AB/R)

 

For all these reasons, we uphold the Panel’s conclusion, in paragraphs 7.1, 7.18, and 9.1 of the Panel Report, that “under the DSU, it ha[d] no discretion to decline to exercise its jurisdiction in the case that ha[d] been brought before it”. Having upheld this conclusion, we find it unnecessary to rule in the circumstances of this appeal on the propriety of exercising such discretion.

 

T.6.1.17 EC — Selected Customs Matters, paras. 129-130
(WT/DS315/AB/R)

 

Article 6.2 sets forth the requirements applicable to a request for the establishment of a panel. As the Appellate Body stated [at paragraph 125] in US — Carbon Steel, there are two distinct requirements, namely:

 

…identification of the specific measures at issue, and the provision of a brief summary of the legal basis of the complaint (or the claims). (original emphasis)

 

These two requirements relate to different aspects of the complainant’s challenge to measures taken by another Member. The “specific measure” to be identified in a panel request is the object of the challenge, namely, the measure that is alleged to be causing the violation of an obligation contained in a covered agreement. In other words, the measure at issue is what is being challenged by the complaining Member. In contrast, the legal basis of the complaint, namely, the “claim” pertains to the specific provision of the covered agreement that contains the obligation alleged to be violated. A brief summary of the legal basis of the complaint required by Article 6.2 of the DSU aims to explain succinctly how or why the measure at issue is considered by the complaining Member to be violating the WTO obligation in question. This brief summary must be sufficient to present the problem clearly. Taken together, these different aspects of a panel request serve not only to define the scope of a dispute, but also to meet the due process requirements.

 

T.6.1.18 EC — Selected Customs Matters, para. 153
(WT/DS315/AB/R)

 

We turn… to the question whether the panel request confines the measure at issue to areas of customs administration. We read the third paragraph of the panel request as an illustrative list of areas where the United States considers European Communities customs law is not administered in a uniform way. Thus, the substance of the third paragraph of the panel request should be viewed as an anticipation of the United States’ arguments. In this paragraph, the United States explains — briefly and in general terms — why it considers that the legal instruments listed in the first paragraph of the panel request are administered in a manner that is inconsistent with the uniformity requirement in Article X:3(a). Article 6.2 of the DSU requires that the claims — not the arguments — be set out in a panel request in a way that is sufficient to present the problem clearly. Nothing in Article 6.2 prevents a complainant from making statements in the panel request that foreshadow its arguments in substantiating the claim. If the complainant chooses to do so, these arguments should not be interpreted to narrow the scope of the measures or the claims. Accordingly, we are of the opinion that the Panel erred when it found that the list of areas of customs administration in the third paragraph of the panel request limits the scope of the “specific measures at issue”.

 

T.6.1.19 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 292-295
(WT/DS343/AB/R, WT/DS345/AB/R)

 

It is well settled that the terms of reference of a panel define the scope of the dispute and that the claims and measures identified in the request for the establishment of a panel together constitute the matter within the panel’s terms of reference under Article 7 of the DSU. At the same time, Article 4.4 of the DSU provides that any request for consultations must provide “identification of the measures at issue” (emphasis added). However, as the Panel has highlighted, there is no clarification as to what degree the measures identified in the panel request must correspond to the measures identified in the consultations request.

 

The Appellate Body has recognized the important role that consultations play in defining the scope of a dispute. Not only are they “a prerequisite to panel proceedings”, they also serve the purpose of, inter alia, allowing parties to reach a mutually agreed solution, and where no solution is reached, providing the parties an opportunity to “define and delimit” the scope of the dispute between them. Further, “Articles 4 and 6 of the DSU … set forth a process by which a complaining party must request consultations, and consultations must be held, before a matter may be referred to the DSB for the establishment of a panel.” The Appellate Body has also explained that “[a]s long as the complaining party does not expand the scope of the dispute, [it would] hesitate to impose too rigid a standard for the ‘precise and exact identity’ between the scope of the consultations and the request for the establishment of a panel, as this would substitute the request for consultations for the panel request”. The Appellate Body has also held that a “precise and exact identity” of measures between the two requests is not necessary, “provided that the ‘essence’ of the challenged measures had not changed”. In our view, whether a complaining party has “expand[ed] the scope of the dispute” or changed the “essence” of the dispute through the inclusion of a measure in its panel request that was not part of its consultations request must be determined on a case-by-case basis.

 

In the circumstances of this case, the Panel, in accordance with the guidance provided by the Appellate Body referred to above, was required to compare the respective parameters of the consultations request and the panel request to determine whether an expansion of the scope or change in the essence of the dispute occurred through the addition of instruments in the panel request that were not identified in the consultations request. …

 

… We do not see an error in the Panel’s approach in this case. The Panel assessed the differing scope, as well as the legal bases, of the two sets of instruments and came to the conclusion that they were separate and legally distinct. …

 

T.6.1.20 US — Continued Zeroing, paras. 207, 210
(WT/DS350/AB/R)

 

… the European Communities listed among the 52 specific proceedings three preliminary results in sunset reviews and one preliminary result in a periodic review. These reviews were conducted by the USDOC, subsequent to the imposition of duties pursuant to the original anti-dumping investigations, to assess the duty liabilities and cash deposit rates (in the case of periodic review), and to determine whether a duty should be revoked or continued (in the case of sunset reviews). In contrast, a provisional measure, within the meaning of Article 7 of the Anti-Dumping Agreement, is an interim measure taken by an investigating authority in the context of an original investigation to prevent further injury to the domestic industry, pending the final outcome of the original investigation. Therefore, we fail to see the Panel’s rationale in excluding these measures from its terms of reference on the grounds that the European Communities did not bring any claims under Article 7.1 concerning the conditions for imposing provisional measures. As a result, the Panel’s finding that the four preliminary determinations were outside its terms of reference, which was made on the basis of the European Communities’ failure to bring claims under Article 7.1, cannot stand.

 

 

… we consider the European Communities’ challenge in relation to these two preliminary results to be premature. Specifically, given that these preliminary results could be modified by the final results, we fail to see how the European Communities could establish that final anti-dumping dut[ies]were assessed in excess of the margin of dumping or that the USDOC would have relied on the margin calculated with zeroing in deciding to continue the duty.

