WORLD TRADE  
ORGANIZATION  WT/DS336/16 
5 May 2008 
 (08-2111) 
 Original:   English 
 
    
 
     
 
   
JAPAN – COUNTERVAILING DUTIES ON 
DYNAMIC RANDOM ACCESS ME MORIES FROM KOREA 
 
 
ARB-2008-1/22 
   
 
Arbitration 
under Article 21.3(c) of the 
Understanding on Rules and Procedures 
Governing the Settlement of Disputes 
 
 
 
    
 
 
Award of the Arbitrator 
David Unterhalter 
  WT/DS336/16 
 Page i 
 
 
 
I. Introduction................................................................................................................... ..............1  
II. Arguments of the Parties....................................................................................................... ......2  
A. Japan ..............................................................................................................................2  
B. Korea .............................................................................................................................7  
III. Reasonable Period of Time...................................................................................................... .12 
A. Scope of the Arbitrator's Mandate under Article 21.3(c) of the DSU ..........................12  
B. Factors Affecting the Determination of the Reasonable Period of Time .....................14  
1. Choice of Means of Implementation in the Light of the DSB's 
Recommendations and Rulings ......................................................................14  
2. The Specific Steps of Implementation............................................................18  
IV. Award.......................................................................................................................... ..............23  
 
 WT/DS336/16 
Page ii  
 
ABBREVIATIONS USED IN THIS AWARD 
 
Abbreviation Definition 
Appellate Body Report Appellate Body Report in Japan – DRAMs (Korea) 
Bureau Cabinet Legislation Bureau  
Council Council on Customs, Tariff, Foreign Exchange and other Transactions 
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
Hynix Hynix Semiconductor, Inc. 
JIA Japan's investigating authorities  
Panel Report Panel Report in Japan – DRAMs (Korea) 
Restructurings Debt-restructuring programmes entered into by Hynix and its creditors in 
October 2001 and December 2002 
SCM Agreement  Agreement on Subsidies and Countervailing Measures  
 
 
CASES CITED IN THIS AWARD 
 
Short Title Full Case Title and Citation 
Australia – Salmon  Award of the Arbitrator, Australia – Measures Affecting Importation of Salmon  
– Arbitration under Article 21.3(c) of the DSU , WT/DS18/9, 23 February 1999, 
DSR 1999:I, 267 
Canada – Autos  Award of the Arbitrator, Canada – Certain Measures Affecting the Automotive 
Industry – Arbitration under Article 21.3(c) of the DSU , WT/DS139/12, 
WT/DS142/12, 4 October 2000, DSR 2000:X, 5079 
Canada – Patent Term  Award of the Arbitrator, Canada – Term of Patent Protection – Arbitration under 
Article 21.3(c) of the DSU , WT/DS170/10, 28 February 2001, DSR 2001:V, 2031 
Canada – Pharmaceutical 
Patents  Award of the Arbitrator, Canada – Patent Protection of Pharmaceutical Products 
– Arbitration under Article 21.3(c) of the DSU , WT/DS114/13, 18 August 2000, 
DSR 2002:I, 3 
Chile – Alcoholic Beverages  Award of the Arbitrator, Chile – Taxes on Alcoholic Beverages – Arbitration 
under Article 21.3(c) of the DSU , WT/DS87/15, WT/DS110/14, 23 May 2000, 
DSR 2000:V, 2583 
Chile – Price Band System  Award of the Arbitrator, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products – Arbitration under Article 21.3(c) of 
the DSU , WT/DS207/13, 17 March 2003, DSR 2003:III, 1237 
EC – Chicken Cuts Award of the Arbitrator, European Communities – Customs Classification of 
Frozen Boneless Chicken Cuts – Arbitration under Article 21.3(c) of the DSU , 
WT/DS269/13, WT/DS286/15, 20 February 2006 
EC – Export Subsidies on 
Sugar Award of the Arbitrator, European Communities – Export Subsidies on Sugar – 
Arbitration under Article 21.3(c) of the DSU , WT/DS265/33, WT/DS266/33, 
WT/DS283/14, 28 October 2005, DSR 2005:XXIII, 11581 
EC – Hormones  Award of the Arbitrator, EC Measures Concerning Meat and Meat Products 
(Hormones) – Arbitration under Article 21.3(c) of the DSU , WT/DS26/15, 
WT/DS48/13, 29 May 1998, DSR 1998:V, 1833  WT/DS336/16 
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Short Title Full Case Title and Citation 
EC – Tariff Preferences Award of the Arbitrator, European Communities – Conditions for the Granting 
of Tariff Preferences to Developing Countries  – Arbitration under Article 21.3(c) 
of the DSU , WT/DS246/14, 20 September 2004, DSR 2004:IX, 4313 
Indonesia – Autos  Award of the Arbitrator, Indonesia – Certain Measures Affecting the Automobile 
Industry – Arbitration under Article 21.3(c) of the DSU , WT/DS54/15, 
WT/DS55/14, WT/DS59/13, WT/DS64/12, 7 December 1998, DSR 1998:IX, 
4029 
Japan – DRAMs (Korea) Appellate Body Report, Japan – Countervailing Duties on Dynamic Random 
Access Memories from Korea , WT/DS336/AB/R and Corr.1, adopted 
17 December 2007 
Japan – DRAMs (Korea) Panel Report, Japan – Counterva iling Duties on Dynam ic Random Access 
Memories from Korea , WT/DS336/R, adopted 17 D ecember 2007, as modified 
by Appellate Body Report, WT/DS336/AB/R 
Korea – Alcoholic Beverages  Award of the Arbitrator, Korea – Taxes on Alcoholic Beverages – Arbitration 
under Article 21.3(c) of the DSU , WT/DS75/16, WT/DS84/14, 4 June 1999, 
DSR 1999:II, 937 
Mexico – Anti-Dumping 
Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dump ing Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R, adopted 
20 December 2005, DSR 2005:XXII, 10853 
US – 1916 Act  Award of the Arbitrator, United States – Anti-Dumping Act of 1916 – Arbitration 
under Article 21.3(c) of the DSU , WT/DS136/11, WT/DS162/14, 28 February 
2001, DSR 2001:V, 2017 
US – Cotton Yarn  Appellate Body Report, United States – Transitional Safeguard Measure on 
Combed Cotton Yarn from Pakistan , WT/DS192/AB/R, adopted 5 November 
2001, DSR 2001:XII, 6027 
US – Countervailing Duty 
Investigation on DRAMS Appellate Body Report, United States – Countervailing Duty Investigation on 
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea , 
WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, 8131 
US – Gambling Award of the Arbitrator, United States – Measures Affecting the Cross-Border 
Supply of Gambling and Betting Services – Arbitration under Article 21.3(c) of the DSU , WT/DS285/13, 19 August 2005, DSR 2005:XXIII, 11639 
US – Offset Act  
(Byrd Amendment ) Award of the Arbitrator, United States – Continued Dumping and Subsidy Offset 
Act of 2000 – Arbitration under Article 21.3(c) of the DSU , WT/DS217/14, 
WT/DS234/22, 13 June 2003, DSR 2003:III, 1163 
US – Oil Country Tubular Goods Sunset Reviews Award of the Arbitrator, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods  from Argentina – Arbitration under 
Article 21.3(c) of the DSU , WT/DS268/12, 7 June 2005, DSR 2005:XXIII, 11619 
US – Oil Country Tubular 
Goods Sunset Reviews  (Article 21.5 – Argentina) Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods fr om Argentina – Recourse to Article 
21.5 of the DSU by Argentina , WT/DS268/AB/RW, adopted 11 May 2007 
US – Oil Country Tubular 
Goods Sunset Reviews  
(Article 21.5 – Argentina) Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil 
Country Tubular Goods from Argentina – Re course to Article 21.5 of the DSU by 
Argentina , WT/DS268/RW, adopted 11 May 2007, as modified by Appellate 
Body Report, WT/DS268/AB/RW 
 
  WT/DS336/16 
 Page 1 
 
 
WORLD TRADE ORGANIZATION  
APPELLATE BODY 
 
 Japan – Countervailing Duties on Dynamic 
Random Access Memories from Korea 
 
Parties: 
 
Korea 
Japan   ARB-2008-1/22 
  Arbitrator:  
 David Unterhalter 
 
  
 
I. Introduction 
1. On 17 December 2007, the Dispute Settlement B ody (the "DSB") adopted  the Appellate Body 
Report
1 and the Panel Report2, as modified by the Appellate Body Report, in Japan – Countervailing 
Duties on Dynamic Random Access Memories from Korea .3  At the meeting of the DSB held on 
15 January 2008, Japan stated that it intended to co mply with the recommendations and rulings of the 
DSB in this dispute, and that it would need a reasonable period of time in which to do so.4 
2. On 25 February 2008, Korea informed the DSB th at consultations with Japan had not resulted 
in agreement on the reasonable period of time for im plementation.  Korea therefore requested that 
such period be determined through binding arb itration, pursuant to Article 21.3(c) of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes  (the "DSU").5 
3. By joint letter of 4 March 2008, Korea and Japan requested me to act as Arbitrator, pursuant 
to Article 21.3(c) of the DSU, to determine the reasonable period of time for implementation of the 
recommendations and rulings of  the DSB in this dispute.6  As the 90-day period following adoption of 
the Panel and Appellate Body Reports was to expi re on 17 March 2008, the parties, in their joint 
letter, confirmed that an award of the arbitrator is sued no later than 60 days after the date of the 
acceptance of the appointment by the arbitrator will be deemed to be  an award of the arbitrator for the 
purposes of Article 21.3(c).7  I accepted the appointment on 5 March 20088 and undertook to issue the 
                                                      
