WT/DS345/R 
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  ANNEX B 
 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN SUBMISSION  
OF THE PARTIES 
 
 
CONTENTS PAGE 
Annex B - 1 Executive Summary of the Second Written Submission of the  
United States B-2 
Annex B - 2 Executive Summary of the Second Written Submission of India B-11 
 WT/DS345/R 
Page B-2 
 
 
  ANNEX B - 1 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF  
THE UNITED STATES 
 
(9 July 2007) 
 
1. The Additional Bond Amount Constitutes "R easonable Security" Within the Meaning 
of the Ad Note to GATT 1994 Articles VI:2 and VI:3. 
1. A central question before this Panel is wh ether any provisions of the Agreement on 
Implementation of Article VI of the General Agre ement on Tariffs and Trade 1994 ("AD Agreement"), 
SCM Agreement, or the GATT 1994 govern a secu rity requirement for the payment of an 
antidumping or countervailing duty assessed after an order has been imposed, such as that 
contemplated by the enhanced bond directive.  As the United States has demonstrated in its previous 
submissions, the Ad Note to Article VI is the sole provision that specifically limits security 
requirements of this type.  
2. As the United States has explained in previous submissions, the "final determination of the 
facts" in the Ad Note refers to the determ ination of the facts with respect to the " payment  of 
ant-dumping or countervailing duty."  In the context of a retrospective duty assessment system, the 
"determination of the final liability for payment of anti-dumping duties," referenced in Article 9.3.1, 
must be made in order for the facts with respect to payment to be determined.  Thus, the "final 
determination of the facts" in the Ad Note follows an assessment review as described in Article 9.3.1.  
This interpretation is consistent  with the immediate context in which the phrase appears.  The Ad 
Note refers to "security for payment" and "other cases in customs administration" – in other cases in 
customs administration, security for payment of duties is required upon entry when the actual amount 
of liability is not known, and this security is requi red until the duties are finally assessed and paid.  It 
is also consistent with GATT 1994 Article VI:2 and 3, the provisions to which the Ad Note is 
appended, and the AD Agreement.  GATT 1994 Arti cle VI:2 and 3 address "levy[ing]" antidumping 
and countervailing duties.  In the AD Agreement and SC M Agreement, the term "levy" refers to "the 
definitive or final legal assessment or collection of a duty or tax."  The "final determination" 
referenced in the Ad Note thus pertains to secur ity pending final legal assessment of duties – an event 
that in a retrospective duty assessment system does not normally occur until after the completion of 
the assessment review. 
3. The context provided by the AD Agreement also s upports this interpretation of the Ad Note.  
AD Agreement Article 9.2 allows Members to colle ct antidumping duties "in the appropriate amounts 
in each case."  Article 9.3 states that "[t]he amount of the antidumping duty shall not exceed the 
margin of dumping as established under Article 2."  The "margin of dumping" established following 
the assessment review de scribed in Article 9.3.1 is a margin of dumping "as established under 
Article 2" – meaning, a margin of dumping calcula ted in accordance with the general requirements of 
Article 2.  India is thus incorrect in asserting that this means a "margin of dumping" from the investigation proceeding.  The cash deposit and bond secure payment of this amount of duty and 
ensure that the United States is able to collect du ties in that amount, in accordance with Article 9.2.  
Article 9.3.1 makes clear that "final" liability for payment of antidumping duties occurs at the end of 
an assessment period – the terminology used coincides with the reference to the "final" determination 
of the facts with respect to "payment" in the Ad Note, further supporting the view that the Ad Note 
addresses security pending completion of assessment. 
4. Finally, as explained in the US Responses to Pane l Questions, this interp retation is consistent 
with the manner in which the United States administ ered its antidumping law at the time the Ad Note 
was negotiated.  The Antidumping Act, 1921, est ablished a retrospective duty assessment system,  WT/DS345/R 
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  whereby assessment or appraisement of antidumping duties was withheld pending the determination 
of whether and to what extent dumping had o ccurred on individual transactions subject to an 
antidumping "finding".  The 1921 Act, also include d provisions for security pending final assessment, 
which prior to enactment of the Tr ade Agreements Act of 1979 was us ually required in the form of "a 
bond equal to the estimated value of the merchandise."  
5. India offers a reading of both the Ad Note a nd the AD and SCM Agreements that is at odds 
with their plain language and irreconcilable with the context in which the relevant language appears.  
First, with respect to the Ad Note, India ar gues that dumping cannot be "suspected" after an 
antidumping duty order is imposed following the comple tion of the investigation, and thus no case of 
suspected dumping can exist at that time.  This interpretation does not, however, conform to the 
ordinary meaning of the term "suspected" or the cont ext in which the term app ears.  In the Ad Note, 
"suspected" dumping refers to dumping that is "ima gined to be possible or likely."  The immediate 
context provides that security in such a case ma y be required for "payment" "pending final 
determination of the facts."  In a retrospective system of duty assessment, whether and in what amount duties are owed on a given entry is no t known until completion of assessment, and thus 
dumping – in the context of payment – is "suspected" during the intervening time.  Dumping (if any) 
with respect to a given set of entries  is not "known" until assessment of those entries is completed. 
6. India attempts to rely on the phrase "existence of dumping," which is nowhere used in the Ad 
Note, to support its assertion that the Ad Note does not govern security after issuance of an 
antidumping duty order in an investigation.  However, as the United States has explained, while the "existence of dumping" is confirmed at the conclusion  of the investigation, whether a given entry has 
been dumped, and thus whether duties are owed, is  not determined until completion of the assessment 
review.  The "final determination of the facts" is u sed in the Ad Note in c onnection with the "payment 
of anti-dumping or countervailing duty," which in a retrospective system is not established at the 
conclusion of the investigation. 
7. To read the Ad Note and the AD Agreement as India  suggests would lead to an absurd result:  
it would mean that "security for payment of antidumping and countervailing duty" must be released 
after completion of an investigation (the moment when it has been established that it is likely that 
some duties will be owed) – and before the amount of duties owed is finally established and those 
duties have in fact been paid.  The United Stat es is not aware of any customs authority that 
administers security requirements in this manner. 
8. Furthermore, India  offers an interpretation of the Ad Note in relation to the AD Agreement 
and SCM Agreement that is inconsis tent with the terms of those agreements and fails to give the Ad 
Note any meaning or legal effect, contrary to  the relationship between the GATT 1994 and other 
WTO agreements contemplated by the Marrak esh Agreement Establishing the World Trade 
Organization ("WTO Agreement").  As a threshold matter, the GATT 1994, including the Ad Note to 
Article VI, is an "integral part" of the WTO Agreemen t.  As past panels and the Appellate Body have 
noted, Article VI is "part of the same treaty" as the AD Agreement, and "should not be interpreted in a 
way that would deprive it or the Antidumping Agreement of meaning."  A panel "should give 
meaning and legal effect to all the relevant provisions," including the Ad Note to Article VI.  Instead 
of "reading Article VI in conjunction with the Antidumping Agreement," as the Appellate Body in 
US – 1916 Act suggested, India, through a misreading of Articles 7 and 9 of the AD Agreement, 
attempts to read Article VI and the Ad Note out of the covered agreements entirely, depriving both 
provisions of any meaning.  
9.
 India's analysis of AD Agreement Article 9 in connection with the US cash deposit 
requirement illustrates the b asic flaws in its approach.  First, to argue that Article 9, and not the Ad 
Note, is the relevant provision applicable to cash deposit requirements, it asserts that the term "cash 
deposit" is the same as the term " duty" – a position that cannot be reconciled with the text of the AD WT/DS345/R 
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  Agreement or the Ad Note, or the ordinary meani ng of either of the terms in question.  A "cash 
deposit" is security for a duty owed, but is not itself a duty.  In both the GATT 1994 and the AD 
Agreement, the term "cash deposit" is used throughout  to refer to a form of "security," not a "duty".  
The Ad Note, for example, provides for "reasonabl e security (cash deposit or bond)" – it does not 
characterize cash deposits as "duties".  Article 7. 2 of the AD Agreement likewise distinguishes a 
"cash deposit" as a form of "security" from "duties" in stating that "provisional measures may take the 
form of a provisional duty or, preferably, a security – by cash deposit or bond ... ."  Insofar as it 
indicates a preference for requiring payment of cash deposits rather than duties, Article 7.2 suggests 
that there is in fact a  "substantive differen ce" between a cash deposit requirement and a duty. 
10. The sole support India offers for its reading of the GATT 1994 and the AD Agreement in this 
regard is a single reference by the Appellate Body in US – Zeroing (Japan) to cash deposits in its 
description of an administering authority's right to "collect duties, in the form of a cash deposit."  
India concedes that this statement was not made in  the context of any finding with respect to cash 
deposit requirements – and indeed, the Appellate Body  report contains no analysis of the question of 
whether cash deposits are in fact duties.  A single clause in one sentence in an Appellate Body report, 
in a different context and unsupported by any rele vant analysis, cannot justify a conclusion that 
plainly contradicts the text of the GATT 1994 and the AD Agreement. 
11. Moreover, India misinterprets the term "margin of dumping" in Article 9.3 to refer, alternately, 
to the margin of dumping established in the investig ation or to the margin established for a previous 
set of entries in a prior administrative review.  This reading of Article 9.3, however, is both illogical and inconsistent with the text of that provision a nd previous reports of the Appellate Body examining 
that text.  Inexplicably, India ignores the one margin  of dumping that is based on actual analysis of the 
particular entries in question and which is used  to establish the "final liability" for payment of 
antidumping duties, referenced in Article 9.3.1:  the margin of dumping est ablished in the assessment 
review.  It is this margin (which, contrary to what India asserts, is a margin "as established under 
Article 2") that is the "margin of dumping" refere nced in Article 9.3, and it is payment of duties 
resulting from this margin that the cash deposit and bond are intended to secure. 
12. Contrary to India's claim, the Appellate Body's findings in  US – Zeroing (EC) are fully 
consistent with this reading of AD Agreement Artic le 9.  The "margin of dumping established for an 
exporter or producer" referenced in that section of  the Appellate Body's report is the margin of 
dumping established in an assessment proceeding, not the margin of dumping established in an 
investigation.  Article 9.3 specifies the amount of "assessed" antidumping duties – an amount 
determined through the administrative review.  The ma rgin of dumping it describes is thus the margin 
of dumping established in that review.  Article 9.3 does not prescribe the specific methodology by which duties should be assessed, nor the amount of security that a Member may require pending final 
assessment. 
13. Finally, India attempts to rely on Article 7 of  the AD Agreement as a basis to read the Ad 
Note out of the GATT 1994 entirely, asserting that the Ad Note is confined to "provisional measures" 
and superseded by Article 7.  However, nothing in th e text of the Ad Note suggests that it is limited to 
"provisional measures" and nothing in the text of Article 7 supports the conclusion that it is intended 
to address security requirements after the imposition of  an order.  Neither Article 7 nor the concept of 
"provisional measures" existed at the time the Ad No te was negotiated.  Article 7 contains rules with 
respect to provisional measures – measures (including  security) taken prior to a final determination in 
an investigation.  Article 7 does not, however, address security requirements imposed after a final 
determination has been made, and there is no basi s to conclude that it places limitations on those 
requirements beyond the limitations established in the Ad Note. 
14. If India's arguments were accepted, Members would not be permitted to maintain security 
requirements pending final determination of liabilit y.  To preclude a Member with a retrospective  WT/DS345/R 
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  system from requiring the posting of security prior to  the determination of fi nal liability would create 
a disparity between retrospective and prospective syst ems.  The nature of prospective systems is that 
the duties billed at importation are treated as final.  Thus, no security need be required.  If an importer 
refuses to pay the antidumping duties owed, the Me mber maintaining a prospective system may deny 
entry to the merchandise in question.  Members with  prospective systems therefore are not required to 
bear the risk of unsecured liability in the way th at Members with retrospective systems would if 
India's interpretation were accepted.  Nothing in the GATT 1994 or AD Agreement suggests that one 
system is favored over another, and the Appellate Bo dy has confirmed that this is the case.  Members 
with retrospective systems should not be penalized fo r deferring determination of final liability to the 
end of the review period. 
15. The evidence demonstrates that the additiona l bond amount satisfies the requirements of the 
Ad Note:  it constitutes "reasonable security" for th e payment of antidumping or countervailing duty.  
The United States imposed the additional bond requirem ent after it identified a serious and growing 
problem:  when the assessment rate resulting from the administrative review exceeded the cash 
deposit rate at the time of entry, many importers were not paying the duties lawfully owed.  This 
liability was unsecured by cash deposit, bond, or other security.  As a result, the United States has 
been unable to collect over $600 million in antidumping duties lawfully owed to it.  The additional security reflects an assessment of the multiple factor s typically considered in establishing security 
requirements, including the amount of potential liability in the event of default and the likelihood of 
default.  For shrimp, the amount of potential add itional liability was significant, as was the risk of 
default.  In excess of $2.5 billion worth of sh rimp imports had entered the United States from 
countries subject to antidumping duty orders during cal endar year 2003.  This quantity of shrimp far 
exceeded that of imports subject to previous anti dumping duty orders that had resulted in significant 
unpaid duties.  Because antidumping duties are assessed on an ad valorem basis, the sheer quantity of 
shrimp imports alone increased the likelihood that , all other things being equal, the potential 
unsecured liability for shrimp would be  substantial.  No party to this  proceeding disputes the fact that 
rates do increase.  Even if the likelihood that ra tes for shrimp would increase was no greater than the 
historical norm, the fact that shrimp imports were so substantial in value supported CBP's decision to 
require greater security for shrimp, as it suggested si gnificantly greater unsecured liability in the event 
of an increase. 
16. As for the risk of default, CBP determined  that importers of agriculture/aquaculture 
merchandise subject to antidumping or countervailing duty  liability faced an elevated risk of default, 
due in part to low capitalization and high turnover  rates in the industry as a whole.  CBP provides 
importers subject to the enhanced bond directive w ith individualized risk assessments, if they so 
request.  In that event, the bond amount reflects an  individualized assessment of risk of default.  
Importers have requested and received individual bond amounts – often substan tially lower than those 
prescribed by the formula – through this process.  
2. The Additional Bond Directive Is Not Inconsistent with AD Agreement Article 18.1 or 
SCM Agreement Article 32.1. 
17. India has failed to demonstrate that the additi onal bond directive is "specific action against 
dumping" or a "subsidy" – it is neither "specific" to dumping or a subsidy nor "against" dumping or a 
subsidy.  As the United States explained in its s ubmissions, the directive is a reasonable means of 
ensuring payment of duties ultimately assessed.  Ha ving identified a serious collection problem, CBP 
took action to secure unsecured liability, as it would in  any case in which such liability exists that 
presents a risk to the revenue, whether or not th e "constituent elements of dumping or a subsidy are 
present."  The design of the directive, including the criteria for applying it to  particular orders and 
establishing a bond amount based on individual risk, all pertain to securing against risk of uncollected 
duties, not the "constituent elements of dumping".  Thus, while the directive may be "related to" WT/DS345/R 
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  dumping – as the Appellate Body in US – Offset Act (Byrd Amendment)  described various measures 
