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> India — Patents (US), paras. 65–67
> Brazil — Aircraft (Article 21.5 — Canada), para. 46
> US — Shrimp (Article 21.5 — Malaysia), paras. 94–95
> US — Hot-Rolled Steel, para. 200
> US — Section 211 Appropriations Act, paras. 105–106
> US — Line Pipe, para. 158
> US — Offset Act (Byrd Amendment), para. 259
> US — Carbon Steel, para. 157
> US — Corrosion–Resistant Steel Sunset Review, para. 168
> US — Softwood Lumber IV, para. 56
> US — Oil Country Tubular Goods Sunset Reviews, para. 187
> US — Gambling, paras. 361–362
> US — Gambling, para. 364
> Dominican Republic — Import and Sale of Cigarettes, para. 112
> Dominican Republic — Import and Sale of Cigarettes, para. 114
> US — Softwood Lumber IV (Article 21.5 — Canada), para. 82
> China — Auto Parts, paras. 224–225 and Footnote 306
> US — Zeroing (Japan) (Article 21.5 — Japan), Footnote 452 to para. 175
> China — Publications and Audiovisual Products, paras. 177–178
> China — Publications and Audiovisual Products, para. 187
> Thailand — Cigarettes (Philippines), Footnote 253 to para. 159
> EC — Fasteners (China), paras. 294–296 and Footnote 471
> EC — Fasteners (China), paras. 296–297
> EC — Fasteners (China), para. 448
> US — Large Civil Aircraft (2nd complaint), para. 586
> US — Large Civil Aircraft (2nd complaint), para. 593
> Canada — Renewable Energy / Canada — Feed-in Tariff Program, para. 5.127
In public international law, an international tribunal may treat municipal law in several ways. Municipal law may serve as evidence of facts and may provide evidence of state practice. However, municipal law may also constitute evidence of compliance or non-compliance with international obligations. For example, in Certain German Interests in Polish Upper Silesia, the Permanent Court of International Justice observed:
It might be asked whether a difficulty does not arise from the fact that the Court would have to deal with the Polish law of July 14th, 1920. This, however, does not appear to be the case. From the standpoint of International Law and of the Court which is its organ, municipal laws are merely facts which express the will and constitute the activities of States, in the same manner as do legal decisions and administrative measures. The Court is certainly not called upon to interpret the Polish law as such; but there is nothing to prevent the Court’s giving judgment on the question whether or not, in applying that law, Poland is acting in conformity with its obligations towards Germany under the Geneva Convention. (emphasis added)
… It is clear that an examination of the relevant aspects of Indian municipal law … is essential to determining whether India has complied with its obligations under Article 70.8(a). There was simply no way for the Panel to make this determination without engaging in an examination of Indian law. But, as in the case cited above before the Permanent Court of International Justice, in this case, the Panel was not interpreting Indian law “as such”; rather, the Panel was examining Indian law solely for the purpose of determining whether India had met its obligations under the TRIPS Agreement. …
Previous GATT/WTO panels also have conducted a detailed examination of the domestic law of a Member in assessing the conformity of that domestic law with the relevant GATT/WTO obligations. …
We note Brazil’s argument before the Article 21.5 Panel that Brazil has a contractual obligation under domestic law to issue PROEX bonds pursuant to commitments that have already been made, and that Brazil could be liable for damages for breach of contract under Brazilian law if it failed to respect its contractual obligations. In response to a question from us at the oral hearing, however, Brazil conceded that a WTO Member’s domestic law does not excuse that Member from fulfilling its international obligations. Like the Article 21.5 Panel, we do not consider that any private contractual obligations, which Brazil may have under its domestic law, are relevant to the issue of whether the DSB’s recommendation to “withdraw” the prohibited export subsidies permits the continued issuance of NTN-I bonds under letters of commitment issued before 18 November 1999.
The CIT ruling in the Turtle Island case addressed the Revised Guidelines: that ruling made no change to the interpretation of Section 609. Moreover, as stated by the Panel, the ruling in the Turtle Island case is declaratory: the CIT has not ordered the United States Department of State to modify either the content or the interpretation of the Revised Guidelines; in the legal interpretation of the United States authorities entrusted with enforcing them, the Revised Guidelines remain the same. Rightly, when examining the United States measure, the Panel took into account the status of municipal law at the time. In particular, the Panel took note of the fact that the CIT ruling in the Turtle Island case has not altered the content of the Revised Guidelines, and has not prevented the United States government from authorizing the importation of TED-caught shrimp from uncertified countries. In response to our questions at the oral hearing, the United States confirmed that the Department of State has received no order from the CIT to change its practice, and, therefore, the Department of State continues to apply the Revised Guidelines as before. Malaysia has not shown otherwise.
