WT/DS315/R 
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ANNEX A 
 
RESPONSES TO QUESTIONS POSED BY THE PANEL AND OTHER PARTIES AFTER  
THE FIRST SUBSTANTIVE MEETING OF THE PANEL  
   
Contents Page 
Annex A-1 Responses of the United States to Questions posed by the Panel after 
the First Substantive Meeting A-2 
Annex A-2 Responses of the United States to Questions posed by the European 
Communities after the First Substantive Meeting A-44 
Annex A-3 Responses of the European Co mmunities to Questions posed by the 
Panel after the First Substantive Meeting A-46 
Annex A-4 Responses of the European Co mmunities to Questions posed by the 
United States after the First Substantive Meeting A-84 
Annex A-5 Responses of Argentina to Questi ons posed by the Panel after the First 
Substantive Meeting A-87 
Annex A-6 Responses of China to Questions posed by the Panel after the First 
Substantive Meeting A-92 
Annex A-7 Responses of Japan to Questions posed by the Panel after the First 
Substantive Meeting A-94 
Annex A-8 Responses of Korea to Questions posed by the Panel after the First 
Substantive Meeting A-102 
Annex A-9 Responses of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu after the First Substantive Meeting A-107 
 WT/DS315/R 
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ANNEX A-1 
 
RESPONSES OF THE UNITED STATES TO QUESTIONS POSED BY THE PANEL AFTER 
THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005) 
 
 QUESTIONS FOR THE UNITED STATES:
 
 
1. Please respond to the assertion by the Eu ropean Communities in paragraph 14 of its 
First Written Submission that the measure at issue in this dispute is "the manner in which the EC administers" customs laws.  
 
In this dispute, the United States is challe nging the manner in which EC customs law is 
administered (as well as the absence of EC tribunals or procedures for the prompt review and 
correction of customs administrative decisions, as required by Article X:3(b) of the GATT 1994).  In particular, we are challenging the absence of unifor mity in the administration of EC customs law.  
The manner in which the EC administers its customs law – that is, the lack of uniformity in such 
administration – may not itself be a "measure."  The "specific measures at issue" for purposes of Article 6.2 of the Understanding on Rules and Pr ocedures Governing the Settlement of Disputes 
("DSU") are the laws, regulations, decisions and ru lings that make up EC customs law, though in 
some cases these are being administered through  laws and regulations which are themselves 
measures.  These measures are identified in the first paragraph of the US request for the establishment 
of a panel (and are set out again in Question No. 3 of the Panel's consolidated questions).  The United 
States does not challenge the substance of these meas ures but, rather, the lack of uniformity in their 
administration. 
 
Lack of uniformity in administration of the measures at issue manifests itself in a number of 
different ways.  One way in which it manifests itsel f is through the existence of different instruments 
in different member States to enforce EC customs law.   For example, to the extent that different EC 
member States have available and apply different penalties to enforce EC customs law, this is 
evidence of a lack of uniformity in the administration of  EC customs law.  Similarly, to the extent that 
different EC member States have available and ap ply different audit procedures to ensure compliance 
with EC customs law, this too is evidence of lack  of uniformity in the administration of EC customs 
law.  
Penalties and audit procedures – as well as ot her means of administration – may themselves 
take the form of measures.  The measures that are the means of administration cause and provide 
evidence of the lack of uniformity of administration of  the customs laws at issue.  We will elaborate 
on this point in our responses to Question Nos. 29, 32, and 90, infra .  
 
2. In paragraph 20 of its First Written Submission, the United States submits that a 
Member does not administer its law in a uniform  manner within the meaning of Article X:3(a) 
of the GATT 1994 if identical products or iden tical transactions receive different treatment in 
different geographical regions and the Member provides no mechanism for the systematic 
reconciliation of such differences. Similarly, in paragraph 119 of its First Written Submission, 
the United States submits that, as concerns the administration of EC law with respect to 
classification and valuation and to the applicat ion of certain customs procedures, there is an 
absence of uniformity and an absence of legal mechanisms to achieve uniformity. Please clarify whether the United States is arguing that: (a ) different treatment in different geographical 
regions for identical products or identical transact ions would be in violation of Article X:3(a) of 
the GATT 1994; or (b) different treatment in  different geographical regions for identical 
products or identical transactions would be in violation of Article X:3(a) of the GATT 1994 only  WT/DS315/R 
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if there is no mechanism or no effective mech anism for the systematic reconciliation of such 
differences.  
 
The United States recognizes that in the course of administration of customs laws, 
inconsistencies may occur from time to time betw een authorities in different regions within a WTO 
Member's territory.  The United States does not ar gue that the emergence of an inconsistency 
automatically and necessarily evidences a breach of  GATT Article X:3(a).  The administration of 
customs laws entails more than the first-instance decisions made at individual ports.  Where an 
inconsistency is systematically and promptly reconc iled, the fact that for a brief period there was an 
inconsistency in administration does not mean that the Member has breached Article X:3(a).  What is 
critical is the existence of a mechanism – such as a central authority – to cure such inconsistencies . 
 
The fact that there may be sporadic instances in which inconsistencies emerge and are cured 
does not satisfy the Article X:3(a) obligation of "u niform" administration.  This is evident, for 
example, from the fact that the obligation of unifo rm administration applies to "all" of a Member's 
laws, regulations, decisions and rulings of the kind described in paragraph 1 of Article X. 
 
The argument of the United States is that th e EC does not have any mechanism to cure the 
inconsistencies that exist in member State administration of customs law and render these non-
uniform results uniform.  It is the absence of a central customs authority or any other mechanism to achieve uniform administration that leads to the co nclusion that the EC fails to meet its obligation 
under Article X:3(a). 
 
3. Please identify what the United States is  challenging under Article X:3(a) of the GATT 
1994 regarding:  
 
(a) Council Regulation (EEC) No. 2913/92 of 12 October 1992; Commission 
Regulation (EEC) No. 2454/93 of 2 July 1993; and the Integrated Tariff of the European Communities established by Council Regulation (EEC) No. 2658/87 of 23 July 1987; 
 
(b) the "related measures" referred to in paragraph 3 of the United States' First 
Written Submission; and 
 
(c) EC rules on customs classification, customs valuation and customs procedures. 
 
The United States is challenging the administration of the listed measures.  By referring in its 
request for establishment of a panel to each of th e measures referred to in the Panel's question, the 
United States captured the universe of measures that constitute EC customs law.  The principal such 
measures are those referred to in subparagraph (a) of the Panel's question.  However, those are not the 
only such measures.  As the EC itself has noted,
1 these measures are supplemented by miscellaneous 
Commission regulations and other measures pertaini ng to customs classification and valuation and 
customs procedures. 
 
With regard to each of the listed measures, the measure is administered by 25 separate 
member State customs authorities, and the instruments the EC holds out as reconciling the divergences that occur among those separate authoriti es do not do so, so as to achieve the uniform 
administration that GATT Article X:3(a) requires.  While the substance of the various measures 
differs – measures concerning classification are different from measures concerning valuation, for 
example – the problem of non-uniform administration is the same.  Accordingly, in our First Written Submission, we described the problem of non-unifo rm administration in systemic terms and then 
                                                     
 
1See, e.g., EC First Written Submission, paras. 92-96. WT/DS315/R 
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described how that problem manifest s itself in the three areas of classification, valuation, and customs 
procedures. 
 
4. If the United States is challenging the a lleged absence of uniformity overall with respect 
to the administration of the EC customs system , please explain why and how the various specific 
instances of alleged non-uniform administration po inted to by the United States to illustrate its 
claim of non-uniform administration underline and fully support the essence of the United States' claim. 
 
The United States is, indeed, cha llenging the absence of uniformity  overall with respect to the 
administration of the EC customs system.  In our First Written Submission and at the first Panel 
meeting, we supported this cha llenge by providing evidence of how the system of customs law 
administration operates.  In particular, we demonstrated that EC customs law is administered by 25 separate member State customs authorities, and that the instruments the EC holds out as reconciling the divergences that occur among those separate aut horities do not do so, so as to achieve the uniform 
administration that GATT Article X:3(a) requires.  In  response, the EC described various principles of 
EC law, as well as instruments and institutions th at, in its view, reconcile divergences and bring about 
uniformity of administration.  However, as the United States showed, none of these principles, instruments, and institutions reconciles the divergen ces in member State administration.  They amount 
to a loose network of non-binding guidance to member State authorities, general duties of 
cooperation, and discretion for Commission and memb er State officials to refer matters to the 
Customs Code Committee.  The only aspect of th is network that may be brought to bear 
systematically is the opportunity for a trader to appeal action by a particular member State customs 
authority through the courts of that member State.  However, for reasons we discussed in our opening 
statement at the first Panel meeting, the availabilit y of that opportunity does not discharge the EC's 
obligation under Article X:3(a). 
 
To illustrate the absence of uniformity overall w ith respect to the administration of the EC 
customs system, we brought to the Panel's attenti on a number of illustrative cases.  The main purpose 
of these illustrations was to demonstrate that the EC's breach of Article X:3(a) is not simply an abstract or technical problem.  It is a problem with real-world implications for actual traders. What is 
essential is not the number of illustrations or the par ticular details of each illustration.  Rather, what 
the illustrations show is that the systemic problem  identified by the United States in demonstrating 
how customs administration in the EC operates affects three key areas of customs administration – classification, valuation, and customs procedures.  
Blackout Drapery Lining
: The blackout drapery lining case is a glaring example of non-
uniform administration of the Common Customs Tariff in which no EC institution stepped in to cure 
the non-uniformity.  There, the customs authority  in one member State – Germany – applied the 
Common Customs Tariff in a manner that plainly dive rged from its application by other member State 
authorities.  Its application of the Common Custom s Tariff caused it to classi fy the good at issue 
under subheading 3921, whereas other member State authorities had consistently classified blackout 
drapery lining under subheading 5907.  
 
The German authority made no attempt to reconcile its classification decision with the 
classification decisions reflected in binding tariff information ("BTI") issued by other member States' customs authorities that were brought to its atten tion.  Moreover, the German authority relied on a 
rationale that plainly is not compelled by the Common Customs Tariff and that the Commission 
nevertheless declined to identify as a non-uniformity.  In particular, the German authority found that 
the presence of plastic coating made the blackout drapery lining ineligible for classification under 
Tariff subheading 5907 (contrary to the Harmoni zed System explanatory note on subheading 5907
2), 
and the German authority relied on an interpretive aid specific to Germany – concerning the fineness 
                                                      
2Harmonized System Explanatory Note, Subheading 59.07 (Exhibit US-48).   WT/DS315/R 
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of the lining's web – which the EC claims was developed by analogy to a Commission regulation 
pertaining to the classification of ski trousers.3 
 
In brief, the blackout drapery lining case is a case in which one member State's customs 
authority declined to take account of other member  States' BTI, ignored an applicable Harmonized 
System explanatory note, and ultimately relied for its classification on a country-specific interpretive 
aid based on an analogy to a good classifiable unde r a completely different chapter of the Common 
Customs Tariff.  This situation did not prompt any action by an EC institution to reconcile a non-
uniformity of administration, illustrating the US claim.   Indeed, the very fact that when confronted 
with this situation the EC denies that a non-uniformity even exists4 underscores the problem. 
 
LCD Monitors : The LCD monitors case is another example of non-uniform administration of 
the Common Customs Tariff by different member States,  with the EC failing to step in to reconcile 
the non-uniformity.  Confronted with divergent class ifications for LCD monitors with digital video 
interface, the Customs Code Committee was unable to reach a decision on how to reconcile the 
divergences.  Accordingly, the Council of the European Union adopted a stop-gap measure – a 
regulation temporarily suspending duties on a subset of the product at issue based on size.  Products 
above the size threshold defined in the Council re gulation remain subject to duties depending on the 
classification assigned in different member States.  
The EC states that the adop tion of the Council regulation concerning a subset of LCD 
monitors reflects a deliberate choice based on the "specific circumstances of the case."
5  It argues that 
it took a qualified majority to adopt the Council duty suspension regulation, just as it would have 
taken a qualified majority in the Customs Code Committee to actually approve a classification regulation.  The difference, however, is that a duty suspension regulation is far different from a 
classification regulation.  One is a temporary po licy solution, while the other is a definitive 
determination of a technical issue.  The ability of the Council to adopt a duty suspension regulation 
does not demonstrate the system's ability to achieve uniformity when it comes to the administration of 
classification rules.  Indeed, the very fact that the question of classification remains unresolved shows 
an inability of the system to achieve uniformity in this area.  
That the LCD monitors case is an apt illustra tion of the problem identified by the United 
States is further underscored by the EC's own e xplanation of the action that the Customs Code 
Committee did take with respect to this good.  At  paragraph 353 of its Fi rst Written Submission, the 
EC states that the Committee concluded that "unl ess an importer can demonstrate that a monitor is 
only to be used with an ADP ma chine (heading 8471) or to be u sed as an indicator panel (heading 
8531), it has to be classified under heading 8528."  As  we pointed out in our opening statement, the 
requirement of a showing that a monitor is " only to be used with an ADP machine" is contrary to the 
applicable Tariff Chapter note, which mak es reference to sole or principal use.
6  Thus, far from 
illuminating the matter, the guidance given by the Comm ittee in this case appears to foster rather than 
resolve inconsistent administration of classification rules.  
Court of Auditors Valuation Report
: The Court of Auditors valuation report (Exhibit US-14) 
discusses a number of divergences in member State administration of EC customs valuation rules.  
The First Written Submission of the United States drew attention to highlights from this report.  Like 
the classification examples, the cases referred to he re all exhibit inconsistencies in member State 
administration, coupled with failure by EC institutions  to systematically cure the inconsistencies.  The 
one example of inconsistent admini stration of valuation rules where the EC states that it took action in 
                                                      
3EC First Written Submission, para. 343; Exhibit EC-78, p. 14. 
4EC First Written Submission, para. 346. 
5EC First Written Submission, para. 360. 
6US Opening Statement, First Panel Meeting, para. 28. WT/DS315/R 
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response to the Court of Auditors report concerns  vehicle repair costs covered by a seller under 
warranty.
7  Yet, as the report explains at paragraph 73, the Commission was first made aware of 
inconsistent member State practice in this area in a 1990 report.  Th e fact that an instance of non-
uniform administration first called to the Commissi on's attention in 1990 was resolved by a regulation 
adopted in 2002 hardly demonstrates that the system  works in a manner consistent with the obligation 
of uniform administration set forth in GATT Article X:3(a). 
 
With respect to the other examples of non-uniform  administration referred to in the Court of 
Auditors report, the EC does not deny the divergen ces.  Instead, it dismisses them as differences based 
on factual issues8, minor variations9, or matters not part of customs procedures.10  These simply 
constitute the EC's characterizations.  The fact re mains that the Court of Auditors report carefully 
identifies particular inconsistencies in administratio n of customs valuation rules that the EC failed to 
reconcile.  In this respect, the illustrations in the re port further support the US challenge based on an 
absence of overall uniformity in the EC customs administration system.  
Reebok
: The Reebok case is a specific example of divergent administration of customs 
valuation rules, with the EC faili ng to reconcile the divergence.  As described in the First Written 
Submission of the United States, the case entails one member State's authority treating an importer as related to its non-EC sellers for valuation purposes.   Other member State authorities did not find the 
importer to be related to its non-EC sellers. 
 
The Reebok case supports the US claim by showing a particular manifestation of non-uniform 
administration in the valuation area.  Tellingly, while the EC characterizes the case as "relatively complex,"
11 it does not contradict the essential facts as d escribed in the US First Written Submission.  
 
Processing Under Customs Control : The United States referred to processing under customs 
control as an illustration of member States diverging in the administration of EC law when it comes to 
customs procedures.  In particular, different memb er States apply different economic tests to decide 
whether to permit processing under customs control.  By way of example, we showed that the United 
Kingdom customs authority requires an applicant to show both the creation of maintenance of processing activities in the EC and an absence of ha rm to essential interests of Community producers 
of similar goods.  In contrast, we showed that th e French authority requires the former showing but 
not the latter.   
 
The EC responds that all member States apply bot h tests and refers to a mention of absence of 
harm to competitors in the French  customs bulletin in Exhibit US-35.
12  However, that mention (in 
paragraph 78 of the bulletin) is simply an intr oductory paraphrase of certain provisions from the 
Community Customs Code.  After the introduction, th e bulletin specifies that the economic conditions 
test will be carried out according to the modalitie s set forth thereafter ("il s'effectue selon les 
modalités définies ci-après").  As explained in the US First Written Submission, the relevant modality 
(in paragraph 83) makes no reference to harm to Community producers.  
Local clearance procedures
: The United States referred to local clearance procedures as a 
second illustration of member States diverging in the administration of EC law with respect to 
customs procedures.  In particular, we showed  that different member States impose different 
requirements for carrying out local clearance proce dures.  The EC counters that the US description 
                                                      
7EC First Written Submission, paras. 397-98. 
8EC First Written Submission, para. 393. 
9EC First Written Submission, para. 396. 
10EC First Written Submission, para. 400. 
11EC First Written Submission, para. 407. 
12EC First Written Submission, para. 415.  WT/DS315/R 
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blends certain discrete procedural steps and mistakes certain details with respect to particular member 
States.  However, the EC does not dispute the exis tence of divergences in the administration of local 
clearance procedures.  
Penalties
: Penalties represent a third aspect of customs procedures in which member States 
diverge.  The EC does not even contest the existence of divergences in this area.  Rather, it contends 
that penalties are not covered by Article X:3(a).  It argues variously that the subject matter of 
measures described in Article X:1 does not include penalties and that, in any event, differences in 
penalties among member States are differences in s ubstantive law rather than differences in the 
administration of EC customs law.  As we explained in our opening statement13 and additionally in 
response to Question Nos. 29 and 32, infra , the EC misunderstands the US argument with respect to 
penalties.  
Measures setting forth penalties are tools for admini stering other laws – in this case, customs 
laws.  Thus, the availability of a penalty for vi olation of a customs law is intended to induce 
compliance with that law.  Article X:1 describes the laws that are to be administered uniformly under 
Article X:3(a), as opposed to the tools for their unifo rm administration, such as penalties.  Therefore, 
even if the EC were correct that Article X:1 doe s not cover penalty laws, its argument would be 
irrelevant.  
Moreover, the EC's argument that differences in penalty laws are di fferences of substance 
rather than differences of administration mistaken ly assumes that a law (or other measure) cannot be 
administrative in nature.  Plainly, penalty laws ar e administrative in nature, inasmuch as they presume 
the existence of other laws and prescribe con sequences for the violation of those laws.   
 
In short, the penalties illustration underlines and fully supports the essence of the US claim by 
pointing to yet another divergence in the administra tion of EC customs law.  The EC does not dispute 
that this divergence exists.  Instead, it characterizes the divergence as outside the scope of Article X.  
However, for the reasons just e xplained (and explained in greater  detail in response to Question 
Nos. 29 and 32), the EC's argument on this point is incorrect.  
Audit Procedures
: The United States referred to diffe rences in audit procedures – i.e. 
procedures for verifying importers' statements with r espect to classification, valuation, and origin of 
goods – as a further example of non-uniformity in the area of customs procedures.  Like penalties, the EC concedes the existence of diffe rences among member States in this area.  Its only argument as to 
why such differences are not inconsistent with Article  X:3(a) is that they are differences of substance 
rather than differences of administration.  But, as with penalties, this argument ignores that certain 
measures are administrative in nature and, in e ffect, defines away an undeniable non-uniformity by 
labeling it a non-uniformity pertaining to "substance".  
Collectively, the various instances of non-uniform  administration that we have summarized in 
response to this question underline that the systemic problem at the heart of the present dispute manifests itself in three principal areas of custom s administration.  Precisely because the problem is 
systemic, it is not confined to classification, valuation, or procedur es.  Non-uniformity of 
administration is an essential feature of all th ree areas.  The chief evidence of non-uniform 
administration is the demonstration that the instruments the EC holds out as reconciling the 
divergences that occur among the 25 different member  State customs authorities do not do so, so as to 
achieve the uniform administration that GATT Article X:3(a) requires.  The illustrations show how 
the EC's administration of its customs laws allo ws non-uniform administration to persist in three 
discrete areas. 
 
                                                     
 
13US Opening Statement, First Panel Meeting, paras. 46-52. WT/DS315/R 
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5. With respect to the United States' claims regarding the European Communities' 
administration of rules on customs valuation , is the United States only challenging the 
administration of EC rules regarding: (a) related parties; (b) royalty payments; (c) valuation on a basis other than the transaction of last sale; and (d) vehicle repair costs covered under 
warranty. If the United States is challenging ot her aspects of EC rules on customs valuation 
under Article X:3(a) of the GATT 1994, please cl early and specifically identify those rules. 
 
The United States claim concerns the system for customs law administration in the EC.  That 
system – in which EC customs law is administered by 25 separate member State authorities and the EC fails to have in place a central agency or  other mechanism to reconcile divergences among the 
different authorities – fails to achieve the uniform  administration required by GATT Article X:3(a).  
The United States is challenging the EC's failure to have in place a system that achieves the uniform 
administration required by that provision.  This aspect  of customs law administration in the EC affects 
the administration of all of the rules that make up EC customs law.  The EC's failure to achieve 
uniform administration manifests itself in a variet y of areas, including those alluded to in this 
question.  
 
6. In paragraph 26 of the United States' First Written Submission, the United States notes 
that it does "not purport to catalogue every aspect of customs procedures in which member 
State practices diverge. Rather, we focus on a few key areas as a way to illustrate the more 
general point." The United States specifically refers to EC customs rules regarding: (a) audit 
following release for free circulation; (b) penalt ies for infringements of EC customs laws; (c) 
processing under customs control; and (d) loca l clearance procedures. Please provide an 
exhaustive list of all EC customs procedures ch allenged under Article X:3(a) of the GATT 1994. 
 
The United States refers to its response to Ques tion No. 5.  As indicated in the response to 
that question, what the United States is challengi ng is the EC's failure to provide the uniform 
administration required by GATT Article X:3(a).  Th at failure is not confined to any particular 
customs rule or group of rules.  It is an overarching feature of customs law administration in the EC.  It is an essential aspect of the administration of a ll EC customs laws.  The EC customs rules alluded to 
in this question are illustrations of areas in which th e lack of uniform administration manifests itself. 
 7. Please clarify what is meant by "treatm ent" in respect of each of the following 
references:  
(a) In paragraph 20 of its First Written Submission, the United States submits that 
"a Member does not administer its la w in a uniform manner if identical 
products or identical transactions receive different treatment in different 
geographical regions and the Member provi des no mechanism for the systematic 
reconciliation of such differences." 
 
(b) In paragraph 84 of its First Written Submission, the United States submits that 
"as detailed as the Code and the Implem enting Regulation are, they do not 
ensure uniform administration in the sense that similar transactions will be 
treated similarly throughout the territory of the EC". 
 
As used in the two quoted statements, the te rm "treatment" means the application to a 
particular good or a particular transaction of laws , regulations, decisions and  rulings of the kind 
described in paragraph 1 of GATT Article X.  Fo r example, when a customs authority applies a 
measure of general application – e.g., a classificati on rule of interpretation – to a particular good and 
thereby determines the good's classification and th e corresponding duty owed it accords treatment to 
that good in the sense intended in paragraphs 20 a nd 84 of the First Written Submission of the United 
States.  Where customs authorities in different regions apply measures of general application 
differently to materially identical goods or transac tions, this amounts to a failure to administer the  WT/DS315/R 
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measures of general applica tion in a uniform manner. 
 
The blackout drapery lining case is a good case in point.  There, the measure of general 
application was the Common Customs Tariff.  Th e question for customs authorities in different 
member States was how to apply the Common Custom s Tariff to blackout drapery lining in order to 
determine its classification.  In its application of the Tariff, the German customs authority decided to 
rely on an interpretive aid (derived from an EC re gulation pertaining to certa in apparel products) that 
directed it to focus on the density of the product.  That decision led it to classify the blackout drapery 
lining under heading 3921.  That was the treatment the German authority accorded the product.  Other 
member State authorities did not rely on the interp retive aid used by the German authority and, 
consequently, classified the product differently, under h eading 5907.  In short, different member State 
authorities applied the Common Customs Tariff diffe rently, resulting in different classifications and 
different duty liabilities.  
8. Please comment on the European Comm unities' interpretation of the "minimum 
standards" it alleges are demanded by the uniform ity obligation in Article X:3(a) of the GATT 
1994. 
 
The difficulty in responding to this question is that the EC has not actually identified what it 
means by "minimum standards".  It has characterized Article X:3(a) as "a minimum standards provision", but has not elaborated on what that means.
14  It has offered no basis for identifying what 
the minimum is.  Nor has it explained how its characterization of Article X:3(a) flows from the 
ordinary meaning of its terms, in their context,  and in light of the object and purpose of the GATT 
1994.  
The EC's characterization of Article X:3(a) as a minimum standards provision is based 
entirely on a passing reference in the Appellate Body report in US – Shrimp .
15  Article X:3(a) was not 
directly at issue in that dispute.  At issue wa s whether a measure that the United States claimed to 
constitute a general exception subject to Article  XX of the GATT 1994 was consistent with the 
requirements set forth in the chapeau of that article – in particular, the requirement that a measure not 
be applied in a manner which woul d constitute a means of arbitrary or unjustifiable discrimination 
between countries where the same conditions prevail.  In deciding that question, the Appellate Body 
looked to Article X:3 as an analogous "due process" pr ovision.  It stated that Article X:3 "establishes 
certain minimum standards for transparency and pr ocedural fairness in the administration of trade 
regulations. . . ."16  However, the Appellate Body did not elaborate on what it meant by "minimum 
standards."  Indeed, it went on to find that whatever  those standards are, the measure at issue in the 
US – Shrimp  dispute did not meet them.  In short, th e passing use of the phrase "minimum standards" 
in the Appellate Body report in US – Shrimp  is of no help in illuminating the question of how the 
obligation of uniform administration in Artic le X:3(a) should be interpreted.     
 
9. In paragraph 19 of its Oral Statement at the first substantive meeting, the United States 
submits that WTO jurisprudence suggesting that a pattern of non-uniformity is needed to prove 
a violation under Article X:3(a) of the GATT 1994 is inapplicable to cases in which geographical 
non-uniformity is being alleged. If that is the case, please clearly explain what would be needed 
to prove a violation under Article X:3(a) in ca ses in which geographical non-uniformity is being 
alleged.  
The EC's assertion that a pattern of non-uni formity is needed to prove a violation under 
                                                     
 
14EC Oral Statement, First Panel Meeting, para. 24. 
15See EC Oral Statement, First Panel Meeting, para. 24; EC First Written Submission, para. 231. 
16Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products , 
WT/DS58/AB/R, para. 183 (adopted 6 November 1998) (" US – Shrimp "). WT/DS315/R 
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GATT Article X:3(a) comes from an isolated statement in the Panel report in US – Hot-Rolled Steel .
17  
There, Japan alleged that the application of US an ti-dumping law in a particular investigation violated 
the obligation of uniform, impartial and reasonable administration.  The Panel found that Japan had 
not even alleged (let alone established) "a pattern  of decision-making" that would support its claim.18 
 
In that context – where the claim was that the application of a particular law in a particular 
case violated the obligations of Article X:3(a) – it made sense to insist on a pattern.  It would be 
difficult, if not impossible, to determine whether th e actions of the investigating authorities in that 
case were uniform, impartial and reasonable without knowing what they had done in other, similar 
cases.  Assessing the presence or absence of uniformity, in particular, called for comparisons between 
the case at hand and other similar cases.  
 
Where, as in the present dispute, the issue is geographical non-uniformity, the context is much 
different from the context in US – Hot-Rolled Steel .  The question is not whether a particular 
administrative authority is applying a particular law in a uniform manner – a determination that can be 
made only by looking at multiple instances of that aut hority's application of the law.  The question is 
whether different authorities across the territory of a WTO Member (in this case, 25 different authorities) are applying various laws uniformly.  
How non-uniformity of administration can be shown where the nature of the non-uniformity 
being alleged is geographical non-uni formity will depend on the circumstances of the allegation.  In 
the present dispute, the allegation is that the EC  does not reconcile divergences among the member 
State authorities when they occur and that the EC, th erefore, fails to uniformly administer its customs 
law as Article X:3(a) requires.  To prove this allega tion, what is needed is to provide evidence of the 
mechanisms that the EC does have in place and to demonstrate how these fail to perform the role of 
reconciling inconsistencies of administration among 25  different member State agencies.  The United 
States submits that this is what it has done in its  First Written Submission and that, for the reasons 
discussed in its opening statement and interventions at  the first Panel meeting, the EC has failed to 
rebut that evidence.  
Moreover, requiring evidence of a pattern of no n-uniformity in the present dispute would lead 
to a perverse result.  It would make it impossibl e to challenge an overall absence of uniformity and 
instead force a complaining Member to focus one by one on individual instances of non-uniform 
administration.  Thus, even if the EC did not have in place the various mechanisms that it claims (incorrectly) bring about uniformity of administration of customs law, another WTO Member still would be precluded from making a systemic claim.  Instead, it would have to resort to challenging 
particular cases of non-uniform administration.   
 
It is illogical for the EC to suggest that wh ere non-uniform administration evidences itself in 
neat patterns – presumably, consistent differences  between member States that go unreconciled – the 
particular non-uniformities may be challenged under Article X:3(a), but where the system as a whole 
fails to achieve uniform administration, there is no basis for challenge.  To put it another way, by the 
EC's reasoning, for non-uniform administration to be susceptible to challenge under Article X:3(a) 
there must be a uniformity – i.e. a pattern – to th e non-uniform administration.  But, by this same 
reasoning, where non-uniform administration manifests itself in various and unpredictable ways in diverse areas of customs law, due to the overall wa y in which the system operates, such non-uniform 
administration is not susceptible to challenge.  This  result is inconsistent with Article X's focus on 
fairness to traders
19 and should be rejected. 
                                                      
17EC First Written Submission, para. 240. 
18Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from 
Japan , WT/DS/184/R, para. 7.268 (adopted 23 August 2001). 
19See Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and the Import of 
Finished Leather , WT/DS155/R, paras. 11.76 to 11.77 (adopted 16 February 2001).  WT/DS315/R 
 Page A-11 
 
 
 
10. In paragraph 9 of its Oral Statement at th e first substantive meeting, the United States 
submits that "our complaint is that beca use the retaining of competence over customs 
administration in the hands of member State au thorities is not coupled with the systematic 
reconciling of divergences among member State author ities, it is inconsistent with the obligation 
of uniform administration under Article X:3(a)". Further, in paragraph 12 of its Oral 
Statement at the first substantive meeting, the United States submits that the "system" for administering customs law in the European Co mmunities does not ensure the uniformity that 
Article X:3(a) requires.  In light of the constitutional structure and institutional set-up in the European Communities for the administration of  customs matters, please specifically identify 
aspects/elements/measures/mechanisms the United States would expect the European 
Communities to take to achieve the "syste matic reconciliation of divergences among member 
State authorities" to ensure uniform administrati on of its customs laws within the meaning of 
Article X:3(a) of the GATT 1994. 
 
Preliminarily, the United States notes that prescr ibing the method for the EC to come into 
compliance with its obligation under GATT Article X:3( a) is not necessary to resolve this dispute.  
What is at issue is whether the EC is in complian ce with its obligation, not what it must do to come 
into compliance.  
Having said that, in answering this question it is  useful to consider different approaches to 
customs administration along a spectrum.  At one end of the spectrum is the status quo, which fails to 
achieve the uniformity of administration required by GATT Article X:3(a).  At the other end of the spectrum is an approach to customs administra tion that relies on a single EC customs agency 
authorized to ensure uniformity of administration acr oss the territory of the EC.  Creation of such an 
agency appears to the United States to be an obvious option for achieving the systematic 
reconciliation of divergences among member State authorities to ensure uniform administration of the 
EC's customs laws within the meaning of Article X:3(a).  We understand this to be the principal 
means of achieving uniform administration of customs law in the territory of virtually every other WTO Member, and we are aware of no constitutiona l impediment to the EC's taking the same 
approach.  At the same time, we do not rule out  the possibility that somewhere along the spectrum 
between the status quo and the establishment of a sing le EC customs agency other options exist that 
would enable the EC to satisfy its obligation of  uniform administration under Article X:3(a).  
 
11. Within the context of the present EC syst em of customs administration consisting of, 
inter alia , the Customs Code Committee and the EBTI system, what value would be added 
through the establishment of a single, centralized EC authority proposed by the United States in 
the document entitled "Elements of Potential EC Customs Reform" dated 22 December 2004?  
First, it should be noted that the centralized EC authority proposed in the 22 December 2004 
document (included herewith as Exhibit US-49) w as one element of a multi-part package that the 
United States proposed to the EC in the interest of reaching a mutually agreeable solution to the 
present dispute.  With that objective in view, the United States did not insist on the most obvious and 
comprehensive approach to addressing lack of uni form administration of customs law in the EC 
which, as discussed in response to Question No. 10, would have entailed the establishment of a 
centralized authority for all aspects of the administration of customs law.  
The United States focused on a centralized au thority for the issuance of binding advance 
rulings (with respect to classification, valuation,  and origin) because having in place an effective 
system of binding advance rulings would represen t substantial progress toward achieving uniform 
administration more generally.  Having a single, centralized entity issue advance rulings would eliminate the risk of divergent administration that exists when 25 different authorities perform that 
function and no central authority routinely det ects and steps in to cure inconsistencies. 
 WT/DS315/R 
Page A-12  
 
With respect to valuation, the entity proposed  would establish on an EC-wide basis a form of 
binding guidance that does not exist today.  As noted in our First Written Submission, only some member States currently issue what amounts to binding valuation guidance (a divergence of 
administration with respect to EC valuation rules).
20  Indeed, the concept of establishing EC-wide 
binding valuation guidance was one of the improveme nts that the Court of Auditors recommended in 
its report on the administration of valuation rules in the EC.21 
 
With respect to classification, neither the Cu stoms Code Committee nor the EBTI database 
brings uniformity of administration to the BTI system.  As discussed in the First Written Submission of the United States, institutional impediments, incl uding the fact that matters get referred to the 
Committee only at the discretion of Commission or member State representatives, make the 
Committee an ineffective arrangement for systemat ically achieving uniformity in the BTI system.  
The EBTI database also is not an effective tool  for achieving that objective.  Unless a good is 
described in exactly the same way to the authority consulting the da tabase as it had been described to 
the authorities that previously issued BTI that ma y be relevant, a search of the database will be of 
limited value.  Even where descrip tions are the same or similar, the database does not reveal in any 
detail the rationale applied by different authorities in  classifying a particular good in a particular way.  
It may indicate a citation to the general interpretive rule that the authorities relied on, but provides no 
narrative explanation for the classification.  Thus, an authority trying to decide how to classify a good 
pursuant to an application for BTI would gain little insight into the rationale of other member State 
authorities simply by consulting the EBTI database.
22 
 
In sum, the value added by establishing a centralized authority as described in the 
22 December 2004 document is to eliminate non-uniform administration to a large degree by providing definitive, binding, EC-wide rulings on matters of valuation, classification, and origin. 
 12. The United States refers to divergent decisions taken by member State authorities throughout its First Written Submission.  For exampl e, the United States refers to divergence in 
classification decisions: generally (paragraph 21); with respect to network cards for personal 
computers (footnote 33); with respect to drip i rrigation products (footnote 33); and with respect 
to unisex articles or shirts (paragraph 76).  Fur ther, the United States refers to divergence in 
customs valuation decisions (paragraphs 25 and 93).  In light of these references, does the 
United States consider that Article X:3(a) of the GATT 1994 requires substantive decisions to be 
uniform?  If so, does the United States consider  that substantive decisions regarding customs 
matters could amount to "administration" within the meaning of Article X:3(a)?  If so, please 
specify which type(s) of decisions. 
 
Article X:3(a) requires administration of measures of the kind referred to in Article X:1 to be 
uniform.  The tools of administration can take a variety of forms.  "Decisions" are tools of 
                                                     
 
20US First Written Submission, paras. 98-99. 
21Court of Auditors, Special Report No 23/2000 concerning valuation of imported goods for customs 
purposes (customs valuation), together with the Commission's replies, reprinted in Official Journal of the 
European Communities  C84, para. 52 (14 March 2001) ("Court of Auditors Valuation Report") (Exhibit US-14) 
("The lack of Community-wide binding valuation decisi ons is one of the problems arising where a customs 
union does not have a single customs administration."); id., para. 86 (recommending legislative action to allow 
establishment of Community-wide valuation decisions). 
22The EC suggests that the EBTI database is more acce ssible than the United Stat es claims, in light of 
the number of consultations of the da tabase and the fact that the United St ates was able to find BTI concerning 
blackout drapery lining.  See EC First Written Submission, paras. 319 & 323.  But, the number of consultations 
of the database reveals very little.  It may indicate anyt hing from academic curiosity to collection of statistical 
information.  The fact that the Unite d States was able to identify BTI concerning blackout drapery lining is due 
to the fact that the exporter at issu e had actual knowledge of the fact that particular member State authorities had 
issued BTI for the product at issue at particular times.  In other words, this BTI was not obtained by the sort of 
random search that a trader or au thority ordinarily would perform.  WT/DS315/R 
 Page A-13 
 
 
administration.  Accordingly, when an EC member State customs authority decides to classify a good 
in a particular way it is administering the Comm on Customs Tariff.  When a member State customs 
authority decides that the buyer and seller of goods  are related parties it is administering the CCC 
rules on valuation.  Any decision by a member St ate customs authority that applies a measure of 
general application to a particular good or transac tion may amount to "administration" within the 
meaning of Article X:3(a).  Where substantive decisi ons differ from one member State to another, this 
is evidence of lack of uniform administrati on of the laws at issue in the decisions.  
 
13. Please provide evidence of specific exampl es to prove the assertion made in paragraph 
47 of the United States' First Written Submission th at, in reality, member States do not always 
treat binding tariff information issued by other member States as binding.  
We refer the Panel to Exhibit US-30, whic h is a March 2005 questionnaire on the topic of 
"trade facilitation" prepared by a group based in the EC known as the Foreign Trade Association 
("FTA").  As stated in the introduction, the questi onnaire was sent to 70 of FTA's member companies, 
and 20 responses were received, representing experience in five different member States.  In response 
to question 1.4, concerning classification, a comp any reported that "[b]inding tariff information from 
Germany is still not accepted by other EU countries, especially Greece and Portugal."
23 
 
We also refer the Panel to the report of the Panel in the dispute European Communities – 
Customs Classification of Frozen Boneless Chic ken Cuts (Complaints by Brazil and Thailand) .  At 
issue there was whether a certain product should be classified under Tariff heading 0210 or 0207.  
The complaining parties relied on issuance of BTI by several EC member States consistently classifying the product under heading 0210.  In respon se, the EC asserted that "this interpretation was 
not followed in other EC customs offices."
24 
 
Finally, we refer the Panel to Exhibit US-23, which is the decision of the Main Customs 
Office in Bremen, Germany in the blackout drapery lining case.  At page 4 of that decision, the German customs authority acknowledges that "[n]umer ous binding customs tariff decisions have been 
handed down regarding comparable goods."  Wit hout any explanation, however, the German 
authority declined to follow those decisions and did not distinguish the product at hand from the 
products at issue in those other decisions.  14. In paragraph 16 of its First Written Submission, the United States submits that "[t]here is no customs authority to speak of. Nor is there  an EC institution to systematically reconcile 
divergences that may arise among member States in the administration of EC customs legislation."
1 Is the United States suggesting that Article X:3(a) of the GATT 1994 requires 
WTO Members to establish a central customs auth ority to reconcile divergences that may arise 
among customs authorities throughout that Memb er? If so, please justify making reference to 
the specific terms and meaning of the relevant terms in Article X:3(a).  
_____________ 
1  See also United States' First Written Submi ssion, para. 19 where the United States submits 
that "the EC's customs laws are administered by 25 different authorities, among which 
divergences inevitably occur, and the EC does not provide for the systematic reconciliation of 
such divergences".  
 
