A. Introduction

101. India appeals the Panel's finding that the European Communities did not act inconsistently with paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement.¹²⁰  India contends that the European Communities did act inconsistently with those provisions, because the investigating authorities of the European Communities found, for purposes of determining injury, that  all  imports attributable to Indian producers or exporters for which  no individual  margin of dumping was calculated were  dumped. India argues that this "determination by the EC neither rested on positive evidence, nor was objective, and, accordingly, was inconsistent with Articles 3.1 and 3.2 of the Anti‑Dumping Agreement."¹²¹  According to India, the European Communities was required to determine the volume of dumped imports attributable to producers that  were not  examined individually on the basis of the  proportion  of imports found to be dumped from producers that  were examined individually.¹²²  In other words, India argues that, where a certain proportion of the volume of the imports attributable to producers examined individually is found to be dumped, paragraphs 1 and 2 of Article 3 require the investigating authorities to determine the volume of dumped imports attributable to the producers that were  not  individually examined in the  same proportion.

102. We begin by recalling the findings of the original panel and the Article 21.5 Panel insofar as they are relevant for resolving this issue. Before the  original panel,  India claimed that, by including import transactions  for which there was no evidence of dumping in the volume of dumped imports when determining injury, the European Communities violated paragraphs 1 and 2 of Article 3. The European Communities contended that the volume of dumped imports, for purposes of Article 3, includes  all  imports originating in the investigated country  found to be dumping. The original panel disagreed with India, and concluded that dumping is a determination made with reference to imports from a particular  producer  or  exporter,  and not with reference to individual transactions.¹²³  In the original panel's view, if a producer or exporter that is examined individually is found to be dumping,  all  import transactions attributable to that producer or exporter may be considered as dumped. The original panel found no violation of Article 3 in relation to the determination of the volume of dumped imports.¹²⁴  This latter finding of the original panel was  not appealed.

103. In the  redetermination  that gave rise to this appeal, the investigating authorities of the European Communities recalculated dumping margins for the five Indian producers and exporters that had been examined individually  in the original determination that led to the original measure. They did so without applying the practice of "zeroing", which had been found to be inconsistent with Article 2.4.2 in the original proceedings.¹²⁵  In this recalculation, the investigating authorities found that three of the five Indian producers examined individually were dumping, and two were  not. It is undisputed between the parties that the two Indian producers found  not  to be dumping accounted for 53 percent of all imports attributable to the five producers which were examined individually. Based on this recalculation, the European Communities concluded that  all  imports attributable to  all other Indian producers or exporters�which were  not  examined individually�were dumped. For purposes of determining injury, the investigating authorities  excluded  from the volume of dumped imports the imports from the two producers that were examined  individually  and found  not  to be dumping¹²⁶, but included all imports from Indian producers that had not been examined individually and for which, therefore, there was no direct evidence from the investigation.

104. Before the  Article 21.5 Panel,  India claimed that the European Communities violated paragraphs 1 and 2 of Article 3 by finding, in this redetermination, that  all  imports attributable to Indian producers or exporters that were  not  individually examined were  dumped. In reply, the European Communities contended that nothing in the  Anti-Dumping Agreement  prohibits Members from including in the volume of dumped imports, the volume of all imports from producers which were examined individually and found to be dumping, as well as  all  imports from producers which were  not  examined individually.

105. The Panel found that the European Communities "did not act inconsistently with Articles 3.1 and 3.2 of the [Anti-Dumping] Agreement in its consideration of 'dumped imports' in this case".¹²⁷  The Panel's finding was premised essentially on the argument that paragraphs 1 and 2 of Article 3 "contain no guidance whatsoever regarding the determination of the volume of dumped imports".¹²⁸  In the Panel's view, the fact that "Article 9.4 allows anti-dumping duties to be collected on imports from producers for which an individual determination of dumping � was not made � necessarily entails that [imports attributed to] such producers are properly considered � as 'dumped imports' for the purposes of Articles 3.1 and 3.2".¹²⁹  The Panel concluded "that the [Anti-Dumping] Agreement does not require an investigating authority to determine the volume of imports from producers outside the sample that is properly considered 'dumped imports' for purposes of injury analysis on the basis of the proportion of imports from sampled producers that is found to be dumped." ¹³⁰

106. On appeal, India requests that we  reverse  this finding. In India's view, paragraphs 1 and 2 of Article 3 do not permit a determination of injury to be based on imports from producers for which there is "no evidence" of dumping.¹³¹  India notes that the evidence from the sample of  examined producers indicated that only 47 percent of the imports attributed to those producers were dumped. Therefore, according to India, the European Communities' determination, on the basis of this evidence alone, that 86 percent of the  total  imports from India were dumped, and, therefore, that this was the percentage of the "volume of the dumped imports", under paragraphs 1 and 2 of Article 3, did not result from an "objective examination" on the basis of "positive evidence", as required by the first paragraph of Article 3.¹³²  In India's view, imports from producers for which an  individual determination of dumping is  not  made must be presumed  not  to have been dumped in the same proportion  as imports determined  not  to have been dumped from producers for which an  individual determination of dumping  was  made.¹³³ 

107. The European Communities requests that we  uphold  the Panel's finding. The European Communities argues that it is entitled, for purposes of paragraphs 1 and 2 of Article 3, to treat as dumped  all  imports attributable to producers for which it did  not  make an affirmative determination of  no  dumping. According to the European Communities, this includes all imports attributable to producers that were examined  individually  and found to be dumping, as well as  all  imports attributable to producers that were  not  examined individually.¹³⁴  According to the European Communities,  all  imports attributable to producers that were  not  examined individually may be treated as  dumped,  for purposes of determining injury under Article 3, because Article 9.4 permits the imposition of the "all others" duty rate on imports attributable to  non-examined  producers.¹³⁵ 

B. Analysis

108. We recall at the outset that the  Anti-Dumping Agreement  permits importing Members to counteract dumping by imposing anti-dumping measures on imports from companies of exporting Members when an investigation demonstrates that all the requirements of that Agreement are fulfilled. It is useful also to recall the specific standard of review under the  Anti-Dumping Agreement that the Panel was required to follow in this dispute. This standard of review is set out in Article 17.6 of the Anti-Dumping Agreement.¹³⁶  As to the facts, under Article 17.6(i), a panel "shall" determine whether the establishment of the facts by the investigating authorities was "proper" and whether the evaluation of those facts was "unbiased and objective". If the establishment of the facts was proper and the evaluation was unbiased and objective, then a panel "shall not" overturn that evaluation, even though it might have reached a different conclusion. As to the law, under Article 17.6(ii), first sentence, a panel "shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law." Under Article 17.6(ii), second sentence, where a panel finds from such an interpretation that a relevant provision of the Anti‑Dumping Agreement  "admits of more than one permissible interpretation", the panel "shall find the [investigating] authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations." We examine the issues raised in this appeal with this standard of review in mind.

109. We begin our analysis with an examination of Article 3 of the  Anti-Dumping Agreement, which is entitled "Determination of Injury". Paragraphs 1 and 2 of Article 3 read as follows:

3.1 A determination of injury for purposes of Article VI of GATT 1994 shall be based on positive evidence and involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products. (emphasis added)

3.2 With regard to the volume of the dumped imports,  the investigating authorities shall consider whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in the importing Member. With regard to the effect of the dumped imports on prices, the investigating authorities shall consider whether there has been a significant price undercutting by the dumped imports as compared with the price of a like product of the importing Member, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. No one or several of these factors can necessarily give decisive guidance. (emphasis added)

These obligations are absolute. They provide for no exceptions, and they include no qualifications. They must be met by every investigating authority in every injury determination.

