WT/DS436/R/Add.1  
 
14 July 2014  
(14-3937)  Page: 1/118  
  Original: English  
 
 UNITED STATES – COUNTERVAILING MEASURES ON CERTAIN  
HOT-ROLLED CARBON STEEL FLAT PRODUCTS FROM INDIA 
REPORT OF THE PANEL 
Addendum 
This addendum  contains Annexes A to D to the Report of the Panel to be found in document 
WT/DS436/R. 
 
 
_______________ WT/DS436/R/Add.1 
 
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LIST OF ANNEXES 
ANNEX A 
WORKING PROCEDURES FOR THE PANEL 
Contents Page 
Annex A-1 Working Procedures for the Panel A-2 
Annex A-2 Additional Working Procedures for the Panel Concerning Business Confidential 
Information A-6 
ANNEX B 
ARGUMENTS OF INDIA 
Contents Page 
Annex B-1 Executive Summary of the First Written Submission of India B-2 
Annex B-2 Executive Summary of India's Submissi on Against Requests for Preliminary 
Rulings by the United States B-9 
Annex B-3 Executive Summary of the Oral Opening Statement of India – First Meeting B-18  
Annex B-4 Oral Closing Statement of  India – First Meeting B-25 
Annex B-5 Executive Summary of the Second Written Submission of India B-27  
Annex B-6 Executive Summary of the Oral Opening Statement of India – Second Meeting B-35 
Annex B-7 Oral Closing Statement of India – Second Meeting B-44  
ANNEX C 
ARGUMENTS OF THE UNITED STATES 
Contents Page 
Annex C-1 Executive Summary of the First Written Submission of the United States C-2 
Annex C-2 Oral Opening Statement of the United States – First Meeting C-9 
Annex C-3 Executive Summary of the Second Written Submission of the United States C-16 
Annex C-4 Executive Summary of the Oral Openin g Statement of the United States – 
Second Meeting C-24 
ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Third Party Written Submission of Australia D-2 
Annex D-2 Executive Summary of the Third Party Oral Statement of Australia D-4 
Annex D-3 Executive Summary of the Third Party Written Submission of Canada D-6 
Annex D-4 Third Party Oral Statement of Canada D-8 
Annex D-5 Executive Summary of the Third Party Written Submission of China D-10 
Annex D-6 Third Party Oral Statement of China D-14 
Annex D-7  Executive Summary of the Third Party Written Submission of the 
European Union D-17 
Annex D-8  Executive Summary of the Third Party Oral Statement of the European Union D-21 
Annex D-9  Executive Summary of the Third Party Written Submission of the 
Kingdom of Saudi Arabia D-24 
Annex D-10  Third Party Oral Statement of the Kingdom of Saudi Arabia D-27 
Annex D-11  Third Party Oral Statement of Turkey D-30 
 WT/DS436/R/Add.1 
 
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  ANNEX A 
WORKING PROCEDURES FOR THE PANEL 
Contents Page 
Annex A-1 Working Procedures for the Panel A-2 
Annex A-2 Additional Working Procedures for the Panel Concerning Business Confidential 
Information A-6 
 
 WT/DS436/R/Add.1 
 
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ANNEX A-1 
UNITED STATES – COUNTERVAILING MEASURES ON  
CERTAIN HOT-ROLLED CARBON STEEL  FLAT PRODUCTS FROM INDIA 
(DS436) 
WORKING PROCEDURES FOR THE PANEL 
1. In its proceedings, the Panel shall follow the relevant provisions of the Understanding on 
Rules and Procedures Governing the Settlement of  Disputes (DSU). In addition, the following 
Working Procedures shall apply. 
General 
 
2. The deliberations of the Panel and the documents submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Procedures shall preclude a party to the dispute (hereafter 
"party") from disclosing statements of its own positions to the public. Members shall treat as 
confidential information submitted to the Panel by another Member which the submitting Member 
has designated as confidential. Where a party submits a confidential version of its written submissions to the Panel, it shall also, upon request of a Member, provide a non-confidential 
summary of the information contained in its submissions that could be disclosed to the public.  
3. Parties, and Members having notified their interest in the dispute to the Dispute 
Settlement Body in accordance with Article 10 of the DSU (hereafter "third parties"), shall treat business confidential information in accordance with the procedures set forth in the Additional 
Working Procedures of the Panel Concerning Business Confidential Information (Annex 1). 
4. The Panel shall meet in closed session. The parties and third parties shall be present at the 
meetings only when invited by the Panel to appear before it.  
5. Each party and third party has the right to de termine the composition of its own delegation 
when meeting with the Panel. Each party and third party shall have the responsibility for all members of its own delegation and shall ensure th a t  e a c h  m e m b e r  o f  s u c h  d e l e g a t i o n  a c t s  i n  
accordance with the DSU and these Working Procedures, particularly with regard to the 
confidentiality of the proceedings.  
Submissions 
 
6. Before the first substantive meeting of the Panel with the parties, each party shall submit a 
written submission in which it presents the facts of the case and its arguments, in accordance with the timetable adopted by the Panel. Each party shall also submit to the Panel, prior to second 
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by 
the Panel.  
7. A party shall submit any request for a preliminary ruling at the earliest possible 
opportunity and in any event no later than in its first written submission to the Panel. If India 
requests such a ruling, the United States shall submit its response to the request in its first written submission. If the United States requests such a ruling, India shall submit its response to the request prior to the first substantive meeting of the Panel, at a time to be determined by the Panel 
in light of the request. Exceptions to this pr ocedure shall be granted upon a showing of good 
cause. 
8. Each party shall submit all factual evidence to the Panel no later than during the first 
substantive meeting, except with respect to evid ence necessary for purposes of rebuttal, answers 
to questions or comments on answers provided by the other party. Exceptions to this procedure 
shall be granted upon a showing of good cause. Where such exception has been granted, the Panel WT/DS436/R/Add.1 
 
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  shall accord the other party a period of time for comment, as appropriate, on any new factual 
evidence submitted after the first substantive meeting.  
9. To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submissions, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute. For example, exhibits subm itted by India could be numbered IND-1, IND-2, 
etc. If the last exhibit in connection with the first submission was numbered IND-5, the first exhibit of the next submission thus would be numbered IND-6. The United States' exhibits could be 
numbered USA-1, USA-2, etc. 
Questions 
 10. The Panel may at any time pose questions to the parties and third parties, orally in the 
course of a meeting or in writing.  
Substantive meetings  
 
11. Each party shall provide to the Panel the list of members of its delegation in advance of 
each meeting with the Panel and no later than 5.30 p.m. the previous working day.  
12. The first substantive meeting of the Panel with  the parties shall be conducted as follows: 
(a) The Panel shall invite India to make an opening statement to present its case first. 
Subsequently, the Panel shall invite the Unit ed States to present its point of view. 
Before each party takes the floor, it shall provide the Panel and other participants at the meeting with a provisional written version of its statement. In the event that 
interpretation is needed, each party shall provide additional copies to the 
interpreters. Each party shall make available to the Panel and the other party the final version of its statement, preferably  at the end of the meeting, and in any 
event no later than 5.30 p.m. on the first working day following the meeting. 
(b) After the conclusion of the statements, the Panel shall give each party the 
opportunity to ask questions or make comments, through the Panel. Each party shall send in writing, within a timeframe to be determined by the Panel, any 
questions to the other party to which it wishes to receive a response in writing. 
Each party shall be invited to respond in writing to the other party's questions 
within a deadline to be determined by the Panel. 
(c) The Panel may subsequently pose questions to the parties. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the parties to 
which it wishes to receive a response in writing. Each party shall be invited to 
respond in writing to such questions within a deadline to be determined by the 
Panel. 
(d) Once the questioning has concluded, the Panel shall afford each party an 
opportunity to present a brief closing statement, with India presenting its 
statement first.  
13. The second substantive meeting of the Panel with the parties shall be conducted as 
follows: 
(a) The Panel shall ask the United States if it wishes to avail itself of the right to 
present its case first. If so, the Panel shall invite the United States to present its opening statement, followed by India. If the respondent chooses not to avail itself 
of that right, the Panel shall invite Indi a to present its opening statement first. 
Before each party takes the floor, it shall provide the Panel and other participants at the meeting with a provisional written version of its statement. In the event that 
interpretation is needed, each party shall provide additional copies to the 
interpreters. Each party shall make available to the Panel and the other party the final version of its statement, preferably  at the end of the meeting, and in any 
event no later than 5.30 p.m. of the first working day following the meeting. WT/DS436/R/Add.1 
 
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  (b) After the conclusion of the statements, the Panel shall give each party the 
opportunity to ask questions or make comments, through the Panel. Each party shall send in writing, within a timeframe to be determined by the Panel, any questions to the other party to which it wishes to receive a response in writing. 
Each party shall be invited to respond in writing to the other party's questions 
within a deadline to be determined by the Panel. 
(c) The Panel may subsequently pose questions to the parties. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the parties to 
which it wishes to receive a response in writing. Each party shall be invited to 
respond in writing to such questions within a deadline to be determined by the 
Panel. 
(d) Once the questioning has concluded, the Panel shall afford each party an 
opportunity to present a brief closing stat ement, with the party that presented its 
opening statement first, presenting its closing statement first.  
Third parties 14. The Panel shall invite each third party to transmit to the Panel a written submission prior 
to the first substantive meeting of the Panel with the parties, in accordance with the timetable 
adopted by the Panel.  
15. Each third party shall also be invited to present its views orally during a session of this first 
substantive meeting, set aside for that purpose. Ea ch third party shall provide to the Panel the list 
of members of its delegation in advance of this session and no later than 5.30 p.m. the previous 
working day.  
16. The third-party session shall be conducted as follows: 
(a) All third parties may be present during the entirety of this session.  
(b) The Panel shall first hear the arguments of the third parties in alphabetical order. 
Third parties present at the third-party session and intending to present their views orally at that session, shall provide the Panel, the parties and other third-
parties with provisional written versions of their statements before they take the 
floor. Third parties shall make available to the Panel, the parties and other third parties the final versions of their statements, preferably at the end of the session, and in any event no later than 5.30 p.m. of the first working day following the session.  
(c) After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third parties questions for clarification on any matter raised in the third parties' submissions or statements. Each party 
shall send in writing, within a timeframe to be determined by the Panel, any 
questions to a third party to which it wishes to receive a response in writing.  
(d) The Panel may subsequently pose questions to the third parties. The Panel shall 
send in writing, within a timeframe to be determined by it, any questions to the 
third parties to which it wishes to receive a response in writing. Each third party 
shall be invited to respond in writing to such questions within a deadline to be determined by the Panel. 
Descriptive part 
 
17. The parties and third parties shall provide the Panel with executive summaries of the facts 
and arguments as presented to the Panel in each of their written submissions, other than answers 
to written questions, and in their oral presentati ons, within one week following the delivery to the 
Panel of the written version of the submission or oral statement concerned. Each executive summary of the parties shall be limited to no more than ten (10) pages. The executive summaries 
shall not serve in any way as a substitute for the submissions of the parties in the Panel's 
examination of the case. Third parties are re quested to provide the Panel with executive WT/DS436/R/Add.1 
 
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  summaries of their written submissions and oral statements of no more than five (5) pages each, 
within one week following the delivery to the Panel of the written version of the relevant submission. Paragraph 22 shall apply to the service of executive summaries.  
18. The descriptive part of the Panel's report will include the procedural and factual 
background to the present dispute. Description of the main arguments of the parties and third 
parties will consist of the executive summaries referred to in paragraph 17, and these will be annexed as addenda to the report. 
Interim review 
 19. Following issuance of the interim report, each party may submit a written request to 
review precise aspects of the interim report an d request a further meeting with the Panel, in 
accordance with the timetable adopted by the Pane l. The right to request such a meeting shall be 
exercised no later than at the time the written request for review is submitted.  
20. In the event that no further meeting with the Panel is requested, each party may submit 
written comments on the other party's written reques t for review, in accordance with the timetable 
adopted by the Panel. Such comments shall be limited to commenting on the other party's written request for review.  
21. The interim report shall be kept strictly confidential and shall not be disclosed. 
Service of documents 
 22. The following procedures regarding service of documents shall apply: 
(a) Each party and third party shall submit al l documents to the Panel by filing them 
with the DS Registry (office No. 2047).  
(b) Each party and third party shall file 8 paper copies of all documents it submits to 
the Panel. However, when exhibits are provided on CD-ROMS/DVDs, 
5 CD-ROMS/DVDs and 5 paper copies of those exhibits shall be filed. The DS 
Registrar shall stamp the documents with the date and time of the filing. The paper version shall constitute the official version for the purposes of the record of the dispute. 
(c) Each party and third party shall also provid e an electronic copy of all documents it 
submits to the Panel at the same time as the paper versions, preferably in Microsoft Word format, either on a CD-ROM, a DVD or as an e-mail attachment. If the electronic copy is provided by e-mail, it should be addressed to 
DSRegistry@wto.org , and cc'd to XXXXXX ; XXXXXX ; and XXXXXX . If a CD-ROM or 
DVD is provided, it shall be filed with the DS Registry.  
(d) Each party shall serve any document submitted to the Panel directly on the other 
party. Each party shall, in addition, serve on all third parties its written 
submissions in advance of the first substa ntive meeting with the Panel. Each third 
party shall serve any document submitted to the Panel directly on the parties and all other third parties. Service may take place in electronic format (CD-ROM, DVD, or e-mail attachment), if the party receiving service consents to such format. Each 
party and third party shall confirm, in writing, that copies have been served as 
required at the time it provides each document to the Panel. 
(e) Each party and third party shall file its documents with the DS Registry and serve 
copies on the other party (and third parties where appropriate) by 5.30 p.m. (Geneva time) on the due dates established by the Panel. 
(f) The Panel shall provide the parties with an electronic version of the descriptive 
part, the interim report and the final report, as well as of other documents as appropriate. When the Panel transmits to the parties or third parties both paper 
and electronic versions of a document, the paper version shall constitute the 
official version for the purposes of the record of the dispute. WT/DS436/R/Add.1 
 
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  ANNEX A-2 
UNITED STATES – COUNTERVAILING MEASURES ON  
CERTAIN HOT-ROLLED CARBON STEEL  FLAT PRODUCTS FROM INDIA 
(DS436) 
ADDITIONAL WORKING PROCEDURES FOR THE PANEL CONCERNING  
BUSINESS CONFIDENTIAL INFORMATION 
1. The following procedures apply to business conf idential information (BCI) submitted in the 
course of the Panel proceedings. These procedures do not apply to information that is available in 
the public domain. In addition, these procedures do not apply to any such BCI if the person who 
provided the information in the course of the aforementioned investigations agrees in writing to make the information publicly available. 
2. For the purposes of these proceedings, busi ness confidential information (BCI) means 
information previously submitted to the U.S. Department of Commerce as confidential information protected by Administrative Protective Order ("APO") in the course of the countervailing duty 
investigation and administrative reviews (Investigation No.C-533-821) that is submitted to the 
Panel by the United States or by India. 
3. The first time that a party submits to the Panel BCI as defined above from an entity that 
submitted that information in one of the proceedings at issue, the party shall also provide, with a 
copy to the other party, an authorizing letter from the entity. That letter shall authorize both the United States and India to submit in this dispute, in accordance with these procedures, any confidential information submitted by that en tity in the course of those proceedings.  
4. No person shall have access to BCI except a member of the WTO Secretariat or the Panel, 
an employee of a party or third party, and an outs ide advisor for the purposes of this dispute to a 
party or third party. However, an outside advisor is not permitted access to BCI if that advisor is 
an officer or employee of an enterprise engage d in the production, export, or import of the 
products that were the subject of the proceeding s cited in paragraph 2. Where an outside advisor 
has received BCI under the relevant APO, nothing in these procedures alters that outside advisor's 
obligations under the APO. 
5. A party or third party having access to BCI submitted in these Panel proceedings shall 
treat it as confidential and shall not disclose that information other than to those persons authorized to receive it pursuant to these procedures. Any information submitted as BCI under 
these procedures shall only be used for the purposes of this dispute and for no other purpose. 
Each party and third party is responsible for ensu ring that its employees and/or outside advisors 
comply with these procedures to protect BCI. 
6. A party or third party submitting or referring to BCI in any written submission (including in 
any exhibits) shall mark the cover and the first page of the document containing any such information with the words "Contains Business Confidential Information". The specific information 
in question shall be enclosed in double brac kets, as follows: [[xx.xxx.xx]] and the notation 
"Contains Business Confidential Information" shall be marked at the top of each page containing the BCI. A non-confidential version, clearly marked as such, of any written submission (including any exhibits) containing BCI shall be submi tted pursuant to paragraph 22 of the Working 
Procedures within three working days after the su bmission of the confidential version containing 
the BCI.  
7. In the case of an oral statement containing BCI, the party or third party making such a 
statement shall inform the Panel before making it that the statement will contain BCI, and the 
Panel will ensure that only persons authorized to have access to BCI pursuant to these procedures are in the room to hear that statement. A written non-confidential version of an oral statement 
containing BCI shall be submitted no later than  the working day following the meeting where the 
statement was made. Non-confidential versions of both oral and written statements shall be WT/DS436/R/Add.1 
 
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  redacted in such a manner as to convey a reasonable understanding of the substance of the BCI 
deleted therefrom. 
8. Any BCI information that is submitted in binary-encoded form shall be clearly marked with 
the statement "Business Confidential Information"  on a label on the storage medium, and clearly 
marked with the statement "Business Confidential  Information" in the binary-encoded files. 
9. The Panel shall not disclose in its report or in any other way, any information designated 
as BCI under these procedures. The Panel may, however, make statements of conclusion based on 
such information. 
10. Submissions containing information designated as BCI under these procedures will be 
included in the record forwarded to the Appellate Body in the event of any appeal of the Panel's 
report. 
 
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 WT/DS436/R/Add.1 
 
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  ANNEX B 
ARGUMENTS OF INDIA 
Contents Page 
Annex B-1 Executive Summary of the First Written Submission of India B-2 
Annex B-2 Executive Summary of India's Submissi on Against Requests for Preliminary 
Rulings by the United States B-9 
Annex B-3 Executive Summary of the Oral Opening Statement of India – First Meeting B-18  
Annex B-4 Oral Closing Statement of  India – First Meeting B-25 
Annex B-5 Executive Summary of the Second Written Submission of India B-27  
Annex B-6 Executive Summary of the Oral Opening Statement of India – Second Meeting B-35 
Annex B-7 Oral Closing Statement of India – Second Meeting B-44  
 WT/DS436/R/Add.1 
 
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ANNEX B-1 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF INDIA 
I. INTRODUCTION 
 
1. This dispute presents fundamental issues rega rding the proper interpretation and application 
of the SCM Agreement, the GATT 1994 and the WTO Agreement. The dispute covers certain 'as 
such' claims and 'as applied' claims as stated in India's request for establishment of the Panel.1 
The dispute emanates from the countervailing duties  imposed by the United States against imports 
of Certain Hot Rolled Carbon Steel Flat Products from India ("subject goods") in Case No. C-533-821. The United States levied countervailing duties on the subject goods pursuant to 
the original investigation concluded in 2002. The United States also conducted various 
administrative reviews (ARs) for the years 2002, 2004, 2006, 2007 and 2008 as well as a sunset reviews in 2007. The second sunset review is ongoing. In each of these proceedings, the 
United States made findings and conclusions that are inconsistent with the above agreements.  
2. In this document, section II covers 'as such' claims and section III covers 'as applied' 
claims.  
II. 'AS SUCH' CLAIMS 
 A. The United States law contained in 19 CFR § 351.511(a)(2)(i) to (iii) is 'as such' 
inconsistent with Article 14(d) of the SCM Agreement. 
3. The United States follows a three-tiered benchmark approach under 19 CFR 
§ 351.511(a)(2)(i) to (iii), while determining the adequacy of remuneration for the provision of 
goods or services by the Government. Under Tier-I, the United States considers market 
determined price resulting from actual transactions in the country in question (referred to as 
'in-country' prices) as the benchmark. If a Tier-I price is unavailable, the United States considers a world market price under Tier-II, provided it is reasonable to conclude that such price would be 
available to purchasers in the country in question. If a Tier-II price is also unavailable, the United 
States will apply Tier III and measure the adequacy of remuneration by assessing whether the government price is consistent with market principles.  
4. The ordinary language of the first sentence of  Article 14(d) suggests that a determination of 
'benefit' cannot be made by way of comparison approach without first ascertaining whether the 
government remuneration received by the provid er is adequate to the provider itself. The 
hierarchical and comparison based approach in the United States law does not allow for 
determining whether in every case, the remuneration  is adequate to the provider of the goods as 
required under first sentence of Article 14(d). It directly seeks to measure the extent of benefit to the recipient of the goods by comparing the gove rnment price with the benchmark price without 
assessing the adequacy of the impugned government price.  
5. Notwithstanding the above, 19 CFR § 351.511(a )(2)(i)-(iii) is inconsistent with the second 
sentence of Article 14(d). The provision of goods cannot  be considered as conferring a 'benefit' 
merely because it is priced at less than a benchmark price within or outside the country. It may be 
observed that Article 14(d) is distinctly worded  as compared to clause (a), (b) and (c). The 
hierarchical nature of United States' law would result even a remuneration that is adequate under Article 14(d) (by applying Tier-III method), become inadequate simply because it is less than a 
certain benchmark price (Tier-I or Tier-II method). The price difference may otherwise be justified 
by market or commercial considerations and the United States' law precludes such an analysis. The United States' approach causes undue prejudic e to the exporting member country as it results 
in determination of benefit even though the rem uneration is 'adequate' under Tier III approach, 
which on stand-alone basis, is consistent with Article 14(d) of the SCM Agreement. The United States law defeats the object and purpos e of SCM Agreement by disturbing the delicate 
                                               
1 WT/DS436/3, dated July 13, 2012  WT/DS436/R/Add.1 
 
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  balance in SCM Agreement between the rights of th ose that sought to impose more disciplines on 
the use of subsidies and those that sought to impose more disciplines on the application of 
countervailing measures.  
6. Also, the comparison approach excludes th e government price itself out of the benefit 
determination, which is contrary to Article 14(d) since the prevailing market conditions includes 
such government transactions.  
7. Further, notwithstanding the above, use of a 'world benchmark price' (Tier II) is permitted 
only as a matter of last resort, in situations wher e the market of the exporting country is distorted 
because of the predominant role of the government  in the market as a provider of the same or 
similar goods. 19 CFR § 351.511(a)(2)(ii) requires the use of a world benchmark price even when 
this requirement is not satisfied. In addition, th e Tier II approach neither requires an assessment 
as to the market conditions in the country of provision or the country from which the benchmark 
price has been used nor does the provision contemplate adjustments that would ensure that the benchmark is in relation to the market conditions in the country in question. At the very least, 
Tier II method cannot be granted preference over the approach that is 'in relation to the prevailing 
market condition in the country of provision'  (Tier III). Accordingly, preference given to 
19 CFR § 351.511(a)(2)(ii) over 19 CFR § 351.511(a)(2)(iii) is inconsistent with Article 14(d).  
B. The United States law contained in 19 CFR § 351.511(a)(2)(iv) is 'as such' 
inconsistent with Article 14(d), 19.3 and 19.4 of the SCM Agreement. 
8. Under 19 CFR § 351.511(a)(2)(iv), the benchmark price determined under 
19 CFR § 351.511(a)(2) (i) or (ii) is required to be adjusted to reflect the price that a firm actually 
paid or would pay if it imported the product which includes delivery charges and import duties. 
However, mandatory use of 'delivered prices' eliminates the possibility of determining the 
adequacy of remuneration after adjusting the benchmark price in accordance with prevailing 
market conditions in the country of provisio n i.e. the terms and conditions of sale and 
transportation prevailing in the country of provision as mandated under Article 14(d) of the 
SCM Agreement.  
9. Further, mandatory use of delivered prices artificially inflates the quantum of benefit and 
countervails the comparative advantage of the country of provision. Moreover, mandatory use of 'delivered price' prevents the application of the co untervailing duty in 'appropriate amount' 'in each 
case' and results in imposition of countervailing duty 'in excess of the amount of subsidy' in 
violation of Articles 19.3 and 19.4 of the SCM Agreement. 
C. The United States laws contained in 19 USC § 1677(7)(G), 19 USC § 1675a(a)(7) 
and 19 USC § 1677b(e)(2) are 'as such' inconsistent with Article 15 of the 
SCM Agreement. 
10. 19 USC § 1677(7)(G), 19 USC § 1675a(a)(7) and 19 USC § 1677b(e)(2) provides for the 
cumulative assessment of volume and effects of subsidized and dumped imports when determining 
material injury during the original investigation, sunset review investigation and other 
investigations, respectively. Cumulation is permitted, if any of the following conditions is satisfied: (i) petitions seeking countervailing duty or anti-d umping duty investigations are filed on the same 
day; (ii) countervailing duty or anti-dumping duty investigations are initiated on the same day; or 
(iii) both (i) and (ii) are satisfied.  
11. Article 15 delineates the requirement for determination of injury in the SCM Agreement. 
Articles 15.1, 15.2 and 15.4 require the examination of positive evidence and injury based on the 
volume and effect of  subsidized imports  on the domestic producers. Article 15.3 is the only 
provision dealing with cumulative assessment of injury that permits cumulation only of imports from countries that are simultaneously subjected to countervailing duty investigations  and not 
cross-code cumulation. Article 15.3 also prescribes certain additional conditions – the rate of 
subsidization in each country must be greater than de minimis  and the volume from each country 
must not be negligible. 19 USC § 1677(7)(G), 19 USC § 1675a(a)(7) and 19 USC § 1677b(e)(2) provide for cumulative assessment even if these conditions are not satisfied.  WT/DS436/R/Add.1 
 
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  12. Article 15.5 requires that there should be a causal link between the subsidized imports  and 
injury caused. Thus, this provision also requires injury assessment with reference to subsidized imports only.  
13. As the United States' provisions under chal lenge provide for cumulation of non-subsidized 
imports also, the said provisions are inconsistent with Articles 15.1-15.5 of the SCM Agreement. 
D. The United States law contained in  19 USC § 1677e(b) and 19 CFR § 351.308(a), 
(b) and (c) are 'as such' inconsistent wi th Article 12.7 of the SCM Agreement. 
14. Article 12.7 permits the reliance on 'facts available' when an interested party or member 
does not co-operate. Various Panel and Appellate Body reports have consistently held that Article 12.7 only permits application of facts that are considered most fitting and appropriate after 
engaging in an evaluative and comparat ive assessment of all available evidence . Article 12.7 is 
neither meant to punish non-cooperation nor permit  determinations based purely on speculation.  
15. In direct contrast to the above requirem ent, in the event of non-cooperation, the 
United States' law permits an inference that is adverse to the interests of a party in selecting from 
among the facts available  (AFA standard). The United States' law does not require the evaluative 
and comparative assessment of all the evidence available and is not directed to determine the best 
available fact. Rather, the purpose behind the provis ion is to penalize non-cooperating parties. In 
any case, the consistent application of the said provision shows that it is a requirement on the 
investigating authority to draw the worst possible inference by imposing the highest possible margin against a non-cooperating party without examining all evidence or engaging in a comparative assessment to determine if it was the most fitting and appropriate information. 
Therefore, the 19 USC § 1677e(b) and 19 CFR § 351.308(a), (b) and (c) are 'as such' inconsistent 
with Article 12.7 of the SCM Agreement.  
E. The United States, as a consequence, ha s acted inconsistently with Article 32.5 of 
the SCM Agreement and Article XVI:4 of the WTO Agreement. 
16. As explained above, the United States ha s failed to ensure consistency of its laws, 
regulations and administrative procedures with  the provisions of the SCM Agreement and has 
thereby acted inconsistently with Article 32.5 of the SCM Agreement and Article XVI:4 of the 
WTO Agreement. 
III. 'AS APPLIED' CLAIMS 
 
F. Imposition of countervailing duty in resp ect of 'Sale of High Grade Iron Ore by 
NMDC' is inconsistent with Articles 1. 1, 1.2, 2 and 14 of the SCM Agreement. 
17. The United States has determined that sale  of high grade iron ore by National Mineral 
Development Corporation (NMDC) amounts to a financial contribution under Article 1.1(a)(1)(iii). 
F i r s t l y ,  t h e  U n i t e d  S t a t e s  d e t e r m i n e d  N M D C  t o  b e  a  ' p u b l i c  b o d y '  s o l e l y  o n  t h e  b a s i s  o f  governmental shareholding of NMDC. Neither the facts nor the reasoning provided by the 
United States clarify how this resulted in the Government of India (GOI) exercising meaningful 
control over NMDC. In any case, there was no determination that NMDC was vested with governmental authority to perform governmental functions or that it was capable of directing or entrusting a private body. Therefore, the United States acted contrary to Article 1.1(a)(1)(iii).  
18. Secondly, the United States wrongly determined that sale of iron ore by NMDC was de facto  
specific on the ground that it was limited to users of iron ore. The United States has failed to appreciate that Article 2.1 is only intended to cover discriminatory  governmental action that 
provides a benefit to certain enterprises over thos e that are otherwise capable of receiving it. The 
United States, however, determined specificity based on the inherent characteristics of the goods in question, a concept alien to Article 2.1. The United States' approach renders the requirement of 
specificity redundant in respect of Article 1.1(a)(1)(iii).  
19. Thirdly, under Article 2.1(c), the phrase 'use of a subsidy program by a limited number of 
certain enterprises' applies only when subsidies are being used by a limited number of those enterprises that are otherwise capable of benefitting from the subsidy in question. The WT/DS436/R/Add.1 
 
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  United States has failed to make such a finding. Further, the United States has also failed to 
analyze mandatory factors listed in Article 2.1(c) while making a determination of 'de facto' specificity. Furthermore, the United States has not based its determination of specificity on positive evidence as required under Article 2.4.  
20. Moreover, in determining that the sale of iron ore by NMDC was for less than adequate 
remuneration, the United States applied 19 CFR § 351.511(a)(2)(i) to (iv) - provisions that are 'as such' inconsistent with Article 14(d). The United States did not assess whether the remuneration 
received by NMDC was adequate for NMDC itself. The United States ignored that NMDC operated 
on 'commercial considerations' and did not dist inguish between domestic and foreign buyers. 
21. Also, the United States conveniently ignore d 'in-country' benchmarks available on record 
without recording any reasons for the same. Instead, the United States resorted to world market 
price and failed to make the necessary adjustments to such world market price in order to reflect 
the prevailing market conditions in India. Further,  by including ocean freight and import duties to 
the benchmark price, the United States countervailed India's comparative advantage of being able 
to locally source iron ore for its industries. The methodology of the United States would always 
result in an excess subsidy margin in breach of its obligation to apply Article 14(d) in good faith.  
22. Further, the United States rejection of NMDC export prices from Tex Report while adopting a 
world benchmark price was also inconsistent with Article 14. Article 14(d) does not allow rejection 
of price charged by government players while determining prevailing market conditions, particularly in the instant case where NMDC was not even a predominant supplier of iron ore and 
was acting in accordance with market principles. Such a determination is also against the chapeau 
of Article 14 because the United States acted arbi trarily by accepting the NMDC export prices in 
one AR and rejecting in another AR.  
G. Imposition of countervailing duty on grant of captive mining rights for iron ore and 
coal is inconsistent with Articles 12.5, 1.1, 1.2, 2 and 14 of the SCM Agreement. 
23. Firstly, the United States' identification of the program as ' captive  mining rights for iron ore' 
is inconsistent with Article 12.5 inasmuch as the GOI does not have distinct frameworks of captive  
mining rights of iron ore as distinguished from mining rights for iron ore or mining rights for 
minerals in general. The United States did not satisfy itself as to the accuracy of the information provided to them. 
24.  Secondly, the United States wrongly determined the grant of 'mining rights for coal and iron 
ore' as amounting to provision of iron ore and coal itself. There is no reasonable  proximate nexus  
between the grant of the mining rights and the ul timate mined iron ore or coal. Therefore, the 
grant of mining rights cannot amount to the 'provision' of the extracted mineral itself. 
25. Thirdly, the evidence on record also indicate s that no 'captive mining rights for coal' were 
granted  'by' GOI to Tata under the provision of Mines and Minerals (Development & Regulation) 
Act, 1957 (MMDR Act) or any other legislation.  
26. Further, the United States' determination of specificity was entirely based on incorrect facts. 
The United States found that 'captive mining righ ts of iron ore' was subject to its own governing 
regulation. This was contrary to the evidence on record. Similarly, the United States found that captive coal mining was open only to 3 industry sectors, whereas coal mining was, in fact, fully 
open to any public sector undertaking. Thus, the determinations as to specificity are contrary to 
Articles 1.2 and 2. 
27. Moreover, for the calculation of benefit, for the both the programs, the United States failed 
to determine whether the remuneration actually received by the GOI was adequate. Instead, the 
United States added the cost of extraction and profit to the royalty charged by the government 
(which by no stretch of imagination can be term ed as remuneration) and compared it with the 
benchmark price for the extracted mineral. The United States' methodology of calculating notional 
remuneration  ensures positive benefit determination in every case and fails to implement its 
obligation in good faith. Also, the United States applied benchmarks in the manner highlighted above in relation to provision of iron ore by NMDC. Such an assessment of benefit is inconsistent 
with Article 1.1(b) and Article 14(d) of the SCM Agreement.  WT/DS436/R/Add.1 
 
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  H. The United States has acted inconsistently  with the Articles 1.1(a)(1), 1.1(b) and 
Article 14 of the SCM Agreement in relation to the SDF Program. 
 28. The United States determined that loans granted under SDF program amounted to financial 
contribution and conferred a benefit. The determin ation rests on the premise that the Joint Plant 
Committee (JPC), the governing body for the SDF program, is under the control of GOI. The United States failed to recognize that JPC is not a 'public body' under Article 1.1(a)(1) since 
majority of the members of JPC are from the indu stry and mere presence of government officials 
cannot change the nature of the body.  
29. Similarly, the determination that SDF managing committee was a public body also rests on 
the incorrect understanding of the term 'public bo dy'. The United States never determined that 
SDF managing committee was given governmental authority to perform governmental functions.  
30. Further, the price increase on steel products used for creating the SDF was not in the nature 
of tax but amounted to producer levies, i.e. voluntary contribution made by the producers, the 
transfer of which cannot amount to a direct  transfer  of funds under Article 1.1(a)(1)(i). There was 
neither a char ge on the public account nor did the GOI have title to these funds.  
31. The United States' subsequent determination that loans granted under SDF program 
amounted to potential  direct transfer of funds under Article 1.1(a)(1)(i) is bereft of any evidence 
or logic and contrary to the ordinary  meaning of Article 1.1(a)(1)(i).  
32. The United States also acted contrary to the chapeau to Article 14 and Article 14(b), in 
relation to the SDF program. The United States applied the Prime Lending Rate (PLR) as the 
benchmark rate, but failed to explain how such a rate could be considered as a 'comparable 
commercial loan' under Article 14(b) as it only reflected the overall reference rate for the banks taking into account their cost structure. The United States further failed to consider the overall 
cost incurred by the exporters to participate in th e SDF program. The fact that overall impact of 
the SDF program reduced the income of the st eel producers and did not place them in a better off  
position was also ignored by the United States, resulting in an inconsistency with Article 1.1(b). 
I. Injury determination by the United Stat es is inconsistent with Article 15 of the 
SCM Agreement. 
33. The injury determination by the United Stat es during the original investigation and the 
sunset review were inconsistent with Article 15 of the SCM Agreement. In the original 
investigation, the United States cumulated imports from eleven countries out of which only five 
countries were subjected to simultaneous countervailing duty investigations. While doing so, the United States did not assess whether the volume of imports from each of the countries was not 
negligible and whether the subsidization rate was above de minimis . Such a determination was 
inconsistent with Articles 15.3. The United States cumulatively assessed the volume and effects of both subsidized and non-subsidized imports in violation of Articles 15.1, 15.2 and 15.4. Effectively, 
the United States attributed injury caused by non-subsidized imports to subsidized imports, in 
breach of its obligations under Article 15.5. Further, the United States also failed to assess certain mandatory injury parameters such as growth, return on investment and ability to raise capital during the original investigation and therefore, failed to fulfill its obligations under Article 15.4. 
34. In the first sunset review also, the United States cumulated the imports from countries 
against which no countervailing duty measures had been imposed. This was inconsistent with its obligations under Articles 15.1 to 15.5.  
J. The application of AFA standard by Th e United States is inconsistent with 
Article 12.7 of the SCM Agreement. 
35. During the ARs, when employing the AFA standard contained in its domestic law, the 
United States consistently applied the highest above de minimis rate of subsidy as determined for 
identical or similar program, or in absence of it, the highest above de minimis  rate for any other 
program involving the same country. Such a rule punishes non-cooperation and hence, is inconsistent with Article 12.7. WT/DS436/R/Add.1 
 
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  36. In addition, the United States acted incons istently with Article 12.7 of the SCM Agreement 
by applying AFA standard in the particular instances listed below: 
 In the 2006 AR, the United States assumed that NMDC sold iron ore for free to Jindal 
Steel Works (JSW), which was contrary to the facts available on record. 
 In the 2006 AR, the United States determined that the State Government of 
Karnataka (SGOK) through Mysore Minerals Lt d (MML), provided subsidies attributable 
to JSW, without any factual foundation. 
 In the 2006 AR, the United States determined that JSW, through Vijayanagar Minerals 
Pvt Ltd (VMPL), received certain benefits from programs administered by the SGOK, 
without any factual foundation. 
 In the 2008 AR, the United States assumed that Tata benefitted from eleven programs 
administered by the State Government of Jharkhand (SGOJ), even though this was 
contrary to the 'facts available' and the determination made by the United States in the 2006 AR.  
 In the 2008 AR, the United States assumed that Tata benefitted from a total of 
55 programs administered by State Governments of Gujarat, Maharashtra, Karnataka, 
Andhra Pradesh and Chhattisgarh without any factual foundation. 
 In the 2008 AR, the United States assumed that  Tata benefitted from the Sale of High 
Grade Iron Ore by NMDC for LTAR, Market Development Assistance Program, Market 
Access Initiative Program and the Special Economic Zones Act, which was contradictory to the information made available by the GOI. 
K. Other inconsistencies. 
37. During each AR, except for 2008 AR, the United States included several new subsidies 
without formally initiating an investigation under Article 11.1, 11.2 of the SCM Agreement and without fulfilling the requirement of public notice  under Articles 22.1-22.2 of the SCM Agreement. 
The United States failed to follow the procedure, which is required for initiation of investigation 
under its own law and thereby failed to follow the required customary  procedural action, which is 
essential to formally initiate  an investigation into such new subsidies.  
38. The United States also failed to invite India for consultations prior to initiation of 
investigation into any of these new subsidies. This is inconsistent with Article 13.1 of the SCM Agreement.  
39. Notwithstanding the above, amongst the new subsidies, which were included in the 
administrative review, the United States investig ated the 'Sale of High Grade Iron Ore by NMDC 
for less than adequate remuneration' and 'Target Plus Scheme' even though no such allegations 
were filed by the petitioner. This is inconsistent with Articles 11.1, 11.2 and 11.9. 
40. Further, ARs are conducted under Articles 21.1 - 21.2 of the SCM Agreement. Under 
Articles 21.1 - 21.2, the United States is only permitted to conduct a ' review ' of previously made 
determinations and not initiate new investigations into subsidy programs for which no earlier 
determinations were made. Therefore, the United States has acted inconsistently with Article 21 by 
expanding the scope of a review  proceeding.  
L. Consequent violation of Articles  19.3 - 19.4 of the SCM Agreement. 
41. Consequent to the inconsistencies mentioned above, the United States has violated 
Articles 19.3 - 19.4 by imposing countervailing duti es in excess of the amount of subsidy and in 
inappropriate amounts, by incorrectly calculating the amount of alleged benefit.  WT/DS436/R/Add.1 
 
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  M. Inconsistencies with Article 22.5 of the SCM Agreement. 
42. Article 22.5 requires that the investigating country shall provide all relevant information of 
fact, law and reasons which have lead to the imposition of the final measure and the reasons for acceptance or rejection of the relevant arguments or claims made by interested parties or 
members. Such instances are listed below:  
 The United States failed to record the relevant facts that led to its determination to 
distinguish between the SDF program and the European Coal and Steel Community 
(ECSC) program. The United States rejected the argument made by the exporter in this regard by stating that SDF was similar to taxation and was compulsory. In fact, 
the SDF program and the ECSC program were similar in all aspects except that ECSC 
was created by way of a treaty whereas th e SDF was created by way of a government 
notification. 
 In case of 'Captive Mining Rights for Iron ore and Coal', the United States, in the 2006 
AR, failed to note the existence of in-country benchmark prices and also the fact that 
there was no separate regulation governing ' C a p t i v e  M i n i n g  R i g h t s  o f  I r o n  O r e ' .  I n  
relation to 'Captive Mining Rights of Coal', the United States failed to note and rebut the historical fact that mining rights were never granted to Tata by the GOI. 
 The United States also did not publish adeq uate reasons to reject the argument that 
NMDC's export prices to Japan could be considered as a relevant benchmark, when 
calculating the alleged benefit from the 'Sal e of High Grade Iron Ore by NMDC'. The 
United States' rejection of the same was not adequately explained. 
N. The United States consequently violat ed Article VI of GATT 1994 and Articles 10, 
32.1 of the SCM Agreement. 
43. To the extent the imposition of counter vailing duties on the subject goods by the 
United States is not in accordance with the SCM Agreement, such imposition is consequently inconsistent with Article VI of GATT 1994 and Articles 10 and 32.1 of the SCM Agreement.  
IV. CONCLUSION 
 44. India considers that the United States has failed to frame laws, regulations and 
requirements that are consistent with its obligations under the above referred agreements. 
Further, the imposition of countervailing duties on the subject goods by the United States is 
inconsistent with its obligations under the above referred agreements. India requests the panel to recommend that the United States withdraw the countervailing duties and amend its laws to bring 
them into conformity with the above referred agreements. 
  
 WT/DS436/R/Add.1 
 
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  ANNEX B-2 
EXECUTIVE SUMMARY OF INDIA'S SUBMISSION AGAINST REQUESTS  
FOR PRELIMINARY RULINGS BY THE UNITED STATES 
I. PRELIMINARY SUBMISSION 
 
1. At the outset, India submits that the scope of the request for preliminary ruling sought by the United States is not entirely clear. On one hand, the United States has only asserted that the 
claims raised by India under Sections XII.C.1 and XII.C.2 of its First Written Submissions (FWS) 
fall outside the panel's terms of reference.
1 However, at another location in its FWS, the 
United States appears to have argued that the claim raised by India at Section XII.C.4 of its 
written submissions is also outside the panel's terms of reference.2 India submits that the alleged 
request for preliminary ruling in relation to India's claim at Section XII.C.4 of its FWS has not been 
properly raised by the United States. Accordingly,  India does not respond to the issues raised by 
the United States with regard to Section XII.C.4 in the instant reply. While clarifying its belief that 
the submissions presented below anyway address the said preliminary objection, India reserves its 
right to file an additional reply in this respect, in the event the panel considers the said issue to have been properly raised. 
II. REPLY TO THE REQUESTS FOR PRELIMINARY RULINGS 
 A. Preliminary objections rais ed by the United States in respect of India's claim in 
Section XII.C.1 and XII.C.2 of the FWS. 
 
2. Article 6.2 of the DSU prescribes three separate requirements in relation to the contents of a panel request: 
 Indicate whether consultations were held;  
 Identify the specific measures at issue; and  
 Provide a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly. 
 3. The United States does not state that India's request under challenge fails to fulfill conditions (1) and (2), above. Rather, the United States has only claimed that India's request for 
establishment of the panel was insufficient to present the problem clearly, with reference to the 
claims made by India in Section XII.C.1 and Se ction XII.C.2 of India's FWS. For the sake of 
convenience, the request under challenge is reproduced herein below: 
Article 11 of ASCM because no investigation was initiated or conducted to determine 
the effects of new subsidies included in the administrative reviews. 
4. For the sake of convenience, the claims referred to in Sections XII.C.1 and XII.C.2 of its 
FWS are reproduced below: 
 The United States violated Articles 11.1-11.2 by initiating investigation into NMDC and 
TPS programs in the 2004 AR even when the written application of the domestic industry did not contain sufficient evidence as to the existence, amount and nature of 
such subsidies. 
 
 The United States violated Article 11.9 by initiating investigation into NMDC and TPS 
programs in 2004, since the written application of the domestic industry did not 
contain sufficient evidence as to the existence, amount and nature of said alleged subsidies. 
 
                                               
1 See, United States' FWS, paras. 3 and 23. 
2 Ibid, para.22. WT/DS436/R/Add.1 
 
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  5. As identified by the United States, the following disconnect allegedly exists between the 
panel request and the claims made in Section XII.C.1 and XII.C.2 of India's FWS: 
 With reference to both claims raised by India, the United States alleges that  
 
In its panel request, India not only fails to identify the relevant 
subparagraph(s) to which its claim might refer, but includes a description of the claim which also fails to identify or reference, even by implication, a 
specific obligation within Article 11.
3 
 
 Once again, with respect to both claims raised by India, the United States alleges that 
 
...[T]hese claims are nowhere referenced in India's panel request, nor does 
the panel request list the specific provisions cited in India's FWS. Accordingly these claims are outside the panel's terms of reference - 
India's panel request failed to reference them or "present the problem 
clearly".
4 
 
 Specifically, with reference to the claim raised in Section XII.C.1, the United States 
alleges that  
...The description included India's panel request was not only insufficient to 
clearly present a problem which India now raises its FWS, the description 
in the panel request would affirmatively lead the reader to believe that the panel request does not include the additional claims raised in its FWS. That 
is, India's panel request alleges that "no investigation was initiated or 
conducted" whereas the additional claims raised allege that the United States erred " by initiating an investigation  into the NMDC program 
and the TPS program in 2004" despite an insufficient written application. 
The sufficiency of evidence in an application is a distinct issue and claim than the issue of whether an investigation was initiated. The distinct nature of the sufficiency of the evidence in an application is demonstrated by the 
fact that it is the topic of a distinct provision of Article 11 from the 
provision cited by India as the basis for its claim concerning the failure to initiate an investigation.
5 
 
6. India submits that the aforesaid objections of the United States are misguided, stemming from its overly narrow and hyper-technical interpretation of India's panel request and its failure to 
appreciate the established legal position on interpretation of panel requests. 
1. Contrary to the United States' assertion, the panel request need not be 
identically worded as the claims raised in the FWS. 
 