 

T.6.1.21 US — Continued Zeroing, para. 228
(WT/DS350/AB/R)

 

We recall that the Appellate Body has cautioned against a standard that is too “rigid” in terms of requiring the “precise and exact identity” between the scope of the request for consultations and the panel request, as long as the complaining party does not “expand the scope of the dispute”. Here, the 14 additional measures identified in the panel request pertain to the same anti-dumping duties that are included in the consultations request. Among the 14 additional measures are the sunset review proceedings concerning the continuation of 10 anti-dumping duties, in relation to which the successive periodic reviews are identified in the consultations request. The remaining four additional measures are more recent periodic reviews to the ones listed in the consultations request, including two final results issued subsequent to the preliminary results that were listed in the consultations request. The proceedings listed in the consultations request and the panel request are therefore successive stages subsequent to the issuance of the same anti-dumping duty orders. More specifically, as regards the periodic reviews, the subsequent measures assessed actual duty liabilities and updated cash deposit rates that were imposed on the same products from the same countries as those listed in the consultations request. With respect to the sunset reviews, the subsequent measures related to the continued application of duties on the same products from the same countries as those listed in the consultations request. Moreover, in both its consultations request and panel request, the European Communities made clear that it was challenging the specific administrative review and sunset review proceedings because of the use of the zeroing methodology. … In sum, these 14 additional measures relate to the same duties identified in the consultations request, and the legal basis of the claims raised is the same.

 
T.6.2 Claims and legal basis of the complaint.
See also Burden of Proof, General (B.3.1); Claims and Arguments (C.1); Enabling Clause (E.1); Judicial Economy (J.1); Jurisdiction (J.2); Request for the Establishment of a Panel, Article 6.2 of the DSU — Claims and legal basis of the complaint (R.2.2)     back to top

T.6.2.1 EC — Bananas III, para. 141
(WT/DS27/AB/R)

 

… We accept the Panel’s view that it was sufficient for the Complaining Parties to list the provisions of the specific agreements alleged to have been violated without setting out detailed arguments as to which specific aspects of the measures at issue relate to which specific provisions of those agreements. In our view, there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under Article 7 of the DSU, and the arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties.

 

T.6.2.2 EC — Bananas III, para. 143
(WT/DS27/AB/R)

 

… Article 6.2 of the DSU requires that the claims, but not the arguments, must all be specified sufficiently in the request for the establishment of a panel in order to allow the defending party and any third parties to know the legal basis of the complaint. If a claim is not specified in the request for the establishment of a panel, then a faulty request cannot be subsequently “cured” by a complaining party’s argumentation in its first written submission to the panel or in any other submission or statement made later in the panel proceeding.

 

T.6.2.3 EC — Bananas III, paras. 145, 147
(WT/DS27/AB/R)

 

… There is no requirement in the DSU or in GATT practice for arguments on all claims relating to the matter referred to the DSB to be set out in a complaining party’s first written submission to the panel. It is the panel’s terms of reference, governed by Article 7 of the DSU, which set out the claims of the complaining parties relating to the matter referred to the DSB. …

 

… We do not agree with the Panel’s statement that a “failure to make a claim in the first written submission cannot be remedied by later submissions or by incorporating the claims and arguments of other complainants”. …

 

T.6.2.4 US — Carbon Steel, para. 127
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)

 

As we have said previously, compliance with the requirements of Article 6.2 must be demonstrated on the face of the request for the establishment of a panel. Defects in the request for the establishment of a panel cannot be “cured” in the subsequent submissions of the parties during the panel proceedings. Nevertheless, in considering the sufficiency of a panel request, submissions and statements made during the course of the panel proceedings, in particular the first written submission of the complaining party, may be consulted in order to confirm the meaning of the words used in the panel request and as part of the assessment of whether the ability of the respondent to defend itself was prejudiced. Moreover, compliance with the requirements of Article 6.2 must be determined on the merits of each case, having considered the panel request as a whole, and in the light of attendant circumstances.

 

T.6.2.5 US — Carbon Steel, para. 130
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)

 

… As we have observed, although the listing of the treaty provisions allegedly violated is always a necessary “minimum prerequisite” for compliance with Article 6.2, whether such a listing is sufficient to constitute a “brief summary of the legal basis of the complaint sufficient to present the problem clearly” within the meaning of Article 6.2 will depend on the circumstances of each case, and in particular on the extent to which mere reference to a treaty provision sheds light on the nature of the obligation at issue. …

 

T.6.2.6 India — Patents (US), paras. 89-90
(WT/DS50/AB/R)

 

… a claim must be included in the request for establishment of a panel in order to come within a panel’s terms of reference in a given case. …

 

… the convenient phrase, “including but not necessarily limited to”, is simply not adequate to “identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly” as required by Article 6.2 of the DSU. If this phrase incorporates Article 63, what article of the TRIPS Agreement does it not incorporate? Therefore, this phrase is not sufficient to bring a claim relating to Article 63 within the terms of reference of the Panel.

 

T.6.2.7 Korea — Dairy, para. 124
(WT/DS98/AB/R)

 

Identification of the treaty provisions claimed to have been violated by the respondent is always necessary both for purposes of defining the terms of reference of a panel and for informing the respondent and the third parties of the claims made by the complainant; such identification is a minimum prerequisite if the legal basis of the complaint is to be presented at all. But it may not always be enough. There may be situations where the simple listing of the articles of the agreement or agreements involved may, in the light of attendant circumstances, suffice to meet the standard of clarity in the statement of the legal basis of the complaint. However, there may also be situations in which the circumstances are such that the mere listing of treaty articles would not satisfy the standard of Article 6.2. This may be the case, for instance, where the articles listed establish not one single, distinct obligation, but rather multiple obligations. In such a situation, the listing of articles of an agreement, in and of itself, may fall short of the standard of Article 6.2.

 

T.6.2.8 Korea — Dairy, para. 127
(WT/DS98/AB/R)

 

Along the same lines, we consider that whether the mere listing of the articles claimed to have been violated meets the standard of Article 6.2 must be examined on a case-by-case basis. In resolving that question, we take into account whether the ability of the respondent to defend itself was prejudiced, given the actual course of the panel proceedings, by the fact that the panel request simply listed the provisions claimed to have been violated.