1Appellate Body Report, WT/DS336/AB/R. 
2Panel Report, WT/DS336/R. 
3WT/DS336/12. 
4See WT/DSB/M/244, para. 15. 
5WT/DS336/13. 
6WT/DS336/14. 
7WT/DS336/15. 
8WT/DS336/14. WT/DS336/16 
Page 2  
 
Award no later than 5 May 2008.  Neither party obj ected to the proposed date for circulation of the 
Award. 
4. Japan filed its written submission on 17 March 2008.  Korea filed its written submission on 
25 March 2008.  An oral hearing was held on 8 April 2008. 
II. Arguments of the Parties 
A. Japan 
5. Japan requests that I determine the "reasonable period of time" for implementation of the 
recommendations and rulings of the DSB in this dispute to be 15 months from the date of adoption by the DSB of the Panel and Appellate Bo dy Reports, that is, until 17 March 2009.
  
6. According to Japan, immediate compliance with  the DSB's recommendations and rulings is 
"impracticable".9  Japan explains that implementation in this case would require modification of the 
original countervailing duty order at issue in th e underlying dispute through a new Cabinet Order 
replacing the original Cabinet Order10 authorizing the original countervailing duty.11  The procedure 
necessary under Japanese laws and regulations to replace a Cabinet Order includes a new 
countervailing duty investigation, in which Japan's investigating authorities (the "JIA") must follow 
certain "multiple, time-consuming and indispensable [procedural] steps"12 designed to ensure the 
accuracy and transparency of the investigation and th at the due process rights of interested parties are 
respected.13  According to Japan, any failure to follo w these steps could impinge on the due process 
rights of both domestic and Korean interested partie s and lead to additional problems of consistency 
of Japan's domestic laws with its WTO obligations.  Japan further contends that the 15-month period 
requested represents the shortest period of time possi ble to ensure that these due process rights are not 
jeopardized. 
7. Japan recalls certain "key legal principles"14 relevant to arbitration proceedings under 
Article 21.3(c) of the DSU which should "guide this arbitration".15  In particular, Japan highlights the 
                                                      
9Japan's submission, paras. 1 and 15. 
10Cabinet Order Relating to Countervailing Duty Levied on Dynamic Random Access Memory, Etc. , 
(Cabinet Order No. 13), Official Gazette , Issue No. 4264, 27 January 2006 (Exhibit JPN-1 attached to Japan's 
submission). 
11See Japan's submission, para. 14. 
12Ibid., para. 58. 
13See ibid., para. 2. 
14Ibid., para. 4;  see also paras. 5-13. 
15Ibid., para. 13;  see also paras. 5-12.  WT/DS336/16 
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discretion that an implementing Member enjoys in  selecting its preferred means of implementation16;  
that implementation is usually achieved by means entirely within the "lawmaking" procedures of the 
implementing Member17;  that the shortest period of time for implementation does not necessarily 
entail recourse to extraordinary procedures18;  that the "particular circumstances" of a case have 
included the legal form of implementation, the "techni cal complexity" of the measures to be drafted, 
adopted and implemented, and the period of time in  which the Member can achieve the proposed form 
of implementation in the light of its system of government19;  that procedural steps include procedural 
conventions or the standard practice of a Member , even if not explicitly mandated in laws and 
regulations20;  that the due process rights of interested  parties should be respected in conducting 
investigations to implement DSB recommendations and rulings21;  and that implementation should be 
full and effective in the light of the "particular circumstances" of the case.22 
8. Japan recalls that the countervailing duty measure  at issue in the original proceedings was 
imposed pursuant to a Cabinet Order23, as required by Article 7(1) of Japan's Customs Tariff Law.24  
Japan contends that, in order to conform to th e recommendations and ruli ngs of the DSB, that 
measure will need to be modified through a replacemen t Cabinet Order.  Japan refers to Article 7(17) 
of the Customs Tariff Law, which, according to  Japan, "provides only one mechanism" for the 
                                                      
16See Japan's submission, para. 13 and para. 6 (referring to Award of the Arbitrator, EC – Chicken 
Cuts, para. 49). 
17Ibid., para. 13 (referring to Award of the Arbitrator, EC – Chicken Cuts , para. 51). 
18Ibid., para. 13 and para. 6 (referri ng to Award of the Arbitrator, EC – Chicken Cuts, para. 49). 
19Ibid., para. 13 (referring to Award of the Arbitrator, US – Oil Country Tubular Goods Sunset 
Reviews , para. 30). 
20Ibid., para. 13 and para. 10 (referring to, inter alia , Award of the Arbitrator, EC – Chicken Cuts, 
para. 79). 
21Ibid., para. 13 and footnote 16 to para. 11 (referring to Panel Report, US – Oil Country Tubular 
Goods (Article 21.5 – Argentina) , para. 7.115;  and Appellate Body Report, Mexico – Anti-Dumping Measures 
on Rice , para. 292). 
22Ibid., para. 13 and para. 12 (referring to Award of the Arbitrator, Chile – Alcoholic Beverages , 
paras. 39-40). 
23See supra , footnote 10. 
24See Japan's submission, paras. 2 and 14 (referring to Article 7(1) of Japan's Customs Tariff Law (Law 
No. 54 of 1910, as amended) which provides as follows: 
Where there is a fact that the importation of product to which subsidies are 
granted, directly or indirectly, to production or export in any foreign country causes or threatens to cause material injury to domestic industry …, as may 
be prescribed by a Cabinet Order, … a duty may be imposed in addition to 
customs duty chargeable at an applicable  rate in the Annexed Tariff, in an 
amount equal to or less than the amount of the subsidies … .) 
Japan's Customs Tariff Law is reproduced in document G/ADP/N/1/JPN/2, G/SCM/N/1/JPN/2 (Exhibit JPN-2 
attached to Japan's submission). WT/DS336/16 
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Japanese government to "modify or abolish the countervailing duty"
25, namely, through a new 
investigation.  Japan also refers to the fact that the Japanese government may modify a countervailing 
duty order if it is "found"26 necessary to do so (which, accord ing to Japan, suggests that an 
investigation must be conducted);  that Article  7(19) of the Customs Tariff Law requires the 
government to "initiate ... an investigation as to whether ... changes in circumstances exist"27;  and 
further that Article 7(20) of the Customs Tariff La w requires the investigation to be concluded within 
one year.  According to Japan, these provisions illu strate that Japan's Customs Tariff Law does not 
allow the modification of a countervailing duty Cabi net Order by "simply drafting" an amendment to 
the current order for presentation to the Cabinet.28 
9. Japan contends that, since an investigation is required, the government is also required to 
comply with certain procedural steps under Japanes e laws and regulations re lating to investigations.29  
Japan contends that, "in addition to these mandato ry procedural steps", there are "requirements 
inherent to trade remedy investigations" designed to  ensure that the due process rights of interested 
parties are preserved and that "meaning" is given to investigative process30, which the JIA does not 
have any "discretion to omit".31  For Japan, it is these aspects of the procedures that constitute the 
"particular circumstances" of th e case and which must be taken into account in determining the 
reasonable period of time for implementation.  Japan highlights some of the procedural requirements, 
namely:  that interested parties be allowed "mean ingful and necessary opportunities" to participate in 
the investigative process32 (through opportunities to submit evidence and opinions, view information 
submitted by other interested parties, review a nd comment on the "Essential Facts" determined as 
such by the JIA);  and that the JIA request evid ence and information, verify their accuracy, disclose 
                                                      