7. In paragraph 18 of its FWS, the United States has raised the objection that the identically 
worded claims were absent in India's panel and therefore, such claims are outside the panel's terms of reference. India fails to understand the source of such a proposition as has been raised 
by the United States. Not only does the United St ates fail to support this proposition by the plain 
words of Article 6.2, but it also fails to suppor t this proposition with any jurisprudence. India 
submits that this is an incorrect and incomplete understanding of the requirements of Article 6.2. 
8. Article 6.2 of the DSU only requires that Indi a provide a "brief summary of the legal basis of 
the complaint" such that it is "sufficient to present the problem clearly". The latter requirement h a s  b e e n  i n t e r p r e t e d  t o  m e a n  t h a t  i t  " plainly connects the challenged measure(s) with the 
provisions of the covered agreements claimed to have been infringed ".
6 This only requires India to 
identify the claims  as opposed to the arguments supporting those claims.7 Further while 
                                               
3 United States' FWS, para. 17. 
4 Ibid, para. 18.  
5 See also, United States' FWS, para. 20. 
6 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 162. 
7 Appellate Body Report, EC – Bananas III , para. 141; See also, Panel Report, EC – Approval and 
Marketing of Biotech Products , para. 7.47. WT/DS436/R/Add.1 
 
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  attempting to determine whether the panel request satisfies this requirement, one is required to 
examine the request as a whole and in the light of "attendant circumstances".8 Therefore, if a 
proper reading of India's panel request covers th e challenged claims raised by India, the said 
claims are within the panel's terms of reference.  
2. United States has misconstrued the te rm 'initiating', as used in the panel 
request. 
 
9. It is the understanding of the United Stat es that the problem presented by the relevant 
claim in India's panel request relates to the issue of whether or not an investigation was initiated or conducted at all for new subsidy programs.
9 India submits that this is an extremely narrow and 
acontextual meaning attributed to India's panel request. The United States fails to appreciate that 
the term 'initiated' has a specific meaning pre scribed under footnote 37 of the SCM Agreement. 
Footnote 37 of the SCM agreement reads as follows: 
The term "initiated" as used hereinafter me ans procedural action by which a Member 
formally commences an investigation as provided in Article 11. 
10. The use of the phrase " as provided in Article 11 " in footnote 37, clearly suggests that an 
investigation should commence in a manner provided in Article 11. Considering that the present 
dispute has been raised by India under the SCM Agr eement, the reference to the term 'initiated' in 
its panel request is to be construed in light of footnote 37 to the SCM Agreement. As a matter of 
necessary implication, India's panel request is directed to the manner in which investigations into new subsidy programs were initiated and conducted. The United States admits that the panel 
request must be interpreted as a whole.
10 Therefore, the claims in the request for establishment of 
panel must be read in their context, wherein th e accompanying narrative in the request and the 
provisions of the relevant covered agreement play a material role in interpreting a panel request.11 
The SCM Agreement pervades through the entire pa nel request and therefore, the phrases used in 
the SCM Agreement and the meanings associated therewith provide a relevant context in which 
India's panel request is to be interpreted. Contrary to the accepted proposition of law, the 
United States appears to be reading one phrase or sentence in the panel request in isolation12, 
rather than paying attention to the context of the entire panel request. 
11. Therefore, when India claimed a br each of Article 11 by stating that " no investigation was 
initiated or conducted " in respect of new subsidy programs, India's claim relates to such 
investigations not being initiated, commenced and performed in a manner " provided in Article 11 " 
of the SCM Agreement. This understanding and mean ing as employed by India is further confirmed 
by its FWS inasmuch as the raised claims only focus on the investigations against new subsidies 
not being initiated, commenced and conducted in a manner as provided in Article 11 of the 
SCM Agreement.13 
3. There is no dispute as to th e specific measures at issue. 
 
12. As per the panel request, the specific measures at issue are investigations into new subsidy programs. All the relevant determinations covering the instant investigation are identified in India's panel request.
14 Among these, investigations into new subsidies were commenced and 
conducted in all the ARs, except the 2005 an d 2008 AR. Being its own determinations and 
investigations, the United States is intimately aware of the various new subsidy programs 
                                               
8 Appellate Body Report, US-Carbon Steel , para. 127. 
9 This understanding of the United States' claims fl ows directly from its FWS. See, United States' FWS, 
para. 17. 
That is, the description of the claim raised by India states that Article 11 was breached "because no investigation was initiated or conducted", suggesti ng that the United States failed to initiate or 
conduct an investigation at all with respect to  new subsidies programs. Article 11 governs the 
way in which an investigation must be initiated and performed. But article 11 does not contain an obligation that an investigation be initiated . 
10 See, United States' FWS para. 5 citing the Appellate Body Report, US – Carbon Steel , para. 127. 
11 See, Panel Report, Mexico – Anti-Dumping Measures on Rice , para. 7.31. 
12 Panel Report, US – Poultry (China) , para. 7.39. 
13 See, Appellate Body Report, Australia – Apples , paras. 423-425 (confirming that subsequent 
submissions of a party can be used to confirm th e meaning of the words used in the panel request) 
14 See, India's  request for the establishm ent of the panel, para. 3 and Annex 1. WT/DS436/R/Add.1 
 
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  investigated by them and India's panel request directs itself to all such new subsidy programs. It is 
not in dispute that the NMDC program and the TPS program are two such new subsidy programs, and investigations against them were commenced and conducted in the 2004 AR. It is noteworthy that the United States has not raised an objection in this respect. 
4. The panel request clearly connects the challenged measures with the 
relevant obligations under Article 11. 
 
13. India submits that contrary to the submi ssions of the United States, there is a clear 
identification of the obligations that have been violated by the United States. The United States 
asserts that where a treaty Article contains several distinct legal obligations, each capable of being breached, a cursory reference to such an article does not reveal which one, or more, all those 
obligations is at issue.
15 The United States' suggests that failing to identify the relevant 
subparagraphs of Article 11 is fatal to the re quest filed by India. This is a complete 
misunderstanding of the relevant legal principles consistently applied by various Panels and 
Appellate Body Reports. 
14. As was noted by the Appellate Body in Korea – Dairy16:  
There may be situations where the simple li sting of the articles of the agreement or 
agreements involved may, in the light of attendant circumstances, suffice to meet the 
standard of clarity in the statement of the legal basis of the complaint....  (Emphasis 
Supplied) 
15. The Appellate Body in Korea – Dairy17 found that questions of this nature need to be 
examined on a case-by-case basis. The Panel in EC – Approval and Marketing of Biotech Products 
emphasized that there cannot be a general requirem ent to identify specific clauses or sub-clauses 
within an article, paragraph or sub-paragraph and that each case ought to be analyzed by its own 
peculiar facts.18 In fact, as a factual matter, in US – Lamb19, in EC – Approval and Marketing of 
Biotech Products20 and in Korea – Dairy21, it was ultimately found that the panel request had 
sufficient clarity in light of the attendant circum stances, even though the request merely listed 
only the main Article of the relevant treaty.  
16. This is where the United States has signific antly erred since it has failed to undertake a 
detailed factual analysis on India's panel request. The United States has failed to appreciate the true scope of India's panel request. India's panel request covers violations of all obligations in 
Article 11, barring those that are obviously and logically inapplicable to the case at hand and 
therefore, the United States' objection simply relates to India's discretion to only claim a sub-set of violations in its FWS.  
17. The wordings of India's panel request delineate that the violations are with reference to 
Article 11 and that the violations relate only to those obligations dealing with the initiation and 
conduct of the investigations. As a further limitation, the panel request clarifies that among the 
various measures at issue identified in India's panel request
22, only those relating to the 
investigations into new subsidy programs  are the specific measures at issue. India submits that 
these limitations are plainly present in the panel request and result in the following logical conclusions: 
 First, since none of the measures at issue as identified in India's panel request
23 relate 
to products imported through an intermediate country, Article 11.8 of the SCM Agreement is obviously inapplicable and not covered within the scope of India's 
panel request. 
                                               
15 See, United States' FWS, para. 16. 
16 Appellate Body, Korea – Dairy , para. 124. 
17 Ibid. 
18 Panel Report, EC – Approval and Marketing of Biotech Products , Preliminary Ruling, paras. 78-79. 
19 Panel Report, US – Lamb , paras. 5.18-5.31. 
20 Panel Report, EC – Approval and Marketing of Biotech Products , Preliminary Ruling, paras. 78-79. 
21 Appellate Body, Korea – Dairy , paras. 129-131. 
22 See, India's request for the esta blishment of the panel, para. 3. 
23 See, Ibid, para. 1 and Annex 1. WT/DS436/R/Add.1 
 
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   Second , since none of the measures at issue as identified in India's panel request24 
involve the United States initiating a suo moto  investigation, Article 11.6 of the 
SCM Agreement is obviously inapplicable and not covered within the scope of India's panel request. 
 
 Third, the violations relate only to those obligations governing the initiation and 
conduct of such specified investigations . Therefore, the panel request excludes 
Articles 11.10 and 11.11 of the SCM agreement since they do not relate to the 
initiation and conduct of the investigation.  
18. India submits that even if not expressl y disclaimed, the above exclusions are not ex post 
facto argumentative constructs; rather, they flow necessarily and directly from the words used in 
the panel request as a matter of common sense. Barring the above obvious exclusions that flow as a matter of necessary implication, the panel request is intended to cover the violation of all the 
other sub-paragraphs under Article 11. While in its FWS
25 India chose to elaborate upon only three 
specific provisions contained in Article 11, i.e. Articles 11.1-11.2, 11.9 of the SCM agreement, the remaining subparagraphs of Article 11, i.e. sub-paragraphs (3), (4), (5), (7) of the 
SCM agreement have also been breached in the following manner: 
 In the 2004 AR, the application of the domestic industry contained no allegation or 
evidence that NMDC sold iron ore for less th an adequate remuneration or that the GOI 
was granting a subsidy in the form of the TPS program. Yet, the United States 
initiated investigations in respect of these two programs in its 2004 AR. Consequently, 
the United States did not review the accura cy and adequacy of the evidence provided 
in the application to determine whether the evidence is sufficient to justify the 
initiation of an investigation into whether NMDC sold iron ore for less than adequate 
remuneration or whether the GOI was granting a subsidy in the form of the TPS program. This is in breach of Article 11.3 the SCM agreement. 
 
 By the plain words of article 11.4 of the SCM agreement, the United States had an 
obligation to examine and verify whether the application for investigating into the new subsidy programs was filed "by or on behalf of the domestic industry". In all the ARs, 
except those conducted in 2005 and 2008, where the United States initiated 
investigations into new subsidies, it could have done so only if the application was filed by domestic producers whose collective output constitutes more than 50 per cent 
of the total production of the like product produced by that portion of the domestic 
industry expressing either support for or opposition to the application. Investigation into new subsidy programs could not have been initiated by the United States if the 
domestic producers expressly supporting the application account for less than 
25 percent of total production of the like pr oduct produced by the domestic industry. 
However, the United States never undert ook to make a determination on this 
requirement before initiating and conducting investigations into new subsidy 
programs. This is in breach of Article 11.4 of the SCM agreement. 
 
 At the time when investigations were initiated against new subsidies during the 
administrative reviews, United States did not consider the effects of such new 
subsidies the alleged injury arising from such subsidies, if any. On the other hand, Article 11.7 of the SCM Agreement mandates that evidence as to subsidy and injury 
shall be simultaneously  considered in determining whether or not to initiate an 
investigation. However, the procedure adop ted by the United States as regards new 
subsidy allegations does not involve the simultaneous  consideration of both subsidy 
and injury. This is in breach of Article 11.7 of the SCM Agreement. 
 
 In the procedure followed by the United States as regards new subsidy allegations 
filed by the domestic industry, said application filed by the domestic industry is made 
available as part of the public records even before the United States makes a 
determination as to whether investigations are to be conducted for such new subsidies as well. This is breach of Article 11.5 of the SCM Agreement. 
 
                                               
24 Ibid. 
25 See, India's FWS, Sectio ns XII.C.1 and XII.C.2. WT/DS436/R/Add.1 
 
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  19. Therefore, India submits that in addition to the claims raised in Sections XII.C.1 and XII.C.2 
of its FWS, all the aforesaid violations are also covered within the scope of India's panel request. It is again expressly clarified that India chose not to press all these violations in its FWS. The reference to Article 11 in the panel request, duly limited by the phrases 'initiation and conduct of 
investigation' and 'new subsidy programs', was merely a short hand reference to all the aforesaid 
obligations. All that Article 6.2 requires is for India to identify all the obligations that have been breached by the United States; this cannot be translated into a semantic requirement of having to 
refer to specific subparagraphs, if the sum and su bstance of India's claim in the aforesaid panel 
request covers all the subparagraphs and the obligations contained therein. The fact that India chose to claim a sub-set of violations as opposed to entire super-set, cannot reasonably be considered as being fatal to the claim itself.  
20. Furthermore, as was found by the panel in EC – Trademarks and Geographical Indications 
(Australia)
26: 
...However, where the multiple obligations are closely related and interlinked, a 
reference to a common obligation in the specific listed provisions may be sufficient to 
meet the standard of Article 6.2 of the DSU under certain circumstances in a particular case. 
21. Article 11 is titled 'Initiation and Subsequent Investigation' and all the sub-paragraphs of 
Article 11 are closely-related and interlinked. For instance, by the plain words used in the SCM Agreement, sub-paragraphs (1), (2) and (6) are interlinked. Similarly, Article 11.3 and 11.9 of the SCM Agreement are interlinked inasmuch as both relate to the sufficiency of the evidence 
present in the written application. In fact, both Articles 11.3 and 11.9 relate back to Article 11.2 
since Article 11.2 mandates that the written app lication of the domestic industry must contain 
"sufficient evidence" on certain aspects. Similarly, Article 11.4 of the SCM Agreement once again 
makes express reference to Article 11.1 of the SCM Agreement and deals with the locus standi  of 
the person(s) filing the written application under Article 11.2 of the SCM Agreement. Article 11.5 of the SCM Agreement mandates Members to no t publish the written application filed under 
Article 11.2 of the SCM Agreement, until a decision is made on whether an investigation has been 
initiated. India admits that all the aforesaid sub-paragraphs of Article 11 may be independent i n a s m u c h  a s  i t  i s  p o s s i b l e  t o  b e  i n  b r e a c h  o f  o n e  o f  t h e m  e v e n  w h e n  c o m p l y i n g  w i t h  o t h e r s .  However, by no stretch of imagination could anyone dispute that these obligations are closely 
inter-linked and inter-related and together govern the manner in which investigations are to be 
initiated and conducted. This is not disputed even by the United States.  
22. As clarified in the earlier section of this reply, India's panel request claims that all the 
sub-paragraphs of Article 11 in relation to initiation and conduct of investigation have been 
breached when the United States initiated and conducted investigations into new subsidy programs. All the above-identified sub-paragraphs of Article 11 are closely related to one another 
and determine the manner in which investigations are to be initiated and conducted. Therefore, 
India's panel request objectively provides sufficient clarity even if it refers only to Article 11 since there is an explicit reference to obligations concerning 'initiating and conduct of investigation'. Admittedly, India chose to claim only a subset of these violations in its FWS. However, neither 
Article 6.2 nor any other provision in any of the covered agreements can restrict India's right to do 
so. 
23. Therefore, contrary to the United Stat es' preliminary objections, the claims in 
Sections XII.C.1 and XII.C.2 of India's FWS are fully within the scope of the panel's terms of 
reference. 
5. In addition, the due process rights of United States have not been prejudiced. 
 
24. Moreover, as was noted by the Appellate Body in Korea – Dairy , the question as to whether 
the requirements of Article 6.2 of the DSU have been  met, is to be determined taking into account 
whether the ability of the respondent to defend itself was actually prejudiced.
27 However, the 
burden of proving that it has actually been prejudiced as a result of an alleged incomplete panel 
                                               
26 Panel Report , EC – Trademarks and Geograph ical Indications (Australia) , para. 7.2.35. 
27 Appellate Body Report, Korea – Dairy , para. 127. WT/DS436/R/Add.1 
 
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  request is upon the United States.28 The United States has failed to substantiate the manner in 
which it has been prejudiced apart from making conclusory statements. In fact, a perusal of United States' FWS shows that it has been in a position to file detailed responses to the said claims. The claims covered by India in Sections  XII.C.1 and XII.C.2 of its FWS only refer to 
determinations already made by the United States  and only refers to documents made publicly 
available by the United States. Therefore, India is surprised that United States even raises a 
preliminary objection that its due process rights have been violated. 
25. Further, the law is indeed settled that compliance with the requirements of Article 6.2 must 
be determined on the merits of each case, after considering the panel request as a whole, and in 
the light of 'attendant circumstances'.29 The Panel in US – Lamb  has expressly recognized the 
consultations held between the parties, including th e written questions circulated at that stage, as 
one of the materially relevant 'attendant circumstances'.30 After referring to these, the panel in 
US – Lamb  was of the view that " the questions contained in the above lists are quite detailed and 
thus provide considerable insight into complainants' allegations concerning specific obligations 
under specific paragraphs and subparagraphs of SG Articles 2, 3 and 4 "31 and accordingly, 
dismissed the objection that the panel request in that case failed to fulfill the requirements under 
Article 6.2. Similarly, a reference to the consultations request filed by India on the instant dispute 
would show that India was concerned with the manner in which investigations initiated and 
conducted by the United States, against new subsidie s. A reference to the list of questions filed by 
India during consultations, particularly, questions 148 and 152, would show that India was 
concerned with whether the written application by the domestic industry contained sufficient 
evidence for the United States to have initiated and commenced investigation into such new 
subsidies. Clearly, these events show that the claims raised in Section XII.C.1 and XII.C.2 of 
India's FWS have always been part of what was covered within India' claims in relation to 
Article 11. Therefore, it is not the case that th e United States was completely unaware that India 
would raise claims in relation to sufficiency of evidence for commencing investigations into new 
subsidies. 
26. In view of the above, consistent with WTO ju risprudence in this respect, to the extent the 
United States has actually not suffered any prejud ice in terms of its due process rights and its 
ability to defend itself, the United States' preliminary objection under Article 6.2 ought to be 
dismissed. 
B. Preliminary objections raised by the Unit ed States in respect of India's claim in 
Section XI.A.9 of the FWS 
 
27. The United States argues that the claims regarding 2013 Sunset Review are outside the 
terms of reference for panel because they were not included in the India's request for consultations or India's request for establishment of panel. India submits that the objections by 
the United States stem from the failure of United States to appreciate the established 
jurisprudence in this regard. 
28. India submits that its panel request has clearly pre-empted the preliminary objection raised 
by the United States. Paragraph 5 of India's panel request is unambiguous and states that the 
panel request "covers all the amendments, implementing acts, or any other related measure in 
connection with the measures referred herein". The measures referred in Paragraph 3 and 4 read 
with Annex 1 covers not only the provisions of United State's law but also all the determinations 
and orders issued by the United States. The 2013 Sunset Review determination is clearly a 
determination by the United States, which amend the determinations expressly under challenge in the panel request.  
29. The Panel's attention is invited to EC – Selected Customs Matters , wherein the European 
Communities challenged the Panel's interpretation in respect of "steps and acts of administration that predate or post-date the establishment of a panel".
32 The Appellate Body in the same dispute 
made the following observations while discussing the exceptions to the general rule that the 
                                               
28 Ibid, para. 131. 
29 Appellate Body Reports, US – Carbon Steel , paras.125-127 and Korea-Dairy , para. 124. 
30 Panel Report, US - Lamb , paras. 5.32 - 5.34. 
31 Ibid. 
32 Panel Report, EC – Selected Customs Matters, para. 7.37. WT/DS436/R/Add.1 
 
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  measures in a panel's terms of reference must be measures in existence at the time of the 
establishment of the panel: 
"We begin our analysis by recalling the Appellate Body's statement in EC – Chicken 
Cuts: 
The term 'specific measures at issue' in Article 6.2 suggests that, as a general rule, 
the measures included in a panel's terms of  reference must be measures that are in 
existence at the time of the establishment of the panel. (footnote omitted) 
This general rule, however, is qualified by at least two exceptions. First, in Chile – 
Price Band System , the Appellate Body held that a panel has the authority to examine 
a legal instrument enacted after the establishment of the panel that amends a measure identified in the panel request, provided that the amendment does not 
change the essence of the identified measure. 
……………. 
30. In Chile – Price Band System , the Appellate Body addressed the issue raised by 
United States in the present dispute, i.e. whether the amendment of a measure enacted after the 
Panel had been established may be considered as within the Panel's terms of reference. The Appellate Body determined that "the amendment at  issue should be considered as part of the 
measure at issue since it clarified the legislation that established the measure at issue and did not 
change the original measure into something different than what was in force before the amendment".
33 The Appellate Body explained as follows34: 
[I]f the terms of reference in a dispute ar e broad enough to include amendments to a 
measure – as they are in this case – and if it is necessary to consider an amendment 
in order to secure a positive solution to the dispute – as it is here – then it is appropriate to consider the measures as amended  in coming to a decision in a 
dispute. 
31. In Colombia – Ports of Entry , the Panel agreed with the Appellate Body's rationale in Chile – 
Price Band System  and stated as follows
35: 
The Panel agrees with the Appellate Body's rationale. In the dispute before the Panel, 
Colombia enacted the aforementioned Re solutions 11414, 11412 and 11415 after the 
Panel was established. In the Panel's view, the terms of the Panama's request for establishment include the relevant amendments and replacements. The Panel 
therefore finds that Resolutions 11414, 11412 and 11415 are properly part of the 
measure at issue and within the Panel's terms of reference. In the Panel's view, a failure to consider these additional resolutions would inhibit the Panel from securing a 
positive solution to the dispute. 
32. Further, the Panel in EC – IT Products , addressed the issue of using the phrase "any 
amendments, or extensions and any related or implementing measures"  in a panel request. In 
addressing this issue, the Panel noted that wh ile the mere incantation of the phrase "any 
amendments, or extensions and any related or implementing measures" in a panel request does not permit Members to bring in measures that were  clearly not contemplated in the panel request, 
the phrase is a useful tool to include certain amendments and prevent the possibility that the 
procedural requirements of WTO dispute settlement result in a situation where measures could 
completely evade review. The Panel stated as follows
36: 
We note that the complainants incorporated the phrase 'any amendments, or 
extensions and any related or implementing measures' into their joint Panel request. 
We recall that the complainants, in the joint Panel request, identifies as the specific measure at issue Council Regulation No. 2658/87, 'as amended'  (emphasis added). 
                                               
33 Appellate Body Report, Chile – Price Band System, paras. 137 and 138. 
34 Ibid. 
35 Panel Reports, Colombia – Ports of Entry, paras. 7.53-7.54 and EC – Fasteners (China),  para. 7.34. 
36 Panel Report, EC – IT Products, para. 7.140. WT/DS436/R/Add.1 
 
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  While we do not consider that the mere in cantation of the phrase 'any amendments, 
or extensions and any related or implementing measures' in a panel request will permit Members to bring in measures that were clearly not contemplated in the Panel request, it may be used to refer to measures not yet in force or concluded on the date 
of the panel request, or measures that the complainants were not yet aware of, such 
as government procedures not yet published that have the same essential effect as 
the measures that were specifically identified. This is to prevent the possibility that 
the procedural requirements of WTO dispute settlement result in a situation where 
measures could completely evade review. This  is especially true with the type of 
measures we have before us, which ar e amended annually. (Footnotes omitted) 
33. The instant case squarely fits the scenario where the sunset review determination is merely 
a measure that amends the determinations already under challenge in India's panel request. 
Countervailing duties are reviewed annually by the United States and the SCM Agreement mandates a sunset review every five years and the 2013 Sunset Review is one such review 
contemplated under the SCM Agreement. The 2013 Sunset Review Determination does not change 
the nature of the measure under challenge – the imposition of countervailing duties on the subject products from India. Second, it is also not the case that India has raised different violations or 
claims in relation to the 2013 Sunset Review. Rather, only subsets of the violations alleged against 
the measures identified in the panel request are reiterated in respect of the 2013 Sunset Review 
as well. Further, agreeing to the United States' preliminary objection would permit the United States to actively evade review and not allow a positive resolution of the dispute on a 
purely technical point. This is because even if all the expressly identified determinations imposing 
countervailing duties in the subject investigation are declared inconsistent by the WTO dispute settlement system, the United States would continue applying these duties through similar annual 
and sunset reviews. The requirements of Article 6.2 of the DSU cannot be interpreted in such a 
manner where one can lose sight of the object of the DSU itself, i.e. efficient settlement of disputes.  
34. In view of the above, the request for prelimin ary ruling by the United States is not tenable 
and liable to be rejected.  
35. In addition, India also submits that the Pa nel is not bound to rule on the preliminary 
objections raised by the United States at this juncture. The past Panels and Appellate Body have 
recognized that the "DSU does not expressly envision preliminary rulings by panels, it has become 
an occurrence in the past few years".
37 However, as the Panel in Canada – Aircraft  observed, 
"there are numerous panel reports where rulings on preliminary issues have been reserved until 
the final report " and there " may be cases where the panel wishes to seek further clarification from 
the parties before providing a preliminary ruling ".38 As highlighted above in paragraph 1 of these 
submissions, the United States' request for preliminary ruling is unclear at certain places, 
hyper-technical at other places and plainly incorrect with respect to 2013 Sunset Review claims. 
Further, none of the preliminary objections raised by the United States require any immediate disposal since its due process rights in being able to defend itself has not been prejudiced in anyway. In view of the above, United States ha s failed to provide substantial justification for 
seeking an immediate disposal of its objections and India requests the Panel to reserve its findings 
with respect to preliminary objections raised by the United States until the final report. 
                                               
37 Panel Report, Colombia – Ports of Entry , para. 7.13. 
38 Panel Report, Canada – Aircraft, para. 9.15. WT/DS436/R/Add.1 
 
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  ANNEX B-3 
EXECUTIVE SUMMARY OF THE ORAL OPENIN G STATEMENT OF INDIA - FIRST MEETING 
Mr. Chairman and distinguished members of the Panel 
 
1. The present dispute raises certain serious issu es of interpretation of the WTO Agreement on 
Subsidies and Countervailing Measures (S CM Agreement), the GATT 1994 and the WTO 
Agreement, having systemic underpinnings. India considers that the manner in which the 
United States conducts countervailing duty investigations undermine the basic foundation of the 
SCM Agreement. In India's view, the imposition of WTO inconsistent countervailing duty ("CVD") 
measures since 2001, have had a significant adverse effect on India's exports of Hot Rolled Carbon Steel Flat Products to United States. The value of exports of the products subjected to 
CVD measures has drastically come down after imposition of the measures. 
 2. In this opening statement, I would like to highlight only some of our claims due to paucity of 
time.  
 Let me start with the first 'as such' claim: "The hierarchical structure of determining 
'adequacy of remuneration" 
 3. The United States follows a three-tiered benchmark approach under 19 CFR § 351.511(a)(2)(i) to (iii), while determining the adequacy of remuneration for provision of 
goods or services by the Government. India is of the view that the ordinary language of 
Article 14(d) suggests that 'adequacy of remuneration' must first be determined in relation to the provider of goods and only when the remuneration is found to be inadequate to the provider of 
goods, the question of calculating the amount of benefit to the recipient arises. The hierarchical 
and comparison based approach in the United States law ignores this two-step approach in-built in Article 14(d) and instead, directly seeks to measur e the extent of benefit to the recipient of the 
goods by comparing the government price with  the benchmark price, without assessing the 
adequacy of the impugned price to the provider of the goods. 
 4. Further, India maintains that the provision of goods cannot  be considered as conferring a 
'benefit' merely because it is priced at less than a benchmark price within or outside the country. 
The United States' law fails to consider whether such price differences are justified by 'commercial considerations'. The fact that the identical set of factors have been included in Article XVII of the 
GATT to define 'commercial considerations' and 'prevailing market conditions' in Article 14(d) of 
the SCM Agreement, cannot be a mere co-incidence having no significance whatsoever.   
5. The United States, in its submissions, however, completely misses the point, by 
mischaracterizing India's claim as simply a reference to the 'cost to government' approach – an approach rejected by the Appellate Body earlier. India maintains that whereas the benefit  is to be 
calculated in relation to the recipient, the adequacy of remuneration  m u s t  b e  d e t e r m i n e d  i n  
relation to the provider of the goods. The United  States argues that India's interpretation will 
result in Article 14(d) not having any method of calculating benefit.
1 The United States appears to 
assume that Article 14(d) must prescribe a specific method to calculate benefit. A comparison of 
Article 14(d) with Articles 14(a)-(c) does not support such an assumption. Articles 14(b) and (c) 
clearly state that the method to calculate benefit is to take a 'comparable' and the difference between the rate in question and the 'comparable' is determined to be the amount of benefit. The 
last sentence of both Articles 14(b) and (c) ensure this precise calculation method. This is not the 
case with Article 14(d) or Article 14(a). In fact, even in the context of Article 14(a), the Panel has 
already ruled that it does not prescribe any specific method to calculate benefit
2, unlike 
Articles 14(b)-(c).  
 
                                               
1 United States FWS, at para. 47. 
2 Panel Report, EC – Countervailing Measures on DRAM Chips , paras. 7.177, 7.211. WT/DS436/R/Add.1 
 
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  6. Even the United States admits that the term 'remuneration' means something different from 
'benefit'.3 Yet, apart from generally disagreeing with India's submissions, the United States has 
failed to give the meaning and implications of the term 'remuneration'. The United States has only made a vague statement that the terms 'remuneration' and 'benefit' are related. The United States 
neglects the fact that the Appellate Body, in US – Softwood Lumber IV  has explicitly held that "a 
benefit is conferred when a government  provides goods to a recipient and, in return, receives 
insufficient payment or compensation for those goods ".
4 
 
7. Second, the United States, incorrectly, one may add, has placed reliance on the findings of the Appellate Body in US – Softwood Lumber IV , where in-country prices were considered as 
benchmarks to calculate benefit under Article 14(d).
5 India clarifies that the present claim raised 
by India, i.e. the distinction between calculating benefit  and determining adequacy of 
remuneration , however, was never before the Appellate Body in that case and accordingly, the 
Panel is being requested to decide upon an argument that has so far not been argued before, or 
rejected by, the Panel or the Appellate Body. Even if the Panel in this case were to consider the 
Appellate Body's findings to reflect a proposition of law that applies beyond the issue presented therein, India believes that the Appellate Body me rely hinted at the use of in-country private 
prices as a starting point.  
 8. In addition, the United States' law permitting  the use of world market price as a benchmark 
in the absence of Tier-I price or in-country price also violates the requirement that the adequacy of 
remuneration be measured in relation to the market conditions in the country of provision . The 
United States appears to be under the impression that the phrase " …in the country of provision " in 
Article 14(d) can be twisted or ignored.
6 However, the use of the word 'shall' in the chapeau of 
Article 14 clearly denotes that the United States does not have the freedom to ignore Article 14(d) 
and this limitation is clearly recognized by the Appellate Body as well.7 
 
9. India believes that the United States' rebutta l on the issue of Tier-II prices misquotes the 
findings of the Appellate Body in US – Softwood Lumber IV . First, the Appellate Body has ruled 
that use of out-of-country prices is permissible only in very limited cases where the in-country 
prices are all influenced by predominant government presence.8 The Appellate Body did not 
provide for any other circumstance where out of country benchmarks can be used. The 
United States' law completely ignores this limitation prescribed by the Appellate Body. The United States' rebuttal seems to be that "world market price reflect prevailing market conditions 
because world market prices are generally available in any country, particularly when the input at 
issue is a commodity product like iron ore or coal".
9 This obviously ignores the very fact that use of 
out-of-country prices is permitted only in the rarest of rare cases. To this extent, the Tier-II pricing 
followed by the United States violates Article 14(d).  
 10. Second, the United States has the obligation to make adjustments to reflect prevailing market conditions because there is no presumption that out of country benchmarks reflect 
prevailing market conditions
10 in the country of provision. The Appellate Body has also ruled that, 
at a minimum, these adjustments should account for the difference in the market conditions 
relating to the factors listed in Article 14(d).11 
 
11. Worse yet, the United States gives preference to such world market prices over its Tier-III 
method, which is admittedly grounded on the mark et conditions prevailing in the country of 
provision. Even in its FWS, the United States has completely failed to explain why Tier-II has to be 
placed before Tier-III. On the one hand, the United States admits that Tier-III method is compliant with Article 14(d)
12 and for obvious reasons, the Tier-III method, as explained in detail in the 
United States' internal domestic documents13, relates to the market conditions prevailing in the 
                                               
3 United States FWS,  at paras. 44-45. 
4 Appellate Body Report, US – Softwood Lumber IV , para. 84. 
5 United States FWS, at para. 40. 
6 See, United States FWS, para. 38. 
7 Appellate Body Report, US – Softwood Lumber IV , para. 92. 
8 Ibid. paras. 90, 101-102. 
9 United States FWS, para. 34. 
10 Appellate Body Report, US – Softwood Lumber IV , paras. 108-109. 
11 Appellate Body Report, US – Softwood Lumber IV , paras. 106, 108. 
12 United States FW S, paras. 64-65. 
13 See, India's FWS, paras. 30-32. WT/DS436/R/Add.1 
 
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  country of provision. Yet, on the other hand, the Un ited States' law prefers Tier-II over the Tier-III 
approach. India is of the view that such an approach is unjustified in terms of Article 14(d) of the SCM agreement. 
12. Therefore, the United States law contained in 19 CFR § 351.511(a)(2)(i) to (iii) is 
inconsistent with Article 14(d) of the SCM Agreement. 
 Let me now move on to the second 'as such' claim: "Mandating comparison with 
benchmark at 'delivered prices' level". 
 13. Under 19 CFR § 351.511(a)(2)(iv), the benchmark price determined under Tier I or Tier II is required to be adjusted to reflect the price that a firm actually paid or would pay if it imported the 
product. The adjustment will include delivery ch arges and import duties. This mandate applies 
even if the government price in question does not include such delivery charges. India observes 
and the United States acknowledges that this 'adjustment' is a mandatory requirement on the 
investigating authority to add, where the price under challenge is ex works  price, all associated 
delivery charges to the price to such ex works  price.
14 In order to effectuate an 'apples-to-apples' 
comparison, the United States also adds, where absent, all delivery charges to the benchmark 
price as well. United States applies this approach even for private in-country benchmarks and this 
is not disputed by the United States.   14. Such mandatory use of 'delivered prices' violates the United States' obligation to consider 
the 'prevailing market conditions' in the country of provision. Even where the prevailing 'conditions 
of sale' for the transaction of the goods in question do not include transportation or other delivery charges, such as when goods are being transacted on an ex-works  basis, the United States law 
mandates its investigating authority to ignore these market conditions. India believes that this 
method allows the United States to consider something more than the actual remuneration  
received by the provider of the goods, which disregards the plain words of Article 14(d).  
 
15. India further submits that this approach also results in the artificial inflation of the quantum 
of 'benefit' where the benchmark relates to im ported or out-of-country prices, wherein the 
United States includes ocean freight, local freight and import duties to the benchmark price, while 
including only domestic freight and local duties to the price under challenge. In effect, the 
United States ends up finding a 'benefit' to the extent of ocean freight. The 'comparative advantage' of India in using locally available goods without having to bear the risk and expense of 
international transactions are countervailed in this process. The United States' law is clearly not in 
good faith compliance with Article 14(d).  
16. The United States defends the provision that this approach ensures that the comparison is 
being made at the same level of the distribution chain.
15 India fails to understand why accurate 
comparisons cannot be made at ex works  level itself. The United States also claims that delivered 
prices reflect the true cost to the producer in obtaining the goods in question.16 However, the 
United States cannot choose to engage in a comparison at a delivered prices level in all cases, 
irrespective of the conditions of sale prevailing in the country of provision.  
17. Therefore, the United States' provision in question violates Articles 14(d) and 19.3-19.4. 
 The third 'as such' claim relates to the "Cumulation of subsidized and non-subsidized 
imports to determine inju ry in CVD proceedings". 
 18. The United States law under challenge provides for the cumulative assessment of volume and effects of imports of the products in question from all countries in the original investigation, 
sunset reviews and other reviews. India wishes to make it abundantly clear that the cumulation of 
imports from countries that are subjected to countervailing duty and also antidumping duty 
investigations simultaneously is not under challenge. India is only challenging cumulation of such 
imports with imports from countries not subjected to simultaneous countervailing duty 
investigations.   
                                               
14 United States FWS, para. 80. 
15 United States FWS, para. 80. 
16 United States FWS, para. 78. WT/DS436/R/Add.1 
 
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  19. Article 15 of the SCM Agreement governs dete rmination of injury in CVD proceedings and 
Articles 15.1, 15.2 and 15.4 require the examination of positive evidence and injury based on the 
volume and effect of  subsidized imports  on the domestic producers. Article 15.3 is the only 
provision dealing with cumulative assessment of injury, limiting the right of an investigating 
authority to do so only for imports from countries simultaneously subjected to countervailing duty 
investigations. Article 15.3 also prescribes certain additional conditions – the rate of subsidization 
in each country must be greater than de minimis  and the volume from each country must not be 
negligible.  
 20. Contrary to this limitation in Article 15.3, th e United States law requires that while assessing 
injury in a CVD investigation, imports even from countries not subject to CVD investigations would 
be cumulated. In addition, this cumulative assessment is undertaken even if the conditions 
prescribed under Article 15.3 are not satisfied. This  cumulated set of imports is then utilized by the 
United States in assessing the causal link, which obviously results in the attribution of injury 
caused from non-subsidized imports to subsidized imports.  
 21. The United States also offers no textual support to substantiate its arguments. Per contra,  
Article 15.1 to 15.5 expressly provides that all in jury related determinations are made only in 
relation to ' subsidized imports ' and nothing more. Therefore, the United States' provisions relating 
to cumulation of non-subsidized with subsidized imports violate Articles 15.1-15.5 of the SCM Agreement.  
 
The last of the 'as such' claims deals with  t h e  U S  l a w  p e r t a i n i n g  t o  ' A d v e r s e  F a c t s  
Available' 
 
22. The United States' law permits an inference that is adverse to the interests of a party in selecting from among the facts available  (AFA standard). The United States' law does not require 
the evaluative and comparative assessment of all the evidence available and is not directed to 
determine the best available fact. Rather, the purpose behind the provision is to penalize 
non-cooperating parties which is against the findings of the Appellate Body in Mexico – 
Antidumping measures on Rice . The United States' attempts to take safe harbor in the fact that 
their provision is worded in a manner that grants discretion in drawing adverse inferences and that 
such discretionary laws cannot be challenged 'as such'.
17 What the United States fails to realize is 
that the Appellate Body in US – Corrosion-Resistant Steel Sunset Review18, has expressly rejected 
such an argument. India believes that the very gr ant of discretion with the purpose of penalizing 
non-cooperation is in violation of Article 12.7 of the SCM Agreement.   
23. Further, the United States argues, at one instance, that India may have apparently 
challenged the approach  of the United States in applying its AFA provisions
19 and at another 
instance, that India may be challenging an alleged "practice"20 of the United States. India wishes 
to clarify that it is challenging the United States' AFA provisions as such and not the United States' 
approach or practice. While the United States is correct in referring to the Appellate Body findings 
in US – Zeroing (EC) , which stands for the proposition that a rule or norm having general and 
prospective application may be challenged 'as such'21, the United States fails to realize that in the 
very same case, the Appellate Body has held that evidence to prove the existence of such rule or 
norm may include proof of the systematic application of the challenged rule or norm.22 The 
Appellate Body, in other cases, has accepted the use of systematic application of the challenged 
rule or norm as well. In its FWS, India referred to the systematic application of AFA standard by 
the United States in every case. In its FWS, the United States affirmatively states that its investigating authority does not follow a consistent practice in the manner asserted by India.
23 
This is contrary to the facts. In the 34 other cases in which countervailing duty measures are 
currently in force in the United States, it made at least 83 determinations that interested parties 
did not act to the best of their abilities. In ever y one of those 83 determinations, the United States 
                                               
17 United States FWS, paras. 163-166. 
18 Appellate Body Report, US – Corrosion-Resistant  Steel Sunset Review , paras. 87-89. 
19 United States FWS, para. 196. 
20 Ibid. paras. 208-211. 
21 Ibid. paras. 200-201. 
22 Appellate Body Report, US – Zeroing (EC) , para. 198. 
23 United States FWS, para. 206. WT/DS436/R/Add.1 
 
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  applied the AFA Standard.24 Further, in its FWS, the United States quotes 3 instances in which AFA 
standard was not applied by it. A perusal of those 3 cases indicates to the contrary.  24. Thus, the AFA provisions contained in the United States' law exceed what is permissible 
under Article 12.7 of the SCM Agreement. 
 Let me move on to the 'as applied' claims at this stage. The first 'as applied' claim 
relates to the imposition of countervailing duty in respect of 'Sale of High Grade Iron Ore 
by NMDC.  25. The United States has determined that sale  of high-grade iron ore by National Mineral 
Development Corporation (NMDC) amounts to a financial contribution. The United States also 
determined NMDC to be a 'public body' solely on the basis of governmental shareholding of NMDC. Neither the facts nor the reasoning provided by the United States clarify how this resulted in the 
Government of India (GOI) exercising meaningful control over NMDC. There was also no 
determination that NMDC was vested with gove rnmental authority to perform governmental 
functions or that it was capable of directing or entrusting a private body.  
 
26. India is of the view that the Appellate Body 's interpretation of the term 'public body' in US – 
Anti-Dumping and Countervailing Duties (China) is indeed dispositive to the case at hand. While 
cursorily stating that its submissions are in line with the principles enunciated in US – 
Anti-Dumping and Countervailing Duties (China) , it is the United States that has attempted to 
re-agitate the exact same points rejected by the Appellate Body in that case.  
27. The United States' approach in determining 'public body' fundamentally ignores the idea that 
governments can, and consistently do, operate in realms that are private apart from the public realm or realms that may be a mix of both.
25 The GATT and the SCM Agreement are intended to 
govern only those governing the public realm an d the Appellate Body has evolved the test of 
'governmental functions' as a method to determine areas that do not concern the 'public realm'. India believes that setting-up commercial enterprises like NMDC involve the government operating in the private realm and such commercial enterprises are not intended to be 'public bodies'.  
 
28. Secondly, the United States wrongly determined that sale of iron ore by NMDC was de facto  
specific to the steel industry on the ground that it was limited to users of iron ore, including the 
steel industry. The United States mistakenly believes that this single sentence determination is 
sufficient to fulfill its obligations under Articles  1.2 and 2.1 of the SCM Agreement. India believes 
that Article 2.1 is only intended to cover discriminatory  governmental action that provides a 
benefit to certain enterprises over a comparative set consisting of entities that are otherwise 
capable of receiving it. The United States' approach makes it impossible to find the provisions of any good or service (which are not general infrastr ucture) to be non-specific and to that extent, 
Articles 2.1 and 1.2 are rendered redundant in context of financial contributions in the form of 
provision of goods. Therefore, the interpretation given by the United States is incorrect. 
 29. Finally and most critically, the manner in which the United States determined and calculated 
the benefit in this case highlights the absurd results flowing from the application of 
19 CFR § 351.511(a)(2)(i) to (iv) – provisions that India considers are 'as such' inconsistent with Article 14(d). Starting with the premise that the NMDC prices were anyway tainted, the 
United States ignored uncontroverted facts on reco rd showing that NMDC operated on 'commercial 
considerations' offering iron ore at the same price (subject to exchange rate fluctuations) to both domestic and foreign buyers. Evidence also suggested that NMDC was operating at profit levels greater than other private players, clearly proving that NMDC prices were more than adequate to 
NMDC itself. Yet, the tiered approach forces the United States to turn a blind eye to all of this. 
Adding further to this incorrect approach, the United States concluded that there were no in-country benchmarks available for Tier-I method to be applicable, even though 'in-country' 
benchmarks were actually made available on record. It may be noted that the United States has 
attempted to improve upon its findings in its FWS by citing reasons for not using the available 
                                               
24 See, USDOC's determinations in CVD cases C-489-502, C-507-501, C-507-601, C-533-844, 
C-533-849, C-552-813, C-560-824,  C-570-911, C-570-913, C-570-915, C-570-917, C-570-921, C-570-923, C-570-926, C-570-931,  C-570-936, C-570-938, C-570-940, C-570-942, C-570-944, C-570-946, C-570-948, 
C-570-953, C-570-955, C-570-957, C-570-963, C-570-966, C-570-968, C-570-971, C-570-978, C-570-980, 
C-570-982, C-570-984, C-580-869. 
25 See, Appellate Body Report, Canada – Feed-In Tariff Program , para. 5.61. WT/DS436/R/Add.1 
 
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  'in-country' benchmarks, though such reasons were not found in the relevant findings. It may be 
added that the reasons given at this stage are also flimsy, to say the least.   30. Instead, the United States resorted to world market price, i.e. Tier-II approach, and failed to 
make necessary adjustments to such world market price in order to reflect the prevailing market 
conditions in India. In view of their mandate under their domestic law to make the comparison at the delivered price level, the United States also included ocean freight and import duties to the 
benchmark price (while adding only domestic freight and local taxes to the local domestic price). 
The methodology of the United States would always  result in an excess subsidy margin, in breach 
of its obligation to apply Article 14(d) in good faith.  
31. Since the United States methodology assumes that a government price can never be 
'adequate', it even rejected NMDC prices reported in the Tex Report. Article 14(d) does not allow rejection of price charged by government players while determining prevailing market conditions, 
particularly in the instant case where NMDC was not even a predominant supplier of iron ore and 
was acting in accordance with market principles. Such a determination is also against the chapeau of Article 14 because the United States acted arbi trarily by accepting the NMDC export prices in 
one AR and rejecting in another AR.  
 Let me briefly touch upon the second 'as applied' claim. This claim relates to the imposition of countervailing duty on the allege d grant of captive mining rights for iron 
ore is inconsistent with Articles 12.5, 1.1, 1.2, 2 and 14 of the SCM Agreement. 
 32. Firstly, the United States' identification of the program as ' captive  mining rights for iron ore' 
is inconsistent with Article 12.5 inasmuch as India does not have a distinct framework for captive  
mining rights of iron ore as distinguished from th at governing mining rights for iron ore or mining 
rights for minerals in general. India believes that no reasonable and objective investigating 
authority could have satisfied itself as to the accuracy of the ex facie incorrect allegations made by 
the United States' domestic industry in this case. India believes that the United States failed to consider the entire information on record and conveniently ignored the conclusions cited in the very reports on which the United States relied upon.
26 
 
33. The United States' entire determination of 'specificity' is premised on this incorrect fact that 'captive  mining rights of iron ore' was subject to its own governing regulation. Thus, the 
determination as to specificity is contrary to Articles 1.2, 2.1 and 2.4.  
 34. Secondly, the United States wrongly determined the grant of 'mining rights for coal and iron 
ore' amounts to provision of iron ore and coal itself. The United States believes that this issue has 
been foreclosed by the Panel and the Appellate Body in US – Softwood Lumber (IV) . The 
United States has deliberately misinterpreted footnote 99 of the Panel's findings in US – Softwood 
Lumber (IV) by limiting its application only to the 'right to explore a particular site and the chance 
of finding something'.
27 Further, the Appellate Body in the very same case held that governmental 
actions can amount to 'provision of goods' only when there is no reasonable proximate nexus  
between the governmental action, and use or enjo yment of the alleged good. The 'nexus' in this 
case is too remote because mining does not involve an ex ante  certainty as to the quantity and 
quality of the ultimate good, and mining is an inherently risky and expensive affair involving substantial investment of time, effort and resources.  
 
