WORLD TRADE
ORGANIZATIONWT/GC/W/410/Rev.1
26 October 2001
(01-5328)
Original:  English
PROPOSAL TO AMEND CERTAIN PROVISIONS OF THE UNDERSTANDING ON RULES
AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU) PURSUANT
TO ARTICLE X OF THE MARRAKESH AGREEMENT ESTABLISHING THE WORLD
TRADE ORGANIZATION
Submission by Bolivia, Canada, Chile, Colombia, Costa Rica, Ecuador, Japan, Korea, New Zealand,
Norway, Peru, Switzerland, Uruguay and Venezuela for Examination and Further Consideration by
the General Council
Revision
The following communication, dated 26 October 2001, containing a revision of the proposal
in document WT/GC/W/410 has been received from the Permanent Mission of Japan.
_______________WT/GC/W/410/Rev.1
Page 2
PROPOSAL TO AMEND CERTAIN PROVISIONS OF THE UNDERSTANDING ON RULES
AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU) PURSUANT
TO ARTICLE X OF THE MARRAKESH AGREEMENT ESTABLISHING THE WORLD
TRADE ORGANIZATION
1. The following footnote shall be added to the third sentence of paragraph 3 of Article 21 after
the term “reasonable period of time”:
“For purposes of this Understanding, the 'reasonable period of time' shall include the
time-period specified under paragraph 7 of Article 4 of the Agreement on Subsidies and
Countervailing Measures.”
2. Paragraph 5 of Article 21 is amended to read as follows:
"During the reasonable period of time, each party to the dispute shall accord sympathetic
consideration to any request from another party to the dispute for consultations with a view to
reaching a mutually satisfactory solution regarding the implementation of the
recommendations or rulings of the DSB.  When such consultations are entered into, eachparty to the dispute shall afford to any third party, which so requests, an adequate opportunity
to express its views.”
3. Paragraph 6 of Article 21 is amended to read as follows:
 "6. (a) The DSB shall keep under surveillance the implementation of adopted
recommendations or rulings.  The issue of implementation of the recommendations or rulingsmay be raised at the DSB by any Member at any time following their adoption.
“(b) The Member concerned shall report on the status of its implementation of the
recommendations or rulings of the DSB at each DSB meeting,
1 where any Member may raise
any point pertaining thereto, beginning 6 months after the date of adoption of the
recommendations or rulings of the DSB, until the parties to the dispute have mutually agreedthat the issue is resolved or until the DSB finds pursuant to Article 21 bis that the Member
concerned has complied. At least 10 days prior to each such DSB meeting, the Member
concerned shall provide the DSB with a detailed written status report concerning its progress
in the implementation of the recommendations or rulings.
"(c) (i) Upon compliance with the recommendations or rulings of the DSB the
Member concerned shall submit to the DSB a written notification oncompliance.
"(ii) If the Member concerned has not submitted a notification under
subparagraph (c)(i) by the date that is 20 days before the date of expiry of the
reasonable period of time, then not later than that date the Member concernedshall submit to the DSB a written notification on compliance including the
measures that it has taken, or the measures that it expects to have taken by the
expiry of the reasonable period of time.  Where the notification refers to
measures that the Member concerned expects to have taken, the Member
concerned shall submit to the DSB a supplementary written notification no laterthan the expiry of the reasonable period of time, stating that it has, or has not,
taken such measures, and indicating any changes to them.
