WT/DS345/R 
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  ANNEX A 
 
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSION  
OF THE PARTIES 
 
CONTENTS PAGE 
Annex A - 1 Executive Summary of the First Written Submission of the  
United States A-2 
Annex A - 2 Executive Summary of the First Written Submission of India A-10 
 WT/DS345/R 
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  ANNEX A - 1 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
THE UNITED STATES 
 
(11 May 2007) 
 
1. Introduction 
1. This dispute centers on certain action taken by  US Customs and Border Protection (CBP) to 
address a serious and growing revenue collection prob lem.  In 2003 and 2004, CBP determined that 
importers were defaulti ng on hundreds of millions of dollars of antidumping and countervailing duties 
lawfully owed to the United States.  The duties in question were unsecured by cash deposits, sufficient 
bonds, or other guarantees:  thus, when an importer defaulted, CBP could not recover the duties owed 
from the sureties that ordinarily protect CBP from default risk.  To address the problem, CBP began to develop a new directive for increasing security requirements on merchandise with higher risk of default.  
Its own analysis indicated that importers of agricu lture/aquaculture merchandise in particular were the 
source of the bulk of the defaults.  
2. During the same period, the US Department of  Commerce (USDOC) and the US International 
Trade Commission (USITC) were considering a petition to impose antidumping duties on another 
agriculture/aquaculture product:  certain shrimp from China, Thailand, India, Vietnam, Brazil, and 
Ecuador.  Imports of the merchandise subject to the petition were in 2003 valued at in excess of 
$2.5 billion – itself an unprecedented figure for ag riculture/aquaculture merchandise subject to an 
antidumping order.  
3. If the defaults it experienced with respect to ot her agriculture/aquaculture importers occurred for 
shrimp, CBP realized that its revenue  collection problem could rapidly grow into a crisis.  Therefore, after 
considerable analysis and considera tion, it decided to apply the new directive to shrimp.  The directive 
provides for an importer-specific risk assessment as the basis for additional bond amounts.  Importantly, 
this means that CBP has tailored the process to ensure  that, if a company subject to the directive does not 
itself pose a collection risk, it need not provide add itional bond amounts.  Even with this mechanism in 
place, India asserts that the directive is impermissi ble under various provisions of the WTO Agreements.  
In effect, India ask this Panel to find that the United States may not collect duties lawfully owed to it.   
4. India's complaint focuses on the question of what the WTO Agreements permit a revenue 
collection authority to do when faced with a coll ection problem involving antidumping and countervailing 
duties.  As discussed below, in its effort to a pply the disciplines contained in the Agreement on 
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping 
Agreement) and the Agreement on Subsidies and Countervailing Measures (SCM Agreement) to the 
action in question, India mischaracterizes both the ob ligations that Agreement contains and key facts 
about the directive, its content and how it operates.   If accepted, India' s arguments would suggest that 
ordinary revenue collection strategies may not be applied to importers subject to antidumping and 
countervailing duties, and in so doing would serious ly compromise the ability of Members'  customs 
authorities to collect duties lawfully owed the Memb er.  These arguments do not accord with the text of 
the Agreements, which expressly permit authorities to require "reasonable security"  to collect 
antidumping and countervailing duties.   
5. India additionally makes the extraordinary claim th at ordinary customs laws and regulations are 
themselves inconsistent with the WTO Agreements si mply because they give CBP the "authority"  to 
require additional security. India' s arguments in this regard are unsupported by the text of the 
Agreements, at odds with the reasoni ng contained in a long line of panel and Appellate Body reports, and, 
if accepted, would have profound implicati ons for the WTO Membership as a whole.  WT/DS345/R 
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  2. Factual Background 
6. CBP is the US agency responsible for collection of customs duties.  Under the US system, goods 
are permitted to enter the customs territory of th e United States without having paid duties or other 
liabilities imposed by law.  In this manner, the Un ited States expedites the entry of goods and does not 
make the importer wait on the final determination of duties owed or other liabilities under the law.  
However, since the goods will have been long since released from CBP' s custody and not available for 
return to satisfy any obligations of the importer when they are legally determined to be due, it is necessary for CBP to have some security against payment of amounts lawfully owed.  Consequently, CBP requires 
single transaction bonds or continuous bonds for entries of merchandise as a matter of course.  As a rule, 
all entries must be accompanied by evidence that a bond is posted with CBP to cover any potential duties, 
taxes, and charges that may accrue.  Pursuant to CBP ' s regulatory authority, a port director may require 
additional bond amounts or other additional security in or der to ensure that the acceptance of an entry will 
be adequately protected against any duties or other liabilities imposed by law.  
7. CBP establishes the minimum amount of the bond that the importer must obtain from a surety.  
The United States is the third party beneficiary to the contract between the surety and the bond principal, 
but is not itself a party to the contract.  CBP does not set the fees charged by the sureties for the bonds 
they provide. 
8. It is not uncommon for Members to require secur ity in this manner, pending final assessment of 
customs liability.  Under India' s customs law, for exam ple, when final duty liability cannot be determined 
upon entry, customs officers may assess provisional duti es if the importer "furnishes such security as the 
proper officer deems fit for the payment of the defi ciency, if any, between the duty finally assessed and 
the duty provisionally assessed."  Security requirements such as these ensure th at customs authorities are 
able to collect duties lawfu lly owed upon final assessment. 
9. Surety systems are contemplated by, among other provisions, Article 13 of the Agreement on 
Implementation of Article VII of the General Agre ement on Tariffs and Trade 1994 (Customs Valuation 
Agreement), which provides that Members shall allow importers to withdraw goods from customs 
pending final determination of custom s value if the importer "provides sufficient guarantee in the form of 
a surety, a deposit or some other appropriate instru ment, covering the ultimate payment of customs duties 
for which the goods may be liable."  In addition to Ar ticle 13 of the Customs Valuation Agreement, surety 
systems are explicitly provided for in the Kyoto C onvention on the Simplification and Harmonization of 
Customs Procedures.  The Convention, like the Cu stoms Valuation Agreement, encourages the early 
release of merchandise, and permits the adoption of su rety systems to ensure compliance with regulatory 
undertakings, as well as to ensure collection of any additional  import duties and taxes that might become 
chargeable.  Thus, the Convention explicitly contem plates that, as a necessary consequence of the early 
release of merchandise, it might become necessary to  impose bond requirements to ensure the collection 
of assessed duties beyond the estimated duties for wh ich an importer might be liable based on information 
at the time of entry.  
10. The bond requirements imposed by the United Stat es do not entail any payments to the United 
States Government.  Rather, importers must provide  evidence that they have obtained either single 
transaction bonds or continuous entry bonds (or cash or an authorized obligation of the United States in 
lieu of surety on a bond) for the entry or entries in question.  These bonds are obtained from private surety 
companies, which charge the importers based on the risk involved with the transaction.  
11. With respect to merchandise subject to an anti dumping or countervailing duty order, the Anti-
Dumping Agreement
 provides Members with the flexibility to adopt  a variety of systems to deal with the 
assessment of antidumping duties.  The United Stat es has adopted a retrospective system of duty 
assessment.  In the US system, an antidumping duty liab ility attaches at the time of entry, but duties are 
not actually assessed at that time.  Once a year (dur ing the anniversary month of the order) interested WT/DS345/R 
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  parties may request a review to determine the amou nt of duties owed on each entry made during the 
previous year.  Between the time that the good is entered and the time that duties are finally assessed 
following this review, importers of merchandise s ubject to antidumping or countervailing duties are 
required to provide (1) a cash deposit in the amount  of the antidumping or countervailing duty rate 
determined in the investigation;  and (2) like impor ters of all goods, a bond to secure against duties, taxes 
or charges that may accrue.  Under its 1991 Bond Gu idelines, CBP provides that the amount of this bond 
should be equal to 10 per cent of the duties, taxes, and fees paid by the importer in the previous 12 
months, or a minimum of $50,000.  In general, an  importer may obtain eith er a bond covering a single 
entry (a single entry bond) or a continuous bond (a bond that provide security for all entries filed by the 
bond principal during the period of time covered by  the bond, usually one year) to satisfy this 
requirement. 