35. Moreover, for the calculation of benefit, the United States took a notional price by adding 
the royalty paid by the exporter, cost of extrac tion and delivery charges incurred by the exporter 
from mine to the factory and a reasonable profit margin to the exporter. This notional price was 
taken as hypothetical remuneration paid to the government and it was compared with the 
benchmark price based on Tier-I or Tier-II. Such a hypothetical price was not contemplated either in the SCM Agreement or in the municipal laws of the United States. Undoubtedly, the hypothetical 
price is not the remuneration received by the government. India further believes that royalty rates 
for the extraction of natural resources has been practiced from times immemorial and was never intended to be countervailed under the SCM Agreement. Such royalty rates cannot be subject to 
the disciplines underlying the SCM Agreement.  
 
                                               
26 India FWS, para. 354. 
27 United States' FWS, para. 497. WT/DS436/R/Add.1 
 
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  The next 'as applied' claim relates to the injury determination by the United States 
contrary to Article 15 of the SCM Agreement.  36. In the original investigation, the United States cumulated imports from eleven countries out 
of which only five countries were subjected to simultaneous countervailing duty investigations. 
While doing so, the United States did not assess whether the volume of imports from each of the countries was not negligible and whether the subsidization rate was above de minimis . Such a 
determination is inconsistent with Articles 15.3.  
 37. India is of the view that irrespective of the data, what is germane to the issue is that the United States cumulated subsidized imports from countries subjected to CVD investigation and 
non-subsidized imports from countries not subjected to CVD investigations.  
 38. The United States cumulatively assessed th e volume and effects of both subsidized and 
non-subsidized imports in violation of Articles 15.1, 15.2 and 15.4. Effectively, the United States 
attributed injury caused by non-subsidized imports to subsidized imports, in breach of its obligations under Article 15.5.  
 
39. In the first sunset review also, the United States cumulated the imports from countries against which no countervailing duty measures had been imposed. This is inconsistent with its obligations under Articles 15.1 to 15.5.  
 
Let me now move on to the application of AFA standard and a few miscellaneous issues. 
 
40. During the 2006-2008 ARs, when employing the AFA standard contained in its domestic law, 
the United States consistently applied the highest above de minimis rate of subsidy as determined 
for an identical or similar program, or in absence of it, the highest above de minimis  rate for any 
other program involving the same country. Such a rule punishes non-cooperation by assuming the 
worst possible consequence against the non-cooperating party and is inconsistent with Article 12.7. In its FWS, India has also provided detailed arguments on several instances of illegal 
application of the facts available standard permissible under Article 12.7, which are not repeated 
herein.
28 These effectively cover 18 findings in the 2006 AR, 18 programs in the 2007 AR, 92 
findings in 2008 AR and 92 findings in the 2013 sunset review.   
41. India observes that in its FWS, the United States has not even attempted to defend the 
application of the highest above de minimis  rate. Even in its FWS, the United States has not 
adequately clarified the manner in which the findings challenged by India are based on facts 
actually available. For instance, while India's claim covered findings relating to 66 different state 
programs (and sub-programs) against one of the exporters in the 2008 AR
29, the United States 
attempts to rebut only one of the said findings and without further explanation, conclusorily states all the other findings are justified in a similar manner.
30 This is representative of the apathetic 
manner in which findings are made by the United States when applying its domestic AFA standard. 
 42. The United States has further undermined the due process safeguards crafted into the 
SCM Agreement in the process of initiating investigations into new subsidies in the course of 
review proceedings. India believes that the safeguards under Articles 11.2, 11.6, 13 and 22 of the SCM Agreement have to be complied for every single subsidy  t h a t  i s  t o  b e  c o u n t e r v a i l e d .  T h e  
United States, however, conducts an investigation  under the garb of a review  proceeding and this 
is impermissible.   Conclusion 
 
43. India considers that the United States has failed to frame laws, regulations and requirements that are consistent with its obligations under the above referred agreements.  
 
44. Mr. Chairman and Members of the Panel, th ank you for the opportunity to present India's 
views on this dispute. India would be pleased to provide responses to any questions that the Panel 
may have. 
                                               
28 India's FWS, section XI.A.2-9. 
29 India's FWS, section XI.A.5-6. 
30 United States FWS, paras. 235-246. WT/DS436/R/Add.1 
 
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  ANNEX B-4 
ORAL CLOSING STATEMENT OF INDIA – FIRST MEETING 
Mr. Chairman and distinguished members of the Panel. 
 
1. India is grateful to the Panel for providing an  opportunity to present its views in the present 
dispute. The proceedings and the submissions thus far highlight that the parties are acutely aware 
that the WTO Agreement on Subsidies and Counter vailing Measures ("SCM Agreement") constitute 
a delicate balance between two sets of stake-holder s. Yet, both parties have taken contrary views 
on many issues of interpretation. India does not envy the complex task before the Panel in attempting to consider these views in their entirety.  
2. India's claims, both 'as such' and 'as ap plied', are directed to ensure that the 
SCM Agreement does not become an instrument to bring upon unreasonable hardships on the 
exporting countries. India sincerely believes that the 'delicate balance' admitted by both the parties in the SCM Agreement is inherent in the te xt of the Agreement itself. India places the text 
of the SCM Agreement at a high pedestal in accord ance with the customary rules of interpretation 
and has made a sincere effort in appreciating the meaning and scope of every word used in the SCM Agreement. Illustratively, this may be said of India's interpretation of the term ' remuneration ' 
in Article 14(d) and the use of the phrase ' subsidized imports ' throughout the scheme of Article 15.  
3. It is unfortunate, however, that the United States has actually attempted to transpose the 
aspirations prevalent in its domestic law as the alleged intention behind various provisions of the SCM Agreement, fundamentally ignoring the text  of the SCM Agreement. Illustratively, the 
United States argues that there is absolutely no restriction in the SCM Agreement to 
cross-cumulate non-subsidized  imports with subsidized  imports. Even in its opening statement, the 
United States has referred to a hypothetical illustration to substantiate the argument that 
cumulation of non-subsidized  imports with subsidized  imports is permissible simply because both 
cause injury to its domestic industry. In this process the United States has rendered Article 15.3 completely redundant and desecrated the non-attribution requirement in Article 15.5.  
4. The United States disregard for the text of the SCM Agreement is apparent in the context of 
Article 14(d) of the SCM Agreement on two specific counts: (1) The United States agrees that even 
though 'remuneration' is a different term from 'ben efit' and yet, it proceeds on the basis that the 
use of these two different words is inconsequential; and (2) By mandating that calculation of 
'benefit' be done at the delivered price level in all cases, the United States disregards the mandate 
to account for the prevailing 'conditions of sale'.  
5. What is also rather unfortunate is the United States' attempt to undermine the 'security and 
predictability' in the dispute settlement system, by consistently disregarding the prior rulings of 
the Appellate Body. To illustrate, although there is a substantial discussion in US – Anti-Dumping 
and Countervailing Duties (China) on the need to prove the existence of "governmental authority" 
to perform "governmental function" in order to assess whether an entity is a 'public body', the 
United States' determinations under challenge as also its submissions, pay no attention to this requirement. It may also be noteworthy that in its opening statement, the United States even claims that the Appellate Body in the said case upheld United States' determination that 
"state-owned banks were public bodies based on evidence demonstrating the government's 
meaningful control over them ". On the contrary, as paragraph 355 of the said Appellate Body 
decision would highlight, the evidence presented in  that case was considered as being sufficient for 
the United States to justify that " SOCBs are meaningfully controlled by the government in the 
exercise of their functions " and more importantly, that " SOCBs exercise governmental functions on 
behalf of the Chinese Government ".  
6. Similarly, in its opening statement, the United States also places reliance on the Panel's 
decision in Canada – Renewable energy  to argue that just "meaningful control" is sufficient to 
satisfy the 'public body' requirement. Here again, a reference to paragraph 7.234 of the said decision would highlight that the body in question was admitted to be " a provincial government 
organization … to which the government has assigned or delegated authority and responsibility, or WT/DS436/R/Add.1 
 
- B-26 - 
 
  which otherwise has statutory authority and responsibility to perform a public function or service ". 
As the Panel very clearly notes, this specific factor was particularly dispositive in that case. The concluding remark in paragraph 7.239 of the Pane l Report also confirms India's submissions that 
mere "meaningful control" is insufficient  to make determinations as to 'public body'. India strongly 
objects to the dismissive manner in which the United States treats the statements and findings in 
prior decisions.  
7. The United States further undermines the "delicate balance" intended under the 
SCM Agreement, by choosing to ignore the obligations placed upon it as an investigating authority 
when making its determinations. The United States never ' initiates ' any investigation into new 
subsidies, does not fulfil the publication requirement under Article 22 for such new subsidies and completely circumvents the obligation to invite India to consult on the existence, amount and 
nature of these new subsidies. Instead, the United States takes the flawed stand that all of these 
requirements can be conveniently circumvented by camouflaging investigations  into new subsidies 
as part of the proceedings covering the review  of prior findings relating to other subsidies.  
8. The United States has attempted, through this dispute, to overcome its failings in the 
determinations under challenge. As an illustration, the United States did not even bother to acknowledge the non-confidential in-country benchmarks supplied by interested parties in its 
determinations under challenge. Yet, before this  Panel, the United States makes an unacceptable 
attempt to cure this defect by attempting to justify the rejection of such prices. The determination relating to NMDC being a public body is also another such instance. The United States has affirmatively admitted before the Panel in US – Anti-Dumping and Countervailing Duties (China)  
that the findings against NMDC in the subject investigation are solely based on government 
shareholding. For two years, i.e. the original de termination and the 2004 AR, the United States 
only relied on government shareholding. The 2007 AR is the only instance where a reference has 
been made to the board of directors of NMDC, an d even there, the United States categorically 
states that this is anyway irrelevant according to its domestic law. None of the determinations even remotely refer to 'governmental authority' or 'governmental functions'. Despite all this, the 
United States has made an attempt before this Panel to argue as if all of this has been considered 
by the United States in its determinations. This  applies even in the context of the mandatory 
parameters in the third sentence of Article 2.1(c) and three of the mandatory injury parameters in Article 15.4 of the SCM Agreement. 
9. It is India's submission that the dispute se ttlement system of the WTO cannot be used as a 
forum by the United States to cure inadequacies and illegalities in its determinations under challenge. 
10. Mr. Chairman and Members of the Panel, this  concludes India's closing statement. We thank 
you for your patient listening and the most efficient manner in which the proceedings have been conducted. We are also grateful for accepting In dia' request to provide an advance copy of the 
Panel's question. India would be pleased to prov ide responses to any further questions that the 
Panel may have.  WT/DS436/R/Add.1 
 
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  ANNEX B-5 
EXECUTIVE SUMMARY OF THE SECOND  WRITTEN SUBMISSION OF INDIA 
I. INTRODUCTION 
1. India notes that during the First Substantive Meeting as well as in its responses to the 
Panel's questions, India has provided a number of factual and legal rebuttals to the United States' 
assertions. While reiterating all of them as well as the claims made in its FWS without repeating the same, India takes this opportunity to clarify some important aspects of the claims raised by 
India in the instant dispute as well the defects in the United States' arguments. 
II. REQUEST FOR PRELIMINARY RULING BY THE UNITED STATES 2. With regard to India's claim under Section XII.C.4 of India's FWS, the United States' request 
for preliminary ruling is deficient and is not in compliance with para. 6 of the Working Procedures. 
Even if the Panel were to find that the request complies with para. 6, it is no different from those 
raised with respect to Sections XII.C.1-XII.C. 2. Therefore, the same response will apply 
mutatis mutandis  in respect of the claim covered in Section XII.C.4 of India's FWS. 
III. THE 3 TIER HIERARCHY CONTAINED IN 19 CFR § 351.511(a )(2)(i) TO (iii) 
3. India's claim in this respect is based on the words used in the first sentence of Article 14(d). 
The structure of the first sentence of Article 14(d) clearly suggests that determining whether the 
remuneration  is adequate is a threshold question that needs to be answered prior to going into the 
question of calculating benefit . Even the United States in its FWS concedes that the term 
'remuneration' is different from 'benefit', though they are related. However, the United States' FWS as well as third party submissions of the European Union remains noticeably vague on what 
the term remuneration  actually means. 
4. The United States argues that India's appr oach contravenes the text of Article 14(d) and 
results in Article 14(d) not containing any language on how to calculate benefit to the recipient. 
The United States' argument ignores the structure and context of Article 14 as a whole. The last 
sentence of both Articles 14(b) and (c) ensures a precise calculation method using an external 
benchmark, which is not the case with Article 14(d ). The lack of a specific method to calculate 
benefit is seen in Article 14(a), which has also been acknowledged by an earlier Panel. The 
United States offers no textual basis to rebut India's interpretation of the first sentence of Article 14(d) and instead mischaracterized India's claim as an assertion of the cost-to-government approach. As clarified by India in its Opening St atement as well, India only provides meaning and 
effect to the term remuneration  and the structure of the first sentence of Article 14(d), without 
disturbing the meaning to be attributed to the term benefit . 
5. The tiered approach under the United States' law fails to consider whether the price 
differences could otherwise be commercially just ified such that an alleged lower price of the 
government as compared to a benchmark can be at tributed to the government player behaving as 
a competitor in the relevant market. Price differences in competitive markets are well known and 
lower prices of one player can also be commercially justified. The United States fails to provide an 
adequate justification to ignore the conscious choice of the drafters to include a set of identical factors that are also used to assess whether a price is in accordance with "commercial considerations" under Article XVII, GATT. This very clearly indicates the intent that prices set in 
accordance with "commercial considerations" would be prices " reflective of the supply and demand 
of both sellers and buyers in that market ", which is what is required under Article 14(d).  
6. The hierarchical approach of the United St ates precludes the application of the Tier-III 
approach under which the government prices that may otherwise be considered as 'adequate 
remuneration' may still be considered as conferring a benefit under the Tier-I or Tier-II models. The United States submits that India's argument amounts to mandating the use of multiple 
methods for determining benefit. The United States fails to appreciate the drafters remained very WT/DS436/R/Add.1 
 
- B-28 - 
 
  clear that in no circumstance can an investigating authority determine the existence of a benefit 
when the remuneration in question is adequate.  
7. Not only had India challenged the hierarchy between Tier-I to Tier-III, but also Tier-II per se  
as well as the hierarchy between Tier-II and Tier- III. The United States has failed to address the 
latter claim in any manner in its FWS. Even as regards the former claim, a feeble attempt has 
been made to argue that if the United States were not allowed to apply Tier-II prices in the 
absence of a Tier-I benchmark, it would frustrate the object and purpose of the SCM Agreement. 
However, the United States fails to answer why it would choose Tier-II prices, i.e. world market 
prices over Tier-III methodology. The Appellate Body has considered the need for the benchmark to reflect the prevailing market conditions to be more critical than the type of benchmark itself and has also directed investigating authorities to make adjustments necessary to account for 
differences in "market conditions" and ensure that the method used does not countervail 
comparative advantages of the country in question. India submits that nothing in the words of the provision under challenge even remotely allows for the possibility of such adjustments. Therefore, 
contrary to the United States' assertion, the tier ed approach prescribed under the United States' 
law undermines the very text and spirit of Article 14(d). 
IV. THE DELIVERED PRICES ARRIVED AT IN ACCORDANCE WITH 19 CFR 
§ 351.511(a)(2)(iv) 
8. India had submitted that 19 CFR § 351.511(a)(2)(iv) is 'as such' inconsistent with 
Articles 14(d), 19.3 and 19.4 of the SCM Agreement because the United States' law by mandatory inclusion of delivery charges and import duties, eliminates the possibility of adjustments for the 
terms and condition of sale prevailing in the country of provision.  
9. The United States appears to focus its subm issions solely on the issue of whether "import 
duties" are added in every case. The United States assumes that the term "delivery charges" 
covers only import duties. The crucial portion of India's claim is that the law under challenge 
mandates benefit analysis to be done at a delivered level in all cases, even where the prevailing conditions of sale in the country of provision for the goods provided is only ex-works. In its FWS, 
the United States defends its law by stating numer ous times that it ensures an apples-to-apples 
comparison. As previously submitted, an alleged apples-to-apples comparison could very well be 
completed even at the ex-works level, which is usually the case under the AD Agreement also. The 
critical issue in Article 14(d) is to make an assessment in relation to the prevailing conditions of 
sale in the market, i.e. whether goods are being transacted on an ex-works basis or delivered 
basis ought to be considered by the investigating authority.  
10. Moreover, as India submitted in India's FWS, wherever the benchmark relates to goods from 
outside India, the addition of international freigh t and import duties to the benchmark price while 
only adding local freight and local taxes to the government price under challenge makes the affirmative determination of 'benefit' a foregone conclusion. This is exactly what the United States 
law under challenge requires. 
11. The United States also argues that its method ensures a proper assessment of the cost to 
the purchase of the goods. The language of Arti cle 14(d) does not make cost to the purchase a 
relevant element. Rather, the focus is on the "pre vailing market conditions" and India submits that 
an adjustment on account of transportation (which is also a condition of sale) could only be made 
if such condition of sale is the prevailing market condition in the country of provision. However, the mandatory nature of the United States' law forecloses such an examination and presumes the 
delivery charges as a condition of sale dehors the actual facts of a case.  
V. THE CUMULATION PROVISIONS CONTAINED IN 19 USC § 1677(7)(G), 19 USC 
§ 1675a(a)(7) AND 19 USC § 1677b(e)(2) 
12. India's challenge in the present dispute is co nfined to the cumulation of subsidized imports 
with dumped imports, where all the dumped imports are not subsidized. India notes that the other types of cumulation are not covered in the presen t dispute and India does not express any opinion 
on the consistency of such cumulation.  WT/DS436/R/Add.1 
 
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  13. The primary argument made by the United St ates is that Article 15.3 does not expressly 
prohibit cumulation of dumped and subsidized imports. The United States construes this to imply that Article 15 is silent on subsidized imports being cumulated with dumped (but non-subsidized imports), apparently giving the investigating authority absolute freedom to do so. The 
United States has analogized this case with US – Oil Country Tubular Goods Sunset Reviews , 
where a similar finding was issued in respect of Article 21. Per  contra Article 15.3 specifically 
addresses the issue of cumulation inasmuch as the first sentence restricts cumulation of imports of 
products only from countries simultaneously subject to countervailing duty investigations  and the 
second sentence merely refers to such imports. Article 15, therefore, is not silent on the issue of 
cumulation as was the case with Article 21. The interpretative exercise, therefore, is completely different from that of US – Oil Country Tubular Goods Sunset Reviews on which the United States 
relies on. India reiterates that the text and cont ext of Article 15 as a whole do not permit the 
United States to cumulatively assess subsidized and dumped (not not-subsidized imports) in a CVD investigation. 
14. To the extent the United States argues that  Article 15.3 does not prohibit such cumulation, 
India asserts that the submissions of the United are inherently contradictory. If the United States' interpretation of Article 15.3 of the SCM Agreement is applied in the context of Article VI.6.a, then 
nothing in the text of Article VI.6.a actually prohibits the United States from cumulating even fairly 
traded goods. Yet, the United States, quickly realizing the absurdity of this consequence, draws an implied prohibition to cumulate even fairly traded goods. India submits that a more express and stronger prohibition exists in Article 15 to cumulate subsidized with dumped (but not subsidized) 
imports.  
15. The United States also justifies its pr ovision under challenge by relying on the 
AD Agreement as a relevant context. Even a co njoint reading of both AD and SCM Agreements 
only suggests that just like subsidized imports are cumulated in a CVD proceeding, dumped 
imports may be cumulated in an AD proceeding. The AD Agreement does not address the issue of cumulation in a CVD proceeding. India submits that this is a self-inflicted confusion arising only 
because the United States does a unified injury finding for both AD and CVD and therefore, has 
misplaced the "non-attribution" obligations mentioned in both agreements.  
16. On sunset reviews, the United States primar ily submits that Article 15.3 only applies in an 
original investigation, which requirements are inapplicable in sunset review determinations. India 
submits that if cumulation in original investigations is limited to only subsidized imports, this 
limitation should equally apply to sunset reviews as well. The United States further submits that the use of the word 'may' in section 1675a(a)(7)  makes cumulation discretionary and therefore, 
grants a safe harbor to the provision in question. India asserts that it is an established principle 
that the description of an instrument under domestic law is not determinative under WTO law. As submitted in India's first written submission a careful analysis would show that the discretion not 
to cumulate has in fact never been exercised.  
17. The relevant question before the Panel is whether the United States does not cumulate 
subsidized imports and dumped (but non-subsidiz ed) imports in sunset reviews even where the 
imports compete with each other inter se  and with the domestic like products? The United States 
does not provide for any instances of sunset review determination in its written submission where 
the discretion has in fact been exercised. On the other hand, India has studied the sunset reviews of the United States involving CVD proceedings and AD proceedings initiated on the same day and 
concluded that in every instance where the conditions of competition are met, cumulation is done. 
The alleged discretion not to cumulate is exercise d only to the extent that the conditions of 
competition are not met. Therefore, the totality of evidence on record shows that even in sunset 
reviews, where the conditions of competition are met, cumulation is practiced as a rule / norm of 
general application and hence, is a measure that can be challenged 'as such' before this Panel. 
VI. THE AFA PROVISIONS CONTAINED IN 19 USC § 1677e(b) AND 19 CFR 
§ 351.308(a)-(c) 
18. Contrary to the United States' assertion India has made it clear both in its FWS and during 
the First Substantive Meeting that India challenges the AFA provisions, i.e. 19 USC § 1677e(b) and 19 CFR § 351.308 'as such' and not the 'practice' or the 'approach' of the DOC in applying these 
provisions. India submits that as a matter of rule / norm, the United States applies the AFA 
provisions to the worst possible inferences in all cases of non-cooperation. India has referred to WT/DS436/R/Add.1 
 
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  the consistent practice as evidence to prove su ch a rule / norm. The use of such systematic 
application in order to prove the existence of a rule or norm is consistent with the findings of the Appellate Body in US – Zeroing (EC) . It is crucial to note that the Appellate Body in the said case 
made a definitive distinction between the standards to be applied for an alleged rule or norm that 
is written / codified  versus a rule of norm that is unwritten.  What was before the Appellate Body in 
the said case was as an unwritten  rule or norm whereas the case at hand involves the codified AFA 
provisions. Therefore, India believes that the appl ication of the aforesaid general principle to the 
facts of the case in US – Zeroing (EC)  may not be relevant to the instant dispute. Nevertheless, 
even on facts, India submits that the evidence on record is akin to what was available in US – 
Zeroing (EC)  and therefore, satisfies the threshold placed by the Appellate Body in US – 
Zeroing (EC) . 
19. The Appellate Body in US – Oil Country Tubular Goods Sunset Reviews required the Panel to 
engage in a proper qualitative assessment  of the instances where the alleged 'rule' was applied 
consistently. India has provided similar data on consistent application and seeks the indulgence of 
the Panel to engage in such qualitative assessment . India also invites the Panel's attention to the 
binding decisions rendered by the Federal Circuit an d the Court of International Trade. Based on all 
the above, India submits that the AFA provisions are a 'measure' that can be "as such" challenged 
before this Panel and are inconsistent with Article 12.7 of the SCM Agreement.  
20. In section VII.A of its FWS, the United States has placed significant emphasis on the fact 
that the AFA provisions under challenge do not 'require' the use of adverse inferences and instead grants its investigating authority the discretion to apply adverse inferences. The United States 
argues that such discretionary laws cannot be challenged 'as such' as per well-established GATT 
and WTO jurisprudence. India finds it surprising that the United States relies on the decision rendered by the Appellate Body Report in US – Zeroing (EC)  in this respect. In reality, the findings 
in both US – Zeroing (EC)  as well as US – Oil Country Tubular Goods Sunset Reviews  show that 
even an apparently unwritten or discretionary rule can be considered otherwise through the qualitative assessment of its systematic application. Moreover, this argument of the United States 
falls flat in the light of the express finding by the Appellate Body in US – Corrosion-Resistant Steel 
Sunset Reviews  where the Appellate Body expressly ruled that there is no general principle that 
only mandatory rules can be challenged 'as such'. 
21. India does acknowledge that the provisio n in question uses discretionary language. 
However, this grants no safe harbor to the United States. India presents two alternative and 
without prejudice arguments in this respect. First, India submits that even if the words used in the 
AFA provisions appear to provide discretion, the very grant of the discretion is inconsistent with 
Article 12.7 of the SCM Agreement. In this respect,  India has provided detailed submissions in its 
FWS on the Panel ruling in US – Section 301 Trade Act , where a legislation that very clearly 
provided discretion to the investigating authority was still inconsistent with a WTO provision. 
Second, in the alternative and without prejudice to the aforesaid argument, the United States 
cannot simply point to the use of the word 'may' in its AFA provisions and India urges the Panel to not end its analysis there. Prior Panel and Appe llate Body Report direct otherwise. The Panel 
Reports in US – 1916 Act (EC)  and US – Countervailing Measures on Certain EC Products , as well 
as the Appellate Body Reports in US – Corrosion-Resistant Steel Sunset Reviews , US – Zeroing 
(EC) and in US – Oil Country Tubular Goods Sunset Reviews  require this Panel to go beyond the 
mere text of the provision under challenge, analyze other related domestic instruments, legislative 
history, domestic judicial decisions and even evid ence of systematic application of the provisions. 
This is exactly what India has done in its FWS and the SWS. 
VII. SALE OF HIGH GRADE IRON ORE BY NMDC 
22. The United States determined NMDC to be a 'public body' solely on the basis of 
governmental shareholding of NMDC. From a perusal of the determinations under challenge, it is 
evident that the sole reason in the 2004 and 2006 AR for holding the NMDC to be a public body 
was government shareholding. In the 2007 AR, the exporter argued that NMDC is not a 
government authority because of the composition of the Board. The United States categorically 
rejected the submissions and held that " majority ownership of an input supplier qualifies it as a 
government authority within the meaning of [19 USC § 1677(5)(D)(i))] " and that " [a]nalyzing 
additional factors is not necessary absent information that calls into question whether government 
ownership does not mean government control .". Further, the United States has previously 
admitted before the Panel in US – Anti-Dumping and Countervailing Duties (China)  that in WT/DS436/R/Add.1 
 
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  Hot-Rolled Carbon Steel Flat Products from India , the USDOC found that a 98 per cent 
government-owned mining company governed by th e Ministry of Steel was a public body, without 
reference to any more factors. Government shareholding in itself cannot result in the entity 
becoming a public body and India submits th e Appellate Body's ruling on this issue in US – 
Anti-Dumping and Countervailing Duties (China) is dispositive to the case at hand. This ruling 
forms part of the acquis  of the WTO and is binding on this Panel. Apart from re-agitating the same 
issue and arguments already considered by the Appellate Body, the United States fails to provide 
any 'cogent' reasons for having to differ from  this prior adopted Appellate Body Report. 
23. Before this Panel, however, the United Stat es attempts to read other factors and evidence 
that may otherwise justify its finding that NMDC is a public body. None of these other factors and evidence, including the significant reliance placed on the Board composition of NMDC finds place in 
the measures under challenge. The Panel, under Article 11 is not permitted to consider such 
ex-post facto rationalizations from the United States. Nonetheless, in its SWS, as a matter of 
abundant caution India, has replied to each such ex-post facto rationalization.  
24. On the issue of specificity, India had examin ed the manner in which Articles 2.1(a)-(b) have 
to be read and understood, in its FWS. The Appellate Body has already ruled that Articles 2.1(a)-(b) are provisions that deal with discriminatory conduct , which definitely indicates 
that specificity  under the principles of Articles 2.1(a)-(b) is about governmental action that treats 
similar situated entities in a dissimilar fashion. India also emphasizes that the concept of discriminatory conduct is necessarily implied in the text of Article 2.1(a)-(b) itself. The United States does not dispute any of India's conclusions as it relates to Articles 2.1(a)-(b) and 
only appears to disagree with this conclusion be ing applied to Article 2.1(c). India disagrees and 
submits that contextually, even when making a de termination of specificity under Article 2.1(c), 
the investigating authority is required to engage in a comparative exercise, i.e. examine whether 
the subsidy / benefit is discriminatorily enjoyed / used by certain similarly placed enterprises over 
others. Such a comparative exercise would inherently involve comparing like with like.  
25. On the issue of determining existence of bene fit and calculating the amount of benefit, the 
submissions on the 'as such' claim covering the tiered approach and 'delivered prices' of the 
United States law would mutatis mutandis apply  herein. On the specific issue of availability of 
in-country benchmarks, India submits that all objections raised by the United States in its FWS against the use of certain in-country benchmarks are to be rejected in limine because they amount 
to ex-post facto rationalizations . Even if these objections are relevant, it is equally surprising that 
the United States did not even attempt to seek fu rther clarification in these respects when they 
had the opportunity to do so. This failure is quite telling and undermines the due process 
obligation of the United States. Nonetheless, in its SWS, as a matter of abundant caution India, 
has replied to each such ex-post facto rationalization.  
VIII. THE 'CAPTIVE MINING RI GHTS FOR IRON ORE & COAL' 
26. India, in its FWS, has explained the features of India's mining rights program all of which 
remain un-rebutted by the United States. The United  States only submits that the record evidence 
indicated that India has a captive mining program for iron ore. The essence of the claim has been correctly captured by the Panel in Question No. 29 to India. The fact remains that India only 
grants 'mining leases' for iron-ore. The fact that some of the lessees, in their commercial wisdom, 
choose to be vertically integrated is inconsequential to grant of the rights by the GOI under the relevant legal regime. There is no separate policy, law or regulation for captive mining and all the 
lessees pay the same amount of royalty fees and are granted concessions on the same terms and 
conditions.  
27. The United States mischaracterized the program as ' captive  mining rights for iron ore ' and 
has not identified any separate regulation or guidelines governing mining rights of iron ore as 
distinguished from other minerals. This is a fundamental error of fact by the United States, which also vitiates its specificity determination as regards captive mining rights for iron-ore. 
28. India's submits that granting "mining right for iron-ore and coal" cannot amount to provision  
of iron-ore and coal. India only provides the mining rights against royalty, which constitutes 
roughly 9.03% of the total cost of extracting iron ore in the relevant period, the other 90.97% being the cost of extraction incurred by the lessee of the mining rights). There is no reasonable WT/DS436/R/Add.1 
 
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  proximate connection between the grant of rights  and enjoyment of the mined mineral by the 
miners. The United States fails to appreciate the need to prove the existence of such reasonable 
proximate connection as was laid down by the Appellate Body in US – Softwood Lumber IV .  
29. To the extent the benefit finding for the NMDC programs and the law under which those 
findings were arrived at are inconsistent with Article 14(d), the benefit findings for mining rights 
program of iron-ore and coal would also automatically fall. Further, to assume a notional price of the extracted mineral (that includes cost of extraction, royalty rate and a notional reasonable 
profit) as the remuneration received by the GOI is also erroneous.  
IX. THE SDF PROGRAM 30. As was correctly noted even by the Panel, the United States, in its FWS, has not even 
attempted to respond to India's submissions that th e JPC, by no stretch of imagination, could be 
considered as a public body. The uncontroverted fact remains that JPC was established under a 
separate legal instrument, has a separate identity and its functions are distinct from that of SDF Managing Committee. It is the JPC and not the SDF Managing Committee, which executes the loan 
documents, disburses the funds and receives the funds and all of this is not disputed by the 
United States. India also, reiterates that the SDF Program was nothing but a mechanism for the participating steel plants to specifically channelize their own funds for specified purposes, such as 
modernization and R&D. Since, the United States has not challenged the assertion that JPC is not a 
public body, the claim must be decided in India's favor.  
31. Even as regards the SDF Managing Committee, the United States determined it to be a 
public body on the sole basis of governmental control due to composition of the committee. This 
fails to satisfy the test laid down in US – Anti-Dumping and Countervailing Duties (China) . While 
the United States argues at this stage that the SDF Managing Committee performs a 'governmental function', such a finding is absent in the determination under challenge. Such 
arguments are merely ex-post facto  rationalizations that are to be rejected by the Panel.  
32. India also reiterates that the domestic noti fications issued pertaining to the SDF clearly 
pointed that the authority to operate the fund vest ed only with the JPC, which anyway cannot be a 
public body. The United States' attempt in the determination under challenge as well its FWS to 
color the SDF levy as tax is also not substantiated by facts since it is the JPC which was empowered to charge the SDF levy and JPC itself is not a public body.  
33. India further submits that even if SDF Managing Committee is a public body, in 
section IX.C.2 of its FWS, India has argued that SDF cannot amount to a 'direct' transfer of funds 
for the purposes of Article 1.1(a)(1)(iii) since the funds do not directly  move from the SDF 
Managing Committee to the alleged beneficiaries. Instead, if at all, it moves indirectly through JPC, 
which is majority controlled by participating steel plants only. Moreover, as submitted in 
section IX.C.3 of India's FWS, the SDF is not a direct 'transfer' of funds for the purposes of 
Article 1.1(a)(1)(i) since the GOI or the SDF Managing Committee (or for that matter, even the 
JPC) do not own title to the SDF funds. The SDF funds are producer levies and the SDF loans do 
not involve a charge on the public account. The SDF levy never became part of the consolidated fund of India and therefore, can never be equated to tax revenues.  
34. When calculating benefit, the United States also acted contrary to the chapeau to Article 14 
and Article 14(b), in relation to the SDF program. The United States applied the Prime Lending 
Rate (PLR) as the benchmark rate, but failed to explain how such a rate could be considered as a 'comparable commercial loan' under Article 14(b) as it only  reflect ed the overall reference rate for 
the banks taking into account their cost structure. As was highlighted in India's FWS, the SDF 
loans were conditioned on a number of costs being borne by the participating steel members, including that of having to first deposit amounts into the SDF. Further, the comparability analysis 
under Article 14(b) necessarily requires the United States to look into the credits or adjustments 
since from a commercial perspective, such factors would affect the rates at which the loan is granted. The United States argues that benefit is all about how the beneficiary has been made "better off" than the market place and yet, on the other, argues that the costs borne by the 
participating steel producers need not be accounted for. WT/DS436/R/Add.1 
 
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  X. INJURY INVESTIGATION 
35. The United States raises several additional arguments in defense of its original injury 
determination. India submits that all such analysis never formed part of the injury determination made by the United States. Table V-13 highlights  no segregation of data of dumped imports 
vis-à-vis subsidized imports; it merely tabulates the data for each country without further 
examination of the data. The narrative portion of the injury determination does not even make the 
effort to segregate the data based on the dumped imports and subsidized imports. 
36. In relation to causal link analysis under Arti cle 15.5 of the SCM Agreement, while it is not in 
dispute that all subsidized imports were found to be dumped, it is equally undisputed that all dumped imports were not found to be subsidized. It is the cumulation of these unsubsidized imports, which has distorted the injury determination and is inconsistent with Article 15 of the 
SCM Agreement and especially, Articles  15.3-15.5 of the SCM Agreement.  
37. In relation to the evaluation of mandatory injury parameters, the United States observes 
that even though there is no written record, it has indeed evaluated the mandatory parameters as 
required under Article 15.4 of the SCM Agreement as interpreted by the Appellate Body in EC – 
Pipe and Tube Fittings. In EC – Pipe and Tube Fittings , factually, the Appellate Body found that 
there was considerable analysis regarding the mandatory parameter in question, which satisfied 
the requirement under Article 15.4. However, this is not so in the present case.  
XI. THE APPLICATION OF AFA PROVISIONS 38. One of the primary arguments in respect of this issue rests on the fact that the 
United States consistently applies the highest possible rate against non-cooperating parties.
1 India 
notes that the United States has not even attempted to defend such a stand in its FWS. Applying 
the highest possible margin in all cases of non- cooperation is contrary to Article 12.7 of the 
SCM Agreement.  
39. In its FWS, India had also raised a numbe r of instances where the AFA provisions "as 
applied", are inconsistent with Article 12.7 of the SCM Agreement. The United States fails to justify 
its finding in all the instances and instead, attemp ts to rebut only one instance and asserts that 
every other instance falls in the same category. In its SWS, India has established beyond doubt 
that in all instances identified in the FWS, the determinations were based on speculations / assumptions meant to result in adverse consequences, rather than being based on actual facts. 
XII. INCONSISTENCIES WITH ARTICLE 11, 13, 21 AND 22 OF THE SCM AGREEMENT 
40. India submits that the United States has failed to rebut India's submission of inconsistency 
of the measures under challenge with Articles  11, 13, 21 and 22 of the SCM Agreement. The 
United States' response to India's allegation is basically centered on the understanding that the 
Articles 11 and 13 are not applicable in a review exercise under Article 21 of the SCM Agreement.
2 
The United States' submission, in effect, is that because the exercise of inclusion of new subsidies is carried out in a review under its domestic procedure, the entire consolidated proceeding 
amounts to a review  under Article 21 of the SCM Agreement.  
41. India submits that when a new subsidy is alleged in an AR, findings that are made qua this 
new subsidy are findings made for the first time. Qua such new subsidies, it is for the first time that an exercise in the nature of determining the ' existence, degree ' of such new subsidies is being 
conducted. Such an exercise is clearly an investigation  contemplated under Article 11 and not a 
review . The United States cannot be allowed to conveniently circumvent the obligations under 
Articles 11, 13 and 22 by simply conducting such investigations  within a proceeding that is termed 
as a ' review ' under its domestic laws.  
42. Contrary to the United States' assertion, this does not render Article 21 redundant. What the 
United States fails to appreciate is that the issue concerns a newly  alleged subsidy and not the 
continuation of the already existing program after some modification. India's claim does not 
                                               
1 India's FWS, paras. 526-527. 
2 The United States' FWS, Section XII.C.1. WT/DS436/R/Add.1 
 
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  concern the latter case. Secondly, Article 21 is meant to review the existing subsidization. After a 
newly alleged subsidy is investigated in accordance with Articles 11, 13, and 22 for the first time, subsequent ARs can be performed on such subsidies under Article 21 (without having to fulfill Articles 11, 13 and 22 in such subsequent reviews).  
43. The United States submits that India has a disagreement with the substance of the decision 
itself in relation to the SDF program and not about the adequacy of explanation by Commerce. 
India's claim under Article 22.5 lies in the United States' failure to account for the factual 
similarities between the ECSC program and SDF program.  
44. With regard to provision of high grade of ir on ore by NMDC, the United States submits that 
the information on domestic prices was not reliable as there was no information on record to show that those were actual transaction between private parties and the data provided did not identify 
the entities selling the iron ore. Be that as it ma y, the fact remains that the aforesaid justification 
occurs for the first time in the present submissi on and therefore, only proves the violation of 
Article 22.5 of the SCM Agreement.  
45. Similarly with regard to the captive mining rights of iron ore and coal, the United States 
provides a bare assertion that it has complied with Article 22. India reiterates all its submissions from its FWS. 
XIII. REQUEST FOR FINDIN GS AND RECOMMENDATIONS 
46. In view of the above, India requests th e panel to recommend that the United States 
withdraw the countervailing duties and amend its laws to bring them into conformity with the 
above referred agreements. 
 WT/DS436/R/Add.1 
 
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  ANNEX B-6 
EXECUTIVE SUMMARY OF THE ORAL OPENING STATEMENT OF INDIA -  
SECOND MEETING 
Mr. Chairman and distinguished members of the Panel 
1. India has made extensive factual and legal submissions on the various claims raised in this 
dispute. In response, the United States has turned to rhetoric rather than refute the claims on a substantive basis. In this second substantive meeting of the Panel, India would like to highlight the 
substance of its claims and how the United States has failed to refute any of India's claims.  
2. India's claims are strongly grounded on the terms used in the SCM Agreement and the 
United States cannot request this Panel to ignore textually and contextually supported interpretations or arguments simply because the United States may perceive them to be radical. It 
has been and it continues to be India's submission  that India's approach to many of the issues 
arising in this case is fundamentally supported by the language as well as the spirit of the treaty and mere fact that some of the views expressed by India may not have been raised before a Panel 
or the Appellate Body on earlier occasions does not make India's approach radical.  
3. The United States has resorted to 'confidentiality of information' as an excuse for not 
addressing India's claims regarding availability of  an in-country benchmark. India affirms it has 
not violated any confidentiality obligations while producing any documents before this Panel. India 
will cover this in detail, during the later course of its opening statement.  
4. I will first deal with the four 'as such' claims and then cover the 'as applied' claims.  Let me start with the first 'as such' claim: "The hierarchical structure of determining 
'adequacy of remuneration'". 
5. India believes that the United States law under challenge, i.e. 19 CFR 351.511(a)(2), is 'as 
such' inconsistent with Article 14(d) of the SCM Agreement. India does not wish to repeat the 
detailed arguments already laid out in its submissions and instead only wishes to highlight certain 
fallacies in the submissions of the United States.  
6. Under Article 14(d), what is being assessed is the adequacy of the 'remuneration', which, 
India submits, refers to the actual compensation  received by the government provider of the 
goods. The Appellate Body, in US – Softwood Lumber IV  has explicitly held that "a benefit is 
conferred when a government  provides goods to a recipient and, in return, receives insufficient 
payment or compensation for those goods ".
1 There is a very clear suggestion by the Appellate 
Body that the term 'remuneration' covers the payment or compensation actually received  by the 
provider of the goods. While the remuneration refe rs to what is received by the provider of the 
goods, the conferral of benefit, if any,  is on the purchaser of the goods.  
7. The United States admits in paragraph 11 of its Second Written Submissions that the 
language in Article 14(d) "establishes a structure under which an investigating authority, upon the existence of a particular condition, may find that a benefit has been conferred". It is India's claim 
that the "particular condition" referred to by the United States is the existence of 'less than 
adequate remuneration' to the provider of the good s. If and when the 'remuneration' is considered 
as inadequate, the investigating authority may proceed to calculate the amount of benefit. This two-step process is built into Article 14(d) by virtue of its first sentence.  
8. The requirement of determining whether the re muneration was adequate to the provider of 
the goods cannot be termed as applying the "cost to government" approach. The United States has spent considerable time in highlighting prior jurisprudence rejecting the "cost to government" 
approach in calculating benefit. However, it has never been India's submission that the benefit is 
                                               
1 Appellate Body Report, US – Softwood Lumber IV , para. 84. WT/DS436/R/Add.1 
 
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  to be determined based on the cost to the govern ment. It is India's submission that whether the 
goods have been provided by the government for less than adequate remuneration shall be determined taking into account, inter alia, costs, profits and all other relevant market conditions. Once this threshold is crossed, i.e. the remuneration  to the provider is determined to be 'less than 
adequate', the investigating authority may proceed to calculate benefit to the recipient  in 
accordance with the relevant provisions of the SCM Agreement. 
9. India has pointed out the differences in the te xt of sub-paragraphs (b) and (c) of Article 14 
with the text of sub-paragraphs (a) and (d). It is more than evident that in sub-paragraphs (b) 
and (c) of Article 14, the difference with reference to a certain benchmark price is deemed to be the amount of benefit. The United States has not explained why the drafters' would choose not to insert a similar sentence in sub-paragraph (d) of Article 14. Rather, in paragraph 14 of its Second 
Written Submissions, the United States argues that the first sentence of Article 14(d) refers to 
'less than', 'more than' and that this envisage s a comparative exercise similar to that of 
sub-paragraphs (b) and (c). The United States also argues that the different manner in which the 
second sentence of Article 14(d) is drafted suggests a "more involved comparison" compared to 
the other subparagraphs, without any textual basis. There is nothing in the language of the second 
sentence that is similar to the other sub-paragraphs of Article 14 and the difference in language 
must be given due weight. Tier-I and Tier II methodologies of the United States prescribe a 
mechanical approach and not a 'more involved' approach. 
10. The mechanistic application is borne out by the fact that under the Tier-I and Tier-II 
methodologies, every time the government price is lower than a given benchmark price, a finding 
of benefit is arrived at. Had the United States really intended to engage in a 'more involved' 
analysis, it would have explored the reasons behind any such price differences. The prevailing market conditions may permit different competitors in selling similar products at different prices 
and price differentials could easily be justified by 'commercial considerations'. India submits that 
this is exactly why the second sentence of Article 14(d) has been structured differently from Article 14 (b) and 14(c). The United States responds to this by arguing that the cross-reference to 
the term 'commercial considerations' in Article XVII of the GATT is not contextually justified and 
that this is a disguised attempt by India to substitute the term 'commercial considerations' for 'market conditions' in Article 14(d). India reiterates that the presence of identical factors in Article 14(d) of the SCM Agreement and Article XVII of the SCM Agreement to identify 'market 
conditions' and 'commercial considerations', respectively, cannot be ignored.  
11. India has claimed that the Tier-II method per se  as well as the hierarchy between Tier-II 
and Tier-III are inconsistent with Article 14 of the SCM Agreement. There is an inherent 
presumption in the United States' Tier-II method that world price benchmarks can be applied to 
assess the adequacy of remuneration irrespective  of the prevailing market conditions in the 
country of provision. The obligations on the investigating authority as noted by the Appellate Body 
in US – Softwood Lumber (IV)  are simply ignored by the United States. India believes that the 
Tier-II method is exactly what the Appellate Body in US – Softwood Lumber (IV)  directed 
investigating authorities to avoid. Further, the United States' failure to justify the inter se  
hierarchy between Tier-II and Tier-III methods is a pparent on the face of the record and nothing 
can logically justify the United States' choice of world price benchmarks over a qualitative 
assessment of the pricing policy under Tier-III.  
India's second 'as such' claim is the "manda tory comparison" of the Government prices 
with the benchmark at the 'delivered prices' level". 
12. Under 19 CFR § 351.511(a)(2)(iv), the benchmark price determined under Tier I or Tier II is 
required to be adjusted to reflect the price that a firm actually paid or would pay if it imported the 
product. The adjustment will include delivery ch arges and import duties. This mandate applies 
even if the government price in question does not include such delivery charges. Such mandatory 
use of 'delivered prices' violates the United Stat es' obligation to consider the 'prevailing market 
conditions' in the country of provision. Even wh ere the prevailing 'conditions of sale' for the 
transaction of the goods in question do not include transportation or other delivery charges, such 
as when goods are being transacted on an ex-works  basis, the United States law mandates its 
investigating authority to ignore these market conditions.  
13. The United States argues that the term 'tra nsportation' is mentioned in Article 14(d) and 
therefore, in every case, transportation will be added to the prices being used. India cannot WT/DS436/R/Add.1 
 
