WT/DS343/R 
 Page B-1 
 
 
  ANNEX B 
 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN SUBMISSION  
OF THE PARTIES 
 
 
CONTENTS PAGE 
Annex B-1 Executive Summary of the Second Written Submission of the  
United States B-2 
Annex B-2 Executive Summary of the Second Written Submission of Thailand B-10 
 WT/DS343/R 
Page B-2 
 
 
  ANNEX B - 1 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF  
THE UNITED STATES 
 
(9 July 2007) 
 
1. The Additional Bond Amount Constitutes "R easonable Security" Within the Meaning 
of the Ad Note to GATT 1994 Articles VI:2 and VI:3. 
1. A central question before this Panel is wh ether any provisions of the Agreement on 
Implementation of Article VI of the General Ag reement on Tariffs and Trade 1994 ("AD Agreement") 
or the GATT 1994 govern a security requirement for the payment of an anti-dumping duty assessed 
after an order has been imposed, such as that contemplated by the enhanced bond directive.  As the 
United States has demonstrated in its previous subm issions, the Ad Note to Article VI is the sole 
provision that specifically limits security requirements of this type.  
2. As the United States has explained in previous submissions, the "final determination of the 
facts" in the Ad Note refers to the determ ination of the facts with respect to the " payment  of anti-
dumping or countervailing duty."  In the context of a retrospective duty assessment system, the 
"determination of the final liability for payment of anti-dumping duties", referenced in Article 9.3.1, 
must be made in order for the facts with respect to payment to be determined.  Thus, the "final 
determination of the facts" in the Ad Note follows  an assessment review as described in Article 9.3.1. 
3. This interpretation is consistent with the imme diate context in which the phrase appears.  The 
Ad Note refers to "security for payment" and "oth er cases in customs administration" – in other cases 
in customs administration, security for payment of duties is required upon entry when the actual 
amount of liability is not known, and this security  is required until the duties are finally assessed and 
paid.  It is also consistent with  GATT 1994 Article VI:2 and 3, the provisions to which the Ad Note is 
appended, and the AD Agreement.  GATT 1994 Arti cle VI:2 and 3 address "levy[ing]" anti-dumping 
and countervailing duties.  In the AD Agreement, the term  "levy" refers to "the definitive or final legal 
assessment or collection of a duty or tax."  The "fin al determination" referenc ed in the Ad Note thus 
pertains to security pending final legal assessment of duties – an event that in a retrospective duty 
assessment system does not normally occur until after the completion of the assessment review. 
4. The context provided by the AD Agreement also s upports this interpretation of the Ad Note.  
AD Agreement  Article 9.2 allows Members to collect anti-dumping duties "in the appropriate 
amounts in each case."  Article 9.3 states that "[t]he amount of the anti-dumping duty shall not exceed the margin of dumping as established under Artic le 2."  The "margin of dumping" established 
following the assessment review described in Article  9.3.1 is a margin of dumping "as established 
under Article 2" – meaning, a margin of dum ping calculated in accordance with the general 
requirements of Article 2.  Thailand is thus in correct in asserting that this means a "margin of 
dumping" from the investigation proceeding.  Th e cash deposit and bond secure payment of this 
amount of duty and ensure that the United States is able to collect duties in that amount, in accordance 
with Article 9.2.  Article 9.3.1 additionally mak es clear that "final" liability for payment of anti-
dumping duties occurs at the end of an assessment period – the terminology used therein coincides 
with the reference to the "final" determination of th e facts with respect to "payment" in the Ad Note, 
further supporting the view that the Ad Note addresses security pending completion of assessment. 
5. Finally, it should be noted that, as the United States explained in its Responses to Panel 
Questions, this interpretation is c onsistent with the manner in which the United States administered its 
anti-dumping law at the time the Ad Note was negot iated.  The Anti-Dumping Act, 1921, established 
a retrospective duty assessment system, whereby assessment or appraisement of anti-dumping duties  WT/DS343/R 
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  was withheld pending the determination of whet her and to what extent dumping had occurred on 
individual transactions subject to an anti-dumping "finding."  The Anti-Dumping Act, 1921, also 
included provisions for security pending final asse ssment, which prior to enactment of the Trade 
Agreements Act of 1979 was usually required in the form of "a bond equal to the estimated value of 
the merchandise." 
6. In an effort to demonstrate that a provision othe r than the Ad Note, and a standard other than 
"reasonable security", applies for purposes of determining whether the additional bond amounts 
required pursuant to the enhanced bond directive are inconsistent with US WTO obligations, Thailand 
offers a reading of both the Ad Note and the AD Agreement  that is at odds with their plain language 
and irreconcilable with the context in which the relevant language appears. 
7. First, with respect to the Ad Note, Thailand argues that dumping cannot be "suspected" after 
an anti-dumping duty order is imposed following the completion of the investigation, and thus no case 
of suspected dumping can exist at that time.  Th is interpretation does not, however, does not conform 
to the ordinary meaning of the term "suspected" or the context in which the term appears.  In the Ad 
Note, "suspected" dumping refers to dumping that is "imagined to be possible or likely."  The 
immediate context provides that secu rity in such a case may be required for "payment" "pending final 
determination of the facts."  In a retrospective system of duty assessment, whether and in what amount duties are owed on a given entry is no t known until completion of assessment, and thus 
dumping – in the context of payment – is "suspect ed" during the intervening time.  As Thailand 
acknowledges, "in a situation where the exporter's overall assessment rate is zero, no anti-dumping 
duties may be assessed on individual shipments ... ."  Dumping (if any) with respect to a given set of 
entries  is not "known" until assessment of those entries is completed. 
8. Thailand attempts to rely on the phrase "exist ence of dumping," which is nowhere used in the 
Ad Note, to support its assertion that the Ad Note does not govern security after issuance of an anti-
dumping duty order in an investigation.  Thailand, for example, incorrectly reads US anti-dumping 
laws at the time the Ad Note was negotiated, and asser ts that the "'final determination of the facts' 
refers to the question of whether dumping and in jury exist." However, as the United States has 
explained, while the "existence of dumping" is c onfirmed at the conclusion of the investigation, 
whether a given entry has been dumped, and thus whether duties are owed, is not determined until 
completion of the assessment review.  The "final determ ination of the facts" is used in the Ad Note in 
connection with the "payment of anti-dumping or  countervailing duty," which in a retrospective 
system is not established at the conclusion of the investigation. 
9. To read the Ad Note and the AD Agreement as Thailand  suggests would lead to an absurd 
result:  it would mean that "security for paymen t of anti-dumping and countervailing duty" must be 
released after completion of an investigation (the mo ment when it has been established that it is likely 
that some duties will be owed) – and before the am ount of duties owed is finally established and those 
duties have in fact been paid.  The United Stat es is not aware of any customs authority that 
administers security requirements in this manner. 
10. Furthermore, Thailand  offers an interpretation of the Ad Note in relation to the AD 
Agreement that is inconsistent with the terms of th e AD Agreement and fails to give the Ad Note any 
meaning or legal effect, contrary to the relationship between the GATT 1994 and other WTO 
agreements contemplated by the Marrakesh Agre ement Establishing the World Trade Organization 
("WTO Agreement").  As a threshold matter, the GATT 1994, including the Ad Note to Article VI, is 
an "integral part" of the WTO Agreement.  As past  panels and the Appellate Body have noted, Article 
VI is "part of the same treaty" as the AD Agreement,  and "should not be interpreted in a way that 
would deprive it or the Anti-Dumping Agreement  of meaning."  A panel "should give meaning and 
legal effect to all the relevant provisions," includ ing the Ad Note to Article VI.  Instead of "reading 
Article VI in conjunction with the Anti-Dump ing Agreement," as the Appellate Body in US – 1916 WT/DS343/R 
Page B-4 
 