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”.
Although it is not the role of panels or the Appellate Body to interpret a Member’s domestic legislation as such, it is permissible, indeed essential, to conduct a detailed examination of that legislation in assessing its consistency with WTO law. …
Our rulings in these previous appeals are clear: the municipal law of WTO Members may serve not only as evidence of facts, but also as evidence of compliance or non-compliance with international obligations. Under the DSU, a panel may examine the municipal law of a WTO Member for the purpose of determining whether that Member has complied with its obligations under the WTO Agreement. Such an assessment is a legal characterization by a panel. And, therefore, a panel’s assessment of municipal law as to its consistency with WTO obligations is subject to appellate review under Article 17.6 of the DSU.
To address the legal issues raised in this appeal, we must, therefore, necessarily examine the Panel’s interpretation of the meaning of Section 211 under United States law. … The meaning given by the Panel to Section 211 is, thus, clearly within the scope of our review as set out in Article 17.6 of the DSU.
… we are not concerned with how the competent authorities of WTO Members reach their determinations in applying safeguard measures. The Agreement on Safeguards does not prescribe the internal decision-making process for making such a determination. That is entirely up to WTO Members in the exercise of their sovereignty. We are concerned only with the determination itself, which is a singular act for which a WTO Member may be accountable in WTO dispute settlement. It is of no matter to us whether that singular act results from a decision by one, one hundred, or — as here — six individual decision-makers under the municipal law of that WTO Member. What matters to us is whether the determination, however it is decided domestically, meets the requirements of the Agreement on Safeguards.
… We note that the Panel referred to the “Findings of Congress”, not as a basis for its conclusion that the CDSOA constitutes a specific action against dumping or subsidies, but rather as a consideration confirming that conclusion. We agree with the Panel that the intent, stated or otherwise, of the legislators is not conclusive as to whether a measure is “against” dumping or subsidies under Article 18.1 of the Anti-Dumping Agreement or Article 32.1 of the SCM Agreement. Thus, it was not necessary for the Panel to inquire into the intent pursued by United States legislators in enacting the CDSOA and to take this into account in the analysis. The text of the CDSOA provides sufficient information on the structure and design of the CDSOA, that is to say, on the manner in which it operates, to permit an analysis whether the measure is “against” dumping or a subsidy. …
… a responding Member’s law will be treated as WTO-consistent until proven otherwise. The party asserting that another party’s municipal law, as such, is inconsistent with relevant treaty obligations bears the burden of introducing evidence as to the scope and meaning of such law to substantiate that assertion. Such evidence will typically be produced in the form of the text of the relevant legislation or legal instruments, which may be supported, as appropriate, by evidence of the consistent application of such laws, the pronouncements of domestic courts on the meaning of such laws, the opinions of legal experts and the writings of recognized scholars. The nature and extent of the evidence required to satisfy the burden of proof will vary from case to case.
When a measure is challenged “as such”, the starting point for an analysis must be the measure on its face. If the meaning and content of the measure are clear on its face, then the consistency of the measure as such can be assessed on that basis alone. If, however, the meaning or content of the measure is not evident on its face, further examination is required. …
… we observe that the arguments put forward by Canada relating to the nature of “personal property”, raise issues concerning the relevance, for WTO dispute settlement, of the way in which the municipal law of a WTO Member classifies or regulates things or transactions. Previous Appellate Body Reports confirm that an examination of municipal law or particular transactions governed by it might be relevant, as evidence, in ascertaining whether a financial contribution exists. However, municipal laws — in particular those relating to property — vary amongst WTO Members. Clearly, it would be inappropriate to characterize, for purposes of applying any provisions of the WTO covered agreements, the same thing or transaction differently, depending on its legal categorization within the jurisdictions of different Members. Accordingly, we emphasize that municipal law classifications are not determinative of the issues raised in this appeal.