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  imagine a more acontextual and absurd implication of this word. The Panel may observe that 
'transportation' is considered as just another 'condition of sale' within the meaning of Article 14(d). Otherwise, the presence of the word 'other' is re duced to redundancy. Further, such 'conditions of 
sale' need to be accounted for in order to assess the 'prevailing market conditions'. The use of the 
term 'transportation' does not mean that in every case transportation costs shall be included 
irrespective of whether the prevailing market conditions for sale of the goods in question include an element towards 'transportation'.  
14. A second fundamental error in the United States' approach is that its assumption that 
measuring adequacy of 'remuneration' involves asse ssing the cost to the recipient of the goods. 
The language of Article 14(d) does not make cost to the purchaser a relevant element. In fact, in EC and Certain Member States – Large Civil Aircraft , the Appellate Body has expressly ruled that 
one should not focus solely on the demand side or the supply side of the equation for the purposes 
of Article 14(d) and the United States' position is  contrary to this. Rather, the focus is on the 
"prevailing market conditions" and India submits that an adjustment on account of transportation 
(which is also a condition of sale) could only be made if such condition of sale reflects the 
prevailing market condition in the country of provision. However, the mandatory nature of the United States' law forecloses such an examination and presumes the delivery charges as a 
condition of sale dehors the actual facts of a case.  
15. Moreover, as India submitted in India's Firs t Written Submissions, wherever the benchmark 
relates to goods from outside India, the addition of international freight and import duties to the benchmark price while only adding local freight and local taxes to the government price under 
challenge makes the affirmative determination of 'benefit' a foregone conclusion.  
The third 'as such' claim relates to the "Cumulation of subsidized and non-subsidized 
imports to determine inju ry in CVD proceedings". 
16. India would like to reiterate that the real issue is whether Article 15.3 of the SCM Agreement 
contemplates cumulation of imports from countries not subject to 'simultaneous countervailing duty investigations'. The said article does not cover cumulation of 'dumped' and 'subsidized' 
imports. Article 15.3 only permits cumulation of 'subsidized' imports from more than one country 
that are subjected to simultaneous countervailing duty investigation.  
17. The primary argument of the United States to defend the provision under challenge seems 
to be that 'disentanglement of dumped and subsidized' injury is not possible. However, the 
United States while adopting this myopic approach omits the unequivocal requirements of 
Article 15.5 that injury caused by other known factors must not be attributed to the subsidized imports.  
The last of the 'as such' claims deals with  t h e  U S  l a w  p e r t a i n i n g  t o  ' A d v e r s e  F a c t s  
Available'. 
18. Contrary to the United States' assertion, India has made it clear that it is challenging the 
AFA provisions, i.e. 19 USC § 1677e(b) and 19 CFR § 351.308 'as such' and not the 'practice' or 
the 'approach' of the DOC in applying these provisions. India submits that as a matter of rule or norm, the United States applies the AFA provisions to draw the worst possible inferences in all cases where the parties have allegedly not cooperated to the best of their abilities. India has 
referred to the consistent practice as evidence to prove such a rule or norm. The use of such 
systematic application in order to prove the existence of a rule or norm is consistent with the findings of the Appellate Body in US – Zeroing (EC) . Even on facts, India submits that the evidence 
on record is akin to what was available in US – Zeroing (EC)  and therefore, satisfies the threshold 
placed by the Appellate Body in US – Zeroing (EC) . 
19. The United States' principal objection again is that their legislation is discretionary and India 
has already acknowledged that fact. However, the United States appears to be under the 
misunderstanding that this grants a safe harbor to its law. The United States cannot circumvent an actual prohibition under the SCM Agreement merely by couching its provision in discretionary terms. While it is true that India has used the consistent and systematic practice of the 
investigations to substantiate that the allegedly discretionary norm is actually applied as if it were 
a mandatory one, the United States has misconceived this to be the only evidence on record. WT/DS436/R/Add.1 
 
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  Rather, India has also referred to binding domestic precedents as well as the policy background 
behind the AFA provision, which consistently highlight that punishing non-cooperation was the intent behind the AFA provision. These additi onal evidences have not been rebutted by the 
United States. Instead, the United States attempts to take the Panel on a tangential course by 
referring to US – Export Restraints  and US – Measures on Steel Plate in India , where attempts to 
challenge 'practice' as a measure were dismissed.  
20. The United States has completely failed to appreciate the findings from the two Panel 
reports in US – 1916 Act (EC)  and US – Countervailing Measures on Certain EC Products , as well 
as the Appellate Body Reports in US – Corrosion-Resistant Steel Sunset Reviews , US – 
Zeroing (EC)  and in US – Oil Country Tubular Goods Sunset Reviews , which direct this Panel to not 
stop its examination with the plain text of the provision. Qualitative assessment of consistent 
practice as one evidence to demonstrate the existence of a norm is a mandate from the Appellate 
Body. India seeks such an assessment from this Panel.  
21. Further, India highlights that even if the Pa nel were to consider the provision to actually 
provide discretion in a real sense, a discretionary legislation has been held to be inconsistent 
earlier by the Panel in US – Section 301 Trade Act . India submits that the very grant of the 
discretion to apply the facts available standard to punish non-cooperation is inconsistent with 
Article 12.7 of the SCM Agreement. The United States fails to provide any rebuttal in this regard.  
22. The United States also takes the misconceived argument that since its law refers to the 
requirement of corroboration it fulfills the obligation of obtaining the best or most fitting information as per the mandate given by the Appellate Body in Mexico – Anti-Dumping Measures 
on Rice . India believes that the United States has misunderstood the findings of the Appellate 
Body in Mexico – Anti-Dumping Measures on Rice . What the Appellate Body was referring to was 
the need to engage in a qualitative assessment of  the entire universe of evidence available on 
record. It is a comparative and evaluative approach where all possible facts that are otherwise 
available are considered and an objective determination is to be made as to which among them best fits the gap in the record. The fact that secondary information is to be corroborated to the 
extent practicable does not ensure that all available facts have been evaluated. Furthermore, 
admittedly, this provision only applies for 'secondary evidence' and not in all cases. If the requirement to corroborate allegedly ensures obtaining the best or most fitting information the mere fact that this is being done only in selective circumstances and not always in itself results in 
incompatibility with Article 12.7. Moreover, in term s of the United States' law, corroboration as a 
requirement comes into play only when the decision to apply adverse facts has been reached, whereas the Appellate Body requires the evaluative exercise prior to determining which facts are 
to be applied under Article 12.7. Therefore, the defense raised by the United States is without 
merit.   
Let me now move on to the 'as ap plied' claims raised by India. 
23. Before briefing the Panel on a claim-by-claim basis, India wishes to note one recurring 
theme in the defense raised by the United States. The United States has attempted to provide ex-post facto rationalizations  to justify many of their 'as applied' findings before the Panel. 
Irrespective of what the actual and explicit determinations made upon conclusion of the 
investigations in question, the United States has claimed in their written submissions that the 
evidence on record may otherwise justify its determinations. India would refer to such glaring instances appropriately in the following section.  
Let me now move on to each of the 'as applied' claims raised by India, starting first with 
the sale of iron ore by NMDC. 
24. In paragraph 104 of Second Written Submissions, the United States asserts that NMDC is a 
public body for three different reasons-(a) the Go vernment of India owned 98% of NMDC's shares; 
(b) the Government of India was heavily involved in the selection of the Board of Directors; and (c) NMDC was under the administrative control of  the Government of India. The United States 
even argues in its submissions that NMDC is a governmental authority performing governmental 
functions. The sale of iron ore by NMDC was co untervailed for the first time in 2004 AR and the 
relevant determination did not refer to anything other than government shareholding as the reason for treating NMDC to be a public body. For the first time, a reference was made to the WT/DS436/R/Add.1 
 
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  composition of the board of NMDC in the determination of 2007 AR. Even in the said 
determination, the investigating authority stated that as a matter of law where there was significant government ownership of shares, further evidence was unnecessary. It was stated that mere governmental ownership would be sufficient to justify its finding and that in such cases, the 
burden shifted onto the interested parties to de monstrate that the government did not exercise 
control despite such significant ownership of shares.  
25. In any case, the United States has admitted that it is making ex post facto rationalization  
before this Panel. In its response  to the Panel's query 42(b), the United States agreed that it chose 
to apply a 'simple control test' in its determinations. In fact, their admission that no other factor was considered could be traced back to an entirely different dispute, i.e. US – Antidumping and 
Countervailing Duties (China)  wherein the United States admitted before the Panel that in 
Hot-Rolled Carbon Steel Flat Products from India , the USDOC found that a 98 per cent 
government-owned mining company governed by th e Ministry of Steel was a public body, without 
reference to any more factors. It would be anomalous today for the United States to say anything 
to the contrary.   
26. Even the composition of the board of dire ctors needs a closer look. As the Panel may 
observe from India's Second Written Submission s, apart from 2 directors appointed by the 
Government of India, majority of the directors were all 'independent' and India has placed on 
record evidence explaining the completely uninfluenced and independent role played by such independent directors. In other words, government involvement is extremely minimal in the appointment of the board of directors. There is no government involvement in the functioning of 
the board of directors. It is also noteworthy that  the grant of 'miniratna' and 'navaratna' status to 
NMDC is acknowledged by the United States and India has placed the relevant executive notifications on record showing that the Govern ment of India has granted significantly higher 
degree of autonomy to NMDC. Surprisingly, while th e United States so vehemently argues that it 
has discussed other evidence on record, none of these po ints has been explored or even discussed 
in the determinations under challenge. Therefore, even the ex post facto rationalizations  fail on 
merit. 
27. As to the aspect of NMDC being a gove rnmental authority performing governmental 
functions, India finds the United States' approach startling. Effectively, the United States seeks a 
ruling that the activity of mining is a "governmental function" simply because mineral resources 
are owned by the Government of India and it is the Government of India that grants mining rights. 
This would mean that every mining company is potentially a 'public body'. What the United States fails to appreciate is that there is a close lin k between the requirement of the entity possessing 
governmental authority and this entity performing governmental functions. It is clear from the 
Appellate Body's ruling in US – Antidumping and Countervailing Duties (China)  that what was 
intended to be covered were only those entities vested with the authority to perform the function 
of regulating, restraining, supervising or controlling the conduct of others. It is not as if NMDC 
issues mining licenses or regulates the mining activities of other.  
28. A second significant instance where the United States has placed reliance on such ex-post 
facto rationalization  is their defense to the failure to apply certain in-country benchmarks made 
available by the interested parties in this case. In its First Written Submissions and the Second 
Written Submissions, a number of objections have been taken by the United States that these prices did not reflect any private party transactions and that the price quotes seem otherwise 
unreliable. Once again, none of these objections is recorded anywhere in the determinations under 
challenge and such additional assertions ought not to be considered by the Panel. The Appellate Body in Mexico – Anti-Dumping Measures on Rice  has very clearly laid down that Article 12 
represents a due process system of investigation an d there is a requirement to at least consider all 
the evidence placed on record by the interested parties.  
29. Apart from the aforesaid, the United States al so claims that the above prices did not reflect 
Tier-I benchmarks as they were not prices in actual transactions but only price lists. However, the 
United States adopted the price quotes given in the TEX Reports as reflective of Tier-II benchmark 
and this hypocritical application of Article 14(d) cannot be permitted.  
30. An important issue that India would like to comment upon at this stage is the United States' 
assertion that some of the Exhibits filed by India before this Panel were confidential material. The 
Panel may observe that none of the Exhibits filed by India carry an endorsement on the top of the WT/DS436/R/Add.1 
 
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  page stating "Proprietary Treatment Requested" an d no information or data in the said Exhibits 
has been bracketed. It seems to be the position of the United States that merely because one of 
the exporters (e.g. Tata) had filed certain confidential information anything and everything filed by said exporter shall be considered confidential. The Panel may appreciate the absurdity of this 
stand. If the United States' suggestion were to  be accepted, the other documents filed by this 
exporter, including copies of Indian Law (Cus toms Tariff Notification No. 21/2002), the Hoda 
Report extract and the Expert group Report woul d also become confidential, whereas even the 
United States cannot dispute that these are all public documents.  
31. At issue is Exhibit IND-70, which allegedly contains confidential data. In this respect, India 
provides the following clarifications: 
(i) No. of Licenses Granted by Government of India - The list of all mining concessions granted 
by Government of India is publicly available at www.mines.nic.in. One can obtain the entire 
list for all years (state-wise). From that data, the Government of India as well as Tata consolidated the state lists, segregated the data for 2005-06 and provided it to the 
United States. This was demonstrated to the inve stigating officer during the verification visit 
to Tata. The same list is also part of the Government of India Verification Exhibits, which is entirely a public document.  
(ii) Sesa Goa & Kudremukh Financial Information - The financials were obtained from the 
Internet. The new reports are available at their respective websites. Although past reports have now been removed (which were very much available at the time of the investigation), the past reports can be accessed from http://www.mca.gov.in/MCA21/ . The above 
mentioned website (for filings by Listed Co mpanies) can be accessed by anybody after 
depositing a nominal fee of less than USD 1 (INR 50) per company.  
(iii) The third information is a quotation letter from Essel Mining. There is neither bracketing on 
the information nor a header requesting treatment as Business Confidential Information. It 
is public for the purposes of law. Even if pres umed to be proprietary, the Authorization from 
Tata is on record and predates India's First Wr itten Submissions. In any event, even if this 
information is considered proprietary, it must have at least been used for Tata while 
calculating benefit. 
(iv) The fourth information is a price list from Goa Mineral Ore's Exporters Association. The same 
information is also part of the questionnaire response of the Government of India, filed as 
Exhibit IND-61 before this Panel. At a minimum, it is non-confidential in the Government of 
India questionnaire response and therefore, co uld be filed even without authorization from 
Tata.  
32. To briefly mention about the specificity issue, India submits that before making a 'specificity' 
determination under sub-paragraph (c) of Article 2, the United States did not examine whether the alleged captive mining policy was non-specific under sub-paragraphs (a) and (b) of Article 2. The 
plain language of Article 2.1(c) makes it evident that the United States could not have proceeded 
to an examination of de facto  specificity without examining specificity under Article 2.1(a) and (b). 
Even while making the determination under Article 2.1(c), specific conditions mentioned therein i.e. extent of diversification of economic activiti es and the length of time during which the program 
in question has been in operation were not examined.  
I would now like to address the claims pertaini ng to alleged 'Captive Mining Rights for 
Iron Ore & Coal' programs. 
33. In its First Written Submissions, India has ex plained the features of India's mining rights 
program all of which remain un-rebutted by the Un ited States. The essence of the claim has been 
correctly captured by the Panel in Question No. 29 to India. The fact remains that India only 
grants 'mining leases' for iron-ore. The fact that some of the lessees, in their commercial wisdom, 
choose to be vertically integrated is inconsequential to the grant of rights by the Government of India under the relevant legal regime. There is no separate policy, law or regulation for captive mining and all the lessees pay the same amount of royalty fees and are granted concessions on 
the same terms and conditions.  WT/DS436/R/Add.1 
 
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  34. The United States in its Second Written Submissions also draws the Panel's attention to 
pages 217-18 of the Hoda Report. However, there is not even an iota of evidence on record that 
the Government of India is facilitating captive mining over stand-alone mining. India reiterates that under Article 11, panels must also examine if the competent authority has assessed all 
relevant factors, pertinent facts and given adequate explanation to support their determination.
2 
India submits that for determining specificity under Article 2 of the SCM Agreement, a panel must examine the broader legal framework pursuant to which a subsidy is granted.
3 
35. Not only has the United States has mischaracterized the program as ' captive  mining rights 
for iron ore ', it has also not identified any separate regulation or guidelines governing mining 
rights of iron ore as distinguished from other minerals. This is a fundamental error of fact by the United States, which also vitiates its specificity determination as regards captive mining rights for 
iron-ore. 
36. India submits that granting "mining right for iron-ore and coal" cannot amount to provision  
of iron-ore and coal. India only provides the mining rights against royalty, which constitutes 
roughly 9.03% of the total cost of extracting iron ore in the relevant period, the other 90.97% 
being the cost of extraction incurred by the lessee of the mining rights. There is no reasonable proximate connection between the grant of rights  and enjoyment of the mined mineral by the 
miners. The United States fails to appreciate the need to prove the existence of such reasonable 
proximate connection as has been laid down by the Appellate Body in US – Softwood Lumber IV .  
37. It is worthwhile to note that the United States adopted a notional price for the extracted 
mineral that included cost of extraction, royalty paid and a notional reasonable profit as the 
remuneration received by the Government of Indi a. There is no legal basis for adopting such a 
price as the government price under the programs. 
38. Further, to the extent the benchmarks adopte d for these programs are similar to the one for 
the sale of high grade iron ore by NMDC, the arguments made in respect of the NMDC program 
would apply mutatis mutandis  to these two programs also.  
Next, I would like to deal with the SDF program. 
39. As has already been observed by this panel, the United States does not appear to dispute 
that the JPC is not a public body. The uncontroverted fact remains that JPC was established under a separate legal instrument, has a separate identity and its functions are distinct from that of the 
SDF Managing Committee. Once again, referring to the findings in US 
 Anti-Dumping and 
Countervailing Duties (China) , there is no finding that the JPC has been vested with governmental 
authority to perform governmental functions. It is the JPC and not the SDF Managing Committee, 
which executes the loan documents, disburses the funds and receives the funds.  
40. At this stage, in paragraph 111 of the Second Written Submissions, the United States has 
suggested to this Panel that " under the direction of the SDF Managing Committee, the JPC 
determined the amounts to be levied ". A case has been made out by the United States as if it is 
the SDF Managing Committee that acted as the nodal agency for the SDF program and the JPC as a subordinate agency. It will be a futile attempt to trace any determination that even remotely 
suggests this. In fact, in the original findings in the year 2000 when the SDF program was first 
countervailed, the United States made a distinct ion between collection of funds on the one hand 
and its disbursement on the other.  
41. The United States consistently claims that the SDF levy was 'mandatory'. India requests the 
Panel to reflect on this point a little further. It is admitted that the JPC directed the SDF levy and it is not in dispute now before this Panel that the JPC is a private body, being majority controlled by the participating steel enterprises. There is also no finding  that the JPC was directed by the SDF 
Managing Committee when levying the SDF amounts.  Therefore, participating steel enterprises 
together determined a price hike in their produc ts. Therefore, from the consumer's perspective, 
the increased price is now the price at which the products are made available in the market and 
anyone choosing to purchase from these participating steel enterprises could only buy at this 
increased price. Merely because market player s choose to charge a certain price from the 
                                               
2 Appellate Body Report, US  Cotton Yarn , para. 74. 
3 Appellate Body Report, US  Large Civil Aircraft (Second Complaint), para. 757. WT/DS436/R/Add.1 
 
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  consumers does not make the increase in price equivalent to the taxation function of the 
government in any sense.  
42. Since the JPC was involved in the funds collection and JPC was controlled by the steel 
industry only, the SDF funds were producer levies and the SDF loans did not involve a charge on 
the public account. The SDF levy never became part of the consolidated fund of India and 
therefore, can never be equated to tax revenues.  
43. India also wishes to submit that the United States cannot, at this stage, dispute facts on 
record. In paragraph 114 of its Second Written Submissions, the United States impliedly questions 
the undisputed functioning of the SDF mechanism.  The United States seems to believe that 
competitors cannot cooperate and pool-in money in order to create a common development corpus. India takes strong objection to the United States' stand that this is absurd. The economic 
and other conditions existing in each country va ries and market players are free to choose their 
best mode of operations. The conditions prevailing  in India back in the 1970s may have been such 
that there was a need for creating such a common corpus and it is not for the United States to 
comment on the merits of the approach. In any case, the function of the SDF mechanism was 
never questioned during the investigation phase an d India submits that this cannot be questioned 
at this stage.  
44. Even as regards the SDF Managing Committee, the United States determined it to be a 
public body on the sole basis of governmental control due to composition of the committee. This 
fails to satisfy the test laid down in US 
 Anti-Dumping and Countervailing Duties (China) . While 
the United States argues at this stage that the SDF Managing Committee performs a 
'governmental function', such a finding is absent in the determination under challenge. Such 
arguments are merely ex-post facto  rationalizations  that are to be rejected by the Panel. India also 
reiterates that the domestic notifications issued pertaining to the SDF clearly point out that the authority to operate the fund vested only with the JPC, which is not a public body.  
I would briefly address India's claim regardin g the injury examination conducted by the 
United States. 
45. The United States raises several additional arguments in defense of its original injury 
determination. India submits that all such analysis never formed part of the injury determination 
made by the United States. Table V-13 highlights  no segregation of data of dumped imports 
vis-à-vis subsidized imports; it merely tabulates the data for each country without further examination of the data. The narrative portion of the injury determination does not even make the 
effort to segregate the data based on the dumped imports and subsidized imports. 
46. In relation to the evaluation of mandatory injury parameters, the United States observes 
that even though there is no written record, it has indeed evaluated the mandatory parameters as 
required under Article 15.4 of the SCM Agreemen t as interpreted by the Appellate Body in EC 
 
Pipe and Tube Fittings. In EC  Pipe and Tube Fittings, the Appellate Body found that there was 
considerable analysis regarding the mandatory parameters in question, which satisfied the 
requirement under Article 15.4. However, this is not so in the present case. 
Let me now address the claims regard ing application of AFA provisions. 
47. One of the primary arguments in respect of this issue rests on the fact that the 
United States consistently applies the highest possible rate against non-cooperating parties.4 
Applying the highest possible margin in all cases of non-cooperation is contrary to Article 12.7 of 
the SCM Agreement. India notes that the United Stat es does not defend this approach before this 
Panel.  
48. In its First Written Submissions, India had also raised a number of instances where the AFA 
provisions "as applied", are inconsistent wi th Article 12.7 of the SCM Agreement. The 
United States, in its First Written Submissions, fails to justify its finding in all the instances and instead, attempts to rebut only one instance and asserts that every other instance falls in the 
same category.  
                                               
4 India's First Written Submissions, paras. 526-527. WT/DS436/R/Add.1 
 
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  Finally, India would like to deal with the aspect  of investigating new subsidies as part of 
an administrative review. 
49. In relation to the requirement to comply with Articles 11, 13 and 22 of the SCM Agreement 
qua new subsidies in a review proceeding, all that the United States seems to rely upon is that 
none of these provisions are cross-referred in Article 21. Yet, it fails to realize that Article 21 is for 
a 'review' proceeding and does not relate to findings being made for the first time. Rather, according to the United States so long as the products in issue are the same and the exporting 
Member is the same, new subsidies can be added anytime in a review proceeding. To justify this 
argument, the United States asserts that otherwise, Members could change subsidy programs and circumvent imposition of duties. What the United States fails to appreciate is that there is a distinction between asserting an entirely newly  alleged subsidy and asserting that there is a 
continuation of an already existing program after some modification. India's claim does not 
concern the latter case. The mere fact that this may, because of domestic practice, becomes inconvenient to the United States cannot be an ex cuse to not comply with the requirements of the 
SCM Agreement.  
50. The plain words of Article 11 direct an examination of any alleged subsidy and Article 13 also 
states that the consultations are to cover each an d every such alleged subsidy. It would be evident 
to the Panel from the plain words that the Articles 11, 13 and 22 would independently apply to 
each subsidy program and the United States cannot choose to ignore fulfilling these obligations for newly alleged subsidy programs. India's claim is only that Articles 11-13 and 22 represent the due process for investigating into any given subsid y program and in particular, the consultation 
process under Article 13 may provide crucial facts that may lead to the investigating authority not 
proceeding with the investigation against any given subsidy. 
51. India reiterates its position with regard to al l the other claims that are not addressed in this 
opening statement. Mr. Chairman and Members of the Panel, this concludes our opening 
statement. India thanks the Panel for the opportunity  to present it's views in this dispute. India 
would be pleased to provide responses to any questions that the Panel may have. 
 WT/DS436/R/Add.1 
 
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  ANNEX B-7 
ORAL CLOSING STATEMENT OF INDIA – SECOND MEETING 
Mr. Chairman and distinguished members of the Panel 
1. We are now at the completion of the second substantive meeting of the panel in this dispute 
and the Panel has before it, the written submissions of the parties and clarifications provided in 
response to questions from the Panel. India, ther efore, does not feel any need to re-agitate the 
various arguments already forming part of the record. India believes that it has made out a very 
strong case in respect of all its claims and all that the United States has to offer in rebuttal are 
hollow words and repeated efforts to choose convenience over giving effect to the terms of the treaty.  
2. One of the major issues contested between the parties is the interpretation and 
understanding of the terms used in Article 14(d). While India maintains that Article 14(d) 
envisages a two-step process i.e. determining inadequacy of remuneration first prior to calculating benefit, as India explains below, the United States  has taken self-contradictory views on this issue. 
In paragraph 11 of its Second Written Submissions, the United States acknowledges that benefit 
may be calculated under Article 14(d) only upon the existence of a "particular condition", which condition could only be a reference to the "remuneration" being "less than adequate". 
Nonetheless, the United States still prefers to st ate that calculating benefit and examining whether 
the "remuneration" is "less than adequate" is one and the same thing. The Panel may observe, upon further reflection, that all of this arises from the failure on the part of the United States to understand the meaning of the term "remuneration". On this aspect, all that the United States has 
been able to offer the Panel is a vague statement that even though 'remuneration' is a different 
term from 'benefit', they are related.  
3. India submits that the term "remuneration" ca n only mean actual compensation received by 
the provider of the goods. The United States reject s this approach and provides no alternative. In 
paragraph 6 of their opening statement in the second substantive meeting, the United States denies that the term "remuneration" is equal to "c ost to beneficiary". Effectively, according to the 
United States the term "remuneration" means nothing because the United States asserts that it is 
neither the "cost to beneficiary" nor the compensation received by the government provider. Adding to the confusion further, while denying that "remuneration" is equal to "cost to beneficiary", the United States simultaneously asserts in paragraphs 21, 25 of its opening 
statement that assessing the "cost to beneficiary" is reflective of the prevailing market conditions 
for that good. As per the second sentence of Arti cle 14(d), it is the adequacy of the "remuneration" 
that is to be assessed "in relation to the prevailing market conditions" and hence, the assertion of 
the United States in paragraph 21 of its opening statement appears to be that "remuneration" is 
equal to "cost to beneficiary". These mutually contradictory stands only highlight the fact that India's approach is in line with the text and spirit of Article 14(d) and any attempt to deviate from 
this approach would only result in incorrect result as is seen with the submissions of the 
United States. Rather than provide meaning to the actual terms used in the treaty, the United States simply chooses to incorrectly hide itself in statements made by the Appellate Body decisions that did not address the meaning of the te rm 'remuneration' at all. This inability of the 
United States to interpret and give meaning to the terms used in the treaty is carried forward to 
the second 'as such' claim as well. The United States argues in paragraph 24 of its opening statement in the second substantive meeting that th e term "conditions of sale", as it appears in 
Article 14(d), does not refer to contractual conditions of sale. The analysis ends there and the 
United States never explains what else the phrase "conditions of sale" could mean.  
4. On most of the other issues, the United St ates violates fundamental notions of treaty 
interpretation by creating redundancies in the SCM Agreement. For instance, on the requirement 
of the assessing 'negligibility' for the purposes of Article 15.3, the United States fails to account for the use of the word 'each' as it appears ther ein and argues that it is permitted to assess 
negligibility in any manner it may choose, including by an aggregate analysis. Similarly, 
Article 1.1(a)(1)(i) relates only to 'direct' transf er of funds and in their ordinary sense, do not 
cover indirect  t r a n s f e r  o f  f u n d s .  H o w e v e r ,  i n  r e l a t i on to the SDF program, even though the 
SDF Managing Committee but momentarily assuming otherwise was not a 'public body', it is WT/DS436/R/Add.1 
 
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  admitted that the actual loan transfer was effectua ted by the JPC and this indirect transfer is not 
covered under Article 1.1(a)(1). A more startling instance is the United States' argument that Article 15 does not prohibit cumulation of subsidized and non-subsidized (but dumped) imports when determining injury in a countervailing duty investigation even though there is an express 
non-attribution obligation under Article 15.5 of the SCM Agreement.  
5. On the other extreme, the United States has gone to the extent of inserting or modifying 
words into the treaty where it suits its conven ience. While defending its AFA provision, the 
United States has effectively requested this Panel to insert the sentence "the provisions of 
Annex II of the AD Agreement shall be observed in the application of this paragraph" into Article 12.7 of the SCM Agreement. The United Stat es completely fails to appreciate the subtle 
difference between using Annex II of the AD Agreement as a contextual reference to interpret 
Article 12.7 and adding words to the SCM Agreement. Even where Annex II to the AD Agreement 
refers to the fact that non-cooperation could  lead to inferences that are less favorable to the party 
concerned, the United States modifies this language to assert that non-cooperation would lead to 
inferences that are less favorable to the party concerned. Yet, in defending against India's first 
"as such" claim, despite the fact that list of factors governing "commercial considerations" in Article XVII GATT and "market conditions" in Arti cle 14(d) of the SCM Agreement are identical, 
surprisingly the United States requests the Panel to ignore the same. 
6. Even on the 'as applied' claims, the United States would have the Panel to allow members to 
take extremely unreasonable positions. For instan ce, the United States sought information from 
the interested parties about prices prevailing in India for iron ore and even where the parties did 
produce this information, the United States did not consider them at all in its determinations and 
when questioned, the United States informs th e Panel in paragraphs 35 and 37 of its opening 
statement at the second substantive meeting that this failure is to be attributed to interested 
parties not requesting the United States to use the said prices. The United States also asserts that 
such price lists are not good benchmarks because they are not actual transaction prices and yet, the United States was willing to use negotiation prices, that are not actual transaction prices, 
reflected in the Tex Reports as benchmarks.  
7. The determinations under challenge before this Panel reflect several more glaring instances of 
unreasonable application of the provisions of the SCM Agreement, including those relating to the 
calculation of benefit and the application of the facts available standard. Particularly on the aspect 
of calculating benefit, since 2006, the United States has applied prices of iron ore or coal exported 
from outside India as benchmarks and the compar ison of the United States involved adding 
international ocean freight to the benchmark while domestic freight to the prices under challenge. 
This would mean that countervailing duty is effectively imposed on ocean freight since 
international freight could often be more expensive than domestic freight. In other words, the United States countervailed a service which is not even provided by Government of India under 
the garb of investigating subsidies provided for goods. An even more alarming example is the 
United States' approach when determining the amo unt of benefit in the case of mining programs. 
The United States subtracted the cost of extraction  of the ore (including reasonable profits) from 
the benchmark price of the ore to calculate benefit. If, therefore, the benchmark price is the same 
for two miners, an inefficient miner would have a lower benefit amount than an efficient miner. 
Rather than countervailing subsidy, the United States has adopted a method that has countervailed 'efficiency', which, by no stretch of imagination could have been the intent behind 
Article 14(d). 
8. Therefore, India reiterates that irrespective of how the United States may perceive them, 
India's claims, both 'as such' and 'as applied', are grounded on the text and spirit of the 
SCM Agreement. India believes that the delicate balance envisaged in the treaty is reflected in its 
text and India seeks the indulgence of this Panel to interpret and apply the text of the SCM Agreement in accordance with customary rules of interpretation of the international law.  
9. Mr. Chairman and Members of the Panel, this brings us to the end of India's closing 
statement. We once again thank you for your patient listening and the most efficient manner in 
which the proceedings have been conducted. We are also grateful for accepting India's request to provide an advance copy of the Panel's questions. We also thank the Secretariat for their hard 
work, and meticulous and effective assistance to  the Panel. India would be pleased to provide 
responses to any further questions that the Panel may have. 
_______________ WT/DS436/R/Add.1 
 
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  ANNEX C 
ARGUMENTS OF THE UNITED STATES 
Contents Page 
Annex C-1 Executive Summary of the First Written Submission of the United States C-2 
Annex C-2 Oral Opening Statement of the United States – First Meeting C-9 
Annex C-3 Executive Summary of the Second Written Submission of the United States C-16 
Annex C-4 Executive Summary of the Oral Openin g Statement of the United States – 
Second Meeting C-24 
 WT/DS436/R/Add.1 
 
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ANNEX C-1 
EXECUTIVE SUMMARY OF THE FIRST WRITTE N SUBMISSION OF THE UNITED STATES 
I. INTRODUCTION 
1. The Agreement on Subsidies and Countervailing Measures ("SCM Agreement") represents a 
balance between disciplining the use of subsidies and countervailing measures while, at the same 
time, enabling WTO Members whose domestic industries are harmed by subsidized imports to use 
such remedies. Applying U.S. laws and regula tions consistent with the SCM Agreement, the 
U.S. Department of Commerce ("Commerce") determined that the Indian government, at both the central and state levels, provided a wide range of subsidies to Indian manufacturers of hot-rolled steel products. The U.S. International Trade Commission ("Commission") further determined that 
those subsidies resulted in material injury to the industry of the United States.  
2. India claims that these determinations, and in some cases, the laws and regulations on 
which they were based, are inconsistent with the SCM Agreement. The United States will 
demonstrate in this submission and over the course  of the proceedings before the Panel that India 
is incorrect. The United States believes that India's claims are without merit and that the Panel should find that the U.S. laws, regulations, and determinations that are properly within its terms of 
reference are not inconsistent with the covered agreements.  
II. PRELIMINARY RULING REQUESTS 3. India raises claims in its First Written Submission that are outside the Panel's terms of 
reference. Specifically, India raises claims under Article 11 of the SCM Agreement that were not 
included in its panel request pursuant to Articl e 6.2 of the DSU and which failed to present the 
problem clearly, and which are therefore outside the Panel's terms of reference. India also raises claims regarding a Sunset Review determinatio n issued by the Department of Commerce on 
March 14, 2013, which also was not included in India's panel request as required by Article 6.2. 
Accordingly, the United States respectfully requests that the Panel find that these claims are outside the Panel's terms of reference. 
III. THE U.S. REGULATION FOR DETERM INING THE BENEFIT WHEN GOODS ARE 
PROVIDED BY A GOVERNMENT FOR LESS THAN ADEQUATE REMUNERATION IS CONSISTENT WITH ARTICLE 14(d) OF THE SCM AGREEMENT 
4. First, India argues that Section 351.511(a)(2)(i )-(iii) of the U.S. regulation is inconsistent 
"as such" with the first sentence of Article 14(d). India argues for a methodology of calculating 
benefit based on "cost to government." India's inte rpretation contravenes the text, particularly the 
title and chapeau  of Article 14. The title of Article 14 stat es that the provision concerns "calculation 
of the amount of a subsidy in terms of the benefit to the recipient." The chapeau  of Article 14 
makes clear that an investigating authority must provide for a methodology in law or regulation that allows it to calculate "the benefit to the recipient." Moreover, Article 1.1 states that "a subsidy 
shall be deemed to exist" where there is "a fina ncial contribution by a government or any public 
body" and "a benefit is thereby conferred;" no additional analysis focused on cost to government is required. Finally, the "cost to government" standard was already considered and rejected by the Appellate Body in Canada – Aircraft . In contrast to India's interpretation, 
Section 351.511(a)(2)(i)-(ii) of the U.S. regulation calculates the benefit from the provision of 
goods by a government by determining adequacy of  remuneration with respect to the recipient.  
5. Second, India argues that Section 351.511(a)(2)(i)-(iii) of the U.S. regulation is inconsistent 
"as such" with the second sentence of Article 14(d) . Rather than basing its argument on the actual 
text of Article 14(d), India argues that the U.S. regulation is inconsistent with text taken from Article XVII:1(b) of the GATT 1994. Such an approach should be rejected. WT/DS436/R/Add.1 
 
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  6. Third, India argues that Article 14(d) esta blishes a right of Members to provide goods for 
adequate remuneration without facing CVD measures. India misinterprets the text. Article 14 establishes procedural guidelines for Members' investigating authorities to follow when calculating the amount of subsidy in terms of benefit; to the extent the methodology or methodologies 
employed by an investigating authority are consistent with Article 14, this obligation has been 
satisfied. 
7. Fourth, India argues that the U.S. regulati on, by excluding government prices from the 
benchmark in some circumstances, is inconsistent "as such" with Article 14(d). The calculation of 
"benefit" requires that the financial contribution at issue must be excluded from the benchmark, and the prices of similar goods sold by private su ppliers in the country of provision are to be the 
primary benchmark for calculating benefit.  
8. Fifth, India asserts that Article 14(d) precludes out of country benchmarks. The text of 
Article 14(d) allows, and the Appellate Body has confirmed, where in-country private prices are not useable, an investigating authority may use a benchmark other than private prices of the goods in 
question in the country of provision. 
9. Finally, India argues that the U.S. regulati on requires the countervailing of "comparative 
advantages." The United States understands India to mean that there may be factors for which a 
particular out-of-country benchmark needs to be adjusted before determining adequacy of 
remuneration in a particular market. The U.S. regulation allows for such adjustments and therefore is not inconsistent with Article 14(d). 
IV. SECTION 351.511(a)(2)(iv) OF THE U.S. REGULATION PROVIDES FOR 
ADJUSTMENTS WHEN DETERMINING THE ADEQUACY OF REMUNERATION 
CONSISTENT WITH ARTICLES 14(d), 19.3, AND 19.4 OF THE SCM AGREEMENT  
10. India claims that, by including delivery costs in the benchmark price, the U.S. regulation is 
inconsistent with Article 14(d), and consequently with Article 19.3 and 19.4. Commerce makes 
price adjustments for delivery charges for both the benchmark price and the government price. The U.S. regulation therefore ensures that the benchmark and the government prices are 
compared at the same point in the distribution chain, and is consistent with the adjustments for 
"transportation" set out in the second sentence of Article 14(d). The U.S. regulation is therefore not inconsistent with Article 19.3 and 19.4. 
V. THE CUMULATION PROVISIO NS OF THE U.S. STATUTE ARE NOT INCONSISTENT, AS 
SUCH, WITH ARTICLE 15 OF THE SCM AGREEMENT 
11. Despite India's claims to the contrary, the cumulation provisions of the U.S. antidumping 
and countervailing duty statutes are not inconsistent, as such, with Article 15 of the 
SCM Agreement. These provisions of the U.S. statute, which permit the Commission to cumulate 
subsidized and dumped imports in original investigations and sunset reviews, are fully consistent with the text, object and purpose of the SCM and AD Agreements, which authorize Members to 
provide relief to industries being injured by unfairly traded imports from a variety of sources. 
Although India claims that Article 15.3 of the SC M Agreement prohibits such an approach, nothing 
in the text of Article 15.3 prohibits, explicitly or implicitly, the cumulation of subsidized and dumped imports. Instead, the article only addresses the conditions under which an authority may 
cumulate imports from multiple countries that are subject to simultaneous countervailing duty 
investigations.  
12. Additionally, with respect to the statutory provisions governing cumulation in sunset 
reviews, India's claims of inconsistency with Article 15 are premised on the mistaken belief that 
Article 15 is applicable to an authority's likely injury determination in sunset reviews. The Appellate Body has consistently rejected the view that the injury provisions of Article 15 of the 
SCM Agreement and Article 3 of the AD Agreement ar e directly applicable to an authority's likely 
injury determination in sunset reviews. Furtherm ore, India's as such challenge to the sunset 
provisions of the statute necessarily fails because the U.S. statute does not mandate cumulation in sunset reviews. Instead, the statute explicitly gives the Commission discretion not to cumulate any 
subject imports, whether dumped or subsidized , in a sunset review, even if the statutory WT/DS436/R/Add.1 
 
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  standards are met. As a result, India cannot establish that, in the sunset context, the U.S. statute 
mandates that action by the Commission that is inconsistent with the SCM Agreement. 
VI. THE COMMISSION'S CUMULATION DE TERMINATIONS FOR HOT-ROLLED STEEL 
IMPORTS FROM INDIA ARE NOT INCONSISTENT, AS APPLIED, WITH ARTICLE 15 
OF THE SCM AGREEMENT 
13. India also has no basis for the argument that the Commission's cumulation of subsidized 
imports of hot-rolled steel from India with dumped hot-rolled steel imports in its injury and sunset 
determinations was inconsistent, as applied, with Article 15 of the SCM Agreement. The 
SCM Agreement does not prohibit the cumulation of subsidized and dumped imports in original investigations or sunset reviews, as India claims . Again, cumulating all unfairly traded imports, 
whether dumped or subsidized, is consistent with the object and purpose of the SCM and 
AD Agreements, which authorize Members to provide relief to industries that are being injured by 
simultaneous unfairly traded imports from a variety of sources. 
14. Furthermore, in its injury determination, the Commission did not fail to "evaluate" 
three factors (that is, growth, return on investment, and ability to raise capital), as contemplated 
by Article 15.4 of the SCM Agreement, as India cl aims. The Appellate Body has made clear that an 
authority is not required to make specific findings for each specified impact factor as part of its 
overall injury analysis. Instead, the Commission's report shows that it obtained and evaluated the 
data pertaining to the industry's condition, including the factors of growth, return on investment, and ability to raise capital, in the manner contemplated by Article 15.4.  
VII. THE U.S. MEASURES REGARDING FACT S AVAILABLE ARE NOT INCONSISTENT AS 
SUCH WITH ARTICLE 12.7 OF THE SCM AGREEMENT  
15. The United States submits that nothing in th e U.S. statute or regulations regarding the use 
of facts available is inconsistent with the SCM Agre ement. First, the U.S. statute and regulations at 
issue do not require the use of adverse inferences in  selecting among the facts available. It is well 
established under GATT and WTO jurisprudence th at legislation of a Member violates that 
Member's WTO obligations only if the legislation mandates action that is inconsistent with those 
obligations or precludes action that is consistent with those obligations. The text of the U.S. laws 
makes clear through use of the term "may" that Commerce has the discretion either to employ or not employ the use of an adverse inference in selecting from among the facts available. Because these provisions do not mandate the administering authority to take the actions challenged by 
India, India's "as such" claims must fail at the outset. 
16. Notwithstanding the discretionary nature of th e U.S. laws, the U.S. measures are consistent 
with Article 12.7. Article 12.7 enables investigating authorities to make determinations based on 
the facts otherwise available when interested parties and Members have failed to provide 
necessary information. India argues that Article 12.7 does not include an express provision concerning "adverse" facts available and therefore prohibits this practice. It further argues that 
authorities are bound to use the "best" information available, based on the context provided by 
Annex II to the AD Agreement. India's interpretation of Article 12.7 is wrong. Given the limited investigative powers of an investigating authority, Article 12.7 provides authorities with an essential tool for dealing with uncooperative parties, and ensures that an interested party may not 
evade the application of countervailing duties, or obtain a more favorable duty margin, through 
non-cooperation. Nothing in Article 12.7 limits the application of facts available to those facts that are most favorable to the interested party who fails to supply information, nor does the ordinary 
meaning of the term "facts available" speak to which facts should be selected. Annex II of the 
AD Agreement does provide context regarding the us e of facts available, but specifically allows 
that "if an interested party does not cooperate and thus relevant information is being withheld 
from the authorities, this situation could lead to a result which is less favourable to the party than 
if the party did cooperate."  
17. The U.S. measures allow Commerce to "use an inference that is adverse to the interests of 
that party in selecting from among the facts otherwise available" if it determines that a party "has 
failed to cooperate by not acting to the best of its ability to comply with a request for information". 
If Commerce relies on secondary information in making its determination, that information must be corroborated to the extent practicable. Other WTO Members have similar laws. Therefore, the WT/DS436/R/Add.1 
 
