UNITED STATES � ANTI-DUMPING ACT OF 1916

AB-2000-5

VI. Articles VI:1 and VI:2 of the GATT 1994, Certain Provisions of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement

134. With regard to the EC Panel Report, the United States argues that the Panel erred in finding that the 1916 Act was inconsistent with Articles VI:1 and VI:2 of the GATT 1994, Articles 1, 4 and 5.5 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement . With regard to the Japan Panel Report, the United States argues that the Panel erred in finding that the 1916 Act was inconsistent with Articles VI:1 and VI:2 of the GATT 1994, Articles 1, 4.1, 5.1, 5.2, 5.4, 18.1 and 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement.

135. With the exception of the finding of inconsistency with Article VI:2 of the GATT 1994, the United States appeals these findings of inconsistency on the sole basis that the 1916 Act does not fall within the scope of application of Article VI and the Anti-Dumping Agreement and that the Panel, therefore, erred in making these findings of inconsistency. These findings of inconsistency, thus, stand or fall along with the Panel's findings regarding the scope of application of Article VI of the GATT 1994 and the Anti-Dumping Agreement . Since we have upheld the Panel's conclusion that the 1916 Act falls within the scope of application of Article VI and the Anti-Dumping Agreement , we also uphold these findings of inconsistency of the Panel.

136. As regards the Panel's finding that the 1916 Act is inconsistent with Article VI:2 of the GATT 1994, the United States argues that Article VI:2 only regulates the imposition of anti-dumping duties, and that other measures to counteract dumping are not addressed by Article VI:2.

137. As we have concluded above, Article VI of the GATT 1994 and the Anti-Dumping Agreement apply to "specific action against dumping". Article VI, and, in particular, Article VI:2, read in conjunction with the Anti-Dumping Agreement, limit the permissible responses to dumping to definitive anti-dumping duties, provisional measures and price undertakings. Therefore, the 1916 Act is inconsistent with Article VI:2 and the Anti-Dumping Agreement to the extent that it provides for "specific action against dumping" in the form of civil and criminal proceedings and penalties.

138. With the caveat that Article VI:2 must be read together with the relevant provisions of the Anti-Dumping Agreement , we, therefore, agree with the conclusion of the Panel that:

� by providing for the imposition of fines or imprisonment or for the recovery of treble damages, the 1916 Act violates Article VI:2 of the GATT 1994.⁷²

VII. Third Party Rights

139. The European Communities and Japan contend that the Panel erred in refusing to grant "enhanced" third party rights to Japan in the case brought by the European Communities, and to the European Communities in the case brought by Japan.

140. The rules relating to the participation of third parties in panel proceedings are set out in Article 10 of the DSU, and, in particular, paragraphs 2 and 3 thereof, and in paragraph 6 of Appendix 3 to the DSU.

141. Article 10.2 of the DSU states:

Any Member having a substantial interest in a matter before a panel and having notified its interest to the DSB (referred to in this Understanding as a "third party") shall have an opportunity to be heard by the panel and to make written submissions to the panel. These submissions shall also be given to the parties to the dispute and shall be reflected in the panel report.

142. Article 10.3 of the DSU states:

Third parties shall receive the submissions of the parties to the dispute to the first meeting of the panel.

143. Paragraph 6 of Appendix 3 to the DSU provides:

All third parties which have notified their interest in the dispute to the DSB shall be invited in writing to present their views during a session of the first substantive meeting of the panel set aside for that purpose. All such third parties may be present during the entirety of this session.

144. Although the European Communities and Japan invoke Article 9 of the DSU, and, in particular, Article 9.3, in support of their position, we note that Article 9 of the DSU, which concerns procedures for multiple complaints related to the same matter, does not address the issue of the rights of third parties in such procedures.

145. Under the DSU, as it currently stands, third parties are only entitled to the participatory rights provided for in Articles 10.2 and 10.3 and paragraph 6 of Appendix 3.

146. Article 12.1 of the DSU states:

Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise after consulting the parties to the dispute.

Pursuant to Article 12.1, a panel is required to follow the Working Procedures in Appendix 3, unless it decides otherwise after consulting the parties to the dispute.

147. In support of their argument that the Panel should have granted them "enhanced" third party rights, the European Communities and Japan refer to the considerations that led the panel in European Communities - Hormones to grant third parties "enhanced" participatory rights, and stress the similarity between European Communities - Hormones and the present cases.

148. The Panel in the present cases gave the following reasons for refusing to grant the European Communities and Japan "enhanced" participatory rights in the panel proceedings:

� We conclude from the reports in the EC - Hormones cases that enhanced third party rights were granted primarily because of the specific circumstances in those cases.