25Japan's submission, para. 14 and footnote 24 thereto.  Article 7(17) of the Customs Tariff Law, supra , 
footnote 24, provides, in relevant part: 
Where there are some changes in circum stances with regard to the specified 
product as enumerated below, the Government may, if it is found  to be 
necessary, as may be prescribed in a Cabinet Order, modify or abolish the countervailing duty imposed under the provision of paragraph 1. (emphasis 
added) 
26Japan's submission, para. 15. 
27Supra , footnote 24. 
28See Japan's submission, para. 15. 
29Ibid., para. 16.  The relevant Japanese laws, notifications, and regulations are reproduced in 
documents G/ADP/N/1/JPN/2, G/SCM/N/1/JPN/2; and Corr.1; Corr.2; Suppl.1; Suppl.2; Suppl.3; Suppl.4;  
and Suppl.5 (Exhibit JPN-2 attached to Japan's submission). 
30Ibid., para. 17 (referring to Award of the Arbitrator, US – Oil Country Tubular Goods Sunset 
Reviews , para. 51). 
31Ibid., para. 19. 
32See ibid., para. 19 and footnote 27 thereto (referring to Article 10(1) of Cabinet Order Relating to 
Countervailing Duty (Cabinet Order No. 416, December 1994), which Japan contends also requires the JIA to 
accept information from any "industrial user of the products under the i nvestigation or any representative-
consumer organizations of such products" (reproduced in document G/ADP/N/1/JPN/2, G/SCM/N/1/JPN/2 
(Exhibit JPN-2 attached to Japan's submission)).  Japan argues that this means that the requirements of 
Article 12.10 of the SCM Agreement  are mandatory under Japanese domestic law.  WT/DS336/16 
 Page 5 
 
 
the Essential Facts to the interested parties, and a llow commentary before issuing the final decision.  
Japan also recalls that, in the or iginal investigation, there were more than 2000 pieces of evidence, 
and a report spanning over 500 pages, and that certain items of evidence and findings were 
interlinked;  therefore, reconsideration of existing evidence and of new evidence submitted by 
interested parties might require the JIA to examin e how the new evidence inte racts with the existing 
factual record.  Further, Japan highlights that, und er Japanese law, the JIA's determination must be 
examined and reviewed by relevant bodies before  a new countervailing duty Cabinet Order can be 
issued. 
10. Bearing these factors in mind, Japan provid es a detailed account of the three phases of 
implementation it envisages:  the first "preparato ry" stage for the initiation of the investigation—
which Japan notes has already been completed—(estim ated at 45 days);  the investigation stage 
(estimated at one year);  and the third phase involving the preparation and promulgation of the new 
countervailing duty Cabinet Orde r (estimated at 45 days). 
11. Japan explains that, in the first stage—whic h it has already completed—Japan examined the 
relevant procedures available for implementation under Japanese law (since this is the first trade 
remedy case requiring Japan to implement the DSB' s recommendations and rulings).  Pursuant to 
Article 7(19) of the Customs Tariff Law, which aut horizes the initiation of investigations relating to 
changed circumstances33, the government "moved expeditiously" to  initiate the investigation by 30 
January 2008, but was first required to follow cer tain steps (including consultations between the 
Minster of Finance and Ministry of Economy, Trad e and Industry;  formation of the investigating 
authorities;  publication of the notice of initiation;  provision of notice to interested parties and to members of relevant Councils;  and preparation of the notice of initiati on, summaries of matters 
subject to investigation, time-limits for submis sion of evidence in writing, and other relevant 
matters).
34  Japan submits that, due to the "best efforts"35 of the Japanese government, it was able to 
complete the preparatory process within 45 days. 
12. Japan contends that, during the (second) investig atory stage, the JIA must comply with the 
same due process and transparency procedures required in the original investigation and set out in the 
                                                      
33See Japan's submission, para. 24 (referring to Article 7(19) of the Customs Tariff Law, supra , 
footnote 24). 
34See ibid., paras. 24-26 and footnotes 29-37 thereto (referring to various provisions of the Cabinet 
Order Relating to Countervailing Duty, supra , footnote 32);  the Guidelines for Procedures Relating to 
Countervailing and Anti-Dumping Duties (reproduced in documents G/ADP/N/1/JPN/2/Suppl.2, 
G/SCM/N/1/JPN/2/Suppl.2; and G/ADP/N/1/JPN/2/Suppl.4, G/SCM/N/1/JPN/2/Suppl.4 (Exhibit JPN-2 attached to Japan's submission);  and the Notification of the Ministry of Finance No. 26  (Exhibit JPN-6 attached 
to Japan's submission). 
35Japan's submission, para. 26. WT/DS336/16 
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Customs Tariff Law
36, the Cabinet Order Relating to Countervailing Duty37, and the Guidelines for 
Procedures Relating to Countervailing and Anti-Dumping Duties .38  Japan notes that, due to the 
complexity and length of the original investig ation, 18 months would normally be required to 
complete a new investigation, but that, for pur poses of implementation, the JIA would seek to 
complete the entire process within one year.  Sp ecifically, Japan contemplates the following time 
periods: 
(a) 43 days for the acceptance of voluntary submissions of evidence and comments by 
interested parties (due by 13 March 2008); 
(b) 30 days for the preparation and transmission of questionnaires to interested parties 
(based in part on submissions received by 13 March 2008); 
(c) 44-day response period for questionnaires; 
(d) 70 days for "on-the-spot" investigations; 
(e) 120 days for the issuance and communication of "on-the-spot" investigation reports 
prepared for each investigated party;  and an alysis and preparation of the disclosure of 
the JIA's Essential Facts; 
(f) 30 days for commentary on the JIA's Essential Facts; 
(g) 30 days for preparation of the written determination by the JIA (taking due account of 
arguments raised by interested parties).39 
13. Japan contemplates a 45-day period for the final stage of the implementation process.  Japan 
highlights that this stage calls for "government-wide decision making"40 involving various separate, 
additional steps by independent entities.41  For instance, the Minister of Finance must refer 
determinations by the JIA to the Council on Cu stoms, Tariff, Foreign Exchange and other 
Transactions42 (the "Council"), whose function is, inter alia , to examine JIA determinations and 
                                                      
36Supra , footnote 24. 
37Supra , footnote 32. 
38Supra , footnote 34.  
39See Japan's submission, paras. 29-52. 
40Ibid., para. 53. 
41See ibid., para. 57. 
42Article 16 of the Cabinet Order Relating to Countervailing Duty  provides: "The Minister shall, when 
it is deemed necessary as a result of an investigation, ...  to vary or remove countervailing duty ... promptly refer 
the matter to the Customs Tariff Council." ( supra , footnote 32)   The function of this Council is to examine and 
deliberate on important issues related to, inter alia , customs and tariffs, including determinations by JIA, and 
provide an independent opinion to the Minister.  WT/DS336/16 
 Page 7 
 
 
provide an independent determination to the Minist er, before the Minister can take further actions 
necessary for the decision and promulgation by the Cabinet of a Cabinet Order.43  Failing approval by 
the Council, the Minister of Finance is not permitte d to take any further action, but if successfully 
reviewed, a draft Cabinet Order, prepared by the Mi nistry of Finance, will be drawn up and reviewed 
again by the Cabinet Legislation Bureau (the "Bureau") before it is presented to the Cabinet.44  This 
review by the Bureau, similar to those used in the normal law-making process, entails a preliminary 
and final examination stage, is mandatory, and en sures that the proposed Cabinet Order is necessary 
and consistent with all Japanese laws and regula tions.  Japan explains that, to shorten the 
implementation period, the JIA will, if possible, in itiate the Bureau's review of the proposed draft 
Order in parallel with the Council review, but not es that these processes can take place only after the 
investigative process has ended and the final determination actually made.45  Once a Cabinet decision 
is taken, following the Council's approval, the Cabinet Order will then be promulgated upon its 
publication in the Official Gazette and become effective on the date designated in the Order.46 
B. Korea 
14. Korea considers that Japan should be awar ded five months to comply with the 
recommendations and rulings of the DSB, but that if  five months elapses before the Award in this 
case is issued, an additional two weeks should be  granted from the date of the Award.  Korea 
contends that this would be sufficient for Japan  to exercise its available "executive discretion"47 to 
implement the Panel and Appellate  Body findings, which require immediate revocation of the 
measure.48 
15. Korea recalls the relevant findings and conclu sions made by the Panel, as upheld by the 
Appellate Body:  in respect of the debt-restruct uring programme entered into by Hynix and its 
creditors (the "Restructuring") in October 2001, that  Japan acted inconsistently with Article 19.4 of 
the Agreement on Subsidies and Countervailing Measures  (the " SCM Agreement ") by levying 
                                                      
43See Japan's submission, para. 53.  Japan explains that the Council  is an independent body established 
under Articles 6 and 8 of the Law to Establish the Ministry of Finance (Law No. 95 of 1999) (Exhibit JPN-5 
attached to Japan's submission) and the Cabinet Order Relating to Council on Customs, Tariff, Foreign 
Exchange and other Transactions  (Cabinet Order No. 276, 7 June 2000, as amended) (Exhibit JPN-8 attached  
to Japan's submission) and is composed of professors and experts from the private sector with expertise in 
customs and tariffs and other relevant areas. 
44See Japan's submission, para. 54 and footnote 63 thereto.  Article 3(1) of the Law to Establish the 
Cabinet Legislation Bureau (Law No. 252 of 1952, 31 July 1951, as amended) (Exhibit JPN-9 attached to 
Japan's submission) provides that: "The Cabinet Legislatio n Bureau shall perform the following duties:  (1) to 
examine legislative bills, draft Cabinet orders, and draft trea ties, give their opinion thereof, and, report such to 
the Cabinet after adding any necessary revisions thereto."  
45See Japan's submission, para. 55. 
46See ibid., para. 56. 
47Korea's submission, para. 2. 
48See ibid., para. 3. WT/DS336/16 
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countervailing duties in 2006 in excess of the amount of subsidy found to exist
49;  and that the JIA 
acted inconsistently with Articles 1.1(b) and 14 of the SCM Agreement  by determining that the 
December 2002 Restructuring programme confer red a "benefit" on the Korean manufacturing 
company of dynamic random access me mories, Hynix Semiconductor, Inc.50  According to Korea, the 
first finding cannot be remedied since the subsidy no longer existed at the time Japan imposed the 
countervailing duty measures in 2006;  and, as regards the JIA's benefit determination, the programme 
was not countervailable since no "reasonable and objec tive" authority could have made a finding that 
a benefit had been conferred. 
16. Korea recalls that the "promp t compliance" requirement under Article 21.1, as applied to 
Article 21.3 of the DSU, requires, first and foremo st, immediate compliance, and that only where this 
is not practicable should recourse to arbitration be  had in order to determine the "shortest period 
possible within the legal system of the Member".51  Korea also recalls that it is Japan's burden to 
prove that immediate compliance is not possible, and further to explain why 15 months is required for implementation.
52  Korea also highlights previous arb itration awards where it was noted that 
administrative changes, especially those involving administrative decision-making, generally take less 
time than legislative changes.53 
17. Korea submits that, in this case, Japan should implement through immediate withdrawal of 
the countervailing duty measure54 since the violations found by th e Panel and Appellate Body cannot 
be "fixed or explained".55  Korea contends that there is no need for new facts, new arguments, a new 
determination, and a new elaborat e investigation, in the light of the "unambiguous and clear"56 
findings of inconsistency by the Panel and the A ppellate Body;  rather, all that is needed is 
administrative action to revoke the original counter vailing duty measure.  For Korea, "[t]here is no 
legal or equitable basis for Japan to leave the ille gal measure in place while a new investigation is 
initiated and pursued."57  Korea also rejects Japan's reliance on dicta  in the Award of the Arbitrator in 
                                                      