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  U.S. measures are not inconsistent with a proper interpretation of Article 12.7 of the 
SCM Agreement. 
VIII. COMMERCE'S APPLICATION OF FACT S AVAILABLE WAS CONSISTENT WITH 
ARTICLE 12.7 OF THE SCM AGREEMENT  
18. India also challenges the program-specific subsidy rates that Commerce applied in the 2006, 
2007, and 2008 administrative reviews, and claims that Commerce applied the U.S. measures in a 
punitive manner and made determinations without a factual foundation. In each of the challenged 
administrative reviews, it is undisputed that necessary information was not provided, as 
requested, and therefore Commerce properly resort ed to the application of facts available under 
Article 12.7. In each case, Commerce examined th e available evidence and, where there was no 
information to the contrary, Commerce reasonably inferred that the refusing party benefitted from 
the subsidy program in question, and benefitted at the same rate as a cooperating party was 
found to benefit in this proceeding, or, if necessary, another proceeding pertaining to India. These determinations were thus based on facts available on the record in the proceeding, and the refusal 
of these companies to provide any necessary information with respect to the benefits they 
received was properly taken into account in sele cting from among the fact s available. Therefore, 
India has failed to demonstrate the Commerce acted inconsistently with Article 12.7 of the 
SCM Agreement in making its determinations based on facts available. 
IX. COMMERCE ACTED CONSISTENTLY WITH ARTICLES 1.1, 1.2, AND 14 WITH 
RESPECT TO THE PROVISION OF HIGH GRADE IRON ORE BY NMDC 
19. First, India claims that Commerce's public body determinations in the challenged 
investigation are inconsistent with Article 1.1(a)(1) of the SCM Agreement because Commerce 
based its determinations on "[m]ere majority shareholding by government" or "solely" on "alleged control by a government." India fails to provide the Panel with arguments necessary to support its 
claims, because India relies on an erroneous interpretation of Article 1.1(a)(1). When interpreted 
according to the customary rules of treaty interpretation of public international law pursuant to Article 3.2 of the DSU, the term "public body " means an entity that is controlled by the 
government such that the government can use that entity's resources as its own. India has not 
presented any legal argument demonstrating that Commerce's determinations are based on an understanding of the term "public body" contrary to Article 1.1(a)(1) of the SCM Agreement, when 
properly interpreted. 
20. Even if the Panel finds that India's interpretation of Article 1.1(a)(1)(iv) is appropriate, and 
that Commerce should have applied the test set out by the Appellate Body in US – Anti-Dumping 
and Countervailing Duties (China) , the United States respectfully requests the Panel to further find 
that the record evidence available during the investigation would support a finding that NMDC is a 
"public body." Specifically, the record evidence indicates that the NMDC is a public body because it is over 98% owned by India and has the authorit y to perform Indian governmental functions. 
21. Second, India claims that Commerce's determination that India's provision of iron ore for 
less than adequate remuneration was specific to ce rtain enterprises was inconsistent with Article 2. 
India argues that Commerce failed to establish that the provision of iron ore for less than adequate remuneration was used by a "limited number of ce rtain enterprises." Article 2.1(c) specifically 
provides that de facto  specificity may be found in light of the use of a subsidy program by a limited 
number of certain enterprises, and the chapeau  of Article 2.1 clarifies that "certain enterprises" 
includes an "industry" or "group of industries ." Therefore, where the recipients of a subsidy 
constitute an industry, only comparing producers of a similar product would be circular. Rather, 
under Article 2.1(c), a panel or investigating authority is to decide whether the recipients of the subsidy constitute a discrete segment of the ec onomy and are therefore "certain enterprises." 
Commerce's determinations demonstrate that Indian users of iron ore constitute a discrete 
segment of the Indian economy.  
22. India also argues that Article 2.1(c) of the SCM Agreement does not permit a de facto  
specificity finding where the inherent characteristi cs of the product, rather than the program itself, 
make the product useful only to certain enterprises. There is no basis in the text of Article 2.1(c) 
for such an assertion, and a WTO panel has already considered and rejected it. WT/DS436/R/Add.1 
 
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  23. India claims that Commerce failed to consider the extent of economic diversification in India, 
as well as the length of time high-grade iron ore has been sold in India, as required by the third sentence of Article 2.1(c). Commerce did account for the fact that India's economy is highly diverse and that only a limited number of enterprises use iron ore. Commerce also stated that the 
only industries that could receive the subsidy over time would be defined as part of the original, 
limited group of beneficiaries – those that use iron  ore – and therefore further consideration of the 
duration of the subsidy was not necessary.  
24. Additionally, contrary to India's assertions, Commerce's specificity determination concerning 
the GOI's provision of iron ore at less than adequate remuneration is substantiated by positive evidence and is consistent with Article 2.4 of the SCM Agreement. 
25. Third, India claims that Commerce's benchmarks for determining whether the NMDC's sales 
of high grade iron ore were for less than adequate remuneration are inconsistent with Article 14. 
First, India argues that Commerce should have determined whether a benefit was conferred by 
using a "cost to government" standard. For the same reasons as discussed with respect to India's 
"as such" claim made on that basis, the argument should be rejected. 
26. India also argues that Commerce improperly relied on out-of-country benchmarks because 
in-country price information was available. Commerce could not rely on this information because it 
was incomplete and would reveal proprietary data of an Indian respondent.  
27. Finally, India argues that the world market prices used by Commerce were improper 
because they were not identical to the market conditions in the country of provision, that Commerce improperly countervailed India's "comparative advantage, and that including ocean 
freight and import duties is inconsistent with pr evailing market conditions in India. Article 14 
requires that world market prices relate or re fer to, or is connected with, prevailing market 
conditions in the country of provision, not that the prices be identical. Second, for the reasons 
explained above, Commerce can and does make adjustments appropriate for factors India 
describes as "comparative advantage." Third, India's position that prices must be compared on an ex-mine basis would mean the price comparison wo uld not reflect prevailing market conditions.  
X. COMMERCE'S DETERMINATIONS THAT THE PROVISION OF CAPTIVE MINING 
RIGHTS FOR IRON ORE AND COAL CONS TITUTES A FINANCIAL CONTRIBUTIONS, 
ARE SPECIFIC TO CERTAIN ENTERPRISES, AND PROVIDE BENEFITS TO THE RECIPIENTS ARE NOT INCONSISTENT WITH AR TICLES 12.5, 1.1, 1.2, 2, AND 14 OF 
THE SCM AGREEMENT  
28. India claims there is no "captive" mining rights program for iron ore in India and that 
Commerce's findings of such a program are contra ry to Article 12.5 of the SCM Agreement. The 
record evidence demonstrates that India has a captive mining programs for iron ore and coal, and 
by relying on that evidence, Commerce met its obligations under Article 12.5. 
29. India also argues that the GOI's granting of mineral rights does not constitute the provision 
of goods within the meaning of Article 1.1(a)(1 )(iii). As the Appellate Body has found, when a 
government provides a right to a good, the government "makes available" the good itself. As determined by Commerce, India provided the rights  to iron ore and coal to steel producers, and 
therefore made a financial contribution within the meaning of Article 1.1(a)(1)(iii). 
30. India claims that Commerce's specificity determination with regard to the provision of 
mining rights for iron ore and coal are inconsiste nt with Article 2 of the SCM Agreement. Record 
evidence demonstrates that India maintains captive iron ore mining programs that are de facto  
specific to the steel industry, and captive coal mining programs that are de jure specific to certain 
enterprises. As such, Commerce's determination of  specificity was consistent with Article 2.  
31. Finally, India argues that Commerce's calculation of the benefit for India's leasing of captive 
mining rights for iron ore and coal are inconsistent with Article 14(d) of the SCM Agreement. For 
the same reasons as above, India's argument that the calculation of benefit should be determined 
by reference to the cost to the government of the financial contribution should be rejected. India's argument that Commerce was required to compare the mining rights at issue to a benchmark 
based on mining rights values sourced in other countries is also incorrect. Commerce properly WT/DS436/R/Add.1 
 
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  relied on the cost of mining rights in the country of provision, comparing recipients' actual mining 
and delivery costs and profit, and comparing that result to a market benchmark. 
XI. THE UNITED STATES COMPLIED WITH ARTICLES 1, 14, AND 22 OF THE 
SCM AGREEMENT WITH REGARD TO ITS FINDINGS RELATING TO THE 
SDF PROGRAM IN THE CHA LLENGED DETERMINATIONS 
32. First, India claims that Commerce's finding with respect to the SDF Managing Committee 
was inconsistent with Article 1.1(a)(1) of the SCM Agreement because neither the SDF Managing 
Committee nor the JPC was properly determined to be a public body in accordance with 
Article 1.1(a)(1). However, based on the record evidence, Commerce found that the SDF Managing Committee made all final decisions on loans, incl uding setting the terms and approving waivers of 
SDF loans. Because this committee decided whethe r or not to provide loans to Indian steel 
companies at advantageous rates, and because this committee was comprised exclusively of GOI 
senior officials, it is clear that, at a minimum,  the GOI controlled the SDF Managing Committee for 
purposes of Article 1.1(a)(1), such that it coul d, and did, use its resources as its own. In the 
alternative, even under the interpretation of "public body" set out by the Appellate Body in US – 
Anti-Dumping and Countervailing Duties (China) , Commerce's determination is consistent with 
Article 1.1(a)(1), because the SDF Managing Committee performed governmental functions, and 
because the GOI exercised meaningful control ov er the SDF Managing Committee. Having made 
this determination, Commerce did not need to make an additional determination regarding entrustment or direction pursuant to Article 1.1(a)(1)(iv). 
33. India also contends that the SDF loans cannot be considered "a direct transfer of funds" 
within the meaning of Article 1.1(a)(1)(i), beca use "the SDF levy was not [the GOI's] own fund 
and is not tax revenue." To the contrary, however, the facts demonstrate that Commerce reasonably concluded that the SDF levy operated as a tax imposed on consumers, over which the 
GOI, through the SDF Managing Committee, had complete control. Consequently, the loans 
provided using these funds were "made available"  to steel producers by the GOI, and therefore 
constituted a "direct transfer" within the meaning of Article 1.1(a)(1)(i).  
34. India also claims that Commerce's benefit calculation in the challenged determinations were 
inconsistent with Article 14(b). India first challenges Commerce's benchmark calculation as comparing the amount paid for the SDF loans with the amount that Tata would have paid on a "comparable commercial loan" in accordance with Article 14(b) of the SCM Agreement. India's 
claim is without merit. Commerce properly used  as a commercial benchmark interest rate an 
average of certain Prime Lending Rates, compiled an d published by the Reserve Bank of India, for 
loans similar to the SDF loans in currency, structure and maturity, and this rate was comparable 
within the meaning of Article 14(b) of the SCM Agreement. 
35. India also challenges Commerce's benefit calculation overall, in the challenged proceedings, 
as not accounting for Indian steel producers allegedly contributing their own funds and incurring 
certain costs to participate in the SDF program. Commerce acted consistently with Article 14 in not 
providing a "credit" in its benefit calculations for the funds that were levied on consumers and remitted by steel producers to the SDF fund, or any administrative fees incurred to obtain the SDF loans. 
XII. THE UNITED STATES DID NOT ACT IN CONSISTENTLY WITH ARTICLES 11, 13, 21 
AND 22 OF THE SCM AGREEMENT WITH REGARD TO NEW SUBSIDY ALLEGATIONS 
EXAMINED IN ADMINISTRATIVE REVIEWS 
36. India claims that the United States acted inconsistently with Articles 11.1, 11.2, 11.9, 13.1, 
21.1, 21.2, 22.1, and 22.2 of the SCM Agreement with respect to its review of new subsidies programs within the context of administrative reviews. India premises these claims on the 
erroneous proposition that an investigating authority may not levy countervailing duties pursuant 
to administrative reviews on subsidy programs that were not examined in the original investigation. In India's view, then, the United  States was required to examine new subsidies 
programs only upon receipt of a complete written application complying with Articles 11.1, 11.2 
and 11.9; that it was required to initiate a new investigation into these programs pursuant to 
Article 11.1; that it was required to invite India for consultations regarding its examination of these new programs pursuant to Article 13.1 as a result of its initiation of a new investigation; and WT/DS436/R/Add.1 
 
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  that it was similarly required to issue a public notice upon "initiation" of a new investigation in 
compliance with Articles 22.1 and 22.2. As a result of its having examined these subsidies programs instead in the context of administrative reviews, under Article 21, India claims that the 
United States has additionally violated Articles 21.1 and 21.2 of the SCM Agreement. 
37. Because they are all premised on the same erroneous interpretation, each of India's claims 
under Articles 11, 13, 21 and 22 of the SCM Agreement must fail. Given the language and structure of the SCM Agreement, and the similar language and structure of the AD Agreement, 
findings of panels and the Appellate Body have confirmed that requirements found in provisions 
applicable to a countervailing duty or anti-dumping investigation  will not automatically be read into 
those provisions expressly applying to proceeding s that take place after the conclusion of an 
original investigation, such as administrative or sunset reviews . The terms of Articles 11.1, 11.2, 
11.9, 13.1, 22.1 and 22.2 indicate that their requirem ents apply to events occurring early on in an 
"investigation", and the provisions do not contain any reference that would broaden their scope to events or proceedings occurring after the comple tion of such an investigation. Furthermore, 
Article 21, which does apply to subsequent "rev iew" proceedings, does not contain a reference 
incorporating these provisions of Article 11, 13 and 22. Therefore, India's claims regarding to 
Articles 11, 13 and 22 cannot succeed with respect to actions taken by Commerce in the context of 
administrative review proceedings. On the other hand, the purpose of subsequent reviews under 
Article 21 is to "examine whether the continued imposition of a duty is necessary to offset subsidization." By including in its reviews of this countervailing duty order allegations of additional subsidization programs with respect to the same product and the same companies at issue in the 
original investigation, Commerce acted consistently with that provision. For these reasons, the 
Panel should reject India's claims under Articles 21.1 and 21.2 of the SCM Agreement. 
XIII. COMMERCE'S DETERMINATIONS WERE NO T INCONSISTENT WITH ARTICLE 22.5 OF 
THE SCM AGREEMENT 
38. India argues that Commerce did not adequately explain its rejection of a few specific 
arguments put forth by the respondents with respec t to the SDF program, captive mining rights for 
iron ore and coal, and the sale of high grade iron  ore by the NMDC. Article 22.5 requires that an 
investigating authority must provide public notice of its determinations, including explanations of the legal and factual bases of the determination, and reasons for the acceptance and rejection of parties' relevant arguments. For each of the part ies' arguments cited by India in its submission, 
Commerce explained the reasons for rejection, as explained in the portions of the U.S. submission 
corresponding to each of these subsidy programs . Thus, while India may disagree with the reasons 
provided in Commerce's determinations, the fact remains that Commerce did provide the 
information required under Article 22.5, and therefor e did not act inconsistently with its obligations 
under that provision.  
XIV. CONCLUSION 
39. For the foregoing reasons, the United States respectfully requests that the Panel reject 
India's claims. 
 
 
 
 WT/DS436/R/Add.1 
 
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  ANNEX C-2 
ORAL OPENING STATEMENT OF THE UNITED STATES – FIRST MEETING 
Mr. Chairman, members of the Panel: 
1. On behalf of the U.S. delegation, I would like to thank you, as well as the Secretariat, for 
your work in this dispute. As can be seen from th e length of the written submissions thus far, this 
dispute contains numerous claims and deals with often complex issues. Ultimately, however, this dispute concerns the "delicate balance" attained in the Agreement on Subsidies and Countervailing 
Measures  ("SCM Agreement") "between the Members that sought to impose more disciplines on 
the use of subsidies and those that sought to impose more disciplines on the application of countervailing measures."
1 
2. Throughout its first written submission, India has sought to dismantle the rights of Members 
to address the injurious effects of unfair trad ing practices, particularly those caused by 
subsidization, one of the most significant challenges faced by Members today. India has repeatedly asked the Panel to adopt novel – sometimes even radical – and unworkable interpretations of the 
SCM Agreement. In taking this approach, India seek s to impose restrictions on the application of 
measures to countervail subsidies in a manner that goes far beyond the agreement. 
3. In contrast, the United States asks the Panel, consistent with its mandate from the DSB 
under Articles 11 and 3.2 of the Understanding on Rules and Procedures Governing the Settlement 
of Disputes  ("DSU"), to interpret the SCM Agreement in accordance with the customary rules of 
interpretation reflected in the Vienna Convention on the Law of Treaties so as to protect and maintain the balance of rights and obligations it contains. The United States appreciates well the 
balance struck in the SCM Agreement between Memb ers that seek to impose more disciplines on 
the use of subsidies versus Members that seek to  impose more disciplines on the application of 
countervailing measures. For example, while the United States appears before this Panel as a 
responding party, over the past year the United States has been a complainant in three disputes 
involving the imposition of countervailing duties, as well as both a complaining party and a responding party in disputes involving claims of WTO-inconsistent subsidies. The United States, 
therefore, seeks to maintain the integrity of the SCM Agreement and the balance established by 
that agreement. 
4. We will not repeat here all the points made in the U.S. First Written Submission. Rather, 
today, we will address five issues, beginning with  India's response to the U.S. preliminary ruling 
request. 
I. PRELIMINARY RULING REQUEST 5. As the Panel is aware, the first U.S. submission included a request for a preliminary ruling, 
which addressed several claims in India's submission that were not contained in its panel request.  
6. First, India has raised specific claims under multiple paragraphs of Article 11 of the 
SCM Agreement that reflect alleged "problems" no t identified in India's panel request. As we 
discuss in our request for a preliminary ruling on this matter, in its request – under the very 
general heading "[i]n connection with other issues" – India stated that the United States has acted inconsistently with: 
Article 11 of the ASCM because no investigation was initiated or conducted to 
determine the effects of new subsidies included in the administrative reviews.
2 
7. This very general summary – which does not even refer to a specific paragraph of Article 11, 
much less a specific obligation contained in one of those paragraphs – is not sufficient to present 
                                               
1 US – DRAMS CVD (AB) , para. 115. 
2 United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India : 
Request for the Establishment of a Panel by India, WT/DS436/3 (13 July 2012).   WT/DS436/R/Add.1 
 
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  clearly the claims India went on to raise in its first written submission. Those claims state that the 
United States breached Articles 11.1 and 11.2, as well as 11.9, "by initiating investigation into NMDC and TPS programs in 2004, since the written application of the domestic industry did not 
contain sufficient evidence as to the existence, amount and nature of said alleged subsidies". 
India's claims refer to specific subsidy progra ms, a specific administrative review, specific 
paragraphs of Article 11, and specific obligations contained within those paragraphs. 
8. India attempts to argue in its response to th e U.S. request for a preliminary ruling that the 
United States confuses a complainant's obligation under Article 6.2 to clearly present its claims 
with an obligation for the complainant to present its arguments. But it is India that misinterprets the requirements of Article 6.2. As the Appellate Body has found, where an article of a covered agreement contains several distinct legal obligations, each capable of being breached, a cursory 
reference to that article in a panel request may not reveal which of those obligations is at issue.
3 
Such is the case here. 
9. Article 11 of the SCM Agreement deals with "Initiation and Subsequent Investigation." This 
is a very broad category covering many disparat e obligations contained within 11 paragraphs and 
spread over several pages of the SCM Agreement. Given the variety of claims that may be raised 
under this Article, India's cursory reference to Article 11 and the brief statement included in its 
panel request fall far short of India's requirement to "present the problem clearly."4 
10. India also attempts to shield itself from any failure to meet the requirements of Article 6.2 of 
the DSU by claiming that the United States was no t prejudiced in the preparation of its defense by 
India's deficient panel request. However, it is not necessary for a panel to find that a party has 
been prejudiced in order to find that a panel request fails to satisfy Article 6.2 of the DSU. 
Article 6.2 does not include any qualification or exception indicating that its obligations will only apply under certain circumstances. In particular, Article 6.2 does not provide for an exception in 
cases where it is not demonstrated that a party or third party has suffered prejudice. Rather, 
Article 6.2 applies to all panel requests.  
11. And while some past panel and Appellate Body reports considered prejudice to be a relevant 
issue in assessing whether a panel request satisfied Article 6.2, more recently the Appellate Body 
has been clear: "the panel's terms of reference must be objectively determined on the basis of the panel request as it existed at the time of filing," and "a party's submissions during panel proceedings cannot cure a defect in a panel request."
5  
12. Second, the U.S. preliminary ruling request addresses the claims in India's first written 
submission respecting a "2013 sunset review determination." India does not include in its submission any citation or more specific reference to a U.S. measure. We surmise that India may 
be referring to the Department of Commerce's ("Commerce") final results in the most recent 
sunset review for Certain Hot-Rolled Carbon Steel Flat Products from India, Indonesia, and 
Thailand . These results were issued by Commerce on March 14, 2013 – nearly a year after India 
requested consultations in this dispute, eight months after India submitted its request for the 
establishment of a panel, and one month after the composition of this Panel. 
13. India claims in its response to the U.S. request for a preliminary determination that its panel 
request extends to this subsequent review, because it has included a reference to "amendments, 
implementing acts, or any other related measure" in its panel request. The inclusion of such a 
phrase is not sufficient to cover sunset reviews not included in the consultation or panel request. India's approach is contrary to the requirement in the DSU for requesting consultations on a 
measure before being able to request the establishment of a panel with respect to that measure. 
Furthermore, the Appellate Body has specifically  found that "successive administrative, changed 
circumstances, and sunset review determinations… constitute separate and distinct measures, 
which therefore cannot be properly characterize d as mere 'amendments' to those measures."
6 
                                               
3 Korea – Dairy (AB) , para. 128. 
4 DSU, Art. 11. 
5 EC – LCA (AB) , para. 642; citing  EC – Bananas III (AB) , para. 143;  US – Carbon Steel (AB) , 
para. 127. 
6 US – Zeroing (EC) (21.5) (AB) , para. 192. WT/DS436/R/Add.1 
 
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  II. "AS SUCH" CHALLENGE TO THE U.S. BENEFIT REGULATION 
14. Next, we turn to India's "as such" claims under Article 14(d) of the SCM Agreement. In 
particular, we will discuss India's efforts to avoid the result of calculating the amount of the subsidy in terms of the benefit to its steel producers in favor of a cost-to-government standard 
tailored to exclude India's subsidies programs. As discussed in the U.S. First Written Submission, 
India's arguments are without basis in the text of the SCM Agreement. India's argument has also been considered by, and rejected by panels and the Appellate Body in prior disputes – and the 
reasoning in these reports is persuasive.
7 This alone is more than sufficient to require a finding 
that India's argument must be rejected. Nonethele ss, at today's meeting, the United States will 
add the point that the implications of India's ar guments would be to undermine the disciplines on 
subsidies as set out in the SCM Agreement. Each argument India makes seeks to turn the Panel's 
attention away from the production inputs Indian steel producers have actually received and the 
remuneration they have provided for those inputs, in favor of a series of inquiries directed at the provider of the good. If accepted, India's argu ments would mean that in situations where a 
government or public body has unique control over production inputs – in this case iron ore and 
coal, including mining rights – that government or public body would be able to provide those 
inputs to domestic producers at less than market value without a finding of "benefit" to the 
recipient.  
15. India argues that benefit should not be determ ined with respect to the recipient, but rather 
with respect to whether the government or public body provided the good on the basis of "commercial considerations."
8 This appears to mean, in India's view, that so long as a government 
or public body is providing a good at cost or higher9 – or perhaps just that the government entity 
or public body is profitable overall10 – there can be no benefit to the recipient.  
16. The United States recalls that the preferred benchmark for a benefit analysis is one based on 
the price for which a good is sold by private suppliers in an arm's-length transaction.11 The reason 
for that preference is that a private, profit-max imizing seller will sell its good at the market-
clearing price. As the Appellate Body has noted, "the equilibrium price established in the market 
results from the discipline enforced by an exchange  that is reflective of the supply and demand of 
both buyers and sellers in that market."12 In contrast, India seeks a standard that ignores the 
preferred benchmark of a private price in favor of a standard based simply on some minimal level of profit.  
17. In making such an argument, India implicitly acknowledges that a government or public 
body will not necessarily seek to maximize profit, but may be willing to provide the good in question for less than market value. In attemp ting to reinterpret "adequate remuneration" to 
constitute only a question of minimal profit, India attempts to carve out an exception from the 
SCM Agreement and allow its government and public bodies to provide inputs to its steel producers 
at less than market value.  
18. Moreover, the logical conclusion of using a benchmark based on cost to or profit of the 
provider is that the more the government or public body makes transactions free of market discipline, the less likely a finding of benefit would be. For example, where a government or public body enjoys unique access to a good – such as co ntrol over mining rights of iron ore and coal – 
the result will be that the government or public  body would also enjoy lower costs for acquiring 
those goods. A standard that simply considers whether the government or public body subsequently provides those goods to its producers at or above that artificially lowered cost will 
necessarily be unlikely to find that the recipient has received a benefit from that transaction, even 
when the recipient pays less for the goods than it would on the market.  
19. In short, India first seeks to carve ou t a "cost-to-government" loophole in the 
SCM Agreement, a theory already rejected by the Appellate Body.
13 India then seeks to expand 
                                               
7 See U.S. First Written Subm ission, paras. 28-72. 
8 India First Written Submissions, paras. 23-32, 58-63. 
9 India First Written Submission, paras. 59. 
10 India First Written Submission, paras. 282. 
11 US – Softwood Lumber IV (AB) , para. 90. 
12 EC – LCA (AB) , para. 981 (emphasis added). 
13 Canada – Aircraft (AB) , paras. 154-156. WT/DS436/R/Add.1 
 
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  that loophole to allow a government to place g oods under government control and, by virtue of 
that control, pass those goods to favored producers at a lower price without that transaction being considered a subsidy. To do so, India has recycled arguments that have been considered and rejected by panels and the Appellate Body as havi ng no basis in the text of the SCM Agreement. 
India has gone so far as to attempt to invent a new benefit standard based on the text of an article 
of the GATT 1994 (namely, Article XVII) which is directed at state trading enterprises. The fact that India must look for support not to the SCM Agreement but to a different agreement 
demonstrates that India is seeking to alter Members' rights and obligations under the 
SCM Agreement in order to allow India to subsidize its steel producers by providing goods at less than adequate remuneration. India's effo rts to do so should be rejected.  
III. CUMULATION 
20. India has also challenged U.S. measures permitting the International Trade Commission 
("ITC") to cumulate the effects of dumping and subsidization for imports subject to simultaneous trade remedies investigations. As the United States  explained in its first submission, however, the 
provisions of the U.S. statute governing cumulation in injury and sunset proceedings are fully 
consistent with the text of the SCM Agreement, when  read in context and in light of the object and 
purpose of the Agreement. The text of Article 15.3 of the SCM Agreement does not discuss, let 
alone prohibit, the cumulation of dumped and subsidized imports, as India asserts. Rather, a full 
interpretive exercise that considers the contex t of Article 15.3, including Article 3.3 of the 
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994  
("AD Agreement"), as well as the object and pu rpose of the SCM Agreement, demonstrates that 
the agreement permits the cumulation of dumped and subsidized imports. 
21. Both the SCM and the AD Agreement permit investigating authorities to cumulate imports 
for the purpose of assessing injury. And the Appellate  Body has been clear that the availability of 
cumulation is meant "to ensure that all sources of injury and their cumulative impact on the 
domestic industry are taken into account."
14 Given the aims of the cumulation provisions in both 
the SCM and AD Agreements, India's claim that Article 15.3 of the SCM Agreement prohibits the 
cumulation of both dumped and subsidized imports leads to an anomalous result whereby the 
same injury may be countervailed in some circumstances but not in others.  
22. A simple example using some of the facts of these investigations will help to demonstrate 
this point. Assume that an injury investigation involves imports from five countries that are found 
to be subsidized. In this investigation, assume one Member, Country A, has a small volume of 
subsidized imports. Due to the small volume of imports, imports from this country might not themselves be causing material injury to the industry in a manner that would warrant the 
imposition of countervailing duties under the SC M Agreement. Under Article 15.3, however, an 
authority may cumulate imports from this country with the subsidized imports from the other four countries. In this circumstance, if the subsidized imports from all five countries are found to be 
materially injuring the industry, countervailing duties may be applied to each country, including 
those from Country A.  
23. Now let's change the scenario slightly. Assume that the injury investigation involves imports 
from five countries that are each dumping  their exports of the product, but only one of which 
(again, Country A) is found to be subsidizing  its imports. In this scenario, assume the domestic 
industry is competing with the exact same volume of unfairly traded imports, and the imports are having the same volume and price effects on the domestic industry. Under this scenario, according 
to India's interpretation, the imports from Count ry A may be cumulated with the other dumped 
imports and made subject to antidumping duti es but may not be cumulated with them and 
subjected to countervailing duties, even though im ports from all five countries are unfairly traded 
and injuring the industry in exactly the same manner outlined in our first scenario. 
24. The United States submits that there is no reasonable or logical rationale that can account 
for the difference in this outcome. A harmonious reading of Article 15.3 must lead the Panel to find against India on its claims with respect to cumulation. 
                                               
14 US – OCTG from Argentina (AB) , para. 297. WT/DS436/R/Add.1 
 
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  IV. PUBLIC BODY 
25. India also claims that Commerce erred in a pplying Article 1.1(a)(1) of the SCM Agreement 
when it found subsidies to exist based on the activities of the National Mineral Development Company ("NMDC") and the Steel Development Fund ("SDF") Managing Committee. We have 
responded to India's arguments fully in our first written submission. In particular, we have 
explained that the proper interpretation of Articl e 1.1(a)(1) requires that a public body be an 
entity controlled by the government such that the government can use that entity's resources as 
its own. Despite our disagreement with the Appell ate Body's interpretation of public body in US – 
AD/CVD , however, we think it bears repeating that India has not presented the findings in that 
case accurately. 
26. India attempts to reframe th e Appellate Body's findings in US – AD/CVD  to mean that public 
bodies must not only exist within a "government framework," but that "there has to be the express 
delegation  of the power to regulate, control, or su pervise individuals, or otherwise restrain 
conduct."
15 The basis for India's position appears to be that, because the Appellate Body relied on 
the definition of government in Canada – Dairy , and because the Appellate Body likened the role of 
a public body to that of a government, the definiti on of "public body" must therefore be limited to 
only those entities sharing the characteristics of the Dairy Boards at issue in Canada – Dairy .  
27. India has misinterpreted the findings of the Appellate Body in US – AD/CVD  in a way that 
results in a far more limited definition  of public body. We recall that in US – AD/CVD , the Appellate 
Body was clear that "the precise contours and characteristics of a public body are bound to differ from entity to entity, State to State, and case to case."
16 Therefore, the Appellate Body itself did 
not intend to create an all-purpose, bright-line test. India's interpretation on the other hand would 
lead to a highly formulaic application of the SCM Agreement, and would allow Members to circumvent their obligations merely by foregoing an "express delegation" of governmental 
authority to an entity that would otherwise constitute a "public body." 
28. In fact, the Appellate Body's findings in US – AD/CVD , with respect to state-owned 
commercial banks, directly refute India's proposed interpretation. With respect to China's 
state-owned banks, the Appellate Body found neither an "express delegation" of governmental 
authority, nor any evidence demonstrating that the banks had "the power to regulate, control, or supervise individuals, or otherwise restrain conduct." Rather, the Appellate Body upheld Commerce's finding that the state-owned banks were public bodies based on evidence 
demonstrating the government's meaningful control  over them. The Appellate Body's 
interpretation was applied in a similar way in Canada – Renewable Energy , where the panel found 
that "the Government of Ontario has 'meaningful control' over Hydro One's activities in a way that 
confirms it is a 'public body.'"
17 
29. Therefore, while the Appellate Body did di scuss "governmental authority" and the ways in 
which this authority may manifest itself, it did not,  as India has argued, find that "there has to be 
the express delegation  of the power to regulate, control, or supervise individuals, or otherwise 
restrain conduct."18 Rather, the Appellate Body focused on the meaningful control exercised by the 
government over state-owned banks. The United States urges this Panel also to focus its review in this case on the issue of control, and to find that  an entity can be consid ered a public body where 
the government's control over the entity is such that it can use the entity's resources as its own. 
V. USE OF FACTS AVAILABLE 30. India also challenges U.S. measures governing the use of facts available in countervailing 
duties investigations. In doing so, however, India not only misinterprets and misrepresents U.S. 
law, but wholly misunderstands the obligations of the SCM Agreement with respect to the application of facts available. 
                                               
15 India First Written Submission, para. 225. 
16 US – AD/CVD (AB) , para. 317. 
17 Canada – Renewable Energy (Panel) , para. 7.235. 
18 India First Written Submission, para. 225. WT/DS436/R/Add.1 
 
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  31. India argues that the U.S. measures "authorize using certain information simply because it 
may be adverse to the allegedly non-cooperating party."19 This contention, however, is not 
supported by the text of the U.S. measures. To th e contrary, as discussed in the U.S. First Written 
Submission, the U.S. measures set out specific requ irements for and limitations on the use of facts 
available.20 It is not the case that Commerce may use information "simply because it may be 
adverse"21 to the interests of a responding party. 
32. India also ignores other provisions, specifically within Annex II of the AD Agreement, that 
provide relevant context for understanding the meaning of the term "facts available." Most 
notably, Paragraph 7 of Annex II states, in relevant part, that "[i]t is clear … that if an interested party does not cooperate and thus relevant information is being withheld from the authorities, this situation could lead to a result which is less favourable to the party than if the party did 
cooperate." Given that the respondent's non-cooperation has made unavailable the precise facts 
sought by the authority, inferences are a necessary and unavoidable element in selecting from, and applying, the available  facts. In such a situation, Annex II confirms that the inferences drawn 
in such cases can lead to results less favorable to a party than if the party did cooperate. Such 
inferences are no different in the context of the SCM Agreement than they are in the context of the 
AD Agreement as confirmed by Annex II. 
33. India also seems to understand Article 12.7 of the SCM Agreement, as well as Annex II to 
the AD Agreement, to require that when a responding party refuses to cooperate in a countervailing duty investigation, the responding party must in fact benefit  from the best 
information available – from the responding party's perspective. 
34. However, India takes the term "best information available" out of context. In doing so, India 
seeks to turn the right given to an investigating authority to rely on facts available into an obligation to put a responding party into a better position than they might have been in had they 
cooperated fully with the investigation.  
35. In context, the term "best" facts available in Annex II refers to the most probative, relevant 
and verifiable facts which are timely submitted in the proceedings, and not to those facts which 
are most favorable to the respondent. This interpretation is supported by the substantive 
provisions of the Annex. Those provisions require an authority to take into account all information submitted that is verifiable and timely, and that can be used in the investigation without undue difficulty. It also prevents an authority from disregarding information that "may not be ideal in all 
respects", "provided the interested party has acted to the best of its ability".
22 
36. Therefore, the title of Annex II of the AD Ag reement must be interpreted in light of all the 
safeguards contained in the Annex itself. In other words, the best information available is obtained 
through the application of the provisions of Anne x II. India would turn these provisions on their 
head, and require an investigating authority to use certain information even if it cannot be verified, and even if has not been submitted at all. For ex ample, as can be seen from India's "as applied" 
claims, India believes that the SCM Agreement would allow a responding party to submit 
responses to questionnaires during an initial proceeding, and then require the same information serve as the basis for all subsequent review s. Commerce would therefore be required to assume  
that a party's circumstances have not and will not change, rather than to verify that such is the 
case. 
37. Such an interpretation is clearly unworkable and would tie the hands of investigating 
authorities to the point of undermining countervailing duty investigations altogether. India's 
interpretation would further provide an incentive to producers and exporters to withhold 
unfavorable information to achieve more favorabl e countervailing duty rates, and simultaneously 
frustrate the efforts of the investigating authority to calculate the amount of subsidy accurately. 
We therefore urge the Panel to examine the U.S. measures on their face , and to apply to them a 
proper interpretation of the SCM Agreement, base d on its text, in context, and in light of the 
object and purpose of the SCM Agreement. 
                                               
19 India First Written Submission, para. 178. 
20 U.S. First Written Submission, paras. 171-175. 
21 India First Written Submission, para. 178. 
22 AD Agreement, An nex II, para. 5. WT/DS436/R/Add.1 
 
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  VI. CONCLUSION 
38. Mr. Chairman and members of the Panel, this concludes the opening statement of the 
United States. We thank you for your attention and would be pleased to respond to any questions you may have. 
 WT/DS436/R/Add.1 
 
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  ANNEX C-3 
EXECUTIVE SUMMARY OF THE SECOND WRITTE N SUBMISSION OF THE UNITED STATES 
I. INTRODUCTION 
1. As has been found by panels and the Appellate Body on numerous occasions, the Agreement 
on Subsidies and Countervailing Measures ("SCM Agreement") represents a "delicate balance" 
between disciplining the use of subsidies and count ervailing measures while, at the same time, 
enabling Members whose domestic industries are harmed by subsidized imports to use such 
remedies. India's claims, and its submissions throughout this proceeding, have revealed India's 
intention to skew this delicate balance in its own favor, by asking the Panel to adopt novel - sometimes even radical – interpretations of the SCM Agreement. Consistent with its obligations under Articles 11 and 3.2 of the Understanding on Rules and Procedures Governing the Settlement 
of Disputes  ("DSU"), the United States asks the Panel to deny India's claims, and to protect and 
maintain the balance of rights and obligations a ttained by the negotiators of the SCM Agreement. 
II. INDIA HAS NO BASIS FOR ITS CLAIMS THAT SECTION 351.511(a)(2) OF THE 
U.S. REGULATION IS INCONSISTENT "A S SUCH" WITH ARTICLE 14(d) OF THE 
SCM AGREEMENT 
2. In this dispute, India makes several claims with respect to the consistency of 
Section 351.511(a)(2) – the U.S. regulation for de termining the benefit when goods or services 
are provided by a government for less than adequa te remuneration – with the guidelines contained 
in Article 14(d) of the SCM Agreement.  
3. The text of Article 14 does not support calculating the benefit based on a 
cost-to-government analysis. India offers several flawed textual interpretations to advance its 
argument that Section 351.511(a)(2) is "as such" inconsistent with the Article 14(d) guidelines. In its responses to the Panel's first set of written qu estions, for example, India remains steadfast in 
advancing – incorrectly – a cost-to-government test in determining whether a government 
provides a good or service at less than ad equate remuneration within the meaning of 
Article 14(d); an argument which is clearly incorrect based on the text of the Agreement as well as 
prior panel and Appellate Body reports. In response  to Panel Question 4, India further provides a 
matrix – purporting to divide the benefit calculation for goods or services into a two-step process – in an attempt to support its argument. 
4.  These claims are premised on its misinterpret ation of the text of Article 14(d). For example, 
in response to Panel Question 4 India claims that, in some instances, an investigating authority 
may not be entitled to find a benefit even wher e remuneration is determined to be inadequate. 
Under a proper interpretation of the Article 14(d) guidelines, however, where an investigating 
authority determines that a financial contribution by a government has been conferred and that 
the adequacy of remuneration is insufficient, an investigating authority may find that the amount 
by which the private, arm's-length benchmark pr ice exceeds the government price is a benefit 
under the SCM Agreement.  
5. India also attempts to support its interpretation of Article 14(d) through a flawed textual 
distinction between Articles 14(b)-(c) and 14(d), by erroneously arguing that the term "in relation to" contained in Article 14(d) means that the benchmark analysis under Article 14(d) is somehow 
fundamentally different from that under Articles 14(b) or (c). In making this argument, India 
ignores the parallel structure of paragraphs 14(b), (c) and (d). India also argues that while under 
paragraphs 14(b) and (c) the investigating authority will find the existence of a benefit "the 
moment there is a difference in the amounts being compared," Article 14(d), on the other hand, 
employs a "much broader and more comprehensive fr amework." Contrary to India's assertions, in 
a manner equivalent to 14(b) and (c), the text of the Article 14(d) guidelines provided that where 
the government price is more favorable than the benchmark, a benefit has been conferred.  WT/DS436/R/Add.1 
 
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  6. There is furthermore no support for equating the phrase "commercial considerations" in 
Article XVII of the GATT 1994 with "prevailing market conditions" in Article 14(d). India's position that the phrase "in relation to prevailing market conditions" – the terms actually contained in Article 14(d) – really means "in accordance with commercial considerations" reflects India's 
mistaken theory that the terms used in Article XVII of GATT 1994 may be substituted for those in 
Article 14(d) of the SCM Agreement. In particular , India again incorrectly asserts that the Panel's 
findings in Canada – Wheat support the substitution of these terms.  
7. In the United States view, Section 351.511(a)(2) is consistent with Article 14's preference 
for using private prices for the benchmark when determining whether a good is provided at less than adequate remuneration. India has no basis for challenging the hierarchical structure of Section 351.511(a)(2). With respect to India's argume nts that an import price actually paid by a 
producer in the Indian market is an out-of-country price, and that the inclusion of delivery charges 
is somehow improper, India argues that "prices emanating from countries other than the country in question represent 'out of country' prices." Prices for imported goods, which are paid by 
domestic purchasers, however, are in fact in-country prices; it is for this reason that under the 
U.S. regulation an actual import price is considered a Tier I price – a price, which emanates in the "country in question." India's contention that import prices automatically are Tier II or 
out-of-country prices (referring to the language in US – Softwood Lumber IV (AB) ) is both factually 
incorrect and inconsistent with the realities of domestic markets. 
8. Moreover, India's objection to adjustments for delivery costs is based on its flawed position 
that the adequacy of remuneration under Arti cle 14(d) of the SCM Agreement should be a 
determination with respect to the provider of the goods, using a cost-to-government analysis. 
Under the SCM Agreement, the adequacy of re muneration is assessed with respect to the 
recipient, and the Article 14(d) guidelines contemplate adjustments for prevailing market 
conditions, conditions which explicitly include transportation. India likewise argues that if the 
government price is an ex-mine price, any charge s associated with the delivery of goods should 
not be considered in the benefit calculation. However, this argument fails because an ex-works 
price does not include the cost incurred by the purchaser for getting a purchased input to its 
factory door; an ex-works price therefore is not reflective of the prevailing market conditions from the perspective of the recipient. Prevailing market  conditions are such that a private purchaser (in 
making a purchasing decision) and a private seller (in setting a price at which to sell the good) 
would consider all of the costs associated with getting the good to the factory in setting the market 
negotiated price. India's interpretation would not be in accordance with the purpose of the Article 14(d) benchmark comparison – which is to assess whether the recipient is better off than it 
would have been absent that financial contribution. Commerce's benefit regulation is consistent 
with the guidelines contained in Article 14(d) of the SCM Agreement.  
III. INDIA'S ARGUMENTS REGARDING COMP ARATIVE ADVANTAGE HAVE NO MERIT  
9. In its response to Panel Question 13, India continues to assert an alleged "comparative 
advantage" that must be accounted for in both the use of a Tier II analysis under Section 351.511(a)(2)(ii) and the use of "delivered prices" under Section 351.511(a)(2)(iv). India, however, does not provide any evidence of an alleged comparative advantage, misuses the term 
"comparative advantage", and inappropriately relies on the Appellate Body report in US – 
Softwood Lumber IV  throughout its first written submission and in response to question 13 of the 
Panel's first set of written questions.  
IV. COMMERCE DID NOT ERR IN FINDING THAT  NMDC PROVIDES IRON ORE FOR LESS 
THAN ADEQUATE REMUNERATION 
10. In addition to its "as such" challenges to the U.S. regulation, India has made multiple 
"as applied" claims, including those with respect to: Commerce's determination that NMDC's sales 
of high grade iron ore conferred a benefit, Commerce's determination that the provision of captive mining rights for iron ore and coal was for less than adequate remuneration, and Commerce's benefit calculations in the challenged proceedings. As discussed in the U.S. first written 
submission, many of these claims echo the flawed arguments put forward by India in its "as such" 
challenge.  WT/DS436/R/Add.1 
 
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  11. With respect to India's claims that the NMDC's  sale of high grade iron ore did not confer a 
benefit consistent with Article 14(d) of the SCM Agreement, India's objections lack basis. Commerce appropriately calculated the benefit for the NMDC's provision of iron ore at less than adequate remuneration in the 2004, 2006, 2007 and 2008 administrative reviews. In each of these 
reviews, there were no private, arm's-length prices ("Tier I" prices) for high grade iron ore and 
lumps in the Indian market in the record eviden ce submitted to Commerce. With respect to the 
DR-CLO ore benchmarks, on the other hand, private arm's-length prices were available and on 
record, which meant that Commerce was able to use such actual "Tier I" BCI prices. For all of the 
above, Commerce compared the respective privat e benchmark prices to the NMDC prices on an 
apples-to-apples basis in order determine whether and to what extent NMDC prices were less than adequate remuneration.  
12. The United States did not, as India argues in its response to questions 17 and 19, artificially 
inflate the benchmark by adding in unnecessary delivery costs or, as India argues in response to question 20, by ignoring evidence on the record of private arm's-lengths transactions. In response 
to question 20, India further argues that the explan ations offered by the United States in its first 
written submission are "ex-post facto rationalizations". But it is India and not the United States that is trying to add new arguments to the matters considered during the administrative 
proceeding. During the administrative proceedings at issue, none of the parties argued that the 
information contained in the association chart should be used in calculating the appropriate benchmarks. India raises this argument only now.  With regard to the price quote from Tata, the 
second piece of evidence cited by India, the Un ited States notes that 22 of the 24 pages of the 
exhibit relied on by India – Exhibit IND-70 – are no t, as India asserts, public documents. Rather, 
they are business confidential documents subject to administrative protective order (APO). Accordingly, the pricing data in the docume nt was confidential and could not be used as a 
benchmark for any other party's transactions. 
13. Further, not only is the data confidential  but the data cannot be used as benchmarks 
because they do not reflect actual private, arm's-length transactions. Instead, these documents 
merely contain a price quote and not a completed transaction. Therefore their contents have no 
bearing, as India would purport, on the availability  of a public in-country arm's length private price 
in India with respect to the challenged determinations.  
14. Finally, with respect to the application of Section 351.511(2)(a)(iv), the U.S. provision which 
adjusts for delivered prices, the guidelines contained in Article 14(d) contemplate an 
apples-to-apples comparison by directing Member s to account for prevailing market conditions 
- including transportation – in assessing the ad equacy of remuneration. These charges are an 
integral and inseparable part of determining a be nchmark price that reflects prevailing market 
conditions in the country of provision.  
V. COMMERCE'S FINDINGS WITH RESPECT TO  SPECIFICITY WERE CONSISTENT WITH 
THE SCM AGREEMENT 
15. India makes a series of challenges under Articles 2.1 and 2.4 of the SCM Agreement to 
Commerce's specificity determinations with respect to the GOI's sale of iron ore and captive mining programs. With respect to Commerce's finding that the NMDC iron ore program was used 
by a limited number of certain enterprises, the record evidence demonstrates that almost all of the 
iron ore consumed in India is used for the produc tion of steel, by steel and pig and sponge iron 
producers. Article 2.1 provides that specificity may be found if a subsidy program is "use[d] by a 
limited number of certain enterprises." The question before an investigating authority is whether 
the enterprises or industries are "a sufficiently discrete segment" of the "economy in order to 
qualify as 'specific' within the meaning of Ar ticle 2 of the SCM Agreement." In the 2004, 2006, 
2007, and 2008 administrative reviews, Commerce fo und that the GOI's provision of iron ore was 
de facto  specific to the Indian steel industry because only a limited number of enterprises use iron 
ore. Further, the record evidence showed that 76 percent of the iron ore was used by steel 
producers. Therefore, positive evidence demonstrat es that a limited number of certain enterprises, 
when compared to the diverse economy of India, use the NMDC iron ore program.  
16. India also incorrectly argues that if the "inherent characteristics" of a good limit its use to a 
limited number of certain enterprises, the provisio n of that good cannot be found to be specific. 
Yet there simply is no basis in the text of Article 2 for prohibiting findings of specificity based on 
the good's "inherent characteristics." Rather, as previous panels have correctly found, when the WT/DS436/R/Add.1 
 