110. In  Thailand � H-Beams,  we emphasized the relevance of Article 3.1 as an "overarching provision" that informs the more detailed obligations in the succeeding paragraphs of Article 3:

Article 3 as a whole deals with obligations of Members with respect to the determination of injury. Article 3.1 is an overarching provision that sets forth a Member's fundamental, substantive obligation in this respect. Article 3.1 informs the more detailed obligations in succeeding paragraphs. These obligations concern the determination of the volume of dumped imports, and their effect on prices (Article 3.2) � The focus of Article 3 is thus on  substantive  obligations that a Member must fulfill in making an injury determination.¹³⁷  (original italics; underlining added)

111. It is clear from the text of Article 3.1 that investigating authorities must ensure that a "determination of injury" is made on the basis of "positive evidence" and an "objective examination" of the volume and effect of imports that  are dumped�and to the exclusion of the volume and effect of imports that  are not dumped. It is clear from the text of Article 3.2 that investigating authorities must consider whether there has been a significant increase in  dumped  imports, and that they must examine the effect of  dumped  imports on prices resulting from price undercutting, price depression, or price suppression.

112. Article 3.5 continues in the same vein as the initial paragraphs of Article 3 by requiring a demonstration that dumped imports are causing injury to the domestic industry "through the  effects of dumping", which, of course, depends upon there being imports from producers or exporters that  are dumped. In addition, Article 3.5 lists "volume and prices of imports  not  sold at dumping prices" as an example of "known factors other than the dumped  imports" that are injuring the domestic industry at the same time as the dumped imports. Article 3.5 requires that this injury  not  be attributed to the dumped imports. Thus, injury caused by "volume and prices of imports  not  sold at dumping prices" must be  separated and distinguished  from injury caused by the "dumped imports". None of these provisions of the  Anti-Dumping Agreement  can be construed to suggest that Members may include in the volume of  dumped  imports the imports from producers that are not  found to be dumping.

113. Although paragraphs 1 and 2 of Article 3 do not set out a specific  methodology that investigating authorities are required to follow when calculating the volume of "dumped imports", this does not mean that paragraphs 1 and 2 of Article 3 confer unfettered discretion on investigating authorities to pick and choose whatever methodology they see fit for determining the volume and effects of the dumped imports. Paragraphs 1 and 2 of Article 3 require investigating authorities to make a determination of injury on the basis of "positive evidence" and to ensure that the injury determination results from an "objective examination" of the volume of dumped imports, the effects of the dumped imports on prices, and, ultimately, the state of the domestic industry. Thus, whatever methodology investigating authorities choose for determining the volume of dumped imports, if that methodology fails to ensure that a determination of injury is made on the basis of "positive evidence" and involves an "objective examination" of  dumped  imports�rather than imports that are found  not to be  dumped�it is not consistent with paragraphs 1 and 2 of Article 3.

114. In  US � Hot-Rolled Steel,  we defined "positive evidence" as follows:

The term "positive evidence" relates, in our view, to the  quality  of the evidence that authorities may rely upon in making a determination. The word "positive" means, to us, that the evidence must be of an affirmative, objective  and  verifiable  character, and that it must be credible.¹³⁸  (emphasis added)

In that same appeal, we also defined an "objective examination":

The term "objective examination" aims at a different aspect of the investigating authorities' determination. While the term "positive evidence" focuses on the facts underpinning and justifying the injury determination, the term "objective examination" is concerned with the investigative process itself. The word "examination" relates, in our view, to the way in which the evidence is gathered, inquired into and, subsequently, evaluated; that is, it relates to the conduct of the investigation generally. The word "objective", which qualifies the word "examination", indicates essentially that the "examination" process must conform to the dictates of the basic principles of good faith and fundamental fairness.¹³⁹  (footnote omitted)

We summed up in that appeal the requirement to conduct an "objective examination" as follows:

In short, an "objective examination" requires that the domestic industry, and the effects of dumped imports, be investigated in an unbiased  manner, without favouring the interests of any interested party, or group of interested parties, in the investigation. The duty of the investigating authorities to conduct an "objective examination" recognizes that the determination will be influenced by the objectivity, or any lack thereof, of the investigative process.¹⁴⁰  (footnote omitted, emphasis added)

We observe that, in response to our questions at the oral hearing, both participants in this appeal confirmed that they agree with these interpretations of the terms "positive evidence" and an "objective examination", as set out in  US �Hot-Rolled Steel.¹⁴¹ 

115. Moreover, at the oral hearing, none of the participants disagreed with the findings of the original panel and the Article 21.5 Panel relating to the treatment, for purposes of determining injury, of imports attributed to producers or exporters that were  examined individually  in an investigation. Accordingly, if a producer or exporter is found to be dumping, all imports from that producer or exporter may be  included  in the volume of dumped imports, but, if a producer or exporter is found not  to be dumping, all imports from that producer or exporter must be  excluded  from the volume of dumped imports.¹⁴² 

116. The issue raised in this appeal, however, does not relate to imports from producers or exporters that were examined individually  in an investigation. Rather, it relates to the appropriate treatment of imports from producers or exporters that  were not examined individually  in such an investigation. The appeal before us involves an investigation in which  individual  margins of dumping have  not  been determined for  each  Indian producer exporting to the European Communities. It is, of course, not necessary under the  Anti-Dumping Agreement  for investigating authorities to examine  each producer and exporter. The second sentence of Article 6.10 authorizes investigating authorities, when determining margins of dumping, to  limit their examination  where the number of producers or exporters of the product under investigation is so large that the determination of an  individual  margin of dumping for  each  of them would be  impracticable. This limited examination may be conducted in one of two alternative ways identified in Article 6.10: the authorities may limit their examination "either to a reasonable number of interested parties or products by using  samples  which are statistically valid on the basis of information available to the authorities at the time of the selection, or to the largest percentage of the volume of the exports from the country in question which can reasonably be investigated."

117. Thus, there is a right to conduct a limited examination in the circumstances described in the second sentence of Article 6.10. Paragraphs 1 and 2 of Article 3 must, accordingly, be interpreted in a way that permits investigating authorities to satisfy the requirements of "positive evidence" and an "objective examination" without having to investigate each producer or exporter individually. This does not, however, in any way, absolve investigating authorities from the absolute requirements in paragraphs 1 and 2 of Article 3 that the volume of dumped imports be determined on the basis of "positive evidence" and an "objective examination".

118. We have noted that neither paragraph 1 nor paragraph 2 of Article 3�nor any other provision of the  Anti-Dumping Agreement�sets forth a  specific  methodology that must be followed by investigating authorities when calculating the volume of dumped imports for purposes of determining injury. Still, whatever methodology investigating authorities choose for calculating the volume of "dumped imports", that calculation and, ultimately, the determination of injury under Article 3, clearly must be made on the basis of "positive evidence" and involve an "objective examination". These requirements are not ambiguous, and they do not "admit of more than one permissible interpretation" within the meaning of the second sentence of Article 17.6(ii). Therefore, as in  US � Hot-Rolled Steel,  our interpretation of these requirements is based on customary rules of interpretation of public international law, as required by the first sentence of Article 17.6(ii).¹⁴³  This leaves no room, in this appeal, for recourse to the second sentence of Article 17.6(ii) in interpreting paragraphs 1 and 2 of Article 3.

