WORLD TRADE  
ORGANIZATION  WT/DS269/R 
30 May 2005 
 (05-2074) 
 Original:   English 
  
 
     
 
   
EUROPEAN COMMUNITIES – CUSTOMS CLASSIFICATION 
OF FROZEN BONELESS CHICKEN CUTS 
 
Complaint by Brazil  
 
Report of the Panel 
 
 
  WT/DS269/R 
 Page i 
 
 
TABLE OF CONTENTS 
Page  
LIST OF ANNEXES................................................................................................................ ...........vii 
TABLE OF CASES CITED IN THIS REPORT ..............................................................................ix LIST OF ABBREVIATIONS .......................................................................................................... ....x 
I.
 INTRODUCTION ................................................................................................................... .1 
II. FACTUAL ASPECTS ..............................................................................................................2  
A. EC SCHEDULE LXXX .....................................................................................................................2  
B. THE EUROPEAN COMMUNITIES ' COMBINED NOMENCLATURE .....................................................3  
C. HARMONIZED SYSTEM .................................................................................................................4  
D. EC REGULATIONS AND DECISIONS ...............................................................................................6  
1. EEC Regulation No. 2658/87....................................................................................................6  
2. EC Regulation No. 535/1994 ....................................................................................................6  
3. EC Regulation No. 3115/1994 ..................................................................................................7  
4. EC Regulation No. 1223/2002 ..................................................................................................8  
5. EC Decision 2003/97/EC......................................................................................................... ..9 
6. EC Regulation No. 1871/2003 ................................................................................................10  
7. EC Regulation No. 1789/2003 ................................................................................................10  
8. EC Regulation No. 2344/2003 ................................................................................................11  
III. PARTIES' REQUESTS FOR FINDINGS, RECOMMENDATIONS AND 
SUGGESTIONS.................................................................................................................... ..11 
A. BRAZIL ............................................................................................................................... ........11  
B. THAILAND ............................................................................................................................... ...12 
C. EUROPEAN COMMUNITIES .........................................................................................................12  
IV. ARGUMENTS OF THE PARTIES ......................................................................................12  
V. ARGUMENTS OF THE THIRD PARTIES ........................................................................13  
VI. INTERIM REVIEW...............................................................................................................13  
A. PARTIES ' ARGUMENTS ...............................................................................................................13  
B. CLERICAL AND EDITORIAL CHANGES ........................................................................................14  
C. MEASURES AT ISSUE ..................................................................................................................14  
D. PRODUCTS AT ISSUE ..................................................................................................................16  
E. SEPARATE PANEL REPORTS .......................................................................................................17  
VII. FINDINGS....................................................................................................................... ........17  
A. SUMMARY OF THE MAIN ISSUE FOR THE PANEL 'S DETERMINATION ..........................................17  
B. BACKGROUND FOR THE PANEL 'S ANALYSIS ..............................................................................18  
1. Relationship between the EC Schedule and the European Communities' 
Combined Nomenclature........................................................................................................18  WT/DS269/R 
Page ii  
 
2.
 Relationship between the European Co mmunities' Combined Nomenclature and 
the Harmonized System.......................................................................................................... 19 
C. THE PANEL 'S TERMS OF REFERENCE ..........................................................................................19  
1. Defining the scope of the Panel's terms of reference ...........................................................19  
2. Measures ....................................................................................................................... ...........20  
(a) Measures specifically identified in the Panel requests..............................................................20  
(b) Measures not specifically identif ied in the Panel requests .......................................................20  
(i) Arguments of the parties ....................................................................................................... ....20  
(ii) Analysis by the Panel.......................................................................................................... ......22  
3. Products ....................................................................................................................... ............24  
(a) Arguments of the parties....................................................................................................... ....24  
(b) Analysis by the Panel.......................................................................................................... ......25  
4. Summary and conclusions regarding the Panel's terms of reference ................................25  
D. INTERPRETATION OF THE EFFECT OF THE MEASURES AT ISSUE .................................................25  
(i) EC Regulation No. 1223/2002 ..................................................................................................25  
(ii) EC Decision 2003/97/EC......................................................................................................... .25 
Arguments of the parties ....................................................................................................... .................. 25  
Analysis by the Panel .......................................................................................................... .................... 26  
(iii) Summary and conclusions regarding the e ffect of the measures at issue .................................27  
E. CHARACTERIZATION OF PANEL 'S TASK IN THIS CASE ................................................................27  
1. Arguments of the parties....................................................................................................... .27 
2. Comments by the World Customs Organization .................................................................28  
3. Analysis by the Panel.......................................................................................................... ....29  
F. ARTICLE II OF THE GATT 1994 ...................................................................................................30  
1. Main claims of  the parties ..................................................................................................... .30 
(a) Parties' claims ................................................................................................................ ...........30  
(b) Analysis by the Panel.......................................................................................................... ......30  
2. Treatment of the products at issue ........................................................................................32  
(a) Arguments of the parties....................................................................................................... ....32  
(b) Analysis by the Panel.......................................................................................................... ......33  
(i) Treatment in the EC Schedule................................................................................................... 33 
(ii) Treatment under the measures at issue.....................................................................................33  
(iii) Less favourable treatment...................................................................................................... ...34 
3. Burden of proof................................................................................................................ .......35  
4. Summary and conclusions regarding the interpretation of Article II of the 
GATT 1994 ...................................................................................................................... ........35  
G. INTERPRETATION OF THE EC SCHEDULE ....................................................................................36   WT/DS269/R 
 Page iii 
 
 
1. The essence of the in terpretative issue ..................................................................................36  
(a) Arguments of the parties....................................................................................................... ....36  
(b) Analysis by the Panel.......................................................................................................... ......37  
2. Time-frame for interpretation ...............................................................................................40  
(a) Arguments of the parties....................................................................................................... ....40  
(b) Analysis by the Panel.......................................................................................................... ......41  
3. Application of the Vienna Convention  to the EC Schedule .................................................43  
(a) Ordinary meaning: Article 31(1) of the Vienna Convention .....................................................43  
(i) Ordinary meaning to be determ ined of which term(s)?............................................................44  
Arguments of the parties ....................................................................................................... .................. 44  
Analysis by the Panel .......................................................................................................... .................... 44  
(ii) Ordinary meaning of the term "salted" in  heading 0210.90.20 of the EC Schedule ................44  
Arguments of the parties ....................................................................................................... .................. 44  
Analysis by the Panel .......................................................................................................... .................... 46  
(iii) Factual context for the consideration of the ordinary meaning ...............................................47  
Arguments of the parties ....................................................................................................... .................. 48  
Products covered by the concession  contained in he ading 02.10 .................................................... 48  
Flavour, texture, other physical pr operties.................................................................................... ... 48 
Desalting...................................................................................................................... .................... 49  
Preparation or preservation? ................................................................................................... ......... 51  
Analysis by the Panel .......................................................................................................... .................... 53  
Products covered by the concession  contained in he ading 02.10 .................................................... 53  
Flavour, texture, other physical pr operties.................................................................................... ... 54 
Preservation ................................................................................................................... .................. 55  
(iv) Summary and conclusions regarding the "ordinary meaning".................................................57  
(b) Context: Article 31(2) of the Vienna Convention .....................................................................57  
(i) What qualifies as "context" for the interpretation of the EC Schedule?...................................57  
(ii) The text of the EC Schedule .................................................................................................... ..58 
Other terms contained in headi ng 02.10 of the EC Schedule .................................................................. 58  
Arguments of the parties....................................................................................................... ........... 58  
Analysis by the Panel.......................................................................................................... ............. 59  
Structure of Chapter 2 of the EC Schedule...................................................................................... ........ 61  
Arguments of the parties....................................................................................................... ........... 61  
Analysis by the Panel.......................................................................................................... ............. 62  
Other parts of the EC Schedule ................................................................................................. .............. 64  
Arguments of the parties....................................................................................................... ........... 64  
Comments by the World Cu stoms Organization ............................................................................. 64  
Analysis by the Panel.......................................................................................................... ............. 65  WT/DS269/R 
Page iv  
 
Summary and conclusions rega rding the EC Schedule ........................................................................... 65  
(iii) The Harmonized  System.......................................................................................................... ..65 
Does the Harmonized System qualify as "context" for the interpretation of the EC Schedule?.............. 65  
Arguments of the parties....................................................................................................... ........... 65  
Analysis by the Panel.......................................................................................................... ............. 66  
Interpretation of the relevant as pects of the Harmonized System ........................................................... 67  
Interpretativ e appr oach ........................................................................................................ ............ 67  
Terms and structure of the HS .................................................................................................. ....... 68  
Arguments of the parties .................................................................................................................. 68  
Comments by the World Customs Organization .............................................................................. 69  
Analysis by the Panel ....................................................................................................................... 70  
Explanatory Note s to the HS .................................................................................................... ....... 72  
Arguments of the parties .................................................................................................................. 72  
Comments by the World Customs Organization .............................................................................. 75  
Analysis by the Panel ....................................................................................................................... 75  
General Rules.................................................................................................................. ................. 76  
Arguments of the parties .................................................................................................................. 76  
Comments by the World Customs Organization .............................................................................. 78  
Analysis by the Panel ....................................................................................................................... 79  
Overall appraisal of the Harmonized System..................................................................................... ..... 80  
(iv) Other WTO Members'  schedules...............................................................................................80  
Arguments of the parties ....................................................................................................... .................. 80  
Analysis by the Panel .......................................................................................................... .................... 80  
(v) Summary and conclusions regarding "context"........................................................................81  
(c) Matters to be taken into account together  with the context: Article 31(3) of the Vienna 
Convention ............................................................................................................................... .81 
(i) Subsequent practice: Article 31(3)(b) of the Vienna Convention .............................................81  
Classification prac tice sin ce 1994 ............................................................................................. .............. 81  
Whose classification practice should be considered for the interpretation of the EC 
Schedule?...................................................................................................................... ................... 81  
Arguments of the parties .................................................................................................................. 81  
Analysis by the Panel ....................................................................................................................... 82  
Classification practice: Imports into the EC ................................................................................... .8 4 
Arguments of the parties .................................................................................................................. 84  
Analysis by the Panel ....................................................................................................................... 87  
Classification practice:  Imports into and exports from Brazil and Thailand................................... 90  
Arguments of the parties .................................................................................................................. 90  
Analysis by the Panel ....................................................................................................................... 92  
Classification practice: Imports into an d exports from the US and China....................................... 92   WT/DS269/R 
 Page v 
 
 
Arguments of the parties .................................................................................................................. 92  
Analysis by the Panel ....................................................................................................................... 93  
Summary and tentative conclusions regarding "subseque nt practice"..................................................... 93  
WCO letters of ad vice .......................................................................................................... ................... 94  
Arguments of the parties....................................................................................................... ........... 94  
Qualification under Article 31(3)(b) of the Vienna Convention? .................................................... 94  
1997 letter of advice from the WCO ................................................................................................ 95  
2003 letter of advice from the WCO ................................................................................................ 95  
Analysis by the Panel.......................................................................................................... ............. 96  
Subsequent Explanatory Notes to  the Combined Nomenclature............................................................. 96  
Arguments of the parties....................................................................................................... ........... 96  
Analysis by the Panel.......................................................................................................... ............. 97  
Final conclusion regardin g "subsequent  practice"............................................................................... .... 97 
(d) Object and purpose:  Article 31(1) of the Vienna Convention ..................................................98  
(i) Arguments of the parties ....................................................................................................... ....98  
The WTO Agreement and the GATT 1994............................................................................................ .9 8 
The EC Sc hedule................................................................................................................ ..................... 99  
(ii) Comments by the World Customs Organization.....................................................................100  
(iii) Analysis by the Panel.......................................................................................................... ....101  
The WTO Agreement and the GATT 1994........................................................................................... 1 01 
The EC Sc hedule................................................................................................................ ................... 103  
(iv) Summary and conclusions regardi ng the "object and purpose".............................................104  
(e) Special meaning: Article 31(4) of the Vienna Convention .....................................................104  
(f) Preliminary conclusions under Article 31 of the Vienna Convention .....................................105  
(g) Supplementary means of interpretation: Article 32 of the Vienna Convention ......................105  
(i) Preparatory work............................................................................................................... .....105  
Arguments of the parties ....................................................................................................... ................ 105  
Analysis by the Panel .......................................................................................................... .................. 107  
(ii) Circumstances of conclusion  of the EC Schedule...................................................................107  
Substantive and temporal scope of "c ircumstances of conclusion"....................................................... 107  
Arguments of the parties....................................................................................................... ......... 107  
Analysis by the Panel.......................................................................................................... ........... 108  
EC law......................................................................................................................... .......................... 111  
EC Regulation No. 535/94....................................................................................................... ...... 111  
Arguments of the parties ................................................................................................................ 111  
Analysis by the Panel ..................................................................................................................... 115  
Dinter  and Gausepohl  judgements................................................................................................. 118  
Arguments of the parties ................................................................................................................ 118  WT/DS269/R 
Page vi  
 
Analysis by the Panel ..................................................................................................................... 123  
EC Explanat ory Notes ........................................................................................................... ........ 127  
Arguments of the parties ................................................................................................................ 127  
Analysis by the Panel ..................................................................................................................... 129  
Other Additio nal No tes......................................................................................................... ......... 130  
Arguments of the parties ................................................................................................................ 130  
Analysis by the Panel ..................................................................................................................... 130  
Classification practi ce prior to 1994.......................................................................................... ............ 130  
Arguments of the parties....................................................................................................... ......... 130  
Analysis by the Panel.......................................................................................................... ........... 131  
(iii) Summary and conclusions regardi ng "supplementary means"...............................................132  
(h) Conclusion regarding the meaning of the term "salted" in the concession contained in 
heading 02.10 of the EC Schedule..........................................................................................132  
(i) Conclusions regarding the application of Article II of the GATT 1994 in this case ..............133  
VIII.  CONCLUSIONS AND RECOMMENDATION ................................................................133  
  WT/DS269/R 
 Page vii 
 
 
LIST OF ANNEXES 
 
ANNEX A 
 
Contents Page 
Annex A Executive Summary by Thailand after the first substantive meeting 
(21 October 2004) A-1 
 
ANNEX B 
 
SUBMISSIONS BY THIRD PARTIES 
 
Contents Page 
Annex B-1 Third Party Executive Summary by China B-2 
Annex B-2 Third Party Oral Statement of the United States at the First Meeting of 
the Panel  B-5 
 
ANNEX C 
 
RESPONSES TO QUESTIONS BY THE PANEL AND OTHER PARTIES 
 
Contents Page 
Annex C-1 Responses by Brazil to Questions posed by the Panel after the First 
Substantive Meeting (14 October 2004) C-2 
Annex C-2 Responses by Brazil to Questions posed by the Panel and the European 
Communities after the Second Substantive Meeting (2 December 2004) C-31 
Annex C-3 Comments by Brazil on the European Communities' Responses to 
Questions after the Second Substantive Meeting (9 December 2004) C-44 
Annex C-4 Responses by Thailand to Questi ons posed by the Panel after the First 
Substantive Meeting (14 October 2004) C-59 
Annex C-5 Responses by Thailand to Questions posed by the Panel and the 
European Communities after the Second Substantive Meeting 
(2 December 2004) C-70 
Annex C-6 Comments by Thailand on the European Communities' Responses to 
Questions after the Second Substantive Meeting (9 December 2004) C-76 
Annex C-7 Responses by the European Co mmunities to Questions posed by the 
Panel, Brazil and Thailand after the First Substantive Meeting 
(14 October 2004) C-80 
Annex C-8 Responses by the European Co mmunities to Questions posed by the 
Panel and Brazil after the Second Su bstantive Meeting (2 December 
2004) C-106 
Annex C-9 Comments by the European Communities on the Complainants' 
Responses to Questions following the Second Substantive Meeting (9 December 2004) C-125 
Annex C-10 Responses by China to Questi ons posed by the Panel after the First 
Substantive Meeting (14 October 2004) C-130 
Annex C-11 Responses by the United States posed by the Panel after the First 
Substantive Meeting (14 October 2004) C-132 
Annex C-12 Responses by the World Customs Organization to Questions posed by C-134 WT/DS269/R 
Page viii  
 
Contents Page 
the Panel after the First Substantive Meeting (29 October 2004) 
Annex C-13 Responses by the World Customs Organization to Questions posed by 
the Panel after the Second Substantive Meeting (2 December 2004) C-142 
Annex C-14 Comments by Brazil, Thailand and the European Communities on the 
Responses by the World Customs Organization to the Questions posed by the Panel after the Second Substantive Meeting (16 December 2004) C-145 
 
 
ANNEX D 
 
Contents Page 
Annex D Chapter 2 of the Harm onized System (1992 Version) 
 D-1 
 
ANNEX E 
 
REQUESTS FOR THE ESTABLISHMENT OF A PANEL 
 
Contents Page 
Annex E-1 Request for the Establishmen t of a Panel by Brazil (WT/DS269/3) 
 E-2 
Annex E-2 Request for the Establishment of a Panel by Thailand (WT/DS286/5) 
 E-4 
 
 
ANNEX F 
 
LISTS OF EXHIBITS SUBMITTED BY THE PARTIES AND THIRD PARTIES 
 
Contents Page 
Annex F-1 List of Exhibits submitted by Brazil 
 F-2 
Annex F-2 List of Exhibits submitted by Thailand 
 F-6 
Annex F-3 List of Exhibits submitted by the European Communities 
 F-8 
Annex F-4 Exhibit submitted by the United States 
 F-10 
 
  WT/DS269/R 
 Page ix 
 
 
TABLE OF CASES CITED IN THIS REPORT 
 
Short Title Full Case Title and Citation 
Argentina – Footwear (EC)  Panel Report, Argentina – Safeguard Measur es on Imports of Footwear , WT/DS121/R, 
adopted 12 January 2000, as modified by the Appellate Body Report, WT/DS121/AB/R, 
DSR 2000:II, 575 
Argentina – Textiles and 
Apparel  Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, Textiles, 
Apparel and Other Items , WT/DS56/AB/R and Corr.1, adopted 22 April 1998, 
DSR 1998:III, 1003 
Australia – Salmon  Panel Report, Australia – Measures Affecting Importation of Salmon , WT/DS18/R and 
Corr.1, adopted 6 November 1998, as modified by the Appellate Body Report, WT/DS18/AB/R, DSR 1998:VIII, 3407 
Brazil – Desiccated 
Coconut  Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167 
Canada – Aircraft  Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft , 
WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, 1377 
Canada – Dairy  Appellate Body Report, Canada – Measures Affecting the Importation of Milk and the 
Exportation of Dairy Products , WT/DS103/AB/R, WT/DS113/AB/R and Corr.1, 
adopted 27 October 1999, DSR 1999:V, 2057 
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 
EC – Bananas III  Appellate Body Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas , WT/DS27/AB/R, adopted 25 September 1997, 
DSR 1997:II, 591 
EC – Computer Equipment  Appellate Body Report, European Communities – Customs Classification of Certain 
Computer Equipment , WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R, adopted 
22 June 1998, DSR 1998:V, 1851 
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti-Dumping Duties on Malleable 
Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R, adopted 18 August 2003 
India – Patents (US)  Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural 
Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9 
India – Quantitative 
Restrictions  Appellate Body Report, India – Quantitative Restrictions on Imports of Agricultural, 
Textile and Industrial Products , WT/DS90/AB/R, adopted 22 September 1999, 
DSR 1999:IV, 1763 
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, 97  
Turkey – Textiles  Panel Report, Turkey – Restrictions on Imports  of Textile and Clothing Products , 
WT/DS34/R, adopted 19 November 1999, as modified by the Appellate Body Report, 
WT/DS34/AB/R, DSR 1999:VI, 2363 
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 
US – Gambling Panel Report, United States – Measures Affecting the Cross-Border Supply of Gambling 
and Betting Services .WT/DS285/R, circulated 10 November 2004 
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and Conventional 
Gasoline , WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3 
US – Shrimp  Appellate Body Report, United States – Import Prohibition of Certain Shrimp and 
Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, 2755 
US – Superfund GATT Panel Report, United States – Taxes on Petroleum and Certain Imported 
Substances , adopted 17 June 1987, BISD 34S/136 
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 and Corr.1, adopted 23 May 1997, 
DSR 1997:I, 323 
 
 WT/DS269/R 
Page x  
 
LIST OF ABBREVIATIONS 
 
 BTI Binding Tariff Information  
BTN Brussels Tariff Nomenclature 
 CCCN Customs Cooperation Council Nomenclature  CN European Communities' Combined Nomenclature 
 
DSB Dispute Settlement Body  DSU Understanding on the Rules and Procedures Governing the 
Settlement of Disputes 
 
EC European Communities  EC Decision 2003/97/EC  Commission Decision 2003/97/EC of 31 January 2003  EC Regulation No. 535/94 Commission Regulation (EC) No. 535/1994 
 
EC Regulation No. 3115/94 Commission Regulation (EC) No. 3115/1994  EC Regulation No. 1223/2002 Commission Regulation (EC) No. 1223/2002  
EC Regulation No. 1871/2003 Commission Regulation (EC) No. 1871/2003 
 EC Regulation No. 1789/2003 Commission Regulation (EC) No. 1789/2003  EC Regulation No. 2344/2003 Commission Regulation (EC) No. 2344/2003  
ECJ European Court of Justice 
 EC Schedule EC Schedule LXXX  EEC Regulation No. 2658/87 Counc il Regulation (EEC) No. 2658/87 
 
HS Harmonized Commodity Description and Coding System  General Rules General Rules for the interpretation of the HS 
 GN Geneva Nomenclature 
 
OJ Official Journal of the European Communities  WCO World Customs Organization  
  WT/DS269/R 
 Page 1 
 
 
I. INTRODUCTION 
1.1 On 11 October 2002, Brazil requested consultati ons with the European Communities pursuant 
to Article 4 of the Understanding on the Rules a nd Procedures Governing the Settlement of Disputes 
(DSU) and Article XXII of the General Agre ement on Tariffs and Trade 1994 (GATT 1994) 
(WT/DS269/1).  The request concerned an EC Co mmission Regulation that Brazil alleged provided a 
new description of the products at issue under th e EC's Combined Nomenclature (CN) Code 
0207.14.10 namely, EC Commission Regulation No. 1223/2002 (EC Regulation No. 1223/2002), which Brazil describe in its request for consultations  as "frozen, boneless cuts of poultry impregnated 
with salt in all parts, with a sa lt content by weight of 1.2%". 
1.2 Consultations were held betw een Brazil and the European Communities on 5 December 2002 
and 19 March 2003 but did not lead to a resolution of  the dispute.  As a result, in a communication 
dated 19 September 2003
1, Brazil requested the establishment of a panel.  Accordingly, the Dispute 
Settlement Body (DSB) at its meeting of 7 Novemb er 2003 established the Panel with standard terms 
of reference.  
1.3 On 25 March 2003, Thailand requested cons ultations with the European Communities 
pursuant to Article 4 of the DSU and Article XXII of the GATT 1994 (WT/DS286/1) regarding the 
"customs reclassification set out in the EC Regula tion No. 1223/2002 of 8 July 2002".  Thailand states 
in its request for consultations that "frozen boneless chicken cuts impregnated with salt in all parts, 
with a salt content by weight of 1.2% to 1.9% are reclassified as frozen boneless chicken cuts under 
code 0207.14.10 of the EC's combined nomencl ature (CN)" under EC Regulation No. 1223/2002. 
1.4 Consultations were held between Thailand and the European Communities on 21 May 2003 
but did not lead to a resolution of the dispute.  As a result, in a communication dated 27 October 
20032, Thailand requested the establishment of a panel.  Accordingly, at its meeting of 21 November 
2003, the DSB established the Panel with standard terms of reference.  At that meeting, it was agreed 
that, as provided for in Article 9.1 of the DSU in respect of multiple complainants, the Panel 
established on 7 November 2003 to examine the comp laint by Brazil would also examine Thailand's 
complaint (WT/DSB/M/158).  
1.5 The terms of reference for the Panel are, therefore, the following: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by Brazil in document WT/DS269/3 and Thailand in document WT/DS286/5, the matter referred to the DSB by Brazil and Thailand in those documents, and to make 
such findings as will assist the DSB in ma king the recommendations or in giving the 
rulings provided for in those agreements." 
1.6 On 17 June 2004, Brazil and Thailand requested  the Director-General to determine the 
composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU.  That paragraph provides: 
"If there is no agreement on the panelists within 20 days after the date of the 
establishment of a panel, at the request of  either party, the Director-General, in 
consultation with the Chairman of the DSB and the Chairman of the relevant Council 
or Committee, shall determine the com position of the panel by appointing the 
panelists whom the Director-General consid ers most appropriate in accordance with 
any relevant special or additional rules or  procedures of the covered agreement or 
covered agreements which are at issue in th e dispute, after consulting with the parties 
to the dispute.  The Chairman of th e DSB shall inform the Members of the 
                                                     
 
1 WT/DS269/3 contained in Annex E. 
2 WT/DS286/5 contained in Annex E. WT/DS269/R 
Page 2  
 
composition of the panel thus formed no later than 10 days after the date the 
Chairman receives such a request." 
1.7 Accordingly, on 28 June 2004, the Director-General composed the Panel as follows: 
Chairman: Mr Hugh McPhail 
 
 Members: Ms Elizabeth Chelliah 
   Mr Manzoor Ahmad  1.8 Brazil (in respect of Thailand's complaint), China,   Thailand (in respect of Brazil's complaint) 
and the United States reserved their third-party rights to participate in the Panel's proceedings.  Chile 
and Colombia withdrew as third parties prior to the Panel's first substantive meeting with the parties. 
1.9 The Panel held the first substantive meeting with the parties on 28 and 29 September 2004. 
The session with the third parties took place on 29 Se ptember 2004.  The Panel's second substantive 
meeting with the parties was held on 17 and 18 November 2004.  
1.10 On 23 December 2004, the Panel issued the Descriptive Part of its Panel Report.  
II. FACTUAL ASPECTS 
2.1 This dispute concerns the question of whethe r a number of EC measures pertaining to the 
classification of certain salted chicken cuts result in  treatment for those chicken cuts that is less 
favourable than that provided for in EC Schedule L XXX (the EC Schedule) in violation of Article II 
of the GATT 1994
3. 
A. EC SCHEDULE LXXX  
2.2 EC Schedule LXXX was the subject of negotia tions during the Uruguay Round between 1986 
and 1994.  The nomenclature used in the EC Sc hedule followed the 1992 version of the Harmonized 
Commodity Description and Coding System (HS) .  The European Communities currently respects 
Schedule CXL, which is identical to Schedule LXXX in all respects that are relevant to this case. 
2.3 Reproduced below are the two concessions (tar iff lines 0207.41.10 and 02 10.90.20) contained 
in the EC Schedule to which referen ce has been made in this dispute: 
 0207  Meat and edible offal, of the poultry of heading No. 0105,  
   fresh, chilled or frozen:   0207.41  -- Of fowls of the species Gallus domesticus : 
 
   --- Cuts: 
  0207.41.10 ---- Boneless  
_______________ 
 
 
                                                     
 
3 The specific measures in question are dealt with in paragraph 7.16 et seq .  WT/DS269/R 
 Page 3 
 
 
 02.10  Meat and edible meat offal, sa lted, in brine, dried or smoked;   
   edible flours and meals of meat or meat offal:   0210.90  - Other, including edible flours and meals of meat or meat offal:  
   - -  M e a t :  
  0210.90.20 --- Other  2.4 Products falling under the tariff line 0207.41.10 ar e subject to a bound specific duty rate of 
1024 ECU/T or 102.4€/100kg/net.  In  addition, those products may be subject to a special safeguard 
mechanism provided for in Article 5 of the Agre ement on Agriculture.  Products falling under the 
tariff line 0210.90.20 are subject to a final bound duty rate of 15.4 per cent. 
B. 
THE EUROPEAN COMMUNITIES ' COMBINED NOMENCLATURE  
2.5 The European Communities' CN was establis hed by a Council Regulation, namely EEC 
Council Regulation No. 2658/87 of 23 July  1987 (EEC Regulation No. 2658/87).4  Pursuant to Article 
1(2) of that Regulation, the CN comprises:  (a) the HS nomenclature;  (b) EC subdivisions to that nomenclature, referred to as "CN subheadings";  an d (c) preliminary provisions, additional section or 
chapter notes and footnotes relating to CN subheadings .  Therefore, each subheading in the CN has an 
eight-digit code number with the first six digits representing the corresponding digits in the HS and 
the last two digits identifying CN subheadings.  Addi tionally, a ninth digit is reserved for the use of 
national statistical subdivisions and a tenth and eleven th digit for an EC integrated tariff, known as the 
"Taric".  The CN consists of 21 sections, covering 99  chapters.  The CN is contained in Annex I of 
EEC Regulation No. 2658/87. 
2.6 EEC Regulation No. 2658/87 bestows certain powers to adopt measures in respect of the CN.  
In particular, pursuant to Article 9, the EC Commission has power to adopt measures, inter alia , 
relating to: 
 – the classification of goods; 
  – explanatory notes;   – amendments to the CN to take account of ch anges in requirements relating to statistics 
or to commercial policy;  
  – amendments to the CN and adjustment s to duties in accordance with decisions 
adopted by the EC Council or the EC Commission; 
 
 – amendments to the CN intended to adapt it to take account of technological or 
commercial developments or aimed at the alignment or clarification of texts; 
  – amendments to the CN resulting from changes to the HS nomenclature; and, 
  – questions relating to the application, f unctioning and management of the HS to be 
discussed within the Customs Cooperation Council [now the World Customs 
Organization (WCO)], as well as their implementation by the EC. 
 
                                                     
 
4 OJ L 256, 7.9.1987, p.1. WT/DS269/R 
Page 4  
 
2.7 The CN is supplemented by EC Council Regulation No. 2913/1992 establishing the 
Community Customs Code
5, which is, in turn, supplemented by EC Commission Regulation 
No. 2454/1993 laying down provisions for th e implementation of EC Council Regulation 
No. 2913/1992.6  Article 12 of the Community Customs Code establishes the possibility for economic 
operators to request "binding tariff information" (BTI) from the EC member States' customs 
authorities.  
2.8 The European Communities is a customs union.  It has a common customs tariff between EC 
member States and third countries.  The EC member  State administrations are responsible for all 
operations relating to the implementation on a day-to -day basis of the CN.  Economic operators can 
challenge classification decisions in the courts of member States.  Where such challenges take place, 
the courts of member States can, and in specific ci rcumstances set out in the EC Treaty, are obliged, 
to refer the matter to the European Court of Justice (ECJ).  
C. HARMONIZED SYSTEM  
2.9 The Harmonized Commodity Description and Coding System, generally referred to as the 
"Harmonized System" or simply the "HS", is a multipurpose international product nomenclature 
developed by the World Customs Organization (WCO ).  It comprises about 5,000 commodity groups, 
each identified by a 6-digit code, arranged in a le gal and logical structure and is supported by well-
defined rules to achieve uniform classification.  Th e system is used by more than 190 countries and 
economies as a basis for their customs tariffs and fo r the collection of international trade statistics.7  
The HS is governed by the International Conve ntion on the Harmonized Commodity Description and 
Coding System (the HS Convention). 
2.10 The HS originates from the "Geneva Nomenclatu re" (GN), which came into existence on 1 
July 1937 in the form of the 1937 Draft Customs No menclature of the League of Nations.  The GN 
was replaced in 1959 by the Brussels Convention on No menclature for the Classification of Goods in 
Customs Tariffs (BTN)8, which was subsequently renamed as  the Customs Co-operation Council 
Nomenclature in 1974 (CCCN).  The CCCN was replaced by the HS in 1988. 
2.11 The HS is administered by the HS Committee,  which was established under the auspices of 
the WCO.  The HS Committee is composed of representatives from each of the HS contracting 
parties.  The HS Committee may propose amendments to the HS and may prepare explanatory notes, 
classification opinions, or provide other advice to be  used as guidance in the interpretation of the HS.9 
2.12 The EC became a contracting party to the HS  on 22 September 1987, Brazil on 8 November 
1988 and Thailand on 16 December 1992.  The HS en tered into force for the European Communities 
on 1 January 1988, for Brazil on 1 January 1989 and for Thailand on 1 January 1993.10 
2.13 The HS has been amended three times since 1988  in order to take account of changes in 
technology or in patterns of international trade.  The first amendment occurred in 1992, the second in 
1996 and the last in 2002.  Like those of many ot her participants, the EC Schedule followed the 1992 
version of the HS, that being the version in fo rce during the final stages of the Uruguay Round 
negotiations. 
                                                      
5 OJ L 302, 19.10.1992, p.1. 
6 OJ L 253, 11.10.1993, p.1. 
7 Preamble to the HS Convention. 
8 The BTN came into force on 11 September 1959, following the adoption on 1 July 1955 of a Protocol 
of Amendment establishing a revised version of the Nomenclature. 
9 Articles 6 and 7 of the HS Convention. 
10 Position regarding Contracting Parties (on 30 June 2003) International Convention on the HS, 
Document NG0087E1 of 6 October 2003.  WT/DS269/R 
 Page 5 
 
 
2.14 Article 1 of the HS Convention states that th e HS "means the Nomenclature comprising the 
headings and subheadings and their related numeric al codes, the Section, Chapter and Subheading 
Notes and the General Rules for the interpretation of  the Harmonized System, set out in the Annex to 
this Convention."  The HS Convention contains si x General Rules for the interpretation of the HS 
(General Rules). 
2.15 The main obligations of contracting parties to the HS Convention are set out in Article 3 of 
the Convention, which reads as follows: 
"1. Subject to the exceptions enumerated in Article 4: 
(a) Each Contracting Party undertakes, except as provided in 
subparagraph (c) of this para graph, that from the date on 
which this Convention enters into force in respect of it, its 
Customs tariff and statistical nomenclatures shall be in conformity with the Harmonized System.  It thus undertakes that, in respect of its Customs tariff and statistical nomenclatures: 
 (i) it shall use all the headings and subheadings of the 
Harmonized System without addition or modification, together with their related numerical codes; 
 (ii) it shall apply the General Rules for the interpretation 
of the Harmonized System and all the Section, Chapter and Subheading Notes, and shall not modify the scope of the 
Sections, Chapters, headings  or subheadings of the 
Harmonized System; and 
 (iii) it shall follow the numerical sequence of the 
Harmonized System; 
(b) Each Contracting Party shall also make publicly available its 
import and export trade statistics in conformity with the six-
digit codes of the Harmonized System, or, on the initiative of the Contracting Party, beyond that level, to the extent that publication is not precluded for exceptional reasons such as commercial confidentiality or national security; 
(c) Nothing in this Article sha ll require a Contracting Party to 
use the subheadings of the Harmonized System in its 
Customs tariff nomenclature provided that it meets the obligations at (a) (i), (a) (ii) and (a) (iii) above in a combined 
tariff/statistical nomenclature. 
2. In complying with the undertakings at  paragraph 1 (a) of this Article, each 
Contracting Party may make such textual adaptations as may be necessary to 
give effect to the Harmonized System in its domestic law. 
3. Nothing in this Article shall preven t a Contracting Party from establishing, in 
its Customs tariff or statistical nomenclatures, subdivisions classifying goods beyond the level of the Harmonized System, provided that any such subdivision is added and coded at a level beyond that of the six-digit 
numerical code set out in the Annex to this Convention." WT/DS269/R 
Page 6  
 
2.16 Chapter 2 of the HS, being the Chapter primarily at issue in this dispute, is contained in 
Annex D. 
D. 
EC REGULATIONS AND DECISIONS  
2.17 The measures identified in Brazil's and Th ailand's respective Panel requests are EC 
Regulation No. 1223/2002 and EC Commission Decision 2003/97/EC of 31 January 2003 (EC 
Decision 2003/97/EC).  Relevant excerpts of these two measures, as well as of several other EC 
Regulations to which reference was made subsequen tly in the course of these proceedings, are set out 
below.  The various EC legal instruments are dealt with in chronological order. 
1. EEC Regulation No. 2658/8711 
2.18 As noted in paragraph 2.5 above, the C ouncil Regulation, EEC Regulation No. 2658/87 
established a goods nomenclature called the CN, whic h is contained in Annex I of EEC Regulation 
No. 2658/87. 
2.19 Article 12 of EEC Regulation No. 2658/87 provides that: 
"The Commission shall adopt each year by means of a Regulation a complete version 
of the combined nomenclature together with the corresponding autonomous 
conventional rates of duty of the Common Cu stoms Tariff, as it results from measures 
adopted by the Council or by the Commission.  The said Regulation shall be published not later than 31 October in the Official Journal of the European 
Communities  and it shall apply from 1 January of the following year." 
2.20 Section I of the CN contain rules for the interpretation of the CN.  Rule 1 states that: 
"The titles of sections, chapters and sub-ch apters are provided for ease of reference 
only; for legal purposes, classification shall be determined according to the terms of 
the headings and any relative section or chapter notes ..." 
2. EC Regulation No. 535/1994
12 
2.21 An EC Commission Regulation, Commission Regulation (EC) No. 535/1994 (EC Regulation 
No. 535/94), was adopted on 9 March 1994 and was publis hed in the Official Journal of the European 
Communities on 11 March 1994.  EC Regulation No. 535/94, which amended Annex I to EEC 
Regulation No. 2658/87 containing the CN, introduced  Additional Note 8 to Chapter 2 of the CN.  
2.22 The preamble to EC Regulation No. 535/94 states that: 
"Whereas, to ensure uniform application of the Combined Nomenclature, provisions 
should be laid down for the classification of  salted meat and edible meat offal falling 
within CN code heading 0210, in order to  distinguish them from fresh, chilled or 
frozen meat and edible meat offal; whereas  a total salt content of 1,2% or more by 
weight appears an appropriate criterion fo r distinguishing between these two types of 
products; 
                                                      
11 Council Regulation (EEC) No. 2658/87 of 23 July 1987, on the tariff and statistical nomenclature 
and on the Common Customs Tariff, published in the Official Journal of the European Communities No. L 256, 
7 September 1987, p. 1. 
12 Commission Regulation (EC) No. 535/94, of 9 March 1994, amending Annex I to Council 
Regulation (EEC) No. 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, 
published in the Official Journal of the European Communities No. L 68, 11 March 1994, p.15.  WT/DS269/R 
 Page 7 
 
 
Whereas an additional note to this effect should be inserted in Chapter 2 of the 
Combined Nomenclature; whereas Annex I to Regulation (EEC) No. 2658/87 should 
therefore be amended ...;"  
2.23 Article 1 of EC Regulation No. 535/94 provides that: 
"The following additional note shall be inserted in Chapter 2 of the Combined 
Nomenclature annexed to Re gulation (EEC) No 2658/87: 
For the purposes of heading No 0210, the term 'salted' means meat or 
edible meat offal which has been deeply and homogenously 
impregnated with salt in all parts, having a total salt content no less 
than 1.2% by weight." 
2.24 EC Regulation No 535/94 entered into force on 1 April 1994. 
3. EC Regulation No. 3115/199413 
2.25 An EC Commission Regulation, Commission Regulation (EC) No. 3115/1994 (EC 
Regulation No. 3115/94), was adopted on 20 D ecember 1994 and was published in the Official 
Journal of the European Communities on 31 Dece mber 1994.  EC Regulation No. 3115/94 amended 
Annexes I and II to EEC Regulation No. 2658/87 in order to take into account, inter alia , changes 
relating to statistics or commercial policy resulting from the Uruguay Round. 
2.26 More precisely, the preamble to EC Regulation No. 3115/94 states that: 
"Whereas it is necessary to amend the comb ined nomenclature to take account of: 
– changes in requirements relating to statistics or commercial policy, in 
particular by virtue of Council Decisi on bringing into force simultaneously 
the acts implementing the results of the Uruguay Round of multilateral trade 
negotiations and Council Regulation c oncerning certain measures resulting 
from the conclusion of negotiations  under Article XXIV:6 and other 
measures necessary for simplification purposes;  
– the need to align or clarify texts; 
Whereas Article 12 of Regulation (EEC) No. 2658/87 provides for the Commission to 
adopt each year by means of a regulation, to apply from 1 January of the following year, a complete version of the combined nomenclature together with the corresponding autonomous and conventional rates of duty of the Common Customs Tariff, as it results from measures adopted by the Council or by the Commission; 
..." 
2.27 Article 3 of EC Regulation No. 3115/94 provides that: 
"This Regulation shall enter into force on 1 January 1995. This Regulation shall be binding in its entir ety and directly applicable in all Member 
States. ... 
                                                     
 
13 Commission Regulation (EC) No. 3115/94 of 20 December 1994, amending Annexes I and II to 
Council Regulation (EEC) No. 2658/87 on the tariff and statistical nomenclature and on the common customs 
tariff, published in the Official Journal of the European Communities No. L 345, 31 December 1994. WT/DS269/R 
Page 8  
 
Incorporated in Annex I to this Regu lation are amendments resulting from the 
adoption of the following measures: 
... – Commission Regulation (EC) No. 535/94 of 9 March 1994 (OJ No L 68, 
11.3.1994, p. 15); 
..." 
2.28 Additional Note 8 to Chapter 2 of the CN, introduced through EC Regulation No. 535/94 and 
subsequently incorporated into the CN for 1995 in EC Regulation No. 3115/94, was renumbered in 
1995 as Additional Note 7 to Chapter 2 of the CN.
14 
4. EC Regulation No. 1223/200215 
2.29 An EC Commission Regulation, EC Regulation No. 1223/2002, was adopted on 8 July 2002 
and was published in the Official Journal of the European Communities on 9 July 2002.  EC Regulation No. 1223/2002 concerns the classification of certain goods in the CN.  Recital (1) of EC 
Regulation No. 1223/2002 states that: 
"In order to ensure the uniform applicati on of the Combined Nomenclature annexed 
to Regulation (EEC) No. 2658/87, it is necessary to adopt measures concerning the 
classification of the goods referred to in the Annex to this Regulation". 
2.30 Article 1 of EC Regulation No. 1223/2002 provides that: 
"The goods described in column 1 of the table set out in the Annex are classified 
within the Combined Nomenclature under the CN code indicated in column 2 of that 
table." 
                                                     
 
14 See Recital (2) of Commission Regulation (EC) No. 1871/2003 of 23 October 2003, amending 
Annex I to Council Regulation (EEC) No. 2658/87 on the tariff and statistical nomenclature and on the 
Common Customs Tariff, published in the Official Journal of the European Communities No. L 275, 25 October 
2003, p. 5. 
15 Commission Regulation (EC) No. 1223/2002 of 8 July 2002, concerning the classification of certain 
goods in the Combined Nomenclature, published in the Official Journal of the European Communities No. 
L 179, 9 July 2002, p. 8.  WT/DS269/R 
 Page 9 
 
 
2.31 The Annex to EC Regulation No. 1223/2002 is reproduced below:  
ANNEX 
 
Description of Goods CN Code Reasons 
(1) (2) (3) 
(1) Boneless chicken cuts, frozen 
and impregnated with salt in all 
parts. They have a salt content by weight of 1.2% to 1.9%. 
 
The product is deep-frozen and has to be stored at a temperature of 
lower than - 18°C to ensure a shelf-
life of at least one year.  
0207 14 10 Classification is determined by the 
provisions of the General Rules 1 and 
6 for the interpretation of the Combined Nomenclature and by the 
wording of CN codes 0207, 0207 14 
and 0207 14 10.  
The product is chicken meat frozen for 
long-term conservation.  The addition of salt does not alter the character of 
the product as frozen meat of heading 
0207. 
 Source: Annex to EC Regulation No. 1223/2002.  
5. EC Decision 2003/97/EC 16 
2.32 On 12 February 2003, the EC Commission published EC Decision 2003/97/EC concerning 
the validity of certain BTIs issued by the Federal Republic of Germany.  More particularly, Article 1 
of the Decision, which is addressed to the Federal Republic of Germany17, requires the withdrawal of 
66 BTI notices issued by the German customs authority classifying products under heading 02.10 of the CN.
18 
2.33 Recital (3) of EC Decision 2003/97/EC state that, after publication of EC Regulation 
No. 1223/2002, all BTIs previously issued by EC member States classifying the products covered by 
that Regulation with a salt content between 1.2% and 1.9% as "salted meat" under heading 02.10 of 
the CN ceased to be valid.19  Recital (5) explains that, based on EC Regulation No. 1223/2002, some 
member States later issued BTIs classifying frozen products of the same kind as those covered by that 
Regulation, but with a salt content of between 1.9% and 3% by weight of salt, under heading 02.10 of 
the CN.20  Recital (7) indicates that products consisti ng of boneless chicken cuts, which have been 
frozen for long-term conservation and have a salt cont ent of 1.9% to 3%, are similar to the products 
covered by EC Regulation No. 1223/2002.  It also st ates that the addition of salt in such quantities is 
not such as to alter the products' character as frozen poultry meat of heading 02.07 of the CN.  Recital 
(8) states that, in order to safeguard equality be tween operators, which woul d be endangered if like 
cases were not treated alike and to ensure unifo rm application of the CN, the Federal Republic 
Germany is required to withdraw the BTIs issued  on frozen poultry meat containing between 1.9% 
and 3% by weight of salt.21 
                                                      
16 Commission Decision 2003/97/EC of 31 January 2003, concerning the validity of certain binding 
tariff information (BTI) issued by the Federal Republic of Germany, published in the Official Journal of the European Communities No. L 36, 12 February 2003, p. 40. 
17 Article 2 of Commission Decision.   
18 Article 1 and Annex. 
19 Recital (3). 
20 Recital (5). 
21 Recital (8). WT/DS269/R 
Page 10  
 
6. EC Regulation No. 1871/2003
22 
2.34 An EC Commission Regulation, Commission Regulation (EC) No. 1871/2003 
(EC Regulation No. 1871/2003), was adopted on 23 Oc tober 2003 and was published in the Official 
Journal of the European Communities on 25 Oc tober 2003.  EC Regula tion No. 1871/2003 amended 
Annex I to EEC Regulation No. 2658/87.  In pa rticular, EC Regulation No. 1871/2003 amended 
Additional Note 7 to Chapter 2 of the CN. 
2.35 Recital (3) of EC Regulation No. 1871/2003 states that: 
"[T]he classification in Chapter 2 of the Combined Nomenclature depends essentially 
on the process employed to ensure long-term preservation of a given product.  The General Harmonized System explanatory note to Chapter 2 describes the structure of 
that chapter.  Chapter 2 covers uncooked meat  and meat offal which are fresh or 
chilled or have undergone one of the various processes required for long-term preservation, i.e., uncooked meat which are frozen or salted, in brine, dried or 
smoked."
23 
2.36 Recital (4) notes that: 
"According to the said explanatory note, fresh meat remains classified as such even if 
it has been packed with salt as a temporar y preserving agent during transport.  This 
reasoning applies equally to frozen meat, ot herwise any meat to which salt has been 
added would be considered as salted meat  of heading 0210.  For the purposes of 
heading 0210, salting must be sufficien t to ensure long-term preservation for 
purposes other than transportation.  In this  connection, it should be noted that the 
other processes listed in heading 0210, i.e. in brine, drying or smoking, are intended 
to ensure long-term preservation rather th an to act as a temporary preserving agent for 
transport."24 
2.37 Recital (5) states that the EC Commission considered it "appropriate to clarify and confirm 
further that salting, within the meaning of head ing 0210, is a process used to ensure long-term 
preservation".25  It did so by means of Article 1 of EC Regulation No. 1871/2003, which provides that 
Additional Note 7 to Chapter 2 of the Combined  Nomenclature is replaced by the following: 
"For the purposes of heading 0210, the terms 'meat and edible meat offal, salted, in 
brine' mean meat and edible meat offal deeply and homogeneously impregnated with 
salt in all parts and having a total salt content of not less than 1.2% by weight, provided it is the salting which ensures long-term preservation." 
7. EC Regulation No. 1789/2003
26 
2.38 An EC Commission Regulation, Commission Regulation (EC) No. 1789/2003 (EC 
Regulation No. 1789/2003), was adopted on 11 Se ptember 2003 and was published in the Official 
Journal of the European Communities on 30 Oc tober 2003.  EC Regula tion No. 1789/2003 amended 
                                                      
22 Commission Regulation (EC) No. 1871/2003 of 23 October 2003, amending Annex I to Council 
Regulation (EEC) No. 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, 
published in the Official Journal of the European Communities No. L 275, 25 October 2003, p. 5. 
23 Recital (3) of EC Regulation No. 1871/2003.   
24 Recital (4) of EC Regulation No. 1871/2003. 
25 Recital (5) of EC Regulation No. 1871/2003.   
26 Commission Regulation (EC) No. 1789/2003 of 11 September 2003, amending Annex I to Council 
Regulation (EEC) No. 2658/87 on the tariff and statistical nomenclature and the Common Customs Tariff, 
published in the Official Journal of the European Communities No. L 281, 30 October 2003, p. 1.  WT/DS269/R 
 Page 11 
 
 
Annex I to EEC Regulation No. 2658/87 by replaci ng Annex I to EEC Regulation No. 2658/87 with 
the Annex to EC Regulation No. 1789/2003 (the 2004 CN). 
2.39 In Annex I of EC Regulation No. 1789/2003, Add itional Note 7 to Chapter 2 stated that:  
"For the purposes of heading 0210, the terms 'meat and edible meat offal, salted, in 
brine' mean meat and edible meat offal deeply and homogeneously impregnated with 
salt in all parts, having a total salt cont ent of not less than 1.2% by weight." 
8. EC Regulation No. 2344/200327 
2.40 An EC Commission Regulation, Commission Regulation (EC) No. 2344/2003 (EC 
Regulation No. 2344/2003), was adopted on 30 D ecember 2003 and was published in the Official 
Journal of the European Communities on 31 D ecember 2003.  EC Regulation No. 2344/2003 
amended Annex I to EC Regulation No. 2658/87 .  EC Regulation No. 2344/2003 was adopted to 
ensure that the CN to be applied as of 1 Janua ry 2004 as contained in EC Regulation No. 1789/2003 
included, inter alia , the amendment made by EC Regulation No. 1871/2003.28 
2.41 Thus, the Annex to EC Regulation No. 2344/ 2003 amended the Anne x to EC Regulation 
No. 1789/2003, with respect to Additional No te 7 of Chapter 2 of the CN, as follows: 
"1. Additional note 7 of Chapter 2 of the Combined Nomenclature shall be 
replaced by the following: 
7. For the purposes of heading 0210 , the terms 'meat and edible 
meat offal, salted or in brine' mean  meat and edible meat offal deeply 
and homogeneously impre gnated with salt in all parts and having a 
total salt content by weight of 1.2% or more, provided that it is the 
salting which ensures the long-term preservation." 
III. PARTIES' REQUESTS FOR FINDINGS, RECOMMENDATIONS AND 
SUGGESTIONS 
A. BRAZIL29 
3.1 Brazil requests the Panel to: 
(a) find that EC Regulation No. 1223/2002 and EC  Decision 2003/97/EC are inconsistent 
with Articles II:1(a) and II:1(b) of the GATT 1994; 
(b) recommend that the DSB request the Eur opean Communities to bring these measures 
into conformity with Articles II:1(a) and II:1(b) of the GATT 1994; 
(c) use its right to make suggestions on ways  in which the European Communities could 
implement the Panel's recommendations as pr ovided in Article 19.1 of the DSU; and 
(d) suggest that, in light of the nullification a nd impairment of the benefits accruing to 
Brazil under the EC Schedule in respect of its  commerce of salted chicken meat to the 
                                                      
27 Commission Regulation (EC) No. 2344/2003 of 30 December 2003, amending Annex I to Council 
Regulation (EEC) No. 2658/87 on the tariff and statistical nomenclature and the Common Customs Tariff, published in the Official  Journal of the European Communities No. L 346, 31 December 2003, p. 38. 
28 Recital (3) of EC Regulation No. 2344/2003.   
29 Brazil's first written submission, para. 192. WT/DS269/R 
Page 12  
 
European Communities, that the Europ ean Communities immediately repeal EC 
Regulation No. 1223/2002 and EC Decision 2003/97/EC. 
B. 
THAILAND30 
3.2 Thailand requests the Panel to: 
(a) find that the European Communities is acting inconsistently with its obligations under 
Article II:1(b) and II:1(a) of the GATT 1994 by according "less favourable treatment" 
to the chicken product in question than th at provided for in the EC Schedule;  and 
(b) recommend, in accordance with Article 19.1 of the DSU, that the DSB request the 
European Communities to bring the measure at issue into conformity with the GATT 
1994. 
C. EUROPEAN COMMUNITIES31 
3.3 The European Communities requests the Panel to: 
(a) reject Brazil's and Thailand's claims;  
(b) find that the treatment accorded by the European Communities to frozen boneless 
chicken cuts with a salt content between  1.2% and 3% by EC Regulation No. 
1223/2002 and EC Decision 2003/97/EC respec ts the bindings contained in the EC 
Schedule; and 
(c) find that the treatment accorded by the European Communities to frozen boneless 
chicken cuts with a salt content between  1.2% and 3% by EC Regulation No. 
1223/2002 and EC Decision 2003/97/EC involves no infringement of Articles II:1(a) and (b) of the GATT 1994. 
IV. ARGUMENTS OF THE PARTIES 
4.1 Paragraph 12 of the Panel's Working Proce dures, which were adopted on 7 July 2004, 
provides for the submission by the parties of executive summaries of the facts and arguments 
presented to the Panel in writing and orally.  These su mmaries were to be used to assist the Panel in 
drafting the factual and arguments section of the Panel's Report. 
4.2 In a letter dated 7 October 2004,  the European Communities requested the Panel "to make a 
simple reference in the descriptive part to the facts and arguments as summarized by the Panel in the 
findings section of its report", thereby dispensing w ith the need for the parties to prepare executive 
summaries.  Brazil accepted the request, noting at th e same time that this should not constitute a 
precedent for future cases.  Thailand was of the view  that there was no need to change the Working 
Procedures at that stage of the Panel's proceedings. 
4.3 Taking into account the parties' views on the matter, on 13 October 2004, the Panel informed 
the parties that it had decided the following: 
(a) Submission of executive summaries by the par ties would be on a voluntary basis;  
                                                     
 
30 Thailand's first written submission, paras. 157-158. 
31 EC's first written submission, para. 211.  WT/DS269/R 
 Page 13 
 
 
(b) As advised to the parties at the first s ubstantive meeting (28  29 September 2004), the 
Panel's intention was to reproduce the ex ecutive summaries of the parties and third 
parties in the descriptive part of its Report.   This would remain the Panel's intention 
in case such submissions were received.  In the alternative case, a reference would be made in the descriptive part to the facts and arguments as summarized by the Panel in 
the findings section of its Report;  and 
(c) As also indicated at the first substantive mee ting, parties' and third parties' replies to 
the Panel's questions as well as to each ot her's questions would be attached to the 
Report in an annex. 
4.4 Thailand is the only party to this dispute that  submitted an executive summary.  Therefore, in 
accordance with the Panel's decision set out in  the preceding paragraph, Thailand's executive 
summary has been reproduced in Annex A.  The argu ments made by all the parties are reflected in the 
findings section of the Panel's Report.  
4.5 The parties' written answers to questions posed  by the Panel and by each other have been 
reproduced in Annex C.  Written answers by the WCO to questions posed by the Panel have also been 
reproduced in Annex C.  In addition, the parties'  comments on the parties' and the WCO's replies to 
the Panel's questions following the second substantive meeting have been reproduced in Annex C.  
The parties' exhibits have been listed in Annex F but have not been  reproduced in this Report due to 
the confidential nature of a number of those exhibits. 
V. ARGUMENTS OF THE THIRD PARTIES 
5.1 The arguments of China, as contained in its executive summary, have been reproduced in 
Annex B.  On 7 October 2004, the United States request ed that the US third party oral statement made 
at the first substantive meeting be considered  as the US executive summary contemplated by 
paragraph 12 of the Working Procedures.  The US oral  statement has, therefore, also been reproduced 
in Annex B. 
5.2 Written answers by the third parties to questions  posed by the Panel have been reproduced in 
Annex C. 
VI. INTERIM REVIEW 
6.1 The Panel's Interim Report was issued to the par ties on 17 February 2005.  Pursuant to Article 
15.2 of the DSU and paragraph 16 of the Panel's Wo rking Procedures, the parties were given until 3 
March 2005 to provide their comments on the In terim Report.  The European Communities' 
comments were provided on 24 February 2005 and Brazil's and Thailand's comments were provided 
on 3 March 2005.  None of the parties requested a mee ting to review part(s) of the Panel's Report.  On 
10 March 2005, the parties submitted further written comments on the comments that had been provided by the parties on 24 February and 3 March. 
6.2 Pursuant to Article 15.3 of the DSU, this sec tion of the Panel Report contains the Panel's 
response to the comments made by the parties in relation to the Interim Report. 
A. 
PARTIES ' ARGUMENTS  
6.3 All of the parties to this dispute requested certain changes to the representation of their 
respective arguments in the findings section of the Interim Report.  The Panel accepted these changes 
to the extent that they did not result in repetition of  arguments that had already been represented in the 
Report and to the extent that they were consiste nt with what the parties stated in the various 
submissions they made to the Panel dur ing the course of the Panel proceedings. WT/DS269/R 
Page 14  
 
6.4 Brazil also suggested an addition to paragraph 3.1(d) of the Interim Report, which contains 
the parties' requests for findings, recommendations a nd suggestions.  The Panel declined to include 
the suggested change because, in the Panel's view, the proposed text contains argumentation that does 
not add to what is already contained in paragr aph 3.1(d) and the summary of Brazil's arguments 
elsewhere in the Report. 
B. 
CLERICAL AND EDITORIAL CHANGES  
6.5 Brazil suggested certain changes to correct clerical  errors contained in the Interim Report.  All 
these suggested changes were accepte d by the Panel.  The Panel also accepted Brazil's suggestion to 
reproduce in Annex C the parties' comments on the pa rties' written answers to questions posed by the 
Panel following the second substantiv e meeting and the parties' comme nts on the WCO's replies to the 
Panel's questions following the second substantive meeting.  The Panel also made some additional 
minor clerical and editorial changes. 
C. MEASURES AT ISSUE  
6.6 In its comments on the Interim Report, Brazil confirmed the arguments it had made 
previously to the effect that EC Regulation No. 1871/2003 and EC Regulation No. 2344/2003 should 
be included in the Panel's terms of reference.  Brazil also put forward additional arguments and 
requested the Panel to reconsider its analysis a nd conclusion to exclude those measures from its terms 
of reference in light of its additional arguments.  In its comments on Brazil's comments, the European 
Communities submitted that the Panel should not accep t Brazil's additional arguments because they 
amounted to an attempt to relitigate legal and factual issues, which the Panel had already decided.  In 
the Panel's view, the additional arguments do not alter the conclusion we reached in our Interim 
Report that EC Regulation No. 1871/2003 and EC Re gulation No. 2344/2003 are outside our terms of 
reference for the reasons explained below. 
6.7 First, Brazil submits that it could not reasona bly be expected to have anticipated the 
enactment of EC Regulation No. 1871/2003 an d EC Regulation No. 2344/2003 at the time it 
submitted its request for establishment of a panel.  Brazil explains that, since the measures the Panel 
considered to be within its terms of reference were not amendments to the CN, when drafting its Panel 
request, there was no reason for Brazil to anticipat e that additional measures related to the ones 
identified – that is, EC Regulation No. 1871/20 03 and EC Regulation No. 2344/2003 – would be 
enacted.  Brazil argues that, therefore, it cannot be expected to have included a reference to those 
measures in its request for establishment of a panel. 
6.8 The Panel notes that a fundamental rationale for the requirements contained in Article 6.2 of 
the DSU concerning the contents of a request for establishment of a panel32 is to ensure that a 
responding Member is provided adequate notice of th e measure(s) being challenged so that it is able 
to properly defend itself.  In US – Carbon Steel , the Appelate Body stated that: 
"... the terms of reference, and the request  for the establishment of a panel on which 
they are based, serve the  due process   objective of notifying the parties and third 
parties of the nature of a complainant's case.33  When faced with an issue relating to 
the scope of its terms of reference, a panel must scrutinize carefully the request for 
                                                      
