WORLD TRADE  
ORGANIZATION  WT/DS345/R 
29 February 2008 
 (08-0735) 
 Original:   English 
  
 
   
 
 
 
UNITED STATES – CUSTOMS BOND DIRECTIVE 
FOR MERCHANDISE SUBJECT TO 
ANTI-DUMPING/COUNTERVAILING DUTIES 
 
 
Report of the Panel 
 
 
   
  WT/DS345/R 
 Page iii 
 
 
  TABLE OF CONTENTS 
Page  
 
I. INTRODUCTION ................................................................................................................... .1 
A. COMPLAINT OF INDIA ..................................................................................................................1  
II. FACTUAL ASPECTS ..............................................................................................................2  
A. THE  ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR")..............................................2  
B. IMPOSITION OF CONTINUOUS BONDS AND OTHER SECURITY RE QUIREMENTS IN THE 
CONTEXT OF THE US RETROSPECTIVE ANTI -DUMPING AND COUNTERVAILING DUTY 
ASSESSMENT SYSTEM ..................................................................................................................3  
1. Overview of anti-dumping and countervailing duty procedures..........................................3  
2. Timeline for anti-dumping and countervailing duty procedures .........................................4  
C. IMPLEMENTATION OF THE AMENDED CONTINUOUS BOND DIRECTIVE (THE "AMENDED 
CBD")............................................................................................................................. ..............5  
D. THE IMPACT OF THE ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR")  ON 
SUBJECT SHRIMP IMPORTERS .......................................................................................................8  
III. PARTIES' REQUESTS FOR FIND INGS AND RECOMMENDATIONS.........................9  
IV. ARGUMENTS OF THE PARTIES ......................................................................................11  
V. ARGUMENTS OF THE THIRD PARTIES ........................................................................11  
VI. INTERIM REVIEW...............................................................................................................11  
A. INDIA 'S COMMENTS ON THE INTERIM REPORT ..........................................................................12  
1. Sequence of events surrounding implementation of the EBR.............................................12  
2. One hundred per cent surety collateral requirements.........................................................12  
3. India's Article X:3(a) as such  claim ......................................................................................12  
4. The relationship of the Ad Note and the Anti-Dumping Agreement ...................................12  
5. Classification of Appellate Body reasoning as dicta in US – Zeroing (EC)  and US 
– Zeroing (Japan) ....................................................................................................................13  
6. Text of footnote 203 ........................................................................................................... .....13  
7. India's claims under the GATT 1994  and the United States' defence under 
Article XX(d) of the GATT 1994 ............................................................................................13  
B. THE UNITED STATES ' COMMENTS ON THE INTERIM REPORT ....................................................14  
1. Typographical errors........................................................................................................... ...14 
2. Treatment of amendments as part  of the measure at issue.................................................15  
3. Description of  the United States' argument regarding Article 18.1 of the Anti-
Dumping Agreement ................................................................................................................15  
4. The EBR formula................................................................................................................ ....15  
5. The relationship between Article 9.3.1 of the Anti-Dumping Agreement  and 
retrospective duty assessment................................................................................................15  
6. Characterisation of the "enhanced" bond requirement......................................................16  WT/DS345/R 
Page iv  
 
  7.
 The legal standard for determining whet her or not the application of the EBR 
resulted in "reasonable" security requirements ..................................................................16  
8. Challenges to mandatory measures u nder the "mandatory/discretionary" 
distinction .................................................................................................................... ............18  
9. Consistency between DS343 and DS345................................................................................18  
VII. FINDINGS....................................................................................................................... ........19  
A. PRELIMINARY ISSUES ................................................................................................................19  
1. Parallel panel proceedings in DS343 and DS345..................................................................19  
2. Overview of the Panel's approach to consideration of India's claims................................20  
3. Order of analysis.............................................................................................................. .......21  
B. INDIA 'S AS APPLIED CLAIMS .......................................................................................................21  
1. Scope of the meas ure concerned............................................................................................21  
2. Articles 1 and 18.1 of the Anti-Dumping Agreement , and the Ad Note ..............................24  
(a) Does the application of the EBR constitute "specific action against dumping"?......................25  
(i) Main arguments of India........................................................................................................ ...25 
"Specific action" in response to dumping....................................................................................... ......... 25  
Specific action "aga inst" du mping .............................................................................................. ............ 25  
(ii) Main arguments of the United States........................................................................................26  
"Specific action" in response to dumping....................................................................................... ......... 26  
Specific action "aga inst" du mping .............................................................................................. ............ 27  
(iii) Evaluation by the Panel........................................................................................................ ....27  
Whether or not the application of th e EBR is "specific" to dumping...................................................... 28  
Whether or not the application of the EBR acts "aga inst" dumping........................................................ 29  
Conclusion..................................................................................................................... .......................... 31  
(b) Was the EBR applied "in accordance with" the provisions of the GATT 1994 , as 
interpreted by the Anti-Dumping Agreement ? ..........................................................................32  
(i) Main arguments of India........................................................................................................ ...32 
(ii) Main arguments of the United States........................................................................................33  
(iii) Evaluation by the Panel........................................................................................................ ....33  
The relationship between the Ad Note and the Anti-Dumping Agreement .............................................. 34  
The temporal scope of the Ad Note.............................................................................................. ........... 38  
Ordinary meaning of the text of the Ad Note .................................................................................. 38  
Contextual considerations regarding Article 7 of the Anti-Dumping Agreement ............................. 41  
Contextual considerations regarding Article 9 of the Anti-Dumping Agreement , and the  
WTO-conformity of cash deposits ................................................................................................... 43  
The combined use of bon ds and cash deposits .................................................................................... .... 46 
Whether the application of the EBR resulted in "reasonable" secur ity requirements.............................. 47  
(iv) Summary ........................................................................................................................ ...........51   WT/DS345/R 
 Page v 
 
 
  (v) Finding on whether or not the application of the EBR was "in accordance with" the 
Ad Note ........................................................................................................................ .............51  
(c) Conclusion ..................................................................................................................... ...........51  
3. Articles 7.1(iii), 7.2 and 7.4 of the Anti-Dumping Agreement ..............................................51  
(a) Main arguments of India........................................................................................................ ...51 
(b) Main arguments of the United States........................................................................................52  
(c) Evaluation by the Panel ........................................................................................................ ....52  
4. Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement , and Article VI:2 
of the GATT 1994 ....................................................................................................................54  
(a) Main arguments of India........................................................................................................ ...54 
(b) Main arguments of the United States........................................................................................54  
(c) Evaluation by the Panel ........................................................................................................ ....55  
5. Other as applied  claims by India under the GATT 1994 ......................................................57  
C. INDIA 'S AS SUCH  CLAIMS ...........................................................................................................59  
1. Scope of the meas ure concerned............................................................................................59  
(a) Scope of the Amended CBD.....................................................................................................59  
(b) The statutory provision 19 U.S.C. § 1673 and the regulatory provision  
19 C.F.R. § 113.13............................................................................................................. .......59  
2. Whether the measure at issue may be challenged " as such "..............................................67  
3. The "mandatory/discretionary" distinction as an analytical tool ......................................68  
4. Application of the "mandatory/discretiona ry" distinction in this dispute ........................71  
5. Whether the Amended CBD is inconsistent as such with Articles 1 and 18.1 of 
the Anti-Dumping Agreement , Articles 10 and 32.1 of the SCM Agreement , and 
the Ad Note .................................................................................................................... ..........75  
(a) Main arguments of India........................................................................................................ ...75 
(b) Main arguments of the United States........................................................................................75  
(c) Evaluation by the Panel ........................................................................................................ ....76  
6. Articles 7.1(iii), 7.2, and 7.4 of the Anti-Dumping Agreement  and Articles 17.1(c). 
17.2 and 17.4 of the SCM Agreement .....................................................................................77  
(a) Main arguments of India........................................................................................................ ...77 
(b) Main arguments of the United States........................................................................................78  
(c) Evaluation by the Panel ........................................................................................................ ....79  
7. Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement , Articles 19.2, 19.3 
and 19.4 of the SCM Agreement , and Article VI:3 of the GATT 1994 ................................80  
(a) Main arguments of India........................................................................................................ ...80 
(b) Main arguments of the United States........................................................................................80  
(c) Evaluation by the Panel ........................................................................................................ ....81  WT/DS345/R 
Page vi  
 
  8.
 Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the SCM Agreement  
and Article XVI of the WTO Agreement ................................................................................82  
(a) Main arguments of India........................................................................................................ ...82 
(b) Main arguments of the United States........................................................................................83  
(c) Evaluation by the Panel ........................................................................................................ ....83  
9. Other as such  claims by India under the GATT 1994 ..........................................................83  
D. NOTIFICATION RE QUIREMENT UNDER ARTICLE  18.5  OF THE ANTI-DUMPING 
AGREEMENT  AND ARTICLE  32.6  OF THE SCM  AGREEMENT .......................................................84  
1. Main arguments of India........................................................................................................ 84 
2. Main arguments of the United States....................................................................................84  
3. Evaluation by the Panel........................................................................................................ ..85 
E. UNITED STATES ' DEFENCE UNDER ARTICLE  XX( D) OF THE GATT 1994 ..................................86  
1. Main arguments of the United States....................................................................................86  
2. Main arguments of India........................................................................................................ 87 
3. Evaluation by the Panel........................................................................................................ ..87 
(a) Whether the EBR is necessary to secure compliance with US laws and regulations as 
provided in Article XX(d) of the GATT 1994 ...........................................................................88  
(i) First element: Whether the EBR has been "designed" to secure compliance with US 
laws and regulations that are not in themselves WTO-inconsistent .........................................88  
(ii) Second element: Whether the EBR is "n ecessary to secure compliance with"  
19 U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673,  
19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1) ......................................................91  
(b) Conclusion ..................................................................................................................... ...........94  
VIII.  CONCLUSIONS AND RECOMMENDATIONS................................................................94  
  WT/DS345/R 
 Page vii 
 
 
   
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 
 
 
ANNEX B 
 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN SUBMISSION  
OF THE PARTIES 
 
 
CONTENTS PAGE 
Annex B - 1 Executive Summary of the Second Written Submission of the  
United States B-2 
Annex B - 2 Executive Summary of the Second Written Submission of India B-11 
 
 
ANNEX C 
 
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSION  
OF THE THIRD PARTIES 
 
 
CONTENTS PAGE 
Annex C - 1 Executive Summary of the first written submission of Brazil  C-2 
Annex C - 2 Executive Summary of the first written submission of China C-7 
Annex C - 3 Executive Summary of the first written submission of the  
European Communities C-12 
Annex C - 4 Executive Summary of the first written submission of Japan C-16 
Annex C - 5 Executive Summary of the fi rst written submission of Thailand C-19 
 
 
 WT/DS345/R 
Page viii  
 
  TABLE OF CASES CITED IN THIS REPORT 
 
Short Title Full Case Title and Citation 
Argentina – Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515 
Australia – Salmon  Appellate Body Report, Australia – Measures Affecting Importation of Salmon , 
WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327 
Brazil – Aircraft  Appellate Body Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 
Brazil – Aircraft  Panel Report, Brazil – Export Financing Programme for Aircraft , WT/DS46/R, 
adopted 20 August 1999, as modified by Appellate Body Report, 
WT/DS46/AB/R, DSR 1999:III, 1221 
Brazil – Desiccated Coconut  Appellate Body Report, Brazil – Measures Affe cting Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167 
Brazil – Desiccated Coconut  Panel Report, Brazil – Measures Affecting Desiccated Coconut , WT/DS22/R, 
adopted 20 March 1997, upheld by Appellate Body Report, WT/DS22/AB/R, 
DSR 1997:I, 189 
Chile – Price Band System  Appellate Body Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/AB/R, adopted 23 October 
2002, DSR 2002:VIII, 3045 
Dominican Republic – Import 
and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the 
Importation and Internal Sale of Cigarettes , WT/DS302/AB/R, adopted 
19 May 2005 
EC – Bananas III  Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 25 September 1997, 
DSR 1997:II, 591 
EC – Bed Linen  
(Article 21.5 – India)  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from I ndia – Recourse to Article 21.5 of the 
DSU  by India , WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965  
EC – Sardines  Panel Report, European Communities – Trade Description of Sardines , 
WT/DS231/R and Corr.1, adopted 23 October 2002, as modified by Appellate 
Body Report, WT/DS231/AB/R, DSR 2002:VIII, 3451 
Guatemala – Cement I  Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding 
Portland Cement from Mexico , WT/DS60/AB/R, adopted 25 November 1998, 
DSR 1998:IX, 3767 
India – Patents (US)  Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
Indonesia – Autos  Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry , 
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 2, 3 and 4, 
adopted 23 July 1998, DSR 1998:VI, 2201 
Japan – Agricultural 
Products I  GATT Panel Report, Japan – Restrictions on Imports of Certain Agricultural 
Products , L/6253, adopted 2 March 1988, BISD 35S/163 
Japan – Semi-Conductors  GATT Panel Report, Japan – Trade in Semi-Conductors , L/6309, adopted 
4 May 1988, BISD 35S/116 
Korea – Alcoholic Beverages  Appellate Body Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/AB/R, 
WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, 3  WT/DS345/R 
 Page ix 
 
 
  Short Title Full Case Title and Citation 
Korea – Commercial Vessels Panel Report, Korea – Measures Affecting Trade in Commercial Vessels , 
WT/DS273/R, adopted 11 April 2005 
Korea – Various Measures on Beef
  Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled 
and Frozen Beef , WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, 
DSR 2001:I, 5 
Mexico – Anti-Dumping 
Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dump ing Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R, adopted 
20 December 2005 
Mexico – Anti-Dumping 
Measures on Rice Panel Report, Mexico – Definitive Anti-Dumping Me asures on Beef and Rice, 
Complaint with Respect to Rice , WT/DS295/R, adopted 20 December 2005, as 
modified by Appellate Body Report, WT/DS295/AB/R 
Mexico – Corn Syrup  
(Article 21.5 – US)  Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose 
Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU  
by the United States , WT/DS132/AB/RW, adopted 21 November 2001, 
DSR 2001:XIII, 6675 
US – 1916 Act  Appellate Body Report, United States – Anti-Dumping Act of 1916 , 
WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, DSR 2000:X, 
4793 
US – 1916 Act (EC)  Panel Report, United States – Anti-Dumping Act of 1916, Complaint by the 
European Communities , WT/DS136/R and Corr.1, adopted 26 September 2000, 
upheld by Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, 
DSR 2000:X, 4593 
US – 1916 Act (Japan)  Panel Report, United States – Anti-Dumping Act of 1916, Complaint by Japan , 
WT/DS162/R and Add.1, adopted 26 September 2000, upheld by Appellate Body 
Report, WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, 4831 
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779 
US – Certain EC Products  Appellate Body Report, United States – Import Measures on Certain Products 
from the European Communities , WT/DS165/AB/R, adopted 10 January 2001, 
DSR 2001:I, 373 
US – Corrosion-Resistant 
Steel Sunset Review  Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties 
on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3  
US – Countervailing Measures 
on Certain EC Products  Appellate Body Report, United States – Countervailing Measures Concerning 
Certain Products from the European Communities , WT/DS212/AB/R, adopted 
8 January 2003, DSR 2003:I, 5 
US – DRAMS  Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access 
Memory Semiconductors (DRAMS) of One Megabit or Above from Korea , 
WT/DS99/R, adopted 19 March 1999, DSR 1999:II, 521 
US – Export Restraints  Panel Report, United States – Measures Treating Exports Restraints as 
Subsidies , WT/DS194/R and Corr.2, adopted 23 August 2001, DSR 2001:XI, 
5767 
US – FSC  (Article 21.5 – EC II) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Second Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/AB/RW2, adopted 14 March 2006 WT/DS345/R 
Page x  
 
  Short Title Full Case Title and Citation 
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3 
US – Offset Act  
(Byrd Amendment ) Appellate Body Report, United States – Continued Dumping and Subsidy Offset 
Act of 2000 , WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003, 
DSR 2003:I, 375 
US – Oil Country Tubular 
Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R, 
adopted 17 December 2004, DSR 2004:VII, 3257 
US – Oil Country Tubular 
Goods Sunset Reviews  (Article 21.5 – Argentina) Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods fr om Argentina – Recourse to Article 
21.5 of the DSU by Argentina , WT/DS268/AB/RW, adopted 11 May 2007 
US – Section 211 
Appropriations Act  Appellate Body Report, United States – Section 211 Omnibus Appropriations 
Act of 1998 , WT/DS176/AB/R, adopted 1 February 2002, DSR 2002:II, 589 
US – Stainless Steel  Panel Report, United States – Anti-Dumping Measures on Stainless Steel Plate in 
Coils and Stainless Steel Sheet and Strip from Korea , WT/DS179/R, adopted 
1 February 2001, DSR 2001:IV, 1295 
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Certain Steel Products , WT/DS248/AB/R, WT/DS249/AB/R, 
WT/DS251/AB/R, WT/DS252/AB/R, WT /DS253/AB/R, WT/DS254/AB/R, 
WT/DS258/AB/R, WT/DS259/AB/R , adopted 10 December 2003, 
DSR 2003:VII, 3117  
US – Steel Safeguards Panel Reports, United States – Definitive Safeguard Measures on Imports of 
Certain Steel Products , WT/DS248/R, WT/DS249/R, WT/DS251/R, 
WT/DS252/R, WT/DS253/R, WT/DS254/R, WT/DS258/R, WT/DS259/R, and 
Corr.1, adopted 10 December 2003, as modified by Appellate Body Report, 
WT/DS248/AB/R, WT/DS249/AB/R, WT /DS251/AB/R, WT/DS252/AB/R, 
WT/DS253/AB/R, WT/DS254/AB/R, WT /DS258/AB/R, WT/DS259/AB/R, 
DSR 2003:VIII, 3273  
US – Tobacco  GATT Panel Report, United States Measures Affecting the Importation, Internal 
Sale and Use of Tobacco , DS44/R, adopted 4 October 1994, BISD 41S/131 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R, adopted 21 March 2005 
US – Wool Shirts and Blouses  Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R and Corr.1, adopted 
23 May 1997, DSR 1997:I, 323 
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R, adopted 
9 May 2006 
US – Zeroing (Japan) Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/AB/R, adopted 23 January 2007 
 
   WT/DS345/R 
 Page 1 
 
 
  I. INTRODUCTION 
A. COMPLAINT OF INDIA  
1.1 On 6 June 2006, India requested consultations with the United States pursuant to Article 4 of 
the Understanding on Rules and Procedures Governing the Settlement of Disputes ("the DSU "), 
Article XXII:1 of the General Agreem ent on Tariffs and Trade 1994 (the " GATT 1994 "), Article 17 of 
the Agreement on Implementation of Article VI of  the General Agreement on Tariffs and Trade 1994 
(the " Anti-Dumping Agreement ") and Article 30 of the Agreem ent on Subsidies and Countervailing 
Measures (the " SCM Agreement ") with respect to certain measures imposed by the United States on 
imports of certain frozen warmwater shrimp from India1.  India and the United States held 
consultations, which failed to resolve the dispute. 
1.2 On 13 October 2006, India requested the establishment of a panel pursuant to Article XXIII 
of the GATT 1994 , Articles 4 and 6 of the DSU , Article 17 of the Anti-Dumping Agreement  and 
Article 30 of the SCM Agreement .2  
1.3 At its meeting on 21 November 2006, the Disput e Settlement Body (the "DSB") established a 
Panel pursuant to the request of India in documen t WT/DS345/6, in accordance with Article 6 of the 
DSU .  
1.4 The Panel's terms of reference are the following: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by India in document WT/DS345/6, the matter referred to the DSB by India in that document, and to make such finding s as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements."
3 
1.5 At its meeting on 26 October 2006, the DSB also established a Panel pursuant to the request 
of Thailand in document WT/DS343/7, which dea lt substantially with the same matter.   
1.6 On 19 January 2007, India requested the Director-General to determine the composition of 
the Panel, pursuant to Article 8.7 of the DSU . This paragraph provides: 
"If there is no agreement on the panelists within 20 days after the date of the 
establishment of a panel, at the request of  either party, the Director-General, in 
consultation with the Chairman of the DSB and the Chairman of the relevant Council 
or Committee, shall determine the com position of the panel by appointing the 
panelists whom the Director-General consid ers most appropriate in accordance with 
any relevant special or additional rules or  procedures of the covered agreement or 
covered agreements which are at issue in th e dispute, after consulting with the parties 
to the dispute. The Chairman of the DSB shall inform the Members of the 
composition of the panel thus formed no later than 10 days after the date the 
Chairman receives such a request." 
1.7 India also requested the Director General to select the same persons to serve as panelists for 
both DS343 and DS345, in accordance with Article 9.3 of the DSU , which provides: 
                                                      
1 WT/DS345/1. 
2 WT/DS345/6. 
3 WT/DS345/7. WT/DS345/R 
Page 2  
 
  "If more than one panel is established to ex amine the complaints related to the same 
matter, to the greatest extent possible the same persons shall serve as panelists on each of the separate panels and the timetab le for the panel process in such disputes 
shall be harmonized." 
1.8 On 26 January 2007, the Director-Gener al composed the Panel as follows:   
 Chairperson: Mr. Michael Cartland 
  Members: Mrs. Enie Neri de Ross    M r .  G r a h a m  S a m p s o n   
1.9 Brazil, China, the European Communities, Jap an, and Thailand reserved their rights to 
participate in the Panel proceedings as third parties.
4 
1.10 The Panel held the first substantive meeting with the parties on 6 and 7 June 2007.  The 
session with the third parties took place on 7 June 2007.   The Panel's second substantive meeting with 
the parties was held on 24 and 25 July 2007.  
1.11 On 4 September 2007, the Panel issued the Descrip tive Part of its Panel Report.  The Interim 
Report was issued to the parties on 9 October 2007 a nd the Final Report was issued to the parties on 
13 November 2007. 
II. FACTUAL ASPECTS 
2.1 This dispute concerns the implementation of  the enhanced continuous bond requirement 
(hereafter the "EBR")5 by the United States and its application to certain frozen warmwater shrimp 
imported from India.  India presents claims both as such  and regarding its application. 
A. THE  ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR") 
2.2 On 9 July 2004, US Customs and Border Pr otection (hereafter "US Customs") amended its 
existing bond requirements to include new guideli nes specific for "covered cases" within "special 
categories" of merchandise.  The EBR has b een imposed pursuant to the Customs Bond 
Directive 99-3510-004 on Monetary Guidelines for Setting Bond Amounts issued on 23 July 1991 
(the "1991 Customs Bond Directive"), as amende d by the Amendment to Bond Directive 99-3510-
004 for Certain Merchandise Subject to Antidumpi ng/Countervailing Cases (hereafter the "July 2004 
Amendment")6, the document entitled "Clarification to Ju ly 9 2004 Amended Monetary Guidelines 
for Setting Bond Amounts for Special Categories of Merchandise Subject to Antidumping and/or Countervailing Duty Cases" (hereafter the "August 2005 Clarification")
7, the document entitled 
"Current Bond Formulas" posted by US Custom s on its website on 24 January 2005 (hereafter 
"Current Bond Formulas")8, and the Notice published in the United States Federal Register entitled 
Monetary Guidelines for Setting Bond Amounts fo r Importations Subject to Enhanced Bonding 
Requirements (hereafter the "October 2006 Notice").9  The July 2004 Amendm ent, the August 2005 
Clarification, the document Current Bond Form ulas and the October 2006 Notice is referred to 
collectively as the "Amended CBD".  US Customs has identified as a primary objective of the 
                                                      
4 WT/DS345/7. 
5 In its Request for Establishment of the Panel, India uses the term "Continuous Bond Requirement", 
instead of EBR to refer to the measure at issue. 
6 Exhibit IND-3. 
7 Exhibit IND-4. 
8 Exhibit IND-5. 
9 Exhibit IND-6.  WT/DS345/R 
 Page 3 
 
 
  directive, "continued vigilance ... to ensure collection of all appropriate anti-dumping and 
countervailing duties."10  On 1 February 2005, US Customs impl emented the EBR with respect to all 
imports of certain frozen warmwater shrimp s ubject to anti-dumping duties (hereafter "subject 
shrimp").11  Prior to 1 February 2005, the United States had also sent notices to 33 importers 
beginning on 6 August 2004, of which 12 importers furnis hed enhanced bonds.12  T o  d a t e ,  
"agriculture/aquaculture merchandise" is the only merchandise designated as a "special category" and 
"shrimp covered by anti-dumping or countervaili ng duty cases" is currently the only "covered case" 
designated within the agriculture/aquaculture category. 
B. IMPOSITION OF CONTINUOUS BONDS AND OTHER SECURITY REQUIREMEN TS IN THE CONTEXT 
OF THE US RETROSPECTIVE ANTI -DUMPING AND COUNTERVAILING DUTY ASSESSMENT 
SYSTEM  
2.3 According to the United States, the EBR in co mbination with cash deposits is imposed to 
ensure payment of anti-dumping or countervailin g duties under its retrospective duty assessment 
system.  Unlike the systems employed in many other countries, the US retrospective system determines final liability for anti-dumping and countervailing duties 12 months following the 
anniversary month of the relevant anti-dumping dut y order after merchandise is imported into the 
country at the end of assessment or "administrative" reviews.
13  Certain of the following aspects of the 
US system discussed below, may prove relevant to an objective assessment of India's claim. 
1. Overview of anti-dumping and countervailing duty procedures 
2.4 Under the US retrospective duty assessment syst em, the United States determines, through an 
investigation, whether margins of dumping or co untervailable subsidisation exist, and whether 
dumped imports or countervailable subsidisation cause or threaten to cause material injury to a 
domestic industry.  During the preliminary phase of the investigation, the US International Trade Commission (hereafter "USITC") determines whether a reasonable indication exists that an industry 
in the United States is materially injured, whether a reasonable indication exists that an industry in the 
United States is threatened with material injury, or whether the establishment of an industry in the 
United States is materially retarded by reason of subject merchandise investigated.  USDOC also 
preliminarily determines whether a reasonable basis exists to believe that dumping or countervailable 
subsidisation is occurring.  If USDOC makes an affi rmative determination, it will issue a preliminary 
determination, which permits the imposition of provisional measures, historically in the form of a 
cash deposit, bond, or other security requirement, to ensure payment if anti-dumping or countervailing 
duties are ultimately imposed.  The preliminary dete rmination sets forth ad valorem cash deposit rates 
for producers/exporters individually investigated, as well as an "all-others" rate applicable to all other 
producers/exporters.  Subsequently, USDOC makes a final determination as to whether dumping or 
countervailable subsidisation is occurring.  If this de termination is affirmative and USITC also issues 
a final determination that imports of subject merchandise in the investigation were causing material 
injury to the US domestic industry or threatening with  material injury, or that the establishment of an 
industry in the United States is materially reta rded by reason of subject merchandise in the 
investigation, thereafter USDOC issues a public  notice, denominated under US law as an anti-
dumping or countervailing duty order.  In the an ti-dumping or countervailing duty order, the US 
                                                     
 
10 Exhibit IND-3. 
11 US Customs applied the EBR to all importers of subject shrimp under an anti-dumping order from 
Brazil, China, Ecuador, India, Thailand, and Viet Nam on 1 February 2005.  See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater 
Shrimp from India, 70 Fed. Reg 5147 (1 February 2005), Exhibit IND-13.   
12 See United States' responses to First Set of Panel Questions, paras. 34-35. 
13 See generally Title VII of the Tariff Act of 1930, 19 U.S.C. § 1671 et seq .; see also 19 C.F.R. § 
351.101 et seq . WT/DS345/R 
Page 4  
 
  Department of Commerce sets fo rth ad valorem cash deposit rates for producers/exporters 
individually investigated, as well as an "all-others" ra te applicable to all other producers/exporters.  
Pursuant to the order, importers must post a cash  deposit of estimated anti-dumping or countervailing 
duties for each import transaction.  This cash depos it is based on the overall margin of dumping or 
countervailable subsidisation found for the exporte r or producer during the investigation phase.   
2.5 During the anniversary month following a final determination in the investigations phase, 
importers, exporters, producers, a nd domestic interested parties ma y request that USDOC conduct an 
assessment review, often referred to as an "adminis trative review" of the import transactions that 
occurred in the prior year.  During this review, US DOC analyses all of the import transactions for the 
period of review (i.e., the prior 12 months) to determine the final amount of the anti-dumping or 
countervailing duty payable on imports from each pr oducer or exporter for which USDOC received a 
request for review.   
2.6 Upon USDOC's completion of an administrative review, US Customs a pplies the assessment 
rate provided by USDOC to the customs value of each  entry to determine the amount of final liability.  
If the amount of the cash deposit is greater than the amount of final liability, US Customs refunds the 
amount collected in excess of the final liability, together with interest on the excess amount.  
Alternatively, if the amount of final liability ex ceeds the amount of the cash deposit, US Customs 
issues a bill to the importer for payment of the diffe rence in the amounts together with interest on the 
difference in the amounts.  During the administrative review, USDOC may establish a new cash deposit rate for each producer or exporter, on the basi s of that producer or exporter’s transactions over 
the period of review.  This new ad valorem cash depos it rate will be applied to future imports from the 
producer or exporter.  USDOC analyses the import transactions of each producer or exporter subject 
to the review to calculate a new cash deposit rate going forward.  For those entries not covered by a 
request for an administrative review, USDOC instructs US Customs to assess anti-dumping or 
countervailing duties at the cash de posit rate required upon entry. 
2.7 Due to the design of the US retrospective system , the dumping or subsidisation calculations in 
the administrative review are based on different  transactions than those evaluated during the 
investigation. The investigation evaluates the pric ing behaviour of producer s and exporters based on 
transactions completed during a period of time prior to the initiation of the anti-dumping or 
countervailing duty investigation.  In contrast, an administrative review evaluates pricing behaviour 
during later time periods.
14  As a result of this, the dumping or subsidisation margins calculated in the 
administrative review may be either higher or lower than the margins calculated in the investigation.  
According to the United States, the EBR attempts  to ensure full collection of anti-dumping or 
countervailing duties by securing against the possibili ty that the margin will increase from the time of 
the investigation until calculation of the final duty liability during the administrative review, and that 
importers will default on payment of increased duties.15 
2. Timeline for anti-dumping and countervailing duty procedures 
2.8 Under US law, USDOC has a finite period to  complete its anti-dumping or countervailing 
duty investigation and issue an anti anti-dumping or  countervailing duty order, if any.  USDOC may 
extend the deadlines for the preliminary and final de terminations, but cannot extend the investigation 
beyond 407 days.  US law provides that USDOC ordinarily must complete an administrative review within 365 days.  USDOC may extend the deadlines for issuing preliminary and final results of the 
                                                     
 
14 The first administrative review evaluates transactions occurring from the date of imposition of 
provisional measures (if any) in the preliminary determination through the end of the twelve-month period 
following imposition of the anti-dumping duty order, generally a period of 18 months.  All subsequent administrative reviews generally evaluate transac tions occurring during the preceding 12 months. 
15 United States' Responses to First Set of Panel Questions, para. 58.  WT/DS345/R 
 Page 5 
 
 
  assessment review, but the review may not excee d 545 days.  Specifically, the following is an 
overview of applicable time limits:  
• In the petition phase of an anti-dumping or coun tervailing duty investig ation, USDOC has 20 
days (which may be extended to 40 days, only in the case of an anti-dumping investigation) to 
determine whether to initiate an investigation after it receives a petition to investigate dumping 
or countervailable subsidisation. 
• In the preliminary phase of an anti-dumping or countervailing duty in vestigation, after 
USDOC initiates the investigation, USITC has 45 days (which may be extended to 65 days) 
from the date the petition is filed to make a pre liminary injury determination.  If USITC makes 
a preliminary affirmative injury determinati on, then USDOC has 140 days (which may be 
extended to 190 days) in the case of a dumping investigation, or 65 days (which may be extended to 130 days) in the case of a counterva ilable subsidisation investigation, from the 
date it initiated the investigation to make its preliminary determination of the existence of 
dumping or countervailable subsidisation.   
• In the final phase of an anti-dumping or countervailing duty investigation, USDOC has 75 
days (which may be extended to 135 days, onl y in the case of an anti-dumping investigation) 
from its preliminary determination to make  a final determination of the dumping or 
subsidisation margins of investigated pr oducers and exporters.  If USDOC makes an 
affirmative final determination, USITC has until 45 days (which may be extended to 75 days) 
after USDOC’s final determination to make its fi nal injury determination.  If the USITC makes 
an affirmative final injury determination,  USDOC issues an anti-dumping or countervailing 
duty order.   
• One year after the date the anti-dumping or c ountervailing duty order is issued, and during the 
anniversary month of the order every year thereafter, interested parties may request that 
USDOC conduct an administrative review of individual producers or exporters.  After 
initiating this review, USDOC is required to issue preliminary results of the actual margin of 
dumping or subsidisation for the entries of the reviewed producer or exporter during the period 
of review within 245 days (which may be exte nded to 365 days)  after the last day of the 
anniversary month.  USDOC then must issue the final results within 120 days (which may be extended to 180 days) after the pr eliminary results are published. 
C. I
MPLEMENTATION OF THE AMENDED CONTINUOUS BOND DIRECTIVE (THE "AMENDED CBD ") 
2.9 Following issuance of the anti-dumping duty orde r on imports of certain frozen warmwater 
shrimp on 1 February 2005, US Customs began re quiring subject shrimp importers to maintain 
enhanced bond coverage additional to the cash secur ity required on each entry, in compliance with the 
Amended CBD.16   
2.10 Generally, to satisfy US Customs bond requireme nts, any importer of goods subject to an 
anti-dumping or countervailing duty order may obtain either a single entry bond, covering a single 
entry, or a continuous bond, which provides security  for all entries filed by the bond principal during 
the period of time covered by the bond, typically one year.  US Customs may also require additional security if US Customs believes that acceptance of  an entry secured by a continuous bond would 
                                                     
 
16 As indicated in para.2.2, the United States sent notices to 33 importers prior to publication of the 
anti-dumping order on 1 February 2005 beginning on 6 Au gust 2004, of which 12 importers furnished enhanced 
bonds prior to 1 February 2005. WT/DS345/R 
Page 6  
 
  impair US Treasury revenue collection.
17  Previously, under the 1991 Customs Bond Directive, 
importers subject to an anti-dumping or counterva iling duty order that selected the continuous bond 
option only needed to post a customs bond equal to the greater of $50,000 or 10 per cent of the duties, taxes, and fees paid during the preceding year, rounded to the nearest multiple of $10,000.  After publication of the Amended CBD, however, US Cu stoms implemented the EBR and required select 
importers of merchandise designa ted as "covered cases" to provide  continuous customs bonds in 
excess of amounts established under the 1991 Customs Bond Directive and in addition to cash 
deposits of estimated anti-dumping duties per entry.  Thus, under the Amended CBD, in addition to a 
minimum of $50,000 or 10 per cent of the duties, taxes, and fees paid during the preceding year, US Customs requires importers subject to the EBR to secure a bond for an amount equal to the USDOC 
cash deposit rate in effect on the date of entry of  the merchandise multiplied by the importer's value of 
imports from the previous year, as well as pay cash deposits equal to the amount of anti-dumping 
duties per entry.  The Amended CBD does not apply to single entry bonds. 
2.11 As noted, subject shrimp is currently the only category of merchandise subject to the EBR.  
2.12 The following hypothetical example illustrat es the combined total security obligations 
imposed on Indian shrimp importers subject  to the EBR, including bond and cash deposit 
requirements: 
(a) An importer of Certain Frozen Warmwate r Shrimp from India subject to the "all 
others" anti-dumping duty rate imports US$1 million
 of subject shrimp during the 
previous 12 months. 
(b) The value of subject shrimp entered in the present transaction amounts to 
US$ 10,000 . 
(c) The Bound rate under Harmonized Tariff Sc hedule (HTS) headings 0303.13.00 and 
1605.20.10 is 0 per cent.  
(d) The USDOC anti-dumping duty "all-others" rate (pursuant to anti-dumping order) is 
10.17 per cent.  
(e) US Customs applies the Amended EBR formula to the existing importer without 
making adjustments based on an individualized determination. 
 Obligation Description Amount 
1. Normal Duties: As per a 0 per cent bound rate under 
HTS headings $0 
2. Cash Deposit for Anti-dumping 
Duties: Upon issuance of an anti-dumping order 
but prior to an administrative review, US Customs orders the posting of a cash 
deposit based on the "all-others" rate.
18 $1,017 
                                                      
17 See 19 C.F.R. § 113.13(d).  US Customs administers the powers under section 113.13(d) in 
accordance with 1991 Customs Bond Dire ctive, which provides that "a bond  may be demanded with a limit of 
liability amount greater than that comput ed using this formula, provided suffic ient evidence of high risk is on 
hand to support the higher amount". 
18 See 19 C.F.R. § 351.211(a).  If no administrativ e review is requested, anti-dumping duties will be 
assessed at the cash deposits rate for estimated anti-dump ing duties as established in the anti-dumping Order and 
required on that merchandise at the time of entry.  (See 19 C.F.R. § 351.212(c)).  WT/DS345/R 
 Page 7 
 
 
   Obligation Description Amount 
3. Continuous Bond Amount:19 Basic Bond + EBR amounts ( see 3(a) + 
(b) below ), rounded up  by increments of 
$10,000 up to $100,000, and then by 
increments of  $100,000. $200,000 
3(a).  Basic Bond Amount: The greater of either $50,000 or 10 
per cent of the duties, taxes, and fees 
paid during the preceding year, rounded.
20 $50,000 
3(b).  EBR Amount: 100 per cent of anti-dumping duty rate 
established in final Order or most recent administrative review * value of imports 
in previous 12 months. $101,700 
4. Total Obligations: = 1. + 2. + 3. $200,000 continuous 
bond (covering all 
shipments in one year 
period) + $1017 cash 
deposit per shipment 
of $10,000  
 
2.13 The Amended CBD authorizes US Customs to u se the standard formula or instead make 
individualised bond determinations for subject I ndian importers to determine bond amounts.  The 
Amended CBD (specifically the August 2005 Clar ification and the October 2006 Notice), provides 
that US Customs may reconsider bond amounts for individual importers on a case-by-case basis to ensure that duties are collected.  However, in order to receive a reduction in the overall bond coverage 
via an individualized bond determination, an importer must so request, and may submit information 
on its financial condition related to the risk of non-co llection for that importer.  US Customs will then 
determine bond amounts based on the financial info rmation supplied by the importer, US Customs 
records on compliance history of the importer, the importer's or principal's ability to pay, and other relevant information available to US Customs.   Thus, the October 2006 Notice provides that, 
"[a]bsent exceptional circumstances, the above  formulas will determine the bond amounts where a 
submission has not been made by the principal".
21  To date, the US has indicated that it received 27 
requests for individualized bond determinations, of  which it has reviewed 22 requests and has granted 
no reductions to three importers, reductions of 25 per cent to eleven importers, 45 per cent to one 
importer, 75 per cent to two importers, 80 per cent to one importer and 85 per cent to two importers.22 
                                                      
19 A continuous bond amount secures mu ltiple transactions during its va lidity.  In place of a continuous 
bond, an importer may elect to post a single-transaction bond, which is equal to the total entry value of 
merchandise plus all applicable duties, taxes, and fees. 
20 See the 1991 Customs Bond Directive, which fixes a minimum continuous bond amount of $50,000 
and establishes the following formula: (1) In the case of 0 to $1 million duties/taxes, the bond limit of liability is 
fixed in multiples of $10,000 nearest to 10 per cent of duties, taxes and fees paid during the preceding calendar 
year; or (2) in the case of duties/taxes over $1 million, the bond liability is fixed in multiples of $100,000 nearest to 10 per cent of duties, taxes and fees paid during the preceding year. 
21 See Exhibit IND-6. 
22 See United States' responses to First Set of Pa nel Questions, para. 38; Exhibit US-12.  The GAO 
Report, Exhibit IND-26, p. 42 indicates that the number of shrimp importers totalled 550 through June 2006.  
Exhibit US-17 refers to 530 shrimp importers in 2004. WT/DS345/R 
Page 8  
 
  2.14 The enhanced continuous bonds provided pursuan t to the Amended CBD are released when 
final liability for anti-dumping duties on goods cove red by the bond is assessed, and upon liquidation 
of the import entries made in account of the goods.
23  As explained in section II.B above, if an 
administrative review is requested, final liability  for anti-dumping or countervailing duties will be 
determined through such a review.  If an administ rative review is not requested, final liability will 
equal the margin of dumping or subsidy published in  the final determination; however, this liability 
will not be assessed until the conclusion of the tim e period for requesting an administrative review. 
D. THE IMPACT OF THE ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR")  ON SUBJECT 
SHRIMP IMPORTERS  
2.15 Following the application of the EBR, subject  shrimp importers have faced significantly 
higher security obligations than previously to en ter merchandise.  Specifically, as explained above, 
subject shrimp importers must satisfy both th e Basic Bond and the EBR as well as provide cash 
deposits equal to the anti-dumping duty rate establis hed in the final determination.  Additionally, 
India submits that sureties have also "typically" re quired subject shrimp importers to post collateral 
equal to 100 per cent of the EBR to secure the increased bond amounts.24  The United States contends 
that evidence presented to this Panel does not s upport the conclusion that a majority of companies 
eligible to act as sureties on bonds securing obligations  to US Customs has required certain importers 
of subject shrimp to post collateral equal to 100 per cent of the EBR.25  India further submits that 
subject shrimp importers/exporters have also be en required to pay associated fees to secure the 
increased bond amounts.26  Due to the fact that enhanced bonds are deemed valid for 12-month 
periods of liability, but are not released until fi nal liability has been assessed for anti-dumping duties 
on the goods covered by the bond, shrimp importers/e xporters subject to the EBR have also had to 
furnish concurrent enhanc ed bonds and concurrent rounds of co llateral for bonds covering distinct 12-
month periods of liability.  In the context of the additional security, collateral and fee obligations, the 
Government Accountability Office (hereafter "USGAO") in a report (the "USGAO Report")27 
concluded that subject importers /exporters have likely had to fo rgo other commercial opportunities, 
although the effects of the EBR could not be fully isolated from other changes occurring at the same 
time.28  The USGAO Report also indicated that some im porters have required ex porters to export on a 
Delivery Duty Paid ("DDP") basis, thereby making th e exporter, as the importer of record, responsible 
for customs bond requirements.29  The parties disagree on the impact of the increased security 
                                                      