The United States does not suggest that Article X:3(a) of the GATT 1994 requires WTO 
Members to establish a central customs authority to reconcile divergences that may arise among 
                                                      
23Foreign Trade Association, Questionnaire on the to pic "Trade Facilitation": Facilitation of Trade in 
WTO States, response to question 1.4 (March 2005) ("FTA Questionnaire") (Exhibit US-30). 
24Panel Report, European Communities – Customs Classifi cation of Frozen Boneless Chicken Cuts  
(Complaint by Brazil), WT/DS269/R, WT/DS286/R, para. 7.260 (circulated 30 May 2005) (" EC – Chicken 
Cuts"). WT/DS315/R 
Page A-14  
 
customs authorities throughout that Member.  As discussed in response to Question No. 10, supra ,  
establishment of such an authority appears to be an obvious way for a WTO Member to comply with 
its obligation of uniform administration under Article  X:3(a).  We are not aware of any WTO Member 
other than the EC that does not have such an auth ority.  At the same time, we do not rule out the 
possibility that there may be other ways to achieve uniform administration.  
 
15. In paragraph 76 of its First Written Submission, the United States submits that the 
examples of blackout drapery lining and liquid cr ystal display flat monitors with digital video 
interface are not isolated and that, rather, traders of other products have also encountered practical difficulties resulting from the systemic problem of non-uniform administration of 
customs classification law in the European Co mmunities. Please identify the other products 
referred to in this statement and provide eviden ce of non-uniform administration for each of 
them.  
We refer the Panel to Exhibit US-30, the March 2005 Foreign Trade Association 
questionnaire on trade facilitation.  There, a res pondent company noted that "[u]nisex-articles or 
shorts have different classifications in Italy and Spai n to those in Germany.  These articles have to be 
imported via Germany which causes additional costs."
25 
 
We also refer to the Panel to Exhibit US-17, which is the opinion of the Advocate-General in 
the ECJ case of Peacock AG  v. Hauptzollamt Paderborn .  In paragraphs 7-8 of that opinion, the 
Advocate-General describes the facts of the case, wh ich included issuance of BTI for network cards 
by customs authorities in Denmark, the Nether lands, and the United Kingdom, which were not 
followed by customs authorities in Germany. 
 We also refer the Panel (as in our response to Question No. 13, supra ), to the EC's admission 
in the context of the EC – Chicken  dispute.  There, the EC asserted that customs authorities in certain 
member States classified the produc t at issue differently from customs authorities in other member 
States, despite BTI issued by the latter.  
Finally, we refer the Panel to footnote 33 of the First Written Submission of the United States.  
There, we refer to a case in which customs author ities in France and Spain differed over whether a 
drip irrigation product should be classified as an ir rigation system or a pipe.  In fact, France had 
issued BTI for this product in 1999, classifying it as an irrigation system under Tariff heading 8424 
(which carried an ad valorem  duty rate of 1.7%).  In December 2000, when an importer of this same 
product attempted to enter the product through Spain,  the Spanish customs authorities disregarded the 
French BTI and classified the product as pipe, under Tariff heading 3717 (which carried an ad 
valorem  duty rate of 6.4%).  The EC states that this matter ultimately was resolved through the 
Commission's adoption of a classification regulation.
26  But, this does not change the fact that for a 
year-and-a-half, when a trader shoul d have been able to rely throug hout the territory of the EC on BTI 
issued by a given member State's cust oms authority, it was not able to do so. 
 
16. With respect to tariff classification, the United States refers to non-uniform 
administration with respect to blackout drapery lining, liquid crystal display flat monitors with 
digital video interface, network cards for perso nal computers, drip irrigation products and 
unisex articles or shorts, which examples it says are illustrative of non-uniform administration 
of EC customs rules.  
(a) Please provide all relevant statistical ev idence and/or other information to show 
the incidence of non-uniform administ ration in the context of the overall 
administration of the EC customs regime  with respect to tariff classification. 
                                                     
 
25FTA Questionnaire, p. 4 (Exhibit US-30). 
26EC First Written Submission, para. 364 n.177.  WT/DS315/R 
 Page A-15 
 
 
 
(b) To what degree are the tariff classifi cation cases involving blackout drapery 
lining, liquid crystal display flat monitors with digital video interface, network cards for personal computers, drip irri gation products and unisex articles or 
shorts: (i) representative of; (ii) significant for; and (iii) have an impact on the 
administration of the EC rules on tariff classification as a whole? 
 
The US claim does not turn on the statistical frequency of non-uniform administration with 
respect to tariff classification.  We have referred to particular instances of non-uniform administration with respect to tariff classification strictly by way of illustration, to demonstrate to the Panel the real-
world impact of what might otherwise seem to be an abstract and technical problem.  
 
For purposes of the US claim, what is relevant is the fact that divergences occur and are not 
reconciled, not the frequency of particular types of divergences. The EC itself acknowledges that 
divergences occur
27 but argues that there are mechanisms in place to systematically reconcile such 
divergences.  The United States disagrees.  The EC sy stem of customs law administration consists of 
25 independent member State customs authorities w ith no central, EC authority or other, similar 
mechanism overseeing their operation and reconciling di vergent administration.  Instead, there is a 
loose web of principles, instruments, and institu tions, including non-binding guidance, plus general 
obligations of cooperation between member States, plus discreti onary referrals of matters to the 
Customs Code Committee. That loose web of prin ciples, instruments, and institutions does not 
provide the uniform administration of EC customs law required by Article X:3(a).   
 
In any event, it is the EC, rather  than the United States, that is  likely to have the information 
sought in this question.   While the United States does not believe that the information at issue is 
necessary for the Panel to find that the EC is not  in compliance with its obligation of uniform 
administration, the United States requests that the Pa nel exercise its authority under Article 13 of the 
DSU to seek relevant information from the EC.  For example, the Panel might seek from the EC a 
statistically significant sample of BTI and other classification decisions from various member States (including explanations of the bases for those d ecisions) in order to determine the frequency of 
divergent administration.  Additionally, the United St ates calls to the Panel's attention Exhibit US-33, 
which is the EC's draft Modernized Customs Code.  At page 4 of that document, the EC states, by 
way of introduction, that "[a]n external study in  2003 has allowed the Commission to gain a clearer 
understanding of the current situation in the member  States and of the potential cost and benefits."
28  
The United States requested a copy of this study dur ing consultations, but the EC declined to provide 
it.  The United States also suggests that the Panel request a copy of this study or draw an inference from the EC's refusal to provide it. 
 
The United States recalls that in evaluating th e incidence of non-uniform administration with 
respect to valuation rules, the EC's Court of Auditors had access to "documents handled in the 
Customs Valuation Committee, customs authority va luation audit files, written valuation rulings, 
decisions of appeal tribunals and the actual custom s declarations" for more than 200 companies and 
groups of companies.
29  The United States has not had the benefit of such access with respect to any 
of the matters at issue in this dispute.  Therefore,  it is difficult to respond directly to the Panel's 
question.  If the Panel were to exercise its authority under Article 13 of the DSU, it might seek information of the type that was made available to  the Court of Auditors in preparing its report on 
valuation.  However, for the reasons discussed above, the Panel should not need the information 
sought by this question in order to conclude that th e EC fails to comply with its obligation of uniform 
administration of customs laws. 
                                                     
 
27See, e.g., EC First Written Submission, paras. 144, 238, 396, 401, 426. 
28European Commission, Directorate-General for Taxation and Customs Union, TAXUD/458/2004 – 
Rev 4, Draft Modernized Customs Code , p. 4 (11 November 2004) (Exhibit US-33). 
29Court of Auditors Valuation Report, para. 10 (Exhibit US-14). WT/DS315/R 
Page A-16  
 
 
17. Please comment on the following argume nts made by the European Communities: 
 
(a) In paragraph 331 et seq of its First Written Submission, the European 
Communities argues that the case of blac kout drapery lining does not reveal any 
lack of uniformity in the European Communities' classification practice. 
 
(b) In paragraphs 347 et seq of its First Written Submission, the European 
Communities argues that measures have been taken by the European Communities to ensure uniform classificati on practice in respect of liquid crystal 
display flat monitors with digital video interface. 
 
The EC's assertion that the blackout drapery lining case does not reveal a lack of uniformity 
in EC classification practice is incorrect for several reasons.  First, the EC misstates the facts of the 
case when it asserts that the product before the Germ an authorities was not flocked and, therefore, 
was distinguishable from the product at issue in the various BTI contained in Exhibit US-22.  In fact, 
the determination of the Hamburg customs office  on which the Bremen customs office relied found 
the product to contain "flocking with individual fibers."
30  For classification purposes, the relative 
density of the flocking was not a material di stinction between the product before the German 
authorities and the product before other member State authorities.  In fact, other member State authorities have classified blackout drapery lining  under heading 5907 where the flocking on the 
products surface was found to be "sparsely applied."
31 
 
Second, the EC simply ignores the statemen t by the German customs authority that 
"[a]ssignment of the goods to class 5907 could only be  considered if, in accordance with the label of 
that class: ‘other webs,' the goods were not plastic-coated as per class 3921."32  That statement was 
plainly erroneous, as is evident from the Harmoni zed System explanatory note that accompanies 
subheading 5907.  According to that note, "The fa brics covered [under subheading 5907] include . . . 
[f]abric, the surface of which is coated with glue (rubber glue or other), plastics , rubber or other 
materials and sprinkled with a fine layer of other ma terial such as . . . textile flock or dust to produce 
imitation suedes. . . ."33 
 
Third, the EC asserts that the German customs authorities were justified in relying for their 
classification decision on an interpretive aid that w as particular to Germany and not uniformly used 
by member State customs authorities in applying the Common Customs Tariff to coated textile 
fabrics, such as blackout drapery lining.  That inte rpretive aid directed the customs authority to look 
to the density of the product's fiber.34  The EC states that "the text in question [i.e. referred to only by 
the Hamburg Customs Office, not by the Main Cu stoms Office of Bremen which decided the 
appeal."35  However, the Bremen Office plainly relied on the findings of the Hamburg Office and, 
moreover, expressly referred to the fact that "[t]he we b is not fine," an appare nt allusion to the finding 
of the Hamburg Office based on the interpretive aid.36 
 
More fundamentally, the EC states that "the cr iterion that the web is not fine was developed 
in analogy to another EC classification regulation a nd is a relevant factor to determine whether the 
                                                      
30Letter from Main Customs Office Hamburg-Waltershof to ORNATA GmbH, 29 July 1998 (original 
and English translation), p. 1 (Exhibit US-50). 
31BTI UK103424227 (Exhibit US-51). 
32Hauptzollamt Bremen, Letter Decision to Bautex-Stoffe GmbH, 22 September 2004 (original and 
English translation) ("Bautex-Stoffe Decision"), p. 4 (Exhibit US-23). 
33Harmonized System Explanatory Note, Subheading 59.07 (Exhibit US-48). 
34See generally  US First Written Submission, para. 72. 
35EC First Written Submission, para. 342. 
36Bautex-Stoffe Decision, p. 4 (Exhibit US-23).  WT/DS315/R 
 Page A-17 
 
 
textile fabric is present merely for reinforcing purposes."37  The classification regulation to which the 
EC refers (Exhibit EC-78) is a regulation pertaining  to the classification of ski trousers, which are 
classifiable under Chapter 62 of the Tariff.  The inte rpretive rules referred to in that regulation are 
relevant to classification of an apparel item, but make no sense when applied for a product such as 
blackout drapery lining.  For example, the rules take  account of whether the fabric forms the inside or 
outside of the product, a criterion that is relevant to  apparel but not to a product, such as lining, that 
has no inside or outside.    
The particular aspect of the ski trousers rule on which the German authority relied in this case 
was the tightness of the weave of the fabric.  Ho wever, Note 2(a) to Chapter 59 of the Common 
Customs Tariff expressly makes that criterion irrelevant  to the classification of coated fabrics.  Thus, 
it states that heading 5903 applies to "textile fabri cs, impregnated, coated, covered or laminated with 
plastics, whatever the weight per square meter and whatever the nature of the plastic material. . . ." 
 
In sum, contrary to the EC's assertion, the blackout drapery lining case illustrates a lack of 
uniformity in classification practice within the EC  inasmuch as (1) other member State authorities 
have classified the product at issue under headin g 5907, even where flocking is sparse; (2) the 
decision to exclude the product from heading 5907 due  to the existence of a plastic coating was 
directly contrary to the applicable Harmonized Sy stem explanatory note; and (3) the German customs 
authority ultimately relied on an interpretive ai d that no other member State authority uses for 
classifying the product at issue, and the EC conte nds that such reliance on a member State-specific 
interpretive aid based on analogy to rules pertaining to a completely different product is justifiable 
under EC law, even when the terms of the interpretiv e aid as applied are in direct contradiction to the 
applicable Tariff chapter notes.  
With respect to liquid crystal display ("LCD") monitors with digital video interface ("DVI"), 
it is important to note that the EC does not claim that it ensures "uniform classification  practice."  It 
states that it has taken measures to "ensure a uniform practice."
38  The difference is important and 
highlights the fact that the EC has not reconciled non-uniformity in member State application of the Common Customs Tariff to LCD monitors with DVI.  
What the EC did was adopt a regulation that temporarily suspends duties on certain LCD 
monitors with DVI regardless of their classification.   The temporary duty suspension applies only to 
monitors below a specified size threshold.  Monitors  above that threshold continue to be subject to 
divergent classification from member State to member  State, a fact that the EC does not contest. 
 
The EC makes reference to a separate regula tion (set out in Exhibit EC-85) classifying 
monitors of a particular type under heading 8528.
39  However, the monitors at issue there are below 
the size threshold specified in the duty suspension regulation.  In other words, the separate 
classification regulation does nothing to reconcile n on-uniform classification of monitors above the 
size threshold specified in the duty suspension regulation.  
Curiously the regulation in Exhibit EC-85 stat es that "[c]lassification under subheading 8471 
60 is excluded, as the monitor is not of a kind sole ly or principally used in an automated data 
processing system. . . ."  Thus, the Commission in this  case applied the sole or principal use test, as 
indicated in Note 5 to Chapter 84 of the Common Cu stoms Tariff.  By contrast, the conclusion of the 
Customs Code Committee to which the EC refers in paragraph 353 of its  First Written Submission 
requires that an importer demonstrate that "a monitor is only to be used with an ADP machine" in 
order to have it classified under heading 8471.  
 
                                                     
 
37EC First Written Submission, para. 343. 
38EC First Written Submission, para. 356. 
39EC First Written Submission, para. 361. WT/DS315/R 
Page A-18  
 
As we discussed in our Oral Statement at the first Panel meeting, the conclusion of the 
Customs Code Committee, which abandons the sole or principal use test set out in the Common 
Customs Tariff in favor of a sole use test, actua lly detracts from rather than promotes uniformity.
40  
member State authorities now are confronted with two conflicting tests for classifying LCD monitors 
with DVI for ADP machines – the sole or principal u se test in the Tariff chapter notes or the sole use 
test in the Customs Code Committee's conclusi on.  Indeed, in stating that the Netherlands 
classification of the goods at issue as video monitors  is "in line with the CN, as confirmed by the 
Customs Code Committee," the EC implies that more than one classification of the same goods may be in line with the CN.   
For the foregoing reasons, the measures the EC has taken do not provide uniform 
classification practice, as non-uniform criteria are employed in respect of LCD monitors with DVI for ADP machines.  
18. Please respond to the submission made by  the European Communities in paragraph 345 
of its First Written Submission that "the United States has had its own difficulties in classifying 
[blackout drapery lining]. In fact, the New York cu stoms office first classified [blackout drapery 
lining] products under HTSA heading 5903.90.25.00.  This ruling was initially confirmed by the 
Headquarters of US Customs. In 2004, these ru lings were revoked by Customs Headquarters, 
which decided that the classification had been  erroneous, and classified the merchandise under 
heading HTSA 5907.00.6000". 
 
The United States notes, first, that actions of US  administrative agencies are not at issue in the 
present dispute.  Nevertheless, in the interest of illuminating the issues that are in dispute, the United 
States answers as follows.  
Pursuant to Customs Regulations (19 CFR 177.1), a ruling was requested regarding the 
classification of blackout drapery lining (BDL).   New York Ruling Letter (NY) H81427, dated 
August 15, 2001, was issued in response to the re quest.  In NY H81427, the BDL was classified in 
heading 5903 of the Harmonized Tariff Schedul e (HTS).  In NY H81427, the BDL was excluded 
from classification in heading 5907, HTS, because the layer of flock was considered not visible to the 
naked eye, following laboratory analysis.  Chapter Note 5(a) to Chapter 59 excludes coated fabrics 
from classification in heading 5907, HTS, if th e coating cannot be seen with the naked eye.  
 
A request for reconsideration of NY H81427 was made pursuant to Customs Regulations (19 
CFR 177.12).  In Headquarters Ruling Letter (HQ) 965343, dated July 30, 2002 , the initial ruling was 
affirmed.  The ruling noted that according to the laboratory analysis the textile flocking was not 
visible to the naked eye and determined that  the BDL was classifiable in 5903, HTS.  
 
A subsequent request was made to reconsid er HQ 965343.  Thereafter, an additional 
laboratory analysis was performed.  This decision was based on a second lab report that identified the 
presence of flock visible to the naked eye.  It also demonstrated that the textile fabric had been coated 
with a layer of plastics upon which a layer of textile flock had been applied.  
 
In light of this new information, a notice pr oposing to revoke the previous ruling was issued 
pursuant to US statute (19 USC 1625(c)) in the Customs Bulletin , Vol. 38, Number 6, on February 4, 
2004.  Interested parties were given 30 days to comment on the proposed revocation and/or identify 
an affected ruling that was not identified in the no tice.  No comments were received in response to the 
notice.  
 
In HQ 966508, dated March 17, 2004, HQ 96534 3 and NY H81427 were revoked pursuant to 
                                                     
 
40US Oral Statement, First Panel Meeting, para. 28.  WT/DS315/R 
 Page A-19 
 
 
Customs Regulations (19 CFR 177.12).  Sixty calenda r days after the final notice was issued, the 
revocations became effective. The BDL w as reclassified in heading 5907, HTS. 
 
At no point during the foregoing process did the United States ever have in force conflicting 
rulings on the BDL.  US Customs pursued a tran sparent process, including a public notice, which 
fully explained the proposed change and offered the public an opportunity to provide comments on its 
proposal. 
 
19. Please respond to the submission made by  the European Communities in paragraph 362 
of its First Written Submission that "the US customs authorities have also found it difficult to 
properly classify LCD monitors. For instance, in a ruling of June 3, 2003, US Customs found 
that it was not possible to determine the principal function of a particular type of LCD monitor, 
and therefore decided to classify it under headin g 8528 in application of General Interpretative 
note 3(c), which foresees classification under the heading which occurs last in numerical order". 
 
The United States notes, first, that actions of US  administrative agencies are not at issue in the 
present dispute.  Nevertheless, in the interest of illuminating the issues that are in dispute, the United 
States answers as follows.  
In examining the classification of LCD monitors, US Customs applies the requirements of 
classification as an automatic data processing (ADP) un it within the meaning of Note 5(B) to Chapter 
84 of the Harmonized System.  Multimedia monitors meet  the criteria of Note 5(B)(b) and 5(B)(c).  In 
reaching its classification decisions, US Customs has focused on whether the monitor meets the 
criterion of Note 5(B)(a) as to whether or not it is of a kind solely or principally used with an ADP 
system and whether the monitor is also prima facie classified under another heading (e.g., heading 
8528, as a video monitor).  In all of its administrativ e rulings dealing with this question, US Customs 
applies judicial precedent in determining "principal use." 
 
The ruling referred to in paragraph 362 of the EC's First Written Submission was submitted 
for consideration in accordance with US Customs Regulations ( see 19 CFR Part 177).  Customs found 
that the monitor in question was a composite mach ine as defined by Note 3 to Section XVI of the 
Harmonized System, because it has the functions of both an ADP monitor and a video monitor.  After 
examining all of the evidence provided, Customs found that a principal function of the monitor in 
question could not be established.  Therefore,  Customs followed the guidance of the General 
Explanatory Notes to Section XVI which states in  pertinent part: "Where it is not possible to 
determine the principal function, a nd where, as provided in Note 3 to  the Section, the context does not 
otherwise require, it is necessary to appl y General Interpretative Rule 3(c)." 
 
Monitors have technical specifications that driv e their use.  "Sole or principal use" is the 
standard that the text of the Harmonized System spec ifies for classification of these machines.  In this 
instance, the trader was unable to demonstrate prin cipal use as an ADP monitor. Accordingly, based 
on the HS, the proper result is to apply GRI 3(c).   20. With respect to the United States' reference in footnote 33 of its First Written Submission to examples of allegedly divergen t classification decisions among member States 
concerning network cards for personal computers  and drip irrigation products, please respond 
to comments made by the European Communities in footnote 177 of its First Written Submission with respect to these two products. 
 
With respect to both the network cards example and the drip irrigation products example, the 
EC's comment is that the matter was resolved.  In the first case, it was resolved through litigation that 
ultimately led to an ECJ decision, and in the s econd case it was resolved through the adoption of a 
Commission regulation.  However, these observati ons obscure the fact that in both cases a key 
element in the network of tools of uniform administration of classification rules as portrayed by the WT/DS315/R 
Page A-20  
 
EC – the requirement that member States honor BTI issued by other member States – did not operate 
in the manner the EC claims it should.  Although BTI issued by one member State is supposed to be 
binding on all member States, both the network cards example and the drip irrigation products 
example represent cases in which one or more member States did not treat as binding BTI issued by other member States.  This is so regardless of the fact that the matters may ultimately have been 
resolved. 
 
21. In paragraphs 51 and 52 of its First Writte n Submission, the United States submits that 
the structure of the binding tariff information sy stem under EC law allows applicants to "pick 
and choose" among member States, relying only on binding tariff information that is 
favourable. Please provide evidence to prove th at this "picking" and "choosing" occurs in 
practice. 
 
The EC itself acknowledges that picking and choosin g occurs in practice.  For example, in the 
Panel report in EC – Chicken Cuts , in summarizing the EC's argument, the Panel stated, "The 
European Communities adds that it is possible under EC law to withdraw an application for a BTI 
where the outcome is considered unfavourable by the importer."
41  Further, in its explanatory 
memorandum accompanying the draft Modernized Custom s Code the EC states, "[I]t is proposed to 
extend the binding effect of the decision [i.e. BTI] also to the holder(s) of the decision in order to avoid the system only being used where the applicant is satisfied with the result."
42 
 
A simple search of the EBTI database also strongly suggests the occurrence of picking and 
choosing.  It shows that the issuance of BTI is heav ily skewed in favor of certain member States.  The 
database allows a searcher to identify how many BTI each member State issued with a start date 
during a specified period.  Thus, if one queries how many BTI Germany issued with a start date between January 1 and December 31, 2004, the search result indicates 12,731 BTI issued.  The 
numbers go down dramatically from there. Italy i ssued 232; Greece issued 1; Belgium issued 451.
43  
This skewing suggests strategic selection of the me mber States in which importers apply for BTI. 
 
Finally, that picking and choosing occurs in pr actice is confirmed by the fact that importers 
regularly approach commercial officers at US emba ssies in EC member States to inquire as to the 
optimal authorities from which to apply for BTI.  22. In paragraph 131 of its First Written Submission, the United States submits that the problem of reaching a decision in the context of the Customs Code Committee is magnified by 
the recent expansion of the European Communities  to 25 member States. Does the United States 
have any concrete evidence indicating that d ecision-making has become more difficult since 
expansion? If so, please provide th e Panel with all relevant evidence . 
 
Given the decision-making process of the Committ ee as described in paragraphs 121 through 
132 of the First Written Submission of the United States, it is evident on its face that decision-making has become more difficult.  In addition, we refe r the Panel to paragraph 131 of our First Written 
Submission, in which we cite a senior EC official who stated that "organising a majority decision will 
be more difficult, since one will have to negotiate  with 25 – instead of 15 – member States."  This 
senior official is close to the decision-making pr ocess and certainly in a position to apprehend the 
difficulties that would be encountered by enlargement.   
                                                     
 
41Panel Report, EC – Chicken Cuts , para. 7.261 (citing EC's Second Written Submission, para. 51; EC's 
Reply to Panel Question No. 117). 
42European Commission, Directorate-General for Taxation and Customs Union, TAXUD/447/2004 
Rev 2, An Explanatory Introduction to the modernized Customs Code , p. 12 (Feb. 24, 2005) (Exhibit US-32). 
43See http://europa.eu.int/comm/taxation_customs/dds/c gi-bin/ebtiquer?Lang=EN (last consulted on 
23 September 2005).  WT/DS315/R 
 Page A-21 
 
 
23. Please clearly explain whether and, if so , how the following statements demonstrate a 
violation of Article X:3(a) of the GATT 1994, making reference to the specific terms and meaning of the relevant terms in Article X:3(a):  
(a) In paragraph 86 of its First Written Submission, with respect to the treatment of 
royalty payments, the United States s ubmits that the EC Court of Auditors 
"found that in a number of cases, differen t member States apportioned royalties 
differently to the customs value of identical goods imported by the same company". 
 
(b) In paragraph 87 of its First Written Submission, with respect to valuation on a 
basis other than the transaction of the last sale, the United States submits that the EC Court of Auditors "found that authorities in some member States required importers to obtain prior approval  for valuation on a basis other than 
the transaction value of the last sale, whereas authorities in other States imposed 
no such requirement".  
 (c) In paragraph 88 of its First Written Submission, with respect to vehicle repair  costs covered under warranty, the United States notes that "[i]n at least one  member State – Germany – the Court found that customs authorities reduced  the customs value of imported vehicles by the value of repairs undertaken in the 
 territory of the EC and reimbursed by the foreign seller. Other member States – 
 in particular, Italy, the Netherlands, and the United Kingdom – declined  requests for similar customs value reductions". 
 
(d) In paragraphs 96 and 97 of its First Written Submission, the United States 
 submits that the EC Court of Auditors "found that different member State 
 authorities take different approaches to [valuation audits performed after goods  have been released for free circulation] ... In the case of at least one member  State, the Court found that the customs authorities lack the right to perform  post-importation audits at all, except in  cases of fraud. Even among the States in 
 which authorities are permitted to perf orm post-importation audits, the Court 
 found differences among working practices".  
 
Each of these statements descr ibes an instance of inconsistent administration of EC customs 
law concerning valuation.  In each case, the incons istency was material, affecting importers' ultimate 
liability for customs duties.  These instances of incons istency, plus others to which the United States 
has referred, illustrate the EC's failure to  uniformly administer EC customs law. 
 
The specific terms of Article X:3(a) at issue are "administer" and "uniform."  We discuss the 
meaning of these terms at paragraphs 32 to 38 of our  First Written Submission.  In particular, the 
ordinary meaning of "administer" is "carry on or ex ecute (an office, affairs, etc.)," and the ordinary 
meaning of the term "uniform" is "of one unchanging form, character, or kind; that stays the same in 
different places or circumstances, or at different times."  In each of the foregoing cases, EC law on 
valuation was "executed" – in the sense that measures of general application were  applied to particular 
persons – in a manner that did not "stay[] the same in different places."  Rather, it varied by member State.    24. With respect to the four aspects of the EC customs regime on valuation that the United States alleges are illustrative of the fact that EC customs rules are not administered uniformly 
in the European Communities (namely, related parties; royalty payments; valuation on a basis other than the transaction of last sale; a nd vehicle repair costs covered under warranty): 
 WT/DS315/R 
Page A-22  
 
(a) Please provide all relevant statistical ev idence and/or other information to show 
the incidence of non-uniform administ ration in the context of the overall 
administration of the EC customs regime with respect to customs valuation. 
 
(b) To what degree are the examples specific ally referred to by the United States in 
its First Written Submission (concernin g related parties; royalty payments; 
valuation on a basis other than the transaction of last sale; and vehicle repair costs covered under warranty): (i) representative of; (ii) significant for; and (iii) 
have an impact on the administration of the EC rules on customs valuation as a whole? 
 
The US claim does not turn on the statistical frequency of non-uniform administration with 
respect to customs valuation.  We have referred to  particular instances of non-uniform administration 
with respect to customs valuation strictly by way of  illustration, to demonstrate to the Panel the real-
world impact of what might otherwise seem to be an abstract and technical problem.   
For purposes of the US claim, what is relevant is the fact that divergences occur and are not 
reconciled, not the frequency  of particular types of divergences. The EC itself acknowledges that 
divergences occur
44 but argues that there are mechanisms in place to systematically reconcile such 
divergences.  The United States disagrees.  The EC sy stem of customs law administration consists of 
25 independent member State customs authorities w ith no central, EC authority or other, similar 
mechanism overseeing their operation and reconciling di vergent administration.  Instead, there is a 
loose web of principles, instruments, and institu tions, including non-binding guidance, plus general 
obligations of cooperation between member States, plus discreti onary referrals of matters to the 
Customs Code Committee. That loose web of prin ciples, instruments, and institutions does not 
provide the uniform administration of EC customs law required by Article X:3(a).  
 
In any event, it is the EC, rather  than the United States, that is  likely to have the information 
sought in this question.   While the United States does not believe that the information at issue is 
necessary for the Panel to find that the EC is not  in compliance with its obligation of uniform 
administration, the United States requests that the Pa nel exercise its authority under Article 13 of the 
DSU to seek relevant information from the EC.  For example, the Panel might seek from the EC 
information of the type that enabled the EC's Court of Auditors to make the findings contained in its 
report on customs valuation (Exhibit US-14).  
 The United States recalls that in evaluating th e incidence of non-uniform administration with 
respect to valuation rules, the Court of Auditors  had access to "documents handled in the Customs 
Valuation Committee, customs authority valuation a udit files, written valuation rulings, decisions of 
appeal tribunals and the actual customs declarations" for more than 200 companies and groups of companies.
45  The United States has not had the benefit of such access with respect to any of the 
matters at issue in this dispute.  Therefore, it is di fficult to respond directly to the Panel's question.  If 
the Panel were to exercise its authority under Article 13 of the DSU, it might seek information of the type that was made available to the Court of A uditors in preparing its report on valuation.   
 
Additionally, the United States calls to the Panel's attention Exhibit US-33, which is the EC's 
draft Modernized Customs Code.  At page 4 of that  document, the EC states, by way of introduction, 
that "[a]n external study in 2003 has allowed the Commission to gain a clearer understanding of the 
current situation in the member States and of the potential cost and benefits."
46  The United States 
requested a copy of this study during consultations , but the EC declined to provide it.  The United 
States also suggests that the Panel request a copy of  this study or draw an inference from the EC's 
                                                      
44See, e.g., EC First Written Submission, paras. 144, 238, 396, 401, 426. 
45Court of Auditors Valuation Report, para. 10 (Exhibit US-14). 
46Draft Modernized Customs Code , p. 4 (Exhibit US-33).  WT/DS315/R 
 Page A-23 
 
 
refusal to provide it.  However, for the reas ons discussed above, the Panel should not need the 
information sought by this question in order to conclu de that the EC fails to comply with its obligation 
of uniform administration of customs laws. 
 
25. Please respond to the submission made by  the European Communities in paragraph 397 
of its First Written Submission that differences that existed between member States in the 
treatment of repair costs covered by a warranty have been resolved by Commission Regulation 
(EC) No 444/2002 of 11 March 2002 (Exhibit EC-89). 
 
While the regulation cited by the EC does appear  to address the issue of treatment of repair 
costs covered by warranty, what is remarkable is th at it took the EC 12 years to resolve this matter.  
The Court of Auditors report notes that the in consistency at issue was first brought to the 
Commission's attention in 1990.47  A system that leads to resolution of non-uniformity of 
administration 12 years after it is brought to the atte ntion of the relevant authority hardly satisfies the 
requirement of Article X:3(a).  We also note that th is is the only inconsistenc y identified in the Court 
of Auditors report that the EC claims to have r esolved.  The EC attempts, unsuccessfully, to explain 
away four other material areas of non-uniformity of administration identified by the Court of Auditors 
(treatment of royalty payments; conditions under whic h a sale other than the last sale which led to 
introduction of goods into the EC may be used as ba sis for customs valuation; valuation audits; and 
provision of binding valuation guidance), but does not deny the existence of non-uniformity of 
administration in these areas.  26. Please provide concrete evidence to support  the submission in paragraphs 25 and 90 – 
92 of the United States' First Written Submission that different member States have taken different positions on whether an importer is rel ated to non-EC companies that manufacture its 
products for the purposes of customs valuation. 
 
The description at paragraphs 25 and 90-92 of  the First Written Submission of the United 
States is based on a narrative account by the import er at issue.  Due to concerns relating to the 
pendency of litigation over the matter at issue and the commercial sensitivity of the information that supporting documentation would contain, the importer d eclined to provide documentation at this time. 
 
However, a Decision of the European Ombudsma n (Exhibit US-52) confirms the description 
of the non-uniform administration of EC laws on valua tion as set forth in the referenced paragraphs of 
the First Written Submission of the United States.  The importer at issue confirms that it is the company described in that Decision.  The impo rter's complaint concerning lack of uniform 
administration of EC customs valuation rules by Spanish customs authorities and Netherlands 
customs authorities is summarized, beginning at page 2. 
 
What is especially revealing in this summary is the description of how the Commission dealt 
with the company's complaint when it was brought to the Commission's attention in September 2000.  
Rather than refer the matter to the Customs C ode Committee, the Commission replied three months 
later "that the interpretation issues raised by the complainant were a matter for the national customs 
authorities, and that [the Commission] has no r esponsibility to undertake a detailed examination of 
very specific individual cases, this being the task of national administrations."
48  When the company 
expressly requested referral to the Committee a y ear later, the Commission "rejected the idea."49  The 
company renewed its request in January 2002 and ov er two years later still had not received a reply 
from the Commission.  The Ombudsman's Decision i ndicates that following a meeting between agents 
                                                      
47Court of Auditors Valuation Report, paras. 73-74 (Exhibit US-14). 
48Decision of the European Ombudsman on complaint 128/2004/OV against the European 
Commission, p. 2 (2 June 2004) (Exhibit US-52). 
49Decision of the European Ombudsman on complaint 128/2004/OV against the European 
Commission, p. 2 (2 June 2004) (Exhibit US-52). WT/DS315/R 
Page A-24  
 
for the company and officials of the Commission's Directorate for Taxation and Customs Union in May 2004, the complainant stated that "he no longer wished to pursue the complaint."
50  However, it 
does not indicate that the underlying lack of uniformity actually was resolved.  The fact that the 
company is continuing to pursue its appeal through the Spanish courts indicates that, in fact, it has not 
been resolved. 
 
Finally, it is notable that while the EC char acterizes the matter as "relatively complex,"51 it 
does not dispute the essential facts as described by the United States.  That is, it does not disagree that 
this case entails differential application of EC valu ation rules to a particular importer to determine 
whether that importer's contracts with non-EC se llers gave rise to a control relationship.   
 27. In relation to processing under customs cont rol, is the United States concerned with 
perceived discrepancies in the substantive test as between member States for determining whether the economic conditions justify processing  under customs control and/or is the United 
States concerned with the application of the econo mic conditions test by member States?  If the 
latter, please provide concrete evidence to suppor t the allegation that such application is in 
violation of Article X:3(a) of the GATT 1994. 
 
This question highlights the fallacy in the EC's  failure to recognize that measures may also 
serve in the administration of other measures.  Processing under customs control is a procedure provided for in Article 130 of the Community Customs Code.  Where an importer is permitted to use 
this procedure, it may bring goods into the territory  of the EC without duty being charged, perform 
certain operations on those goods, and have the resu lting goods released for free circulation at the 
duty rate applicable to the resulting goods.  Thus, Ar ticle 130 plainly is a "regulation[] . . . pertaining 
to . . . rates of duty . . . on imports. . ." within th e meaning of GATT Article X:1.  As such, it must be 
administered in a uniform manner, pursuant to GATT Article X:3(a). 
 
Under the Community Customs Code and the Implementing Regulation, customs authorities 
must make an "economic conditions" assessment to  determine whether certain applications for 
processing under customs control should be granted.   The manner in which different member State 
authorities administer that measure of general application is sometimes set forth in manuals or bulletins or other member State-specific documents.  These documents explain how member States 
administer the EC regulations on processing under customs control. 
 
The manuals or bulletins that explain how indi vidual member States apply the EC regulations 
on processing under customs control serve an administrative function.  That is, they prescribe how other laws – certain articles of the Community Cu stoms Code and the Implem enting Regulation – will 
be carried out.  To the extent that different member State manuals or bulletins prescribe different 
means of carrying out the EC rules they evidence non- uniformity in the administration of those rules.  
To put this in the terms indicated by the Panel' s question, the United States is concerned with non-
uniformity in the application of the economic conditi ons test by different member State authorities, 
which non-uniformity is evident in the substance of  manuals and bulletins that prescribe how the test 
is to be carried out in different member States. 
 
To illustrate this non-uniformity, we contrast ed United Kingdom guidance on application of 
the economic conditions test with French guidance.
52  We demonstrated that under the UK guidance, 
an applicant must show evidence of both impact on its business and "impact upon any other community producers of the imported goods."
53  By contrast, under the French guidance, an applicant 
                                                      
50Decision of the European Ombudsman on complaint 128/2004/OV against the European 
Commission, p. 4 (2 June 2004) (Exhibit US-52). 
51EC First Written Submission, para. 407. 
52US First Written Submission, paras. 105-07. 
53US First Written Submission, para. 105.  WT/DS315/R 
 Page A-25 
 
 
need only present evidence of the creation or  maintenance of processing within the EC.54 
 
The EC states that the French guidance "also refe rs to the test relating to the absence of harm 
to competitors in the EC."55  The EC refers the Panel to paragr aph 78 of the French guidance (Exhibit 
US-35).  However, that reference is simply an in troductory paraphrase of certain provisions from the 
Community Customs Code.  After the introduction, th e bulletin specifies that the economic conditions 
test will be carried out according to the modalities set forth thereafter ("il seffectue selon les modalités 
définies ci-après").  As explained in the US Fi rst Written Submission, the relevant modality (in 
paragraph 83) makes no reference to harm to Community producers.  28. In paragraph 400 of its First Written Submission, the European Communities submits 
that questions of auditing are not part  of customs procedures.  Please comment. 
 
We note, first of all, that the EC assertion is entirely unexplained.  The EC provides no basis 
for the proposition that questions of auditing are not part of customs procedures. 
 
