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  ANNEX B 
 
SUBMISSIONS OF JAPAN 
 
CONTENTS PAGE 
B-1 Executive Summary of the first written submission by Japan B-2 
B-2 Executive Summary of the oral statement by Japan at the first 
substantive meeting B-9 
B-3 Executive Summary of the second written submission by Japan B-15 
B-4 Executive Summary of the opening oral statement by Japan at the 
second substantive meeting B-25 
 
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  ANNEX
 B-1 
 
EXECUTIVE SUMMARY OF THE  
FIRST WRITTEN SUBMISSION BY JAPAN 
 
I. INTRODUCTION 
1. Japan's first written submission in EC – Tariff Treatment of Certain Information Technology 
Products  sets forth the legal arguments challenging Eur opean Community ("EC") tariffs with regard 
to three categories of information technology pr oducts – multifunctional digital machines ("MFMs") 
with and without digital connectivity, flat pa nel display devices for automatic data processing 
machines, and set top boxes ("STBs") with a communi cation function.  Specifically, Japan argues that 
any assessment of duties against th ese products would be inconsistent  with EC obligations under its 
schedule of tariff concessions, and would thus be inconsistent with  Articles II:1(a) and II:1(b) of 
GATT 1994. 
2. For each of these three products, Japan presents its arguments on the meaning of the language 
in the relevant tariff concessions.  Japan ascertains th e meaning of this language – both the ordinary 
meaning of the language of specific concessions, and th e meaning of that language in the context of 
the other language in the EC's schedule of tari ff concessions.  Japan believes the language of the 
relevant tariff concession leaves no doubt that these pr oducts should be duty free.  To find otherwise 
would ignore the language of the concession, and would unjustifiably undermine the important trade 
liberalization represented by the Ministerial Declar ation on Trade in Information Technology ("ITA") 
signed in 1996. 
II. EC MEASURES CONCERNING MULTIFUNCTIONAL DIGITAL MACHINES ARE 
INCONSISTENT WITH EC OBLIGATIONS UNDER ARTICLES II:1(A) AND II:1(B) 
OF THE GATT 1994 
3. The first category of products, MFMs, fall into two distinct groupings, with different tariff 
concessions relevant to each.  MFMs are digital de vices that generally incorporate an input unit (a 
scanner unit to convert information into digital input  for the device) and an output unit (a printer unit 
that allows the digital output from the device to be printed).  Japan uses the term "MFMs" to refer to 
machines that, in addition to prin ting, may be used for scanning, digital copying, or facsimile 
transmission.  Some MFMs have the ability to conn ect with a computer or computer network.  The 
other MFMs do not have this computer connectivity,  operate primarily in connection with a telephone 
line, and are generally known commercially as facsimile machines. 
A. MFM S WITH DIGITAL CONNECTIVITY MUST BE ACCORDED DUTY-FREE STATUS  
4. MFMs are digital devices that generally incorp orate both an input unit and an output unit.  
Once a document has been converted into digital information, that information can be stored, 
manipulated on the computer, transmitted over phone lines, or sent over the Internet.  MFMs with 
digital connectivity are subject to tariff concessi ons that the EC made under heading 84.71 and 
subheading 8471.60, which are listed in Attachment A to the ITA.  The EC bound the duty rate for 
those products under heading 84.71 and subheading 8471.60 at zero.  However, the EC has been imposing duties on these products. 
5. Japan believes the ordinary meaning of the la nguage of EC concessions confirms that MFMs 
with digital connectivity must belong in heading 84.71 and therefore must be accorded duty-free status.  The failure to do so is inconsistent w ith Articles II:1(a) and II:1(b) of the GATT 1994 as less  WT/DS375/R 
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  favorable than the treatment accorded to MFMs with digital connectivity under Schedule LXXX of 
EC tariff concessions. 
6. The ordinary meaning of "units" in heading 84.71 and "output units" in subheading 8471.60 
confirms that MFMs with digital connectivity belong in heading 84. 71.  Whether the Panel considers 
the ordinary sense or the technology sense of these words, both point unambiguously to the conclusion that MFMs that can print digital output from a computer must fall under heading 84.71.  This printing function of MFMs confirms that MFMs are "output units – printers" within the ordinary 
meaning of these terms. 
7. Conversely, the ordinary meaning of "photocopyi ng" in heading 90.09 equally confirms that 
MFMs cannot fall under this heading.  "Photoco pying" represents a fundamentally different 
technology.  Unlike MFMs, which are based on digita l technology and which can thus connect to and 
interact with computers, photocopiers are based on optical technology.  A photocopier makes copies based on light reflected from an original document.  A photocopier is not a digital device and cannot 
connect to a computer.  Photocopiers fall under Ch apter 90 for optical products because they are a 
fundamentally different technology.  The fact th at MFMs cannot fall under the ordinary meaning of 
heading 90.09 reinforces the conclusion that  MFMs in fact belong under heading 84.71. 
8. These arguments about the ordinary meaning of  key terms are confirmed by the factual 
context of MFMs and photocopiers.  Unlike photocopier s, MFMs do not need an original document to 
make a copy.  MFMs can receive digital data from a computer or other sources, and printout that data, 
with or without an original.  Unlike photocopier s, the operation of MFMs is not limited by the 
persistence of the image.  MFMs can save the di gital data and use it now or use it later, while 
photocopiers can only function as long as the light is reflecting off the original document.  Unlike photocopiers, MFMs can share the data creating an image.  MFMs can easily share data with the 
computer or send it over networks, while photocopiers can use the reflected light to make copies.  
Finally unlike photocopiers, MFMs can manipulate the digital data that creates the printout.  MFMs 
operate based on digital data, and th erefore have all of the flexibility that digital data provides.  These 
technological differences highlight the trem endous differences betwee n "output units" and 
"photocopiers." 
9. Beyond the ordinary meaning "output units" and "photocopying", the broader context in 
which these terms appear reinforces the conclusion that MFMs with digital connectivity must fall 
within heading 84.71. The phrase "output units" in subheading 8471.60 falls among other subheadings 
that cover all types of computers, and all types of computer "units" – whether separately or in various 
combinations.  When the various subheadings of head ing 84.71 are read as a whole, it is hard to image 
a broader description of products based on digital technology and working with computers than the 
description of each subheadings of heading 84.71. 
10. Conversely, the context of heading 90.09 equa lly confirms that this heading could not 
possibly apply to a digital product like an MFM with computer connectivity.  The other headings of chapter 90 all describe optical products, which e xplains why "photocopying" – based on optical 
technology – falls in chapter 90.  Photocopiers cannot  connect to computers, are not based on digital 
technology, and therefore cannot possibly cover MF Ms that do connect to computers are based on 
digital technology.  
11. Japan believes that ordinary meaning of the te rms "output units" and "photocopying" read in 
context can resolve this dispute by itself, but interpretative materials from the Harmonized System 
also confirm this interpretation.  Note 5 to Ch apter 84 defines a broad scope for devices that are 
"units" as "printers" that output computer data.  Particularly, Note 5(D) specifically addresses certain WT/DS375/R 
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  types of computer "units" and confirms that "printer s" (a specifically enumerated type of "output unit" 
in the EC schedule of concessions) must be classified  in heading 84.71 as long as those "printers" are 
connectable to a computer and can accept digital data. 
12. Similarly, the Harmonized System materials concerning heading 90.09 confirm what the 
ordinary meaning of "photocopying" would suggest – that photocopiers are technologically different 
than computer "output units."  The Harmonized System Explanatory Notes for heading 90.09 confirm that "indirect process" electrostatic photocopying involves projecting an optical image onto a photosensitive drum or plate as an intermediary, and then making photocopies onto plain paper from 
the photosensitive drum.  This commentary confirms that "indirect process" had a very specific and 
narrow meaning when it was used in the EC Schedule,  and in no way could be construed to apply to 
MFMs that are based on digital, not optical technologies. 
13. Finally, the object and purpose of the EC con cessions would be best served by a confirmation 
of the duty-free treatment of MFMs as computer "output units".  The WTO Agreement seeks to 
reduce tariffs and barriers to trade, an object and purpose which the ITA embraced and furthered by 
eliminating tariffs on information technology pro ducts.  The concessions on heading 84.71 covered all 
computer "units" and used that term broadly and incl usively.  Nothing in the ordinary meaning or the 
context of the language in heading 84.71 suggests that the term computer "units" should be read 
narrowly as only applying to certain products or certa in generations of computer "units".  In sharp 
contrast, the language in heading 90.09 refers to a very specific non-digital technology that was not 
part of the concessions in the ITA.  It would be inconsistent with the object and purpose of the WTO 
Agreement to allow the narrow scope defined by the language of heading 90.09 to expand in such a 
way as to exclude from duty free treatment products su ch as MFMs that fall squarely within the scope 
of the broad language of the orig inal concessions on heading 84.71.  
B. MFM
S WITH FACSIMILE CAPABILITY BUT WITHOUT DIGITA L CONNECTIVITY MUST SIMILARLY 
BE ACCORDED DUTY -FREE STATUS  
14. MFMs with facsimile capability but without digital connectivity are subject to tariff 
concessions that the EC made under heading 85.17  and subheading 8517.21, which are listed in 
Attachment A to the ITA.  The EC bound the duty rate for those products under heading 85.17 and 
subheading 8517.21 at zero.  However, the EC has been imposing duties on these products. 
15. Japan believes the ordinary meaning of the la nguage of EC concessions confirms that MFMs 
with facsimile capability, but without digital connectiv ity, must belong in heading 85.17 and therefore 
must be accorded duty-free status.  The failure to do so is inconsistent with Articles II:1(a) and II:1(b) 
of the GATT 1994 as less favorable than the treat ment accorded to such MFMs under Schedule 
LXXX of EC tariff concessions. 
16. The ordinary meaning of "facsimile machines" in subheading 8517.21 confirms that MFMs 
with facsimile capability, but without digital connec tivity, belong in heading 85.17.  Whether the 
Panel considers the technology sense or the ordina ry sense of these words, both point unambiguously 
to the conclusion that MFMs that send and receive facsimiles (but do not have computer connectivity 
that would place them in heading 84. 71) must fall under heading 85.17. 
17. Conversely, the ordinary meaning of "photocopyi ng" in heading 90.09 equally confirms that 
MFMs – with or without digital connectivity – cannot fall under this heading.  "Photocopying" 
represents a fundamentally different technolog y.  Unlike MFMs, which are based on digital 
technology and which use digital technology to send and receive messages over the telephone lines, 
photocopiers operates based on optical technology.   The fact that MFMs cannot fall under the  WT/DS375/R 
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  ordinary meaning of heading 90.09 reinforces the co nclusion that MFMs with facsimile capability, but 
without digital connectivity, in fact belong under h eading 85.17.  These arguments about the ordinary 
meaning of key terms are confirmed by the very  different underlying technologies of MFMs and 
photocopiers. 
18. Japan believes that the ordinary meani ng of the terms "facsimile machines" and 
"photocopying" read in context can alone resolve th is dispute, but that interpretative materials from 
the Harmonized System confirm this interpretation.   In particular, Harmonized System Explanatory 
Notes ("HSEN") to Chapter 85 provides useful inte rpretative guidance.  This HSEN explains the 
scope of "facsimile machines," and confirms its focus on its sending and receiving messages over 
telephone lines using digital technolog y.  This HSEN reinforces the distinction between the digital 
technology for all MFMs, and the optical technology for photocopiers. 
19. Finally, the object and purpose of the EC conces sions would be best served by confirming the 
duty-free treatment of these MFMs as "facsimile machines".  The WTO Agreement seeks to reduce 
tariffs and barriers to trade, an object and purpose that the ITA embraced and furthered by eliminating 
tariffs on information technology products.  The co ncessions on heading 85.17 covered all "facsimile 
machines" and used that term broadly and inclusiv ely.  Nothing in the ordinary meaning or the 
context of the language in heading 85.17 or subh eading 8517.21 suggests that the term "facsimile 
machines" should be read narrowly as only applying to  certain products or certain generations of 
"facsimile machines".  In sharp contrast, the langua ge in heading 90.09 refers to a very specific non-
digital technology that was not part of the coverage  of the ITA.  It would be inconsistent with the 
object and purpose of the WTO Agreement to allo w the narrow scope of the language of heading 
90.09 to expand in such a way as to exclude from dut y free treatment products such as MFMs that fall 
squarely within the scope of the broad language of the original concessions on heading 85.17. 
III. EC MEASURES CONCERNING FLAT PANEL DISPLAY DEVICES "FOR" 
AUTOMATIC DATA PROCESSING MACHINES ARE INCONSISTENT WITH THE 
EC'S OBLIGATIONS UNDE R ARTICLE II:1(A) AND II:1(B) OF GATT 1994 
20. This dispute also covers "flat panel displa y devices," including the liquid crystal display 
("LCD") type commonly referred to as "LCD monito rs". Flat panel display devices, including LCD 
monitors, for automatic data processing ("ADP") m achines are listed in Attachment B to the ITA, 
which incorporates them in EC's Schedule LXXX an d makes them entitled to duty-free treatment.  In 
the alternative, flat panel display devices for ADP machines are subject to tariff concessions that the 
EC made on those products under heading 84.71 and subheading 8471.60, which are listed in 
Attachment A to the ITA.  The EC bound the duty rate for those products under heading 84.71 and 
subheading 8471.60 at zero.  However, the EC ha s been imposing duties on these products.  It should 
be noted that while Japan's submission focuses on LC D monitors with a "digital visual interface" or 
DVI, the scope of this dispute comprises flat panel display devices "for" ADP machines, the most 
common type of which are LCD monitors with DVI. 
21. As with the MFMs discussed earlier, Japan belie ves this dispute is about the meaning of 
specific language in EC tariff concessions.  Japan be lieves the ordinary meaning of the language of 
EC concessions confirms that LCD monitors with DV I must be accorded duty-free status.  The failure 
to do so is inconsistent with Articles II:1(a) and II:1(b) of the GATT 1994 as less favorable than the 
treatment to be accorded to LCD monitors with  DVI pursuant to Schedule LXXX of EC tariff 
concessions.  
22. 
The EC incorporated a headnote referencing the list of specific products in Attachment B to 
the ITA, as part of its Schedule LXXX.  One of  these products is "fla t panel display devices WT/DS375/R 
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  (including LCD…) for products falling within this agreement…".  An LCD monitor with DVI is a 
display device "for" an ADP machine, and ADP mach ines are indisputably products falling within the 
ITA.  Therefore, LCD monitors with DVI are explicitly covered by th e concessions of Schedule 
LXXX and entitled to duty-free treatment. 
23. The history of the LCD monitors used in computers provides facts that confirm this ordinary 
meaning that LCD monitors with DVI are "for" co mputers.  LCD monitors were being used for 
computers long before the ITA, and the DVI tec hnology simply made the connection between LCD 
monitors and computers more direct – allowing a di gital-to-digital transfer of signals, without any 
need to go through any conversion from an an alogue signal.  Many LCD monitors are "for" a 
computer, and an LCD monitor with DVI is undeniably "for" a computer. 
24. The ordinary meaning of this phrase – LCD monitors "for" computers – is reinforced by the 
context in which this phrase was used.  Attachment B also discusses projection-type flat panel displays.  The sole requirement to projection-type flat panel displays to be duty free is that such 
devices "can" display digital information from a com puter, and that in no way precludes multiple uses 
for these devices.  The context provided by this othe r display device confirms that it is only necessary 
for LCD monitors "for" computers to be capable of  receiving a digital signal from a computer to be 
eligible for duty-free treatment.  Had any other lim itations been contemplated, Attachment B would 
not have used the broad term "for" and the la nguage on LCD monitors would have included some 
limitation.  It does not. 
25. Further contextual understanding can be seen in the treatment of network equipment in 
Attachment B.  This provision specifically requires that such equipment be "d edicated for use solely 
or principally" with computers.  This provision show s that where the parties sought to limit the use of 
the equipment to that dedicated to computers, they  knew how to do so; the fact that they used the 
simple word "for" in the flat panel devices provi sion indicates that they did not intend such a 
limitation. 
26. In the alternative, Attachment A to the ITA pr ovides an independent legal basis to treat LCD 
monitors with DVI as duty-free.  Attachment A is a list of HS headings a nd subheadings covered by 
the concessions of Schedule LXXX.  Included in this  list are heading 84.71 and subheading 8471.60.  
The ordinary meaning of the terms of heading 84.71 and subheading 8471.60 requires the classification of LCD monitors with DVI under these categories, resulting in their duty-free treatment 
under Schedule LXXX. 
27. The context of the terms in heading 84.71 and subheading 8471.60 supports this conclusion.  
The parties sought to provide for broad inclusion of  products used in connection with ADP machines.  
Nothing in this context imposes any limitation of the concessions to output devices that are used exclusively as outputs of ADP machines. 
28. The Notes to Chapter 84, and particularly Note  5 to Chapter 84, provide helpful information 
for understanding the language of heading 84.71.  Note 5(C) to Chapter 84 states that "separately 
presented units of an automatic data processing machin e are to be classified in heading 84.71".  This 
broad and inclusive provision requires LCD monitors with DVI, as "units of" an ADP machine, to be classified in heading 84.71. 
29. In addition, Note 5(B) to Chapter 84 says that  for purposes of heading 84.71, a unit is to be 
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  system.
1  The ordinary meaning of the term "principa lly" is that the monitors may have uses other 
than output devices of ADP machines.  The very langua ge of the statements made by the EC in its 
regulations - in particular Council Regulation (E C) No 493/2005 of 16 March 2005 – concedes that 
LCD monitors with DVI are "mainly" used in conn ection with ADP machines.  Hence, the basis of 
the EC's classification of LCD monitors as outside heading 84.71 is self-contradictory and wrong. 
30. The object and purpose of the EC concessions would be best served by confirming the duty-
free treatment of LCD monitors with DVI.  The WTO Agreement seeks to reduce tariffs and barriers 
to trade, an object and purpose which the ITA embraced and furthered by eliminating tariffs on 
information technology products. The concessions for t hose products specifically listed in Attachment 
B and for those products listed in Attachment A c overed by heading 84.71 on all computer "units" 
were broad and inclusive.  Nothing in the ordinary  meaning or the context of this language suggests 
that it should be construed narrowly as only applying to LCD monitors used only  for computers, and 
excluding other LCD monitors.  It would be inconsistent with the object and purpose of the WTO 
Agreement to allow the EC to graft this limitation onto tariff concessions that have no such limitation. 
31. Since the EC's measures provide for the classifi cation of LCD monitors with DVI under 84.71 
only if they receive signals solely from an ADP machine and cannot receive signals from any other 
source, these measures are inconsistent with the concessions set forth in Schedule LXXX which is an 
integral part of the GATT 1994, and which incorporated Attachment B and Attachment A to the ITA. 
IV. EC MEASURES CONCERNING SET TOP BOXES WITH A COMMUNICATION 
FUNCTION ARE INCONSISTENT WITH EC OBLIGATIONS UNDER 
ARTICLES II:1(A) AND II:1(B) OF THE GATT 1994 
32. STB is an electronic apparatus that connects to a communication channel, such as a phone, 
ISDN (integrated services digital network) or  cable television line, and produces output on a 
conventional television screen. STBs with a communication function are listed in Attachment B to the 
ITA, which incorporates them in EC's Sche dule LXXX and makes them entitled to duty-free 
treatment.  In the alternative, those STBs are subj ect to tariff concessions that the EC made on those 
products under subheading 8517.50, 8517.80 and 8525. 20, which are listed in Attachment A to the 
ITA.  The EC bound the duty rate for those prod ucts under above-mentioned subheadings at zero.  
However, the EC has been imposing duties on these products. 
33. Japan believes that the language in the EC tari ff concession is dispositive to this dispute.  
Japan believes that this language requires that all STBs which have a communication function be 
granted duty-free treatment, regardless of where the STBs are classified under the tariff nomenclature.   
34. The ordinary meaning of the phrase "set top boxes which have a communication function" 
confirms this interpretation.  The meaning of th is language is broad, c overing those STBs whose 
purpose or intended role is the transmission or exch ange of information, without any limitation on the 
type of information exchanged.  This language certainly includes STBs with modems for gaining 
access to the Internet, which the EC concedes  in the Explanatory Notes to the Combined 
Nomenclature ("CNEN") as "set top boxes".  The language also includes other methods of receiving signals, and nothing in the language supports the EC's reading that an STB with a communication 
                                                     