23 Under 19 USC § 1675(b), once the administering authority orders liquidation of entries pursuant to a 
review, goods are liquidated within 90  days after the instructions to Customs are issued, in most cases. 
24 In its Request for Review of the Interim Report, paragraph 4, India refers to the following statement 
by the US Court of Internationa l Trade (hereafter "USCIT") in NFI v. US  (Exhibit IND-16, p. 38.): "the 
testimony of witnesses for two plaintiffs relating to the requirements imposed on plaintiffs seeking new term 
bonds corroborates the finding  that sureties typically requi re 100 percent collateral in the situations occasioned 
by the new bonding requirements."  See also Exhibit IND-15, which contains, among other documents, a request 
for collateral from an Indian shrimp importer. 
25 See United States' Request for Review of the Interim Report, para. 4.  See also Exhibit US-13, which 
lists companies to act as sureties on bond s securing obligations to US Customs. 
26 The United States has emphasized that, as a third pa rty beneficiary to the contract between the surety 
and the bond principal, it is not itself a party to the cont ract, and thus does not set market-based fees charged by 
sureties or receive payments:  see also United States' first written submission, paras. 8 and 11. 
27 Government Accountability Office, Customs' Revised Bonding Policy Reduces Risk of Uncollected 
Duties, but Concerns about uneven Implementation and Effects Remain (hereafter, "USGAO Report"), GAO-
07-50 (Washington D.C.: October 2006), Exhibit IND-26. 
28 See USGAO Report, pp. 6, 24 and 35, Exhibit IND-26; see also  NFI v. US , Exhibit IND-16, p. 31. 
29 See USGAO Report, p. 6, Exhibit IND-26. See al so United States' second written submission, para. 
30, wherein the United States contends that the use of a DDP basis rather th an Cost, Insurance and Freight (CIF) 
one does not affect the costs bo rne by the importer of record.  WT/DS345/R 
 Page 9 
 
 
  requirements and related collateral requirements and fees on the year-on-year volume of shrimp 
imports into the United States.30 
2.16 In October 2006, USGAO concluded in the US GAO Report that the Amended CBD criteria 
were not transparent or consistently applied.31  On 13 November 2006, the US Court of International 
Trade (hereafter "USCIT") ruled that US Custom s appeared to have discretion under US law to 
consider potential anti-dumping or counterva iling duty in setting continuous bond amounts32; 
however, it concluded that the administrative record  supported the conclusion that the plaintiffs are 
likely to demonstrate that US Customs arbitrarily  and capriciously selected the anti-dumping orders 
on shrimp as the only "covered case" of merchandise33, and that the application of the Amended CBD 
to the eight complaining importers was arbitrary and capricious.34  For this reason, the USCIT issued a 
preliminary injunction status quo  in favour of eight of the 20 co mplaining importers, prohibiting the 
enforcement of any side agreements that limited importation35, and ordered US Customs to review the 
sufficiency of certain EBR bonds amounts in excess of $1,500,000 posted by the eight complaining importers in the case.
36  The USCIT's final decision on the merits of the complainants' legal claims is 
pending.  After the GAO Report was issued but pr ior to publication of the USCIT's ruling, US 
Customs published the Amended CBD criteria in th e October 2006 Notice, which further described 
the process for obtaining individualized bond amounts.   
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS  
3.1 India requests the Panel: 
(a) to find that the laws, rules and regulati ons of the United States that authorize the 
imposition of the EBR and the instruments comprising the Amended CBD are 
inconsistent as such  with the provisions of: 37 
(i) Article 18.1 of the Anti-Dumping Agreement  together with Article VI:2 of the 
GATT and Article 1 of the Anti-Dumping Agreement  because the EBR is a 
specific action against dumping not in accordance with the provisions of the Anti-Dumping Agreement ;  
(ii) Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the 
SCM Agreement  and Article XVI:4 of the WTO Agreement  because the 
United States has not complied with its ob ligation to ensure conformity of its 
laws, regulations and administrative procedures with the provisions of each of these agreements;  
(iii) Article 32.1 of the SCM Agreement  together with Article VI:3 of the 
GATT 1994 and Article 10 of the SCM Agreement  because it is a specific 
action against subsidization not in accordance with the SCM Agreement ; 
                                                     
 
30 See e.g. India's first written submission, para. 53; I ndia's first oral statement, para. 4; United States' 
first written submission, para. 46. 
31 See generally, USGAO Report, Exhibit IND-26. 
32 See Exhibit IND-16, p. 42. 
33 See Exhibit IND-16, p. 54 
34 See Exhibit IND-16, p. 58. 
35 See Exhibit IND-16, p. 73. 
36 See Exhibit IND-16, p. 72. 
37 India's first written submission, para. 115. WT/DS345/R 
Page 10  
 
  (iv) Articles VI:2 and VI:3 of the GATT 1994 because it secures duties, and 
results in charges, in excess of the ma rgin of dumping or in excess of the 
amount of the subsidy determined to have been granted, as the case may be; 
(v) Articles 9.1, 9.2 and 9.3 (including Article 9.3.1) of the Anti-Dumping 
Agreement  and Articles 19.2, 19.3 and 19.4 of the SCM Agreement  because 
the EBR is imposed on top of, and in  addition to, the collection of cash 
deposits calculated on the basis of the rate of antidumping or countervailing 
duties specified in the final determin ation which alone is permissible under 
these provisions; 
(vi) Article 7 of the Anti-Dumping Agreement  and Article 17 of the 
SCM Agreement  because the EBR is applied: 
– on the basis of a risk of default in collections and not because it is 
judged necessary to prevent injury during the investigation as required by Article 7.1(iii) of the Anti-Dumping Agreement  and 
Article 17.1(c) of the SCM Agreement ; 
 
– without regard to, and in excess of, the provisionally estimated 
amount of duty: 
 
• equal to the provisionally estimated dumping margin as required 
by Article 7.2 of the Anti-Dumping Agreement ; or 
• equal to the provisionally calcula ted amount of subsidization in 
Article 17.2 of the SCM Agreement ; 
– for a duration that is not limited to as short a period as possible as 
required by Article 7.4 of the Anti-Dumping Agreement  and Article 
17.4 of the SCM Agreement ;  
 
(vii) The Ad Note to Article VI:2 and 3 of the GATT 1994  (the "Ad Note") 
because the imposition of the EBR on top of the obligation to provide bonds or make cash deposits for the payment of antidumping or countervailing duties is not reasonable security for the payment of antidumping or 
countervailing duties and because it is not imposed pending final 
determination of the facts in any case of suspected dumping or subsidization; 
(viii) Article 18.5 of the Anti-Dumping Agreement  and Article 32.6 of the 
SCM Agreement  because the Amended CBD has made changes in the laws 
and regulations and/or in the administra tion of the laws and regulations of the 
United States that are relevant to these agreements and that were required to 
be notified by the United States to the relevant Committees; and 
(ix) Article I:1 and Article II:1(a) and (b) of the GATT 1994  to the extent that the 
EBR results in a duty or charge imposed  on or in connection with importation 
or is a method of levying duties and charges or is a rule or formality in connection with importation that is in consistent with these provisions; or 
(x) Alternatively, Article XI of the GATT 1994  to the extent that the EBR 
constitutes a restriction on imports other than "a duty, tax or other charge".  WT/DS345/R 
 Page 11 
 
 
  (xi) India also claims a violation of Articles 2.2, 2.3 and 2.4 of the Anti-Dumping 
Agreement38; Articles 1 and 14 of the SCM Agreement39; Article 7.5 of the 
Anti-Dumping Agreement  and 17.5 of the SCM Agreement40; Articles X:1 and 
X:2 of the GATT 199441; 
(b) For the same reasons, India also requ ests the Panel to find that the EBR as applied  to 
imports of shrimp from India is inconsistent with the provisions of Articles 1, 7.1(iii), 
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, alternatively, of XI:1 and XIII of the 
GATT 1994 .42  India also claims a violation of Article VI:2 of the GATT 1994  
(including the Ad Note); and Articles 2.2, 2.3 and 2.4 of the Anti-Dumping 
Agreement .43 
(c) Accordingly, India requests that the Pane l recommend to the DSB in accordance with 
Article 19.1 of the DSU  that the United States brings its measures into conformity 
with the provisions of the Anti-Dumping Agreement , SCM Agreement  and the 
GATT 1994  within a reasonable period of time.44 
3.2 The United States requests that the Panel reject India's claims for the reasons provided in its 
first written submission.45 
IV. ARGUMENTS OF THE PARTIES 
4.1 The arguments of the parties as set forth in their executive summaries su bmitted to the Panel, 
are attached to this Report as Annexes (see List of Annexes, page (vii)). 
V. ARGUMENTS OF THE THIRD PARTIES 
5.1 The arguments of the third parties as set fort h in their executive summaries submitted to the 
Panel, i.e. Brazil, China, the Eu ropean Communities, Thailand and Jap an are attached to this Report 
as Annexes (see List of Annexes, page (vii)). 
VI. INTERIM REVIEW 
6.1 On 9 October 2007, the Panel issued its Interi m Report to the parties.  On 23 October 2007, 
both parties submitted written requests for the review of precise aspects of the Interim Report.  The 
parties also submitted written co mments on the other party's commen ts on 2 November 2007.  Neither 
party requested an interim review meeting. 
6.2 In accordance with Article 15.4 of the DSU , this section of the Panel's Report sets out the 
Panel's response to the arguments made at the inte rim review stage, wherever the Panel felt that 
explanation was necessary.  The Panel has also modi fied certain aspects of its Report in light of the 
parties' comments wherever the Panel considered it necessary.  Due to the factual similarities in the 
disputes DS343 and DS345, the Panel wherever possi ble has modified the respective reports of these 
two disputes in parallel.  The Panel has also made  a limited number of editorial corrections to the 
                                                      
38 Request for Establishment of the Panel, WT/DS345/6, para. (c). 
39 Request for Establishment of the Panel, WT/DS345/6, para. (d). 
40 Request for Establishment of the Panel, WT/DS345/6, para (g). 
41 Request for Establishment of the Panel, WT/DS345/6, para. (j). 
42 India's first written submission, para. 116. 
43 Request for Establishment of the Panel, WT/DS345/6. 
44 India's first written submission, para. 117. 
45 United States' first written submission, para. 98. WT/DS345/R 
Page 12  
 
  Interim Report for the purposes of clarity and accu racy.  References to sections, paragraph numbers 
and footnotes in this Section VI relate to the Interim Report.  Where appropriate, references to 
paragraphs and footnotes to the Final Report are included. 
A. I
NDIA 'S COMMENTS ON THE INTERIM REPORT  
1. Sequence of events surrounding implementation of the EBR 
6.3 Regarding paragraph 2.2 and footnote 11, Indi a submits that US Customs began "official" 
implementation of the EBR immediately after the introduction of the July 2004 Amendment and prior 
to imposition of the anti-dumping order on certain frozen warmwater shrimp from India on 1 February 
2005.  India therefore requests that the Panel move text located in Footnote 11 into the main body text in paragraph 2.2 to emphasize that the EBR was impl emented for certain importers prior to 1 February 
2005.  The United States  requests the Panel to reject India's suggestions.  Although acknowledging 
that 35 importers did receive notices prior to publication of the anti-dumping order, the United States considers the notion that the receipt of these no tices constitutes "immediate implementation" to be 
misleading.  Taking both parties' comments into consideration, the Panel has moved information 
contained in footnote 11 into the main body text , but has declined to designate these notices as 
constituting "immediate" or "official" implementation. 
2. One hundred per cent surety collateral requirements 
6.4 Regarding paragraph 2.15, India submits that th e following statement is inaccurate: "at least 
one or more of 250 companies eligible to act as  sureties on bonds securing obligations to US Customs 
has also required certain importers of subject shri mp to post collateral equal to 100 per cent of the 
EBR plus associated fees to secure the in creased bond amounts".  In reference to NFI v. US  (Exhibit 
IND-16, p. 38), India notes the USCIT's statement th at facts (in that case) support the inference that 
sureties require up to 100 per cent security for the EBR.  In particular, as India notes, the USCIT 
indicated that testimony of witnesses for two plai ntiffs in that case corroborated the finding that 
sureties typically require 100 per cent collateral to satis fy the EBR.  In light of this statement, India 
requests the Panel to modify the factual aspects of the report to reflect the USCIT's conclusion.  The 
United States requests the Panel to decline India's su ggestions due to the fact that the proceedings in 
NFI v. US  are ongoing, contain a different factual record and involve questions of US law (and not 
WTO law).  In particular, the United States notes that the findings in NFI v. US  pertain to 8 importers 
and should not be extrapolated.  However, the Unite d States requests the Panel to include evidence 
submitted by India and the United States on the issue of collateral requirements into the relevant 
footnotes.  Taking both parties' comments into cons ideration, the Panel has modified paragraph 2.15 
in order to reflect the parties' views with respect to the overall effect of the EBR on all subject shrimp 
importers/exporters from India, including additional references to Exhibit IND-15.   
3. India's Article X:3(a) as such  claim 
6.5 Regarding paragraph 6.6, India requests that  the Panel include a reference to India's as such 
claim relating to Article X:3(a) of the GATT 1994 .  The United States requests the Panel to reject this 
suggestion.  The Panel notes that, in its Request fo r Establishment, India only claimed that the EBR as 
applied  to subject shrimp is inconsistent with Article  X:3(a), and did not refer to this provision in 
relation to its as such  claims.  Therefore, the Panel considers India's suggested modification without 
basis and rejects it. 
4. The relationship of the Ad Note and the Anti-Dumping Agreement  
6.6 Regarding paragraphs 6.65 – 6.90, India request s that the Panel modify its discussion of the 
relationship between the Ad Note and the Anti-Dumping Agreement  to reflect India's arguments in its  WT/DS345/R 
 Page 13 
 
 
  second oral statement (see India's second oral statement, paras. 40-45).  India argues that, based on 
Article 31(3) of the Vienna Convention, the Ad No te must be interpreted in light of the context 
provided by the Anti-Dumping  and SCM Agreements.   Specifically, India requests the Panel to modify 
the statement in the third sentence of footnote 107 th at "India notes that the Ad Note is not expressly 
implemented through the Anti-Dumping Agreement ".  India would prefer, as provided in paragraph 
6.80 of the Interim Report, that footnote 107 reflect India's argument that the Ad Note is implemented 
through Article 7 of the Anti-Dumping Agreement .  The United States considers India's arguments to 
be fully addressed in paragraphs 6.91 – 6.107 in th e section entitled "contextual considerations".  The 
United States does not object to India's proposed changes to footnote 107, although it considers that the Panel addressed India's argument in paragr aphs 6.91 – 6.95 of the Interim Report. 
6.7 The Panel has made the change requested by India in footnote 107 (113 of its Final Report). 
5. Classification of Appellate Body reasoning as dicta in US – Zeroing (EC)  and US – 
Zeroing (Japan)  
6.8 Regarding paragraph 6.101, India contends th at the Appellate Body's statements in US – 
Zeroing (EC) , footnote 184,  regarding its comments on the US retrospective duty assessment system 
found in footnote 109, are themselves based on the description contained in paragraph's 2.4-2.5 of the 
US – Zeroing (EC)  Panel Report and thus do not constitute dicta  of the Appellate Body.  Instead, 
India contends that the Appellate Body is restating the Panel's analysis.  India thus requests the Panel 
to modify paragraph 6.101 of the Interim Report to  reflect this.  The United States disputes India's 
assertion regarding footnote 184.  The United States notes that obiter dictum  is defined in Ballentine's 
Law Dictionary  (West Publishing, 3d. ed.) as "e xpressions in an opinion of the court which are not 
necessary to support the decision".  The United States submits that, the mere fact that the Appellate 
Body based its comments on paragraphs in the Pane l report has no bearing on whether the Appellate 
Body's comments were necessary to support its actual findings. 
6.9 The Panel sees no need to make the change request ed by India.  Given that panels themselves 
may state dicta , and that the scope of an appeal may be narrower than the scope of panel proceedings, 
the mere fact that the Appellate Body was restating the panel's analysis does not mean ipso facto  that 
the Appellate Body's statement does not constitute obiter dictum . 
6. Text of footnote 203 
6.10 Regarding footnote 203, India requests that the text be amended to read "In its first oral 
submission, India notes that there is no substantiv e difference between amending a provision in a US 
anti-dumping or countervailing duty statute to provide discretion, or simply extending the reach of a 
customs statute, such as 19 USC. § 1623 to confer  discretion".  The United States considers this 
proposed change unnecessary.  Nevertheless, the Un ited States requests the Panel to use the term 
"contends" instead of "notes" if it follows India's suggestion, since the verb "notes" could imply that the statement is one of fact.  The Panel has modified  the text of footnote 203 (of the Final Report) to 
read as follows: "In its first oral submission, Indi a contends that there is  no substantive difference 
between amending a provision in a US anti-dumpi ng or countervailing duty statute to provide 
discretion, or simply extending the reach of a cu stoms statute, such as 19 USC. § 1623 to confer 
discretion". 
7. India's claims under the GATT 1994  and the United States' defence under Article XX(d) 
of the GATT 1994  
6.11 Regarding paragraphs 6.286 – 6.313, India  requests that the Panel address whether the United 
States should be permitted to defe nd the EBR simultaneously under the Ad Note and under Article 
XX(d) of the GATT 1994 , and in any case, whether it should be permitted to defend the EBR under WT/DS345/R 
Page 14  
 
  Article XX(d) since, India submits, the Panel found that Article VI of the GATT 1994  and the Anti-
Dumping Agreement  read together constitute lex specialis .  Finally, India requests the Panel to clarify 
whether the United States should be permitted to defend the EBR under Article XX(d) without having 
invoked footnote 24 of the Anti-Dumping Agreement .  India requests the Panel to address these issues 
as threshold considerations, and in the case that th e Panel considers it appropriate to evaluate the 
United States' defence under Article XX(d), the Panel also evaluate India's as applied claims under 
the GATT 1994.  
6.12 The United States requests the Panel to reject I ndia's proposal to conduct a threshold analysis 
regarding the appropriateness of its Article XX(d) defence.  The United States contends that no basis 
exists in the WTO Agreements to conclude that a Member may not defend a measure under Article 
XX(d) simply because it also responds to a claim unde r the Ad Note.  Accordin g to the United States, 
the analysis under Article XX(d) is independent from that of the Ad Note.  Furthermore, the United 
States disagrees with India's assertion that the Panel should not consider Article XX(d) in view of its 
findings regarding lex specialis .  The United States notes that the Panel found that "Article VI of the 
GATT 1994  and the Ad Note" constitute lex specialis , and not the Anti-Dumping Agreement .  Finally, 
the United States submits that it was not required to invoke footnote 24 of the Anti-Dumping 
Agreement  since the Panel has found the United States in breach of the Ad Note. 
6.13 The Panel is of the view that a respondent in a WTO dispute may simultaneously respond to 
claims presented by the claimant while also raising an affirmativ e defence under a relevant provision 
in Article XX of the GATT 1994 .  The Panel notes that the text of the chapeau to Article XX of the 
GATT 1994  reads: " ... nothing in this Agreement  shall be construed to prevent the adoption or 
enforcement by any contracting party of measures . .. " (emphasis added).  This text does not on its 
face limit a panel from considering an affirmativ e defence under Article XX where it has found a 
violation under a provision of the GATT , including Article VI and/or the Ad Note.  In this regard, the 
Panel recalls its findings that the application of the EBR constitutes specific action against dumping 
which is not in accordance with the provisions of the GATT 1994 since it is inconsistent with the Ad 
Note.  The Panel also considers it proper to analyse the United States' defence under Article XX 
notwithstanding the finding presented in pa ragraph 6.171 that Article VI of the GATT 1994 and the 
Ad Note to Article VI constitute lex specialis .  In the findings, the Panel re fers to Article VI and its 
Ad Note as lex specialis  with respect to the other more general provisions of the GATT 1994  cited by 
India.  The Panel's findings with respect to the applicability of the principle of lex specialis  do not 
refer to a defence under Article XX(d) in order to jus tify a potential violation of Article VI and its Ad 
Note.  Accordingly, the Panel considers additiona l analysis of the United States' Article XX(d) 
defence unnecessary and rejects India's request for re view of our findings on this issue.  For the 
foregoing reasons, the Panel considers it unnecessary to evaluate whether a Member must invoke 
footnote 24 of the Anti-Dumping Agreement  in order to assert an affirmative defence under 
Article XX.   
B. THE UNITED STATES ' COMMENTS ON THE INTERIM REPORT  
1. Typographical errors 
6.14 Regarding paragraph 1.10, the United States requests replacing the phrase "24 and 25 July 
200" with "24 and 25 July 2007".  The Panel has corrected this typographical error. 
6.15 Regarding paragraph 1.11, the United States requests replacing the phrase "9 September 
2007" with "9 October 2007".  The Panel has corrected this typographical error. 
6.16 Regarding paragraph 2.10, the United States subm its that US Customs designates importers of 
certain merchandise, not importers, as "covered cases", and thus requests the Panel to modify the text  WT/DS345/R 
 Page 15 
 
 
  to read: "US Customs implemented the EBR and requ ired select importers of merchandise designated 
as 'covered cases' ...".  The Pane l has corrected this error. 
6.17 Regarding paragraph 6.20 (7.20 of the Final Report), the United States requests replacing the 
phrase "the amendment as issue" with "the amendm ent at issue".  The Panel has corrected this 
typographical error. 
2. Treatment of amendments as part of the measure at issue 
6.18 Regarding paragraph 6.22, the United States constr ues the Panel's reference to the findings of 
the Appellate Body in Chile – Price Band System  as suggesting that, by merely including certain 
language in a panel request regardi ng amendments to measures, a basis would exist to treat a measure 
as part of the measure at issue and within the pane l's terms of reference.  The United States requests 
the Panel to remove the third and final sentences from the paragraph and base the analysis on the 
nature of the measure in question.  India consider s that the third and final sentences are consistent 
with the rationale in Chile – Price Band System .  The Panel has made minor modifications to the text 
in paragraph 6.22 (7.22 of the Final Report) in  order to reflect the rationale presented in Chile – Price 
Band System  that an amendment should not change the essence  of the original measure into something 
different than what was in force before its issuance. 
3. Description of  the United States' argument regarding Article 18.1 of the Anti-Dumping 
Agreement  
6.19 Regarding paragraph 6.37, the United States considers the Panel's description of the US 
argument regarding Article 18.1 of the Anti-Dumping Agreement to be redundant with paragraph 6.34.  
Thus, the United States requests the Panel to delete  the paragraph in its entirety.  The Panel has 
deleted para. 6.37 of the Interim Report. 
4. The EBR formula 
6.20 Regarding paragraph 6.47 (7.46 of the Final Re port), the United States requests the Panel to 
replace the phrase "the formula would be invalid" in the final sentence of this paragraph with "the 
formula would not apply" to more accurately characterise the statute of the EBR formula in relation to 
the directive.  India considers the phrase "the form ula would be invalid" to be appropriate since the 
formula in the Amended CBD is based on the an ti-dumping rate, which thus signifies that the 
constituent elements of dumping are built into the formula. 
6.21 The Panel has made the change re quested by the United States . 
5. The relationship between Article 9.3.1 of the Anti-Dumping Agreement  and retrospective 
duty assessment 
6.22 Regarding paragraphs 6.86, 6.97 and note 114, th e United States requests the Panel to modify 
language to more accurately reflect the relationship between Article 9.3.1 of the Anti-Dumping 
Agreement  and retrospective duty assessment.  First, th e United States suggests that the Panel replace 
the parenthetical that the system is "specifically  authorised by Article 9.3.1" with "which is 
specifically contemplated in Article 9.3.1)".  Second, the United states suggests replacing the 
parenthetical "(which Members are entitled to apply by virtue of Article 9.3.1 of the Anti-Dumping 
Agreement )" with "(which is specifically contemplated by Article 9.3.1 of the  Anti-Dumping 
Agreement )".  India requests the Panel to reject the United States' suggestions since the Panel's 
rationale should be parallel to the reasoning in paragr aph 6.97.  India submits that in paragraph 6.97, 
the Panel concluded that there must be a source of  authorisation for taking security.  Accordingly, 
India submits that the Panel should also identify a source of authorisation for the retrospective WT/DS345/R 
Page 16  
 
  assessment system, and if none, consider the c onsequences of such a finding.  By merely 
contemplating a retrospective assessment system, Indi a submits that it would be  equally plausible to 
presume the drafters had no intention of  enabling Members to require security. 
6.23 The Panel is not persuaded by India's comments,  and therefore sees no reason not to make the 
changes requested by the United States. 
6. Characterisation of the "enhanced" bond requirement 
6.24 Regarding paragraph 6.108 (7.108 of the Final Report), the United States  suggests replacing 
the term "extended" with "enhanced" to d escribe the bonds required under the Amended CBD. 
6.25 The Panel has made the change re quested by the United States. 
7. The legal standard for determining whether or not the application of the EBR resulted 
in "reasonable" security requirements 
6.26 Regarding paragraphs 6.116 – 6.128, the United States proposes a number of changes to 
language that, in its view, could be construed as in consistent with the Panel's positions elsewhere in 
its Report.  First, the United States proposes a number of changes to prevent the Panel from 
incorrectly paraphrasing the reasonableness standard set forth in the Ad Note.  In general, the United 
States proposes to use the formulation "the likeli hood of rates increasing", as the United States 
considers that the term "likely", or "likely amount " (as used by the Panel in the Interim Report), 
suggests that a Member must demonstrate substantial certainty. 
6.27 Second, the United States considers that the Pane l's use of the term "likely" in the Interim 
Report’s discussion of increases in margins could be read to contradict its point elsewhere in the 
report that the information on which security requireme nts must be evaluated is that available “at the 
time that the [requirement]” is imposed, and not ex post  rationalization.
46  The United States recalls 
the Panel's statement in paragraph 6.82 of its In terim Report that, due to the operation of the U.S. 
retrospective duty assessment system, “there is no ce rtainty that imports entering the United States 
following imposition of an anti-dumping order are in fact dumped” and that until assessment “it is not 
possible to state with certainty whether or not those imports are dumped.”  Since likelihood would 
need to be evaluated based on information available to the customs authority at the time the security 
requirement is imposed, the United States has s uggested, for example, changing “determine the 
amount” to “estimate the amount” in paragraph 6.118. 
6.28 Third, the United States asserts that as in “o rdinary cases of customs administration”, there 
may be cases in which an importer has a histor y of defaulting on its obligations such that additional 
security may be the only means available to the Unite d States to ensure that duties are paid, short of 
prohibiting that importer from entering goods entirely.  The United States claims that the Panel failed 
to address US arguments regarding risks of defau lt.  The United States requests that the Panel 
consider clarifying its findings to confirm that it is not finding that a Member is precluded from 
requiring additional security in cases in which principles of ordinary customs administration would so require, such as cases in which importers have a de monstrated history of non-payment of liability 
owed. 
6.29 The United States also asks the Panel to refer to estimates of the "amount" of final dumping 
liability rather than estimates of the amount of the final "rate" of dumping.  The United States asserts 
that since security for antidumping duties (whether  cash deposit or bond) is a quantity based on the 
total dumping liability, which depends both on the ad  valorem rate and the customs value of imports 
                                                     
 
46 Interim Report, para. 6.125.  WT/DS345/R 
 Page 17 
 
 
  entered at a given time, using the term “dumping lia bility” rather than the “rate of dumping” in 
discussing the amount of security that may be required. 
6.30 Regarding para. 6.122 of the Interim Report, the Un ited States asks the Panel to delete certain 
language describing an argument made by the United States early in the proceedings. 
6.31 India requests the Panel to reject the United St ates' suggestions.  Regarding paragraph 6.117, 
India considers changes suggested by the United Stat es to be inconsistent with its argument that the 
final amount of liability is only established following  an administrative review, as opposed to through 
the anti-dumping order.  Regarding the changes suggest ed for paragraphs 6.118, 6.119, 6.122, 6.128, 
6.226 and 6.312, India submits that these changes are inconsistent with the level or rigour of analysis 
that a Member must undertake before taking additi onal security, as discussed in paragraph 6.118.  
India considers the proposed changes to be incons istent with the Panel's conclusion in paragraph 
6.118, last sentence, that the rate in the anti-dum ping order remains the best estimate of suspected 
dumping and a rigorous analysis is necessary to exceed this estimate.  Regarding the changes suggested for paragraph 6.122, India submits that the Panel should retain the United States' assertion 
that "it is not uncommon for assessed duties to excee d cash deposits".  India considers this statement 
to be an omission by the United States, and its re moval is not justified b ased on footnote 29, which 
qualifies this assertion.  Further, India considers that reasoning in paragra phs 6.120 – 6.121 provide 
support to reject the assertion that rates increased 33% of the time.  
6.32 The Panel has made only a limited number of the changes requested by the United States 
regarding this first issue.  In particular, the Pa nel has declined the US suggestion to replace its own 
language with references to "the likelihood of rates increasing", for the United States has failed to 
properly explain the advantages of its formulation ove r that of the Panel.  Generally, the Panel is 
concerned that the changes proposed  by the United States might weaken  the standard that the Panel 
applied, consistent with the Ad Note, in the present ca se.  In particular, the Panel is not persuaded that 
it is inappropriate to expect an investigating author ity to make determinations of what is likely to 
happen in the future.  The Panel is not persuaded by the US suggestion that the standard articulated in 
the Interim Report would require ex post  rationalization.  The Panel considers that an investigating 
authority is required to comply with the applicable  standard by making a pros pective determination of 
the likelihood of rates of dumping increasing on the b asis of the information available to it at the 
relevant time. 
6.33 The Panel declines to make any changes in respect of the US comments on the need to 
consider the risk of default as in “ordinary cases of customs administration”.  The Panel considers that 
it already addressed the principal argument of th e United States regarding risk of default in 
footnote 140 of the Interim Report.  The Panel declin es to further confirm that it is not finding that a 
Member is precluded from requiring additional security in cases in which principles of ordinary customs administration would so require.  The Pane l's findings are based on its interpretation of the 
Ad Note.  The Panel does not have a mandate to co nsider whether or not additional security may be 
imposed under principles of ordinary customs admi nistration.  Although the Ad Note contains the 
phrase "[a]s in many other cases in customs admini stration", the Panel considers that such phrase is 
used for introductory purposes only.  If such phrase had been intended to dictate the substantive 
circumstances under which "reasonable security" could be  imposed under the Ad Note, details of such 
other cases of customs administration would have b een spelled out in the Ad Note in detail. 
6.34
 The Panel accepts the US request to refer to u se the term “dumping liability” rather than the 
“rate of dumping”.  This is because the amount of security is not merely a function of the rate of 
dumping in the anti-dumping order, but also of the cu stoms value of the relevant imports.  The Panel 
is not persuaded by India's concern that such ch anges would be inconsiste nt with the US argument 
that the amount of liability is established finally only  in an administrative review and not in the anti-
dumping order.  As noted at footnote 114 to the In terim Report, the final determination of dumping, WT/DS345/R 
Page 18  
 
  injury and causation is in fact the basis for collecting anti-dumping duties under prospective 
assessment systems.  Regardless of when liability is  actually deemed to arise, Article 9.3.1 of the 
Anti-Dumping Agreement  stipulates that, under both the pros pective and retrospective assessment 
systems, "[t]he amount of the anti-dumping duty shall not exceed the margin" of dumping.  The Panel has modified paras 6.117 and 6.118 of the Interim Report accordingly.  The Panel has not modified 
the reference to "the likely amount of such increase" in para. 6.119 of the Interim Report, in order to 
maintain consistency with the identical phrase in para. 6.118 of the Interim Report (in respect of 
which the United States did not ask the Panel to include references to duty liability).  
6.35 Regarding paragraph 6.226, the United States re quests the Panel to modify the penultimate 
sentence to incorporate modifications suggested fo r paragraphs 6.116-6.218.  Specifically, the United 
States requests that the Panel replace phrasing "that anti-dumping liability was likely to increase" with 
the phrase "that there was a likelihood that anti-dumpi ng liability would increase".  For the reasons set 
forth above in respect of paras 6.116 – 6.128, the Pa nel declines to make the changes requested by the 
United States. 
6.36 Regarding paragraph 6.312, the United States re quests the Panel to modify the fourth and 
sixth sentences to incorporate modifications suggested  for paragraphs 6.116 – 6.128.  Specifically, the 
United States requests that the Panel replace the phr ase "that rates of dumping provided for in the 
anti-dumping order were likely to increase" with the phrase "that there was a likelihood that rates of dumping provided for in the anti-dumping order woul d increase"; and the phrase "without adequately 
establishing that anti-dumping duties are likely to in crease" with the phrase" without adequately 
establishing that there was a likelihood that an ti-dumping duties would increase".  For the same 
reasons discussed above, India requests the Panel to re ject this change. For the reasons set forth above 
in respect of paras 6.116 – 6.128, the Panel declin es to make the changes requested by the United 
States. 
6.37 The Panel has made the deletion requested by th e United States in respect of paragraph 6.122 
of the Interim Report (7.122 of the Final Report), since such deletion does not impact negatively on 
the integrity of its findings. 
8. Challenges to mandatory measures under th e "mandatory/discretionary" distinction 
6.38 Regarding paragraph 6.208, the United Stat es requests the Panel to delete the phrase 
"challenged and" from the last sentence to better re flect the Panel's observations in the subsequent 
paragraph regarding the import of the "mandatory/discretionary" distinction.  The Panel does not find 
this change appropriate, and thus  declines to amend the text. 
6.39 Regarding paragraph 6.226, the United States re quests the Panel to modify the penultimate 
sentence to incorporate modifications suggested fo r paragraphs 6.116-6.218.  Specifically, the United 
States requests that the Panel replace phrasing "that anti-dumping liability was likely to increase" with 
the phrase "that there was a likelihood that anti-dumpi ng liability would increase".  For the reasons set 
forth above in respect of paras 6.116 – 6.128, the Pa nel declines to make the changes requested by the 
United States. 
9. Consistency between DS343 and DS345 
6.40 The Panel has also made a number of changes to  paras 6.98, 6.109, 6.121 and footnote 143 of 
the Interim Report, to maintain consistency with its findings in United States – Measures Relating to 
Shrimp from Thailand  (DS 343).  The Panel included paragraph 7.81 in its Final Report for the same 
reason.  WT/DS345/R 
 Page 19 
 
 
  VII. FINDINGS 
A. PRELIMINARY ISSUES  
1. Parallel panel proceedings in DS343 and DS345 
7.1 This Panel was established by the DSB at its meeting on 21 November 2006.  One month 
earlier, on 26 October 2006, the DSB had establishe d a separate Panel in the dispute (DS343) US – 
Shrimp (Thailand ) the terms of reference of which also incl uded the application of the EBR to imports 
of subject shrimp.  At the DSB meeting where the present Panel was established, Thailand stated that 
it had expected the establishment of a single Panel for both proceedings in accordance with Article 9.1 
of the DSU.  In the absence of that single Panel, Thailand indicated that, pursuant to Article 9.3 of the 
DSU , it expected that the same persons would be ap pointed as panelists in the two disputes and that 
the timetables would be harmonized.  The represen tative of the United States responded that, although 
the Panel in DS343 had already been established, th e same persons could be appointed to serve as 
panelists in the two proceedings and the timetab les of the separate Panels could be harmonized. 
7.2 The meetings to appoint the same members for th is Panel and that of DS343 were held jointly 
between the two separate complainants, India an d Thailand, and the common defendant, the United 
States.  Since the parties were unable to agr ee on panelists to serve for these proceedings, on 19 
January 2007, Thailand and India requested, in separat e letters, that the Director-General determine 
the composition of the Panel pursuant to Article 8.7 of the DSU, and select the same persons to serve 
as panelists for both proceedings, pursuant to Article 9.3 of the DSU .  On 26 January 2007, the 
Director-General composed two separate Panels consisting of the same members. 
7.3 On 9 February 2007, India and Thailand sent sep arate letters to the Chairman of the two 
Panels requesting enhanced third party rights in each  other's proceedings.  On  15 February 2007, the 
Chairman met with the parties in a joint organi zational meeting to hear comments on the proposed 
Timetable and Panel Working Procedures.  At that meeting, as well as in a letter dated 
16 February 2007, the United States argued that gran ting enhanced third party rights to Thailand and 
India was not necessary in the instant cases.   
7.4 After having heard the parties' views, the Pane l decided not to grant enhanced third party 
rights to India and Thailand but instead, opted for a practical approach aimed at ensuring that the 
parties to both disputes enjoyed adequate opportuni ty to participate in the proceedings where 
appropriate.  On 23 February 2007, the Panel sent to  the parties a joint Timetable as well as separate, 
albeit similarly worded, Working Procedures .  In this joint communication, the Panel informed the 
parties that it had decided the following: 
"[The Panel] intends to conduct both proceedi ngs so as to ensure that the parties who 
are also third parties in each other's pr oceedings, have adequate opportunity and 
ability to participate to the fullest extent in a manner which is compatible with the 
provisions of the DSU .  To this end, after having hear d the parties' views, the Panel 
intends to take the following steps: 
(i) holding consolidated substan tive meetings with the parties 
(Thailand, India and US); 
(ii) allowing the complainants during the joint meetings to 
comment on each others' argumentation, provided they limit themselves to those claims they have in common; WT/DS345/R 
Page 20  
 
  (iii) holding separate Third-Party Sessions, starting with DS343 
and asking the Members which are not third-parties to DS345 (i.e., Chile, Mexico, Korea and Viet Nam) to leave the meeting room once the Third-Party Session for DS343 is over.  Note that since Thailand and India are third parties to each other's cases, and parties in their 
own, they would be in the room during the entirety of the joint 
meetings, including third party sessions;  
(iv) not allowing submissions in one case to be deemed to be 
submitted in the other case.  The parties could however attach to their third party submissions, their submissi ons made as parties in the case 
in which they are complaining party;  
(v) issuing separate reports;   (vi) allowing all parties to respond to all questions posed by the 
Panel in writing." 
2. Overview of the Panel's approach to consideration of India's claims 
7.5 India has made two types of claims concerning the EBR:  (i) It has challenged as such  the 
laws, regulations and instruments of the United St ates that comprise the Amended CBD and authorize 
the imposition of the EBR, together with a US statutory provision (19 U.S.C. § 1623) and a US Customs regulation (19 C.F.R. § 113.13); and (ii) it has challenged the application of the Amended 
CBD, i.e. the imposition of the EBR, to subject shrimp from India. 
7.6 India's as such claims concern: the consistenc y of the Amended CBD and the 
abovementioned US statutory and regulatory pr ovisions with Articles 1 and 18.1 of the Anti-Dumping 
Agreement  and Articles 10 and 32.1 of the SCM Agreement ; their consistency with Article VI and the 
Ad Note; their consistency with Ar ticles 7.1(iii), 7.2 and 7.4 of the Anti-Dumping Agreement  and 
Articles 17.1(c), 17.2 and 17.4 of the SCM Agreement ; their consistency with Articles 9.1, 9.2, 9.3, 
and 9.3.1 of the Anti-Dumping Agreement  and Articles 19.2, 19.3, and 19.4 of the SCM Agreement ; 
their consistency with Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the SCM 
Agreement  and Article XVI of the WTO Agreement ; their consistency with Articles I, II:1(a) and 
II:1(b), first and second sentences, of the GATT 1994 ; and, in the alternative, their consistency with 
Article XI of the GATT 1994 .   
7.7 As regards its as applied  claims, India challenges the c onsistency of the EBR with the 
provisions of Articles 1, 7.1(iii), 7.2, 7.4, 7.5, 9.1, 9.2, 9.3, 9.3.1 and 18.1 of the Anti-Dumping 
Agreement , and Articles I:1, II:1(a) and (b), VI:2 , X:3(a) of the GATT 1994 , and alternatively, 
Articles XI:1 and XIII of the GATT 1994 . 
7.8 India also claims that the United States has acted inconsistently with Article 18.5 of the Anti-
Dumping Agreement  and Article 32.6 of the SCM Agreement  by not notifying the Amended CBD to 
the Anti-Dumping and SCM Committees. 
7.9 The Panel notes that India, in its Request for Establishment, additionally made claims under 
Articles 2.2, 2.3 and 2.4 of the Anti-Dumping Agreement , as such and as applied ; Articles 1 and 14 of 
the SCM Agreement,  as such ; Article 7.5 of the Anti-Dumping Agreement,  as such ; and Article 17.5 of 
the SCM Agreement, as such .  However, India did not present arguments nor request Panel findings  WT/DS345/R 
 Page 21 
 
 
  on these claims in any of its submissions.  The Pa nel will therefore not address these claims in its 
Report.47  
3. Order of analysis 
7.10 India has presented its as such and as applied claims sometimes together, and in other 
instances separately.  The Panel, fo r the sake of clarity and consistency with the parallel proceedings 
in DS343 US – Shrimp (Thailand)48, has decided first to address India's as applied  claims followed by 
the consideration of its as such claims.  Finally, we will consider India's claim under Article 18.5 of 
the Anti-Dumping Agreement  and Article 32.6 of the SCM Agreement.  
B. INDIA 'S AS APPLIED CLAIMS  
1. Scope of the measure concerned 
7.11 India's as applied  claims concern the application of the Amended CBD, i.e. the EBR, to 
imports of subject shrimp from India.  Before  entering into an analysis of each of the as applied  
claims raised by India, the Panel first must iden tify which are the legal instruments that comprise the 
Amended CBD.   
7.12 We recall that the terms of reference that  govern the present dispute are the following: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by India in document WT/DS345/6, the matter referred to the DSB by India in that document, and to make such finding s as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements." 
49 
7.13 In its Request for Establishment, India specified  that the measure at issue consists of the 
following legal instruments:50  
(a) the 1991 Customs Bond Directive; 
(b) the July 2004 Amendment;51 
(c) the document Current Bond Formulas;52  
(d) the August 2005 Clarification;53 and 
(e) "any amendments, clarifications, or extens ions to these measures and all related or 
implementing measures (together, the 'Amended CBD') issued by US Customs."54   
                                                      