not inconsistent with Article 18.1 – it is not "specific" to it. 
18. With regard to India's claim that the directiv e is action "against" dumping, neither previous 
Appellate Body reports examining that term nor the evidence in this proceeding supports this 
conclusion.  The bond is security for the final asses sed duty, which itself may be an action against 
dumping, but the security as such simply allows  the United States to obtain payment of duties 
lawfully owed to it.  As the Appellate Body noted in US – Offset Act (Byrd Amendment ) , "a measure 
cannot be against dumping or a subsidy simply becau se it facilitates or induces the exercise of rights 
that are WTO-consistent."  The GATT 1994 and th e AD Agreement do not proh ibit the United States 
from obtaining payment for the antidumping duties in question, and the bond requirement facilitates 
its ability to do so. 
19. As for India's claim that the directive was "against" dumping because it adversely affected 
imports from countries subject to the antidumping orde r, the evidence demonstrates otherwise.  Aside 
from seasonal fluctuations, imports from most count ries subject to the AD order appear to have 
remained steady or increased.  India asserts that "t he impact of the bond directive was magnified in 
the case of" Brazil, China, and India "because they suffered higher antidumping duty rates than the 
other three countries subject to antidumping duties."  Even if the evidence supported this claim – and a review of the data for these three countries shows no consistent trend – India fails to explain how the 
effects of the bond directive can, as the US Go vernment Accountability Office ("GAO") put it, 
"readily be isolated from other changes occurring at the same time, such as the imposition of AD 
duties."  In theory, higher duties th emselves may also result in a greater impact on trade, yet India 
fails to show how the directive itself adversely affected imports.   
20. With regard to costs to importers, the mere fact  that additional security is required and results 
in additional costs does not support the conclusion th at the security requirement itself is designed to 
"counteract" dumping.  All security requirements,  including cash deposits and other reasonable 
security for the payment of antidumping and counterva iling duties, may result in some added cost.  If 
accepted, India's  argument would mean that an y measure that increases the cost of importing for 
importers subject to antidumping and countervailing duties is an action "against" dumping.  This 
interpretation is not supported by the analysis of the Appellate Body in US – Offset Act .  Increasing 
the cost of importing alone does not necessarily create, as the Appellate Body put it in US – Offset Act , 
an "incentive not to engage in the practice of expor ting dumped or subsidized products or to terminate 
such practices" – indeed, import data for sh rimp suggest that no such incentive exists. 
21. Even if considered "specific" action "against " dumping or subsidy, the security requirements 
in question are permitted by the Ad Note and t hus are "in accordance with the provisions of 
GATT 1994, as interpreted by the Anti-dumping Agreem ent."  Again without any textual support or 
analysis, India refers to a single sente nce in the Appellate Body report in US – 1916 Act to assert that 
security requirements contemplated by the Ad No te are "not permitted" responses to dumping or 
subsidy. The statement quoted by India does not, however, support the proposition for which it is 
cited.  The Appellate Body report in question cont ains no analysis  of th e Ad Note, or security 
requirements generally, and to the extent it discu sses Article VI and the AD Agreement, it is fully 
consistent with the US reading of Article 18.1 an d SCM Agreement Article 32.1.  For example, the 
Appellate Body stated that "‘the provisions of GATT 1994' referred to in Article 18.1 are in fact the 
provisions of Article VI of the GATT 1994 concer ning dumping," and then proceeded to analyze 
whether the measure in question "falls within the scope of application of Article VI of the GATT 
1994."  The Ad Note to Article VI is a provision  of Article VI "concerning dumping," and the security 
requirements at issue fall within its scope.  As explained above, the AD Ag reement does not contain 
additional limits on security requirements such as t hose contemplated by the Ad Note.  Thus, if a 
security requirement is consistent with the Ad No te, it is "in accordance with the provisions of GATT 
1994, as interpreted by" the AD Agreement.  WT/DS345/R 
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  22. To suggest, as India does, that Article 18.1 and SCM Article 32.1 mean that measures 
permitted by Article VI are no longe r permitted unless specifically pr ovided for in the AD Agreement 
or SCM Agreement, is at odds with the text of  both provisions and, as noted previously, the 
relationship between the covered ag reements set forth in the WTO Agreement.  Were India's reading 
correct, there would be no need for Article 18.1 or SCM Article 32.1 to refer to the GATT 1994 at all 
– yet both provisions do refer to GATT 1994.  India's assertion that, ev en if the security requirement 
is "reasonable security" within the meaning of the Ad Note, it "would remain inconsistent with 
Article 18.1," in effect reads the qualifying phrase out of  the text entirely.  This reading of the text is 
not consistent with its terms, and contradicts the principle contained in the WTO Agreement that each 
of the texts, including GATT 1994, shall be integral to it.  Moreover, India's interpretation incorrectly 
presumes that, unless a measure is specifically permitted by the AD Agreement, it is prohibited.  The AD Agreement, however, contains rules regarding certain aspects of antidumping and countervailing 
duty measures.  As the Appellate Body has observed,  the covered agreements are not exhaustive, and 
if an action is not expressly pr ohibited, taking that action does not breach the WTO agreement in 
question.  To read Article 18.1 and SCM Agreement Article 32.1 as broadly as India suggests would 
impermissibly extend the disciplines of the AD Agreement and SCM Agreement beyond their terms. 
3. The Additional Bond Directive Does not B reach GATT Article I, GATT Article II, 
GATT Article XI, or GATT Article XIII. 
23. GATT Article I
. Contrary to India's assertions, the additional bond directive does not 
improperly discriminate between products origina ting in India and products originating in other 
countries.  The directive has been applied to all im porters of shrimp subject to the AD orders, and the 
US action of increasing bond amounts merely addressed the particular risks associated with these 
imports. 
24. GATT Article II .  As explained above, the additional bond directive does not constitute a 
"duty" (antidumping or otherwise) or an "other charge."  CBP does not charge for the bonds, nor does 
it even require that security take the form of the additional bond.  The implication of India's argument 
that such bonds are "other charges" is that Members may not require bonds as a means to secure 
importers' obligations unless the bonds are specifica lly included in a Member's Schedule. Yet many 
Members do maintain such requirements, and several  provisions of the WTO agreements contemplate 
the use of bonds, suggesting that they are intended to  be a device generally available to Members to 
secure their obligations. Finally, India's assertion that  the bond results in a "contingent tariff liability" 
is incorrect.  The bond is security for liability resulting from the antidumping duty order; it does not 
itself result in tariff liability, "contingent" or otherwise. 
25. GATT Article XI .  As was the case with th e bond measure at issue in Dominican Republic  – 
Cigarettes , the bond directive does not prevent importers from importing shrimp into the United 
States.  Indeed, import data demonstrates that signi ficant quantities of shrimp subject to the AD orders 
continue to be imported into the United States, and there is no evidence that the bond directive has had any appreciable impact on imports.  India's argument that a "limiting effect" of the type 
referenced in India – Autos exists simply when a measure may result in costs to importers proves too 
much:  it would render any bond requirement inconsis tent with Article XI.  The directive does not 
mandate an increased bond amount – as noted prev iously, importers can obtain individual bond 
determinations and, depe nding on their ability to pay and history of compliance with US customs laws 
and regulations, may not be required to obtain a higher  bond.  Virtually all impor ters that have made a 
request have received individualized bond amounts pursu ant to this process that are lower than those 
contemplated by the formula.  Importers have a rang e of mechanisms available to them to import into 
the United States without being subject to the add itional bond directive, including single entry bonds, 
cash deposits or security other th an a continuous entry bond.  WT/DS345/R 
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  26. GATT Article XIII .  Contrary to India's assertion, the title of Article XIII is "Non-
discriminatory Administration of Quantitative Restri ctions." Thus by its terms Article XIII governs 
"quantitative restrictions."  Article XIII has in the past been applied to analyze tariff-rate quotas, 
safeguards, and other measures that contain quantitative restrictions on trade; measures that do not 
restrict trade in this manner are not covered by it.   The enhanced bond directive is not a "quantitative 
restriction."  Furthermore, India's interpretation of "r estriction" in the context of Article XIII fails for 
the same reason as it does with respect to Article  XI:  it suggests that any bond requirement is a 
"restriction" and thus implicated under Articles XI and XIII.  
4. The Additional Bond Directive Is Not Inconsistent with GATT 1994 Article X:3(a).        
27. With regard to GATT 1994 Article X, India h as failed to establish a breach.  Article X does 
not govern the substance of a measure, yet India cont inues to cite aspects of the measure's substance – 
including the formula used to establish bond amounts absent an individual risk analysis – in support 
of its claim that Article X was breached.  With respect to the application of the directive, CBP did not 
apply the directive in a nonuniform, partial, or unr easonable fashion.  It required the bond of shrimp 
importers because, using the criteria in the directiv e, CBP determined that the risk of substantial 
unsecured liability was high in the case of shrimp.  Th e fact that CBP opted to apply the directive to 
importers of covered merchandise subject to new orders, rather than preexisting orders, does not 
render its application "nonuniform, partial or unrea sonable," as India claims.  CBP considered that 
applying the new directive to a new order would fa cilitate its ability to monitor and administer the 
new bond requirement at its inception.  Article X does not prohibit a Member from implementing a 
new measure in this fashion. 
28. Even under India's theory that Article X a pplies, the evidence demonstrates that CBP 
administers the bond directive in a "uniform, im partial and reasonable" manner.  The directive 
contains various criteria for identifying importers of merchandise with elevated default risk, and CBP 
applies these criteria uniformly.  CBP faced in excess of  $2 billion in imports of shrimp newly subject 
to an antidumping order.  It had experienced $225 m illion in defaults on impor ters in industries that, 
like shrimp, were characterized by low capitalization rates and relatively low barriers to entry and exit, 
had very little history of paying customs duties pr ior to imposition of the order, and were highly 
leveraged.  All of these factors suggested that, as with other agriculture/aquaculture merchandise, 
there was a significant risk of default associated with  importers of shrimp.  Finally, contrary to India's 
suggestion, the October 2006 Notice makes the procedures for requesting an individual bond amount clear, and does not impose significant costs on importers to do so.  The procedures for requesting an 
individual bond amount are set forth in the Notice, which itself was published in the Federal Register .  
5. India's "As Such" Claims  
29. As the United States has demonstrated, India's cl aims with respect to certain customs laws 
and regulations are not within th e Panel's terms of reference, nor  are they consistent with any 
reasonable reading of the provisions of the agreements in question.  Contrary to India's assertion that 
"it is a Member's panel request (and not its request  for consultations) that governs a panel's terms of 
reference," it is well established that a Member ca nnot advance claims with respect to a measure 
included in its panel request, if it failed to include that measure in its request for consultations.  In 
determining whether the consultation requirement has been met, panels are limited to evaluating the 
request for consultations, not what may or may not  have taken place during consultations.  Where a 
Member has provided no indication in its consultati on request of the measures at issue, it is well 
established that the Member may not advance claims with respect to that measure, having failed to 
request consultations.  Nowhere in India's consultati on request is there a single reference to the statute 
and regulations it now seeks to challenge.  India is  not "focusing the scope of the matter," as it now 
asserts, but rather is impermissibly expanding the matter before the Panel to include measures that 
were not included in its request for consultations.  WT/DS345/R 
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  30. With respect to the substance of India's clai ms, in its answers to Panel questions, India 
contradicts itself when it describes how the laws and regulations purport to breach US obligations 
under WTO Agreement Article XVI, AD Agreement Ar ticle 18.4 and SCM Agreement Article 32.5.  
In one portion of its submission, India argues that the laws and regulations are "rules and norms of 
general and prospective application that require US Customs to undertake impermissible specific 
actions against dumping," but elsewhere it proceeds to argue that its claims are based on "the 
discretion conferred by the Amended Bond Directive a nd 19 U.S.C. 1623 and 19 C.F.R. 113.13 to 
take impermissible specific actions against dumping."  
31. To the extent that India's claims are based on a "requirement" to act in a WTO-inconsistent 
manner, these claims do not accord with the facts:  nothing in the laws and regulations identified by 
India requires the United States to act inconsisten tly with its obligations, and India has failed to 
provide any explanation of how the text of these prov isions operate to do so.  To the extent India's 
claims are based on the existence of "discretion" to  act in a WTO-inconsiste nt manner, the proposition 
India advances – that a Member breaches Article XVI:4 merely by maintaining a law that provides it with the discretion to act in a WTO-inconsistent manner – is contrary to the text of the WTO 
Agreement and the conclusion drawn in numerous pr ior panel and Appellate Body reports, and would 
substantially undermine the rights of Members.  
32. Furthermore, setting aside the fact that nothing  in the cited agreements suggests such an 
analysis is relevant to demonstr ating WTO-inconsistency, India fails to explain which aspects of the 
text of 19 U.S.C. 1623 and 19 C.F.R. 113.13 it refers to when it describes the purported "statutory 
purpose and standards" that allegedly "guide the discretion of US Customs" and render these 
provisions WTO-inconsistent.  Instead, it cites to  a CBP press release discussing the fact that CBP 
"must collect the duties of whatever nature owed" – India's suggestion that CBP's obligation to collect 
duties lawfully owed is somehow inconsistent with the WTO Agreement simply underlines the 
incongruity of its claim.  In addition to arguing th at the bond directive as applied to shrimp does not 
constitute "reasonable" security within the meaning of the Ad Note, India further asserts that the bond 
directive "as such" is inconsistent with the Ad Note  to Article VI and various other provisions of the 
AD and SCM Agreements and the GATT 1994.  However,  India offers absolutely no legal theory as 
to how the directive "as such" is inconsistent w ith the Ad Note, and the only evidence it offers in 
support of its claim relates to the single instance in which the directive has been applied – frozen 
warmwater shrimp subject to the antidumping or ders issued by USDOC in February 2005.  
33. With respect to India's "as such" claims under AD Agreement Articles 1 and 18.1 and SCM 
Agreement Articles 10 and 32.1, India's argument likew ise falls short.  India does not explain how the 
directive "as such" is an action against dumping or subsidization.  It claims that the directive "requires" importers of merchandise subject to an antidumping order to furnish an enhanced 
continuous bond, but again, the facts demonstrat e that the only instance in which such a bond has 
been required is with respect to frozen warmwater shrimp subject to the antidumping orders issued by 
USDOC in February 2005.   India has offered no argument regarding how the directive "as such" 
breaches SCM Agreement Articles 17, 19.2, 19.3, and 19.4 or AD Agreement Articles 7, 9.1, 9.2, and 
9.3.  Finally, India provides no legal theory, evidence, or even argumentation in support of its "as such" claims under GATT 1994 Articles I, II, and XI.  
6. The Additional Bond Directive Would Be Justified by GATT Article XX(d).  
34. The directive is "necessary to secure complianc e" with US antidumping and countervailing 
duty assessment laws, in particular 19 U.S.C. 167 3e(a)(1) governing the assessment of antidumping 
duties, and general customs laws and regulations requiring the payment of duties owed to the US 
Treasury.  As evidenced by, among other things, th e criteria the directive uses to determine bond 
amounts, the directive and its application to sh rimp secures compliance with this obligation and 
general customs laws and regula tions requiring payment of duties owed to the US Treasury.  WT/DS345/R 
Page B-10 
 