We note the argument of the United States that the SPB is not a legal instrument under United States law. This argument, however, is not relevant to the question before us. The issue is not whether the SPB is a legal instrument within the domestic legal system of the United States, but rather, whether the SPB is a measure that may be challenged within the WTO system. The United States has explained that, within the domestic legal system of the United States, the SPB does not bind the USDOC and that the USDOC “is entirely free to depart from [the] SPB at any time”. However, it is not for us to opine on matters of United States domestic law. Our mandate is confined to clarifying the provisions of the WTO Agreement and to determining whether the challenged measures are consistent with those provisions. …
… according to Antigua, the IHA, on its face, authorizes domestic service suppliers, but not foreign service suppliers, to offer remote betting services in relation to certain horse races. To this extent, in Antigua’s view, the IHA “exempts” domestic service suppliers from the prohibitions of the Wire Act, the Travel Act, and the IGBA.
The United States disagreed, claiming that the IHA — a civil statute — cannot “repeal” the Wire Act, the Travel Act, or the IGBA — which are criminal statutes — by implication, that is, merely by virtue of the IHA’s adoption subsequent to that of the Wire Act, the Travel Act, and the IGBA. Rather, under principles of statutory interpretation in the United States, such a repeal could be effective only if done explicitly, which was not the case with the IHA.
… 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.
Against this background, and consistent with the view expressed by the Appellate Body in US — Carbon Steel, we agree with Honduras that consideration of the express wording of the text of legislation establishing a measure is a fundamental element of an assessment of that legislation. That said, however, we see no merit in the proposition advanced by Honduras that a panel must limit itself, in considering a claim against legislation as such, exclusively to the wording of legislation itself. Indeed, in US — Carbon Steel, the Appellate Body recognized that different types of evidence may support assertions as to the meaning and scope of an impugned measure. A panel enjoys a margin of discretion in weighing such evidence, commensurate with its role as trier of fact.
Finally, we observe that the situation in this appeal is different from that prevailing in India — Patents (US), upon which Honduras relies. India — Patents (US) was a case in which certain “administrative instructions” were held to be insufficient evidence of India’s compliance with its obligations under the “mailbox” requirements of the TRIPS Agreement, whereas certain legislative provisions were clearly inconsistent with those obligations. The panel and the Appellate Body were not required in India — Patents (US) to interpret the words of the relevant legislation alone, in isolation from other evidence, as Honduras would have had the Panel do in this case. Indeed, in India — Patents (US), there was a considerable amount of evidence available regarding the proper interpretation of the express terms of the Indian Patents Act, which included, but was not limited to, the text of the legislation itself. The panel in that case was thus able to balance India’s assertion that its “administrative instructions” — which required officials to disregard certain mandatory provisions of the Patents Act — were sufficient to implement India’s WTO obligations, against evidence that the Indian government itself considered that legislative amendment was necessary. Thus, in India — Patents (US), the panel made full use of the record that was before it. Although the record in that case appears to have been considerably richer than the one available in these proceedings (which appears to consist only of the text of the measure and the letter from the Director-General of Internal Taxes), it appears to us that the Panel in this case also considered all of the evidence that was before it. Accordingly, although the facts of this case differ from India — Patents (US), the panels in each case followed the same — correct — approach in taking into account relevant factual information presented by the parties.
… the United States emphasizes the separate nature of original countervailing duty investigations and duty assessment proceedings, and cites, inter alia, to its domestic law in this regard. Although such references may be useful, the Appellate Body has already observed that municipal law classifications are not determinative of issues raised in WTO dispute settlement proceedings. …
In examining this issue, we first note that the participants appear to disagree on the standard of review that we should apply to the Panel’s findings regarding the scope and meaning of Articles 2(2) and 21(1) of Decree 125. China submits that the Panel’s finding as to the applicability of the charge imposed under the measures at issue to imports of CKD and SKD kits is a matter of legal interpretation. The United States, on the other hand, considers that a panel’s “constructions of municipal law are factual determinations in WTO dispute settlement”. This means, for the United States, that the Appellate Body may not review such findings de novo, but must accord them the “same deference as other types of factual findings made by panels in WTO dispute settlement proceedings”.306
The Appellate Body has explicitly stated that the municipal law of WTO Members may serve not only as evidence of facts, but also as evidence of compliance or non-compliance with international obligations. When a panel examines the municipal law of a WTO Member for purposes of determining whether the Member has complied with its WTO obligations, that determination is a legal characterization by a panel, and is therefore subject to appellate review under Article 17.6 of the DSU. The Appellate Body has reviewed the meaning of a Member’s municipal law, on its face, to determine whether the legal characterization by the panel was in error, in particular when the claim before the panel concerned whether a specific instrument of municipal law was, as such, inconsistent with a Member’s obligations. We recognize that there may be instances in which a panel’s assessment of municipal law will go beyond the text of an instrument on its face, in which case further examination may be required, and may involve factual elements. With respect to such elements, the Appellate Body will not lightly interfere with a panel’s finding on appeal.