47 The Panel further notes that, in its first written subm ission, India requested the Panel to find that the 
application of the EBR violates Article 7.5 of the Anti-Dumping Agreement .  However, India did not present any 
arguments for this claim.  Accordingly, the Pane l declines to make any findings for the claim. 
48 Section VII.A.1 concerning the organization of the parallel proceedings. 
49 WT/DS345/7. 
50 India's first written submission, para. 17.  We note th at India has explained in its first oral statement 
that, although it had referred interchangeably to the Amended CBD and EBR in the context of its as such  
claims, its claim only addresses the Am ended CBD "to the extent that it authorize s, imposes and describes the 
EBR".  (See India's first oral statement, para. 14). 
51 Exhibit IND-3. 
52 Exhibit IND-4. 
53 Exhibit IND-5. 
54 India's first written submission, para. 17. WT/DS345/R 
Page 22  
 
  7.14 In its first written submission, India submitte d to the Panel that the October 2006 Notice,
55 
which was published on 24 October 2006 followi ng the submission of India's Request for 
Establishment, should also be considered as one  of the instruments comprising the Amended CBD.56  
The United States has not contested the inclusion of the October 2006 Notice within this Panel's terms 
of reference. 
7.15 We recall that the Appellate Body has ruled that  panels have a duty to examine issues of a 
"fundamental nature", issues that go to the root of their jurisdiction, on their own motion if the parties to the dispute remain silent on those issues.
57  Whether a measure falls within our terms of reference is 
clearly an issue that goes to the root of our jurisdiction.  Theref ore, even though the United States 
does not contest the inclusion of the October 2006 No tice, we must determine whether this Notice is 
within our terms of reference.   
7.16 Article 7 of the DSU , governing the Panel's terms of reference, Article 4 of the DSU , 
governing a complainant's request for consultations, and Article 6 of the DSU , governing a 
complainant's request for establishment of a panel ar e relevant to this issue.  Article 7.1 of the DSU  
provides: 
"Panels shall have the following terms of reference unless the parties to the dispute 
agree otherwise within 20 days from the establishment of the panel: 
To examine, in the light of the relevant provisions in (name of the 
covered agreement(s) cited by the parties to the dispute), the matter referred to the DSB by (name of party) in document ... and to make such findings as will assist the DSB in making the recommendations 
or in giving the rulings provided  for in that/those agreement(s)." 
7.17 Article 4.4 of the DSU  provides: 
"All such requests for consultations shall be notified to the DSB and the relevant 
Councils and Committees by the Member wh ich requests consultations. Any request 
for consultations shall be submitted in writing and shall  give the reasons for the 
request,  including identification of the measures at issue and an indication of the 
legal basis for the complaint."(emphasis added) 
7.18 Article 6.2 of the DSU  provides: 
"The request for the establishment of a pa nel shall be made in writing. It shall 
indicate whether consultations were held, identify the specific measures at issue and 
provide a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly. In case the applicant request s the establishment of a panel with other 
than standard terms of reference, the writte n request shall include the proposed text of 
special terms of reference."(emphasis added). 
7.19 The Appellate Body affirmed in US – Upland Cotton  that, "pursuant to Article 7 of the DSU , 
a panel's terms of reference are governed by  the request for establishment of a panel".
58  As evident 
                                                      
55 Exhibit IND-6. 
56 India's first written submission, para. 18. 
57 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 36; see  also Appellate Body 
Report, US – Carbon Steel , para 123. 
58 See e.g. Appellate Body Report, US – Upland Cotton , para. 284, citing Appellate Body Report, US – 
Carbon Steel , para. 124.  WT/DS345/R 
 Page 23 
 
 
  from the text of Articles 4 and 6 of the DSU , the complainant must identif y the measure at issue in 
both the request for consultations and request for panel establishment.   
7.20 The Appellate Body considered in Chile – Price Band System  whether an amendment to a 
measure that was enacted after  the Panel had been established should nevertheless be considered as 
within the Panel's terms of reference.59  In that case, the Appellate Body determined that the 
amendment at issue should be considered as part of  the measure at issue since the amendment served 
the purpose of clarifying the legislation that establis hed the measure at issue and did not change the 
original measure into something different th an what was in force before the amendment.60  T h i s  
determination was considered consis tent with earlier jurisprudence61 and was also found to be 
consistent with the object and purpose of the WTO dispute settlement system, as set forth in 
Article 3.7 of the DSU , to "secure a positive solution to a dis pute".  The Appellate Body explained: 
"If the terms of reference in a dispute ar e broad enough to include amendments to a 
measure—as they are in this case—and if it is necessary to consider an amendment in 
order to secure a positive solution to the di spute—as it is here—then it is appropriate 
to consider the measure  as amended  in coming to a decision in a dispute."62 
7.21 In the case before us, we note that the Oct ober 2006 Notice further describes the process to 
determine enhanced continuous bond amounts for importations involving what the United States 
describes as elevated collection risks, and seeks pub lic comment concerning that process.  We also 
note that the United States describes the 2006 Noti ce as the "comprehensive and exclusive statement 
of the policy and processes expressed in the July 2004 Amendment to the Bo nd Guidelines, the Bond 
Formulas posted on CBP's Web site, and the August 2005 Clarification".63  In addition, we note that 
neither India or the United States stated that the 2006 Notice should be excluded when asked directly 
whether the Panel should consider the 2006 Notice within its terms of reference.64  Instead, both India 
and the United States agreed to the October 2006 Noti ce's inclusion and both referred to the Appellate 
Body's findings in Chile – Price Band System in this regard.65   
7.22 We agree with and adopt as our own the A ppellate Body's rationale as provided in Chile – 
Price Band System .  In the dispute before us, the Unite d States published the October 2006 Notice 
after this Panel had been establishe d.  Moreover, in our view, India's inclusion of the language "any 
amendments, clarifications, or extensions to th ese measures and all related or implementing measures 
(together, the 'Amended CBD') issued by US Custom s" in its Request for Establishment is broad 
enough to allow for the inclusion of the 2006 Notice.  The October 2006 Notice seeks to clarify the 
legislation that established the measure at issue and does not change the essence of the original 
                                                      
59 Appellate Body Report, Chile – Price Band System, para. 137. 
60 Appellate Body Report, Chile – Price Band System, para. 137. 
61 The Appellate Body in Chile – Price Band System  cited to a passage from the Panel's finding in 
Argentina – Footwear (EC)  which concluded that modifications made to the measure at issue during the panel 
proceedings did:  
 "… not constitute entirely new safeguard measur es in the sense that they were based on a 
different safeguard investigation, but are instead modifications of the legal form of the 
original definitive measure, which remains in force in substance and which is the subject of the complaint."   
(See Appellate Body Report, Chile – Price Band System , para. 138.) 
62 Appellate Body Report, Chile – Price Band System, para. 144. 
63 See Exhibit IND-6, p. 62,277. 
64 India's responses to First Set of Panel Questions, paras. 51 and 52, United States' responses to First 
Set of Panel Questions, para. 65. 
65 India's responses to First Set of Panel Questions, pa ra. 51 and United States' responses to First Set of 
Panel Questions, para. 55. WT/DS345/R 
Page 24  
 
  measure into something different than what was in force before its issuance (in this regard, we recall 
that the October 2006 Notice includes in its text the statement that it is the "comprehensive and 
exclusive statement of the policy and processes e xpressed in the July 2004 Amendment to the Bond 
Guidelines, the Bond Formulas posted on [U S Customs'] Web site, and the August 2005 
Clarification").  In our view, the inclusion of October 2006 Notice allows the Panel to achieve a 
positive resolution to the dispute, and additionally,  accords with the interests of both parties.   
7.23 The Panel therefore finds that the October 2006 No tice is properly part of the measure at issue 
and within the Panel's te rms of reference.   
2. Articles 1 and 18.1 of the Anti-Dumping Agreement , and the Ad Note  
7.24 India claims that the application of the EBR to subject shrimp is inconsistent with Articles 1 
and 18.1 of the Anti-Dumping Agreement  and the Ad Note thereto.  We shall begin by assessing 
India's claim under Article 18.1 of the Anti-Dumping Agreement . 
7.25 For the most part, the issues arising in resp ect of India's Article 18.1 claim under these 
proceedings are the same as those that we consider ed in the context of the same claim made by 
Thailand in US – Shrimp (Thailand) .  This is reflected in the fact that there is significant overlap in 
the arguments of India and Thailand regarding these issues.
66  Similarly, the arguments made by the 
United States in respect of this claim are virtually id entical to the arguments that it made in respect of 
the same claim in US – Shrimp (Thailand) .67  As a result, the findings that we make in respect of 
India's Article 18.1 claim closely resemble those that we made in respect of the same claim by 
Thailand in US – Shrimp (Thailand).  
7.26 India submits that the application of the EBR to subject shrimp from India is inconsistent with 
Articles 1 and 18.1 of the Anti-Dumping Agreement .  Article 1 provides that: 
"An anti-dumping measure shall be applie d only under the circumstances provided 
for in Article VI of GATT 1994  and pursuant to investigations initiated ( footnote 
omitted ) and conducted in accordance with the provisions of this Agreement. The 
following provisions govern the application of Article VI of GATT 1994 in so far as 
action is taken under anti-dumping legislation or regulations." 
7.27 Article 18.1 provides that: 
"No specific action against dumping of expor ts from another Member can be taken 
except in accordance with the provisions of GATT 1994 , as interpreted by this 
Agreement." 
7.28 India submits that the application of the EBR to  subject shrimp from India constitutes specific 
action against dumping in a form other than a perm itted response to dumping under the provisions of 
the GATT 1994  as interpreted by the Anti-Dumping Agreement .  The United States rejects India's 
claim. 
7.29 We begin our evaluation of India's claim by cons idering whether or not the application of the 
EBR constitutes "specific action against dumping".  Ther eafter, we turn to the issue of whether or not 
                                                      
66 E.g. at para. 79 of its second written submission, In dia refers to "the differences in interpretation of 
the Ad Note between India and Thailand, on the one hand, and the United States, on the other," thereby 
indicating that India and Thailand share the same interpretation of the Ad Note. 
67 This is further reflected in the fact that the oral statement made by the United States at each of our 
substantive meetings with the parties addressed the claims of India and Thailand jointly.  WT/DS345/R 
 Page 25 
 
 
  the EBR is applied "in accordance with the provisions of the GATT 1994 , as interpreted by" the 
Anti-Dumping Agreement . 
(a) Does the application of the EBR constitute "specific action against dumping"? 
(i) Main arguments of India 
7.30 India asserts that the application of the E BR constitutes "specific action against dumping" 
because it is (i) "specific action" in response to  dumping that (ii) also acts "against" dumping. 
"Specific action" in response to dumping 7.31 India submits that the Appellate Body has defined "specific action" against dumping or 
subsidization as "action that is taken in response to situations presenting the constituent elements"
68 of 
dumping or subsidization and has explained further th at the measure must "… be inextricably linked 
to or have a strong correlation with the constituent el ements of dumping or of a subsidy.  Such a link 
… may be derived from the text of the measure itself."69  India asserts that it is indisputable that the 
EBR is "specific" to dumping or subsidization because the Amended CBD expressly states that it applies only to importers of designated merchandise that is subject to anti-dumping or countervailing 
duties, i.e., when all the conditions for imposition of anti-dumping or countervailing duties have been 
fulfilled.  India asserts that, accordingly, and as th e United States argued before the Appellate Body in 
US – Offset Act (Byrd Amendment) , to the extent that the EBR "… imposes … liability on 
importers/producers/exporters when  dumping or subsidization is found …", it is clearly "specific 
action" with respect to dumping and subsidization.
70  India states, in addition, that one important 
element of the formula for calculating the bond lia bility amount is the amount of anti-dumping or 
countervailing duties owed based on the dumping marg in or the individual ne t subsidy rate.  India 
submits that there is therefore clearly an inex tricable link between the EBR and the constituent 
elements of dumping or of a subsidy.  India also not es that one of the stated purposes of the EBR is to 
ensure that anti-dumping and countervailing duties are collected for payment to domestic industry under the Continued Dumping and Subsidy Offset Ac t (hereafter the "CDSOA"), which the Appellate 
Body has found to be a "specific action" against dumping or subsidization.  According to India, 
regulations or administrative procedures by US Customs to implement the CDSOA also constitute 
specific action against dumping. 
Specific action "against" dumping 7.32 India asserts that, to be "against" dumping, the measure must have "…an adverse bearing on, 
or more specifically, [have] the effect  of dissuading the practice of dumping …."
71  India asserts that 
the application of the EBR has a serious, adverse impact on importers and, therefore, on dumping.  
India asserts that the demand of 100 per cent collate ral by sureties acceptable to US Customs for the 
issuance of enhanced bonds, together with high bo nd premiums and other charges associated with 
providing the collateral, impose a heavy burden on importers.  India further asserts that the bonds 
initially posted by importers inevita bly get exhausted or saturated well before the first administrative 
review and liquidation of entries are completed, w ith the result that importers are forced to post 
additional, enhanced bonds.  India states that su reties again subject importers to additional demands 
for collateral and high bond premiums, which result in further charges and further depletion of their 
capital and credit.  Relying on findings of the USCIT,  India asserts that importers are forced to incur 
serious losses in profits and business opportunities.  India argues that this in turn has a serious 
                                                      
68 Appellate Body Report, US – 1916 Act . 
69 Appellate Body Report, US – Offset Act (Byrd Amendment) , para 239. 
70 Appellate Body Report, US – Offset Act (Byrd Amendment) , paras. 16-17. 
71 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 254. WT/DS345/R 
Page 26  
 
  deterrent effect on exporters of the merchandise subject to the EBR 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. 
(ii) Main arguments of the United States 
7.33 The United States denies that the application of the EBR is either "specific action" in response 
to dumping, or specific action "against" dumping. 
"Specific action" in response to dumping 7.34 Regarding India's argument that the EBR is specific to dumping because it may be and has 
been applied only to importers of goods subject to a US anti-dumping order and the formula it 
contains uses the anti-dumping rate as one variable  in determining the amount of additional security 
that may be prescribed, the United States asserts that  these features merely reflect the fact that the 
directive is, like various measures refe rred to by the Appellate Body in US – Offset Act (Byrd 
Amendment) , "related to" dumping or subsidies insofa r as the unsecured liability it is designed to 
secure is anti-dumping and countervailing duty liability .  The United States asserts that, according to 
the Appellate Body, "an action that is not 'specific' within the meaning of Article 18.1 of the 
Anti-Dumping Agreement  and of Article 32.1 of the SCM Agreement , but is nevertheless related to 
dumping or subsidization, is not prohibited by Article 18.1 of the Anti-Dumping Agreement  or 
Article 32.1 of the SCM Agreement ."
72  The United States asserts that the directive is applied in 
response to noncollection risk – the mere fact that th e particular noncollection risk at issue relates to 
anti-dumping duties is not a sufficient basis to conclude  that the directive itself is "taken in response 
to the constituent elements of dumping or a subsid y."  The United States submits that "the constituent 
elements of 'dumping'" are not "built into the essential elements" of the additional bond directive,73 
since US Customs does not determine anti-dumping or countervailing duty margins, and the directive 
does not purport to establish margins of dumping or s ubsidization.  The United States also asserts that 
the additional bond directive does not apply to a ll entries subject to anti-dumping or countervailing 
duties – rather it only applies to those for which a sp ecific noncollection risk has been identified.  The 
United States submits that the sole reason the dir ective is designed to secure anti-dumping liability is 
because the vast majority of unsecured liability th at has resulted in noncollection happens to be 
anti-dumping duty liability . 
7.35 According to the United States, the fact th at the additional bond directive is based on 
noncollection risk, rather than the constituent elemen ts of dumping or subsidization, is evident in the 
text of the directive itself and associated materi als.  The United States asserts that none of the 
information US Customs uses to determine that  merchandise should be identified as "special 
category" merchandise subject to the amended dir ective – previous collection problems, payment 
history, indications that the liquidated duty rates may exceed existing security – has any relation to the 
constituent elements of dumping or subsidization.74  Likewise, none of the information US Customs 
requests for purposes of establishing individual bond amounts – prior history of paying import duties, 
the value of the merchandise to be secured, the de gree of supervision US Customs exercises over the 
transaction, the prior record of the importer in honouring bond commitments, and evidence of the 
importer's ability to pay duties assessed – has any bearing on the constituent elements of dumping or 
subsidization.75  The United States submits that all of these factors are, however, relevant to 
establishing noncollection risk. 
                                                      
72 Appellate Body Report, US – Offset Act (Byrd Amendment ) , para. 262. 
73 Appellate Body Report, US – 1916 Act , para. 130. 
74 Exhibit IND-6 at 62,277.   
75 Exhibit IND-6 at 62,277.  WT/DS345/R 
 Page 27 
 
 
  7.36 The United States acknowledges that the formul as for determining bond amounts incorporate 
the anti-dumping rate, but only because from the standpoint of US Customs it is the best and only available baseline proxy of duties that ultimately may be assessed.  According to the United States, 
the inclusion of the anti-dumping rate in the form ulas thus does not support the conclusion that the 
directive itself relies on the constituent elements of dumping or subsidization. 
Specific action "against" dumping 
7.37 The United States asserts that the sole evidence that India cites in support of its argument that 
the directive operates "against" dumping is  either inaccurate or irrelevant.   
7.38 First, the United States asserts that the record  does not support India's assertion that the 
directive reduced shipments from countries subject to it.
76  The United States refers to the USGAO 
Report, which indicates that the effects of the bond directive "cannot readily be isolated from other 
changes occurring at the same time, such as the imposition of AD duties."77 
7.39 Second, with regard to India's argument concer ning surety fees, the United States asserts that 
US Customs neither sets surety fees, nor requires importers to post collateral in support of bonds. The 
United States argues that US Customs is a third pa rty beneficiary to bond contracts, which are private 
contracts negotiated between the surety and the im porter.  The United States further asserts that US 
Customs neither requested nor encouraged sureties to  require collateral with respect to the bonds at 
issue. 
7.40 Furthermore, the United States asserts that the Appellate Body noted in US – Offset Act (Byrd 
Amendment )  that "a measure cannot be against dumping or a subsidy simply because it facilitates or 
induces the exercise of rights that are WTO-consistent."78  According to the United States, the 
GATT 1994  and the Anti-Dumping Agreement  do not prohibit the United States from obtaining 
payment for the anti-dumping duties in question, an d the bond requirement facilitates its ability to do 
so. 
(iii) Evaluation by the Panel 
7.41 In considering the text of Article 18.1 of the Anti-Dumping Agreement , we note that the 
relevant language was considered in  detail by the Appellate Body in US – Offset Act (Byrd 
Amendment) .  In that case, the Appellate Body found: 
"Looking to the ordinary meaning of the words used in these provisions, we read 
them as establishing two conditions precedent th at must be met in order for a measure 
to be governed by them.  The first is that a measure must be "specific" to dumping or 
subsidisation. The second is that a measure must be "against" dumping or 
subsidisation.  These two conditions operate together and complement each other.  If 
they are not met, the measure will not be governed by Article 18.1 of the Anti-
Dumping Agreement   or by Article 32.1 of the  SCM Agreement .  If, however, it is 
established that a measure meets these two c onditions, and thus falls within the scope 
of the prohibitions in those provisions, it would then be necessary to move to a 
further step in the analysis and to determ ine whether the measure has been "taken in 
accordance with the provisions of the GATT 1994 ", as interpreted by the  Anti-
Dumping Agreement   or the  SCM Agreement .  If it is determined that this is not the 
                                                      
76 India's first written submission, para. 62. 
77 USGAO Report, p. 24, Exhibit IND-26.   
78 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 258.   WT/DS345/R 
Page 28  
 
  case, the measure would be inconsistent with Article 18.1 of the  Anti-Dumping 
Agreement   or Article 32.1 of the  SCM Agreement ."
79 
7.42 We agree with this analysis by the Appellate Body, and adopt it as our own.  Accordingly, in 
order to establish whether the application of the EBR constitutes "specific action against dumping", 
we shall first examine whether or not the application of the EBR is " specific " to dumping.  If so, we 
shall then consider whether or not  the application of the EBR acts " against " dumping. 
Whether or not the application of the EBR is "specific" to dumping 7.43 The degree of specificity needed for action to  fall within the scope of Article 18.1 was 
addressed by the Appellate Body in US – 1916 Act  and US – Offset Act (Byrd Amendment) .  In its 
report in US – 1916 Act , the Appellate Body found that: 
"[T]he ordinary meaning of the phrase "specific action against dumping" of exports 
within the meaning of Article 18.1 is action that is taken in response to situations 
presenting the constituent elements of "dumpi ng".  "Specific action against dumping" 
of exports must, at a minimum, encompass action that may be taken  only when the 
constituent elements of "dumping" are present."
80  
7.44 In US – Offset Act (Byrd Amendment), the Appellate Body explained further that: 
"The criterion we set out in US – 1916 Act  for specific action in response to dumping 
is not whether the constituent elements of  dumping or of a subsidy are explicitly 
referred to in the measure at issue, nor wh ether dumping or subsidization triggers the 
application of the action, nor whether th e constituent elements of dumping or of a 
subsidy form part of the essential components of the measure at issue.  Our analysis  
in US – 1916 Act  focused on the strength of the link between the measure and the 
elements of dumping or a subsidy.  In other words, we focused on the degree of correlation between the scope of applica tion of the measure and the constituent 
elements of dumping or of a subsidy.  In  noting that the "wording of the 1916 Act 
also makes clear that these actions can be taken  only  with respect to conduct which 
presents the constituent elements of 'dumping'", we did not  require   that the language 
of the measure include the constituent elements  of dumping or of a subsidy.  This is 
clear from our use of the word "also", whic h suggests that this aspect of the 1916 Act 
was a supplementary reason for our finding, and not the basis for it.  Indeed, we required that the constituent elements of dumping (or of a subsidy) be "present", 
which in our view can include cases where the constituent elements of dumping and 
of a subsidy are implicit in the measure."
81  
7.45 We agree with the Appellate Body's interpreta tion of the phrase "specific action", and adopt it 
as our own.  Accordingly, we shall determine whethe r or not the application of the EBR is "specific" 
to dumping by examining whether or not the applicati on of the  EBR is inextricably linked to, or has a 
strong correlation with, the constituent elements of dumping. 
                                                      
79 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 236. 
80 Appellate Body Report, US – 1916 Act , para. 122 (footnote omitted, original emphasis).  Although 
the Appellate Body's finding refers to the phrase "specific action against dumping" in its entirety, the Appellate 
Body confirmed in US – Offset Act (Byrd Amendment)  (para. 245) that its finding concerned the phrase "specific 
action", rather than the word "against". 
81 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 244 (footnote omitted).  WT/DS345/R 
 Page 29 
 
 
  7.46 In our view, the constituent elements of dumping are implicit in the express conditions for the 
application of the EBR, since the EBR may be applied only to goods subject to a US anti-dumping (or countervailing) duty order.
82  If there were no finding that the constituent elements of dumping were 
present, there would be no anti-dumping order against subject shrimp, and therefore no basis for applying the EBR in respect of subject shrimp imports.  For this reason, the existence of the 
constituent elements of dumping is a le gal pre-requisite for the application of the EBR.  This is further 
confirmed by the fact that the formula in the Amended CBD for calculating the EBR includes direct 
reference to the anti-dumping duty rate, and theref ore the constituent elements of dumping.  If the 
constituent elements of dumping were not present, the US would not have found cause to determine 
an anti-dumping rate, and the formula would not apply. 
7.47 We note the US argument that although the application of the EBR may be related to 
dumping, the application of the EBR is not "specific" to dumping because it is based on non-collection risk rather than the constituent elements  of dumping, in the sense that the EBR does not 
"apply to all entries subject to anti-dumping or c ountervailing duties – but only to those for which a 
specific non-collection risk has been identified".  We recall, though, that the Appellate Body has 
already determined
83 that a measure need not be triggered  by the constituent elements of dumping in 
order for that measure to constitute "specific action"  in respect of dumping.  Nor does the existence of 
"additional requirements" transform a "specific action against dumping" into something else.84  Even 
though the application of the EBR might ultimately be triggered by a risk of non-collection, the fact 
remains that the EBR is only applied in respect of imports subject to anti-dumping (or countervailing 
duty) orders.  There remains, therefore, a significan t degree of correlation between the application of 
the EBR and the constituent elements of dumping.  In our view, such a degree of correlation 
demonstrates that the application of the EBR is "sp ecific", rather than merely related, to dumping. 
Whether or not the application of the EBR acts "against" dumping 7.48 In our view, a measure will only act "against" dumping if it has some form of adverse bearing 
on dumping.  This is consistent with th e approach of the Appellate Body in US – Offset Act (Byrd 
Amendment) , where it found that: 
"[T]o determine whether a measure is 'against ' dumping or a subsidy, [] it is necessary 
to assess whether the design and structure of a measure is such that the measure is 'opposed to', has an adverse bearing on, or, more specifically, has the effect of 
                                                     
 
82 The United States has not disputed the factual accu racy of India's argument  (see India's first written 
submission, para. 60) that the July 2004 Amendment limits the application of the EBR to merchandise upon which USDOC has issued an anti-dumping order, setting ou t that "[a]ny increase in bond liability will become 
effective when the Department of Commerce (DOC) issues  its Order on the case", and that the August 2005 
Clarification characterises the July 2004 Amendment as  containing "specific guidelines for bonds covering 
certain merchandise subject to antidumping/countervailing duty cases ". 
83 US – Offset Act  (Byrd Amendment) (para. 243), the Appellate Body found that the relevant measure 
constituted "specific action against dumping" notwithstanding the US argument that the relevant measure was not triggered by the constituent elements of dumping, but ra ther by an applicant's qualification as an "affected 
domestic producer" which has incurred qualifyi ng expenditures.  We further recall that in US – 1916 Act , the 
Appellate Body held that "an additional requirement" for th e taking of action (in that case, a finding of intent) 
did "not transform the 1916 Act into a statute which does not provide for 'specific action against dumping'" 
(Appellate Body Report , US – 1916 Act , para. 132). 
84 In US – 1916 Act , the Appellate Body held that "an additional requirement" for the taking of action 
(in that case, a finding of intent) did "not transform the 1916 Act into a statute which does not provide for 
'specific action against dumpi ng'" (Appellate Body Report, US – 1916 Act , para. 132). WT/DS345/R 
Page 30  
 
  dissuading the practice of dumping or the practice of subsidization, or creates an 
incentive to terminate such practices."
85 
7.49 In light of the ordinary meaning of the term "a gainst", we consider it appropriate to adopt a 
similar approach in determining wh ether or not the application of the EBR acts "against" dumping.  In 
doing so, we note that the Appellate Body concluded that the measure at issue in US – Offset Act 
(Byrd Amendment) had an adverse bearing on the foreign prod ucers/exporters because it "created an 
incentive" for those foreign producers/exporters "not to engage in the practice of exporting dumped or 
subsidized products or to terminate such practices".86  In our view, a similar incentive arises as a result 
of the application of the EBR on imports of subjec t shrimp.  Ordinarily, the application of the EBR 
results in additional costs87 that, although initially borne by impor ters, ultimately impact on foreign 
producers/exporters of the subject merchandise, just as anti-dumping duties do.88  As a result of the 
formulas used to calculate the amount of the EBR, the amount of the EBR, like the amount of anti-dumping duty, is directly linked to a given fore ign producer's/exporter's margin of dumping.  The 
higher the margin of dumping, the higher the amount of the EBR, and the higher the cost of the EBR.
89  In order to maintain its level of sales and/ or profitability, despite the increased costs for 
importers as a result of the application of the EBR,  foreign producers/exporters  have an incentive to 
reduce, or even eliminate, their margin of dumpi ng (just as they have an incentive to reduce their 
margin of dumping in order to reduce the am ount of anti-dumping duties levied on their goods).90  
Furthermore, shrimp importers have an incentive to avoid the costs associated with the application of 
the EBR by importing shrimp from foreign producers/exporters whose produce has not been found to have been dumped, and is therefore not subject to the shrimp anti-dumping order.  As a result of such 
incentives, which affect the relevant entities in mu ch the same way as anti-dumping duties do, we find 
that the application of the EBR constitutes specific action "against" dumping. 
7.50 The United States argues that, rather than being specific action "against" dumping, the 
application of the EBR merely facilitates the coll ection of anti-dumping duties.  In assessing this 
argument, we note that in US – Offset Act (Byrd Amendment)  the Appellate Body disagreed with the 
panel's finding that the CDSOA is a measure against dumping because the CDSOA provides a 
                                                     
 
85 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 254. 
86 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 256. 
87 The financial costs of obtaining enhanced bonds in clude the fees and collateral requirements imposed 
by surety companies for providing such bonds.  Although the United States does not itself determine the terms 
and conditions under which surety companies provide bonds, the United States must have been aware that 
importers would necessarily incur costs in procuring the bonds that it required them to provide. 
88 Although the parties have made arguments regarding the actual impact of the EBR on the volume 
and market share of imports from India, we do not consider these to be relevant to the issue before us.  In our view, Article 18.1 of the Anti-Dumping Agreement  is concerned with the effect of actions on the practice of 
dumping, rather than trade flows in the relevant imports .  We note that the Appellate Body has confirmed that 
"the test should focus on dumping [or subsidization] as practices" (see Appellate Body Report, US – Offset Act 
(Byrd Amendment) , para. 253), and that the appropriate "analy sis does not mandate an economic assessment of 
the implications of the measure on the conditions of competition under which domestic product and 
dumped/subsidized imports compete" (see Appellate Body Report, US – Offset Act (Byrd Amendment) , 
para. 257). 
89 In this regard, the adverse bearing of the applicatio n of the EBR is similar to that of the measure at 
issue in US – Offset Act (Byrd Amendment) (where the adverse bearing resulted from the collected anti-dumping 
duties being transferred to domestic producers) , in the sense that the adverse bearing is directly linked to the 
margin of dumping of the foreign producer/exporter.  Indeed, the adverse bearing of the EBR is similar to that of 
an anti-dumping duty, in the sense that both result in increased costs that the relevant entities have an incentive to avoid or mitigate. 
90 In reply to Question 2 from the First Set of Panel Questions, para. 5, the United States asserted that 
"[i]f the cash deposit rate in the most recently complete d administrative review is determined to be zero, any 
new continuous bond obtained after completion of the administrative review would reflect an enhanced bond 
amount of $0."  WT/DS345/R 
 Page 31 
 
 
  financial incentive for domestic producers to file or support applications for the initiation of anti-
dumping and countervailing duty inves tigations, and that such an incentive would likely result in a 
greater number of applications, investigations and orders.  In particular, we note that the Appellate 
Body found that "a measure cannot be against dump ing or a subsidy simply because it facilitates or 
induces the exercise of rights that are WTO-consistent."91  Upon careful reflecti on, we do not consider 
that the Appellate Body's reasoning should preclude our finding that the application of the EBR 
constitutes specific action "against" dumping.  Instea d, the Appellate Body's reasoning means that we 
would be precluded from concluding that the application of the EBR constitutes specific action "against" dumping simply  because it may also facilitate the collection of WTO-consistent anti-
dumping duties.  However, this does not preclude us from concluding, as the Appellate Body and 
panel did in US – Offset Act (Byrd Amendment) , that the application of the measure at issue 
constitutes specific action "against" dumping on the b asis of other considerations, notwithstanding the 
fact that the application of that measure might al so facilitate the collection of WTO-consistent anti-
dumping duties. 
7.51 Our finding that the application of the EBR constitutes "specific action against dumping" is 
supported by the United States' view that provisiona l measures taken in the form of bonds constitute 
"specific action against dumping".
92  If a bond applied as a provisional measure should be treated as a 
"specific action against dumping", it would appear reasonable to conclude that a bond applied as a 
definitive measure should be similarly categorized: in both cases, the adverse bearing of the bond on 
foreign producers/exporters and im porters (and the correlation with the constituent elements of 
dumping) is the same.  The United States asserts, though, that unlike a bond required as a provisional 
measure, the enhanced bond directive provides for security after the existence of dumping has been 
established, pending determination of the facts with respect to payment of duties.  The United States 
submits that the application of the EBR "facilitates the exercise of WTO-consistent rights"93 – i.e., the 
collection of duties owed following the imposition of  an order.  The United States asserts that, by 
contrast, certain bonds required before an anti-dumping duty order has been imposed may not be 
viewed as "facilitating" the exercise of WTO-consistent  rights, insofar as, before the order is imposed, 
it has not been established that a Member is entitled to  collect duties.  We are not persuaded by the US 
argument, however, since we have al ready concluded that the fact that the application of the EBR may 
facilitate the exercise of WTO-consistent rights is no t determinative of whether or not the application 
of the EBR constitutes "specific action against dumpi ng" (in the sense that this fact does not preclude 
a finding that a measure constitutes "specific action against dumping" on the basis of other 
considerations).   
Conclusion 7.52 In light of the above, we conclude that the a pplication of the EBR constitutes "specific action 
against dumping" in the meaning of Article 18.1 of the Anti-Dumping Agreement .  
7.53 Accordingly, we must now consider the remain ing elements of Article 18.1, regarding the 
question of whether or not the EBR was appl ied "in accordance with the provisions of the 
GATT 1994 ", as interpreted by the Anti-Dumping Agreement . 
                                                     
 
91 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 258. 
92 See United States' responses to Second Set of Panel Questions, para. 4, in which the United States 
asserts that "a bond requirement prior to imposition of an order may be considered an action 'against' dumping". 
93 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 258. WT/DS345/R 
Page 32  
 
  (b) Was the EBR applied "in accordance with" the provisions of the GATT 1994 , as interpreted 
by the Anti-Dumping Agreement ?  
7.54 The United States submits that the EBR was applie d "in accordance with the provisions of the 
GATT 1994 ", as interpreted by the  Anti-Dumping Agreement , because the application of the EBR is 
authorized by the Ad Note.  India re jects the US reliance on the Ad Note. 
(i) Main arguments of India 
7.55 India notes that the Appellate Body found in US – 1916 Act  that: 
"Article VI, and, in particular, Artic le VI:2, read in conjunction with the 
Anti-Dumping Agreement , limit the permissible responses to dumping to definitive 
anti-dumping duties, provisional measures and price undertakings."
94 
7.56 India further notes that similarly, in US – Offset Act (Byrd Amendment) , the Appellate Body 
found that: 
"The GATT 1994  and the [SCM] Agreement provide four responses to a 
countervailable subsidy: (i) definitive count ervailing duties; (ii) provisional measures; 
(iii) price undertakings; and (iv) multilate rally sanctioned countermeasures under the 
dispute settlement system.  No other response to subsidization is envisaged in the text 
of the GATT 1994 , or in the text of the [SCM] Agreement .  Therefore, to be 'in 
accordance with the GATT 1994 , as interpreted by' the [SCM] Agreement , a response 
to subsidization must be in one of those four forms."95 
7.57 India asserts that the application of the EBR does not involve the collection of a definitive 
(anti-dumping or countervailing) duty or a price undert aking by exporters.  India asserts that it is also 
not a provisional measure to the extent that it is  applied (a) in addition to, and on top of, the 
provisional measures contemplated by Article 7 of the Anti-Dumping Agreement  such as cash deposits 
or bonds in an amount not greater than the provision ally estimated margin of dumping, and (b) even 
after these provisional measures have run their cour se and the decision to impose definitive duties has 
been taken under Article 9.1 of the Anti-Dumping Agreement , as the case may be.  India further 
submits that the application of the EBR is inconsiste nt with the requirements of Articles 7 and 9 of the 
Anti-Dumping Agreement . 
7.58 India asserts that in US – 1916 Act , the Appellate Body found that "[t]he Anti-Dumping 
Agreement  is an 'Agreement on Implementation of Artic le VI of the General Agreement on Tariffs 
and Trade 1994."  India submits that, accordingly, "Ar ticle VI must be read in conjunction with the 
provisions of the Anti-Dumping Agreement  …"96  India states that, as an interpretative note to 
paragraphs 2 and 3 of Article VI of the GATT 1994 , it is clear that the Ad Note is part and parcel of 
Article VI and cannot be separated from it.  For this  reason, India submits that the Ad Note therefore 
cannot support any response to dumpi ng or subsidization other than those recognized by the Appellate 
Body in US – Offset Act (Byrd Amendment) . 
7.59 India also asserts that the Ad Note limits th e permissible measures to a single security in the 
form of a "cash deposit or bond", rather than  a combination of both cash deposits and bonds. 
                                                      
94 Appellate Body Report, US – 1916 Act , para 137.  See  also Appellate Body Report, US – Offset Act 
(Byrd Amendment) , para 265. 
95 Appellate Body Report, US – Offset Act (Byrd Amendment) , para 269. 
96 Appellate Body Report, US – 1916 Act , para. 114.  WT/DS345/R 
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  (ii) Main arguments of the United States 
7.60 The United States submits that India offers an in terpretation of the Ad Note in relation to the 
Anti-Dumping Agreement  that is inconsistent with the terms of the Anti-Dumping Agreement  and fails 
to give the Ad Note any meaning or legal effect, contrary to the relationship between the GATT 1994  
and other WTO Agreements contemplated by the WTO Agreement .  The United States asserts that the 
GATT 1994 , including the Ad Note, is an "integral part" of the WTO Agreement .97  The United States 
argues that past panels and the Appellate Body have noted that Article VI is "part of the same treaty" 
as the Anti-Dumping Agreement , and "should not be interpreted in a way that would deprive it or the 
Anti-Dumping Agreement  of meaning."98  The United States argues that panels "should give meaning 
and legal effect to all the relevant  provisions," including the Ad Note .  According to the United States, 
the Ad Note permits Members to require "reasonabl e security (cash deposit or bond)" for the payment 
of anti-dumping and countervailing duties.  For the United States, no other provision of the Anti-Dumping Agreement  or the GATT 1994  specifically addresses security for the payment of duties 
after the final determination in an investigati on, including the collection of cash deposits, and, 
moreover, no provision prohibits a Member from requiring this security. 
7.61 The United States submits that, instead of "reading Article VI in conjunction with the 
Anti-Dumping Agreement ," as the Appellate Body in US – 1916 Act  suggested, India, through a 
misreading of Articles 7 and 9 of the Anti-Dumping Agreement , attempts to read Article VI and the 
Ad Note out of the covered agreements entirely,  depriving both provisions of any meaning.  The 
United States asserts that, if accepted, India's vari ous theories would mean that security pending final 
assessment of anti-dumping and countervaili ng duties is nowhere permitted by the Anti-Dumping 
Agreement , SCM Agreement , or the GATT .  The United States asserts that, if India's arguments were 
accepted, Members would not be permitted to ma intain security requirements pending final 
determination of liability.  The United States argues that to preclude a Member  with a retrospective 
system from requiring the posting of security prior to  the determination of fi nal liability would create 
a disparity between retrospective and prospective systems.   The United States argues that such a 
conclusion would compromise Members' ability to maintain retrospective duty assessment systems, 
despite the fact that these systems are specifically  contemplated by the text of the Agreement. 
(iii) Evaluation by the Panel 
7.62 At this juncture, we are examining the issu e of whether or not the EBR was applied "in 
accordance with the provisions of the GATT 1994 ", as interpreted by the Anti-Dumping Agreement .  
The parties agree that the relevant provision of the GATT 1994  in this regard is Article VI, and 
specifically the Ad Note thereto.
99  This is also consistent with the view expressed by the Appellate 
Body in US – 1916 Act . 100  The Ad Note provides that: 
                                                      
97 Article II:2 of the WTO Agreement . 
98 Panel Report, US – 1916 Act (EC) , para. 6.97. 
99 We note that the GATT 1994  consists inter alia  of the GATT 1947 .  Article XXXIV of the 
GATT 1947  provides that the annexes to the GATT 1947  are "an integral part" thereo f.  The Ad Note, which is 
contained in Annex I to the GATT 1947 , is therefore "an integral part" of the GATT 1947 .  As such, the Ad Note 
is necessarily part of the GATT 1994 .  We conclude from the fact that the Ad Note is included under the heading 
"Ad Article VI" that the Ad Note is part of Article VI of the GATT 1994 .  Both parties agree with this approach 
(See e.g. para. 44 of India's second oral statement, an d para. 14 of the United States' second written submission). 
100 In particular, the Appellate Body clarified "Since the only provisions of the GATT 1994 
"interpreted" by the  Anti-Dumping Agreement   are those provisions of Article VI concerning dumping, 
Article 18.1 should be read as requiring that any "specific action against dumping" of exports from another 
Member be in accordance with the relevant  provisions of  Article VI of the GATT 1994 , as interpreted by the 
 Anti-Dumping Agreement ".  Appellate Body Report on US – 1916 Act , para. 124.  See also Panel Report on US 
– 1916 Act (Japan) , paras. 6.214-218 and 6.264; and Panel Report on US – 1916 Act (EC) , paras. 6.197-6.199. WT/DS345/R 
Page 34  
 
