WORLD TRADE  
ORGANIZATION  WT/DS345/1 
G/L/779 
G/ADP/D68/1 G/SCM/D71/1 
12 June 2006 
 
(06-2780) 
 Original:   English 
 
 
 
UNITED STATES – CUSTOMS BOND DIRECTIVE FOR MERCHANDISE 
SUBJECT TO ANTI-DUMPING/COUNTERVAILING DUTIES 
 
Request for Consultations by India  
 
 
 The following communication, dated 6 June 2006, from the delegation of India to the 
delegation of the United States and to the Chairman of the Dispute Settlement Body, is circulated in 
accordance with Article 4.4 of the DSU. 
 
_______________ 
 
  My authorities have instructed me to request consultations with the United States of America 
(the "United States") pursuant to Article 4 of the Understanding on Rules and Procedures Governing 
the Settlement of Disputes , Article XXII:1 of the General Agreement on Tariffs and Trade  1994 (the 
"GATT"), Article 17 of the Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade 1994  (the "AD Agreement") and Article 30 of the Agreement on Subsidies and 
Countervailing Measures  (the "Subsidies Agreement") with r espect to the Customs Bond Directive 
99-3510-004 on Monetary Guidelines for Setting Bond Amounts issued on 23 July 1991, as amended 
by the Amendment to Bond Directive 99-3510- 004 for Certain Merchandise subject to 
Antidumping/Countervailing Duties dated 9 July 2004
1, and any clarifications and amendments 
thereof2 (together, the "Amended Bond Directive"). 
 On 27 January 2004, pursuant to Section 732 of the Tariff Act of 1930, as amended (the 
"Act"), the United States initiated an anti-dumping inv estigation (the "investigation") with respect to 
imports of certain frozen and canned warmwater shrimp
3 from India and certain other countries.  On 
28 July 2004, pursuant to Section 733 of the Act, the United States preliminarily determined that 
                                                      
1 Posted on the Internet Website of the United States Customs and Border  Protection Service at 
http://www.cbp.gov /xp/cgov/import/add_cvd/bonds/07082004 .xml, as accessed on 26 May 2006. 
2 These include, for example, (i) the document entitled "Current Bond Formulas", posted on the 
Internet Website of the United States Customs a nd Border Protection Service at http://www.cbp.gov 
/linkhandler/cgov/import/communicati ons_to_trade/pilot_program/current _bond.ctt/current_bond.doc, on 
9 July 2004, as accessed on 26 May 20 06; and (ii) the document entitled "Cla rification to July 9, 2004 Amended 
Monetary Guidelines for Setting Bond Amounts for Special Categories of Merchandise Subject to Antidumping 
and/or Countervailing Duty Cases", posted on the Internet Website of the United States Customs and Border Protection Service at  http://www. cbp.gov/linkhandler/cgov/import/add _cvd/bonds/bond_clarification.ctt/ 
bond_clarification.doc, as accessed on 26 May 2006. 
3 The investigation was initiated pursuant to the Initiation of Antidumping Duty Investigations: Certain 
Frozen and Canned Warmwater Shrimp from Brazil, Ecuador, India, Thailand, the People's Republic of China 
and the Socialist Republic of Vietnam , 69 Fed. Reg. 3876 (27 January 2004). WT/DS345/1, G/L/779,  
G/ADP/D68/1, G/SCM/D71/1 Page 2 
 
 
  frozen and canned warmwater shrimp imported from India was being dumped
4 (the "Preliminary 
Determination").   On 23 December 2004, the Un ited States published its final determination of 
dumping5, which was subsequently amended6 to include only frozen warmwater shrimp (the "subject 
merchandise") and to exclude ca nned warmwater shrimp (the "F inal Determination").  On 
1 February 2005, the United States imposed defi nitive anti-dumping measures and required importers-
of-record in the United States ("importers") to ma ke cash deposits equal to the estimated weighted-
average dumping margins on entries of the subj ect merchandise from India into the United States.7 
  Prior to the Amended Bond Directive, importe rs including those of merchandise subject to 
anti-dumping duties or countervailing duties were  required to give continuous entry bonds 
("continuous bonds") only as general security for compliance with customs regulations.  Under the 
Amended Bond Directive, however, the United States required importers of ca tegories of merchandise 
subject to anti-dumping or countervailing duties that are designated as "Special Categories" to replace 
their existing continuous bonds with enhanced conti nuous bonds that would, in addition, cover the 
total estimated anti-dumping duties or countervailing duties on the value of imports for the previous 
12 months (the "enhanced bond requirement").  At th is time, agriculture and aquaculture merchandise 
are the only categories of merchandise designate d as a Special Category under the Amended Bond 
Directive.  Within this Special Category, shrimp  has been designated as a "Covered Case" in which a 
different standard or formula for determining th e bond amount will be applied.  The designation of 
agriculture and aquaculture products as the only Special Category and shrimp as the only Covered 
Case emphasizes the arbitrary and discriminatory character of the Amended Bond Directive. 
  Pursuant to the Amended Bond Directive, th e United States has imposed the enhanced bond 
requirement on importers of the subject merchandise from India.   
 