 
  35. As possible WTO-consistent alternatives, India cites US civil remedies or alternately 
proposes requiring "commercial importers across the boa rd to demonstrate higher levels of financial 
soundness before being permitted to undertake imports ."  Civil recovery proceedings are not a 
reasonable alternative to address the problem faced by CBP:  like cash deposits, CBP has used civil 
recovery to try to recover duties when an im porter defaults, yet notwithstanding these efforts, 
uncollected duties have continued to accrue.  Ci vil recovery produces no remedy if the importer 
cannot be reached or has no attachable assets by th e time the proceeding has concluded.  Thus, these 
measures do not constitute reasonably available alternatives that "would preserve for" the United 
States "its right to achieve ... the objective pursued."  Finally, India's suggestion – that CBP require all 
importers to demonstrate higher levels of fina ncial soundness – would imply that CBP can require 
greater security in all cases, but cannot target particular areas – such as collection of antidumping duties – with respect to which a specifi c problem has been found to exist.  
36. The additional bond directive meets the requirements of the chapeau to Article XX.  It has not 
been applied in a manner that would constitute a "d isguised restriction on international trade" or "a 
means of arbitrary or unjustifiable discrimina tion between countries where the same conditions 
prevail."  It has been administered uniformly, and does not discriminate.   WT/DS345/R 
 Page B-11 
 