  "As in many other cases in customs administration, a contracting party may require 
reasonable security (bond or cash deposit) for the payment of anti-dumping or countervailing duty pending fina l determination of the facts in any case of suspected 
dumping or subsidization." 
7.63 We first consider the relationshi p between the Ad Note and the Anti-Dumping Agreement , and 
the question of whether or not the Ad Note may au thorize the imposition of security requirements that 
are not expressly envisaged by the Anti-Dumping Agreement .  If we find that the Ad Note may 
authorize such security requirements, we consider the temporal scope of the security requirements that Members may impose pursuant to the Ad Note.  Ther eafter, we consider the question of whether or 
not Members may require security combining bot h cash deposits and bonds.  Finally, we examine 
whether the application of the EBR constitutes "reasonable" security. 
The relationship between the Ad Note and the Anti-Dumping Agreement   
7.64 India submits that the relationship between the WTO Agreement  and the Anti-Dumping 
Agreement  and the SCM Agreement  has been explored by the Appella te Body in previous disputes.  
According to India, it is in light of this relations hip that the Appellate Body interpreted Article VI of 
the GATT 1994 , as interpreted by the provisions of these  Agreements, to permit only the specific 
responses to dumping and subsidization contemplated by these Agreements.  
7.65 India asserts that, in Brazil – Desiccated Coconut , the Appellate Body found that "… the 
authors of the new WTO regime intended to put an end to the fragmentation that had characterized the 
previous system".  India states that the Appellate Body based its reasoning on (a) the preamble to the 
WTO Agreement , (b) the provisions of Article II:2 of the WTO Agreement  providing that the 
Multilateral Trade Agreements form an "integral part" of the WTO Agreement , (c) the single 
undertaking reflected in the provisions of the WTO Agreement , and (d) the "integrated dispute 
settlement system" established under the DSU  "… allowing all relevant provisions of the WTO 
Agreement  to be examined in one proceeding".
101 
7.66 India asserts that it is based on this reasoning that, unlike the position while the Tokyo Round 
Subsidies Code was in force, the Appellate Body found that, after the WTO Agreement  entered into 
force, Article VI of the GATT 1994  could not be applied independently of the SCM Agreement .102  
India notes that the Appellate Body agreed with the Panel further that: 
"[T]he question for consideration is not whether the SCM Agreement  supersedes 
Article VI of GATT 1994 . Rather, it is whether Article VI creates rules which are 
separate and distinct from those of the SCM Agreement , and which can be applied 
without reference to that Agreem ent, or whether Article VI of GATT 1994  and the 
SCM Agreement  represent an inseparable package of  rights and disciplines that must 
be considered in conjunction."103  
7.67 India notes that the Appellate Body went on to find that, after the WTO Agreement  entered 
into force, both Article VI and the SCM Agreement  must be read together. 
7.68 According to India, therefore, it is clear that, even if the provisions of Article VI of the 
GATT 1994 , the Anti-Dumping Agreement  and the SCM Agreement  must all be read together as a 
single legal instrument, the provisions of these Agr eements themselves may set out rules that govern 
the relationship between the GATT 1994  and the Agreements.  Such provisions also must be given 
                                                      
101 Appellate Body Report, Brazil – Dessicated Coconut , p. 18. 
102 Appellate Body Report, Brazil – Dessicated Coconut , p. 17. 
103 Appellate Body Report, Brazil – Dessicated Coconut , p. 14.  WT/DS345/R 
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  meaning.  India asserts that, in fact, th e Appellate Body took this into account in US – Antidumping 
Act of 1916  when it found that: 
"Article VI of the GATT 1994  and the Anti-Dumping Agreement  are part of the same 
treaty, the WTO Agreement .  As its full title indicates, the Anti-Dumping Agreement  is 
an 'Agreement on Implementation of Article VI …'  Accordingly, Article VI must be 
read in conjunction with the provisions of the Anti-Dumping Agreement , including 
Article 9."104 
7.69 India submits that the Appellate Body also found that Article 1 of the Anti-Dumping 
Agreement  provides that "'an anti-dumping measure' must be consistent with Article VI of the 
GATT 1994  and the provisions of the Anti-Dumping Agreement "105 and that "… the scope of 
application of Article VI is clarified,  in particular, by Article 18.1 of the Anti-Dumping Agreement ".106  
India further asserts that it is worth noting that , after the Appellate Body concluded that the 
Antidumping Act of 1916 was inconsiste nt with Article VI:2 and the Anti-Dumping Agreement , it 
agreed with the conclusion of the Panel that  "the 1916 Act violates Article VI:2 of the GATT 1994 " 
only after recording "… the caveat that Article VI:2 mu st be read together with the relevant provisions 
of the Anti-Dumping Agreement ".107 
7.70 According to India, therefore, the Appellate Body's conclusion that "Article VI, and in 
particular, Article VI:2 read in conjunction with the Anti-Dumping Agreement , limit the permissible 
responses to dumping to definitive anti-dumpi ng duties, provisional measures and price 
undertakings"108 was based on an exhaustive analysis and interpretation of the provisions of the 
Anti-Dumping Agreement  that govern the relationship between Article VI and the Anti-Dumping 
Agreement .  India asserts that, because the application of the EBR is neither a provisional measure, a 
price undertaking, or a definitive anti-dumping duty, the application of the EBR is not envisaged by the Ad Note, and therefore cannot be authorized by the Ad Note. 
7.71 We note that the Appellate Body found in Brazil – Desiccated Coconut  that "Article VI of the 
GATT 1994 " cannot "be applied independently of the SCM Agreement  in the context of the WTO" as 
"[t]he authors of the new WTO regime intended to put an end to the fragmentation that had 
characterized the previous system".
109  At first glance, this finding might seem to support India's view 
regarding the non-applicability of the Ad Note, whic h is an integral part of Article VI of the 
GATT 1994 .  However, we also note that the Appellate Body findings relied on by India were 
prefaced by the following observations: 
"The relationship between the GATT 1994  and the other goods agreements in 
Annex 1A is complex and must be examined on a case-by-case basis.  Although the 
provisions of the GATT 1947  were incorporated into, and became a part of the 
GATT 1994 , they are not the sum total of the rights and obligations of WTO Members 
concerning a particular matter.  For example,  with respect to subsidies on agricultural 
products, Articles II, VI and XVI of the GATT 1994  alone do not represent the total 
rights and obligations of WTO Members.  The Agreement on Agriculture  and the 
SCM Agreement  reflect the latest statement of WTO Members as to their rights and 
obligations concerning agricultural subsidi es.  The general interpretative note to 
Annex 1A was added to reflect that the other goods agreements  in Annex 1A, in 
                                                      
104 Appellate Body Report, US – 1916 Act , para. 114. 
105 Appellate Body Report, US – 1916 Act , para. 119. 
106 Appellate Body Report, US – 1916 Act , para. 121. 
107 Appellate Body Report, US – 1916 Act , para. 138. 
108 Appellate Body Report, US – 1916 Act , para. 137. 
109 Appellate Body Report, Brazil – Desiccated Coconut , p. 18. WT/DS345/R 
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  many ways, represent a substantial elaboration of the provisions of the GATT 1994 , 
and to the extent that the provisions of the other goods agreements conflict with the 
provisions of the GATT 1994 , the provisions of the other goods agreements prevail.  
This does not mean, however, that the other goods agreements in Annex 1A, such as 
the SCM Agreement, supersede the GATT 1994.   As the Panel has said: 
... the question for consideration is not whether the SCM Agreement 
supersedes Article VI of GATT 1994.   Rather, it is whether Article VI 
creates rules which are separate and distinct from those of the SCM 
Agreement , and which can be applied without reference to that 
Agreement, or whether Article VI of GATT 1994  and the SCM 
Agreement  represent an inseparable package of rights and disciplines 
that must be considered in conjunction."
110 (emphasis supplied, 
footnote omitted)  
7.72 Thus, despite the complexity of the issue under consideration, the Appellate Body was 
abundantly clear in stating that Article VI of the GATT 1994  was not superseded by the SCM 
Agreement .  The findings of the panel, which were  upheld by the Appellate Body without 
modification, similarly excluded the possibility that the SCM Agreement  might be superseded by 
Article VI of the GATT 1994 .  Thus, neither the panel nor  Appellate Body findings in Brazil – 
Desiccated Coconut  provide any basis for concluding that Article VI of the GATT 1994  is superseded 
by the SCM Agreement .111  We emphasise this point because, in our view, India's specific argument 
regarding the relationship between the Ad Note and the Anti-Dumping Agreement  suggests that the 
latter supersedes the former. 
7.73 Thus, although the Panel and Appellate Body in Brazil – Desiccated Coconut  found that 
Article VI could not be applied "without reference" to, or independently of, the SCM Agreement , this 
finding cannot mean that the Ad Note may not au thorize action that is not envisaged by the SCM or 
Anti-Dumping Agreement .112  In our view, the findings in Brazil – Desiccated Coconut  that Article VI 
may not be applied independent of , or without reference to, the Anti-Dumping Agreement  simply 
mean (consistent with the conflict mechanism set fo rth in the general interpretative note to Annex 1A) 
that Article VI may not be interpreted to  justify action that is prohibited by the Anti-Dumping 
Agreement .  It is in this sense that Article VI  must be applied with reference to the Anti-Dumping 
Agreement .  If the Ad Note authorizes conduct, and reference to the Anti-Dumping Agreement  
confirms that such conduct is not prohibited by the Anti-Dumping Agreement , we see no basis in the 
Anti-Dumping Agreement , the GATT 1994 , or the abovementioned findings  of the panel and Appellate 
Body, to prohibit such conduct.113  Any other approach would deprive the Ad Note of meaning and 
                                                      
110 Appellate Body Panel, Brazil – Desiccated Coconut , p. 14. 
111 Although the findings of the panel and Appellate Body in Brazil – Desiccated Coconut  were 
concerned with the relationship between Article VI of the GATT 1994  and the SCM Agreement , we see no 
reason why (and the parties have not argued that) those findings should not guide us in assessing the relationship 
between Article VI and the Anti-Dumping Agreement , especially since the Appellate Body's findings concerned 
the broader "relationship between the GATT 1994  and the other goods agreement in Annex 1A" to the WTO 
Agreement . 
112 Such result would conflict with the Appellate Body's conclusion that the SCM Agreement  does not 
supersede Article VI of the GATT 1994 . 
113 We note India's argument that Article 18.1 refers to "the provisions of GATT 1994 , as interpreted by 
this Agreement " (emphasis added).  According to India, this means that the relevant provisions of the 
GATT 1994  are those that have been implemented through the Anti-Dumping Agreement .  India notes that the 
Ad Note is implemented through Article 7 of the Anti-Dumping Agreement .  We note that this was not the 
approach adopted by th e Appellate Body in US – Offset Act (Byrd Amemndment).   In that case, the Appellate 
Body did not consider whether any of the relevant provisions of Article VI of the GATT 1994  had been 
expressly implemented through the Anti-Dumping Agreement .  Instead, the Appellate Body simply interpreted  WT/DS345/R 
 Page 37 
 
 
  legal effect, and would effectively mean that it has been superseded by the Anti-Dumping 
Agreement .114 
7.74 In our view, such an approach to the relationship between the Ad Note and the Anti-Dumping 
Agreement  is entirely consistent with the interpretation set forth by the Appellate Body in Brazil – 
Desiccated Coconut .  It also respects the Appellate Body's concern that the WTO system should not 
reintroduce "the fragmentation that had characterized the previous system".115  The fragmentation 
with which the Appellate Body was concerned in Brazil – Desiccated Coconut  resulted from the fact 
that, under the GATT regime, Contracting Parties could take anti-dumping action under Article VI 
even if they had not signed – and were therefore not bound by – the Tokyo Round Anti-Dumping Code.  Non-signatories of the Code could theref ore act (under Article VI) "independently" of, or 
"without reference" to the Code.  Such fragm entation, which is precluded under the "single 
undertaking" in the WTO regime, would not be re-int roduced by our interpretation of the relationship 
between Article VI and the Anti-Dumping Agreement , since our interpretation is premised on the 
notion that Article VI may not be applied "inde pendently" of, or "without reference" to, the 
Anti-Dumping Agreement . 
7.75 India claims that the application of the EBR is inconsistent with Articles 7 and 9 of the 
Anti-Dumping Agreement .  This claim is concerned with the application of the EBR after  the 
imposition of the anti-dumping order.  Accordingly, the application of the EBR is not a provisional 
measure and therefore falls outside the scope of Article 7 of the Anti-Dumping Agreement .  We reject 
India's Article 9 claim for the reasons set forth at para graphs 7.96 - 7.107.  India has not identified any 
other provision of the Anti-Dumping Agreement  that would prohibit the security requirements 
resulting from the application of the EBR.  Nor are we able to identify any.  As a matter of law, 
therefore, such security requirements would be au thorized by the Ad Note, provided they are in 
conformity with the substantive provisions thereof.   This is the issue we will turn to shortly. 
7.76 Before concluding on the relations hip between the Ad Note and the Anti-Dumping 
Agreement , though, we must consider India's specific argument that the Appellate Body has found 
that "Article VI, and, in particular, Ar ticle VI:2, read in conjunction with the Anti-Dumping 
                                                                                                                                                                    
 
the phrase "the provisions of GATT 1994 , as interpreted by this Agreement" as a reference to Article VI of the 
GATT 1994 . (see US – Offset Act (Byrd Amemndment) (AB) paras. 264 and 265).  We therefore conclude that 
the phrase "as interpreted by [the Anti-Dumping] Agreemen t" is simply designed to clarify that the relevant 
provision of the GATT 1994  is Article VI, since that is the provision interpreted by the Anti-Dumping 
Agreement .  Furthermore, we note that India's argument would result in the Ad note being rendered inutile, 
simply because it has not been ex pressly implemented through the Anti-Dumping Agreement .  In light of our  
findings regarding the relationship between the Ad Note and the Anti-Dumping Agreement , and particularly 
bearing in mind the Appellate Body jurisprudence to the e ffect that the provisions of Article VI, including the 
Ad Note, are not superseded by the Anti-Dumping Agreement , we are unable to accept the interpretation 
proposed by India.  We also note that Article 1 of the Anti-Dumping Agreement  provides in relevant part that the 
provisions of the Anti-Dumping Agreement  "govern the application of Article VI of GATT 1994 ".  Consistent 
with our reasoning above,  we consider that the Anti-Dumping Agreement  can only govern the application of 
Article VI to the extent that it expressly addresse s issues covered by Article VI.  In our view, the Anti-Dumping 
Agreement  cannot govern the application of Article VI in re spect of security for definitive anti-dumping duties if 
the Anti-Dumping Agreement  contains no provisions expressly dealing with such security. 
114 Any other approach would also render other parts of Article VI, such as paragraph 6(b) thereof, 
inutile.  As noted by the panel in Brazil – Desiccated Coconut  (note 60), the Anti-Dumping Agreement  "does not 
replicate or elaborate on Article VI:5 of the GATT 1994 , which proscribes the imposition of both an anti-dumping 
and a countervailing duty to compensate for the same situ ation of dumping and export subsidization, nor does it 
address the issue of countervailing action on behalf of a th ird country as provided for in Article VI:6(b) and (c) of 
GATT 1994 .  If the [Anti-Dumping] Agreement were considered to supersede Article VI of the GATT 1994  
altogether with respect to countervailing measures, these provisions would lose all force and effect.  Such a result 
could not have been intended." 
115 Appellate Body Report, Brazil – Desiccated Coconut , p. 18. WT/DS345/R 
Page 38  
 
  Agreement , limit the permissible responses to dumping to definitive anti-dumping duties, provisional 
measures and price undertakings".
116  While we acknowledge that such statements were made by the 
Appellate Body in US – 1916 Act and US – Offset Act (Byrd Amendment) ,  we note that the Appellate 
Body was not considering the WTO-consistency of secu rity imposed pursuant to the Ad Note in those 
cases.  By contrast, we have conducted a careful ex amination of the relationship between the Ad Note 
and the Anti-Dumping Agreement , and find that the Ad Note may permit responses to dumping in the 
form of particular security requirements.  In doi ng so, we note that Appellate Body jurisprudence 
clearly indicates that the Ad Note  has not been superseded by the Anti-Dumping Agreement .  In such 
circumstances, we are not prepared to find that the Ad Note h as been rendered superfluous by dicta in 
an Appellate Body Report that does not even refer to  the provisions of the Ad Note.  Instead, we shall 
base ourselves on the clear-cut guidance that has been provided by the Appellate Body in Brazil – 
Desiccated Coconut . 
7.77 For all the above reasons, we find that the relationship between the Ad Note and the 
Anti-Dumping Agreement  is not such as to preclude the Ad Note authorizing certain types of security 
that are not expressly envisaged by the Anti-Dumping Agreement . 
The temporal scope of the Ad Note 
7.78 We recall that the EBR was applied on imports entering the United States after the shrimp 
anti-dumping order was imposed.  The first substantive issue we must consider is whether the temporal scope of the Ad Note covers the period of  application of the anti-dumping order (as alleged 
by the United States), or whether it is limited to provisional measures taken prior to the final 
determination of dumping preceding the imposition of the anti-dumping order (as alleged by India). 
Ordinary meaning of the text of the Ad Note
 
7.79 By its express terms, the Ad Note is applicable  "pending final determination of the facts in 
any case of suspected dumping or subsidization".  Th e United States argues that the temporal scope of 
the Ad Note covers the period of application of  the anti-dumping order since, in a retrospective 
system such as the US system, there remains a "case of suspect ed dumping" pending completion of 
the assessment review.  India a gues that the Ad Note is implemented through Article 7 of the 
Anti-Dumping Agreement , regarding the application of provisional measures.  According to India, 
therefore, the application of the Ad Note is expr essly limited to provisional measures taken prior to a 
final determination of dumping. 
7.80 The Ad Note refers to "suspected dumping."  We interpret "dumping" in light of Article 2.1 of 
the Anti-Dumping Agreement .  Having regard to the dictionary definition,117 we understand the term 
"suspected" to refer to dumping that is suspected to ex ist, in the sense that its existence may be likely. 
118 
7.81 In order to determine whether or not there re mains "a case of suspected dumping" after the 
determination of dumping preceding the imposition of  a US anti-dumping order, we must carefully 
consider the analyses of dumping undertaken in the US  retrospective system.  In order to impose an 
anti-dumping order, the United States first determines , through an analysis of import entries during a 
given period of investigation, whether margins of  dumping exist, and whether dumped imports cause 
                                                      
116 Appellate Body Report, US – 1916 Act , para. 137; Appellate Body Report, US – Offset Act (Byrd 
Amendment) , para. 265. 
117 The New Shorter Oxford English Dictionary  (Clarendon Press, 4th Ed. 1993), page 3162 (which 
defines the word "suspected" in relevant part as "that one suspects to exist or to be such; imagined to be possible 
or likely"). 
118 As noted below at note 148, we do not consider that the mere possibility of dumping would be 
sufficient to justify reasonable  security under the Ad Note.  WT/DS345/R 
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  or threaten to cause material injury to a domestic industry.  If a determination of injurious dumping is 
made, the United States issues an anti-dumping duty or der.  In its anti-dumping duty order, the United 
States sets forth ad valorem  cash deposit rates for producers/exporters individually investigated, as 
well as an "all-others" rate applicable to all othe r subject producers/exporters.  Pursuant to the anti-
dumping duty order, importers must post a cash deposit of estimated anti-dumping duties for each 
import transaction.  This cash deposit is based on  the overall margin of dumping found for the 
exporter or producer during the investigation phase.  Thereafter, the US retrospective duty assessment 
system provides that, every twelve months, during the anniversary month of the anti-dumping duty order, importers, exporters, producers, and domestic interested parties have the opportunity to request 
that USDOC conduct an assessment review of the impor t entries that occurred in the prior year (but 
following imposition of the anti-dumping order).  Duri ng any such review, the United States analyses 
all of the import entries for the relevant period of review (i.e., the prior 12 months) to determine the 
final amount of the anti-dumping duty payable on impor ts from the relevant pro ducer or exporter.  For 
those entries not covered by a request for an assessment review, USDOC instructs US Customs to 
assess anti-dumping duties at the cash deposit rate required upon entry. 
7.82 In our view, there is no certainty that impor ts entering the United States following imposition 
of an anti-dumping order are in fact  dumped.  The determination of  dumping made during the initial 
investigation underlying the anti-dumping order does not apply to these imports, since that determination was made on the basis of imports oc curring during an earlier period of investigation.  
Rather, the final determination (o f the existence and amount) of dumping is only made in respect of 
imports entering the United States following imposition of the anti-dumping order when an 
assessment review is undertaken.  Un til that time, it is not possible to state with certainty whether or 
not those imports are dumped.  Indeed, the assessment review may demonstrate that those import entries were not dumped, such that no anti-dumping duties may be collected. 
7.83 While there is no certainty that import entries subject to an anti-dumping order are dumped, 
there is a reasonable basis for suspecting  that they might be.  Such suspicion of dumping results from 
the finding of dumping made in respect of import entries of subject merchandise during the initial 
period of investigation, i.e., the finding of dumping th at gave rise to the anti-dumping order.  In our 
view, that suspicion of dumping may last until a final determination of du mping is made in the 
assessment review, whereupon both the existence and amount of dumping may be determined with 
precision.
119 
7.84 We acknowledge that the United States must de termine the existence of dumping (and injury 
and causality) in order to impose an anti-dumping orde r.  That determination, however, relates to 
imports during the period of investigation underlying the initial investigation.  It does not relate to 
imports entering the United States after the anti-dump ing order is imposed.  Accordingly, the initial 
determination does not remove the su spicion of dumping in respect of those later imports.  In fact, as 
noted above, that initial determination is actually th e basis for the suspicion of dumping in respect of 
those later imports. 
7.85 India raises arguments regarding the meaning of the phrase "final determination" in the 
Ad Note.  India argues that it is no coincide nce that, in almost every context in the Anti-Dumping 
Agreement  in which the term "final determination" o ccurs, it is referred to in the singular in the 
context of the determination immediately preceding th e application of "final measures" or "definitive 
                                                      
119 A new determination of dumping in an assessment review would, of course, give rise to a further 
suspicion of dumping.  Even if the results of the first assessment review indicate that there was no dumping 
during the period under review, we consider it reasonable to continue to suspect – on the basis of the initial investigation underlying the anti-dumping order – that future imports may be dumped.  This interpretation is 
consistent with, and indeed supported by, note 22 of the Anti-Dumping Agreement . WT/DS345/R 
Page 40  
 
  duties".  In this regard, India notes that in Mexico – Anti-Dumping Measures on Rice , the Appellate 
Body found that: 
"Article 11.2 of the Anti-Dumping Agreement  and Article 21.2 of the SCM 
Agreement , …  Article 12.2.2 of the  Anti-Dumping Agreement   and Article 22.5 of 
the  SCM Agreement  … indicate that a definitive duty is imposed subsequent to a 
final affirmative determination.  We are of the view... that a duty becomes 'definitive' 
… at the time of the investigating auth ority's final affirmative determination. 
… The Agreements therefore use the term 'definitive'" to distinguish duties imposed 
after a final determination (following an investiga tion) from 'provisional' duties that 
may be imposed under certain conditions dur ing the course of an investigation, 
namely, after a preliminary determination."
120 (emphasis in original) 
India further notes that in EC – Bed Linen (Article 21.5 – India) , the Appellate Body found that: 
 
"Members have the right to impose and collect anti-dumping duties only after the 
completion of an investigation in which it has been established that the requirements 
of dumping, injury, and causation ' have been fulfilled' .  In other words, the right to 
impose anti-dumping duties under Article 9 is a consequence of the prior 
determination of the existence of dumping margins, injury, and a causal link.121 
(emphasis in original) 
7.86 We recall that the Mexico – Anti-Dumping Measures on Rice  and EC – Bed Linen 
(Article 21.5 – India)  cases concerned anti-dumping measures applied in the context of prospective 
assessment systems.  In such systems, one may legitimately refer to anti-dumping duties being levied 
pursuant to the "final determination" at the end of  the initial investigation.  In the present case, 
though, we are concerned with the US retrospec tive assessment system.  Under that system, anti-
dumping duties are not levied pursuant to the final dete rmination at the end of the initial investigation.  
Accordingly, we see no reason why the "final determ ination" in the Ad Note may not be interpreted 
(in the context of a retrospective duty assessment system) as the "determination of the final liability 
for payment of anti-dumping duties" referred to in Article 9.3.1 of the Anti-Dumping Agreement .122  
Since we are not prepared to interpret the Ad Note in a way that would not make sense in the context 
                                                      
120 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , paras. 345-346. 
121 Appellate Body Report, EC –Bed Linen (Article 21.5 – India),  para. 123. 
122 In particular, we see no reason why the determ ination referred to in Article 9.3.1 may not be 
considered as a final determination.  Furthermore, we note that the Appellate Body found in Mexico – 
Anti-Dumping Measures on Rice  that "the conditions to impose [an anti-dumping duty] are to be assessed with 
respect to the current situation" (Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 165).  
We understand this to mean that, according to the Appellate Body, the conditions for imposing anti-dumping 
duties, including the existence of dumping, must be established in respect of the "current situation" (at the time of imposition).  There is no obligation on Members, at  the time of imposition, to establish the existence of 
dumping prospectively, by reference to any future  situation.  Indeed, any such obligation would be impossible to 
fulfil.  While Members applying a prospective system of anti-dumping duty collection may use their findings in respect of the period of investigation as a proxy for the period following imposition of a definitive anti-dumping 
measure, there is no obligation on Memb ers to do so.  Indeed, Members appl ying a retrospective system of anti-
dumping duty assessment (which is specifically contem plated by Article 9.3.1) choose not to do so.  
Accordingly, we see no basis to conclude that the Un ited States, which applies a retrospective system, already 
determines the existence of dumping in respect of future import entries at the time that it imposes an anti-
dumping order.  The fact that Article 5.1 requires the Un ited States to establish the existence of dumping at the 
time it imposes such order, does not mean that the United States is at the same time establishing the existence of 
dumping in respect of future import entries covered by that order.  WT/DS345/R 
 Page 41 
 
 
  of a retrospective duty assessment system,123 we reject India's argument that the phrase "final 
determination" in the Ad Note necessarily refers to  the final determination made at the end of the 
initial investigation. 
7.87 India further argues that, even going by the argum ents of the United States, there cannot be a 
single "final determination" of the liability for payment of anti-dumping duties because, under 
Article 9.3.1, there will be as many determinations  of the final liability for payment as there are 
administrative reviews.  As noted by the United States,124 though, in the US system of duty 
assessment, each set of entries is covered by only  one assessment review.  Thus, while there may be 
multiple determinations over the life of an anti-dump ing duty order, for each entry, there is only one 
final determination of the facts with respect to payment.   
7.88 India also argues that the arguments of the Un ited States beg the question of why the Ad Note 
was not implemented by introducing similar provi sions and associated disciplines on the taking of 
security in Article 9 of the Anti-Dumping Agreement .  India asserts that, if Members had wanted, or 
perceived a need, to do so, they would have intr oduced additional provisions in Article 9 of the 
Anti-Dumping Agreement  to permit the taking of security after the final determination.  In light of our 
findings regarding the relationship between the Ad Note and the Anti-Dumping Agreement , we are not 
persuaded that Members would have needed to incorporate a specific authorization into the 
Anti-Dumping Agreement  in order for the United States to be en titled to require security in respect of 
imports entering after imposition of an anti-dumping order.  In our view, the United States is entitled 
to require such security on the basis of the authorization provided for in the Ad Note. 
7.89 We note India's argument that the above analysis  fails to take into account that in many cases 
no assessment review is conducted.125  The United States argues that in no case is assessment – 
whether at the cash deposit rate or otherwise – conduc ted at the time of entry, and in all cases the cash 
deposit collected at the time of entry is a baseline proxy of the amount that may ultimately be 
assessed, and is never itself the final liability.  Th e United States assert that while, in some cases, the 
amount of the cash deposit happens to equal the amount  of the final liability, it cannot be known at the 
time of entry whether this will be the case (since it cannot be known whether an interested party 
intends to request a review). 
7.90 Although there may be cases in which no assessment review ultimately takes place, there is 
no means of knowing this at the time that the impor t entry is made.  Whether or not an assessment 
review is to take place will only be known once ei ther the assessment review is requested, or the 
deadline for requesting such review has passed w ithout any such request having been made.  Thus, 
even though imports may ultimately be liquidated at  the cash deposit rate in the anti-dumping order, 
there remains the possibility that an assessment review may be requested, and that such review may 
indicate that those imports are not dumped (i.e., that no anti-dumping duties are to be assessed).  At the time of entry, therefore, such imports may only be suspected of being dumped. 
Contextual considerations regarding Article 7 of the Anti-Dumping Agreement
 
7.91 India asserts that the Ad Note is implemented through Article 7 of the Anti-Dumping 
Agreement , and may not be applied independently of that provision.  Accordingly, India submits that 
the Ad Note may only justify imposing security for provisional measures, as envisaged by Article 7. 
                                                      
123 We recall in this regard that the Anti-Dumping Agreement  is "neutral as between different systems 
for levy and collection of anti-dumping duties" (Appellate Body Report, US – Zeroing (Japan) , para. 163). 
124 See United States' second written submission, note 2. 
125 See India's second written submission, para. 81. WT/DS345/R 
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  7.92 The United States asserts that nothing in the text of  the Ad Note suggests that it is limited to 
"provisional measures".  The United States also cont ends that neither Article 7 nor the concept of 
"provisional measures" existed at the time the Ad Note was negotiated. 
7.93 In support of its view that the Ad Note  is implemented through Article 7 of the Anti-Dumping 
Agreement , India argues that the Ad Note only provi des for provisional security measures, i.e., 
security measures applied before the final determ ination prior to the imposition of anti-dumping 
order.  For the reasons set forth in the preceding s ub-section, we are unable to accept that the temporal 
scope of the Ad Note is limited in this way. 
7.94 In support of its argument, India relies on a si ngle paragraph in a 1959 Report of the Group of 
Experts on Anti-dumping and Countervailing Duties to assert that the "reasonable security (bond or 
cash deposit)" referred to in the Ad Note "is the same as the provisional measures referred to in 
Article 7 of the Anti-Dumping Agreement ."
126  That paragraph provides: 
"Provisional anti-dumping measures 
19. The Group discussed the question of provisional anti-dumping measures. It 
was recognized that in certain circumstan ces the use of such measures might be 
justified in order to limit the material inju ry to a domestic industry, even though it 
was noted that Article VI made no mention of them. On the other hand, it was generally felt that provisional measures shoul d be used sparingly and for the shortest 
possible time in order to interfere as little as possible with normal trade and in order 
that they should not assume a protectionist character. For this reason, any such measures should preferably be introduced after the responsible administration of the 
importing country had carried out an initial confidential investigation that revealed 
that there was a serious case to consider  further. Moreover, where possible, the 
provisional measures should not lead to a situation in which either the exporter or the importer of the product under investigation w ould suffer if the eventual decision were 
not to impose an anti-dumping duty. The Group agreed that it was desirable that such 
provisional measures should not be of retroactive application and that they should 
preferably take the form of bond or c ash deposits as mentioned in Interpretative 
Note 1 to paragraphs 2 and 3 of Article VI. Furthermore, they should be based on 
provisions which would, as far as possible, permit the importer to determine the maximum duty which could be assessed." 
7.95 In the second sentence of the a bove extract from their Report, therefore, the Group of Experts 
"noted that Article VI made no mention of [p rovisional measures]".  Since the Ad Note was 
introduced into GATT 1947  in 1948,
127 and was therefore an integral part of Article VI of the GATT 
1947  at the time that the Group of Experts issued its Report, this statement by the Group of Experts 
must mean that neither Article VI generally, nor  the Ad Note specifically, provided for provisional 
anti-dumping measures.  This statement by the Group of Experts is therefore fundamentally at odds 
with India's argument that the Ad Note is expressl y limited to provisional measures taken prior to a 
final determination of dumping.  
                                                      
126 India's first written submission, para. 92. 
127 The Ad Note to Article VI was included in Article 34 of the Havana Charter and was incorporated 
into the GATT 1947  in conjunction with the rest of Article 34 in 1948 (see Report of Working Party No. 3 on 
Modifications to the General Agreement, GATT/CP.2/22/Rev.1 (Aug. 30, 1948)).  WT/DS345/R 
 Page 43 
 
 
  Contextual considerations regarding Article 9 of the Anti-Dumping Agreement , and the WTO-
conformity of cash deposits  
7.96 A further contextual consideration arises fro m the United States' assertion that India's 
arguments would mean that no  security is permissible pending final assessment, including cash 
deposits.  India rejects this argument, asserting inst ead that cash deposits could be collected pursuant 
to Article 9 of the Anti-Dumping Agreement .  India argues that, from the standpoint of both the United 
States, as the Member collecting anti-dumping duti es, and the importer, who is liable to pay the 
anti-dumping duties following the decision to impo se definitive duties, there is no substantive 
difference between accepting (or paying) "cash deposits" instead of "cash" in payment of anti-dumping duties.  India asserts that whether cash is  accepted as a "cash deposit" or as "payment of 
duties" is a difference only in nomenc lature and not in substa nce.  India refers in this regard to the 
statement by the Appellate Body in US – Zeroing (Japan), where it held that "[a]t the time of 
importation, an administering authority may collect du ties, in the form of a cash deposit, on all export 
sales …".
128  The United States maintains that cash de posits are not duties within the meaning 
prescribed under Article 9 of the Anti-Dumping Agreement , but instead are a form of security or 
estimate of the amount of duties that will ultimately be owed on a given entry.  The United States also 
calls attention to the fact that Article 7.2 of the Anti-Dumping Agreement distinguishes cash deposits 
from duties by stating that "provisional measure s may take the form of a provisional duty or, 
preferably, a security – by cash deposit or bond ... ."129 
7.97 We consider that the United States' argument ra ises an extremely important consideration, for 
the ability to require security is an essential elemen t of a retrospective assessment system (which is 
specifically contemplated by Article 9.3.1 of the Anti-Dumping Agreement ).  If security, including 
even cash deposits, may not be required pursuant to th e Ad Note, we consider it important to establish 
what provision of the GATT 1994  or Anti-Dumping Agreement  it may be required under.  If security, 
including even cash deposits, may not be imposed unde r such other provisions, we consider that an 
interpretation of the Ad Note permitting such security  would be further justified.  Thus, even though 
we are not required to rule on whether or not cash deposits may be imposed pursuant to the Ad Note 
in order to resolve the dispute before us, this issu e is an important contextual consideration to which 
we should have regard when interpreting the Ad Note. 
7.98 As to the question of whether or not cash depos its may be justified un der other provisions of 
the GATT 1994  or Anti-Dumping Agreement , India argues that cash deposits may be imposed pursuant 
to Article 9 of the Anti-Dumping Agreement .  We are not persuaded by this argument, though, for 
Article 9 provides only for the imposition of definitive anti-dumping duties .  As noted by India,130 the 
term "duty" is defined in the tax context as "the payment to the public revenue levied on the import, 
export, manufacture or sale of goods …".131  In our view, this definition of the term "duty" is not 
broad enough to encompass cash deposits.  Unlike duties, cash deposits do not yield public revenue, 
in the sense that cash deposits have no intrinsic va lue in and of themselves.  Although cash may have 
intrinsic value, a cash deposit, on the other hand, is  not liquidated revenue is not a payment to yield 
public revenue at the time it is provided, but rath er, is provided as a form of security.  A cash deposit 
will not yield public revenue until some point in the future.  In the context of the US retrospective 
assessment system, that point comes when – and only  when – either duties are assessed pursuant to an 
assessment review, or the cash deposits are liquida ted once the deadline for requesting an assessment 
review has expired (without any assessment review ha ving been requested).  Until that point, a cash 
deposit has no intrinsic value in and of itself.  Indeed, India itself acknowledges that "based on the 
ordinary meaning and the meaning in legal parlance of the terms "provisional duties" and "security", 
                                                      
128 Appellate Body Report, US – Zeroing (Japan) , para. 156. 
129 United States' second written submission, para. 16. 
130 See India's responses to Second Set of Panel Questions, para. 29. 
131 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. I, p. 769. WT/DS345/R 
Page 44  
 
  there is clearly a difference, as a matter of law, between collecting duties, provisionally or otherwise, 
and the taking of security in the form of bonds or cash deposits."
132  Since we are required to interpret 
the relevant provisions of the covered agreements  by reference to the ordinary meaning of the 
terms,133 (and since the ordinary meaning of the terms reflects fundamental differences in the 
substantive consequences of those terms), we are una ble to accept India's argument that whether cash 
is accepted as a "cash deposit" or as "payment of duties" is a difference only in nomenclature and not 
in substance. 
7.99 Furthermore, we note that Article 9.3.1 of the Anti-Dumping Agreement refers to 
circumstances "[w]hen the amount of the anti-dumping duty is assessed on a retrospective basis".  If the cash deposit applied in a retrospective system we re a duty, it would make no sense to talk of the 
amount of the duty being assessed on a retrospective basis, as the amount of the cash deposit, which 
India refers to as a  "duty", is fixed prospectively . 
7.100  In addition, we observe that Article 9.3 of the Anti-Dumping Agreement provides that the 
amount of the anti-dumping duty "shall not exceed the margin of dumping as established under Article 2".  The Appellate Body has confirmed that the margin of dumping established in an 
assessment review is a margin of dum ping "as established under Article 2".
134  This is also consistent 
with note 22 to the Anti-Dumping Agreement , which applies "when the amount of the anti-dumping 
duty is assessed on a retrospective basis", and whic h envisages definitive duties being levied pursuant 
to "assessment proceeding[s]".  Since note 22 acc epts that amounts of anti-dumping duties, which 
(according to Article 9.3) must not exceed the ma rgin of dumping established under Article 2, may be 
assessed pursuant to assessment proceedings, necessarily note 22 also accepts that the margins of 
dumping established in assessment proceedings are ma rgins of dumping "established under Article 2".  
Accordingly, and consistent with Article 9.3, the margin of dumping in  the assessment review 
operates as a ceiling for the amount of anti-dumping duty.  If the cash deposit were an anti-dumping duty, and the cash deposit were in excess of the ma rgin of dumping established subsequently in the 
assessment review, the imposition of that cash deposit would violate Article 9.3.  This cannot be a 
correct interpretation, though, for under this in terpretation it would be impossible for a Member 
requiring cash deposits to know, at the time of appli cation, whether or not it was acting in conformity 
with Article 9.3. 
7.101  We recall India's reference
135 to the statement by the Appellate Body in US – Zeroing (Japan) 
that "[a]t the time of importation, an administering au thority may collect duties, in the form of a cash 
deposit, on all export sales…".136  However, in that case the Appe llate Body was not addressing, and 
                                                      
132 See  India's responses to Second Set of Panel Questions, para. 33. 
133 Article 3.2 of the DSU provides that WTO Me mbers recognise that the WTO dispute settlement 
system serves to clarify the provisions of the cove red agreements "in accordance with customary rules of 
interpretation of public international law".  Article 31 of the Vienna Convention on the Law of Treaties, 
considered as one such rule, reads th at "[a] treaty shall be interpreted in good faith in accordance with the 
ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and 
purpose."  Appellate Body Report on US – Gasoline , p. 17.  See also Appellate Body Report on India – Patents 
(US) , para. 46;  Appellate Body Report on Japan – Alcoholic Beverages II , pp. 10-12; and Panel Report on US – 
DRAMS , para. 6.13. 
134 In US – Zeroing (EC)  (para. 130) the Appellate Body stated that "the margin of dumping established 
for an exporter or foreign producer operates as a  ceiling  for the total amount of anti-dumping duties that can be 
levied on the entries of the subject product (from that exporter) covered by the duty assessment proceeding."  In 
the context of that case (starting with the Appellate Bo dy's reference to the need to establish a margin of 
dumping (under Article 2) for the product as a whole,  and for each exporter or foreign producer (see 
paras. 127-129)) it is clear to us that the Appellate Body  was referring to the margin of dumping established in 
an assessment review as a margin of dumping "established under Article 2". 
135 See India's second written submission, para. 71. 
136 Appellate Body Report, US – Zeroing (Japan) , para. 156.  WT/DS345/R 
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  did not need to address, the issue of whether or not cash deposits constitute duties.  The Appellate 
Body's statement therefore constitutes obiter dictum  in the discussion of a different issue, which we 
do not feel compelled to treat as authoritative guidan ce on the issue before us here.  Furthermore, in 
its earlier Report on US – Zeroing (EC) , the Appellate Body included dicta to the effect that, under the 
US retrospective duty assessment system, "the United  States collects security in the form of a cash 
deposit at the time a product enters the United States, and determines the amount of duty due on the 
entry at a later date ."137  This suggests that in that earlie r case the Appellate Body treated cash 
deposits as a form of security for duties to be collected later, rather than as duties per se .  Thus, even 
if we were required to follow Appellate Body dict a, it is unclear exactly how this dicta should be 
interpreted. 
7.102  In addition, we observe that Article 9.3.1 of the Anti-Dumping Agreement refers to 
"refund[s]" to be made in the context of retrosp ective assessment systems.  Article 9.3.1 does not 
stipulate what precisely must be refunded.  Article 9. 3.2, by contrast, which applies in the context of 
prospective assessment systems, refers to "refund[s] ... of any ... duty paid".  Unlike Article 9.3.2, 
therefore, Article 9.3.1 does not characterize what  is being refunded as a "duty", even though (as 
acknowledged by India138) Article 9.3.1 is the mechanism by which cash deposits are refunded.  If 
cash deposits were duties, there would have been no need to use different language in Articles 9.3.1 
and 9.3.2. 
7.103  India also argues that the Anti-Dumping Agreement  expressly mentions the interpretative and 
supplementary notes to Article VI that are not subsumed by the provisions of the Anti-Dumping 
Agreement  and the SCM Agreement .  India notes in this regard that Article 2.7 of the Anti-Dumping 
Agreement  expressly states that "[t]his Article is without prejudice to the second Supplementary 
Provision to paragraph 1 of Article VI in Annex I to GATT 1994 ."  India asserts that if the drafters of 
the Anti-Dumping Agreement  had intended to keep the Ad Note available to Members after the final 
determination, they would similarly have said so.  India also submits that the arguments of the United 
States beg the question of why the Ad Note was not implemented by introducing similar provisions 
and associated disciplines on the taking of security in Article 9 of the Anti-Dumping Agreement  in the 
case of the retrospective system.  India asserts that if Members had wanted, or perceived a need, to do 
so, they would have introduced add itional provisions in Article 9 of the Anti-Dumping Agreement  
during the Tokyo Round or the Uruguay Round process to  permit the taking of security after the final 
determination. 
7.104  The implication of India's argument regarding Article 2.7 of the Anti-Dumping Agreement  is 
that the Ad Note, together with the majority of other Notes and Supplementary Provisions to 
Article VI of the GATT 1994 , are superseded by the Anti-Dumping Agreement .  We have already 
explained that there is no basis for reaching any su ch conclusion.  We have also already explained 
that, based on our interpretation of the relationship between the Ad Note and the Anti-Dumping 
Agreement , there was no need for Members to include an  express authorization for collection security 
(after imposition of the anti-dumping order) in Arti cle 9, for the authorization provided for in the 
Ad Note remains valid. 
7.105  As further contextual support for our view that cash deposits required following imposition of 
an anti-dumping order are not anti-dumping duties, we note that Article 7.2 of the Anti-Dumping 
Agreement , regarding provisional measures, draws a clear  distinction between a (provisional) "duty" 
and a "cash deposit".  India's argument that cash depo sits are duties is therefore at odds with the plain 
language of Article 7.2. 
                                                      