32 Article 6.2 of the DSU provides that: "The request for the establishment of a panel shall be made in 
writing.  It shall indicate whether consultations were he ld, identify the specific meas ures at issue and provide a 
brief summary of the legal basis of the complaint sufficient to present the problem clearly.  In case the applicant 
requests the establishment of a panel with other than standa rd terms of reference, the written request shall include 
the proposed text of special terms of reference." 
33 (original footnote)  Appellate Body Report, Brazil – Dessicated Coconut , at 186.  See also, Appellate 
Body Report, EC – Bananas III , para. 142.  WT/DS269/R 
 Page 15 
 
 
establishment of a panel 'to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.'"
3435 (emphasis in original) 
6.9 In light of the foregoing, even if Brazil coul d not reasonably have anticipated the enactment 
of EC Regulation No. 1871/2003 and EC Regulation No . 2344/2003 at the time it made its request for 
establishment of a panel, we do not consider that the due process objective underlying Article 6.2 of 
the DSU can be compromised in this case.  Brazil its elf indicated in its interim review comments that 
it was mindful of the due process concern associated  with adjustment of pleadings during dispute 
settlement proceedings.  As pointed out in the Pane l's Interim Report, complaining parties in other 
WTO cases have chosen to use broad, generic a nd/or inclusive language in their requests for 
establishment of a panel so as to cover measures that they may not have necessarily expected or 
anticipated at the time they filed their request fo r establishment of a panel while at the same time 
meeting their due process obligations under Article 6.2 of the DSU.  Brazil did not do so in this case. 
6.10 Secondly, Brazil refers to the Appellate Body's decision in Chile – Price Band  System  and 
suggests that, on the basis of that decision, EC  Regulation No. 1871/2003 and EC Regulation No. 
2344/2003 should be included in the Panel's terms of reference because they clarify measures 
specifically identified in its request for establis hment of a panel.  The European Communities 
responds that the purpose of EC Regulation No. 1871 /2003 was to clarify heading 02.10 and not EC 
Regulation No. 1223/2002. 
6.11 The Appellate Body's comments in Chile – Price Band System  upon which Brazil relies are 
set out below: 
"... We understand the Amendment as having cl arified the legislation that established 
Chile's price band system.  However, the Amendment does not change the price band 
system into a measure different  from the price band system that was in force before 
the Amendment.  Rather, as we have pointed out, Article 2 of Law No. 19.772 simply amends  Article 12 of Law No. 18.525 by  adding   a final paragraph to that provision. 
... 
36 
We understand that, like the safeguard measure in the  Argentina – Footwear (EC)  
case, Chile's price band system remains essen tially the same after the enactment of 
Law 19.772.  The measure is not, in its essence, any different because of that 
Amendment.  Therefore, we conclude that  the measure before us in this appeal 
includes Law 19.772, because that law ame nds Chile's price band system without 
 changing its essence ." 37 (emphasis in original) 
6.12 We note that the above comments were made in the context of a request for establishment of a 
panel that expressly referred to amendments to the law in question in that case – namely, Law 
No. 18.525.  Indeed, the Appellate Body stated that: 
"[W]e note that Argentina's request for th e establishment of a panel refers to the 
measure in issue as the price band sy stem 'under Law 18.525, as amended by Law 
18.591 and subsequently by Law 19.546,  as well as the regulations and 
complementary provisions  and/or amendments '  (emphasis added).  Such 
 amendments ,  in our view, include Law 19.772.  The broad scope of the Panel 
request suggests that Argentina intended th e request to cover the measure even as 
                                                      
34 (original footnote)  Appellate Body Report, EC – Bananas III , para. 142. 
35 Appellate Body Report, US – Carbon Steel , para. 126. 
36 Appellate Body Report, Chile – Price Band System , para. 137. 
37 Appellate Body Report, Chile – Price Band System , para. 139. WT/DS269/R 
Page 16  
 
amended.  Thus, we conclude that Law 19.772 falls within the Panel's terms of 
reference."
38 (emphasis in original) 
6.13 As pointed out in our Interim Report, Brazil's request for establishment of a panel contrasts 
with the one at issue in Chile – Price Band System .  Unlike the request for establishment of a panel in 
the latter case, the identification of the measures at  issue in Brazil's request for establishment of a 
panel is specific and narrow and does not appear to anticipate inclusion of any measures in addition to 
those specifically identified, namely EC Regulation No. 1223/2002 and EC Decision 2003/97/EC.  Therefore, we do not consider that the Appellate Body's comments in Chile – Price Band System  that 
have been relied upon by Brazil are apposite for this case. 
6.14 Thirdly, Brazil argues that the Panel's decision not to include EC Regulation No. 1871/2003 
and EC Regulation No. 2344/2003 in its terms of reference may not secure a positive solution to the 
dispute and that the Panel's findings may not be su fficiently precise to allow for prompt compliance.  
In this regard, the Panel notes that Article 3.7 of  the DSU states that "[t]he aim of the dispute 
settlement mechanism is to secure a positive solution to a dispute".  We understand that the term 
"dispute" in Article 3.7 is the dispute as defined by  the request for establishment of a panel.  As we 
have previously noted, Brazil's request for establis hment of a panel only identifies EC Regulation No. 
1223/2002 and EC Decision 2003/97/EC.  In accordan ce with Article 3.7 of the DSU, our Report 
seeks to secure a positive solution to Brazil's claims regarding those measures identified in Brazil's 
request for establishment of a panel and we cons ider that our recommendations regarding those 
measures are precise enough so as to ensure prompt compliance. 
6.15 The Panel recalls that, in its Interim Report,  the Panel concluded that EC Regulation No. 
1871/2003 and EC Regulation No. 2344/2003 are outsid e our terms of reference.  We confirm that 
conclusion here.  We recall that, nevertheless, in our  Interim Report, we stated that EC Regulation No. 
1871/2003 and EC Regulation No. 2344/2003 provide d useful context for the consideration of 
measures that are within our terms of refere nce, namely EC Regulation No. 1223/2002 and EC 
Decision 2003/97/EC.  In fact, we used the former  measures in our assessment of whether the latter 
measures are in violation of Article II of the GATT 1994.  We reaffirm the conclusion we reached in 
the Interim Report that the subs tantive effect of EC Regulati on No. 1223/2002 and EC Decision 
2003/97/EC is the same as the substantive effect of EC Regulation No. 1871/2003 and EC Regulation 
No. 2344/2003 as far as frozen boneless chicken cuts that have been impregnated with salt are 
concerned. 
D. 
PRODUCTS AT ISSUE  
6.16 Brazil contests the Panel's conclusion in the In terim Report that the products at issue are 
frozen boneless chicken cuts impregnated with salt, w ith a salt content of 1.2% – 3%.  Brazil points, 
inter alia , to its description of the products at issue in its request for establishment of a panel and 
argues that the products at issue are, rather, frozen boneless chicken cuts impregnated with salt, with a 
salt content of 1.2% or more .  The European Communities submits that the measures at issue concern 
chicken with a salt content of 1.2% – 3%. 
6.17 The Panel notes at the outset that the products at issue in this dispute are the products within 
the Panel's terms of reference.  In other words, they are the specific products affected by the findings 
and recommendations made by us in this Report.  We recall that Article 6.2 of the DSU sets out the 
requirements for requests for establishment of a panel, which, in turn, form the basis of a panel's terms 
of reference.  Pursuant to Article 6.2, a complain ant is required to identify the specific "measures at 
issue".  Article 6.2 does not stipulate that a complain ant must describe in its request for establishment 
of a panel the products that are within a panel's term s of reference in a particular dispute.  Brazil's and 
Thailand's requests for establishment of a panel clearly identify certain measures – namely, EC 
                                                      
38 Appellate Body Report, Chile – Price Band System , para. 135.  WT/DS269/R 
 Page 17 
 
 
Regulation No. 1223/2002 and EC Decision 2003/97/E C – and it is these measures that define our 
terms of reference for this dispute. 
6.18 Even though Brazil may have referred to frozen boneless chicken cuts impregnated with salt, 
with a salt content of 1.2% or more , in its request for establishment of a panel, as noted, our terms of 
reference are defined by EC Regulation No. 12 23/2002 and EC Decision 2003/97/EC.  Since these 
measures only relate to frozen bone less chicken cuts impregnated w ith salt, with a salt content of 
1.2% – 3%, the Panel concludes that those are th e products within our terms of reference for the 
purposes of this case. 
E. SEPARATE PANEL REPORTS  
6.19 By letter to the Panel dated 5 July 2004, th e European Communities requested the Panel to 
issue separate Reports with respect to the complain ts made respectively by Brazil and by Thailand.  
However, in light of the fact that a single Pa nel had been established to examine both Brazil's and 
Thailand's complaints in this dispute, the fact that  Brazil's and Thailand's claims are identical and the 
fact that both complainants endorsed their r espective arguments during the course of these 
proceedings39, at the conclusion of the second substan tive meeting with the parties, the Panel 
indicated its intention to issue a single Panel Report in relation to the complaints made by both Brazil 
and by Thailand, unless advised otherwise.  None of the parties indicated their objection at that stage 
of the Panel's proceedings.  Accordingly, on 17 Fe bruary 2005, the Panel issued a single Interim 
Report to the parties. 
6.20 In its comments on the Interim Report, the Europ ean Communities made reference to its letter 
to the Panel dated 5 July 2004 and stated that it woul d be obliged if separate Reports could be issued.  
In their comments on the European Communities' co mments on the Interim Report, neither Brazil nor 
Thailand objected to this request but, noting that the complainants' endorsed each other's arguments 
during these proceedings, they submit that the se parate Reports should contain the complete 
arguments made by both complainants. 
6.21 The Panel acknowledges that the European Comm unities reserved its right to separate Panel 
Reports under Article 9.2 of the DSU in July 2004, shortly after this Panel was composed.  Further, 
the complainants have not objected to the European  Communities' request.  Therefore, the Panel has 
decided to issue two separate Panel reports – one  for the complaint made by Brazil against the 
European Communities and the other for the comp laint made by Thailand against the European 
Communities.  However, as noted previously, Brazil and Thailand endorsed their respective 
arguments in these proceedings.  Further, at th e European Communities' request, the parties' 
arguments are contained in the findings section of the Panel's Report.  Accordingly, the Panel notes 
that the only material difference between the sep arate Panel reports in respect of Brazil's and 
Thailand's complaints will be the cover page and th e conclusions; the descriptive part and the findings 
will be common to both Reports. 
VII. FINDINGS 
A. SUMMARY OF THE MAIN ISSUE FOR THE PANEL 'S DETERMINATION  
7.1 The fundamental issue for the Panel's determ ination in this case is whether certain EC 
measures result in treatment for certain products that is less favourable than that provided for in EC 
Schedule LXXX (the EC Schedule) in violation of Ar ticle II:1(a) and/or Article II:1(b) of the GATT 
1994.  More particularly, the Panel is required to  determine whether those measures result in the 
                                                      
39 Brazil endorsed the arguments put forward by Tha iland in Brazil's second written submission, para. 
95 and Thailand endorsed the arguments put forward by  Brazil in Thailand's oral statement at the first 
substantive meeting, para. 55. WT/DS269/R 
Page 18  
 
imposition of duties and cond itions on such products that are in excess of those provided for in the EC 
Schedule. 
7.2 The EC Schedule provides for a tariff of 102.4€/100kg/net for products covered by 
subheading 0207.14.10 and allows the European Communities to use special safeguard measures 
under Article 5 of the Agreement on Agriculture in  respect of such products.  The EC Schedule 
provides for a tariff of 15.4% ad valorem  for products covered by subheading 0210.90.20 and there is 
no reservation for the use of special safeguard  measures under Article 5 of the Agreement on 
Agriculture in respect of such products. 
7.3 Brazil and Thailand (the complainants) submit that less favourable treatment has been 
accorded to frozen boneless salted chicken cuts in viol ation of Article II:1(a) and Article II:1(b) of the 
GATT 1994 because, through the relevant EC meas ures, the European Communities changed its 
customs classification so that those products, whic h had previously been classified under subheading 
0210.90.20 and were subject to an ad valorem  tariff of 15.4%, are now classified under subheading 
0207.14.10 and are subject to a tariff of 102.4€/100kg/net as well as being potentially subject to special safeguard measures pursuant to Artic le 5 of the Agreement on Agriculture. 
B. 
BACKGROUND FOR THE PANEL 'S ANALYSIS  
7.4 By way of background for the Panel's analysis , the Panel sets out its understanding of the 
interrelationship between the EC Schedule, the European Communities' Combined Nomenclature 
(CN) and the Harmonized Commodity Description and Coding System (HS)40. 
1. Relationship between the EC Schedule and the European Communities' Combined 
Nomenclature 
7.5 The schedules of WTO Members are currently annexed to the GATT 1994.  Through these 
schedules, Members commit to bind tariff levels on va rious goods.  Reductions in tariff levels have 
occurred at the multilateral level since 1947 throug h successive rounds of tariff negotiations.  EC 
Schedule LXXX was the subject of negotiations during the Uruguay Round between 1986 and 1994. 
7.6 Article II:7 of the GATT 1994 provides that the schedules annexed to the GATT 1994 are 
made an integral part of the GATT 1994.  The Appellate Body in  EC – Computer Equipment  clarified 
that Article II:7 means that the concessions provided for in such schedules are part of the terms of the 
treaty, namely the GATT 1994.41  Article II:2 of the WTO Agreement provides that the Agreements 
contained in the Annexes to the WTO Agreement,  which includes the GATT 1994, are integral parts 
of the WTO Agreement.  Therefore, on the basis of Article II:7 of the GATT 1994 and Article II:2 of 
the WTO Agreement, concessions contained in th e EC Schedule are treaty terms of the GATT 1994 
and the WTO Agreement. 
7.7 Article XVI:4 of the WTO Agreement provides that "[e]ach Member shall ensure the 
conformity of its laws, regulations and administra tive procedures with its obligations as provided in 
the annexed Agreements ".  Article XVI:4 means that, for the pur poses of this dispute, the European 
Communities is obliged to ensure that its domestic  legislation is consistent with the relevant 
concessions contained in the EC Schedule. 
7.8 The CN contains the European Communities' domestic tariff nomenclature, which, as 
explained in further detail below, was establishe d through the enactment of EEC Regulation No. 
2658/87.  The Panel will need to determine whether the treatment of the products at issue in the CN is 
less favourable than that provided for in th e EC Schedule for the purposes of assessing the 
                                                      
40 The HS is described below in para. 7.9 et seq . 
41 Appellate Body Report, EC – Computer Equipment , para. 84.  WT/DS269/R 
 Page 19 
 
 
complainants' claim that the Europ ean Communities has violated Article II:1(a) and/or Article II:1(b) 
of the GATT 1994. 
2. Relationship between the European Comm unities' Combined Nomenclature and the 
Harmonized System 
7.9 The Harmonized Commodity Description and Coding System, generally referred to as the 
"Harmonized System" or simply the "HS", is a multipurpose international product nomenclature 
developed by the World Customs Organization (WCO ).  It comprises about 5,000 commodity groups, 
each identified by a 6-digit code, arranged in a le gal and logical structure and is supported by well-
defined rules to achieve uniform classification.  Th e system is used by more than 190 countries and 
economies as a basis for their customs tariffs and for the collection of international trade statistics.  
The HS is governed by the International Conve ntion on the Harmonized Commodity Description and 
Coding System (the HS Convention). 
7.10 Article 3.1 of the HS Convention requires each cont racting party to ensure that its laws are in 
conformity with the HS.  In particular, HS contracting parties are required to use the headings and subheadings of the HS without addition or modification, together with the HS numerical codes
42 and 
to apply the General Rules for the interpretation of the HS (General Rules) and all the section, chapter 
and subheading notes.43  Moreover, HS contracting parties are required to ensure that they follow the 
numerical sequence of the HS in their respective domestic tariff nomenclatures.44 
7.11 The European Communities is a signatory to th e HS Convention.  Therefore, pursuant to 
Article 3.1 of the HS Convention, the European Co mmunities is obliged to u se the HS headings and 
subheadings at the 6-digit level.  The European  Communities does, however, have flexibility to add 
headings and subheadings beyond the 6-digit level. 
7.12 The European Communities implemented its ob ligations under the HS Convention through 
the enactment of EEC Regulation No. 2658/87, wh ich, as mentioned above in paragraph 7.8, 
established the CN.  Article 1 of EEC Regulation No . 2658/87 states that the CN comprises: (a) the 
HS nomenclature; (b) EC subdivisions/headings to that nomenclature; and (c) preliminary provisions, 
additional sections or chapter notes and footnotes re lating to subheadings.  In addition to the HS 
headings at the 6-digit level, the CN contains at least an additional two digits for each heading, which 
identify CN subheadings.  The six General Rules cont ained in the HS form the basis of the general 
rules for the interpretation of the CN. 
C. THE PANEL 'S TERMS OF REFERENCE  
1. Defining the scope of the Panel's terms of reference 
7.13 The Panel commences its substantive analysis with a discussion of its terms of reference.  
Such a discussion is necessary given that the parti es have advanced conflicting arguments regarding 
the scope of the Panel's terms of reference. 
7.14 The Panel recalls that its terms of reference are based upon Article 7 of the DSU and are set 
out in WT/DS269/4/Rev.1 and WT/DS286/6/Rev.1, whic h provide in relevant part that the Panel's 
terms of reference are: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by Brazil in document WT/DS269/3 and Thailand in document WT/DS286/5, the 
                                                      
42 Article 3.1(a)(i) of the HS Convention. 
43 Article 3.1(a)(ii) of the HS Convention. 
44 Article 3.1(a)(iii) of the HS Convention. WT/DS269/R 
Page 20  
 
matter referred to the DSB by Brazil and Thailand in those documents, and to make 
such findings as will assist the DSB in ma king the recommendations or in giving the 
rulings provided for in those agreements." 
7.15 Therefore, the Panel's terms of reference are defined by the requests for establishment of a 
panel filed respectively by Brazil and Thailand (P anel requests).  These requests are contained in 
Annex E to this Report. 
2. Measures 
7.16 The first issue for our determination is what are the specific measures within our terms of 
reference?  We will commence our analysis with a consideration of the measures that have been 
specifically identified in the complainants' Panel re quests.  We will subsequently consider a number 
of measures that have not been specifically identif ied in the complainants' Panel requests but which 
have been referred to by the parties in the course of the Panel proceedings. 
(a) Measures specifically identi fied in the Panel requests 
7.17 Brazil's Panel request states in relevant part that: 
"The specific measures at issue are Commission Regulation (EC) No. 1223/2002, 
published in the Official Journal of the EC on 9 July 2002, concerning the 
classification of certain goods in the Comb ined Nomenclature (CN), and the EC 
Commission Decision, published in the Official Journal of the EC on 12 February 
2003, concerning the validity of certain binding tariff information (BTI) issued by the 
Federal Republic of Germany."
45 
7.18 Thailand's Panel request stat es in relevant part that: 
"The measure at issue is the classification of frozen boneless salted chicken cuts as 
provided in the EC Regulation No.1223/2002 of 8 July 2002 ('Regulation 1223/2002') 
published in the Official Journal of the EC on 9 July 2002 concerning the 
classification of certain goods in the Combin ed Nomenclature (CN) and elaborated in 
the EC Commission Decision ('Decision') of 31 January 2003 published in the 
Official Journal of the EC on 12 February  2003 concerning the validity of certain 
binding tariff information ('BTI') issued  by the Federal Republic of Germany."46 
7.19 Brazil's and Thailand's Panel requests specifically refer to two measures, namely, EC 
Regulation No. 1223/2002 and EC Decision 2003/97/ EC.  The parties do not dispute that these 
measures are within the Panel's terms of reference. 
(b) Measures not specifically identified in the Panel requests 
(i) Arguments of the parties 
7.20 Brazil  argues that EC Regulation No. 1871/2 003 and EC Regulation No. 2344/2003 are 
within the Panel's terms of reference even though they were not mentioned in Brazil's Panel request 
and that, in order to secure a positive solution to the dispute, as is required by Article 3.7 of the DSU, 
they should also be brought into conformity if found to be in violation of the WTO Agreement.47  
Brazil notes that EC Regulation No. 1871/2003 and EC Regulation No. 2344/2003 were issued after 
                                                      
45 WT/DS269/3. 
46 WT/DS286/5. 
47 Brazil's reply to Panel question No. 1.  WT/DS269/R 
 Page 21 
 
 
the establishment of the Panel and that, therefore, these Regulations could not have been mentioned in 
Brazil's Panel request.48 
7.21 According to Brazil, EC Regulation No. 18 71/2003 and EC Regulation No. 2344/2003 are 
measures that are "closely related" or "subsidiary" to  the ones specifically identified in Brazil's Panel 
request so much so that they may be considered  as "part of the application" of those measures.49  In 
particular, Brazil argues that EC Regulation No . 1871/2003 and EC Regulation No. 2344/2003 were 
enacted as a result of changes in classification and tariff treatment brought about by EC Regulation 
No. 1223/2002 and EC Decision 2003/97/EC.  Brazil submits that, since EC Regulation No. 1223/2002 and EC Decision 2003/97/EC modified or provided a new interpretation of the scope and 
definition of products falling under subheading 0207.14.10 of the CN so as to include "other salted 
meat" of subheading 0210.90.20, the European Comm unities was required to adjust the then existing 
definition of "salted meat" of heading 02.10 to avoid conflict with the new interpretation of the 
definition and scope of subheadi ng 0207.14.10.  Brazil submits that  the European Communities did 
this through EC Regulation No. 1871/ 2003 and EC Regulation No. 2344/2003.
50 
7.22 Thailand  submits that the European Communities fi rst introduced the principle of long-term 
conservation for the classification of boneless chic ken cuts under subheadi ng 0207.14.10 in EC 
Regulation No. 1223/2002.  According to Thaila nd, EC Decision 2003/97/EC maintained the same 
reasoning provided in EC Regulation No. 1223/2002,  namely that, because th e boneless chicken cuts 
"have been frozen for the purposes of long-term  preservation", they must be classified under 
subheading 0207.14.10.51  Thailand submits that the European Communities' position that the long-
term preservation of "chicken cuts" must determ ine its classification was confirmed and further 
expanded to "all meats" under heading 02.10 by EC Regulation No. 1871/2003, which was then 
incorporated into the CN by EC Regulation No. 23 44/2003.  Thailand submits that, therefore, even 
though EC Regulation No. 1871/2003 and EC Re gulation No. 2344/2003 were not specifically 
mentioned in Thailand's Panel request, they must , nevertheless, be considered as part of the 
challenged measures before the Panel.  According to Thailand, EC Regulati on No. 1871/2003 and EC 
Regulation No. 2344/2003 are based on the same principle as that set out in EC Regulation No. 
1223/2002 and EC Decision 2003/97/EC, namely, that  the criterion of long-term preservation must 
determine the classification of the product.  Thailand cites Argentina – Footwear (EC) to submit that 
the measures are "closely related."  Thailand cons iders that, if the Panel finds that the customs 
classification of frozen boneless chicken cuts as pr ovided in EC Regulation No. 1223/2002 and EC 
Decision 2003/97/EC is inconsistent with the Eur opean Communities' obligations under Article II of 
the GATT 1994, then it should also find that EC Regulation No. 1871/2002 and EC Regulation No. 
2344/2003 – which are based on the same criterion of  long-term preservation for the classification of 
a product – should also be held  to be WTO-inconsistent.52 
7.23 The European Communities  responds that neither EC Regulation No. 1871/2003 nor EC 
Regulation No. 2344/2003 are within the sc ope of the Panel's terms of reference.53  The European 
Communities submits that the complainants' Pane l requests only identified two EC measures – 
namely, EC Regulation No. 1223/2002 and EC Decisi on 2003/97/EC – and that these requests delimit 
the Panel's jurisdiction.54  The European Communities argues that  there are no substantive grounds to 
justify widening the scope of the Panel's terms of re ference, particularly given that the issue of the 
Panel's terms of reference was not addressed in th e complainants' first written submissions, nor in 
                                                      
48 Brazil's reply to Panel question No. 11. 
49 Brazil's oral statement at the seco nd substantive meeting, para. 5. 
50 Brazil's reply to Panel question No. 1. 
51 Thailand's second written submission, para. 6.  
52 Thailand's second written submission, paras. 9-11. 
53 EC's reply to Panel question No. 20(a). 
54 EC's second written submission, para. 15. WT/DS269/R 
Page 22  
 
their oral statements to the Panel during the first substantive meeting.
55  The European Communities 
submits that the inclusion of acts other th an EC Regulation No. 1223/2002 and EC Decision 
2003/97/EC in the Panel's terms of reference woul d infringe the European Communities' due process 
rights as well as those of third parties.56 
7.24 In response, Brazil  submits that EC Regulation No . 1871/2003 and EC Regulation No. 
2344/2003 are so closely related to the measures refe rred to in the complainants' Panel requests that 
the European Communities must be found to have received adequate notice of them.  Brazil also 
submits that the content and relevance of EC  Regulation No. 1871/2003 and EC Regulation No. 
2344/2003 were highlighted by Brazil throughout these proceedings.57 
(ii) Analysis by the Panel 
7.25 As noted above in paragraph 7.19, the complain ants' Panel requests specifically refer to two 
measures – namely, EC Regulation No. 1223/200 2 and EC Decision 2003/97/EC.  However, the 
complainants also discussed a number of other me asures in their first written submissions, including 
EC Regulation No. 1871/2003 and EC Regulation No. 2344/2002.  In an effort to determine what 
significance should be attached, if any, to those me asures, the Panel requested  the complainants to 
indicate whether or not they were seeking to specifically challenge those measures in these 
proceedings.58  Both complainants confirmed that that w as their wish and that, further, those measures 
fall within the Panel's terms of reference.  The European Communities disput es that those measures 
are within our terms of reference. 
7.26 The Panel notes that, in Chile – Price Band System , the Appellate Body stated that: 
"[G]enerally speaking, the demands of due process are such that a complaining party 
should not have to adjust its pleadings th roughout dispute settlement proceedings in 
order to deal with a disputed measure as a 'moving target'.  If the terms of reference in 
a dispute are broad enough to include amendments to a measure – as they are in this case – and if it is necessary to consider an  amendment in order to secure a positive 
solution to the dispute – as it is here – then  it is appropriate to consider the measure 
 as amended  in coming to a decision in a dispute."
59 
7.27 In other words, the Appellate Body stated that , in order for a panel's terms of reference to 
include amendments to measures included in a pa nel request, the following conditions must be met: 
(a) the terms of reference must be broad enough; and (b) such in clusion is necessary to secure a 
positive solution to the dispute.  While these conditions  were enunciated by the Appellate Body with 
respect to amendments  to the measure that had been specifi cally identified in the relevant panel 
request, we do not see any reason why they should not be equally applicable to measures that do not 
constitute amendments.  Indeed, it is the Panel's view that, if an amendment may be included in a 
panel's terms of reference only if the terms of th e panel request are broad enough, it would seem that 
the case for application of this requirement is as strong, if not stronger, in respect of measures for 
                                                      
55 EC's second written submission, para. 19. 
56 EC's second written submission, pa ra. 20; EC's oral statement at the second substantive meeting, 
para. 4. 
57 In particular, Brazil points to its first written submission, paras. 36, 37, 38, 39, 99, 126, 135, 142 and 
143; Brazil's oral statement at the first substantive meeting, para. 37; Brazil's replies to Panel question Nos. 1 and 11; Brazil's second written subm ission, paras. 52-59 and 87-90. 
58 Panel question No. 11. 
59 Appellate Body Report, Chile – Price Band System , para. 144.  WT/DS269/R 
 Page 23 
 
 
which a relationship with measures specifically iden tified in the panel request is less apparent, as in 
the present case, in order to preserve a responding Member's due process rights.60 
7.28 Turning now to the question of whether the co mplainants' Panel requests are broad enough to 
include EC Regulation No. 1871/2003 and EC Regu lation No. 2344/2003, we refer to the specific 
terms of Brazil's and Thailand's Pa nel requests, relevant excerpts of which are set out above in 
paragraphs 7.17 and 7.18 respectively.  We consider  that those terms contrast with the terms of the 
panel requests at issue in a number of previous case s where the various panels included in their terms 
of reference measures that had not been specifically  identified in the panel requests.  The relevant 
aspects of the panel requests in each of those cases were broadly worded, referring to the challenged 
measures in generic terms and/ or using inclusive language.61  In comparison, Brazil's and Thailand's 
Panel requests are much more narrowly drafted and, in our view, are not broad enough to include EC 
Regulation No. 1871/2003 and EC Regulation No. 2344/2003. 
7.29 In particular, the identification of the measures at issue in Brazil's Panel request is specific 
and narrow and does not appear to anticipate in clusion of any measures in addition to those 
specifically identified, namely EC Regula tion No. 1223/2002 and EC Decision 2003/97/EC. 
7.30 Thailand's Panel request also specifically refers to those measures.  However, in contrast to 
Brazil's Panel request, Thailand's reference to those measures is made in the context of its challenge 
of a measure, which Thailand labels as "the classifi cation of frozen boneless salted chicken cuts".  The 
Panel posed a question to Thailand in an attempt to  clarify what Thailand meant by the reference to 
"classification" in its Panel request.62  Even though Thailand did not respond to the Panel's question, 
the Panel considers that the reference to "the cl assification of frozen boneless salted chicken cuts" in 
Thailand's Panel request could only be interpreted in one of thr ee ways.  Firstly, it could be 
interpreted as meaning that Tha iland was seeking to challenge th e European Communities' tariff 
classification in respect of a particular shipment or particular shipments of frozen boneless salted chicken cuts.  Secondly, it could be interpreted as meaning that Thailand was seeking to challenge the 
European Communities' customs classification practi ce with regard to frozen  boneless salted chicken 
cuts in general whether under EC Regulation No. 1223/2002 and EC Decision 2003/97/EC or under 
any other measure that might affect such prac tice, such as EC Regulation No. 1871/2003 and EC 
Regulation No. 2344/2003.  Thirdly, the reference to "classificati on" in Thailand's Panel request could 
                                                     
 
60 Such rights were affirmed by the Appellate Body in US – Carbon Steel .  Appellate Body Report, US 
– Carbon Steel , para. 126. 
61 For example, in Chile – Price Band System , the panel request referred to "Law 18.525, as amended 
by Law 18.591 and subsequently by Law 19.546, as well as the regulations and complementary provisions 
and/or amendments " (emphasis added).  In EC – Bananas III , the panel request referred to "a regime  for the 
importation, sale and distribution of bananas established by Regulation 404/93 (OJ L47 of 25 February 1993, 
p. 1), and subsequent EC legislation, regulations and administrative measures , including  those reflecting the 
provisions of the Framework Agreement on bananas, which implement, supplement and amend that regime" (emphasis added).  The panel request in Argentina – Textiles and Apparel referred to "1. Resolutions 304/95, 
305/95, 103/96, 299/96, Decree 998/95 and other measures which impose specific duties on various textile, 
apparel or footwear  items in excess of the bound rate of 35 per cent ad valorem provided in Argentina'a [ sic] 
Schedule LXIV; 2. Decrees 2277/94, 389/95 and other measures which impose a statistical tax of 3 per cent ad 
valorem , effective March 1995, on imports from all sources other than MERCOSUR countries;  and 3. 
Resolutions 622/95, 26/96, 850/96 and other measures which were imposed without proper notification and a 
meaningful opportunity to comment  being afforded and which impose unnece ssary obstacles to trade, such as 
requirements relating to affidavits of product components ma ndating that, among other things, footwear, textile 
and apparel items be labelled with the number of the corresponding affidavit of product components assigned by 
the Undersecretariat of Foreign Trade" (emphasis added).  In Australia – Salmon , the panel request referred to 
"the Australian Government's measures  prohibiting the importation of fresh, chilled or frozen salmon ... include  
Quarantine Proclamation 86A, dated 19 February 1975, and any amendments or modifications to it " (emphasis 
added). 
62 Panel question No. 6. WT/DS269/R 
Page 24  
 
be interpreted as adding nothing to the specific reference to EC Regulation No. 1223/2002 and EC 
Decision 2003/97/EC. 
7.31 In our view, even if Thailand intended to challenge the European Communities' tariff 
classification in respect of a particular shipment or particular shipments of frozen boneless salted chicken cuts, this intention is not supported by the terms of Thailand's Panel re quest.  In particular, we 
note that the reference to "the classification of fro zen boneless salted chicken cuts" in Thailand's Panel 
request is immediately followed by " as provided  in the EC Regulation No. 1223/2002 ... and 
elaborated in the EC Commission Decision ("Decisi on") of 31 January 2003" (emphasis added).  In 
our view, EC Regulation No. 1223/2002 and EC Decision 2003/97/EC cannot be interpreted as 
relating to one or more specific shipme nts of frozen boneless salted chicken cuts.
63  In addition, even 
if Thailand intended to challenge the European Communities' customs classification practice with 
regard to frozen boneless salted chicken cuts in ge neral whether under EC Regulation No. 1223/2002 
and EC Decision 2003/97/EC or under any other measure  that might affect such practice, such as EC 
Regulation No. 1871/2003 and EC Regul ation No. 2344/2003, it is our view that this intention is not 
supported by the terms of Thailand's Panel request eith er.  We consider that the specific reference to 
EC Regulation No. 1223/2002 and EC Decision 2003/97/ EC following the more general reference to 
"classification" without additional language in Thai land's Panel request to indicate that any measure 
that could affect such practice was also included in the Panel's terms of reference militates against 
such an interpretation.  Therefore, in our view, th e reference to "the classification of frozen boneless 
salted chicken cuts" in Thailand's Panel request adds nothing to the specific reference to EC 
Regulation No. 1223/2002 and EC Decision 2003/97/EC. 
7.32 The Panel concludes that the terms of the co mplainants' respective Panel requests are not 
broad enough to include EC Regulation No. 1871/2003 and EC Regulation No. 2344/2003.  
Accordingly, we consider that EC Regulation No. 1871/2003 and EC Regulation No. 2344/2003 are 
outside the Panel's terms of reference.  However, in  our view, this does not mean that the content and 
effect of EC Regulation No. 1871/2003 and EC Regulation No. 2344/2003 cannot provide us with 
useful context for our consideration of the measures that are within our terms of reference. 
3. Products 
7.33 The next issue for our determination is what are the specific products within our terms of 
reference? 
(a) Arguments of the parties 
7.34 Brazil  and Thailand  argue that the products at issue – th at is, those that have been accorded 
less favourable treatment for the purposes of Article II of the GATT 1994 – are frozen boneless salted 
chicken cuts that have been deep ly and homogeneously impregnated with  salt in all parts with a total 
salt content of not less than 1.2% by weight.64 
7.35 The European Communities  submits that this dispute concerns frozen boneless chicken cuts 
to which salt has been added resulting in a salt content by weight of 1.2% – 3%.65  The European 
Communities submits that Brazil's and Thailand's Pa nel requests confirm that the complainants are 
concerned with meat having a salt content of greater than 1.2% but not more than 3%.66 
                                                      
63 We explain our interpretation of these measures in more detail below in paragraph 7.38 et seq . 
64 Brazil's reply to Panel question No. 10; Th ailand's second written submission, para. 12. 
65 EC's first written submission, para. 17. 
66 EC's first written submission, para. 18; EC's reply to Panel question No. 22.  WT/DS269/R 
 Page 25 
 
 
(b) Analysis by the Panel 
7.36 The Panel considers that, in this case, the measures within our terms of reference determine 
the products that are within our te rms of reference.  Since we ha ve concluded that  our terms of 
reference are restricted to EC Regulation No. 1223/2002 and EC Decision 2003/97/EC, it follows that 
the products covered by our terms of reference are frozen boneless chicken cuts impregnated with 
salt, with a salt content of 1.2% – 3%.67 
4. Summary and conclusions regarding the Panel's terms of reference 
7.37 The Panel concludes that the measures within our terms of reference are EC Regulation No. 
1223/2002 and EC Decision 2003/97/EC.  Hereafter,  we refer to these measures collectively as the 
"measures at issue".  The Panel al so concludes that the products incl uded in our terms of reference are 
those covered by EC Regulation No. 1223/2002 and EC Decision 2003/97/EC – namely, frozen 
boneless chicken cuts impregnated with salt, with a sa lt content of 1.2% – 3%.  Hereafter, we refer to 
these products as the "products at issue". 
D. INTERPRETATION OF THE EFFECT OF THE MEASURES AT ISSUE  
(i) EC Regulation No. 1223/2002 
7.38 The parties do not appear to dispute the content and effect of EC Regulation No. 1223/2002.  
In particular, EC Regulation No. 1223/2002 concer ns the classification of frozen boneless chicken 
cuts that have been impregnated with salt in all part s, with a salt content by weight of 1.2% – 1.9%.  
In particular, recital (3), Article 1 and the Anne x of the EC Regulation No. 1223/2002 make it clear 
that such chicken cuts are to be classifi ed under subheading 0207.14.10 of the European 
Communities' CN.68  In addition, Article 2 effectively provides that BTIs69 for products covered by 
the Regulation ceased to be valid fo llowing the expiration of  a period of three months after the entry 
into force of the Regulation. 
(ii) EC Decision 2003/97/EC 
Arguments of the parties  
7.39 Thailand  argues that EC Decision 2003/97/EC elaborates upon EC Regulation No. 
1223/2002 because the former measure  uses the same reasoning to revoke BTIs for frozen boneless 
chicken cuts with a salt content of 1.9% – 3% as th at used in the latter for the classification of frozen 
boneless chicken cuts with a salt content of 1.2% – 1.9%.  Thailand submits that, therefore, the legal 
effect of EC Decision 2003/97/EC is that frozen bon eless chicken cuts with a salt content of 1.9% –
 3% must also be classified unde r subheading 0207.14.10 of the CN.70 
                                                      
67 In this regard, we note that, in paragraph 7.47 belo w, we conclude that the measures within our terms 
of reference have the practical effect of classifying frozen boneless chicken cuts that have been deeply and homogenously impregnated with salt, with a salt content of 1.2% - 3%, under subheading 0207.14.10 of the 
European Communities' CN. 
68 Article 1 and the Annex of EC Regulation No. 1223/2002 are set out respectively in paragraphs 2.30 
and 2.31 above.  Recital (3) states that "[p]ursuant to the said general rules, the goods described in column 1 of 
the table set out in the Annex to this Regulation should be classified under the CN code indicated in column 2, by virtue of the reasons set out in column 3". 
69 BTI notices provide economic operators with binding tariff information including, inter alia , 
information regarding the classification of the goods in question: "EC Customs Classification Rules: Should Ice Cream Melt?", Michigan Journal of International Law , (1994), Vol. 15, No. 4 contained in Exhibit THA-18, 
page 1264. 
70 Thailand's second written submission, para. 6. WT/DS269/R 
Page 26  
 
7.40 The European Communities  submits that Article 1 of EC Decision 2003/97/EC limits the 
legal effect of that Decision to the revoc ation of BTIs listed in the Annex thereto.
71  According to the 
European Communities, the recitals in an EC Commission Decision, including EC Decision 
2003/97/EC, have no legal effect.  The European Comm unities submits that such recitals only provide 
the reasons for which a particular decision has been adopted.72 
Analysis by the Panel  
7.41 Thailand has submitted that the legal effect of EC Decision 2003/97/EC is to classify frozen 
boneless chicken cuts impregnated with salt, with  a salt content of 1.9% – 3%, under subheading 
0207.14.10 of the CN, in addition to frozen boneless chicken cuts impregnated with salt with a salt 
content of 1.2% – 1.9%, the latter of which are classified under subheading 0207.14.10 pursuant to 
EC Regulation No. 1223/2002.73 
7.42 The Panel notes that EC Decision 2003/97/EC contains two legally operative Articles – 
namely, Article 1 and Article 2.  These Articles provide that: 
"Article 1  
The binding tariff information notices listed in  column 1 of the table annexed issued 
by the customs authorities shown in column  2 for the tariff classification shown in 
column 3 must be withdrawn at the earliest possible date, and in any case not later than 10 days from the notification of this decision. 
Article 2 
This Decision is addressed to the Federal Republic of Germany." 
7.43 Articles 1 and 2 of EC Decision 2003/97/EC indicate to the Panel that the sole legal effect of 
the Decision is to mandate Germany to revoke 66 BT Is issued by German cu stoms authorities, which 
are referred to in the table annexed to the Deci sion.  The BTIs covered by EC Decision 2003/97/EC 
classified frozen boneless chicken cuts impregnated w ith salt, with a salt content of 1.9% - 3%, under 
heading 02.10 of the CN.
74 
7.44 The Panel notes that the recitals to EC Deci sion 2003/97/EC refer to similarities that are said 
to exist between, on the one hand, frozen boneless ch icken cuts impregnated with salt, with a salt 
content of 1.2% - 1.9%, and, on the other hand, frozen boneless chic ken cuts impregnated with salt, 
with a salt content of 1.9% - 3%.  In particular, re cital (7) states that "[p] roducts also consisting of 
boneless chicken cuts which have been frozen for l ong-term conservation and have a salt content of 
1.9% - 3% are similar to the products covered by Regulation 1223/2002.  The addition of salt in such 
quantities is not such as to alter the products' char acter as frozen poultry meat of heading 0207".  
Recital (8) goes on to state that "[i]n order to saf eguard equality between ope rators, which would be 
endangered if like cases were not treated alike, and to  ensure uniform application of the CN, the BTIs 
issued by Germany on frozen poultry meat, containing 1.9% - 3% salt, listed in the annex, must be 
withdrawn". 
7.45 The Panel understands that recitals to an EC D ecision, including the recitals to EC Decision 
2003/97/EC, have no legal effect other than to ensure that the provisions of the Decision that do have 
                                                      
71 EC's reply to Panel question No. 19(a). 
72 EC's reply to Panel question No. 19(c). 
73 Thailand's second written submission, para. 6. 
74 While it is not entirely clear from the text of EC D ecision 2003/97/EC that th e BTIs affected by that 
Decision concern frozen boneless chicken cuts impregnated with salt, with a salt content of 1.9% - 3%, the 
European Communities has indicated that that is the case: EC's first written submission, paras. 96-98.  WT/DS269/R 
 Page 27 
 
 
legal effect, are interpreted and app lied in a manner that is in keeping with the spirit of the law and to 
provide reasons for which the Decision has been adopted, as has been subm itted by the European 
Communities.75 
7.46 To the extent that all frozen boneless chicken cu ts impregnated with salt, with a salt content 
of 1.9% - 3%, are covered by the BTIs that have been revoked pursuant to that Decision, we 
understand from Articles 1 and 2 of the Decision when r ead together with the relevant recitals that, as 
a matter of practice, EC Decision 2003/97/EC prohib its classification of such products under heading 
02.10 of the CN.  We also understand that such pr oducts are, as a matter of fact, classified by the 
European Communities under subheading 0207.14.10 of the CN.76  Therefore, the Panel understands 
that, as a factual matter, as a result of EC Decision 2003/97/EC, frozen boneless chicken cuts 
impregnated with salt, with a salt content of 1.9% - 3%, will be classified under subheading 
0207.14.10 of the CN. 
(iii) Summary and conclusions regarding the effect of the measures at issue 
7.47 In summary, it is the Panel's view that the me asures at issue have the practical effect of 
classifying frozen boneless chicken cuts that have been deeply and homogenously impregnated with 
salt, with a salt content of 1.2% – 3%, under su bheading 0207.14.10 of the European Communities' 
CN.  We note that this view is confirmed by a statement made by the European Communities to the 
effect that the products covered by EC Regula tion No. 1223/2002 and EC Decision 2003/97/EC fall 
under heading 02.07 of the EC Schedule.77 
E. CHARACTERIZATION OF PANEL 'S TASK IN THIS CASE  
1. Arguments of the parties 
7.48 Brazil  and Thailand  submit that they decided to bring the present dispute to the WTO, and 
not the WCO, because they understand this to be a case of less favourable tariff treatment, within the 
meaning of Article II of the GATT 1994, and not a reclassification case per se .78  More particularly, 
Thailand submits that the issue in this dispute is not whether the products at issue fall within heading 
02.10 of the HS, which issue the WCO may be compet ent to assess.  Rather, the issue is whether the 
products at issue fall within the terms of head ing 02.10 of the EC Schedule as the European 
Communities understood the heading in 1994, a matter which Thailand submits the WCO is not 
competent to assess.  Brazil adds  that, in assessing whether the Eu ropean Communities has violated 
Article II of the GATT 1994, the Panel must examin e the EC Schedule according to the rules of treaty 
interpretation found in the Vienna Convention .  Brazil submits that, while the HS and its Explanatory 
Notes are relevant context and that WCO decisions  may be relevant as subsequent practice in the 
interpretation of the EC Schedule, they are only pa rt of the interpretative exercise the Panel must 
undertake.79  Thailand further submits that any decision by the WCO would not be determinative of 
the rights and obligations of Members in terms of tariff treatment.80  Brazil adds that decisions by the 
HS Committee of the WCO, including those that arise from dispute settlement, are not binding and 
                                                      
75 The Panel notes that, pursuant to Article 11 of the DSU (which is set out in full in para. 7.55 below), 
we are required to undertake an "objective" assessment of the matter before us.  In our view, since the European 
Communities is in the best po sition to interpret the meanin g and effect of its own laws, we accept its argument 
that the recitals in an EC Commissi on Decision, including EC Decision 2003/97/EC, have no legal effect:  EC's 
reply to Panel question No. 19(c). 
76 EC's reply to Panel question No. 25. 
77 EC's reply to Panel question No. 25. 
78 Brazil's reply to Panel question No. 9; Th ailand's second written submission, para. 17. 
79 Brazil's comments on the WCO's replies to the Panel's questions to the WCO dated 2 December 
2004; Thailand's comments on the WCO's replies to the Panel's questions to the WCO dated 2 December 2004. 
80 Thailand's second written submission, para. 18. WT/DS269/R 
Page 28  
 
there are no effective mechanisms that guarantee impl ementation or enforcement of decisions in that 
forum.
81 
7.49 Thailand also argues that Article 3.2 of the DSU makes clear that the WTO's dispute 
settlement system is the forum to resolve dis putes between WTO Members concerning their rights 
and obligations under the covered agreements.82  Thailand argues that, furthermore, Article 23 of the 
DSU provides that, when Members seek redress of a violation of obligations under the covered 
agreements, they must have recourse to and abide by the rules and procedures of the WTO dispute settlement system.
83  Brazil adds that, since the WTO is a Member-driven organization, it does not 
have the power, or mandate, to act on behalf of its Members; nor has any WTO representative or body 
been empowered to solve a dispute concerning two or more WTO Members outside the scope of the 
WTO.  Brazil and Thailand submit that, while the Panel has the right to seek information and 
technical advice from any individual or body which it deems appropriate, as provided under Article 
13.1 of the DSU, it does not have the right to abdi cate its function under Article 11 of the DSU, which 
is to assist the DSB in discharging its respons ibilities under the DSU and the covered agreements.  
Brazil argues that, accordingly, it is the Panel's task, rather than th e task of the HS Committee, to 
make an objective assessment of the matter before it,  including the assessment of the facts of the case 
and the applicability of, and conform ity with, the covered agreements.84 
7.50 The European Communities  submits that both complain ants refused the European 
Communities' suggestion, made at the consultation stage,  to take this dispute to the WCO to the extent 
that it concerns matters of classification.85  The European Communities argues that, given the 
respective institutional frameworks of  the WTO and the WCO, it is important that the nature of WTO 
dispute proceedings should remain distinct fro m decision-making in the context of the WCO.86  The 
European Communities argues that, nevertheless, the task facing the Panel in this case is different 
from that which the WCO would face were the matte r to come before that body.  The European 
Communities explains that the WCO would use th e procedures of the HS Committee to determine 
under which heading the products at issue fall.   Th e European Communities submits that, in contrast, 
the Panel does not need to make a positive ruling of this kind.  Rather, it simply has to determine 
whether the complainants have discharged their burden of proving that the European Communities 
failed to accord to the product at issue the treatment agreed under its Schedule by not providing it the 
tariff treatment envisioned under heading 02.10.87 
7.51 In response, Brazil  argues that, just prior to making its request for consultations at the WTO, 
it sought guidance and clarification from the WCO with  respect to the meaning of headings 02.07 and 
02.10, in view of the matter at issue in this case.  Brazil submits that, at that time, the WCO did not 
provide any clarification with respect to the in terpretation of these headings but, rather, simply 
directed Brazil to the WCO dispute settlement provision found in the HS Convention.88 
2. Comments by the World Customs Organization 
7.52 At the conclusion of the Panel's first substantiv e meeting with the parties, the Panel indicated 
its intention to seek information from the WCO pursuant to Article 13.1 of the DSU.89  The parties 
                                                      
81 Brazil's reply to Panel question No. 9. 
82 Thailand's second written submission, para. 19. 
83 Thailand's second written submission, para. 20. 
84 Brazil's comments on the WCO's replies to the Panel's questions to the WCO dated 2 December 
2004; Thailand's comments on the WCO's replies to the Panel's questions to the WCO dated 2 December 2004. 
85 EC's reply to Panel question No. 74. 
86 EC's oral statement at the second substantive meeting, para. 13. 
87 EC's oral statement at the second substantive meeting, para. 12. 
88 Brazil's reply to Panel question No. 9 referring to Exhibit BRA-28. 
89 Article 13.1 of the DSU, entitled "Right to Seek Information", provides that: "Each panel shall have 
the right to seek information and t echnical advice from any individual or body which it deems appropriate.   WT/DS269/R 
 Page 29 
 
 
were invited to make comments in this regard .  The Panel sought such information from the WCO 
through questions posed in letters from the Pa nel dated 30 September 2004 and 19 November 2004.  
The responses to those letters are contained in Annex C to this Report.   
7.53 By way of general comment in its replies to the Panel's letter of 19 November 2004, the WCO 
states that it appears that the present dispute c oncerns a classification question involving several 
contracting parties to the HS Convention.  The WCO refers to Article 10 of the HS Convention, which 
stipulates that "any dispute between Contracting Par ties concerning the interpretation or application of 
this Convention shall, so far as possible, be se ttled by negotiation between them" and "any dispute 
which is not so settled shall be referred by the Parties to the dispute to the Harmonized System 
Committee which shall thereupon consider the disput e and make recommendations  for its settlement."  
The WCO suggests that the settlement procedures co ntained in the HS Convention should be followed 
by the parties to this dispute before the Panel makes its decision.90 
3. Analysis by the Panel 
7.54 The Panel recalls that it is called upon in th is dispute to determine whether or not the 
measures at issue violate Article II:1(a) and Article II:1(b) of the GATT 1994.  In the process of 
making such a determination, we will need to determine whether the measures at issue result in 
treatment that is less favourable than that provide d for in the EC Schedule and whether the imposition 
of duties and conditions on the products at issue is  in excess of the duties and conditions provided for 
in the EC Schedule.  As explained in greater detail below91, this task involves the interpretation of a 
treaty term of the WTO Agreement and the GATT 1994, namely the WTO concession contained in heading 02.10 of the EC Schedule.
92 
7.55 The Panel notes that it is bound by Article 11 of the DSU.  Article 11 provides that: 
"The function of panels is to assist th e DSB in discharging its responsibilities under 
this Understanding and the covered agreements.  Accord ingly, 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, and make such other findi ngs as will assist the DSB in making the 
recommendations or in giving the rulings pr ovided for in the covered agreements.  
Panels should consult regularly with the par ties to the dispute and give them adequate 
opportunity to develop a mutually satisfactory solution." 
7.56 We understand that, once seized of a matter, Ar ticle 11 prevents a panel from abdicating its 
responsibility to the DSB.  In other words, in the c ontext of the present case, we lack the authority to 
refer the dispute before us to the WCO or to any other body.93 
                                                                                                                                                                     
However, before a panel seeks such information or advice from any individual or body within the jurisdiction of 
a Member it shall inform the authorities of that Member.  A Member should respond promptly and fully to any 
request by a panel for such information as the pane l considers necessary and appropriate.  Confidential 
information which is provided shall not be revealed without formal authorization from the individual, body, or 
authorities of the Member providing the information." 
90 WCO's general comments in its replies to the Pane l's questions to the WCO dated 2 December 2004. 
91 See paragraph 7.87 et seq  below. 
92 We recall that in para. 7.6 above, we concluded that concessions contained in the EC Schedule are 
treaty terms of the GATT 1994 and the WTO Agreement. 
93 The Panel notes that, in India – Quantitative Restrictions , the panel submitted to the IMF a number 
of questions regarding India's balance-of-payments situation.  The panel gave considerable weight to the views expressed by the IMF in its reply to these questions.  India claimed on appeal that the panel improperly 
delegated to the IMF its duty to make an objective assessm ent of the matter and, theref ore, acted inconsistently 
with Article 11 of the DSU.  The Appellate Body stated that:  "[N]othing in the Panel Report supports India's WT/DS269/R 
Page 30  
 
7.57 In addition, we note that all the parties to th is dispute, including the respondent, appear to 
consider that this case is appropriately adjudicated by us.
94  In this regard, we note that Article 23.1 of 
the DSU provides that: 
"When Members seek the redress of a violati on of obligations or other nullification or 
impairment of benefits unde r the covered agreements or an impediment to the 
attainment of any objective of the covered agreements, they shall have recourse to, 
and abide by, the rules and procedures of this Understanding." 
7.58 In the Panel's view, Article 23.1 supports the view  that, in the context of this dispute, which 
involves the question of whether the measures at issu e result in treatment that is less favourable than 
that provided for in the EC Schedule in c ontravention of Article II of the GATT 1994, the 
complainants have a right to recourse to  the WTO dispute settlement mechanism. 
7.59 The Panel is mindful of the respective jurisd iction and competence of the WCO and the WTO 
and, in fact, we specifically raised this issue w ith the parties during the course of these proceedings.95  
Nevertheless, we consider that we have been ma ndated by the DSB in this dispute to determine 
whether the European Communities has violated Article II of the GATT 1994 with respect to the 
products at issue.  As mentioned a bove in paragraph 7.54, in so doing, we will need to interpret the 
WTO concession contained in heading 02.10 of the EC Schedule. 
F. ARTICLE II OF THE GATT 1994 
1. Main claims of the parties 
(a) Parties' claims 
7.60 Brazil  and Thailand  claim that, through EC Regulation No. 1223/2002 and EC Decision 
2003/97/EC, the European Communities is acting inconsistently with its obligations under 
Article II:1(a) and Article II:1(b) of the GATT 1994 by according less favourable treatment to the 
products at issue than that provided for in the EC Schedule.96 
7.61 The European Communities  claims that the treatment accorded by the European 
Communities to frozen boneless chicken cuts impregnate d with salt, with a salt content of 1.2% – 3%, 
under EC Regulation No. 1223/2002 and EC Decision 2003/97/EC respects the bindings contained in 
the EC Schedule and involves no infringement of Article II:1(a) and Article II:1(b) of the GATT 
1994.97 
(b) Analysis by the Panel 
7.62 Article II:1 of the GATT 1994 provides that: 
                                                                                                                                                                     
argument that the Panel delegated to the IMF its judicial function to make an objective assessment of the matter.  
A careful reading of the Panel Report makes clear that the Panel did not simply accept the views of the IMF.  
The Panel critically assessed these views and also considered other data and opinions in reaching its 
conclusions."  Appellate Body Report, India – Quantitative Restrictions , para. 149.  We understand the 
Appellate Body's comments in that case to support the view expressed by us in paragraph 7.56. 
94 See, for example, Brazil's comments on the WCO's re plies to the Panel's questions to the WCO dated 
2 December 2004; Thailand's comments  on the WCO's replies to the Panel's questions to the WCO dated 
2 December 2004; EC's oral statement at th e second substantive meeting, para. 12. 
95 See Panel question No. 9. 
96 Brazil's first written submission, para. 192; Tha iland's first written submission paras. 157-158. 
97 EC's first written submission, para. 211.  WT/DS269/R 
 Page 31 
 
 
"(a) Each contracting party shall accord to the commerce of the other contracting 
parties treatment no less favourable than that  provided for in the appropriate Part of 
the appropriate Schedule anne xed to this Agreement. 
(b) The products described in Part I of  the Schedule relating to any contracting 
party, which are the products of territories of other contracting parties, shall, on their 
importation into the territory to which the Sc hedule relates, and subject to the terms, 
conditions or qualifications set forth in that Schedule, be exempt from ordinary 
customs duties in excess of t hose set forth and provided therein.  Such products shall 
also be exempt from all other duties or charges of any kind imposed on or in connection with the importation in excess of those imposed on the date of this 
Agreement or those directly and mandator ily required to be imposed thereafter by 
legislation in force in the importing territory on that date." 
7.63 The Appellate Body in Argentina – Textiles and Apparel  elaborated upon the meaning and 
scope of Article II of the GATT 1994: 
"The terms of Article II:1(a) require that a Member 'accord to the commerce of the 
other Members treatment no less favourable than  that provided for' in that Member's 
Schedule…. Paragraph (a) of Article II:1 contains a general prohibition against 
according treatment less favourable to imports than that provided for in a Member's 
Schedule.  Paragraph (b) prohibits a specific kind of practice that will always be inconsistent with paragraph (a ): that is, the application of ordinary customs duties in 
excess of those provided for in the Schedule."
98 
7.64 As for the relationship between subparagraphs (a) and (b) of Article II of the GATT 1994, the 
Appellate Body in Argentina – Textiles and Apparel  stated that: 
"In accordance with the general rules of treat y interpretation set out in Article 31 of 
the Vienna Convention , Article II:1(b), first sentence, must be read in its context and 
in light of the object and purpose of the GATT 1994.  Article II:1(a) is part of the 
context of Article II:1(b); it requires that  a Member must accord to the commerce of 
the other Members 'treatment no less favourable than that provided for' in its Schedule.  It is evident to us that the application of customs duties in excess of  those 
provided for in a Member's Schedule, in consistent with the first sentence of 
Article II:1(b), constitutes 'less favourab le' treatment under the provisions of 
Article II:1(a) … ."
99 
7.65 In light of the foregoing, in determining whethe r or not the measures at issue are inconsistent 
with Article II:1(a) and Article II:1(b) of the GA TT 1994, we will need to ascertain: (a) the treatment 
accorded to the products at issue under the EC Sche dule; (b) the treatment accorded to the products at 
issue under the measures at issue; and (c) whethe r the measures at issue result in less favourable 
treatment of the products at issue than that provide d for in the EC Schedule and, more particularly, 
whether those measures result in the imposition of duties and conditions on the products at issue in 
excess of those provided for in the EC Schedule. 
                                                      
98 Appellate Body Report, Argentina – Textiles and Apparel , para. 45. 
99 Appellate Body Report, Argentina – Textiles and Apparel , para. 47. WT/DS269/R 
Page 32  
 
