WORLD TRADE  
ORGANIZATION  WT/DS323/5 
G/L/724/Add.1 
G/AG/GEN/67/Add.1 G/LIC/D/38/Add.1 
27 January 2006 
 
 
(06-0361) 
 Original:   English 
 
  
JAPAN – IMPORT QUOTAS ON DRIED LAVER AND SEASONED LAVER 
 
Notification of Mutually Agreed Solution
 
 
  The following communication, dated 23 January  2006, from the delegation of Korea and the 
delegation of Japan to the Chairman of the Dis pute Settlement Body, is circulated pursuant to 
Article 3.6 of the DSU. 
 
 
_______________ 
 
  Korea and Japan wish to notify the Dispute Se ttlement Body in accordance with Article 3.6 of 
the DSU that they have reached a mutually agreed so lution, elements of which are attached hereto, to 
the matter raised by Korea in document WT/DS323/1 dated 3
 December 2004. 
 
 We would ask you to circulate this notifica tion to the relevant C ouncils and Committees, as 
well as to the Dispute Settlement Body.   
 
    (signed) (signed)   Mr CHOI Hyuck Mr Ichiro FUJISAKI 
  Ambassador Ambassador 
  Permanent Representative Perm anent Representative of Japan 
  of the Republic of Korea WT/DS323/5, G/L/724/Add.1,  
G/AG/GEN/67/Add.1, G/LIC/D/38/Add.1 Page 2 
 
 
  ATTACHMENT
 
 
 1. Product Coverage
 
 
 The products covered by this mutually agreed  solution are all the laver products (hereafter, 
the "Laver Products") classified under the HS Cod es 1212 and 2106, as further described in Annex A 
hereto.  
2. Annual Import Quota Amounts
 
 (a) An annual import quota will be allocated excl usively for Korean Laver Products in an amount 
(hereafter, the "Annual Import Quota Amount") which will not be less than 340 million sheets in 2006 and thereafter the Annual Import Quota Amount will be increased so that the Annual 
Import Quota Amount allocated for 2015 w ill be no less than 1.2 billion sheets. 
 (b) Both sides will discuss to determine a conversi on formula with respect to Laver Products that 
are not in sheet form pursuant to the consultation procedures in paragraph 9.     
 
3. Sub-Quotas
 
 (a) Japan's import quota system with respect to Korean Laver Products will comprise the sub-
quotas set forth in Annex B hereto. 
 
(b) User Quota: In the User Quota Notification [Hacchugendo Naiji sho], the amount of the User 
Quota exclusively allocated to applicable Ko rean Laver Products will be expressly stated.  
 (c) Trading Company A Quota (provisional name):   
 A. In an annual import quota announcement, it will be expressly stated that all laver 
imported under the Trading Company A Q uota must be exclusively applicable 
Korean Laver Products.    
  B. With respect to any past import reco rd requirement for the Trading Company A 
Quota, no applicant will be disqualified excep t for those who have failed to achieve a 
quota use ratio of 80% or more of the allo cated quota during the most recent two year 
period. 
 (d) Other Laver Products (as defined in Annex A)  of Korea may be imported under any of the 
sub-quotas, including the First-Come-First-Served Quota from 2007, in accordance with the 
arrangement based on the consultations pursuan t to paragraph 9. In  2006, Other Laver 
Products of Korea may be imported under the First-Come-First-Served Quota. 
 (e) Necessary arrangements will be maintained so as not to impose any maximum quota volume 
per applicant in allocating the Trading Company A Quota unless it is necessary due to excess 
demand for quota allocation.   
 (f) With respect to the First-Come-First-Served Quota or in re-allocating any unutilized amounts 
of the User Quota pursuant to paragraph 7, if any amount of the quota remains unallocated due to the maximum quota volume per appli cant notwithstanding existing demand, such 
maximum quota volume per applicant will be eith er increased or otherwise it will be ensured 
that all quotas are allocated to the extent th at demand exists for such quotas.      WT/DS323/5, G/L/724/Add.1,  
 G/AG/GEN/67/Add.1, G/LIC/D/38/Add.1  Page 3 
 
 
  4. Sub-Quota Allocations
 
  Unless otherwise decided pursuant to paragra ph 11(b), no more than 60% of the Annual 
Import Quota Amount will be allocated to the User Quota and the remaining portion will be allocated 
to the Trading Company A Quota.  
 5. Import Quota Announcement and Completion of Quota Allocation
 
  The import quota announcement for 2006 will be ma de in February 2006 and quota allocation 
to applicants of the Trading Company A Quota will  be completed within 2 months from the date of 
announcement. The timing of the import quota announc ements from 2007 to 2015 will be decided by 
no later than 31 October 2006, so that the import quot a announcements will be ma de earlier than that 
in 2006.  
6. Timing of the Auction of the User Quota
 
  Both sides will cooperate to promote an e fficient auction process for the products traded 
under the User Quota for the laver products impor ted from Korea, through encouraging relevant 
organization(s) to hold auctions once or more a y ear. Further details of the auction process will be 
discussed by the relevant organizations of Korea and Japan.  
 7. Unutilized Amount of the User Quota for Korea
 
 (a) If more than 5% of the Annual Import Quota Amount allocated to the User Quota pursuant to 
Paragraph 4 above is not utilized, such unutilized  portion will be re-allocated to any applicant 
wishing to import applicable Korean Laver Produc ts as set forth in Annex C hereto in the 
same annual period on the earliest date(s) that the non-utilization of such portion can be determined.  
 (b) The Japanese side will make its best efforts to ensure that th e re-allocation pursuant to this 
paragraph is effective in facilitating quota use.   
 8. Effective Implementation
 
 
(a) Both sides will take all necessary steps to full y and effectively implement the matters in this 
mutually agreed solution. No new measures that adversely affect, directly or indirectly, the 
market access for any of the Laver Products in Japan will be taken. Both sides will not take 
any action which has the direct or indirect purpose or effect of undermining or offsetting the basis of this mutually agreed solution.  
 