Second, the EC appears to be relying on an  exceedingly narrow definition of "customs 
procedures."  At the first Panel meeting, we understo od the EC to state that by "customs procedures" 
it meant the term as defined in Article 4(16) of the Community Customs Code.  That provision 
defines "customs procedures" to mean the eight di fferent ways in which goods may be handled upon 
importation into the territory of the EC (includi ng, for example, release for free circulation and 
processing under customs control).  The term has a pa rticular meaning specific to the context of the 
Code.  However, in other contexts, the EC uses th e term "customs procedures" in a broader, more 
generic sense.  For example, as we discussed in our opening statement at the first Panel meeting, the 
EC's regional trade agreement with Chile requires that "customs provisions and procedures . . . be 
based upon . . . the application of modern customs techniques, including . . . company audit methods... 
".
56 
 
Third, whether auditing is characterized as a customs procedure or not, audits plainly are tools 
for administering EC customs laws.  Where that u nderlying set of rules is EC customs law, audit 
procedures are tools for administering that law.  To the extent that different member States use different audit procedures, they administer the underlying law differently.  The EC dismisses any 
differences as "minor in nature."
57  However, the Court of Auditors re port tells quite a different story.  
Thus, it found that in one member State the au thorities lacked the authority to perform post-
importation audits at all, except in cases of fraud.  And, it found that divergences in audit procedures 
from member State to member State meant that "i ndividual customs authorities are reluctant to accept 
each other's decisions."58  It is difficult to see how such differences can be characterized as "minor." 
 29. In paragraphs 429 – 431 of its First Wr itten Submission, the European Communities 
submits that penalty provisions, which provide fo r a sanction in the case of a violation of a 
provision of customs laws, are not themselves cu stoms laws and, therefore, are not covered by 
Article X:3(a) of the GATT 1994.  Please comment. 
 
There are at least two fundamental flaws with the EC's assertion that Article X:3(a) does not 
cover penalty provisions.  First, it ignores the dis tinction between the laws that a member State 
administers and the tools for administering those laws.  It assumes, without any foundation, that 
because penalty provisions take the form of laws they can only themselves be administered, and not also serve as tools of administration of other laws.  However, penalty provisions, like audit 
                                                     
 
54US First Written Submission, para. 107. 
55EC First Written Submission, para. 415. 
56US Opening Statement, First Panel Meeting, para. 53. 
57EC First Written Submission, para. 400. 
58US First Written Submission, para. 97 (quoting from Exhibit US-14). WT/DS315/R 
Page A-26  
 
procedures, presume the existence of other laws – in this case, other EC customs laws. Penalty 
provisions do not exist in a vacuum.  They are intrinsically linked to the underlying laws the 
compliance with which they are meant to induce.
59  Indeed, the EC recognizes this basic proposition.  
Thus, the Council Resolution on penalties set forth in Exhibit EC-41 states that "the absence of 
effective, proportionate and dissuasive penalties for breaches of Community law could undermine the 
very credibility of joint legislation. . . ."60   
 
That penalties are tools for administering EC customs law is demonstrated by the de Andrade  
case cited in the First Written Submission of the United States.61  The EC measures being 
administered in that case were Articles 49 and 53( 1) of the Community Customs Code.  Article 49 
prescribes specific time periods for carrying out  the formalities necessary for goods covered by a 
summary declaration to be assigned a customs-approve d treatment or use.  Article 53(1), in turn, 
states that "[t]he customs authorities shall without  delay take all measures necessary, including the 
sale of the goods, to regularize the situation of goods  in respect of which th e formalities necessary for 
them to be assigned a customs-approved treatment  or use are not initiated within the periods 
determined in accordance with Article 49." 
 
In de Andrade , an importer failed to carry out the formalities necessary for goods to be 
assigned a customs-approved treatment or use within the applicable time prescribed by Article 49 of the Code.  Accordingly, the Portugese customs author ity administered Article 53(1) – that is, it took 
measures necessary to regularize the situation – by  imposing a penalty provided for under Portugese 
law.  Through application of the penalty provision, the Portugese author ity carried out Article 53(1) of 
the Community Customs Code.   
To the extent that different member States have  different penalty provisions that apply to the 
violation of EC customs law – a fact that the EC does not and cannot deny – they administer EC 
customs law differently.  Accordingly, the existe nce of diverse penalty provisions among the EC 
member States – whereby the same offense may be tr eated as a serious criminal act in one state and a 
minor infraction in another
62 – is evidence of non-uniform administration, in breach of GATT 
Article X:3(a).  
The second fundamental flaw in the EC's argume nt is its assumption that penalty provisions 
pertain to "illegitimate actions" and theref ore cannot be covered by Article X:3(a).
63  As we discussed 
in our opening statement, Article X:3(a) makes no distinction between legitimate and illegitimate 
transactions.  Moreover, the EC is simply wrong to  assert that penalties apply only to illegitimate 
transactions.  Once again, the de Andrade  case, where the only offense was to miss a deadline is a 
case in point; here, a penalty was applied in the context of legitimate trade.  30. Please explain step-by-step the United States' understanding of procedures applicable in the European Communities for:  
(a) Clearance of goods for free circulatio n or otherwise using local clearance 
procedures; and 
 
(b) Clearance of goods for free circulatio n not using local clearance procedures.  
                                                     
 
59See The New Shorter Oxford English Dictionary , Vol. II, pp. 2144-45 (1993) (Exhibit US-53) 
(defining "penalty," as relevant here, as "punishment imposed for breach of a law, rule, or contract"). 
60Council Resolution of 29 June 1995 on the effective and uniform application of Community law and 
on the penalties applicable for breaches of Community law in the internal market, p. 1 (Exhibit EC-41). 
61US First Written Submission, para. 100. 
62See An Explanatory Introduction to the Modernized Customs Code , p. 13 (Exhibit US-32). 
63EC First Written Submission, para. 432.  WT/DS315/R 
 Page A-27 
 
 
 
The United States' understanding of procedures a pplicable in the EC for clearance of goods 
for free circulation is as follows (with references  to the Community Customs Code ("CCC") and CCC 
Implementing Regulation ("CCCIR") noted in parentheses):  
 
Step 1 :  Goods are presented to customs.  (CCC Art. 40)  This usually is the responsibility of 
the carrier and applies to all goods, irrespective of clearance method.  Step 2
: A summary declaration is presented to cust oms.  (CCC Art. 43)  This can be the 
responsibility of the carrier, port or facility opera tor, or other person and takes the form of the 
shipment-level detail manifest.  Again, this applies to all goods, irrespective of clearance 
method.  Goods now have the status of being in temporary storage. (CCC Art. 50)  
Step 3 :  Goods are assigned a customs approved treatme nt or use.  (CCC Art. 48)  This is 
effected by making a declaration to place the goods under a customs procedure.  The customs 
procedure may be either a "normal procedure" (CCC Arts. 62-75) or a "simplified procedure" 
(CCC Art. 76)  Simplified procedures are furt her separated into three categories: local 
clearance procedure (CCCIR Arts. 263-267), wa rehousing (CCCIR Art. 268), and simplified 
declaration procedure.  (CCCIR Arts. 269-271) 
 
In sum, the procedures applicable for norma l clearance and clearance using local clearance 
procedures are the same in the first two steps.  At the third step, there is a separation.  Where normal 
procedures apply, the importer must make a full declaration, including supporting documents, and 
afford the customs authorities the opportunity to ex amine the goods and take samples prior to release 
for free circulation.  (CCCIR, Arts. 239-252)  Wher e local clearance procedures apply, the importer 
notifies the customs authorities of arrival of the goo ds and enters the goods in its records, whereupon 
they normally may be released for free circulation.  (CCCIR, Art. 266).  Under local clearance procedures, a supplementary declaration is made afte r release.  As described at paragraphs 109 to 116 
of the First Written Submission of the United States,  different member States administer the local 
clearance procedures differently, including with resp ect to involvement of customs authorities prior to 
release of goods, post-release requirements, and document retention requirements. 
 
31. In paragraph 419 of its First Written Submission, the European Communities submits 
that the United States' arguments with respect to  local clearance procedu res do not differentiate 
between the summary declaration (dealt with in Article 43 of the Community Customs Code), 
the local clearance notification (dealt with in  Article 266 of the Implementing Regulation) and 
the supplementary declaration (dealt with in Article 76(2) of the Community Customs Code) and are, therefore, flawed.  Please comment. 
 
The lack of differentiation that the EC point s to does not affect the essential point of the 
United States' discussion regarding local clearance pr ocedures.  The lack of uniform administration 
described in our First Written Submission exists whet her the particular stages in the clearance process 
are separately articulated or not. 
 
32. In paragraphs 220-221 of its First Wr itten Submission, the European Communities 
submits that, where sub-federal laws exist in a particular WTO Member, it is the 
administration of those laws to which Article X:3(a) of the GATT 1994 refers.  
(a) Does Article X:3(a) apply to penal laws? 
 
(b) If so, would the Panel be authorized to consider the administration of member 
States' penal laws in respect of the United States' claim under Article X:3(a)?  
 
We refer to our response to Question No. 29.  As  discussed there, penal laws for the violation 
of customs laws are tools for the administration of  those customs laws.  They induce compliance with 
the customs laws.  To the extent different EC member  States apply different pe nal laws to violations WT/DS315/R 
Page A-28  
 
of EC customs law, they administer EC customs law differently.  Article X:3(a) requires WTO Members to administer their customs laws uniformly.  To the extent that penal laws are tools of administration of customs laws and cause the administration of customs laws to be uniform or non-uniform, Article X:3(a) applies to penal laws.   
With respect to the second part of the Panel's qu estion, it is important to distinguish between 
the administration of penal laws and the application of penal laws to administer customs laws of the 
type described in Article X:1.  For the reasons discussed in the preceding paragraph and in our 
response to Question No. 29, the Panel is authori zed to consider penal laws as tools in the 
administration of EC customs law in respect of the United States' claim under Article X:3(a).  It is the 
fact that different member States have different penal laws and therefore administer the underlying 
EC customs law non-uniformly that is relevant to  the United States' claim under Article X:3(a).  
Whether each individual member State administer s its own penal law uniformly within its own 
territory is not relevant to our claim.   
The EC confuses this distinction by rejecti ng the proposition that laws may themselves be 
administrative in nature.  In its view, there is no su ch thing as a law that is administrative in nature.  
Thus it states, "Where sub-federal laws exist in a particular WTO Member, it is therefore to the 
administration of those laws that Article X:3(a) GATT refers."
64  It dismisses the possibility that laws 
at the sub-federal level may be tools for administering laws at the federal level.  Yet, that is precisely 
what customs penalty provisions are.  By suggesti ng that laws at the sub-federal level can never be 
evaluated for Article X:3(a) purposes as tools for administering laws at the federal level, the EC reads 
Article X:3(a) in a way that dramatically diminishes  its effectiveness.  By this logic, where federal 
level customs laws are administered by sub-federa l authorities, almost any instance of non-uniform 
administration at the federal level could be re-cast  as a difference in substantive measures prescribed 
at the sub-federal level, thereby enabling the fede rally organized WTO Member to avoid its obligation 
of uniform administration.  Such a reading of Article X:3(a), which deprives it of almost all utility 
with respect to federal States, is contrary to customary rules of treaty interpretation of public 
international law and must be rejected. 
 
33. With respect to the four types of "customs  procedures" that the United States alleges 
are illustrative that EC customs rules are no t administered uniformly in the European 
Communities (namely, audit following release for f ree circulation; penalties for infringements of 
EC customs laws; processing under customs control; and local clearance procedures): 
 
(a) Please provide all relevant statistical ev idence and/or other information to show 
the incidence of non-uniform administ ration in the context of the overall 
administration of the EC customs regime with respect to customs procedures. 
 
(b) To what degree are the examples specific ally referred to by the United States in 
its First Written Submission (concerning audit following release for free circulation; penalties for infringements of EC customs laws; processing under 
customs control; and local clearance pr ocedures): (i) representative of; (ii) 
significant for; and (iii) have an impact on the administration of the EC rules on 
customs procedures as a whole? 
 
The US claim does not turn on the statistical frequency of non-uniform administration with 
respect to customs procedures.  We have re ferred to particular instances of non-uniform 
administration with respect to customs procedures stri ctly by way of illustration, to demonstrate to the 
Panel the real-world impact of what might otherwise seem to be an abstract and technical problem.   
                                                     
 
64EC First Written Submission, para. 221.  WT/DS315/R 
 Page A-29 
 
 
For purposes of the US claim, what is relevant is the fact that divergences occur and are not 
reconciled, not the frequency of particular types of divergences. The EC itself acknowledges that 
divergences occur65 but argues that there are mechanisms in place to systematically reconcile such 
divergences.  The United States disagrees.  The EC sy stem of customs law administration consists of 
25 independent member State customs authorities w ith no central, EC authority or other, similar 
mechanism overseeing their operation and reconciling di vergent administration.  Instead, there is a 
loose web of principles, instruments, and institu tions, including non-binding guidance, plus general 
obligations of cooperation between member States, plus discreti onary referrals of matters to the 
Customs Code Committee.  That loose web of pr inciples, instruments, and institutions does not 
provide the uniform administration of EC customs law required by Article X:3(a).   
In any event, it is the EC, rather  than the United States, that is  likely to have the information 
sought in this question.   While the United States does not believe that the information at issue is 
necessary for the Panel to find that the EC is not  in compliance with its obligation of uniform 
administration, the United States requests that the Pa nel exercise its authority under Article 13 of the 
DSU to seek relevant information from the EC.  
 The United States recalls that in evaluating th e incidence of non-uniform administration with 
respect to valuation rules, the EC's Court of Auditors had access to "documents handled in the 
Customs Valuation Committee, customs authority va luation audit files, written valuation rulings, 
decisions of appeal tribunals and the actual custom s declarations" for more than 200 companies and 
groups of companies.
66  The United States has not had the benefit of such access with respect to any 
of the matters at issue in this dispute.  Therefore,  it is difficult to respond directly to the Panel's 
question.  If the Panel were to exercise its authority under Article 13 of the DSU, it might seek information of the type that was made available to  the Court of Auditors in preparing its report on 
valuation.  
 
Additionally, the United States calls to the Panel's attention Exhibit US-33, which is the EC's 
draft Modernized Customs Code.  At page 4 of that  document, the EC states, by way of introduction, 
that "[a]n external study in 2003 has allowed the Commission to gain a clearer understanding of the 
current situation in the member States and of the potential cost and benefits."
67  The United States 
requested a copy of this study during consultations , but the EC declined to provide it.  The United 
States also suggests that the Panel request a copy of  this study or draw an inference from the EC's 
refusal to provide it.  However, for the reasons discussed in above, the Panel should not need the 
information sought by this question in order to conclu de that the EC fails to comply with its obligation 
of uniform administration of customs laws. 
 
34. How does the United States ensure uniformity in administration of its customs laws at 
different points of entry in the United States?  In this regard, please provide details regarding all relevant aspects of US customs administration, including in particular those aspects that are 
not directly linked to the constitutional and institutional structure of US customs administration. 
 
The United States notes, first, that actions of US  administrative agencies are not at issue in the 
present dispute.  Nevertheless, in the interest of illuminating the issues that are in dispute, the United 
States answers as follows.  
To achieve uniform customs administration, US Customs and Border Protection (CBP) 
employs a variety of tools that apply to both first-instance decision making and correction of 
                                                     
 
65See, e.g., EC First Written Submission, paras. 144, 238, 396, 401, 426. 
66Court of Auditors Valuation Report, para. 10 (Exhibit US-14). 
67Draft Modernized Customs Code , p. 4 (Exhibit US-33). WT/DS315/R 
Page A-30  
 
inconsistent first-instance decisions.    
With respect to first-instance decision making,  CBP issues detailed regulations and further 
elaborates on particular issues of interpretation or  procedure through Directives, Handbooks and other 
formal guidance to CBP officials.  These are publishe d for wide circulation electronically and readily 
available for consultation. 
 
CBP also promotes first-instance uniform admi nistration through the direct intervention of 
experts in the relevant subject areas.  Thro ugh CBP's National Commodity Specialist Division 
(NCSD), CBP supervises certain decisions on cust oms treatment by the Import Specialists who are 
responsible for treatment decisions in the first instan ce in the ports of entry.  Subject-matter experts at 
CBP Headquarters also are in daily consultati ons with field officials as issues arise.  
 
US customs administration also relies heavily on continuous dialogue with importers and 
other interested persons under the principles of  "informed compliance" and "reasonable care."  
 
If definitive information is not available on a particular point, the importer may request a 
binding ruling on any aspect of customs treatment.  Rulings by the NCSD are issued within 30 days; 
advance rulings issued by CBP Headquarters are issu ed, except in extraordinary circumstances, within 
90 days.  The Customs Rulings Online Search System (CROSS) is an essential tool of the binding rulings program.  Traders and customs officials cons tantly refer to the precedents published there for 
guidance in deciding whether new rulings are needed and on the applicability of previous rulings to 
rulings in preparation.   
When CBP becomes aware of inconsistent decisi ons, it may correct any rulings less than 60 
days old by simple notice to the recipient.  More detailed procedures govern the modification or 
revocation of decisions previously published more than 60 days earlier.  Under section 625 of the 
Tariff Act of 1930, as amended (19 USC 1625), an d CBP Regulations (19 CFR 177.12), CBP makes 
appropriate corrections by giving public noti ce of the matter for consideration and CBP 's proposed 
modification or revocation, inviting public commen t, and then publishing a revision that takes 
account, as appropriate, of any public comment.  Pu blication of a final section 625 modification or 
revocation announces the customs treatment that will be given by CBP throughout the customs 
territory of the United States with regard to the specific good or issue.  
 
Another path for correction of non-uniform cu stoms treatment decisions is administrative 
protest, pursuant to section 514 of the Tariff Act of 1930, as amended (19 USC 1514).  Under this procedure an importer can require CBP to examine and correct non-uniform decisions.  Further, an 
importer has the right to appeal final denial of a protest to the United States Court of International 
Trade (CIT).  
A trader has a right to quickly bring a protested customs decision before a review tribunal.  A 
trader exercises this right by requesting accelerated disposition by the port (19 CFR 174.22).  Such a protest not allowed within 30 days is deemed denied; the deemed denial is then ripe for appeal to the 
CIT without further administrative action.  
 
35. Please specifically identify what the United States is challenging/alleging under Article X:3(b) of the GATT 1994 regarding:  
(a) The level of bodies established to review customs decisions and the geographical 
effect of their decisions (See paragraph 4 of the United States' First Written Submission where it submits that appeals from customs decisions are a matter for each member States and that, currently in the European Communities, there are 25 different appellate regimes, none of which can yield a decision with EC-
wide effect);  WT/DS315/R 
 Page A-31 
 
 
 
(b) The procedures in member States regardi ng appeal mechanisms for review of 
customs decisions (See paragraph 133 of the United States' First Written Submission, where it notes that the "appellate mechanism in each member State is different" and in paragraph 143 where it states that "appellate procedures 
vary from member State to member State"); and 
 
(c) Access on the part of traders to the European Court of Justice (See paragraph 5 
of the United States' First Written Submission where it states that the European Communities does not afford traders access to the European Court of Justice so 
as to ensure, inter alia, prompt revie w and correction of customs decisions).  
 
The United States is alleging that under Article X:3(b) of the GATT 1994, it is the WTO 
Member (as opposed to regional subdivisions of the Member) that has an obligation to provide 
tribunals or procedures for the prompt review a nd correction of administrative action relating to 
customs matters; that the decisions of such tribuna ls or procedures must govern the practice of that 
Member's agencies (here, the EC's agencies, as a whole, not just i ndividual member States' agencies); 
and that Member's agencies must implement those decisions (again, EC agencies as a whole).  The 
United States also claims that the provision of tr ibunals or procedures by individual member States 
within the EC does not satisfy the EC's obligati on under Article X:3(b), as the decisions of these 
tribunals or procedures have effect  only within their respective member States and not on EC agencies 
generally.  
 
The foregoing interpretation of Article X:3(b)  is supported by the second sentence of that 
provision, which states that the tribunals or pro cedures that a Member provides "shall be independent 
of the agencies entrusted with administrative enfo rcement and their decisions shall be implemented 
by, and shall govern the practice of , such agencies . . . ."  (Emphasis added.)  The phrase "shall govern 
the practice of such agencies" re quires that enforcement agencies of  a Member (here, the EC) follow 
the reviewing tribunal's decisions.  That is, that revi ewing tribunal's decisions must be effective with 
respect to the Member's enforcement ag encies, and not just some of them.  
 
Where the German courts decide that a classification rule under the Common Customs Tariff 
should be interpreted in a particular way, GATT Ar ticle X:3(b) requires that decision to govern the 
practice of the EC's agencies entrusted with admini strative enforcement of the Tariff.  But because 
decisions of the German courts apply only to German  agencies, they do not govern the practice of all 
of the EC agencies entrusted with admi nistrative enforcement of the Tariff.  
 
With respect to procedures in member States regarding appeal mechanisms for review of 
customs decisions, the only allegation the Unite d States is making is that, precisely because the 
decisions by these appeal mechanisms do not have e ffect for some of the agencies of the EC, their 
availability does not discharge the EC's obligation to provide tribunals or procedures for prompt 
review and correction of customs decisions.  The United States is not alleging, as the EC suggests,
68 
that the procedures in member States would dischar ge the EC's obligation if they were sufficiently 
prompt.  The description of diverse member State appeal mechanisms set forth in our First Written 
Submission was provided by way of background, to de monstrate that the non-uniformity that exists in 
the administration of EC customs law carries through to the review of decisions by member State customs authorities.  In other words, the lack of uni formity of administration that exists in the first 
instance is not cured by the EC by the provision of  review tribunals or procedures that could render 
decisions with effect throughout the territory of the EC and could, in theory, engender uniformity. 
 
With respect to access on the part of traders to th e European Court of Justice, our allegation is 
                                                     
 
68EC Oral Statement, First Pa nel Meeting, paras. 72-77. WT/DS315/R 
Page A-32  
 
that the access the EC provides to this forum does not discharge the EC's obligation under 
Article X:3(b).  Even though decisions by the ECJ ma y have effect throughout the territory of the EC, 
the time it takes for questions to get presented to and decided by the ECJ and the fact that, in general, 
referral of questions to the ECJ is discretionary (except in the case of referrals by member State courts from which there is no further appeal) means that the ECJ is not a tribunal or procedure for the prompt 
review and correction of customs administrative decisions. 
 
The EC evidently does not contest this allegation,  as it argues that the tribunals or procedures 
it provides for the prompt review and correction of customs administrative decisions are the member State courts.  In this view, the ECJ is not itself a forum for the prompt review and correction of 
customs administrative decisions but, rather, an EC in stitution that assists the entities that are fora for 
the prompt review and correction of customs administrative decisions.  For the reasons discussed in the first part of this response, the United States di sagrees with the EC's contention that member State 
courts are fora that fulfill the EC's oblig ation of prompt review and correction. 
 36. What body(ies)/procedures are in place in the United States to discharge its obligations under Article X:3(b) of the GATT 1994? Please explain how recourse to this(ese) body(ies)/procedures works in practice. 
 
The United States notes, first, that US institu tions and procedures are not at issue in the 
present dispute.  Nevertheless, in the interest of illuminating the issues that are in dispute, the United 
States answers as follows. 
 
The bodies in place in the United States to disch arge its obligations under Article X:3(b) are 
the Office of Regulations and Rulings within US Cu stoms and Border Protection and the US Court of 
International Trade (CIT).  In general, a trader seeking review and correction of a customs decision 
made at a port of entry may pursue one of two options.  The first option is to seek review by the 
Office of Regulations and Rulings, through a pro cess known as further review by Headquarters of 
determinations on protests.  Under this process,  the Office of Regulations and Rulings provides 
objective and impartial review of decisions made at the ports of entry.  Its decisions are, in turn, 
appealable to the CIT.  The second option, as discuss ed in response to Question No. 34, is to request 
accelerated administrative disposition of a protest by CBP, which permits the trader to begin a CIT 
proceeding 30 days after making such a request if the protest is denied or merely not acted upon by 
the port.  
 
37. In paragraph 327 and footnote 162 of its First Written Submission, the European 
Communities suggests that the United States' criti cism of the ECJ's decision to allow revocation 
of binding tariff information in the Timmermans case is inconsistent with its criticism of a UK 
court's decision to disallow revocatio n in the Bantex case. Please comment. 
 
Precisely because the EC administers its cust oms laws through 25 different member State 
authorities without any centralized customs administration or other mechanism for achieving uniformity, both the situation described in Timmermans  and the situation described in Bantex  can 
engender non-uniform administration.  Under the Timmermans  scenario, a customs authority can 
revoke BTI on its own initiative notwithstanding the absence of any change in the underlying facts.  
Where other authorities had relied upon and followed th e BTI issued by the first authority, there now 
arises a non-uniformity.  The other authorities are not required by EC law to revise their classifications simply because the first authority decided on its own initiative to revoke BTI. 
 
At the same time, the Bantex  scenario may also give rise to a non-uniformity.  This would 
occur where a member State has i ssued BTI, then becomes aware of the existence of conflicting BTI 
issued by other States, is persuaded that its initia l decision was in error and is unable to amend that 
decision. 
  WT/DS315/R 
 Page A-33 
 
 
The seeming paradox that both of these scenarios may engender non-uniformity is resolved 
when one recalls that there is no EC-level custom s authority or other mechanism to ensure uniform 
administration.  Conversely, if there were a centr al authority responsible for issuance of BTI, both 
scenarios would be impossibilities.  Any inconsistenc y that might emerge would be systematically 
resolved at the EC level.  That w ould be consistent with Article X:3(a). But, it is not what exists today 
in the EC. 
 
38. In paragraph 454 of the European Co mmunities' First Written Submission, the 
European Communities submits that, since Article X:3(b) of the GATT 1994 refers to "tribunals" and "procedures" in the plural, th is means that WTO Members may have several 
tribunals, each of them covering a part of it s geography and being comp etent for the review of 
the administrative decisions taken by their respective customs offices. Please comment. 
 
The significance the EC attributes to use of the plural form in Article X:3(b) is not well 
founded.  Use of the plural form indicates a degree of flexibility.  A WTO Member is not constrained 
to have only a single tribunal or procedure, whether j udicial, arbitral or administrative, for the prompt 
review and correction of administrative action re lating to customs matters.  A Member might, for 
example, provide a judicial tribunal but also give traders the option of seeking review and correction by an arbitral tribunal (which might be quicker and less costly).  Or, a Member might provide an administrative tribunal for certain types of review (such as protests of classification or valuation decisions) and a judicial tribunal for other types of review (such as the imposition of penalties).  
Either of these scenarios would be consistent with use of the plural form in Article X:3(b).  By 
contrast, the EC's proposed interpretation would give a meaning to use of the plural form in Article X:3(b) that is inconsistent with the require ment that the decisions of tribunals or procedures 
for the review and correction of customs administ rative action govern the practice of "the agencies 
entrusted with administrative enforcement."  
 
It is not inconceivable that a WTO Member could provide several review tribunals or 
procedures, each covering a different part of its geography, in a manner consistent with Article X:3(b).  What is important is that the d ecisions of these tribunals be given effect for the 
Member's agencies as a whole, so  as to govern the practice of the Member's agencies entrusted with 
administrative enforcement of customs laws and not  engender non-uniform enforcement.  This might 
be accomplished where a Member had a single, centra lized customs agency, required to give effect 
throughout the Member's territory to the decisions of any tribunals reviewing its actions.  In that case, 
where the reviewing tribunal covering a given regi on issued a decision concerning interpretation of 
classification rules, for example, th e customs agency could at once im plement the tribunal's decision 
both in the particular region and throughout the cust oms territory.  This woul d be consistent with 
Article X:3(b).  However, where – as in the EC – re view tribunals cover partic ular agencies and there 
is no other mechanism to give eff ect to the decisions of individua l tribunals for the remaining EC 
agencies (that is, the customs authorities of other member States), the geographical fragmentation of 
review is inconsistent with Article X:3(b).    
 
39. Please comment on paragraph 79 of the Eu ropean Communities' Oral Statement at the 
first substantive meeting to the effect that, on average, review of the most recent 3 classification 
cases by the USCIT took four years. 
 
Preliminarily, the proposition for which the EC c ited the USCIT cases at issue is based on the 
incorrect premise that the United States is challe nging the promptness (or lack of promptness) of 
review and correction provided by EC member Stat e tribunals.  As discussed in response to Question 
No. 35, supra , the United States is not claiming that the EC would fulfill its obligation under GATT 
Article X:3(b) but for the fact that the review pr ovided by member State tribunals is not prompt.  
Accordingly, the point that the EC is trying to ma ke by referring to the time for disposition of cases 
by the USCIT is entirely irrelevant. 
 WT/DS315/R 
Page A-34  
 
Further, the actions of the USCIT are not at issu e in the present dispute.  Nevertheless, in the 
interest of illuminating the issues that are in dispute, the United States answers as follows. 
 
First, the EC's discussion at paragraph 79 of its Oral Statement ignores the fact that in the US 
courts the scheduling of proceedings is, to a signi ficant extent, conducted by mutual consent of the 
parties, subject to the final control of the court.  Th at was the approach taken in the three cases cited.  
It is notable that the USCIT itself, once having heard the issues at trial or oral argument, rendered decisions within, respectively, less than four months (Exhibit EC-99); less than four months 
(Exhibit EC-100); and less than seven months (Exhibit EC-101). 
 
Second, the EC exaggerates the time it took for the USCIT to decide the cited cases by 
referring to the time from the filing of a formal su mmons to final disposition.  While filing a summons 
formally commences an action, the action does not  really get underway until the plaintiff files a 
complaint that sets forth his particular allegations.  This may occur up to 18 months (or longer, by 
request) after a summons is filed.  Thus, in the case provided as Exhibit EC-101, for example, a 
summons was filed in April 2001 but was not perf ected by submission of a complaint until April 
2003. 
 
40. How should "prompt" be defined under Article X:3(b) of the GATT 1994? Please 
explain how this definition should be applied in practical terms. 
 
The term "prompt" in GATT Article X:3(b) should be defined according to its ordinary 
meaning, in context, and in light of the object and purpose of the GATT 1994.  The ordinary meaning 
of "prompt," as relevant here, is "without delay."  What it means for action to be taken without delay 
necessarily will depend on context.  The word "prompt" does not, by itself, connote a particular passage of time that will be relevant in all cont exts.  In the context of review and correction of 
administrative action, promptness may be a function,  for example, of the complexity of the case. 
 
From a practical point of view, it should not be necessary for this Panel to determine the 
precise point at which review and correction ceases to be prompt.  As discussed in response to 
Question No. 35, it is not the claim of the United States that the EC would be in compliance with 
Article X:3(b) but for the fact that the review and correction provided by member State tribunals is 
not prompt.  Rather, our claim is that given the fact that the decisions of member State tribunals do 
not govern the practice of EC customs agencies in  general, but only particular agencies in that 
member State, the existence of these tribunals does not discharge the obligation of the EC under 
Article X:3(b).    
The only tribunal whose decisions can be given effect so as to govern the practice of EC 
customs agencies in general is the ECJ.  However, in light of the steps that must be taken in order to 
get a question reviewed by the ECJ, the review  provided by that forum cannot conceivably be 
characterized as review "without delay."  Accordi ngly, while another dispute may confront a panel 
with the question of where to draw the line between  prompt and not prompt, this Panel does not need 
to answer that question. 
 
QUESTIONS FOR BOTH PARTIES
 
 
89. Could a system in which it is primarily incumbent upon a trader to assert its rights to 
achieve uniform administration on the part of the customs authorities in a particular WTO 
Member (for example, by instituting appeals to complain about the decisions/treatment of those 
customs authorities) comply with the obligations contained in Article X:3(a) of the GATT 1994? 
 
It is difficult to answer this question without  knowing about other features of the system 
hypothesized.  Depending on the mechanisms thr ough which traders asserted their rights, such a 
system might comply with Article X:3(a).  For example, a system in which a trader, upon  WT/DS315/R 
 Page A-35 
 
 
encountering a case of non-uniform administration, could appeal as a matter of right to a central 
authority and obtain a resolution of the matter within a relatively brief, set period of time might comply with that obligation.  We would contrast this  to a system in which the only way to reconcile a 
non-uniformity as a matter of right is through protracted judicial review of each instance of non-uniform administration separately.  That system would not fulfil a Member's obligation under 
Article X:3(a). 
 
90. At paragraph 11.70 of its report, the Panel in Argentina – Hides and Leather stated that "[t]he relevant question [in determining whether or not Article X:3(a) of the GATT 1994 is 
applicable] is whether the substance of such a measure is administrative in nature or, instead, 
involves substantive issues more properly deal t with under provisions of the GATT 1994". 
Please provide your understanding of this statemen t, particularly the reference to "a measure 
that is administrative in nature". In additi on, please explain in practical terms how the 
distinction between measures that are administrati ve in nature and those that are not is relevant 
for the application of Article X:3(a).  
 
The United States understands the quoted statement from Argentina – Hides and Leather  to 
make clear that the fact that the tools for the administration of laws, regulations, decisions and rulings of the kind described in paragraph 1 of Article X may take the form of measures does not put them 
outside the scope of Article X:3(a).  That article requires that certain specified measures of general application be administered in a uniform manner.  The obligation does not concern the substance of 
the measures being administered but, rather, the ma nner in which they are administered.  Thus, a 
Member may (as is the case for a part of the US cl aims under Article X:3(a) in this dispute) challenge 
the administration  of a measure without challenging its substance  (to use the terms in the Argentina – 
Hides and Leather  report).   
 
However, the administration of measures may ta ke any number of forms, including ones that 
are themselves measures.  (For example, a penalt y provision is a measure that is a means of 
administration of some other law or rule; it is a means of enforcing compliance with that underlying 
law or rule.)  The statement from Argentina – Hides and Leather emphasizes that measures may not 
only be objects  of administration, but also tools  of administration of other measures.  Furthermore, 
measures that are tools of administration (rather than  objects of administration) have administration as 
their "substance" (again, using the terms employed by the Argentina – Hides and Leather  Panel).  So, 
in the terminology of that report, measures that are administrative in nature are examined under 
GATT Article X:3(a) for their "substance"; by contrast, measures that do not administer other measures are examined under Article X:3(a) not for their "substance" but to see whether they are being administered in a uniform manner.  
 
The definition of "administrative" is "[p]erta ining to management of affairs; executive."
69  
"Executive," in turn, means "[p]ertaining to executio n; having the function of putting something into 
effect. . . ."70  Thus, a measure is administrative in nature where it has the function of putting 
something into effect.  In other words, it presumes the existence of a distinct law, rule or other 
measure and serves to execute or carry out that un derlying law, rule or other measure.  Again, a 
penalty measure is a good example.  A penalty m easure necessarily presumes the existence of some 
underlying measure.  It makes no sense  to speak of a penalty measure in the abstract, unconnected to a 
particular measure that is sought to be enforced.  A penalty measure has the function of putting into 
effect underlying measures, such as customs laws.  
Audit provisions are another good example.  Aud it provisions do not exist independently of 
the rules for which compliance is being audited.  They  have the function of putting rules into effect by 
                                                     
 
69The New Shorter Oxford English Dictionary , Vol. I, p. 28 (1993) (Exhibit US-54). 
70The New Shorter Oxford English Dictionary , Vol. I, p. 877 (1993) (Exhibit US-55). WT/DS315/R 
Page A-36  
 
verifying compliance with those rules.  
From a practical point of view, the nature of a measure as administrative is relevant to an 
evaluation of compliance with Article X:3(a), b ecause such a measure provides evidence of how the 
measures that it applies to are administered.  If different regions within the territory of a WTO 
Member use different administrative measures to put that Member's customs law into effect then, by 
definition, the Member does not administer its customs law uniformly. 
 
91. Please provide a copy of the list of proposals made by the United States contained in the document entitled "Elements of Potential EC Customs Reform" dated 22 December 2004. 
 
The list is included with this submission as Exhib it US-49.  As the United States explained at 
the first Panel meeting, we provided this list to the EC in December 2004 in an effort to reach a 
mutually agreeable solution to the present disput e.  The United States views pursuit of the proposals 
on this list as a reasonable way for the EC to come into compliance with its obligations under 
Article X:3 but does not view this as the only way for the EC to do so.   
 
92. Please comment on paragraph 7 of its th ird party submission where the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu argues that the test of "minor administrative variations" under Article X:3(a)  of the GATT 1994 referred to by the GATT 
Panel in EEC– Dessert Apples is not relevant for the present case. Does the applicability of this 
test depend upon the existence of certain factua l/other circumstances? If so, please explain and 
justify making reference to the specific terms of Article X:3(a). 
 
We agree with the statement by the Separate Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu for the reasons set out in paragraph 7 of  its third party submission.  At issue in the EEC – 
Dessert Apples  dispute was the fact that different EC member States required applicants to complete 
different forms for obtaining certain licenses.  To the extent the GATT Panel found such 
inconsistencies to be  "minimal" it was because they did not have a material affect on traders.  They 
did not affect traders' liability for customs duties or other aspects of their ability to bring goods into the territory of the EC and distribute and sell them in the EC.  Conversely, in the present dispute, we 
have provided evidence of a system that engend ers and fails to cure myriad divergences of 
administration in matters that go to the core of cu stoms administration and affect traders' liability for 
customs duty, as well as other aspects of their opera tions.  Such divergences hardly can be described 
as "minor administrative variations." 
 
93. In paragraph 21 of its Oral Statement at th e first substantive meeting, the United States 
submits that customs laws may be administe red through instruments which are themselves 
laws, such as in the case of penalty laws.  
(a) Please comment. 
 
(b) Could this argument apply to all laws, regulations, judicial decisions and  
  administrative rulings of general application referred to in Article X:1 of the 
  GATT 1994?   
(c) If so, please identify which types of laws, regulations, judicial decisions and  
  administrative rulings of general application. 
 
(d) What would be the impact and practical effect of such an interpretation on the 
  administration of matters other than customs matters?  
 
With respect to part (a) of this question, we  refer the Panel to our responses to Question 
Nos. 32 and 90.   WT/DS315/R 
 Page A-37 
 
 
 
With respect to parts (b) and (c), it is important  to recall that the laws, regulations, judicial 
decisions and administrative rulings of general a pplication referred to in Article X:1 of the GATT 
1994 are the objects of administration under Article X:3(a).  That is, they are the measures being administered.  In principle, any of these measures is  capable of being administered through tools that 
are themselves laws, regulations or other measure s.  We see no basis for distinguishing between 
measures of general application re ferred to in Article X:1 that are capable of being administered 
through other measures that are administrative in na ture and measures of general application that are 
not capable of being so administered. 
 
With respect to part (d) of the question, we  do not see the interpreta tion propounded as having 
an impact or practical effect on administration per se .  Under Article X:3(a), all of the measures of 
general application referred to in Article X:1 mu st be administered in a uniform manner.  That 
obligation applies regardless of the form th at the administration of a measure takes. 
 
The argument at paragraph 21 of our Oral Stat ement was a rebuttal to the EC's argument that 
differences in penalty provisions a nd audit procedures are outside the scope of Article X:3(a) because 
they amount to differences of substance rather than  differences of administration.  The EC assumes, 
incorrectly, that where provisions manifest themselves as laws, regulations, or other measures they necessarily cannot serve the administration of othe r measures and provide evidence of non-uniformity 
of administration of those other measures.  Accordingl y, the EC contends that with respect to penalty 
provisions and audit procedures, which in the EC ar e prescribed separately by each member State, the 
only obligation under Article X:3(a) is that each me mber State administer its own penalty provisions 
and audit procedures uniformly within its own territory.    
We countered that the EC's argument glosses ove r the fact that measures may also serve an 
administrative function.  It ignores the character of  penalty provisions and audit procedures as tools 
for the administration of EC customs law.  Viewed  that way, differences in penalty provisions and 
audit procedures from member St ate to member State are evid ence of non-uniformity in the 
administration of EC customs law.  
During discussion of this point at the first Panel meeting, the EC suggested that if the Panel 
were to accept the US argument with respect to measures such as penalty provisions and audit 
procedures, it would have widespread implications  for matters covered by Article X:1 other than 
customs matters.  The EC noted that in addition to covering customs matters, Article X:1 covers matters that commonly are regulated at regional levels  of government, including the sale, distribution, 
transportation, and insurance of imports.  The EC suggested that the US argument concerning 
penalties and audit procedures would require harmonization in these other areas as well. 
 