                                                     
1 The parties to the dispute may agree to waive this requirement for a particular DSB meeting.WT/GC/W/410/Rev.1
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“(iii) Each notification under this subparagraph shall include a detailed
description as well as the text of the relevant measures the Member concerned
has taken.  The notification requirement of this subparagraph shall not be
construed to reduce the reasonable period of time established pursuant to
paragraph 3 of Article 21. ”
4. The following new Article shall be inserted after Article 21:
“Article 21bis
Determination of Compliance
“1. Where there is disagreement between the complaining party and the Member
concerned as to the existence or consistency with a covered agreement of measures taken to
comply with the recommendations or rulings of the DSB, such disagreement shall be resolved
through recourse to the dispute settlement procedures provided for in this Article.22bis
“2. The complaining party may request the establishment of a Compliance Panelconsisting of the members of the original panel at any time after:  
3
“(i) the Member concerned states that it does not need a reasonable period of time
for compliance pursuant to paragraph 3 of Article 21;
“(ii) the Member concerned has submitted a notification pursuant to paragraph
6(c) of Article 21 that it has complied with the recommendations or rulings of the
DSB; or
“(iii) ten days before the date of expiry of the reasonable period of time;
whichever is the earlier.  Such request shall be made in writing.“3. While consultations between the Member concerned and the complaining party are
desirable, they are not required prior to a request for a Compliance Panel under paragraph 2.
“4. When requesting the establishment of a Compliance Panel, the complaining party
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.  Unless the parties to the Compliance
Panel proceeding agree on special terms of reference within 5 days from the establishment of
the Compliance Panel, standard terms of reference in accordance with Article 7 shall apply to
the Compliance Panel.
“5. The DSB shall meet 10 days after such a request unless the complaining party
requests that the meeting be held at a later date. At that meeting,
4 the DSB shall establish a
Compliance Panel, unless the DSB decides by consensus not to establish such a panel.
                                                     
2 This is without prejudice to the right of the parties to have recourse to normal dispute settlement
procedures under this Understanding or to the procedures under Article 5 or Article 25.
2bis The procedures provided for in this Article shall apply to measures referred to in paragraph 9 (as
amended) of Article 22.
3 If any member of the original panel is not available, the Director-General shall appoint a replacement
within 5 days after the date of establishment of the Compliance Panel, unless the Director-General has been
requested not to do so by the parties to the Compliance Panel.WT/GC/W/410/Rev.1
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“6. The Compliance Panel shall circulate its report to the Members within 90 days of the
date of its establishment.
“7. On or after the date of circulation of the report of the Compliance Panel, any party to
the Compliance Panel proceeding may request a meeting of the DSB to adopt the report, and
the DSB shall meet 10 days after such a request unless the party requesting the meeting
requests that the meeting be held at a later date.  At that meeting, the Compliance Panel report
shall be adopted by the DSB and unconditionally accepted by the parties to the Compliance
Panel proceeding unless a party to the Compliance Panel proceeding formally notifies the
DSB of its decision to appeal or the DSB decides by consensus not to adopt the report.  This
adoption procedure is without prejudice to the right of Members to express their views on aCompliance Panel report.
“7bis.  In case the report of the Compliance Panel is appealed, the Appellate Body
proceedings, as well as the adoption of the Appellate Body report, shall be conducted in
accordance with Article 17.
“8. If the Compliance Panel or the Appellate Body report finds that the Member
concerned has failed to bring the measure found to be inconsistent with a covered agreement
into compliance therewith or otherwise comply with the recommendations or rulings of the
DSB in the dispute within the reasonable period of time, the Member concerned shall not beentitled to any further period of time for implementation following adoption by the DSB of
the report of the Compliance Panel and, where the report of the Compliance Panel has been
appealed, the report of the Appellate Body.
“9. The Compliance Panel shall establish its own working procedures. The provisions of
Articles 1 through 3, 8 through 14 (other than  paragraph 5 of Article 8), 18, 19, 21.1, 21.2,
21.7, 21.8, 23, 24, 26 and 27.1 of the DSU shall apply to the Compliance Panel proceedings
except to the extent that (i) such provisions are incompatible with the time frame provided in
this Article, or (ii) this Article provides more specific provisions.”