 
  ANNEX B - 2 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF  
INDIA 
 
(9 July 2007) 
 
1. Scope of the Measure at Issue 
1. With respect to the United St ates' assertion that the statutory and regulatory provisions 
included in India's Panel Request were not subject to consultations, India notes that it is the panel 
request and not the request for consultations that defi nes the scope of the Panel's terms of reference.  
There is no requirement of a precise and exact iden tity between the measures subject to consultations 
and the measures identified in the Panel Request.  In any case, India requests that the Panel make 
findings and recommendations on India's "as such" claims with respect to the legal instruments that comprise the Amended Bond Directive if not the statutory and regulatory provisions. 
2. India acknowledges further that the scope of the measures with respect to which it has sought 
findings of inconsistency under Article XVI:4 of the WTO Agreement, Article 18.4 of the 
Anti-Dumping Agreement and Article 32.5 of the Subs idies Agreement is the same as the scope of the 
measures with respect to which it has sought findings under Article 18.1 of the Anti-Dumping 
Agreement and Article 32.1 of the Subsidies Agreem ent.  India also has limited the scope of the 
measure at issue to the statutory and regulatory provisions in 19 U.S.C. 1623 and 19 C.F.R. 113.13 
and to the Amended Bond Directive. 
3. Moreover, India agrees that its claims under Article XVI:4 of the WTO Agreement, 
Article 18.4 of the Anti-Dumping Agreement and Article 32.5 of the Subsidies Agreement are 
necessarily consequential to findings that 19 U.S. C. 1623, 19 C.F.R. 113.13 and the Amended Bond 
Directive are inconsistent as such with ot her provisions of the covered agreements.  
2. Specific Action against Dumping and Subsidization 
(a) 19 U.S.C. 1623 and 19 C.F.R. 113.13 are inconsistent "as such" with Article 18.1 of the 
Anti-Dumping Agreement and Article 32.1 of the Subsidies Agreement 
4. In US – Sunset Policy Bulletin , the Appellate Body clarified that, under Article 3.3 of the 
DSU, measures subject to dispute settlement include "acts setting forth rules or norms that are intended to have general or pros pective application" and that "… the phrase ‘laws, regulations and 
administrative procedures' [encompasses] the entire body of generally applicable rules, norms and 
standards adopted by Members in connection with  the conduct of antidumping proceedings.  If some 
of these measures could not, as such, be subject to dispute settlement under the Anti-Dumping 
Agreement, it would frustrate the obligation of confor mity set forth in Article 18.4."  In this case, it 
cannot be disputed that the measures at issue contain rules or norms of general application.  Moreover, 
the United States has not disputed either  their existence or their content. 
5. Further, the United States has objected to India' s "as such" challenge to 19 U.S.C. 1623 and 
19 C.F.R. 113.13 on the ground that these are mere authorizing provisions and that even India has 
similar, general statutory provisions authorizing the taking of bonds as security.  However, India's 
statutory and regulatory requirements for antidumpi ng and countervailing duties do not permit India's 
customs agencies to take bonds for amounts in excess of the dumping margin or the amount of the 
subsidy found to exist. WT/DS345/R 
Page B-12 
 