12. In 2003, CBP undertook a review of its overall duty collection program to identify areas in which 
it was experiencing collection difficulties, so as to addr ess significant problems.  As part of that process, 
CBP determined that, over the past few years, de faults on antidumping dut y supplemental bills had 
increased substantially from previous years.  While historically, annual uncollected duties from importers 
have been relatively low (rarely exceeding $10 milli on a year), outstanding antidumping liability for 2004 
alone reached an unprecedented $225 million.  As of  the end of fiscal year 2006, total uncollected 
antidumping duties amounted to $629 million. 
13. Facing a serious and growing noncollection probl em, CBP reconsidered its general continuous 
bond formula, which provides that the minimum continuous bond may be in an amount equal to the greater of $50,000 or ten per cent of the amount of the pr evious year's duties, taxes and fees.  On 9 July 
2004, CBP published on its website a Memorandum announcing an enhanced customs bond amount for 
those continuous bonds that secure the promise to pay all duties finally determined to be due on certain 
merchandise subject to antidumping or countervailing duties (July 2004 Amendment).  The formula set 
forth in the July 2004 Amendment is the USDOC rate  in the antidumping or c ountervailing duty order, or 
the cash deposit rate at the time of entry, multiplie d by the value of subject merchandise that the importer 
entered during the previous year.  The formula in effect ensured that, should the antidumping duty rate 
actually assessed for an importer increase from that de termined during the investigation, CBP would be at 
least partially secured for the difference.  The additi onal bond directive does no t apply to single entry 
bonds. 
14. CBP also determined that the principal entities re sponsible for uncollected duties were importers 
of agriculture/aquaculture merchandise subject to anti dumping duties, and in par ticular importers using 
continuous entry bonds.  Based on CBP's analysis, the noncollection problem with respect to this 
merchandise appeared to be attributable to the fact  that importers of agriculture/aquaculture merchandise 
tended to be undercapitalized, and that by the time final liability was assessed (typically one or more years 
after the goods had entered), the companies were no longe r in operation.  This was coupled with the fact 
that the AD/CVD duties finally assessed on the merc handise often significantly exceeded both the cash 
deposit rate and the ordinary bond amount typically  required for all merchandise under the 1991 Bond 
Guidelines.  CBP was thus unable to collect the unsecured portion of the du ties assessed, resulting in a 
shortfall in CBP collections amounting to hundreds of millions of dollars.  
15. On 1 February 2005, following a determination that certain shrimp  from Thailand, India, and four 
other countries were being dumped in the United States, and a finding by the USITC that the US domestic industry was materially injured by imports of frozen warmwater shrimp, USDOC issued its final 
determination imposing definitive duties on frozen warm water shrimp.  The shrimp order was the first 
order imposed on agriculture/aquaculture merchandi se after issuance of the July 2004 Amendment.  
Significantly, compared to previous agriculture/a quaculture cases, the overall value of shrimp imports 
subject to the order was enormous - in calendar year 2003, imports of subject shrimp reached $2.5 billion. 
 Given the volumes involved, even a modest in crease in the antidumping rate upon assessment could  WT/DS345/R 
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  result in substantial revenue losses if unsecured.  T hus, viewing the shrimp order as an appropriate case 
for application of the additional bond directive, CBP began applying the directive to shrimp importers.  
16. On 10 August 2005, CBP published a clarification to the July 2004 Amendment (the 
"Clarification"), in an effort to improve both im porters' and customs officers' understanding of how the 
additional bond directive would be applied and to improve transparency in the process by which CBP 
identified covered cases and special categories of merchandise. 
17. In a further effort to minimize burdens on importers resulting from the additional bond amount, 
on 24 October 2006, CBP published a Notice in the Federal Register amending its procedure for 
determining bond amounts for covered categories of merchandise.  The October 2006 Notice "represents 
the comprehensive and exclusive statement of the policy and processes expressed in" the July 2004 
Amendment, the 2005 Bond Formulas, and the August 200 5 Clarification.  As described in the October 
2006 Notice, importers are offered the opportunity to submit inform ation on their financial condition 
related to the risk of non-collection for that importer and CBP determines bond amounts based on that 
information, the importer's compliance history and other relevant information available to CBP.  CBP will evaluate this information promptly and provide an  importer-specific bond suffi ciency assessment for the 
importer concerned.  In the absence of this in formation, CBP calculates the bond amount using the 
formulas.  This procedure allows importers to obtai n an individualized determination, rather than a 
determination based upon the formulas.   
18. Since CBP issued the October 2006 Notice, by using the process outlined therein, several 
importers currently subject to the additional bond formulas have requested and received individualized 
bond amounts substantially lower than those CBP in itially required under the ad ditional bond formulas. 
3. The Bond Directive Constitutes "Reasonable Secu rity" Permitted by the Ad Note to GATT 
Article VI:2 and 3 
19. Under the Ad Note, a Member may require that an importer provide "reasonable security" for the 
payment of antidumping or countervailing duties.  As is evident from the cl ause that precedes it, the "final 
determination of the facts" in the Ad Note refers to  the determination of the facts with respect to the 
"payment of anti-dumping or countervailing duty."  In the context of a retrospective duty assessment 
system, the "determination of the facts" referenced in  the Ad Note is the determination that in Article 
9.3.1 of the Anti-Dumping Agreement is referred to as  the "determination of the final liability for payment 
of anti-dumping duties."  
20. Importantly, the Ad Note does not specify a par ticular amount of security that a Member may 
require pending determination of the final liability for payment of anti-dumping duties, but rather provides 
that the amount required must be "reasonable".  U nder India's line of reasoning, no amount of bond that 
exceeds the margin of dumping established in the inve stigation phase of a proceeding can be "reasonable" 
security.  This interpretation of the term "reasonable" lacks a  basis in the text , which, as noted, does not 
specify a particular ceiling for the bond amount othe r than the requirement that it be "reasonable".  
21. This interpretation also does not accord with or dinary customs practice, which provides context 
through the Ad Note's prefatory reference to "man y other cases in customs administration."  A bond is 
security against the prospect of a future liability .  The additional bond amount is intended to secure 
against additional liability that may accrue upon assessment.   As with any insurance policy, to establish 
the amount of security required, one must consider both the amount of potential liability in the event of 
default and the likelihood of default.  With respect to the amount of potential liability, in excess of $2.5 
billion worth of shrimp imports had entered the Un ited States from countries subject to the antidumping 
order during calendar year 2003.  With respect to the risk of default, after facing hundreds of millions of 
dollars in uncollected antidumping and countervail ing duties, CBP determined that importers of 
agriculture/aquaculture merchandise subject to antid umping or countervailing duty liability faced an WT/DS345/R 
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  elevated risk of default, due in part to low capitali zation and high turnover rates in the industry as a whole. 
 Since issuing the directive, CBP published additi onal mechanisms so that any additional bond amount 
required is tailored to individual im porters' risk of default, mechanisms  that even India concedes introduce 
an "indicia of apparent reasonableness" to the directive.  
22. India appears to conflate the requirement of r easonable security contained in the Ad Note with 
Article 7 of the Anti-Dumping Agreement  regarding provisional measures (i.e., measures taken prior to a 
final determination of dumping or s ubsidization).  The bond directive, however, is a security requirement 
imposed after the final determination of dum ping or subsidization, pending "determination of the final 
liability for payment of anti-dumping duties."  It is not a "provisional measure" within the meaning of 
Article 7.  India offers absolutely no legal theory as to how the directive "as such" is inconsistent with the 
Ad Note, and the only evidence it offers in support of either claim relates to the single instance in which 
the directive has been applied – frozen warmwater sh rimp subject to the antidumping orders issued by 
USDOC in February 2005. 