 
1 Note 5(B) was reconfigured in 2007, with the "solely or principally" language becoming a part of 
Note 5(C).  The language concerning "separately presented units" remained in the new Note 5(C).  To avoid 
confusion, we refer to the subsections of Note 5 as they existed at the time the ITA was negotiated and the concessions at issue were made.  This means that we will refer to the "solely or principally" rule as being part of 
note 5(B). WT/DS375/R 
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  function may not be equipped with a hard disk or other "recording or reproducing" apparatus.  The EC 
measure is contradictory and illogically ignores th e ordinary meaning of the language of the EC 
concession. 
35. This ordinary meaning is reinforced by the specific headnote that confirms any product listed 
in Attachment B must be granted duty free treatment regardless of where the product is classified under the tariff nomenclature. 
36. Beyond the meaning of "set top boxes which have a communication function", the broader 
context of the phrase confirms that the EC Concessions includes all STBs with a communication 
function.  An examination of othe r devices covered in Attachment B shows that the drafters provided 
clear statements where they intended to limit the f unctions of an apparatus; no such limitations exist 
with regard to STBs.  The separate treatment provide d for in headings for products able to perform 
different functions, indicates that where no such di fferentiated treatment exists, such as here, devices 
able to perform more than one func tion should not be treated differently. 
37. Finally, the object and purpose of the EC C oncessions are best served by continued duty-free 
treatment of STBs with a communications function.  In addition to furthering the reduction of tariffs 
and expansion of trade, the ITA aimed to encour age technological development.  It would be 
inconsistent with this objective to reduce tariffs on a product, only to perm it the reimposition of those 
tariffs simply because of an evolution in that product.    WT/DS375/R 
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  ANNEX B-2 
 