 

T.6.2.9 Thailand — H-Beams, para. 88
(WT/DS122/AB/R)

 

Article 6.2 of the DSU calls for sufficient clarity with respect to the legal basis of the complaint, that is, with respect to the “claims” that are being asserted by the complaining party. A defending party is entitled to know what case it has to answer, and what violations have been alleged so that it can begin preparing its defence. Likewise, those Members of the WTO who intend to participate as third parties in panel proceedings must be informed of the legal basis of the complaint. This requirement of due process is fundamental to ensuring a fair and orderly conduct of dispute settlement proceedings.

 

T.6.2.10 Thailand — H-Beams, para. 92
(WT/DS122/AB/R)

 

In the facts and circumstances of this case, therefore, we consider that the reference in Poland’s panel request to the “[calculation of] an alleged dumping margin” was sufficient to bring Poland’s claims under Article 2 within the panel’s terms of reference, and to inform Thailand of the nature of Poland’s claims. Thus, with respect to the claims relating to Article 2 of the Anti-Dumping Agreement, Poland’s panel request was sufficient to meet the requirements of Article 6.2 of the DSU.

 

T.6.2.11 Korea — Various Measures on Beef, para. 87
(WT/DS161/AB/R, WT/DS169/AB/R)

 

… Although the “commitment levels” in Korea’s Schedule and “Annex 3” of the Agreement on Agriculture were not explicitly referred to in the panel requests in this dispute, it is clear that Articles 3 and 6 of the Agreement on Agriculture, which were referred to in the panel requests, incorporate those terms, either directly through Articles 3.2 and 6.3, in the case of the “commitment levels”, or indirectly through Article 1(a)(i), in the case of “Annex 3”. In our view, the commitment levels in Korea’s Schedule and the provisions of Annex 3 were in effect referred to in the complaining parties’ panel requests, and were, therefore, within the Panel’s terms of reference.

 

T.6.2.12 US — Certain EC Products, para. 111
(WT/DS165/AB/R)

 

Article 23.1 of the DSU imposes a general obligation of Members to redress a violation of obligations or other nullification or impairment of benefits under the covered agreements only by recourse to the rules and procedures of the DSU, and not through unilateral action. Subparagraphs (a), (b) and (c) of Article 23.2 articulate specific and clearly defined forms of prohibited unilateral action contrary to Article 23.1 of the DSU. There is a close relationship between the obligations set out in paragraphs 1 and 2 of Article 23. They all concern the obligation of Members of the WTO not to have recourse to unilateral action. We therefore consider that, as the request for the establishment of a panel of the European Communities included a claim of inconsistency with Article 23, a claim of inconsistency with Article 23.2(a) is within the Panel’s terms of reference.

 

T.6.2.13 US — Certain EC Products, para. 112
(WT/DS165/AB/R)

 

However, the fact that a claim of inconsistency with Article 23.2(a) of the DSU can be considered to be within the Panel’s terms of reference does not mean that the European Communities actually made such a claim. An analysis of the Panel record shows that, with the exception of two instances during the Panel proceedings, the European Communities did not refer specifically to Article 23.2(a) of the DSU. Furthermore, in response to a request from the United States to clarify the scope of its claim under Article 23, the European Communities asserted only claims of violation of Articles 23.1 and 23.2(c) of the DSU; no mention was made of Article 23.2(a). Our reading of the Panel record shows us that, throughout the Panel proceedings in this case, the European Communities made arguments relating only to its claims that the United States acted inconsistently with Article 23.1 and Article 23.2(c) of the DSU.

 

T.6.2.14 US — Certain EC Products, para. 113
(WT/DS165/AB/R)

 

The Panel record does show that the European Communities made several references to what it termed the “unilateral determination” of the United States. However, in those references, the European Communities did not specifically link the alleged “unilateral determination” to a claim of violation of Article 23.2(a) per se. The European Communities’ arguments relating to the alleged “unilateral determination” of the United States were made with reference to the alleged failure on the part of the United States to redress a perceived WTO violation through recourse to the DSU as required by Article 23.1 of the DSU. At no point did the European Communities link the notion of a “unilateral determination” on the part of the United States with a violation of Article 23.2(a).

 

T.6.2.15 US — Certain EC Products, para. 114
(WT/DS165/AB/R)

 

On the basis of our review of the European Communities’ submissions and statements to the Panel, we conclude that the European Communities did not specifically claim before the Panel that, by adopting the 3 March Measure, the United States acted inconsistently with Article 23.2(a) of the DSU. As the European Communities did not make a specific claim of inconsistency with Article 23.2(a), it did not adduce any evidence or arguments to demonstrate that the United States made a “determination as to the effect that a violation has occurred” in breach of Article 23.2(a) of the DSU. And, as the European Communities did not adduce any evidence or arguments in support of a claim of violation of Article 23.2(a) of the DSU, the European Communities could not have established, and did not establish, a prima facie case of violation of Article 23.2(a) of the DSU.

 

T.6.2.16 Chile — Price Band System, paras. 150-151
(WT/DS207/AB/R, WT/DS207/AB/R/Corr.1)

 

The Panel request refers to Article II of the GATT 1994 in general terms. No specific reference is made to any of the seven paragraphs or eight subparagraphs of Article II of the GATT 1994. Argentina’s request clearly does not limit the scope of Argentina’s claims to the first sentence of Article II:1(b). Therefore, we find that Article II in its entirety — including the second sentence of Article II:1(b) — is within the Panel’s terms of reference.

 

This, however, is not the end of our inquiry on this issue. Chile does not dispute that Argentina included Article II:1(b) in the request for the establishment of a panel. However, Chile submits that making a general reference to Article II in the Panel request is not dispositive of whether Argentina has actually made a claim under the second sentence of Article II:1(b), and, thus, of whether the Panel was entitled to make a finding under that provision.