5. Paragraph 2 of Article 22 shall be amended to read as follows:
“2. If:
“(i) the Member concerned does not inform the DSB pursuant to paragraph 3 of
Article 21 that it intends to implement the recommendations or rulings of the DSB;
“(ii) the Member concerned does not submit within the required time period a
notification pursuant to paragraph 6(c) of Article 21 stating that the Member
concerned has complied; or
“(iii) the Compliance Panel or the Appellate Body report pursuant to Article 21 bis
finds that the Member concerned has failed to bring the measures found to beinconsistent with a covered agreement into compliance therewith or otherwise
comply with the recommendations or rulings of the DSB; then
                                                                                                                                                                    
4 In the case of a Compliance Panel established pursuant to paragraph 9 of Article 22, the DSB shall
establish the Compliance Panel at the meeting requested by the Member concerned pursuant to that paragraph.WT/GC/W/410/Rev.1
Page 5
a complaining party may request authorization from the DSB5  to suspend the application to
the Member concerned of concessions or other obligations under the covered agreements. A
meeting of the DSB shall be convened for this purpose 10 days after the request, unless the
complaining party requests that the meeting be held at a later date.6 7 The parties to the
dispute are encouraged to consult before th e meeting to discuss a mutually satisfactory
solution.”
6. Paragraph 6 of Article 22 shall be amended to read as follows:
“6.  (a) When the complaining party has made a request for authorization to suspend
concessions or other obligations pursuant to paragraph 2 of this Article, the DSB shall grant
authorization to such request at the meeting requested by the complaining party unless the
DSB decides by consensus to reject the request.  However, if the Member concerned objectsto the level of suspension proposed, or claims that the principles and procedures set forth in
paragraph 3 have not been followed where the complaining party has requested authorization
to suspend concessions or other obligations pursuant to paragraph 3(b) or (c), the matter shall
be referred to arbitration.
“(b) Such arbitration shall be carried out by the original panel, if its members are
available.  The Director-General shall determine whether the members of the original panel
are available.
8  If any members of the original panel are not available, and the parties to the
arbitration do not agree on a replacement, at the request of any party the Director-General
shall appoint a replacement arbitrator9 within 5 days after the matter is referred to the
arbitration, after consulting with the parties to the arbitration.
“(c) The arbitration shall be completed and the decision of the arbitrator shall be
circulated to Members within 45 days after the referral of the matter.  The complaining party
shall not suspend concessions or other obligations during the course of the arbitration.”
7. Article 22 is amended by inserting the following paragraph after paragraph 8.  The existing
paragraph 9 shall be renumbered as paragraph 10.
“9. (a) After the DSB has authorized the suspension of concessions or other
obligations pursuant to paragraph 6 or 7 of this Article, the Member concerned may request a
termination of such authorization on the grounds that it has eliminated the inconsistency or
the nullification or impairment of benefits under the covered agreements identified in therecommendations or rulings of the DSB.  The Member concerned shall include with any such
request a written notice to the DSB describing in detail the measures it has taken, providing
the text of the relevant measures, and requesting a meeting of the DSB.  The DSB shall meet
20 days after such a request unless the Member concerned requests that the meeting be held at
a later date.  At such meeting the DSB sha ll withdraw the authorization for suspension of
                                                     
5 The complaining party that was a party to th e Compliance Panel proceedings shall not request
authorization from the DSB to suspend the applicatio n to the Member concerned of concessions or other
obligations under the covered agreements until after the circulation of the panel or the Appellate Body report.
6 In the case of paragraph 2 (ii) above, such DSB meeting shall not be convened before the expiry of
the reasonable period of time.
7 The DSB shall not consider the request for the authorization to suspend the application to the Member
concerned of concessions or other obligations until after it has adopted the report of the Compliance Panel and,
where the report of the Compliance Panel had been appealed, the report of the Appellate Body.
8 In order to avoid delay, the Director-General shall make this determination sufficiently in advance of
the DSB meeting at which the matter is to be referred to arbitration.
9 The expression “arbitrator” shall be interpreted as  referring either to an individual or a group.WT/GC/W/410/Rev.1
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concessions and other obligations unless the DSB decides by consensus not to withdraw the
authorization, or unless the complaining party objects to such withdrawal, in which case
subparagraph (b) shall apply.