The principal flaw in the EC argument remains its disregard of the distinction between 
measures that are objects of administration and meas ures that serve in the administration of other 
measures.  The matters other than customs matter s described in Article X:1 – such as measures of 
general application affecting the sale, distribution,  transportation, and insurance of imports – are 
distinguishable from penalty provisions and audit procedures inasmuch as they are objects of 
administration rather than measures that serve an ad ministrative function.  As explained in responses 
to Question Nos. 29, 32, and 90, supra , penalty provisions and audit procedures necessarily presume 
the existence of some underlying set of laws or rules a nd serve to carry out that set of laws or rules.  
This is what makes them administrative in nature.  On the other hand, Article X:3(a) requires that 
measures affecting the sale, distribution, transpor tation, and insurance of imports themselves be 
administered in a uniform manner over whatever re gion within the territory of a WTO Member they 
apply.  Therefore, accepting the US argument c oncerning penalty provisions  and audit procedures 
would not have the dramatic con sequence that the EC suggests of compelling harmonization in a wide 
array of non-customs areas.  WT/DS315/R 
Page A-38  
 
94. With respect to the interpretation of the term "administration" in Article X:3(a) of the 
GATT 1994, do the parties consider that a distinction should be drawn between, on the one hand, administrative procedures applicable to and the treatment of traders and, on the other 
hand, substantive decisions and the results of admi nistrative processes that affect traders? If so, 
please explain the legal basis for the drawing of such a distinction. 
 
The United States sees no basis in Article X:3(a)  for the distinction in this question.  
Article X:3(a) requires uniformity of administratio n and is indifferent to the different forms that 
administration may take.  This question identifies tw o alternative forms that administration may take – 
i.e. administrative procedures applicable to and the treatment of traders, and substantive decisions and 
the results of administrative processes that affect traders.  By the former we understand the Panel to 
mean, for example, penalty and audit procedures.  By the latter we understand the Panel to mean, for 
example, particular decisions with respect to classification and valuation.  A WTO Member would not comply with the obligation of uniform administration by having uniformity with respect to one of these forms of administration but not the other.  QUESTIONS FOR THE PARTIES AND THIRD PARTIES
 
 109. How should the term "administer" be int erpreted for the purposes of Article X:3(a) of 
the GATT 1994? 
 
Interpretation of the term "administer" is discussed  at paragraphs 32 to 39 of the First Written 
Submission of the United States.  We also refer the Panel to our answers to Question Nos. 1, 12, and 
23, supra .  Finally, we refer the Panel to our answer  to Question No. 90, in which we discuss the 
meaning of the related term "administrative." 
 
110. Does the uniformity obligation in Article X:3(a) of the GATT 1994 mean that there 
should be no or only limited possibility for th e exercise of discretion in the administration of 
customs laws? 
 
It is not the case that the possibility of exercising discretion would always lead to 
non-uniform administration of customs laws, in breach of GATT Article X:3(a).  For example, 
day-to-day operational exercises of discretion – for example, on whether to inspect a particular 
shipment, whether to perform an audit of a particul ar importer, or whether to request supplemental 
documentation in support of a requested classification – probably would not give rise to an absence of uniformity of administration of customs laws.  111. Is the time taken to address a specific i ssue (including instances of divergences in 
administration) a consideration to be taken in to account for the purposes of the uniformity 
obligation in Article X:3(a) of the GATT 1994? If so, please explain why, making reference to 
the specific terms of Article X:3(a).   
The time taken to address a specific issue is a consideration to be taken into account for the 
purposes of the uniformity obligation in Article X:3( a) of the GATT 1994.  The time taken to address 
an issue is relevant to the effectiveness of Artic le X:3(a).  If a Member were permitted to allow non-
uniformity of administration to persist for indefi nite periods of time, as long as it cured the non-
uniformity eventually, the obligation of uniform ad ministration in Article X:3(a) would be rendered 
meaningless.  This would be contrary to the prin ciple of effectiveness in treaty interpretation, as 
consistently recognized by the Appellate Body.
71 
                                                      
71See, e.g., Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear , 
WT/DS121/AB/R, para. 88 (adopted 12 January 2000); Appellate Body Report, Japan – Taxes on Alcoholic 
Beverages , WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, p. 12 (adopted Nov. 1, 1996); Appellate Body  WT/DS315/R 
 Page A-39 
 
 
 
An illustration of the relevance of time to cons ideration of compliance with the obligation of 
uniform administration is the case of differential a pproaches in the EC to the treatment for customs 
valuation purposes of vehicle repair  costs covered under warranty.72  In its report on administration of 
valuation rules in the EC, the EC's Court of Aud itors stated that it brought this matter to the 
Commission's attention in 1990.73  In its First Written Submission, the EC states that it addressed the 
non-uniformity at issue through the adoption of a regulation in 2002.74  Thus, while the non-
uniformity of administration apparently was cured,  it took 12 years to cure it.  The United States 
submits that an interpretation of Article X:3(a) unde r which a Member will be deemed to administer 
its laws uniformly where it reconciles non-uniform administration 12 years after such administration 
is brought to the attention of the relevant au thorities would render the obligation of uniform 
administration a nullity, in contraventio n of the principle of effectiveness. 
 
112. With respect to the WTO objective of securi ty and predictability in the international 
trading environment (which was recently referred to by the Appellate Body in the context of 
tariff commitments at paragraph 243 of its rep ort in EC – Chicken Cu ts WT/DS269/AB/R and 
WT/DS286/R), please explain whether, why and how it is relevant for the interpretation of Article X:3(a) of the GATT 1994. 
 
As we discussed in our opening statement at the first Panel meeting, the EC suggests an 
exceedingly narrow interpretation of Article X:3(a) of the GATT 1994.
75  It argues that the obligation 
of uniform administration is subject to a variety of limitations, the net effect of which is to deprive the 
obligation of uniform administration of any effectiv eness.  Thus, the EC characterizes Article X:3(a) 
as a "minimum standards" obligation, qualified by "p ractical realities," which is breached only when 
non-uniform administration exhibits a particular pattern.76 
 
The Panel should reject the EC's proposed interpre tation of Article X:3(a) as lacking any basis 
in the text and as inconsistent with the principl e of effectiveness.  In this connection, it would 
diminish an obligation in a covered agreement, contra ry to Article 3.2 of the DSU.  As explained in 
that article, the dispute settlement system provi des security and predictability through proper 
interpretation of the covered agreements and by  not adding to or diminishing the rights and 
obligations of Members.77 
 113. Are the expectations of traders relevan t to an interpretation and application of 
Articles X:3(a) and X:3(b) of the GATT 1994? If so, please explain why and how, making reference to the specific language of those Articles. 
 
The expectations of traders are relevant to an interpretation and application of Articles X:3(a) 
and X:3(b).  Under the customary rules of treaty in terpretation of public international law, a treaty 
must be interpreted in accordance with the ordinary meaning to be given to its terms in their context 
and in the light of the object and purpose of the treaty.
78  The text and context of Articles X:3(a) and 
                                                                                                                                                                     
Report, United States – Standards for Reformulated and Conventional Gasoline , WT/DS2/AB/R, p. 23 (adopted 
May 20, 1996). 
72See US First Written Submission, paras. 88-89 (discussi ng Court of Auditors Valuation Report, paras. 
73-74 (Exhibit US-14)). 
73Court of Auditors Valuation Report, para. 73 (Exhibit US-14). 
74EC First Written Submission, para. 397. 
75US Oral Statement, First Pa nel Meeting, paras. 14-23. 
76See EC Oral Statement, First Panel Meeting, para. 24; EC First Written Submission, paras. 235, 238, 
241. 
77The United States also notes that it questions the reference to "security and predictability in the 
international trading environment" as an object and purpose of the WTO Agreement. 
78Vienna Convention on the Law of Treaties , done at Vienna, 23 May 1969, 1155 U.N.T.S. 331, 8 ILM 
679 (July 1969) ("VCLT"), Article 31(1). WT/DS315/R 
Page A-40  
 
X:3(b) indicates that the focus of Article X as a whol e is on fairness to traders.  Thus, for example, 
Article X:1 requires Members to publish certain meas ures of general application "promptly in such a 
manner as to enable governments and traders to become acquainted with them."  (Emphasis added.)  
As the Panel in Argentina – Hides and Leather  observed, "While it is normal that the GATT 1994 
should require this sort of transparency between  Members, it is significant that Article X:1 goes 
further and specifically references the importance of tr ansparency to individual traders. . . .  Thus, it 
can be seen that Article X:3(a) requires an examinati on of the real effect that a measure might have on 
traders operating in the commercial world."
79   
 
Similarly, Article X:3(a) requires not only uni form administration, but also impartial and 
reasonable administration of customs measures, and Article X:3(b) requires the provision of tribunals 
or procedures for the prompt review and correction of customs administrative action.  The Appellate 
Body in US – Shrimp  described these standards as pertaining to  "transparency and procedural fairness 
in the administration of trade regulations."80  The obvious beneficiaries of the standards pertaining to 
transparency and procedural fairness are traders.   
 
Moreover, it is notable that the second sentence of  Article X:3(b) requires that the practice of 
agencies entrusted with the admi nistrative enforcement of custom s matters be governed by the 
decisions of reviewing tribunals or procedures "unless an appeal is lodged with a court or tribunal of 
superior jurisdiction within the time prescribed for appeals to be lodged by importers " (emphasis 
added).  In other words, a customs agency may app eal a tribunal's decision, and the tribunal's decision 
need not govern the agency's practice during the pend ency of the appeal, but the agency may not be 
allowed more time to lodge its appeal than importe rs would be allowed to lodge their appeals.  The 
reference to the time prescribed  for appeals to be lodged by im porters as a benchmark is further 
evidence that the text and context of Articles X: 3(a) and X:3(b) supports a focus on traders. 
 
114. Does the obligation contained in Arti cle X:3(a) of the GATT 1994 require overall 
uniformity in administration or does it require un iformity in administration in each and every 
case? Does the answer depend upon the nature of the challenge under Article X:3(a)? If so, 
please explain. If overall uniformity is accepta ble under Article X:3(a), what would be the 
practical/numerical threshold and/or benchmark fo r demonstrating that Article X:3(a) has been 
violated? 
 
Article X:3(a) does not specify whether it requires overall uniformity in administration or 
uniformity in administration in each and every case.  However, in the present dispute, the United 
States is not challenging the EC for failing to achie ve uniformity in administration in each and every 
case.  It is challenging the EC for failing to achieve overall uniformity in administration of its customs 
laws.   
 
For the reasons set forth in our answers to Question Nos. 16, 24, and 33, supra , it is not 
necessary to identify a practical/numerical thresh old and/or benchmark fo r demonstrating that 
Article X:3(a) has been violated.  What the Unite d States has demonstrated is that the system of 
customs law administration in the EC – consisting of  25 independent authorities, with no central 
agency or other mechanism to reconcile inconsiste ncies in administration among those authorities – is 
such that it does not achieve the uniform administrati on that Article X:3(a) requires.  As it is evidence 
of how this system is designed and operates that show s the EC's failure to meet its obligation, what is 
relevant is the fact that divergences occur and are not reconciled, not the frequency of particular types 
of divergences.  115. Please comment on the submission made by Japan in paragraph 8 of its third party submission to the effect that, in assessing the United States' claim under Article X:3(a) of the 
                                                     
 
79Panel Report, Argentina – Hides and Leather , paras. 11.76-11.77. 
80Appellate Body Report, US – Shrimp , para. 183.  WT/DS315/R 
 Page A-41 
 
 
GATT 1994, it is necessary for the Panel to anal yze whether the alleged divergences exist, as 
claimed by the United States, and if so, whether such divergences exist to a degree that would be 
considered to be inconsistent with Article X:3(a) in light of the particular customs system as a 
whole. 
 
Please see the US answers to Qu estion Nos. 16, 24, 33, and 114, supra .  Japan's suggestion 
for assessing the United States' claim "in light of th e particular customs system as a whole" would 
appear to carry a danger of creating a separate Article X:3(a) standard for every single WTO Member.  At issue is one of the most important aspects of the rules-based trading system, and assessment of whether uniformity of administration is bei ng achieved cannot vary in this fashion. 
 116. In paragraph 2 of Japan's Oral Statem ent at the third party session of the first 
substantive meeting, Japan relies upon the "m inimum standards" of transparency and 
procedural fairness referred to by the Appellate  Body in US – Shrimp to argue that "[a]n 
administration of regulations lacking 'uniform ity' [for the purposes of Article X:3(a) of the 
GATT 1994] would in general terms be unjust, biased, inequitable, partial and opaque – in 
other words, unfair and nontransparent". Fo llowing this line of reasoning, would the 
requirements of transparency and procedural fairness apply to: (i) the processes or the treatment of traders in the context of the applicat ion of customs laws; and/or (ii) the substantive 
customs decisions to which traders are subject?  
 
We refer the Panel to our response to Question No. 94, supra . 
 
117. In paragraph 7.268 of its report, the Panel in US – Hot Rolled Steel (WT/DS184/R) stated that "we note that Japan has not even alleged, much less established, a pattern of decision-making with respect to the specific matters  it is raising which would suggest a lack of 
uniform, impartial and reasonable administration of the US anti-dumping law [under 
Article X:3(a) of the GATT 1994]". Please comment on the Panel's finding that a pattern of decision-making is needed in order to prove a violation of Article X:3(a). 
 
We refer the Panel to our response to Question No. 9, supra . 
 
118. What is meant by the words "pertaining to" in Article X:1 of the GATT 1994? Would 
rules governing the operational procedures of bodies that oversee or are somehow involved in the administration of customs laws – such as, for example, the EC Customs Code Committee – 
qualify as laws, regulations, judicial decisions a nd administrative rulings of general application 
"pertaining to" the classification or the valuation of products for customs purposes? 
 
The words "pertaining to" in Article X:1 have thei r ordinary meaning, which, in this context, 
is "[h]av[ing] reference or relation to."
81  These words stand in distinction to the word "affecting," the 
other connector term in the first sentence of Artic le X:1.  That is, the first sentence describes two 
categories of laws, regulations, judicial decisions a nd administrative rulings of general application: (1) 
those that pertain to certain subject matter, and (2) those that affect certain other subject matter.  The 
word "affecting," as used here, means "influenc[ing]."82 
 
In the view of the United States, it is unlikel y that rules governing the operational procedures 
of bodies that oversee or are somehow involved in the administration of customs laws – such as, for example, the EC Customs Code Committee – would qualify as laws, regulations, judicial decisions 
and administrative rulings of general application "per taining to" the classification or the valuation of 
products for customs purposes .  Such rules governing operational procedures may lack the relation to 
the subject matter of classification and valuation necessary to qualify as "pertaining to" that subject 
                                                     
 
81The New Shorter Oxford English Dictionary , Vol. II, p. 2173 (1993) (Exhibit US-56). 
82The New Shorter Oxford English Dictionary , Vol. I, p. 35 (1993) (Exhibit US-57).  WT/DS315/R 
Page A-42  
 
matter. 
 
119. Do penalty laws/provisions applicable to violations of customs laws fall within the scope of the measures referred to in Article X:1 of the GATT 1994? If so, please explain making reference to the relevant terms of Article X:1. 
 
We refer the Panel to our res ponses to Question Nos. 29 and 32, supra . 
 
120. What is the significance of Article XXIV:12 of the GATT 1994 for the interpretation of Article X:3(a) of the GATT 1994? 
 
In its First Submission, the EC suggests that its obligations under Article X:3(a) are somehow 
qualified by Article XXIV:12.
83  This is not the case.  Article XXIV:12 requires each WTO Member 
to "take such reasonable measures as may be available to it to ensure observance of the provisions of 
[the GATT] by the regional and local governments w ithin its territories."  It is a recognition that for 
certain WTO Members, particular regulatory matters implicated by GATT obligations may be 
constitutionally outside the competence of the central government.  In such cases, the central government is required to take su ch reasonable measures as may be available to it to ensure that 
regional and local governments comply with the releva nt obligations.  As the EC itself has argued in 
prior GATT disputes,
84 this is a narrow provision concer ning the implementation of certain 
obligations.  It is not a general excuse from or limitation on the applicability of Article X:3(a).  
Indeed, the panels that have examined Article XXIV :12 have consistently recognized that it must be 
construed narrowly, to avoid "imbalances in right s and obligations between unitary and federal 
States."85 
 
121. Making reference to the specific terms of  Article X:3(b) of the GATT 1994, please 
explain whether or not the obligation to ensure prompt review and correction of administrative 
action is confined to first instance reviews by administering authorities. 
 
Article X:3(b) refers to tribunals or proce dures for the "prompt review and correction of 
administrative action relating to customs matters."  It is "administrative" action that must be eligible 
for prompt review and correction under this provisi on, as opposed to adjudicat ory action by inferior 
tribunals or procedures.  This reference suggests th at the obligation of prompt review and correction 
applies to the first tribunal or procedure that  a Member provides for the purpose of review and 
correction that meets Article X:3(b)'s requirement  of independence of the agencies entrusted with 
administrative enforcement. This interpretati on is supported by the separate reference in 
Article X:3(b) to appeals to a "court or tribunal of superior jurisdiction within the time prescribed for 
appeals to be lodged by importers." 
 
122. What does "correction" mean in Article X:3(b) of the GATT 1994?  
We understand "correction" as used in Article X:3( b) to have its ordinary meaning, which in 
this case is "[t]he action of pu tting right or indicating errors."
86  The tribunals or procedures that a 
Member provides pursuant to Article X:3(b) must ha ve the authority not only to review administrative 
                                                      
83EC First Written Submission, para. 220. 
84See, e.g., GATT Panel Report,  Import, Distribution and Sale of Alcoholic Drinks by Canadian 
Provincial Marketing Agencies , L/6304, BISD 35S/37, para. 3.52 (adopted 22 March 1988). 
85GATT Panel Report, Canada – Measures Affecting the Sale of Gold Coins , L/5863, paras. 63-64 
(17 September 1985) (not adopted); see also  GATT Panel Report, United States – Measures Affecting Alcoholic 
and Malt Beverages , DS23/R, BISD 39S/206, para. 5.79 (adopted 19 June 1992) (supporting narrow 
construction of Article XXIV:12). 
86The New Shorter Oxford English Dictionary , Vol. I, p. 516 (1993) (Exhibit US-58).  WT/DS315/R 
 Page A-43 
 
 
action but also to put right errors made by th e administrative agencies whose actions they are 
reviewing. 
 
123. What is the legal relationship betw een Article X:3(a) of the GATT 1994 and 
Article X:3(b) of the GATT 1994, if any? 
 
Articles X:3(a) and X:3(b) each provide obliga tions concerning transparency and procedural 
fairness to traders.  As a legal matter, each subpa ragraph provides context for the interpretation of the 
other in accordance with the customar y rules of treaty interpretation reflected in Article 31(1) of the 
Vienna Convention. 
 WT/DS315/R 
Page A-44  
 
ANNEX A-2 
 
RESPONSES OF THE UNITED STATES TO QUESTIONS POSED BY  
THE EUROPEAN COMMUNITIES AFTER THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005) 
 
 1. In the United States, matters pertaining to taxes or other charges, or affecting the sale, 
distribution, transportation, insurance, warehou sing inspection, exhibition, processing, mixing 
or other use of products, are frequently governed  by laws or regulations of the 50 states. The 
content of such laws and regulations may var y considerably. Does the United States consider 
that the administration of such state laws and regulations is uniform, as required by Article X:3(a) GATT? Please explain. 
 
The United States notes that the administration of measures of the United States is not at issue 
in the present dispute.  In additio n, we note that the question by the European Communities (EC) does 
not concern customs law, which is the type of me asure whose administration is in dispute in these 
proceedings.
1  Finally, we do not understand the EC to be contending that its substantive customs law 
varies from place to place within the terr itory of the European Communities. 
 
2. Does the United States consider that the US  Court of International Trade has provided 
prompt review in the cases referred to as  Exhibits EC-99 to EC-101? Please explain . 
 
Please see the US answer to Panel Question No. 39. 
 3. According to US law (19 US 1515 [a], Exhibit EC-66), US Customs shall normally decide on a protest within two years from the date the protest was filed. Does the United States consider this provision to be in accordance with Article X:3(b) GATT? Please explain. 
 
As was the case with Question No. 2, this qu estion appears to be based on the mistaken 
premise that the United States is challenging the promptness (or lack of promptness) of review and 
correction provided by EC member State tribunals.  Further, the practices of US Customs are not at 
issue in the present dispute.  Nevertheless, in the in terest of illuminating the issues that are in dispute, 
the United States answers as follows.   
The United States considers that its system for the review and correction of customs 
administrative decisions is entirely consistent w ith its obligations under GATT 1994 Article X:3(b).  
Under the provision cited in this question, a protest filed by an importer serves to maintain the status 
quo pending decision.  If the importer prevails, he is  entitled to accrued interest on any amounts to be 
refunded.  He is thus fully indemnified.    
Moreover, an importer is not compelled to follow  the protest procedure referred to in this 
                                                     
 
1Moreover, the premise to this question is incorrect, inasmuch as the scope of the laws and regulations 
to which it refers does not reflect the text of Article X of the General Agreement on Tariffs and Trade 1994  
("GATT 1994").  The obligation of uniform administration in Article X:3(a) concerns the administration of laws, regulations, decisions and rulings of the kind described in Article X:1.  The laws, regulations, decisions 
and rulings of the kind described in Article X:1, in turn, are not laws, regulations, decisions and rulings 
pertaining to any "taxes or other charges" – as this question suggests.  Nor are they laws, regulations, decisions and rulings affecting the sale, distribution, transporta tion, insurance, warehousing inspection, exhibition, 
processing, mixing or other use "of products" generally – as the EC question also suggests.  In both cases, 
rather, Article X:1 establishes a link to "impor ts or exports," which this question ignores.  WT/DS315/R 
 Page A-45 
 
 
question.  A trader is entitled to ask for accelerated disposition of a protest by the port.  If the port does not allow such a protest within 30 days it is d eemed denied; the deemed denial is then ripe for 
appeal directly to the US Court of International Trade (USCIT) without further administrative action.  
 
4. Under Article X:3(b) GATT, tribunals or pr ocedures for the review of customs decisions 
shall be independent of the agencies entrusted wi th administrative enforcement. Does the United 
States consider that the review provided by US Customs is in accordance with this requirement? Please explain. 
 
The United States notes that the review of cust oms administrative decisions in the United 
States is not at issue in the present dispute.  Nevertheless, in the interest of illuminating the issues that 
are in dispute, the United States answers as follows.  
The review provided by US Customs is in accordance with the requirement of Article X:3(b) 
that a tribunal or procedure for review and correc tion be independent of the agencies entrusted with 
administrative enforcement.  The office in Cust oms that is responsible for reviewing customs 
administrative actions is the Office of Regulations and Rulings, which is part of Customs and Border 
Protection headquarters.  That office is functiona lly independent of the ports whose decisions it 
reviews.  It comes under the jurisdiction of the A ssistant Commissioner of Cu stoms for the Office of 
Regulations and Rulings whereas the ports come unde r the jurisdiction of the Assistant Commissioner 
for Field Operations.  And, as an office that is separate and independent from the ports, the Office of 
Regulations and Rulings in fact provides for an objective and impartial review of administrative 
action. 
 
5. Does the United States consider that Article X:3(b) GATT requires WTO Members to establish or maintain a tribunal for the review of customs decisions with competence for the 
entire territory of the WTO Member in question? Does the United States consider that such a 
tribunal must be a tribunal of first instance, or could it also be a tribunal of higher instance? Please explain. 
 
Please see the US answers to Panel Question Nos. 35 and 121.  WT/DS315/R 
Page A-46  
 
 ANNEX A-3 
 
RESPONSES OF THE EUROPEAN COMMUNITIES TO QUESTIONS POSED BY THE 
PANEL AFTER THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005 ) 
 
 QUESTIONS FOR THE EUROPEAN COMMUNITIES:
 
 
41. As a matter of EC law, are the European  Communities and/or the member States of the 
European Communities responsible for discharging the obligations contained in Articles X:3(a) and X:3(b) of the GATT 1994? 
 As a matter of EC law, both the institutions of the European Communities (EC) and the 
authorities of the member States, each of them acting within their sphere of competences, are 
responsible for discharging the obligations contained in Articles X:3(a) and (b) GATT. 
 As a matter of international law, the EC is so lely responsible for discharging the obligations 
contained in Articles X:3(a) and (b) GATT. 
42. As a matter of EC law, are the European  Communities and/or the member States of the 
European Communities responsible for the admini stration of: (a) Council Regulation (EEC) No. 
2913/92 of 12 October 1992; (b) Commission Regulation (EEC) No. 2454/93 of 2 July 1993; (c) 
the Integrated Tariff of the European Communi ties established by Council Regulation (EEC) 
2658/87 of 23 July 1987? 
 As a matter of EC law, both the institutions of the EC and the authorities of the member 
States, each of them acting within their sphere of competences, are responsib le for the administration 
of the instruments referred to in the Panel's question. 
43. The minutes of the DSB meeting held on 21 March 2005 (WT/DSB/M/186, para. 29) 
record the European Communities as having st ated that the European Communities has in 
place harmonized customs rules and institutio nal and administrative measures – enforced by 
the Commission and the European Court of Justi ce – to prevent divergent practices.  With 
respect to those comments, please clarify which "divergent practices" the European 
Communities was referring to? 
 The EC was referring to any divergent practices which, in the absence of the EC instruments 
currently in place to secure uniform administra tion, might arise in the area of EC customs 
administration. The EC was not referring to any actual examples of divergent practices. 
44. In paragraph 22 of its Oral Statement at the first substantive meeting, the European 
Communities submits that, where laws and regulatio ns exist at a sub-federal level, all that 
Article X:3(a) of the GATT 1994 requires is that such laws are administered in a uniform 
manner in the area where they apply.  How is th is argument relevant in the area of EC customs 
law which is within the Communi ty's exclusive competence?  
 This argument is not relevant where the EC has exclusive competence, and where no laws of 
the member States exist. However, the US claims also relate to areas where the EC does not have 
exclusive competence, and where member States have legislated. One example is penalties for 
violations of customs laws, which are set out in laws of the EC member States. Another example  WT/DS315/R 
 Page A-47 
 
 
 might be the general administrative laws of the memb er States, where such laws are relevant to the 
activities of the customs authorities in areas which are not harmonized by EC legislation. 
45. In paragraph 16 of its Oral Statement at th e first substantive meeting, the United States 
submits that "the EC suggests a limitation of 'p ractical realities' but identifies no standard by 
which that limitation might be assessed.  Similarly, while it asserts that 'a minimum degree of 
non-uniformity is de facto unavoidable' it offers no standard for judging the degree of non-
uniformity that may exist without running afoul of Article X:3(a)".  Please respond to the United States' comments.  
 The EC does not agree with the US comment. In paragraph 241 of its First Written 
Submission, the EC has described th e applicable standard as follows: 
Accordingly,  whether a particular member meets the requirement of 
"uniformity" cannot be established merely by looking at an individual example of practice. Rather, uniformity can be assessed only on the basis of an overall pattern of customs administration. 
Only if, on the basis of such general patterns, a WTO Member's 
administration of its customs laws  can be shown to be non-uniform, 
is the standard of Article X:3(a) GATT violated. 
This standard is fully based on  the findings of the Panel in US – Hot Rolled Steel  .
1 The same 
approach was followed by the Panel in US – Corrosion-Resistant Steel Sunset Review .2 
Several of the third parties have advocated a very similar test to be applied under 
Article X:3(a) GATT. For instance, Australia has ar gued that "given the complex nature of customs 
systems, some divergences may occur from time to  time, but these should not be so widespread or 
frequent as to render the customs administrati on inconsistent with Article X:3(a) GATT".3 Similarly, 
Japan has submitted the following:4 
Therefore, if the Panel considers the cases referred to by the United 
States as divergences, then furt her examination is necessary to 
determine whether the EC's administration lacks uniformity to the "degree" that would be inconsistent with Article X:3(a) of the GATT.  Such a determination should be based on whether the cases mentioned by the United States are individual outcomes of the EC's customs administration, or evidences of the non-uniformity of the 
overall administration of the EC's customs regulation that may have a 
significant impact on the competitive situation. 
 It is noteworthy that in other cases, the United States has itself argued in favour a very similar 
test. For instance, in US – Hot Rolled Steel , the US argued as follows:
5 
The United States also warns that a distinction must be made 
between the way one specific case was dealt with and the overall 
administration of laws and regulations  envisaged in Article X:3.  The 
                                                      
 1 Panel Report, US – Hot Rolled Steel , para. 7.268. 
 2 Panel Report, US – Corrosion Resistant Steel Sunset Review , para. 7.310. 
 3 Australia, Oral Statement, para. 6. 
 4 Japan, Oral Statement, para. 5. 
 5 Panel Report, US – Hot Rolled Steel , para. 7.264. Similar arguments were also advanced by the 
United States in Panel Report, US – Stainless Steel , para. 6.47. WT/DS315/R 
Page A-48  
 
 United States stresses the fact that Japan is not arguing that the 
overall AD practice of the United States is arbitrary or does not ensure the necessary due process ri ghts, but only challenges the way 
this case has been dealt with. 
The US is therefore wrong to submit that the EC suggests no standard for the application of 
Article X:3(a) GATT. The standard proposed is  the one supported by the existing case law under 
Article X:3(a) GATT, which has been endorsed by numerous members of the WTO, including the United States itself.  
At what point instances of non-uniformity would have to be regarded as so widespread and 
frequent as to constitute an overall pa ttern of non-uniformity will have to be decided on the facts of 
the particular case, taking into account the features of the system of customs administration in 
question. However, that this standard is difficult to  define in numerical term s in the abstract does not 
mean it could not be applied by a Panel.  
The United States has not provided a single example of lack of uniformity in the EC's system 
of customs administration, let alone demonstrated the existence of an overall pattern of non-
uniformity. A small number of cases in a particular area clearly would not suffice for the purposes of 
establishing an overall pattern of non-uniformity. Since the US has so far not come close to 
discharging its burden of proof, the EC considers it di spensable for the Panel to define which specific 
number of cases in a given area might constitute a pattern of non-uniformity. 
46. In paragraph 25 of its Oral Statement at the first substantive meeting, the European 
Communities submits that "there is a minimal threshold in Article X:3(a) of the GATT, which 
implies that a variation in administrative pr actice must have a significant impact on the 
administration of customs laws in order to consti tute a breach of Article X:3(a) GATT".  Please 
clarify in practical/quantitative terms what  the European Communities means by a "minimal 
threshold" in this respect.  
In EEC – Dessert Apples , the Panel held that minor variations in the administrative practice of 
EC member States could not be held to  be contrary to Article X:3(a) GATT.
6 
The EC believes that this minimum threshold reflects the fact that Article X:3(a)  GATT does 
not require uniformity for its own sake, but rather in tends to protect the interests of traders. This has 
been recognized by the Panel in Argentina – Hides and Leather , which has stated that Article X:3(a) 
GATT requires an examination of the real effect which a measure might have on traders:7 
Thus, it can be seen that Article X:3(a) requires an examination of 
the real effect that a measure might have on traders operating in the 
commercial world.  This, of course, does not require a showing of trade damage, as that is generally not a requirement with respect to violations of the GATT 1994.  But it can involve an examination of whether there is a possible impact on the competitive situation due to 
alleged partiality, unreasonableness or lack of uniformity in the 
application of customs rules, regulations, decisions, etc. 
From the reports in EEC – Dessert Apples and Argentina – Hides and Leather , it can thus be 
deduced that in order to constitute a violation of Article X:3(a) GATT, a pattern of non-uniformity in 
                                                     
 
 6 GATT Panel Report, EEC – Dessert Apples , para. 12.30 (for the full citation, cf. EC First Written 
Submission, para. 233). 
 7 Panel Report, Argentina – Hides and Leather , para. 11.77.  WT/DS315/R 
 Page A-49 
 
 
 the administration of laws must have an impact on the competitive situation of traders, and that this 
impact must be significant. 
The EC does not contest that non-uniformity with respect to matters which have an impact on 
customs duties owed by the trader could have a significant impact on the competitive situation, and 
would thus be relevant under Article  X:3(a) GATT. For this reason, differences in tariff classification 
or customs valuation will, if they entail differen ces in duties payable, constitute more than a minor 
variation from the point of view of Article X: 3(a) GATT, provided they occur on a large scale. 
However, the US has also rai sed claims regarding issues where there is no obvious impact on 
the competitive situation of traders. One exampl e would be the alleged procedural differences 
regarding the local clearance procedure, where it is not clear in which way such differences, even if 
they existed, would have a significant impact on traders.8 Another example would be the claims made 
by the US regarding valuation audits.9 
The EC would point out also that as the complaini ng party, it is for the US to show that there 
is an impact on traders, and that such an impact is significant from the point of view of Article X:3(a) GATT. 
47. United States refers to divergent decisions taken by member State authorities 
throughout its First Written Submission.  For exampl e, the United States refers to divergence in 
classification decisions: generally (paragraph 21); with respect to network cards for personal 
computers (footnote 33); with respect to drip i rrigation product (footnote 33); and with respect 
to unisex articles or shirts (paragraph 76).  Fur ther, the United States refers to divergence in 
customs valuation decisions (paragraphs 25 and 93).  Can such divergence in decisions be 
challenged under Article X:3(a) of the GATT 1994? 
First, the EC would like to stress that it contest s that there is a divergence in decisions taken 
by member States both generally and in respect of the specific issues referred to by the US.
10 
Second, whereas individual decisions may constitute relevant evidence for establishing whether there 
is a pattern of non-uniformity, individual decisions  cannot be challenged under Article X:3(a) of the 
GATT. In this respect, the EC can refer to its answer to the Panel's Question No. 45. 
48. In paragraph 5 of its First Written Subm ission, the European Communities submits that 
Article X:3(a) of the GATT 1994 is a provision laying down minimum standards for the administration of customs law, not a legal basi s for harmonization of the systems of customs 
administrations of WTO Members.  In addition, in paragraphs 231 and 232 of its First Written Submission, the European Communities submits th at, since Article X:3(a) only lays down 
minimum standards, it does not oblige WTO Memb ers to meet the highest possible standards 
achievable at a given point in time.  Please explain what "minimum standards" are demanded 
with respect to the uniformity obligation in Article X:3(a).  Please explain in practical terms how these "minimum standards" can and should be  applied with respect to the specific areas of 
customs administration referred to by the United  States – namely, tariff classification, customs 
valuation and customs procedures. 
Article X:3(a) GATT merely requires that WTO Members administer the laws and 
regulations covered in Article X:1 GATT in a unif orm manner. This means that on the basis of the 
                                                     
 
 8 US First Written Submission, para. 116. 
 9 US First Written Submission, para. 96. 
 10 Cf. EC First Written Submission, footnotes 158 and 177.  WT/DS315/R 
Page A-50  
 
 overall pattern of administration, the trader should have a reasonable assurance as to the way in which 
the WTO Member in question will admi nister its laws and regulations. 
In contrast, Article X:3(a) GATT does not specify in which way a WTO Member 
should administer its laws and regulations, or wh ich tools it should employ in order to ensure 
a uniform administration of such laws and regu lations. It is on this basis that the EC has 
submitted that Article X:3(a) GATT is no basis for the harmonization of the customs laws of 
WTO Members. That Article X:3(a) GATT is not a prescriptive provision has also been 
stressed by a number of the thir d parties in the present case.11 
49. Please comment on the substance of the follo wing statement by the Advocate General in 
the Timmermans case (paragraph 41 of Exhibit US-21): 
"... the tariff classification of equivalent goods cannot vary from 
one member State to another according to the differing 
assessments given by the various national customs authorities, as this would fail to take into acco unt the objective of securing the 
uniform application of the customs nomenclature within the Community, which is intended, inter alia, to avoid the 
development of discriminatory treatment as between the traders 
concerned."  
The EC agrees with this statement. Community law does not permit identical
12 goods to be 
classified in different ways. 
The EC would like to remark that in this respect, Community law is more demanding than 
Article X:3(a) GATT, which is concerned only  w ith the overall administration of a Member's laws 
and regulations, and not w ith individual instances of tariff classification. 
50. Please explain the purpose of binding tariff information, making reference to relevant 
provisions of EC rules where possible.  To the extent that there is any inconsistency, please explain how such purpose can be reconciled with  the following statement by the Advocate 
General in the Timmermans case (Exhibit US-21,  para. 60): "As regards the objective of the 
uniform application of the customs nomenclature , I consider that, while a Commission decision 
ordering the revocation of BTI is necessarily aimed at, and has the effect of, ensuring the 
correct and uniform application of the customs nomenclature, the same cannot be said of the 
practice whereby the customs authorities decide at their own discretion to revoke BTI which they have issued following a change in their own interpretation of the relevant nomenclature, 
even though, in so doing, the authorities in question may be motivated by the desire to align 
their interpretation with that given by other customs authorities".  
The purpose of binding tariff information is to  provide holders with a measure of legal 
certainty as regards the tariff classification of goods  throughout the EC. To this extent, BTI also has 
the objective of contributing to the uniform administration of tariff classification rules throughout the EC. 
                                                     
 
 11 Australia, Oral Statement, para. 5;  Japan, Oral Statement, para. 4. 
 12 The EC understands as "identical" goods which correspond to one another in all respects which are 
relevant for the tariff classification in question. It appears that the Advocate General used the term "equivalent" 
in the same sense.  WT/DS315/R 
 Page A-51 
 
 
 This objective can be deduced from numerous provisions of Community law concerning the 
granting and effect of binding tariff information, in  particular Article 12 of the CCC and Articles 5, 
10, and 11 of the Implementing Regulation. 
The EC disagrees with the statement of Advo cate General Léger referred to above. The 
statement of the Advocate General assumes that a re vocation of BTI could be decided by the customs 
authorities "at their own discretion". The correct clas sification in the combined nomenclature is not a 
matter of discretion, and neither is the revocation of BTI which has been found to be incompatible 
with the combined nomenclature. Similarly, the cu stoms authorities must not align themselves to just 
any interpretation of the combined nomenclature, but to the correct  interpretation.  
Furthermore, it must be remembered that like the Commission, the customs authorities of the 
member States are bound by the combined nomenclat ure, which they must interpret and apply 
correctly. Therefore, the Advocate General is wrong to suggest that unlike a revocation by the Commission, a revocation by the customs authoritie s of a member State cannot be assumed to serve 
the purpose of a uniform interpretation of the Combined Nomenclature. 
It is important to note that the Advocate General was not followed by the Court in 
Timmermans. In its judgment, the Court did not refer to any discretion to be exercised by the customs 
authorities. Rather, the Court made clear that the Cust oms authorities may revoke the BTI only if it is 
wrong: 
13 
The issue of a BTI is made on the basis of an interpretation by the 
customs authorities of the legal provisions applicable to the tariff classification of the goods concerned and is subject to proper 
justification for that interpretation.  
Where, on more detailed examination, it appears to the customs 
authorities that that interpretation is wrong
, following an error of 
assessment or evolution in the thinking in relation to tariff classification, they are entitled to co nsider that one of the conditions 
laid down for the issue of a BTI is no longer fulfilled and to revoke 
that BTI with a view to amending the tariff classification of the goods concerned. 
That the application of this case law helps, rath er than hinders, the uniform application of EC 
customs law is convincingly illustrated by the Bantex case, in which the UK customs authorities 
relied on the Timmermans judgment to revoke a BTI wh ich had erroneously been issued contrary to 
an applicable classification regulation.
14 
On a more general note, the EC would like to remark that opinions of Advocate Generals are 
not legally binding in any sense, and are of limite d legal value. The opinion rendered by an Advocate 
General is not in any way biding on the Court, and does not form part of its judgment. Rather, as the 
Court of Justice has clarified, it constitutes an "individual reasoned opinion" of the Advocate General 
as a Member of the Court of Justice.15 
The opinion of the Advocate General may provide  useful background for the interpretation of 
a judgment of the Court of Justice where the Cour t has followed the Advocate General. In contrast, 
                                                      
 13 Exhibit US-2, paras. 24-25 (emphasis added). 
 14 Cf. EC First Written Submission, fn. 162 and para. 469. 
 15 Order of the Court of Justice, Case C-17/18, Emesa Sugar , [2000] ECR I-665, para. 14 (Exhibit EC-
102). WT/DS315/R 
Page A-52  
 
 where, as in Timmermans, the Court has not follo wed the Advocate General, the Opinion of the 
Advocate General is of very limited legal releva nce, and cannot be relied upon for ascertaining the 
correct interpretation of EC law. 
51. Article 11 of the Implementing Regulation  provides that "[b]inding tariff information 
supplied by the customs authorities of a member State since 1 January 1991 shall become 
binding on the competent authorities of all the member States under the same conditions".  In 
light of this provision : 
 
(a) Please identify the practical measur es in place to enforce Article 11 of the 
Implementing Regulation and explain how those practical measures operate in 
practice. 
 Article 11 is contained in a regulation of  the European Commissi on. In accordance with 
Article 249 (2) EC Treaty, a regulation is binding in its entirety and directly applicable in all member 
States. Accordingly, no further general measures ar e necessary to ensure th e applicability of this 
provision. 
 