137 Appellate Body Report, US – Zeroing (EC) , para. 109. 
138 See e.g. India's first written submission, para. 79. WT/DS345/R 
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  7.106  Accordingly, we are not persuaded by India's argument that cash deposits may be imposed 
pursuant to Article 9 (as anti-dumping duties).  Nor has India advanced any other basis for Members 
to require security in the form of cash deposits.  We recall, though, that we consider that the ability of 
Members to require security such as cash de posits pending final assessment is an essential 
requirement for the operation of a retrospective asse ssment system.  Such contextual considerations 
support our interpretation of the ordinary meaning of the Ad Note as permitting such security. 
7.107  In light of the above, we find that the applica tion of the EBR falls with in the temporal scope 
of the Ad Note, in the sense th at the Ad Note authorizes the imposition of security requirements 
during the period following the imposition of a US anti-dumping order. 
The combined use of bonds and cash deposits 
7.108  We recall that the EBR was applied in conj unction with cash deposits, in the sense that 
importers had to provide both e nhanced bonds and cash deposits covering the same subject import 
entries.  We next consider whether the Ad No te allows the imposition of security requirements 
combining both cash deposits and bonds, or whet her the Ad Note requires Members to choose 
between either (i) cash deposits or (ii) bonds. 
7.109  India asserts that the plain meaning of the disjunctive "or" between the terms "bond" and 
"cash deposit" is that either a bond or a cash deposit may be required as security for the potential 
liability for anti-dumping or countervailing duties and not both at the same time. 
7.110  The United States submits that nothing in the text or context supports this reading of the term.  
According to the United States, the phrase "bond or cash  deposit" is a parenthetical that appears after 
the term "reasonable security" and that term provid es relevant context for in terpretation.  The United 
States asserts that India fails to explain how requiring  two types of security instead of one is relevant 
to determining what constitutes "reasonable security".   The United States also argues that India fails 
to explain why the Agreement should be read to pr oscribe US Customs from, for example, replacing a 
portion of the existing cash deposit requirement with  a bond requirement.  The United States argues 
that the Appellate Body has interpreted other uses of "or" in the WTO Agreement s as covering one or 
the other item, as well as both items, in a phrase.  The United States notes that, in its report in US – 
FSC (Article 21.5 II) , the Appellate Body interpreted Article 21.5 of the DSU in this manner.  
Article 21.5 states:  
"Where there is disagreem ent as to the existence or consistency with a covered 
agreement of measures taken to comply with the recommendations and rulings such dispute shall be decided through recourse to these dispute settlement procedures, 
including wherever possible resort to the original panel."
139   
 7.111  The United States argues that the Appellate Body interpreted this provision to mean that "an 
Article 21.5 panel may be called upon to examine either  the 'existence' of 'mea sures taken to comply' 
with DSB recommendations and rulings, or, when su ch measures exist, the 'consistency' of those 
measures with the covered agreements, or a combination of both , in situations where the measures 
taken to comply, through omissions or othe rwise, may achieve only partial compliance."
140  T h e  
United States submits that, like the language interpreted by the Appellate Body in US – FSC 
(Article 21.5 – EC) , based on the text and context, the "or"  in the Ad Note encompasses a cash 
deposit, a bond, or a combination of both. 
                                                      
139 Article 21.5 of the DSU  (emphasis added). 
140 Appellate Body Report, US – FSC (Article 21.5 – EC II) , para. 60 (emphasis added).  WT/DS345/R 
 Page 47 
 
 
  7.112  The Ad Note authorizes the imposition of "reasonabl e security (bond or cash deposit)".  In our 
view, the reasonableness of the security is to be asse ssed by reference to both the form and the amount 
thereof.  In terms of form, the phrase "(cash deposit or bond)" in the Ad Note serves to clarify that 
both cash deposits and bonds constitute reasonable forms of security.  Since that is the case, we see 
nothing in the text of the Ad Note to suggest th at the combination of both (otherwise reasonable) 
forms of security necessarily results in a measure that  is unreasonable.  In par ticular, the text of the 
Ad Note does not provide that the form  of security will only be reasonable if either  (i) cash deposits 
or (ii) bonds are required. 
7.113  We consider that an interpretation of the word  "or" to permit the combined use of bonds and 
cash deposits is consistent with  the Appellate Body's interpre tation of the word "or" in US – FSC 
(Article 21.5 – EC II) .  In that case, the Appellate Body found141 that the word "or" in respect of the 
phrase "existence or consistency" in Article 21.5 of the DSU  should be interpreted to permit 
Article 21.5 proceedings addressing both the "exist ence" and the "consistency" of implementation 
measures, not only one or the other.  Since the A ppellate Body was interpreting a similar use of the 
word "or" in US – FSC (Article 21.5 – EC II) , the Appellate Body's findings regarding that matter 
offer useful guidance that we consider it appropriate to follow in these proceedings. 
7.114  In light of the above, we find that the applicati on of the EBR is consistent with the temporal 
scope of the Ad Note, and that the United States is entitled to impose security requirements combining 
both cash deposits and bonds.  The fi nal substantive issue for us to examine is whether or not the 
security requirements established by the EBR in th is case were "reasonable" in the meaning of the 
Ad Note.  
Whether the application of the EBR resu lted in "reasonable" security requirements 
7.115  The Ad Note only permits the imposition of "r easonable" security requirements.  Thus, the 
application of the EBR may only be found to be in accordance with the Ad Note  to the extent that it 
provides for "reasonable" security.  The United States  asserts that the application of the EBR provided 
for reasonable security, whereas India contends that the resultant security requirements were not 
reasonable.  As noted in the preceding section, the r easonableness of the security is to be assessed by 
reference to both the form and the amount thereof.  Having already dealt with India's claim regarding 
the form of the security required by the United Stat es, in this section we consider the reasonableness 
of the amount thereof. 
7.116  The United States submits that the ordinary meaning of the term "reasonable" is "in 
accordance with reason; not irrational or absurd."142  The United States further asserts that, with 
respect to amounts, "reasonable" is additionally defi ned as "[w]ithin the limits of reason; not greatly 
less or more than might be thought likely or appropriate."143  We consider it appropriate to consider 
the meaning of the term "reasonable" in light of this definition.144  We believe it equally important, 
though, to consider the context in which the term  "reasonable" is used.  In particular, since the 
Ad Note only permits security in a given "case of suspected dumping", the reasonableness of that 
security should be assessed in light of the ci rcumstances of that case of suspected dumping. 
7.117  In this regard, we recall that the EBR is app lied in conjunction with cash deposits.  While the 
cash deposits are designed to secure the duty liability  established as a result of the anti-dumping order 
(or most recent assessment review), the EBR is applied to secure against liability resulting from 
increases in the rate of dumping over and above that established in the order (or most recent 
                                                      
141 Appellate Body Report, US – FSC (Article 21.5 – EC II) , para. 60. 
142 The United States refers to New Shorter Oxford English Dictionary , p. 2496. 
143 The United States refers to New Shorter Oxford English Dictionary , p. 2496. 
144 We note that India has not challenged the definition proposed by the United States. WT/DS345/R 
Page 48  
 
  assessment review).
145  Since the amount of cash deposits is limited to the rate of dumping established 
in the anti-dumping order (or most recent assessment review), such security corresponds to the given 
case of suspected dumping, and is therefore in principle "reasonable" within the meaning of the 
Ad Note.  The same reasoning does not cover th e application of the EBR, however, since the 
application of the EBR increases the level of security beyond the dumping liability established as a 
result of the anti-dumping order.  By virtue of th e reasonableness requirement in the Ad Note, such 
increased security would only be permitted if there were some other basis which renders it reasonable 
in a particular case. 
7.118  In light of the abovementioned dictionary de finition (whereby reasonableness may be defined 
as "not irrational or absurd" and, with respect to am ounts, as "not greatly less or more than might be 
thought likely or appropriate"), we consider that there would only be an appropriate basis for such 
increased security if a Member properly determined that the rates of dumping provided for in the anti-
dumping order were likely to increase (such that th e cash deposits provided for in the anti-dumping 
order would not provide sufficient security for the relevant case of suspected dumping).146  T h e  
Member would also need to determine the likely amount  of such increase, in or der to ensure that the 
amount of the additional security requirement is not greatly more than the amount by which the final 
dumping liability would likely exceed the dumping lia bility established as a result of the anti-dumping 
order.  Only then could that Member demonstrat e that the additional secur ity properly and reasonably 
relates to an established case of suspected dumping, c onsistent with the requirements of the Ad Note.  
Without this type of analysis, the rate in the an ti-dumping order remains "the best and only available 
baseline proxy of duties that ultimately may be assessed",147 and therefore the best estimate of 
suspected dumping for which security may be required  pursuant to the Ad No te.  Security exceeding 
this estimate would not be "reasonable" in the meaning of the Ad Note. 
7.119  We shall therefore examine whether the United States properly determined that the rate of 
dumping envisaged in the anti-dumping order would likely increase.  If we find that it did, we shall then examine whether the United States properl y established the likely amount of such increase.
148 
                                                      
145 India has not argued that the United States would not be entitled to collect duties in respect of any 
amount by which the rate of dumping established in an assessment review exceeds the cash deposits made in 
respect of the relevant import entries. 
146 Both parties argue that the reasonableness of the a pplication of the EBR should be assessed in light 
of the likelihood of increases in the rates of dumping.  See e.g. United States' respon ses to First Set of Panel 
Questions. para. 27, and para. 7 of India's oral statement at the second substantive meeting.  We acknowledge 
that rates of dumping may increase, and that the United States would be entitled to collect anti-dumping duties 
commensurate with the full amount of dumping.  In our view, though, it would not be reasonable to require additional security simply because of the possibility of rates of  dumping increasing.  (Otherwise, since rates may 
also possibly decrease, one could argue that a reduction in security would be equally reasonable.)  The 
possibility of rates increasing beyond a reasonable level of security, and importers defaulting on that excess, is a 
risk inherent in the retrospective system.  The Ad Note does not allow Members to seek to eliminate that risk 
through the application of unreasonably  excessive security requirements. 
147 United States' first written submission, para. 37. 
148 The United States also argues that the applicati on of the EBR is reasonable because, in addition to 
the likelihood of anti-dumping rates increasing, it also reflects the amount  of potential liability  in the event of 
default and the likelihood of default (see para. United Stat es' second written submission, para. 24).  Both parties 
submitted argumentation regarding the US assessment of the risk of shrimp importers defaulting on anti-
dumping duties in excess of the cash deposits.  If the United States had properly established the likelihood of 
rates increasing, and the amount of likely increase, we consider that the United States would have been able to introduce additional security requirements up to that amount.  In the context of the application of the EBR, there 
is no additional obligation under the Ad Note to assess the risk of default of individual importers.  By virtue of 
the Ad Note, security may be imposed once a case of su spected dumping is establis hed, such that anti-dumping 
duties may be payable.  There is nothing in the Ad Note to suggest that security may only be required if it is 
further established that importers would not otherwise pay the relevant anti-dumping duties.  It is the case of  WT/DS345/R 
 Page 49 
 
 
  7.120  The United States asserts that "[t]o analyse the likelihood of potential increases, US Customs 
used historical data on increases in the anti-dumping rate".149  In this regard, the United States refers 
to note 29 to para. 27 of its first written submission, where it is stated that "CBP's analysis at the time indicated that with respect to ag riculture/aquaculture cases, rates incr eased 33 per cent of the time, did 
not change 11 per cent of the time, and decreased 56 per cent of the time".   
7.121  We note that the United States has not submitte d any documentary evidence in support of its 
assertion that anti-dumping rates increased 33 per cent of the time.  It is, therefore, impossible to assess the rigour of the United States' analysis.  In pa rticular, it is impossible to verify how the United 
States treated cases where the rate may have increased as a result of error on the part of Customs, or 
error or fraud on the part of other parties.
150 151  In our view, apparent rate increases resulting from 
error or fraud should not be confused with genuine  increases in exporters' actual rates of dumping. 
7.122  Leaving aside the lack of supporting documen tary evidence, we are in any event not 
persuaded that an objective and impa rtial investigating authority could properly conclude that rates of 
dumping for subject shrimp were likely to increase on the basis of a finding that, historically, rates 
only increased in one third of agricu lture/aquaculture cases generally.  152Furthermore, the United 
States has provided no explanation as to how any alleged historical trend in respect of dumping rates 
for agriculture/aquaculture cases generally might justify conclusions regarding the likelihood of 
dumping rates for subject shrimp specifically.  In a ddition, we recall that the EBR is applied on all 
imports of subject shrimp.  A finding that, histori cally, rates have increased 33 per cent of the time in 
respect of agriculture/aquaculture cases generally is no t sufficient, in our view, to demonstrate that all 
rates for subject shrimp (in respect of all imports, from all sources) are likely to increase. 
7.123  The United States seeks to support its conclusion that rates of dumping would likely increase 
by asserting that " USDOC's preliminary results s uggest higher assessment rates for 63 of 70 Indian 
companies subject to the original order – 17 of these companies, which had been making cash 
                                                                                                                                                                     
suspected dumping that triggers the right to impose security requirements under the Ad Note, not the risk of 
default of individual importers.  (If this were not the cas e, the United States would be required to assess the risk 
of individual importers defaulting befo re imposing cash deposits.)  Although the risk of default does not provide 
a basis for requiring security under the express terms of the Ad Note, we see no reason why a Member could not 
choose to impose security requirements authorized under th e Ad Note only in respect of those importers with a 
greater risk of default. 
149 See United States' Responses to First Set of Panel Questions, para. 20. 
150 See e.g. Exhibit IND-8, bottom of p. 10. 
151 India argues that "the real so urce of defaults in payment of anti-dumping duties appears to be 
associated with non-market economy cas es, surety bankruptcies, new shippe r reviews, etc." (see  India's 
responses Second Set of Panel Questions, para. 76).  India also asserts that a "GAO Report concluded that most 
defaults in payments of anti-dumping duties arose out of one country (China) and one sector (crawfish)" (see 
India's second written submissi on, para. 87). We do not consider it nece ssary to review these arguments, though, 
since at this juncture we are addr essing US evidence regarding cases in which the rates of dumping increased, 
rather than cases resulting in uncollected, or defaulted, anti-dumping duties more generally.  (As illustrated at 
page 8 of Exhibit IND-8, not all uncollected anti-dumping duties in the crawfish case resulted from increased rates of dumping.  Scenario 1, e.g. which concerns  the majority of the unpaid anti-dumping duties in the 
crawfish case, concerned the problem of importers from new shippers being allowed to post single entry bonds, 
rather than cash deposits, and then defaulting on those bonds (with CBP not able to collect from the surety because the latter had gone bankrupt).)  Furthermore, Exhibit US – 10 suggests that the United States had 
evidence of rate increases extending be yond the crawfish case (the United Stat es claims that it had evidence of 
rate increases in respect of 13 anti-dumping cases  involving 340 exporter/producers; see United States' 
responses to Second Set of Panel Questions, note 28; see also the Amendment, which although it refers 
explicitly to the crawfish case, al so states that "[r]ecen t anti-dumping cases for agriculture/aquaculture 
merchandise have also resulted in considerable rate incr eases").  Given the broad nature of this evidence, there 
is no basis to query such evidence by reference to  the alleged particularities of a single case.   
152 See United States' first written submission, para. 27. WT/DS345/R 
Page 50  
 
  deposits at the 10.17% rate established in the investig ation, may be subject to an assessment rate in 
excess of 82%.
153  Increases such as these r esult in unsecured liability, often in excess even of the 
additional bond amount."154   
7.124  India retorts that the US reliance on the prelimin ary results of the first administrative review 
for Indian shrimp exporters to support its argu ment that shrimp exporters pose a genuine non-
collection risk is clearly misplaced.  First, th e preliminary results issued on 9 March 2007 cannot 
justify the imposition of the EBR on 9 July 2004.  S econd, the results are "preliminary," by definition, 
and remain subject to correction in the final results of the administrative review.  Third, major Indian 
exporters have complained that there are obvious cal culation errors that, if corrected, will lower duty 
rates considerably.  Fourth, the EBR is a self-fulf illing prophecy:  US Customs allegedly imposed the 
EBR on the basis of its prediction that duty rates will be significantly higher at the end of the 
administrative review; however, exporters who are forced to quit the US market on account of the high costs and collateral requirements of complying with the EBR will not cooperate in the review 
and will, therefore, suffer higher duty rates.  Fifth,  contrary to US suggestions, an initial analysis by 
India's Marine Products Export Development Authority ("MPEDA") reveals that only about 4 % of 
total shrimp exports by value from India during the period of review were subject to the highest duty 
rate of 82%.   India submits that , if non-producer exporters are excl uded on the ground that the shrimp 
they exported was covered in the responses of the actual producers, only about 1.5% of total shrimp 
exports from India would be subject to the highest rate  of 82%.  India further asserts that, in fact, of 
the 17 exporters who have been subjected to an ad verse rate of 82%, eight have not exported at all 
during the period of review, three are not producer exporters and six have insignificant exports, with 
total exports of less than $2,000,000.   44 exporters subject to the "all others rate" have an average rate 
of 10.54% against 10.17% in the original investigation, a minor difference of 0.37%.  India states that the three largest exporters received rates of 4.03%, 11.05% and 24.52% respectively, and that this will 
result in a refund of $2.88 million to the first company and payments of approximately $250,000 and 
$1,000,000 by the other two companies.  According to India, therefore, the US assertion that 63 out of 
70 companies have suffered higher rates, though f actual, does not correctly represent the facts. 
7.125  In principle, we do not consider that the prelim inary results of the first administrative review 
of the shrimp anti-dumping order are relevant to a determination of whether or not an objective and 
impartial investigating authority could properly have  found, at the time that the EBR was imposed on 
shrimp, that rates of dumping by shrimp exporters were likely to increase.  We therefore decline to 
base our findings on such ex post  rationalization.  Even if such analysis were relevant, though, it 
would not favour the position of the United States, fo r India has demonstrated – and the United States 
has not disputed – that rates only increased for a ve ry small proportion of shrimp imports from India, 
and then only to a minor degree. 
7.126  For these reasons, we do not consider that an objective and impartial investigating authority 
could properly have found, on the basis of the evid ence relied on by the United States at the relevant 
time, that the rates of dumping established in the shrimp order were likely to increase.  
7.127  In light of our conclusion in the preceding sub-sec tion, we see no need to consider whether or 
not the United States properly determined the amount by which rates of dumping were likely to increase. 
                                                     
 
153 Certain Frozen Warmwater Shri mp from India: Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative Review, 72 Fed. Reg. 10,658, 10,667-68 (9 Mar. 2007) (Exhibit US-6). 
154 See United States' first written submission, para. 27.  WT/DS345/R 
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  (iv) Summary 
7.128  As a result of our finding that the United Stat es failed to properly establish that the rates of 
dumping provided for in the anti-dumping order were likely to increase, we find that the United States 
failed to demonstrate that the additional secur ity required through the application of the EBR 
reasonably correlated to any case of suspected dum ping in excess of the margin of dumping provided 
for in the anti-dumping order.  Accordingly, we c onclude that the additional security requirements 
resulting from the application of the EBR were not "reasonable" within the meaning of the Ad Note. 
(v) Finding on whether or not the application of the EBR was "in accordance with" the Ad Note 
7.129  In light of our finding that the application of the EBR was not "reasonable" within the 
meaning of the Ad Note, we further find that the application of the EBR was not "in accordance with 
the provisions of the GATT 1994 , as interpreted by" the Anti-Dumping Agreement . 
(c) Conclusion 
7.130  Since we have found that the application of  the EBR constitutes "specific action against 
dumping" that is not "in accordance with the provisions of the GATT 1994 , as interpreted by" the 
Anti-Dumping Agreement , we conclude that the application of the EBR is inconsistent with 
Article 18.1 of the Anti-Dumping Agreement .  In light of the above analysis, we also find that the 
application of the EBR to subject shrimp is inconsistent with the Ad Note. 
7.131  We note that India has also made a claim under Article 1 of the Anti-Dumping Agreement .  
That claim is necessarily dependent on India's Article 18.1 claim.  Since we have found that the application of the EBR to subject shrimp is inconsiste nt with Article 18.1, we likewise find that it is in 
violation of Article 1 of the Anti-Dumping Agreement . 
3. Articles 7.1(iii), 7.2 and 7.4 of the Anti-Dumping Agreement   
(a) Main arguments of India 
7.132  India submits that the application of the E BR is inconsistent with the requirements of 
Article 7 of the Anti-Dumping Agreement  as applied  to importers of shrimp from India.  India 
explains that it considers it necessary to evaluate the consistency of the EBR with the provisions of 
Article 7 of the Anti-Dumping Agreement  as applied  for two reasons: 
 (1) The United States served notices requiring importers of shrimp from India to provide 
enhanced, continuous bonds shortly after the preliminary affirmative determination 
dated 4 August 2004 and well before the Anti-dumping Order on 1 February 2005.  
Further, the Amended CBD does not make pr ovision for the termination of the EBR 
after the issuing of the Order in the case.  Rather, it requires the enhanced bond to be 
renewed so as to reflect the duty rate  currently specified in the Order. 
 
 (2) The United States may seek to defend  the EBR as being a "provisional measure" 
consistent with Article 7 of the Anti-Dumping Agreement  even in cases where the 
United States imposed the EBR on importers after the order in an anti-dumping or 
countervailing duty case.  India submits that  the United States may argue that the 
EBR is intended to secure the collection of du ties after the final liability is assessed in 
administrative review proceedings under its  retrospective assessment system.   
 7.133  India submits that, in both instances, the applica tion of the EBR is inconsistent with Article 7 
of the Anti-Dumping Agreement . WT/DS345/R 
Page 52  
 
  7.134  India asserts that, under Article 7.1(iii) of the Anti-Dumping Agreement , it is necessary that 
"the authorities concerned judge such measures ne cessary to prevent injury being caused during the 
investigation".  According to India, the stated  reasons for introducing the EBR, however, do not 
mention injury being caused during the investigatio n at all and focus rather on protecting revenue 
against any failure on the part of importers to  pay the duties finally assessed and ensuring that 
payments are made to domestic industry pursuant to th e CDSOA that was held to be inconsistent with 
the obligations of the United States in US – Offset Act (Byrd Amendment) .  India therefore submits 
that, if the EBR is a provisional measure, it is  inconsistent with Article 7.1(iii) of the Anti-Dumping 
Agreement . 
7.135  India asserts that the EBR is also inconsistent with Article 7.2 of the Anti-Dumping 
Agreement , since provisional measures, 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. 
7.136  India also submits that the EBR is inconsistent with Article 7.4 of the Anti-Dumping 
Agreement , which limits application of provisional measur es to "a period not exceeding four months," 
to the extent that the EBR on importers is introduced or remains in place on any date after six months 
have elapsed in the anti-dumping case from the date  on which provisional measures are first imposed. 
(b) Main arguments of the United States 
7.137  The United States submits that Article 7 of the Anti-Dumping Agreement  does not apply to the 
EBR.  The United States argues that India appears to  conflate the requirement of reasonable 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 dumpi ng or subsidization).
155  T h e  
United States asserts that the bond directive,  however, is a security requirement imposed after the 
final determination of dumping or  subsidization, pending "determi nation of the final liability for 
payment of anti-dumping duties," and is therefore not  a "provisional measure" within the meaning of 
Article 7 of the Anti-Dumping Agreement .  
7.138  With respect to India's argument that EBR was a pplied in certain cases prior to the issuance of 
the order and therefore constitutes a "provisional measure" inconsistent, as applied , with Article 7 of 
the Anti-Dumping Agreement ,156 the United States asserts that the October 2006 Notice makes clear 
that the directive no longer covers additional bond amounts requested prior to issuance of an order.157 
(c) Evaluation by the Panel 
7.139  We first note the relevant provisions as discussed by India in its claims under Article 7 of the 
Anti-Dumping Agreement : 
7.140  Article 7.1(iii) provides: 
"Provisional measures may be applied only if: 
(iii) the authorities concerned j udge such measure s necessary to 
prevent injury being caused." 
                                                      
155 India's first written submission, para. 92 (asserting that "[i]t is clear that the 'reasonable security 
(bond or cash deposit)' referred to in th e Ad Note is the same as the provisiona l measures referred to in Article 7 
of the Anti-Dumping Agreement ."). 
156 India's first written submission, para. 85. 
157 Exhibit IND-6, p. 62,277 (cf. Exhibit IND-3, p. 2-3).  WT/DS345/R 
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  7.141  Article 7.2 provides: 
"Provisional measures may take the form of a provisional duty or, preferably, a 
security – by cash deposit or bond – equal to the amount of the anti-dumping duty provisionally estimated, being not greater than the provisionally estimated margin of dumping. Withholding of appraisement is  an appropriate provisional measure, 
provided that the normal duty and the esti mated amount of the anti-dumping duty be 
indicated and as long as the withholding of appraisement is subject to the same 
conditions as other provisional measures." 
7.142  Article 7.4 provides:  
"The application of provisional measures sh all be limited to as short a period as 
possible, not exceeding four months or, on  decision of the authorities concerned, 
upon request by exporters representing a significant percentage of the trade involved, to a period not exceeding six months. Wh en authorities, in the course of an 
investigation, examine whether a duty lowe r than the margin of dumping would be 
sufficient to remove injury, these periods may be six and nine months, respectively." 
7.143  We recall that India advanced two reasons for rais ing its Article 7 claims.  First, India alleged 
application of the EBR as a provisional measure, prior to the imposition of the anti-dumping order.  Second, in the event that the United States woul d seek to defend the application of the EBR by 
reference to Article 7 of the Anti-Dumping Agreement .  In view of the US arguments set forth above, 
it is evident that the United States has not sought to defend the application of the EBR under Article 7.  
Accordingly, we shall focus our evaluation on India' s claim regarding the alleged application of the 
EBR prior to the imposition of the anti-dumping order. 
7.144  Prior to the imposition of the anti-dumping order on subject shrimp from India on 1 February 
2005, and on the basis of its prel iminary determination of dumping, injury, and causality, in August 
2004 the United States imposed provisional measures on im ports of subject shrimp in the form of cash 
deposits or (non-EBR) bonds.  We refer to these as  the "initial provisional measures".  The amount of 
these initial provisional measures was "equal to the weighted-average amount by which the [normal 
value] exceeds the [export price]".
158  
7.145  In response to a question from the Panel, the United States acknowledges that, prior to the 
publication of the anti-dumping order on 1 February 200 5, certain importers were also requested to 
submit enhanced bonds in addition to  the abovementioned initial provisional measures.  In particular, 
the United States accepts that, from 6-10 August 2004, officers in one US Customs office sent 
requests for additional bonds to eleven importers of  shrimp (including one importer of shrimp from 
Thailand and India), referring to the enhanced bon d directive.  Subsequently, on 22 October 2004, 
once in November 2004 and three times in January  2005, US Customs officers sent requests for 
additional bonds to a total of 21 importers.159  In our view, these additional bond requests should be 
treated as provisional measures, since they were is sued prior to the publication of the anti-dumping 
order.  
7.146  In accordance with Article 7.2 of the Anti-Dumping Agreement , provisional measures may not 
exceed "the amount of the anti-dumping duty prov isionally estimated."  Since the United States 
applied initial provisional measures in "the amount of the anti-dumping duty provisionally estimated", 
the application of the EBR (prior to imposition of  the anti-dumping order) in conjunction with the 
initial provisional measures necessarily resulted in th e imposition of provisional measures (i.e., the 
                                                      
158 See Notice of Preliminary Determination, page 47,119. 
159 See United States' responses to First Set of Panel Questions, paras. 34-35. WT/DS345/R 
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  initial provisional measures together with the EBR) in excess of "the amount of the anti-dumping duty 
provisionally estimated," contrary to Article 7.2 of the Anti-Dumping Agreement . 
7.147  In light of our finding under Article 7.2 of the Anti-Dumping Agreement , we do not consider 
it necessary to examine India's claims under Articles 7.1(iii) and 7.4 of the Anti-Dumping Agreement . 
4. Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement , and Article VI:2 of the 
GATT 1994  
(a) Main arguments of India 
7.148  India also claims that the EBR as applied  to importers of shrimp from India is inconsistent 
with Article 9 of the Anti-Dumping Agreeement  because "it is impermissible to demand an enhanced, 
continuous bond in addition to the duties collected in an amount equal to the dumping margin or the 
amount of the subsidy found to exist"
160 following a final determination in the initial investigation.   
7.149  India asserts that Article 9.2 of the Anti-Dumping Agreement  only permits the imposition of 
anti-dumping duties in "appropriate amounts."  As an "appropriate amount," India claims that 
Article 9.3 of the Anti-Dumping Agreement  does not permit anti-dumping duties that exceed the 
margin of dumping.   
7.150  Additionally, India argues that Article 9.3.1 of the Anti-Dumping Agreement  does not confer 
any right to Members operating a retrospective duty assessment system to impose any additional 
measure except for anti-dumping duties.  According to India, this was confirmed by the Appellate 
Body in US – 1916 Act , with the finding that the Anti-Dumping Agreement  limits permissible 
responses to dumping to definitive anti-dumpi ng duties, provisional measures, or price 
undertakings.161  Thus, after issuance of an anti-dumping or der, India argues that the United States 
may only collect anti-dumping duties in an amount no greater than specified dumping margins, and 
not additionally a bond as a provisional measure.  India claims that Article 9.3.1of the Anti-Dumpnig 
Agreement  would not have referred to a refund unless some amount had already been collected prior 
to determination of final liability, i.e. cash deposit that are collected in the United States' retrospective 
system.  Moreover, India believes that discussion of a refund in Article 9.3.1 of the Anti-Dumping 
Agreement  presupposes the collection of duties in cash or  cash deposits, and not the taking of a bond 
or other measure based on this language choice.   
(b) Main arguments of the United States 
7.151  The United States argues that the context provided by Article 9 of the Anti-Dumping 
Agreement  supports its interpretation that the Ad Note permits a Member to take reasonable security 
during the period in a retrospective assessment syst em following a final determ ination and prior to a 
final assessment review for a transac tion of goods.  The United States argues that Article 9.2 of the 
Anti-Dumping Agreement  does not preclude a Member from requiring security after the final 
determination in the investigation and pending fi nal determination of the facts with respect to 
payment of duties.  The United States submits that Article 9.2 of the Anti-Dumping Agreement  allows 
Members to collect anti-dumping duties "in the appropriate amounts in each case."  Moreover, 
Article 9.3 states that "[t]he amount of the anti-dumping duty shall not exceed the margin of dumping 
as established under Article 2."  According to th e United States, the margin of dumping established 
following the assessment review described in Article 9.3.1 of the Anti-Dumping Agreement  is a 
margin of dumping that is calculated in accordance with Article 2 of the Anti-Dumping Agreement .  
                                                      
160 See India's first writte n submission, para. 77. 
161 Appellate Body Report, US – 1916 Act (EC) , para. 114; Appellate Body Report, US – Offset Act 
(Byrd Amendment) , para. 269.  WT/DS345/R 
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  The United States argues that the cash deposit and E BR ensure or secure payment of this amount of 
duty in accordance with Article 9.2 of the Anti-Dumping Agreement .  The United States submits that 
Article 9.3.1 of the Anti-Dumping Agreement  reaffirms this.  According to the United States, 
Article 9.3.1 of the Anti-Dumping Agreement  also clarifies that final liability for payment of anti-
dumping duties occurs as the final determination of th e facts with respect to payment—the end of an 
assessment period—like the terminology used in the Ad Note.162 
7.152  The United States criticises India's argument that the phrase "margin of dumping" in 
Article 9.3 of the Anti-Dumping Agreement  refers to the margin of dumping established in a dumping 
investigation or during a previous administrative review.163  The United States argues that the margin 
of dumping is based on actual analysis of particul ar entries during an assessment review in order to 
establish the final liability for payment of anti-dumping duties. 
(c) Evaluation by the Panel 
7.153  We first note the relevant provisions as discussed by India in its claims under Article 9 of the 
Anti-Dumping Agreement  and Article VI:2 of the GATT 1994.  
7.154  Article 9.1 provides: 
"The decision whether or not to impose an anti-dumping duty in cases where all 
requirements for the imposition have been fulfilled, and the decision whether the amount of the anti-dumping duty to be imposed shall be the full margin of dumping or less, are decisions to be made by the authorities of the importing Member. It is desirable that the imposition be permissive in the territory of all Members, and that the duty be less than the margin if such l esser duty would be adequate to remove the 
injury to the domestic industry." 
7.155  Article 9.2 provides: 
"When an anti-dumping duty is imposed in r espect of any product, such anti-dumping 
duty shall be collected in the appropriate amounts in each case, on a non-discriminatory basis on imports of such product from all sources found to be dumped 
and causing injury, except as to imports  from those sources from which price 
undertakings under the terms of this Agre ement have been accepted. The authorities 
shall name the supplier or suppliers of th e product concerned. If, however, several 
suppliers from the same country are involved, and it is impracticable to name all these 
suppliers, the authorities may name the supplying country concerned. If several suppliers from more than one country are involved, the authorities may name either 
all the suppliers involved, or, if this is  impracticable, all the supplying countries 
involved." 
7.156  Article 9.3 provides:  
"The amount of the anti-dumping duty shall not exceed the margin of dumping as 
established under Article 2." 
7.157  Article 9.3.1 provides: 
                                                     
 
162 United States' second written submission, para. 6-7. 
163 United States' second written submission, para. 18. WT/DS345/R 
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  "When the amount of the anti-dumping duty is assessed on a retrospective basis, the 
determination of the final liability for paym ent of anti-dumping duties shall take place 
as soon as possible, normally within 12 mont hs, and in no case more than 18 months, 
after the date on which a request for a final assessment of the amount of the anti-dumping duty has been made.(footnote omitted)  Any refund shall be made promptly 
and normally in not more than 90 days following the determination of final liability 
made pursuant to this sub-paragraph. In any case, where a refund is not made within 
90 days, the authorities shall provide an explanation if so requested." 
7.158  Article VI:2 of the GATT 1994  provides: 
"In order to offset or prevent dumping, a contracting party may levy on any dumped 
product an anti-dumping duty not greater in amount than the margin of dumping in 
respect of such product. For the purposes of this Article, the margin of dumping is the price difference determined in accordance with the provisions of paragraph 1." 
7.159  As indicated by the title to that provision, Article 9 of the Anti-Dumping Agreement  is 
concerned with the "imposition and collection of anti-dumping duties " (emphasis added).  Consistent 
with this title, the disciplines set forth in Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping 
Agreement  concern the imposition and collection of anti-dumping duties .  In our view, therefore, 
measures other than anti-dumping duties fall outside the scope of those provisions.  Accordingly, we shall begin our analysis of India's claim by cons idering whether or not the enhanced bond required by 
the EBR is an anti-dumping duty.  If it does not, India's claim must necessarily fail. 
7.160  In the context of our review of India's claim under Article 18.1 of the Anti-Dumping 
Agreement , we noted India's argument
164 that the term "duty" is defined in the tax context as "the 
payment to the public revenue levied on the impor t, export, manufacture or sale of goods …".165  In 
our view, this definition of the term "duty" is not broad enough to encompass the enhanced bond 
requirements imposed in respect of subject shrimp .  Unlike duties, bonds do not yield public revenue, 
in the sense that bonds have no intrinsic value in and of themselves.  A bond is not a payment to yield 
public revenue at the time it is provided, but rath er, is provided as a form of security.  A bond will not 
yield public revenue until some point in the future when it is converted from a security into a form of 
payment.  Indeed, we recall that India itself ac knowledges that "based on the ordinary meaning and 
the meaning in legal parlance of the terms "provi sional duties" and "security", there is clearly a 
difference, as a matter of law, between collecting du ties, provisionally or otherwise, and the taking of 
security in the form of bonds or cash deposits."166 
7.161  For these reasons, we conclude that the enhan ced bond is not an anti-dumping duty, with the 
result that the application of the EBR falls outside the scope of Article 9 of the Anti-Dumping 
Agreement . 
7.162  We also note India's claim under Article VI:2 of the GATT 1994 .  Like Article 9 of the 
Anti-Dumping Agreement , that provision contains disciplines regarding the levy of anti-dumping 
"duties".  Accordingly, the application of the EBR al so falls outside the scope of Article VI:2 of the 
GATT 1994 . 
                                                      
164 See India's responses to Second Set of Panel Questions, para. 29. 
165 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. I, p. 769. 
166 See India's responses to Second Set of Panel Questions, para. 33.  WT/DS345/R 
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  5. Other as applied  claims by India under the GATT 1994  
7.163  The Panel notes that India has made a number of additional as applied claims under the 
GATT 1994 .  In particular, India has requested  the Panel to find that the EBR as applied  to imports of 
shrimp from India is inconsistent with Article X:3(a) of the GATT 1994  and with Articles I:1, II:1(a) 
and (b) of the GATT 1994 or, alternatively, with Articles XI:1 and XIII of the GATT 1994 . 
7.164  We recall that we have found that the applicati on of the EBR is inconsistent with Article 18.1 
of the Anti-Dumping Agreement because it does not constitute reasonable security in accordance with 
the provisions of  the Ad Note.  We have also found  that the application of the EBR to importers prior 
to imposition of the anti-dumping order violated Article 7.2 of the Anti-Dumping Agreement.  
7.165  The Panel, after careful consideration, on th e basis of judicial economy, refrains from ruling 
on India's claims under Articles X:3(a), XI:1 and XIII, I:1, II:1(a) and (b) of the GATT 1994 .  The 
Panel recalls that the principle of judicial economy  is recognized in WTO law.  The Appellate Body 
has consistently ruled that panels are not require d to address all the claims made by a complaining 
party.  In fact, a panel has discretion to determine which claims it must address in order to resolve the 
dispute between the parties, provided that those claims are within its terms of reference.167  T h e  
Appellate Body has relied on the explicit aim of the dispute settlement mechanism, which is to secure a 
positive solution to a dispute, as provided in Article 3.7 of the DSU , or a satisfactory settlement of the 
matter as per Article 3.4 of the DSU .  The Appellate Body has stressed that the basic aim of dispute 
settlement in the WTO is to settle disputes and not to "make law" by clarifying existing provisions of the WTO Agreement  that fall outside the context of resolving a particular dispute: 
"[G]iven the explicit aim of dispute settlement that permeates the DSU , we do not 
consider that Article 3.2 of the DSU  is meant to encourage either panels or the 
Appellate Body to 'make law' by clarifying existing provisions of the WTO 
Agreement  outside the context of resolving a particular dispute.  A panel need only 
address those claims which must be addressed in order to resolve the matter in issue in the dispute.
168"169  
7.166  We bear in mind that, in Australia – Salmon , the Appellate Body cautioned panels against 
false judicial economy arguing that the right to exercise judicial economy could not be exercised where only a partial resolution of a dispute would result: 
"The principle of judicial economy has to be applied keeping in mind the aim of the 
dispute settlement system.  This aim is to resolve the matter at issue and 'to secure a positive solution to a dispute'.  To provide only a partial resolution of the matter at 
issue would be false judicial economy.  A panel has to address those claims on which 
a finding is necessary in order to enable the DSB to make sufficiently precise recommendations and rulings so as to a llow for prompt compliance by a Member 
with those recommendations and rulings 'in order to ensure effective resolution of disputes to the benefit of all Members.'"
170   
7.167  The Panel believes that this is not the case in the current proceedings.  In making findings 
under Article 18.1 of the Anti-Dumping Agreement , the Panel believes that it has effectively resolved 
                                                      
167 Appellate Body Report. India – Patents (US), para. 87. 
168 (footnote original ) The "matter in issue" is the "matter referred to the DSB" pursuant to Article 7 of 
the DSU . 
169 Appellate Body Report, US – Wool Shirts and Blouses , DSR 1997:I, 323 at 340.  See also Panel 
Report, US – Steel Safeguards , para. 10.701. 
170 Appellate Body Report, Australia – Salmon , para. 223.  See also Panel Report, EC – Sardines, 
paras. 7.148-7.152; Appellate Body Report, US – Steel Safeguards , para. 10.703. WT/DS345/R 
Page 58  
 
  this aspect of the dispute.  The Panel finds support for its exercise of judicial economy in the practice 
of panels and the Appellate Body in previous disp ute settlement proceedings.  For example, as regards 
India's claim under Article XI:1 of the GATT 1994 , the Panel in US – 1916 Act (Japan) , after finding 
a violation of Article VI, held that in the case before  it, Article VI addressed the "basic feature" of the 
measure at issue more directly than Article XI alth ough this did not mean that Article VI applied to 
the exclusion of Article XI:1.  On that occasion, the Panel found that it was entitled to exercise 
judicial economy and decided not to review the claims of Japan under Article XI.
171  Precedent also 
exists as regards India's claim under Article X:3(a) of the GATT 1994 .  In previous disputes, after 
having found violations of, inter alia, Article I of the GATT 1994172, Article 11.2 of the Anti-Dumping 
Agreement173 and Article 2.4.1 of the Anti-Dumping Agreement174, the respective Panels did not 
consider it necessary to examine the Article X:3(a) claims.   
7.168  Even if the Panel would have found that the app lication of the EBR is not inconsistent with 
Article 18.1 of the Anti-Dumping Agreement, the Panel is of the view that it would not be appropriate 
to proceed and rule on India's additional GATT 1994 claims .  We note that the text of Article 18.1 of 
the Anti-Dumping Agreement provides that "[n]o specific action against dumping of exports from 
another Member can be taken except in accordance with the provisions of the  GATT 1994 , as interpreted 
by this Agreement."  We recall that this reference to the provisions of GATT 1994 has been interpreted 
by the Appellate Body as refe rring to Article VI of the GATT 1994 .  We further recall that the Ad Note 
is an integral part of Article VI of the GATT 1994 .  We therefore interpret these provisions to mean that 
the WTO Agreement s allow for the imposition of measures whic h are considered to be specific action 
against dumping provided they are in accordance with Article VI of the GATT 1994 , including its 
Ad Note.175  Accordingly, we are unable to accept that a measure which constitutes specific action 
against dumping in accordance with the provisions of the Ad Note, can nevertheless be found inconsistent with other provisions of the GATT 1994 .  For example, if we were to find that the 
Amended CBD violates the MFN provision of Article I of the GATT 1994, such a finding would, as a 
consequence, render inutile  the provision in Article 18.1 of the Anti-Dumping Agreement , and by 
reference, Article VI of the GATT 1994  and the Ad Note. 
7.169  We find additional support for our conclusion in the General Interpretative Note to Annex 1A  
of the WTO Agreement , which provides that in the event of conflict between a provision of the 
GATT 1994  and another Agreement of Annex 1A, the provi sion of the other Agreement prevails.  We 
have found that the Amended CBD constitutes speci fic action against dumping or subsidisation in 
accordance with Article VI of the GATT 1994, as interpreted by the Anti-Dumping Agreement,  and 
thus, is consistent with Articles 1 and 18.1 of the Anti-Dumping Agreement .  Therefore, our findings 
under these provisions of the Anti-Dumping Agreement must prevail over any potential finding of 
violation under Articles X:3(a), XI:1 a nd XIII, I:1, II:1(a) and (b) of the GATT 1994 .   
7.170  Finally, we consider the Panel's discussion in US – 1916 Act (Japan) further relevant to this 
issue.  After finding a violation of Article VI of the GATT 1994 , the Panel considered whether it must 
also analyse a claim under Article III:4 of the GATT 1994 .  It held that, in the case before it, 
Article VI addressed the "basic feature" of the measur e at issue more directly than Article III:4.  In 
doing so, the Panel referred to the international law principle lex specialis derogat legi generali in 
                                                     
