WT/DS437/RW  
 
21 March 2018 
(18-1691) Page: 1/119 
  Original: English  
 
  
UNITED STATES – COUNTERVAILING DUTY MEASURES ON CERTAIN 
PRODUCTS FROM CHINA  
RECOURSE TO ARTICLE 21.5 OF THE DSU BY C HINA 
FINAL REPORT OF THE PANEL  
 
 WT/DS437/RW  
 
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  TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  14 
1.1   Complaint by China ................................ ................................ ................................ .....14 
1.2   Panel establishment and composition  ................................ ................................ ............ 14 
1.3   Panel proceedings  ................................ ................................ ................................ .......14 
2   THE MEASURES AT ISSU E ................................ ................................ ..........................  15 
3   PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  ................................  15 
4   ARGUMENTS OF THE PAR TIES  ................................ ................................ ...................  17 
5   ARGUMENTS OF THE THI RD PARTIES  ................................ ................................ ........  18 
6   INTERIM REVIEW  ................................ ................................ ................................ ...... 18 
7   FINDINGS  ................................ ................................ ................................ .................  18 
7.1   General principles regarding treaty interpretation, standard of review, and burden of 
proof ................................ ................................ ................................ ................................ 18 
7.1.1    Treaty interpretation  ................................ ................................ ................................ 18 
7.1.2    Standard of review ................................ ................................ ................................ ...18 
7.1.3    Burden of proof  ................................ ................................ ................................ .......18 
7.2   China's claim under Article 1.1(a)(1) of the SCM Agreement in relation to the 
USDOC's public body determinations  ................................ ................................ .................... 19 
7.2.1    China's "as applied" claim under Article 1.1(a)(1) of the SCM Agreement  ........................ 19 
7.2.1.1    Main arguments of the parties  ................................ ................................ ................ 19 
7.2.1.2   Main arguments of the third parties  ................................ ................................ ......... 20 
7.2.1.3    Evaluation by the Panel  ................................ ................................ ......................... 21 
7.2.1.3.1    Introduction  ................................ ................................ ................................ ......21 
7.2.1.3.2    Whether the USDOC applied an erroneous legal standard in its public body 
determinations  ................................ ................................ ................................ .................. 22 
7.2.1.3.3    Whether the USDOC's public body determinations are inconsistent with 
Article  1.1(a)(1) of the SCM Agreement  ................................ ................................ ................ 26 
7.2.1.3.3.1    The USDOC's Section 129 determinations in relation to public bodies  ..................... 26 
7.2.1.3.3.2    Assessment of the USDOC's Section 129 public body determinations  ..................... 36 
7.2.1.3.3.3    Whether the USDOC failed to consider relevant evidence on the record  .................. 42 
7.2.1.3.3.4    Conclusion on China's "as applied" claim under  Article 1.1(a)(1) of the 
SCM Agreement  ................................ ................................ ................................ ................. 45 
7.2.2    China's "as such" claim under Article 1.1(a)(1) of the SCM Agreement in relati on 
to the Public Bodies Memorandum  ................................ ................................ ........................ 46 
7.2.2.1    Main arguments of the parties  ................................ ................................ ................ 46 
7.2.2.2    Whether the Public Bodies Memorandum is a challengeable measure within the 
scope of the Panel's jurisdiction  ................................ ................................ ........................... 46 
7.2.2.3    Whether the Public Bodies Memorandum is inconsistent "as such" with 
Article  1.1(a)(1) of the SCM Agreement  ................................ ................................ ................ 48 
7.2.2.3.1    Introduction  ................................ ................................ ................................ ......48 
7.2.2.3.2    Whether the Public Bodies Memorandum is a rule or norm of general or 
prospective application  ................................ ................................ ................................ .......49 WT/DS437/RW  
 
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  7.2.2.3.3    Whether the Public Bodies Memorandum restricts in a material way the 
USDOC's discretion to make a determination consistent with Article 1.1(a)(1) of the 
SCM Agreement  ................................ ................................ ................................ ................. 51 
7.2.2.3.4    Conclusion on China's "as such" claim under Article 1.1(a)(1) of the 
SCM Agreement  ................................ ................................ ................................ ................. 53 
7.3   China's claim under Articles 1.1(b) and 14(d) of the SCM Agreement in relation to 
the USDOC's benefit determinations  ................................ ................................ ..................... 53 
7.3.1    Main a rguments of the parties  ................................ ................................ ................... 53 
7.3.2    Main arguments of the third parties  ................................ ................................ ........... 54 
7.3.3    Evaluation by the Panel  ................................ ................................ ............................ 55 
7.3.3.1    Introduction  ................................ ................................ ................................ ......... 55 
7.3.3. 2   Whether the USDOC applied an erroneous legal standard in its benefit 
determinations  ................................ ................................ ................................ .................. 57 
7.3.3.3    Whether the evidence on the record supports the determination that in -country 
prices in China could not be used to determine the adequacy of remuneration for the 
goods at issue  ................................ ................................ ................................ ................... 60 
7.3.3.3.1    The USDOC's factual findings in relation to in -country prices for the inputs at 
issue ................................ ................................ ................................ ................................ 60 
7.3.3.3.1.1    The Benchmark Questionnaires  ................................ ................................ ......... 61 
7.3.3.3.1.2    The memoranda  ................................ ................................ .............................. 62 
7.3.3.3.2    Whether the USDOC's factual findings support the conclusion that in -country 
prices in China are not "market -determined"  ................................ ................................ ......... 65 
7.3.3.3.3    Whether the USDOC disregarded evidence regarding prices for the inputs at 
issue ................................ ................................ ................................ ................................ 68 
7.3.3.3.3.1    The Pressure Pipe, Line Pipe, and OCTG Section 129 proceedings  .......................... 69 
7.3.3.3.3.2    The Solar Panels Section 129 proceeding  ................................ ............................ 71 
7.3.3.3.4    Conclusion on China's claim under Articles 1.1(b) and 14(d) of the 
SCM Agreement  ................................ ................................ ................................ ................. 71 
7.4   China's claim under Article 32.1 of the SCM Agreement  ................................ ................... 72 
7.4.1    Main arguments of the parties  ................................ ................................ ................... 72 
7.4.2    Evaluation by the Panel  ................................ ................................ ............................ 72 
7.4.2.1    The measures at issue  ................................ ................................ ........................... 72 
7.4.2.2    The legal provision at issue  ................................ ................................ .................... 73 
7.4.2.3    The relevant characteristics of the benchmark determinations  ................................ ....74 
7.4.2.4    Conclusion on China's claim under Article 32.1 of the SCM Agreement  ......................... 75 
7.5   China's clai m under Article 2.1(c) of the SCM Agreement in relation to de facto  
specificity  ................................ ................................ ................................ .......................... 76 
7.5.1    Main arguments of the parties  ................................ ................................ ................... 76 
7.5.2    Main arguments of the third parties  ................................ ................................ ........... 77 
7.5.3    Evaluation by the Panel  ................................ ................................ ............................ 77 
7.5.3.1    Introduction  ................................ ................................ ................................ ......... 77 
7.5.3. 2   Whether the USDOC applied an erroneous legal standard under the last 
sentence of Article 2.1(c) of the SCM Agreement  ................................ ................................ ...78 
7.5.3. 3   Whether the USDOC's determinations of de facto  specificity are inconsistent 
with Article 2.1(c) of the SCM Agreement  ................................ ................................ .............. 80 WT/DS437/RW  
 
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  7.5.3.3.1    The USDOC's determinations of de facto  input specificity  ................................ ........ 80 
7.5.3.3.2    Whether the USDOC properly established the exi stence of a subsidy 
programme  ................................ ................................ ................................ ....................... 82 
7.5.3.4    Conclusion on China's claim under Article 2.1(c) of the SCM Agreement ....................... 85 
7.6   China's claim under Article 2.2 of the SCM Agreement in relation to regional 
specificity  ................................ ................................ ................................ .......................... 85 
7.6.1    Main arguments of the parties  ................................ ................................ ................... 85 
7.6.2    Main arguments of the third parties  ................................ ................................ ........... 85 
7.6.3    Evaluation by the Panel  ................................ ................................ ............................ 86 
7.6.3.1    Whether the USDOC applied an incorrect legal standard in its regional specificity 
determinations  ................................ ................................ ................................ .................. 86 
7.6.3.2    Whether the USDOC erred in its evaluation  ................................ .............................. 87 
7.6.3.3    Conclusion on China's claim under Article 2.2 of the SCM Agreement  .......................... 89 
7.7   China's claims concerning the final determination in the original Solar Panels 
investigation  ................................ ................................ ................................ ..................... 89 
7.8   China's claims in relation to subsequent administrative and sunset reviews  ....................... 90 
7.8.1    Whether the subseq uent administrative and sunset review determinations 
challenged by China are within the scope of the Panel's jurisdiction  ................................ .......... 90 
7.8.1.1    Introduction  ................................ ................................ ................................ ......... 90 
7.8.1.2    Main arguments of the parties  ................................ ................................ ................ 91 
7.8.1.3    Evaluation by the Panel  ................................ ................................ ......................... 92 
7.8.2    Whether the subseq uent administrative and sunset review determinations are 
inconsistent with the SCM Agreement  ................................ ................................ ................... 95 
7.8.2.1    Administrative reviews in the Kitchen Shelving proceeding  ................................ ......... 96 
7.8.2.1.1    Whether the USDOC applied an improper legal standard in its public body 
determin ations  ................................ ................................ ................................ .................. 96 
7.8.2.1.2    Whether the USDOC failed to take account of the diversification of economic 
activities and of the length of time the subsidy programme has been in operation  ...................... 97 
7.8.2.1.3    Conclusion on China's claims concerning the Kitchen Shelving admin istrative 
reviews  ................................ ................................ ................................ ............................. 98 
7.8.2.2    Administrative reviews in the OCTG proceeding  ................................ ........................ 98 
7.8.2.2.1    Whether the USDOC applied an improper legal standard in its public body 
determinations  ................................ ................................ ................................ .................. 98 
7.8.2.2.2    Whether the USDOC improperly rejected in -country prices as benchmarks  ..............  100 
7.8.2.2.3    Whether the USDOC failed to take account of the diversification of economic 
activities and of the length of time the subsidy programme has been in operation  ....................  100 
7.8.2.2.4    Conclusion on China's claims concerning the OCTG administrative reviews  ..............  101 
7.8.2.3    Administrative reviews in the Aluminum Extrusions proceeding  ................................ . 101 
7.8.2.3.1    Whether the USDOC applied an improper legal standard in its public body 
determinations  ................................ ................................ ................................ ................  101 
7.8.2.3.2    Whether the USDOC failed to take account of the diversification of economic 
activities and of the length of time the programme has been in operation  ...............................  102 
7.8.2.3.3    Conclusion on China's claims concerning the Aluminum Extrusions 
administrative reviews  ................................ ................................ ................................ ...... 103 
7.8.2.4    Administrative reviews in the Solar Panels proceeding  ................................ .............  103 WT/DS437/RW  
 
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  7.8.2.4.1    Whether the USDOC applied an improper legal standard in its public body 
determinations  ................................ ................................ ................................ ................  103 
7.8.2.4.2    Whether the USDOC improperly rejected in -country prices as benchmarks  ..............  103 
7.8.2.4.3    Whether the USDOC failed to take account of the diversification of economic 
activities and of the length of time the subsidy programme has been in operation  ....................  104 
7.8.2.4.4    Conclusion on China's claims concerning the Solar Panels administrative 
reviews  ................................ ................................ ................................ ...........................  104 
7.8.2.5    China's claims concerning administrative reviews in the Magnesia Bricks 
proceeding  ................................ ................................ ................................ ......................  105 
7.8.2.5.1    China's claim under Article 11.3 of the SCM Agreement  ................................ ........  105 
7.8.2.5.2    China's claim under Article 12.7 of the SCM Agreement  ................................ ........  106 
7.8.2.5.3    Conclusion on China's claim under Articles 11.3 and 12.7 of the 
SCM Agreement in the Magnesia Bricks proceeding  ................................ ..............................  107 
7.8.2.6    China's claims under Article 21.3 of the SCM agreement  ................................ ..........  107 
7.8.2.6.1    The Thermal Paper sunset review  ................................ ................................ ....... 108 
7.8.2.6.2    The Pressure Pipe sunset review  ................................ ................................ ........  109 
7.8.2.6.3    The Line Pipe sunset review  ................................ ................................ ...............  110 
7.8.2.6.4    The Kitchen Shelving sunset review  ................................ ................................ .... 111 
7.8.2.6.5    The OCTG sunset review  ................................ ................................ ...................  111 
7.8.2.6.6    The Wire Strand sunset review  ................................ ................................ ..........  112 
7.8.2.6.7    The Magnesia Bricks sunset review  ................................ ................................ ..... 113 
7.8.2.6.8    The Seamless Pipe sunset review  ................................ ................................ ....... 113 
7.8.2.6.9    The Print Graphics sunset review  ................................ ................................ ....... 113 
7.8.2.6.10    The Aluminum Extrusions sunset review  ................................ ............................  114 
7.8.2.6.11    Conclusion on China's claim in relation to sunset reviews  ................................ .... 115 
7.9   China's claims regarding the ongoing conduct of imposing, assessing, and collecting 
countervailing duties and cash deposits under the countervailing duty orders at issue  ..............  115 
7.9.1    Main arguments of the parties  ................................ ................................ .................  115 
7.9.2    Main arguments of the third parties  ................................ ................................ .........  116 
7.9.3    Evaluation by the Panel  ................................ ................................ ..........................  116 
8   CONCLUSIONS AND RECO MMENDATION  ................................ ................................ . 117  
 
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  LIST OF ANNEXES  
ANNEX A  
PANEL DOCUMENTS  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  A-2 
Annex A -2 Interim Review  A-6 
ANNEX B  
ARGUMENTS OF CHINA  
Contents  Page  
Annex  B-1 Integrated Executive Summary of China  B-2 
ANNEX C  
ARGUMENTS OF THE UNI TED STATES OF AMERIC A 
Contents  Page  
Annex  C-1 Integrated Executive Summary of the United States of America  C-2 
ANNEX D  
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex  D-1 Integrated Executive Summary of Australia  D-2 
Annex  D-2 Integrated Executive Summary of Canada  D-5 
Annex  D-3 Integrated Executive Summary of the European  Union  D-9 
Annex  D-4 Integrated Executive Summary of Japan  D-12 
  
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  CASES CITED IN THIS REPORT  
Short title  Full case title and citation  
Argentina – Import Measures  Appellate Body Reports, Argentina – Measures Affecting the Importation of 
Goods , WT/DS438/AB/R  / WT/DS444/AB/R  / WT/DS445/AB/R , adopted 
26 January 2015  
Australia – Salmon 
(Article  21.5 – Canada)  Panel Report, Australia – Measures Affecting Importation of Salmon – 
Recourse to Article 21.5 of the DSU by Canada , WT/DS18/RW , adopted 
20 March 2000, DSR 2000:IV, p. 2031  
Canada – Aircraft  Appellate Body Report, Canada – Measures Affecting the Export of Civilian 
Aircraft , WT/DS70/AB/R , adopted 20 August 1999, DSR 1999:III, p. 1377  
Canada – Renewable Energy / 
Canada – Feed-in Tariff 
Program  Appellate Body Reports, Canada – Certain Measures Affecting the Renewable 
Energy Generation Sector / Canada – Measures Relating to the Feed -in Tariff 
Program , WT/DS412/AB/R  / WT/DS426/AB/R , adopted 24 May 2013, DSR 
2013:I, p. 7  
Canada – Renewable Energy / 
Canada – Feed-in Tariff 
Program  Panel Reports, Canada – Certain Measures Affecting the Renewable Ene rgy 
Generation Sector / Canada – Measures Relating to the Feed -in Tariff 
Program , WT/DS412/R  and Add.1 / WT/DS426/R  and Add.1, adopted 
24 May 2013, as modified by Appellate Body Reports WT/DS412/AB/R / 
WT/DS426/AB/R, DSR 2013:I, p. 237  
Chile – Price Band System  Appellate Body Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/AB/R , adopted 
23 October 2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)  
China – Auto Parts  Appellate Body Reports, China – Measures Affecting Imports of Automobile 
Parts, WT/DS339/AB/R  / WT/DS340/AB/R  / WT/DS342/AB/R , adopted 
12 January 2009, DSR 2009:I, p. 3  
EC – Chicken Cuts  Appellate Body Report, European  Communities – Customs Classification  of 
Frozen Boneless Chicken Cuts , WT/DS269/AB/R , WT/DS286/AB/R , adopted 
27 September 2005, and Corr.1, DSR 2005:XIX, p.  9157 
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R , WT/DS48/AB/R , adopted  13 February 1998, 
DSR 1998:I, p. 135  
EC – IT Products  Panel Reports, European Communities and its member States – Tariff 
Treatment of Certain Information Technology Products , WT/DS375/R  / 
WT/DS376/R  / WT/DS377/R , adopted 21 September 2010, DSR 2010:III, 
p. 933 
EC and certain member States 
– Large Civil Aircraft  Appellate Body Report, European Communities and Certain Member States – 
Measures Affecting Trade in Large Civil Aircraft , WT/DS316/AB/R , adopted 
1 June 2011, DSR 2011:I, p. 7  
EC and certain membe r States 
– Large Civil Aircraft  Panel Report, European Communities and Certain Member States – Measures 
Affecting Trade in Large Civil Aircraft , WT/DS316/R , adopted 1 June 2011, as 
modified by Appellate Body Report, WT/DS316/AB/R, DSR 2011:II, p. 685  
EU – Biodiesel (Argentina)  Appellate Body Report, European Union – Anti-Dumping Measures on 
Biodiesel from Argentina , WT/DS473/AB/R  and Add.1, adopted 
26 October  2016 
EU – Fatty Alcohols (Indonesia)  Appellate Body Report, European Union – Anti-Dumping Measures on 
Imports of Certain Fatty Alcohols from Indonesia , WT/DS442/AB/R  and 
Add.1, adopted 29 September 2017  
Japan – Agricultural Products II  Appellate Body Report, Japan – Measures Affecting Agricultural Products , 
WT/DS76/AB/R , adopted 19 March 1999,  DSR 1999:I, p. 277  
Japan – Alcoholic Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R , WT/DS10/AB/R , WT/DS11/AB/R , adopted 1 November 1996, 
DSR 1996:I, p. 97  
Japan – DRAMs (Korea)  Appellate Body Report, Japan – Countervailing Duties on Dynamic Random 
Access Memories from Korea , WT/DS336/AB/R  and Corr.1, adopted 17 
December 2007, DSR 2007:VII, p. 2703  
Japan – DRAMs (Korea)  Panel Report, Japan – Countervailing Duties on Dynamic Random Access 
Memories from Korea , WT/DS336/R , adopted 17 December 2007, as 
modified by Appellate Body Report WT/DS336/AB/R, DSR 2007:VII, p. 2805  WT/DS437/RW  
 
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  Short title  Full case title and citation  
Mexico – Anti-Dumping 
Measures on Rice  Appellate Body Report, Mexico – Definitive Anti -Dumping Measures on Beef 
and Rice, Complaint with Respect  to Rice , WT/DS295/AB/R , adopted 20 
December 2005, DSR 2005:XXII, p. 10853  
US – 1916 Act  Appellate Body Report, United States – Anti-Dumping Act of 1916 , 
WT/DS136/AB/R , WT/DS162/AB/R , adopted 26 September 2000, 
DSR 2000:X, p. 4793  
US – Anti-Dumping and 
Countervailing Duties (China)  Appellate Body Report, United States – Definitive Anti -Dumping and 
Countervailing Duties on Certain Products from China , WT/DS379/AB/R , 
adopted 25 March 2011, DSR 2011:V, p. 2869  
US – Anti-Dumping and 
Countervailing Duties (China)  Panel Report, United States – Definitive Anti -Dumping and Countervailing 
Duties on Certain Products from China , WT/DS379/R , adopted 
25 March  2011, as modified by Appellate Body Report WT/DS379/AB/R, 
DSR 2011:VI, p. 3143  
US – Anti-Dumping 
Methodolo gies (China)  Appellate Body Report, United States – Certain Methodologies and Their 
Application to Anti -Dumping Proceedings Involving China , WT/DS471/AB/R  
and Add.1, adopted 22 May 2017  
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion -Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R  and Corr.1, adopted 19 December 2002, DSR 2002:IX, 
p. 3779 
US – Carbon Steel  Panel Report, United States – Countervailing Duties on Certain Corrosi on-
Resistant Carbon Steel Flat Products from Germany , WT/DS213/R  and 
Corr.1, adopted 19 December 2002, as modified by Appellate Body Report 
WT/DS213/AB/R, DSR 2002:IX, p. 3833  
US – Carbon Steel (India)  Appellate Body Report, United States – Countervailin g Measures on Certain 
Hot-Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R , adopted 
19 December 2014, DSR 2014:V, p. 1727  
US – Continued Zeroing  Appellate Body Report, United States – Continued Existence and Application 
of Zeroing Methodology , WT/DS350/AB/R , adopted 19 February 2009, 
DSR 2009:III, p. 1291  
US – Corrosion -Resistant Steel 
Sunset Review  Appellate Body Report, United States – Sunset Review of Anti -Dumping 
Duties on Corrosion -Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R , adopted 9 January 2004, DSR 2004:I, p. 3  
US – Countervailing Duty 
Investigation on DRAMS  Appellate Body Report, United States – Countervailing Duty Investigation on 
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea , 
WT/DS296/AB/R , adopted 20 July 2005, DSR 2005:XVI, p. 8131  
US – Countervailing Measures 
(China)  Appellate Body Report, United States – Countervailing Duty Measures on 
Certain Products from China , WT/DS437/AB/R , adopted 16 January 2015  
US – Countervailing  Measures 
(China)  Panel Report, United States – Countervailing Duty Measures on Certain 
Products from China , WT/DS437/R  and Add.1, adopted 16 January 2015, as 
modified by Appellate Body Report WT/DS437/AB/R  
US – Gambling  Appellate Body Report, United Stat es – Measures Affecting the Cross -Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R , adopted 20 April 
2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)  
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R , adopted 20 May 1996, DSR 1996:I, 
p. 3 
US – Lamb  Appellate Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS177/AB/R , WT/DS178/AB/R , adopted 16 May 2001, DSR 2001:IX, p. 
4051 
US – Large Civil Aircraft (2nd 
complaint)  Appellate Body Report, United States – Measures Affecting Trade in Large 
Civil Aircraft (Second Complaint) , WT/DS353/AB/R , adopted 23 March 2012, 
DSR 2012:I, p. 7  
US – Offset Act (Byrd 
Amendment)  Appellate Body Report, United States – Continued Dumping and Subsidy 
Offset Act of 2000 , WT/DS217/AB/R , WT/DS234/AB/R , adopted 
27 January  2003, DSR 2003:I, p. 375  
US – Oil Country Tubular 
Goods Sunset Reviews  Appellate Body Report, United States – Sunset Reviews of Anti -Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R , 
adopted 17 December 2004, DSR 2004:VII, p. 3257  WT/DS437/RW  
 
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  Short title  Full case title and citation  
US – Softwood Lumber IV  Appellate Body Report, United States – Final Countervailing Duty 
Determination with Respect to Certain Softwood Lumber from Canada , 
WT/DS257/AB/R , adopted 17 February 2004, DSR 2004:II, p. 571  
US – Softwood Lumber IV  Panel Report, United States – Final Countervailing Duty Determination with 
Respec t to Certain Softwood Lumber from Canada , WT/DS257/R  and Corr.1, 
adopted 17 February 2004, as modified by Appellate Body Report 
WT/DS257/AB/R, DSR 2004:II, p. 641  
US – Softwood Lumber IV 
(Article 21.5 – Canada)  Appellate Body Report, United States – Final Countervailing Duty 
Determination with Respect to Certain Softwood Lumber from Canada – 
Recourse by Canada to Article 21.5 of the DSU , WT/DS257/AB/RW , adopted 
20 December 2005, DSR 2005:XXIII, p. 11357  
US – Softwood Lumber VI 
(Article 21.5 – Canada)  Appellate Body Report, United States – Investigation of the International 
Trade Commission in Softwood Lumber from Canada – Recourse to 
Article  21.5 of the DSU by Canada , WT/DS277/AB/RW , adopted 9 May 2006, 
and Corr.1, DSR 2006:XI, p. 4865  
US – Tyres (China)  Appellate Body Report, United States – Measures Affecting Imports of 
Certain Passenger Vehicle and Light Truck Tyres from China , 
WT/DS399/AB/R , adopted 5 October 2011 , DSR 2011:IX, p. 4811  
US – Upland Cotton (Article 
21.5 – Brazil)  Appellate Body Report, United States – Subsidies on Upland Cotton – 
Recourse to Article 21.5 of the DSU by Brazil , WT/DS267/AB/RW , adopted 
20 June 2008, DSR 2008:III, p. 809  
US – Wool Shirts and Blouses  Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R , adopted 23 May 1997, 
and Corr.1, DSR 1997:I, p. 323  
US – Zeroing (EC)  Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R , adopted 
9 May 2006, and Corr.1, DSR 2006:II, p. 417  
US – Zeroing (EC) (Article 21.5 
– EC) Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of 
the DSU by the Europe an Communities , WT/DS294/AB/RW  and Corr.1, 
adopted 11 June 2009, DSR 2009:VII, p. 2911  
US – Zeroing (Japan) (Article 
21.5 – Japan)  Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews – Recourse to Article 21.5 of the DSU  by Japan , 
WT/DS322/AB/RW , adopted 31 August 2009, DSR 2009:VIII, p. 3441  
 
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  EXHIBITS REFERRED TO  IN THIS REPORT  
Exhibit  Short Title  Description  
CHN-1 Public Bodies 
Memorandum/CCP 
Memorandum  USDOC Memoranda dated 18 May 2012 for Section 129 
Determination  of the Countervailing Duty Investigation of Circular 
Welded Carbon Quality Steel Pipe; Light -Walled Rectangular Pipe 
and Tube; Laminated Woven Sacks; and Off -the-Road Tires from 
the People's Republic of China  
CHN-2 GOC Public Bodies 
Questionnaire 
respons e GOC Questionnaire response (including exhibits GOC -A-02, 
GOK-A-03, and GOK -A-06) (15 May 2015)  
CHN-4 Preliminary 
Determination on 
Public Bodies and 
Input Specificity  USDOC Memorandum dated 25 February 2016 on Preliminary 
Determination of Public Bodies and Input Specificity, and the 
attached Memorandum on Input Producers and Input Purchases 
During the Investigations  
CHN-5 Final Section 129 
Determination  USDOC Final Determination for Lawn Groomers, Kitchen Shelving, 
Wire Strand, Print Graphics, Aluminum Extrusions, Steel 
Cylinders, Seamless Pipe, Pressure Pipe, Line Pipe, OCTG, and 
Solar Panels (31 March 2016, 25 April 2016, 19 May 2016)  
CHN-19 Ordover Report  Ordover Report, Exhibit GOC -D-25 to GOC Questionnaire 
response (6 July 2015)  
CHN-20 Benchmark 
Memorandum  Memorandum dated 7 March on USDOC Benefit (Market 
Distortion)  
CHN-21 Final Benchmark 
Determination  USDOC, Final Determination for Pressure Pipe, Line Pipe, OCTG, 
Wire Strand, and Solar Panels (19 May 2016)  
CHN-23 Input Specificity 
Memorandum  USDOC Memorandum dated 31 December 2015, "Input 
Specificity: Preliminary Analysis of the Diversification of Economic 
Activities and Length of Time"  
CHN-24 Preliminary 
Determination on Land 
Specificity  USDOC Memoranda dated 24 February 2016, "Preliminary 
Determination Regarding Land Specificity", and dated 
31 March  2016, "No Comment Final Determinations"  
CHN-27 Verification Report on 
Thermal Paper  USDOC Memorandum dated 22 February 2016, "Information 
Regarding a Land Transaction at Issue in the CVD Invest igation of 
Thermal Paper from the PRC", attaching USDOC GG/ZG 
Verification Report in the Countervailing Duty Investigation of 
Lightweight Thermal Paper from the People's Republic of China 
(20 August 2008)  
CHN-28 USDOC Final 
Determination in the 
original S olar Panels 
investigation  USDOC Issues and Decision Memorandum dated 9 October 2012  
on Final Determination in the Countervailing Duty Investigation of 
Certain Crystalline Silicon Photovoltaic Cells, Whether or Not 
Assembled Into Modules from the People's Republic of China  
CHN-30 USDOC First 
Administrative Review 
in Kitchen Shelving  USDOC Issues and Decision Memorandum dated 4 April 2012 on 
Final Results of the Countervailing Duty Administrative Review 
(2009) of Certain Kitchen Appliance Shelving and Rack s from the 
People's Republic of China  
CHN-31 USDOC Second 
Administrative Review 
in Kitchen Shelving  USDOC Issues and Decision Memorandum dated 5 April 2013 on 
Final Results of the Countervailing Duty Administrative Review 
(2010) of Certain Kitchen Appliance Shelving and Racks from the 
People's Republic of China  
CHN-32 USDOC Third 
Administrative Review 
in Kitchen Shelving: 
Preliminary 
Determination  USDOC Issues and Decision Memorandum dated 30 September 
2013 on Preliminary Results of the Countervail ing Duty 
Administrative Review  (2011) of Certain Kitchen Appliance 
Shelving and Racks from the People's Republic of China  
CHN-33 USDOC Third 
Administrative Review 
in Kitchen Shelving: 
Final Determination  USDOC Issues and Decision Memorandum dated 10 March  2014 
on Final Results of the Countervailing Duty Administrative Review  
(2011) of Certain Kitchen Appliance Shelving and Racks from the 
People's Republic of China  
CHN-34 USDOC First 
Administrative Review 
in OCTG  USDOC Issues and Decision Memorandum dated 7 August 2013 
on Final Results of the Countervailing Duty Administrative Review 
(2011) of Certain Oil Country Tubular Goods from the People's 
Republic of China  
CHN-35 USDOC Second 
Administrative Review 
in OCTG: Preliminary 
Determination  USDOC Issues and D ecision Memorandum dated 
18 February  2014 on Preliminary Results of the Countervailing 
Duty Administrative Review (2012) of Certain Oil Country Tubular 
Goods from the People's Republic of China  WT/DS437/RW  
 
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  Exhibit  Short Title  Description  
CHN-36 USDOC Second 
Administrative Review 
in OCTG: Final 
Determination  USDOC Issues and Decision Memorandum dated 25 August 2014 
on Final Results of the Countervailing Duty Administrative Review 
(2012) of Certain Oil Country Tubular Goods from the People's 
Republic of China  
CHN-37 USDOC First 
Administrative Rev iew 
in Magnesia Bricks  USDOC Issues and Decision Memorandum dated 9 April 2013 on 
Final Results of the Countervailing Duty Administrative Review 
(2010) of Certain Magnesia Carbon Bricks from the People's 
Republic of China  
CHN-38 USDOC Second 
Administrativ e Review 
in Magnesia Bricks  USDOC Issues and Decision Memorandum dated 7 October 2014 
on Final Results of the Countervailing Duty Administrative Review 
(2012) of Certain Magnesia Carbon Bricks from the People's 
Republic of China  
CHN-39 USDOC First 
Administrative Review 
in Aluminum 
Extrusions  USDOC Issues and Decision Memorandum dated 
26 December  2013 on Final Results of the Countervailing Duty 
Administrative Review (2010 -2011) of Aluminum Extrusions from 
the People's Republic of China  
CHN-40 USDOC Second 
Administrative Review 
in Aluminum 
Extrusions  USDOC Issues and Decision Memorandum dated 
22 December  2014 on Final Results of the Countervailing Duty 
Administrative Review (2012) of Aluminum Extrusions from the 
People's Republic of China  
CHN-41 USDOC Third 
Administrative Review 
in Aluminum 
Extrusions  USDOC Issues and Decision Memorandum dated 
7 December  2015 on Final Results of the Countervailing Duty 
Administrative Review (2013) of Aluminum Extrusions from the 
People's Republic of  China  
CHN-42 USDOC First 
Administrative Review 
in Solar Panels  USDOC Issues and Decision Memorandum dated 7 July 2015 on 
Final Results of the Countervailing Duty Administrative Review 
(2012) of Crystalline Silicon Photovoltaic Cells, Whether or Not 
Assembled into Modules from the People's Republic of China  
CHN-43 USDOC Second 
Administrative Review 
in Solar Panels  USDOC Issues and Decision Memorandum dated 12 July 2016  on 
Final Results of the Countervailing Duty Administrative Review 
(2013) of Crystalli ne Silicon Photovoltaic Cells, Whether or Not 
Assembled into Modules from the People's Republic of China  
CHN-44 USDOC Sunset Review 
in Thermal Paper  USDOC Issues and Decision Memorandum dated 
14 February  2014 on Final Results of the Expedited Sunset 
Review of the Countervailing Duty Order on Lightweight Thermal 
Paper from the People's Republic of China  
CHN-45 USDOC Sunset Review 
in Pressure Pipe  USDOC Issues and Decision Memorandum dated 2 June 2014 on 
Final Results of the Expedited Sunset Review of  the Countervailing 
Duty Order on Circular Welded Austenitic Stainless Pressure Pipe 
from the People's Republic of China  
CHN-46 USDOC Sunset Review 
in Line Pipe  USDOC Issues and Decision Memorandum dated 11 March 2014 
on Final Results of the Expedited Su nset Review of the 
Countervailing Duty Order on Circular Welded Carbon Quality 
Steel Line Pipe from the People's Republic of China  
CHN-47 USDOC Sunset Review 
in Kitchen Shelving  USDOC Issues and Decision Memorandum dated 
1 December  2014 on Final Results  of the Countervailing Duty 
Sunset Review of Certain Kitchen Appliance Shelving and Racks 
from the People's Republic of China  
CHN-48 USDOC Sunset Review 
in OCTG  USDOC Issues and Decision Memorandum dated 31 March 2015 
on Final Results of the Expedited First Sunset Review of the 
Countervailing Duty Order on Oil Country Tubular Goods from the 
People's Republic of China  
CHN-49 USDOC Sunset Review 
in Wire Strand  USDOC Issues and Decision Memorandum dated 31 August 2015 
on the Final Results of the Expedite d First Sunset Review of the 
Countervailing Duty Order on Prestressed Concrete Steel Wire 
Strand from the People's Republic of China  
CHN-50 USDOC Sunset Review 
in Magnesia Bricks  USDOC Issues and Decision Memorandum dated 
1 December  2015 on Final Results  of the Expedited First Sunset 
Review of the Countervailing Duty Order on Certain Magnesia 
Carbon Bricks from the People's Republic of China  
CHN-51 USDOC Sunset Review 
in Seamless Pipe  USDOC Issues and Decision Memorandum dated 28 January 2016 
on Final R esults of the Expedited First Sunset Review of the 
Countervailing Duty Order of Certain Seamless Carbon and Alloy 
Steel Standard, Line, and Pressure Pipe from the People's 
Republic of China  
CHN-52 USDOC Sunset Review 
in Print Graphics  USDOC Issues and Decision Memorandum dated 4 March 2016 on 
Final Results of the Expedited Sunset Review of Certain Coated 
Paper Suitable for High -Quality Print Graphics Using Sheet -Fed 
Presses from the People's Republic of China  WT/DS437/RW  
 
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  Exhibit  Short Title  Description  
CHN-53 USDOC Sunset Review 
in Aluminum 
Extrusions  USDOC Issues and Decision Memorandum dated 1 August 2016 
on Final Results of the First Expedited Sunset Review of the 
Countervailing Duty Order on Aluminum Extrusions from the 
People's Republic of China  
CHN-54 Public Body Reference 
Chart  Public Body Reference Chart  
USA-83 USDOC Public Bodies 
Questionnaire  USDOC Questionnaire Concerning "Public Bodies" (1 May 2015)  
USA-84 Supporting Benchmark 
Memorandum  USDOC Supporting Memorandum dated 7 March 2016 to 
Prelimin ary Benefit (Market Distortion)  
USA-121 USDOC Benchmark 
Questionnaire  USDOC Questionnaire Concerning the Benchmark Used to 
Measure Whether Certain Inputs Were Sold for Less than 
Adequate Remuneration (5 June 2015)  
USA-122 GOC Benchmark 
Questionnaire 
response  GOC Response to the USDOC Benchmark Questionnaire 
(6 July 2015)  
USA-126 Inputs Memorandum  Memorandum dated 25 February 2016 from E. B. Greynolds to 
the File on Input Producers and Input Purchases During the 
Investigations  
USA-129 USDOC Administr ative 
Review in Citric Acid  USDOC Issues and Decision Memorandum dated 
22 December  2014 for the Final Results of the Countervailing 
Duty Administrative Review: Citric Acid and Certain Citrate Salts 
(2012)  
USA-130 Public Bodies Record 
Memorandum  Memorandum  dated 2 November 2015 on Placement of Factual 
Information on the Record with Respect to Public Bodies  
 
 WT/DS437/RW  
 
- 13 - 
 
  ABBREVIATIONS USED I N THIS REPORT  
Abbreviation  Description  
CCP Chinese Communist Party  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
GATT 1994  General Agreement on Tariffs and Trade 1994  
GOC Government of the People's Republic of China  
IMF International Monetary fund  
OCTG  Oil country tubular goods  
OECD  Organization for Economic Cooper ation and Development  
PRC People's Republic of China  
RPT Reasonable period of time  
SASAC  State -owned Asset Supervision and Administration Commission  
SCM Agreement  Agreement on Subsidies and Countervailing Measures  
SIE State -invested enterprise  
SOE State -owned enterprise  
USDOC  United States Department of Commerce  
Vienna Convention  Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155 
UNTS 331; 8 International Legal Materials 679  
WTO World Trade Organization  
 WT/DS437/RW  
 
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  1  INTRODUCTION  
1.1  Complaint by China  
1.1.  This compliance dispute concerns China's claims against measures taken by the United States 
to comply with the recommendations and rulings of the Dispute Settlement Body (DSB) in the 
original proceeding in US – Countervailing Measures (C hina).  
1.2.  On 13 May 2016, China requested consultations with the United States pursuant to Articles 4 
and 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes 
(DSU), Article XXII of the General Agreement on Tariffs and Trade  1994 (GATT 1994), Article 30 of 
the Agreement on Subsidies and Countervailing Measures (SCM Agreement), and paragraph 1 of 
the agreement between China and the United States dated 15 April 20161 concerning "Agreed 
Procedures under Articles 21 and 22 of the  DSU".2 
1.3.  Consultations were held on 27 May 2016, but failed to resolve the dispute.  
1.2  Panel establishment and composition  
1.4.  On 8 July 2016, China requested the establishment of a panel pursuant to Articles  6 and 21.5 
of the DSU, Article XXIII of the GATT 1994, and Article 30 of the SCM Agreement with standard 
terms of reference.3 At its meeting on 21 July 2016, the DSB referred this dispute, if possible, to 
the original panel in accordance with Article 21.5 of the DSU.  
1.5.  The Panel's terms of reference are the foll owing:  
To examine, in the light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by China in document 
WT/DS437/21 and to make such findings as will assist the DSB in making the 
recomme ndations or in giving the rulings provided for in those agreements.4 
1.6.  It was not possible to resort to the original panel to hear this compliance dispute due to the 
unavailability of the Chair and one panelist. On 26 September 2016 , China requested the 
Director-General to determine the composition of the panel, pursuant to Article 8.7 of the DSU . On 
5 October 2016, the Director -General accordingly composed the Panel as follows:  
Chairperson:  Mr Hugo Perezcano  
 
Members:   Mr Luis Catibayan  
   Mr Thinus Jacobsz  
 
1.7.  Australia, Canada, the European Union, Japan, the Republic of Korea, India, the 
Russian  Federation, and Viet Nam notified their interest in participating in the Panel proceedings as 
third parties.  
1.3  Panel proceedings  
1.8.  After consultation with the parties, the  Panel adopted its Working Procedures5 and timetable 
on 13 December 2016. The Panel subsequently revised its timetable on 15 May 2017 and 
6 September 2017.  
1.9.  The Panel held its substantive meeting with the parties on 10 and 11 May 2017. A session 
with the th ird parties took place on 11 May 2017. The Panel issued its Interim Report to the 
parties on 3 November 2017. The Panel issued its Final Report to the parties on 
15 December  2017.  
                                                
1 Understanding between China and the United States regarding procedures under Articles 21 and 22 of 
the DSU, WT/DS437/19.  
2 Request for consultations by China, WT/DS437/20 (China's consultations request).  
3 Request for the establishment of a panel by China, WT/DS437/21 (China's panel request).  
4 Constitution note of the Panel, WT/DS437/22.  
5 See the Panel's Working Procedures in Annex A -1. WT/DS437/RW  
 
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  2  THE MEASURES AT ISSU E 
2.1.  The measures at issue in this compliance dispute are:  
a. preliminary and final determinations made by the United States Department of 
Commerce (USDOC) under Section 129 of the Uruguay Round Agreements Act 
(Section  129) to comply with recommendations and rulings of the DSB made in the 
original proceeding in US – Countervailing Measures (China)6;  
b. the " Public Bodies Memorandum"7 both as a measure of general and prospective 
application and a measure relating to the Section 129 proceedings at issue;  
c. the original final countervailing duty determination of the USDOC in  the Solar Panels 
investigation;  
d. subsequent periodic and sunset reviews of the countervailing duty orders in the 
proceedings at issue as identified in annex 3 and annex 4, respectively, of 
China's  request for the establishment of a compliance panel, as wel l as periodic and 
sunset review determinations subsequent to those set forth in annex 3 and annex 4; and  
e. all instructions and notices by which the United States imposes, assesses, and/or collects 
cash deposits and countervailing duties in the proceedings at issue, as well as the 
ongoing conduct of the United States of imposing, assessing, and/or collecting cash 
deposits and countervailing duties in the proceedings at issue.  
3  PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  
3.1.  China requests that the Panel find that:  
a. In connection with the USDOC's public body determinations:  
i. The USDOC's public body determinations in certain Section 129 proceedings8 and 
periodic review determinations identified in annex 3 of China's panel request are 
inconsistent with Article  1.1(a)(1) of the SCM Agreement because they conclude that 
enterprises with full or majority government ownership, enterprises with less than 
majority government ownership, and wholly private enterprises are public bodies 
based on an erroneous interpretati on of this term and/or in the absence of any 
evidence that these enterprises possess, exercise, or are vested with governmental 
authority pertaining to the provision of the relevant input(s).  
ii. The Public Bodies Memorandum is inconsistent, as such, with Article 1.1(a)(1) of the 
SCM Agreement because it concludes that enterprises with full or majority 
government ownership, enterprises with less than majority government ownership, 
and wholly private enterprises are public bodies based on an erroneous interp retation 
of this term and/or in the absence of any evidence that these enterprises possess, 
exercise, or are vested with governmental authority pertaining to the provision of the 
relevant input(s).  
b. In connection with the USDOC's benchmark determinations:  
i. The USDOC's benchmark determinations in certain Section 129 proceedings9 are 
inconsistent with Articles 1.1(b) and 14(d) of the SCM Agreement because they 
erroneously conclude that domestic Chinese prices for the inputs at issue are not 
"market" prices with in the meaning of those provisions and are not suitable 
benchmarks for evaluating the adequacy of remuneration.  
                                                
6 China's panel request, annex 2.  
7 Public Bodies Memorandum, (Exhibit CHN -1). 
8 Pressure Pipe, Line Pipe, Lawn Groomers, Kitchen Shelving, OCTG, Wire Strand, Seamless Pipe, Print 
Graphics, Aluminum Extrusions, Steel Cylinders, and Solar Pane ls. 
9 OCTG, Solar Panels, Pressure Pipe, and Line Pipe.  WT/DS437/RW  
 
- 16 - 
 
  ii. The USDOC's periodic review determinations identified in annex 3 of China's panel 
request are inconsistent with Articles 1.1(b) and 14(d) of the  SCM Agreement 
because they erroneously conclude that domestic Chinese prices for the inputs at 
issue are "distorted" and therefore unsuitable as benchmarks for evaluating the 
adequacy of remuneration.  
iii. The USDOC's benchmark determinations in certain Secti on 129 proceedings10 are 
inconsistent with Article 32.1 of the SCM Agreement because they constitute specific 
action against subsidization not in accordance with the provisions of the 
SCM Agreement insofar as the USDOC relied on subsidies allegedly provided  to 
upstream input producers as a factor in its finding of "distortion".  
c. In connection with the USDOC's input specificity determinations:  
i. The USDOC's input specificity determinations in certain Section 129 proceedings11 
are inconsistent with Article 2.1(c) of the SCM Agreement because the USDOC did 
not properly identify the existence or duration of a "subsidy programme", as this 
term is properly interpreted, and therefore had no basis to evaluate "the length of 
time during which the subsidy programme has bee n in operation".  
ii. The USDOC's periodic review determinations identified in annex 3 of China's panel 
request are inconsistent with Article 2.1(c) of the SCM Agreement because the 
USDOC failed to take into account the factors set forth in the last sentence of  that 
provision.  
d. The USDOC's land specificity determination in the Thermal Paper Section 129 proceeding 
is inconsistent with Article 2.2 of the SCM Agreement because the USDOC did not clearly 
substantiate on the basis of positive evidence that the alleged land-use subsidy is limited 
to certain enterprises located within a designated geographical region within the 
jurisdiction of the granting authority.  
e. In connection with the USDOC's original final determination in the Solar Panels 
investigation:  
i. The USDOC's  final determination is inconsistent with Article 1.1(a)(1) of the 
SCM Agreement because, as the DSB found in respect of the preliminary 
determination in the same investigation, the USDOC incorrectly applied a majority 
government ownership test for the pur pose of determining whether certain entities 
were public bodies within the meaning of that provision.  
ii. The USDOC's final determination is inconsistent with Articles 1.1(b) and 14(d) of the 
SCM Agreement because, as the DSB found in respect of the preliminar y 
determination in the same investigation, the USDOC's analysis and explanation for 
rejecting in -country prices in its benchmark analysis was inconsistent with those 
provisions.  
iii. The USDOC's final determination is inconsistent with Article 2.1(c) of the 
SCM Agreement, because as the DSB found in respect of the preliminary 
determination in the same investigation, the USDOC failed to take into account the 
two factors set forth in the last sentence of that provision in its specificity 
determination.  
f. In connecti on with the periodic review determinations identified in annex 3 pertaining to 
the Magnesia Bricks countervailing duty order, the USDOC has continued to act 
inconsistently with Article 11.3 of the SCM Agreement by including within the so -called 
"adverse fa cts available rate" the alleged export restraint subsidy the investigation of 
which the DSB found had been improperly initiated in the original dispute. The USDOC 
                                                
10 OCTG, Solar Panels, Pressure Pipe, and Line Pipe.  
11 Pressure Pipe, Line Pipe, Lawn Groomers, Kitchen Shelving, OCTG, Wire Strand, Seamless Pipe, Print 
Graphics, Aluminum Extrusions, Steel Cylinders,  and Solar Panels.  WT/DS437/RW  
 
- 17 - 
 
  also acted inconsistently with Article 12.7 of the SCM Agreement by including within the 
so-called "adverse facts available rate" the alleged export restraint subsidy that the 
USDOC revoked in the Section 129 proceedings.  
g. In respect of the sunset review determinations identified in annex 4 of China's panel 
request, the USDOC's determinations are i nconsistent with Article 21.3 of the 
SCM Agreement because they rely on prior determinations of subsidization contained 
in: (i) the original investigation determinations that were found inconsistent with 
relevant provisions of the SCM Agreement for the rea sons set forth in the 
recommendations and rulings of the DSB, the deficiencies of which have not been 
remedied by the Section 129 determinations; and/or (ii) the subsequent periodic review 
determinations that China considers to be inconsistent with relevan t provisions of the 
SCM Agreement.  
h. In respect of any periodic review determinations in the proceedings at issue subsequent 
to those set forth in annex 3 of China's panel request that involve the same errors that 
China identified regarding the USDOC's publi c body, benefit, and specificity 
determinations, these subsequent periodic review determinations are inconsistent with 
the same provisions of the SCM Agreement as are identified with respect to the periodic 
review determinations set forth in annex 3 of Chi na's panel request. Likewise, in respect 
of any sunset review determinations in the proceedings at issue subsequent to those set 
forth in annex 4 of China's panel request that involve the same errors that China 
identified regarding the sunset review determ inations set forth in annex 4 of 
China's  panel request, these subsequent sunset review determinations are likewise 
inconsistent with Article 21.3 of the SCM Agreement.  
i. In respect of the measures by which the United States continues to impose, assess, 
and/o r collect cash deposits and countervailing duties in the proceedings at issue, as well 
as the ongoing conduct of imposing, assessing, and/or collecting these cash deposits and 
countervailing duties, these measure are inconsistent with:  
i. Articles 1.1(a)(1), 1.1(b), 2.1(c), 11.3, and 14(d) of the SCM Agreement in relation 
to specific Section 129 determinations and periodic review determinations, because 
the cash deposits and countervailing duties that the United States continues to 
impose, assess, and/or colle ct in the proceedings at issue are inconsistent with those 
provisions for the reasons detailed in relation to those determinations;  
ii. Article 19.1 of the SCM Agreement, because the United States is imposing 
countervailing duties not in accordance with the pr ovisions of Article 19 of the 
SCM Agreement;  
iii. Article 19.3 of the SCM Agreement, because the United States is not levying 
countervailing duties in the appropriate amounts in each case; and  
iv. Article 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994,  because the 
United States is levying countervailing duties in excess of the amount of the subsidy 
found to exist.  
3.2.  The United States requests that the Panel find that the United States has complied with the 
recommendations of the DSB and that the US measur es taken to comply are not inconsistent with 
the SCM Agreement, and reject China's claims to the contrary.  
4  ARGUMENTS OF THE PAR TIES  
4.1.  The arguments of the parties are reflected in their executive summaries, provided to the 
Panel in accordance with paragraph 17 of the Working Procedures adopted by the Panel (see 
Annexes B -1 and C -1). WT/DS437/RW  
 
- 18 - 
 
  5  ARGUMENTS OF THE THI RD PARTIES  
5.1.  The arguments of Australia, Canada, the European Union, and Japan are reflected in their 
executive summaries, provided in accordance with paragraph 18 of the Working Procedures 
adopted by the Panel (see Annexes D -1, D-2, D-3, and D -4).  
6  INTERIM REVIEW  
6.1.  On 3 November 2017, the Panel issued its Interim Report to the parties. On 17 November 
2017, China and the United States submitted their written requests for review. On 1 December 
2017, both parties submitted comments on the other party's requests for review. Neither party 
requested an interim review meeting.  
6.2.  The parties' requests made at the interim review stage as well as the Panel's discussion and 
disposition of those requests are set out in Annex A -2. 
7  FINDINGS  
7.1  General principles regarding treaty interpreta tion, standard of review, and burden 
of proof  
7.1.1   Treaty interpretation  
7.1.  Article  3.2 of the DSU provides that the WTO dispute settlement system serves to clarify the 
existing provisions of the covered agreements "in accordance with customary rules of 
interpreta tion of public international law". It is generally accepted that the principles codified in 
Articles  31 and 32 of the Vienna Convention on the Law of Treaties are such customary rules.12 
7.1.2   Standard of review  
7.2.  Panels generally are bound by the standard of revie w set forth in Article  11 of the DSU, which 
provides, in relevant part, that:  
[A] panel should make an objective assessment of the matter before it, including an 
objective assessment of the facts of the case and the applicability of and conformity 
with the  relevant covered agreements.  
7.3.  The Appellate Body has stated that the "objective assessment" to be made by a panel 
reviewing an investigating authority's determination is to be informed by an examination of 
whether the authority provided a reasoned and adeq uate explanation as to: (a) how the evidence 
on the record supported its factual findings; and (b) how those factual findings supported the 
overall determination.13 
7.4.  The Appellate Body has also stated that a panel reviewing an investigating authority's 
deter mination may not undertake a de novo  review of the evidence or substitute its judgment for 
that of the investigating authority. A panel must limit its examination to the evidence that was 
before the authority during the course of the investigation and must  take into account all such 
evidence submitted by the parties to the dispute.14 At the same time, a panel must not simply 
defer to the conclusions of the investigating authority; a panel's examination of those conclusions 
must be "in -depth" and "critical an d searching".15  
7.1.3   Burden of proof  
7.5.  The general principles applicable to the allocation of the burden of proof in WTO dispute 
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert 
                                                
12 Appellate Body Reports, US – Gasoline , p. 17 ; Japan – Alcoholic Beverages  II, p. 10, section D.  
13 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS , para.  186. 
14 Appellate Body Report, US – Countervailing Duty Inve stigation on DRAMS , para. 187.  
15 Appellate Body Reports, US – Softwood Lumber  VI (Article  21.5 – Canada) , para.  93; US – Lamb , 
paras. 106 -107. WT/DS437/RW  
 
