EUROPEAN COMMUNITIES - ANTI-DUMPING DUTIES ON
MALLEABLE CAST IRON TUBE OR PIPE FITTINGS
FROM BRAZIL

Report of the Panel

(Continued)

VII. FINDINGS

A. GENERAL ISSUES

1. Standard of Review

7.1 In light of the claims and arguments made by the parties in the course of these Panel proceedings³⁸, we recall, at the outset of our examination, the standard of review we must apply to the matter before us.

7.2 Article 11 of the DSU³⁹ , in isolation, sets forth the appropriate standard of review for panels for all covered agreements except the Anti-Dumping Agreement . Article 11 imposes upon panels a comprehensive obligation to make an "objective assessment of the matter", an obligation which embraces all aspects of a panel's examination of the "matter", both factual and legal.

7.3 Article 17.6 of the Anti-Dumping Agreement sets forth the special standard of review applicable to anti-dumping disputes. Certain elements of Article 17.6 of the Anti-Dumping Agreement complement -- or supplement -- the standard contained in Article 11 of the DSU. In particular, with regard to factual issues, Article 17.6(i) provides:

"(i) 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;"

7.4 With respect to legal questions of the interpretation of the Anti-Dumping Agreement, Article 17.6(ii) provides:

"(ii) the panel shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations."

7.5 Thus, together, Article 11 of the DSU and Article 17.6 of the Anti-Dumping Agreement set out the standard of review we must apply with respect to both the factual and legal aspects of our examination of the claims and arguments raised by the parties.⁴⁰

7.6 In light of this standard of review, in examining the matter referred to us, we must evaluate whether the determination made by the European Communities is consistent with relevant provisions of the Anti-Dumping Agreement . We may and must find that it is consistent if we find that the European Communities investigating authority has properly established the facts and evaluated the facts in an unbiased and objective manner, and that the determination rests upon a "permissible" interpretation of the relevant provisions. Our task is not to perform a de novo review of the information and evidence on the record of the underlying anti-dumping investigation, nor to substitute our judgment for that of the EC investigating authority even though we may have arrived at a different determination were we examining the record ourselves.

2. Burden of Proof

7.7 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.⁴¹ In these Panel proceedings, we thus observe that it is for Brazil, which has challenged the consistency of the European Communities' measure, to bear the burden of demonstrating that the measure is not consistent with the relevant provisions of the Agreement. We also note, however, that it is generally for each party asserting a fact, whether complainant or respondent, to provide proof thereof.⁴² In this respect, therefore, it is also for the European Communities 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.⁴³ We must draw inferences on the basis of all of the relevant facts of record, including, for example, where a party refuses to provide relevant information.⁴⁴

B. PRELIMINARY AND PROCEDURAL ISSUES

1. Introduction

7.8 The parties each made requests for rulings on preliminary or procedural matters in this dispute. We turn first to the preliminary rulings requested by the European Communities. We then address the preliminary and procedural issues raised by Brazil.

2. Requests by the European Communities

(a) Alleged vagueness of Brazil's claims and scope of the Panel's terms of reference

7.9 The European Communities requests that we make preliminary rulings dismissing certain claims of Brazil as either overly vague or outside our terms of reference, or both.

(i) Alleged vagueness of certain claims by Brazil

7.10 At the first substantive meeting with the parties, we issued the following ruling in response to the EC request⁴⁵ relating to the alleged vagueness of certain claims by Brazil:

(ii) Scope of Panel's terms of reference

a. Brazil's "claims" alleged by the EC to be outside our terms of reference

7.12 In its first written submission, the European Communities requested that we make a preliminary ruling that certain of Brazil's claims are not within our terms of reference. In particular, the European Communities alleges that the following claims of Brazil are not within our terms of reference:⁴⁶

•  
  Claims of breach of Article 9.3 in connection with Issues 4, 5, 6, 9 and 10.
   
  1. Claim of infringement of Article 2.2.2 because of use of different criteria for the calculation of SG&A costs and of profits.
      
  2. Claim of breach of Article 6.13 because of a failure to provide Tupy with "any assistance practicable" in connection with Issue 8.
      