There was a debate between the participants at the oral hearing about whether the United States’ executive branch can take actions in connection with a periodic review that is the object of domestic litigation during the pendency of those domestic judicial proceedings. The United States indicated that the USDOC loses jurisdiction over a periodic review while it is under review by the United States courts. Japan asserted that the USDOC can request that the court return (or “remand”) the case back to it. We note that whatever restrictions there are on the United States’ executive branch taking actions during the pendency of domestic judicial proceedings would derive solely from United States law and not from the text of Article 13 of the Anti-Dumping Agreement. Therefore, they would not provide a basis for delaying compliance with the DSB’s recommendations and rulings beyond the end of the reasonable period of time.
We recall that a panel’s assessment of the meaning and content of a Member’s municipal law is subject to appellate review in order to determine whether the panel erred in its finding regarding the consistency of the Member’s municipal law with the WTO agreements. For example, in China — Auto Parts, the Appellate Body examined one provision of a Chinese Decree, focusing on the text and context of the relevant provision in the Decree and the overall “structure and logic” of the Decree, so as to determine whether the legal characterization by the panel was in error. At the same time, Article 17.6 of the DSU places some constraints on the Appellate Body’s review of some elements of a panel’s analysis of municipal law. Where, for instance, a panel resorts to evidence of how a municipal law has been applied, the opinions of experts, administrative practice, or pronouncements of domestic courts, the Panel’s findings on such elements are more likely to be factual in nature, and the Appellate Body will not lightly interfere with such findings. …
In this dispute, the issue of whether the Panel correctly characterized Article 30 of the Film Regulation as subject to China’s trading rights commitments is a legal issue within the scope of these appellate proceedings.
In addressing a claim that a panel mischaracterized a Member’s municipal law, the Appellate Body is not limited to reviewing only those provisions of the law explicitly examined by the panel. The Appellate Body has, in prior disputes, examined specific provisions, in the light of other provisions and the overall structure of the relevant municipal law, so as to determine whether a panel properly construed that law. …
We take note of Thailand’s additional argument that the Panel’s failure to respect Thailand’s due process rights was “exacerbated” by the fact that the Panel failed to give “due deference” to Thailand’s interpretation of its own law. … In our view, the panel in China — Intellectual Property Rights correctly recognized that, “objectively, a Member is normally well-placed to explain the meaning of its own law”, but that this does not relieve a party of its burden to adduce arguments and evidence necessary to sustain its proposed interpretation. (Panel Report, China — Intellectual Property Rights, para. 7.28) Further, a panel’s duties under Article 11 of the DSU require it to conduct an objective assessment of all such arguments and evidence. In this dispute, the Panel observed, in the context of its Article III:4 analysis, that “Thailand should normally be in a position to explain the nature” of obligations under Thai law but that, to the extent that the parties disagree on the content of such obligations, the Panel was “required to objectively examine the question at issue based on the text of the concerned provision[s] as well as on the evidence before [the Panel]”. (Panel Report, para. 7.684 (Footnote omitted)) We see no error in the Panel’s approach.
China contends that the Panel’s finding on the “meaning” and “scope” of Article 9(5) of the Basic AD Regulation is an issue of fact that the Appellate Body is not competent to review pursuant to Article 17.6 of the DSU. …
… We disagree with China and the Panel.471 On several occasions, the Appellate Body has clarified that municipal law may serve both as evidence of facts and evidence of a Member’s compliance or non-compliance with its international obligations. In particular, in US — Section 211 Appropriations Act, the Appellate Body stated that, when a panel examines the municipal law of a WTO Member for the purpose of determining whether that Member has complied with its WTO obligations, that examination is a legal characterization by a panel and is therefore subject to appellate review under Article 17.6 of the DSU.