 

T.6.2.17 Chile — Price Band System, para. 164
(WT/DS207/AB/R, WT/DS207/AB/R/Corr.1)

 

… Argentina appears to suggest that a claim may be made implicitly, and need not be made explicitly. We do not agree. The requirements of due process and orderly procedure dictate that claims must be made explicitly in WTO dispute settlement. Only in this way will the panel, other parties, and third parties understand that a specific claim has been made, be aware of its dimensions, and have an adequate opportunity to address and respond to it. WTO Members must not be left to wonder what specific claims have been made against them in dispute settlement. …

 

T.6.2.18 US — Offset Act (Byrd Amendment), para. 212
(WT/DS217/AB/R, WT/DS234/AB/R)

 

In our view, these statements do not constitute a finding by the Panel that was outside its terms of reference. The Panel was merely reflecting in its reasoning the fact that the CDSOA does not operate in a vacuum but, rather, operates in a context that includes other laws and regulations. The Panel’s view was that the combination of anti-dumping duties (or countervailing duties) and CDSOA offset payments distorts the competitive relationship between dumped (subsidized) and domestic products, to the detriment of dumped (subsidized) products. This led the Panel to find that the CDSOA — alone — has an adverse bearing on dumping (subsidization) and, therefore, operates “against” dumping (subsidies) within the meaning of Article 18.1 of the Anti-Dumping Agreement (and Article 32.1 of the SCM Agreement). Therefore, we dismiss the claim of the United States that the Panel exceeded its terms of reference by examining claims concerning the CDSOA “in combination” with other United States laws and regulations.

 

T.6.2.19 EC — Tariff Preferences, para. 113
(WT/DS246/AB/R)

 

In the light of the extensive requirements set forth in the Enabling Clause, we are of the view that, when a complaining party considers that a preference scheme of another Member does not meet one or more of those requirements, the specific provisions of the Enabling Clause with which the scheme allegedly falls afoul, form critical components of the “legal basis of the complaint” and, therefore, of the “matter” in dispute. Accordingly, a complaining party cannot, in good faith, ignore those provisions and must, in its request for the establishment of a panel, identify them and thereby “notif[y] the parties and third parties of the nature of [its] case”. For the failure of such a complaining party to raise the relevant provisions of the Enabling Clause would place an unwarranted burden on the responding party. This due process consideration applies equally to the elaboration of a complaining party’s case in its written submissions, which must “explicitly” articulate a claim so that the panel and all parties to a dispute “understand that a specific claim has been made, [are] aware of its dimensions, and have an adequate opportunity to address and respond to it”.

 

T.6.2.20 US — Countervailing Duty Investigation on DRAMS, paras. 99-100
(WT/DS296/AB/R)

 

… Korea’s initial request for consultations did not refer to the CVD order, which was not in existence at the time the request was made. In the Addendum to its request for consultations, Korea sought “further consultations” with regard to the USITC’s final injury determination and the USDOC’s CVD order. … The United States considers that this language does not permit a conclusion that the claims asserted in the initial request for consultations apply also to the CVD order .…

 

We disagree. The Addendum expressly refers to the initial request for consultations. It is clear that the Addendum was intended to be read together with the original request for consultations; indeed, that is the very nature of an addendum. Moreover, we recall that Korea explains that, under United States law, “the [CVD] order is wholly dependent on the administrative determinations and is effectively a ministerial function without discretion”. According to Korea, “it follows that the legal claims of the underlying determinations are identical to the legal claims with respect to the [CVD] order”.… In these circumstances, it should have been apparent that the allegations of inconsistency, set forth by Korea in the original request for consultations and in the Addendum in relation to the USDOC’s subsidy determination and the USITC’s injury determination, applied also to the CVD order. Nor can it be said that the United States was expected “to guess which provision(s) applied to the [CVD] order”. Accordingly, we find that it was reasonable for the Panel to conclude that the “totality” of the provisions in Korea’s initial request for consultations and in the Addendum provides, with respect to the USDOC’s CVD order, a sufficient indication of the legal basis for the complaint within the meaning of Article 4.4.

 

T.6.2.21 Mexico — Taxes on Soft Drinks, para. 49
(WT/DS308/AB/R)

 

… The use of the words “shall address” in Article 7.2 indicates, in our view, that panels are required to address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute.

 

T.6.2.22 EC — Selected Customs Matters, para. 166
(WT/DS315/AB/R)

 

We agree with the Panel that “there is nothing in the DSU nor in the other WTO agreements that would prevent a complaining Member from challenging a responding Member’s system as a whole or overall”. We also agree with the Panel that a challenge that a system “as a whole or overall” is WTO-inconsistent must be presented in a manner that meets the two distinct requirements in Article 6.2 of the DSU. …

 

T.6.2.23 EC — Selected Customs Matters, para. 168
(WT/DS315/AB/R)

 

The United States’ appeal requires us to examine the wording and content of the panel request. Determining the scope of the claims that are set out in a panel request requires that the panel request be construed as a whole. We will be able to conclude that the panel request included a challenge to the European Communities’ system of customs administration as a whole or overall only if we are convinced that the panel request, read as a whole, states this claim in a way that is “sufficient to present the problem clearly”.

 
T.6.3 Specific measure at issue.
See also Burden of Proof (B.3); Jurisdiction (J.2); Legislation as such vs. Specific Application (L.1); Mandatory and Discretionary Legislation (M.1); Request for the Establishment of a Panel — Specific measures at issue (R.2.3)     back to top

T.6.3.1 Japan — Alcoholic Beverages II, p. 26, DSR 1996:I, p. 97 at 117-118
(WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R)

 

We note that the Panel’s conclusions on “like products” and on “directly competitive or substitutable products” … fail to address the full range of alcoholic beverages included in the Panel’s Terms of Reference. … We consider this failure to incorporate into its conclusions all the products referred to in the Terms of Reference, consistent with the matters referred to the DSB in WT/DS8/5, WT/DS10/5 and WT/DS11/2, to be an error of law by the Panel.

 

T.6.3.2 Australia — Salmon, para. 103
(WT/DS18/AB/R)

 

… In our view, the … measure at issue can only be the measure which is actually applied to the product at issue. …

 

T.6.3.3 US — Certain EC Products, para. 70
(WT/DS165/AB/R)

 

… in our Report in Brazil — Export Financing Programme for Aircraft, we stated that:

 

Articles 4 and 6 of the DSU … set forth a process by which a complaining party must request consultations, and consultations must be held, before a matter may be referred to the DSB for the establishment of a panel.

 

The European Communities’ request for consultations of 4 March 1999 did not, of course, refer to the action taken by the United States on 19 April 1999, because that action had not yet been taken at the time. At the oral hearing in this appeal, in response to questioning by the Division, the European Communities acknowledged that the 19 April action, as such, was not formally the subject of the consultations held on 21 April 1999. We, therefore, consider that the 19 April action is also, for that reason, not a measure at issue in this dispute and does not fall within the Panel’s terms of reference.