49See Korea's submission, paras. 17-21 (referring to Panel Report,  para. 7.361;  and Appellate Body 
Report, paras. 210 and 212-215). 
50See ibid., paras. 22-25 (referring to Panel Report, para. 7.282;  and Appellate Body Report, 
paras. 163-164). 
51Ibid., para. 34 (referring to, inter alia , Award of the Arbitrator, EC – Hormones , paras. 26 and 28;  
Award of the Arbitrator, Indonesia – Autos , para. 22;  Award of the Arbitrator, Canada – Patent Term , para. 47;  
and Award of the Arbitrator, US – 1916 Act , para. 32). 
52See ibid., paras. 36-37 (referring to Award of the Arbitrator, EC – Export Subsidies on Sugar , 
para. 59). 
53See ibid., paras. 38-40 (referring to Award of the Arbitrator, Canada – Pharmaceutical Patents , 
paras. 49-51;  and Award of the Arbitrator, US – Gambling , para. 35). 
54See ibid., paras. 26-28. 
55Ibid., para. 3. 
56Ibid., para. 59 (referring to Award of the Arbitrator, EC – Chicken Cuts , paras. 57-63). 
57Ibid., para. 28.  WT/DS336/16 
 Page 9 
 
 
EC – Chicken Cuts , which, as Japan contends, establishes that an arbitrator is merely required to 
determine the time for  implementation (as opposed to the type of  implementation).  In that case, the 
European Communities was not awarded time for seek ing advice of the World Customs Organization, 
as this was outside the "unambiguous and clear " ruling of the panel and the Appellate Body.58 
18. Failing immediate revocation, Korea argues that  Japan is nonetheless required to implement 
in the shortest period possible.  Korea refers to Japan's admission that there are implementing 
regulations in place, and argues that all that is required is for Japan to take administrative action.59  
Korea contends, therefore, that Japan simply needs to determine whether the exercise of discretion in 
applying the relevant regulations would "requi re anything beyond a minimal period of time".60  
Further, the burden is on Japan to show that it h as used its discretion to ensure prompt compliance.61  
Korea submits that Japan has not demonstrated that it has exercised all of its available discretion to 
shorten the period of implementation, nor has it explained why it exercised its discretion to "add 
unnecessary, burdensome and delaying steps".62  In response to Japan's re ference to procedural steps 
that form part of Japan's "standard practice", Korea submits that this argument is misplaced, as Japan 
has never before taken implementati on measures in a trade remedy case.  Korea refers to the fact that 
the Minister of Finance "may" (as opposed to "shall ") request the views and arguments of interested 
parties63 in illustration that discretion exists and that  due process requirements, referred to by Japan, 
are not always necessary in conducting investiga tions.  Japan has put the "cart before the horse"64 by 
justifying a de novo  investigation and referring to the protection of due process rights associated with 
it, instead of identifying the proper implementati on process and then choosing the appropriate due 
process requirements.65 
19. Korea refers to Japan's clai m that procedural conventions regarding the conduct of 
investigations constitute "particular circumstances".66  Korea argues that Japan fails to explain the 
                                                      
58See Korea's submission, paras. 57-59 (referring to Award of the Arbitrator, EC – Chicken Cuts , 
paras. 57-63). 
59See ibid., para. 48 (referring to Award of the Arbitrator, US – Oil Country Tubular Goods Sunset 
Reviews , para. 27). 
60Ibid., para. 48. 
61See ibid., para. 49 (referring to Award of the Arbitrator, Canada – Autos , para. 47). 
62Ibid., para. 51 (referring, for instance, to Japan's submission, para. 31).  Korea contends there that 
Japan itself admits that the Cabinet Order does not require a full new investigation with new evidence. 
63See ibid., paras. 50 and 51 (referring to Articles 7(2) and 9(2) of the Cabinet Order Relating to 
Countervailing Duty , supra , footnote 32), which provide respectively that the Minister of Finance "may", if 
deemed necessary request interested parties to present evidence or testif y; and "may", if necessary, request 
interested parties, industrial users and others to pr esent their views in writing that are relevant to the 
investigation). 
64Ibid., para. 54. 
65See ibid.  Further, Korea argues that even the interest ed parties, including Hynix, have stated that 
there is no need for the Japanese government to follow the procedural steps referred to by Japan (referring to the 
submission of Hynix Semiconductor, Inc. to the JIA, dated 13 March 2008, p. 20). 
66See Korea's submission, paras. 44 and 65. WT/DS336/16 
Page 10  
 
"particular circumstances" which hinder prompt compliance.
67  Korea rejects any argument that the 
absence of regulations specifically addressing im plementation of adverse rulings constitutes a 
"particular circumstance" justifying delay;  conve rsely, such an absence of regulations favours 
exercising maximum discretion to achieve prompt compliance.  Korea submits that, since Japan, as a respondent, has never faced an adverse trade remedy ruling before, it would be inappropriate to refer 
to these as "procedural conventions"
68 regarding implementation.  Further, Japan's claim of great 
"technical complexity"69 in this case does not rise to the level of "particular circumstances", bearing in 
mind the fact that the circumstances and fi ndings made in the present case call for quick 
implementation70, and that far more constitutionally comp lex legislation was at issue in other 
Article 21.3(c) arbitrations.71  For Korea, Japan's reference to "p articular circumstances" is an excuse 
to "slow-walk"72 through the process of implementation, whilst maintaining an illegal measure. 
20. Finally, Korea submits that Japan's proposed implementation steps for its de novo  
investigation are "unjustified".73  Japan fails to explain the reason for the delay of over six weeks 
following the adoption of the Panel and A ppellate Body Reports for initiating its de novo  investigation 
(that is, on 30 January 2008), and for taking additional evidentiary steps that are inconsistent with the 
Panel and Appellate Body findings.  Korea requests that these delays be taken into account to shorten 
the time period of the Award.  Korea also doubts that there could be any new relevant evidence 
obtained from questionnaires submitted by 13 March 2008.   It submits that Japan's request for time 
for the distribution of new (and responses to) qu estionnaires and on-site verification should be 
rejected as "totally unreasonable"74, especially in the light of the findings in this case.75  Korea also 
contends that, instead of the 120 days requested for preparation of the verification report and a 
further 30 days for the statement of Essential Facts76, the preparation of the statement of Essential 
Facts could be completed in one week, given th at "all essential facts are known", and since Japan 
must have already studied the Panel and Appellate Body Reports.  Korea submits that completion of 
the JIA determination, which will be largely redu ndant with the Essential Facts, could also be 
achieved in "less than a week".77  Korea also considers "unacceptable"78 the 45 days requested by 
                                                      
67See Korea's submission, para. 63. 
68Ibid., para. 65. 
69Ibid., para. 66 (referring to Japan's submission, para. 13, third bullet). 
70See ibid., para. 66. 
71Ibid., paras. 68-69 (referring to, inter alia , Award of th e Arbitrator, US – Gambling , paras. 44 
and 46-47, where the arb itrator referred to the overlapping federal and state jurisdictions, criminal and civil 
laws, as well as sensitive issues of public morals and order). 
72Ibid., para. 44. 
73Ibid., heading VI.B.3, p. 15. 
74Ibid., para. 76. 
75See ibid., paras. 75-78 (referring to Japan's submission, paras. 31-39). 
76Ibid., para. 79 (referring to Japan's submission, paras. 40-47). 
77Ibid., para. 80 (referring to Japan's submission, paras. 50-52). 
78Ibid., para. 81.  WT/DS336/16 
 Page 11 
 