 
  Act suggested, Thailand, through a misreading of Artic les 7 and 9 of the AD Agreement, attempts to 
read Article VI and the Ad Note out of the covere d agreements entirely, depr iving both provisions of 
any meaning.  
11. Thailand's analysis of AD Agreement Article 9 in connection with the US cash deposit 
requirement illustrates the b asic flaws in its approach.  First, to argue that Article 9, and not the Ad 
Note, is the relevant provision applicable to cash deposit requirements, it asserts that the term "cash 
deposit" is the same as the term " duty" – a position that cannot be reconciled with the text of the AD 
Agreement or the Ad Note, or the ordinary m eaning of either of the terms in question.  
12. A "cash deposit" is security fo r a duty owed, but is not itsel f a duty.  In both the GATT 1994 
and the AD Agreement, the term "cash deposit" is used  throughout to refer to a form of "security", not 
a "duty".  The Ad Note, for exam ple, provides for "reasonable security (cash deposit or bond)" – it 
does not characterize cash deposits as "duties".  Article 7.2 of the AD Agreement likewise 
distinguishes a "cash deposit" as a form of "secu rity" from "duties" in stating that "provisional 
measures may take the form of a provisional duty or, preferably, a security – by cash deposit or 
bond ... ."  Indeed, insofar as it indicates a preference for requiring payment of cash deposits rather 
than duties, Article 7.2 suggests that there is in fact a substantive difference between a cash deposit 
requirement and a duty. 
13. The sole support Thailand offers for its r eading of the GATT 1994 and the AD Agreement in 
this regard is a single reference by the Appellate Body in US – Zeroing (Japan) to cash deposits in its 
description of an administering author ity's right to "collect duties, in the form of a cash deposit."  This 
statement was not made in the context of any findi ng with respect to cash deposit requirements – and 
indeed, the Appellate Body report contains no analysis  of the question of whether cash deposits are in 
fact duties.  A single clause in one sentence in an  Appellate Body report, in a different context and 
unsupported by any relevant analysis, cannot justify a conclusion that plainly contradicts the text of 
the GATT 1994 and the AD Agreement. 
14. Moreover, in an attempt to support its asser tion that, rather than permitting "reasonable" 
security, the GATT 1994 and AD Agreement prohibit any security in excess of the margin of 
dumping determined in the investigation or most rece nt administrative review,  Thailand misinterprets 
the term "margin of dumping" in Ar ticle 9.3 to refer, alternately, to the margin of dumping established 
in the investigation or to the margin established for a previous set of entries in a prior administrative 
review.  This reading of Article 9.3, however, is both illogical and inconsistent with the text of that 
provision and previous reports of the Appellate Body  examining that text.  Inexplicably, Thailand 
ignores the one margin of dumping that is based on actu al analysis of the particular entries in question 
and which is used to establish the "final liability" for payment of anti-dumping duties, referenced in 
Article 9.3.1:  the margin of dumping established in the assessment review.  It is this margin (which, 
contrary to what Thailand asserts, is a margin "as es tablished under Article 2") that is the "margin of 
dumping" referenced in Article 9.3, and it is paym ent of duties resulting from this margin that the 
cash deposit and bond are intended to secure. 
15. The Appellate Body's findings in  US – Zeroing (EC) are fully consistent with this reading of 
AD Agreement Article 9.  The "margin of dumping established for an exporter or producer" referenced in that section of the Appellate Body's report is the margin of dumping established in an 
assessment proceeding, not the margin of dumping establis hed in an investiga tion.  Article 9.3 
specifies the amount of "assessed" anti-dumping duties – an amount determined through the 
administrative review.  The margin of dumping it describes is thus the margin of dumping established 
in that review.  Article 9.3 does not prescribe the specific methodology by which duties should be 
assessed, nor the amount of security that a Me mber may require pending final assessment.  WT/DS343/R 
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  16. Finally, Thailand attempts to rely on Article 7 of the AD Agreement as a basis to read the Ad 
Note out of the GATT 1994 entirely, asserting that the Ad Note is confined to "provisional measures" 
and superseded by Article 7.  However, nothing in th e text of the Ad Note suggests that it is limited to 
"provisional measures" and nothing in the text of Article 7 supports the conclusion that it is intended 
to address security requirements after the imposition of  an order.  Neither Article 7 nor the concept of 
"provisional measures" existed at the time the Ad No te was negotiated.  Article 7 contains rules with 
respect to provisional measures – measures (including  security) taken prior to a final determination in 
an investigation.  Article 7 does not, however, address security requirements imposed after a final 
determination has been made, and there is no basi s to conclude that it places limitations on those 
requirements beyond the limitations established in the Ad  Note.  Indeed, Thailand's assertion that the 
Ad Note "authorizes cash deposits only as a 'provisiona l measure'," when read in conjunction with the 
AD Agreement, contradicts Thailand's own argument that cash deposits are permitted by Article 9 of 
the AD Agreement as a "duty".  Moreover, Thailand 's interpretation cannot be reconciled with the 
term "payment" used in the Ad Note, as paym ent does not occur until completion of the assessment 
review.  
17. If Thailand's arguments were accepted, Members would not be permitted to maintain security 
requirements pending final determination of liabilit y.  To preclude a Member with a retrospective 
system from requiring the posting of security prior to  the determination of fi nal liability would create 
a disparity between retrospective and prospective syst ems.  The nature of prospective systems is that 
the duties billed at importation are treated as final.  Thus, no security need be required.  If an importer 
refuses to pay the anti-dumping duties owed, the Memb er maintaining a prospective system may deny 
entry to the merchandise in question.  Members with  prospective systems therefore are not required to 
bear the risk of unsecured liability in the way th at Members with retrospective systems would if 
Thailand's interpretation were accepted.  Nothi ng in the GATT 1994 or AD Agreement suggests that 
one system is favored over another, and the Appella te Body has confirmed that this is the case.  
Members with retrospective systems should not be  penalized for deferring determination of final 
liability to the end of the review period. 
18. Finally, the evidence demonstrates that the additional bond amount satisfies the requirements 
of the Ad Note:  it constitutes "reasonable secur ity" for the payment of anti-dumping or countervailing 
duty.  As a threshold matter, it is important to recall that the United States imposed the additional 
bond requirement after it identified a serious an d growing problem:  when the assessment rate 
resulting from the administrative review exceeded th e cash deposit rate at the time of entry, many 
importers were not paying the duties lawfully ow ed.  This liability was unsecured by cash deposit, 
bond, or other security.  As a result, the United Stat es has been unable to collect over $600 million in 
anti-dumping duties lawfully owed to it. 
19. The additional security required by the United Stat es pursuant to the directive is "reasonable":  
it reflects an assessment of the multiple factors typically considered in establishing security requirements, including the amount of potential liability in the event of default and the likelihood of 
default.  For shrimp, the amount of potential add itional liability was significant, as was the risk of 
default.  In excess of $2.5 billion worth of sh rimp imports had entered the United States from 
countries subject to anti-dumping duty orders during cal endar year 2003.  This quantity of shrimp far 
exceeded that of imports subject to previous anti-du mping duty orders that ha d resulted in significant 
unpaid duties.  Because anti-dum ping duties are assessed on an ad valorem basis, the sheer quantity of 
shrimp imports alone increased the likelihood that , all other things being equal, the potential 
unsecured liability for shrimp would be substantial.  With respect to the likelihood that rates would 
increase, no party to this proceeding disputes the f act that rates do increase.  The historical data 
analyzed by CBP suggests that they often do, and si gnificantly.  Even if the likelihood that rates for 