 Should a member State fail to respect its obligation under Article 11 of the Implementing Regulation, the normal mechanisms for securing the application of Community law would apply. Any holder of BTI which is not recognized contrary to the provisions of Community law could obtain judicial protection before the courts of the memb er State in question. In addition, the European 
Commission could bring infringement proceedings against a member State which does not respect its 
obligation to recognize BTI. 
 
(b) Please explain whether and, if so, in what circumstances, binding tariff 
information that is issued by one member State is binding on the competent authorities of other member States, making reference to all relevant EC rules. 
 Article 5 Nr. 1 of the Implementing Regul ation provides that BTI is binding on the 
administrations of all member States when the cond itions laid down in Articles 6 and 7 are fulfilled. 
Accordingly, all BTI issued in accordance with Comm unity law, and which continues to be valid, is 
binding on the competent authorities of all member States.  
(c) Are there any circumstances when binding tariff information that is issued by 
one member State is not binding on the competent authorities of other member 
States?  If so, please explain in what ci rcumstances that will be the case, making 
reference to all relevant EC rules. 
 No. If BTI is binding on one member State, it is binding on all member States, and vice versa. 
As regards the conditions under which BTI may cease to be valid, the EC can refer to paragraph 115 
of its First Written Submission. 
52. Article 8.1 of the Implementing Regulation provides that "[a] copy of the binding tariff 
information notified ... and the facts ... shall be  transmitted to the Commission without delay by 
the customs authorities of the member State co ncerned".  Does the transmission of binding 
tariff information from customs authorities to th e Commission contemplated by Article 8.1 of 
the Implementing Regulation occur in practice?  What does the Commission do with the 
binding tariff information once notified pursuant to Article 8.1 of the Implementing 
Regulation? 
 The transmission of binding tariff information from the customs authorities to the 
Commission contemplated by Article 8.1 of the Implementing Regulation does occur in practice. The  WT/DS315/R 
 Page A-53 
 
 
 data received by the Commission is introduced into th e EBTI data base in accordance with Article 8.3 
of the Implementing Regulation. 
53.  Article 10(2)(a) of the Implementing Regulation provides that the customs authorities 
may require the holder of binding tariff informat ion, when fulfilling customs formalities, to 
inform the customs authorities that he is in po ssession of binding tariff information in respect of 
goods being cleared through customs.  Please provide evidence of how often and in what 
circumstances customs authorities exercise thei r discretion in Article 10(2)(a) to require 
disclosure of relevant binding tariff information. 
Member States may invoke Article 10 (2) (a) of the Implementing Regulation wherever this is 
warranted by the particular circumst ances of the case, in particular if  there is a doubt about the correct 
classification of the good and if there is a suspicion that the trader may be in possession of BTI. The 
member States and the European Commission do not keep statistics on the number of times this 
provision is invoked . 
54. Please comment on the EC Commission's statement at page 12 of An Explanatory 
Introduction to the modernized Customs Code (E xhibit US-32) that "it is proposed to extend 
the binding effect of [binding tariff information] al so to the holder(s) of the decision in order to 
avoid the system only being used where the applican t is satisfied with the result" in light of 
paragraph 308 of the European Communities' First Written Submission calling into question 
the United States' submission that binding tari ff information is not binding on holders thereof. 
Currently, BTI is binding only on the customs authorities (cf. Article 5 of the Implementing 
Regulation). In contrast, no provision currently pr ovides that BTI is binding on the holder, although 
the customs authorities may, on the basis of  Ar ticle 10 (2) (a) of the Implementing Regulation, 
require the holder to inform them , when fulfilling customs formalities, that he is in the possession of 
BTI.  
The Commission services are currently consideri ng including a provision in the modernized 
customs code which would render BTI binding al so on the holder. The provision as currently 
envisaged would read as follows:16 
Classification or origin decisions shall be binding only in respect of 
the tariff classification or determination of the origin of goods and on 
– the customs authorities, as against the holder, only in respect of 
goods on which customs formalities ar e completed after the date of 
the decision; 
– on the holder, as against the customs authorities, from the date he 
receives notification of the decision. 
 The objective of such a provision would be to achieve a balance of obligations between the 
customs authorities and the holder, and to further incr ease the transparency of the BTI system. In this 
way, the provision in question reflects the EC's  commitment to the continuous development and 
modernization of EC customs legislation. 
In contrast, the EC does not consider that the provision in question is in any way essential for 
compliance with the EC's obligation under Article X:3(a) GATT. As the EC has already explained,17 
                                                      
 16 Exhibit US-33, Article 14 (3). It should be stresse d that this provision, as all other provisions in  
Exhibit US-33, is purely a working text, and does not constitute the official position of the European 
Commission, or of any other EC institution. WT/DS315/R 
Page A-54  
 
 BTI is granted primarily for the benefit of the hol der, who can therefore normally be expected to 
invoke it. If the holder is dissatisfied with the BTI he has received, the normal course of action would be for the holder to challenge the BTI in the cour ts. Moreover, there is no reason to assume that other 
EC customs authorities would classify the good in question differently just because the BTI is not 
invoked. 
Finally, it should be noted that the version of  the EBTI data base available to the customs 
authorities allows the customs authorities to search for the name of the applicant or of the holder.
18 
Accordingly, if there is a suspicion that a particular trader may be a holder of BTI for the goods in question, this can easily be confirmed through consultation of the data base. 
55. In light of the "Administrative Guidelin es on the European Binding Tariff Information 
(EBTI) System and its Operation" (Exhibit EC-32), which expressly state that the Guidelines 
are not legally binding, are customs authorities required to make referen ce to the EBTI system 
before issuing binding tariff information?  If so , please indicate the legal basis for such an 
obligation and the circumstances in which reference to the EBTI system is required
. 
The Administrative Guidelines as such are not legally binding. However, in the 
administration of EC customs law, all member St ates are bound by the duty of cooperation (Article 10 
EC).  
This means that member States must take due  account of the administrative guidelines. 
Moreover, they must use all tools available to en sure the proper and uniform administration of EC 
customs law. In this context, it is noted that th e establishment of the EBTI data base is explicitly 
foreseen in Article 8 (3) of the Implementing Regulation. 
On this basis, member States are required to duly consult the EBTI data base in all 
appropriate cases. In which specific cases consultation of the EBTI data basis should occur, and how 
extensive a particular search should be, has to be de termined on a case-by-case basis. In this context, 
the EC member States are guided by the criteria set  out in the Administrative Guidelines on the EBTI 
system.19 
56. The "Administrative Guidelines on the European Binding Tariff Information (EBTI) 
System and its Operation" state at page 8 that, where two or more member States disagree on 
the correct classification fo r a particular good, the Custom s Code Committee should be 
informed.  Please explain the practical mechanis ms in place to ensure that the Customs Code 
Committee is duly informed in such circumstances. 
 As a first step, the member States concer ned should consult with one another. Such 
consultation can be done through any appropriate means. member States  have a list of contact persons 
in each customs authority which they can contact in such cases, which is made available to the 
member States through the Circa Extranet. 
 If the disagreement persists, the matter must be  raised to the Customs Code Committee. In 
legal terms, the basis for this is Article 249 CCC and Article 8 of Regulation 2658/87, according to 
which the Customs Code Committee may examine any question concerning customs legislation or the 
common customs tariff, either at the initiative of the chairman or at the request of a member State's 
representative. In practice, the responsible offici al in the member State concerned will submit the 
                                                                                                                                                                     
 17 Cf. EC First Written Submission, para. 309. 
 18 EC First Written Submission, para. 111. 
 19 Cf. Exhibit EC-32, p. 7.  WT/DS315/R 
 Page A-55 
 
 
 issue to the Commission, which will then put it on  the agenda of the Customs Code Committee in 
accordance with Article 3 (2) (c) of the Committee's Rules of Procedure.20 
57. In paragraph 320 of its First Written Submission, when discussing the utility of the 
EBTI  system for detecting divergences in binding  tariff information issued by different customs 
authorities, the European Communities concedes that product descriptions might vary but that 
searches can be undertaken using a variety of ot her parameters.  Please explain using concrete 
examples which parameters could be used in or der to ensure that such divergences can be 
detected. 
 First of all, it appears necessary to recall that  there are two versions of the EBTI data base, 
one available to the public, the other, containi ng additional information, accessible to the Commission 
and the customs authorities of the member States.21 The EC understands the Panel's question to relate 
to the public version of the data base. 
The public version of the EBTI data base allo ws searches of valid BTI by issuing country, 
start and end date of validity, BTI reference, CN code, keyword, or product description. As the EC 
has explained, the keyword facility also includes a translation facility, which allows translation of 
keywords into the official Community languages.  
Typically, therefore, if a search using the product description does not yield results, a 
promising search strategy will be to identify th e CN codes which might be considered for the 
classification of the products, and to sear ch them using appropriate keywords. 
Furthermore, to help enquiries using keywor ds, the enquirer can make a "keyword search". 
Such a search reveals all keywords available in alph abetical order.  To use the keyword search, the 
enquirer need only insert the first few letters of a word and all words in the browse that begin with 
those letters will be shown.   
Finally, it should be mentioned that BTI of ten also contain an image of the product 
concerned, which will help with assessing whether a product classified in an existing BTI is 
identical to the product bei ng considered by the enquirer 
58. With respect to the work undertaken  by the Customs Code Committee: 
(a) In respect of which specific customs matters does the Customs Code Committee 
have the authority to reconcile differences among the member States?  
 On the basis of Article 249 CCC, the Custom s Code Committee may deal with any issue 
concerning the interpretation or application of custom s legislation. Similarly, on the basis of Article 8 
of Regulation 2658/87, the Committee may deal  with any matter concerning the Combined 
Nomenclature or the Taric nomenclature. 
With respect to the present and the following ques tions, the EC would like to clarify that it is 
not entirely precise to refer to the Committee as "rec onciling differences". In particular, this is not 
correct in all cases where the Committee is consulte d on measures intended to ensure uniformity, such 
as for instance classification regulations or explanator y notes. In these cases, it is the instrument itself 
which will ensure a uniform application of Community  law; it is not the Committee as such which is 
"reconciling" a difference. 
(b) As a practical matter, how does the Customs Code Committee prioritize matters 
before it? 
                                                      
 20 Exhibit US-9. 
 21 EC First Written Submission, para. 110. WT/DS315/R 
Page A-56  
 
 First of all, the work of the Committee is carri ed out in the various sections of the Committee, 
as listed in Article 1 (1) of the Committee's Rules of Procedure.  
For each meeting of the Committee, the Chairm an will draw up the agenda in accordance 
with Article 3 of the Committee's Rules of Procedur e. The agenda will include all matters put before 
the Committee by the Commission, including drafts of  all measures on which the Committee is to be 
consulted under the comitology procedure, as we ll as all matters referred to the Committee by a 
member State. 
From a practical point of view, the Chairman may tend to address more urgent matters earlier 
than less urgent matters. However, the Committee w ill address all issues that need attention at a given 
point in time. 
(c) How frequently do each of the various  sections of the Customs Code Committee 
meet? 
 From 2002 to 2004, the number of meetings of  the Customs Code Co mmittee has been as 
follows: 
 
2002  Total number of meetings of the Customs Code Com.  77 
 
2002  Total number of days     113,5  2003  Total number of meetings of the Customs Code Com. 47  
2003  Total number of days     77,5 
 
2004  Total number of meetings of the Customs Code Com 85  2004  Total number of days     118,5 
 
An overview of the number of meetings pe r section is provided as Exhibit EC-103.  
(d) Can working groups of the Customs Code Committee make decisions and/or 
take action that could be considered as  decisions/action of the Customs Code 
Committee?  If so, please identify  the types of decisions/action. 
 No. Working groups merely prepare the work of the Committee. 
 
(e) In paragraph 87 of its First Wri tten Submission, the European Communities 
submits that, where justified by the complexity of a particular issue, the Customs Code Committee may hear repre sentatives of the concerned industry 
or traders and has done so in the past.  Please identify the number of occasions 
and circumstances in which industry rep resentatives and traders were consulted 
by the Customs Code Committee. 
 A list of organizations and traders invited to take part in meetings of the Customs Code 
Committee with indication of the subject, number of the meeting and the day in which it took place is 
attached as Exhibit EC-126. It covers the period from end-1999 to today.  
(f) What criteria does the Customs Code Committee rely upon in determining 
whether or not divergence in a particular area of customs administration should 
be the subject of an EC Regulation?  WT/DS315/R 
 Page A-57 
 
 
 A regulation will always be an act of the Comm ission, not of the Committee. Therefore, it is 
in the first place the Commission, not the Committe e which must decide whether a regulation would 
be the appropriate measure. Where required by Community law, the Committee will of course be 
consulted on the proposed measure in accordan ce with the applicable comitology procedure. 
The question whether a  specific matter should be addressed through a regulation or through 
other instruments cannot be answered in general, but would depend on the specific issue in question. 
One relevant factor would certainly be whether th e issue must be addressed through an instrument 
which is legally binding and directly applicable in  all member States, in which case a regulation might 
be the preferred instrument. 
(g) In paragraph 277 of its First Writte n Submission, the European Communities 
submits that "[d]ocuments relating to the Customs Code Committee, including 
agendas and summary records of meetings, are available on the public register of comitology of the European Commissi on, which is available to the public 
through the internet".  The excerpt of the webpage through which these documents are available (contained in Exhibit EC-73) states that the "register 
does not contain those documents that are not sent to the European Parliament".  
Does this mean that agendas and summary records of meetings are sent to the 
European Parliament?  Which other documents "relating to the Customs Code Committee" are available thro ugh the relevant website? 
 Yes, agendas and summary records are sent to the European Parliament. Generally speaking, 
no other documents are available through the relevant website. 
 
(h) Could the exception contained in Article 4(3) of Regulation (EC) No. 1049/2001 
of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Counc il and Commission documents (Exhibit 
EC-74) ever be invoked with respect to any documents prepared by the Customs 
Code Committee?  If so, please expl ain in what circumstances, providing 
relevant practical examples, if possible. 
 The exception contained in Article 4(3) of Regulation (EC) No. 1049/2001 can in principle 
also apply to documents relating to the Customs Code Committee. In accordance with Article 4 (3), 
this would require that disclosure of the docum ent would seriously undermine the institution's 
decision-making process. 
This provision has been invoked in one cas e concerning access to working documents of a 
working group of the Tariff and Statistical Nomenc lature Section of the Customs Code Committee. 
An annulment action against the decision to re fuse access to the documents is currently pending 
before the Court of First Instance. 
(i) Regarding binding tariff information: 
(i) For the purposes of Article 9 of the Implementing Regulation, how are 
differences in binding tariff information identified?  
 As the EC has already set out in its First Written Submission,
22 differences in tariff 
classification may be identified in a number of ways. First, the difference may be noted by the customs authorities in the course of their normal work when classifying products or deciding on 
requests for BTI. One tool throu gh which the customs authorities may detect divergences is the EBTI 
data basis. However, customs authorities may also learn about divergent practices in other ways, e.g., 
                                                     
 
 22 EC First Written Submission, para. 314. WT/DS315/R 
Page A-58  
 
 through discussions of classification issues with their contact points in other administrations or within 
the Customs Code Committee, or through public sources. 
Moreover, traders may also draw the attention of  the member States' customs authorities or of 
the Commission to the existence of practi ces in the field of tariff classification. 
(ii) How are differences in binding tariff information brought to the 
attention of the Committee? 
 The EC can refer to its answer to the Panel's Question No. 56.  
 
(iii) Please explain in practical terms how the Committee reconciles 
differences in binding tariff informatio n that are brought to its attention 
pursuant to Article 9 of the Implementing Regulation.  Please make 
reference to any relevant examples. 
 The Committee
23 is frequently asked to give an opinion on measures proposed by the 
Commission which will secure a uniform application of the CN, such as classification regulations and 
EC explanatory notes. In addition, the Committee also  may adopt opinions on specific issues of tariff 
classification, which will be reflected in the records of its meetings. 
 
(iv) How many cases of differences in binding tariff information have been 
put forward to the Committee for re conciliation?  How did those cases 
come to be on the Committee's agenda?  What was the outcome in each of those cases, including the propos als made by the Committee and the 
action taken by the EC Commission, if any?  How long did it take to 
resolve those cases? 
 Given the short amount of time available, the EC is not yet able to provide an answer to this 
part of the question. The EC will provide its answer  to this part of the Panel's question as soon as 
possible. 
(Reply received on 3 October 2005):  
From 1.1.2000 until today, 196 cases involving perceived divergences between BTIs have 
come before the Customs Code Committee. 
Out of these cases, 178 were referred by the customs authorities of one or more member 
States, whereas 18 were brought befo re the Committee by the Commission. 
3 of these cases were resolved following a judgmen t of the Court of Justice, 78 led to the 
adoption of a classification regulation by the Commission, 9 to the adoption of a CN explanatory note, 
3 to the adoption of a Commission decision on the inva lidation of BTI, 43 cases led to conclusions of 
the Committee, and in 4 cases, the matter  was submitted to the HS committee. 
The average processing time until conclusion has been about 13 months. This average 
includes periods necessary for translation of lega l measures and internal decision-making of the 
European Commission.
 
(j) Regarding customs valuation: 
(i) In paragraph 77 of its First Written Submission, the United States 
submits that the Customs Code Committee does not have the authority 
                                                      
 23 On the term "reconciliation", cf. above the EC's answer to Question No. 58 (a).  WT/DS315/R 
 Page A-59 
 
 
 to examine individual customs valuation cases with a view to reconciling 
differences in administration from member State to member State.  Please comment. 
 In accordance with Article 249 CCC, the Co mmittee may address any question concerning 
customs legislation, including valuation issu es. The Committee may thus examine any question 
regarding the interpretation and application of valuation rules, including the question whether 
divergences have occurred in particular instances.  
Another matter is that the function of the Committee is not to administer valuation rules in 
individual instances. Accordingly, the Committee will  not substitute itself for the individual customs 
authorities or the competent courts of the member States in pending cases. 
(ii) In what circumstances will/must the Customs Code Committee consider 
divergences among member States in their application of EC rules on customs valuation? 
 The Committee will consider any divergence in th e application of EC valuation rules which is 
brought before it by the Commission or a member State. 
 
(iii) Please explain in practical terms how the Committee reconciles 
differences in the application of EC rules on customs valuation.  Please make reference to any relevant examples. 
 The Committee may issue opinions, which can ta ke the form of conclusions or commentaries 
to the EC valuation rules. The conclusions of the Committee are contained in the EC Valuation 
Compendium.
24 The Commission will also consult the Committee on any draft amendments to the 
valuation rules contained in the Implementing Regulation.  
(iv) How many cases of divergences in  application of rules on customs 
valuation have been put forward to the Committee for reconciliation?    
How did those cases come to be on the Committee's agenda?  What was 
the outcome in each of those cases,  including proposals made by the 
Committee and the action taken by the EC Commission, if any?  How long did it take to resolve those cases? 
 An overview of issues discussed in the valua tion section of the Customs Code Committee in 
the 3-year period from mid 2002 to mid 2005 is attached as Exhibit EC-104.  
 
(v) In paragraph 29 of the Commission's replies to the Court of Auditors 
Special Report No 23/2000 concerning valuation of imported goods for customs purposes (Exhibit US-14), the Commission states that "[u]nder the rules of the Customs Code regarding the Valuation Committee the 
Commission has no power to ask member States' administration to 
render account of the treatment applie d to a given operator in each of 
these states.  The Code Committee tries to establish rules, guidelines or 
other conclusions, usually without examining individual cases".  Please 
comment. 
                                                     
 
 24 Cf. EC First Written Submission, para. 130, and Exhibit EC-37. WT/DS315/R 
Page A-60  
 
 It is correct that under the Rules of Procedur e of the Customs Code Committee, there is no 
specific provision given the Commission a power to ask member States' to provide specific information. 
However, in the administration of customs laws , as in the administration of EC law generally, 
member States are bound by the duty of cooperation (Article 10 EC). This du ty of cooperation implies 
a duty of facilitating the Commission's tasks as guardian of the Treaty, including a duty to provide all 
information which is necessary for the Commission in  order to ascertain whether member States have 
applied Community law correctly. This has been explicitly confirmed by the European Court of 
Justice in its case law:
25  
The member States are under a duty, by virtue of Article 5 of the 
Treaty, to facilitate the achievement of the Commission' s tasks, 
which consist in particular, pur suant to Article 155 of the EEC 
Treaty, in ensuring that the provisions of the Treaty and the measures taken by the institutions pursuant thereto are applied. A member State's refusal to cooperate with the Commission for the purpose of 
the latter' s investigations to establish whether or not Community law 
has been infringed by rules and practices applied in that State 
therefore constitutes a failure by that State to fulfil its obligations. 
 Moreover, there is no general pr oblem with transmission of information by the member States 
to the Commission in the area of customs valua tion. Another matter is, as the EC has already 
remarked, that it is not the function of the Committee to substitute itself for the individual customs 
authorities or the competent courts of the member States in pending cases.  
 
(k) With respect to paragraphs 103–104 of the European Communities' First 
Written Submission: 
(i) Please clarify with respect to which matters does the Customs Code 
Committee adopt opinions through the comitology procedure.   
 The Customs Code Committee adopts opinions under the comitology procedure in the 
following matters:  
• General legislation 
• Counterfeit and pirated goods 
• Customs procedures with economic impact 
• Customs valuation 
• Customs warehouses and free zones 
• Duty-free arrangements 
• Favourable tariff treatment (end-use of goods) 
• Movements of air or sea passengers' baggage 
• Origin 
• Repayment 
• Single Administrative document 
• Tariff and statistical nomenclature – tariff classification//HS//TARIC/Textile/BTI 
• Economic Tariff questions - Quotas 
• Transit 
                                                     
 
 25 Case 272/86, Commission/Greece , [1988] ECR 4875 (Exhibit EC-105). Article 5 EC is now 
Article 10 EC.  WT/DS315/R 
 Page A-61 
 
 
 (ii) Please provide detail regarding th e subject-matter of opinions adopted 
by the Customs Code Committee on qu estions relative to the application 
and interpretation of the combined nomenclature.  What procedures 
apply with respect to such opinions? 
 Opinions of the Customs Code Committee may relate to any matter of EC customs law. 
From the legal point of view, where the Committee adopts opinions outside of the regulatory 
or management procedure, the Committee may do so by simple majority.26 Typically, however, 
opinions of the Committee will be adopted in cases where the approach is the subject of broad 
agreement in the Committee. Wh ere issues are controversial, a legally binding measure may be 
preferred. 
(iii) Can the Customs Code Committee ad opt opinions on matters other than 
those adopted through the comitology procedure and those adopted on questions relative to the application and interpretation of the combined 
nomenclature?   If so, please iden tify and explain the procedures for 
their adoption. 
 In accordance with Article 249 CCC, the Comm ittee can adopt opinions on all matters of 
Community customs legislation. The procedures are those explained in the answer to the preceding 
question.  
(l) In paragraph 4 of Joined Cases 69 and 70/76, Dittmeyer, [1977] ECR 231 
(Exhibit EC-31), the European Court of Justice notes that the opinions of the 
Customs Code Committee are not lega lly binding and suggests that such 
opinions may not be followed in certain circumstances.  Please specifically identify the circumstances in which an opinion of the Customs Code Committee 
may not or will not be followed by the EC Commission, authorities of member States and/or any other relevant body.  Please provide statistics, if any, of 
instances when the opinion of the Cu stoms Code Committee has not been 
adopted/followed. 
 Opinions of the Customs Code Committee are not  legally binding. However, as the Court has 
also stated in the judgment in question, they c onstitute an important means of ensuring the uniform 
application of the common customs tariff and as su ch may be considered as a valid aid to the 
interpretation of the tariff. 
Member States' customs authorities are not legally bound by the opinions of the Customs 
Code Committee. However, they are bound by th e duty of cooperation (Article 10 EC), which 
includes an obligation to contribute to the uniform a pplication of Community law. For this reason, EC 
member States are bound to give due weight to inte rpretations of EC customs law set out in opinions 
of the Customs Code Committee. 
From a practical point of view, it must be underlined that opinions of the Committee typically 
reflect a common approach agreed by all member States. Accordingly, member States will normally observe such agreed opinions as a matter of course. 
59.  In paragraph 316 of its First Written Submission, the European Communities submits 
that individual traders "frequently approach the Commission or member States authorities with particular problems of customs classificati on, who can then decide to take the necessary 
action, including raising the issue before the Customs Code Committee".  Are there any rules 
                                                     
 
26  Cf. Article 3 of the Comitology Decision (Exhibit US-10). WT/DS315/R 
Page A-62  
 
 and/or guidelines in addition to the principles of good administrative behaviour applicable to 
the EC Commission indicating what the Commis sion and member State authorities should do 
and within what timeframes when approached by individual traders? 
If a trader submits a complaint regarding an  infringement of Community law by the 
authorities of a member State, the principles set out in the Commission Communication on the 
relations with the complainant (Exhibit EC-11) will apply. 
Otherwise, the Commission's Code of Conduct contained in Annex to the Commission's 
Rules of Procedure (Exhibit EC-12) will be applicab le. Point 4 of the Code of Conduct contains rules 
for dealing with inquiries. According to these ru les, the Commission servi ces undertake to answer 
enquiries in the most appropriate manner and as quickly as possible. Moreover, correspondence is 
normally to be replied to within 15 days, unless the complexity of the matter does not allow a 
response within such time-frame 
60. According to the binding tariff informatio n issued by the customs authorities of the 
United Kingdom, Ireland and the Netherlands (c ontained in Exhibit US-22), the blackout 
drapery lining the subject of the binding tariff in formation were coated with textile flocking and 
were classified under heading 5907 of the EC Combined Nomenclature.  Please explain why 
these products should be classified under he ading 5907 making reference to the specific terms 
and meaning of heading 5907. 
The products subject of these BTI are products wh ere textile fabric has been coated with 
plastics which in turn has been co ated by textile flock. The classifi cation in these BTI has been made 
in accordance with General Interpretative Rul es 1 and 2 of the Harmonized System and the 
Harmonized System Explanatory Note (G) (1) to heading 59.07 (Exhibit EC-127). 
61. Providing all relevant evidence, please expl ain whether and, if so, how the allegedly 
conflicting binding tariff information for blackout  drapery lining came to the attention of the 
EC Commission. 
On a preliminary point, the EC would like to r ecall that Germany has not issued any BTI, so 
that there can be no conflicting BTI. Moreover, as the EC has already explained, there is no 
contradiction between the BTI issued and the classification decision of the German customs 
authorities.
27  
The EC institutions first became aware of this case first through Inside US Trade of 
November 12, 2004 (Exhibit EC-1), which reported on a submission made by Rockland Industries to 
USTR following USTR's request for comments on th e US consultation request in the present case. 
The US raised the case directly with the EC  fo r the first time in its First Written Submission 
in the present case. Since then, the US has also raised the BDL case at a technical meeting between 
US Customs and Border Protection and DG TAXUD in Washington on 14 July 2005. A copy of a note handed over by US Customs to DG TAXUD is attached as Exhibit EC-106. 
62. In paragraph 407 of its First Written Submission, the European Communities submits 
that the Valuation Section of the Customs Code Committee examined the issue of the 
application of Article 143(1)(e) of the Implementi ng Regulation by Spanish customs authorities 
but did not establish any incompatibility with EC la w or lack of uniformity.  If so, why was the 
matter referred to a working group of the Committ ee?  Currently, at what stage are discussions 
                                                     
 
 27  EC First Written Submission, para. 331 et seq.  WT/DS315/R 
 Page A-63 
 
 
 of the working group with respect to this issue?  When is a final decision due by the Committee 
on this issue?  How long will it take before the issue is finally resolved by the Commission? 
In the case of Reebok, the firm concerned has not accepted the position of the Spanish 
administration on the application of certain provisions of the EC Customs Code and Implementing Provisions
28 to a particular commercial situation and fo llowing various interventions the Commission 
presented the elements provided by Reebok to the Committee (for confidentiality reasons, Reebok 
was not identified as such).  
During the meetings of the Customs Code Committee on 1st October and 20th December 2004, 
the views of delegates were that  the facts tende d to show that the parties were related, as was 
previously concluded by the Spanish authorities.  
Since similar cases had been raised by two other member States in was considered that, in 
2005, further work was desirable in this context. It  was also recalled that since similar cases had come 
in for attention, and these relate to manufact uring and processing operations which have become 
significant in trade and economy terms, the Commissi on decided to carry further the work on the basis 
of a working group of the Committee.  
In August 2005 Reebok submitted, at the Commissi on's request, material indicating that there 
could be a divergent approach in another member  State. This material will now be looked at. 
 The working group will begin to meet and work  shortly. It is intended that the group will 
produce concrete outputs which will both address th e general interpretati on and application of 
Article 143(1)(e), and the specific elements which ha ve been the subject of disagreement between the 
customs authorities in Spain and the firm in question. 
 
63. In paragraph 44 of its Oral Statement at the first substantive meeting, the European 
Communities submits that "EC valuation rules are quite detailed and guide the EC customs authorities in all relevant circumstances".  Please  explain how this statement can be reconciled 
with the EC Commission's replies to the Court of Auditors Special Report No 23/2000 
concerning valuation of imported goods for customs purposes (Exhibit US-14) to the effect that 
EC valuation rules are, to a large extent, based  on simple but imprecise concepts which the 
WTO legislator has tried to clarify in particular  by establishing a range of sub-concepts without 
however the margin of appreciation for the cust oms authorities being in reality significantly 
reduced. 
 The EC would like to remark that the statement referred to in the question refers in the first 
place to the rules of the WTO Valuation Agreement.  
As regards EC valuation rules, the EC mainta ins that these rules are detailed and cover all 
relevant aspects of valuation practice, and thus  provide comprehensive guidance for EC customs 
authorities on all questions of customs valuation. Th at valuation rules acquire application to complex 
factual situation, and that occasionally, difficulties of interpretation or application may occur, is not in 
contradiction with this assessment. 
64. With reference to paragraph 400 of the European Communities' First Written 
Submission: 
(a) What is the definition of a "customs procedure" under EC customs law?  
                                                     
 
 28 Article 29(2) of the Customs Code and Articles 143(1)(e) and 147 of the Customs Code 
Implementing Provisions. WT/DS315/R 
Page A-64  
 
 Article 3 (16) CCC defines a "customs procedure" as any of the following: 
• release for free circulation; 
• transit; 
• customs warehousing; 
• inward processing; 
• processing under customs control; 
• temporary admission; 
• outward processing; 
• exportation. 
 
(b) What is the significance of categorising a matter as a "customs procedure" for 
the purposes of EC customs law? 
 Numerous provisions of the Customs Code re fer to the term "customs procedure". One 
example would be Article 250 CCC, to whic h the Panel's Question No. 67 refers. 
 
(c) Please explain why the definition of "customs procedures" under EC customs 
laws should govern whether or not such procedures fall within the scope of 
Article X:3(a) of the GATT 1994. 
 These are independent questions. The term "custo ms procedure" is a term of EC law. The 
scope of Article X:3(a) GATT depends on whether  the law or regulation which is administered 
pertains to one of the subject matters enumerated in Article X:1 GATT.  
(d) Please identify the main pur pose of post-release audits. 
 In accordance with Article 78 (2) CCC, the purpose of post-release audits is to assess whether 
import declarations have been filed accurately.   
(e) Why are post-release audits not considered as "customs procedures"? 
 Because they are not one of the proce dures referred to in Article 3 (16) CCC. 
 
65. The Council Resolution 95/C 188/01 of 29 June 1995 on the effective uniform application 
of Community law and on the penalties applicable for breaches of Community law in the internal market (Exhibit EC-41) provides that the Council agrees "that if there prove to be serious difficulties for the smooth operation of the in ternal market due to disparities in national 
penalty arrangements, solutions will have to be sought when necessary, so that penalties are 
such as to ensure that legislation is applied e qually effectively throughout the Union, with due 
regard for the respective jurisdictions of the Community and the member States and the 
principles of the member States' national law,  and in the light of the subsidiarity and 
proportionality principles".  Have any "sol utions" ever been taken by the Council in 
accordance with this provision?  If so, please expl ain the situations in which such solutions were 
sought and why they were considered necessary.  
 No.  
66. Making reference to the relevant provisions of EC customs law, please explain the 
circumstances in which an economic conditions a ssessment is needed at the member State level 
and/or at the EC level in determining wheth er or not processing under customs control should 
be authorized .  WT/DS315/R 
 Page A-65 
 
 
 As the EC already explained in paragraphs 135 to 138 of its First Written Submission, for the 
types of goods and operations mentioned in Anne x 76, Part A, of the Implementing Regulation 
(Exhibit US-6), which represent the majority of th e cases, the economic conditions shall be deemed to 
be fulfilled in accordance with Article 552(1) fi rst subparagraph of the Implementing Regulation). 
This means that, in these cases, customs author ities do not examine the economic conditions. 
For the types of goods and operations mentioned in Annex 76, Part B, of the Implementing 
Regulation and not covered by Part A of that Anne x, the examination of the economic conditions shall 
take place at Community level, through the relevant  Committee procedure. This means that a uniform 
application of the assessment of the economic co nditions is ensured for so-called sensitive goods 
because the examination has to take place at Community level (see Article 552[2] of the 
Implementing Regulation). 
Third, for the types of goods and operations not mentioned in Annex 76 of the Implementing 
Regulation, the examination of the economic conditions shall take place at national level 
(Articles 502(1) and 552(1), second s ubparagraph, of the Implementing Regulation). An examination 
at national level is required only in rare cases because, as mentioned before, either the economic 
conditions are deemed to be fulfilled or the examination takes place at Community level. 
Nevertheless, transparency and uniform applica tion of the assessment of the economic condition is 
also ensured in these rare cases because member States have to communicate to the Commission 
relevant information in accordance with Artic le 522 of the Implementing Regulation. The 
Commission makes these particulars available to the customs administrations. Furthermore, if a member State objects to an authorization issued or if the customs authorities concerned wish to 
consult before or after issuing an authorization,  an examination of the economic condition may take 
place at Community level (see Articles 503 and 504 of the Implementing Regulation). 
If there are still unclear elements in the above description, the EC would be happy to provide 
further clarification upon request. 
67. Please explain the scope and effect of Article 250 of the Community Customs Code. 
This provision provides that where a customs pr ocedure is used in several member States, 
decisions, identification measures, documents issued , and findings made, shall have the same legal 
force in all of the member States involved. "Custo ms procedure" in this context means any of the 
procedures referred to in Article 3 (16) CCC. Article 250 CCC applies in the context of a specific customs procedure involving the same goods. 
Article 250 CCC has the purpose of ensuring that  customs procedures which take place on the 
territory of several member States can be carried out efficiently and coherently. 
68. With respect to paragraphs 220-221 of its First Written Submission, is the sole purpose 
of the European Communities' reference to Ar ticle XXIV:12 of the GATT 1994 to support its 
argument that Article X:3(a) does not require custom s laws to be regulated at the central level?  
If so, please explain in practical terms what th is means for the administration of EC customs 
laws.  If not, please explain the other bases upo n which the European Communities seeks to rely 
upon Article XXIV:12. 
The EC has referred to Article XXIV: 12 GATT, and the GATT Panel Report in Canada – 
Gold Coins , as support for its argument that Article X:3(a) GATT does not affect the federal 
distribution of competences within a WTO Member , and therefore does not require the harmonization 
of laws within a WTO Member. This means that where, within a WTO Member, certain matters are 
regulated at the sub-federal level, Article X:3(a) GATT requires merely that these laws or regulations 
be administered in a uniform manner. It does not re quire that such laws be replaced by a harmonized WT/DS315/R 
Page A-66  
 
 law at the central level. An example for this is san ctions, which, within the EC, are regulated in laws 
of the EC member States. 
This interpretation is fully in line with th e object and purpose of Article X:3(a) GATT. 
Article X:3(a) GATT wants to provide a minimum leve l of security and predictability for traders with 
respect to the matters referred to in Article X:1 GATT. This objective is fully ensured if laws which 
exist at the sub-federal level are administered in  a uniform manner in the territory in which they 
apply. It In order to achieve the purpose of Artic le X:3(a) GATT, it is not necessary to require WTO 
Members to harmonize the laws applicable within a WTO Member at sub-federal level. 
69. With respect to appeals to each of th e 25 member State courts responsible for review 
and correction of customs matters: 
The EC is willing to provide to the Panel information regarding the EC Court system, 
including the member States' courts. However, it wo uld like to underline that this exercise forms part 
of the burden of the proof, which is incumbent on the United States as complainant. The EC has 
repeatedly insisted on this issue in its First Wr itten Submission (para. 474) and in its First Oral 
Statement (paras. 63 to 66).  
(a) What is the standard of review in the courts for each of the member States with 
respect to administrative decisions of customs authorities? 
 The Courts of all member States review and correct the legality of the administrative 
decisions adopted in customs matters, including th e control of discretionary powers. The control of 
legality also includes the compatibility with Comm unity law. Though some legal orders include a 
classification of grounds for review comparable to th at laid down by Article 230 of the EC Treaty (see 
hereunder the answer to Question No. 71), this does not entail any significant differences in the type 
of control ensured by national courts.  
(b) In practical terms, what are the step s necessary to bring a case before each of 
those courts (including details of cases when first instance reviews by the 
relevant administering authorities are required)? 
 Most of the EC member States require the trad er to lodge a request for an administrative 
review before appealing to the relevant court. The exceptions are Belgium, Estonia, Greece, Cyprus, 
France, Malta and Portugal, where administrative re views are voluntary, and Sweden, where there is 
no administrative review and the administrative decisi on has to be appealed directly to the courts.  
In the case of Spain, Italy, Ireland (second instance of the administrative review) and 
Denmark, the administrative review is carried out by a body that is inde pendent of the agencies 
entrusted with administrative enforcement.  
(c) How long does the appellate process in respect of customs matters take in each 
of those courts (including time taken for first instance reviews by the relevant 
administering authorities, when they occur/are required)? 
 Most of the EC member States normally ensure the completion of an administrative review in 
less than 6 months. In several ca ses the average time limit is even more limited (around 1 month): 
Czech Republic, Estonia, Greece, Spain, Ireland, C yprus, Latvia, Lithuania, Hungary and Slovakia. 
Only in Denmark and Italy between 1 to 1,5 years are needed to take a decision in administrative 
reviews. 
In relation to judicial review, ten EC member States carry out a first instance review normally 
in less than one year: Czech Republic, Spain, Cypr us, Hungary, Austria, Poland, Slovakia, Finland,  WT/DS315/R 
 Page A-67 
 
 
 Sweden and United Kingdom. Between 1 to 2 years is the time spent in Germany, Estonia, Latvia and 
the Netherlands. In the rest, an av erage of 2 to 3 years is required. 
70. With respect to: (i) direct appeals to the Co urt of First Instance and the European Court 
of Justice; and (ii) requests for preliminary ruling from the European Court of Justice: 
(a) In practical terms, what are the st eps necessary to bring a case before the 
Court?  
 There is no administrative review to appeal befo re the Court of First Instance or the European 
Court of Justice an administrative decision adopted by the EC institutions on customs matters. An action for annulment must be brought directly to the relevant Court within two months from the 
notification or the publication of the decision (Artic le 230 (5) of the EC Treaty). Under Articles 81 (2) 
and 102 (2), respectively,  of the Rules of Procedur e of the Court of Justice and the Court of First 
Instance, this time limit is always expanded 10 furt her days to take into account of the distance 
(Exhibits EC-107 and EC-108). According to the "Pra ctice Directions" adopted by each of the Courts, 
a copy of the signed original of a procedural docum ent may be transmitted to the Registry either by 
telefax or as an attachment to an electronic mail,  provided that the signed original itself reaches  the 
Registry within ten days following such lodgement (Exhibits EC-109 and EC-110). 
Decisions to refer for a preliminary ruling are ta ken by the member States courts, which will 
normally hear both parties before making a refere nce, though they are not bound by the parties' 
position in relation to the convenience or need to refe r. Furthermore, it is not necessary for the parties 
in the case to raise the question, which can be deci ded by the national court of its own motion.  The 
national court is entitled to decide at what stage of the proceedings the reference is made, provided 
that the case has not been decided yet. Further explanations on this procedure may be found in the 
Information Note on references from national courts for a preliminary ruling adopted by the Court of Justice (Exhibit EC-55). 
(b) How long does the appellate/preliminar y ruling process in respect of customs 
matters normally take? 
 A case for annulment takes an average of 24 months: a representative example is the Sony 
Playstation2 case (Exhibit US-12), where the application was lodged on 3 October 2001 and the judgement was given on 30 September 2003. 
Preliminary references need an average of 19 to  20 months to be completed, though, in some 
cases, they can take up to 22 months. As an ex ample, the judgement in the case C-396/02, DFDS, 
(Exhibit EC-25) was given in this latter time li mit (from 11 November 2002, date of reception, to 
16 September 2004, date of the judgement). 
71. Please identify how the following bodies "c orrect" administrative action (including 
customs decisions) that is subject to challenge before those bodies (for example, annulment, suspension, revocation etc.): 
(a) the Court of First Instance; 
(b) European Court of Justice; 
 Under Articles 231 (1) and 224 (6) of the EC Treaty, in an action for annulment the European 
Court of Justice and the Court of First Instance must  either declare the contested act void or dismiss 
the action. They have no jurisdiction to replace or amend the act in question, though they are allowed 
to declare only part of a measure void. The grounds of illegality whic h parties may plead in an action 
for annulment are lack of competence, infringe ment of an essential procedural requirement, WT/DS315/R 
Page A-68  
 
 infringement of the Treaty or of any rule of la w relating to its application or misuse of powers 
(Article 230, second paragraph, EC Treaty). 
Both Courts may order that the application of an  act challenged in proceedings before them be 
suspended (Article 242 EC Treaty). They may also  prescribe any other interim measures (Article 243 
EC Treaty). Urgency, the establishment of a prima fa cie case and the balance of interests at stake are 
necessary for granting interim relief. 
(c) Courts of the member States; and 
 Most of the member States Courts are only entitled to annul the administrative decision 
should they consider it unlawful. However, in some  cases, the courts may substitute its own decision 
in cases involving payment of duties. A few national c ourts have the power to substitute or amend the 
administrative decision challenged: Denmark, La tvia, the Netherlands, Sweden and Slovenia. 
 