 
Japan for the Council Review and Cabinet Order pr ocess, and submits that less than 10 days is 
sufficient since the Council can immediately revi ew the DSB's recommenda tions and rulings, and 
since immediate final executive Cabinet action can thereafter be taken.79  In the light of a 25-day 
precedent established by Japan in a previous anti- dumping duty dispute, Korea contends that the 
entire process could be completed by 7 April 2008.80 
21. Korea argues that, through its request for a new investigation, Japan attempts to introduce 
"ex post facto  rationalizations"81, and create an entirely new eviden tiary record for maintaining the 
illegal countervailing duty measure in place.  Korea s uggests that, just as the Appellate Body rejected 
a similar attempt by Japan in the original proceedings82, Japan should not be allowed to "circumvent" 
the rules against allowing ex post facto  rationalizations and the intr oduction of non-record new 
evidence, because, otherwise, the JIA would go on a "fishing expedition" to try to develop "just the 
sort of facts"83 previously rejected by th e Panel and Appellate Body. 
22. In sum, Korea contends that Japan is oblig ated to comply immediately;  that Japan 
fundamentally misunderstands its obligations;  that  Japan has already failed to exercise the necessary 
discretion to accelerate its processes;  that Japan is attempting to take advantag e of its alleged gap in 
administrative provisions as an excuse for unwarranted delay;  that there is no administrative practice 
for Japan to rely on as an excuse;  that Japan has failed to establish "particular circumstances";  that 
Japan's proposal fails to exercise all available execu tive discretion;  and, that Japan has no right to 
continue to impose illegal duties while it initiates a wholly new investigation.84  For these reasons, 
Korea believes that five months from the date of adoption is a reasonable period of time for Japan's 
implementation of the DSB's recommendations and rulings. 
                                                      
79See Korea's submission, para. 81 (referring to Japan's submission, paras. 53-57). 
80Ibid., para. 82 (referring to an anti-dumping investigation of Certain Polyester Staple Fibre Yarn  
from Korea and Chinese Taipei ).  In that case, Japan took only 25 days from comments on Essential Facts to 
final approval by the Japanese Cabinet. 
81Ibid., para. 85. 
82Ibid., paras. 84-86 (referring to Appellate Body Report, para. 159).  See also Appellate Body Report, 
US – Countervailing Duty Investigation on DRAMS , para. 175. 
83Ibid., para. 87. 
84See ibid., para. 8. WT/DS336/16 
Page 12  
 
III. Reasonable Period of Time 
A. Scope of the Arbitrator's Mandate under Article 21.3(c) of the DSU 
23. The Panel and Appellate Body Reports
85 in this dispute were adopted by the DSB on 
17 December 2007.  On 15 January 2008, Japan inform ed the DSB of its intention to comply with the 
DSB's recommendations and rulings, but stated that it would need a reasonable period of time in 
which to do so.86  As discussions between the parties failed to produce a mutually agreed period of 
time, the parties asked me to act as Arbitrator to determine the "reasonable period of time" for Japan to implement the recommendations and rulings of th e DSB, pursuant to Article 21.3(c) of the DSU. 
24. Article 21.3 of the DSU provides, in relevant part: 
If it is impracticable to co mply immediately with the 
recommendations and rulings [of the DSB], the Member concerned shall have a reasonable period of time in which to do so.  The reasonable period of time shall be: 
... 
(c) a period of time determined through binding arbitration 
within 90 days after the date of adoption of the 
recommendations and rulings.  In such arbitration, a guideline for the arbitrator should be that the reasonable period of time to implement panel or Appe llate Body recommendations 
should not exceed 15 months from the date of adoption of a 
panel or Appellate Body report.  However, that time may be 
shorter or longer, depe nding upon the particular 
circumstances.  (footnotes omitted) 
25. It is well accepted that my remit as Arbitrator in these Article 21.3(c) proceedings is 
limited
 87:  it consists of determining what constitutes a "reasonable period of time" to implement the 
recommendations and rulings made by the DSB in th e underlying WTO dispute.  At the oral hearing 
in this arbitration, both Japan and Korea accepted th at the principles articulated in the most recent 
arbitration award, EC – Chicken Cuts , should guide me in executing my mandate.  Those principles 
include the following: 
                                                      
85Panel Report, WT/DS336/R;  Appellate Body Report, WT/DS336/AB/R. 
86See WT/DSB/M/244, para. 15. 
87See, for instance, Awar d of the Arbitrator, EC – Chicken Cuts , para. 49;  and Award of the Arbitrator, 
Canada – Pharmaceutical Patents , para. 44.  WT/DS336/16 
 Page 13 
 
 
• that an implementing Member has a measure of discretion in selecting the means of 
implementation that it deems most appropriate88; 
• that an arbitrator should base his or her determination on the shortest period of time 
permissible within the legal system of the implementing Member89; 
• that an arbitrator should bear in mind that the implementing Member is expected to use 
whatever flexibility is available within its le gal system in its efforts to fulfil its WTO 
obligations.90  Such flexibility, however, need not necessarily include recourse to 
"extraordinary" procedures91;  and 
• that the "particular circumstances" of a dispute may affect the calculation of the 
reasonable period of time, making it "shorter or longer".92 
26. Whilst my task is to determine by when an implementing Member must comply, to do so 
requires that some consideration be given to the means of implementation  chosen by the implementing 
Member.  As one arbitrator has explained: "[t]ur ning to the question of what would constitute the 
'reasonable period of time' for implementation in this case, I need to look first at the type of measure 
proposed to be used for implementation."93  In other words, to determine when  a Member must 
comply, it may be necessary to consider how a Member proposes to do so.  
27. An implementing Member has a discretion in choo sing the means of implementation, but this 
discretion is not unlimited94;  the method chosen must be co nsistent with a Member's WTO 
obligations.95  In that vein, even though Korea and Japan  advance different arguments as to the means 
of implementation that could be taken in this case, they accept as a general premise that "an 
                                                      
88See Award of the Arbitrator, EC – Chicken Cuts , para. 49 (referring to Award of the Arbitrator,  
Canada – Pharmaceutical Patents , paras. 41-43;  Award of the Arbitrator,  Chile – Price Band System , para. 32;  
Award of the Arbitrator,  EC – Tariff Preferences , para. 30;  Award of the Arbitrator,  US – Oil Country Tubular 
Goods Sunset Reviews , para. 26;  Award of the Arbitrator, US – Gambling , para. 33;  and Award of the 
Arbitrator, EC – Export Subsidies on Sugar , para. 69). 
89See Award of the Arbitrator, EC – Chicken Cuts , para. 49 (referring to Award of the Arbitrator, 
Chile – Price Band System , para. 34;  Award of the Arbitrator, Canada – Pharmaceutical Patents , para. 47;  
Award of the Arbitrator, EC – Tariff Preferences , para. 26;  Award of the Arbitrator, US – Oil Country Tubular 
Goods Sunset Reviews , para. 25;  and Award of the Arbitrator, EC – Export Subsidies on Sugar , para. 61). 
90See Award of the Arbitrator, EC – Chicken Cuts , para. 49 (referring to Award of the Arbitrator, 
Chile – Price Band System , para. 39;  Award of the Arbitrator, EC – Tariff Preferences , para. 36;  and Award of 
the Arbitrator, US – Offset Act (Byrd Amendment ), para. 64).  
91Award of the Arbitrator, EC – Chicken Cuts , para. 49 (referring to Award of the Arbitrator, Korea – 
Alcoholic Beverages , para. 42;  Award of the Arbitrator, Chile – Price Band System , para. 51;  and Award of the 
Arbitrator, US – Offset Act (Byrd Amendment) , para. 74). 
92Award of the Arbitrator, EC – Chicken Cuts , para. 49. 
93Award of the Arbitrator, US – 1916 Act , para. 34. 
94See Award of the Arbitrator, EC – Export Subsidies on Sugar , para. 69;  and Award of the Arbitrator, 
EC – Chicken Cuts , para. 56. 
95See Award of the Arbitrator, EC – Export Subsidies on Sugar , para. 69. WT/DS336/16 
Page 14  
 
implementing Member ... has a measure of discretion in choosing the means  of implementation, as 
long as the means chosen are consistent with the recommendations and rulings of the DSB and with 
the covered agreements ".
96  In assessing whether the means chosen by the Member is consistent with 
the recommendations and rulings of the DSB, I must  consider whether the implementing action falls 
within the range of permissible actions that can be taken in order to implement the DSB's 
recommendations and rulings.97  This does not mean that I am pe rmitted to determin e the consistency 
with WTO law of the measure taken to comply.  This can only be judged in Article 21.5 proceedings.  
Article 21.3(c) arbitrations are distinct and concern by when  implementation must take place.  In 
making this determination, the means of implemen tation available to the Member concerned is a 
relevant consideration.   
28. Finally, I am guided by previous arbitrators'  awards which place the overall burden of proof 
on the implementing Member to prove that, if it cont ends that immediate compliance is impracticable, 
the period of time proposed constitutes a "reasonable period of time".98  This burden was accepted by 
Japan at the oral hearing in this case.   
B. Factors Affecting the Determination of the Reasonable Period of Time 
1. Choice of Means of Implementation in the Light of the DSB's 
Recommendations and Rulings  
29. The dispute in this case involves a challenge by Korea regarding a countervailing duty 
investigation conducted by the JIA on dynamic random  access memories manufactured by the Korean 
company, Hynix Semiconductor, Inc.  The critical  issue in the case was whether the JIA properly 
found that Hynix had received count ervailable subsidies, within the meaning of Part V of the SCM 
Agreement , as a result of two debt-restructuring programme s entered into by Hynix and its creditors in 
October 2001 and December 2002. 
30. For the purposes of this Article 21.3(c) arbitra tion, I refer to the relevant findings of the 
Appellate Body, namely, that it: 
                                                      