 
  6. 19 U.S.C. 1623 provides, in relevant part, that "… the Secretary of the Treasury may by 
regulation  … require … customs officers to require, such bonds or other security as he, or they, may 
deem necessary for the protection of the revenue … ". 19 C.F.R. 113.1 delegates this authority to the 
Commissioner of Customs.  The United States has consistently stated both in the Amended Bond 
Directive and in its first written submission that 19 U.S.C. 1623 and 19 C.F.R. 113.13 extend to the 
taking of bonds to ensure collection of duties fina lly assessed in an administrative review.  Further, 
the United States has justified the Amended Bond Directive under Article XX(d) of the GATT 1994 
as being necessary  to ensure compliance with the mandate  of 19 U.S.C. 1673e(a)(1) which requires 
the collection of the final liability for duties assessed in an administra tive review.  The effect of this 
interpretation of 19 U.S.C. 1623 and 19 C.F.R. 113.13 is exactly the same as amending 
19 U.S.C. 1673e(a)(1) to confer the discretion to take security for payment of antidumping or countervailing duties finally assessed under the retrospec tive assessment system.  Arguably, such an 
amendment provides for an impermissible specific action against dumping and subsidization. 
7. India has argued that the imposition of liability on importers in the form of a bond to secure 
against a potential increase in duties amounts to a speci fic action against dumping or  subsidization.  If 
the Panel accepts India's arguments, by the Unite d States' own admission, 19 U.S.C. 1623 and 
19 C.F.R. 113.13 provide for precisely this type of specific action against dumping and subsidization.  In fact, in Mexico – Rice , the United States argued that a statutory provision conferring discretion on 
the Government of Mexico to impose a fine on importers subject to anti dumping or countervailing 
duties provided for impermissible specific action against dumping and subsid ization.  The Panel 
rejected Mexico's plea that the provision was no t mandatory, finding that, when the statutory 
conditions are met, " … it is up to the Ministry responsible for the conduct of … investigations to 
impose such fines."  
8. Without prejudice to the foregoing, based on the report of the Panel in US – Section 301 , 
India notes that the provisions of 19 U.S.C. 1623,  19 C.F.R. 113.13 and of the Amended Bond 
Directive must also be assessed together as a single, multi-layered measure providing for 
impermissible specific action against dumping and s ubsidization.  19 U.S.C. 1623 clearly contains a 
rule or norm that in every case in which a bond or security is not specifically required by law, the Secretary of the Treasury may require customs offi cers to require bonds or security deemed necessary 
for protecting revenue.  Similarly, 19 C.F.R. 113.13  contains norms of general application that must 
be applied in determining the sufficiency of a bon d.  The Amended Bond Directive in turn sets out 
norms or rules of general application for d esignating merchandise subject to antidumping or 
countervailing duties in respect of which enha nced, continuous bonds must be taken. 
9. In any case, the United States has stated in its  first written submission that "[t]he [Amended 
Bond Directive] refers throughout to 19 C.F.R. 113.13, which … provides that the amount to be 
established must be ‘adequate to protect the re venue and insure compliance with the law and 
regulations.' …  Likewise, [U.S. Customs] establis hed the bond directive pursuant to its authority 
under 19 U.S.C. 1623, which permits it to require that an importer provide  "such bonds or other 
security as … may [be deemed] necessa ry for the protection of the revenue …".  Moreover, the Notice 
states that "[a] key [U.S. Customs'] mission is to co llect all import duties determined to be owed to the 
United States …" and that US Customs "must colle ct the duties owed of whatever nature."  The 
Notice expressly states also that "Congress has provided [U.S. Customs] authority to require security 
in order to ensure the payment of all duties …, including any revenue collection gaps between 
estimated duty deposits and final assessed duties …".  Th erefore, there is no force in the objection of 
the United States that the Amended Bond Directive is discretionary and has been applied only once to 
antidumping duties on shrimp.  Moreover, in US – Sunset Policy Bulletin , the Appellate Body found 
that the objective of protecting the security and pr edictability needed to co nduct future trade "… 
would be frustrated if instruments setting out rules or  norms inconsistent with a Member's obligations 
could not be brought before a Panel … irrespective of any particular instance of application  …".  WT/DS345/R 
 Page B-13 
 
 
  (b) The Amended Bond Directive is "speci fic" to dumping and subsidization 
10. In US – CDSOA , the Appellate Body further refined the test of "specificity" in US – 
Antidumping Act of 1916 by clarifying that the key consideration is "… the degree of correlation 
between the scope of application of the measure a nd the constituent elements of dumping or of a 
subsidy" and it is sufficient if "… the constituent el ements of dumping or of a subsidy are implicit in 
the measure".  The Appellate Body agreed with the Pane l also that the real issue is whether there is "a 
clear, direct and unavoidable connection" between th e determination of dumping  or subsidization and 
the measure at issue.  In fact, in US – CDSOA , the United States argued that the CDSOA was not 
specific because it does not "… impose any form of  liability on importers/foreign producers when 
dumping or subsidization is found …."  In this case, however, the United States does not dispute that 
the Amended Bond Directive imposes the liability of  obtaining an enhanced bond on importers of 
designated merchandise subject to antidumping or countervailing duties. 
11. India considers the following elements of the instruments that comprise the Amended Bond 
Directive important to establish that the constituen t elements of dumping a nd of subsidization are 
inherent in these instruments:  (a)  the Amendmen t, the Clarification and the Notice state that the 
purpose of the Enhanced Bond Requirement is to  ensure collection of additional AD/CVD duties 
determined to be due at liquidation; (b) each instru ment states expressly that it applies to merchandise 
subject to antidumping and countervailing duties, more specifically "agriculture and aquaculture 
merchandise subject to antidumping or countervailing duty cases", whether designated as Special 
Category merchandise or Covered Cases; (c) each instrument (and the Bond Formulas Document) 
states that it is the importers of merchandise subj ect to antidumping or countervailing duties who are 
required to comply with the Enha nced Bond Requirement; (d) each tailors the application of the 
Enhanced Bond Requirement to importers in different  situations that arise only in an antidumping or 
countervailing duty case, i.e., regular importers after a preliminary affirmative determination or the 
issuing of an Order and new importers subject to antidumping or countervailing duties (only the 
Notice does not mention the possibility of appl ying the Enhanced Bond Requirement after the 
preliminary determination); (e) each instrument  (except the Notice) provides for applying the 
Enhanced Bond Requirement following either a prel iminary affirmative dete rmination of dumping or 
subsidization and injury  or an Antidumping Or der or a Countervailing Duty Order; (f) the basic 
formula for determining the amount of the bond is based on the applicable rate of duty under the 
preliminary determination, the Antidumping Duty  Order or the Countervailing Duty Order; and 
(g) the Clarification states that in modifying bond requirements for importers who respond to a notice, 
"any other relevant factors" will include "… whet her the importer can show that it has switched to a 
new source of imports or a shift in the pattern of imports that [could lead] to a lower duty liability". 
12. As a measure intended to ensure availability of collections for distribution of offset payments 
under the CDSOA which the Appellate Body has found to be specific to dumping and subsidization, 
the Enhanced Bond Requirement is also necessaril y specific to dumping and subsidization.  The 
Administrative Record confirms that this was the objective of the Amendment.   That the Notice does 
not refer to the CDSOA or that the United States intends to continue applying the Enhanced Bond 
Requirement after the CDSOA is terminated cannot  undermine the inferences to be drawn from the 
stated purpose of the Amendment.  Moreover, the Appellate Body found in US – CDSOA  that it is 
permissible to rely on the stated purpose of a measure as a consideration confirming the conclusion 
that it is a specific action against dumping. 
13. Accordingly, there is a "strong correlation" a nd a "clear, direct and unavoidable" connection 
between the Amended Bond Directiv e and dumping and subsidization. WT/DS345/R 
Page B-14 
 
