WT/DS299/R 
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ANNEX E 
  
REQUEST FOR THE ESTABLISHMENT 
OF A PANEL 
 
 
Contents Page 
Annex E-1 Request for the Establishment of a Panel – Document WT/DS299/2 E-2 
 WT/DS299/R 
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ANNEX E-1 
 
 
REQUEST FOR THE ESTABLISHMENT 
OF A PANEL  
 
 
 WORLD TRADE  
ORGANIZATION  WT/DS299/2 
21 November 2003 
 
 (03-6240) 
 Original:   English 
 
  
EUROPEAN COMMUNITIES – COUNTERVAILING MEASURES 
ON DYNAMIC RANDOM ACCESS MEMORY CHIPS FROM KOREA 
 
Request for the Establishment of a Panel by Korea
 
   The following communication, dated 19 November 2003, from the Delegation of Korea to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU. 
 
_______________ 
 
  On 24 April 2003, the European Communities ("EC") imposed provisional countervailing 
duties on imports of Dynamic Random Access Me mories ("DRAMS") from Ko rea, as announced in 
Commission Regulation No. 708/2003 published in the Official Journal  (OJ L 102, 24.4.2003).  The 
European Commission submitted to the Council of the European Union ("Eu ropean Council") its 
proposal for imposition of definitive countervailing duties on 24 July 2003, which was adopted by the 
European Council on 11 August 2003.  On 22 Augus t 2003, the EC imposed definitive countervailing 
duties on imports of DRAMS originating in Ko rea, as announced in Council Regulation (EC) 
No 1480/2003 Imposing A Definitive Countervailing Du ty and Collecting Definitely The Provisional 
Duty Imposed On Imports Of Certain Electr onic Microcircuits Known As DRAMS (Dynamic 
Random Access Memories) Originating In the Re public of Korea (OJ L 212, 22.8.2003).   
  The Government of Korea considers the provisional and definitive countervailing duties 
imposed by the EC against DRAMS from Korea to be inconsistent with the EC 's obligations under the 
relevant provisions of the GATT 1994, and the Agreement on Subsidies and Countervailing Measures 
("SCM Agreement").  As a result, the Government  of Korea requested consultations with the EC 
regarding these measures pursuant to Article 4 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes ("DSU"), Arti cle 30 of the SCM Agreement, and Article XXII 
of the GATT 1994.  Consultations were requ ested on 25 July 2003 concerning the provisional 
countervailing measures of the EC
1, and on 25 August 2003 concerning the definitive countervailing 
                                                      
1 WT/DS299/1, G/SCM/D56/1, G/L/641.  WT/DS299/R 
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measures of the EC2, respectively.  The consultations were  held with the EC in Geneva on 
21 August 2003 and 8 Octobe r 2003.  These consultations failed to  resolve the dispute between the 
parties.   As a result of the failure to resolve the di spute, the Government of Korea requests the 
establishment of a panel pursuant to Article 6 of the DSU,  Article XXIII of the GATT 1994, and 
Article 30 of the SCM Agreement  regarding the EC's provisional and definitive countervailing 
measures against DRAMS from Korea.  The Govern ment of Korea requests that the panel make 
findings that the EC has acted inconsistently with its obligations under Articles 1, 2, 10, 12, 14, 15, 
19, 22 and 32 of the SCM Agreement, as well as Article VI:3 of the GATT 1994.  Specifically, the 
Government of Korea makes claims under the following: 
  1. Article 1.1 of the SCM Agreement because, inter alia , the EC failed to demonstrate 
the existence of a financial contribution by the Government of Ko rea with respect to 
each distinct financial transaction at issu e in its anti-subsidy investigation;  
 
