WORLD TRADE  
ORGANIZATION  WT/DS363/10 
23 September 2009 
 
 (09-4455) 
 Original:   English 
  
 
CHINA – MEASURES AFFECTING TRADING RIGHTS  
AND DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS  
AND AUDIOVISUAL ENTERTAINMENT PRODUCTS 
 
Notification of an Appeal by China
 
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 20(1) of the Working Procedures for Appellate Review  
  
 The following notification, dated 22 Septembe r 2009, from the Delegation of the People's 
Republic of China, is being circulated to Members.  
_______________ 
 
 
 Pursuant to Article 16.4 and Article 17 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate 
Review,  China hereby notifies its decision to appeal to the Appellate Body certain issues of law 
covered in the Panel Report in China – Measures Affecting Trading Rights and Distribution Services 
for Certain Publications and Audiovisual Entertainment Products  (WT/DS363/R, as amended by 
WT/DS363/R/Corr.1), and certain legal interpreta tions developed by the Panel in this Report.
1 
 1. China seeks review by the Appellate Body of  the Panel's legal c onclusions set out in 
paragraphs 7.913 and 8.2(a)(i) and (ii)
2 of the Panel Report that China's measures3 are not justified 
under Article XX(a) of the General Agreement on Tariffs and Trade 1994  ("GATT 1994"). The Panel 
committed errors of law and legal interpretation in concluding that none of the relevant measures are 
"necessary" to protect public morals, within the meaning of Article XX(a) of the GATT 1994. In 
particular:  
1) The Panel erred in law  and failed to make an objective assessment of the 
matter before it, in violation of Article 11 of the DSU, in considering that the 
state-ownership requirement in Article 42 of the Publications Regulation  
makes no material contribution to the protection of public morals in China.4 
2) To the extent that it based its findings on its reasoning concerning Article 42 
of the Publications Regulation , the Panel also erred in law in considering that 
the exclusions relating to foreign-invest ed enterprises in Articles X.2 and X.3 
                                                      
1For ease of reference, China hereafter refers to this Report as the "Panel Report". 
2China makes reference to sub-section (a) under paragraph 8.2 on page 466 of the Panel Report. 
3The Catalogue  and the Foreign Investment Regulation  (Articles X.2 and X.3 as well as Articles 3 
and 4); the Several Opinions  (Article 4) ; the Publications Regulation  (Article 42 in conjunction with Article 41, 
and Article 41); the 2001 Audiovisual Products Regulation  (Article 27); the Audiovisual Products Importation 
Rule (Article 8); and the Audiovisual (Sub-)Distribution Rule  (Article 21). 
4See, e.g.,  Panel Report, paras. 7.850, 7.852–7.863. WT/DS363/10 
Page 2  
 
  of the Catalogue , Articles 3 and 4 of the Foreign Investment Regulation , 
Article 4 of the Several Opinions  and Article 21 of the Audiovisual 
(Sub-)Distribution Rule  make no material contribution to the protection of 
public morals in China.
5 
3) The Panel erred in interpreting Article XX(a) of the GATT 1994 as requiring 
the Panel to also weigh the restrictive impact that the measures at issue may 
have on those wishing to engage in impor ting, in particular on their right to 
trade.6 
4) The Panel committed errors of law and legal interpretation, and failed to 
make an objective assessment of the fact s, in violation of Article 11 of the 
DSU, in considering that at least one of the alternative measures referred to 
by the United States was an alterna tive "reasonably available" to China.7 
Should the Appellate Body reverse the Panel's findi ngs that China's measures are not "necessary" to 
protect public morals, within the meaning of Artic le XX(a) of the GATT 1994, China requests that the 
Appellate Body complete the Panel's analysis and fi nd that China's measures are fully justified under 
Article XX(a) of the GATT 1994. 
2. China seeks review by the Appellate Body of the Panel's legal conclusions set out in sub-
section 3.(b)(i) of section VIII of the Panel Report8 that the Circular on Internet Culture  (Article II), 
the Network Music Opinions (Article 8), the Several Opinions  (Article 4) and Article X:7 of the 
Catalogue , in conjunction with Articles 3 and 4 of the Foreign Investment Regulation , are 
inconsistent with Article XVII of the GATS. The Pa nel's legal conclusions are based on errors of law 
and legal interpretation in applying the customary rul es of interpretation of public international law as 
codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties ("the Vienna Convention"), to China's GATS schedule. Such errors led, inter alia , to the erroneous finding that 
China's schedule to the GATS includes specific co mmitments on the electronic distribution of sound 
recordings in non-physical form under Sector 2.D "sound recording distribution services", contrary to 
Articles 3.2 and 19.2 of the DSU.
9 In particular: 
1) The Panel erred in its analysis of the ordinary meaning to be given to the 
terms "sound recording distribution services", taken in their context and in light of the object and purpose of the Treaty.
10 
2) The Panel erred in concluding that an analysis of China's GATS schedule 
based on supplementary means of interpretation under Article 32 of the Vienna Convention confirmed its earli er analysis, under Article 31 of the 
Vienna Convention, of China's commitment on sound recording distribution 
services.
11  
                                                      