- 19 - 
 
  and prove its claim.16 Therefore, China bears the burden of demonstrating that the challenged 
measures are inconsistent with the SCM  Agreement. A complaining party will satisfy its burden 
when it establishes a prima facie  case, namely a case which, in the absence of effective r efutation 
by the defending party, requires a panel, as a matter of law, to rule in favour of the complaining 
party.17 It is generally for each party asserting a fact to provide proof thereof.18 
7.2  China's claim under Article 1.1(a)(1) of the SCM Agreement in re lation to the 
USDOC's public body determinations  
7.6.  China claims that the United States failed to comply with the recommendations and rulings of 
the DSB under Article 1.1(a)(1) of the SCM Agreement in 11 Section 129 proceedings. In 
particular, China claims th at the USDOC applied an improper legal standard in its public body 
determinations, and that the USDOC ignored evidence that contradicted the finding that entities 
providing the inputs at issue are public bodies. China also presents an "as such" claim again st the 
"Public Bodies Memorandum", which was relied upon by the USDOC in the public body 
determinations made in these Section 129 proceedings.  
7.2.1   China's "as applied" claim under Article 1.1(a)(1) of the SCM Agreement  
7.2.1.1   Main arguments of the parties  
7.7.  China argu es that the USDOC based its public body determinations on an incorrect finding 
that the entities providing the inputs at issue possessed, exercised, or were vested with 
governmental authority. In this connection, China criticizes what it considers to be th e USDOC's 
failure to demonstrate a relationship between the identified "government function", namely to 
uphold and maintain the socialist market economy in China , and the sale of the relevant inputs in 
the investigations at issue.19 China argues that a gove rnment function must bear some 
relationship to the financial contribution in question, as "it cannot be the case that an entity that is 
allegedly controlled by the government in relation to any 'government function' is a public body, 
even if the conduct th at is the subject of the financial contribution inquiry is unrelated to that 
'government function'".20  
7.8.  Although China "agrees with the USDOC that identifying a relevant 'government function' is 
essential to the public body inquiry", China considers that th e function identified by the USDOC in 
the Public Bodies Memorandum is "fundamentally flawed"21, as it is "irrelevant" in terms of its 
connection to the sale of inputs by the entities at issue.22 Accordingly, China contends that "the 
USDOC's failure to engage  in a case -by-case analysis and to identify a relevant  'government 
function' in relation to each of the countervailing duty investigations at issue in the Section 129 
proceedings renders the USDOC's public body determinations in all twelve investigations 
inconsistent with Article 1.1(a)(1) of the SCM Agreement."23 
7.9.  In addition, China contends that the USDOC ignored substantial evidence that was 
inconsistent with a finding that the input producers in certain investigations were performing a 
"government functio n" when they sold inputs to downstream purchasers, and failed to provide any 
explanation for not considering such evidence.24  
7.10.   The United States disagrees with the legal standard advanced by China, considering it 
overly narrow and contrary to prior findings  in relation to public body determinations.25 The United 
States further argues that the USDOC carried out the type of analysis required by the 
Appellate  Body by examining the functions or conduct ordinarily classified as governmental in the 
                                                
16 Appellate Body Report, US – Wool Shirts and Blouses , p. 16. 
17 Appellate Body Report, EC – Hormones , para. 104. 
18 Appellate Body Report, US – Wool Shirts and Blouses , p. 14. 
19 China's first written submission, paras. 100-107. 
20 China's first written submission, para. 100. (emphasis original)  
21 China's first written submission, para. 70. 
22 China's response to Panel question No. 2(b); see also first written submission, para. 100 (arguing 
that the identified government function "is so broad and abstract that it bears no logical connection to the 
public body inquiry").  
23 China's first written submission, para. 107. (emphasis original)  
24 China's first written submission, paras. 108-156. 
25 United States' first written submission, paras. 19 -56. WT/DS437/RW  
 
- 20 - 
 
  legal order of C hina, and the manifold indicia of control indicating that relevant input providers 
possess, exercise, or are vested with governmental authority.26 The United States also submits 
that the USDOC's public body determinations were reasoned and adequate and incl uded extensive 
analysis and explanation; they were based on the totality of the evidence on the record; and they 
were supported by ample record evidence of the core features of the entities in question and their 
relationship with the government.27 The Unite d States argues that, on that basis, the USDOC 
found sufficient evidence to support a determination that the government of China meaningfully 
controls and uses the entities at issue to effectuate the governmental function of maintaining and 
upholding the s ocialist market economy.28 
7.2.1.2   Main arguments of the third parties  
7.11.   Australia submits that China's proposed interpretation does not accord with the text of 
Article  1.1(a)(1), which distinguishes between governments and public bodies on the one hand, 
and private entities on the other. In Australia's view, for the former category "[t]here is no 
separate, context -specific requirement to determine whether such conduct involves the discharge 
of a governmental function in each instance", as "the 'governmental' characte r of those entities is 
sufficient".29 Australia further considers that China's interpretation does not accord with prior 
Appellate Body findings and would impose an impractical evidentiary burden by requiring an 
investigating authority to obtain evidence th at each transaction or series of transactions results 
from a particular performance of a governmental function.30 
7.12.   Canada disagrees with China's interpretation emphasizing the conduct  of an entity and 
notes the Appellate Body's statements regarding the relev ance of the "core features" of an entity 
and its relationship with the government.31 Canada considers that "[t]he designation of public body 
is not dependent on each action the entity takes in relation to its function" but rather "on the basis 
of evidence r elated to government policies, the applicable legal order, the prevailing economic 
environment in the country, and other evidence related to the core features of the entity and its 
relationship with the government".32 
7.13.   The European Union submits that whether  an entity qualifies as a "public body" is "closely 
connected to the more general issue of attribution "33 and that "questions such as whether the 
entity performs a governmental function and whether that function is linked to the financial 
contribution at is sue are, ultimately, only instruments to get at the broader question of 
attribution".34 The European Union submits that "a financial contribution can be attributed to a 
public body … if certain indicators relevant to the entity in general show that its cond uct can be 
attributed to the WTO Member", such as "the entity's legal status, the rules that are applicable to 
it, its governing structures, its tasks and objectives, the nature and intensity of State control over 
its activities etc."35 For the European Uni on, it would not suffice if "an entity is in some loose way 
connected to the State or subject to State regulation".36 
7.14.   Japan disagrees with China's "mistaken view" that the Appellate Body exclusively focused 
on the conduct of an entity as "the Appellate Body  focused just as much, if not more, on the 
characteristics or features or nature of the relevant entity".37 Japan understands the reference of 
the Appellate Body to "the conduct of an entity" to refer "to the entity's general or overall conduct, 
that is, to  the activities generally conducted by that entity" rather than "the specific conduct that is 
alleged to be a financial contribution".38 Japan submits that a relevant aspect of whether an entity 
                                                
26 United States' first written submission, paras. 63 -102. 
27 United States' first written submission, par a. 116.  
28 United States' second written submission, para. 46.  
29 Australia's third -party statement, para. 4.  
30 Australia's third -party statement, paras. 6 -7. 
31 Canada's third-party submission, paras. 13-15. 
32 Canada's third-party submission, para. 16. 
33 European Union's third -party submission, para. 6. (emphasis original)  
34 European Union's third -party submission, para. 1 4. 
35 European Union's third -party submission, para. 19.  
36 European Union's third -party submission, para. 21.  
37 Japan's third-party submiss ion, para. 4. 
38 Japan's third-party submission, para. 7. WT/DS437/RW  
 
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  is a public body is "whether [a state -owned or state -invested enterprise] is structured in a manner 
that allows it to act not solely in accordance with commercial considerations".39 
7.2.1.3   Evaluation by the Panel  
7.2.1.3.1   Introduction  
7.15.   In this compliance dispute, we are called upon to evaluate China's claim that the 
USDOC's  determination that providers of certain inputs were public bodies is inconsistent with 
Article  1.1(a)(1) of the SCM Agreement.  
7.16.   We recall that a public body within the meaning of Article 1.1(a)(1) "must be an entity that 
possesses, exercises or is v ested with governmental authority".40 In this regard, a key question is 
whether "an entity is vested with authority to exercise governmental functions".41 In evaluating 
whether a particular entity is a public body within the meaning of Article 1.1(a)(1), the  
Appellate  Body has explained the following general requirement:  
Whether the conduct of an entity is that of a public body must in each case be 
determined on its own merits, with due regard being had to the core characteristics 
and functions of the relevan t entity, its relationship with the government, and the 
legal and economic environment prevailing in the country in which the investigated 
entity operates.42 
7.17.   The absence of an express statutory delegation of governmental authority does not preclude 
a determ ination that a particular entity is a public body, as there are different ways in which a 
government could be understood to vest an entity with "governmental authority", and therefore 
different types of evidence may be relevant in this regard.43 Although "t he mere ownership or 
control over an entity by a government, without more, is not sufficient to establish that the entity 
is a public body"44, state ownership may be evidence, in conjunction with other elements, 
indicating the delegation of governmental aut hority.45 In addition, the fact that an entity is, in fact, 
exercising governmental functions may be evidence that it possesses or has been vested with 
governmental authority, particularly where the evidence points to a sustained and systematic 
practice.46 
7.18.   The Appellate Body has also found that "evidence that a government exercises meaningful 
control over an entity and its conduct may serve, in certain circumstances, as evidence that the 
relevant entity possesses governmental authority and exercises such auth ority in the performance 
of governmental functions".47 Further, "where the evidence shows that the formal indicia of 
government control are manifold, and there is also evidence that such control has been exercised 
in a meaningful way, then such evidence may  permit an inference that the entity concerned is 
exercising governmental authority".48 
                                                
39 Japan's third -party submission, para. 16.  
40 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 317.  
41 Appellate Body Report, US – Anti-Dumping and Countervailing Duti es (China) , para. 318.  
42 Appellate Body Report, US – Carbon Steel (India) , 4.29. Similarly, the Appellate Body has explained 
that "[p]anels 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 que stion only by 
conducting a proper evaluation of the core features of the entity concerned, and its relationship with 
government in the narrow sense." (Appellate Body Report, US – Anti-Dumping and Countervailing Duties 
(China) , para. 317). In this connectio n, the Appellate Body distinguished the concept of "'government' in the 
narrow sense" (e.g. formal agencies or departments of government) from the concept of "'government' in the 
collective sense", which also includes "public bodies".  
43 Appellate Body Repo rts, US – Anti-Dumping and Countervailing Duties (China) , para. 318; US – 
Carbon Steel (India) , para. 4.10.  
44 Appellate Body Report, US – Carbon Steel (India) , para. 4.10.  
45 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para.  310. 
46 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 318.  
47 Appellate Body Reports, US – Anti-Dumping and Countervailing Duties (China) , para. 318; US – 
Carbon Steel (India) , para. 4.10.  
48 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 318.  WT/DS437/RW  
 
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  7.19.   In determining whether or not a specific entity is a public body, it may be relevant to 
consider whether the functions or conduct of the entity "are of a kind that are o rdinarily classified 
as governmental in the legal order of the relevant Member".49 Accordingly, "just as no two 
governments are exactly alike, the precise contours and characteristics of a public body are bound 
to differ from entity to entity, State to Stat e, and case to case".50 
7.20.   Finally, investigating authorities and panels must "avoid focusing exclusively or unduly on 
any single characteristic without affording due consideration to others that may be relevant" to a 
public body determination.51 Further, inves tigating authorities are "under an obligation to actively 
seek out information relevant to the analysis of whether a financial contribution had been made", 
including information relevant to the potential characterization of entities as public bodies, so as  to 
be able to provide a reasoned and adequate explanation of their conclusions.52 
7.21.   We begin by addressing the parties' arguments in relation to the legal standard applicable to 
the public body inquiry under Article 1.1(a)(1), before turning to arguments con cerning the 
consistency of the USDOC's public body determinations with Article 1.1(a)(1) based on the factual 
evidence on the record of its investigations.  
7.2.1.3.2   Whether the USDOC applied an erroneous legal standard in its public body 
determinations  
7.22.   In claiming  that the USDOC's public body determinations are inconsistent with 
Article  1.1(a)(1), China argues that the proper question for an investigating authority is whether 
an entity is performing a government function when it engages in relevant conduct under 
Article 1.1(a)(1) of the SCM Agreement, that is, when it provides a financial contribution.53 China 
thus argues that the USDOC was required to determine "whether the enterprises in the twelve 
relevant countervailing duty investigations were performing a 'gove rnment function' when they 
sold the specific inputs at issue  to particular downstream purchasers".54 
7.23.   The United States contends that, "[r]ather than focusing on the conduct undertaken by the 
entity, the Appellate Body has emphasized that the focus of the pu blic body analysis is on the 
'evaluation of the core features of the entity concerned, and its relationship with the government 
in the narrow sense'".55 According to the United States, the focus of the public body inquiry is 
properly on such "core features"  of the entity concerned, "rather than on the conduct in which the 
entity is engaged".56 
7.24.   The parties' disagreement raises the question of whether Article 1.1(a)(1) requires an 
investigating authority to establish that an entity is fulfilling a government fu nction when providing 
a particular financial contribution in order to determine that the entity possesses, exercises, or is 
vested with governmental authority. We first address two related aspects of this question as it 
pertains to the USDOC's public body determinations in this case, namely: (a) identification of the 
relevant government function; and (b) the relationship between the relevant government function 
and the entity's specific conduct giving rise to a financial contribution.  
7.25.   With regard to the ide ntification of a government function as part of a public body inquiry, 
and in light of the approach taken by the USDOC, we first note that the USDOC identified 
                                                
49 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 297. Further, 
"the classification and functions of entities within WTO Members generally may also bear on the quest ion of 
what features are normally exhibited by public bodies". (See also Appellate Body Report, US – Carbon Steel 
(India) , para. 4.9).  
50 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 317.  
51 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 319.  
52 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 344. In the 
Appellate Body's view, "merely incorporating by reference findings from one determination into another 
determination will normally not suffice as a reasoned and adequate explanation". However, "where there is 
close temporal and substantive overlap between … investigations, such cross reference may, exceptionally, 
suffice". (Ibid. para. 354).  
53 China's first  written submission, paras. 79-95. 
54 China's first written submission, para. 77. (emphasis original)  
55 United States' first written submission, para. 31 (quoting Appellate Body Report, US – Anti-Dumping 
and Countervailing Duties (China) , para. 317).  
56 United States' first written submission, para. 31. WT/DS437/RW  
 
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  "maintaining and upholding the socialist market economy" as the relevant government function in 
China for the purposes of its public body analysis.57 
7.26.   We do not consider that we are called upon to judge this government function in the 
abstract, or in isolation from the rest of the USDOC's determinations. Although China has 
characterized the government function identified by the USDOC as "irrelevant" for the purposes of 
a public body analysis, it has clarified that it does not assert that "maintaining and upholding the 
socialist market economy" is not a government function, or that it is invalid per se  for the 
purposes of a public body analysis. Rather, its claim is based on this function being "so broad that 
it is essentially meaningless"58 in terms of its connection to the financial contribution in question, 
which in turn is based on its contention regar ding the proper legal standard under 
Article  1.1(a)(1).  
7.27.   Turning to the relationship between a government function and an entity's conduct giving 
rise to a financial contribution, China has clarified that it does not consider the "government 
function" of a  public body to be limited to actions constituting a financial contribution: a broader 
function could be identified if there is "a 'clear logical connection' between the 'government 
function' identified by an investigating authority and the conduct that is  alleged to constitute a 
financial contribution".59 On the other hand, the United States disagrees that there is a legal 
requirement  under Article 1.1(a)(1) to establish a "clear logical connection" between an identified 
government function and the relevant  financial contribution.60 Therefore, although the parties 
agree that it is permissible under Article  1.1(a)(1) for an investigating authority to identify a 
broader government function than the specific action that is alleged to constitute a financial 
contribution, they disagree as to the implications of doing so in terms of the applicable legal 
standard for public body determinations.  
7.28.   In our view, the text of Article 1.1(a)(1) does not prescribe a "connection" of a particular 
degree or nature that must nec essarily be established between an identified government function 
and a financial contribution. The Appellate Body has clarified that to be a public body, an entity 
must be shown to possess, exercise, or be vested with governmental authority to perform a 
governmental function. The Appellate Body has also made clear that proper public body 
determinations may rest on a variety of considerations, with due regard for the particular 
circumstances of each case, based on the fact that "there are different ways in which a 
government could be understood to vest an entity with 'governmental authority'".61 Further, what 
may constitute a "government function" may vary among Members. We do not consider there to 
be any a priori  limitation on what may be the relevant govern ment function for the purposes of a 
public body analysis.62 Rather, where an investigating authority identifies a broader government 
                                                
57 United States' response to Panel question No. 1, para. 14 ("throughout the section 129 proceedings, 
the USDOC, at numerous points, identified maintaining and upholding the socialist market economy as a 
relevant governmental function of the GOC"). We note that the USDOC record additionally refers in several 
instances to "maintaining the leading role for the state sector". (See, e.g. Public Bodies Memorandum , (Exhibit 
CHN-1), pp. 6 and 9). In the context of th e USDOC's analysis, we consider that this is an aspect or alternative 
formulation of the government function of "maintaining and upholding the socialist market economy". Indeed, 
"maintaining the leading role for the state sector" is consistently presented in connection with "maintaining and 
upholding the socialist market economy", and is seemingly subsumed under this broader function. The Public 
Bodies Memorandum at times even equates the two functions, for example in noting China's constitutional 
mandate " to maintain and uphold the socialist market economy, i.e., an economy that preserves a leading role 
for the state sector". ( Public Bodies Memorandum , (Exhibit CHN -1), p. 11).  
58 China's response to Panel question No. 2(b), para. 3.  
59 China's responses to Panel question No. 2(b), para. 4, and No. 4, para. 18. China refers to the 
United  States' articulation of "clear logical connection" and submits that the parties are essentially in 
agreement as to the applicability of this standard. (C hina's responses to Panel question No. 3, fn 17, and 
No. 2(b), para.  15).  
60 United States' comments on China's response to Panel question No. 2, para.  7. The United States 
nevertheless argues that "[t]here is a clear logical connection between the governm ental function that the 
USDOC identified and the conduct under Article 1.1(a)(1) in which the entities were engaged, and the USDOC 
established that connection on the basis of substantial record evidence." (United States' second written 
submission , para. 30 ; see also response to Panel question No. 3, para. 20).  
61 Appellate Body Report, US – Carbon Steel (India) , para. 4.10; see also Appellate Body Report, US – 
Anti-Dumping and Countervailing Duties (China) , para.  318 (noting that "There are many different wa ys in 
which government in the narrow sense could provide entities with authority.")  
62 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para.  297 ("whether 
the functions or conduct are of a kind that are ordinarily classified as g overnmental … may be a relevant 
consideration for determining whether or not a specific entity is a public body").  WT/DS437/RW  
 
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  function as part of a public body analysis, it must provide a reasoned and adequate explanation, 
based on relevant evidence,  to support that identification.  
7.29.   In this regard, the Appellate Body has clarified the general requirement that:  
Whether the conduct of an entity is that of a public body must in each case be 
determined on its own merits, with due regard being had to the c ore characteristics 
and functions of the relevant entity, its relationship with the government, and the 
legal and economic environment prevailing in the country in which the investigated 
entity operates.63 
7.30.   In addition to these broad parameters that must be part of a public body determination 
consistent with Article 1.1(a)(1), there are various other types of information and evidence that 
may be relevant  in assessing whether a particular entity is a public body. We see no basis to 
prejudge the relative weight or value of various types of relevant evidence in this regard. Rather, 
we consider that the applicable legal standard requires a holistic assessment  by an investigating 
authority of the evidence before it. Similarly, a panel must consider whether the public body 
determination is based on relevant evidence and adequate explanation in assessing whether the 
investigating authority properly concluded that  entities possessed, exercised, or were vested with 
governmental authority to perform a government function.  
7.31.   The parties' arguments regarding the legal standard of a "clear logical connection" relate to 
a broader question of the extent to which a public body analysis should focus on particular conduct  
or the more general character  of the investigated entities.64 In this regard, the parties have argued 
with respect to hypothetical entities that may be vested with certain  governmental authority and 
whether such entities would be deemed to be public bodies when making financial contributions 
unrelated  to that particul ar authority (e.g. a public health clinic providing iron ore inputs).65 
Similarly, the parties have advanced arguments based on prior disputes involving public body 
determinations in support of their respective positions regarding the legal standard under 
Article 1.1(a)(1), and in particular whether findings in prior disputes reflect a required  connection 
to a particular financial contribution as opposed to other features of the entities concerned in those 
cases.66 
7.32.   The range of hypothetical scenarios argued b efore us is illustrative of the broad variety of 
situations in which an investigating authority may have to determine whether an entity making 
financial contributions exercises, possesses, or is vested with governmental authority. The very 
                                                
63 Appellate Body Report, US – Carbon Steel (India) , para. 4.29.  
64 We note that third parties in this dispute have argued that the focus of th e public body analysis is the 
character of the relevant entity, rather than its conduct. (Japan's third -party submission, para. 14 
(understanding prior Appellate Body rulings to mean that "the type of entity is most relevant for the 
determination of 'publi c body', whereas the conduct comes into play mainly in determining whether it falls 
within one of the types of financial contributions"); Canada's third -party submission, para. 15 (stating that "the 
conduct of the entity is not what needs to be examined" i n a public body inquiry); and Australia's third -party 
statement, para. 4 (arguing that "the 'governmental' character" of public bodies is sufficient without a 
"separate, context -specific requirement to determine whether such conduct involves the discharge of a 
governmental function in each instance")). The European Union frames "the main contentious issue in this 
dispute" as whether meaningful control should be assessed "at the level of the specific transaction said to 
constitute a financial contribution, o r at the level of the entity as a whole", and submits that "a financial 
contribution can be attributed to a public body … if certain indicators relevant to the entity in general show that 
its conduct can be attributed to the WTO Member". (European Union's third-party submission, paras. 10 and 
19). In this regard, the European Union submits that a public body analysis "should focus on the features of 
the entity" without "[m]aking it necessary to show that a given financial contribution constitutes a 
governme ntal function", as this would "merge two distinct and sequential steps in the analysis: whether an 
entity is a public body and whether its conduct is a financial contribution". (European Union's third -party 
statement, para. 6).  
65 See, e.g. United States' s econd written submission, paras. 40 -41; comments on China's response to 
Panel question No. 4, para. 25; China's second written submission, para. 82; opening statement at the 
meeting with the Panel, para. 10; and comments on United States' response to Panel  question No. 3, 
paras.  4-5. See also European Union's third -party submission, para. 15 (contemplating that "[s]ome entities 
are so closely associated with the WTO Member that the issue of attribution will be straightforward", and that 
for some entities "i t may be resolved by assessing the general characteristics of the entity" while others "may 
have been sufficiently linked to the State only when providing the financial contribution itself").  
66 China's first written submission, paras. 79 -95; second written  submission, paras. 51 -59; 
United  States' first written submission, paras. 38 -42; and second written submission, paras. 68 -90. WT/DS437/RW  
 
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  fact that there are many different possible scenarios reinforces for us the importance of a case by 
case approach to determining whether any given public body determination by an investigating 
authority is consistent with Article 1.1(a)(1). Further, we do not consider tha t the factual 
circumstances and case -specific determinations in prior disputes reflect rigid legal requirements 
that must be applied in other circumstances involving different analytical approaches. In a public 
body analysis, an investigating authority mus t give due consideration to all relevant facts 
regarding the characteristics and functions of an entity as appropriate in the particular 
circumstances of the case.67 
7.33.   The parties have also advanced various interpretive arguments in relation to the object and  
purpose of the SCM Agreement as well as relevant context.68 With respect to object and purpose, 
we note the Appellate Body's finding that "considerations of object and purpose are of limited use 
in delimiting the scope of the term 'public body'" and "do no t favour either a broad or a narrow 
interpretation of the term 'public body'".69 The Appellate Body reasoned in this respect that a 
public body determination is not dispositive of the applicability of the disciplines of the 
SCM Agreement, which may also ext end to financial contributions under Article  1.1(a)(iv) whereby 
a government or public body "entrusts or directs a private body to carry out one or more of the 
type of functions illustrated in (i) to (iii)".  
7.34.   In this respect, the parties also contest the i nterpretive implications of China's argument in 
relation to financial contributions made by private bodies. The United States argues that 
China's  interpretation would collapse the public body inquiry into the inquiry of entrustment or 
direction by requirin g focus on particular actions or transactions70, while China argues that it is the 
USDOC's approach that would have this effect, in that it would allow investigating authorities to 
dispense with analysis of entrustment or direction for private bodies by tre ating them as public 
bodies under a broad government function unrelated to their conduct.71 Third parties that have 
provided a view on this question have cautioned that China's interpretation could conflate public 
bodies with private bodies to the extent it  required a particular connection between a government 
function and financial contribution.72 
7.35.   Although the provisions of Article 1.1(a)(1)(iv) provide some general interpretive guidance 
as to the meaning of the term "public body", we do not find that the co nsiderations arising in the 
context of entrustment or direction of private bodies clearly resolve the parties' disagreement as to 
the legal standard applicable to public bodies. A finding of a financial contribution by a private 
body may necessarily involv e consideration of the entity's particular conduct so that "the requisite 
link between the government and that conduct  is established by a showing of entrustment or 
direction".73 While this could be understood to suggest a relatively greater focus on an 
entity's particular conduct in an analysis of entrustment or direction of a private body, such 
evidence could also be relevant in a public body determination depending on the particular 
circumstances and evidence before the investigating authority.74 We theref ore do not consider the 
interpretive guidance of Article 1.1(a)(1)(iv) to imply any strict standard as to how an 
                                                
67 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para.  318. 
68 See, e.g. China's first written submis sion, para. 92; United States' first written submission, 
paras.  49-51; and second written submission, para. 96.  
69 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , paras.  302-303. 
70 United States' first written submission, paras. 43-48; second written submission, para. 91.  
71 China's second written submission, paras. 68 -74; response to Panel question No. 11, para. 83. 
72 Australia's third -party statement, para. 5; Canada's third -party submission, para. 22; 
European  Union's third -party submission, para. 20; and Japan's third -party submission, paras.  8-9. 
73 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 284. (emphasis 
original)  
74 As noted by the Appellate Body, the same entity may possess certain features suggesting it is a public 
body, and others that suggest that it is a private body, and "the analysis of whether the conduct of a particular 
entity is conduct of the government or  a public body or conduct of a private body is indeed multi -faceted and 
... an entity may display characteristics pointing into different directions." (Appellate Body Report, US – 
Anti-Dumping and Countervailing Duties (China) , para. 318 and fn 230). We al so note that the United States 
agrees that the conduct under Article 1.1(a)(1) is relevant to the public body analysis, and in fact argues that 
in this case the USDOC "did not analyze 'meaningful control' and 'governmental function' in isolation from the 
conduct" of providing inputs. (United States' second written submission, para. 56; see also Appellate Body 
Report, US – Carbon Steel (India) , paras. 4.43 and 4.52 (emphasising the potential relevance of an entity's 
conduct in a public body analysis)).  WT/DS437/RW  
 
- 26 - 
 
  entity's  particular conduct must be accounted for in a public  body analysis to show that an entity 
possesses, exercises, or is vested with gove rnmental authority.75  
7.36.   In conclusion, we do not agree with China's understanding of the legal standard for public 
body determinations insofar as it would require a particular degree or nature of connection in all 
cases between an identified government funct ion and the particular financial contribution at issue. 
We therefore conclude that China has failed to demonstrate that the USDOC's public body 
determinations in the relevant Section 129 proceedings are inconsistent with Article 1.1(a)(1) of 
the SCM Agreem ent because they are based on an improper legal standard. Having reached this 
conclusion, we proceed to assess China's other arguments in support of its "as applied" claim 
under Article  1.1(a)(1).  
7.2.1.3.3   Whether the USDOC's public body determinations are inconsis tent with 
Article  1.1(a)(1) of the SCM Agreement  
7.37.   In addressing China's arguments, we first review the evidence relied upon by the USDOC in 
its analysis and which was drawn mainly from information solicited in the USDOC's Public Body 
Questionnaire, as well as the Public Bodies Memorandum placed on the record of the Section 129 
proceedings.  
7.2.1.3.3.1   The USDOC's Section 129 determinations in relation to public bodies   
Public Body Questionnaire and GOC responses  
7.38.   The original panel found that the USDOC acted inconsisten tly with Article 1.1(a)(1) of the 
SCM Agreement in 12 countervailing duty investigations because it found that state -owned 
enterprises (SOEs) were public bodies based solely on the fact that these enterprises were 
(majority) owned, or otherwise controlled,  by the Government of the People's Republic of China 
(GOC).76 This finding was not appealed.  
7.39.   In its Section 129 proceedings to implement the DSB recommendations and rulings in the 
original dispute, the USDOC issued a questionnaire to the GOC regarding publi c bodies for the 
12 investigations at issue (the Public Body Questionnaire). The Public Body Questionnaire posed 
general questions regarding Chinese industrial policies and objectives, the categorization of 
industries and enterprises under Chinese industri al plans, and the role of the GOC as it relates to 
input producers and industries addressed in an "Input Producer Appendix".77 In the Input Producer 
Appendix, specific questions were posed concerning the enterprises that produced inputs 
purchased by respond ent companies in the 12 investigations at issue, seeking information on 
various aspects of corporate organization, ownership, and decision -making for these input 
producers.78 
7.40.   The GOC's response indicated that it had "made its best efforts to prepare respons es for five 
of the investigations at issue".79 For these five investigations, this included responses to the 
general questions in the Public Body Questionnaire, as well as responses to the specific questions 
in the Input Producer Appendix for input supplier s in which the GOC had a majority ownership 
interest during the period of investigation.80 For the specific questions in the Input Producer 
                                                
75 In this regard, we note that China does not consider that an investigating authority is "required to 
look at the particular transactions at issue in order to determine whether such an entity was a public body". 
(China's response to Panel question No. 11, para . 77; second written submission, paras. 71 -72). Thus, even 
under China's view, the required "connection" to the relevant financial contributions may be established 
indirectly, for example, with a focus on the type of financial contribution in question rath er than the particular  
financial contributions themselves.  
76 Panel Report, US – Countervailing Measures (China) , para. 7.75. 
77 USDOC Public Bodies Questionnaire, (Exhibit USA -83), section II, pp.  2-3. 
78 USDOC Public Bodies Questionnaire, (Exhibit USA -83), section II, pp. 4 -8. 
79 We note in this respect that although China raised various criticisms as to the amount of time given to 
respond to the Public Bodies Questionnaire, it has stated that "the procedural issues that China raised are not 
ultimately relev ant to the Panel's disposition of China's legal claims under Article 1.1(a)(1)". (China's response 
to Panel question No. 10(a), para. 68).  
80 GOC Public Bodies Questionnaire response, (Exhibit CHN -2). The five investigations for which the GOC 
provided respo nses were Pressure Pipe, Line Pipe, Kitchen Shelving, OCTG, and Steel Cylinders. ( GOC Public WT/DS437/RW  
 
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  Appendix regarding enterprises in which the GOC had either no ownership interest or a minority 
ownership interest, th e GOC indicated that it provided "a substantially complete response in 
respect of two of the investigations at issue".81 
7.41.   The GOC's responses82 separately addressed the general and the specific questions in the 
Public Body Questionnaire and Input Producer App endix. Main elements from the GOC's response 
to the general questions include the following:  
a. Categories of industries and enterprises such as "backbone", "key", "core", "strategic", 
"focus", etc. are not defined legal terms under Chinese law. Where the ter ms are used to 
direct certain policies or measures, the description is normally followed by a list of the 
particular industries, "although the level of precision varies greatly". The GOC identified 
certain industries referred to as "pillar" or "basic" indu stries, including iron and steel as 
"industries in which the GOC at present wishes to maintain a major presence, including 
majority ownership of state -owned enterprises in these sectors, but in which the GOC 
ownership may be reduced as appropriate".83 
b. Regar ding the objectives of the GOC in holding shares in enterprises, the GOC responded 
that "China is a socialist country that maintains a socialist market economy". Further, 
the GOC maintains ownership interests in enterprises "in order to generate an economi c 
return on publicly -owned resources and, more generally, because public ownership of 
commercial enterprises is consistent with the operation of a socialist market economy". 
At the same time, the GOC cited various provisions of Chinese law separating the 
operation of SOEs from the exercise of governmental functions. The GOC highlighted this 
separation with respect to the State -owned Asset Supervision and Administration 
Commission (SASAC), "the entity given responsibility for managing investments in 
state-owned enterprises". In addition, the GOC responded that its economic plans that 
include references to the steel industry "do not relate specifically to the 
government's  ownership interests in particular steel enterprises", but rather "to the steel 
industry a s a whole or to identified segments of the steel industry, without regard to the 
ownership of the relevant enterprises".84 
c. With respect to policies or plans applicable to the industries to which the input producers 
or respondents belong, the GOC identified the Eleventh Five -Year Plan for National 
Economic and Social Development, and the 2005 Iron and Steel Policy. The GOC stated 
that economic and sector specific plans are not self -executing and mainly serve "to 
provide a framework for economic and social dev elopment over the period of the plan" 
and "provide notice of the focus of the GOC's policies over the plan period". The GOC 
stated of the Eleventh Five -Year Plan that "the steel industry was mentioned in several 
places, none of which reflect any binding go als, require the use of public resources to 
implement, or address the specific inputs at issue in this proceeding". Further, "the 
targets set for the steel industry in the 11th Five-Year Plan  were neither compulsory nor 
specific in nature". In respect of the Iron and Steel Policy, the GOC stated that this policy 
"sets forth the expected general direction of the industry, focusing on broader economic 
and public welfare goals rather than identif ying specific actions to be taken by the 
sector, individual companies, or shareholders".85 
                                                                                                                                                  
Bodies Questionnaire response, (Exhibit CHN -2), cover letter, pp. 5 -6; see also China's first written 
submission, paras. 34-35). 
81 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), cover letter, p. 6. The two investigations 
for which the GOC provided additional responses for such enterprises were OCTG and Kitchen Shelving. ( GOC 
Public Bodies Questionnaire response, (Exhibit CHN -2), cover letter, pp. 5 -6; see also China's first written 
submission, paras.  34-35). 
82 We note that the exhibit submitted by China containing the GOC's questionnaire responses appears to 
pertain only to the OCTG investigation and its relevant inputs; however, we understand from the 
parties' arguments and submissions that this reflects the GOC's responses in all investigations in which the 
GOC provided a reply.  
83 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No. 1, pp. 1 -2. 
84 GOC Public Bodies Questionn aire response, (Exhibit CHN -2), response to question No. 2, pp. 3 -12. 
85 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question Nos. 3 and 4, 
pp. 12-16. WT/DS437/RW  
 
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  d. Regarding governmental approval of mergers or restructurings in the industries to which 
the input producers or respondents belong, the GOC stated that government 
authorizations, other than routine permitting and licensing, are not required for these 
types of transactions. However, the GOC noted that "certain investment projects may be 
deemed 'important projects and restricted projects', and require government 'admissio n' 
in order to protect the public interest". The GOC stated that this "admission" process for 
investment projects is applied regardless of whether a company is state owned or 
privately owned. For the steel sector, the GOC further explained that "iron -smelt ing, 
steel-smelting and steel rolling projects were designated as major or restricted projects 
consistent with the concerns expressed in the 11th Five-Year Plan  about excess obsolete 
iron and steel making capacity, and such projects require government 'adm ission'".86 
Regarding the specific role of SASAC in mergers or acquisitions involving the industries 
or enterprises in the Input Producer Appendix, and/or the industries to which 
respondents belonged, the GOC stated that "[t]he SASACs approve numerous merge rs, 
acquisitions, capacity expansions and other investments in their capacity as shareholders 
in state -owned enterprises". However, the GOC was unable to identify specific instances 
of SASAC approval "in light of the vast scope of this question, and in lig ht of the limited 
response time permitted by the Department".87 
7.42.   Main elements of the GOC's responses to specific questions regarding entities in the "Input 
Producer Appendix" include the following:  
a. For majority government -owned enterprises, the GOC referred  to full corporate names 
and addresses, as well as Articles of Association and Capital Verification Reports where 
available, that had been provided in the original investigation.88 
b. For enterprises that were not majority government -owned, the GOC referred to  
corporate names and addresses, as well as Business Registrations, Articles of 
Association, and Capital Verification Reports where available, that had been provided in 
the original investigation. The GOC also referred to ownership structure diagrams 
submit ted in the original investigation in response to questions about the identity of 
company owners, the nature of all outstanding shares of the companies, government 
ownership, and corporate governance of the entities.89  
i. With respect to corporate decision -making, the GOC described the functions of 
shareholders' meetings and boards of directors under the Company Law of the 
People's Republic of China (PRC).90  
ii. Regarding the involvement of the Chinese Communist Party (CCP) with the 
enterprises at issue, the GOC st ated that "the CCP is not a governmental authority" 
but rather "a political party", and that CCP bodies identified in the USDOC's question 
were not "'Government administrative entities', nor are they 'owners' or 'regulators' 
in any sense under Chinese law" . The GOC also reiterated the prohibition under 
Chinese law against the GOC interfering in any ordinary business operations and 
management of a company.91 At the same time, the GOC noted that CCP "primary 
organizations" formed within companies92 are required  under the CCP Constitution 
"to maintain certain core tenants [sic] on behalf of the CCP", which in the GOC's view 
"do not overlap or conflict with the producer entity's decision making process".93  
                                                
86 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to questi on No. 5, pp. 17 -18. 
87 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No. 6, p. 18.  
88 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No. A.1, pp. 20 -21. 
89 GOC Public Bodies Questionnaire res ponse, (Exhibit CHN -2), response to question Nos. A.2 -A.6, 
pp. 26-29. 
90 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question Nos. B.1 and B.2, 
pp. 29 -30. 
91 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No. B.3, pp. 30 -32. 
92 Such "primary organizations" must be formed in companies where there are at least three party 
members. ( GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No. D.1, p. 34).  
93 GOC Public Bodies Ques tionnaire response, (Exhibit CHN -2), response to question No. B.4, pp. 30 -32. WT/DS437/RW  
 
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  iii. The GOC stated that, to the best of its knowledge, "none o f these companies are 
subject to any explicit or implicit obligations or targets regarding production 
quantities of alleged 'raw materials', nor are there any price targets".94 
iv. Regarding mergers and restructuring during the period of investigation, the GOC 
replied that "any government role in any merger or restructuring activity in relation 
to the suppliers at issue, if any, would have had nothing to do with the prices at 
which these companies sell steel rounds or the customers to which these companies 
chose  to sell that product".95  
v. Regarding key persons and senior management of the enterprises at issue, the GOC 
stated that the "CCP Central Organization Department plays no role in the selection 
and monitoring of senior management". Regarding the role of gover nment or 
CCP officials in the enterprises at issue, the GOC stated that government officials are 
prohibited by law in China from concurrently holding a position in an enterprise or 
any other profitmaking organization. Further, "[w]ith respect to CCP offici als, it is not 
possible for the GOC to identify, pursuant to available business records, any 
individual owners, members of the board of directors or senior managers who were 
CCP officials during the [period of investigation]. In addition, the GOC is unable  to 
require the CCP … to provide the information requested by the Department, because 
they are not governmental agencies".96 
7.43.   The GOC submitted responses to the supplemental questionnaires issued by the USDOC in 
documents that have not been submitted for the  record of this compliance dispute.97  
The Public Bodies Memorandum  
7.44.   Following the receipt of responses to its questionnaires, the USDOC placed on the record of 
the 12 Section 129 proceedings at issue the Public Bodies Memorandum, and the accompanying 
CCP M emorandum. These documents were part of the record of earlier Section 129 proceedings 
with respect to a different WTO dispute (DS379).98  
7.45.   In the Public Bodies Memorandum , the USDOC reviewed the Appellate Body's discussion of 
the types of evidence that may a ssist in determining whether an entity is a public body within the 
meaning of Article 1.1(a)(1) of the SCM Agreement. The USDOC noted in particular the 
Appellate  Body's references to whether the government exercises "meaningful control" over an 
entity, whi ch it understood to mean "control related to the possession or exercise of governmental 
authority and governmental functions". In this context, the USDOC considered that "government 
ownership remains an important element of the analysis".99  
7.46.   After reviewing  "the system of governance and state functions in the People's Republic of 
China", the USDOC made the following determinations in the Public Bodies Memorandum for the 
purposes of the United States' domestic countervailing duty law:  
a. China has a constitution al mandate, echoed in China's broader legal framework, to 
maintain and uphold the "socialist market economy", which includes maintaining a 
leading role for the state sector in the economy.  
b. Relevant laws grant the government the authority to use state -invested enterprises 
(SIEs)100 as the means or instruments by which to achieve this mandate.  
                                                
94 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No. B.5, p. 33.  
95 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to questio n No. C.1, p. 33.  
96 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question Nos. D.1 and D.2, 
p. 34.  
97 China's first written submission, para. 36.  
98 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 8. 
99 Public Bodies Memorandum, (Exhibit CHN -1), p. 3.  
100 The USDOC explained that it used the term SIE to refer to enterprises in which the GOC has an 
ownership stake of any size. ( Public Bodies Memorandum, (Exhibit CHN -1), fn 5).  WT/DS437/RW  
 
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  c. The actions taken by the GOC to fulfil its legal mandate in the economic sphere are 
functions which are ordinarily classified as governmental in the legal order of Chin a. 
d. The government exercises meaningful control over certain categories of SIEs in China 
and this control allows the government to use these SIEs as "instrumentalities to 
effectuate the governmental purpose of maintaining the predominant role of the state 
sector in the economy and upholding the socialist market economy".101 
7.47.   The USDOC's finding with respect to the relevant governmental function in China of 
upholding the socialist market economy and maintaining a leading role for the state sector was 
based on inter alia : 
a. provisions of China's constitution describing the "state -owned economy" as "the leading 
force in the national economy", and providing for the dominance of public ownership in 
China's economic system;  
b. Articles 1 and 3 of China's Property Law similarly providing for the purpose of 
maintaining the socialist market order and the dominance of public ownership in the 
economy;  
c. the Law on State -Owned Assets of Enterprises affirming the role of the state in the 
national economy, particularly through t he state -owned economy;  
d. provisions of the measure creating SASAC as the state's representative owner of 
state-assets and regulator of certain SIEs; and  
e. industrial policies such as national and local five -year plans with sector -specific goals and 
objectives .102 
7.48.   With respect to whether the government exercises meaningful control over certain entities 
in China, the USDOC examined what it considered to be "manifold indicia of control indicating that 
SIEs possess, exercise, or are vested with governmental authorit y". In this respect, the USDOC 
made the following factual findings:  
a. The government exercises control through the provision of direct and indirect benefits to 
SIEs.103 This finding was based on inter alia : 
i. A 2011 International Monetary Fund (IMF) Report notin g that "with interest rates 
being held below market levels, loan demand has long been high and banks have 
been forced to ration credit. In these circumstances, banks have preferred to lend to 
SOEs that benefit from implicit state guarantees".  
ii. A 2010 report  on China by the Economist Intelligence Unit noting that "[d]espite 
official orders to transform themselves into truly commercial banks [the five large 
state-owned commercial banks] continue to lend much of their portfolios to the 
state-owned enterprises".  
iii. An Organization for Economic Cooperation and Development  (OECD) Economic 
Survey of China  noting that "lending remains biased towards SOEs" and that 
"state -owned commercial banks are obliged to lend to SOEs that enjoy soft budget 
constraints, often have th eir debts forgiven and are therefore insensitive to changes 
in the price of credit".  
iv. A joint report of the World Bank and the Development Research Center of the State 
Council of China noting that "state enterprise management and government officials 
usuall y support each other – management often accepts informal guidance from 
government officials and, in return, state enterprises are more likely to enjoy 
                                                
101 Public Bodies Memora ndum, (Exhibit CHN -1), pp. 2, 3, 11, and 37.  
102 Public Bodies Memorandum, (Exhibit CHN -1), pp. 6 -11. 
103 Public Bodies Memorandum, (Exhibit CHN -1), pp. 14-16. WT/DS437/RW  
 
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  preferential access to bank finance and other important inputs, privileged access to 
business opportuniti es, and even protection against competition".  
b. The government both incentivizes and demands certain firm behavior in furtherance of 
industry policy goals.104 This finding was based on inter alia : 
i. A 2008 World Bank evaluation of China's Eleventh Five -Year Plan , which notes 
various tools implemented at the microeconomic firm level to achieve policy goals, 
including: project approval; government investment combined with project review 
and permission; production and import licences; and "more indirect instruments such 
as tax incentives, price subsidies, and other kinds of 'favorable policies'".  
ii. Decision No. 40 of the State Council calling for a number of measures to be 
undertaken by central and local authorities in order to meet the policy goals of the 
State. This  Decision is supplemented by an investment catalogue which specifies 
prohibited, restricted, and encouraged investments for all industries and all 
investors.  
iii. Industry -specific plans with detailed implementation measures, including: provisions 
of the Eleven th Five -Year Plan regarding direct government involvement in the iron 
and steel sector; the National Textile and Apparel Eleventh Five -Year Plan; and the 
Eleventh Five -Year Plan for National Economic and Social Development calling for 
increasing the develo pment of important spare parts for the automobile industry.  
c. The government considers ownership levels to be one of its main tools in maintaining 
control over the state sector.105 This finding was based on inter alia : 
i. A 2010 OECD Economic Survey of China noti ng "a shift in policy away from 
encouraging private -sector involvement in all competitive sectors of the economy to 
one of privatizing smaller SOEs in non -strategic sectors while increasing state 
ownership in enterprises deemed to be strategic".  
ii. An interview with SASAC's former chairman provided by the GOC describing "pillar 
industries" as those considered "essential building blocks for industrial development", 
including iron and steel.  
d. Enterprises in the state sector are a primary instrumentality by  which the state seeks to 
manage market competition and market outcomes.106 This finding was based on 
inter alia: 
i. State Council interventions in the telecommunications sector pursuant to which no 
company can enter the market unless it is SIE -controlled.  
ii. A joint report of the World Bank and the Development Research Center of the State 
Council of China noting limits on competition between state -owned and non -state 
parts of certain sectors, and stating that "strong direct ties between the government 
and incumben t SOEs, especially large SOEs, limit the entry and access to resources 
of private firms, hampering the efficient use and allocation of resources and stifling 
entrepreneurship and innovation". The report also describes interventions to achieve 
"market outco mes", for example through government -led mergers.  
iii. The 2006 State Council "Circular on Accelerating the Restructuring of the Industries 
with Production Capacity Redundancy" in response to overcapacity in 
state-dominated sectors, which addressed state contro l over investment in fixed 
assets and initiation of new projects, as well as elimination of production capacity 
redundancy "through selection".  
                                                
104 Public Bodies Memorandum, (Exhibit CHN -1), pp. 16 -20. 
105 Public Bodies Memorandum, (Exhibit CHN -1), pp. 20 -21. 
106 Public Bodies Memorandum, (Exhibit CHN -1), pp. 24-26. WT/DS437/RW  
 
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  e. The supervision of SASAC is a tool of meaningful control over SIEs by the 
government.107 This finding was based on  inter alia : 
i. The 2003 Tentative Measures for the Supervision and Administration of State -Owned 
Assets of Enterprises, which established SASAC for the purposes of meeting "the 
demand of the socialist market economy, to further activate the state -owned 
enter prises , to promote the strategic adjustment of the layout and structure of the 
state-owned economy, to develop and strengthen the state -owned economy , and to 
try to maintain and increase the value of the state -owned assets".  
ii. Article 4 of the Interim Measur es for the Supervision and Administration of the 
Investments by Central Enterprises, which states that "SASAC shall supervise and 
administrate the investment activities of the enterprises, and guide them to establish 
and improve investment decision -making procedures and management systems".  
iii. Measures for the Administration of Development Strategies and Plans of Central 
Enterprises requiring SIEs to formulate a development strategy and plan that shall 
be examined and approved by SASAC  according to " whether or  not it complies with 
the national development planning and industrial policies", and "whether or not it 
complies with the strategic adjustment of the layout and structure of the 
state-owned economy".  
iv. A 2009 review of regulatory reform in China by the OECD  noting that SASAC "does 
not focus exclusively on exercising the state's ownership function but also has 
substantial regulatory responsibilities, including responsibility for restructuring in 
some of the industries where SOEs are now dominant".  
v. Regulations  and regulatory documents issued by SASAC as indicated in GOC 
documents.  
f. The government has control over all appointments in the state sectors, and uses this as 
a means to ensure that industrial policy objectives are being achieved.108 This finding 
was based  on inter alia : 
i. Article 13 of the Tentative Measures for the Supervision and Administration of 
State -Owned Assets of Enterprises, which provides that SASAC has the power to 
appoint SOE managers, board members, and the Supervisory Board members.  
ii. Various sec ondary sources and press reports indicating control by the CCP over 
personnel decisions throughout the state sector.  
iii. Provisions of the 2006 Civil Servant Law providing the legal basis for exchanges of 
civil servants with personnel in SOEs.  
iv. A 2010 OECD eco nomic survey of China noting that "direct control over business 
operations and government control in infrastructure sectors suggest that the line 
between government and the SOEs is still blurred", and that "almost half of the 
chairpersons and more than one  third of chief executive officers of central SOEs were 
appointed by the Central Organization Department of the Communist Party and have 
civil servant status".  
g. Meaningful control is exercised through the presence of CCP groups and committees.109 
This finding  was based on inter alia : 
i. The presence of CCP committees in SIEs, and provisions of the CCP Constitution 
stating that a party committee in SIEs "guarantees and oversees the implementation 
                                                
107 Public Bodies Memorandum, (Exhibit CHN -1), pp. 26-30. (emphasis added ) 
108 Public Bodies Memorandum, (Exhibit CHN -1), pp. 30-33. 
109 Public Bodies M emorandum, (Exhibit CHN -1), pp. 33-36. WT/DS437/RW  
 
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  of the principles and policies of the Party and the state in its own  enterprise … and 
participates in making final decisions on major questions in the enterprise".  
ii. A 2010 OECD economic survey of China noting that CCP committees in SOEs "often 
play an active role in human resources and the strategic decision making of the 
enterprise".  
7.49.   On the basis of the evidence and conclusions summarized above, the Public Bodies 
Memorandum set out conclusions about three categories of Chinese enterprises110: 
a. First, any enterprise in China in which the government has a full or controlling own ership 
interest is a public body because, in the institutional and SIE -focused policy setting of 
China, the government exercises meaningful control over all such enterprises such that 
these enterprises possess, exercise, or are vested with governmental aut hority. In the 
USDOC's view, "these are the enterprises that comprise the state sector in China, which 
the government is mandated to uphold". Further, this determination was intended to 
reflect "the numerous indicia of control … showing that the government  uses SIEs to 
fulfil its mandate to uphold the socialist market economy".  
b. Second, enterprises in China in which the government has significant ownership that are 
also subject to certain government industrial plans may be public bodies. On a 
case-by-case ba sis, if indicia show that these enterprises "are used as instruments by 
the government to uphold the socialist market economy", the USDOC may find such 
enterprises to be public bodies. The circumstances under which the USDOC may find 
such enterprises to be  public bodies "will rest upon additional indicia that show whether 
such SIEs are used as instruments by the government to uphold the socialist market 
economy". Such "additional indicia" include coverage of the relevant industry by 
industrial plans, govern ment appointment of company officials, the presence of 
government or CCP officials on the board or in management, and the existence and role 
of a CCP committee.  
c. Third, enterprises that have little or no formal government ownership are public bodies if 
China's government exercises meaningful control over such enterprises. Such a 
determination would be made on a case -by-case basis in light of indicia such as "a 
significant CCP or state presence on the board, in management or in the enterprises in 
the form of  party committees".  
7.50.   The CCP Memorandum attached to the Public Bodies Memorandum addressed the de jure  
and de facto role that the CCP plays in China's economy and system of governance. The USDOC 
explained that its public body analysis includes an inquiry i nto the role of CCP representatives in 
enterprises "in order to develop sufficient information to enable the Department to determine 
whether the presence and role of any such CCP officials may inform a finding of government 
control over such enterprises".111 The USDOC found the available evidence indicated that "the CCP 
and China's state apparatus are essential components that together form China's 'government' 
[as defined in that memorandum] solely for purposes of the [countervailing duty] law".112  
7.51.   In reachin g its conclusion that the CCP is properly considered "government" within China's 
"party -state" system, the USDOC referred to provisions of China's Constitution, the Constitution of 
the CCP, and other Chinese legislation regarding the role of the CCP.113 The USDOC also relied on 
various secondary sources (including research publications), and provisions of Chinese law where 
relevant, regarding the lack of other political parties permitted to exert political authority within 
China114; "the structure of China's pa rty-state" through geographic entities at various levels and a 
                                                