shrimp would increase was no greater than the historical norm, the fact that shrimp imports were so substantial in value supported CBP's decision to require greater security for shrimp, as it suggested 
significantly greater unsecured liab ility in the event of an increase. WT/DS343/R 
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  20. As for the risk of default, CBP determined  that importers of agriculture/aquaculture 
merchandise subject to anti-dumping or countervailing dut y liability faced an elevated risk of default, 
due in part to low capitalization and high turnover  rates in the industry as a whole.  CBP provides 
importers subject to the enhanced bond directive w ith individualized risk assessments, if they so 
request.  In that event, the bond amount reflects an in dividualized assessment of risk of default.  Only 
if the importer has a history of noncompliance or  does not request an individual bond determination 
will CBP use a bond amount prescribed by the formulas.  Importers have requested and received 
individual bond amounts – often substantially lowe r than those prescribed by the formula – through 
this process.  All of these factors support the conc lusion that the bond amounts required of importers 
under CBP's additional bond directive constitute "reasonable" security.  
21. Finally, as the United States explained in its Responses to Panel Questions, the Ad Note 
contains a limit on the amount of security that may be required ("reasonable security"), but does not 
limit a Member to one form of security.  The text and context support the conclusion that, consistent 
with how the Appellate Body has construed the term  "or" elsewhere in the Agreements, the "or" in 
"cash deposit or bond" is not, as Thailand  asserts, exclusive.  In response to the Panel's question, 
Thailand simply refers to another "or" in Article 7 of the AD Agreement, yet fails to explain both the 
basis for its conclusion that this "or" should be r ead in the exclusive sense or , were that the case, why 
that necessarily means the "or" in  the Ad Note should be read in such a manner.  Furthermore, 
Thailand elsewhere concedes that it is permissible to  require an importer to obtain a bond in addition 
to providing cash deposits – its assertion that the dr afters intended to prohibi t this arrangement as 
"unduly complicated" is unsupported by the text and the logic of Thailand's own argument.  
Thailand's  interpretation thus should be rejected. 
2. The Additional Bond Directive Is Not Incons istent with AD Agreement Article 18.1. 
22. Thailand has failed to demonstrate that the additional bond directive is "specific action 
against dumping" – it is neither "specific" to dum ping nor "against" dumping.  Rather, as the United 
States explained in its submissions, the directive is  a reasonable means of ensuring payment of duties 
ultimately assessed.  Having identified a serious collection problem, CBP took action to secure 
unsecured liability, as it would in any case in which su ch liability exists that presents a risk to the 
revenue, whether or not the "constituent elements of dumping are present."  Only because the vast 
majority of unpaid duty bills re lated to anti-dumping duties did the directive address those duties in 
particular.  The design of the directive, including th e criteria for applying it to particular orders and 
establishing a bond amount based on individual risk, all pertain to securing against risk of uncollected 
duties, not the "constituent elements of dumping".  Thus, while the directive may be "related to" 
dumping – as the Appellate Body in US – Offset Act (Byrd Amendment)  described various measures 
not inconsistent with Article 18.1 – it is not "specific" to it. 
23. With regard to Thailand's claim that the di rective is action "against" dumping, neither 
previous Appellate Body reports examining that term  nor the evidence in this proceeding supports this 
conclusion.  The bond is security for the final asses sed duty, which itself may be an action against 
dumping, but the security as such simply allows  the United States to obtain payment of duties 
lawfully owed to it.  As the Appellate Body noted in US – Offset Act (Byrd Amendment ) , "a measure 
cannot be against dumping or a subsidy simply becau se it facilitates or induces the exercise of rights 
that are WTO-consistent."  The GATT 1994 and th e AD Agreement do not proh ibit the United States 
from obtaining payment for the anti-dumping duties in question, and the bond requirement facilitates 
its ability to do so. 
24. As for Thailand's claim that the directive w as "against" dumping because it adversely affected 
imports from countries subject to the anti-dumping or der, the evidence demonstr ates otherwise.  Data 
on imports from the top fifteen countries that export shrimp to the United States reveals no 
appreciable difference in import tre nds for importers subject to the directive and other importers in the  WT/DS343/R 
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  periods before and after the directive was issued .  Aside from seasonal fluctuations, imports from 
most countries subject to the AD order appear to have remained steady or increased.    
25. With regard to costs to importers and alleged "s ignificant shifts in trading patterns", the mere 
fact that additional security is required and results  in additional costs does not support the conclusion 
that the security requirement itself is designed to "c ounteract" dumping.  Likewise, shifting from "cost, 
insurance, freight" (CIF) to "duty delivery paid" (DDP) does not alter the cost of importing or 
otherwise "counteract dumping" – regardless of whether a shipment is CIF or DDP, the costs of 
importing are the same for the importer of record.  Fu rthermore, use of CIF or DDP is determined by 
the contract between the purchaser and the seller, not by CBP.   
26. All security requirements, including cash de posits and other reasonable security for the 
payment of anti-dumping and countervailing duties, may result in some added cost.  If accepted, 
Thailand's  argument would mean that any measure that increases the cost of importing for importers 
subject to anti-dumping and countervailing duties is an  action "against" dumping.  This interpretation 
is not supported by the analysis of the Appellate Body in US – Offset Act .  Increasing the cost of 
importing alone does not necessarily create,  as the Appellate Body put it in US – Offset Act , an 
"incentive not to engage in the practice of exportin g dumped or subsidized products or to terminate 
such practices" – indeed, import data for sh rimp suggest that no such incentive exists. 
27. Even if considered "specific" action "against " dumping, the security requirements in question 
are permitted by the Ad Note and thus are "in accordance with the provisions of GATT 1994, as 
interpreted by the Anti-dumping Agreement."  Again without any textua l support or analysis, 
Thailand refers to a single senten ce in the Appellate Body report in US – 1916 Act to assert that 
security requirements contemplated by the Ad Note are "not permitted" responses to dumping.  The 
statement quoted by Thailand does not, however, suppor t the proposition for which it is cited.  The 
Appellate Body report in question contains no anal ysis of the Ad Note, or security requirements 
generally, and to the extent it discusses Article VI a nd the AD Agreement, it is fully consistent with 
the US reading of Article 18.1.  For example, the Ap pellate Body stated that "'the provisions of GATT 
1994' referred to in Article 18.1 are in fact the pr ovisions of Article VI of the GATT 1994 concerning 
dumping," and then proceeded to analyze whether the measure in question "falls within the scope of 
application of Article VI of the GATT 1994."  The Ad Note to Article VI is a provision of Article VI 
"concerning dumping," and the security requirements at issue fall within its scope.  As explained 
above, the AD Agreement does not contain additiona l limits on security requirements such as those 
contemplated by the Ad Note.  Thus, if a security re quirement is consistent with the Ad Note, it is "in 
accordance with the provisions of GATT 199 4, as interpreted by" the AD Agreement. 
28. To suggest, as Thailand does, that Article 18.1 means that measures permitted by Article VI 
are no longer permitted unless specifically provided for in  the AD Agreement, is at odds with the text 
of Article 18.1 and, as noted previously, the relati onship between the covered agreements set forth in 
the WTO Agreement.  Were Thailand's reading corr ect, there would be no need for Article 18.1 to 
refer to the GATT 1994 at all – yet Article 18.1 does re fer to the GATT 1994.  This reading of the text 
is not consistent with its terms,  and contradicts the principle contained in the WTO Agreement that 
each of the texts, including the GATT 1994, sha ll be integral to it.  Moreover, Thailand's 
interpretation incorrectly presumes that, unless a measure is specifically permitted by the AD 
