WORLD TRADE  
ORGANIZATION  WT/DS336/5 
19 May 2006 
 (06-2460) 
 Original:   English 
  
JAPAN – COUNTERVAILING DUTIES ON 
DYNAMIC RANDOM ACCESS MEMORIES FROM KOREA 
 
Request for the Establishment of a Panel by Korea
 
  
 The following communication, dated 18 May 2 006, from the delegation of Korea to the  
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.  
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On 27 January 2006, the Government of Japan  ("Japan") imposed countervailing duties on 
imports of Dynamic Random Access Memories ("DR AMS") from Korea, as announced in Cabinet 
Order No. 13 and Ministry of Finance Notice No. 35, published respectively in Issue No. 4264 and Special Issue No. 17 of the Official Gazette dated 27 January 2006.   
The Government of Korea ("Ko rea") considers the countervailing duties imposed by Japan 
against DRAMS from Korea to be inconsistent with  Japan’s obligations under the relevant provisions 
of the GATT 1994, and the Agreement on S ubsidies and Countervailing Measures ("SCM 
Agreement").  As a result, Korea requested c onsultations with Japan regarding these measures 
pursuant to Article 4 of the Understanding on Ru les and Procedures Governing the Settlement of 
Disputes ("DSU"), Article 30 of the SCM Agre ement, and Article XXII of the GATT 1994.  
Consultations were requested on 14 March 2006 concerning the c ountervailing measures of Japan.  
The consultations were held with Japan in Geneva  on 25 April 2006.  These consultations failed to 
resolve the dispute between the parties.   
As a result of the failure to resolve the dis pute, Korea requests the establishment of a panel 
pursuant to Article 6 of the DSU, Article XX III of the GATT 1994, and Article 30 of the SCM 
Agreement regarding Japan’s countervailing measures against DRAMS from Korea.  Korea requests that the panel make findings that Japan has acted inconsistently with its obligations under Articles 1, 
2, 10, 11, 12, 14, 15, 19, 21, 22 and 32 of the SC M Agreement, as well as Articles VI:3 and X:3 of the 
GATT 1994.  Specifically, Korea makes claims under the following:  
 
1.    Article 1.1 of the SCM Agreement because, inter alia, Japan failed to demonstrate the 
existence of a financial contribution by Kor ea with respect to each distinct financial 
transaction at issue in its anti-subsidy investigation.  
2.    Article 1.1 of the SCM Agreement because, inter alia, Japan failed to demonstrate that 
every private financial institution involved in its subsidy investigation was under the 
direction or entrustment of Korea.   
3.    Articles 1.1 and 14 of the SCM Agreement because, inter alia , Japan failed to demonstrate 
that a benefit was conferred upon the responde nt Hynix Semiconductor, Inc., ("Hynix"), 
given available market benchmarks and the circumstances of financial restructuring.  WT/DS336/5 
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  4.    Articles 1.1 and 14 of the SCM Agreement because, inter alia , the analyses of the 
"commercial rationality" of loans and other i nvestments in Hynix, and the other analyses 
related to the determination of  the financial contribution and benefit to Hynix, that were 
undertaken by Japan are inconsistent with Jap an’s obligations under the SCM Agreement.  
5.    Article 2 of the SCM Agreement because, inter alia , Japan did not properly establish that all 
of the alleged subsidies were specific to Hynix on the basis of positive evidence.  
6.    Articles 1 and 2 of the SCM Agreement because, inter alia , Japan imposed an improper 
burden of proof on Hynix and Korea; reached conclusions without adequate evidentiary 
basis, and thereby failed to base its decisions  on affirmative, objective, and verifiable 
evidence.   
7.    Article 12 of the SCM Agreement because, inter alia , Japan improperly treated entities that 
had no interest in the investigation as "int erested parties," improperly applied "facts 
available" instead of considering the info rmation on the record, and improperly made 
adverse inferences against the interests of Hy nix due to allegedly inadequate cooperation 
by other interested parties or by other entities that were not under Hynix’s control and that 
were not obligated to participate in the investigation. 
8.    Article 14 of the SCM Agreement because, inter alia , Japan utilized methods for calculating 
the benefit to the alleged recipient of the a lleged financial contribu tions that were not 
specified in Japan’s national legislation or implementing regulations  and that were not 
applied in a manner that was transp arent and adequately explained.  
9.    Articles 14 and 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994 because, 
inter alia , Japan failed to properly measure the benefit in accordance with the principles of 
the SCM Agreement, which resulted in countervailing duties levied in excess of the amount allowed under the SCM Agreement and the GATT 1994.   
10. Article 15 of the SCM Agreement because, inter alia , Japan improperly found material 
injury caused by the allegedly subsidized imports without proper evidentiary or legal 
foundations.    
11. Article 15.5 and 19.1 of the SCM Agreement because, inter alia , Japan’s determination 
failed to demonstrate that the allegedly subsid ized imports were, through the effect of the  
alleged subsidies, causing injury within the meaning of the SCM Agreement.   
12. Articles 10 and 32.1 of the SCM Agreement because, inter alia , the countervailing duties 
imposed by Japan against DRAMS originating in Korea were not in accordance with the 
relevant provisions of the SCM Agreement or  the relevant provisions of GATT 1994.   
13. Articles 10, 14, 19, and 21 of the SCM Agreement because, inter alia , Japan imposed and 
maintained countervailing duties without determ ining whether a benefit continued to exist 
following changes in the ownership of Hynix.   
14. Articles 19 and 21 of the SCM Agreement because, 
inter alia , Japan improperly levied a 
countervailing duty on imports when there was no longer a benefit from the alleged 
subsidies, and the duty was not necessar y to counteract subsidization.  
15. Articles 10, 11, 12, 14, 15, 22, and 32.1 of the SCM Agreement and Articles VI:3 and X:3 
of the GATT 1994 because Japan, inter alia,  failed to conduct a thorough and complete  WT/DS336/5   
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  investigation, and failed to conduct its i nvestigation and make determinations in 
accordance with fundamental substantiv e and procedural requirements.  
The Government of Korea requests that the pane l be established with the standard terms of 
reference set forth in Article 7 of the DSU.   
The Government of Korea further requests that this request be placed on the agenda for the 
special  meeting of the Dispute Settlement Body on 30 May 2006.  
 
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