4. Additional Bond Directive Is Not a "Specific Action Against Dumping" or "Subsidy"  
23. As explained above, the additiona l bond directive serves to secure an otherwise unsecured debt 
owed to the US government in the form of assessed antidumping duties that exceed cash deposits.  It was 
issued after CBP identified a serious noncollection prob lem with respect to these duties.  As it would in 
any case in which there exists an un secured liability that presents a risk to the revenue, CBP issued the 
additional directive to provide fo r an increase in the amount of security on certain transactions and 
thereby address the noncollection concern.  The sole reason the directive is designed to secure 
antidumping liability is because the vast majority of unsecured liabili ty that has resulted in noncollection 
happens to be antidumping duty liability.  Of the $589 million in uncollected duties outstanding since 
fiscal year 2003, $513 million (87 per cent) have b een antidumping duties.  The fact that the additional 
bond directive is based on noncollection risk, rath er than the constituent elements of dumping or 
subsidization, is evident in the text of th e directive itself and associated materials.   
24. The sole evidence that India cites in support of its argument that the directive operates "against" 
dumping is either inaccurate or irrelevant.  The additional bond directive does not meet the second prong 
of the test set forth by the Appellate Body under Artic le 18.1:  it is not an action taken "against" dumping 
or subsidization.  First, India claims that the di rective reduced shipments from countries subject to it.  
However, the record simply does not support this assertion.  According to a study prepared by the 
Government Accountability Office (GAO), af ter the petition was filed in late 2003, but before the bond 
directive was announced , the share of imports from Thailand decreased from 30 per cent of total US 
shrimp imports to 15 per cent.  After the bond directive was announced in July 2004, Thailand' s share of 
shrimp imports actually increased significantly, returni ng to approximately 30 per cent.  Based on GAO' s 
analysis, there is no evidence that the bond directive in  fact adversely affected  imports of merchandise 
subject to the antidumping order.  Second, India cit es a number of actions by sureties and other private 
parties as evidence that the directive itself is an  action "against" dumping or  subsidization, including 
sureties' fees and collateral requirements associated with these imports.  As noted previously, CBP does 
not set surety fees, nor does it require importers to post collateral in support of bonds.  CBP is a third 
party beneficiary to bond contracts, which are priv ate contracts negotiated between the surety and the 
importer.  
25. 
In order for India to prevail on its claim that the directive is "action against dumping", it also must 
demonstrate that the directive is not "in accordance with the provisions of GATT 1994."  It has failed to 
do so.  As explained above, the additional bon d amounts required under the directive constitute 
"reasonable security" within the meaning of the Ad No te to GATT Article VI and therefore the directive 
is "in accordance with the provisions of GATT 1994."   WT/DS345/R 
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  26. With respect to India's claim that the direc tive "as such" is an action against dumping or 
subsidization, India again fails to so much as articu late a legal theory as to why the directive "as such" 
breaches US obligations under Artic le 1 and 18.1 of the Anti-Dumping Agreement, and Article 10 and 
32.1 of the SCM Agreement.  Furthermore, India misstates the facts, asserting incorrectly that the 
directive "requires" importers of merchandise subject  to an antidumping or countervailing duty order to 
furnish an enhanced continuous bond.  In fact, the directive does not so require.  
5. India Fails to Demonstrate that Customs Laws and Regulations Are Inconsistent "As Such" 
with Article 18.4 of the Anti-Dumping Agreement, Article 32.5 of the SCM Agreement or Article XVI:4 of the WTO Agreement 
27. Arguing that "[t]he old distinction between 'ma ndatory'  and 'discretionary' under the GATT 1947 
does not survive any longer," Indi a identifies nine laws and regulations in particular as measures 
"inconsistent as such" with Article XVI:4 of the WTO Agreement, Article 18.4 of the Anti-Dumping 
Agreement, and Article 32.5 of the SCM Agreement.  India argues that these laws and regulations create 
"the very existence of discretion" to act in a WTO-in consistent manner, and ther efore are impermissible.  
India's argument, however, does not accord with the text  of the Agreement, is at odds with a long line of 
panel and Appellate Body reports, and if accepted, would mean that a single WTO-inconsistent 
administrative act could serve as the basis for fi nding a Member's entire legal system to be WTO-
inconsistent. 
28. As the complaining party to this proceeding, India bears the burden of presenting evidence and 
arguments sufficient to establish that  the customs laws and regulations it cites are inconsistent with the 
provisions of the WTO Agreements that it invokes.  India, however, provides no support for its claims in 
this regard.  Under India's logic, any law granting "authority" to collect revenue – ranging from Article 8 
of the United States Constitution to the 1789 Act of Congress establishing the US Treasury Department – would be implicated in this dispute, as they also "authorize" CBP to secure the revenue, including through 
bonds.    
29. Article XVI:4 means that, if a Member's law, regulation, or administrative procedure does not 
conform with its obligations as provided in the annexed Agreements
, that Member has an affirmative 
obligation to bring it into conformity.  Conversely, however, if those laws, regulations and administrative procedures conform with its obligations, it need undert ake no further action.  Thus, the ordinary meaning 
of Article XVI:4 is that a law, regulation or admini strative procedure is not inconsistent with Article 
XVI:4 unless it is also inconsistent with a separate obligation of a covered agreement.  The laws and 
regulations of the United States are not inconsistent with any such provision – nor does India so assert – 
and are therefore consistent with Article XVI:4.  
30. India further argues that it should be permitted to challenge the measure s at issue "as such" 
because if it is unable to do so "it will only lead to 'm ultiplicity of litigation' in future."  The prospect of 
having to present an argument in the future does not, however, excuse India from proving its case in the 
instant proceeding.  A measure that is not itself in consistent with a WTO provision may not be found in 
breach simply because at some date in the futu re it may be relied up as "authority" for a WTO-
inconsistent act.  The distinction between ma ndatory and discretionary action in GATT/WTO 
jurisprudence was a basic element of the practice of  the GATT 1947 Contracting Parties in interpreting 
the GATT 1947, and remains a basic element of the practice of WTO Members in interpreting the WTO 
Agreement.  
6. The Additional Bond Directive Is Not Inconsistent with GATT Article X:3(a) 
31. India has failed to establish a breach of Article X.   Even under India's theory that GATT Article X 
applies, the evidence demonstrates that CBP administ ers the bond directive in a "uniform, impartial and 
reasonable"  manner.  The directive contains vari ous criteria for identifying importers of merchandise WT/DS345/R 
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  with elevated default risk, and CBP applies these crite ria uniformly.  "Impartial" means "[n]ot partial; not 
favouring one party or side more than another; un prejudiced, unbiased; fair."  Treatment in an unbiased 
and fair manner is distinguishable from identical tr eatment.  Using the criteria described above, CBP 
determined that importers of shrimp were particular ly risky – the potential losses were significant, as was 
the likelihood of default.  Insofar as CBP treated sh rimp importers differently from others, it did so based 
on neutral, "impartial" criteria.  "Reasonable" mean s "[i]n accordance with re ason; not irrational or 
absurd."  Here, CBP's reas on for applying the additional bond directive to shrimp subject to the February 
2005 orders is clear:  it faced $2 billion in imports of  shrimp newly subject to an antidumping order, had 
experienced $225 million in defaults on similar merc handise when antidumping orders were imposed in 
the past, and believed that, due to low capitalization rat es in the industry and other factors, these imports 
posed a serious risk to the revenue.  Thus, India fails  to demonstrate that the additional bond directive 
represents unreasonable, partial, or nonuniform administ ration of US customs laws, within the meaning of 
GATT Article X. 