Agreement, it is prohibited.  The AD Agreement, how ever, contains rules regarding certain aspects of 
anti-dumping and countervailing duty me asures.  As the Appellate Body has observed, the covered 
agreements are not exhaustive, and if an action is not expressly prohibited, taking that action does not 
breach the WTO agreement in question.  To read  Article 18.1 as broadly as Thailand suggests would 
impermissibly extend the disciplines of the AD Agreement beyond their terms. WT/DS343/R 
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  3. The Additional Bond Directive Does not Breach  GATT Article I, GATT Article II, or 
GATT Article XI. 
29. GATT Article I . Contrary to Thailand's assertions, th e additional bond directive does not 
improperly discriminate between products originating in Thailand and products originating in other 
countries.  The directive has been applied to all im porters of shrimp subject to the AD orders, and the 
US action of increasing bond amounts merely addressed the particular risks associated with these 
imports. 
30. GATT Article II .  As explained above, the additional bond directive does not constitute a 
"duty" (anti-dumping or otherwise) or an "other charge."  CBP does not charge for the bonds, nor 
does it even require that security take the form of the additional bond.  The implication of Thailand's 
argument that such bonds are "other charges" is that Members may not require bonds as a means to secure importers' obligations unless the bonds are speci fically included in a Member's Schedule. Yet 
many Members do maintain such requirements, and several provisions of the WTO agreements 
contemplate the use of bonds, suggesting that they are intended to be a device generally available to 
Members to secure their obligations. 
31. GATT Article XI
.  As was the case with th e bond measure at issue in Dominican Republic  – 
Cigarettes , the bond directive does not prevent importers from importing shrimp into the United 
States.  Indeed, import data demonstrates that signi ficant quantities of shrimp subject to the AD orders 
continue to be imported into the United States, and there is no evidence that the bond directive has 
had any appreciable impact on impor ts.  Thailand's argument that any "restriction" results in a breach 
of Article XI proves too much: it would render an y bond requirement inconsis tent with Article XI, 
indeed any requirement that imposes additional "c osts or burdens" on importers.  The directive does 
not mandate an increased bond amount – as noted prev iously, importers can obtain individual bond 
determinations and, depe nding on their ability to pay and history of compliance with US customs laws 
and regulations, may not be required to obtain a higher  bond.  Virtually all impor ters that have made a 
request have received individualized bond amounts pursu ant to this process that are lower than those 
contemplated by the formula.  Furthermore, even importers that have not de monstrated an ability to 
pay or have not complied with US customs laws in the past are allowed to import even without 
participating in the process outlined in the direc tive or providing additional bond amounts.  Importers 
have a range of mechanisms available to them to import into the United States without being subject 
to the additional bond directive, including single en try bonds, cash deposits or security other than a 
continuous entry bond.  
4. The Additional Bond Directive Is Not Inconsistent with GATT 1994 Article X:3(a).        
32. With regard to GATT 1994 Article X, Thaila nd has failed to establish a breach.  As the 
United States explained in its previous submissi ons, Article X does not govern the substance of a 
measure, but instead is concerned with the "publica tion and administration" of the measure.  Thailand 
continues to cite aspects of the measure's substa nce – including the formula used to establish bond 
amounts absent an individual risk analysis – in support of its claim that Article X was breached. 
33. With respect to the application of the dir ective, CBP did not apply the directive in a 
nonuniform, partial, or unreasonable fashion.  It required the bond of shrimp importers because, using 
the criteria in the directive, CBP de termined that the risk of substa ntial unsecured liability was high in 
the case of shrimp.  The fact that CBP opted to  apply the directive to importers of covered 
merchandise subject to new orders, rather than pr e-existing orders, does not render its application 
"nonuniform, partial or unreasonable," as Thailand cl aims.  CBP considered that applying the new 
directive to a new order would facilitate its  ability to monitor and administer the new bond 
requirement at its inception.  Article X does not prohibit a Member from implementing a new measure 
in this fashion.  WT/DS343/R 
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  34. Even under Thailand's theory that Article X applies, the evidence demonstrates that CBP 
administers the bond directive in a "uniform, im partial and reasonable" manner.  The directive 
contains various criteria for identifying importers of merchandise with elevated default risk, and CBP 
applies these criteria uniformly.  CBP faced in excess of  $2 billion in imports of shrimp newly subject 
to an anti-dumping order.  It had experienced $225 million in defaults on importers in industries that, 
like shrimp, were characterized by low capitalization rates and relatively low barriers to entry and exit, 
had very little history of paying customs duties pr ior to imposition of the order, and were highly 
leveraged.  All of these factors suggested that, as with other agriculture/aquaculture merchandise, 
there was a significant risk of default associated with  importers of shrimp.  As for Thailand's assertion 
that the directive does not contain consistent crite ria for identifying merchandise subject to increased 
default risk, the facts simply do not support this clai m. The sole applicable criteria are those identified 
in the October 2006 Notice.  Finally, contrary to  Thailand's suggestion, the October 2006 Notice 
makes the procedures for requesting an individual bond amount clear, and does not impose significant 
costs on importers to do so.  The procedures for requesting an individual bond amount are set forth in the Notice, which itself was published in the Federal Register .  The Notice simply requires that an 
importer respond to CBP's notice by requesting an individual bond amount.  
5. The Additional Bond Directive Would Be Justified by GATT Article XX(d).  
35. As the United States explained in its First S ubmission, the directive is "necessary to secure 
compliance" with US anti-dumping and counter vailing duty assessment laws, in particular 
19 U.S.C. 1673e(a)(1) governing the assessment of  anti-dumping duties, and general customs laws 
and regulations requiring the payment of duties ow ed to the US Treasury.  As evidenced by, among 
other things, the criteria the directive uses to determ ine bond amounts, the directive and its application 
to shrimp secures compliance with this obligation and general custom s laws and regulations requiring 
payment of duties owed to the US Treasury.  The directive secures an otherw ise unsecured liability in 
the form of additional anti-dumping duties owed upon assessment that exceed cash deposits, and thus 
permits collection of revenue that in the past  has been subject to unprecedented default.  
36. Existing cash deposit requirements, civil recove ry proceedings, and the basic bond amount do 
not secure the unsecured liability in question.  C ash deposits do not secure liability resulting from an 
increase in duties upon assessment ab ove the cash deposit rate, because they are limited to the cash 
deposit rate.  Civil recovery proceedings are not a reasonable alternative to address the problem faced 
by CBP:  like cash deposits, CBP has used civil rec overy to try to recover duties when an importer 
defaults, yet notwithstanding these efforts, uncoll ected duties have continued to accrue.  Civil 
recovery produces no remedy if the importer cannot be  reached or has no attachable assets by the time 
the proceeding has concluded.  Furthermore, with respect to the basic bond, it was because the basic 
bond requirement was not sufficient to secure the un secured liability in question, and did not prevent 
hundreds of millions of dollars in unpaid duties from accruing, that CBP  required the additional bond.  
Thus, these measures do not constitute reasonably ava ilable alternatives that "would preserve for" the 
United States "its right to achieve ... the objective pursued." 
37. The additional bond directive meets the requirements of the chapeau to Article XX.  It has not 
been applied in a manner that would constitute a "d isguised restriction on international trade" or "a 
means of arbitrary or unjustifiable discrimina tion between countries where the same conditions 
prevail."  It has been administered uniformly, and does not discriminate.  WT/DS343/R 
Page B-10 
 