 (d) Bodies charged with undertaking first instance review of customs decisions in 
the European Communities.  
 Administrative authorities in the EC member States can repeal, revoke, alter or replace a 
disputed administrative decision. During the proceed ings, the implementation of the disputed decision 
may be suspended on the basis of Article 244, second subparagraph, CCC. 
 
72. What mechanisms exist, if any, to en sure that the outcome of review of a customs 
decision in one member State court is noti fied to the courts of other member States? 
As in most legal systems, such mechanisms do not exist in the EC. Due to the high number of 
cases, the notification of the outcome of review of customs decisions in one member State court to the 
courts of the other member States would be burdens ome and ineffective: a r ough estimate of the cases 
brought before the national member States courts of  first instance gives a figure higher than 7,500. 
73. Are national courts of the member States bound by preliminary rulings issued by the 
European Court of Justice in all cases?  If no t, please explain the circumstances in which the 
preliminary rulings are not binding. 
As the EC already explained in paragraph 188 of its First Written Submission, a preliminary 
ruling is binding on the referring court, which must a pply it to the case in which the reference is made.  
In relation to references on validity, if the C ourt of Justice decides that a Community measure 
is invalid, it has to be regarded as invalid  for all purposes and in all courts: case 66/80, Spa 
International Chemical Corporation , [1981] ECR 1191, paras 11-13 (Exhibit EC-111). 
Rulings of the Court of Justice on interpretation have been considered binding on other courts 
by virtue of the purpose of the preliminary rulin g procedure, which is to secure uniformity of 
Community law (joined cases 28 to 30/62, Da Costa , [1963] ECR 31) (Exhibit EC-112).  A member 
State's court may nevertheless refer another question to the ECJ if the issue being considered seems 
not to be materially identical with that which has already been the subject of a preliminary ruling in a 
similar case or if the previous preliminary ruling has been given long time ago.  
74. In paragraph 142 of its First Written Submissi on, the United States submits that, even if 
the national courts of the member States could be regarded as meeting the requirements of Article X:3(b) of the GATT 1994, there is nothing in the Community Customs Code that requires review by those national courts  to be "prompt".  Please comment.  WT/DS315/R 
 Page A-69 
 
 
 First of all, it should be noted that Article X: 3(b) GATT merely requires review to be prompt. 
It does not require Members to take particularly measures for this purpose, such as setting time-limits. 
So far, the US has not argued that review by the courts of the EC member States is not prompt, let alone has provided any ev idence in this respect. 
Though the CCC does not contain any provision re quiring review by national courts to be 
"prompt", this requirement is recognized in Commun ity law or in the legal systems of the member 
States. Indeed, "promptness" forms part of the core of the right to an effective judicial protection. 
According to settled case-law, fundamental right s form an integral part of the general 
principles of law, the observance of which the Europ ean Court of Justice ensu res. For that purpose, 
the Court draws inspiration from the constitutional traditions common to the member States and from 
the guidelines supplied by international treaties for the protection of human rights on which the 
member States have collaborated or to which they are signatories (see, i.a.: case C-71/02, Karner , 
[2004] not yet reported, para. 48) (Exhibit EC-113). 
The European Court of Justice has manifest ed that the European Convention on Human 
Rights has special significance in that respect and the EC has already explained in paragraph 174 of 
its First Written Submission that Article 6 (1) of the Convention lays down the right to a fair trial by 
an independent and impartial tribuna l established by law (Exhibit EC-49). 
Furthermore, as it was already mentioned in paragraph 174 of the EC First Written 
Submission, the right to an effective remedy befo re a tribunal is recognized in Article 47 of the 
Charter of Fundamental Rights of the European Union (Exhibit EC-48). 
Finally, the EC notes that there also seem to be no particular US measure which would ensure 
that revision by USCIT be prompt. 
75. In its First Written Submission, the European Communities refers to a number of 
different institutions and mechanisms, which it submits help to ensure uniform administration of EC customs laws (in particular, the Cust oms Code Committee, the European Court of 
Justice, the supremacy and direct effect of EC law, the duty of cooperation, infringement 
proceedings, the various instruments of EC  customs cooperation, and budgetary control 
measures).  To the extent that the European Co mmunities has not already done so in its First 
Written Submission, please specifically explain ho w each of these institutions and mechanisms 
achieve uniformity with respect to the aspects of customs administration specifically identified 
by the United States, namely: tariff classificati on; customs valuation; audit following release for 
free circulation; penalties for infringements of customs laws; processing under customs control 
and local clearance procedures. 
The EC believes that it has given a comprehensiv e explanation of the EC's system of customs 
law and administration. In principle, the general mechanisms and instrument s described in the EC's 
First Written Submission are applicable in respect of all areas of customs law. However, to the extent 
that the Panel has specific questions as to how specific instruments relate to a particular issue, the EC 
is happy to provide furthe r explanations upon request. 
76. Please comment on the submission made by the United States in paragraph 44 of its 
Oral Statement at the first substantive meeting that traders' right of appeal, which the European Communities submits is part of the framework to ensure uniform administration of 
EC customs laws, only relates to substantive viol ations rather than divergent administration of 
substantive law.  Further, please specifically id entify steps traders can take in the event that 
they encounter such divergent administration, making reference to all relevant EC rules and 
guidelines. WT/DS315/R 
Page A-70  
 
 The right to obtain judicial review before the Courts of the member States applies to all 
violations of Community law, regardless of what the issue in question might be. 
The EC is not certain it understands the dis tinction between "substantive violations" and 
"divergent administration of substantive law". A right of appeal if provided only if there is a violation 
of Community law, regardless of whether it is "subs tantive" or not. By definition, in any case of a 
non-uniform application of the law, an illegality will exist.  
For this reason, the EC is not sure in which cases there could be said to be a "divergent 
administration of the law" which does not involve an  illegality. To the extent that the administration 
of the law might involve discretion, and that such  discretion is exercised in conformity with the 
applicable law, there is obviously no right of appeal.  
In any event, the EC would suggest that th e US might specify which specific cases it is 
referring to. The EC would also ask whether in the United States, there is a right of appeal against 
practices of administrative agencies which are in conformity with US law.  
77. In Case 106/77, Simmenthal II, [1978] ECR 629 (Exhibit EC-5), the European Court of 
Justice found that "the direct applicability of Community law means that its rules must be fully 
and uniformly applied in all the member States from  the date of their entry into force and for so 
long as they continue in force".  Please explain in  practical terms what is meant by this finding 
insofar as it suggests that the member Stat es must "uniformly" apply EC customs law. 
This finding means that all authorities of the member States, including the administrative 
agencies and the Courts, must apply EC law unifo rmly. Concretely, this means that they should 
interpret and apply Community law in accordance with all available guidance as to its proper 
meaning, including the case law of the Court of Just ice. Where national law conflicts with provisions 
of Community law, the courts must set aside such provisions. For the Courts of the member States, one additional tool for ensuring that they apply Community law in a uniform manner is requests for preliminary rulings in accordance with Article 234 EC. For a more detailed explanation, the EC refers 
to its First Written Submission.
 29  
78. In paragraph 35 of its First Written Submission, the European Communities notes that 
Article 249(2) of the EC Treaty provides inter alia that: "A regulation shall have general application. It shall be binding in its entirety a nd directly applicable in all member States".  To 
what extent does Article 249(2) allow member St ates to supplement provisions contained in EC 
law in practice?  What measures exist to prevent member State customs authorities from relying upon policies/guidelines that are particular to that member State in the interpretation of 
EC customs law?  
A member State may act to supplement provisions contained in a Community regulation if it 
is explicitly authorized to do so, or if a specific issue is not covered in the act of Community law. However, any national legislation must strictly r espect the Community legisl ation, and may otherwise 
be set aside by the courts.
30 
The Court has also clarified that the direct ef fect of regulations cannot be hampered by any 
domestic practices or provisions.31 Moreover, the Court has stated that national authorities cannot 
issue binding guidelines for the interpretation of Community law.32 Accordingly, the interpretation of 
                                                      
 29 EC First Written Submission, para. 35 et seq. 
 30 Case 230/78, Eridania-Zuccherifici , [1979] ECR 2749, para. 34 (Exhibit EC-114). 
 31 Case 93/71, Leonesio , [1972] ECR 287, para. 22 (Exhibit EC-115). 
 32 Case 94/77, Fratelli Zerbone , [1978] ECR 99, para. 27 (Exhibit EC-116).  WT/DS315/R 
 Page A-71 
 
 
 Community law by national administrations and courts must be guided exclusively by the text of 
Community law, and all contrary provisions or guidelines of national origin must be set aside. 
79.  Is there any obligation in EC law requiring  member State customs authorities to consult 
other member States before making customs decisi ons.  If so, please identify and explain. 
There is no general obligation in EC law requiring member States' customs authorities to 
consult other member States before making cust oms decisions. Such an obligation would be 
disproportionate, since millions of customs decisions  are taken each year, and the great majority of 
them pose no particular problem, and do not require  any consultation between customs authorities. 
This being said, obligations of mutual consu ltation may arise in application of the duty of 
cooperation in specific situations, for instance in the context of the issuing of BTI (cf. EC answer to 
the Panel's Question No. 56). Specific provisions of EC customs law may also impose an obligation of 
mutual cooperation in certain circumstances. Ex amples would include the following provisions: 
• Single authorization for end-use (Article 292 [2] CCIP) 
• Customs procedures with economic impact (Article 500 CCIP) 
• Regular shipping service (articles 313a-313b CCIP) 
• Proof of Community status by authorized consignor (article 324e CCIP) 
• Simplified transit procedure for air tr ansport - level 2 (article 445 CCIP) 
• Simplified transit procedure for sea tr ansport - level 2 (article 448 CCIP) 
Finally, a general framework for mutual c ooperation and assistance between member States' 
customs authorities is provided by Regulation 515/97 (Exhibit EC-42). 
80. The preamble to Council Regulation (EC) No. 515/97 of 13 March 1997 (Exhibit EC-42) 
on mutual assistance between the administrati ve authorities of the member States and co-
operation between the latter and the Commission to  ensure the correct application of the law on 
customs and agricultural matters states that: 
"Whereas the Commission must ensure that economic operators 
are treated equally and that the application by the member 
States of the mutual administrative assistance system does not 
lead to discrimination between economic operators in different member States; ..." 
 Please explain what is meant by "treated equally" and "discrimination" . 
 The two terms refer to the objective of ensuri ng that economic operators are treated alike in 
all relevant aspects by member States' customs authorities, thus preventing a distortion of the 
conditions of competition be tween economic operators. 
 
81. Article 3(2) of Decision No. 253/2003/EC of the European Parliament and the Council of 
11 February 2003 adopting an action programme for customs in the Community (Exhibit EC-43) refers to the "Customs Policy Group".  Please explain what the role(s)/function(s) of this 
Group are.  
 The Customs Policy Group is a high level working group, chaired by the Commission, and comprised of heads of customs administrations or their deputies.  
 The Customs Policy Group enables the Commissi on and the member States of the European 
Union to work in partnership to ensure that th e common approach to customs policy is continuously WT/DS315/R 
Page A-72  
 
 adapted to new developments. Its role is to deal with any customs issues of a political nature and in 
particular to:  
• review and, as necessary, adapt the common policy approach; 
• analyse strategy (including training, computerization and external affairs);  
• consider issues of principle referred to it by the Customs 2007 Committee;  
• consider customs issues beyond the scope of the Customs 2007 programme; 
• consider the implementation of the results obtained from Customs 2007 actions (e.g., use of 
guidelines, development of risk management, measurement of results, etc.)  
 
82. In paragraph 156 of the European Co mmunities' First Written Submission, the 
European Communities refers to a number of "a ction programmes" aimed at strengthening the 
effective implementation of the EC customs union, including training activities
. 
(a) Does training of member State cust oms officials occur at the member State 
and/or EC level? 
 The training of customs officials takes place prim arily at national level. However, to reach a 
harmonization in the training field, and in orde r to promote and common understanding the field of 
customs administration, a "Common Customs Training Programme" was developed under a predecessor programme of Customs 2007. The programme sets  binding minimum standards for the 
national basic training of Customs officials throughout the Community. The related "Common Training modules" are currently being updated (finalized by end 2005). 
 
 The programme supports national training ac tivities and supplements this training from a 
central point of view with common training proj ects wherever needed. The development of such 
common training projects (mainly for advanced vo cational training) are usually managed by the 
Commission with support from member States subj ect experts and training specialists (e.g., 
development of common training material, other training support like training material catalogues, 
good practice guides or e-learning modules with blended learning approach).   A further mission of the Customs 2007 training programme is the development of an organizational framework for customs training. For this purpose, the European Commission is 
developing the Virtual Customs Academy. This is the defined as the provision of customs training and 
best practice in various forms shared by member States with the support of the Commission in the 
context of the Customs 2007 Programme.   Customs 2007 seminars or conferences
 are organized and chaired by the Commission in 
partnership with the host administration. Seminars  or conferences organized within Customs 2007 are 
often used as a tool to  
 
• Update and enhance member States ' knowledge on common legislation; 
• Establish a forum for best common practice and develop practical guidance for 
implementing common legislation; 
• Provide a vehicle to exchange informa tion and share knowledge, specialization and 
experience between member States; 
• Launch new initiatives in the customs area. 
Therefore, most of the seminars indeed cont ain an information/knowledge sharing part which 
can be considered as a training method in the broad sense. For instance, the se minars dispose of such 
an information sharing component during which the Commission presents new or modified common  WT/DS315/R 
 Page A-73 
 
 
 legislation. Also the more practical oriented workshops organized by the Commission are in a way a 
tool to disseminate information to member States ' experts (e.g., NCTS workshop, RIF workshop, etc). 
 (b) If so, please explain the nature and pur pose of such training.  Is such training 
aimed at assimilating the most recentl y acceded 10 EC member States and/or is 
it part of longstanding and ongoing training for customs officials of all the EC 
member States? 
 Today, the 10 new member States are full partners in this process and they benefit 
furthermore from all training material and modul es which were developed before their accession to 
the EU.  
 Moreover, already prior to accession, one of the priorities within the Customs 2007 
Programme has been the pr eparation for enlargement
. According to Article 2 (2) of Decision 
253/2003, the programme is open fo r participation by candidate countries for accession to the EC. 
Several actions were set up specifically for candida te countries to enable them to comply with 
Community customs legislation (tariff seminars, tr aining sessions for tariff applications, etc) and to 
provide them with assistance as regards interconn ectivity (IT systems) and operational capacity. 
Besides these special provisions, the candidate count ries have been invited to each single seminar and 
to most of the other full-board activ ities organized for member States.  
 
83. Please indicate whether and, if so, what ac tion has been taken pursuant to the following 
paragraphs of Article 4 of Decision No. 253/2003/EC of the European Parliament and the 
Council of 11 February 2003 adopting an action programme for customs in the Community: 
... 
(b) to identify, develop and apply best workin g practices, especially in the areas of post-
clearance audit control, risk analysis and simplified procedures; 
... 
(e) to improve the standardization and simp lification of customs procedures, systems 
and controls; 
(f) to improve the coordination of and co-o peration between laboratories carrying out 
analysis for customs purposes in order to ensure, in particular, a uniform and unambiguous tariff classification throughout the European Union; 
... 
(k) to develop common training measu res and the organizational framework for 
customs training that would respond to th e needs arising from programme actions. 
 A list of programme actions which fall into  the above mentioned objective categories is 
attached as Exhibit EC-117.  
 The European Community and its member Stat es have undertaken a series of actions to 
improve working practices. These are carried out in  a variety of ways, including benchmarking, 
drafting of guidelines, creation of contact groups to share information and best practice, use of 
targeted groups to follow up specific subjects et c. In the specific areas mentioned the European 
Community has produced a guide to post clearance audit,
33 which sets out the recommended approach 
to such controls. 
                                                      
 33 Exhibit EC-90. WT/DS315/R 
Page A-74  
 
 The European Community has also worked on risk management for a number of years. 
Following the introduction of the first Risk Analysis  guide, actions have been focussed on promoting 
a common approach to risk management. A Communi ty-wide seminar on risk analysis led to work 
focussing upon establishing a Community framework fo r risk management. Since then, efforts have 
turned towards creating a secure Community risk  information exchange system based on the 
principles set out in the framework. Such a system has been running on a pilo t basis for over a year. 
The recent amendment to the Community customs code has introduced a legal obligation for a 
Community Risk Management system. The Commission and its member States are now finalising such a system which will operate on the secure IT base already piloted and en able the introduction of 
Community risk profiles and effective exchange of risk information. 
In addition to the work on risk management which sets out a common control approach, the 
Community develops standardized approaches to sy stems and controls via a range of methods. These 
include the exchange of officials, use of be nchmarking and project groups to examine specific 
subjects (such as Single European Authorizations, production of guides, manuals etc.), training and 
the development of IT systems. Targeted actions ma y also be developed for more specialized controls, 
such as anti-counterfeiting. 
84. Please explain what information/data is contained in the information system on the 
integrated tariff of the Community (TARIC) refe rred to in Article 5(1)(d) of Decision No. 
 253/2003/EC of the European Parliament and the Council of 11 February 2003 adopting an action programme for customs in the Community. 
The Taric includes all the information referred to in Article 2 (2) of Regulation 2658/87, 
which is drafted as follows: 
The tariff shall be based on the Co mbined Nomenclature and include: 
(a) the measures contained in this Regulation; (b) the additional Community subdivisions, referred to as ‘Taric 
subheadings', which are needed for the implementation of specific 
Community measures listed in Annex II; 
(c) any other information necessary for the implementation or 
management of the Taric codes a nd additional codes as defined in 
Article 3(2) and (3); 
(d) the rates of customs duty and other import and export charges, 
including duty exemptions and pref erential tariff rates applicable to 
specific goods on importation or exportation; 
(e) measures shown in Annex II applicable on the importation and 
exportation of specific goods. 
 Annex II, which is referred to in Article 2 (2 ) (b) and (e) of Regulation 2658/87, is currently 
contained in Annex II to Commission Re gulation 1810/2004 (Exhibit EC-118).  
 85. In areas that are not specifically regulated by EC law so that, effectively, member State 
authorities have discretion in the interpretation and application of law with respect to those areas, what mechanisms, if any, are in place to  ensure uniform interpretation and application of 
the law throughout all the member States?  WT/DS315/R 
 Page A-75 
 
 
 In areas which are not regulated by EC law, including primary EC law, member States are 
free to legislate and to administer their own laws. There are no mechanisms in place at the level of the 
EC to ensure a uniform interpretation and applicati on of the laws of member States in areas which are 
not regulated by EC law.  
It should be noted, however, that even  wher e secondary Community law has not specifically 
regulated an area, the member States may still be requi red to respect certain principles of EC law. An 
example is the area of penalties for violations of Community law, where Article 10 EC requires that 
member States provide penalties which ar e effective, proportionate and dissuasive.34 
86. Please explain the current status of the Mo dernized Customs Code contained in Exhibit 
US-33?  Please clarify for how long the revision process has been ongoing.  Please identify when 
and how public/third party consultation took place with respect to this revision process.  
The draft Modernized Customs Code Contained in Exhibit US-33 is a working document of 
the services of the European Commission. It is no t the official position of the European Commission, 
or of any other EC institution. 
The Modernized Customs Code is a major project  aiming at the recodification, modernization 
and simplification of EC customs law, building on th e experience gained since the entry into force of 
the Community Customs Code. The Commission first announced its intention to modernize and simplify customs law in 2003. A first public consul tation on a draft modernized Customs Code was 
held in July and August 2004. A second public consultation on a revised version of the code was held 
in January 2005 (cf. Exhibit EC-47). 
87. What is the legal relationship betw een Article X:3(a) of the GATT 1994 and 
Article X:3(b) of the GATT 1994, if any?  In th is regard, please specifically comment on the 
following submissions made by the United States in its Oral Statement at the first substantive 
meeting: 
As the EC has already stated in its First Wr itten Submission (paras. 461 and 466) and in its 
First Oral Statement (paragraph 60), Article X:3(a) and  (b) GATT are separate obligations and it 
cannot be considered that there is a le gal relationship between both provisions.  
 Article X:3(a) GATT provides for an obligati on to administer the laws and regulations 
referred to in Article X:1 GATT in a uniform, impartial and reasonable manner. In contrast, 
Article X:3(a) GATT requires each party to provide for prompt review of customs decisions.   The fact that these provisions are contained in the same article does not mean that they should 
be interpreted in such as way as to blur the dis tinction between the obligati ons which they contain. 
Obviously, the two provisions must be interprete d in a harmonious way, taking into account their 
respective object and purpose. However, this does not mean that obligations from one provision can 
simply be imported into the other.   
 In particular, the EC attaches great importance to the fact that Article X:3(a) GATT does not 
concern the administration of laws concerning the ju dicial procedure and judicial organization, since 
such laws are not among those referred to in Artic le X:1 GATT. Accordingly, Article X:3(a) GATT 
can not be construed so as to require a harmonization of laws regarding judicial procedure and judicial 
organization within a WTO Member.  
                                                     
 
 34 Cf. EC First Written Submi ssion, para. 144 et seq. WT/DS315/R 
Page A-76  
 
 (a) the EC argument that appeals to th e European Court of Justice form an 
important instrument of uniform administration is inconsistent with its contention in the context of Article X:3(b) of the GATT 1994 that the obligation of uniform administration and the obligation to provide remedies from administrative action are discrete obligations without any inherent link to one 
another (paragraph 42); 
 This argument presented by the US is based on an inaccurate interpretation, in that, according 
to the US, preliminary references to the Court of Jus tice have the nature of an appeal. On the contrary, 
that procedure is based on a cooperative relationship between the Court of Justice and national courts, 
not a hierarchical one. The EC has already underlin ed this issue in paragraph 470 of its First Written 
Submission.  
  As the Court of Justice does not act as an appeal court when dealing with preliminary references, its role has to be u nderstood in relation to the obligati on laid down by Article X:3(a) 
GATT to ensure uniform administration of all laws , regulations, decisions and rulings described in 
paragraph 1 of that Article. In fact, preliminary ru lings by the ECJ are one important instrument to 
ensure uniform administration among all the other inst ruments described by the EC in its First Written 
Submission. Prompt review and correction of ad ministrative action relating to customs matters 
required by Article X:3(b) GATT is ensured by th e referring national court, not by the Court of 
Justice.  
(b) the link between Article X:3(a) and Article X:3(b) arises through the reference 
in Article X:3(b) of the GATT 1994 to "administrative enforcement", which is the subject of Article X:3(a) (paragraph 59). 
 Similarly, the EC considers that the term "a dministrative enforcement" in Article X:3(b) 
GATT does not establish a link between this provisi on and Article X:3(a) GATT. Article X:3(b) 
GATT refers to "agencies entrusted with administ rative enforcement" to id entify the agencies which 
are subject to prompt review, and from which the tr ibunals or procedures must be independent. This 
does not mean that administration as such becomes the subject matter of Article X:3(b) GATT.  
88. Does the obligation for prompt review and correction of administrative action in 
Article X:3(b) of the GATT 1994 have direct effect in the member States?  If so, what does this 
mean in practical terms for the review of customs decisions by member State bodies? 
 
 The European Court of Justice and the Court of First Instance have held that, having regard to 
their nature and structure, the WTO agreements ar e not in principle among the rules in the light of 
which the Court is to review the legality of me asures adopted by the Community institutions (Case C-
149/96, Portugal/Council , [1999] ECR I-8395, paras. 42-46 (Exhibit EC-119), case C-377/02, Van 
Parys , [2005] not yet reported, para. 39 (Exhibit EC-120), and case T-19/01, Chiquita/Commission , 
[2005] not yet reported, para. 114 (Exhibit EC-121 ). Consequently, Article X:3(b) GATT does not 
create rights upon which individuals may rely directly before the courts by virtue of Community law. 
  However, the EC would like to refer to its reply to Question No. 74, where it has explained 
that the principle of "prompt review" is in any case inherent to the right to an effective judicial 
protection, which is part of the general principles recognized in all member St ates as well as part of 
the EC legal system, as recognized by the ECJ.  
QUESTIONS FOR BOTH PARTIES
: 
89. Could a system in which it is primarily incumbent upon a trader to assert its rights to 
achieve uniform administration on the part of the customs authorities in a particular WTO  WT/DS315/R 
 Page A-77 
 
 
 Member (for example, by instituting appeals to complain about the decisions/treatment of those 
customs authorities) comply with the obligations contained in Article X:3(a) of the GATT 1994? 
 Whether the practice of a WTO Member is in compliance with Article X:3(a) GATT must be 
assessed on the basis of the overall pattern of administration of such member, taking into account all elements of the system of that Member as a whole. For this reason, it is difficult to provide a general 
answer to the Panel's question. 
  This being said, the EC believes that wherea s procedural possibilities given to traders can 
play an important role in securing uniformity of ad ministration, normally, the uniform administration 
of the law should also be an objective of the public  authorities. What specific tools should be at the 
disposal of the authorities, and what tools should be  available to private parties depends on the overall 
design of the particular system, and cannot therefore be answered in the abstract.  
 
90. At paragraph 11.70 of its report, the Panel in Argentina – Hides and Leather  stated that 
"[t]he relevant question [in determining whether or not Article X:3(a) of the GATT 1994 is 
applicable] is whether the substance of such a measure is administrative in nature or, instead, 
involves substantive issues more properly deal t with under provisions of the GATT 1994".  
Please provide your understanding of this statemen t, particularly the reference to "a measure 
that is administrative in nature".  In addi tion, please explain in practical terms how the 
distinction between measures that are administrati ve in nature and those that are not is relevant 
for the application of  Article X:3(a).  
 
 The EC believes that this statement is not dir ectly relevant to the present case. The Panel in 
Argentina – Hides and Leather  had to decide on a challenge brought by the EC that a specific 
Argentinian regulation which foresaw the presence  of representatives of the Argentinian tanning 
industry in the administrative procedure entaile d an unreasonable, partial and non-uniform 
administration.
35 Argentina defended itself by arguing that th e EC was challenging  the substance of a 
rule, and not its administration.36  
  In essence, what the Panel said in Argentina – Hides and Leather was thus that if a particular 
law or regulation mandates administra tive behaviour that is unreasonabl e, non-uniform, or impartial, 
then the law the law itself constitutes a violation of Article X:3(a) GATT. This is the sense in which 
the Panel distinguished between administrative and substantive measures. Clearly, the Panel did not 
intend to derogate in any way from the fact that Article X:3(a) GATT relates only to the 
administration
 of laws and regulation.  
  In the present case, no EC measure mandates in any way a non-uniform administration of EC 
customs law. On the contrary, EC laws and regulations are designed to avoid any lack of uniformity. 
Accordingly, the EC understands that the US case refers not to the EC customs laws as such, but 
rather to the administration of these laws.    Contrary to the submission of the United States,
37 the Panel in Argentina – Hides and Leather 
does not support the measure that a WTO Member is not allowed to maintain laws at a sub-federal 
level, as is the case in the EC for penalties. Firs t of all, it is uncl ear how the US defines 
"administrative", and why it would consider penalty  provisions as "administrative" rather than 
"substantive".   
                                                     
 
 35 Panel Report, Argentina – Hides and Leather , para. 11.58. 
 36 Panel Report, Argentina – Hides and Leather , para. 11.69. 
 37 US First Oral Statement, para. 47. WT/DS315/R 
Page A-78  
 
  More importantly still, the fact that there exist, within a WTO Member, laws at the sub-
federal level which govern matte rs falling under Article X:1 GA TT has nothing to do with the 
situation that the Panel dealt with in Argentina – Hides and Leather . For instance, penalty provisions 
contained in the laws of the EC member States do not in any way entail a non-uniformity in the administration of these laws. This is entirely different from the situation in Argentina – Hides and 
Leather , where the Argentinian measure mandated the presence of partial and interested industry 
representatives, which necessarily entailed a lack  of reasonableness and impartiality in the 
administration.   
91. Please provide a copy of the list of proposals made by the United States contained in the 
document entitled "Elements of Potential EC Customs Reform" dated 22 December 2004.  
 A copy of the document is attached as Exhi bit EC-122. This document was transmitted by the 
US to the EC on 22 December 2004 as a follow-up to the consultations held on 16 November 2004.  92. Please comment on paragraph 7 of its th ird party submission where the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu argues that the test of "minor administrative variations" under Article X:3(a)  of the GATT 1994 referred to by the GATT 
Panel in EEC– Dessert Apples is not relevant for the present case.  Does the applicability of this 
test depend upon the existence of certain factua l/other circumstances?  If so, please explain and 
justify making reference to the specific terms of Article X:3(a). 
 
 In this respect, the EC can refer to its  answer to the Panel's Question No. 46. 
 
93. In paragraph 21 of its Oral Statement at th e first substantive meeting, the United States 
submits that customs laws may be administe red through instruments which are themselves 
laws, such as in the case of penalty laws.  
(a) Please comment.  
 The EC disagrees with this submission. As th e EC has explained in response to the Panel's 
Question No. 109, the term to "administer" in Artic le X:3(a) GATT means to "execute" or to "apply". 
In the concrete context, this means that Article X: 3(a) GATT refers to the execution in concrete cases 
of the laws, regulations, decisions and rulings of ge neral application referred to in Article X:1 GATT. 
  A law, such as the laws of the member Stat es containing provisions on penalties, is itself of 
general application, and itself needs to be executed or  applied. Accordingly, it cannot be said that such 
a law "executes" or "applies" another. The US s ubmission is therefore not in accordance with the 
ordinary meaning of the terms of Article X GATT. 
  In addition, the US submission is incompatib le with the case law of the Appellate Body in EC 
– Bananas III , according to which Article X:3(a) GATT does not apply to the laws and regulations 
themselves, but rather to the administration thereof.
38 By arguing that a law can itself constitute 
"administration" of a law, the US is undermining the clear distinction between the administration of 
laws and the laws themselves. According to the Un ited States, any law-making activity could also be 
argued to be administration. This is clearly not within the object and purpose of Article X:3(a) GATT.  
(b) Could this argument apply to all laws, regulations, judicial decisions and 
administrative rulings of general application referred to in Article X:1 of the 
GATT 1994?   
                                                     
 
 38 Appellate Body Report, EC – Bananas III , para. 200.  WT/DS315/R 
 Page A-79 
 
 
 This argument cannot apply to any of the instru ments referred to in Article X:1 GATT. The 
laws, regulations, judicial decisions and administrativ e rulings referred to in this provision all have in 
common that they must be "of general application". As such, they cannot be said to be executed or 
applied by another law which is equally of general application. 
(c) If so, please identify which types of  laws, regulations, judicial decisions and 
administrative rulings of general application. 
 Cf. answer to the preceding question. 
 
(d) What would be the impact and practical effect of such an interpretation on the 
administration of matters other than customs matters? 
 These consequences would be extremely serious for any WTO Member where laws, 
regulations, or other measures of ge neral application exist at a sub -federal, regional or even local 
level.    If the United States were correct, any such sub -federal law, if it had any link with a law 
existing at federal level, for instance because it is supplementing or complementing its provisions, 
could be said to constitute "administration" of the la w. Accordingly, if several  such laws exist within 
different parts of the territory of a WTO Member, and if their content is not identical, the WTO Member would be in violation of Article X:3(a) GATT.   Such an interpretation would affect all WTO Members where legislation is not only present at 
the central, but also at a lower level. It is a common phenomenon of federal-type systems that 
legislation at the federal and sub-federal level is mutually complementary and interlocking. 
Accordingly, the interpretation of Article X:3(a) GATT proposed by the US would seriously interfere 
with the constitutional distribution of powers within most WTO Members with a federal structure, and 
consequently should be rejected.  
 
94. With respect to the interpretation of the term "administration" in Article X:3(a) of the 
GATT 1994, do the parties consider that a distinction should be drawn between, on the one hand, administrative procedures applicable to and the treatment of traders and, on the other 
hand, substantive decisions and the results of admi nistrative processes that affect traders? If so, 
please explain the legal basis for the drawing of such a distinction.  
 