  3. Claim of infringement of Article 3.2 because the consideration of significant undercutting was confined to products that had matching EC products.
      
  4. Claims under Articles 6.2 and 6.9 in connection with Issues 16 and 17.
      
  5. Claims regarding the examination of specific injury factors listed in Article 3.4, including in particular the claim of inadequate consideration of 'factors affecting domestic prices' in breach of Article 3.4.
      
  6. Claim of violation of Article 3.5 based on the 'comparative advantage' of Tupy.
      
  7. Claim of violation of Article 6.6 because the authorities refused to investigate properly Tupy's assertion that imports from Poland had occurred in greater amounts and at lower prices than the European Communities had concluded on the basis of Eurostat information.
      
  8. Claim of breach of Article 3.5 based on the differences between 'black heart' and 'white heart' fittings.
      
  9. Claims of breach of Articles 12.2 and 12.2.2 in connection with Issues 1, 3, 5, 13 and 16.
      
  10. Claims of failure to provide information under Article 12.1.

7.13 We examine the EC request with respect to each of these "claims" below.

b. Claims under Articles 6.9, 6.13, 9.3 and 12.1

7.14 At the first substantive meeting with the parties, we issued the following ruling in response to the request by the European Communities relating to the scope of the Panel's terms of reference concerning Articles 6.9, 6.13, 9.3 and 12.1 of the Anti-Dumping Agreement :

7.15 We consider that our earlier ruling with respect to the EC request concerning the claims by Brazil under Articles 6.9, 6.13, 9.3 and 12.1 remains sufficient. For greater clarity, we would point out that our decision that Brazil's "claims" under Article 6.9 do not fall within our terms of reference was based upon our finding that this treaty provision was not identified at all in Brazil's Panel request and that the Panel request therefore did not meet the minimum requirement of Article 6.2 of the DSU in this respect. Whether or not Brazil raised allegations under Article 6.9 in consultations was not the focus of our inquiry. Even assuming arguendo that Brazil had raised this issue in consultations, this would not cure the deficiency in the Panel request as to the lack of any explicit textual identification of the legal basis of Brazil's complaint in this respect. It remains for us to consider, however, the EC request with respect to the claims not covered by this early ruling.

c. "Claims" under Articles 2.2.2, 3.2, 3.4, 3.5, 6.2, 6.6, 12.2 and 12.2.2 of the Anti-Dumping Agreement

7.16 We now examine the EC request for us to dismiss certain of Brazil's "claims" under Articles 2.2.2, 3.2, 3.4, 3.5, 6.2, 6.6, 12.2 and 12.2.2 of the Anti-Dumping Agreement . Article 6.2 of the DSU provides, in relevant part:

"The request for the establishment of a panel shall be made in writing. It shall �identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly�"

7.17 The issue before us is whether Brazil's Panel request provides "a brief summary of the legal basis of the complaint sufficient to present the problem clearly" and therefore satisfies the standard set out in Article 6.2 of the DSU with respect to Brazil's claims under these provisions of the Anti-Dumping Agreement.

7.18 We must closely scrutinize the Panel request to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.⁴⁷ In examining the sufficiency of the Panel request under Article 6.2 of the DSU, we must consider the text of the Panel request itself.⁴⁸ Second, we take into account whether the ability of the respondent to defend itself was prejudiced, given the actual course of the panel proceedings, by any alleged lack of specificity in the text of the Panel request.⁴⁹

7.19 We first recall that while claims must be specified in the Panel request, arguments in support of claims need not be set out in the panel request but may rather be progressively clarified and refined in the first submission, followed by the round of rebuttal submissions to the Panel.

7.20 On this basis, we turn first to a consideration of whether the text of the Panel request is sufficient for the purposes of Article 6.2 of the DSU with respect to the allegations identified by Brazil.