 
  (c) The Amended Bond Directive operates "a gainst" dumping and subsidization 
14. In US– CDSOA , the United States argued that the CDSOA could be characterized as 
operating "against" dumping or subs idization "… only if it applies directly to the dumped or 
subsidized imported good or an entity responsible for the dumped or subsidized imported goods, and 
if it burdens the dumped or subsid ized imported good, or an entity responsible for the dumped or 
subsidized imported good".  In this case also, the Amended Bond Directive singles out certain 
designated merchandise that is dumped or subsid ized and imposes the liability specifically on 
importers to provide enhan ced, continuous bonds.   
15. The burden imposed on importers under the Amended Bond Directive is significant.  Further, 
as stated in the Notice, the maximum time between  the initiation of an administrative review and 
liquidation is not limited to 545 days, because "…the administrative and judicial  process for 
determining the appropriate ra te of duty for AD/CVD merchandise may significantly delay … 
liquidation …".  Therefore, the bond initially gi ven immediately following the Antidumping or 
Countervailing Duty Order will be ex hausted and fresh bonds will be required prior to liquidation.  
This "stacking" of bonds further compounds the pr oblem faced by importers and magnifies the effect 
of the dumping margin or amount of subsidy.  The US Court of International Trade has catalogued the 
serious adverse effects suffered by importers of sh rimp subject to antidumping duties as a result of the 
Enhanced Bond Requirement. By making the dumping margin the basis of the amount of the 
enhanced, continuous bond that an importer must  furnish, US Customs also punishes and dissuades 
dumping because the higher the dumping margin, the higher the amount of the bond.  Because of the "stacking" of bonds, even Indian exporters committe d to the US market are forced to abandon it over 
time.  This is demonstrated by the steep decline in  India's exports by quantity and value and the total 
number of Indian exporte rs between 2004 and 2006. 
16. The United States has relied on the GAO Report, which concludes that imports declined 
because of imposition of antidumping duties and not because of the Enhanced Bond Requirement.  
However, the GAO Report did not take into account  data on imports from all countries subject to 
antidumping duties and included imports from Indonesia, which did not suffer antidumping duties.  
Further, the monthly data on imports of shrimp into the United States provided by India establishes that the higher the dumping margins, the more expor ts suffered. Imports from Brazil, China and India, 
with the highest margins, suffered the most, wh ile exports from Ecuador, Thailand and Vietnam did 
not. 
17. Further, US Customs dispensed with the E nhanced Bond Requirement where the importer 
agreed to shift its source of imports to countries not subject to antidumping duties.  That this has not 
ceased after the Notice is clear from a bond waiver le tter submitted by India as evidence to the Panel. 
18. In US – CDSOA , the Appellate Body found relevant the fact that the CDSOA effects a 
transfer of financial resources from producers/expo rters of dumped or subsidized goods to their 
domestic competitors.  India's evidence demonstr ates that one association of domestic shrimp 
producers in the United States, the SSA, entered in to agreements with exporters to withdraw its 
request for administrative review if the exporter paid  a percentage of the value of its total exports 
during the period of review to the SSA.  Exporters have ne ver made such payments in the past.  Brazil 
has placed before the Panel a document published on the website of the LSA, another association of 
domestic shrimp producers, establishing the basis on which exporters were forced to make payments 
to the SSA in the present case on account of the Enhanced Bond Requirement. 
19. 
Even if the amount of the bond is reduced  by US Customs based on individualized 
consideration of the risk posed by an importer af ter the Notice, the fact remains that any liability 
imposed on an importer operates against dumping and subsidization.  In this respect, there is no  WT/DS345/R 
 Page B-15 
 
 
  difference between the Enhanced Bond Requireme nt as implemented under the Amendment and the 
Clarification, on the one hand, and the Notice, on the other. 
20. Moreover, the assertion of the United States that surety fees and collateral demanded by 
sureties cannot be attributed to it runs directly contrary to the finding of the Panel in US – Import 
Measures  that an enhanced bonding requirement remain s a governmental measure even if the charges 
are paid to an independent private entity. 
(d) The Amended Bond Directive is inconsistent with the provisions of Article VI of the 
GATT 1994 "as interpreted by this Agreement" 
21. The logic of the United States' argument that it is sufficient if the Amended Bond Directive 
complies with the requirements of the Ad Note is similar to that advanced by the United States in 
US - CDSOA  that the CDSOA is in accordance with Article VI:3 of the GATT 1994 and the 
provisions of Part V of the Subsidies Agreem ent because these provisions do not encompass all 
measures taken against subsidization.  The Appellate Body rejected this argument by finding that the 
argument would render Article 32.1 of the Subsidi es Agreement "redundant or inutile" because it then 
would not provide any "additional discipline".  In th is case too, accepting the United States' arguments 
based on the Ad Note would have the same consequence. 
(e) The Amended Bond Directive is inconsistent with Article VI :2 of GATT 1994 and Articles 1 
and 18 of the Anti-Dumping Agreement as applied to importers of shrimp from India 
22. Based on India's arguments above and those in its  first submission and first oral statement, it 
is clear that the Enhanced Bond Requirement as a pplied to shrimp constitutes impermissible specific 
action against dumping. 
3. Conformity of Laws, Regulations and Administrative Procedures with WTO 
Obligations 
23. India's claims under Article XVI:4 of the WTO Agreement with respect to the laws, 
regulations and administrative procedures of the United States are broader than its claims under 
Article 18.4 of the Anti-Dumping Agreement and Ar ticle 32.5 of the Subsidies Agreement because 
India has also made claims under various provisions of the GATT 1994. 
24. India agrees that findings of in consistency of a Member's laws , regulations and administrative 
procedures with Article XVI:4 of the WTO Agreem ent, Article 18.4 of the Anti-Dumping Agreement 
or Article 32.5 of the Subsidies Agreement always w ill be consequential to fi ndings of inconsistency 
as such with other provisions of these Agreements or of the GATT.  Nevertheless, the Panel should 
not refuse to render findings under these provisions because it would render these provisions 
"redundant or inutile" despite being framed in term s of binding, enforceable obligations.  The United 
States has stated in its first written submission that  "[u]nder the directive, goods that carry similar 
collection risk as shrimp are ‘similarly prohibited or restricted' insofar as the directive provides for 
CBP to … establish … additional bond amounts for othe r merchandise…".  India should not be forced 
to resort again to the WTO dispute settlement system  merely to confirm again that the United States 
breaches its obligations.  Further, both in US – Antidumping Act of 1916 and in US – CDSOA , the 
panels and the Appellate Body found that the legislation at issue in those disputes was inconsistent as 
such with Article XVI:4 of the WTO Agreemen t, and Article 18.4 of the AD Agreement (and 
Article 32.5 of the Subsidies Agreement in the case of  the CDSOA).  India considers that they did so 
because these disputes involved the inconsistency of legislation with the obligation to refrain from 
impermissible specific actions against dumping and subsidization. WT/DS345/R 
Page B-16 
 