EXECUTIVE SUMMARY OF THE ORAL STATEMENT BY JAPAN  
AT THE FIRST SUBSTANTIVE MEETING 
 
I. INTRODUCTION  
1. Before we launch into the details of the arguments  in this dispute, Japan would like to make a 
few general observations.  First, this dispute is  fundamentally about the meaning of the specific 
language in the EC schedule of tariff concessions.  The EC's arguments in this dispute will try to shift 
the focus away from the language itself, and direct our  attention to interpretative tools rather remote 
from the language.  
2. Second, as provided by the Appellate Body in EC – Computer Equipment , the scope of tariff 
concessions should not be determined in light of  "legitimate expectations".  The language must 
govern.  The EC's first written submission, however,  rests rather heavily on its "expectations" at the 
time of the concessions, by referring to the products  at issue as "new products" and "multifunctional 
products."  
3. Finally, the expectations of the opportunity for future negotiations do not change the meaning 
of the tariff concessions at issue.  When reviewi ng the EC arguments in this case, Japan has been 
struck by how little attention the EC paid to th e language of the concessions themselves, and how 
much discussion the EC devoted to the mechanisms for future negotiations.   
4. Japan presents its arguments on the meaning of th e language in the relevant tariff concessions.  
Japan believes the language of the relevant ta riff concessions leaves no doubt that these products 
should be duty-free. 
II. EC MEASURES CONCERNING MULTIFUNCTIONAL DIGITAL MACHINES ARE 
INCONSISTENT WITH EC OBLIGATIONS UNDER ARTICLE II:1(A) AND II:1(B) 
OF GATT 1994 
5. Multifunctional digital machines – so-called "MFMs " – fall into two distinct groupings, with 
different tariff concessions relevant to each.  MFMs  are digital devices that generally incorporate an 
"input unit" and an "output unit". 
6. Commercial MFMs fall into two groups.  Some  MFMs have the ability to connect with a 
computer or computer network.  Other MFMs do no t have this computer connectivity, and instead 
operate primarily in connection with a telephone line, and are generally known commercially as 
facsimile machines.  Because th ese products are covered by different tariff concession, we discuss 
each separately. 
A. MFM
S WITH DIGITAL CONNECTIVIT Y MUST BE ACCORDED DUTY -FREE STATUS  
7. Japan believes the ordinary meaning of the la nguage of the EC concessions on heading 84.71 
confirms that MFMs with digital connectivity fa ll within the scope of the tariff concessions and 
therefore must be accorded duty-free status. WT/DS375/R 
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  1. Meaning of "Units" and "Photocopying" 
8. The ordinary meaning of "units" in heading 84.71 and "output units" in subheading 8471.60 
confirms that MFMs with digital connectivity belong in heading 84. 71.  Whether the Panel considers 
the ordinary sense or the technology sense of these words, both point unambiguously to the 
conclusion that MFMs that can print digital output from a computer must fall under heading 84.71.  This predominant printing function of MFMs confirms  that MFMs are "output units – printers" within 
the ordinary meaning of these terms. 
9. The term "photocopying" in heading 90.09, as properly viewed as context for heading 84.71, 
confirms that digital copiers are not covered unde r heading 90.09, and therefore only heading 84.71 
covers MFMs.  Photocopiers fall under Chapter 90, which is for optical products, because 
"photocopying" represents a fundamentally differe nt technology from MFMs.  Unlike MFMs with 
digital connectivity, which are based on digital techno logy and which can thus connect to and interact 
with computers, photocopiers are based on analogu e or optical technology.  A photocopier makes 
copies based on light reflected from an original document.  
10. We urge the Panel to stop and reflect on the la nguage at issue.  The EC largely refuses to 
discuss the ordinary meaning of the key phrase "outpu t units" in subheading 8471.60.  Instead the EC 
jumps to the word "photocopying" in heading 90. 09 and argues this term must include so-called 
digital copying.  However, "photocopying" h as a much more specific and narrow meaning. 
11. Finally, these arguments about the ordinary meaning of key terms are confirmed by the 
factual context of MFMs and phot ocopiers.  Unlike photocopiers, MFMs operate based on digital 
data, and therefore have all of the flexibility that di gital data provide.  MFMs can receive digital data 
from computer or other sources, print digital data ev en without an original document, save digital data 
and use it now or later without limitation of persis tence of the image, share digital data with 
computers or sending it over networks and manipul ate digital data that create printout.  The 
technological differences highlight the treme ndous distinctions between "output units" and 
"photocopiers," and help confirm the ordinary meaning of these terms.  
12. As stated by the Appellate Body in EC – Chicken Cuts , "in characterizing a product for 
purposes of tariff classification, it is necessary to look  exclusively at the "objective characteristics" of 
the product in question when presented  at the bor der."  Instead of doing so, the EC's argument 
appears to use its own arbitrary criteria for characterizing the product.    
2. The terms of the EC Schedule as further context 
13. The above interpretation of the ordinary mean ing of heading 84.71 is supported by that of 
other terms in the EC Schedules as context.  The EC  believes that MFMs fall within the scope of the 
following language of subheading 9009.12:  "Elect rostatic photocopying apparatus … operating by 
reproducing the original image via an intermediate onto the copy (indirect process)."  However, the 
phrase "via an intermediate onto the copy (indirect process)" in subheading 9009.12 refers to a very 
specific technology and a very specific type of devi ce.  The text of subheading 9009.12 refers to 
operations that reproduce the original image via an  intermediate onto the copy.  The terms "image" 
and "copy" are both in a singular form, indica ting that photocopying apparatus should reproduce a 
single copy from a single original image.  In c ontrast, digital copying machines can reproduce many 
copies from a single set of digital data scanned and st ored in memory from an original document.   
14. Further, the phrase refers to a single "intermediat e" – an intermediate – not an unlimited series 
of devices operating in conjunction to create or transf er digital data.  This use of "an intermediate"  WT/DS375/R 
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  makes no sense when discussing a digital MFM, since there is no single "intermediate," or for that 
matter no intermediate or intermediates at all.   
15. The key phrase also refers to a specific "indirect process". This phrase does not cover a wide 
range of multiple processes that each may collectivel y operate "indirectly."  This "indirect process" 
cannot go beyond the scope of a "photocopying" pro cess described as "operating by reproducing the 
original image via an intermediate onto the copy ".  Therefore "indirect process" does relate to 
photocopying, but not to digital copying.  The issue here is the "indirect process electrostatic photocopying", which involves projecting a single optical image onto a photosensitive drum or plate 
as a single intermediate, and then making a single photocopy onto plain paper from the photosensitive 
drum.  
16. Nor is Japan's interpretation of the ordinary  meaning of "indirect process electrostatic 
photocopying" particularly novel or controversial.  Indeed, the EC itself used precisely the same 
interpretation in October 1995 to conclude that digital copiers were not indirect process photocopiers 
within the meaning of subheading 9009.12.   
17. Beyond the ordinary meaning of the phrases "out put units" and "photocopying," the context in 
which these terms appear reinforces the conclusion that MFMs with digital connectivity must fall 
within heading 84.71.  The phrase "output units " in subheading 8471.60  falls among other 
subheadings of heading 84.71 that cover all types of computers, and more importantly all types of computer "units" – whether separately or  in various combinations.      
3. HS and its rules 
18. In light of the clarity of the language in the concessions themselves, the analysis of the HS 
and its related rules is of little  practical value; indeed, such an analysis simply confirms the ordinary 
meaning of the language in the c oncessions.  As an initial matter, we must emphasize that the decision 
by the European Court of Justice in the Kip case, while useful in a number of respects in highlighting 
flaws in the EC's position, is merely the EC's interp retation of the HS under its domestic law within its 
jurisdiction.  This decision in no way binds this pa nel.  That being said, the EC's discussion of the Kip 
case leaves out two very important points.  First, the EC ignores that the commentary by the ECJ that 
"those machines are likely to be of a kind used pr incipally in an automatic data-processing system," 
recognizing the key importance of this digital in terface and computer connectivity in assessing these 
products.  Second, the ECJ properly noted that the MFMs at  issue "comprise, in a single housing, a 
laser printer module and a scanner module."
  The EC in its first written submission, however, 
arbitrarily divides the printer module into a print engi ne and print controller.  This bifurcation ignores 
the reality that a print engine without a print controller cannot function.   
19. The EC's argument that the tariff concessi on on heading 84.71 excludes MFMs with digital 
connectivity rests largely on its arguments about No te 5(B). Yet, these arguments fail to pay sufficient 
attention to Note 5(D).  As stated in Japan's firs t written submission, with respect to "printers", it is 
Note 5(D), rather than Note 5(B), that is relevant.    
20. Similarly the HS Explanatory Note – HSEN – concerning heading 90.09 confirm what the 
ordinary meaning of "photocopying" would suggest – that photocopiers are technologically different 
from computer "output units."  The HSEN for h eading 90.09 confirms that "indirect process" 
electrostatic photocopying involves projecting an opti cal image onto a photosensitive drum or plate as 
an intermediate, and then making a photocopy onto plain paper from the photosensitive drum.   WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-12 
  
  21. The EC also argues that General Interpretativ e Rule 3(c) governs in this case based upon the 
ECJ's determination in the Kip case.
  However, before reaching GIR 3(c), GIR 3(b) must be 
considered.  For purposes of the analysis under GIR 3(b), MFMs with digital connectivity are 
considered to be composed of the two key com ponents – a printer module and a scanner module – and 
it is the printer module that gives MFMs their esse ntial character because of  the predominant printing 
function of MFMs.  Moreover, both of the two key components – a printer module and a scanner 
module – belong to the same heading (i.e., 84.71).  Therefore, GIR 3(c) and heading 90.09 are not 
applicable to this analysis.   
4. Object and purpose 
22. Finally, the object and purpose of the EC con cessions would be best served by a confirmation 
of the duty-free treatment to the MFMs as comput er "output units".  The WTO Agreement seeks to 
reduce tariffs and barriers to trade and it would be inconsistent to allow the narrow scope defined by 
the language of heading 90.09 to expand in such a way as to exclude products such as MFMs that fall 
squarely within the scope of th e broad language of the original concessions on heading 84.71 from 
duty-free treatment. 
23. The EC argues that Japan has focused on the object and purpose of the ITA, not the WTO 
Agreements.  In fact, Japan's first written subm ission explained how the object and purpose of the 
WTO Agreements and GATT 1994 apply here.   
B. MFM S WITH FACSIMILE CAPABILITY BUT WITHOUT  DIGITAL CONNECTIVITY MUST SIMILARLY 
BE ACCORDED DUTY -FREE STATUS  
24. Japan believes the ordinary meaning, both in the technology sense and in the ordinary sense, 
of the language of EC concessions confirms that MFMs with facsimile capability, but without digital 
connectivity, must belong in heading 85.17 and therefore must be accorded duty-free status. 
25. Conversely, the ordinary meaning of "photocopyi ng" in heading 90.09 equally confirms that 
MFMs – with or without digital connectivity – cannot fall under this heading.  "Photocopying" 
represents a fundamentally different technology from MFMs.  These arguments about the ordinary 
meaning of key terms are confirmed by the very  different underlying technologies of MFMs and 
photocopiers. 
26. The EC argument on these products is basically that digital copying is a form of 
photocopying, and so heading 90.09 can apply. Fo r the reasons discussed earlier, this EC argument 
has no foundation. 
III. EC MEASURES CONCERNING FLAT PANEL DISPLAY DEVICES "FOR" 
AUTOMATIC DATA PROCESSING MACHINES ARE INCONSISTENT WITH THE EC'S OBLIGATIONS UNDE R ARTICLE II:1(A) AND II:1(B) OF GATT 1994 
27. Japan would like to begin its statement on flat-panel display devices – FPD devices – by 
refocusing the discussion on the issue before the Panel.   As is the case for MFMs, the issue in this 
dispute is interpreting the language of the EC's relevant tariff concession, i.e ., whether the concession 
grants duty free-treatment to the FPD devices at issue,  rather than a classification question of whether 
the FPD devices at issue are "computer monitors" or rather are television or video monitors.   
28. When the ITA was signed in 1996, the signatory countries pledged to provide duty-free 
treatment to a wide range of products related to  information technology.  These commitments were  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-13 
  
  embodied in two separate Attachments, which the EC  explicitly incorporated as a part of the EC's 
Schedule of Concessions, and the contents of both a ttachments are equal oblig ations to provide duty-
free treatment of the EC under GATT 1994 and the WT O Agreements.  In this case, the FPD devices 
at issue are clearly covered by both Attachment A and Attachment B.  The EC has claimed in this 
case that the product covered by the complaining parties in this case is not clear.  But the product is the same in all complaining parties' submissi ons: FPD devices, including LCD monitors, "for" 
automatic data processing – ADP – machines and ot her ITA products.  Such devices are included in 
the description in Attachment B of the EC's conc essions, "flat panel display devices… for products 
falling within [the ITA]".  Any flat-panel device with an interface permitting it to receive signals from 
a computer, and capable of operating with a computer, is within this description.  The products that 
Japan describes most frequently in its request are LC D monitors with a DVI.  It is the DVI that 
permits the display device to receive and display signals from an ADP machine, or computer.  The 
DVI therefore makes the display device an FPD "for " a computer, provided the device is capable of 
operating with a computer. 
29. Counter to the concessions in its schedules, the EC's regulations have denied duty-free 
treatment for some FPD devices and "suspended" duti es for others.  But the suspension is temporary 
and must be explicitly renewed by the EC; moreover,  the suspension can be withdrawn at any time.  
The uncertainty of the situation is itself a burden on commerce, and is inconsistent with the EC's 
obligation to provide unfettered duty -free treatment for these products.   
30. The EC claims that its obligations in its Schedule of Concessions to provide duty-free 
treatment do not extend to FPD devices capable of operating with an ADP machine so long as they 
can display signals from sources other than computer s, because such FPD devices did not exist at the 
time the concessions were made.  However, the EC h as been able to point to nothing in the language 
of the concessions themselves, as expressed in either  Attachment A or Attachment B, which would 
limit the concessions to products in existen ce at the time the concessions were made. 
31. The EC then goes on to say that such FPD devi ces at issue in this dispute constitute an 
entirely "new product, …the multifunctional LCD m onitor."  However, the relevant question is 
whether the EC's relevant tariff concession grants  duty-free treatment to such FPD devices, and the 
panel's examination must be conduc ted objectively in light of the text and context of the tariff 
concession.  As stated above, this textual approach  means that a Member's own perception on whether 
a product is "new" is irrelevant in  interpreting the term of the tariff concession.  Considering the 
existence of various FPD devices, Japan considers that  at the time the concessions were negotiated, it 
was widely foreseen and indeed expected that FPD devices for ADP machine could be able to receive 
a signal from other devices.   
32. The ordinary meaning of the language used in  both Attachment B and Attachment A, as 
incorporated in the EC's Schedule, is broad enough to encompass any FPD devices capable of 
operating with a computer, even if they have the ability to display signals from products other than 
computers.   With respect to Attachment B, there is nothing in this language that says that the FPD 
devices must be "exclusively" or "solely" for the computer.   
33. The EC attempts to graft a restrictive clause onto the language of the Attachment B 
commitment by referring to restrictive language in  Attachment B relating to cathode-ray tube (CRT) 
"monitors". But a CRT monitor is a different product from FPD devices; the former is an analogue 
device using CRT technology while th e latter is a digital device with a thinner profile.  If the language 
on CRT monitors demonstrates anything, it demonstrat es that when the drafters of the language in 
Attachment B wanted to restrict a product under th e agreement to products used exclusively with a 
computer, they were fully aware how to do so.  Jap an also would like to point out that the note on WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-14 
  