7.21 We recall the following allegations of Brazil at issue here:

•  
  "claim" of infringement of Article 2.2.2 because of use of different criteria for the calculation of SG & A costs, on the one hand, and for profits, on the other hand, where only one test appears to be expressly mandated by Article 2.2.2;
   
  1. "claim" of infringement of Article 3.2 because the consideration of significant undercutting was confined to products that had matching products;
      
  2. "claims" regarding the examination of specific injury factors listed in Article 3.4 including in particular the claim of inadequate consideration of "factors affecting domestic prices" in breach of Article 3.4;
      
  3. "claim" of violations of Article 3.5 based on the "comparative advantage" of Tupy" and on the differences between "black heart" and "white heart" fittings";
      
  4. "claims" of breach of Articles 12, 12.2 and 12.2.2 concerning Brazil's allegation relating to Article 15 (in connection with Issue 1, that is, exploration of possibilities of constructive remedies; and Brazil's allegation relating to the injury determination (in connection with Issue 16), that is, by allegedly not disclosing the figures related to the EC producers' own purchases (imports) and exports of the product concerned over the Injury Investigation Period.⁵⁰
      
  5. Brazil's "claim" of infringement of Article 6.6 due to an alleged refusal by the European Communities to investigate properly Tupy's assertion that imports from Poland had occurred in greater amounts and at lower prices than the European Communities had concluded on the basis of Eurostat information, and Brazil's allegation of violation of Article 6.2 in not disclosing the European Communities producers' purchases and exports of the product concerned which precluded Tupy from being able to properly defend its interests.

7.22 We consider that it is not necessary for us to rule on whether these allegations constitute "claims" or "arguments". If they are arguments, there would be no need for them to be set out in the Panel request. Even assuming that all of the allegations identified above are "claims" in respect of which the text of the Panel request may be somewhat deficient in describing the nature of the complaint, the European Communities has failed in any event to demonstrate to us any prejudice to its interests throughout the course of these Panel proceedings by the way these "claims" appeared in the Panel request. We asked the European Communities to indicate any prejudice that it had sustained. The European Communities responded as follows:

"The EC takes the view that in all the cases in which it has raised this objection its interests have been prejudiced by the lack of adequate notice of the issues. The scope of the claims that are explicitly made in Brazil's panel request is already exceptionally broad. The EC is entitled to the period that elapses between the establishment of the panel and the presentation of the complainant's first written Submission to prepare its defence. Such preparation is only possible if the complainant adequately specifies its claims in its panel request for incorporation into the terms of reference."⁵¹

7.23 However, it was evident to us from the participation of the European Communities in asserting its views in various phases of these Panel proceedings, including in its first written submission and in the first Panel meeting and in the exchanges between the parties preceding the first Panel meeting on preliminary issues, that the EC's ability to defend itself had not been prejudiced over the course of these Panel proceedings.

7.24 We therefore consider that the text of the Panel request adequately indicates the nature of the problem addressed by Brazil's claims and deny the EC request to dismiss these allegations made by Brazil.

d. Allegations identified by the European Communities in its second oral statement as outside the Panel's terms of reference

7.25 The European Communities subsequently asserted that⁵² certain additional allegations made by Brazil in Brazil's second written submission fell outside our terms of reference. According to the European Communities, Brazil had "misused" its rebuttal submission to extend the claims made in its first submission and to introduce wholly new ones. In the EC's view, such manoeuvres constitute "an abuse of the dispute settlement process" and the European Communities requested that we rule that these claims are inadmissible.⁵³ The allegations concerned fell under Issues 1, 6 and 16.

7.26 Under Issue 1, the allegations that the European Communities alleged to fall outside our terms of reference were: first, Brazil's assertion that "the first sentence of Article 15 refers to a general obligation to pay particular attention to the special situation of developing country members"⁵⁴; and second, Brazil's allegation that, "by failing to raise the possibility of an undertaking before the imposition of the provisional measure, the European Communities breached the second sentence of Article 15 of the Anti-Dumping Agreement " (emphasis in the original). Brazil submits that the Panel request lists Article 15 and provides a description as to the nature of the claim and that consequently the terms of reference cover the first and second sentences of Article 15 as well as the issue of exploration of constructive remedies.⁵⁵ We note that these allegations may have been encouraged by questioning from the Panel⁵⁶ in our attempt to clarify certain facts as well as the legal argumentation by the parties and we are conscious that we may neither overstep our terms of reference nor relieve Brazil of its task of establishing the inconsistency of the EC anti-dumping measure with the relevant provisions of the Anti-Dumping Agreement . In particular, we are aware that, in our questions posed to the parties, we must not "overstep the bounds of legitimate management or guidance of the proceedings � in the interest of efficiency and dispatch."⁵⁷