 
  25. Judicial economy is premised upon the inherent discretion of a panel not to render findings on 
issues that do not contribute to a positive solution.   India respectfully submits that the Panel would 
contribute to a positive solution in this dispute by rendering  a finding of inconsistency with Article 
XVI:4 of the WTO Agreement, Article 18.4 of the Anti-Dumping Agreement and Article 32.5 of the 
Subsidies Agreement.  This would provide the necessary guidance to the Un ited States on how to 
"protect the security and predicta bility needed [by its trading partners] to conduct future trade". 
4. Article 9 of  Anti-Dumping Agreement  and Article 19 of Subsidies Agreement 
26. Based on the Appellate Body's findings in US – Antidumping Act of 1916  that Article 9.1 of 
the Anti-Dumping Agreement gives Members a choi ce between imposing or not imposing duties and  
between imposing an anti-dumping duty equal to the dumping margin or a lower duty, India submits 
that the Amended Bond Directive is inconsistent with Article 9.1 of the Anti-Dumping Agreement in 
two ways:  first, it provides for taking a bond instead of the collection of definitive duties; second, the 
bond secures an amount in addition to the amounts coll ected by the United States to the extent of the 
dumping margin determined in the final affirmative determination. 
27. The Amended Bond Directive is also inconsistent  with Article VI:2 of the GATT 1994 read in 
conjunction with Articles 1, 18.1 and 9.2 of the Anti-Dumping Agreement and Article VI:3 of the 
GATT 1994 read in conjunction with Articles 10, 32.1 and 19.3 of the Subsidies Agreement. 
28. In response to a specific request  from India to identify the sp ecific provision in the Anti-
Dumping Agreement and in the Subsidies Agreement that confers the right on the United States to 
collect duties  after the final assessment of duties under the retrospective system of assessment, the 
United States responds only that "… as with all WT O Agreements, Members maintain the ‘right' to 
take a particular action provided it is not prohibited by the Agreement in question".  In its answers to 
the Panel's questions, however, the United States app ears to concede that the right to collect duties 
finally assessed under the retrospective system of a ssessment is governed by Articles 9.2 and 9.3 of 
the Anti-Dumping Agreement (and presumably by Articl es 19.3 and 19.4 of the Subsidies Agreement).   
29. The further argument of the United States that  it is permitted to take security because 
Article 9 of the Anti-Dumping Agreement and Article  19 of the Subsidies Agreement are silent on the 
taking of security misses the point that the taking of security as a provisional measure is certainly a specific action against dumping and subsidization under Article 7 of the Anti-Dumping Agreement 
and Article 17 of the Subsidies Agreement.  Moreover, both Article 1 of the Anti-Dumping 
Agreement and Article 10 of the Subsidies Agreem ent (albeit with some differences in language) 
basically provide that the provisions of the r espective Agreements govern the application of 
Article VI of the GATT 1994.  Therefore, silence of the relevant provision in either of these 
Agreements is no basis to infer a right to take a specific action against dumping or subsidization not 
contemplated by these Agreements.  The plain mean ing of Articles 1 and 18.1 of the Anti-Dumping 
Agreement and of Articles 10 and 32.1 of the Subsidi es Agreement is that the taking of specific action 
against dumping or subsidization must be in acco rdance with the provisions of these Agreements. 
30.
 Even under the retrospective system of assessme nt, therefore, the only provision in the Anti-
Dumping Agreement that confers a right on a Member to collect definitive duties is Article 9.2.  
Under Article 9.2 of the Antidumping Agreement, th e only option available to a Member even under 
the retrospective system of assessment is to coll ect antidumping duties to the extent of the dumping 
margin determined in the final determination th at precedes the imposition decision under Article 9.1 
of the Antidumping Agreement.  The correspondi ng provisions in the Subsidies Agreement that 
recognize the retrospective system of assessment a nd provide for countervailing duties to be "levied" 
to the extent of the dumping margin are footnote 52 and Article 19.3, respectively.  In US – Zeroing 
(Japan) , the Appellate Body found that:  WT/DS345/R 
 Page B-17 
 
 
  …The Anti – Dumping Agreement  is neutral as between different systems for levy 
and collection of antidumping duties.  Th e Agreement lays down the "margin of 
dumping" as the ceiling for the collection of duties regardless of the duty assessment system adopted by a WTO Member, and provides for a refund if the ceiling is 
exceeded. It is therefore in correct to say that the Anti – Dumping Agreement  favours 
one system, or places another system at a disadvantage. 
 It is clear, therefore, that the Anti-Dumpi ng Agreement (and, by extension, the Subsidies 
Agreement) provides a ceiling for the collection of duties including after the final determination and 
prior to the determination of the final liability unde r the retrospective assessme nt system.  Therefore, 
it is not permissible for the United States to ta ke security for the potential liability under the 
retrospective system of assessment.   
31. Finally, pursuant to Article 9.3 of the Antidum ping Agreement, it is clear that antidumping 
duties collected under Article 9.2 could never exceed the margin of dumping.  Similarly, pursuant to 
Article 19.4 of the Subsidies Agreement, counterva iling duties could never exceed the amount of the 
subsidy found to exist. 
32. The United States has applied the Enhanced Bond Requirement to importers from India of 
shrimp subject to antidumping duties in addition to  requiring cash deposits to the full extent of the 
margin of dumping found in the final affirmative de termination of dumping and injury and set out as a 
deposit rate in the Antidumping Orde r dated 1 February 2005.  Therefore, the application of the 
Enhanced Bond Requirement to importers of shrimp is inconsistent with the provisions of Articles 9.1, 
9.2 and 9.3 of the Antidumping Agreement. 
5. Article 7 of Anti-Dumping Agreement  and Art. 17 of Subsidies Agreement 
33. The United States has now admitted in response to a question from the Panel that US 
Customs requested 28 importers of shrimp to provi de enhanced, continuous bonds prior to the final 
affirmative determination on 1 Febr uary 2005 and that 15 importers, in  fact, furnished such bonds.  
None of these bonds have been discharged or cancelle d to date.  Accordingly, India requests the Panel 
to find that the Amendment, the Current Bond  Formulas Document and the Clarification are 
inconsistent as such with the provisions of Articl es 7.1, 7.2 and 7.4 of the Anti-Dumping Agreement 
and with Articles 17.1, 17.2 and 17.4 of the Subsidi es Agreement.  India also requests the Panel to 
find that the application of the Enhanced Bond Requ irement to importers of shrimp is inconsistent 
with the provisions of Articles 7.1, 7.2 and 7.4 of the Antidumping Agreement. 
6. The Ad Note 
34. On the United States' interpretation of the phrase "f inal determination of the facts in a case of 
suspected dumping or subsidization" in the Ad Note , there would be as many final determinations as 
there are import shipments by each exporter.  However, whether a particular shipment is dumped or 
subsidized is premised on an analysis of all the ship ments by that exporter during the period of review 
and not on each individual import shipment.  Further, if no request for administrative review is made 
or if it is withdrawn, duties are finally assessed on the basis of the final determination and not the 
administrative review.  Finally, under footnote 22 to the Antidumping Agreement, "a finding in the 
most recent assessment proceeding under subparagraph 3 of Article 9 that no duty is to be levied shall 
not by itself require the authorities to terminate the definitive duty". 
35. Article 1 of the Anti-Dumping Agreement provides that "the provisions of the Anti-Dumping 
Agreement govern the application of Article VI of  GATT 1994 in so far as action is taken under anti-
dumping legislation or regulations".  Because the Ad  Note is an interpretative note to paragraphs 2 
and 3 of Article VI and supplements these provi sions, any action taken under the Ad Note is WT/DS345/R 
Page B-18 
 