In China — Auto Parts, the Appellate Body stated that it could review the panel’s findings regarding the meaning of municipal law to the extent that the panel conducted its examination of municipal law for purposes of determining whether the Member had complied with its WTO obligations. The Appellate Body recognized that there will be instances in which a panel’s assessment of municipal law will go beyond the text of the instrument on its face, in which case further examination may be required, and may involve factual elements. The Appellate Body explained that it would not lightly interfere with a panel’s assessment of municipal law that went beyond the text of an instrument on its face and involved such factual elements. The Appellate Body clarified that the examination of a municipal legal instrument will focus on its text, but may also include the context of the provision and the “overall structure and logic” of the municipal law. …
… In this dispute, the Panel did not review factual elements concerning the application of Article 9(5), such as pronouncements by EU domestic courts or opinions of legal experts or recognized scholars, but assessed Article 9(5) of the Basic AD Regulation, based on the text of the provision, its context, and its operation.
Therefore, we conclude that the Panel’s assessment of the meaning and scope of Article 9(5) of the Basic AD Regulation, which is based on the text of the provision, its context within the structure of the other relevant provisions of the Regulation, and its operation is not a “factual matter” and is not excluded from appellate review. Rather, the Panel examined Article 9(5) for the purpose of determining its consistency with a number of provisions of the Anti-Dumping Agreement and the GATT 1994, which, as a matter of legal characterization, is subject to appellate review according to Article 17.6 of the DSU.
We have sympathy for China’s argument that whether the Information Document could be taken into account as a piece of relevant evidence should not depend on its legal status under EU law. Although this document is not part of the measure at issue as a document issued by the Commission during the investigation, it could nonetheless shed light on aspects of the investigation. At the same time, we note that the Panel did pose certain questions to the European Union concerning the Information Document, and therefore did not simply disregard or ignore the evidence submitted by China. …
… a proper determination of which provision of the WTO agreements applies to a given measure must be grounded in a proper understanding of the measure’s relevant characteristics. In this regard, we note that the classification of a transaction under municipal law is not “determinative” of whether that measure can be characterized as a financial contribution under Article 1.1(a)(1) of the SCM Agreement. Moreover, the Appellate Body has “reviewed the meaning of a Member’s municipal law, on its face, to determine whether the legal characterization by the panel was in error, in particular when the claim before the panel concerned whether a specific instrument of municipal law was, as such, inconsistent with a Member’s obligations”.
The US legislative and regulatory framework indicates that procurement contracts are the instruments used when the US Government intends to make a purchase. The label given to an instrument under municipal law, however, is not dispositive and cannot be the end of our analysis …
… Japan suggests that the Panel erred by assuming that, if a measure is characterized in a particular manner under domestic law (e.g. as a government purchase), it can never be characterized in a different manner under WTO law. … Japan is correct in arguing that the manner in which municipal law characterizes a measure is not determinative for its characterization under the covered agreements. … However, we do not consider that, in reaching its conclusion as to the proper characterization of the measures at issue under the SCM Agreement, the Panel relied exclusively on their characterization under Ontario law, as Japan contends. On the contrary, the Panel recognized that the label given to an instrument under municipal law is not dispositive of the analysis under WTO law and found that the measures at issue constitute government “purchases [of] goods” under Article 1.1(a)(1)(iii) for three main reasons. First, the OPA pays for electricity that is delivered into Ontario’s electricity grid. Second, the Government of Ontario takes possession over electricity and therefore purchases electricity. Third, only as “a relevant factor” in its analysis, the Panel took into account that “the Electricity Act of 1998, the Ministerial Direction, the FIT and microFIT Contracts and other documents, all in one way or another characterize the challenged measures as a procurement or purchase of electricity”. The Panel concluded that the legislative and regulatory framework of the FIT Programme, as well as the language found in certain clauses of the FIT and microFIT Contracts, “leave no doubt that the challenged measures are perceived by the Government of Ontario, and others in Ontario, as governmental activity that involves the procurement or purchase of electricity”. Consequently, we disagree with Japan that the Panel’s analysis was based on the proposition that the characterization of a measure under domestic law is dispositive of its legal characterization under WTO law.
306. … Canada expressed a similar view at the oral hearing in this appeal, stating that a panel’s interpretation of municipal law is a matter of fact and is subject to the standard of review to be accorded to factual findings. back to text
471. At the outset of its analysis of the scope of Article 9(5) of the Basic AD Regulation, the Panel stated that it fell upon it “to clarify the scope/operation of Article 9(5) of the Basic AD Regulation as a factual matter before engaging in a substantive analysis of China’s claims”. (Panel Report, para. 7.68) back to text
The texts reproduced here do not have the legal standing of the original documents which are entrusted and kept at the WTO Secretariat in Geneva.