7.27 With respect to these allegations and with respect to: (a) Brazil's allegation under Issue 6 that the European Communities breached Article 2.4 by not indicating to the Brazilian exporter what additional information with regard to the IPI Premium Credit was necessary to ensure a fair comparison;⁵⁸ and (b) Brazil's allegation of violation of Article 6.2 and 6.4 in connection with Issue 16⁵⁹ that the contents of Exhibit EC-12 relating to certain listed Article 3.4 factors were not disclosed during the investigation thereby denying Tupy a full opportunity to defend its interests or a timely opportunity to have access to all relevant evidence, we recall that a complaining party must specify its claims in its Panel request, but that its arguments may be clarified and refined in subsequent submissions. As we have already indicated above, even assuming arguendo that these allegations were claims insufficiently set out in the Panel request, the European Communities has failed to demonstrate that it suffered any prejudice to its interests over the course of these Panel proceedings.⁶⁰ We therefore deny the EC request to dismiss these allegations made by Brazil.

(iii) Alleged inadmissibility of Exhibits BRL-47 through 52 under Article 17.5(ii) of the Anti-Dumping Agreement

7.28 In conjunction with its oral statement at the first substantive meeting, Brazil submitted Exhibits BRL-47 through 52, in support of its argumentation regarding "relocation" and "outsourcing arrangements" of several EC producers. Exhibits BRL 47-50 consist of information and tables that Brazil states it drew from the website of the Bulgaria Economic Forum relating to the acquisition by a Community producer (Atusa) of shares in Berg Montana and the consolidation of Atusa's control over Berg Montana on 4 July 2000. Exhibits BRL 51-52 contain information that Brazil states that it drew from Infit SAE's website (and page containing link to Woeste) and from another website providing general and market information in relation to Infit SAE. The gist of Brazil's argumentation, made in connection with its claims concerning injury and causation under Articles 3.4 and 3.5 of the Anti-Dumping Agreement , is that the European Communities failed adequately to examine and to take into account information regarding outsourcing and relocation in reaching its injury and causation determinations. Indeed, according to Brazil, "[o]n the basis of the evidence provided by the Brazilian exporter, an unbiased and objective investigating authority evaluating that evidence could not have reached the conclusions that the EC investigating authorities reached under several provisions of the Anti-Dumping Agreement , primarily regarding injury indicators and causality."⁶¹ (emphasis in the original; footnote omitted).

7.29 Recalling that Article 17.5(ii) of the Anti-Dumping Agreement provides that a panel established by the DSB to consider claims made under the Anti-Dumping Agreement will examine the matter referred to it based upon "the facts made available in conformity with appropriate domestic procedures to the authorities of the importing Member", the European Communities objects to the submission of these Exhibits by Brazil and requests us to make a preliminary ruling rejecting these exhibits as they did not form part of the record of the underlying investigation.

7.30 Brazil asks us to reject this EC request. Brazil submits that the information contained in the Exhibits in question is "the same" as information that Tupy, as well as other interested parties, presented to the EC authorities in the course of the investigation. Brazil invokes the panel report in US-Hot-Rolled Steel⁶² to support its view that the Panel is entitled to admit these Exhibits in these Panel proceedings.

7.31 The Panel understands that the issue presented by this EC request for a preliminary ruling is whether we should exclude from our consideration in this dispute certain Exhibits submitted by Brazil in these Panel proceedings that were not submitted to the EC investigating authorities during the investigation. We recall that our Working Procedures provide that preliminary rulings must be requested not later than the first written submission, but that exceptions may be made upon showing of "good cause". As Brazil submitted these Exhibits in conjunction with its oral statement at the first meeting, which meant that the European Communities was not in a position to make a preliminary objection in its first written submission, good cause exists for us to consider the merits of the EC request for a preliminary ruling here.