 
  ANNEX B-2 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF  
THAILAND 
 
(29 June 2007) 
 
1. The Enhanced Bond Requirement constitutes specific action against dumping that is 
inconsistent with Article 18.1 of the Anti-Dumping Agreement  
1. As Thailand has explained, the Enhanced Bond Requirement constitutes specific action 
against dumping not otherwise in accordance with Article VI of the GATT 1994 read in conjunction 
with the Anti-Dumping Agreement and is, therefor e, inconsistent with Article 18.1 of the Anti-
Dumping Agreement.   
(a) The Ad Note cannot be applied independently of the Anti-Dumping Agreement 
2. As Thailand explained in its response to the Pa nel's question 16, however, Article VI of the 
GATT 1994, which includes as an "integral part" the Ad Note to Articles VI:2 and 3, cannot be read 
independently of the Anti-Dumping Agreem ent.  The Appellate Body stated in US – 1916 Act that 
"Article 1 [of the Anti-Dumping Agreement] states that 'an anti-dumping measure' must be consistent 
with Article VI of the GATT 1994 and the provisions  of the Anti-Dumping Agreement." Similarly, in 
Brazil – Desiccated Coconut , the Appellate Body emphasised that "Article VI of the GATT 1994" 
cannot "be applied independently of the SCM Agreement in the context of the WTO". 
3. As the United States has argued in a previous dispute, and as WTO panels and the Appellate 
Body have consistently found, the Anti-Dumpi ng Agreement provides for only three permissible 
responses to dumping.  These are provisional measures, price undertakings, and definitive duties, as 
provided in Articles 7, 8, and 9 respectively.  As Thailand has explained, the Enhanced Bond 
Requirement does not fall within any of these thr ee permissible responses to dumping.  To permit the 
Enhanced Bond Requirement as a fourth permissible response to dumping would undermine the 
relationship between the Anti-Dumping Agreemen t and the provisions of Article VI of the 
GATT 1994.  
(b) In any event, the Ad Note covers only measu res applied before a final determination of 
dumping 
4. Even assuming, arguendo , that the Ad Note provided for a fourth independent permissible 
response to dumping, the Ad Note could not be invoked to justify the Enhanced Bond Requirement as 
it addresses only provisional measures applied before  a final determination of dumping is made. 
5. The Ad Note provides that a reasonable secu rity can only be app lied "pending final 
determination of the facts in any case of suspected  dumping or subsidization".  The United States 
argues that the "final determination of the facts" in  the Ad Note is, in the context of a retrospective 
duty assessment system, the same as the "determination of the final liability for payment of 
anti-dumping duties" referred to in Article 9.3.1 of the Anti-Dumping Agreement.   
6. The United States ignores the qualification in th e Ad Note that it applies pending "final 
determination of the facts in any case of suspected dumping ".  The reference to "suspected" dumping 
places a strict temporal limitation on the scope of the Ad Note.  Under the Anti-Dumping Agreement, 
"dumping" is determined and no longer suspected at the point of final determination of dumping in an 
investigation conducted Artic le 5.1 "to determine the existence , degree and effect of any alleged 
dumping".    WT/DS343/R 
 Page B-11 
 
 
  7. Thailand notes that the United States, in its r esponse to questions from the Panel, conceded 
that "the existence of dumping is finally establishe d when USDOC issues a final determination in an 
investigation".  It is hard to see how, following a final determinati on of the existence of dumping and 
the imposition of definitive duties, dumping continues to  be "suspected".  Thailand notes that that the 
US anti-dumping law uses the word "suspect" in pr ecisely the same manner to refer to the period 
between a preliminary and final determination of dumping.  Under US law, dumping is only 
"suspected" during the period between the preliminary and final determinations of dumping.  In these 
circumstances, the reference in the Ad Note to cases of "suspected" dumping must be read to refer to 
cases where no final determination of dumping has yet been made. 
8. The United States argues that its interpretation that "dumping ... is 'suspected' until final 
liability for payment of anti-dumping duties is determined" is "supported by" the use of the term "levy" in Article VI:2 of the GATT 1994 as well as  footnote 12 of the Anti-Dumping Agreement.  
The United States reads the footnote to define "levyi ng" of duties to refer only to the final assessment 
of liability.  However, because the footnote also defi nes "levy" to include the "collection" of a duty, 
the collection of estimated anti-dumping duties follo wing the imposition of an order (as cash deposits) 
can also be said to be "levied".  The United Stat es' limited interpretation of the term "levy" is 
problematic when read in conjunction with Artic le 17.4 of the Anti-Dumping Agreement, which 
provides that a Member may refer a matter to the Dispute Settlement Body only "if final action has 
been taken by the administering authorities of the importing Member to levy definitive anti-dumping 
duties or to accept price undertakings ...".  Under the United States' interpretation of "levy", a US 
anti-dumping order could not be challenged in WTO dispute settlement proceedings until after a final 
assessment of duties in an administrative review .  This would limit considerably the ability of 
Members to challenge measures under the Anti- Dumping Agreement in dispute settlement 
proceedings.  In practice, this interpretation h as not been followed, as Members have successfully 
challenged anti-dumping measures following the final determination of dumping, but prior to the 
completion of assessment reviews, under the Anti-Dumping Agreement.   
9. Moreover, as Thailand explaine d in its answers to the Pane l's questions 9 and 11, the 
existence of dumping is not called into question simply because the amount of final liability on 
particular shipments – or even all of an exporte r's shipments in a given year – is zero.  Thus, 
footnote 22 to the Anti-Dumping Agreement  provides, with specific reference to retrospective 
systems, that "a finding in the most recent assess ment proceeding under subpa ragraph 3.1 of Article 9 
that no duty is to be levied shall not by itself require the authorities to terminate the definitive duty".  
In the same vein, the United States argued in US – DRAMS,  in response to a question from the panel, 
that "a definitive anti-dumping duty (or 'order' in US  parlance) is 'imposed' within the meaning of 
Art. 11 even when no duties are actually  being 'assessed' (or collected) ."   
10. This difference between a finding that dumping ex ists and is not merely suspected and the 
much later determination of the final amount of duties to  be paid is reflected in the text of Article VI 
and the Anti-Dumping Agreement.  Thus, while the Ad Note refers to the "final determination of the 
facts in any case of suspected dumping", Article 9.3.1 refers only to the "determination of the final 
liability for payment of anti-dumping duties" in subse quent reviews.  In its responses to the Panel's 
questions, the United States acknowledges that the determination under Article 9.3.1 addresses only to 
"the amount  an importer must pay in duties for entries made in a particular year".  In addition, the 
United States accepts that "[l]iability for th e payment of antidumping duties is triggered upon 
importation of merchandise" and not at the time of the assessment review.  WT/DS343/R 
Page B-12 
 
