. /.  WORLD TRADE  
ORGANIZATION  WT/DS108/33 
30 November 2005 
 (05-5652) 
 Original:   English 
  
 
UNITED STATES – TAX TREATMENT FO R "FOREIGN SALES CORPORATIONS" 
 
Second Recourse to Article 21.5 of the DSU by the European Communities
 
 
Notification of an Other Appeal by the European Communities  
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 23(1) of the Working Procedures for Appellate Review  
  
 The following notification, dated 28 November 2005, from the Delegation of the European 
Commission, is being circulated to Members.  
_______________ 
 1.  Pursuant to Article 16.4 and Article 17 of the DSU and to Rule 23.1 of the Working 
Procedures for Appellate Review, the European Co mmunities submits its Notice of Other Appeal on 
certain issues of law in the Report of the Panel on United States – Tax Treatment for “Foreign Sales 
Corporations”: Second recourse to Article 21. 5 of the DSU by the European Communities
1 and 
certain legal interpretations  developed by the Panel. 
 
2.  The European Communities agrees with the Panel’s findings of continued violation and 
inconsistency and its conclusion that there is a c ontinuing failure to implement DSB recommendations 
and rulings, as well as with the Panel’s rejection of the US procedural defences.  However, if the 
Appellate Body were to uphold any of the US clai ms on appeal, the European Communities considers 
that it would become necessary for the Appellate Body  to consider certain other issues in order to 
resolve this dispute.  For this reason, the Eur opean Communities requests the Appellate Body, in the 
event that it should reverse any of the Panel’ s findings, to consider the following claims: 
 
(a) By not entirely withdrawing FSC and ETI subsidies, the United States has failed to 
comply with its obligations under Article 4.7 of the SCM Agreement ;2 
 
(b) By not entirely withdrawing FSC and ETI subsidies and maintaining the less 
favourable treatment of imported as compared  to domestic products, the United States 
has failed to comply with its obligations under Articles 19.1 and 21.1 of the DSU .3 
 
3.  Furthermore, for the case the Appellate Body  considered that the Panel was in error in 
concluding that no new recommenda tions under Article 4.7 of the SCM Agreement  or Article 19.1 of 
the DSU are needed,4 the European Communities respectfully requests the Appellate Body to correct 
the error and issue the necessary recommendations.   
                                                      
1 WT/DS 108/RW2, circulated on 30 September 2005. 
2 Which the Panel did not address in its Report (see WT/DS108/29, 14 January 2005). 
3 On which the Panel exercised judicial ec onomy (see e.g. Panel Report, footnote 84). 
4 See e.g. Panel Report, paras. 7.37-7.46, 7.49, 7.52-7.58, 8.2. WT/DS108/33 
Page 2  
 
 4.  The European Communities considers that if the Appellate Body were to find that the Panel 
had erred, this would mean that the Panel ha d not conducted its assessment of the matter in 
accordance with Article 11 of the DSU and had not contributed to an effective resolution of the 
dispute within the meaning of Article 3 of the DSU.  
 
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