110 Public Bodies Memorandum, (Exhibit CHN -1), pp. 37 -38. 
111 CCP Memorandum, (Exhibit CHN -1), p. 2. 
112 Public Bodies Memorandum, (Exhibit CHN -1), fn 4, and p. 3 of the CCP Memorandum. The USDOC 
accordingly referred to "China's government" in the Public Bodies Memorandum as including "CCP bodies as 
well as China's ministries, agencies, etc." The USDOC further considered that the term "party -state" is an 
"appropriate characterization of China's system of government, and h ence, of the institutional apparatus that 
governs China, controls its resources, and possesses the authority to engage in governmental activity".  (CCP 
Memorandum,  (Exhibit CHN -1), p. 7).  
113 CCP Memorandum, (Exhibit CHN -1), pp. 9-11. 
114 CCP Memorandum, (Exhib it CHN -1), pp. 6-7. WT/DS437/RW  
 
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  system of "ministerial organizations"115; the influence and authority of the CCP, including over 
appointments to government/state positions, courts, the military, and the media116; and evidence 
of the CCP's particular focus on the economy.117  
7.52.   On the basis of the evidence before it, the USDOC made certain intermediate observations 
in reaching its conclusion that the CCP is properly considered "government" within China's system, 
including:  
a. The CCP and the state are organizationally separate, even though their structures 
generally mirror each other.  
b. The CCP exercises authority over the formal institutions of government at the national 
and local levels.  
c. The CCP makes policies the state then implements and  the CCP directs and supervises 
that implementation through a number of formal and informal tools.  
d. The CCP is particularly concerned with authority over the economy because of the 
importance of economic growth to advancing the cause of socialism.118 
Prelimin ary public body determinations  
7.53.   On 25 February 2016, the USDOC issued a "Preliminary Determination of Public Bodies and 
Input Specificity"119 aimed at "revising the analysis underlying the determinations with regard to 
various production inputs provided for less than adequate remuneration in 12 of the 15 
countervailing duty [] investigations examined in WTO DS437".120  
7.54.   The USDOC made separate pre liminary findings for: (a) the seven cases for which the GOC 
did not provide any response to the Public Body Questionnaire; and (b) the five cases for which 
the GOC did submit a response.  
Seven investigations in which the GOC did not provide a response to the 
Public Body Questionnaire121 
7.55.   The USDOC stated that "[a]s a result of the GOC's failure to participate with regard to the 
[seven] Section 129 proceedings, we preliminarily determine that necessary information, on the 
ownership, management, and control of the input producers at issue is not on the record." The 
USDOC also preliminarily found that "the GOC withheld information that was requested and failed 
to provide information within the deadlines established", and further that "the GOC significantly 
impede d this proceeding". Further, the USDOC "preliminarily determine[d] that an adverse 
inference in selecting from among the facts otherwise available is warranted … because by not 
responding to the public bodies questionnaires, GOC failed to cooperate by not acting to the best 
of its ability to comply with a request for information in these seven Section 129 proceedings".122 
7.56.   The USDOC stated that "the records of the seven Section 129 proceedings include[] the 
Public Bodies Memorandum and CCP Memorandum, and thus  contain factual information on which 
the Department can rely concerning the role played by the GOC in enterprises such as the input 
producers in the seven Section 129 proceedings." In the USDOC's view, "[t]his evidence supports 
an [adverse facts available ] determination that the input producers in the seven Section 129 
proceedings are public bodies."123 
                                                
115 CCP Memorandum, (Exhibit CHN -1), pp. 12 -20. 
116 CCP Memorandum, (Exhibit CHN -1), pp. 20 -29. 
117 CCP Memorandum, (Exhibit CHN -1), pp. 31 -32. 
118 CCP Memorandum, (Exhibit CHN -1), p. 33.  
119 Preliminary Determination on Public Bodies and Input S pecificity , (Exhibit CHN -4). 
120 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 1.  
121 Lawn Groomers, Wire Strand, Seamless Pipe, Print Graphics, Drill Pipe, Aluminum Extrusions, and 
Solar Panels.  
122 Preliminary Determinat ion on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 13.  
123 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 13.  WT/DS437/RW  
 
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  7.57.   On this basis, the USDOC "preliminarily determine[d] as [adverse facts available] that the 
GOC exercised meaningful control over the input producers at issue  in the seven Section 129 
proceedings, such that these enterprises possess, exercise, or are vested with government 
authority". The USDOC therefore found that the input producers in the seven investigations 
constitute "public bodies" within the meaning of Article 1.1(a)(1) of the SCM Agreement.124 
Five investigations in which the GOC submitted responses to the Public Body 
Questionnaire125 
7.58.   In the five cases in which the GOC submitted responses, the USDOC separately 
examined:  (a) enterprises in which the GOC had full or controlling ownership; and (b) enterprises 
in which the GOC had less than majority ownership.  
7.59.   The GOC reported that most of the input producers at issue in these five Section 129 
proceedings were majority -owned by the government. Based on the GOC's  questionnaire 
responses and evidence in the Public Bodies Memorandum, the USDOC "preliminarily determine[d] 
that the GOC meaningfully controlled those input producers that were majority government -owned 
during the relevant [periods of investigation] such that they possess, exercise or are vested with 
government authority". Accordingly, the USDOC preliminary determined that "the majority 
government -owned producers which provided the inputs purchased by the respondents … in the 
five investigations are … 'pub lic bodies' within the meaning of Article 1.1(a)(1) of the 
SCM Agreement".126 
7.60.   The GOC further reported that the government had minority (less than 50%) ownership in 
several input producers. The Public Body Questionnaire had requested information on such 
enterprises concerning ultimate ownership, corporate governance, decision -making, and the extent 
to which the government, CCP, and related entities exerted control or influence over the input 
producers. However, the USDOC considered that "[a]s a result of the GOC's failure to cooperate to 
the best of its ability with regard to the non -majority government -owned input producers … and its 
decision not to respond to all of the questions … for such enterprises … the necessary information 
from the GOC concerning the ownership, management, and control of the input producers at issue 
is not available on the record".127 The USDOC also preliminarily found that "the GOC withheld 
information that was requested of it", and further that "by not responding fully to the 
questionn aires, the GOC significantly impeded this proceeding". As a result, the USDOC "resort[ed] 
to the use of facts otherwise available" and "preliminarily determine[d] that an adverse inference 
is warranted in selecting from the facts otherwise available … beca use by not completely 
responding to the Input Producer Appendix , the GOC failed to cooperate by not acting to the best 
of its ability to comply with a request for information with regard to the non -majority 
government -owned enterprises at issue in the five  investigations".128 
7.61.   Applying an adverse inference in selecting from the facts otherwise available, the USDOC 
referred to the Public Bodies Memorandum with respect to enterprises in which the government 
has significant ownership interest that are also subjec t to certain government industrial plans, as 
well as enterprises that have little or no formal government ownership over which the government 
may exercise meaningful control. In particular, the USDOC drew upon evidence in the Public 
Bodies Memorandum (and accompanying CCP Memorandum) regarding, inter alia , the control or 
influence over enterprises of the government, CCP, and related entities. On this basis, the USDOC 
preliminarily determined that "the relevant input producers are meaningfully controlled by the GOC 
such that they possess, exercise or are vested with government authority". Accordingly, the 
USDOC "preliminarily determine[d] that non -majority government -owned enterprises that 
produced the inputs purchased by the respondents … in the five investi gations are … 'public bodies' 
within the meaning of Article 1.1(a)(1) of the SCM Agreement".129 
                                                
124 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 14.  
125 Pressure Pipe, Line Pipe, Kitchen Shelving, OCTG, and Steel Cylinders.  
126 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), pp. 14 -15.  
127 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 16 . During 
these compliance panel proceedings, China argued that the GOC provided a "substantial portion" of the 
requested entity -specific information in the Kitchen Shelving and OCTG proceedings. (See, e.g. China's first 
written submission, paras. 149 -155).  
128 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 16.  
129 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), pp. 15 -18.  WT/DS437/RW  
 
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  Final public body determinations  
7.62.   The USDOC's final determinations130 summarize the comments made by the GOC in 
response to the USDOC's preliminary determinations as  well as the comments made by 
US petitioners in rebuttal.  
7.63.   Responding to the comments of the parties, the USDOC disagreed with the GOC's comments 
that its approach to the public body issue failed to address the inquiry laid out by the 
Appellate  Body. The US DOC reiterated the relevance of its Public Bodies Memorandum (and 
accompanying CCP Memorandum) as well as its need to rely on facts available due to lack of 
necessary information on record as a result of the GOC's failure to respond fully to the 
questionna ires in the Section 129 proceedings. Accordingly, the USDOC adopted the preliminary 
determinations with respect to public bodies as its final determinations in the Section 129 
proceedings at issue.  
7.2.1.3.3.2   Assessment of the USDOC's Section 129 public body determin ations  
7.64.   China criticizes the USDOC's public body determinations for failing to engage in a 
case-by-case analysis in relation to each of the countervailing duty investigations at issue. In 
particular, China contends that the USDOC should have looked at the input at issue in a given 
investigation, as well as the input producers and the purchasers of that input, to determine 
whether the evidence supported a finding that the provision of that input by those producers to 
those purchasers is a government function .131 In light of this criticism, and bearing in mind our 
finding above as to China's argument on the legal standard under Article 1.1(a)(1), we first assess 
the legal criteria relied upon by the USDOC as they relate to the requirements for a public body 
analysis, followed by an assessment of the evidence relied upon by the USDOC in its public body 
determinations.  
Legal criteria relied upon by the USDOC  
7.65.   As outlined above, the Appellate Body has referred to a variety of criteria and evidence that 
may be releva nt to whether an entity "possesses, exercises or is vested with governmental 
authority". This includes evidence regarding the scope and content of government policies relating 
to the sector in which the investigated entity operates.132 Further, "evidence tha t a government 
exercises meaningful control over an entity and its conduct may serve, in certain circumstances, 
as evidence that the relevant entity possesses governmental authority and exercises such 
authority in the performance of governmental functions" .133 In this regard, the Appellate Body 
distinguished "meaningful control" from mere ownership, noting that "where the evidence shows 
that the formal indicia of government control are manifold, and there is also evidence that such 
control has been exercised in a meaningful way, then such evidence may permit an inference that 
the entity concerned is exercising governmental authority".134  
7.66.   The key evidentiary element relied upon by the USDOC is "meaningful control" by the 
government. In particular, the USDOC cons idered one of its "core findings" (apart from the 
identified government function) to be that "the government exercises meaningful control over 
certain categories of SIEs in China".135 In the Public Bodies Memorandum, relied on in reaching 
this conclusion, th e USDOC found that "in China, certain types of SIEs are public bodies due to the 
government's exercise of meaningful control over the entities given the backdrop of 
China's  political and economic system".136 As part of its analysis, the USDOC made the follow ing 
observations with respect to "meaningful control"137: 
                                                
130 Final Section 129 Determination, (Exhibit CHN -5). 
131 China's first written submission, para. 106.  
132 Appellate Body Report, US – Carbon Steel (India) , para. 4.29 (referring to Appellate Body Report, 
US – Anti-Dumping and Countervailing Duties (China) , para. 317).  
133 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 318. 
134 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 318. 
135 Preliminary Determination on Public Bodies and Input Specificity, (Exhibit CHN -4), p. 9.  
136 Public Bodies Memorandum , (Exhibit CHN -1), p. 3.  
137 Public Bodies Memorandum , (Exhibit CHN -1), pp. 12 -14. WT/DS437/RW  
 
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  a. The USDOC sought to assess "the manifold indicia of government control over the state 
sector, certain industrial sectors and the enterprises that comprise these sectors" in 
order "to determine whether  the government's control is such that the relevant entities 
can be said to possess, exercise or be vested with governmental authority".  
b. The government maintains a primary focus on economic actions in the state sector as a 
means by which to fulfil the iden tified government function.  
c. Various "benefits and protections" granted to the state sector "can be considered one of 
the manifold indicia of control, as they may lead to behind -the-scenes quid pro quo ". 
d. "Perhaps the strongest indicia can be found where the  state can control SIEs' behaviors 
and incentives in order to achieve outcomes that would not have occurred without such 
government intervention and control."  
e. In this regard, the USDOC considered the "manifold indicia or levers of control by the 
government  over the state sector" to include the application of industrial plans, 
government management of competition, and supervision of the state sector through the 
appointment of management and directors.  
7.67.   An additional aspect of the public body analysis emphasi zed by the Appellate Body is a 
requirement in all cases to conduct "a proper evaluation of the core features of the entity 
concerned, and its relationship with government in the narrow sense".138 Although the USDOC did 
not explicitly refer to "core features"  or "characteristics" of SIEs in either the Public Bodies 
Memorandum or its Section 129 determinations, the United States nevertheless argues that the 
USDOC's consideration of "meaningful control" reflected the "core characteristics" of the relevant 
entities, including their relationship with the Chinese government.139 For its part, China submits 
that:  
[T]he defect in the USDOC's public body determinations is that the USDOC focused on 
evidence of government ownership and formal indicia of control to the excl usion of 
other relevant evidence concerning these entities' "core characteristics", including 
evidence supporting the conclusion that there was not a "clear logical relationship" 
between the alleged "government function" identified by the USDOC and the 
entities' conduct under Article 1.1(a)(1).140 
7.68.   With respect to "meaningful control", we note the distinction drawn by the Appellate Body 
with mere "formal indicia of control" that would be insufficient on their own to establish that an 
entity is a public body, s uch as government ownership interest, appointment and nomination of 
directors, and other formal statements of "control".141 In this connection, the Appellate Body 
cautioned against blurring the distinction "between the existence  of control by a government ov er 
an entity, on the one hand, and 'meaningful control', on the other hand".142 This clarification may 
be understood in relation to the Appellate Body's consistent reiteration that "meaningful control" is 
concerned with the government's exercise of control o ver an entity and its conduct.143  
7.69.   The Appellate Body's emphasis on "meaningful control" over the conduct  of an entity may in 
turn relate to the parties' arguments regarding the legal standard under Article 1.1(a)(1) and the 
connection that may be required b etween a broader government function and the financial 
contribution. We concluded above that Article 1.1(a)(1) does not prescribe a particular degree or 
nature of connection that must be established in all cases between a government function and the 
financ ial contribution. We further noted that the USDOC considered relevant aspects of 
                                                
138 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 317.  
139 United States' response to Panel question No. 5, para. 28. The United States further co ntends that 
evidence on the "core characteristics" of the relevant entities "included information on the legal and economic 
environment prevailing in China, as well as laws, regulations, policies, or plans requiring entities to carry out 
their business bas ed upon the needs of the national economy and consistent with government industrial 
policies". (United States' response to Panel question No. 5(a), para. 36 (fn omitted)).  
140 China's response to Panel question No. 5, para. 52.  
141 Appellate Body Report, US – Carbon Steel (India) , para. 4.43.  
142 Appellate Body Report, US – Carbon Steel (India) , para. 4.37. (emphasis original)  
143 Appellate Body Reports, US – Anti-Dumping and Countervailing Duties (China) , para. 318; US – 
Carbon Steel (India) , paras. 4.43 and 4.52.  WT/DS437/RW  
 
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  "meaningful control" to include the general background of Chinese governmental intervention in 
the state sector, and more specifically the application of industrial plans, gov ernment benefits and 
protections provided to SIEs, and supervision over managerial appointments in SIEs. This, in turn, 
formed part of the USDOC's assessment of the investigated entities in relation to the identified 
government function of upholding and ma intaining the socialist market economy.  
7.70.   In our view, the question of "meaningful control" is inherently specific to particular factual 
circumstances, and the existence of such control may be established through a variety of 
potentially relevant considerat ions that may be cumulatively assessed by an investigating 
authority. The extent to which the particular conduct of entities is relevant in the context of 
"meaningful control" may depend on a number of factors, including the particular government 
function identified by an investigating authority and the evidence in its investigation. Further, 
although the Appellate Body has underscored the importance of considering the "core 
characteristics" of certain entities, this does not mean that such consideration mu st be explicit. In 
this case, the United States argues that the relevant considerations were addressed in the 
USDOC's consideration of "meaningful control". China's contention regarding the failure to consider 
the "core characteristics" of the entities con cerned rests on the same premise as its criticism of the 
USDOC's assessment of meaningful control, namely the alleged lack of a "clear logical connection" 
between the identified government function and the particular conduct of providing inputs. Indeed, 
the parties appear to concur that the "core characteristics" of an entity may be established 
indirectly through other aspects of the public body analysis.144 
7.71.   In the present case, we consider the USDOC's assessment of "meaningful control" to be 
consonant with t he obligation to have due regard for "the core characteristics and functions of the 
relevant entity, its relationship with the government, and the legal and economic environment 
prevailing in the country in which the investigated entity operates".145 Ultimat ely, an investigating 
authority examining meaningful control must answer the substantive legal question of whether an 
entity exercises, possesses, or has been vested with government authority. As stated by the 
Appellate Body, " [t]his substantive standard  should not be confused with the evidentiary standard  
required to establish that an entity is a public body within the meaning of the SCM Agreement."146  
7.72.   Thus, as an initial matter, we find that China has failed to demonstrate that the USDOC 
misconstrued the c oncept of "meaningful control" and its relevance to the substantive legal 
standard for a public body inquiry, and especially with respect to the relevance of the particular 
environment in which investigated entities operate. Having reached this conclusion,  we now turn 
to the USDOC's determinations in relation to the evidentiary standard of a public body analysis, 
and particularly whether the USDOC adequately took into account and explained how factual 
evidence supported its public body determinations .  
Evidence relied upon by the USDOC  
7.73.   The evidence relied upon by the USDOC in its public body determinations consisted of 
information in the Public Bodies Memorandum (including the CCP Memorandum), and information 
received by the USDOC in the course of the invest igation.  
Public Bodies Memorandum  
7.74.   The USDOC placed substantial reliance on evidence in the Public Bodies Memorandum, 
having determined that the GOC did not provide sufficient information in response to 
questionnaires and that an "adverse inference in selec ting from among the facts otherwise 
available is warranted".147 To recall, the Public Bodies Memorandum set out various factual 
findings along with supporting evidence from a variety of sources, which addressed governmental 
control through the provision of b enefits to SIEs and influence over firm behaviour in furtherance 
of industry policy goals.148 The Public Bodies Memorandum contained further findings with respect 
to government ownership as one of the main tools of the GOC in maintaining control over the sta te 
                                                
144 China's response to Panel question No. 5, para. 49; United States' response to Panel question 
No. 5(b), para. 42.  
145 Appellate Body Report, US – Carbon Steel (India) , para. 4.29.  
146 Appellate Body Report, US – Carbon Steel (India) , para. 4.37. (emphasis o riginal)  
147 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), pp. 13 and 16.  
148 Public Bodies Memorandum, (Exhibit CHN -1), pp. 14-20.  WT/DS437/RW  
 
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  sector, in which enterprises are an instrumentality to manage market outcomes.149 In addition, the 
Public Bodies Memorandum described government supervision over SIEs and control over 
appointments in the state sectors150, as well as the exercise of governme ntal control through the 
presence of CCP groups and committees.151 The CCP Memorandum contained evidence related to 
the de jure  and de facto role that the CCP plays in China's economy and system of governance, 
including its role in implementing government policy through a number of formal and informal 
tools.152 
7.75.   China has stated that it "does not believe that all of the factual evidence set out in the 
Public Bodies Memorandum and the CCP Memorandum is irrelevant to the public body inquiry".153 
China goes on to s pecifically criticize the absence of any "positive evidence on the record before 
the USDOC to the effect that China's industrial plans and policies relating to the input producers at 
issue dictated to whom they should sell their product and at what price".154 China thus argues 
that, "[a]t most, the evidence in the Public Bodies Memorandum and the CCP Memorandum 
constitutes evidence of 'mere ownership and control' by the GOC, without any evidence that such 
control has been exercised in a 'meaningful way' over the conduct that is the subject of the 
financial contribution inquiry."155 
7.76.   The Public Bodies Memorandum is broadly concerned with the interventions by the Chinese 
government (including the CCP) in firm behaviour and market outcomes, with particular emphasis 
on governmental influence over SIEs through commercial incentives and benefits, industrial 
policies, and supervisory control. At the same time, the Public Bodies Memorandum contains 
limited specific evidence and analysis of the sectors at issue in the Sect ion 129 proceedings, and 
the particular conduct of providing inputs or other conduct at the firm level.  
7.77.   For example, with regard to the steel industry, the Public Bodies Memorandum refers to the 
following:  
a. a mid -term evaluation of China's Eleventh Five-Year Plan by the World Bank, which 
stated that, in the steel industry, "government action has gone far beyond licensing" to 
include organizing "the work of dismantling steel making devices and melting them in 
furnaces"156; 
b. a reference to the steel industry as a "pillar industry" by SASAC's former chairman, 
explaining that such industries are considered "essential building blocks for industrial 
development"157;  
c. a reference to the iron and steel sector in China as "an example of an industry where 
direct government  involvement in firm behavior is explicitly contemplated by the 
GOC's  industry plans"158; and  
d. an example of a government -influenced merger of a private steel company with "a large, 
financially unstable SIE created through previous mergers".159 
7.78.   With regard to t he conduct of providing inputs, or other conduct at the firm level, the Public 
Bodies Memorandum refers to the following:  
                                                
149 Public Bodies Memorandum, (Exhibit CHN -1), pp. 20 -21 and 24 -26. 
150 Public Bodies Memorand um, (Exhibit CHN -1), pp. 26-33. 
151 Public Bodies Memorandum, (Exhibit CHN -1), pp. 33-36. 
152 CCP Memorandum, (Exhibit CHN -1), p. 33.  
153 China's response to Panel question No. 6(a), para. 53.  
154 China's response to Panel question No. 6(a), para. 58.  
155 China's response to Panel question No. 6(a), para. 59.  
156 Public Bodies Memorandum, (Exhibit CHN -1), fn 72.  
157 Public Bodies Memorandum, (Exhibit CHN -1), fn 83.  
158 Public Bodies Memorandum, (Exhibit CHN -1), p. 22 (with specific reference to provisions of the  Order 
of the National Development and Reform Commission (No. 35) (2005), Development Policies for the Iron and 
Steel Industry regarding production scales, investments, technologies, products, and production locations, 
including for specific enterprises).  
159 Public Bodies Memorandum, (Exhibit CHN -1), p. 25.  WT/DS437/RW  
 
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  a. the "disproportionate share of resources that SIEs receive relative to other types of 
enterprises", including preferential access to " key raw material inputs" and "other 
important inputs", as evidenced by a World Bank Report160; and  
b. World Bank descriptions of industrial policy tools under the Eleventh Five-Year Plan that 
"are implemented at the microeconomic, firm level", including project  approval, 
government investment, and production and import licences.161 
7.79.   We consider the evidence in the Public Bodies Memorandum and CCP Memorandum to be 
relevant to the USDOC's public body analysis, particularly regarding the relationship of entities 
with the government, the prevailing legal and economic environment in which the entities operate, 
the scope and content of government policies in the relevant sector, and the question of 
"meaningful control" by the government.162 
Public Body Questionnaire  
7.80.   Apart f rom the more general information in the Public Bodies Memorandum and the 
CCP Memorandum, another aspect of the factual basis for the USDOC's public body determinations 
is the information requested and provided in the course of the USDOC's investigation.  
7.81.   To recall, the USDOC asked general questions pertaining to the following matters for all 
investigated entities:  
a. An explanation of different categories of industries and enterprises, especially as 
enumerated in certain five -year plans, sector -specific industr ial plans, provincial and 
local development and industrial plans, and other planning documents, as well as 
whether enterprises or industries that produce the input at issue are categorized as 
such.  
b. The objectives of the GOC in holding shares in the enterpr ises, as well as whether those 
objectives are defined in a policy or law, and an explanation of any government 
ownership policy for enterprises or industries to which the respondents belonged.  
c. Coverage of the relevant industries and producers by any five -year plans, 
industry -specific plans, investment guides, or other policy documents relevant to the 
period of investigation.  
d. Whether the relevant industries or producers are subject to governmental approval for 
mergers, restructurings, or capacity additions, including the process of approval and 
whether such approval is linked to the industry of the input at issue.  
e. Whether SASAC or another entity has approved mergers, acquisitions, capacity 
additions, or reductions in the relevant enterprises or industries.  
7.82.   In the responses that were provided in five investigations, the GOC generally emphasized 
the non -compulsory nature of industrial plans and policies (which set targets and guidelines rather 
than binding requirements). Further, while the GOC recognized the eco nomic policy goals 
underlying its ownership interests in enterprises, it emphasized the legal insulation of business 
operations from the exercise of government functions. The GOC also responded that its approval of 
mergers or restructurings in the relevant  industries consists of routine permitting and licensing, 
although an "admission" process is applied for projects of public interest, regardless of whether the 
entity is privately or state -owned. The GOC was unable to identify specific instances of SASAC 
approval given what it considered to be the vast scope of the question and limited time to 
respond.163  
                                                
160 Public Bodies Memorandum, (Exhibit CHN -1), p. 15.  
161 Public Bodies Memorandum, (Exhibit CHN -1), p. 18.  
162 Appellate Body Reports, US – Anti-Dumping and Countervailing Duties (China) , para. 317; US – 
Carbon Steel (India) , para. 4.29.  
163 GOC Public Bodies Questionnaire response, (Exhibit CHN -2). WT/DS437/RW  
 
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  7.83.   The USDOC also sent respondents an Input Producer Appendix with specific questions 
concerning the non -majority government -owned enterprises that produced i nputs purchased by 
respondent companies in the 12 investigations at issue, which requested information on various 
aspects of corporate organization, ownership, decision -making, and the role of the CCP for these 
input producers.164 While it provided governing  laws on corporate organization, ownership, and 
decision -making in response, the GOC disputed that the CCP is a governmental authority and 
asserted that the activities of its various bodies do not extend to the day -to-day operations of 
businesses in specif ic industries.165 The GOC reported that, to the best of its knowledge, "none of 
these entities have obligations that they are required to carry out on behalf of the government 
that have any relationship to the provision of inputs"166, nor were any of these com panies subject 
to obligations regarding "production quantities of raw materials" or "price targets".167 For the 
questions concerning the government role in restructuring the entities at issue and their history of 
government ownership, the GOC responded that "any government role in any merger or 
restructuring activity in relation to the suppliers at issue, if any, would have had nothing to do with 
the prices at which these companies sell steel rounds or the customers to which these companies 
chose to sell that  product".168 Finally, regarding key persons and senior management of the 
enterprises at issue, the GOC responded that the "CCP Central Organization Department plays no 
role in the selection and monitoring of senior management", and that government officials  are 
prohibited by law in China from concurrently holding a position in an enterprise or any other 
profitmaking organization.169 
7.84.   Based on the foregoing, we consider that much of the information solicited through the 
public body questionnaires corresponds to material in the Public Bodies Memorandum, and would 
complement a general factual framework addressed in the Public Bodies Memor andum with 
information specific to relevant entities or industries in the Section 129 proceedings at issue here.  
7.85.   First, the USDOC sought extensive information regarding levels of government ownership 
and governmental involvement in the selection of direct ors with respect to the investigated 
entities. For non -majority government -owned enterprises in particular, the USDOC sought 
extensive information regarding decision -making, the selection of "key persons", and the 
enterprises' ownership history.170  
7.86.   Second, the USDOC inquired about the applicability of government policies (including 
industrial policies and plans discussed in the Public Bodies Memorandum) to specific entities and 
industries at issue in the investigation.171 In the Section 129 proceedings at issu e, the USDOC 
inquired about the applicability of such policies for all entities under investigation.  
7.87.   Third, the USDOC requested entity -specific information relevant to the public body inquiry 
concerning key decision -making on a variety of matters, includi ng appointment of managers, 
investments, production, financing, and mergers.172 
7.88.   Fourth, the USDOC posed a few questions that appear to indirectly address the conduct of 
the investigated entities and encompass the provision of inputs. For example, the USDOC a sked 
whether non -majority government -owned entities were required to carry out any obligations on 
behalf of the government (including the CCP), as well as whether there were "any explicit or 
implicit obligations or targets regarding the prices or productio n quantities of raw materials". In 
                                                
164 USDOC Public Bodies Questionnaire, (Exhibit USA -83), section II, pp. 4 -8. 
165 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No s. B.3 and B.4, 
pp. 31 -33. 
166 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No. B.4, 
pp. 32-33. 
167 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question No. B.5, p. 33.  
168 GOC Public Bodies Questionn aire response, (Exhibit CHN -2), response to question Nos. C.1, C.2, and 
C.3, p. 33.  
169 GOC Public Bodies Questionnaire response, (Exhibit CHN -2), response to question Nos. D.1 and D.2, 
p. 34.  
170 Although the Appellate Body has referred to these as "mere 'for mal indicia of control'" that by 
themselves "do not provide a sufficient basis" for a public body finding, it also stated that such indicia "are 
certainly relevant to the question at issue". (Appellate Body Report, US – Carbon Steel (India) , para. 4.43).  
171 As stated by the Appellate Body, "evidence regarding the scope and content of government policies 
relating to the sector in which the investigated entity operates may inform the question of whether the conduct 
of an entity is that of a public body". (Appe llate Body Report, US – Carbon Steel (India) , para. 4.29).  
172 United States' response to Panel question No. 8(a), para. 64.  WT/DS437/RW  
 
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  the investigations in which the GOC provided any response to the questionnaires, it did not 
indicate that such obligations or requirements existed.173 
7.89.   In our view, the information requested by the USDOC in the Section 129 p roceedings at 
issue is relevant to establishing that an entity possesses, exercises, or is vested with governmental 
authority. In particular, the requested entity -specific evidence included formal indicia of 
governmental control over the relevant entities,  as well as the scope and content of government 
policies relating to the investigated entities, which would be relevant in an analysis of whether the 
government exercised meaningful control over the entities and their conduct.  
7.90.   Having considered the evidenc e solicited and relied upon, as well as the legal criteria applied 
by the USDOC, we now turn to China's arguments regarding the USDOC's alleged failure to 
consider information provided by the GOC.  
7.2.1.3.3.3   Whether the USDOC failed to consider relevant evidence on t he record  
7.91.   China argues that the USDOC ignored evidence that was in conflict with its public body 
determinations. We note that China's arguments in this regard relate only to those investigations 
in which the GOC cooperated by submitting information in resp onse to the USDOC's requests. 
Therefore, these arguments are relevant only in connection with the five investigations in which 
such information was provided by the GOC.174  
7.92.   China refers to three types of information that it provided and that it asserts the U SDOC 
ignored.  
7.93.   First, China argues that the USDOC ignored explanations by the GOC that the industrial 
plans referenced in the Public Bodies Memorandum do not indicate that the provision of inputs, 
generally, or the provision of the steel inputs at issue, s pecifically, is a government function. China 
also takes issue with the USDOC's failure to discuss the relevance of provincial and municipal plans 
provided by the GOC, as well as the GOC's explanation of the nature and purpose of such plans.175 
7.94.   Second, China argues that the USDOC ignored evidence that SIEs are legally insulated from 
governmental interference in day -to-day operational matters. In this regard, China cites 
explanations to the USDOC that SASAC was established on the basis of separating government 
administration from enterprise management, and that relevant provisions of the instrument 
establishing SASAC explicitly set out this separation of functions, as does China's 2008 Law on 
State -Owned Assets of Enterprises. China criticizes the USDOC's dismis sal of such evidence of the 
autonomy of SIEs176, as well as the GOC's references to China's Working Party Report 
commitments that SOEs would make "purchases and sales based solely on commercial 
considerations" and that China "would not influence, directly or  indirectly, commercial decisions on 
the part of state -owned or state -invested enterprises, including on the quantity, value or country 
of origin of any goods purchased or sold".177 
7.95.   Third, China argues that the USDOC ignored all entity -specific information p rovided by the 
GOC, particularly in respect of two investigations in which it was "able to prepare a substantially 
complete response".178 Apart from the claimed burden of responding for a large number of 
upstream suppliers regarding detailed corporate inform ation for the period of investigation, China 
criticizes the USDOC's failure to address its response that none of the input suppliers at issue was 
                                                
173 Specifically, regarding whether non -majority government -owned entities were required to carry out 
any obligations on behalf of the government (including the CCP), the GOC responded that it did not have 
knowledge of any such obligations that have any relationship to the provision of inputs.  (GOC Public Bodies 
Questionnaire response, (Exhibit CHN -2), response to question No. B.4, p. 33) . 
174 Pressure Pipe, Line Pipe, Kitchen Shelving, OCTG, and Steel Cylinders.  
175 China's first written submission, paras. 113 -127; second written submission, paras. 92 -94. 
176 China's first written submission, paras. 138 -139 (noting that the USDOC did acknowledg e this 
insulation in the Public Bodies Memorandum, but that "[t]he USDOC immediately dismisses the relevance of 
this provision … by asserting that 'the enterprises that SASAC supervises are not insulated from the control and 
influence of the government'").  
177 China's first written submission, paras. 128 -144 (quoting GOC Public Bodies Questionnaire response, 
(Exhibit CHN -2), p. 6 ). 
178 OCTG and Kitchen Shelving. (GOC Public Bodies Questionnaire response, (Exhibit CHN -2), p. 6; 
China's first written submission, para. 152).  WT/DS437/RW  
 
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  required to sell inputs to downstream producers on behalf of the GOC. More generally, China 
criticizes the lac k of any reference in the USDOC's determinations to any of the entity -specific 
information that was provided in the two investigations at issue.179 China refers specifically to the 
GOC's explanation that none of the input suppliers at issue was required to s ell inputs to 
downstream purchasers on behalf of the GOC, as well as the USDOC's failure to analyse 
company -specific documents it requested in order to determine whether any of the non -majority 
government -owned enterprises in Kitchen Shelving and oil count ry tubular goods  (OCTG) had been 
vested with government authority in relation to the provision of inputs.180  
7.96.   The United States contends that the USDOC "considered all of the information provided by 
the GOC in the five investigations" in which the GOC respon ded to questionnaires from the 
USDOC.181 The United States cites the Public Bodies Preliminary Determination in which the 
USDOC outlines the exchange of information with the GOC, particularly the information regarding 
the level of the GOC's ownership interes t in producers during the respective periods of 
investigation.182 The United States further cites the USDOC's responses to GOC comments in its 
Public Bodies Final Determination, in which it refers to "incomplete responses" to its questionnaires 
and states th at where information was provided it "considered the information submitted by the 
GOC and relied on that information to determine that the relevant entities were public bodies".183 
Further, the United States responds that the USDOC in fact discussed many of the policies, laws, 
and instruments that China claims were ignored, and that China's argument simply amounts to 
disagreement with the weight the USDOC gave to information and explanations provided by the 
GOC.184 
7.97.   We note in this regard the United States' cont ention that the USDOC's determinations "were 
based on the totality of the evidence on the record" and that "China attempts to support its 
arguments by focusing narrowly on individual documents on the record of the section 129 
proceedings."185 We further bear  in mind that:  
"[W]hen an investigating authority relies on the totality of circumstantial evidence, 
this imposes upon a panel the obligation to consider, in the context of the totality  of 
the evidence, how the interaction  of certain pieces of evidence may  justify certain 
inferences that could not have been justified by a review of the individual pieces of 
evidence in isolation." In addition, if an investigating authority explains that the 
totality of the evidence supports the conclusion reached, a panel mu st undertake a 
critical examination of whether, in the light of the evidence on record, the 
investigating authority's conclusion was reasoned and adequate.186  
7.98.   Accordingly, we must determine whether the USDOC's determinations were supported by 
reasoned and a dequate explanations in light of information provided by respondents in the course 
of the investigation, taking into account the totality of the evidence upon which the USDOC relied. 
We bear in mind our role as the reviewer of an agency decision, rather th an as the initial trier of 
fact, and that we may not substitute our judgment for that of the investigating authority. 
Moreover, we do not consider that the USDOC was required to address every piece of evidence on 
its record in reaching its determinations, subject to the requirement that the conclusions reached 
must be reasoned and adequate, including explanations as to why alternative explanations and 
interpretations of the record evidence were rejected.187 
7.99.   In our view, China's argument regarding information allegedly ignored by the USDOC 
generally relate to the weight to be accorded to certain evidence, the closeness of the connection 
that must be demonstrated in relation to a particular financial contribution, and the inferences 
drawn by the USDOC in light o f insufficient responses from the GOC.  
                                                
179 China's first written submission, paras. 145 -156. 
180 China's first written submission, paras. 152 -153. 
181 United States' response to Panel question No. 9, para. 71.  
182 United States' response to Panel question No. 9, paras. 72 -74. 
183 United State s' response to Panel question No. 9, paras. 75 -79 (quoting Final Section 129 
Determination, (Exhibit  CHN-5), p. 5). (emphasis omitted)  
184 United States' response to Panel question No. 9, paras. 78 -85. 
185 United States' first written submission, para. 60.  
186 Appellate Body Report, Japan – DRAMs (Korea) , para. 131. (emphasis original; fn omitted)  
187 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 93.  WT/DS437/RW  
 
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  7.100.   We are not persuaded that the lack of explicit discussion of the GOC's argument regarding 
the significance of industrial plans (including provincial and municipal plans) or entity -specific 
information undermines the USDOC's determination made in light of the totality of the evidence on 
the record. In this case, the USDOC noted the GOC's contentions that the questions asked during 
the investigation were not calculated to elucidate whether input suppliers are public bod ies, and its 
position that the USDOC should have sought evidence that the provision of a particular input is a 
government function that particular enterprises were vested with authority to perform.188 In 
response, the USDOC stated in its final determinations  that it was relying, as it had in the 
preliminary determinations, on information in the Public Bodies Memorandum. We do not consider 
that it was obligated to repeat the evidence in the Public Bodies Memorandum upon which it based 
its determinations. Moreo ver, we consider that the USDOC referred to specific aspects of the 
evidence and analysis in the Public Bodies Memorandum in its preliminary Section 129 
determinations in addressing issues of meaningful governmental control about which the GOC had 
provided  information in its responses.189 Furthermore, the USDOC addressed several of the 
GOC's  criticisms in its final Section  129 determinations, including by referring to the evidence 
underlying its conclusion that certain SIEs are used "as instrumentalities to effectuate the 
governmental purp ose of maintaining the predominant role of the state sector of the economy and 
upholding the socialist market economy".190 The USDOC also stated that incomplete responses by 
the GOC necessitated the use of facts available that "will often be less ideal than the information 
requested".191 
7.101.   In this regard, we recall that China has not made any claim under Article 12.7 of the 
SCM Agreement in relation to the USDOC's reliance on facts available, or its findings that the GOC 
provided insufficient information in respo nse to the USDOC's questionnaires. Rather, China claims 
that the USDOC applied the wrong legal standard concerning the connection between the identified 
government function and the provision of inputs by the investigated entities.192 We have rejected 
China's  position on the legal standard under Article 1.1(a)(1) regarding any required degree or 
nature of connection between a government function and financial contribution. Thus, to the 
extent that the USDOC allegedly ignored responses from the GOC asserting su ch a legal 
requirement, China's arguments are insufficient to demonstrate that the USDOC's determinations 
are inconsistent with Article 1.1(a)(1). Moreover, given our findings as to the relevance of both the 
legal criteria and evidence relied upon by the U SDOC, we do not consider that the USDOC acted 
inconsistently with Article 1.1(a) by failing to engage explicitly with information that was provided 
by the GOC that may not have been supportive of the USDOC's ultimate findings.193  
7.102.   Based on the above considerations, we are similarly unpersuaded that the USDOC's public 
body determinations are inconsistent with Article 1.1(a)(1) for failing to engage with evidence 
regarding the legal insulation of SIEs' day -to-day business from adminis trative functions. Although 
the GOC submitted information regarding SASAC and Chinese laws on state -owned companies, we 
recall that these are discussed in the Public Bodies Memorandum, particularly with respect to the 
capability of SASAC to supervise busin ess and investment plans, corporate and sectoral 
                                                
188 Final Section 129 Determination , (Exhibit CHN -5), p. 3 (Lawn Groomers, Kitchen S helving, Wire 
Strand, Print Graphics, Aluminum Extrusions, and Steel Cylinders determinations), p. 3 (Seamless Pipe 
determination), and p. 4 (Pressure Pipe, Line Pipe, OCTG, and Solar Panels determinations).  
189 Preliminary Determination on Public Bodies and Input Specificity, (Exhibit CHN -4), pp. 14 -17. 
190 Final Section 129 Determination , (Exhibit CHN -5), p. 5 (Lawn Groomers, Kitchen Shelving, Wire 
Strand, Print Graphics, Aluminum Extrusions, and Steel Cylinders determinations), p. 5 (Seamless Pipe 
determination), and p. 7 (Pressure Pipe, Line Pipe, OCTG, and Solar Panels determinations) (referring to Public 
Bodies Memorandum , (Exhibit CHN -1), p. 37). See also Preliminary Determination on Public Bodies and Input 
Specificity, (Exhibit CHN -4), p. 9.  
191 Final Section 129 Determination , (Exhibit CHN -5), p. 5 (Lawn Groomers, Kitchen Shelving, Wire 
Strand, Print Graphics, Aluminum Extrusions, and Steel Cylinders determinations), p. 5 (Seamless Pipe 
determination), and p. 7 (Pressure Pipe, Line Pipe, OCTG, and Solar Panels determinations).  
192 See, e.g. China's response to Panel question Nos. 51 -53. 
193 We note that China's arguments concern the lack of explicit  reference in the USDOC's determinations 
to the information provide d by the GOC in response to questionnaires. (China's first written submission, 
para. 159; response to Panel question No. 10, para. 72; and comments on the United States'  response to Panel 
question No. 9, para. 23). In this regard, we note that the Public B odies Memorandum addressed various 
provisions of the instruments and policies discussed in the GOC's responses that China contends the USDOC 
failed to consider. ( Public Bodies Memorandum, (Exhibit CHN -1), pp. 7, 17, 19, 22 -23, 27, and 33 (referring to 
industrial plans, the Eleventh Five -Year Plan, Decision No. 40 of the State Council, the Iron and Steel Policy, 
the instrument establishing SASAC, the Law on State -Owned Assets of Enterprises, and the Company Law)).  WT/DS437/RW  
 
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  restructurings, and appointing management and board members.194 The fact that the evidence 
referred to by China may have supported a conclusion contrary to that reached by the USDOC is 
insufficient to demonstr ate that the USDOC's determinations are inconsistent with 
Article  1.1(a)(1). To conclude otherwise would require us to substitute our judgment for that of the 
investigating authority in making determinations based on consideration of the totality of the 
evidence before it. This is particularly the case in an analysis of "meaningful control" in which, "in 
its consideration of evidence, an investigating authority must 'avoid focusing exclusively or unduly 
on any single characteristic without affording due con sideration to others that may be relevant'."195  
7.103.   For the reasons set out above, we therefore find that China has not demonstrated that the 
USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement for having failed to 
consider relevant evidence on the record.  
7.2.1.3.3.4   Conclusion on China's "as applied" claim under Article 1.1(a)(1) of the 
SCM Agreement  
7.104.   The USDOC relied upon the evidence and analysis discussed above to reach its conclusion 
that "certain state -invested enterprises are used 'as instrumentali ties to effectuate the 
governmental purpose of maintaining the predominant role of the state sector of the economy and 
upholding the socialist market economy'".196 The conclusions reached by the USDOC in this respect 
were based on its analysis of "meaningful  control" as evidence that investigated entities exercise, 
possess, or have been vested with governmental authority to perform a government function. We 
found that the USDOC did not misconstrue the substantive legal standard for a public body inquiry 
in its analysis. Moreover, within this analytical framework, we found that the evidence in the Public 
Bodies Memorandum and CCP Memorandum was relevant to the public body analysis, and that the 
USDOC requested information concerning all investigated entities th at would be relevant to 
establishing that a particular entity possesses, exercises, or is vested with governmental authority 
to perform a government function.  
7.105.   We note that the USDOC's approach was guided by the categories of enterprises based on 
the level  of government ownership set out in the Public Bodies Memorandum, as the USDOC 
sought different entity -specific information according to these different categories. In our view, the 
Public Bodies Memorandum and the USDOC's determinations situate "governmen t ownership" 
within "the institutional and SIE -focused policy setting of China"197 and the manifold indicia of 
control set out therein. Therefore, we do not consider that the USDOC's determinations were 
based on "mere ownership or control over an entity by a  government, without more "198, given the 
legal analysis and broader factual background upon which those determinations were based.  
7.106.   For the reasons set out above, we reject China's position regarding the applicable legal 
standard insofar as it would require a  particular degree or nature of connection between an 
identified government function and the financial contribution in question. We further find that the 
USDOC's determinations were based on relevant legal criteria and evidence, and that China has 
not demo nstrated that the USDOC acted inconsistently with Article 1.1(a)(1) by failing to consider 
relevant evidence on the record.  
7.107.   We thus conclude that China has not demonstrated that the United States acted 
inconsistently with Article 1.1(a)(1) of the SCM Agre ement in the Pressure Pipe, Line Pipe, Lawn 
                                                
194 We note an analogous situation in another public body case concerning a contention by the 
Government of India that certain entities had a particular status under Indian law leading to "enhanced 
autonomy" and "freedom in its day -to-day operations". In that case, the Appellate Body faulted the panel  for 
failing to consider "whether the USDOC  properly assessed the implications of the status of the NMDC in the 
legal order of India", based on citations and explanations made by the USDOC itself. (Appellate Body Report, 
US – Carbon Steel (India) , paras. 4 .40-4.41 (emphasis original)).  
195 Appellate Body Report, US – Carbon Steel (India) , para. 4.20 (quoting Appellate Body Report, US – 
Anti-Dumping and Countervailing Duties (China) , para. 319).  
196 Final Section 129 Determination , (Exhibit CHN -5), p. 5 (Lawn Gr oomers, Kitchen Shelving, Wire 
Strand, Print Graphics, Aluminum Extrusions, and Steel Cylinders determinations), p. 5 (Seamless Pipe 
determination), and p. 7 (Pressure Pipe, Line Pipe, OCTG, and Solar Panels determinations) (referring to Public 
Bodies Memo randum , (Exhibit CHN -1), p. 37).  
197 Preliminary Determination on Public Bodies and Input Specificity, (Exhibit CHN -4), p. 9.  
198 Appellate Body Report, US – Carbon Steel (India) , para. 4.10. (emphasis added)  WT/DS437/RW  
 
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  Groomers, Kitchen Shelving, OCTG, Wire Strand, Seamless Pipe, Print Graphics, Aluminum 
Extrusions, Steel Cylinders, and Solar Panels Section 129 proceedings .  
7.2.2   China's "as such" claim under Article 1.1(a)(1) of th e SCM Agreement in relation 
to the Public Bodies Memorandum  
7.108.   In addition to its claim that the USDOC's public body determinations in the individual 
Section  129 proceedings are inconsistent with Article 1.1(a)(1) of the SCM Agreement, China also 
claims that the Public Bodies Memorandum itself is a measure inconsistent "as such" with Article 
1.1(a)(1).  
7.2.2.1   Main arguments of the parties  
7.109.   China considers that the Public Bodies Memorandum is inconsistent "as such" with 
Article  1.1(a)(1) of the SCM Agreement because i t lays out the analytical framework that the 
USDOC will apply prospectively when there is an allegation that a commercial entity in China is a 
public body.199 According to China, the Public Bodies Memorandum does not contemplate the 
USDOC examining whether t he entity in question performs a governmental function when 
engaging in the conduct that is the subject of the financial contribution inquiry and therefore will 
necessarily lead to determinations that are inconsistent with Article 1.1(a)(1) every time it i s 
applied in a given case.200  
7.110.   The United States contends that the Public Bodies Memorandum is not a measure 
susceptible to WTO dispute settlement.201 The United States further argues that Article 21.5 of the 
DSU precludes China from bringing a claim against t he Public Bodies Memorandum because it is 
not a measure taken to comply in this dispute and China could have challenged the Public Bodies 
Memorandum in the original proceeding, but opted not to do so.202 The United States also argues 
that the Public Bodies M emorandum is not inconsistent "as such" with Article 1.1(a)(1) because it 
is not a "rule or norm of general or prospective application"203 and because it does not necessarily 
result in an inconsistency with Article 1.1(a)(1).204  
7.2.2.2   Whether the Public Bodies Memo randum is a challengeable measure within the 
scope of the Panel's jurisdiction  
7.111.   With respect to "measures" that can be challenged in WTO dispute settlement, we recall 
that:  
"[I]n principle, any act or omission attributable to a WTO Member can be a measure 
of that Member for purposes of dispute settlement proceedings". The scope of 
measures that can be challenged in WTO dispute settlement is therefore broad. As a 
general proposition, we do not exclude the possibility that concerted action or practice 
could b e susceptible to challenge in WTO dispute settlement. Nor do we consider that 
a complainant would necessarily be required to demonstrate the existence of a rule or 
norm of general and prospective application in order to show that such a measure 
exists.205 
7.112.   We further note the approach taken by the panel in the original proceedings of this case, 
which found that "even a policy or practice of an investigating authority could be a 'measure' 
subject to WTO dispute settlement proceedings".206 The United States argues  that the 
Public  Bodies Memorandum, "on its face, does not purport to establish or describe a legal standard 
adopted or applied by the USDOC"207, and that the Public Bodies Memorandum "explains certain 
                                                
199 China's first written submission, para. 178.  
200 China's first written submission, para. 182; second written submission, paras. 120 -121. 
201 United States' first written submission, paras. 165 -181. 
202 United States' first written submission, paras. 156 -162. 
203 United States' first written submission, paras.  182-192. 
204 United States' first written submission, paras. 193 -197. 
205 Appellate Body Report, EC and certain member States – Large Civil Aircraft , para. 794 (quoting 
Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para. 81).  
206 Panel Re port, US – Countervailing Measures (China) , para. 7.101.   
207 United States' first written submission, para. 168.  WT/DS437/RW  
 
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  findings the USDOC made based on the evidence it examine d" relating to China's government and 
economic system.208 In our view, the arguments of the United States (e.g. concerning the subject 
matter and nature of the Public Bodies Memorandum) are more pertinent to the Panel's jurisdiction 
or the substance of China 's "as such" claims, rather than to the threshold question of whether the 
Public Bodies Memorandum can be challenged as a "measure" in the first place.209 
7.113.   In view of the wide scope of measures that can be challenged in WTO dispute 
settlement210, we consider th at the Public Bodies Memorandum falls within the broad definition of 
an "act" of the USDOC attributable to the United States that is challengeable in WTO dispute 
settlement.  
7.114.   Turning to whether the Public Bodies Memorandum is a measure within the scope of our 
jurisdiction, various elements may be considered in cases of disagreement as to whether a certain 
measure constitutes a "measure taken to comply" within the meaning of Article 21.5 of the DSU. 
In particular, a measure "with a particularly close relatio nship to the declared 'measure taken to 
comply', and to the recommendations and rulings of the DSB, may also be susceptible to review by 
a panel acting under Article 21.5", and whether such other measure has "sufficiently close links" to 
be characterized a s a "measure taken to comply" may depend on "the timing, nature, and effects 
of the various measures", as well as "the factual and legal background against which a declared 
'measure taken to comply' is adopted".211 
7.115.   In this case, China submits that we need no t examine any links in terms of nature, timing, 
and effects, because its argument is that "the Public Bodies Memorandum is an integral part of the 
Section 129 determinations that constitute the declared measures taken to comply in this 
dispute".212 In this respect, the United States acknowledges that the Public Bodies Memorandum is 
not "separable" from the declared measures taken to comply, as it is a part of each of the 
administrative records of each of the Section 129 proceedings at issue.213 
7.116.   Given the United States' recognition that the Public Bodies Memorandum is an "integral 
part" of the declared measure taken to comply, we consider that the Public Bodies Memorandum is 
a measure within the scope of our terms of reference under Article 21.5 of the DSU. We find 
confirmation of this in the close relationship of the Public Bodies Memorandum with the 
Section  129 determinations and relevant DSB rulings in terms of its nature or subject matter 
(public body analysis of Chinese enterprises)214 and effects (pr oviding an analytical framework and 
evidentiary analysis for public body determinations relating to Chinese enterprises).215 
7.117.   With regard to the opportunity to challenge the Public Bodies Memorandum in the original 
proceedings, as a general matter a complaina nt "ordinarily  would not be allowed to raise claims in 
an Article 21.5 proceeding that it could have pursued in the original proceedings, but did not".216 
                                                