 
171 Panel Report, US – 1916 Act (Japan) , para. 6.281. 
172 Panel Report, Indonesia – Autos , para. 14.152. 
173 Panel Report, US – DRAMS , para. 6.92. 
174 Panel Report, US – Stainless Steel , para. 6.55. 
175 This finding is, of course, without prejudice to the operation and application of note 24 to 
Article 18.1 of the Anti-Dumping Agreement .  In this regard, we note and agree with the Appellate Body's 
finding in US  – Offset Act (Byrd Amendment)  (para. 262) that "an action that is not 'specific' within the meaning 
of Article 18.1 of the Anti-Dumping Agreement and of Article 32.1 of the SCM Agreement , but is nevertheless 
related to dumping or subsidisation, is  not prohibited by Article 18.1 of the Anti-Dumping Agreement or 
Article 32.1 of the SCM Agreement ."  Such action would be governed by other provisions of the GATT 1994 .  WT/DS345/R 
 Page 59 
 
 
  support of its reasoning.176  The Panel did so by virtue of the Appellate Body's finding in EC – 
Bananas III  that:  
"Although Article X:3(a) of the GATT 1994  and Article 1.3 of the Licensing 
Agreement  both apply, the Panel, in our view, should have applied the Licensing 
Agreement  first, since this agreement deals specifically, and in detail, with the 
administration of import licensing procedures.  If the Panel had done so, then there 
would have been no need for it to a ddress the alleged inconsistency with 
Article X:3(a) of the GATT 1994 ."177 
7.171  We agree that the principle of lex specialis  should apply in such circumstances.  Since 
Article VI of the GATT 1994 , including the Ad Note, "deals specifically, and in detail", with the issue 
of security for definitive anti-dumping and countervailing duties, those provisions address the "basic 
feature" of the measure at issue more directly than the other GATT 1994  provisions cited by India.  
Article VI and the Ad Note therefore constitute lex specialis  that should prevail over the more general 
GATT 1994  provisions cited by India. 
7.172  For the above reasons, we conclude  that it would not be  appropriate for us to proceed and rule 
on India's claims under Articles X:3(a), XI:1 and XIII, I:1, II:1(a) and (b) of the GATT 1994 , and we 
decline to do so.  
C. INDIA 'S AS SUCH  CLAIMS  
1. Scope of the measure concerned 
7.173  As a necessary first step in the analysis of India's as such  claims, the Panel is to identify the 
scope of the measure at issue.  For its as such claims, India has identified as the relevant measure any 
amendments, clarifications, or extensions comp rising the Amended CBD, any related implementing 
measures, the statutory provision 19 U.S.C. § 1673, and finally the regulatory provision 19 C.F.R. § 113.13.   
(a) Scope of the Amended CBD 
7.174  As we concluded in Section V II.B.1 above when dealing with the scope of the measure at 
issue in respect to India's as applied  claims, the Amended CBD comprises (i) the Customs Bond 
Directive 99-3510-004 on Monetary Guidelines fo r Setting Bond Amounts, published on 23 July 
1991; (ii) the July 2004 Amendment;
178 (iii) the document Current Bond Formulas;179 (iv) the August 
2005 Clarification;180 and (v) as India indicated in its Request  for Establishment, "any amendments, 
clarifications, or extensions to these measures and all related or implementing measures (together, the 
'Amended CBD') issued by US Customs."181  We also recall that a later instrument, the October 2006 
Notice, which was not yet published when India s ubmitted its Request for Establishment, has been 
found by this Panel to be part of the measure con cerned and thus within its terms of reference.   
(b) The statutory provision 19 U.S.C. § 1673 and the regulatory provision 19 C.F.R. § 113.13 
7.175  Having clarified which legal instruments comprise the Amended CBD, the Panel must also 
address one additional coverage issue: India's requ est to include the statutory provision 19 U.S.C. § 
                                                      
176 Panel Report, US – 1916 Act (Japan) , para. 6.269. 
177 Appellate Body Report, EC – Bananas III , para. 204. 
178 Exhibit IND-3. 
179 Exhibit IND-4. 
180 Exhibit IND-5. 
181 India's first written submission, para. 17. WT/DS345/R 
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  1673 and the regulatory provision 19 C.F.R. § 113.13 with in the scope of the measu re at issue.  Both 
provisions were mentioned in India's Request for Es tablishment but were not included in its Request 
for Consultations.  Unlike with the October 2006 No tice, the United States has strongly contested the 
inclusion of both provisions within our terms of re ference.  The United States argues that we should 
not consider them because they were not men tioned in India's Request  for Consultations.   
7.176  The Panel will thus consider whether it may consider 19 U.S.C. § 1623 and 19 C.F.R. § 
113.13 as within its terms of reference.  The Pane l will first look at the circumstances surrounding the 
inclusion of these two provisions in India's claim.  As mentioned, India did not refer to these statutory 
or regulatory provisions in its Request for Consultations.
182   H o w e v e r ,  i n  i t s  R e q u e s t  f o r  
Establishment, in addition to identifying th e legal instruments encompassing the Amended CBD, 
India stated: 
"[India] understands that the Amended CBD  was adopted pursuant to the laws and 
regulations of the United States that author ize [US Customs] to administer customs 
laws and regulations including 19 U.S.C. §1484, 19 U.S.C. §1502, 19 U.S.C. §1505, 19 U.S.C. §1623, and 19 U.S.C. §1673g, and the regulations governing the amount 
and imposition of bonds codified at 19 C. F.R. §113.13, 19 C.F.R. §113.40, 19 C.F.R. 
§113.62 and 19 C.F.R. §142.2."
183   
7.177  India has commented on the inclusion of these United States customs laws and regulations 
(which include among them, 19 U.S.C. § 1623 and 19 C.F.R. § 113.13) in its later submissions to the Panel.  In its first written submission, India subm its that the United States had indicated during the 
course of consultations that these identical statutor y and regulatory provisions authorize US Customs 
to impose the EBR.
184  India also specified in its first writte n submission that it considered 19 U.S.C. 
§ 1623(a), 19 C.F.R. § 113.1, and 19 C.F.R. § 113. 13 as the authorizing provisions.  Subsequently, 
India clarified that it would focus on 19 U.S.C. § 1623 and 19 C.F.R. § 113.13 with respect to its as 
such claims, claiming that the United States admitted these were the relevant provisions.185   
7.178  Therefore, for purposes of its as such claims, India requests that the Panel consider 19 U.S.C. 
§ 1623 and 19 C.F.R. § 113.13 alongside the Amende d CBD.  As an explanation as to why the Panel 
should consider these provisions within its terms of  reference, India argues that the Request for 
Establishment of a Panel defines the scope of th e Panel's terms of reference and there is no 
requirement of a "precise and exact identity" betw een the measures subject to consultations and the 
measures identified in India's Panel request.186   
7.179  The United States argues that India's claim with respect to 19 U.S.C. § 1623 and 19 C.F.R. § 
113.13 is improper since these provisions were not in cluded in India's Request for Consultations and 
thus do not fall within the Panel's terms of refere nce.  The United States contends that panels are 
limited to evaluating what was included in the Request for Consultations.  Moreover, the United 
States submits that what may or may not have take n place during consultations is not relevant when 
reviewing whether a consultation requirement has been met.187  Regardless of this omission, the 
                                                      
182 See WT/DS345/1. India concedes that these measur es were not included in its Request. (See India's 
second written submission, para. 7). 
183 See WT/DS345/6. 
184 India's first written submission, para. 16. 
185 See India's first oral statement, para. 15; India's responses to First Set of Panel Questions, para. 38.  
In its answers to the First Set of Panel Questions, India reiterated that it wishes to "limit its claims in respect of 
statute and regulatory provisions to 19 USC. [§]1623 and 19 C.F.R. [§]113.13". 
186 India's second written submission, para. 8. 
187 United States' second written submission, para. 41, citing to Appellate Body Report, Mexico – Corn 
Syrup (Article 21.5 – US) , at para. 58.  WT/DS345/R 
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  United States argues that these provisions are stric tly authorizing provisions and do not require WTO-
inconsistent action. 
7.180  With the parties views in mind, we now addres s whether the measure at issue should include 
19 U.S.C. § 1623 and 19 C.F.R. § 113.13 within its terms of reference.  We indicated what are the terms of reference governing this di spute in paragraph 7.12 above.  We  explained in paragraphs 7.16-
7.19 above that Article 7 of the DSU  governs the Panel's terms of reference, Article 4 of the DSU  
governs a complainant's request for c onsultations, and Article 6 of the DSU  governs a complainant's 
request for establishment of a panel.  We also noted  that a panel's terms of reference are governed by 
the Request for Establishment of a panel.
188  We note that the issue of whether the October 2006 
Notice should be included with the Panel's terms of reference has no bearing on whether 19 U.S.C. § 
1623 and 19 C.F.R. § 113.13 should also be included, since these provisions are not amendments or 
modifications to the measure at issue, but altogether separate provisions. 
7.181  We adopt the view of the Appellate Body that a panel's terms of reference are governed by the 
request for establishment of a panel.189  We also consider this in light of the Article 6.2 of the DSU , 
which requires that the request for est ablishment of a panel "identify the specific  measure at issue" 
(emphasis added), and Article 4.4 of the DSU , which  provides that any request for consultations must 
give "identification of the measures at issue".  Necessarily then, a panel's terms of reference will 
include the specific measure as identified in the re quest for establishment of a panel, and moreover, 
such a measure should also have been identified in a complainant's request for consultations, to some 
degree that is less than "specific".  Articles 4 and 6, however, do not indicate to what degree the 
identification of the measure in the request for cons ultations must relate to the identification of the 
measure in the request for establishment. 
7.182  We therefore must consider if any basis ex ists, in light of Articles 4 and 6 of the DSU , to 
permit the inclusion of a measure that is mentioned in India's Request for Establishment but not in its 
Request for Consultations.  In attempting to answer this question, we note that the Appellate Body in 
Brazil – Aircraft  stated: "Articles 4 and 6 of the DSU  … set forth a process by which a complaining 
party must request consultations, a nd consultations must be held, befo re a matter may be referred to 
the DSB for the establishment of a panel."190  In this same Report the Appellate Body, however, also 
rejected the notion that "Articles 4 and 6 of the DSU  ... require a precise and exact identity  between 
the specific measures that were the subject of consul tations and the specific measures identified in the 
request of the establishment of a panel."191  Adhering to its view in Brazil – Aircraft , the Appellate 
Body in US – Upland Cotton  later cautioned the following: 
"We emphasize that consultations are but the first step in the WTO dispute settlement 
process.  They are intended to 'provide the parties an opportunity to define and 
delimit the scope of the dispute between them'.192  We also note that Article 4.2 of the 
DSU  calls on a WTO Member that receives a request for consultations to 'accord 
sympathetic consideration to and afford  adequate opportunity for consultation 
regarding any representations made by anot her Member'.  As long as the complaining 
party does not expand the scope of the dis pute, we hesitate to impose too rigid a 
standard for the 'precise and exact identity'193 between the scope of consultations and 
                                                      
188 See para. 7.19 above, discussing Appellate Body Report, US – Upland Cotton , para. 284. 
189 See e.g. Appellate Body Report, US – Upland Cotton , para. 284, citing to Appellate Body Report on 
US – Carbon Steel , para. 124. 
190 Appellate Body Report, US – Certain EC Products , para. 70, citing to Appellate Body Report, 
Brazil – Aircraft , para. 131. 
191 Appellate Body Report, Brazil – Aircraft , para. 132 (emphasis orignal).   
192 (footnote original)  Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 54. 
193 (footnote original)  Appellate Body Report, Brazil – Aircraft , para. 132 (emphasis omitted). WT/DS345/R 
Page 62  
 
  the request for the establishment of a pane l, as this would substitute the request for 
consultations for the panel request. According to Article 7 of the DSU , it is the 
request for the establishment of a panel that  governs its terms of reference, unless the 
parties agree otherwise.
194"195 
7.183  In addition to its views presented in Brazil – Aircraft  and US  – Upland Cotton , the Appellate 
Body has also found that a m easure challenged by a party does not properly fall within a panel's terms 
of reference simply because that measure w as referred to in the panel request.  In US – Certain EC 
Products , the Appellate Body addressed a situation where an action undertaken after the consultations 
was not identified in the Request for Consultati ons although it was included in the Request for 
Establishment.196  The measure was not the subject of the consultations because it happened after the 
submission of the consultations request.  In its an alysis, the Appellate Body developed a standard to 
consider whether an instrument included in the Request for Es tablishment but absent from the 
Request for Consultations could nevertheless be consid ered as a measure at issue and therefore part of 
the Panel's mandate: whether the alleged measures at issue are separate and legally distinct 
measures.197   
7.184  In the case before us, India's Request for Consultati ons is clearly silent in respect of 19 U.S.C. 
§ 1623 and 19 C.F.R. § 113.13.  The text of Indi a's Request for Consultations (including its 
footnotes)198 refers only to the legal instruments that  comprise the Amended CBD (with the exception 
                                                      
194 (footnote original) Appellate Body Report, US – Carbon Steel , para. 124. 
195 Appellate Body Report, US – Upland Cotton , para. 293. 
196 See Appellate Body Report, US – Certain EC Products , paras. 69-70. 
197 The Appellate Body evaluated one measure at issue in this dispute, the "increased bonding 
requirements as of 3 March on EC listed products", against a separate measure, the "19 April action" governing 
the imposition of 100 per cent duties on certain designated products imported from the European Communities. 
See Appellate Body Report, US – Certain EC Products , para. 60. 
198 India's Request for Consultations provides, in relevant part: 
 
"My authorities have instructed me to request consultations with the United States of America (the 'United States') pursuant to Article 4 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes, Article XXII:1 of the General Agreement on Tariffs 
and Trade 1994 (the 'GATT'), Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Ta riffs and Trade 1994 (the ' Anti-Dumping Agreement ') and 
Article 30 of the Agreement on Subsidies and Countervailing Measures (the ' Subsidies 
Agreement ') with respect to the Customs Bond Directive 99 3510-004 on Monetary Guidelines 
for Setting Bond Amounts issued on 23 July 1991 , as amended by the Amendment to Bond 
Directive 99-3510-004 for Certain Merchandise subject to Antidumping/Countervailing Duties dated 9 July 2004
1, and any clarifications and amendments thereof2 (together, the 
'Amended Bond Directive'). 
 … 
 
Pursuant to the Amended Bond Directive, the United States has imposed the enhanced bond requirement on importers of the subject merchandise from India. 
 
The Government of India considers that th e Amended Bond Directive is inconsistent as such  
..." 
__________ 
1 Posted on the Internet Website of the United States Customs and Border Protection Service 
at http://www.cbp.gov/xp/cgov /import/add_cvd/bonds/ 07082004.xml, as accessed on 26 May 
2006 
2 These include, for example, (i) the document entitled 'Current Bond Formulas', posted on the 
Internet Website of the United States Cu stoms and Border Protection Service at 
http://www.cbp.gov /linkhandler/cgov/impor t/communications_to_trade/pilot_program/  WT/DS345/R 
 Page 63 
 
 
  of the October 2006 Notice, an issue which we ha ve already addressed above in Section VII.B.1 
above.  India in fact concedes that  its Request for Consultations does not refer to any US statutory and 
regulatory provisions.199 
7.185  With respect to India's reference to 19 U.S.C. § 1623 and 19 C.F.R. § 113.13 in its Request 
for Establishment, we note that paragraph 7.176 above lists both of  these provisions alongside several 
other US statutory and regulatory measures. 
7.186  We thus consider 19 U.S.C. § 1623 and 19 C.F.R. § 113.13, as identified in India's Request 
for Establishment of a Panel but not its Request for Consultations.  The Panel will not consider the 
actual statements made during consultations, but only the consultation request and the measures 
themselves in determination of the scope of  the measure.  As the Appellate Body in US – Upland 
Cotton  explained, referring to the approach adopted by the Panel in Korea – Alcoholic Beverages , 
"...[w]hat takes places in ...consultations is not the concern of a panel".200   
7.187  In light of the Appellate Body's findings in US – Certain EC Products  that it is necessary to 
examine what two measures actually do in order to determine the legal relationship between these two 
measures, we will examine, on the basis of factual findings of the Panel, what the Amended CBD, 19 
U.S.C. § 1623 and 19 C.F.R. § 113. 13 each actually do, or provide for. 
7.188  We begin our assessment with the Amended CBD.  The texts of the instruments comprising 
the Amended CBD indicate on their face that the measure addresses the imposition of the EBR to 
"covered cases" of "special category" merchandise.  The August 2004 Amendment indicates that one of the goals of amending the bond directive is "ensuring [US Customs'] ability to collect the 
anti-dumping and countervailing dutie s at liquidation and ensuring that the revenue is protected".
201  
To accomplish this end, in particular, the instrume nts provide formulas to determine the amount of the 
EBR, establish a methodology for making individualized determinations of enhanced bond amounts for individual exporters/producers, and describe notif ication and publication requirements.  We note 
finally that the 2004 Amendment
202, 2005 Clarification203, and October 2006 Notice204 also each 
expressly refer to 19 C.F.R. § 113.13 as constituting th e laws and regulations for which United States 
Customs intends to ensure compliance.205 
                                                                                                                                                                     
current_bond.ctt/current_bond.doc, on 9 July 2004, as accessed on 26 May 2006; and (ii) the 
document entitled 'Clarification to July 9, 2004 Amended Monetary Guidelines for Setting 
Bond Amounts for Special Categories of Merchandise Subject to Antidumping and/or Countervailing Duty Cases', posted on the Internet Website of the United States Customs and 
Border Protection Service at  
http://www.cbp.g ov/linkhandler/cgov/import/add_cvd /bonds/bond_clar ification.ctt/ 
bond_clarification.doc, as accessed on 26 May 2006."  (See WT/DS345/1, p. 1). 
199 See India's second written submission, para. 7 
200 Appellate Body Report, US – Upland Cotton , para. 287, citing to Panel Report, Korea – Alcoholic 
Beverages , para. 10.19.  The Appellate Body emphasised that no public record of what actually occurs in 
consultations exists, and parties are also lik ely to disagree about what was discussed. 
201 Exhibit IND-3, p. 2. 
202 Exhibit IND-3, p. 1. 
203 Exhibit IND-5, p. 1. 
204 Exhibit IND-6, p. 62,276. 
205 The 2006 Notice identifies 19 C.F.R. § 113.13 as the regulation that governs determination of bond 
amounts.  The 2005 Clarification provides that United States Customs has "broad authority under 19 C.F.R. § 
113.13 to formulate guidelines to set the amount of continuous bonds".  The 2004 Amendment also refers to 19 C.F.R. § 113.13 as the laws and regulations that authorize  United States Customs to determine if continuous 
bond amounts are adequate.   WT/DS345/R 
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  7.189  We next turn to 19 U.S.C. § 1623.  Section 19 U.S.C. § 1623 permits the Secretary of the 
Treasury to authorize US Customs to require bonds or  other security to facilitate US Treasury revenue 
collection or to enforce US laws or regulations .  This provision provides in pertinent part: 
"In any case in which bond or other security is not specifically required by law, the 
Secretary of the Treasury may by regulation or specific instruction require, or 
authorize customs officers to require, such bonds or other security as he, or they, may 
deem necessary for the protection of the revenue or to assure compliance with any provision of law, regulation, or instructi on which the Secretary of the Treasury or the 
Customs Service may be authorized to enforce."
206 
7.190  Generally, the provisions of 19 U.S.C. § 1623 al so govern the conditions and form of the 
bond, cancellation of a bond, validity of a bond,  and making of deposits in lieu of bonds.207 
                                                      
206 See 19 U.S.C.. § 1623(a). 
207 19 U.S.C. § 1623 provides in full:  
(a) Requirement of bond by regulation. In any case in which bond or other security is not specifically 
required by law, the Secretary of th e Treasury may by regulation or specifi c instruction require, or authorize 
customs officers to require, such bonds or other security as he, or they, may deem necessary for the protection of 
the revenue or to assure compliance with any provision of  law, regulation, or instruction which the Secretary of 
the Treasury or the Customs Service may be authorized to enforce.  
(b) Conditions and form of bond. Whenever a bond is required or authorized by a law, regulation, or 
instruction which the Secretary of the Tr easury or the Customs Service is auth orized to enforce, the Secretary of 
the Treasury may—  
(1) Except as otherwise specifically provided by law, prescribe the conditions and form of such bond 
and the manner in which the bond may be filed with or, pursuant to an authorized electronic data interchange 
system, transmitted to the Customs Service, and fix the amount of penalty thereof, whether for the payment of 
liquidated damages or of a penal sum: Provided, That when a consolidated bond authorized by paragraph 4 of 
this subsection is taken, the Secretary of the Treasury may fix the penalty of such bond without regard to any 
other provision of law, regulation, or instruction.  
(2) Provide for the approval of the sureties on such bond, without regard to any general provision of 
law.  
(3) Authorize the execution of a term bond the conditions of which shall extend to and cover similar 
cases of importations over such period of time, not to exceed one year, or such longer period as he may fix when 
in his opinion special circumstances existing in a pa rticular instance require such longer period.  
(4) Authorize, to the extent that he may deem nece ssary, the taking of a consolidated bond (single entry 
or term), in lieu of separate bonds to assure compliance with two or more provisions of law, regulations, or 
instructions which the Secretar y of the Treasury or the Cu stoms Service is authorized to enforce. A consolidated 
bond taken pursuant to the authority contained in this su bsection shall have the same force and effect in respect 
of every provision of law, regulation, or instruction for the purposes for which it is required as though separate 
bonds had been taken to assure compliance with each such provision.  
(c) Cancellation of bond. The Secretary of the Treasury may authorize the cancellation of any bond 
provided for in this section, or of any charge that may have been made against such bond, in the event of a 
breach of any condition of the bond, upon the payment of such lesser amount or penalty or upon such other terms and conditions as he may deem sufficient. In order to assure uniform, reasonable, and equitable decisions, 
the Secretary of the Treasur y shall publish guidelines establishing standards for setting the terms and conditions 
for cancellation of bonds or charges thereunder.  
(d) Validity of bond. No condition in any bond taken to assure compliance with any law, regulation, or 
instruction which the Secretary of the Treasury or the Customs Service is au thorized to enforce shall be held 
invalid on the ground that such condition is not specified in the law, regulation, or instruction authorizing or requiring the taking of such bond. Any bond transmitted to the Customs Service pursuant to an authorized 
electronic data interchange system shall have the same force and effect and be binding upon the parties thereto 
as if such bond were manually executed, signed, and filed.  
(e) Deposit of money or obligation of US in lieu of bond. The Secretary of the Treasury is authorized to 
permit the deposit of money or obliga tions of the US, in such amount and upon such conditions as he may by  WT/DS345/R 
 Page 65 
 
 
  7.191  Lastly, we consider the provision 19 C.F.R. § 113.13. Section 19 C.F.R. § 113.13, which 
similarly authorizes a US Customs officer to requi re security in order to facilitate US Treasury 
revenue collection or enforce US Customs laws  or regulations, provides in pertinent part: 
"Notwithstanding the provisions of this secti on or any other provision of this chapter, 
if a port director or drawback officer belie ves that acceptance of a transaction secured 
by a continuous bond would place the reve nue in jeopardy or ot herwise hamper the 
enforcement of Customs laws or regulati ons, he shall require additional security."208 
7.192  Generally, the provisions in 19 C.F.R. §113.13 also govern minimum bond amounts, 
guidelines for determining the bond amounts and periodic review of bond sufficiency.209 
7.193  Based on our analysis of each of the Amended CBD, 19 U.S.C. § 1623 and 19 C.F.R. § 
113.13 on its face, and in line with the analysis undertaken in US - Certain EC Products , we conclude 
for several reasons that 19 U.S.C. § 1623 and 19 C.F.R. § 113.13 are legally distinct  from the legal 
instruments comprising the Amended CBD.  As in US - Certain EC Products , the Amended CBD and 
19 U.S.C. § 1623 and 19 C.F.R. § 113.13 do not provide for the same action.  On the one hand, the Amended CBD specifically permits the imposition of the EBR to "covered cases" of "special 
category" merchandise to secure collection of anti-dumping and/or  countervailing duties , and 
provides formulas to determine the amount of  the EBR as well as a methodology for making 
individualized determinations.  As we noted, th e August 2004 Amendment indicates that one of the 
goals of amending the bond directiv e is "ensuring [US Customs'] ability to collect the anti-dumping 
and countervailing duties at liquidation and ensuring that the revenue is protected".
210  On the other 
                                                                                                                                                                     
regulation prescribe, in lieu of sureties on any bond requir ed or authorized by a law, regulation, or instruction 
which the Secretary of the Tr easury or the Customs Service is authorized to enforce. 
208 See 19 C.F.R. § 113.13(d). 
209 19 C.F.R. § 113.13 provides in full: 
(a) Minimum amount of bond. The amount of any Customs bond shall not be less than $100, except 
when the law or regulation expressly provides that a lesser amount may be taken. Fractional parts of a dollar 
shall be disregarded in computing the amount of a bond. The bond always shall be stated as the next highest dollar. 
(b) Guidelines for determining amount of bond. In determining whether the amount of a bond is 
sufficient, the port director or drawback office in the case of a bond relating to repayment of erroneous drawback payment (See §113.11)  should at least consider: 
(1) The prior record of the principal in timely payment of duties, taxes, and charges with respect to the 
transaction(s) involving such payments; 
(2) The prior record of the princi pal in complying with Customs demands for redelivery, the obligation 
to hold unexamined merchandise intact, and other requirements relating to enforcement and administration of Customs and other laws and regulations; 
(3) The value and nature of the merchandise invo lved in the transaction(s) to be secured; 
(4) The degree and type of supervision that Cu stoms will exercise over  the transaction(s); 
(5) The prior record of the principal in honouring bond commitments, including the payment of 
liquidated damages; and 
(6) Any additional information contai ned in any application for a bond. 
(c) Periodic review of bond sufficiency. The port directors and drawback offices shall periodically 
review each bond filed in their respectiv e port or drawback office in the case of a bond relating to repayment of 
erroneous drawback payment (See §113.11) to determine whether the bond is adequate to protect the revenue and insure compliance with the law and regulations. If the port director or drawback office determines that the 
bond is inadequate, the principal shall be immediately no tified in writing. The principal shall have 30 days from 
the date of notification to remedy the deficiency. 
(d) Additional security. Notwithstanding the provisions of this section or any other provision of this 
chapter, if a port director  or drawback office believes that acceptance of a transaction secured by a continuous 
bond would place the revenue in jeopardy or otherwise ha mper the enforcement of Customs laws or regulations, 
he shall require additional security. 
210 Exhibit IND-3, p. 2. WT/DS345/R 
Page 66  
 
  hand, 19 U.S.C. § 1623 provides the Secretary of the Treasury with a general regulatory power to 
require or authorize customs officers to require bonds or other forms of security in order to protect the 
revenue or to assure compliance with a US Treasury or  US Customs law, regula tion, or instruction.  
Similarly, 19 C.F.R. § 113.13 generally authorizes a port director to require security in the form of a 
continuous bond in order to protect  Treasury revenue or enforce Customs laws or regulations.  In our 
view, the provisions 19 U.S.C. § 1623 and 19 C.F. R. § 113.13 could in fact address many more 
circumstances entirely distinct from those envisioned through application of an enhanced bond 
requirement to "covered cases" of "special categor y" merchandise.  Moreover, 19 U.S.C. § 1623 and 
19 C.F.R. § 113.13 do not in any way specify particul ar requirements or limitations related to the 
imposition of continuous bonds or other types of secu rity requirements, for imports subject to anti-
dumping or countervailing duties, other than a $100 minimum amount, as does the Amended CBD.  
On the basis of these aspects alone of each the Amended CBD, U.S.C. § 1623 and 19 C.F.R. § 113.13, we consider that the Amended CBD is legally dis tinct from 19 U.S.C. § 1623 and 19 C.F.R. § 113.13.   
7.194  We also note that if the Amended CBD were condemned as such , the United States would no 
longer be permitted to require security in the period following a final determination in the original 
anti-dumping or countervailing duty investigation until final assessment of liability in order to ensure 
collection of anti-dumping and/or countervailing duti es.  However, to condemn 19 U.S.C. § 1623 and 
19 C.F.R. § 113.13 would limit the United States' ab ility to impose security requirements to ensure 
revenue collection in a wide array of circumstances.  Based on its design, the Amended CBD does not encompass or necessarily relate to the same breadth of actions or circumstances.  This, in our view, 
enforces the notion that the Amended CBD is legally distinct from the provisions of 19 U.S.C. § 1623 
and 19 C.F.R. § 113.13. 
7.195  Finally, we address the fact that the Amended CBD refers to 19 C.F.R. § 113.13 as providing 
authority for the Amended CBD.  We do not consider  this fact requires us to conclude that the 
measures (or 19 U.S.C. § 1623) are somehow inextr icably linked.  Foremost, the Amended CBD and 
19 U.S.C. § 1623 and 19 C.F.R. § 113.13 are each dis tinct legal instruments—one a directive, one a 
statute, and the third a regulation, respectively.  Additionally, as we indicated, the authority embodied 
in 19 C.F.R. § 113.13 applies broadly and genera lly to many possible situations and circumstances 
entirely distinct from that provided for in the Amende d CBD.  When considering the text of 19 U.S.C. 
§ 1623 (i.e. the fact that both the US Treasury S ecretary and US Customs Service are authorized to 
require security), there are even more occasions for which 19 U.S.C. § 1623 authorizes the US Treasury or US Customs to act that in the case of 19 C.F.R. § 113.13.  Thus , both 19 U.S.C. § 1623 
and 19 C.F.R. § 113.13 are inextricably linked to va rious additional circumstan ces and occasions that 
have no connection with or contex t relevant to the Amended CBD.  As we explained, 19 C.F.R. § 
113.13 authorizes US Customs officials to require  security under any circumstances where a US 
Customs official considers revenue to be in jeopardy or US Customs laws to be inhibited, and 19 
U.S.C. § 1623 more broadly authorizes US Custom s officials or US Treasury officials to require 
security under any circumstances to assure compliance with any provision of law, regulation, or 
instruction which the Secretary of the Treasury or th e Customs Service may be authorized to enforce.  
Neither of these provisions strictly addresses the purpose of ensuring collection of anti-dumping or countervailing duties for "covered cases" of  "special category" merchandise.   
7.196  Accordingly, in light of the fact that we c oncluded that both 19 U.S.C. § 1623 and 19 C.F.R. § 
113.13 are legally distinct from the Amended CBD we find that 19 U.S.C. § 1623 and 19 C.F.R. § 
113.13 should not be considered within the scope of the measure at issue, and thus, are not within 
Panel's terms of reference. 
7.197  Based on the foregoing conclusions, the Pane l will consider the October 2006 Notice and 
other instruments comprising the Amende d CBD for purposes of resolving India's as such
 claims, but 
will not address 19 U.S.C. § 1623 and 19 C.F.R.  § 113.13 in connection with this dispute.  WT/DS345/R 
 Page 67 
 
 
  2. Whether the measure at issue may be challenged " as such " 
7.198  We next consider whether the measure at issu e in this dispute may properly be challenged as 
such.  According to India, the Amended CBD may be challenged  as such  because together these 
provisions constitute "rules and norms  of general and prospective app lication that require US Customs 
to undertake impermissible specific actions agains t dumping and subsidization by taking security in 
every case in which it perceives a risk of being una ble to collect anti-dumping or countervailing duties 
at liquidation that it fears may be higher than th e duty rates determined on the basis of the final 
affirmative determination".211  The United States has argued that India has not sufficiently stated its as 
such claims to merit consideration by this Panel. 
7.199  Under WTO law, an as such claim challenges "laws, regulations, or other instruments of a 
Member that have general and prospective app lication, asserting that a Member's conduct—not only 
in a particular instance, but in future situations  as well—will necessarily be inconsistent with that 
Member's WTO obligations."212  
7.200  The Appellate Body indicated in US — Corrosion-Resistant Steel Sunset Review that "in 
principle, any act or omission attributable to a WTO Member can be a 'measure' of that Member for 
purposes of dispute settlement proceedings".213  The Appellate Body further elaborated on this 
concept:  
"[I]nstruments of a Member containing ru les or norms could constitute a 'measure' 
irrespective of how or whether those rules or norms are applied in a particular instance.  This is so because the discip lines of the GATT and the WTO, as well as the 
dispute settlement system, are intended to protect not only existing trade but also the 
security and predictability needed to conduct future trade.  This objective would be 
frustrated if ... instruments could not be brought before a panel once they have been 
adopted and irrespective of any particular instance of application of such rules or norms.  It would also lead to a multiplicity of litigation if instruments embodying rules or norms could not be challenged as such , but only in the instances of their 
application. Thus, allowing claims against measures, as such , serves the purpose of 
preventing future disputes by allowing the r oot of WTO-inconsistent behaviour to be 
eliminated."
214 
7.201  The concept of what constitutes a measure that may be challenged as such was discussed in 
GATT jurisprudence: 
"In the practice under the GATT, most of the measures subject, as such , to dispute 
settlement, were  legislation .  We nevertheless observed in Guatemala – Cement I 
that, in fact, a broad range of measures could be submitted, as such , to dispute 
settlement:  
In the practice established under the GATT 1947 , a 'measure' may be 
any act of a Member, whether or not legally binding, and it can 
include even non-binding administrative guidance by a government 
                                                      
211 India's responses to First Set of Panel Questions, para. 42.  In its first oral submission, India 
contends that there is no substantive difference between amending a provision in a US anti-dumping or 
countervailing duty statute to provide discretion, or simply extending the reach of a customs statute, such as 19 
USC. § 1623 to confer discretion. (See India's first or al statement, para. 16; see also India's second written 
submission, para. 18). 
212 See Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 172. 
213 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 81. 
214 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 82. WT/DS345/R 
Page 68  
 
  (see Japan – Trade in Semi-Conductors , adopted 4 May 1988, BISD 
35S/116)
215."216 
7.202  The Appellate body has clarified that both mandatory and non-mandatory measures alike 
could be challenged as such in relation to claims brought under the Anti-Dumping Agreement217: 
"Article 18.4 contains an explicit obligation for Members to 'take all necessary steps, 
of a general or particular character' to ensure that their 'laws, regulations and 
administrative procedures' are in conformity  with the obligations set forth in the 
Anti-Dumping Agreement . Taken as a whole, the phrase 'laws, regulations and 
administrative procedures' seems to us to  encompass the entire body of generally 
applicable rules, norms and standards a dopted by Members in connection with the 
conduct of anti-dumping proceedings.218  If some of these types of measure could not, 
as such , be subject to dispute settlement under the Anti-Dumping Agreement , it would 
frustrate the obligation of 'conformity' set forth in Article 18.4."219 
7.203  Regarding the form that a measure must take in order for it to be challenged as such , in US – 
Zeroing (EC) , the Appellate Body explained the following: 
"[w]hen an ' as such ' challenge is brought against a 'rule or norm' that is expressed in 
the form of a written document – such as a law or regulation – there would, in most cases, be no uncertainty as to the existence or content of the measure that has been 
challenged."
220 
7.204  In the dispute before us, we note that the Amende d CBD is indeed a rule or norm in the form 
of a written document that directs the United States to act –in this case, to impose continuous bond 
security requirements on designated "covered cases" of  "special category" merchandise, i.e. shrimp 
imported from India currently subject to an anti-dumpi ng order.  We therefore conclude that the Panel 
may properly evaluate the measure at issue,  the Amended CBD, with respect to India's as such claims, 
regardless of whether these measures are mandatory or discretionary. 
3. The "mandatory/discretionary" distinction as an analytical tool 
7.205  As a final preliminary matter, we consider wh ether the "mandatory/discretionary" distinction 
should be applied when evaluating India's as such  claims.   
                                                      
215 (footnote original ) Appellate Body Report on Guatemala – Cement I , footnote 47 to para. 69.  We 
note, too, that the panel in  Japan – Semi-Conductors referred (in para. 107) to another GATT case, Japan – 
Agricultural Products  I, where the panel also examined a measure co mposed, at least in part, of administrative 
guidance.   
216 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 85.  The Appellate 
Body also refers to the finding in US – 1916 Act  that Article 17.4 does not place any limit on a panel's 
jurisdiction to entertain claims against legislation as such  (See Appellate Body Report on US – Corrosion-
Resistant Steel Sunset Review , para. 83). 
217 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 88. 
218 (footnote original ) We observe that the scope of each elemen t in the phrase "laws, regulations and 
administrative procedures" must be determined for purposes of WTO law and not simply by reference to the 
label given to various instruments under the domestic law of each WTO Member. This determination must be based on the content and substance of the instrument, and not merely on its form or nomenclature. Otherwise, 
the obligations set forth in  Article 18.4 would vary from Member  to Member depending on each Member's 
domestic law and practice. 
219 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 87. 
220 Appellate Body Report, US – Zeroing (EC) , para. 197.  WT/DS345/R 
 Page 69 
 
 
  7.206  India submits that the "mandatory/discretionary" distinction is no longer applicable.  India 
argues that the discretion provided by the Amende d CBD assessed together with 19 U.S.C. § 1623 
and 19 C.F.R. § 113.13 to undertake impermissible specific action against dumping and subsidisation, 
renders these provisions WTO-inconsistent as such .221   
7.207  The United States argues that Amended CBD provi des US Customs with discretion to apply 
additional bond requirements on impor ters, and thus, in light of the "mandatory/discretionary" 
distinction, is not as such  WTO-inconsistent.     
7.208  The controversial "mandatory/discretionary" distinction was early on developed as an 
approach under the GATT system to address as such  claims.  Panels that applied the distinction 
considered whether a disputed measure may only be inconsistent with a GATT or WTO obligation 
because it mandates  a violation, or precludes  action that is consistent w ith an obligation, or whether 
the disputed measure may be considered as incons istent even where the national authorities have 
discretion  to apply the measure.  In US – Tobacco222 and US – 1916 Act223, for instance, legislation 
that merely gave discretion to an authority to  violate GATT or WTO obligations could not be 
condemned as such  but could still be ch allenged and condemned as applied . 
7.209  The scope of applicability of the "mandatory/di scretionary" distinction has been a source of 
debate among WTO members and in WTO jurispruden ce.  We are aware that the Appellate Body has 
explained that panels are not obliged, as a preliminary jurisdicti onal matter, to examine whether the 
challenged measure is mandatory.224  For the Appellate Body, "this issue is relevant, if at all, only as 
part of the panel's assessment of whether the measure is, as such , inconsistent with particular 
obligations."225 However, the Appellate Body in the same Report commented more broadly on the 
need to exercise caution when applying th e "mandatory/discretionary" distinction226: 
"[W]e have not, as yet, been required to  pronounce generally upon the continuing 
relevance or significance of the Ma ndatory/Discretionary distinction.227  Nor do we 
                                                      
221 In its first oral statement, India does not substan tively differentiate between amending a provision in 
a United States anti-dumping or counterv ailing duty statute to provide discre tion, or simply extending the reach 
of a customs statute, such as 19 USC. § 1623 to confer  discretion: See India's firs t oral statement, para. 16. 
222 See GATT Panel Report, US – Tobacco , para. 118. 
223 Appellate Body Report, US – 1916 Act , para. 88. 
224 See Section VII.C.2 above. 
225 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 89.  See also, US – 
Export Restraints : The Panel declined to consider the "mandatory/discretionary" distinction as a threshold 
consideration, and instead identifie d and addressed the relevant WTO obligations first to assess how the 
legislation at issue addressed those obligations and whether any violation arose from that ( US – Export 
Restraints , paras. 8.11-8.13); US – Tobacco : The GATT Panel first resolved any controversy as to the 
requirements of the GATT/WTO obligations at issue, and then considered in light of those findings whether the defending party had demonstrated adequately that it had sufficient discretion to conform with those rules ( US – 
Tobacco , para. 123). 
226 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 93. 
227 (footnote original ) In our Report in United States – 1916 Act , we examined the challenged 
legislation and found that the alleged "discretionary" elements of that legislation were not of a type that , even 
under the "mandatory/discretionary" distinction , would have led to the measure being classified as 
"discretionary" and theref ore consistent with the Anti-Dumping Agreement .   In other words, we assumed that 
the distinction could be applied because it did not, in any event, affect the outcome of our analysis.  We 
specifically indicated that it was not nece ssary, in that appeal, for us to answer "the question of the continuing 
relevance of the distinction between mandatory and discretionary legislation for claims brought under the  Anti-
Dumping Agreement ".  (Appellate Body Report, US – 1916 Act , para. 99).  We also expressly declined to 
answer this question in footnote 334 to paragraph 159 of our Report in US – Countervailing Measures on 
Certain EC Products .  Furthermore, the appeal in US – Section 211 Appropriations Act  presented a unique set 
of circumstances.  In that case, in defending the measure challenged by the European Communities, the United WT/DS345/R 
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  consider that this appeal calls for us to undertake a comprehensive examination of 
this distinction.  We do, nevertheless, wish to observe that, as with any such 
analytical tool, the import of the 'Mandatory/Discretionary distinction' may vary from case to case.  For this reason, we also wish  to caution against the application of this 
distinction in a mechanistic fashion."
228   
7.210  Other recent Appellate Body and panel reports  have also recognized the import of the 
distinction as a technique for evaluating as such  claims and applied the tool to their analysis, but 
similarly declined to examine its continuing relevance.229   
7.211  We likewise consider it unnecessary to undert ake a comprehensive examination of the 
"mandatory/discretionary" distinction in the abstr act.  Instead, we will address this issue only to the 
extent necessary in light of our analys is of each of the provisions challenged as such  by India in this 
proceeding. 
                                                                                                                                                                     