  "monitors" excludes only "televisions".  The EC's  assertion that the note also excludes "video 
monitors" is without foundation.   
34. The ordinary meaning of the language in Attachment A, as incorporated into the EC 
Schedule, is also broad and encompassing like th e language in Attachment B.  Attachment A 
provides, in subheading 8471.60, for duty free treatment for "input or output units" of a computer.  There is no doubt that FPD devices that have a digita l-video interface that permits them to display 
signals from a computer are "output units" of a computer. 
35. The EC cites, as part of its "context" for Attachment B, one part of the HSEN that it claims 
requires that FPD devices under heading 84.71 be exclusively used with computers.
  But the EC itself 
admits that the HSEN themselves are of limited valu e, and that if the HSEN contradicts the language 
of an HS heading  or Chapter Note, the heading or Ch apter Note prevails.  But it is not at all clear that 
the HSEN cited by the EC restricts the meaning of  heading 84.71 in the way the EC claims.  The 
HSEN does not exclude all non-computer display func tions from display units that otherwise display 
computer signals.   
36. The EC also looks to Note 5 of Chapter 84 of  HS96 to support its positions.  That Note has 
two paragraphs, (B) and (C), wh ich relate to FPD devices.  The EC does not directly address 
paragraph (C), which applies to "separately pr esented units" although that paragraph on its face 
requires that FPD devices that are output units "of" computers should be classified under heading 84.71, and hence free of duty.   
37. Instead, the EC looks to Note 5 (B), which a pplies to units that are imported as parts of a 
"system".  Even that paragraph, however, only requir es units to be "solely or principally" used for 
computers in paragraph (B)(a).  Here, the EC acknowledges, in light of the ECJ's decision in the Kamino  case, that its measures are inconsistent with th e language of Attachment A incorporated in its 
Schedule of Concessions and agrees to "review" the re gulations further.  This Panel must make clear 
that the EC's measures are inconsistent with th e EC's obligations under its Schedule of Concessions 
and recommend the EC to bring its measures into compliance with those obligations.   
38. Japan's reading of the language of the concessions  is, moreover, consistent with the object and 
purpose of the WTO Agreements and the GATT 1994.   
IV. EC MEASURES CONCERNING SET TOP BOXES WITH A COMMUNICATION 
FUNCTION ARE INCONSISTENT WITH EC OBLIGATIONS UNDER 
ARTICLE II:1(A) AND II:1(B) OF GATT 1994 
39. Please allow us to reiterate that the language in the EC tariff concessions is dispositive to this 
dispute.  This language requires that all STBs wh ich have a communication function be granted duty-
free treatment, wherever  classified.  The broad ordi nary meanings of the phrase "set top boxes which 
have a communication function" c onfirm this interpretation.  
40. The context of the phrase confirms that th e EC's concessions include all STBs with a 
communication function.  An examination of other devices covered in Attachment B, as incorporated 
in the EC Schedule, shows that the drafters provide d clear statements where they intended to limit the 
functions of an apparatus; no such limita tions exist with regard to STBs.   
41. Finally, the object and purpose of the WTO Agreements are best served by continued duty-
free treatment of STBs with a communications function.      WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-15 
  
 ANNEX B-3 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION  
BY JAPAN 
 
I. FOR ALL OF THE PRODUCTS AT ISSUE, THE PANEL SHOULD BEAR IN MIND 
KEY INTERPRETATIVE PRINCIPLES 
A. T
HE CENTRAL IMPORTANCE OF TH E LANGUAGE OF THE CONCESSION , INTERPRETED IN 
ACCORDANCE WITH THE VIENNA CONVENTION  
1. Japan firmly believes that recognizing this dispute as a question of the proper scope of tariff 
concessions – and framing the analysis in that wa y – is very important.  The key distinction is 
recognizing the central role of the language  of the concession itself.     
2. The question for the Panel's consideration rema ins whether the products at issue fall within 
the scope of the relevant EC Schedule of Concessi ons.  The Panel must examine the language of the 
concession and decide on the meaning of that langua ge, considering the ordinary meaning read in 
context and in light of the object and purpose of the treaty in accordance with the Vienna Convention 
of the Laws of Treaties (hereinafter "Vienna Convention" ).  In course of this examination, first, the 
focus must be on the language, and the product at issu e must be tested against that language.  Second, 
the focus must be on the language used in the c oncession itself.  Third, the focus must be on the 
meaning of the language in both its ordinary sense fro m standard usage and ordinary dictionaries, but 
also its technology sense from usage in a technolo gy context and from technology dictionaries.  
Fourth, context matters a great deal, but all context is not equal: for example, HS rule that speaks 
directly to the meaning of language used in a heading would have more interpretative weight, 
however, the HS rule that does not so would have l ess interpretative weight.  Finally, the object and 
purpose of the WTO Agreements  and the General Agreement on Tariffs and Trade 1994  
("GATT 1994") reinforces Japan's interpretation based  on the ordinary meaning of the language of the 
concession.  
B. THE HS HAS INTERPRETATIVE RELEVANCE , BUT ONLY TO THE EXTENT IT HELPS CLARIFY THE 
MEANING OF THE TEXT OF THE C ONCESSIONS MADE PURSUANT TO ATTACHMENT A 
3. The HS has interpretative relevance in this di spute.  The interpretative relevance, however, 
will vary depending on the particular item from the HS being considered, and for what purpose it is 
being considered.  First, HS materials that spea k directly to the meaning of the language of a 
concession – HS section and chapter notes addressing the language of the concessions as well as HSENs addressing the language – are highly relevant.  That being said, such HS materials, no matter 
how direct, cannot override the text of the language in the concession itself.  
4. Second, HS materials that do not speak directly  to the meaning of the language in a specific 
heading, or even a range of headings, but only provide guidance for how to pick between two competing headings, have much less relevance.  Th ird, the relevance of the HS materials extends only 
to concessions that relied upon the HS framework; ac cordingly, the HS does not provide any context 
for the language made pursuant to Attachment B in this dispute.     WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-16 
  
 C. T
HE ITA  HAS INTERPRETATIVE RELEVANCE , BUT ONLY TO THE EXTENT IT HELPS CLARIFY 
THE MEANING OF THE TEXT OF THE CONCESSIONS AT ISSUE  
5. The EC has tried to argue that the tariff c oncessions negotiated through the ITA must be 
narrow, and the parties must have intended to add ne w products later.  Yet, the ITA is not treaty text 
for the purpose of interpreting the EC concessions a nd although it could be re levant as context under 
the Vienna Convention , such context is only relevant to the ex tent it helps interpret the language of the 
concessions at issue.   
6. The EC argues that the Panel must consider  the products at issue with reference to 
paragraph 3 of the ITA Annex, which expresses th e expectation for future negotiations.  Japan 
believes that paragraph 3 is largely irrelevant to the present dispute.  Paragraph 3 of the ITA simply 
states the obvious thing that parties to the ITA recogni zed in general terms that they might have future 
negotiations.   
D. THE EXPECTATIONS OF THE PARTIES ARE I RRELEVANT TO INTERPRETING THE PROPER SCOPE 
OF THE TARIFF CONCESSIONS AT ISSUE  
7. The EC's expectations at the time of the con cessions serve no interpretive purpose.  First, the 
Appellate Body has made clear that subjective expect ations are irrelevant to interpreting the meaning 
of a tariff concession, and that what matters is  the language of the concession and the objective 
characteristics of the product at issue.1  Second, the EC repeatedly turns improved versions of existing 
products into "new" and "unforeseen " products, when in fact the pr oducts, properly understood, were 
neither new nor unforeseen.   
E. THE LANGUAGE OF A CONCESSION WILL OFTEN  COVER A PRODUCT REGARDLESS OF THE 
TECHNOLOGICAL DEVELOPMENTS THAT MAY OCCUR REGARDING THAT PRODUCT  
8. The EC devoted considerable attention to explain the technological development of the 
products at issue, a point that has little relevance to the actual dispute.  The ob jective characteristics of 
the products, not their evolution over time , thus remain the key considerations. 
9. The EC argues that certain products may cro ss into two headings, or may even "cease to 
exist" and may be replaced by a new product.  But the EC makes two legal errors.  First, the EC 
assumes that the language of the concession no l onger applies when the product evolves.  The 
language of concessions will often have been draf ted specifically to avoid reference to specific 
technologies or specific objective ch aracteristics that might change over time.  Second, whether a 
product "ceases to exist" depends as much on the language of the concession.   
F. NEGOTIATING HISTORY AND THE CLASSIFICATI ON PRACTICE OF CERTAIN MEMBERS HAVE 
LITTLE INTERPRETATIVE R ELEVANCE IN THIS DISPUTE  
10. Japan believes that the Panel should give little if any weight to extraneous information 
provided by the EC not relevant to in terpretation of the concessions at issue.  First, the EC attempts to 
direct the Panel's attention away from the actual langu age of the text of the EC's Schedule, and instead 
towards the negotiating history of the ITA.  Only the language actually included in the final text 
matters, not materials regarding the complex and uncer tain path to create the final text.  Even less 
relevant is the classification practice of certain WTO members.  These materials do not reflect in any way on the agreement made by the WTO Members.   Such classification practices do not rise to the 
                                                     
 
1 Appellate Body Report, EC – Computer Equipment , para. 80.  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-17 
  
 level of "subsequent practice" under Article 31.3 (b) of the Vienna Convention because too few 
countries are involved and that practice is not consistent. 
II. THE EC MEASURES CONCERNING MULTIFUNCTIONAL DIGITAL MACHINES 
ARE INCONSISTENT WITH EC OBLIGATIONS UNDER ARTICLES II:1(A) AND 
II:1(B) OF THE GATT 1994 
A. T
HE PRODUCTS AND MEASURES AT ISSUE  
11. At the outset, we note that the EC has not raised any objections to our arguments about the 
definition of the products at issue with respect to MFMs.  We also note there is no major dispute 
among the parties on the measures and tariff concessions  at issue.  The EC has argued that only the 
current version of the CCT is at issue in this disp ute.  Yet, these prior measures still have effect and 
unless and until these measures are formally withdrawn, Jap an considers them still to be in effect for 
purposes of this WTO dispute.  Even their repeal  will not alone cure the WTO inconsistency of 
imposing duties on MFMs that should be duty free.   
B. THE EC LARGELY IGNORES THE ORDINARY MEANING OF THE LANGUAGE OF THE 
CONCESSIONS AT ISSUE IN THIS DISPUTE , THE LANGUAGE OF HEADING 84.71 
12. The EC tries to avoid discussing the language of the concessions at issue, and never really 
explains why MFMs that connect to ADPs do not fall under heading 84.71.  We note the EC has 
provided no examination at all of the ordinary meaning of the key concession at issue here – the concession on heading 84.71.  The ordinary meaning of the language in h eading 84.71 covers MFMs 
with digital connectivity.  As Japan has explaine d at length, MFMs with digital connectivity fall 
squarely within the ordinary meaning of a "unit" of a computer, as an "input or output unit".  Whether one considers the ordinary sense of these words or  the technological sense of these words, they both 
point to the same ordinary meaning.  This language  captures devices such as MFMs that operate in an 
integrated manner with computers, using digital technology to "input" information as well as to 
"output" information.  The EC never real ly challenges this argument because it cannot. 
13. The printing and other functions of MFMs conf irm that they are "output units" of an ADP. 
These objective characteristics of the MFMs allo w one to conclude th at MFMs are properly 
considered to be "output units" under subheading 8471.60 and more specifically "printers" under 
subheading 8471.60.40.  The objective physical char acteristics demonstrate that MFMs are first and 
foremost "printers" that may have other functions.  But these other functions do not change the basic 
physical characteristics that make such devices "printers".  The historical development of MFMs 
further confirms that they are "output units" of  ADPs, and were well known at the time of the 
concessions of heading 84.71.   
C. T
HE CONTEXT PROVIDED BY HEADING 90.09  CONFIRMS THAT DIGITAL COPYING IS NOT A 
FORM OF PHOTOCOPYING , AND THEREFORE CONTRARY TO THE EC ARGUMENTS MFMS 
CANNOT FALL WITHIN THE SCOPE OF HEADING 90.09. 
14. The claim in this dispute is that the concessi on on heading 84.71 covers MFMs.  The EC tries 
to rebut this claim by shifting the focus to head ing 90.09, and tries to turn this dispute into a 
classification question, which it is not.  Nothing in the language or context of heading 90.09 or 
subheading 9009.12 supports the conclusion that MFMs can possibly fall within their scopes.   
15. The EC has misinterpreted the term "photocopying" in heading 90.09.  The use of light in a 
digital copier does not make that device into a "photocopying apparatus".  The EC largely ignores the WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-18 
  