 
  (c) The Anti-Dumping Agreement and Article VI do not permit bonds or cash deposits greater 
than the margin of dumping  
(i) Cash deposits after a final determination of dumping are "duties" and permitted under 
Article 9   
11. Contrary to the United States' arguments, cash deposits of estimated anti-dumping duties 
collected by the United States after the imposition of an anti-dumping order are duties.  Thus, the 
Appellate Body has characterised the collection of cash deposits of estimated anti-dumping duties 
following a final determination of dumping as the payment of anti-dumping duties .  The Appellate 
Body in US – Zeroing (Japan) confirmed that "[a]t the time of impo rtation, an administering authority 
may collect duties, in the form of a cash deposit , on all export sales…".   
12. The United States' anti-dumping regulations al so expressly recognise that cash deposits are 
estimated duties and differ from a security in  that "upon the issuance of an order [i.e . following a final 
determination of dumping], im porters no longer may post bonds as security for antidumping or 
countervailing duties, but instead must make a cash deposit of estimated duties ".  The US Tariff Act 
provides that following final determinations of dumping and injury, the USDOC must publish an anti-
dumping order that "requires the deposit of estimated anti-dumping duties  pending liquidation of 
entries of merchandise at the same time as estimated normal customs duties on that merchandise are deposited".     
(ii) Article 9 of the Anti-Dumping Agreement  does not permit cash deposits in excess of the 
margin of dumping 
13. The United States contemplates the possibility of  "cash deposits in excess of the margin of 
dumping established in the order".  However, the United States' argument runs counter to the 
carefully-defined limits on amounts of cash deposits in  Article VI:2 of the GATT and Article 9 of the 
Anti-Dumping Agreement  that provide that they shall not "shall not exceed the margin of dumping 
established under Article 2".   
14. Contrary to the interpretation put forward by the United States in these proceedings, US law 
does not permit cash deposits of estimated duties to exceed  the margin of dumping currently in effect.  
As set out in 19 CFR § 351.209(b)(3) "for all entries subject to suspension of liquidation" the Secretary will "instruct the Customs Service to re quire for each entry of the merchandise suspended… 
a cash deposit at the rates determined in the affirmative final determination ".  Similarly, the "deposit 
of estimated anti-dumping duties pending liquidation of entries of merchandise" must take the form of 
a "cash deposit" based on the USDOC's determination of normal value and export price (i.e ., the 
dumping margin).   
(iii) To read the Ad Note to permit cash deposits or  security greater than the margin of dumping 
after a final determination would undermine Article 9 
15. By arguing that it may impose bonding requirements or even cash deposits of estimated duties 
in excess of the margin of dumping following a final determination, the United States is, in effect, 
arguing that the disciplines of the Anti-Dumping Agreement do not apply to the measures it may take 
after it has imposed an anti-dumping order and befo re it completes the final assessment of liability for 
anti-dumping duties.  In the meantime, the Unite d States contends, it may impose any measures it 
chooses, even in excess of the margin of dumping,  so long as it considers those measures to be 
"reasonable" in accordance with the Ad Note.   
16. To accept this argument, the Panel would have to  conclude that the negotiators of the Anti-
Dumping Agreement  negotiated detailed rules governing ever y aspect of permissible specific action  WT/DS343/R 
 Page B-13 
 
 
  against dumping except the measures that may be taken between  the final determination of dumping 
and imposition of definitive anti-dumping duties and the subsequent payment of the amount of duties 
finally assessed.  This cannot possibly be correct .  To permit the imposition of additional action 
against dumping in this manner under the Ad Note  would wholly undermine the carefully-negotiated 
disciplines of the Anti-Dumping Agreement and partic ularly Article 9.  Members would be free to 
burden dumped imports with duties or bonding requir ements greater than the margin of dumping.  
This is completely contrary to the purpose of Artic le 9 of the Anti-Dumping Agreement, which is to 
limit the amount  of any measures taken to counteract dumping.  It is also contrary to the purpose of 
Article 18.1, which is to limit the type and range of measures that may be taken to counteract 
dumping. 
(d) Thailand's interpretation does not undermine the ability of Members to take ordinary 
enforcement measures to secure the payment of anti-dumping duties 
17. The United States has attempted to distract the Panel by arguing that Thailand's claims, if 
accepted, would prevent the United States from co llecting cash deposits of estimated anti-dumping 
duties under its retrospective duty assessment system  and would prevent its "customs authorities from 
using ordinary principles of customs administration to establish security amounts for antidumping and 
countervailing duties."   
18. This is inaccurate.  First, the United States is authorised under Article 9 of the Anti-Dumping 
Agreement  to maintain its current practice of collecting cash deposits of estimated anti-dumping 
duties following the imposition of definitive anti-dump ing duties.  Thailand has not challenged this 
aspect of the United States' anti-dumping regime.  Nothing in Thailand's arguments would in any way 
affect this practice.   
19. Second, Thailand has not challenged the right of the United States to use "ordinary principles 
of customs administration" to establish security amounts for any duty liability, including liability for 
anti-dumping duties.  The United States may act under Article XX(d) of the GATT 1994 to impose 
security measures "necessary to secure compliance with its [customs] laws and regulations."  This 
right is protected by footnote 24 of the Anti-Dump ing Agreement, which reiterates that the prohibition 
in Article 18.1 of that Agreement on non-perm issible specific action against dumping does not 
preclude other action under GATT Article XX(d) necess ary to secure compliance with customs laws 
and regulations.       
20. In summary, Thailand's claim is not that the United States cannot use "ordinary principles of 
customs administration" to establish security amou nts for importers of subject shrimp.  Instead, 
Thailand's claim is that in this case, the United States has abandoned those ordinary principles in 
favour of taking specific action against dumping  not "in accordance with the provisions of 
GATT 1994, as interpreted by this Agreement" w ithin the meaning of Article 18.1 of the Anti-
Dumping Agreement.   
(e) The possibility of importer-specific bond determin ations pursuant to the October 2006 Notice 
does not make the Enhanced Bond Requirement consistent with WTO law 
21. As Thailand has previously explained, "impor ter-specific bond sufficiency determinations" 
under the October 2006 Notice do not cure the WTO-inconsistencies of the Enhanced Bond 
Requirement, but rather exacerbates them.   
22. The Enhanced Bond Requirement remains an impermissible "specific action against 
dumping".  It was applied (and still applies) ab initio to all importers of subject shrimp, simply 
because they import that merchandise.  The Octobe r 2006 Notice provides that "in the absence of a 
submission by the importer" the "CBP would calculate the bond amounts using the [default] WT/DS343/R 
Page B-14 
 
