4. Imposition of a New Unpublished Requirement in Contravention to Article X Paragraphs 1 and 2 of GATT 1994

a) Claim Raised by Korea

1.515 Korea claims that in selecting the time-period used in analysing the "no likelihood/not likely" criterion the United States imposed a new unpublished requirement in contravention to Article X:2 and Article X:2 of GATT 1994.

1.516 By applying a requirement regarding the period following the Third Annual Review Period, the DOC revived the "gap period" review. Under the DOC's regulations in the 1980s, a Respondent seeking revocation of an order had to establish, at a minimum, a history of no sales at less than fair value (LTFV sales) for at least two years.³⁹⁴

1.517 Although the regulation required a two-year period without dumping for revocation, the DOC adopted a rule of practice requiring a Respondent seeking revocation to submit to an examination of, at a minimum, about two years and nine months of its sales. This rule allowed the DOC to examine the period between the end of the two-year period and the date of the tentative revocation (the so-called gap period). Under the procedure at that time, the Respondent had to show that it was not dumping during the gap period (and that there was no likelihood of future dumping) by presenting its sales and cost data to the DOC for the gap period.

1.518 However, in 1986 the DOC issued proposed amendments to the anti-dumping regulations that substantially revised revocation procedures. The changes were incorporated in the final regulations published in the Code of Federal Regulations in 1990.³⁹⁵ The new regulations expanded the required period of no dumping from two years to three years and, at the same time, eliminated the requirement for a gap period review.

1.519 In the Third Annual Review of DRAMs from Korea, the DOC effectively resurrected the gap period review, applying it to Respondents even though it had been repealed from US law. Apart from being absurdly unfair, this violated Paragraphs 1 and 2 of Article X of the General Agreement because the United States applied a more burdensome requirement that was not published.

1.520 Korea in response to a question by the Panel,³⁹⁶ further clarified its claim under Article X:2 as follows:

1.521 Korea established that by reviewing the time period following the period of review, the Department was applying the so-called "gap-period review" methodology. This methodology legally had ended with the revision of the Department's regulations in 1986. Therefore, its application to DRAMs from Korea in 1997 constituted the imposition of a new, unpublished requirement in contravention of Article X:2 of the General Agreement.

b) Rebuttal Response by the United States

1.522 The United States responds to Korea's submission in its rebuttal briefs putting forward the following arguments:

1.523 Korea apparently makes a legal claim under paragraph 2 of Article X. The United States will not address the merits of this claim as Korea apparently did not care to discuss the obligations of Article X:2, nor did Korea provide support for including paragraph 2 in its Article X claim. Indeed, in discussing the policy of transparency which underlies all of Article X, Korea quotes the relevant paragraphs of Article X, omitting paragraph 2. The Panel should, therefore, reject this "claim."

G. Claims under Articles I and X:3 of GATT 1994

1. The United States Revoked Anti-Dumping Duties in Like Cases

a) Claim Raised by Korea

1.524 Korea claims that the refusal to revoke the anti-dumping duty order in the case of DRAMs from Korea constitutes a violation of Articles I and X:3(a) of GATT 94 because in like cases in the past the United States has revoked the order. The following are Korea's arguments in support of this claim:

1.525 In numerous revocation cases, the DOC has revoked an anti-dumping duty order on the basis of only two criteria - three years of no dumping margins and agreement by the Respondent companies to immediate reinstatement in the anti-dumping duty order if they breached their commitment not to dump in the future. The DOC generally does not conduct a "no likelihood/not likely" analysis of the type conducted in the Final Determination in the Third Annual Review of DRAMs from Korea. Since 1989, the DOC has revoked on the basis of three years of no dumping and a Respondent's certification in the following cases:

1.526 In the instant case (as in a small number of other cases), the DOC required satisfaction of a third requirement, which it variously termed the "no likelihood" or the "not likely" criterion.

1.527 Assuming for the sake of argument that the "no likelihood/not likely" criterion is permissible under the WTO rules, the United States would have two choices. It could conduct an analysis of this third criterion for revocation in all cases, or in none. What it cannot do, consistent with its obligations under Article I of the General Agreement, is what it actually has done in practice, which is to base its decision whether to revoke on an analysis of this criterion in some but not all cases.

1.528 Article I:1 of the General Agreement provides:

1.529 Criteria for determining whether to revoke an anti-dumping duty order are within the scope of Article I. First, the report of the Panel in United States - Denial of Most-Favoured-Nation Treatment as to Non-Rubber Footwear from Brazil found that:

1.530 What is true for revoking countervailing duty orders is equally true for revoking anti-dumping duty orders. This is confirmed by a 1968 ruling of the Director-General regarding the application of the obligations of Article I to the provisions of the then-existing Anti-Dumping Code.³⁹⁹ In that ruling the Director General also declared that the provisions of the Code constituted a "method of levying such duties and charges," so there is a second basis for finding that criteria for determining whether to revoke an anti-dumping duty order are within the scope of Article I.