2. Treatment of the products at issue 
(a) Arguments of the parties 
7.66 Brazil  and Thailand  submit that less favourable treatment  has been accorded to the products 
at issue in this case in violation of Article II of the GATT 1994 because the European Communities 
changed its customs classification so that frozen sa lted chicken that had previously been classified 
under subheading 0210.90.20 and subject to an ad valorem  tariff of 15.4% is now classified as frozen 
chicken under subheading 0207.14.10 and is subject to a tariff of 102.4€/100kg/net as well as being potentially subject to special safeguard measures  pursuant to Article 5 of the Agreement on 
Agriculture.  They argue that the application of a specific rate of 102.4€/100kg/net leads to a tariff rate in excess of the bound rate for salted chic ken provided for in the EC Schedule and constitutes 
"treatment less favourable" within the meaning of Article II of the GATT 1994.
100  Thailand submits 
that the European Commun ities has not disputed the validity of price data demonstrating that the ad 
valorem  equivalent of the specific duty of 102.4€/100kg/net for the products at issue following the 
introduction of the measures at issue exceeds 15.4%.101  Furthermore, Thailand submits that the 
European Communities has not established a mechan ism to ensure that, in respect of the new 
description of the products at issue, the speci fic duty of 102.4€/100 kg/net would not exceed the 
15.4% ad valorem  bound rate previously applied to that product.102  Thailand submits that, therefore, 
the measures at issue have resulte d in treatment less favourable than  that provided for in the EC 
Schedule.103  Brazil and Thailand argue, in addition, th at the fact that the same product is now 
potentially subject to the application of a sp ecial safeguard measur e under the Agreement on 
Agriculture is also "treatment less favourable" than that provided for in the EC Schedule for "salted" 
meat.104 
7.67 The European Communities  submits that the products c overed by EC Regulation No. 
1223/2002 and EC Decision 2003/97/EC fall under headi ng 02.07 of the EC Schedule and are subject 
to a duty of 102.4€ per 100 kilogram.105  The European Communities notes that, in addition, these 
products may be subject to the special safeguard  mechanism provided for in Article 5 of the 
Agreement on Agriculture.  The European Commun ities also notes that it has a tariff rate quota 
covering this tariff line of 15,500 tonnes from whic h Brazil and Thailand bene fit, among others.  The 
European Communities notes that the in-quota rate is zero.106  The European Communities 
acknowledges that, currently, it has no mechanism in place that would subject the products covered by 
EC Regulation No. 1223/2002 and EC Deci sion 2003/97/EC to a duty not exceeding 15.4% 
ad valorem .  However, the European Communities submits  that it is not necessary to have such a 
mechanism in place becau se the products at issue are not entitled to benefit from the European 
Communities' concession of a 15.4% ad valorem rate under subheading 0210.90.20 of the EC 
Schedule.107 
                                                      
100 Brazil's first written submission, paras. 9, 54 an d 59; Thailand's first written submission, paras. 19-
20, 54, 58 and 155. 
101 Indeed, in its reply to Panel question No. 95, the EC confirmed that it did not dispute the pricing 
data provided by the complainants. 
102 Thailand's first written submission, para. 12. 
103 Brazil's first written submission, paras. 9, 54 and 59; Thailand's first written submission, 
paras. 19-20, 54, 58 and 155. 
104 Brazil's first written submission, paras. 9, 54 and 59; Thailand's first written submission, 
paras. 19-20, 54. 
105 EC's reply to Panel question No. 25. 
106 EC's reply to Panel question No. 94. 
107 EC's reply to Panel question No. 25.  WT/DS269/R 
 Page 33 
 
 
(b) Analysis by the Panel 
(i) Treatment in the EC Schedule 
7.68 As noted above in paragraph 7.65, the first matter for the Panel's determination is the 
treatment accorded to the products at issue under the EC  Schedule.  Of relevance to this dispute is the 
treatment granted in the EC Schedule for subh eading 0207.14.10 and for subheading 0210.90.20.  
Excerpts of these subheadings from the EC Schedule are set out below: 
Tariff item 
number Description of products Final bound rate 
of duty Special 
safeguard 
    
0207 Meat and edible offal, of the poultry of heading No. 
0105, fresh, chilled or frozen:   
(…)    
 - Poultry cuts and offal other than livers, frozen:   
0207.41 -- Of fowls of the species Gallus domesticus:   
 --- Cuts:   
0207.41.10 ---- Boneless 1024 ECU/T SSG 
(…)    
 
 
Tariff item 
number Description of products Final bound rate 
of duty Special 
safeguard 
    
0210 Meat and edible meat offal, salted, in brine, dried, 
smoked; edible flours and meals of meat or meat offal   
(…)    
0210.90 - Other, including edible flours and meals of meat or 
meat offal:   
 -- Meat:   
(…)    
0210.90.20 --- Other 15.4% -- 
(…)    
 
7.69 The Panel notes as a preliminary matter that most of the argumentation that has been 
advanced by the parties in this case relates to the 4- digit level of the headings in question – that is, 
concerning headings 02.07 and 02.10 rather th an, respectively, subheadings 0207.41.10 and 
0210.90.20.  As explained in more detail below in paragraphs 7.84 et seq , this focus is associated with 
the fact that the current dispute appears to turn on  the meaning of the term "salted", a reference to 
which is found at the 4-digit level in heading 02.10. 
7.70 It is clear to the Panel from the excerpts of the EC Schedule set out above in paragraph 7.68 
that products falling within the scope of subhead ing 0207.41.10 are subject to a bound specific duty 
rate of 1024 ECU/T (i.e. 102.4€/100kg/net).  In add ition, such products may be subject to a special 
safeguard measure provided for in Article 5 of the Agreement on Agriculture.  Products falling under 
subheading 0210.90.20 are subject to a final bound duty rate of 15.4% ad valorem . 
(ii) Treatment under the measures at issue 
7.71 The Panel indicated above in paragraph 7.65 th at the second matter for our determination is 
the treatment accord ed to the products at issue under the me asures at issue.  We found above in 
paragraph 7.47 that EC Regulation No. 1223/2002 a nd EC Decision 2003/97/EC have the effect of 
classifying frozen boneless chicken cuts that have been deeply and homogenously impregnated with 
salt, with a salt content of 1.2% – 3%, under su bheading 0207.14.10 of the European Communities' WT/DS269/R 
Page 34  
 
CN.  In addition, the European Comm unities has informed us that the products at issue – that is, those 
covered by EC Regulation No. 1223/2002 and EC Decision 2003/97/EC – are subject to a duty of 
102.4€ per 100 kilogram.
108  In light of the foregoing, it is clear  that the measures at issue treat the 
products at issue as if they fall under heading 02.07 of the European Communities' CN.109 
(iii) Less favourable treatment 
7.72 As noted above in paragraph 7.65, the third matter for our determination is whether the 
measures at issue result in less favourable treatment of  the products at issue than that provided for in 
the EC Schedule and, more particularly, whether those measures result in the imposition of duties and 
conditions on the products at issue in excess of those provided for in the EC Schedule. 
7.73 Regarding the question of what may constitute less favourable treatment for the purposes of 
Article II of the GATT 1994, the Appellate Body in Argentina – Textiles  and Apparel  stated that: 
"A tariff binding in a Member's Schedule  provides an upper limit on the amount of 
duty that may be imposed, and a Member is  permitted to impose a duty that is less 
than that provided for in its Schedule.  Th e principal obligation in the first sentence of 
Article II:1(b) ... requires a Member to re frain from imposing ordinary customs duties 
in excess of  those provided for in that Member's Schedule."110 
In other words, if duty is levied on a product in ex cess of that provided for in a Member's schedule, 
"less favourable treatment" will exist within the meaning of Article II of the GATT 1994. 
7.74 The Panel notes that the imposition of a specific duty on a product in cases where the relevant 
Member's schedule provides for an ad valorem  duty or vice versa  will not necessarily lead to a 
violation of Article II of the GATT 1994.  In Argentina – Textiles and Apparel , the Appellate Body 
stated that "the application of a type of duty different from the type provided for in a Member's 
Schedule is inconsistent with Article II:1(b), firs t sentence, of the GATT 1994 to the extent that it 
results in ordinary customs duties being levied in  excess of those provided for in that Member's 
Schedule." 111 
7.75 In this case, the Panel recalls that, under the measures at issue, the products at issue are 
treated as if they fall under heading 02.07 of the CN.  In our view, there is clearly a possibility that the 
price of the products at issue will be sufficiently low so as to produce an ad valorem  equivalent that 
exceeds that applicable for products covered by th e concession contained in heading 02.10 of the EC 
Schedule.  Indeed, pricing data before the Panel indi cate that the duty levied on the products at issue 
can and has in the past exceeded 15.4% ad valorem , being the bound duty rate for products covered 
by heading 02.10.112  The European Communities has indicated  that it does not dispute such pricing 
                                                      
108 EC's reply to Panel question No. 25. 
109 In this regard, we note that the European Communities has stated that the products covered by EC 
Regulation No. 1223/2002 and EC Decision 2003/97/EC fall under heading 02.07 of the EC Schedule: EC's 
reply to Panel question No. 25. 
110 Appellate Body Report, Argentina – Textiles and Apparel , para. 46. 
111 Appellate Body Report, Argentina – Textiles and Apparel , para. 55.  That case concerned 
Argentina's commitment to bind imports of textiles, apparel and footwear at an ad valorem  r a t e  o f  3 5 % .   
However, following the conclusion of the Uruguay Round,  imports of textiles and apparel into Argentina were 
subject to either an ad valorem  tax of 35% or a minimum specific duty, whichever was the higher.  The panel 
found that, because Argentina bound an ad valorem  duty of 35%, it could not then apply a specific minimum 
duty.  As noted above in paragraph 7.74, the Appellate Body did not agree with the panel in this respect. 
112 In paragraph 57 of its first written submission, Brazil submits that, on the basis of average annual 
prices of salted chicken meat exported from Brazil to the EC from 1998 - 2002, the equivalent ad valorem  rate 
of duty imposed on such meat ranged from 42.17% to 58 .4%.  In paragraph 11 of its first written submission, 
Thailand submits that, on the basis of the average annual price of salted chicken exported from Thailand to the  WT/DS269/R 
 Page 35 
 
 
data.113  Further, the European Communities has acknow ledged that, currently, it has no mechanism in 
place that would subject the products covered by  EC Regulation No. 1223/2002 and EC Decision 
2003/97/EC to a duty not exceeding 15.4% ad valorem .114  In light of the foregoing, if we conclude 
that the products at issue are covered by the concession contained in h eading 02.10 of the EC 
Schedule rather than the concession contained in head ing 02.07, there is no question that the treatment 
accorded to those products under the me asures at issue is less favourable  than that provided for in the 
EC Schedule. 
3. Burden of proof 
7.76 In order for the Panel to determine whether, in fact, the products at issue have been accorded 
less favourable treatment in violation of Article II of the GATT 1994, it is the Panel's view that it is 
necessary to first determine what must be proved by  the complainants to justify their claims under 
Article II. 
7.77 The Panel notes that, in US – Wool Shirts and Blouses , the Appellate Body stated that: 
"[I]t is a generally-accepted canon of evidence in civil law, common law and, in fact, 
most jurisdictions, that the burden of proof rests upon the party, whether complaining 
or defending, who asserts the affirmative of a particular claim or defence.  If that 
party adduces evidence sufficient to raise a presumption that what is claimed is true, the burden then shifts to the other party, who will fail unless it adduces sufficient evidence to rebut the presumption. 
In the context of the GATT 1994 and the WTO Agreement , precisely how much and 
precisely what kind of evidence will be required to establish such a presumption will 
necessarily vary from measure to measure, provision to provision, and case to 
case."
115 
7.78 The complainants' fundamental claim in this dis pute is that the products at issue fall within 
the scope of the concession contained in headi ng 02.10 of the EC Schedule whereas, under the 
measures at issue, they are currently classified as  if they fall within the scope of the concession 
contained in heading 02.07 of the EC Schedule.116  In light of the rules governing the burden of proof, 
it is our view that the complainants bear the burden to prove that the products at issue are, in fact, 
covered by the concession contained in heading 02.10 of the EC Schedule. 
4. Summary and conclusions regarding the interpretation of Article II of the GATT 1994 
7.79 The key issue for the Panel's determination in this dispute is whether the measures at issue 
result in less favourable treatment of the products at issue and, more particularly, whether those 
measures result in the imposition of duties and conditi ons on the products at issue in excess of those 
provided for in the EC Schedule.  As noted previ ously, the complainants' f undamental claim is that 
the products at issue are covered by the concessi on contained in heading 02.10 of the EC Schedule 
                                                                                                                                                                     
EC from 1997-2002, the equivalent ad valorem  rate imposed on such chicken was 43%.  Thailand also submits 
that, following the entry into force of EC Regulation No. 1223/2002 on 29 July 2002, on the basis of the annual 
price of salted chicken exported from Thailand, the ad valorem  equivalent rate of duty was 51.2% in 2002 and 
58.9% in 2003: Thailand's first written submission, paras. 150-151.  See also Exhibit THA-2. 
113 EC's reply to Panel question No. 95. 
114 EC's reply to Panel question No. 25. 
115 Appellate Body Report on US – Wool Shirts and Blouses , p. 14 (DSR 1997:I, 323 at 325). 
116 See, for example, Brazil's second written submission, para. 1 and Thailand's first written 
submission, para. 66.  We recall that we determined above in paragraph 7.47 that the measures at issue have the 
effect of classifying frozen boneless chicken cuts that have been deeply and homogenously impregnated with 
salt, with a salt content of 1.2%-3%, under subhea ding 0207.14.10 of the European Communities' CN. WT/DS269/R 
Page 36  
 
whereas they are currently treated as if they are covered by the co ncession contained in heading 02.07 
of the EC Schedule pursuant to the measures at i ssue.  Therefore, the Panel considers that the 
complainants bear the burden to prove that the produc ts at issue are, in fact, covered by the concession 
contained in heading 02.10 of the EC Schedule.  If the Panel concludes that the products at issue are 
so covered, there is no question that the treatme nt accorded to those products under the measures at 
issue is less favourable than that provided for in  the EC Schedule because undisputed pricing data 
indicate that the duty levied on the produc ts at issue can and has exceeded 15.4% ad valorem , being 
the bound duty rate for products covered by  the concession contained in heading 02.10. 
7.80 We turn now to the relevant aspects of the EC Schedule, which we must interpret in order to 
determine whether the terms of the concession contai ned in heading 02.10 of that Schedule cover the 
products at issue. 
G. 
INTERPRETATION OF THE EC SCHEDULE  
1. The essence of the interpretative issue 
(a) Arguments of the parties 
7.81 The European Communities  denies that the products at issue are covered by heading 02.10 
of the EC Schedule.117  The European Communities explains that it is not arguing that, because the 
products at issue are frozen, and heading 02.07 of the EC Schedule covers "frozen" chicken, therefore 
they should be included under that heading regardl ess of whether they had been preserved by salting.  
The European Communities clarifies that, rather, the products at issue are not "salted" because, in 
order to qualify under heading 02. 10, through salting, th e product must have undergone a process in 
order to place it in a state of preservation.118  According to the European Communities, the key 
element of heading 02.10 is the notion of preservation.119  In addition, the European Communities 
submits that, in order to be preserved with salt, meat should be deeply and homogenously 
impregnated with a level of salt suffici ent to ensure long-term preservation.120  The European 
Communities also argues that, with regard to headin g 02.10, the principle of long-term preservation is 
well-entrenched and was confirmed as early as 1983 in the ECJ Dinter  judgement.121 
7.82 Thailand  submits that the European Communities' argument that only meat products salted 
for the purpose of long-term preservation are "salte d" within the meaning of heading 02.10 of its 
Schedule implies a novel approach to customs classifi cation.  To determine the customs classification 
of a product, it would no longer be sufficient to examine the physical characteristics of the product 
presented to customs; it would also be necessary to  examine for what purpose the product was given 
its physical characteristics.  Thailand submits th at the European Communities' novel approach cannot 
be implied into the term "salted".  Thailand also argu es that such an approach is completely foreign to 
the HS and deviates from the normal practice of customs classification of Members.  According to Thailand, such an approach would, if introduced into WTO law, create great uncertainty in the 
determination of the scope of the tariff concessions.
122 
7.83 Brazil  submits that, in assessing the meaning, scope and content of the EC tariff concession at 
issue, the Panel should bear in mind that interpre tative principles according to which the Panel is 
called upon to interpret the EC Schedule "neither re quire nor condone the imputation into a treaty of 
words that are not there or the importation into a tr eaty of concepts that were not intended".  Brazil 
                                                      
117 EC's oral statement at the second substantive meeting, para. 14. 
118 EC's oral statement at the second substantive meeting, para. 16. 
119 EC's second written submission, para. 23. 
120 EC's reply to Panel question No. 88. 
121 EC's reply to Panel question No. 109.  The Dinter  judgement is discussed in more detail below in 
paragraph 7.372 et seq . 
122 Thailand's oral statement at the first substantive meeting, para. 5.  WT/DS269/R 
 Page 37 
 
 
argues that, in this case, the principles of interpre tation cannot attribute to heading 02.10 of the EC 
Schedule the non-existent term or unintended concept of preservation.123 
(b) Analysis by the Panel 
7.84 The Panel recalls that, in paragr aph 7.47 above, we concluded that the measures at issue – EC 
Regulation No. 1223/2002 and EC Decision 2003/97/E C – have the practical effect of classifying 
frozen boneless chicken cuts that have been deeply  and homogenously impregnated with salt, with a 
salt content of 1.2% – 3%, under subheading 0207.14.10 of the European Communities' CN.  Both 
measures state that the products covered by those me asures (i.e. the products at issue) are "frozen for 
long-term conservation ".124 
7.85 With respect to heading 02.10, the European  Communities has submitted that, in its regime, 
that heading is characterized by the notion of preservation.125  The European Communities argues 
more particularly that, in order for a product to be salted for the purposes of heading 02.10, the salt 
must be sufficient to ensure "long-term preservation".126  The Panel notes that the principle of "long-
term preservation" is referred to  in EC Regulation No. 1871/2003127 and EC Regulation No. 
2344/2003.128 
7.86 The European Communities has confirmed that the substantive effect of the measures at issue 
is the same as the substantive effect of EC  Regulation No. 1871/2003 and EC Regulation No. 
2344/2003, at least as far as frozen boneless chicken cu ts that have been impregnated with salt are 
concerned.129  In our understanding, these measures,  like EC Regulation No. 1223/2002 and EC 
                                                      
123 Brazil's oral statement at the first substantive meeting, para. 22 citing Appellate Body Report, 
India – Patents (US) , para. 45 and Appellate Body Report, EC – Tube or Pipe Fittings , para. 98. 
124 See, in particular, column 3 of the Annex of EC Regulation No. 1223/2002 set out above in 
paragraph 2.31 and recital (7) of EC Decision 2003/97/EC set out above in paragraph 2.33. 
125 EC's second written submission, para. 23. 
126 EC's reply to Panel question No. 88. 
127 Article 1 of EC Regulation No. 1871/2003 provides that: "Additional note 7 to Chapter 2 of the 
Combined Nomenclature annexed as Annex I to Regula tion (EEC) No 2658/87 is replaced by the following: 
'For the purposes of heading 0210, the terms "meat and edible meat offal, salted, in brine" mean meat and edible 
meat offal deeply and homogeneously impregnated with salt in all parts and having a total salt content of not less than 1.2% by weight, provided it is the salting which ensures long-term preservation.'" 
128 According to the European Communities, EC Regulation No. 2344/2003 makes certain changes to 
the CN in order to incorporate changes proposed to the CN after 11 September 2003, being the date when the annual revision to the CN for 2004 was introduced.  (The  annual revision to the CN  for 2004 was contained in 
EC Regulation No. 1789/2003, which was adopted on 11 September 2003 and was published on 30 October 
2003.)  The European Communities submits that EC Regulation 1871/2003 of 23 October 2003 was one such change (EC's replies to Panel question Nos. 20(a) and 33), which appears to be supported by the text of EC 
Regulation No. 2344/2003.  In accord ance with the amendment proposed in  EC Regulation No. 1871/2003, EC 
Regulation No. 2344/2003 amends Additional Note 7 to Chapter 2 of the CN as follows: "For the purposes of heading 0210, the terms 'meat and edible meat offal, salted or in brine' mean meat a nd edible meat offal deeply 
and homogeneously impregnated with salt in all parts an d having a total salt content by weight 1.2% or more, 
provided that it is the salting which ensures the long-term preservation.":  EC Regulation No. 2344/2003, Annex, para. 1. 
129 In particular, the European Communities indicated that frozen chicken cuts that have been deeply 
and homogeneously impregnated with salt, with a salt content of 1.2% or more would be classified under 
subheading 0210.90.20 of the European Communities' CN pursuant to EC Regulation No. 1871/2003 and 
EC Regulation No. 2344/2003 provided that the goods were salted for preservation: EC's reply to Panel question No. 20 (b).  To compare the substantive effect of EC Regulation No. 1871/2003 and EC Regulation No. 
2344/2003 with the measures at issue, the Panel notes that EC Regulation No. 1871/2003 and EC Regulation 
No. 2344/2003 relate to all "meat and edible meat offal"  covered by heading 02.10 of the CN.  The Panel recalls 
its conclusion in paragraph 7.47 above that EC Regulation No. 1223/2002 and EC Decision 2003/97/EC 
concern the classification of "boneless chicken cuts, frozen  and impregnated with salt in all parts" under heading 
02.07 of the CN.  While, on their face, the two sets of measures appear quite different as regards the products WT/DS269/R 
Page 38  
 
Decision 2003/97/EC, have the effect of treating frozen boneless chicken cuts that have been 
impregnated with salt, with a salt content of 1. 2% – 3%, as if they are covered by the concession 
contained in heading 02.07 of the EC Schedule ra ther than the concession contained in heading 02.10 
of the EC Schedule, unless the salt ensures "long-term preservation" of those chicken cuts.  Therefore, 
the critical question for us in interpreting the EC Sche dule in this case is whether the term "salted" in 
the concession contained in heading 02.10 covers th e products at issue which, in turn, will entail a 
determination of whether that concession includes th e requirement that salting is for preservation and, 
more particularly, is fo r long-term preservation.
130 
7.87 The answer to this question will clearly be govern ed by the results of the Panel's interpretation 
of the tariff concession at issue, namely, the concession contained in heading 02.10 of the EC 
Schedule.  As noted above in para graph 7.6, in view of Article II:7 of the GATT 1994 and Article II:2 
of the WTO Agreement, the concessions contained in the EC Schedule are treaty terms of the GATT 1994 and the WTO Agreement.  In other words, the content of the EC Schedule must be considered treaty language. 
7.88 Article 3.2 of the DSU provides that: 
"The dispute settlement system of the WTO is a central element in providing security 
and predictability to the multilateral tradin g system.  The Members recognize that it 
serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provi sions of those agreements in accordance 
with customary rules of interpretation of public international law.  Recommendations 
and rulings of the DSB cannot add to or diminish the rights and obligations provided 
in the covered agreements." 
The Panel notes that Articles 31 and 32 of the Vienna Convention on the Law of Treaties  (Vienna 
Convention ) contain "customary rules of interpretati on of public international law" within the 
meaning of Article 3.2 of the DSU.
131  These Articles comprise the legal framework within which this 
interpretative exercise must take place. 
7.89 Article 31 of the Vienna Convention  provides that: 
"General rule of interpretation 
1. A treaty shall be interpreted in goo d faith in accordance with the ordinary 
meaning to be given to the terms of the trea ty in their context and in the light of its 
object and purpose. 
                                                                                                                                                                     
and headings of the CN to which they relate, it is clear to us that both sets of measures have the effect of 
classifying frozen boneless chicken cuts that have been impregnated with salt, with a salt content of 1.2%-3%, 
under heading 02.07 rather than heading 02.10, unless the salt ensures long-term preservation of those chicken 
cuts.  Therefore, the Panel sees no relevant difference between, on the one hand, EC Regulation No. 1223/2002 and EC Decision 2003/97/EC and, on the other hand, EC Regulation No. 1871/2003 and EC Regulation 
No. 2344/2003 as far as they concern the classification of the products at issue. 
130 In this regard, we note that, in response to a question from the Panel, the European Communities 
submits that "[w]hereas EC law on classification contains the term 'long-term preservation', the word 
'preservation' is not to be found in HS heading 02.10.  Rather, the EC has shown that heading 02.10 has at its heart a concept which the EC in these proceedings has te rmed 'preservation' but which it might have as easily 
have referred to as 'long-term preservation'. ...  'Long-ter m preservation' is the phrase that the EC has used to 
represent the preservation criterion that is inherent in heading 02.10, whether in the Harmonised System, or the 
EC's Schedule, or the EC's Combined Nomencla ture." EC's reply to Panel question No. 118. 
131 See, for example, Appellate Body Report, US – Gasoline , p. 17 (DSR 1996: I, 3 at 16); Appellate 
Body Report, India – Patents (US) , para. 45; Appellate Body Report, US – Shrimp , para. 114.  WT/DS269/R 
 Page 39 
 
 
2. The context for the purpose of the inte rpretation of a treaty shall comprise, in 
addition to the text, including its preamble and annexes: 
(a) any agreement relating to the treaty which was made between all the parties 
in connection with the conclusion of the treaty; 
(b) any instrument which was made by one or more parties in connection with 
the conclusion of the treaty and accepted by the other parties as an instrument related 
to the treaty. 
3. There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of 
the treaty or the application of its provisions; 
(b) any subsequent practice in the appli cation of the treaty which establishes the 
agreement of the parties regarding its interpretation; 
(c) any relevant rules of international la w applicable in the relations between the 
parties. 
4. A special meaning shall be given to a te rm if it is established that the parties 
so intended." 
7.90 Article 32 provides that: 
"Supplementary means of interpretation 
Recourse may be had to supplementary me ans of interpretation, including the 
preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the 
meaning when the interpretation according to article 31: 
(a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable." 
7.91 Reliance upon Articles 31 and 32 of the Vienna Convention  to interpret WTO treaty 
provisions is supported by jurisprudence of the Ap pellate Body and panels under the GATT 1994, the 
Agreement on Agriculture and the Agreement on G overnment Procurement.  For example, in EC – 
Computer Equipment , the Appellate Body set out interpretative rules concerning tariff concessions 
contained in a WTO Member's GATT schedule: 
"Tariff concessions provided for in a Member 's Schedule – the interpretation of which 
is at issue here – are reciprocal and result from a mutually-advantageous negotiation between importing and exporting Members.  A Schedule is made an integral part of 
the GATT 1994 by Article II:7 of the GATT 1994.  Therefore, the concessions 
provided for in that Schedule are part of the terms of the treaty.  As such, the only 
rules which may be applied in interpreting the meaning of a concession are the general rules of treaty interpretation set out in the Vienna Convention."
132 
                                                      
132 Appellate Body Report, EC – Computer Equipment , para. 84. WT/DS269/R 
Page 40  
 
7.92 In US – Shrimp , the Appellate Body referred to a hierarchy between the various elements 
contained in Article 31 of the Vienna Convention : 
"A treaty interpreter must begin with, a nd focus upon, the text of the particular 
provision to be interpreted.  It is in the wo rds constituting that provision, read in their 
context, that the object and purpose of the states parties [sic] to the treaty must first be 
sought.  Where the meaning imparted by the text itself is equivocal or inconclusive, 
or where confirmation of the correctness of the reading of the text itself is desired, 
light from the object and purpose of the tr eaty as a whole may usefully be sought."
133 
In other words, the Appellate Bo dy indicated that the object and purpose should be considered after 
the treaty interpreter has determined the meaning of the words constituting the treaty obligation in 
question when read in their context. 
7.93 In addition, the Appellate Body has stated that  one of the corollaries of the general rule of 
interpretation in Article 31 is that "interpretation [o f a treaty] must give meaning and effect to all the 
terms of a treaty."134  Therefore, an interpreter may not adopt a reading that would result in reducing 
whole clauses or paragraphs of a treaty to redundancy or inutility. 
7.94 The Panel also understands that the primary pur pose of treaty interpretation is to identify the 
common intention of the parties and that the rules contained in Articles 31 and 32 of the Vienna 
Convention  have been developed to help assessing, in obj ective terms, what was or what could have 
been the common intention of the parties to a treaty .  We are aware that the various steps provided for 
in Articles 31 and 32 are meant to be viewed as one integrated rule of interpretation rather than as a 
series of separate tests and that, accordingly, the va rious criteria contained in those Articles are not to 
be applied in isolation of each other.  However, fo r the sake of clarity, we consider it appropriate to 
explain our conclusions step by step under Article  31 beginning with an analysis of the ordinary 
meaning of the concession contained in heading 02. 10 and then reviewing the ordinary meaning of 
that concession in its context and, finally, in light  of the object and purpose.  We will turn to 
Article 32 to confirm the meaning of the concessi on contained in heading 02.10 under Article 31 if 
the meaning of the concession under Article 31 does not yield a clear meaning or leads to a result that 
is manifestly absurd or unreasonable. 
2. Time-frame for interpretation 
(a) Arguments of the parties 
7.95 Brazil  and Thailand  submit that the relevant point in tim e at which the meaning of headings 
in the EC Schedule should be assessed is 15 April 1994, when the GATT Contracting Parties signed 
the Final Act of the Uruguay Round and when Member s' schedules were annexed to the Marrakesh 
Protocol.  Brazil argues that, in principle, 15 April 1994 was the last opportunity a Contracting Party had to refuse or accept adherence to the Protocol.
135  Thailand also notes that, in US – Shrimp, the 
Appellate Body stated that the relevant time fo r the interpretation of the treaty at issue was 1994, 
being the time when Members assumed thei r obligations under the WTO Agreement.136 
7.96 The European Communities  argues that the Panel is tasked to assess the meaning of its 
concessions pursuant to Article 31 of the Vienna Convention  as of the date of Panel establishment 
according to Articles 3.2 and 11 of the DSU.137  The European Communities submits that, insofar as 
                                                      
133 Appellate Body Report, US – Shrimp , para. 114. 
134 Appellate Body Report, US – Gasoline , p. 23. 
135 Brazil's reply to Panel question No. 56; Thailand's reply to Panel question No. 56. 
136 Thailand's reply to Panel question No. 56. 
137 EC's replies to Panel question Nos. 56 and 87.  WT/DS269/R 
 Page 41 
 
 
EC law is relevant to determining the scope  of the EC Schedule under Article 32 of the Vienna 
Convention as part of the circumstances of its conclu sion, the common intention of the parties as 
expressed in the WTO Modalities for the Establishm ent of Specific Binding Commitments under the 
Reform Programme (Modalities Agreement) indicates that the commencement of the Uruguay Round 
negotiations, i.e. 1 September 1986, should be used as the relevant date when such law should be 
considered.138 
7.97 In response, Thailand  argues that, while the determination of whether there is a violation of 
the European Communities' obligations must be made on the basis of the situation existing at the date 
of the establishment of the Panel, a treaty interp reter is required to assess the scope of the tariff 
commitment the European Communities made fo r heading 02.10 when it concluded the WTO 
Agreement on 15 April 1994 in order to ascertain the European Communities' WTO obligations.139  
Thailand submits that 15 April 1994 is the relevant da te for examining the scope  of the headings in a 
Member's schedule because that is the date that the then Contracting Parties signified their consent to 
be bound by the WTO Agreement and the time  their schedules were annexed thereto.140  With respect 
to the European Communities' arguments regardin g the time for assessment of EC law, Thailand 
submits that Article 32 of the Vienna Convention  does not make any reference to legislation or court 
judgements in a Member's jurisdiction applicable as of  the date of the launch of negotiations or at the 
time of the conclusion of the negotiations.  According to Thailand, Article 32 of the Vienna 
Convention  only makes reference to the circumst ances surrounding the conclusion of the treaty.141  
Thailand also submits that the Modalities Agreement me rely requires that products subject to ordinary 
customs duties be bound at the level applied as of  1 September 1986.  Thailand argues that this does 
not have any implications for the sc ope of the tariff concession in question.142 
(b) Analysis by the Panel 
7.98 The Panel recalls that the complainants argue that the meaning of concessions contained in 
the EC Schedule should be assessed as at 15 Apr il 1994.  The European Communities submits that, 
for the purposes of the Panel's analysis under Article 31 of the Vienna Convention , the meaning of 
tariff headings in the EC Schedule should be assesse d as at the date of Pane l establishment whereas, 
for the purposes of the Panel's analysis of EC law as part of the circumstances of the conclusion of the 
EC Schedule under Article 32 of the Vienna Convention , 1 September 1986 is the date for assessment 
of the meaning of concessions contained in the EC Schedule.143 
7.99 The Vienna Convention  does not expressly stipulate the time at which or period during which 
the common intentions of the parties are to be asses sed when interpreting a treaty term.  However, the 
Panel notes that the various sources to which a trea ty interpreter may have regard under Articles 31 
and 32 of the Vienna Convention  are, in general terms, identified by reference to when they were 
created, finalized and/or existed as compared to when  the treaty being interpreted was concluded.  The 
Panel infers from this that the relevant tim e for assessment under Articles 31 and 32 of the Vienna 
Convention  depends upon the source for treaty interpreta tion being referred to.  In our view, the 
"ordinary meaning" is to be assessed at the time of conclusion  of the treaty in question, being the time 
                                                      
138 EC's second written submission, para. 97 et seq; EC's oral statement at the second substantive 
meeting, para. 72; EC's reply to Panel question No. 87.  See also the European Communities' arguments set out 
in paragraph 7.337 below.  The Modalities Agreement is contained in Exhibit EC-9. 
139 Thailand's comments on the EC's reply to Panel question No. 87. 
140 Thailand's second written submission, para. 77.  
141 Thailand's oral statement at the second substa ntive meeting, para. 29; Thailand's comments on the 
EC's reply to Panel question No. 87. 
142 Thailand's second written submission, para. 76. 
143 In this regard, the European Communities' arguments are set out in further detail in paragraph 7.337 
below. WT/DS269/R 
Page 42  
 
which is at the focus of both Articles 31 and 32 of the Vienna Convention .
144  Regarding "context" 
under Article 31(2), Article 31(2)(a) refers to "any agreement relating to the treaty which was made 
between all the parties in connection with the conclusion of the treaty " and Article 31(2)(b) refers to 
"any instrument which was made by one or more parties in connection with the conclusion of the 
treaty ...".  The terms of Article 31(2) suggest that s ources considered under that Article must have 
been created, finalized and/or existed contemporaneously  with the conclusion of the treaty.  
Article 31(3)(a) refers to "any subsequent  agreement" and Article 31(3)(b) refers to "any subsequent  
practice".  The terms of Article 31(3) suggest that  sources considered under that Article must have 
been created, finalised and/or existed following  conclusion of the treaty.  Article 32 refers to "the 
preparatory work of the treaty  and the circumstances of its conclusion ", suggesting that such sources 
considered under Article 32 must have been  created, finalized and/or existed in preparation of or in 
the lead up to  the conclusion of the treaty. 
7.100  With respect to the date or period during which the "conclusion" of the treaty at issue in this 
case (i.e. the EC Schedule) took place, the Panel notes that the Uruguay Round negotiations concluded on 15 December 1993.  Indeed, the minutes of the Thirty Sixth Meeting of The Trade 
Negotiations Committee of 15 December 1993 expr essly state that: "The Trade Negotiations 
Committee [at the meeting of 15 December 1993] fo rmally adopted the Fi nal Act of the Uruguay 
Round Negotiations in document MTN/FA".
145  The verification process of the results of those 
negotiations took place from 15 February until 25 Marc h of 1994.  On 15 April 1994, the Final Act 
was signed and it was at that time that schedules, the subject of negotiations during the Uruguay Round, were annexed to the Marrakesh Protocol.
146  The Final Act came into force on 1 January 
1995.147 
7.101  In our view, the process of authentication or verification of treaties forms an important part of 
the conclusion process.  In particular, it allows signatories to verify and ensure that the common 
intentions have been properly reflected in the terms of the relevant treaty.148  If we were to find that 
                                                      
144 The Panel notes that this view appears to be supported by a number of leading international law 
commentators.  Ian Sinclair states that: "The ordinary meaning of a treaty provision should in principle be the meaning which would be attributed to it at the time of the conclusion of the treaty ... termed the 'principle of 
contemporaneity' requiring that 'the terms of a treaty mu st be interpreted according to the meaning which they 
possessed, or which would have been attributed to them, and in the light of current linguistic usage, at the time when the treaty was originally concluded'": Ian Sinclair, The Vienna Convention on the Law of Treaties , 
Manchester University Press, 2
nd edition (1984) p. 124 quoting Fitzmaurice in 33 BYIL  (1957), p. 212.  Mustafa 
Yasseen states that "Unless the treaty re veals a different intention, the ordinary meaning must be that of the time 
of conclusion of the treaty.":  Mustafa Yasseen, "L'int erprétation des Traités d'après la Convention de Vienne 
sur le Droit des Traités" in Recueil des Cours de l'Académie de Droit International , (1974) Vol. III, p. 26, 
para. 7.  The Panel is aware that there is WTO jurisprudence to suggest that an "evolutionary" approach to treaty interpretation is required in some cases to take account of  changing factual circumstan ces.  In particular, in the 
case of US – Shrimp , in interpreting Article XX(g) of the GATT 19 94, the Appellate Body stated that:  "From 
the perspective embodied in the preamble of the WTO Agreement, we note that the generic term 'natural resources' in Article XX(g) is not 'static ' in its content or reference but is rather 'by definition, evolutionary'." 
Appellate Body Report, US – Shrimp , para. 130.  However, none of the parties to this dispute have advocated 
such an "evolutionary" approach for the EC concession in question. 
145 MTN.TNC/40 contained in Exhibit EC-28. 
146 The Marrakesh Protocol is contained in Exhibit BRA-5. 
147 W/Let/1. 
148 In their book on public international law, Nguy en Quoc Dinh, Patrick Daillier and Alain Pellet state 
that:  "The adoption of the text of the treaty marks the en d of the drafting stage.  From an intellectual standpoint, 
adoption can be broken down into two distinct operations:  deciding on the text – i.e. the negotiations have come 
to an end and the negotiators consider that they have produced a text which,  on the face of it,  appears acceptable 
– and authentication, a procedure which consists in declaring that the text that has been drafted corresponds to 
the intention of the negotiators and that they consider it de finitive.  In principle, authenticated text is no longer 
subject to amendment."  Nguyen Quoc Dinh, Patrick Daillier and Alain Pellet, Droit International Public , 
Librairie Générale de Droit et de Jurisprudence, 3rd edition (1987) p. 124.  WT/DS269/R 
 Page 43 
 
 
GATT schedules were concluded before the verifica tion process took place, this would undermine the 
important role that the verification process is aimed at playing in the conclusion process.  Therefore, 
in the context of the present case, given that ther e was a possibility for verification and modification 
of schedules during the verification period to ensure that they reflected the negotiated results and, 
therefore, the common intentions of WTO Member s, the Panel finds that the EC Schedule was 
concluded following expiration of th e verification process.  More specifically, we consider that the 
EC Schedule was "concluded" when the Final Act was signed and when the Uruguay Round 
schedules were annexed to the Marra kesh Protocol on 15 April 1994.149 
7.102  Therefore, we will ascertain the ordinary m eaning of the concession contained in heading 
02.10 of the EC Schedule as at 15 April 1994.  This date will also serve as the reference point for our 
consideration under Articles 31 and 32 of the Vienna Convention  of other sources for the 
interpretation of the concession contained in heading 02.10 of the EC Schedule. 
7.103  Regarding the European Communities' argument th at the date for interpretation of the EC 
Schedule is the date of establishment of the Panel under Article 31 of the Vienna Convention , we note 
that the European Communities refers to Article 3.2150 and Article 11151 of the DSU.  However, we 
find no support in either of those Articles for the vi ew that the date for interpretation of a WTO treaty 
obligation should be the date of establishment of a pane l.  With respect to the EC's argument that the 
date for interpretation of EC law as part of the "circumstances of the conclusion" of the EC Schedule 
under Article 32 of the Vienna Convention  is 1 September 1986152, we understand the European 
Communities to mean that events, acts or other inst ruments that may be considered as "circumstances 
of conclusion" under Article 32 of the Vienna Convention  must be considered as at 1 September 1986.  
This argument concerns the temporal scope of the meaning of the term "circumstances of conclusion" 
under Article 32 of the Vienna Convention  and is dealt with belo w in paragraphs 7.342 et seq . 
3. Application of the Vienna Convention  to the EC Schedule 
(a) Ordinary meaning: Article 31(1) of the Vienna Convention  
7.104  The Panel recalls that the concession we are re quired to interpret for the purposes of this 
dispute – namely, the concession contained in subhe ading 0210.90.20 of th e EC Schedule – provides 
as follows: 
"Meat and edible meat offal, salted, in br ine, dried, smoked; edible flours and meals 
of meat or meat offal 
- Other, including edible flours and meals of meat or meat offal: -- Meat: 
                                                     
 
149 We note that this conclusion appears to be supported by a statement made by the Appellate Body in 
US – Shrimp  to the effect that it was in 1994 (and, therefore, no t in 1993) that the intentions of signatories to the 
WTO Agreement had to be ascertained to determine the m eaning to be ascribed to Article XX(g) of the GATT 
1994.  Appellate Body Report, US – Shrimp , para. 129. 
150 Article 3.2 of the DSU provides that:  "The di spute settlement system of the WTO is a central 
element in providing security and predictability to the multilateral trading system.  The Members recognize that 
it serves to preserve the rights and obligations of Me mbers under the covered agreements, and to clarify the 
existing provisions of those agreem ents in accordance with  customary rules of in terpretation of public 
international law.  Recommendations and rulings of the DSB cannot add to or diminish the rights and 
obligations provided in the covered agreements." 
151 Article 11 of the DSU is set out in para. 7.55 above. 
152 In relation to this point, the European Communities' arguments are set out in further detail in 
paragraph 7.337 below WT/DS269/R 
Page 44  
 
--- Other" 
7.105  The Panel notes that our starting point in dete rmining the ordinary meaning of the concession 
contained in heading 02.10 of the EC Schedule is to ascertain the meaning of the terms contained in 
that concession.  While dictionaries are the primary source for determination of the ordinary meaning 
of treaty terms, we consider it necessary in this case to test the appropriateness of those dictionary 
definitions against the factual context in which the concession in question exists and is being 
applied.
153  To be clear, when we refer to factual  context, this is distinct from legal  context within the 
meaning of Article 31(2) of the Vienna Convention .  The factual context could include, for example, 
aspects associated with the physical characteristics of the products at issue and those that are known 
to be covered by the concession in question in this dispute.  The purpose for taking these aspects into 
account is to test any claim of ordinary meaning by the parties against the relevant factual setting to 
ensure that the ordinary meaning that is being c onsidered corresponds to the reality of the factual 
context at the relevant point in time. 
(i) Ordinary meaning to be determined of which term(s)? 
Arguments of the parties  
7.106  Brazil  and Thailand  submit that the ordinary meaning of all the terms in heading 02.10 must 
be assessed because what is under examination by the Panel is the scope and meaning of the tariff 
concession of heading 02.10 in the EC Schedule.  Nevertheless, Brazil and Thailand do not consider 
that the result of the interpretative exercise will differ depending upon whether the terms other than 
"salted" in heading 02.10 are assessed as part of  the "ordinary meaning" under Article 31(1) of the 
Vienna Convention  or as "context" under Article 31(2).154 
7.107  The European Communities  takes the view that the terms other than "salted" in heading 
02.10 should be treated as "context" under Article 31(2) of the Vienna Convention  because it is the 
term "salted" that is directly at issue in this case.155 
Analysis by the Panel  
7.108  Since it is the meaning of the term "salted" in the concession contained in heading 02.10 of 
the EC Schedule that is in issue in this dispute, the Panel will seek to ascertain the ordinary meaning 
of that term.  The Panel will consider the remain ing relevant terms in that concession – namely, "in 
brine", "dried" and "smoked" – as context under Article 31(2) of the Vienna Convention .  In this 
regard, we note that the complainants do not consider  that the result of the interpretative exercise will 
differ depending upon whether the terms other than "salted" in h eading 02.10 are assessed as part of 
the ordinary meaning under Article 31(1) of the Vienna Convention  or as context under 
Article 31(2).156 
(ii) Ordinary meaning of the term "salted" in  subheading 0210.90.20 of the EC Schedule 
Arguments of the parties  
7.109  Brazil  and Thailand  refer to a number of dictionary definitions of the term "salted" in an 
effort to shed light on the ordinary meaning of that term.  On the basis of these dictionary definitions, 
                                                      
153 We find support for the view that the factual context should be taken into consideration in the 
writings of a leading international law commentator, who st ates that "[t]he true meaning of a text has to be 
arrived at by taking into account all the consequences which normally and reasonably flow from that text.": Ian 
Sinclair, The Vienna Convention on the Law of Treaties , Manchester University Press, 2nd edition (1984) p. 121. 
154 Brazil's reply to Panel question No. 66; Thailand's reply to Panel question No. 66. 
155 EC's reply to Panel question No. 66. 
156 Brazil's reply to Panel question No. 66; Thailand's reply to Panel question No. 66.  WT/DS269/R 
 Page 45 
 
 
Brazil concludes that the term "salted" is associated  with food to indicate the content of salt, the taste 
and smell, the treatment or whether or not the food has been preserved.157  Brazil and Thailand argue 
that, in essence, the term "salted" refers to m eat that contains or is impregnated with salt.158  Brazil 
also submits that the ordinary meaning of the term "salting" indicates that it is a process that prepares 
meat for different purposes159 and that what distinguishes meat of heading 02.10 from meat of other 
headings of Chapter 2 of the EC Schedule is not  the process of preservation employed but, rather, the 
process of preparation.160  Thailand further submits that it does not consider that the purpose for 
which a product undergoes the process of salting is rele vant to determine the or dinary meaning of the 
term "salted".  Thailand argues that, since the salting of a meat product may be carried out for different purposes, the ordinary meaning of salted must be the description that refers neutrally to the 
most basic feature of the term – that is, that the product contains salt.
161  Brazil and Thailand also 
argue that nothing in the ordinary meaning of the term  "salted" suggests that it is exclusively a process 
used to ensure (long-term) preservation.  They submit th at to interpret the term "salted" as a process to 
ensure (long-term) preservation is to give that term an overly narrow interpretation that is not 
consistent with the ordinary meaning of th e term under heading 02.10 of the EC Schedule.162  On the 
basis of the various dictionary definitions referred to by Brazil and Thailand, they conclude that the 
term "salted" does not have a single meaning an d that, therefore, one cannot conclude from the 
ordinary meaning of the term that salting only relates to preservation, much less to long-term 
preservation.  They submit that, therefore, it is necessary to assess the other means of interpretation 
under the Vienna Convention  in order to arrive at the correct interpretation.163 
7.110  The European Communities  also refers to a number of di ctionary definitions of the term 
"salted" and concludes that the question of whethe r the term "salted" means that a product has been 
preserved by salt or has had its flavour altered by the addition of salt must be resolved through an 
analysis of the "context".164  With respect to the type of salt encompassed by the ordinary meaning of 
the term "salted", the European Communities submit s that it is relatively uncommon for common salt 
alone to be used for the preservation of  products that are commercially traded.165  More specifically, 
the European Communities observes that it knows of no meat that is preserved by the use of common 
salt alone.166 
7.111  The various dictionary definitions of "salted" relied upon by the parties in the context of their 
discussion of the ordinary meaning of the concession  in question are contained in the table set out 
immediately below.167 
                                                      
157 Brazil's first written submission, para. 73. 
158 Brazil's second written submission, paras. 19 and 20; Brazil's oral statement at the second 
substantive meeting. para. 19; Thailand's first written submission, para. 82. 
159 Brazil's oral statement at the fi rst substantive meeting, para. 30. 
160 Brazil's oral statement at the fi rst substantive meeting, para. 44. 
161 Thailand's second written submission, para. 21. 
162 Brazil's first written submission, para. 100; Thailand's first written submission, para. 82. 
163 Brazil's oral statement at the firs t substantive meeting, para. 30; Thailand's oral statement at the first 
substantive meeting, para. 12. 
164 EC's first written submission, para. 122. 
165 EC's reply to Panel question No. 64. 
166 EC's reply to Panel question No. 97. 
167 Brazil's first written submission, para. 72; Brazil' s second written submission, para. 19; Thailand's 
first written submission, para. 68; EC's first written submi ssion, para. 115.  We note that the EC also made 
general references to the Larousse Gastronomique Ency clopaedia (excerpts of which are contained in Exhibit 
EC-3) and to Arnold Bender's Dictionary of Nutrition and Food Technology (excerpts of which are contained in 
Exhibit EC-16). WT/DS269/R 
Page 46  
 
 Brazil Thailand EC 
Dictionaries 
Relied Upon Concise Oxford 
Dictionary (1995), American Heritage College Dictionary (1993) & Merriam Webster's 
Collegiate Dictionary 
(1993) Concise Oxford Dictionary 
(1995)  New Shorter Oxford 
English Dictionary (1996) 
 -Impregnated with, 
containing or tasting of salt; cured or preserved or seasoned with salt; containing or filled with salt; having a salty taste 
or smell; preserved in salt 
or a salt solution -To cure or preserve with salt or brine; season with salt; to add, treat season, 
or sprinkle with salt; or to 
cure or preserve by treating with salt or a salt solution -To treat with a solution 
of salt or a mixture of 
salts -To treat, provide, or season with common salt -Impregnated with, 
containing or tasting of salt -Treated with or stored 
in salt as a preservative; cured or preserved with salt or salt water (brine) -Seasoned with salt -Treated with chemical 
salts 
 
Analysis by the Panel  
7.112  The Panel notes that the verb "to salt" is defi ned as follows in the various dictionaries to 
which the Panel has made reference: 
Dictionaries 
Relied Upon Concise Oxford 
Dictionary (1999) Webster's New 
Encyclopaedic Dictionary 
(1993) New Shorter Oxford 
English Dictionary 
(1993) 
 -Season or to preserve 
with salt -Make piquant or more interesting -To treat, flavour or supply 
with salt -To preserve (food) with salt -To add flavour or zest -Treat with or store in 
salt as a preservative; cure or preserve (esp. meat or fish) with salt or salt water (brine) 
-Season with salt 
-Flavour as with salt, make biting, piquant, or less bland 
 
7.113  The dictionary definitions of the verb "to salt"  referred to by the parties and by the Panel 
indicate to us that this term encompasses a range of meanings, including to season, to add salt, to  WT/DS269/R 
 Page 47 
 
 
flavour with salt, to treat, to cure or to preserve.168  The dictionary definitions also suggest that the 
ordinary meaning of the term "salted" is not necessarily limited to salting with common salt (NaCl). 
7.114  Regarding the question of whether salting concer ns "preparation" processes as submitted by 
the complainants or, rather, "preservation" processes  as submitted by the European Communities, we 
note that "to preserve" is defined, inter alia , as "to keep from or prevent decay or decomposition" or 
as "to treat or prepare  food for future use by boiling with sugar, salting, pickling or canning".169  The 
term "to prepare" is defined, inter alia , as "to put together or make by combining various elements or 
ingredients" or "to make ready for use or consid eration; make (food) ready for cooking or eating".170  
In the Panel's view, the dictionary definitions of  the term "salted" indicate that salting includes 
"preservation" processes given the express reference to "preservation" in those definitions.  Further, it 
is our view that "salting" also includes "preparati on" processes given that, for example, seasoning and 
flavouring with salt, both of which are referred to in  the dictionary definitions  for the term "salted", 
fall within the scope of the defi nition of "preparation" processes. 
7.115  We see no reference in the dictionary definitions  for the verb "to salt" to the amount of salt 
that must be added in order for a product to qua lify as "salted".  With respect to the reference to 
"preservation" in the various dictionary definitions for "salted", we note that there is no reference to 
the length of time for which a product must be pr eserved in order for that product to qualify as 
"salted". 
7.116  On the basis of the dictionary definitions referre d to by the parties and by the Panel, the Panel 
concludes that the ordinary meaning of the term "s alted" includes to season, to add salt, to flavour 
with salt, to treat, to cure or to preserve.  In  our view, the ordinary meaning is broader than 
"preservation".  The ordinary meaning of the term "salted" is not necessarily limited to salting with 
common salt (NaCl). 
(iii) Factual context for the consideration of the ordinary meaning 
7.117  As noted above in paragraph 7.105, to complete our analysis of the ordinary meaning of the 
concession contained in heading 02.10 of the EC Sc hedule, the Panel will also consider the factual 
context for the term "salted" to test the appropr iateness of our conclusions regarding the ordinary 
meaning of that term.171 
                                                      
168 We note that, in a response to a question from the Panel, the WCO stated that, with regard to 
lexicographic definitions for the products at issue in this case, the Concise Oxford Dictionary (2001) describes 
the term "salted" as to "season or preserve with salt": WCO's reply to Panel question No. 1 to the WCO. 
169 More specifically, the term "preserve" is defined as  "prepare (fruit, meat, etc.) by boiling with sugar, 
salting, or pickling to prevent decomposition or fermentation; treat (esp. food) to prevent these processes; 
prepare (food) for future use, as by  canning or salting; to prevent (organ ic bodies) from decay ing or spoiling" 
(American Heritage College Dictionary , 1993, p. 1082); "maintain in its original or existing state; treat (food) to 
prevent its decomposition" ( Concise Oxford Dictionary , 1999, p. 1131); "to keep from decomposition; to 
prepare (as by canning or pickling) for future use" ( Webster's New Encyclopaedic Dictionary , 1993, p.797); 
"keep from decay; prepare (fruit, met,  etc.) by boiling with sugar, salting or pickling to prevent decomposition 
or fermentation; treat (esp. food) to prevent these processes" ( The New Shorter Oxford English Dictionary , 
1993, p. 2342). 
170 More specifically, the term "to prepare" is defined as "to put together or make by combining various 
elements or ingredients" ( American Heritage College Dictionary , 1993, p. 1080.); "to make ready for use or 
consideration; make (food) ready for cooking or eating" ( Concise Oxford Dictionary , 1999, p. 1129); "to make 
or get ready; to put together" ( Webster's New Encyclopaedic Dictionary , 1993, p. 796); and "make ready (food, 
a meal) for eating; cook or assemble in eatable form and serve" ( The New Shorter Oxford English Dictionary, 
1993, p. 2337). 
171 The Panel notes that, since it is tasked to ascertain the ordinary meaning of heading 02.10 of the 
EC Schedule at the time the Schedule was concluded – i.e. on 15 April 1994 – we will not consider factual 
context that clearly did not exist at that point in time. WT/DS269/R 
Page 48  
 
Arguments of the parties
 
Products covered by the concession contained in heading 02.10 
7.118  The European Communities  points to the products listed in Exhibit EC-5 and submits that 
those products together with bacon are representativ e examples of products covered by heading 02.10.  
The European Communities submits th at, in respect of the various meats indicated in Exhibit EC-5 
and in respect of bacon, salting w ith common salt does not provide the sole basis for preservation.  In 
this regard, the European Communities notes that it knows of no meat that is preserved by the use of 
common salt alone.172  The European Communities further subm its that all existing practice suggests 
that products covered by heading 02.10 must be pr epared in such a way that places the meat in a 
recognizably different state, normall y one identified by a specific name.173  The European 
Communities explains that by "recognizably different",  it means meat that is obviously different from 
raw meat in appearance and texture.  The Eur opean Communities submits that a customs officer 
examining the goods would have no difficulty recognizing them for what they are.174  The European 
Communities argues that, while the meats classifiable  under heading 02.10 share this characteristic 
(for example, they all have speci al names like "bacon" or "Parma ham"), frozen chicken cuts with 
added salt do not constitute a product that is instan tly recognizable in the same way.  Nor do they 
have a distinguishing name.175 
7.119  Thailand  submits that Exhibit EC-5 is entitled a " Non-Exhaustive  List of Traditional 
European  salted and dried/smoked meat pr oducts."  Thailand argues that this would imply that there 
are other products not contained in this list that could, neve rtheless, fall under heading 02.10.176  
Further, Thailand argues that the basis for the Eu ropean Communities' assertion that the criterion of 
preparation must result in the prepared meat being given a different name in order to be classified 
under heading 02.10 is unclear.177 
7.120  Brazil  points to a list from the WCO on-line datab ase of products traditionally traded under 
the 1996 version of subheading 0210.90 of the HS.178  Brazil and Thailand submit that none of the 
listed salted meats have general or specific names.179  Brazil also notes that the list includes products 
that do not meet the European Communities' criter ion that the preparation must place meat in a 
"recognizably different state", such as salted edible offal of reindeer, salted meat of beavers, salted 
frogs' legs, salted meat of pigeons a nd salted meat of hares.  Brazil and Thailand also note that that list 
includes "salted meat of chicken" and "salted meat of poultry".180 
Flavour, texture, other physical properties 
7.121  Brazil  and Thailand  submit that salt has the following effects on meat: (a) the meat retains 
more water (i.e. drip losses are reduced), which serv es to improve the quality and texture of the meat; 
(b) the salt dissolves proteins, which contributes to th e binding of meat particles in order to emulsify 
the fat, reduce moisture loss during cooking and make  meat juicier; (c) the meat possesses a distinct, 
salty flavour that limits the end-use of the produc t because of health concerns and consumer taste-
tolerance; (d) the meat is preserved when the sa lt content ranges from 9% - 11% and above but a salt 
                                                      
172 EC's reply to Panel question No. 97. 
173 EC's second written submission, para. 35. 
174 EC's reply to Panel question No. 100. 
175 EC's second written submission, para. 35; EC's reply to Panel question No. 100. 
176 Thailand's comments on the EC's reply to Panel question No. 100. 
177 Thailand's oral statement at the se cond substantive meeting, para. 15. 
178 Excerpted in Exhibit BRA-43. 
179 Brazil's comments on the EC's reply to Panel question No. 100; Thailand's comments on the EC's 
reply to Panel question No. 100. 
180 Brazil's reply to Panel question No. 119; Thailand's comments on the EC's reply to Panel question 
No. 100.  WT/DS269/R 
 Page 49 
 
 
content of 1.2% – 3% may also have some preserva tive effect; and (e) the meat develops rancidity 
more rapidly than cuts without salt because s odium from salt favours the oxidation of fats.181 
7.122  In response, the European Communities  submits that, while the addition of salt to the 
products at issue might arguably have an effect on ta ste, it cannot be considered that such addition is 
made with the objective of changing the taste since the taste of the products at issue is changed to 
conform to the manufacturers' requirements upon further processing which is performed in the 
European Communities.182  As for the assertion that the additi on of salt reduces moisture loss during 
cooking, the European Communities notes that the cooking is done by the EC processing industry 
once the products at issue have been imported in to the European Communities.  Therefore, the 
European Communities questions why the addition of salt before export gives the product any 
distinguishing characteristics.183  Further, the European Communiti es submits that the issue of "drip 
loss" does not concern the loss of water (which ca n be replaced in the course of further processing) 
but of protein when thawing and, therefore, only arises in respect of frozen food.  The European Communities argues that, moreover, low levels (0.5%) of salt are regarded in the industry as sufficient 
for the purposes of preventing "drip loss".  Accordin g to the European Communities, there is no need 
for a salt content of 1.2% or above.  Therefore, even  if drip loss were relevant, it does not require that 
the salt content be greater than 0.5%.
184 
7.123  Thailand  responds that, while the "drip loss" effect  of salt is an important technical reason 
why EC importers of the products at issue prefer salted chicken, the amount of salt that may or may 
not be required for "drip loss" to be prevented is an ex post facto  consideration and is not relevant to 
the issue before the Panel, namely, the scope of the European Communities' tariff concession 
contained in heading 02.10 of the EC Schedule at the time of the conclusion of the WTO 
Agreement.185 
7.124  Brazil  submits that the European Communities' alle gations that 0.5% of salt is regarded by 
the industry as sufficient to prevent drip loss is uns ubstantiated by evidence.  Brazil argues that it, on 
the other hand, has provided letters from European companies attesting that salted meat exported from 
Brazil to the European Communities – that is, meat  impregnated with a minimum of 1.2% salt – is 
favoured over unsalted chicken precisely because it re duces drip loss.  Brazil argues that technical 
literature submitted by it explains that , up to a certain limit, the more salt one adds to meat, the greater 
the water-holding capacity and the lower the drip loss.186  Brazil submits that, in any event, the fact 
that the impregnation of salted chicken meat with  1.2% salt reduces drip loss is a commercial reason 
why there is a demand for the product in the European Communities.187 
Desalting 
7.125  Thailand  submits that, unlike the chilling or freezing of chicken, which, according to 
Thailand, may easily be reversed, the salting of ch icken deeply and homogeneously in all parts cannot 
be thoroughly removed.  Thailand submits that once a product is salted, it cannot be completely 
                                                      