We find that no similar circumstances exist in the present matter, which does not involve the consideration of complex facts or scientific evidence. Moreover, none of the parties requested that the panels harmonise their timetables or hold concurrent deliberations in the two procedures (WT/DS136 and WT/DS162). In fact, the European Communities was not in favour of delaying the proceedings in WT/DS136 and the United States objected to concurrent deliberations. � (emphasis added)⁷³

149. In our Report in European Communities - Hormones , we stated:

Although Article 12.1 and Appendix 3 of the DSU do not specifically require the Panel to grant � ["enhanced" third party rights] to the United States, we believe that this decision falls within the sound discretion and authority of the Panel, particularly if the Panel considers it necessary for ensuring to all parties due process of law.⁷⁴

150. A panel's decision whether to grant "enhanced" participatory rights to third parties is thus a matter that falls within the discretionary authority of that panel. Such discretionary authority is, of course, not unlimited and is circumscribed, for example, by the requirements of due process. In the present cases, however, the European Communities and Japan have not shown that the Panel exceeded the limits of its discretionary authority. We, therefore, consider that there is no legal basis for concluding that the Panel erred in refusing to grant "enhanced" third party rights to Japan or the European Communities.

VIII. Articles III:4 and XI of the GATT 1994 and Article XVI:4 of the WTO Agreement

151. Before the Panel, the European Communities and Japan submitted that the 1916 Act is inconsistent with Article III:4 of the GATT 1994 and Article XVI:4 of the WTO Agreement . Japan also claimed that the 1916 Act is inconsistent with Article XI of the GATT 1994. The Panel found that:

� we are entitled to exercise judicial economy and decide not to review the claims of [the European Communities and] Japan under Article III:4 of the GATT 1994.⁷⁵

�

� we are entitled to exercise judicial economy and decide not to review the claims of Japan under Article XI.⁷⁶

152. With respect to the alleged violations of Article XVI:4 of the WTO Agreement, the Panel held, in the EC Panel Report:

We therefore find that, by violating Articles VI:1 and VI:2 of the GATT 1994, the 1916 Act violates Article XVI:4 of the Agreement Establishing the WTO.⁷⁷

In the Japan Panel Report the Panel found:

� that by violating provisions of Article VI of the GATT 1994, the United States violates Article XVI:4 of the WTO Agreement.⁷⁸

153. In their joint other appellant's submission, the European Communities and Japan ask us to rule that the 1916 Act is inconsistent with United States' obligations under Articles III:4 and XI of the GATT 1994 and Article XVI:4 of the WTO Agreement . With respect to Articles III:4 and XI of the GATT 1994, their requests are conditioned on our reversal of the Panel's findings that the 1916 Act falls within the scope of Article VI of the GATT 1994 and the Anti-Dumping Agreement. With respect to Article XVI:4 of the WTO Agreement , their requests are conditioned on our reversal of the Panel's findings with respect to jurisdiction and the distinction between mandatory and discretionary legislation. Since, however, the conditions on which these requests are predicated have not been fulfilled, there is no need for us to examine the conditional appeals of the European Communities and Japan.

154. For these reasons, we decline to rule on the conditional appeals of the European Communities and Japan relating to Articles III:4 and XI of the GATT 1994 and Article XVI:4 of the WTO Agreement .

IX. Findings and Conclusions

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

(a) upholds the Panel's conclusion that it had jurisdiction to consider claims that the 1916 Act as such is inconsistent with United States' obligations under Article VI of the GATT 1994 and the Anti-Dumping Agreement ;

(b) upholds, to the extent it found it necessary to consider the issue, the Panel's interpretation and application of the distinction between mandatory and discretionary legislation;

(c) upholds the Panel's findings that Article VI of the GATT 1994 and the Anti-Dumping Agreement apply to the 1916 Act;

(d) upholds the Panel's findings in the EC Panel Report that the 1916 Act is inconsistent with Articles VI:1 and VI:2 of the GATT 1994, Articles 1, 4 and 5.5 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement ;

(e) upholds the Panel's findings in the Japan Panel Report that the 1916 Act is inconsistent with Articles VI:1 and VI:2 of the GATT 1994, Articles 1, 4.1, 5.1, 5.2, 5.4, 18.1 and 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement;

(f) upholds the Panel's refusal to grant "enhanced" third party rights to Japan in the case brought by the European Communities, and to the European Communities in the case brought by Japan; and

(g) declines to rule on the conditional appeals of the European Communities and Japan relating to Articles III:4 and XI of the GATT 1994 and Article XVI:4 of the WTO Agreement .

156. The Appellate Body recommends that the DSB request the United States to bring the 1916 Act into conformity with its obligations under Article VI of the GATT 1994 and the Anti-Dumping Agreement .

Signed in the original at Geneva this 11th day of August 2000 by:
 

_________________________
Julio Lacarte-Mur�
Presiding Member

Claus-Dieter Ehlermann      Member

Claus-Dieter Ehlermann     Member

72 EC Panel Report, para. 6.204; Japan Panel Report, para. 6.230.

73 EC Panel Report, paras. 6.33 - 6.34. See also Japan Panel Report, paras. 6.33 - 6.34.

74 Appellate Body Report, supra, footnote 24, para. 154.

75 Japan Panel Report, para. 6.272. See also EC Panel Report, para. 6.220.

76 Japan Panel Report, para. 6.281.

77 EC Panel Report, para. 6.225.