 critical role of the digital file in an MFM, which is  dramatically different than that of the reflected 
light used in an analogue photocopier.  This distinction changes the objective characteristics and operations of the device.  The EC's contextual di stinctions are similarly flawed, as it confuses the 
difference between having an optical system and us ing the optical system to make the copy.  In 
MFMs, the optical system is used to scan and c onvert the document into digital data, which can be 
stored and manipulated.  In photocopiers, the opti cal system creates an image with no purpose other 
than produce a photocopy.  If the photocopy is not cr eated, the light image simply disappears.     
16. The EC has also misinterpreted the detailed  language in subheading 9009.12 and does not pay 
sufficient attention to the precise meaning of the struct ure or language of this heading.  In addition to 
the fact that heading 90.09 does not cover MFMs  as discussed above, the language of subheading 
9009.11 and subheading 9009.12 both exclude MFMs.  MFMs do not reproduce the optical image of 
an original document directly onto the paper, as  required by subheading 9009.11.  Nor do MFMs 
reproduce the optical image onto the paper in the specific manner described in subheading 9009.12, 
namely the "one image" to make "one copy " correspondence that characterizes photocopying 
technology.  The EC further misinterprets as overl y-broad the phrase "indirect process" in subheading 
9009.12.  This phrase refers to a specific tec hnology well known in 1996 that describes analogue 
photocopying, not the broader concept of indirect process.   
17. The HSEN for heading 90.09 confirms the ordina ry meaning of "photocopying" and "indirect 
process" as excluding MFMs with digital conn ectivity.  The HSEN that describes analogue 
photocopying technology was not changed in 1996 – even though digital copying technology was 
then well developed.  "Photocopying" as defined by  the HSEN does not include digital copying; a 
CCD array does not constitute a "light sensitive surf ace."  This phrase refers to a single surface that 
can receive the optical image of an original docum ent, as distinguished from the numerous diodes that 
convert photons of light into electrical impulses in a CCD array.   
D. T
HE OTHER INTERPRETATIVE MATERIALS PRESEN TED BY THE EC EITHER ARE IRRELEVANT 
WITH OR SUPPORT JAPAN 'S INTERPRETATION  
18. The EC offers a number of other arguments for interpreting the language of heading 90.09.  
The classification practice of a handful of member  countries has little interpretative relevance under 
the Vienna Convention , and certainly the EC's own practice – which is what is being challenged in 
this dispute as WTO inconsistent – has no relevan ce.  The Appellate Body has made clear that 
subsequent practice only has interpretive weight when  it is the consistent practice of many countries.2  
Too few countries are involved and the present practice is too inconsistent to satisfy this standard.     
19. The WCO political votes on classification also have no interpretative relevance under the 
Vienna Convention , but the detailed factual and legal discu ssion provided by the WCO Secretariat as 
background for those debates and votes provides a neutral perspective that a panel may find useful 
and persuasive, much as a panel may find th e reasoning of any earlier panel persuasive. 
20. The negotiating history of the ITA also has very little, if any, interpretative weight here.  The 
conditions for invoking  Article 32 of the Vienna Convention  have not been met here.  Even if it were 
considered, the negotiation history provides little suppor t for the EC interpretations in this dispute. 
21. The EC arguments about the HS07 nomenclature actually support Japan's position.  
Subsequent events, such as the changes in the EC Schedule to reflect the changes as part of the HS07 
amendments, cannot change the scope of the conces sion, but may only be used to supplement one's 
                                                      
2 Appellate Body Report, EC – Chicken Cuts , para. 276.  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-19 
  
 understanding of the meaning of the language used in  the original concessions.  The way in which the 
HSEN 07 distinguishes "photocopying" and "digital copy ing" is completely consistent with Japan's 
interpretation of these two phrases, as it simply reinfor ces and makes explicit the distinction.  Further, 
the EC's emphasis on the new phrase "for each copy" misses the mark, because this new language in 
the HSEN simply reflects a concept already inherent  in the language used in subheading 9009.12 of 
the HS06 nomenclature. 
E. E
VEN IF HEADING 90.09  WERE TO COVER DIGITAL COPYING , MFMS WITH COMPUTER 
CONNECTIVITY WOULD STILL FALL WITHIN HEADING 84.71 
22. Even if the Panel were to assume hypothetica lly that heading 90.09 can include the digital 
copying function of MFMs, that does not end the analysis.  MFMs are much more than digital copiers.  The MFMs at issue in this dispute connect either to computers, computer networks, or telephone networks, and are not stand alone devices.  Properly understood, these MFMs fall under heading 
84.71 (or perhaps heading 85.17) ev en if the digital copying function alone might fall under heading 
90.09. 
23. The EC effort to elevate the primacy of the digital copying function and to downplay the 
more fundamental features of MFMs with digital connectivity represents fundamentally flawed treaty 
interpretation for several reasons.  Japan and the ot her complaining parties have provided the ordinary 
meaning of "units thereof" in heading 84.71 and "i nput or output units" in subheading 8471.60.  The 
EC has ignored the ordinary meaning of these key terms.  The ordinary meaning of this language 
covers MFMs with digital connectivity, but is  in no way limited to specific technologies.   
24. In interpreting the ordinary meaning of this language under the above stated assumption, the 
HS can provide an interpretative guidance.  Th e Appellate Body has used the HS materials 
holistically, drawing upon them and giving them weight  based on their connection to the interpretative 
guidance at hand.
3 
25. Note 5(D) of Chapter 84 strongly supports trea ting MFMs with digital connectivity as "output 
units" and "printers" under subheading 8471.60.  An MFM is fundamentally a "printer," and the 
meaning of "printer" is not limited to single functio n printers.  When thinking about the nature of a 
multifunctional device, it is entirely proper to think of that device as being the machine that performs 
the principal function of the device.  This perspec tive fundamentally contradicts the EC interpretation 
that a "printer" can only be a single function printer. 
26. The MFMs are essentially a printer because, as Japan has demonstrated at length, MFMs at 
issue:  (1) are designed and built around a printer unit that allows the outputting of information from 
the computer; (2) have a printer unit that is the largest and most important component;  (3) have a 
printer unit that can operate independently of an y other devices on the MFM; and (4) have a printer 
unit that represents the largest portion of the cost . Under these facts and circumstances – completely 
unaddressed by the EC argument – the MFM is essentially a "printer". 
27. Note 5(B) to Chapter 84 does not change and in fact supports this interpretation.  Even if 
Note 5(B)(a) applies (and we believe that under No te 5(D) it does not apply), MFMs with digital 
connectivity are in fact "of a kind solely or princi pally used" with computers.  The intrinsic qualities 
of MFMs are basically those of a printer, and the existence of an incidental copying function does not 
change this reality.  Moreover, empirical evidence c onfirms that the printing function (and particularly 
                                                      
3 Appellate Body Report, EC – Chicken Cuts , paras. 219-229. WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-20 
  
 the printing and scanning function together) vas tly exceeds the digital copying function of such 
devices. 
28. GIR 3(b) in fact supports this interpretation,  and renders GIR 3(c) unnecessary and irrelevant.  
The "essential character" of the MFM is that of a printer, and the two key components of MFMs – 
printer module and scanner module – both fall under th e "input or output units" of heading 84.71.  It 
make no logical sense to argue that an incidental  feature of combining printing and scanning – the 
additional ability to make digita l copies – somehow trumps the "essential character" of printing and 
somehow gives the MFM a new essential character. 
29. Nothing in the ECJ decision in Kip changes this analysis.  A decision under EC domestic law, 
Kip is of very limited relevance anyway.  That limite d relevance is to confirm that current EC practice 
is deeply flawed, and impermissibly ignores heading 84.71, and to confirm that most MFMs in fact probably fall within the rule of Note 5(B) as "of a ki nd solely or principally used" with computers, as 
specified in Note 5(B)(a). 
F. MFM
S WITH FACSIMILE FUNCTION BUT WITHOUT DIGITAL CONNECTIVITY ARE ALSO 
ENTITLED TO DUTY -FREE TREATMENT UNDER APPLICABLE EC CONCESSIONS . 
30. This dispute involves two categories of MFMs – those that are input/output units of 
computers covered by the EC concession on subh eading 8471.60 and those that are facsimile 
machines covered by the EC concession on s ubheading 8517.21.  The key difference is the 
connectivity to a computer.  As a practical matter, a multifunctional device is either a printer or a 
facsimile machine.   
31. As with MFMs with digital connectivity, the EC never really addresses the language of the 
key concession at issue, the concession on heading 85. 17.  Rather than address the language and its 
ordinary meaning, the EC simply jumps ahead to  assume that both heading 85.17 and heading 90.09 
are equally applicable, and therefore GIR 3(c) must apply. 
32. Yet the premise of this argument – that headin g 90.09 applies at all – is flawed.  The earlier 
arguments that MFMs based on digital technology cannot fall under heading 90.09 apply equally to 
both MFMs with digital connectivity and those wi th a facsimile function.  All MFMs – whether 
connectable to a computer or not – use digita l technology to scan documents and use digital 
technology whether printing computer output or pr inting out an incoming facsimile.  None of these 
MFMs use the "one original-one copy" technology that characterizes analogue photocopying. 
III. THE EC MEASURES CONCERNING FLAT PANEL DISPLAY DEVICES "FOR" 
ITA PRODUCTS ARE INCONSISTENT WITH EC'S OBLIGATIONS UNDER ARTICLES II:1(A) AND II:1(B) OF THE GATT 1994. 
A. T
HE PRODUCTS AND MEASURES AT ISSUE . 
33. The EC has argued that the complaining parties have not sufficiently made a prima facie  case.  
Yet in doing so, the EC is trying to limit this dispute improperly to a case-by-case assessment of 
specific models and import transactions, when the dis pute is really about EC measures that treat many 
flat panel display ("FPD") devices as dutiable produ cts that should be duty-free under the applicable 
EC concessions.  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-21 
  