 The Government of India considers that the Am ended Bond Directive is inconsistent as such 
with the provisions of:  (a) Article 18.1 of the AD Agreement together w ith Articles VI:2 of the GATT and Article 1 of 
the AD Agreement insofar as th e enhanced bond requirement is a specific action against 
dumping not in accordance with the provisions of the AD Agreement  and with Article 32.1 of 
the Subsidies Agreement together with Artic les VI:3 of the GATT and Article 10 of the 
Subsidies Agreement insofar as it is a specifi c action against subsidization not in accordance 
with the Subsidies Agreement; 
 (b) Articles VI:2 and VI:3 of the GATT insofar as it results in charges to importers in excess of 
the margin of dumping or in excess of the amount  of the subsidy determined to have been 
granted, as the case may be; 
 (c) Note 1 Ad paragraphs 2 and 3 of Article VI of the GATT insofar as the enhanced bond 
requirement is unreasonable as security for the payment of anti-dumping duty or countervailing duty; 
                                                     
 
4 Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final 
Determination, and Negative Critical Circumstances De termination:  Certain Frozen and Canned Warmwater 
Shrimp from India , 69 Fed. Reg. 47111 (4 August 2004). 
5 Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of 
Critical Circumstances:  Certain Frozen and Canned Warmwater Shrimp from India , 69 Fed. Reg. 76916 
(23 December 2004). 
6 Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty 
Order:  Certain Frozen Warmwater Shrimp from India , 70 Fed. Reg. 5145 (1 February 2005). 
7 Id.  WT/DS345/1, G/L/779,  
 G/ADP/D68/1, G/SCM/D71/1  Page 3 
 
 
   
(d) Articles 7.1, 7.2, 7.4 and 7.5 of the AD Agr eement and Articles 17.1, 17.2, 17.4 and 17.5 of 
the Subsidies Agreement to the extent th at the enhanced bond requirement may be 
characterized as a provisional measure or is a pplied prior to the imposition of definitive anti-
dumping duties; 
 (e) Articles 9.2 and 9.3 (including Article 9.3.1)  of the AD Agreement and Articles 19.3 and 19.4 
of the Subsidies Agreement insofar as the only permissible measure that may be taken after 
the imposition of anti-dumping duties pursuant to Article 9.1 or the imposition of 
countervailing duties pursuant to Article 19.2, as the case may be, is the collection of duties in 
appropriate amounts not exceeding the margin of  dumping or the amount of the subsidy found 
to exist; 
 (f) Article 18.4 of the AD Agreement, Artic le 32.5 of the Subsidies Agreement and 
Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization 
insofar as the United States has failed to comply w ith its obligation to ensure conformity of its 
laws, regulations and administrative procedures with the provisions of each of these agreements; 
 (g) Article X of the GATT insofar as the Amended Bond Directive (including any clarifications 
and amendments), has not been published in the Federal Register or the Customs Bulletin of 
the United States and Article 18.5 of the AD Agreement and Article 32.5 of the Subsidies Agreement insofar as the Amended Bond Direc tive has made changes in its laws and 
regulations and in the administration of its laws  and regulations that are relevant to these 
agreements and about which the United States has not informed the relevant Committees; 
 
(h) Article II of the GATT insofar as the enhan ced bond requirement results in imposition of 
charges in excess of those imposed on the date  of the entry into force of the GATT or 
mandatorily required by legislation in force on th at date and Article I of the GATT insofar as 
the enhanced bond requirement will be applied to imports of agriculture and aquaculture 
products designated as Special Ca tegory merchandise from those Members that are subjected 
to antidumping or countervailing duties; and 
 (i) Article XI of the GATT to the extent that the enhanced bond requirement may be 
characterized as a restriction other than a duty,  tax or other charge and Article XIII of the 
GATT to the extent that it is applied in a discriminatory manner. 
 
 For the reasons stated above, the Government of  India also considers that the enhanced bond 
requirement under the Amended Bond Directive as a pplied to importers of the subject merchandise 
from India is inconsistent with Articles I, II, VI:2 (including Note 1 Ad Paragraphs 2 and 3 of 
Article VI), XI and XIII of the GATT and Articles 1, 7. 1, 7.2, 7.4, 7.5, 9.2, 9.3, 9.3.1 and 18.1 of the 
AD Agreement.  
 
The Government of India reserves its right to ra ise additional factual claims and legal matters  
during the course of the consultations.   We look forward to receiving your reply to the present request and to fixing a mutually 
convenient date and venue  for consultations. 
 
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