96Award of the Arbitrator, EC – Hormones , para. 38. (emphasis added)  See also Award of the 
Arbitrator, EC – Chicken Cuts , para. 56. 
97I find support for my interpretation in the wording of the provisions of Article 21 of the DSU.  
According to Article 21.1, "prompt compliance with the  recommendations and rulings of the DSB is essential" 
(emphasis added);  Article 21.3 provides that "[i]f it is impracticable to comply immediately with the 
recommendations and rulings ", the Member shall have a reasonable period of time to do so (emphasis added);  
and Article 21.3(c) states that the "reasonable period of time to implement that panel and Appellate Body recommendations should not exceed 15 months ... " (emphasis added). 
98See Award of the Arbitration, Canada – Pharmaceutical Patents , para. 47;  Award of the Arbitrator, 
US – 1916 Act , para. 33.  WT/DS336/16 
 Page 15 
 
 
• upheld the Panel's findings, in paragraphs 7.282  and 8.2(b) of the Panel Report, that the 
JIA acted inconsistently with Articles 1.1(b) and 14 of the SCM Agreement  by 
determining that the December 2002 Restructuring conferred a "benefit" on Hynix; 
• upheld, albeit for different reasons, the Panel' s findings, in paragraphs 7.316 and 8.2(c) 
of the Panel Report, that the JIA calculate d the amount of benefit conferred on Hynix 
by the October 2001 and December 2002 R estructurings inconsistently with 
Articles 1.1(b) and 14 of the SCM Agreement ;  and 
• upheld the Panel's finding, in paragraphs 7. 361 and 8.2(e) of the Panel Report, that 
Japan acted inconsistently with Article 19.4 of the SCM Agreement  by levying 
countervailing duties on imports which the JIA itself had found were not subsidized at 
the time of duty imposition [with respect to the October 2001 Restructuring].99 
31. Based on these and other findings, the Appellate  Body "recommend[ed] that the DSB request 
Japan to bring its measure, found in [its] Report, a nd in the Panel Report as modified by [its] Report, 
to be inconsistent with the SCM Agreement , into conformity with its obligations under that 
Agreement."100 
32. Japan requests a period of 15 months to bring its m easure into conformity in this case.  Korea, 
on the other hand, argues that a period of only 5 m onths is required for pur poses of implementation, 
and that if these arbitration proceedings extend beyond that period of time, I should grant Japan a 
further two weeks from the date of the arbitration award to implement. 
33. In its written submission, Korea argues that only  two of the Appellate Body findings referred 
to above are "relevant"101 for purposes of this arbitration.  First, the finding that the JIA had allocated 
the useful life of a non-recurring subsidy provided in October 2001 to the years 2001 to 2005, but had 
inconsistently levied countervailing duties in 2006 (the "allocation finding") (referred to at 
paragraph 8, third bullet, above)102;  and secondly, the finding that the JIA had determined that a 
benefit had been conferred as a result of the Dece mber 2002 Restructuring in a manner inconsistent 
with the requirements of Articles 1.1(b) and 14 of the SCM Agreement  (referred to at paragraph 8, 
first bullet, above).103  Korea also contends that, given their "unambiguous and clear" nature104, the 
                                                      
99Appellate Body Report, para. 280(b), (c), and (e), respectively. 
100Ibid., para. 281. 
101Korea's submission, para. 16. 
102Ibid., paras. 17-21. 
103Ibid., paras. 22-25. 
104Ibid., para. 59 (referring to Award of the Arbitrator, EC – Chicken Cuts , paras. 57-63). WT/DS336/16 
Page 16  
 
Appellate Body findings made with respect to th ese aspects of the JIA's determination require that 
Japan implement by withdrawing the countervailing duties.
105   
34. At the oral hearing, Korea explained that, with regard to the "allocation finding" made in 
respect of the October 2001 Restructuring, Japan had made a determination that the useful life of the 
non-recurring subsidy ended in 2005 and that Japan, therefore, could not legally impose a 
countervailing duty measure with respect to the subsidies resulting from the October 2001 
Restructuring.  As regards the second finding, in Korea's view, the Appellate Body found that, "on 
substance", the Panel had conducted an objective appraisal of the JIA's determination regarding the 
Deutsche Bank Report (on which the JIA relied to make a finding that four of Hynix's financial 
creditors did not enter into the December 2002 R estructuring with Hynix on commercially reasonable 
terms), and confirmed the finding of the Panel that the JIA had acted inconsistently with 
Articles 1.1(b) and 14 of the SCM Agreement  by finding that a benefit had been conferred by the 
December 2002 Restructuring.  Korea explained that, since the existence of a benefit is indispensable 
in proving that a subsidy has been granted under the SCM Agreement , Japan has no legal basis to 
maintain the countervailing duty with regard  to the December 2002 Restructuring.  
35. Korea highlights that "prompt compliance" is required under Article 21.1 of the DSU;  and 
that this principle informs Article 21.3 of the DS U.  Where compliance is not "immediate" because it 
is judged impracticable106, it should nonetheless be achieved in the shortest period of time possible.107  
Korea contends that Japan bears the burden of prov ing that anything beyond "immediate" compliance 
is required to implement the DSB's recommendations and rulings in this case.108 
36. In addition to the two Appellate Body findings re ferred to by Korea, Japan considers relevant, 
as well, the finding of the Appellate Body that the JIA calculated the amount  of benefit conferred by 
both Restructurings in a manner inconsiste nt with Articles 1.1(b) and 14 of the SCM Agreement 
(referred to at paragra ph 8, second bullet, above).109  According to Japan, all three findings are 
capable of being remedied through the implemen ting action it proposes for complying with the DSB's 
                                                      
105Korea's submission, paras. 28, 45, and 62. 
106At the oral hearing, Korea explained that a period of five months was selected out of deference to 
these arbitration proceedings , as it represented the shortest possible time for revoking the countervailing duty 
order, taking into account the time taken from adoption of the Appellate Body and Panel Reports, as well as these proceedings. 
107Korea's submission, para. 34 (referring to Award of the Arbitrator, EC – Hormones , paras. 26 
and 38);  see also para. 46. 
108Ibid., para. 37. 
109For Korea, this additional finding does not affect  its argument that imme diate compliance through 
revocation is the only way to implement in this case.  WT/DS336/16 
 Page 17 
 
 
recommendations and rulings.  In th is regard, as I explain below110, Japan contends that replacement 
of the Cabinet Order authorizing the imposition of the original countervailing duty order—which was 
the subject of the underlying dispute—by a new Cabinet Order is requi red under its laws and 
regulations to implement the DSB's recommendations  and rulings.  This new Cabinet Order may only 
be issued following an "investigation" conducted in  conformity with various procedural requirements 
specified under Japan's laws and regula tions (comprising the Customs Tariff Law111;  the Cabinet 
Order Relating to Countervailing Duty112;  and the Guidelines for Procedures Relating to 
Countervailing and Anti-Dumping Duties113).  Japan further rejects Korea's argument that the nature 
of the Appellate Body's findings precludes modifi cation of the countervailing duty order through an 
investigation.  Japan notes that the Appellate B ody's "allocation finding" was based on an "implicit" 
finding that the benefit had expired after a period of five years, ending in 2005114;  and that both 
findings made with regard to the issue of "benefit"  suggest that the JIA erred in the grounds selected 
and explanations provided in making these determinations.115  Contrary to Korea's arguments, Japan 
contends that the nature of the specific findings of  the Appellate Body require a new investigation to 
supplement the current factual record, as well as a re-exa mination of that factual record, in the light of 
the DSB's recommendations and rulings.116 
37. In considering the parties' arguments as rega rds the permissible means of implementation,  
I recall that a Member whose measure has been found to be inconsistent with the covered agreements 
may generally choose between two courses of action:  withdrawal of the measure;  or modification of 
the measure by remedial action.117  While withdrawal may be the preferred option to secure "prompt 
compliance", a Member may, where withdrawal is  deemed impracticable, choose to modify the 
measure, provided that this is done in the short est time possible, and that such modification is 
permissible under the DSB's recommendations and rulings. 
                                                      
110See infra , paras. 41 and 42. 
111See supra , footnote 24. 
112See supra , footnote 32. 
113See supra , footnote 34. 
114At the oral hearing, Japan referred to Appellate Body Report, para. 214. 
115At the oral hearing, Japan referred to Appellate Body Report, para. 163, where the Appellate Body 
recalled with approval the Panel's finding that "an objec tive and impartial investigating authority could not have 
rejected the Deutsche Bank Report on the grounds selected  by the JIA".  Japan also referred to the Appellate 
Body's statement regarding the calculation of the amount of benefit conferred, in which the Appellate Body 
noted that "the JIA did not sufficiently  explain, in its determin ation, how it reached the conclusion that the value 
of [Hynix's shares] was zero from the pe rspective of Hynix, the recipient." ( Ibid., para. 178) 
116For instance, Japan explained at the oral hearing that, as regards the finding on the Deutsche Bank 
Report, the JIA needed to conduct a review and reconsider the "grounds selected" by the JIA. 
117See for instance, Awar d of the Arbitrator, US – Offset Act (Byrd Amendment) , para. 50. WT/DS336/16 
Page 18  
 