181 Brazil's first written submission, paras. 3, 84-87, 102, Brazil's oral statement at the first substantive 
meeting, para. 26; Brazil's reply to Panel question No . 14(b); Brazil's second written submission, para. 15; 
Brazils' oral statement at the second substantive meeting, para. 2 referring to Exhibits BRA-16 and BRA-30; 
Brazil's replies to questions posed by the EC following the second substantive meeting; Thailand's first written 
submission, paras. 53, 77 and 128 and Thailand's reply to Panel question No. 14(b) referring to Exhibits 
THA-15 and THA-16. 
182 EC's first written submission, para. 49. 
183 EC's first written submission, para. 22. 
184 EC's second written submission, paras. 14 and 36. 
185 Thailand's reply to Panel question No. 86. 
186 Brazil's reply to Panel question No. 86. 
187 Brazil's reply to Panel question No. 86. WT/DS269/R 
Page 50  
 
unsalted by immersion in water.  The essential charac ter of the chicken product is changed as a result 
of the salting.
188 
7.126  Brazil  acknowledges that some desalting is possible.   However, Brazil su bmits that Brazilian 
salted chicken cuts, which are deeply and evenly im pregnated with a salt cont ent of over 1.2%, cannot 
be completely desalted to the point that the chicken returns to the state of being unsalted chicken with 
the same basic characteristics and use that existed prior to salting.  According to Brazil, once deeply 
and evenly impregnated with salt, chicken meat wi ll always present itself as salted meat, even after 
desalting.  Brazil adds that, because desalting entails th e addition of water to meat for a certain period, 
when part of the salt is removed by the water, certain important muscle proteins, vitamins and 
minerals are also removed.  As a result, the desalting process depletes meat of fundamental 
characteristics and sometimes even leaves it inadequa te to be used as raw material for the processing 
of meat products.  Further, Brazil submits that Br azilian producers and exporte rs would have raised 
the salt content in meat so as to meet the Europ ean Communities' new definition of "salted meat" of 
heading 02.10 if salted chicken meat exported from Br azil could be desalted.  Brazil submits that they 
have not done so because the salting process carried  out by Brazilian producers irreversibly renders 
the product salted, and, therefore, different from the product without salt.189 
7.127  The European Communities  submits that, as a matter of theory, common salt (sodium 
chloride, NaCl) that has been added to meat can  be entirely removed through a process of osmosis.190  
The European Communities also subm its that press reports regarding the products at issue suggest 
that salt can be removed from a salted product.191  Nevertheless, the European Communities 
acknowledges that such removal would require sophi sticated techniques and would be expensive.  
The European Communities accepts that, therefor e, desalting does not occur commercially.  The 
European Communities also notes that the preservation of meat by "salting" often involves the use not only of sodium chloride, but also of sodium n itrate and nitrite.  The European Communities also 
acknowledges that this process cannot be reversed a lthough residual sodium chloride can be reduced 
by osmosis.
192  The European Communities submits that, ne vertheless, the fact that, as a matter of 
theory, it is not commercially viable to desalt a pr oduct, does not imply that the products at issue are 
not desalted.  According to the European Communi ties, since those products are used for processed 
chicken products that contain a substantial salt content, it will rarely be necessary, as a matter of 
commercial practice, to completely desalt th em.  The European Communities submits that, 
nevertheless, the salt content is reduced either by tumbling with water or by tumbling with other 
unsalted products.193  In addition to the foregoing, the European Communities acknowledges that the 
process of preservation caused by drying or smoki ng products cannot be re versed because these 
processes bring about irreversible chemi cal and physical changes in the meat.194 
7.128  Brazil  argues that the possibility of desalting the products at issue is irrelevant for the 
purposes of product classification at the border.  According to Brazil, the customs authority is charged with the task of classifying a product based on its objective characteristics at the time it crosses the 
                                                     
 
188 Thailand's first written submission, paras. 77, 79 and 128; Thailand's reply to Panel question No. 61. 
189 Brazil's first written submission, para. 83; Brazil's oral statement at the first substantive meeting, 
paras. 14-15; Brazil's reply to Panel question No. 61; Br azil's second written submission, paras. 6, 11-14.  See 
also Exhibit BRA-36 and Exhibit BRA-38. 
190 EC's reply to Panel question No. 37. 
191 EC's first written submission, para. 14 referring to Exhibit EC-1. 
192 EC's reply to Panel question No. 37. 
193 EC's reply to Panel question No. 37; EC's oral statement at the second substantive meeting, para. 8. 
194 EC's reply to Panel question No. 36.  WT/DS269/R 
 Page 51 
 
 
border, not based on whether the product is subse quently further transformed nor on the use each 
particular importer will make of the product.195 
Preparation or preservation? 
7.129  Brazil  argues that, for the purposes of heading 02.10, salt is used to "prepare" meat rather 
than to "preserve" it.196 
7.130  In response, the European Communities  submits that the addition of salt for the purposes of 
heading 02.10 is for preservation.197  The European Communities submits that preservation of 
foodstuffs does not necessarily imply that an object must be maintained in its existing condition.  
Instead, it implies that the process of spoilage and d ecay is prevented or inhibited.  This may or may 
not involve changes to the object that has been preserved.198  The European Communities notes that 
salting a product reduces the water ac tivity and, hence, reduces the ability  of microbes to proliferate.  
The European Communities also  submits that the panel on Argentina – Hides and Leather recognized 
that salting is a means of preservation of organic bodies.199 
7.131  Brazil  submits that scientific literature establishes that, in order for meat to be properly 
preserved by salting alone, it should contain 9% – 11% of salt.200 
7.132  In response, the European Communities  submits that scientific literature cited by the 
complainants makes it clear that salting can pres erve a meat product on its own (i.e. without the 
additional need for freezing).201  The European Communities relies upon an expert's opinion to argue 
that a minimum 7% of common salt is necessary to preserve meat on its own.202  The European 
Communities submits that, in any event, there is no dispute between the parties that a salt content of 
1.2% – 3% is insufficient to ensure preservation.203  The European Communities further notes that, 
while the shelf-life of preserved meats may be extende d by cooling or freezing such meats, there is no 
suggestion that these products need to be preserved by freezing.204 
7.133  Thailand  submits that there is an apparent in consistency between, on the one hand, the 
European Communities' expert opinion that a mini mum 7% salt content is necessary to preserve meat 
and, on the other hand, that provided in the Gausepohl  case205 by the Federal Office for Meat 
Research, which stated that 4% - 5% salt was necessary to preserve meat.  Thailand submits that, in 
any event, the European Communities has stated that meat salted at the level of 3% or more would 
have no commercial market in the European Communities.206  Therefore, the European Communities 
is requiring that meat be salted for the purposes of  preservation at such high levels that the meat 
would be inedible and unsuitable for human consump tion.  Thailand notes that the Note to Chapter 2 
to the HS, upon which the EC's CN is based, states that "[t]his chapter does not cover … products of 
the kinds described in headings 0201 to 0208 or 02 10, unfit or unsuitable for human consumption."  
Thailand submits that meat salted at the level of 7% would be "unfit or unsuitable for human 
                                                      
195 Brazil's oral statement at the firs t substantive meeting, para. 16.  Brazil notes that the EC uses the 
"objective characteristics" criterion when classifying products at the border.  In this regard, Brazil refers to 
Exhibit EC-12, page 969, Exhibit THA-18, page 1276 and Exhibit BRA-27. 
196 Brazil's first written submission, paras. 75, 90-103. 
197 EC's first written submission, para. 50; EC's second written submission, para. 23. 
198 EC's first written submission, para. 35. 
199 EC's first written submission, para. 37. 
200 Brazil's first written submission, para. 103. 
201 EC's first written submission, para. 9. 
202 EC's reply to Panel question No. 97 referring to Exhibit EC-32. 
203 EC's reply to Panel question No. 26 referrin g to Brazil's first writte n submission, para. 85. 
204 EC's reply to Panel question No. 49. 
205 This case is discussed below in para. 7.372 et seq . 
206 Thailand referring to EC's reply to Panel question No. 27. WT/DS269/R 
Page 52  
 
consumption."  Therefore, according to Thailand, the European Communities is seeking to establish a 
criterion for "salted meat" (i.e., 7% salt content) th at, if applied, would render the product ineligible 
for coverage under Chapter 2.
207 
7.134  Brazil  acknowledges that it is possible for some  meat, prepared by salting, drying or 
smoking, to also be preserved by those processes.208  However, Brazil notes that, in the case of some 
products that the European Communities categori zes under heading 02.10, the relevant processes are 
insufficient to inhibit outgrowth of certain poisono us organisms and, therefore, freezing from the time 
of production until cooking and/or consumption is necessary.209 
7.135  Similarly, Thailand  submits that some salted products  require an additional means of 
preservation.  Thailand points to  Exhibits THA-25(a), THA-25(b) and THA-25(c), which include 
packages of parma ham, prosciutto and jamón serrano,  to illustrate that they must be conserved at a 
temperature below that of ambient temperature, namely at a chilled level.210 
7.136  In response, the European Communities indicates that the products referred to by Thailand 
would be classified by the European Communities under heading 02.10 but disputes that these types 
of products require add itional means of preservation.211  The European Communities submits that, in 
any event, the possibility of appl ying the means to ensure further preservation to meat covered by 
heading 02.10 would not affect the classification of that meat.212  Further, according to the European 
Communities, the fact that the useful life of meat s preserved by salting can be extended by the use of 
chilling or freezing does not mean that they have not been preserved.213  In this regard, the European 
Communities submits that the complainants' argume nts appear to be premised on the notion that 
"preservation" means protection against deteri oration and decay for an indefinite period.214  I n  
addition, the European Communities submits that pr eserved meat is often sliced and packaged in 
preparation for retail sale and that this may cont aminate the meat.  The European Communities notes 
that it is not arguing that meat retains the same qualities following such processing.  The European 
Communities submits, however, that such meat has been preserved by salting, and customs authorities 
would have no difficulties recognizing it as such.  Finally, the European Communities submits that the 
use of additional preservation techniques for meat falling within the scope of heading 02.10 is 
explicitly envisaged in the HS E xplanatory Notes to Chapter 2 which provide that vacuum packing 
(Modified Atmosphere Packing) and the applicati on of this additional preservation technique does not 
alter the classification of a product under Chapter 2.215 
7.137  Regarding the question of for how long a product should be preserved in order for it to be 
covered by heading 02.10, the Eur opean Communities submits that the shelf life of preserved meats is 
many months at ambient temperatures.216  The European Communities submits that meats that are 
preserved for several months are clearly preserved for the purposes of heading 02.10.217 
                                                      
207 Thailand's comments on the EC's reply to Panel question No. 97. 
208 Brazil's oral statement at the fi rst substantive meeting, para. 40. 
209 Brazil's oral statement at the first substantive meeting, para. 42; Brazil's reply to Panel question 
No. 4. 
210 Thailand's oral statement at the first substantive meeting, para. 19; Thailand's second written 
submission, para. 37. 
211 EC's reply to Panel question No. 96 referring to Exhibit EC-31 and Exhibit EC-32. 
212 EC's second written submission, para. 30. 
213 EC's oral statement at the second substantive meeting, para. 9. 
214 EC's second written submission, para. 41. 
215 EC's oral statement at the second substantive m eeting, para. 9; EC's replies to Panel question 
Nos. 96 and 98. 
216 EC's replies to Panel question Nos. 49 and 96. 
217 EC's reply to Panel question No. 102.  WT/DS269/R 
 Page 53 
 
 
7.138  In response, Brazil  submits that, while the European Communities appears to have defined 
long-term preservation for the purposes of heading 02 .10 as many or several months, the Annex to EC 
Regulation No. 1223/2002 indicates preservation for one year.  Brazil also notes that recital (4) of EC Regulation No. 1871/2003 suggests preservation fo r a period other than transportation.  In Gausepohl , 
long-term preservation was described as "preserva tion considerably exceeding the time required for 
transportation".
218  Brazil notes that, in that case, the period of preservation was two days.  Brazil also 
notes that, in Exhibit EC-32, the European Communitie s' expert has asserted that salted chicken meat 
is preserved for a few days without refrigeration.219  Brazil argues that preservation is not an absolute 
and unequivocal concept.  According to Brazil,  a product may undergo a process that allows 
preservation for entirely different time spans: from a few hours to indefinite duration.220  In addition, 
Brazil submits that the expert opinion submitted by the European Communities in Exhibit EC-32 
should be disregarded because, inter alia , it was provided at a late st age of the proceedings, which 
made it impossible for the complainants to fully address the information pr esented in that Exhibit.221 
7.139  The European Communities  submits that defining heading 02.10 by reference to the 
criterion of preservation is straightforward; the varie ties of meat that would qualify according to this 
criterion are well-established and easily identifiable.   The European Communities submits that, in 
contrast, the vague criterion of "some salting", or "some drying", or "some smoking" implicit in the 
complainants' submissions would create inevitable problems of defining the borderline – that is, the degree of salting etc. that would be sufficient to qualify a product under heading 02.10.  Further, even if a borderline could be defined, it would be impossible to say whether it had been achieved in a particular case.
222  The European Communities also submits that there are no national rules specifying 
percentages of salt etc. for the purposes of headi ng 02.10 and there are no subheadings in national 
tariffs that rely on such criteria.  Nor are there decisions of customs authorities providing individual 
importers with rulings on such questions.223 
Analysis by the Panel  
Products covered by the concession contained in heading 02.10 
7.140  The Panel notes that the dictionary definitions to  which it referred in determining the ordinary 
meaning of the term "salted" did not indicate the particular types of products that would necessarily qualify as "salted".  The European Communities app ears to suggest that the category of "salted 
products" is a closed list including those referre d to in the European Communities' Exhibit EC-5
224, 
products that are "similar" to those contained in Exhibit EC-5 and bacon.225  However, we have seen 
no evidence to indicate that salted products covered by the concession contained in heading 02.10 are 
necessarily limited to those identified by the European  Communities.  In this regard, we note that the 
1996 version of subheading 0210.90 of the HS is te xtually similar to subheading 0210.90 of the EC 
Schedule.  The WCO on-line database of products  traditionally traded under the 1996 version of 
                                                      
218 Brazil's reply to Panel question No. 118. 
219 Brazil's comments on the EC's reply to Panel question No. 97. 
220 Brazil's reply to Panel question No. 4. 
221 Brazil's comments on the EC's reply to Panel question No. 97. 
222 EC's oral statement at the second substantive meeting, para. 36. 
223 EC's second written submission, para. 122. 
224 Exhibit EC-5, identified by the European Co mmunities as a "Non-exhaus tive list of Traditional 
European salted and dried/smoked meat products", refers to bünder fleisch/viande de grisons, parma ham, san 
daniele, prosciutto, jamon serrano, jamon iberico, bayonne ham, südtiroler speck and schwarzwälder schinken. 
225 EC's reply to Panel question No. 97.  In question 97, the European Communities was asked to 
indicate whether or not Exhibit EC-5 contained an exhaustive list of all products traditionally traded under 
heading 02.10.  The European Communities was also asked to identify any other products that are currently traded under heading 02.10 in the event that Exhibit EC-5 did not contain an exhaustive list.  In response to this 
question, the only products referred to by the Europe an Communities were those listed in Exhibit EC-5, 
products that are "similar" to those contained in Exhibit EC-5 and bacon. WT/DS269/R 
Page 54  
 
subheading 0210.90 of the HS
226 includes "salted meat of chicken" and "salted meat of poultry".  
Therefore, the Panel concludes that chicken or pou ltry to which salt has been added is not necessarily 
precluded from coverage under th e concession contained in head ing 02.10 of the EC Schedule.227 
Flavour, texture, other physical properties 
7.141  In the Panel's view, the factual context indicat es that, in order for a product to be "salted" 
within the meaning of the concession contained in h eading 02.10 of the EC Schedule, the character of 
that product must have been altered through the add ition of salt as compared to that product's fresh 
state prior to the addition of salt.  In particular, the evidence before us indicates that the addition of 
salt to meat changes the meat's physical characteri stics.  For example, the literature indicates that, 
inter alia , salt enhances flavour228; reduces the aqueous or  water level of food229; contributes to the 
solubilization of muscle proteins and the emulsification of fats230; eliminates water-soluble 
ingredients, such as body minerals, vitamins and proteins231; reduces the solubility of oxygen in 
water232; acts as a pro-oxidant of fats233; and favours the development of rancidity234. 
7.142  We also note that the European Communities appears to accept that salt changes certain 
physical properties of the meat to which the sa lt has been added.  For example, the European 
Communities does not appear to dispute that the a ddition of salt to meat changes its taste.  The 
European Communities does, however, argue that the purpose of the addition of salt to the products at 
issue is not to change their taste.235  In our view, the fact that the purpose  for the addition of salt may 
not have been to change the physical properties (e .g. taste) of the meat to which the salt has been 
added does not detract from the conclusion that su ch physical properties have been changed. 
7.143  In addition, the European Communities does not appear to dispute that moisture loss is 
reduced through the addition of salt.  However, it argu es that this moisture loss is the concern of the 
EC processing industry importing the products at issue.236  Again, we do not consider that this factor 
undermines the conclusion that salt changes the phys ical properties of meat to which salt has been 
                                                      
226 Excerpted in Exhibit BRA-43. 
227 The Panel notes that there is nothing in the WCO response to Panel question No. 10 to the WCO 
(relating to the kinds of products the WCO Secretariat considers would clearly qualify under heading 02.10 of the HS, which is textually identical to heading 02.10 of the EC Schedule) to indicate that such products would 
be excluded from coverage under heading 02.10 of the HS. 
228 Exhibit BRA-16: Lück, E. & Jager, M., Chemical Food Preservation , 2nd Edition, p. 86; Pardi, Dos 
Santos, De Souza, Pardi, Meat Science, Technology and Hygiene , Vol. II, p. 721; Silva, João, Topics on Food 
Technology , p. 181; Montana Meat Processors Convention, Ingredients in Processed Meat Products , April 27 - 
29 2001, p. 11. Exhibit THA-15. 
229 Exhibit BRA-16: Evangelista, José, Food Technology , 2nd Edition, p. 409; Lück, E. & Jager, M., 
Chemical Food Preservation , 2nd Edition, p. 80.  Exhibit THA-15. 
230 Exhibit BRA-16: Pardi, Dos Santos, De Souza, Pardi, Meat Science, Technology and Hygiene , 
Vol. II, p. 721; Price, J.F. & Schweigert, B.S., Science of Meat and Meat Products , pp. 420-421; Silva, João, 
Topics on Food Technology , p. 181; Montana Meat Processors Convention, Ingredients in Processed Meat 
Products , April 27 - 29 2001, p. 11. 
231 Exhibit BRA-16: Lück, E. & Jager, M., Chemical Food Preservation , 2nd Edition, p. 86; Price, J.F. 
& Schweigert, B.S., Science of Meat and Meat Products , pp. 380 - 381. 
232 Exhibit BRA-16: Evangelista, José, Food Technology , 2nd Edition, p. 409; Lück, E. & Jager, M., 
Chemical Food Preservation , 2nd Edition, p. 81; Silva, João, Topics on Food Technology , p. 182. 
233 Exhibit BRA-16: Lawrie, R.A., Meat Science , pp. 301 - 302. 
234 Exhibit BRA-16: Price, J.F. & Schweigert, B.S., Science of Meat and Meat Products , pp. 420-421. 
235 EC's first written submission, para. 49. 
236 EC's first written submission, para. 22.  WT/DS269/R 
 Page 55 
 
 
added, for example through its contribution to th e solubilization of muscle proteins and the 
emulsification of fats.237 
7.144  That the character of a product is altered thro ugh the addition of salt is, in our view, also 
confirmed by the fact that desalting such prod ucts would, by the European Communities' own 
admission, require sophisticated techniques and would be expensive.238  The European Communities 
has also stated that desalti ng does not occur commercially.239  We consider that the fact that 
tumbling240 with water or with other unsalted products may reduce the relative salt content by volume 
for a particular product does not detract from the conclusion that the product in question cannot, as a practical matter, be completely desalted. 
7.145  The Panel does not consider it necessary to provid e a comprehensive list of the ways in which 
salt may alter the character of a product.  Nor do we consider it necessary to express a view on the 
extent to which the addition of salt ch anges meats' physical characteristics.
241  In our view, for the 
purposes of our determination of the ordinary meani ng of "salted" in heading 02.10, our main concern 
here is whether salt changes the character of the pr oduct to which the salt has been added.  For the 
reasons outlined in the immediatel y preceding paragraphs, we consider that the answer to this 
question is in the affirmative. 
Preservation 
7.146  The Panel recalls, that in paragraph 7.116 above , we found that the ordinary meaning of the 
term "salted" includes preservation.  The factual info rmation that has been presented to us confirms 
that salt may act as a preservative.242  The Panel further recalls that the term "preserve" has a range of 
meanings, including "maintaining a product in its original or existing state" as well as "preventing a 
product from decomposing".243  The Panel understands from this ra nge of meanings that there is a 
spectrum of degrees to which a product may be preserved.  The information available to us indicates that the preservative effect of salt may differ de pending upon the amount of salt that is added.
244  
                                                      
237 Exhibit BRA-16: Pardi, Dos Santos, De Souza, Pardi, Meat Science, Technology and Hygiene , 
Vol. II, p. 721; Price, J.F. & Schweigert, B.S., Science of Meat and Meat Products , pp. 420-421; Silva, João, 
Topics on Food Technology , p. 181; Montana Meat Processors Convention, Ingredients in Processed Meat 
Products , April 27 - 29 2001, p. 11. 
238 EC's reply to Panel question No. 37. 
239 EC's reply to Panel question No. 37. 
240 Brazil describes the "tumbling" process as the tumbling of chicken cuts that have been manually 
salted in a tumbling barrel: Brazil's reply to Panel ques tion No. 14(a).  Thailand describes the "tumbling" 
process as the mixing of chicken cuts with salted water in a vacuum tumble machine: Thailand's reply to Panel 
question No. 14(a). 
241 For example, we do not consider it necessary to determine how much salt is needed to achieve drip 
loss to the satisfaction of the EC further processing industry. 
242 Exhibit BRA-16: Evangelista, José, Food Technology , 2nd Edition, pp. 408-409; Forrest, Aberle, 
Hedrick, Judge, Merkel, Meat Science Foundations , p. 246; Lawrie, R.A., Meat Science , pp. 303-305; Lück, E. 
& Jager, M., Chemical Food Preservation , 2nd Edition, pp. 77, 84; Pardi, Dos Santos, De Souza, Pardi, Meat 
Science, Technology and Hygiene , Vol. II, pp. 704, 721, 722; Price, J.F. & Schweigert, B.S., Science of Meat 
and Meat Products , pp. 365, 420-421; Silva, João, Topics on Food Technology , p. 181; Montana Meat 
Processors Convention, Ingredients in Processed Meat Products , April 27 - 29 2001, p. 11. 
243 See paragraph 7.114 above, including footnotes thereto. 
244 Exhibit BRA-16: Pardi, Dos Santos, De Souza, Pardi, Meat Science, Technology and Hygiene , 
Vol. II, p. 723; Silva, João, Topics on Food Technology , p. 182.  Mr Silva states that "in sufficiently high 
concentrations, salt inhibits microbial growth by increasing the osmotic pressure of the environment, with the 
consequent reduction of the water activity; low concen trations of salt, between 1.0%-3%, already exert a 
significant antimicrobial action, du e to the reduction in the water activity of the environment.  Low 
concentrations, such as 2.0% inhibit the growth of some  bacteria, while the majority of molds and yeasts are 
capable of growing in salt concentrations close to saturation.  However, for the development of halophilic 
microorganisms salt concentrations higher than 10% are required.  For a good preservation, the maximum WT/DS269/R 
Page 56  
 
Further, different types of meat may require di fferent amounts of salt in order for them to be 
preserved.
245  Finally, the application of the food in question may affect the salt content required for 
its preservation.246  For example, it appears that 2% - 3% salt content is the level usually found in 
commercially processed meat products247 whereas a salt content level of 26.5% eliminates larvae of 
cisticercos bovis  and celulosae .248  In other words, it appears that even small quantities of salt may 
have a preservative effect, although the preservative e ffect is less effective and less long-lasting than 
in cases where greater quantities of salt have been added.249 
7.147  In light of the foregoing, the Panel considers that the amount of salt needed to preserve a 
product will differ depending upon for how long a particular product must be preserved.  As noted 
above in paragraph 7.115, the dic tionary definitions of the term "salted" do not cast any light on for 
how long a product must be preserved in order to be "salted".  More specifically, those definitions do 
not indicate whether this period is to be determin ed by reference to the period of transportation as 
indicated by the ECJ in the Gausepohl  case250 or many or several months as indicated by the European 
Communities during these proceedings251 or for any other period of time.  Therefore, in our view, it is 
difficult to draw any conclusions re garding the amount of salt that must  be added to a product in order 
for it to be "salted" within the ordinary meaning of the concession contained in heading 02.10 of the 
EC Schedule.252 
                                                                                                                                                                     
amount of water in the product should not exceed 55%.  Salt contents between 9% and 10% nearly saturate the 
aqueous phase.  The preservation of products with salt concentrations lower than this value should be made by 
means of refrigeration (cooling)".  In an expert opinion, contained in Exhibit EC-32, Professor Honikel states that "[i]n the raw and chilled state 3% salt is too low to prevent spoilage for more than a few days.  If salt alone 
is used the final salt concentration must be above 7% salt in the product as a whole or above 11% in the water 
part with a water activity of 0.91 and lower". 
245 Exhibit BRA-16: Price, J.F. & Schweigert, B.S., Science of Meat and Meat Products , p. 394. 
246 Exhibit BRA-16: Price, J.F. & Schweigert, B.S., Science of Meat and Meat Products , pp. 420-421.  
The authors state that mature processed products generally contain 3% - 5% of salt whereas fresh processed 
products contain 1.5%-2.0% of salt.  They add that th e great majority of cooked processed products contain 
2%-2.5% of salt. 
247 Exhibit BRA-16: Forrest, Aber le, Hedrick, Judge, Merkel, Meat Science Foundations , p. 246.  The 
authors state that "with respect to today's commercially  processed meat products, salt only exerts a limited 
preserving effect, whereas these products need other methods of preservation in order to have their shelf-life extended".  In addition, Lück, E. & Jager, M. in Chemical Food Preservation , 2
nd Edition contained in Exhibit 
BRA-16 at page 84 state that common salt exerts a good micr obicidal effect at concentrations as low as 1%-3%. 
The authors also state that these relatively small additions reduce water activity sufficiently to prevent the growth of important putrefaction bacteria, such as those in  sausages, hams and salted meats.  Further, Pardi, Dos 
Santos, De Souza, Pardi in Meat Science, Technology and Hygiene , Vol. II contained in Exhibit BRA-16 at 
p. 722 state that salt concentrations of 1%-3% exert a good antimicrobial action. 
248 Exhibit BRA-16: Evangelista, José, Food Technology , 2nd Edition p. 409.  See also Lück, E. & 
Jager, M., Chemical Food Preservation , 2nd Edition, p. 80 contained in Exhibit BRA-16 which indicates that the 
salt content may affect the types of micro organizms that can survive. 
249 We do not consider that these comments are inconsistent with those made by the EC's expert, 
Professor Honikel, which are contained in Exhibit EC-32.  In particular, Professor Honikel states that "[i]n the 
raw and chilled state 3% salt is too low to prevent spoilage for more than a few days."  In other words, Professor 
Honikel appears to accept that 3% salt may prevent spoilage, albeit for a period of only a few days. 
250 Exhibit EC-14: Gausepohl-Fleisch GmbH v Oberfinanzdirektion Hamburg , ECR [1993], I -3047.  
At p. I-3066, para. 11, the ECJ stated that "meat of bovine animals to which a quantity of salt has been added 
merely for the purpose of transportation cannot be regarded as salted for the purposes of heading 0210.  On the 
other hand, salting as a method of preserving meat of bovine animals for a longer period must be applied evenly to all parts of the meat."   The Gausepohl  judgement is discussed in more detail below in paragraph 7.372 et seq . 
251 EC's replies to Panel question Nos. 49 and 96. 
252 Accordingly, the Panel does not consider it necessary  to address Thailand's argument that the EC is 
seeking to establish a salt content for "salted meat" under heading 02.10 (i.e. 7%) that, if applied, would render 
the product ineligible for coverage under Chapter 2: Thailand's comments on the EC's reply to Panel question 
No. 97.  WT/DS269/R 
 Page 57 
 
 
7.148  In fact, on the basis of the ordinary meaning of  the term "salted" in the concession contained 
in heading 02.10 when considered in light of the rele vant factual context, it is the Panel's view that the 
amount of salt added to products qualifying as "salted" under this concession may well vary 
depending upon the meat product in question and the sp ecific application of that product, which will, 
in turn, affect the period for which a product must be preserved.  While the evidence indicates that the 
more salt that is added, the longer the period fo r which the product in question will be preserved253, 
there is nothing to suggest that products preserved by salt for relatively short periods of time are 
precluded from qualifying under the concession containe d in heading 02.10 of the EC Schedule. 
7.149  The variable salt content and period of preserva tion that is, in our view, permissible on the 
basis of the ordinary meaning of the concession cont ained in heading 02.10 when read in its factual 
context would seem to explain, at least in part, why certain products that the European Communities 
categorizes under heading 02.10 such as parma ha m, prosciutto and jamón serrano may require 
additional means of preservation.  Indeed, we  consider that the European Communities' 
acknowledgement that products covered by headin g 02.10 may require means of preservation in 
addition to that effected through the addition of salt254 provides some support for the view that a 
product preserved by salt for relatively short periods of time is not necessarily precluded from 
qualifying under heading 02.10 of the EC Schedule. 
(iv) Summary and conclusions regarding the "ordinary meaning" 
7.150  In summary, on the basis of the dictionary de finitions for the term "salted", the Panel 
concludes that the ordinary meaning of that term includes a range of meanings – namely, to season, to add salt, to flavour with salt, to treat, to cure or to preserve.  The dictionary definitions also suggest 
that the ordinary meaning of the term "salted" is not necessarily limited to salting with common salt 
(NaCl).  The Panel considers that, in essence, the ordinary meaning of the term "salted" when 
considered in its factual context indicates that th e character of a product has been altered through the 
addition of salt. 
7.151  The Panel considers that there is nothing in the range of meanings comprising the ordinary 
meaning of the term "salted" that indicates that ch icken to which salt has been  added is not covered by 
the concession contained in heading 02.10 of the EC Schedule.  Nevertheless, it is our view that the 
ordinary meaning of the term "salted" in headi ng 02.10 is not dispositive regarding the question of 
whether or not the specific products at issue in this  dispute, to which salt has been added and which 
are frozen, are covered by this concession.  Therefore,  we now turn to an analysis of the context for 
the concession contained in heading 02.10 of th e EC Schedule pursuant to Article 31(2) of the Vienna 
Convention  for further guidance in this regard. 
(b) Context: Article 31(2) of the Vienna Convention  
(i) What qualifies as "context" for the interpretation of the EC Schedule? 
7.152  Article 31(2) of the Vienna Convention  provides that:  
"The context for the purpose of the interp retation of a treaty shall comprise, in 
addition to the text, including its preamble and annexes: 
(a) any agreement relating to the treaty which was made between all the parties 
in connection with the conclusion of the treaty; 
                                                     
 
253 For example, the EC's expert, Professor Honikel suggests that while a 3% salt content may prevent 
spoilage for a few days, a 7% salt content is necessary  to completely preserve the product in question. 
254 EC's oral statement at the second substantive m eeting, para. 9; EC's replies to Panel question 
Nos. 96 and 98. WT/DS269/R 
Page 58  
 
(b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related 
to the treaty." 
7.153  The chapeau of Article 31(2) indicates that the te xt of the treaty, the terms of which are being 
interpreted, including its preamb le and annexes, qualify as "contex t" under Article 31(2) of the Vienna 
Convention .  Regarding other agreements or instrume nts that may qualify under Article 31(2), the 
International Law Commission stated that: 
"[T]he principle on which [Article 31(2)] is  based is that a unilateral document cannot 
be regarded as forming part of the context [...] unless not only was it made in 
connexion with the conclusion of the treaty, but  its relation to the treaty was accepted 
in the same manner by the other parties .  [...]  What is proposed in paragraph 2 is 
that, for purposes of interpreting the treaty, these categories of documents should not be treated as mere evidence to which recourse may be had for the purpose of 
resolving an ambiguity or obscurity, but as part of the context for the purpose of arriving at the ordinary meaning of the terms of the treaty."
255  (emphasis added) 
7.154  Further, a leading international law commentator suggests that, in order to be related to the 
treaty, and thus be part of the "context" as opposed to the negotiating history, which is dealt with in 
Article 32 of the Vienna Convention , an instrument "must be concerned with the substance of the 
treaty and clarify certain concepts in  the treaty or limit its field of application.  It must equally be 
drawn up on the occasion of the conclusion of the treaty."256 
7.155  In light of the foregoing, the Panel will first c onsider the terms of relevant aspects of the EC 
Schedule to ascertain whether they assist in the in terpretation of the concession contained in heading 
02.10 of the EC Schedule.  The Panel will then c onsider whether there are any other agreements or 
instruments that qualify as "context" under Article 31(2) of the Vienna Convention  that may also 
assist us in the interpretative exerci se we are required to undertake. 
(ii) The text of the EC Schedule 
7.156  As noted above in paragraph 7.108, the complain ants discussed the terms other than "salted" 
in the concession contained in heading 02.10 of the EC Schedule in their examination of the "ordinary 
meaning" of that concession whereas the European Communities did so in the "context" section of its 
arguments.  As we stated previously, we have adopted the approach suggested by the European 
Communities regarding these other terms, recalling that it is the term "salted" that is in issue in this 
dispute and that the complainants have submitted th at they do not consider that the result of the 
interpretative exercise will differ depending upon wh ether the terms other than "salted" in heading 
02.10 are assessed as part of the "ordinary meaning" under Article 31(1) of the Vienna Convention  or 
as "context" under Article 31(2).257 
Other terms contained in heading 02.10 of the EC Schedule  
Arguments of the parties  
7.157  Brazil  and Thailand  refer to a number of dictionary definitions of "salted", "in brine" 
"dried", and "smoked" and conclude that, taken to gether, these terms share a common attribute.  In 
particular, according to Brazil and Thailand, they all relate to how food is prepared – that is, the way 
                                                      
255 Yearbook of the International Law Commission , 1966, Vol. II, p. 221, para. 13. 
256 Ian Sinclair, The Vienna Convention on the Law of Treaties , Manchester University Press, 2nd 
edition (1984) p. 129. 
257 Brazil's reply to Panel question No. 66; Thailand's reply to Panel question No. 66.  WT/DS269/R 
 Page 59 
 
 
in which the natural condition of the product has been altered – regardless of the purpose for the 
preparation of meat (e.g. for treatment, seasoning, flavouring, preservation).258 
7.158  The European Communities  submits that the dictionary definitions cited by the 
complainants for the terms "in brine", "dried" a nd "smoked" indicate that these terms denote methods 
of preservation of meat products.259  In particular, the European Communities argues that "in brine" 
refers to preservation by salt water, "dried" refers to preserved by the removal of natural moisture, and 
"smoking" refers to drying, curing, or tainting by exposure to smoke.260  According to the European 
Communities, the terms "salted", "in brine", "dried " and "smoked" all concern traditional methods for 
preserving meat and they are the only traditional methods for preserving meat that are of any significance.
261  The European Communities argues that, therefore, heading 02.10 is based on a 
comprehensive and exclusive list of traditional methods of preserving meat.262 
7.159  The various dictionary definitions relied upon by the parties are contained in the table set out 
immediately below:263 
 Brazil Thailand EC 
Dictionaries 
Relied Upon Concise Oxford 
Dictionary (1995)  Concise Oxford Dictionary 
(1995)   New Shorter Oxford 
English Dictionary (1996) 
"In Brine" -[brine] Water saturated 
or strongly impregnated 
with salt or to soak in or 
saturate in brine -Water saturated or strongly 
impregnated with salt or to 
soak in or saturate in brine  
"Dried" -To make or become dry 
by wiping, evaporation, draining, etc. or to preserve (food etc.) by removing the moisture 
(dried egg; dried fruit; 
dried flowers ) -To make or to become dry 
by wiping, evaporation, draining, etc., or to preserve (food, etc) by removing the moisture -Spec. of food: 
preserved by the removal of its natural moisture 
"Smoked" -To cure or darken by the 
action of smoke ( smoked 
salmon ) -To cure or darken by the 
action of smoke -Of meat, fish, etc.: 
dried, cured, or tainted by exposure to smoke, or loosely by a process that produces a similar effect 
 
Analysis by the Panel 
7.160  The Panel notes that the terms other than "salte d" in heading 02.10 are defined as follows in 
the various dictionaries to which the Panel has made reference: 
                                                      
258 Brazil's first written submission, paras. 74 and 75;  Thailand's first written submission, paras. 68-69; 
Thailand's oral statement at the first substantive meeting, para. 13. 
259 EC's first written submission, pa ras. 128, 135 and 136; EC's sec ond written submission, para. 31; 
EC's oral statement at the second  substantive meeting, para. 29. 
260 EC's first written submission, paras. 129, 130, and 132. 
261 EC's oral statement at the second substantive meeting, para. 30. 
262 EC's oral statement at the second substantive meeting, para. 31. 
263 Brazil's first written submission, para. 74; Thailand 's first written submission, para. 68; EC's first 
written submission, paras. 130 and 132. WT/DS269/R 
Page 60  
 
Dictionaries 
Relied Upon Concise Oxford 
Dictionary (1999)  Webster's New 
Encyclopaedic Dictionary (1993) New Shorter Oxford English 
Dictionary (1993) 
"In Brine" -[brine] Water 
saturated or strongly impregnated with salt; 
-(technical) A strong 
solution of a salt or salts -[brined] soak in or saturate with brine -[brine] Water containing 
a great deal of salt -[brine] Water saturated or 
strongly impregnated with salt; salt water 
"Dried" -[dry] Free from 
moisture or liquid -preserve by 
evaporating the 
moisture from -[dry] Free or freed from 
water or liquid -Characterized by loss or 
lack of water 
-[dried] To make or become dry -Deprived of moisture, 
desiccated -Spec. of food: preserved by 
the removal of its natural 
moisture 
"Smoked" -[smoke] Cure or 
preserve (meat or fish) by exposure to smoke -[smoke] To cure by 
exposure to smoke (smoked meat) -Of meat, fish, etc: dried, 
cured, or tainted by exposure to smoke 
 7.161  The key issue for the Panel's determination he re is whether there is any intrinsic notion 
common to all terms referred to in the concession c ontained in heading 02.10 of the EC Schedule that 
may assist in clarifying the meaning of the term "salte d" in that concession.  In this regard, we recall 
that the complainants submit that the intrinsic notio n common to all terms referred to in heading 02.10 
is that of "preparation" to change the natural condition of meat whereas the European Communities 
argues that the intrinsic notion is that of "preservation". 
7.162  In the Panel's view, it is difficult to identify a notion that characterizes all the terms in the 
concession contained in heading 02.10 of the EC Schedule.  While the notion of "preservation" 
appears in the dictionary definitions for the term s "dried" and "smoked" (and, as previously noted, 
also "salted"), this notion does not appear in the dict ionary definitions for "in brine".  Even in respect 
of those terms for which the notion of "preservation"  does appear, the dictionary definitions indicate 
that their respective meanings are broader than just pertaining to preservation.  Further, it is not clear 
to us that preservation is necessarily the dominant characteristic that should be used to characterize 
those processes.  In addition, in our view, the de finitions for each of th e terms in the concession 
contained in heading 02.10 of the EC Schedule may be characterized as pertaining to "preparation" as 
well as to "preservation".  We recall that there appears to be a certain degree of overlap between these two concepts in that, for example, a product may be  "prepared" for the purposes of "preservation" and 
"preserve" is defined, inter alia , as to "prepare food for future use".
264 
7.163  In light of the foregoing, the Panel does not cons ider that the definitions of the terms other 
than "salted" point to any single notion that is in trinsic to or characterizes all the terms in the 
concession contained in heading 02.10 of the EC Sc hedule.  Nor does the Panel find that these terms 
can be defined as pertaining exclusively either to "pre paration" or "preservation" or, for that matter, to 
long-term preservation.  In conclusion, it is the Panel's view that an examination of the terms 
contained in that concession other than "salted" do es not clarify the ordinary meaning of the term 
"salted". 
                                                      
264 See paragraph 7.114 above.  WT/DS269/R 
 Page 61 
 
 
Structure of Chapter 2 of the EC Schedule  
Arguments of the parties 
7.164  Thailand  submits that the structure of the ten headings contained in Chapter 2 of the EC 
Schedule, of which headi ng 02.10 is one, indicates that products are either classified as "fresh", 
"chilled" or "frozen" (the first eight headings) or as "salted", "in brine", "dried" or "smoked" (heading 
02.10); and that only heading 02.09 specifically lists all the various states.  According to Thailand, the 
fact that heading 02.10 does not list all the states but, rather, only lists the states of "salted", "in brine", 
"dried" or "smoked" – which Thailand submits ar e methods of preparation – indicates that, for 
heading 02.10, it is the type of "preparation" that is  the determining factor for the classification of that 
product.265  According to Thailand, an analysis of the st ructure of the headings in Chapter 2 indicates 
that heading 02.10 is specific for all types of meat th at are salted, in brine, dried or smoked.  Thailand 
argues that that heading is not meant to be a residua l category.  In contrast to heading 02.08, which 
applies to "other meat" not specified in headings 02. 01 – 02.07, heading 02.10 applies to all meat and 
edible meat offal as long as the meat is salted, in brine, dried or smoked.  Thailand submits that all 
such meat is to be classified under heading 02.10 re gardless of the state in which it is presented, i.e. 
fresh, chilled or frozen.266 
7.165  In response, the European Communities  argues that an examination of Chapter 2 as a whole 
shows that it is divided into different forms of "prese rvation" rather than into meat that has undergone 
a process and meat that has not.267  More particularly, the European Communities argues that the 
headings in Chapter 2 of the EC Schedule form tw o categories based on whether or not meat has been 
subjected to the processes listed in heading 02.10.268  According to the European Communities, 
chilling and freezing is an important feature of th e headings in the first category comprising all 
headings in Chapter 2 except heading 02.10, because it is made explicit that the headings in that 
category include meat that is chilled and frozen.  As for the second category, consisting of heading 
02.10 on its own, the European Communities submits that the omission of freezing or chilling exists 
because the purpose achieved by chilling and freezi ng – that is, preservation – has already been 
achieved by salting, drying or smoking.  The European Communities also submits that, even though 
meat of heading 02.10 may be "further preserve d" by other methods (such as freezing), chilling or 
freezing is, nevertheless, not a significant considerati on in relation to such meat, which explains why 
the terms "chilled" or "frozen" are absent from heading 02.10.269  The European Communities argues 
that, therefore, the context of heading 02.10, view ed in this schematic ma nner, gives powerful support 
to the view that all the processes referred to in  Chapter 2 serve to preserve meat from decay.  
Therefore, according to the European Communities, the meaning of the term "salted", viewed in its 
context, and in light of its object and purpose,  means that "salting" is for the purpose of 
preservation.270  The European Communities clarifies that  preserving a foodstuff does not imply that it 
has not been subject to some form of process.   Rather it simply means that the process of 
decomposition has in some way been inhibited.271   
7.166  Brazil  and Thailand  disagree with the European Commun ities' argument that Chapter 2 of 
the EC Schedule is structured on the basis of preser vation processes.  Brazil submits that if "salting", 
"drying" and "smoking" were meant as means of pr eservation, these terms would have been placed at 
the subheading level together with the terms "fresh ", "chilled" and "frozen" found in Chapter 2, but 
                                                      
265 Thailand's first written submission, para. 89; Th ailand's second written submission, paras. 24-25. 
266 Thailand's second written submission, para. 27. 
267 EC's first written submission, para. 138. 
268 EC's oral statement at the first substantive meeting, paras. 12-16. 
269 EC's first written submission, para. 138; EC's second written submission, paras. 27, 30, 41 and 45. 
270 EC's oral statement at the first substantive meeting, paras. 12-16. 
271 EC's first written submission, para. 137. WT/DS269/R 
Page 62  
 
not separately as a different heading.
272  Thailand questions how Chapter 2 could be structured on the 
basis of preservation methods given that the state of  "fresh", being one of the states of meat products 
covered by Chapter 2, could not qualify as a form of preservation.273  Brazil and Thailand 
acknowledge that freezing is not a significant consider ation in relation to meat of heading 02.10.  
However, according to Brazil, this is so because wh at is important in relation to meat of heading 
02.10 is the fact that it is a different type of m eat from the non-prepared meat of headings 02.01 to 
02.08, irrespective of whether it is chilled or frozen.274  Thailand submits that the fact that salted meat 
is subsequently frozen should not aff ect its classification under heading 02.10.275  Brazil questions 
why further preservation would be necessary for meat  under heading 02.10 if the processes of heading 
02.10 themselves ensure long-term preservation as ar gued by the European Communities.  Brazil and 
Thailand argue that, therefore, long-term preservati on is not a concept that defines the structure of 
Chapter 2 or the processes of heading 02.10.276 
Analysis by the Panel 
7.167  The Panel considers that the structure of Chapter 2 of the EC Schedule as a whole may 
provide textual context from which inferences may be  drawn regarding the interpretation of the term 
"salted" in the concession contained in heading 02.10 of the EC Schedule, pursuant to Article 31(2) of 
the Vienna Convention . 
7.168  Chapter 2 of the EC Schedule consists of ten headings –  i.e., headings 02.01 through 02.10 – 
which are set out below: 
"02.01  Meat of bovine animals, fresh or chilled 02.02  Meat of bovine animals, frozen 
02.03  Meat of swine, fresh, chilled or frozen 
02.04  Meat of sheep or goats, fresh, chilled or frozen 02.05  Meat of horses, asses, mules or hinnies, fresh, chilled or frozen 02.06  Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, 
fresh, chilled or frozen 
02.07  Meat and edible offal, of the poultr y of heading No 0105, fresh, chilled or frozen 
02.08  Other meat and edible meat offal, fresh, chilled or frozen 02.09  Pig fat free of lean meat and poultry fa t (not rendered), fresh, chilled frozen, salted, in 
brine, dried or smoked 
02.10  Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and meals 
of meat or meat offal." 
7.169  The Panel recalls that, on the one hand, the complainants argue that the headings are 
structured in a way such as to distinguish meat  "prepared" by the processes listed in heading 02.10 
                                                     
 
272 Brazil's oral statement at the seco nd substantive meeting, para. 22. 
273 Thailand's second written submission, para. 35. 
274 Brazil's oral statement at the seco nd substantive meeting, para. 24. 
275 Thailand's oral statement at the se cond substantive meeting, para. 15. 
276 Brazil's oral statement at the second substan tive meeting, para. 29; Thailand's second written 
submission, para. 35.  WT/DS269/R 
 Page 63 
 
 
from non-prepared meat referred to in the other head ings of Chapter 2 of the EC Schedule.  On the 
other hand, the European Communities argues that preservation is an important feature for all the 
headings in Chapter 2.  More particularly, the Eu ropean Communities submits that an examination of 
Chapter 2 as a whole shows that it is divided into di fferent forms of "preservation".  In the European 
Communities' view, heading 02.10 does not refer to  other preservation methods such as "chilling" and 
"freezing" because the processes of " salting", " brining", "drying" a nd "smoking" achieve preservation 
on their own. 
7.170  Generally speaking, the headings within Chapte r 2 are structured as follows: (a) they identify 
the type of meat or meat product concerned by the heading in question; and (b) they indicate the state(s) of the meat that are covered by the head ing – namely, the states of being "fresh", "chilled" 
and/or "frozen".  An important exception to this generalisation is heading 02.10, which covers all 
types of meat listed in headings 02.01 through 02.08 and states that the meat covered by that heading must be "salted, in brine, dried or smoked".
277  What is not clear to us is the rationale for and 
significance of the unique formul ation used in heading 02.10. 
7.171  Indeed, in the Panel's view, there is nothing in  the terms of Chapter 2 that clearly indicates 
which of the approaches put forward by the parti es is the correct one, if either.  The European 
Communities itself appears to have cast doubt on th e view that the processes referred to in heading 
02.10 result in "preservation" in the same manner that  "chilling" or "freezing" achieves preservation.  
In particular, the European Communities has ac knowledged that meat of heading 02.10 may be 
"further preserved" by other methods, such as freezing.278  Counterbalancing the foregoing, however, 
is the absence of any compelling evidence derivi ng from the structure of Chapter 2 to indicate 
definitively that the concession contained in head ing 02.10 is characterized by the notion of 
"preparation" rather than "preservation", as has been submitted by the complainants. 
7.172  In our view, there may be a host of reasons th at, individually and/or in combination, could 
explain the unique formulation used in heading 02.10.   In particular, it may be that it is based on the 
fact that, in contrast to other processes referred to  in the headings of Chap ter 2, the processes referred 
to in heading 02.10 "prepare" meat so that the meat's natural condition is altered, as has been 
submitted by the complainants; and/or the unique fo rmulation may be linked to the fact that the 
processes referred to in heading 02.10 on their own "preserve" the meat to which those processes are 
applied, as has been submitted by the European Communities; and/or , the formulation may be based 
on a factor that is completely different from the "preparation" and "preservation" theories that have 
been put forward by the parties.  For example, th e terms and structure of heading 02.10 may merely 
reflect international trade patterns.279  The Panel considers that, on the basis of the terms and structure 
of heading 02.10, it is difficult to know which of the above-mentioned reasons is  the applicable one, if 
any. 
7.173  In conclusion, the Panel considers that the stru cture of Chapter 2 of the EC Schedule does not 
provide any insights regarding the question of whethe r "preservation" and/or "p reparation", if either, 
characterize Chapter 2 and, more particularly, the concession contained in heading 02.10 of the EC 
Schedule.  In addition, the Panel's view is that th e structure of Chapter 2 of the EC Schedule does not 
indicate that the concession containe d in heading 02.10 is necessarily characterized by the notion of 
long-term preservation. 
                                                      
277 We note that heading 02.09 is also somewhat different from headings 02.01-02.08 in that, in 
addition to identifying the type of meat product concerned by that heading and referring to the states of "fresh", 
"chilled" and "frozen", it also refers to the stat es of "salted", "in brine", "dried" or "smoked". 
278 EC's first written submission, para. 138; EC's second written submission, paras. 27, 30, 41 and 45. 
279 In this regard, see the WCO's reply to Pa nel question No. 2 to the WCO referred to in 
paragraph 7.196 below. WT/DS269/R 
Page 64  
 
Other parts of the EC Schedule
 
Arguments of the parties 
7.174  Thailand  submits that headings 08.12 and 08.14 of the EC Schedule illustrate that, in the EC 
Schedule, when the European Communities considers th at a product must be classified on the basis of 
its preservative characteristics, those characteristics are specifically referred to in the relevant tariff 
heading.280  In particular, Thailand refers to the fo llowing tariff headings from the EC Schedule: 
"08.12 Fruit and nuts provisionally preserved (for example by sulphur dioxide gas, in 
brine, in sulphur water or in other preserva tive solutions), but unsuitable in that state 
for immediate consumption: 
0812.10.00  Cherries  
0812.20.00  Strawberries  
0812.90  Other 08.14 Peel of citrus fruit or melons (incl uding watermelons) fresh, frozen, dried or 
provisionally preserved in brine, in sulphur water or in other preservative solutions." 
7.175  Thailand submits that, in contrast to head ings 08.12 and 08.14, heading 02.10 makes no 
reference to "preservation".  Thailand also submits that, under the general principles of interpretation 
of Article 31 of the Vienna Convention , the Appellate Body has stated that an interpreter must not 
"adopt a reading [of a treaty provision] that would r esult in reducing whole clauses or paragraphs of a 
treaty to redundancy or inutility."
281  Therefore, according to Thailand, a reading of "salted" as 
meaning for the purpose of long-term preservation w ould reduce to inutility the terms "preserved" in 
headings 08.12 and 08.14.  Accordingly, in the view of Thailand, the absence of a reference to 
"preservation" in heading 02.10 means that preservation is not the defining characteristic.282 
7.176  In response, the European Communities  submits that the terms "dried", "salted", "smoked" 
and "in brine" necessarily imply that a meat that has been subjected to these processes is preserved.  
The European Communities submits that, conseque ntly, there is no need to explicitly mention 
"preservation" with respect to th ese processes as such a reference w ould be redundant.  Further, the 
European Communities submits that the a contrario reading suggested by Thailand is baseless.  The 
European Communities submits that, moreover, a clo ser examination of Chapte r 8 of the EC Schedule 
supports the view that the processes described in heading 02.10 are meant for long-term preservation 
because heading 08.14 juxtaposes peel of citrus fruit or melons that are "frozen" or "dried" with those 
that are "provisionally preserved" in brine.  A ccording to the European Communities, where the 
preservation is only provi sional, this has to be expressly indicated.283 
Comments by the World Customs Organization 
7.177  Regarding the importance to be attached to the reference to the term "provisionally preserved" 
in heading 08.14 of the HS (which mirrors heading 08.14 of the EC Schedule), the WCO states that the term "provisionally preserved" was understood to distinguish between finished products of 
Chapter 20, on the one hand, and peel of citrus fruit or melons subjected only to certain preservation 
processes, but not further prepared, on the other.  Further, according to the WCO, this reference was 
                                                     
 
280 Thailand's oral statement at the first substantive meeting, para. 13. 
281 Thailand's oral statement at the first substantiv e meeting, para. 14 referring to Appellate Body 
Report, US – Gasoline , page 23 (DSR 1996: I, 3 at 21). 
282 Thailand's oral statement at the firs t substantive meeting, paras. 14-15. 
283 EC's reply to Panel question No. 39.  WT/DS269/R 
 Page 65 
 
 
intended to widen the scope of heading 08.14 to in clude not only fresh, frozen and dried products but 
also those provisionally preserved by processes listed in the text of the heading.  The WCO opines 
that the inclusion of a reference to the concept of "p reservation" in Chapter 8 is likely to be of limited 
relevance for other headings in respect  of which such a reference is absent.284 
Analysis by the Panel 
7.178  The Panel considers that parts of the EC Schedule other than Chapter 2 may also be 
considered as relevant context for the interpretation of the term "salted" in the concession contained in 
heading 02.10 of the EC Schedule, pursuant to Article 31(2) of the Vienna Convention . 
7.179  The Panel notes that the headings referred to by  Thailand in Chapter 8 of the EC Schedule are 
mirror images of the same headings in the HS.285  As noted above in paragraph 7.11, as a signatory to 
the HS, the European Communities is obliged to use the HS headings and subheadings at the 6-digit 
level.  Therefore, we consider that it is reasonabl e to assume that the inclusion of the reference to 
"preservation" in headings 08.12 and 08.14 in th e EC Schedule was not the result of an express 
intention on the part of the European Communities to  make such a reference but, rather, was a result 
of the European Communities' obligations under the HS  Convention to adopt the same headings in its 
domestic tariff nomenclature.  In other words, it woul d appear that the reference to "preservation" in 
headings 08.12 and 08.14 originates from the HS rather than as a result of a desire on the part of the 
European Communities to expressly incorporate the no tion of "preservation" into those two headings.  
In addition, the Panel notes that, with regard to the analogues of headings 08.12 and 08.14 of the EC 
Schedule in the HS, the WCO has suggested that limit ed significance should be attached, if any, to the 
reference to "preservation" in specific headings (s uch as 08.12 and 08.14) for ot her headings (such as 
heading 02.10), in which such a reference was omitte d.  Therefore, on the basis of the foregoing, we 
consider that inferences cannot be drawn from headi ngs 08.12 and 08.14 with respect to the meaning 
of the term "salted" in the concession contained in heading 02.10 of the EC Schedule. 
Summary and conclusions regarding the EC Schedule  
7.180  In summary, the Panel concludes that the defin itions of the terms in the concession contained 
in heading 02.10 of the EC Schedule other than "salted" do not indicate any intrinsic notion that 
characterizes all the terms in that concession other than  that they are in a state that is not simply fresh, 
chilled or frozen.  Nor does the Panel consider  that these terms can be defined as pertaining 
exclusively to "preparation" or to "preservation" pr ocesses.  In addition, the Panel does not consider 
that any inferences that are useful  for the purposes of our interpretation of the concession contained in 
heading 02.10 of the EC Schedule can be drawn from the structure of Chapter 2 of the EC Schedule 
nor from other parts of the EC Schedule other than th e fact that they do not indicate that Chapter 2, 
including heading 02.10, is necessarily characterized by the notion of long-term preservation.  In conclusion, it is the Panel's view  that an examination of these vari ous aspects of the EC Schedule does 
not clarify the ordinary meaning of the term "salte d" in the concession contained in heading 02.10 of 
the EC Schedule. 
(iii) The Harmonized System 
Does the Harmonized System qualify as "context" for the interpretation of the EC Schedule?
 
