WORLD TRADE
ORGANIZATIONWT/DS296/2
21 November 2003
(03-6239)
Original:  English
UNITED STATES – COUNTERVAILING DUTY INVESTIGATION
ON DYNAMIC RANDOM ACCESS MEMORY SEMICONDUCTORS
(DRAMS) FROM KOREA
Request for the Establishment of a Panel by Korea
The following communication, dated 19 November 2003, from the Delegation of Korea to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.
_______________
On 11 August 2003, the United States published a final countervailing duty order in the US
Federal Register  in the matter of Dynamic Random Access Memory Semiconductors (DRAMS) from
the Republic of Korea  (68 Fed. Reg. 47546), confirming under US law countervailing duties against
DRAMS from Korea.  Provisional countervailing duties had been in place since 7 April 2003, with
publication in the Federal Register  of the DOC's preliminary affirmative countervailing duty
determination (68 Fed. Reg.16766).  The final order was the result of the US Department of
Commerce's (DOC's) final countervailing duty determination, published in the Federal Register  on
23 June 2003 (68 Fed. Reg. 37122), as amended on 28 July 2003 (68 Fed. Reg. 44290), and as further
explained in an unpublished Decision Memorandum.1  It was also the result of the US International
Trade Commission's (ITC's) final material injury determination, also published in the Federal
Register  on 11 August 2003 (68 Fed. Reg. 47607), and as further elaborated in the ITC's report of its
final DRAMS investigation.2
The Government of Korea considers these determinations by the DOC and the ITC that led to
the US countervailing duty ("CVD") order against DRAMS from Korea, and thereby the order itself,to be inconsistent with US obligations under th e relevant provisions of the GATT 1994 and the
Agreement on Subsidies and Countervailing Measur es ("SCM Agreement").  As a result, the
Government of Korea requested consultations with the Government of the United States regarding
these determinations pursuant to Article 4 of the Understanding of the Rules and Procedures
Governing the Settlement of Disputes ("DSU"), Article 30 of the SCM Agreement, and Article XXIIof the GATT 1994.  Consultations were requested on 30 June 2003 concerning the DOC's
determination,
3 and on 18 August 2003 concerning the ITC's determination.4  The consultations were
held with the United States on 20 August 2003 and 1 October 2003, respectively.  These consultations
failed to resolve the dispute between the parties.
                                                     
1 The DOC makes the Decision Memorandum available on the internet at
http://ia.ita.doc.gov/frn/summ ary/korea-south/03-15793-1.pdf.
2 DRAM Modules from Korea , Inv. No. 701-TA-431 (Final), USITC Pub. 3617 (August 2003).
3 WT/DS296/1, G/L/633, G/SCM/D55/1.
4 WT/DS296/1/Add.1, G/L/633/Add.1, G/SCM/D55/1/Add.1.WT/DS296/2
Page 2
As a result of the failure to resolve the dispute, the Government of Korea requests the
establishment of a panel pursuant to Article 6 of the DSU,  Article XXIII of the GATT 1994, and
Article 30 of the SCM Agreement  regarding the DOC and ITC determinations and the resulting CVD
order imposed on DRAMS from Korea.  The Government of Korea requests that the panel make
findings that the United States has acted inconsistently with its obligations under Articles 1, 2, 10, 12,14, 15, 19, 22 and 32 of the SCM Agreement, as well as Article VI:3 of GATT 1994.  Specifically,
the Government of Korea makes claims under the following:
1. Article 1.1 of the SCM Agreement because, inter alia , the DOC failed to demonstrate
the existence of a financial contribution by the Government of Korea with respect to
each distinct financial transaction at issue in its subsidy investigation;
2. Article 1.1 of the SCM Agreement because, inter alia , the DOC erroneously assumed
that every Korean private financial institu tion involved in its subsidy investigation
was under the direction or entrustment of the Government of Korea;
3. Articles 1.1 and 14 of the SCM Agreement because, inter alia , the DOC failed to
demonstrate that a benefit was conferred on the respondent Hynix Semiconductor,
Inc., given available market benchmarks among Hynix's creditors;
4. Articles 1.1 and 14 of the SCM Agreement because, inter alia , the DOC disregarded
market benchmarks for measuring benefit established by a foreign bank operating inthe Korean market that extended financing to the respondent Hynix Semiconductor,
Inc. during the period of investigation;
5. Articles 1.1 and 14 of the SCM Agreement because, inter alia,  the DOC failed to
utilize relevant market benchmarks in determining whether Hynix was "creditworthy"or "equityworthy," and otherwise applied an improper "uncreditworthy" benchmark
and discount rate in calculating the benefit to Hynix Semiconductor, Inc., in this case;
6. Article 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994 because,
inter alia , the DOC's failure to measure the benefit in accordance with the principles
of Article 14 of the SCM Agreement resulted in countervailing duties levied in excess
of the amount allowed under the SCM Agreement and the GATT 1994;
7. Articles 1 and 2 of the SCM Agreement because, inter alia , the DOC imposed an
improper burden of proof on respondents, that is the Government of Korea and Hynix
Semiconductor, Inc., and thereby failed to base its decision on affirmative, objective,
and verifiable evidence;
8. Article 2 of the SCM Agreement because, inter alia , the DOC disregarded the fact
that many Korean companies underwent debt  restructuring similar to that undergone
by Hynix Semiconductor, Inc.  Therefore, the DOC did not establish that all of the
alleged subsidies were specific to the respondent Hynix Semiconductor, Inc., on thebasis of positive evidence;
9. Article 12.6 of the SCM Agreement because, inter alia , the DOC conducted various
private verification meetings in the territory of Korea, at which the Government of
Korea had no representatives, over the explicit objection of the Government of Korea;
10. Article 15.1 of the SCM Agreement because, inter alia , the ITC determinations on
injury and causation were not based on positive evidence and an objective assessment
of the effects of allegedly subsidized imports;WT/DS296/2
Page 3
11. Article 15.2 of the SCM Agreement because, inter alia , the ITC determinations on
injury and causation improperly assessed the significance of the volume and price
effects of subject imports;
12. Article 15.4 of the SCM Agreement because, inter alia , the ITC improperly assessed
the overall condition of the domestic industry;
13. Articles 15.2 and 15.4 of the SCM Agreement because, inter alia , the ITC improperly
ignored the definition of domestic industry as set forth in Article 16 of the SCM
Agreement, defined the domestic industry and imports inconsistently, and thus
distorted the volume of imports and the effects thereof on the domestic industry;
14. Article 15.5 of the SCM Agreement, because , inter alia , the ITC failed to
demonstrate the requisite causal link between subject imports and injury, improperly
assessed the role of other factors, and improperly attributed the effect of other factors
to the allegedly subsidized imports;
15. Article 22.3 of the SCM Agreement because, inter alia , the ITC's injury
determination did not set forth in sufficient detail the ITC's findings and conclusions
on all material issues of fact and law; and
16. Articles 10 and 32.1 of the SCM Agreement because, inter alia , the CVD order
imposed by the United States against DRAMS from Korea was not in accordance
with the relevant provisions of the SCM Agreement or the relevant provisions of the
GATT 1994.
The Government of Korea requests that the panel be established with the standard terms of
reference set forth in Article 7 of the DSU .
The Government of Korea further requests that this request be placed on the agenda for the
meeting of the Dispute Settlement Body on 1 December 2003.
__________