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  good provided by the government is of limited utility, it is more likely that a subsidy is conferred 
on certain enterprises. Finally, with respect to India's arguments that the last sentence of Article 2.1(c) required Commerce to specifically address the diversification of the Indian economy 
and the duration of the program, India's assertions  are incorrect and contrary to the findings of 
previous panels with respect to this provision. Commerce in fact did take account of these factors 
but, in the context of a de facto specificity analysis, was not required to address them explicitly in 
its determinations.  
17. India repeatedly denies the existence of a captive mining program for iron ore despite 
record evidence. India further argues that absent a "captive" mining program for iron ore, mining 
rights are generally available under India's mining lease laws and thus not specific under Article 2 of the SCM Agreement. This argument has no merit. The record is replete with evidence confirming 
the existence of a captive iron ore mining policy for four of India's largest steel makers; in 
particular, two extensive reports regarding the Indian steel industry, which were commissioned by the GOI: the Dang Report  and the Hoda Report , as well as newspaper reports identifying the four 
steel companies who have been granted captive mi ning rights pursuant to India's captive mine 
policy. Commerce's finding that India does have a captive mining program for iron ore was based on record evidence, and Commerce thus has a sound basis for finding that the program is de facto  
limited to a few steel companies. 
18. Moreover, contrary to India's assertions, record evidence demonstrates that Tata Steel's 
captive mining rights for coal are subject to India's law on captive mining of coal. In its response to question 25 of the Panel's first set of written questions, for example, In dia avoids answering the 
Panel's yes or no question regarding whether record evidence demonstrates the existence of a 
captive mining program for coal. As explained in  the U.S. first written submission, the GOI's 
provision of a captive mining lease to Tata was specific, as defined by Article 2.1(a) of the 
SCM Agreement.  
VI. U.S. CUMULATION MEASURES ARE NOT INCONSISTENT AS SUCH, OR AS APPLIED 
IN THE UNDERLYING HOT-ROLLED STEEL PROCEEDINGS, WITH ARTICLE 15 OF THE 
SCM AGREEMENT 
19. In its submissions to the Panel, India has pr esented "as such" and "as applied" claims under 
Article 15 of the SCM Agreement with respect to cu mulation in original investigations and sunset 
reviews. As demonstrated in the U.S. first written submission and in the U.S. answers to the 
Panel's questions, India's claims are unfounded.  
20. India's as such and as applied claims under Article 15 of the SCM agreement with respect to 
the cumulation of subsidized and dumped imports in sunset reviews must fail because Article 15 
does not apply to sunset reviews. India included in its Panel Request a challenge to the U.S. 
statute and the Commission's sunset determination under Articles 15.1, 15.2, 15.3, 15.4 and 15.5 of the SCM Agreement to the U.S. statute and the Commission's sunset determination. These 
provisions, however, only govern injury determinations in original investigations, and do not apply 
in the context of sunset reviews. The SCM Agreement does contain obligations with respect to sunset reviews; those obligations, however, are set out in Article 21 of the SCM Agreement. India's panel request does not raise any Article 21 claims with respect to sunset determinations, 
and therefore any such issues are not wi thin the Panel's terms of reference. 
21. In addition to the key difference between the SCM Agreement articles applicable to 
investigations and those applicable to sunset reviews, the United States notes that India 
misunderstands important factual differences between investigations and sunset reviews. Relying 
on EU – Footwear from China , India asserts that the determination in the sunset review relied on 
the determination in the original injury investigation, and therefore is "tainted" by the allegedly 
WTO-inconsistent original injury investigation. India's argument is illogical for two reasons. First, 
the sunset determinations for hot-rolled steel examined a different legal issue than that considered in the original investigation. The original investigation entailed an examination of whether subject imports during the original period of investigation materially injured the domestic industry or 
threatened it with material injury, while the sunset  review involved an assessment of data during 
the period of the sunset review to determine whether the likely volume, price and impact of subject imports were likely to lead to continuation or recurrence of material injury to the domestic 
industry if the orders were revoked. Second, the Commission's determination in the sunset reviews WT/DS436/R/Add.1 
 
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  was based on a very different set of imports than was its original injury determination. In short, 
the original investigation and sunset review were distinct processes with different purposes. 
22. With respect to the consistency of the U.S. cumulation measures in the context of original 
investigations, the United States submits that the text of Article 15.3 does not prohibit cumulation 
of dumped and subsidized imports in original investigations. Moreover, it is not possible, as a 
practical matter, for an authority to disentangle the effects of dumped imports from those of subsidized imports. The difficulty presented by India's interpretation of Article 15 can be seen from 
the fact that in many investigations, significant volumes of subject imports are both dumped and 
subsidized, as was the case in the hot-rolled steel investigations and reviews. In this situation, 
other investigating authorities, such as the Canadian International Trade Tribunal and the Australian Customs and Border Protection Service, have expressed the view that it is not possible 
to "disentangle" the injurious effects of the dumped and subsidized imports. Indeed, India 
acknowledges that it is not arguing that an authority must disentangle the effects of imports that are both dumped and subsidized. By taking such  a position, India implicitly acknowledges the 
validity of the positions expressed by the United States in this dispute. 
23. Therefore, India is incorrect in asserting that the United States in this dispute has stated or 
implied that disentanglement is possible. India's assertion is based on a misunderstanding of a 
discussion in the U.S. first written submission of  volume trends and underselling levels of the 
subject imports in the steel investigations at issue in this dispute. In this portion of the U.S. submission, the United States was responding to India's partial portrayal of the record. In particular, the United States pointed out that the record of its original investigations showed the 
volume of subject imports found to be both dumped and subsidized represented 40% of all 
cumulated subject imports; that they represented ne arly half of import growth during the period; 
and that they undersold the domestic like product in the same percentage of comparisons as the 
subject imports that were only found to be dumped. The United States further explained that the 
record data showed that the volumes of imports that were both dumped and subsidized, such as those from India, exacerbated the adverse effect on the domestic industry during the period of 
investigation. Nothing in this explanation, however, suggests that it was possible to disentangle 
the effects of these imports. 
24. Based on the foregoing, the United States requests that the Panel find that the U.S. 
measures "as such", and "as applied" in the underlying countervailing duty proceedings, are not 
inconsistent with Article 15 of the SCM Agreement. 
VII. THE UNITED STATES COMPLIED WITH ARTICLE 1 OF THE SCM AGREEMENT IN 
FINDING THAT THE SDF MANAGING COMMI TTEE AND NMDC WERE PUBLIC BODIES 
25. We have set out in the U.S. first writte n submission an interpretation of the term 
"public body" in Article 1.1(a)(1), based on a proper interpretation of that provision given its text, and in light of its context and the object and purp ose of the SCM Agreement. Specifically, we have 
explained that the term public body refers to an y entity controlled by the government such that 
the government can use the entity's resources as it s own. The evidence on record in this dispute 
with respect to the NMDC and the SDF Managing Committee satisfies not only this interpretation of the term public body, but would satisfy any interp retation of that term, given the GOI's extensive 
involvement in and control over each entity, as well  as the nature of the functions that each entity 
performs in India. 
26. With respect to the SDF Managing Committee, the relevant facts with regard to the SDF 
Program are clear. The GOI established the SDF Program and its constituent committees to 
modernize the steel sector, and to ensure that th ere was a steady supply of certain types of iron 
and steel in line with government goals. Under the program, steel producers could only sell at the 
prices set by the JPC, and the JPC increased the prices for certain steel products and mandated 
that the additional funds "be remitted to the SDF. " Companies that contributed to the fund were 
eligible to take out long-term loans at advantageous rates, and the terms and availability of these loans were approved by the SDF Managing Committee. In its final determination, Commerce found 
that the SDF Managing Committee was composed entirely of senior GOI officials, including the 
Secretary of the Ministry of Steel, the Secretary of Expenditure, the Secretary of the Planning 
Commission, and the Development Commissioner for Iron and Steel. Because the SDF Managing 
Committee made all financial decisions with respect to SDF loans, and because this committee was 
composed exclusively of GOI senior officials, it is clear that, at a minimum, the GOI controlled the WT/DS436/R/Add.1 
 
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  SDF Managing Committee for purposes of Article 1.1( a)(1), such that it could, and did, use its 
resources as its own. In the alternative, Commerce's determination is consistent with a finding that the SDF Managing Committee is a public bo dy even under the standard set out by the 
Appellate Body in US – Anti-Dumping and Countervailing Duties  because the SDF Managing 
Committee took actions that constituted governme ntal functions, and because the GOI exerted 
meaningful control over the SDF. 
27. With respect to NMDC, India continues to misrepresent Commerce's determination that the 
NMDC is a public body by erroneously claiming that the determination is solely based on the fact 
that the GOI owns the NMDC. As was demonstrated in the U.S. first written submission, Commerce analyzed evidence regarding both ownership and control in making its finding that the NMDC was a public body, including evidence that the GOI was heavily involved in the selection of 
directors of the NMDC, and NMDC's own statement that the "NMDC is under the administrative 
control of the Ministry of Steel & Mines, Depart ment of Steel Government of India." Therefore, 
India cannot deny that Commerce made its "public body" determination based on a finding of 
government control as well as government ownershi p. Moreover, even in the event that this Panel 
relies on the "government function" test enunciated by the Appellate Body in US – Antidumping 
and Countervailing Duties , the evidence clearly demonstrates that the NMDC performs a 
government function in India. In addition to  the evidence of ownership and control discussed 
above, record evidence indicated that the Indian government, i.e., the state and federal 
governments, owns all the mineral resources on behalf of the Indian public, and that the federal government has the final approval of the granting of  mining leases for iron ore. Therefore, it is a 
government function in India to arrange for the exploitation of public assets, in this case iron ore, 
and the GOI specifically established the NMDC to perform part of this function.  
28. Therefore, the Panel should reject India's claim that Commerce acted inconsistently with 
Article 1.1(a)(1) in finding that the SDF Managing Committee and the NMDC were public bodies. 
VIII. THE SDF LOANS CONSTITUTED "A DI RECT TRANSFER OF FUNDS" WITHIN THE 
MEANING OF ARTICLE 1.1(A)(1)(I) 
29. The facts demonstrate that Commerce reasonably concluded that the SDF levy operated as 
a tax imposed on consumers over which the GOI, through the SDF Managing Committee, had complete control. India has attempted to call this finding into question by presenting the transfer 
of funds to steel companies as a discrete and is olated action performed by the JPC, wholly 
divorced from the decision by the SDF Managing Committee that the funds should be transferred. 
India's argument draws artificial distinctions between the constituent committees of the SDF program, and would lead to a situation in which the managers of a company, for example, 
should be considered one entity, and the di rectors another. There is no basis in the 
SCM Agreement for drawing such artificial distinctio ns and no basis in the record evidence before 
Commerce for it to have made such a finding.  
30. India attempts to obscure the straightfo rward facts, and has presented inconsistent 
arguments regarding whether the funds collected fr om steel consumers were "consumer funds" or 
"producer funds." Most recently, in its response to  the Panel's questions, India has argued that the 
extra SDF price element collected from steel consumers constituted steel producers' "profits," and 
became part of the Indian steel producers' ow n funds when the purchase price was paid by 
consumers – and therefore was not analogous to a tax, as Commerce determined. However, this GOI-mandated  levy can no more constitute a profit for steel producers than a 
government-determined sales tax collected on the sale of those goods could constitute profit. As 
explained above, the GOI required a levy to be ad ded to the price of certain steel products, and 
also mandated that this levy be deposited in the SDF Fund after it had been collected by the 
producers. Thus, this levy, although it was collec ted as an extra price element, was never an extra 
profit  amount determined by steel producers and inte nded for their use as they deemed necessary. 
Rather, it was a tax-like element mandated by the GOI and earmarked for the government-controlled SDF Fund. Based on the foregoing, India has not shown that Commerce 
acted inconsistently with Article 1.1(a)(1)(i) of the SCM Agreement in making its determination. WT/DS436/R/Add.1 
 
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  IX. THE U.S. MEASURES REGARDING FACTS AVAILABLE ARE NOT INCONSISTENT "AS 
SUCH" WITH ARTICLE 12.7 OF THE SCM AGREEMENT  
31. India's claim that the U.S. measures govern ing facts available are inconsistent "as such" 
with Article 12.7 of the SCM Agreement is in error. India has cited several of Commerce's 
determinations in an effort to show the United  States takes the approach of "systematically 
drawing adverse inferences in all cases of non-cooperation". Despite these arguments, however, India has clarified that "it is not challenging the 'systematic application' as a measure", but rather 
is challenging the statutory and regulatory prov isions themselves. Indeed, India cannot argue 
otherwise, given that its panel request does not include a challenge to Commerce's "practice", but to the U.S. statute and regulation. Therefore,  India bears the burden to demonstrate that 
section 1677e(b) of the U.S. statute, and section 351.308(c) of Commerce's regulations, on their 
face, are inconsistent with Article 12.7 of the SCM Agreement. India has not done so, and its 
claims therefore must fail.  
32. As an initial matter, the United States has demonstrated that Commerce holds discretionary 
authority with respect to the use of adverse infere nces in selecting from among the facts available. 
India ignores the statements made by Commerce in promulgating the regulation at issue, dismisses the cited cases out of hand without explanation, and continues to insist that Commerce 
has drawn adverse inferences "in all cases of non-cooperation." Contrary to India's assertions, 
however, the cases cited by the United States do cument Commerce's exercise of discretion, and 
thereby demonstrate that Commerce holds discretionary authority under U.S. law. Indeed, India acknowledges that the language of these provisions  is "discretionary". Therefore, India's cannot 
sustain its "as such" claims against these measures. 
33. In any event, India has not demonstrated th at the discretionary authority provided by the 
U.S. measures violates Article 12.7 of the SCM Agreement, as interpreted in its context, including 
Article 6.8 and Annex II of the AD Agreement. In this respect, we draw the Panel's attention to 
India's response to Panel Question 75, where Indi a expressly recognizes that Article 12.7 permits 
authorities to apply what it terms "adverse facts," provided it is "demonstrated that those 'adverse 
facts' are the 'most fitting and appropriate' ones." India fails to explain, however, why the 
discretion to apply so-called "adverse facts" provided for in the U.S. measures breaches Article 12.7. The application of facts available occurs where certain necessary facts are not available . Other facts, therefore, as well as certain inferences, must be used in filling in the 
gap in the record before the investigating authority. Without the discretion to use an adverse 
inference, it is unclear how an authority would otherwise reach a determination in which "the most fitting and appropriate" "adverse facts" are applied.  
34. Lastly, the United States reiterates its submission that Article 6.8 and Annex II of the 
AD Agreement provide relevant context to inte rpret Article 12.7 of the SCM Agreement, as 
recognized by the Appellate Body in Mexico – Rice . India agrees with this interpretation, but 
argues that "use of the word 'could' [in paragraph 7 of Annex II] only acknowledges that in cases 
of non-cooperation, the inferences / conclusions may result in findings that are less favourable to 
the party concerned." India fails, however, to re cognize the logical extension of this statement: 
that inferences or conclusions that may result in such findings therefore can properly be reflected 
in an authority's legislation, as is the case here. For the foregoing reasons, India has no valid basis 
for its claims under Article 12.7 of the SCM Agreement. 
X. THE UNITED STATES DID NOT ACT INCO NSISTENTLY WITH ARTICLES 11, 13, 21 
OR 22 OF THE SCM AGREEMENT WITH REGARD TO NEW SUBSIDIES EXAMINED IN 
ADMINISTRATIVE REVIEWS 
35. India claims that the United States acted inconsistently with Articles 11.1, 11.2, 11.9, 13.1, 
21.1, 21.2, 22.1, and 22.2 of the SCM Agreement with respect to Commerce's review of new 
subsidies programs within the context of administ rative reviews. India premises these claims on 
the erroneous proposition that an investigating authority may not levy countervailing duties pursuant to administrative reviews on subsidy programs that were not examined in the original 
investigation. India's claims have no merit.  
36. As explained in the U.S. first written submission, the SCM Agreement sets out a process by 
which Members may investigate instances of subsidization affecting its domestic producers and, WT/DS436/R/Add.1 
 
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  where appropriate, impose duties to countervail those effects. Once duties have been imposed, the 
SCM Agreement separately allows interested parties to request a "review" of those duties to determine whether they are still necessary to counteract subsidization. The text of each relevant provision, and the structure of the overall SCM Ag reement, establishes that an "investigation" and 
a subsequent "review" of duties imposed pursuant to an investigation are two separate and distinct 
processes governed by separate provisions of the SCM Agreement. Indeed, panels and the Appellate Body have found this to be the case. 
37. India has recognized the distinction betw een "investigations" and "reviews" under the 
SCM Agreement, and acknowledged that there are "c ategorical distinctions between an original 
investigation and a review proceeding under Article 21" and that "obligations applicable to original investigations will not necessarily apply to revi ew proceedings." Nonetheless, India glosses over 
these distinctions – and ignores the text of the SC M Agreement – when it suggests, in response to 
Panel questions, that "[t]he United States may initiate and conduct the investigation against new subsidies alongside or part of review proceedings covering the old subsidies, while ensuring that 
the obligations under Articles 11 and 13 are complied with qua the new subsidies." While India 
states that it "is not concerned as to whether a separate docket is created for such new subsidy allegations," that is the practical result of India's claims. Even in its response to a direct question 
from the Panel, however, India has not explained how its novel interpretation of the 
SCM Agreement can be supported by the text, much less how it could work in practice. 
XI. CONCLUSION 38. For the foregoing reasons, the United States respectfully requests that the Panel reject 
India's claims. 
 WT/DS436/R/Add.1 
 
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  ANNEX C-4 
EXECUTIVE SUMMARY OF THE OR AL OPENING STATEMENT OF  
THE UNITED STATES - SECOND MEETING 
Mr. Chairman, members of the Panel: 
 
1. On behalf of the U.S. delegation, I would like to thank you, as well as the Secretariat, for your work in this dispute. In this statement, we will seek to clarify further some of the issues in 
this dispute. In particular, we will focus on  India's arguments regarding the U.S. measures 
governing benefit both "as such" and "as applied", Commerce's specificity determinations, SDF loans as "direct transfers", cumulation of dumped and subsidized imports, and the interpretation and application of the U.S. "facts available" measures. 
I. THE U.S. REGULATION, 19 CFR 351.511(a)(2), IS 'AS SUCH' CONSISTENT WITH 
ARTICLE 14(d) 
2. For the reasons described extensively in th e U.S. first written submission, responses to 
Panel's questions, and in the U.S. second written submission, India's position that Tiers-I and II of 
the U.S. regulation are 'as such' inconsistent with  Article 14(d) of the SCM Agreement has no basis 
in the text of the SCM Agreement and is not support ed by the findings in prior panel or Appellate 
Body reports. In short, India's entire mode of analysis is premised on a step that simply does not 
exist in the text of Article 14.  
3. In its second written submission, India focuses its arguments on three textual points. First, 
India argues that structural differences betw een subparagraphs (b)-(c) and (d) of Article 14 
contemplate a threshold step in Article 14(d) distinct from the "precise calculation method using 
an external benchmark" contained in subparagraphs (b) and (c). India has no basis for this distinction, and the United States would refer the Panel to the U.S. second written submission on 
this point.  
4. Second, in noting that the terms "remuneration" and "benefit" are different words, India 
asks the Panel to accord separate "meaning to . . . the term remuneration  and the fact that the 
U.S. law under challenge fails to look into the question of the adequacy of remuneration  prior to 
calculating benefit." This argument has no merit. As already explained in the U.S. first written submission, while remuneration and benefit are distin ct terms, they are related. The fact that the 
first sentence of Article 14(d) uses both terms does not mean that they are assessed from the 
perspective of different entities. Rather, the title to Article 14 make  clear that when the financial 
contribution at issue is the provision of goods by a government, "benefit" is defined by the concept of "benefit to the recipient." 
5. Third, in paragraph 15 of its second written submission, India notes that Article 14(d) 
relates to two different subsidy programs—both th e purchase and provision of goods or services. 
India argues that the U.S. approach to asse ssing the adequacy of remuneration where the 
government is the purchaser of goods, is somehow inconsistent with the U.S. approach when the 
government acts as the seller. India is incorrect. With respect to government purchases of goods, 
the United States does not interpret Article 14(d) to require a cost to beneficiary analysis. Rather, where the government is the purchaser of goods,  the comparison would be between the price the 
government paid for the product, and the price for which the recipient (of the benefit) could have 
sold the same product to another purchaser.  
6. Moreover, in its second written submission, India adopts a new argument: that an 
assessment of prevailing market conditions requir es an assessment of whether the behavior of the 
provider in some undefined sense can be commercially justified. This argument has no merit and, if India's position were adopted, would amount to a radical departure from the text of the 
Agreement for the following reasons:  WT/DS436/R/Add.1 
 
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  7. First, India's argument assumes that for the purposes of the SCM Agreement, governments 
and private bodies should be treated equally. However, Members (acting through government, public bodies, funding mechanisms, or entrusted or directed private bodies) are bound by the 
disciplines of the SCM Agreement, and private en tities are not. Moreover, Members may confer 
economic resources that result in negative impacts on other Members, and it is for this very 
reason that certain Member actions in the econom ic sphere are subject to the disciplines of the 
SCM Agreement. With respect to Article 14 spec ifically, the SCM Agreement ensures that the 
government prices are at least equivalent to market prices between private parties.  
8. Second, in proposing that the price-setting behavior of governments be justified by 
undefined economic considerations, India seeks to carve out an unprecedented exception in the SCM Agreement. In India's view, governments have a sovereign right to set prices for goods or 
services as far below the market rate as they ch oose, provided this price-setting behavior can be 
justified on some sort of basis. But India's interpretation would seemingly allow a government to justify a less-than-market-price which results in driving private entities out of business on the 
basis that "commercial considerations" led the government to desire to expand its market share.  
9. Third, India refers to this carve out from  the disciplines of the SCM Agreement as an 
"inherent right" of governments to subsidize in any manner that they choose. The simple answer 
to India's argument is that this dispute is not about what types of subsidies governments may or 
may not, under whatever authority, determine to provide. India exercised its inherent sovereign 
right in agreeing to the disciplines of the SCM Agreement, and thus has agreed that other WTO Members may countervail subsidies it provides that cause injury to another Member's 
industry. 
10. The United States offers the following additional comments on the structure of its regulation: 
Both the United States and India agree that the benefit calculations performed under Tier-III of 
the U.S. regulation are consistent with Article 14(d) of the SCM Agreement. India, however, 
argues that the regulation's preference for the ap plication of a Tier-I or Tier-II analysis for the 
calculation of benefit is inconsistent with Article 14(d) insofar as it precludes the application of a 
Tier-III analysis. India's objections are without merit; they are based on India's flawed 
interpretation of the first sentence of Article 14(d), and India's oft-repeated, and unsupportable, insistence that the adequacy of remuneration must be assessed from the perspective of the 
provider of the benefit. Under the Article 14(d)  guidelines, the adequacy of remuneration is 
assessed from the perspective of the recipient of the financial contribution and the hierarchical 
structure of the U.S. regulation is fully-consistent with this principle. The U.S. regulation appropriately begins with Tier-I, a preference for actual arm's length prices between private 
parties in the market of the economy of provision.  
11. The crux of India's concern with the hierarchic al structure of the U.S. regulation is its view 
that a government price that may be adequate under Tier-III should not be countervailed under 
another method, such as Tier-I or Tier II. However,  if remuneration is less than adequate based on 
a comparison with actual arm's length prices between private parties, then a benefit has been conferred and, in such instances, the govern ment price cannot be consistent with market 
principles. Application of the U.S. regulation will never lead to a result where remuneration which 
has been found to be inadequate under Tier-I or Tier-II will somehow be found to be adequate 
under Tier-III.  
II. THE MANDATORY INCLUSION OF DELIVERED PRICES UNDER 
19 CFR 351.511(a)(2)(iv) IS "AS SUCH" CONSISTENT WITH ARTICLE 14(d) 
12. In paragraphs 36 through 45 of its second written submission, India continues to argue that 
the mandatory inclusion of delivery charges under subsection (iv) of the U.S. regulation is "as 
such" inconsistent with Article 14(d) of the SC M Agreement. The United States has addressed 
India's "as such" challenges to the regulation extensively in its previous submissions. We have the following additional comments:  
13. First, in paragraph 38 India states that, "for reasons unknown and unsubstantiated, the 
United States assumes that the term 'delivery charges' covers only import duties." This statement 
is factually incorrect. As explained in detail in response to the Panel's questions 44 and 47, the term 'delivery charges' includes not only import duties (where appropriate) but, more specifically, WT/DS436/R/Add.1 
 
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  all of the delivery charges incurred by the producer  to physically get the input to the producer's 
facility for use, which could include freight, import duties, or taxes. Second, India continues to argue in paragraph 39 of its second written submi ssion that an apples-to-apples comparison could 
be completed at the ex-works level. An ex-works price does not include the costs incurred by the 
purchaser for getting a purchased input to its factor y door and, therefore, is not reflective of the 
prevailing market conditions for that input from the perspective of the recipient.  
14. Third, India states in paragraph 40 that "the 'delivered prices' of a domestic government 
provider can never be equal to or higher than such a benchmark price that includes international 
freight and import duties." This simply is not tr ue. Indeed, India provides no evidence to support 
such a categorical statement. Fourth, India appears to be confused about what the factors listed in Article 14(d) mean. The non-exhaustive list of "prevailing market conditions for the good or 
service in question in the country of provision" in Article 14(d) includes price, quality, availability, 
marketability, transportation and, as India correct ly points out, other conditions of purchase or 
sale. Thus, contrary to India's line of argument, the terms "availability" and "marketability", for 
instance, are not terms typically found in negotiated contracts.  
15. Fifth, in both paragraphs 42 and 43 (in addition to others) India mischaracterizes the 
United States as making a "cost to exporter" (or "cost to producer") analysis. This is incorrect. The 
United States, consistent with Article 14 of the SCM Agreement, is making a benefit to the 
recipient analysis by comparing the prices that the recipient actually would pay for the benchmark 
product and the government product. Sixth, the United States would observe that the term "availability" is specifically included in the non- exhaustive list of prevailing market conditions 
identified in the second sentence of Article 14( d). For India to argue that adjustments to the 
benchmark with respect to "availability" are not contemplated in the text of the SCM Agreement is incorrect. 
III. THE IMPOSITION OF COUN TERVAILING DUTIES IN RESP ECT OF THE SALE OF HIGH 
G R A D E  I R O N  O R E  B Y  N M D C  I S  F U L L Y  C O N S I S T E N T  W I T H  A R T I C L E S  1 . 1 ,  2 . 1 ( c )  AND 2.4 OF THE SCM AGREEMENT 
16. Turning now to India's claims related to specificity, to recall, India argues that de facto 
specificity may only be determined under Article 2.1(c) where a subsidy is granted or enjoyed by a few enterprises as compared to a larger universe of  similarly-situated entities otherwise capable of 
using that subsidy. This "comparative subset" argument simply is incorrect and India's previous 
arguments on this point have been adequately addressed in our previous submissions. We offer 
the following observations:  
17. First, as clearly presented in our previous submissions, the United States disagrees with 
India's interpretation of Article 2.1 of the SCM Agreement. The passages of Appellate Body reports 
and selected negotiating documents of the SCM Agreement relied on by India to support its 
positions do not clarify the meaning of Article 2.1(c) do not address de facto  specificity nor do they 
address specificity in the context of a financial contribution in the form of a provision of goods or 
services. Second, India is also incorrect in arguing that the text of Article 2.1(c) somehow mandates an order of analysis whereby an investigating authority is required to first apply the principles under Articles 2.1(a)-(b) before Article 2.1(c).  
18. Third, there is no basis in Article 2.1(c) to support India's contention that the inherent 
characteristics of a good cannot limit its utility. There is no exception in the SCM Agreement allowing governments to provide goods, which, by their nature are of limited use, for less than 
market value. Fourth, India argues that in a de facto specificity analysis under Article 2.1(c), 
failure to require that a comparative subset of eligible entities be identified would result in "every form of supply of goods to be specific in all cases." Contrary to India's categorical assertions, 
specificity is assessed on a case-by-case basis and, under Article 2.1(c), will only be found where 
certain enterprises constitute a discrete segment of the economy of the Member granting the subsidy.
1 
19. India's two specificity arguments, including the one contained in section VII.C.2 of its first 
written submission effectively are the same: for both , India argues that the text of Article 2.1(c) 
                                               
1 US – Upland Cotton (Panel) , para. 7.1151.   WT/DS436/R/Add.1 
 
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  requires that an investigating authority not only identify certain enterprises which are receiving the 
subsidy but also those eligible enterprises that are not.  
20. In its second written submission, India continues to confuse the obligation of an 
investigating authority to take account of the factors identified in the second sentence of 
Article 2.1(c) with some sort of requirement th at the authority's determinations must include a 
separate discussion of each factor. The United States met its obligation under Article 2.1 to take "account" of both the economic diversification of the Indian economy and the duration of the 
program in determining that the GOI provision of iron ore for less than adequate remuneration 
was de facto specific to a limited number of certain enterprises that used iron ore. Moreover, 
contrary to India's assertions, a Member does not and cannot "shirk" obligations by, as here, pointing out relevant facts on the record in a dispute.  
IV. THE SALE OF IRON ORE BY NMDC CO NFERRED A BENEFIT WITHIN THE MEANING 
ARTICLE 14(d) OF THE SCM AGREEMENT 
21. Turning now to India's 'as applied' claims agai nst the U.S. imposition of countervailing duties 
in respect of the sale of high grade iron ore by NMDC, in its second written submission the 
United States wishes to highlight the following positions: First, India is incorrect that the explanations of the United States are ex-post facto rationalizations of the determination . The 
determinations on the record in this dispute contain complete and persuasive explanations for why 
Commerce determined that Indian steel companies received countervailable subsidies. The alleged pricing, party identification, and iron content information contained in these documents was incomplete; this data was therefore insufficient to be used in a Tier-I analysis which, contrary to 
India's assertions in paragraph 193, very clearly requires that a benchmark price be based on data 
from actual imports or actual sales. Second, India incorrectly states that the United States starts with the presumption that all government prices (even prices not under challenge) are suspect and 
ought to be rejected without any examination. India has ignored paragraph 66 of the U.S. first 
written submission, in which the United States explains that the United States does not always reject the use of government prices as benchmarks if the government prices are determined to be 
set by the market. For example, a government price set by a competitively run government 
auction is explicitly included as a possible benchmark under Tier I of the U.S. regulation. 
22. Third, the United States takes issue with India's apparent new argument that Article 12.1 of 
the SCM Agreement requires an investigating authority to affirmatively use all information 
submitted by interested parties in calculating a benchmark, regardless of that information's 
veracity or usability. That claim is therefore outside the Panel's terms of reference, even aside from the fact that it would be untimely to raise arguments for the first time in its second written 
submission.  
23. India's 'as applied' challenges to the use of delivered prices in the calculation of benefit for 
the sale of iron ore by NMDC are identical to the arguments presented in its 'as such' challenges to 
the U.S. regulation, subsection (iv), the paragrap h that mandates adjustments for fully delivered 
prices. As India's arguments are the same, for the same reasons as explained above, these arguments are without merit and are not based on  the text of the SCM Agreement. Therefore, 
India's 'as applied' claims on the use of delivered prices must also fail.  
V. THE IMPOSITION OF COUNTERVAILING  DUTIES ON THE GRANT OF CAPTIVE 
MINING RIGHTS FOR IRON ORE AND COAL IS CONSISTENT WITH ARTICLES 12.5, 
1.1, 1.2, 2 AND 14 OF THE SCM AGREEMENT 
24. Article 12.5 of the SCM Agreement requires that  "authorities shall during the course of an 
investigation satisfy themselves as to the accuracy of the information supplied by interested Members or interested parties upon which their findings are based." While India has every 
incentive to deny the existence of a captive mining rights program for iron ore, Commerce 
satisfied itself as to the accuracy of information contained in the Hoda and Dang reports and 
therefore the U.S. actions fully complied with Article 12.5 of the SCM Agreement.  
25. Further, India incorrectly argued that the Go vernment of India did not provide iron ore or 
coal within the meaning of Article 1.1(a)(1)(i ii) of the SCM Agreement because there is no 
"reasonable proximate relationship" (as articulated by the Appellate Body in Softwood Lumber IV ) WT/DS436/R/Add.1 
 
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  between the grant of mining rights on the one hand  and the availability of the mined iron ore or 
coal on the other. India now argues that there is no reasonable proximate relationship because the royalty paid for the grant of mining rights is 9. 03% of the total costs borne by the miner to enjoy 
the final minerals. Under Article 1.1(a)(1)(iii), the question regarding financial contribution is 
whether there was a provision of goods or serv ices by a government or public body. The 
percentage of total cost represented by the financia l contribution is not pertinent to this question. 
The price that the government charges in providing that exclusive right is not relevant.  
26.  India also argues that the GOI cannot be said to have provide iron ore or coal to miners if, 
in addition to royalty payments, miners must bear  the costs of exploration, labor, and extraction. 
This requirement is nowhere in the text of SCM Agreement nor in the US – Softwood Lumber IV  
Appellate Body report. Analogously, maki ng available iron ore and coal is the raison d'etre  of the 
GOI's mining leases. India cannot distinguish this dispute on the basis of additional costs that a 
miner must incur to make the minerals marketable.  
27. In paragraphs 218-219 of its second written submission India continues to argue that the 
GOI has not provided captive mining rights for coal to Tata Steel within the meaning of 
Article 1.1(a)(1) because the United States has not proven the non-existence of an alleged exemption to the Coal Mines Nationalization Act and the Ministry of Coal's guidelines for the 
allocation of captive coal blocks. As explained in the U.S. first written submission, Commerce 
properly determined that the law, as amended, clearly applies to all coal mining leases , without 
exception. It is India that has argued for the existence of an exemption for Tata, but yet has pointed to no evidence on the record of such an exemption.  
28. India asks the Panel to apply a novel three-step analysis in examining whether the 
investigating authority properly determined specificity. India's proposed three-step standard of review is inconsistent with, and unsupported by, the text of the SCM Agreement. It also departs 
from prior Appellate Body findings. For example, India's third step appears to be taken from a 
misreading of the Appellate Body report in US – Large Civil Aircraft , wherein the Appellate Body's 
reference to the "broader legal framework" applied to determinations of de jure specificity in which 
there exist a legal framework to evaluate in the first place. Moreover, India's proposed 
methodology would amount to a de novo review of the facts on the record, requiring the Panel to 
substitute its judgment for that of the regulator.  
29. In paragraph 225 of its second written submission, India continues to dispute Commerce's 
de facto  specificity determination with respect to a captive mining rights program for iron ore on 
the basis that "the United States has not identified any separate regulation or guidelines governing mining rights of iron ore as distinguished from other minerals." Here too India confuses the 
difference between de jure and de facto  specificity under Article 2.1(a)-(b) and 2.1(c). Specificity 
determinations under Article 2.1(c) do not require that an investigating authority identify a specific piece of legislation, regulations, or guidelines pertaining to eligibility or amount of subsidy.  
VI. THE UNITED STATES CORRECTLY CALCULATED THE BENEFIT FOR A PRICE OF 
EXTRACTED IRON ORE AND COAL, CONSISTE NT WITH ARTICLES 1.1(b) AND 14 OF 
THE SCM AGREEMENT 
30. In paragraph 231 of its second written su bmission, India argues that the GOI did not 
"provide" extracted iron ore or coal in accordan ce with Article 1.1(a)(1)(iii) but rather granted 
mining rights and that, consequently, the costs incurred by the miner in extracting iron ore and coal cannot form part of the benchmark calculation under Article 14(d). For the reasons explained 
above and consistent with the Appellate Body's findings in US – Softwood Lumber IV , by providing 
the right to extract iron ore and coal, the GOI provid ed recipients with iron ore and coal consistent 
with Article 1.1(a)(1)(iii). Commerce properly constr ucted the cost of the iron ore and coal to Tata 
and compared this constructed price to a world market price for iron ore and an actual import price 
for coal in order to determine whether the recipients of the mining rights received something "on terms more favorable than those available in the ma rket." These calculations are fully explained in 
paragraph 515 of the U.S. first written submission. India's objections to the benefit calculations for 
mining rights are premised on incorrect interpretations of both Articles 1 and 14 of the 
SCM Agreement and therefore are without merit. WT/DS436/R/Add.1 
 
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  VII. THE U.S. CUMULATION PROVISIONS ARE CONSISTENT WITH THE SCM AGREEMENT 
31. India's arguments regarding cumulation fa il because the cumulation of subsidized and 
dumped imports that are subject to simultaneous injury investigations is consistent with the text and context of Article 15 of the SCM Agreement, re ad in light of the object and purpose of the 
SCM Agreement. India argues that the text of  Article 15.3 does not permit cumulation of 
subsidized imports with dumped imports. However, the text of Article 15.3 does not address this type of cumulation at all, much less prohibit it. Both the SCM and AD Agreement permit 
investigating authorities to cumulate imports for the purpose of assessing injury, and the Appellate 
Body has found cumulation to be "a useful tool for investigating authorities to ensure that all sources of injury and their cumulative impact on the domestic industry are taken into account in an investigating authority's determination…" By identifying this policy as a critical rationale 
underlying the cumulation provisions of these Agreements, the Appellate Body has acknowledged 
that injury to the domestic industry might come from several sources simultaneously, and has recognized that "it may well be the case that the injury the [antidumping and countervailing] 
duties seek to counteract is the same injury to the same industry." 
32. It is telling that India has not challenged th e cumulation of imports that are simultaneously 
subsidized and dumped, even though this ci rcumstance was presented by the underlying 
determination. If Article 15.3 permits a cumulated analysis of the effects of imports that are both 
dumped and subsidized in injury investigations, then Article 15.3 must also permit a cumulated analysis of all unfairly traded imports, whether subsidized or dumped. For, as the United States has explained, it is simply not possible, as a pr actical matter, for an authority to disentangle or 
unravel the dumping-related effects of dumped and subsidized imports from their subsidies-related 
effects, because the effects are precisely the same. 
33. Finally, India mistakenly claims that the U.S. aggregated "negligibility" analysis is 
inconsistent with Article 15.3 because it requires the Commission to perform this analysis on an 
individual country basis. Neither Article 15.3 nor Article 11.9 of the SCM Agreement specifically defines the term "negligibility". Moreover, the para llel provision in the AD Agreement includes the 
same allegedly country-specific language, but goes on to set parameters for "negligibility" findings 
that explicitly contemplate an aggregated analysis. Given that there is no level of negligibility specified in the SCM Agreement, the U.S. statute's negligibility test is not inconsistent, as such, with the provisions of Article 15.3. 
34. With respect to the U.S. sunset provisions and the Commission's sunset analysis, India's 
challenges have a simple and fatal problem: they were raised under Article 15 of the SCM Agreement, which does not apply to sunset reviews. As the Appellate Body has consistently 
found, for example in US – Carbon Steel  and US – Corrosion-Resistant Steel Sunset Reviews , the 
provisions of the Agreements governing dumping, subsidies, and injury findings in original investigations do not apply to an authority's likely injury analysis in sunset reviews. Therefore, 
India has no basis for either an "as such" or "as applied" challenge to these measures. 
VIII. FINANCIAL CONTRIBUTION 35. India argues that the SDF loans are neither "direct," nor even a "transfer" of funds under the 
SCM Agreement, because the funds do not move "d irectly" from the SDF Managing Committee and 
because the SDF Managing Committee does not hold title to the funds such that it can "transfer" 
that title. However, there is no question that a loan made to an entity by a public body is a "direct transfer". Article 1.1(a)(1) includes "loans" in its il lustrative list of direct transfers. Rather, India's 
arguments relate to which entity made  the loan, and whether or not that entity was a public body. 
And as the United States has repeatedly pointe d out, the record shows that the SDF Managing 
Committee, which is comprised exclusively of four government officials, made all the decisions 
regarding the issuance, terms and waivers of all SDF loans. Thus, while the JPC handled many of 
the day-to-day operations of the SDF program, the facts demonstrate, and Commerce found, that the SDF Managing Committee controlled the distribu tion of loans, and was therefore responsible 
for making the loans available to recipient companies. WT/DS436/R/Add.1 
 
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  IX. U.S. MEASURES REGARDING THE USE OF FACTS AVAILABLE 
36. India claims in its second written submission that the United States "provides almost no 
substantive defense to India' (sic) claims" against the U.S. facts available provisions set out in paragraph 172 of its first written submission, and that we instead use the discretionary nature of 
the provisions as a "safe harbor". India's claims are patently wrong, as the United States has 
demonstrated repeatedly throughout its submissions. 
37. First, we find it interesting that India refers back to these specific arguments, because 
two of the three arguments listed there reflect the panel's interpretation of Annex II to the 
AD Agreement  in Mexico – Rice . India argues in its most recent submission, however, that the 
protections included in Annex II should not even apply in the context of the SCM Agreement. In 
addition to being incorrect, India's argument – if accepted – would mean that the entire legal 
premise of India's own facts available argument would disappear. This is because Article 12.7 of 
the SCM Agreement – standing alone and without context – provides no basis for India's facts 
available claim. It is the context of Annex II which provides the basis for a breach. But India 
cannot rely on certain elements of Annex II for context, while saying at the same time that 
paragraph 7 of Annex II – which explicitly notes consequences for non-cooperation – should be ignored. Rather, the United States agrees with other Members and the Appellate Body that 
Annex II of the AD Agreement is important context for interpreting Article 12.7. As we explained in 
our opening statement at the first panel meeting, the term "best" facts available – as used in the title of Annex II – refers to the facts that would be  derived by an authority in its application of the 
protections contained in Annex II to the AD Agr eement. In the U.S. view, these facts are those 
most probative, relevant and verifiable. The U.S. measures fully reflect these provisions.  
38. Second, with respect to the third of the thr ee bullet points in paragraph 172 of India's first 
written submission, the United States has consistently disputed India's assertion that the U.S. 
measures allow the punitive application of facts available, or apply the "worst possible inference". 
For example, India often refers to examples of application in which Commerce chose the highest subsidy rate found for another cooperating company from the same country, using the same 
program. The highest rate for a cooperating  company is far from "the worst possible inference," 
and far from "punitive." Rather, in those instan ces, Commerce used a verifiable fact otherwise 
available – an actual subsidy rate – that reflected circumstances as similar as possible to those of the non-cooperating company. In reality, however, the non-cooperating party might have 
benefitted from the subsidy program to a greater  extent than the parties that chose to cooperate 
and provide the requested information. By basi ng its determination upon verifiable facts, 
Commerce limits the extent of the inference it draws in making determinations based on facts 
available. Therefore, far from drawing the "wor st possible inference", Commerce often may put the 
non-cooperating party in a better  position than it would have been in had the party cooperated. 
X. 2013 SUNSET REVIEW 
39. India complains in its second written submission that the United States "offers no 
substantive response to the findings under challenge from the 2013 sunset review determination". However, in its own submission, India has not raised a single argument as to which findings the Panel should make, has not explained what eviden ce should be examined, nor described how the 
WTO Agreement applies. Rather, India simply states: "for substantially the same reasons as 
enunciated above, the entire set of findings in the 2013 sunset review determination is 
inconsistent with Article 12.7 of the SCM Agreement". India's claims with respect to the 
2013 sunset review are "as applied" claims, which must be demonstrated on the facts. India has 
raised no arguments, much less informed the Panel and the United States of the findings it wishes to challenge. India has failed to even submit the measure to which it refers to the Panel as an 
exhibit. As the Appellate Body in EC – Fasteners (China)  stated: "the burden rests on the 
complainant to substantiate its claims with legal arguments and evidence in its written and oral submissions to the panel. While the DSU, and Arti cle 11 in particular, require a panel to make an 
objective assessment of the matters that are before it, the panel must turn its attention to and 
direct its questions at claims and arguments that the parties have articulated." That is, the party 
itself must articulate its claims and arguments and cannot simply raise claims for the Panel to substantiate on its own initiative. In these circumstances, India has provided no prima facie  case 
for the United States to rebut, and India's claims in this respect therefore must fail. 
_______________ WT/DS436/R/Add.1 
 
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  ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Third Party Written Submission of Australia D-2 
Annex D-2 Executive Summary of the Third Party Oral Statement of Australia D-4 
Annex D-3 Executive Summary of the Third Party Written Submission of Canada D-6 
Annex D-4 Third Party Oral Statement of Canada D-8 
Annex D-5 Executive Summary of the Third Party Written Submission of China D-10 
Annex D-6 Third Party Oral Statement of China D-14 
Annex D-7  Executive Summary of the Third Party Written Submission of the 
European Union D-17 
Annex D-8  Executive Summary of the Third Party Oral Statement of the European Union D-21 
Annex D-9  Executive Summary of the Third Party Written Submission of the 
Kingdom of Saudi Arabia D-24 
Annex D-10  Third Party Oral Statement of the Kingdom of Saudi Arabia D-27 
Annex D-11  Third Party Oral Statement of Turkey D-30 
 
 
 WT/DS436/R/Add.1 
 
- D-2 - 
 
   
ANNEX D-1 
THIRD PARTY WRITTEN SUBMISSION OF AUSTRALIA 
I. INTRODUCTION 
1. Australia considers that these proceedings initiated by India under the Understanding on 
Rules and Procedures Governing the Settlement of Disputes (DSU) raise significant issues of legal interpretation of the Agreement on Subsidies and Countervailing Measures (SCM Agreement).  
 
