WORLD TRADE  
ORGANIZATION  WT/DS296/5 
1 April 2005 
 (05-1309) 
 Original:   English 
  
UNITED STATES - COUNTERVAILING DUTY INVESTIGATION ON 
DYNAMIC RANDOM ACCESS MEMORY SEMICONDUCTORS 
(DRAMS) FROM KOREA 
 
Notification of an Appeal by the United States
 
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 20(1) of the Working Procedures for Appellate Review  
   The following notification, dated 29 March 200 5, from the Delegation of the United States, is 
being circulated to Members. 
 
_______________ 
 
 Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review, the 
United States hereby notifies its decision to app eal to the Appellate Body certain issues of law 
covered in the Report of the Panel on  United States – Countervailing Duty Investigation on Dynamic 
Random Access Memory Semiconductors (DRAMS) from Korea  (WT/DS296/R) ("Panel Report") and 
certain legal interpretations develope d by the Panel in this dispute. 
 
1. The United States seeks review by the Appellate  Body of the Panel's legal conclusion that the 
determination by the U.S. Department of Commerce ("DOC") of Government of Korea ("GOK") entrustment or direction of Hynix's Group B and C cr editors is inconsistent w ith Article 1.1(a)(1)(iv) 
of the Agreement on Subsidies and Countervailing Measures  ("SCM Agreement").
1  This conclusion 
is in error and is based on erroneous findings on issu es of law and related legal interpretations.  These 
erroneous findings include, for exam ple, the findings described below. 
 
 (a) The Panel erroneously interprete d the phrase "entrusts or directs" in 
Article 1.1(a)(1)(iv) of the SCM Agreem ent and then applied that erroneous 
interpretation to the record evidence.2 
 
 (b) The Panel applied an erroneous "probative and compelling" evidentiary standard that 
is not found in Article 1.1(a)(1)(iv) or an y other provision of the SCM Agreement (or 
any other covered agreement), and that, inter alia , effectively shifted the burden of 
proving a WTO-inconsistent action from Kor ea to the United States, caused the Panel 
to discount the circumstantial evidence relied upon by the DOC, and resulted in the Panel disregarding certain evidence altogether.
3 
                                                      
1Panel Report, paragraphs 7.175-7.178. 
2The Panel's erroneous interpretation is articulated in, inter alia , paragraphs 7.27-7.46 of the Panel 
Report, and is applied in subsequent paragraphs, including, inter alia , paragraphs 7.51, 7.56, 7.62-7.63, 
7.76-7.78, 7.82-7.91, 7.99-7.104, 7.129-7.130, 7.135,  7.141, 7.155, 7.163-7.168, 7.172-7.174, 7.175-7.178. 
3The Panel's erroneous standard of proof is set forth in, inter alia , paragraphs 7.35 and 7.46 of the 
Panel Report, and is applied in, inter alia , paragraphs 7.35, 7.45, 7.46, 7.51, 7.76-7.78, 7.99-7.103, 7.129-7.130, 
7.141, 7.164, 7.168, 7.173. WT/DS296/5 
Page 2  
 
  
 (c) The Panel relied upon evidence that was not  on the record of the DOC and that was 
contradicted by evidence that was on the DOC  record.  Such reliance was inconsistent 
with the Panel's obligation under Article  11 of the DSU to conduct an objective 
assessment of the matter before it.
4 
 
 (d) The Panel failed to consider certain reco rd evidence cited by the United States based 
on the Panel's erroneous findings that U.S. reliance on such record evidence 
constituted ex post facto  rationalizations.  These findings are erroneous because 
neither the SCM Agreement nor any ot her covered agreement requires an 
investigating authority to cite in its pub lished determinations to every piece of 
evidence on which the authority relies.  In addition, in most instances the DOC, in 
fact, had cited to the record evidence that the Panel disregarded.  In those instances 
where the DOC had not cited to the record  evidence disregarded by the Panel, the 
evidence was consistent with the record evidence that the DOC had cited.  The 
Panel's disregard of record evidence was inconsistent with the Panel's obligation 
under Article 11 of the DSU to conduct an obj ective assessment of the matter before 
it.5 
 
 (e) The standard of review actually applied by the Panel amounted to an impermissible 
de novo  review of the DOC determination.  As noted above in subparagraphs (c) 
and (d), the Panel improperly considered non-record evidence and disregarded record 
evidence.  In addition, instead of looking at  the totality of the record evidence, as had 
the DOC, the Panel considered each piece of evidence in isolation, ignored and/or 
mischaracterized ev idence upon which the DOC relied, and substituted its own 
interpretation of the evidence for that of the DOC.  The Panel's conduct of a de novo  
review was inconsistent with the Panel' s obligation under Article 11 of the DSU to 
conduct an objective assessment of the matter before it.6 
 
 (f) The Panel made an erroneous legal finding  that the DOC finding of entrustment or 
direction under Article 1.1(a)(1)(iv) was not supported by sufficient evidence.7 
 
2. The United States seeks review by the Appellate  Body of the Panel's legal conclusion that the 
DOC's benefit determination is inconsistent with  Article 1.1(b) of the SCM Agreement.  This 
conclusion is in error and is based on the Panel's e rroneous legal conclusion, d escribed in paragraph 1, 
above, that the DOC's determination of GOK entr ustment or direction of Hynix's Group B and C 
creditors is inconsistent with Article  1.1(a)(1)(iv) of the SCM Agreement.8 
 
3. The United States seeks review by the Appellate  Body of the Panel's legal conclusion that the 
DOC's finding of specificity is inconsistent with Ar ticle 2 of the SCM Agreement insofar as it relates 
to subsidies by Group B and C creditors.  This co nclusion is in error and is based on the Panel's 
erroneous legal conclusion, described in paragra ph 1, above, that the DOC's determination of GOK 
                                                      
4These errors are contained in, inter alia , paragraphs 7.63, 7.82-7.89, 7.91, 7.152 and 7.155 of the 
Panel Report. 
5These errors are contained in, inter alia , paragraphs 7.76, 7.88, 7.90, 7.102, 7.105, 7.116, 7.121, 
7.125-7.130 and 7.141 of the Panel Report. 
6These errors permeate section VII.C. 1 of the Panel Report, but examples of such errors are contained 
in, inter alia , paragraphs 7.45, 7.51, 7.56, 7.62-7.63, 7.77-7.7 8, 7.81-7.82, 7.85, 7.89, 7.91, 7.103-7.104, 7.130, 
7.146-7.155, 7.164, 7.168,  and 7.174 of the Panel Report. 
7This finding is set forth in, inter alia , paragraphs 7.175-7.177 of the Panel Report. 
8The Panel's findings are contained in paragraphs 7.190-7.191 of the Panel Report.  WT/DS296/5 
 Page 3 
 
 
 entrustment or direction of Hynix's Group B and C cred itors is inconsistent with Article 1.1(a)(1)(iv) 
of the SCM Agreement.9 
 
4. The United States seeks review by the Appellate  Body of the Panel's legal conclusion that, 
with respect to the DOC countervailing duty order, Korea's consultation request provides a sufficient 
indication of the legal basis of the complaint within  the meaning of Article 4.4 of the DSU.  This 
conclusion is in error and is based on erroneous  findings on issues of law and related legal 
interpretations.10 
__________  
                                                      
9Panel Report, paragraphs 7.204-7.208. 
10Panel Report, paragraphs 7.414-7.415.