 34. The Appellate Body stated quite clearly that "Article 6.2 does not explicitly require that the 
products to which the 'specific measur es at issue' apply be identified."
4  Rather, it is sufficient to 
define the type of products that fall within the language of the concession.  Contrary to the EC 
argument, Japan has in fact specifically defined th e product at issue:  "flat panel display devices" 
capable of operating with a computer or some other non-computer ITA products.   
35. Contrary to the EC argument, Japan has identif ied the features that necessarily lead to a WTO 
inconsistency.  Japan has made clear the scope  of the concessions.  Indeed, the scope of the 
concessions on FPD devices made pursuant to Attachme nt A and Attachment B can be defined based 
on the language of those concessions.  The concession pursuant to Attachment A covers those FPD 
devices that qualify as "output units" of computers.  The concession pursuant to Attachment B covers those FPD devices that are capable of operating with  any ITA product, which includes those capable 
of operating with a computer.  Japan has also made clear the scope of the FPD devices improperly subject to duties based on the EC measures at issu e.  Having described the scope of the duty-free 
concessions, and having shown that many FPD devices that are in fact properly within the scope of 
the concessions but are being systematically exclude d from duty-free treatment, Japan has made out a 
prima facie  case for its "as such" claim in this dispute.  
36. The EC erroneously argues that the current su spension of duties eliminates the inconsistency 
between its measures and the concessions under th e WTO.  The EC's suspension of duties is 
temporary and conditional; in contrast, the EC's  concessions on FPD devices are neither temporary 
nor conditional.  The violation of Article II of  the GATT 1994 thus remains and has not been 
eliminated. 
B. R
ELATIONSHIP OF THE CONCESSIONS PURSUANT TO ATTACHMENT A AND ATTACHMENT B. 
37. Obligations in tariff concessions made pursuant to the description of products in Attachment 
A and those made pursuant to the description of pr oducts listed in and for Attachment B are legally 
independent of each other, and both must be respected.  
C. CONTRARY TO THE EC ARGUMENT , THE CONCESSIONS PURSUANT TO ATTACHMENT B COVER 
FLAT PANEL DISPLAY DEVICES "FOR" PRODUCTS COVERED BY THE ITA , INCLUDING FLAT 
PANEL DISPLAY DEVICES CAPABLE OF OPERATING WITH A COMPUTER , REGARDLESS OF 
WHETHER THEY CAN RECEIVE A SIGNAL FROM OTHER DEVICES . 
38. The EC tries to narrow the scope of its con cession pursuant to Attachment B and argues that 
the limitations that applied to CRT monitors must  now apply to FPD devices.  Yet the EC cannot 
reconcile this argument with the ordinary meaning of the text of the concession.  The key term is 
"for," and when a FPD device will be deemed to be  for a computer or other ITA products, it should be 
subject to a duty-free treatment.  The EC's interpreta tion of "for" to mean "only for" or "mainly for" 
gives the word a restrictive meaning that has no b asis in the ordinary meaning of the term.     
39. Nor does the EC contextual argument help.  Th e EC draws the incorrect conclusion from the 
concession on CRT monitors, which highlig hts the absence of the very carve-out5 the EC wishes to 
read into the concession on FPD devices made pursuant to Attachment B.  Similarly, the limitation to 
                                                      
4 Appellate Body Report, EC – Computer Equipment , para. 67. 
5 At its heart the EC argument is that because the concession on CRT monitors carved out those 
devices that could receive a signal from other non-ITA products (such as TVs), an d because FPD devices have 
now largely replaced CRT monitors, then the limitations that applied to CRT monitors must now apply to FPD 
devices. See, para. 144 of Japan second written submision. WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-22 
  
 devices "solely or principally" for a certain use in  the concession on "network equipment" pursuant to 
Attachment B, and the use of the word "can" on  "[p]rojection type flat panel display devices" 
reinforces Japan's interpretation of "for" as meani ng any device capable of operating with a computer 
or other ITA product.  Having made these carve-out s and limitations for other products, the absence 
of any such carve out for FPD devices speaks to th e importance about the ordinary meaning of that 
language in context.   
40. Furthermore, the HS materials do not affect this analysis because the HS does not apply to 
concessions made pursuant to Attachment B.   
41. The other EC arguments do not save its flawed interpretation of the concessions.  The Kamino  
decision just underscores the legal errors of the cu rrent EC measures.  Moreover, the EC arguments 
on object and purpose of the WTO Agreements  and GATT 1994 highly serve to the extreme 
unpredictability of the EC approach.  Rather th an focus on the meaning of the language, which is 
stable over time, the EC tries to shift the focu s to the changing products and technologies.  This 
unpredictability in the EC approach is utterly at odds with the object and purpose of the WTO 
Agreements  and GATT 1994. 
D. T
HE CONCESSIONS PURSUANT TO ATTACHMENT A ALSO COVER FLAT PANEL DISPLAY 
DEVICES CAPABLE OF OPERATING WITH A COMP UTER EVEN IF THEY CAN RECEIVE SIGNALS 
FROM OTHER DEVICES .   
42. The language of the concession pursuant to A ttachment A defines a scope, and does not 
include the limiting language the EC tries to graft onto this scope.  The concession provides duty-free 
treatment under heading 84.71 for units "of" AD P machines ("thereof").  As Japan has noted 
throughout its submissions in this case, there is no language of limitation in either heading 84.71 or 
subheading 8471.60 on the use of the term "thereof".  At a minimum, a unit that is principally used with an ADP machine is a unit "of" an ADP m achine, even if it has alternative uses.   
43. Japan believes that the ordinary meaning of  the language of heading 84.71 encompasses FPD 
devices that interface with an ADP machine.  H eading 84.71 covers "units" for computers, and 
subheading 8471.60 specifically cove rs both "input or output units".  These terms have ordinary 
meaning that must be considered in both the dic tionary sense of these words and the technology sense 
of these words.  The EC therefore cannot explain why a device that is principally used with a 
computer but also has additional capabilities is not a "unit" of an ADP machine within the ordinary 
meaning of the language in heading 84.71.   
44. Furthermore, there is no doubt that in the holistic  interpretation of the ordinary meaning of the 
words of a concession, context always needs to be  examined.  Although the EC provided extensive 
citation and recitation of HS materials, the EC overlooks the binding chapter and section notes, and 
instead focuses on the non-binding HSEN.  The problem with this approach is that the EC's reliance 
on the part of the HSEN in question contradicts th e binding Note 5 to Chapter 84, and therefore must 
be rejected.  
45. Japan submits that Note 5(C), which relat es to FPD devices, applies because it discusses 
"separately presented units of an automatic data processing machine."  This paragraph provides the 
broadest possible reading of heading 84.71, as it in cludes any unit "of" an ADP machine.  Note 5(B) 
also provides important contextual guidance here for interpretation of the concessions pursuant to 
Attachment A.  Note 5(B) only requires units to be of a kind "solely or principally" used for 
computers in paragraph (B)(a).  Although the HSEN  cannot override the HS note, the EC relies so 
heavily on one limited portion of the HSEN that it a ppears to interpret the HSEN to prevail over the  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-23 
  
 text of this binding chapter note.  Indeed, this contradiction lead the ECJ in the Kamino case to 
conclude that the EC measures, responsible for classifying FPD devices under subheading 8471.60 
only if they receive signals exclusively from computers, are "in most cases too rigid…."
6   
46. The EC also urges resort to GIR 3(c), observing that in most cases it is impossible to identify 
the principal function of a given monitor.  But GIR 3 does not apply at all if the interpretative 
question can be resolved by reference to the language of  the heading, read in c ontext.  The EC's resort 
to GIR 3 reflects its refusal to consider the ordinary meaning of the language in the heading. 
47. The EC's arguments about object and purpose of the WTO Agreements  and GATT 1994, the 
classification practices of other countries, and the ne gotiating history of the ITA should be rejected for 
the reasons already discussed above. 
IV. THE EC MEASURES CONCERNING SET-TOP BOXES WITH A 
COMMUNICATION FUNCTION ARE INCONSISTENT WITH EC OBLIGATIONS UNDER ARTICLE II:1(A) AND II: 1(B) OF THE GATT 1994  
A. T
HE PRODUCTS AND MEASURES AT ISSUE  
48. The EC seems to believe that identification of a specific category of STBs that has a 
communication function or even the specific mode ls of STBs that have a communication function 
would be necessary.  The EC simply mischaracterizes Japan's claim; this claim is not about the tariff 
treatment of a specific model of STBs, but about a numb er of criteria used by the EC to determine the 
tariff treatment of a category of products, namely  STBs which have a communication function.   
49. The EC claims that the Complainants "fail to explain what constitutes the EC concession 
[with respect to set-top boxes] and where it is provi ded for."  The EC's claim is hardly understandable 
given that Japan has clearly stated that the concessi on is included in the EC Schedule itself and not in 
the ITA.  
50. The EC further claims that the Complainants refer to the "headnote" but do not explain "what 
the headnote means for the rest of the EC Schedule,  including the codes that were notified to WTO."  
The "headnote" is central in the EC Schedule because it is through the headnote that the EC 
committed to grant duty-free treatment to all products  described in or for Attachment B to the ITA, 
wherever the product is classified.    
51. Again, Japan would like to emphasize that it is i rrelevant that in some instances application of 
the challenged measures may lead to a WTO consiste nt outcome.  Indeed, to succeed in an "as such" 
claim, it is sufficient to demonstrate that any aspect  of the criteria set out in the measures that are 
being challenged will necessarily lead to a violati on of the EC's obligations under its Schedule and 
consequently, Article II of the GATT 1994. 
52. The EC claims that "it does not exclude any STBs from duty-free treatment due to the 
presence of a hard disk or other apparatus."  But as stated in the CNEN, the mere presence of a hard 
disk or DVD drive in a STB which has a communicati on function leads to the exclusion of that STB 
from duty-free treatment.    
                                                      
6 EC first written submission, para. 167. WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-24 
  
 B. C
ONTRARY TO THE EC ARGUMENT , THE CONCESSIONS PURSUANT TO ATTACHMENT B COVER 
SET TOP BOXES WHICH HAVE A COMMUNICATION FUNCTION . 
53. The concession concerning STBs that have a co mmunication function has been made by the 
EC in its Schedule.  The ordinary meaning of  the terms of the concession does not imply any 
exclusion from the scope of the concession on STB s which have a communication function merely 
because the STBs at issue have a r ecording or reprod ucing function.  
54. According to the EC, the product covered by the concession cannot assume the existence of 
additional features and technical elements.  Yet, as long as the product meets the description of a "set 
top box which has a communication function," it must receive duty-free treatment, regardless of any 
additional feature or functionalities it may also have.  
55. The EC attempts to draw conclusions from the fact that no CN code was provided under 
headings 85.21 and 85.28, wh ich has an equivalent effect to submitting the tariff lines which define 
the scope of the commitments.  If CN codes were intended to define the scope of the concession, 
however, it would have been unnecessary to include th e headnote that explicitly provides for duty-free 
treatment wherever the product is classified. 
  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-25 
  
 ANNEX B-4 
 
EXECUTIVE SUMMARY OF THE OPENIN G ORAL STATEMENT BY JAPAN  
AT THE SECOND SUBSTANTIVE MEETING 
 
 
I. MULTI-FUNCTIONAL DIGITAL MACHINES 
 
1. MFMs with digital connectivity to computers fall squarely within the scope of the terms 
"units thereof" in heading 84.71, and particularly  the terms "output units" in subheading 8471.60 and 
"printers" in subheading 8471.60.40.  This interp retation results from reading these terms in their 
context, including the language of heading 90.09 and subheading 9009.12, which indicates that MFMs 
do not "photocopy" within the meaning of heading 90.09. 
2. We would like to make a few broader observati ons about the EC arguments on MFMs.  First, 
the EC arguments largely ignore one of the defi ning objective characteristics of the MFMs with 
digital connectivity – their capacity to operate with computers, a capacity that rests on the fact that 
MFMs use digital technology enabling them to i nput and output digital data.  Unlike the analogue 
photocopiers covered by heading 90. 09, MFMs are very much digital devices.  This important 
difference is why the language of heading 84.71 speak s of "units thereof," with the "thereof" linking 
the device back to the computer.   
3. Indeed, the EC argument in the alternative th at MFMs would fall under subheading 8472.90 if 
they are somehow not "photocopying apparatus" just highlights the myopia of the EC argument.  MFMs without computer connectivity and without any facsimile function fall outside heading 84.71 
and into heading 84.72 because such MFMs are not
 capable of operating with computers.  This 
alternative EC argument disregards the capacity of the MFMs at issue to operate with computers, the 
common and critical characteristic of th e products falling within heading 84.71. 
4. Second, the EC arguments largely ignore all of the other objective characteristics of the 
MFMs and instead focus on the single function of "copying".  In doing so, the EC improperly shifts 
the focus from the intrinsic physi cal characteristics of the device – the printer unit and the scanner unit 
– and instead focuses on one of the ways in whic h the device operates.  The Appellate Body has 
stressed the importance of the "objective characteris tics" of the item subject to a tariff concession.  
Copying is not an intrinsic physical characteristic  of MFMs – it is an additional and incidental 
function that results from the combined operation of th e true intrinsic physical characteristics of the 
MFM, the printer unit and the scanner unit. 
5. Third, the EC talks about making its determ inations on a case-by-case basis, but the EC 
measures do not make case-by-case determinati ons.  Subheading 8443.31.10 preserves duty-free 
treatment only for those MFMs with a facsimile func tion and an output speed of 12 pages per minute 
or less.  This use of the 12 page per minute output rule to determine that most if not all MFMs are in fact subject to duties demonstrates the extent to which the EC is not truly interested in making case-
by-case determinations. WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-26 
  