 The EC considers that such a distinction s hould be drawn. As the EC has stated earlier,
39 
Article X:3(a) GATT does not exist for its own sa ke, but in order to provide certain minimum 
standards of predictability for traders. Accordingly,  Article X:3(a) is primarily concerned with the 
administrative outcomes affecting traders, and not w ith laws and procedures as such. As the EC has 
also said,40 only to the extent that a particular pr ocedure results necessarily and inevitably in a 
violation of Article X:3(a) GATT could such a pro cedure itself be said to be in violation of this 
provision.  
QUESTIONS FOR THE PARTIES AND THIRD PARTIES:
 
109. How should the term "administer" be int erpreted for the purposes of Article X:3(a) of 
the GATT 1994? 
                                                      
 39 EC Response to the Panel's Question No. 46. 
 40 EC Response to the Panel's Question No. 90. WT/DS315/R 
Page A-80  
 
 The term "administer" is defined as "man age as a steward; carry on or execute".
41 In other 
words, the term "administer" relates to the execu tion of something. In the case of Article X:3(a) 
GATT, this administration relates to the laws, regula tions, decision and rulings of general application 
referred to in Article X:1 GATT. In other words, in  Article X:3(a) GATT, to "administer" means to 
execute the general laws and regulations, i. e. to apply them in concrete cases. 
This interpretation is also confirmed by the French and Spanish text, which use the terms 
"appliquera" or "aplicará", respectively, which can be  translated as "to apply". Therefore, the French 
and Spanish also confirm that Article X:3(a) GATT is concerned with the application of the general 
laws and regulations referre d to in Article X:1 GATT. 
110. Does the uniformity obligation in Article X:3(a) of the GATT 1994 mean that there 
should be no or only limited possibility for th e exercise of discretion in the administration of 
customs laws? 
No. The exercise of discretion is a normal phenomenon in administrative law. The granting of 
a discretion may be necessary where complex factual aspects of the particular case have to be taken into account, or conflicting interests may need to be weighed and balanced, and where it is not 
possible to determine the specific outcome for each  case in a measure of general application. 
Typically, the exercise of discretion granted by the authorities will be limited by law, and will be governed by certain principles, su ch as the principle of non-discrimination. The proper exercise of 
discretion granted by law can therefore not be regarded as a lack of uniformity contrary to Article X:3(a) GATT. 
111. Is the time taken to address a specific i ssue (including instances of divergences in 
administration) a consideration to be taken in to account for the purposes of the uniformity 
obligation in Article X:3(a) of the GATT 1994?  If  so, please explain why, making reference to 
the specific terms of Article X:3(a).   
In principle, Article X:3(a) GATT is concerne d with the outcome of the administration of 
laws. For this reason, it is not incompatible with  Article X:3(a) GATT if administrative instruments 
which are intended to ensure uniformity may not ta ke effect immediately, as long as they ensure a 
uniform application of the law within a reasonabl e time frame. In additio n, the time needed for 
addressing a specific issue may also depend on the complexity and the circumstances of the case. 
112. With respect to the WTO objective of securi ty and predictability in the international 
trading environment (which was recently referred to by the Appellate Body in the context of 
tariff commitments at paragraph 243 of its rep ort in EC – Chicken Cu ts WT/DS269/AB/R and 
WT/DS286/R), please explain whether, why and how it is relevant for the interpretation of 
Article X:3(a) of the GATT 1994. 
The EC can refer to its response to the Panel's Question No. 46.  
113.  Are the expectations of traders relevan t to an interpretation and application of 
Article  X:3(a) and X:3(b) of the GATT 1994?  If so, please explain why and how, making 
reference to the specific language of those Articles. 
The EC can refer to its Response to the Panel's Question No. 46.  
                                                     
 
 41 The New Shorter Oxford English Dictionary , Clarendon Press, Oxford, 1993, Volume 1, at 28 
(Exhibit EC-123).  WT/DS315/R 
 Page A-81 
 
 
 114. Does the obligation contained in Arti cle X:3(a) of the GATT 1994 require overall 
uniformity in administration or does it require un iformity in administration in each and every 
case?  Does the answer depend upon the nature of the challenge under Article X:3(a)?  If so, 
please explain.  If overall uniformity is acceptable under Article X:3(a), what would be the practical/numerical threshold and/or benchmark fo r demonstrating that Article X:3(a) has been 
violated? 
The EC can refer to its response to the Panel's Question No. 45.  
115. Please comment on the submission made by Japan in paragraph 8 of its third party 
submission to the effect that, in assessing the United States' claim under Article X:3(a) of the GATT 1994, it is necessary for the Panel to anal yze whether the alleged divergences exist, as 
claimed by the United States, and if so, whether such divergences exist to a degree that would be 
considered to be inconsistent with Article X:3(a) in light of the particular customs system as a 
whole. 
The EC agrees with Japan's Statement. As for the remaining aspects of the question, the EC 
would refer to its response to the Panel's Question No. 45.  
116. In paragraph 2 of Japan's Oral Statem ent at the third party session of the first 
substantive meeting, Japan relies upon the "m inimum standards" of transparency and 
procedural fairness referred to  by the Appellate Body in US – Shrimp to argue that "[a]n 
administration of regulations lacking 'uniform ity' [for the purposes of Article X:3(a) of the 
GATT 1994] would in general terms be unjust, biased, inequitable, partial and opaque – in other words, unfair and nontransparent".  Fo llowing this line of reasoning, would the 
requirements of transparency and procedural fairness apply to: (i) the processes or the 
treatment of traders in the context of the applicat ion of customs laws; and/or (ii) the substantive 
customs decisions to which traders are subject? 
The EC agrees with Japan that the St atement of the Appellate Body in US – Shrimp is 
relevant for the interpretation of the term "uniform ity" in Article X:3(a) GATT. As to the specific 
questions put by the Panel, the EC can refer to  its response to the Panel's Question No. 94.  
117. In paragraph 7.268 of its report, the Panel in US – Hot Rolled Steel  (WT/DS184/R) 
stated that "we note that Japan has not even alleged, much less established, a pattern of decision-making with respect to the specific matters  it is raising which would suggest a lack of 
uniform, impartial and reasonable administration of the US anti-dumping law [under Article X:3(a) of the GATT 1994]".  Please comment on the Panel's finding that a pattern of 
decision-making is needed in order to prove a violation of Article X:3(a). 
The EC can refer to its response to the Panel's Question No. 45.  
118. What is meant by the words "pertaining to" in Article X:1 of the GATT 1994?  Would 
rules governing the operational procedures of bodies that oversee or are somehow involved in the administration of customs laws – such as, for example, the EC Customs Code Committee – 
qualify as laws, regulations, judicial decisions a nd administrative rulings of general application 
"pertaining to" the classification or the valuation of products for customs purposes? 
To "pertain to" is defined as "belong or be attached to, have reference or relation to".
42 In 
other words, the subject matter of the laws, regula tions, decisions and rulings of general application 
                                                      
 42 The New Shorter Oxford English Dictionary , Clarendon Press, Oxford, 1993, Volume 2, at 2173 
(Exhibit EC-123). WT/DS315/R 
Page A-82  
 
 must  belong to, have reference to, or be related to the subjects which are enumerated in Article X:1 
GATT, i.e. the classification or the valuation of pr oducts for customs purposes,  or to rates of duty, 
taxes or other charges, or to requirements, restric tions or prohibitions on impor ts or exports or on the 
transfer of payments therefore, or affecting th eir sale, distribution, transportation, insurance, 
warehousing inspection, exhibition, processing, mixing or other use. 
Rules governing the operational procedures of bodies that oversee or are somehow involved 
in the administration of customs laws do not as su ch qualify as laws, regulations, judicial decisions 
and administrative rulings of general application "per taining to" the classification or the valuation of 
products for customs purposes. Such laws may ensu re that a Member fulfils its obligations under 
Article X:3(a) GATT. However, this does not m ean that such laws governing operational bodies do 
themselves become laws "pertaining to the classification or valuation of goods".  
119. Do penalty laws/provisions applicable to violations of customs laws fall within the scope 
of the measures referred to in Article X:1 of  the GATT 1994?  If so, please explain making 
reference to the relevant terms of Article X:1. 
As the EC has explained in response to the preceding question, Article X:1 GATT only 
covers those laws which pertain to the subjects wh ich are enumerated in Article X:1 GATT, i.e. the 
classification or the valuation of products for cust oms purposes, or to rates of duty, taxes or other 
charges, or to requirements, restrictions or prohi bitions on imports or exports or on the transfer of 
payments therefore, or affecting their sale, di stribution, transportation, insurance, warehousing 
inspection, exhibition, pro cessing, mixing or other use. 
Penalties for violations of customs laws are not  among the matters referred to in Article X:1 
GATT. It can also not be considered that penalties fo r violations of customs laws necessarily "pertain 
to" the classification or the valuation of products, or  to rates of duties. For instance, the law of a 
Member may set out a penalty for failure to declar e a good upon importation. It does not appear that it 
could be said that such a law would pertain to the classification or valuation of goods, or to rates of 
duties. 
It should be noted that by the very natu re of penalties, a requirement of uniform 
administration does appear somewhat problematic. Pena lty provisions, and in particular provisions of 
criminal law, typically give the authorities a marg in within which to assess th e penalty applicable in 
the particular case. Such a margin is particularly  necessary in order to take into account the individual 
guilt of the defendant. By definition, in the applic ation of penalty provisions, a wider margin of 
freedom is required than in the application of prov isions regarding classification, valuation, and rates 
of duty.  
This is implicitly also recognized by Article  VIII:3 GATT, which only provides for certain 
minimum standards of proportiona lity as regards the imposition of penalties for breaches of customs 
regulations and procedural requirements. Moreove r, given the explicit reference to penalties as 
contained in Article VIII:3 GATT, it appears that had the drafters of the GATT intended to include 
penalties in Article X:1 GATT, they would have explicitly referred to them in this provision.
43  
120.  What is the significance of Article XXIV:12 of the GATT 1994 for the interpretation of 
Article X:3(a) of the GATT 1994? 
                                                      
 43 In the context of the Doha Trade Facilitation Ne gotiations, Japan, Mongolia, Chinese Taipei and 
Peru, have made the proposal to include a provision fo r "clearly stating and publicizing penalty provisions 
against breaches of import and export formalities in releva nt laws and regulations"; cf. the compilation prepared 
by the Secretariat, TN/TF/W/43/Rev.1, p. 11 (Exhibit EC-70).  WT/DS315/R 
 Page A-83 
 
 
 The EC can refer to its Response to the Panel's Question No. 68. 
121. Making reference to the specific terms of  Article X:3(b) of the GATT 1994, please 
explain whether or not the obligation to ensure prompt review and correction of administrative 
action is confined to first instance reviews by administering authorities. 
Article X:3(b) GATT provides that tribunals or  procedures ensuring the prompt review and 
correction of administrative action on customs matters  shall be independent of the agencies entrusted 
with administrative enforcement. Only if the fi rst instance administrative review fulfils this 
requirement of independence, this type of review  may be considered a sufficient implementation of 
the obligation to ensure prompt review a nd correction of administrative action.  
122. What does "correction" mean in Article X:3(b) of the GATT 1994? 
"Correction" has to be interpreted coupled with  its accompanying term "review". Both should 
cover the ordinary tasks of the courts and tribunals in controlling the Administration: to verify that 
administrative decisions abide with the law and to  provide the complainant with a remedy that 
removes the illegality. 
The EC considers that the term "review" refers to the first task, while "correction" describes 
the second one. 
This interpretation is comforted by the defi nition of both terms that may be found in the 
dictionaries. Thus, while the term "review" refe rs in legal English to the "consideration of a 
judgement, sentence, etc., by some higher court or au thority", "correction" is "an act or instance of 
emendation" or "the neutrali zation of anything harmful".44 Similar definitions can be found in Spanish 
and French. "Revisar" in Spanish is "examinar una  cuenta, unas notas, un trabajo hecho, etc., para 
asegurarse de que está bien o completo" and "rec tificar" means "corregir a alguien su conducta".45 In 
French, "réviser" means "examiner de nouveau pour ch anger, corriger », and « rectifier » is «faire 
disparaître en corrigeant».46 
123. What is the legal relationship betw een Article X:3(a) of the GATT 1994 and 
Article X:3(b) of the GATT 1994, if any? 
The EC can refer to its response to the Panel's Question No. 87. 
 
                                                      
 44 The New Shorter Oxford English Dictionary , Clarendon Press, Oxford, 1993, Volume 2, at 2582, and 
Volume 1, at 516 (Exhibit EC-123).  
45 María Moliner, Diccionario del uso del español , Editorial Gredos, Madrid, 1988, at 1003 and 960 
(Exhibit EC-124). 
 46 Le nouveau petit Robert , Dictionnaires Le Robert, Paris, 2003, at 2296 and 2201 (Exhibit EC-125). WT/DS315/R 
Page A-84  
 
 ANNEX A-4 
 
RESPONSES OF THE EUROPEAN COMMUNITIES TO QUESTIONS POSED BY  
THE UNITED STATES AFTER THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005) 
  
1. At paragraphs 46 to 48 of its First Written Submission, the EC refers to the fact that the 
Commission may bring infringement proceedings against member States and that individuals 
play a vital role in bringing allegations of infringement to the Commission's attention.   
(a) Since 1995, how many complaints by individuals regarding infringement have 
been submitted to the Commission concerning member State administration of customs law?   
 The answer is 51. 
 
(b) Since 1995, how many infringement proceedings has the Commission 
commenced against member States concerning administration of customs law?  
 The answer is 83. 
 
2. At paragraph 38 of its Opening Statement, the EC states that "the EC is under no 
obligation under Article X:3(a) GATT to establish a BTI system, let alone to design this system 
in a particular way."  Is it the EC's position that where a device – such as BTI – is not specifically required by WTO obligations there is no obligation to administer that device in a 
uniform manner? 
  As the EC has stressed repeatedly, Articl e X:3(a) GATT concerns the administration
 of the 
laws and regulations pertaining to the ma tters referred to in Article X:1 GATT. 
  Since BTI pertains to the classification of goods, the EC does not contest that the EC's BTI practice must be compatible with Article X:3(a) GATT.  
 However, the US so far has not shown any actua l inconsistency in the EC's BTI practice, but 
rather criticized specific aspects of the design of the EC's BTI system. This is not sufficient for 
showing a violation of Article X:3(a) GATT.   As concerns the US reference to other "devi ces", the EC would repeat that Article X:3(a) 
GATT applies only to administration of the laws and regulations referred to in Article X:1 GATT. In 
this respect, the EC can refer to its r esponse to the Panel's Question No. 118.  
 
3. When an importer seeks classification of a good imported into a given member State, is 
the member State's customs authority required  to search the EBTI database to determine 
whether one of the other 24 member State authorities has issued BTI classifying that good?  
 
 The EC understands the US question to refer to the classification of products in the course of 
normal customs procedures, and not to the issuance of BTI.   There is no general obligation to consult th e EBTI data base whenever customs authorities 
classify a good. EC customs authorities have to deal with millions of customs declarations each year. 
In the large majority of cases, the classification of  the goods in question is unproblematic. It would  WT/DS315/R 
 Page A-85 
 
 
 therefore be completely disproportionate, and r esult in a considerable slowing-down of customs 
procedures, to require consultation of the EB TI data base in each a nd every case involving a 
classification of goods.   Of course, when classifying products, as in any other area of customs administration, the 
customs authorities are under the general duty of coope ration (Article 10 EC). This means that they 
must exercise due care, and use all necessary means, to decide on the concrete application of the Combined Nomenclature. Wherever there is a doub t as to the correct classification of the good in 
question, the available means which member States customs authorities have recourse to also include 
consultation of the EBTI data base.  
 
4. At paragraph 26 of its Opening Statement, the EC states that "where an individual 
trader does not exhaust all the remedies and pro cedural possibilities afforded to him by the 
system of a WTO Member, a resulting lack of un iformity cannot be attributed to a failure in 
that Member's system."  Is it the EC's position that the burden of ensuring uniform 
administration lies with individual traders?  
 No. The EC institutions and the member States  customs authorities are also responsible for 
ensuring a uniform interpretation and application of EC customs law.   However, as the EC has explained, in any syst em of customs administrations, individuals also
 
have a role to play. If a trader decides not to a ppeal a decision in particular issue, even though a 
possibility of appeal exists, this decision cannot be at tributed to the customs authorities. If, due to the 
decision of an individual trader, a wrong decision is allowed to stand, this cannot be regarded as a 
lack of uniformity attributable to that Me mber's system of customs administration. 
 5. In Question No. 27 of the Panel's provisional  questions to the parties, the Panel asked 
the EC to comment on the substance of the follo wing statement by the Advocate General in the 
Timmermans case (para. 41 of Exhibit US-21):  
"... the tariff classification of equivalent goods cannot vary from one member State to another according to the differing 
assessments given by the various national customs authorities, as 
this would fail to take into acco unt the objective of securing the 
uniform application of the customs nomenclature within the Community, which is intended, inter alia, to avoid the development of discriminatory treatment as between the traders 
concerned." 
We understood the EC, in its response at the 15 Se ptember 2005 Panel meeting, to state that the 
term "equivalent goods" as used in the quoted statement should be understood to mean "identical goods." 
(a) Could the EC please confirm that this is its position? (b) If so, what is the EC's basis for stat ing that the term "equivalent goods" as used 
in the quoted statement should be understood to mean "identical goods"?  
 The EC would refer the US to its r esponse to the Panel's Question No. 49.  
 
6. Question No. 30 of the Panel's provisional questions to the parties asked the EC to 
comment on the Commission 's statement at page 12 of An Explanatory Introduction to the 
modernized Customs Code (Exhibit US-32) that "it is proposed to extend the binding effect of WT/DS315/R 
Page A-86  
 
 [binding tariff information] also to the holder(s) of the decision in order to avoid the system only 
being used where the applicant is satisfied with the result."  We understood the EC to state that 
the situation described in the quoted statement – i.e. "the system only being used where the applicant is satisfied with the result" – is a rather rare circumstance.  
 If it remains the EC's view that the si tuation described is a rather rare circumstance, 
what is the basis for that view?  Please s upply any data on which the EC bases its view.  
 The EC does not have any evidence that would indicate that such situations are frequent. The 
EC cannot reasonably be expected to prove that something is "rare".  
 
 Moreover, the EC would remark that the burden of proof in this case is on the US as the 
complainant. Accordingly, it is for the US, not for the EC, to provide evidence that would show that 
the situation referred to is a frequent circumstance.  
7. Paragraph 407 of the EC's First Written Submission states, in the last sentence: 
"However, it was decided that the case could be  further examined through a working group of 
the [Customs Code] Committee."  In explaini ng this statement during the course of the 
15 September 2005, Panel meeting, we understood th e EC to state that the reference to "the 
case" in the quoted statement pertains not to th e case of RIL but to the general matter of what 
constitutes a control relationship for customs val uation purposes.  Could the EC please confirm 
this understanding? 
 
 The EC would refer the US to its r esponse to the Panel's Question No. 62.  WT/DS315/R 
 Page A-87 
 
 
 ANNEX A-5 
 
RESPONSES OF ARGENTINA TO QUESTIONS POSED BY THE PANEL  
AFTER THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005) 
 
 
QUESTIONS FOR ALL THE THIRD PARTIES  
 
103. What is meant by the term "uniform" in Article X:3(a) of the GATT 1994? 
 
 Argentina reiterates1 that the term "uniform" is defined as "of one unchanging form, 
character, or kind; that is or stays the same in different places or circumstances, or at different times", as indicated in WTO case law
2. 
 
104. How do the third parties ensure uniformity in administration of their respective customs 
laws at different points of entry?  In this re gard, please provide details regarding all relevant 
aspects of customs administration, including in particular those aspects that are not directly 
linked to the constitutional and institutio nal structure of customs administration. 
 No response provided. 
 
105. What body(ies)/procedures are in place in th e third parties to discharge their obligations 
under Article X:3(b) of the GATT 1994?  Please explain how recourse to this(ese) body(ies)/procedures works in practice, includi ng how long the review and correction process 
takes. 
 No response provided. 
 
106. The United States refers to divergent decisions  taken by member State authorities 
throughout its First Written Submission.  For exampl e, the United States refers to divergence in 
classification  decisions : generally (paragraph 21); with resp ect to network cards for personal 
computers (footnote 33); with respect to drip i rrigation product (footnote 33); and with respect 
to unisex articles or shirts (paragraph 76).  Fur ther, the United States refers to divergence in 
customs valuation decisions  (paragraphs 25 and 93).  Can such divergence in decisions be 
challenged under Article X:3(a) of the GATT 1994? 
 Argentina considers such divergence to be  challengeable under Article X:3(a), as it may 
imply non-uniform administration of regulations or  administrative rulings of a general nature 
pertaining to the classification or valuation of products for customs purposes.   
 
"Divergence" in the administration of such re gulations or administrative rulings would make 
it impossible for every exporter and importer to be able " to expect  treatment of the same kind, in the 
                                                     
 
1 We refer to Argentina's Third Party Oral Statement of 15 September 2005, footnote 5, which in turn 
refers to the Panel Report in  Argentina – Measures Affecting  the Export of Bovine Hides and the Import of 
Finished Leather , WT/DS155/R, paragraph 11.83 (hereinafter Argentina – Hides and Leather ). 
2 Panel Report in Argentina – Hides and Leather , WT/DS155/R, paragraph 11.80 et seq.  which in turn 
refers to The New Shorter Oxford English Dictionary , volume II, Oxford (1993), page 3488. In our view, the 
concept of uniformity should be separated from the concep t of non-discrimination, as indicated by the Panel in 
Argentina – Hides and Leather , WT/DS155/R, paragraph 11.84. WT/DS315/R 
Page A-88  
 
 same manner both over time and in differen t places and with respect to other persons "
3. 
Consequently, administration would not be unifo rm and this would infringe the obligation under 
Article X:3(a) of the GATT 1994.  
 In other words, any divergence in these "d ecisions" would be inconsistent with the 
requirement of " uniform administration of Customs laws and procedures between individual shippers 
and even with respect to the same person at different times and different places "4. 
 
107. In paragraphs 220-221 of its First Wr itten Submission, the European Communities 
submits that, where sub-federal laws exist in a particular WTO Member, it is the administration of those laws to which Article X:3(a) of the GATT 1994 refers. 
(a)  Does Article X:3(a) apply to penal laws?  
 Argentina considers Article X:3(a) to be app licable to penal laws insofar as the latter cover 
conduct pertaining to "the classification or the valuat ion of products for customs purposes, or to rates 
of duty, taxes or other charges, or to requirements, restrictions or pr ohibitions on imports or exports or 
on the transfer of payments therefore, or affecting their sale, distribution, transportation, insurance, 
warehousing inspection, exhibition, processing,  mixing or other use" (Article X:1).  
 
(b)  If so, would the Panel be authorized to consider the administration of member 
States' penal laws in respect of the United States' claim under Article X:3(a)? 
 In Argentina's opinion, yes, insofar as such laws  refer to the administration of EC legislation.  
We reiterate our view that, since its membership of  the WTO is separate from that of its component 
States, it is the EC that is bound to comply with  the requirements of Article X:3(a) of the GATT 
1994
5. 
 
108. How should "prompt" be defined under Article X:3(b) of the GATT 1994? 
 Argentina refers the Panel to its third party statement at the first Panel hearing6. 
 
QUESTIONS FOR THE PARTIES AND THIRD PARTIES:  
109. How should the term "administer" be int erpreted for the purposes of Article X:3(a) of 
the GATT 1994? 
 No response provided. 
 
110. Does the uniformity obligation in Article X:3(a) of the GATT 1994 mean that there 
should be no or only limited possibility for th e exercise of discretion in the administration of 
customs laws? 
 No response provided. 
 
                                                      
3 Panel Report in Argentina – Hides and Leather, WT/DS155/R, para. 11.83, referring to the concept of 
uniformity. 
4 Panel Report in Argentina – Hides and Leather , WT/DS155/R, para. 11.83, referring to the term 
"uniform". 
5 Argentina's First Third Party Oral Statement, 15 September 2005, para. 10. 
6 Argentina's First Third Party Oral Stat ement, 15 September 2005, paras. 11 et seq . which refer to the 
First Written Submission of the EC, para. 459.  WT/DS315/R 
 Page A-89 
 
 
 111. Is the time taken to address a specific i ssue (including instances of divergences in 
administration) a consideration to be taken in to account for the purposes of the uniformity 
obligation in Article X:3(a) of the GATT 1994?  If  so, please explain why, making reference to 
the specific terms of Article X:3(a).    
 No response provided. 
 
112. With respect to the WTO objective of securi ty and predictability in the international 
trading environment (which was recently referred to by the Appellate Body in the context of 
tariff commitments at paragraph 243 of its report in EC – Chicken Cuts  WT/DS269/AB/R and 
WT/DS286/R), please explain whether, why and how it is relevant for the interpretation of 
Article X:3(a) of the GATT 1994. 
 No response provided. 
 
113. Are the expectations of traders relevan t to an interpretation and application of 
Articles X:3(a) and X:3(b) of the GATT 1994?  If so, please explain why and how, making 
reference to the specific language of those Articles. 
 Argentina reiterates its opinion that exporters and importers are the main beneficiaries of the 
obligations established under  Article X of the GATT 1994
7.  This follows both from the provisions of 
the GATT 1994 themselves – Article X:3(b) specifica lly refers to "importers", and Article X:1, 
referred to under Article X:3(a), refers to "trade rs" and "enterprises, public or private"- and from 
WTO case law8. 
 
114. Does the obligation contained in Article X:3(a) of the GATT 1994 require overall  
uniformity in administration or does it require uniformity in administration in each and every 
case?  Does the answer depend upon the nature of the challenge under Article X:3(a)?  If so, 
please explain.  If overall uniformity is acceptable under Article X:3(a), what would be the 
practical/numerical threshold and/or benchmark fo r demonstrating that Article X:3(a) has been 
violated? 
 No response provided. 
 
115. Please comment on the submission made by Japan in paragraph 8 of its third party 
submission to the effect that, in assessing the United States' claim under Article X:3(a) of the 
GATT 1994, it is necessary for the Panel to anal yze whether the alleged divergences exist, as 
claimed by the United States, and if so, whether such divergences exist to a degree that would be 
considered to be inconsistent with Article X:3(a) in light of the particular customs system as a 
whole. 
 No response provided. 
 
116. In paragraph 2 of Japan's Oral Statem ent at the third party session of the first 
substantive meeting, Japan relies upon the "m inimum standards" of transparency and 
procedural fairness referred to  by the Appellate Body in US – Shrimp  to argue that "[a]n 
                                                      
7  Argentina's First Third Party Oral St atement, 15 September 2005, para. 15. 
8 Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and the Import of Finished 
Leather , WT/DS155/R, paras. 11.68, 11.76 and 11.77; Appellate Body Report, United States – Restrictions on 
Imports of Cotton and Man-Made Fibre Underwear , WT/DS24/R, para. 21; Panel Report,  United States – Anti-
Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea , 
WT/DS179/R, paras. 6.50 and 6.51.  WT/DS315/R 
Page A-90  
 
 administration of regulations lacking 'uniform ity' [for the purposes of Article X:3(a) of the 
GATT 1994] would in general terms be unjust, biased, inequitable, partial and opaque – in other words, unfair and non-transparent".  Following this line of reasoning, would the requirements of transparency and procedural fairness apply to: (i) the processes or the treatment of traders in the context of the applicat ion of customs laws; and/or (ii) the substantive 
customs decisions to which traders are subject?   
 No response provided. 
117. In paragraph 7.268 of its report, the Panel in US – Hot Rolled Steel  (WT/DS184/R) 
stated that "we note that Japan has not even alleged, much less established, a pattern of decision-making with respect to the specific matters  it is raising which would suggest a lack of 
uniform, impartial and reasonable administration of the US anti-dumping law [under 
Article X:3(a) of the GATT 1994]".   Please comment on the Panel's finding that a pattern of 
decision-making is needed in order to prove a violation of Article X:3(a). 
 No response provided. 
 118. What is meant by the words "pertaining to" in Article X:1 of the GATT 1994?  Would rules governing the operational procedures of bodies that oversee or are somehow involved in the administration of customs laws – such as, for example, the EC Customs Code Committee – 
qualify as laws, regulations, judicial decisions a nd administrative rulings of general application 
"pertaining to" the classification or the valuation of products for customs purposes? 
 No response provided. 
 119. Do penalty laws/provisions applicable to violations of customs laws fall within the scope of the measures referred to in Article X:1 of  the GATT 1994?  If so, please explain making 
reference to the relevant terms of Article X:1. 
 No response provided. 
 120. What is the significance of Article XXIV:12 of the GATT 1994 for the interpretation of Article X:3(a) of the GATT 1994? 
 No response provided. 
 
121. Making reference to the specific terms of  Article X:3(b) of the GATT 1994, please 
explain whether or not the obligation to ensure prompt review and correction of administrative 
action is confined to first instance reviews by administering authorities . 
 No response provided. 
 
122. What does "correction" mean in Article X:3(b) of the GATT 1994? 
 No response provided. 
  WT/DS315/R 
 Page A-91 
 
 
 123. What is the legal relationship betw een Article X:3(a) of the GATT 1994 and 
Article X:3(b) of the GATT 1994, if any? 
 Argentina refers the Panel to what it said in its  third party statement at the first Panel hearing9.
                                                      
9 Argentina's First Third Party Oral Statement, 15 September 2005, paras. 5 – 10.  WT/DS315/R 
Page A-92  
 
 ANNEX A-6 
 
RESPONSES OF CHINA TO QUESTIONS POSED BY THE PANEL  
AFTER THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005) 
 
 
QUESTIONS FOR CHINA
 
 
95. In relation to paragraph 5 of its third party submission, please specify the starting point and the ending point of the extra time China subm its is granted by virtue of the application of 
Article XXIV:12 of the GATT 1994. 
 Article XXIV:12 doesn't explicitly define the starting point and the ending point of the extra 
time.  However, the text a well as the purpose of Article XXIV:12 indicates that the starting point of 
the extra time is no later than the date when th e measure taken by the local level authority of a 
contracting party is found to be inconsistent with the provisions of  GATT. And the ending point of the 
extra time is the date when the measure inconsiste nt with the provisions of GATT by local authorities 
is removed. Although it is desirable that the extr a time should be as short as possible, it is necessary 
for the federal government of a contracting party to be allowed enough time to overcome the domestic 
difficulties encountered.  
96. With reference to paragraph 6 of China's third party submission, does China consider 
that Article XXIV:12 of the GATT 1994 cannot apply to the substance and/or administration of 
measures adopted at the federal/central level? 
 No, Article XXIV:12 of the GATT 1994 cannot appl y to the substance and/or administration 
of measures adopted at the federal/central le vel. China agrees with the GATT Panel in Canada – Gold 
Coins  that stated: "[t]his drafting history indicates, in the view of the Panel, that Article XXIV:12 
applies only to those measures taken at the regional or  local level which the federal government 
cannot control because they fall outside its juri sdiction under the constitu tional distribution of 
competence.
1 (Emphasis added by China)" Measures and/or  administration of measures adopted at the 
federal/central level is under the control of the fe deral/central government of a contracting party and 
within the jurisdiction of the federal/central government. 
97. In its third party submission, China appea rs to affirm the Panel's interpretation of the 
term "uniform" in Argentina – Hides and Leather  for the purposes of Article X:3(a) of the 
GATT 1994.  Does China understand that interpretation to mean that the administration of 
customs rules must not vary over time?  
China does not believe that the Panel's in terpretation of the term "uniform" in Argentina – 
Hides and Leather  to mean that the administration of customs rules must not  vary over time. That is to 
say, China does not believe that the Panel indicated in Argentina – Hides and Leather  that the 
administration of customs rules should be the same over time. What the Panel in Argentina – Hides 
and Leather  meant is that the administration of custom s rules cannot vary from time to time to the 
extent that the predictability does not exist. The Panel in Argentina – Hides and Leather  meant that 
administration of customs rules should be stable over time or in the reasonable period of time.   Although the administration of customs rules may vary at the beginning phase, it shall have a 
mechanism to correct the varied aspect s so as to administer uniformly.   
 
                                                     
 
1 GATT Panel Report, Canada – Gold Coins , para. 65  WT/DS315/R 
 Page A-93 
 
 
 QUESTIONS FOR ALL THE TH IRD PARTIES (103 – 108)  
 
 No responses provided. 
 
QUESTIONS FOR THE PARTIES AND THIRD PARTIES (109 – 123)  
  No responses provided.  
 WT/DS315/R 
Page A-94  
 
 ANNEX A-7 
 
RESPONSES OF JAPAN TO QUESTIONS POSED BY THE PANEL  
AFTER THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005) 
 
 QUESTIONS FOR JAPAN
 
 
98. Please explain in practical terms what is  meant by the reference to "results" in 
paragraph 9 of Japan's Third Party Submission. 
The term "results" in paragraph 9 of Japan 's third party submission means the actual 
administrations of customs regulations, i.e. the "application of" trade regulations pertaining to 
customs classification or valuation and other matters described in Article X:1 of the GATT.   
For example, in a case where a Member has not in troduced a sufficient system of the so called 
"advance ruling system", but the particular Member's trade regulation is administered uniformly as a result of implementation of other measures to ensure uniform administration, we are of the view that 
the administration is consistent with Article X:3(a) of the GATT, and the "results" in this case, in light 
of the usage we made in our submission, would be the actual application of the measures to ensure 
uniformity by this Member. 
99. With respect to paragraph 17 of its Third Party Submission, is Japan arguing that, 
under Article X:3(a) of the GATT 1994, the outcome  of review and correction procedures 
provided for under Article X:3(b) of the GATT 1994 must be uniform?  If so, please justify making reference to the text of Articles X:3(a) and X:3(b) 
 No.  The point of paragraph 17 in Japan's thir d party submission is that Article X:3(b) of the 
GATT obligates Members to maintain, or institute as soon as practicable, tribunals or procedures of 
review for "prompt review and correction of admini strative action relating to customs matters" – the 
matter of uniform implementation of such tribunals or procedures is a matter under Article X:3(a) of 
the GATT, where applicable.   
100. With respect to paragraph 2 of Japan's Oral Statement at the third party session of the 
first substantive meeting, does Japan consider th at "transparency" and "procedural fairness" 
are the only "minimum standards" that char acterize the requirements of Article X:3(a), 
including, in particular, the uniformity requirement?  If not, please identify any other relevant "minimum standards" 
The relevant part of paragraph 2 of Japan's Or al Statement indicates Japan's view on what the 
Appellate Body in US – Shrimp  had characterized as minimum standards of the requirements of 
Article X:3(a).  We stated in there that the requirements set out in Article X:3(a) are minimum 
standards, as the definition of transparency and proc edural fairness overlap in part with uniformity – 
we did not suggest whether these were the only char acteristics of the requirements thereof.  As to 
whether there are any other relevant "minimum sta ndards", Japan's point had been that uniformity, as 
well as other requirements under Article X:3(a), i.e.  impartiality and reasonability, are considered to 
be "minimum standards" by the Appellate Body in US – Shrimp .   
QUESTIONS FOR ALL THIRD PARTIES
 
103. What is meant by the term "uniform" in Article X:3(a) of the GATT 1994?  WT/DS315/R 
 Page A-95 
 
 
 As we have submitted in our Third Party Su bmission and Oral Statement, we support the 
following findings by panels, which define and give context to the meaning of the term "uniform" in 
Article X:3(a) of the GATT 1994.   
The Panel in Argentina – Hides and Leather  determined that "uniform" in Article X:3(a) of 
the GATT 1994 meant that uniformity meant Aunchanging form, character, or kind; that is or stays 
the same in different places or circumstances, or at different times"1, and that: 
Customs laws should not vary, th at every exporter and importer 
should be able to expect treatment  of the same kind, in the same 
manner both over time and in different places and with respect to other persons.  Uniform administration requires that Members ensure that their laws are applied consis tently and predictably and is not 
limited, for instance, to ensuring equal treatment with respect to 
WTO Members.  That would be a substantive violation properly 
addressed under Article I.  This is a requirement of uniform administration of Customs laws and procedures between individual shippers and even with respect to the same person at different times 
and different places.
2  
We are of the view that this provi sion should not be read as a broad 
anti-discrimination provision.  We do not think this provision should be interpreted to require all produc ts be treated identically.  That 
would be reading far too much into  this paragraph which focuses on 
the day to day application of Cust oms laws, rules a nd regulations.  
There are many variations in products which might require 
differential treatment and we do not thinks this provisions should be 
read as a general invitation for a panel to make such distinctions.
3 
Therefore, in addition to the meaning given to the term "uniform" that customs laws "should 
not vary, that every exporter and importer should be ab le to expect treatment of the same kind, in the 
same manner both over time and in different places and with respect to other persons…consistently 
and predictably", Article X:3(a) sha ll be interpreted in the context of  the "day to day application of 
Customs laws, rule s and regulation".  It is also necessary to take note that there is an extent to which 
such uniformity required under Article X:3(a) of the GATT 1994.  The Panel in US – Hot-Rolled Steel  
clarified that a Member's measure to be in consiste nt with GATT X:3(a) of the GATT, it would have to 
have a significant impact on the overall administrati on of that Member's law  and not simply on an 
impact on the outcome in the single case in question.4   The  GATT Panel in EEC – Dessert Apples  
found that minimal differences such as the form in which licence applications could be made and the 
requirement of pro-forma invoices did not in themselves establish a breach of Article X:3.5 
104. How do the third parties ensure uniformity in administration of their respective customs 
laws at different points of entry?  In this re gard, please provide details regarding all relevant 
                                                      
 1 Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and Import of Finished 
Leather (Argentina – Bovine Hides) , WT/DS155/R and Corr.1, adopted 16 February 2001, para. 11.80 (quoting 
The New Shorter Oxford English Dictionary , Vol. II at 3488 (1993)). 
 2 Ibid., para. 11.83. 
 3Ibid., para. 11.84. 
 4 See the Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products 
from Japan (US – Hot-Rolled Steel) , WT/DS184/R, adopted 23 August 2001, para. 7.268. 
 5 See the GATT Panel Report, EEC – Restrictions on Imports of Dessert Apples  (L/6491-36S/93) 
(EEC – Dessert Apples ), adopted on 22 June 1989, para.12.30. WT/DS315/R 
Page A-96  
 
 aspects of customs administration, including in particular those aspects that are not directly 
linked to the constitutional and institutio nal structure of customs administration. 
Japan Customs administrates various measures to  ensure the uniform customs administration, 
varying from common methods such as consultations  and meetings within and between (a) regional 
customs to mechanisms at the national leve l, of which major measures are as follows: 
With a view to ensure the uniform administ ration of customs regulations, Japan Customs 
functions as the central authorities for tariff classifi cation and valuation, the function of which is to 
carry the primary responsibility to interpret trade regulations relating to customs classification, 
customs valuation as well as some relevant matters.  When issuing decisions of advance rulings (which are explained below) of difficult matters, regional customs are obliged to consult with the 
central authorities.  The central authorities main tain databases of the decisions made by regional 
customs, and also provide various trainings for officials of regional customs in order to ensure uniform administration of trade regulations throughout Japan. 
Japan has implemented the advance ruling syst em for customs related matters regarding 
imports since 1966.  Under this system, the customs au thorities informs, either orally  (application and 
ruling communicated through e-mail is treated as an "o ral" ruling) or in a written form (application 
and ruling via CuPES (Customs Procedure Entry System ), a system that allows application through 
the web-system, istreated as a "written" ruling), th e appropriate tariff classification, etc., to the 
applicant (importers or other concerned parties of the goods to be imported) who has requested for an 
advanced ruling. These rulings may be given concerni ng: tariff classification, tariff rates, origin of 
goods and customs valuation.    In addition, wh ere a written decision is made, such decisions are 
publicized and provided to the public as a database on the internet at the official website of the Japan 
Customs, in principle, except for commercially  sensitive cases where publication is withheld.  
Please also see our answer for Question No. 105 below, which explains the 
tribunals/procedures which help implement a uniform administration of trade regulations in Japan. 
105. What body(ies)/procedures are in place in th e third parties to discharge their obligations 
under Article X:3(b) of the GATT 1994?  Please explain how recourse to this(ese) 
body(ies)/procedures works in practice, includi ng how long the review and correction process 
takes. 
Japan provides both administrative procedures and judicial procedures for the purpose of 
prompt review and correction of admini strative action relating to customs matters .  The administrative 
procedures cannot be abbreviated before filing a case to a judicial tribunal for some cases designated 
by law, such as decisions to impose customs tariff.   The details of each procedure are as follows:   
First, any person who is not satis fied with an action taken by a regional customs may make an 
objection to the Director-General (DG) of the partic ular regional customs, with in two months after the 
day following the date which the person became aware of the particular action. The DG is expected to 
make a decision regarding whether the action had been appropriate within three months after 
receiving such objection (if the decision is not ma de within that period, the person who made an 
objection can move to the next procedure explai ned in the last paragraph of this reply).  
Any person who is not satisfied with a decisi on made by the DG of the regional customs in 
response to the objection made may file an appeal to the Minster of Finance within one month after 
the day following the date the person receives the no tification of the DG's decision. The Minister of 
Finance is expected to make a decision regarding wh ether the action had been appropriate within three 
months after receiving the appeal (if the decision is not made within that period, the person who made  WT/DS315/R 
 Page A-97 
 
 
 an objection can move to the next procedure expl ained in the first paragraph of the reply to 
Question No. 106 below).  
In addition, a ny person who is not satisfied with the decision made by the Minister of Finance 
(or for some cases where the above procedures may be abbreviated, an action taken by a regional 
customs) may file a case to a judicial tribunal with in six months after the date after becoming aware 
of the decision (or action), or a year after the date of the decision (or action), in principle (this term 
may be extended for certain cases). 
106. The United States refers to divergent decisions  taken by member State authorities 
throughout its First Written Submission.  For exampl e, the United States refers to divergence in 
classification  decisions : generally (paragraph 21); with resp ect to network cards for personal 
computers (footnote 33); with respect to drip i rrigation product (footnote 33); and with respect 
to unisex articles or shirts (paragraph 76).  Fur ther, the United States refers to divergence in 
customs valuation decisions  (paragraphs 25 and 93).  Can such divergence in decisions be 
challenged under Article X:3(a) of the GATT 1994?  
The nature of custom administration is that it often involves vast numbers of imports and 
numerous different products which are complicated to classify, reflecting the realities such as the 
speed of technological advances and the resulting pr oduction of new products.  Therefore, the fact 
divergences between individual decisions of variou s customs authorities may exist in itself is not 
inconsistent with Article X:3(a) of the GATT.   
Taking into account the above, if the cases mentioned by the United States substantiates the 
non-uniformity of the overall administration of EC's  customs regulation that may have a significant 
impact on the competitive situation, then these decisions , which are implementations of "laws, 
regulations, judicial decisions and administrative ru lings", would be divergences that reach the degree 
which is inconsistent with Article X:3(a).  
107. In paragraphs 220-221 of its First Wr itten Submission, the European Communities 
submits that, where sub-federal laws exist in a particular WTO Member, it is the 
administration of those laws to which Article X:3(a) of the GATT 1994 refers. 
(a) Does Article X:3(a) apply to penal laws? 
Yes, as long as such law is a penalty against violations of relevant trade regulations. 
Article X:3(a) GATT applies to "laws, regulations , decisions and rulings of the kind described in 
paragraph 1 of this Article".  Article X:1 GATT thus  specifies the scope of the "regulations, decisions 
and rulings of the kind" in Article X:3(a) GATT, and stipulates as follows: 
Laws, regulations, judicial decisi ons and administrative rulings of 
general application, made effective by any contracting party, pertaining to the classification or the valuation of products for 
customs purposes, or to rates of duty, taxes or other charges, or to requirements, restrictions or prohi bitions on imports or exports or on 
the transfer of payments therefor, or affecting their sale, distribution, 
transportation, insurance, warehousing inspection, exhibition, processing, mixing or other use. 
Penalties for violation of customs law are laws , regulation, decisions and rulings that are 
imposed against violations of customs law, i.e. "p ertain to" "the classification or the valuation of 
products for customs purposes, or to rates of duty, tax es or other charges…", and/or affects "their sale, 
distribution …" and therefore fall within the scope of Article X:3(a) GATT.   WT/DS315/R 
Page A-98  
 