38. The Appellate Body has said, in US – Oil Country Tubular Goods Sunset Reviews 
(Article 21.5 – Argentina) , that a Member's right to implement extends to conducting a re-
determination relating to the initial pe riod of investigation, and that this right does not exclude having 
recourse to new facts.
118  However, as Japan accepted at the oral  hearing, any investigation should not 
amount to a de novo  review by the JIA;  and any new evidence must be confined to the period 
examined in the original countervailing duty investigation.119  Within these parameters, Japan may 
choose to modify its determination based on the facts on record.  It may also seek to gather additional 
facts relating to the initial investigation period to the extent, and only to the extent, that this is 
necessary to, and capable of, bringing the inconsiste nt elements of its original determination into 
compliance. 
39. There are very real concerns as to how far the findings by the Appellate Body, as adopted by 
the DSB, lend themselves to remedial action through  the new investigation proposed by Japan.  In 
particular, as regards the "allocation finding", the s ubsidy was found to have been exhausted by 2005, 
and I find it difficult to conceive of new informati on that would allow the JIA to remedy this finding, 
short of withdrawal of the counter vailing duty relating to the October 2001 Restructuring.  Nor is this 
less so because the "allocation finding" is "implicit".  However, in this case, I cannot say that all the 
recommendations and rulings of the DSB are not ca pable of implementation by modification;  and 
hence I must make a determination as to the reas onable period of time that would facilitate such 
modifications.  My questioning of Japan concerning the scope of the new evidence that it considered 
necessary, and which the JIA could reasonably be expect ed to gather, did not yield clear or conclusive 
answers.  However,  I am not re quired to be certain that Japan will actually be able to collect 
information which it contends to be necessary;  rath er, such considerations will inform my assessment 
of what period of time is reasonable for Japan to modify its measure.   
2. The Specific Steps of Implementation  
40. I turn now to consider what, in the light of the specific steps proposed by Japan, would 
constitute a "reasonable period of time" within wh ich Japan could bring into compliance, through 
modification, its measure found to be inconsistent with th e relevant provisions of the SCM Agreement .  
As mentioned above, the burden rests on Japan to prove  that the period of 15 months that it requests 
constitutes such a "reasonable period of time". 
41. Japan asserts that the only way under its law to modify a countervailing duty order that has 
been found to be inconsistent with the SCM Agreement is through replacement of the Cabinet Order 
                                                      
118See Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – 
Argentina) , para. 173.   
119See for instance, Appellate Body Report , US – Cotton Yarn, paras. 76-79.  WT/DS336/16 
 Page 19 
 
 
authorizing the original countervailing duty order, by  a new Cabinet Order.  To do so, Japan explains 
that the Japanese government must conduct a new inv estigation pursuant to Article 7(17) of Japan's 
Customs Tariff Law.  According to that provision, "[w]here there are some changes in circumstances 
with regard to the specified product ... the Governme nt may, if it is found to be necessary, as may be 
prescribed in a Cabinet Order, modify or abolish" the original countervailing duty.120  Japan contends 
that this provision must be read in conjunction with Article 7(19) of the Customs Tariff Law,  which 
empowers the Japanese government to initiate, if it is found to be necessary, an investigation as to 
whether these "changes in circumstances" exist.  
42. Following questioning at the oral hearing, I accep t Japan's submission that an investigation, 
conducted pursuant to the aforem entioned provisions of the Customs Tariff Law, constitutes the only 
way to modify an original countervailing duty orde r found by the DSB to be inconsistent with the 
SCM Agreement121, without having recourse to "extraordinary" means, which, in any event, Japan is 
not expected to do for purposes of implementation.122  Japan conceded, at the oral hearing, that the 
existence  of the "change in circumstances", as contem plated under Article 7(19), is evident on the 
facts of this case, as it arises from the DSB's recommendations and rulings and does not require a 
separate enquiry or investigation.  However, Japan explained that a cumulative reading of 
Articles 7(17) and 7(19) leads to the conclusion th at an investigation is required to ascertain the 
manner  in which the original countervaili ng duty order should be modified.  
43. I therefore focus my attention on the step s proposed by Japan in conducting such an 
investigation.  Japan contends that I should allo cate a period of approximately 13 months and 15 days 
(out of the 15-month period requested) for the JIA's inv estigation.   This investigation, Japan alleges, 
requires a preparatory phase of 45 days that has already been completed.123  Japan contends that the 
actual investigatory phase will take one year, and involves:  the acceptance of submissions from 
interested parties;  the issuance and collection of  questionnaires to interested parties based on these 
submissions124;  on-the-spot investigations conducted by th e JIA;  the issuance of reports based on 
these on-the-spot investigations;  the writing up of  the Essential Facts by the JIA and provision for 
                                                      
120Supra , footnote 24. 
121At the oral hearing, I inquired into the releva nce of Article 98(2) of Japan's Constitution (which 
provides that: "The treaties concluded by Japan and estab lished laws of nations shall be faithfully observed");  
as well as Article 7(33) of the Customs Tariff Law which provides that: "In addition to the matters as provided 
for in each preceding paragraph, any necessary matter s on the application of countervailing duty shall be 
prescribed by a Cabinet Order". (See supra , footnote 24) 
122See for instance, Awar d of the Arbitrator, EC – Chicken Cuts , para. 49;  Award of the Arbitrator, 
Korea – Alcoholic Beverages , para. 42;  Award of the Arbitrator, Chile – Price Band System , para. 51;  Award 
of the Arbitrator, US – Offset Act (Byrd Amendment) , para. 74.  
123See supra , para. 11. 
124At the oral hearing, Japan explained that it wa s in the process of pr eparing and transmitting 
questionnaires based on comments it had received so far fr om interested parties that had voluntarily submitted 
evidence and comments after having been informed of the initiation of an investigation. WT/DS336/16 
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commentary by interested parties;  and the preparation of the final written determination by the JIA to 
be reviewed by the Council  and Bureau before presentation to, and decision-making by, the Cabinet in 
the final phase of implementation.
125 
44. Japan explains that it does not intend to conduct a de novo  investigation in the sense of re-
doing all aspects of the investigation126, but that I should give due consideration to the fact that the 
predominant part of the evidence from the or iginal investigation has to be reviewed127 and that there is 
a chance that additional evidence co llected may interact in a new way with the existing evidence on 
record.128  Having regard to the requirements of promptn ess stipulated in Article 21.3 and in previous 
awards, Japan notes that the timeframes it has indicat ed for each of the various stages of the proposed 
"change of circumstances" investigation have been shortened from the original investigation, which in 
its entirety lasted 18 months.129 
45. Finally, Japan contends that I should take into  account as a "particular circumstance" of this 
case the due process rights of interested parties.  Japan submits that interested parties play an 
important role in providing and verifying inform ation, and respect for their rights by Japan has 
become a "standard practice" in Jap an's trade remedy investigations.130  Out of deference to these 
rights, the JIA must carry out all of the steps that are normally followed in original investigations, and 
it has no discretion to omit such procedural steps.131 
46. In response to these arguments, Korea stat es that, "even if it could go along with"132 Japan's 
contention that an investigation is in principle requi red, the time indicated by Japan in its submission 
is unjustified133 and should be expedited.  For Korea, a period of no more than five months would 
allow Japan to utilize fully its administrative di scretion and comply with the recommendations and 
rulings of the DSB in this case.  Korea further highlig hts that the procedural ru les referred to by Japan 
that govern the conduct of investig ations do not establish mandatory timeframes for the preparatory or 
investigatory steps requested by Japan134, a point conceded by Japan at th e oral hearing.  For Korea,  
                                                      
