. /.  WORLD TRADE  
ORGANIZATION  WT/DS336/9 
18 September 2007 
 (07-3883) 
 Original:   English 
  
JAPAN – COUNTERVAILING DUTIES ON DYNAMIC  
RANDOM ACCESS MEMORIES FROM KOREA 
 
Notification of an Other Appeal by Korea
 
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 23(1) of the Working Procedures for Appellate Review  
   The following notification, dated 11 Septembe r 2007, from the Delegation of Korea, is being 
circulated to Members. 
 
_______________ 
 
 Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes  ("DSU") and Rule 23 of the Working Procedures for Appellate Review, the 
Republic of Korea ("Korea") hereby notifies its d ecision to appeal to the Appellate Body certain 
issues of law and legal interpretations contained in the report of the panel Japan – Countervailing 
Duties on Imports of Certain Dynamic R andom Access Memories (DRAMS) from Korea  (WT/DS336) 
(the "Panel Report").  Korea seeks review by th e Appellate Body of the following legal conclusions 
and related findings and legal interpre tations in the Report of the Panel: 
 
(1) The Panel's finding that Japan acted consisten tly with its obligations under Articles 1.1(b) 
and 14 of the Agreement on Subsidi es and Countervailing Measures (the "SCM 
Agreement"), when the Japanese investigating authorities ("JIA") determined that Hynix 
Semiconductor, Inc. ("Hynix") received a "benefit" from a transaction restructuring Hynix's debts in October 2001.
1  The Panel incorrectly interpreted Articles 1.1(b) and 14 
of the SCM Agreement to permit an investig ating authority to assume that a "benefit" 
exists based solely on a finding that allegedly entrusted or directed private creditors failed 
to undertake a satisfactory analysis of the transaction before approving it, in the absence of evidence or a finding by the investigating authority that the alleged entrustment or 
direction actually made the recipient "better o ff."  The Panel's analysis is inconsistent 
with the provisions of Article 1.1 of th e SCM Agreement, which requires a separate 
analysis of (i) whether the government action constituted a "financial contribution" as a 
result, inter alia , of government entrustment or direction of non-governmental entities;  
and (ii) whether the government action has conferred a "benefit" on the recipient.  In addition, the Panel's analysis is inconsiste nt with the requirement of Articles 1.1(b) 
and 14 of the SCM Agreement that a "benef it" exists when the recipient of the 
government financial contribution has been ma de "better off", because the terms of the 
transaction provided through the government financial contribution are more favourable 
than the terms that would have been ava ilable in the absence of government action. 
                                                     
 
1  These findings include paragraphs 7.271 to 7.277, 7.280 to 7.281, and 7.316 to 7.317 of the Panel 
Report. WT/DS336/9 
Page 2  
 
(2) The Panel's finding that Japan acted consistently with its obligations under Articles 15.5 
and 19.1 of the SCM Agreement, when the JIA made a determination of injury and 
imposed countervailing duties, without making a reasonable determination that the allegedly subsidized imports were causi ng injury to a competing domestic industry 
through the effects of subsidies.
2  Article 15.5 requires a demonstration "that the 
subsidized imports are, through the effects of subsidies , causing injury within the meaning 
of this Agreement."3  Article 19.1 permits the imposition of countervailing duties only if 
"a Member makes a final determination ... that, through the effects of the subsidy , the 
subsidized imports are causing injury ... ."4  The Panel adopted an interpretation of these 
provisions that rendered inutile the language of the provisions referring to "the effects of 
the subsidy."  As a result, the Panel incorrec tly allowed an affirma tive determination of 
injury to be made, and countervailing duties to be imposed, when the evidence did not 
support the conclusion that the volume or price of the imports, or the injury to the domestic industry, would have been any different in the absence of subsidies. 
(3) The Panel's finding that Japan acted consistently with its obligations under Articles 12.7 
and 12.9 of the SCM Agreement, when the JIA designated as "interested parties" entities 
that were not demonstrated to have any inter est in the proceeding, and then applied "facts 
available" when some of those entities failed to provide information requested by the JIA 
within the time limits established by the JI A.  The Panel's interpretation of the term 
"interested party" was not consistent with the ordinary meaning of that term or with the 
context and purpose of the relevant provisions  of the SCM Agreement. As a result, the 
Panel approved a determination that was not consistent with the due process obligations 
that the SCM Agreement imposes on investiga ting authorities, and authorized Japan to 
subject an exporter to punitive duties based on the non-responsiveness of entities over which the exporter had no influence or control.
5 
(4) The Panel's finding that Japan acted c onsistently with its obligations under 
Article 1.1(a)(1) of the SCM Agreement, when (i) the JIA classified transactions that did 
not involve a transfer of funds from the government (or government-entrusted or -directed private entities) to Hynix as "direct transfers of funds" within the meaning of sub-paragraph (i) of Article 1.1(a)(1);  and (ii) the JIA failed to demonstrate that the 
transactions met the requirements for clas sification as foregone revenue within the 
meaning of sub-paragraph (ii) of Article 1.1(a )(1).  The Panel's analysis is inconsistent 
with the ordinary meaning of the relevant  terms of the SCM Agreement and with the 
context of the relevant provisions of the SCM Agreement.  As a result, the Panel 
disregarded the SCM Agreement's scheme for classifying financial c ontributions, and the 
different analyses that investigating authorities are required to apply when making findings under sub-paragraphs (i) and (ii) of Article 1.1(a)(1).
6 
__________ 
 
                                                      
2  These findings include paragraphs 7.405 to 7.425 of the Panel Report. 
3  (Emphasis added, footnote deleted.) 
4  (Emphasis added.) 
5  These findings include paragraphs 7-381 to 7.398 of the Panel Report. 
6  These findings include paragraphs 7.439 to 7.446 of the Panel Report.