 2. Article 1.1 of the SCM Agreement because, inter alia , the EC failed to demonstrate 
that every private financial institution invol ved in its anti-subsidy investigation was 
under the direction or entrustment of the Government of Korea;  
  3. Articles 1.1 and 14 of the SCM Agreement because, inter alia , the EC failed to 
demonstrate that a benefit was conferre d on the respondent Hynix Semiconductor, 
Inc., given available market be nchmarks among Hynix's creditors; 
  4. Articles 1.1 and 14 of the SCM Agreement because, inter alia , the credit assessments, 
assumptions about loan forgiveness and defau lt, and other related financial analyses 
applied by the EC to determine the nature of alleged benefit to  Hynix Semiconductor, 
Inc. are inconsistent with its obligations under the SCM Agreement; 
  5. Articles 1 and 2 of the SCM Agreement because, inter alia , the EC imposed an 
improper burden of proof on respondents, namely the Government of Korea and 
Hynix Semiconductor, Inc., reached conclusi ons without adequate evidentiary basis, 
and thereby failed to base its decisions on affirmative, objective, and verifiable 
evidence; 
  6. Article 2 of the SCM Agreement because, inter alia , the EC did not establish that all 
of the alleged subsidies were specific to  the respondent Hynix Semiconductor, Inc., 
on the basis of positive evidence; 
  7. Article 12.7 of the SCM Agreement because, inter alia , the EC improperly applied 
"facts available" instead of consid ering the information on the record; 
  8. Articles 14 and 19.4 of the SCM Agre ement and Article VI:3 of the GATT 1994 
because, inter alia , the EC failed to calculate properly the amount of the alleged 
subsidies in terms of benefit to the respondent Hynix Semiconductor, Inc., by 
inappropriately treating certain financing a nd debt restructuring as a grant, by failing 
to measure the benefit conferred by the provision of export insurance within the 
parameters of Annex I(j) of the SCM Agreem ent, and by using an inappropriate sales 
denominator for determining per unit subs idization.  These failures resulted in 
countervailing duties levied in excess of  that permitted under the SCM Agreement 
and the GATT 1994;   
 
                                                     
 
2 WT/DS299/1/Rev.1/Add.1, G/SCM/D56/1/Rev.1/Add.1, G/L/641/Rev.1/Add.1. WT/DS299/R 
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 9. Article 15.1 of the SCM Agreement, because, inter alia  the EC's injury and causation 
determinations were not based on positiv e evidence and an objective assessment of 
the effects of allegedly subsidized imports, and were not based on the most recent evidence available to the EC; 
 
 10. Article 15.2 of the SCM Agreement, because, inter alia , the EC's injury and causation 
determinations improperly assessed the significance of the volume and price effects of subject imports, failed to take due acc ount of relevant facts when examining the 
existence of a significant increase in subject imports, and also failed to properly determine the undercutting ma rgin of subject imports; 
 
 11. Article 15.4 of the SCM Agreement, because, inter alia , the EC improperly assessed 
the overall condition of the domestic industry,  did not base its injury determination on 
"all relevant economic factors and indices," and constructed artificial profit margins;  
 
 12. Article 15.5 of the SCM Agreement, because, inter alia , the EC failed to demonstrate 
the requisite causal link between subject imports and injury, improperly assessed the 
role of other factors, and improperly attri buted the effect of other factors to the 
allegedly subsidized imports; 
  13. Article 22.3 of the SCM Agreement because, inter alia , the EC failed to provide all 
relevant information on the matters of fact and law and reasons fo r its determinations; 
and 
  14. Articles 10 and 32.1 of the SCM Agreement because, inter alia , the definitive 
countervailing duties imposed by the EC ag ainst DRAMS originating in Korea were 
not in accordance with the relevant provisi ons of the SCM Agreement or the relevant 
provisions of the GATT 1994. 
  The Government of Korea requests that the pa nel be established with the standard terms of 
reference set forth in Article 7 of the DSU . 
 
 The Government of Korea further requests that  this request be placed on the agenda for the 
meeting of the Dispute Settlement Body on 1 December 2003.  
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