 A. M
EANING OF "PHOTOCOPYING " – MFM S ARE NOT "PHOTOCOPYING APPARATUS " 
1. Heading 90.09 
6. The EC defense has been and continues to be basically that MFMs are in fact "photocopying 
apparatus," and thus are properly subject to du ties under HS96 heading 90.09.  The EC improperly 
stretches the term "photocopying" to cover two very  distinct technologies:  analogue photocopying 
and digital copying.  Even if the function of these two technologies is the same – to make copies – the 
objective characteristics of the devices relying on th ese two technologies are very different, and these 
differences relate specifically to the language of  subheading 9009.12.  A device based on analogue 
photocopying technology does not create digital files, and cannot possibly be an input or output unit 
of a computer.  These technical details – these objec tive characteristics of the devices – are very much 
relevant in light of the language of the tariff concession on subheading 9009.12. 
7. Consider a few examples of these technical details.  An analogue photocopier must make its 
copy immediately from the original paper document, or not at all.  In contrast, an MFM creates a 
digital file from the original paper document, which can be used now, or can be stored for printing out 
later.  Moreover, the reflected light in an analogue photocopier has one use – to make that photocopy at that moment, while the digital file created  in an MFM, in contrast, has myriad uses. 
8. The copying technology is fundamentally different, even if the devices use a similar print 
technology.  The EC acknowledges th at photocopying is the instant repr oduction of an original image.  
The digital copy is not necessarily instant and th e image reproduced by digital copying is not the 
"original" image.  Because a digital copy is produ ced from a digital file, and not just a reflection of 
the original image itself as in photocopying, the or iginal image is artificially  changed or reconstituted 
in order to make it clearer and sharper before be ing printed.  Since an image produced onto a copy 
paper has been artificially changed and reconstitute d before the printing process, it is therefore no 
longer identical to that of the original paper document.  
9. The EC argues that the existence of stand-al one digital copiers supports its argument that 
MFMs are really photocopiers.  Contrary to the EC's argument, the device in Exhibit EC-64 appears 
to be a "black and white laser printer" – a devi ce with computer connectivity and without a scanner – 
and not a stand alone digital copier.  But more f undamentally, stand-alone digital copiers in fact 
highlight the importance for proper tariff classification of the digital connectivity, a key objective characteristic of the MFMs at issue here.  A printe r unit combined with digital connectivity becomes a 
"printer," which is capable of operating with a com puter, and which is covered by heading 84.71 as an 
"output unit".  A scanner unit combined with digita l connectivity becomes a "scanner," which is also 
capable of operating with a computer, and which is al so covered by heading 84.71 as an "input unit".  
It is the digital connectivity that makes these items input and output "units" of a computer.  A combination of such stand-alone devices – the prin ter unit without digital c onnectivity and the scanner 
unit without digital connectivity – can make th em digital copiers, and they cannot fall under 
heading 84.71. But this dispute is not about stand- alone digital copiers, devices that would fall under 
subheading 8472.90 if they do not have any facsimi le capability.  Such devices have very different 
objective characteristics than the MFMs w ith digital connectivity at issue.   
10. The EC has explicitly confirmed that "digital copiers incorporate not just one
, but two  
different optical systems," in paragr aph 114 of its oral statement.  Th is characterization contradicts the 
language of heading 90.09, which says "photocopy apparatus incorporating an optical system."  This 
difference in the number of "optical system(s)" be tween "photocopying apparatu s" and digital copiers 
produces another technological difference in their objective characteristics, which necessarily excludes digital copiers from the scope of heading 90.09.   WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-27 
  
 2. Subheading 9009.12 
11. The language of subheading 9009.12 provides im portant context for the term "photocopying 
apparatus" in heading 90.09.  In the course of interpreting the language of a tariff concession under 
the Vienna Convention, the language of the head ings and subheadings must read holistically. 
12. First, consider the structure of heading 90.09 and how subheading 9009.12 fits within that 
heading.  Heading 90.09 has three categories at the five digit level, only one of which could possibly 
cover the MFMs at issue in this dispute:  Five-d igit subheading 9009.1, which covers "electrostatic 
photocopying apparatus".  The EC has stressed the electrostatic printing technology of MFMs, and 
notes that "other photocopying apparatus" is al so subject to a concession guaranteeing duty-free 
treatment.  The more detailed languages of s ubheadings 9009.11 and 9009.12 refer to specific 
technologies – "direct process" and "indirect process" respectively – and thus serve to describe exhaustively rather than illustratively the scope of "electrostatic photocopying apparatus".  The 
exhaustive nature of these subheadings also make s clear that subheading 9009.12 has no role as a 
"catch-all" category that captures any "photocopying apparatus" using an "el ectrostatic" mechanism, 
other than a "direct process" one.  Since MFMs do not meet either of these definitions set forth in these subheadings, "photocopying" as used in heading 90.09 cannot cover MFMs. 
13. Now let us turn to the language of the EC tariff concession on subheading 9009.12 read in the 
context of the rest of heading 90.09.  Japan's argu ment is not only that the terms "image" and "copy" 
have been used in the singular form, but rather th at the apparatus covered by subheading 9009.12 in 
fact can operate only by reproducing a single image onto a single copy each time, no matter how 
many copies of a document are produced.  Howeve r, digital copiers produce multiple copies from a 
single original image.  In this connection, it shoul d be noted that in the EC's current national tariff 
schedule of HS 2007 CN 8443.31.91 also uses singular and plural forms precisely to match the technology being described:  "[m]achine performing a copying function by scanning the original and 
printing the copies  by means of an electrostatic print engine." 
14. Japan has also noted the meaning of the term "i ntermediate," and the relationship of this term 
to the underlying technology used in analogue photoco pying.  The EC is trying to read the term 
"intermediate" too broadly: the "electrostatic drum " in an MFM may be an intermediate, but it is not 
"the" intermediate in the sense of subheadin g 9009.12.  According to the language of 
subheading 9009.12, indirect electrostatic photocop ying machines must have a single intermediate.  
The EC erroneously cites to the adjectival form of "intermediate," which does not apply here.  The 
noun form of this term refers to "an
 intermediate person or thing" – in other words, a singular 
intermediate.  On the contrary, the digital copyi ng process does not have a single "intermediate" and 
instead requires multiple devices, such as the CCD image sensor in the scanning engine and the laser 
beam in the printing engine, both of which do not exist in the analogue photocopiers. 
15. The EC arguments try to exploit the fact that  MFM printing technology uses an electrostatic 
print engine.  The EC argument, however, treats the use of electrostatic print engine as sufficient for 
copying devices to be "photocopying apparatus".  The EC conveniently disregards the text of the tariff 
concession on subheading 9009.12, which explicitly recognizes only one "intermediate" in the 
process. 
16. Moreover, the EC argument confuses the distin ction between how the image is being "copied" 
and how it is being printed.  As stated before (i n paragraph 8), digital copying does not reproduce the 
original image onto the copy, and is therefore not c onsistent with the language  of subheading 9009.12.  
There is no process to reconstitute and improve the or iginal image as part of the "indirect process 
electrostatic photocopying," which confirms that  digital copying involves different objective WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-28 
  
 characteristics from "photocopying".  Lastly, th e EC accuses Japan of reading words into 
subheading 9009.12, but it is the EC that mistakenly reads this language in isolation.  One must read 
"photocopying" in heading 90.09 and "indirect pro cess" in subheading 9009.12 together holistically, 
not in isolation.   
3. HSEN 
17. The Harmonized System Explanatory Note (" HSEN") for heading 90.09 confirms that 
"photocopying" does not include digital copying.  The HSEN is relevant for understanding the 
ordinary meaning of the language used in heading 90.09 and subheading 9009.12.  First, the EC 
apparently has no response to our argument that since the language of this HSEN was originally 
drafted, it had not been changed until the HS 2007 text newly created subheading 8443.31 on MFMs at issue and abolished the entire heading 90.09.   
18. Second, the HSEN confirms Japan's reading of "reproducing" in the sense of "projecting" the 
original image, and Japan's reading of "an in termediate" as meaning the photosensitive "drum (or 
plate)".  The language of this HSEN does not cont radict the language of subheading 9009.12 and can 
be used as important contextual guidance for what the language of subheading 9009.12 means.  Third, 
the HSEN quite specifically explains that "the opti cal image is projected onto a drum (or plate.)"  
Thus the HSEN gives very specific contextual guida nce for exactly what "via an intermediate" in 
subheading 9009.12 really means.  This meaning is completely consistent with Japan's interpretation 
of subheading 9009.12. 
4. Classification Practice 
19. As confirmed by Appellate Body in EC – Chicken Cuts , subsequent practice should be 
examined based only on the consistent practice of  a wide range of WTO Members.  The EC only 
addresses the "practice" of a handful of countries,  only shows that supposed practice over a narrow 
period of time, and admits the "practice" has not been consistent. 
20. Indeed, the EC has drawn an erroneous infere nce concerning Japan's classification practice 
from Japan's informal proposal to the ITA Commi ttee for the ITA II negotiation in 1997.  This 
proposal was submitted not to clarify Japan's duty treatment of MFMs, but particularly to address the EC's imposition of duties on MFMs.  Thus, it is not at all suggestive of any inference regarding the 
customs practice on MFMs at that time.  Also , the EC has seriously mischaracterized US 
classification practice.  Indeed, even the EC's own practice has been inconsistent, as illustrated by the 
EC BTI's issued in 1996 that classified MFMs unde r heading 84.71.  Such classification "practices" 
cannot be given any interpretative significance under the Vienna Convention .  We also note that the 
EC cites a Japanese negotiating proposal on ITA II in 1997 as somehow being relevant here.  As a 
legal matter, this proposal has no significance for the interpretation of the treat y at issue in accordance 
with the Vienna Convention . 
5. Conclusions about "photocopying" 
21. Japan believes its arguments stand on their own merit, and should convince the panel.  But 
Japan also believes the panel can and should consid er the neutral discussion of these issues by the 
WCO Secretariat.  First, we recognize the WCO Secretariat materials are not binding, but the 
argument and logic are quite persuasive and can be considered.  Second, the EC criticism is largely 
that the WCO Secretariat adopted too static a vi ew of the language of the HSEN for heading 90.09 
and thus did not allow for subsequent technological  developments, which is a rather ironic argument 
given the EC position on other produc ts that have undergone technolog ical development.  Third, the  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-29 
  