1.531 The application of less stringent criteria and procedures in determining whether to revoke an anti-dumping duty order in some cases constitutes an "advantage, favour, privilege or immunity" granted by the United States. The Brazilian Footwear case is on point in this regard as well. There, the United States automatically revoked a countervailing duty order retroactively in certain cases, while in others it required countries to request an injury review and did not make the revocation retroactive to the same degree. This discriminatory treatment was found to violate Article I even though the United States was acting under two different laws.⁴⁰⁰ Here, on the other hand, the US practice provides differential treatment under the very same law and regulations.

1.532 As regards the "like product" criterion of Article I, once again the Brazilian Footwear case is instructive. The report in that proceeding states:

1.533 For the same reason, it is irrelevant that none of the proceedings which were revoked without analysis of the "no likelihood/not likely" criterion involved DRAMs. The products as to which no analysis was undertaken are in principle the same products as to which the analysis was conducted, thereby satisfying the "like product" criterion.⁴⁰²

1.534 The finding of a violation of Article I would not be affected if the United States were to seek to argue that its regulation lists three criteria for revocation, including the "no likelihood/not likely" criterion, and that it was following its regulation. GATT precedent clearly condemns de facto as well as de jure discrimination (i.e., discrimination in practice even where the law or regulation on its face is not discriminatory). In the EC Bananas case, the Appellate Body, citing the panel decision in Beef from Canada, declared that Article I applied to actions of a government that had the effect of discriminating against certain imported products.⁴⁰³

1.535 The refusal of the United States to revoke the order also violates Article X of the General Agreement. Because in like cases in the past the United States has revoked duties, the United States violated Paragraph 3(a) of Article X by failing to administer its revocation regime in a "uniform, impartial and reasonable" manner.

1.536 Accordingly, by requiring satisfaction of the "no likelihood/not likely" criterion in some cases, while waiving analysis of it in others, the United States does not accord most-favored-nation treatment in its determination of whether to revoke anti-dumping duty orders and it fails to administer its law in a uniform manner. This is in violation of the United States' obligations under Articles I and X of the General Agreement.

b) Response by the United States

1.537 The following are the United States' arguments in response to Korea's claim:

1.538 Korea argues that the United States violated its obligations under Article I of GATT 1994 by not according most-favored-nation treatment in its revocation decisions. Korea bases its Article I arguments upon its erroneous assertion that the DOC inconsistently applies the "not likely" criterion in its revocation decisions, thus according favorable treatment in cases that allegedly do not consider this criterion. Korea's arguments lack merit.

1.539 Despite the non-binding, non-authoritative sources relied upon by Korea to establish the applicability of Article I to the DOC's Final Results Third Review,⁴⁰⁴ Korea's substantive claims under Article I are without merit. Korea analogizes this case to the Brazilian Footwear case.⁴⁰⁵ However, unlike the circumstances before the panel in Brazilian Footwear, the United States applies the same statutory and regulatory provisions with regard to the issue of revocation in every case. As such, the same three criteria enunciated in section 353.25(a)(2) of the DOC's regulations, including the "not likely" criterion, are applied in each case. However, as can be expected in any fact-oriented, anti-dumping proceeding, the DOC's final decision will be based upon the evidence on the administrative record. As the DOC stated in the Final Results Third Review:

1.540 Thus, the DOC recognizes that in some cases, satisfaction of two of the DOC's criteria, in the absence of other evidence, is relevant to the consideration of whether the "not likely" criterion has been satisfied. When additional evidence relating to the "not likely" criterion is available, the DOC is "obligated to consider that evidence." Thus, the DOC's consideration of whether each criterion is satisfied will be based on the record evidence. Indeed, the various cases to which Korea cites reflect this fact-oriented approach, and, contrary to Korea's claim, indicate that the DOC considers all three criteria identified in section 353.25(a)(2) in the course of a revocation inquiry. While the DOC always applies the same criteria in every revocation decision, the DOC must conduct a case-by-case analysis of the evidence in the administrative record in order to determine if these criteria have been satisfied. Such a case-by-case approach does not constitute de facto or de jure discrimination, nor does it accord an advantage to any party.

1.541 As a result, Korea errs when it states that "[t]he DOC generally does not conduct a 'no likelihood/not likely' analysis" and that the DOC requires "satisfaction of the 'no likelihood/not likely' criterion in some cases, while waiving analysis of it in others ... ." Because section 353.25(a)(2) of the DOC's regulations governs all revocation decisions and the DOC consistently applies this provision and the same standards to all products from all countries, the United States has complied with its Article I obligations.