119. India argues that the European Communities failed to determine the volume of dumped imports attributable to  non-examined producers on the basis of "positive evidence" and an "objective examination". Although the Indian producers that were  examined  individually and found to be dumping accounted for only 47 percent of imports attributable to all examined producers, the European Communities determined that  all  imports attributable to  non-examined producers were dumped. India submits that an "objective examination" of the "positive evidence" from  examined producers would lead to the conclusion that the same proportion, that is 47 percent, of imports attributable to  non-examined producers were dumped. The European Communities contends that its conclusion, for purposes of determining injury, that  all  imports attributable to  non-examined producers are dumped, is based on "positive evidence" and an "objective examination", as required by paragraphs 1 and 2 of Article 3, because it is justified by Article 9.4. Article 9.4 defines the maximum anti-dumping duty that may be applied to imports from producers for which an individual dumping margin has  not  been separately calculated�commonly referred to as the "all others" duty rate.¹⁴⁴  The European Communities argues that, inasmuch as Article 9.4 does  not  limit the  volume of imports from  non-examined producers to which the "all others" duty rate may be applied, the practice of the European Communities must be permissible because the  volume  of imports subject to anti-dumping duties under Article 9 must be the  same  as the  volume  considered to be dumped for purposes of determining injury under Article 3.¹⁴⁵ 

120. Regarding the requirement of "positive evidence", the European Communities maintains that it determined the volume of dumped imports on the basis of "positive evidence" under Article 3 because its investigating authorities calculated the "all others" duty rate under Article 9.4 on the basis of the weighted average of the dumping margins established for the three producers that were examined and found to be dumping. Regarding the requirement of an "objective examination", the European Communities points to the fact that Article 9.4 permits the imposition of the "all others" duty rate on  all  imports from all  non-examined producers, and argues on this basis that the European Communities is entitled to include  all  imports from non-examined producers in the volume of dumped  imports, when determining injury under Article 3.¹⁴⁶  In the view of the European Communities, this approach must necessarily constitute an "objective examination" for purposes of Article 3 because, if this approach were not "objective and unbiased"¹⁴⁷, the drafters of the Anti‑Dumping Agreement  would not have adopted it in Article 9.4. Accordingly, the European Communities concludes that the approach applied in this investigation satisfies the requirements of paragraphs 1 and 2 of Article 3 to base the determination of the volume of dumped imports and, ultimately, the determination of injury, on "positive evidence" and an "objective examination".

121. India rejects the European Communities' interpretation of the "volume of dumped imports" in Article 3 as including the volume of imports subject to the application of the "all others" duty rate under Article 9.4. India submits that the determination of the dumping "margin" is separate and distinct from the imposition and collection of anti-dumping "duties".¹⁴⁸  In India's view, Article 9.4 comes into play only  after  the investigating authorities have determined that all the conditions for the imposition of anti-dumping duties (namely, dumping, injury, and causation) have been fulfilled. According to India, Article 9.4 cannot be read to permit a derogation from the explicit requirements of paragraphs 1 and 2 of Article 3, namely that a determination of injury must be made on the basis of "positive evidence" and an "objective examination" of the volume and the effect of the dumped imports.

122. We turn now to an examination of Article 9, entitled "Imposition and Collection of Anti-Dumping Duties". Article 9.1 confers on Members the discretion to decide whether to impose an anti-dumping duty in cases where all the requirements for such imposition "have been fulfilled ".¹⁴⁹  Where these requirements "have been fulfilled "¹⁵⁰, Article 9.4 defines the maximum anti-dumping duty that may be applied to exports from producers not individually examined when the investigating authorities "have limited " their examination in accordance with either alternative provided in the second sentence of Article 6.10.¹⁵¹ 

123. Japan contended in its third party submission, and also in its statement at the oral hearing, that the use of the present perfect tense in paragraphs 1 and 4 of Article 9 ("have been fulfilled" and "have limited") is significant.¹⁵²  In our view, too, the use by the drafters of the present perfect tense is significant;  it indicates that the imposition and collection of anti-dumping duties under Article 9 is a separate and distinct phase of an anti-dumping action that necessarily occurs  after  the determination of dumping, injury, and causation under Articles 2 and 3 has been made.¹⁵³  Members have the right to impose and collect anti-dumping duties only after  the completion of an investigation in which it has been established  that the requirements of dumping, injury, and causation  "have been fulfilled ". In other words, the right to impose anti-dumping duties under Article 9 is a  consequence  of the prior determination of the existence of dumping margins, injury, and a causal link. The determination, by the investigating authorities of a Member, that there is injury caused by a certain volume of dumping necessarily precedes and gives rise to the  consequential  right to impose and collect anti-dumping duties.¹⁵⁴ 

124. When examining the practice of "zeroing" in the original dispute, we noted that the requirements of Article 9 do not have a bearing on Article 2.4.2, because the rules on the determination of the margin of dumping are distinct and separate from the rules on the  imposition and collection  of anti-dumping duties.¹⁵⁵  Similarly, in this implementation dispute, we are of the view that Article 9.4, which specifies what action may be taken only  after  certain prerequisites have been determined, is of little relevance for interpreting Article 3, which sets out those prerequisites. We do not see how Article 9.4, which authorizes the imposition of a certain maximum anti-dumping duty  on imports from non-examined producers, is relevant for interpreting paragraphs 1 and 2 of Article 3, which deal with the determination of injury based on the  volume  of "dumped imports". Paragraphs 1 and 2 of Article 3 make no reference at all to Article 9.4, or to the specific methodology set out in Article 9.4 for calculating the "all others" duty rate, which comes into play only when imposing and collecting anti-dumping duties. Likewise, Article 9.4 does not mention the term "dumped imports" or the "volume" of such imports. In our view, the right to impose a certain maximum amount of anti-dumping  duties on imports attributable to  non-examined producers under Article 9.4 cannot be read as permitting a derogation from the express and unambiguous requirements of paragraphs 1 and 2 of Article 3 to determine the  volume  of dumped imports�including dumped import volumes attributable to  non-examined producers�on the basis of "positive evidence" and an "objective examination". Thus, we see no basis for the European Communities' view that Article 9.4 establishes a methodology for calculating the volume of dumped imports from  non-examined producers for purposes of determining injury on the basis of "positive evidence" and an "objective examination" under paragraphs 1 and 2 of Article 3.

125. Moreover, Article 9.4, which relates to the imposition of anti-dumping duties on imports from non-examined producers, has, by its own terms, a limited purpose as an  exception  to the rule in Article 9.3. Article 9.3 provides that "[t]he amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2."¹⁵⁶  When individual dumping margins are determined for  each  producer or exporter, the  volume  of imports attributable to producers that were examined individually and found to be dumping will match the  volume  of imports attributable to those producers for which anti-dumping duties are collected. However, as noted earlier, where the determination of individual dumping margins for each producer is  impracticable,  the second sentence of Article 6.10 permits investigating authorities�as an exception to the rule in the first sentence of Article 6.10¹⁵⁷ �to  limit  their examination to some�and not all�producers. In such cases, as an  exception  to the rule in Article 9.3, Article 9.4 permits the imposition of a certain maximum amount of anti-dumping duties on imports attributable to producers that were  not examined individually¹⁵⁸, irrespective of whether those producers would have been found to be dumping had they been examined individually. It is likely, therefore, that this "all others" duty rate will be imposed on imports attributable at least to some producers that, in reality, might  not  be dumping. Hence, the reliance by the European Communities on Article 9.4, in interpreting paragraphs 1 and 2 of Article 3, is misplaced.