 
  necessarily also a "specific action against dumping" for purposes of Article 18.1 of the Antidumping 
Agreement.  The same conclusion must follow in the case of countervailing duties from the provisions 
of Article 10 and 32.1 of the Subsidies Agreement. 
36. The United States concedes that the Ad Note woul d have been available to take security prior 
to the final determination but for the disciplines cont ained in Article 7 of the Antidumping Agreement.  
Provisional measures under these provisions are one of the specific actions against dumping and 
subsidization.  Therefore, security taken under the Ad Note for payment of duties, whether before or 
after the final determination, is necessarily also a sp ecific action against dumping or subsidization.  As 
neither the Anti-Dumping Agreement nor the Su bsidies Agreement contemplates the taking of 
security after the final determination, it follows th at security for ensuring payment of antidumping or 
countervailing duties under the retrospective assessm ent system is also an impermissible specific 
action against dumping and subsidization. 
37. In fact, the thesis of the United States – that  the Ad Note is intended to permit the United 
States to safeguard itself against "non-collection risk " – suffers from a fundamental contradiction.  To 
the extent that it is premised on the use of the te rm "security" in the Ad No te, Article 7 of the Anti-
Dumping Agreement and Article 17 of the Subsid ies Agreement already pr ovide for safeguarding 
Members against one form of "non-collection" risk by permitting the taking of security after a preliminary determination and prior to the final a ffirmative determination.  If provisional measures 
constitute one of the permitted sp ecific responses, the United States cannot now argue that the 
Enhanced Bond Requirement is not a specific response to dumping and subsidization.   
38. India has set out in its first oral statement th e reasons why the Panel should reject the United 
States' argument that the preliminary results of the administrative review in the case of shrimp 
establish the necessity for the Amended Bond Directive.   Based on India's analysis of the preliminary 
results, the 17 exporters who were assigned an anti dumping duty rate of 82 per cent based on "adverse 
facts available" in the preliminary results are respons ible for exports of shrimp valued at only about 
$2,000,000, which represents only 0.5 per cent of th e total value of shrimp exported from India during 
the period of review.  In the case of the three larg est exporters, assuming that the preliminary results 
are confirmed in the final results, one comp any will be entitled to a refund of $2,900,000 
approximately and the other two companies will  have to pay about $1,000,000 and $325,000 
approximately.  India notes further that the total unsecured liability based on the preliminary results 
would be only about $2,000,000 as against th e huge amount of the bonds (about $30,000,000) 
demanded from all Indian exporters up to the end of  the period of review.  India notes also that the 
"all others" industry rate is expected to come down for exporters from India in the final results based 
on corrections in the calculations of dumping margins of some of the larger exporters selected for review. 
7. Notification Requirements 
39. With respect to the notification requirements in Article 18.5 of the Anti-Dumping Agreement 
or Article 32.6 of the Subsidies Agreement, India not es that the real issue is the substance and effect 
of the law or regulation and not whether it is fo rmally called a customs law or regulation or an 
antidumping or countervailing duty la w or regulation.  If the taking of  security in the form of cash 
deposits or bonds as a provisional measure is a fundamental part of the antidumping and 
countervailing duty regulati ons of the United States, taking security to ensure collection of 
antidumping and countervailing duties finally assessed in an administrative review also involves 
administration of the antidumping and countervailing duty laws and regulations of the United States. 
The United States itself attempts to justify the Amended Bond Directive as being necessary to secure 
compliance with 19 U.S.C. 1673e(a)1, which is part of its antidumping and countervailing duty statute.  
Therefore, the United States should have notifie d the Amended Bond Directive to the Committee on 
Antidumping Practices and to the Committee on S ubsidies and Countervailing Measures.  The  WT/DS345/R 
 Page B-19 
 
 
  argument of the United States – that Article 18.5 of  the Anti-Dumping Agreement and Article 32.6 of 
the Subsidies Agreement do not specify when cha nges must be notified – also cannot be accepted 
because it would render these provisions redundant a nd inutile.  Changes obviously have to be 
notified within a reasonable period of time.  In this case, more than three years have elapsed since the 
United States instituted the Enhanced Bond Requireme nt.  This is not a reasonable period of time. 
8. Article X:3(a) of the GATT 1994 
40. With respect to the objection of the United Stat es that India's claim under Article X:3(a) of 
the GATT 1994 concerns the substantive content of the Amended Bond Directive and not its 
administration, India notes that th e scope of the measures at issue as defined in India's Panel Request 
includes not only the Amended Bond Directive but also 19 U.S.C. 1623 and 19 C.F.R. 113.13.  The 
Amended Bond Directive represents the discriminator y application of 19 U.S.C. 1623 and 19 C.F.R. 
113.13 to imports of shrimp subject to antidumpi ng duties from India.  The Amended Bond Directive 
clearly is not a law or regulation.  Moreover, in E.C. – Selected Customs Matters , the Appellate Body 
clarified that there is "… no reason why a legal instrument that regulates the application or implementation of that instrument cannot be examined under Article X:3(a) if it is alleged to lead to a 
lack of uniform, impartial or reasonable administra tion of that legal instrument".  The Panel in 
Argentina – Bovine Hides , reached similar conclusions regarding the scope of Article X:3(a). 
41. Further, apart from the fact that the enhanced  bonds taken prior to the Notice have not been 
discharged, even after the Notice dated 24 Oct ober 2006, US Customs has not issued notices 
informing any importer of Indian origin that it may apply for reduction in its bond amounts.  India has 
also supplied to the Panel copies of bond waiver le tters issued to certain importers, which establish 
that US Customs did not provide any reas ons for determining a particular bond amount. 
9. Articles I:1, II:1(a) and II:1(b) of the GATT 1994 
42. At the outset, India notes that its claims under Articles I:1, II:1(a) and II:1(b) of the 
GATT 1994 will not arise unless the United States successfully demonstrates that the Amended Bond 
Directive does not provide for specific action agai nst dumping and subsidiza tion and is covered by 
footnote 24 of the Anti-Dumping Agreement and footnote 56 of the Subsidies Agreement. 
43. To the extent that the Enhanced Bond Require ment seeks to secure a contingent liability for 
payment of antidumping or countervailing duties, it may be characterized as an "other duty" or 
"charge" for purposes of Articles I and II of the GATT.  There is considerable GATT and WTO 
jurisprudence that establishes th e necessity of evaluating a bond requirement together with the 
obligation that it purports to secure.  In this case, the United States has no right to collect duties in 
excess of the dumping margin or the subsidy found to exist until the final liability is established in an 
administrative review under its retrospective assessm ent system.  Further, Article II:2(b) makes an 
exception to the requirement of Article II:1(b) in respect of "all other duties" only for "any anti-
dumping or countervailing duty applied c onsistently with the provisions of  Article VI".  To the extent 
that the Enhanced Bond Requirement purports to secure  the liability for duties that have not yet been 
finally assessed under its retrospective assessment system , therefore, it is a contingent liability for an 
"other duty" that is not covered by Article II:2(b). 
10. Articles XI:1 and XIII of the GATT 1994 
44. With respect to the United States' argument that the Enhanced Bond Requirement does not 
limit imports, India notes that the Panel in EEC – Minimum Import Price  rejected the argument of the 
European Communities that its minimum import pr ice system, "… as enforced by the additional 
security, for imports of tomato concentrates into the Community were allowed, but not below the 
minimum price level" and found that it was "… a restri ction ‘other than duties taxes or other charges' WT/DS345/R 
Page B-20 
 
 
  within the meaning of Article XI:1".  Arguably, therefore, the Enhanced Bond Requirement also 
constitutes a restriction on imports of the merchandise to which it applies.  Based on Article 3.8 of the 
DSU, India submits also that there is no legal requirement that India must establish, as a matter of fact, that the Amended Bond Requirement restricts imports of  shrimp.  India refers also to the inadequacies 
in the GAO Report relied upon by the United States for concluding that the Enhanced Bond 
Requirement, in fact, does not restrict imports of shrimp. 
11. Article XX:(d) of the GATT 1994 
45. India notes that Article XX:(d) of the GATT 1994 is an affirmative defense and the United 
States bears the burden of demonstrating that the Am ended Bond Directive is justified under it.  The 
Appellate Body noted in Korea – Beef  that a measure that is "necessary" for purposes of Article XX(d) 
must be one that is closer to "indispensable" than  simply "making a contribution to".  In order to 
establish that the Amended Bond Directive is "necess ary," therefore, the United States must establish 
both that its existing system of collection does not work and that the Enhanced Bond Requirement is 
close to indispensable.  However, the United States , which has operated its retrospective system at 
least since 1979 and claims to have done so since 1921, did not find it necessary to impose the 
Enhanced Bond Requirement until 2004.  
46. To establish the necessity of the Enhanced Bond Requirement, the United States points only 
to the incidence of default for a few years immedi ately preceding the Amendment in 2004.  However, 
defaults could also be attributed to the fact  that they involved non-market economies and the 
determination of margins based on adverse facts avai lable, to surety bankruptcies and to defaults by 
new shippers from whom no security at all was take n.  Further, it is important to note that the 
Enhanced Bond Requirement is premised on both  a risk of increases in dumping margins at 
liquidation and default in payments by importers.  US Customs has absolutely no expertise or any 
basis to determine when dumping margins are likely to increase.  The analysis of past history of 
increases in duty rates, on which US Customs relies, shows that 67 per cent of the time, duties did not 
increase at all.  The United States also appears to  concede that there was no basis for forecasting a 
high likelihood of non-collection risk in the case of  agricultural and aquaculture merchandise subject 
to countervailing duties.  Further, the US Court of International Trade found that there was no basis in the record for designating shrimp as a likely non-collection risk. 
47. Moreover, the Amended Bond Directive also does not satisfy the requirements of the chapeau 
to Article XX.  In US – Shrimp , the Appellate Body has interpreted the meaning of the phrase 
"arbitrary or unjustifiable discrimination" in the chapeau  to Article XX as including "… not only 
when the detailed operating provisions of the meas ure prescribe the arbitrary or unjustifiable activity, 
but also where a measure, otherwise fair and just on  its face, is actually applied in an arbitrary or 
unjustifiable manner".  In this case, the Amended Bond Directive clearly involves arbitrary and 
unjustifiable discrimination between countri es where the same conditions prevail.