 

T.6.3.4 US — Carbon Steel, para. 171
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)

 

… the references in the panel request to “certain aspects of the sunset review procedure”, to the United States statutory provisions governing sunset reviews, to related regulatory provisions, and to the Sunset Policy Bulletin, can be read to refer, generally, to United States law regarding the determination to be made in a sunset review. However, we do not believe they can be read to refer to distinct measures, consisting of United States law, as such, and as applied, relating to the submission of evidence. Accordingly, we agree with the Panel that the matters relating to the submission of evidence in a sunset review were not within its terms of reference because the specific measures at issue were not adequately identified in the request for the establishment of the panel, as required by Article 6.2 of the DSU.

 

T.6.3.5 Chile — Price Band System, para. 139
(WT/DS207/AB/R, WT/DS207/AB/R/Corr.1)

 

… Chile’s price band system remains essentially the same after the enactment of Law 19.772. The measure is not, in its essence, any different because of that Amendment. Therefore, we conclude that the measure before us in this appeal includes Law 19.772, because that law amends Chile’s price band system without changing its essence.

 

T.6.3.6 Chile — Price Band System, para. 144
(WT/DS207/AB/R, WT/DS207/AB/R/Corr.1)

 

We emphasize that we do not mean to condone a practice of amending measures during dispute settlement proceedings if such changes are made with a view to shielding a measure from scrutiny by a panel or by us. We do not suggest that this occurred in this case. However, generally speaking, the demands of due process are such that a complaining party should not have to adjust its pleadings throughout dispute settlement proceedings in order to deal with a disputed measure as a “moving target”. If the terms of reference in a dispute are broad enough to include amendments to a measure — as they are in this case — and if it is necessary to consider an amendment in order to secure a positive solution to the dispute — as it is here — then it is appropriate to consider the measure as amended in coming to a decision in a dispute.

 

T.6.3.7 US — Oil Country Tubular Goods Sunset Reviews, para. 173
(WT/DS268/AB/R)

 

We also expect that measures subject to “as such” challenges would normally have undergone, under municipal law, thorough scrutiny through various deliberative processes to ensure consistency with the Member’s international obligations, including those found in the covered agreements, and that the enactment of such a measure would implicitly reflect the conclusion of that Member that the measure is not inconsistent with those obligations. The presumption that WTO Members act in good faith in the implementation of their WTO commitments is particularly apt in the context of measures challenged “as such”. We would therefore urge complaining parties to be especially diligent in setting out “as such” claims in their panel requests as clearly as possible. In particular, we would expect that “as such” claims state unambiguously the specific measures of municipal law challenged by the complaining party and the legal basis for the allegation that those measures are not consistent with particular provisions of the covered agreements. Through such straightforward presentations of “as such” claims, panel requests should leave respondent parties in little doubt that, notwithstanding their own considered views on the WTO-consistency of their measures, another Member intends to challenge those measures, as such, in WTO dispute settlement proceedings.

 

T.6.3.8 US — Oil Country Tubular Goods Sunset Reviews, para. 220
(WT/DS268/AB/R)

 

… Therefore, even assuming arguendo that a “practice” may be challenged as a “measure” in WTO dispute settlement — an issue on which we express no view here — we find that the record does not allow us to complete the analysis of Argentina’s conditional appeal with respect to the “practice” of the USDOC regarding the likelihood determination in sunset reviews.

 

T.6.3.9 US — Upland Cotton, para. 262
(WT/DS267/AB/R)

 

Whether or not a measure is still in force is not dispositive of whether that measure is currently affecting the operation of any covered agreement. Therefore, we disagree with the United States’ argument that measures whose legislative basis has expired are incapable of affecting the operation of a covered agreement in the present and that, accordingly, expired measures cannot be the subject of consultations under the DSU. In our view, the question of whether measures whose legislative basis has expired affect the operation of a covered agreement currently is an issue that must be resolved on the facts of each case. The outcome of such an analysis cannot be prejudged by excluding it from consultations and dispute settlement proceedings altogether.

 

T.6.3.10 US — Upland Cotton, para. 269
(WT/DS267/AB/R)

 

The only temporal connotation contained in the ordinary meaning of the expression “at issue”, as used in Article 6.2 of the DSU, is expressed by its present tense: measures must be “at issue” — or, putting it another way, “in dispute” — at the time the request is made. Certainly, nothing inherent in the term “at issue” sheds light on whether measures at issue must be currently in force, or whether they may be measures whose legislative basis has expired.

 

T.6.3.11 US — Gambling, paras. 121-123
(WT/DS285/AB/R, WT/DS285/AB/R/Corr.1)

 

The DSU provides for the “prompt settlement” of situations where Members consider that their benefits under the covered agreements “are being impaired by measures taken by another Member”. Two elements of this reference to “measures” that may be the subject of dispute settlement are relevant. First, as the Appellate Body has stated, a “nexus” must exist between the responding Member and the “measure”, such that the “measure” — whether an act or omission — must be “attributable” to that Member. Secondly, the “measure” must be the source of the alleged impairment, which is in turn the effect resulting from the existence or operation of the “measure”.

 

Similarly [Article 4.2 of the DSU] contemplates that “measures” themselves will “affect” the operation of a covered agreement. Finally, we note that this distinction between measures and their effects is also evident in the scope of application of the GATS, namely, to “measures by Members affecting trade in services”.

 

We are therefore of the view that the DSU and the GATS focus on “measures” as the subject of challenge in WTO dispute settlement. To the extent that a Member’s complaint centres on the effects of an action taken by another Member, that complaint must nevertheless be brought as a challenge to the measure that is the source of the alleged effects.

 

T.6.3.12 US — Gambling, paras. 129, 131-132
(WT/DS285/AB/R, WT/DS285/AB/R/Corr.1)

 

… the Panel relied on certain Appellate Body decisions in support of its view that “ ‘practice’ can be considered as an autonomous measure that can be challenged in and of itself”. …

 

 

We disagree with the participants’ characterization of the Panel’s statement on “practice”, in paragraph 6.197 of the Panel Report, as a “finding” of the Panel. The Panel itself acknowledged that, in any case, Antigua was not challenging a practice, as such. In this light, the Panel’s statement on “practice”, in our view, was a mere obiter dictum, and we need not rule on it.