(b) Prior to the introduction of any formal or informal measures that affect, directly or indirectly, 
the market access for any of the Laver Products , both sides confirm that they will provide 
information, in a timely manner, on such measures.  
 9. Consultations
 
 
 Both sides will hold consultations regular ly once a year and will hold additional 
consultations, at the request of either side, to discuss matters relating to the implementation of the 
matters in this mutually agreed solution and other matters relating to improving the market access for the Laver Products.  Such consultatio ns will begin at the earliest possible date, but no later than 30 
days from the date of the receipt of a request fo r consultations pursuant to this paragraph, unless 
otherwise decided.   WT/DS323/5, G/L/724/Add.1,  
G/AG/GEN/67/Add.1, G/LIC/D/38/Add.1 Page 4 
 
 
   
10. Implementing Agency
 
  As to the Japanese side, the matters in this mutually agreed solution will be implemented by 
the Fisheries Agency, the Ministry of Agricu lture, Forestry and Fisheries of Japan.    
 11. Other Matters
 
 (a) This mutually agreed solution is without prej udice to the rights or obligations of either Korea 
or Japan including, without limitation, under the Agreement Establishing the World Trade 
Organization. 
 (b) The matters in this mutually agreed soluti on may be rearranged, when necessary, by mutual 
consent based on the consultations  set forth in paragraph 9. 
 
(c) Both sides will implement the matters in th is mutually agreed solution, together with 
Annexes A, B and C hereto, upon notice to the DSB.  
  WT/DS323/5, G/L/724/Add.1,  
 G/AG/GEN/67/Add.1, G/LIC/D/38/Add.1  Page 5 
 
 
  Annex A
 
 
Product Coverage  
 
 
 For purposes of this mutually agreed solution,  Laver Products, as define d in paragraph 1, are 
categorized as follows:    
• Dried Laver: All dried laver (hos hi nori) classified under 1212.20-1. 
 
• Seasoned Laver Not Containing Sugar:  All seasoned laver classified under 
2106.90-2-(2)-E-(b).  
 
• Other Laver Products: All Lave r Products other than Dried Laver, Seasoned Laver Not 
Containing Sugar. WT/DS323/5, G/L/724/Add.1,  
G/AG/GEN/67/Add.1, G/LIC/D/38/Add.1 Page 6 
 
 
  Annex B
 
 
Sub-Quotas under Japan's Import Quota System for Korean Laver Products  
 
 
Trading Company A Quota  (this naming is provisional, and can be renamed during the process of 
import quota announcement)  
• Qualified importers: An applicant that has b een allocated trading company quota under past 
laver Import Announcements, and that meet s all of the following requirements: 
 
(i) has a record of clearing laver impor ts through customs from Korea during the 
preceding one year period, 
  (ii) and has a record (quota use ratio) of clearing 80% or more of the allocated laver 
import quota through customs during the most recent two year period on an average 
basis, if allocated a trading company quota in the year before the last.  
 
• All of the laver products listed in Annex A may be imported under the Trading Company A 
Quota from 2007. 
 User Quota
 
 
• The User Quota is allocated to applicants th at receive purchase orders from customers that 
have received a notification of the maximum am ount of orders ("User Quota Notification"). 
 
• All of the laver products listed in Annex A may be imported under the User Quota from 2007.  WT/DS323/5, G/L/724/Add.1,  
 G/AG/GEN/67/Add.1, G/LIC/D/38/Add.1  Page 7 
 
 
  Annex C
 
 
Timetable for Reallocation of Unu tilized Amount of the User Quota  
 
 Around February: 
 
 Annual Import Quota Announcement  Around March: 
 
 The Fisheries Agency is to issue the User Quota Notification (Hacchugendo Naiji sho) and to 
make it clear that "if purchase orders has not b een placed until the specific date (as early as 
practicable within 6 months after the User Quota Notification), the unused amount of the 
Notification expires". 
 
Around May:  
 The User Quota organization is to hold an auction of laver. The organization places the 
purchase orders of the laver, which are successf ully bidden at the auction. Ministry of 
Economy, Trade and Industry (METI) is to provide import license according to the amount of 
the bidden laver. Actual custom s clearance happens after June. 
 Around September or earlier: 
 
 Pursuant to Paragraph 7 of this mutually ag reed solution, the Fisheries Agency will announce 
the reallocation as well as its application sche dule and qualifications for the applicants. 
 
Around October or earlier:  
 Application for the reallocation is open for and accepted from any applicants who meet the 
qualifications. 
 
Around November or earlier: 
  The Fisheries Agency can reissue the User Quota Notification (Hac chugendo Naiji sho) to 
any applicants wishing to import applicable  Korean Laver Products until the unused amount 
is fully used and METI will provide the import license.  Once the import license is issued, the 
import of laver using the reissued User Quota Notification can begin. 
 
 With respect to the terms of validity for the import quota certificates and the import licenses 
granted on the basis of the certificates in this  case, such terms will be the same terms as for 
the Trading Company A Quota or the First-Come-First-Served Quota.  
 The above schedule may be rearranged from 2007, wh en necessary, by mutual consent based on 
consultations set forth in Paragraph 9 of this mutually agreed solution. 
 
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