208 United States' first written submission, para. 177.  
209 In this respect, we note the European Union's view that "[a] measure can be challenged b efore a 
panel even if it does not purport to identify a generally applicable 'legal standard', even if it is not mandatory, 
even if it is not of general application, and even if it is not written." (European Union's third -party submission, 
para. 44).  
210 Panel Report, US – Countervailing Measures (China) , paras. 7.95 -7.100; Appellate Body Report, 
Argentina – Import Measures , para. 5.110.  
211 Appellate Body Report,  US – Softwood Lumber IV (Article 21.5 – Canada) , para. 77.  
212 China's response to Panel question N o. 17, para. 103 (emphasis original). While China argues that 
this alone is sufficient for the Public Bodies Memorandum to fall within the scope of Article 21.5, it additionally 
contends that the Public Bodies Memorandum creates an analytical framework for  public body determinations, 
evaluates evidence in relation that framework, and provides conclusions based on the application of that 
analytical framework to the evidence. (China's response to Panel question Nos. 19 and 23).  
213 United States' response to Pa nel question No. 19, para. 139.  
214 The United States considers it "self -evident that there is overlap in subject matter between the 
analysis and explanation presented in the Public Bodies Memorandum (and the evidence underlying it) and the 
section 129 deter minations and the relevant DSB recommendations". (United States' response to Panel 
question No. 20, para. 141).  
215 United States' response to Panel question No. 23(a), para. 149. The United States submits that the 
Public Bodies Memorandum "does not merely s ummarize evidence" but also "presents analysis and explanation 
of the evidence underlying the Public Bodies Memorandum, and the USDOC, in the memorandum, has set forth 
and explained certain conclusions it has drawn about the economic and government system in China, and 
certain types of entities that operate within that system, based on the evidence it has examined".  
216 Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil) , para. 211. (emphasis added)  WT/DS437/RW  
 
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  In this connection, we note that the USDOC issued the Public Bodies Memorandum on 
18 May 2012 in connec tion with its reconsideration of countervailing duty determinations 
addressed in a different WTO dispute217, prior to the original WTO request for consultations in this 
dispute as well as the USDOC's commencement of the Section 129 proceedings in this case.  
7.118.   In our view, the United States' argument that China is attempting a "lateral challenge" of a 
measure taken to comply in a different dispute218 is at odds with its acknowledgement that the 
Public Bodies Memorandum is an "integral part" of its Section 129 det erminations in this dispute. 
Moreover, we do not consider the present case to be one in which China could have challenged the 
Public Bodies Memorandum in the original dispute, but did not. It is undisputed that the original 
public body determinations reste d on a different basis, and the Public Bodies Memorandum had no 
relevance to those determinations. As acknowledged by the United States:  
[T]he analysis and explanation in the Public Bodies Memorandum, and the evidence 
underlying it, was not "relevant" to the determinations challenged in the original 
proceedings in this dispute, because the Public Bodies Memorandum did not form part 
of the basis of those determinations, as it now forms part of the basis of the USDOC's 
redeterminations in the section 129 pro ceedings.219 
7.119.   Accordingly, the Public Bodies Memorandum only became relevant to the 
United  States'  implementation of the DSB rulings and recommendations in this dispute by virtue of 
its incorporation into the Section 129 record and its consideration by the US DOC in its public body 
determinations. This differs somewhat from scenarios addressed in previous Article 21.5 disputes 
regarding "unchanged aspects of the original measure" that have been challenged in original 
proceedings. Although the Public Bodies Memo randum existed at the time of the original 
measures, it did not comprise part of those measures, but it was made an integral part of the 
compliance measures subsequent to the DSB recommendations and rulings in this case.220 In 
these circumstances, we do not consider the existence of the Public Bodies Memorandum at the 
time of the original proceedings to support the conclusion that the Public Bodies Memorandum is 
outside the scope of these compliance proceedings.221  
7.120.    We therefore find that the Public Bodies Mem orandum is a challengeable measure within 
the scope of our jurisdiction under Article 21.5 of the DSU.  
7.2.2.3   Whether the Public Bodies Memorandum is inconsistent "as such" with 
Article  1.1(a)(1) of the SCM Agreement  
7.2.2.3.1   Introduction  
7.121.   It is well -established that "'acts setting forth rules or norms that are intended to have 
general and prospective application' are measures subject to WTO dispute settlement", and a 
challenge against a measure "as such" relates to WTO -inconsistency "not on ly in a particular 
                                                
217 Public Bodies Memorandum, (Exhibit CHN -1) p. 1 (indicating that the subject of the Public Bodies 
Memorandum was "An Analysis of Public Bodies in the People's Republic of China in Accordance with the WTO 
Appellate Body's Findings in WTO DS379").  
218 United States' response to Panel question No. 17, para. 132.  
219 United States' response to Panel question No. 18, para. 137. 
220 In light of this, even if we were to assess the Public Bodies Memorandum according to its close nexus 
with the United States' implementation of DSB recommendations and rulings, we do not consider this to be a 
case in which the length of time by which the Public Bodies Memorandum predates those recommendations 
and rulings "sever [s] the connection between that measure and a Member's implementation obligations". 
(Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 225).  
221 In any event, Article  21.5 does not preclude new claims against a measure taken to comply that 
"incorporates components of the original measure that are unchanged, but are not separable from other 
aspects of the measure taken to comply". (Appellate Body Report , US – Zeroing (E C) (Article 21.5 – EC), 
para. 432). It is therefore possible that an unchanged aspect of an original measure may be inseparable from a 
subsequent compliance attempt, by virtue of which fact it may be challenged in WTO compliance proceedings. 
We consider th at this applies a fortiori  to the Public Bodies Memorandum, which was not part of the original 
measure (although it existed at the time) but only became relevant to the United States' compliance in this 
dispute due to its placement on the record by the USD OC in the relevant Section 129 proceedings.  WT/DS437/RW  
 
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  instance that has occurred, but in future situations as well".222 When bringing a claim against a 
rule or norm that is a measure of general and prospective application, "a complaining party must 
clearly establish, through arguments and sup porting evidence, at least that the alleged 'rule or 
norm' is attributable to the responding Member; its precise content; and indeed, that it does have 
general and prospective application".223  
7.122.   The discretionary nature of a measure is no barrier to a challen ge "as such", and a 
measure may be WTO -inconsistent "as such" if a complainant meets its burden of proving either 
that the measure mandates an investigating authority to act inconsistently with the relevant 
provision of WTO law, or that it restricts in a m aterial way the authority's discretion to make a 
determination consistent with WTO law.224  
7.123.   We therefore proceed to consider whether the Public Bodies Memorandum is a rule or 
norm of general or prospective application; and, if so, whether the Public Bodies M emorandum 
restricts in a material way the USDOC's discretion to make a determination consistent with 
Article  1.1(a)(1).  
7.2.2.3.2   Whether the Public Bodies Memorandum is a rule or norm of general or 
prospective application  
7.124.   With regard to the precise content of the  Public Bodies Memorandum as a "rule or norm", 
as well as its general or prospective application, we note that relevant evidence may include the 
text of the measure as well as proof of the systematic application of the challenged "rule or 
norm".225 With spec ific respect to the challenge of written  rules or norms "as such", the precise 
content, attribution, as well as the general and prospective nature of the rule or norm may be 
discernible from the document itself, its official character, or the manner in whi ch it was 
elaborated, adopted, or enacted.226 
7.125.   We examine in particular whether the Public Bodies Memorandum has "normative value", 
i.e. whether it provides administrative guidance and creates expectations among the public and 
among private actors.227 We examin e the element of general or prospective application as 
evidenced by whether the Public Bodies Memorandum is intended to apply to proceedings taking 
place after its issuance.228  
7.126.   In terms of the "starting point" of the Public Bodies Memorandum "on its face"229, the text 
of the Public Bodies Memorandum contains elements that could support a finding of normative 
character as well as general or prospective application. In particular, the Public Bodies 
Memorandum states in several places that the analysis and conclu sions therein are determinations 
by the USDOC "for the purposes of [US] countervailing duty law".  
7.127.   First, the USDOC determined for the purposes of US countervailing duty law that 
"China's  government has a constitutional mandate, echoed in China's broader l egal framework, to 
maintain and uphold the 'socialist market economy', which includes maintaining a leading role for 
the state sector in the economy".230 Second, the USDOC concluded that "certain categories of SIEs 
in China properly are considered to be publ ic bodies for the purposes of the [countervailing duty] 
                                                
222 Appellate Body Report, US – Oil Country Tubular Goods  Sunset Reviews , paras. 172 and 187 
(quoting Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para. 82). See also 
Appellate  Body Report, US – Anti-Dumping Methodologies (China) , para. 5.127:  
Ascertaining whether the rule or norm has general and prospective application is necessary 
because "as such" challenges seek to prevent the responding Member from engaging in certain 
conduct in general and in the future, as opposed to addressing particular instances of application 
that are occurring or have occurred.  
223 Appellate Body Report, US – Zeroing (EC) , para. 198.  
224 Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.229.  
225 Appellate Body R eports, US – Zeroing (EC) , para. 198; US – Corrosion -Resistant Steel Sunset 
Review , para. 168. 
226 Appellate Body Report, US – Anti-Dumping Methodologies (China) , para. 5.127.  
227 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 187.  
228 Panel Report, US – Countervailing Measures (China) , paras. 7.113 -7.114; Appellate Body Report, US 
– Oil Country Tubular Goods Sunset Reviews , para. 187.  
229 Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para. 168. 
230 Public Bodies Memorandum, (Exhibit  CHN-1), p. 2.  WT/DS437/RW  
 
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  law and other categories in China may be considered public bodies under certain 
circumstances".231 Although the United States characterizes such conclusions for the purposes of 
its countervailing duty l aw as a limitation (i.e. the analysis and conclusions in the Public Bodies 
Memorandum do not extend to other governmental determinations in relation to China)232, these 
examples indicate a broader application of the Public Bodies Memorandum than only to the specific 
investigations for which it was initially issued. This is specifically evidenced by the USDOC 
determinations in the Section 129 proceedings at issue, in which the relevant government function 
and the framework of enterprise categories are consiste nt elements of the USDOC's reliance on the 
Public Bodies Memorandum in proceedings taking place after its issuance.  
7.128.   China has also highlighted the following excerpt from the Public Bodies Memorandum in 
support of its arguments:  
While record evidence leads  the Department to the conclusion that the systemic  
analysis in this memorandum is appropriate for understanding the institutional and 
SIE-focused policy setting in China, we do not reach the conclusion that such a 
systemic analysis is necessary in every [ countervailing duty] investigation involving an 
allegation that an entity is a public body.233 
7.129.   Whereas China considers this reference to "systemic" analysis to support the normative 
and general nature of the Public Bodies Memorandum234, the United States count ers that the 
reference to "systemic" pertains to the nature of the analysis required in public body 
determinations, and that the USDOC specifically noted that this analysis may not always be 
necessary.235 Even as clarified by the United States, the reference  to "systemic analysis" is 
consistent with the view that the Public Bodies Memorandum sets out an analysis that is 
susceptible to broader (i.e. general and prospective) application in countervailing duty 
investigations against Chinese enterprises.  
7.130.   In this connection, it is uncontested that the Public Bodies Memorandum has served as the 
basis for numerous determinations following its adoption by the USDOC.236 Although there is 
evidence that the Public Bodies Memorandum is not the exclusive basis of the USDOC's  public body 
determinations, as discussed below, a complainant is not required to show with certainty that a 
given measure will apply in future situations.237 In this case, we consider evidence of the 
USDOC's  repeated reliance on the Public Bodies Memorandum , combined with the textual elements 
above, to show "that what is at issue goes beyond the simple repetition of the application of a 
certain methodology to specific cases".238 
7.131.   This conclusion is further supported by the United States' acknowledgement that "t he 
Public Bodies Memorandum and the CCP Memorandum present pertinent analysis and explanation 
relating to the government and economic system of China" and that "[s]uch analysis and 
explanation is relevant in any countervailing duty investigation involving allegations that an input 
provider in China is a public body".239 In our view, this is consistent with the Public Bodies 
Memorandum having been elaborated and adopted in manner so as to provide general analytical 
guidance to the USDOC and to have the potenti al to be relied upon in future countervailing duty 
investigations.  
                                                
231 Public Bodies Memorandum, (Exhibit  CHN-1), p. 37.  
232 United States' responses to Panel question No. 23 , para. 147, and No. 16(a), para. 118. 
233 Public Bodies Memorandum, (Exhibit  CHN-1), fn 48. (emphasis added)  
234 China's second written submission , para. 115.  
235 United States' first written submission , para. 174; second written submission , paras. 144 -146; and 
response to Panel question No. 16(a), para. 117.  
236 Public Body Reference Chart, (Exhibit CHN -54). 
237 Appellate Body Re port, US – Anti-Dumping Methodologies (China) , para. 5.132.  
238 Panel Report, US – Countervailing Measures (China) , para. 7.117.  
239 United States' first written submission , para. 126. See also response to Panel question No. 16, 
para. 104; and first written su bmission , para. 170:  
Of course, while the USDOC prepared and published the Public Bodies Memorandum in 
connection with certain section 129 proceedings involving particular products, that very same 
analysis, explanation, and evidence, which relates to China  in general, may be highly relevant to 
and may support the USDOC reaching the same conclusions in other countervailing duty 
proceedings involving other products from China.  WT/DS437/RW  
 
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  7.132.   In sum, China has adduced substantial evidence to support its argument that the analytical 
framework articulated in the Public Bodies Memorandum is both general, because it affects an 
unidentified number of Chinese economic operators, and is prospective, because it applies to 
future public body determinations.240 Notwithstanding the fact that the Public Bodies Memorandum 
was nominally issued to assess relevant entities in specific countervail ing duty proceedings241, 
there are explicit textual indications regarding its potential for broader application, combined with 
evidence of its consistent use in subsequent countervailing duty investigations. Thus, with regard 
to the "normative value" of the Public Bodies Memorandum, we consider that the measure 
provides "administrative guidance and creates expectations among the public and among private 
actors"242 by virtue of its explicit textual elements and the USDOC's consistent reliance on the 
Public Bodie s Memorandum in Chinese investigations.243 
7.133.   Accordingly, we find that the Public Bodies Memorandum can be challenged "as such" as a 
rule or norm of general or prospective application.  
7.2.2.3.3   Whether the Public Bodies Memorandum restricts in a material way the 
USDOC' s discretion to make a determination consistent with Article 1.1(a)(1) of the 
SCM Agreement  
7.134.   It is not disputed that the Public Bodies Memorandum is not mandatory in the sense that 
the USDOC is required or bound in all cases to apply its framework or findin gs in countervailing 
duty investigations.244 At the same time, as explained above, the Public Bodies Memorandum may 
be found to be inconsistent "as such" with Article  1.1(a)(1) if it "restricts, in a material way", the 
discretion of the USDOC to act consiste ntly with that provision.245 Precisely what is required to 
establish that a measure is inconsistent "as such" will vary, depending on the particular 
circumstances of each case, including the nature of the measure and the WTO obligations at 
issue.246 
7.135.   At the out set, we note that China's claim against the Public Bodies Memorandum "as such" 
is largely based on the same grounds as its claims against the particular instances of application in 
the Section 129 determinations at issue. Thus, China argues:  
[A] proper pub lic body analysis requires the investigating authority to determine 
whether the entity in question is performing a government function when it engages 
in the conduct that is the subject of the financial contribution inquiry. Whenever the 
USDOC relies on th e framework articulated in the Public Bodies Memorandum to 
determine that an entity is a public body, it necessarily acts inconsistently with 
Article  1.1(a)(1), because the analysis in the Public Bodies Memorandum is premised 
on the U.S. view that the "gov ernment function" does not have to relate to the 
conduct at issue.247 
7.136.   We recall our rejection of  China's position regarding the applicable legal standard insofar 
as it would require a particular degree or nature of connection between an identified government  
function and the financial contribution in question. Moreover, we did not find the USDOC to have 
misconstrued the substantive legal standard of a public body inquiry, particularly with respect to 
its analysis of "meaningful control". We further found that , within the analytical framework of 
"meaningful control", the factual evidence in the Public Bodies Memorandum (and accompanying 
CCP Memorandum) was relevant to the public body analysis. Thus, to the extent that China's claim 
against the Public Bodies Mem orandum "as such" is premised on the same grounds as its 
                                                
240 China's response to Panel question No. 16, para. 101. See also Appellate Body Rep ort, US – 
Anti-Dumping Methodologies (China) , para. 6.8.  
241 The United States points out that the Public Bodies Memorandum refers to the USDOC's assessment 
of "the relevant entities covered by these proceedings ". (United States' first written submission, pa ra. 169 
(referring to Public Bodies Memorandum , (Exhibit CHN -1), p. 3 (emphasis original)).  
242 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 187. 
243 Panel Report, US – Countervailing Measures (China) , para. 7.111.  
244 United States' first written submission , para. 177; China's comments on United States' response to 
Panel question No. 14, para. 34.  
245 Appellate Body Reports, EU – Biodiesel (Argentina) , para. 6.281; US – Carbon Steel , para. 162. 
246 Appellate Body Reports, EU – Biodiesel (Argentina) , para. 6.230; US – Carbon Steel , para.  157; and 
Panel Report, EC – IT Products , para.  7.112.  
247 China's second written submission, para. 120.  WT/DS437/RW  
 
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  "as applied" claim against the Section 129 determinations248, we find that China has failed to 
establish that the Public Bodies Memorandum is a measure that is inconsistent "as such" with 
Article  1.1(a )(1). 
7.137.   In our view, an additional point of consideration is whether, and if so, the extent to which 
the Public Bodies Memorandum restricts the USDOC's authority to consider and rely on other 
evidence in making public body determinations in its countervailin g duty investigations, and 
specifically whether the USDOC is materially restricted in its discretion to complement the analysis 
of the Public Bodies Memorandum with additional factual findings in a given investigation in 
relation to investigated entities.  
7.138.   It is in this light that we recall that three categories of enterprises are described in the 
Public Bodies Memorandum249: 
a. First, "any enterprise in China in which the government has a full or controlling 
ownership interest is found to be a public body", base d on the evidence and analysis 
regarding the government's "meaningful control" within "the institutional and 
SIE-focused policy setting of China".  
b. Second, "enterprises in China in which the government has significant ownership that 
are also subject to cert ain government industrial plans may be found to be public 
bodies", based on a " case-by-case analysis " that " will rest upon additional indicia  that 
show whether such SIEs are used as instruments by the government to uphold the 
socialist market economy".  
c. Third, the USDOC " may also find that certain enterprises that have little or no formal 
government ownership are public bodies" depending on a determination "that the 
government exercises meaningful control over such enterprises … on a case -by-case 
basis". 
7.139.   For the second and third categories of enterprises, the Public Bodies Memorandum 
explicitly contemplates that the USDOC's determinations will be made on a case -by-case basis, 
taking into account additional information and evidence pertaining to indicia of gov ernmental 
control over the relevant entities. Indeed, China recognizes this feature of the Public Bodies 
Memorandum's analytical framework, but argues nonetheless that these categories are based on a 
flawed understanding of "meaningful control" that is div orced from the relevant conduct 
constituting the financial contribution.250 
7.140.   As a basic matter, we accept that the Public Bodies Memorandum "has no operational force 
and does not, in itself, constitute a determination by the USDOC in any countervailing duty 
proceeding".251 Notwithstanding its normative character as well as its capacity for general or 
prospective application, the Public Bodies Memorandum does not, on its face, impinge upon the 
authority of the USDOC to disregard or supplement its content in any g iven investigation. In this 
sense, we consider that the Public Bodies Memorandum is an evidentiary analysis and framework 
that is available  to the USDOC to be considered and potentially relied upon to the extent that the 
USDOC, in its discretion, finds it pertinent in any given investigation.  
7.141.   In our view, the USDOC's discretion to consider other evidence in a given investigation for 
all categories of enterprises, even where the Public Bodies Memorandum is on the record, is clear 
from the fact that the USDO C provides respondents with an opportunity "to rebut, clarify, or 
correct the factual information" that is placed on the record.252 We also consider relevant the 
actual practice of the USDOC in issuing questionnaires requesting information according to the 
different categories of entities identified in the Public Bodies Memorandum. This includes questions 
about the applicability of government policies (including industrial policies and plans discussed in 
                                                
248 China's responses to Panel question No. 14, para. 91, and No. 15(b), para. 97; see also commen ts 
on United States'  response to Panel question No. 14, para. 35.  
249 Public Bodies Memorandum , (Exhibit CHN -1), pp.  37-38. (emphasis added)  
250 China's comments on United States' response to Panel question No. 16, para. 41. 
251 United States' response to Panel question No. 23, para. 147.  
252 Public Bodies Record Memorandum , (Exhibit  USA-130); United States' responses to Panel question 
No. 16, para. 105; and No. 23(b), para. 150.  WT/DS437/RW  
 
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  the Public Bodies Memorandum) to all entities and indus tries at issue in the investigation, as well 
as entity -specific questions relating to various additional aspects of governmental control that are 
directed toward entities in the second and third categories. Moreover, we note that in at least one 
investigat ion, the USDOC concluded that certain entities were not public bodies on the basis of 
evidence provided by the respondent pertaining to the exercise of meaningful control by the 
GOC.253 Taken together, these considerations indicate that the nature of the Pub lic Bodies 
Memorandum is that of a resource available to the USDOC for use in making public body 
determinations, but it does not restrict the USDOC's discretion to supplement the record or take 
into account and rely on additional information that is provid ed in a particular investigation.  
7.2.2.3.4   Conclusion on China's "as such" claim under Article 1.1(a)(1) of the 
SCM Agreement  
7.142.   In light of the foregoing, we find that, although it may be a rule or norm of general or 
prospective application, the Public Bodies Memorandum does not restrict in a material way the 
USDOC's discretion to act consistently with Article 1.1(a)(1). We thus conclude that China has not 
demonstrated that the Public Bodies Memorandum is inconsistent "as such" with Article  1.1(a)(1) 
of the SCM  Agreement.  
7.3  China's claim under Articles 1.1(b) and 14(d) of the SCM Agreement in relation to 
the USDOC's benefit determinations  
7.143.   China claims that the USDOC's revised benefit analysis and determinations in the OCTG, 
Solar Panels, Pressure Pipe, and Line Pipe Section 129 proceedings are inconsistent with 
Articles  1.1(b) and  14(d) of the SCM Agreement. In particular, China claims that the USDOC 
improperly rejected Chinese prices as benchmarks by relying on an incorrect legal standard under 
Article  14(d), an d on the erroneous conclusion that Chinese prices for the inputs at issue are not 
"market -determined".  
7.3.1   Main arguments of the parties  
7.144.   China challenges the legal standard allegedly relied on by the USDOC to reject in -country 
prices in China as potential ben chmarks for the determination of benefit in the Section 129 
determinations at issue. In particular, China considers that the standard applied by the USDOC is 
inconsistent with Article 14(d) because it requires a "pure" market undistorted by government 
intervention. Asserting that the ordinary meaning of "prevailing" is "as they exist" or "which are 
predominant", China argues that Article 14(d) requires the investigating authority "to evaluate the 
adequacy of remuneration in relation to the existing or predo minant market conditions within the 
country of provision."254 For China, this may involve situations in which "[t]he normal interplay of 
supply and demand in a market is … influenced by all of the ways in which governments regulate 
and influence markets" or affect conditions in those markets.255  
7.145.   As a result, China argues that, in assessing whether remuneration for the goods at issue is 
adequate, an investigating authority must use the prices of similar goods in the country of 
provision as benchmarks, unless it  has made a positive finding that such prices are effectively 
determined, de jure  or de facto , by the government.256 According to China, "[t]his is the only 
circumstance in which panels and the Appellate Body have suggested that domestic benchmark 
prices may  not reflect 'prevailing market conditions … in the country of provision'."257 China 
contends that its interpretation is the only possible way to reconcile "the Appellate 
Body's  recognition that Article  14(d) does not require a market 'undistorted by governm ent 
                                                
253 USDOC Administrative Review in Citric Acid,  (Exhibit USA -129), pp. 23 -24; United Sta tes' response 
to Panel question No. 16(c), paras. 124 -125. 
254 China's first written submission, para. 224. (fn omitted)  
255 China's first written submission, para. 238.  
256 China's first written submission, para. 223:  
So long as prices for the good in question are determined by the forces of supply and demand, 
there is a "market" in the sense of Article 14(d) and it is these market -determined prices that 
provide the baseline for determining whether the government has provided goods for less than 
adequate remuner ation.  
257 China's first written submission, para. 240.  WT/DS437/RW  
 
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  intervention' with its simultaneous finding that there are 'very limited' circumstances in which 
Article 14(d) allows an investigating authority to resort to out -of-country benchmarks."258  
7.146.   In addition to the asserted error in the legal standard allegedl y relied on by the USDOC in 
the Section 129 proceedings at issue, China also alleges that the USDOC's determination lacks a 
factual basis. Specifically, China contends that the USDOC did not examine information concerning 
in-country prices for the inputs a t issue. China also considers that the USDOC's analysis did not 
take into account relevant aspects of "prevailing market conditions" in China for the goods in 
question.259 As a consequence, China argues that the USDOC's findings of widespread government 
intervention in the market fell short of explaining how government intervention effectively 
distorted the prices of the inputs at issue.260  
7.147.   The United States responds that an investigating authority can reject in -country prices as 
benchmarks for determining ben efit if evidence on the record shows that in -country prices are 
distorted by government intervention, thus preventing the establishment of equilibrium market 
prices determined by the forces of supply and demand. The United States also contends that 
ample f actual evidence on the USDOC record regarding government intervention in the Chinese 
economy demonstrates that prices in the Chinese steel and polysilicon sectors reflect government 
policy, rather than market forces.261 On the basis of such evidence, the Uni ted States submits that 
the USDOC did not need to conduct a specific analysis of the market and price for each input in 
China during the period of investigation.262 
7.3.2   Main arguments of the third parties  
7.148.   Australia submits that the SCM Agreement does not define exhaustively the types of 
governmental measures that could justify rejecting in -country prices as benchmarks and that 
de jure or de facto  price setting by a government does not exhaust the "very limited" 
circumstances in which in -country prices can be reje cted. In Australia's view, this analysis is 
necessarily case -specific, and it is neither possible nor desirable to develop rigid legal rules for the 
kinds of governmental measures that might justify rejecting in -country prices.263 
7.149.   Canada considers that the d ecision to reject in -country prices must be made on the basis 
of a market analysis that determines that such prices are not market -determined as a result of 
government intervention in the market.264 Canada submits that the key factor allowing an 
authority to  make this decision is evidence of how the government actually causes price distortion. 
In the context of this case, Canada considers that this compliance Panel must therefore examine 
what the USDOC has actually done to analyse the precise evidentiary path  showing how the 
Chinese government has distorted prices in the market.265 
7.150.   The European Union argues that, besides situations where the government distorts prices 
through its market power, there may be other situations in which a government distorts in -count ry 
prices through other entities or channels, including through "other market interventions". In such a 
case, the European Union submits that an investigating authority would have to demonstrate 
specific price interventions in the market or that supply and  demand do not determine market 
prices because of other types of interventions by the government.266 For the European Union, an 
"evidentiary link" is required that leads from the government interventions in question to the 
distortion of the in -country price.267 A determination must be made based on the "totality of the 
evidence", with the weight of the evidence depending on inter alia  the directness of the 
                                                
258 China's second written submission, para. 144.  
259 China's response to Panel question No. 33, para. 164.  
260 China's second written submission, para. 161.  
261 United States' response to Panel question No. 32, paras. 173 -174. 
262 United States' response to Panel question No. 35, paras. 179 -182. See also Supporting Benchmark 
Memorandum (Exhibit USA -84), p. 5: "In light of the foregoing, a detailed analysis of the s pecific markets for 
hot-rolled steel, steel rounds and stainless steel coils is not integral to our finding of market distortion."  
263 Australia's third -party statement, pp. 5 -6.  
264 Canada's third -party submission, para. 36.  
265 Canada's third -party submission , para. 38.  
266 European Union's third -party submission, paras. 58 -59. 
267 European Union's third -party statement, para. 15.  WT/DS437/RW  
 
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  government interventions on price, and the closeness of the relationship of the interventions to the 
produ ct or sector in question.268  
7.151.   Japan submits that "distortion" may be established through a holistic assessment of the 
market and that a particular finding of the effect on the specific pricing conduct of suppliers is not 
necessarily required in each instance . According to Japan, the key question for a determination of 
distortion is whether the price in the market is formed through arm's length transactions based on 
respective market actors' commercial considerations. In this regard, Japan states that evidence  
that actors do not operate on the basis of commercial considerations will provide a strong 
indication that prices resulting from the interactions of those operators are distorted. Japan further 
argues that the distortion of prices through government inter vention can be inferred when such 
intervention changes the conditions of competition in the market.269 
7.3.3   Evaluation by the Panel  
7.3.3.1   Introduction  
7.152.   In this compliance dispute, we are called upon to evaluate whether the USDOC's 
determination that Chinese prices for c ertain inputs270 could not be used as benchmarks was 
consistent with the provisions of Article 14(d) of the SCM Agreement.  
7.153.   We recall that Article 14(d) of the SCM Agreement deals with situations in which the 
financial contribution in the sense of Article 1.1 (a)(1)(iii) of the SCM Agreement is in the provision 
of goods or services or the purchase of goods by a government. It sets out a framework271 for 
investigating authorities in determining whether the provision of goods or services in question 
confers a benef it on the recipient. Specifically, the provision of a good by a government:  
[S]hall not be considered as conferring a benefit unless the provision is made for less 
than adequate remuneration[.] …  The adequacy of remuneration shall be determined 
in relatio n to prevailing market conditions for the good or service in question in the 
country of provision or purchase (including price, quality, availability, marketability, 
transportation and other conditions of purchase or sale).  
7.154.   The Appellate Body has establish ed that determining the benefit conferred by a subsidy 
involving the provision of a good for less than adequate remuneration requires a comparison 
between the terms on which the good in question is provided to the producers/exporters under 
investigation an d the terms "that would have been available to [those producers/exporters] on the 
market".272 Article  14(d) establishes that the standard for determining whether goods were 
provided to producers/exporters for less than adequate remuneration is whether they w ere 
provided on terms more advantageous than those available in the market. The focus of the 
analysis is on the "adequacy of the remuneration" received by the government: if it is inadequate, 
i.e. lower than the market remuneration for the goods in questio n, a benefit is deemed to have 
been conferred on the recipient of the goods.273 Depending on the circumstances, the 
remuneration, i.e. "[t]he act of paying or compensating"274, may encompass something other or 
more than the price paid for the goods (compensati on in kind, for example). In most cases 
however, the price paid by the producer/exporter would typically constitute the remuneration for 
the provision of the good in question.  
7.155.   An analysis of whether remuneration is "less than adequate" and thus confers a benefit in 
the sense of Article 1.1(b), involves a comparator or benchmark, i.e. the "adequate" remuneration, 
with which the price paid by the producer/exporter for the goods in question can be compared. 
                                                
268 European Union's third -party statement, para. 16.  
269 Japan's third -party submission, para. 28; third -party statement, paras. 26 -27. 
270 Steel rounds and billets (OCTG), stainless steel coil (Pressure Pipe), hot -rolled steel (Line Pipe), and 
polysilicon (Solar Panels).  
271 Appellate Body Report, US – Softwood Lumber IV , para. 92.  
272 Appellate Body Report, Canada – Aircraft , para. 157.  
273 Appellate Body Report, US – Softwood Lumber IV , para. 84: "As the Panel observed, the term 
'adequate' in this context means 'sufficient, satisfactory'. … Thus, a benefit is conferred when a government 
provides goods to a recipient and, in return, receives  insufficient payment or compensation for those goods." 
(fn omitted)  
274 Black's Law Dictionary , 10th edn, B.A. Garner (ed.) (Thomson Reuters, 2009), p. 1487.  WT/DS437/RW  
 
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  Since terms on the market in the country of provision are the relevant standard for the 
comparison, Article 14(d) requires investigating authorities to determine and use a benchmark 
which  relates to the prevailing market condition s in the country of provision.275 The last sentence 
of Article 14(d) sets out an illustrative list of prevailing market conditions which may be relevant in 
undertaking the necessary comparison between the terms on which the good was provided by the 
governmen t and the benchmark used by the authority, "including price, quality, availability, 
marketability, transportation and other conditions of purchase or sale" for the goods in question.  
7.156.   We note that this is not the first time a panel has been called upon to consider the 
meaning of this provision and apply it. Panels and the Appellate Body have done so in the past, 
including in the original dispute. Our analysis of China's claim in this compliance proceeding will 
thus be guided by our understanding of Article 14(d) in light of the ordinary meaning of its terms 
in context and their interpretation in past disputes.  
7.157.   In particular, we recall that "prevailing market conditions" in Article 14(d) "consist of 
generally accepted characteristics of an area of economic a ctivity in which the forces of supply and 
demand interact to determine market prices".276 It follows that any benchmark for comparison 
purposes in determining the adequacy of remuneration must consist of market -determined  prices 
for the same or similar goods  in the country of provision.277 Accordingly, prices established in 
accordance with the prevailing market conditions for the same or similar goods in the country of 
provision are presumed to be an adequate benchmark. They are the "starting -point"278 of any 
analysis carried out in this context.279 In our view, this implies that before resorting to an 
alternative benchmark, an investigating authority must determine whether market prices in the 
country of provision can be used as a benchmark to establish whether the  recipient has benefitted 
from the financial contribution in question. If not, an investigating authority must adequately 
explain its decision before proceeding to determine an alternative benchmark.280  
7.158.   In the present dispute, the disagreement between the p arties concerns the USDOC's 
determination that in -country prices in China are not "market -determined" and thus cannot be 
used as a benchmark for the purpose of determining the adequacy of remuneration under Article 
14(d). The focus of our consideration is thus the explanation given by the USDOC for its 
determination that prices in China are not "market -determined". In this regard, we recall that 
Article 14(d) does not qualify in any way the "market" conditions which are relevant for the 
analysis. Article 14 (d) does not refer to a benchmark derived from a "pure" market, a market 
"undistorted by government intervention", or a "fair market value" as a requirement for 
determining the adequacy of remuneration.281 Nevertheless, an identified in -country benchmark 
should not, as a result of governmental intervention in the market, deviate from a 
market -determined price.282  
                                                
275 Appellate Body Report,  US – Softwood Lumber IV , paras. 89 and 96.  
276 Appellate Body Report, US – Countervailing Measures (China) , para. 4.46 (quoting Appellate Body 
Report, US – Carbon Steel (India) , para. 4.150).  
277 Appellate Body Report, US – Countervailing Measures (China) , para. 4.46 (referring to Appellate 
Body Report, US – Carbon Steel (India) , para. 4.151; in turn referring to Appellate Body Report, US – 
Softwood Lumber IV , para. 89).  
278 Appellate Body Report, US – Softwood Lumber IV , para. 90  
279 Appellate Body Report, US – Carbon Steel (India) , para. 4.151:  
Proper benchmark prices would normally e manate from the market for the good in question in 
the country of provision. To the extent that such in -country prices are market determined, they 
would necessarily have the requisite connection with the prevailing market conditions in the 
country of provi sion that is prescribed by the second sentence of Article 14(d).  
280 Panel Reports, Canada – Renewable Energy / Canada – Feed-in Tariff Program , para. 7.274 
(referring to Appellate Body Report, US – Softwood Lumber IV , para. 93).  
281 Appellate Body Report, US – Softwood Lumber IV , para. 87 (quoting Panel Report, US – Softwood 
Lumber IV , paras. 7.50 -7.51).  
282 See e.g. Appellate Body Report, US – Carbon Steel (India) , para. 4.155:  
Although the benchmark analysis begins with a consideration of in -country prices fo r the good in 
question, it would not be appropriate to rely on such prices when they are not market 
determined. Proposed in -country prices will not be reflective of prevailing market conditions in 
the country of provision when they deviate from a market -determined price as a result of 
governmental intervention in the market.  
See also ibid. para. 4.150.  WT/DS437/RW  
 
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  7.159.   In view of the foregoing, we first consider the parties' arguments in relation to the proper 
legal standard for the identification of an appropriate benchmark under Article 14(d) of the 
SCM Agreement.  
7.3.3.2   Whether the USDOC applied an erroneous legal standard in its benefit 
determinations  
7.160.   China's claim of inconsistency with Articles 1.1(b) and 14(d) is based at the outset on the 
allegedly incorrect legal standard applied by the USDOC to determine whether in -country prices in 
China were related to "prevailing market conditions" for the input s in question. In particular, China 
argues that an investigating authority may resort to an out -of-country benchmark only when it has 
established that in -country prices are effectively determined by the government, either de jure  or 
de facto .283  
7.161.   China itsel f recognizes that a government may distort prices in the market in many 
different ways.284 For China however, government intervention is itself part of the prevailing 
conditions in any given market.285 As a consequence, in China's view, evidence of government 
intervention cannot justify rejecting in -country prices under Article 14(d) because "there would be 
no end to the factors that investigating authorities could rely upon to depart from the requirement 
to evaluate the adequacy of remuneration 'in relation to  prevailing market conditions … in the 
country of provision'".286  
7.162.   While we agree that evidence of governmental intervention in the economy, or even in a 
specific sector of the economy, will not, in and of itself, suffice as the basis for rejecting in -countr y 
prices as benchmarks, we do not accept that the narrow legal standard advocated by China is 
required by Article 14(d).  
7.163.   First, we recall – as the panel did in the original dispute – that there is no defined, 
exhaustive set of circumstances in which an au thority may resort to an out -of-country 
benchmark.287 For instance, in US – Carbon Steel (India) , the Appellate Body stated:  
[W]e do not consider that in -country prices may not be used to determine a 
benchmark only where such prices are distorted as a resul t of governmental 
intervention in the market. Indeed, there may be other circumstances  where an 
investigating authority would not be required to use in -country prices to determine a 
benchmark for the purposes of Article 14(d), for example, where informatio n 
pertaining to in -country prices cannot be verified so as to determine whether they are 
market determined in accordance with the second sentence of Article 14(d). As we see 
it, to find that an investigating authority is precluded from using alternative 
benchmarks in these situations would be contrary to a proper interpretation of 
Article  14(d).288  
7.164.   Consistent with our understanding that Article 14(d) requires a comparison of the terms of 
the financial contribution provided to the producer/exporter under inve stigation and the terms 
"that would have been available to the recipient on the market"289, we consider that the "other 
circumstances" contemplated by the Appellate Body refer to the multiplicity of situations in which 
in-country prices might not be suitable  for determining the terms on which the goods at issue are 
                                                
283 China's first written submission, paras. 195 and 227 -228; second written submission, 
paras.  145-146. See also response to Panel question No. 26, para. 13 0: 
[T]he "very limited" circumstance in which an investigating authority can reject available 
in-country price benchmarks is the circumstance in which the government effectively determines 
the price at which the good is sold.  
284 See e.g. China's first writ ten submission, para. 238: "[t]here is no market that is 'undistorted by 
government intervention'".  
285 China's first written submission, para. 244:  
The "prevailing market conditions … in the country of provision" are necessarily influenced by all 
of the wa ys in which the government of that country organizes and regulates markets. No other 
type of "market conditions" exists.  
286 China's first written submission, para. 247.  
287 Appellate Body Report, US – Countervailing Measures (China) , para. 4.76.  
288 Appellate Body Report, US – Carbon Steel (India) , para. 4.189. (emphasis added)  
289 Panel Report, Canada – Aircraft , para. 9.112.  WT/DS437/RW  
 
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  offered on the domestic market. This may encompass a variety of situations in which in -country 
prices for the goods at issue are either not available or not verifiable or cannot, for other reasons,  
be used to determine "whether the recipient is better off absent the financial contribution".290 
These circumstances, even if very limited, in our view go beyond the sole circumstance in which 
prices are determined, de jure  or de facto , by the government.  
7.165.   Second, we are not convinced by China's argument that "panels and the Appellate Body 
have limited the concept of 'distortion' under Article 14(d) to situations in which the government 
effectively determines all in -country prices for the product in question ".291 China relies on five prior 
WTO disputes in which, according to China, resort to an out -of-country benchmark was found to 
be warranted because of the government's sole or predominant role in the market as provider of 
the goods in question.292 China draws from the facts of these prior disputes a general principle 
according to which resort to an alternative benchmark is permitted only where it is shown that 
prices are effectively determined by the government.  
7.166.   We consider that the facts of prior disputes do not preclude us from reaching the 
conclusion that an out -of-country benchmark may be warranted in a different factual context. The 
facts of the present compliance dispute are quite different from those in the disputes relied on by 
China, and our considerat ion of the USDOC's determinations must be based on the facts of this 
case in light of the relevant legal standard. As noted by the European Union, the question of 
whether, and if so how, an investigating authority can "establish price distortion through 
government interventions that are not, or at least not primarily, the result of the government's 
market power regarding the product concerned" is raised for the first time in WTO dispute 
settlement proceedings in this dispute.293  
7.167.   Moreover, we note that the di sputes relied on by China in support of its argument explicitly 
focus on evidence of price distortion , and not solely on evidence of prices being set by the 
government .294 For instance, in the original dispute, the Appellate Body emphasized that:  
What allows an investigating authority to reject in -country prices is price distortion , 
not the fact that the government, as a provider of goods, is the predominant supplier 
per se . 
… 
Once an investigating authority has properly established and explained t hat in -country 
prices are distorted , it is warranted to have recourse to an alternative benchmark for 
the benefit analysis under Article 14(d).295 
7.168.   Thus, in our view, an investigating authority may reject in -country prices if there is 
evidence of price distor tion, and not only if there is evidence that a government "effectively 
determines" the price of the goods at issue. This strikes us as appropriate in the context of the 
Article 14(d) comparison, because the existence of price distortion may well, in our vi ew, preclude 
a proper comparison of the terms of the financial contribution with market terms. This may be the 
case when the government is the sole or predominant provider of a good, but it may also be the 
                                                
290 Appellate Body Reports, Canada – Renewable Energy / Canada – Feed-in Tariff Program , 
para. 5.160.  
291 China's first written submission, pa ra. 190.  
292 China's response to Panel question No. 31 (referring to Appellate Body Reports, US – Softwood 
Lumber IV ; US – Anti-Dumping and Countervailing Duties (China) ; US – Carbon Steel (India) ; and US – 
Countervailing Measures (China) ; and Panel Reports,  Canada – Renewable Energy / Canada – Feed-in Tariff 
Program ). 
293 European Union's third -party submission, para. 62.  
294 [In US – Softwood Lumber IV ,] the Appellate Body limited  its examination to the situation of 
government predominance in the market, and merely noted  examples of situations in which it 
would not be possible to use in -country prices, i.e.: (i) where the government is the only supplier 
of the particular goods in t he country; and (ii) where the government administratively controls all 
of the prices for those goods in the country.  
(Appellate Body Report, US – Countervailing Measures (China) , para.  4.76 (emphasis original))  
295 Appellate Body Report, US – Countervailin g Measures (China) , paras. 4.59 (referring to Appellate 
Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 446  (emphasis original)), and 4.62. 
(emphasis added)  WT/DS437/RW  
 
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  case in other circumstances that render the compar ison equally impossible or irrelevant. To 
conclude that an investigating authority is precluded from using alternative benchmarks in these 
situations would be contrary to a proper interpretation of Article 14(d).296 
7.169.   We note China's argument that the USDOC in terprets Article 14(d) as requiring a "pure 
market", undistorted by government intervention:  
[T]he USDOC appears to consider that the term "market" in Article 14(d) refers to a 
"pure" market or to a market "undistorted by government intervention", or perh aps to 
a market with no more than some minimum (but unspecified) level of government 
influence over the forces of supply and demand.297 
7.170.   The United States disagrees with this characterization, contending instead that the 
USDOC's rejection of in -country prices  requires evidence of distortions of a certain magnitude:  
[T]he question is whether the distortions in the market were of such a magnitude that 
they distorted firm -level decision -making and prevented the establishment of 
equilibrium prices determined by th e "forces of supply and demand."298 
7.171.   The United States does not purport to establish a threshold above which government 
interventions would always result in price distortions sufficient to warrant the conclusion that 
prices are not market -determined.299 Indeed,  it specifically argues that "price distortion must be 
established on a case by case basis" and contends that, in the present case, the "USDOC was 
obligated only to determine in the Section 129 proceedings whether price distortion had been 
demonstrated in the steel input markets which it clearly did."300 The United States argues that:  
The use or rejection of in -country prices is not a question of whether there are no 
"market conditions" or market forces, but rather a question of whether the market 
conditions  allow for the use of an in -country benchmark or call for the use of an 
out-of-country benchmark.301 
7.172.   This view accords with our understanding of Article 14(d) of the SCM Agreement in light of 
relevant prior WTO rulings.302 In particular, we consider that the o utcome of the inquiry necessary 
to identify an appropriate benchmark, including the decision whether the circumstances in a 
particular investigation justify use of an out -of-country benchmark, will depend on the facts of 
each case.  
7.173.   We therefore do not con sider that "the hypothetical tipping point at which government 
intervention in a market becomes distortive"303 is a necessary or even relevant part of either an 
investigating authority's decision -making process, or our consideration of the USDOC 
determinatio ns in this dispute. Rather, our task is to decide whether the USDOC's conclusion that 
in-country prices in China cannot be used as benchmarks to determine the adequacy of 
                                                
296 Appellate Body Report, US – Carbon Steel (India) , para. 4.189.  
297 China's  first written submission, para. 230.  
298 United States' first written submission, para. 253. See also response to Panel question No. 24.  
299 See e.g. United States' response to Panel question No. 25, para. 154: "[T]he United States 
respectfully declines to sp eculate on the hypothetical circumstances pursuant to which certain types, or 
degrees, of government intervention might justify, or not justify a finding of price distortion." See also 
China's  response to Panel question No. 26(b), para. 120.  
300 United States' second written submission, para. 170. See also comments on China's response to 
question No. 31, fn 178:  
To the contrary, the statement indicates (1) that a price that is not market -determined is not 
useable as a benchmark, and (2) that "go vernment intervention" may cause prices to deviate 
from a market -determined price where appropriately substantiated by record evidence and 
analysis.  
301 United States' response to Panel question No. 26, para. 157.  
302 For instance, Appellate Body Report, US – Countervailing Measures  (China) , para. 4.61:  
[A] finding of inconsistency with Article 14(d) in the selection of a benefit benchmark depends on 
whether or not the investigating authority at issue conducted the necessary market analysis in 
order to evalua te whether the proposed benchmark prices are market determined such that they 
can be used to assess whether the remuneration is less than adequate.  
303 United States' response to Panel question No. 30, para. 171.  WT/DS437/RW  
 
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  remuneration is adequately explained and is supported by the evidence on the record o f the 
Section 129 proceedings at issue.304 
7.174.   For the reasons set out above, we find that Article 14(d) does not limit the possibility of 
resorting to an out -of-country benchmark as advocated by China. We reject China's view that its 
interpretation of Article 1 4(d) is the only possible way to reconcile the recognition that 
Article  14(d) does not require a market "undistorted by government intervention" with the "very 
limited circumstances" in which out -of-country benchmarks may be used.305 While those 
circumstance s may be very limited, they are not so limited as China argues. We consequently also 
reject China's claim that the United States acted inconsistently with Articles 1.1(b) and 14(d) of 
the SCM Agreement by rejecting in -country prices without having first fo und that prices for the 
inputs in question were effectively determined by the government of China.  
7.175.   We thus proceed to consider China's arguments concerning the alleged lack of evidence 
supporting the USDOC's conclusion that the in -country prices of the in puts at issue were 
distorted.306 
7.3.3.3   Whether the evidence on the record supports the determination that in -country 
prices in China could not be used to determine the adequacy of remuneration for the 
goods at issue  
7.176.   The scope and substance of an investigating auth ority's analysis and determination of an 
appropriate benchmark will "vary depending upon the circumstances of the case, the 
characteristics of the market being examined, and the nature, quantity, and quality of the 
information supplied by petitioners and r espondents, including such additional information an 
investigating authority seeks so that it may base its determination on positive evidence on the 
record".307 In addressing China's arguments, we will review the record evidence upon which the 
USDOC based it s determinations and consider whether the evidence supports the factual findings 
made, and whether those factual findings, in light of the explanations given, support the 
USDOC's  determinations.  
7.3.3.3.1   The USDOC's factual findings in relation to in -country price s for the inputs at 
issue  
7.177.   We recall that in the Section 129 determinations at issue, the USDOC concluded with 
respect to the Pressure Pipe, Line Pipe, and OCTG proceedings that:  
[T]here are no potential benchmarks within the steel industry in the PRC that  can 
reasonably be considered usable indicators of "prevailing market conditions".308 
The USDOC reached this determination on the basis that:  
a. the GOC's response to the USDOC's questionnaires was incomplete, so that no valid 
benchmark was on the record; and  
b. the entire structure of the Chinese steel market is so distorted that private prices cannot 
be considered "market based" or usable as potential benchmarks.  
With respect to the Solar Panels proceeding, the USDOC concluded that the GOC "significantly 
distort s prices in this industry such that there are no potential benchmarks from the domestic 
industry".309  
                                                
304 See e.g. United States' response to Panel q uestion No. 30, para. 170. We agree with Canada's view 
that this analysis is "inherently fact driven and must be considered on a case -by-case basis". (Canada's 
third-party submission, para. 35).  
305 China's second written submission, para. 144.  
306 China's sec ond written submission, section C ("Under Any Interpretation of Article 14(D), The 
United  States Has Failed To Demonstrate That Chinese Prices For The Inputs At Issue Were Not 'Market' 
Prices.") See also ibid. para. 151.  
307 Appellate Body Report, US – Carbo n Steel (India) , para. 4.153.  
308 Supporting Benchmark Memorandum, ( Exhibit USA -84), p. 4.  WT/DS437/RW  
 
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  7.178.   Relevant evidence on the record includes the GOC's response to Benchmark 
Questionnaires, the two memoranda relating to benchmarks, and the Final Benchmark 
Determination.  
7.3.3.3.1.1   The Benchmark Questionnaires  
7.179.   In the four Section 129 proceedings at issue, the USDOC sent "benchmark questionnaires" 
to the GOC. These questionnaires sought information relevant to establishing whether the 
mandatory respondents acquired cer tain inputs for less than adequate remuneration "from the 
Government of the People's Republic of China".310 The GOC responded to the questionnaire within 
the prescribed deadline in three investigations (OCTG, Pressure Pipe, and Line Pipe) but did not 
reply a t all in the Solar Panels investigation.  
7.180.   The Benchmark Questionnaires covered the following matters with respect to each 
investigation:  
a. facts about the industry producing the input product: total number of producers, total 
volume and value of Chinese dome stic consumption and production of the relevant input 
product, percentage of domestic consumption accounted for by domestic production, 
total volume and value of imports, physical differences between the imported product 
and the product produced in China;  
b. existence of planning and policy documents applicable to the input industry during the 
period of investigation and addressing in particular the pricing, production, importation, 
or exportation and development of or restrictions in the production capacity of the input 
product;  
c. export or price controls on the input product during the period of investigation and the 
previous two years;  
d. VAT, import/export tariff rates, quotas, export licensing in force, restrictions on foreign 
investments;  
e. list of industries  in China purchasing the input product directly, breakdown of the 
production by regions/provinces;  
f. barriers to domestic trade;  
g. bankruptcy rules applicable to the industries producing the inputs;  
h. possible sources of information on supply and prices of th e main raw material inputs into 
the input product, demand for the input product, other factors affecting supply or price 
of the input product; and  
i. list of all producers in the input product industry including level of production, level of 
government owners hip, whether they are designated as SOEs or owned by 
central/sub -central SASAC, or are otherwise government -related entities. Whether any 
government authority has approval authority over mergers, acquisitions, capacity 
addition, or reduction for the produc ers. 
7.181.   The United States describes the scope of the requested information as covering:  
[T]he structure of the relevant input industry, as well as information regarding all 
industrial laws, plans, and policies that applied to the input markets during the 
relevant periods of investigation. The USDOC additionally requested information 
regarding any export restrictions on the relevant inputs during the periods of 
investigation and barriers to market entry and exit. Further, the USDOC requested 
                                                                                                                                                  
309 Supporting Benchmark Memorandum, (Exhibit USA -84), p. 9.  
310 USDOC Benchmark Questionnaire, (Exhibit USA -121), p. 1.  WT/DS437/RW  
 