7. The Additional Bond Directive Does not Breach GATT Article XI 
32. With respect to GATT Article XI, as was the case with the bond measure at issue in Dominican 
Republic – Cigarettes , the bond directive does not prevent importers from importing shrimp into the 
United States. The directive does not mandate an in creased bond amount – as noted previously, importers 
can obtain individual bond determinations and, de pending on their ability to pay and history of 
compliance with US customs laws and regulations , may not be required to obtain a higher bond.  
Furthermore, even those importers that have not demo nstrated an ability to pay or have not complied with 
US customs laws in the past are ab le to import even without particip ating in the process outlined in the 
directive or providing additional bond amounts.  
8. The Directive Is Not Inconsistent with GATT Article II 
33. The additional bond directive itself does not constit ute a "duty" (antidumping or otherwise).  
Likewise, the additional bond directive does not constitute an "other charge."  First, CBP does not charge 
for the bonds, nor does it even require that security take  the form of the additional bond.  Second, India's 
argument that such bonds are "other charges" woul d mean that Members may not maintain bonds as a 
means to secure importers'  obligations unless th e bonds are specifically included in a Member' s 
schedule.  However, as noted above, customs bonds are specifically contemplated in various WTO 
provisions, including the Ad Note to Article VI and Ar ticle 13 of the Customs Valuation Agreement.  This 
context supports the conclusion that bonds are a tool that is generally available to the Members, and not 
simply to those Members which have scheduled th em.  For this reason as well, bonding requirements are 
not an "other charge."  
9. The Directive Is Not Inconsistent with GATT Article XIII 
34. The directive does not restrict the quantity of shri mp that may be imported into the United States, 
and thus does not constitute a "quantitative restricti on" within the meaning of GATT Article XIII.  India 
provides no support for its assertion that the United States has breached Article XIII, other than its 
argument that the directive "severely restricts imports " into the United States of subject merchandise.  
This statement is not a sufficient basis to conclude that  the directive is a "quantitative restriction", and, as 
noted previously, is simply incorrect.  
10. The Directive Is Not "As Such"  Inconsistent with GATT Articles I, II or XI 
35. Even more dramatically than with respect to its  other "as such"  claims, with respect to GATT 
Articles I, II, and XI, India offers absolutely no le gal theory, evidence, or even argumentation to explain 
how the directive "as such" is inconsistent with these provisions.  India has not even attempted to meet, let 
alone met, its burden with respect to its "as such"  claims under GATT Articles I, II, and XI.  WT/DS345/R 
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  11. The United States Did Not Act Inconsistently with Article 18.5 of the Anti-Dumping 
Agreement or Article 32.6 of the SCM Agree ment by Not Notifying the Amended Bond 
Directive 
36. The bond directive modified CBP's 1991 Bond Guidelines regarding bond amounts for all 
merchandise.  That directive is not a "law or regulation" relevant to the Anti-Dumping or SCM 
Agreements, nor does it relate to the admini stration of those laws and regulations.  
12. The Additional Bond Directive Is Justified by GATT Article XX(d) 
37. As the United States has demonstr ated, the additional bond directive is not inconsistent with US 
WTO obligations.  Article XX of the GATT 1994 makes this even clearer.  
38. The additional bond directive is "necessary to secure compliance" with US antidumping and 
countervailing duty assessment laws, in particular  19 USC. 1673e(a)(1) governing the assessment of 
antidumping duties and general customs and regulations  requiring the payment of duties owed to the US 
Treasury.  The fact that the directive and its applica tion to shrimp secures compliance with this obligation 
and general customs laws and regula tions requiring payment of duties owed  to the US Treasury is evident 
on its face.  The directive is "necessary" to secure compliance with US laws and regulations.  Revenue 
collection is among the most fundamental responsib ilities of governments.  As explained above, the 
directive secures an otherwise unsecured liability in  the form of additional antidumping duties owed upon 
assessment that exceed cash deposits, and thus permits collection of revenue that in the past has been 
subject to unprecedented default.  
39. The additional bond directive also meets the requi rements of the chapeau to Article XX, as it has 
not been applied in a manner that would constitute a "d isguised restriction on international trade" or "a 
means of arbitrary or unjustifiable discrimination betw een countries where the same conditions prevail."    WT/DS345/R 
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  ANNEX A - 2 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF INDIA 
 
(30 March 2007) 
 
1. Introduction 
1. In this dispute, India is challenging the requireme nt imposed by the United States on importers of 
certain designated merchandise subject to antidumping or countervailing measures that they must post, in 
addition to the bonds or cash deposits required under such measures, a bond for an amount calculated at 
100 per cent of the antidumping or c ountervailing duties payable on their total imports during the previous 
one year (the "Enhanced Bond Requirement"). 
2. The measure at issue in this dispute includes the instruments issued by the United States Customs 
and Border Protection Service ("US Customs") that provide for the imposition of the Enhanced Bond Requirement and describe its operati on (the "Amended Bond Directive") a nd the laws and regulations that 
authorize US Customs to impose the Enhanced Bond Requirement. 
2. Legal Argument 
3. India considers that the Amended Bond Directive and the laws and regulations that authorize it 
are not consistent, both as such and as applied to impor ts of shrimp subject to antidumping duties, with 
the obligations of the United States under the provi sions of the WTO Agreement on Implementation of 
Article VI of the General Agreem ent on Tariffs and Trade 1994 (the "Anti-Dumping Agreement"), of the 
WTO Agreement on Subsidies and Countervailing Measu res (the "Subsidies Agreement") and of the 
General Agreement on Tariffs and Trade, 1994 (the "GATT 1994").   
(a) The Amended Bond Directive provides for specific action against dumping and subsidization that 
is inconsistent as such with the provisions of  the GATT 1994 as interpreted by the Anti-Dumping 
Agreement and the Subsidies Agreement, respectively. 
4. The Enhanced Bond Requirement constitutes an impermissible "specific action" against dumping 
and subsidization that is inconsistent with the obliga tions of the United States under Articles 1 and 18.1 of 
the Anti-Dumping Agreement  and Articles 10 and 32.1 of the Subsidies Agreement.  According to the 
Appellate Body ruling in US – CDSOA , a three-step analysis is necessary to determine whether a measure 
constitutes impermissible specific action against dumpi ng or subsidization.  The two basic conditions 
precedent are that the measure must be (a) "specifi c" to dumping or subsidization, and (b) "against" 
dumping or subsidization.  If these two conditions ar e met, it is necessary to determine whether the 
measure has been taken in accordance with the provisions of Article VI of the GATT 1994 as interpreted 
by the provisions of the Anti-Dumping Agreement  and the Subsidies Agreement. 
5. The Enhanced Bond Requirement is "specific" to  dumping or subsidiza tion because the Amended 
Bond Directive expressly states that it applies only to importers of designated merchandise that is subject 
to antidumping or countervailing duties, i.e., when all the conditions for imposition of antidumping or 
countervailing duties have been fulfilled.  As  the United States itself has admitted in US- CDSOA , a 
measure such as the Enhanced Bond Requirement th at " … imposes … liability on importers/producers/ 
exporters when dumping or subsidi zation is found … " will constitute "s pecific action" with respect to 
dumping and subsidization.  In ad dition, one important element of the formula for calculating the bond 
liability amount is the amount of antidumping or countervailing duties owed based on the dumping 
margin or the individual net subsidy rate.  Therefore,  there is clearly an inextricable link between the 
Enhanced Bond Requirement and the constituen t elements of dumping or of a subsidy.  WT/DS345/R 
 Page A-11 
 
 
  6. Moreover, one of the stated purposes of the E nhanced Bond Requirement is to ensure that 
antidumping and countervailing duties are collected for payment to domestic industry under the US 
Continued Dumping and Subsidy Offset Act (the "CDS OA"), which the Appellate Body has found to be a 
"specific action" against dumping or subsidization.   Regulations or administrative procedures by US 
Customs to implement the CDSOA such as the Ame nded Bond Directive also, therefore, constitute 
specific action against dumping or subsidization. 