Arguments of the parties 
7.181  Brazil,  Thailand  and the European Communities  submit that the HS should be taken into 
consideration in interpreting the EC  Schedule.  The complainants note that the HS is used by over 175 
                                                      
284 WCO's reply to Panel question No. 12 to the WCO. 
285 The HS is discussed in greater de tail below in section VII.G.3(b)(iii). WT/DS269/R 
Page 66  
 
countries and customs territories as a basis for their customs tariffs and for the collection of trade 
statistics.  They also submit that the 1992 version of the HS was the basis for negotiation of the EC 
Schedule.
286  Brazil is of the view that, in light of the foregoing, reference can be made to the terms of 
the headings and subheadings of the 1992 version of the HS for clarification of the meaning of the EC 
Schedule.287  Thailand submits that all the parties agr ee that an interpretation of the EC Schedule 
under Article 31 of the Vienna Convention  must take into account the HS and its Explanatory Notes 
and emphasizes that the Appellate Body in  EC – Computer Equipment stated that the HS and its 
Explanatory Notes should have been considered by the panel in that case when interpreting the terms 
of the EC Schedule.288 
7.182  Brazil  considers that the HS qualifies as "context" under Article 31(2)(b) of the Vienna 
Convention .  According to Brazil, the HS was an inst rument made by various parties to the WTO 
Agreement "in connection with" the conclusion of the WTO Agreement, in the sense that it relates to 
the WTO Agreement – because tariff negotiations were held on the basis of the HS – and not in the 
sense that it was concluded at the same time as the WTO Agreement.289 
7.183  Thailand  does not consider that the HS is "context"  within the meaning of Article 31(2) of 
the Vienna Convention  given that, in Thailand's view, the HS do es not fulfil the criteria set out in that 
Article.290  However, Thailand submits that the HS could be taken into account under either 
Article 31(1) of the Vienna Convention  as "context" or under Article 31(3)(c) of the Vienna 
Convention  as "a relevant rule of international law".291  Thailand notes that, in EC – Computer 
Equipment , the Appellate Body expressed the view th at the HS should have been taken into 
consideration by the panel in that case in its effort  to interpret the terms of the EC Schedule but that 
the Appellate Body did not specify the provision in the Vienna Convention  under which the HS shoud 
have been taken into account.292  Thailand submits that it may not be necessary for the Panel in this 
case to specify the provision in Article 31 of the Vienna Convention  under which to address the HS.293 
7.184  The European Communities  submits that, in the context of  this case, the HS qualifies as 
"context" under Article 31(3)(c) of the Vienna Convention .294  In support, the European Communities 
points out that the Appellate Body in EC – Computer Equipment considered the HS as part of the 
context of the schedule at issue in that case.295 
Analysis by the Panel 
7.185  The Panel recalls that, pursuant to Article 3.1 of the HS Convention, the European 
Communities is obliged to use the HS headings and s ubheadings at the 6-digit level.  Therefore, the 
European Communities' CN and the HS are identical at the 6-digit level. 
7.186  The HS originates from the "Geneva Nomencla ture" (GN), which came into existence on 
1 July 1937 in the form of the 1937 Draft Customs No menclature of the League of Nations.  The GN 
was replaced in 1959 by the Brussels Convention on No menclature for the Classification of Goods in 
                                                      
286 Brazil's first written submission, paras. 106-108; Th ailand's first written submission, paras. 97-101; 
EC's reply to Panel question No. 73. 
287 Brazil's first written submission, para. 111. 
288 Thailand's second written submission, paras. 30 and 31; Thailand's oral statement at the second 
substantive meeting, para. 25 . 
289 Brazil's reply to Panel question No. 73; Br azil's second written submission, para. 27. 
290 Thailand's reply to Panel question No. 73; Thailand's second written submission, para. 31. 
291 Thailand's second written submission, para. 32; Thailand's reply to Panel question No. 121.   
292 Thailand's reply to Panel question, no. 73 referring to the Appellate Body Report in EC – Computer 
Equipment , para  89. 
293 Thailand's reply to Panel question No. 73; Thailand's second written submission, para. 31. 
294 EC's reply to Panel question No. 73. 
295 EC's oral statement at the second substantive meeting, para. 28.  WT/DS269/R 
 Page 67 
 
 
Customs Tariffs (Brussels Tariff Nomenclature or BTN)296, which was subsequently renamed as the 
Customs Co-operation Council Nomenclature in 1974 (CCCN).  The CCCN was replaced by the HS 
in 1988.  The HS has been amended three times since 1988 – in 1992, 1996 and in 2002. 
7.187  The Panel notes that the membership of the HS is extremely broad and includes the vast 
majority of WTO Members, including the parties to this dispute.297  Further, the HS was used as a 
basis for the preparation of the Uruguay Rou nd GATT schedules.  This is apparent from the 
Modalities Agreement298, which provides that agricultural products in respect of which tariff 
commitments are to be established are based on the HS299 and from the fact that the HS has been used 
to define product coverage unde r the Agreement on Agriculture.300 
7.188  In addition, the Panel notes that, in EC – Computer Equipment , the Appellate Body stated that 
the panel should have considered the HS and its E xplanatory Notes when interpreting the terms of the 
schedule at issue in that case, which happens to be the same schedule that is at issue in this case – 
namely, the EC Schedule.  In particular, the Appellate Body stated that: 
"We believe ... that a proper interpreta tion of [EC] Schedule LXXX should have 
included an examination of the Harmonized System  and its Explanatory Notes ."301 
7.189  In light of the foregoing, it is clear to the Panel that the 1992 version of the HS and its 
Explanatory Notes are relevant to the interpretation of concessions contained in the EC Schedule.  We 
do not consider that the outcome of the interpreta tive exercise we are undertaking with respect to 
heading 02.10 of the EC Schedule will be affect ed depending upon whether we classify the HS as 
"context" under Article 31(2)(b) of the Vienna Convention  as submitted by Brazil, or as "context" 
under Article 31(1) as submitted by Tha iland, or as a "relevant rule of  international law" under Article 
31(3)(c) as submitted by Thailand and the European Communities.  Therefore, we will treat the HS as 
if it qualifies as "context" under Article 31(2), recalling that the Appellate Body in EC – Computer 
Equipment  indicated that the HS should be taken into  consideration for the interpretation of a 
Member's schedule .  We will now consider whether any releva nt inferences can be drawn from the HS 
for the purposes of the interpretation of the c oncession contained in heading 02.10 of the EC 
Schedule. 
Interpretation of the relevant aspects of the Harmonized System  
Interpretative approach 
7.190  In determining the relevance, if any, of the HS for the interpretation of the concession 
contained in heading 02.10 of the EC Schedule, we w ill consider all relevant aspects of the HS – i.e. 
the terms and structure of the HS, its Explanatory Notes and the General Rules.  We will initially 
consider each aspect individually bu t will finally appraise all these asp ects in totality.  We consider 
that we will be better-placed to draw relevant inferences from the HS for the purposes of our interpretation of the EC Schedule if all relevant  aspects of the HS are considered as a whole. 
                                                     
 
296 The BTN came into force on 11 September 1959, following the adoption on 1 July 1955 of a 
Protocol of Amendment establishing a revised version of the Nomenclature. 
297 The Panel notes that 102 out of 148 WTO Members are signatories to the HS Convention and the 
vast majority of other WTO Members, although not signatories, apply the HS. 
298 The Modalities Agreement is referred to above in para. 7.96. 
299 See paragraph 3 of Annex 3 of the Modalities Agreement. 
300 See paragraph 1 of Annex 1 of the Agreement on Agriculture . 
301 Appellate Body Report, EC – Computer Equipment , para. 89. WT/DS269/R 
Page 68  
 
Terms and structure of the HS 
 Arguments of the parties 
7.191  In relation to the terms of heading 02.10 of the HS, Brazil  and Thailand  submit that they are 
identical to the terms of heading 02.10 of the EC Schedule.
302  In particular, Thailand submits that the 
term "salted" in heading 02.10 of the HS is not qua lified in any way to clarify the threshold level of 
salt that must be met to classify the product as "salted".303 
7.192  Regarding the structure of Chapter 2 of the HS, Brazil notes that the WCO did not refer to 
preservation or long-term preservation in its reply to Panel questions regarding the structure of 
Chapter 2 of the HS.304 
7.193  Brazil also refers to the predecessor nomencl ature to the HS – namely, the GN – and the 
Explanatory Notes to that nomenclature to demonstrat e that Chapter 2 of the HS is structured on the 
basis of "preparation" rather than "preservation".305  First, Brazil submits that the GN shows that 
Chapter 2 was structured in such a way that the more meats were prepared and/or processed, the 
farther they were placed from live animals.306  Secondly, Brazil submits that an Explanatory Note in 
Chapter 2 of the GN only referred to two preservation categories – i.e ., "fresh/chilled" and "frozen", 
but not to "salted", "dried" or "smoked".  According to Brazil, had the drafters of the GN conceived of 
"salted", "dried" or "smoked" as preservation met hods under Chapter 2, they would have placed them 
as tertiary items next to "fresh/chilled" and "frozen".307  Thirdly, Brazil argues that the same 
Explanatory Note reflects a concern to avoid the draw ing of distinctions in Chapter 2 that would result 
in discrimination among the same type of meat coming from different places.308  According to Brazil, 
if preservation determined classification under head ing 02.10, that objective would be undermined.309  
Fourthly, Brazil refers to the terms of the predece ssor of heading 02.10 in the GN.  Brazil argues that 
the reference to "simply prepared" in that heading means that the heading pertains to meat that was 
"prepared", but not "preserved".310  According to Brazil, this is further confirmed by the Explanatory 
Note to that heading in the GN, which states that  further processed meat such as hermetically sealed 
and specifically packaged products, as opposed to simply prepared meat, fall under Chapter 16 as 
meat of the preserved foods industries.311  Brazil concludes that Chapter 2 of the GN was structured 
according to the degree of preparation and that, und er the GN, "salted", "dried" and "smoked" meats 
were regarded as "prepared" meat s rather than "preserved" meats.312  Therefore, according to Brazil, 
Chapter 2 of the HS is structured on the basis of the same principle – i.e. , the degree of "preparation" 
rather than the degree of "preservation".313 
                                                      
302 Brazil's first written submission, para. 112; Th ailand's first written submission, para. 107. 
303 Thailand's first written submission, para. 109. 
304 Brazil's oral statement at the s econd substantive meeting, para. 32; Brazil's closing statement at the 
second substantive meeting, para. 14. 
305 Brazil's second written submission, paras. 33- 47.  Brazil submitted the GN and its Explanatory 
Notes in Exhibit BRA-40(a). 
306 Brazil's second written submission,  para. 37; Brazil's closing statement at the second substantive 
meeting, para. 14. 
307 Brazil's second written submission, para. 40; Braz il's oral statement at the second substantive 
meeting, para. 25; Brazil's reply to Panel question 121. 
308 Brazil's second written submission, para. 41; Braz il's oral statement at the second substantive 
meeting, para. 26; Brazil's reply to Panel question No. 121. 
309 Brazil's oral statement at the seco nd substantive meeting, para. 27. 
310 Brazil's second written submission, para. 44. 
311 Brazil's second written submission, para. 45. 
312 Brazil's second written submission, para. 47. 
313 Brazil's second written submission, paras. 46-47.  WT/DS269/R 
 Page 69 
 
 
7.194  The European Communities  quotes the WCO's reply to a question from the Panel, which the 
European Communities submits indicates that the rati onale behind the product coverage in the HS 
was to meet the needs of those involved in inte rnational trade by including goods or groups of goods 
for which there was a significant volume of international trade.314  According to the European 
Communities, the WCO's response confirms that the drafters of the HS put meats which had been 
"salted, in brine, dried or smoked" for preserva tion in a specific heading because they constituted a 
significant category in international trade.  The Eu ropean Communities further submits that trade in 
meat "preserved" in the ways men tioned in heading 02.10 in the HS  clearly qualifies as products with 
a significant volume of international trade and this can be confirmed by the fact that European countries were the principal participants in th e 1937 GN and the GN's su ccessor, the 1955 CCCN.  
According to the European Communities, partially processed meats, such as the products at issue, 
have played no role in international trade since they did not exist in 1937 nor in 1955.  The European Communities argues that, therefore, there was no reas on for the drafters of the GN, the CCCN and the 
HS to provide for a class of products that did not ex ist in international commerce.  Rather, the type of 
meats they had in mind when providing a separate h eading must have been "preserved" meats, the 
varieties of which were well established and easily identifiable and comprised a fairly short list.
315  
The European Communities also subm its that, despite the use of the terminology "prepared" in the 
GN predecessor to heading 02.10 of the HS, it could not have referred to anything but meat that had 
been processed in order to protect it from decay and deterioration given the almost total absence of 
domestic refrigeration in pre-war Europe.  The European Communities explains that, because the GN 
heading included cooked meat along with meats that were salted etc., the term  "simply prepared" was 
used to cover all such pro cesses.  The European Communities notes that "cooked meat" was 
eventually placed together with other preparati ons of meat in Chapter 16 of the CCCN and, 
subsequently, in the HS.316 
 Comments by the World Customs Organization 
7.195  The WCO states that Chapter 2 of the Harmonized  System is based on the structure of the 
CCCN.  The CCCN, which had been used since 1959, was, to some extent, based on the former 
"Geneva Nomenclature".  The WCO further states th at the historical development of the two HS 
headings at issue in this dispute (02.07 and 02.10) has been as follows: 
Item 14  Dead poultry. (Geneva Nomenclature) 02.02 Dead poultry (that is to say, fowls,  ducks, geese, turkeys and guinea fowls) 
and edible offals thereof (except liver), fresh, chilled or frozen. (CCCN) 
02.07 Meat and edible offal, of the pou ltry of heading 01.05, fresh, chilled or 
frozen. (HS) 
 Item 18  Meat, salted, dried, smoked, cooked, or otherwise simply prepared. 
(Geneva Nomenclature) 
02.06 Meat and edible meat offals (except poultry liver), salted, in brine, dried or 
smoked. (CCCN) 
                                                     
 
314 EC's oral statement at the second substantive m eeting, para. 32 referring to the WCO's reply to 
Panel question No. 2 to the WCO. 
315 EC's oral statement at the second  substantive meeting, paras. 34-36. 
316 EC's oral statement at the second  substantive meeting, paras. 41-45. WT/DS269/R 
Page 70  
 
02.10 Meat and edible meat offal, salted, in brine, dried or smoked; edible flours 
and meals of meat or meat offal. (HS)
317 
7.196  The WCO further states that, when the HS was developed, the separate identification of goods 
or group of goods was, as a genera l rule, approved only if there w as agreement amongst participants 
that the goods or group of goods were significant in international trade.  Consequently, the rationale 
behind the product coverage in the HS was to meet the needs of those involved in international trade 
by including goods or groups of goods with a signi ficant volume of international trade, taking into 
consideration the structure of the nomenclatures consulted.318 
 Analysis by the Panel 
7.197  The contents and structure of the HS are identical  to the EC Schedule at the 6-digit level.  The 
Panel considers that, to the extent that the term s of heading 02.10 in the HS and the structure of 
Chapter 2 of the HS are identical to the terms of the concession contained in heading 02.10 and 
Chapter 2 of the EC Schedule, they do not provi de us with any helpful guidance regarding the 
interpretation of the term "salted" in that concessi on in addition to what the Panel has already obtained 
from its analysis thus far regardi ng the terms and structure of the EC  Schedule.  Therefore, in this 
section, we will focus on elements of the terms and st ructure of the HS that do not appear in the EC 
Schedule and which we have not been  called upon to consider up until now. 
7.198  Regarding the evolution of the structure of Chap ter 2 of the HS, we recall that the GN and the 
BTN were concluded respectively in 1937 and 1959.  The timing of their conclusion suggests to us 
that they might be of limited relevance for the head ings contained in the HS given changes in trade 
patterns and technology since their conclusion, wh ich may have necessitated changes in tariff 
nomenclature.  Having said this, we turn to the evol ution of the structure of Chapter 2 of the HS to 
determine whether it may, nevertheless, assist us in  the interpretation of the concession contained in 
heading 02.10 of the EC Schedule. 
7.199  We acknowledge that certain aspects associated wi th the evolution of Chapter 2 of the HS 
may suggest that heading 02.10 was intended to relate to  the "preparation" of meat.  In this regard, we 
note that the predecessor in the GN to heading 02.10 of the HS – i.e. Item 18 – referred to: 
"Item 18 Meat, salted, dried, smoked, c ooked, or otherwise simply prepared: 
 a. Ham 
 b. Other. 
 Note. – Meat imported in tins, terrines, crusts, or in 
hermetically sealed recept acles is not included under 
Item 18. "319 
7.200  In addition, the Explanatory Note to Item 18 stated that: 
"The last basic item of this chapter includes all other meat, salted, dried, smoked, 
cooked or otherwise simply prepared. ...  th is item consists of very simply prepared 
articles, the production of which is rather cl osely connected with that of fresh meat.  
The joint expediency for th e simplification of and ready reference to the Customs 
tariffs therefore makes it desirable that su ch meat should not be classified otherwise 
than as simple preparations of fresh meat.  On the other hand, this chapter does not 
include meat in tins, jars, croûtes or in hermetically sealed containers, these actually 
                                                      
317 WCO's reply to Panel question No. 3 to the WCO. 
318 WCO's reply to Panel question No. 2 to the WCO. 
319 The GN is contained in Exhibit BRA-40(a).  WT/DS269/R 
 Page 71 
 
 
being products of the preserved foods industries and therefore included in Chapter 16."  
7.201  It is true that the reference to "simply prepar ed" in Item 18 may be read as characterizing all 
the terms preceding it.  More specifically, that refere nce could imply that "salted", "dried", "smoked" 
and "cooked" are all methods of "simple preparation" .  Indeed, this view appears to be supported by 
the term "otherwise", which immediately precedes "s imply prepared" as well as the Explanatory Note 
to Item 18, which states that "this item consists of very simply prepared articles" and "does not 
include meat in tins, jars, croûtes or in hermeti cally sealed containers ... products of the preserved 
food industries". 
7.202  Nevertheless, the Panel considers that, even if Item 18 of the GN and its successor heading in 
the HS – namely, heading 02.10 – were intended to re late to "prepared" foods, in our view, there is 
nothing in the GN nor in the HS that suggests that they could not concurrently  relate to "preserved" 
foods.  In this regard, the Panel recalls its observatio n above in paragraph 7.114 that there is a certain 
degree of overlap in the definitions of the terms "preparation" and "preservation". 
7.203  In considering whether the evolution of th e HS supports the view that the concession 
contained in heading 02.10 of the EC Schedule relates not only to "preparation" but also to 
"preservation", we note that Brazil has submitted that  the evolution of the GN indicates that the notion 
of "preserve" cannot characterize heading 02.10 of the HS and its predecessors.  In particular, Brazil 
submits that, had the drafters of the GN conceive d of "salted", "dried" or "smoked" as preservation 
methods, they would have placed them as ter tiary items next to fresh/chilled and frozen.
320  Brazil also 
submits that, if preservation determined classifica tion under heading 02.10, th is would undermine the 
objective of avoiding discrimination among meat coming from different places.321  Brazil bases both 
arguments on the following Explanatory Note to Item 13 in the GN322: 
"With regard to the subdivision of this item , there are, of course, two possibilities: the 
four important kinds of animals for slaughter: the bovine species, sheep, pigs and the equine species could be taken as a basis; or the two main categories of fresh and 
chilled or frozen meat could be taken.  The draft combines these two methods of 
classification.  It is no doubt essential that tariffs should show a discrimination between the various kinds of animals and, as a matter of fact, this distinction is now made in most tariffs.  The draft, therefor e, applies the same rule with regard to 
subdivisions, by providing, in the case of meat of the bovine species and sheep (large 
quantities of which are imported frozen), te rtiary items which distinguish between 
fresh and frozen meat.  To proceed otherwise – i.e., to make a fundamental distinction 
between fresh and frozen meat – would co mpel several countries to introduce into 
their Customs tariffs a subdivision whic h they have so far regarded as unnecessary 
and would lead to a discrimination being ma de between fresh meat, which is usually 
produced by neighbouring countries, and frozen meat, which generally comes from 
very remote parts of the world." 
7.204  The Explanatory Note to Item 13 identifies two main categories of meat – namely, 
"fresh/chilled meat" and "frozen meat".  Even if those categories are categories of "preservation" as 
has been submitted by Brazil, we see nothing in the Explanatory Note to suggest that they are 
necessarily the only categories of preservation in Chapter 2.  Further, the Panel notes that the 
objective to avoid discrimination referred to in th e Explanatory Note, which Brazil submits militates 
                                                     
 
320 Brazil's second written submission, para. 40; Braz il's oral statement at the second substantive 
meeting, para. 25; Brazil's reply to Panel question No. 121. 
321 Brazil's oral statement at the seco nd substantive meeting, para. 27. 
322 Item 13 referred to: "Butcher's meat" (i.e., be ef, veal, mutton, lamb, pork excluding bacon and 
horseflesh). WT/DS269/R 
Page 72  
 
against an interpretation of Item 18 to include th e notion of "preservation", is expressed with respect 
to fresh and frozen meat in Item 13 only and not with respect to the meats to which Item 18 applies.  Therefore, we do not consider that the expression of  the concern regarding non-discrimination, which 
is contained in the Explanatory Note to Item 13,  necessarily indicates that the processes in Item 18 
and, in turn, heading 02.10, excl ude the concept of "preservation". 
7.205  The Panel recalls again that, following our examination of the ordinary meaning of the 
concession contained in heading 02.10 of the EC Sche dule, we concluded that the term "salted" means 
to season, to add salt, to flavour w ith salt, to treat, to cure or to preserve and encompasses the notion 
of both "preservation" and "preparation".
323  In our view, the evolution of the terms and structure of 
Chapter 2 of the HS does not definitively indicate whether or not the predecessor to heading 02.10 of 
the HS was characterized by the notion of "prepa ration" and/or "preservation" and/or reflected 
international trade patterns at the time the heading was finalised.  Therefore, we consider that the 
evolution of the terms and structure of Chapter 2 of the HS does not clarify the ordinary meaning of the concession contained in heading 02.10 of the EC Sc hedule.  Further, it is the Panel's view that the 
terms and structure of the HS do not indicate that the concession contained in heading 02.10 is 
necessarily characterized by the notion of long-term preservation. 
Explanatory Notes to the HS 
 Arguments of the parties 
7.206  Brazil  and Thailand  acknowledge that Article 1(a) of the HS Convention does not define the 
HS to include Explanatory Notes to the HS.  Br azil and Thailand submit th at, nevertheless, knowing 
that Explanatory Notes were not part of the HS, in EC – Computer Equipment , the Appellate Body 
intentionally gave them the same interpretative wei ght and status as that given to the HS when it 
stated that the panel in that case should have c onsidered both the HS and its Explanatory Notes.
324  
7.207  In response, the European Communities  does not dispute that parts of the HS that do not 
appear in the EC Schedule – that is, the various HS Notes including Chapter notes and the 
Explanatory Notes – should be taken into account when interpreting the EC Schedule.325  However, 
the European Communities submits that the Explanatory Notes to the HS provide non-authoritative 
guidance and should not be treated the same way as treaty provisions.326 
7.208  With respect to the Explanatory Note to heading 02.10 in the HS , Brazil  and Thailand  state 
that the Note makes it clear that heading 02.10 covers meat that h as been "prepared" in the manner 
described in the heading – that is, through salting, brining, drying or smoking.327  Thailand submits 
that, therefore, any meat that has been prepared in  a manner decribed in the heading must be classified 
under heading 02.10.328  Brazil adds that there is nothing in the Note to indicate that "salting" is a 
process used to ensure [long-term] preservation sin ce the term "preserve" is not mentioned in the 
Note.329  According to Brazil, to read in the requireme nt that salting is a process used to ensure long-
                                                      
323 See para. 7.114 above. 
324 Brazil's oral statement at the s econd substantive meeting, para. 35; Brazil's reply to Panel question 
No. 121; Thailand's second written submission, para. 31; Thailand's reply to Panel question No. 121 referring to 
Appellate Body Report, EC – Computer Equipment , para. 89. 
325 EC's oral statement at the firs t substantive meeting, para. 17. 
326 EC's first written submission, para. 156; EC's oral statement at the second substantive meeting, 
para. 46. 
327 Brazil's first written submission, paras. 118- 119; Brazil's second written submission, para. 29; 
Brazil's oral statement at the second substantive meeting, para. 21; Thailand' s first written submission, para. 120. 
328 Thailand's first written submission, para. 12 0; Thailand's reply to Panel question No. 67. 
329 Brazil's first written submission, para. 120; Brazil's oral statement at the first substantive meeting, 
para. 33.  WT/DS269/R 
 Page 73 
 
 
term preservation would have the effect of reading out the term "prepared" from the Note to heading 
02.10 of the HS. 
7.209  In response, the European Communities  submits that, when viewed as a whole, it is doubtful 
that the term "prepare" was used as a term of art in the Explanatory Note to heading 02.10 in the 
HS.330  In addition, the European Communities subm its that the purpose of the Note is not to 
distinguish between heading 02.10 and headings 02.01 - 02.08 (being the matter at issue in this 
dispute) but, rather, it seeks to distinguish betwee n the specific meats covered by heading 02.09 (pig 
and poultry fat) and all other kinds of meat in Chapter 2.331 
7.210  Thailand  submits in response that the fact that the Note makes reference to the delineation 
between headings 02.09 and 02.10 does not detract from  the intrinsic value of the description that is 
used in that Note.  According to Thailand, the Note  makes it clear that the terms "salted, in brine, 
dried or smoked" are descriptions of the manner in which meat and meat offal have been prepared.332 
7.211  Brazil  and Thailand  refer to the Explanatory Notes to Chapter 2 in the HS , which provide 
that the "fresh" state of meat may include meat and meat offal that is packed with salt as a temporary 
preservative during transport and, therefore, refers to meat whose essential characteristics have not 
been altered through the addition of salt.  They su bmit that, in contrast, the products at issue have 
been deeply and homogenously impregnated with salt.333  Thailand submits that, since fresh meat 
packed with salt as a temporary preservative must be classified as "fresh" meat, meat to which salt has 
been added as more than a temporary preservative must  be classified as something other than "fresh"; 
that is, it must be viewed as "salted" meat under heading 02.10.334  Brazil also submits that nothing in 
the Notes suggests that frozen meat impregnated or prepared in salt must be classified as "frozen" 
meat rather than "salted" meat.  Brazil submits th at, on the contrary, because the reference to salt in 
the Notes is only made with respect to fresh meat, it shows the explicit intention to include salt only in 
relation to fresh meat and in a specific circumstance.335 
7.212  In response, the European Communities  submits that salt cannot act as a preservative, even 
for temporary preservation, if it does not have some type of reaction with the meat in transport.  The 
European Communities submits that, therefore, th e distinction between the addition of salt as a 
temporary preservative and the addition of salt as an ingredient is not obvious.  The European 
Communities submits that the relevant aspect of  the Explanatory Notes should be applied mutatis 
mutandis  to "frozen" meat, with an added salt content.336 
7.213  Brazil  and Thailand  further submit that the Explanatory Notes to Chapter 2 of the HS 
indicate that meat under Chapter 2 is classified acco rding to four states only: fresh; chilled; frozen; 
and, salted/in brine/dried/smoked.337  According to Brazil, this indicates that "frozen" meat and 
"salted" meat are considered two different products  that must be classified in separate headings of 
Chapter 2.338  Brazil maintains that the Explanatory Notes to Chapter 2 do not provide that the "states" 
represent methods of preservation.339  Thailand adds that the state of "fresh" – one of the four states 
listed in the Explanatory Notes – is not a state rela ted to preservation.  Thailand submits that the state 
                                                      
330 EC's first written submission, para. 157. 
331 EC's oral statement at the first substantive meet ing, para. 21; EC's oral statement at the second 
substantive meeting, para. 39. 
332 Thailand's reply to Panel question No. 67. 
333 Brazil's first written submission, para. 141; Th ailand's first written submission, para. 114. 
334 Thailand's first written submission, para. 114.  
335 Brazil's first written submission, para. 140. 
336 EC's first written submission, para. 150. 
337 Brazil's first written submission, para. 125; Th ailand's reply to Panel question No. 79(a). 
338 Brazil's first written submission, para. 125. 
339 Brazil's first written submission, para. 127; Brazil's oral statement at the first substantive meeting, 
paras. 36-37. WT/DS269/R 
Page 74  
 
of "salted, in brine, dried or smoke d" is also not related to preservation.
340  Further, according to 
Brazil, the Explanatory Notes to Chapter 2 and to heading 02.10 indicate that the term "salted" in 
heading 02.10 of the EC Schedule does not mean salted for purposes of long-term preservation.341 
7.214  Brazil also submits that, in illustrating what  kind of meat should be classified under the 
headings of Chapter 16 (as opposed to the headings of Chapter 2), the Explanatory Notes to Chapter 2 
list meat "otherwise prepared or preserved by any process not provided for" in Chapter 2.342  Brazil 
submits that only headings 02.09 and 02.10 relate to meat that has undergone a process of preparation.
343  Brazil also argues that the Explanatory No tes show that classification under Chapter 2 
is determined either by a process of preparation or by a process of preservation.344  Brazil argues that, 
if a product has been "prepared" by a process in Ch apter 2, and has also been  "preserved" by a process 
under that Chapter, the product will be classified acco rding to the process of "preparation", otherwise 
the phrase "prepared or preserved" in the Notes to Chapter 2 would have no meaning.345  Brazil 
submits that, had the structure of Chapter 2 been  based exclusively on "preservation", there would 
have been no need for the inclusion of the term  "prepared" in the Notes because any preparation – 
including that provided for in heading 02.10 – would only serve the purpose of preservation.  
However, according to Brazil, "preparation" is mean t to be something different from and broader than 
"preservation" under the Notes.346 
7.215  With regard to the Explanatory Notes to Chapter 16 in the HS , Thailand  submits that these 
Notes also make it clear that Chapter 2 refers to  products that have undergone certain preparation 
processes ("salted", "in brine", "dried" or "smoke d") or that have undergone preservation processes 
("chilled" or "frozen") or which are in the natura l state and are not prepared or preserved by any 
process ("fresh").347  Thailand states that the Note to Chapter 16 excludes products that are " prepared 
or preserved  by the processes specified in Chapter 2 or 3 or heading 0504."  Thailand submits that, 
since the terms "fresh", "chilled" a nd "frozen" relate to preservation, the terms "salted, in brine, dried 
or smoked" cannot also be interpreted as relating to  preservation because, otherwise, the reference to 
"prepared" in the Note to Chapter 16 would be re ndered inutile.  According to Thailand, the correct 
interpretation would be to refer to "salted, in br ine, dried or smoked" as processes for the purposes of 
preparation  since this reading would give meaning to all the terms in the Explanatory Note to 
Chapter 16.348 
7.216  In response, the European Communities  submits that the Explanatory Notes to Chapter 16 
are inconclusive regarding the classification of the pro ducts at issue since they simply imply that meat 
to which salt alone has been added in order to affe ct taste, as opposed to se asoned meat to which both 
pepper and salt have been added, should be classified  elsewhere than under Chapter 16.  This can only 
mean that such meat should be classified under Ch apter 2, but the Notes do not indicate under which 
heading.349 
                                                      
340 Thailand's second written submission, para. 35.  
341 Brazil's oral statement at the fi rst substantive meeting, para. 5. 
342 Brazil's first written submission, para. 128; Brazil's second written submission, para. 28. 
343 Brazil's first written submission, para. 129. 
344 Brazil's first written submission, para. 132. 
345 Brazil's first written submission, para. 133; Brazil's oral statement at the first substantive meeting, 
para. 39. 
346 Brazil's oral statement at the fi rst substantive meeting, para. 39. 
347 Thailand's first written submission, para. 122. 
348 Thailand's second written submission, para. 36 ; Thailand's reply to Panel question No. 121. 
349 EC's first written submission, para. 154.  WT/DS269/R 
 Page 75 
 
 
7.217  Brazil  and Thailand  conclude that the HS Explanatory Notes offer unequivocal confirmation 
that heading 02.10 applies to meat that has been "prepared" by salting, brining, drying or smoking rather than to meat that has been "preserved" by these processes.
350 
 Comments by the World Customs Organization 
7.218  The WCO states that the classification of products under the HS is based on the wording of 
the legal texts – that is, the terms of the headi ngs and any relative Section, Chapter and Subheading 
Notes and the General Rules of the HS.  The WCO a dds that Explanatory Notes to the HS, which the 
WCO describes as the "official interpretation of the HS", are taken into cons ideration in conjunction 
with the legal texts.351 
 Analysis by the Panel 
7.219  Article 1(a) of the HS Convention provides that:  
"[T]he 'Harmonized Commodity Description and Coding System', hereinafter referred 
to as the 'Harmonized System', means the Nomenclature comprising the headings and 
subheadings and their related numerical c odes, the Section, Chapter and Subheading 
Notes and the  General Rules for the interpretation of the Harmonized System, set out 
in the Annex to this Convention." 
7.220  The Panel notes that the Explanatory Notes are not referred to in Article 1(a) and, therefore, 
do not appear to form part of the HS, which we  have decided to consider as "context" for the 
interpretation of the EC Schedule pursuant to Article 31(2) of the Vienna Convention .  Nevertheless, 
the Panel notes that, in EC – Computer Equipment , the Appellate Body explicitly stated that the panel 
in that case should have considered the Explanator y Notes to the HS in its examination of the EC 
Schedule, even though the non-binding status of thos e Notes had been brought to its attention by one 
of the parties.352  Further, we note that the WCO has indicat ed that the Explanat ory Notes to the HS 
are taken into consideration in conjunction w ith the legal texts when interpreting the HS.353  
Therefore, on the basis of the foregoing, we will examine the Explanatory No tes to the HS for our 
interpretation of the concession contained in headi ng 02.10 of the EC Schedule, bearing in mind as we 
proceed that the Explanatory Notes do not form part of the HS and are non-binding. 
7.221  The Panel first notes that certain aspects of th e Explanatory Notes may be read as indicating 
that the processes referred to in th e concession contained in heading 02 .10 are to be characterized as 
processes for "preparation".  For example, the Expl anatory Note to heading 02.10 of the HS, which 
appears to be most relevant to the present case, states that: 
"This heading applies to all kinds of meat  and edible meat offal which have been 
prepared  as described in the heading, other than pig fat, free of lean meat, and poultry 
fat, not rendered or otherwise extracted (heading 02.09) ... ."354 (emphasis added) 
7.222  In addition, the Explanatory Notes to Chapter 2 refer to the processes listed in Chapter 2 as 
"prepared or preserved" and the Explanatory Notes to Chapter 16 exclude products that are "prepared 
or preserved" by the processes specified, inter alia , in Chapter 2.  These Explanatory Notes indicate 
                                                      
350 Brazil's second written submission, paras. 28 -29; Thailand's second written submission, 
paras. 33-35. 
351 WCO's reply to Panel question No. 1 to the WCO. 
352 See United States' arguments in Appellate Body Report, EC – Computer Equipment , para. 38. 
353 WCO's reply to Panel question No. 1 to the WCO. 
354 The aspects of the Explanatory No tes to the HS upon which the complainants rely are contained in 
Annex I to the EC's oral statement at the first substantive meeting.  The full text of the Explanatory Notes to 
Chapter 2 of the HS can be found in Exhibit BRA-24. WT/DS269/R 
Page 76  
 
that at least some processes referred to in Chapte r 2 result in "preparation" and the Explanatory Note 
to heading 02.10 suggests that the processes referred to in that heading ar e some such processes. 
7.223  Even though the above Explanatory Notes may suggest  that the processes referred to in 
heading 02.10 are processes for the "preparation" of meat, we do not consider that they are 
particularly helpful for our purposes in light of the fact  that it is not clear to us whether the notions of 
"preservation" and "preparation" are mutually  exclusive in the context of heading 02.10.
355  Therefore, 
we consider that the Explanatory Notes to the HS  do not clarify the ordinary meaning of the term 
"salted" in the concession contained in  heading 02.10 of the EC Schedule.  Further, it is our view that 
the Explanatory Notes do not indicate that that concession is necessarily characterized by the notion of long-term preservation. 
General Rules
 
 Arguments of the parties 
7.224  Brazil  and Thailand  note that Article 1(a) of the HS Convention provides that "the 
'Harmonized System', means the Nomenclature co mprising the headings and subheadings and their 
related numerical codes, the Section, Chapter and Subheading notes and the General rules for the 
interpretation of the Harmonized System".  Theref ore, according to Brazil and Thailand, the General 
Rules of the HS are part of the HS and, conseque ntly, also qualify as "context" for the interpretation 
of headings under the EC Schedule.356 
7.225  The European Communities  disputes the applicability of the General Rules for the 
interpretation of the EC Schedule.  According to the European Communities, an application of the 
General Rules cannot displace any conclusions regard ing the interpretation of the EC Schedule that 
might be reached through the application of Articles 31 and 32 of the Vienna Convention .357 
7.226  Regarding General Rule 1,  Thailand  notes that it provides that the classification of a product 
shall be determined according to the terms of th e headings and the releva nt Chapter and heading 
notes.  Thailand submits that the terms of the head ings and the relevant Chapter and heading notes in 
the HS confirm the ordinary meaning of "salted" as relating to a product that contains salt and not a 
product that is preserved by the method of salting.358 
7.227  With respect to General Rule 3, Brazil , Thailand  and the European Communities  concur 
that the condition for its application – namely, that  the products at issue are prima facie classifiable 
under two or more headings – has not been fulfilled in  this case.  The complainants consider that the 
products at issue are classifiable under heading 02. 10 whereas the European Communities considers 
that the products at issue are classifiable under heading 02.07.359 
                                                      
355 In this regard, we recall again our observation in paragraph 7.114 above that there is a certain degree 
of overlap in the definitions of the terms "preparation" and "preservation". 
356 Brazil's reply to Panel question No. 74; Brazil's  second written submission, para. 48; Brazil's reply 
to Panel question No. 121; Thailand's reply to Panel question No. 74; Thailand's reply to Panel question 
No. 121. 
357 EC's oral statement at the second substantive meeting, para. 54. 
358 Thailand's first written submission, para. 124;  Thailand's reply to Panel question No. 121. 
359 Brazil's first written submission, para. 147; Brazil' s reply to Panel question No. 72; Brazil's second 
written submission, para. 49; Thailand's oral statement at  the first substantive meeting, para. 29; Thailand's 
second written submission, para. 44; EC's reply to Panel question No. 72; EC's first written submission 
para. 159.  WT/DS269/R 
 Page 77 
 
 
7.228  Nevertheless, Brazil  and Thailand  submit that the Panel may resort to General Rule 3 if it 
considers that the products at issue fall to be classified under two or more headings of the HS.360  In 
this regard, Thailand notes that the European Comm unities itself appears to consider that the products 
at issue are classifiable under two or more headings given that, in the minutes of a meeting of the EC Customs Code Committee, the Committ ee stated that the "[products at issue] correspond at the same 
time to the wording of the headi ng 02.07 (frozen) and to the wording of the heading 02.10 (salted)."
361 
7.229  Brazil and Thailand note that Ge neral Rule 3(a) provides that the heading that provides the 
most specific description of a good is to be preferred to a heading that provides a more general description.
362  Brazil submits that the adjective "specifi c" means "clearly defined", "relating to, 
characterizing, or distinguishing a species"  or "special, distinctive, or unique".363  Brazil and Thailand 
submit that salting confers meat with specific, distin ctive characteristics that distinguish salted meat 
from unsalted meat.364  In support, they point to the different  flavour and texture of salted meat which 
affects consumer choices, the fact that meat that has been deeply and homogenously impregnated with 
salt cannot be thoroughly unsalted and the fact that  such meat has more limited and specific uses.365  
Brazil and Thailand submit that, in contrast, the freezing of chicken does not modify the 
characteristics of the meat.366 
7.230  Further, Brazil submits that the reference to  poultry in heading 02.07 does not make it more 
specific than heading 02.10.  Braz il submits that the European Comm unities has not disputed the fact 
that both subheadings 0207.41.10 and 0210.90.20 incl ude chicken meat.  Hence, there is no question 
that chicken meat is a product covered by both s ubheadings.  In addition, Brazil argues that, because 
the term "meat" in heading 02.10 includes all kinds  of meat, heading 02.10 could easily have referred 
specifically to meat of swine, bovine animals, horses, lambs, goats, geese, turkeys, chicken, etc.367  
Thailand submits that while, in abstract terms, poultry is more specific than meat, this is not relevant 
for the purposes of determining the appropriate head ing for the classification of the products at issue 
in this dispute as an analysis of the headings show that heading 02.10 is more  specific for all types of 
meat that are salted, in brine, dried or smoked.368  Brazil also points out that the term "salted" is what 
specifically describes the product at issue in this  case given the way Chapter 2 is structured.369  Thus, 
according to Brazil and Thailand, heading 02.10 is mo re specific within the meaning of General Rule 
3(a) because, in their view, the fact that a product is "salted", "in brine", "d ried" or "smoked" is a 
more specific criterion than the type of meat for purpose of customs classification.370 
7.231  In response, the European Communities  submits that all poultry is meat but not all meat is 
poultry.  Consequently, according to  the European Communities, the re ference to "poultry" is more 
specific for the purposes of General Rule 3(a).371  The European Communities submits that, in any 
                                                      
360 Brazil's comments on EC's reply to Panel question No. 121 quoting EC's reply to Panel question 
No. 76; Thailand's second written submission, paras. 42-44. 
361 Thailand's second written submission, para. 46 referring to Exhibit THA-22.  Exhibit THA-22  
contains the Minutes of the EC's Customs Code Committee dated 25 January 2002. 
362 Brazil's first written submission, para. 150; Th ailand's first written submission, para. 127. 
363 Brazil's first written submission, para. 150. 
364 Brazil's second written submission, paras. 50-51; Thailand's second written su bmission, paras. 24-29 
and 45-47. 
365 Brazil's first written submission, paras. 152-153; Brazil's reply to Panel question No. 72; Thailand's 
first written submission, paras. 128 and 131; Tha iland's second written submission, paras. 24-29. 
366 Brazil's first written submission, para. 154; Th ailand's first written submission, para. 129. 
367 Brazil's reply to Panel question No. 72. 
368 Thailand's second written submission, paras. 26-27. 
369 Brazil's second written submission, para. 50. 
370 Brazil's second written submission, paras. 50 -51; Thailand's second written submission, 
paras. 27-28; Thailand's oral statement at the second substantive meeting, para. 22. 
371 EC's reply to Panel question No. 72. WT/DS269/R 
Page 78  
 
event, it sees no reason why "salting" should be rega rded as more specific than "freezing" when the 
words both refer to processes that can be applied to meat.
372 
7.232  Brazil  and Thailand  submit that, if the classification of the products at issue cannot be 
resolved by General Rule 3(a) and, given that Genera l Rule 3(b) is not applicable in this case, General 
Rule 3(c), should be applied.  They note that Gene ral Rule 3(c) requires that the products at issue be 
classified under the heading that occurs last in numerical order.373  They submit that the application of 
General Rule 3(c) will lead to the classification of frozen salted chicken under heading 02.10 since 
that heading occurs after heading 02.07 in terms of numerical order.374 
7.233  In response, the European Communities  submits that the meaning of the term "salted" in 
heading 02.10 in the EC Schedule must be interp reted in accordance with Article 3.2 of the DSU by 
applying the customary rules of treaty interpretation set forth in Articles 31 and 32 of the Vienna 
Convention .  The European Communities submits that  General Rule 3(c) is a mechanistic non liquet  
rule, whose application is precluded by Article 3.2 of the DSU.  According to the European Communities, in a non liquet situation, the general rules regard ing the burden of proof in WTO law 
would require the Panel to err on the side of  the respondent – in this case, the European 
Communities.
375 
7.234  Thailand  responds by submitting that the application of General Rule 3(c) does not lead to a 
non liquet situation – that is, a situation resulting in "a tribunal's nondecision resulting from the lack 
of clarity of the law applicable to the dispute at hand."376  Thailand submits that the purpose of 
General Rule 3(c) is not to determine the meani ng of heading 02.10.  Rather, it assumes that the 
product in question falls under the scope of two or more headings.  Thailand submits that, in any 
event, the characterization of a rule as a "mechanisti c" tool does not diminish its value as a means of 
identifying the proper classification of a product.377  Further, according to Thailand, General 
Rule 3(c), is a general rule of interpretation, wh ich can be applied in a ha rmonious manner together 
with the customary rules of interpretation of pub lic international law since the customary rules of 
interpretation are commonly understood to mean those set out in the Vienna Convention and given 
that the Appellate Body has specifically stated th at a panel should examine the HS, including its 
General Rules. 
 Comments by the World Customs Organization 
7.235  The WCO states that, for the purposes of General Rule 3(a), it could be argued that heading 
02.07 of the HS provides the more "specific" descri ption since it refers to "meat of poultry, frozen", 
whereas heading 02.10 of the HS refers to "meat, salte d", in general.  However, the WCO states that it 
could also be argued that the reference to the specific type of meat (poultry) in heading 02.07 should 
not be taken into consideration since it is th e processing (freezing and salting) that matters when 
determining the classification of the products at issue in this case, giving rise to a possibility of heading 02.10 providing a more specific description.
378 
                                                      
372 EC's oral statement at the second substantive meeting, para. 58. 
373 Brazil's oral statement at the second substan tive meeting, para. 34; Thailand's second written 
submission, para. 48. 
374 Brazil's first written submission, para. 158; Brazil's oral statement at the second substantive meeting, 
para. 34; Thailand's first written submission, para. 132; Tha iland's oral statement at the first substantive meeting, 
para. 29; Thailand's second written submission, para. 48; Thailand's oral statement at the second substantive 
meeting, para. 24. 
375 EC's reply to Panel question No. 74. 
376 Thailand's oral statement at the second substantiv e meeting, para. 25 referring to the definition of 
"non liquet " in Black's Law Dictionary . 
377 Thailand's second written submission, para. 49. 
378 WCO's reply to Panel question No. 6 to the WCO.  WT/DS269/R 
 Page 79 
 
 
 Analysis by the Panel 
7.236  The Panel notes that Article 1(a) of the HS Convention provides that the HS is comprised of 
the headings and subheadings of the HS and their related numerical codes, the Section, Chapter and 
heading notes and the General Rules.  Given that the General Rules clearly form a part of the HS and, 
in light of our conclusion above in  paragraph 7.189 that the HS is relevant to the interpretation of 
heading 02.10 of the EC Schedule, we will examine the General Rules to determine whether they can 
assist us in interpreting heading 02.10 of the EC Sc hedule.  However, we note that, in light of our 
mandate in this case, we will only examine those Ge neral Rules to which reference has been made by 
the parties.  In particular, we will only make refe rence to General Rule 1 and General Rule 3, being 
the General Rules that have been specifically invo ked by the complainants in the context of this 
dispute.379 
7.237  We commence our analysis with Gene ral Rule 3, which provides that: 
"When by application of Rule 2(b) or for any other reason, goods are, prima facie , 
classifiable under two or more headings, classification shall be effected as follows: 
(a) The heading which provides the most sp ecific description shall be preferred to 
headings providing a more general description.  However, when two or more 
headings each refer to part only of the mate rials or substances contained in mixed or 
composite goods or to part only of the ite ms in a set put up for retail sale, those 
headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. 
(b) Mixtures, composite goods consisting of  different materials or made up of 
different components, and goods put up in sets for retail sale, which cannot be 
classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essentia l character, insofar as this criterion is 
applicable. 
(c) When goods cannot be classified by refe rence to 3(a) or 3(b), they shall be 
classified under the heading which occurs last in numerical order among those which 
equally merit consideration." 
7.238  As regards the question of whether or not General Rule 3 applies, all the parties appear to be 
in agreement that a textual and contextual analysis of the relevant headings indicates that the products 
at issue in this dispute are not prima facie classifi able under two or more headings.  Accordingly, we 
will proceed on the same assumption with the result that  we will not apply Genera l Rule 3.  Given our 
conclusion that General Rule 3 is inapplicable, we  do not consider it necessary to address the various 
arguments that have been advanced by the parties regarding that Rule. 
7.239  General Rule 1 provides that: 
"The titles of Sections, Chapters and sub-Ch apters are provided for ease of reference 
only; for legal purposes, classification shall be determined according to the terms of 
the headings and any relative Section or Ch apter Notes and, provided such headings 
or Notes do not otherwise require, according to the following provisions ..." 
7.240  With regard to General Rule 1, as explaine d above in paragraphs 7.205 and 7.223, we 
consider that, on the basis of the evidence we have c onsidered thus far, the terms of the headings in 
                                                     
 
379 In any event, we note that General Rules other than Rules 1 and 3 do not appear to be relevant in 
light of the facts of this case. WT/DS269/R 
Page 80  
 
question and the relevant Chapter and heading notes of the HS do not provide us with guidance as to 
what precisely is meant by the term "salted" in add ition to what we already learned from the ordinary 
meaning of that term as it appears in the concessi on contained in heading 02.10 of the EC Schedule. 
Overall appraisal of the Harmonized System
 
7.241  The Panel recalls that, in paragraph 7.190 a bove, we stated that we would consider each 
aspect of the HS individually but that we would finally appraise all these aspects in totality.  In the 
Panel's view, the terms and structure of the HS a nd the evolution of heading 02.10 of the HS do not 
provide indications as to what the term "salted" me ans in addition to what we already know following 
our examination of the ordinary meaning of that term as it appears in the concession contained in 
heading 02.10 of the EC Schedule.  Further, the Pane l considers that the terms and structure of the HS 
do not clearly indicate whether the notions of "p reservation" and/or "preparation" characterize 
heading 02.10.  In any event, the Panel is of the view that the terms and structure of the HS do not 
indicate that heading 02.10 is necessarily characteri zed by the notion of long-term preservation.  As 
for the non-binding Explanatory Notes to the HS, the Panel considers that they do not help to clarify the ordinary meaning of the term "salted" in the concession contained in heading 02.10 of the EC 
Schedule.  With respect to the General Rules i nvoked by the complainants, namely General Rule 1 
and General Rule 3, we do not consid er that General Rule 3 is applicab le to this case.  With respect to 
General Rule 1, on the basis of the evidence we have  considered thus far, we do not consider that it 
provides guidance as to what precisely is meant by th e term "salted" in addition to what we have 
already learned from the ordinary meaning of that te rm as it appears in the relevant concession in the 
EC Schedule.  Therefore, overall, the Panel cons iders that the HS does not further clarify the 
interpretation of the concession contained in heading 02.10 of the EC Schedule. 
(iv) Other WTO Members' schedules 
Arguments of the parties
 
7.242  Brazil  refers to tariff concessions for heading 02.10 found in the schedules of some WTO 
Members that are major importers of chicken products  from Brazil.  Brazil submits that, as far as it is 
aware, there are no significant markets, other th an the European Commun ities, that import frozen 
salted chicken cuts for further processing.  Brazil s ubmits that, therefore, it was unable to obtain 
details of classification practice of other Member s regarding imports of frozen salted chicken meat.380 
7.243  The European Communities  submits that, because tariff headings in WTO Members' 
schedules are derived from the HS, which was wi dely adopted among the parties to the Uruguay 
Round negotiations, the European Communities assumes that the schedules of most, if not all, other 
WTO Members are identical in so far as the headi ngs in Chapter 2 are concerned.  The European 
Communities submits that this is the case for a number of schedules including those of Brazil, 
Thailand and the United States.  The European Comm unities submits that the only countries that have 
any practice of classifying the products at i ssue are Brazil, Thailand and the European 
Communities.381 
Analysis by the Panel  
7.244  To the extent that the terms of the relevant  concessions in other WTO Members' schedules are 
identical to the terms of the concession contained in  heading 02.10 of the EC Schedule and of the HS, 
we do not consider that they can assist us any furthe r in the analysis we have undertaken thus far.  
Regarding the importance that should be attach ed, if any, to classification practice under the 
                                                      
380 Brazil's reply to Panel question No. 59 referring to Exhibit BRA-37. 
381 EC's reply to Panel question No. 59.  WT/DS269/R 
 Page 81 
 
 
equivalent of heading 02.10 of the EC Schedule in  other Members' schedules, this is discussed below 
in section VII.G.3(c). 
(v) Summary and conclusions regarding "context" 
7.245  The Panel recalls that it considered various aspects of the EC Schedule as "context" under 
Article 31(2) of the Vienna Convention  to determine whether the terms other than "salted" in heading 
02.10 of the EC Schedule, the structure of Chapte r 2 of the EC Schedule and other parts of the EC 
Schedule could assist us in our interpretation of the term "salted" in the concession contained in 
heading 02.10 of the EC Schedule.  We also cons idered as "context" the terms and structure of the 
HS, and particularly, the evolution of heading 02.10 of the HS, the non-binding Explanatory Notes to the HS, and General Rules 1 and 3.  Finally, we considered the schedules of other WTO Members as 
"context".  In our view, none of the foregoing added to conclusions that we already drew regarding 
the ordinary meaning of the term "salted" in the concession contained in heading 02.10 of the EC Schedule other than to indicate that, on the basis of  the terms of heading 02.10, the structure and the 
other parts of the EC Schedule as well as the terms and structure, the Explanatory Notes and the General Rules of the HS do not indicate that that  concession is necessarily characterized by the notion 
of long-term preservation.  Therefore, we will now tu rn to an analysis of matters to be taken into 
account together with context pursuant to Article 31(3) of the Vienna Convention . 
(c) Matters to be taken into account together  with the context: Article 31(3) of the Vienna 
Convention  
(i) Subsequent practice: Article 31(3)(b) of the Vienna Convention 
Classification practice since 1994
 
Whose classification practice should be cons idered for the interpretation of the EC 
Schedule? 
 Arguments of the parties 
7.246  Brazil  submits that, even though all Members must agree on the scope of a tariff concession 
made by the European Communities in its Schedule,382 what is under examination is the meaning and 
scope of the tariff concession for h eading 02.10 in the EC Schedule.383  Brazil submits that, therefore, 
six years of concordant, common and consistent classification of frozen salted chicken cuts under 
heading 02.10 by EC customs authorities is suffici ent to establish subsequent practice for the purposes 
of Article 31(3)(b) of the Vienna Convention .384  Brazil acknowledges that the subsequent 
classification practice of other WTO Members in the a pplication of their schedul es may be relevant in 
interpreting tariff concessions in the EC Schedule in cases where, for example, other Members import 
the product at issue and the scope and meaning of the tariff concession in the schedules of those other 
Members is similar or identical to the scope and meaning of the tariff concession in the EC 
Schedule.385  However, Brazil submits that this is not th e case for "salted" meat of heading 02.10 in 
the EC Schedule because, through EC Regulation No. 535/94, the European Communities inserted a 
specific definition that differs from that found in most, if not all, Members' schedules.386  Brazil 
submits that, therefore, heading 02.10 of the EC Schedule is unique and distinct from heading 02.10 
of every other WTO Member's schedule.387 
                                                      
382 Brazil's reply to Panel's question No. 16. 
383 Brazil's reply to Panel question No. 77; Br azil's second written submission, para. 75. 
384 Brazil's second written submission, para. 69. 
385 Brazil's oral statement at the seco nd substantive meeting, para. 42. 
386 Brazil's replies to Panel's question Nos. 16 and 77. 
387 Brazil's oral statement at the seco nd substantive meeting, para. 41. WT/DS269/R 
Page 82  
 
7.247  Thailand  submits that EC customs classification practice is not relevant in order to ascertain 
the meaning of heading 02.10 because the unilate ral classification practices of Members cannot be 
considered as subsequent practice establishing "t he agreement of the parties" regarding the 
interpretation of the tariff heading at issu e for the purposes of Article 31(3)(b) of the Vienna 
Convention .
388  Thailand is of the view that reliance upon such practice is of limited value in order to 
determine the terms of a multilaterally agreed  concession, such as heading 02.10 in the EC 
Schedule.389 
7.248  According to the European Communities , subsequent practice of one party alone cannot 
determine the interpretation of a treaty.  The Eu ropean Communities submits that, if matters were 
otherwise, the European Communities could claim su pport for its interpretation of the EC Schedule by 
reference to a post-2002 period during which there has been a consistent EC practice of classifying 
frozen chicken cuts with added salt under headi ng 02.07.  The European Communities argues that, 
since all parties to this dispute accept the relevanc e of the HS in interpreting the EC Schedule, and 
since the HS is also relevant to the interpretation of  the schedules of all, or almost all, WTO Members, 
the experience of all WTO Members is relevant.390 
7.249  In response, Brazil  submits that the fact that negotiations of WTO Members' schedules were 
based on the HS does not mean that all concessions  negotiated were the same because the starting 
point and the end point of negotiations are not necessar ily the same.  Brazil submits that they were not 
the same in the case of heading 02.10.391  Brazil further submits that, even though part of the 
European Communities' CN is based on the HS, one cannot say that the CN is identical to the HS.392 
 Analysis by the Panel 
7.250  The Panel recalls that Article 31(3)(b) of the Vienna Convention  refers to "any subsequent 
practice in the application of the treaty which est ablishes the agreement of the parties regarding its 
interpretation".  In Japan – Alcoholic Beverages II , the Appellate Body stated that "subsequent 
practice" within the meaning of Article 31(3)(b) of the Vienna Convention  entails a "concordant, 
common and consistent" sequence of acts or pron ouncements which is sufficient to establish a 
discernible pattern.393 
7.251  In essence, Brazil argues that, in the context of th is case, since the EC Schedule is at issue, it 
is only the European Communities' practice that is  relevant for the identification of "subsequent 
practice" within the meaning of Article 31(3)(b) of the Vienna Convention .  On the other hand, the 
European Communities argues that the subsequent practice of one party alone cannot determine the 
interpretation of a treaty.  Therefore, the main qu estion for the Panel's determ ination here is whether 
the reference to "common" and "concordant" practic e by the Appellate Body necessarily means that 
all WTO Members must have engaged in a particular  practice in order for it to qualify as "subsequent 
                                                      
388 Thailand's oral statement at the first substantive meeting, para. 20; Thailand's second written 
submission, para. 68. 
389 Thailand's oral statement at the first substantive meeting, para. 21. 
390 EC's second written submission, para. 50. 
391 Brazil's oral statement at the seco nd substantive meeting. para. 45. 
392 Brazil's oral statement at the second  substantive meeting. paras. 46-48. 
393 Appellate Body Report, Japan – Alcoholic Beverages II , page 13 (DSR 1996: I, 97 at 106).  The 
Panel also notes that Ian Sinclair has stated that "[i] t should of course be stressed that paragraph 3(b) of 
Article 31 of the Convention does not cover subsequent practice in general, but only a specific form of subsequent practice – that is to say, concordant subsequent practice common to all the parties": Ian Sinclair, The 
Vienna Convention on the Law of Treaties , Manchester University Press, 2
nd edition (1984) p. 138.  In addition, 
Anthony Aust has stated that "[h]owever precise a text appears to be, th e way in which it is actually applied by 
the parties is usually a good indication of what they understand it to mean, provided the practice is consistent, 
and is common  to, or accepted by all th e parties": Anthony Aust, Modern Treaty Law and Practice , Cambridge 
University Press, (2000) p. 194.  WT/DS269/R 
 Page 83 
 
 
practice" under Article 31(3)(b) of the Vienna Convention  or whether the practice of a sub-set of the 
entire WTO-membership, including the practice of one Member only, may suffice.394 
7.252  We note that the International Law Commission has stated that: 
"The [original text of Article 31(3)(b)] spoke of a practice which 'establishes the 
understanding of all the parties'.  By omitti ng the word 'all', the Commission did not 
intend to change the rule.  It considered  that the phrase 'the understanding of the 
parties' necessarily means the 'parties as a w hole'.  It omitted the word 'all' merely to 
avoid any possible misconception that every party must individually have engaged in 
the practice where it suffices that it should have accepted the practice."395 
7.253  The above statement indicates that it is not n ecessary to show that all signatories to a treaty 
must have engaged in a particular practice in order for it to qualify as subsequent practice under 
Article 31(3)(b) of the Vienna Convention .  Rather, it may be sufficient to  show that all parties to the 
treaty have accepted the relevant practice.  In our view, such acceptance may be deduced from a 
party's reaction or lack of reaction to the practice at issue.396  We consider that such an approach 
makes practical sense especially in the context of  GATT schedules that are particular to each WTO 
Member.  If, in contrast, it were necessary to show the existence of practice common to all parties to a 
treaty (in this case, all 148 Members of the WTO) in order to demonstrate the existence of "subsequent practice" for the purposes of Article 31(3)(b) of the Vienna Convention , it is highly 
unlikely that subsequent practice could ever be pr oved in the WTO context with respect to schedules. 
7.254  That is not to say that, with respect to this case, other WTO Members' practice is necessarily 
irrelevant.  In this regard, we note that, in the EC – Computer Equipment  case, the Appellate Body 
stated that: 
"The purpose of treaty interpretation is to establish the common  intention of the 
parties to the treaty.  To establish this intention, the prior practice of only one of the 
parties may be relevant, but it is clearly of more limited value than the practice of all parties.  In the specific case of interpretation of a tariff concession in a Schedule, the 
classification practice of the importing Member, in fact, may be of great importance.  
However, the Panel was mistaken in findi ng that the classification practice of the 
United States was not relevant."
397 
In our view, the Appellate Body's statement confirms the importance of the classification practice of 
the importing Member whose schedule is being inte rpreted.  However, the Appellate Body also 
indicated that the classification practice of othe r WTO Members, including the exporting Member's 
practice, may be relevant. 
7.255  The Panel notes that it is the EC Schedule that is at issue in this case and not the schedules of 
other WTO Members.  The Panel further notes that it has not been provided any evidence to indicate 
that WTO Members protested against the EC classification practice in question from 1996 - 2002, being the period during which Brazil submits cons istent practice on the part of the European 
Communities existed.  (This classification practice is discussed by us in more detail below in 
paragraph 7.265 et seq ).  Further, the European Communiti es itself has stated that the only WTO 
Members that have any practice of classifying th e products at issue are Brazil, Thailand and the 
                                                     