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  information on any  domestic or foreign investment restrictions and any other "market 
conditions, trends, and developments" for the goods.311  
7.182.   In light of the scope of the information sought, the Benchmark Questionnaires were, in our 
view, appropriate to elicit information rel evant to the necessary case -by-case factual inquiry 
contemplated by the Appellate Body in the original proceedings in this case:  
[I]n conducting the necessary analysis to determine whether in -country prices are 
distorted or market -determined, an investiga ting authority may be called upon to 
examine, depending on the relevant circumstances, "the structure of the relevant 
market, including the type of entities operating in that market, their respective market 
share, as well as any entry barriers. It could al so require assessing the behaviour of 
the entities operating in that market in order to determine whether the government 
itself, or acting through government -related entities, exerts market power so as to 
distort in -country prices."312 
7.183.   In addition to the inf ormation received from the GOC in responses to the Benchmark 
Questionnaires, the USDOC also compiled information in two memoranda, the "Benchmark 
Memorandum" and the "Supporting Benchmark Memorandum", published on 7  March  2016 and 
incorporated in the recor d of each of the four Section 129 proceedings at issue.313 
7.3.3.3.1.2   The memoranda  
7.184.   The two memoranda relating to benchmarks set forth evidence and analysis relevant to the 
following question:  
[W]hether prices of the relevant inputs from sources other than the providers of the 
financial contributions in question are market -determined and thus suitable as 
benchmarks when examining whether government goods are being provided for less 
than adequate remuneration in a [countervailing duty] proceeding.314  
7.185.   Their content  can be described as follows:  
a. The Benchmark Memorandum focuses "on the nature and role of SIEs in China in 
general, as well as the role of China's government (the GOC) in the steel industry". It 
also examines "the impact of the GOC's role in SIEs and the steel market on any private 
entities supplying the market in China for those goods, and the extent to which prices 
from such entities are distorted".315 
b. The Supporting Benchmark Memorandum focuses on the four input products at issue. It 
finds that the record  did not contain the information necessary to carry out an 
input-specific market analysis. The USDOC thus resorted to facts available in each 
investigation to determine whether the price of the input product at issue was 
"market -determined".316  
The Benchmar k Memorandum  
7.186.   The Benchmark Memorandum, in discussing the nature and role of SIEs in China in 
general, as well as the role of the GOC in the steel industry, covers three topics:  
a. the role of SIEs in general as a tool used by governments to pursue policy go als;  
                                                
311 United States' response to Panel question No. 34 , para. 177. (fns omitted)  
312 Appellate Body Report, US – Countervailing Measures (China) , para. 4.52 (quoting Appellate Body 
Report, US – Carbon Steel (India) , fn 754).  
313 Benchmark Memorandum, (Exhibit CHN -20), fn 8. In its final benchmark determinations,  the USDOC 
refers to the Benchmark Memorandum and Supporting Benchmark Memorandum as the "Benchmark 
Preliminary Determination Memoranda" and additionally refers to "Benchmark Preliminary Determinations". 
(Final Benchmark Determination, (Exhibit CHN -21), p.  2). 
314 Benchmark Memorandum, (Exhibit CHN -20), p. 2.  
315 Benchmark Memorandum,  (Exhibit CHN -20), p. 3. (fn omitted)  
316 Supporting Benchmark Memorandum, (Exhibit USA -84), pp. 5 -8. WT/DS437/RW  
 
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  b. the role of SIEs in the Chinese economy; and  
c. government intervention in the Chinese steel sector.  
It sets forth the following factual findings:  
a. Government industrial policies in China guide the micro -economic decisions made by 
SIEs.317 
b. The GOC interv enes in firm -level business decisions such as investments and 
development plans, appointments to the board and management, mergers, and 
acquisitions.318  
c. China's SIEs operate in a "soft budget" environment due to the receipt of direct and 
indirect benefits.319  
d. Competition from the non -state sector is constrained by investment guidelines issued by 
the GOC.320 
7.187.   The Benchmark Memorandum concludes that:  
In light of this operating environment, which is characterized by intensive government 
intervention, control and ex pectations … Chinese SIEs do not operate as true 
commercial actors because they are not necessarily subject to the conditions one 
would expect in a truly competitive market.321 
7.188.   Regarding the steel sector specifically, the Benchmark Memorandum sets forth the 
following factual findings:  
a. The steel industry is a "pillar" industry in China.322 
b. Excess capacities exist in the steel industry and the GOC intervenes to regulate 
capacities.323  
c. The same government interventions noted for SIEs in general occur in the steel sector, 
including appointment of directors and senior executives; subsidies in the form of cheap 
energy, etc.324  
7.189.   The USDOC concluded, referring to the above findings, that the prices in the domestic 
market of steel inputs produced by China's SIEs cannot be considered to be "market -determined" 
for purposes of a benchmark analysis under Article 14(d) of the SCM Agreement.325  
7.190.   In addition, regarding prices other than those of SIEs (private producer and import prices) 
for steel inputs in China, the USDOC found tha t:  
a. SIEs hold a significant market share of overall production in China's steel sector.326  
                                                
317 Benchmark Memorandum, (Exhibit CHN -20), p. 8.  
318 Benchmark Memorandum, (Exhibit CHN -20), p. 9.  
319 Benchmark Memorandum, (Exhibit CHN -20), fn 62.  
320 Benchmark Memorandum, (Exhibit CHN -20), p. 18.  
321 Benchmark Memorandum, (Exhibit CHN -20), p. 21.  
322 Benchmark Memorandum, (Exhibit CHN -20), p. 21 and fn 79 (referring to a 2010 report  by the 
World Bank).  
323 Benchmark Memorandum, (Exhibit CHN -20), p. 24 and fn 100 (referring to inter alia  the 2005 Iron 
and Steel Industry Policy ( National Development and Reform Commission  Order n° 35), which details 
production scales, investments, technol ogies, and geographical locations).  
324 Benchmark Memorandum, (Exhibit CHN -20), p. 26 and fn 109.  
325 Benchmark Memorandum, (Exhibit CHN -20), p. 26.  
326 Benchmark Memorandum, (Exhibit CHN -20), p. 27 and fn 117.  WT/DS437/RW  
 
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  b. The market structure is characterized by the presence of many SIE steel producers that 
are shielded from competitive market forces and government intervention, so tha t even 
a minority presence of SIEs leads to the distortion of private prices.327  
c. Export restraints on steel input products were in place during the periods of investigation 
(including taxes on exports of all three products).328  
d. Restrictions on foreign invest ment in the steel sector were in place during this period.329 
7.191.   The USDOC found that, in this context, "[p]rivate producers will have little choice but to 
follow the lead set by the dominant SIEs in China's steel industry". It concluded that, based on the 
record in the Section 129 proceedings, all in -country private prices are distorted.330  
The Supporting Benchmark Memorandum  
7.192.   The Supporting Benchmark Memorandum explains the USDOC's decision to resort to facts 
available in the four Section 129 proceedings at issue, as well as the conclusions reached by the 
USDOC.  
7.193.   With regard to the Solar Panels investigation, the USDOC stated that on 4 June 2015 it 
requested information from the GOC in relation to the polysilicon market in the PRC.331 On 
6 July 2015, the GOC res ponded that it would not provide the information requested.332 The 
USDOC thus relied on facts available on the record, including:  
a. an excerpt from the original petition pointing to a WTO panel report finding that the GOC 
maintains WTO -inconsistent export res traints on silicon exports;  
b. a 2009 New York Times article explaining that the GOC's State Council has the ability to 
manage key aspects of the solar grade polysilicon industry, including capacity, access to 
land use, and lending from state -owned commercia l banks;  and  
c. excerpts from the original petition showing, on the basis of articles, that the largest 
polysilicon producer in China sold polysilicon below cost, due to the assistance of 
government subsidies.333  
7.194.   The USDOC concluded that the record supported a determination that the 
GOC's  involvement in the Chinese solar grade polysilicon industry significantly distorts the prices in 
this industry, such that there were no potential benchmarks from the domestic industry that could 
be considered "market based" i n accordance with the SCM Agreement.334 
7.195.   With regard to the three steel inputs, the Supporting Benchmark Memorandum states that 
the "GOC provided incomplete information regarding the producers in the hot -rolled steel, steel 
rounds and stainless steel coils ma rkets".335 The USDOC therefore decided to extend to the 
markets for the three specific inputs in question the conclusions of the Benchmark Memorandum 
regarding the steel sector, based on the evidence of "government intervention and distortions in 
                                                
327 Benchmark Memorandum, (Exhibit CHN -20), p. 28.  
328 Benchmark Memorandum, (Exhibit CHN -20), fn 122 (referring to GOC responses to questionnaires in 
the countervailing duty investigations at issue).  
329 Benchmark Memorandum, (Exhibit CHN -20), pp. 29 -30 and fn 125 (referring to an article from the 
Wall Street Journal which indicates that an investment by Mittal was blocked in 2005).  
330 Benchmark Memorandum, (Exhibit CHN -20), p. 30. Footnote 127 of the Benchmark Memorandum  
adds that, in the absence of significant imports of steel inputs in China, sellers of impor ted steel inputs are 
"price -takers selling at the rates that prevail". Therefore, the "finding of distortion extends to the prices of 
imports into China of the input in question".  
331 USDOC Benchmark Questionnaire, (Exhibit USA -121). The questionnaire covere d four countervailing 
duty investigations (Pressure Pipe, Line Pipe, OCTG, and Solar Panels).  
332 GOC Benchmark Questionnaire response, (Exhibit USA -122). 
333 Supporting Benchmark Memorandum, (Exhibit USA -84), pp. 8 -9. 
334 Supporting Benchmark Memorandum, (Exhi bit USA -84), p. 9.  
335 Supporting Benchmark Memorandum, (Exhibit USA -84), p. 6.  WT/DS437/RW  
 
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  the steel s ector, of which hot -rolled steel, steel rounds and stainless steel coils [the three inputs in 
question] are a part".336 
7.196.   We now turn to China's argument alleging that the USDOC failed to provide a reasoned 
and adequate explanation for its determinations.  
7.3.3.3.2   Whether the USDOC's factual findings support the conclusion that in -country 
prices in China are not "market -determined"  
7.197.   China contends that the USDOC "identifies no economic connection between the 
SIE-related factors that represent the overwhelming basis for its findings and the prices charged 
by at least half of the domestic Chinese suppliers of the products at issue".337 In particular, 
according to China, the record contains no explanation as to how the "pervasive government 
intervention" identified by the USD OC in the Benchmark Memorandum affected SIE and non -SIE 
prices in China for the inputs at issue during the period of investigation:  
Neither the United States, nor the USDOC before it, has substantiated that these 
"interventions" affected the prices charged  by either SIE or non -SIE suppliers of the 
three relevant inputs. … Thus, even taking the existence of these "interventions" at 
face value, the United States has failed to establish any causal pathway between the 
"interventions" that the USDOC relied upon and its conclusion that domestic Chinese 
prices were determined by market forces within "narrow and predetermined 
parameters".338  
7.198.   China adds that "the USDOC … failed to identify any causal pathway by which the pricing 
behaviour of SIEs affected the prices c harged by non-SIE suppliers. The answer cannot be the 
possession and exercise of market power by SIEs, because the USDOC made no such finding."339 
More specifically, China asserts:  
a. "[A]t no point in its analysis does the USDOC identify evidence on the record to support 
the conclusion that the GOC influences the prices at which SIEs sell their products, much 
less that it determines those prices."340  
b. None of the economic planning documents referenced in the memoranda "refers to, 
much less determines, the p rices at which either private or publicly -owned steel 
producers sell their output".341  
c. The USDOC fails to demonstrate that export restraints on the three steel input products 
at issue and alleged upstream subsidies granted to input suppliers in China had an  
impact on SIE steel prices, or that "such an effect, if it existed, affected the prices 
charged by other steel producers in the market".342  
7.199.   The United States explains that "the specific mode of analysis used by USDOC in the 
determinations at issue was to e xamine whether prices within the steel sector were reflective of 
'market conditions', using the standard of the Appellate Body in EC-Large Civil Aircraft (AB) . In 
particular, the USDOC determined whether prices in China's steel sector resulted from 'the 
discipline enforced by an exchange that is reflective of supply and demand of both buyers and 
sellers in the market.'"343 The United States considers that, in carrying out this assessment, an 
investigating authority may consider the following factors, dependin g on the relevant 
circumstances:  
                                                
336 Supporting Benchmark Memorandum, (Exhibit USA -84), p. 6.  
337 China's first written submission, para. 213.  
338 China's second written submission, para. 161.  
339 China's second written submission, para. 167. (emphasis original)  
340 China's first written submission, para. 269.  
341 China's first written submission, para. 274.  
342 China's first written submission, para. 282.  
343 United States' response to Panel question No. 35, para. 180 (quoting Appellate Body Report, EC and 
certain member States – Large Civil Aircraft , para. 981).  WT/DS437/RW  
 
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  [T]he structure of the relevant market, including the type of entities operating in that 
market, their respective market share, as well as any entry barriers. It could also 
require assessing the behaviour of the entities o perating in that market in order to 
determine whether the government itself, or acting through government -related 
entities, exerts market power so as to distort in -country prices.344 
For the United States, the USDOC was "not required to analyze specific pric es for the relevant 
inputs to determine that SIE and private prices in China's steel and polysilicon sectors are not 
market -determined".345  
7.200.   At the outset, we recall that the information collected and summarized in the Benchmark 
Memorandum focuses on governm ent intervention in the Chinese economy as a whole and the 
steel sector generally346, rather than on the specific input markets at issue. The Supporting 
Benchmark Memorandum only refers to the specific input markets at issue in discussing export 
restraints o n the three products during the relevant periods of investigation.347 It also confirms 
that the USDOC did not consider that it was necessary to proceed with a detailed analysis of the 
specific markets for the inputs at issue:  
In light of the foregoing, a de tailed analysis of the specific markets for hot -rolled steel, 
steel rounds and stainless steel coils is not integral to our finding of market 
distortion.348 
7.201.   Before us, the United States explains that "[t]o the extent country -or sector -wide laws, 
policies, or  other evidence are relevant to evaluating price distortion for a particular input market, 
that evidence can be used to support an investigating authority's analysis of the 'prevailing market 
conditions' for the good in question."349 In addition, the United States argues that:  
[The] "equilibrium price established in a market" [results] "from the discipline 
enforced by an exchange that is reflective of the supply and demand of both sellers 
and buyers in that market." … Where, as in China's steel sector, one s ide of the 
equation (supply) continually fails to respond to the other side of the equation 
(demand), it cannot be said that the resulting prices reflect a market equilibrium of 
supply and demand.350  
The United States further argues that:  
 
a. "widespread sect oral intervention meant that SIEs were constrained in their ability to 
pursue commercial outcomes, and even if they were not so constrained, their 
commercial motivations themselves would be distorted by preferential treatment and 
subsidization"351;  
b. "broad -based governmental intervention in favor of the state share of the 
economy  … 'distorts market signals for all participants in the sectors, just as surely as 
does the presence of monopoly market power'"352;  
c. "forced mergers and acquisitions and the presence of  export taxes … artificially 
depressed prices for the relevant steel inputs during the period of investigation"353; and  
                                                
344 Appellate Body Report, US – Countervailing Measures (China), para. 4.52; and United States' first 
written submission, para. 275.  
345 United State s' response to Panel question No. 35, para. 179.  
346 Benchmark Memorandum, (Exhibit  CHN-20), sections III and IV.  
347 Supporting Benchmark Memorandum, (Exhibit USA -84), p. 4.  
348 Supporting Benchmark Memorandum, ( Exhibit USA -84), p. 5.  
349 United States' response to Panel question No. 26(a), para. 161.  
350 United States' first written submission, para. 254. See also Benchmark Memorandum,  
(Exhibit  CHN-20), p. 28.  
351 United States' second written submission, para. 179. See also Benchmark Memora ndum,  
(Exhibit  CHN-20), p. 28.  
352 United States' second written submission, para. 180 (quoting Benchmark Memorandum,  
(Exhibit  CHN-20), p. 28). See also Benchmark Memorandum,  (Exhibit CHN -20), p. 30.  WT/DS437/RW  
 
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  d. "the GOC exercises various levers of control over commercial actors in China's steel 
sector, with the result that these actors operate wi thin a set of narrow and 
predetermined parameters. These narrow parameters mean that these commercial 
actors in China are not responding to supply and demand in the market in a manner 
which permits an equilibrium price to be established."354 
7.202.   We recall that a n analysis of the market in the country of provision is necessary to 
determine whether particular in -country prices can be relied upon as a proper benchmark.355 In 
our view, an investigating authority may carry out such a market analysis at different levels of 
detail with respect to the products in question, depending on the circumstances of the case. We 
see nothing in the text of Article 14(d) of the SCM Agreement or prior disputes that would preclude 
an investigating authority from taking a broader approach  to the question of whether in -country 
prices in the country of provision can serve as the basis of a proper benchmark.  
7.203.   However, we recall that a determination that the price of certain inputs is not 
market -determined must be based on positive evidence an d supported by a reasoned and 
adequate explanation. Investigating authorities must undertake a case -specific analysis, which 
"encompasses a requirement to conduct a sufficiently diligent investigation into, and solicitation of, 
relevant facts and to base [ the] determination on positive evidence on the record".356  
7.204.   We also recall that:  
Proposed in -country prices will not be reflective of prevailing market conditions in the 
country of provision when they deviate from a market -determined price as a result of  
governmental intervention in the market.357 
7.205.   In view of the fact that government intervention may, in principle, affect supply or demand 
for a certain good in any market and in view of the fact that "the possibility under Article 14(d) for 
investigating authori ties to consider a benchmark other than private prices in the country of 
provision is very limited"358, it is important that a decision to reject in -country prices as a 
benchmark be supported by a reasoned and adequate explanation as to how government 
interv ention distorts the price of the inputs at issue. Evidence of widespread government 
intervention in the economy, without evidence of a direct impact on the price of the good in 
question or an adequate explanation of how the price of the good in question is  distorted as a 
result, will not suffice to justify a determination that there are no "market -determined" prices for 
the good in question which can be used for purposes of determining the adequacy of remuneration 
for government -provided goods. Nor will a p resumption that government intervention in the 
market necessarily results in price distortions for the goods in question suffice to support the 
conclusion that in -country prices for the input at issue may be rejected as a benchmark. An 
investigating author ity must explain how government intervention in the market results  in 
in-country prices for the inputs at issue deviating from a market -determined price.  
7.206.   The record of the four Section 129 proceedings at issue and the arguments of the 
United  States clearl y show that the USDOC did not find it necessary to demonstrate how the 
actions of the GOC influenced the in -country price of the inputs at issue. The USDOC did not even 
                                                                                                                                                  
353 United States' second written submission, para. 181. See  also Benchmark Memorandum,  
(Exhibit  CHN-20), p. 29.  
354 United States' second written submission, fn 341.  
355 Appellate Body Report, US – Carbon Steel (India) , para. 4.154.  
356 Appellate Body Report, US – Carbon Steel (India) , para. 4.190. See also ibid. para. 4.152:  
Article VI:3 of the GATT 1994 has been interpreted to impose certain requirements on 
investigating authorities. The Appellate Body has stated that, "under Article VI:3 of the 
GATT  1994, investigating authorities, before imposing countervailing duti es, must ascertain the 
precise amount of a subsidy attributed to the imported products under investigation." The 
Appellate Body has further explained that the obligation under Article VI:3 "encompasses a 
requirement to conduct a sufficiently diligent 'inve stigation' into, and solicitation of, relevant facts 
and to base its determination on positive evidence in the record". As we see it, the obligation 
under Article 14 of the SCM Agreement to calculate the amount of a subsidy in terms of the 
benefit to the r ecipient encompasses the same requirement.  
(fns omitted)  
357 Appellate Body Report, US – Carbon Steel (India) , para. 4. 155. (emphasis added)  
358 Appellate Body Report, US – Softwood Lumber IV , para. 102.  WT/DS437/RW  
 
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  attempt to provide a reasoned and adequate explanation for its determinations that in -country 
prices for steel rounds and billets (OCTG), stainless steel coil (Pressure Pipe), hot -rolled steel (Line 
Pipe), and polysilicon (Solar Panels) were distorted as a result of pervasive government 
intervention in the Chinese domestic markets for these inputs, and therefore were not 
market -determined. Rather, the USDOC outlined governmental involvement in the relevant 
markets and, on that basis alone, determined that it could not use in -country prices of the relevant 
inputs to assess the adequacy of remu neration. We therefore find that the USDOC failed to explain 
how government intervention in the market resulted  in domestic prices for the inputs at issue 
deviating from a market -determined price.  
7.3.3.3.3   Whether the USDOC disregarded evidence regarding prices for  the inputs at 
issue  
7.207.   China considers it "self -evident that any evaluation of how Chinese steel prices were 
determined during the period 2006 -2008 should begin with a review of what those prices were".359  
7.208.   China asserts that the USDOC failed to consider prices for the inputs at issue, including 
price information placed on the record of the investigations by respondents. According to China, 
the "USDOC's determinations never refer to any Chinese steel prices, let alone analyse the 
determinants of those pric es"360 and the USDOC "avoided any examination of actual Chinese steel 
prices …".361 In addition, China argues that, "[f]or the most part … the USDOC's questions were 
not relevant to the analysis required under Article 14(d)".362 In particular, China contends tha t 
"[t]he USDOC did ask two questions that somewhat relate to [whether in -country prices are 
determined by the interplay of supply and demand] but neither question directly requested market 
prices for the inputs".363 
7.209.   It is not disputed that in the underlying investigations, the USDOC did not request 
evidence of actual prices for the goods at issue in China.364 As discussed above, the questionnaires 
issued focused on evidence of government intervention in each sector; on economic indicators for 
each sector, inclu ding data on production and consumption volume and value; and on factors 
which may have an impact of prices; but they did not request information concerning 
remuneration in arm's length transactions for the goods at issue. Nevertheless, the GOC and the 
petitioners in three of the four investigations did submit price information.  
7.210.   There is no indication that the USDOC tried to obtain information on arm's length prices for 
the inputs at issue from sources in China other than the GOC or respondents. In this co ntext, the 
USDOC stated that:  
It would be … difficult, if not impossible, to collect additional data from firms that are 
not subject to individual examination in a given proceeding, i.e., firms that have not 
been selected as respondents. The Department, l ike any trade remedy investigating 
authority, does not have an enforceable manner in which to request this data from 
firms not selected to be respondents in [countervailing duty] proceedings and it has 
no ability to compel, even selected firms, to provide information on their prices or 
pricing strategies.365  
7.211.   Nevertheless, the USDOC stated in the Supporting Benchmark Memorandum that in the 
Pressure Pipe, Line Pipe, and OCTG investigations:  
                                                
359 China's first written submission, para. 253.  
360 China 's first written submission, para. 253.  
361 China's first written submission, para. 257.  
362 China's response to Panel question No. 34, para. 165.  
363 China's response to Panel question No. 36, para. 170. See also ibid. para. 171: "Question 16(a) 
requests inform ation concerning 'prices of the main raw material inputs to the input product' (not prices of the 
input itself), while question 16(c) requests information concerning 'other factors affecting supply or price of the 
input in question'. Neither question reque sted actual market prices for the inputs at issue."  
364 China's response to Panel question No. 36; United States' comments on China's response to Panel 
question No. 36. See also China's second written submission, para. 154.  
365 Final Benchmark Determination, ( Exhibit CHN -21), pp. 20 -21. WT/DS437/RW  
 
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  [T]he Department examined potential benchmarks to determine whether t hose 
benchmarks were market -determined, such that they could be used to assess the 
adequacy of remuneration in accordance with Article 14(d) of the SCM Agreement.366  
7.212.   We recall that the necessary investigation and analysis to determine a proper benchmark 
will vary depending upon the circumstances of the case, the characteristics of the market being 
examined, and the nature, quantity, and quality of the information supplied by petitioners and 
respondents, including such additional information an investigating authority seeks so that it may 
base its determination on positive evidence on the record.  
7.213.   Based on the foregoing, and in light of the facts before us, we are of the view that there is 
a significant difference between the Solar Panels Section 129 proceeding , in which the GOC did not 
respond to the USDOC's request for information at all, and the Line Pipe, Pressure Pipe, and OCTG 
Section 129 proceedings, in which the GOC did respond and submitted information on allegedly 
arm's length prices for the three inpu ts at issue. We therefore address them separately below.  
7.3.3.3.3.1   The Pressure Pipe, Line Pipe, and OCTG Section 129 proceedings  
7.214.   In these three Section 129 proceedings, the record contains price information for the 
inputs at issue from three sources:  
a. A document pr ovided by the GOC and entitled "China's steel market and price research 
report" (the Mysteel Report), which sets out domestic steel prices during the 
period  2006-2008, with a breakdown per category of input: stainless steel coil, hot rolled 
steel, steel bi llet. This report comprises a "[l]ist of [monthly] market prices of stainless 
steel coil, hot -rolled steel and steel billets in some typical areas during 2006 -2008".367 
b. The purchase data of the respondent companies for the inputs at issue.  
c. A data series of monthly average domestic Chinese prices compiled from two sources, 
the Steel Benchmarker and Mysteel, and submitted for the record in the OCTG and Line 
Pipe investigations by the petitioners.368  
The USDOC questioned the relevance of the price information pr ovided because:  
a. neither the GOC nor the petitioners were able to distinguish price data pertaining to the 
provision of goods by SIEs on the one hand and private suppliers on the other369;  
b. the purchase data of the respondent companies for the inputs at issu e – which did 
distinguish between SIEs and private suppliers – was "very limited" and insufficient to 
assess "whether such data can be fairly viewed as a representative sample"370; and  
c. the GOC failed to provide data on domestic consumption of the inputs in terms of either 
volume or value.371  
The USDOC concluded that the record did not contain any evidence of arm's length prices for the 
goods in question which could be used for assessing the adequacy of the remuneration.  
 
7.215.   We are mindful that a panel reviewing an investigating authority's determination may not 
undertake a de novo  review of the evidence or substitute its judgement for that of the 
investigating authority. At the same time, a panel must not simply defer to the conclusions of the 
investigating authority. In keeping with this standard of review, we will consider the 
                                                
366 Supporting Benchmark Memorandum, ( Exhibit USA -84), p. 4.  
367 Ordover Report, ( Exhibit CHN -19). The document describes the prices as collected "from local major 
steel dealers or steel plant sales companies, which must be representative … Mysteel spot market price is the 
spot batch closing price of that very date not covering cost for delivery of cargo from storage and 
transportation expenses, with product quality meeting national standards."  
368 Final Benchmark Determination , (Exhibit CHN -21), p. 20 and fn 85.  
369 Final Benchmark Determination,  (Exhibit CHN -21), pp. 19 -20. 
370 Final Benchmark Determination,  (Exhibit CHN -21), p. 19 and fn 83.  
371 Supporting Benchmark Memorandum, ( Exhibit USA -84), p. 5.  WT/DS437/RW  
 
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  USDOC's  determinations to decide whether, in light of the evidence and arguments, and the 
explanations given, its conclusions rejecting the price evid ence on the record and concluding that 
the record contained no domestic price information suitable for use as a benchmark to assess the 
adequacy of remuneration for steel inputs, were such as could be reached by a reasonable and 
objective investigating aut hority.  
7.216.   The USDOC explained why it considered that the "main source of such prices available to 
the Department", the prices paid by respondent companies to their supplier firms, were not 
representative. In particular, the USDOC explained that "the total vo lume of steel rounds 
purchased by the firms examined in the OCTG investigation are small relative to the PRC's total 
domestic production of steel rounds during the same period [and] the records for Line Pipe and 
Pressure Pipe yield similarly small ratios."372 No record evidence to the contrary has been brought 
to our attention that would undermine the USDOC's conclusion. In our view, it was not 
unreasonable for the USDOC to conclude that the limited data set, in relation to the size of 
domestic production, me ant the price information could not be relied upon as representative.   
7.217.   We note that additional data on arm's length transactions for the goods in question in 
China was apparently not requested by the USDOC. In this regard however, the USDOC stated 
that it  did not have "an enforceable manner in which to request this data from firms not selected 
to be respondents in [countervailing duty] proceedings and it has no ability to compel, even 
selected firms, to provide information on their prices or pricing strate gies".373 China does not argue 
that this information was otherwise available.  
7.218.   We recall that the price information provided by the petitioners and by the GOC did not 
distinguish between pricing data "from sources that might be characterized as SIEs as oppos ed to 
private entities".374 Given that "proper benchmark prices may be drawn from a variety of potential 
sources, including private or government -related entities"375, price information which does not 
distinguish between SIE suppliers and private suppliers may  nonetheless be relevant to an analysis 
of the adequate remuneration for the inputs at issue. There is nothing on the record of the 
investigations to suggest that the USDOC considered this possibility, and certainly no explanation 
of why the information su bmitted was not relevant in this case, if that was its conclusion.   
7.219.   Moreover, it seems clear that the USDOC failed to consider the price data placed on the 
record by the GOC. China asserts:  
China placed on the record of the Section 129 proceedings detail ed spot market 
pricing information for the three steel products at issue. Accompanying those prices 
was a report by Mysteel summarizing the particular supply and demand factors that 
drove Chinese steel prices during the period 2006 -2008. The United States has not 
contested the accuracy of either the prices contained in the Mysteel report or 
Mysteel's summary of the supply and demand conditions that those prices reflect.376 
The record of the Section 129 proceedings shows that the Mysteel Report was largely ign ored by 
the investigating authority. Neither the Benchmark Memorandum nor the Supporting Benchmark 
                                                
372 Final Benchmark Determination,  (Exhibit CHN -21), fn 83.  
373 Final Benchmark Determination,  (Exhibit CHN -21), pp. 20 -21. 
374 Final Benchmark Determination,  (Exhibit CHN -21), p. 20. See also United States'  first written 
submission, para.  239.  
375 Appellate Body Report, US – Carbon Steel (India) , para. 4.151:  
Because Article 14(d) requires that the assessment of the adequacy of remuneration for a 
government -provided good must be made in relation to prevailing market conditions in the 
country of provision , it follows that any benc hmark for conducting such an assessment must 
consist of market -determined prices for the same or similar goods that relate or refer to, or are 
connected with, the prevailing market conditions for the good in question in the country of 
provision. Proper ben chmark prices would normally emanate from the market for the good in 
question in the country of provision. To the extent that such in -country prices are market -
determined, they would necessarily have the requisite connection with the prevailing market 
conditions in the country of provision that is prescribed by the second sentence of Article 14(d). 
In our view, such in -country prices could emanate from a variety of potential sources, including 
private or government -related entities.  
(emphasis original; fn omitted)  
376 China's second written submission, para. 133.  WT/DS437/RW  
 
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  Memorandum to that memorandum377, nor the Final Benchmark Determination in the Pressure 
Pipe, Line Pipe, OCTG, Wire Strand, and Solar Panels378 refer to the pric es for the inputs at issue 
set out in the Mysteel Report. Similarly, there is no explanation by the USDOC of why, in its view, 
the price data on the record did not relate to prevailing market conditions in the country of 
provision in the sense of Article 1 4(d).379  
 
7.220.   We recall that the SCM Agreement does not prescribe a specific mode of analysis for the 
determination of an appropriate benchmark for purposes of determining whether goods are 
provided for less than adequate remuneration within the meaning of Arti cle 14(d). However, when 
information which appears on its face relevant to that analysis under Article 14(d) is before the 
investigating authority, it must consider this information and, if it concludes it is not probative or 
relevant to its analysis, expl ain that conclusion. In the three proceedings at issue here, we 
conclude that the USDOC failed to adequately explain its rejection of in -country prices in light of 
the evidence before it, and we therefore cannot conclude that its determination was one that  could 
be reached by a reasonable and objective investigating authority.  
7.3.3.3.3.2   The Solar Panels Section 129 proceeding  
7.221.   In the Solar Panels Section 129 proceeding:  
a. the GOC did not provide information in response to the written questionnaire;  
b. neither the mandatory respondents, nor the GOC provided any information on 
arm's -length prices of polysilicon in China; and  
c. there is no indication on the record – and China has not argued – that such information 
was submitted or otherwise available to the USDOC.  
7.222.   In light of the above, we find that there was no relevant information on arm's -length 
in-country prices of polysilicon in China before the USDOC on the basis of which it could have 
considered a proper benchmark for purposes of determining whether goods are pro vided for less 
than adequate remuneration within the meaning of Article 14(d). We therefore find that China has 
not demonstrated that the USDOC acted inconsistently with Articles 1.1(b) and 14(d) of the 
SCM Agreement for failing to consider in -country pric es that were available on the record in this 
Section 129 proceeding.  
7.3.3.3.4   Conclusion on China's claim under Articles 1.1(b) and 14(d) of the 
SCM Agreement  
7.223.   For the reasons set out above, we find that the USDOC acted inconsistently with 
Articles  1.1(b) and 14(d)  in concluding that there were no market -determined in -country prices for 
the inputs at issue that could be used as benchmarks to determine the adequacy of remuneration 
in the four investigations at issue. In particular, the USDOC failed to explain, in the  OCTG, Solar 
Panels, Pressure Pipe, and Line Pipe Section 129 proceedings,  how government intervention in the 
market resulted  in domestic prices for the inputs at issue deviating from a market -determined 
price. In addition, in the Section 129 proceedings on Pressure Pipe, Line Pipe, and OCTG, the 
USDOC failed to consider price data on the record. For these reasons, we find that the USDOC 
failed to provide a reasoned and adequate explanation for its rejection of in -country prices in its 
benchmark determinat ions.  
7.224.   We thus conclude that China has demonstrated that the United States acted inconsistently 
with Articles 1.1(b) and 14(d) of the SCM Agreement in the OCTG, Solar Panels, Pressure Pipe, 
and Line Pipe Section 129 proceedings.  
                                                
377 Benchmark Memorandum,  (Exhibit CHN -20); Supporting Benchmark Memorandum, 
(Exhibit  USA-84). 
378 Final Benchmark Determination,  (Exhibit CHN -21). 
379 The United States dismisses the "heavy emphasis" plac ed by China on the Mysteel Report by stating 
that these "data ultimately say nothing about whether those prices also reflect the effects of sustained state 
intervention in the sector". (United States' second written submission, para.  185; response to Panel  question 
No. 36).  WT/DS437/RW  
 
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  7.4  China's claim under Article  32.1 of the SCM Agreement  
7.225.   China claims that, by making a determination that input prices in China are not 
market -determined inter alia  because "subsidies" are granted to input producers, the USDOC took 
a specific action against a subsidy other than "in ac cordance with the provisions of the 
GATT  1994", in the sense of Article 32.1 of the SCM Agreement.  
7.4.1   Main arguments of the parties  
7.226.   In support of its claim, China  argues that the USDOC found that subsidies were granted to 
Chinese suppliers of inputs and that  this was "central"380 to its decision to reject in -country 
benchmarks for those inputs.381 China considers that the rejection of in -country benchmarks then 
triggered a positive finding of subsidization of the downstream products, which, in turn, led to the 
imposition of countervailing measures. China argues that by doing so, the USDOC imposed 
countervailing duties on downstream products in order to offset subsidies granted to upstream 
products, but without complying with the disciplines set forth in the WTO Ag reements. As stated 
by China:  
In the Section 129 determinations at issue, the United States countered subsidies 
allegedly provided to the Chinese steel industry by relying upon these alleged 
subsidies as a basis for rejecting available in -country benchmar ks when evaluating the 
adequacy of remuneration for steel inputs provided to downstream producers of 
finished products.382 
7.227.   China thus considers that the preliminary and final benchmark determinations383 are 
inconsistent with Article 32.1, as each of them const itutes "specific action against subsidization" in 
the sense of this provision.384  
7.228.   The United States responds that China has failed to identify precisely the measure at issue, 
other than the imposition of countervailing duties on products exported to the United States.385 As 
a consequence, there is no other measure that "is opposed to, has an adverse bearing on, has the 
effect of dissuading the practice of subsidization of inputs, or creates an incentive to terminate 
such practices".386 The United States disag rees that the USDOC made findings of subsidization in 
relation to subsidies provided to input producers. Rather, the United States argues that it analysed 
a "range of evidence"387 – including the granting of subsidies – in order to determine if input prices 
were market -determined. According to the United States, the only actions taken against 
subsidization in the Section 129 proceedings at issue are the countervailing duties imposed on the 
goods exported to the United States, which is a permissible response t o subsidization under the 
SCM Agreement.388  
7.4.2   Evaluation by the Panel  
7.4.2.1   The measures at issue  
7.229.   The United States first argues that China has failed to comply with the requirements of 
Article 6.2 of the DSU to identify the specific measures at issue, because it identifies different 
"measures" in this Article 21.5 proceeding389:  
                                                
380 China's response to Panel question No. 55, para. 222.  
381 China quotes several excerpts of the USDOC's preliminary and final determinations on benchmarks in 
support of its claim. See for example, China's response to Panel question No. 55 , fn 201.  
382 China's response to Panel question No. 55, para. 221.  
383 The preliminary determinations at issue in the context of this claim are the Benchmark Memorandum  
and the Supporting Benchmark Memorandum of 7 March 2016. They concern four Section 129 pr oceedings: 
OCTG, Line Pipe, Pressure Pipe, and Solar Panels.  
384 China's first written submission, paras. 285 -299; second written submission, para. 184.  
385 United States' response to Panel question No. 57, para. 192.  
386 United States' response to Panel questi on No. 58, para. 195.  
387 United States' response to Panel question No. 59, para. 196.  
388 United States' second written submission, paras. 213 -214. 
389 United States' second written submission, para. 211.  WT/DS437/RW  
 
- 73 - 
 
  For example, China identifies at least three distinct items as the object of its 
challenge: i) the OCTG, Solar Panels, Pressure Pipe, and Line Pipe  section 129 
proceedings, ii) the USDOC's distortion analysis as a rationale for use of an 
out-of-country benchmark, and iii) the imposition of countervailing duties.390  
7.230.   We agree that China's presentation of the measures at issue has varied somewhat in the 
course of this proceeding. However, we con sider that China has presented its claim with sufficient 
clarity under Article 32.1. China states that its claim under Article 32.1 concerns the preliminary 
and final benchmark determinations in the OCTG, Solar Panels, Pressure Pipe, and Line Pipe 
Section 129 proceedings.391 This is consistent with China's request for the establishment of a 
panel, which states:  
China further considers that these benchmark determinations are inconsistent with 
Article 32.1 of the SCM Agreement because they constitute a specifi c action against 
subsidization not in accordance with the provisions of the SCM Agreement insofar as 
the USDOC relies on subsidies allegedly provided to upstream input producers as a 
factor to support its finding of "distortion".392 
7.231.   China argues that "within " each of these measures, the USDOC takes a specific action 
against subsidization other than in accordance with the provisions of GATT 1994, as interpreted by 
the SCM Agreement. This specific action is the USDOC's reliance upon alleged upstream subsidies 
and their assumed effects as a basis for rejecting available in -country prices as benchmarks.393  
7.232.   Based on our understanding of the measures that are the subject of China's claim, we 
therefore find that China has sufficiently identified the specific measures at issue, that these 
measures were covered by its request for the establishment of a panel, and that its claim is thus 
within the scope of this Panel's jurisdiction. We also find that the measures at issue, as described 
above, constitute acts attributable to the United States that are susceptible to being challenged in 
WTO dispute settlement.  
7.4.2.2   The legal provision at issue  
7.233.   Article 32.1 of the SCM Agreement provides that:  
No specific action against a subsidy of another member can be taken except in 
accordanc e with the provisions of GATT 1994, as interpreted by this Agreement.[*]  
[*fn original]56 This paragraph is not intended to preclude action under other relevant provisions 
of GATT 1994, where appropriate.  
7.234.   This provision applies to measures which are both "'specific' to … subsidization" and 
"'against' … subsidization". If these conditions are not met, the measure at issue cannot be subject 
to the provisions of Article 32.1.394  
7.235.   In the context of Article 18.1 of the Anti -Dumping Agreement, the phrase "specific  action 
against dumping" was interpreted as follows:  
In our view, the ordinary meaning of the phrase "specific action against dumping" of 
exports within the meaning of Article 18.1 is action that is taken in response to 
situations presenting the constitue nt elements of "dumping". "Specific action against 
dumping" of exports must, at a minimum, encompass action that may be taken only 
when the constituent elements of "dumping" are present.395 
                                                
390 United States' second written submission, para. 211 and fn 378. (emphasis original)  
391 China's response to Panel question No. 56, para. 224.  
392 China's panel request, para. 26.  
393 China's response to Panel question No. 56, para. 224.  
394 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 236.  
395 Appel late Body Report, US – 1916 Act , para. 122 (cited in Appellate Body Report, US – Offset Act 
(Byrd Amendment) , para. 238). (emphasis original; fn omitted)  WT/DS437/RW  
 
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  This finding is equally pertinent for the interpretation of Article 32.1 of the SCM Agreement 
"[g]iven that Article 18.1 of the Anti -Dumping Agreement and 32.1 of the SCM Agreement are 
identical except for the reference in the former to dumping, and in the latter to a subsidy".396 A 
"specific action against subsidization" mu st therefore, at a minimum, encompass action that may 
be taken only when the constituent elements of a subsidy are present.  
7.236.   With regard to the meaning of the phrase "specific action against subsidization", 
Article  32.1 "refers to specific action against ' a subsidy', not action against the imported subsidized 
product or a responsible entity".397 A panel confronted with a claim under Article 32.1 must 
therefore assess whether "the design and structure of a measure is such that the measure is 
'opposed to', has an adverse bearing on, or, more specifically, has the effect of dissuading the 
practice of … subsidization, or creates an incentive to terminate such practice []."398 
7.237.   In this regard, we are also mindful that:  
In undertaking the task of properly characterizin g a challenged measure, a panel 
"must thoroughly scrutinize the measure before it, both in its design and in its 
operation, and identify its principal characteristics". Moreover, "[i]n making its 
objective assessment of the applicability of specific provis ions of the covered 
agreements to a measure properly before it, a panel must identify all relevant 
characteristics of the measure, and recognize which features are the most central to 
that measure itself, and which are to be accorded the most significance for purposes 
of characterizing the relevant [measure] and, thereby, properly determining the 
discipline(s) to which it is subject under the covered agreements".399  
7.238.   We thus proceed by examining the "relevant characteristics" of the benchmark 
determinations a nd whether they constitute specific action against subsidies to upstream 
producers.   
7.4.2.3   The relevant characteristics of the benchmark determinations  
7.239.   We recall that the measures at issue may only be found inconsistent with Article 32.1 of 
the SCM Agreement if  it is demonstrated that they were taken in response to situations presenting 
the constituent elements of a subsidy, and if it is demonstrated that they are opposed to, have an 
adverse bearing on, or, more specifically, have the effect of dissuading the pr actice of 
subsidization, or create an incentive to terminate such practice.400 
7.240.   We also recall that the measures at issue are the benchmark determinations issued by the 
USDOC in the context of four Section 129 proceedings, insofar as they rely on allegations of 
subsidies granted by the GOC to producers of inputs.  
7.241.   The Benchmark Memorandum was issued in support of the USDOC's determination that 
inputs were provided for less than adequate remuneration to the producers/exporters involved in 
four investigations. M ore specifically, the USDOC "further analyzed the structure of China's steel 
market, including the role of any government intervention in the market and the types and roles of 
the entities operating therein … [and] focused on the nature and role of SIEs in  China in general, 
as well as the role of China's government … in the steel industry".401 The "subsidies" referred to in 
the Benchmark Memorandum are the "significant subsidies in the form of land, capital and inputs" 
allegedly received by "many SIEs in Chin a".402 
                                                
396 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 238. The Appellate Body 
considered that "the constituent elements of a subsidy" are encompassed in the definition of a subsidy in 
Article 1 of the SCM Agreement, i.e. a financial contribution by a government or a public body conferring a 
benefit.  
397 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 251.  
398 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 254.  
399 Panel Reports, Canada – Renewable Energy / Canada – Feed-in Tariff Program , para. 7.194 (quoting 
Appellate Body Re port, China – Auto Parts , para. 171). (emphasis original; fns omitted)  
400 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 254.  
401 Benchmark Memorandum, ( Exhibit CHN -20), pp. 2 -3. (fn omitted)  
402 China's response to Panel question No. 57, para. 228.  WT/DS437/RW  
 
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  7.242.   Based on our review of the Benchmark Memorandum, we find that these documents do 
refer to some of the constituent elements of subsidies, such as certain types of financial 
contributions (provision of land, capital, and inputs) provided by the GOC. The y also refer, at least 
implicitly403, to benefits conferred by these financial contributions, insofar as they are construed as 
"affect[ing] the true cost of production".404   
7.243.   However, contrary to what is argued by China, we also find that the alleged granting of 
subsidies to SOEs is not "central" to the USDOC's determination that domestic prices cannot be 
used as a benchmark in the Section 129 proceedings at issue. As noted by China itself in its 
response to the questions of the Panel, the USDOC "relied upon the existence of these subsidies as 
one of many factors in assessing whether prices within the Chinese steel sector are distorted".405 
More importantly for the consideration o f China's claim under Article 32.1, we find that the 
Benchmark Memorandum does not prescribe or even contemplate any "action" (direct or indirect) 
against subsidies to upstream input producers. In fact, the focus of the USDOC's analysis is on the 
adequate remuneration for inputs purchased by exporters subject to countervailing duties rather 
than on subsidies received by upstream input producers. Hence, we disagree that the relevant 
characteristics of the determinations at issue evidence a specific action ag ainst subsidies to 
upstream producers.  
7.244.   Moreover, we are not convinced that a determination to use an out -of-country benchmark 
can be properly characterized as "an action against subsidization". The choice of an appropriate 
out-of-country benchmark consiste nt with the provisions of Article 14(d) of the SCM Agreement 
does not compel a finding of less than adequate remuneration, and may potentially lead to a 
finding that the remuneration was adequate. In addition, we note that an analysis of the relevant 
marke t conditions for the inputs at issue is prescribed by the text of Article 14(d). Therefore, 
preventing an investigating authority from taking account of potential subsidies (which are not 
being countervailed and thus need not meet the definition of a subsi dy under Article 1 of the 
SCM Agreement) affecting the market price of inputs, could render the required analysis under 
Article  14(d) incomplete with respect to a relevant factor affecting market conditions for the good 
in question.   
7.245.   In view of the forego ing, we find that the relevant characteristics of the measures at issue 
do not support the conclusion that, by relying on alleged subsidies granted to input producers, 
among other factors, as a factual basis for its preliminary and final benchmark determin ations, the 
USDOC was taking a specific action against those alleged subsidies in the sense of Article 32.1 of 
the SCM Agreement.  
7.4.2.4   Conclusion on China's claim under Article 32.1 of the SCM Agreement  
7.246.   We recall that:  
[A]n action that is not "specific" withi n the meaning of … Article 32.1 of the 
SCM Agreement , but is nevertheless related to dumping or subsidization, is not 
prohibited by … Article 32.1 of the SCM Agreement .406 
7.247.   In the present case, although the Benchmark Memorandum may well be "related to 
subsidization", it does not represent or prescribe any action which is specific, or against 
subsidization, in the sense of Article 32.1 of the SCM Agreement.  
7.248.   On that basis, we reject China's argument that the reliance on subsidies to input producers 
in the determinations at issue represents specific action taken against the "'direct and indirect 
benefits' allegedly conferred upon SOEs"407 and we thus conclude that China has not de monstrated 
                                                
403 The requirement that the constituent elements of a subsidy be present can "include cases where the 
constituent elements of dumping and of a subsidy are implicit in the measure". (Appellate Body Report, US – 
Offset Act (Byrd Amendment) , para. 244).  
404 Benchmark Memorandum, ( Exhibit CHN -20), p. 3.  
405 China's response to Panel question No. 55, fn 201 (referring to Final Benchmark Determination , 
(Exhibit CHN -21), p. 12). (emphasis added)  
406 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 262 . (emphasis original)  
407 China's response to Panel question No. 55 (referring to Benchmark Memorandum, (Exhibit CHN -20), 
pp. 17 -18). WT/DS437/RW  
 
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  that the USDOC's the preliminary and final determinations in the OCTG, Line Pipe, Pressure Pipe, 
and Solar Panels investigations are inconsistent with Article 32.1 of the SCM Agreement.  
7.249.   We thus conclude that China has not demonstrated that the U nited States acted 
inconsistently with Article 32.1 of the SCM Agreement in the OCTG, Line Pipe, Pressure Pipe, and 
Solar Panels Section 129 proceedings.  
7.5  China's claim under Article 2.1(c) of the SCM Agreement in relation to de facto  
specificity  
7.250.   China clai ms that the USDOC's de facto  specificity determinations remain inconsistent with 
Article  2.1(c) of the SCM Agreement because the USDOC failed to take account of the length of 
time during which the relevant subsidy programme has been in operation. China's c laim is based 
both on the alleged improper interpretation of the requirements of the last sentence of 
Article  2.1(c) of the SCM Agreement by the USDOC and on the argument that the specificity 
determination reached by the USDOC is not supported by the evide nce on the record.408  
7.5.1   Main arguments of the parties  
7.251.   China argues that the USDOC did not properly identify a "subsidy programme" within the 
meaning of Article 2.1(c), nor did it properly take into account the length of time during which the 
subsidy programme  has been in operation. In particular, China argues that the USDOC relied upon 
evidence of the specific transactions during the period of investigation that were found to confer 
countervailable subsidies, but failed to identify a "plan or scheme" pursuant to which the subsidies 
at issue had been provided.409 China further contends that the USDOC failed to adequately identify 
all potential users of the alleged subsidy programme, and thus could not determine whether the 
actual users of the subsidy programme wer e limited in number in relation to the potentially eligible 
recipients under the subsidy programme in question.410 In addition, China argues that the USDOC 
failed to establish the duration of the alleged subsidy programme, as it based its determination 
that the subsidy programme had not been in operation "for a limited period of time only" on the 
fact that Chinese SOEs started producing the inputs at issue in the 1950s. However, China submits 
that this merely constitutes evidence, at most, that the GOC has pr ovided financial contributions 
over that period, not evidence that the GOC provided subsidies over that period, as required under 
Article 2.1(c).411  
7.252.   The United States submits that it has complied with the relevant DSB ruling as the USDOC 
"addressed the 'len gth of time' aspect of Article 2.1(c) in great detail and considered it along with 
the other Article 2.1(c) factors in reaching its specificity determinations".412 In particular, the 
United States contends that the USDOC sought information on each of the rel evant subsidy 
programmes, reviewed record evidence confirming the existence of a programme in each case, 
and reasonably and adequately explained why it found the systematic provision of inputs to 
constitute a subsidy programme in the challenged determinati ons.413 The United States further 
argues that the USDOC was not required to limit its specificity analysis to the provision of inputs 
that were provided for less than adequate remuneration, as there is no requirement, in examining 
a subsidy programme, to con sider only activities resulting in the conferral of a benefit.414 The 
United States thus contends that for the identification of a subsidy programme the "repeated 
provision of inputs need not consist exclusively of subsidized  inputs"415, and that the USDOC 
properly found the repeated provision of inputs to be a systematic series of actions as evidence of 
a subsidy programme.416 Finally, the United States argues that the evidence on the USDOC record 
supported a determination that the limited number of subsidy reci pients did not result from a 
limited duration of the subsidy programme at issue.417 
                                                
408 China's first written submission, para. 313.  
409 China's first written submission, paras. 320 -322; second written submission , paras. 199 -201. 
410 China's first written submission, paras. 323 -325; second written submission, para. 202.  
411 China's first written submission, paras. 336 -340; second written submission, paras. 205 -211. 
412 United States' first written submission, para. 287; see also second written submission, para. 242.  
413 United States' second written submission , paras. 233.  
414 United States' first written submission , paras. 293 -297. 
415 United States' second written submission , para. 235. (emphasis original)  
416 United States' first written submission , paras. 300 -301; second written submission , paras. 235 -239. 
417 United States' first written submission , paras. 288 -291; second written submission , paras.  242-243. WT/DS437/RW  
 