 
  formulas".  Furthermore, Exhibit US-12 indicates that , to date, not a single importer of subject shrimp 
has been granted a 100 per cent reduction.  Thus, all importers of subject shrimp are still required to 
post enhanced bonds in excess of the bonds require d under the Basic Bond Requirement.  And, as 
Thailand has previously noted, the importers that obtained individual bond amounts were required to 
participate in a new and burdensome administrativ e proceeding simply in order to obtain partial 
mitigation of their bond amounts.  
23. Moreover, Exhibit US-12 indicates that only 21 out  of an estimated 1'346 importers of subject 
shrimp have been granted reducti ons pursuant to the October 2006 Notice.  Thailand notes that during 
the First Substantive Meeting, th e United States explained that seven importers had Thai addresses.  
Of these importers, apparently six received a reduction in the enhanced bond of 25  per cent   and one 
received a reduction of 45 per cent . In these circumstances, the October 2006 notice cannot be said to remedy the WTO-inconsistencies of the Enhanced Bond Requirement.   
2. The Enhanced Bond Requirement is not a reasona ble Security within the meaning of the 
Ad Note 
(a) The amount of the security is not based on a reasonable estimate of anti-dumping duty 
liability  
24. The term "reasonable" security in the Ad Note must be read in the context of the other 
provisions of Article VI and the Anti-Dumping Agreement  that address the amount of security or 
duties that may be collected.  If WTO Members are free to collect double the amount of the effective 
dumping margin in duties and securities simply  because "increases in rates ... occur with some 
frequency ", the constraint of reasonableness in the Ad  Note is undermined and WTO Members would 
have carte blanche to set security amounts based on mere possibilities that dumping margins may 
increase.  WTO Members would effectively be able  to impose duties that go beyond the prevailing 
margin of dumping in the guise of "securities in th e form of cash deposits" for the duration of an 
anti-dumping order.   
25. Even assuming arguendo that the Ad Note permits an add itional security above the amount of 
the margin of dumping, to be reasonable within th e meaning of the Ad Note, the amount of any such 
security must be based on a clearly-identifiable and reasonable need to exceed the amount of the 
margin of dumping.  Thus, one test of the r easonableness of the amount of security required from 
importers of subject shrimp is whether the CBP's estimate that dumping margins for all exporters of 
subject shrimp are likely to increase by 100 per cent in every successive review period is valid.  
Thailand submits that the CBP's estimate is arb itrary and wholly speculative. The assumption that 
dumping margins are likely to increase is unequivoca lly contradicted by (1 ) the evidence regarding 
changes in dumping margins for exporters of shrimp  from Thailand (2) evidence regarding changes in 
dumping margins for shrimp exporters from other countries such as India and (3) the earlier CBP 
analysis of changes in dumping margins for agri culture/aquaculture merchandise, on which the United 
States relies.  Thailand notes that  there are several other methodol ogical problems with the CBP 
analysis, which was submitted by the United States as  Exhibit US-10.  In these circumstances, as the 
USCIT has found, neither the CBP's assumption that  dumping margins are likely to increase in every 
instance nor its choice of 100 per cent as an estimate  of any increase can possibly be described as 
"reasonable."  
(b) The Amount of Security is not based on a reasona ble assessment of the Risk to Revenue     
(i) Importers of subject shrimp are not characterised by an elevated risk of default 
26. The assertion that importers of subject shrimp have a significant and elevated risk of default 
cannot be sustained.  First,  it is contradicted by the positive compliance history of importers of  WT/DS343/R 
 Page B-15 
 
 
  subject shrimp. Second,  the United States' argument that importers of subject shrimp prevent an 
elevated risk of default is based on allegations re garding capitalisation and frequent entry/exit that are 
not supported by any evidence.  Third,  the US assertion that importe rs of "agriculture/aquaculture" 
merchandise are homogenous entities that share simila r characteristics and consequently have similar 
elevated default risk is baseless.  The United States itself concedes that certain importers of 
"agriculture/aquaculture" merchandise "do not have the same capital structure" as other importers.  It 
appears that the United States also accepts that, even within the far narrower category of importers of 
subject shrimp, different companies can have differing  default risks.  Moreover, the evidence cited by 
the United States in its submissions does not supp ort any generalisations about all importers of 
agriculture/aquaculture merchandise.  As Thailand has explained, the CBP has said that historically, 
there is minimal experience of default on anti-dumping du ties.  The vast majority of defaults that have 
occurred refer to the particular situation of crawfish .  There is simply no evidence that simply because 
there have been defaults on crawfish, the large and disparate group of importers of 
agriculture/aquaculture merchandise all shar e an elevated risk of default.  Fourth,  the United States 
has previously argued that the existence of the process for obtaining individual bond determinations 
under the 20 October 2006 Notice somehow supports the assertion that importers of subject shrimp 
have an elevated risk of default.  The fact that the United States made a pr esumption that importers of 
subject shrimp have an elevated default risk and put in place a process to mitigate the impact of this 
presumption for certain importers does not constitute evidence to support the presumption.  
(ii) The value of imports covered by specific  anti-dumping duty orders is irrelevant 
27. It is undisputed that the total value of imports  covered by the six antidumping duty orders on 
shrimp provides no indication about the likelihood or probability  that antidumping duties on shrimp 
will not be collected by US  authorities.  Thailand has explained elsewhere why this factor provides no 
reliable indication about the magnitude or extent of  future write-offs of antidumping duties.  Thailand 
further notes that in the absence of an  elevated risk of default or an elevated risk that assessment rates 
will increase relative to cash deposit rates, this factor  cannot, by itself, justify selective resort to the 
Enhanced Bonding Requirement.  There are numerous combinations of United States anti-dumping 
orders that would cover a larger value of trade than the $2.2 billion covered by the six orders on 
shrimp. 
28. For these reasons, the Enhanced Bond Requirement cannot be considered to be "reasonable" 
within the meaning of the Ad Note to Article VI of the GATT 1994. 
3. The Enhanced Bond Requirement is inconsiste nt with Article XI:1 of the GATT 1994 
29. Thailand has submitted extensive evidence about the costs associated with the Enhanced 
Bond Requirement.  This undisputed evidence of increased costs suffices to establish that the 
Enhanced Bond Requirement has made the importa tion of subject shrimp "more burdensome" and 
therefore operates as a "restriction" within the meaning of Article XI:1.  Contrary to the contentions of 
the United States, consistent GATT/WTO jurispruden ce indicates that Thailand is not required to 
additionally establish that the Enhanced Bond Require ment has adversely affected the trade volumes 
of Thai shrimp.   
30. Furthermore, the Enhanced Bond Requirement is not comparable to the measures in the 
Dominican Republic – Import and Sale of Cigarettes case because the importation of subject shrimp is 
contingent on compliance with the Enhanced Bond Re quirement and this requirement is enforced in 
connection with importation and is applied so lely to importers of those products.   WT/DS343/R 
Page B-16 
 