 
394 We deal with the question of "consistency" of practice in paragraph 7.258 et seq  below. 
395 Yearbook of the International Law Commission  (1966) Vol. II, p. 222, para. 15. 
396 Mustafa Yasseen states that: "... acceptance by a part y may be 'deduced from that party's reaction or 
lack of reaction to the practice at i ssue'."  Mustafa Yasseen, "L'interpréta tion des Traités d'après la Convention 
de Vienne sur le Droit des Traités" in Recueil des Cours de l'Académie de Droit International , (1974) Vol. III, 
p. 49, para. 18. 
397 Appellate Body Report, EC – Computer Equipment , para. 93. WT/DS269/R 
Page 84  
 
European Communities.
398  It appears that, among these Members, the European Communities is the 
only one that imports the products at issue.399  Therefore, in our view, it would be reasonable to 
conclude that EC classification practice alone with re spect to the concession at issue in this case could 
be considered as "subsequent practice" for the purposes of Article 31(3)(b) of the Vienna Convention .  
Nevertheless, in light of the comment s made by the Appellate Body in EC – Computer Equipment , to 
the extent that we consider it relevant, we will al so make reference to the evidence of classification 
practice of other WTO Members that is available to us. 
7.256  Regarding the European Communities' argument that the subsequent practice of one party 
alone cannot determine the interpretation of a tr eaty because, otherwise, the European Communities 
could claim support for its interpretation of its Sc hedule by reference to a post-2002 period during 
which it claims there has been a consistent EC prac tice of classifying frozen chicken cuts with added 
salt under heading 02.07, we note that this argument tends to be undermined by the fact that the post-
2002 practice cannot be construed as "concordant" and "common" because the complainants have 
objected to such practice and those objecti ons are at the heart of this dispute. 
7.257  The Panel now turns to the evidence of cl assification practice that is before us. 
Classification practice: Imports into the EC 
 Arguments of the parties 
7.258  Regarding the evidence of "subsequent practice" that allegedly exists , Thailand  submits that 
from 1996 to mid-2002, Thai frozen salted boneless chic ken cuts were classified by the European 
Communities as "salted" meat under subheading 0210.90.20 at the ad valorem  tariff rate of 15.4%.400 
7.259  Brazil  refers to statistics to show that, from  1998 - 2002, until EC Regulation No. 1223/2002 
became effective, EC customs authorities classified  and issued BTIs for frozen salted chicken meat 
from Brazil under subheading 0210.90.20 of the CN.401 
7.260  The European Communities  accepts that a number of BTIs were issued by EC member 
State customs authorities (principally Hamburg in  Germany, Rotterdam in the Netherlands and 
various offices in the United Kingdom), which cl assified the products at issue under subheading 
0210.90.  The European Communities further accepts that, given the commercial importance of some 
of the customs offices – namely, Hamburg and Rott erdam – substantial trade entered the European 
Communities under this incorrect interpretation.  However, the European Communities submits that 
this interpretation was not follo wed in other EC customs offices.402  The European Communities 
further submits that BTIs issued by national customs authorities from 1996 onwards, which classified frozen chicken cuts with added salt under heading 02 .10, must be seen against a background in which 
a legal principle based on a criterion of preservation h as been repeatedly enunci ated by the European 
Communities, both legislatively and judicially.
403 
7.261  In response to a request by the Panel, th e European Communities submits that it cannot 
identify any BTIs of instances where the products at  issue were classified under heading 02.07 rather 
than under heading 02.10 before the introduction of EC Regulation No. 1223/2002 and EC Decision 
2003/97/EC.404  The European Communities argues that, in  any event, information taken from BTIs 
                                                      
398 EC's reply to Panel question No. 59. 
399 In its reply to Panel question No. 59, Brazil states that "[t]o the best of ou r knowledge, there are no 
significant markets, other than the EC, that import frozen salted chicken cuts for further processing." 
400 Thailand's first written submission, para. 7. 
401 Brazil's first written submission, paras. 177-178; Exhibit BRA-14. 
402 EC's first written submission, paras. 52, 91-92. 
403 EC's first written submission, para. 178. 
404 EC's reply to Panel question No. 117.  WT/DS269/R 
 Page 85 
 
 
cannot be relied upon as an indicator of the pattern of trade since they merely enable importers to have advance knowledge of the tariff classification which customs authorities consider is applicable to 
their products.
405  The European Communities submits that a BTI gives no indication of the volume of 
imports to which it is applied.406  The European Communities adds that it is possible under EC law to 
withdraw an application for a BTI where the outco me is considered unfavourable by the importer.407  
The European Communities further explains that  traders who have doubts about a particular 
classification are major users of BTIs whereas those dealing in well-established products do not bother with them.
408  The European Communities submits that, for the most part, the classification of 
products under heading 02.10 was uncontroversial and, therefore, did not lead to requests for BTIs.  
The European Communities further submits that th e interpretation of heading 02.10 as applying to 
products that were salted,  but not for preservation, was only followed in a few member States whereas 
a significant volume of trade of products classified  under heading 02.10 which were salted, dried or 
smoked for preservation continued.  In support of th is latter point, the European Communities refers 
to Exhibit EC-26  which contains a BTI issued by Spanish customs authorities.  The European 
Communities submits that this BTI clearly indicates that, in order for a product to be classified under 
heading 02.10, it must be preserved.409 
7.262  In response, Brazil  submits that BTIs contain tariff info rmation issued by customs authorities 
of EC member States that is binding on the admini stration of all EC member States.  According to 
Brazil, BTIs are easily accessible by EC authorities and BTI holders (importers) but not by non-EU producers/exporters.  Brazil also submits that, despite  a request from the Panel and requests by Brazil, 
the European Communities has not indicated the volum e of total imports of frozen salted chicken cuts 
that were classified under heading 02.10 of the EC Schedule.
410  Further, according to Brazil, the 
European Communities has failed to provide BTIs or  any supporting material to support the allegation 
that no customs office within the European Communities classified the product at issue under 
subheading 0210.90.411  Brazil notes that, under Article 13 of the DSU, the Panel has the right to 
request this information from the European Communities.  Brazil further notes that, in Canada – 
Aircraft , the Appellate Body concluded that Members are "under a duty and an obligation to 'respond 
promptly and fully' to requests made by panels  for information under Article 13.1 of the DSU."412  
Brazil submits that, in addition, the Appellate B ody made clear that adverse inferences could and 
should be drawn in cases of  refusal to cooperate.413  Brazil also submits that, even if an application for 
a BTI was withdrawn by the importer, the EC Commission – or customs authorities of EC member States – would at least have access to the written application.
414  As regards the BTI referred to by the 
European Communities contained in Exhibit EC-26, Brazil argues that the product the subject of that 
BTI differs from the products at issue in this case.  Brazil submits that, therefore, there is no evidence 
that the products at issue were classified by certain EC customs offices under heading 02.07 rather 
than under heading 02.10.415 
7.263  As for how the evidence of practice that  allegedly exists should be interpreted , according to 
Brazil  and Thailand , classification practice for the products at issue under heading 02.10 by EC 
                                                      
405 EC's second written submission, para. 51; EC's reply to Panel question No. 117. 
406 EC's second written submission, para. 51. 
407 EC's second written submission, para. 51; EC's reply to Panel question No. 117. 
408 EC's second written submission, para. 51; EC's reply to Panel question No. 117. 
409 EC's reply to Panel question No. 53. 
410 Brazil's second written submission, para. 72. 
411 Brazil's second written submission, para. 71; Braz il's reply to Panel question No. 120; Brazil's 
comments on the EC's reply to Panel question Nos. 117 and 120. 
412 Brazil's comments on the EC's reply to Panel ques tion No. 117 referring to Appellate Body Report, 
Canada – Aircraft , para. 187. 
413 Brazil's comments on the EC's reply to Panel ques tion No. 117 referring to Appellate Body Report, 
Canada – Aircraft , para.204. 
414 Brazil's comments on the EC's reply to Panel question No. 117. 
415 Brazil's comments on the EC's reply to Panel question No. 117. WT/DS269/R 
Page 86  
 
customs authorities constituted a concordant, common and consistent sequence of acts that lasted over 
six years, beginning shortly after the conclusion of the Uruguay Round, i.e. in 1996, and ending in 
2002, when the measures at issue were adopted by the European Communities.
416  Brazil submits that 
this six-year practice was sufficient to establish a discernible pattern implying the agreement of all Members on the scope of heading 02.10 of the EC Schedule.
417  Brazil submits that the European 
Communities itself has acknowledged that a number of BTIs were issued by EC member State 
customs authorities classifying the products at issu e under heading 02.10, particularly in Germany, the 
Netherlands, and the United Kingdom.  According to Brazil, although the European Communities 
alleges that not all customs authorities in the sa me or other EC member States followed that 
interpretation, the European Communities has admitted  that the customs offices that did classify the 
product under heading 02.10 are commercially important in the European Communities and that 
"substantial"  trade entered the Community under heading 02.10 through them.418  Thailand notes that 
the EC Commission has an obligation under Article X:3(a) of the GATT 1994 to ensure that EC 
customs laws are applied uniformly.  The EC Commi ssion has the power to intervene if EC member 
States do not apply a uniform classification but, according to Thailand, the EC Commission failed to 
intervene in the matter at the heart of this dispute until 2002.  Thailand submits that this suggests that 
the European Communities had no objections to th e classification of the product at issue under 
heading 02.10.  Thailand further submits that the European Communities was aware that customs 
authorities in several EC member  States had issued BTIs classifying frozen salted chicken under 
heading 02.10 in accordance with  the criteria specified in Additional Note 7 of the CN.419 
7.264  In response, the European Communities  states that it does not accept that the erroneous 
classification by certain EC customs offices co uld have altered the European Communities' 
international obligations, nor that it could constitute  practice that might be relevant in the sense of 
Articles 31 or 32 of the Vienna Convention .  The European Communities submits that it did not wait 
until 2002 (when EC Regulation No. 1223/2002 was en acted) to address the problem of erroneous 
classification, since it only became evident to EC officials that there was a problem during 2001.  
According to the European Communities, this delay in becoming aware of the problem was 
attributable to the fact that the tariff line under wh ich the imports were classi fied was "sa lted meats, 
other" so that the EC Commission could not tell wh at products were entering under this heading, and 
it was not until 2000 that there was a substantial l eap in the relevant statistics.  The European 
Communities submits that, even then, it was still no t known that the products the subject of the 
erroneous classification were not salted for preserva tion.  According to the European Communities, 
this only became apparent after further investig ation.  The European Communities also notes that 
roughly 30,000 BTIs are issued each year, that th ere were substantial problems communicating BTIs 
as a result of a lack of interoperability of comput er systems and that the EC Commission only had one 
official and two administrative assistants monitoring all issues with respect to the first 40 chapters of 
the CN during the period prior to 2001.420  The European Communiti es submits that it has both 
imported and exported subs tantial quantities of frozen chicken meat for many years and that it was 
always classified under heading 02.07.421 
                                                      
416 Brazil's second written submission, para. 76; Braz il's oral statement at the second substantive 
meeting, para. 40; Thailand's second written submission, para. 73. 
417 Brazil's second written submission, para. 76. 
418 Brazil's second written submission, para. 70. 
419 Thailand's oral statement at the first substantive meeting, para. 42. 
420 EC's reply to Panel question No. 54. 
421 EC's first written submission, paras. 52, 57 and 91-92.  WT/DS269/R 
 Page 87 
 
 
 Analysis by the Panel 
7.265  Here, the Panel will consider whether or not there was evidence of "consistent" classification 
practice on the part of the European Communities w ith respect to the products at issue during the 
period 1996 - 2002.422 
7.266  By way of background, we note that, in EC – Computer Equipment , the Appellate Body 
pointed out that the panel in that case attributed special importance to the classification practice of 
two EC member States, which the panel considered  represented the "largest" and "major" markets for 
the product in question.  Th e Appellate Body criticized this approach noting that: 
"[T]he European Communities constitutes a customs union, and as such, once goods 
are imported into any Member State, they ci rculate freely within the territory of the 
entire customs union.  The export market, th erefore, is the European Communities, 
not an individual Member State."423 
The Appellate Body further suggested that practice mu st be truly consistent in order to qualify under 
Article 31(3)(b) of the Vienna Convention .  More particularly, the Appellate Body seemed to suggest 
that evidence that products were "generally" classifi ed under a particular heading is insufficient if 
there is also evidence of classification under another heading.424 
7.267  While the Panel agrees that, in the context of  the present case, it would be best to have 
evidence of classification practice amongst all EC me mber States that is fully consistent, from a 
practical perspective, in all like lihood, such evidence will be extremely difficult to obtain.  In the 
absence of such complete evidence, we consider th at evidence of consistent practice that covers a 
major proportion of importation of the products at issue into the European Communities, at the least, 
would provide a reasonable indication  of consistent practice for the purposes of Article 31(3)(b) of the 
Vienna Convention .425 
7.268  Turning now to the facts of this case, the Pane l has at its disposal three separate sets of 
evidence that have been adduced by the parties regarding EC classification practice relating to the 
concession contained in heading 02.10 of the EC Sche dule.  In particular, the Panel has before it: 
(a) the European Communities' acknowledgement that, during the relevant period, certain EC customs 
offices were classifying the products at issue under heading 02.10; (b) a number of BTIs relating to 
the classification by EC customs authorities under head ing 02.10, including some BTIs relating to the 
products at issue as well as to some other products; a nd (c) three sets of minutes of the meetings of the 
EC Customs Code Committee concerning classifica tion under heading 02.10.  In our view, it is 
necessary to review the various pieces of evidence in their totality prior to forming a conclusion as to 
whether or not the EC classification practice can be viewed as "consistent" for the purposes of 
Article 31(3)(b) of the Vienna Convention .  We deal with each of th ese sets of evidence in turn. 
                                                      
422 We recall our conclusion above in para. 7.255 that, for the purposes of this case, the EC's 
classification practice alone may be considered as "concordant" and "common" subsequent practice under 
Article 31(3)(b) of the Vienna Convention . 
423 Appellate Body Report, EC – Computer Equipment , para. 96. 
424 Appellate Body Report, EC – Computer Equipment , para. 95. citing paras. 8.41-8.43 of the panel 
report in that case. 
425 We note in this regard that Mustafa Yasseen refers to "a certain  consistency" rather than to a more 
demanding notion of absolute consistency.  He states that: "[The condition of a certain consistency] is made 
necessary by the very notion of 'practice'.  A practice is a series of occurrences or acts, and cannot generally be 
materialized by an isolated occurre nce or act, or even by a few scattered applications."  Mustafa Yasseen, 
"L'interprétation des Traités d'après la Convention de Vienne sur le Droit des Traités" in Recueil des Cours de 
l'Académie de Droit International , (1974) Vol. III, p. 48, para. 17. WT/DS269/R 
Page 88  
 
7.269  Regarding the European Communities' acknowledgement , the Panel recalls that the European 
Communities has stated that the pr oducts at issue had been classi fied under heading 02.10 by some 
EC members States' customs offices up until 2002 – in  particular, those in Germany, the Netherlands 
and various offices in the United Kingdom.
426  In an effort to determine the volume of trade in the 
products at issue affected by this classificati on practice, the Panel requested the European 
Communities to provide details of: (a) the period during which this cl assification practice existed; and 
(b) the volume of total imports affected.427  The European Communities did not provide this 
information but did acknowledge that "substantia l trade" entered the European Communities under 
what the European Communities labels as an "incorrect interpretation" of heading 02.10.428 
7.270  With respect to the BTIs  available to the Panel, the Panel has been provided with a number of 
BTIs concerning the products at issue.  It has al so been provided with a BTI concerning another 
product.  Regarding BTIs that pertain to the products at issue,429 these Exhibits indicate that, until 
September 2002, the products at issue, which were  apparently covered by these BTIs, were classified 
under heading 02.10.430  The BTIs relate to imports into Germany, the Netherlands and the United 
Kingdom.  The Panel also notes that it is evident from EC Decision 2003/97/EC that at least 66 BTIs 
classified the products at issue (or a subset thereof) under heading 02.10.431  The European 
Communities has not produced any BTIs of instan ces where the products at issue were classified 
under a heading other than heading 02.10, such as head ing 02.07.  With respect to the BTI concerning 
a product other than those directly at issue in th is case, the European Communities refers to a 1999 
BTI relating to dried and salted ham wh ich was classified under heading 02.10.432  The BTI relates to 
imports into Spain.  The BTI does not indicate the salt content of the product in question; nor does it 
indicate whether the salt had the effect of preserving the product in question. 
7.271  The Panel takes note of the European Communitie s' argument that BTIs are of limited value 
for the purposes of the task before us here – name ly, to determine whether there has been consistent 
classification practice with regard to the products at  issue on the part of the European Communities.  
However, we consider that BTIs may be useful to provide an indication  of how products with a 
particular set of characteristics are being classified by the importing Member.  Trade data helps to 
confirm or to verify such an indication. 
7.272  In this case, in addition to the BTIs referred to above, we have trade data  at our disposal.  In 
particular, Brazil433 and the European Communities434 have provided trade statistics concerning trade 
flows into the European Communities under headings 02.07 and 02.10 of the EC Schedule.  Brazil has 
provided statistics at the 8-digit level for the pe riod 1990 until 2001.  The European Communities has 
provided statistics at the 4 and 8-digit level for th e period 1990 until 2003.  When read in conjunction, 
the trade data and the BTIs indicate that significan t trade volumes of the products at issue imported 
                                                      
426 EC's first written submission, paras. 52 and 91-92. 
427 Panel question No. 54. 
428 EC's first written submission, paras. 91-92. 
429 These BTIs are contained in Exhibit EC-24, Exhibit BRA-31 and Exhibits THA-24(a), 24(b) 
and 24(c). 
430 The earliest BTI among the ones the Panel has been provided is contained in Exhibit THA-24(a) and 
is dated May 1998. 
431 All the BTIs covered by EC Decision 2003/97/EC we re issued by German customs authorities.  This 
suggests that the total number of BTIs classifying th e products at issue under heading 02.10 during 1996-2002 
exceeds 66 given that the EC has indicat ed that Dutch and UK customs author ities also issued BTIs classifying 
the products at issue under heading 02.10. 
432 This BTI is contained in Exhibit EC-26. 
433 See Tables at para. 177 of Brazil's fi rst written submission and Exhibit BRA-14. 
434 See Tables 2 and 3 of the EC's first written submission.  WT/DS269/R 
 Page 89 
 
 
from Brazil and Thailand to the European Comm unities were being classified under heading 02.10 
during the relevant period.435 
7.273  Concerning the minutes of meetings of the EC Customs Code Committee436, Brazil refers to an 
extract of the minutes of a meeting of the EC Customs Code Committee held on 25-26 September 
2003437 at which the classification of frozen salted/smoked bacon was discussed.438  The minutes 
suggest that a number of EC member States indicated  at the meeting that that product should "remain" 
classified under heading 02.10.  There is no referen ce to the salt content of the bacon in question in 
the minutes, nor is there any indication as to whethe r the salt had the effect of preserving the bacon.  
Therefore, we do not consider that these minutes are particularly helpful for the present case. 
7.274  Thailand submits what appear to be minut es of a meeting of the EC Customs Code 
Committee dated 25 January 2002439 and the minutes of a meeting of the EC Customs Code 
Committee held on 18 - 19 February 2002440.441  Brazil also refers to these minutes.442  We note the 
European Communities' statement that these minutes are non-binding.443  Even so, we consider that 
they provide useful insights into  the EC classification practice regarding heading 02.10 as perceived 
by the EC Customs Code Committee.  In particul ar, the minutes dated 25 January 2002 indicate that 
frozen boneless chicken cuts with a salt content of between 1.2% - 1.4% had been classified under 
heading 02.10 since 1996.  The minutes of the meeting of the EC Customs Code Committee held on 18 - 19 February 2002 indicate that  frozen salted meat with a salt content of not less than 1.2% by 
weight were "classifiable" under heading 02.10. 
7.275  Having considered all the evidence before us  relating to the EC classification practice 
concerning heading 02.10 in general and, more sp ecifically, concerning the products at issue, it 
remains for us to assess that evid ence in its totality.  In our view, the evidence taken as a whole 
indicates that, during 1996 - 2002, the European Communities engaged in a consistent practice of 
classifying the products at issue under heading 02.10.   In particular, the European Communities itself 
has acknowledged that "substantial trade" of the pr oducts at issue entered the European Communities 
under heading 02.10 during this period.
444  We also have before us copies of a number of BTIs that 
indicate that, during the relevant period, the products  at issue were being classified by the European 
                                                      
435 In this regard, we note that the European Co mmunities itself has submitted that imports into the 
European Communities started to appear under heading 02.10 principally from Brazil and Thailand during the relevant period: EC's first written submission, paras. 57 and 180.  Incidentally, the Panel considers that the BTIs 
and the trade statistics indicate that a real market demand existed for the products at issue prior to enactment of 
the measures at issue.  In addition, this is apparent, inter alia , from correspondence, invoices, bills of lading and 
purchase orders relating to the importation of these products from Brazil and Th ailand into the European 
Communities contained in Exhibits BRA-29, 30, 41 and 42  and Exhibit THA-26.  Some of this documentation 
also tends to confirm that the products at issue were being imported into the European Communities under heading 02.10 during the relevant period. 
436 The EC Customs Code Committee is composed of representatives of each of the EC member States: 
EC's reply to Panel question No. 55. 
437 These minutes are contained in Exhibit BRA-32. 
438 Brazil's reply to Panel question No. 4. 
439 Working Document TAXUD/1636/2002 of the Customs Code Committee of 25 January 2002 
contained in Exhibit THA-22.  The Panel notes that the electronic version of Exhibit THA-22, which was 
submitted by Thailand to the Panel during the first substantive meeting, the document reference for which is 
TAXUD/1815/2003, does not appear to correspond to the hard copy of that exhibit which was submitted by 
Thailand during the first substantive meeting and relied upon by Thailand in its oral statement during that 
meeting.  In our Report, we have relied upon the hard  copy version of Exhibit THA-22 submitted by Thailand 
during the first substantive meeting. 
440 These minutes are contained in Exhibit THA-23. 
441 Thailand's oral statement at the first substantive meeting, para. 39. 
442 Brazil's reply to Panel question No. 10 referring to Exhibit THA-22 and Exhibit THA-23. 
443 EC's reply to Panel question No. 45. 
444 EC's first written submission, paras. 52 and 91-92. WT/DS269/R 
Page 90  
 
Communities under heading 02.10.
445  We have not been provided w ith any BTIs to indicate that the 
products at issue were being classified under any ot her heading of the CN, such as heading 02.07.  
When read together, trade data and the BTIs indicat e that significant trade volumes of the products at 
issue imported from Brazil and Thailand to the European Communities were being classified under 
heading 02.10 during the relevant period.  Finally,  we have evidence that, in 2002, prior to the 
introduction of the measures at issue, the EC Customs Code Committee, which is a committee 
comprising representatives of all EC member States, considered that products with characteristics 
matching those possessed by the pro ducts at issue were "classifiable" and were also classified under 
heading 02.10.  It is the Panel's view that, when  taken together, the various pieces of evidence before 
us indicate that, during 1996 - 2002, the European Communities engaged in a consistent practice of 
classifying the products at issue under heading 02.10.  In this regard, we note that we have seen no 
evidence that the products at issue were being classified under a heading other than heading 02.10 
during this period. 
7.276  Regarding the fact that the European Comm unities did not provide certain information 
requested by the Panel, we recall that Brazil h as objected and submitted that the Panel would be 
within its rights to draw adverse inferences under Article 13.2 of the DSU from this refusal.  Given 
the Panel's conclusion that the tota lity of evidence before it indicates th at a consistent practice existed 
within the European Communities of classifying the products at issue under heading 02.10 rather than 
under another heading such as heading 02.07, we do not consider it necessary to consider whether 
adverse inferences should be drawn against the Eu ropean Communities, as has been suggested by 
Brazil. 
Classification practice:  Imports into and exports from Brazil and Thailand 
 Arguments of the parties 
7.277  Brazil  and Thailand  submit that their respective classification practice is not relevant to the 
present case.  Brazil submits that its classification is  not relevant for the interpretation of the EC 
Schedule given that the treaty language being examin ed is contained in the EC Schedule and concerns 
the EC's commitments and not any other Member's commitments.446  Thailand argues that the 
unilateral classification practice of Members cannot be  considered as subsequent practice establishing 
"the agreement of the parties" regarding the interpretation of the tariff heading at issue.447  Thailand 
also notes that the Appellate Body made clear that reliance on customs classification practice is only relevant to the extent that it interprets a tariff concession.
448  Thailand submits that, consequently, 
under WTO law, customs classification of a product would matter only if the classification were 
germane to the granting of a concession agreed upon in the WTO Agreement.449   
7.278  As regards import classification practice , Brazil submits that it does not  import salted chicken 
cuts and that, therefore, there is no classificati on practice in relation to imports of this product.450  
Thailand submits that, at the time of the conclusi on of the WTO Agreement, Thailand did not import 
frozen salted chicken.451  Further, Thailand submits that it has never imported salted frozen chicken 
                                                      
445 We do not consider that the BTI before us relating to a product different from those at issue in this 
dispute is particularly relevant for the present case. 
446 Brazil's reply to Panel question No. 16. 
447 Thailand's second written submission, para. 68. 
448 Thailand's second written submission, para. 70. 
449 Thailand's second written submission, para. 72. 
450 Brazil's reply to Panel question No. 16. 
451 Thailand's second written submission, para. 70.  WT/DS269/R 
 Page 91 
 
 
because it is a competitive supplier of chicken meat452 and, therefore, has never classified the product 
at issue for customs purposes.453 
7.279  With respect to export classification practice , the European Communities  notes that during 
2000 - early 2002, while substantial imports into the European Communities started to appear under 
heading 02.10 principally from Brazil and Thailand,  this is not matched by a corresponding increase 
in exports under that heading from those two count ries.  The European Commu nities submits that an 
analysis of exports from those countries shows a marked increase in exports under heading 02.07, 
which corresponds to the total imports of th e European Communities under headings 02.07 and 
02.10.454 
7.280  Thailand  submits that the classification of produc ts for exportation is not relevant to 
determine the classification practice of a Member because only the practice of Members in 
implementing their tariff concessions is relevant.455 
7.281  Brazil  submits that, in situations where duti es do not have to be assessed, authorities are 
usually less rigorous about classification and will not  always ascertain whether goods declared by a 
producer/exporter correspond to what is actually bei ng exported.  Therefore, because in most cases, 
imports are subject to duties, import classification practice is a more reliable and accurate source of 
classification information because producers are only aler t to classification issues when they have an 
impact on their commercial operations or profits.456  Brazil submits that, in Brazil, there are no export 
duties assessed on exports of frozen salted ch icken meat nor on frozen chicken meat in natura .457  
Brazil also submits that Brazil's export classification practice of frozen salted chicken was inconsistent; sometimes the product was correctly  classified under heading 02.10 and sometimes it 
was incorrectly classified under heading 02.07.
458 
7.282  Brazil also submits that, in Brazil, the expor ter is responsible for export documentation, 
including identification of the appropriate cust oms classification although the Brazilian government 
has the ability to monitor and control such documentation.459  Similarly, Thailand submits that 
shipping companies hired by exporters handle e xport procedures and paperwork, including custom 
classification on export declaration forms.460 
7.283  In response, the European Communities  submits that the complainants' distinction between 
classification of products for export and for import has no basis in law.  According to the European Communities, classification of products in both cases should follow the same principles.  The European Communities submits that this is recognized in Article 3.1(a) of the HS Convention, which requires the customs tariff and statistical nomenclatures to be in conformity with the HS.  The 
European Communities notes that the preamble of the HS Convention  envisages the promotion of "as 
close a correlation as possible between import statistics and export trade statistics and production statistics".  The European Communities also submits that a market access negotia tor needs to rely on 
accurate export/import data in negotiating tariff concessions.  The European Communities submits 
                                                     
 
452 Thailand's oral statement at the first substantive meeting, para. 44. 
453 Thailand's reply to Panel question No. 16. 
454 EC's first written submission, paras. 57 and 180; EC's oral statement at the second substantive 
meeting, para. 49. 
455 Thailand's oral statement at the first substantive meeting, para. 44; Thailand's reply to Panel 
question No. 16; Thailand's second written submission, para. 71. 
456 Brazil's oral statement at the first substantive m eeting, para. 55; Brazil's reply to Panel's question 
No. 16. 
457 Brazil's reply to Panel's question No. 16. 
458 Brazil's comments on the EC's reply to Panel que stion No. 120 referring to Exhibits BRA-42(c) and 
BRA-42(d). 
459 Brazil's reply to Panel question No. 85. 
460 Thailand's reply to Panel question No. 85. WT/DS269/R 
Page 92  
 
that GATT Contracting Parties recognized this in the GATT Council Decision of 12 July 1983 on "GATT Concessions under the Harmonized System Commodity Description and Coding System".
461  
In that Decision, the Contracting Parties noted that "[i]n addition to the benefits for trade facilitation and analysis of trade statistics, from a GATT point of view adoption of the Harmonized System would 
help ensure greater uniformity among countries in cu stoms classification and, thus, a greater ability 
for countries to monitor and protect the value of tariff concessions."  Th e European Communities 
notes that the Appellate Body has held that tari ff negotiations are a process of "give and take"  
between exporting and importing Members.   A common basis of understanding for  the classification 
of the goods is, therefore, necessary.  The Eur opean Communities submits that, in light of the 
foregoing, the complainants are wrong to suggest th at classification on export is any less relevant than  
classification on import.
462 
 Analysis by the Panel 
7.284  The Panel notes that it does not have any import classification data for Brazil and Thailand in 
respect of the products at issue because, apparen tly, these countries export rather than import these 
products.463  As for export classification data, this appears to be inconsistent at least with respect to 
Brazil.464  In any event, we are not convinced of the utility of making reference to export classification 
data from Brazil and Thailand given that, evidentl y, export classification is less rigorous because 
duties are not levied on products upon exportation.465  In this regard, we note that Article 1(b) of the 
HS Convention defines "customs tariff nomenclat ure" as "the nomenclature established under the 
legislation of a Contracting Party for the purposes of levying duties of Customs on imported goods " 
(emphasis added). 
Classification practice: Imports into and exports from the US and China 
 Arguments of the parties 
7.285  Brazil  refers to four US classification rulings during the period 1996 - 1998 which classify 
bacon from Denmark under heading 02.10.466  Brazil also refers to a US bill of lading, in which the 
importer claimed tariff treatment for its frozen  sliced bacon product under heading 02.10.467 
7.286  In relation to the US bill of lading, the United States468 notes that an importer's claim for 
tariff treatment under a particular subheading does not  represent an official statement by US customs 
authorities on the correct classification of the produc t.  The United States submits, however, that in a 
                                                      
461 L/5470/Rev. 1. 
462 EC's reply to Panel question No. 28 citing Appellate Body Report, EC – Computer Equipment , 
para. 109. 
463 Brazil's reply to Panel question No. 16; Thailand's oral statement at the first substantive meeting, 
para. 44; Thailand's second written submission, para. 70.  The European Communities does not dispute that 
Brazil and Thailand are exporters rather than importers of the products at issue. 
464 We note that the EC refers to data in Table 3 of its first written submission and in Exhibits EC-17 
and EC-18, which it says indicates that  the complainants consistently classified the products at issue under 
heading 02.07 rather than under heading 02.10:  EC's first written submission, para. 180.  However, Brazil has 
produced an October 2001 bill of ladi ng, export registration and export receipt (contained in Exhibit BRA-
42(c)) and a November 2001 bill of la ding, export registration and export receipt (contained in Exhibit BRA -
 42(d)) according to which, upon export from Brazil, th e products at issue were classi fied under heading 02.10.  
This evidence indicates that the export  classification of, at least, Brazil is  not consistent with respect to the 
products at issue. 
465 Further, we note that, in Brazil and Thailand, ex porters rather than cust oms officers classify the 
products at issue, at least in the first instance: Brazil' s reply to Panel question No. 85; Thailand's reply to Panel 
question No. 85. 
466 Exhibit BRA-39. 
467 Exhibit BRA-19. 
468 The United States is a third party to this dispute.  WT/DS269/R 
 Page 93 
 
 
1996 ruling, US customs authorities ruled that frozen bacon from Denmark was properly classified 
under heading 02.10.469 
7.287  China470 notes that, in 2000 and 2001, there we re imports and expor ts under subheading 
0210.90.00 of China's tariff classification nomenclature but there have been no more such imports or exports since 2002.
471  China also submits that, in 2000, there were imports and exports under 
subheading 0207.14.00 of China's tariff classificati on nomenclature but that there have been no more 
such imports or exports since 2001.472 
 Analysis by the Panel 
7.288  During these proceedings, Brazil referred to certain examples of what could broadly be 
referred to as US classification practice regarding the equivalent of heading 02.10 in the US schedule.  
In addition, China provided some information regarding its classification practice for headings 
equivalent to headings 02.10 and 02.07 of the EC Sc hedule.  In the Panel's view, this evidence is too 
limited to draw any conclusions regarding the cons istency or otherwise of classification practice of 
other WTO Members.  Further, with respect to th e evidence that is available of US classification 
practice, the relevant US classification rulings do no t relate to products identical or similar to the 
products at issue; they do not indicate the salt content of the products in question; nor do they indicate 
whether the salt had the effect of preserving tho se products.  Therefore, the usefulness of such 
evidence for the purposes of this case is questionable.  Similarly, with respect to the information that 
was submitted by China, such information does not indicate the salt content of chicken cuts classified 
under headings 02.07 and 02.10; nor does it indicate wh ether the salt had the effect of preserving the 
products in question.  Therefore, such evidence also appears to be of limited usefulness for this case. 
Summary and tentative conclusions  regarding "subsequent practice"  
7.289  The Panel considers that, in this case, it is r easonable to rely upon EC classification practice 
alone in determining whether or not there is "subse quent practice" that "establishes the agreement" of 
WTO Members within the meani ng of Article 31(3)(b) of the Vienna Convention  regarding the 
interpretation of the concession contained in headin g 02.10 of the EC Schedule.  Among other reasons 
for this approach, we note that the European Communities is apparently the only importing WTO 
Member with any practice of classifying the products at issue.  On the basis of evidence available to 
us, the Panel concludes that the European Communiti es engaged in a consistent practice of classifying 
the products at issue under heading 02.10 during 1996  – 2002.  With respect to classification practice 
of other WTO Members, the Panel finds that th ere is no evidence of the complainants' import 
classification practice regarding the products at issu e given that they export rather than import these 
products.  The Panel considers that the evidence of  the complainants' export classification practice is 
limited.  Further, its utility is qu estionable given that the classification of the products at issue for 
export is less rigorous because they are not subject to duty upon export.  In addition, the evidence of 
classification practice by the United States and China is so limited that the Panel is not able to draw 
any conclusions regarding the cons istency or otherwise of the classification practice of other WTO 
Members. 
7.290  Subject to what the Panel finds below with respect to WCO decisions and the Explanatory 
Note to the CN referred to by the European Communities, the Panel tentatively concludes that the 
European Communities' consistent practice of cl assifying the products at issue under heading 02.10 
amounts to "subsequent practice" under Article 31(3)(b) of the Vienna Convention . 
                                                      
469 US reply to Panel question No. 85 referring to New York Ruling Letter NY A80393 (March 7, 
1996), as modified by Customs Ruling Letter HQ 960585 (July 20, 1998) contained in Exhibit US-1. 
470 China is a third party to this dispute. 
471 China's reply to Panel question No. 81. 
472 China's reply to Panel question No. 81. WT/DS269/R 
Page 94  
 
WCO letters of advice
 
Arguments of the parties 
 Qualification under Article 31(3)(b) of the Vienna Convention? 
7.291  Brazil  submits that a letter of advice or opinion provided by the WCO Secretariat as a 
response to an inquiry made by a customs author ity does not constitute an official WCO position on 
the interpretation of the HS nomenclature.  Acco rding to Brazil, such a letter of advice merely 
expresses the technical opinion of one indivi dual or possibly more, which does not bind WCO 
members in any way and has no legal value.473  Brazil also notes that the Appellate Body in EC – 
Computer Equipment  considered that "decisions of the WCO may be relevant" in the interpretation of 
tariff concessions in the EC Schedule.  According to Brazil, if, WCO decisions, which are taken by 
the HS Committee and approved by the Customs Co -operation Council, are questionable (given the 
use of the word "may" by the Appellate Body) as relevant means of interpretation, then opinions 
given by the WCO Secretariat are even more so.474  Brazil submits that, if there are no WCO decisions 
regarding the classification of headings 02.07 and 02.10, there is no practice of WCO Members that 
qualifies as subsequent practice within the meaning of Article 31(3)(b) of the Vienna Convention .475 
7.292  Thailand  argues that subsequent practice under Article 31(3)(b) of the Vienna Convention  
must establish the agreement of the parties regard ing the interpretation of the relevant treaty.  
According to Thailand, none of the parties to th is dispute have submitted a WCO decision regarding 
the interpretation of heading 02.10.  Thailand submits that a WCO letter does not constitute 
concordant subsequent practice that establishe s the agreement of the parties regarding the 
interpretation of the terms of the treaty w ithin the meaning of Article 31(3)(b) of the Vienna 
Convention .476 
7.293  The European Communities  submits that, in order to meet the legal threshold of relevant 
practice under Article 31(3)(b) of the Vienna Convention  for the purposes of this case, the Panel must 
take into account that the dispute concerns the covera ge of a tariff binding at the 4-digit level, which 
is internationally harmonized through the HS  Convention and used by all WTO Members.477  T h e  
European Communities notes that the HS Conve ntion provides a specific mechanism for the 
expression of concordant practice in the form of decisions of its HS Committee.478  The European 
Communities submits that the fact that such a proce dure exists calls for a particularly high standard 
for demonstrating the existence of a coherent practic e relevant for the interp retation of the schedules 
and concessions as based on the HS.  Otherwise, a particular Member could unilaterally modify the common nomenclature agreed amongst all the parti es to the HS Convention and, by consequence, 
impact the interpretation of WTO schedules.
479  The European Communities acknowledges that letters 
of advice or opinion written by the WCO Secretar iat are not the same as a classification ruling or 
opinion made by the HS Committee.  The Europ ean Communities submits that, nevertheless, they 
cannot be ignored given that they contain the opinions of a neutral expert from the WCO Secretariat.
480 
                                                      
473 Brazil's reply to Panel question No. 18. 
474 Brazil's reply to Panel question No. 18; Brazil's second written submission, para. 62 referring to 
Appellate Body Report, EC – Computer Equipment , para. 90. 
475 Brazil's oral statement at the seco nd substantive meeting, para. 37. 
476 Thailand's second written submission, paras. 57-66. 
477 EC's first written submission, para. 174. 
478 EC's first written submission, para. 175. 
479 EC's first written submission, para. 176. 
480 EC's oral statement at the first substantive meeting, paras. 27-31.  WT/DS269/R 
 Page 95 
 
 
 1997 letter of advice from the WCO 
7.294  The European Communities  refers to a 1997 letter of advice from the WCO Secretariat to 
the Cypriot customs author ities.  The European Communities notes that the matter at issue concerned 
the headings in Chapter 3 of the HS, which covers  fish, and in many respects parallel those being 
examined in this dispute under Chapter 2.  Regardi ng the type of salting necessary to bring fish within 
the ambit of heading 03.05, the European Communiti es notes that the WCO Secretariat stated in its 
letter that "salted" fish, classifi able in heading 03.05, is not no rmally lightly sa lted to render it 
necessary for freezing.  The WCO furthe r stated that salt is intended to penetrate the meat to give the 
fish a long preservative life.481 
7.295  Brazil  submits that the 1997 WCO Secretariat lette r of advice regarding frozen salted fish is 
not consistent with the 2003 WCO Secretariat letter of advice referred to by Brazil immediately below 
regarding frozen salted swine meat and, theref ore, the former does not qualify as "subsequent 
practice" in the interpretation of the EC Schedule.482  Thailand  submits that the 1997 WCO 
Secretariat letter is of little probative value to th e dispute before the Panel as it conclusions are 
tentative and are based on unclear facts.483 
 2003 letter of advice from the WCO 
7.296  Brazil  points to a letter of advice from the WCO Secretariat dated May 2003 regarding the 
meaning of the term "salted" in heading 02.10.484  Brazil notes that the 2003 WCO Secretariat letter 
was written in response to a question posed by th e Bulgarian customs administration on whether 
imports "of bellies of swine, deboned, frozen, to which salt has been applie d on the surface before 
freezing (sic)" should be classified under subhead ing 0203.29 or under subheading 0210.12.  Brazil 
notes that, in that case, "the results of the laborator y analysis, after thawing,  show that the salt only 
penetrated a very limited layer (just below the surface of the product), and not in depth (sic)", and the 
authority believed, guided by the language under A dditional Note 7 of Chapter 2 of the European 
Communities' CN, that the product should be cl assified under heading 02.03 because it was not 
deeply and homogeneously impregna ted with salt.  The importer, on the other hand, argued that the 
product should be classified unde r heading 02.10 because the total salt content was approximately 
1.9% by weight.  Faced with this dilemma , the authority requested advice from the WCO 
Secretariat.485  Brazil submits that the customs authority' s inquiry in that case was based on the fact 
that the product only met part of the description/cr iterion for "salted meat" of heading 02.10, found in 
Additional Note 7 of Chapter 2 of the CN.  However, Brazil argues that, in the present case, there is 
no doubt that the products at issue exported from Br azil fully met the definition of "salted meat" of 
heading 02.10 under the CN.486  Brazil also notes that, in that case, the WCO Secretariat stated that 
there is no official definition in the HS and its Ex planatory Notes for the term "salted".  However, 
Brazil submits that the WCO acknowledged that the European Communities' CN had a specific 
criterion to define salted meat of heading 02.10 an d that the Bulgarian authority should turn to the 
European Communities for clarification.  Brazil subm its that, even though the authority in question 
specifically asked for guidance with respect to th e degree of salting and the method of salting for the 
purposes of heading 02.10, no menti on was made of the fact that salting had to preserve the product 
for it to merit classification under heading 02.10.487 
                                                      
481 EC's oral statement at the first substantive meeting, paras. 27-31 referring to Exhibit EC-19. 
482 Brazil's second written submission, para. 65. 
483 Thailand's second written submission, paras. 61 and 66. 
484 Brazil's second written submission, pa ra. 65 referring to Exhibit BRA-35. 
485 Brazil's reply to Panel question No. 18. 
486 Brazil's reply to Panel question No. 18. 
487 Brazil's reply to Panel question No. 18; Brazil's or al statement at the second substantive meeting, 
paras. 38-39. WT/DS269/R 
Page 96  
 
7.297  In response, the European Communities  submits that, although the issue dealt with in the 
2003 WCO Secretariat letter might be relevant to the present dispute, the WCO Secretariat avoided taking a position and did not provide classification advice to the Bulgarian authorities.  The European Communities submits that Brazil cannot, from the fact that the WCO Secretariat declined to take a 
view, infer that it rejected "preservation" as the basis for heading 02.10.  The European Communities 
submits that, consequently, the letter in question is not relevant "subsequent practice" for the purposes 
of Article 31(3)(b) of the Vienna Convention .
488 
Analysis by the Panel 
7.298  In EC – Computer Equipment , the Appellate Body specifically stated that decisions taken by 
the HS Committee of the WCO might have been releva nt to the interpretation of the EC Schedule in 
that case.  The Panel considers that, even if not  binding, WCO decisions concerning the headings at 
issue provided after 1994 could well be a very useful  source of information on the subsequent practice 
of WTO Members, a large proportion of whom are signatories to the HS Convention and, therefore, are members of the HS Committee.  However, we ha ve been informed by the WCO Secretariat that 
there are no existing WCO decisions in relation to  heading 02.10 of the HS, which corresponds to 
heading 02.10 of the EC Schedule.
489 
7.299  The Panel has been called upon by the parties to take into consideration two letters written by 
members of the WCO Secretariat – one dated 1997 and the other dated 2003 – as evidence of 
"subsequent practice" under Article 31(3)(b) of the Vienna Convention .  We recall that the 
International Law Commission has indicated that "subsequent practice" qualifying under Article 
31(3)(b) must be "concordant, subsequent practice common to all the parties".  The Appellate Body 
has also indicated that a "concordant, common and consistent" sequence of acts or pronouncements is 
necessary for qualification under Article 31(3)(b).  In  our view, WCO Secretariat letters of advice or 
opinion that are directed at individual customs authorities, which have no legally binding effect, cannot be construed as constitu ting "concordant, subsequent practice common to all [WTO 
Members]" for the purposes of Article 31(3)(b) of the Vienna Convention .  In any event, we note that 
the WCO Secretariat letters in question relate to products (fish and pigmeat) that are different from 
the products at issue.  Therefore, the Panel will not  take the two WCO Secret ariat letters in question 
into consideration in applying Article 31(3)(b) of the Vienna Convention .
490 
Subsequent Explanatory Notes to the Combined Nomenclature  
Arguments of the parties 
7.300  The European Communities  refers to an Explanatory Note  to the CN of December 1994, 
which refers to subheadings 0210. 11.11 and 0210.11.19.  It provides inter alia  that: "These 
subheadings cover only hams, shoulde rs and parts thereof, with bone in, of domestic swine, which 
                                                      
488 EC's second written submission, para. 39; EC's oral  statement at the second  substantive meeting, 
para. 48. 
489 WCO's reply to Panel question No. 8 to the WCO. 
490 The Panel notes that, in reply to questions posed by the Panel regarding the 1997 and 2003 WCO 
Secretariat letters, the WCO itself counselled against re liance upon that correspon dence in the absence of 
explicit authorization from the parties to those letters: WCO's replies to Panel question Nos. 13 and 14 to the 
WCO.  We note that the EC submits that, after having initially become aware of the 1997 letter from the WCO 
to the Cypriot authorities when examining the WCO's archives, it sought and obtained the agreement of the Cypriot customs authorities before submitting the correspondence to the Panel: EC's comments on the WCO's 
replies to Panel question Nos. 13 and 14 to the WCO.  Brazil submits that it gained unobstructed access to the 
2003 WCO Secretariat letter and is not aware of any notif ication on the part of the Bulgarian customs authorities 
requesting that the letter not be published by the WCO:  Brazil's comments on the Panel's Interim Report, para. 
51.  In any event, we do not consider that this changes our conclusion that we should not consider the letters in 
question pursuant to Article 31(3)(b) of the Vienna Convention .  WT/DS269/R 
 Page 97 
 
 
have been preserved by deep dry salting or pickli ng in brine ...".  The European Communities submits 
that this Explanatory Note is relevant under Article 31(3)(b) of the Vienna Convention .491  T h e  
European Communities submits that the importance of  the Note lies in the fact that it assumes the 
existence of the principle of long-term preservation with respect to heading 02.10.492 
7.301  Brazil  and Thailand  submit that the Explanatory Note in question relates to salted meat of 
domestic swine and not to all "salted meat" of head ing 02.10 and that, therefore, it cannot be applied 
to poultry meat.493  According to Brazil, had the Eur opean Communities desired to apply the 
provisions regarding salted meat of domestic swine to all meat covered under heading 02.10 it would 
have placed such provisions as a general Explanatory Note to heading 02.10 rather than as a Note to 
particular subheadings.  Brazil concludes that, therefore, there is no reason for the Panel to assume 
that this Explanatory Note would be applicable  to a product different from salted domestic swine.494  
Thailand also argues that it is the European Commun ities' established practice to state explicitly in the 
Explanatory Notes whether a certain rule applies mutatis mutandis  to other products.  Thailand 
submits that, while this was done explicitly for pr oducts of subheading 0210.12.11, there is no such 
statement in the Explanatory Note for subheading 0210.90.20.  Thaila nd concludes that, therefore, the 
European Communities cannot assert that the concept of preservation is applicable to poultry falling 
under heading 02.10.495  Brazil also adds that the Explanat ory Notes to the European Communities' 
CN are non-binding instruments and are not part of EC legislation.496   
Analysis by the Panel 
7.302  The Panel does not consider that a single non-binding Explanatory Note in the European 
Communities' domestic legislation – i.e. the CN – sat isfies the requirement that "subsequent practice" 
be "concordant, common and consiste nt" so as to establish the agreement of all WTO Members within 
the meaning of Article 31(3)(b) of the Vienna Convention .  In any event, the Note relates to products 
(pigmeat) that are different from the products at i ssue.  Therefore, the Panel will not take into 
consideration the Explanatory Note to the CN of December 1994, which refers to subheadings 
0210.11.11 and 0210.11.19, in applying Article 31(3)(b) of the Vienna Convention . 
Final conclusion regarding "subsequent practice"  
7.303  The Panel recalls the absence of WCO decisions th at are relevant to this dispute.  The Panel 
further recalls its decision not to take two WC O Secretariat letters and a single non-binding 
Explanatory Note to the CN into consider ation when applying Article 31(3)(b) of the Vienna 
Convention .  In light of those decisions, we confirm the tentative conclusion we reached above in 
paragraph 7.290 that the European Communities' cons istent practice of classifying the products at 
issue under heading 02.10 amounts to "subsequent practice" under Article 31(3)(b) of the Vienna 
Convention .  In the Panel's view, such subsequent practi ce indicates that the products at issue in this 
dispute are covered by the concession contained in  heading 02.10 of the EC Schedule.  To seek 
confirmation of this indication, we turn to a cons ideration of object and purpose under Article 31(1) of 
the Vienna Convention . 
                                                      
491 EC's reply to Panel question No. 75. 
492 EC's oral statement at the second substantive meeting, para. 70. 
493 Brazil's second written submission, para. 93; Th ailand's second written submission, para. 92. 
494 Brazil's second written submission, para. 94. 
495 Thailand's second written submission, para. 92. 
496 Brazil's second written submission, para. 93. WT/DS269/R 
Page 98  
 
(d) Object and purpose:  Article 31(1) of the Vienna Convention  
(i) Arguments of the parties 
The WTO Agreement and the GATT 1994
 
7.304  Brazil  and Thailand  submit that the security and predic tability of tariff concessions is the 
main object and purpose of the GATT 1994.497  According to Brazil, such security and predictability 
ensures the importance and worth of these concessi ons because it means that concessions will not be 
changed unilaterally without a proper remedy.  Braz il submits that, if it were otherwise, Members 
would be unwilling to enter into trade negotiations.498  Brazil argues that when, by virtue of the 
challenged measures, the European Communities un ilaterally changed the concession it provided for 
salted meat under its Schedule, it disrupted this essential object and purpose of the WTO 
Agreement.499 
7.305  According to Thailand, the object and purpose of the GATT 1994, as reflected in Article II of 
the GATT 1994, is to preserve the value of tariff concessions.  Therefore, it is essential that the 
description of the products falling under a particular s ubheading be maintained as it was at the time of 
the negotiation of the relevant concession.  Accord ing to Thailand, it would undermine the value of 
the tariff concession if a Member were able to uni laterally modify the scope and coverage of the 
product description for a specific tariff heading.  This situation would diminish the security and 
predictability that binding tariff concessions are inte nded to have in the multilateral trading system.500 
7.306  Brazil and Thailand submit that, with respect speci fically to the application of Article II of the 
GATT 1994, the decisive criterion for characterization of a product is the "objective characteristics" 
of the product at the time of importation.501  Brazil argues that this criterion ensures legal certainty 
and facilitates classification and verification by customs authorities at the border.502  Thailand further 
submits that customs classification must depend on the assessment of the objective characteristics of the product at the border
503 and notes that this principle has been clearly recognised by the ECJ.504 
7.307  The European Communities  accepts that, under EC law,  in implementing the HS, the 
objective characteristics of a product are decisive for classification.  According to the European 
Communities, these objective characteristics are mostly  based on the compositi on of the products or 
the properties, which can be established by laboratory examination.505  The European Communities 
submits that, when a product arrives at the border,  EC customs officials carry out: (a) inspection of 
customs and sanitary documents accompanying the g ood, including any BTI; (b) physical inspection 
by customs officers of container, packaging, labelling; (c) physical inspection of the product, in particular its temperature, smell, taste, colour; and (d) if necessary, samples are sent to a laboratory 
for analytical control to verify conformity of the product with relevant customs specifications.
506  The 
European Communities notes that there are no sp ecific guidelines to assist customs officers in 
determining whether or not a product should be cl assified under heading 02.10, i.e. to determine 
whether or not salting achieves long-term preser vation.  The European Communities argues that, 
nevertheless, such guidelines have never been necessa ry because, with the exception of the facts at 
                                                      
497 Brazil's first written submission, para. 160; Thailand's first written submission, para. 90. 
498 Brazil's first written submission, para. 160. 
499 Brazil's first written submission, para. 161. 
500 Thailand's first written submission, paras. 92-93. 
501 Brazil's reply to Panel question No. 13; Thailand's oral statement at the first substantive meeting, 
paras. 51-53; Thailand's second written submission, para. 39. 
502 Brazil's reply to Panel question No. 13. 
503 Thailand's oral statement at the firs t substantive meeting, paras. 8, 51-53. 
504 Thailand's second  written submission, para. 3.  
505 EC's replies to Panel question Nos. 90 and 105. 
506 EC's reply to Panel question No. 89.  WT/DS269/R 
 Page 99 
 
 
issue in the Gausepohl case507 and in the present dispute, in practice, there has been little dispute 
regarding the type of product that falls under heading 02.10.508  Further, the European Communities 
submits that the application of the principle of pr eservation has rarely been problematic because it is 
normally obvious whether a product has been preserve d by one of the means mentioned in heading 
02.10.509  The European Communities clarifies that th e preservation techniques referred to in heading 
02.10 leave the meat with specific characteristics (e.g., colour, saltiness, dryness) that are readily 
detectable (e.g., in Parma ham).510  The European Communities submits that it applies the principle of 
preservation irrespective of the origin of imports.511 
7.308  Brazil  submits that, in the absence of HS Committe e decisions on practical aspects associated 
with the verification of classification criteria fo r products covered by heading 02.10, classification 
must be based simply on the wording of the legal text read in conjunction with the HS Explanatory 
Notes.512 
7.309  Thailand  argues that, even if one assumed that a specified purpose may be relevant to 
determine the classification of a product, the Eu ropean Communities' appr oach suggests that the 
customs officers of the 25 EC member States would have to make individual judgements as to how 
the features of the product clearing customs achiev e the purpose of long-term preservation, a concept 
which, in Thailand's view, is vague and uncertain.  Thailand submits that this defeats the object and 
purpose of the WTO Agreement with respect to tariff concessions negotiated by the European 
Communities under its Schedule – namely, to ensure the "security and predictability of the 'reciprocal 
and mutually advantageous arrangements directed to the substantial reductio n of tariffs and other 
barriers to trade'".513 
The EC Schedule  
7.310  The European Communities  submits that the object and purpose underlying the scope and 
content of its respective concessions on "frozen" chic ken meat and "salted" products is self-evident, 
given the tariff structure and trade at the ti me the concessions were made.  The European 
Communities submits that, at the time it concluded it s Schedule, it was aware of the substantial trade 
in "frozen" chicken cuts and that such cuts woul d enter into competition with domestically produced 
chicken cuts for further processing.  The European  Communities argues that, therefore, it negotiated 
with other WTO Members an appropriate level of protection from imports of "frozen" chicken cuts 
including special safeguard measures under Article 5 of the Agreement on Agriculture.  According to 
the European Communities, it did so in the knowledge  that, in order to qualify as a "salted" product 
under heading 02.10, the product would have to be salted to ensure its preservation.  The European 
Communities submits that it satisfied itself with si gnificantly lower tariffs on salted products because 
it was aware that few products were traded on an  international basis under that heading.  The 
European Communities submits that, had it imagined that frozen chicken with added salt could have 
been classified under heading 02.10, it would never have set such a low tariff.514  In addition, the 
European Communities submits that neither of the co mplainants have purported to show that, at the 
time WTO Members were making their Uruguay Round market access concessions, there was a 
common view that the market access being negotiated for "salted" products was not in respect of 
products which had been salted for preservation, nor that the object and purpose of negotiating a 
specific level of market access, suitable for importing and exporting interests was made on any other 
                                                      
507 This case is discussed below in paras. 7.372 et seq . 
508 EC's reply to Panel question No. 23. 
509 EC's reply to Panel question No. 44. 
510 EC's reply to Panel question No. 91. 
511 EC's reply to Panel question No. 44. 
512 Brazil's comments on the WCO's reply to Panel question No. 11 to the WCO. 
513 Thailand's second written submission, para. 41 referring to Appellate Body Report, EC – Computer 
Equipment , para. 95; Thailand's reply to Panel question No. 118. 
514 EC's first written submission, para. 163. WT/DS269/R 
Page 100  
 
basis.  The European Communities submits that, consequently, the object and purpose of the tariff structure in question clearly supports the Europ ean Communities' interpretation of its obligations.
515 
7.311  Brazil  submits that the "object and purpose" of  a concession contained in the schedule of a 
particular Member must be determined on the basi s of the common understanding of all parties, not 
just the alleged will or purpose of the party making the concession.  Brazil submits that, for all intents 
and purposes, when the European Communities clarifie d the scope of its tariff concession by means of 
EC Regulation No. 535/94, it conceded that meat w ith a salt content of 1.2% would, by necessity, be 
subject to some form of preservation other than salting.516  Brazil further argues that, at the time tariffs 
are negotiated, Members define their offers and their obligations in terms that best suit their needs.  
However, according to Brazil, a Member cannot po ssibly thoroughly foresee what its needs will be 
ten or more years from the date it negotiated its tariffs.  Brazil argues that it is precisely because trade 
flow is dynamic that it is possible, and even likel y, that some new and unexpected trade pattern will 
develop in a way that is contrary to or does not suit a Member's need.  Brazil submits that the WTO Agreements recognize this possibility and provide ways for Members to address unexpected trade 
patterns, such as the imposition of safeguards, anti-dumping or countervailing measures or 
modification of its schedule under the provisions of Article XXVIII of the GATT 1994.  However, 
Brazil submits that what a Member cannot do is to unilaterally change its commitments simply 
because a new trade pattern has emerged and the corresponding concession in its schedule no longer 
suits its needs.
517 
7.312  Thailand  submits that the European Communities ma y not use the classification process to 
respond to changes in patterns of trade since it last negotiated its tariff schedules.518  According to 
Thailand, the principle of long-term preservation was introduced by the European Communities in 
relation to heading 02.10 solely to narrow the sc ope of a tariff concession that had generated more 
trade than the European Communities had expe cted.  Thailand submits that the European 
Communities should have addressed this concern by re-negotiating its concession under Article 
XXVIII of the GATT 1994 rather than by excluding products from the tariff heading implementing 
that concession.519 
7.313  The European Communities  accepts that trade flows may change after tariff commitments 
are made.  However, the European Communities subm its that this does not mean that such trade 
developments are without parameters.  According to the European Communities, any new trade flows 
must fall under the scope of the tariff commitment they claim.  The European Communities submits that, in the present case, the new trade flow do es not fall under the European Communities' tariff 
commitment in respect of "salted" meat.
520 
(ii) Comments by the World Customs Organization 
7.314  The WCO states that, when goods are classified unde r the HS, this is always done on the basis 
of the objective characteristics of the product at the time of importation.  The WCO states that the factor which determines the essential character of a product will vary from one product to another.  
The WCO adds that the determination of the essen tial character of a product may be done through a 
visual inspection of the product including indications  on the packing.  Reference may also be made to 
accompanying documents.  The WCO states that, in so me cases, laboratory analysis may be required.  
The WCO states that, since headings 02.07 and 02.10 cover "frozen" and "salted" products 
respectively, it would have to be determined whether the products at issue essentially have the 
                                                     