1.542 Throughout its arguments regarding Articles I and X:1, Korea interjects claims under Article X:3(a) of GATT 1994. In many respects repeating its arguments under Articles X:1 and I, Korea complains that the case-by-case approach taken by the Department in examining whether the "not likely" criterion has been satisfied violates Article X:3(a). The disjointed manner in which Korea raises these claims reflects the substantive deficiencies in its arguments.

1.543 Article X:3(a) requires each Member to "administer in a uniform, impartial and reasonable manner all its laws, regulations, decisions and rulings." As the United States has established throughout this submission, the DOC refused to revoke the anti-dumping order on DRAMs from Korea based on an unbiased and objective evaluation of the facts which led the DOC to conclude that the "not likely" criterion had not been satisfied. The DOC's impartial and reasonable application of its regulations and governing statute was consistent with the United States' obligations under Article X:3(a). As a result, the Panel should reject Korea's arguments.

1.544 Korea states that "[b]ecause in like cases in the past the United States has revoked duties, the United States violated Paragraph 3(a) of Article X by failing to administer its revocation regime in a 'uniform, impartial and reasonable' manner." The DOC applies the same criteria in every revocation decision. However, as it does in all cases, the DOC considers all of the facts on the record to determine whether these criteria have been satisfied. A mere assertion that the United States revoked anti-dumping orders in allegedly "like cases" is not evidence of an Article X:3(a) violation.

To continue with Rebuttal Arguments Made by Korea

³⁹⁴ See, e.g., 19 C.F.R. 353.54(b) (1988) (Ex. ROK-77).

³⁹⁵ See 19 C.F.R. 353.25 (1990) (Ex. ROK-78).

³⁹⁶ The Panel recalls that the question was: "Could Korea please explain the essence of its claim under Article X of GATT 1994. Is Korea concerned principally with the alleged failure to publish under Article X:1, or is the focus of Korea's complaint directed at the alleged failure to administer laws and regulations etc. in the 'uniform, impartial and reasonable manner' required by Article X:3(a)?"

³⁹⁷ See Ex. ROK-57 through Ex. ROK-73.

³⁹⁸ United States-Denial of Most-Favoured-Nation Treatment as to Non-Rubber Footwear from Brazil (19 June 1992), BISD 39S/128, 150, para. 6.8.

³⁹⁹ Note by the Director-General (29 November 1968), L/3149, quoted in 1 GATT, ANALYTICAL INDEX: GUIDE TO GATT LAW AND PRACTICE 30 (6th ed. 1995).

⁴⁰⁰ United States-Denial of Most-Favoured-Nation Treatment as to Non-Rubber Footwear from Brazil (19 June 1992), BISD 39S/128, 150-53, paras. 6.7-6.17.

⁴⁰¹ Id. at 151-52, para. 6.12 (emphasis added by Korea ). See also Belgian Family Allowances (7 November 1952), BISD 1S/59, 60, para. 3, in which a violation of Article I was found regarding a law that discriminated against any product from a country not having a particular system of family allowances.

⁴⁰² Korea need not rely on the Brazilian Footwear precedent alone because the United States actually discriminated against DRAMs from Korea versus DRAMs from another source. The DOC accepted a data collection proposal in the Japanese DRAM case and did not apply the "not likely/no likelihood" criterion. Thus, the administrative process employed by the DOC treated Korean DRAMs in a manner different from the way it treated DRAMS from Japan - there was discriminatory treatment as to a "like product."

⁴⁰³ European Communities-Regime for the Importation, Sale and Distribution of Bananas (9 September 1997), WT/DS27/AB/R, para. 232, citing European Economic Community-Imports of Beef from Canada (10 March 1981), BISD 28S/92, 97-98, paras. 4.1-4.3.

⁴⁰⁴ Korea relies upon a 1968 ruling of the Director General to establish the applicability of Article I to anti-dumping proceedings. However, the Appellate Body recently noted "that the 1968 Note cannot be considered as an authoritative interpretation of GATT rules because it was never endorsed by a formal decision of the CONTRACTING PARTIES." European Communities - Regime for the Importation, Sale and Distribution of Bananas, WT/DS 27/AB/R, Report of the Appellate Body adopted 9 September 1997, para. 200.

⁴⁰⁵ United States - Denial of Most-Favored-Nation Treatment as to Non-Rubber Footwear from Brazil, Report of the Panel adopted 19 June 1992, BISD 39S/128.

⁴⁰⁶ Final Results Third Review, 62 Fed. Reg. at 39810 (citations omitted) (Ex. USA-1).