7.32 Article 17.5(ii) of the Anti-Dumping Agreement - which the European Community identifies as the legal basis for its preliminary ruling request -- provides:

"The DSB shall, at the request of the complaining party, establish a panel to examine the matter based upon: �

(ii) the facts made available in conformity with appropriate domestic procedures to the authorities of the importing Member".

7.33 This provision offers binding guidance directing our decision as to what evidence we are permitted to consider in examining a claim under the Anti-Dumping Agreement . This provision makes clear that, in an examination of a claim of violation of Article 3 of the Anti-Dumping Agreement in a particular investigation and determination, we may consider only facts or evidence going to the substance of the determination that had been made available in conformity with the appropriate domestic procedures to the authorities of the investigating country during the investigation.⁶³

7.34 Further, contextual, support stems from Article 17.6(i) of the Anti-Dumping Agreement, which sets out a specific standard of review for anti-dumping panels. This provision sets the parameters for the standard of our review of the determination of the investigating authority and clearly confirms that a de novo review is not contemplated by the Anti-Dumping Agreement . Thus, we must satisfy the requirement imposed by Article 11 of the DSU to conduct "an objective assessment of the matter before [us]" in accordance with the parameters set by Article 17.5 (ii) and 17.6(i).⁶⁴

7.35 Brazil argues that the information is "the same" as information contained in the record of the underlying investigation. Brazil asserts that the information may be "re-formatted", and is unable to confirm whether or not the information was available in this format or in the same way at the time of the investigation. However, Brazil concedes that this information, as contained in these Exhibits, was not submitted to the European Communities during the investigation.⁶⁵ We are therefore prevented by Article 17.5(ii) from considering these Exhibits in the context of our Article 3 examination and do not take them into account in our review of the EC determination. Brazil invoked the panel report in US-Hot-Rolled Steel to support its view that we would act with full authority in denying the EC request and admitting the Exhibits in question. However, that panel confronted different claims, additional to those dealing with the substance of the determination of the investigating authority under the provisions of the Anti-Dumping Agreement , including a claim under Article X:3 of the GATT 1994. That panel made it clear that the evidence to be considered in connection with the complaining party's Article X claim was not limited by the provisions of Article 17.5(ii) of the Anti-Dumping Agreement . By contrast, Brazil's claims (in this context) are limited to Articles 3.4 and 3.5 of the Anti-Dumping Agreement , and their factual basis is therefore delineated by Article 17.5(ii).

7.36 We thus exclude Exhibits BRL-47 through 52 from our consideration in these proceedings.

3.  
   Requests by Brazil

   (a) Exhibit EC-1

7.37 Brazil's first written submission, as originally submitted by Brazil on 10 October 2001 contained no paragraph or line numbering. The European Communities submitted, as Exhibit EC-1 to its first written submission, a version of Brazil's first written submission with line numbers superimposed upon it, and references in the European Communities first written submission to Brazil's first written submission were made on the basis of the line-numbered version in Exhibit EC-1.

7.38 Brazil requests that we make a preliminary ruling that the European Communities amend the text of the European Communities' first written submission so that references therein to Brazil's first written submission be made to the actual text of Brazil's first written submission as originally submitted by Brazil.⁶⁶

7.39 The European Communities asks that we reject this request, and further requests that we amend our Working Procedures in order to provide that the parties shall number the paragraphs or lines of all their subsequent submissions.⁶⁷

7.40 At the first substantive meeting with the parties, the Panel made the following statement:

Having heard both parties' views on this question, the Panel would like to clarify its understanding that Brazil's first submission, as originally submitted by Brazil, remains the official version of that submission for the purpose of the Panel record. We also understand that the EC makes references to its Exhibit EC-1 for the purposes of references in the EC's first written submission. We therefore reject Brazil's request to ask the EC to amend the text of the EC's first written submission so that all references are made to the actual text of Brazil's first written submission as originally submitted by Brazil. We also reject the EC's request to make a formal amendment to our Working Procedures specifically requiring that parties shall number the paragraphs or the lines of their subsequent submissions. Having said this, we underline that we would appreciate efforts on the part of the parties to facilitate the task of the Panel in examining the matter referred to us by the DSB.