 
515 EC's first written submission, para. 164. 
516 Brazil's oral statement at the firs t substantive meeting, paras. 46-50. 
517 Brazil's reply to Panel question No. 80. 
518 Thailand's oral statement at the first substantive meeting, para. 46. 
519 Thailand's oral statement at the first substantive meeting, para. 6. 
520 EC's reply to Panel question No. 80.  WT/DS269/R 
 Page 101 
 
 
character of a "frozen" or a "salted" product.  The WCO surmises that it would probably be straightforward to determine whether or not a product is "frozen" whereas recourse to laboratory 
analysis might be required to determine whethe r a product can be regarded as a "salted" product 
within the meaning of heading 02.10.
521  The WCO also notes that practical aspects associated with 
the verification of classification criteria are taken into account for the purposes of classification of 
commodities at the HS level once they have become part of the legal text or of the Explanatory 
Notes.522 
(iii) Analysis by the Panel 
7.315  The Panel recalls that Article 31(1) of the Vienna Convention  provides that: 
"A treaty shall be interpreted in good faith  in accordance with the ordinary meaning 
to be given to the terms of the treaty in their context and in the light of its object and 
purpose." 
7.316  Article 31(1) of the Vienna Convention  clearly indicates that a treaty must be interpreted in 
light of that treaty's  object and purpose.  Notably, Article 31(1) of the Vienna Convention does not 
indicate that the object and purpose of particular terms of a treaty  must be determined, such as 
heading 02.10 of the EC Schedule. 
7.317  In our view, for the purposes of this case, Article 31(1) of the Vienna Convention  instructs us 
to consider the object and purpose of the treaty in wh ich the treaty terms that are the subject of this 
dispute can be found.  In particular, the treaty terms at issue in this case are contained in 
heading 02.10 of the EC Schedule.  As noted above in  paragraph 7.6, on the basis of Article II:7 of the 
GATT 1994 and Article II:2 of the WTO Agreement,  the concessions contained in the EC Schedule 
are treaty terms of the GATT 1994 and the WTO Agreemen t.  Accordingly, we consider that our task 
in this section is to determine the object a nd purpose of the WTO Agreement and the GATT 1994.523 
The WTO Agreement and the GATT 1994  
7.318  The object and purpose of the WTO Agreement can be deduced from the preambles of the 
WTO Agreement and of the agreements annexed th ereto.  The preamble of the WTO Agreement 
specifies that one of the purposes of the Agreement is to "expand[] ... trade in goods and services."  It 
also states that Members should contribute to the above-mentioned expans ion "by entering into 
reciprocal and mutually advantageous arrangements di rected to the substantial reduction of tariffs and 
other barriers to trade."  In addition, in EC – Computer Equipment , the Appellate Body stated that: 
"[T]he security and predictability of 'the  reciprocal and mutually advantageous 
arrangements directed to the substantial reduc tion of tariffs and other trade barriers to 
                                                      
521 WCO's reply to Panel question No. 1 to the WCO. 
522 WCO's reply to Panel question No. 11 to the WCO. 
523 The Panel notes that, in theory , the object and purpose of the Agreement on Agriculture, being an 
agreement that is annexed to the WTO Agreement, may also be releva nt for the interpretation of a WTO 
Member's concession on an agricultural product.  The pu rpose of the Agreement on Agriculture is to discipline 
the progressive liberalization of trad e in agricultural products as agreed by Members.  The preamble of the 
Agreement on Agriculture notes that the negotiation of commitments is part of the reform process in the 
agricultural trading system.  It also provides that "the ... long-term objective is to provide for substantial 
progressive reductions in agricultural support and protection sustained over an agreed period of time, resulting in correcting and preventing restrictions and distortions in  world agricultural markets. "  This objective appears 
to be of limited relevance to the pr esent case. Therefore, we will not pro ceed to further examine the object and 
purpose of Agreement on Agriculture. WT/DS269/R 
Page 102  
 
trade' is an object and purpose of the WTO Agreement, generally, as well as of the 
GATT 1994."
524 
The Appellate Body made clear in that case that s ecurity and predictability is not to be based on the 
"subjective views" of exporting Members but, rather, on the common intentions of the parties at the 
time of the conclusion of the negotiations. 525 
7.319  With respect to the object and purpose of the GATT 1994, in Argentina – Textiles and 
Apparel , the Appellate Body stated that: 
"[A] basic object and purpose of the GATT 1994, as reflected in Article II, is to 
preserve the value of tariff concessions negotiated by a Member with its trading partners, and bound in that Member's Sc hedule.  Once a tariff concession is agreed 
and bound in a Member's Schedule, a re duction in its value by the imposition of 
duties in excess of the bound tariff rate would upset the balance of concessions 
among Members."
526 
7.320  Taken together, the relevant aspects of the WTO Agreement and the GATT 1994 indicate that 
concessions made by WTO Members should be interp reted so as to further the general objective of 
the expansion of trade in goods and th e substantial reduction of tariffs.  It is also clear that such an 
interpretation is limited by the condition that arrange ments entered into by Members be reciprocal and 
mutually advantageous.  In other words, the terms of a concession should not be interpreted in such a 
way that would disrupt the balance of concessi ons negotiated by the parties.  Finally, the 
interpretation must ensure the security and predictab ility of the reciprocal and mutually advantageous 
arrangements manifested in the form of concessions. 
7.321  With respect to the last point referred to in the preceding paragraph, namely that an 
interpretation of the WTO Agreement and the GATT 1994 must ensure the security and predictability 
of the reciprocal and mutually advantageous arra ngements manifested in the form of concessions, the 
question has arisen in this case as to whether the in terpretation of the concession contained in heading 
02.10 of the EC Schedule to include a long- term preservation criterion could undermine this 
objective.  In this regard, we note that all the parties to this dispute, including the European 
Communities, agree that, in characterizing a produc t for the purposes of tariff classification, it is 
necessary to look exclusively at the "objective ch aracteristics" of the product in question when 
presented for classification at the border.527  The WCO has suggested that a visual inspection may 
suffice for some products whereas laboratory analys es may be required for others.  As regards the 
present case, the WCO surmises that laboratory an alyses might be required to determine whether a 
product can be regarded as "salted" within the meaning of heading 02.10 of the HS. 
7.322  With respect to the products at issue, the Eu ropean Communities has stated that, if a product 
has been "frozen" within the meaning of heading 02.07, it will s till be classified under heading 02.10 
of the EC Schedule as a "salted" product provided  that the salting has b een undertaken for the 
purposes of "long-term preservation" within the m eaning of EC Regulation No. 1223/2002 and EC 
Decision 2003/97/EC.528  However, despite questioning by the Panel and by Brazil529, the European 
                                                      
524 Appellate Body Report, EC – Computer Equipment,  para. 82. 
525 Appellate Body Report, EC – Computer Equipment,  paras. 82 and 84. 
526 Appellate Body Report on Argentina – Textiles and Apparel, at para. 47. 
527 Brazil's reply to Panel question No. 13; Thailand's oral statement at the first substantive meeting, 
paras. 51-53; Thailand's second written submission, pa ras. 38-41; EC's replies to Panel question Nos. 90 and 
105. 
528 EC's replies to Panel question Nos. 49 and 70; EC's second written submission, paras. 27, 30, 41 
and 45; EC's oral statement at  the second substantive meeting, paras. 9, 14 and 15. 
529 Panel question No. 118.  Brazil's question Nos. 1-3 to the EC following the first substantive 
meeting.  WT/DS269/R 
 Page 103 
 
 
Communities has not provided the Panel with any clear idea of what is meant by "long-term 
preservation" in practice.530  In addition, the Panel notes th at the European Communities has 
acknowledged that there are no specific guidelines to assist customs officers in determining whether 
or not a particular product should be classified under heading 02.10531 but submits that this is not 
problematic because products classifiable under heading 02.10 are "readily detectable".532  However, 
if a product arrives at the EC border that is salted and then frozen, (as in the case of the products at 
issue)533, the Panel questions how a customs officer at the border tasked with identifying the 
appropriate heading under which the product should be classified is to know whether: (a) the product 
has been preserved for the long-term; and (b) if so, whether the long-term pre servation is the result of 
salting, freezing or a combination of the two.  While the first question may be addressed through 
laboratory analyses, which the European Communities states th at it conducts when necessary,534 it is 
far from clear to us how the answer to the second qu estion will be determined.  Yet, without a means 
to determine the answer to the second question, th e customs officer will not be in a position to know 
whether the product in question should be classifi ed under heading 02.10 (i.e, because the long-term 
preservation is attributable to the salting) or u nder heading 02.07 (because the long-term preservation 
is attributable to the freezing). 
7.323  In the Panel's view, the lack of certainty associ ated with the application of the criterion of 
long-term preservation with respect to the concessi on contained in heading 02.10 of the EC Schedule 
runs counter to one of the objects and purpo ses of both the WTO Agreement and the GATT 1994, 
namely that the security and predictability of the reciprocal and mutually advantageous arrangements 
must be preserved.  Therefore, the Panel concludes that an interpretation of the term "salted" in the 
concession contained in heading 0.210 of the EC Schedule to include the criterion of long-term 
preservation could undermine the object and purpose of  security and predictability, which lies at the 
heart of the WTO Agreement and the GATT 1994. 
The EC Schedule  
7.324  The Panel notes that, in Canada – Dairy , the Appellate Body stated that: 
"[W]e do not share the Panel's view as to th e significance of the object and purpose of 
Article II of the GATT 1994 for the interpretive question at issue.  It is true, as the Panel said, that the object and purpose of Ar ticle II is 'to preserve the value of tariff 
concessions...'. However, the issue facing the Panel was what was the scope and content of the concession?  The Panel's re ference to the object and purpose of Article 
II appears to us to beg the very questi on that the Panel should have addressed: 
namely, what is the meaning of that notation?  That is, what is the shape and tenor of 
the concession that Canada had set fo rth in its Schedule of Commitments?"
535 
7.325  The European Communities relies upon  this statement by the Appellate Body to argue that its 
object and purpose when concluding the tariff heading in  question must be taken into a consideration.  
In our understanding, the above statement does not st and for this proposition.  Rather, it stands for the 
proposition that an interpreter's primary task is to determine the meaning of a scheduled commitment.  
This principle is contained explicitly in Article 31 of the Vienna Convention . 
                                                      
530 The EC has merely stated that the shelf life of preserved meats is many months at ambient 
temperature: EC replies to Panel question Nos. 49 and 96. 
531 EC's reply to Panel question No. 23. 
532 EC's replies to Panel question Nos. 44 and 91. 
533 See Brazil's reply to Panel question No. 14(a) referring to Exhibit BRA-33 and Thailand's reply to 
Panel question No. 14(a). 
534 Indeed, Exhibit THA-23, which contains the minutes of a meeting of the EC Customs Code 
Committee held on 18 - 19 February 2002, indicates that analyses had been undertaken by certain EC member 
States regarding frozen salted chicken. 
535 Appellate Body Report, Canada – Dairy , para. 137. WT/DS269/R 
Page 104  
 
7.326  Besides, as noted above in paragr aph 7.317, it is the Panel's view that, for the purposes of this 
case, Article 31(1) of the Vienna Convention  mandates us to consider the object and purpose of the 
WTO Agreement and GATT 1994.  We do not consider that Article 31(1) of the Vienna Convention  
requires consideration of the object and purpose of par ticular terms of the treaties in question – in this 
case, the term "salted" in heading 02.10 of the EC Sc hedule.  In any event, we note that one Member's 
unilateral object and purpose for the conclusion of a tariff commitment cannot form the basis of an 
interpretation pursuant to Articles 31 and 32 of the Vienna Convention .  Indeed, in interpreting 
heading 02.10 of the EC Schedule, we are required to ascertain the common  intentions of the 
parties.
536 
7.327  Therefore, in the context of the present case,  we consider that Article 31(1) of the Vienna 
Convention  does not authorize us to consider the Eu ropean Communities' unilateral object and 
purpose when it concluded its Schedule in interpreti ng the concession contained in heading 02.10 of 
the EC Schedule. 
(iv) Summary and conclusions regarding the "object and purpose" 
7.328  In the Panel's view, the lack of certainty associ ated with the application of the criterion of 
long-term preservation with respect to the concessi on contained in heading 02.10 of the EC Schedule 
runs counter to one of the objects and purposes of the WTO Agreement and the GATT 1994, namely 
that the security and predictability of the reciprocal  and mutually advantageous arrangements must be 
preserved.  Therefore, the Panel concludes that an  interpretation of the term "salted" in that 
concession to include the criterion of long-term preservation could undermine the object and purpose 
of security and predictability, which lie at the heart of both the WTO Agreement and the GATT 1994. 
(e) Special meaning: Article 31(4) of the Vienna Convention  
7.329  The Panel notes that Article 31.4 of the Vienna Convention  provides that: 
"A special meaning shall be given to a term if it is established that the parties so 
intended." 
7.330  The Panel notes that none of the parti es have referred to Article 31.4 of the Vienna 
Convention .  Nor have they advanced any argumentation to  suggest that a "special meaning" of the 
term "salted" in the concession contained in heading 02.10 of the EC Schedule exists. 
                                                      
536 We note that in EC – Computer Equipment , the Appellate Body stated that: "The purpose of treaty 
interpretation under Article 31 of the Vienna Convention is to ascertain the common  intentions of the parties.  
These common  intentions cannot be ascertained on the basis of the subjective and unilaterally determined 
"expectations" of one of the parties to a treaty.  Tariff concessions provided for in a Member's Schedule -- the 
interpretation of which is at issue here -- are recipr ocal and result from a mutually-advantageous negotiation 
between importing and exporting Members." Appellate Body Report, EC – Computer Equipment,  para. 84.  
Further, Ian Sinclair reasons that, in  the case of multilateral treaties, some  parties will have acceded to a treaty 
and, therefore, must be assumed to have joined the tr eaty not on the basis of what the original negotiators 
intended but, rather, on the basis of what the text actually says and means.  He adds that in a dispute as to treaty 
interpretation, the parties will obviously place differing constructions upon the text and, by so doing, they are 
professing to having had different intentions from the ince ption of the text.  Mr Sinclair concludes that it is the 
text of the treaty that is the expression of the intention of the parties and it is to that expression of intent that one 
must look in identifying its object and purpose: Ian Sinclair, The Vienna Convention on the Law of Treaties , 
Manchester University Press, 2nd edition (1984) pp. 130-131.  WT/DS269/R 
 Page 105 
 
 
(f) Preliminary conclusions under Article 31 of the Vienna Convention  
7.331  Following an analysis of the term "salted" in the concession contained in heading 02.10 of the 
EC Schedule pursuant to Article 31 of the Vienna Convention , the Panel concludes on a preliminary 
basis that: 
(a) The "ordinary meaning" of the term "salted" is: to season, to add salt, to flavour with 
salt, to treat, to cure or to preserve.  The ordinary meaning of the term "salted" is not 
necessarily limited to salting with common salt (NaCl). 
(b) The factual context indicates that the ordinary meaning of the term "salted" is that the 
character of a product has been altered through the addition of salt. 
(c) The "context" of the term "salted" does not clarify the "ordinary meaning" of the term 
"salted" in the concession contained in head ing 02.10 of the EC Schedule although it 
does tend to indicate that the heading is not necessarily characterized by the notion of long-term preservation. 
(d) There is evidence of "subsequent practice"  on the part of the European Communities 
which indicates that the products at issue are covered by the concession contained in 
heading 02.10 of the EC Schedule. 
(e) An interpretation of the term "salted" in the concession contained in heading 02.10 of 
the EC Schedule to include the criterion of long-term preservation could undermine the "object and purpose" of security and pred ictability, which lie at the heart of the 
WTO Agreement and the GATT 1994. 
7.332  The foregoing indicates to the Panel that the concession contained in heading 02.10 of the EC 
Schedule means that salt has been added to a product so  as to season, to add salt, to flavour with salt, 
to treat, to cure or to preserve.  The ordinary meani ng of the term "salted" is not necessarily limited to 
salting with common salt (NaCl).  It also tends to indicate that the concession in question is not characterized by the notion of long-term preservati on.  Therefore, while the interpretation undertaken 
by the Panel pursuant to Article 31 of the Vienna Convention  suggests that the products at issue are 
covered by the concession contained in heading 02.10 of the EC Schedule, we turn to supplementary 
means of interpretation of the concession contained in heading 02.10 of the EC Schedule pursuant to 
Article 32 of the Vienna Convention  to seek confirmation that this is, in fact, the case. 
(g) Supplementary means of interpretation: Article 32 of the Vienna Convention  
(i) Preparatory work 
Arguments of the parties
 
7.333  The European Communities  considers the Modalities Agreement to be, at the very least, 
"preparatory work" because its sets out the parameters  of the negotiations and, as such, it can be taken 
into account along with the "circumstances of conclusion" under Article 32 of the Vienna 
Convention .537  The European Communities argues that th e effect of taking the Modalities Agreement 
into account, is that the date for considering the sc ope of the relevant tariff headings in the EC 
Schedule as evidenced through the circumstance s of its conclusion under Article 32 of the Vienna 
                                                      
537 The EC relies on paras. 6.72 et seq  of the Panel Report on US – Gambling to suggest that the 
Modalities Agreement may even qualify as "context" under Article 31(2) of the Vienna Convention : EC's oral 
statement at the second subs tantive meeting, para. 72. WT/DS269/R 
Page 106  
 
Convention  is 1 September 1986.
538  In this regard, the European Communities submits that 
agricultural tariffs were established on the basis of  the Modalities Agreement, pursuant to which there 
was a significant reliance upon information dating from the commencement of the Uruguay Round.539  
Furthermore, according to the European Communities, the use of the starting date of negotiations as a 
basis for agreed changes has been common practice in the GA TT/WTO system.  The European 
Communities submits that such a date has the advant age of providing certainty  and preventing parties 
from changing their law and/or practice in order to improve their negotiating positions.  The European 
Communities contends that, in the absence of any ot her expression of intention by the parties, the 
parties to the Uruguay Round negotiations must be ta ken to have intended this  date as the principal 
point at which the scope of individual  tariff concessions should be defined.540  The European 
Communities submits that, therefore, it is not plausible to argue that the common intention of the 
negotiating parties could be affected by unilateral acts, absent some eviden ce from the complainants 
(such as a footnote in the EC Schedule) to the contrary.541  The European Communities submits that, 
consequently, in so far as EC law and practice on the scope of headings is to be taken into account as 
"circumstances of conclusion", they should be the law and practice as they stood on 1 September 
1986.542  According to the European Communities, in an y event, the critical date should not be later 
than 15 December 1993 when the Uruguay Round negotiations formally terminated.543  The European 
Communities submits that, throughout  this period, both EC law and practice supported the principle 
of long-term preservation with respect to heading 02.10 of the EC Schedule.544 
7.334  Thailand  submits that the Modalities Agreement may theoretically be considered as 
"preparatory work" within the meaning of Article 32 of the Vienna Convention.   However, Thailand 
questions the probative value of this document as a supplementary means of interpretation.545  
Thailand submits that paragraph 3 of the Modalities Agreement states th at "[f]or agricultural products 
currently subject to ordinary customs duties onl y, the reduction commitment shall be implemented 
…only on the level applied as at 1 September 1986".  According to Thailand, this statement merely 
requires that products subject to ordinary cust oms duties be bound at the level applied as at 1 
September 1986.546  Thailand argues that it is common to agree at the beginning of multilateral trade 
negotiations on a date in the past to be used to de termine the tariff levels to which any agreement on 
tariff reductions would be applied.  According to Thailand, Members, therefore, did agree in the 
Modalities Agreement to use the level of duties a pplied as at 1 September 1986.  However, that 
agreement cannot be taken to mean that the scope of  the EC Schedule should be determined as at the 
beginning of the Uruguay Round.547 
7.335  Brazil  does not consider that the Modalities Ag reement is "preparatory work" under 
Article 32 of the Vienna Convention .  Brazil notes in this regard that the introductory note to the 
Modalities Agreement states that "[t]he revised text is being re-issued on the understanding of 
participants in the Uruguay Round that these negotia ting modalities shall not be used as a basis for 
dispute settlement proceedings under the MTO Agreement (sic). "548  Brazil submits that, through this 
statement, WTO Members unequivocally expressed  their intention not to use the Modalities 
Agreement as a basis for dispute settlement pro ceedings under the WTO Agreement and, given that 
the WTO dispute settlement system serves "to clarif y the existing provisions of  those agreements in 
                                                      
538 EC's second written submission, para. 107. 
539 EC's second written submission, paras. 103 and 107 relying upon Exhibit EC-9. 
540 EC's second written submission, paras. 104-105. 
541 EC's reply to Panel question No. 58. 
542 EC's second written submission, para. 107. 
543 EC's second written submission, paras. 96 and 110. 
544 EC's second written submission, para. 118. 
545 Thailand's reply to Panel question No. 78. 
546 Thailand second written submission, para. 76.  
547 Thailand's comments on the EC's reply to  Panel question No. 87.  
548 The Modalities Agreement is contained in Exhibit EC-9.  WT/DS269/R 
 Page 107 
 
 
accordance with customary rules of interp retation of public international law"549, Members 
determined that the Modalities Agreement may not be  used as "preparatory work" within the meaning 
of Article 32 of the Vienna Convention  for purposes of dispute settlement  proceedings.  In addition, 
Brazil points out that "preparatory work" is to be used  in the interpretation of a treaty – in this case the 
EC Schedule – and not in the interpretation of the European Communities' import practice at the 
conclusion of the Uruguay Round.550 
Analysis by the Panel  
7.336  The Panel recalls that the European Commun ities argues that the effect of taking the 
Modalities Agreement into account is that the date fo r considering the scope of the relevant tariff 
headings in the EC Schedule as evidenced through the circumstances of its conclusion under Article 
32 of the Vienna Convention  is 1 September 1986.551  As noted previously, th is argument concerns the 
temporal scope of the term "circumstances of conclusion" in Article 32 of the Vienna Convention .  As 
explained in greater detail below in paragraphs 7.340 et seq , we do not consider that the term is 
limited in temporal terms.  Since the reason fo r the European Communities' reliance on the Modalities 
Agreement is to argue that the date for consider ing the meaning of heading 02.10 of the EC Schedule 
as evidenced through the "circumstances of its c onclusion" under Article 32 is 1 September 1986, in 
light of our conclusions regarding the temporal scope  of Article 32, we do not consider it is necessary 
to determine whether the Moda lities Agreement should be taken into consideration in our 
interpretation of the EC Schedule as "preparatory work" within the meaning of Article 32 of the 
Vienna Convention . 
(ii) Circumstances of conclusion of the EC Schedule 
Substantive and temporal scope of  "circumstances of conclusion"  
Arguments of the parties 
7.337  The European Communities  submits that Article 32 of the Vienna Convention  has its origins 
in the principle of good faith.  According to th e European Communities, Ar ticle 32 ensures that the 
"reality of the situation" upon which parties' common  intent is based may be relevant in interpreting 
an agreement.552  The European Communities argues that, wh ether a particular event is a relevant 
circumstance which should determine the interpreta tion of a treaty, is a question of fact to be 
determined in each case.553  As noted previously, the European Communities submits that, in so far as 
EC law and practice on the scope of headings is  to be taken into account as "circumstances of 
conclusion", they should be the law and practice as they stood on 1 September 1986.554  According to 
the European Communities, in any event, the critical date should not be later than 15 December 
1993.555  The European Communities submits that it was on 15 December 1993 that the substantive 
market access negotiations pursuant to the Mi nisterial Declaration on the Uruguay Round were 
concluded.  The European Communities submits that the subsequent period was for "verifying that the 
draft final schedules reflected accurately the agreed results of the negotiations".556  The European 
Communities concedes that, strictly speaking, ev ents occurring after 15 December 1993 may qualify 
as "circumstances of the conclusion".557  The European Communities clarifies that it does not claim 
that the negotiating parties could not have agreed that changes in national law during the verification 
                                                      
549 Article 3.2 of the DSU. 
550 Brazil's reply to Panel question No. 78. 
551 EC's reply to Panel question No. 58; EC's second written submission, para. 107. 
552 EC's second written submission, para. 62. 
553 EC's second written submission, para. 109. 
554 EC's second written submission, para. 107. 
555 EC's second written submission, paras. 96 and 110. 
556 EC's second written submission, paras. 110-111. 
557 EC's second written submission, para. 96. WT/DS269/R 
Page 108  
 
phase would affect parties' obligations since the Ap pellate Body emphasized that the "circumstances 
of conclusion" could arise at any time up to the actual conclusion.
558  However, the European 
Communities submits that a party seeking to invoke such an event would need to prove that the 
relevant issue was raised during the verifica tion period, e.g., through a specific request.559 
7.338  In response, Brazil  submits that dictionaries define the term "conclusion" as "the result or 
outcome of an act or process" or simply "a final result".560  Brazil suggests that there would be no 
point to negotiations if 1 Septem ber 1986 was accepted as the date at which the "circumstances of 
conclusion" were to be determined.  Brazil submits that there is no reason to assume that negotiating 
parties could not, and did not, make any changes in their classification nomenclatures from 1986 to 1994, when negotiations on tari ff concessions were concluded.
561  Brazil submits that it is also wrong 
to state that the conclusion of the EC Schedul e occurred on 15 December 1993.  Brazil submits that 
this understanding diminishes, or even rejects, the importance of the period of verification of 
schedules as a stage in the process leading to the establishment of formal schedules.562  Brazil argues 
that, in reality, the conclusion of negotiations occu rs the moment parties to a negotiation have agreed 
to and sanctioned the result of such negotiation.563  Brazil further submits that the Appellate Body 
unequivocally attached importance to the special process of "check and control" of Members' 
schedules of concessions, a process that ended on 25 March 1994.564  Brazil also notes that the 
European Communities admits that the period for ve rification of schedules may qualify in the strict 
legal sense as circumstances of the conclusion but subj ect to the caveat that proof must be given that 
the issue was raised during the verification period.  Brazil submits that such burden of proof does not 
exist and, in any event, does not make sense.  Me mbers could have verified each others' schedules and 
come to the conclusion that there were no issues to further discuss or raise during the verification 
process.565 
7.339  Brazil,  Thailand  and the European Communities  submit that actual knowledge during 
negotiations of a document or instrument is not ne cessary on the part of some or all negotiators in 
order for that document or instrument to qualify as "circumstances of the conclusion" under Article 32 
of the Vienna Convention .  Thailand explains that, from a practical perspective, it would be extremely 
difficult to prove actual knowledge am ong all negotiators.  Brazil also submits that, since instruments 
or documents may be drafted during the negotiations  of a treaty without the participation of all 
contracting parties, one cannot presume that such documents are not part of the historical background 
of the treaty simply because some States did not or we re not able to participate in the drafting of such 
documents.566  Brazil and the European Communities submit that, rather, in order for a document or 
instrument to qualify for consideration as "prepara tory work" and/or "circumstances of conclusion" 
pursuant to Article 32 of the Vienna Convention , that document or instrument must have been in the 
public domain or accessible to WTO Members.567 
Analysis by the Panel 
7.340  In the Panel's view, for the purposes of Article 32 of the Vienna Convention , the 
"circumstances of conclusion" may provide insights  into the historical background against which the 
                                                      
558 EC's second written submission, para. 112. 
559 EC's second written submission, para. 96. 
560 Brazil's oral statement at the seco nd substantive meeting, para. 64. 
561 Brazil's oral statement at the seco nd substantive meeting, para. 66. 
562 Brazil's oral statement at the seco nd substantive meeting, para. 67. 
563 Brazil's oral statement at the seco nd substantive meeting. para. 68. 
564 Brazil's oral statement at the second substantive meeting. para. 69 referring to Appellate Body 
Report, EC – Computer Equipment , para. 109. 
565 Brazil's oral statement at the seco nd substantive meeting, para. 70. 
566 Brazil's reply to Panel question No. 122; Thailand's reply to Panel question No. 122; EC's reply to 
Panel question No. 122. 
567 Brazil's reply to Panel question No. 122.  WT/DS269/R 
 Page 109 
 
 
EC Schedule was negotiated.  The historical bac kground comprises the collection of events, acts and 
other instruments that characterize the prev ailing situation in the European Communities.568 
7.341  With respect to the events, act s and other instruments that may be taken into account as 
"circumstances of conclusion" under Article 32 of the Vienna Convention , in EC – Computer 
Equipment , the Appellate Body expressly recognized that the relevant Member's  legislation  on 
customs classification that existed at the time the tariff concessions were ne gotiated as well as that 
Member's classification practices  during negotiations are part of the circumstances of the conclusion 
of the WTO Agreement and may be used as a suppl ementary means of interpretation within the 
meaning of Article 32 of the Vienna Convention .569 
7.342  The European Communities has rais ed the issue of the point in time when the "circumstances 
of conclusion" under Article 32 of the Vienna Convention  should be ascertained.  In our view, there is 
not necessarily a single point in time when the "cir cumstances of conclusion" should be ascertained.  
Rather, we consider that it relates to a period starti ng some time prior to the conclusion of the treaty in 
question and ending at the point of conclusion.570 
7.343  Regarding the question of how far back in time a treaty interpreter may go in identifying the 
events, acts or other instruments that may qualify as "circumstances of conclusion" under Article 32, 
in our view, in theory, there is no temporal limitation in this regard.  We consider that "relevance" is 
the more appropriate criterion to judge whether a par ticular event, acts or other instrument qualifies as 
                                                      
568 When describing the "circumstances of conclusion" under Article 32 of the Vienna Convention, 
Mustafa Yasseen states that:  "They ar e the historical background that comp rises the collection of events which 
led the parties to conclude the treaty in order to main tain or confirm the status quo, or to bring about an 
alteration made necessary by a new situation."  Mustafa Yasseen, "L'interprétation des Traités d'après la Convention de Vienne sur le Droit des Traités" in Recueil des Cours de l'Académie de Droit International , 
(1974) Vol. III, p. 90, para. 3.  International law co mmentaries also provide suppo rt for the view that, in 
identifying the "circumstances of conclu sion" of a treaty under Article 32 of the Vienna Convention , it is 
necessary to consider the "reality of the situation" and that this situation may vary from case to case.  In 
particular, Mustafa Yasseen states that: "Treaties as a social phenomenon are the consequence of a series of causes.  It is, therefore, useful to know the conditions of the parties and the reality of the situation that the 
parties wished to resolve, the importance of the problem they wanted to settle and the scope of the dispute they 
wanted to terminate through the Treaty being interpreted."  Mustafa Yasseen, "L'interprétation des Traités d'après la Convention de Vienne sur le Droit des Traités" in Recueil des Cours de l'Académie de Droit 
International , (1974) Vol. III, p. 90, para. 4.  Similarly, Ian Sinclair states: "... the reference in Article 32 ... to 
the circumstances of the conclusion of a treaty may have  some value in emphasising the need for the interpreter 
to bear constantly in mind the historical background against which the treaty has been negotiated. ... It may also 
be necessary to take into account the individual attit udes of the parties – their economic, political and social 
conditions, their adherence to certain groupings or their status, for example, as importing or exporting country in the particular case of a commodity agreement – in seekin g to determine the reality of the situation which the 
parties wished to regulate by means of the treaty."  Ian Sinclair, The Vienna Convention on the Law of Treaties , 
Manchester University Press, 2
nd edition (1984) p. 141. 
569 Appellate Body Report, EC – Computer Equipment , paras. 92 and 94. 
570 Mustafa Yasseen states that: "It is the circumst ances in which the treaty was concluded;  it could 
therefore be said that it is the circumstances of a certain period in time, that is to say the period during which the treaty was concluded.  But does this mean that the possibility of historical research into an earlier period must be 
ruled out?  We think not.  Indeed, it is useful, and some times even necessary, to carry out such research in order 
to acquire a  better understanding of the actual cirumstan ces in which the treaty was co ncluded.  In any case, an 
overall examination of the treaty's historical background may be considered as a supplementary means of 
interpretation, given the series of events leading to its conclusion.  Let us not forget that the list of 
supplementary means of interpretation contained in Article 32 of the Vienna Convention on the Law of Treaties 
is not exhaustive.  If the circumstances in which the treaty was concluded are expressly mentioned, it is to 
underline their importance in the elaboration of the Treaty, and not to exclude the possibility of wider-ranging and more thorough historical research into a period preceding that of the co nclusion of the treaty….  "  Mustafa 
Yasseen, "L'interprétation des Traités d'après la Co nvention de Vienne sur le Droit des Traités" in Recueil des 
Cours de l'Académie de Droit International , (1974) Vol. III, p. 92, paras. 10-11. WT/DS269/R 
Page 110  
 
part of the "circumstances of conclusion".
571  As for how such relevance may be demonstrated, it is 
the Panel's view that it must be shown that the ev ent, act or other instrument has or could have 
influenced the specific aspects of the ulti mate text of a treaty that are in issue.572 
7.344  Having stated that, in theory, there is no temporal limitation on what may qualify as 
"circumstances of conclusion" and that relevance is the more appr opriate criterion for determining 
such qualification, we acknowledge that there ma y be some correlation between the timing of an 
event, act or other instrument (i.e. how far back in the past they took place, were enacted or were 
adopted) and their relevance to the treaty in question.  It would be fair to state that, generally speaking, the further back in time th at an event, act or other instrument took place, was enacted or was 
adopted relative to the conclusion of a treaty, it is less  likely to have influenced the ultimate text of the 
treaty and, therefore, it is less likely that it is relevant  to the interpretation of that treaty.  Furthermore, 
the fact that Article 32 of the Vienna Convention  refers to "circumstances of conclusion " indicates to 
us that the event, act or other instrument should be temporally proximate to the conclusion of a treaty in order for it to be taken into account for the interpretation of that treaty under Article 32 as 
"circumstances of conclusion".  In our view, what is considered temporally proximate will vary from 
treaty provision to treaty provision. 
7.345  With respect to the end date of the period of "conclusion", we note that the European 
Communities draws a distinction between the time wh en the text of the EC Schedule was finalized 
(i.e. on 15 December 1993) and the period during which the contents of that Schedule were verified 
by WTO Members (between 15 February until 25  March of 1994).  The European Communities 
seems to suggest that the former ra ther than the latter should be taken as the end date of the period 
during which the "circumstances of conclusion" of  the treaty can be assessed unless it can be shown 
that a party seeking to invoke a later event prov es that it was raised during the verification period, 
e.g., through a specific request.
573  We refer to our reasoning in paragraphs 7.100-7.101 above and 
recall that, in paragraph 7.101, we found that the EC Schedule was concluded on 15 April 1994.  That 
finding is equally applicable here .  Therefore, it is our view that, in the context of the present case, 
events, acts and other instruments that took place, we re enacted or were adopted at any time up until 
15 April 1994 may be considered as "circumstanc es of conclusion" under Article 32 of the Vienna 
Convention , provided that they have been shown to be relevant. 
7.346  In relation to the issue of whether knowledge on the part of all parties of an event, act or other 
instrument is necessary in order for that event, act or instrument to qualify as "circumstances of 
conclusion" under Article 32 of the Vienna Convention , it is our view that actual knowledge is not 
necessary.  The Panel considers that, if actual par ticipation in the conclusion of a treaty (which may 
be equated with actual knowledge) we re to determine whether account may be taken of a particular 
event, act or other instrument to which only those pa rticipating were privy, this would imply that the 
results of the interpretative process may differ depe nding upon whether or not a party participated in 
negotiations in the lead up to the conclusion of the treaty.  In the Panel's view, this result cannot be 
desirable if a coherent and consiste nt approach to the interpretation of a given treaty obligation is to 
                                                      
571 We note that Ian Sinclair states that "no would be interpreter of a treaty, whatever his doctrinal point 
of departure, will deliberately ignore any material which can usefully serve as a guide towards establishing the 
meaning of the text with which he is confronted":  Ian Sinclair, The Vienna Convention on the Law of Treaties , 
Manchester University Press, 2nd edition (1984) p. 116. 
572 In support, we note that Mustafa Yasseen states th at: "It is only logical that the circumstances in 
which the treaty was concluded should influence the wa y in which it was drafted.  An examination of these 
circumstances can therefore shed a certain amount of light on the intention of the parties and thus help explain the formulas they adopted." Mustafa Yasseen, "L'interprétation des Tra ités d'après la Convention de Vienne sur 
le Droit des Traités" in Recueil des Cours de l'Académie de Droit International , (1974) Vol. III, p. 90, para. 5. 
573 EC's second written submission, paras. 96, 107 and 11 0.  In this regard, we recall that the European 
Communities argues that, as far as EC law and practice on the scope of headings is to be taken into account as 
"circumstances of conclusion", they should be the law and practice as they stood on 1 September 1986 and, in 
any event, the critical date should not  be later than 15 December 1993.  WT/DS269/R 
 Page 111 
 
 
be achieved.  In our view, provided that parties ha ve deemed notice of a particular event, act or 
instrument through publication, they may be consid ered to have had constr uctive knowledge and that 
such knowledge suffices for the purposes of Article 32 of the Vienna Convention .574 
7.347  In light of the foregoing, we will consider EC  law and the EC's classification practice during 
the Uruguay round negotiations to the extent that they are relevant to the conclusion of the EC 
Schedule pursuant to Article 32 of the Vienna Convention . 
EC law  
EC Regulation No. 535/94 
 Arguments of the parties 
7.348  With respect to the question of whether or  not EC Regulation No . 535/94 qualifies as 
"circumstances of conclusion" under Article 32 of the Vienna Convention, Brazil  and Thailand  
submit that EC Regulation No. 535/94 is part of the circumstances surrounding the conclusion of the 
EC Schedule within the meaning of Article 32 of the Vienna Convention  and should, therefore, be 
considered in interpreting the terms of the European Communities' concession under heading 02.10.575  
They submit that, from 15 February until 25 Marc h of 1994, Members were given the opportunity to 
check and control the scope and defin ition of each other's tariff concessions.576  They argue that, prior 
to the end of the verification process for tariff schedules during the Uruguay Round and the conclusion of the EC Schedule, the European Comm unities amended the CN as  contained in Annex I 
to EEC Regulation No. 2658/87 through EC Regulation No. 535/94.
577  Brazil points out that the 
definition of the term "salted" for heading 02.10 contained in EC Regulation No. 535/94 was the only 
existing definition of "salted" for heading 02. 10 in the CN at the time the EC Schedule was 
concluded.578  According to Brazil and Thailand, WTO Members negotiated tariff concessions based 
on that definition of "salted" meat.579  As for the significance of the fact that EC Regulation No. 
535/94 only entered into force after the verificati on period had ended, Brazil submits that previous 
WTO and adopted GATT panels "have always consid ered that mandatory legislation of a Member, 
even if not yet in force or not applied, can be challenged by another WTO Member".580  Brazil 
submits that, if mandatory legislation not yet in  force can be challenged by another WTO Member, 
the European Communities' definition of "salted" me at in EC Regulation No. 535/94, that was public 
but not in force during the period of verification of  schedules, could also have been challenged by a 
negotiating partner during the period of verification.  Brazil explains that, even though the European 
Communities' definition of "salted" meat of heading 02 .10 was not yet in force, thus not applicable to 
                                                      
574 In support, we note that Ian Sinclair has stated that: "... recourse to travaux préparatoires  does not 
depend on the participation in the drafting of the text of the State against whom the travaux are invoked.  To 
hold otherwise would disrupt the unity of a multilateral treaty, since it would imply that two different methods 
of interpretation should be employed, the one for States who participated in the travaux prèparatoires  and the 
other for States who did not so participate.  One qualification should, however, be made.  The travaux 
préparatoires  should be in the public domain so that States which have not participated in the drafting of the 
text should have the possibility of consulting them.  Travaux préparatoires  which are kept secret by negotiating 
States should not be capable of being invoked against subsequently  acceding States."  Ian Sinclair, The Vienna 
Convention on the Law of Treaties , Manchester University Press, 2nd edition (1984) p. 144.  We see no reason 
why these comments would not be equally applicable with respect to "circumstances of conclusion" under 
Article 32 of the Vienna Convention . 
575 Brazil's reply to Panel question No. 58; Thaila nd's first written submission, paras. 135-136. 
576 Brazil's reply to Panel question No. 56; Thailand's reply to Panel question No. 75; Thailand's second 
written submission, para. 78. 
577 Brazil's first written submission, para. 21; Thailand's first written submission, paras. 136-137. 
578 Brazil's first written submission, para. 98. 
579 Brazil's first written submission, para. 176; Thailand's second written submission, para. 79. 
580 Brazil refers to Panel Report on Turkey – Textiles , para. 9.37 and footnote 263; and GATT Panel 
Report on US – Superfund, paras. 5.2.1-5.2.2. WT/DS269/R 
Page 112  
 
current trade, it would, nevertheless, be applicable to  future trade.  Therefore, according to Brazil, the 
mere knowledge by the European Communities' negotiating partners of what the European 
Communities considered to be "salted" meat of heading 02.10 was enough for the purposes of check 
and control of the scope and de finition of tariff concessions.
581 
7.349  In response, the European Communities  submits that all of the i ssues dealt with during the 
verification process concerned matters that were apparent in the texts of the schedules and none 
concerned aspects of national practice.582  The European Communities argues that, therefore, parties 
must have assumed that national developments w ould not change the substance of concessions, at 
least unless they were specifically brought to the attention of negotiators.583 
7.350  Brazil  understands that EC Regulation No. 535/94 was not enacted as a response to requests 
made by WTO Members to the European Communiti es for clarification regarding heading 02.10 in 
the EC Schedule.584  Brazil submits that, nevertheless, it is  reasonable to expect that a Regulation 
defining "salted" meat for heading 02.10 of the EC  Schedule, issued by th e European Communities at 
the end of the Uruguay Round negotiations, set out th e criteria adopted by the European Communities 
in its Schedule with respect to that product.585  Thailand submits that EC Regulation No. 535/94 
provided a definition of "salted" meat that set out the criteria for the classification of a product under 
heading 02.10.586  Brazil submits that the definition of the term "salted" in EC Regulation No. 535/94 
comprised the European Communities' understanding of what constitutes "salted" meat of heading 
02.10 and negotiating partners accepted and underst ood that the tariff being negotiated for heading 
02.10 in the EC Schedule applied to the products that fit the definition of "salted" meat as contained in 
the European Communities' CN.587  Brazil argues that the tariff concession and corresponding 
definition were accepted by the other Member s when they signed the Marrakesh Protocol.588  
According to Brazil, the evidence of  such acceptance is the signature of the Marrakesh Protocol on 15 
April 1994.589 
7.351  In response, the European Communities  submits that compelling legal and factual evidence 
existed at the time of the Uruguay Round nego tiations pointing to a common understanding that 
"salted" in heading 02.10  referred to salt added for the purpose of preservation.590  The European 
Communities argues that EC Regulation No. 535/94 is  a further act, in the context of a series of 
legislative acts and judicial decisions, which confirm and elaborate on the principle of preservation as the appropriate interpretation of heading 02.10.
591  The European Communities submits that, given the 
compelling evidence that "salted" under heading 02. 10 meant salting for long-term preservation, it is 
not plausible to pretend that the common intention of the negotiating parties could have been affected 
by EC Regulation No. 535/94 or by any other su ch unilateral acts, absent some evidence from the 
complainants to the contrary.592 
                                                      
581 Brazil's reply to Panel question No. 56. 
582 In support, the EC refers to the minutes of the Trade Negotiations Committee, held on 30 March 
1994 (MTN.TNC/43, 1994) contained in Exhibit EC-37.  The EC submits that, for example, the US complained 
that the Korean Schedule did not reflect the commitment made during the negotiations regarding the "chemical 
harmonization initiative", and that the EC did not intend to commence the implementation of its agriculture concessions until mid-1995. 
583 EC's comments on Brazil's reply to Panel question No. 81. 
584 Brazil's reply to Panel question No. 58. 
585 Brazil's rely to Panel question No. 77. 
586 Thailand's first written submission., para. 30. 
587 Brazil's reply to Panel question No. 77. 
588 Brazil's reply to Panel question No. 57. 
589 Brazil's reply to Panel question No. 81. 
590 EC's oral statement at the first substantive meeting, paras. 39-43. 
591 EC's second written submission, para. 8. 
592 EC's reply to Panel question No. 58.  WT/DS269/R 
 Page 113 
 
 
7.352  Thailand  submits that EC Regulation No. 535/94 was incorporated into the CN through 
EC Regulation No. 3115/94.  Thailand notes that the preamble of EC Regulation No. 3115/94 refers, 
inter alia , to the need to "amend the combined nomen clature to take account of ... changes in 
requirements relating to statistics or commercial polic y, in particular by virtue of Council Decision 
bringing into force simultaneously the acts implementing the results of the Uruguay Round of 
multilateral trade negotiations and Council Regulation concerning certain measures resulting from the 
conclusion of negotiations under Article XXIV:6 and other measures necessary for simplification 
purposes."  Thailand asserts that, therefore, EC Regulation No. 3115/94 recognizes that 
EC Regulation No. 535/94 – defining the term "sa lted" under heading 02.10 – was one of the acts 
implementing the results of the Uruguay Round.593  Thailand also notes that the content of 
EC Regulation No. 535/94 was enacted many tim es as a Council Regulation through the annual 
issuance of the European Communities' CN.594  Thailand submits that EC customs authorities in the 
EC member States relied on this definition of "salted" to classify chicken meat, frozen and impregnated with a salt content of over 1.2% under 02.10 of the CN from 1996 - 2002, when EC Regulation No. 1223/2002 entered into force.
595 
7.353  In response, the European Communities  disputes that EC Regulation No. 535/94 was an act 
implementing the Uruguay Round Agreements.596  According to the Europ ean Communities, the mere 
fact that EC Regulation No. 535/94 was refe rred to in EC Regulation No. 3115/94, which 
implemented the annual revision of the European Communities' CN in 1994, does not mean that it 
was intended to implement the Uruguay Round Agre ements since EC Regulation No. 3115/94 also 
consolidated changes made to the CN during 1994.597  The European Communities argues that 
EC Regulation No. 535/94 is a unilateral act, which ca nnot determine the scope of a tariff concession, 
because the Appellate Body has insisted in EC – Computer Equipment  that the commitment of a 
particular Member must reflect the "common intent" of all the parties.598 
7.354  With respect to whether or not WTO Member s can be taken to ha ve had knowledge of 
EC Regulation No. 535/94 prior to conclusion of the EC Schedule, Brazil  submits that the Regulation 
was in the public domain as of 11 March 1994 and a ll EC negotiating partners had the possibility of 
consulting the European Communities' understanding/ definition of "salted meat" of heading 02.10 
prior to the conclusion of the EC Schedule.599  Similarly, Thailand  submits that, at the conclusion of 
the WTO Agreement, negotiators could be deemed to have had knowledge of legislation in the 
European Communities, such as EC Regulation No. 535/94, which was published and in force at the 
time of the conclusion of the treaty.600 
7.355  Regarding the relevance of EC Regulation No. 535/94 for the interpretation of the EC 
Schedule in this case , Brazil  and Thailand  submit that the definition of "salted" in EC Regulation 
No. 535/94 was necessary so as to distinguish the classification of, on the one hand, salted meat and edible meat offal falling within heading 02.10 from,  on the other hand, fresh, chilled or frozen meat 
falling within heading 02.07.
601  According to Thailand, EC Re gulation No. 535/94 acknowledges that 
products may possess characteristics associated with bot h headings 02.07 and 02.10.  In particular, a 
product could be both salted and fresh, salted and chilled, or salted and frozen.  According to 
Thailand, it was necessary to enact EC Regulation No . 535/94 in order to distinguish salted meat from 
meat in the other states and to properly classify such products.602  Brazil and Thailand note that the 
                                                      
593 Thailand's first written submission, paras. 33-35. 
594 Thailand's comments on the EC's reply to Panel question No. 113. 
595 Thailand's first written submission, para. 139. 
596 EC's first written submission, paras. 88-89. 
597 EC's first written submission, paras. 88-89. 
598 EC's first written submission, para. 206. 
599 Brazil's reply to Panel question No. 122. 
600 Thailand's comments on the EC's reply to Panel question No. 87. 
601 Thailand's first written submission, para.137;  Brazil's first written submission, para. 172. 
602 Thailand's first written submission, para.137. WT/DS269/R 
Page 114  
 
terms "preservation" and "long-term preservation" were  not included in the definition of "salted" for 
heading 02.10 contained in EC Regulation No. 535/94.
603  Further, Thailand refers to the minutes of a 
meeting of the EC Customs Code Committee dated 25 January 2002 to argue that the EC Commission 
expressly acknowledged that the principle of long-term preservation was excluded from the final definition of "salted" meat for the purposes of classification under heading 02.10 in EC Regulation 
No. 535/94 and, subsequently, in Additional Note 7, which was introduced into the CN through EC 
Regulation No. 535/94.
604  Thailand notes that, according to ECJ jurisprudence, an Additional Note 
constitutes an authentic interpretation of a heading in  the EC's CN as it becomes part of the heading to 
which it refers with binding effect .  Therefore, Thailand considers th at Additional Note 7 – introduced 
at the time of the conclusion of the WTO Agreemen t – constituted an authentic interpretation of the 
EC's concession under heading 02.10 as it became part of that heading with binding effect.605 
7.356  The European Communities  submits that EC Regulation No. 535/94 is part of a consistent 
pattern of treating preservation as the basic cr iterion for classification under heading 02.10.606  The 
European Communities submits that, throughout the Uruguay Round negotiations, the European 
Communities' Explanatory Notes to the CN contained a number of provisions emphasizing that 
"salting" must be for preservation, which was a reflection of the ordinary practice of EC customs 
authorities.607  Further, the European Communities argues that, in Gausepohl608, the ECJ interpreted 
heading 02.10 as requiring salting for preservation.  According to the European Communities, ECJ 
rulings are binding on the EC Commission and cons titute the authoritative interpretation of the CN.609  
The European Communities submits that the effect of EC Regulation No. 535/94 and the Gausepohl  
judgement when read in conjunction is that the figu re of a 1.2% salt content was conceived of as a 
minimum salt content above which it was possible th at a meat product could be preserved by salting 
alone.  The European Communities argues that, in other words, in order to be classified under 
heading 02.10, a product had to meet the criteria of EC Regulation No. 535/94 and be salted in order 
to ensure its preservation as required by heading 02.10 of the CN.610  The European Communities 
submits that the specific salt content that would make a product salted would depend on the nature of 
the meat in question, its preparati on, and other environmental factors.611 
7.357  In response, Brazil  submits that the 1.2% threshold in EC Regulation No. 535/94 was not a 
pragmatic minimum salt content rule below wh ich a product was not salted for preservation.  
According to Brazil, no WTO Member looking at EC Regulation No. 535/94 could presume that it established a minimum salt content below which it co uld not be considered that a product was salted 
for preservation.
612  Further, according to Brazil, the Europ ean Communities itself has indicated that it 
does not know of any type of meat deeply and homogeneously salted with  1.2% salt, which is 
preserved for many or several months.613 
7.358  The European Communities  submits that, while Additional Note 7 may have contained a 
condition, nevertheless, as a matter of logic, it could have stood alongside a requirement of long-term 
preservation given that it was not, by its terms, exclusive.614  Further, the European Communities 
rejects the argument that EC Regulation No. 535/ 94 excluded the principle of preservation because 
                                                      
603 Brazil's first written submission, para. 98; Brazil' s reply to Panel question No. 77; Thailand's first 
written submission, para.137. 
604 Thailand's oral statement at the first substantive meeting, para. 27. 
605 Thailand's second written submission, paras. 80-81. 
606 EC's first written submission, para. 201. 
607 EC's first written submission, para. 203. 
608 This case is dealt with in paragraph 7.372 et seq . 
609 EC's reply to Panel question No. 45. 
610 EC's first written submission, paras. 88-89; EC's reply to Panel question No. 93. 
611 EC's first written submission, paras. 88-89; EC's reply to Panel question No. 93. 
612 Brazil's comments on the EC's reply to Panel question No. 108. 
613 Brazil's comments on EC's reply to Panel question No. 93. 
614 EC's second written submission, paras. 85-86.  WT/DS269/R 
 Page 115 
 
 
the European Communities had made a policy decision to no longer interpret heading 02.10 in such a 
way.615  The European Communities submits that the minutes referred to by Thailand reflect 
preparatory discussions for EC Regulation No. 1871/ 2003, not for any of the measures at issue, nor 
for EC Regulation No. 535/94.  The European Commun ities adds that such minutes are not legislative 
acts of the European Communities, nor do they repr esent the reasons justifying legislative action by 
the European Communities, nor are they au thoritative interpretations of EC acts.616  The European 
Communities submits that, therefore, such docum ents provide no basis for interpreting EC law.617 
 Analysis by the Panel 
7.359  The first question for determination by th e Panel is whether EC Regulation No. 535/94 
qualifies as "circumstances of conclusion" of the EC  Schedule within the meaning of Article 32 of the 
Vienna Convention.  
7.360  The Panel recalls that, when discussing s upplementary means of interpretation under 
Article 32, the Appellate Body stated in EC – Computer Equipment  that "[i]f the classification 
practice of the importing Member at the time of the tariff negotiations is releva nt in interpreting tariff 
concessions in a Member's Schedule, surely that Memb er's legislation on customs classification at that 
time is also relevant."618  Accordingly, the mere fact that an act, such as EC Regulation No. 535/94, is 
unilateral, does not mean that that act is au tomatically disqualified from consideration under 
Article 32 of the Vienna Convention . 
7.361  The Panel notes that EC Regulation No. 535/94  was adopted on 9 March 1994, was published 
on 11 March 1994 and came into force on 1 April 1994.619  In other words, EC Regulation No. 535/94 
was introduced, adopted and published during th e verification period of the Uruguay Round 
negotiations and came into force just prior to th e conclusion of the EC Schedule on 15 April 1994.  In 
our view, since EC Regulation No. 535/94 was publishe d prior to the conclusion of the EC Schedule, 
the WTO Membership may be considered to have had constructive knowledge of that Regulation at 
the time the EC Schedule was concluded for the purposes of Article 32 of the Vienna Convention .  In 
this regard, we disagree with the European Co mmunities that Members should have specifically 
raised EC Regulation No. 535/94 during the verifica tion period in order for it to form part of the 
"circumstances of conclusion".620 
7.362  Further, it appears to us that EC Regulation No. 535/94 was enacted in the context of the 
conclusion of the Uruguay Round negotiations.  This is apparent from the preamble to EC Regulation 
No. 3115/94,621 which constituted the 1994 a nnual revision to the CN and incorporated into the CN, 
inter alia , the amendments proposed by EC Regulation No. 535/94.  In particular, the preamble 
provides that: 
"Whereas it is necessary to amend the comb ined nomenclature to take account of: 
– changes in requirements relating to statistics or commercial policy, in 
particular by virtue of Council Decisi on bringing into force simultaneously 
the acts implementing the results of the Uruguay Round of multilateral trade 
                                                      
615 EC's reply to Panel question No. 45. 
616 EC's reply to Panel question No. 45. 
617 EC's second written submission, para. 87. 
618 Appellate Body Report, EC – Computer Equipment , para. 94. 
619 Article 2 of EC Regulation No. 535/94 provides that: "This Regulation shall come into force on the 
twenty-first day following its publication in the Offici al Journal of the European Communities.", i.e. on 
1 April 1994. 
620 EC's second written submission, paras. 96 and 112. 
621 EC Regulation No. 3115/94 was adopted on 20  December 1994 and was published on 31 December 
1994. WT/DS269/R 
Page 116  
 
negotiations  and Council Regulation concerning certain measures resulting 
from the conclusion of negotiations  under Article XXIV:6 and other 
measures necessary for simplification purposes;  
– the need to align or clarify texts; Whereas Article 12 of Regulation (EEC) No. 2658/87 provides for the Commission to 
adopt each year by means of a regulation, to apply from 1 January of the following 
year, a complete version of the combined nomenclature together with the corresponding autonomous and conventional rates of duty of the Common Customs Tariff, as it results from measures adopted by the Council or by the Commission; 
..." (emphasis added) 
7.363  In addition, Article 3 of EC Re gulation No. 3115/94 states that: 
"Incorporated in Annex I to this Regulation are amendments resulting from the 
adoption of the following measures: 
... – Commission Regulation (EC) No 535/94 of 9 March  
..." (emphasis added) 
7.364  In light of the foregoing, we consider that EC Regulation No. 535/94 is relevant to the 
conclusion of the EC Schedule and, therefore, qua lifies as "circumstances of conclusion" of the EC 
Schedule within the meaning of Article 32 of the Vienna Convention . 
7.365  The second question for determination by the Panel is the impact of the definition of "salted" 
in EC Regulation No. 535/94 on the interpretation of  the concession contained in  heading 02.10 of the 
EC Schedule. 
7.366  We note that Article 1 of EC Regulation No. 535/94 provides that: 
"The following additional note shall be inserted in Chapter 2 of the Combined 
Nomenclature annexed to Re gulation (EEC) No 2658/87: 
For the purposes of heading No 0210, the term 'salted' means meat or 
edible meat offal which has been deeply and homogenously 
impregnated with salt in all parts, having a total salt content no less 
than 1.2% by weight." 
Article 1 makes it clear that an effect of EC Re gulation No. 535/94 was to insert an Additional Note 
into the CN.  As is evident from Article 1, the Add itional Note in question related to the definition of 
"salted" in heading 02.10 of the CN. 
7.367  The preamble to EC Regulation No. 535/94 states that: 
"Whereas, to ensure uniform application of the Combined Nomenclature, provisions 
should be laid down for the classification of  salted meat and edible meat offal falling 
within CN code heading 0210, in order to  distinguish them from fresh, chilled or 
frozen meat and edible meat offal; whereas  a total salt content of 1,2% or more by  WT/DS269/R 
 Page 117 
 
 
weight appears an appropriate criterion fo r distinguishing between these two types of 
products; 
..." 
This excerpt of the preamble to EC Regulation No. 535/94 suggests to us that, if the criteria contained 
in the definition of "salted" in EC Regulation No . 535/94 had been met, the meat product in question 
would be "distinguished" from "fresh, chilled or frozen meat and edible meat offal".  In other words, 
that product would be classified under heading 02.10 rather than under other headings concerning 
"fresh, chilled or frozen meat and edible meat offal". 
7.368  The criteria for qualification as "salted" unde r EC Regulation No. 535/94 and, therefore, 
under the Additional Note which it introduced into  the CN, are referred to in Article 1 of 
EC Regulation No. 535/94 set out above in paragra ph 7.366.  We understand that the reference to 
"deep and homogenous impregnation with salt" in that  Article would exclude, for example, meat that 
has been lightly packed with sa lt.  In this regard, we note that the European Communities has 
submitted that the term "impregnated with salt" serves, inter alia , to distinguish products that have 
been simply sprinkled with salt.622  Further, Article 1 indicates that meat must have a salt content of 
"not less than 1.2% by weight" in order to qualify as "salted" under heading 02.10 of the CN.  In other 
words, EC Regulation No. 535/94 indicates that meat would be "salted" for the purposes of heading 02.10 if it contained at least 1.2% salt.  In our view, the Regulation does not by its terms indicate that 
the reference to the 1.2% salt content is a minimum salt content above which it would be possible  that 
a meat product could be considered "salted".  No r does the Regulation indicate that the minimum salt 
content would vary from meat to meat.  Finally, th e Regulation does not state that, for the purposes of 
heading 02.10, salting must be for long-term preservation. 
7.369  In summary, we understand that EC Regulati on No. 535/94 introduced an Additional Note 
into the CN.  The effect of that Regulation, throug h the Additional Note that it introduced, was that if 
meat had been deeply and homoge neously impregnated with salt, with a minimum salt content of 
1.2% by weight, it would meet the requirements of that Regulation and would qualify as "salted" meat 
under heading 02.10 of the CN. 
7.370  The Panel considers that its interpretation of EC Regulation No. 535/94 is consistent with 
other evidence available to us.  In particular, we have evidence to indicate that, during the period of 
1996 - 2002, EC customs authorities considered that  the products at issue – frozen boneless chicken 
cuts deeply and homogeneously impreg nated with salt, with a salt cont ent of 1.2% – 3% – qualified as 
"salted" products for the purposes of the concessi on contained in heading 02.10 of the EC Schedule.
623  
Further, we note that the minutes of the mee ting of the EC Customs Code Committee dated 
25 January 2002, state in relation to Additional Note 7 as it existed following enactment of EC 
Regulation No. 535/94 that: 
"[I]n addition the criterion of salting for the purpose of long-term preservation has not 
been introduced into [Additional Note 7 to Chapter 2]."624 
While non-binding in nature, we consider that the above-mentioned minutes provide compelling 
evidence that the principle of long-term preservation w as not included in the definition of "salted" in 
EC Regulation No. 535/94. 
                                                      