States unsuccessfully argued that discretionary regulations, issued under a separate law, cured the discriminatory 
aspects of the measure at issue.   
228 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 93.  In that case, the 
Appellate Body reversed Panel's finding that the Sunset Policy Bulletin was not a mandatory legal instrument, 
thereby eliminating the need to assess the continuing re levance of the "mandatory/discretionary" distinction.  
See Appellate Body Report, US – Corrosion Resistant Steel Sunset Review , para. 100. 
229 E.g. in US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) , the United 
States argued that the Panel had erred when it consid ered whether Section 751(c)(4)(B) of the Tariff Act could  
breach Article 11.3 of the Anti-Dumping Agreement , rather than considering whether the statute mandates  a 
breach.  The Appellate Body concluded that the amended waiver provisions do not preclude the USDOC from 
making a reasoned determination with a sufficient f actual basis, as required by Article 11.3 of the Anti-Dumping 
Agreement , and do not preclude the USDOC from considering other evidence on the record of the sunset review.  
(See Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) , 
paras. 14–20, 120-121).  In US – Zeroing (EC)  the Appellate Body reiterated its previous statements on the 
"mandatory/discretionary" distinction in US – Corrosion-Resistant Steel Sunset Review  that "... as with any such 
analytical tool, the import of the '"mandatory/discretionary" distinction' may vary from case to case.  For this 
reason, we also wish to caution agains t the application of this distinction in a mechanistic fashion."  (Appellate 
Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 93.) (See Appellate Body Report, US – 
Zeroing (EC) , paras. 206-214.)  In Mexico – Anti-Dumping Measures on Rice , Mexico argued that a provision 
was WTO consistent because it was not mandatory.  The Pa nel had found that "...by threatening to impose fines 
on anyone importing the product subject to an anti-dumpin g investigation, [the provision] of the Act clearly 
provides for a specific action against dumping or subsidization which is not provided for in the [ Anti-Dumping 
Agreement ] or SCM Agreement ". Moreover, the Panel stated, "[w]hen a law like the Act provides that it 'shall be 
the responsibility of the Ministry to punish the following infringements', (citation omitted) it does more than just 
dividing competences among the government, but rather stipulates that fines are to be imposed in case the 
conditions of [the provision] of the Act are met and that it is up to the Ministry of Economy responsible also for 
the conduct of anti-dumping and countervailing duty investigations to impose such fines." [See Panel Report, 
Mexico – Anti-Dumping Measures on Rice , para. 7.278 and 7.279.]  Mexico argued on appeal that the Panel had 
failed to read the challenged provisions in the light of another provision, which would have would have led the Panel to conclude that the measure allowed for discretion to act in a manner consistent with its obligations under 
the WTO Agreement s.  The Appellate Body rejected this argument. (See Appellate Body Report on Mexico – 
Anti-Dumping Measures on Rice , paras. 271-272.)    In Korea – Commercial Vessels  the Panel found that there 
had not been a rejection by the Appellate Body in US – Corrosion-Resistant Steel Sunset Review  of the use of 
the traditional "mandatory/discretionary" distinction per se. The Panel proceeded to resolve the EC's " as such " 
claims on the basis of whether or not the measure at i ssue mandates the provision of export subsidies.  (See 
Panel Report, Korea – Commercial Vessels , paras. 7.58-7.67.)  In US – Countervailing Measures on Certain EC 
Products , the Appellate Body stated in footnote 334: "We are not, by implication, precluding the possibility that 
a Member could violate its WTO obligations by enacting legislation granting discretion to its authorities to act in violation of its WTO obligation." (See Appellate Body Report, US – Countervailing Measures on Certain EC 
Products , footnote 334.)  WT/DS345/R 
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  7.212  In reviewing each of India's claims as such , we will consider each of the instruments 
comprising the Amended CBD on its face.  The Ap pellate Body has pronounced on the burden of 
proof and relevant evidence to sustain an as such  claim with respect to legislation: 
"A responding Member's law will be tr eated as WTO-consistent until proven 
otherwise. The party asserting that another party's municipal law, as such , is 
inconsistent with relevant treaty obligati ons bears the burden of introducing evidence 
as to the scope and meaning of such law to substantiate that assertion. Such evidence 
will typically be produced in the form of th e text of the relevant legislation or legal 
instruments, which may be supported, as appr opriate, by evidence of the consistent 
application of such laws, the pronouncemen ts of domestic courts on the meaning of 
such laws, the opinions of legal experts a nd the writings of recognized scholars. The 
nature and extent of the evidence required to satisfy the burden of proof will vary 
from case to case."230 
7.213  The Appellate Body has also emphasized that the following: 
"When a measure is challenged ' as such ', the starting point for an analysis must be the 
measure on its face. If the meaning and cont ent of the measure are clear on its face, 
then the consistency of the measure as such  can be assessed on that basis alone. If, 
however, the meaning or content of the measure is not evident on its face, further examination is required …"
231 
7.214  Accordingly, this Panel will apply the "mandatory /discretionary" distinction as an analytical 
tool where necessary to evaluate India's as such  claims.  We are, however , cognizant of the need to 
avoid applying it mechanistically.   
4. Application of the "mandatory/discretio nary" distinction in this dispute 
7.215  Due to our import of the "mandatory/discreti onary" distinction for the purpose of evaluating 
each of India's as such  claims, we will analyse whether the measure is on its face mandatory or 
discretionary.  The Panel will thus analyse each of  the instruments that comprise the Amended CBD 
on its face.   
7.216  We first consider the July 2004 Amendment.  The July 2004 Amendment provides that "Port 
Directors will be required to review  continuous bonds for importers who import 
agriculture/aquaculture merchandise subject to anti-dumping and countervailing duty cases and obtain 
larger bonds where necessary ".232  The July 2004 Amendment further provides that Port Directors 
will be required to review continuous bonds fo r cases where USDOC has issued a preliminary 
affirmative determination in an agriculture/aquaculture  case, or in the case of new shippers with no 
prior history of agriculture/aquaculture imports.  Finally, we note that the July 2004 Amendment provides that "if [United States Customs] determin es any comparable risk with other commodities, a 
similar review of bond co verage will be performed".
233  
7.217  Similar to the July 2004 Amendment, the August 2005 Clarification authorizes US Customs 
to designate a "covered case" of "special cate gory" merchandise and apply the EBR to importers 
                                                      
230 Appellate Body Report, US – Carbon Steel , para. 157 (footnote omitted); Appellate Body Report, 
Dominican Republic – Import and Sale of Cigarettes , para. 111 and Appellate Body Report, US – Gambling , 
para. 138. 
231 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 168; Appellate Body 
Report, Dominican Republic – Import and Sale of Cigarettes , para. 112. 
232 See Exhibit IND-3, p. 1 (emphasis added). 
233 Exhibit IND-3, p. 2.. WT/DS345/R 
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  whether subject to an anti-dumping duty order or an  affirmative preliminary determination, and for 
new importers with no prior histor y of importers of the subject merchandise.  The 2005 Clarification 
reiterates that "[s]pecial categories can be designa ted where additional bond requirements in the form 
of greater continuous entr y bonds or other security may be required ".
234  Unlike the July 2004 
Amendment, however, the Clarification provides that "[US Customs] may adjust  the rates used in the 
formulas set forth above to calculate different bond amounts as circumstances warrant and to address 
risks experiences with cases where the [USDOC] deposit rate is 0 percent".235   
7.218  We next consider the October 2006 Notice.  The United States describes the October 2006 
Notice as constituting the "comprehensive and ex clusive statement of the policy and processes 
expressed in the July 2004 Amendment to the B ond Guidelines, the Bond Formulas posted on CBP's 
Web site, and the August 2005 Clarification".236  Similar to the August 2005 Clarification, the 
October 2006 provides that "[US Customs] will only designate Special Categories, that is, 
merchandise for which an enhanced bond amount may be required "237, and, "Special Categories may 
be designated  when additional requirements in the form of  greater continuous entry bonds or other 
security may be required ."238  However, the 2006 Notice provides that "[US Customs] may decide not 
to require an increased bond amount even though the principal imports Special Category 
merchandise".239  The October 2006 Notice also refers to a process that permits importers to attain 
individualized determinations for EBR amounts.  Ac cording to the October 2006 Notice, "[i]mporters 
will be offered the opportunity to submit information on their financial condition related to the risk of 
non-collection for that importer and [United Stat es Customs] will determine bond amounts based on 
that information, the importer's compliance histor y, and other relevant in formation available..."240  
Without an importer's submission, th e Notice indicates: "[US Customs] may calculate  the bond 
amount using the formulas determined on the basis of the risk of non-collection".241  The 2006 Notice 
concludes with the statement: "Congress has provided [US Customs] authority to require security in 
order to ensure the payment of all duties de termined to be due to the United States..."242   
7.219  The document titled "Current Bond Formulas" contai ns illustrations of the application of the 
formulas provided in the Amended CBD.  We do not find it necessary to consider this document for 
purposes of determining whether the measure at issue is mandatory or discretionary. 
7.220  Based on a review of the text of each of these instruments, we preliminarily conclude that the 
provisions are not binding on Port Directors, or US Customs more broadly.  In other words, the Amended CBD on its face does not appear to require  US Customs to designate a particular "covered 
case" or "special category" of merchandise in or der to further impose the EBR to the subject 
merchandise.  In particular, the October 2006 Notice, which represents the United States' most recent 
publication describing the Amended CBD, indicates that Congress has provided US Customs with the 
authority to impose enhanced continuous bond amount s.  We interpret the language of the October 
2006 Notice to reflect an important and inherent  limitation on the scope of the Amended CBD.  
Namely, the Amended CBD instructs US Customs that it may impose the EBR of "covered cases" of 
"special category" merchandise, and even provides specific instructions for applying the standard 
formula or making individualized determinations fo r particular importers.  However, the instruments 
that comprise the Amended CBD (the July 2004 Amendment, August 2005 Clar ification, and October 
                                                     
 
234 Exhibit IND-4, p. 2 (emphasis added). 
235 Exhibit IND-4, p. 4. 
236 Exhibit IND-6, p. 62,277. 
237 Exhibit IND-6, p. 62,277 (emphasis added). 
238 Exhibit IND-6, p. 62,277 (emphasis added). 
239 Exhibit IND-6, p. 62,278. 
240 Exhibit IND-6, p. 62,277. 
241 Exhibit IND-6, p. 62,278 (emphasis added). 
242 Exhibit IND-6, p. 62,277.  WT/DS345/R 
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  2006 Notice) do not require that US Customs desi gnate "covered cases" or "special category" 
merchandise subject to an anti-dumping order prior to applying the EBR.  It is in this sense that the August 2005 Clarification provides that "Special Categories of merchandise can be designated where 
additional bond requirements in the form of greater continuous entry bonds or  other security may be 
required".
243  The October 2006 Notice uses identical language.244  Rather, the August 2005 
Clarification and October 2006 Notice only provide criteria that may be considered to identify 
"special categories" or "covered cases", such as pr evious collection problems of a specific industry, 
the capitalization level of the industry, the proj ected ability of the industry to pay future duty 
liabilities, whether the industry is highly leveraged,  the history of revenue collection problems of the 
industry, whether the industry has low duty rates or was duty free previously, and other factors.245 
7.221  We supplement our analysis with an evaluati on of the application of the Amended CBD to 
date.  Primarily, we observe that US Customs ha s as of yet only designate d one "covered case", and 
thus has only applied the EBR to subject shrimp impor ters.  This has occurred in practice, despite the 
fact, as the United States revealed, that US Cust oms has imposed an anti-dumping order on at least 
one other product in the agriculture/aquaculture cat egory of merchandise, certain orange juice from 
Brazil, since publication of the Amended CBD.  Pote ntially, US Customs' decision not to apply the 
EBR to importers of certain orange juice from Brazil could relate to the inherent characteristics of the industry as assessed by US Customs, such as pr evious collection problems in the industry, the 
capitalization level of the industry, the projected ab ility of the industry to pay future duty liabilities, 
whether the industry is highly leveraged, and so fo rth.  In addition, outstanding anti-dumping orders 
are in place on other categories of agriculture/aquacu lture merchandise, such as crawfish and honey, 
yet importers of these products are not subject to th e EBR.  These realities, in our view, indicate that 
the Amended CBD does not require US Customs to  impose the EBR on importers, which would, as 
India argues, mandate WTO-inconsistent behaviour.  In particular, this is telling in the case of 
outstanding orders on products such as crawfish, where risks of margins increases and default have 
been alleged, thus suggesting enhanced continuous bond amounts w ould also be "necessary" within 
the meaning of the Amended CBD.  Instead th e Amended CBD functions as a guideline to US 
Customs officials.  Indeed the instruments that comprise the Amended CBD define themselves as 
"guidelines" in their titles. 
7.222  We further note the decision by the USCIT from 13 November 2006 regarding several 
importers' request for a preliminary injunction against the EBR.  The USCIT found US Customs 
appeared to have discretion  under US law to consider potential anti-dumping or countervailing duty in 
setting continuous bond amounts.
246 
7.223  We will also address India's position that the Amended CBD is as such  inconsistent because 
the Amended CBD allows for impermissible speci fic action against dumping or subsidisation by 
imposing the EBR in every case in which the United States concludes that there is a likelihood of 
increase in dumping margins or the amount of subsidy found to exist between the final determination 
and the final assessment in an administrative review.  India considers this approach to be consistent 
with that taken by the panel and upheld by the Appellate Body in Mexico – Anti-Dumping Measures 
on Rice247.  In that case, the United States argued that a Mexican anti-dumping provision allowing for 
the imposition of a fine for importers which ente r products subject to anti-dumping or countervailing 
duty investigations while such investigations ar e underway was an impermissible specific action 
against dumping.  Mexico argued that this pr ovision was WTO consistent because it was not 
                                                      
243 See Exhibit IND-4, p. 2. 
244 See Exhibit IND-6, p. 62,277. 
245 See Exhibit IND-4, pp. 2-3; Exhibit IND-6, p. 62,277. 
246 See Exhibit IND-16, p. 42. 
247 See Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 330; Panel Report, 
Mexico – Anti-Dumping Measures on Rice , paras. 7.278-7.279. WT/DS345/R 
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  mandatory.  The Panel concluded that "...by thr eatening to impose fines on anyone importing the 
product subject to an anti-dumping investigation, [t he provision] of the Act clearly provides for a 
specific action against dumping or subsidi zation which is not provided for in the [ Anti-Dumping 
Agreement ] or SCM Agreement "
248.  With respect to Mexico's argument that the provision was 
discretionary and thus, not WTO-in consistent, the Panel provided:  
"When a law like the Act provides that it 'shall be the responsibility of the Ministry to 
punish the following infringements',249 it does more than just dividing competences 
among the government, but rather stipulates that fines are to be imposed in case the conditions of [the provision] of the Act are met and that it is up to the Ministry of 
Economy responsible also for the conduc t of anti-dumping and countervailing duty 
investigations to impose such fines."
250   
7.224  Mexico subsequently argued before the Appella te Body that the Panel erred in failing to 
recognize that the challenged provisions of the FT A are "discretionary" measures that permit the 
investigating authority to apply them in a WTO-consistent manner.251  The Appellate Body rejected 
this argument and found that Mexico improperly failed to bring its claim under Article 11 of the 
DSU .252 
7.225  We cannot conclude that India's position concerning the findings in Mexico – Anti-Dumping 
Measures on Rice  is relevant to the dispute before us.  In that case, the Panel found and the Appellate 
Body agreed that the measure at  issue was an impermissible specific action against dumping and 
subsidization and was therefore, as such  inconsistent with Article 18.1 of the Anti-Dumping 
Agreement  and Article 32.1 of the SCM Agreement  because it "stipulated" that the ministry 
responsible for anti-dumping and countervailing du ty investigations impose fines in cases where 
conditions of the measure were met.  However, in our case, we do not find that  in every occasion that 
the United States imposes the EBR on importers of  a category of merchandise subject to an anti-
dumping order its imposition constitutes an imperm issible specific action against dumping or 
subsidisation.   
7.226  In our findings presented in Section VII.B.2(b)( iii) above, we determined that the application 
of the EBR to subject shrimp from India was unreasonable.  However, despite the fact that the application of the EBR to subject shrimp constitute d an impermissible specific action against dumping 
in violation of Article 18.1 of the Anti-Dumping Agreement , we explained in Section VII.B.2(b)(iii)  
above that the Ad Note authorises the imposition of security requirements during the period following imposition of a US anti-dumping (or countervailing) duty order so long as the security is reasonable.    
Thus it would be possible for the United States to  apply reasonable security to protect against 
increases in future anti-dumping duty rates as long as an appropriate basis existed to determine that 
rates of dumping provided for in the anti-dumping order were likely to increase following a final 
determination in the original investigation.  Based  on these findings, we are unable to conclude that a 
violation will occur for every  application of the EBR to impo rters of a designated category of 
merchandise.  In contrast, the measure in Mexico – Anti-Dumping Measures on Rice  was determined 
to be an impermissible specific action against dumping which was not permitted under any provision 
of the GATT 1994 , the Anti-Dumping Agreement  or the SCM Agreement . 
7.227  We therefore find that the Amended CBD on its face allows US Customs to exercise 
discretion to designate "covered cases" and "special category" merchandise in order to impose the 
                                                     
 
248 Panel Report, Mexico – Anti-Dumping Measures on Rice , para. 7.278. 
249 (footnote original omitted ). 
250 Panel Report, Mexico – Anti-Dumping Measures on Rice , para. 7.279. 
251 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 271. 
252 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , paras. 272-274.  WT/DS345/R 
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  EBR, and is thus not mandatory in nature.  Moreover,  contrary to India's stance, each application of 
the EBR via the Amended CBD may not constitute an impermissible specific action against dumping 
in violation of the GATT 1994  and the Anti-Dumping Agreement  or a specific action against 
subsidisation in violation of the GATT 1994  and the SCM Agreement .  
5. Whether the Amended CBD is inconsistent as such with Articles 1 and 18.1 of the 
Anti-Dumping Agreement , Articles 10 and 32.1 of the SCM Agreement , and the Ad Note  
7.228  The Panel notes that India originally made separate as such  claims with respect to Articles 1 
and 18.1 of the Anti-Dumping Agreement , on the one hand and the Ad Note, on the other hand.  For 
purposes of our analysis, we are considering these cl aims together.  Additionally, in the context of 
India's as such  claims under the SCM Agreement , India originally made separate as such  claims with 
respect to Articles 10 and 32.1 of the SCM Agreement  and the Ad Note.  We will also consider these 
claims together.   
(a) Main arguments of India 
7.229  We note that India's arguments related to its as such  claims under Articles 1 and 18.1 of the 
Anti-Dumping Agreement , Articles 10 and 32.1 of the SCM Agreement , and the Ad Note are 
substantially the same as  those made in relation to its as applied  claims under those provisions.  India 
claims that the Amended CBD provides for specific action against dumping and subsidisation that is 
inconsistent as such  with Articles 1 and 18.1 of the Anti-Dumping Agreement  and Articles 10 and 
32.1 of the SCM Agreement , and is not in accordance with the prov isions of the Ad Note.  According 
to India, the Amended CBD is a "specific action" with respect to dumping and subsidisation because an inextricable link exists between the measure and the constituent elements of dumping or of 
subsidisation as evidenced by the text of the direc tive.  India also submits that the Amended CBD has 
a serious, adverse impact on importers due to in creased bond amounts and surety requirements and, 
therefore, is "against" dumping or subsidisation.  India contends that the Amended CBD is not a 
permissible response to dumping or subsidisation in  accord with any provision Article VI of the 
GATT 1994  (including the Ad Note) as interpreted by the Anti-Dumping Agreement  or SCM 
Agreement .  India submits that the measure does not invol ve a price undertaking by exporters, is not a 
provisional measure within the meaning of Articles 7 of the Anti-Dumping Agreement  and Articles 17 
of the SCM Agreement , and is not within the meaning of the Ad  Note.  India also submits that it does 
not satisfy the restrictions imposed by Article 9 of the Anti-Dumping Agreement  or Article 19 of the 
SCM Agreement  governing the collection of definitive anti- dumping or countervailing duties.  Finally, 
India claims that the Amended CBD cannot be justified under either footnote 24 of the Anti-Dumping 
Agreement  or footnote 56 of the SCM Agreement  because the Amended CBD is  not merely related to 
dumping or subsidisation but is specific acti on against dumping or subsidisation governed by 
Article VI of the GATT 1994 . 
7.230  Assuming arguendo  that the Amended CBD is permitted under the Ad Note, India contends 
that application of the EBR to any case of s ubject merchandise could not constitute reasonable 
security within the meaning of the Ad Note.  India considers the requirement for security at a rate of 
100 per cent of the duties owed on the previous 12 mont hs' imports at the rate set in the relevant anti-
dumping or countervailing duty order is overly burdensome. 
(b) Main arguments of the United States 
7.231  The United States rejects India's claims that the Amended CBD as such  constitutes 
impermissible specific action against dumping and subs idisation that is inconsistent with Articles 1 
and 18.1 of the Anti-Dumping Agreement  and Articles 10 and 32.1 of the SCM Agreement .  According 
to the United States, the Amended CBD as such c annot constitute specific action against dumping 
because it does not require importers to comply with  the EBR.  Moreover, the United States submits WT/DS345/R 
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  that US Customs retains discretion as to whether to im pose the EBR at all, either to an entire category 
of merchandise or on an individual importers/princip al basis.  According to the United States, the 
Amended CBD addresses non-collection problems rela ted to anti-dumping duties and is thus only 
related to dumping or subsidisation in the sense that unsecured liability is anti-dumping or 
countervailing duty liability.  The United States points to the text and design of the Amended CBD in 
arguing that the constituent elements of dumping or s ubsidisation are not built into the directive.  The 
United States submits that the Amended CBD is not "against" dumping or subsidisation because evidence does not support the conclusion that the Am ended CBD adversely aff ected subject imports 
or dissuaded dumping.   
7.232  The United States also argues that bond amount s required under the Am ended CBD constitute 
reasonable security during the period following a fi nal determination but prior to a final assessment 
review in a dumping or subsidisation investigation,  under the Ad Note and therefore, the Amended 
CBD is in accordance with the provisions of GATT 1994 .  The US argues that the "final determination 
of the facts" in the text of the Ad Note refers to  the determination of the facts with respect to the 
payment of anti-dumping or countervailing duty whic h occurs in a retrosp ective assessment system 
following an assessment review.  In a retrosp ective system, the US argues that dumping or 
subsidisation is suspected until completion of an assessment review. 
(c) Evaluation by the Panel 
7.233  The provisions of Article 1 and 18.1 of the Anti-Dumping Agreement  appear in 
paragraphs 7.26-7.27 above. 
7.234  We note that the provisions in Articles 10 and 32.1 of the SCM Agreement  governing 
countervailing duty investigations are substantively similar to those in Articles 1 and 18.1 of the 
Anti Dumping Agreement .  Article 10 of the SCM Agreement reads:  
"Application of Article VI of GATT 1994
253 
 
Members shall take all necessary steps to ensure that the imposition of a 
countervailing duty254 on any product of the territory of any Member imported into 
the territory of another Member is in acco rdance with the provisions of Article VI of 
the GATT 1994  and the terms of this Agreement.  Countervailing duties may only be 
imposed pursuant to investigations initiated255  and conducted in accordance with the 
provisions of this Agreement a nd the Agreement on Agriculture." 
                                                      
253 (footnote original ) The provisions of Part II or III may be invoked in parallel with the provisions of 
Part V;  however, with regard to the effects of a pa rticular subsidy in the domestic market of the importing 
Member, only one form of relief (either a countervailing dut y, if the requirements of Part V are met, or a 
countermeasure under Articles 4 or 7) shall be available. The provisions of Parts III and V shall not be invoked regarding measures considered non-actionable in acco rdance with the provisions of Part IV.  However, 
measures referred to in paragraph 1(a) of Article 8 may be  investigated in order to determine whether or not they 
are specific within the meaning of Article  2.  In addition, in the case of a subsidy referred to in paragraph 2 of 
Article 8 conferred pursuant to a programme which has not been notified in accordan ce with paragraph 3 of 
Article 8, the provisions of Part III or V may be invoked,  but such subsidy shall be treated as non-actionable if it 
is found to conform to the standards set forth in paragraph 2 of Article 8. 
254 (footnote original ) The term "countervailing duty" shall be understood to mean a special duty levied 
for the purpose of offsetting any subsidy bestowed direct ly or indirectly upon the manufacture, production or 
export of any merchandise, as provided for in paragraph 3 of Article VI of GATT 1994 . 
255 (footnote original ) The term "initiated" as used hereinafter means procedural action by which a  
Member formally commences an investigation as provided in Article 11.  WT/DS345/R 
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  7.235  Article 32.1 of the SCM Agreement reads: "No specific action against a subsidy of another 
Member can be taken except in accordance with the provisions of the GATT 1994 , as interpreted by 
this Agreement."256 
7.236  We recall in Section VII.C.4 above that we  concluded that the Amended CBD is not a 
mandatory measure, in the sense that the Unite d States has discretion to impose the EBR on 
designated categories of designated merchandise su bject to an anti-dumping or countervailing duty 
order.  More importantly, however, we recall our finding that the EBR does not constitute an impermissible specific action against dumping or subsidisation in every  occasion that it is imposed on 
importers of a "covered case" or "special categor y" merchandise subject to an anti-dumping or 
countervailing duty order.  We based this fi nding on our earlier determination in Section 
VII.B.2(b)(iii) above related to India's as applied  claims under Articles 1 and 18.1 of the Anti-
Dumping Agreement  that the Ad Note permits a WTO Member to require reasonable security in the 
period between a final determination in the original investigation until the final assessment review in a 
retrospective duty assessment system.  In light of this finding, we do not agree with India's position 
that the Amended CBD as such  necessarily constitutes an impermissible specific action against 
dumping in every case to which it is applied.  For th e foregoing reasons, we acco rdingly conclude that 
the Amended CBD as such  does not violate Article 18.1 of the Anti-Dumping Agreement  or the 
Ad Note .   
7.237  We note that India has also made an as such  claim under Article 1 of the Anti-Dumping 
Agreement .  That claim is necessarily dependent on India's Article 18.1 claim.  Since we have found 
that the Amended CBD as such  is not inconsistent with Article 18.1 of the Anti-Dumping Agreement , 
we likewise find that it does not as such  violate Article 1 of the Anti-Dumping Agreement . 
7.238  Based on our reasoning that the Amended CBD doe s not constitute an impermissible specific 
action against dumping in every case to which it is ap plied, we also conclude that the Amended CBD 
as such  does not constitute an impermissible specific ac tion against subsidisation, and thus does not 
violate Article 32.1 of the SCM Agreement as such .  Due to the consistency of the Amended CBD 
with Article 32.1 of the SCM Agreement , we also find that the Amended CBD as such  does not 
violate Article 10 of the SCM Agreement.  
6. Articles 7.1(iii), 7.2, and 7.4 of the Anti-Dumping Agreement  and Articles 17.1(c). 17.2 
and 17.4 of the SCM Agreement  
(a) Main arguments of India 
7.239  India argues that the Amended CBD as such  violates Articles 7.1(iii), 7.2, and 7.4 of the Anti-
Dumping Agreement  and Articles 17.1(c), 17.2 and 17.4 of the SCM Agreement.  These arguments are 
similar to those made in relation to India's claim that the EBR as applied
 to subject shrimp importers 
violates Article 7 of the Anti-Dumping Agreement , which are presented in Section VII.B.3 above.  
India explains that it considers it necessary to evaluate the consistency as such  of the Amended CBD 
also with the provisions of Article 7 of the Anti-Dumping Agreement  and of Article 17 of the SCM 
Agreement  based on the following premise:  the Amended CBD does not make provision for the 
termination of the EBR after the issuance of an  anti-dumping or countervailing duty order and thus 
provides for the imposition of the EBR as a provision al measure to importers of covered merchandise 
after a preliminary affirmative determination in an in vestigation but prior to the issuing of an order in 
                                                      
256 (footnote original ) This paragraph is not intended to preclude action under other relevant provisions 
of the GATT 1994 , where appropriate. WT/DS345/R 
Page 78  
 
  an anti-dumping or countervailing duty case.
257  According to India, the application of the EBR 
following issuance of an order violates the expr ess limitations governing provi sional measures and is 
thus as such  inconsistent with Article 7 of the Anti-Dumping Agreement  and Article 17 of the SCM 
Agreement.  
7.240  Based on its argument that the Amended CBD provides for the imposition of a provisional 
measure, India also claims that the Amended CBD as such  violates Articles 7.1(iii) of the Anti-
Dumping Agreement and Article 17.1(c) of the SCM Agreement  because it is not designed as a 
measure necessary to prevent injury being caused during an investigation.258  India asserts that, under 
Article 7.1(iii) of the Anti-Dumping Agreement and Article 17.1(c) of the SCM Agreement , it is 
necessary that "the authorities concerned judge su ch measures necessary to prevent injury being 
caused during the investigation".  However, according to India, the stated reasons for introducing the 
EBR do not mention injury being caused during the i nvestigation at all and focus rather on protecting 
revenue against any failure on the part of importers  to pay the duties finally assessed and ensuring that 
payments are made to domestic industry pursuant to th e CDSOA that was held to be inconsistent with 
the obligations of the United States in US – Offset Act (Byrd Amendment) .  India therefore submits 
that, if the EBR is a provisional measure, it is inconsistent as such  with Article 7.1(iii) of the Anti-
Dumping Agreement  and Article 17.1(c) of the SCM Agreement . 
7.241  India asserts that the Amended CBD as such  is also inconsistent with Article 7.2 of the Anti-
Dumping Agreement  and with Article 17.2 of the SCM Agreement , since provisional measures, 
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.  India argues th at the requirement to provide cash deposits in 
addition to the EBR clearly exceeds the provi sionally estimated margin of dumping. 
7.242  Finally, India argues that the Amended CBD as such  is inconsistent under Article 7.4 of the 
Anti-Dumping Agreement  and Article 17.4 of the SCM Agreement  to the extent that the EBR is 
introduced or remains in place on any date after six months have elapsed in the case of an anti-
dumping case or after four months have elapse d in the case of a countervailing duty case from the 
date on which provisional measures are first impos ed.  If security required under the Amended CBD 
would not be released until liquidation at least one year following imposition of an anti-dumping 
order, then any application of the EBR prior to a final determination of dumping in an original 
investigation would fail to satisfy the limitations imposed by Article 7.4 of the Anti-Dumping 
Agreement  and Article 17.4 of the SCM Agreement . 
7.243  India thus submits that the Amended CBD as such  is inconsistent with Article 7 of the Anti-
Dumping Agreement  and with Article 17 of the SCM Agreement . 
(b) Main arguments of the United States 
7.244  As with India's as applied  claims related to Article 7 of the Anti-Dumping Agreement, the 
United States submits that Article 7 of the Anti-Dumping Agreement  and Article 17 of the 
SCM Agreement does not apply to the EBR.  The United Stat es argues that India appears to conflate 
the requirement of reasonable security contained in the Ad Note with Article 7 of the Anti-Dumping 
Agreement  and Article 17 of the SCM Agreement  regarding provisional measures ( i.e., measures taken 
                                                      
257 Thus, the Notice states that the Enhanced Bond  Requirement may be imposed on importers where 
US Customs "… detects sudden changes in declared values , claimed country of origin or declared classification, 
etc. …" 
258 India's first written submission, para. 86.  WT/DS345/R 
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  prior to a final determination of dumping or subsidization).259  The United States asserts that the bond 
directive, however, is a security requirement imposed after the final determination of dumping or 
subsidization, pending "determinati on of the final liability for payment of anti-dumping duties," and is 
therefore not a "provisional measure" within the meaning of Article 7 of the Anti-Dumping Agreement  
or Article 17 of the SCM Agreement . 
7.245  With respect to India's argument that the Am ended CBD applies in the period prior to the 
issuance of the order and therefore constitu tes a "provisional measure" inconsistent, as such  with 
Article 7 of the Anti-Dumping Agreement and Article 17 of the SCM Agreement ,260 the United States 
asserts that the October 2006 Notice makes clear that the directive no longer covers additional bond 
amounts requested prior to issuance of an order.261 
(c) Evaluation by the Panel 
7.246  We first note the relevant provisions as discussed by India in its claims under Article 7 of the 
Anti-Dumping Agreement  and Article 17 of the SCM Agreement . 
7.247  The text of the relevant provisions under Article 7 of the Anti-Dumping Agreement  appears in 
Section VII.B.3 above. 
7.248  In addition, Article 17.1(c) of the SCM Agreement  provides: 
"Provisional measures may be applied only if:  (c) the authorities concerned judge such measures necessary to prevent injury being 
caused during the investigation." 
7.249  Article 17.2 of the SCM Agreement  provides: 
"Provisional measures may take the form of provisional countervailing duties 
guaranteed by cash deposits or bonds e qual to the amount of the provisionally 
calculated amount of subsidization." 
7.250  Article 17.4 of the SCM Agreement  provides:  
"The application of provisional measures sh all be limited to as short a period as 
possible, not exceeding four months." 
7.251  The Panel will begin its analysis by considering the text of the Amended CBD.  We note that 
the United States' most recent instrument on r ecord discussing the Amended CBD is the October 2006 
Notice.  This Notice does not explicitly address th e question of whether or not the EBR could be 
applied before the imposition of an anti-dumping or countervailing duty order.  Nevertheless, we 
consider that certain parts of the Notice clearly indicate that the EBR could not be applied as a provisional measure.  For instance, the 2006 Notice provides that the "amount of additional [bond] 
coverage" will be calculated using a formula inco rporating the "AD/CVD rate established in DOC 
Order (or the rate established in the most recently completed administrative review)."
262  To the extent 
that the October 2006 Notice provides that the formul a for calculating the amount of the EBR refers to 
                                                      
259 India's first written submission, para. 92 (asserting that "[i]t is clear that the 'reasonable security 
(bond or cash deposit)' referred to in th e Ad Note is the same as the provisiona l measures referred to in Article 7 
of the Anti-Dumping Agreement ."). 
260 India's first written submission, para. 85. 
261 Exhibit IND-6, p. 62,277 (cf. Exhibit IND-3, pp. 2-3). 
262 Exhibit IND-6, p. 62,277. WT/DS345/R 
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  the rate of dumping set forth in the anti-dumping or countervailing duty order (or most recent 
assessment review), the October 2006 Notice does not on its face permit the imposition of the EBR prior to the completion of a final determination in  the US retrospective duty assessment system, which 
precedes publication of an anti-dumping or countervailing duty order.  For this reason, in our view, 
the language of the October 2006 Notice does not provi de for the imposition of provisional measures.  
Provisional duties would only apply prior to the completion of the original anti-dumping or 
countervailing duty investigation.  Therefore, Article 7 of the Anti-dumping Agreement  or Article 17 
of the SCM Agreement  are not applicable to the Amended CBD.   
7.252  To complete our analysis for India's claims under Article 7 of the Anti-Dumping Agreement  
and Article 17 of the SCM Agreement , we also consider the July 2004 Amendment, August 2005 
Clarification, and the Current Bond Formulas doc ument.  Unlike the October 2006 Notice, we note 
that each of these documents presents a formula to cal culate an EBR amount with respect to importers 
of "special category" or "covered case" merc handise subject to a preliminary affirmative 
determination of dumping or subsidisation.  Th e inclusion of this formula in the July 2004 
Amendment, August 2005 Clarification, and the Current Bond Formulas document suggests that the 
Amended CBD did or still does govern applications prior to a final affirm ative determination of 
dumping or subsidisation.  In our view, however , we consider the October 2006 Notice to have 
amended the measure at issue.  We noted in th e preceding paragraph that the October 2006 Notice 
does not explicitly address the question of whether or not the EBR could be applied before the 
imposition of an anti-dumping or countervailing dut y order.  Specifically, the October 2006 Notice 
does not include a formula to calculate an EBR amount with respect to importers of "special category" 
or "covered case" merchandise subject to a prelim inary affirmative determination of dumping or 
subsidisation.  We consider this to be an intentional omission in light of language elsewhere in the 
Notice (i.e., that the "amount of additional [bond ] coverage" will be calcu lated using a formula 
incorporating the "AD/CVD rate es tablished in DOC Order (or the rate established in the most 
recently completed administrative review)").  Due to the absence of such a formula in the October 
2006 Notice, and in light of our view that the Oc tober 2006 Notice serves to amend the measure at 
issue with respect to the EBR's application prior to the imposition of an anti-dumping or 
countervailing duty order, we  conclude that the Amended CBD does not provide for the application of 
the EBR as a provisional measure.  Our conclusion also accords with the Unit ed States' position that 
the Amended CBD no longer covers additional bond amounts requested prior to issuance of an order. 
7.253  We therefore conclude that the Amended CBD as such  is not inconsistent with 
Articles 7.1(iii), 7.2 and 7.4 of the Anti-Dumping Agreement  or Articles 17.1(c), 17.2 and 17.4 of the 
SCM Agreement . 
7. Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement , Articles 19.2, 19.3 and 
19.4 of the SCM Agreement , and Article VI:3 of the GATT 1994  
(a) Main arguments of India 
7.254  We note that India has presented identical arguments for its as such
 claims under Articles 9.1, 
9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement  and Articles 19.2, 19.3 and 19.4 of the SCM 
Agreement , as for its as applied  claims under Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping 
Agreement .  These arguments are presented in Section VII.B.4 above. 
(b) Main arguments of the United States 
7.255  The United States arguments in relation to I ndia's applied claims under Article 9 of the Anti-
Dumping Agreement  presented in Section VII.B.4 above, also  remain relevant for India's claims under 
Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement  and Articles 19.2, 19.3, and 19.4 of 
the SCM Agreement .  WT/DS345/R 
 Page 81 
 
 
  (c) Evaluation by the Panel 
7.256  We first note the relevant provisions as discussed by India in its claims under Article 9 of the 
Anti-Dumping Agreement , Article 19 of the SCM Agreement  and Article VI:3 of the GATT 1994.  
7.257  The text of the relevant provisions under Article 9 of the Anti-Dumping Agreement  and 
Article VI:2 of the GATT 1994 appear in Section VII.B.4 above. 
7.258  In addition, Article 19.2 of the SCM Agreement  provides: 
"The decision whether or not to impose a countervailing duty in cases where all 
requirements for the imposition have been fulfilled, and the decision whether the amount of the countervailing duty to be im posed shall be the full amount of the 
subsidy or less, are decisions to be made by the authorities of the importing Member.   
It is desirable that the imposition should be pe rmissive in the territory of all Members, 
that the duty should be less than the total amount of the subsidy if such lesser duty would be adequate to remove the injury to  the domestic industry, and that procedures 
should be established which would allow the authorities concerned to take due 
account of representations made by domestic  interested parties(footnote omitted) 
whose interests might be adversely affected by the imposition of a countervailing 
duty." 
7.259  Finally, Article 19.3 of the SCM Agreement  provides: 
"When a countervailing duty is imposed in respect of any product, such 
countervailing duty shall be levied, in the appropriate amounts in each case, on a 
non‑discriminatory basis on imports of such product from all sources found to be 
subsidized and causing injury, except as to  imports from those sources which have 
renounced any subsidies in question or fro m which undertakings under the terms of 
this Agreement have been accepted.   A ny exporter whose exports are subject to a 
definitive countervailing duty but who was not  actually investigated for reasons other 
than a refusal to  cooperate, shall be entitled to an expedited review in order that the 
investigating authorities promptly establish an individual countervailing duty rate for 
that exporter." 
7.260  Article 19.4 of the SCM Agreement  provides:  
"No countervailing duty shall be levied
263 on any imported product in excess of the 
amount of the subsidy found to exist, calcula ted in terms of subs idization per unit of 
the subsidized and exported product." 
7.261  Article VI:3 of the GATT 1994 provides the following: 
"No countervailing duty shall be levied on  any product of the territory of any 
contracting party imported into the territory  of another contracting party in excess of 
an amount equal to the estimated bounty or s ubsidy determined to have been granted, 
directly or indirectly, on the manufacture, production or export of such product in the country of origin or exportation, including any special subsidy to the transportation of a particular product. The term "counterva iling duty" shall be understood to mean a 
special duty levied for the purpose of offsetting any bounty or subsidy bestowed, 
                                                     