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  7.5.2   Main arguments of the third parties  
7.253.   The European Union submits that to establish a subsidy programme, it may suffice to show 
that individual companies "systematically" receiv ed inputs at lower than adequate value over a 
certain period of time.418 The European Union considers that where individual companies in a 
specific sector systematically receive an input in exchange for less than adequate remuneration, 
there is a strong indi cation that such a measure is "used by a limited number of certain 
enterprises", and it may not be necessary for an investigating authority to inquire whether other 
enterprises or industries had access to the same subsidy.419 The European Union further submi ts 
that, in the context of Article 2.1(c), the "entire life [of the subsidy] does not have to be assessed 
by the investigating authority"; rather, "the investigating authority must assess whether there is 
any indication that the use by a limited number of enterprises may be the result of the short 
duration of the subsidy programme", for example if "the subsidy is still in its 'start -up phase' and 
may become more broadly available in due course".420 For unwritten measures, as in the present 
case, the European Union argues that the investigating authority "must make this assessment on 
the basis of all available factual information and factual circumstances".421 
7.5.3   Evaluation by the Panel  
7.5.3.1   Introduction  
7.254.   The o riginal panel found that the USDOC acted inconsistently with Article  2.1(c) of the 
SCM Agreement by failing to take into account the two factors in the last sentence of Article 2.1(c) 
– including "the length of time during which the subsidy programme has b een in operation" – 
when it made specificity determinations in 12 of the contested countervailing duty 
investigations.422 This finding was not appealed by the United States.423 In this compliance 
dispute, we are thus confronted with the question of whether the  United States' revised input 
specificity determinations in the Section 129 proceedings at issue comply with Article 2.1(c).  
7.255.   Article 2.1(c) provides that "if, notwithstanding any appearance of non -specificity resulting 
from the application of the principl es laid down in subparagraphs (a) and (b), there are reasons to 
believe that the subsidy may in fact be specific, other factors may be considered", including "use 
of a subsidy programme by a limited number of certain enterprises". In addition, Article 2.1( c) 
provides that "account shall be taken … of the length of time during which the subsidy programme 
has been in operation" when considering whether a subsidy is, in fact, specific.  
7.256.   The starting point of an analysis of specificity is the measure that has b een determined to 
constitute a subsidy under Article  1.1.424 The assessment of specificity under Article  2 is therefore 
to be distinguished from the requirement to show the existence of a subsidy under Article 1.1, as 
"Article  2.1 assumes the existence of a financial contribution that confers a benefit, and focuses on 
the question of whether that subsidy is specific ".425 Accordingly, the specificity requirement of 
Article  2 is concerned with establishing a limitation on access to a subsidy, not the existence of  the 
subsidy itself, which is dealt with under Article 1.1.426 
7.257.   Therefore, once an investigating authority has established the existence of a subsidy 
during the period of investigation, it must, as part of its specificity analysis: consider whether the 
factor s in the second sentence of Article 2.1(c) are present , including "use of a subsidy programme 
by a limited number of certain enterprises"; and take account of the length of time during which 
the subsidy programme has been in operation.  
                                                
418 European Union's third -party submission, para. 77.  
419 European Union 's third -party submission, para. 78.  
420 European Union's third -party submission, para. 83.  
421 European Union's third -party submission, para. 82.  
422 Panel Report, US – Countervailing Measures (China) , paras. 7.257 and 8.1(v).  
423 Appellate Body Report, US – Countervailing Measures (China) , para. 4.156.  
424 Appellate Body Report, US – Countervailing Measures (China) , para. 4.140 (referring to Appellate 
Body Report, US – Large Civil Aircraft (2nd complaint) , para. 747 ). 
425 Appellate Body Report, US – Countervailing M easures (China) , para. 4.144. (emphasis original)  
426 Panel Report, US – Countervailing Measures (China) , para. 7.236; see also Panel Report, US – 
Anti-Dumping and Countervailing Duties (China) , para. 9.21 ("the specificity requirement is not about the 
existence of a subsidy, which is dealt with in Article  1.1, but rather about access thereto").  WT/DS437/RW  
 
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  7.258.   The reference to "a  subsidy programme" in the context of an analysis of de facto  specificity 
suggests that the de facto specificity of a subsidy is to be assessed in a "broader analytical 
framework"427 than the framework for establishing the existence of a subsidy under Articl e 1.1. In 
particular, a specificity analysis under Article 2.1 focuses not only on whether a subsidy has been 
provided to particular recipients, "but focuses also on all enterprises or industries eligible to 
receive that same subsidy".428 It is relevant to c onsider whether subsidies have been provided to 
recipients pursuant to a plan or scheme of some kind, which may be evidenced by a systematic 
series of actions pursuant to which financial contributions that confer a benefit have been provided 
to certain ent erprises.429 An examination of the existence of a plan or scheme regarding the use of 
the subsidy at issue may also require assessing the operation of such plan or scheme over a period 
of time.430 
7.259.   The phrase "account shall be taken" in the last sentence of Art icle 2.1(c) has been 
understood as imposing an obligation "to take something into reckoning or consideration; to take 
something on notice".431 Thus, in the present case, the last sentence of Article 2.1(c) requires that 
the length of time during which the re levant subsidy programme has been in operation must form 
part of the USDOC's consideration of whether the subsidy was used by a limited number of certain 
enterprises. The objective of this inquiry is to determine whether the limited number of users is 
the result of a limited access to the subsidy programme or if it is merely a consequence of the 
short period of operation of the programme.  
7.260.   With this analytical framework in mind, we proceed to examine China's argument in 
relation to the legal standard applic able to the obligation to take account of the length of time 
during which a subsidy programme has been in operation. We then turn to assess the steps taken 
by the USDOC in reaching its revised input specificity determinations.  
7.5.3.2   Whether the USDOC applied an  erroneous legal standard under the last sentence 
of Article 2.1(c) of the SCM Agreement  
7.261.   We recall that China's claim under Article 2.1(c) is based on the alleged failure of the 
USDOC to take account of the length of time during which the subsidy programme  has been in 
operation. In support of this claim, China argues that the USDOC had to identify the existence, 
content, and scope of any subsidy programme or subsidy programmes, as well as the duration of 
the programme(s) at issue.432  
7.262.   An initial point of disa greement between the parties relates to what an investigating 
authority must demonstrate in order to establish the existence of an unwritten subsidy 
programme. For China, an authority must demonstrate a systematic series of actions in which a 
financial con tribution and a benefit are granted to a recipient.433 For the United States, the focus is 
on the systematic series of actions pursuant to which the subsidy identified under Article 1.1 of the 
SCM Agreement was provided. In the present case, the United State s argues that "the repeated 
provision of inputs is evidence of the series of actions or activity that constitutes a program" 
regardless of whether that repeated provision consists exclusively of subsidized inputs.434   
7.263.   We are thus called upon to address what is required in the identification of a subsidy 
programme under Article 2.1(c), and particularly whether an investigating authority is required to 
show that subsidies (i.e. financial contributions conferring a benefit ) are systematically granted as 
part of this programme, or whether the systematic granting of a financial contribution will suffice 
to identify a subsidy programme.  
7.264.   In our view, the requirements of Article 2.1(c) should be understood in light of the 
funda mental separation between the determination that a subsidy exists under Article 1, and the 
                                                
427 Appellate Body Report, US – Countervailing Measures (China) , para. 4.141.  
428 Appellate Body Report, US – Countervailing Measures (China) , para. 4.140 (referring  to Appellate 
Body Report, US – Large Civil Aircraft (2nd complaint) , para. 753).  
429 Appellate Body Report, US – Countervailing Measures (China) , para. 4.141.  
430 Appellate Body Report, US – Countervailing Measures (China) , para. 4.142.  
431 Panel Report, EC and  certain member States – Large Civil Aircraft , para. 7.969 (referring to The New 
Shorter Oxford Dictionary , 4th edn, A. Stevenson (ed.) (Oxford University Press, 1993), p. 15).  
432 China's first written submission, paras. 314 -332. 
433 China's response to Panel  question No. 42(b), paras. 196 -197.  
434 United States' second written submission, para. 235.  WT/DS437/RW  
 
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  finding of de facto specificity under Article 2, which is based on different considerations. We recall, 
moreover, that the analysis of the existence of a subsidy pro gramme is part of the "broader 
analytical framework" prescribed in the context of a de facto  specificity analysis under 
Article  2.1(c). In particular, an examination of the existence of a plan or scheme regarding the use 
of the subsidy at issue may require  assessing the operation of such plan or scheme over a period 
of time, which is longer than the period of investigation for assessing the existence of a subsidy 
under Article 1.1 of the SCM Agreement.  
7.265.   We note in this context the finding by the Appellate B ody in the original dispute that:  
The mere fact that financial contributions have been provided to certain enterprises is 
not sufficient … to demonstrate that such contributions have been granted pursuant to 
a plan or scheme for purposes of Article 2.1(c)  of the SCM Agreement. In order to 
establish that the provision of financial contributions constitutes a plan or scheme 
under Article 2.1(c), an investigating authority must have adequate evidence of the 
existence of a systematic series of actions pursuant  to which financial contributions 
that confer a benefit are provided to certain enterprises.435 
7.266.   We read this as distinguishing the "systematic series of actions" demonstrating a 
programme from the mere grant of financial contributions to the recipients. This  is consistent with 
the ordinary meaning of the term "programme", which refers to "a plan or scheme of any intended 
proceedings (whether in writing or not); an outline or abstract of something to be done".436 Thus, 
the mere grant of financial contributions i s not enough. Those grants must be in the context of a 
programme pursuant to which subsidies are granted. Consequently, we find that in order to 
identify a subsidy programme, an investigating authority must have "adequate evidence" that the 
financial contr ibutions identified as conferring a benefit and therefore to be subsidies were made 
as part of a plan or scheme.  
7.267.   For these reasons, we consider that an investigating authority may demonstrate the 
existence of a subsidy programme based on evidence of: (a) the existence of a subsidy within the 
meaning of Article 1.1; and (b) a "plan or scheme" pursuant to which this subsidy has been 
provided to certain enterprises.  
7.268.   Another point of disagreement between the parties is whether an investigating authority 
seekin g to take account of the length of time a subsidy programme has been in operation must 
identify the total duration of the subsidy programme. China argues that "the total length of time 
during which the subsidy programme has been in operation must be taken into account", as 
Article  2.1(c) does not qualify or limit the reference to the "length of time".437 China therefore 
contends that "[w]ithout establishing the duration of the subsidy programs at issue, the USDOC 
necessarily failed to take account of the dura tion and thus violated Article 2.1(c)".438 By contrast, 
the United States submits that "Article 2.1(c) does not require an investigating authority to 
establish the total length of time during which the subsidy program has been in operation".439 
7.269.   We consider tha t the requirements of Article 2.1(c) are to be understood in connection 
with the nature and purpose of the specificity analysis at issue. In particular, we recall that "taking 
account" of the length of time during which a subsidy programme has been in oper ation is part of 
an assessment of whether a limited number of actual users of the programme can be explained by 
the short time the programme has been in operation.  
7.270.   We do not exclude that an investigating authority may, in some cases, be required to 
conside r more than individual subsidy transactions during the period of investigation in order to 
properly take account of the length of time during which the relevant subsidy programme has been 
in operation.440  
                                                
435 Appellate Body Report, US – Countervailing Measures (China) , para. 4.143.  
436 Appellate Body Report, US – Countervailing Measures (China) , fn 674.  
437 China's respon se to Panel question No. 41, para. 188.  
438 China's comments on United States' response to Panel question No. 41, para. 77. 
439 United States' response to Panel question No. 41, para. 207.  
440 As noted by the Appellate Body, "if construed too narrowly, any indiv idual subsidy transaction would 
be, by definition, specific to the recipient", and other context in Article 2.1 – including the reference to a WT/DS437/RW  
 
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  7.271.   At the same time, an investigating authority may be able to demonstrate that the duration 
of the programme is not the reason for the limited number of recipients of the subsidy, without 
establishing the total duration of the programme. Moreover, we are mindful that "a de facto  
specificity analysis under sub paragraph (c) would appear to be most pertinent and useful in the 
context of subsidies in respect of which eligibility or access limitations are not explicitly provided 
for in a law or regulation".441 For such unwritten subsidy programmes, when the condition s of 
eligibility are not explicitly set out in written instruments, there may be inherent limits in an 
investigating authority's ability to evaluate the total duration of a subsidy programme, or all past 
and potential beneficiaries.  
7.272.   It is for this reason that Article 2.1(c) "concedes a certain flexibility for investigating 
authorities to consider specificity in a number of factual scenarios that may arise" when making a 
determination of de facto  specificity, while "the last sentence of Article 2.1(c) funct ion[s] as a 
safeguard that keeps in check this flexibility".442 Depending on the different factual scenarios that 
may arise, we do not exclude that an investigating authority may comply with the obligation to 
take into account "the length of time during whic h the subsidy programme has been in operation" 
without determining the full duration of the programme in question.   
7.273.   Based on the foregoing, we do not consider that Article 2.1(c) imposes in all cases a 
requirement to establish the total duration of the pr ogramme. Rather, to comply with the 
requirement of the last sentence of Article 2.1(c), it would be sufficient to show that the 
programme has been in operation for a duration that does not itself account for "use of a subsidy 
programme by a limited number of certain enterprises".443  
7.274.   Having reached this conclusion with regard to the legal standard under Article 2.1(c), we 
proceed to assess whether the USDOC complied with this provision in its determination that the 
subsidies at issue were de facto specific. W e recall that China argues that the USDOC failed to 
demonstrate that it took account of the length of time during which the subsidy programme had 
been in operation.  
7.5.3.3   Whether the USDOC's determinations of de facto  specificity are inconsistent 
with Article 2 .1(c) of the SCM Agreement  
7.5.3.3.1   The USDOC's determinations of de facto  input specificity  
7.275.   In view of the recommendations made by the DSB444, the USDOC "revisit[ed]" its 
specificity determinations for the subsidy programmes at issue as part of its Section 129 
proce edings.445 In a memorandum issued on 31 December 2015 (Input Specificity 
Memorandum)446, the USDOC explained its "preliminary analysis of the diversification of economic 
activities and length of time" in the context of the relevant Section 129 proceedings.  
7.276.   In the Input Specificity Memorandum, the USDOC explained that a determination of 
de facto specificity due to a limited number of enterprises or industries "is based upon whether the 
subsidy is broadly available and widely used throughout the economy of the in vestigated 
                                                                                                                                                  
"subsidy programme" in Article 2.1(c) – "suggests a potentially broader framework within which to examine 
specifi city". (Appellate Body Report, US – Large Civil Aircraft (2nd complaint) , para. 749). Further, as noted by 
the Appellate Body, a specificity analysis under Article  2.1 focuses not only on whether a subsidy has been 
provided to particular recipients, "but f ocuses also on all enterprises or industries eligible to receive that same 
subsidy". Therefore, a specificity inquiry may require determining "what other enterprises or industries also 
have access to that same subsidy under that subsidy scheme" such that " [i]t is relevant therefore to consider 
not only the actual , but also the past and potential  recipients of a particular subsidy." (Appellate Body Reports, 
US – Countervailing Measures (China) , para. 4.140; US – Large Civil Aircraft (2nd complaint) , para. 753 
(emphasis original)).   
441 Appellate Body Report, US – Countervailing Measures (China) , para. 4.129.  
442 Panel Report, US – Countervailing Measures (China) , para. 7.252.  
443 See also Panel Report, EC and certain member States – Large Civil Aircraft , para. 7.970 (finding that 
"using the total amount of subsidies granted under a subsidy programme over its entire life … may not always 
be appropriate" in assessing de facto specificity under Article 2.1(c), in the context of "the granting of 
disproportionate ly large amounts of subsidy to certain enterprises").  
444 Panel Report, US – Countervailing Measures (China) , paras. 7.257 and 8.1(v).  
445 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 19.  
446 Input Specificity Memorandum , (Exhibit CHN -23). WT/DS437/RW  
 
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  country".447 The USDOC cited the example of the OCTG investigation, in which the GOC stated that 
seven industries448 used the relevant inputs (steel round and billets). On the basis of this 
information, "the [USDOC] analysed the recipients of this s ubsidy program and determined that a 
subsidy provided only to the [seven] industries was not a subsidy that was broadly available and 
widely used throughout the economy of the PRC. Therefore, the [USDOC] found this program de 
facto specific because the rec ipients were limited in number."449  
7.277.   With respect to establishing the existence of an "unwritten subsidy programme", the 
USDOC stated in its preliminary input specificity determination that, "[o]n the basis of case specific 
input purchase information, which was reported to the [USDOC] in the 12 [countervailing duty] 
investigations and compiled in the Department's Inputs Memorandum, we preliminarily find that 
there is adequate evidence in each of the 12 [countervailing duty]investigations that public bodies 
systematically provided [the relevant inputs] for [less than adequate remuneration] to produce rs 
in the PRC."450 The "Inputs Memorandum" providing "case specific information" was placed on the 
record as an attachment to the USDOC's Section 129 preliminary dete rminations, setting out 
redacted "proprietary" (i.e. confidential) information for each case with a section on input 
specificity containing an "Example of 'systematic activity'" that had redacted entries for an input 
producer, respondent, input, and number  of sales transactions.451 
7.278.   Regarding the duration of operation of the subsidy programme, the USDOC explained that 
it had asked various questions "[i]n order to give consideration to length of time in the 
Department's analysis of de facto  specificity", includ ing in the "Standard Questions Appendix"452 of 
the countervailing duty questionnaire, which requested information regarding:  
a. the date the subsidy was established453; 
b. the number of programme recipients for a four -year period (the year in which the 
respondent co mpany was approved for assistance under the programme as well as each 
of the preceding three years)454; and  
c. "with respect to the provision of inputs for [less than adequate remuneration] programs 
at issue in the 12 cases that were subject to dispute, three y ears of data regarding the 
industry providing the relevant input".455  
                                                
447 Input Specificity Memorandum, (Exhibit CHN -23), p. 2.  
448 These were the rebar, pla in bar, merchant bar, light sections, narrow strip, wire rod, and seamless 
tubes industries.  
449 Input Specificity Memorandum, (Exhibit CHN -23), pp. 2 -3 (quoting "OCTG and accompanying Issues 
and Decision Memorandum at page 15"). The underlying documents from the original investigation, for the 
OCTG and other investigations, have not been submitted on the record of these compliance proceedings.  
450 Preliminary  Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), p. 19. The 
relevant inputs cited by the USDOC were stainless steel coil, hot -rolled steel, wire rod, steel rounds, caustic 
soda, green tubes, primary aluminium, seamless tubes, standar d commodity steel billets and blooms, 
polysilicon, and coking coal . 
451 Inputs Memorandum, (Exhibit USA -126); Preliminary Determination on Public Bodies and Input 
Specificity , (Exhibit CHN -4), p. 1. The Inputs Memorandum is also an attachment to the USDOC's preliminary 
determination in Exhibit CHN -4. 
452 Input Specificity Memorandum, (Exhibit CHN -23), p. 6. The questions and responses from the 
"Standard Questions Appendix" have not been submitted on the record of these compliance proceedings.  
453 Input Specificit y Memorandum, (Exhibit CHN -23), fn 19 (quoting "e.g., Countervailing Duty 
Questionnaire Certain Kitchen Shelving and Racks from the People's Republic of China (Kitchen Racks 
Questionnaire) at Section II, Appendix I, Standard Questions A.; Countervailing Du ty Questionnaire High 
Pressure Steel Cylinders from the People's Republic of China (Steel Cylinders Questionnaire) at Section II, 
Appendix I, Standard Questions A").  
454 Input Specificity Memorandum, (Exhibit CHN -23), fn 20 (quoting "e.g., Kitchen Racks Questionnaire 
Section II, Appendix I at question F.6; Steel Cylinders Questionnaire Section II, Appendix I at question G.2"). 
The USDOC further explained that the Standard  Questions Appendix requested the GOC to "provide the 
following information, in table form, regarding the number of recipient companies and industries and the 
amount of assistance approved under this program for the year in which any mandatory company was 
approved for assistance, as well as each of the preceding three years." (Ibid. fn 2).  
455 Input Specificity Memorandum, (Exhibit CHN -23), fn 21 (quoting "e.g., Kitchen Racks Questionnaire 
at 11-5 and 11 -6: Steel Cylinders Questionnaire at II-11 through II -19"). The USDOC further explained that 
the three -year period corresponded to the year of the receipt of the subsidy and the prior two years for the 
Chinese industry selling the input at issue in each of the 12 cases. According to the USDOC, the use of a WT/DS437/RW  
 
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  7.279.   In the Section 129 proceedings at issue, the USDOC also asked in each of the 
12 proceedings: (a) how long SOEs have been producing and selling the inputs in China; (b) how 
long the inputs  have been produced in China; and (c) how long the inputs have been consumed in 
China.456 The GOC provided a response in five457 of the 12 cases covered by the Section  129 
proceedings, but did not provide a response in the seven other cases. In its responses, the GOC 
stated that SOEs started to produce and sell the inputs at issue in the PRC at some point during 
the period covered by the first Five -Year Plan (1953 -1957), and possibly earlier, and that "it is fair 
to assume that the input at issue has been consu med in the PRC" since the date of its founding.458  
7.280.   On this basis, the USDOC considered that, "at the latest, SOEs were producing and 
providing the inputs at issue in the five proceedings in which the GOC provided responses within 
the geographic location of China by 1957". For those inputs, the USDOC preliminary concluded 
that the "subsidy program ha[d] not been in operation 'for a limited period of time only' and, 
therefore, the length of time in which the subsidy program ha[d] been in operation [did] not 
change the Department's determination that the input [for less than adequate remuneration] 
programs in each of those cases were de facto  specific."459 The USDOC used the GOC's answer in 
these five cases as "facts available" in the seven cases in which the GOC did not provide response 
to its questions and reached on that basis the same preliminary determination that the subsidy 
programmes had not been in operation for a limited period of time only.460  
7.281.   This analysis was incorporated in the USDOC's preliminary Sect ion 129 determinations 
concerning de facto input specificity issued on 25 February 2016461 as well as in the final 
Section  129 determinations issued between March and May 2016.462 
7.5.3.3.2   Whether the USDOC properly established the existence of a subsidy 
programme  
7.282.   We start by noting that the original panel in these proceedings considered that the "use of 
a subsidy programme by a limited number of certain enterprises" is to be evaluated with respect 
to a "subsidy programme", and that "the starting point of an analysis o f specificity under that 
factor should be the identification of the relevant subsidy programme."463 The original panel found 
with respect to identification of a subsidy programme that evidence of a "systematic activity or 
series of activities provided an obj ective basis for the USDOC to sufficiently identify subsidy 
programmes for the purposes of the first of the 'other factors' under Article 2.1(c) of the 
SCM Agreement in the relevant specificity determinations".464 The Appellate Body considered that 
"[e]viden ce regarding the nature and scope of a subsidy programme may be found in a wide 
variety of forms", including "a systematic series of actions pursuant to which financial contributions 
that confer a benefit have been provided to certain enterprises".465 
7.283.   We hav e noted that although Article 2.1(c) does not lay down any strict rules as to how a 
"subsidy programme" is to be identified, it is relevant to consider whether subsidies have been 
provided to recipients pursuant to a plan or scheme of some kind. We have al so noted that 
although evidence of "a systematic series of actions" may be particularly relevant in the context of 
                                                                                                                                                  
three-year period was, in part, "a practical accommodation to parties in a countervailing duty proceeding" due 
to the possible difficulty of providing "detailed usage data for several past years". The USDOC considered that 
"More importantly, [its] experience h as shown that three years of data provides a reasonable reflection of the 
usage and distribution of the subsidy program at the time of its bestowal to the respondent". (Ibid. fn 25).  
456 Input Specificity Memorandum , (Exhibit CHN -23), p. 7.  
457 Pressure pipe, Line Pipe, Kitchen Shelving, OCTG, and Steel Cylinders.  
458 GOC Public Bodies Questionnaire response , (Exhibit CHN -2), response to question Nos. 7 -9, 
pp. 18-19. See also Input Specificity Memorandum, (Exhibit CHN -23), p. 7.  
459 Input Specificit y Memorandum , (Exhibit CHN -23), pp. 7 -8. 
460 Input Specificity Memorandum, (Exhibit CHN -23), pp. 8 -9.  
461 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), pp. 19 -20. 
462 Final Section 129 Determination, (Exhibit CHN -5), p. 2 (L awn Groomers, Kitchen Shelving, Wire 
Strand, Print Graphics, Aluminum Extrusions, and Steel Cylinders determinations), p. 2 (Seamless Pipe 
determination), and p. 2 (Pressure Pipe, Line Pipe, OCTG, and Solar Panels determinations).  
463 Panel Report, US – Countervailing Measures (China) , para. 7.237. We note the 
United  States'  argument in the original dispute that "[t]he subsidy programmes evaluated under Article 2.1(c) 
were the use of a specific input being provided for less than adequate remuneration by a li mited number of 
enterprises". (Ibid.  para. 7.214).  
464 Panel Report, US – Countervailing Measures (China) , para. 7.243.  
465 Appellate Body Report, US – Countervailing Measures (China) , para. 4.141.  WT/DS437/RW  
 
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  an unwritten programme466, the mere fact that financial contributions have been provided to 
certain enterprises is not sufficient to demonstrat e that such financial contributions have been 
granted pursuant to a plan or scheme for purposes of Article 2.1(c) of the SCM Agreement.  
7.284.   Turning to the "subsidy programme" identified by the USDOC, we note that the USDOC 
made findings of de facto  specificit y in its original investigations after having "analysed the 
recipients of this subsidy program" to determine that such "recipients were limited in number".467 
Further, the USDOC relied on "case specific input purchase information" to find that "public bodies  
systematically provided [inputs] for [less than adequate remuneration] to producers in the 
PRC."468 This "case specific input purchase information" was compiled in the "Inputs Memorandum" 
attached to the USDOC's preliminary specificity determination, which included information for each 
investigation under the heading "Example of 'systematic activity'" relating to: (a) the particular 
input producer; (b) the respondent; (c) the input; and (d) the number of sales transactions. The 
redacted, non -confidential ver sion of this memorandum refers to the information illustrated 
below469: 
 
In two investigations470, the "Inputs Memorandum" included similar information under the heading 
"Example of 'series of activities'" with entries for an additional respondent, as illustr ated below:  
 
This confidential information was the basis for the USDOC's finding of "adequate evidence in each 
of the 12 [countervailing duty] investigations that public bodies systematically provided" the 
relevant inputs.471  
7.285.   China criticizes the USDOC's reliance on "information already on the record of the original 
investigation documenting the purchase of inputs by respondent producers during the one -year 
period of investigation", which "consisted of nothing more than evidenc e pertaining to the specific 
transactions  that the USDOC had found to confer countervailable subsidies".472 The identification 
by an investigating authority of subsidies within the meaning of Article 1.1 may inform an analysis 
of de facto specificity and of the existence of a "subsidy programme". Indeed, it is possible "that 
the relevant 'subsidy programme', under which the subsidy at issue is granted, often may already 
have been identified and determined to exist in the process of ascertaining the existence of the 
subsidy at issue under Article  1.1".473 
7.286.   The key question in this case is whether the information relied upon by the USDOC 
supports its finding of a systematic series of actions evidencing the existence of a plan or scheme 
pursuant to which subsidies h ave been provided.  
                                                
466 Appellate Body Report, US – Countervailing Measures (China) , para. 4.141.  
467 Input Specificity Memorandum, (Exhibit CHN -23), pp. 2 -3 (quoting "OCTG and accompanying Issues 
and Decision Memorandum at page 15"). The USDOC also explained that when it "finds that a subsidy program 
is de facto  specific because there are a limited number of enterprises or industries, that determination is based 
upon whether the subsidy is broadly available and widely used throughout the economy of the investigated 
country".  (Ibid. p. 2).  
468 Preliminary Determination on Public Bodies and Inp ut Specificity , (Exhibit CHN -4), p. 19.  
469 Preliminary Determination on Public Bodies and Input Specificity , (Exhibit CHN -4), attachment: 
"Inputs Memorandum"; Inputs Memorandum, (Exhibit USA -126).  
470 OCTG and Wire Strand.  
471 Preliminary Determination on Publi c Bodies and Input Specificity , (Exhibit CHN -4), p. 19.  
472 China's first written submission, para. 320 (emphasis original). See also China's first written 
submission, para. 327 (arguing that "the USDOC in its Section 129 determinations simply referred back to the 
evidence on the record of the original investigations establishing that individual respondent producers 
purchased the relevant inputs during the period of investigation"); and China's comments on the 
United  States'  response to Panel question No. 39,  para. 75.  
473 Appellate Body Report, US – Countervailing Measures (China) , para. 4.144.  
WT/DS437/RW  
 
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  7.287.   In this regard, we do not find any explanation on the USDOC record as to how the 
information on the record, and especially the information compiled in the Inputs Memorandum, 
demonstrated or otherwise reflected the systematic nature  of ac tions that would evidence the 
existence of a plan or scheme pursuant to which subsidies were provided. While the Inputs 
Memorandum designates certain information as an "example of systematic activity" (or "series of 
activities"), we find no explanation as to how such information (dealing with the number of 
transactions between input producers and respondents) informs the existence or nature of the 
relevant subsidy programme. Rather, the USDOC cites such information as evidence that "public 
bodies systematic ally provided" inputs for less than adequate remuneration, without further 
elaboration. Therefore, we do not consider the USDOC to have provided a reasoned and adequate 
explanation with regard to its identification of the relevant subsidy programme for the  purposes of 
its determination of de facto  specificity in this case.  
7.288.   In our view, the USDOC's determination fails to explain how the evidence on the record 
supports its factual findings of systematic  activity, and how those factual findings support its 
determination regarding the existence of an unwritten subsidy programme and the de facto  
specificity of the relevant subsidies.474 Based on the USDOC record, it is unclear how the USDOC, 
relying on some number of transactions between certain producers and respo ndents, substantiated 
the existence of the unwritten subsidy programme in question.475 In this regard, while the 
information before the USDOC clearly indicates repeated  transactions, it is unclear on what basis 
the USDOC concluded that these transactions wer e conducted pursuant to a plan or scheme of 
some kind.  
7.289.   We are mindful of the requirement to limit our examination to the evidence that was 
before the USDOC during the course of the investigation. In this regard, we note that the USDOC 
requested information  on "the number of programme  recipients for a four -year period", and "three 
years of data regarding the industry providing the relevant input" for "the provision of inputs for 
[less than adequate remuneration] programmes ".476 However, the explanations suppor ting the 
USDOC's findings or determinations – with respect to the existence of the relevant subsidy 
programme as part of its de facto  specificity analysis – do not appear to have been based on such 
evidence. Similarly, information regarding how long the re levant inputs have been produced and 
sold in China does not appear to have been relied upon by the USDOC in identifying the relevant 
subsidy programme.  
7.290.   Before us, the United States has referred to the "systematic provision of inputs for nearly 
50 years" a nd "a regularized and well -planned series of actions"477; "a program of action" 
according to which those inputs were provided478; and the potential relevance of the operation of 
"policy mandates" or "actions by which China provided the inputs in question".479 However, we do 
not find any such explanations in the investigating authority's determinations, and recall that an 
investigating authority's determinations may not be justified by an ex post  rationale.480 In keeping 
with the applicable standard of review, we th erefore decline to consider such arguments to the 
extent they are not reflected, even implicitly, in the USDOC's explanations with respect to the 
identification of the relevant subsidy programme.  
7.291.   Having concluded that the USDOC failed to provide a reasone d and adequate explanation 
for its conclusions regarding the existence of a subsidy programme, we do not find it necessary, 
for the resolution of this dispute, to further consider whether the USDOC took into account the 
length of time during which the subs idy programme had been in operation. Indeed, having failed 
to properly determine the existence of a subsidy programme, the USDOC could not properly take 
account of the length of time during which a subsidy programme had been in operation.  
                                                
474 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS , para.  186. 
475 See, e.g. China's second written submission, para. 201.  
476 Input Specificity Memora ndum, (Exhibit CHN -23), p. 6. (emphasis added)  
477 United States' opening statement at the meeting of the Panel, para. 39. 
478 United States' response to Panel question No. 45, para. 216.  
479 United States' comments on China's response to Panel question No. 43, para. 146.  
480 Appellate Body Reports, US – Tyres (China) , para. 329; US – Countervailing Duty Investigation on 
DRAMS , para.  186; and US – Softwood Lumber VI (Article 21.5 – Canada) , para . 93. WT/DS437/RW  
 
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  7.5.3.4   Conclusion on Ch ina's claim under Article 2.1(c) of the SCM Agreement  
7.292.   On the basis of the foregoing, we find that the United States did not comply with the 
requirement contained in Article 2.1 (c) to "take account of the length of time during which the 
subsidy programme h as been in operation" because it failed to adequately explain its conclusions 
regarding the existence of the relevant subsidy programme.  
7.293.   We thus conclude that China has demonstrated that the United States acted inconsistently 
with Article 2.1 (c) of the SC M Agreement in the Pressure Pipe, Line Pipe, Lawn Groomers, Kitchen 
Shelving, OCTG, Wire Strand, Seamless Pipe, Print Graphics, Aluminum Extrusions, Steel 
Cylinders, and Solar Panels Section 129 proceedings.  
7.6  China's claim under Article 2.2 of the SCM Agree ment in relation to regional 
specificity  
7.6.1   Main arguments of the parties  
7.294.   China challenges the USDOC's regional specificity determination in the Section 129 
proceeding on Thermal Paper, on the basis that the USDOC applied an incorrect legal standard 
focused o n whether a "distinct land regime" was applicable in the economic zone where some 
producers/exporters were located.481  
7.295.   China argues that the USDOC should have determined whether "the financial contribution 
(i.e., the provision of land -use rights by the gove rnment) or the benefit (i.e., the provision of 
land-use rights by the government for [less than adequate remuneration]), or both, was limited to 
certain enterprises located within a designated geographical region."482 According to China, a 
"proper inquiry" w ould have required the USDOC to "determine whether cheaper land was offered 
outside  the designated area as compared to land granted within the area".483 China considers that 
evidence relevant to this inquiry was absent from the record, such that the USDOC's regional 
specificity determination is not based on positive evidence.  
7.296.   The United States argues that the USDOC's determination is consistent with the findings of 
the original panel, according to which "there must also be some 'finding that the provision of  land 
within the park or zone is distinct from the provision of land outside the park or zone'".484 In 
particular, the United States argues that the USDOC did look for evidence concerning: 
(a) incentives or preferential policies offered to firms inside the z one; and (b) whether these 
incentives or preferential policies were available outside the zone.485 Further, the United States 
contends that the USDOC properly made its determination based on the limited evidence provided 
in the investigation and facts otherw ise available.486 
7.6.2   Main arguments of the third parties  
7.297.   The European Union submits that prior rulings of the Appellate Body support the position 
that the mere existence of a "distinct land regime" within a wider geographical area of the granting 
authority, doe s not say "anything about whether preferential conditions exist for the use of land 
within that specific regime". Thus, according to the European Union, "[a]n investigating authority 
must take into account all relevant evidence, notably evidence that land is provided for less than 
adequate remuneration also outside the industrial park in question."487  
                                                
481 China's second written submission, para. 215. 
482 China's first written submission, para. 362.  
483 China's second written submission, para. 219. (emphasis original)  
484 United States' second written submission, para. 249 (quoting Panel Report, US – Countervailing 
Measures (China) , para. 7.352).  
485 United States' first written submission, para. 310.  
486 United States' first written submission, paras. 311 -312. 
487 European Union's third -party submission, para. 88.  WT/DS437/RW  
 
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  7.6.3   Evaluation by the Panel  
7.6.3.1   Whether the USDOC applied an incorrect legal standard in its regional specificity 
determinations  
7.298.   The first disagreement between the parties concerns the legal standard allegedly applied 
by the USDOC in its assessment of regional specificity.  
7.299.   In particular, for China, the USDOC failed to examine whether "the alleged benefit from 
the provision of land -use rights was limited to the [zone]".488 Instead, China argues, the USDOC 
applied a legal standard under Article 2.2 pursuant to which "all 'incentives or preferential policies' 
are potential evidence of a 'distinct land regime' for the provision of land -use rights."489 China 
considers that this analysis of incentives or preferential policies within the zone is irrelevant to 
whether the subsidy (provision of land -use rights for less than adequate remuneration) was 
provided only within the zone.  
7.300.   We recall that  the original panel made a finding in relation to the type of evidence an 
investigating authority may rely on in order to determine that the grant of land -use rights in an 
economic zone is regionally specific. In particular, it found that:  
[T]he provision  of land -use rights … within an industrial park or economic 
development zone can be relevant for the finding of a limitation, but only if it is 
determined that the provision of land within the park or zone is distinct  from the 
provision of land outside the  park or zone. Establishing that the conditions for the 
provision of land within the park or zone were different from and preferential to  the 
conditions outside the park or zone, in terms of special rules or distinctive pricing, for 
instance, would have es tablished the required limitation.490 
7.301.   In the context of the Section 129 proceeding at issue, the USDOC was therefore required 
to determine that the conditions for the provision of land within the zone were different and 
preferential to the conditions outside  the zone in order to make a finding of regional specificity.491  
7.302.   The Section 129 proceeding record shows that the USDOC requested from the mandatory 
respondents evidence of: (a) incentives or preferential policies offered to firms inside the zone; 
and (b) w hether these incentives or preferential policies were available outside the zone.492 Before 
this compliance Panel, the United States emphasizes that the USDOC's inquiry related to whether 
there was limited access to the specific preferential  treatment of the  land-rights in question.493 
Thus, the USDOC's regional specificity analysis appears to hinge on the geographical limitation of 
the relevant subsidy, insofar as it focused on "whether the prices or terms of sale, including other 
incentives tied to the purcha se of the land, inside the geographic region at issue, are different 
from those offered outside the geographic region".494  
7.303.   We do not consider that the legal standard applied by the USDOC in the context of the 
Section 129 proceeding was inconsistent with the  requirements of Article 2.2 of the 
SCM Agreement, nor that the questions asked by the USDOC during the investigation were 
irrelevant to establishing specificity.495 By asking the respondents to list incentives or preferential 
policies offered to firms locat ed within the industrial park/economic zone at issue and whether 
these policies and incentives were also offered outside the geographic areas under examination, 
                                                
488 China's first written submission, para. 364. 
489 China's first written submission, para. 367.  
490 Panel Report, US – Countervailing Measures (China) , para. 7.352. (italics original; underlining added)  
491 We note that the United States and China agree with this standard. (United States' response to Pa nel 
question No. 47(a), para. 219; China's response to Panel question No. 47, paras. 205 -206).  
492 Preliminary Determination on Land Specificity, ( Exhibit CHN -24), p. 10.  
493 Specifically, the United States argues that the USDOC's findings related to evidence of preferential 
treatment within a particular zone "and whether access to that specific preferential treatment was limited as 
described by Article 2.2", such that "other types of preferential land -rights in or outside of zones … is not 
pertinent to the spe cificity of the subsidy at issue". (United States' comments on China's response to Panel 
question No. 47, para. 154 (emphasis original)).  
494 Preliminary Determination on Land Specificity, ( Exhibit CHN -24), p. 6; United States'  comments on 
China's response t o Panel question No. 47, para. 155.  
495 China's response to Panel question No. 47(a), para. 207.  WT/DS437/RW  
 
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  the USDOC provided an opportunity to the respondents to demonstrate that the conditions for the  
provision of land within the park or zone were not different from and preferential to the conditions 
outside the park or zone. As suggested by China, the USDOC sought to determine whether the 
granting authority was "providing land -use rights at the same o r lower prices outside of the 
geographical region at issue".496 The record shows that the GOC did not provide any information in 
this regard during the Section 129 proceeding.497 The Preliminary Determination on Land 
Specificity also indicates that "[n]o other  information regarding the land for [less than adequate 
remuneration] programs at issue was received from any other interested party".498 The 
determination reached by the USDOC in this case was thus based on facts available.  
7.304.   In view of the scope of the inqui ry carried out by the USDOC in the Section 129 proceeding 
on Thermal Paper, we reject China's argument that the investigating authority applied a legal 
standard which is inconsistent with the provisions of Article 2.2 of the SCM  Agreement.  
7.305.   We now turn to China's separate argument that, in using facts available in the Thermal 
Paper investigation, the USDOC failed to identify facts on the record which support a finding that 
the subsidy was limited to enterprises located inside the economic zone.  
7.6.3.2   Whether the  USDOC erred in its evaluation  
7.306.   We recall that China challenges the selection of facts and the conclusion that the USDOC 
drew from the limited evidence on the record of the Thermal Paper Section 129 proceeding.  
7.307.   We note that, in this compliance dispute, Ch ina is not making a claim of violation of 
Article  12.7 of the SCM Agreement, which provides that when an "interested Member or interested 
party refuses access to, or otherwise does not provide, necessary information … determinations, 
affirmative or negativ e, may be made on the basis of the facts available". In the absence of such a 
claim, we will neither consider nor make a finding as to whether the USDOC's use of facts available 
in the investigation was consistent with this provision. In view of the argume nts made by China in 
support of its claim under Article 2.2 of the SCM Agreement, our task is to examine whether China 
has demonstrated that the USDOC's determination of regional specificity is not supported by the 
facts relied on by the investigating auth ority in light of the evidence and the arguments before it.  
7.308.   Our analysis of whether the evidence on the record supports the USDOC's determination is 
necessarily affected by the non -cooperation of the responding party in the Thermal Paper 
Section  129 procee ding. The failure to respond to the USDOC's request for information relating to 
the issue of regional specificity created a situation in which the lack of evidence on the record 
limited the investigating authority in making factual findings. When reviewing  whether the 
evidence supports the determination reached by the investigating authority, we consider it 
relevant to take into account the inquiry carried out by the authority – which includes the 
application of the correct legal standard – as well as the q uantity and quality of the information 
submitted by interested parties. If the mandatory respondents were given a genuine opportunity 
to provide information relevant to the question at issue but failed to do so, an investigating 
authority must nonetheless reach a determination, albeit on the basis of a limited factual record, 
on the questions at issue in the investigation. In this case, the USDOC found that the respondent 
failed to provide necessary information and therefore relied on facts available, and i n light of the 
GOC's failure to cooperate, an adverse inference.  
7.309.   We are also mindful that a panel is not permitted to conduct a de novo  review of the facts 
of the case or substitute its judgement for that of the investigating authority. Nevertheless, our 
examination of the conclusions reached by the authority must be critical and searching, and be 
based on the information on the record and the explanations given by the authorities in their 
report. Overall, we must ascertain whether the investigating authori ty has evaluated all relevant 
evidence in an objective and unbiased manner, including by taking sufficient account of conflicting 
                                                
496 China's response to Panel question No. 47(a), para. 208.  
497 Preliminary Determination on Land Specificity, ( Exhibit CHN -24), p. 4.  
498 Preliminary Determination o n Land Specificity, ( Exhibit CHN -24), p. 5.  WT/DS437/RW  
 
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  evidence in an objective and unbiased manner, and responding to competing plausible 
explanations of the evidence.499  
7.310.   With regar d to the factual findings made by the USDOC, the record in this case contained 
two pieces of evidence – both obtained during the verification visit in the original investigation – 
dealing with the price of land inside and outside the zone: "the appraisal r eport for Plot 2" (the 
land at issue within the zone) and "the comparison appraisal".500  
7.311.   The United States maintains that the comparison appraisal was unsuitable for a proper 
comparison of land price.501 In particular, the verification report points out that the appraisal 
methodology used in the "comparison appraisal" was different from the methodology used in the 
appraisal of the land at issue. The verification report also states that an official for the respondent 
company "was not able to give us a technical  explanation of the details of the different appraisal 
calculation methods or the reasons for the different approaches, but he indicated it was his 
understanding that differences are probably based on the fact that the appraiser must factor in 
conditions t hat are particular to each parcel of land".502 We thus find that the USDOC explicitly 
addressed the relevance of the comparison appraisal in the original investigation and cited specific 
problems with the comparability of the terms of each appraisal.  
7.312.   The US DOC's specificity determination is based entirely on adverse facts available, 
specifically the appraisal for the land at issue, which refers to the fact that "[t]his appraisal fully 
considered … government preferential  policies to attract industry, commerc e and investments, 
thus the appraisal price is of a particular nature".503 The USDOC explained in its Preliminary 
Determination on Land Specificity that "the land appraisal issued by the government referenced a 
'preferential treatment' for the respondent" an d, on the basis of adverse facts available, found that 
"the reference to a preferential price with regard to the respondent indicates that the GOC sold the 
land in question to the respondent at a price and at terms that were not available to other 
firms".504 As explained by the United States in these proceedings, the USDOC concluded that:  
[T]he preferential treatment … supported a determination that preferential pricing 
existed within the zone at issue relative to pricing outside of the zone and thus 
supporte d a regional specificity determination.505  
7.313.   The United States also argues that this evidence was "probative of and tending to support 
a conclusion that companies located within the zone received preferential treatment when 
purchasing land -use rights and, therefore, evidenced a distinct land regime. This interpretation of 
the record evidence is reasonable and is neither a non -factual assumption nor speculation."506 
7.314.   China, however, argues that in the original investigation, the responding company 
provided:  
[A]n appraisal for land outside of the [zone] that contained similar "preferential 
treatment" language. The USDOC verified that the "preferential treatment" language 
appears "in the same location of the appraisal report, and in precisely identical form", 
                                                
499 Appellate Body Report, EU – Fatty Alcohols (Indonesia) , para. 5.84 (referring to Appellate Body 
Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 97).  
500 Verification Report on Thermal Paper, (Exhi bit CHN -27), p. 18. The comparison appraisal is described 
in the verification report as "a copy of an appraisal report from the appraisal company that performed the 
appraisal of GG's plot 2" (the land at issue). The verification report indicates that it wa s pointed out to the 
authority that the address of the company indicates that it was located outside the Economic Zone.  
501 Verification Report on Thermal Paper , (Exhibit CHN -27), p. 19; United States' second written 
submission, fn 454; and response to Panel question No. 48, para. 221. See also United States'  comments on 
China's response to Panel question No. 48, para. 161.  
502 Verification Report on Thermal Paper , (Exhibit CHN -27), p. 19.  
503 Verification Report on Thermal Paper , (Exhibit CHN -27), p. 19 (emphasis added). See also 
United  States' response to Panel question No. 48, para. 221 and fn 355.  
504 Preliminary Determination on Land Specificity , (Exhibit CHN -24), pp. 11 -12. 
505 United States'  first written submission, para. 311.  
506 United States' response to Panel question No. 48, para. 221.  WT/DS437/RW  
 
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  in both the appraisal report for the land at issue and in the sample comparison 
appraisal for land outside of the zone.507 
7.315.   China thus argues that the appraisal for the land at issue which was the basis for the 
specificity determination cannot support the conclus ion reached by the USDOC as facts available.  
7.316.   We consider that the USDOC's ability to make factual findings in the Section 129 
proceeding on Thermal Paper was limited by the GOC's failure to respond to the questions posed 
by the investigating authority. It  seems clear to us that responses to the questions asked by the 
investigating authority could have had probative value in determining whether the provision of 
land within the zone was different from and preferential by comparison with the provision of land  
outside the zone. We also note that the respondents were well aware that the investigating 
authority had expressed doubts, during the original investigation, about the evidence placed on 
the record by the company. As noted above, the verification report i n the Thermal Paper case 
indicates that the methodology for calculating land price inside and outside the zone was different, 
and the mandatory respondent failed to provide any explanation for "the different appraisal 
calculation methods or the reasons for  the different approaches".508 Finally, we recall that China 
has made no claim regarding the USDOC's reliance on adverse facts available under the relevant 
provision of the SCM Agreement, Article 12.7. In light of the foregoing, we conclude that China has 
not demonstrated that the evidence on the record does not support the USDOC's factual findings, 
nor that those factual findings do not support the overall determination.  
7.6.3.3   Conclusion on China's claim under Article 2.2 of the SCM Agreement  
7.317.   We recall that we ha ve rejected China's argument that the USDOC applied a legal standard 
that was inconsistent with Article 2.2. Moreover, in the absence of a claim under Article 12.7, we 
have no basis to consider the consistency of the USDOC's reliance on adverse facts avail able, and 
China did not demonstrate that the USDOC's determination was not supported by its factual 
findings and the evidence on record.  
7.318.   We thus conclude that China has not demonstrated that the United States acted 
inconsistently with Article 2.2 of the S CM Agreement in the Thermal Paper Section 129 proceeding.  
7.7  China's claims concerning the final determination in the original Solar Panels 
investigation  
7.319.   China claims that the final determination in the original Solar Panels investigation is within 
the scope of this compliance Panel because it is closely connected to the preliminary determination 
which was found inconsistent with the SCM Agreement in the original dispute.509 China also claims 
that the final determination is inconsistent with Articles 1.1(a)(1), 2.1(c), 1.1(b), and 14(d) of the 
SCM Agreement because the USDOC relied on the same erroneous findings as in the preliminary 
determination.510  
7.320.   We consider that the close connection between the final determination in the Solar Panels 
investigation, the decla red measure taken to comply, and the recommendations and rulings of the 
DSB in the original dispute concerning the preliminary determination in Solar Panels, warrant s the 
inclusion of the contested measure in the scope of these Article 21.5 proceedings. In  this regard, 
we note the closely connected nature (i.e. the application of a particular legal standard under the 
same countervailing duty order concerning the same products from China) and related effects 
arising from the resulting determination and impos ition of countervailing duties on the products in 
question.511 
7.321.   On the substance of China's claim, it is clear from the record that the final public body, 
benchmark, and de facto  specificity determinations in the Solar Panels investigation were 
supported by t he same explanations as the preliminary determinations. Specifically, with respect 
                                                
507 China's response to Panel question No. 48, para. 211 (quoting Verification Report on Thermal Paper , 
(Exhibit CHN -27), pp. 18 -19). 
508 Verificatio n Report on Thermal Paper , (Exhibit CHN -27), p. 19.  
509 China's first written submission, para. 372.  
510 China's first written submission, para. 373.  
511 See also Section 7.8.1.3    below.  WT/DS437/RW  
 
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  to public bodies, the USDOC recalled its analysis of government ownership or control of the 
relevant input producers and affirmed explanations provided in its preliminary de termination.512 
Regarding the rejection of in -country benchmarks, the USDOC justified the use of external 
benchmarks "when the government's sales constitute a significant portion of the sales of the good 
in question" and reaffirmed its "preliminary conclusio n that the GOC is the predominant force 
within the internal market". Although the USDOC explained that its preliminary conclusion was not 
contradicted by import penetration rates indicated by the GOC, the USDOC found that "the GOC's 
significant presence in  the market distorts all domestic prices (including prices paid for imports)"513 
without explaining "whether and how the relevant … producers possessed and exerted market 
power such that other in -country prices were distorted" or "whether the prices of 
the … government -related entities themselves were market determined".514 Finally, regarding de 
facto specificity, the USDOC affirmed its preliminary determinations without any indication that the 
additional factors under Article 2.1(c) were considered in reaching  its final determination.515  
7.322.   We recall that the original panel found that the preliminary public bodies and specificity 
determinations were inconsistent with Article 1.1(a)(1) and Article 2.1(c) of the SCM Agreement, 
respectively. Moreover, the Appellate Bo dy found that the preliminary benchmark determination 
was inconsistent with Articles 1.1(b) and 14(d) of the SCM Agreement.  
7.323.   Based on the foregoing, we consider that China has made a prima facie  case that the final 
determination in the original Solar Panel s investigation is inconsistent with Articles 1.1(a)(1), 
1.1(b) and 14(d) and with Article 2.1(c) of the SCM Agreement.  
7.324.   Because the United States has not rebutted China's arguments in relation to the final 
determinations made, we find that China has demon strated that the final determination in the 
original Solar Panels investigation is inconsistent with Articles 1.1(a)(1), 1.1(b), 2.1(c), and 14(d) 
of the SCM Agreement.  
7.325.   We thus conclude that China has demonstrated that the United States acted inconsistent ly 
with Articles 1.1(a)(1), 1.1(b), 2.1(c), and 14(d) of the SCM Agreement in the final determination 
of the original Solar Panels investigation.  
7.8  China's claims in relation to subsequent administrative and sunset reviews  
7.326.   China claims that the United States  has failed to bring itself into conformity in respect of 
measures subsequent to the USDOC's original determinations that were found to be inconsistent in 
the original dispute. These measures include administrative reviews and sunset reviews that China 
contends are "subsequent closely connected measures" that are within the Panel's terms of 
reference in this proceeding under Article 21.5. China further argues that these "subsequent 
closely connected measures … reflect the continued application of legal stan dards that are 
inconsistent" with the relevant obligations under the SCM Agreement.516 
7.327.   We will first address issues relating to the scope of Article 21.5 proceedings and the 
Panel's terms of reference with respect to administrative and sunset reviews, before  addressing 
whether China has made a prima facie  case in respect of these subsequent measures.  
7.8.1   Whether the subsequent administrative and sunset review determinations 
challenged by China are within the scope of the Panel's jurisdiction  
7.8.1.1   Introduction  
7.328.   China i dentifies certain administrative and sunset reviews of the countervailing duty orders 
in annex 3 and annex 4, respectively, of its request for the establishment of a compliance panel. 
                                                
512 USDOC Final Determination in the original Solar Panels investigation , (Exhibit CHN -28), pp. 30 -31. 
We note that the USDOC considered that the DSB recommendations and rulings in DS379  concerning public 
bodies were limited to the investigations at issue in that dispute, indicating that the USDOC did not apply a 
revised legal standard in its public body determinations in the Solar Panels case.  
513 USDOC Final Determination in the original Solar Panels investigation , (Exhibit CHN -28), pp. 34 -35. 
514 Appellate Body Report, US – Countervailing Measures (China) , para. 4.96.  
515 USDOC Final Determination in the original Solar Panels investigation , (Exhibit CHN -28), p. 33.  
516 China's first written sub mission, para. 376.  WT/DS437/RW  
 