 
  4. Alternatively, the Enhanced Bond Requirement is  inconsistent with Articles II:1(a) and 
II:(b) of the GATT 1994 
31. The United States argues that if Thailand's claim is upheld then WTO Members "may not 
maintain bonds as a means to secure importers' ob ligations unless the bonds are specifically included 
in a Member's schedule".  To the contrary, even if Thailand prevails on its alternative claim, WTO 
Members will be permitted under Article XX(d) of the GATT 1994 to require bonds from importers 
that are necessary to secure compliance with US customs laws and regulations.  The United States 
also argues that because the CBP "does not charge  for bonds" there is no violation of the second 
sentence of Article II:1(b) of the GATT 1994.  Th ailand notes that the United States made the same 
argument to the panel in the US – Certain EC Products , which rejected it.  The present Panel should 
do likewise, and for the same reasons. 
5. The selective application of the Enhanced  Bond Requirement is inconsistent with 
Article X:3(A) of the GATT 1994 
32. In response to Thailand's claims under Article  X:3(a) of the GATT 1994, the United States 
argues that Article X:3(a) does not apply to the present case because Thailand's claims relate to "the 
substantive content of the additi onal bond directive".  However, recent Appellate Body jurisprudence 
has clarified that the "substantive content" of the instruments establishing the Enhanced Bond 
Requirement (which are instruments that apply and implement Sections 113.11 and 113.13 of the 
Customs Regulation) can be examined under Article X:3(a) of the GATT 1994.  In any case, 
Thailand's claims also arise from the administration of the Enhanced Bond Requirement.  Therefore, 
even if the substantive content of the instruments establishing the Enhanced Bond Requirement could 
not be reviewed under Article X:3(a), this would not provide a basis not to resolve Thailand's claims.   
33. Thailand has submitted that, in its administration of the legal requirement that importers must 
provide a bond in a sufficient amount, the United St ates differentiates between importers of subject 
shrimp and all other importers.  The United Stat es has not disputed any of Thailand's factual 
assertions.  Thailand also notes that the evidence su pplied by the United States establishes that the 
differentiation between importers of subject shrimp a nd other importers consistently results in higher 
continuous bond amounts for importers of subject sh rimp.  The United States' substantive defence to 
Thailand's claims is entirely dependent on the assertion that importers of subject shrimp have a unique 
and elevated risk of default.  The evidence before the Panel estab lishes that importers of subject 
shrimp present no different risk of default than any of the numerous other importers with which the 
CBP deals and accordingly the United States' defence must be rejected.   
6. The Enhanced Bond Requirement is inconsis tent with Article I:1 of the GATT 1994 
34. In response to Thailand's claim under Article I: 1 of the GATT the United States asserts that it 
"did no more than respond to the special risks as sociated with [entries of subject shrimp]".  The 
United States fails to explain how the existence of "special risks associated with entries of subject 
shrimp" in any way detracts from Th ailand's contentions that (1) shrimp from the preferred countries 
and shrimp from Thailand are "like products" and (2) shrimp from preferred countries are provided 
with an "advantage" that is not extended to "immediately and unconditionally" to shrimp from 
Thailand.    
7. The Enhanced Bond Requirement is not "necess ary to secure compliance" within the 
meaning of Article XX(d) of the GATT 1994 
35. In its discussion under Article XX(d), the Unite d States has completely failed to conduct the 
requisite comparative  analysis to explain (1) precisely how the anti-dumping duty orders imposed on  WT/DS343/R 
 Page B-17 
 
 
  shrimp differ from all other anti-dumping orders cu rrently in place and (2) how any such differences 
necessitate resort to the Enhanced Bond Requireme nt rather than the Basic Bond Requirement.   
36. Thailand submits that the anti-dumping orders imposed on shrimp do not differ in any 
material respect from all the other anti-dumping duty orders currently in place.  First, there is no 
reason to indicate that substantial increases over cash deposit rates are more likely to occur in 
administrative reviews involving shrimp products as opposed to all other products.  Second, there is 
no reason to believe that when faced with suppl emental bills for increased liability, importers of 
shrimp products have any higher default risk than importers of other products subject to anti-dumping 
duty orders.  Third, there is no reas on to believe that the value of trade covered by these six orders is 
unique because there are many other antidumping duty orders currently in place or combinations of 
antidumping duty orders that account for a compar able value of trade.  In any case, Thailand 
maintains and the United States appears to concede th at any differences in the total value of trade 
covered by an order or a combination of orders cannot independently justify resort to the Enhanced 
Bond Requirement.   
37. In addition, the United States has not responded at all to Thailand's arguments that the 
"growing and serious non-collection problem associated with antidumping duties" on which the 
United States relies to justify its use of the Enhan ced Bond Requirement can be attributed entirely to 
factors that are not present in the case of subject shrimp from Thailand.  Thus, the United States has 
completely failed to respond to Thailand's c ontentions that these non-collection problems are 
attributable to the manner in which dumping marg ins are calculated in non-market economy cases, 
significant surety bankruptcies, and exemptions (now removed) from cash deposit requirements for 
new shippers of products subject to antidumping du ties.  Given that Thailand is not treated as a 
non-market economy and the new shipper bonding privile ge has been removed, there is no reason to 
assume that the non-collection problems that occu rred with crawfish will recur in respect of 
antidumping duties imposed on subject shrimp from Thailand.   
38. Thailand also maintains that the United Stat es has failed to discharge its burden of 
establishing that the Enhanced Bond Requireme nt meets the conditions set out in the chapeau to 
Article XX(d) of the GATT 1994.  
8. The use of zeroing was inconsistent with ar ticle 2.4.2 of the Anti-Dumping Agreement  
39. In light of the United States' answers to the Pane l's questions 1 and 3, it is clear that there is 
no dispute that the United States' use of zeroing in the anti-dumping investigation at issue in this case 
is inconsistent with Article 2. 4.2 of the Anti-Dumping Agreement  in several previous disputes.   
9. Conclusion 
40. For these reasons, the Panel should reject the Un ited States' arguments and find that both the 
use of zeroing and the Enhanced Bond Requirement are inconsistent with the relevant provisions of 
the Anti-Dumping Agreement  and the GATT 1994.  Had the United States not used zeroing to inflate 
artificially the margin of dumping, it may not have been able to impose dumping duties on Thai shrimp.  Then, in turn, the United States would not have imposed the Enhanced Bond Requirement on 
Thai shrimp exports.  In these circumstances, the concurrent application of these two inconsistent 
measures on imports of subject shrimp from Thaila nd doubly burdens exports of an industry that plays 
an important role in Thailand's rural development.