126. In sum, Article 9.4 provides no guidance for determining the volume of dumped imports from producers that  were not  individually examined on the basis of "positive evidence" and an "objective examination" under Article 3. The exception in Article 9.4, which authorizes the imposition of anti-dumping  duties  on imports from producers for which  no  individual dumping margin has been calculated,  cannot be assumed  to extend to Article 3, and, in particular, in this dispute, to paragraphs 1 and 2 of Article 3. For the same reasons, we do not see why the volume of imports that has been found to be dumped by non-examined producers, for purposes of determining  injury  under paragraphs 1 and 2 of Article 3, must be  congruent  with the volume of imports from those non-examined producers that is subject to the  imposition of anti-dumping duties  under Article 9.4, as contended by the European Communities and the Panel.¹⁵⁹ 

127. Having concluded that Article 9.4 does not provide justification for considering  all  imports from  non-examined producers as  dumped  for purposes of Article 3, we turn now to consider whether the European Communities' determination of the volume of dumped imports and, ultimately, of injury, in this investigation, was in accordance with paragraphs 1 and 2 of Article 3. To do so, we must examine whether this determination was made on the basis of "positive evidence" and involved an "objective examination" of the volume of dumped imports and their effect on prices and on domestic producers.

128. As we have already noted, it is not in dispute between the participants that the evidence from the five examined  Indian producers exporting to the European Communities shows that the producers accounting for 47 percent of all imports attributable to all examined producers were found to be dumping; nor is it in dispute that the evidence also shows that the producers accounting for 53 percent of those imports were found  not  to be dumping.¹⁶⁰  The European Communities confirmed at the oral hearing that the evidence from the five examined producers is the entirety of the evidence on which the determination by the European Communities of the volume of dumped imports (attributable to examined and non-examined producers) was based¹⁶¹;  thus, the participants agree that there is no other evidence on the record of this investigation that could serve as "positive evidence" for determining the volume of dumped imports. Therefore, it is undisputed that the  only  available evidence for determining which import volumes can be attributed to  non-examined producers that are dumping is the evidence obtained from the five examined producers.

129. We observe that, in other anti-dumping investigations, there may be different and additional types of evidence that properly could be considered as "positive evidence" and relied upon when determining, on the basis of an "objective examination", the volume of dumped imports.¹⁶²  That, however, is not the case before us.

130. In this dispute, we agree with the participants that the evidence on dumping margins established for the producers that were examined individually is "positive" in the sense that we defined it in  US � Hot-Rolled Steel,  namely that it is "affirmative, objective, verifiable, and credible".¹⁶³  We also agree with India that evidence on  dumping  margins of more than  de minimis for examined producers is relevant as "positive evidence" in this investigation for determining which import volumes may be attributed to  non-examined producers that are  dumping.¹⁶⁴  In our view, both these qualities of evidence are probative of the existence of dumping in the circumstances of this investigation. Therefore, we conclude that the European Communities met the first requirement of paragraphs 1 and 2 of Article 3 by basing its determination on that "positive evidence".

131. Having established this, we must next assess whether the determination at issue of the volume of dumped imports attributable to non-examined producers was based on an "objective examination" of that positive evidence. India argues that, in the light of the facts of this dispute, an "objective examination" could not  have led the European Communities to conclude that  all imports attributable to  non-examined producers were dumped; nor, India argues, could an "objective examination" have led to the conclusion in the redetermination that 86 percent of  total  imports from all examined  and non-examined  Indian producers were dumped.¹⁶⁵  The European Communities contends that import volumes subject to the "all others" duty rate under Article 9.4 may be considered as "dumped imports" under paragraphs 1 and 2 of Article 3. As explained earlier, the European Communities is of the view that the approach authorized under Article 9.4 meets the "objective examination" requirement of Article 3.1.

132. We disagree with the European Communities. We recall our statement in  US � Hot-Rolled Steel  that:

� the investigating authorities' evaluation of the relevant factors must respect the fundamental obligation, in Article 3.1, of those authorities to conduct an "objective examination". If an examination is to be "objective", the identification, investigation and evaluation of the relevant factors must be  even-handed. Thus, investigating authorities are  not  entitled to conduct their investigation in such a way that it becomes  more likely that, as a result of the fact-finding or evaluation process, they will determine that the domestic industry is injured.¹⁶⁶  (emphasis added)

The approach taken by the European Communities in determining the volume of dumped imports was not based on an "objective examination". The examination was not "objective" because its result is predetermined by the methodology itself. Under the approach used by the European Communities, whenever the investigating authorities decide to  limit  the examination to some, but not all, producers�as they are entitled to do under Article 6.10�all  imports from  all non-examined producers will  necessarily always be included  in the volume of dumped imports under Article 3, as long as any of the producers examined individually were found to be dumping. This is so because Article 9.4 permits the imposition of the "all others" duty rate on imports from non-examined producers,  regardless  of which alternative in the second sentence of Article 6.10 is applied. In other words, under the European Communities' approach, imports attributable to  non-examined producers are simply  presumed,  in all circumstances, to be  dumped,  for purposes of Article 3, solely because they are subject to the imposition of anti-dumping duties under Article 9.4. This approach makes it "more likely [that the investigating authorities] will determine that the domestic industry is injured"¹⁶⁷, and, therefore, it cannot be "objective". Moreover, such an approach tends to favour methodologies where  small numbers  of producers are examined individually. This is because the smaller  the number of individually-examined producers, the  larger  the amount of imports attributable to  non-examined producers, and, therefore, the larger the amount of imports presumed to be  dumped. Given that the  Anti-Dumping Agreement  generally requires examination of  all producers, and only exceptionally permits examination of only  some  of them, it seems to us that the interpretation proposed by the European Communities cannot have been intended by the drafters of the Agreement.

133. For these reasons, we conclude that the European Communities' determination that  all imports attributable to  non-examined producers were dumped�even though the evidence from examined  producers showed that producers accounting for 53 percent of imports attributed to examined producers were not dumping�did not lead to a result that was  unbiased, even-handed,  and fair.¹⁶⁸  Therefore, the European Communities did not satisfy the requirements of paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports on the basis of an examination that is "objective".

134. India also challenges the Panel's finding relating to Article 6.10.¹⁶⁹  As we have indicated, in this investigation, the European Communities did not determine individual dumping margins for each Indian producer exporting bed linen to the European Communities, as permitted by Article 6.10. The Panel found that the European Communities chose the second alternative in Article 6.10, and limited its examination to producers and exporters representing the largest percentage of the volume of the exports from India that could reasonably be investigated.¹⁷⁰

135. On appeal, India asks us to find that the European Communities chose, instead, the first option in Article 6.10, and selected for  individual  examination a "statistically valid sample" representative of all  Indian producers exporting to the European Communities.¹⁷¹  In India's view, the proportion of dumped imports attributable to  examined  producers is even more relevant for determining, on the basis of "positive evidence" and an "objective examination", the volume of dumped imports attributable to  non-examined producers, when the examined producers are found to constitute a statistically valid sample representative of all Indian producers. The European Communities contends that the Panel's finding that the investigating authorities applied the  second alternative in Article 6.10 is a factual finding beyond appellate review. In the alternative, the European Communities maintains that its investigating authorities relied upon the second alternative and examined the largest percentage of the volume of exports which could reasonably be investigated.

136. Article 6 is entitled "Evidence", and there is no indication in Article 6�or elsewhere in the Anti-Dumping Agreement�that Article 6 does not apply generally to matters relating to "evidence" throughout that Agreement. Therefore, it seems to us that the subparagraphs of Article 6 set out evidentiary rules that apply throughout the course of an anti-dumping investigation, and provide also for due process rights that are enjoyed by "interested parties" throughout such an investigation.

137. Turning to that part of Article 6 referred to by India, we note that Article 6.10 deals specifically with the determination of  margins  of dumping. Clearly, it does  not stipulate  that investigating authorities must follow a specific  methodology  when determining the  volume  of dumped imports under paragraphs 1 and 2 of Article 3. However, this does not mean that  evidence emerging from the determination of margins of dumping for  individual producers or exporters pursuant to Article 6.10 is irrelevant for the determination of the volume of dumped imports in paragraphs 1 and 2 of Article 3. To the contrary, such evidence may well form part of the "positive evidence" on which an "objective examination" of the volume of dumped imports for purposes of determining injury may be based. Indeed, in cases where the examination has been limited to a select number of producers under the authority of the second sentence of Article 6.10, it is difficult to conceive of a determination based on "positive evidence" and an "objective examination" that is made other than through some form of  extrapolation  of the evidence. This could be done, for example, by extrapolating from the import volumes attributed to  examined  producers found to be dumping to the import volumes attributed to  non-examined producers. We recall that we considered that evidence on dumping  margins of more than de minimis  for  examined  producers is relevant as "positive evidence" in this investigation for determining which import volumes may be attributed to non-examined producers that are  dumping.