With this in mind, we would invite Brazil to submit a paragraph numbered version of its first submission to facilitate referencing by the Panel and the parties. We would appreciate if the paragraph numbered version of Brazil's first submission could be made available by 14 December 2001. In the mean time, the parties are asked, to the extent possible, to refer to arguments in Brazil's first written submission by citing the page number, in addition to any other information which would facilitate our task of locating where those arguments have been made.

7.41 Brazil accordingly submitted a revised, paragraph-numbered version to the Panel of its first written submission on 14 December 2001.

(b) Exhibit EC-12

7.42 The European Communities submits an internal "note for the file" -- Exhibit EC-12 -- in support of its arguments relating to the EC examination of Article 3.4 injury factors. According to the European Communities,

"The outcome of the EC authorities' investigation of individual factors is recorded in two Regulations, principally in the Provisional Regulation, in so far as the examination produced significant results. The examination of the remaining factors (with one exception) is explicitly recorded in an internal EC Commission "note for the file" of 14 April 2000 (Exhibit EC-12). As the Panel will observe, with the exception of the [sic] concerning "growth", this looks at each of the factors which Brazil accuses the EC of not considering."

7.43 Brazil submits that Exhibit EC-12 is not part of the record of the underlying investigation. According to Brazil, this document is not part of the non-confidential file and there are indications that it was not part of the confidential file either. In Brazil's view, it is therefore is not properly before the Panel. Indeed, Brazil states:

"�the said exhibit, which is just an obvious attempt by the EC at curing the flaws of the investigation, should be completely disregarded by the Panel. Indeed, the acceptance of Exhibit EC-12 would be a dangerous precedent with enormous systemic implications."⁶⁸

7.44 The European Communities contends that Exhibit EC-12 legitimately forms part of the injury determination that the Panel must examine in its analysis of Brazil's Article 3.4 claim.⁶⁹ In response to Panel questioning, the European Communities confirmed that Exhibit EC-12 forms part of the record of the underlying investigation. The European Communities states that it "will accord the scurrilous assertions made by Brazil regarding the bona fides of this document the attention they deserve."⁷⁰

7.45 The Panel notes that the information in Exhibit EC-12 was not disclosed in any form to the interested parties in the course of the investigation. We wish to emphasize that we deplore the fact that this information, or an accurate non-confidential summary of any confidential information contained therein, was not disclosed to interested parties during the investigation, and that the fact of consideration of the elements discussed in EC-12 is not directly discernible from the published documents. It was apparently entirely unfamiliar to Brazil prior to the submission by the European Communities of Exhibit EC-12 in conjunction with the EC first written submission in these Panel proceedings. However, we understand that, in assessing the European Communities' compliance with Article 3, Articles 17.5 and 17.6(i) of the Anti-Dumping Agreement require us to examine the facts available to the investigating authority of the importing Member. These provisions do not prevent us from examining facts that were confidential and/or not disclosed to, or discernible by, the interested parties at the time of the final determination. We are therefore required by the Agreement to take into account all information upon which the investigating authority relied in order to reach its final determination, whether or not this information forms part of the non-confidential or disclosed record of the investigation or whether its consideration can be discerned from the published documents. This necessarily includes the information contained in Exhibit EC-12. We are guided by the Appellate Body Report in Thailand-H-Beams.⁷¹ We consider that this Appellate Body Report thoroughly addresses and resolves the issue that arises here and that we are permitted, indeed required, to take the contents of Exhibit EC-12 into account in our examination of Brazil's claims concerning the EC injury analysis under Article 3.4.