 
263 (footnote original ) As used in this Agreement "levy" shall mean the definitive or final legal 
assessment or collection of a duty or tax. WT/DS345/R 
Page 82  
 
  directly, or indirectly, upon the manufacture, production or export of any 
merchandise." 
7.262  We refer to our findings in section VII.B.4 above in relation to India's as applied  claim under  
Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement .  We noted, as its title indicates, that 
Article 9 of the Anti-Dumping Agreement  is concerned with the "imposition and collection of anti-
dumping duties " (emphasis added).  Consistent with this title, we also observed that the disciplines set 
forth in Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement  concern the imposition and 
collection of anti-dumping duties .  For that reason, we concluded that measures other than anti-
dumping duties fall outside the scope of those provisions .  Accordingly, we turned to the context of 
our review of India's claim under Article 18.1 of the Anti-Dumping Agreement , and directly 
considered India's argument
264 that the term "duty" is defined in the tax context as "the payment to the 
public revenue levied on the import, export, manufacture or sale of goods …".265  We found that 
India's definition of the term "duty" was not broad enough to encompass the enhanced bond requirements imposed in respect of subject shrimp because bonds do not yield public revenue and have no intrinsic value in and of themselves.  We re called our findings that a bond is not a payment to 
yield public revenue at the time it is provided, but ra ther, is provided as a form of security.  Indeed, 
we recalled that India itself acknowledges that "bas ed on the ordinary meaning and the meaning in 
legal parlance of the terms "provisional duties" and "s ecurity", there is clearly a difference, as a matter 
of law, between collecting duties, provisionally or othe rwise, and the taking of security in the form of 
bonds or cash deposits."
266 
7.263  Therefore, for the same reasons  we concluded that the enhanced bond is not an anti-dumping 
duty, with the result that the application of the EBR falls outside the scope of Article 9 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994; we also conclude that India's as such  claims 
under Article 9 of the Anti-Dumping Agreement  and Article VI:2 fail. 
7.264  We note that the provisions in Articles 19.2, 19.3, and 19.4 of the SCM Agreement  governing 
countervailing duty investigations are substantively sim ilar to those in Articles 9.1, 9.2, 9.3 and 9.3.1 
of the Anti-Dumping Agreement .   Accordingly, based on our reas oning that the enhanced bond is not 
an anti-dumping duty, with the result that the application of the EBR falls outside the scope of Article 9 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 ; we also conclude that 
the enhanced bond is not a counter vailing duty, with the result that the application of the EBR falls 
outside the scope of Article 19 of the SCM Agreement  and Article VI:3 of the GATT 1994 . 
8. Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the SCM Agreement  and 
Article XVI of the WTO Agreement  
(a) Main arguments of India 
7.265  India  claims that the Amended CBD is inconsiste nt with obligations under Article XVI:4 of 
the WTO Agreement , Article 18.4 of the Anti-Dumping Agreement  and Article 32.5 of the SCM 
Agreement .  India considers that the Amended CBD a nd the identified US statutory and regulatory 
provisions authorize impermissible specific action ag ainst dumping, and also violates Articles 7 and 9 
of the Anti-Dumping Agreement , as well as Articles 17 and 19 of the SCM Agreement .  India 
recognizes that its claims under Article 18.4 of the Anti-Dumping Agreement and 32.5 of the SCM 
                                                     
 
264 See India's responses to Second Set of Questions, para. 29. 
265 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. I, p. 769. 
266 See India's responses to Second Set of Panel Questions, para. 33.  WT/DS345/R 
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  Agreement  are consequential to its claims that the cited provisions are inconsistent as such  with other 
provisions of the GATT 1994 , the Anti-Dumping Agreement , or the SCM Agreement .267 
(b) Main arguments of the United States  
7.266  Due to the continuing relevance of the "manda tory/discretionary" distinction, the United 
States argues that the Amended CBD and cited laws and regulations are not as such  inconsistent with 
any separate obligations of the covered WTO Agreement s, and are therefore consistent with 
Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the SCM Agreement , and Article XVI:4 
of the WTO Agreement .   
(c) Evaluation by the Panel 
7.267  We consider India's claims that the Amended CBD is inconsistent w ith obligations under 
Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the SCM Agreement , and Article XVI:4 
of the WTO Agreement .   
7.268  Article 18.4 of the Anti-Dumping Agreement  provides that: 
"Each Member shall take all necessary steps, of a general or particular character, to 
ensure, no later than the date of entry into force of the WTO Agreement  for it, the 
conformity of its laws, regulations and ad ministrative procedures with the provisions 
of this Agreement as they may apply to the Member in question." 
7.269  Similarly, Article 32.5 of the SCM Agreement  provides that: 
"Each Member shall take all necessary steps, of a general or particular character, to 
ensure, not later than the date of entry into force of the WTO Agreement  for it, the 
conformity of its laws, regulations and ad ministrative procedures with the provisions 
of this Agreement as they may apply to the Member in question." 
7.270  Article XVI:4 of the WTO Agreement  provides that:  
"Each Member shall ensure the conformity of its laws, regulations and administrative 
procedures with its obligations as pr ovided in the annexed Agreements." 
7.271  We do not make findings on the claims of Indi a that the Amended CBD violates Article 18.4 
of the Anti-Dumping Agreement , Article 32.5 of the SCM Agreement  and Article XVI of the WTO 
Agreement .  The Appellate Body has previously c onsidered it unnecessary to make findings with 
respect to claims under Article 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO 
Agreement  when a Panel finds that a complainant fails to establish that an as such  violation has 
occurred under any specific obligation of the covered agreements.268  In our opinion, the Appellate 
Body's rationale is equally applicable to India's claim under Article 32.5 of the SCM Agreement .  We 
therefore, also do not make any findings on the cl aims of India that the Amended CBD violates 
Article 32.5 of the SCM Agreement . 
9. Other as such  claims by India under the GATT 1994  
7.272   The Panel notes that India has made a number of additional as such claims under the 
GATT 1994 .  In particular, India has requested the Panel to find that the Amended CBD as such  is 
                                                      
267 India's second written submission, para. 58. 
268 See Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 210-211. WT/DS345/R 
Page 84  
 
  inconsistent with Articles I:1, II:1(a) and (b) of the GATT 1994 or, alternatively, with Article XI:1 of 
the GATT 1994 . 
7.273  The Panel recalls its view in Section VII.B.5 above  that, even if it were to find that the EBR 
as applied was not an impermissible specific action agains t dumping, it would not be appropriate to 
proceed and rule on India's additional GATT 1994 claims in light of its findings under Articles VI of 
the GATT 1994 and its Ad Note, and Articles 1 and 18.1 of the Anti-Dumping Agreement .  This view 
also stands as regards India's claims concerning the Amended CBD as such .  We have found that the 
Amended CBD as such  constitutes "specific action against dum ping or subsidisation" which is not 
inconsistent with Artic les 1 and 18.1 of the Anti-Dumping Agreement  and Articles 10 and 32.1 of the 
SCM Agreement .  In particular, we found that the Amended CBD allows for the imposition of 
reasonable security as permitted under the Ad Note a nd thus in accordance with the provisions of the 
GATT 1994,  as interpreted by the Anti-Dumping and SCM Agreements .  As explained before, the 
Panel is unable to accept that a measure which constitutes specific action against dumping (or 
subsidisation) in accordance with the provisions of the Ad Note, could nevertheless be found 
inconsistent with other provisions of the GATT 1994 .  In light of the General Interpretative Note to 
Annex 1A  of the WTO Agreement , we concluded that our findings under of the Article 18.1 of the Anti-
Dumping Agreement , and by reference, Article VI of the GATT 1994  and the Ad Note must prevail 
over any potential finding of violation under Ar ticles I, II:1(a) and (b) and XI of the GATT 1994 .  This 
also applies to our findings under Articles 10 and 32.1 of the SCM Agreement.  
7.274  We also found support for our view in the principle of international law lex specialis derogat 
legi generali .  Since Article VI of the GATT 1994 , including the Ad Note, "deals specifically, and in 
detail", with the issue of security  for definitive anti-dumping duties, and those provisions address the 
"basic feature" of the measure at i ssue more directly than the other GATT 1994  provisions cited by 
India, we concluded that Article VI  and the Ad Note thus constitute lex specialis  and should prevail 
over the more general GATT 1994  provisions cited by India.  This also applies in the context of 
collecting security for countervailing duties. 
7.275  In light of the above, we conclude that it woul d not be appropriate for us to proceed and rule 
on India's as such claims under Articles I, II:1(a) and (b) and XI of the GATT 1994
, and we decline to 
do so. 
D. NOTIFICATION RE QUIREMENT UNDER ARTICLE  18.5  OF THE ANTI-DUMPING AGREEMENT  AND 
ARTICLE  32.6  OF THE SCM  AGREEMENT  
1. Main arguments of India 
7.276  India claims that the United States has violated Articles 18.5 of the Anti-Dumping Agreement  
and 32.6 of the SCM Agreement  by not informing the Committee on Anti-dumping Practices or the 
Committee on Subsidies and Countervailing Measures (the "Anti-Dumping and SCM Committees") about the Amended CBD.  According to India,  the EBR unquestionably constitutes a fundamental 
change in the United States' administration of  its laws and regulati ons relevant to the Anti-Dumping  
and SCM Agreements .  India argues that the formal designation of the Amended CBD as a "customs 
law" is irrelevant.
269  Finally, India submits that Members are obligated to notify changes within a 
reasonable period of time in order to make notification requirements meaningful.  
2. Main arguments of the United States 
7.277  The United States argues that it did not act inconsistently with Article 18.5 of the Anti-
Dumping Agreement or Article 32.6 of the SCM Agreement  because the Amended CBD is a "law or 
                                                      
269 India's second written submission, para. 91.  WT/DS345/R 
 Page 85 
 
 
  regulation" that relates to the administration of  United States customs regulations and continuous 
bonds, and is not related to the administration of  anti-dumping or countervailing duty laws and 
regulations.270  The United States submits that a Member is not obligated to notify the Anti-Dumping 
and SCM Committees about any modification to a cust oms administrative procedure that incidentally 
affects merchandise subject to anti-dumping or countervailing duties.271  Furthermore, according to 
the United States, neither Article 18.5 nor Article  32.6 specify when a Member must notify the 
measures specified, thus eliminating the possibility of a violation these provisions.272 
3. Evaluation by the Panel 
7.278  India requests the Panel to find that the United States has violated Articles 18.5 of the Anti-
Dumping Agreement  and 32.6 of the SCM Agreement  by failing to notify the Amended CBD to the 
Anti-Dumping and SCM Committees.  The United States,  however, is of the view that it was under no 
obligation to notify the Amended CBD to either of the Committees.   
7.279  Article 18.5 of the Anti-Dumping Agreement  provides: 
"Each Member shall inform the Committee of any changes in its laws and regulations 
relevant to this Agreement and in the admi nistration of such laws and regulations." 
7.280  Article 32.6 of the SCM Agreement  identically provides: 
"Each Member shall inform the Committee of any changes in its laws and regulations 
relevant to this Agreement and in the admi nistration of such laws and regulations." 
7.281  We note that the United States has stated that the Amended CBD "is not a 'law or regulation' 
relevant to the Anti-Dumping  or SCM Agreements , and does not relate to the administration of those 
laws or regulations."273  Moreover, the United States has d escribed the Amended CBD as containing 
"administrative procedures app licable to continuous bonds."274 
7.282  Notwithstanding the United States' views, even if the Amended CBD, as a directive, would 
not constitute a "law or regulati on", and regardless of whether it  addresses US Customs regulations 
and continuous bonds, it amends the procedure for collecting security from importers who may be 
liable for anti-dumping or countervailing duties.  The EBR has been designed as a security for the 
collection of potential increased anti-dumping or coun tervailing duties and this security may only be 
imposed where a given product is subject to an anti -dumping or countervailing order.  We also recall 
our findings that the Amended CBD constitutes specific action against dumping or subsidisation 
within the meaning of Article 18.1 of the Anti-Dumping Agreement  and Article 32.1 of the 
SCM Agreement .  We arrived at this conclusion by finding, inter alia , that the constituent elements of 
dumping and/or subsidisation were present in th e Amended CBD.  For all of these reasons, we 
consider that the Amended CBD "changes ... the ad ministration" of anti-dumping or countervailing 
duty laws and/or regulations and thus falls  within the scope of Article 18.5 of the Anti-Dumping 
Agreement  and Article 32.6 of the SCM Agreement .   
7.283  In light of our finding that the Amended CBD falls within the scope of Article 18.5 of the 
Anti-Dumping Agreement  and Article 32.6 of the SCM Agreement  , we must last address whether the 
United States has violated its obligations by failin g to notify the Amended CBD to the Anti-Dumping 
                                                      
270 United States' first written submission, para. 81. 
271 United States' first written submission, para. 81. 
272 United States' first written submission, paras. 79-82. 
273 United States' first written submission, para. 81. 
274 United States' first written submission, para. 81. WT/DS345/R 
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  and SCM Committees within a specific timeframe.  I ndia has argued that a Member must make such 
notifications within a "reasonable" time period.  We note that Article 18.5 of the Anti-Dumping 
Agreement  and Article 32.6 of the SCM Agreement  do not specify an exact time limit for a WTO 
Member to notify its relevant law or regulation.  Despite the absence of a specific deadline, in our 
view, in order for any notification to be effective, it must be made within a reasonable time.  It is also 
our view that Article 18.5 of the Anti-Dumping Agreement  and Article 32.6 of the SCM Agreement  
were originally formulated to address transparen cy concerns surrounding the administration of anti-
dumping and countervailing duty investig ations and measures.  A failure  to properly notify changes in 
the anti-dumping laws or regulations, or the administration of such laws to the Anti-Dumping and SCM Committees within a reasonable time fails to address that objective. 
7.284  In the matter before us, we are unaware that the United States has yet attempted to notify the 
Amended CBD to the Anti-Dumping and SCM Committ ees .  The United States has failed to do so 
despite the fact that the Amended CBD became effe ctive more than three years ago with publication 
of the July 2004 Amendment.  We consid er this delay to be unreasonable.   
7.285  We accordingly find that the United States has failed to meet its obligation to notify the 
Amended CBD to the Anti-Dumping and SCM Committees. 
E. U
NITED STATES ' DEFENCE UNDER ARTICLE  XX( D) OF THE GATT 1994  
7.286  Having found that the EBR constitutes "specific action against dumping" and that it is not a 
"reasonable security" under the Ad Note to Article VI of the GATT 1994 , and thus it is not "in 
accordance with the provisions of the  GATT 1994 , as interpreted by the [ Anti-Dumping] Agreement ", 
the Panel will proceed to examine the United States' defence under Article XX(d) of the GATT 1994 .  
1. Main arguments of the United States 
7.287  The United States argues that the Amended CB D is justified under Article XX(d) of the 
GATT 1994  as a measure necessary to secure complia nce with United States anti-dumping and 
countervailing duty assessment laws.  According to the United States, the Amended CBD is necessary 
to secure compliance with 19 U.S.C. 1673e(1), wh ich governs the assessment of anti-dumping duties, 
as well as general customs regulations related to the payment of duties.  Specifically, according to the 
United States' argument, the Amended CBD is necessary to secure compliance with US laws 
governing revenue collection because it secures un secured liability arising from additional anti-
dumping or countervailing duties owed in excess of cash  deposits.  The United States has stated that it 
considers that problems of "significant potential un secured liability" and "significant risk of default" 
exist with respect to subject shrimp entries.275  The United States submits that 19 U.S.C. 1673e(1) and 
the other relevant laws and regulations that authorize the Amended CBD are not themselves WTO-
inconsistent.  The United States also argues that no  reasonable alternative is available to ensure 
revenue collection.276   
7.288  The United States further argues that the Amende d CBD is consistent with the chapeau to 
Article XX.  In this regard, the United States submits that the Amended CBD does not constitute a 
disguised restriction on international trade or a me ans of arbitrary or unjustifiable discrimination 
between countries where the same conditions prevail.   In support of this position, the United States 
submits that the measure applies to designated me rchandise subject to anti-dumping or countervailing 
duties regardless of origin, and applies to all c ountries subject to the anti-dumping order on subject 
shrimp.  In addition, the United States submits that bond amounts may be determined based on individualised risk assessments which are available to all importers/principals.  Finally, the United 
                                                     
 
275 United States' first written submission, para. 90. 
276 United States' first written submission, para. 92.  WT/DS345/R 
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  States emphasizes that the Amended CBD was publis hed on US Customs' web site when initially 
introduced.  The October 2006 Notice, which was later published in the Federal Register, is described  
by the United States as a complete statement of the measure's contents and how it would be applied, 
which allows importers to comment formally on the EBR and its administration, and presents the 
directive's objective as addressing revenue collection problems.277 
2. Main arguments of India 
7.289  India disagrees with the United States and cons iders that the EBR as authorized by the 
Amended CBD, is not justifie d under Article XX(d) of the GATT 1994  because it is not necessary to 
secure compliance with US laws.  As a general matter, India argues that the measure cannot be 
considered as necessary or indisp ensable since the United States h as maintained and operated a 
retrospective system since at least 1979 without pr eviously encountering a need for the type of 
security provided by the EBR.  Al so, as specific to subject shrimp, India submits that the US does not 
have a basis on record or even expertise for dete rmining a higher likelihood of increase in future 
margins or defaults.  India further argues that the Un ited States' assertion is flawed that a high risk of 
default in payments by subject shrimp importers/pri ncipals exists and that such a risk of default 
should justify imposition of the EBR to subject shrimp imports.  In this regard, India submits that the 
United States improperly established a higher incidence of default in payments by agriculture/aquaculture importers by factoring in ma rgins for crawfish and garlic importers based on 
adverse facts available, defaults by new shippe rs not subject to bond requirements, and surety 
bankruptcies.
278  Additionally, India argues that the application of the EBR should not be considered 
necessary since less restrictive remedies exist to ensure the collection of anti-dumping or 
countervailing duties.  India has proposed as alte rnatives, civil remedies, an across-the-board 
determination of the financial soundness of all im porters prior to application of the EBR, or 
reductions in the duration of assessment review periods.279  Regardless of whether the measure is 
considered necessary, and regardless of the existen ce of less restrictive alternative remedies, India 
submits that the EBR does not meet the requirements of the chapeau to Article XX(d).  According to 
India, the designation of shrimp subject to an anti-dumping order as a covered case was arbitrary and 
capricious, and constitutes a disguised restriction on trade.  In particular, India considers the EBR's 
application to discriminate between the six subj ect countries and other c ountries where the same 
conditions prevail. 
3. Evaluation by the Panel 
7.290  Before examining whether the EBR is justified by Article XX(d) of the GATT 1994 , we recall 
that the United States has the burden to pr ove to the Panel that this is the case.280   
7.291  We will now look at the text of Article XX(d) and the chapeau of Article XX which provide: 
"Subject to the requirement that such me asures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between 
countries where the same conditions prev ail, or a disguised restriction on 
international trade, nothing in this Agre ement shall be construed to prevent the 
adoption or enforcement by any contracting party of measures: 
                                                      
277 See United States' first written submission, para. 77. 
278 India's second written submission, para. 110. 
279 India's second oral statement, paras. 56-57;  s ee also India's second written submission, para. 112. 
280 In US – Wool Shirts and Blouses , the Appellate Body held that "the burden of proof rests upon the 
party, whether complaining or defending, who asserts the affirmative of a particular claim or defence." 
Appellate Body Report, US – Wool Shirts and Blouses , p. 14. WT/DS345/R 
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  (d) necessary to secure compliance with laws or regulations which 
are not inconsistent with the provisions of this Agreement, including those relating to customs enforcement of monopolies operated under paragraph 4 of Article II and Article  XVII, the protection of patents, 
trade marks and copyrights, and the prevention of deceptive 
practices[.]" 
7.292  We note that, in US – Gasoline , the Appellate Body concluded that the analysis of a measure 
under one of the paragraphs of Article  XX is a "two-tiered" approach: 
"In order that the justifying protection of  Article XX may be extended to it, the 
measure at issue must not only come under one or another of the particular exceptions 
– paragraphs (a) to (j) – listed under Article  XX; it must also satisfy the requirements 
imposed by the opening clauses of Article XX.   The analysis is, in other words, two-
tiered: first, provisional justification by reason of characterisation of the measure under [in that case] XX(g); second, further appraisal of the same measure under the 
introductory clauses of Article XX ..."
281 
7.293  We agree and adopt as our own the Appellate B ody's reasoning.  Therefore, the Panel shall 
first look at whether the EBR is necessary to secure compliance with  the relevant provisions of US 
law that direct US Customs to assess and coll ect anti-dumping duties.  We will only proceed to 
analyse whether the EBR meets the requirements of the chapeau  to Article XX, i.e whether the EBR 
allows for "arbitrary or unjustifiable discrimin ation between countries where the same conditions 
prevail", or constitutes a "disguised restriction on intern ational trade", if we have first determined that 
the EBR has met the requirements under paragraph (d). 
(a) Whether the EBR is necessary to secure compliance with US laws and regulations as 
provided in Article XX(d) of the GATT 1994  
7.294  The Appellate Body has indicated that two elemen ts should be satisfied in order for a measure 
to be provisionally justified under paragraph (d) of Article XX: 
"For a measure ... to be justified provisiona lly under paragraph (d) of Article XX, two 
elements must be shown.  First, the measure must be one designed to 'secure 
compliance' with laws or regulations that are not themselves inconsistent with some 
provision of the GATT 1994 .  Second, the measure must be 'necessary' to secure such 
compliance.  A Member who invokes Article XX(d) as a justification has the burden of demonstrating that these two requirements are met."
282 
(i) First element: Whether the EBR has been "desi gned" to secure compliance with US laws and 
regulations that are not in themselves WTO-inconsistent 
7.295  We shall therefore commence our analysis by examining whether the EBR has been 
"designed" to secure compliance with US laws and regulations that are not themselves inconsistent 
with the GATT 1994 .  A necessary step in this analysis is t hus to identify which are those US laws or 
regulations the compliance with which the EBR is ai med at securing, whether they are not themselves 
WTO-inconsistent, and whether the EBR is itsel f designed to secure compliance with the aim 
expressed in the relevant US laws or regulations.  
                                                      
281 Appellate Body Report, US – Gasoline , p. 22. 
282 Appellate Body Report, Korea – Various Measures on Beef , para. 157.  WT/DS345/R 
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  7.296  The United States claims that the Amended CBD secures compliance with 19 U.S.C. § 
1673e(a)(1), which governs assessment of anti-dumping duties and reads as follows: 
"Within 7 days after being notified by the Commission of an affirmative 
determination under section 1673d (b) of this  title, the administering authority shall 
publish an anti-dumping duty order which—  
(1) directs customs officers to assess an anti-dumping duty equal to 
the amount by which the normal value of the merchandise exceeds the export price (or the constructed export price) of the merchandise, within 6 months after the date on which the administering authority receives satisfactory information upon which the assessment may be 
based, but in no event later than—  
(A) 12 months after the end of the annual accounting period of the 
manufacturer or exporter within whic h the merchandise is entered, or 
withdrawn from warehouse, for consumption, or  
(B) in the case of merchandise not sold prior to its importation into 
the United States, 12 months after the end of the annual accounting 
period of the manufacturer or exporter within which it is sold in the United States to a person who is not the exporter of that merchandise." 
7.297  The United States further submits that the Amended CBD is necessary to ensure compliance 
with 19 C.F.R. § 113.13(c), which requires port di rectors to obtain bonds "adequate to protect the 
revenue and insure compliance with the law and regulations."
283   
7.298  India submits that 19 U.S.C. § 1673e(a)(1) or 19 C.F.R. § 113.13(c) exclusively do not 
govern the obligation to require payment of duties owed to the US Treasury.  India submits that 19 U.S.C. § 1673e(a)(1) "... directs US Customs to assess anti-dumping duties ... ", and 19 U.S.C. § 1673e(a)(3) "... requires the deposit of estimated an ti-dumping duties pending liquidation ... ".  India 
considers that 19 U.S.C. § 1673e(b) titled "Impos ition of duty", which governs imposition of anti-
dumping duties, read together with provisions of 19 U.S.C. § 1673f titled "Treatment of difference 
between deposit of estimated anti-dumping dut y and final assessed duty under anti-dumping duty 
order" actually identifies US Customs' obligation to collect anti-dumping duties.
284  Regardless of the 
inclusion of these additional provisions, India has stat ed that all of the provisions read together 
identify the obligation of the US Treasury and/ or US Customs to collect anti-dumping duties.285 
7.299  Taking the parties' views into considerati on, in our view, 19 U.S.C. § 1673e(a)(1) in 
combination with certain additional provisions enco mpass the United States' obligation to collect anti-
dumping duties.  Whereas 19 U.S.C. § 1673e(a)(1) directs customs officers to "assess" an anti-dumping duty, the obligation under 19 U.S.C. § 1673e(b)(1) requires that entries of merchandise 
subject to an anti-dumping order "be subject to the imposition of anti-dumping duties".  Although 
neither the United States or India did not refer to the following, we also note that 19 U.S.C. § 1673 
provides that USDOC  shall "impose[] upon such me rchandise an anti-dumping duty, in addition to 
any other duty imposed in an amount equal to th e amount by which the normal value exceeds the 
export price (or the constructed export price) for the merchandise."  Additionally, we note that 19 
                                                     
 
283 United States' responses to Second Set of Panel Questions, para. 54. 
284 In the case of countervailing duties, India submits  that 19 U.S.C. § 1671e(b) read together with 
19 U.S.C. § 1671f(b) govern US Customs' obligation to collect countervailing duties. 
285 India's responses to Second Set of Panel Questions, paras. 98-101. WT/DS345/R 
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  C.F.R. § 351.212(b)(1) requires that "the Secr etary will instruct the Customs Service to assess 
anti-dumping duties by applying the assessment rate  to the entered value of the merchandise".  
Alternately, 19 C.F.R. § 351.211(c)(1)  provides that  the cash deposit rate will be assessed as the rate 
of final liability if an administrative review is not requested.  We consider each of these provisions 
govern the final collection of anti-dumping or co untervailing duties.  Therefore, in our view, 19 
U.S.C. § 1673e(a)(1) in combination with 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 
351.212(b)(1), and 19 C.F.R. § 351.211(c)(1) represents  the United States' obligation to collect anti-
dumping duties.  We note that 19 U.S.C. § 1673e(a)(3) strictly requires the deposit of " ... estimated  
anti-dumping duties pending liquidation ... ". 
7.300  Accordingly, the Panel provisionally concludes that for the purpose of considering the United 
States' defence under Article XX(d), the law or regul ation at issue is 19 U.S.C. § 1673e(a)(1) read 
together with 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1), all of which together govern the final collection of anti-dumping or countervailing 
duties.  We do not consider it necessary to expand ou r discussion to include analysis of 19 U.S.C. § 
1673e(a)(3), governing the deposit of estimated anti- dumping duties pending liquidation, or 19 U.S.C. 
§ 1673f, governing treatment of difference betwee n deposit of estimated anti-dumping duty and final 
assessed duty under anti-dumping duty order. 
7.301  The Panel must next consider for the purpo se of examining the United States' arguments 
under Article XX(d) whether 19 U.S.C. § 1673e(a)(1) r ead together with 19 U.S.C. § 1673e(b)(1), 19 
U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1) are in themselves not inconsistent with any provision of the GATT 1994 .  When considering the relevant provisions of the 
GATT 1994  governing anti-dumping duties, the Pane l recognizes that Article VI:2 expressly 
recognizes Members' ability to levy anti-dumping duties where lawfully owed.  As we have 
established in Section VII.B.2(b) above, the Ad No te permits Members to require reasonable security 
in a case of suspected dumping until a final determ ination of dumping is made in the assessment 
review.  The Panel further notes that India h as not expressly challenged any of these laws as 
inconsistent with any provision of the GATT 1994 .  Moreover, regardless of India's expansion of what 
constitutes the relevant law enforced by the Am ended CBD, the Panel does not interpret India's 
commentary as a challenge to the right of the Unite d States to collect anti-dumping or countervailing 
duties.  Accordingly, the Panel concludes that, for the purpose of its analysis of the US defence under 
Article XX(d) of GATT 1994 , 19 U.S.C. § 1673e(a)(1) read together with 19 U.S.C. § 1673e(b)(1), 19 
U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1)  are not in themselves 
inconsistent with any provision of the GATT 1994 . 
7.302  As a final preliminary matter, the Panel will next consider whether the Amended CBD, which 
authorizes application of the EBR,  has indeed been designed to secu re compliance with 19 U.S.C. § 
1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1).  We note that the August 2004 Amendm ent indicates that one of the goals of amending 
the bond directive is "ensuring [US Customs'] ab ility to collect the anti-dumping and countervailing 
duties at liquidation and ensuring that the revenue is protected".
286  The August 2005 Clarification 
states that the continuous bond guidelines were modi fied as "necessary in order to ensure the revenue 
is adequately protected".287  The October 2006 Notice explains: 
"Congress has provided [US Customs] authority to require security in order to ensure 
the payment of all duties determined to be due to the United States, including revenue 
                                                      
286 Exhibit IND-3, p. 2. 
287 Exhibit IND-4, p. 1.  WT/DS345/R 
 Page 91 
 
 
  collection gaps between estimated duty deposits and final assessed duties that the 
importer fails to satisfy."288 
7.303  We note that the stated goal of collecti ng "anti-dumping and countervailing duties at 
liquidation" or "final assessed duties" potentially includes both the collection of the amount of duties 
established during the final determination in the or iginal investigation as well as any increases in anti-
dumping duties that may arise in the period followin g a final determination but prior to assessment of 
final liability. 
7.304  In our view, the text of the instruments comprising the Amended CBD clearly indicates that 
the stated goals of the measure at issue align with the objectives that 19 U.S.C. § 1673e(a)(1), 19 
U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1) are 
designed to secure: the final collection of anti- dumping or countervailing duties equal to the amount 
by which normal value of subject merchandise exceeds to export price of that merchandise.  Thus, for 
the purpose of examining the United States' argumen ts under Article XX(d), it is sufficient for the 
Panel to conclude that the Amended CBD which authorizes the imposition of the EBR has indeed 
been designed to secure compliance with 19 U.S.C.  § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. 
§ 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1). 
(ii) Second element: Whether the EBR is "necessary  to secure compliance with" 19 U.S.C. § 
1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1) 
7.305  Once we have established that the EBR has been designed to secure compliance with 19 
U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 
C.F.R. § 351.211(c)(1), the WTO-compatibility of wh ich is not being contested, we will next examine 
whether the EBR is "necessary" to  ensure such compliance.   
7.306  In this regard, the United States argues th at the Amended CBD, which authorizes the 
imposition of the EBR, is necessary to secure comp liance with US laws governing revenue collection 
because it secures unsecured liability arising from additional anti-dumping or  countervailing duties 
owed in excess of cash deposits.  In particular, the United States is arguing that the application of the 
measure to subject shrimp importers was and remains necessary to secure against "significant potential unsecured liability" and "significant risk of  default" associated with merchandise entries.
289  
According to the United States, the Amended CBD w as issued in a year following defaults of more 
than $225 million on payment of anti-dumping duties,  which reached $629 million as of end of fiscal 
year 2006.290  The United States has estimated that the va lue of subject shrimp imports exceeds $2.5 
billion291 and thus poses a significant additional risk for uncollected revenue in the event that 
importer/principals were to default.  The United Stat es claims that the likelihood of default by subject 
shrimp importers, and importers/principals of agri culture/aquaculture merchandise more broadly, is 
significant due to the fact that such entities tend to be undercapitalised a nd discontinue operations 
before payment of final anti-dumping duty liability.292  With respect to agri culture/aquaculture anti-
dumping cases not including subject shrimp, US Customs concluded that anti-dumping duties 
increased 33 per cent of the time, did not change 11 per cent of the time, and declined 56 per cent of 
                                                      
288 Exhibit IND-6, p. 62,278. 
289 United States' first written submission, para. 90. 
290 United States' first written submission, para. 13. 
291 United States' first written submission, para. 2. 
292 United States' first written submission, para. 15. WT/DS345/R 
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  the time.
293  In cases where anti-dumping duties increased, the United States claims that final liability 
for anti-dumping duties often exceeded the amount secured by cash deposit and ordinary basic bond.   
7.307  India disputes as unreasonable the US' determina tion that subject shrimp importers' dumping 
margins are likely to increase and that subject shrimp  importers present a heightened risk of default in 
comparison to other importers of other products subject to anti-dumping orders.  Foremost, India 
emphasizes that the US' own analysis of anti-dumping duties in the case of other 
agriculture/aquaculture products indicated that  rates do not increase 67 per cent of the time.294  India 
also notes that the United States' analysis of th e likelihood of margin increases and the likelihood of 
default was based on crawfish and honey imports, and not subject shrimp.  India calls into question 
the accuracy of the US' analysis, since India claims no basis for co mparison exists that shrimp and 
other agriculture/aquaculture merchandise share simila r characteristics related to capitalization rates, 
low entry/exit barriers, history of customs du ties payments, reliance on asset-based financing, and 
levels of cash flow.295  India also claims that determinati on of margins for crawfish and garlic 
importers are inaccurate predictors for subject shri mp since the dumping margin determinations were 
based on the application of adverse facts available,  defaults by new shippers not subject to bond 
requirements, and surety bankruptcies that  led to a higher incidence of default in payments, which in 
turn, led to defaults on anti-dumping duties in the years between 2004 and 2006.296  For these reasons, 
India submits that the US also does not have a b asis on record or even expertise for determining a 
higher likelihood of increase in future margins or ev en a likelihood defaults by importers of subject 
shrimp.297  India also cites a determination by the US CIT that no basis existed in US Customs' 
administrative record to establish that shrimp exporte rs were likely to default on payment of increased 
duties.298 
7.308  We first look at the ordinary meaning of the word "necessary": 
"[t]hat which is indispensable; an essentia l...;...[that] which is required for a given 
situation; ...[t]hat cannot be dispensed w ith or done without; requisite, essential, 
needful...; [d]etermined by predestination or natural processes, and not by free 
will;...resulting inevitably from the nature of things or of the mind itself...; 
[i]nevitably determined or produced by a previous state of things...".299     
7.309  The Appellate Body has already examined th e concept of "necessary" in the context of 
Article XX(d) of the GATT 1994  in Korea – Various Measures on Beef .  In this case, the Appellate 
Body concluded that, in order to be considered "necessary" to secure compliance, a measure does not 
need to be "indispensable", but should constitute so mething more than strictly "making a contribution 
to": 
"We believe that, as used in the context of Article XX(d), the reach of the word 
'necessary' is not limited to that which is 'indispensable' or of absolute necessity or 
inevitable to secure compliance certainly fu lfil the requirements of Article XX(d).  
But other measures, too, may fall within th e ambit of this exception.  as used in 
Article XX(d), the term 'necessary' refers, in our view to a range of degrees of 
necessity.  At one end of this continuum li es 'necessary' understood as 'indispensable'; 
at the other end, is 'necessary' taken to mean as 'making a contribution to'.  We 
                                                      
293 United States' first written submission, footnote 29. 
294 See United States' first written submission, footnote 29. 
295 India's responses to Second Set of Panel Questions, para. 72. 
296 India's second written submission, para. 110. 
297 India's second written submission, para. 111. 
298 Exhibit-IND – 16, p. 54. 
299 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. II, 
p. 3118.  WT/DS345/R 
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  consider that a 'necessary' measure is, in this continuum, located significantly closer 
to the pole of 'indispensable' than to  the opposite pole of simply 'making a 
contribution to'."300 
7.310  The Appellate Body weighed additional factors in  evaluating the necessity of a measure, such 
as:  (i) the relative importance of the common inter ests or values that the law or regulation to be 
enforced is intended to protect; (ii) the extent to  which the measure contributes to the realization of 
the end pursued, the securing of compliance with the law or regulation at issue; and, (iii) the restrictive impact of the measure on imported goods.  In Korea – Various Measures on Beef  the 
stated: 
"It seems to us that a treaty interpreter assessing a measure claimed to be necessary to 
secure compliance of a WTO-consistent law or regulation may, in appropriate cases, 
take into account the relative importance of  the common interests or values that the 
law or regulation to be enforced is intende d to protect. The more vital or important 
those common interests or values are, the ea sier it would be to accept as 'necessary' a 
measure designed as an enforcement instru ment... There are other aspects of the 
enforcement measure to be considered in evaluating that measure as 'necessary'. One 
is the extent to which the measure contributes to the realization of the end pursued, the securing of compliance with the law or  regulation at issue. The greater the 
contribution, the more easily a measure might be considered to be 'necessary'. 
Another aspect is the extent to which the compliance measure produces restrictive 
effects on international commerce,[footnote om itted] that is, in respect of a measure 
inconsistent with Article III:4, restric tive effects on imported goods. A measure with 
a relatively slight impact upon imported produc ts might more easily be considered as 
'necessary' than a measure with inte nse or broader restrictive effects ..."
301 
7.311  As pertains to this importance of the interest  which the EBR allegedly intends to protect, we 
consider that the assessment and collection of anti-dumping or countervailing duties carries 
significant importance, specifically in the context of  US efforts to enforce trade remedies permissible 
under the WTO Agreement s, and generally, for the purpose of securing collection of US Treasury 
revenue within the context of its retrospective duty assessment system.  It is in this regard that 
Article VI:1 of the GATT 1994  expressly recognizes WTO Members' ability to collect anti-dumping 
duties where lawfully owed.  It also stands to r eason that taking security logically serves the purpose 
of collecting the full amount of anti-dumping or  countervailing duties owed.  The United States 
argues that the Amended CBD which allows for the imposition of the EBR, secures an otherwise 
unsecured liability – any additional anti-dumping duties owed upon assessme nt that exceed cash 
deposits.302  We agree that this would logically aid in the collection of revenue.  India does not seem 
to dispute that this is the case.303    
7.312  As the EBR makes clear on its face, however, we are not dealing with a measure that is 
designed to secure the collection of anti-dumping du ties generally.  Instead, we are considering a 
measure designed to protect against the likelih ood of anti-dumping duties exceeding cash deposit 
rates.  We have explained earlier that there c ould only be an appropriate basis for taking such 
increased security under the Ad Note if a WTO Me mber properly determined that the rates of 
dumping provided for in the anti-dumping order were  likely to increase (such that the cash deposits 
provided for in the anti-dumping order would not pr ovide sufficient security for the relevant case of 
suspected dumping).  Notwithstanding that, we f ound that the United States had failed to properly 
                                                      
300 Appellate Body Report, Korea – Various Measures on Beef , paras. 161. 
301 Appellate Body Report, Korea – Various Measures on Beef , paras. 162-163. 
302 United States' first written submission, para. 90. 
303 Exhibit IND-8, Exhibit 5, p. 6. WT/DS345/R 
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  establish that rates of dumping provided for in th e anti-dumping order were likely to increase would 
increase and therefore concluded that the United Stat es had failed to demonstrate that the additional 
security required through the application of the EB R reasonably correlated to any case of suspected 
dumping in excess of the margin of dumping provided for in the anti-dumping order.  Accordingly, 
we found that the additional security requirements resulting from the application of the EBR were not 
"reasonable" within the meaning of the Ad Note.  In our view, without adequately establishing that 
anti-dumping duties are likely to increase above the cash  deposit rates, it does not logically follow that 
a security is necessary within the meaning of Article XX(d) of the GATT 1994 .  Given that the 
likelihood of increased anti-dumping duties has not b een properly established by the United States, we 
do not see the need  to impose the EBR to secure against such an outcome. 
(b) Conclusion 
7.313  Therefore, in light of our findings that that th e United States failed to demonstrate that the 
additional security required through the applicati on of the EBR reasonably correlated to any case of 
suspected dumping in excess of the margin of dumpi ng provided for in the anti-dumping order, we 
cannot determine that the EBR as applied  to shrimp is in fact necessary within the meaning of 
Article XX(d) of the GATT 1994 .  Accordingly, we consider that the United States  has failed to 
establish that the EBR as applied  to shrimp is justified as being necessary to secure compliance with 
19 U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1) or any other relevant laws. 
VIII.  CONCLUSIONS AND RECOMMENDATIONS 
8.1 In light of the above findings, we reject  India's claims that the laws, rules and regulations of 
the United States that authorize the imposition of  the EBR and the instruments comprising the 
Amended CBD are inconsistent as such  with the provisions of Articles 1, 7.1(iii), 7.2, 7.4, 9.1, 9.2, 
9.3 (including 9.3.1), 18.1 and 18.4 of the Anti-Dumping Agreement ; Articles 10, 17.1(c), 17.2, 17.4, 
19.2, 19.3, 19.4 and 32.1 of the SCM Agreement ; Articles VI:2 and VI:3 of the GATT 1994; and the 
Ad Note thereto. 
8.2 In light of the above findings, we uphold India's claims that: 
(i) the application of the EBR to subject shrimp from India is inconsistent with 
Articles 1 and 18.1 of the Anti-Dumping Agreement , and the Ad Note; that 
(ii) the application of the EBR to subject shrimp from India prior to the 
imposition of the anti-dumping order is in consistent with Article 7.2 of the 
Anti-Dumping  Agreement ; and that 
(iii) the United States violated Article 18.5 of the Anti-Dumping Agreement  and 
Article 32.6 of the SCM Agreement  because it failed to notify the Amended 
CBD to the Anti-Dumping and SCM Committees; 
8.3 We reject  the United States' argument that the application of the EBR is justified under 
Article XX(d) of the GATT 1994 . 
8.4 In light of the above findings, we decline to rule separately on India's claims that: 
(i) the application of the EBR to subject shrimp from India prior  to the 
imposition of the anti-dumping order is in consistent with Ar ticles 7.1(iii), 7.4 
and 7.5 of the Anti-Dumping Agreement ; that  WT/DS345/R 
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  (ii) the application of the EBR to subject shrimp from India is inconsistent with 
Articles I:1, Article II:1(a) and (b), X(3)(a), XI:1 and XIII of the GATT 1994 ; 
and that 
(iii) the laws, rules and regulations of the United States that authorize the 
imposition of the EBR and the instruments comprising the Amended CBD 
are inconsistent as such  with Articles I:1, Article II:1(a) and (b), X(3)(a), 
XI:1 and XIII of the GATT 1994  
8.5 Under Article 3.8 of the DSU , in cases where there is infringement of the obligations assumed 
under a covered agreement, the action is considered prima facie  to constitute a case of nullification or 
impairment of benefits under that agreement.  Accordingly, we concl ude that to the extent the United 
States has acted inconsistently with the provisions of the Anti-Dumping Agreement  and the GATT 
1994 , it has nullified or impaired benefits accruing to India thereunder.  
8.6 Article 19.1 of the DSU is explicit concerning the recommenda tion a panel is to make in the 
event it determines that a measure is in consistent with a covered agreement: 
[i]t shall recommend that the Member concerned bring the measure into conformity 
with that agreement. ( footnotes omitted ) 
8.7 We therefore recommend that the United States bring its measure into conformity with its 
obligations under the Anti-Dumping Agreement  and the GATT 1994 . 
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