138. India's suggestion that the investigating authorities should consider the  same  proportion of import volumes attributable to  non-examined  producers as  dumped,  as the proportion of import volumes attributed to  examined  producers that were found to be dumping, may be one way of adducing "positive evidence" from the record of an investigation and of conducting an "objective examination", especially if producers selected for individual examination constitute a statistically valid sample representative of all producers. Even if the producers selected for individual examination account, instead, for the  largest percentage of exports  that could reasonably be investigated, we do not exclude the possibility that the evidence from those  examined  producers could, nonetheless, qualify as part of the "positive evidence" that might serve as a basis for an "objective examination" of import volumes that can be attributed to the remaining  non-examined producers. There may, indeed, be other ways of making these calculations that satisfy the requirements of paragraphs 1 and 2 of Article 3.

139. Although Article 6.10 is relevant from an evidentiary point of view, it is, nevertheless, as we explain below, not necessary here for us to decide whether the Indian producers and exporters selected for individual examination in this investigation constitute a "statistically valid sample" or "the largest percentage of the volume of exports" within the meaning of the second sentence of Article 6.10. In this respect, we recall the European Communities' argument that import volumes subject to the "all others" duty rate under Article 9.4 may be considered as dumped imports when determining injury under Article 3. As we have explained, Article 9.4 permits the imposition of the "all others" duty rate on imports from non-examined producers, regardless of whether those producers were excluded from individual examination on the basis of the first, or the second, alternative in Article 6.10. We have already concluded that imports attributable to  non-examined producers that are subject to the "all others" duty rate under Article 9.4 cannot simply be presumed to be dumped for purposes of determining injury under Article 3. Our conclusion was  not  premised on whether producers were excluded from individual examination on the basis of the first, or the second, alternative in Article 6.10. Therefore, our ruling that the European Communities failed to determine the volume of dumped imports with respect to non-examined producers on the basis of "positive evidence" and an "objective examination", as required by paragraphs 1 and 2 of Article 3, is not premised on which of the alternatives in Article 6.10 for limiting the examination was chosen by the European Communities in this investigation. For this reason, we decline to reverse, as requested by India, the finding of the Panel, in paragraph 6.135 of the Panel Report, that the European Communities chose here the second alternative under the second sentence of Article 6.10, because it is not necessary to make such a finding to resolve the issue in dispute here. Accordingly, it is not necessary for us to decide whether that finding was exclusively a factual one and is, therefore, beyond the scope of appellate review.

140. Finally, we turn to the arguments of the third participants in this dispute. Japan and Korea agree with India that the European Communities' determination of the volume of dumped imports in this investigation is not consistent with paragraphs 1 and 2 of Article 3. Our earlier discussion, in particular of Article 9, addresses in detail the arguments of Japan and Korea.¹⁷²  In contrast to Japan and Korea, the United States maintains, for its part, that the European Communities' determination of the volume of "dumped imports" is consistent with paragraphs 1 and 2 of Article 3. According to the United States, in addition to Article 9, Articles 2.1 and 3.3 are also significant for interpreting the volume of "dumped imports" in paragraphs 1 and 2 of Article 3.

141. The United States asserts that "Article 2.1 � defines  dumped  products '[f]or the purpose of [the AD] Agreement', on a countrywide basis."¹⁷³  In the view of the United States, "that phrase from the beginning to the end refers only to countries and products. It does not refer to producers."¹⁷⁴  Therefore, according to the United States, "the references to 'dumped imports' in Articles 3.1 and 3.2 and throughout Article 3 refer to all imports of the product from the countries subject to the investigation."¹⁷⁵  In other words, when determining injury, "the concept of whether or not there are dumped imports is country-specific."¹⁷⁶ 

142. We do not agree. Article 2.1 reads:

Determination of Dumping

For the purpose of this Agreement, a product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.

Nowhere in the text of Article 2.1 is there authority for treating all imports from  non-examined producers as dumped for purposes of determining injury under Article 3. The subsequent paragraphs of Article 2 set out in detail how the export price, normal value and, thus, the margins of dumping, are to be established for specific producers or exporters. Nowhere in those paragraphs is there authority for treating imports from  non-examined producers as dumped for purposes of determining injury under Article 3.

143. As we have explained, under Article 6.10, dumping margins are to be established for each producer and exporter or, if impracticable, for some of them. We have explained that Article 9 permits the imposition and collection of anti-dumping duties on imports from specific producers or exporters, or groups thereof. We also recall that the original panel confirmed that "dumping is a determination made with reference to a product from a particular producer [or] exporter, and not with reference to individual transactions".¹⁷⁷  We see no conflict between the provisions requiring producer-specific determinations and the need to calculate, for purposes of determining injury, the total volume of dumped imports from producers or exporters originating in a particular exporting country as a whole. This can be done, and has to be done, by adding up the volume of imports attributable to producers or exporters that are dumping, whether on the basis of an individual examination or on the basis of an extrapolation. Further, we see nothing in the text of Article 2.1 that permits a derogation from the express requirements in paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports on the basis of "positive evidence" and an "objective examination".

144. The United States also argues that the interpretation that  all  imports attributable to  non-examined producers may be considered as "dumped" is necessary to give meaning and effect to Article 3.3.¹⁷⁸  This provision concerns situations where an importing country conducts an anti-dumping investigation with respect to imports of a product from more than one exporting country.¹⁷⁹  Article 3.3 defines the circumstances where the investigating authorities may  cumulatively  assess the volume and price effects of imports from  different  exporting countries. The United States argues that it would create an anomaly if, in multi-country investigations, authorities are entitled to assess the effects of  all  imports from the subject country, "as long as each countrywide margin was more than de minimis", while, under India's theory, in single-country investigations, authorities, finding no dumping for an individual company, "would be required to disregard some of the imports covered by the countrywide margin".¹⁸⁰ 

145. India's appeal does not extend to the requirements of Article 3.3. We do not see, however, how the cumulative assessment of the effects of imports from different exporting countries under Article 3.3 implies that all imports attributable to  non-examined producers must be considered as dumped for purposes of determining injury. The investigation and the  cumulation  of dumped imports from different countries for purposes of determining injury can be carried out in conformity with the producer-specific provisions of the  Anti-Dumping Agreement,  even when several countries are involved.¹⁸¹  The provisions regarding the cumulative assessment of imports pursuant to Article 3.3 must be interpreted consistently with the provisions of the  Anti-Dumping Agreement  that deal with the determinations of dumping margins or the application of anti-dumping duties with respect to specific producers or groups thereof. Similarly, the right under Article 3.3 to conduct anti-dumping investigations with respect to imports from different exporting countries does not absolve investigating authorities from the requirements of paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports on the basis of "positive evidence" and an "objective examination".