5See, e.g.,  Panel Report, paras. 7.851, 7.864–7.868. 
6See, e.g.,  Panel Report, paras. 7.787–7.788, 7.847–7.849, 7.862–7.863, 7.867–7.868. 
7See, e.g., Panel Report, paras. 7.886–7.909. 
8Panel Report, page 467. 
9See, e.g., Panel Report, para. 7.1265. 
10See, e.g., Panel Report, paras. 7.1173–7.1220. 
11See, e.g., Panel Report, paras. 7.1221–7.1247.  WT/DS363/10 
 Page 3 
 
 
  3) Consequently, the Panel erred in la w in finding that China's measures12 are 
inconsistent with China's national tr eatment commitments under Article XVII 
of the GATS. 
3. China seeks review by the Appellate Body of  the Panel's legal conclusions, set out in 
paragraphs 7.576, 7.598, 7.599, 7.7 06 and sub-section 2.(c)(ii), (iii), (vi) and (vii) of Section VIII of 
the Panel Report,13 that Article 30 of the Film Regulation  and Article 16 of the Film Enterprise Rule  
are inconsistent with China's trading rights commitments under China's Accession Protocol. The 
Panel's conclusions are based on errors of law and le gal interpretation, and on a failure to make an 
objective assessment of the facts before it, contrary to Article 11 of the DSU. Such errors led, inter 
alia, to the erroneous finding that the challenged meas ures are inconsistent with certain provisions of 
China's Accession Protocol, contrary to Articles 3.2 and 19.2 of the DSU. In particular, the Panel 
erred in concluding that China's trading rights commi tments are applicable to  the Chinese measures at 
issue, despite the fact that these measures do not re gulate hard-copy cinematographic film, which is 
the subject of the US claim.14 
4. China seeks review by the Appellate Body of  the Panel's legal c onclusions set out in 
paragraphs 7.706 and sub-section 2.(d)(i), (ii), (v), (v i) and (x) of section VIII of the Panel Report that 
Article 5 of the Audiovisual Products Regulation  and Article 7 of the Audiovisual Products 
Importation Rule  are inconsistent with China's trading rights commitments under China's Accession 
Protocol. The Panel's findings concerning these m easures are based on the same reasoning as the one 
on which the Panel based its findings concerning Article 30 of the Film Regulation  and Article 16 of 
the Film Enterprise Rule.15 
__________ 
 
 
                                                      
12The Circular on Internet Culture  (Article II); the Network Music Opinions  (Article 8); the Several 
Opinions  (Article 4); and the Catalogue  (Article X:7, in conjuncti on with Articles 3 and 4 of the Foreign 
Investment Regulation ). 
13Panel Report, pages 464–465. 
14See, e.g., Panel Report, paras. 7.528–7.560, 7.584. 
15See, e.g. , Panel Report, paras. 7.649–7.651, 7.674.