 

We nevertheless express our disagreement with the Panel’s understanding of previous Appellate Body decisions. The Appellate Body has not, to date, pronounced upon the issue of whether “practice” may be challenged, as such, as a “measure” in WTO dispute settlement.

 

T.6.3.13 EC — Selected Customs Matters, paras. 131-132
(WT/DS315/AB/R)

 

… The question of whether a measure falls within a panel’s terms of reference is a threshold issue, distinct from the question of whether the measure is consistent or not with the legal provision(s) of the covered agreement(s) to which the panel request refers. Therefore, questions pertaining to the identification of the “measures at issue” and the “claims” relating to alleged violation of WTO obligations, set out in a panel request, should be analysed separately.

 

At the heart of the Panel’s reasoning stands the proposition that the term “measure at issue” in Article 6.2 of the DSU should be interpreted in the light of the specific WTO obligation that is raised in a particular claim. This reasoning appears to us to be flawed. The Panel’s proposition would introduce uncertainty because the identification of the measure would vary depending on the substance of the legal provision invoked by a complainant and the interpretation that a panel might give to that provision. … In finding that the term “measures at issue” in Article 6.2 should be interpreted in the light of the specific WTO obligation that is alleged to be violated, the Panel blurred the distinction between measures and claims.

 

T.6.3.14 EC — Selected Customs Matters, para. 133
(WT/DS315/AB/R)

 

In our view, a complainant is entitled to include in its panel request an allegation of inconsistency with a covered agreement of any measure that may be submitted to WTO dispute settlement. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body provided guidance on the types of measures that may be the subject of dispute settlement. Relying on, inter alia, Article 3.3 of the DSU, which refers to “situations in which a Member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired by measures taken by another Member”, the Appellate Body stated that “[i]n principle, any act or omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings.” As long as the specificity requirements of Article 6.2 are met, we see no reason why a Member should be precluded from setting out in a panel request “any act or omission” attributable to another Member as the measure at issue.

 

T.6.3.15 EC — Selected Customs Matters, paras. 134-135
(WT/DS315/AB/R)

 

The Panel considered that, when a violation of Article X:3(a) of the GATT 1994 is claimed, the measure at issue must necessarily be a “manner of administration” because, if such a violation is found, the WTO Member concerned would need to alter the manner of administration in order to comply with a recommendation made pursuant to Article 19.1 of the DSU. In our view, this reasoning of the Panel is flawed because it conflates the threshold question of whether a measure falls within a panel’s terms of reference with the question of the means of implementation in the event that a violation is found. Through the recommendation under Article 19.1, the Member found to have violated a provision of a covered agreement is required to take corrective action to remove the violation. The recommendation envisaged in Article 19.1 concerns the stage of implementation and not the question of whether a measure falls within a panel’s terms of reference. Moreover, the Member concerned has a degree of discretion with respect to the nature and type of action that it undertakes in order to achieve compliance. Therefore, we have difficulty in understanding how the means of compliance with a recommendation under Article 19.1 of the DSU should govern the identification of the specific measure at issue in a panel request. We agree, in this respect, with the United States that “[t]he mere fact that a breach of Article X:3(a) may be removed by changing a law’s administration is not a basis for concluding that the law is not the measure at issue.”

 

… In [US — Upland Cotton], the Appellate Body had to address the issue of whether an expired measure can be a “measure at issue” within the meaning of Article 6.2 of the DSU. The Appellate Body rejected the United States’ argument that, because an expired measure is not susceptible to a recommendation under Article 19.1 of the DSU, it cannot be a “measure at issue” under Article 6.2. For the Appellate Body, the question of whether a panel can address claims in respect of an expired measure is to be distinguished from the question of whether that measure is susceptible to a recommendation under Article 19.1. … the Appellate Body’s reasoning in US — Upland Cotton supports our position that Article 19.1 of the DSU does not place restrictions on the type of measure that can be identified in a panel request under Article 6.2 of the DSU.

 

T.6.3.16 EC — Selected Customs Matters, para. 184
(WT/DS315/AB/R)

 

We begin our analysis by recalling the Appellate Body’s statement [at paragraph 156] in EC — Chicken Cuts:

 

The term “specific measures at issue” in Article 6.2 suggests that, as a general rule, the measures included in a panel’s terms of reference must be measures that are in existence at the time of the establishment of the panel. (footnote omitted)

 

This general rule, however, is qualified by at least two exceptions. First, in Chile — Price Band System, the Appellate Body held that a panel has the authority to examine a legal instrument enacted after the establishment of the panel that amends a measure identified in the panel request, provided that the amendment does not change the essence of the identified measure. Secondly, in US — Upland Cotton, the Appellate Body held that panels are allowed to examine a measure “whose legislative basis has expired, but whose effects are alleged to be impairing the benefits accruing to the requesting Member under a covered agreement” at the time of the establishment of the panel.…

 

T.6.3.17 EC — Bananas III (Article 21.5 — Ecuador II) / EC — Bananas III (Article 21.5 — US), paras. 269-271
(WT/DS27/AB/RW2/ECU, WT/DS27/AB/RW/USA, WT/DS27/AB/RW2/ECU/Corr.1, WT/DS27/AB/RW/USA/Corr.1)

 

The situation in the present case is different from that in US — Upland Cotton, in that the measure in the present appeal was still in force when the Panel was established and expired only towards the end of the Panel proceedings. In US — Upland Cotton, certain measures were no longer in force at the time of the establishment of the panel, but the continued effect of past subsidies was claimed to still cause serious prejudice to the complainants’ interests. However, we consider that, if the DSU does not exclude from the scope of consultations, or from the scope of panel proceedings, a measure that was no longer in force when the dispute was initiated, then, a fortiori, a panel is not precluded from making findings with respect to measures that expire during the course of the proceedings.