146. For these reasons, we are of the view that the Panel has not properly interpreted paragraphs 1 and 2 of Article 3 in applying those provisions in this implementation dispute. Therefore, we conclude that, with respect to import volumes attributable to producers or exporters that were  not examined individually  in this investigation, the European Communities has failed to determine the "volume of dumped imports" on the basis of "positive evidence" and an "objective examination" as explicitly required by the text of paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement. However, we agree with the Panel "that the [Anti-Dumping] Agreement does not require an investigating authority to determine the volume of imports from producers outside the sample that is properly considered 'dumped imports' for purposes of injury analysis on the basis of the proportion of imports from sampled producers that is found to be dumped"¹⁸²  according to the  specific methodology  suggested by India in this appeal. For these reasons, we  reverse  the Panel's finding, in paragraph 6.144 of the Panel Report, and find that the European Communities has acted inconsistently with the requirements of paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement.

VI. Article 17.6 of the  Anti-Dumping Agreement  and Article 11 of the DSU

A. Introduction

147. India claims on appeal that the Panel failed to comply with the requirements of Article 17.6 of the  Anti-Dumping Agreement  and of Article 11 of the DSU in concluding that the European Communities  did have  information before it on all relevant economic factors listed in Article 3.4 of the  Anti-Dumping Agreement  when making its determination of injury.¹⁸³  India alleges, in particular, that the European Communities did  not have such information, because the European Communities failed to collect data on stocks and capacity utilization. India requests us to conclude that the Panel did not comply with the requirements of Article 17.6 of the  Anti-Dumping Agreement and of Article 11 of the DSU, and, consequently, to  reverse  the Panel's finding that the European Communities acted consistently with paragraphs 1 and 4 of Article 3 of the  Anti-Dumping Agreement.¹⁸⁴ 

148. Before examining India's arguments on appeal, we will recall briefly the findings of the original panel and of the Article 21.5 Panel on this issue, as far as they are relevant to the issue raised on appeal.

149. India claimed before the original panel that the European Communities did not examine all relevant economic factors having a bearing on the state of the industry and, therefore, failed to act consistently with its obligations under Article 3.4 of the  Anti-Dumping Agreement.¹⁸⁵  The original panel stated that it appeared from the European Communities' regulation imposing provisional anti-dumping measures that data had not been collected for all relevant economic factors listed in Article 3.4, and that, "[w]hile some of the data collected � may have included data for the factors not mentioned, we cannot be expected to assume that this was the case without some indication to that effect in the determination."¹⁸⁶  The original panel then found that:

� where factors set forth in Article 3.4 are not even referred to in the determination being reviewed, if there is nothing in the determination to indicate that the authorities considered them not to be relevant, the requirements of Article 3.4 were not satisfied.¹⁸⁷ 

150. The European Communities did not appeal this finding of the original panel. In the redetermination�EC Regulation 1644/2001�the European Communities addressed the relevant economic factors listed in Article 3.4, including stocks and capacity utilization, on the basis of information that it had collected during the original investigation. It is undisputed between the participants that the European Communities did not collect additional data for purposes of the redetermination.¹⁸⁸ 

151. Before the Article 21.5 Panel, India alleged that the European Communities had "never" collected data on stocks and capacity utilization, and also that the European Communities had not properly carried out an overall re-evaluation of those factors.¹⁸⁹  The Panel rejected both arguments. India has not appealed the Panel's finding with respect to the adequacy of the  evaluation.

152. In rejecting India's claim that the European Communities had not collected information on all relevant economic factors listed in Article 3.4, the Panel found that:

It is thus apparent to us, on the face of the redetermination, that the EC did, in fact, have information on the Article 3.4 factors, which is specifically addressed. Thus, we find this no basis as a matter of fact for this aspect of India's claim.¹⁹⁰ 

153. In reaching this conclusion, the Panel first stated that India had misunderstood the "import" and "context" of the statement of the original panel that, in India's view, suggested that data had not been collected.¹⁹¹  The Panel then went on to clarify the meaning of that statement as follows:

Contrary to India's understanding, the original Panel did not find, as a matter of fact or law, that no information had been collected on certain of the Article 3.4 factors. Rather, as alluded to by the EC, the Panel was making an observation as to the lack of any basis, on the face of the provisional and definitive Regulations, for a conclusion that certain of the factors had actually been considered by the EC authorities in making their determination. Indeed, the Panel specifically went on to note that, in the absence of any reference to the relevant information in the Regulations, it was not willing to assume that such data had been considered.¹⁹²  (original boldface; footnote omitted)

154. The Panel concluded that it was clear that the European Communities had "in its record" information on stocks and capacity utilization�the two factors India had focused on�and that "unlike the original determination, the EC's consideration of these factors is clearly set out on the face of the redetermination."¹⁹³ 

155. India appeals from this finding of the Panel, arguing, first, that the Panel failed to meet its obligations under Article 11 of the DSU by incorrectly applying the rules on burden of proof that we set out in  US � Wool Shirts and Blouses.¹⁹⁴  India argues that it had presented a  prima facie  case that data on a number of injury factors had never been collected and that, therefore, the Panel should have shifted the burden of proof to the European Communities to rebut that  prima facie  case.¹⁹⁵ 

156. In the alternative, India submits that the Panel distorted the evidence by accepting for a fact the "mere" assertion by the European Communities, in EC Regulation 1644/2001, that it had collected data on all relevant economic factors, including stocks and capacity utilization.¹⁹⁶  India argues that this constitutes a failure by the Panel to make an objective assessment of the matter, including an objective assessment of the facts of the case, as required by Article 11 of the DSU.¹⁹⁷ 

157. Regarding Article 17.6 of the  Anti-Dumping Agreement,  India argues that the Panel failed to "actively" review the facts, pursuant to subparagraph (i) of that provision, as we interpreted it in US � Hot-Rolled Steel.¹⁹⁸  India asserts that, by refusing India's request for the Panel to use its investigative powers under Article 13 of the DSU, and by concluding that the European Communities had the data in the record of the investigation without offering any real proof or reasoning to support such a conclusion, the Panel failed to comply with Article 17.6(i) of the  Anti-Dumping Agreement.¹⁹⁹ 

158. In reply, the European Communities contends that the Panel properly discharged its duties under Article 11 of the DSU and Article 17.6 of the  Anti-Dumping Agreement  in concluding that the European Communities  did have  information before it on all the relevant economic factors listed in Article 3.4 of the Anti-Dumping Agreement,  including stocks and capacity utilization, when making its injury determination. The European Communities asserts that the Panel correctly applied the rules on the burden of proof.²⁰⁰  The European Communities denies that EC Regulation 1644/2001 contains "mere" assertions and notes that, although India alleges that the Panel distorted the evidence, India concedes that the Panel has not committed an egregious error calling into question its good faith.²⁰¹  The European Communities also contends that the Panel could not have failed to comply with Article 17.6 of the  Anti-Dumping Agreement  by exercising its discretion pursuant to Article 13.2 of the DSU.²⁰² 

B. Analysis

159. India does not challenge directly the Panel's finding on Article 3.4 of the  Anti-Dumping Agreement. Rather, India argues on appeal that the Panel did not discharge its duties under Article 11 of the DSU and Article 17.6 of the  Anti-Dumping Agreement  in its examination of India's claim that the European Communities did not have information before it on stocks and capacity utilization when making its injury determination. India requests that, in the event that we agree with India regarding Article 17.6 and Article 11, we  reverse  the Panel's finding that the European Communities acted consistently with paragraphs 1 and 4 of Article 3 of the  Anti-Dumping Agreement.

