. /.   WORLD TRADE  
ORGANIZATION  WT/DS336/19 
10 September 2008 
 (08-4241) 
 Original:   English 
  
 
JAPAN – COUNTERVAILING DUTIES ON 
DYNAMIC RANDOM ACCESS MEMORIES FROM KOREA 
 
Recourse by Korea to Article 21.5 of the DSU
 
 
Request for the Establishment of a Panel  
 
  The following communication, dated 9 Septembe r 2008, from the delegation of Korea to the 
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 21.5 of the DSU. 
 
_______________  
 
 
On 17 December 2007, the Dispute Settlement Body ("DSB") adopted its recommendations 
and rulings in the dispute Japan – Countervailing Duties on Dynamic Random Access Memories from 
Korea  (WT/DS336).  At the DSB meeting of 15 January 2008, Japan announced its intention to 
comply with the recommendations and rulings of the DSB.  Korea and Japan were not able to reach an 
agreement on the reasonable period of time, and on 25 February 2008, Korea requested that the 
reasonable period of time be determined through bind ing arbitration pursuant to Article 21.3(c) of the 
Understanding on Rules and Procedures Go verning the Settlement of Dispute  ("DSU").  The 
arbitrator determined that the reasonable pe riod of time for Japan to comply with the 
recommendations and rulings of the DSB in this di spute would be eight months and two weeks from 
the date of the adoption of the Panel and Appellate Body reports, expiring on 1 September 2008.  This 
arbitration report was circulated to WTO members on 5 May 2008 (WT/DS336/16). 
 
On 29 August 2008, Japan issued Cabinet Order No. 266 published in the Special Issue 
No. 189 of the Official Gazette, modifying the c ountervailing duties imposed on DRAMs from Korea 
in response to the recommendations and rulings of th e DSB.  Japan also reported to the DSB on that 
date that it had complied with the recommendations and rulings of the DSB in a manner consistent 
with its WTO obligations. 
 
Korea strongly disagrees.  Korea considers th e determination by Japan, as modified on 
29 August 2008, to be inconsistent with Japan's obligations under the relevant provisions of the 
General Agreement on Tariffs and Trade 1994  ("GATT 1994") and the Agreement on Subsidies and 
Countervailing Measures  ("SCM Agreement"). 
 As a result of the disagreement between Korea and Japan as to the existence or consistency 
with covered agreements of measures taken to co mply with the recommendations and rulings of the 
DSB, and in accordance with paragraph 1 of the "Confirmed Procedures" agreement between Korea 
and Japan of 9 September 2008 regarding this disp ute, Korea requests the establishment of a panel, 
pursuant to Articles 6 and 21.5 of the DSU, Artic le XXIII of the GATT 1994, and Article 30 of the 
SCM Agreement, regarding Japan's counterva iling measures against DRAMS from Korea.   
 WT/DS336/19 
Page 2  
 
  Korea respectfully requests that the panel: 
 1. find that the measures adopted by Japan on 29 August 2008 do not comply with the 
recommendations and rulings of the DSB in this dispute, and 
2. find that Japan has acted inconsistently with  its obligations under Article 3.10 of the 
DSU, as well as Articles 1.1, 14, 19 and 21 of the SCM Agreement.  Specifically, Korea makes claims under the following: 
(a) Article 3.10 of the DSU, because Japan has failed to engage in the dispute-
settlement procedures mandated by the DSU in  good faith in an effort to resolve 
the dispute, and instead has made incorrect and misleading statements to the Panel, the Appellate Body, and the Arbitrator appointed under Article 21.3(c) of the DSU, and has also continued to impose countervailing duties on imports of 
DRAMs exported by respondent Hynix Se miconductor Inc. ("Hynix") based on 
arguments that have no logical basis and fail to comply with the recommendations and rulings of the DSB in this dispute.  
(b) Article 1.1 of the SCM Agreement because, inter alia , Japan failed to demonstrate 
the existence of a financial contribution by the Government of Korea within the 
meaning of Article 1 of the SCM Agre ement, when the alleged financial 
contribution was undertaken pursuant to a financial analysis that, as Japan has conceded, was "commercially reasonable." 
(c) Articles 1.1 and 14 of the SCM Agreement because, inter alia , Japan (1) failed to 
demonstrate that a benefit was confe rred on Hynix by the alleged subsidy 
transactions (which, as noted above, were  undertaken pursuant to a financial 
analysis that, Japan has c onceded, was "commercially reasonable"); (2) failed to 
identify the relevant market and market  benchmark for purposes of determining 
whether a benefit was conferred and measuring the amount of the benefit; (3) assigned no value to the equity that the creditors received in the restructurings 
for purposes of calculating the amount of the benefit; and (4) otherwise calculated 
the amount of the alleged benefit in a manne r inconsistent with the requirements of 
Articles 1.1 and 14 of the SCM Agreement. 
(d) Articles 19 and 21 of the SCM Agreement because, inter alia , Japan is improperly 
levying a countervailing duty on imports wh en there is no longer a benefit from 
the alleged past subsidies, and the dut y is not necessary to counteract alleged 
subsidization. 
 Korea continues to reserve its rights in resp ect of all other aspects of Japan's purported 
compliance with its obligations in this case.   Korea requests that the panel be established w ith the standard terms of reference set out in 
Article 7 of the DSU.   
 
 Korea further requests that the current request be placed on the agenda for the meeting of the 
DSB on 23 September 2008.  
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