 

We find further support for this interpretation in Article 7 of the DSU, which sets out the standard terms of reference for panels. The terms of reference for a panel pursuant to Article 7 define the scope of the dispute and the mandate of the panel. In the present case, the panel request identified, inter alia, EC Regulation 1964/2005, and the DSB established the Panel on that basis with standard terms of reference. The European Communities and the United States both agreed at the outset of the proceedings that this Regulation was the measure at issue included in the Panel’s terms of reference. The parties agreed that this measure was within the jurisdiction of the Panel. The DSU nowhere provides that the jurisdiction of a panel terminates or is limited by the expiry of the measure at issue. On the contrary, when the DSU provides for limitations on the authority of the panel in other instances, it does so in express terms. Article 12.12 of the DSU, for example, provides that a panel’s authority lapses if the work of the panel has been suspended for more than 12 months. The absence of a similar limitation, with respect to changes to the scope of the panel’s jurisdiction after the panel has been established and the terms of reference have been determined by the DSB, lends further support to our interpretation that, once a panel has been established and the terms of reference for the panel have been set, the panel has the competence to make findings with respect to the measures covered by its terms of reference. We thus consider it to be within the discretion of the panel to decide how it takes into account subsequent modifications or a repeal of the measure at issue. Accordingly, panels have made findings on expired measures in some cases and declined to do so in others, depending on the particularities of the disputes before them. In the present case, the European Communities has advanced no reason, nor do we see a reason, for interfering with the Panel’s exercise of that discretion.

 

… We recall that the Appellate Body has distinguished the question whether a panel can make a finding concerning an expired measure from the question whether a panel can make a recommendation relating to an expired measure. In US — Certain EC Products, the Appellate Body reversed the panel’s decision to make a recommendation pursuant to Article 19.1 of the DSU on the grounds that the panel had already found that the measure at issue in that dispute had expired. The Appellate Body confirmed, in US — Upland Cotton, that the fact that a measure has expired may affect what recommendation a panel may make, but it is not dispositive of the question whether a panel can make findings relating to an expired measure.

 

T.6.3.18 US — Zeroing (Japan) (Article 21.5 — Japan), paras. 121-122
(WT/DS322/AB/RW)

 

… Apart from the reference in the present tense to the fact that the complainant must identify the measures “at issue”, Article 6.2 does not set out an express temporal condition or limitation on the measures that can be identified in a panel request. Indeed, in US — Upland Cotton, where the issue was raised in the context of measures that had expired prior to the panel proceedings, the Appellate Body explained that “nothing inherent in the term ‘at issue’ sheds light on whether measures at issue must be currently in force, or whether they may be measures whose legislative basis has expired”. In EC — Chicken Cuts, the Appellate Body stated that “[t]he term ‘specific measures at issue’ in Article 6.2 suggests that, as a general rule, the measures included in a panel’s terms of reference must be measures that are in existence at the time of the establishment of the panel.” Nevertheless, the Appellate Body also stated in that case that “measures enacted subsequent to the establishment of the panel may, in certain limited circumstances, fall within a panel’s terms of reference”.

 

We observed earlier that the requirements of Article 6.2 must be read in the light of the specific function of Article 21.5 proceedings and that the “specific measures at issue” to be identified in these proceedings are measures that have a bearing on compliance with the recommendations and rulings of the DSB. A measure that is initiated before there has been recourse to an Article 21.5 panel, and which is completed during those Article 21.5 panel proceedings, may have a bearing on whether there is compliance with the DSB’s recommendations and rulings. Thus, if such a measure incorporates the same conduct that was found to be WTO-inconsistent in the original proceedings, it would show non-compliance with the DSB’s recommendations and rulings. To exclude such a measure from an Article 21.5 panel’s terms of reference because the measure was not completed at the time of the panel request but, rather, was completed during the Article 21.5 proceedings, would mean that the disagreement “as to the existence or consistency with a covered agreement of measures taken to comply” would not be fully resolved by that Article 21.5 panel. New Article 21.5 proceedings would therefore be required to resolve the disagreement and establish whether there is compliance. Thus, an a priori exclusion of measures completed during Article 21.5 proceedings could frustrate the function of compliance proceedings. It would also be inconsistent with the objectives of the DSU to provide for the “prompt settlement of situations in which a Member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired”, as reflected in Article 3.3, and to “secure a positive solution to a dispute”, as contemplated in Article 3.7.

 

T.6.3.19 US — Zeroing (Japan) (Article 21.5 — Japan), paras. 124-125
(WT/DS322/AB/RW)

 

… As we noted above, Review 9 related to the same anti-dumping duty order as Reviews 1, 2, and 3, which were found to be inconsistent in the original proceedings, and to the three subsequent reviews (Reviews 4, 5, and 6) being challenged by Japan as “measures taken to comply”. Japan’s panel request expressly referred to “subsequent closely connected measures”. Review 9 had been initiated at the time the matter was referred to the Panel and was due to be completed during the Article 21.5 proceedings. Under these circumstances, we consider that the Panel was correct in finding that Review 9 was within its terms of reference, as doing so enabled it to fulfil its mandate to resolve the “disagreement” between the parties and determine, in a prompt manner, whether the United States had achieved compliance with the DSB’s recommendations and rulings.

 

… the United States relies on the Appellate Body’s statement in EC — Chicken Cuts that “[t]he term ‘specific measures at issue’ in Article 6.2 suggests that, as a general rule, the measures included in a panel’s terms of reference must be measures that are in existence at the time of the establishment of the panel”, and that only in “certain limited circumstances” will measures enacted subsequent to a panel’s establishment fall within the Panel’s terms of reference. According to the United States, the circumstances of this case, including the fact that it is a compliance proceeding, do not justify the inclusion of Review 9 in the Panel’s terms of reference. As the United States itself recognizes, however, in EC — Chicken Cuts, the Appellate Body did not rule that Article 6.2 categorically prohibits the inclusion, within a panel’s terms of reference, of measures that come into existence or are completed after the panel is requested. Rather, the Appellate Body noted explicitly that, in certain circumstances, such measures could be included in a panel’s terms of reference. Moreover, whereas the statement in EC — Chicken Cuts to which the United States refers was made in the context of original WTO proceedings, we are dealing here with Article 21.5 proceedings. As we explained earlier, the requirements of Article 6.2 must be adapted to a panel request under Article 21.5, and the scope and function of Article 21.5 proceedings necessarily inform the interpretation of the Article 6.2 requirements in such proceedings. The proceedings before us present circumstances in which the inclusion of Review 9 was necessary for the Panel to assess whether compliance had been achieved, and thereby resolve the “disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings”.

 

T.6.3.20 US — Zeroing (Japan) (Article 21.5 — Japan), paras. 126-127
(WT/DS322/AB/RW)

 

… the United States argues that Review 9 could not have been impairing any benefits accruing to Japan, within the meaning of Article 3.3 of the DSU. The United States relies on a statement by the panel in US — Upland Cotton that a measure implemented under legislation that, at the time of the panel request, “did not exist, had never existed and might not subsequently have ever come into existence” was not within the panel’s terms of reference because such legislation could not have been impairing any benefits accruing to the complainant, in the sense of Article 3.3 of the DSU.