7. Further, the Enhanced Bond Requirement also cl early acts "against" dumping and subsidization.  
It has a serious, adverse impact on importers and, therefore, on dumping or subsidization.  The demand of 
100 per cent collateral by sureties acceptable to US  Customs to issue enhanced bonds and high bond 
premiums and other charges associated with providi ng the collateral impose a heavy burden on importers. 
 The bonds initially posted by importers inevitably ge t exhausted or saturated well before the first 
administrative review and liquidation of entries are completed.  As a result, importers are forced to post additional, enhanced bonds.  Sure ties again subject them to additio nal demands for collateral and high 
bond premiums, which results in further charges and further depletion of their capital and credit.  Thus, as found by the US Court of International Trade, importe rs are forced to incur serious losses in profits and 
business opportunities.  This in turn has a serious deterr ent effect on exports of the merchandise subject to 
the Enhanced Bond Requirement as is evident from the sharp drop between 2005 and 2006 in the quantity 
and value of shrimp exported from India as well as  in the total number of exporters from India. 
8. There are further disincentives that distort the structure of the Anti-Dumping Agreement  and the 
Subsidies Agreement  as is evident from the agreements betw een exporters of shrimp subject to 
antidumping duties and a group of US domestic shrimp producers known as the "Southern Shrimp 
Alliance".  Exporters are forced to forgo their right under US law to have their dumping margins 
determined in an administrative review because li quidation is ordered immedi ately upon termination of 
administrative review at the rate set out in the Orde r.  In addition, the linkage between agreeing not to 
import the subject shrimp and being exempted from the Enhanced Bond Requirement in the agreements 
entered into by US Customs and importers of shrimp confirms that it has the effect of dissuading imports 
of dumped products into the United States.  It cannot be disputed, therefore, that the Enhanced Bond 
Requirement has a serious adverse bear ing on dumping and subsidization. 
9. The last step in the analysis is to determ ine whether the Enhanced Bond Requirement accords 
with the requirements of Article VI of the GATT 1994 as interpreted by the provisions of the Anti-
Dumping Agreement and the Subsidies Agreement.  In US – AD Act of 1916 , the Appellate Body found 
that the Anti-Dumping Agreement limits the permissi ble responses to dumping to (a) definitive anti-
dumping duties, (b) provisional measures and (c) price undertakings.  Similarly, in US – CDSOA , the 
Appellate Body found that there are only four perm issible responses to subsidization:  (i) definitive 
countervailing duties; (ii) provisiona l measures; (iii) price undertakings; and (iv) multilaterally sanctioned 
countermeasures under the dispute settlement system. 
10. In this case, by definition, the Enhanced Bond Requirement does not involve the collection of a 
definitive (antidumping or countervailing) duty or a pr ice undertaking by exporters.  It is also not a 
provisional measure to the extent that it is applie d (a) in addition to, and on top of, the provisional 
measures contemplated by Article 7 of the Anti-Dumping Agreement  and by Article 17 of the Subsidies 
Agreement, and (b) even after the provisional measure s contemplated by these provisions have run their 
course and the decision to impose definitive duties h as been taken under Article 9.1 of the Anti-Dumping 
Agreement  or Article 19.2 of the Subsidies Agreement,  as the case may be.  Even otherwise, the 
Enhanced Bond Requirement is clearly inconsistent with the requirements of Articles 7 and 9 of the Anti-
Dumping Agreement  and of Articles 17 and 19 of the Subsidies Agreement.  
11. Accordingly, it is clear that the Enhanced Bond  Requirement is inconsistent as such with the 
obligations of the United States (a) under Article VI :2 of the GATT 1994 and Articles 1 and 18.1 of the WT/DS345/R 
Page A-12  
 
  Anti-Dumping Agreement; and (b) under Article VI:3  of the GATT 1994 and Articles 10 and 32.1 of the 
Subsidies Agreement. 
12. Further, the United States cannot rely on footnote 24 to the Anti-Dumping Agreement  or on 
footnote 56 to the Subsidies Agreement  to justify the Enhanced Bond Re quirement under other provisions 
of the GATT 1994.  Footnote 24 qualifies Article 18.1 of the Anti-Dumping Agreement  just as footnote 
56 qualifies Article 32.1 of the Subsidies Agreement  by stating that neither provision is " … intended to 
preclude action under other relevant provis ions of GATT 1994, as appropriate."  In US – CDSOA , the 
Appellate Body clarified that these provisions only "…  confirm what is implicit in Article 18.1 of the 
Anti-Dumping Agreement and in Article 32.1 of the SCM Agreement , namely, that an action that is not 
'specific' within the meaning of Article 18.1 of th e Anti-Dumping Agreement and of Article 32.1 of the 
SCM Agreement , but is nevertheless related to dumping or s ubsidization, is not prohibited by Article 18.1 
of the Anti-Dumping Agreement or Article 32.1 of the SCM Agreement ".  Therefore, it is clear that a 
measure that constitutes specific action against dumping or subsidization cannot be  justified under either 
footnote 24 to the Anti-Dumping Agreement  or footnote 56 to the Subsidies Agreement.  The Enhanced 
Bond Requirement clearly constitutes specific action ag ainst dumping and subsidi zation.  Accordingly, 
the United States cannot justify it as being permissible under any other provision of the GATT 1994. 
(b) The Enhanced Bond Requirement is also inconsiste nt with the provisions of Article VI:2 of the 
GATT 1994 and Articles 1 and 18 of the Anti-Dump ing Agreement as applied to importers of 
shrimp from India. 
13. The application of the Enhanced Bond Require ment has had a serious adverse impact on 
importers of shrimp from India.  After many US importers ceased to import shrimp from India, Indian 
exporters were forced to export shrimp either on a duty-paid basis or were forced to register themselves as 
importers of record with US Customs.  In the mont h of February 2005, the US  Customs issued notices to 
several importers that their existing continuous bon ds were insufficient and directed them to post 
enhanced continuous bonds ranging from $1 million to $5 million.  US Customs made it clear that the 
provisions in the Clarification and the Notice relati ng to modification of the bonds to account for the 
circumstances of individual importers will not resu lt in discharging enhanced bonds already previously 
furnished to US Customs.  Further, the bonds were  required to be given only by surety companies 
approved by the US Treasury in the United States, which demanded 100 per cent collateral from their banks in India.  US Customs have also detained  shipments of imported shrimp from India for not 
complying with the Enhanced Bond Requirement.  For these reasons and thos e set out above in the 
context of India's "as such" claim under Ar ticle 18.1 of the Anti-Dumping Agreement  and Article 32.1 of 
the Subsidies Agreement, the Enhanced Bond Requireme nt is also inconsistent with the provisions of 
Article VI:2 of the GATT 1994 and Articles 1 and 18.1 of the Anti-Dumping Agreement  as applied to 
importers of shrimp from India. 
(c) The Amended Bond Directive and the laws and regul ations of the United States that authorize it 
are inconsistent with the obligations of the United States under Article XVI:4 of the Marrakesh 
Agreement Establishing the World Trade Organiza tion (the "WTO Agreement"), Article 18.4 of 
the Anti-Dumping Agreement and Article  32.5 of the Subsidies Agreement. 