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  China argues that the determinations in these subsequent reviews are clo sely connected in terms 
of their nature, effects, and timing to the measures the United States' declared it took to comply 
and the relevant DSB rulings and recommendations, and therefore come within the scope of this 
Panel's jurisdiction in this proceeding  under Article 21.5 of the DSU.517 During these proceedings, 
China identified one additional administrative review and one additional sunset review in which 
determinations were issued subsequent to the filing of its request for the establishment of a panel, 
and which it considers are within the Panel's jurisdiction.518 
7.329.   Our mandate under Article 21.5 of the DSU is not limited to an examination of measures 
declared to be "taken to comply" by the implementing Member. Measures with a sufficiently close 
relationship  to the declared measure taken to comply, and to the recommendations and rulings of 
the DSB, may also be within the jurisdiction of a panel acting under Article 21.5. In order to 
determine whether the measures challenged by China are properly before us, we  must "scrutinize 
these relationships, which may, depending on the particular facts, call for an examination of the 
timing, nature, and effects of the various measures" as well as "the factual and legal background 
against which a declared 'measure taken to  comply' is adopted".519 
7.330.   Accordingly, we proceed to consider the nature, timing, and effects of the administrative 
and sunset review measures challenged by China to determine whether they fall within the scope 
of our jurisdiction in this proceeding under Art icle 21.5 of the DSU by virtue of their relationship to 
the Section 129 determinations that the United States declared as the measures taken to comply, 
as well as to the recommendations and rulings of the DSB.  
7.8.1.2   Main arguments of the parties  
7.331.   With respect to  their nature, China submits that the subsequent measures "were issued 
under the same countervailing duty orders as the measures challenged in the original dispute", 
and they "reflect either the exact same legal standards that were found by the DSB to be 
inconsistent with the SCM Agreement in the original dispute, or they reflect the equally unlawful 
legal standards that the USDOC applied in the Section 129 determinations that are also before this 
compliance Panel".520 
7.332.   With respect to the effects of the vario us measures, China argues that they "replaced the 
effects of the original countervailing duty determinations in a manner that reflects the 
USDOC's  continued application of erroneous legal standards in relation to the provisions of the 
SCM Agreement that we re the subject of the original dispute".521 Thus, according to China, "the 
subsequent administrative reviews and sunset reviews, reflecting the USDOC's continued 
application of erroneous legal standards, had the same effects as the declared measures 'taken to 
comply'".522  
7.333.   Finally, China asserts that  "[e]ach successive review … is closely linked, in terms of timing, 
to the immediately preceding review or to the original countervailing duty determination at issue", 
and "the original countervailing duty determinations at issue were superseded by a subse quent 
review which establishes the final duty liability for the previous review period, and the cash deposit 
rate for the next review period".523 China further argues that the timing of the measure is not 
determinative, and that measures adopted before the D SB's adoption of recommendations and 
                                                
517 China's first written submission, para. 384.  
518 China's first written submission, fns 382 -383. Specifically, China refers to an administrative review in 
Solar Panels, and a sunset review in Aluminum Extrusions, in which determinations  were issued after its filing 
of a request for the establishment of a Panel. China contends that these determinations are encompassed by 
paragraph 32 of its request for the establishment of a panel, in which China advances the same claims against 
periodic and sunset review determinations "subsequent to those set forth in" annex 3 and annex 4 to the 
extent that any such periodic and sunset review determinations "involve the same errors" claimed against the 
determinations identified in annex 3 and annex 4 of its panel request. (China's first written submission, 
para. 434(n)).  
519 Appellate Body Report,  US – Softwood Lumber IV (Article 21.5 – Canada) , para. 77.  
520 China's first written submission , para. 385.  
521 China's first written submission , para. 386.  
522 China's first written submission , para. 386.  
523 China's first written submission , para. 387.  WT/DS437/RW  
 
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  rulings may fall within the scope of Article 21.5 of the DSU, provided it is shown they have a 
sufficiently close nexus to those recommendations and the declared measures taken to comply.524 
7.334.   The United States argues that "nearly all of the measures that China identifies were 
concluded prior to the end of the [reasonable period of time (RPT)] on April 1, 2016, and thus 
were not 'subsequently closely connected' to the measures taken to comply in this dispute".525 The 
United St ates further argues that determinations in administrative and sunset reviews issued 
during the course of these compliance proceedings "necessarily did not exist at the time of the 
panel's establishment" and therefore "they are not measures within the panel 's terms of 
reference".526 The United States also distinguishes the findings and facts regarding subsequent 
measures in the context of implementation of panel and Appellate Body decisions concerning the 
zeroing methodology, asserting that the zeroing methodo logy is a "vastly simpler type of 
'measure' than the challenged determinations" in this case, which "are highly fact -specific 
determinations that take into account the totality of the relevant evidence that is available on the 
record of each proceeding as part of its analysis".527 
7.8.1.3   Evaluation by the Panel  
7.335.   One of the main contentions of the United States regarding whether the challenged 
subsequent measures fall within the scope of this proceeding concerns the timing of the issuance 
of the relevant determination s in relation to the expiry of the RPT and the establishment of this 
compliance panel. In particular, the United States contests the inclusion of reviews completed prior 
to the end of the RPT as well as of measures not in existence at the time of panel 
establishment.528 
7.336.   The administrative and sunset reviews identified in China's panel request were clearly in 
existence at the time this Panel was established. Some of these reviews were completed before 
the end of the RPT on 1 April 2016, while others were compl eted prior to the DSB's adoption of 
recommendations and rulings in the original phase of the dispute on 16 January2015.529 
7.337.   We recall that the timing of a measure alone is not a decisive factor in establishing 
whether it has a sufficiently close nexus with a Member's implementation of the recommendations 
and rulings of the DSB so as to fall within the scope of an Article 21.5 proceeding.530 More 
fundamentally, excluding measures solely on the grounds that they pre -date the end of the RPT 
would seem to be incompa tible with the purpose of the RPT, which is to provide a period of time in 
which an implementing Member may take measures in order to bring itself into compliance with 
DSB recommendations and rulings. In principle, it would be expected that compliance meas ures 
would be taken before the end of the RPT, and that disagreements as to the existence or 
consistency of such measures would be subject to consideration under Article 21.5.531 The 
existence of a declared measure taken to comply after the end of the RPT do es not automatically 
mean that measures taken during  the RPT fall outside the scope of a compliance proceeding under 
Article 21.5. Rather, whether such earlier measures are properly within the scope of an 
Article  21.5 proceeding depends on other aspects of  the "close nexus" test in relation to a 
Member's implementation of the recommendations and rulings of the DSB. Similarly, measures 
pre-dating DSB adoption may still fall within the scope of an Article 21.5 proceeding provided that 
there is a sufficiently close nexus in terms of their nature and effects.532 Thus, even if "measures 
                                                
524 China's second written submission , para. 230.  
525 United States' first written submission , para. 321.  
526 United States' first written submission , para. 322.  
527 United States' second written submission, paras. 266 -268. 
528 See, e.g. United States' first written submission, para. 314 (arguing that "China has not identified 
any actions, conduct, or omissions occurring after the expiration of the RPT and before the establis hment of 
the Article 21.5 panel" in relation to the scope of the Panel's terms of reference in this case).  
529 Annex 3 and annex 4 of China's request for the establishment of a panel.  
530 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 22 4. 
531 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 299 (noting that "Article 21.3 of 
the DSU implies that the obligation to comply with the recommendations and rulings of the DSB has to be 
fulfilled by the end of the reasonable period  of time at the latest").  
532 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), paras. 226 -235. In this regard, we do 
not consider any of the subsequent reviews identified by China to have occurred so long before the 
recommendations and rulings o f the DSB so as to "sever the connection between" those measures and the 
United States' implementation obligations. (Ibid. para. 225).  WT/DS437/RW  
 
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  taken to comply with recommendations and rulings of the DSB ordinarily  post-date the adoption of 
the recommendations and rulings"533, this is not necessarily the case, and is in any e vent not a 
requirement for measures to be considered in a compliance proceeding.  
7.338.   Regarding measures not in existence at the time of panel establishment, there are 
circumstances in which such measures may nevertheless fall within a panel's terms of referen ce in 
a compliance proceeding. For example, amendments to measures at issue in a dispute made 
during the course of panel proceedings have been found to fall within a panel's terms of reference 
when the challenged measure was amended "without changing its e ssence".534 The conclusion that 
a subsequent measure has the "same essence" has thus been recognized as a basis for finding 
that "measures enacted subsequent to the establishment of the panel may, in certain limited 
circumstances, fall within a panel's terms  of reference".535 Moreover, "an a priori  exclusion of 
measures completed during Article 21.5 proceedings could frustrate the function of compliance 
proceedings", given that:  
A measure that is initiated before there has been recourse to an Article 21.5 panel , 
and which is completed during those Article 21.5 panel proceedings, may have a 
bearing on whether there is compliance with the DSB's recommendations and rulings. 
Thus, if such a measure incorporates the same conduct that was found to be 
WTO-inconsistent in the original proceedings, it would show non -compliance with the 
DSB's recommendations and rulings.536  
7.339.   We are of the view that measures with a "particularly close relationship to the declared 
'measure taken to comply', and to the recommendations and rulings of the DSB"537 may also fall 
within the limited circumstances in which measures that come into being after establishment of a 
compliance panel fall within that panel's terms of reference.538 Accordingly, we proceed to consider 
the nature and effects of  the various measures at issue before us to determine whether they have 
a sufficiently close nexus with the DSB's recommendations and rulings in this case and the 
United  States' implementation of those recommendations and rulings.  
7.340.   The nature of the measure s in question concerns their subject matter539, which may 
encompass a variety of relevant considerations in the specific context of subsequent reviews in 
trade remedy cases. For example, an overlap of the covered products and the substantive issue in 
questio n may indicate a close nexus in subject matter.540 It may also be relevant to consider 
whether the particular substantive issue was itself the subject of the recommendations and rulings 
of the DSB.541 Another relevant consideration may be that subsequent revie ws and determinations 
are issued under the same "order" as measures challenged in original proceedings, constituting 
"connected stages … involving the imposition, assessment and collection of duties".542 Such 
relevant similarities in the nature of the variou s measures may indicate a sufficiently close nexus 
notwithstanding formal differences, such that, for example, "differences between original 
investigations and administrative reviews in countervailing duty cases do not prevent the latter 
from falling withi n the scope of compliance proceedings".543  
7.341.   At the same time, we are of the view that there are limits to the situations in which 
subsequent reviews may be found to have a sufficiently close nexus in nature so as to fall within 
                                                
533 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 222. (emphasis added)  
534 Appellate Body Report, Chile – Price Band System , para. 139.  
535 Appellate Body Report, EC – Chicken Cuts , para . 156.  
536 Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 122. 
537 Appellate Body Report,  US – Softwood Lumber IV (Article 21.5 – Canada) , para. 77.  
538 Panel Report, Australia – Salmon (Article 21.5 – Canada) , para. 22 (finding that a measure 
introduced after the establishment of a compliance panel could be considered a measure taken to comply in 
the sense of Article 21.5 due to being "so clearly connected to the panel and Appellate Body reports concerned, 
both in time and in respect of the subject -matter").  
539 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 230.  
540 Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para.  83. 
541 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 230  
542 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 230  
543 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 244. See also Appellate Body 
Report, US – Softwood Lumber IV (Article 21.5 – Canada), para.  83. WT/DS437/RW  
 
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  the scope of an Article 21.5 p roceeding.544 For example, "identity in terms of product and country 
coverage alone would be an insufficient basis for determining that [subsequent administrative 
reviews] have a sufficiently close nexus, in terms of nature, with the recommendations and ruli ngs 
of the DSB with respect to the original investigations".545 In the present case, however, the 
overlap of subject matter extends beyond merely an identity of product and country coverage. 
China has identified determinations made in administrative and suns et reviews conducted under 
the same countervailing duty orders as were the subject of the DSB rulings and recommendations. 
Moreover, in our view, the alleged application of the same legal standard that was found to be 
WTO-inconsistent in the original dispu te, or that was applied in the declared measures taken to 
comply (in this case the Section 129 determinations) may be a particularly relevant aspect in 
determining whether the requisite "close nexus" exists.  
7.342.   This in turn raises the question of whether the administrative and sunset reviews have a 
sufficiently close nexus in terms of their effects with the United States'  implementation of the 
DSB recommendations and rulings. The effects of a challenged measure that may be relevant in 
this regard include the p otential perpetuation of the WTO -inconsistency originally found, which 
may undermine a Member's compliance with DSB recommendations and rulings.546 In this case, 
China challenges subsequent administrative and sunset reviews allegedly involving the same 
subst antive errors as those found originally in the relevant public body, input specificity, regional 
specificity, and benchmark determinations.  
7.343.   In this regard, we note the United States' arguments distinguishing prior compliance 
proceedings involving the appli cation of the zeroing methodology in subsequent reviews of 
anti-dumping orders. The United States underscores the fact -intensive and case -specific nature of 
the determinations made under the countervailing orders at issue in this case, which it argues 
distinguish the situation here from that in the zeroing compliance proceedings. For example, the 
United States argues that whereas the application of zeroing, a WTO -inconsistent methodology, 
was evident in subsequent measures:  
[T]he USDOC's public bodies, inpu t specificity, land, and benchmark determinations, 
are highly fact -specific determinations that take into account the totality of the 
relevant evidence that is available on the record of each proceeding as part of its 
analysis and any WTO -inconsistency can not be established without considering the 
totality of evidence that was before the USDOC.547 
7.344.   In this case, the subject matter overlap (resulting from the application of a particular legal 
standard under the same countervailing duty order concerning the same  products from China) 
bears on the effects of the relevant measures because it is reflected in the resulting determination 
and consequent imposition of countervailing duties on imports of the products in question. In this 
sense, the measures at issue invol ve "successive determinations" under the same 
countervailing -duty order and may be considered to "form part of a continuum of events"548 that 
bears a close relationship to the United States' implementation of the relevant DSB rulings and 
recommendations. Wit hin this continuum of events, administrative reviews affected the 
countervailing duty and cash deposit rates established in the original determinations that were the 
subject of the DSB's recommendations and rulings. Moreover, the USDOC'S Section 129 
determ inations – the United States' declared measures taken to comply – had the effect of 
superseding previously completed administrative reviews, or were superseded by the subsequent 
                                                
544 The Appellate Body has emphasized that its findings "should not be read to mean that every 
assessment review will necessarily fall within the jurisdiction of an Article 21.5 panel". (Appellate Body Report, 
US – Softwood Lumber IV (Article 21.5 – Canada) , para.  93).  
545 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 239.  
546 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 250. In this regard, it may be 
relevant to consider whether a challenged measure "u pdate[s]" or "supersede[s]" the effects of a declared 
measure to comply (e.g. Section 129 determinations). (Appellate Body Report, US – Softwood Lumber IV 
(Article 21.5 – Canada) , para.  85). 
547 United States' second written submission , para. 268.  In this co nnection, the United States 
emphasizes that "the GOC's decision to cooperate – or not – with the USDOC's request for information has a 
direct impact on whether the USDOC has the information necessary to produce a nuanced finding or must 
reach its conclusio ns based on limited facts available on the record". (United States' second written 
submission , para. 270 ). 
548 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 251.  WT/DS437/RW  
 
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  administrative review identified by China.549 For sunset reviews, the USDOC's de terminations of 
whether injurious subsidisation is likely to continue were not made in isolation from determinations 
made either in the original investigations at issue in the original dispute or in subsequent 
administrative reviews.550 
7.345.   We are therefore not convinced that differences in the time -period reviewed or the factual 
record in various subsequent reviews interrupt this continuum, or negate the close nexus of effects 
stemming from the common elements of the various measures.551 Similarly, we are not pers uaded 
that differences between administrative and sunset reviews under US domestic law undermine the 
existence of close nexus where, notwithstanding certain distinctions between these types of 
review, each review takes as its basis, and thereby reflects, a nd to some extent incorporates, the 
USDOC's earlier determinations with respect to countervailable subsidies.552 We consider the 
interrelated effects of the USDOC's original determinations, Section 129 determinations, and 
administrative and sunset review det erminations to reflect a particularly close relationship for the 
purposes of Article 21.5 of the DSU.  
7.346.   We note in this regard that the jurisdictional question before us is to be distinguished from 
the substantive question of whether the subsequent administ rative and sunset reviews are 
themselves inconsistent with the provisions of the SCM Agreement as claimed by China. Therefore, 
in concluding that there is a close nexus in terms of the nature and effects of the relevant 
measures and DSB rulings and recomme ndations, we are not inquiring whether or finding that 
China has demonstrated that the subsequent review determinations are inconsistent with the 
provisions of the SCM Agreement raised by China.553 Rather, at this stage of our analysis, we 
consider that the overlapping subject matter identified by China in respect of subsequent reviews 
has implications in terms of the effects of those measures that, in turn, have a close relationship 
to the United States'  implementation of the relevant DSB recommendations and  rulings.  
7.347.   On the basis of the foregoing, we therefore find that the administrative and sunset reviews 
identified by China, including those that came into existence after the establishment of this Panel, 
fall within our terms of reference under Article 21.5  of the DSU by virtue of their close relationship 
to the recommendations and rulings of the DSB and the relevant Section 129 determinations of 
the USDOC.  
7.8.2   Whether the subsequent administrative and sunset review determinations are 
inconsistent with the SCM A greement  
7.348.   China's substantive claims are based on the assumption that the "subsequent closely 
connected measures … reflect the continued application of legal standards that are inconsistent" 
with the relevant obligations under the SCM Agreement.554 The allege dly inconsistent legal 
standards at issue are those relied on in the USDOC's public body determinations, input and 
regional specificity determinations, and benchmark determinations in the respective administrative 
and sunset reviews. In the following secti ons, we analyse each administrative and sunset review 
                                                
549 In the only administrative review identified by China that post -dates th e relevant Section 129 
determination (the second administrative review in Solar Panels), we note China's explanation that the 
USDOC's determination had the effect of generating the duty assessment rate for the relevant review period 
and replacing the cash deposit rate calculated in the Section 129 determination with a revised cash deposit 
rate going forward. (China's response to Panel question No. 61, para. 234; see also Appellate Body Report, 
US – Softwood Lumber IV (Article 21.5 – Canada) , para. 85 (outli ning similar considerations in respect of an 
subsequent administrative review's effect on the cash deposit rate resulting from a Section 129 
determination)).  
550 China's response to Panel question No. 61, para. 236. Further, the sunset review determination i n 
Aluminum Extrusions, issued after the relevant Section 129 determination, had the effect of providing the basis 
for the continuation of countervailing duties going forward at the cash deposit rates calculated in the 
Section  129 determination. (Ibid. para . 234).  
551 See, e.g. United States' response to Panel question No. 61, para. 239  
552 United States' response to Panel question No. 61, paras. 240 -241. We further recall in this regard 
that municipal law classifications are not determinative in WTO dispute set tlement. (Appellate Body Reports, 
US – Zeroing (EC) (Article 21.5 – EC), para. 244;  US – Softwood Lumber IV (Article 21.5 – Canada) , para.  82). 
553 In this regard, we do not agree with the United States' contention that "the question is not whether 
an annual review is closely related to an investigation; rather, the question is whether the factual 
determinations in a subsequent review are identical t o factual determinations made based on the different 
factual record in the investigation." (United States' second written submission, para. 269).  
554 China's first written submission, para. 376.  WT/DS437/RW  
 
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  determination in light of China's legal claims, to determine if China has made a prima facie  case 
that the USDOC acted inconsistently with the SCM Agreement in each of those determinations.  
7.8.2.1   Administrat ive reviews in the Kitchen Shelving proceeding  
7.349.   China claims that in the three administrative reviews in the Kitchen Shelving proceeding555, 
the USDOC:  
a. applied a government ownership and control standard to determine that producers of 
wire rod and steel stri p are public bodies within the meaning of Article 1.1(a)(1) of the 
SCM Agreement; and  
b. failed, in its de facto  specificity determination, to take account of "the extent of 
diversification of economic activities within the jurisdiction of the granting author ity" and 
of "the length of time during which the subsidy programme has been in operation".556 
On this basis, China claims that the three administrative reviews are inconsistent with 
Articles  1.1(a)(1) and 2.1(c) of the SCM Agreement.  
 
7.8.2.1.1   Whether the USDOC appl ied an improper legal standard in its public body 
determinations  
7.350.   We recall the finding in the original dispute557 that the USDOC had acted inconsistently 
with Article 1.1(a)(1) in its public body determinations because "the USDOC found that SOEs were 
public bodies by relying on a concept of control based, in most cases, on (majority) ownership of 
an entity by the government".558 We also recall that "evidence of government ownership, in itself, 
is not evidence of meaningful control of an entity by government and  cannot, without more, serve 
as a basis for establishing that the entity is vested with authority to perform a governmental 
function. Accordingly, such evidence, alone, cannot support a finding that an entity is a public 
body."559 
7.351.   In the present dispute, we are called upon to determine whether, in each of the three 
administrative reviews in Kitchen Shelving, the USDOC found that input producers were public 
bodies on the sole basis of evidence of government ownership or control and without establishing 
that th e entities possessed, exercised, or were vested with authority to perform a governmental 
function.  
7.352.   In the first administrative review, the USDOC sought ownership information about wire rod 
producers and, "for any of the wire rod producers that are not maj ority-owned by the GOC", the 
USDOC asked the GOC "to trace back the ownership to the ultimate individual or state owners".560 
The USDOC also relied on information suggesting that "the CCP exerts significant control over 
activities in the PRC. As such, the re quested information about the individual owner's status as 
CCP officials [was] relevant to whether the wire rod supplier is an 'authority'".561 With regard to 
producers of steel strip, the USDOC noted that it "normally treats producers that are 
majority -owne d by the government or a government entity as 'authorities'", and thus sought 
information in relation to majority government -ownership.562  
                                                
555 USDOC First Administrative Review in Kitchen Shelving , (Exhi bit CHN -30); USDOC Second 
Administrative Review in Kitchen Shelving , (Exhibit CHN -31); and USDOC Third Administrative Review in 
Kitchen Shelving: Final Determination , (Exhibit CHN -33). 
556 China's first written submission, paras. 390 -395. 
557 Panel Report, US – Countervailing Measures (China) , paras. 7.75 and 8.1(i).  
558 Panel Report, US – Countervailing Measures (China) , para. 7.73.  
559 Panel Report, US – Countervailing Measures (China) , para. 7.70 (referring to Appellate Body Report 
US – Anti-Dumping and Counterv ailing Duties (China) , para. 346).  
560 USDOC First Administrative Review in Kitchen Shelving , (Exhibit CHN -30), p. 5. The USDOC 
additionally discussed " ownership information  submitted by the GOC regarding one wire rod producer" and 
"whether the individuals t hat owned  that wire rod producer were government officials or officials of the CCP". 
(Ibid. pp. 5 -6 (emphasis added)).  
561 USDOC First Administrative Review in Kitchen Shelving , (Exhibit CHN -30), p. 6. (fn omitted)  
562 USDOC First Administrative Review in Kitc hen Shelving , (Exhibit CHN -30), p. 7.  WT/DS437/RW  
 
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  7.353.   In the second administrative review, the USDOC similarly sought ownership information 
about producers of steel strip a nd wire rod, and for producers "that are not majority -owned by the 
GOC" the USDOC asked the GOC "to trace back the ownership to the ultimate individual or state 
owners".563 The USDOC considered that "[g]iven the GOC's lack of a response, we have no 
informati on concerning government ownership or control of any of the companies that supplied 
steel strip and wire rod" and therefore made an adverse inference that the suppliers of steel strip 
and wire rod were public bodies.564  
7.354.   In the third administrative review, t he USDOC sought similar information and relied on the 
same reasoning in explaining its public body determination with respect to producers of steel strip 
and wire rod.565 
7.355.   We find no evidence in the determinations or the records of the administrative reviews at 
issue that the USDOC considered other characteristics of the input producers. Nor do we find 
evidence that the USDOC considered whether these producers, at the time of the reviews, 
possessed, exercised, or were vested with governmental authority to perf orm a governmental 
function on any basis other than government ownership or control.  
7.356.   We thus find that China has made a prima facie  case that the USDOC applied an ownership 
or control standard, and did not make its public body determinations on the basis of whether the 
entities in question possessed, exercised, or were vested with governmental authority. The 
United  States has not rebu tted China's arguments in relation to the public body determinations in 
the reviews at issue.  
7.357.   We therefore find that China has demonstrated that the three measures at issue are 
inconsistent with Article 1.1(a)(1) of the SCM Agreement.  
7.8.2.1.2   Whether the USDOC f ailed to take account of the diversification of economic 
activities and of the length of time the subsidy programme has been in operation  
7.358.   In all three reviews, the USDOC relied on the factual findings made in the "underlying 
investigation" to conclude that  the provision of wire rod for less than adequate remuneration 
"conferred a countervailable subsidy". Further, the USDOC considered in all three reviews that, 
with respect to wire rod, "[n]o interested party provided new evidence that would lead us to 
reconsider our earlier findings that … the subsidy conferred is specific".566 Regarding the provision 
of steel strip for less than adequate remuneration, in the first administrative review, the USDOC 
relied on the fact that "'steel consuming industries' [were] l imited in number and, hence, the 
subsidy [was] specific".567 In the second and third administrative reviews, the USDOC simply relied 
on its findings in the first administrative review.568 
7.359.   We recall the finding in the original dispute that the USDOC had acted i nconsistently with 
Article 2.1(c) in its specificity determinations by failing to take into account "the extent of 
diversification of economic activities within the jurisdiction of the granting authority", as well as of 
"the length of time during which the  subsidy programme has been in operation".569 We find that 
the provision of steel strip and wire rod for less than adequate remuneration were considered 
de facto specific on the same basis as in the original investigation. We find no indication in the 
determ inations or the record – and the United States points to none – that additional factors were 
considered, either explicitly or implicitly, during the administrative reviews.  
                                                
563 USDOC Second Administrative Review in Kitchen Shelving , (Exhibit CHN -31), p. 6.  
564 USDOC Second Administrative Review in Kitchen Shelving , (Exhibit CHN -31), p. 6.  
565 USDOC Third Administrative Review in Kitchen Shelvin g: Preliminary Determination , 
(Exhibit  CHN-32), p. 5, which was the basis for the final determination. ( USDOC Third Administrative Review in 
Kitchen Shelving: Final Determination , (Exhibit CHN -33), pp. 4 -5). 
566 USDOC First Administrative Review in Kitchen S helving , (Exhibit CHN -30), p. 17: "In the underlying 
investigation, we determined that this program conferred a countervailable subsidy. No interested party 
provided new evidence that would lead us to reconsider our earlier findings that … the subsidy conf erred is 
specific." See also USDOC Second Administrative Review in Kitchen Shelving , (Exhibit CHN -31), pp.  9-11; and 
USDOC Third Administrative Review in Kitchen Shelving: Preliminary Determination , (Exhibit CHN-32), pp. 8 -9. 
567 USDOC First Administrative R eview in Kitchen Shelving , (Exhibit CHN -30), p. 20.  
568 USDOC Second Administrative Review in Kitchen Shelving , (Exhibit CHN -31), p. 11; USDOC Third 
Administrative Review in Kitchen Shelving: Preliminary Determination , (Exhibit CHN-32), p. 9.  
569 Panel Report, US – Countervailing Measures (China) , paras. 7.257 and 8.1(v).  WT/DS437/RW  
 
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  7.360.   We conclude that China has made a prima facie  case that the USDOC did not take account 
of the two factors in the last sentence of Article 2.1(c) in its specificity determinations in the three 
administrative reviews in Kitchen Shelving. We also consider that the United States has not 
rebutted China's arguments in relation to the de facto  specificity determinations in these 
administrative reviews.  
7.361.   We therefore find that China has demonstrated that the three measures at issue are 
inconsistent with Article 2.1(c) of the SCM Agreement.  
7.8.2.1.3   Conclusion on China 's claims concerning the Kitchen Shelving administrative 
reviews  
7.362.   China has demonstrated that the United States acted inconsistently with Articles 1.1(a)(1) 
and 2.1(c) of the SCM Agreement in the three Kitchen Shelving administrative reviews.  
7.8.2.2   Administrative  reviews in the OCTG proceeding  
7.363.   China claims that in the two administrative reviews in the OCTG proceeding570, the 
USDOC:  
a. applied a government ownership and control standard to determine that producers of 
steel rounds are public bodies within the meaning of  Article 1.1(a)(1) of the 
SCM Agreement;  
b. rejected domestic prices of steel rounds in China for determining whether a benefit was 
conferred in the absence of any evidence that government -related entities possessed 
and exercised market power in a manner tha t distorts domestic prices in China; and  
c. failed, in its de facto  specificity determination, to take account of "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".571 
On this basis, China claims that the two administrative reviews are inconsistent with 
Articles  1.1(a)(1), 1.1(b), 14(d), and 2.1(c) of the SCM Agreement.  
 
7.8.2.2.1   Whether the USDOC applied an improper legal standard in i ts public body 
determinations  
7.364.   In the first administrative review in OCTG, the USDOC focused on the ownership of the 
providers of steel rounds as the basis for its public body determinations, as follows:  
a. With respect to steel rounds producers owned or cont rolled directly or indirectly by the 
GOC, the USDOC found that these enterprises were "'authorities' … as they [were] 
majority owned by the government".572  
b. With respect to steel rounds producers that the GOC claimed were not majority state 
owned or controll ed, the USDOC attempted to identify the "eventual owners" "because it 
is the eventual owners … that ultimately control the steel round producers".573  
c. With respect to steel rounds producers owned by individuals, the USDOC inquired 
whether the "ultimate indiv idual owners … were CCP officials". The Final Determination 
indicates that this information is relevant "because … CCP exerts significant control over 
activities in the PRC".574 
                                                
570 USDOC First Administrative Review in OCTG , (Exhibit CHN -34), pp. 9 -12; USDOC Second 
Administrative Review in OCTG: Final Determination , (Exhibit CHN -36), pp. 9 -16. 
571 China's fi rst written submission, paras. 396 -401. 
572 USDOC First Administrative Review in OCTG , (Exhibit CHN -34), p. 11.  
573 USDOC First Administrative Review in OCTG , (Exhibit CHN -34), p. 11.  
574 USDOC First Administrative Review in OCTG , (Exhibit CHN -34), pp. 10 -11. WT/DS437/RW  
 
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  7.365.   We do not find any indication in the determination or the records that the USDOC  
considered evidence that these producers, at the time of the investigation, possessed, exercised, 
or were vested with governmental authority to perform a governmental function. Although the 
USDOC referred to information in the Public Bodies Memorandum and  CCP Memorandum in its 
explanations based on "certain findings relevant to the CCP", the USDOC clarified that "[i]n 
describing the Public Bodies Memorandum and CCP Memorandum in this review, we do not mean 
to suggest that we are applying the same standard in this review" as that set out in those 
documents, i.e. an analysis of whether entities possessed, exercised, or were vested with 
governmental authority. Rather, the USDOC described the legal standard applied in the first review 
as follows: "in this revie w, we find that an entity is an 'authority' if it is controlled by the 
government".575 In our view, this indicates that the USDOC applied an ownership or control 
standard, and did not make its public body determination on the basis of whether the entities in  
question possessed, exercised, or were vested with governmental authority.  
7.366.   We thus conclude that China has made a prima facie  case that the USDOC applied an 
ownership or control standard, and did not make its public body determination on the basis of 
whether the entities in question possessed, exercised, or were vested with governmental 
authority. The United States has not rebutted China's arguments in relation to the public body 
determination in the review at issue.  
7.367.   We therefore find that China has demo nstrated that the public body determination in the 
first administrative review in OCTG is inconsistent with Article 1.1(a)(1) of the SCM Agreement.  
7.368.   In the second administrative review, regarding government -owned producers of steel 
rounds the USDOC found t hat "steel round producers that are majority owned by the government 
are 'authorities' … for the reasons described in the Public Body Memorandum".576 The USDOC 
further explained that its finding with respect to majority government -owned companies was "not 
based solely on state ownership", but rather was "based on the fact that the GOC exercises 
meaningful control over these entities and uses them to effectuate its goals of upholding the 
socialist market economy, allocating resources and maintaining the predom inant role of the state 
sector."577 Regarding companies "that the GOC claimed were privately owned by individuals" and 
"owned by other corporations … or with less -than-majority state ownership", the USDOC explained 
that the information received in response t o its questions was incomplete and determined that it 
"cannot confirm the GOC's claim that these companies are not majority -owned by the state".578 In 
this regard, the USDOC referred to information in the Public Bodies Memorandum regarding the 
role of the go vernment in Chinese enterprises, and applied an adverse inference based on facts 
available to conclude that "non -SOE producers of steel rounds for which the GOC failed to provide" 
requested information were public bodies.579 
7.369.   In addition, the final determination in the second administrative review in OCTG sets out 
extensive reasoning and explanation by the USDOC with respect to majority state -owned 
producers of steel rounds, as well as the relevance to the public body inquiry of CCP affiliations 
with companies, specifically referring to information in the Public Bodies Memorandum and the 
CCP Memorandum.580 In this regard, the USDOC recalled that "a 'public body' must be an entity 
that possesses, exercises or is vested with governmental authority", and s tated this to be the 
USDOC's finding in this administrative review.581 
7.370.   Therefore, in the second administrative review in OCTG, it is not apparent that the USDOC 
applied the same standard of government ownership or control that was found to be inconsistent 
in the original dispute. China has not addressed any of the foregoing aspects of the 
                                                
575 USDOC First Administrative Review in OCTG , (Exhibit CHN -34), fn 210.  
576 USDOC Second Administrative Review in OCTG: Preliminary Determination , (Exhibit CHN -35), p. 24; 
USDOC Second Administrative Review in OCTG: Final Determination , (Exhibit CHN -36), p. 28.  
577 USDOC Second Administrative Review in OCTG: Final Determination , (Exhibit CHN -36), p. 49.  
578 USDOC Second Administrative Review in OCTG: Final Determination , (Exhibit CHN -36), pp. 10 -13. 
The USDOC's questionnaire sought information relating to the owners hip of such companies as well as 
"whether and how operational or strategic decisions made by the management or board of directors are 
subject to government review or approval". ( USDOC Second Administrative Review in OCTG: Final 
Determination , (Exhibit CHN -36), p. 11).  
579 USDOC Second Administrative Review in OCTG: Final Determination , (Exhibit CHN -36), pp. 14 -15. 
580 USDOC Second Administrative Review in OCTG: Final Determination , (Exhibit CHN -36), pp. 48 -56.  
581 USDOC Second Administrative Review in OCTG: Fina l Determination , (Exhibit CHN -36), p. 50.  WT/DS437/RW  
 
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  USDOC's  determination in the second administrative review in OCTG, particularly regarding the 
USDOC's explanations relating to whether entities possessed, exercised, or were  vested with 
governmental authority.  
7.371.   We therefore find that China has not made a prima facie  case that the USDOC's public 
body determination in the second administrative review in OCTG is inconsistent with the provisions 
of Article 1.1(a)(1) of the SCM Agr eement.  
7.8.2.2.2   Whether the USDOC improperly rejected in -country prices as benchmarks  
7.372.   China claims that "the USDOC rejected in -country prices as benchmarks in the absence of 
any evidence that government -related entities possessed and exercised market power in a ma nner 
that distorts domestic prices in China."582  
7.373.   We are not convinced by China's argument. Article 14(d) of the SCM Agreement requires 
that the "adequacy of remuneration shall be determined in relation to prevailing market conditions 
for the good in questio n in the country of provision or purchase". For the reasons set out above583 
we do not consider that in -country prices may be rejected as a benchmark only when 
government -related entities possess and exercise market power in a manner that distorts 
in-country  prices. As discussed above, there may be other circumstances in which an investigating 
authority may reject in -country prices as a benchmark in determining benefit.  
7.374.   China has not put forward any other argument in support of its claim that the USDOC 
impro perly rejected in -country prices as benchmarks, and has not otherwise contested the 
USDOC's conclusion in these administrative reviews regarding "the government's extensive 
involvement in the Chinese steel rounds market".584 We therefore find that China has not made a 
prima facie  case that the USDOC's benchmark determinations in the two administrative reviews in 
the OCTG proceeding are inconsistent with Articles 1.1(b) and 14(d) of the SCM Agreement.  
7.8.2.2.3   Whether the USDOC failed to take account of the diversific ation of economic 
activities and of the length of time the subsidy programme has been in operation  
7.375.   In the first administrative review the USDOC relied on the same finding as in the OCTG 
investigation, i.e. that "the products listed by the GOC … are a limit ed group of industries", to 
determine that the provision of steel rounds for less than adequate remuneration was specific.585 
In the second administrative review, the USDOC found that the provision of steel rounds was 
specific as "no information [had] been provided on the record of the instant review that would 
cause [the USDOC] to reach a different determination" from that in t he OCTG investigation.586  
7.376.   We recall the finding in the original dispute that the USDOC had acted inconsistently with 
Article 2.1(c) in its specificity determinations by failing to take account of "the extent of 
diversification of economic activities within the jurisdiction of the granting authority", as well as of 
"the length of time during which the subsidy programme has been in operation".587 We find that 
the provision of steel rounds for less than adequate remuneration was found to be de facto  specific 
on the same basis as in the original investigation in the administrative reviews at issue here. We 
find no indication on the record – and the United States points to none – that additional factors 
were considered, either explicitly or implicitly, during the ad ministrative reviews.  
7.377.   We thus conclude that China has made a prima facie  case that the USDOC did not take 
account of the two factors in the last sentence of Article 2.1(c) in its specificity determinations in 
the two administrative reviews in OCTG. The Un ited States has not rebutted China's arguments in 
relation to the de facto  specificity determinations in these administrative reviews.  
7.378.   We therefore find that China has demonstrated that the two measures at issue are 
inconsistent with Article 2.1(c) of the SCM Agreement.  
                                                
582 China's first written submission, paras. 398 -399. 
583 See Section 7.3.3.2    above.  
584 USDOC Second Administrative Review i n OCTG: Final Determination , (Exhibit CHN -36), p. 28.  
585 USDOC First Administrative Review in OCTG , (Exhibit CHN -34), p. 49.  
586 USDOC Second Administrative Review in OCTG: Final Determination , (Exhibit CHN -36), p. 28.  
587 Panel Report, US – Countervailing Meas ures (China) , paras. 7.257 and 8.1(v).  WT/DS437/RW  
 
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  7.8.2.2.4   Conclusion on China's claims concerning the OCTG administrative reviews  
7.379.   China has demonstrated that the United States acted inconsistently with Articles 1.1(a)(1) 
and 2.1(c) of the SCM Agreement in the first OCTG administrative review and t hat the 
United  States acted inconsistently with Article 2.1(c) of the SCM Agreement in the second OCTG 
administrative review.  
7.380.   China has not demonstrated that the United States acted inconsistently with Articles 1.1(b) 
and 14(d) of the SCM Agreement in the  first OCTG administrative review nor that the 
United  States acted inconsistently with Articles 1.1(a)(1), 1.1(b), and 14(d) of the SCM Agreement 
in the second OCTG administrative review.  
7.8.2.3   Administrative reviews in the Aluminum Extrusions proceeding  
7.381.   China c laims that in the three administrative reviews in the Aluminum Extrusions 
proceeding588, the USDOC:  
a. Applied, in its public body determination, a government ownership and control standard 
to determine that producers of primary aluminium are public bodies wit hin the meaning 
of Article 1.1(a)(1) of the SCM Agreement; and  
b. Failed, in its de facto  specificity determination, to take account of "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".  
On this basis, China claims that the three administrative reviews are inconsistent with 
Articles  1.1(a)(1) and 2.1(c) of the SCM Agreement.  
 
7.8.2.3.1   Whether the USDOC applied an improper legal standa rd in its public body 
determinations  
7.382.   In the first administrative review, the USDOC's investigation focused on the ownership of 
the providers of primary aluminium.589 In particular, the USDOC found that:  
[F]or those input producers for which the GOC failed t o provide ownership 
information, failed to identify whether the members of the board of directors, owners 
or senior managers were government/CCP officials, or failed to report if the companies 
had CCP committees, we are finding them to be "authorities".590  
7.383.   We find no evidence in the determination or record of the first administrative review that 
the USDOC considered other characteristics of the input producers. Nor do we find any evidence 
that the USDOC considered whether these producers, at the time of the investigation, possessed, 
exercised, or were vested with governmental authority to perform a governmental function. We 
thus conclude that China has made a prima facie  case that the USDOC applied an ownership or 
control standard, and did not make its public  body determinations on the basis of whether the 
entities in question possessed, exercised, or were vested with governmental authority. The 
United  States has not rebutted China's arguments in relation to the public body determinations in 
the review at issu e.  
7.384.   We therefore find that China has demonstrated that the measure at issue is inconsistent 
with Article 1.1(a)(1) of the SCM Agreement.  
7.385.   In the second and third administrative reviews in the Aluminum Extrusions proceeding, the 
USDOC applied a different an alytical framework in its public body determinations.591 The 
                                                
588 USDOC First Administrative Review in Aluminum Extrusions , (Exhibit CHN -39); USDOC Second 
Administrative Review in Aluminum Extrusions , (Exhibit CHN -40); and USDOC Third Administrative Review in 
Aluminum Extrusions , (Exhibit CHN -41). 
589 USDOC First Administrative Review in Aluminum Extrusions , (Exhibit CHN -39), pp. 22 -26. 
590 USDOC First Administrative Review in Aluminum Extrusions , (Exhibit CHN -39), p. 25.  
591 USDOC Second Administrative Review in Aluminum Extrusions , (Exhibit CHN -40), p. 17 and fn 68 
(referring to Public Bodies Memorandum and CCP Memorandum, (Exhibit CHN -1)); USDOC Third Administrative WT/DS437/RW  
 
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  determinations rely on the content of the Public Bodies Memorandum and indicate that the 
USDOC's findings are not based solely on state ownership, but rather on the finding in the Public 
Bodies Mem orandum that majority government -owned SOEs in the PRC possess, exercise, or are 
vested with governmental authority because the GOC exercises meaningful control over these 
entities and uses them to effectuate its goals of upholding the socialist market eco nomy, allocating 
resources, and maintaining the predominant role of the state sector.592 The USDOC also explained 
the relevance to the public body inquiry of CCP affiliations with companies, specifically referring to 
information in the Public Bodies Memorand um and the CCP Memorandum.593 
7.386.   Therefore, in the second and third administrative reviews in Aluminum Extrusions, it is not 
apparent that the USDOC applied the same standard of government ownership or control that was 
found to be inconsistent in the original d ispute. China has not addressed any of the foregoing 
aspects of the USDOC's determinations in the second and third administrative reviews in 
Aluminum Extrusions, particularly regarding the USDOC's explanations relating to whether entities 
possessed, exerci sed, or were vested with governmental authority.  
7.387.   We therefore find that China has not made a prima facie  case that the USDOC's public 
body determinations in the second and third administrative reviews in Aluminum Extrusions are 
inconsistent with the provis ions of Article 1.1(a)(1) of the SCM Agreement.  
7.8.2.3.2   Whether the USDOC failed to take account of the diversification of economic 
activities and of the length of time the programme has been in operation  
7.388.   In the three administrative reviews, the USDOC relied on th e same explanation as in the 
original investigation as a basis for its de facto  specificity analysis.594  
7.389.   We recall the finding in the original dispute that the USDOC had acted inconsistently with 
Article 2.1(c) in its specificity determinations by failing t o take account of "the extent of 
diversification of economic activities within the jurisdiction of the granting authority", as well as of 
"the length of time during which the subsidy programme has been in operation".595 We find that 
the provision of primary aluminium for less than adequate remuneration was considered de facto  
specific in the three administrative reviews on the same basis as in the original dispute. We find no 
indication on the record – and the United States points to none – that additional factors were 
considered, either explicitly or implicitly, during the ad ministrative reviews.  
7.390.   We thus conclude that China has made a prima facie  case that the USDOC did not take 
account of the two factors in the last sentence of Article 2.1(c) in its specificity determinations in 
the administrative reviews in Aluminum Extrusi ons. The United States has not rebutted 
China's  arguments in relation to the de facto  specificity determinations in these administrative 
reviews.  
7.391.   We therefore find that China has demonstrated that the measures at issue are inconsistent 
with Article 2.1(c)  of the SCM Agreement.  
                                                                                                                                                  
Review in Aluminum Extrusions , (Exhibit CHN -41), p. 20 and fn 72 (referring to Public Bodies Memorandum 
and CCP Memorandu m, (Exhibit CHN -1)). 
592 USDOC Second Administrative Review in Aluminum Extrusions , (Exhibit CHN -40), p. 59; USDOC 
Third Administrative Review in Aluminum Extrusions , (Exhibit CHN -41), p. 22.  
593 USDOC Second Administrative Review in Aluminum Extrusions , (Exhi bit CHN -40), pp. 61 -64; USDOC 
Third Administrative Review in Aluminum Extrusions , (Exhibit CHN -41), p. 112.  
594 USDOC First Administrative Review in Aluminum Extrusions , (Exhibit CHN -39), p. 29: "the GOC has 
not provided information to warrant a reconsiderat ion of our determination from the Investigation , where the 
Department found that the provision of primary aluminum is specific" (emphasis original). See USDOC Second 
Administrative Review in Aluminum Extrusions , (Exhibit CHN -40), p. 25: "we continue to fin d that, based on 
data provided by the GOC in the investigation on the end uses for primary aluminum, the industries which 
purchase primary aluminum are limited in number and, hence, the subsidy is specific." See USDOC Third 
Administrative Review in Aluminu m Extrusions , (Exhibit CHN -41), p. 53: consistent with the first and second 
reviews, "we find that the industries that purchase primary aluminum are limited in number and, hence, the 
subsidy is specific."  
595 Panel Report, US – Countervailing Measures (Chin a), paras. 7.257 and 8.1(v).  WT/DS437/RW  
 
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  7.8.2.3.3   Conclusion on China's claims concerning the Aluminum Extrusions 
administrative reviews  
7.392.   China has demonstrated that the United States acted inconsistently with Articles 1.1(a)(1) 
and 2.1(c) of the SCM Agreement in the first Aluminum Extrusions administrative review and that 
the United States acted inconsistently with Article 2.1(c) of the SCM Agreement in the second and 
third Aluminum Extrusions administrative reviews.  
7.393.   China has not demonstrated that the United States acted inconsist ently with 
Article  1.1(a)(1) of the SCM Agreement in the second and third Aluminum Extrusions 
administrative reviews.  
7.8.2.4   Administrative reviews in the Solar Panels proceeding  
7.394.   China claims that in the two administrative reviews in the Solar Panels proceeding596, the 
USDOC:  
a. applied a government ownership and control standard to determine that producers of 
polysilicon and solar glass are public bodies within the meaning of Article 1.1(a)(1) of 
the SCM Agreement;  
b. rejected domestic prices of polysilicon and solar g lass in China for determining whether a 
benefit was conferred in the absence of any evidence that government -related entities 
possessed and exercised market power in a manner that distorts domestic prices in 
China; and  
c. failed, in its de facto  specificity d etermination, to take account of "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".  
On this basis, China claims that t he two administrative reviews are inconsistent with 
Articles  1.1(a)(1), 1.1(b), 14(d) and 2.1(c) of the SCM Agreement.  
 