2. In this submission, Australia addresses the meaning of the term "public body" in Article 1.1(a)(1) of the SCM Agreement.   
3. Australia reserves the right to raise other issues in the third party hearing with the Panel. 
 II. THE SUBSIDIES AND COUNTERVAILING MEASURES AGREEMENT 
A. T
HE MEANING OF THE TERM "PUBLIC BODY "  
4. A material issue in this matter is the interpretation of the term "public body" in 
Article 1.1(a)(1) of the SCM Agreement. In United States – Definitive Anti-Dumping and 
Countervailing Duties on Certain Products from China , the Appellate Body reversed the Panel's 
finding that the term "public body" in Article 1. 1(a)(1) of the SCM Agreement means "any entity 
controlled by a government." The Appellate Body considered that this interpretation of "public body" lacked a proper legal basis.
1 
 
5. The Appellate Body concluded that a public body is an entity that possesses , exercises or 
is vested with governmental authority, which is to be determined on a case-by-case basis having 
regard to all the relevant facts, which may point in different directions.  
 6. Australia considers that the Appellate Body's  conclusion suggests that a public body must 
meet one of three descriptions – an entity that possesses  governmental authority, an entity that 
exercises  governmental authority, or an entity that is vested  with governmental authority. In 
Australia's view, these descriptions are alternatives to one another and are not cumulative. However, Australia acknowledges that the Appellate Body guidance on this is not clear.  
 
7. For example, a statement was made by the Appellate Body that "being  vested with, and 
exercising , authority to perform governmental functions is a core feature of a public body in the 
sense of Article 1.1(a)(1)".
2 It is not clear whether possessing  government authority is included 
in this description of "a core feature of a public body". This statement also appears to suggest that 
in order to meet this description, an entity must both be vested with , and exercise , authority to 
perform governmental functions, whereas the Appellate Body's conclusion, as noted above, 
expressed these features as alternatives to each other.  8. In the same paragraph, the Appellate Body also made a statement that "being vested  with 
government authority is the key feature of a public body".
3 It is not clear whether possessing  
government authority, or exercising  government authority are also included in this description of 
"the key feature of a public body".  
 
9. Another statement made by the Appellate Body in its analysis in forming its conclusion, was that in order for an entity to be able to give responsibility to a private body (entrustment), it must 
itself be vested  with such responsibility.
4 This appears to suggest that in order to give 
                                               
1 Appellate Body Report, US – AD/CVDs, para. 322. 
2 Appellate Body Report, US – AD/CVDs, para. 310 (emphasis added). 
3 Appellate Body Report, US – AD/CVDs, para. 310 (emphasis added). 
4 Appellate Body Report, US – AD/CVDs, para. 294. WT/DS436/R/Add.1 
 
- D-3 - 
 
  responsibility to a private body (entrustment), it may not be sufficient if an entity possesses  
and/or exercises  such responsibility. Rather, it must be vested  with it.  
 10. Australia would not support a view that an entity must be vested  with governmental 
authority in order to be regarded as a "public body". This is because Australia considers that public 
bodies have government authority (without having to be vested  with it). Australia is concerned to 
ensure that a focus on the idea of entities being vested  with government authority is not used to 
artificially transpose the test for "entrustment or direction" onto the definition of "public body".  
 11. The discussion does not fully explain what the other features of a public body might be, and 
whether an entity might be considered a public body if it has other features even if not the core or 
key feature. 
 12. Therefore, Australia's view is that the discussi on around core and key features is not clear. 
Australia considers that it may be useful for the Panel in this dispute to carefully examine again 
the term "public body" in the context of existing jurisprudence. One relevant criteria for examining a "public body" under Article 1.1(a)(1) of the SCM Agreement should be to what extent does the 
government control the entity. 
 13. India suggests the appropriate test for public body under Article 1.1(a)(1) for an entity is that: 
 
(a) the entity has been vested with the power and authority to perform government 
functions; and 
(b) the entity has the power and authority to direct or entrust a private body; and 
(c) the entity is, in fact, exercising government al functions, i.e. they can regulate control 
or supervise individuals, or otherwise constrain conduct.
5 
 
14. Australia considers that India's test does not reflect the jurisprudence on this issue. There is an important distinction between exercising governmental authority and whether an entity is performing governmental functions. In Australia's  view, the Appellate Body's test for whether an 
entity exercises, possesses or is vested with governmental authority, does not require a 
determination by a competent authority as to wh ether an alleged public body is carrying out a 
governmental function for governmental purposes.  
 
15. The Appellate Body has said that "Panel's or investigating authorities confronted with the question of whether conduct falling within the scope of  Article 1.1(a)(1) is that of a public body will 
be in a position to answer that question only by conducting a  proper evaluation of the core 
features of the entity concerned , and its relationship with the government in the narrow 
sense".
6 Australia considers that this principle should frame the pursuit for clarity over the test for 
public bodies under Article 1.1(a)(1). 
 
III. CONCLUSION  
16. Central to this dispute are important issues of legal interpretation concerning aspects of the 
SCM Agreement, principally the meaning of the term "public body" as used in Article 1.1(a)(1). 
Australia is of the view that an en tity should not be required to be vested  with governmental 
authority in order to be regarded as a public bo dy, but notes that the broad conclusion reached by 
the Appellate Body in United States – Definitive Anti-Dumping and Countervailing Duties on 
Certain Products from China can accommodate Australia's view.  
                                               
5 India First Written Submission, para. 234. 
6 Appellate Body Report, US – AD/CVDs, para. 317 (emphasis added). WT/DS436/R/Add.1 
 
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  ANNEX D-2 
EXECUTIVE SUMMARY OF THE THIRD PA RTY ORAL STATEMENT OF AUSTRALIA 
1. This dispute raises important issues concerning Article 1.1(a)(1) of the Agreement on 
Subsidies and Countervailing Duties  (SCM Agreement) and the definition of "public body". 
2. Australia considers that the interpretation of "public body" could benefit from clarification 
following the Appellate Body's finding in United States – Anti-Dumping and Countervailing Duties 
(China)  ("US – AD/CVD ").  
3. In US – AD/CVD , the Appellate Body said that a pub lic body must be an entity that 
"possesses, exercises or is vested with governmental authority. Yet, just as no two governments 
are exactly alike, the precise contours and characte ristics of a public body are bound to differ from 
entity to entity, State to State, and case to case".1 Australia agrees with this statement and 
considers that the test to establish a public body is not a cumulative three stage test and requires 
a case-by-case analysis.  
4. Australia's interpretation of "public body" differs to that of India's in its First Written 
Submission, which suggests that the test is cumulative and that an entity must therefore possess, 
exercise and be vested with governmental authority to be a public body within the meaning of 
Article 1.1(a)(1) of the SCM Agreement.2 
5. Australia is concerned that interpreting "public body" as a cumulative test in this manner 
narrows the meaning of the term in Article 1. 1(a)(1) of the SCM Agreement and removes the 
flexibility for investigating authorities to consider whether a public body exists in a range of different contexts. 
6. Australia also considers that government ownership, in and of itself , is not enough to 
establish that an entity is a public body wi thin the meaning of Article 1.1(a)(1) of the 
SCM Agreement. Rather, when looking to whether a government possesses or exercises 
governmental authority , a key feature for establishing a public body should be the nature and 
extent of government control over the entity, which is a broad analysis.  
7. To date, Australia's position has been, and continues to be, that establishing the nature and 
extent of government control over a particular entity would require an investigation into a range of 
factors, including how an entity is managed, whether a government issues instructions to the entity and the degree of governmental oversight. 
8. In essence, it should be possible to make a find ing that a public body exists in law or in fact, 
so long as there is evidence to do so. 
9. In that regard, the evidence needed to estab lish a public body will depend on the facts of 
each case. It will often require an investigating authority to look beyond the formal structure of 
the entity. For example, an investigating au thority could look to evidence such as: 
a. relevant statutes or other legal instruments; b. the degree of separation and independence of an entity from a government, including 
the appointment of Directors; or 
c. the contribution that an entity makes to the pursuit of government policies or 
interests. 
                                               
1 Appellate Body Report, US – Definitive Anti-Dumping and Count ervailing Duties on Certain Products 
from China , para. 317 (emphasis added). 
2 India's First Written Submission, para. 234. WT/DS436/R/Add.1 
 
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  10. These examples of evidence, which are non- exhaustive, could potentially contribute to 
demonstrating whether a government has control over the activities and conduct of the entity in the sense of Article 1.1(a)(1) of the SCM Agreement.  
11. Australia is not suggesting that these examples  should constitute formal criteria to find a 
public body, whether individually or as a whole. Investigating authorities need flexibility to look at 
the facts of each individual case, and, based on available evidence, determine whether or not a public body exists. 
12. In Australia's view, an approach which looks at the nature and extent of governmental 
control of an entity is consistent with the object and purpose of Article 1.1, which is to ensure that a subsidy provided by any public body within the meaning of Article 1.1(a)(1) is captured by the 
SCM Agreement.  
13. Australia, in providing the Panel with its views on the meaning of "public body", has sought 
to look at the issue from a viewpoint that is both principled and practical for investigating authorities. Ultimately, investigating authorities within each Member State are the ones that need 
to apply these rules in the variety of di fferent contexts in which they arise. WT/DS436/R/Add.1 
 
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  ANNEX D-3 
EXECUTIVE SUMMARY OF THE THIRD PART Y WRITTEN SUBMISSION OF CANADA 
I. INTRODUCTION 
1. Canada is participating in this panel proceeding because it has a substantial systemic 
interest in the interpretation of WTO subsidy rules. 
II. PUBLIC BODY 2. In the panel and Appellate Body proceedings in US – Anti-Dumping and Countervailing 
Duties (China) , Canada, a third party in that dispute, argued that the appropriate interpretation of 
the term "public body" is that it is an entity co ntrolled by the government. Such an interpretation 
is consistent with the context of Article 1.1(a)(1) and the object and purpose of the 
SCM Agreement. 
3. Canada's interpretation gives sense to the reference to "public body" in Article 1.1(a)(1) 
because it maintains the effet utile  of the term and distinguishes it from a "private body" entrusted 
or directed by a government in Article 1.1(a)(1)( iv). This interpretation also ensures that the 
disciplines of the SCM Agreement are given a sufficiently broad scope in terms of the entities to 
which they apply and as such prevents the creation  of loopholes allowing for the circumvention of 
the disciplines of the Agreement. 
4. The panel endorsed this interpretation in US – Anti-Dumping and Countervailing Duties 
(China) . Regrettably, the Appellate Body reversed the panel's findings. Nevertheless, Canada 
acknowledges the importance of security and pred ictability in the dispute settlement system, as 
contemplated in Article 3.2 of the DSU. 
III. SPECIFICITY 
5. In the context of India's claims concerning the provision of high-grade iron ore, Canada 
disagrees with the interpretation of Article 2. 1 of the SCM Agreement suggested by India. The 
ordinary meaning of the text of Article 2.1 does not require the use of "comparative sets" of 
"similarly-situated entities" in order to determine specificity. Article 2.1 is not a non-discrimination obligation, as India seems to suggest. 
6. The language in the chapeau of Article 2.1 of the SCM Agreement provides that specificity 
must be determined in relation to "certain enterprises", i.e., an enterprise, industry or group of enterprises or industries, that received the subsidy. The panel in US – Upland Cotton  found that 
the term "certain enterprises" refers to a "particu lar limited group of producers of certain products" 
and that a subsidy is provided to certain enterprises if the recipients of the subsidy constitute no 
more than a "sufficiently discrete segment" of th e economy of the Member granting the subsidy. 
7. Where the granting authority or the legislation pursuant to which the granting authority 
operates explicitly limits access to the subsidy to certain enterprises, the subsidy is specific under 
Article 2.1(a). According to Article 2.1(b), where ne utral and objective criteria govern eligibility for 
a subsidy, thus making it broadly available, it is not limited to "certain enterprises" and not 
specific.  
8. What makes a subsidy specific pursuant to Article 2.1(a) of the SCM Agreement is that it is 
only provided to an enterprise, an industry or group thereof that represents a sufficiently discrete 
segment of the economy. This determination as to whether a subsidy is limited to a sufficiently 
discrete group of recipients does not involve or re quire the establishment of sub-groups or pairs of 
similarly situated entities, resulting in a comparison of subsidy recipients versus similarly situated eligible companies that do not receive the subsidy, as India seems to suggest. Such an 
interpretation is not supported by the te xt of Article 2.1 of the SCM Agreement. WT/DS436/R/Add.1 
 
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  9. The panel's finding in US – Softwood Lumber IV  when interpreting Article 2.1(c) of the 
SCM Agreement supports this interpretation.  
10. Canada recognizes that a comparison may be required under Article 2.1(c) to determine 
de facto  specificity. The second and the third of the four factors listed in the second sentence of 
Article 2.1(c), 'predominant use' and 'the granting of disproportionately large amounts of subsidy', 
are based on relational concepts. The application of these factors entails a comparison between sub-groupings of recipients of the same subsid y. This comparison, however, does not involve 
entities that do not receive the subsidy. 
11. The subsidy at issue in this case is the provision of high-grade iron ore by NMDC at less than 
adequate remuneration to Indian steel companies. Based on the facts in the underlying investigation and reviews, Commerce inquired as to whether a limited number of industries 
received this subsidy, as required for a determination of de facto  specificity under the first factor of 
Article 2.1(c). Contrary to what India argues, Commerce did not need to compare the group of 
recipient industries to another group of similarly situated industries to come to the conclusion that 
the number of recipient industries is limited. Thus, Commerce properly carried out the test 
established by Article 2.1(c) of the SCM Agreement. 
12. Regarding India's argument that in its determination of de facto  specificity, Commerce did 
not take into account the criteria in the last sentence of Article 2.1(c), Canada considers that the 
two factors in the third sentence of Article 2.1(c) , although they may be of great significance for 
the determination of de facto  specificity in some instances, do not warrant individual examination 
in every case. In particular, where it is well-known that an economy is highly diversified or that a 
subsidy has been provided over an extended period  of time, these facts have likely been "taken 
into account" by the investigating authority in its analysis of de facto  specificity under 
Article 2.1(c), even if they were not explicitly addressed in the determinations.  
IV. THE USE OF FACTS AVAILABLE AND ADVERSE FACTS AVAILABLE UNDER 
ARTICLE 12.7 OF THE SCM AGREEMENT  
13. Canada considers that Article 12.7 of the SC M Agreement allows an investigating authority 
to make determinations based on "facts available" to it. In some situations, facts available will 
include facts that are less favourable to a party than the facts that the party would have submitted itself, if it had responded in a timely and complete manner. 
14. Reading Article 12.7 in the context of Annex II to the Antidumping Agreement, as suggested 
by the Appellate Body in Mexico – Anti-Dumping Measures on Rice , confirms that the use of facts 
that are detrimental to the respondent is permissible.  
15. An investigating authority's discretion to choose among the available facts is not unlimited. 
First, the authority must take into account all the "substantiated facts" provided by a party, even 
where they constitute an incomplete response to a question. Second, as the Appellate Body Report 
in Mexico – Anti-Dumping Measures on Rice  stated, facts available may only be used where they 
"[…] reasonably replace the information that an interested party failed to provide". Most 
importantly, a determination must have its basis in facts. An investigating authority's determination must therefore always be based on positive evidence  on the record. 
16. An investigating authority should also be permitted to draw adverse conclusions, or 
inferences, under certain circumstances. Where a party withholds information, a reasonable and 
objective investigating authority may find that a party should not benefit from a lack of cooperation and use facts on the record in a way that is not favourable to a party. 
17. This interpretation of Article 12.7 and Annex II is supported by the findings of the panel in  
EC – Countervailing Measures on DRAM Chips , which found that an investigating authority may be 
justified in drawing adverse inferences from the failure to cooperate of a party. 
18. Canada considers that drawing of adverse inferences should not be in retribution against a 
party.WT/DS436/R/Add.1 
 
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  ANNEX D-4 
THIRD PARTY ORAL STATEMENT OF CANADA 
I. INTRODUCTION 
1. Canada thanks the Panel for the opportunity to  present its views in this important dispute. 
2. In this oral statement, we will discuss th ree issues: the use of benchmarks other than 
private prices in the country of provision to calc ulate an amount of benefit under Article 14(d) of 
the SCM Agreement, and very briefly, specificity and new subsidy allegations on review.  
3. We will not address in our statement today th e other issues raised in our written submission 
– the term "public body" and the use of adverse facts – but we stand ready to respond to any questions that the Panel may have on them. 
II. THE USE OF OUT-OF-COUNTRY BENCHMARKS  
4. Turning first to the use of out-of-country benchmarks. In establishing the adequacy of 
remuneration under Article 14(d) where a government provides goods, an investigating authority may, in very limited circumstances, use a benchmark other than private prices in the country of 
provision to calculate the benefit to the recipient.
1 
5. Prices other than private prices in the country of provision can be used only if it is 
established that market prices are distorted and the distortion is due to the presence of the 
government in the domestic market as a pr ovider of the same or similar goods. In US – 
Antidumping and Countervailing Duties (China) , the Appellate Body stated that price distortion 
must be established on a case-by-case basis an d that even where evidence indicates that the 
government is a predominant supplier of goods, evidence other than government market share 
must be considered.2 
6. As to the benchmark used for establishing adequacy of remuneration where private prices 
are unavailable, the Appellate Body in US – Softwood Lumber IV  accepted that alternatives may 
include world market prices or prices constructed on the basis of production costs.3 The Appellate 
Body emphasized that where the investigating authority proceeds in that way, it must ensure that the "resulting benchmark relates or refers to, or is connected with, prevailing market conditions in 
the country of provision, and must reflect price, quality, availability, marketability, transportation 
and other conditions of purchase or sale".
4 
7. Canada considers that the use of an alternative benchmark based on a constructed price, 
using among other elements, costs of production, may be appropriate in some cases. This would 
apply where a constructed price reflects the market conditions in the country of provision of the 
good as set out in Article 14(d) of the SCM Agreement.  
III. SPECIFICITY 
8. We turn now briefly to the issue of determinations of de facto  specificity under Article 2.1(c) 
of the SCM Agreement. In its determination of de facto  specificity, an investigating authority needs 
to take into account the extent of economic diversification and the length of time the subsidy 
programme has been in operation. This does not mean that the investigating authority needs to 
address these issues explicitly in every case. Ra ther, those issues need to be addressed where 
they are raised by an interested party or where the facts of the case warrant an investigation.  
                                               
1 Appellate Body Report, US – Softwood Lumber IV , para. 102. 
2 See Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 446. 
3 Appellate Body Report, US – Softwood Lumber IV , para. 106. 
4 Ibid. WT/DS436/R/Add.1 
 
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  IV. NEW SUBSIDY ALLEGATIONS ON REVIEW 
9. Finally, Canada disagrees with India's argument that, where the same subsidized good is 
concerned, every new subsidy allegation requires initiation of a new investigation under Article 11 of the SCM Agreement. New subsidy allegations sh ould be permitted during review proceedings 
where appropriate protection of due process rights is provided to interested parties.  
10. Mr. Chairman, distinguished members of the Pa nel, this concludes Canada's oral statement. 
We thank you for your attention and would be pleased to answer any questions that you might 
have.
 WT/DS436/R/Add.1 
 
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  ANNEX D-5 
EXECUTIVE SUMMARY OF THE THIRD PA RTY WRITTEN SUBMISSION OF CHINA 
I. INTRODUCTION 
1. In this submission, China will presen t its views on the following three issues: 
(i) Public body;  
(ii) Input specificity; and (iii) Adverse facts available. 
II. PUBLIC BODY 
2. In their respective First Written Submissions, India asserts that the United States' 
determination that National Mineral Development Corporation is a "public body" is contrary to Article 1.1(a)(1) of the SCM Agreement , relying principally on the Appellate Body's holdings in U.S. 
– Antidumping and Countervailing Duties (China) . But the United States seeks to reargue the 
interpretation of the term "public body". In light of  the positions of the parties, China would like to 
submit its views in relation to the issue of "p ublic body" in the following three subsections. 
A. The Appellate Body's Definitive Interp retation of The Term "Public Body" in U.S. – 
Antidumping and Countervailing Duties (China)  
3. In U.S. – Antidumping and Countervailing Duties (China) , the Appellate Body provided 
definitive interpretation of the term "public body ", that is, a public body within the meaning of 
Article 1.1(a)(1) of the SCM Agreement  "must be an entity that possesses, exercises or is vested 
with governmental authority".
1 
4. For the application of the above interpretation , the Appellate Body observed that evidence of 
government ownership "cannot, without more, serve as a basis for establishing that the entity is 
vested with authority to perform a governmental function", and accordingly, "such evidence, alone, cannot support a finding that an entity is a public body".
2 
B. Relevance to This Dispute of The Appellate Body's Le gal Interpretation 
5. As noted by the Appellate Body, legal in terpretation embodied in adopted panel and 
Appellate Body reports "becomes part and parcel of the acquis  of the WTO dispute settlement 
system"3, and as such, "create legitimate expectations among WTO Members" that "should be 
taken into account where they are relevant to any dispute".4 Therefore, "following the Appellate 
Body's conclusions in earlier disputes is not only appropriate, but is what would be expected from panels, especially where the issues are the same".
5 The Appellate Body further observed that 
"absent cogent reasons, an adjudicatory body will resolve the same legal question in the same way 
in a subsequent case".6 
6. In China's view, it should be a non-controversial proposition that, at the very least, to 
merely advance arguments that the Appellate Bo dy has already considered and rejected cannot 
justify the extraordinary step of departing from a legal interpretation embodied in a prior adopted Appellate Body report. 
                                               
1 U.S. – Antidumping and Coun tervailing Duties (China) , Appellate Body Report, para. 317. 
2 U.S. – Antidumping and Coun tervailing Duties (China) , Appellate Body Report, para. 346. 
3 U.S. – Stainless Steel (Mexico) , Appellate Body Report, para. 160. 
4 U.S. – Continued Zeroing , Appellate Body Report, para. 362. 
5 U.S. – Continued Zeroing , Appellate Body Report, para. 362. 
6 U.S. – Stainless Steel (Mexico) , Appellate Body Report, para. 160. WT/DS436/R/Add.1 
 
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  7. Therefore, China submits that the legal inte rpretation regarding public body developed by 
the Appellate Body in U.S. – Antidumping and Countervailing Duties (China)  should be followed by 
the Panel in this case and should serve as the foundation for any findings regarding the public body determination at issue.  
C. The U.S. Ex Post Rationalization 
8. In its First Written Submission , the United States seeks to justify the USDOC's public body 
determinations on an "alternative" basis
7, which, in China's view, presents a classic definition of 
ex post rationalization and should be rejected by the Panel.  
9. China respectfully submits that it is not the Panel's task to speculate on what the USDOC 
might have concluded had it applied proper interpretations of the SCM Agreement  to the facts on 
the record. Nor can the United States seek to defend the USDOC's determinations based on a 
rationale other than the rationale that the USDOC adopted. The Panel should assess whether the 
USDOC had based its public body finding on majority ownership in the administrative reviews at issue. If so, the Panel should apply the legal standard provided by the Appellate Body in U.S. – 
Anti-Dumping and Countervailing Duties (China) and conclude that the United States has acted 
inconsistently with Article 1.1(a)(1) of the SCM Agreement . 
III. INPUT SPECIFICITY 
10. In this regard, China would like to submit its views on certain important aspects of the legal 
standards under Article 2 of the SCM Agreement  that it deems relevant to this dispute. 
A. The "Other Factors" Under Article 2.1(c) Must Be Evaluated on the Basis of a "Prior 
Appearance of Non-Specificity" Resulting fr om the Application of Article 2.1(a) and 
Article 2.1(b) 
11. China submits that Article 2.1 contemplates an  analysis in a manner that the assessment of 
de facto  specificity under Article 2.1(c) must follow the initial appearance of non-specificity 
concluded as a result of the analysis under Article 2.1 subparagraphs (a) and (b). Therefore, an 
investigating authority is obliged first to consider the principles set out in subparagraphs (a) and (b), and may proceed to the "other factors" under subparagraph (c) only if the application of the 
prior principles under subparagraphs (a) and (b) has led to an appearance of non-specificity.  
12. This is not a simple matter of form, but an important issue of substance. As the Appellate 
Body observed in U.S. – Anti-Dumping and Countervailing Duties (China) , "subparagraphs (a) 
through (c) are to be considered within an analytical framework that recognizes and accords 
appropriate weight to each principle," and "the  application of one of the subparagraphs of 
Article 2.1 may not by itself be determinative in arriving at a conclusion that a particular subsidy is or is not specific."
8 
B. The First Factor of Article 2.1(c) Op erates on the Predicate of A "Subsidy 
Programme" 
13. China holds the view that a "subsidy programme" must have been identified and 
substantiated when an investigating authority evaluates specificity under the first two "other 
factors" under Article 2.1(c). As explained by the panel in EC and certain member States – Large 
Civil Aircraft , "[i]t is apparent from the text of the first and second specificity factors that 'the 
subsidy programme' stands for the programme that must be considered when evaluating whether 
there has been 'use of a subsidy programme by a limited number of certain enterprises' or 
'predominant use by certain enterprises'."9  
14. As a result, in any evaluation of specificity under these two factors, logically, "the starting 
point should be the identification of the relevant subsidy programme."10 Without first identifying 
                                               
7 United States' First Written Submission, para. 379. 
8 U.S. – Anti-Dumping and Coun tervailing Duties (China) , Appellate Body Report, para. 366.  
9 EC and certain member States – Large Civil Aircraft , Panel Report, para. 7.966. 
10 EC and certain member States – Large Civil Aircraft , Panel Report, para. 7.993. WT/DS436/R/Add.1 
 
- D-12 - 
 
  the relevant subsidy programme, including its scope and content, the investigating authority is 
unable to know who the users of that program are and whether they represent "a limited number of certain enterprises" or "predominant use".  
C. Article 2.1(c) Requires Consideration of the Two Factors in The Last Sentence 
15. China submits that an investigating authority must take into account the two factors set 
forth in the third sentence of Article 2.1(c), namely, the extent of diversification of economic activities within the jurisdiction of the granting authority and the length of time during which the 
subsidy programme has been in operation. 
16. As the panel held in U.S. – Large Civil Aircraft (2nd Complaint) , each of the "other factors" 
set forth under Article 2.1(c) must be evaluated in light of the two factors described in the third sentence.
11 Therefore, the requirement that the two fa ctors set forth in the third sentence of 
Article 2.1(c) must be considered is clear and unambiguous. If an investigating authority skips the 
mandatory consideration, the panel should find that the investigating authority has acted inconsistently with Article 2.1(c).  
IV. ADVERSE FACTS AVAILABLE 
17. The wording of Article 12.7 of the SCM Agreement  is clear and unambiguous. What is 
allowed under Article 12.7 is merely the use of "facts available" when there is non-cooperation by 
any interested Member or interested party, not the use of "adverse facts available", let alone 
"adverse inferences".  
18. In light of the Appellate Body's analysis in Mexico – Anti-Dumping Measures on Rice
12, China 
submits that, in a countervailing duty investigation, the investigating authority is precluded from 
using whatever evidence it wishes. Even in a case where the investigating authority deems an 
interested Member or interested party uncooperativ e, the authority must evaluate objectively the 
alternative information on the record to decide which is most fitting and appropriate for filling in 
the gap in the record. Such information can only be the "best information available" and "those 
that may reasonably replace the information that an interested party failed to provide", but not simply the "adverse facts". If such information is from secondary sources, the investigating 
authority should further ascertain its reliability and accuracy. 
19. An even more fundamental requirement under Article 12.7 is that the investigating 
authority's determination must be based on actual facts on the record. As observed by the panel in China – GOES , "even when applying facts available, an investigating authority's determination 
must have a factual foundation."
13 The panel thus concluded that "[w]hile non-cooperation triggers 
the use of facts available, non-cooperation does not justify the drawing of adverse inferences."14 
20. In sum, China submits that the use of "adverse facts available" or "adverse inferences", as 
opposed to facts available on the record, is inconsistent with Article 12.7 of the SCM Agreement . 
V. CONCLUSION 21. In conclusion, China is of the following opinion: 
(i) To find a "public body" within the meaning of Article 1.1(a)(1) of the SCM Agreement , 
the investigating authority must find "an entity that possesses, exercises or is vested with governmental authority". Evidence of government ownership in itself cannot serve as the basis for establishing a "public body". The legal interpretation regarding 
"public body" developed by the Appellate Body in U.S. – Antidumping and 
Countervailing Duties (China)  should be followed and serve as the foundation for any 
findings on India's claims regarding "public body" determination. Further, the Panel 
should reject the United States' attempt of ex post  rationalization and review the 
                                               
11 U.S. – Large Civil Aircraft (2nd Complaint) , Panel Report, para. 7.747. 
12 Mexico – Anti-Dumping Measures on Rice , Appellate Body Report, paras. 289~298. 
13 China – GOES , panel report, para. 7.296. 
14 China – GOES , panel report, para. 7.302. WT/DS436/R/Add.1 
 
- D-13 - 
 
  USDOC's determinations in dispute based only on the rationales as set out in those 
determinations.  
(ii) In respect of the interpretation and application of Article 2.1(c) of the 
SCM Agreement , firstly , China submits that the "other factors" under Article 2.1(c) 
must be evaluated on the basis of a "prior appearance of non-specificity" resulting 
from the application of Article 2.1(a) and Article 2.1(b). Because the USDOC failed to follow the proper order of analysis and to accord appropriate weight to each of the 
principles under Article 2.1, the United States has acted inconsistently with 
Article 2.1(c) of the SCM Agreement  for this reason alone. Secondly , China opines that 
the first factor under Article 2.1(c) operates on the predicate of a "subsidy programme". Because of the failure to properly identify and substantiate a "subsidy 
programme" in the USDOC's de facto specificity finding, the administrative reviews at 
issue are WTO-inconsistent. Thirdly , because Article 2.1(c) explicitly requires 
consideration of the two factors in the last sentence but the USDOC manifestly failed 
to do so, the United States has acted inconsistently with Article 2.1(c).  
(iii) Article 12.7 of the SCM Agreement  only permits the use of "facts available", which 
requires the investigating authority to use the "best information available" and "those 
that may reasonably replace the information that an interested party failed to 
provide". Meanwhile, the use of "facts available" prohibits the investigating authority from drawing adverse inferences that could not find factual foundations in the record at all. Thus, the use of "adverse facts available" or "adverse inference" in a 
countervailing duty investigation is inconsistent with Article 12.7 of the 
SCM Agreement .WT/DS436/R/Add.1 
 
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  ANNEX D-6 
THIRD PARTY ORAL STATEMENT OF CHINA 
1. Mr. Chairman, members of the Panel, it is my honor to appear before you today to present 
the views of China as a third party. In this oral statement, China will discuss three issues raised in 
this case, namely, public body, input specificity and adverse facts available. 
2. China will first submit its views on the issue of public body . In their respective First Written 
Submissions , India asserts that the USDOC's determination that National Mineral Development 
Corporation is a "public body" is contrary to Article 1.1(a)(1) of the SCM Agreement . India relied 
principally on the Appellate Body's holdings in U.S. – Antidumping and Countervailing Duties 
(China) . But the United States seeks to reargue the interpretation of the term "public body". In 
light of the positions of the parties, China would like to submit its views on the issue of "public 
body" in the following three aspects.  
3. First, the Appellate Body has provided a definitive  interpretation of the term "public body" 
in U.S. – Antidumping and Countervailing Duties (China) . That is, a public body within the meaning 
of Article 1.1(a)(1) of the SCM Agreement  "must be an entity that possesses, exercises or is 
vested with governmental authority".1 
4. For the application of the above interpretation , the Appellate Body observed that evidence of 
government ownership "cannot, without more, serve as a basis for establishing that the entity is 
vested with authority to perform a governmental function". Accordingly, "evidence [of government 
ownership], alone, cannot support a finding that an entity is a public body".2 
5. Second , the Appellate Body's legal interpretation in U.S. – Antidumping and Countervailing 
Duties (China)  is decisive in resolving the issue of pub lic body in this dispute. As noted by the 
Appellate Body, legal interpretation embodied in adopted panel and Appellate Body reports "becomes part and parcel of the acquis  of the WTO dispute settlement system"
3, and as such, 
"create legitimate expectations among WTO Members" that such reports "should be taken into 
account where they are relevant to any dispute".4 Therefore, "following the Appellate Body's 
conclusions in earlier disputes is not only appropriate, but is what would be expected from panels, 
especially where the issues are the same".5 According to the Appellate Body, "absent cogent 
reasons, an adjudicatory body will resolve the same legal question in the same way in a subsequent case".
6 
6. In this dispute, the United States merely advances arguments that the Appellate Body has 
already considered and rejected. In  China's view, this clearly cannot justify the extraordinary step 
of departing from a legal interpretation embodied in an adopted Appellate Body report. Therefore, 
China submits that the Panel should follow the legal interpretation regarding public body developed 
by the Appellate Body in U.S. – Antidumping and Countervailing Duties (China) . That legal 
interpretation should serve as the foundation for any findings regarding the public body determination at issue. 
7. Third, the United States' attempt of ex post  rationalization must be rejected by the Panel. 
In its First Written Submission , the United States seeks to justify the USDOC's public body 
determinations on an "alternative" basis.
7 That attempt, in China's view, is a classic example of 
ex post  rationalization and must be rejected by the Panel. 
8. China respectfully submits that it is not the Panel's task to speculate on what the USDOC 
might have concluded had it applied the proper interpretations of the SCM Agreement  to the facts 
                                               
1 U.S. – Antidumping and Coun tervailing Duties (China) , Appellate Body Report, para. 317. 
2 U.S. – Antidumping and Coun tervailing Duties (China) , Appellate Body Report, para. 346. 
3 U.S. – Stainless Steel (Mexico) , Appellate Body Report, para. 160. 
4 U.S. – Continued Zeroing , Appellate Body Report, para. 362. 
5 U.S. – Continued Zeroing , Appellate Body Report, para. 362. 
6 U.S. – Stainless Steel (Mexico) , Appellate Body Report, para. 160. 
7 United States' First Written Submission, para. 379. WT/DS436/R/Add.1 
 
- D-15 - 
 
  on the record. Nor can the United States seek to defend the USDOC's determinations based on a 
rationale other than the rationale that the USDOC adopted. The Panel should assess whether the USDOC had based its public body finding on majority ownership in the administrative reviews at issue. If so, the Panel should apply the legal standard provided by the Appellate Body in U.S. - 
Anti-Dumping and Countervailing Duties (China)  and conclude that the United States has acted 
inconsistently with Article 1.1(a)(1) of the SCM Agreement. 
9. Now I come to the second issue, input specificity . In this regard, China would like to 
submit its views on certain important aspects of the legal standards under Article 2 of the 
SCM Agreement  that it deems relevant to this dispute. 
10. First of all,  China submits that Article 2.1 contemplates a sequential analysis. That is, the 
assessment of de facto  specificity under Article 2.1(c) must come after the initial appearance of 
non-specificity concluded by the analysis under Article 2.1 subparagraphs (a) and (b). An 
investigating authority is obliged first to consider the principles set out in subparagraphs (a) and (b). It may proceed to the "other factors" under subparagraph (c) only if the application of the 
prior principles under subparagraphs (a) and (b) has led to an appearance of non-specificity.  
11. As the Appellate Body has explained, "[t]he inquiry under Article 2.1(c) … focuses on 
whether a subsidy, although not apparently limited to certain enterprises from a review of the 
relevant legislation or express acts of a granting authority, is nevertheless allocated in a manner 
that belies the apparent neutrality of the measure."
8 For this reason, the analysis of the "other 
factors" under Article 2.1(c) must follow from, and be informed by, the conclusions that led to the initial appearance of non-specificity under subparagraphs (a) and (b). 
12. This is not a simple matter of form, but an important issue of substance. As the Appellate 
Body observed in U.S. – Anti-Dumping and Countervailing Duties (China) , "subparagraphs (a) 
through (c) are to be considered within an analytical framework that recognizes and accords 
appropriate weight to each principle." Also, "the application of one of the subparagraphs of 
Article 2.1 may not by itself be determinative in arriving at a conclusion that a particular subsidy is or is not specific."
9 
13. Secondly,  China holds the view that a "subsidy programme" must have been identified and 
substantiated when an investigating authority evaluates specificity under the first two "other factors" under Article 2.1(c). In EC – Large Civil Aircraft , the panel read from the text of the 
first two "other factors" that "'the subsidy programme' stands for the programme that must be 
considered when evaluating whether there has be en 'use of a subsidy programme by a limited 
number of certain enterprises' or 'pre dominant use by certain enterprises'."
10  
14. As a result, in any evaluation of specificity under these two factors, logically, "the starting 
point should be the identification of the relevant subsidy programme."11 Without first identifying 
the relevant subsidy programme, including its scope and content, the investigating authority is unable to know who the users of that program are and whether they represent "a limited number 
of certain enterprises" or "predominant use".  
15. In determinations at issue, although th e USDOC purported to consider the "sale of 
high-grade iron ore for less than adequate rem uneration" to be a "subsidy programme", it had 
failed to explain in the one-sentence finding why or how the sales of the input at issue constitutes 
a "subsidy programme". In China's view, becaus e of the failure properly to identify and 
substantiate a "subsidy programme" in the USDOC's de facto specificity finding under the first 
factor of Article 2.1(c), the administrative reviews at issue are thus WTO-inconsistent. 
16. Last but not the least,  China submits that an investigating authority must take into 
account in its determination of de facto  specificity the two factors set forth in the third sentence of 
Article 2.1(c), namely, the extent of diversification of economic activities within the jurisdiction of 
the granting authority and the length of time during which the subsidy programme has been in 
operation. 
                                               
8 U.S. – Large Civil Aircraft (2nd Complaint) , Appellate Body Report, para. 877. 
9 U.S. – Anti-Dumping and Coun tervailing Duties (China) , Appellate Body Report, para. 366. 
10 EC and certain member States – Large Civil Aircraft , Panel Report, para. 7.966. 
11 EC and certain member States – Large Civil Aircraft , Panel Report, para. 7.993. WT/DS436/R/Add.1 
 
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  17. In its First Written Submission , the United States appears to propose that an investigating 
authority is not required to "address explicitly" the two factors in the third sentence of Article 2.1(c) if the interested party failed to raise issues regarding those two factors.
12 That China 
cannot agree. 
18. As the panel held in U.S. – Large Civil Aircraft (2nd Complaint) , each of the "other factors" 
set forth under Article 2.1(c) must be evaluated in light of the two factors described in the third sentence.
13 This requirement is clear and unambiguous. If an investigating authority skips 
the mandatory consideration, a panel should find that the investigating authority has acted 
inconsistently with Article 2.1(c).  
19. In respect of the third issue, adverse facts available , China is of the view that Article 12.7 
allows the use of only "facts available" when ther e is non-cooperation by any interested Member or 
interested party. It does not contemplate the use of "adverse facts available", let alone "adverse 
inferences".  
20. In light of the Appellate Body's analysis in Mexico – Anti-Dumping Measures on Rice14, China 
submits that, in a countervailing duty investigation, the investigating authority is precluded from 
using whatever evidence it wishes. Even in a case where the investigating authority deems an 
interested party uncooperative, the authority must evaluate objectively the alternative information 
on the record, in order to decide which is the most fitting and appropriate for filling in the gap in 
the record. Rather than simply the "adverse facts", such information must be the "best information available" and "those that may reasonably replace the information that an interested party failed to provide". If such information is from secondary sources, the investigating authority shall further 
ascertain its reliability and accuracy. 
21. The United States seems to have distorted what the Appellate Body meant by the "most 
fitting and appropriate" facts. This is what the United States stated in its own First Written 
Submission , which China quotes from paragraph 215: "the 'adverse' element is introduced when 
Commerce decides which available facts are appropriate to use when a party has provided no verifiable, substantiated information relevant to th e determination at hand." In this manner, using 
"adverse facts", instead of "most fitting and appropriate" ones, seems to have become the 
standard adopted by the United States. 
22. In China's reading of Article 12.7 and the Appe llate Body's interpretation, the rule does not 
mandate the use of facts that are favorable or adverse to the party. However, it does compel the 
use of facts that are most fitting and appropriate.  Therefore, if there is any exercise of using 
"adverse facts", it must be demonstrated that those "adverse facts" are the "most fitting and appropriate" ones. 
23. An even more fundamental requirement under Article 12.7 is that the investigating 
authority's determination must be based on actual facts on the record. As observed by the panel in China – GOES , "even when applying facts available, an investigating authority's determination 
must have a factual foundation."
15 The panel thus concluded that "[w]hile non-cooperation triggers 
the use of facts available, non-cooperation does not justify the drawing of adverse inferences."16 
This conclusion simply negates the position of the United States that "Commerce 'may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise 
available' if an interested party has failed to cooperate".
17 
24. In sum, China submits that the use of "adverse facts available" or "adverse inferences", as 
opposed to the most fitting and appropriate facts available on the record, is inconsistent with 
Article 12.7 of the SCM Agreement . 
                                               
12 U.S. First Written Submission , para. 420. 
13 U.S. – Large Civil Aircraft (2nd Complaint) , Panel Report, para. 7.747. 
14 Mexico –Anti-Dumping Measures on Rice , Appellate Body Report, paras. 289~298. 
15 China – GOES , panel report, para. 7.296. 
16 China – GOES , panel report, para. 7.302. 
17 U.S. First Written Submission , para. 215. WT/DS436/R/Add.1 
 
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  ANNEX D-7 
EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN  
SUBMISSION OF THE EUROPEAN UNION 
1. I NDIA'S CLAIMS "AS SUCH " AGAINST THE US LAW CONTAINED IN 19 CFR § 351.511( A)(2)( I) 
TO (III): ADEQUACY OF REMUNERATION FOR THE PR OVISION OF GOODS OR SERVICES BY THE 
GOVERNMENT  
1. The EU is of the view that India's claims ap pear to be based on flawed interpretations of 
Article 14(d) of the SCM Agreement. The perspectiv e of the provider of the goods or services, in 
the sense of whether the government makes a reasonable return when providing the goods or services in question, is not dispositive in determin ing the existence of "benefit" under Article 1.1(b) 
or its amount in accordance with Article 14(d)  of the SCM Agreement. The perspective of the 
provider advocated by India is similar to the "cost to the government" approach that has already 
been rejected to determine the existence of "ben efit" under Article 1.1(b) of the SCM Agreement. 
The AB Report in Canada – Aircraft  stands for the proposition that a "benefit" is to be determined, 
not by reference to whether the transaction imposes a net cost on the government, but rather by 
reference to whether the terms of the financial contribution are more favourable to what is available to the recipient on the market. Thus, in the EU's view, the perspective of the recipient of 
the goods provided by the government is the relevant starting point of the benefit analysis. 
Moreover,  the commercial considerations of the government when setting its prices would be 
relevant to the extent that they reflect those "prevailing market conditions" in the country of provision. However, they cannot be dispositive of whether the provision of goods or services 
conferred a "benefit" to the recipient. Whether th e government sold the good in question with 
profit or not is not determinative of whether the provision of such good conferred a "benefit" under 
Article 1.1(b) of the SCM Agreement. The same conclusion should be reached, mutatis mutandi , in 
the context of Article 14(d) of the SCM Agreement. Consequently, the EU submits that India's 
interpretation of Article 14(d) of the SCM Agreement is incorrect and thus should be rejected.  
2. I
NDIA'S CLAIMS "AS SUCH " AGAINST THE US LAW CONTAINED IN 19 CFR § 351.511( A)(2)( IV): 
ADJUSTMENT TO REFLECT THE PRICE THAT A FIRM ACTUALLY PAID OR WOULD PAY IF IT HAD IMPORTED 
THE PRODUCT  
2. The adequacy of the remuneration under Arti cle 14(d) of the SCM Agreement should start by 
locating a proper comparator in the marketplace of  the country of provision, i.e., the prices at 
which the same or similar goods are bought by private suppliers in arm's length transactions in the 
country of provision. If such prices are distorted in that market, thus rendering the comparison required under Article 14(d) of the SCM Agreement  circular, it may be necessary to have recourse 
to an external proxy benchmark or to a constructed proxy duly adjusted that somehow relates or 
refers to, or is connected with, the conditions prev ailing in the market of the country of purchase. 
In other words, in the absence of an actual price that is available on the market for the same 
product (e.g., because all prices are distorted because of the government intervention or, simply 
because the government controls prices or is the only provider), the comparison envisaged in the 
benefit analysis can be made by using a proxy for what would  have been paid on a comparable 
purchase of goods that could have been obtained on the market in the absence of the distortion 
(i.e., by reference to market principles) and, if needed, by making appropriate adjustments in 
order to avoid in particular the countervailing of genuine comparative advantages. 
3. Once the proper benchmark price has been identified, either in-country, outside-country or 
constructed proxy, the comparison required to determine the existence and amount of benefit has 
to be made at the same level of trade. Indeed, if the government price was set on an ex-works 
basis and the benchmark price is established on a Delivered At Place (DAP) basis, an adjustment 
s hould  b e  m ad e  to make  a p rop e r c omp aris on at  the same level of trade. Such an adjustment 
would not seek to reproduce the "conditions of sale" in the country of provision in accordance with Article 14(d); rather, it would pursue that, once the benchmark price has been found, the comparison between the government price and that benchmark price is properly made at the same 
level of trade. Indeed, the benchmark price would already be established taking into account the 
"prevailing market conditions" of the country of provision. Thus, the EU is of the view that WT/DS436/R/Add.1 
 