14. US Customs is authorized to impose the Enhanced Bond Requirement under, among other 
provisions, 19 USC. § 1623(a), 19 C.F.R. § 113.1 and 19 C.F.R. § 113.13.  India considers that these laws and regulations together with the Am ended Bond Directive are inconsistent as such with the obligations of 
the United States under Article XVI:4 of the WTO Agreement, Article 18.4 of the Anti-Dumping 
Agreement  and Article 32.5 of the Subsidies Agreement  because the Enhanced Bond Requirement 
constitutes "specific action" against dumping and subs idization that does not fall within any of the 
permitted responses to dumping under the Anti-Dumping Agreement  or to subsidization under the 
Subsidies Agreement.  The imposition of the Enhan ced Bond Requirement is also inconsistent with 
various other provisions of the Anti-Dumping Agreement  and of the Subsidies Agreement.  WT/DS345/R 
 Page A-13 
 
 
  15. Moreover, in the application of the Enhanced B ond Requirement to imports of shrimp from India, 
US Customs has acted in an inflexible manner, re quiring every importer of shrimp to furnish a bond 
calculated at exactly 100 per cent of the antidumpi ng duties payable on imports of shrimp during the 
previous 12-month period.  Even assuming that bond am ounts are lowered in future pursuant to the notice 
published by US Customs on 24 October 2006 in the Federal Register entitled "Monetary Guidelines for 
Setting Bond Amounts for Importations Subject to Enha nced Bonding Requirements" (the "Notice"), it 
still contains norms or rules that Port Directors of  US Customs are required to apply while determining 
bond liability amounts for importers subject to the Enha nced Bond Requirement.  To the extent that this 
liability is in addition to the provisional measure s permissible under Article 7 of the Anti-Dumping 
Agreement  and Article 17 of the Subsidies Agreement  or definitive duties (in the form of cash deposits) 
permissible under Article 9 of the Anti-Dumping Agreement  and Article 19 of the Subsidies Agreement, 
it is clearly inconsistent with Artic le 18.1 of the Anti-Dumping Agreement  and Article 32.1 of the 
Subsidies Agreement.  Therefore, the Amended Bond Directive contains normative rules of conduct 
enforced by US Customs that are inconsistent with  the requirements of Article 18.4 of the Anti-Dumping 
Agreement  and Article 32.5 of the Subsidies Agreement. 
16. The old distinction between "mandatory" and "discretionary" under the GATT 1947 does not 
survive any longer.  The very existence of discre tion to impose measures that represent impermissible 
responses to dumping or subsidization renders such pr ovisions in the laws, regulations and administrative 
procedures of Members inconsistent with their ob ligations under Article 18.4 of the Anti-Dumping 
Agreement  and Article 32.5 of the Subsidies Agreement.  This  is also a salutary approach in light of the 
obligation to perform treaty obligations "in good faith". 
17. In US – Sunset Policy Bulletin , the Appellate Body noted that "… allowing claims against 
measures, as such, serves the purpo se of preventing future disputes by allowing the root of WTO-
inconsistent behaviour to be eliminated."  In the circumstances, India submits that the Panel should find 
that the Amended Bond Directive and the underlying st atutory provisions and regulations of the United 
States that authorize it are inconsistent as such with  Article XVI:4 of the WTO Agreement, Article 18.4 of 
the Anti-Dumping Agreement and Article  32.5 of the Subsidies Agreement. 
(d) The Enhanced Bond Requirement is inconsistent as such with Articles 9.1, 9.2, 9.3 and 9.3.1 of 
the Anti-Dumping Agreement and with Articles 19.2, 19.3 and 19.4 of the Subsidies Agreement.  It is also inconsistent with Articles 9.1, 9.2,  9.3 and 9.3.1 of the Anti-Dumping Agreement as 
applied to importers of shrimp from India. 
18. To the extent that the US seeks to justify the Enhanced Bond Requirement as a measure 
consistent with Article 9 of the Anti-Dumping Agreement  or Article 19 of the Subsidies Agreement, it is 
necessary to evaluate its consistency with these provisions for purposes of Article 18.1 of the Anti-
Dumping Agreement  and of Article 32.1 of the Subsidies Agreement. 
19. Under Article 9.2 of the Anti-Dumping Agreement  
(or under Article 19.3 of the Subsidies 
Agreement), the only possible measure  that may be taken as a result of the decision to impose definitive 
duties under Article 9.1 of the Anti-Dumping Agreement  (or under Article 19.2 of the Subsidies 
Agreement) is that duties shall be collected in the "a ppropriate amounts".  Further, under Article 9.3 of the 
Anti-Dumping Agreement  (or under Article 19.4 of the Subsidies Agreement), the amount of the duty 
shall not exceed the "margin of dumping" (or the "amount  of the subsidy found to exist").  Therefore, it is 
clearly impermissible to demand an enhanced, continu ous bond in addition to the duties collected in an 
amount equal to the dumping margin or the amount of the subsidy found to exist. 
20. The United States cannot justify the Enhanced Bond Requirement on the basis that it follows the 
retrospective system of assessment referred to in  Article 9.3.1 of the Anti-Dumping Agreement.  
Article 9.3.1 clarifies that the "final liability" for antidumping duties will be fixed at the stage of 
administrative review and that any refund must be made normally within a period of 90 days from the WT/DS345/R 
Page A-14  
 
  determination of the final liability.  The terms "final  liability" and "refund" in Article 9.3.1 of the Anti-
Dumping Agreement  have the following implications: 
First: There must be a prior liability that is not "fin al", which can only refer to the liability fixed at 
the time of the decision to impose definitive duties in Article 9.1.  That some liability is fixed at the time of the Article 9.1 imposition decision is corroborated by the requirement in Article 
12.2.2 that a public notice of the final dete rmination must include the dumping margins 
established under Article 2. 
Second: It is permissible under Article 9.3.1 for the United States to collect higher antidumping duties 
after the administrative review under Article 9.3.1 than were collected under Article 9.2 
consequent upon the imposition deci sion taken under Article 9.1. 
Third: Article 9.3.1 could not have contemplat ed a refund unless some amounts have already been 
collected prior to the determination of the final liability.  However, the duties may be collected 
only "in the appropriate amounts" consequent upon the imposition decision in Article 9.1. 
Fourth: The absence of any referen ce to a discharge of bonds in Article 9.3.1 (unlike in Articles 10.4 
and 10.5 of the Anti-Dumping Agreement), at least suggests, if not confirms, that no measure 
other than the collection of definitive anti dumping duties (or cash deposits) in "appropriate 
amounts" is contemplated after the imposition decision in Article 9.1 and prior to the 
determination of final liability in Article 9.3.1. 
 Even by implication, however, Article 9.3.1 of the Anti-Dumping Agreement does not confer any 
special right, either expressly or impliedly, on Members that choose to follow the retrospective 
assessment system to take any measure after the imposition decision in Article 9.1 of the Anti-Dumping 
Agreement  other than to collect antidumping duties. 
21. Similarly, based on the provisions of Articles 19.2, 19.3 and 19.4 of the Subsidies Agreement, it 
is clear that, after the decision to impose counterva iling duties referred to in Article 19.2, it is not 
permissible to take any measure other than to coll ect countervailing duties not in excess of the amount of 
the subsidy found to exist.  Thus, the Enhanced B ond Requirement is clearly inconsistent with Articles 
19.2, 19.3 and 19.4 of the Subsidies Agreement. 
22. The ordering of the paragraphs of Ar ticle 9 of the Anti-Dumping Agreement  makes it clear that 
Articles 9.1 and 9.2 also govern the retrospectiv e assessment system.  The imposition decision in 
Article 9.1 must follow the final determination.  The only permissible measure thereafter is the collection of antidumping duties under Article 9.2 "in the appropriate amounts".  That Article 9.3 and Article 9.3.1 follow after Article 9.2 does not mean that some additi onal right to take security  exists in the case of 
retrospective assessment systems.  In fact, the first sentence of Article 9.3 prohibiting the collection of 
antidumping duties in excess of the dumping margin clearly qualifies the "appropriate amounts" in which 
antidumping duties may be collected under Article 9.2. 