7.8.2.4.1   Whether the USDOC applied an improper legal standard in its public body 
determinations  
7.395.   In support of its claim, China refers to the Iss ues and Decision Memoranda for the "final 
results" of two administrative reviews in the Solar Panels proceeding.597 We understand, based on 
these documents, that the final public body determinations reached by the USDOC are the same 
as its preliminary determ inations.598 However, we find no evidence in these documents of the legal 
standard applied by the USDOC in determining that producers of polysilicon and solar glass are 
public bodies.  
7.396.   We thus conclude that China has not made a prima facie  case that the USDO C's public 
body determinations in the two administrative reviews at issue are inconsistent with 
Article  1.1(a)(1) of the SCM Agreement.  
7.8.2.4.2   Whether the USDOC improperly rejected in -country prices as benchmarks  
7.397.   China claims that "the USDOC rejected domestic prices as benchmarks in the absence of 
any evidence that government -related entities … possessed and exercised market power in a 
manner that distorts domestic prices in China".599  
                                                
596 USDOC First Administrative Review in Solar Panels , (Exhibit CHN -42); USDOC Second Administrative 
Review in Solar Panels , (Exhibit CHN -43). 
597 USDOC First Administrative Review in Solar Panels , (Exhibit CHN -42); USDOC Second Administrative 
Review in Solar Panels , (Exhibit CHN -43). 
598 USDOC First Administrative Review in Solar Panels , (Exhibit CHN -42), pp. 15 -16; USDOC Second 
Administrative Review in Solar Panels , (Exhibit CHN -43), p. 4.  
599 China's first written submission, paras . 411-412. WT/DS437/RW  
 
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  7.398.   We are not convinced by China's argument. Article 14(d) of the SCM Agreement requires 
that the "adequacy of remuneration shall be determined in relation to prevailing market conditions 
for the good in question in the country of provision or purchase". For the reasons set out above600, 
we do not consider that in -country prices may be rejected as a benchmark only when 
government -related entities possess and exercise market power in a manner that distorts 
in-country prices. As discussed above, there may be other circumstances in which an investigating 
authority may reject in -country pric es as a benchmark in determining benefit.  
7.399.   China has not put forward any other argument in support of its claim that the USDOC 
improperly rejected in -country prices as benchmarks. In particular, China has not otherwise 
contested the USDOC's conclusion that  "the GOC's involvement … significantly distorts the prices in 
the industry".601 We therefore find that China has not made a prima facie  case that the 
USDOC's  benchmark determinations in the two administrative reviews in the Solar Panels 
proceeding are incon sistent with Articles 1.1(b) and 14(d) of the SCM Agreement.  
7.8.2.4.3   Whether the USDOC failed to take account of the diversification of economic 
activities and of the length of time the subsidy programme has been in operation  
7.400.   In the first administrative review, t he USDOC determined – on the basis of the number of 
industries using polysilicon and solar glass – that the provision of polysilicon and solar glass for 
less than adequate remuneration was a specific subsidy.602 We find no evidence on the record of 
these com pliance proceedings – and the United States points to none – that additional factors 
were considered, either explicitly or implicitly, during the administrative reviews.  
7.401.   We thus conclude that China has made a prima facie  case that the USDOC's de facto  
specificity determination in the first administrative review did not take account of the extent of the 
diversification of economic activities or of the length of time during which the subsidy programme 
had been in operation. The United States does not rebut C hina's argument in relation to de facto  
specificity. For the foregoing reasons, we find that China has demonstrated that the 
USDOC's  determination in the first administrative review in the Solar Panels proceeding is 
inconsistent with Article 2.1(c) of the SCM Agreement.  
7.402.   Regarding the second administrative review, China refers to an Issues and Decision 
Memorandum for the "final results" of the second administrative review in the Solar Panels case in 
support of its claim.603 We understand, based on this docume nt, that the Final Determination 
reached by the USDOC is the same as its preliminary determination on several issues, including 
de facto specificity.604 However, we find no evidence in this document of the legal standard applied 
by the USDOC to determine if the subsidy at issue was de facto  specific.  
7.403.   We thus find that China has not made a prima facie  case that the USDOC's de facto  
specificity determination in the second Solar Panels administrative review was inconsistent with 
Article 2.1(c) of the SCM Agreement.  
7.8.2.4.4   Conclusion on China's claims concerning the Solar Panels administrative 
reviews  
7.404.   China has demonstrated that the United S tates acted inconsistently with Article 2.1(c) of 
the SCM Agreement in the first Solar Panels administrative review.  
7.405.   China has not demonstrated that the United States acted inconsistently with 
Articles  1.1(a)(1), 1.1(b), and 14(d) of the SCM Agreement in the two Solar Panels administrative 
                                                
600 See Section 7.3.3.2    above.  
601 USDOC First Administrative Review in Solar Panels , (Exhibit CHN -42), p. 17; USDOC Second 
Administrative Review in Solar  Panels , (Exhibit CHN -43), p. 6. The USDOC additionally stated in the second 
administrative review that "the GOC's involvement in the polysilicon market has resulted in distortions, and 
therefore the market is not reliable for the purposes of calculating a  program benefit in this proceeding". 
(USDOC Second Administrative Review in Solar Panels , (Exhibit CHN -43), p. 18).  
602 USDOC First Administrative Review in Solar Panels , (Exhibit CHN -42), pp. 21. and 24.  
603 USDOC Second Administrative Review in Solar Panels , (Exhibit CHN -43). 
604 USDOC Second Administrative Review in Solar Panels , (Exhibit CHN -43), p. 4.  WT/DS437/RW  
 
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  reviews nor that the United States acted inconsistently with Article 2.1(c) of the SCM Agreement in 
the second Solar Panel administrative review.  
7.8.2.5   China's claims concerning administrative reviews in the Magnesia Bricks 
proceeding  
7.406.   China claims that the USDOC continues to act in violation of Article 11.3 of the 
SCM Agreement by imposing countervailing duties on imports of magnesia bricks on the basis of 
subsidy determinations in an investigation which was not properly initi ated. China also claims that, 
by including this subsidy in the "adverse facts available rate" calculated in the administrative 
reviews, the USDOC violated Article 12.7 of the SCM Agreement which, according to China, 
"requires that investigating authorities  base their determinations on the basis of the facts available 
on the record of the administrative reviews at issue".605  
7.407.   The United States does not rebut China's arguments alleging violations of Article 11.3 and 
Article 12.7 in the Magnesia Bricks proceedin g. The United States' response focuses on the alleged 
lack of jurisdiction of this compliance Panel to consider the two administrative reviews at issue. In 
particular, the United States asserts that " the measures that China identifies were concluded prior 
to the end of the RPT on April 1, 2016, and thus were not 'subsequently closely connected' to the 
measures taken to comply in this dispute".606  
7.408.   We recall, however, that in the context of a "close nexus" analysis, the timing of measures 
alone is not a decisi ve factor.607 More fundamentally, excluding measures on the grounds that they 
pre-date the end of the RPT seems incompatible with the purpose of the RPT, namely to give 
Members a period of time in which to comply with DSB recommendations and rulings.  
7.409.   We rec all our views above regarding the close connection between determinations under 
the same countervailing duty order concerning the same products from China, and the related 
effects arising from the resulting imposition of countervailing duties on the produc ts in question. 
Accordingly, we find that the two administrative reviews in the Magnesia Bricks proceeding are 
within the scope of our review in these Article 21.5 proceedings.  
7.8.2.5.1   China's claim under Article 11.3 of the SCM Agreement  
7.410.   In the original dispute,  China challenged the initiation of the Magnesia Bricks investigation 
on the basis that a financial contribution existed by virtue of an export restraint and its effects on 
domestic prices in the exporting country.608 The panel found that the USDOC's initiat ion of a 
countervailing duty investigation in respect of certain export restraints was inconsistent with 
Article 11.3 of the SCM Agreement.609  
7.411.   The evidence before us in this compliance proceeding shows that, in the administrative 
review determination pertai ning to Magnesia Bricks covering the year 2012, the USDOC calculated 
the countervailing duty rate on the basis of the subsidy margins calculated for several subsidy 
programs, including the "Export Restraints of Raw Materials".610 We find no such evidence 
regarding the calculation of the countervailing duty rate in the administrative review covering the 
period August 2010 – December 2010.611  
7.412.   Article 11.3 of the SCM Agreement deals with the initiation of countervailing duty 
investigations and states:  
                                                
605 China's first written submission, para. 402.  
606 United States' first written submission, para. 321.  
607 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 224.  
608 Panel Report, US – Countervailing Measures (China) , para. 7.392.  
609 Panel Report, US – Countervailing Measures (China) , para. 7.406. In particular, the panel considered 
that an unbiased, objective investigating authority would not have f ound that the evidence in the application in 
Magnesia Bricks was adequate evidence tending to prove or indicating the existence of a financial contribution 
in the form of a government -entrusted or government -directed provision of goods. (Ibid. para. 7.404) . 
610 USDOC Second Administrative Review in Magnesia Bricks , (Exhibit CHN -38), p. 4 and attachment, 
pp. A -1 and A -5.  
611 USDOC First Administrative Review in Magnesia Bricks , (Exhibit CHN -37). WT/DS437/RW  
 
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  The author ities shall review the accuracy and adequacy of the evidence provided in 
the application to determine whether the evidence is sufficient to justify the initiation 
of an investigation.  
7.413.   In the present compliance dispute, China challenges the calculation of the countervailing 
duty rate applied as a result of the administrative reviews conducted for 2010 and 2012. 
China's  claim under Article 11.3 does not concern the initiation of an investigation, but rather the 
calculation of the subsidy margin for the produ ct concerned in the administrative reviews on the 
basis of facts available. The applicable provision covering administrative reviews is Article 21 of the 
SCM Agreement612, which establishes different disciplines than those applicable to original 
investigatio ns under Article 11 of the SCM Agreement.613 We note that China has not raised a 
claim under Article 21 of the SCM Agreement in relation to the administrative reviews in question.  
7.414.   Based on China's limited arguments, it is unclear to us how "the United State s continues to 
act inconsistently with Article 11.3 of the SCM Agreement"614, which concerns the initiation of 
original  investigations, in its calculation of countervailing duty rates based on facts available in an 
administrative  review that is subject to di fferent and distinct provisions of the SCM Agreement. 
Therefore, we are of the view that China has not explained how its explanation supports a claim 
that the USDOC acted inconsistently with Article 11.3 of the SCM Agreement in the Magnesia 
Bricks administ rative reviews.  
7.415.   We thus find that China has not made a prima facie  case that the two administrative 
reviews in the Magnesia Bricks proceeding are inconsistent with Article 11.3 of the 
SCM Agreement.  
7.8.2.5.2   China's claim under Article 12.7 of the SCM Agreement  
7.416.   China also claims that, by including the alleged export restraint subsidy in the so -called 
"adverse facts available rate", the United States acted inconsistently with Article 12.7 of the 
SCM Agreement. In particular, China argues that Article 12.7 requires  investigating authorities to 
base their determinations on the facts available on the record of the administrative reviews at 
issue.615  
7.417.   Article 12.7 allows investigating authorities to make determinations on the basis of the 
facts available in cases in which an interested party refuses access to or otherwise does not 
provide necessary information within a reasonable period or significantly impedes the 
investigation. Annex II to the Anti -Dumping Agreement (which is relevant context for the 
interpretation of Article 12.7) refers to the use of "Best Information Available". In particular, 
paragraph 7 of Annex II provides that "if an interested party does not cooperate and thus relevant 
information is being withheld from the authorities, this situation could l ead to a result which is less 
favourable to the party than if the party did cooperate."  
7.418.   The Appellate Body has established that facts which can be used to replace the missing 
information are those that are in the possession of the investigating authorities  and on its written 
record.616 In that process, all substantiated facts on the record must be taken into account617; by 
contrast, non -factual assumptions or speculations cannot form the basis of a determination.  
7.419.   It is not clear to us from China's arguments wh y the subsidy margin established for the 
alleged export restraint subsidy could not be considered as one of the facts available on the 
record. We recall that the original panel's finding of inconsistency of the initiation was based on the 
                                                
612 Appellate Body Report, US – Carbon Steel (India) , para. 4.523.  
613 The Appellate Body has stated that and the focus of the inquiry under Article  21 "is on the amount of 
time that a duty may remain in force, rather than the circumstances under which that duty initially entered into  
force". (Appellate Body Report, US – Carbon Steel (India) , para. 4.524 (referring to Panel  Report, Japan – 
DRAMs (Korea) , para.  7.350 (emphasis original))). The Appellate Body further observed that "nothing in the 
language of Articles  11 and 21 expressly imports the requirements of Article  11 to the conduct of 
administrative reviews under Article  21". (Appellate Body Report, US – Carbon Steel (India) , para. 4.527).  
614 China's first written submission, para. 402.  
615 China's first written submission, para. 402.  
616 Appellate Body Report, US – Carbon S teel (India) , para. 4.417.  
617 Appellate Body Report, US – Carbon Steel (India) , para. 4.419 (referring to Appellate Body Report, 
Mexico – Anti-Dumping Measures on Rice , para. 294).  WT/DS437/RW  
 
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  (in)adequacy of e vidence in the application concerning the existence of a financial contribution. 
China has not explained how this finding leads to the conclusion that the export restraint subsidy 
margin is not one of the "facts available" to the investigating authority in  the administrative 
reviews at issue. This is particularly the case for the 2012 review determination, in which the 
alleged export restraint subsidy rate does appear on the record. In the case of the administrative 
review for August -December 2010, we do no t even find evidence that the alleged export restraint 
subsidy rate was used at all in the calculation of the countervailing duty rate.  
7.420.   We therefore find that China has not made a prima facie  case that inclusion of the export 
restraint subsidy margin in t he determination of the adverse facts available rate in the 
administrative review determinations is inconsistent with Article 12.7 of the SCM Agreement.  
7.8.2.5.3   Conclusion on China's claim under Articles 11.3 and 12.7 of the 
SCM Agreement in the Magnesia Bricks p roceeding  
7.421.   We thus conclude that China has not demonstrated that the United States acted 
inconsistently with Articles 11.3 and 12.7 of the SCM Agreement in the two Magnesia Bricks 
administrative reviews.  
7.8.2.6   China's claims under Article 21.3 of the SCM agreeme nt 
7.422.   China claims that certain sunset review determinations are inconsistent with Article  21.3 of 
the SCM Agreement because they "rely on prior determinations of subsidization" that are 
inconsistent with the SCM Agreement.618 In particular, China claims that e ach sunset review 
determination in question619 is inconsistent with Article 21.3 of the SCM Agreement because the 
USDOC's findings are based in part  on the USDOC's original determinations, which were found to 
be inconsistent with various provisions of the SC M Agreement in the original dispute.  
7.423.    The United States responds that China has not adduced sufficient evidence and argument 
that the methodologies used by the USDOC in the identified sunset reviews are WTO -inconsistent. 
According to the United States:  
China has merely cited to the determinations and provided very cursory discussions of 
the sunset reviews. China has also failed to provide a sufficient legal argument with 
respect to the methodologies in the concluded sunset reviews that they were 
inconsist ent with the SCM Agreement.620  
7.424.   China responds that for each administrative review and sunset review determination issued 
subsequent to the measures at issue in the original dispute it: (a) identified the legal standard 
applied by the USDOC and referred the Panel to the portion of the USDOC Issues and Decision 
Memorandum in which that legal standard was applied; (b) identified the provision of the 
SCM Agreement which contains the obligation implicated in the USDOC's analysis and the legal 
standard that the US DOC should have applied; and (c) explained that the USDOC had applied an 
erroneous legal standard.621  
7.425.   Article 21.3 of the SCM Agreement provides that a countervailing duty should be 
terminated after five years unless the investigating authorities determine that there is a likelihood 
of continuation or recurrence of subsidization and injury. An investigating authority's determination 
of the likelihood of continuation or recurrence of subsidization rests on an evaluation of the 
evidence, including evidence fro m the original investigation, the intervening reviews, and the 
sunset review.622 We recall that:  
The evidence and arguments underlying a prima facie  case … must be sufficient to 
identify the challenged measure and its basic import, identify the relevant WTO  
                                                
618 China's first written submission, paras. 415 -424. 
619 Sunset reviews in Ther mal Paper, Pressure Pipe, Line Pipe, Kitchen Shelving, OCTG, Wire Strand, 
Magnesia Bricks, Seamless Pipe, Print Graphics, and Aluminum Extrusions.  
620 United States' first written submission, para. 337.  
621 China's second written submission, para. 241.  
622 Panel Report, US – Carbon Steel , paras. 8.92 -8.95. WT/DS437/RW  
 
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  provision and obligation contained therein, and explain the basis for the claimed 
inconsistency of the measure with that provision.623 
We also recall that a panel cannot make the case for the complaining party.624 
 
7.426.   With these principles in mind, we understand  China's argument to be that the 
determinations in the sunset reviews at issue are inconsistent with Article 21.3 because the 
USDOC based its sunset review findings in part on findings in earlier determinations that were 
found to be inconsistent with the S CM Agreement.625 The earlier inconsistencies referred to by 
China in this regard are with Articles 1.1(a)(1), 1.1(b), 2.1(c), 2.2, 11.3, and 14(d), the provisions 
of the SCM Agreement with which the USDOC was found, in the original dispute, to have acted 
inconsistently. China makes no claim or argument that the sunset review determinations are 
themselves inconsistent with those provisions. For example, in its panel request, China states that 
the sunset review determinations " are inconsistent with Article 21.3  of the SCM Agreement  
because they rely on prior determinations of subsidization" that are otherwise inconsistent with the 
SCM Agreement.626  
7.427.   Based on the foregoing, we find that, albeit briefly, China has sufficiently explained its 
claim in relation to the sunset reviews identified in this case. We thus turn to consideration 
of: (a) whether each sunset review challenged by China was based on determinations that were 
inconsistent with the "relevant provisions" of the SCM Agreement; and (b) if so, whether this  
results in a violation of Article 21.3 of the SCM Agreement.  
7.8.2.6.1   The Thermal Paper sunset review  
7.428.   China claims that the USDOC's determination in the sunset review in the Thermal Paper 
proceeding is inconsistent with Article 21.3 of the SCM Agreement because t he finding of likelihood 
of continuation or recurrence of subsidization was based "in part" on a determination of regional 
specificity which had been found inconsistent with Article 2.2 of the SCM Agreement in the original 
dispute.  
7.429.   We recall that the orig inal panel found in the Thermal Paper proceeding that:  
[T]he USDOC acted inconsistently with the United States' obligations under Article 2.2 
of the SCM Agreement by making positive determinations of regional specificity while 
failing to establish that the alleged subsidy was limited to certain enterprises loc ated 
within a designated geographical region within the jurisdiction of the granting 
authority.627 
7.430.   As part of a prima facie  case that the sunset review determination in the Thermal Paper 
proceeding was inconsistent with Article 21.3, China must adduce eviden ce that the 
USDOC's  determination of likelihood of continuation or recurrence of countervailable subsidies in 
that determination was based on the same error as had been found in the original dispute.  
7.431.   In support of its claim, China refers to the 2014 Issue s and Decision Memorandum for the 
final results of the expedited first sunset review in Thermal Paper.628 This document indicates that 
the USDOC considered the net countervailable subsidy determined in the investigation and any 
subsequent reviews, and whethe r "any changes in the programs which gave rise to the net 
                                                
623 Appellate Body Report, US – Gambling , para. 141.  
624 Appellate Body Report, Japan – Agricultural Products II, para. 129. 
625 This is also the way the United States appears to have understood China's claim: see 
United  States'  first written submission, para. 337: " China merely asserts that the USDOC's finding that 
revocation of the respective orders would be likely to lead to continuation or recurrence of countervailable 
subsidies [was] based in part on specificity and/or public body, benchmark and input specificity determinations 
and that such determinations were found to be WTO -inconsistent in the original d ispute."  
626 China's panel request, para. 31 (emphasis added). Similarly, China argues that each of the identified 
sunset reviews is inconsistent with Article 21.3 as a consequence of reliance on inconsistencies with other 
provisions of the SCM Agreement. (C hina's first written submission, paras. 415 -424 and 434(m)).  
627 Panel Report, US – Countervailing Measures (China) , para. 7.354. (emphasis original)  
628 China's first written submission, para. 415 and fn 426; USDOC Sunset Review in Thermal Paper , 
(Exhibit CH N-44).  WT/DS437/RW  
 
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  countervailable subsidy have occurred that are likely to affect the net countervailable subsidy".629 
In the absence of an administrative review of the countervailing duty order in this proceeding, the  
USDOC found that there was "no information indicating any changes in the programs"630, including 
the provision of land to Guangdong Guanhao High -tech Co., Ltd in the Zhanjiang Economic and 
Technological Development Zone for less than adequate remuneration, and that a "countervailable 
subsidy would be likely to continue or recur if the [countervailing duty] order were revoked" 
because of "the continued existence of programs found to provide countervailable benefits."631 
Additionally, with respect to the net cou ntervailable subsidy rates likely to prevail if the order were 
revoked, the USDOC determined that it did not "need to adjust the rates from  the investigation to 
account for additional subsidies, program -wide changes or terminated programs".632  
7.432.   We therefore find that China has adduced evidence that the sunset review determination in 
the Thermal Paper proceeding was based in part on an inconsistent finding of regional specificity.  
7.8.2.6.2   The Pressure Pipe sunset review  
7.433.   China claims that the USDOC's sunset review in the Pressure Pipe proceeding is 
inconsistent with Article 21.3 of the SCM Agreement because the finding of likelihood of 
continuation or recurrence of subsidization was based "in part" on public body, benchmar k, and 
de facto specificity determinations which had been found to be inconsistent with Articles 1.1(a)(1), 
1.1(b), 2.1(c), and 14(d) of the SCM Agreement in the original dispute.  
7.434.   We recall that the original panel found in the Pressure Pipe proceeding tha t:  
[T]he USDOC determined that the relevant input suppliers were public bodies on the 
grounds that these suppliers were majority -owned or otherwise controlled by the 
Government of China, either on the basis of the evidence on the record or by 
assuming suc h government ownership or control when the USDOC applied facts 
available.  
This is evident from the excerpts from the Issues and Decision Memoranda that China 
has provided in Exhibit CHI -123, the relevant parts of which we cite below:  
Pressure Pipe  
Based on  our review of the information submitted by the GOC, we determined in the 
preliminary determination that domestic suppliers of the Winner Companies' SSC that 
were majority -owned by the GOC  during the [period of investigation] constitute 
government authorit ies.633  
7.435.   In addition, the Appellate Body found:  
[T]he USDOC did not explain in its determination whether and how the mentioned 
market shares held by SOEs actually resulted in the government's possession and 
exercise of market power, such that the price disto rtion occurred in a way that private 
suppliers aligned their prices with those of the government -provided goods.  
Accordingly, we find that the USDOC's analysis and explanation for rejecting 
in-country prices in China in its benchmark analysis in the Pressu re Pipe countervailing 
duty investigation is inconsistent with the obligations of the United States under 
Article 14(d) and Article 1.1(b) of the SCM Agreement.634  
                                                
629 USDOC Sunset Review in Thermal Paper , (Exhibit CHN -44), p. 4.  
630 USDOC Sunset Review in Thermal Paper , (Exhibit CHN -44), p. 5.  
631 USDOC Sunset Review in Thermal Paper, (Exhibit CHN -44), p. 5.  
632 USDOC Sunset Review in Thermal Paper , (Exhibit CHN -44), pp. 7 and 10.  
633 Panel Report, US – Countervailing Measures (China) , paras. 7.61 -7.62. (emphasis original)  
634 Appellate Body Report, US – Countervailing Measures (China) , paras. 4.101 -4.102. (emphasis 
original)  WT/DS437/RW  
 
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  7.436.   Finally, in relation to the de facto  specificity of the provision of stainless steel coil for  less 
than adequate remuneration, we recall that the original panel found that the USDOC had failed to 
take account of the two factors in the last sentence of Article 2.1(c) of the SCM Agreement.  
7.437.   As part of a prima facie  case that the sunset review determ ination in the Pressure Pipe 
proceeding was inconsistent with Article 21.3 of the SCM Agreement, China must adduce evidence 
that the USDOC's determination of likelihood of continuation or recurrence of countervailable 
subsidies was based on the same errors  as had been found in the original dispute.  
7.438.   In support of its claim, China refers to the 2014 Issues and Decision Memorandum for the 
final results of the expedited sunset review in Pressure Pipe.635 This document indicates that the 
USDOC considered whether "any changes in the programs which gave rise to the net 
countervailable subsidy have occurred that are likely to affect the net countervailable subsidy".636 
The USDOC stated that it had not conducted an administrative review of the order since it went 
into e ffect and that no party submitted evidence to demonstrate that the countervailable programs 
(including the provision of stainless steel coil for less than adequate remuneration) had expired or 
been terminated. Thus, the USDOC determined that "there is a li kelihood of recurrence of 
countervailable subsidies because the record in this proceeding indicates that the subsidy 
programs found countervailable during the investigation continue to exist and be used".637 For this 
reason, the USDOC determined that "the ne t countervailable subsidy rates found in the 
investigation … are the net countervailable subsidy rates likely to prevail were the order to be 
revoked".638 This determination encompassed the provision of stainless steel coil for less than 
adequate remuneratio n.639  
7.439.   We therefore find that China has adduced evidence that the sunset review determination in 
the Pressure Pipe proceeding was based in part on inconsistent public body, benchmark, and 
de facto specificity findings.  
7.8.2.6.3   The Line Pipe sunset review  
7.440.   China claims that the USDOC's sunset review in the Line Pipe proceeding is inconsistent 
with Article 21.3 of the SCM Agreement because the finding of likelihood of continuation or 
recurrence of subsidization was based "in part" on public body, benchmark, a nd de facto  specificity 
determinations which had been found to be inconsistent with Articles 1.1(a)(1), 1.1(b), 2.1(c), and 
14(d) of the SCM Agreement in the original dispute.  
7.441.   As part of a prima facie  case that the sunset review determination in the Line Pipe 
proceeding was inconsistent with Article 21.3 of the SCM Agreement, China must adduce evidence 
that the USDOC's determination of likelihood of continuation or recurrence of countervailable 
subsidies was based on the same errors found as had been found  in the original dispute.  
7.442.   In support of its claim, China refers to the 2014 Issues and Decision Memorandum for the 
final results of the expedited sunset review in Line Pipe.640 This document indicates that the 
USDOC considered whether "any changes in the pr ograms which gave rise to the net 
countervailable subsidy have occurred that are likely to affect the net countervailable subsidy".641 
In the absence of an administrative review of the order since it went into effect, the USDOC 
determined that there was "a l ikelihood of recurrence of countervailable subsidies because the 
record in this proceeding indicates that the subsidy programs found countervailable during the 
investigation continue to exist and be used".642 For this reason, the USDOC determined that "the 
net countervailable subsidy rates found in the investigation … are the net countervailable subsidy 
                                                
635 China's first written submission, para. 416  and fn 428; USDOC Sunset Review in Pressure Pipe , 
(Exhibit CHN -45).  
636 USDOC Sunset Review in Pressure Pipe , (Exhibit CHN -45), p. 4.  
637 USDOC Sunset Review in Pressure Pipe , (Exhibit CHN -45), p. 5.  
638 USDOC Sunset Review in Pressure Pipe , (Exhibit CHN -45), p. 6. 
639 USDOC Sunset Review in Pressure Pipe , (Exhibit CHN -45), p. 6.  
640 China's first written submission, para. 417 and fn 430; USDOC Sunset Review in Line Pipe , 
(Exhibit  CHN-46).  
641 USDOC Sunset Review in Line Pipe , (Exhibit CHN -46), p. 4.  
642 USDOC Sunset  Review in Line Pipe , (Exhibit CHN -46), p. 5.  WT/DS437/RW  
 
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  rates likely to prevail were the order to be revoked".643 This determination encompassed the 
provision of hot -rolled steel for less than adequate remuneration.644  
7.443.   We therefore find that China has adduced evidence that the sunset review determination in 
the Line Pipe proceeding was based in part on inconsistent public body, benchmark, and de facto 
specificity findings.  
7.8.2.6.4   The Kitchen Shelving sunset review  
7.444.   China clai ms that the USDOC's sunset review in the Kitchen Shelving proceeding is 
inconsistent with Article 21.3 of the SCM Agreement because the finding of likelihood of 
continuation or recurrence of subsidization was based "in part" on public body and de facto  
specificity determinations which were found to be inconsistent with Articles 1.1(a)(1) and 2.1(c) of 
the SCM Agreement in the original dispute.  
7.445.   As part of a prima facie  case that the sunset review determination in the Kitchen Shelving 
proceeding was inconsis tent with Article 21.3 of the SCM Agreement, China must adduce evidence 
that the USDOC's determination of likelihood of continuation or recurrence of countervailable 
subsidies was based on the same errors as had been found in the original dispute.  
7.446.   In suppo rt of its claim, China refers to the 2014 Issues and Decision Memorandum for the 
final results of the expedited sunset review in Kitchen Shelving.645 This document indicates that 
the USDOC considered whether "any changes in the programs which gave rise to th e net 
countervailable subsidy have occurred that are likely to affect the net countervailable subsidy".646 
In view of the fact that three administrative reviews of the countervailing duty order in this case 
found that "PRC producers of kitchen racks continue d to receive countervailable subsidies from 
programs identified in the investigation as providing countervailable subsidies" and considering 
that "no party submitted evidence to demonstrate that the countervailable programs [had] expired 
or been terminated ", the USDOC determined that the subsidies found countervailable during the 
investigation and subsequent administrative reviews continued to exist and be used.647 For this 
reason, the USDOC added to the net countervailable subsidy rates determined in the ori ginal 
investigation the countervailable subsidy rates from the additional subsidies found to be 
countervailable in three administrative reviews.648 This determination encompassed the provision 
of wire rod and steel strip for less than adequate remuneration.649  
7.447.   We therefore find that China has adduced evidence that the sunset review determination in 
the Kitchen Shelving proceeding was based in part on inconsistent public body and de facto  
specificity findings.  
7.8.2.6.5   The OCTG sunset review  
7.448.   China claims that the USDOC 's sunset review in the OCTG proceeding is inconsistent with 
Article 21.3 of the SCM Agreement because the finding of likelihood of continuation or recurrence 
of subsidization was based "in part" on public body, benchmark, and de facto  specificity 
determin ations which had been found to be inconsistent with Articles 1.1(a)(1), 1.1(b), 2.1(c), and 
14(d) of the SCM Agreement in the original dispute.  
7.449.   As part of a prima facie  case that the sunset review determination in the OCTG proceeding 
was inconsistent with  Article 21.3 of the SCM Agreement, China must adduce evidence that the 
USDOC's determination of likelihood of continuation or recurrence of countervailable subsidies was 
based on the same errors as had been found in the original dispute.  
                                                
643 USDOC Sunset Review in Line Pipe , (Exhibit CHN -46), p. 6.  
644 USDOC Sunset Review in Line Pipe , (Exhibit CHN -46), p. 8.  
645 China's first written submission, para. 418 and fn 432; USDOC Sunset Review in Kitchen S helving , 
(Exhibit CHN -47).  
646 USDOC Sunset Review in Kitchen Shelving , (Exhibit CHN -47), p. 6.  
647 USDOC Sunset Review in Kitchen Shelving , (Exhibit CHN -47), p. 8.  
648 USDOC Sunset Review in Kitchen Shelving , (Exhibit CHN -47), p. 9.  
649 USDOC Sunset Review in Ki tchen Shelving , (Exhibit CHN -47), pp. 12 -13. WT/DS437/RW  
 
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  7.450.   In support of its  claim, China refers to the 2015 Issues and Decision Memorandum for the 
final results of the expedited sunset review in OCTG.650 This document indicates that the USDOC 
considered whether "any changes in the programs which gave rise to the net countervailable  
subsidy have occurred that are likely to affect the net countervailable subsidy".651 In view of the 
fact that two administrative reviews of the countervailing duty order in this case found that "PRC 
producers of OCTG continued to receive countervailable sub sidies from programs identified in the 
investigation … [as] providing benefits to PRC producers of OCTG" and considering that "no party 
submitted evidence to demonstrate that the countervailable programs [had] expired or been 
terminated", the USDOC determi ned that the subsidies found countervailable during the 
investigation and subsequent administrative reviews continued to exist and be used.652 For this 
reason, the USDOC added to the net countervailable subsidy rates determined in the original 
investigation the countervailable subsidy rates from the additional subsidies found be 
countervailable in the two administrative reviews.653 This determination encompassed the 
provision of steel rounds for less than adequate remuneration.654  
7.451.   We therefore find that China has adduced evidence that the sunset review determination in 
the OCTG proceeding was based in part on inconsistent public body and de facto  specificity 
findings.  
7.8.2.6.6   The Wire Strand sunset review  
7.452.   China claims that the USDOC's suns et review in the Wire Strand proceeding is inconsistent 
with Article 21.3 of the SCM Agreement because the finding of likelihood of continuation or 
recurrence of subsidization was based "in part" on public body and de facto  specificity 
determinations which  were found to be inconsistent with Articles 1.1(a)(1) and 2.1(c) of the 
SCM Agreement in the original dispute.  
7.453.   As part of a prima facie  case that the sunset review determination in the Wire Strand 
proceeding was inconsistent with Article 21.3 of the SCM Agreement, China must adduce evidence 
that the USDOC's determination of likelihood of continuation or recurrence of countervailable 
subsidies was based on the same errors as had been found in the original dispute.  
7.454.   In support of its claim, China refers to the 2015 Issues and Decision Memorandum for the 
final results of the expedited sunset review in Wire Strand.655 This document indicates that the 
USDOC considered whether "any changes in the programs which gave rise to the net 
countervailable subsidy have occ urred that are likely to affect the net countervailable subsidy".656 
The USDOC also indicated that in view of the fact that no administrative review had been carried 
out in this case since issuance of the countervailing duty order and considering that no party had 
submitted evidence to demonstrate that the subsidy programs  found to be countervailable in the 
final determination had expired or been terminated, "the subsidy programs found countervailable 
during the investigation continued to exist and be used."657 For this reason, the USDOC 
determined that "no evidence [had] bee n provided that would warrant making a change to the net 
countervailable subsidy rate found for PRC producers and exporters in the investigation."658 This 
determination encompassed the provision of wire rod for less than adequate remuneration.659  
7.455.   We therefore  find that China has adduced evidence that the sunset review determination in 
the Wire Strand proceeding was based in part on inconsistent public body and de facto  specificity 
findings.  
                                                
650 China's first written submission, para. 419 and fn 434; USDOC Sunset Review in OCTG , 
(Exhibit  CHN-48).  
651 USDOC Sunset Review in OCTG , (Exhibit  CHN-48), p. 5.  
652 USDOC Sunset Review in OCTG , (Exhibit  CHN-48), p . 7. 
653 USDOC Sunset Review in OCTG , (Exhibit  CHN-48), p. 8.  
654 USDOC Sunset Review in OCTG , (Exhibit  CHN-48), pp. 9 -10. 
655 China's first written submission, para. 420 and fn 436; USDOC Sunset Review in Wire Strand , 
(Exhibit CHN -49).  
656 USDOC Sunset Review in  Wire Strand , (Exhibit CHN -49), p. 4.  
657 USDOC Sunset Review in Wire Strand , (Exhibit CHN -49), p. 5.  
658 USDOC Sunset Review in Wire Strand , (Exhibit CHN -49), p. 6.  
659 USDOC Sunset Review in Wire Strand , (Exhibit CHN -49), p. 8.  WT/DS437/RW  
 
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  7.8.2.6.7   The Magnesia Bricks sunset review  
7.456.   China claims that the sunset review  in Magnesia Bricks is inconsistent with Article 21.3 of 
the SCM Agreement because the sunset review determination is based "in part" on the "alleged 
export restraints for raw materials program"660, which China challenged before the original panel 
on the bas is of Article 11.3 and 12.7 of the SCM Agreement. We recall that the panel found the 
initiation of an investigation with respect to this alleged programme to be inconsistent with 
Article  11.3 of the SCM Agreement.  
7.457.   In determining the net countervailable su bsidy rates likely to prevail should the order be 
revoked in the sunset review determination challenged by China, the USDOC reported a 
countervailable subsidy  rate from the investigation that incorporates the export restraints at 
issue.661  
7.458.   We therefore find  that China has adduced evidence that the sunset review determination in 
Magnesia Bricks incorporated a finding of subsidy which had been made in an investigation 
initiated inconsistently with Article 11.3 with respect to that same subsidy.  
7.8.2.6.8   The Seamless P ipe sunset review  
7.459.   China claims that the USDOC's sunset review in the Seamless Pipe proceeding is 
inconsistent with Article 21.3 of the SCM Agreement because the finding of likelihood of 
continuation or recurrence of subsidization was based "in part" on pub lic body and de facto  
specificity determinations which were found to be inconsistent with Articles 1.1(a)(1) and 2.1(c) of 
the SCM Agreement in the original dispute.  
7.460.   As part of a prima facie  case that the sunset review determination in the Seamless Pipe 
proceeding was inconsistent with Article 21.3 of the SCM Agreement, China must adduce evidence 
that the USDOC reached its determination of likelihood of continuation or recurrence of 
countervailable subsidies on the basis of the same errors as had been foun d in the original dispute.  
7.461.   In support of its claim, China refers to the 2016 Issues and Decision Memorandum for the 
final results of the expedited sunset review in Seamless Pipe.662 This document indicates that the 
USDOC considered whether "any changes in t he programs which gave rise to the net 
countervailable subsidy have occurred that are likely to affect the net countervailable subsidy".663 
In the absence of an administrative review in this case and considering that "neither the GOC nor 
other respondent int erested parties [have] participated in this sunset review", the USDOC 
determined that the subsidy programs found countervailable during the investigation continued to 
exist.664 For this reason, the USDOC decided not to adjust "the rates from the investigatio n to 
account for additional subsidies, program -wide changes or terminated programs".665 This 
determination encompassed the provision of steel rounds for less than adequate remuneration.666  
7.462.   We therefore find that China has adduced evidence that the sunset revi ew determination in 
the Seamless Pipe proceeding was based in part on inconsistent public body and de facto  
specificity findings.  
7.8.2.6.9   The Print Graphics sunset review  
7.463.   China claims that the USDOC's sunset review in the Print Graphics proceeding is 
inconsistent  with Article 21.3 of the SCM Agreement because the finding of likelihood of 
continuation or recurrence of subsidization was based "in part" on public body and de facto  
specificity determinations which had been found to be inconsistent with Articles 1.1(a) (1) and 
2.1(c) of the SCM Agreement in the original investigation.  
                                                
660 China's first written submission, para. 421.  
661 USDOC Sunset Review in Magnesia Bricks , (Exhibit CHN -50), p. 8.  
662 China's first written submission, para. 422 and fn 440; USDOC Sunset Review in Seamless Pipe , 
(Exhibit CHN -51).  
663 USDOC Sunset Review in Seam less Pipe , (Exhibit CHN -51), p. 4.  
664 USDOC Sunset Review in Seamless Pipe , (Exhibit CHN -51), p. 6.  
665 USDOC Sunset Review in Seamless Pipe , (Exhibit CHN -51), p. 7.  
666 USDOC Sunset Review in Seamless Pipe , (Exhibit CHN -51), p. 7.  WT/DS437/RW  
 
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  7.464.   As part of a prima facie  case that the sunset review determination in the Print Graphics 
proceeding was inconsistent with Article 21.3 of the SCM Agreement, China must adduce evidence 
that the USDOC reached its determination of likelihood of continuation or recurrence of 
countervailable subsidies on the basis of the same errors as had been found in the original dispute.  
7.465.   In support of its claim, China refers to the 2016 Issues and Decision Memorandum for the 
final results of the expedited sunset review in Print Graphics.667 This document indicates that the 
USDOC considered whether "any changes in the programs which gave rise to the net 
countervailable subsidy have occurred that are likely to a ffect the net countervailable subsidy".668 
In the absence of an administrative review in this case and considering that "neither the GOC nor 
other respondent interested parties [have] participated in this sunset review", the USDOC 
determined that the subsidy  programs found countervailable during the investigation continued to 
exist.669 For this reason, the USDOC decided not to adjust "the rates from the investigation to 
account for additional subsidies, program -wide changes or terminated programs".670 This 
determ ination encompassed the provision of papermaking chemicals (including caustic soda) for 
less than adequate remuneration.671 
7.466.   We therefore find that China has adduced evidence that the sunset review determination in 
the Print Graphics proceeding was based in p art on inconsistent public body and de facto  specificity 
findings.  
7.8.2.6.10   The Aluminum Extrusions sunset review  
7.467.   China claims that the USDOC's sunset review in the Aluminum Extrusions proceeding is 
inconsistent with Article 21.3 of the SCM Agreement because the f inding of likelihood of 
continuation or recurrence of subsidization was based "in part" on public body and de facto  
specificity determinations which had been found to be inconsistent with Articles 1.1(a)(1) and 
2.1(c) of the SCM Agreement in the original d ispute.  
7.468.   As part of a prima facie  case that the sunset review determination in the Aluminum 
Extrusions proceeding was inconsistent with Article 21.3 of the SCM Agreement, China must 
adduce evidence that the USDOC reached its determination of likelihood of continuation or 
recurrence of countervailable subsidies on the basis of the same errors as had been found in the 
original dispute.  
7.469.   In support of its claim, China refers to the 2016 Issues and Decision Memorandum for the 
final results of the expedited suns et review in Aluminum Extrusions.672 This document indicates 
that the USDOC considered whether "any changes in the programs which gave rise to the net 
countervailable subsidy have occurred that are likely to affect the net countervailable subsidy".673 
The USDOC determined that there was "no information on the record indicating any changes in the 
programs found to be countervailable during the investigation or subsequent administrative 
reviews".674 For this reason, the USDOC added to the net countervailab le subsidy rates determined 
in the original investigation the countervailable subsidy rates from the additional subsidies found to 
be countervailable in three administrative reviews.675 This determination encompassed the 
provision of primary aluminium, alumi nium extrusions, and glass for less than adequate 
remuneration.676  
7.470.   We therefore find that China has adduced evidence that the sunset review determination in 
the Aluminum Extrusions proceeding was based in part on inconsistent public body and de facto  
specif icity findings.  
                                                
667 China's first written submi ssion, para. 423 and fn 442; USDOC Sunset Review in Print Graphics , 
(Exhibit CHN -52).  
668 USDOC Sunset Review in Print Graphics , (Exhibit CHN -52), p. 5.  
669 USDOC Sunset Review in Print Graphics , (Exhibit CHN -52), p. 6.  
670 USDOC Sunset Review in Print Graphics , (Exhibit CHN -52), pp. 7 and 10.  
671 USDOC Sunset Review in Print Graphics , (Exhibit CHN -52), p. 9.  
672 China's first written submission, para. 424 and fn 444; USDOC Sunset Review in Aluminum 
Extrusions , (Exhibit CHN -53).  
673 USDOC Sunset Review in Aluminum Ex trusions , (Exhibit CHN -53), p. 7.  
674 USDOC Sunset Review in Aluminum Extrusions , (Exhibit CHN -53), p. 8.  
675 USDOC Sunset Review in Aluminum Extrusions , (Exhibit CHN -53), p. 10.  
676 USDOC Sunset Review in Aluminum Extrusions , (Exhibit CHN -53), p. 16.  WT/DS437/RW  
 
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  7.8.2.6.11   Conclusion on China's claim in relation to sunset reviews  
7.471.   We have found that China has adduced evidence that each of the sunset reviews it 
challenges were based in part on underlying determinations which had been found inconsistent 
with th e SCM Agreement.677  
7.472.   We recall that China's claim is that the USDOC's determinations in the sunset reviews at 
issue are inconsistent with Article 21.3 of the SCM Agreement. Article 21.3 sets out a distinct 
obligation pertaining to the termination of counterv ailing duties that is separate from the 
disciplines imposed by other provisions of the SCM Agreement on the determination of subsidies 
and the investigation and imposition of countervailing duties. China's position appears to be that 
the fact that a sunset  review determination is based in part on inconsistencies in other underlying 
determinations automatically demonstrates a violation of Article 21.3.  
7.473.   However, in our view, China has not sufficiently explained how the incorporation of certain 
earlier inconsistent findings results in determinations inconsistent with Article 21.3. In the absence 
of a clear legal argument, we find that China has not made a prima facie  case that the USDOC 
acted inconsistently with Article 21.3 in determining that revocation of the orders at issue in the 
challenged sunset reviews would be likely to lead to continuation or recurrence of subsidization.  
7.474.   We thus conclude that Chin a has not demonstrated that the United States acted 
inconsistently with Article 21.3 of the SCM Agreement in the Thermal Paper, Pressure Pipe, Line 
Pipe, Kitchen Shelving, OCTG, Wire Strand, Magnesia Bricks, Seamless Pipe, Print Graphics, and 
Aluminum Extr usions sunset reviews.  
7.9  China's claims regarding the ongoing conduct of imposing, assessing, and collecting 
countervailing duties and cash deposits under the countervailing duty orders at issue  
7.9.1   Main arguments of the parties  
7.475.   China claims that the United Stat es' "ongoing conduct", that is, continuing to impose, 
assess, and collect countervailing duties and/or cash deposits under the countervailing duty orders 
at issue, is inconsistent with Articles 1.1(a)(1), 1.1(b), 2.1(c), 2.2, 11.3, and 14(d) of the 
SCM Agreement, because it is "based on the USDOC's present, continued, and systematic 
application of erroneous legal standards".678 China also claims that the ongoing conduct is 
inconsistent with Articles 19.1, 19.3, and 19.4 of the SCM Agreement, because it result s in the 
levying of countervailing duties and cash deposits that are in excess of the amount of 
subsidization.679 According to China, the USDOC's consistent application of erroneous legal 
standards in the administrative reviews to date "strongly suggests" th at the USDOC will apply the 
same erroneous legal standards when the same issues arise in forthcoming administrative reviews 
in other proceedings.680  
7.476.   The United States asks the Panel to reject China's claim because measures not yet in 
existence at the time o f Panel establishment and potential future measures ("an indeterminate 
number of potential future measures") cannot be within a panel's terms of reference.681 
Specifically, the United States argues that China has failed to establish the existence of a "strin g of 
determinations, made sequentially … over an extended period of time" and the fact that the 
challenged practices would likely continue to be applied in successive proceedings.682  
                                                
677 In this regard, we note that all of the relevant sunset review determinations explicitly identified by 
China in its panel request were issued prior to the USDOC's adoption of final determinations in the Section 129 
proceedings on 9  June 2016. (China's first writte n submission, para. 3). The only sunset review determination 
referred to by China post -dating the relevant Section 129 determinations is the sunset review in the Aluminum 
Extrusions case, which was issued on 1 August 2016. We find no indication in any of t hese sunset reviews that 
the USDOC took into account its revised determinations from the Section 129 proceedings at issue in this 
dispute. Rather, the relevant sunset review determinations reflect reliance on original determinations from 
each investigation  as well as determinations in subsequent administrative reviews, where applicable.  
678 China's first written submission, para. 432.  
679 China's first written submission, para. 432.  
680 China's first written submission, para. 428.  
681 United States' first written submission, para. 314.  
682 United States' first written submission, paras. 327 -331. WT/DS437/RW  
 
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  7.477.   In addition, the United States argues that China has failed to make a prima facie  case that, 
through the ongoing conduct at issue, the United States acts in violation of the SCM Agreement. In 
particular, according to the United States, China has neither:  
a. identified the instances of collection of duties and cash deposits, as wel l as instances of 
assessments, that it is challenging;  
b. adduced evidence with respect to the content and nature of the instances of alleged 
ongoing conduct for the Panel to be able to make findings in relation to that content and 
nature; nor  
c. provided the P anel with sufficient legal arguments to rule upon, as it merely asserts that 
such ongoing conduct is purportedly based on the application of erroneous legal 
standards.683  
7.9.2   Main arguments of the third parties  
7.478.   Canada submits that ongoing conduct may be challen ged provided a complainant 
shows:  (a) that the measure is attributable to a Member; (b) the precise content of the measure; 
(c) the repeated application of the conduct; and (d) the likelihood such conduct will continue.684 
Canada considers that understanding  and applying the analytical device of "ongoing conduct" in a 
flexible manner is necessary to allow Members to obtain relief without having to return to dispute 
settlement multiple times685, and that such conduct is capable of being a "measure taken to 
compl y" within the meaning of Article 21.5 of the DSU if there is a sufficiently close nexus with the 
recommendations and rulings of the DSB and the declared measures taken to comply.686 
7.9.3   Evaluation by the Panel  
7.479.   We recall that there are circumstances in which " a string of connected and sequential 
determinations"687 by which duties are maintained in cases involving the "imposition, assessment 
and collection of duties under the same anti -dumping duty order"688 may constitute "ongoing 
conduct" that can be a measure subjec t to challenge in WTO dispute settlement. The burden of 
demonstrating the existence of such ongoing conduct, as well as the burden of proving a legal 
claim that the ongoing conduct at issue is inconsistent with WTO rules, rests on the complainant. 
In this case, China has framed its challenge against ongoing conduct based on "the USDOC's 
present, continued, and systematic application of erroneous legal standards"689, and has further 
argued that "[t]he USDOC's repeated application of these erroneous legal stand ards … reasonably 
indicates that such conduct is not only presently occurring, but also likely to occur in the 
future".690 
7.480.   Therefore, in our view, China must demonstrate the existence of: (a) a string of connected 
and sequential determinations reflecting the  systematic application of erroneous legal standards in 
relation to the SCM Agreement691; and (b) a likelihood that these inconsistencies would also 
continue in successive proceedings.692  
7.481.   In considering the administrative reviews at issue in this proceeding, we have found that 
China has demonstrated the existence of a string of connected determinations having a sufficient 
nexus with the rulings and recommendations of the DSB in the original dispute to bring those 
determinations within the Panel's jurisdiction.  However, we have also found that China had not 
made a prima facie  case that the subsequent administrative and sunset review determinations 
challenged by China in this dispute were systematically inconsistent with Articles 1.1(a)(1), 1.1(b), 
                                                
683 United States' first written submission, para. 340.  
684 Canada's third -party statement, paras. 6 -7. 
685 Canada's third -party statement, para. 10.  
686 Canada's third -party statement, paras. 22 -27. 
687 Appellate Body Report, US – Continued Zeroing , para. 180.  
688 Appellate Body Report, US – Continued Zeroing , para. 181.  
689 China's first written submission, para. 432.  
690 China's first written submission, para. 431.  
691 Appellate Body Report, US – Continued Zeroing , para. 180.  
692 Appellate Body Report, Argentina – Import Measures , para. 5.144.  WT/DS437/RW  
 
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  2.1(c), 2.2, 1 1.3, and 14(d) of the SCM Agreement as a consequence of the application of an 
erroneous legal standard. In particular, we found that in several administrative reviews China 
failed to demonstrate the application of an improper legal standard. Further, we ha ve determined 
that, in the Section  129 determinations at issue, China had not made a prima facie  case that the 
USDOC applied an improper legal standard in each determination.  
7.482.   As China itself states:  
In order to establish the existence of the ongoing cond uct that it challenges, China 
needs to establish that the USDOC applied unlawful public body, benefit, input 
specificity, land specificity, and export restraints legal standards in "successive 
determinations by which duties are maintained [in] connected st ages … involving [the] 
imposition, assessment and collection of duties under the same [countervailing] duty 
order".693 
7.483.   We are not convinced that the evidence on the record of this compliance proceeding 
demonstrates the existence of consistent violations of t he SCM Agreement nor that such 
inconsistencies would be replicated in subsequent proceedings. Although there is "a string of 
connected and sequential determinations" under each countervailing duty order, we fail to see the 
"unchanged component" in each of these successive proceedings.694 On the contrary, there are 
variations in the legal standards applied, and the WTO -consistency of the resulting determinations 
by the USDOC, in the various stages and proceedings in each of the relevant investigations.  
7.484.   We thu s conclude that China has failed to demonstrate the existence of ongoing conduct 
inconsistent with Articles 1.1(a)(1), 1.1(b), 2.1(c), 2.2, 11.3, and 14(d) of the SCM Agreement 
and with Articles 19.1, 19.3, and 19.4 of the SCM Agreement.  
8  CONCLUSIONS AND RE COMMENDATION  
8.1.  For the reasons set forth in this Report, the Panel concludes as follows:  
a. With respect to China's "as applied" claim under Article 1.1(a)(1) of the SCM Agreement, 
China has not demonstrated that the United States acted inconsistently with 
Article 1.1(a)(1) of the SCM Agreement in the Pressure Pipe, Line Pipe, Lawn Groomers, 
Kitchen Shelving, OCTG, Wire Strand, Seamless Pipe, Print Graphics, Aluminum 
Extrusions, Steel Cylinders, and Solar Panels Section 129 proceedings . 
b. With respect to China's " as such" claim under Article 1.1(a)(1) of the SCM Agreement, 
China has not demonstrated that the Public Bodies Memorandum is inconsistent "as 
such" with Article  1.1(a)(1) of the SCM Agreement.  
c. With respect to China's claim under Articles 1.1(b) and 14(d) o f the SCM Agreement, 
China has demonstrated that the United States acted inconsistently with Articles 1.1(b) 
and 14(d) of the SCM Agreement in the OCTG, Solar Panels, Pressure Pipe, and Line Pipe 
Section 129 proceedings.  
d. With respect to China's claim under  Article 32.1 of the SCM Agreement, China has not 
demonstrated that the United States acted inconsistently with Article 32.1 of the 
SCM Agreement in the OCTG, Line Pipe, Pressure Pipe, and Solar Panels Section 129 
proceedings.  
e. With respect to China's claim  under Article 2.1(c) of the SCM Agreement, China has 
demonstrated that the United States acted inconsistently with Article 2.1(c) of the 
SCM Agreement in the Pressure Pipe, Line Pipe, Lawn Groomers, Kitchen Shelving, 
OCTG, Wire Strand, Seamless Pipe, Prin t Graphics, Aluminum Extrusions, Steel 
Cylinders, and Solar Panels Section 129 proceedings.  
                                                
693 China's second written submission, para. 257.  
694 Appellate Body Report, US – Continued Zeroing , paras. 180 -181. WT/DS437/RW  
 
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  f. With respect to China's claim under Article 2.2 of the SCM Agreement, China has not 
demonstrated that the United States acted inconsistently with Article 2.2 of the  
SCM Agreement in the Thermal Paper Section 129 proceeding.  
g. With respect to China's claim concerning the final determination of the USDOC in the 
original Solar Panels investigation, China has demonstrated that the United States acted 
inconsistently with Ar ticles 1.1(a)(1), 1.1(b), 2.1(c), and 14(d) of the SCM Agreement in 
the final determination of the original Solar Panels investigation.  
h. With respect to China's claims concerning the Kitchen Shelving, OCTG, Aluminum 
Extrusions, Solar Panels, and Magnesia Br icks administrative reviews:  
i. China has demonstrated that the United States acted inconsistently with 
Articles  1.1(a)(1) and 2.1(c) of the SCM Agreement in the three Kitchen Shelving 
administrative reviews.  
ii. China has demonstrated that the United States act ed inconsistently with 
Articles  1.1(a)(1) and 2.1(c) of the SCM Agreement in the first OCTG administrative 
review and that the United States acted inconsistently with Article 2.1(c) of the 
SCM Agreement in the second OCTG administrative review.  
iii. China has not demonstrated that the United States acted inconsistently with 
Articles  1.1(b) and 14(d) of the SCM Agreement in the first OCTG administrative 
review nor that the United States acted inconsistently with Articles 1.1(a)(1), 1.1(b), 
and 14(d) of the SCM A greement in the second OCTG administrative review.  
iv. China has demonstrated that the United States acted inconsistently with 
Articles  1.1(a)(1) and 2.1(c) of the SCM Agreement in the first Aluminum Extrusions 
administrative review and that the United States acted inconsistently with 
Article  2.1(c) of the SCM Agreement in the second and third Aluminum Extrusions 
administrative reviews.  
v. China has not demonstrated that the United States acted inconsistently with 
Article  1.1(a)(1) of the SCM Agreement in the sec ond and third Aluminum Extrusions 
administrative reviews.  
vi. China has demonstrated that the United States acted inconsistently with 
Article  2.1(c) of the SCM Agreement in the first Solar Panels administrative review.  
vii. China has not demonstrated that the Unit ed States acted inconsistently with 
Articles  1.1(a)(1), 1.1(b), and 14(d) of the SCM Agreement in the two Solar Panels 
administrative reviews nor that the United States acted inconsistently with 
Article  2.1(c) of the SCM Agreement in the second Solar Panel  administrative review.  
viii. China has not demonstrated that the United States acted inconsistently with 
Articles  11.3 and 12.7 of the SCM Agreement in the two Magnesia Bricks 
administrative reviews.  
i. China has not demonstrated that the United States acted inc onsistently with Article 21.3 
of the SCM Agreement in the Thermal Paper, Pressure Pipe, Line Pipe, Kitchen Shelving, 
OCTG, Wire Strand, Magnesia Bricks, Seamless Pipe, Print Graphics and Aluminum 
Extrusions sunset reviews.  
j. With respect to the ongoing condu ct of imposing, assessing, and collecting countervailing 
duty and cash deposits under the countervailing duty orders at issue, China has not 
demonstrated the existence of ongoing conduct inconsistent with Articles 1.1(a)(1), 
1.1(b), 2.1(c), 2.2, 11.3, and 14(d) of the SCM Agreement and with Articles 19.1, 19.3, 
and 19.4 of the SCM Agreement.  
8.2.  Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to cons titute a case of WT/DS437/RW  
 
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  nullification or impairment. We conclude that, to the extent that the measures at issue are 
inconsistent with the SCM Agreement, they have nullified or impaired benefits accruing to China 
under that agreement.  
8.3.  Pursuant to Article 19.1 of t he DSU, we recommend that the United States bring its measures 
into conformity with its obligations under the SCM Agreement.  
 
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