622 EC's reply to Panel question No. 32.  The Panel also notes that the European Communities has 
stated that it does not contest the fact  that the products at issue are deeply and homogeneously impregnated with 
salt in all parts: Footnote 8, EC's oral statement at the second substantive meeting; EC's reply to Panel question 
No. 93. 
623 We refer to our conclusions regarding EC classi fication practice for the products at issue during 
1996-2002 in paragraph 7.303. 
624 Exhibit THA-22. WT/DS269/R 
Page 118  
 
7.371  We turn now to the question of whether or not  the effect of EC Regulation No. 535/94 should 
be considered in the context of other EC acts and instruments. 
Dinter  and Gausepohl  judgements 
 Arguments of the parties 
7.372  With respect to the question of whether or not the ECJ Dinter and Gausepohl judgements 
qualify as "circumstances of conclusion" under Article 32 of the Vienna Convention, Brazil  and 
Thailand  submit that they do not so qualify.
625  Brazil submits that the EC Schedule is not about the 
European Communities' historical treatment of a certain product.  Rather, it is about what was 
negotiated among Members during the Uruguay Round.   Brazil further submits that, while the 
Appellate Body established that the importing Memb er's legislation on customs classification is 
relevant in interpreting tariff concessions in a Memb er's schedule, it did not establish that past ECJ 
cases are relevant for this purpose.626 
7.373  In response, the European Communities  submits that the Dinter  and Gausepohl  judgements 
form part of the European Communities' practic e, to be considered under Article 32 of the Vienna 
Convention as "circumstances of conclusion" of its Schedule.627  According to the European 
Communities, the Appellate Body's comments in EC – Computer Equipment  to which Brazil refers, 
were made in the context of a particular set of circumstances and were not phrased in the form of an 
exclusive list.628  The European Communities argues that  the Appellate Body's reference to 
"legislation" as constituting the "circumstances of c onclusion" must surely mean legislation as it is 
interpreted in the Member in question.629 
7.374  With respect to the Dinter  judgement, Brazil  and Thailand  argue that it existed prior to the 
launch of the Uruguay Round and, therefore, should be disqualified from cons ideration under Article 
32 of the Vienna Convention .630 
7.375  In response, the European Communities  submits that, in EC – Computer Equipment , the 
Appellate Body criticised the panel for not having c onsidered legislation that had been enacted in 
1987 and which was applicable  during the Uruguay Round.  The European Communities submits that 
the Dinter  judgement was applicable throughout the Uruguay Round.631 
7.376  In relation to whether or not WTO Members can be taken to have  had knowledge of the 
Dinter  and Gausepohl  judgements prior to conclusion of th e EC Schedule, the European Communities 
notes that ECJ judgements are publicly accessible on th e day of delivery.  The European Communities 
also notes that ECJ judgements are published in the European Communities' Official Journal.632  The 
European Communities submits that, if parties ha d knowledge of EC Regulation No. 535/94 during 
the Uruguay Round negotiations, they must also have  had knowledge of the preservation criterion at 
the heart of EC law.633 
7.377  In response, Brazil  submits that a Member is not required to know another Member's entire 
case law at the time of tariff negotiations.634  Thailand  explains that negotiato rs could not have been 
                                                      
625 Brazil's reply to Panel question No. 75; Thailand's reply to Panel question No. 75. 
626 Brazil's oral statement at the fi rst substantive meeting, para. 57. 
627 EC's reply to Panel question No. 75. 
628 EC's second written submission, para. 68. 
629 EC's second written submission, para. 73. 
630 Brazil's second written submission, para. 84; Thailand's reply to Panel question No. 75. 
631 EC's second written submission, para. 76. 
632 EC's reply to Panel question No. 110. 
633 EC's reply to Panel question No. 122. 
634 Brazil's reply to Panel question No. 75.  WT/DS269/R 
 Page 119 
 
 
expected to be aware of every ECJ judgement b ecause each ECJ judgement is related to a specific 
factual situation.  Thailand submits that, in c ontrast, amendments made by legislation are more 
generally applicable in a variety of situations, su ch as EC Regulation No. 535/94, which applies to all 
types of meat falling under heading 02.10.635 
7.378  Regarding the relevance of the ECJ Dinter and Gausepohl judgements for the interpretation 
of the EC Schedule in this case , in relation specifically to the Dinter  judgement, Brazil  submits that it 
does not relate to heading 02.10, nor to subheading 0210.90.20636, nor to the products at issue.637  
Further, Thailand  submits that the remark made by the ECJ in that case that Chapter 2 "comprises 
poultry meat which has undergone a preserving process" was obiter  to its final decision and, 
moreover, was reversed in the same year by Addi tional Note 6(a) to the European Communities' 
CN.638  Brazil also refers to the comments made by the Advocate-General in that case during his 
analysis of the structure of Chapter 2.  Accordi ng to Brazil, the Advocate-General did not consider 
that all processes listed in heading 02.10 served a long-term preservation purpose.  Rather, he considered smoking to be a preparation process.  Brazil submits that this undermines the European 
Communities' contention that Chapter 2 has consis tently been understood as applying to products, 
which, if not fresh or chilled, have been preserved.
639 
7.379  In response, the European Communities  submits that the Advocate-General's opinion 
confirms the European Communities' position.  The European Communities notes that the Advocate-
General distinguishes between the addition of salt under Chapter 2 as "the better to preserve the 
product" as opposed to adding of salt by way of seas oning.  According to the European Communities, 
the Advocate-General expressly stated that "salting"  for the purposes of heading 02.10 clearly requires 
salting for preservation.  The European Communiti es adds that, in any event, the case concerned 
seasoning with salt and pepper and not smoking.  Mo reover, the European Communities submits that, 
in its judgement, the ECJ confirmed that Chapte r 2 "comprises poultry meat which has undergone a 
preserving process".640 
7.380  With respect to the Gausepohl  judgement, Brazil  and Thailand  submit that, in that case, the 
ECJ only provided its interpretation of heading 02.10 w ith respect to bovine meat.  Therefore, in their 
view, that case cannot be viewed as the ECJ's in terpretation for all meat falling under heading 
02.10.641  Thailand further submits that the findings on  the importance of preservation were based on 
the specific wording of the Explanatory Notes in  the European Communities' CN for swine meat.642 
7.381  Brazil and Thailand also submit that the issue discussed in the Gausepohl  case was 
subsequently addressed in EC Regulation No. 535/94  and, consequently, the reigning definition of 
"salted meat" of heading 02.10 when the EC Sche dule was concluded was that contained in that 
Regulation.643  Brazil and Thailand submit that, when it enacted EC Regulation No. 535/94, the 
European Commission chose not to apply the same standard referred to by the ECJ in Gausepohl .  In 
particular, by means of EC Regulation No. 535/ 94, the EC Commission fixed a minimum 1.2% salt 
content required to classify meat as "salted" under h eading 02.10, fully conscious  that this percentage 
                                                      
635 Thailand's comments on the EC's reply to Panel question No. 87. 
636 We note that, due to changes in numbering in the HS, what was formerly subheading 0210.90.20 in 
the CN, is now subheading 0210.99.39. 
637 Brazil's oral statement at the fi rst substantive meeting, para. 66. 
638 Thailand's oral statement at the se cond substantive meeting. para. 3. 
639 Brazil's second written submission, para. 90. 
640 EC's reply to Panel question No. 111. 
641 Brazil's oral statement at the first substantive meet ing, paras, 78 and 80; Thailand's comments on the 
EC's reply to Panel question No. 113. 
642 Thailand's second written submission, para. 93. 
643 Brazil's second written submission, para. 91; Thailand's reply to Panel question No. 75. WT/DS269/R 
Page 120  
 
was not sufficient to ensure "long-term preservation".
644  According to Brazil and Thailand, the EC 
Commission chose to apply the minimum salt content to all salted meat of heading 02.10 even though 
it itself had warned the ECJ about the different salt contents required to preserve different types and 
cuts of meat in the Gausepohl  case.645  In Brazil's and Thailand's view, the EC Commission purposely 
left out the "long-term preservation" criterion fro m EC Regulation No. 535/ 94 because, as advanced 
by the Advocate-General in Gausepohl , that is not a criterion that can be objectively assessed at the 
time of importation and may lead to discrimination am ong imports of the same type of meat, with the 
same salt content, but coming from different places.646  Thailand submits that, therefore, as at the time 
of the conclusion  of the EC Schedule, the European Comm unities itself recognized that the "purpose 
of long-term preservation" was not a relevant f actor for determining whether a product should be 
considered as salted, and therefore, classified, under heading 02.10.647  Brazil accepts that all parties 
in the Gausepohl  case assumed that salting constitutes a meat preserving process.648 
7.382  In response, the European Communities  submits that, in the Gausepohl  case, while there 
were significant doubts among the participants in th e proceedings as to the possibility of fixing a salt 
content for which all meat could be considered preser ved, none of the participants had any doubt that 
the process of salting mentioned under heading 02. 10 must lead to preservation.  The European 
Communities submits that the ECJ considered that , in all cases, it could be excluded that salting 
below 1.2% could lead to long-term preservation.649  In other words, it considered that 1.2% salt 
content would be an appropriate minimum below wh ich it would not be necessary to enquire whether 
the meat in question had been salted for preservation.650  According to the European Communities, it 
is implicit in such a principle that the amount of  salt required for such preservation would vary from 
meat to meat.  If there were no such variation, th en the necessary percentage could be calculated and 
published.651  Further, noting that the ECJ found support for its interpretation of heading 02.10 to 
require salting for long-term preservation in an Explan atory Note relating to swine meat, the European 
Communities submits that that Explanatory Note stat es that the salt content "may vary considerably 
between different types and cuts of meat".652  Finally, the European Communities submits that the 
Gausepohl  judgement is relevant to the "classification practice" of not merely salted beef, but all 
salted meat, including chicken.653 
7.383  Brazil  and Thailand  submit that Explanatory Notes, which are non-binding instruments, of a 
specific subheading cannot be applied mutatis mutandis  to another subheading without an explicit 
provision indicating so.654  Thailand submits that, as there is no such provision in the Explanatory 
Note relied upon by the ECJ in Gausepohl , the European Communities cannot assert that the concept 
of preservation is applicable to  poultry falling under heading 02.10.655  Brazil and Thailand submit 
that, in any event, the relevant Explanatory Note upon which the Gausepohl  judgement was based 
provides that "the period of such preservation mu st considerably exceed the time required for 
                                                      
644 Brazil's oral statement at the first substantive mee ting, paras. 79-82; Thailand's oral statement at the 
first substantive meeting, paras. 24-27 referring to Exhibit THA-22. 
645 Brazil's oral statement at the first substantive meeting, paras. 79-82; Thailand's second written 
submission, para. 93. 
646 Brazil's oral statement at the first substantive mee ting, paras. 79-82; Thailand's oral statement at the 
first substantive meeting, paras.24-26. 
647 Thailand's oral statement at the fi rst substantive meeting, paras.24-26. 
648 Brazil's oral statement at the fi rst substantive meeting, para. 70. 
649 EC's reply to Panel question No. 40. 
650 EC's reply to Brazil question No. 11. 
651 EC's reply to Panel question No. 47. 
652 EC's reply to Panel question No. 112. 
653 EC's second written submission, para. 74. 
654 Brazil's comments on the EC's reply to Pane l question No. 112; Thailand's second written 
submission, para. 92. 
655 Thailand second written submission, para. 92.   WT/DS269/R 
 Page 121 
 
 
transportation."656  According to Brazil, nowhere is it stated  that the period exceeding transportation is 
equal to "many" or "several" months, being th e period of time the European Communities has 
apparently equated with long-term preservation.  Brazil notes that, in Gausepohl , the "period 
considerably exceeding the time required for trans portation" was only two days.  Brazil submits that 
the European Communities' expert has attested that  the products at issue can be preserved for that 
period and, therefore, may be considered as pr eserved for the long-term when transported from 
Switzerland to Germany, for example.657  Since the European Comm unities has submitted that a 
salted/dried/smoked product can be further preser ved by chilling/freezing and still fall under heading 
02.10, and given that a product may be considered preserved for the long term when transported from 
Switzerland to Germany, Brazil submits that it is only fair that the same products would also be 
considered preserved for the long term when trans ported from Brazil to Germany, even if further 
preserved by chilling or freezing.658 
7.384  The European Communities  submits that, within the European Communities, the 
authoritative source of interpretation of the HS is the ECJ.659  The European Communities submits 
that, should any conflict occur between EC legal in struments and ECJ judgements interpreting the HS, 
ECJ judgements would prevail.660  The European Communities submit s that, therefore, EC Regulation 
No. 535/94 cannot be viewed in isolation from th e European Communities' institutional framework 
and, in particular from the Dinter  and Gausepohl  judgements in which the ECJ confirmed the 
consistent view in the European Communities that, in order to qualify as "salted" meat under heading 
02.10, salting must be sufficient to ensure preservation.661 
7.385  In response, Thailand  submits that the ECJ itself has stat ed that an Additional Note "becomes 
part of the heading to which it refers and has the same binding effect, whether it constitutes an 
authentic interpretation of the [rel evant] heading or supplements it."662  Further, Thailand refers to the 
ECJ judgement in Gijs van de Kolk-Douane Expéditeur BV , to submit that, in a situation of "conflict" 
between an ECJ judgement and a subsequent EC Commission Regulation, the ECJ has made it clear 
that the subsequent Regulation will prevail.663  Thailand submits that, in that case, when the ECJ was 
questioned as to whether its judgement in Dinter  or the provisions of an Additional Note should 
prevail (in particular, Additional Note 6(a) of the CN), the ECJ stated that the Additional Note should 
prevail.664  Thailand submits that, by analogy, the judgement in the Gausepohl  case was modified by 
the provisions of Additional Note 7, which was in troduced into the CN through the enactment of 
EC Regulation No. 535/94.665 
7.386  The European Communities  acknowledges that Additional Note 6(a) applies rather than the 
Dinter  judgement regarding the appropriate criterion to  be used to identify whether or not meat is 
"seasoned" for the purposes of Chapter 16 of the CN.666  However, the European Communities 
submits that, there is nothing to suggest that Add itional Note 6(a) reversed the ECJ's judgement in 
Dinter .667  According to the European Communities, in Gijs van de Kolk-D ouane Expéditeur BV , the 
                                                      
656 Brazil's comments on the EC's reply to Panel question No. 112 referring to Exhibit EC-32; 
Thailand's second written submission, para. 93. 
657 Brazil's comments on the EC's reply to Panel question No. 112 referring to Exhibit EC-32. 
658 Brazil's comments on the EC's reply to Panel question No. 112. 
659 EC's reply to Panel question No. 41. 
660 EC's reply to Panel question No. 113; EC's reply to Thailand question No. 1. 
661 EC's oral statement at the first substantive meeting, paras. 34-38. 
662 Thailand's oral statement at the second substantive meeting, para. 7 referring to Exhibit THA-31; 
Thailand's second written submission, para. 80. 
663 Thailand's oral statement at the se cond substantive meeting, para. 8. 
664 Thailand's oral statement at the second substantive meeting, para. 7; Thailand's second written 
submission, paras. 87-89. 
665 Thailand's oral statement at the se cond substantive meeting, para. 10. 
666 EC's reply to Panel question No. 115. 
667 EC's oral statement at the second substantive meeting, para. 69. WT/DS269/R 
Page 122  
 
ECJ considered that the Dinter  judgement had been delivered in different circumstances to those 
facing the ECJ when Gijs van de Kolk-D ouane Expéditeur BV  was decided.  In particular, an ISO 
standard had been issued, which confirmed the obj ectivity of sensory testing, thereby rendering the 
ECJ's criticism of such a method of testing in Dinter moot.  The European Communities further 
submits that the ECJ only upheld Additional Note 6( a) because it merely concerned the technical 
means for an objective assessment of the characteristics of a product, but did not alter the scope of the 
headings concerned.  The European Communities argu es that, in contrast, the insertion of a criterion 
that all meat products with a salt content exceed ing 1.2% can be considered as "salted" under 
heading 02.10 even if such salting does not ensure preservation would significan tly alter the scope of 
heading 02.10 as consistently interpreted by the ECJ in Dinter and Gausepohl .
668 
7.387  In response, Brazil  submits that the Gausepohl  judgement was also delivered in different 
circumstances.  In particular, at the time the ECJ decided the Gausepohl  case, Additional Note 7 to 
Chapter 2 of the CN, defining "salted meat" of heading 02.10, did not exist.  Once that note was inserted in the CN, a "different circumstance" wa s created that would, for example, affect any 
judgement subsequent to Gausepohl  regarding "salted meat" of heading 02.10.
669  Thailand  submits 
that the legal effects of the ECJ's judgment in Gausepohl  were modified by the provisions of 
Additional Note 7, which specified the criteria to  be taken into account for the classification of 
products under heading 02.10.670  Thailand further submits that EC Regulation No. 535/94 does not 
change the scope of the chapters, sections and h eadings of the HS nor the EC's CN nor the EC 
Schedule.  According to Thailand, that Regulation merely specifies the objective criteria to be taken 
into account for classifying goods under heading 02.10.671  Thailand further submits that EC 
Regulation No. 535/94 has been enacted many times as an EC Council Regulation through the annual 
issuance of the EC's CN.672 
7.388  The European Communities  submits that the relationship between judgements such as 
Gausepohl , which interprets the CN, and a later EC Commission Regulation inserting an Additional 
Note, is an issue of "hierarchy of norms" as opposed to a question of hierarchy between ECJ 
judgements and EC Commission Regulations.673  The European Communities explains that the 
wording and structure of heading 02.10 compels a requirement of preservation as confirmed by the ECJ in Gausepohl .  The European Communities submits that, in Gausepohl , the ECJ confirmed the 
scope of heading 02.10 in the CN (i.e. a C ouncil Regulation).  According to the European 
Communities, the later addition by the EC Commiss ion of Additional Note 7 through EC Regulation 
No. 535/94 is a legal act which is inferior to th e CN.  The European Communities submits that the 
EC Commission is not entitled to modify, through an EC Commission Regulation, the content or the 
scope of a tariff heading laid down in the CN (i .e. a Council Regulation implementing the HS).  
Therefore, any EC Commission act must necessarily be  read together at all times with the superior 
norm (i.e. the CN) and its interpretation by the ECJ.   According to the European Communities, to the 
extent there was a conflict between the EC Commission act and the CN, the scope of heading 02.10 in 
the CN as interpreted by the ECJ would prevail.
674  In addition, the European Communities submits 
that EC Regulation No. 535/94 could not undo the ECJ's finding in the Gausepohl  case because the 
HS is an international conve ntion binding on the European Communities and precludes the 
                                                      
668 EC's reply to Panel question No. 114. 
669 Brazil's comments on the EC's reply to Panel question No. 115. 
670 Thailand's reply to Panel question No. 114. 
671 Thailand's comments on the EC's reply to Panel question No. 114. 
672 Thailand's comments on the EC's reply to Panel question No. 113. 
673 EC's reply to Panel question No. 113. 
674 EC's reply to Panel question No. 113; EC's reply to Panel question No. 114.  WT/DS269/R 
 Page 123 
 
 
EC Commission from altering the subject-matter of th e tariff headings which have been defined on 
the basis of the HS.675 
7.389  In response, Brazil  submits that the European Communitie s' argument that Additional Note 7 
to Chapter 2, inserted in the CN by means of EC Regulation No. 535/94 could not alter heading 02.10 
as it is found in the HS and, therefore, must be read in the context of the long-term preservation 
structure of Chapter 2 of the HS is misleading.  In particular, Brazil submits that the argument 
assumes that long-term preservation is what defin es the structure of Chapter 2 and the processes of 
heading 02.10 of the HS, a view that Brazil does not subscribe to.676  Brazil submits that, in 
Gausepohl , the ECJ was requested to construe EEC Regulation No. 2658/87 establishing the 
European Communities' CN pursuant to Article 177 of the EEC Treaty.677  Brazil submits that, 
according to EEC Regulation No. 2658/87, the EC Commission can adopt a Regulation that inserts an 
Additional Note in a Chapter of the CN, such as EC Regulation No. 535/94.678  According to Brazil, 
when the ECJ in Gausepohl  was asked to construe the CN, "long- term preservation" was neither part 
of the CN nor the HS.679  Brazil submits that, therefore, the ECJ in the Gausepohl  case did not 
confirm the scope of heading 02.10 in the CN sin ce confirmation implies validation of something that 
already existed.  Brazil submits that EC Regulati on No. 535/94 is in perfect harmony with what is 
provided under heading 02.10 of the CN.  Brazil furt her submits that, while the ECJ has the authority 
to interpret an act of the EC Council, such as th e CN, it does not have the authority to interpret the 
HS.680 
 Analysis by the Panel 
7.390  The first question for determination by th e Panel is whether the ECJ judgements, Dinter  and 
Gausepohl , qualify as "circumstances of conclusion" of  the EC Schedule within the meaning of 
Article 32 of the Vienna Convention.   The Panel considers that there are two elements associated with 
this question as it relates to the Dinter  and Gausepohl  judgements.  The first is whether, as a 
theoretical matter, court judgements can be consid ered under Article 32.  The second is whether the 
timing of issuance of the ECJ judgements at issue, and more particularly the Dinter  judgement, 
necessarily disqualifies it from c onsideration under Article 32. 
7.391  Regarding the question of whether or not court judgements can be considered as 
"circumstances of conclusion" under Article 32 of the Vienna Convention , the Panel recalls that, in 
EC – Computer Equipment , the Appellate Body explicitly st ated that the importing Member's 
classification practice during the Uruguay Round and that  Member's "legislation" that was applicable 
at that time should have been taken into consider ation under Article 32.  As has been noted by the 
parties in this case, the issue arises as to whether th e Appellate Body's list is exhaustive or, rather, is 
merely linked to the particular facts of that case, implying that other unlisted items may also qualify.  
The Appellate Body's report tends to indicate that the latter interpretation is the valid one – that is, the 
Appellate Body was merely making a pronouncement on the basis of the facts that were available to it 
in that case rather than seeking to provide an exhaustive list of items qualifying as "circumstances of 
conclusion" in all cases.  This would suggest that a valid distinction cannot be drawn between, on the 
one hand, EC legislation and, on the other hand, ECJ judgements for the purposes of Article 32 of the 
                                                      
675 EC's oral statement at the first substantive meeting, paras. 34-38; EC's reply to Panel question 
No. 41. 
676 Brazil's oral statement at the s econd substantive meeting. para. 57; Brazil's comments on the EC's 
reply to Panel question No. 93. 
677 Exhibit BRA-23, Article 1.1 of Regulation No. 2658/87. 
678 Exhibit BRA-6. 
679 Brazil's comments on the EC's reply to Panel question No. 113. 
680 Brazil's comments on the EC's reply to Panel question No. 113. WT/DS269/R 
Page 124  
 
Vienna Convention .
681  Accordingly, the Panel considers that court judgements, such as the Dinter  and 
Gausepohl  judgements, may be considered under Article 32 of the Vienna Convention . 
7.392  With respect to the timing of the ECJ judgements, we recall that Brazil and Thailand have 
submitted that the Dinter  judgement should not be considered by the Panel under Article 32 of the 
Vienna Convention  because it was issued in 1983, prior to the launch of the Uruguay Round.682  We 
recall our conclusion in paragraph 7. 344 above that, in theory, there is no temporal limitation on what 
may qualify as "circumstances of conclusion" under Article 32 and that "relevance" is the more 
appropriate criterion for determining such qualification.  We also stated in that paragraph that there 
may be some correlation between the timing of an even t, act or other instrument and its relevance to 
the treaty in question and that the fact that Article 32 of the Vienna Convention  refers to 
"circumstances of conclusion " indicates that the event, act or other instrument in question must be 
temporally proximate to the conclusion of a treaty  in order for it to be taken into account for the 
interpretation of that treaty under Article 32. 
7.393  Contrary to what has been argued by Brazil and Thailand, it is our view that the fact that the 
Dinter  judgement was issued in 1983 does not, in itself, suggest that it is temporally too remote from 
the conclusion of the EC Schedule to have influenced  (or, at least, had the possibility of influencing) 
the conclusion of the heading at issue in this dispute.  We say this in light of the fact that, as far as we 
are aware, except for the aspects that were d ealt with in Additional Note 6(a) to the CN683, the Dinter  
judgement remained applicable during the Uruguay Round negotiations.  Nevertheless, we note that, 
in the Dinter  judgement, the ECJ was called upon to examine the scope of heading 16.02 of the CN, 
dealing with seasoned meat.  In the process of such  an examination, the ECJ made general comments 
regarding Chapter 2 of the CN insofar as it relates to poultry.  We do not consider that these general 
comments on their own render the Dinter  judgement "relevant" to the specific aspects of the ultimate 
treaty text in issue, that is, the concession contai ned in heading 02.10 of the EC Schedule.  For these 
reasons, the Panel will not consider the Dinter  judgement, including the Advocate-General's opinion 
in that case, in our interpretation of the concessi on contained in heading 02. 10 of the EC Schedule 
pursuant to Article 32 of the Vienna Convention . 
7.394  As for the Gausepohl  judgement, unlike the Dinter  judgement, it did concern the 
interpretation of heading 02.10 of the CN, corres ponding to the specific heading at issue in this 
dispute.  Therefore, we consider it "relevant" to th e specific aspects of the ultimate treaty text in issue 
in this case, namely the concession contained in head ing 02.10 of the EC Schedule.  Further, on the 
basis of information provided to us by the Europ ean Communities in this dispute, we note that the 
judgement was publicly available upon issuance, that is in May, 1993.684  Accordingly, in our view, 
the WTO Membership may be considered to have had constructive knowledge of that judgement at 
the time the EC Schedule was concluded on 15 Ap ril 1994.  Therefore, we conclude that the 
Gausepohl  judgement qualifies as "circumstances of conclu sion" within the meaning of Article 32 of 
the Vienna Convention . 
7.395  The second question for determination by the Panel is the impact of the Gausepohl  judgement 
on the interpretation of the concession contained in h eading 02.10 of the EC Schedule.  We refer to 
the key elements of the judgement immediately below. 
                                                      
681 This conclusion would seem to be particularly valid in relation to the present case where the ECJ 
judgements in question interpret EC legislation.  In our view, it would be an odd situation if such legislation 
could be considered under Article 32 of the Vienna Convention  but not court judgements, which interpret that 
legislation. 
682 Brazil's second written submission, para. 84; Thailand's reply to Panel question No. 75. 
683 We deal with Additional Note 6(a) to the CN in more detail below in paragraph 7.403 but note here 
that this Note was introduced into the CN through the enactment of Commission Regulation (EEC) No. 3678/83 
of 23 December 1983, which is contained in Exhibit THA-34. 
684 See Exhibit EC-35.  WT/DS269/R 
 Page 125 
 
 
7.396  We note that the summary of the ECJ's judgement in the Gausepohl  case states that: 
"Heading 0210 of [the Combined Nomenclatu re]... must be interpreted as meaning 
that meat of bovine animals may be classified under that heading as salted meat only if it has been deeply and evenly impregnate d with salt in all its parts for the purposes 
of long-term preservation so that it has a minimum total salt-content of 1.2% by 
weight."
685 
7.397  Referring to headings 02.01, 02.02 and 02.10, the ECJ stated that it was clear from the 
scheme of Chapter 2 that, "for tariff classification pur poses, the meat covered by it is either fresh or 
chilled meat of bovine animals or meat that has undergone one of the various processes required for 
long-term preservation".686  The ECJ stated that it follows that  "meat of bovine animals to which a 
quantity of salt has been added merely for the purpo se of transportation cannot be regarded as salted 
for the purposes of heading 0210".687  The ECJ relied upon an Explanatory Note to tariff subheadings 
0210.11.11 and 0210.11.19 for confirmation of that view.  The ECJ acknowledged that the Explanatory Note was not legally bi nding and related to swine meat but stated that, nevertheless, it 
provided a useful indication as to the minimum objec tive criteria required for meat of bovine animals 
to be classified as "salted".
688  Regarding the salt content that is to be regarded as a minimum 
percentage for meat to be classified under heading 02 .10, the ECJ stated that "[t]he documents before 
the Court show that various different figures have  been adopted by the authorities of the Member 
States.  They do however suggest that the mini mum total salt content required for the long-term 
preservation of meat may be set at 1.2% by weight."689 
7.398  The Panel notes that the ECJ's judgement in Gausepohl  clearly recognizes the principle of 
long-term preservation with respect to heading 02.10 of the CN.  However, we consider that there are 
certain ambiguities concerning the meaning and effect of the Gausepohl  judgement that are important 
for the purposes of the present case.  First, it is uncle ar to the Panel whether the key findings made by 
the ECJ set out above in paragraph 7.396, which refer explicitly to bovi ne meat, are applicable only to 
bovine meat or, rather, apply more broadly to meat  in general, including poultry.  Secondly, it is 
unclear to the Panel whether the 1.2% salt conten t referred to by the ECJ in its judgement is a 
minimum salt content below which meat can be as sumed not to be salted for the purposes of heading 
02.10 or, rather, is a minimum salt content above  which meat will be salted for the purposes of 
heading 02.10.  Thirdly, it is unclear from the judgement whether the 1.2% minimum salt content 
referred to in that judgement is a "lowest common denominator" minimum that applies to all meats or, 
rather, only applies to bovine meat.  Finally, while th e ECJ states in its judgement that salting must be 
used "as a method of preserving meat of bovine animals for a longer period [than for the purpose of 
transportation]", indicating that the period of long- term preservation must exceed the period required 
to transport the product in question, the ECJ does not  provide any additional gui dance in this regard. 
7.399  In summary, we understand the ECJ's judgement in the Gausepohl  case to mean that bovine 
meat that has been deeply and homogeneously impr egnated with salt and has a minimum salt content 
of 1.2% by weight will be covered by heading 02 .10 of the EC Schedule.  Even if the judgement 
could be construed as applying mo re broadly to poultry, we have  not been persuaded that the 
judgement indicates that the minimum salt content of 1. 2% varies from meat to meat nor that the 1.2% 
                                                      
685 Exhibit EC-14: Gausepohl-Fleisch GmbH v Oberfinanzdirektion Hamburg , ECR [1993], p. I -3047 
and p. I -3066, para. 16. 
686 Exhibit EC-14: Gausepohl-Fleisch GmbH v Oberfinanzdirektion Hamburg , ECR [1993], p. I -3066, 
para. 10. 
687 Exhibit EC-14: Gausepohl-Fleisch GmbH v Oberfinanzdirektion Hamburg , ECR [1993], p. I -3066, 
para. 11. 
688 Exhibit EC-14: Gausepohl-Fleisch GmbH v Oberfinanzdirektion Hamburg , ECR [1993], p. I -3067, 
para. 12. 
689 Exhibit EC-14: Gausepohl-Fleisch GmbH v Oberfinanzdirektion Hamburg , ECR [1993], p. I -3067, 
paras. 13-14. WT/DS269/R 
Page 126  
 
salt content is merely a minimum above which it is  possible that meat qualifies under heading 02.10, 
presumably subject to meeting other conditions. 
7.400  We consider that our understanding of the ECJ's judgement in Gausepohl  as far as it concerns 
the concession at issue in this case is consistent w ith other evidence available to us.  As noted above, 
we have evidence to indicate that, during the period of 1996 - 2002, EC customs authorities 
considered that the products at issue – frozen boneless chicken cuts deeply and homogeneously 
impregnated with salt, with a salt content between 1. 2% – 3% salt – qualified as "salted" products for 
the purposes of heading 02.10 of the EC Schedule.
690 
7.401  Further, we refer to the minutes of the mee ting of the EC Customs Code Committee dated 
25 January 2002, which state in relevant part that: 
"Additional Note 7 of Chapter 2 [introdu ced by EC Regulation No. 535/94] was 
introduced with a view to respecting the [ Gausepohl  judgement].  The judgement 
ruled the following: 
'Heading 0210 of [the Combined Nomenclature]... must be 
interpreted as meaning that meat of bovine animals may be classified 
under that heading as salted meat only if it has been deeply and 
evenly impregnated with salt in all its parts for the purposes of long-term preservation so that it has a minimum total salt content of 1.2% 
by weight.' 
However, Additional Note 7 to Chapter 2 introduced then into the Combined 
Nomenclature does not copy the writing of this reflect [sic] this judgement 
completely.  In the afore-mentioned note re ference was made to any kind of meat and 
not only to meat of bovine animal; in add ition the criterion of salting for the purpose 
of long-term preservation has not been introduced into [Additional Note 7 to 
Chapter 2]."
691 
As noted previously, the minutes indicate that the principle of long-term preservation was excluded 
from the definition of "salted" in EC Regulation No. 535/94.  They also tend to indicate that the 
Gausepohl  judgement only related to bovine meat wh ereas EC Regulation No. 535/94 applies more 
generally to all meat. 
7.402  Even if the ambiguities concerning the meaning and effect of the Gausepohl  judgement 
concerning the concession at issue in this dispute referred to above in para graph 7.398 did not exist, 
we consider that, in any event, at the time of conc lusion of the EC Schedule, the relevant aspects of 
the Gausepohl  judgement had been superseded through the enactment of EC Regulation No. 535/94.  
We explain our reasons for this conclusion immediately below. 
7.403  The Panel accepts the European Communities' explanation that, as a general principle, ECJ 
judgements take precedence over EC Regulations  in the event of conflict between the two.692  
However, we also note that the EC has acknowledged that the introduction of Additional Note 6(a) of 
the CN through enactment of an EC Commission Regulation693 meant that an important aspect of the 
judgement delivered by the ECJ in Dinter  – that is, the criterion used to identify whether or not meat 
                                                      
690 We again refer to our conclusions regarding EC classification practice regarding the products at 
issue during 1996-2002 in paragraph 7.303. 
691 Exhibit THA-22. 
692 EC's reply to Thailand's question No. 1 following the first substantive meeting. 
693 Namely, Commission Regulation (EEC) No. 3678/83 of 23 December 1983, which is contained in 
Exhibit THA-34.  WT/DS269/R 
 Page 127 
 
 
is "seasoned" for the purposes of Chapter 16 of th e CN – was replaced by the criterion contained in 
Additional Note 6(a).694  We have not seen any compelling reason why EC Regulation No. 535/94, 
which resulted in the introduction of Additional Note  7 of the CN, could not have superseded the 
Gausepohl  judgement in a similar way.  In fact, we ha ve evidence before us indicating that this is 
what occurred. 
7.404  First, as previously noted, EC Regulation No . 535/94 inserted into the CN an Additional 
Note, namely Additional Note 7.  We note that Article  1(2)(c) of the CN provides that the CN shall be 
comprised of "additional section or chapter notes and footnotes relating to CN subheadings".  Further, 
the ECJ has made it clear that Additional Notes become  part of the headings to which they relate and 
have binding effect.695 Therefore, we understand that Additi onal Note 7 became part of the CN..  
Accordingly, even if the ECJ's interpretation of heading 02.10 of the CN in the Gausepohl  judgement 
may be considered to have acquired the status of  a norm at the same level as the CN as has been 
asserted by the European Communities, in our view, it is clear that Additional Note 7, which was 
introduced by EC Regulation No. 535/94 and continued in force until its replacement through the enactment of EC Regulation No. 1871/2003, also had that status.  Secondly, EC Regulation No. 
535/94 was enacted following issuance of the Gausepohl  judgement.  This suggests that EC 
Regulation No. 535/94 should be read in isolati on from that judgement.  More particularly, we 
understand that the European Communities replaced the relevant aspects of the Gausepohl  judgement 
(whether possessing the status of a CN norm or othe rwise) through an amendment to the CN itself, 
which was accomplished through the subsequent en actment of EC Regulation No. 535/94.  Thirdly, 
the minutes of a meeting of the EC Customs Code  Committee dated 25 January 2002 suggest that the 
EC Commission consciously did not include a re ference to long-term preservation in enacting 
EC Regulation No. 535/94.
696  This suggestion appears to be confirmed by the minutes of a 
subsequent meeting of the EC Customs Code Co mmittee that took place in February 2002, which 
state that the Committee considered it necessary to amend Additional Note 7 to Chapter 2 "to 
introduce  the condition of 'long-term preservation"'.697  The Panel questions why it would be 
necessary to make such an amendment if the pr inciple of long-term preservation reflected in 
Gausepohl  applied in any event. 
7.405  In conclusion, the Panel considers that the aspects of the Gausepohl  judgement that are 
relevant to this case were superseded through the en actment of EC Regulation No. 535/94.  Therefore, 
in the Panel's view, our interpretation of the concession contained in heading 02.10 of the EC 
Schedule is not affected by the Gausepohl  judgement. 
EC Explanatory Notes 
 Arguments of the parties 
7.406  The European Communities  points to a 1981 Explanatory Note to heading 02.06 of the EC 
Common Customs Tariff and a 1983 Explanatory No te for subheadings 0210.11.31 and 0210.11.39 of 
the EC Common Customs Tariff, which, it submits, fo rm part of the European Communities' practice, 
to be considered under Article 32 of the Vienna Convention as "circumstances of conclusion" of its 
                                                      
694 EC's reply to Panel question No. 115. 
695 Case 38-75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der invoerrchten en 
accijnzen , 19 November 1975, ECR [1975], page 01439, at para. 10 contained in Exhibit THA-31. 
696 See paragraph 7.401 above where aspects of these minutes have been excerpted. 
697 The minutes of a meeting that took place in Janu ary 2002 (contained in Exhibit THA-22) state that: 
"Additional Note 7 to Chapter 2 of the CN (which was introduced/amended by Regulation 535/94) 'does not 
copy the writing of this reflect this [ Gausepohl ] judgement [ sic] completely. ... in addition the criterion of 
salting for the purpose of long-term preservation has not been introduced.'"  The minutes of a meeting that took 
place in February 2002 indicate that  the Committee agreed to: "Study the possibility to amend Additional Note 7 
to Chapter 2 to ... introduce the condition 'long-term pres ervation' as reflected in [the Gausepohl judgement]". WT/DS269/R 
Page 128  
 
Schedule.
698  The European Communities submits that th ese Notes indicate that, at the time of the 
Uruguay Round, the notion of preservation was intr insic to the European Communities' understanding 
of the meats in heading 02.10.  According to the European Communities, that  the specific Notes refer 
to pigmeat is irrelevant for the purposes of this dis pute given that they incontrovertibly show that the 
European Communities interpreted the term "salte d" at the time of the Uruguay Round as referring to 
salting for preservation, irrespective of the specific product the Notes concerned.699  The European 
Communities further submits that, had EC Regula tion No. 535/94 meant that preservation was not 
needed in order to qualify as "salted" under headi ng 02.10, one would logically have expected the 
modification and/or removal of the European Comm unities' Explanatory Notes, which referred to the 
concept of preservation.  However, this was not the case.  The European Communities submits that, 
therefore, the concept of preservation was vital for the interpretation of heading 02.10 during and at 
the end of the Uruguay Round.700 
7.407  In response, Brazil  and Thailand  consider that the Explanatory Notes to the CN cannot be 
considered under Article 32 of the Vienna Convention because they existed prior to the launch of the 
Uruguay Round.701  In addition, Brazil submits that the E xplanatory Notes cannot be considered under 
Article 32 of the Vienna Convention  given the limited list of items falling within that Article as 
identified by the Appellate Body in EC – Computer Equipment .  Brazil further submits that a Member 
is not required to know another Member's entire set of non-binding instruments, such as Explanatory Notes to the CN, at the time of tariff negotiations.
702 
7.408  In addition, Brazil and Thailand submit that the Explanatory Notes to the CN are not legally 
binding instruments and the ECJ itself has on oc casion considered their content not to be in 
accordance with actual provisions of the CN.703  Brazil and Thailand also  submit that Additional 
Notes, such as Additional Note 7 to Chapter 2, which was incorporated into the CN through the 
enactment of EC Regulation No. 535/94, take a higher position than Explanatory Notes in the 
hierarchy of EC classification rules.704  Therefore, according to Thailand, if the Additional Note 
contains a clear rule, the Explanatory Notes cannot modify its meaning .705  Further, Brazil and 
Thailand argue that the Explanatory Notes pointed to by the European Communities do not relate to 
heading 02.10 nor to subheading 0210.90.20 nor to the products at issue.706  More particularly, 
Thailand submits that they relate to swine meat, namely hams and shoulders and they, therefore, 
cannot be applied by analogy to poultry meat falling under subheading 0210.90.20.707  Thailand 
                                                      
698 EC's reply to Panel question No. 75. 
699 EC's reply to Thailand's question No. 2 following the first substantive meeting. 
700 EC's oral statement at the first substantive meeting, paras. 34-38. 
701 Brazil's second written submission, para. 83; Thailand's reply to Panel question No. 75. 
702 Brazil's reply to Panel question No. 75. 
703 Brazil's reply to Panel question No. 75; Brazil's or al statement at the second substantive meeting. 
para. 55; Thailand's oral statement at the first substa ntive meeting, paras. 30-34; Thailand's second written 
submission, para. 82 referring to "EC Customs Classification Rules: Should Ice Cream Melt?", Michigan 
Journal of International Law , (1994), Vol. 15, No. 4 contained in Exhibit THA-18, page 1284. and 
Case C-130/02, Krings GmbH V Oberfinanzdirektion Nürnberg , 4 March 2004 [not yet reported], para. 28 
contained in Exhibit THA-32. 
704 Brazil's second written submission, para. 83; Tha iland's oral statement at the first substantive 
meeting, paras. 30-34; Thailand's second written submission, para. 83. 
705 Thailand's oral statement at the first substantive meeting, paras. 30-34; Thailand's second written 
submission, paras. 82-83 referring to Case 149-73, Otto Witt KG v Hauptzollamt Hamburg-Ericus , 12 December 
1973, ECR [1973] page 01587, para. 3 contained in Exhibit THA-33. 
706 Brazil's oral statement at the first substantiv e meeting, para. 66; Thailand's second written 
submission, para. 82. 
707 Thailand's second written submission, para. 92.  WT/DS269/R 
 Page 129 
 
 
submits that the normal practice in the European Communities is not to apply provisions of one Explanatory Note to another, unless the Note states that it shall apply mutatis mutandis .
708 
7.409  The European Communities  also refers to an Explanatory Note of December 1994 to 
subheadings 0210.11.11 and 0210.11 .19 of the CN.  The European Communities submits that the 
importance of the Note lies in the fact that it assu mes the existence of the principle of long-term 
preservation with respect to heading 02.10.709 
7.410  Brazil  and Thailand  submit that the Explanatory Note in question relates to salted meat of 
domestic swine and not to all "salted meat" of head ing 02.10 and that, therefore, it cannot be applied 
to poultry meat.710  According to Brazil, had the Eur opean Communities desired to apply the 
provisions on salted meat of domestic swine to a ll meat covered under heading 02.10 it would have 
done so through a general Explanatory Note to heading 02.10 rather than through an Explanatory 
Note to a particular subheading.711 
 Analysis by the Panel 
7.411  The first question for determination by the Pane l is whether Explanatory Notes to the CN and 
to its predecessor, the Common Customs Tariff, qua lify as "circumstances of conclusion" of the EC 
Schedule within the meaning of Article 32 of the Vienna Convention .  For the reasons referred to in 
paragraph 7.391 above, the Panel does not consider that the fact that the Explanatory Notes were not 
explicitly mentioned by the Appellate Body in EC – Computer Equipment  as a source under Article 
32 means that such Notes cannot be taken into acc ount under that Article.  In our view, since the 
Explanatory Notes are considered in interpreting the CN , even if they are not, strictly speaking, part of 
the CN, they could qualify under Article 32 of the Vienna Convention . 
7.412  However, even if these Explanatory Notes qua lify for consideration under Article 32 of the 
Vienna Convention  whether as "circumstances of conclu sion" in the case of the 1981 and 1983 
Explanatory Notes or more generally under Article  32 in the case of the December 1994 Explanatory 
Note, we note that they appear to be non-binding.712  The ECJ has also stated that, while Explanatory 
Notes may play an important interpretative role in  cases of uncertainty, they cannot amend provisions 
of the CN.713  In contrast, the ECJ has made it clear that Additional Notes become part of the headings 
to which they relate and have binding effect.714  On the basis of the foregoing, we understand that 
Additional Notes to the CN take precedence over Explanatory Notes in the hierarchy of EC 
classification rules.  Therefore, we consider that , to the extent that there was any inconsistency 
between the Explanatory Notes in question a nd EC Regulation No. 535/94, which introduced 
Additional Note 7, Additional Note 7 would prevail. 
7.413  The Panel recalls its finding in paragraph 7.3 69 that, according to EC Regulation No. 535/94, 
if any meat is deeply and homogeneously impregna ted with salt and has a minimum salt content of 
1.2% by weight, it will meet the requirements of that Regulation and will qualify as "salted" meat 
under the concession contained in heading 02.10 of th e EC Schedule.  We do not consider that the 
notion of long-term preservation is reflected in that Regulation.  Therefore, even if the Explanatory 
                                                      
708 Thailand's reply to Panel question No. 75; Thailand's second written submission, para. 92. 
709 EC's oral statement at the second substantive meeting, para. 70. 
710 Brazil's second written submission, para. 93; Th ailand's second written submission, para. 92. 
711 Brazil's second written submission, para. 94. 
712 This is apparent from Article 1(2)(c) of th e CN, which provides that the CN comprises, inter alia , 
"preliminary provisions, additional section or chapter notes and footnotes relating to CN subheadings".  No 
mention is made of Explanatory Notes in Article 1(2)(c) of the CN. 
713 Case 149-73, Otto Witt KG v Hauptzollamt Hamburg-Ericus , 12 December 1973, ECR [1973] 
page 01587, para. 3 contained in Exhibit THA-33. 
714 Case 38-75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der invoerrchten en 
accijnzen , 19 November 1975, ECR [1975], page 01439, at para. 10 contained in Exhibit THA-31. WT/DS269/R 
Page 130  
 
Notes relied upon by the European Communities may be  considered to reflect the principle that 
salting under heading 02.10 is for the purposes of  preservation, as the European Communities asserts 
they do on the basis of the terms of the CN and ECJ jurisprudence, the Panel understands that Additional Note 7, which does not reflect this principle, takes precedence.  Therefore, we will disregard those Explanatory Notes in our interpre tation of the concession cont ained in heading 02.10 
of the EC Schedule. 
Other Additional Notes 
 Arguments of the parties 
7.414  Thailand  notes that, in 1983, prior to the launch of the Uruguay Round, the European 
Communities introduced Additional Note 6(c) to the CN [later renumbered as  Additional Note 6(b)] 
which stated that: "However, products falling within subheadings 02.06….to which seasoning has 
been added during the process of preparation  continues to fall within the said subheadings provided 
that the addition of seasoning has not changed th eir character of product falling within heading 
02.06."  According to Thailand, this Additional Note was included in the EC Common Customs Tariff 
from 1983 and has remained (albeit with slightly m odified wording) in the European Communities' 
CN until today.  According to Thailand, the content of the Additional Note is relevant to demonstrate 
that the European Communities has consistently considered that products falling under heading 02.10 
are subject to a process of preparation, from before the launch of the Uruguay Round to the present day.
715  Thailand submits that, if the European  Communities had not specifically omitted the 
requirement that products had to be salted to en sure their preservation from Additional Note 7, 
Additional Note 7 would have been cont radictory with Additional Note 6(b).716 
7.415  The European Communities  notes that, prior to the Uruguay Round, its nomenclature was 
based on the CCCN and the European Communities w as bound to observe its terms.   The European 
Communities submits that heading 02.06 of the CCCN  effectively contains the same wording as HS 
heading 02.10, and both of them enshrine the pr inciple of preservation.  The European Communities 
argues that the same CCCN-based nomenclature had been in use in the European Communities since 
1960 if not earlier.  Consequently the principle of  long-term preservation was well-entrenched in the 
European Communities and confirmed as early as 1983 in the ECJ's judgement in the Dinter  case.  
According to the European Co mmunities, any other measures could have only restated the 
preservation requirement but not modified it.717 
 Analysis by the Panel 
7.416  Thailand refers to Additional Note 6(c) in an attempt to refute the assertion that the European 
Communities has consistently held the belief that  heading 02.10 (being the successor to heading 02.06 
to which the Note refers) entailed the notion of preservation.  Given our conclusions in 
paragraph 7.413 above, we do not c onsider it necessary to address Thailand's arguments in this regard. 
Classification practice prior to 1994  
Arguments of the parties 
7.417  The European Communities  submits that the United States and probably other WTO 
Members considered that the term "salted" in  heading 02.10 referred to salting for preservation.718  
                                                      
715 Thailand's second written submission, paras. 90-91; Thailand's oral statement at the second 
substantive meeting. paras. 11 and 26. 
716 Thailand's oral statement at the se cond substantive meeting, para. 12. 
717 EC's reply to Panel question No. 109 referring to Exhibit EC-34. 
718 EC's second written submission, para. 6.  WT/DS269/R 
 Page 131 
 
 
With regard to the United States, the European  Communities refers to a US customs ruling of 
November 1993 dealing with fresh and frozen meat to which 3% salt had been added by means of 
tumbling.  According to the European Commun ities, the ruling found that the product fell under 
headings 02.01 or 02.02 (depending on whethe r it was fresh or frozen) rather than under 
heading 02.10.  In support of the decision, the cu stoms authorities cited the Explanatory Note in the 
European Communities' CN requiring that the peri od of preservation "must considerably exceed the 
time required for transportation".719 
7.418  With respect to the ruling cited by the European Communities, the United States  notes that 
US customs authorities described the product at issu e there as "similar to fresh beef sprinkled and 
packed in salt," whereas the products at issue in this case are described as "deeply and evenly 
impregnated" with salt.  The United States submits that  it is not clear how similar the products at issue 
in that ruling are to the products at issue in this dispute.720 
7.419  Brazil  and Thailand  also submit that the products at issue in the 1993 United States' customs 
ruling was boneless beef sprinkled with 3% salt, wh ereas the products at issue in this dispute are 
chicken cuts deeply and homogeneously impre gnated with salt of 1.2% or more by weight .  Brazil and 
Thailand submit that, given the products at issue in  the US customs ruling we re prepared differently 
from the products at issue in this dispute, th e ruling provides no guidance for this dispute.721  Brazil 
submits that, therefore, the 1993 US customs classification ruling does not qualify as "classification practice" of other countries within the meaning of the "circumstances of [the] conclusion" of the EC Schedule.  Brazil also submits that there are several other classification rulings by US customs authorities that place frozen, smoked and/or cured pork meat under heading 02.10.  According to 
Brazil, although smoked or cured, the meat also had to be frozen to ensure preservation of the product 
and, yet, it was still classified under heading 02.10.
722  Thailand submits that, in any event, the Panel 
is being asked to determine the European Comm unities' obligations under its Schedule.  Thailand 
argues that, therefore, the US Schedule is not relevant.723 
7.420  The European Communities  submits that the US customs ruling of November 1993 
explicitly described the tumbling pr ocess used to absorb the salt fo r the meat in question.  The 
European Communities recalls that, despite being subj ected to this process, the meat was described in 
the ruling as "similar to fresh beef sprinkled and pa cked in salt".  The Eur opean Communities further 
recalls that the meat was classified alongside fresh  and frozen beef under headings corresponding to 
heading 02.07, and not under heading 02.10.  The European Communities notes that the products at 
issue in this case had likewise gone through a tumbli ng or equivalent injection process resulting in a 
salt content of 1.2% – 3 %.  The European Comm unities further notes that it was meat resulting from 
this process that the ruling descr ibed as "similar to fresh beef sprinkled and packed in salt."724 
Analysis by the Panel 
7.421  The Panel recalls that, in EC – Computer Equipment , the Appellate Body indicated that 
Members' classification practices during the Uruguay Round negotiations are part of the 
"circumstances of conclusion" of the WTO Agreement and may be used as a supplementary means of 
interpretation under Article 32 of the Vienna Convention .  The Appellate Body also indicated that it is 
most useful to examine the classification practice of all WTO Members.  However, in this case, the 
Panel has been provided with limited evidence of classification practice from one WTO member – 
                                                      
719 EC's oral statement at the firs t substantive meeting, para. 33. 
720 US reply to Panel question No. 86. 
721 Brazil's oral statement at the second substan tive meeting, para. 71; Thailand's second written 
submission, paras. 54-55. 
722 Brazil's oral statement at the second substantiv e meeting, para. 71 referring to Exhibit BRA-39. 
723 Thailand's oral statement at the seco nd substantive meeting, paras. 30-31. 
724 EC's oral statement at the second substantive meeting, para. 74. WT/DS269/R 
Page 132  
 
namely the United States – during the Uruguay Round negotiations.  Such evidence concerns products other than those at issue in this dispute.  The Pa nel does not consider that this limited evidence has 
any probative value regarding the interpretation of the concession cont ained in heading 02.10 of the 
EC Schedule for the purposes of this dispute and, therefore, it will be disregarded. 
7.422  The Panel notes that we have dealt with  classification practice after 1994 in section 
VII.G.3(c)(i) above as "subsequent pr actice" under Article 31(3)(b) of the Vienna Convention .  Even 
if such practice does not qualify as "subsequent prac tice" under Article 31(3)(b), we consider that it 
may, nevertheless, be taken into consideration under Article 32 of the Vienna Convention .
725  If so, 
our conclusions regarding the relevance of subseque nt practice for the interpretation of the concession 
contained in heading 02.10 of th e EC Schedule apply equally here. 
(iii) Summary and conclusions regarding "supplementary means" 
7.423  The Panel recalls that, following its analysis of the concession contained in heading 02.10 of 
the EC Schedule pursuant to Article 31 of the Vienna Convention , the Panel concluded that the 
products at issue appeared to be covered by th at concession.  The Panel sought to confirm that 
conclusion through a reference to supplementary me ans of interpretation of the concession in question 
pursuant to Article 32 of the Vienna Convention .  We considered EC Regulation No. 535/94, the 
Dinter  and Gausepohl  ECJ judgements, EC Explanatory Notes, an EC Additional Note and 
classification practice prior to the conclusion of the EC Schedule.  In the Panel's view, the relevant 
aspects of the supplementary means of interpretati on, most particularly, EC Regulation No. 535/94, 
indicate that meat that has been  deeply and homogeneously impregnated with salt and has a minimum 
salt content of 1.2% by weight would qualify as "salted" meat under the concession contained in 
heading 02.10 of the EC Schedule.  Therefore, th e Panel concludes that the supplementary means of 
interpretation considered under Article 32 of the Vienna Convention  confirm the preliminary 
conclusions we reached in paragra phs 7.331 and 7.332 above followi ng an analysis under Article 31 
of the Vienna Convention . 
(h) Conclusion regarding the meaning of the term " salted" in the concession contained in heading 
02.10 of the EC Schedule 
7.424  In light of the analysis of the term "salted" in the concession contained in heading 02.10 of the 
EC Schedule pursuant to Articles 31 and 32 of the Vienna Convention , the Panel concludes that that 
term includes frozen boneless salted chicken cuts  that have been deeply and homogeneously 
impregnated with salt, with a salt content of 1.2% or more.726 
                                                      
725 Ian Sinclair states that: "It should of course be  stressed that paragraph 3(b) of Article 31 of the 
Convention does not cover subsequent practice in general, but only a specific form of subsequent practice – that 
is to say, concordant subsequent practice common to all the parties.  Subsequent practice which does not fall within this narrow definition may nonetheless constitute a supplementary means of interpre tation within the 
meaning of Article 32 of the Convention".  Ian Sinclair, The Vienna Convention on the Law of Treaties , 
Manchester University Press, 2
nd edition (1984) p. 138. 
726 The EC does not appear to dispute that the products at issue contain a minimum of 1.2% salt and are 
deeply and homogeneously impregnated with salt in all parts.  However, the EC submits that the products at issue do not meet the criteria set out  in EC Regulation No. 535/94 because  that Regulation sets a minimum salt 
content below which it cannot be considered that a product is salted for preservation: EC's reply to Panel 
question No. 93.  As noted above in paragraph 7.368, the Panel does not consider that EC Regulation 535/94 sets a minimum salt content below which it cannot be consid ered that a product is salted for preservation.  This 
view appears to be supported by EC  classification practice, according to which the products at issue were 
classified under heading 02.10 during 1996-2002.  WT/DS269/R 
 Page 133 
 
 
(i) Conclusions regarding the application of  Article II of the GATT 1994 in this case 
7.425  The Panel recalls that, in paragra ph 7.79 above, we stated that, if we were to conclude that the 
products at issue are covered by the concession cont ained in heading 02.10 of the EC Schedule, there 
is no question that the treatment accorded to t hose products under the measures at issue is less 
favourable than that provided for in the EC Sche dule because undisputed pricing data indicates that 
the duty levied on the products at issue can and has exceeded 15.4% ad valorem , being the bound 
duty rate for products covered by heading 02.10. 
7.426  It is the Panel's view that the products at i ssue are covered by the concession contained in 
heading 02.10 of the EC Schedule.  Therefore, su ch products are entitled to treatment provided for by 
that concession.  Since the products at issue are not being accorded such treatment, the European 
Communities is in violation of Article II: 1(a) and Article II:1(b) of the GATT 1994. 
7.427  In reaching this conclusion, the Panel recalls that a fundamental object and purpose of the 
WTO Agreement and the GATT 1994 is that the security and predictability of reciprocal and mutually 
advantageous arrangements must be preserved.  In  the Panel's view, a Member's unilateral intention 
regarding the meaning to be ascribed to a concessi on that Member has made in the context of WTO 
multilateral trade negotiations cannot  prevail over the common intentions of all WTO Members as 
determined through an analysis undertaken pursuant to Articles 31 and 32 of the Vienna Convention . 
VIII.  CONCLUSIONS AND RECOMMENDATION 
8.1 The Panel concludes  that: 
(a) Frozen boneless chicken cuts that have been impregnated with salt, with a salt content 
of 1.2% - 3% (the products at issue) are covered by the concession contained in 
heading 02.10 of the EC Schedule; 
(b) EC Regulation No. 1223/2002 and EC Deci sion 2003/97/EC result in the imposition 
of customs duties on the products at issue th at are in excess of the duties provided for 
in respect of the concession contained in heading 02.10 of the EC Schedule; and 
(c) Accordingly, the European Communities has acted inconsistently with the 
requirements of Articles II:1(a) and II:1(b)  of the GATT 1994 and, thus, nullified or 
impaired benefits accruing to Brazil. 
8.2 Therefore, the Panel recommends  that the Dispute Settlement Body request the European 
Communities to bring EC Regulation No. 1223/2002 and EC Decision 2003/97/EC into conformity 
with its obligations under the GATT 1994.