23. Moreover, it is important to keep in mind the po licy consequences of conced ing any right to take 
enhanced, continuous bonds in ad dition to provisional measures or definitive measures that are not 
governed by the strict disciplines contained in the Anti-Dumping Agreement  or the Subsidies Agreement. 
 Members may well demand a continuous bond amounti ng to 200 per cent or 300 per cent of antidumping 
or countervailing duties payable on imports at the rate specified in the final affirmative determination for 
the immediately preceding one-year period.  WT/DS345/R 
 Page A-15 
 
 
  24. For the reasons stated above, the Enhanced Bond Requirement is also clearly inconsistent with the 
provisions of Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement  as applied to importers of 
shrimp from India. 
(e) The Enhanced Bond Requirement is inconsistent as such with the requirements of Article 7 of the 
Anti-Dumping Agreement and of Article 17 of the Su bsidies Agreement.  It is also inconsistent 
with Article 7 of the Anti-Dumping Agreement as applied to importers of shrimp from India. 
25. India submits that the Enhanced Bond Requirement is inconsistent as such with Article 7 of the 
Anti-Dumping Agreement  and with Article 17 of the Subsidies Agreement.  
26. Under Article 7.1(iii) of the Anti-Dumping Agreement  and Article 17.1(c) of the Subsidies 
Agreement, it is necessary that "the authorities concer ned judge such measures necessary to prevent injury 
being caused during the investigation".  The stat ed reasons for introducing the Enhanced Bond 
Requirement, however, do not mention injury being caused  during the investigation at all and focus rather 
on protecting revenue and ensuring that payments are ma de to domestic industry pursuant to the CDSOA. 
 Therefore, if the Enhanced Bond Requirement is a pr ovisional measure, it is clearly inconsistent as such 
with Article 7.1(iii) of the Anti-Dumping Agreement  and Article 17.1(c) of the Subsidies Agreement. 
27. The Enhanced Bond Requirement is also incons istent with Article 7.2 of the Anti-Dumping 
Agreement  and with Article 17.2 of the Subsidies Agreement.  A provisional measure, whether in the 
form of a cash deposit or a bond, may not be for an  amount in excess of the "provisionally estimated 
margin of dumping" or the "provisionally calculated amount of subsidization", as the case may be.  
However, under the Enhanced Bond Requirement, im porters are required to provide an enhanced, 
continuous bond in an amount equa l to the antidumping duties or countervailing duties payable on total 
imports for the previous year at the applicable rate specified in the preliminary affirmative determination 
rather than a single-entry bond for the amount of  antidumping or countervailing duty owed on each 
shipment.  Combined with the fact that provisional measures are never permissible for a period in excess 
of six months, the value of the enhanced bond for a year's worth of imports considerably exceeds the 
amount of the provisionally estimated dumping marg in or the provisionally calculated amount of 
subsidization.  Thus, if the Enhanced Bond Requireme nt is a provisional measure, it is also clearly 
inconsistent as such with the requirements of Article 7.2 of the Anti-Dumping Agreement  and Article 17.2 
of the Subsidies Agreement. 
28. Moreover, Article 7.4 of the Anti-Dumping Agreement  provides for limiting a provisional 
measure to a period "not exceeding four months or , on the decision of the authorities concerned, upon 
request by exporters … to a period not exceeding si x months" just as Article 17.4 of the Subsidies 
Agreement  provides for limiting it to "a period not exceeding f our months".  Accordingly, to the extent 
that the Enhanced Bond Requirement on importers is introduced or remains in place on any date after six 
months from the date on which provisional measures are first imposed in an antidumping case or after 
four months in the case of a countervailing duty case,  the Enhanced Bond Requirement constitutes a clear 
inconsistency as such with the provisions of  Article 7.4 of the Anti-Dumping Agreement  and of Article 
17.4 of the Subsidies Agreement. 
29. For the same reasons, the Enhanced Bond Requirement  is also inconsistent with the provisions of 
Articles 7.1, 7.2 and 7.4 of the Anti-Dumping Agreement  as applied to importers of shrimp from India. 
(f) The Enhanced Bond Requirement is inconsistent with the Ad Note both as such and as applied to 
imports of shrimp from India. 
30. India considers that the United States cannot rely upon the Note Ad Paragraphs 1 and 2 of Article 
VI of the GATT 1994 (the "Ad Note") to justify the Enhanced Bond Requirement independently of 
Article 7 of the Anti-Dumping Agreement or Article 17 of the Subsidies Agreement  to justify the WT/DS345/R 
Page A-16  
 
  Enhanced Bond Requirement.  In fact, it is clear that the "reasonable security (bond or cash deposit)" 
referred to in the Ad Note is th e same as the provisional measures referred to in Article 7 of the Anti-
Dumping Agreement  and in Article 17 of the Subsidies Agreement  and that these provisions merely 
elaborate upon the provisions of the Ad Note and impo se further disciplines in this regard.  The final 
determination of the facts referred to in the Ad Note  can only be at the stage of the decision to impose 
definitive antidumping duties under Article 9.1 of the Anti-Dumping Agreement  and under Article 19.2 of 
the Subsidies Agreement.  Thus, the Ad Note clearly does not constitute a "general exception" in Article 
VI of the GATT 1994 that operates independently of  the disciplines in Articles 7 and 9 of the Anti-
Dumping Agreement  and in Articles 17 and 19 of the Subsidies Agreement. 
31. Further, the requirement in the Ad  Note that any security taken must be "reasonable" is clearly not 
satisfied in the case of the Enhanced Bond Requireme nt because the enhanced, continuous bond must be 
furnished in addition to making cash deposits at the dut y rates specified in the Order.  Therefore, the 
Enhanced Bond Requirement imposed by the United States is per se  unreasonable. 
32. In addition, the Enhanced Bond Requirement is  clearly not reasonable because it was motivated 
by political considerations.  Further, the designation of products by US Customs is also arbitrary and 
capricious.  The Amended Bond Directive does not c ite a single reason why there is a likelihood of a 
higher rate of default in collection of antidumping duties on imports of shrimp as opposed to imports of 
other agricultural or aquacultural merchandise.  As im ports of shrimp subject to antidumping duties were 
not liquidated, there was no evidence of default by shri mp importers at the relevant time.  Further, US 
Customs at no time has offered any explanation of wh y importers of crawfish or garlic from China were 
not subject to the Enhanced Bond Requirement.   
33. It is clear also that US Customs does not engage in  any analysis of the likelihood of an increase in 
dumping margins which is the ostensible justifica tion for applying the Enhanced Bond Requirement to 
merchandise subject to antidumping or countervailing duties. 
34. Moreover, the extent of the security demanded under the Enhanced Bond Requirement is clearly 
excessive.  As the US Court of International Trade found, the effects of imposition of the Enhanced Bond 
Requirement include (a) a serious depletion of the cr edit of importers caused by the need to provide 
collateral for the initial bond amount as well as subse quent increases in the bond amount to account for 
delays in liquidation, (b) dropping or scaling back on product lines imported into the United States, (c) 
preventing the addition of new product lines, (d) causing th e loss of spot sales, (e) preventing participation 
in bids from major supermarket chains, (g) forcing impor ts of shrimp on a delivered, duty-paid basis, thus 
reducing profit margins, (h) adversely affecting customer  and supplier relationships, (i) inability to fulfil  
contractual orders because there are no substitutes for the merchandise subject to the antidumping or 
countervailing duty orders.  The extent of the harm  suffered by shrimp importers as a result of the 
Enhanced Bond Requirement is clear evidence of its unreasonableness. 