“(b) Where there is disagreement between a complaining party and the Member
concerned as to the existence or consistency with a covered agreement of measures taken to
comply with the recommendations or rulings of  the DSB in the dispute, such disagreement
shall be resolved through recourse to the dispute settlement procedures provided for in Article
21bis.  If as a result of recourse to the dispute settlement procedures provided for in Article
21bis, the measures taken to comply by the Member concerned are found not to be
inconsistent with a covered agreement and comply with the recommendations or rulings of
the DSB in the dispute, then on or after the date of circulation of the report of the CompliancePanel or the Appellate Body, the Member concerned may request a meeting of the DSB to
withdraw the authorization for the suspension of  concessions or other obligations.  The DSB
shall meet 10 days
10 after such a request unless the Member concerned requests that the
meeting be held at a later date.  At such meeting the DSB shall withdraw the authorization for
suspension of concessions and other obligations unless the DSB decides by consensus not todo so.
11
“(c) The complaining party shall not maintain the suspension of concessions and
other obligations after the DSB withdraws the authorization.”
8. In paragraph 7 of Article 4, the numeral “60” shall be deleted wherever it occurs and the
numeral “30” shall be inserted in its place.  Insert at the end of this paragraph the following footnote:
“Where one or more of the parties is a developing country Member, the time period
established in paragraph 7 of Article 4 shall, if the parties agree, be extended by up to 30
days.  Any other party to the dispute shall accord sympathetic consideration to a request by a
developing country Member for such an extension.  If the parties do not agree to such an
extension, the developing country Member may have recourse to paragraph 10 of Article 12.”
9. Paragraph 1 of Article 6 shall be amended to read as follows:
“1. If the complaining party so requests, the DSB shall establish a panel at the meeting at
which the request first appears as an item on the DSB's agenda, unless the DSB decides by
consensus not to establish a panel.”
A new footnote shall be added to the Article 6.1 after the word "requests", the text of which
shall read as follows:
"In a case involving a complaint against a developing country Member, the complaining party
shall accord sympathetic consideration to a request from that Member to postpone the
establishment of a panel due to particular circumstances. "
The existing footnote to Article 6.1 shall be retained at the end of paragraph 1.
                                                     
10 In the case of an appeal, the DSB shall meet for this purpose on or after the date of the adoption of
the Appellate Body report pursuant to Article 17.14.
11 The DSB shall not consider the request for the withdrawal of the authorization for the suspension of
concessions until after it has adopted the report of the Compliance Panel or the Appellate Body.WT/GC/W/410/Rev.1
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10. Paragraph 12(a) of Appendix 3 shall be amended to read as follows:
“(a) Receipt of first written submissions of the parties:
(1) complaining party: ____ 3-4 weeks12
(2) party complained against: ____ 4-5 weeks”
11. In Appendix 3, the following paragraph shall be  inserted following paragraph 10.  Paragraphs
11 and 12 shall be renumbered as 12 and 13 respectively.
“11. The descriptive part of the panel report shall include a brief summary of the facts and
the procedural history of the case.  The documents submitted by the parties and third parties
to the panel shall be attached to the panel report, except for certain factual confidential
information designated as such by the party or the third party that submitted it.13  "
12. Paragraph 1 of Article 15 shall be deleted and paragraphs 2 and 3 of Article 15 shall be
renumbered as paragraphs 1 and 2.  In the first sentence of the present paragraph 2 of Article 15, the
first sentence shall be amended to read as follows:
“2. The panel shall issue an interim report to the parties, including the descriptive
sections and the panel’s findings and conclusions.”
13. Present paragraph 2 of Article 15 shall be amended by deleting therefrom the sentence “At the
request of a party, the panel shall hold a further meeting with the parties on the issues identified in thewritten comments.”
14. The following conforming changes on time frames need to be made in light of the other
changes in the text.
"Present paragraph 12 of Appendix 3 shall be amended as follows:
"(1) Items (e) and (f) shall be deleted and the following items redesignated accordingly.
"(2) Item (g) (prior to redesignation) shall be amended by deleting “2-4 weeks” and inserting
"4-8 weeks".