160. Article 11 of the DSU defines generally a panel's mandate in reviewing the consistency with the covered agreements of measures taken by Members. The provision reads, in relevant part:

The function of panels is to assist the DSB in discharging its responsibilities under this Understanding and the covered agreements. Accordingly, a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case  and the applicability of and conformity with the relevant covered agreements, and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements. (emphasis added)

161. We recently explained that Article 11 of the DSU:

� requires panels to take account of the evidence put before them and forbids them to wilfully disregard or distort such evidence. Nor may panels make affirmative findings that lack a basis in the evidence contained in the panel record. Provided that panels' actions remain within these parameters, however, we have said that "it is generally within the discretion of the Panel to decide which evidence it chooses to utilize in making findings" , and, on appeal, we "will not interfere lightly with a panel's exercise of its discretion".²⁰³  (footnotes omitted)

162. Article 17.6 of the  Anti-Dumping Agreement,  for its part, "clarif[ies] the powers of review of a panel established under the  Anti-Dumping Agreement ."²⁰⁴  Subparagraph (i) of Article 17.6 "place[s] limiting obligations on a panel, with respect to the review of the establishment and evaluation of facts by the investigating authority."²⁰⁵  The provision reads, in relevant part:

in its assessment of the facts of the matter, the panel shall determine whether the authorities' establishment of the facts was proper and whether their evaluation of those facts was unbiased and objective. If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned.

163. In  US � Hot-Rolled Steel,  we stated that "[a]lthough the text of Article 17.6(i) is couched in terms of an obligation on  panels � the provision, at the same time, in effect defines when investigating authorities  can be considered to have acted inconsistently with the  Anti-Dumping Agreement".²⁰⁶  We further explained that the text of Article 17.6(i) of the  Anti-Dumping Agreement, as well as that of Article 11 of the DSU, "requires panels to 'assess' the facts and this � clearly necessitates an active review or examination of the pertinent facts."²⁰⁷ 

164. Turning specifically to India's claim that the Panel did not discharge its duties under Article 11 of the DSU and under Article 17.6(i) of the  Anti-Dumping Agreement,  we are mindful that we have found previously that there is no "conflict" between Article 11 of the DSU and Article 17.6 of the  Anti-Dumping Agreement;  rather, the two provisions complement each other.²⁰⁸  We begin our analysis here with India's argument relating to Article 17.6(i), because this provision, which sets out the standard of review that panels must follow in reviewing the establishment of the facts by investigating authorities in anti-dumping investigations, is particularly relevant to the appeal before us.²⁰⁹ 

165. India asserts that the Panel failed to review the facts actively, as we required in  US � Hot-Rolled Steel,  because "[i]t neither used its powers under Article 13 [of the] DSU nor reviewed these facts otherwise."²¹⁰  Although India recognizes that a panel's power to seek information under Article 13 of the DSU is discretionary,  India argues that the Panel was required to seek information from the European Communities as part of the Panel's obligation to "actively review or examine  the facts" pursuant to Article 17.6 of the  Anti-Dumping Agreement.²¹¹  Consequently, we understand India's claim to relate to the first part of the first sentence of Article 17.6(i), namely to the Panel's task of determining "whether the authorities' establishment of the facts was proper".²¹² 

166. We have previously stated that a panel's right to seek information pursuant to Article 13 of the DSU is discretionary  and not mandatory, as India itself recognizes.²¹³  Furthermore, in EC � Sardines,  where a claim was brought under Article 11 of the DSU, we concluded that:

[a] contravention of the duty under Article 11 of the DSU to make an objective assessment of the facts of the case cannot result from the due  exercise of the discretion permitted by another provision of the DSU, in this instance Article 13.2 of the DSU.²¹⁴  (emphasis added)

167. Similarly, a panel's duty to "actively review the pertinent facts" in order to comply with Article 17.6(i) of the Anti-Dumping Agreement  does not, in our view, imply that a panel  must exercise its right to seek information under Article 13 of the DSU, which explicitly states that the exercise of that right is  discretionary. Indeed, there is nothing in the texts of Article 17.6(i) of the Anti-Dumping Agreement  or Article 13 of the DSU to suggest that a reading of these provisions, in combination, would render  mandatory  the exercise of a panel's discretionary  power under Article 13 of the DSU. At the oral hearing, India sought to draw a distinction between the case before us and our ruling in  EC � Sardines  by arguing that, in the present case, the Panel's exercise of its discretion was not "due" because "there was no exercise at all".²¹⁵  We do not agree. In our view, it is for panels to decide whether it is necessary to request information from any relevant source pursuant to Article 13 of the DSU. The mere fact that the Panel did not consider it necessary to seek information does not, by itself, imply that the Panel's exercise of its discretion was not "due". We, therefore, reject India's allegation that the Panel failed to comply with the requirements of Article 17.6 of the  Anti-Dumping Agreement  by not seeking information from the European Communities pursuant to Article 13 of the DSU.

168. In addition to its argument relating to the Panel's right to seek information under Article 13 of the DSU, India argues that the Panel failed to "review[] these facts otherwise".²¹⁶  In support of this argument, India asserts that the "Panel merely stated that it was 'clear' to it that the EC had the data in its record", without offering any proof or reasoning other than what was stated in EC Regulation 1644/2001 itself.²¹⁷ 

169. We have said previously that panels must not, under Article 17.6(i) of the  Anti-Dumping Agreement, "engage in a new and independent fact-finding exercise".²¹⁸  Furthermore, in our view, the discretion that panels enjoy as triers of facts under Article 11 of the DSU²¹⁹  is equally relevant to cases governed also by Article 17.6(i) of the  Anti-Dumping Agreement. Thus, as under Article 11 of the DSU, we "will not interfere lightly with [a] panel's exercise of its discretion" under Article 17.6(i) of the  Anti-Dumping Agreement.²²⁰ 

170. An appellant must persuade us, with sufficiently compelling reasons, that we should disturb a panel's assessment of the facts or interfere with a panel's discretion as the trier of facts. As India points out, the Panel stated that it was apparent to the Panel from "the face of the redetermination" that the investigating authority did  have information on the relevant economic factors listed in Article 3.4.²²¹  The Panel, however, also noted that "it is clear that the EC had, in its  record, information on stocks and utilisation of capacity".²²²  In the light of this statement, we conclude that, contrary to India's contention, the Panel did not arrive at an affirmative conclusion that information on these two factors was before the investigating authorities based exclusively "on the face" of the redetermination.

171. We observe, in this regard, that the Panel also had before it explanations as to how the European Communities had collected information on stocks and capacity utilization. According to the European Communities, it had collected information on both factors through the questionnaire sent to the domestic industry and during the on-site verification visits.²²³  Moreover, the European Communities explained that it obtained additional information on stocks from audited accounts that were either annexed to the questionnaire replies, or verified during the on-site visits.²²⁴  The European Communities added that data on stocks could also be derived by comparing verified data on production and sales volume.²²⁵  As for capacity utilization, the European Communities stated that it had received information on production capacity from Eurocoton�the complainant in the anti-dumping investigation.²²⁶  In the light of these observations, we are not persuaded that we should interfere with the Panel's finding of fact on this matter. Therefore, we reject India's argument that the Panel "otherwise" failed to review the facts actively under Article 17.6(i) of the  Anti-Dumping Agreement.