 Although Article VIII:3 GATT does prohibit from imposing substantial penalties for minor 
breaches and sanctions, this is not the same as, and does not necessarily ensure a uniform 
administration of sanctions, as the EC suggests.
6 
However, as it is not specifically set out in Article X:1 that penalties are included, and it is 
cumbersome to interpret whether penalties are included in the scope of regulations set out in 
Article X:1.  In connection with the efforts to clarify and improve Article VIII, as well as better 
meeting the objective of Article X, Japan has prop osed that penalty provisions against breaches of 
import and export formalities in rele vant laws and regulations be "cl early stated and publicized in the 
negotiation of trade facilitation7. 
(b) If so, would the Panel be authorized to consider the administration of member 
States' penal laws in respect of the United States' claim under Article X:3(a)? 
Yes, in our view, the Panel would be authorized to do so. 
108. How should "prompt" be defined under Article X:3(b) of the GATT 1994? 
In addition to what Japan has stated in paragr aph 18 of its third party submission, we view 
that the appropriate definition of "prompt" in this sense means "being ready and quick to act as 
occasion demands"8 as well as "without delay", while "delay" is "(a period of) time lost by inaction or 
inability to proceed", as EC has stated in paragraph 459 of its First Written Submission.  As to how to 
determine whether a review had been conducted "ready and quick to act as occasion demands" or 
"without delay", it would depend in accordance with the specific circumstances surrounding the particular system, and should be decided in li ght of the totality of the relevant situation. 
With the above in view, the administrative tr ibunal procedures of Japan may serve as a 
reference.  As stated in our answer for Questi on No. 11 above, in Japan's administrative tribunal 
procedures for Customs procedures, the DG of a re gional customs makes a decision on a claim within 
five months after the action at issue is administer ed by the particular regional customs (taking into 
account the two month term for the applicant to make  an objection and the three months for the DG to 
make a decision in our answer for Q.11 above) in principle, and the Minister of Finance makes a 
decision on an appeal against the decision of the DG within nine months after the action at issue is 
administered in principle. 
QUESTIONS FOR THE PARTIES AND THIRD PARTIES:
 
109. How should the term "administer" be int erpreted for the purposes of Article X:3(a) of 
the GATT 1994? 
No response provided. 
110. Does the uniformity obligation in Article X:3(a) of the GATT 1994 mean that there 
should be no or only limited possibility for th e exercise of discretion in the administration of 
customs laws? 
 No response provided. 
                                                      
 6 See the First Written Submission of the European Communities, para. 441. 
 7 Section IV, TN/TF/W/17. 
 8 Merriam-Webster Online Dictionary , http://www.m-w.com/cgi-bin/dictionary.  WT/DS315/R 
 Page A-99 
 
 
 111. Is the time taken to address a specific i ssue (including instances of divergences in 
administration) a consideration to be taken in to account for the purposes of the uniformity 
obligation in Article X:3(a) of the GATT 1994?  If  so, please explain why, making reference to 
the specific terms of Article X:3(a).   
No response provided.  
112. With respect to the WTO objective of securi ty and predictability in the international 
trading environment (which was recently referred to by the Appellate Body in the context of 
tariff commitments at paragraph 243 of its report in EC – Chicken Cuts  WT/DS269/AB/R and 
WT/DS286/R), please explain whether, why and how it is relevant for the interpretation of Article X:3(a) of the GATT 1994. 
As Article X:3(a) is a provision which contri butes to the security and predictability in 
international trading environment by ensuring uni form, impartial and reas onable administration of 
trade regulations, such WTO objective is relevant, and Article X:3(a) should be interpreted in light of 
such objective. 
113. Are the expectations of traders relevan t to an interpretation and application of 
Articles X:3(a) and X:3(b) of the GATT 1994? If so, please explain why and how, making 
reference to the specific language of those Articles. 
 No response provided.  
114. Does the obligation contained in Article X:3(a) of the GATT 1994 require overall  
uniformity in administration or does it require uniformity in administration in each and every 
case?  Does the answer depend upon the nature of the challenge under Article X:3(a)?  If so, 
please explain.  If overall uniformity is acceptable under Article X:3(a), what would be the 
practical/numerical threshold and/or benchmark fo r demonstrating that Article X:3(a) has been 
violated? 
 No response provided.  
115. Please comment on the submission made by Japan in paragraph 8 of its third party 
submission to the effect that, in assessing the United States' claim under Article X:3(a) of the 
GATT 1994, it is necessary for the Panel to anal yze whether the alleged divergences exist, as 
claimed by the United States, and if so, whether such divergences exist to a degree that would be 
considered to be inconsistent with Article X:3(a) in light of the particular customs system as a 
whole. 
 No response provided.  
116. In paragraph 2 of Japan's Oral Statem ent at the third party session of the first 
substantive meeting, Japan relies upon the "m inimum standards" of transparency and 
procedural fairness referred to  by the Appellate Body in US – Shrimp  to argue that "[a]n 
administration of regulations lacking 'uniform ity' [for the purposes of Article X:3(a) of the 
GATT 1994] would in general terms be unjust, biased, inequitable, partial and opaque – in 
other words, unfair and non-transparent".  Following this line of reasoning, would the 
requirements of transparency and procedural fairness apply to: (i) the processes or the treatment of traders in the context of the applicat ion of customs laws; and/or (ii) the substantive 
customs decisions to which traders are subject?   
 No response provided. WT/DS315/R 
Page A-100  
 
 117. In paragraph 7.268 of its report, the Panel in US – Hot Rolled Steel  (WT/DS184/R) 
stated that "we note that Japan has not even alleged, much less established, a pattern of decision-making with respect to the specific matters  it is raising which would suggest a lack of 
uniform, impartial and reasonable administration of the US anti-dumping law [under Article X:3(a) of the GATT 1994]".   Please comment on the Panel's finding that a pattern of 
decision-making is needed in order to prove a violation of Article X:3(a). 
No response provided. 
118. What is meant by the words "pertaining to" in Article X:1 of the GATT 1994?  Would 
rules governing the operational procedures of bodies that oversee or are somehow involved in the administration of customs laws – such as, for example, the EC Customs Code Committee – 
qualify as laws, regulations, judicial decisions a nd administrative rulings of general application 
"pertaining to" the classification or the valuation of products for customs purposes? 
"Pertain" in the context of Article X:1 means to "have reference or relation to; relate to"
9.  
However, this should not mean that any matter, howe ver distantly related, falls within the scope of 
Article X:1.  The distinction should be made base d on whether the relevant laws, etc., are relevant 
enough so that it can be seen to be directly relate to matters indicated in Article X:1.  Therefore, 
whether rules governing the operati onal procedures of bodies that oversee or are somehow involved in 
the administration of customs laws pertaining to ma tters set out in Article X:1 should be determined 
in light of  the content of such rule.  If it sets out the details of how to implement trade regulations, 
then it may "pertain to" trade regulations set out in Article X:1.  However, it is difficult to envision 
that the rules governing operational procedures of bodi es is rules of "general application" as required 
under Article X:1. 
119. Do penalty laws/provisions applicable to violations of customs laws fall within the scope 
of the measures referred to in Article X:1 of  the GATT 1994?  If so, please explain making 
reference to the relevant terms of Article X:1. 
Please see our answer for Question No. 107 (a) above. 
120. What is the significance of Article XXIV:12 of the GATT 1994 for the interpretation of 
Article X:3(a) of the GATT 1994? 
 No response provided.  
121. Making reference to the specific terms of  Article X:3(b) of the GATT 1994, please 
explain whether or not the obligation to ensure prompt review and correction of administrative 
action is confined to first instance reviews by administering authorities . 
 No response provided. 
122. What does "correction" mean in Article X:3(b) of the GATT 1994? 
 No response provided. 
                                                      
 9 The New Shorter Oxford English Dictionary , Vol. 2 at 2173 (1993).  WT/DS315/R 
 Page A-101 
 
 
 123. What is the legal relationship betw een Article X:3(a) of the GATT 1994 and 
Article X:3(b) of the GATT 1994, if any?  
 No response provided. WT/DS315/R 
Page A-102  
 
 ANNEX A-8 
 
RESPONSES OF KOREA TO QUESTIONS POSED BY THE PANEL  
AFTER THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005) 
 
 QUESTIONS FOR KOREA
 
 
101. With respect to paragraph 7 of its third party submission, please explain in practical 
terms how a distinction can be drawn between, on the one hand, a legitimate exercise of 
discretion and, on the other hand, an instance of non-uniform administration in violation of Article X:3(a) of the GATT 1994? 
 Discretion a WTO member enjoys under the WT O regime does not mean that the member 
can justify its deviation from otherwise applicab le obligation by referring to the discretion.  
Discretion for a WTO member is only allowed only to the extent and only if the exercise of such discretion is within the relevant obligations of the WTO regime.     In more practical terms, Korea believes that  the EC is free to adopt whatever customs 
administration system as it pleases – whether it is a centrally-controlled single customs agency 
system or 25 independent and separate customs agency system.  However, as a WTO member, the 
EC must make sure that administration of the customs laws and regulations is "reliable and 
predictable" from the perspective of foreign e xporters, no matter which member country's customs 
agency and procedures the exporters decide to utilize.   So, Korea is of the opinion that the dividing 
line between a legitimate exercise of discretion a nd violation of uniform administration obligation 
should be whether there is "relia bility and predictability" across the board of a WTO member.  Korea 
notes that the EC has not fulfilled this obligation.  
102. In paragraph 3 of its third party submission, Korea refers inter alia  to the 
"frustrating", "burdensome", "unreasonable" and "unpredictable" administration of EC 
customs laws from the perspective of forei gn exporters.  Does Korea have any concrete 
evidence to support these allegations? 
 This observation is based upon the compilation of  concerns and complaints of some Korean 
exporters who have had to deal with the EC me mber country's varying administration of customs 
laws and regulations.  Due to the business confid ential nature of the underlying business transactions 
(that is, as to some Korean exporters, explaining sel ection of a particular port of entry could reveal 
their business strategy and plans) and sensitivity of the claims, Korea is not currently in the position 
of providing concrete evidence in this respect.  Ko rea, however, will make its best effort, if such 
concrete evidence from the Korean side becomes cruc ial to the Panel's analysis.  Korea notes that the 
examples provided in the US First Written Submissi on seems to offer an accurate description of the 
Korean exporters' problems as well.  QUESTIONS FOR ALL THIRD PARTIES
 
103. What is meant by the term "uniform" in Article X:3(a) of the GATT 1994? 
 The "uniformity" standard as included in Article X:3(a) of the GATT 1994 does not mean 
that a customs authority should render the same d ecision all the time.  Korea does not believe it 
logistically possible or practicable, given the ever-changing nature of existing products and the 
advent of new products.  In Korea's opinion, the uni formity means that a foreign exporter can expect  WT/DS315/R 
 Page A-103 
 
 
 "reliable and predictable" administration of customs law and regulations.  In ot her words, if a foreign 
exporter has to "guess" at the border regarding cl assification or valuation, it shows the lack of 
"reliability or predictability" in terms of custom s system, which would then lead to "non-uniform" 
administration of customs laws and regulations.  104. How do the third parties ensure uniformity in administration of their respective customs laws at different points of entry?  In this regard, please provide details regarding all 
relevant aspects of customs administration, includi ng in particular those aspects that are not 
directly linked to the constitutional and institutional structure of customs administration. 
 In Korea, the Korean Customs Se rvice is in charge of all cust oms issues.  It applies customs 
laws and regulations uniformly throughout the Kor ean territory.  As all customs-related issues are 
monitored and coordinated by a single government agency, a conflicting customs decision rarely 
occurs, and any such conflict is promptly resolved.   
105. What body(ies)/procedures are in place in the third parties to discharge their 
obligations under Article X:3(b) of the GATT 1994?  Please explain how recourse to this(ese) 
body(ies)/procedures works in practice, includi ng how long the review and correction process 
takes. 
 An aggrieved importer can file a protest with the Korean Customs Service for correction or 
clarification.  When a protest is filed, the Korean Customs Service is required to issue a 
determination within 30, 60 or 90 days depending upon the nature of the protest.  If such request is 
denied, the aggrieved importer can initiate a lega l action against Korean Cu stoms Service requesting 
judicial review of the agency determination.  This  case can be then reviewed and determined by the 
Administrative Court, which is a special court in the Korean judicial system to deal with this kind of 
dispute.  The time period for the judicial review  is usually about one year, although a complex case 
may take longer than that. 
 
106. The United States refers to divergent decisions  taken by member State authorities 
throughout its First Written Submission.  For ex ample, the United States refers to divergence 
in classification  decisions : generally (paragraph 21); with resp ect to network cards for personal 
computers (footnote 33); with respect to drip irrigation product (footnote 33); and with respect 
to unisex articles or shirts (paragraph 76).  Fur ther, the United States refers to divergence in 
customs valuation decisions  (paragraphs 25 and 93).  Can such divergence in decisions be 
challenged under Article X:3(a) of the GATT 1994? 
 To answer the question upfront, Korea belie ves that such "divergence" can also be 
challenged under Article X:3(a) of the GATT 1994.  Again, in Korea's opinion, the divergence 
included in the US submission is simply a showcase of proving the lack of "reliability and 
predictability" in terms of EC's administ ration of customs laws and regulations.   
  If the divergence constitutes a simple aberrati on due to the inherent nature of customs 
administration, as the EC attempts to portray, th en such divergence may not be challenged under the 
provision.  Korea, however, believes that the exampl es in the US submission are simply a tip of the 
iceberg that indicates a chronic problem of di vergence, rather than infrequent, inadvertent 
aberrations.   
 
107. In paragraphs 220-221 of its First Wri tten Submission, the European Communities 
submits that, where sub-federal laws exist in a particular WTO Member, it is the administration of those laws to which Article X:3(a) of the GATT 1994 refers. 
(a)  Does Article X:3(a) apply to penal laws? WT/DS315/R 
Page A-104  
 
  Korea believes that the answer to the question is  in the affirmative.  As long as the relevant 
provisions of the penal laws are directly related to administration of customs laws and regulations, 
Korea does not see any particular reason to exclude penal laws.    
(b) If so, would the Panel be authorized to consider the administration of member 
  States' penal laws in respect of the United States' claim under Article X:3(a)? 
 Korea notes that the standard should be whethe r the administration of penal laws by various 
member states leads to "unreliable or unpredicta ble" penalization for customs related activities 
committed by foreign exporters.  If that is th e case, it may constitute possible violation of 
Article X:3(a) of GATT 1994. 
 
108. How should "prompt" be defined under Article X:3(b) of the GATT 1994? 
 Korea believes that the term "prompt" shoul d be interpreted as "without delay" under given 
circumstances.  If a WT O member has a system under which a judicial review systematically takes 
much longer time than that of other countries, the member fails to provide a "prompt" review.  The 
member should not be allowed to simply cher ry-pick an exceptionally time-consuming example 
from the complaining country and then compare it with its own case in an attempt to justify its 
alleged "promptness."   
QUESTIONS FOR THE PARTIES AND THIRD PARTIES
 
109. How should the term "administer" be int erpreted for the purposes of Article X:3(a) of 
the GATT 1994? 
 Korea believes that the term "administer" covers all  aspects relating to operation of customs 
laws and regulations of a WTO member.  
110. Does the uniformity obligation in Articl e X:3(a) of the GATT 1994 mean that there 
should be no or only limited possibility for the exercise of discretion in the administration of 
customs laws ? 
 To the extent that a WTO member should not exercise its discretion in a manner that violates 
its uniformity obligation under Article X:3(a) of th e GATT 1994, one could say that there is "limited 
possibility" for the exercise of discretion in the administration of customs laws and regulations. 
 111. Is the time taken to address a specific i ssue (including instances of divergences in 
administration) a consideration to be taken in to account for the purposes of the uniformity 
obligation in Article X:3(a) of the GATT 1994?  If so, please explain why, making reference to the specific terms of Article X:3(a).  
 Korea believes that the time taken is also one  of the elements to be considered in the 
uniformity obligation under Article X:3(a) of the GATT 1994 because the time taken to address a 
specific issue can alleviate or exacerbate the alleged divergence.  In other words, the longer it takes, 
the more expansive the divergence would be, and the more likely "non-uniformity" would exist. 
  WT/DS315/R 
 Page A-105 
 
 
 112. With respect to the WTO objective of securi ty and predictability in the international 
trading environment (which was recently referred to by the Appellate Body in the context of 
tariff commitments at paragraph 243 of its report in EC – Chicken Cuts  WT/DS269/AB/R and 
WT/DS286/R), please explain whether, why and how it is relevant for the interpretation of Article X:3(a) of the GATT 1994. 
 
 No response provided.  
113. Are the expectations of traders relevant to an interpretation and application of 
Articles X:3(a) and X:3(b) of the GATT 1994?  If so, please explain why and how, making 
reference to the specific language of those Articles. 
 As noted above, Korea believes that the underlyi ng theme of Article X:3(a) is to preserve a 
"reliable and predictable" customs system for fo reign exporters.  As such, in Korea's opinion the 
provision is relevant to the expectations of traders.  114. Does the obligation contained in Article X:3(a) of the GATT 1994 require overall  
uniformity in administration or does it require uniformity in administration in each and every 
case?  Does the answer depend upon the nature of the challenge under Article X:3(a)?  If so, 
please explain.  If overall uniformity is accep table under Article X:3(a), what would be the 
practical/numerical threshold and/or benchmark for demonstrating that Article X:3(a) has 
been violated? 
 
Korea believes that the uniformity as used  in Article X:3(a) refers to an overall  uniformity 
rather than uniformity in each and every case.  In  other words, the Panel needs to evaluate all 
relevant facts to determine whether the EC system can indeed guarantee a "reliable and predictable" 
customs system for foreign exporters.  
115. Please comment on the submission made by Japan in paragraph 8 of its third party 
submission to the effect that, in assessing the United States' claim under Article X:3(a) of the GATT 1994, it is necessary for the Panel to anal yze whether the alleged divergences exist, as 
claimed by the United States, and if so, wheth er such divergences exist to a degree that would 
be considered to be inconsistent with Article X:3( a) in light of the particular customs system as 
a whole. 
 No response provided.  
116. In paragraph 2 of Japan's Oral Statem ent at the third party session of the first 
substantive meeting, Japan relies upon the "m inimum standards" of transparency and 
procedural fairness referred to by the Appellate Body in US – Shrimp  to argue that "[a]n 
administration of regulations lacking 'uniformit y' [for the purposes of Article X:3(a) of the 
GATT 1994] would in general terms be unjust, biased, inequitable, partial and opaque – in 
other words, unfair and non-transparent".  Following this line of reasoning, would the 
requirements of transparency and procedural fairness apply to: (i) the processes or the treatment of traders in the context of the ap plication of customs laws; and/or (ii) the 
substantive customs decisions to which traders are subject?   
 No response provided. 
117. In paragraph 7.268 of its report, the Panel in US – Hot Rolled Steel  (WT/DS184/R) 
stated that "we note that Japan has not even  alleged, much less established, a pattern of 
decision-making with respect to the specific matters it is raising which would suggest a lack of 
uniform, impartial and reasonable administra tion of the US anti-dumping law [under WT/DS315/R 
Page A-106  
 
 Article X:3(a) of the GATT 1994]".  Please comment on the Panel's finding that a pattern of 
decision-making is needed in order to prove a violation of Article X:3(a). 
 As noted above, Korea believes that what matte rs in the examination of Article X:3(a) of 
GATT 1994 is whether the overall  administration of customs laws and regulations shows the across-
the-board uniformity rather than case-by-case approach .  In that context, Korea believes that the 
pattern of decision-making process would be more probative than an individual decision-making 
process.  
118. What is meant by the words "pertaining to" in Article X:1 of the GATT 1994?  Would 
rules governing the operational procedures of bodies that oversee or are somehow involved in 
the administration of customs laws – such as, for example, the EC Customs Code Committee – 
qualify as laws, regulations, judicial decisions a nd administrative rulings of general application 
"pertaining to" the classification or the valuation of products for customs purposes? 
 No response provided. 
119. Do penalty laws/provisions applicable to vi olations of customs laws fall within the scope 
of the measures referred to in Article X:1 of the GATT 1994?  If so, please explain making 
reference to the relevant terms of Article X:1. 
No response provided. 
120. What is the significance of Article XXIV:12 of the GATT 1994 for the interpretation of 
Article X:3(a) of the GATT 1994? 
 No response provided.  
121. Making reference to the specific terms of Article X:3(b) of the GATT 1994, please 
explain whether or not the obligation to  ensure prompt review and correction of 
administrative action is confined to first instance reviews by administering authorities . 
 Korea believes that the promptness requi rement under Article X:3(b) of GATT 1994 is 
applicable to all administrative and legal review procedures of a WTO Member until there is finality  
to the dispute or challenge. 
122. What does "correction" mean in Article X:3(b) of the GATT 1994? 
 No response provided. 
123. What is the legal relationship between Article X:3(a) of the GATT 1994 and 
Article X:3(b) of the GATT 1994, if any? 
  No response provided.  WT/DS315/R 
 Page A-107 
 
 
 ANNEX A-9 
 
RESPONSES OF THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, 
KINMEN AND MATSU TO QUESTIONS POSED BY THE PANEL  
AFTER THE FIRST SUBSTANTIVE MEETING 
 
(23 September 2005) 
 
 QUESTIONS FOR ALL THIRD PARTIES
 
103. What is meant by the term "uniform" in Article X:3(a) of the GATT 1994?  
 
 We agree with the ordinary meaning of the term "uniform" as stated by the United States.1 We 
also agree wit the GATT Panel Report in EEC – Restrictions on Imports of Dessert Apples, Complaint 
by Chile  that uniformity is required "throughout the terr itories" of the relevant Member "over time". 
The term "uniform" also refers to the uniform ity in administration as well as in the result of 
administration.   
104. How do the third parties ensure uniformity in administration of their respective 
customs laws at different points of entry?  In this regard, please provide details regarding all 
relevant aspects of customs administration, includi ng in particular those aspects that are not 
directly linked to the constitutional and institutional structure of customs administration.  
 We believe that the most impor tant requirement to ensure unifo rmity is to have a uniform set 
of laws and regulations for customs authorities to follow. The Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu has such single and unified  set of laws and rules in its territory as the 
basis for customs officials to carry out their du ties. There is also a cen tral government agency 
responsible for the oversight and monitor of cust oms administration. We believe the monitoring and 
overseeing activities are of importance to ensure uni formity. Toward that end, we conduct on-the-job 
training for our customs officials to ensure that all laws and regulations, whether new ones or ones 
already in existence, are administered in accord ance with Article X:1(a). In addition, we hold 
coordination meetings among officials from different points of entry, partly for the purpose of 
eliminating differences.  
 
105. What body(ies)/procedures are in place in the third parties to discharge their 
obligations under Article X:3(b) of the GATT 1994?  Please explain how recourse to this(ese) 
body(ies)/procedures works in practice, includi ng how long the review and correction process 
takes. 
Under Article 45 of the Customs Law of the Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu, if a party is not satisfied with th e decision of the customs authority regarding the 
classification of its products, the customs valuation decision, or the amount of duties or special duties to be paid, it is entitled, within 30 days, to  seek a review by the customs authority. The party 
can also provide guarantees or bonds to receive its  goods prior to the final decision on the review. 
Also, under Article 46 of the Customs Law, the cust oms authority is required to make a decision on 
the review within two months from the day after the receipt of the request for review. If the party is 
still unsatisfied with the review decision, it can  further make appeal to the Committee of 
Administrative Appeals of the superior agency. The superior agency shall make its decision on such 
administrative appeals within three months from th e appeal. Extension of the three-month period can 
                                                     
 
1 US First Submission, para. 35. WT/DS315/R 
Page A-108  
 
 be made once. If the party is not satisfied with th e result of the administrative appeal, it can further 
appeal to High Administrative Court and Supreme Administrative Court. 
106. The United States refers to divergent decisions taken by member State authorities 
throughout its First Written Submission.  For ex ample, the United States refers to divergence 
in classification decisions: generally (par agraph 21); with respect to network cards for 
personal computers (footnote 33); with respect to  drip irrigation product (footnote 33); and 
with respect to unisex articles or shirts (paragraph 76).  Further, the United States refers to divergence in customs valuation decisions (paragraphs 25 and 93).  Can such divergence in decisions be challenged under Article X:3(a) of the GATT 1994? 
Article X:3(a) of GATT 1994 requires uniform  administration of all laws, regulations, 
decisions and rulings of the kind described in paragr aph 1 of the same Article,  which includes "laws, 
regulations, judicial decisions and administrative ru lings of general applicati on, made effective by any 
contracting party, pertaining to th e classification or the valuation of  products for customs purposes, or 
to rates of duty, taxes or other charges, or to re quirements, restrictions or  prohibitions on imports or 
exports or on the transfer of payments therefor, or  affecting their sale, dist ribution, transportation, 
insurance, warehousing, inspecti on, exhibition, processing, mixing or other use." The divergent 
decisions referred to by the United States can be challenged under Article X:3(a) because they are administrative rulings affecting the classification of certain products. Such rulings have general 
applicable effect on the subsequent  importation of the same products.  
107. In paragraphs 220-221 of its First Wri tten Submission, the European Communities 
submits that, where sub-federal laws exist in a particular WTO Member, it is the 
administration of those laws to which Article X:3(a) of the GATT 1994 refers. 
(a) Does Article X:3(a) apply to penal laws? 
(b) If so, would the Panel be authorized to consider the administration of member 
States' penal laws in respect of the United States' claim under Article X:3(a)? 
As a matter of fact, penal law that mandates punishments for infraction of regulations and 
rulings pertaining to the administration of cust oms laws could also have great implication on 
international trade. Penal law can form part of the overall structure of admini stration of customs laws. 
We do not see why penal laws should be per se  excluded from the scope of laws covered by 
Article X:3(a).  
 This Panel has the authority to consider the administration of Me mber's customs laws, 
regulations, decisions and rulings, which includes penal laws that  mandate penalties for the violation of 
these laws, regulations, decisions and rulings.  
 
108. How should "prompt" be defined under Article X:3(b) of the GATT 1994? 
 
 The term "prompt" as defined under Article  X:3(b) means no unnecessary or unjustifiable 
delay or prolonging of the process or procedure to the extent that remedies pursuant to review and 
correction of administrative acti on would no longer be enough to repa ir any injury arising from the 
measure under review on  the relevant party. 
  WT/DS315/R 
 Page A-109 
 
 
 QUESTIONS FOR THE PARTIES AND THIRD PARTIES  
 
109. How should the term "administer" be int erpreted for the purposes of Article X:3(a) of 
the GATT 1994? 
  Administering laws and regulations means a pplying, carrying out, or enforcing laws and 
regulations, or making decisions on classification, valuation or other matters included in Article X:3(a) based or not based on the applicable laws or re gulations of the kind stat ed in Article X:3(a). 
 
110. Does the uniformity obligation in Articl e X:3(a) of the GATT 1994 mean that there 
should be no or only limited possibility for the exercise of discretion in the administration of 
customs laws? 
 
 In our view, it is possible for customs au thorities to have some discretion in the 
administration of customs laws, within parameters set out by the customs laws that do not violate 
Article X:3(a). The GATT Panel in EEC – Dessert Apples  is consistent with our position in that it 
recognizes that "minor administration variations", which may be the result of such discretion, can 
exist without violating Article X:3(a). 
 
111. Is the time taken to address a specific i ssue (including instances of divergences in 
administration) a consideration to be taken in to account for the purposes of the uniformity 
obligation in Article X:3(a) of the GATT 1994?  If so, please explain why, making reference to the specific terms of Article X:3(a). 
  The requirements under Article X:3(a) include th e administration of laws and regulations in 
a uniform, impartial and reasonable manner. Certai nly the time taken to address a specific issue 
should be a consideration to be taken into account for the purpose of the "uniformity" obligation and 
the obligation under "reasonableness". If a prolonge d time has been consumed to address a specific 
issue, the relevant Member might not have observe d the requirement of administering the laws and 
regulations in a reasonable manner. Also if different  lengths of time have been in place in dealing 
with similar kind of matters, it could be that the Member has not administered the laws and 
regulations in a uniform manner.  112. With respect to the WTO objective of securi ty and predictability in the international 
trading environment (which was recently referred to by the Appellate Body in the context of 
tariff commitments at paragraph 243 of its report in EC – Chicken Cuts WT/DS269/AB/R and 
WT/DS286/R), please explain whether, why and how it is relevant for the interpretation of Article X:3(a) of the GATT 1994. 
 
 We consider the WTO objective of security a nd predictability in the international trading 
environment expressed by the Appellate Body to be very relevant to the interpretation of 
Article X:3(a) of GATT 1994. Article  X:3(a) requires Members to admi nister laws and regulations in 
a uniform, impartial and reasonable manner. This requirement is the practical manifestation and 
application of the fundamental principle of secur ity and predictability in the international trading 
environment. Thus, when interpretation of this par ticular provision is made, the objective of security 
and predictability should always be  considered as important elements. 
 
113. Are the expectations of traders relevant to an interpretation and application of 
Articles X:3(a) and X:3(b) of the GATT 1994?  If so, please explain why and how, making 
reference to the specific language of those Articles. 
 
 Specific expectations of traders are not di rectly relevant in the interpretation of 
Article X:3(a) and (b) in general. However, in applying the standards of reasonableness and WT/DS315/R 
Page A-110  
 
 impartiality in Articles X:3(a) and X:3(b), expectati ons of traders in that particular situation may 
become an important consideration.  114. Does the obligation contained in Arti cle X:3(a) of the GATT 1994 require overall 
uniformity in administration or does it require un iformity in administration in each and every 
case?  Does the answer depend upon the nature of  the challenge under Article X:3(a)?  If so, 
please explain.  If overall uniformity is accep table under Article X:3(a), what would be the 
practical/numerical threshold and/or benchmark for demonstrating that Article X:3(a) has 
been violated? 
 
 We are of the view that the obligation c ontained in Article X:3(a) of GATT 1994 requires 
uniformity in administration in each and every case over time and across the territory of the Member 
in question where the same general conditions exist.  This view is consistent with the ordinary 
meaning of the term "uniform". In the real worl d, divergences do occur in the application. These 
divergences should be treated as  violations.  If these violations are not properly addressed 
domestically, they can be subject to challenge under the WTO.  115. Please comment on the submission made by Japan in paragraph 8 of its third party submission to the effect that, in assessing the United States' claim under Article X:3(a) of the GATT 1994, it is necessary for the Panel to anal yze whether the alleged divergences exist, as 
claimed by the United States, and if so, wheth er such divergences exist to a degree that would 
be considered to be inconsistent with Article X:3( a) in light of the particular customs system as 
a whole. 
 
 The United States have provided in this case evidence of the divergen ces that exist in the 
administration of EC's customs laws, regulations, d ecisions and rulings, and our understanding is that 
the EC disputes the existence of such divergences rather than the degree of divergences. We do not 
see the textual basis upon which such a two-step analysis is required. The requirements under 
Article X:3(a) are that the administration must be  made uniformly, impartially and reasonably. Any 
departure from such requirements is violation of this  particular provision. It is our view that the 
"minor administrative variations" indicated as acceptable in EEC – Dessert Apples refers to the type 
of administration upon which variations occu r rather than the degree of divergence. 
 
116. In paragraph 2 of Japan's Oral Statem ent at the third party session of the first 
substantive meeting, Japan relies upon the "m inimum standards" of transparency and 
procedural fairness referred to by the Appellate Body in US – Shrimp  to argue that "[a]n 
administration of regulations lacking 'uniformit y' [for the purposes of Article X:3(a) of the 
GATT 1994] would in general terms be unjust, biased, inequitable, partial and opaque – in other words, unfair and non transparent".  Following this line of reasoning, would the 
requirements of transparency and procedural fairness apply to: (i) the processes or the 
treatment of traders in the context of the ap plication of customs laws; and/or (ii) the 
substantive customs decisions to which traders are subject? 
 
 Our view is that the transparency and proce dural fairness requirements should apply to both 
the treatment of traders in the context of the app lication of customs law and the substantive customs 
decisions, because both of these are w ithin the concept of administrati on of laws and regulations and 
because such administration must strictly follow Article X:3(a) of GATT 1994.  
117. In paragraph 7.268 of its report, the Panel in US – Hot-Rolled Steel  (WT/DS184/R) 
stated that "we note that Japan has not even  alleged, much less established, a pattern of 
decision-making with respect to the specific matters it is raising which would suggest a lack of 
uniform, impartial and reasonable administra tion of the US anti-dumping law [under  WT/DS315/R 
 Page A-111 
 
 
 Article X:3(a) of the GATT 1994]".  Please comment on the Panel's finding that a pattern of 
decision-making is needed in order to prove a violation of Article X:3(a). 
 
 We do not agree with the view expressed in the Panel report in US – Hot-Rolled Steel . There 
is no requirement for the existence of a "pattern  of decision-making with respect to the specific 
matters it is raising" in order to find an Article X:3( a) violation. In addition, we are not certain what 
the threshold is for establishing a "pattern of d ecision-making" Such a requirement would amount to 
granting every Member the privilege to violate its obligations under Article X:3(a) until a "pattern of 
decision-making" can be found.  118. What is meant by the words "pertaining to" in Article X:1 of the GATT 1994?  Would rules governing the operational procedures of bodies that oversee or are somehow involved in the administration of customs laws – such as, for example, the EC Customs Code Committee – 
qualify as laws, regulations, judicial decisions a nd administrative rulings of general application 
"pertaining to" the classification or the valuation of products for customs purposes? 
 
 According to Oxford English Dictionary, the words "pertaining to" mean to "be appropriate, 
related, and applicable". This is quite broad. The rules governing the operational procedures of 
bodies that oversee the administration of customs laws  is undeniably related to the laws, regulations, 
judicial decisions and administration of the customs matters listed in Article X:1. We therefore have 
to consider that such rules to be within the scope of Article X:1. Unless we adopt such an 
interpretation, a loophole could exist for Member s to deviate from the requirements imposed by 
Article X:3(a).  
119. Do penalty laws/provisions applicable to vi olations of customs laws fall within the scope 
of the measures referred to in Article X:1 of the GATT 1994?  If so, please explain making 
reference to the relevant terms of Article X:1.  
 Article X:1 includes laws and regulations "perta ining to the classification or the valuation of 
products for customs purposes, or to rates of duty,  taxes or other charges,  or to requirements, 
restrictions or prohibitions on imports  or exports or on the transfer of payments therefor, or affecting 
their sale, distribution, transpor tation, insurance, warehousing, in spection, exhibition, processing, 
mixing or other use." Thus the issue, as correctly poi nted out by the Panel in the previous question, is 
whether a law or a regulation pertai ns to the matters listed in the provision. There is no distinction 
between penal law and non-penal law for the purpose of the application of this provision. Thus penal 
laws and provisions pertaining to customs matters as provided in Ar ticle X:1 should fall within the 
scope of this provision. 
 
120. What is the significance of Article XXIV:12 of the GATT 1994 for the interpretation of 
Article X:3(a) of the GATT 1994? 
 
 Article XXIV:12 requires every Member, regardl ess of its structure of government (not just 
governments with a federal character), to take reas onable measures to ensure that all levels of its 
government, including regional and local governments,  observe the rules of GATT. This provision is 
written in the form of an active obligation rather th an an exception, and cannot be used, in any event, 
as a justification for a central government to ex cuse itself from fulfilling its own WTO obligations, 
regardless of the structure or organization of the Member's government. If that is the case, all Members would be able to escape from its WTO ob ligations by delegating the administration of 
customs matters to regional and local governments. We, therefore, do not believe that 
Article XXIV:12 has any relevance in the inte rpretation of Article X:3(a) in this case. 
 WT/DS315/R 
Page A-112  
 
 121. Making reference to the specific terms of Article X:3(b) of the GATT 1994, please 
explain whether or not the obligation to  ensure prompt review and correction of 
administrative action is confined to first instance reviews by administering authorities. 
 
 Article X: 3(b) states that "Each contracti ng party shall maintain, or institute as soon as 
practicable, judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia , of 
the prompt review and correction of administrativ e action relating to customs matters." We cannot 
find any basis to support that the prompt review and correction of administrative action should be confined to first instance only. In addition, the requirements are "prompt review" and "prompt 
correction". It is possible that the result of the firs t instance is incorrect. The party might need to go 
to second or even third instance for review. If there is no prompt second and third instance, it would 
not be possible to have "prompt correction" as required by this provision.  
122. What does "correction" mean in Article X:3(b) of the GATT 1994? 
 
 "Correction" in Article X:3(b), in our view, means modification to remedy and to redress the 
situation.  
123. What is the legal relationship between Article X:3(a) of the GATT 1994 and 
Article X:3(b) of the GATT 1994, if any? 
 
 These two sub-paragraphs require  distinctly independent obliga tions. Article X:3(a) is about 
the administration of laws and regulations, while Arti cle X:3(b) is about the review and correction of 
administrative actions. If the review and correctiv e mechanism is administ ered in a non-uniform, 
partial and unreasonable way, Article X:3(a) can  also apply, because the review and corrective 
mechanism is also laws or regulations pertaining to customs matters. Additionally, if a customs law 
is not administered uniformly and there is no judicial, arbitral or administrative tribunals or procedures to review and correct the decisions, both Article X:3(a) and Article X:3(b) may be violated. 
 
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