 EC criticism is largely that the WCO Secretariat put too much emphasis on the HSEN for 
heading 90.09 and not enough on the language of head ing 90.09 itself.  Yet as we have shown above, 
from the viewpoint of tariff concessions, the langua ge of heading 90.09 and subheading 9009.12 are 
in fact consistent with and supporte d by the HSEN for heading 90.09.  
B. M
EANING OF "OUTPUT UNIT " – MFM S ARE "OUTPUT UNITS " 
22. Having clarified the limited meaning of the term  "photocopying," this discussion brings us 
back to the key issue for this di spute – the scope of the concession the EC granted on products within 
the scope of heading 84.71.  The starting point mu st therefore be the language of the concession at 
issue.  Other treaty text – in other words, the lang uage of other concessions – must also be considered 
as context.  Contrary to the EC argument, Japan does not deny that HS interpretative materials are 
context under the Vienna Convention for purposes of interpreting this concession.  Chapter Notes, as 
part of the overall context, can inform an inte rpretation based on the ordinary meaning of the 
concession.  But Chapter Notes cannot require any in terpretation that disregards the text of the 
concession itself. 
23. Contrary to the EC focus on Note 5(B) in isol ation, Japan considers all of Note 5 in its 
interpretation.  In particular, Note 5(D) makes clea r that the rule of Note 5(B)(a) – on which the EC 
relies so heavily – simply does not apply to those " output units" that are "printers" within the meaning 
of CN 8471.60.40 in the EC's Schedule. 
24. The EC insists that MFMs cannot be "printers" because MFMs are multifunctional.  Here, we 
simply note that the EC has largely ignored th e factual arguments Japan has presented that MFMs 
have the objective characteristics that make them ess entially a "printer" with some additional features.  
The EC has also ignored the contex tual guidance provided by Note 3 to Section XVI that confirms a 
multifunctional machine should be treated as a "mac hine which performs the principal function" – 
which, for MFMs, is being used as a "printer." 
25. The EC asserts the Complainants have provi ded no evidence on the principal function of 
MFMs.  At the outset, we note that whether a product  falls within the scope of a tariff concession is 
determined by the objective characteristics of the product.  Further, Japan has provided evidence 
demonstrating that the EC argument fails on two diffe rent levels.  First, if the printing unit is the 
central component of an MFM and if printing is th e principal function, then the MFMs can and should 
be deemed to be "printers".  Second, even if MFMs ar e not "printers," they do in fact meet the rule of 
Note 5(B)(a).  The principal use is as a "printer," which is an "output unit" for use with a computer.  
Another very common use of MFMs is as a scanner, which is an "input unit" also for use with a 
computer.  MFMs with digital connectivity are thus in fact for use "solely or principally" in a computer system, and thus meet the requirement of  Note 5(B)(a).  In the end, however, the Panel 
should keep in mind that Note 5 to Chapter 84 is not treaty text. 
26. Ignoring all of these arguments, the EC simply stresses the copying function of MFMs.  The 
tariff concession focuses on the objec tive characteristics of the device.  The fact that the printer unit 
and scanner unit can also be used together to provid e an additional and incidental function of digital 
copying does not change the objec tive characteristics of the MFM. 
C. MFM
S WITH FACSIMILE FUNCTION BUT WITHOUT DIGITAL CONNECTIVITY  
27. For MFMs with facsimile function but without digital connectivity, the printer unit and the 
scanner unit are both essential for the device to operate  as a facsimile machine.  The fact that the WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-30 
  
 printer unit and scanner unit can also be used togeth er to create the additional and incidental function 
of digital copying does not change the objective ch aracteristics of the MFM as a facsimile machine. 
28. The EC relies heavily on classification practice, but ignores the implications of the 
inconsistent practice within a country such as the United States.  Such inconsistent practice by a 
handful of WTO Members hardly provides strong support for the EC position.  Further, the EC argument about the need to use Note 3 to Sec tion XVI to pick between subheading 8517.21 and 
subheading 8472.90 reflects a continuing misunderstanding about the objective characteristics of these MFMs that are the subject of the relevant concessions.  For an MFM that cannot connect to a 
computer but that does have a facsimile function, the printer unit and the scanner unit become key 
components that are essential for the devi ce to operate as a facsimile machine. 
29. Besides, the EC overlooks the fact that subheading 8472.90 is a residual line for general 
office machines, compared to subheading 8517.21 wh ich is specific line for facsimile machines.  
MFMs with facsimile function but without digital connectivity have the specific characteristic as a 
facsimile machine. 
II. FLAT PANEL DISPLAYS 
A. T
HE RELATIONSHIP BETWEEN THE TWO CONCESSIONS AT ISSUE  
30. Unlike MFMs, which are subject only to the c oncession pursuant to Attachment A, FPDs are 
subject to two distinct concessions – those pursuan t to Attachment A and also those pursuant to 
Attachment B.  The concession pursuant to Attachme nt A applies to those products that fall within 
specific HS codes.  The concession pursuant to Att achment B serves the very different function of 
capturing products that could not be completely described by existing HS codes, and therefore 
required a narrative explanation to ensure that the full scope of the product w ould be covered by the 
duty-free concession.  Each concession must be considered.  
31. The concession pursuant to Attachment A c overs only FPDs that are "output units" of 
computers.  The notion of an "output unit" being "of" a computer in the language of heading 84.71 
and subheading 8471.60 must be considered against the context of Note 5(B) to Chapter 84, which 
explains that a "unit" is part of a computer system  if that unit is "solely or principally" used in a 
computer system. 
32. The concession pursuant to Attachment B covers FPDs "for" computers or "for" other ITA 
products.  Unlike the concession pursuant to Attach ment A, the concession expressly includes FPDs 
for products other than computers and includes any FPD that is "for" a computer or some other ITA 
products.  This term "for" is to be read outside th e context of Note 5(B) because Note 5 relates only to 
the language of heading 84.71 and does not relate to the narrative descriptions provided in those 
concession pursuant to Attachment B.  This differen ce reinforces the need to interpret the term "for" 
as it is, particularly since the "sole or principal" use test set forth in Note 5(B) does not apply.  Japan 
has argued that the term "for" in the Attachment  B concession read in its proper context means 
"capable of operating with."  Other concessions th at do have other criteria or limitations underscore 
the absence of any other criteria or limitation in  the concession on FPDs pursuant to Attachment B. 
33. Complainants are not trying to read the illust rative CN headings out of the EC concession – 
they are included as part of a proper holistic interpre tation of treaty text.  Complainants simply reject 
the EC argument that these CN headings somehow narrow or exhaust the narrative description 
provided in the EC concessions.  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-31 
  
 34. The EC's argument about the scope of the "safety net" concession tries improperly to 
introduce some external concept to limit the scope of the concession pursuant to Attachment B.  The 
phrase in the headnote to the concession pursuant to Attachment B in the EC's Schedule –"to the 
extent not specifically provided for in this Sche dule" – indicates that the scope of the concessions 
pursuant to Attachment B covers the products speci fied by the narrative description, even if those 
products are not specified as duty-free items anywhere else in the whole EC's Schedule. 
B. P
RIMA FACIE CASE 
35. The EC insistence that the claims are somehow  still vague flows from their erroneous view 
that complainants must identify all  models of the products that are improperly subject to duties.  We 
need not do so.  Once we have established that some products are necessarily subject to duties 
improperly, we have made out our case.  The complainants have two separate claims for FPDs – a claim based on the concession pursuant to the Att achment A on subheading 8471.60, and a separate 
claim based on the concession pursuant to Attachment B for "flat panel display devices". 
C. P
RODUCTS AT ISSUE  
36. The EC protests that it does not know what products are subject to this dispute.  Japan and the 
other complainants have been quite clear on this point from the beginning of this dispute, and the 
panel need only confirm that the EC has improperly imposed duties on some  FPDs that are in fact 
within the scope of the duty-free concessions. 
37. The EC also protests that products classifiable  under some other heading might fall within 
this definition.  But how products may be "classifi ed" under HS rules does not determine the issue in a 
dispute over tariff concessions.  By design, the c oncession pursuant to Attachment B includes certain 
FPDs that do not fall within the concession pursuant to Attachment A.  This overlap does not render 
the concession pursuant to Attachment A irrelevant , since heading 84.71 covers a wide variety of 
"output units," and not just FPDs. 
38. The EC seems to argue Japan's view of the sc ope of concessions pursuant to Attachment B is 
too broad and includes non-ITA products.  But this argument exaggerates Japan's view.  The concept 
of "capable of operating with a computer" means more than whether the device can merely receive 
signals from computers.  This phrase means that the FPDs "for" personal computers, for example, must be designed to be used with computers, th ereby providing an acceptable level of operational 
quality.  Even with a DVI connector installed, FPD monitors that can receive and display television 
signals are not necessarily going to be "for" a computer.  Further, it might be less likely that FPD 
monitors with a HDMI connector would be capab le of operating with a computer or other ITA 
products, because the HDMI connector is designed prim arily for audio-visual data.  Nevertheless, the 
type of connector is not decisive; it is the capabilities of the device that determines whether a 
particular FPD monitor falls within the scope of the concession or not. 
39. The EC is classifying as dutiable products that in  fact fall within the scope of the concessions 
pursuant to Attachment B, simply because the EC th inks these products should be classified in some 
other headings.  The EC measures in dispute deem  the capability of receiving data from any source 
other than computers to be sufficient to establish that FPDs are dutiable products not covered by the 
EC concessions.  The EC ignores other factors that might demonstrate that th e FPDs at issue are in 
fact fully capable of operating with a computer, and thus entitled to duty-free treatment, and instead 
subjects the FPDs at issue to duties. WT/DS375/R 
WT/DS376/R WT/DS377/R 
Page B-32 
  
 40. If the EC changes its current WTO inconsistent  criteria, and introduces new criteria, those 
new criteria may be addressed in compliance panels .  In the meantime, the Panel can and should 
decide the obvious WTO inconsistencies at issue. 
D. M
EASURES AT ISSUE  
41. The EC measures act as if there were only the concessions pursuant to Attachment A, and 
then read that single concession more narrowly than  it should be read.  The EC takes the language 
from Note 5(B) (a) to Chapter 84 regarding a FPD at i ssue as a "unit" of a computer if it is "solely or 
principally" used in a computer system and then  strips away the word "principally" without any 
proper legal basis. Therefore, the EC measure is inconsistent with concess ions covered by either 
Attachment A or Attachment B. 
42. The EC measures also allow other features to tr ump the ability of FPDs to be operating with a 
computer.  A product that would otherwise be duty-free somehow loses its duty-free status if it adds some additional capability.  But that is not how the wo rding of the concessions works.  If the FPD is 
capable of operating with a computer (or some othe r ITA product), it is covered either by Attachment 
A or Attachment B, or perhaps both. 
1. The current CN 
43. Let us consider each of the EC measures in turn.  Read in isolation, the current CN2009 
seems to reflect the concession pursuant to Attach ment A since there is no duty on CN 8528.51.00 for 
monitors other than cathode-ray tube monitors, of a kind solely or principally used in an automatic 
data processing system of heading 84.71.  But as the EC itself acknowledges, the CNEN to CN 
8528.51.00 narrows the scope of this  tariff line in a way that is inconsistent with the concession 
pursuant to Attachment A. 
44. Moreover with regard to the FPDs at issue, the current CN does not reflect the concession 
pursuant to Attachment B, which includes products beyond those used "solely or principally" in a 
computer system.  This is particularly the case when  the current CN is read together with the CNEN 
and the EC Regulations.  The EC stresses "for eseeability" and states that it did not foresee this 
outcome.  However, the legal issue here is the scope of the concession as it is written.  The EC 
measure does not even try to identify or delineate which FPDs are "for" ITA products, other than FPDs that are "solely or principally" used in a computer system.  Once Japan has explained clearly 
that some FPD monitors capable of operating with  a computer or other ITA products are covered by 
any dutiable CN, then Jap an has established its prima facie  case. 
2. CNEN ( Kamino case ) 
45. Let us now turn to the CNEN that provides concre te rules for interpretation of the CN at issue 
here.  The EC tries to defend this highly problem atic measure, the CNEN, by arguing "this criterion 
under the CNEN cannot today be considered as an y more probative than others set out in the 
applicable Explanatory Notes."
1  The EC apparently believes the decision by the ECJ in Kamino  
somehow saves its measure. We strongly disagree. First, we note that the Kamino  case, a judgment 
delivered after the establishment of this Panel, does not have any direct relevance for this case.  
Second, Japan is not aware of any change in EC practice after Kamino , nor has the EC provided 
documentation of any change in its practice. 
                                                      
1 EC second written submission, para. 60.  WT/DS375/R 
 WT/DS376/R 
 WT/DS377/R 
 Page B-33 
  
 3. Classification Regulations 
46. The EC tries to defend these measures by saying they are under review.
  Yet these regulations 
remain in effect until they are formally repealed .  This Panel can and should find them to be WTO 
inconsistent. 
III. SET TOP BOXES 
47. Regardless of how large the capacity of such a storage device installed in STBs might be, 
such storage capacity is fully covered by the "co mmunication function" of the device.  Consider, for 
example, the e-mail box.  The e-mail account needs a significant storage capacity for effective 
functioning.  This significant storage function is thus needed for the communication purpose of the 
STB, because a recipient would fail to receive e-mails without this storage function in the e-mail system.  Japan is aware that the storage capacity enab les such STBs to store recorded video.  Yet as 
the EC concedes, the devices are still STBs which have a communication function.  These devices are entitled to duty-free treatment wherever classified. 
 
 
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