35. In fact, in the case of shrimp, until the publicati on of the Notice in the Federal Register, US 
Customs certainly did not take account of the financ ial soundness of individual importers at all, which 
presumably should have been its primary concern in imposing the Enhanced Bond Requirement.  This is 
an obvious indicator of the extreme unreasonableness both in conception and in administration of the 
Enhanced Bond Requirement.  Although US Custom s now claims that it will take into account the 
financial soundness of individual importers in fixing th e amount of the enhanced bond, they have also 
clarified that they will not apply this analysis pendi ng liquidation to importers of shrimp to reduce the 
value of enhanced, continuous bonds already furnished. 
36. Accordingly, India considers that the Enhanced  Bond Requirement is inconsistent with the 
provisions of the Ad Note both as such and as applied to shrimp.  WT/DS345/R 
 Page A-17 
 
 
  (g) The United States has acted inconsistently with  Article 18.5 of the Anti-Dumping Agreement and 
with Article 32.6 of the Subsidies Agreement by not notifying the Amended Bond Directive. 
37. The Enhanced Bond Requirement clearly represents a fundamental change in the administration 
by the United States of its laws and regulati ons relevant to the Anti-Dumping Agreement  and to the 
Subsidies Agreement.  Nevertheless, the United St ates has not informed the Committee on Anti-Dumping 
Practices or the Committee on Subsidies and Countervailing Measures about the Amended Bond 
Directive.  India considers, therefore, that the Unite d States has acted inconsistently with its obligations 
under Article 18.5 of the Anti-Dumping Agreement  and under Article 32.6 of the Subsidies Agreement. 
(h) The Enhanced Bond Requirement is inconsiste nt with Article X:3(a) of the GATT 1994 as 
applied to imports of shrimp from India. 
38. India submits that the Enhanced Bond Requirement is inconsistent with Article X:3(a) as applied 
to shrimp because it has not been administered in a uniform, impartial and reas onable manner as discussed 
above.  It has been applied only to importers of sh rimp from the six countries subject to the Antidumping 
Order in the shrimp case and not to other importers .  Therefore, the Enhanced Bond Requirement is 
clearly inconsistent with the requirements of Article X:3(a) as applied to shrimp. 
(i) The Enhanced Bond Requirement is inconsistent with Articles I and II:1(a) and II:1(b) of the 
GATT 1994 as such and as applied to imports of shrimp from India. 
39. To the extent that the Enhanced Bond Requireme nt can be characterized legally as involving 
duties, taxes or other charges, India submits that it is inconsistent with the obligations of the United States 
under Articles I:1 and II:1(a) and II:1(b) of the GA TT 1994.  The Enhanced Bond Requirement certainly 
involves charges by US surety comp anies, is "a method of levying … duties", and represents a "rule" and 
"formality" in connection with importation.  Therefore,  it is clearly subject to the most-favoured nation 
obligation in Article I:1 of the GATT 1994.  To the ex tent that the Enhanced Bond Requirement is applied 
in a discriminatory manner, therefore, to only those Members that are subject to antidumping or countervailing duties in respect of certain designated merchandise, it is clearly inconsistent with the 
obligations of the United States under Article I:1 of the GATT 1994. 
40. Again, to the extent that the Enhanced Bond Re quirement necessarily involves payment of (high) 
charges to US surety companie s, it constitutes an inconsiste ncy with the second sentence of 
Article II:1(b), which provides that the "… products [d escribed in Part I of the Schedule] relating to any 
[Member] shall also be exempt from all other … ch arges 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 mandatorily required to be imposed thereafter by legisl ation in force in the importing territory on that 
date." 
41. For the reasons stated above, the Enhanced Bond Requi rement as applied to shrimp is inconsistent 
with the provisions of Article I:1 and the sec ond sentence of Article II:1(b) of the GATT 1994. 
42. The duties associated with the Enhanced Bond Requirement are not antidumping or 
countervailing duties authorized under the provision s of Article VI of the GATT 1994, of the Anti-
Dumping Agreement  or of the Subsidies Agreement.  To the extent that the Enhanced Bond Requirement 
results in an increase in "contingent tariff lia bility" above bound levels for Members subject to 
antidumping or countervailing duties, therefore, the En hanced Bond Requirement is inconsistent with the 
obligations of the United States under Article II:1(a) an d the first sentence of Article II:1(b) of the GATT 
1994.  Moreover, the increase in contingent tariff lia bility is only in respect of certain Members whose 
merchandise is subject to the Enhanced Bond Requirement .  Therefore, it is also inconsistent with the 
"most-favoured nation" treatment obligation of th e United States under Article I:1 of the GATT 1994. WT/DS345/R 
Page A-18  
 
  43. It is important to note that the bound rate for sh rimp falling under tariff headings 0306.13.00 and 
1605.20.10 in the Schedule of Concessions of the United States is "0.0%".  Therefore, the Enhanced Bond Requirement is inconsistent with Articles I, II: 1(a) and II:1(b) as applied to shrimp as well. 
(j) In the alternative, the Enhanced Bond Requireme nt is inconsistent as such and as applied to 
imports of shrimp from India with Articles XI a nd as applied to imports of shrimp from India 
with Article XIII of the GATT 1994. 
44. Alternatively, to the extent that the Enhanced Bond Requirement may be legally characterized as 
an import restriction and not as a "duty, tax or other char ge," it is clearly inconsistent with Article XI:1 of 
the GATT 1994 and is not saved by any of the ex ceptions contained therein.  The Enhanced Bond 
Requirement operates in a manner that severely restricts imports into the United States of merchandise 
subject to antidumping or countervailing duties.  A ccordingly, to this extent, the Enhanced Bond 
Requirement is inconsistent with  Article XI:1 of the GATT 1994. 
45. Further, the Enhanced Bond Requirement inhere ntly discriminates against imports from some 
Members because antidumping investigations almost  always will only be against imports from some 
Members that are found to have been dumped and to have caused injury and not imports from all 
Members.  In the case of shrimp, US Customs has applied the Enha nced Bond Requirement to imports of 
shrimp only from the six countries subject to investiga tion:  Brazil, China, Ecuador, India, Thailand and 
Vietnam.  Accordingly, India considers that the United States has acted inconsiste ntly with its obligations 
under Article XIII of the GATT 1994 by applying the E nhanced Bond Requirement to imports of shrimp 
from India in a discriminatory manner. 
3. Conclusion 
46. For the reasons stated above, India respectfully re quests the Panel to find that the laws, rules and 
regulations of the United States that  authorize the imposition of the Enhanced Bond Requirement and the 
instruments comprising the Amended Bond Directive ar e inconsistent as such with the provisions of 
Article VI of the GATT 1994 including the Ad Note, Article s 1, 7.1, 7.2, 7.4, 9.1,  9.2, 9.3, 9.3.1, 18.1, 
18.4 and 18.5 of the Anti-Dumping Agreement, Articles 10, 17.1, 17.2, 17.4, 19.2, 19.3, 19.4, 32.1, 32.5 
and 32.6 of the Subsidies Agreement, Article XVI:4 of the WTO Agreement and of Articles I:1, II:1(a) 
and (b) or, alternatively, of XI:1 of the GATT 1994. 
47. For the same reasons, India also respectfully requ ests the Panel to find that the Enhanced Bond 
Requirement as applied to imports of shrimp from India is inconsistent with the provisions of Articles 1, 
7.1, 7.2, 7.4, 7.5, 9.1, 9.2, 9.3, 9.3.1 and 18.1 of  the Anti-Dumping Agreement, of Article X:3(a) and of 
Articles I:1, II:1(a) and (b) or, alterna tively, of XI:1 and XIII of the GATT 1994. 
48. Accordingly, India respectfully requests that the Panel recommend to the DSB in accordance with 
Article 19.1 of the DSU that the United States bring its  measures into conformity with the provisions of 
the Anti-Dumping Agreement, the Subsidies Agreement  and the GATT 1994 within a reasonable period 
of time.