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  adjusting the government price and the benchmark price at the same level of trade (e.g. delivered 
prices) would not be inconsistent with Article 14(d) or Articles 19.3 and 19.4 of the SCM Agreement. 
4. Moreover, the EU observes that, if in-country  prices are not available because the product in 
question is only imported (that is, not produced locally), then it would appear reasonable to adjust 
the benchmark price taking into account such factor. To illustrate this with an example. Finally, the 
EU observes that it may be appropriate to compare the government price with a benchmark price 
on a delivered basis in other situations where in-c ountry prices are not available because e.g. they 
are distorted. That would be the case, for instance, when import prices are considered to be a proper market benchmark (i.e. reproducing the price that the recipient would have obtained in the country of provision on market terms).  
3. I
NDIA'S CLAIMS "AS SUCH " AGAINST THE US LAW CONTAINED IN 19 USC § 1677(7)(G),  
19 USC §  1675 A(A)(7),  AND 19 USC  § 1675 B(E)(2):  CUMULATION OF IMPORTS IN THE INJURY 
ANALYSIS  
5. Article 15.3 of the SCM Agreement permits ("may") cumulating subsidised imports from 
different countries "only" if three cumulative conditions ("and") are met. First, if the amount of 
subsidisation established in relation to the imports from each country is de minimis , i.e., 1 per cent 
or less ad valorem , the investigation must be terminated with respect to those imports, in 
accordance with Article 11.9 of the SCM Agreement. As a consequence of such termination, imports from such a country cannot be considered as "subsidised imports" within the meaning of those terms in Article 15 of the SCM Agreement. Consequently, in cases where several 
countervailing investigations against imports of the same product from different countries have 
been initiated, the volume of imports with respect to the country or countries for which the investigation was terminated in accordance with Article 11.9 of the SCM Agreement cannot be 
c o n s i d e r e d  a s  p a r t  o f  t h e  v o l u m e  o f  " s u b s i d i z e d  i m p o r t s "  w i t h i n  t h e  m e a n i n g  o f  t h a t  t e r m  i n  
Article 15 of the SCM Agreement. Thus, the first condition in Article 15.3 of the SCM Agreement 
(i.e., cumulation is permitted only if the amount of subsidisation established in relation to the 
imports from each country is more than de minimis ) would imply that the volume of imports found 
to be non-subsidised and thus terminated pursua nt to Article 11.9 of the SCM Agreement cannot 
be cumulated. The same should be concluded in cases where imports of products found to be subsidised are cumulated with imports found to be dumped in a parallel anti-dumping 
investigation. In the EU's view, the terms "subsi dized imports" in Article 15 of the SCM Agreement 
should be interpreted as referring to imports for which the investigating authority has found subsidisation specifically. The inclusion of dumped imports in the volume of subsidised imports for 
the purpose of the injury assessment in the contex t of the countervailing duty investigation would 
not be based on any provision of the SCM Agreement and would be illogical. Second , if the volume 
of imports from each country is negligible, the investigation must also be terminated with respect 
to those imports in accordance with Article 11.9 of the SCM Agreement.  
6. In the EU's view, Article 15.3 of the SCM Ag reement permits the cumulation of subsidised 
imports for the purpose of the injury analysis only if certain conditions are met. Further, the terms 
"subsidized imports" in Article 15 of the SCM Agreement should be understood as including 
imports for which there is a finding of subsidisation in the same period of time and may include 
imports of several countries.  
4. I
NDIA'S CLAIMS "AS SUCH " AGAINST THE US LAW CONTAINED IN 19 USC § 1677 E(B) AND THE 
IMPLEMENTING REGULATIONS CONTAINED IN 19 CFR § 351.308:  USE OF "ADVERSE FACTS 
AVAILABLE " 
7. In drawing inferences, an authority is not permitted to identify two different equally possible 
inferences, and then select the inference that is more adverse to the interests of a particular 
interested party, solely because it is more adverse (for example, in order to "punish" non-cooperation). Rather, the authority must draw the inference that best fits the facts that have been evidenced. However there are no facts that are per se  excluded from the set of facts to be 
taken into consideration for this purpose: so they include such things as the precise question that 
has been put; the procedural circumstances; the av ailability of the evidence being sought; and all 
the circumstances surrounding the absence of the requested information from the record. Thus, in 
this way, the behaviour of an interested party can colour the inferences that it may or may not be 
reasonable to draw in any particular instance. The more uncooperative a party is in fact, the more WT/DS436/R/Add.1 
 
- D-19 - 
 
  attenuated and extensive the inferences that it may be reasonable to draw. The EU would tend 
towards the view that whether or not a WTO Member has acted inconsistently with Article 12.7 of the SCM Agreement might depend less upon the particular label that has been used, and more upon a specific examination of all the surrounding facts and procedural context. Turning to the US 
law itself, the EU observes that it does not actually state that, in selecting facts and inferences, an 
investigating authority is entitled to prefer a particular fact or inference only because it is more 
adverse than some other fact or inference to the interests of a particular interested party, in order 
to punish  non-cooperation. It merely provides for the use of facts available; introduces the concept 
of adverse inference; and refers to the process of selecting from the facts otherwise available. On its face, therefore, the US law would appear to be perfectly capable of being applied in a manner 
consistent with Article 12.7 of the SCM Agreement. Furthermore, the US does not argue that an 
investigating authority is entitled to prefer a particular fact or inference only because it is more 
adverse than some other fact or inference to the interests of a particular interested party, in order to punish  non-cooperation. In these circumstances, the EU is not persuaded that India has 
demonstrated that the cited provisions of US law are "as such" inconsistent with the relevant 
provisions of the SCM Agreement. 
5. I
NDIA'S CLAIMS "AS APPLIED " AGAINST THE IMPOSITION OF COUNTERVAILING DUTY IN RESPECT OF 
SALE OF HIGH IRON GRADE IRON ORE BY NMDC 
8. With respect to the public body issue, the AB Report in US – Anti-Dumping and 
Countervailing Duties on China  had to be unconditionally accepted by the parties to that dispute 
and is now part of the acquis  of the WTO dispute settlement system, implying that, absent cogent 
reasons, the same legal question will be resolved in the same way in a subsequent case. In that 
case, the AB sought a balance between the US approach, with its emphasis on ownership and 
control  in general terms and China's approach, with its emphasis on governmental authority  and 
function , which approach the AB considered to coincide with and correspond to the attribution  
rules in the ARSIWA. The EU remains of the view that, insofar as the abstract test would be cast 
only in terms of the possibility of control through whatever means, that would be too broad. 
Ultimately, through their powers of regulation and taxation, for example, governments have the 
possibility to control all of the resources subject to  their jurisdiction. The EU considers that private 
bodies cannot be the source of entrustment or direction, but can transmit it. Public bodies may be 
the source of entrustment or direction, but need not necessarily have that capacity.  
9. With respect to de facto  specificity, the EU disagrees with India and agrees with the US on 
the question of whether or not Article 2.1(c) pr e-supposes an appropriate "comparative set" of 
"similarly situated" firms. Contrary to what India asserts, Article 2.1 is not addressed towards an 
issue of discrimination : rather, it addresses the issue of specificity . Furthermore, it is also not 
correct that the issue of revenue otherwise due  in Article 1 is the same as, or particularly informs, 
the issue of specificity  in Article 2.1. Given the inherent nature of taxation, it is not the case that 
the fiscal burden in any particular WTO Member falls equally on all firms or economic activities. 
This does not automatically mean that there are financial contributions. Rather, as the US correctly explains, it is necessary to establish a benchmark, against which to assess whether or not revenue otherwise due has been foregone. The function of Article 2.1 is quite different. It is to reasonably 
distinguish between measures that are generally applicable in a particular WTO Member, and those 
that rather apply to certain enterprises, as defined in Article 2.1. 
6. I
NDIA'S CLAIMS "AS APPLIED " AGAINST THE IMPOSITION OF COUNTERVAILING DUTY ON GRANT OF 
CAPTIVE MINING RIGHTS FOR IRON ORE AND COAL  
10. With respect to the existence of a financial contribution, the EU agrees with the US that, 
taking into account the facts and circumstances of this case, the grant of mining rights for iron ore 
and coal does amount to the "provision" of a good within the meaning of Article 1 of the 
SCM Agreement. In the opinion of the EU, India has not established any meaningful distinction between the facts of US – Softwood Lumber IV  and the facts of this case. 
11. With respect to the question of specificity, th e EU refers to its observations above, and notes 
that the assessment of this issue may depend, in part, on the assessment of the factual matter of 
whether or not the measures referred to in the measure at issue actually exist. However, we would also point that, as already explained above, we do not consider that a finding of de facto  specificity 
under Article 2.1(c) necessarily requires identification of a subsidy programme. WT/DS436/R/Add.1 
 
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  7. I NDIA'S CLAIMS "AS APPLIED " AGAINST THE SDF  PROGRAM  
12. With respect to the issue of public body, the EU  respectfully refers to the explanations that it 
has already provided above, and which it is not ne cessary to repeat. The EU notes that the US has 
referred to a number of elements, going beyond gove rnment ownership, that could be relevant to 
a determination of whether or not the relevant entity is a public body. As indicated above, for the 
purposes of this dispute, the EU takes no positi on on the conclusions and findings that the Panel 
should eventually reach when applying the law to the particular facts of this case. 
13. With respect to the question of whether or no t there is any direct transfer of funds, the EU 
would point out that Article 1.1(a)(1)(i) begins with the phrase "a government practice involves". This is what is therefore required to meet the re quirements of that provision. The text does not 
provide that the transfer must involve a change in ownership over the funds from the government 
to the putative beneficiary, as India would have it: merely that "a government practice involves" 
such a transfer. Thus, even if would be the case that the transfer would be made by the JPC, as 
India asserts but the US contests, in itself that would not necessary mean that the measure at 
issue would be inconsistent. 
 WT/DS436/R/Add.1 
 
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  ANNEX D-8 
EXECUTIVE SUMMARY OF THE THIRD PARTY ORAL  
STATEMENT OF THE EUROPEAN UNION 
I. A LLEGED NEW SUBSIDIES IN REVIEW INVESTIGATIONS  
1. We address in this Oral Statement an issue that we did not address in our Third Party 
Written Submission: the issue of alleged "new" subsidies in prospective reviews and retrospective final assessments. We recall, in this respect, that  the US administrative reviews about which India 
complains combine both a prospective element (tha t is, the rate of duty to be applied going 
forward) and a retrospective element (that is, the amount of duty to be finally collected with respect to the past). In our view, the prospective element is subject to the relevant disciplines of 
Article 21 of the SCM Agreement. The retrospective el ement is subject to the relevant disciplines of 
Article 19.3 of the SCM Agreement, the SCM Agreement not having any provisions directly 
equivalent to Article 9.3 of the Anti-Dumping Agreement.  
A. The prospective element 
 
2. We deal first with the prospective element. India's position is that alleged "new" subsidies 
may only be brought within the scope of prospective reviews conducted pursuant to Article 21.2 of 
the SCM Agreement if the disciplines of Articles 11.1, 11.2, 13.1, 22.1 and 22.2 are complied with. 
In case such "new" subsidies are includ ed in the scope of prospective reviews ex officio , that is, 
without a written application by the domestic industry, India claims that, pursuant to Article 11.6, 
the disciplines of Article 11.2 must still be complied with. Since these rules were not complied with 
in this case, the measures at issue are inconsistent with the SCM Agreement. The US position is that these provisions do not apply to such review s, because they only apply to "investigations". 
 
3. The European Union does not agree with India that Article 11 applies to review investigations initiated pursuant to Article 21.2. In our view, it is clear that, by its own terms, 
Article 11 of the SCM Agreement applies to a particular type of investigation, namely an 
investigation "to determine the existence, degree and effect of any alleged subsidy", commonly referred to as an original investigation. It does not apply to a review investigation conducted pursuant to Article 21.2, the purpose of which is different, namely, to determine whether or not 
the countervailing duty continues to be warranted. Article 21.4 incorporates the provisions of 
Article 12, but not the provisions of Article 11.  
4. On the other hand, the European Union does not agree with the United States that the 
SCM Agreement is based on an absolute definitional distinction between the term "investigation" and the term "review". Neither term is defined in the SCM Agreement. In fact, there are many 
provisions of the SCM Agreement that use the term "investigation" or a similar term in a context 
that can only refer not only to original investigations, but also to review investigations. A contextual analysis of the SCM Agreement reveal s that there are five types of proceeding: an 
original proceeding pursuant to Article 11; an interim review proceeding pursuant to Article 21.2; a 
sunset review proceeding pursuant to Article 21.3; a newcomer review proceeding pursuant to 
Article 19.3, second sentence; and a final assessment proceeding pursuant to Article 19.3, first sentence. Each of these involves an investigation, albeit it of a different type with different 
objectives. This observation is of great importance when it comes to a systematic interpretation of 
both the SCM Agreement and the Anti-Dumping Agr eement, it being simply wrong to posit that 
any provision using the term "investigation" is necessarily limited to original investigations. 
 
5. The European Union observes that Article 21.1 provides for the duty to remain in force only as long as necessary to counteract injurious subsidization. Article 21.2 uses the term "recur" expressly with respect to injury, but the context of this paragraph and the Article as a whole 
supports the view that it also captures the concept of subsidization  that recurs or may recur. 
Article 21.3 also refers to the "recurrence" of subs idization. In the view of the European Union, the 
term "recur" indicates something that has stopped an d then started again, or that may start again. 
In other words, it refers to something that is not the same subsidy as the subsidy assessed in the 
original investigation. In contrast, the term "continue" appears to refer to a subsidy that was the WT/DS436/R/Add.1 
 
- D-22 - 
 
  subject of the original investigation. The term "r ecur" therefore supports the view that an interim 
review pursuant to Article 21.2 may relate to a new subsidy.  
6. At the same time, the term "recur" suggests an element of commonality between what 
occurred previously and what occurred or what may occur subsequently. It most obviously catches 
so-called recurring subsidies, such as those gr anted pursuant to an overarching programme, or 
those that have such a close nexus that they are, in effect, incidences of the application of such a programme, even if the programme itself is not subject to investigation. In fact, the 
European Union would go further and suggest that the element of commonality is simply that the 
measures in question are both subsidies within the meaning of Article 1 of the SCM Agreement. 
This would mean that new subsidies could be brought within the scope of review investigations. As the United States observes, there would not appear to be any point in running a new original 
investigation in parallel to an existing measure, insofar as one is considering the prospective 
application of a duty or a combined duty, because no issue of due process arises. Just as in an anti-dumping proceeding, where the continuing and changing behaviour that is subject to scrutiny, 
also in review investigations, is the pricing by the firm investigated, so, in a countervailing duty 
case, the continuing and changing behaviour that is subject to scrutiny, also in review investigations, is the "subsidization" by the Member investigated. In this respect, the 
European Union finds it particularly significant that it is this general term (subsidization) that is 
used in Articles 21.1, 21.2 and 21.3 of the SCM Ag reement: there is no reference to individual 
subsidies or subsidy programmes. This is consistent with Article VI:3 of the GATT 1994, which provides that the purpose of a countervailing duty is to offset any subsidy bestowed on the 
exported good. 
 7. That being said, the European Union would take the view that the right of an investigating 
authority to initiate a review pursuant to Arti cle 21.2 of the SCM Agreement is not unfettered. 
Rather, by the terms of that provision, such a review may only be initiated where it is "warranted" or if an interested party submits "positive evidence substantiating the need for a review." In our 
view, what this actually means in practice will depend on the facts of a particular case, and be 
informed, as a matter of context, by Article 11 of the SCM Agreement.  8. For example, if the original subsidy and the alleged  new subsidy are both incidences of the 
application of a subsidy programme countervailed by the original duty, it would seem self-evident 
that the more recent subsidy may be included in the scope of the Article 21.2 review, since it would not be a new subsidy at all, but simply an incidence of the application of an original subsidy. 
This would also be the case where an origin al subsidy programme has been amended: the 
amended programme could be dealt with in a review investigation.  
9. On the other hand, if the original subsidy and the alleged new subsidy are very different (for 
example, different regional level, different granting authority, different type of financial contribution, different calculation of benefit, diff erent assessment of specificity, etc.), then it 
seems to us that the evidential requirements for initiation of the review with respect to such a 
genuinely new subsidy, contextually informed by Article 11, may, in practice, more closely 
approach the requirements set out in Article 11. Thus, such new subsidies could be investigated in reviews upon provision of sufficient evidence by the applicant or, in special circumstances, the 
investigating authority. 
 10. In an intermediate situation, where the alleged new subsidy is distinct from but similar to 
the original subsidy, and there may, for example, be a discussion about whether or not the original 
subsidy has been "replaced" by the subsequent subsidy, the evidential requirements may, in 
practice, similarly be at an intermediate level.  
11. The European Union considers that, in its assessment, the Panel should also take into 
account that, under Article 11.2 of the SCM Agreemen t, an application is required to contain such 
information as is reasonably available to the applicant (that is, in the public domain and accessible 
at no or little cost to the applicant), and this same approach would apply in the context of 
Article 21.2. Thus, if information about a subsidy (including such things as the products it benefits, the amounts of financial contribution involved, the benefits involved and its specificity) only 
becomes reasonably available after the initiation of an original investigation or review 
investigation, an applicant could seek to add such subsidy to a pending investigation, subject to requirements of due process.  WT/DS436/R/Add.1 
 
- D-23 - 
 
  12. Similarly, the European Union considers that the Panel should also take into account the fact 
that both Article 21.2 and Article 11.6 provide for the possibility of ex officio  initiation. This could 
include, for example, a situation in which information about a subsidy was not publicly available prior to initiation, but is only obtained by the investigating authority during the course of an 
investigation. 
 13. The European Union leaves it to the Panel to assess whether or not, in this particular case, 
the evidence of the alleged new subsidies was sufficient to amount to positive evidence warranting 
the initiation of the relevant review investigations.   14. Consistent with these observations, the European Union is of the view that, by its own 
terms, Article 13.1 of the SCM Agreement applies to "any investigation". As we have explained 
above, this is not limited to original investigations within the meaning of Article 11 of the SCM Agreement, but extends to each of the five types of investigations that we have already 
identified.  
 15. At the same time, in our view, the obligation of prior consultation applies only once with 
respect to each subsidy. This means that if th e same subsidy or subsidy programme that was the 
subject of an original investigation is subsequently the subject of a review investigation, there is no obligation to re-consult. However, if a new subsidy is brought within the scope of a review investigation, either following a request from the applicant or in special circumstances by the 
investigating authority, because there is positive evidence warranting the initiation of the review 
investigation also with respect to such new subsidy, then the obligation of prior consultation in Article 13.1 applies. This seems to us to be the necessary and reasonable corollary to accepting 
that new subsidies can be brought within the scope of review investigations conducted pursuant to 
Article 21.2 of the SCM Agreement.  
B. The retrospective element 
 
16. We turn now to the backward looking element of a US administrative review, which is similar to a refund proceeding in prospective duty systems. As we have already observed, the 
SCM Agreement contains no provisions that are directly equivalent to Article 9.3 of the 
Anti-Dumping Agreement, which deals with final assessment proceedings. There is merely the rule in Article 19.3, first sentence of the SCM Agreement that duties are to be levied in an appropriate 
amount, taking into account the renouncing of any subsidies. Nevertheless, in our opinion, 
Members are entitled to operate final assessment proceedings of the type used by the United States. The question is whether or not, in such final assessment proceedings, they are 
entitled to include new subsidies. 
 17. In our view, it may be that there is no ab solute answer to this question. Rather, it may 
depend on the facts of particular cases. Following the example that we have already set out, if the 
original subsidy and the more recent subsidy are incidences of the application of a countervailed 
subsidy programme, then it seems self-evident that final assessment of the more recent subsidy can also be retrospective.  
 
18. On the other hand, if the new subsidy is very  different, and actually existed prior to the 
original proceedings, and the measure in question  was a matter of public knowledge both for the 
complaining interested parties and the investigating authorities, but was not included in the 
original proceedings, then it must be doubtful that  it would be possible to bring it directly into a 
final assessment proceeding with respect to the past , without that giving rise to some form of 
retroactivity and/or issues of due process. This question may require a case-by-case assessment 
because, as we have already indicated, there may be various reasons, some legitimate, some not, 
why a particular subsidy was not included in the original investigation. Thus, the European Union would suggest that the Panel may need to scrutinise carefully the facts of each case and measure 
in order to ascertain whether or not, in this re spect, the terms of the SCM Agreement have been 
complied with.  
 WT/DS436/R/Add.1 
 
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  ANNEX D-9 
EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN  
SUBMISSION OF THE KINGDOM OF SAUDI ARABIA 
I. INTRODUCTION 
1. The Kingdom of Saudi Arabia's participation in this dispute addresses systemic issues 
relating to the interpretation of the Agreement on Subsidies and Countervailing Measures (the SCM Agreement). These issues relate to public body , benefit, extraction rights and specificity. The 
Kingdom takes no position on the merits of the claims that are based on the particular facts of this 
case.  II. A "PUBLIC BODY" MUST POSSESS, EXERCISE OR BE VESTED WITH GOVERNMENTAL 
AUTHORITY  
2. For the purposes of finding the existence of a financial contribution under Article 1.1(a)(l) of 
the SCM Agreement, a public body must possess , exercise or be vested with "governmental 
authority", which is the power of an entity to  command or compel a private body. The unique 
"defining elements" of the term "government" – "the effective power to regulate, control, or supervise individuals, or otherwise restrain their co nduct, through the exercise of lawful authority" 
– also define the term "public body". Possessing or exercising governmental authority is distinct 
from being owned or controlled by the government, and the two concepts are not interchangeable. A government-owned or controlled entity might be  a public body, but only where the government 
has delegated to the entity the ability to "control or govern the actions of a private body". The 
government's delegation of authority, not its ownership or control, thus dictates the entity's status 
as a public body.  
3. An investigating authority must ensure that any determination that an entity is a public body 
is supported by positive evidence establishing th at the relevant entity possesses, exercises or is 
vested with governmental authorit y (properly defined to mean the ability to compel – or give such 
power to – a private body). No single fact or combination thereof can automatically fulfill the 
positive evidence standard that must support a finding of governmental authority. This is especially so with respect to government ownership or control, which relates only indirectly to governmental authority. A public body standard that relies systematically on evidence of 
government ownership or control as a proxy for governmental authority undermines both the 
Appellate Body's interpretation of Article 1.1( a)(1) of the SCM Agreement and the evidentiary 
provisions of the Agreement. 
 
4. Investigating authorities have an affirmative obligation under the SCM Agreement to examine objectively all evidence related to the question of public body and to base their 
determinations on positive evidence establishing – not merely implying – that an entity possesses, 
exercises or is vested with governmental author ity. They may not use evidence of government 
ownership or control to avoid this obligation.  
III. THE USE OF ALTERNATIVE BENCHMARKS FOR THE DETERMINATIO N OF BENEFIT IS 
PERMISSIBLE ONLY IN EXCEPTIONAL CIRCUMSTANCES, AND IS SUBJECT TO STRICT DISCIPLINES 
5. In determining whether the government pr ovision of a good confers a benefit, an 
investigating authority may use a benchmark other than private, in-country prices in "very limited" circumstances. Article 14(d) of the SCM Agreement establishes domestic market prices as the 
principal standard for determining whether and to what extent a benefit is conferred by the 
provision of a good. Price is foremost among the "prevailing market conditions" enumerated in Article 14(d) and it should be the first reference point used by an investigating authority to determine benefit. 
 
6. In order to reject private, in-country benchmarks when determining whether a government-provided good confers a benefit, an investigating authority must establish that domestic prices of WT/DS436/R/Add.1 
 
- D-25 - 
 
  that good are "distorted". The government's predominant role in the domestic market might 
support an investigating authority's finding that private prices are distorted, but it may not serve as a per se  proxy for price distortion. 
 
7. Only the government (or an entity proper ly found to be a public body) providing the 
financial contribution may be considered a "predominant supplier" whose sales of a good distort domestic prices such that an alternative benchmark may be used to determine whether the 
government's provision of that same good confers a benefit. "Predominance" in a market refers to 
more than merely having a large market share – it  is the ability of the government to exercise 
"influence on prices". Furthermore, having a "sig nificant" market share is distinct from being the 
"predominant" supplier in that market, the former carrying far less evidentiary weight in a 
determination of price distortion. These principles  also preclude an investigating authority from 
disregarding as a benchmark the prices offered domestically by a state-owned enterprise, unless the authority has properly determined th at the enterprise is a public body. 
 
8. Although external benchmarks may be used in very limited situations, they should be 
avoided because they are inherently incapable of reflecting prevailing in-country market 
conditions. Article 14(d) requires an investigating authority to ensure that any benchmark "relates 
or refers to, or is connected with, prevailing market conditions in the country of provision, and must reflect price, quality, availability, market ability, transportation and other conditions of 
purchase or sale, as required by Article 14(d)". The Appellate Body has further emphasized that 
this obligation requires the investigating authority to adjust any alternative benchmark to reflect 
prevailing market conditions. The Kingdom is of th e view that external benchmarks should not be 
permitted unless an exhaustive application of these standards demonstrates otherwise. Moreover, 
the use of external benchmarks also should be avoided because they negate comparative 
advantages – a result precluded by both the Ap pellate Body and the SCM Agreement's negotiating 
history. 
 
9. Where an investigating authority has established price distortion, it should use in-country, cost-based benchmarks instead of external benchmarks. Such benchmarks can be tailored to the unique circumstances of the country, industry and enterprises concerned, and they can reflect 
prevailing market conditions with little or no adjustment. Domestic cost-based benchmarks also 
are more likely to be consistent with the rule that a benefit analysis may not nullify a country's comparative advantage. Such benchmarks are therefore preferable to any other form of 
alternative benchmark. 
 IV. THE GRANTING OF THE RIGHT TO EXTRACT A NATURAL RESOURCE CANNOT 
CONSTITUTE A SUBSIDY 
10. A government's granting of extraction rights is not covered by the definition of a "financial 
contribution" in Article 1.1(a)(1) of the SCM Ag reement. In particular, extraction rights are 
intangible assets that do not constitute "goods" under Article 1.1(a)(1)(iii). Panel and Appellate 
Body rulings support the distinction between goods and intangible extraction rights. The Appellate 
Body has stated that government acts do not constitute the provision of a good unless (i) the government has control over the availability of the good in question and (ii) there is a reasonably 
proximate relationship between the government acti on and the enjoyment of the tangible goods by 
the recipient. Neither of these requirements is met where the government grants intangible extraction rights. This jurisprudence provides compelling support for the conclusion that the 
granting of a "potentiality" in the form of extraction rights cannot constitute the provision of a 
good under Article 1.1(a)(1)(iii) of the SCM Agreement.  11. Because the granting of extraction rights do es not constitute the provision of a good or 
service under Article 1.1(a)(1)(iii), an investigating authority may not use "adequacy of 
remuneration" under Article 14(d) to determine whether the granting of such rights confers a benefit. Article 14(d) applies only to the "the provision of goods  or services  or purchase of goods  
by a government", and states that "adequacy of remuneration shall be determined in relation to 
prevailing market conditions for the good or service in question ". (emphasis added) Article 1.1(b) 
of the SCM Agreement reinforces this conclusion: as an extraction right cannot constitute a 
financial contribution, no benefit can "thereby" be conferred. 
 12. The granting of a right to exploit a nation's in situ  natural resources is a sovereign function 
that the Panel should distinguish from the government's actual provision of those resources. A WT/DS436/R/Add.1 
 
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  determination that the granting of intangible ex traction rights alone constitutes a "financial 
contribution" would infringe upon the public international law principle that each State enjoys permanent sovereignty over its natural resources (PSNR). Many developing countries work with 
non-governmental entities to maximize the efficient, sustainable exploitation of their natural 
resources. Seen in this light, the granting of extraction rights, by itself, is not a financial 
contribution by a government but instead a nece ssary act by which the government delegates to 
the rights-holder responsibility for developing so vereign resources. Subjecting Members' resource 
development policies to SCM Agreement disciplines would undermine the certainty of control over 
sovereign development that PSNR is intended to ensure.  V. DETERMINATIONS OF DE FACTO  SPECIFICITY MUST TAKE INTO ACCOUNT THE 
LEVEL OF DIVERSIFICATION OF ECONOMIC ACTIVITIES IN THE EXPORTING 
COUNTRY AND CANNOT BE BASED ON TH E INHERENT CHARACTERISTICS OF A 
GOOD OR SERVICE 
13. When determining de facto  specificity under Article 2.1(c) of the SCM Agreement, 
investigating authorities must take into account the level of diversification of economic activities in the exporting country. The explicit diversificat ion requirement of Article 2.1(c) obligates 
investigating authorities to consider the broader economic context in which a subsidy program 
operates. It is the Kingdom's view that de facto  specificity cannot be applied in the same way to 
less diversified developing countries as it would be applied to a fully developed, diversified economy. Such an approach would penalize less diversified, developing economies for seeking to 
diversify and develop in a WTO-consistent manner. That is exactly what the diversification 
requirement of Article 2.1(c) was designed to prevent. 
 
14. Saudi Arabia further submits that de facto  specificity may not be determined solely on the 
basis of the inherent characteristics of a good or se rvice. First, there is nothing in the text of the 
SCM agreement that permits a finding of specificity on this basis. Second, investigating authorities 
have an affirmative obligation under the SCM Agreement to "clearly substantiate" determinations 
of de facto  specificity on the basis of positive evidence relating to the four factors found in 
Article 2.1(c). Authorities may not avoid this ob ligation by simply referring to the "inherent 
characteristics" of a good. Third, this expansive interpretation could also render the specificity 
determination under Article 2 redundant – the investigating authority need only determine (under 
Article 1) the nature of the "good" which is provided, and that determination would often automatically justify a finding of de facto  specificity. Finally, any decision on whether de facto  
specificity may be based solely on a good's inherent characteristics may not penalize less 
diversified economies in express violation of Article 2.1(c).  
VI. CONCLUSION 
15. The decision to be rendered by the Panel in this case will serve as an important precedent 
with respect to key systemic issues under the SCM Agreement. The Kingdom of Saudi Arabia respectfully urges the Panel to consider the Kingdo m's positions on the interpretive issues set out 
above. 
  WT/DS436/R/Add.1 
 
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  ANNEX D-10 
THIRD PARTY ORAL STATEMENT OF THE KINGDOM OF SAUDI ARABIA 
I. INTRODUCTION 
1. Thank you, Mr. Chairman and Members of th e Panel. The Kingdom of Saudi Arabia would 
like to take this opportunity to affirm all of the positions set out in its Third Party submission. 
Today, the Kingdom will summarize its views on the proper interpretation of the Agreement on 
Subsidies and Countervailing Measures. In particular, the Kingdom will address (i) the proper 
standard for a public body determination; (ii) the use of alternative benchmarks in benefit 
calculations; (iii) why extraction rights cannot constitute a subsidy; and (iv) the proper interpretation and application of the de facto  specificity criterion. 
II. A "PUBLIC BODY" MUST POSSESS, EXERCISE OR BE VESTED WITH GOVERNMENTAL 
AUTHORITY 
2. First, the Appellate Body in US – Anti-Dumping and Countervailing Duties (China) 
established the definitive standard that an investigating authority must apply when determining 
that an entity is a public body for the purp oses of finding a financial contribution under 
Article 1.1(a)(1) of the SCM Agreement. A public body must possess, exercise or be vested with "governmental authority", which is properly defined as the power to command or compel a private 
body. 
3. Under this standard, a finding that an entity is a public body must be supported by positive 
evidence establishing governmental authority. The Kingdom notes that no single fact or combination thereof can automatically fulfill the positive evidence standard that must support a 
finding of governmental authority. This is especially so with respect to government ownership or 
control, which relates only indirectly to governmental authority and was singled out by the Appellate Body as insufficient to establish a public body.  
4. In making a public body determination, investigating authorities have an affirmative 
obligation under the SCM Agreement to examine object ively all evidence related to the question of 
public body and to base their determinations on positive evidence establishing – not merely 
implying – that an entity possesses, exercises or is vested with governmental authority. 
Accordingly, they may not use evidence of go vernment ownership or control to avoid this 
obligation. 
III. ALTERNATIVE BENCHMARKS ARE PE RMISSIBLE ONLY IN EXCEPTIONAL 
CIRCUMSTANCES, SUBJECT TO STRICT DISCIPLINES 
5. Turning now to the use of benchmarks in calculating benefit, the Kingdom notes that 
Article 14(d) of the SCM Agreement establishes domestic market price as the principal standard for 
determining whether and to what extent the government provision of a good confers a benefit. 
Accordingly, private, domestic prices must be the first reference point used to determine benefit, and a benchmark other than such prices may be used only in "very limited" circumstances. 
6. In order to reject private, in-country price benchmarks, an investigating authority must 
establish that domestic prices of the good at issue are distorted. Price distortion might exist where, 
for example, the government is the "predominant" supplier of the good in the domestic market, but such distortion must always be proven with actual evidence. Thus, the government's 
predominant role in the domestic market might support an investigating authority's finding that 
private prices are distorted, but it may not serve as a per se  proxy for price distortion. Moreover, 
any inquiry into price distortion requires an investigating authority to consider all evidence, not 
just the role of the government. 
7. In order to find that the government is the "predominant" supplier of a good, an 
investigating authority must demonstrate that  the government (or a public body) is the WT/DS436/R/Add.1 
 
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  predominant, rather than just a significant, supplier. The SCM Agreement's text and related 
jurisprudence establish that the same standard fo r defining "government" or "public body" under 
Article 1.1(a)(l) of the SCM Agreement must appl y when determining whether the "government" is 
the predominant supplier of a good under Article 14(d) of the SCM Agreement. Article 14(d) 
addresses "provision of goods or services... by a government ", which is a direct reference to the 
type of government financial contribution in Article 1.1(a)(1)(iii) of the SCM Agreement. Thus, only the government (or entities properly determined  to be public bodies) providing the financial 
contribution may be considered a "predominant supplier". State-owned enterprises would not meet 
this standard merely by virtue of their ownership structure. 
8. These principles also preclude an investigating authority from disregarding prices offered by 
state-owned enterprises for the purposes of calculating a benefit unless those enterprises have 
been properly determined to be public bodi es. The Appellate Body has established that 
state-ownership or control is not sufficient to deem an entity a public body, and that the conduct of state-owned enterprises is presumptively not attributable to the state. Thus, a price offered by a 
state-owned enterprise may not be considered a "government price" and deemed unusable as a 
benchmark unless the enterprise has been found to possess, exercise or be vested with governmental authority. 
9. The Kingdom would also like to emphasize that  although external benchmarks may be used 
in "very limited" situations, they should be avoided because they are inherently incapable of reflecting prevailing in-country market conditions. The Kingdom is of the view that external benchmarks should not be permitted unless an exha ustive application of the standard provided in 
Article 14(d) of the SCM Agreement demonstrat es otherwise. Appellate Body jurisprudence 
supports this view. In fact, the Appellate Body has cautioned that "it has to be kept in mind that prices in the market of a WTO Member would be expected to reflect prevailing market conditions in 
that Member; they are unlikely to reflect conditions  prevailing in another Member". More recently, 
the Appellate Body in Canada – Renewable Energy  noted serious difficulties in using an external 
benchmark, including the level and number of adjustments that may be required.  
10. Furthermore, an external benchmark which does not reflect the domestic market 
circumstances of the recipient of an alleged subsidy is an arbitrary measure that could negate the natural comparative advantages of the Member under investigation – a result that the Appellate Body has warned against. The adjustments need ed to make external benchmarks reflect a 
Member's comparative advantage would typically be so subjective as to vitiate the benchmark's 
ultimate reliability. 
11. Thus, the Kingdom is of the view that, where an investigating authority has established price 
distortion, it should use in-country, cost-based benchmarks instead of external benchmarks. 
IV. THE GRANTING OF THE RIGHT TO EXTRACT A NATURAL RESOURCE CANNOT 
CONSTITUTE A SUBSIDY 
12. The Kingdom now turns to the issue of extracti on rights. The Kingdom is of the view that a 
government's granting of extraction rights cannot constitute a subsidy because it is not covered by the definition of a "financial contribution" in Ar ticle 1.1(a)(1) of the SCM Agreement. Only those 
actions listed in Article 1.1(a)(1) may constitute "financial contributions" and thus be subject to 
the SCM Agreement's subsidy disciplines. The granting  of extraction rights, however, does not fall 
within the plain meaning of any of these financial contributions, including the provision of a good.  
13. First, extraction rights are intangible assets that do not constitute "goods" under 
Article 1.1(a)(1)(iii) of the SCM Agreement. Panel and Appellate Body rulings support the 
distinction between goods and intangible extraction rights. Extraction rights are not tangible items because the quantity and value of resources at issue are unknown when the government grants 
the right to extract them. Whether an extraction right will produce any tangible good is 
speculative, and will depend on, among other th ings, the quantities of extractable resources 
actually available and the actions of the rights-holder.  
14. Second, the Appellate Body has stated that go vernment acts do not constitute the provision 
of a good unless (i) the government has control over the availability of the good in question, and 
(ii) there is a reasonably proximate relationship between the government action and the WT/DS436/R/Add.1 
 
- D-29 - 
 
  enjoyment of the tangible goods by the recipient.  Neither of these requirements is met where the 
government grants intangible extraction rights.  
15. The Kingdom also notes that the granting of a right to exploit a nation's natural resources is 
a sovereign function that the Panel should distinguish from the government's actual provision of 
those resources. A determination that the granting of intangible extraction rights alone constitutes 
a "financial contribution" would infringe upon the public international law principle that each state enjoys permanent sovereignty over its natural resources. Such a determination would also 
undermine Members' certainty of control over their own sovereign development. 
V. DETERMINATIONS OF DE FACTO  SPECIFICITY MUST ACCOUNT FOR ECONOMIC 
DIVERSIFICATION AND CANNOT BE BASED ON THE INHERENT CHARACTERISTICS OF A GOOD OR SERVICE 
 
16. Turning now to the last issue of specificity, the Kingdom would like to confirm that Article 2.1(c) of the SCM Agreement expressly re quires investigating authorities to take into 
account the level of diversification of economic activities in the exporting country when 
determining de facto  specificity. This express requirement means that the specificity criterion is 
highly dependent on the unique economic co nditions of the Member in question. The 
SCM Agreement prohibits authorities from applying the de facto  specificity requirement in a 
manner that disadvantages economies simply becaus e they are less diversified. To the contrary, 
the diversification requirement obligates investigating authorities to consider the broader economic context in which a subsidy program operates. It is the Kingdom's view that de facto  specificity 
cannot be applied in the same way to less diversified developing countries as it would be applied to 
a fully developed, diversified economy. Such an approach would penalize less diversified, developing economies for seeking to diversify and develop in a WTO-consistent manner.  
17. The Kingdom also submits that de facto  specificity may not be determined solely on the 
basis of the inherent characteristics of a good or  service. First, nothing in the SCM Agreement's 
text permits a finding of specificity on this basis. Second, investigating authorities must "clearly 
substantiate" determinations of de facto  specificity on the basis of positive evidence and may not 
avoid this obligation by simply referring to the "inherent characteristics" of a good. Third, such an expansive interpretation of de facto specificity could render the specificity determination redundant 
because an investigating authority need only de termine under Article 1 of the SCM Agreement the 
nature of the "good" which is provided, and that determination would often automatically justify a 
finding of de facto  specificity. 
VI. CONCLUSION 
 
18. Mr. Chairman, this concludes the Kingdom's statement. I thank you for your attention. WT/DS436/R/Add.1 
 
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  ANNEX D-11 
THIRD PARTY ORAL STATEMENT OF TURKEY 
I. INTRODUCTION  
Mr. Chairman, Members of the Panel,  
1. Turkey would like to thank the Panel for the opportunity to present its views in this 
proceeding on the dispute between the United States of America (hereinafter referred to as United States) and Republic of India (hereinafter referred to as India). 
2. The Republic of Turkey (hereinafter referred to  as "Turkey") would like submit its third party 
opinion due its interest on the correct and coherent interpretation of the Agreement on Subsidies and Countervailing Measures (hereinafter referred to as the "SCM Agreement"). 
3. In this statement Turkey will focus on the issue whether "facts available" methodology can 
be used to draw "adverse inferences" in (herei nafter referred to as "adverse facts available") 
countervailing duty investigations.  
II. THE USE OF "FACTS AVAILABLE" FOR ADVERSE INFERENCES IN COUNTERVAILING 
DUTY INVESTIGATIONS 
Mr. Chairman,  4. Before moving to the question whether " adverse facts available"  is justified under 
SCM Agreement, Turkey would like to briefly discuss whether such a method has a legal presence 
in the structure of the WTO Law at all.  
5. Turkey underscores that Annex II of the AD Agreement serves as a determining guideline. 
The last sentence of paragraph 7 of Annex II provides legal flexibility to the investigating authority 
to use information that is less favorable  to the interest of the party if it denies cooperating through 
"withholding"  relevant information. Para graph 7 reads as follows:  
It is clear, however, that if an interested party does not cooperate  and thus relevant 
information is being withheld  from the authorities, this situation could lead to a result 
which is less favourable  to the party than if the party did cooperate. (emphasis added)  
6. The textual reading of the sentence points ou t that the investigating authority has to answer 
a threshold question concerning whether the interested party refused to cooperate through 
"withholding" relevant information.  
7. " Withhold  "has a meaning of " to refuse give or grant something "
1 which, as matter of fact, 
necessitates an adverse way of acting. In light of a conceptual interpretation it is noteworthy to 
discuss whether the word "withholding" is different from "refusal of granting access to" or "refusal 
of providing" relevant information as underlined in  Article 6.8 of the AD Agreement. Turkey opines 
that these concepts are not different from each other. Quite the contrary, it would be accurate to 
point out that the two scenarios shown in Article 6.8 of the AD Agreement can also be considered 
as acts of " withholding " since this word itself encompasses a wide variety of possibilities. In that 
context, the refusal of giving or granting something can be considered to be corresponding the 
situations depicted in Article 6.8 of AD Agreement.  
8. Considering the impediment of the investigation, however, Turkey supports a more cautious 
stance. In this respect, the investigating authority should consider the facts gathered during the investigation and decide whether the position of the interested party amounts to "withholding" in 
terms of paragraph 7 of Annex II.  
                                               
1 Chambers English Dictionary. WT/DS436/R/Add.1 
 
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  9. Pursuant to paragraph 7 of Annex II, the investigating authority has the discretion to draw 
negative inferences through "facts available" methodology in the event that the interested party is found to be non-cooperative and withholds relevant information. This discretion, however, is not unlimited. In terms of textual interpretation, Turk ey understands that the investigating authority 
may resort to "secondary" information" less favorable to the non-cooperating interested party 
compared to the information that the authority would have possessed if the interested party had cooperated in full manner. In that regard, the last sentence of paragraph 7 envisages a compare 
and contrast exercise. The investigating authority is obliged to choose among different sets of 
information the one that would be considerably less favorable to the interest of the non-cooperative party as defined in the last sentence of paragraph 7 of Annex II.  
10. Such an examination, however, is complicated. The authority has to decide on the right 
group of information by depending on a hypothetic al reference point on what the non-cooperative 
interested party would have submitted if it had cooperated in full manner. As an answer to this question, paragraph 7 of Annex II stipulates that the use of secondary sources should be 
undertaken with special circumspection which brings the obligation to act as an unbiased and 
objective investigating authority.  
11. In light of our explanation Turkey underlines that " adverse facts available " is justified under 
AD Agreement.  
Mr. Chairman,  12. Addressing the primary question whether "adverse facts available" is applicable under the 
SCM Agreement, Turkey would like to highlight th at the answer is closely related to the issue 
whether Annex II of AD Agreement is applicable to Article 12.7 of the SCM Agreement.  
13. Turkey supports the approach that there is textual and conceptual parallelism between 
Article 6.8 of the AD Agreement and Article 12. 7 of the SCM Agreement. Both articles serve 
guidance on how to react if the interested party in question refuses to submit necessary 
information requested by the authority or significantly impedes the investigation through various means.
2 The primary difference between two articles is the inclusion of " interested member " to the 
text of Article 12.7 of the SCM Agreement, which is understandable considering that countervailing 
duty investigations primarily concentrate on the structure and mechanics of the alleged subsidy program. In terms of " interested parties " ,  h o w e v e r ,  b o t h  a r t i c l e s  h a v e  t h e  s a m e  a p p l i c a t i o n  
pattern.  
14. Turkey considers that Annex II is an integr al part of the AD Agreement constituting the 
"context" of the Article 6.8 in terms of Articl e 31 of Vienna Convention on Law of Treaties 
(hereinafter referred to as "VCLT"). This interp retation was underscored in a number of panel and 
Appellate Body Reports in which Annex II was considered to contain certain substantive 
parameters for the application of the individual  elements of Article 6.8 of the AD Agreement
3 and 
accepted to be incorporated to the Article 6.8 by reference.4 
15. Considering the significance and position and legal weight of the rules stipulated in Annex II 
of the AD Agreement, it would be legally unreasonable to hold that the investigating authority is bound with clear-cut and carefully detailed rules and procedures in an dumping investigation while the same authority have a "free-ride" in countervailing duty investigation for the simple reason 
that there is no legal discipline resembling the rules in Annex II. In fact, this issue was addressed 
in Appellate Body Report of Mexico   Anti-Dumping Measure on Rice  in which the Appellate Body 
held the view that it would be anomaly to co nclude that Article 12.7 of the SCM Agreement 
permitted to use of "facts available" in countervailing duty investigations in a manner markedly different from that in an ti-dumping investigations.
5 
16. In light of our explanations, Annex II of AD Agreement should be considered as an integral 
part of the Article 12.7 of the SCM Agreement, in  regard to applying "facts available" based 
conclusions in countervailing duty investigations.  
                                               
2 Appellate Body Report, Mexico  Anti-Dumping Measure on Rice , para. 291. 
3 Egypt  Anti Dumping Measures on Rebar  (Panel), para. 7.152. 
4 US  Hot Rolled Steel  (AB), para. 75. 
5 Appellate Body Report, Mexico  Anti-Dumping Measure on Rice , para. 295. WT/DS436/R/Add.1 
 
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  17. Accepting Annex II as an integral part of the Article 12.7 of the SCM Agreement, Turkey 
considers that the use of "adverse facts available" is justified in countervailing duty investigations. As a matter of law, however, the investigating authority is obliged to observe the same legal discipline envisaged in the last sentence of paragraph 7 of Annex II before drawing negative 
inferences through the use of facts available.  
18. Mr. Chairman, distinguished Members of the Pa nel, with these comments, Turkey would like 
to contribute to the legal debate of the parties in  this case, and express again its appreciation for 
this opportunity to share its points of view on this relevant debate, regarding the interpretation of 
SCM Agreement. We thank you for your kind attention and remain at your disposal for any question you may have. 
 
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