 

First, we note that the specific finding of the panel in US — Upland Cotton, on which the United States relies, was not appealed. Secondly, the Panel in these compliance proceedings found that the situation before it differed from the one presented to the panel in US — Upland Cotton. We agree that the circumstances of these compliance proceedings are different from those before the panel in US — Upland Cotton. In this case, Review 9 had already been initiated at the time of the panel request, was due to be completed during the Panel proceedings, and was the most recent periodic review stemming from the same anti-dumping duty order on imports of ball bearings from Japan. Thirdly, we recall that the Appellate Body in US — Upland Cotton stated that, as regards the initiation of dispute settlement proceedings, Article 3.3 focuses “on the perception or understanding of an aggrieved Member”. In the circumstances of this case, Japan had a basis to consider that Review 9, as part of a “chain of measures or a continuum” in which zeroing was used, could lead to the impairment of benefits accruing to it under the Anti-Dumping Agreement and the GATT 1994. Moreover, as we explained above, the inclusion of Review 9 was consistent with the objective envisaged in Article 3.3, namely, ensuring the prompt settlement of the dispute. It was then for the Panel to determine whether Review 9 fell within the scope of its jurisdiction and assess its consistency with the covered agreements.

 

T.6.3.21 US — Zeroing (Japan) (Article 21.5 — Japan), para. 129
(WT/DS322/AB/RW)

 

The United States raises an additional argument that accepting the Panel’s approach could lead to “asymmetry” in the sense that, on the one hand, complaining parties would be allowed to challenge measures that are subsequent to the panel request, while, on the other hand, similar requests by respondents for the inclusion of measures coming into existence during panel proceedings have been rejected by panels. We do not detect such asymmetrical treatment of complainants and respondents. In some cases, modifications of measures during the panel proceedings have been taken into account to the benefit of respondents. In US — Zeroing (EC) (Article 21.5 — EC), developments subsequent to the establishment of the panel were considered by the Appellate Body and, in the light of those developments, the Appellate Body found that the United States had “ultimately” not failed to comply with the DSB’s recommendations and rulings in relation to certain sunset reviews. Therefore, we do not agree that the alleged “asymmetry” in the treatment of complaining and respondent parties arises in the manner suggested by the United States.

 

 
T.6.4 “Post suspension of concessions”.
See also Suspension of Concessions or Other Obligations (S.9)     back to top

T.6.4.1 US — Continued Suspension / Canada — Continued Suspension, paras. 327-329, 331-332
(WT/DS320/AB/R, WT/DS321/AB/R)

 

… We have found that the European Communities was required to bring about substantive compliance for the United States and Canada to be under an obligation to terminate the suspension of concessions pursuant to Article 22.8 of the DSU. The DSB’s recommendations and rulings from EC — Hormones included a finding that the import ban on meat from cattle treated with oestradiol-17ß was inconsistent with Article 5.1 of the SPS Agreement because it was not based on a proper risk assessment. Thus, in order to determine whether the European Communities had complied with the DSB’s recommendations and rulings, the Panel had to examine whether the European Communities had brought its import ban relating to oestradiol-17ß into conformity with Article 5.1 of the SPS Agreement by basing the import ban in Directive 2003/74/EC relating to the same substance on a proper risk assessment.

 

We face a somewhat different situation in relation to Article 5.7 of the SPS Agreement. The European Communities did not invoke that provision in EC — Hormones to justify its import ban on meat from cattle treated with the other five hormones. Thus, the DSB’s recommendations and rulings in EC — Hormones did not include findings under Article 5.7 of the SPS Agreement. Instead, the import ban relating to the other five hormones was found to be inconsistent with Article 5.1 because it was not based on a proper risk assessment. This raises the question as to whether the European Communities’ changed justification precluded the Panel from examining its consistency with the SPS Agreement, and particularly with Article 5.7, a provision that was not part of the DSB’s recommendations and rulings in EC — Hormones. In our view, the Panel was not precluded from assessing the consistency of Directive 2003/74/EC with Article 5.7 for the following reasons. The definitive import ban that was the subject of EC — Hormones and found to be inconsistent with Article 5.1 has been replaced, under Directive 2003/74/EC, by a provisional ban relating to the five other hormones. The import ban applies to the same products: meat from cattle treated with progesterone, testosterone, trenbolone acetate, zeranol, and MGA. The European Communities replaced the original definitive ban with a provisional ban and invoked Article 5.7 as an alternative justification to Article 5.1. The European Communities has characterized the import ban as a provisional one and has sought to justify it under Article 5.7 of the SPS Agreement … Article 22.8 demands substantive compliance with the DSB’s recommendations and rulings. A change in justification, by itself, cannot be said to achieve substantive compliance. Compliance with the DSB’s recommendations and rulings concerning Article 5.1 and the definitive ban on the five hormones cannot be established without reviewing the alternative justification for the provisional ban under Article 5.7. If the new justification for the ban is not consistent with the SPS Agreement, substantive compliance has not been achieved.

 

… Also, we are mindful that a panel request submitted by an original respondent in the post-suspension stage is different from a panel request in original and compliance proceedings in the pre-suspension stage. In the requests for establishment of a panel, the European Communities asserts that it has brought itself into compliance with the DSB’s recommendations and rulings which included a violation of Article 5.1. …

 

 

… It is evident from the panel requests that the consistency of the United States’ and Canada’s continued suspension with Article 22.8 was linked to the European Communities’ implementation of the DSB’s recommendations and rulings in EC — Hormones. We fail to see how the claims explicitly listed in the panel requests by the European Communities could be resolved in isolation from the question of whether Directive 2003/74/EC has brought the European Communities into compliance with these DSB’s recommendations and rulings.

 

Taken together, these elements support the conclusion that the consistency of Directive 2003/74/EC with Articles 5.1 and 5.7 of the SPS Agreement was part of the matter to be examined by the Panel. In these circumstances, we reject the European Communities’ claim that the Panel exceeded its terms of reference by addressing the consistency of Directive 2003/74/EC with Articles 5.1 and 5.7 of the SPS Agreement. …

 


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