125See supra , paras. 12 and 13. 
126Japan explained at the oral hearing that it did not intend to conduct a full investigation (for instance, 
it would not engage in a causation and injury analysis).  Japan contends that 80 per cent of the evidence on 
record has to be reviewed. 
127Japan's statement at the oral hearing. 
128See Japan's submission, para. 21. 
129See ibid., para. 28. 
130See ibid., para. 17. 
131See ibid., paras. 19 and 27. 
132Korea's statement at the oral hearing. 
133See Korea's submission, Section 3, p. 15. 
134See ibid., paras. 70-83.  WT/DS336/16 
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it is also far from clear that all the procedural steps  proposed by Japan are mandatory under Japanese 
law for the protection of due process rights of interested parties.135 
47. I recall the requirement for promptness under Artic le 21.3, and the imperative to implement in 
the shortest time possible in the light of a Member's legal system.  Previous arbitrators have explained that, compared to the other types of action generally taken to implement, such as legislative action or 
administrative rule-making, administrative action sh ould be less time-consuming, and may not require 
the full 15-month guideline mentioned in Article 21.3(c).
136  Although Japan is hesitant to characterize 
its proposed action as one involving a purely "adm inistrative action", I would be inclined to 
characterize it as such since no change of laws or  subordinate legislation is required.  However, 
nothing turns upon making a conclusive characteriza tion, since, on Japan's own account of the legal 
process that is required to effect the modification of its measure, there is no legal impediment to using 
a shorter period to consider the limited number of DSB rulings of inconsistency.  Further, prior 
awards have emphasized that an implementing Memb er is required to take full advantage of the 
flexibility inherent in its legal system in order to  ensure that implementation takes place in accordance 
with the requirement for promptness in Article 21 of  the DSU.  The existence of this flexibility may 
manifest itself in, for instance, th e absence of mandatory steps to be  taken under that Member's laws 
and regulations in carrying out the proposed implementation;  or similarly, in the absence of mandatory time periods within which such steps must be taken.
137 
48. Not all of the investigatory steps, or the time frames for these steps, appear to be mandatory.138  
In my view, the flexibility in Japan's legal structur e speaks in favour of a shorter period of time than 
that requested by Japan.  Japan a ppears to justify the time-limits i ndicated in its submissions on its 
practice and experience in original  investigations.  In my view, reliance on time periods used in 
original investigations is inappr opriate, because Japan is only requir ed to conduct a re-determination 
                                                      
135See Korea's submission, paras. 50 and 51.  Korea refers to Articles 7(2) and 9(2) of the Cabinet 
Order , which states that the Minister of Finance " may, if deemed to be necessa ry in the course of the 
investigation, request interested parties to present evidence or testify", and " may, if necessary, in the course of 
investigation, request interested parties, industrial users of such products under investigation or representative consumer-organizations of such product  to present their view in writing whic h are relevant to the investigation". 
(Supra , footnote 32 (emphasis added)) 
136See for instance, Award  of the Arbitrator, Australia – Salmon,  para. 38 (quoting Award of the 
Arbitrator, EC – Hormones , para. 25: "when implementation can be effected by administrative means, the 
reasonable period of time should be 'considerably shorter than 15 months'"). 
137See for instance, Award of the Arbitrator, US – 1916 Act , para. 39;  Award of the Arbitrator, EC – 
Tariff Preferences , para. 36;  Award of the Arbitrator, EC – Export Subsidies on Sugar , paras. 76;  and Award of 
the Arbitrator, EC – Chicken Cuts , paras. 79-80. 
138At the oral hearing, Japan explained that, although not all of the steps are mandatory, certain others 
are, such as the initiation of an investigation and the pr eparatory phase.  Further, once interested parties have 
submitted information, it is necessary to issue questionna ires, conduct the necessary "on-the-spot" verifications, 
and, finally, prepare the final written submission.  I do not doubt, therefore, that certai n steps taken by the JIA in 
conducting an investigation, even if themselves not ma ndatory, nevertheless require follow-up action by the JIA 
in order to ensure that information, albeit voluntar ily submitted by interested parties, is verified. WT/DS336/16 
Page 22  
 
to implement a limited number of DSB rulings of inc onsistency.  Further, the exigency of promptness 
requires that Japan utilize the flexibility in its lega l system when making a re-determination in order 
to implement.  Japan has not show n, for instance, that its current regulatory structure prevents it from 
acting with greater expedition, especially in respect of the non-mandatory steps and timeframes.  Further, as explained above, given the limited range of findings to be implemen ted, the nature of the 
Appellate Body's findings, as well as the comprehensive, existing factual record
139, it does not appear 
to me that a replication of a complete investigation, with similar time periods for each stage of the 
investigation, is justified.  In fact, allowing Japan as much time as it requests could raise the risk that 
an investigatory process might involve elements of de novo  review, which is not the type of action 
permitted in the process of making a re-determination. 
49. I acknowledge Japan's reference to awards of arb itrators in which it was stated that, even if 
some steps and time periods are not required by la w, they can nonetheless be utilized in order to 
ensure that implementation is effected in a tran sparent and efficient manner, fully respecting due 
process for all parties involved.140  Here, Japan justifies its referenc e to numerous investigatory steps, 
as well as time periods associated with these steps, on what it has termed its "standard practice" of 
respecting the due process rights of interested parties.  The arbitrator in EC – Chicken Cuts  recognized 
that, even if certain timeframes and procedures were not mandated, they were based on "standard 
practice", which the European Communities in that case had substantiated with evidence.141 
50. The case before me is somewhat different.  Japan has not shown the existence of any 
"standard practice" with respect to due process ri ghts in investigations conducted for implementation 
purposes, since, by Japan's own admission, it h as never had to implement DSB recommendations and 
rulings in a trade remedy dispute.  As I have already explained above, Japan's reliance on "standard 
practice" followed in original investigations is not  comparable, nor appropriate, in the light of the 
difference in the nature and scope of an inves tigation that may prove necessary in the process of 
modifying a determination for implementation purposes. 
51. Nor has Japan explained sufficiently the specific investigatory steps that require the input and 
participation of interested parties to justify protract ed time periods in order to ensure their due process 
rights, as opposed to the steps the JIA itself is requir ed to take in the exer cise of its own duties.  
Further, due process is a flexible concept to be applied to the specific requirements of the case—in 
this case, the process of implementing DSB rulings.  A balance must be struck between respecting due 
                                                      
139Japan itself admits that the underlying determination at issue resulted from the JIA's consideration of 
over 2000 pieces of evidence and a report that spanned over 500 pages. (See Japan's submission, para. 21) 
140See, for instance, Award  of the Arbitrator, US – Oil Country Tubula r Goods Sunset Reviews , 
para. 51. 
141Award of the Arbitrator, EC – Chicken Cuts , para. 79.  WT/DS336/16 
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process rights of interested parties and the prompt ness required in implementation.  In determining 
that balance, I note that considerable opportunity was already afforded to interested parties to 
participate in the original investigation conducted by the JIA.  It seems then that it would be 
appropriate to provide a shorter time to such interested  parties in the context of an investigation that is 
far more limited in scope, and which has been initiated to implement DSB recommendations and 
rulings. 
52. With regard to the final stage of implementa tion referred to by Japan—that is, the separate 
reviews by the Council and the Bureau, followed by decision-making by the Cabinet142—I recognize 
that these stages are mandatory un der Japanese law in order for a countervailing duty order to take 
effect and enter into force.143  I note as well that there are no specified time-limits in Japan's 
legislation for the steps in this process, and that Japan requests a period of 45 days for completion of 
this final stage.  Japan has not explained how ex actly it has allocated the time between the three 
independent processes that must take place at this stage.  Korea has argued that the timeframe for 
review by the Council and Bureau  should be shortened in the light of the "clear"144 DSB 
recommendations and rulings which were adopted in mid-December 2007.  I also note Korea's 
reference to a precedent involving an anti-dumping dut y original investigation, where the time taken 
from commentary on the Essential Facts to final a pproval by the Japanese Cabinet took 25 days, 
rather than the 75 days requested by Japan.145  Even though that case might represent an 
"extraordinary" instance of an accelerated procedure,  and recourse to such extraordinary procedures is 
not required for purposes of implementation146, the existence of such precedent nevertheless 
demonstrates that this process can be expedited. 
IV. Award 
53. Before concluding, I recall that Japan explained that, at the time of the oral hearing, the JIA 
had received submissions from interested parties a nd was in the process of preparing and distributing 
questionnaires to interested parties.  Japan also  noted that, as a result of these submissions from 
interested parties, it had collected certain additi onal pieces of evidence.  Based on my analysis above, 
and in the light of the limited number of DSB rulings  of inconsistency, the steps required to complete 
the investigation need not entail extensive further investigation. 
                                                      
142See supra , para. 13. 
143Japan's submission, paras. 53-56 (referring to, inter alia , Articles 13 and 16 of the Cabinet Order , 
supra , footnote 32).  See also Article 3(1) of the Law to Establish the Cabinet Legislation Bureau, supra , 
footnote 44. 
144See Korea's submission, paras. 5 and 59. 
145See ibid., para. 82 (referring to the anti-dumping investigation of Certain Polyester Staple Fibre 
Yarn from Korea and Chinese Taipei ). 
146See for instance, Awar d of the Arbitrator, EC – Chicken Cuts , para. 56. WT/DS336/16 
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54. As approximately four months and three week s will have elapsed from the adoption of the 
Panel and Appellate Body Reports by the time of circulation of this Award, and considering the 
further steps referred to by Japan—completion of its investigation, and review of the determination by 
the Council and Bureau before final decision-making by the Cabinet—I consider that a further four 
months is sufficient for Japan to complete implemen tation in this case, given the appropriate scope of 
what requires consideration by the JIA. 
55. I therefore determine that the "reasonable period of time" for Japan to implement the 
recommendations and rulings of the DSB in this  dispute is eight months and two weeks from 
17 December 2007, which was the date on which th e DSB adopted the Panel and Appellate Body 
Reports.  The reasonable period of time w ill therefore expire on 1 September 2008. 
 
 
Signed in the original at Geneva this 18th day of April 2008 by: 
 
 
   
________________________ 
David Unterhalter 
Arbitrator