172. We turn next to the arguments submitted by India in support of its claim that the Panel failed to meet its obligation under Article 11 of the DSU to examine the facts of the case objectively. India's first argument is that the Panel misapplied the rules on the allocation of the burden of proof that we set out in  US � Wool Shirts and Blouses.²²⁷ 

173. The Panel discussed the principles regarding burden of proof at the outset of the Panel Report. The Panel stated:

We recall that the general principles applicable to burden of proof in WTO dispute settlement require that a party claiming a violation of a provision of the WTO Agreement by another Member must assert and prove its claim. In these Panel proceedings, we thus observe that it is for India, which has challenged the consistency of the EC measure, to bear the burden of demonstrating that the measure is not consistent with the relevant provisions of the AD Agreement. We also note, however, that it is generally for each party asserting a fact, whether complainant or respondent, to provide proof thereof. In this respect, therefore, it is also for the EC to provide evidence for the facts which it asserts. We also recall that a  prima facie  case is one which, in the absence of effective refutation by the other party, requires a panel, as a matter of law, to rule in favour of the party presenting the  prima facie  case. In addition, we consider that both parties generally have a duty to cooperate in the proceedings in order to assist us in fulfilling our mandate, through the provision of relevant information.²²⁸  (footnotes omitted)

174. India is not alleging that, on this particular issue, the Panel should have allocated the burden of proof differently. Instead, India asserts that the Panel should have  shifted  the burden to the European Communities once India had established a  prima facie  case.²²⁹  There is nothing in the Panel's reasoning, however, to suggest that the Panel premised its ultimate conclusion on whether or not India had presented a  prima facie  case. From our perspective, the Panel assessed and weighed all the evidence before it�which was put forward by both India and the European Communities�and, having done so, ultimately, was persuaded that the European Communities did, in fact, have information before it on all relevant economic factors listed in Article 3.4 of the  Anti-Dumping Agreement.

175. We agree, therefore, with the European Communities' assertion that India's argument is, for all practical purposes, one related to the Panel's weighing and appreciation of the evidence.²³⁰  As the European Communities pointed out, we have previously stated that the "[d]etermination of the credibility and weight properly to be ascribed to (that is, the appreciation of) a given piece of evidence is part and parcel of the fact finding process and is, in principle, left to the discretion of a panel as the trier of facts."²³¹ 

176. We have, furthermore, explained that:

In assessing the panel's appreciation of the evidence, we cannot base a finding of inconsistency under Article 11 simply on the conclusion that we might have reached a different factual finding from the one the panel reached. Rather, we must be satisfied that the panel has exceeded the bounds of its discretion, as the trier of facts, in its appreciation of the evidence. As is clear from previous appeals, we will not interfere lightly with the panel's exercise of its discretion.²³²  (footnote omitted)

177. India has not persuaded us that the Panel in this case exceeded its discretion as the trier of facts. In our view, the Panel assessed and weighed the evidence submitted by both parties, and ultimately concluded that the European Communities had information on all relevant economic factors listed in Article 3.4. It is not "an error, let alone an egregious error"²³³, for the Panel to have declined to accord to the evidence the weight that India sought to have accorded to it. We, therefore, reject India's argument that, by failing to  shift  the burden of proof, the Panel did not properly discharge its duty to assess objectively the facts of the case as required by Article 11 of the DSU.

178. We reach now India's alternative argument on this issue, which is that, even if the Panel properly applied the rules on the burden of proof, the Panel failed to meet its obligations under Article 11 of the DSU because it "distorted the evidence [b]y accepting for a fact a mere assertion contained in the EC Regulation 1644/2001�while India had submitted  prima facie  evidence on the absence  of data collection".²³⁴  India contends that, in doing so, "the Panel attached greater weight to the mere assertion" of the European Communities, while failing to explain why the Panel considered the assertion "sufficient to rebut the  prima facie  evidence of India that the EC had not collected such data."²³⁵ 

179. In  EC � Hormones,  we described how a panel could fail to make an objective assessment of the facts by "distorting" the evidence:

The deliberate disregard of, or refusal to consider, the evidence submitted to a panel is incompatible with a panel's duty to make an objective assessment of the facts. The wilful distortion or misrepresentation of the evidence put before a panel is similarly inconsistent with an objective assessment of the facts. "Disregard" and "distortion" and "misrepresentation" of the evidence, in their ordinary signification in judicial and quasi-judicial processes, imply not simply an error of judgment in the appreciation of evidence but rather an egregious error that calls into question the good faith of a panel. A claim that a panel disregarded or distorted the evidence submitted to it is, in effect, a claim that the panel, to a greater or lesser degree, denied the party submitting the evidence fundamental fairness, or what in many jurisdictions is known as due process of law or natural justice.²³⁶  (emphasis added; footnote omitted)

180. India expressly states that "it does not assert that the Panel committed an egregious error calling into question its good faith."²³⁷  At the oral hearing, India argued that, in disputes where we have found a violation of Article 11 of the DSU, "it has not always been the situation that the panel had made an egregious error calling into question its good faith".²³⁸  Indeed, we have found a violation of Article 11 of the DSU when panels have failed to ensure that a competent authority evaluated all relevant economic factors and that the authority's explanation of its determination is reasoned and adequate.²³⁹  In those instances, the error related to the evaluation conducted by the  competent authorities. We also found that a panel exceeded its mandate under Article 11 by considering evidence that was not in existence at the time of a Member's determination imposing a safeguard measure on imports of textiles.²⁴⁰  In another case, we determined that the panel had not made an objective assessment of the  matter before it  because it examined a  claim  that had not been raised by the complainant.²⁴¹

181. In our view, none of these examples assists India with the claim it raises on appeal. India does not appeal the Panel's conclusion with respect to the  evaluation  by the investigating authorities of the European Communities of the relevant economic factors listed in Article 3.4.²⁴²  India directs its arguments on appeal to the Panel's assessment of the  facts of the case,  and does not argue that the Panel failed otherwise to make an objective assessment of the  matter  before it. Specifically, India argues that the Panel did not make an objective assessment of the facts of the case because the Panel distorted  the evidence by placing greater weight on the statements made by the European Communities than on those made by India.²⁴³  As we stated earlier, the weighing of the evidence is within the discretion of the Panel as the trier of facts, and there is no indication in this case that the Panel exceeded the bounds of this discretion.²⁴⁴  We thus reject India's argument that the Panel distorted the evidence before it.

182. For all these reasons, we  find  that the Panel properly discharged its duties under Article 17.6 of the Anti-Dumping Agreement  and Article 11 of the DSU. We, therefore,  uphold  the Panel's finding, in paragraph 6.169 of the Panel Report, that the European Communities had information before it on the relevant economic factors listed in Article 3.4 of the  Anti-Dumping Agreement when making its injury determination.

VII. Findings and Conclusions

183. For the reasons set out in this Report, the Appellate Body:

(a) (i) upholds  the Panel's finding, in paragraph 6.53 of the Panel Report, that India's claim under Article 3.5 of the  Anti-Dumping Agreement�that the European Communities failed to ensure that injuries caused by other factors was not attributed to the dumped imports�was not properly before the Panel;   and, consequently,

(ii) declines  to rule on the issue of whether the Panel erred, in its alternative finding, in paragraph 6.246 of the Panel Report, that the European Communities acted consistently with Article 3.5 of the  Anti-Dumping Agreement;

(b) (i) reverses  the Panel's finding, in paragraph 6.144 of the Panel Report, that the European Communities did not act inconsistently with paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement,  and  finds  that the European Communities acted inconsistently with paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement in determining the volume of dumped imports for purposes of making a determination of injury; and

(ii) declines  to rule on the Panel's finding, in paragraph 6.135 of the Panel Report, that the European Communities applied the second alternative in the second sentence of Article 6.10 for limiting its examination in this investigation; and

(c) finds  that the Panel properly discharged its duties under Article 17.6 of the Anti‑Dumping Agreement  and Article 11 of the DSU and, therefore,  upholds  the Panel's finding, in paragraph 6.169 of the Panel Report, that the European Communities had information before it on the relevant economic factors listed in Article 3.4 of the  Anti-Dumping Agreement  when making its injury determination.

184. The Appellate Body recommends that the DSB request the European Communities to bring its measure, found in this Report to be inconsistent with its obligations under the  Anti-Dumping Agreement,  into conformity with that Agreement.

Signed in the original at Geneva this 24th day of March 2003 by:

_________________________
Georges Abi-Saab
Presiding Member

_________________________	_________________________
James Bacchus Member	Yasuhei Taniguchi  Member

244 See supra, para. 177.