7.46 We understand Brazil to insinuate that Exhibit EC-12 may be some sort of post hoc attempt by the European Communities to cure the flaws that it perceived to exist in its Article 3.4 analysis for the purposes of these Panel proceedings. In this respect, we must presume that WTO Members participate in good faith in dispute settlement proceedings. We asked the European Communities to indicate in the record of the investigation the sources of information and the methodology on which the statements and information in Exhibit EC-12 are based.⁷² The European Communities gave an account of the methodology and the sources of information on the basis of which the statements in Exhibit EC-12 were made. We further asked the European Communities to confirm and substantiate to us that Exhibit EC-12 was written within the time period of the investigation.⁷³ The European Communities confirmed that this was the case. Given the EC responses, we find no basis to question whether Exhibit EC-12 forms part of the record of the underlying investigation and we must consequently take its contents into account in our examination of the relevant substantive claims made by Brazil.

7.47 We therefore decline Brazil's request for us to rule that Exhibit EC-12 is not properly before us.

(c) Request to append Brazil's full written submissions instead of executive summaries to the Panel Report

7.48 In its 31 July 2002 comments on the draft descriptive part of the Panel Report, Brazil requested that the complete text of its first and second submissions, rather than Brazil's executive summaries thereof, be included in Annexes A and C respectively. According to Brazil:

"The executive summaries provided by Brazil were intended only to assist the Panel in drafting a concise arguments section of the report; they were not intended to replace submissions nor are they to be attached as annexes to the panel's report. This was Brazil's understanding at the time the executive summaries were provided. Moreover, given the high number of claims in the present case, Brazil believes that a 10-page executive summary could not possibly accommodate the main arguments related to each of those claims. As far as Brazil is informed, also in other disputes where a similar rule of procedure [paragraph 16 of the Working Procedures] requested executive summaries, the complete submissions were annexed to the panel report."

7.49 For the reasons that follow, the Panel cannot accede to Brazil's request that we attach the full text of Brazil's first and second written submission to our Report.

7.50 First, we recall that paragraph 16 of the Working Procedures that we adopted at the outset of these proceedings pursuant to Article 12.1 of the DSU, after hearing the parties' views, provide:

"The parties shall provide the Panel with an executive summary of the claims and arguments contained in their written submissions and oral presentations. These executive summaries will be used by the Panel only for the purpose of assisting the Panel in drafting a concise arguments section of the Panel report so as to facilitate timely translation and circulation of the Panel report to the Members. They shall not serve in any way as a substitute for the submissions of the parties. The summaries of the first written submission and rebuttal written submission shall be limited to 10 pages and the summaries of the oral statements at the meeting will be limited to 5 pages. Summaries shall be submitted to the Secretariat within seven days of the original submission concerned."

7.51 This paragraph makes it clear that we are to use the executive summaries only for the purpose of assisting us in drafting a concise arguments section of the Panel Report so as to facilitate timely translation and circulation of the Panel Report to the Members. The rationale of this paragraph is to facilitate our production of a concise and timely descriptive part and to not attach the entire written submissions and statements of the parties. We find no substantiation for Brazil's assertion that other panels that have adopted a similar paragraph in their working procedures have also nevertheless attached the parties' entire written submissions to their reports. Indeed, this would seem to us to defeat the purpose of adopting the "executive summary approach" in the first place.

7.52 Second, the attachment of executive summaries to our report also leaves the parties in control of the contents of the executive summaries and enables them to set forth their most important arguments as they wish to set these forth. Each party has the obligation and the discretion to ensure that its own executive summaries of its own submissions accurately reflects its claims and arguments. Neither party requested us to increase the page limits referred to in our Working Procedures.

7.53 Third, we adopted these Working Procedures after hearing the views of the parties, at which time Brazil expressed no objection to the formulation in paragraph 16 of the Working Procedures. We decided at the outset to follow the "executive summaries approach" for these Panel proceedings. Having adopted this approach at the outset, we do not consider that it would beneficial, at this rather advanced stage in the proceedings, to adopt Brazil's suggested approach of attaching its full first and second submissions. Our adoption of such an approach at this stage would result in significant further delays in issuing our Report, particularly in view of the lengthy nature of these submissions (totalling over 370 pages). This would impose a considerable translation burden, adding to the burden already being borne due to the operation of the WTO dispute settlement system generally. There would also be an incongruity if the full EC submissions were not also attached, which, if we were to address by taking the requisite procedural steps and then by annexing the EC submissions, would augment the translation burden. We find particularly salient, in this respect, Article 12.2 of the DSU, which provides:

"Panel procedures should provide sufficient flexibility so as to ensure high-quality panel reports, while not unduly delaying the panel process." (emphasis added)

7.54 Fourth, as our Working Procedures also make clear, in no way are the executive summaries to substitute for the parties' submissions. In the course of our examination of the parties' claims and arguments in these proceedings, we have read and analyzed with great care the full written and oral submissions of the parties and the exchanges of questions and answers relating thereto. Our findings and conclusions in this Panel Report are based upon these full written and oral submissions and questions and answers. They form an integral part of the record before the Panel in this case. We therefore believe that we have adhered to both the letter and spirit of our Working Procedures and do not believe that any prejudice has arisen to Brazil in the course of these proceedings from annexing executive summaries of its first and second written submissions.

7.55 Fifth, we recall that Article 18.2 of the DSU, as also reflected in paragraph 3 of our Working Procedures, states that nothing in the DSU shall preclude a party to a dispute from disclosing statements of its own positions to the public. There is therefore nothing precluding Brazil from making its full first and second submissions generally and publicly available (subject, of course, to the requirements of maintaining the confidentiality of the EC's submissions in Article 18.2 of the DSU and paragraph 3 of our Working Procedures).⁷⁴

To continue with C. Issues Raised in this Dispute

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38 For example, EC first written submission, paras. 25-28; EC first oral statement, paras. 8-20.

39 Article 11 of the DSU, entitled "Function of Panels", states: "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�"

40 Appellate Body Report, United States - Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan ("US-Hot-Rolled Steel"), WT/DS184/AB/R, adopted 23 August 2001, paras. 54-62.

41 Appellate Body Report, United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India ("US - Wool Shirts and Blouses"), WT/DS33/AB/R, adopted 23 May 1997, DSR 1997:I, 323, at 337.

42 Ibid.

43 Appellate Body Report, Canada - Measures Affecting the Export of Civilian Aircraft ("Canada - Aircraft"), WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, 1377, para. 190.

44 Ibid., para. 203; Appellate Body Report, United States - Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities ("US - Wheat Gluten "), WT/DS166/AB/R, adopted 19 January 2001, paras. 173-174.

45 In particular, this EC request involved the following claims or arguments: allegation under Article 6.2 relating to alleged differences between the scope of the product referred to in the Application and subject to the investigation; allegation under Article 11.2 relating to the EC alleged failure to self-initiate a review immediately upon imposition of the AD measures; allegation under Article 2.4.1 because the EC allegedly did not make the currency conversions required under Article 2.4 for the purpose of making a fair comparison between the export price and the normal value; allegation of violation as the EC allegedly failed to satisfy itself as to the accuracy of information submitted by Tupy relating to imports of the product concerned under other CN codes; allegation of violation of Article 3.3 relating to channels of distribution and levels of trade; allegation of violation of Article 3.4 that it was incumbent on the EC to rely on more indicators and evidence of injury; allegation of violation relating to Articles 6.6 and 3.5 that the EC allegedly did not take proper account of positive evidence relating to alleged differences in the cost of production and market perception concerning black and white heart variants of the product concerned; and all claims under Article 12.

46 EC first written submission, para. 24. This EC request for a ruling pertained originally to certain claims made by Brazil in connection with Issue 2 in respect of the application and initiation of the investigation. In the course of these Panel proceedings, Brazil withdrew its claims under Issue 2. Brazil second written submission, para. 24. We therefore do not examine the request by the European Communities for a ruling on the scope of our terms of reference pertaining to Brazil's "claims" on the application and initiation of the investigation under Issue 2, in particular: claim of breach of Article 5.2 on the basis that products covered in the investigation must be identical with those described in the application; claim of breach of Article 5.2 on the grounds that the application did not include a complete list of known importers; and claim that the EC authorities failed to satisfy themselves as to the accuracy of information in the application.