"(3) Item (h)(prior to redesignation) shall be amended by deleting “1 week” and inserting “10
days”
"(4) Item (i)(prior to redesignation) shall be deleted and the following items redesignated
accordingly.
"(5) Item (j) (prior to redesignation) shall be amended by deleting “2 weeks” and inserting
“10 days”
"(6) Item (k) (prior to redesignation) shall be amended to be to read as follows:“(k) Circulation of the final report to the Members: ____3 days”
                                                     
12 Up to 6 weeks if the complaining party is a developing country Member.
13 Documents of an administrative or procedural na ture, annexes, and exhibits need not be attached.WT/GC/W/410/Rev.1
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Based on a total reduction of time (up to approximately 47 days), the time frames in Article
20 (the reference to "nine months" and to "12 months"), the periods in 21.4 (the reference to
"15 months" and to "18 months") shall be reduced by one month.
15. A new paragraph 13 will be added to Article 3:
“Any time period in this Understanding may be  extended by mutual agreement of the parties
to the proceeding concerned.”
16. Paragraph 3 of Article 10 shall be amended to read as follows:
“3. Each third party shall receive a copy of all documents or information submitted to the
panel, at the time of submission, except for certain factual confidential information designated
as such by the disputing party that submitted  it, and except for any submission following the
interim panel report.13  Without prejudice to paragraph 2 of this Article, a third party may
observe any of the substantive meetings of the panel with the parties, except for portions of
sessions when such factual confidential information is discussed.”
17. The following sentence shall be added after current paragraph 6 of Appendix 3:
“In establishing the working procedures to be followed the panel may take into consideration
any special circumstances of a third party that are closely related to the matter under dispute.”
18. In paragraph 2 of Article 18 and in paragraph 3 of Appendix 3, the last sentence of each of
these paragraphs shall be amended to read as follows:
“Each party and third party to a proceeding shall also, if requested by a Member, provide a
non-confidential summary of the information contained in its submissions that could be
disclosed to the public, no later than 15 days after the date of either the request or the
submission, whichever is later, or such other deadline as is agreed by the party and the
requesting Member.”
19. In paragraph 10 of Article 4, the word “should” shall be deleted and the word “shall” shall be
inserted in place thereof.
20. In paragraph 2 of Article 21, the word “should” shall be deleted and the word “shall” shall be
inserted in place thereof.
21. Paragraph 6 of Article 3 shall be amended by inserting the following footnote after the word
“notified”:
“It is the obligation of both parties to notify any mutually agreed solution promptly and in no
event more than two months after the solution is agreed.  The notification shall describe the
terms of the mutually agreed solution related to  the WTO obligations in sufficient detail to
enable other Members to understand and evaluate it.”
22. Paragraph 4 of Article 25 is amended to read as follows:
"Articles 21, 21 bis and 22 of this Understanding shall apply mutatis mutandis  to arbitration
awards."
                                                     
13 Documents of an administrative or pr ocedural nature need not be provided.WT/GC/W/410/Rev.1
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23. The new footnotes shall be inserted into the text of the DSU at the places indicated above and
all footnotes shall be renumbered accordingly.
24. The following transitional provisions shall apply to this amendment:
(i) The amendments contained in paragraph 1, 2, 15 and 23 apply immediately
from the effective date of this amendment;
(ii) The amendment contained in paragraph 3 shall apply to all Reasonable
Periods of Time established after the effective date of this amendment;
(iii) The amendments contained in paragraph 4 through 6 shall apply to any
dispute where recommendations and rulings have been adopted by the DSB
after the effective date of this amendment;
(iv) The amendments contained in paragraph 7 shall apply to any claim of
elimination of the inconsistency or the nullification or impairment of benefitsunder the covered agreements taking place after the effective date of this
amendment;
(v) The amendments contained in paragraph 8 and 9 shall apply only to the
dispute settlement procedures for which consultations have been requested
after the effective date of this amendment;
(vi) The amendments contained in paragraph 10 through 14 and 16 through 22
shall apply to disputes for which a panel has been composed after the
effective date of this amendment.
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